State’s role needs to be clarified

Vietnam needs to clearly define the role of the State in the market-driven economy as the country is deeply integrating itself into the global economy, said experts at a seminar in Hanoi this week.

The seminar on Vietnam’s position in the integration process after 5 years of Vietnam’s membership in the World Trade Organization (WTO) was co-organized by the Vietnam Chamber of Commerce and Industry (VCCI) and Multilateral Trade Assistance Project (MUTRAP) in Hanoi.

“We should not be attached to the old economic mechanism while developing a market economy,” economic expert Pham Chi Lan said. “The roles of the State and businesses in the economy must thus be clearly defined.”

But Lan admitted that this would be difficult because State-owned enterprises are holding a dominant role and governance by administrative orders is still popular.

“The catchphrase of all sectors is ‘thanks to the State’s support’. This means that the general perception of the society remain unchanged compared to the old time,” she said.

According to Vo Tri Thanh, deputy head of the Central Institute for Economic Management, there are still multiple issues relevant to the State’s responsibility in the integration process.

The quality of the system of laws and regulations is still low, he said, leading to different understandings and improper application.
There isn’t any significant improvement in legal enforcement compared to the past. “The State agencies still lack a sense of responsibility in legal enforcement,” Thanh said.

He said Vietnamese society had reached a higher level with widespread development of information technology and a rising middle class.

This requires policymakers to practice transparency.

“Society and investors demand transparency and predictability from issued policies. Therefore, policymakers need to communicate in a transparent manner,” he said.

Claudio Dordi, team leader of MUTRAP, gave specifics about the State’s role lagging behind economic development.

He said State management capability indicators had continuously dropped over time.
Citing data of the World Economic Forum, he said Vietnam’s legal framework efficiency had worsened, falling from the 57th position in 2009 to 74th last year.

The Government’s transparency has also plunged to No. 91 in 2011 from No. 58 in 2007.

Meanwhile, State regulation burden has moved down 8 places to No. 113 last year compared to No. 105 in 2007.

Dordi noticed that enterprises’ competitiveness had improved, while the Government’s regulation system is going downhill.

He cited Decree 46 that restricts employment of foreign laborers and automatic import licensing to reduce the trade deficit as a drawback.

Speaking at the seminar, Truong Dinh Tuyen, former leader of the WTO negotiation delegation, shared his hope that the management mechanism will improve to meet integration requirements.

Lower rates fail to boost shares

Shares on the nation's stock exchanges extended the previous day's losing streak during yesterday's session despite the announcement of Government moves to reduce interest rates.

However, some money flowed into the market towards midday, easing the pace of decline.

"This is the right time to start lowering interest rates," said Government Office chairman Vu Duc Dam at a meeting on Tuesday. Shortly thereafter, State Bank of Viet Nam Governor Nguyen Van Binh announced that key interest rates would be lowered by 1 per cent in a few days.

"Year-on-year inflation rate will likely continue to decline in the coming months, creating a better outlook for interest rates in the next quarter," commented Kim Eng Securities Co analysts in a note, adding that the information helped key indices recover from earlier losses yesterday morning.

Of the nine listed banks on both bourses, only Habubank (HBB) and Sai Gon – Ha Noi Bank (SHB) rose to their ceiling prices. Meanwhile, shares of Eximbank (EIB), Sacombank (STB) and Asia Commercial Bank (ACB) all bottomed out.

While bank stocks retreated, a number of real estate shares advanced, including Licogi (LCG), Tu Liem Urban Development (NTL) and Sudico (SJS).

On the HCM City Stock Exchange, the VN-Index retreated by 0.2 per cent to close at 444.02 points. The value of trades reached VND1.4 trillion (US$66.7 million), a 36-per-cent decline from the previous day's level. The volume of trades reached nearly 101.3 million shares.

The VN30, which tracks HCM City's 30 top stocks by capitalisation and liquidity, shed 0.5 per cent to close at 505.90. Software giant FPT, Vinamilk (VNM) and real estate developer Hoang Anh Gia Lai (HAG) were the only three of the 10 leading shares by capitalisation to gain, each advancing by 0.5-2.7 per cent.

Military Bank (MBB) was the most-active share on the HCM City bourse on a volume of 9.6 million shares, followed closely by Eximbank with a volume of 9.3 million.

Trading on the Ha Noi Stock Exchange was mixed, but the HNX-Index concluded the day down 0.23 per cent to 75.03 points. Value reached VND1.1 trillion ($52.4 million) on a volume of just over 118 million shares, while losers outnumbered gainers by 215-108.

HBB was the most-active share nationwide with 27.3 million changing hands, but SHB also saw active trading of over 11 million shares.

Aeon to build first trade center in Vietnam

Aeon Vietnam JSC, an affiliate of the Japan’s leading retailer Aeon Co Ltd, yesterday announced the construction project of its very first trade center in Vietnam, which will be built in Ho Chi Minh City’s Tan Phu District.

The US$109-million project, namely Aeon-Tan Phu Celadon, will begin construction this September, and set to reach completion by early 2014, said Aeon Vietnam CEO Nishitohge Yasuo.

As much as 90 percent of the goods on sale inside the center will be domestically sourced, and the remaining are imports from Japan, and other countries, he added.

Last November, Nagahisa Oyama, CEO of Aeon Co Ltd, told the Saigon Times that Aeon has plans to develop an extensive network including at least seven shopping centers in Vietnam, with the Aeon-Tan Phu Celadon being the inaugural one.

In related news, the People’s Committee of the southern province of Binh Duong yesterday granted license to the Becamex Tokyu Co Ltd to begin construction on the Tokyu Binh Duong urban project.

Becamex Tokyu, a joint venture between Binh Duong-based Becamex IDC Corporation and Japan’s Tokyu Group, will set up a world-class trade center-services-housing-entertaining complex in the Binh Duong industry-service-urban complex.

Becamex Tokyu has broken ground on the project, which will span around 714,500 square meters, with a total investment of $1.2 billion.

Foreign investors eye Vietnam’s weak banks

Many foreign investors are paying special attention to Vietnam’s project to restructure banks and will seek opportunities to buy weak banks, predicts an Ernst & Young’s expert.

According to Keith Pogson, Ernst & Young’s Asia-Pacific Financial Services Leader, there are several reasons for the investors’ interest in buying Vietnam’s unhealthy banks.

Firstly, in the face of the difficulties of the global economy, a large population together with high GDP growth and increasing average per capita income makes Vietnam an attractive destination.

Secondly, a scattered banking industry with the absence of a leading bank has opened up the opportunity to vie for market leadership.

What is more, potential overseas investors are fully aware of their competitive advantage in techniques, products and technology.

Foreign investors’ tendency to buy Vietnam’s weak banks has been increasing, but it should be accompanied by Vietnam's reform policies. Otherwise, investors will find the market attractive but full of risk, he is cited as saying.

However, not many investors have bought stakes in local banks. Pogson says they are waiting for likely improvements in the legal framework governing mergers and acquisitions (M&A) and setting foreign ownership ratios which are now at a mere 15 to 20 percent.

Presently, economic difficulties in many countries, especially in Germany, France and Italy, have prevented foreign banks from investing overseas.

Potential investors could be banks of Australia, America, Canada and Asia, he says.

Buying weak banks could not only help them settle their problems but also help foreign banks gain a foothold in the local market. Once regulations on mergers and acquisitions are clearer, overseas investment into the banking market will gather speed.

Nghe An province’s Van Phan fish sauce begins to export

The first 1,800-litre batch of Van Phan fish sauce from central Nghe An province has been exported to Malaysia.

This is a famous brand of fish sauce widely used in Nghe An province and the northcentral region.

Vo Van Dai, Director of Van Phan seafood joint stock company, said it annually produces one million litres of fish sauce and always improves its quality to meet food safety requirements for export.

Van Phan fish sauce is also much sought after in Laos.

Vietnam-Sri Lanka business forum on cooperation and investment

The business communities of Vietnam and Sri Lanka are keen to expand investment and cooperation in many areas.

This view was shared at a Vietnam-Sri Lanka business forum in Hanoi on March 5.

Hoang Van Dung, Vice Chairman of Vietnam Chamber of Commerce and Industry (VCCI) said the two countries’ import-export turnover has risen from US$50.5 million in 2009 to US$113.2 million in 2011.

Vietnam exports machinery, silk, cloth, plastics and tea, rubber to Sri Lanka and it imports feed for cattle, garments and textiles from the country, he added.

Ivan Amarasinghe, Sri Lankan Ambassador to Vietnam, said Sri Lanka has an open economy. Therefore, trade cooperation between the two countries will be promoted through their business communities.

The forum, co-organized by the VCCI and the Ceylon Chamber of Commerce, aims to create opportunities for the two business communities to cooperate in the fields of medicine, health care, real estate, seafood, agricultural machinery, technology, chemicals, paper and food production.

SME networking programme launched

The Small-and-Medium-sized Enterprise (SME) networking and mentoring programme was launched in Ho Chi Minh City on March 3. It is one of 38 projects that have been financed by the US Department of State.

The programme is expected to be carried out from now until the end of 2012 by a group of scholars and students of Fullbright and Humphrey scholarship programmes under the auspices of the US embassy in Vietnam.

Selected executives of SMEs in Hanoi and HCM City will attend a series of regular seminars discussing pressing issues facing their business. The programme’s mentors will go along with them to put forth timely assessments and solutions to difficulties they are dealing with.

PM urges freeze on new economic and industrial zones

Prime Minister Nguyen Tan Dung has asked authorities to halt the licensing for new industrial, export-processing and economic zones (IPEZs).

Under the PM’s new instruction, the Ministry of Planning and Investment (MPI) will work with relevant ministries and agencies to evaluate mechanisms and policies for developing IPEZs in order to draft amendments to Decree 29 governing IPEZs and submit them to the PM by the third quarter of this year.

The MPI is also asked to work with ministries, agencies and localities to assess the implementation of IPEZ planning and propose punitive measures for those that are operating ineffectively operation and causing environmental pollution.

The PM also urged authorities to consolidate the organizational structure of IPEZ management agencies at all levels and diversify capital resources to develop infrastructure for IPEZs.

Work halted on luxury complex

Construction of six apartment blocks in HCM City's most upscale residential area in District 2, Diamond Island, has been suspended for various violations, local authorities are quoted by Tuoi Tre (Youth) newspaper as saying.

District 2 construction inspectors confirmed Thursday that the Binh Trung Tay Ward's People's Committee had suspended construction of the buildings in the Diamond Island project.

Each of the buildings, invested in by the Binh Thien An Real Estate Company, has one or two stories exceeding what was approved by the local Department of Construction.

According to the approval, signed on June 26 2009, the residental area at the Sai Gon – Giong Ong To junction in District 2 would be built on eight ha of land.

The approval allowed the six apartment blocks to have 16 to 25 stories. The blocks would have a total of 313 apartments and parts of the project will be used for hotels and trading centres.

Officials said they had arranged staff to closely monitor the suspension of the project. District officials would work with inspectors from the Department of Construction to discuss appropriate follow up action.

During a site inspection on February 21, inspectors from the municipal Department of Construction had asked investor to stop work on the entire project. However, the construction continued until February 28.

Leaders of Binh Trung Tay Ward's People's Committee said their inspectors had conducted regular visits to the site. However, due to the insufficient manpower, they had not been able to spot the violation in time.

The violation has been reported to the director of the Department of Construction. A source said the project's investor was preparing to petition the Ministry of Construction for permission to adjust the project's design.

Diamond Island is the only real estate project in HCM City that "dares" to increase its selling prices amidst a stagnant market.

Each apartment is being sold at between half million and more than a million US dollars.

At the end of 2009, apartment prices were announced at between US$300,000 and $3 million. Each wharf on the VND2-trillion ($95 million) island is being sold at $500,000.

Low-cost carrier launches fare cuts

To mark the opening of its new routes linking HCM City with Da Nang and Ha Noi with Nha Trang, VietJetAir is offering an all-in low fare from as low as VND299,000 ($US14) for the booking period from today–April 4.

The promotion month called "Fly and Like" starts today for the travelling period from April 27 to December 29 of this year for all services from and to HCM City, Ha Noi, Da Nang and Nha Trang, excluding holidays, from April 27 to May 2; August 31 to September 3; and December 22 – 25. Bookings are available on the carrier's website www.vietjetair.com, through the call centre at 19001886, or via booking agencies and ticket offices nationwide.

Eletrolux opens new sales facility

Electrolux Viet Nam opened its new facility at Hoang Cau, Dong Da District on Friday.

Occupying an area of 130 sq.m on two levels, the facility displays a range of household appliances in various models. To constantly improve its commitment to customers, Electrolux offers full service from product information to installation to after-sales service.

Over the last 19 years, Electrolux Viet Nam has succeeded in providing consumers easy-to-use home appliances. Electrolux Viet Nam is a well-established premium household brand with three offices in Ha Noi, HCM City and Da Nang.

Producers update gift, decor designs

Members the Viet Nam Gift and Housewares Association's southern region on Friday discussed plans to update their designs for the American and European markets.

At least 100 producers of gifts and home-decor items from southern provinces met at the seminar to identify the most popular trends and colours preferred by European and US importers.

An association official said that local manufacturers were skilled in producing wooden, metal, and rattan indoor and outdoor furniture and home-decor products. The US and European markets prefer ethnic items and personal accessories, according to the association.

Regulators meet as shares continue to build on gains

The nation's stock market last week extended an ongoing rally as market watchdogs met to outline regulatory and market restructuring goals for the remainder of this year pursuant to instructions from the Prime Minister and the Ministry of Finance.

At the meeting, State Securities Commission chairman Vu Bang announced that VietFund Management had applied to establish an open-end fund, which VietFund Management general director Tran Thanh Tan has said would invest in the shares tracked by the VN30 Index.

"This is the first such application ever filed with the commission," Bang said, vowing that basic regulations governing this type of fund were forthcoming.

Closing the week on the HCM City Stock Exchange on Friday, the VN-Index reached 439.60 points, adding 3.8 per cent over the previous week's close.

The VN30 also rose by 5.4 per cent to 503.54 points. The value of trades last week soared by 80 per cent over the prior week, averaging VND1.54 trillion (US$73.3 million) per session.

On the Ha Noi Stock Exchange, the HNX-Index rose by 6.9 per cent to 71.72 points.

The average daily value of trades exceeded VND733 billion (nearly $35 million), a 21.7-per-cent increase over the preceding week.

Banking stocks continued to turn in the best performance during past week, with Eximbank (EIB), Sacombank (STB), Military Bank (MBB) and Habubank (HBB) gaining on heavy trades.

A note from VietCapital Securities Co said that, beginning March 19, Sacombank and Military Bank would be included in the Financial Times' FTSE Viet Nam Index, tracked on the London Stock Exchange.

"The adjustment in the list of FTSE stocks will increase the attractiveness of banking shares due to the demand from exchange-traded funds," the note said, with interest in Sacombank and Military Bank likely to push their prices higher on the domestic market.

Securities, construction and real estate shares also continued gaining last week, although profit-taking took a bite out of more speculative stocks in the mining sector.

The market is expected to see some difficulties in today's session as massive volumes of shares traded last Thursday begin to hit investor accounts.

Capital makes plans for elevated highway

Plans are underway to build an elevated highway in Ha Noi connecting Thang Long Bridge and Mai Dich Flyover which will run along Pham Van Dong Street.

The four-lane highway will have a speed limit of 100kmh.

Thang Long Project Management Board has been assigned by the Ministry of Transport to take charge of setting up the project with capital from the Japan International Co-operation Agency.

Sumitomo sets up steel production joint venture in Vietnam

Japanese Sumitomo group plans to establish a joint venture with the SMC Company in Ho Chi Minh City in Vietnam in April 2012 that will specialize in supplying and distributing steel for major projects.

Sumitomo said it will cooperate with some Japanese companies in producing steel for investors and the SMC Company will be in charge of setting up offices, workshops and warehouses.

Demand for steel in the construction of highways, railways and high-rise buildings is expected to rise by 60 percent to 8 million tonnes in 2013 as compared to 2010.

Sumitomo will focus on producing high-quality steel for use in Vietnam in order to earn around US$125 million in revenue by 2015.

Nippon Steel & Sumikin (NISC) and Marubeni-Itochu Steel (Benichu) are also keen to set up joint venture plants in Vietnam.

Ministry confirms fuel hoarding, promises crackdown

The Ministry of Industry and Trade yesterday confirmed the sudden shutdown and suspected fuel hoarding of many filling stations in Hanoi, Da Nang, Hue, Dak Lak and even Ho Chi Minh City, while promising that it will prevent any speculation activities from proceeding.

At the ministry’s monthly meeting yesterday, deputy Minister of Industry and Trade Nguyen Nam Hai said fuel prices had risen by 18.5 percent, and import volumes had dropped by 31.7 percent, accordingly.

The industry and trade ministry said it will join hands with the Ministry of Finance to provide possible amendments on the current fuel trading regulations such as prices, transport costs, and commission.

Commenting on Tuoi Tre’s recent coverage that revealed the names of many filling stations that have stopped sales on speculation suspicion, Vo Van Quyen, head of the Domestic Market Agency, confirmed that several fuel stations have demanded to stop sales, or cut opening time.

“It is true that many stations no longer want to sell their products,” said Quyen.

“But it is unlikely that the phenomenon will expand into as large a scale as last year.”

As for what to do with the fuel retailers that have limited or stopped their sales, Do Thanh Lam, deputy head of the Market Management Agency, said his institution will crackdown on these establishments.

“The specific penalties will be announced soon,” he said.

Regarding the management of fuel prices in the time to come, Quyen said fuel wholesalers have been selling oil and gasoline under the prime costs.

The A92 gasoline price is more than VND26,000 in China, and the respective figures for Cambodia and Laos are over VND28,000 and VND27,000, he said.

At present, A92 gasoline is on sale at VND20,800 in Vietnam.

“Whether prices are hiked in the future is the Ministry of Finance’s business.”

“Prices will be adjusted in a way that they will not affect the inflation control, which is a difficult task.”

For his part, deputy minister Hai said the Ministry of Industry and Trade will work with the Ministry of Finance in price adjustments.

“It is the finance ministry that will decide whether, and by how much, prices should be hiked.”

Japanese firm’s shipyard to take shape in Cam Ranh

Japanese Oshima Shipbuilding Group has agreed to build a US$180 million shipyard in the central coastal province of Khanh Hoa, according to Nguyen Chien Thang, Chairman of the Khanh Hoa Provincial People’s Committee.

The project will cover a total area of 304 ha of Cam Thinh Dong Commune in Cam Ranh Town. Using the latest technology, the shipyard will build 24 different types of cargo vessels with capacities between 38,000 - 56,000 DWT.

Currently, Oshima cooperates with Nha Trang University in training local personnel as well as through sending apprentices to Japan.

Asia remains key Vietnamese rice importer

Asia is still the major rice importer of Vietnam, accounting for 69.86 percent of the country’s total export volume, according to the Vietnam Food Association (VFA).  

The African market ranked second with 26.42 percent, followed by America, Australia and the Middle East, which accounted for less than 1 percent of the total rice export volume.

The VFA said Vietnam exported only 347,916 tonnes of rice worth more than US$165 million in February, making the total export volume for the first two months of  this year 627,182 tonnes, earning about US$319 million.

The Ministry of Agriculture and Rural Development predicts that the output of the spring-winter crop is estimated at nearly 10.35 million tonnes of rice. However, many farmers in the region are worried about the price of rice falling by VND400-500 per kilo compared to the previous month. Currently, the price of 5 percent broken rice ranges from VND8,200-8,300 per kilo, 15 percent rice VND7,750-7,850 per kilo and 25 percent at VND7,350-7,450 per kilo.

Vietnam's Vincom plans $300 mln overseas bond sale

Vincom Joint Stock Co, Vietnam's leading real estate developer, said on Tuesday that it aims to raise up to $300 million through an issue of convertible bonds in international markets.

The board of the Hanoi-based company had approved the sale of five-year bonds and would decide on the timing of the issue later, depending on market conditions, Chairman Pham Nhat Vuong said in a statement on Monday.

He did not say which market the company would target, but said the bonds would be listed overseas.

Proceeds would be used for investment projects and to supplement working capital, according to the statement on Vincom's website (vicom.com.vn).

Vincom shares were up 3.64 percent at 114,000 dong ($5.5) at 0224 GMT. ($1=20,810 dong)

Vietnam Airlines discounts tickets 50 percent

The national flag carrier, Vietnam Airlines, has announced a promotion featuring attractive discounts of up to 50 percent on both international and domestic routes.

The discounts will be applied to tickets bought between March 8-19 for departures from April 1 to May 31 and between September 5 and October 31. Discounts will not apply for travel on major holidays including the Hung Kings’ festival, Liberation Day (April 30) and International Labour Day (May Day).

During the promotion, passengers traveling between Hanoi and HCM City and from HCM City or Hanoi to Da Nang and Hue can buy one-way tickets for VND777,000. More than 100,000 discounted tickets will be sold on domestic routes, equivalent to 17 percent of the total seats sold during the periond.

More than 80,00 passengers flying the airline’s international routes to 26 destinations in Asia, Europe and Australia will be able to purchase a return ticket at special prices ranging from VND1,025,000 to VND10,410,000, excluding taxes and issuing fees.  

Vietnam-Sri Lanka business forum on cooperation and investment

The business communities of Vietnam and Sri Lanka are keen to expand investment and cooperation in many areas.
 
This view was shared at a Vietnam-Sri Lanka business forum in Hanoi on March 5.

Hoang Van Dung, Vice Chairman of Vietnam Chamber of Commerce and Industry (VCCI) said the two countries’ import-export turnover has risen from US$50.5 million in 2009 to US$113.2 million in 2011.

Vietnam exports machinery, silk, cloth, plastics, tea, and rubber to Sri Lanka and it imports feed for cattle, garments and textiles from the country, he added.

Ivan Amarasinghe, Sri Lankan Ambassador to Vietnam, said Sri Lanka has an open economy. Therefore, trade cooperation between the two countries will be promoted through their business communities.

The forum, co-organized by the VCCI and the Ceylon Chamber of Commerce, aims to create opportunities for the two business communities to cooperate in the fields of medicine, health care, real estate, seafood, agricultural machinery, technology, chemicals, paper and food production.

Concerns remain among business leaders for 2012

Corporate outlook remains optimistic for 2012 overall, but more companies are concerned that their situation will further deteriorate compared to previous years, according to Nielsen Vietnam.

The online Nielsen Business Barometer survey – conducted during the last two months of 2011 – was recently released. It found that 29 percent of firms believed their situation would improve significantly, while 36 percent expected conditions to remain the same and 28 percent estimated the situation would deteriorate in the next 6-12 months.

Two-thirds of business leaders still expect double-digit growth in the next 12 months. Compared to the last wave, more companies expect single-digit growth, according to the survey report.

Among the three key factors companies believed were required for growth in the next 12 months, the survey pointed out that "while increasing consumption and expansion still remain a source for growth, business leaders now talk about mergers and acquisitions (M&A) and exports too."

"Leaders will continue to invest in advertising and expanding businesses in 2012, but will do so with even more caution than in past years," stated the report. Business leaders expect Vietnamese consumers to continue to make purchases when there are promotions, but also to cut back on ‘non-essential' items.

In the next 12-18 months, the rural market was predicted to continue to attract business leaders, though to a lesser extent than the first half of 2011.

The survey also asked questions on business leaders' opinions and consumer reactions on 2011. About two-thirds of the leaders felt business conditions in Vietnam had deteriorated, yet most achieved their targets. However, significantly fewer companies beat their targets in 2011 compared to 2010.

Among the five top concerns, global economic crisis showed up for the first time. The lingering instability in Europe, North America and the growth challenges facing Vietnam brought back a cautious outlook among business leaders and consumers.

Inflation remained a top burning concern among businesses, with more than 59 percent of business leaders worried about it.

Competitive pressure, the dong devaluation and wage growth were also listed among the top concerns of business leaders with 41, 41 and 24 percent expressing worries, respectively.

Leaders recognised that consumers were becoming more discriminating and had an allotment of choices. Therefore, price increases must be carefully planned. Furthermore, more than half of those surveyed said they would look at improving productivity as a solution to inflation.

New industrial zone establishment postponed

Prime Minister Nguyen Tan Dung has ordered a temporary halt to the establishment of new economic zones (EZ), industrial parks (IP) and export processing zones (EPZ) nationwide.

The move is part of the Government’s efforts to improve management and efficiency of the existing ones.

In his instruction, Prime Minister Dung asked the Ministry of Planning and Investment to work closely with relevant ministries and agencies to review the planning, establishment and operation of EZs, IPs and EPZs, then put forward measures to deal with those working inefficiently and causing land waste and environmental pollution.

These ministries and agencies will also have to screen and make adjustments to the economic and industrial zone development plans until 2020 and submit it to the PM in the fourth quarter of this year.

Additionally, Prime Minister Dung instructed the People’s Committees of centrally-run cities and provinces to allocate land for building houses, service and public facilities in service of labourers working for economic and industrial zones.

Work starts on US$1.2 billion property project in south

Becamex Tokyu Co. Ltd. has begun work on a US$1.2 billion property project on about 71.5 hectares in the southern province of Binh Duong, marking the involvement of a first Japanese firm in urban development in Vietnam.

The joint venture between Japan’s Tokyu Corporation and Vietnam’s Becamex IDC Corporation has got financial support from the Bank of Tokyo Mitsubishi UFJ to carry out the Tokyu Binh Duong Garden City project in Binh Duong New City.

The project will develop about 7,500 apartments and houses, plus recreational and service facilities, and offices for lease, Toshiaki Koshimura, chairman of Tokyu Corporation, said at the groundbreaking ceremony in Binh Duong last Friday.

He said Tokyu was the first Japanese company to export expertise and technology for urban development into Vietnam. “We will try our best to build a multi-functional and high quality city to be abreast with the development of Binh Duong Province when becoming the Metropolitan City in 2020.”

The town will be built in a Japanese style, so it will be environmentally friendly.

The project is part of the Binh Duong New City project, which began construction two years ago and covers 1,000 hectares. The project will contribute to the sustainable development of Binh Duong New City. Upon completion, the city will become a new economic and political center of Binh Duong and have 125,000 residents and 400,000 migrant laborers.

Speaking at the ceremony, Nguyen Van Hung, Becamex chairman and CEO, said Tokyu with extensive experience in urban development would work with Becamex to carry out the remaining work of the center of Binh Duong New City.

The involvement of Tokyu in the project is believed to contribute to sustainable development in Binh Duong New City. “With experience and financial potential from the two corporations, beside Tokyu Binh Duong Garden City, we will weigh developing other projects to meet the expansion needs of this City in the coming years,” Hung said.

Becamex and Tokyu, who has 243 affiliates, will continue exploring the possibility of developing satellite urban areas in the province’s industrial development zones, he noted.

The two companies will also mull getting involved in public transportation works such as bus and metro routes to connect the transportation networks of Binh Duong, HCMC and others in the Southern Key Economic Zone.

“I am convinced that Binh Duong New City will develop into a great urban area,” Toshiaki Koshimura said. “In addition to the real estate sector and urban development, Tokyu currently operates metro and bus systems that transport 2.9 million people a day, high-end supermarkets, department stores, hotels, and health recovery and hospitality, information technology and security services.

“We plan to add the above activities to urban development projects to ensure urban areas will have convenient utilities and modern features.”

According to Le Thanh Cung, chairman of Binh Duong Province, Tokyu-Binh Duong Garden City will contribute greatly to economic restructuring and urban development in the province.

At the groundbreaking ceremony, Chairman Cung handed over an investment certificate to Becamex Tokyu Co. Ltd.
 
IDP opens major dairy farm

International Dairy Products Joint Stock Company (IDP) and the Center of Ba Vi Cow and Grassland Research have commissioned a large-scale international-standard dairy farm in the country’s north.

Covering 25 hectares and costing an initial VND40 billion, the Ba Vi dairy farm model includes a cow raising section, a feeding section and a milking section using hi-tech equipment imported from Sweden’s DeLaval.

The dairy farm will help farmers establish a new farm model in an efficient way. IDP will offer free training courses to bring new farming techniques to farmers, small and medium-sized dairy processors, said Phan Si Minh, vice general director of IDP.

The company will supply quality breeder cows for farmers and local dairy farms and an interest-free loan of VND20 million per head, which will be repaid by the milk they get from their cows. It will offer training courses to students of husbandry, Minh added.

Vietnam’s per capita milk consumption is 14.5 liters a year, lower than in regional countries such as Thailand and China with a range of 26 and 30 liters per person a year, according to Minh.

The number of dairy cow farming has grown by 35-40% but milk output has yet to meet domestic demand. But opportunities abound for investors interested in tapping the local fresh milk market.

IDP has been operating three dairy projects over the past few years. The company has invested VND84 billion to raise 20,000-25,000 head by 2015 in Ba Vi Mountain and neighboring areas.

It is also working on a project to enhance food hygiene in husbandry at a total cost of VND45 billion and another to open a training center for local dairy farmers.
 
Lobsters take to the street

Lobsters have long been a delicacy for well-to-do gourmets in the country but in recent days, the crustacean has been found on sale along several streets in HCMC just as a sundry seafood.

Each lobster costs millions of Vietnam dong at luxury eateries but mobile vendors offer it for VND400,000-500,000 per kilo.

A lobster vendor identified as Hien on Cong Hoa Street in HCMC’s Tan Binh District told the Daily she purchased from wholesalers who collect this seafood from farms in the city’s outlying districts of Nha Be and Can Gio.

However, a disease outbreak has hit lobster farms in the nation’s central region and the ratio of deaths among disease-affected lobsters is high, said Tran Dinh Vinh, head of the HCMC marine resources protection and quality assurance bureau.

“We have taken some lobster samples for testing in the city but test results are not yet available. The department will launch a broader inspection of quality of lobsters with unknown origins on sale in town,” said Vinh.

Lobsters are mainly caught offshore by fishermen but thanks to high prices, there have emerged many lobster farms in central coast provinces.
 
Vinachem’s investments put under inspectors’ scrutiny

Vinachem investment operations are under Government Inspectorate radar screens.

The Government Inspectorate’s figures showed that by the end of 2010 more than VND1.030 trillion ($48.07 million) were raised from equitising Vinachem’s member units. However, a number of problems persisted with the use and management of that sum.

Vinachem did not open a specific account at a bank or state treasury office to manage the sum. Instead, it disbursed that chunk of cash in ways not conforming with state regulations. For instance, the group took more than VND404 billion ($19.4 million) from the sum to supplement its chartered capital, without the prime minister’s permission.

Besides, it lent member firms VND193 billion ($9.2 million) with interest rates ranging between 8.04-15 per cent, per year and put VND718 billion ($34.5 million) in banks to enjoy 7.8-14 per cent per year interest rates. This was dubbed as ‘improperly using the sum’ under the spirit of Decision 174/2002/QD-TTg dated December 2, 2002.

The Government Inspectorate also uncovered that in 2007 Vinachem spent VND7.5 billion ($380,000) on procuring shares of Vietnam Industry and Commerce Securities Company (VICS) with a stock value mounting to VND22.29 billion ($1.07 million) by 2010.

“Vinachem was required by the government to divest from VICS. However since selling stock at this point of time is not a wise decision as the stock market is still in a fix, we will divest at an appropriate time,” said Vinachem’s general director Nguyen Dinh Khang.

Noticeably, Vinachem’s DAP Haiphong fertiliser plant with investment exceeding $172 million was found 766 days behind schedule with its EPC package handled by China’s CE-LIA contractor consortium. The Chinese contractors attributed the delay to relevant Vietnamese parties’ faults in site clearance and associated works.

In fact, construction of DAP Haiphong plant kicked-off in July 2003 in Haiphong’s Dinh Vu peninsula.

The EPC contract was inked on October 31, 2005 and the plant became operational in late April 2009. By late November 2011, the plant created jobs for nearly 700 labourers with incomes averaging VND6-7 million ($280-$330) per month.

Surge in rice husk prices, a problem for brick producers  

Price of rice husk has skyrocketed in the Mekong delta recently, because of an increased demand from wood processing factories.  

Nguyen Thanh Tuan, an owner of a brick factory in Mang Thit District in the Mekong delta province of Vinh Long said that price of rice husk has skyrocketed to VND10 million (US$483) a boatload, and the reason being that many factories in the area have succeeded in processing the dry husk into wood briquettes for domestic use, as well as for export.

When price of rice husk jumped, brick producing factories in the Mekong delta provinces of Vinh Long, An Giang and Dong Thap were faced with high rice husk prices, even though the price of bricks had not increased.

Consequently, many brick producers will be forced to reduce capacity or halt production altogether.

Home decoration fair to open in HCM City  

A home decoration fair called LifeStyle Vietnam 2012 will be held at the Tan Binh Exhibition and Convention Center in Ho Chi Minh City on April 18-21.  

Local and international companies operating in the field of handicraft product, home decorations, indoor and outdoor furniture, houseware and storage, home textiles and embroidery, gifts and ethnic products, garden accessories, footwear,  fashion and accessories, toys and supporting services will be represented in 1,200 display booths.

The fair is a chance for buyers and suppliers to introduce their products, seek business opportunities and expand export market.