Koreans to open car factory

South Korea's FPF Vietnam has inaugurated an automobile accessory factory in northern Hai Duong Province's Dai An Economic Zone.

The US$45 million facility, which covers 7ha, is expected to reach an output of 40,000 products in its first operational year.

Maritime Bank sells Prudential

British life insurer Prudential Viet Nam Assurance on Wednesday tied up with joint stock bank Maritime Bank to sell its products through the latter's over 200 branches and transaction offices nation-wide.

The signing of the agreement was witnessed by the visiting UK Foreign Office Minister Jeremy Browne.

Prudential's products and services will be made available by its personnel and bank staff at the branches.

The minister hailed the tie-up as an expression of the strong relationship between the two countries.

DongA Bank's assets rise

DongA Bank has announced its total assets to date reaching VND65.5 trillion (US$3.13 billion).

Established in 1992 with a capital of VND20 billion ($960,000), the bank has since increased that to VND5 trillion ($240 million). It has now more than six million customers, and more than 240 branches and 1,400 ATMs in 55 cities and provinces.

It is also the leading joint-stock bank in terms of card issue with six million so far.

Shoe exhibition for HCM City

The 14th Viet Nam International Shoe and Leather Exhibition will be held in the city from July 19-21, according to the Viet Nam Leather and Footwear Association.

The event is expected to attract the participation of more than 100 foreign and domestic businesses from Italy, Germany, Taiwan, South Korea and Europe.

Export turnover in leather and footwear products reached US$3.4 billion in the first half this year, up 25 per cent year-on-year and meeting half the annual goal.

Lao timber group moves in

A ground-breaking ceremony for a wood processing plant funded by Laos was held in the central province of Ha Tinh on Wednesday.

Speaking at the event, the chairman of the provincial People's Committee, Vo Kim Cu, said factory construction was among activities marking the 50th anniversary of Viet Nam-Laos diplomatic ties.

The US$50 million facility will be operated by Lao's Phone Sack Group and is designed to process 180,000cu.m of wood annually.-

Shipyard to build rescue vessel

The Song Thu shipyard and Dutch Damen Group have begun construction work on a rescue ship for the Viet Nam Marine Police force.

The DN 2000 will be the most modern convenience ship capable of assisting vessels of 2,000 deadweight tonnage (DWT) and working in 12th grade winds (118-132kmh).-

VietJetAir offers discounts

VietJetAir inked a co-operation agreement with Viet Nam Tourism Association (VISTA) in the capital yesterday, following a similar deal with HCM City Tourism Association to offer discounts to HCM City-based tour agencies and holidaymakers.

Accordingly, leading travel agencies and holidaymakers in northern Viet Nam will be able to enjoy discounts of up to 49 per cent on VietJetAir flights over the next six months.

This initiative will introduce low-cost holiday packages to lure travelers to the country's most celebrated destinations.

Northern exchange introduces HNX30 Index

The HNX30, tracking the Ha Noi Stock Exchange's 30 leading shares in terms of market capitalisation and liquidity, will start to operate next Monday, according to an official announcement made yesterday.

The index, with the base date of January 3 and a base point of 100, was estimated to have reached 132.76 points as of July 2.

"We found that investment in the HNX30 is much more profitable than the HNX-Index," said Tran Le Minh, a member of the index management board.

The index is expected to grow by 60 per cent in the coming time.

The number of stocks in each sector will not exceed 20 per cent of the total 30 shares, said exchange Deputy General Director Nguyen Anh Phong. The shares would be revised every six months, in April and October. In addition, special revision would be conducted to eliminate underperforming stocks and ensure other notable stocks would not be neglected.

It accounted for 60.5 per cent of the total Ha Noi market value last year and 55.18 per cent of market capitalisation on December 30.

Shares tracked by HNX30 Index

1. Asia Commercial Bank (ACB)

2. Sai Gon – Ha Noi Bank (SHB)

3. Kim Long Securities Co (KLS)

4. PetroVietnam Construction Co (PVX)

5. Petrovietnam Technical Services Corp (PVS)

6. Viet Nam Construction and Import – Export Corp (VCG)

7. Sai Gon Thuong Tin Real Estate Co (SCR)

8. VNDirect Securities Co (VND)

9. Tien Phong Plastics Co (NTP)

10. Bao Viet Securities Co (BVS)

11. PVI Holdings (PVI)

12. PetroVietnam Southern Gas Co (PGS)

13. Drilling Mud Corp (PVC)

14. Tasco Construction Co (HUT)

15. PetroVietnam Power Land Co (PVL)

16. Bac Ninh Agricultural Products Co (DBC)

17. Song Da Infrastructure Construction Co (SDH)

18. Viet Nam Germany Steel Pipe Co (VGS)

19. Song Hong Construction Co (ICG)

20. Ocean Hospitality and Service Co (OCH)

21. PetroVietnam Northern Gas Co (PVG)

22. IDJ International Financial Investment and Enterprise Development Co (IDJ)

23. Song Da Urban Investment Construction and Development Co (SDU)

24. Petrolimex Petrochemical Co (PLC)

25. An Phat Plastics and Green Environment Co (AAA)

26. Petro Dong Do Co (PFL)

27. Quang Ninh Construction and Cement Co (QNC)

28. Viet Nam National General Export – Import No 1 (TH1)

29. Dai Chau Furniture Co (DCS)

30. Song Da Construction Co No 9 (SD9)

Key regions to develop further
 
Party General Secretary Nguyen Phu Trong has urged the four key economic regions – North, Central, South and southeast, and Cuu Long (Mekong) Delta – to implement solutions to develop further.

Speaking at a conference to review Politburo resolutions for development in the regions, Trong said land issues, employment, education and training, and human resources were key areas for the regions to focus on.

The conference was told that the Politburo's resolutions were timely and necessary – and provided accurate policies to provide a foundation for work to be carried out.

It was stated that these activities had led to important results in socio-economic development, ensuring defence and security in the regions as well as strengthening the political system.

The Gross Domestic Product (GDP) in the regions was reported to be higher than the national average and had exceeded all targets.

The average income per head in 2010 increased significantly. Figures for the Cuu Long (Mekong) Delta and the hilly and mountainous northern region were 2.5 and 3.6 times higher than those in 2004.

Total investment in social development in all regions had also increased.

Apart from these achievements, the Politburo also listed some weaknesses and obstacles facing the four regions.

These included unsustainable, low-quality economic development and competitiveness.

The speed of investment in infrastructure development was also said to be slow and of low quality. Investment mainly depended on the State budget, which took time.

There were also shortcomings in education and training, culture and social activities, health care and human-resources development.

The Politburo instructed the four regions to reform their development models, re-structure their economies, develop sustainably and comprehensively – and invest in building a modern socio-economic infrastructre.

Economic growth should go alongside the development of education, culture and protecting the environment.

Strong defence and security in these regions would ensure a favourable environment for development, the Politiburo said.

Work starts on plant to build car parts

The Viet Nam Tokai company started on a plant to make plastic and rubber spare parts and accessories for automobiles at Da Nang's Hoa Cam Industrial Zone yesterday.

The plant, which covers an area of 47,000sq.m with a total investment of US$10 million, will be put into operation next March and provide accessories for car makers in Viet Nam and the Southeast Asian region.

It's the fifth plant of Tokyo-based Tokai Kogyo in the world and the third in Southeast Asia after Thailand and Indonesia.

"We selected Da Nang as our location for the plant because the city is situated in the central region of Viet Nam and at the end of the East-West Economic Corridor – linking Myanmar, Thailand, Laos and Viet Nam," general director of Viet Nam Tokai company Isao Takahashi said at the ground breaking ceremony yesterday.

Vice chairman of Da Nang people's committee Phung Tan Viet said the plant's project received its business license just after an hour – the quickest case.

"The project will help to boost industrial production and exports in the city. We will offer the most favourable conditions to lure more investors from Japan and the world," Viet said.

The city currently has 54 investment projects from Japan worth $252 million – the fourth biggest investment of the city's total foreign investment capital of $3.45 billion.

Fewer firms, better prices, catfish exporters say

With many catfish exporters repeatedly dumping the market by offering to sell at dirt cheap prices, other local catfish processors and exporters have demanded that strict requirements should be set to ensure that only capable and honest businesses can join the export market and help reverse the slumping prices.

At a meeting Monday, catfish businesses reached a consensus that only exporters that have processing plants and are granted with a code to sell to the EU market should be eligible to ship catfish, a proposal they said will be petitioned to the Ministry of Agriculture and Rural Development.

Vietnamese catfish have been on the world market for more than 10 years, but prices have also constantly fallen over the last decade.

Prices seemingly bottomed out last week, when some exporters attending the Vietfish 2012 exhibition offered to sell at only US$2.2 a kg, a rate other firms said is “incredibly low,” as prior to the fair they had shipped the fish to the EU at $2.8 a kg.

“The throwaway prices have ‘killed’ the reputation of Vietnamese catfish on the global market,” said Nguyen Phat Quang, chairman of Acomfish.

Exporters attending the meeting also urged that a minimum, or floor price, should be levied on catfish exports to every particular market.

Commenting on the proposal, Truong Dinh Hoe, general secretary of the Vietnamese Association of Seafood Exporters and Processors (VASEP), said a floor price will be slapped on catfish shipments to the US.

“There are currently few exporters to this market, and their product quality is quite consistent,” he explained.

Hoe said the minimum export price for the US market will become applicable in early August, while the floor for other markets will take effect a month later.

“As of August 1, catfish export contracts to the US will need to be approved by VASEP for supervision on prices and quality,” he added.

The floor price for the US market has been agreed upon at $3.4 a kg, according to Duong Ngoc Minh, CEO of Hung Vuong JSC.

“However, we will conduct market research in the US and set an official price on July 15, which will be applied for shipments in August,” he added.

As for other markets, the exporters have agreed that the minimum price should be $2.6 a kg for white-flesh catfish filets.

The minimum price, however, is only the first step on the long road to regaining real value for Vietnamese catfish, delegates said at the meeting.

Vo Dong Duc, CEO of Caseamex catfish exporter, proposed that new requirements should be set to eliminate unqualified exporters from the market.

“They do not meet enough conditions for exporting, but have been dumping the market nonetheless,” he said.

“The market has become a mess due to certain brokerage firms who do not have processing plants but are willing to sell at dirt cheap prices.”

Duong Viet Thang, deputy director of South Vina Co, agreed, and reiterated the case of the Brazilian market.

“[Brazil] is an appealing market, but some brokers have totally destroyed it by offering poor quality products at throwaway prices, thus helping to turn customers away from Vietnamese catfish,” he said.

“Some brokerage firms are willing to swindle customers to export several containers of catfish, and shut down their operation, something a real exporter will never do,” he added.

Hoe of VASEP said if the proposal to apply the new requirement on catfish exporters is approved, the number of catfish exporters will be reduced from the current 200 to 65 (those who have processing plants).

“As these 65 firms account for 80 percent of the catfish export turnover, there will be no impact on domestic catfish consumption,” added Hoe.

Russian market offers new opportunities for Vietnamese exporters

Russia will reduce import taxes on some Vietnamese goods by 30-50 percent under its new tariffs and quotas commitments after joining the WTO in December last year.

Vietnamese businesses will find it easier to export agricultural products to the Russian market as the average import taxes on these products will drop to 10.8 percent from the current 13.2 percent.

Deputy Minister of Industry and Trade (MoIT) Hoang Quoc Vuong says the traditional Russian market, with its large consumer base, has great potential for Vietnamese businesses to make a profit. Russia is not a demanding market for staples imported from Vietnam such as garments and textiles, footwear, seafood, tea, coffee, fruit, vegetables, rice and other agricultural products.

The Vietnamese MoIT says Russia depends heavily on imports because the unstable farming caused by less government subsidies and fuel price hikes has left its agricultural sector in the lurch to meet domestic consumer demand.

Russia is considered an open and important market among the 150 nations and territories which import farm products from Vietnam. Its main import items in the first half of this year were seafood, rubber, coffee and cashew nuts.

Russia’s agricultural sector offers a wealth of opportunities for foreign exporters and investors because it has a high demand for milk cows, livestock, seeds and agricultural services.

However, the country’s strict legal regulations on certifying the origins of animals and plants pose huge challenges for exporters.

Complicated payment mechanisms, a lack of market information and tariff and non-tariff barriers, in addition to convoluted legal formalities, have prevented some Vietnamese goods from entering the Russian market.

The bottom line is that a legal corridor should be created to facilitate the exchange of goods between the two countries, particularly agricultural and aquatic products.

To boost the export of farm products to Russia, it is essential to diversify processed products, ensure food hygiene and safety, offer reasonable prices and enhance the exchange of information between State management agencies, Vietnamese exporters and Russian importers.

Deputy Foreign Minister Bui Thanh Son emphasizes the need to introduce new Vietnamese products to the Russian market and focus heavily on trade promotion in order to compete with similar products from other countries.

Vietnamese businesses need to pay more attention to promoting trade through fairs, exhibitions and representative offices in Russia and creating import-export links.

The Vietnamese Ministry of Agriculture and Rural Development (MARD) and its Russian counterpart should work towards signing a Vietnam-Russia Free Trade Agreement (FTA) ahead of schedule, as well as a Vietnam-Russia-Kazakhstan-Belarus FTA later on to establish a legal foundation for Vietnam to boost exports to Russia and reduce its future import surplus.

Vietnamese businesses must also ensure the quality of their products from the production to processing and packaging chains to meet Russia’s strict consumer demand for a wide range of imported products.

Mekong Delta exports 2.7 million tonnes of rice

The Mekong Delta has so far this year shipped abroad 2.7 million tonnes of rice worth US$1.25 billion.

According to provincial Departments of Industry and Trade in the Mekong Delta, the region’s rice is mainly exported to Asian and African markets with an average price of US$464 per tonne.

This year, the region’s rice output exceeded 18 million tonnes thanks to efforts in controlling diseases.

With the high yield, the region has abundant resources for both domestic and export demand.

Producers in the Mekong Delta have paid attention to anti-dumping, market information, rice processing and storage, and the operation of rice exporters.

Many companies have developed specialized crop production and a large number of localities have expanded their rice-growing area in an effort to raise export capacity.

However, the price of the grain has dropped compared to the same period last year.

The Government has decided to buy 0.5 million tonnes of rice for reserve and help stabilize market prices for the producers.

Economic experts have said that the rice price will increase again this month.

Ba Ria-Vung Tau to focus on support industries

The southern province of Ba Ria-Vung Tau should pool resources to develop its support industries and logistics in the future, said Japanese experts.

Experts of the Japan International Cooperation Agency (JICA) made the suggestion during their working session with provincial authorities on July 4.

They delivered their mid-term report on a JICA-funded project researching on building growth poles in the northern, central and southern regions of Vietnam. The project has been implemented in 25 cities and provinces across the country.

For Ba Ria-Vung Tau, the JICA research group gave comments on the province’s development policies encouraging non-monetary and non-tariff preferences, as well as basic policy positions on short-, middle- and long-term strategies.

These are useful recommendations for Ba Ria-Vung Tau when building its future development plans.

Yoichi Sakurada, head of the research group, said that in September and October, the group will interview Japanese small-and medium-sized enterprises and organise a joint seminar on the most suitable cooperation areas between the two countries’ businesses.

Growth rate to be kept at 5.2-5.7 percent: PM

Prime Minister Nguyen Tan Dung has expressed the Government’s strong resolve to maintain the 2012 economic growth rate of 5.2 - 5.7 percent and increase it to 6-6.5 percent in 2013.

Addressing a conference to review the operation of the planning and investment sector in Hanoi on July 4, PM Dung highlighted the country’s achievements in curbing inflation, stabilising the macroeconomy, maintaining a reasonable growth rate, and ensuring social welfare in the first six months of 2012.

In the remaining months of this year, he said, the government will continue giving priority to curbing inflation and driving the macroeconomy towards sustainable development.

He stressed the need to secure social welfare by continuing to create more jobs, reduce poverty, develop education and training, and improve health care.

PM Dung urged the sector to make greater efforts to iron out snags in capital and market accessibility to promote production especially agricultural production, assist small- and medium-sized enterprises, and shore up export and support industries to expand outlet at home and abroad.

He also asked relevant ministries and localities to speed up the disbursement and efficient use of the state budget.

The PM requested the Ministry of Planning and Investment to arrange counterpart capital to speed up the disbursement of Official Development Assistance and tighten the management of this capital source.

Laos company builds wood factory in Ha Tinh

A ground breaking ceremony for a wood processing plant funded by Laos was held in the central province of Ha Tinh on July 4.

The US$50 million facility will be operated by Laos’ Phone Sack Group and is designed to have a capacity of processing 180,000 m3 of wood annually.

Situated on a 30 ha site in the Vung Ang Economic Zone, the factory will manufacture wood products such as floorboards, tables and desks with most of the raw materials imported from Laos, Myanmar, Indonesia and Malaysia.

Once operational in late 2013, the factory is expected to generate jobs for over 1,500 local people.

Filipino food businesses eye Vietnamese market

Vietnamese and Filipino enterprises gathered at a meeting in Hanoi on July 4 to discuss prospects for future joint ventures.

The two-day event was attended by a business delegation from the Philippines representing industries such as confectionary, food processing, mineral exploration, industrial paint, and cosmetics.

The meeting was a good opportunity for businesses from both countries to exchange information, study each other’s markets and seek trade partners.

Participants were briefed on the Vietnamese government’s incentive policies for foreign investors that wish to do business or expand operations in Vietnam, as well as food hygiene and safety regulations..

Local businesses were invited to take part in an international trade fair on food, IFEX 2013, to be held in the Philippines next May.

Vietnamese seaports in dire straits

According to the Vietnam Seaports Association, the present economic crisis has spelt doom for Vietnamese seaports since the beginning of 2012, specifically for container cargo vessels with output only reaching 1.76 million TEU in the first quarter, much lower than expected.

Despite a very strategic location in the southern key economic zone, the Seaport Complex No.5, which includes Cai Mep-Thi Vai Port in Ba Ria-Vung Tau Province and others in Ho Chi Minh City and Dong Nai Province, is currently facing many difficulties.

The Cai Mep-Thi Vai Port has failed to meet its expected target growth rate. In the first quarter of 2012, the container cargo output via the port did not increase as expected, not even meeting 40 percent of its target capacity.
 
Large cargo vessels have not docked at Cai Mep-Thi Vai Port as expected by the Government and the Ministry of Transport. Initially they expected that the larger vessels would help create new direct maritime routes to Europe and America, cut short journey and thus reduce freight rates.

At present, a large volume of commodities exported to the European and American markets transit via Singapore, Hong Kong and China.

Several Vietnamese joint venture partners of Cai Mep-Thi Vai Port are being forced to consider withdrawal of capital and resigning from the Ports’ management board or selling to foreign partners. The present low turnover cannot even cover investment costs and pay for the bank interest.

Turnover in other ports of HCMC has also fallen over the last few years.

Besides the current economic crisis, there is a surplus of seaports in Vietnam, without adequate business, infrastructure or capital resources to render them effectively operational.

Even the larger seaports like Cai Mep-Thi Vai and Hiep Phuoc in HCMC do not have enough financial backing to complete infrastructure like roads to link to industrial and export processing zones. This greatly affects the competitive ability of Vietnamese seaports.

Cau Gie-Ninh Binh Expressway opens to traffic

The Ministry of Transport on Sunday hosted a ceremony to open a section of the Cau Gie-Ninh Binh Expressway to traffic in Y Yen District in the northern province of Nam Dinh.
 
The section opened to traffic is the 30 kilometer stretch from Liem Tuyen Intersection in Ha Nam Province to Highway 10 in the neighboring province of Ninh Binh.

Construction of the six lane Cau Gie-Ninh Binh Expressway was started at the beginning of 2006 with a total capital investment of VND9 trillion (US$429 million).

Fifty kilometers of the entire route, beginning from Highway 1A in Hanoi and ending at Highway 10 in Ninh Binh Province, is expected to open to traffic within this month.

Cau Gie-Ninh Binh is the first expressway in the Red River Delta to connect Hanoi with provinces in the southern parts of the delta.

According to the Transport Ministry, vehicles permitted to ply on the expressway include cars, buses, trucks and 20-40 foot container-lorries. Motorcycles, bicycles, vehicles transporting inflammable material and overloaded or heavy vehicles will not be permitted to travel on the expressway.

Maximum speed allowed on the expressway will be 100km an hour and vehicles will have to pay a toll fee, which will be calculated on basis of distance covered on the expressway route.

On the same day, the Thang Long Project Management Board also hosted a ceremony to open the Thanh Xuan-Bac Ho Linh Dam stretch to traffic. This particular stretch comes under the Belt Road No.3 project in Hanoi.

Banks asked to stop charging additional fees at ATMs

After some banks were found to collect additional hidden fees on ATM cards and other services, the State Bank of Vietnam issued a strict directive to financial institutions to stop charging customers on withdrawal of money from ATM’s, with immediate effect.  

Bank clients have had to bear an assortment of fees, namely, issuance fee of VND100,000 (US$ 4.79); lost card issuance fee of VND60,000; personal identification number (PIN) re-issue fee of VND50,000; change in PIN fee of VND1,650; card replacement fee of VND100,000; account management fee of VND300,000; external withdrawal transaction fee of VND9,000; external transaction fee from VND1,650 to 0.05 percent of the total sum; viewing account balance and transaction fee of VND1,650; printing of transaction receipt fee of VND1,650; quick issuance of ATM card fee of VND200,000; account statement fee of VND10,000; and e-banking service fee of VND20,000.

Vo Huy, a resident of District 1 in Ho Chi Minh City, said he had several ATM cards but he now has two ATM cards as he did not want to pay so many additional costs on withdrawal of money each time.

Huy says he would pay for the extra charges provided banks also increase their facilities and services. While clients remain dissatisfied, banks quietly keep adding hidden fees and costs such as on money withdrawal from other bank ATM’s, account statements and money transfers, without even notifying clients.

For instance, Huy has to pay VND20,000 for receiving an account statement from Dong A Bank, yet he does not even receive a statement regularly, even though the bank service specifies it. He has to go personally to the bank to collect the statement each time and pay a fee of VND1,650.

Nguyen Trung Linh in Tan Binh District is angry as the ATM machines of the Vietnam Bank for Agriculture and Rural Development (Agribank ) in Tan Phu and Tan Binh Districts do not work properly, and he has to go far to withdraw money or even pay extra to withdraw from other banks.

Clients of the Bank for Investment and Development of Vietnam (BIDV) also complain that ATM machines of the bank do not work, but the bank still deducts money from their account.

Although the State Bank of Vietnam has asked financial institutions to stop charging their customers for withdrawing money from ATM’s, many commercial banks have not as yet adhered to the order.

Vietcombank still collects a transfer fee of VND3,300 for internal transactions; Techcombank charges VND6,000 each time for money withdrawals from other bank ATM’s; Agribank, Dong A and BIDV collect VND1,000 for printing of transaction receipts.

On the other hand, there are some banks that do not collect fee for ATM transactions from other bank ATM’s, to attract more customers.

However, Le Huynh Ha from Vietcombank said the State Bank of Vietnam has not issued any official orders and commercial banks are therefore still charging transaction and account management fees.

Banks collect ATM fees because of the huge investment they have made in their ATM network system, said Ha. For instance, banks purchase an ATM machine for VND600 million (US$ 28,749) and spend around VND20 million per month for overhead costs of electricity, security and maintenance.

Hence, the State Bank of Vietnam and financial institutions must work together to develop a more functional plan to collect ATM fees, which suits the interest of both banks and clients, said Ha.

HCM City ratifies infrastructure action plan
 
An action plan for "synchronous infrastructure development" in HCM City to support the country's industrialisation and modernisation process was ratified yesterday at a meeting of the city's Party Committee.

Nguyen Huu Tin, Deputy Chairman of the HCM City People's Committee, said three basic measures would be deployed in implementing the action plan, the first of which was to improve planning and management.

The second was to mobilise capital for infrastructure development projects. HCM City requires US$3 to 4 billion for infrastructure development per year for the next decade, with each of the five metro lines planned costing $1.5 billion, said Tin.

However, the State Budget could only provide some $500 million for these infrastructure projects annually, he added.

In addition to the ODA (official development assistance) loans, HCM City needed policies and initiatives to mobilise capital from the people and other sources, he said.

The third measure will focus on administrative reforms that would be carried out strictly. Tin also said that contractors' work and progress made by infrastructure projects will be strictly supervised and violations punished.

The HCM City People's Committee proposed at the meeting that between 2012 and 2020, the city's resources should be focused on five key sectors of infrastructure development: transport; urbanisation; irrigation, flood control and climate change response; health care; and education, scientific and technological development.

Under the city's action plan, by the end of 2015, the city will have 210km of new roads and 50 new bridges.

By then, the city will have an average of 17sq.m of housing per person, and this will be raised to 19.8sq.m per person by 2020.

By 2015, the city will provide accommodation to 140,000 students (or 60 per cent of the estimated demand) and 100,000 workers (50 per cent of demand). This will rise to 230,000 students and 200,000 workers by 2020.

In his report on socio-economic development of HCM City in the first half of 2012, Le Hoang Quan, Chairman of the HCM City People's Committee, said the city had achieved stable and "reasonable" growth.

It achieved a GDP of VND288.6 trillion (over $13.8 billion), a year-on-year increase of of 8.1 per cent, while total investments in the city reached VND56 trillion (nearly $2.7 billion), up 10.2 per cent over the same period last year.

In June, the city's CPI (consumer price index) fell by 0.43 per cent compared with May.

Healthcare services have been improved and strong measures have been taken to prevent diseases. The city has also ensured security and social order, Quan said.

Addressing the meeting, Le Thanh Hai, Politbureau member and Secretary of the HCM City Party Committee, exhorted the city authorities to create favourable conditions for businesses, especially small and medium-sized enterprises.

Mass oyster deaths leave farmers broke

Tens of millions of snout otter clams have died en mass just weeks before they are told harvested, leaving hundreds of households in northern Quang Ninh Province in financial difficulties.

According to Van Don District's Office of Agriculture and Rural Development, up to 60 million of snout otter clams worth VND200 billion (US$95,000) died after more than one month of rearing.

Scientists from the Ministry of Agriculture and Rural Development's National Centre for Vetenerial Diagnosis said on Monday that a parasite named Perkinsus was the cause of the massive death of the clams. The disease, first reported in March, had quickly spread and devastated the incomes of some 650 households in the district.

Currently, there is no known cure for the internal parasite.

Nguyen Van Minh, a farmer from the district's Cai Rong Town, said he farmed 10,000 cages with between 45 and 50 clams in each. However, he harvested only about three to five healthy clams per pod.

"I expected much from this crop as I spent the largest investment ever on it," Minh said.

"I should have earned VND300,000 ($15) per cage." Enterprises are in the same situation. Director of Do To Co Ltd Do Huu To said the company had lost more than 15 million clams and that the number was increasing day by day.

According to To, low-quality breeds, transported from regions across the country and even imported from China, water pollution and crowded rearing conditions were to blame for the widespread deaths.

Director of the provincial Animal Health Department Doan Duy Ai said farmers must invest raising costs of VND120,000 ($6) per cage, which means they must have lost more than only VND200 billion ($12.5 million) as reported.

So far, the department and the provincial authority have asked local residents to stop farming clams for two years until the disease disappears.

The province said it would work closely with the Department of Finance to provide financial assistance to farmers.

Farming of snout otter clams started in 2003 in the province's Van Don District. After seven years, big profits from the business raised farming households from 10 to 700.

The current crop, which numbers three times that of previous years, was due to be harvested this month.

Vietnam still charms retailers’ eyes

Vietnam remains an attractive destination for foreign and domestic retailers, despite softening retail markets worldwide.

Japan’s Aeon announced plans to build two commercial centres, set to open in 2014. The first project is in Ho Chi Minh City with $109 million investment, the second is in Binh Duong province’s Thuan An district, with a total investment capital of $95 million.

General director of Aeon Vietnam Nishitohge Yasuo, claimed that only after successfully implementing one first project in Ho Chi Minh City, Aeon Vietnam would build another commercial centre. Hence, Aeon’s progress of opening new retail centres in Vietnam is faster than initially planned.

Lotte Mart, the second biggest retailer in Korea, also aims to grow its presence in Vietnam.

It hopes to expand its system from two existing trade centres to 60 in 2020. As planned, the average investment capital for each Lotte Mart’s trade centre would be about $20 to $40 million. Especially, Lotte will accelerate the Hanoi Lotte Centre project, anticipated to open in 2013, with a total investment of $400 million.

Pham Dinh Doan, CEO of local distributor Phu Thai Group, said inflation and price fluctuations have affected trade centre projects, but the most important factor to implement these projects was to find a good premises. This is considered a weakness of domestic retailers and Phu Thai will focus on expanding its convenience store chain, which will be appropriate to its capital and management level.

Dinh Anh Huan, marketing director of Mobile World, concurrently general director of the nationwide electronics retail system Dienmay.com, said that domestic firms needed to take advantage of this opportunity to strengthen and raise their status.

“Domestic businesses need to take cautious steps so that their developments are adequate to their potential, especially since the current economy is unpredictably volatile,” Huan said.

According to US-based A.T.Kearney Global Management Consultancy Group, Vietnam did not appear in the list of top 30 most attractive retail markets in the globe in 2012. In 2008, Vietnam ranked first among the most attractive retail markets in the world. Since then, its ranking sank continually.

A.T Kearney’s ranking may be a valuable reference for investors planning to invest in Vietnam, but it does not affect investors who have already researched the retail market.

Cement inventory at a safe level
 
The Deputy Minister of Construction, Nguyen Tran Nam, said in a recent meeting with the press that inventory in the domestic cement sector remains at a safe level.
 
The total inventory has been estimated at 2.8 million tonnes, equal to about 20 days of production, he said, adding that not all factories keep the same amount of inventory.

Total consumption of cement for the first half of the year was estimated to be 28 million tonnes.

The sector has 62 production lines for reverter furnace cement with a combined capacity of 57.6 million tonnes per year. In 2011, cement demand was at just 54-55 million tonnes, but this figure is forecast to increase to 75-76 million by 2015 and to 113-115 million by 2020.  “We should not make long-term plans based on short-term difficulties," the official said.

He also noted that transport projects, particularly in rural areas, using uncalcined raw materials, show great potential for the industry.

The deputy minister, however, pointed the finger at badly-performing cement factories, including Ha Long, Dong Banh,Quang Son and Tam Diep plants.

The Dong Bang cement plant has been operating at a loss because its shareholders did not contribute enough charter capital, leading to the capital shortage. Despite good production methods, Ha Long Cement Plant still faces capital shortage due to the higher investment costs, as a result of the long investment time, according to the official.

The Ministry of Construction has suspended three clinker-grinding projects in the south, which are not named in the approved plan.

Nam said the cement sector has taken steps in the right direction that are in line with the national plan for socio-economic development.

The Ministry of Construction is also encouraging cement firms to take measures to boost domestic consumption and exports.

EVN price rise legal but draws criticism
   
Although the 5% increase in the price of power is within the law, EVN did not necessarily do a good job of explaining it to the public, said Chairman of the Government Office, Vu Duc Dam.

During a government working session held on the afternoon of July 3, the latest power price hike was assessed as being a responsible decision by EVN, despite the fact they had claimed they would not raise power prices in the near future. The price hike has caused a feeling of uncertainty among the public.

Dam spoke in favour of EVN when he said that the company had followed all legal procedures before increasing prices. Under the Government's new guidelines, commodities such as petroleum, electricity and other essential goods will be established by the market, so as to encourage economic development.

The Ministry of Industry and Trade (MoIT) and EVN were urged learn from past experiences in publicly reporting their accounting books and using more effective PR methods.

The Minister of Information and Communications, Nguyen Bac Son, suggested that MoIT pay more attention to public opinion.

According to Dam, the current power price is still lower than the production costs, which could be harmful to the economy at large, particularly for industrial sectors, such as steel lamination, which use a large amount of electricity. Indirect Government subsidies in these sectors could cause unanticipated problems, he said.

Minister Dam also urged the process of comprehensive plans to create a competitive power generation market be made a priority.

The Government has said that any price rises must carefully take into account their effects on the lives of disadvantaged people and other socio-economic factors.

“The Government is sympathetic to the plights of sections of the social and business community that are having a difficult time during these circumstances. Still, our main goal should be to best serve the entire nation," said a Government spokesman.

HCM City City has 20 new hotels every month

HCMC as the country’s biggest tourism center had an average of over 20 new hotels entering the market each month in the year’s first half with a total number of new hotels in this period amounting to 130.

Besides, the number of new travel agencies increased as many as last year, said Truong Vinh Tho, head of the Hotel Division under the HCMC Department of Culture, Sports and Tourism. Most of new hotels are of one and two stars, with an average of ten rooms for one-star hotels and 20 rooms for two-star ones, he said.

“Investors of these hotels are mainly individuals, and such hotels are operated pretty well,” said Tho.

HCMC is having up to 990 hotels with over 28,900 rooms in total. The occupancy rate of three- to five-star hotels in the first six months was 67%, dropping by 3 percentage points from the same period last year, and the average room price of three- to five-star hotels was around VND1.95 million.

In addition, there were 35 new travel firms providing international tourism services in the first half, which is equivalent to the rise of last year. HCMC has accounted for more than half of travel firms nationwide with 435 firms.

According to the department, the number of international tourist arrivals in the first six months rose to nearly 1.82 million, up 10% from the same period last year, while the total tourism revenues were around VND34 trillion with a year-on-year rise of 15%.

GDP growth target out of reach, says economist

With the current macroeconomic uncertainties, it is impossible for the country to achieve this year’s GDP growth target of 6-6.5%, said Tran Hoang Ngan, member of the National Assembly Economic Committee.

According to the latest report by the General Statistics Office, the national GDP grew at 4.38% in January-June year-on-year. The report said the low GDP growth is due to stagnant production and snowballing inventories at local producers.

Ngan, who is also vice rector of the HCMC Economics University, told the Daily that it is unlikely that the nation will realize the target of GDP growth this year.

He insists decreased investment at home is the main reason behind the current tough situation since investment capital is the decisive driving force for economic growth.

As such, the country for the rest of the year will have to make all-out efforts to reach its GDP growth target, Ngan said. But it is difficult for the nation to do that.

Another reason is that the number of local enterprises going bust is rising, with over 26,000 firms dissolving and halting operations in the year’s first half, up 5.4% from the previous year.

According to Ngan, inflation has been falling thanks to the Government’s efforts so far, but it is still too soon for the nation to loosen monetary and fiscal policies to boost economic growth. What the country needs to do now is to accept moderate inflation and growth or it may face the recurrence of high inflation as in previous years.

Ngan proposed the root causes of the present economic slump must be addressed by the end of the year, including ineffective public investment, poor performance of State-owned groups, ambiguous management mechanism, troublesome procedures and loose financial management. He also suggested bad debts in the banking system must be tackled as it is vital that the economy is healthier in years to come.

Despite slowing CPI growth, he predicted the recent power, water and coal prices hikes will push up input costs of manufacturers, which will have an effect on inflation in the near future.

Nation's payment balance, credits improve
 
The nation's international payment balance was expected to see a surplus of about US$7.5 billion in the first half of this year with an improved trade situation, the National Financial Supervisory Committee said in a report submitted to the Government.

Improved bank liquidity, falling interest rates and stable exchange rates helped foreign exchange reserves increase by 30 per cent since the beginning of the year.

Total credits grew 0.17 per cent by June 12, better than the figure of May 31 when the five-month lending rate was reported to decline 0.28 per cent, the committee quoted the State Bank of Viet Nam's data.

It said despite lending tending to rally over the last few months, it would be difficult for credit to increase during the remainder of the year since bad debts remained significant.

It anticipated a total credit increase of only about 8 per cent this year, possibly averaging 1.5 per cent per month.

Thus, middle- and long-term lending capital sources for the economy next year would decrease about VND80 trillion (US$3.85 billion), equivalent to a 0.6-percentage-point decline in the gross domestic product (GDP) growth rate.

However, as inflation was expected to be controlled at around 6 per cent, a "very low" rate compared to the target the Government had previously set of 10 per cent, pressure on the total social investment would ease with an investment value of around VND36 trillion ($1.73 billion).

With such an inflation prediction, the committee suggested the country be cautious in managing interest rates and investment capital in the coming months.

In order to stabilise the economy in the middle and long terms, it would be reasonable if around VND80-85 trillion ($3.85-4.09 billion) worth of investment capital was pumped into the economy every month during the remainder of the year, it said.