Firms asked to help limit VN's trade deficit
 
Domestic businesses must co-operate in the promotion of production and export to curb the trade deficit.

Le Danh Vinh, deputy minister of Industry and Trade (MoIT), made the above comment while taking part in an online meeting in Ha Noi yesterday.

According to Vinh, private and State corporations have managed to overcome exchange rate difficulties in the past in order to gain access to capital sources for production and market supply purposes.

Nguyen Tien Vi, an official from MoIT, said that over the last three months, the performance of industrial production had become unstable due to the increasing price of commodities and raw material on the world market as well as an increase in interest rates.

Dam Thi Huyen, deputy general director of the Viet Nam National Petroleum Corporation (Petrolimex), said that while its Dung Quat Oil Refinery was undergoing maintenance, the corporation would import in order to secure domestic petrol supply.

Huyen added that, during the last two months, domestic consumption had significantly decreased. In July, the sales volume was estimated to stand at between 64 and 65 per cent of the sales volume in Q1, while still generating profit. Such confused performance had led to a high stockpiled volume of petroleum, forcing the corporation into financial difficulty in not being able to purchase foreign currency to pay its debts.

Tran Thi Thuy Hoa, an official from the Viet Nam Rubber Association, said that the country could make US$3 billion in rubber exports this year though it faced a decreased rubber price, slow demand and plentiful supply. In addition, the Viet Nam rubber industry had the advantage of close co-ordination with three major rubber producing countries including Thailand, Malaysia and Indonesia.

To assist producers and exporters, trade experts suggested that the ministry strengthen its co-operation with businesses and associations to boost production while encouraging relevant authorities to regularly update market information and restrict imports.

Deputy Minister Vinh forecast that, while production would remain a difficult prospect in the remaining months of this year, the ministry would continue to create incentives for enterprises to easily borrow capital and provide information to exporters wishing to promote their performance.

To regulate supply and demand and stabilise the market, the ministry would additionally strengthen the inspection and supervision of speculation, increasing prices and trade fraud while strictly controlling the quality of goods on the local market.

Mining companies' profits plunge in H1

A number of mining companies have seen profits plunge in the first half of the year. Tay Bac Minerals Investment Co (KTB) posted a net profit of VND5.6 billion (US$271,800) for the period, a decline of 97 per cent from the previous year. Cavico Viet Nam (MCV)'s first-half profit of VND2.9 billion ($140,800) represented an 18-per-cent decline. However, Binh Duong Mineral & Construction Co (KSB) saw its profits increase by 10 per cent during the period to VND67 billion ($3.3 million).

Rubber companies see high profits

Three rubber companies have posted higher first-half profits. Dong Phu (DPR) posted a profit of VND276.7 billion (US$13.4 million), a 183.2 per cent increase over the same period last year, while Thong Nhat Rubber Co (TNC) saw a profit of VND54.1 billion ($2.6 million), a 179 per cent increase. Tay Ninh Rubber Co (TRC) posted a profit of VND168.3 billion ($8.2 million), a rise of 120.7 per cent.

New firms to list shares

VNS Securities Co will list shares on the Ha Noi Stock Exchange under the code IVS. VNS Securities posted a profit in the first quarter of the year of VND513.8 million (US$24,900).

Meanwhile, Ben Thanh Land has registered to list shares on the HCM City Stock Exchange. Ben Thanh Land has a charter capital of VND136.35 billion ($6.6 million) and saw earnings last year totalling VND144.6 billion ($7 million).

Fertiliser giant opens branch in Cambodia

The PetroVietnam Fertilizer and Chemicals Joint Stock Company (PVFCCo) officially opened a branch in Cambodia last Friday in an attempt to sell products directly to local farmers.

Since the establishment of its representative office in Phnom Penh in May 2010, PVFCCo, an affiliate of the Viet Nam National Oil and Gas Group (PetroVietnam), has sold around 6,000 tonnes of urea to Cambodian companies.

PVFCCo Chairman Bui Minh Tien said the inauguration of the Phnom Penh branch would help the company better serve the Cambodian market.

Through the direct sales of products to Cambodian farmers, the company might reduce the time it took to supply farmers and to transfer techniques in rural areas, he added.

Speaking at the inauguration ceremony, Cambodian Deputy Prime Minister Men Sam An said PVFCCo's shift from a representative office into a true branch proved the company's firm confidence in its long-term investments in Cambodia.

Meanwhile, Vietnamese Ambassador to Cambodia Ngo Anh Dung said the event marked a turning point and affirmed Vietnamese businesses' commitment and resolve to invest in Cambodia.

On this occasion, PVFCCo signed deals on distributing urea with two major fertiliser agents in Cambodia, namely Heng Pich Chay in Takeo Province and Chhun Sok An Company in Kandal Province.

The Vietnamese company also donated 25 tonnes of urea fertiliser to poor farmers in Battambang province.

This is the PVFCCo's first foreign branch. The company is planning to expand its market to other regional countries such as Myanmar, the Philippines and Thailand.

Trade fair to open in Ha Giang

More than 250 booths of both domestic and foreign enterprises will open in the International Trade and Investment Promotion Fair, expected to kick off in August 18.

The nine-day fair is a product of the co-operation between border gate commerce and trade development in Viet Nam and mainland China in general, and northern mountainous Ha Giang and Yunnan provinces in particular. The event is an opportunity for businesses to expand their markets, and increase co-operation. The fair would help Vietnamese businesses improve competitive capacity and integration.

VTB to export products to Cuba

The Viettronics Tan Binh JSC (VTB) is scheduled to begin exporting refrigerators and freezers to Cuba this August under a VND10 billion (US$476,190) contract signed recently.

The VTB will export a batch containing 160-litre refrigerators and 180-300 litre freezers to Cuba by the end of this month.

The company has a plan to build a refrigerator engineering manufacturing factory with an estimated investment of US$67.5 million in Cuba.

Vinh Long fosters industrial zones

The southern province of Vinh Long has continued finishing infrastructures in Hoa Phu and Co Chien industrial zones while starting construction of three new industrial zones Binh Tan, Dong Binh and An Dinh.

In addition, the province has called on investment for the development of six industrial zone complexes.

The province has made efforts to improve infrastructure, exploit natural resources, attract investments, foster commercial services, boost key industries and develop trade villages.

Thai firm to produce oil in Q3

The Thailand-based PTT Exploration and Production Plc announced that it expected to produce oil in Viet Nam during the third quarter of this year.

Anon Sirisaengtaksin, PTTEP President and CEO, said the firm would start producing oil as the Viet Nam 16-1 Project completed its installation of the wellhead platform and infield pipelines.

Additionally, construction of an offshore floating production storage and offloading (FPSO) unit had been finished.

Government bond auction underwhelms

A VND2 trillion (US$97 million) issue of Government bonds was auctioned last Thursday, but only 22.5 per cent were sold. Of VND1 trillion ($48.5 million) worth of three-year bonds, VND150 billion ($7.3 million) were sold at yield of 12.4 per cent, VND300 billion ($14.6 million) worth of five-year bonds were sold at 12.5 per cent.

Rubber companies see high profits

Three rubber companies have posted higher first-half profits. Dong Phu (DPR) posted a profit of VND276.7 billion (US$13.4 million), a 183.2 per cent increase over the same period last year, while Thong Nhat Rubber Co (TNC) saw a profit of VND54.1 billion ($2.6 million), a 179 per cent increase. Tay Ninh Rubber Co (TRC) posted a profit of VND168.3 billion ($8.2 million), a rise of 120.7 per cent.

Price of material rice up sharply

Prices of rice increased sharply over several weeks due to a surge in the world market's demand for rice , according to the Viet Nam Food Association (VFA).

Purchasing price of material rice last week jumped by VND250-300 per kilo to VND8,600-8,700 per kilo for five-per cent-broken rice, and to VND8,45-8,500 per kilo for 25-per cent-broken rice, against the previous week.

Price of finished rice also climbed by the same rate, VND300 per kilo to VND10,150 per kilo for five-per cent-broken rice, VND9,850-VND9,950 per kilo for 15-per cent-broken rice, and VND9,350-VND9,450 per kilo for 25-per cent broken rice.

The association said the increase of the domestic rice prices was due to a promotion of purchasing rice for previously signed export contracts of local rice exporters.

Meanwhile, there was a rumour among local rice traders that the increase in purchasing prices of rice was due to a speculation of rice to surge in export price with Thai rice in the near future.

Bank, electric utility forge direct bill-paying system

Customers will be able to pay their electricity bills directly through their bank under a co-operation agreement signed by the HCM City Housing Development Bank (HDBank) and the Electricity and Telecommunication Solutions Joint Stock Co (ECPay).

Under the agreement, HDBank and ECPay will jointly provide electricity bill payment services via the bank, making it easier for clients of electricity and telecom firms to access various payment channels.

ECPay will be a strategic customer of HDBank in credit activities, supply of banking products and services, and investments in order to exploit beneficial synergies.

HDBank will supply banking and financial services and products and preferential credit support for ECPay.

It will also provide personal financial products and services on preferential terms for ECPay's staff members and agents responsible for collecting electricity bills.

The bank will provide financial status proof and guarantee services for ECPay's agents in line with its conditions and regulations.

HDBank has also announced a financial support programme that aims to catalyse the development of the country's support industries.

The programme, which began last month, provides soft loans to enterprises involved in the assembling of autos, motorbikes, electronic equipment, mechanical engineering, textile and garments and leather shoes industries.

If owners of projects involved in support industries are small or medium-sized enterprises they will not only receive financial support, but also enjoy the bank's value-added services such as advice in preparing production, business and investment plans, carrying out trade promotion programmes, and completing necessary procedures for borrowing capital.

Those eligible for HDBank financial support programmes include individuals, households, cooperatives and enterprises.

Bank officials say the programme is part of its drive to help accelerate the development of domestic support industries and reduce reliance on imports.

Midland, mountainous region needs investment

With untapped advantages, the midland and northern-mountainous region awaits projects with suitable investment models to accelerate its socio-economic development.

Deputy Prime Minister Truong Vinh Trong delivered this statement during an investment promotion forum on agriculture and rural development in Lao Cai Province last Friday. The event witnessed the participation of 150 foreign and domestic enterprises.

Over past years, the region's authorities have made increasing efforts to speed up administrative procedures reforms to attract more investment capital, Trong said.

However, the region's investment attraction, especially foreign direct investment (FDI) was yet to match its potentials, according to the Ministry of Agriculture and Rural Development's Planning Department

As of last year, the area attracted 420 foreign-invested projects worth US$6.24 billion, making up only 3.2 per cent of the total FDI registered in the country during the period.

Meanwhile, it also drew a total domestic investment capital of VND203 trillion ($9.85 billion) into 13,648 projects. But the investment accounted for only 2.6 per cent of the country's total domestic investment capital.

Most of these projects were small-scale with modest investment capital, the department said, adding that few of them went into the agriculture sector.

Investors at the forum agreed that it was risky to make investments in the agriculture sector due to its distance from a big economic centre, inadequate infrastructure, lack of skilled labour and insufficient investment incentives.

Though there was a great potential to develop agriculture and forestry projects in the area, a large amount of investment capital remained the biggest challenge for investors, as they found it difficult to access credit sources, said Hoang Tung Limited Company director Bui Dac Quang.

Inadequate infrastructure and lack of good transport might result in an increase in production costs and lower businesses' competitiveness, Quang said.

Dong Nai seeks Japan investment

The southern province of Dong Nai will continue to review its policies and further improve the investment environment for foreign investors, the provincial authorities told a conference held in its Bien Hoa City late last week.

During the event promoting Japan's investment, particularly in hi-tech and agriculture sectors, chairman of the provincial People's Committee Dinh Quoc Thai said the province would build four new industrial zones, covering 1,880ha, from now to 2015, in an attempt to provide investors with sufficient land.

Dong Nai is currently home to 30 zones, spanning an area of 9,500ha in total, of which 12 have experienced full occupancy.

In addition, the province was building the 500-ha Long Thanh hi-tech industrial zone, the 2,200-ha Dofico industrial and agricultural complex, and the 209-ha Dong Nai biotechnology application centre, he said.

Representatives from the Japanese Business Associations in HCM City and Dong Nai Province spoke highly of the provincial authorities' efforts in creating a transparent investment environment for foreign investors.

However, the province's inadequate electricity supply and the current upgrade of a number of key roads have affected the pace of the projects, they said.

Japan is now one the province's leading sources of foreign investment. To date, Japanese investors have pumped US$1.9 billion into 100 projects in the province, creating 40,500 local jobs.

Dong Nai is also using Japan's ODA capital to implement the HCM City-Long Thanh-Dau Giay highway project and the first phase of the Nhon Trach water supply system with a daily capacity of 100,000 cubic metres.

During the forum of 160 Japanese enterprises, the provinial People's Committee granted certificates of merit to 10 Japanse businesses in recognition of their contributions to the province.

Firms win awards for best tourism services

As many as 134 firms nationwide have been presented with The Guide Award, an annual decoration of the Viet Nam Economic Times magazine to the year's best tourism products and services.

An award ceremony was held in Mui Ne in the central province of Binh Thuan last Friday.

The awards recognised excellent performances by hotels, resorts, restaurants, transport agencies, and travel companies by protecting the environment, supplying sustainable travel services, promoting national identity, and being responsible towards local communities.

This year's recipients included 76 hotels and resorts, 38 restaurants, seven travel firms, five healthcare and beauty-care services, 15 transport services companies, and several entertainment services.

Shopping centre signs leasing agent Knight Frank

Knight Frank Viet Nam yesterday signed a co-operation agreement with IDJ Asset, a subdivision of IDJ Group, to be the exclusive leasing and management agent of Grand Plaza Shopping Centre in Ha Noi.

Under the agreement, Knight Frank will manage the shopping mall and represent the developer to lease retail space to international and local retailers from August 1.

Grand Plaza is a modern shopping centre located in the new administrative and business centre of Ha Noi.

Vinalines posts first-ever losses for first half

General Director of Vinalines Nguyen Canh Viet recently announced that his corporation had made a loss of VND507 billion (US$24 million) in the first half of this year, the first time ever in its 14-year operation.

Viet said that the corporation had lost revenues although its three core services, including marine transport, port and logistic services, had experienced an increase of 5 per cent to VND10.4 trillion ($495 million) in H1.

VNPT Group joins hands with FPT Securities Co

The state-owned Viet Nam Post and Telecommunications (VNPT) Group has named the FPT Securities JSC (FPTS) as a consultant on capital restructuring some of its invested companies.

The VNPT currently contributes capital to 85 enterprises, helping the group earn total revenues of VND7.3 trillion ($347.6 million) last year, an increase of 13.5 per cent compared to 2009.

As part of its current strategy, the Government plans to retract some of its investments over time.

Ocean Bank sees profits skyrocket by 149%

The Ocean Join Stock Commercial Bank (Ocean Bank) gained pre-tax profits of VND475 billion (US$23.2 million) in the first six months of this year, an increase of 149 per cent compared to the same period last year.

With these results, the bank managed to meet its annual targets of VND800 billion ($38 million) and VND65 trillion ($3 billion) in total assets.

Vietnam exports over 4.5 million tonnes of rice in seven months

Vietnam last month exported 636,344 tonnes of rice to earn over US$305.067 million, with more than half of the volume sold to the Asian market, according to the Vietnam Food Association (VFA).

The figure raised the country's total rice exports in past seven months to 4.549 million tonnes worth US$2.152 billion, the VFA said.

Vietnam's rice exports showed a year-on-year increase of 13.79 percent in both quality and value.

In recent times, the price of Vietnamese rice has increased along with that of Thai rice.

Currently, the price of dry paddy in the Mekong River Delta is between VND6,400-VND6,500/kg, while long-grain paddy is traded between VND6,650-VND6,750/kg, an increase of VND400-VND500/kg compared to early July.

This year’s summer-autumn crop has brought in about 4.4 million tonnes, yielding an average output of 5.5 tonnes.

Eximbank enters world’s top 25 banks with highest growth

Vietnam Export Import Commercial Joint Stocks Bank (Eximbank) has entered the world’s top 25 banks with high growth rates, announced The Banker, an international financial affairs publication.

Eximbank is the only bank in Vietnam and the Southeast Asian region to enter this year’s top rankings and also the world’s top 1,000 banks.

The Banker’s Top 1000 World Banks ranking has been conducted since 1970 to provide in-depth data and analysis of the banking industry’s performance.

Its annual announcement is based on Tier 1 capital, with secondary rankings by assets, capital/asset ratio, real profit growth, profit on average capital, and return on assets.

Bank restructuring urgent: experts

The National Financial Monitoring Committee President has emphasized the need to restructure the commercial banking system if the country did not want to lag behind the rest of the world.

Vu Viet Ngoan told reporters on the sidelines of the ongoing National Assembly meeting in Hanoi that Vietnam’s financial system was rated as “weak” in the pre-crisis period and that the world was now rushing to restructure the global financial system in order to increase working capacity and reduce risk.

“From this point, if Vietnam fails to speed up the process of financial restructuring, it will lag further behind,” the newly appointed chair of the committee said.

He recommended that upcoming restructuring increase the independent role to be played by the State Bank of Vietnam and close down all banks with weak financial health and poor management capacity.

The chief financial observer also warned of risks in taking hurry action.

“We can apply international criteria but should work out a long-term roadmap with concrete time frames for each goal,” Ngoan said.

His views were echoed by several other experts such as Huynh The Du, lecturer with the Fullbright Economic Programme, and Vo Tri Thanh, Vice Rector of the Central Economic Management Research Institute. They cited a number of small banks which are being exposed to numerous risks such as low liquidity and high bad debt ratios.

These factors may lead to macro-economic instability, they said. Statistics released by the State Bank of Vietnam showed that bad debts accounted for 2.72 percent of the entire banking system’s total loans up to June 10, compared to 2.17 percent late last year.

Businesses seek ways to boost exports to the Philippines

The Investment and Trade Promotion Centre in HCM City has conducted a fact-finding tour of the Philippines with a population of 92 million to boost exports to this potential market.

During the tour, the Saigon Agriculture Corporation signed two rice export contracts worth US$6 million and Hoang Anh Gia Lai Group set up links with the two real estate businesses in the Philippines.

Many Philippine businesses were keen to cooperate with Vietnamese canned food producers.

The Robinson Group said it was seeking partners to export ready-made clothes to Vietnam and would expand its distribution network in HCM City.

Vietsopetro aims to exploit 6.3 million tonnes of oil

The Joint Venture Vietsopetro has invested hundreds of millions of USD in modern drilling rigs, hoping to pump 6.3 million tonnes of oil in 2011.

In addition, the joint venture is using advanced technology to explore for gas and condensate in deep-water mines.

Since it was established 30 years ago, Vietsopetro has exploited 193 million tonnes of oil and 23 billion cubic metres of gas, ensuring Vietnam’s energy security and contributing billions of USD to the State budgets of Vietnam and Russia.

Dang Minh Hong, Secretary of Vietsopetro’s Party Committee, said it is crucial for Vietsopetro to explore new oil fields.

Vietsopetro is making every effort to fulfill its assigned tasks and contribute to protecting the country’s sovereignty over its sea and islands, he said.

Thai Company to exploit oil in Vietnam

Thailand’s PTT Exploration and Production Public Company Limited (PTTEP) will start exploiting oil in Vietnam very soon, said PTTEP President and CEO Anon Sirisaengtaksin.

Sirisaengtaksin said the installation of the drilling rig and pipeline for the “Vietnam 16-1” project has been completed and PTTEP will start drilling for oil in the third quarter of this year.

PTTEP expects to initially produce 18,000-20,000 barrels a day, increasing to 40,000 barrels per day by the end of 2011.

Vietnam, Laos further culture, tourism cooperation

Vietnam and Laos have agreed to further cooperation in culture and tourism at a talks held in Hanoi on July 30.

The talks were between the Ministry of Culture, Sports and Tourism of Vietnam, headed by Minister Hoang Tuan Anh, and the Ministry of Information, Culture and Tourism of Laos, headed by Minister Bosengkham Vongdara.

The two sides agreed to coordinate to organise a Vietnamese culture week in Laos from August 31-September 6.

They will cooperate in preparations for celebrations of the Vietnam-Laos Friendship Year 2012 and the 50th anniversary of the two countries’ diplomatic ties and the signing of the Vietnam-Laos Friendship and Cooperation Treaty in 2012.

The two sides will jointly carry out Vietnam-funded projects that were approved by the two Governments, including the upgrade of the Kaysone Phomvihane Museum and construction of the President Ho Chi Minh memorial site in Xiengvang village, Khammouane province.

They also agreed to facilitate visitors’ travel through border gates and develop infrastructure for land routes connecting Vietnamese provinces lying along the East-West Corridor and Lao province of Champassak with Vietnam’s Central Highland provinces.

The Vietnamese side said it was ready to help Laos build the Tourism Law and hotel ratings as well as carry out the ADB-funded project on sustainable tourism development in the Greater Mekong Subregion.

Both sides committed to cooperate in tourism in bilateral and multilateral frameworks in 2011 and preparing to sign the new minutes on cooperation between the two ministries in the 2012-2015 period.

6,500-tonne cargo ship handed over to Vinalines

The Bach Dang Shipbuilding Industry Corporation (part of Vinahsin) yesterday handed over a 6,500-tonne cargo ship to the Northern Shipping JSC (part of Vinalines) for operations in northern Hai Phong City.

The 3,600 horsepower, ClassNK ship, named the Nosco Trader, is around 103 metres in length, 17 metres in width and nearly 16 metres in height.

The cargo ship is one of 20 that Vinashin has agreed to build for Vinalines.

As scheduled, the Bach Dang Shipbuilding Industry Corporation is expected to focus on building three 22,500-tonne cargo ships for Vinalines from 2011-12.

Hanoi on track for more development

After three years of expansion, Hanoi capital city has overcome many difficulties and challenges, and obtained major achievements in many fields.

In implementing Resolution 15/2008/NQ-QH12 of the 12 th National Assembly, the administrative boundary area of Hanoi capital city was officially enlarged on August 1, 2008 to a total area of more than 3,300sq.km. The milestone created a premise for the capital city to strengthen its position in the region and the world.

Over the past three years, Hanoi has made every effort to develop the city in the direction of civilisation and modernisation on the basis of creating breakthroughs in socio-technological infrastructure construction.

Based on the socio-economic master plan and the Prime Minister’s recently approved master plan project, the city will step-by-step carry out tasks and achieve targets set in the municipal Party committee’s Resolution 15.

On economics, the city continued to move restructuring in the direction of service-industry-agriculture, targeting to become the country’s financial-banking hub and leading retail and wholesale and import-export location, while setting the trend in industrialising and modernising agriculture.

Additionally, the city constantly improved the people’s material and spiritual lives with a focus on improving the quality of education and health services, and developed the knowledge-based economy with a view to becoming a high-quality human resources training centre.

The city registered a per capita GDP of 1,964 USD in 2010 and a rise of 10.4 percent in the gross domestic product for 2006-2010, 1.5 times higher the country’s average level, providing evidence that the city was moving in the right direction for its development.

Mover than 100,000 businesses registered their activities and production, contributing to 89 percent of the city’s GDP, attesting Hanoi’s method in development of production force with attention paid to all economic sectors.

Becoming a civilised and modern capital city in the future requires construction of urban infrastructure in a careful, planned manner. Projects to build new urban areas should be combined with the construction of social infrastructure, contributing to both raising the per capita urban housing area and improving the people’s living conditions.

Besides, the urban city has been beautified with the construction and upgrade of parks, gardens and public entertainment sites, becoming a special feature receiving the people’s support.

Culture is always considered a top priority, especially preserving and honouring traditional cultural values.

The path ahead will face many difficulties and challenges. Hanoi will have more resources to boost its self confidence and firmly step on a new road – building a capital city for peace, a rich cultural city and a strong economic, modernised and civilised city, thanks to due attention and close instructions of the Party Central Committee, the National Assembly and the Government, with support of ministries, central agencies and organisations, along with the contributions of 6.5 million Hanoians, as well as millions of compatriots nationwide and many foreign friends.

"Pride of Vietnamese Brand Names" Cup presented

The "Pride of Vietnamese Brand Names" Cup 2011 has been presented to 29 businesses which produce a diverse range of products and services to take up the domestic market.

The businesses, which were honoured at a live televised ceremony on July 30, have also contributed remarkably to a campaign designed to encourage “Vietnamese people to use Vietnamese goods” launched two years ago.

In 2009, only over 20 percent of Vietnamese people gave priority to using Vietnamese goods; but now the figure has risen to 59 percent. Locally- produced goods now make up a large market share of traditional markets and account for up to 90 percent of commodities in supermarkets.

In the reviewed period, nearly 70 trade fairs were held in rural areas to give residents more access to Vietnamese goods and ‘conquer’ new consumers and markets.

The ceremony also included a meeting with representatives of the targeted businesses with a view to further promoting the campaign in the years to come.

Prominent at the event were Vice President of the Vietnam Fatherland Front Vu Trong Kim, who is also permanent deputy head of steering committee for the campaign, Minister of Industry and Trade Vu Huy Hoang, Editor-in-Chief of the Nhan Dan newspaper Thuan Huu.

Foreign exchange risks loom large toward year’s end: experts

The demand for the U.S. dollar is outpacing supply, unveiling big foreign exchange risks for both enterprises and the economy by the end of the year, experts said at a conference in HCMC last week.

Le Xuan Nghia, vice chairman of the National Financial Supervisory Committee, told the conference on Thursday that dollar supply was ample now as borrowers converted their dollar debts to Vietnam dong funds. But the risk is embedded in such a situation and will pose a big risk when such debts become due by around the end of the year, he said.

Experts at the gathering observed that credit growth in the greenback is high, while remittances and foreign investment have declined, prompting foreign exchange volatility by the end of the year.

Remittances sent to Vietnam in the second quarter this year was US$1.9 billion, much lower than US$2.2 billion in the same period last year. Foreign direct investment in the first six months this year was US$3.3 billion compared to US$3.4 billion in the year-earlier period.

In addition, foreign portfolio investment has also tumbled to only US$350 million in the first half this year compared to US$1.79 billion in the same period last year, Nghia said.

All such factors would undermine the forex balance in the coming months, with the most serious concern being a rush by enterprises to take out loans in the U.S. dollar.

“Enterprises have rushed to borrow loans in dollars then sell it to take Vietnam dong for business, giving way to a big dollar supply and thus stabilizing the forex rate in the last three months. When those loans become due, the dollar demand will be very high,” Nghia added.

The credit growth in the greenback in January-June was 23% while that in Vietnam dong was only 3%. Nguyen Duc Vinh, CEO of Techcombank, told the Daily that dollar loans had strongly increased in recent months while dollar mobilization at his bank was on the downtrend.

Therefore, banks recently have offered negotiated interest rates for dollar deposits, at up to 4%-5% per year compared to the ceiling rate of 2% imposed by the central bank.

However, Nghia expected the central bank would stop this practice soon, and said the authority had bought over US$4 billion over the past few months which can be used for intervention in the market in case of forex upheavals.

Duyen Hai replaces Hiep Phuoc to supply power for Saigon South

Duyen Hai Power Company will replace Hiep Phuoc Power Company to supply electricity for Tan Thuan Export Processing Zone, Hiep Phuoc Industrial Park and Phu My Hung Town south of the city from  Monday.

Dang Van Cu, director of Duyen Hai Power Company under HCMC Power Corporation, told the Daily on Sunday that Hiep Phuoc had just handed over its power grid to Duyen Hai for free.

After taking over the power grid, from August 1, Duyen Hai will be responsible for supplying power for over 200 enterprises in the export processing zone and industrial park as well as thousands of families in Saigon South.

The executive said his company could receive power generated from Hiep Phuoc power plant and sell the electricity to the enterprises and families at the selling price stipulated by the Government.

Talking with the Daily last month, Pham Hong Tien, manager of Hiep Phuoc Power’s Technical Division, said that after the power grid handover, Hiep Phuoc would be still the operator of its power plant. It would sell all power generated from the plant to EVN at a price of 17 U.S. cents per kilowatt-hour, which may change depending on oil prices.

So far, half of the electricity output of Hiep Phuoc Power has been bought by EVN and the remainder is sold to the manufacturing enterprises and the southern residential area at 5 to 7.5 cents, which is equivalent to the selling price stipulated by the Government.

Since 2001, Hiep Phuoc power plant, which has total supplying capacity of over one billion kilowatt-hours each year, has been a key power supplier for some 200 enterprises in the zones as well as thousands of families in Saigon South. Besides, the power plant also sells 50% of its generated power to EVN at a price of 17 cents per kWh.

Early this year, Hiep Phuoc Power had suggested collecting a surcharge of 12 cents per kWh on 60 enterprises in Hiep Phuoc Industrial Park to compensate its huge losses of some US$200,000 per day due to the high fuel cost.

However, the proposal was strongly objected by the enterprises. Finally, Hiep Phuoc Power agreed to hand its power grid to EVN for free to avoid huge losses.
 
Vietnam property remains attractive to investors

Vietnam is still a potential destination market for foreign investors, though the country, like other neighboring markets, saw trading activities subdued during the past six months, according a regional research released by CB Richard Ellis Vietnam (CBRE) last week.

Marc Townsend, managing director of CBRE, said Vietnam was slowly becoming a regional player, evidenced by international funds who have established presence here and are very comfortable operating in the market.

“As the established investors in Vietnam are still doing deals, investors from outside the region will continue to cast an eye over the opportunities,” Townsend said, adding that foreign investors began to look beyond the traditional, developed, investment markets for investment opportunities in countries in the Asia Pacific region.

The market research company, however, said that bank lending for real estate projects had tightened and that the cash flow was becoming a challenge for a number of developers. Therefore, many developers in order to resolve the problem of limited credit availability were looking to form joint venture partnerships with foreign investors in order to access capital.

Adam Bury, senior manager of CBRE’s research and consulting department, commented on the issue, saying that with bank lending being restricted, more Vietnamese developers than ever before were seeking joint venture opportunities.

Bury said there was a notable competition around the region to absorb this inflow of capital as many investors continued to look at the Asian region as an alternative to the weak growth markets. As an investment destination, Vietnam had plenty of selling points, such as a population density, to attract foreign investors.

“If the age-old problems of access, pricing, and transparency continue to be slowly overcome, we are confident that opportunities for international investors will arise that tempt capital away from some of Vietnam’s more developed neighbors,” Bury said.

The market trend saw some joint venture opportunities since early this year. For example, the Singaporean property group CapitaLand announced in May a joint venture contract with Khang Dien Sai Gon Real Estate Joint Stock Company, contributing 70% of the US$70 million required to build almost 1,000 apartments on a 2.9 hectare site in HCMC’s District 2.

The group continued to strengthen its position in Vietnam market by spending some US$6 million to take a 65% stake in the local developer Quoc Cuong Sai Gon, who owns some 9,000 square meters of land in Binh Chanh District. The project is planned for a condo project with 800 units.

In another project, Malaysian property developer Gamuda Land has recently entered into a joint venture with the local firm Saigon Thuong Tin Real Estate Joint Stock Co. (Sacomreal) to develop an 82-hectare township in HCMC. The US$215-million Celadon City project is under development in HCMC’s Tan Phu District with a number of apartment buildings for some 7,000 units and other facilities.

In related news to the local property market, the HCMC Real Estate Association (HoREA) hosted a real estate night in HCMC on Friday, talking about the current challenging situation in the market.

Le Hoang Chau, chairman of HoREA, reiterated his standpoint, saying that the Government should not classify property development as a non-manufacturing sector because it required different elements such as labor and materials to develop an apartment building.

Chau said the credit crunch had driven a lot of developers into difficulties during the first six months of this year, and many of them were thinking of how to survive rather than to spur growth.

At the event, some participants said the market downturn was offering a good chance to people who want to buy apartments for accommodation as the housing price has decreased because of inflation besides incentives offered by developers. Most current condo projects are developed on land sites which developers bought before the Decree 69 comes into force. The decree which requires land use fee to match market price may trigger housing price to increase in the coming time.

Vu Dinh Anh, a financial expert who was a speaker in the event, said buying a house at the moment was a chance to those who do not have to borrow from banks. In contrast, it would be a burden for those who buy an apartment by using loans because interest rate remained too high, and the housing price had yet come back to its real level.
 
Danang to host ATC/REV 2011

The 2011 International Conference on Advanced Technologies for Communications (ATC/REV 2011) is scheduled to take place from August 2-6 in the central city of Danang.

Co-organised by the Radio Electronics Association of Vietnam (REV) and the IEEE Communications Society (IEEE ComSoc), the ATC/REV is an annual conference series.

The goal of the series is to foster an international forum for scientific and technological exchange among Vietnamese scientists and engineers and their foreign colleagues in the fields of electronics, communications and related areas, and to gather their high-quality research contributions.

Along with regular sessions of oral and poster presentations, ATC/REV 2011 will feature plenary talks by world renowned scientists, special sessions on emerging topics, workshops on technological practices and policies, tutorials for advanced topics, and student sessions for local students.

A workshop on Communications and Navigations for the Development of Vietnam’s Marine Economy (REV/ComNaVi-11) will also be held on the sidelines of the ATC 2011, according to Dr. Pham Van Tuan from Danang University of Technology.

As many as 200 domestic and foreign delegates are expected to attend the ATC 2011.

Vietnam’s rambutan set to enter U.S. market

Vietnam’s fruit trader Red Dragon expects to send the first shipment of rambutan to the U.S. market this August, making it the second fruit to enter this choosy market after the dragon fruit since 2009, a quarantine official said.

Nguyen Huu Dat, director of Post Entry Quarantine Center 2 under the Ministry of Agriculture and Rural Development, told the Daily on Thursday that the center has completed all requirements for the shipment of the fruit. These include the certification and production unit code for the farming area, irradiation facility approved by USDA, and pest quarantine procedures approved by agriculture authorities of Vietnam and the U.S.

He said that the U.S.-based importer Walong had got a permit from the U.S. Department of Agriculture (USDA) to receive the first shipment of rambutan from Vietnam’s Red Dragon. The fruit is cultivated at a 28-hectare farming area in the southern province of Ben Tre.

The first shipment should have been delivered earlier, but the date has been rescheduled due to encountering with cheap rambutan from Guatemala and Mexico, said Mai Xuan Thin, director of Red Dragon.

Thin said the price of rambutan from Guatemala averaged at US$6 per kilo while the Mexico fruit that was transported to the U.S. by van was sold at US$3 per kilo. Meanwhile, the price of Vietnamese rambutan to be sold stateside may amount to nearly US$7 per kilo due to the high costs of air transport and radiation.

“There is still hope for the Vietnam fruit that has gone through the most stringent requirements, especially when the fruit from those two Central American countries has passed their harvest season. I’m negotiating with the importer on the price and expect to send the first shipment in August,” he said.

In May, the 28-hectare rambutan farming area of Phung Duc B Cooperative in Ben Tre Province received the export code as well as the GlobalGAP certificate, making the fruit eligible to enter the selective market.

Currently, dragon fruit is the sole fruit exported to the U.S., and its export volume to the market has risen from only 100 tons in 2009 to 856 tons in 2010 and expectedly between 1,500 and 1,800 tons this year.

Dat of the Post Entry Quarantine Center 2 said his agency was also cooperating with the USDA’s Animal and Plant Health Inspection Service in Vietnam to complete procedures on exporting longan and litchi to the U.S., expected for the end of this year.

Locally assembled Mazda to hit the road late this year

Vina-Mazda Co., the local distributor of Mazda cars, said it would launch the first Mazda cars assembled in Vietnam late this year.

The subcompact car Mazda 2, which is suitable for small streets in populated cities, will become the first model which Japanese automaker Mazda assembles locally.

Vina-Mazda has since March imported the car from Japan for local sale. The vehicle comes with a 1.5-liter engine and four or five-speed automatic or manual transmissions. The imported car now sells for VND629 to VND660 million per unit but the price of the locally assembled version will be lower.

Mazda 2 will be assembled at the Chu Lai Open Economic Zone in the central province of Quang Nam where Vina-Mazda Co. is developing an automobile factory to assemble and manufacture vehicles of 5 to 7 seats and light trucks, according to a Vina-Mazda source.

The facility will able to turn out 20,000 units per year. Authorities of the zone awarded an investment certificate for the company’s automobile plant in March.

The plant, covering 7.5 hectares at the zone and costing VND750 billion, will be built in two phases with the first phase expected to go into operation late this year and having an annual capacity of 5,000 units per year. The capacity will rise to 20,000 units per year down the road. Output of the factory will be for local sale and export to Southeast Asia.

Mazda will transfer assembly technology to Vina-Mazda, the source said.

Vina-Mazda is developing many showrooms throughout the country, including Bien Hoa City of Dong Nai Province, Danang, Hanoi and HCMC.

Vina-Mazda has imported completely built-up (CBU) Mazda cars including Mazda 2, Mazda 3, Mazda 6 and Mazda CX9 for the local market.

In the past the Mazda cars were assembled in the country through local automaker VMC but the production was later suspended.

This is the second automobile venture in the Chu Lai Open Economic Zone after Truong Hai Auto Joint Stock Co., better known as Thaco, which has a huge auto manufacturing and assembly complex.

In 2007 Thaco Kia opened a US$36 million factory to assemble passenger cars. This firm started production and assembly of Hyundai commercial vehicles in May this year.

Thaco last month commissioned a VND600-billion bus plant covering 15 hectares and having four main workshops – welding, assembly, painting and storage.

Authorities of Quang Nam Province have proposed the Government set up a national auto manufacturing center in the 27,000-hectare Chu Lai zone in Nui Thanh District. The 1,000-hectare center is planned to turn out 300,000 passenger and commercial vehicles a year.

Nation’s int’l visitors up in July, HCMC down

International visitors to the country are up in July despite the inbound low season with 460,000 tourists, up 2.9% (13,000) compared to last month. However, visitor arrivals in HCMC fell 44,000 month-by-month, according to reports by tourism departments.

The Vietnam National Administration of Tourism (VNAT) estimated nearly 3.43 million foreign visitors had arrived in the year to date, up 11.7% year-on-year. The growth rate is lower than the 34.9% increase in the same period last year.

The majority of foreign visitors are from neighboring countries namely China and Cambodia. China is still number one for tourists to Vietnam with 785,000, up 53.5%, while Cambodia ranks fifth with 249,000, up 74.2%.

South Korean visitors are put at 301,000, up 4%, with U.S. tourists numbering 273,000 (up 2.5%) and Japan 268,000 (up 11.7%).

In HCMC, the city’s department of Culture, Sports and Tourism said around 206,000 foreign visitors would visit the city this month, up 10% from last July, bringing the total number of visitors in January-July to more than 1.86 million, up 10% year-on-year.

Some tour operators and hoteliers in HCMC told the Daily that business is unchanged compared to last year, and that Chinese and Japanese visitors are being prudent compared to 2010.

Dang Huy Hai, deputy general director of the five-star New World Saigon hotel, said average room occupancy this month reached 67%, the same as July last year.

According to Hai, the size of MICE (meetings, incentives, conventions and exhibitions) groups this month were smaller with groups of 200 to 300 people.

“Japanese guests are cutting down on their spending on food, beverage and entertainment services,” Hai added.

Tu Quy Thanh, director of Lien Bang Travelink, said tourists from Singapore and Malaysia increased slightly with Chinese tourists down by 50%.

“Business in this season is not better than the same period last year. The package tour prices are up 20%, while the total number of tourists has not increased,” he said.