Province offers incentives to investors

Binh Phuoc is offering several preferential policies including land tax exemption, faster site clearance and human resource training support to lure more investment into the province's industrial parks.

Provincial officials said they would also speed up administrative reforms to create favourable conditions for investors.

At the Hoa Lu Border Gate Economic Zone, apart from tax breaks and cheap land rents including a cut in corporate income tax, the province would support investors by developing infrastructure, the report said.

Currently, Binh Phuoc has 18 industrial parks covering 5,211ha located in key areas with favourable transportation links.

There are more than 3,000 businesses with a total registered capital of VND19.7 trillion (US$947 million) working in the province. Of these more than 80 are foreign invested projects with total registered capital of $644 million.

Binh Phuoc's industrial production value in the first three months of this year was VND989.4 billion ($47.5 million), meeting 17.7 per cent of the year's target. The figure marked an increase of 53.5 per cent over the same period last year.

In March alone, industrial production was VND304.5 billion ($14.6 million), a year-on-year increase of 41.6 per cent.

Despite the strong showing, the province's IPs had plenty of room for more investors and local authorities were keen to have them functioning at maximum capacity, the report said.

Sugar makers face difficulties

Sugar manufacturers across the country are struggling due to oversupply and a lack of demand that have forced prices down by VND1 million (US$50) to VND1.7 million ($80.9) per tonne.

A report by the Ministry of Agriculture and Rural Development's Information and Statistics Centre said since the beginning of the year, manufacturers had produced 1.03 million tonnes of sugar, a year-on-year increase of 163,000 tonnes.

It also added that the stockpiled volume had soared by 142,200 tonnes year-on-year to nearly 530,000 tonnes.

The industry estimated that the country needed to import only 200,000 tonnes of sugar to meet domestic demand.

Manufacturers, however, said this would be problematic, because this year's import quota was 250,000 tonnes, based on predictions made at the end of 2010.

But with consumption down, pressure is growing on the sugar industry. In March and April, sales reached just 85,000 tonnes and 72,900 tonnes respectively, compared to around 110,000 tonnes per month last year.

Moreover, banks have tightened monetary policies, making it harder for companies to take out loans.

As a result, 16 out of 38 Vietnamese sugar manufacturers have already halted production, and a further eight are likely to do so by the end of the month.

Supply was much higher than demand, and the situation would get worse if more sugar was imported, said Nguyen Thanh Phong, chairman of the Viet Nam Sugar and Sugarcane Association.

To help manufacturers, the association has asked the Ministry of Industry and Trade to extend the final date for the quota past December 7 for the remaining tonnage that has not already had contracts signed for it.

Credit support was also needed to help manufacturers pay overheads and farmers, the association said.

Property investors sell to reduce loans

Real estate investors are coping with capital shortage by selling property at a time when banks have reduced the number of loans to the non-manufacturing sector.

Early this year, the State Bank of Viet Nam (SBV) warned banks to take the 20 per cent ceiling seriously to contain inflation. To keep lending growth within that level, banks have to gradually reduce loans to the non-manufacturing sector from more than 26.8 per cent to 22 per cent by June and 16 per cent by year-end.

Though lending for non-manufacturing activities is lucrative, many banks have already changed their lending strategies, especially property lending, to ensure that they remain within the limit.

According to independent market watchdogs, the banks'moves have left estate investors with a serious shortage of capital to maintain their operations, and have left projects half-completed. They are also behind in paying their debts.

Consequently, a series of property projects in the city have changed hands since early this year and the situation has become more intense in recent weeks, according to Tuoi Tre (the Youth) newspaper.

A source from the Chuong Duong Joint-Stock Company said that the company was negotiating with foreign partners to transfer its Golden Land Project in Thu Duc District. The project covers an area of nearly 15,000 square metres with a total investment capital of VND878 billion (US$41.8 million). The company has planned to build a 22-storey tower there, four of which will be for trading and service purposes and the rest luxury apartments.

Similarly, Khang An Joint-Stock Company (KAC) has already completed necessary legal procedures to transfer its Tan Tao residential area project in Binh Tan District to Singapore-based Da Cin Holdings Pte. Real estate projects that have already changed hands include the Thuy Loi apartment building in Binh Thanh District, which was sold by the Irrigation Construction No 4 Corporation to the Thuy Loi Real Estate Investment No 4 Company.

Vinaland Limited Company, a member of VinaCapital Group, also sold all its stocks in a housing development project in District 9 to a Vietnamese partner. In March, the HCM City Department of Construction sent a document to the municipal People's Committee asking the agency to consider the transfer of four major real estate projects and take into account the wishes of the project owners.

The Dat Xanh Real Estate Trading Services Joint Stock Company also bought a 3,700-sq.m real estate project in Go Vap District from the Ha Thuan Hung Company to build a 14–storey building with 234 luxury apartments.

Nam Long Investment and Production Joint-Stock Company spent $8 million to have a 10-storey building in Vo Van Tan Street from the Viet Techniques Joint-Stock Company.

Nguyen Hong Phuc, general director of the Nha Viet Construction Investment Company, said these projects were among several real estate projects to be transferred.

Many other projects had been sold but investors were not informed, Phuc said.

The Hoang Anh Gia Lai Group recently received many offers from real estate investors to sell their projects, according to its chairman Doan Nguyen Duc.

"The real estate market is facing many difficulties, so this is a good opportunity for those who have financial potential to buy back projects," Duc said.

According to market analysts, the market now has two kinds of enterprises that want to transfer their real estate projects.

They include those who meet difficulties in financing due to an economic crisis, or those who specialise in other industries but invested in the real estate sector when it flourished and now want to stop investing so that they can focus their money on their traditional business. The others are enterprises that specialise in trading real estate projects. However, the number of this kind of enterprises is modest.

Bui Tien Thang, deputy director of Sacomreal, said that the real estate-project market had grown in 2009 and became busier in late 2010, with an increasing number of transactions.

Investors to suspend delayed projects

Investors must make adjustments to construction schedules for delayed projects as limited State capital is available, according to Minister of Transport Ho Nghia Dung.

Because of the capital shortage, Dung said that early announcements from investors on the date of cessation of construction would help prevent losses to bidders.

Speaking at a meeting on construction projects, Dung said that investors must be held accountable for any delays in public investment projects.

Except for projects using Official Development Assistance (ODA), around 100 transport projects will be suspended.

Seventy-five of the projects use capital of VND1.4 trillion (US$70 million) in Government bonds, and the remaining use State budget money of VND3.2 trillion ($160 million).

For other projects that use Government bonds, investors will be allowed to complete several projects this year, with the rest of the capital paid for any construction works completed before March 31 and for land compensation.

"If we don't stop construction in the middle of the second quarter for all 75 projects using Government bonds, all other projects using this kind of capital will be closed because we won't have enough capital," said Tran Quoc Viet, head of the Transport Ministry's Construction Quality Control and Management Bureau.

This year, total capital for infrastructure construction for the sector can meet only 43 per cent of demand, at around VND18.5 trillion ($920 million).

This means that the ministry has the largest number of projects either delayed or postponed in comparison with other sectors.

This could halt construction on many key and national construction projects as well, such as the Ho Chi Minh Road and National Road 279.

"This will lead to damage and waste in equipment and human resources, and will worsen the transport situation," said Nguyen Hoang, head of the Ministry's Planning and Investment Department.

In fact, most transport bidders face serious debt. Two corporations, the Transport Construction Corporation No 1 and Waterway Construction Corporation, have total debt of up to VND2 trillion ($100 million).

Moreover, even though construction will stop temporarily at these 100 projects, they will only have enough capital for urgent works until August.

To cope with the difficult situation, the ministry has asked investors to set up a plan to ensure sufficient transportation and environmental hygiene. The ministry has also encouraged bidders to provide capital themselves to finish road works.

"Project management units for ODA and national key construction projects should speed up disbursement as well as seek outside capital to create jobs and prepare for the 2012-13 period," said deputy minister Ngo Thinh Duc.

Farmers switch to cassava as prices rise

The area under cassava has increased sharply this year, especially in mountainous areas, after the price of the roots doubled recently compared to last year.

The price traders pay for fresh cassava, which is being harvested now, is VND2,000 a kilogramme, while for dried cassava, it is VND4,800-5,000, as demand for exports skyrockets.

In the central province of Phu Yen, farmers in the mountainous districts of Tay Hoa, Dong Xuan, Son Hoa, Song Hinh are reclaiming uncultivated land and switching from growing other crops like sugarcane, corn, and beans to cassava.

Growing cassava involves low costs and it is a hardy crop that requires little care. But at current prices, a ha can fetch a profit of VND15 million-35 million (US$720-1,680) depending on output, farmers say.

Ma Mua, a farmer in Song Hinh Commune in the district of the same name, said: "My family used to grow cassava on three ha but has now increased it to seven ha."

Tran Thanh Dinh, deputy chairman of the Song Hinh District People's Committee, said the district had only planned for 3,000-3,500ha of cassava but the area has already increased to 7,000ha and was continuing to rise.

"Farmers are not only switching from other crops but also destroying forests to grow cassava," he said.

Forest rangers have discovered more than 200 instances of destruction of natural forests to grow cassava. More than 66ha of forests have been felled.

Last year areas under cassava totalled more than 496,000ha, 12,000ha less than in 2009, while output was 8.5 million tonnes, according to the Ministry of Agriculture and Rural Development.

However, figures for the next crop are not available yet.

Tran Duc Lam, deputy director of the Yen Bai Province Department of Agriculture and Rural Development, said last year cassava was grown on 13,000ha and this year it was estimated to increase to 25,000ha.

Before farmers decided to take matters into their own hands, the ministry had said cassava would be grown on no more than 450,000ha to prevent deforestation and, thus, soil erosion.

At a seminar held in northern Phu Tho Province on April 15, Deputy Minister of Agriculture and Rural Development Bui Ba Bong said the focus would be on increasing cassava yields to 17 tonnes per ha from the current 12 tonnes.

Condo owners face dilemma of funds shortage 

Real estate owners are hunting for customers to buy their apartments as they tackle the dilemma of an acute shortage of funds.

The real estate market is also coping with high lending interest rates while the stock market continues to go down.

Project developers are panic selling apartments still under construction or selling entire real estate projects to manage their funds.

PetroVietnam Power Land Joint Stock Company has just begun to sell apartments from the Petrovietnam Landmark condominium project in District 2 in Ho Chi Minh City, at VND19.9 million per square meter.

Construction of the condo project has just completed laying its foundation level.

The owner of R apartment building in a prime location in District 7 has run out of funds and is paying the project contractor by selling apartments at VND20 million per square meter whereas the neighborhood condo prices are actually VND40 million per square meter.

Since there is no market for apartments now, Saigon Land JS Company is investing in buildings to raise salangane, a species of sea bird whose nest can be used as food. A kilogram of nests currently sells for over VND30million.

Around 19 houses of 1,000 square meters each will be built on a total area of 3.6 hectares in Can Gio District, HCMC. The project investor has said he will provide the skilled man power for the up keep and harvesting of the salangane nests as well as buyback all the nests.

Happy Plaza condominium project owner has launched a program to attract buyers by sharing the loan interest with them. Under the program, the owner will pay the loan interest for buyers until they take full possession of the apartment.

Kim Oanh Real Estate Construction and Services JS Company has given savings books worth VND3-50 million to those who buy its land in My Phuoc in the southern province of Binh Duong.

Meanwhile, the developer of Aroma condo project in Binh Duong has offered over 100 taels of gold to those who buy apartments in Aroma Building.

Besides lowering the selling price, many apartment developers have been looking for buyers to resell their projects.

For instance, Dat Xanh Real Estate Service and Investment JSC bought a condominium project from Ha Thuan Hung Company Ltd. to build a 14-floor apartment building on an area of 3,700 square meters in Go Vap District, HCMC.

Hoa Binh Construction and Real Estate Company has now resold its land rights to Dong Duong Company. Dong Duong Co. has paid Hoa Binh Co. US$11.9 million for use of 2,700 square meters of land in South Saigon, District 7.

Early in 2011, Vina Land under Vina Capital Group, a leading asset management, investment banking and real estate consulting firm in Vietnam, completely transferred its shares in the International Housing project in District 9 of HCMC at a total price of US$10.9 million.

Earlier, Vina Land sold 85 percent of its shares in the Mandarin Garden complex project in Cau Giay District in Hanoi.

Vina Development Inc. has sold all its shares in the Blooming Park condo project in District 2 of HCMC to Prudential Vietnam.

Troy Griffiths, from the Research and Valuation Department of Savills Vietnam, said many local realty investors have land but they have problems accessing capital. Therefore, a trend toward cooperation with foreign investors will continue, not just this year but also in the years to come.

Meanwhile, Le Hoang Chau, Chairman of the HCMC Real Estate Association, said real estate enterprises are facing a most difficult year, since they have had to pay higher lending interest rates while being unable to sell their apartments.

Realty companies have launched many promotional programs and lowered their selling costs to less than cost price, to survive.

S Korean firm looks to import unpolished, broken rice this year

International Corp, a major South Korean rice importer, has said it wants to import rice from Viet Nam.

The corporation's representatives announced their intention during a recent meeting with Vietnamese rice exporters where they provided a briefing on South Korea's minimum market access (MMA) mechanism.

According to South Korea's Association of Food, Agriculture, Forestry and Fisheries, the country will embark on this year's plans to import rice from May, mainly unpolished, broken and glutinous rice varieties.

Korean importers said Vietnamese exporters would possibly face tough requirements at first but they were willing to help firms overcome any barriers.

The Viet Nam Food Association said the RoK offered great potential, but was a highly demanding market, and therefore domestic businesses would find it hard to satisfy its demands.

Meanwhile, Vietnamese rice remained a favourite product in African countries for domestic demand and export to third countries in the Africa, said the Ministry of Industry and Trade.

Vietnamese rice has a good reputation in those countries due to its high quality, and therefore, local rice exporters should research those markets carefully to get contracts with good prices.

Nguyen Viet Chien, director of the Ministry of Agriculture and Rural Development's Information and Statistics Centre, said rice gained the largest export value in the first four months of this year.

Rice exports had a year-on-year increase of 30 per cent in volume to 2.8 million tonnes and 22.7 per cent in value to $1.4 billion.

The largest export markets for rice were Indonesia and Cuba.

The Ministry of Agriculture and Rural Development expects the total export volume of rice to reach about 7 million tonnes this year.

Harsh weather during planting tipped to cause decline in rice harvests

Winter-spring rice crops in the Hong (Red) River Delta, the country's second largest producer, and the north-central coastal region are expected to be smaller than last year, Nguyen Tri Ngoc, head of the Cultivation Department at the Ministry of Agriculture and Rural Development said in an online conference on Thursday.

The total rice growing area in the two regions this year is 900,000 hectares, 11,000 hectares less than last year.

Meanwhile, rice productivity is expected to reach an average of 6 tonnes per hectare, a drop of more than 0.2 per cent compared with 2010.

The rice output of the two regions is estimated to be 5.4 million tonnes, a decrease of more than 100,000 tonnes compared with last year.

Ngoc attributed the poor harvest to harsh weather conditions and a prolonged severe cold spell when the rice was being planted, which delayed ripening by 20-30 days.

The late harvest would also affect the structure of the rice in the Red River Delta provinces and the summer-autumn crops in the north-central coastal provinces, Ngoc said.

He advised farmers to select the most appropriate rice varieties for the next winter-spring crop.

Provinces also needed to ensure there would be enough water to properly irrigate paddy fields and take appropriate measure against pests and diseases. Sufficient resources should be concentrated on the winter-spring harvest so that the summer-autumn harvest could be planted on time, he said.

Bui Ba Bong, deputy minister of Agriculture and Rural Development, also suggested that the next crop should be planted early.

Bong said each locality should select four main rice varieties and four supplimentary varieties to plant. He also said research institutes should createthe most suitable varieties.

"Localities must also ensure that irrigation companies have enough money to provide water in a timely manner for rice cultivation for the summer-autumn season," Bong added.

He called on authorities around the country to review cassava cultivation plans and ensure they dovetail with the country's overall plan for cassava.

The crop is grown around the country and cultivated mostly in the central, Tay Nguyen (Central Highlands), and south-eastern regions.

It is a major component of animal feed for which around 1 million tonnes are used a year while it is also increasingly being used for ethanol production.

Last year Viet Nam exported 1.7 million tonnes of dried cassava and cassava products, 90 per cent of it to China, according to the General Department of Customs.

Mid-term CG meeting to take place in June

This year’s mid-term Consultative Group (CG) Meeting will take place in the central province of Ha Tinh on June 8 and 9.

The mid-term CG meeting will provide a forum for the Vietnamese government and international donors to review the country’s socio economic development and assess the progress of Vietnam’s commitments from the previous meeting and measures to improve the efficiency in using Official Development Assistance (ODA) resources.

Last year, international sponsors pledged to provide Vietnam with US$7.9 billion in ODA.

The official CG meeting will be held later this year.