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BUSINESS IN BRIEF 1-11Franchising of Lotteria delayed

South Korea’s fast-food giant Lotteria will postpone franchising deals in Vietnam to 2013.

“Due to franchising complications and Vietnam’s tough economic climate, Lotteria has decided to postpone concessing its trade name to 2013,” said Cho Young Jin, general director of Lotteria Company Limited.

Lotteria first mulled over franchising deals with Vietnamese firms in 2007 after it opened 30 outlets in the country. However, Lotteria revealed that the current time was inappropriate for the company to franchise partly because its target of opening 100 outlets in Vietnam was already achieved.

“Other prominent brand names such as McDonald’s and Burger King are to set up their chains of fast-food outlets in Vietnam. Burger King once stated that an outlet should be opened for each 160,000 people. We have the same strategy,” Jin said. “That shows that Vietnam is a potential market. In the coming period, Lotteria will simultaneously carry out its investment expansion and franchising strategy aiming at growing its presence in the Vietnamese market.”

Tea export rises in 10 months

Viet Nam exported 110,000 tons of tea worth US$ 182 million in the first 10 months of this year, posting respective year-on-year increases of 9% and 8.8%, according to the Ministry of Agriculture and Rural Development.

Pakistan was still the biggest tea importer of Viet Nam, holding a share of roughly 20.6%.

Vietnamese tea export also grew in other major export markets, excluding Russia and Germany.

Vietnamese tea is available in over 100 nations and territories around the world. According to experts, the strongest point of Vietnamese teat is the product having 100% locally-grown content while many other products in the world market still depend heavily on imported materials.

Viet Nam has a tea processing capacity of over 4,600 tons a day and nearly 1.5 million tons of buds a year, ranking 5th in the world. The country has over 450 tea processing facilities with a daily processing capacity of at least 1 tons of fresh buds.

It is striving to export 135,000 tons of tea totaling US$ 220 million this year, and 200,000 tons worth US$ 440 million by 2015.

To this end, the country is facilitating close linkages between tea growers, processing enterprises and traders to improve production and trade efficiency.

Tea firms are modernizing their production lines and turning out products with higher added values to meet market demand and enhance the Vietnamese tea trademark and prestige.

Dearth of funds results in a road of misery for Hoa Binh

The shortage of funds for upgrading a damaged national road that snakes through mountainous Hoa Binh province is posing hardships for thousands of people and stalling economic growth.

Two years ago, the Ministry of Transport (MoT) assigned the province’s Department of Transport as an investor in upgrading the 12B national road. Original plans called for the work to be completed by the end of 2012, but just one-third of the construction work has been done so far.

The 12B national road, stretching 42 kilometres in the northern province, is considered as a nightmare for any driver. Pocked with big potholes and other damage, drivers currently need four hours to cover the route, traveling at about 10 kilometres per hour. The road is regarded as an important link between the delta provinces and the northwest mountains.

“The issue is that we don’t have funds to continue constructing this road,” said Lo Khai, head of Hoa Binh Department of Transport’s Project Management Office.

According to the MoT, this was a government bond-funded project with total investment capital of $23.7 million. But since the upgrading project was started in 2010, Hoa Binh Department of Transport had received only $2.8 million, said Khai.

“We were informed that the MoT will provide this project with $4.3 million in 2013 and around $1 million in 2014. But even if we get that amount of money, it is still insufficient,” Khai said.

Special action would be required to expedite funds. The MoT in March announced that this road was on the list of delayed projects until after 2015 in accordance with the government’s Resolution 11. Resolution 11, issued late last year, introduced a package of measures to tame inflation.

Meanwhile, the road continues to deteriorate. Every time it rains, traffic jams will happen as hundreds of trucks are stuck in this flooded road,” said Bui Van Thang, vice chairman of Lac Son district, Hoa Binh, where the road runs along.

“If we don’t complete this project soon, the cost will increase,” said Khai. Thang said this road caused great suffering for residents. “This muddy road is affecting the lives of everyone here and it affects economic development of our district,” said Thang.

Last month, Vietnam National Textile and Garment Group expressed interest in building a garment factory in Yen Lac, but the group later decided to move to another place due to this road, said Thang. “We just wish the government would complete the upgrading of this project soon,” he added.

Residents living alongside the road also wish this road was complete soon. According to Lac Son and Yen Thuy districts, residents agreed to offer their land to the project and receive compensation later.

Ho Tram Strip accelerates investment

Canada-backed Asian Coast Development Limited last week started construction of the second tower of the MGM Grand Ho Tram Beach at its $4.2 billion Ho Tram Strip project.

The company (ACDL) commenced work on the pile foundations of the new property that will ultimately include 559 rooms and further leisure facilities, connected to the initial 541-room tower which will open its doors in early 2013.

Ho Tram Strip, licensed in 2008, is the most expensive tourism undertaking in Vietnam’s history. The project includes five five-star hotels, of which two will include entertainment facilities, and a Greg Norman-designed championship golf course.

“We are delighted to announce the formal start of construction on a new second tower for the MGM Grand Ho Tram Beach. I am thrilled that our vision for the Ho Tram Strip and for the future of tourism in Vietnam, is coming to fruition so rapidly,” said ACDL chief executive officer Lloyd Nathan.

Construction had initially been planned to begin next year. However, with the rapid construction of the first tower and leisure amenities, further development was accelerated with a view to commencing construction on Tower 2 prior to opening the first phase of the MGM Grand Ho Tram Beach.

The first tower of the MGM Grand Ho Tram Beach and all of its related leisure amenities were close to completion and will be open early next year, said Nathan. In addition, full construction on its Greg Norman Golf Course has been underway for several months and is also on track to open next year.

The MGM Grand Ho Tram Beach is the first hotel in this project which is managed by MGM Resorts International, one of the world’s leading global hospitality companies.

“The first phase of the MGM Grand Ho Tram Beach is just a few months from opening,” said John Shigley, president and chief operating officer of MGM Grand Ho Tram Beach. “With our 2,000-strong team of dynamic tourism professionals preparing for our grand opening, we are thrilled that ACDL is commencing construction of our neighbouring sister tower.”

Shigley said after the completion of the second tower, which will be constructed within about 18 months, MGM Grand Ho Tram Beach ultimately comprises 1,100 rooms. This will become Vietnam’s largest integrated resort.

“We are looking forward to welcoming our customers through our doors and to bringing the unique energy, excitement, and entertainment of MGM Grand to Vietnam,” he added.

Shrimp processors face bankruptcy

About 80 per cent of shrimp processors in the Cuu Long (Mekong) Delta region are on the verge of bankruptcy, says the deputy director of the Ministry of Industry and Trade’s Import-Export Department, Duong Phuong Thao.

While the seafood sector saw high growth in the first quarter of this year, there was a steep drop-off in the third quarter, Thao said.

Seafood exports in the first 10 months of the year totalled US$5 billion, including $2.4 billion in shrimp, but this was well off the pace needed to meet the target set for the year of $6.5 billion, she said.

Shrimp breeders were facing fierce competition from Thai and Indian producers, and shrimp breeding in the Delta has been affected by a prolonged epidemic since 2011. Neither breeders nor processors were utilising safe production processes, she said.

The deputy director of the southern province of Soc Trang’s Department of Agriculture and Rural Development, Nguyen Van Khoi, said the province had lost VND4 trillion ($190 million) during the 2011-12 growing season due to the epidemic.

The deputy director of the southern province of Dong Thap’s Department of Industry and Trade, Phan Kim Sa, also said seafood breeders and processors were paying insufficient attention to quantity.

The seafood sector needed to plan and co-ordinate breeding areas and increase the value of processed products in order to maximise profits for farmers, Sa said, urging regulations be imposed to maintain a floor price on shrimp in order to help struggling farmers.

He also said the Government should more closely supervise the industry to limit unhealthy competition

Aquacultural Breeding Institute director Nguyen Van Hao proposed that local authorities impose good agricultural practices (VietGap) standards to avoid barriers being imposed on Vietnamese seafood by importers.

Deputy Minister of Agriculture and Rural Development Vu Van Tam also said the country should reform its process of negotiating major export contracts and seek more diversified sources of capital to develop the industry.

Ministries try to minimise the use of fuel price stabilisation funds

The two ministries of Finance and of Industry and Trade slashed petrol and diesel oil prices to VND500 to VND300 per litre yesterday in an official letter regulating fuel prices in the local market.

The price of kerosene remains unchanged at VND500 per litre and mazut oil will no longer be supported by the fuel price stabilisation fund.

In addition, the two ministries came to a consensus to keep retail prices and export-import tariffs unchanged for all kinds of petrol and oil.

Key petrol traders are allowed to use the fund in order to compensate for the difference between base price and retail price.

The two ministries will continue to regulate fuel prices in accordance with market mechanisms and will closely monitor the fluctuations of world oil prices.

Agencies urged to boost transparency

Local administrations nationwide needed to improve transparency while working with investors as a way to spur socio-economic growth, said Dau Anh Tuan from the Viet Nam Chamber of Commerce and Industry (VCCI).

Speaking at the 11th anti-corruption dialogue in the central city of Da Nang yesterday, Tuan said Viet Nam had gradually improved transparency in administrative management since the Provincial Competitiveness Index was launched in 2005.

However, local governments should dramatically reform their administrative management and raise awareness of policies and planning.

According to Tuan, a VCCI survey revealed that 75 per cent of businesses said that they had to get investment information through personal relations.

About 40 per cent of businesses had to waste time or pay informal charges to access information regarding legal documents and investment from local administrations.

He said investors used to have to wait for a long time to complete administrative procedures.

“Investors do not know which way to go in a matrix of administrative information provided by different agencies,” Tuan said.

However, he praised the efforts made by some provinces to improve transparency, including Bac Ninh, Lao Cai, Long An, Da Nang, Binh Dinh and Dong Thap.

He said that Bac Ninh had taken big steps to reform administrative procedures.

“In previous years, investors in Bac Ninh Province had to shuttle back and forth at least 36 times to get an investment licence, but now they have cut that by a third,” he explained.

Participants also shared experiences in administrative reform and improving transparency.

Da Nang has seen the most rapid local development in Viet Nam due to its comprehensive reform of administrative management.

“We publish investment, planning, projects and the city’s budget online. Ninety per cent of administrative offices in eight districts are monitored by cameras,” said the city’s vice chairman Vo Duy Khuong.

According to the city’s investment promotion centre, it took investors just five days to obtain a business licence.

The Viet Nam Tokai company’s automobile and spare parts and accessories plant received a business licence in just an hour – the quickest case in Da Nang.

However, the city needs greater efforts to improve its investment environment.

In a survey conducted by the city’s Institute for Social Economic Development, 47 per cent of 188 businesses had to pay for informal charges, while 18 per cent of those businesses had to bribe bank staff to access loans.

VCCI official Tuan suggested all procedures and policies from local government should be posted online and people should be given the right to monitor them, as well as budgets and assets.

Banks finance offshore oil project

PetroVietnam’s Exploration and Production Corporation (PVEP) has signed a total of US$140 million in credit contracts to develop an exploitation project on Viet Nam’s continental shelf.

Under the contracts signed on Monday, OceanBank, VIB, MB, SeABank and LienVietPostBank undertook to finance the company within seven years.

The project is located at Plot 15-2/01, which is 20km from the southern city of Vung Tau and covers an area of 280,000ha. It is expected to begin operation in the second quarter of next year.

“It’s near already exploited oil fields such as Su Tu Den, Rang Dong and Rubi and is therefore assessed to have great reserves of oil and gas,” PVEP said in a press release.

The corporation, a key unit of the Viet Nam National Oil and Gas Group, now has 44 survey and exploitation projects, both domestic and abroad. It has already had operations in Middle East, North and Central Africa, Latin America, and Central and South East Asia.

 Ministry projects 8% inflation

The country’s consumer price index (CPI) was expected to increase 8 per cent for this year against last year if the state continued existing policies on curbing inflation, an official of the Ministry of Industry and Trade (MoIT) said at the ministry’s monthly meeting on Monday.

Vo Van Quyen, head of the ministry’s Domestic Market Department, said a year-on-year increase of 8 per cent for the national CPI this year was possible.

After the CPI experienced a sudden hike of 2.2 per cent in September due to increases in school fees, the State began to control increases in prices of essential goods, with an aim to curb inflation by the end of the year.

As result, the national CPI was under control this month with an increase of 0.85 per cent compared with last year, Quyen said. The index this month surged 6.02 per cent against December 2011.

He said the ministry predicted supply and demand of many essential goods would remain fairly stable for the rest of the year. However, vegetable prices might increase due to stormy weather.

Additionally, pork prices saw a small increase of VND1,000-2,000 per kilo because high input prices slowed pig production and even stopped some from raising pigs.

Therefore, the ministry proposed the Ministry of Finance and the State Bank of Viet Nam come up with comprehensive solutions to encourage farmers to expand their pig herds, such as by lowering interest rates. This would avoid a situation where pork supply for the domestic market fell short of demand, he said.

By this year end, the smuggling of goods – particularly poultry – would increase, said Dao Minh Hai, deputy director of the ministry’s Market Watch Team. Hai recommended that industry and trade departments and cities, as well as provinces, increase market inspections to prevent smuggling.

Industry and Trade Minister Vu Huy Hoang said ministries, sectors and cities as well as provinces should continue working together to ensure that there was enough rice and other foods, as well as other essential goods such as sugar, fertiliser, petrol and oil.

They should continue flexible management for those products and implementation of price stabilisation programmes, Hoang said.

Malaysian developers share experience on social housing

Malaysian property developers shared their experience in social housing construction and development with the Ministry of Construction yesterday in Ha Noi.

The Malaysian construction delegation was led by former prime minister Abdullah Ahmad Badawi in a brief meeting with the Ministry of Construction.

At the meeting, Viet Nam Deputy Minister of Construction Nguyen Tran Nam presented an overview of the social housing construction and development in Viet Nam and blamed the disorganised planning to limited resources and inconsistent investment. By late 2011, the Government issued a national strategy on housing development with a vision to 2030, with the goal of housing for everyone.

Nam said the local real estate market was still unhealthy. Property developers focused on commercial and high-end housing which most people couldn’t afford.

In recent years, the Government launched many housing programmes to help low-income earners in rural areas. The Ministry of Construction focused on housing programmes for students, workers and low-income earners in urban areas.

By 2015, at least 250,000 homes would be needed in Ha Noi and HCM City. To date about 40,000 have been built. Currently, Viet Nam has opened its door for foreign companies to join in the domestic construction market and called for other resources as well.

The delegation shared their experiences on social housing construction for low-income people in Malaysia. They also made suggestion on a number of issues relating to urban development planning to develop convenient transportation systems by connecting core urban areas with satellite cities to ensure sustainable development.

The Malaysians said developing social housing projects needed consistent co-ordination from the government, banks, investors and buyers. Land funds set aside for low-income people must be used for the right purposes and property developers were not allowed to speculate low-income housing developments. The price for social housing cost was half the market price.

The Malaysian Government assisted property developers in law and land only, not in money. Property investors may suffer losses in the early stages but they would collect their investment capital from the buyer’s monthly payments. The Malaysian Government had also asked the Central Bank to support preferential interest rates for buyers.

Nam said he welcomed the Malaysian Premier Asia Capital company to join in developing housing projects in Viet Nam and that the Ministry of Construction was committed to supporting the company in term of policy and relations with local authorities. He said the ministry also wished to have access to information on the social housing legal framework in Malaysia.

Investors in Laos confront new policies

Vietnamese investors in Laos and Cambodia must prepare for several changes in foreign investment policies made by Laos and Cambodia, the Ministry of Planning and Investment has said.

According to a report by Dau Tu (Investment) newspaper, the ministry’s Foreign Investment Department said that Laos has suspended the issuance of new investment certificates for mineral exploitation as well as rubber and eucalyptus cultivation in the country.

It has also decided to suspend certificates to the end of 2015 while it reviews and amends its licensing procedures for foreign investment projects.

Many foreign-invested projects have either not started or have begun very late, according to government officials in Laos.

In addition to new restrictions on licences, Laos has banned exports of unprocessed crude ore from the country.

Cambodia has also made changes to its foreign investment procedures.

In May, Cambodia suspended the allocation of land for rubber cultivation until December 21, 2015, and last month, it suspended wood exploitation in all old-forest areas, except for projects that build housing for war invalids and for police who live in border areas.

Cambodia also said it would not clear land in areas where residents have lived a long time, and foreign investors would be discouraged from exporting unprocessed wood and ore.

The new policies of both countries would affect many Vietnamese companies, according to the Foreign Investment Agency.

To protect their legal rights and prevent risks to their projects, Vietnamese investors must follow foreign investment regulations and other laws of both Viet Nam and other countries, the department said.

Projects involving the cultivation of industrial trees, including rubber and eucalyptus, must be carefully reviewed, the department added.

To further protect the legal status of their projects, investors should also thoroughly understand land-allocation procedures and regulations in Cambodia and Laos.

The department said it had encouraged investor associations in Laos and Cambodia to support Vietnamese businesses by sending petitions to relevant agencies in Laos and Cambodia about several projects.

It has also encouraged the Viet Nam Rubber Group to review all of its rubber and other industrial-tree projects in Cambodia, and follow through on the Memorandum of Understanding signed between Viet Nam, Laos and Cambodia on the cultivation of 100,000 ha of rubber.

The department said Vietnamese businesses should seek help from government agencies to solve any problems that may arise.

As of the end of September, Vietnamese investors had been issued licences for a total of 214 projects in Laos, with total registered capital of $3.45 billion.

Vietnamese investors have 120 projects in Cambodia, with total registered capital of $2.64 billion.

Shellfish exports sink further into the muck

In the first 10 months of the year, Viet Nam’s export value of two-shelled mollusks fell by 6 per cent to US$70 million, according to the Viet Nam Association of Seafood Exporters and Processors (VASEP).

This was the third consecutive year that the export value for Vietnamese cephalopod and bivalve mollusk exports had dropped.

The export value dropped by two digits in major export markets, including the US, Japan, ASEAN-member countries and China.

In the last nine months, the domestic fisheries industry exported only $58.2 million worth of two-shell mollusks, of which the EU market accounted for 69 per cent of the marker or nearly $40.5 million. Japan made up 9.2 per cent, and the US, 8 per cent.

In previous years, the industry earned $25-30 million from exporting two-shell mollusks to China, but now export value to that country has fallen to only $1.5 million.

With such a slowdown in traditional markets, many Vietnamese mollusk exporters have shifted their interest to new markets and obtained encouraging results, with $ 5 million in France, for example, a year-on-year increase of 500 per cent.

In addition, Viet Nam’s mollusk export value to the Australian market increased from $30,000 in 2011 to over $1 million in the last nine months.

Farmers in Viet Nam began to raise commercial two-shelled mollusks in 2002, mainly in southern and central coastal provinces, including Thai Binh, Nam Dinh, Nghe An, Thanh Hoa, Ha Tinh, Quang Binh, Quang Tri and Thua Thien-Hue.

Of the provinces, Thai Binh and Nam Dinh have the largest farming areas, with each province generating about 50,000 tonnes annually.

Lower sales overseas have affected farmers, as up to 50 per cent of the country’s two-shelled mollusks are exported.

Although prices of mollusks have been cut from VND24,000 to VND15,000 per kilo, farmers still have unsold products, according to a VASEP representative who declined to be named.

Nam Dinh, for instance, has the largest two-shelled mollusk farming area in the northern region, with 1,600ha in Giao Thuy and Nghia Hung districts.

So far this year, farmers in Giao Thuy District have produced about 22,000-23,000 tonnes of mollusks but have sold only 5,000.

Farmers in Thai Binh are also facing a similar situation. According to the agriculture office of Tien Hai District, 20,000 to 25,000 tonnes of two-shelled mollusks remain unsold.

China’s has reduced by half its imports of mollusks from the province.

VASEP experts said farmers who raise the mollusks should diversify their markets in order to create stable outlets for exports that have high economic potential.

Call to reform gas distribution

The Viet Nam Gas Association has called for the management of the gas market to be tightened to prevent fake gas being sold and to create a healthy environment for gas businesses to do business in Viet Nam.

Vice president of the association, Le Thi Anh Man, said that illegal gas extraction remains rife, despite efforts to tackle the problem and improvements recorded in some localities.

She said that this may be one of the reasons that some large companies have finished their involvement with the gas business in the country.

Most recently, Royal Dutch energy and petrochemical giant Shell sold its liquefied petroleum gas business in Viet Nam to Thailand’s Siam Gas Company. Shell claimed that the transaction was in line with the company’s strategy, despite them having been the leading brand in the country with a market share of 2-3 per cent and a nationwide distribution system.

They are the latest company to withdraw from Viet Nam’s gas market, following the US’s Mobil Unique Gas in 2006 and the UK’s BP Gas in 2009.

According to the association, there were about seven foreign companies currently operating in Viet Nam after the exit of Shell, occupying around 10 per cent of the market share.

Nguyen Sy Thang, the association’s president, said that the growth rate of the gas market this year was expected at between 5 and 6 per cent, equalling only half the figures of previous years. He added that gas inventories were also high, pushing companies in difficulties.

Man added that fake gas was the biggest worry to both domestic and foreign enterprises as preventative measures were still not strong enough.

She also named the appropriation of gas tanks as another major concern. Tanks are the biggest asset to a gas company, normally accounting for 60-80 per cent of the company’s total assets. However, according to the association’s statistics, only about 40 out of 200 gas companies and stores have their tank model registered.

In recent times millions of gas tanks were not returned to their original owners, according to the association. They estimate that fake tanks make up 30 per cent of the total number in the market.

Singapore’s Ascott to manage apartment towers in District 2

The Singapore-owned Ascott has won a contract to manage 268 units in two apartment towers at The Vista in HCM City’s District 2.

The 100 units at the Somerset Vista HCM City are expected to be ready for occupation in December, and will be let out as serviced apartments. The 168 units at the Vista Residences will be leased starting in November. The Vista was developed by Singapore’s CapitaLand and the local Thien Duc Trading Construction Co and Phu Gia Investment Joint Stock Company.

Techcombank wins award as Best Issuing Bank in Asia

Techcombank, the only bank in Viet Nam, was awarded by International Financial Corporation (IFC) as the Best Issuing Bank in Asia for its significant contributions in trade and supply chain finance in the region for three consecutive years. IFC, a member of the World Bank, announced the awards during its 5th Bank Partner Meeting in Dubai, Saudi Arabia, yesterday.

Electricity rates remain unchanged

Electricity prices did not rise in October and will not rise in November as planned, Dang Huy Cuong, head of the Electricity Regulating Department said yesterday.

Cuong said this was decided after the department found out that production expenses during the past three months were lower than calculated.

Power production in October was about 9.9 billion kWh, an increase of 11.8 per cent compared with last year.

In the first 10 months of the year to date, productivity was about 95.6 billion kWh, an increase of 13.8 per cent compared with the same period last year.

Demand for power next year is forecast to be 13 per cent higher than this year. To meet the demand, Electricity Vietnam plans to open six more turbines.

The Prime Minister Nguyen Tan Dung will decide whether to go ahead with hydro power projects 6 and 6A, which were criticised for changing the natural water flow in the southern Dong Nai River.

Nguyen Khac Tho, Deputy Head of the ministry of Trade’s Power Department, said the postponement of the projects was to assess their effects on the environment. He said hydro-power plants were necessary because supplies of fossil fuel were shrinking.

“Nevertheless, we are determined to eradicate plants that are ineffective and harmful to the environment,” Tho said.

The ministry is now assessing hydro power plants across the country to consider the benefits and side effects on forests, use of land, residential relocation and safety.

Asked why retail prices of petrol did not fall in line with world prices, Nguyen Xuan Chien, deputy head of the ministry’s Domestic Market Department, said the current price was subsidised.

And the world price did not fell constantly, but fluctuated daily, Chien said.

Property developer puts luxury villas on market in Sa Pa

Truong Giang Sapa Joint Stock Co officially offered to the public the Sapa Villas & Mountain Club, a component of the 47.5-ha Mercure Sapa Resort & Spa complex in the mountainous town of Sa Pa, on Monday in Ha Noi.

The move was seen as a promising sign, proving that the tourism and real estate segment of the domestic real estate market still has untapped potential despite the difficult economic situation, the company said during the event.

The component, which comprises 15 villas and 181 standard houses, is slated for completion in the second quarter of 2014.-

International jewelry expo shines in HCM City

The 21st Viet Nam International Jewellery Exhibition will be held in HCM City from November 1-5. The annual event, the largest Gem and Jewellery show of its kind in Viet Nam, will draw 120 domestic and international exhibitors from Hong Kong, Italy, Singapore, Thailand and the US.-

International jewelry expo shines in HCM City

The 21st Viet Nam International Jewellery Exhibition will be held in HCM City from November 1-5. The annual event, the largest Gem and Jewellery show of its kind in Viet Nam, will draw 120 domestic and international exhibitors from Hong Kong, Italy, Singapore, Thailand and the US.

Consortium of banks finance Vietnam Airlines fleet purchase

A consortium of banks, including Citi and Development Bank of Japan (DBJ), has announced the closing event of an agreement with Vietnam Airlines to provide loans for the purchase of two Airbus A321s from Airbus, the Toulouse, France-based manufacturer.

An Export Credit Agency (ECA) facility of US$110 million has been arranged and financed by Citi and DBJ with the support of European Export Credit Agencies. The two aircraft were delivered in June and August.

“This finance package will enable Vietnam Airlines to accomplish its fleet expansion plan, which aims to enhance our operating efficiency on both domestic and international routes,” said the carrier President and CEO Pham Ngoc Minh.

Ha Noi merchants to kick off sales promotion month in November

Ha Noi Sales Promotion Month 2012 will take place in November, offering consumers the opportunity to access a wide range of discounted goods such as food, beverages, garments, and electronic appliances.

The event provides the 500 businesses in the city with a chance to gain consumers’ interest while the national economy continues to struggle.

Saturdays and Sundays will be observed as Golden Promotion Days in 25 locations across the city, where discounts of 20-50 per cent will be applied to major items including electronics, machinery, food and beverages. The highlight of the Promotion Month will be an Online Sales Week starting on October 31. Around 100 businesses will offer online shopping services with product prices cut by half.

Decree encourages use of e-customs

The Government issued Decree No 87/2012/ND-CP on October 23, detailing provisions of the Law on Customs relating to electronic customs procedures. Under the decree, which takes effect on January 1, individuals and organisations will be able to make electronic customs declarations 24 hours a day, seven days a week. An e-customs declaration will also take priority over a paper declaration when Customs officials ask to inspect the details of customs documents or actual goods. The decree also stipulates that individuals and organisations making e-customs declarations can pay customs fees upon making each declaration or on a monthly basis. Such individuals and organizations must use digital signatures registered with Customs offices.

Plastic bags subject to environmental taxes

The Ministry of Finance issued Circular No 159/2012/TT-BTC on November 11 amending Circular No 152/2011/TT-BTC on environmental taxes. The new circular requires that bags made from high-density polyethylene resin, low-density polyethylene, or linear low-density polyethylene resin are all subject to environmental taxes, except for nature-friendly products as certified by the Ministry of Natural Resources and Environment.

The circular also provides that goods that are exported or entrusted to be exported by manufacturers or processers, as well as materials imported for fabricating and processing of these goods, shall be exempt from environmental taxes, unless such goods or materials are acquired for the purposes of export.

Circular No 159 further provides that the manufacturers of all goods subject to environmental taxes that are manufactured domestically or held within bonded warehouses and sold domestically must declare and pay environmental taxes.

The circular takes effect on November 15.

State Bank hopes gold will lose its sheen in Viet Nam

The State Bank of Viet Nam has no plan to import gold any time soon since the metal is neither an essential item nor benefits the economy, Deputy Governor Le Minh Hung has said.

The Government had decided not to stabilise gold prices or spend foreign exchange to import it also to discourage the practice of investing in gold and stop its use in commercial transactions.

The latter phenomenon is akin to dollarisation in an economy where people prefer to use dollars instead of the country’s own currency.

The central bank issued a Circular ordering banks to stop accepting gold deposits and return all the gold to depositors by November 25. But it later deferred the date to June 30, 2013.

Hung said the SBV’s ban on gold deposits was because it was a very high-risk business.

The high interest rates on gold deposits encourage to buy and use the metal, and the country has to spend large amounts of foreign exchange to import it.

Hung said the Government’s new policy was to treat gold similar to foreign currency.

Gold will be bought and sold by enterprises and banks instead of being lent and borrowed as it is now, with the Decree stipulating that these transactions will be implemented through authorised enterprises and credit institutions.

The public is allowed to possess and trade the precious metal with the authorised firms.

Hung said they can go to banks for the safekeeping of their gold, leaving them in safety deposit boxes for a fee.

Banks would buy from and sell gold to individuals, and the central bank would buy from the banks.

Since the central bank no longer had the task of stabilising gold prices, it would buy when they went down to improve its reserves, and sell when they rise.

It would also export the metal to increase its foreign currency reserves.

With this treatment for gold, the precious stone will be regularly transformed into dong to be injected into the economy.

Gold deposits and loans at banks have fallen by 50 per cent, which has helped ensure banks have enough dong liquidity.

Hi-Tech Agriculture Park in Cu Chi District highly productive

Although the Hi-Tech Agriculture Park in Cu Chi District of Ho Chi Minh City has only been in operation for a few years, it has contributed a great deal to the local market.

According to Tu Minh Thien, deputy head of the Management Board of the Park, the Hi-Tech Agriculture Park has supplied the market 54 tons of seeds of gourd, pumpkin, pepper, cucumber, bitter melon, winter melon, luffa, and greens, more than 1,500 liters of biological produce, 720 tons of mushrooms, 4,000 pots of ornamental Ganoderma mushrooms and 30,000 bags of edible mushroom molds.

The Park has supported individuals to grow vegetables and given instructions for producing vegetable seeds, and bought back 4.7 tons of vegetable seeds, and 107 tons of vegetables, such as eggplant, honeydew melon, and water morning glory, mainly for export. It also transferred technology to 18 organizations and individuals, and received 383 students from various universities for internship programs.

Legal procurement a concern of wood processing industry

At a recent meeting with the Association Technique Internationale des Bois Tropicaux (ATIBT), Tran Quoc Manh, deputy chairman of the Handicraft and Wood Industry Association, said that Vietnamese wood processing factories are concerned about legally procured material from other countries, to meet the strict regulation demand of major markets.

Vietnamese wood processing factories consider this an urgent matter to be able to meet the strict regulations of two important markets, such as the US Lacey Act, that fights the illegal trafficking of wild plant species and the EU Forest Law Enforcement, Governance and Trade.

Vietnam is one of the most important countries for timber and furniture exports. Within just 10 years, total timber product export turn over has increased from US$2.19 million to $3.9 billion.

Thus, Vietnam has become the second timber products exporter in Southeast Asia. For this, Vietnam has to import $1 billion material to make export items.

To make sure that Vietnamese furniture complies with regulations set by export markets, especially EU countries, the industry must buy legally procured items. This measure could and should be an opportunity for African timber exports to develop in Vietnam. Currently, the country is importing wood from the US, New Zealand, Myanmar, Laos, Cambodia and Chile.

The fact that ATIBT arrived in the country to study and market material proves that the country is highly valued by international organizations.

The Ministry of Industry and Trade said that Vietnam has exported all kinds of furniture in the first ten months of the year, achieving a turnover of $3.4 billion, a year-on-year increase of 20 percent.

The ministry also predicts that this year the country would earn up to $4.6 billion in exports, ranking the wood processing industry in Vietnam as one of the top ten most important export sectors.

Toll station fee collection raises public concern  

Motorway toll stations in different localities nationwide have been discovered mistakingly collecting vehicle fees.

On April 8, Thien Tan Investment and Construction JSC put into operation the first phase of a bypass project in Duc Pho District, Quang Ngai Province under a Build Operate Transfer (BOT) contract. This is the first BOT project in the province. The first stage is VND600 billion (USD28.5 million) 9.7km road section. On April 18, the investor began operating a toll station as part of the project to recoup its investment capital.

However, the toll booth was positioned on National Highway 1A, 5km from the bypass. Therefore many vehicles that were not using the bypass were forced to pay fees.

Ha Hoang Viet Phuong, Deputy Director of Quang Ngai Province’s Transport Department said, “We have considered this, but the ministries of Transport and Finance allowed us to put the station on the national highway, therefore all traffic has to pay the fees despite them travelling along the highway.”

He also added that if the toll booth was situated on the bypass, the project would not attract the investor because the fees would not be enough to cover the investment capital.

Although the Ca pass tunnel project has not yet been started, the project investor Ca Pass Tunnel Investment JS Company has already been allowed to collect fees at two toll stations.

The Ministry of Transport agreed for the investor to take over Ban Thach toll booth in June and Ninh An booth in August for carrying out the project, however, to date, the project has not yet begun work.

Nguyen Thanh Quang, former Party Secretary of Phu Yen Province said the investor should only have been permitted to operate the toll stations when the project had been completed; and again both toll booths were quite far from where the project will be implemented.

Company spokesperson Dao Ngoc Thanh explained the anomaly saying, “Due to difficulties in implementing the project, the government agreed to let us operate the two toll stations. Based on fees, we could meet the requirements to get a loan of VND364 billion from the banks. The fees collected now are mostly used for repaying the loan.”

Dong Nai Bridge Investment and Construction JS Company manages Song Phan Toll Station on National Highway 1A in Ham Thuan Nam District, Binh Thuan Province. Under the BOT contract, the company collects the fees to recover its investment capital for the new Dong Nai bridge construction within 29 years and 11 months, starting from January 2009.

However, drivers have complained about how the fees have been collected because the station is up to 140km from the bridge.

Nguyen Van Minh, a driver in Ham Minh Commune, said that over recent years his vehicle has only operated within the locality and never used Dong Nai Bridge, but every day, he still has to pay fees.

Tran Trung Nguyen, Head of the toll station, said the toll station was scheduled to be removed to the new Dong Nai Bridge area by the end of 2014, but the specific timetable had not yet been given because the relocation depended on pace of bridge construction.

According to a preliminary statistics report by Binh Thuan Province’s authorities, around 5,000 vehicles pass through Song Phan Toll Station every day, bringing the station hundreds of millions of dong in revenue.

Source: VNN/VNA/Dtinews/VIR/SGT/VNS/SGGP

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