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WB helps improve electricity access

A credit agreement to fund the Vietnam Distribution Efficiency Project was signed in Hanoi on November 8 between the Electricity of Vietnam and the World Bank.

The project aims to provide electricity users across Vietnam with better quality and reliable services, and to reduce greenhouse gas emissions through efficiency improvements.

“The efficiency and modernization investments under this project will improve the reliability of energy supply to industries and households and contribute to Vietnam’s socio-economic development,” said Victoria Kwakwa, the World Bank Country Director for Vietnam.

“Successful implementation of this project will contribute to strengthen Vietnam’s competitiveness and environmental sustainability, which are also key pillars of the World Bank’s strategy for Vietnam in the 2012 – 2016 period,” said Hung Tien Van, Senior Energy Specialist and Task Team Leader for the project.

The project will contribute to meeting the National Energy Development Strategy to 2020’s objectives by reducing investment needs in the power sector, strengthening energy security and adapting to climate change.

The World Bank contributes US$449 million to the US$800 million project and US$30 million comes from the Clean Investment Fund (CTF) to support the implementation of smart grid technologies.

The Australian Agency for International Development (AusAID) provides US$8 million in grants for technical assistance and capacity building. The remaining investment of US$313 million will come from the Government of Vietnam in counterpart funds.

The World Bank has closely collaborated with the Government of Vietnam over the last decade to expand the power network and to provide electricity to all parts of the country.

As a consequence, access to electricity has increased from 50 percent in 1996 to about 97 percent in 2011. Today the focus of World Bank assistance has shifted from providing new electricity connections to improving the quality of services to consumers.

Workers back to Libya

Vietnamese guest workers who returned home from the 2011 Libyan political crisis will have the chance to work again in the African nation under a pilot programme.

The Ministry of Labour, Invalids and Social Affairs (MOLSA) is coordinating with the Ministry of Foreign Affairs and representative Vietnamese agencies in Libya to work on the pilot programme.

They are considering allowing labour export businesses that sent Vietnamese workers to Libya before 2011 to bring the workers back to this African nation.

MOLISA will work with relevant agencies to expand programme in the first quarter of 2013, depending on the real situation in Libya.

The Libyan political crisis in early 2011 prompted Vietnam to repatriate more than 10,000 of its workers from this African nation. The situation in Libya is stable now, and this market is beginning to employ workers for national reconstruction.

The Prime Minister has also agreed with a MOLISA proposal to bring back workers to Libya.

Vietnam, Denmark cooperate in wind power development

Danish company Vetas, the world’s largest maker of wind turbines, has signed a cooperative agreement with Cong Ly Construction-Trade-Tourism Co, Ltd to work towards the development of a wind turbine factory in Vietnam.

At the signing ceremony in Hanoi on November 8, Jen Tommerup, President of Vestas Asia-Pacific and China division said that the agreement will be implemented under the sponsorship of the Danish International Development Agency (DANIDA), facilitating cooperation between the business communities of both countries in the growth of green energy.

Both sides will conduct assessments of the business environment, energy market and wind power potential in Vietnam, as well as partnership opportunities for development for the first phase of the agreement which runs from November 2012 to January 2013.

They will then devise the most effective strategy for carrying out wind power projects in Vietnam.

Vesta currently provides wind energy to more than 70 nations around the world.

Furniture Fair offers home comforts

The Viet Nam Furniture and Home Furnishing Fair aiming to attract more domestic customers is being held in HCM City’s Tan Binh Exhibition and Convention Centre from November 8-11.

Organised by the Handicraft and Wood Industry Association (HAWA) of HCM City, the fair features more than 300 booths displaying products from 84 local companies involved in wood processing, fine arts and interior decoration.

Products on display include indoor and outdoor furniture, curtains, fabrics, flooring materials, kitchen equipment, lights, picture frames, porcelain and pottery.

Le Van Khoa, deputy director of the HCM City Department of Industry and Trade, said that Viet Nam was a promising market for furniture and other wooden products because of its population of 90 million and rising income levels.

Viet Nam, with exports of about US$4 billion a year, has been the largest furniture exporter in the Association of Southeast Asian Nations (ASEAN).

However, its products remained unpopular at home, opening the door for an influx of imported products, Khoa said.

The lower volume of purchases of local wooden products was due to the lack of large distributors and the absence of ties between manufacturers and distributors, said Nguyen Chien Thang, HAWA chairman.

Locally made furniture only accounts for 20 per cent of the domestic market, while the remainder is from foreign markets, mainly from China.

Viet Nam, Uruguay make trade promises

Viet Nam and Uruguay plan to help each other enter their respective regional economies, government and business officials of the two countries have said.

The two governments will create the necessary conditions to help businesses, with Viet Nam acting as the bridge for Uruguay’s companies to enter Southeast Asia, and Uruguay the gateway for Vietnamese firms to tap the South American region.

Speaking at a seminar on Viet Nam – Uruguay business opportunities organised in HCM City on Wednesday, Nguyen The Hung, deputy director of the Viet Nam Chamber of Commerce and Industry (VCCI), said potential for further trade existed, especially in the breeding, agriculture and forestry, biological technology, paper and rice industries.

Le Manh Ha, deputy chairman of the HCM City’s People’s Committee, who also spoke at the meeting, said that Viet Nam welcomed foreign investors, and would export more rice, garments and telecom equipment as well as agri-forestry products.

Uruguay’s vice president, Danilo Astori, told seminar participants that his country had an open economy with a good regional location.

“The country cares a lot about investment in Asia, and is committed to having a stable investment environment for foreign investors,” said he added.

He said that Uruguay treated foreign and domestic investors in the same way.

During the seminar, representatives from Uruguay spoke about their free trade areas and port infrastructure.

Besides calling for more Vietnamese exports, they said they could help Viet Nam tap the Mercosur, South America’s leading trade bloc, comprising Argentina, Brazil, Paraguay, Uruguay and Venezuela.

Trade relations between Viet Nam and Uruguay have occurred for many years, but total value remains modest.

In 2007, trade turnover between the two countries was US$27 million, but increased to more than $64.6 million in 2010 and $75 million last year. In the first eight months of this year, bilateral trade was more than $45.2 million.

Petrol traders ordered to stop abusing stabilisation fund

Domestic retail prices for petrol and oil will remain unchanged, while petrol traders have been asked to stop using the fuel stabilisation fund as they are making profits from petrol, the Ministry of Finance has said.

The ministry sent the requirement to petroleum wholesale traders, saying the difference between base price and retail price showed that they made profits of VND31 per litre for A92 petrol and VND248 per litre for mazut.

Kerosene and diesel made losses of VND464 and VND297 per litre respectively.

However, if the traders used the financial assistance of VND300 per litre from the fund for petroleum and diesel and VND500 per litre for kerosene and diezel, they would all make substantial profits.

The ministry attributed the reason for the move to falling petrolium prices in the world market.

According to Bloomberg, petroleum prices in the world market recently hit a four-month low. In the Singapore market, the price of petroleum A92 fell 2.36 per cent to US$109.55 a barrel while petroleum A95 decreased 2.31 per cent to $112.24 a barrel.

At the end of last month, the ministry also announced a similar move to ensure retail prices of the items remain unchanged.

Gas prices in Viet Nam are expected to rise in coming months, reflecting trends in the global market, according to an industry leader.

Chairman of the Viet Nam Gas Association Nguyen Sy Thang made the statement to the Sai Gon Economic Times, saying price hikes appear likely.

However, Thang said the increase would depend on demand in the US and Europe which are the major gas consumers. In addition, the world economic crisis should ensure that demand will not be too high.

He said the association has monitored the world situation and proposed that the Government reduces import tax.

Vietnamese handicrafts on show in Germany

Domestic handicraft producers are showcasing their products at the Import Shop Berlin, one of the biggest sale exhibitions in the Europe.

Deputy director of Ha Noi’s Department of Industry and Trade Nguyen Thi Nhu Mai described the event as an excellent opportunity for local handicraft makers to better understand the market demand and increase trade.The event will run until Sunday.

VietJetAir continues biggest ever sale

VietJetAir’s mammoth air ticket sale, offering 67,000 discounted tickets at just VND10,000 (US$0.50) each, has finally taken off, the carrier announced on Wednesday.

As part of VietJetAir’s ongoing promotion programme, which will overall offer 100,000 tickets for just VND10,000 each, these flights will be sold until today at www.vietjetair.com.

The remaining tickets will be made available from December 5-7. Tickets are valid for flights until the end of 2013 from HCM City to Da Nang, Ha Noi, Nha Trang, Hai Phong, Vinh, Hue and Phu Quoc as well as from Ha Noi to Da Nang and Da Lat.

VPBank allowed to increase charter capital

The Governor of the State Bank of Viet Nam has given the Viet Nam Prosperity Commercial Joint Stock Bank (VPBank) the green light to increase its charter capital to VND5.7 trillion (US$271.4 million) from its current VND4.43 trillion ($211 million).

Issued under Decision No 7205/NHNN-TTGSNH, the capital will be taken from undistributed profits and additional capital reserves under its recapitalisation plan approved by the General Shareholders’ Meeting.

VP Bank has prepared documents reporting to the State Securities Commission of Viet Nam in accordance with law and shareholders permission.-

No fuel price cuts despite global fall

Despite fuel prices in the global market is continuously falling, domestic retail prices remain unchanged as ruled by the ministries of finance and industry and trade.

In Document 15448 just sent to fuel wholesalers, the ministries decided that fuel retail prices and import tariffs are kept unchanged.

Meanwhile, oil traders will have to stop using the price stabilization fund to cover their expenses for petrol and fuel oil, but still can extract VND300 and VND500 from the fund for each liter of diesel and kerosene oil respectively.

In addition, the profit margin of VND300 per liter is applicable once again starting from 7 p.m. on Tuesday, ensuring agreeable profitability for the wholesalers.

The ministries explained that the average basic prices of RON 92 petrol and fuel oil in the 30 days from October 7 to November 5 were VND31-248 lower than their current retail prices. On the other hand, the basic prices of diesel and kerosene oil are VND297 and VND464 higher than their retail prices respectively.

If allowed to use the price stabilization fund, wholesalers would earn VND3-331 in profit from each liter of fuel.

Tran Ngoc Nam, deputy general director of Petrolimex, said his firm could not cut retail prices at present because diesel and kerosene oil still needed financial tools, meaning the price stabilization fund, to avoid incurring losses. Besides, fuel wholesalers have to comply with the decisions of the ministries of finance and industry-trade.

“If the global prices declined further in the near future, then the price stabilization would not be deducted for diesel and kerosene oil anymore and that’s all,” said Nam.

Le Xuan Trinh, deputy general director of PV Oil, told the Daily that fuel prices in the world’s market had recently been volatile and not completely on the downtrend.

According to Bloomberg, petrol prices in the Singaporean market dropped sharply in the trading session earlier this week. In particular, price of A92 petrol fell 2.36% to US$109.55 per barrel and A95 petrol price lost 2.31% to US$112.24 a barrel, the lowest level since July 12.

Despite saying that they could not afford to reduce fuel retail prices, fuel wholesalers admitted they had increased discounts for sales agents.

Leader of a fuel wholesale company in the southern region said the discount rates were now higher than early September. However, he declined to reveal the specific figures.

Quyen, a fuel sales agent of Petec in Thanh Hoa, confirmed this information, saying the commission rate had been raised to VND500 per liter, versus VND450 ten days earlier and VND300 on September 11.

Nguyen Van Thuong, manager of Hoang Nguyen filling station in HCMC’s Binh Thanh District, informed PV Oil had increased discounts for retailers long ago.

SJC imports gold testing machine

Saigon Jewelry Company (SJC) has imported a new gold testing machine to speed up the slow gold quality evaluation process, said Nguyen Hoang Minh, deputy director of the central bank’s HCMC branch.

With the new equipment that is arriving in the country, the enterprise will be able to evaluate around 2,000 gold taels each day. SJC now has four testing machines.

As it will take SJC over six months to evaluate nearly 400,000 gold taels to help spur gold liquidity in banks, lenders are under tenterhooks to convert their gold into SJC brand to pay their customers.

Explaining why SJC has to test each gold bar instead of a sample of a batch of the same brand like other goods, a representative of the central bank told the Daily that not all gold samples brought to SJC have met 9999 gold bar standards. In fact, sometimes up to three to four out of a batch of 10 gold bars of the same brand failed to the meet the standards.

Nguyen Thanh Long, chairman of the Vietnam Gold Business Association, said that gold processors evaluate their own products and bear responsibilities for gold quality. There has been no State agency evaluating gold and granting quality certificates to gold bars.

Only when gold bars have to be converted into the SJC brand, the products are evaluated. As SJC is reprocessing gold for the central bank, the enterprise has to bear responsibility for gold quality as well.

Having mobilized many types of gold bars for a long time while pledging to pay customers SJC gold, local banks have seen non-SJC gold stockpiling up in recent time.

To solve the problem, many enterprises suggested temporary export of gold bars and re-import of gold blocks to help speed up the reprocessing, although gold export may cause heavy losses due to the global and local gold price difference of over VND3 million a tael.

If the solution gets approval, banks have to bear all costs for exports, reprocessing and imports of gold, according to a source of the central bank.

Another solution is that enterprises will turn gold bars into bullion by themselves to help SJC fasten evaluation. However, this way will also be time consuming as there are just a few gold block processing machines in the country.

In related news, the domestic gold prices on Wednesday shot up by VND750,000 to VND46.85 million and VND47.05 million per tael for buying and selling value respectively, rising by over VND1.1 million a tael over the past week.

The yellow metal rose strongly on the New York market on Wednesday as the greenback weakened against other currencies following the victory of President Barack Obama, according to Bloomberg.

Transaction remained normal in recent days. According to a SJC representative, the enterprise traded around 1,000 gold taels each day but buyers took the upper hand, spurring up gold prices.

Aquaculture zone to be turned into port

The People’s Committee of central southern Phu Yen Province plans to ban aquaculture farming in Vung Ro area of Dong Hoa District.

The 1,460-ha zone will be turned into a sea port.

Those who are currently farming there are required to cease their business before October 2013.

About 460 households and businessmen currently raise lobsters and other fish in the area.

The locality said lax management had led to spontanous farming in Vung Ro, polluting the area.

Viet Nam embraces wind power

As an experienced country in wind power development, Denmark was willing to share knowledge and technology with Viet Nam and help tap the country’s huge potential for this form of renewable energy, said Danish Minister of Climate, Energy and Building Martin Lidegaard.

Speaking at a partnership seminar between the two countries yesterday, he emphasised the growing role of wind power in the energy market and its contribution to reducing green house gases and creating jobs, as shown by Denmark’s experiences.

Deputy Minister of Industry and Trade Le Duong Quang said that Viet Nam was targeting to increase the proportion of renewable power from 3.5 per cent in 2010 to 4.5 per cent in 2020 and 6 per cent in 2030.

It had already offered investors incentives including import tax exemption for equipment that wasn’t produced locally, corporate income tax breaks, and no land use or environmental protection fees.

He appreciated Danish aid to Viet Nam aimed at mitigating and responding to the impacts of climate change, as well as renewable energy projects including one in the central province of Binh Thuan.

Also yesterday, Vestas – a Danish wind turbine manufacturer – and its Vietnamese partner Cong Ly Construction, Trading, Tourism Company based in the southern province of Bac Lieu signed a partnership agreement to develop wind farms in Viet Nam.

Feasibility studies would be conducted and finished by the end of this year.

Senior director of Vestas Asia-Pacific and China Naveen Raghavan Balachandran said that Viet Nam was a market with excellent fundamentals for wind power including economic growth, a favourable energy mix, abundant wind resources and an emerging wind power policy.

However, he pointed out challenges including a lack of detailed wind studies and its compatibility with infrastructure, and the limited capitalisation of local banks which meant reliance on international banks, resulting in a high cost of capital to compensate for market and sovereign risks.

Moreover, the country’s current wind feed-in-tariff was not high enough to enable projects to become financially viable, he said.

Saigon South receives excellence award

Saigon South, the new urban area in Ho Chi Minh City, has been selected for the ‘Global Awards for Excellence’, for its unique plan and design and for its efforts to improve community development.

Saigon South is an investment project of Phu My Hung Joint Venture Company and is among the outstanding projects selected for ‘Global Awards for Excellence’ at the Fall Meeting of the Urban Land Institute (ULI) hosted in the US recently.

Two decades ago, construction of the 433 hectare Saigon South kicked off in Nha Be District. At that time, Nha Be was just a swamp area with thick forest.

The construction of Tan Thuan Export Processing Zone, Hiep Phuoc Thermal Plant, Hiep Phuoc Port, Nguyen Van Linh Highway and Phu My Hung New Urban Area has transformed the entire swamp into an urban jungle.

The once swampland has now become highly valuable, where investors seek lucrative opportunities, successful people look for a good living environment and workers find stable employment.

Saigon South is a very successful project created by the State and Taiwanese CT & D Group, which not only meets urban civilization needs but also boosts long-term benefits in the Asian region.

ULI began the Global Awards for Excellence program in 1979 with the objective of recognizing truly superior development efforts. Jury members of the awards come from different nations and territories and diverse fields like real estate, planning, design and community development.

HCM City attracts US$1.18 billion in FDI projects

Up till October 15, Ho Chi Minh City had attracted 312 foreign direct investment projects, bringing in US$1.18 billion in revenue from 36 countries and territories, with newly-registered capital at $490 million, according to the City Statistics Office.

Besides, 97 existing projects registered to increase their investment capital for an additional $690 million.

The first ten month foreign direct investment capital last year was $2.2 billion.

The commercial sector attracted the most number of FDI projects, with 101 projects, while the real estate sector had the most investment capital of $117.6 million. Foreign investors also focused on industrial, healthcare, construction, and science and technology projects.

The City Statistics Office said that 24 projects shut down operations while 54 projects with a total capital of $1.29 billion were dissolved or revoked licenses ahead of schedule and moved to another province. The numbers of valid projects until October 15 were 4,438, with a total investment capital of $31.3 billion.

 Local tire and inner tube makers in tougher competition

As the competition in the local tire and inner tube market gets fiercer, local manufacturers now find it really difficult to fight for their shares with foreign-invested companies using higher technology, a local industry source said.

Nguyen Quoc Anh, chairman of the HCMC Rubber and Plastics Association, told a conference in HCMC on Wednesday that the development pace of the tire and inner tube industry now is pretty fast, which also makes the competition tenser.

Therefore, industry insiders have to make efforts to diversify products to compete with items produced by foreign firms, he told the event held by the Vietnam Rubber Association and his organization.

For instance, Anh said, Danang Rubber Company (DRC) and Southern Rubber Industry Company (Casumina) will launch steel radial tires for trucks next year to reduce import demand for tire products used for different vehicles at home.

However, the problem is that while domestic firms have mainly used machinery and equipment imported from Taiwan and China, foreign-invested enterprises are applying technologies of their own parent companies. For example, Kumho is using South Korean technology while both Bridgestone and Michelin are applying technologies of Europe and the United States.

Owing to the great difference between the technologies, Anh wondered how local companies will survive as their products are manufactured on lower technology.

In a recent talk with the Daily, Le Van Tri, deputy general director of Casumina, said the competition between local and foreign-invested enterprises in the local industry is increasingly tougher. A lot of popular brands in the world are already available in Vietnam, including Bridgestone, Michelin, Yokohama or Cheng Shin.

According to the HCMC Rubber and Plastics Association, the total output of steel radial tire products used for light trucks and cars in the market is about three million units a year. The annual output of bias tires is another three million products while that of motorbike and bicycle tires is 40 million and 20 million products respectively.

Besides big companies like Casumina, DRC, SRC, Kumho, Yokohama, Cheng Shin and Velocee, the country has many local firms joining the market, including Tay Do, Dai Thanh Cong, Hai Thanh, Sai Gon and Viet Phat. The local market has also welcomed Kenda, Shinfa and Inoue as foreign industry players.

Other firms like Nguyen Dinh, Hiep On, Cong Nong, Lam Ho Nguyen and Tan Van Ti, meanwhile, specialize in producing tires for farming machines and construction vehicles.

$24 ml to be invested in weaving, knitting plant

Thien Nam Investment and Development JSC and Sunrise Shangzhou textile company of China have inked a joint venture agreement signing ceremony to establish Thien Nam Sunrise Textile JSC.

The joint venture will build a factory in Bao Minh Industrial Park in northern Nam Dinh province at a cost of $24 million, with a production capacity of 1 million metres of woven fabrics and 300 tonnes of knitting fabrics a month.

Thien Nam is a leading spinning enterprise in Vietnam , owning four spinning factories with a yarn production capacity of 25,000 tonnes per year.

Over 70 per cent of products are exported to overseas markets such as Turkey, Brazil, indonesia, the Republic of Korea, and China.

Switzerland helps Vietnam in finance and banking

Deputy Prime Minister Vu Van Ninh received Swiss ambassador Andrej Motyl in Hanoi on November 8.

He praised the ambassador’s contribution to strengthening relations between the two countries and expressed hope that the Swiss Government will send highly qualified experts to help Vietnam perfect its finance and banking system.

In reply, Mr Motyl spoke highly of the results of Vietnam-Switzerland cooperation, especially in the economic field, with many joint projects bearing strategic significance.

Sending Swiss finance and banking experts to Vietnam in late November is part of activities to lift the relations of friendship and cooperation to a higher level.

(VietnamNet)

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