Home » Business » BUSINESS IN BRIEF 17/10

Mining company posts Q3 loss

Bac Giang Minerals Co (BGM) has became the first company in the mining industry to report a loss in the third quarter. Its earnings during the period reached only VND42 million (US$2,000), a sharp decline from the VND8 billion ($383,000) posted in the same period last year. BGM has posted a profit of VND707.5 million in the first nine months, compared to VND27 billion ($1.3 million)in the same period last year.

Shell halts local LPG operations

Dutch energy and petrochemical company Shell has pulled its liquefied petroleum gas (LPG) business out of Viet Nam.

Shell sold its entire share in a joint-venture in Hai Phong, and a HCM City-based company, 100 percent of whose stake it held, to Thailand’s Siam Gas Co (SGP).

The deal was signed on October 3, and under the agreement, the Shell Gas brand would be replaced by Siam Gas within 3 years since the date when the transaction plan was approved by Vietnamese authorities. Shell Gas Viet Nam has not disclosed the values of the purchases.

However, according to the Bangkok Post, it was expected SGP paid US$100,000 to buy 100 per cent of Shell Gas Viet Nam and another $300,000 for Shell’s 79.64 per cent holding in Shell Gas Hai Phong Ltd.

Shell Gas Viet Nam said that the share transference was in line with the company’s business strategy, adding that the company wanted to focus on its oil investments in the Viet Nam market.

Shell is the third global LPG brand to leave Viet Nam’s gas market, following the exit of the US’s Mobil Unique Gas (in 2006) and the UK’s BP Gas (in 2009) and belies the fact that Vietnamese gas market is highly promising with an annual growth rate of 10 per cent.

Shell Gas, entering Viet Nam in 1988, was considered a leading brand after developing a nation-wide distribution system and being the company’s sole brand.

Some commentators said these major companies have left due to rampant illegal extraction of gas in Viet Nam.

However, Nguyen Si Thang, president of the Viet Nam Gas Association, told news website Vnexpress that the sale was “normal”.

“Business is competition. The decision on a transaction is always based on a company’s strategy,” he stressed, adding that illegal exploitation of gas and unhealthy competition should not be attributed for the company’s decision hastily.

On the same day, SGP also signed an agreement to purchase the LPG business and assets of Shell Timur Sdn Bhd in Malaysia. SGP said that the share acquisitions aimed at expanding its LPG business in foreign markets.

Firms urged to work together

Viet Nam Chamber of Commerce and Industry’ president Vu Tien Loc has called on Vietnamese business people to unite to sharpen their competitive edge in the global market.

Making the comment at the Viet Nam Business Forum in Ha Noi on Saturday, Loc said this year’s event took place at a time when the business community was struggling with the domestic economic slowdown.

In order to overcome challenges, business people need to turn crisis into opportunities, said Loc.

Deputy Minister of Industry and Trade Tran Quang Khanh said that in the short-term, banks should extend payment deadlines and offer lower interest rates to businesses. He also urged them to work closely with the Government to tackle challenges and work towards stabilising the macro-economy and restructuring the economy.

Economic experts at the event said monetary policies need to be adjusted in a more flexible manner to both curb inflation and create favourable conditions for businesses to thrive.

The investment environment also needs to be improved, according to experts, to restore investors’ confidence in all economic sectors.

During the past nine months of this year, about 40,000 businesses closed down or halted operations, up by 6.5 per cent from the same period last year.

Exports set to exceed targets, says ministry

Exports are likely to exceed this year’s target of US$109.5 billion, according to the Ministry of Industry and Trade.

They were worth $83.78 billion in the first nine months, a record high, as July and August figures surged above $10 billion.

In the same period, imports were worth $83.75 billion, a 6.6 per cent rise year-on-year, for a marginal trade surplus.

Exports of mobile phones and spares, computers, electronics and spares, fertilisers, electric cables, transport equipment and spares, and others saw strong growth.

The number of products of which exports exceeded $1 billion was 22, compared with 19 last year.

Exports by foreign-invested businesses were worth more than $46 billion, a nearly 38 per cent jump year-on-year.

Telephones and spares and cameras contributed more than $5.4 billion out of this.

Public companies saw exports fall by 0.6 per cent in the first nine months, according to the ministry.

Foreign firms imported goods worth $43.8 billion, while the figure for State-run companies was $39.8 billion.

Due to the continuing economic problems, many State-run companies suspended imports or scaled down or even stopped production.

The ministry said exports by public sector businesses were dropping, implying that measures to help them overcome the crisis have not proven effective enough.

Exports of leading products like garments and textiles, leather and footwear, and wooden products have remained sluggish due to the challenging situation faced by small and medium businesses.

A spokesperson for a large export business focused on Europe said orders from Germany have dropped by half this year.

It is tough to get orders from other traditional markets either, he said, adding that the situation is even worse for smaller businesses.

Another popular export product in the last few years that currently faces difficulties is fisheries.

More than 200 seafood-processing businesses have closed down this year. One of the reasons attributed to this is the increasing competitiveness of other exporting countries like India, Thailand, and the Philippines.

According to the Ministry of Industry and Trade, export of raw materials like crude oil, coal, and minerals accounted for nearly 10 per cent of total exports, while unprocessed and semi-processed agricultural products accounted for more than 20 per cent.

A large number of Vietnamese products are not directly exported to foreign countries but to companies that sell them under their brand names, according to the Trade Research Development Institute.

The country should produce value-added products by further strengthening support industries to achieve sustainable export growth.

Lower rates help tra fish breeders take the plunge

While tough global conditions mean many sections of the economy are currently swimming upstream, tra fish farmers have been given the chance to make a splash after the Government agreed to offer them preferential loan interest rates.

A Government instruction issued in early August decreed that tra fish farmers wishing to expand their business should be able to borrow money at the favourable interest rate of 11 per cent, with many provinces already taking action.

The Government decision came after a series of meetings between ministries, the State Bank of Vietnam and the Vietnam Development Bank to discuss solutions for boosting livestock and aquaculture production.

The majority of the tra fish growers set to benefit are concentrated in the Mekong Delta.

Accordingly, An Giang Province has disbursed roughly VND267 billion (US$12 million) for lending to farmers at the preferential interest rate of 11 per cent annually.

In Vinh Long, the Department of Agriculture and Rural Development said six farming households had been able to borrow loan from the provincial Agribank at the new rate.

Nguyen Huy Dien, deputy director general of the Directorate of Fisheries, said most of the outstanding loans that had been taken for the purpose of breeding, collecting and selling tra fishes have been adjusted to bring rates below 15 per cent.

Dien said currently, the cost for breeding tra fishes is estimated to cost around VND8 billion ($381,000) per hectare and often takes 8-10 months, forcing growers to ask for loans that take a similar time period to come through. At the same time, banks only permit short-term loans at several million dong per ha.

According to the Directorate of Fisheries, it has suggested that the Ministry of Agriculture and Rural Planning outline a policy that would allow non-governmental joint stock banks to offer preferential loans to tra fish growers and raisers.

At the same time, it also suggests the Finance Ministry should allow tra fish growers to recoup VAT taxes for costs related to buying food, as well as adding materials used in the production of livestock food to the price stablisation list.

Viet Nam expects to hit its yearly tra fish export target of $1.8-2 billion, according to the Viet Nam Seafood Exporters and Producers (VASEP).

The Vietnam Tra Fish Association is due to be inaugurated in September, a move expected to provide a further boost to the sector.

Building materials makers hope for rebound in Q4

The building materials industry hopes to rebound by the end of this year as demand from homeowners rises for materials to repair or remodel homes and apartments ahead of the lunar new year holiday, but Dong Tam Long An Joint Stock Co chairman Vo Quoc Thang says any real recovery still depends on a recovery of the real estate market.

Viet Nam Cement Industrial Corporation chairman Luong Quang Khai has said that all building material producers expected seasonal demand to rise in the final quarter, and he noted that many real estate projects have resumed or begun promoting the resumption of construction, which should help increase demand.

Since July, about VND21 trillion (US$1 billion) has been disbursed from the State budget per month to support a number of public construction projects, Khai said. Next year and beyond, this should result in a boost to the building materials industry.

The market for steel and cement rose 15 per cent in the third quarter, while the market for ceramic products rose by 20 per cent, Viet Nam Building Materials Association chairman Tran Van Huynh said.

The industry has faced a number of challenges so far this year, including rising raw material and production costs, slow sales, mounting inventories and abrupt termination of production at some facilities, Huynh said.

To deal with that problems, the association had some proposals to solve current difficulties in production and business for local building material enterprises, said Huynh.

The Government needed policies to encourage domestic construction projects to use locally-produced building materials, instead of importing materials, he said.

He also suggested that the Ministry of Construction create a programme for promoting exports of Vietnamese building materials to markets in Africa, the Middle East and Latin America.

The general development plan for the building materials industry also differed from similar plans adopted at provincial levels, Huynh said, so the ministry needed to supply specific guidance to building materials makers in various provinces in following the national plan, especially regarding such major products as cement, ceramics and glass.

The ministry should also work with banks to restructure the debts of building materials enterprises and create more favourable conditions for these enterprises to access additional credit to finance production, he said.

He urged the ministry to co-ordinate more closely with his association to generate statistics on production and demand, and to include the association in revising the industry development plan.

Enterprises owe huge amounts in back taxes

Businesses in Vietnam owed tax arrears worth nearly VND20 trillion (USD957.85 million) by the end of September this year, one official has said.

Tran Van Phu, Deputy Director of the General Department of Taxation, said at the Ministry of Finance’s meeting on October 11, that the figure accounts for 6.8% of the country’s gross domestic income.

State-owned enterprises owe around VND2.6 trillion (USD124.52 million), representing 13% of the total amount, he noted.

Phu attributed the huge tax debts to economic difficulties. However, the ministry is making efforts to lower the figure to less than 5% of the gross domestic income.

According to the ministry’s report, the country’s gross domestic income totalled VND291.9 trillion (USD13.97 billion) in the first nine months of the year, 63.8% of the ministry’s estimate for this year’s state budget.

The report also showed that state budget revenues reached VND498.49 trillion (USD23.87 billion) during the same nine-month period, 67.3% of the estimates for this year, showing a 1.3% increase from the same period last year.

The state budget revenues were smaller than in years before the economic slowdown.

The ministry has allowed value-added tax extensions for 190,280 enterprises, totaling over VND11 trillion (USD526.81 million) for the period between April and June.

Around 71,630 enterprises benefited from an extension of corporate income taxes, totaling VND2.933 trillion (USD140.46 million) during the period.

The ministry cut land use taxes for 2,425 enterprises in half for 2012, valued at VND250.3 billion (USD11.98 million).

It also exempted and return business license taxes for 2012 worth VND10 billion (USD478,927) for 33,510 household businesses, including those involved in seafood and salt production.

By the end of September 2012, 53 state corporations and enterprises had mapped out business restructuring plans, of which, 23 got approval from authorities.

Currently economic groups are speeding up the implementation of plans to slash 5%-10% of their management expenses as well as reduce business costs in a bid to lower product prices, enhance business efficiency and step up privatisation.

To date, 83 state corporations and economic groups have registered to cut their expenses by a total VND12.486 trillion (USD597.98 million). A total of 5,856 enterprises have been rearranged.

Techcombank named Vietnam’s strongest bank   

The Vietnam Technological and Commercial Joint Stock Bank (Techcombank) has been named the strongest bank in Vietnam, following the recent rankings announced by Asian Banker earlier this month.

The ‘Strongest Bank’ award is calculated based on a bank’s financial situation and business performance in the Asia-Pacific region.

Simon Morris, the General Director of Techcombank, said that the award is clear evidence that highlights the level of trust that clients have for the bank.

It also recognises the bank’s steady growth, which will be a driving force for it to develop further, said Morris.

First established in 1996, Asian Banker is a leading financial commentator that evaluates and rates financial enterprises in Asia.

Hanoi to set prices for apartment services  

The municipal government of Hanoi has asked the Department of Construction to work out a price frame for apartment services as an alternative to the current price ceiling system.

The move is aimed at ending disputes between apartment owners and their management boards.

On September 29, 2011 the city government approved a plan on apartment service prices which defines price ceilings.

Apartment service prices were classified into three groups: apartments without elevators will be able to charge VND2,400 per square metre per month at maximum, apartments with ‘convenient elevators’ VND4,000 per square metre per month and apartments equipped with limited elevator service can charge VND3,100 per square metre per month.

Since then the number of disputes has been on the rise, and the situation has come to the point where an investor has threatened to hand over management of buildings to the municipal government.

The Vice Chairman of Hanoi People’s Committee Nguyen Huy Tuong has asked the municipal Department of Construction to co-operate with relevant agencies to hold a seminar on building and managing apartment service prices.

Previously the department proposed that the Ministry of Construction set prices apartment services instead of issuing ceiling prices or a price frame.

According to the ministry, prices of all services at apartments, including parking fees, should not be allowed to surpass the prices defined by municipal and provincial governments.

Municipal and provincial governments are responsible for defining ceiling prices or price frame for services for different types of apartments.

The ministry pledged to take into account proposals by Hanoi authorities on difficulties in managing apartment service prices based on ceiling prices.

It will gather more information on the issue in some other localities before making a proposal to the Government to amend Decree No. 71, detailing the implementation of the Law on Housing.

While waiting for the amendment, the municipal government should require related individuals and organisations to publicly and transparently define apartment service prices, the ministry added.

Vietnam must tighten control on imported fruits, vegetables

Vietnam must do more to protect consumers from toxic fruits and vegetables imported through land border gates, after many recent discoveries of fruits from China being dangerous for human health, said a representative from the Institute of Policy and Strategy for Agriculture and Rural Development.

Duong Ngoc Thi, vice director of the Institute for Policy and Strategy for Agriculture and Rural Development, called for more specific regulations to be issued to tightly control the quality of imported produce, at a meeting in Hanoi yesterday, October 12.

The seminar titled “How to control quality of imported fruits and foods” was jointly held by the Institute of Policy and Strategy for Agriculture and Rural Development under the Ministry and the Vietnam Standards and Consumers Association.

The vice director raised the issue that while big border gates were often deserted, small border gates were commonly busy. He suggested that evading import tax payments was the reason. He said, “This is an issue and the ministry is compiling a new circular to be published in the second quarter of 2013, to clearly regulate which border gates are to be permitted to import fruit and vegetables.”

He said that while Vietnamese fruits and vegetables were strictly checked before export, there was no safeguard for the same type of goods coming into the country.

Nguyen Van Hoi, deputy head of the Ministry of Industry and Trade’s Mountainous Trade Department, confirmed that fruits and vegetables were allowed to be imported through all of the country’s land border gates.

“We currently have no specific regulations to control food safety and hygiene for fruits and vegetables imported from China, Cambodia, and Laos”, he said.

“Produce is often divided into small consignments in order to be continuously imported from China into Vietnam through unofficial channels everyday,” he added.

He also said another major problem was that when goods come through the border gates it was hard for customs staff to test the quality of all.

“Samples also take up to seven days to be sent to Hanoi for testing, and customs staff cannot hold trucks carrying the goods for a long time due to resultant jams at border gates,” he said.

Meanwhile, the Ministry of Agriculture and Rural Development’s Plant Protection Department blamed “a great shortage of both facilities and human resources to check food safety and hygiene of imported farm produce.”

The report revealed that detection equipment can only identify around 300 unsafe chemicals while there are believed to be more than 1,000. Complicating matters even further, the scanner can only identify a maximum of 50 chemicals at any one time. One batch of fruits and vegetables requires up to six scans to fully check for the 300 toxic chemicals.”

Recently public anger and fear over the issue has started to grow. A recent Vietnam Standards and Consumers Association survey of 1,200 people in six provinces shows that 95 percent say they are very concerned about food safety and hygiene. They ranked fruits and vegetables as the most dangerous type of imported food.

The trade in fruits and vegetables is lucrative, with the import turnover from China via land border gates estimated to have reached around US$200 million in 2011. This figure is forecast to be the same again this year.

South Korea ready to re-recruit Vietnamese labor

The Center for Labor abroad, under the Ministry of Labor, Invalids and Social Affairs, and South Korea’s Human Resource Development Authority in Vietnam, organized a job fair in Hanoi on October 12 for Vietnamese workers who have previously worked in South Korea.

62 Korean companies investing in Vietnam also participated in the event.

Hundreds of Vietnamese workers were present at the fair in the hope of finding work opportunity in South Korea. This is the first time the Ministry of Labor, Invalids and Social Affairs has collaborated with Korea’s labor agency to hold a job fair.

According to the Ministry of Labor, Invalids and Social Affairs, the event is very important for creating job opportunities for workers in the context of South Korea announcing suspension of new recruits and Vietnam’s labor export to several other countries also running into difficulties.

The Center for Labor abroad, informed that in preliminary selections 470 labor had been picked up of which 200 had attended a free training course on skills and Korean language, organized by the Korean agency.

270 other workers were recruited through the Center for Labor abroad.

Mr. Choi Byung Gie, Director General of the Center for EPS (Employment Licensing Program for foreign labor working in Korea) told reporters that the job fair will be an opportunity to create conditions for Vietnamese workers who had been working in South Korea and had returned home to find a stable job.

Meanwhile, the Managing Board for Vietnamese workers in South Korea said although South Korea has stopped receiving Vietnamese workers after a huge number overstayed their visa and worked illegally in the country, 40 workers were received again by South Korean employers thanks to their good behavior.

They are among more than 300 workers who have worked in South Korea earlier and returned to their homeland after their employment contract expired.

According to South Korea’s revised Employment Law which took effect in July, all foreign workers will have the chance to work in the country again three months after returning home and meeting employment conditions. They won’t have to test in Korean language and vocational skills.

The South Korean Ministry of Labor and Employment said 2,746 foreign workers returned home from July to September 18 after their work permit expired. Now each month, it will re-employ 400-500 former foreign workers.

A ministry official said that the Korean Government wants to help small-and medium-sized enterprises re-employ skilled workers, and this is being seen as a good solution to reduce the number of illegal foreign workers in the country.

The workers flew to South Korea on Wednesday night, said Luong Duc Long, deputy director of the Overseas Workers Center (OWC) under the Ministry of Labor, Invalids and Social Affairs.

These workers are considered ‘loyal’ workers by the employers, since they worked for the same people for a period of four years and ten months and returned to Vietnam on schedule after their contract expired.

As previously reported, South Korea had recently stopped the bilateral agreement on “sending Vietnamese workers to South Korea under the Employment Permit System (EPS) program,” since the percentage of Vietnamese workers in the country who are illegal is currently 57 percent.

South Korea also attached to the document a list of illegal Vietnamese workers. Accordingly, 22,708 Vietnamese laborers are working illegally in the country, of which 11,347 arrived under the EPS program.

South Korea has previously given warnings about a potential halt to the agreement after statistics showed that by December 2011, 48 percent of Vietnamese workers in South Korea stayed on in the country after their contracts expired, the highest proportion among the 15 countries that sent workers to South Korea.

Finance Ministry extends deadline for VAT, income tax

The Ministry of Finance said on Thursday that the deadline for payment of value added tax (VAT) for months of April, May and June for more than 190,000 businesses has been extended.

More than 190,000 businesses have still to clear about VND11 trillion (US$527 million) of value added tax for which the payment deadline date has been extended.

The ministry has also extended deadline for payment of income tax expected from almost 71,630 businesses to the tune of VND2,933 billion.

Besides, a reduction of 50 percent on land rent, about VND250 billion, is now applicable for 2,425 businesses.

Excise tax will also be exempt this year, or refunded, for 33,510 fishermen and salt workers, calculated at VND10 billion.

In September, the State budget grew by VND498,490 billion, about 67 percent of the expected amount and up only 1.3 percent compared to the same period in 2011.

Boosting exports to US market

Vietnam-US trade turnover reached US$18 billion in the first three quarters of 2012, representing a year-on-year increase of 13.22 percent, according to the Ministry of Industry and Trade (MoIT).

The MoIT says Vietnam’s exports to the US earned US$14.32 billion in the past nine months, up 14.83 percent over the same period last year.

With its export surplus estimated at US$10.75 billion from the US market, Vietnam’s total export turnover is likely to rise to US$20 billion by the end of this year.

Key export items include garment and textiles, footwear, seafood, and timber products.

The Vietnam Association of Seafood Exporters and Producers (VASEP) says tra fish export to the US made up 22 percent of its total earnings in the first eight months of this year.

The says that the association’s early target for US$20 billion in export revenue is within reach, given the promising signs of national economy recovery. In the remaining months of this year, the consumer purchasing power will increase thanks to major festivals.

The MoIT also warns that the US Food and Drug Administration (FDA) has been putting into effect a number of regulations of the Food Safety Modernization Act (FSMA) relating to Vietnam’s food exports.

As of October 1, 2012, all food producers from Vietnamese and other countries have to register for new trading code (two-year validity) from the FDA. As of January 1, 2013, the FDA will inspect all food items imported into the US to see if there are any products coming from unregistered foreign businesses.

Therefore, local businesses should get updated on the US market, regulations and strictly follow them.

US$170 mln trade surplus for Vietnam in September

Vietnam maintained a trade surplus of more than US$170 million in September, triple the August figure, according to the General Department of Customs.

The country fetched US$9.48 billion from exports, down 8 percent, and consumed US$9.31 billion worth of imports, down 9.2 percent against August.

This was the fourth consecutive month Vietnam has enjoyed the trade surplus, and the seventh month since the beginning of 2012.

In the past nine months, major staples  that attained high export growth included phone handsets and components (US$8.63 billion, up 122 percent), coffee (US$2.85 billion, up 29 percent), crude oil (US$6.3 billion, up 14 percent), footwear (US$5.2 billion, up 12 percent), and garments (US$11.1 billion, up 7 percent).

Rice exports generated US$2.8 billion in revenue in nine months, up 5 percent in volume, but down 5 percent in value compared to the same period last year.

Wood and timber products exports hit nearly US$3.4 billion

Wood and timber products exports reached US$3,394 million in the first nine months of this year.

According to the General Statistics Office of Vietnam (GSO), the average monthly export value was US$377 million, even up to US$400 million in the last two months.

It is expected that the total export volume will reach more than US$4.5 billion this year.

This is thanks to recent shift from raw materials, like rough, plank and sawn timber, to processed products which are favoured by many customers in the world.

In the first eight months of this year, the US topped 20 countries and territories with its volume of wood and timber products imported from Vietnam worth US$1.147 billion, following by China (US$496 million), Japan (US$426 million), the Republic of Korea (US$140 million) and the UK (US$122 million).

Vietnam now has nearly 6,500 processing timber and forestry businesses with a total of more than 400,000 workers.

Helping seafood exporters fulfill their targets

Vietnam’s seafood export turnover reached nearly US$4.5 billion in the first nine months of this year, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

However, VASEP General Secretary Truong Dinh Hoe, says that the amount is just equal to half of last year’s figure and, so it seems, the sector’s set export target of US$6.5 billion this year, is hard to come by.

Hoe says the main cause for concern is the impact of the global economic crisis on every market around the world.

In the past, foreign partners used to buy Vietnamese seafood on credit from the exporters but now this is impossible because Vietnamese businesses are suffering a shortage of capital. Tough competition with neighbouring countries like India and Thailand in terms of price gauging has slowed the progress of seafood consumption.

Another reason is Japan’s decision to inspect all shrimp and aquatic imports from Vietnam for Ethoxyquin residue. The Japanese market currently consumes 40 percent of Vietnam’s total shrimp exports. However, Japanese standards for ethoxyquin residue in shrimp is much lower than the permitted level elsewhere in the world.

The VASEP representative argues that restructuring capital sources has caused difficulties for seafood businesses who are unable to prove they are eligible for loans to boost production and export earnings.

Many businesses are blamed for ineffective investment and production scale expansion.

Another subjective reason, he cites, is a sharp increase in the price of feed for aquaculture in 2012, especially in recent months.

In addition, Hoe says the transport cost for each container has risen to US$700 since early this month.

In fact, ministries and agencies have tried to support seafood export businesses in coping with these difficulties. For example, businesses are now exempt from environmental protection taxes for plastic packaging.

The VASEP has recommended improving quarantine work, customs clearance and other import-export regulations. The Prime Minister and State Bank have issued decisions to help both farmers and seafood exporters gain access to loans for raising tra fish.

The Ministry of Industry and Trade (MoIT) and the Ministry of Agriculture and Rural Development (MARD) have asked Japan to adjust its standards for ethoxyquin residue to match the international standard.

The VASEP and MARD have insisted on shrimp breeders and export businesses to lower the level of Ethoxyquin residue at any cost.

The VASEP has recommended that the MoIT direct marketing management to improve inspections and encourage factories to produce products with low concentrations of Ethoxyquin in order to maintain Vietnamese shrimp exports to the Japanese market.

In Hoe’s opinion, 65 seafood processing enterprises involved in export business are able to supply 600,000 tonnes of tra fish to the world market each year.

The VASEP has proposed to the MoIT for a tax refund from January 1, 2012 to those export using plastic packaging and also a reduction in transport costs to help them out of difficulties.

Exports to India surge

Vietnam’s exports to India increased from US$95.9 million in 2005 to US$1.057 billion in the first eight months of this year.

According to the Africa-West Asia-South Asia Market Department under the Ministry of Industry and Trade, Vietnam and India have long established their traditional friendship and close cooperation in all fields.

The two countries have signed many agreements on trade, double tax avoidable, investment encouragement and protection, consul, and cultural cooperation, aviation and tourism. They have also signed other agreements on political consultancy, and cooperation in geology, environment and traditional medicine.

Currently, India is one of Vietnam’s ten largest trade partners. Two-way trade turnover increased from US$72 million in 1995 to US$1.53 billion in 2007 when the two countries established strategic partnership and to US$3.9 billion in 2011.

Vietnam’s main export items in 2011 included mobile phones, machinery, equipment, steel, natural rubber, coal, coffee, pepper, means of transport, tools, computers, electronics and components, chemicals, plastics, ore and minerals, cashew nuts, wood and timber products, garments, cotton and cinnamon.

Hanoi to host Vietnam International Industrial Fair

An international industrial fair will be held in the capital city this week to promote industrial investment and trade both inside and outside the country.

The Vietnam International Industrial Fair (VIIF) 2012 is a prestigious event to promote industry in the country that has contributed to its Doi Moi (Renewal) process and the development of its national economy over the past 20 years, particularly the industrial sector.

The fair’s 4,500 square meter display area will feature equipment and the latest technology for light industry, mechanics, processing, pharmaceuticals, garments and textiles.

The exhibition, which will be held at the Vietnam Exhibition Centre in Hanoi from October 17-21, will introduce the products of more than 200 businesses from ASEAN countries, including Vietnam, as well as China, Taiwan, the Czech Republic, the Republic of Korea, and Russia.

Local telecom groups join sub-marine optical project

The Prime Minister has approved some local telecommunications groups investing in an Asia-Pacific Gateway project.

The military-run Viettel has been assigned to coordinate with the FPT and CMC Corporations and work closely with relevant agencies to resolve all the issues related to their investment.

The 8,000km long, 4Tbps-bandwidth sub-marine optical project between the Republic of Korea and Malaysia will help directly link China, Japan, Taiwan, the Philippines, Hong Kong, Vietnam, Thailand and Singapore and increase their connection speeds.

Increased regulation of staple goods prices discussed    

The Ministry of Finance is working on mechanisms to regulate the prices of staple goods including petrol, electricity and coal.

According to the ministry, the scenarios are expected to help regulate the market in the last months of this year and beyond.

She did however reveal that a mechanism to regulate petrol prices would be drafted in accordance with regulations laid out in Decree No. 84 on petroleum trading.

“Taxes and the use of the petrol price stabilisation fund will be employed. The ministry will select particular tools to regulate the market at certain period of time in order to ensure the interests of the government, businesses and the people,” she noted.

Concerning the plan to amend Decree 84, Nguyen Anh Tuan, Deputy Director of the ministry’s Price Management Department, said that the ministries of finance, and industry and trade were co-ordinating before drafting any amendments. However, they have yet to reach an agreement on any content of amendment.

Regarding petrol prices in September, Tuan explained that even though global petrol prices had fallen during the month, imported petrol prices over the past month are still higher than current retail prices, which explained the lack of movement on prices.

On September 11, the two ministries issued a joint dispatch to request all petrol wholesalers to maintain retail prices. The ministries had decided to lower petrol import taxes by 2%. They would also continue to subsidise petrol prices by VND500 per litre from the petrol price stabilisation fund to offset the price disparity.

International leisure center to be built at Phong Nha-Ke Bang   

The People’s Committee of Quang Binh Province has just signed a memorandum of understanding (MoU) with ZETA Group Holding, a real estate investment organization from the Republic of Korea, to build an international leisure center at the Phong Nha-Ke Bang National Park.

Accordingly, the project, worth $4 billion, will include a casino area, hotels and urban facilities on the mountains, providing outdoor entertainment activities and cave exploring tours in Phong Nha-Ke Bang.

The Phong Nha-Ke Bang National Park was listed in UNESCO World Heritage Sites in 2003, thanks to its system of 300 caves and grottos with a total length of 126 km discovered up to April 2009.

Before the discovery of the Son Doong, recognized as the world’s largest cave, Phong Nha held several world cave records, as it has the longest underground river, as well as the largest caverns and passageways.

Enterprises optimistic despite global turmoil

Businesses are optimistic that they wouldn’t have to scale back their operations this year despite tough market conditions, according to a recent survey by the Viet Nam Chamber of Commerce and Industry (VCCI).

The survey on business during the third quarter, conducted through the chamber’s website www.vbis.vn, found that nearly 97 per cent of local enterprises would maintain their current business scales by the end of this year.

About 18 per cent of businesses surveyed said they would possibly expand businesses while over 11 per cent intended to narrow the scale of their operations. About 0.7 per cent might suspend business activities and 0.2 per cent said they may close down or dissolve.

Surveyed companies said their production and business situation was much tougher in the third quarter than that in the second, but they anticipated conditions would ease during the remainder of the year.

VCCI General Secretary Pham Thi Thu Hang said production and business indices, especially turnover, profit and inventory levels, tended to worsen at many firms, and these factors would continue to worry enterprises.

Sharp falls in profit were the main cause for the overall dim situation during the third quarter, she said, adding that economic difficulties had resulted in falling production capacity as well as employee cut-backs at businesses.

Enterprises said they assessed that the country’s macro-economy was getting worse, although transparency, consistency and equity were improved for administrative procedures.

While nearly 83 per cent of those polled saying they were borrowing capital with interest rates of 15 per cent and below, only 0.6 per cent said the 15 per cent rate was reasonable and about 56 per cent said they wouldn’t be able to meet this level in the long run.

Around 20 per cent said they couldn’t access bank loans due to high interest rates, strict lending conditions or complicated borrowing procedures; and many firms were seeking other capital sources.

Thirty-one per cent said interest rates should be between 10-11 per cent, and nearly 32 per cent said the rates should be 8-9 per cent.

Over 65 per cent said loosening lending policies positively affected their activities, while about 25 per cent said these policies hardly had any impacts on them, since many firms now didn’t need to borrow money due to falling purchasing power on the market.

About 63 per cent said high inventories were serious concerns for them, with 35 per cent having seen inventories increase in the third quarter over levels during the second quarter.

To deal with this problem, 53 per cent were seeking new export markets, 24 per cent were cutting selling prices and 4 per cent were attempting to sell more goods in rural areas.

Meanwhile, 29 per cent said the Government should organise more trade promotion programmes, and 26 per cent said input costs for enterprises such as electricity prices should be cut to help firms reduce inventories.

Companies invest ahead of Tet

Businesses in HCM City have spent VND6.68 trillion (US$320 million) on goods to prepare for the three months before and after the Tet holiday (Lunar New Year), an increase of nearly VND1.3 trillion ($61.9 million) compared with expenditures for the previous holiday period.

This figure includes VND3.43 trillion ($164 million) of essential goods under the price-stabilisation programme, up by VND605.7 billion compared to the amount spent during the previous holiday period, according to the city’s Department of Industry and Trade.

The department released the figures at a meeting last week to review preparations for the upcoming Tet holiday, which will fall in early February next year.

The department forecasts an abundant supply of goods during Tet, with stable prices on most goods. Price fluctuations will continue on fruit and vegetables, which have been affected by inclement weather.

Le Ngoc Dao, deputy director of the Industry and Trade Department, said Sai Gon Co-op had goods valued at VND3.35 trillion ($159.5 million) in reserve, with essential goods under the price-stabilisation programme representing VND912.3 billion ($43.4 million).

Vissan has goods in reserve worth VND1 trillion; Pham Ton Co, VND814.5 billion; Sai Gon Food JSC, VND231 billion; and Ba Huan Co, VND165.2 billion.

Dao said despite the difficulties caused by the global economic crisis, these businesses had pledged to supply goods at stable prices and prevent price hikes during Tet.

The volume of goods to be supplied by these businesses, especially essential goods such as cooking oil, sugar, poultry meat, eggs and processing food, are expected to meet over 50 per cent of customer demand.

In addition, the department has met with representatives of beverage, confectionary, cooking-oil manufacturers and poultry husbandry farms from neighbouring provinces to predict future supply.

Speaking at a meeting last week, Nguyen Phuoc Trung, deputy director of the city’s Department of Agriculture and Rural Development, said the recent imports of poor-quality poultry meat had negatively affected the city’s poultry-husbandry industry.

Low-quality, cheap imports compete with the ample supply from the local husbandry industry.

Because of lower consumer purchasing power, local poultry producers have had to cut prices, making it difficult for the local husbandry industry to have a sufficient supply of poultry during the Tet holiday.

Trung said businesses should sign contracts to buy goods directly from producers, instead of purchasing them through intermediaries.

Nguyen Thi Hong, deputy chairwoman of the city’s People’s Committee, said a distribution network had been set up in the city, including supermarkets, shops, traditional markets, mobile shops, and fairs in rural areas.

The quality of the distribution network’s service must be improved to better connect customers with suppliers, Hong said.

She said the prices of goods would increase greatly if there were too many intermediaries in the distribution network.

(VietnamNet)

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