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Asia-Pacific exBUSINESS IN BRIEF 25-2ports expected to increase

Viet Nam’s exports to the Asia-Pacific region are forecast to see strong growth this year following a solid export performance last year despite economic difficulties.

Last year exports to the Asia-Pacific region saw an increase of 21.3 per cent and an estimated turnover of US$57.3 billion, accounting for 50 per cent of the country’s total exports, according to the Ministry of Industry and Trade.

The number of markets in the region where Viet Nam enjoyed a trade surplus increased from five in 2010 to nine in 2012, including Hong Kong, Cambodia, Japan, the Philippines, Australia, Malaysia and Indonesia.

Deputy Director of MoIT’s Asia-Pacific Department Dao Ngoc Chuong told the Vietnam News Agency that a large volume of new and high-tech products penetrated the region’s markets last year, especially electronic components, with growth of up to 60 per cent.

“The Asia-Pacific’s markets remained as a potential export market for Viet Nam thanks to a series of bilateral and multi-lateral free trade agreements. some signed already and other under negotiation,” he said, adding that Viet Nam’s products also had a competitive advantage in these markets.

He also urged Vietnamese enterprises to diversify products and increase their quality to meet the demands of importing countries as a measure to further boost exports to the region’s markets while enhancing trademark protection and promotion activities.

Inflation holds steady despite Tet demand

The consumer price index (CPI) in February rose by only 1.32 per cent against the previous month, lower than expected thanks to abundant supplies of essential commodities, the General Statistics Office (GSO) reported.

Compared with the same period last year, CPI was up 7.02 per cent, the office said.

Director of the GSO’s Price Department Nguyen Duc Thang said that a sufficient supply of essential commodities, especially in big cities, during the week-long Lunar New Year holiday in February halted the increasing price trend that usually occurred during the holidays.

Monthly CPI often increases by more than 2 per cent at Tet.

In addition, price stabilisation programmes also helped to cool prices.

The slow place of CPI was also attributed to many businesses cutting Tet bonuses by 10 per cent compared to 2012. The national economy’s sluggish recovery also had an impact on spending during Tet.

Ten out of the 11 groups of commodities saw price hikes ranging from 0.03 per cent to 2.28 per cent. The highest rise was seen in the restaurants and catering services group, while education experienced the lowest increase.

Food prices this month witnessed a modest increase of 0.37 per cent, mainly because of a 0.85 per cent fall in the price of rice in the Mekong Delta.

Two groups of commodities that also saw price increases were beverage and transportation due to high demand during the Lunar New Year.

During February, gold prices dropped by 0.33 per cent while the US dollar price saw a slight increase of 0.03 per cent.

The CPI in March and the following months are expected to rise following an increase in oil and gas prices.

If retail petrol prices were adjusted upwards by VND1,000 per litre in late February or early March as proposed by petrol businesses, March’s CPI would rise an additional 0.1 per cent, the office estimated.

Though there has been no official information about a price hike, many petrol stations have used a variety of excuses to stop services in the hopes of making higher profits in the near future.

One of the most popular excuses used in HaNoi’s suburbs and neighbouring provinces was “power failure” and “out of fuel”. Many of those still in operation only have one employee on duty in order to limit the amount of fuel sold.

Nguyen Thanh Phuc, deputy head of da Nang’s Market Watch Department, said they would tighten control over the activities of petrol stations and carry out inspections to see whether their excuses to not sell petrol were legitimate or not.

One petrol station in HCM City complained that wholesalers were not providing a steady supply of fuel.

Previously, petroleum companies, including Viet Nam National Petroleum Group (Petrolimex), Dong Thap Petroleum Trading Company (Petimex), Sai Gon Petro Company and PetroVietnam Oil Corporation (PVOIL) asked the Ministry of Finance for a price adjustment.

Even though their request did not ask specifically for an increase or decrease in price, Tran Ngoc Nam, deputy head of Petrolimex, said they were incurring losses.

Nguyen Tien Thoa, head of the Price Management Department at the Ministry of Finance, said enterprises were under pressure because global demand had surged, leading to a 2-3 per cent increase in the world price. The supply has also decreased recently because many plants have temporarily closed for maintenance.

A number of international organisations have also forecast that fuel prices will continue to increase.

Surge of power plants to plug into Viet Nam market

An additional 16 power plants will join Viet Nam’s competitive energy generation market this year, bringing the total number of such plants to 48.

The country launched the market last July in a move to shift the State’s monopoly of power supply to a more competitive market system.

As such, power plants with capacities reaching 30MW or above (except wind or thermal powered ones) are eligible to join the market by selling their product to the Electric Power Trading Company (EPTC) under the management of State power firm Viet Nam Electricity (EVN).

EPTC – the single buyer in the country’s power market – in turn sells off electricity to distribution or retail companies from whom customers can buy electricity for daily use.

Speaking at a meeting on Thursday, Deputy Prime Minister Hoang Trung Hai asked relevant agencies to finalise procedures allowing the participation of the new sellers, thus helping to raise the power market’s competitiveness.

He said that the initiative is creating transparency by mobilising power sources and ensuring that selling prices are based on supply and demand rather than the subsidised mechanisms that were adopted in the past.

“This helps improve the competitiveness in power generation, a positive signal to attract more investors to the power sector,” he said.

Under the seven-month old system, power plants which offer lower prices will be given priority to sell their electricity. A network among plants and the EPTC has been set up to update market information and estimate demand and potential supply.

At present, among 73 generators on the market, 32 generators directly sell power to the single distributors. Meanwhile, indirect traders include multi-purpose hydro-power plants, Fast Start Reserve, Cold Start Reserve and Reliability Must Runs.

The head of Electricity of Viet Nam’s Market Management Department Tran Dang Khoa said that the new market participants needed to improve system security, flood control at hydro-power plants and the water supply for lowland rivers.

The vice general director of Da Nhim-Ham Thuan-Da Mi Hydro Power Corporation, Do Minh Loc, said that the corporation had four hydro-power plants in the Central Highlands which generated nearly 3 billion kWh last year, a much higher output than planned.

He said that good preparation before joining the market had allowed the company to flourish and record healthy profits and emphasised that it is vital for power plants to improve their information technology facilities, human resources and market studies to determine the best selling prices to offer the single buyer.

Viet Nam’s electricity market is planned to develop in three stages – a competitive power generation market (completed by 2014), a competitive wholesale market (2014-20) and a competitive retail market (after 2022).

Filling stations hoard fuel in anticipation of price hike

Though there has been no official information about a price hike, many petrol stations have used a variety of excuses to stop services in hopes of making higher profits in the near future.

One of the most popular excuses used in the Hanoi suburbs and neighbouring provinces was “power failure” and “out of fuel”. Many of those still in operation only have one employee on duty in order to limit the amount of sold fuel.

Nguyen Thanh Phuc, Deputy Head of Danang City’s Market Control Department, said they would tighten control over the activities of petrol stations, carrying out inspections to see whether their excuses to not sell petrol are legitimate or not.

One petrol station in HCM City complained that wholesalers were not providing a steady supply of fuel.

Previously, petroleum companies, including Vietnam National Petroleum Group (Petrolimex), Dong Thap Petroleum Trading Company (Petimex), Saigon Petro Company and PetroVietnam Oil Corporation (PVOIL) asked the Ministry of Finance for a price adjustment.

Even though their request did not ask specifically for an increase or decrease in price, Tran Ngoc Nam, Deputy Head of Petrolimex said they were incurring losses.

“We want to know whether to increase retail prices or continue using the price stabilisation fund to support enterprises in this difficult times,” Nam said.

Nguyen Tien Thoa, head of the Price Management Department at the Ministry of Finance, said enterprises were under pressure because world demand has surged, leading to a 2% to 3% increase in the world price. The supply has also decreased recently because many plants have temporarily closed for maintenance.

A number of international organisations have also forecast that fuel prices will continue to increase.

“We should reduce the import tax to 2% while using price stabilisation fund to support enterprises, while slightly increasing the fuel price by VND300-400,” Thoa said.

Bauxite projects pose environmental and economic problems

Nguyen Thanh Son, Director of the Song Hong Power Company under Vietnam National Coal and Mineral Industries Group (Vinacomin), said that the bauxite projects in Central Highlands region have a harmful effect on the environment and have become an economic burden.

Son has urged the management of Vinacomin to seek the Prime Minister’s approval to halt the Nhan Co pilot project after his survey of the mine at Tan Rai.

According to Son, these projects pose a range of risks to their surrounding areas because they use outdated technology and equipment. The processing technology for red mud is old and the coal gasification technology is from the 1960s.

He added that there were also economic problems. Tan Rai was completed nearly two years behind schedule, adding VND1.1 trillion (USD53 milion) to the total cost. A profit of VND2.2 trillion will have to be earned in order to realise any return on investment.

In the meantime Son said that Vinacomin would incur losses of at least USD33 million per year. On the other hand, 99.36% of Vinacomin’s profit comes from coal industry. This money has been used to invest in non-core industries. However their activities in the coal industry could also be put at risk by the bauxite projects.

“The situation saddens me because this is the situation that scientists have warned us about for years. I hoped for the success of the projects, but when the pilot project proved to be slow, unsafe and costly, I doubt the investors capacity to see it through in the long-term,” Son commented.

He urged Vinacomin to wait on further results from Tan Rai project before beginning construction the another bauxite mine, Nhan Co. He also hoped that the coal industry in Quang Ninh Province would attract more investment.

Son said, “Vinacomin can save millions of dollars by putting off plans to build another bauxite mine. The economic development of the Central Highlands is not dependent on alumina projects, but lacks coal production.”

Japanese corporation to build 100 hotels in Vietnam

Japanese hotel chain, Toyoko Inn, introduced its ambitious plan to build 100 starred hotels in Vietnam at a seminar in Hanoi on February 22.

Nishida Norimasa, President and also founder of Toyoko Inn, said he believes that the project would be successful as for the long term Vietnam’s economy will be surely better than at present.

Present at the event, Vice President of the Vietnam Chamber of Commerce and Industry Doan Duy Khuong highly valued the corporation’s project, describing it a meaningful economic event in the context when the relations in trade, tourism and culture between Vietnam and Japan are growing positively.

Khuong expressed his hopes that the project, once completed, will contribute to boosting the two countries’ tourism and investment cooperation, promoting Vietnam ’s images to international friends and fostering tourism, investment and business activities in Vietnam .

Japan now ranks third among 84 countries and territories investing in Vietnam in terms of registered capital and first in terms of the amount of disbursed capital.

Central province eyes industrial expansion

The central province of Thua Thien – Hue aims to attract investments of VND2.9 trillion (US$138 million) to its industrial zones (IZs) this year.

Nguyen Huu Tran, head of the provincial IZ management board, said 2013 will also be a year to develop infrastructure and make the IZs more attractive to investors.

Tran said that the board would co-operate with provincial districts and communes to accelerate land clearance so investors can get encumbrance-free land for their operations.

The board would also support investors in plant construction and mobilise capital to upgrade infrastructure around local industrial zones, he said.

Tran affirmed that local administrative procedures would be further streamlined this year, creating advantageous conditions for investors in the province.

The province would also invest in human resources training to meet the demand of investors in industrial zones, he said.

Seven infrastructure development projects covering a total area of more than 717ha are being carried out now at local industrial zones.

Infrastructure construction at the Phu Bai and Phong Dien IZs is almost complete.

Meanwhile, investors are completing procedures for upgrading infrastructure of IZs in La Son, Phua Da, Tu Ha and Quang Vinh.

As of the end of last year, the province had attracted 78 projects to local IZs with a total capital of nearly VND16 trillion. About 40 projects have been put into operation.

Last year, the province granted investment certificates to nine projects and permitted four others to increase their capital.

The industrial value of IZs last year topped VND3.2 trillion ($152 million). The export turnover from the IZs was nearly $295 million, accounting for 64 per cent of the province’s exports.

In 2012, IZs in the province employed about 14,000 people.

Two-way trade turnover between Viet Nam and Brazil in 2012 reached nearly US$1.64 billion, an increase of 13.8 per cent from 2011, according to Brazil’s Ministry of Development, Industry and Foreign Trade.

In 2012, Viet Nam earned $817.2 million from exports to Brazil, up 26.3 per cent from 2011, and imported 822.6 million worth of commodities from the country, a year-on-year increase of 3.6 per cent.

Viet Nam exported footwear, fish fillets, printers, chip sets and rubber to Latin America ’s largest economy while importing soybean products, cotton, tobacco, corn and timber.

The trade recorded the positive development despite 5.26 per cent and 1.37 per cent decreases in Brazil’s 2012 total export and import values ($242.58 billion and $223.15 billion), respectively, due to the global economic downturn.

It has seen constant growth since 2000, in particular the first-ever turnover of more than $1 billion in 2011, the Brazilian ministry’s statistics showed.

Vinamilk readies for expansion

The Viet Nam Dairy Products Joint Stock Company (Vinamilk) will start construction work on two of the biggest dairy plants in the country in the second quarter of this year.

The company’s public relations director Bui Thi Huong told Viet Nam News that the work, estimated to cost nearly VND4 trillion (US$200 million), is part of the company’s ambitious expansion project.

The first plant will be in the southern province of Binh Duong with a capacity of 400 million litres of fresh milk a year in its first phase – equivalent to the current accumulated capacity of Vinamilk’s nine plants nationwide.

The second plant, which will be constructed at Viet Nam-Singapore Industrial Park, will focus on producing high-quality powdered milk (Dielac) with annual capacity of 54,000 tonnes each year. “The mega project will bring us a turnover of $3billion per year and rank the company in the list of World’s Top 50 dairy businesses by 2017,” Huong said.

Bank to finance nuclear plant

Russia’s second-largest bank is ready to grant a $1 billion loan to the Rosatom state nuclear corporation to build Viet Nam’s first nuclear power plant.

The news was released by VTB Management Board Member Valery Lukyanenko said Thursday, according to The Voice of Russia.

The cost of building Viet Nam’s Nuclear Power Plant No 1 in Thuan Nam District in central coastal province of Ninh Thuan is estimated at $10 billion.

Russian Prime Minister Dmitry Medvedev said that Russia would provide a state loan for constructing the power plant, which will have two energy units with a capacity of 1.2 GW each, according to Russian’s RIA Novosti.

The Atomstroyexport engineering company will be responsible for fulfilling the contract.

Work to prepare the site started in December 2011 and construction is expected to kick off in 2014. If all goes according to plan, the plant will have a trial run in 2020.

Viet Nam also plans to build Nuclear Power Plant No 2 in Ninh Hai District, the same province, under a joint project with Japan.

Ground broken on $20 million parking garage in HCM City

Mechanical and construction firm Tien Tien Co Ltd broke ground on a new multi-storey parking garage in HCM City.

Spanning 37,000 square meters at 71 Che Lan Vien, Tan Phu District, the five-storey building is capable of holding 3,000 vehicles. The total investment is US$20 million, the investor said.

Buses and large trucks will park on the ground floor, while the upper floors will be reserved for vehicles with fewer than 16 seats. The garage will be automatically operated using Japanese technology.

The facility will also include a car washing service and a filling station.

Vietnamese restaurant prepares to wow Parisian punters

Foyer Viet Nam, a restaurant featuring Vietnamese traditional cuisine, made its debut in Paris’ District 5 on Wednesday.

Dinh Toan Thang, Minister of the Vietnamese Embassy in France, attended the opening ceremony along with representatives from local authorities.

Addressing the event, Foyer Viet Nam President Nguyen Binh said he hoped to create a space for Vietnamese organisations to meet and share information. The restaurant’s website currently provides information on accommodation and job opportunities for Vietnamese students in France.

Each meal served will contribute 20 French centimes (0.20 EUR) to a fund for charitable and cultural activities and scholarships for disadvantaged students in Viet Nam.

Sweet potato price highly hikes

The sweet potato price has kept increasing since the Tet Lunar New Year, said Huynh Van Quan, deputy chairman of the Tan Thanh Sweet Potato Cooperative in Binh Tan District in the Mekong Delta province of Vinh Long on February 22.

At present, a quintal of the Japanese sweet potato variety fetches VND1.2-1.3 million, which is the highest rate over the last several years.

The price increase is due to high demand of sweet potato from China’s market while it is not the main production crop in the Mekong Delta.

Price of white sweet potato variety has also raised to 370,000 a quintal, ensuring farmers profitable.

Source: VIR, VNS, SGGP, dtinews

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