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BUSINESS IN BRIEF 29-1Positive signals for farm produce exports

The Ministry of Agriculture and Rural Development is expecting January’s agro-forestry and fishery exports to rise 39.7 percent compared to the same period last year, hitting US$2.17 billion.

The ministry estimates key agricultural exports will be valued at US$1.17 billion, up 46.6 percent; seafood at US$376 million, up 3.5 percent; and key forestry products at US$447 million, up 46 percent.

Vietnam shipped 534,000 tonnes of rice abroad for US$259 million in January, increasing 108 percent in volume and 76.4 percent in value. But, rice prices fell 10.8 percent on average to US$458/tonne.

Last year, China was Vietnam’s largest rice consumer, importing 6.7 times its 2011 volume. Other markets including Indonesia, Singapore and Senegal all fell considerably.

Coffee export earnings rose 70.7 percent in January to US$387 million. Last year’s average coffee price hovered around US$2,120/tonne, down 3.5 percent on 2011.

The US and Germany overtook Belgium to become Vietnam’s largest coffee consumers, making up 12.5 percent and 11.6 percent of the country’s coffee exports, respectively.

Tea production maintained steady growth, with January export earnings rising 16.4 percent to US$16 million. Pakistan was Vietnam’s largest tea export market in 2012, purchasing 20 percent of total export volume. Growth was seen in most big markets, excluding Russia, Saudi Arabia, and Germany.

In January, Vietnam exported 14,000 tonnes of cashew nuts for US$88 million, up 47 percent in volume and 17.9 percent in value, and retaining its position as the world’s leading cashew nut exporter. The US was Vietnam’s largest cashew nut consumer, importing 27.6 percent of the total.

Wood products saw export earnings rise 47.3 percent to US$425 million. Seafood exports endured relatively low growth of 3.5 percent. The US was the largest importer of Vietnamese seafood in 2012, followed by Japan and the Republic of Korea.

In contrast to the gloomy forecasts for the global economy, experts predicted that 2013 would deliver success to the agro-forestry-fishery export sector.

Citi Vietnam wins two The Asset awards

Citi Vietnam has received the “Best Bank” and “Best Debt House” awards from leading international financial magazine The Asset.

This is the second time the bank has been recognised, after receiving its first award in 2007.

The Asset Prizes are regarded as some of the world’s most prestigious, courtesy of their strict marking criteria.

These include taking into account bank product and service development and provision strategies as well as institutional contributions to society in general.

Citi also triumphed in eight other individual Asian country “Best Bank” categories—the Philippines, China, Indonesia, the Republic of Korea, Singapore, Taiwan (China), and Thailand.

Citi Vietnam Managing Director Brett Krause expressed his delight at the two honours, explaining they recognise the bank’s tireless efforts in providing its clients with market-leading services.

Challenges for industrial production

The industrial sector is struggling to achieve the 6.7 percent growth target set for 2013, beset by difficulties, including high inventory levels, high bank rates, and the sluggish global economic recovery.

Small and medium-sized enterprises (SMEs) are not the only entities under pressure. Leading economic groups are also taking great pains to empty inventories and access bank loans for production expansion.

Vietnam National Oil and Gas Group (PVN) Director General Do Van Hau says boosting sales is currently one of the group’s key tasks.

Although the government encourages the use of biofuel (E5), the environmentally-friendly product has yet to be wholeheartedly embraced by the distribution network of the Vietnam National Petroleum Group (Petrolimex) which holds 70 percent of the domestic petrol and oil market share, Hau says.

He also reveals that PVN needs large amounts of capital for oil and gas exploration, oil refinery, and power projects to get off the ground in Vietnam and overseas in 2013.

He explains that the National Assembly has permitted PVN to reserve VND5.1 trillion of its profits in 2012 and 2013 for new projects. Yet, the total sum is just a drop in the ocean compared to the group’s actual investment need.

The Dinh Vu fibre factory in the northern port city of Haiphong has begun its 2013 commercial operations, but its products have similarly failed to earn domestic textile companies’ acceptance.

Meanwhile, Electricity of Vietnam (EVN) is running short of capital to fund the development of new power projects. EVN chief executive Hoang Quoc Vuong says that despite the recent price adjustment, EVN is facing difficulties mobilizing approximately VND106 trillion needed for new projects this year.

Minister of Industry and Trade Vu Huy Hoang says 2013’s trade policies will ease business difficulties, assisting rural development and agro-forestry-fishery production, and supporting the processing industry.

The industrial sector is seeking methods of developing highly competitive industrial products, and supporting the important consumer goods processing and mechanical engineering industries.

It is accelerating the equitisation of SOEs, improving economic group’s and State corporations’ competitive capacity and operational efficiency.

The government will work with ministries and agencies on defining technical specifications for imports into Vietnam, thereby preventing lower-quality and cheaper-priced goods from impacting the market.

Localities across the country are uniting with the government to assist businesses.

HCM City has pledged to address business concerns in terms of tax, bank loans, interest rates, and administrative procedure simplifications to facilitate business operations.

Nguyen Thi Hong, Vice Chairwoman of the HCM City People’s Committee, says all 24 districts and towns will foster bank-business links to make it easier for businesses to access loans at reasonable rates.

The city will encourage commercial banks to take part in the ongoing price stabilisation programme for daily necessities. It will also establish a channel of dialogue between municipal leaders and businesses to promptly remove any identified obstacles.

Vietnam – a promising market for famous brand names

Vietnam is considered a huge potential market for luxury watches, says Phillippe Leopold-Metzger, Chief Executive Officer of Piaget – a watch making and fine jewelry brand.

He says Piaget is very keen on expanding its market to China, Thailand, Cambodia, Vietnam and other countries in Southeast Asia.

Piaget, a branch of Richemont known as one of the three largest luxury goods holding companies in the world, is increasing investment in the region. So far, it has opened two shops in Hanoi and Ho Chi Minh City.

A recent research by Credit Suise group – a Swiss advisory service provider, predicts that there will be 18 more billionaires in the world in the next five years, most of whom come from newly-emerging countries, including “new Asian tigers”.

Vietnamese foods promoted on Japanese TV

Vietnamese landscape and traditional dishes will take centre stage in a documentary shot by a film crew from Japan’s BS12 channel.

The nine-member crew selected the central province of Quang Nam to make the film. Shooting locations include Hoi An Ancient Town’s houses, temples, Chua Cau (Japanese bridge), and the vegetable planting village of Tra Que.

The 60-minute documentary will air in February and March.

BS12 is a popular Japanese television channel broadcasting tourism and travel programming, featuring many Japanese celebrities.

Quang Nam’s provincial People’s Committee has urged relevant agencies to promote its speciality Mi Quang (Quang noodle) more intensively to both domestic and international tourists, especially after it became one of twelve Vietnamese dishes recognised by the Asian Records.

Craft villages target domestic customers

Many businesses in timber craft villages have switched their focus to the domestic market in a bid to escape the current economic downturn which has forced foreign importers to reduce spending on timber products.

In northern Bac Ninh Province, there are more than 15 timber trade villages operating, creating jobs for thousands of local labourers.

Wood products from Dong Ky, Phu Khe, Huong Mac and Tam Son have got its trademark and been exported for years.

However, vice chairman of the provincial Timber and Forest Products Association Le Van Cam said many businesses have stopped production or operated in moderation due to the reduction in orders from China, the province’s main importer.

In Dong Ky Village, for example, up to 70 per cent of wood products were exported to China. Thus, these businesses are trying to supply wood products to the domestic market.

Chu Van Nhung, owner of a timber enterprise in the village said he used to hire six full-time labourers to produce and deliver products to Chinese partners.

But due to fewer orders, high interest rates on bank loans and increasing costs of materials, he last year began to sell his products to domestic consumers.

Now, a large number of his products are sold in northern and central regions.

According to the village’s estimation, up to 90 per cent of wood products will be consumed domestically this year and the rest exported.

Nguyen Ton Quyen, general secretary of the Viet Nam Timber and Forest Product Association said the domestic market had been left wide open with the increasing demand of timber products for hotels, offices and new urban areas.

A survey conducted by the association in the last six months of 2012 among 200 households showed that each family spent about VND6 million (US$288) on average for wood furniture.

Senior expert of non-profit organisation Forest Trends said that although trade villages’ wood products were diversified, the industry lacked policies for sustainable development.

Speaking at a conference on Thursday in the same province, To Xuan Phuc said that most businesses were households with small-scale production.

He was citing a survey of five trade villages in the Mekong Delta region – including Dong Ky, Van Diem, La Xuyen, Lien Ha and Huu Bang.

Moreover, there were no connections between these households, which led to unfair competition such as skipping production steps to reduce the cost price and increase profit.

These businesses also took little care of the quality assessment and origin of timber materials – compulsory elements for good-quality products following the international criteria, he said.

According to experts, businesses should link with each other by joining an organisation to find better sources of timber materials and work on larger production orders.

The ministry of Agriculture and Rural Development has required the Forest Protection Department to build an inspection system on the origin of timber materials to improve the quality of wood products, the conference heard. Currently, Viet Nam has 302 timber trade villages. These villages supply more than 80 per cent of wood furniture and wood building materials for the domestic market with total turnover of $1.5 billion annually.

About 50 per cent of the villages are located in the Red River Delta, creating jobs for 300,000 labourers.

US still top market for clothing forecast to grow 3% this year

The US, Japan, the EU and South Korea are expected to remain Viet Nam’s four key markets for the garment industry this year, according to the Viet Nam Textile and Apparel Association (Vitas).

For the next few years, the US will continue to be the biggest market, with a forecast growth rate of about 3 per cent this year.

According to Vitas, Japan this year could topple the EU as the second-biggest importer of Vietnamese garments.

This year, Japan’s import value is expected to be about US$2.37 billion, a year-on-year increase of 18 per cent over 2012.

Meanwhile, the EU’s import value for garments is predicted to decline somewhat this year, as it did in the previous year, while Viet Nam’s other key markets are expected to see increases of about 5 per cent each.

According to Vitas, most garment companies have received orders for the first quarter, and some have orders for the second and third quarters as well.

The association and its members are waiting for the Trans-Pacific Partnership Agreement to go into effect, which is expected to be signed this year.

The agreement is currently being negotiated by nine countries, the US, Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore and Viet Nam.

Under the agreement, Vietnamese garment companies would enjoy either a zero or low per cent import tariff.

Currently, import taxes from the US and other countries are very high, affecting the competitiveness of Vietnamese garment products.

To help domestic garment companies, Vitas has asked the Government to invest more in the national garment-trademark programme.

It also wants the government to strengthen trade promotions at Vietnamese embassies around the world.

Close co-operation among companies is also needed to further develop exports, according to Vitas.

Policy advocacy weak in VN business groups

Policy advocacy is the biggest weakness of Vietnamese business associations, according to a survey released yesterday by the Viet Nam Chamber of Commerce and Industry (VCCI).

Policy advocacy refers to advocacy tactics, strategies and initiatives which target changes to policies and legislation.

Only 44 per cent of interviewed associations reported participating in policy advocacy activities, while 56 per cent admitted they had never advocated.

“This is a sad reality, as policy advocacy is considered one of the most important functions and responsibilities of an association and aims to effectively protect members’ rights and interests,” said a VCCI representative.

Only 38 per cent of associations said that their policy advocacy activities were effective, while 53 per cent were unsure and 2 per cent judged their activities ineffective.

On the bright side, 85 per cent of surveyed associations said they had organised dialogues with authorities to address their major concerns in taxes, land and natural resources management and finances and 73 per cent of associations had collected their members’ opinions on how to improve the domestic business environment.

“The role of associations has become increasingly important,” said Dau Anh Tuan, deputy head of VCCI’s Legal Department and a member of the surveying team.

However, local associations were stuck in a vicious cycle, Tuan said, as insufficient financial capacities and a shortage of materials caused associations many difficulties in attracting skilled personnel.

Without skilled human resources, it was hard for associations to offer professional and quality services for members. Failures to draw new members resulted in capital shortages, holding back operations.

He called for the State and sponsors to provide financial assistance that could help associations improve their corporate governance. “Closer co-operation between associations is also necessary,” he said.

Viet Nam Steel Association chairman Pham Chi Cuong agreed that associations have encountered many challenges, with financial shortages being one of the most serious.

Cuong emphasised the importance of issuing a Law on Associations that could help facilitate the development of local associations.

The survey, conducted from July to September, interviewed 78 associations nation-wide.

Trade with Russia totals $3.6 billion

Bilateral trade between Viet Nam and Russia hit a record high of more than US$3.6 billion last year, according to the Ministry of Industry and Trade.

Both countries maintained an upward trend in their trade exchange despite the negative impact of the global economic slowdown last year.

Vietnamese exports rose more than 32 per cent to $2.3 billion, while Russian exports also increased 16 per cent to $1.3 billion. The figures were exclusive of oil trading.

The main Vietnamese exports to Russia are textiles and garments and agricultural and fishery products. Russia exports petrol, steel, fertiliser and machinery to Viet Nam.

Viet Nam and Russia hope to achieve $7 billion in bilateral trade by 2015 through expanding various trade channels and strengthening trade in the sectors of science-technology, education and training and tourism.

Domestic trade officials expected that Vietnamese exports to Russia would surge significantly after Russia lowers import taxes on Vietnamese agricultural products by 30-50 per cent in the next three to four years.

The move is one of the trade commitments that Russia made when it became a member of the World Trade Organisation (WTO). Import taxes on clothes, leather items and seafood will also fall.

Moreover, tariffs could fall to zero on other goods if Viet Nam and the customs unions of Russia, Belarus and Kazakhstan sign a Free Trade Agreement. The two sides will start talks over this FTA in the first quarter of 2013 and aim to sign it two years later.

The two countries’ bilateral trade turnover reached $1.98 billion last year, an increase of 8.1 per cent from 2010.

Russia is ranked 23rd of the countries that invest in Viet Nam. Most of the investment is in the fields of mining, processing, manufacturing, banking and telecommunications.

Russian investors recently agreed to implement several major investment projects in Viet Nam, including a titanium slag plant, a power generator manufacturing plant and a hotel complex.

Officials spread word on tobacco smuggling law

One hundred officials and representatives from relevant ministries and agencies met yesterday in Ha Noi to discuss how to implement a new Government circular on handling illegal cigarette and cigarette material trading.

Circular 36 sets out strict penalties for trading, transporting and hoarding smuggled tobacco, said Pham Kien Nghiep, general secretary of the Viet Nam Tobacco Association.

Under the circular, offenders who smuggle 1,500 to 4,500 packs will be subject to criminal prosecution and can be imprisoned from six months to three years.

Those who smuggle 4,500 to 13,500 packs will be subject to criminal prosecution and can be imprisoned from three to seven years.

And for smuggling more than 13,500 packs, the punishment will be criminal prosecution and sentences of seven to 15 years. A repeated offence can also result in criminal prosecution.

The smuggling of Jet and Hero cigarettes into the country has been going on for 15 years. The quantity of smuggled cigarettes has increased significantly year by year, threatening the tobacco industry as well as domestic consumers’ health, speakers said at the seminar.

These cigarettes are produced by Sumatra Tobacco Company in Indonesia, but are rarely used by Indonesians. The cigarettes are imported legally into Cambodia due to its preferential tax policy and then exported illegally into Viet Nam.

Those illegal cigarettes fail to include import stamps or health warnings and have not been tested by the Vietnamese agency in charge of monitoring cigarette quality.

The smuggled cigarettes are also causing problems for the domestic agricultural sector as they now occupy a significant share of the cigarette market, more than 180,000 people who worked in the tobacco industry are unemployed.

Related industries such as filter cigarette manufacturing, packaging and printing and box production have also been badly affected.

In 2007, the Government issued a policy of destroying all confiscated cigarettes, raising penalty amounts and mobilising funds from the tobacco industry to directly support units and individuals who actively contribute to the anti-smuggling campaign.

“I believe that the deployment of this circular with more serious sanctions, as well as strong efforts by relevant agencies, will successfully fight smuggling cigarettes, which assures that there will be no tax loss for the Government and helps to establish a fair playing ground for legal domestic tobacco companies,” said Nghiep.

Smuggled cigarettes have recently accounted for 20 per cent of the cigarette market – about 800 million packs – even though their quality is not certified, he said.

This resulted in a VND4,320 billion loss for the government budget in 2012.

Additionally, nearly all of the smugglers trade in cash, creating another loss of over US$$400 million per year.

Firms to take part in Asia horticultural fair

Vietnamese companies will take part in the international trade show for horticultural and floricultural production and processing technology, Horti Asia 2013, to be held in Bangkok next May.

To be held in the Bangkok International Trade and Exhibition Centre from May 9-11, the event is expected to attract 155 exhibitors in breeding, seed, planting and cultivation technologies, as well as equipment for storage, cooling, packaging, processing and greenhouses.

The trade show aims to support the fast-growing horticulture and floriculture industries in Southeast Asia and act as a platform to share new innovations and technologies, said Ladda Mongkolchaivivat, director of VNU Exhibition Asia Pacific, the event’s organiser.

Nguyen Thi Dao, a member of the Viet Nam Fruits and Vegetables Association’s executive board, has encouraged local companies to promote many kinds of Vietnamese fruits at the event.

Vo Mai, deputy chairwoman of the Viet Nam Gardening Association, said the Food and Agricultural Organisation forecast that demand for fruit and vegetables in the world market would increase annually by 3.6 per cent while world output would rise by 2.8 per cent per year.

The situation offers Viet Nam a huge opportunity to increase its fruit and vegetable exports.

However, high requirements on food safety and plant quarantines set by importing countries make it more difficult for Vietnamese produce to penetrate markets.

To meet such strict requirements, she said the local fruit and vegetable industry must adopt new production, harvest and processing technologies.

Fruit and vegetable export value reached US$805 million last year, a year-on-year increase of 30 per cent, according to the Viet Nam Fruits and Vegetables Association.

Affordable housing projects to increase

High and middle class real estate is not expected to attract investment this year due to the high level of unsold properties, but social housing projects are forecast to increase with encouragement from the Government.

The Ministry of Construction said middle and upper-class apartment prices declined last year by 20-30 per cent, but still they weren’t selling.

According to Savill’s fourth quarter report, only 18 per cent and 3 per cent of sold units in the quarter were in middle and upper class respectively. Further price reductions were predicted.

Meanwhile, Government policies provided tax and loan incentives for social housing developers. The corporation income tax rate of 10 per cent would apply, instead of 25 per cent, together with a reduction of 50 per cent in value-added tax.

Also, the State Bank would provide about VND20-40 trillion (US$0.95-1.9 billion) in loans at preferential interest rates and with reasonable terms.

The Government encouraged commercial developers to focus on social purposes.

The ministry said many investors had indicated they would move into social housing projects, including in the expanded Trung Van urban area and Bac An Khanh project in Ha Noi.

Minister Trinh Dinh Dung predicted the prices of low-income apartments would be less than VND500 million ($23,900) and buyers would get benefit from loan interest rates of 3-6 per cent.

Retail sector shines in gloomy property market

The retail sector was the sole bright spot in a still sombre property market in the fourth quarter of 2012, real-estate services company CBRE Vietnam has said in a report.

The period saw two shopping malls open – the 38,000sq.m.Vincom Centre A in District 1 and the 40,000sq.m Pandora City in Tan Phu District.

The former has leased out 95 per cent of its space, and the latter, 80 per cent, the report said.

With the opening of the two new centres, more fashion brands have entered the market, including Hugo Boss, Banana Republic and 7 For All Mankind.

Fast food chains have been looking to expand in the city with Burger King opening five outlets last year, Subway announcing the opening of 10, and Starbucks, McDonald’s, and 7-Eleven all expected to enter this year.

Major retailers like Takashimaya and AEON of Japan and VivoCity of Singapore have evinced interest in Viet Nam, Duong Thuy Dung, a senior manager at CBRE, said.

Despite the increased supply, the occupancy rates at shopping malls remained unchanged from the previous quarter.

The last quarter saw more than 57,700sq.m leased, almost four times the area in the third quarter.

Meanwhile, Savills Vietnam calculates that between 2013 and 2015, 35 projects with a total area 531,000sq.m will join the office market, bringing the total area to 1.85 million square meters, up 40 per cent over 2012.

Six new office buildings with 53,400sq.m entered the market in last year’s Q4, bringing the total supply to over 1.3 million square meters.

Average occupancy dropped by 2 percent and average rent fell by 2 percent as well, compared to the previous quarter.

A three-star hotel became operational, offering 69 rooms while a 130-room five-star hotel closed doors temporarily for renovation.

The total stock of 86 three to five-star hotels in HCM City stood at 11,500 rooms, down one percent q-o-q, but up six percent y-o-y.

State pulls out of farm product company

The State Capital Investment Corporation will sell convertible bonds of agriculture product manufacturer Dabaco (DBC) to reduce state capital in the company.

Shares of Dabaco gained 1.4 per cent to reach VND21,300 (US$1) yesterday as 360,000 bonds put up for sale, with a minimum price of VND140,000 ($6.60) each. Conversion will take place on February 14.

Last year the company achieved a turnover of over VND6 trillion ($285.7 million) and a net profit of VND174 billion ($8.2 million), 4 per cent above the annual target. It plans to increase this year’s revenue and profit to VND7.53 trillion ($358.5 million) and VND208 billion ($9.9 million) respectively.

BIDV announces detailed real estate loan package

The Bank for Investment and Development of Viet Nam (BIDV) announced details of a VND30 trillion (US$1.43 billion) loan package signed with the Ministry of Construction this week to support social housing development during the 2013-15 period.

According to the agreement, individuals would receive VND19.5 trillion in loans to purchase or rent social houses. The loans’ interest rate would be 90 per cent of what the bank would normally charge. The maximum loan would be equal to 85 per cent of the house’s value with a maximum term of 15 years.-

Short-term leasing to be offered on auction land

The HCM City People’s Committee has agreed with the Center for Development of House Land Funds and Department of Resources and Environment to offer land that awaits auction for short-term leasing.

The Department is responsible for approving individual leases.

Vincom giant shopping mall 80% leased

Vincom Mega Mall Royal City has leased out 80 per cent of its total 230,000 square metres, VinGroup announced.

The mall on Nguyen Trai Street, Ha Noi, is slated to open on July 26. It will be the biggest shopping mall in Viet Nam and aims to attract tens of thousands of visitors each day. More than 78 per cent of the 150,000sq.m shopping space has been leased to stores selling international brands such as Replay, Axara, G2000, United Colors of Benetton, Sisley, Ninewest, Cle De Peau, Apple, Samsung and Akemi.

All 42,000sq.m of entertainment space have also been leased; the facility will include a water park, ice rink, games area and cineplex.-

Cushman&Wakefield appoints new country

Cushman & Wakefield, the world’s largest privately held real estate firm, announced the appointment of Chris Brown to the position of Viet Nam Country Manager today. Chris Brown is responsible for the overall operation of the firm’s offices in Ha Noi and HCM City.

Fines build up for failure to pay land-use fees

Many major projects failed to pay adequate land use fees, including the Duong Noi, Kim Chung-Di Trach and Quoc Oai New Urban Area projects.

The total fines were estimated to reach trillions of dong, according to the Ha Noi Department of Taxation’s report. Previously, Government inspectors proposed Ha Noi take back VND2.893 trillion ($137.8 million) for incorrectly calculating the land use fees of four projects.

PM to approve projects on more than 100ha

The Prime Minister will approve projects covering more than 100ha, according to a recent decree on urban investment and development.

Most projects stretch over two provinces or are in areas that play an important role in national security. Projects with areas ranging from 20 to 100ha fall into the jurisdiction of the provincial people’s committees. Provincial departments of construction will be in charge of setting up individual urban development programmes for each province.-

Viettel earns $600 million from overseas operations

Telecom firm Viettel earned US$600 million of revenue from its foreign markets last year, up 45 per cent year-on-year, Nguyen Manh Hung, deputy general director of Viettel said.

Viettel is doing business in seven countries and the firm has already gained profit in four countries including Cambodia, Laos, Mozambique and Haiti.

By the end of 2012, Viettel remitted home $84 million, with most profits generated from its Cambodia business operations. They also aim to bring this figure in 2013 up to $150-160 million.

Viettel revealed that of total investment capital in each overseas market, just under 50 per cent was domestic capital. The rest, they borrowed from local banks and owed the equipment suppliers.

VietJetAir adds connection between Bangkok, HCM City

The low-cost carrier VietJetAir has launched a promotion with flights between HCM City and Bangkok for only US$10 from February 10 until the end of the year.

The airline’s first international route will open on February 10 (the first day of the Lunar New Year) with one flight a day.

Foreign investors seek opportunities in Quang Ninh

Many foreign investors have shown interest in expanding investments in the northern province of Quang Ninh.

The provincial People’s Committee has worked with a delegation from Japan’s Mie Prefecture which is seeking investment opportunities.

Head of the delegation Ono Kinichi hoped to have long-term co-operation with Quang Ninh and expressed a desire to develop agricultural complex plants here.

In addition, provincial authorities worked with leaders of Au Lac Tuan Chau Co Ltd and Thailand-based Amata Corporation to discuss an urban project that included research institute, green industrial zone, etc. It was proposed to build on 3,000ha of land in Quang Yen township.

HCM City’s outstanding loans grow by 11.97%

Total outstanding loans in HCM City grew 11.97 per cent last year to VND855.44 trillion (US$41.1 billion), of which 78 per cent were for production, the State Bank of Viet Nam’s HCM City branch said.

HCM City-based banks lent in total VND85.29 trillion ($4.1 billion) to 22,966 businesses in three priority sectors: VND14.99 trillion ($720 million) to agriculture and rural areas, VND17.48 trillion ($840 million) for export activities, VND47.72 trillion ($2.3 billion) for small and medium enterprises.

Meanwhile, total deposits expanded by 11.2 per cent in 2012.

Farmers to boost soybean crops in Mekong Delta

Authorities in the Cuu Long (Mekong) Delta will help farmers expand soybean-rice fields by providing them with financing and training.

In Viet Nam, soybean output meets only 10 per cent of demand. More than 1.2 million tonnes of soybean are imported each year, according to the Plant Cultivation Department.

Last year, the Delta cultivated 2,900ha of soybeans, mostly in An Giang, Dong Thap and Vinh Long provinces and Can Tho City, according to the Ministry of Agriculture and Rural Development (MARD).

Delta farmers plant two crops of soybeans a year, the winter-spring crop and the spring-summer crop.

Soybeans and rice have the same three-month cultivation period.

In Dong Thap Province, the per hectare yield reached 2.3 tonnes of soybeans last year, bringing a profit of VND15-20 million (US$714-952) to farmers, while profits on rice totalled VND12.5 million per hectare.

Speaking at a seminar held in Dong Thap Province this week, Pham Van Du, deputy head of the department, said the Delta had untapped potential in soybean cultivation.

However, seminar participants pointed out that soybean farming in the Delta had declined in recent years, from 8,932ha in 2009 to 2,967ha last year.

Many farmers switched to other crops, like corn, that have higher profit potential.

Phan Thi Yen Nhi, director of the An Giang Department of Agriculture and Rural Development, said that low prices and unstable outlets for soybeans were the major problems for farmers.

Participants at the seminar recommended rotating rice and soybeans in fields, saying the soybean plants helped prevent rice diseases.

In addition, the leaves and stems of soybeans are good organic fertiliser for paddy fields.

Seminar attendees urged ministry officials to develop more high-quality strains and build more soybean processing plants.

The Plant Cultivation Department said that An Giang Province, which has the country’s largest rice cultivation area, should expand its rice-soybean fields.

Dong Thap and Vinh Long provinces, which have planted soybeans for many years, should follow suit, it said.

The department would work with the Delta to develop five to seven large-scale soybean fields this year.

Bui Ba Bong, MARD’s deputy minister, asked the Delta provinces and Can Tho to develop detailed policies on soybean farming techniques, plant strains and financing.

He pointed out that large-scale soybean fields in Dong Thap Province had helped guarantee outlets and higher incomes for farmers.

Bumper rice crop in southern region in 2012

Last year the southern region had a very successful bumper rice crop with total output of more than 30 million tons, said Bui Ba Bong, Deputy Minister of Agriculture and Rural Development, at a meeting on January 25 to review rice production in the Mekong Delta province of Kien Giang.

Cultivable area increased and so did productivity and output to yield more than 30 million tons in the southern region last year, an increase of 1.45 million tons over 2011.

The total rice output of the country was nearly 44 millions ton in 2012.

This year, Vietnam wants to maintain the present rice cultivable area, strive to increase productivity and output, improve rice quality for export and broaden rice production under Good Agricultural Practice standards.

Ministry works to ease difficulties for real estate sector

In a bid to ease difficulties in the real estate sector, the Ministry of Construction has come up with a series of solutions, including reduction in supply and increase in demand.

This problem was also raised at a meeting of the National Assembly Economic Committee on January 24. Trinh Dinh Dung, Minister of Construction said the sector continues to face difficulties although prices have decreased in all market segments–some of them down by 50 percent , yet just a few transactions have taken place.

As housing developers have high inventory, it is urgent to solve their problem as well as stimulate the market and deal with bad debts.

The government will use fiscal and tax policies flexibly such as delay of business tax and VAT.

The ministry also suggested cutting 50 percent of VAT tax for social housing investors, applicable to apartments with less than 70 square meters of living space and cost less than VND15 million per square meter.

Along with measures and policies to encourage people to buy houses, the government has to have effective tools to curb hoarding.

Deputy Minister wants clarification on egg price hike

Ho Thi Kim Thoa, Deputy Minister of Industry and Trade, has asked the People’s Committee in Hanoi to clarify with related departments the actual reasons as to why the CP Company has not reduced the price of eggs so far in the northern region.

The deputy minister was speaking at a meeting with the People’s Committee in Hanoi, to discuss preparations of commodities for Tet Lunar New Year holiday season.

According to Ms. Thoa, the northern and southern regions have the same source of egg supply. However, the southern region has cut down prices while the price of eggs remains the same up north.

She wanted authorities in Hanoi to ask the CP Company for better clarification and justify the high price of eggs in the northern region.

If the company still refuses to reduce the price, the Ministry will instruct businesses in the southern region to transport eggs to the north, to maintain sufficient supplies.

Nguyen Duc Trong, deputy head of the Department of Livestock under the Ministry of Agriculture and Rural Development, said that the cost price of an egg is only VND1,700-1,800.

As a result, businesses can still profit at a sale price of VND2,100-2,300 an egg.

Most real estate firms made profits in 2012

Around 80% of construction companies reported profits last year, according to the Ministry of Construction.

Real estate companies complained that 2012 was a very difficult year, but initial reports made the situation appear worse than reality.

The Ministry of Construction said 42,197 enterprises reported profits in 2012, compared to 33,362 in 2011. Meanwhile, only 15,296 reported losses in 2012, roughly 2,000 more than 2011.

The number of profit-making companies in 2012 is more than four folds against that of loss-making firms.

Despite the majority of construction companies reporting profits in 2012, real estate prices only decreased by an average of 5% over the year according to the Minister of Construction, Trinh Dinh Dung.

He made this announcement at the recent National Assembly discussion. According to the minister, the apartment segment saw the sharpest fall of between 15-29%.

During the year, many real estate associations sought government support to aid the sector.

A number of real estate investors have been seeking to change their commercial housing projects into social projects such as hospitals or low-income housing.

In the context of current difficulties in the property market, commercial housing projects are finding difficulties in attracting customers. On the other hand there is high demand for affordable housing. Still, the Ministry of Construction is hesitant to grant permission for every project to change its initial purpose.

State owned banks rack up VND46.6 trillion in bad debts

The bad debts of Vietnam’s four big state-owned commercial banks were estimated at VND46.6 trillion (USD2.24 billion) as of December 31, 2012.

The Vietnam Bank for Agriculture and Rural Development (Agribank) had the highest bad debts of VND27.8 trillion (USD1.33 billion), accounting for 5.8% of its outstanding loans.

By December 31, 2012, Agribank’s total outstanding loans reached VND480.45 trillion (USD23.1 billion), up VND36.57 trillion compared late 2011. The bank fulfilled its set outstanding loan growth rate of 8-10% in 2012.

The Bank for Investment and Development of Vietnam (BIDV)’s bad debts stood at VND8.98 trillion (USD431.7 million), accounting for 2.77% of the bank’s outstanding loans. The bank’s outstanding loans reached VND324.21 trillion (USD15.58 billion) by the time, up 16.2% on-year.

The Joint Stock Commercial Bank for Foreign Trade of Vietnam (VietcomBank) reported its bad debts at VND5.39 trillion (USD259.2 million), equal to 2.25% of the bank’s outstanding loans.

Meanwhile, the Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) said its bad debts reached VD4.46 trillion by the end of 2012, or 1.35% of its outstanding loans.

According to the State Bank of Vietnam’s Hanoi Branch, by December 31, 2012, total deposits of credit institutions in the city were estimated at VND896.88 trillion (USD43.2 billion), up 9.13% against the end of 2011. Their total outstanding loans reached VND652.92 trillion (USD31.4 billion), up 11.39% on-year.

However, bad debts have tended to sharply rise and many firms failed to meet bank lending requirements. By late 2012, the bad debt rate of credit organisations in Hanoi stood at 5.04%, up 1.63% on-year.

VN, RoK sign MoU on cooperation in supporting industry

Representatives of the Vietnamese Ministry of Industry and Trade and the Korean Ministry of Knowledge Economy on January 24 in Ha Noi signed a Memorandum of Understanding on boosting bilateral cooperation on supporting industry.

Under the document, Vietnamese experts will join a professional training program on supporting industry in the Republic of Korea.

Deputy Minister of Knowledge Economy Kim Jae-hong said both sides will especially focus on Viet Nam’s prioritized areas like garments, electronics, and manufacturing.

Earlier, Vietnamese Ministry of Finance and Korean Ministry of Strategy and Finance together also inked the 2013-Financial Cooperation Plan to implement the Memorandum of Understanding on Financial Cooperation on 11th January 2013

Accordingly, the Plan focuses on sharing the experiences in SOEs restructuring; national reserve management; financial market supervision; human resources development; assessment on implementation of the State investment credit, export credit policies, improvement of state legal documents on this areas including policies on credit guarantee for SMEs, export credit insurance.


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