Home » Business » BUSINESS IN BRIEF 3/1

BUSINESS IN BRIEF 3-1Vinacomin implement next year’s production plan

he National Coal, Mineral Industries Holding Corporation Limited (Vinacomin) has released its production plan for 2013.

With the difficult economic situation expected to continue next year, Vinacomin has planned flexibly.

Accordingly, in the coal mine sector, Vinacomin set consumption goals of 43 million tonnes and 41.5 million tonnes, correlating with the company’s production targets of 46 million tonnes and 43 million tonnes respectively.

Vinacomin also plans to produce 300,000 tonnes of alumina next year at the nation’s first alumina refinery, Tan Rai, in the central highlands province of Lam Dong.

The Tan Rai alumina plant started production in mid-December after two years of delays.

DOJI jewellers chosen to be a National Brand

DOJI Gold and Gemstone Group was formally designated yesterday as National Brands 2012 by the Prime Minister. DOJI Group CEO Do Minh Phu was also presented with the Labour Order, third class, for his outstanding achievements from 2007 to 2011.

DOJI posted earnings this year of $1.4 billion and has also been recognised as the country’s largest private enterprise by the VNR500, a listing of Viet Nam’s largest businesses modelled after similar listings created by Fortune magazine.

Dragonfruit association denies price-fixing

Bui Dang Hung, chairman of Binh Thuan Dragon Fruit Association, yesterday rebutted rumours that local businesses made an agreement with each other to buy dragonfruit at a low price from local growers in central Binh Thuan Province.

The rumour is believed to have been started by a misunderstanding between the association’s vice chairman and the head of a group of dragonfruit entrepreneurs.

Statistics from the local Industry and Trade Department show that the province has 152 producers who purchase dragonfruit from local growers.

According to Hung, the involved group of ntrepreneurs only count 23 producers as members, making it impossible for them to make a price-fixing deal with each other.

Dragonfruit currently costs about VND11,000 (US$0.5) per kilo, VND4,000 down on the same period last year.

Viet Nam Days to be held in Italy, says chamber

The Viet Nam Chamber of Commerce and Industry will join hands with relevant ministries and agencies to host Viet Nam’s Days in Italy on January 16-23, the chamber announced yesterday.

The Viet Nam-Italy Economic Co-operation Forum will be held during the event, which will coincide with the 40th anniversary of diplomatic relations between the two countries, the chamber said.

Participating Vietnamese companies would also have opportunities to survey markets and customer tastes in the Italian cities of Rome and Florence and in the Spanish capital of Madrid City.

Petroleum prices cut by up to 2 cents

The prices of several types of petroleum were cut by 300-500 dong (1-2 US cents) per litre yesterday evening at the behest of the ministries of Finance and Industry and Trade.

The price of diesel was down from VND21,850 to VND 21,550 per litre, kerosene from VND21,900 to VND21,600 per litre, and mazut from VND18,150 to 17,650 per litre.

The ministries said that the adjustment was made to benefits the State, businesses and consumers. Gasoline prices were kept intact because there was no significant fluctuation in import and retail prices for this commodity, they added.

They noted that a subsidy of 300 dong per litre, which comes from the country’s petrol price stabilisation fund, would still apply for oil and gasoline.

Abundant supply means office rental market belongs to tenants: report

A tendency for offices in HCM City to move back to the downtown area was discernible in 2012, according to leading commercial real estate services provider Cushman & Wakefield.

The real estate services firm records “existing total stock” at over 1.25 million sq.m, but notes that there seems to be a “limited supply” of Grade A offices with floor space of over 1,000 sq.m.

It estimates supply of new office space for the year at 220,000sq.m and for this to increase to 230,000sq.m in 2013.

Significant projects under construction (Grade A) include Times Square (9,930sq.m), originally scheduled for completion in the fourth quarter of this year; the 34,400sq.m Lim Tower that is set for completion in first quarter of 2013; and the 9,125sq.m President Palace, which was also to be completed in the fourth quarter of this year.

In the Ha Noi market, the office migration tendency was to the west of the city, with demand volumes in general on the decline. The report said a marginal uplift in demand could be seen in 2013 compared to 2012. The capital city existing “total stock” was estimated at one million square metres.

This years total new supply in the capital city was estimated at 150,000 sq.m, but predicted to double next year, so “Ha Noi will remain a tenants market.”

Significant projects under construction include the 21,000sq.m Cornerstone (estimated completion in 2013); 43,835sq.m Lotte Centre Ha Noi (estimated completion in 2014); and the 45,261sq.m EVN Twin Tower (estimated completion in 2013).

Cushman & Wakefield is the worlds largest privately-held commercial real estate services firm. Founded in 1917, it has 243 offices in 60 countries and more than 14,000 employees.

Housing prices might be even lower next year

Real-state prices might continue to fall next year according to Hoa Phat Land director Pham Trung Hau. He was speaking to the media about the possible impacts of Government measures to warm up the market.

To help rescue the economy, the Government recently lowered deposit and lending interest rates by one per cent in a bid to provide enterprises with easier access to finance.

Ha said interest rates for property investments should be adjusted after the move.

He said he did not expect an immediate positive reactions from the market, saying that home buyers wanted low interest rate for medium and long term loans. Previously, a preferential interest rate had been provided by commercial banks to real-estate companies and home buyers, but mainly for loans of between one to 12 months.

According to Truong Chi Kien, deputy director of the Him Lam Thu Do company, focus should be placed on speeding up clearance of real estate inventories, citing experiences from Thailand during 1998.

He pointed out that home buyers in Thailand had to pay interest rate of only 0.5 per cent in the first two years, which helped create demand.

The Government could also provide support through tax policies to lower repayments, Kien said.

A support package of between VND20-40 trillion (US$961 million-$1.9 billion) was recently announced by the Government to encourage enterprises and individuals to take part in housing development.

Nguyen Huu Cuong from Ha Noi Real Estate Club said that the credit package would operate efficiently only if it reached its targeted subjects, including investors and home buyers.

Meanwhile, Ha stressed that with or without support packages, real estate enterprises themselves should lower their housing prices and even accept losses to improve the liquidity of the market.

Experts forecast a boom in low-price apartments with average prices of below VND15 million per square metres ($715) in the next two years.

This will be helped by Government policies to boost social and low-income housing.-

Malaysian petrol distributor buys Vietnamese companies

Petronas Dagangan Bhd, the supplier of petroleum products in Malaysia, has completed the acquisition of two Vietnamese petroleum companies, Petronas Vietnam Co and Thang Long LPG Co.

The transaction was made in accordance with an agreement of share sale and purchase dated June 1, 2012.

Both Vietnamese companies would be held by Petronas Dagangan Bhd (PDB) via a wholly owned investment holding PDB (the Netherlands) BV, the company announced in a statement on Monday.

Following the deal, PDB has completed the acquisition of all six downstream companies in South East Asia.

PDB managing director and chief executive officer Aminul Rashid Mohd Zamzam said at the completion of the agreement that PDB would fully integrate its domestic and regional operations.

“The focus moving forward is to roll out the various growth initiatives over the next 12 months, focusing on nurturing and strengthening the newly acquired companies,” Zamzam said.

PDB is a subsidiary of Malaysian oil and gas company Petroleum National Berhad (Petronas) which holds a 69.86 per cent stake.

PDB is involved in the distribution and sale of finished petroleum products and operations of service stations for the domestic market.

Downtown office market heats back up

A tendency for offices in HCM City to move back to the downtown area was discernible in 2012, according to leading commercial real estate services provider Cushman & Wakefield.

The real estate services firm records “existing total stock” at over 1.25 million square metres, but notes that there seems to be a “limited supply” of Grade A offices with floor space of over 1,000 square metres.

It estimates supply of new office space for the year at 220,000 square metres and for this to increase to 230,000 square metres in 2013.

Significant projects under construction (Grade A) include Times Square (9,930sq.m), originally scheduled for completion in the fourth quarter of last year; the 34,400sq.m Lim Tower that is set for completion in first quarter of 2013; and the 9,125sq.m President Palace, which was also to be completed in the fourth quarter of last year.

In the Ha Noi market, the office migration tendency was to the west of the city, with demand volumes in general on the decline. The report said a marginal uplift in demand could be seen in 2013 compared to 2012. The capital city’s existing “total stock” was estimated at one million square metres.

Last year’s total new supply in the capital city was estimated at 150,000 square metres, but predicted to double this year, so “Ha Noi will remain a tenants market”.

Significant projects under construction include the 21,000sq.m Cornerstone (estimated completion in 2013); 43,835sq.m Lotte Centre Ha Noi (estimated completion in 2014); and the 45,261sq.m EVN Twin Tower (estimated completion in 2013).

Cushman & Wakefield is the world’s largest privately-held commercial real estate services firm. Founded in 1917, it has 243 offices in 60 countries and more than 14,000 employees.

Top firms join national brands programme

Fifty-four domestic enterprises have been selected to join the National Brand Name Programme, the Ministry of Industry and Trade has announced in Ha Noi.

Those chosen operate in the likes of machinery engineering, textiles and garments, leather and footwear, financial services, electronics and IT, energy, agro-fishery and forestry and food sectors.

The criteria include that brands must be well-recognised by customers, built on sustainable development strategies and committed to allocating resources for brand development and keeping to the values of the State-run programme.

Deputy Minister of Industry and Trade Tran Tuan Anh said the State-run programme aimed to sharpen the competition of Vietnamese goods in local and global markets while encouraging businesses to increase exports of processed products and reduce exports of raw materials.

It also reinforced brand acknowledgment for Vietnamese products, he said.

“The programme is not a prize,” said head of the ministry’s Trade Promotion Agency Do Thang Hai. It was only the beginning in the process of enhancing and developing brands in an attempt to create long-term business value.

Thong Nhat Limited’s general director Nguyen Huu Son said participating in the programme helped his company better advertise products and affirm their position in the local market.

The agency said most of the 43 businesses in a previous programme had maintained high growth in profit and turnover and had made advances in both domestic and export markets.

The agency said selected businesses may use the official seal (Vietnam Value) on their products, as well as in promotional material, and also make suggestions and ideas.

Software copyright blitz tipped

Next year, inspections on software copyright violations would be increased and violators would get stricter punishments, said Pham Xuan Phuc, deputy chief inspector of the Ministry of Culture, Sports and Tourism.

This year, the ministry’s inspectors conducted unscheduled inspections on nearly 3,900 computers belonging to 87 enterprises. Most of the inspected companies were using pirated software; the violators had to pay a total fine of VND1.58 billion (US$75,000).

Notably, 80 per cent of the violators were foreign firms, Phuc said.

Most recently, the ministry inspection agency, co-operating with the Ministry of Public Security’s High-tech Crime Control Police Bureau, detected four major foreign-invested companies in HCM City and southern Binh Duong and Dong Nai provinces using 561 copies of software programmes for which they had not purchased the copyright.

Microsoft Windows, LacViet MTD dictionary, Adobe Acrobat and AutoCAD were the most commonly pirated software programmes.

The value of the pirated software was estimated at nearly VND4 billion ($190,500), he said.

Large-scale enterprises with strong financial capacity that nevertheless tried to avoid paying for legally licensed software should be punished most heavily, inspector Phuc said.

Vu Manh Chu, former head of the Copyright Office of Viet Nam, said illegal software use should be subject to criminal charges. According to the Law on Intellectual Property, copyright owners could initiate legal proceedings against violators and seek compensation for damages caused by the piracy.

Enterprises licensed to export goods to international markets would also be banned from exporting to those countries.

The battle against copyright infringement also required software producers to co-operate with relevant authorities in making businesses aware of copyright regulations, Phuc said.

Japanese firms all abided by copyright laws, showing that they were well-informed.

Fruit prices soar in Mekong Delta

Fruit varieties grown in the Cuu Long (Mekong) Delta are already fetching higher prices, nearly two months ahead of the Tet (lunar new year) holiday, when prices typically undergo a seasonal spike.

Wholesale traders have flocked to orchards to buy up ripening crops of Lai Vung mandarin and Cat Chu mango in Dong Thap Province, green-peeled grapefruit in Beon Tre Province, and Hoa Loc mango in Tien Giang Province.

The mandarin, a specialty of Dong Thap’s Cao Lanh District, is being sold at orchards at VNe22,000/kg, up from VNe16-17,000 just 10 days earlier.

Luu Van Rang, who owns a 6,000sq.m mandarin orchard in Vinh Thoi Commune, said he and many other farmers had refused to sell because they hoped that prices would rise further before Tet. Rang said he expected to command closer to VND26,000 as the holiday neared.

“The yield in most orchards will not be what has been in recent years,” he said.

The Lai Vung Agriculture and Rural Development Bureau expects yields to decline by 40 per cent due to unfavourable weather and flooding this year. The district has around 1,200ha under cultivation with the pink mandarin and output was expected to shrink by 16,000 tonnes, the bureau said.

The output of green-peeled grapefruits in Ben Tre was also expected to decline since an estimated 40 per cent of grapefruit-growing areas in the province have been infested by a worm (Citripestis sagittiferelle Moore) that destroys the fruit, according to orchard owners.

Dam Van Hung, chairman of the Huong Mien Tay Grapefruit Co-operative in Ben Tre, said the fruit was being sold at orchards now for VND34,000/kg.

“If the disease is not controlled soon, the price at orchard could be as much as VNe36,000, a record high,” Hung said.

In Dong Thaup and Tien Giang over the past month, traders have been unable to secure supplies of Hoa Loc mango for Tet. In Cao Lanh Distirct, the mango now costs VNe90,000 compared to VNe30-40,000 during normal market conditions. Huynh Thanh Sun, deputy head of the district’s agricultural bureau said that heavy rains during the blossoming season had cut the fruit bearing rate in half.

Mango harvests have also been poor this season in Tien Giang Province because of unfavourable weather. Huynh Thanh Sang, vice chairman of the province’s Hoa Looc Mango Co-operative, said the price of Hoa Loc mango was currently VND75,000, VND10,000-15,000 higher than last year. At this price, farmers could earn VND30 million per 1,000 sq.m of orchard, he said.

Deposit interest cap reignites rate war among banks

Following the sharp cut in the deposit interest rate ceiling to 8 per cent, a fierce battle to retain deposits has broken out between banks, with many resorting to illegally offering higher rates.

The State Bank of Viet Nam reduced the cap from 9 per cent in an attempt to bring down loan interest rates and spur economic growth, which is forecast to plummet to levels not seen in more than a decade.

But independent analysts said the central bank’s move places a hurdle before banks’ efforts to retain existing depositors and attract new ones.

Since the rate was cut, many people have been withdrawing their money from banks and investing in other asset classes like property and foreign currency, the analysts said. Small banks are particularly struggling.

Consequently, many lenders have been breaching the rate cap. Some small banks are offering 10 to 12.5 per cent for deposits of VND1 billion or more and with terms ranging between one and three months, while others are offering gifts and cash incentives.

For example, some banks officially offer 8 per cent as regulated, but pay customers the difference between that rate and higher rates in cash.

Hoang Thanh Phong in HCM City’s Tan Binh District said that when he brought VND2 billion to a commercial bank in the district, a bank employee told him that by depositing the money for a three-month term, he could enjoy an annual interest rate of 12.5 per cent.

To retain existing depositors, some commercial banks are offering an interest rate of 10 per cent per year for deposits with terms of one and three months.

The banks give depositors savings books with an interest rate of 8 per cent per year, as regulated. But when a customer makes a deposit, the bank subtracts the difference between the regulated interest rate and the offered bank rate and gives the customer an amount of cash equivalent to the difference.

Although this practice is illegal, it is difficult for inspectors to uncover.

A few months ago, when the savings interest rate was capped at 11 per cent and then 9 per cent, many banks offered 14 and 15 per cent, then 12 and 13.5 per cent. Although some were punished severely by the central bank, this did not deter their competitors.

Nguyen Hoang Minh, deputy director of the State Bank of Viet Nam’s branch in HCM City, admitted that capital mobilisation was of vital importance to commercial banks, particularly in the last months of the year when customers’ capital demands were increasing sharply. Therefore, banks that did not offer the highest interest rates would not be able to compete.

Truong Van Phuoc, general director of Eximbank, told Dau Tu newspaper that his bank achieved a satisfactory rate of mobilised capital in 2012, while its credit growth was minus 6 per cent. Although the bank maintained the regulated deposit interest rate, Phuoc said the central bank should consider lifting the deposit interest rate cap so the lending interest rate could be lowered to the rate expected by enterprises.

With the new deposit interest rate cap, most small banks would find it difficult to compete with major banks in mobilising capital, according to a chairman of a commercial bank in the city.

The former SBV governor Le Duc Thuy said that inflation in 2012 was controlled at 6.81 per cent, so the 8 per cent deposit interest rate cap was reasonable. He acknowledged, however, that breaching the cap was an all-too-common phenomenon.

Speculators avoid slumped apartment market

The lack of buyers despite significant price reductions and other sweeteners shows that secondary investors and speculators have disappeared from the residential apartment market segment, industry insiders say.

A real-estate broker told Viet Nam News on condition of anonymity that in the current situation, the only interested buyers are those who have real need for housing.

And they are only interested in finished products, he said.

“No one wants to pour money to the projects that are not complete. This year, money from overseas Vietnamese has also declined, so the market is grey,” he added.

He said apartments are not very marketable products at the moment, with sales having fallen by about 60-70 per cent over 2011.

The prolonged economic slump and stagnant market have forced apartment developers to reduce prices in order to attract more consumers.

Nguyen Khac Minh, an employee of the Dong Hung Real Estate Company in HCM City, said they were offering apartments at 20 to 30 per cent less than their original price.

“Due to a capital shortage, investors of many projects such as Phu Hoang Anh in District 7, Chanh Hung Giai Viet in District 8 and Hoang Anh River View in District 2 have already announced lower prices,” Minh said.

He noted that a project in District 8, for instance, had an original asking price of VND20.4 million (US$970) per one square metre. Now, it was down to VND16 million ($762), excluding value-added tax, he said.

Other investors, while not directly cutting down prices, are offering attractive “presents” to buyers of their apartments.

A Dau Tu (Investment Review) newspaper report says that from the middle of this month to the middle of next month, customers buying apartments from The Flemington project in District 11 will receive a free furniture design package valued at VND1 billion ($47.000).

Project Ventura in District 2 is also offering customers a VND500 million ($24,000) cash gift for those who buy their apartments from now until the end of next month.

In Ha Noi, the Mai Linh Investment Joint Stock Company has decided to cut prices of its Golden Palace apartments by 35 per cent to VND20.5 million per one square metre.

Apartment prices in the Ha Do Parkview complex in Cau Giay District have declined from VND29.5 million ($1,400) in September to VND22.2 million ($1,000) per one sq.m.

While difficult economic conditions and pressure from banks for repayment of loans are cited as the main reasons for the falling prices, there seems to be no move by investors to tap the low-income housing market as suggested by the Government.

The government had suggested that investors modify their apartment designs to make them more affordable to lower income people.

For now, the latest reduction in prices as well as other incentives offered by developers have failed to animate the stagnant market.

Minh said that interested buyers were expecting prices to fall still further.

Hotel, house building ticks over in Nha Trang

The third quarter saw five three-star hotels with 372 rooms enter the market, increasing the total three- to five-star stock by 7 per cent compared with the previous quarter, to more than 4,430 rooms, according to the latest report from Savills Vietnam.

In particular, the three-star segment’s stock was up 15 per cent quarter-on-quarter.

The report said average occupancy was 68 per cent, 7 percentage points higher than Da Nang’s.

However, it fell slightly by two percentage points quarter-by-quarter due to the performance of new hotels.

The average room rate of the overall market was VND1,621,000 (US$80) per room per night, a drop of 6 per cent compared with the second quarter.

This was due to lower prices offered by new three-star hotels in an attempt to boost their occupancy rate.

In the third quarter, the overall revenue per available room of three- to five-star hotels was VND1,108,000 per room per night, down 8 per cent from the second quarter.

This was mainly due to the overall revenue per available room of each grade falling 4 per cent compared with the previous quarter.

In the first nine months of 2012, the number of visitors to Khanh Hoa Province, where Nha Trang is located, reached more than 1.7 million, up 6 per cent compared with the same period last year.

Of that figure, the total number of foreigners rose strongly by 27 per cent year-on-year, while that of domestic visitors rose only slightly by 1 per cent.

As of the third quarter, 17 three- to five-star hotels were recorded as future projects. They are expected to supply more than 2,700 rooms.

In the fourth quarter, the hotel market was expected to receive two new projects, with a total of 398 rooms.

As of the third quarter, Nha Trang’s total number of villas and townhouses was more than 1,710 dwellings from eight projects.

This included 440 dwellings from the primary market and 1,270 from the secondary market.

In the primary market, the west area of Nha Trang, including wards Phuoc Hai and Vinh Thai, accounted for the largest stock with 78 per cent market share.

Due to the current difficulties in the real estate market, the villa and townhouse sector had a soft performance.

In the third quarter, the absorption rate in the primary market was only 5 per cent.

In the secondary market, the average price dropped sharply by 19 per cent compared with the second quarter.

The price of villas and townhouses varied widely from VND1.3 billion to VND17 billion per dwelling.

Construction progress has become an important driver for a project’s success in the difficult economy.

Currently, buyers prefer projects with completed infrastructure and ready-to-move-in dwellings.

Demand from Ha Noi and HCM City investors has also fallen, while real demand from local buyers drove the market in the third quarter.

Cane farmers struggle to sell crops

Many farmers in the Cuu Long (Mekong) Delta are unable to find traders to sell their sugarcane crop as sugar prices fall and sugar mills reduce production.

Nguyen Van Hai, who owns 3ha of sugarcane in Kien Giang Province’s U Minh Thuong District, is worried as most of his plants have blossomed and he is still to find a trader.

“When it was harvest time, the price of sugarcane was low that my family decided to delay harvesting in the hope that prices would go up later,” he said.

“However, the longer I wait, the more losses I make as the price of sugar is low and I cannot find a trader,” he added.

“The blossoming has made my sugarcane quality reduce by 10-15 per cent and adding to the losses.”

When sugarcane blossoms, its sugar concentration declines and traders buy blossomed sugarcane at lower prices.

Nguyen Van Tam of Hau Giang Province’s Vi Thanh City has only sold 0.5ha of 1.5ha of sugarcane for VND800 a kilo.

Tam has not been able to find a trader for the remaining crop.

“At this time last year, farmers here had finished planting a new crop. This year, the harvest is very slow,” he said.

Le Van Doi, deputy director of the Hau Giang Department of Agriculture and Rural Development, said the province harvested 12,87ha of the total 14,28ha of sugarcane in the locality. “This year’s low prices mean mills are not operating at full capacity and the harvest is happening slowly,” he said.

Nguyen Hoang Ngoan, deputy general director of the Can Tho Sugar Joint Stock Company (Casuco), said despite it being the year-end and the demand for sugar to make confectionary and soft drinks was large, prices were very low.

The price of sugar is now VND14,200 a kilo, a reduction of nearly VND5,000 against the same period last year.

“At this price, the company suffers a loss of VND500 for every kilo of sugar it produces,” he said.

However, Casuco was still trying to maintain production and consume sugarcane from farmers, he said.

Sugarcane farmers and sugar mills will continue to face several difficulties next year, experts say.

Tran Dat Duy, director the Hai Van Company, which plants hundreds of hectares of sugarcane in the Long Xuyen Quadrilateral, said: “The sugar sector is in a crisis cycle.”

“The price of sugarcane is low and it is difficult for farmers to sell their crop as sugar mills are reducing purchases. Farmers will switch to other crops if they cannot earn profit,” he said.

Doi said it was possible that the area under sugarcane cultivation in Hau Giang would reduce for the coming crop as many farmers already switched to rice and other crops.

Nguyen Hai, general secretary of the Viet Nam Sugar and Sugarcane Association, said despite its co-operation with relevant agencies and companies to prevent smuggling of sugar as well as sugar trade fraud, the situation had not improved.

About 300,000-400,000 tonnes of sugar is illegally brought into the country at prices VND3,000-4,000 a kilo cheaper than domestically produced sugar, according to Hai.

“When there is a sugar surplus, the price will fall, mills will reduce production and farmers will have to bear the brunt,” he said.

Mandarin growers plan for fruitful Tet holiday

Farmers in Dong Thap are making efforts to ensure Lai Vung mandarin oranges are ready for the coming Lunar New Year holiday, which begins in mid-February.

The reddish mandarin orange has become the trademark fruit grown by local farmers in Lai Vung District due to preferable soil and weather conditions.

The district has about 1,100 hectares of mandarin orange, which provides employment and sources of livelihood for many households.

It plans to provide about 50,000 tonnes of mandarin orange for the market this coming Tet season. One hectare of oranges generates up to VND200 million (US$9,500).

According to district authorities, this year farmers have learned how to apply techniques that help prevent insects damaging crops.

Trinh Minh Tam, one of the farmers in Long Hau Commune, said his garden was protected within a flood-proof system and is expected to generate a bumper crop.

According to Tam, prices for the mandarin this year went up from VND10,000 to an average of VND17,000-19,000. His household is expected to earn about half a billion dong for the season. Other farmers say they have learned how to make sure the mandarin ripens in time for the Lunar New Year, when it is required to supply oranges for three nearby regions.

Most have had traders come and buy the fruit directly from their farming areas.

2012: Year of records for agriculture

In the context of difficulties in 2012, agriculture sector has managed to maintain its growth rate and is striving to become a sustainable and high-quality economic sector.

The value of agro-forestry and aquaculture production is estimated to increase 3.4% in 2012, in which agriculture grows 2.8%, forestry 6.4%, and aquaculture 4.5%.

Viet Nam is now proud of for a cultivating area of 7.75 million hectares of rice, producing 56.3 quintals/ha and a yield of 43.7 million tons, and exporting over 8 million tons.

Industrial crops and fruits increase in terms of cultivating area and output: coffee 1.3 million tons (up 1.2%), rubber 863,600 tons (up 9.4%), and tea 923,000 tons (up 5%). At least 4.3 million tons of meat are produced, up 2.5%. Marine products reach 5.7 million tons, up 5.2%.

The sector has earned a total export turnover of US$27.5 billion, increasing 9.7% and making a trade surplus of US$9.2 billion.

Agricultural and rural infrastructure continue to be upgraded and modernized with the total capital of nearly VND 42 trillion. The poverty rate in rural area has decreased by 2%.

At an online meeting between the Ministry of Agriculture and Rural Development and local governments on December 28, Deputy PM Hoang Trung Hai recognized that agriculture has played an important role in improving the country’s trade balance, with five export items of over US$1 billion each.

He said that, to continue its role as a core of socio-economic development, the agriculture sector should make use of its competitive advantages, apply technological advances, produce more high-quality goods and strive for sustainable development.

In 2013, the sector plans to grow by 2.8-3%, raise production value by 3.7-4%, earn US$28.5 billion in exports, and provide clean water to 82% of rural residents.

To develop a high-quality commodity agriculture, according to Deputy PM Hai, the sector should pour investments in better varieties and breeds, modern techniques and technologies. It is necessary to encourage large-scale production modes and processing industries, said the Deputy PM.

Positive signs recorded in 2012

The Vietnamese economy still showed a number of positive signs despite domestic and global economic hardships.

Reasonable GDP growth

The gross domestic product (GDP) was estimated to grow at 5.03% this year, the lowest rate since 2000, according to recent figures released by the General Statistics Office (GSO).

However, the growth rate was described by the GSO Director-General as ‘reasonable’ with 4.64% in Q1; 4.80% in Q2; 5.05% in Q3 and 5.44% in Q4.

Specifically, the agro-forestry and fishery sector expanded by 2.72%, industry and construction up 4.52%, and service up 6.42%.

One-digit CPI

The average consumer price index (CPI) was estimated to increase 6.81% compared to over 18% last year and met with the goal set by the National Assembly.

The success came from a string of important and urgent solutions, including the tightening of credit, limited money supply, restructuring of the banking system’s operations. The decrease of the index was also attributed to lower purchasing power.

Surging exports

The GSO reported that export turnover would exceed US$114.6 billion in 2012, up 18.3% against 2011.

The export value mainly came from foreign direct investment (FDI) sector, which earned nearly US$72.3 billion in revenue, up 31.2% year on year.

However, the FDI sector’s main exports include electronics, computers and components, phones, garments and footwear, thus real profits were low.

Return of first trade surplus

The country has achieved a trade surplus of US$284 million in 2012 after nearly two decades.

Export turnover for the year totaled US$114.631 billion, an increase of 18.3% over last year while import revenue reached US$114.347 billion, representing a rise of 7.1% against the same period last year.

The trade surplus was attributed to the high growth rate of exports, which nearly doubled the goal set by the National Assembly, while import growth rate was three times lower.

New record of int’l arrivals

Amid global economic hardships, the flow of foreign arrivals to Viet Nam was estimated at 6.85 million, posting a year-on-year increase of 9.5% and the ever highest rate.

Noticeably, the number of international tourists also hit new record of 4.17 million, accounting for 60.9% of the total figure.

China took the lead with roughly 1.43 million; followed by the Republic of Korea 701,000 up 30.7%; Japan 576,000 up 19.7% and the US with 440,000 up 0.9%./.

Overseas remittance to HCMC hits USD4.1 billion

Overseas remittance to Ho Chi Minh City in 2012 reached USD4.1 billion, a 15 percent increase from 2011, the majority of which were from the US and Europe, according to a report by the State Bank of Vietnam (SBV) branch in the city.

SBV’s HCMC branch said that the volume of overseas remittance exchanged at the bank was 34 percent in 2012, while the figure was only about 15 percent in 2011. This figure showed stronger confidence in the Vietnam dong, and the stable exchange rate through this year has kept down demand for foreign currency.

Volume of overseas remittance put into real estate in 2012 was about 23 percent, much lower than last year’s rate of 52 percent. This helped put more overseas remittance into production and businesses, stabilising the exchange rate through 2012./.

WB: Vietnam’s economy to recover to 5.5% in 2013

While Vietnam is enjoying relatively stable macroeconomic conditions, its economy is slowing down in absence of tangible progress on the restructuring agenda, said a recent update on Vietnam’s economic developments prepared by the World Bank in Vietnam.

Following that, Vietnam’s economy is projected to grow at 5.2% in 2012, its slowest growth rate in a decade. The economy is expected to recover to 5.5 % in 2013.

Between August 2011 – November 2012, the year-on-year inflation fell from 23% to 7%. Health and medical services, energy, education and transport (sectors where prices administratively controlled) have experienced higher and more volatile inflation than those sectors where prices are determined mostly by market forces.

The World Bank estimated the total export turnover between January and October 2012 is around USD93.5 billion, an increase of 18.4 % from the same period last year. In 2012, the update forecasted a record in the highest rate of export growth of Vietnam among developing nations in East Asia.

Imports have slowed down significantly given the sluggish growth. Specifically, import spending in the year to October is estimated at USD93.8 billion, up 6.8 % compared to 26 % in the same period of 2011.

Besides, the country is expected to post its largest ever trade and current account surpluses. The trade deficit was only 0.4 % of GDP in 2011 and is expected to increase to a surplus of 4.7 % this year.

The current account balance has improved, from a huge deficit of 11.9 % of GDP in 2008 to a minor surplus of 0.2 % in 2011 and is projected to report a record surplus of 2.7 % in 2012.

“Revenue in the first three Quarters declined by 0.6 % compared to the same period last year. However, government expenditure has remained on track. Inefficiencies in state-owned enterprises, banks, and public investments have pulled down Vietnam’s long-term growth potential. The nation has prioritized reforms in these areas, but progress needs to accelerate”, the update said.

Hydropower burst spurs on EVN

A sharp hike in hydro-power price has helped Electricity of Vietnam (EVN), the nation’s sole power distributor, wrap up 2012 with a bang.

In 2012, the power sector churned out around 117 billion kWh in total, of which 53 billion kWh came from hydropower plants, 21.2 billion kWh from coal-fired thermo-power plants, 40.2 billion kWh from gas-fuelled turbines, 159 million kWh from oil-fuelled thermo-power plants (79 million kWh alone from plants fuelled with FO oil) and 2.7 billion kWh from import, according to EVN’s deputy general director Dinh Quang Tri.

Meanwhile, in light of the power supply and power system operation plan regulated in Ministry of Industry and Trade’s Document 6785/QD-BCT dated December 23, 2011, total power output generated by local power plants and from import in 2012 would amount to 120.8 billion kWh, up 10.89 per cent against 2011.

Of this amount, 45 billion kWh will come from hydropower plants, 45.7 billion kWh from gas-fuelled thermo-power plants, 24.7 billion kWh from coal-fired thermo-power plants and 506 million kWh from oil-fuelled thermo-power plants (271 million kWh alone from FO-fueled plants) and 4.65 billion kWh from import.

There was a big divergence in actual power output and the production plan with a sharp hike in hydro-power actual output—about eight billion kWh more than projected.

Significantly, hydro-power is the cheapest among diverse power sources, averaging VND507 per kWh (based on the power cost at EVN’s multi-purpose hydropower plants) against the rate VND1,037 per kWh at gas-fuelled thermo-power plant and VND4,692 per kWh at oil-fuelled thermo-power plants, according to Tri.

Soaring hydro-power output and remarkably sliding output from coal-fired, gas-fuelled and oil-fuelled thermo-power plants had contributed to bolstering EVN business efficiency.

Accordingly, in late December 2012, the power sector reportedly posted estimated profits in the range of VND3.5-4 trillion ($166-$190 million).

In 2011, EVN’s accrued losses from power generation fell to VND5.297 trillion ($252 million) instead of an estimated VND11 trillion ($523 million), also thanks to a sharp hike in hydropower output and sliding output from other thermo-power sources.

Malaysia levies anti-dumping tax on VN BOPP film

Malaysia has levied anti-dumping taxes on Vietnam’s Biaxially Oriented Polypropylene (BOPP), a kind of packaging film used in food processing, said a state agency under the Vietnamese Ministry of Industry and Trade.

The taxes, ranging from 10.41 per cent to 21.43 percent, are imposed by Malaysia’s Ministry of International Trade and Industry (MITI), and effective between December 24, 2012 and April 22, 2013, the Vietnam Competition Agency (VCA) said.

This is, however, only a temporary sanction the MITI is applying for Vietnam and four other Asian countries, the VCA added.

Earlier in July, Malaysia initiated an anti-dumping investigation into BOPP imported from Vietnam, Taiwan, Thailand, China and Indonesia in the time span from January 1 to December 3, 2011.

The inspection was launched after the plaintiff San Miguel Yamamura Plastic Films Syndicate said the Malaysian BOPP industry was suffering serious economic damage from foreign dumping activities.

In mid-December, the US Department of Commerce cancelled an anti-dumping duty administrative review on frozen fish filets from the An Giang Fishery Import and Export Company (Agifish), VNA reported.

In addition to filets, frozen shrimp imported from Vietnam is subject to anti-dumping duties. The US conducts an anti-dumping duty review on Vietnamese exports every year, with the first done in 2005.

The US, meanwhile, confirmed on December 18 the imposition of anti-dumping and anti-subsidy duties on large wind towers imported from China and Vietnam.

The Commerce Department said Chinese and Vietnamese manufacturers sold utility-scale wind towers in the United States at dumping margins of 44.99-70.63 per cent and 51.50-58.49 per cent, respectively, AFP reported.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR

No comments yet... Be the first to leave a reply!