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Gold prices hit VND47.85 mil per tael

SJC gold in HCM City on October 4 reached VND47.55-47.85 million per tael, up VND50,000 from the previous trading session.

In the meantime, SJC gold in Hanoi rose by VND450,000 per tael to VND47.55-47.87 million per tael, a record high ever seen in a year.

On the global market, Kitco gold jumped to US$1.778.8 per ounce, up US$5 per ounce compared to the previous trading session while Comex gold for December delivery showed an increase of US$4.2 to US$1.779.8 per ounce.

Early this week, gold prices reached US$1.791.2 per ounce, the highest level since November 2011.

Vietnam’s trade deficit with China estimated at US$11 bil

Vietnam’s trade deficit with China was estimated at more than US$11 billion in the past nine months.

The General Statistics Office (GSO) said total exports to China reached nearly US$83.8 billion while imports from the country stayed at US$83.7 million.

Currently, China is the largest trade partner which makes up nearly 25 percent of Vietnam’s total import turnover.

Tran Thanh Hai, deputy head of the Import-Export Department under the Ministry of Industry and Trade (MoIT) said there’s a plan afoot to promote exports to China to redress the trade balance between the two countries.

 ADB: Vietnam’s economy to grow at 5.1 percent in 2012

The Asian Development Bank (ADB) has lowered its forecast for Vietnam’s economic growth this year to 5.1 percent, predicting growth of 5.7 percent next year in the context of continual weakness in external markets and domestic credit.

In April, the bank forecast GDP growth of 5.7 percent this year and 6.2 percent next year.

Vietnam has been an export-dependent country relying heavily on the European and US markets, which were also experiencing slow growth, said ADB economist Dominic Mellor, at a press conference in Hanoi on October 3.

“However, there are signs that GDP is picking up due to the cyclicality of GDP, fiscal policy easing and consumption boosted by lower inflation,” Mellor said.

ADB country director for Vietnam Tomoyuki Kimura said that inflation was projected at about 7 percent this year, well below the previously projected 9.1 percent due to a sharp decline in food prices and weaker-than-anticipated domestic demand.

Stabilization measures taken last year dampened demand, slowing the trajectory of economic growth, Kimura said. GDP therefore grew at a modest 4 percent year-on-year in the first quarter and 4.7 percent I the second quarter, resulting in growth of just 4.4 percent in the first half of the year.

Next year, inflation is expected to rise to 9.4 percent because of increases in global food prices, recovering domestic demand, and fiscal policy easing, he added.

Kimura acknowledged important steps taken to date to restructure the nation’s banking system, such as the mergers of several weak banks. However, he raised concerns over the risks of rampant cross-holdings among banks.

While a large bank with a stake in smaller ones can support the liquidity of these banks in difficult items as well as these banks in improving governance, Vietnam needs clearer regulations on the issue to ensure banks are transparent in publishing these cross-holdings, he said.

The banking sector has been vulnerable as businesses have struggled and property prices fallen, putting bank earnings under pressure, Mellor said.

“Reported capital adequacy ratios appear adequate, but uncertainties remain due to the scale of bad debts, exposure to State-owned enterprises and cross holding between banks.”

Interest rates need to be targeted at stabilizing the value of the dong, which can be bolstered by strong trade and capital flows that help improve foreign reserves, Mellor added.

The ADB’s Asian Development Outlook Update said merging weaker banks is an important step. The authorities have also considered establishing a State asset management company to buy bad debts from banks, but no progress on the proposal is evident, the report noted.

To attract foreign capital and expertise into banks, the Government is considering an increase in the cap on foreign ownership in credit institutions. However, strains in the domestic banking system and reduced appetite for risk among international banks suggest that drawing substantial foreign investment might be a challenge at this time. It might also be difficult in the current environment to raise capital through the domestic securities market.

“The focus needs to remain on structural reforms,” said Kimura, adding that a Government commitment to a credible reform roadmap with time-bound actions should help revive lending and improve market confidence.

He said confidence in the Government’s willingness to address structural reforms will be enhanced with more data on the progress these reforms are achieving towards targets. Greater disclosure of financial information on State-owned enterprises and banks will provide a strong signal to the market that the Government is committed to reform.

India, Vietnam share aquaculture experience

The Indian Minister of Agriculture Sharad Pawar had working sessions with leaders of several research institutes for aquaculture, rice and fruit trees and representatives of the Mekong Delta Economic Cooperation Forum, in Ho Chi Minh City on October 3.

He showed interests in Vietnam’s fish farming experience as he saw a lot of potential for the two countries’ cooperation in the field and in agriculture generally.

Minister Pawar noted that agriculture plays an important role in both Vietnamese and Indian economies and suggested that both sides should work out specific programmes and plans to step up their linkages in areas of their strength.

Bui Ngoc Suong, Deputy Head of the Southwest Steering Board expressed his hopes that he Indian Ministry of Agriculture will encourage Indian businesses to participate in the Mekong Delta Economic Cooperation Forum regularly in the future.

He also said he wants to see increased cooperation between the two countries’ businesses in researching, producing plant varieties and manufacturing agricultural machines and bio-technology.

Japanese businesses keen to improve business environment in Vietnam

Representatives from the Japanese business community in Vietnam have expressed a desire to improve the country’s business environment.

At a seminar held in the southern province of Binh Duong on October 3, Japanese businesses said they are pleased with Binh Duong’s investment environment, crediting the maintenance of political security with facilitating businesses’ production activities.

Some representatives urged the province to strive for an even healthier and more advanced investment environment. They noted that hi-tech sectors and the region’s industrial parks enjoy preferential tax policies for 3-4 years compared to the 8 year longevity of similar Thai initiatives.

Representatives from the Japanese Business Association in HCM City said that the variations in preferential policies across provinces are forcing some Japanese investors to reconsider their capital and investment expansion decisions.

Other representatives asked Binh Duong to devise an environmental protection roadmap so businesses can actively participate in technology transference that could ultimately assist with reducing environmental pollution.

Le Thanh Chung, Chairman of the Binh Duong provincial People’s Committee, spoke highly of the Japanese business community’s opinions, promising they will be considered as part of the province’s attempts to improve its investment environment.

According to a report from the provincial Department of Planning and Investment, Binh Duong has so far attracted 167 Japanese investment projects with a total capitalization of over US$3.1 billion.

HCM City hosts int’l furniture and handicraft fair 2012

The International Furniture and Handicraft Fair 2012 (Expo 2012) opened at the Tan Binh Exhibition and Convention Centre in Ho Chi Minh City on October 3.

The four-day event attracted more than 100 businesses showcasing their handicraft products at nearly 300 booths.

Trade promotion centres from Dong Nai, Binh Duong, Long An, and Ninh Binh provinces, as well as many other handicraft cooperatives, participated in the event.

Le Van Khoa, Vice Director of the HCM City Department of Industry and Trade, said the fair acts as an important bridge linking domestic timber and handicraft businesses to potential foreign partners and give them the opportunity to boost exports.

In his opening speech, Tran Quoc Khanh, Deputy Minister of Industry and Trade, said he hopes participating businesses will be successful in the promotion of new products, the improvement of marketing strategies and negotiating capacity, and the signing of new contracts.

Japanese appointed VCB deputy general director

Yutaka Abe, a Japanese national, has been appointed as Deputy General Director of the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank or VCB), as of September 30.

According to the Lao dong (Labour) newspaper on October 3, the appointment is in line with the stock purchase contract between Vietcombank and the Japan’s Mizuho Corporate Bank Ltd.

Abe is also a member of the bank’s board of directors.

Seven farm products among top export earners

Seven farm products earned more than US$1 billion each in the past nine months, according to the Ministry of Industry and Trade (MoIT).

They included seafood, coffee, rubber, rice, cashew nuts, cassava, and timber.

According to the MoIT’s report, Vietnam fetched US$1.061 billion from 3.453 million tonnes of cassava and US$4.5 billion from seafood exports.

The US, Japan and the Republic of Korea accounted for 19 percent, 15.1 percent and 7.9 percent of Vietnam’s total seafood exports, respectively.

Developing support industry for automibile sector

Support industry plays a crucial role in providing fresh impetus for the development of the automobile sector and attracting foreign investment.

However, with support industry very much in its infancy, domestic automobile enterprises tend to import rather than assemble and produce cars.

According to the Ministry of Industry and Trade, locally-made or –assembled cars can meet about 68 percent of the domestic demand. But, the average proportion of locally-made parts in use remains low, under 15 percent for under-nine-seat cars compared to the set target of 50 percent and 30-40 percent for above-ten-seat cars and trucks compared to the expected 60 percent.

Honda Vietnam currently takes the lead in using locally-made parts (10 percent), followed by Toyota (7 percent), Suzuki (3 percent), and Ford (2 percent).

The Industrial Policy and Strategy Institute under the Ministry of Industry and Trade (MOIT) puts this down to the development of support industry on a small scale.

Vietnam’s support industry businesses can produce only a small number of simple parts such as trunks, pedals, bench seats, tires, batteries, antennas, and electrical wires among 20,000-30,000 parts needed to make a car. As domestic automobile enterprises have to import many parts from foreign countries, cars on sale in Vietnam are more expensive than elsewhere in the world.

Tran Ba Duong, President and CEO of Truong Hai Auto Joint Stock Company says the auto sector planned to increase the use of locally-made parts to 40-60 percent (including engines and gearboxes) by 2010 to meet 60-80 percent of the domestic demand.

However, its plan came a cropper with none of high-tech parts such as engines and gearboxes ever produced domestically, he says.

Nowadays, in a modern production chains, a finished product is based on co-ordinated efforts by businesses invloved.

In Vietnam, there are at least 300 enterprises capable of joining the global supply chains. But only 50 of them are in the auto industry, compared to 400 in Malaysia and 2,500 in Thailand.

Despite preferential policies for the automobile industry, 90 percent of auto parts are still imported from foreign countries.

Ngo Van Tru, Deputy Director General of the MoIT’s Heavy Industry Department, cites some barriers against domestic automobile production, one of which is the low purchasing power in a small market that prevents foreign spare-parts makers from investing in Vietnam.

Other factors include Vietnam’s poor infrastructure and urban management and the excess of supply over demand in the world market, he says.

In the context of global integration, it is no easy task for Vietnam to develop the automobile sector when it is lagging decades long behind the EU, Japan, the Republic of Korea, Malaysia and China.

Even worse, businesses seem no longer interested in investing in the support industry as the car import tax will be cut down to zero percent in 2018. If there are no new incentive policies for the automobile sector, it is very likely that major FDI enterprises will withdraw from the Vietnamese market, sooner or later when the import tax for ASEAN Free Trade Area drops to 50 percent in 2014.

Vietravel listed among top 16 leading Asian travel agencies

Vietnam’s only representative, Vietravel, will officially receive the Best Travel Agency-Vietnam award and be recognized as one of the top 16 leading Asian travel agencies in Bangkok on October 4.

This is the second consecutive year Vietravel has been honoured within the framework of the TTG Travel Awards 2012 voted by TTG Asia, TTG China, TTG Mice and TTG-BTmice China magazines.

This year, there are 81 TTG Travel Awards in four categories, compared to ten presented for the first time in 1989.

Founded in 1974, TTG Asia is a leading travel magazine with 26 publications a year. The magazine covers travel agencies, tour operators, hotels, national tourism organizations and airlines in the world.

Finance body warns on inflation, interest

The National Financial Supervisory Committee proposed more attention be paid to the monetary market, warning in a recent report to the Government that the economy had seen alarming signs when it came to interest rates and inflation.

The report said that since the beginning of September, the mobilising interest rate for long-term deposits in some banks exceeded the cap set by the State Bank of Viet Nam (SBV) to reach 12-13 per cent, demonstrating that several banks faced difficulties in liquidity.

Financial and banking expert Nguyen Dai Lai said that some banks increased mobilising interest rate because their liquidity was low.

The interbank monetary transaction was also slowing down with a 60 per cent decrease in total volume in September, forcing the SBV to raise more flexible policies to support bank liquidity even though the difficulty was just temporary.

According to the committee, the Government should focus on accelerating the interbank monetary market to solve banks’ liquidity problems. The SBV should intervene only when the market failed to regulate itself.

Measures to prevent excessive interest rates were also needed, according to the report, which pointed out that the short-term measures, together with efforts to solve bad debts and restructure banks and credit institutions, would help tackle the current problems of the monetary market.

Meanwhile, possible impacts of the SBV’s policy to stop the gold mobilisation and loan of commercial banks from November 21 must be studied carefully while gold-related policies such as the rights of gold owners and keepers should be made clear.

Price control was particularly important this month after the highest consumer price index (CPI) since May 2011 was recorded last month, surging 2.2 per cent from August.

Axe falls on dozens of slow tourism projects

Three provinces in the central coastal region are expected to revoke a number of investment licences for long-delayed tourism projects, according to local officials.

In Quang Ngai Province, an area known for its beautiful coastline and scenic spots, officials said that 76 licensed projects have not started construction.

Last year, the My Khe Tourism and Resort Complex lost its investment licence after provincial authorities granted a licence in 2008.

Authorities had given local company Anh Sao Company Limited an investment licence to build the My Khe Complex, which was to include a five-star hotel in the coastal areas of Tinh Khe and Tinh Ky communes in Son Tinh District.

However, little work had been done on the 1,000ha of land that was leased to Anh Sao in 2009. Provincial officials said the land was becoming polluted.

Since 2000, Quang Ngai Province has licensed many large-scale resort projects worth millions of dollars.

“We’ve reviewed tourism projects and recently decided to withdraw certificates for 11 projects due to very long delays,” said Cao Khoa, chairman of the province’s People’s Committee.

Another central province, Binh Dinh, has granted licences to nine tourism projects since 2005, with registered investment capital of more than VND15 trillion (US$750million).

However, only two projects, Vinh Hoi Resort and Hai Giang Tourism Park, have been developed.

The province’s People’s Committee has decided to withdraw licences of investors who intentionally delay investment commitments or lack financial ability.

At least 406 tourism projects have been registered in central Binh Thuan Province, covering a total of 7,300ha with registered capital of VND57.3 trillion ($2.7 billion).

However, construction on 249 projects has not begun, even though land clearance has been completed.

The province’s People’s Committee said it planned to withdraw the investment licences of all long-delayed projects.

Trio of industrial expos kick off in HCM City

Three exhibitions featuring industrial machinery, electronics manufacturing and supporting industries will open today at the Saigon Exhibition and Convention Centre in District 7.

Metalex Viet Nam, organised by Thailand’s Reed Tradex Company, will have 500 well-known brands and names from 25 countries and territories display the latest machinery, tools and accessories used in cutting, drilling, milling, grinding, welding, folding and other operations.

Nepcon Viet Nam, also organised by Reed Tradex, will have 200 firms from 25 countries and territories displaying assembly, measurement and testing technologies for electronics manufacturing.

The third expo, which focuses on supporting industries, will feature more than 100 Japanese and domestic companies in the automobile, motorcycle, electronics and other related industries.

At the show organised by the HCM City Investment and Trade Promotion Centre and Japan External Trade Organisation (JETRO), Japanese firms in Viet Nam will display parts they want to buy, while Vietnamese enterprises can showcase products they need to sell.

According to JETRO, local components only make up 28.7 per cent of Japanese firms’ products, quite low compared to elsewhere in the region.

The exhibition is expected to facilitate an increase in the ratio of made-in-Viet Nam components in products.

The three-day combined show will also see NAO, the world’s smartest humanoid robot, perform in Viet Nam for the first time.

Several seminars and technology presentations as well as business matchmaking and networking events will be held during the combined show that ends on October 6.

Ca Mau sets shrimp production targets

The Cuu Long (Mekong) Delta province of Ca Mau, the country’s largest shrimp producer, has set a target to produce 270,000 tonnes of shrimp this year.

According to the province’s Department of Agriculture and Rural Development, shrimp output reached nearly 200,000 tonnes in the first eight months of 2012, up 12 per cent against the same period last year.

Ca Mau has nearly 270,000ha devoted to shrimp breeding under the extensive farming model.

It also has 5,000ha of industrial shrimp farming, with a average yield of five tonnes per ha for black-tiger shrimp and eight tonnes per ha for white-legged shrimp.

However, farmers are facing several difficulties, including a shortage of baby shrimp, disease outbreaks and hikes in prices for input materials and higher labour costs.

As of May, Ca Mau had about 560 shrimp-fry farms, supplying 7-8 billion shrimp fries a year, meeting only half of farmers’ demand.

To help farmers, local authorities have provided training courses on disease prevention and control, and have encouraged shrimp processors to buy shrimp directly from farmers.

The province has also created preferential policies for shrimp-fry farmers, including soft loans and tax reductions.

Local authorities target to have 900-1,000 shrimp fry farms by 2015, which are expected to produce 12-13 billion of shrimp fries a year.

Central province plans two new ports

Central Thua Thien-Hue Province has made plans to build two docks that will provide shelter for boats during storms in Phu Loc and Phu Vang districts by the end of 2013. The project is estimated to cost VND120 billion (US$5.8 million) of Government funding.

The province currently has nearly 30 docks located in coastal communes and lagoon areas, and many of these are in makeshift condition.

Around one third of nearly 1,750 boats operating in the sea, and many others working in the rivers or lagoons in the province have no shelter for docking during storms, according to authorities.

The local administration has also said that in the context of the changing and complex weather today, speeding up the work to build the docks would be a sound measure to minimise potential damage to properties and human lives.

The province’s Agriculture and Rural Development office said that some small-sized docks would be built or upgraded with investment between VND1-2 billion ($47,600-95,200).

Last year, Phu Hai dock, worth VND42 billion (US$2 million), was built and put into operation in an area of 11.6 ha in Phu Vang District, becoming the province’s biggest and most modern dock. It includes a wave prevention embankment, a wharf, a logistics service system and has the ability to provide shelter for 500 boats.

However, the dock was designed specifically for boats or ships with a capacity below 90 CV, meaning many larger boats have had to move further when looking for a place for docking.

Thuan An town in Phu An District has around 230 boats, half of which have to go tens of kilometres upstream to find places to hide from storms in the rainy seasons in Hue City.

In the Tam Giang Lagoon, the construction of many docks has not been implemented yet due to funding difficulties.

The National Centre for Hydro-Meteorological Forecasting yesterday predicted that the eye of storm Gaemi would hit 14.8N and 117.0 E, around 560km east and south-east of the Hoang Sa (Paracel) Islands at 1p.m today.

In the next 2-4 days, they said the storm would move between west and west north-west, at about 15-20km per hour. The storm would continue to cause strong winds and very rough seas in the southern sea areas of the East Sea.

Elevated roads fail to attract investors

HCM City plans to build 34.5km of elevated highways to ease the traffic congestion at a cost of VND56 trillion (US$2.7 billion), but has been unable to attract investors’ interest so far.

The four highways were approved by the Government in 2007. The first will pass through districts 1, 3, Tan Binh, Phu Nhuan, and Binh Thanh; the second through districts 3, 6, 10, 11, Tan Binh, and Binh Tan; the third through districts 1, 3, 4, 5, 7, 8, 10, and Binh Chanh; the last through districts 12, Binh Thanh, and Go Vap.

After failing to attract interest the project is being tweaked for fresh consideration by the Ministry of Transport and Primer Minister.

“The city is considering incentives to attract investors because under the current model of fee collection, investors will only recoup 15-20 per cent of their capital,” Bui Xuan Cuong, director of the Department of Transport, has been quoted as saying by Sai Gon Giai Phong (Liberated Sai Gon) newspaper.

The elevated roads are expected to reduce accidents, ease congestion by 90 per cent, increase the area available for commercial activities, and create a proper transport environment.

“Designers should consider harmonising transport infrastructure and the space available in the city,” Dr Vo Kim Cuong, an executive at the HCM City Master Planning and Development Association, said.

Ten years ago South Korea’s GS E&C was hired to design an elevated road above the Nhieu Loc – Thi Nghe canal, but it withdrew due to a cash crunch.

Traditional designs in need of a makeover

Diversifying designs for Vietnamese handicraft and fine art products is becoming essential for the country’s craft villages to stay competitive in tough times, according to officials and experts.

According to Viet Nam Handicraft Villages Association, the country now has 3,355 craft villages producing 200 product categories, with an estimated 12 million people working in the sector.

Vietnamese handicraft products have been exported to over 100 countries and territories in the world. Between 2000 and 2010, export turnover increased 10 times from US$274 million to $2.8 billion.

However, in the last two years, the global economic slowdown has hit Viet Nam’s handicraft villages badly, resulting in high inventories and sale declines of 30-40 per cent.

Dao Van Ho, director of the Agriculture and Rural Development Ministry’s Agriculture Trade Promotion Centre, said the decline was due to an absence of creativeness in Vietnamese designs and the shortage of professionally trained designers.

He said that most of the designs were made tens of years or even hundreds of years ago and have become outdated.

In other cases, domestic handicraft producers were still passive as they made products with ordered designs and patterns or “imitated” ones.

Director of the Centre for Handicraft Designing Bui Van Vuong said that changing demand called for changes in designs.

Compared to handicraft producers in other countries like China, South Korea and Malaysia, Vietnamese makers are equally skillful but less sensible to market changes, he said, adding that foreign producers were more professional in tems of material processing, designing and packing.

Meanwhile, carpenter artisan Nguyen Van Duc from northern Nam Dinh Province’s La Xuyen Village said that 90 per cent of handicraft workers in his village did not undergo any design training course. They just learnt from experienced artisans from former generations, so it was difficult to create new designs.

President of Ha Noi Embroidery Association Mai Van Huong said that handicraft producers should pay more attention to three key points: design and pattern, material and target market.

Vietnamese designs must present the country’s cultural values, urging the combination of designers’ talent and technological application. Time-consuming processed materials can be replaced by those made by machines, which help speed up production and reduce costs.

“It is crucial to study export markets, including their customs, tastes and product use,” Huong said.

He also recommended establishing design classes in craft villages and mechanisms to help trained designers claim their products and have their patent rights ensured.

Meanwhile, in the last two days, the Industry and Trade Ministry’s Trade Promotion Department and southern An Giang Province’s People’s Committee held a conference aiming to provide local handicraft producers with Governmental policies and suggestions to overcome these difficult times.

The department deputy head Bui Thi Thanh An said greater access to policies, market information and shared experiences was expected to help handicraft producers raise competitiveness.

Lecturer Do Duc Khai from HCM City Economics University said a major problem for handicraft producers, particularly households or small to middle sized enterprises (SMEs), was finding capital to invest in production.

According to a survey by the Ministry of Planning and Investment, only a third of SMEs can access loans, while another one-third find loans difficult to obtain and the final third cannot get them at all.

Meanwhile, a study by the Viet Nam Chamber of Commerce and Industry shows over 74 per cent of enterprises seek capital by asking for bank loans.

“Such thought is hindering the flexibility of enterprises,” he said.

Dr Pham Quoc Luyen from HCM City Marketing University said there were many reasons for enterprises’ difficulties in accessing bank loans but the major one was that failure to create a business plan, complete with deposited assets and a financial overview.

He suggested enterprises mobilise capital through issuing corporate bonds, public-private partnerships or via investment funds.

For handicraft enterprises, brand communication and distribution played a vital role, he said, noting four basic steps to establish distribution channels.

They were market study, market approaching measures, market share holding and human resource development.

New turbine in Bac Lieu’s wind-power project ready for generation

The 10th turbine in southern Bac Lieu Province’s sea wind-power project was installed successfully two days ago, completing the first phase of the project.

The turbine is made of titan steel, weighs nearly 210 tones, and measures 80 meters in height and 4 meters in diameter.

These turbines were provided by the US firm General Electric (GE) and have capacity of 1.6 megawatts each.

The Bac Lieu-based Cong Ly Construction and Trading Co Ltd has relied on the efforts of 1, 000 workers over the past 18 months to install the turbines.

Under the project, 62 turbines with total capacity of 99.2 MW will be installed at a total cost of VND5,200 billion ($US250 million), which is sourced from loans provided by the US Import and Export Bank.

In the second phase, contractors will install 52 other turbines which will be capable of producing 400 million kWh of electricity per year when fully operational.

The wind-power project in Bac Lieu is getting fast-tracked so it can start supplying power to the national grid as early as possible.

Made-in-Viet Nam rice secures firm niche

Viet Nam exported approximately 6.4 million tons of rice in the first nine months, up 7.1% against the same period last year, according to the General Statistics Office (GSO).

However, it saw a year-on-year decline of 3.2% in value to US$2.87 billion.

The Ministry of Agriculture and Rural Development (MARD) forecasted that Viet Nam would ship 7.1 million tons of rice in 2012, equivalent to the record made last year.

The Viet Nam Customs reported that Viet Nam’s import markets shifted dramatically in the first eight months of the year.

There are 26 big customers, with 15 importing over 20,000 tons each and 9 buying over 100,000 tons each.

China became the largest rice importer of Viet Nam. China, Hong Kong and Taiwan all imported almost 1.9 million tons of rice, accounting for around a third of Viet Nam’s total rice export volume.

Southeast Asia is a big market for Vietnamese rice. The Philippines, Malaysia, Singapore, Timor-Leste and Brunei brought in over 1.93 million tons of rice from Viet Nam.

Africa is another big and potential rice import market of Viet Nam.

Rice is a key commodity of Viet Nam. The country is located close to high-populated countries which are pursuing industrial and service development. In the long term, Vietnamese rice would not only occupy bigger markets but also have high value.

In spite of lower export value and volume in the first nine months of 2012, rice still entered the US$1 billion-valued export line club and joined the list of 11 commodities making over US$2.5 billion in export turnover.

Experts suggested the necessity of maintaining rice cultivation land, providing direct assistance to peasants and prioritizing industrialization and modernization to heighten the status of made-in-Viet Nam rice./.

Transport firms look for the fast lane

How to streamline leading transport sector businesses is becoming a vexed question.

The Ministry of Transport (MoT) has just submitted Document 7676/BGTVT-QLDN to the prime minister on reorganising transport sector leading businesses.

Accordingly, the document proposed the MoT exercise state ownership right towards four major corporations and groups Vinashin, Vietnam Railway Corporation, Vietnam Airlines and Vinalines which were founded by the prime minister.

“The move is to scale up role and responsibilities of the authority ministry towards businesses,” said MoT Minister Dinh La Thang.

Business shake-up plans of these four corporations and groups were appraised by the MoT and now source inputs from relevant ministries and sectors before submitting to the prime minister for approval, according to a representative from the Committee for Transport Sector Enterprises Renovation and Management.

The proposal is central in the proposed plan to reshuffle transport sector’s state-owned groups and corporations under which the state was proposed to continue holding 100 per cent chartered capital at eight groups and corporations whereas the MoT exercise state ownership right under decentralisation from the government.

These eight businesses are Vinashin, Vietnam Railway Corporation, Vietnam Air Transport Management Corporation, Vietnam Airports Corporation, Northern Vietnam Maritime Safety Corporation, Southern Vietnam Maritime Safety Corporation, Vietnam Expressway Corporation and Cuu Long Infrastructure Investment Development and Management Corporation.

Besides, the MoT proposed equitising 12 corporations during 2012-2015. In respect to who will take care of state ownership right at these 12 corporations the MoT presented two scenarios – the State Capital Investment Corporation or the MoT.

About the fate of transport sector’s construction corporations, Vietnam Waterway Construction Corporation general director Luu Dinh Tien assumed top target in restructuring these businesses would be striving to hike their chartered capital to about VND500 billion ($23.8 million) in late 2012 and around VND1 trillion ($47.6 million) by 2015, the deadline for parent companies to finalise shake-up plans.
Restructuring orientations of four leading groups and corporations founded by the prime minister:
* Vinashin: Just maintaining shipbuilding and repair businesses with development potential which will be operating as joint stock companies. In the near-term, the parent company will be wholly owned by the stat to govern investment capital into subsidiaries and affiliates.
* Vietnam Airlines: Strongly restructuring parent company and subsidiaries, priority given to parent company’s equitising plan. Subsidiaries will be turned into joint stock companies with minimal stake put into insurance, aviation fuel businesse and divesting from businesses staying outside aviation transport areas.
* Vinalines: Embarks on comprehensive restructure plan to help the business undergo difficulties in 2012-2013 period, achieve stable and balanced growth in 2014-2015, and create growth momentum for 2016-2020 period. Parent company must embark on equitising before 2015.
* Vietnam Railway Corporation: Founding two core businesses, one takes charge of managing and exploiting railway infrastructure under the model of a wholly state owned limited liability company and the other operating railway transport services under the model of a joint stock company.

HSBC, Cathay Pacific cut deal to offer discounted airfares

HSBC Vietnam and Cathay Pacific on Tuesday signed a cooperation agreement to offer discounted airfares for customers buying flights this month using HSBC credit cards.

HSBC card holders when buying flights from HCMC and Hanoi to London, Paris, Seoul, Pusan, Sydney and Melbourne will enjoy a discount ranging from 15% to 40%, which is applicable for flights departing from November 1 until the end of next May.

Specifically, the discounted airfare for flights from HCMC to London and Paris is only US$560, or US$410 for flights to Sydney and Melbourne. Customers will have to pay only US$405 when flying to Seoul or Pusan from Hanoi.

If buying Premium Economy tickets from HCMC and Hanoi to Paris, Frankfurt or New York and San Francisco on flights of Cathay Pacific by November 30, customers will receive a free economy-class return ticket for HCMC-Hong Kong or Hanoi-Hong Kong flights.

Besides, customers buying business-class tickets to fly from HCMC to Europe will be given either two economy-class return tickets from HCMC to destinations in China or an economy-class return ticket to Hong Kong on flights of Cathay Pacific or Dragon Air.

At the signing ceremony, Godfrey Swain, Head of Retail Banking and Wealth Management of HSBC Vietnam, said that the bank was focusing on developing the consumer finance and wanted to boost consumer spending via credit cards. Therefore, it will offer more promotional programs for HSBC card holders in the coming time.

Tra Vinh Province compensates losses of shrimp farmers

Tra Vinh Province in the Mekong Delta has decided to offer financial assistance of more than VND27.4 billion (US$1.3 million) to shrimp farmers to cover for heavy losses caused by spread of disease.

Of the above amount, VND19.2 billion ($923,000) will come from the state budget and VND8.2 billion ($394,000) from the provincial budget, to support shrimp farmers in Cau Ngang and Duyen Hai Districts.

Shrimp farmers in coastal districts of provinces in the Mekong Delta are suffering unprecedented losses due to spread of a disease that destroyed around one billion farm bred tiger shrimps across 5,754 hectares.

In Cau Ngang District, about 5,724 households suffered losses on more than 3.6 hectares. These households were given assistance of VND17.3 billion ($831,730) and 2,432 households in Duyen Hai District, who faced losses across 2,11 hectares, received VND10.1 billion ($485,576).

This financial assistance is expected to help tide over the bad financial losses suffered from the recent shrimp crop.

According to the Department of Agriculture and Rural Development, more than 28,076 shrimp farmers in the coastal districts of Cau Ngang, Duyen Hai, Chau Thanh and Tra Cu have bred 2.27 billion tiger shrimps over 28,825 hectares, but 1.23 billion over 11,627 hectares died of disease, causing farmers a loss of almost VND2 trillion.

Car sales drop despite promotions

Despite huge offers of discounts and added promotions, purchasing power remains very weak in the country, with many people deciding against buying a car in these hard times, what with additional ownership registration taxes and other taxes imposed on car owners.

Four years ago, car showrooms worth tens of billions of dong mushroomed in Ho Chi Minh City, such as Tran Hung Dao in District 1, An Duong Vuong in District 5, Phan Van Tri in Go Vap District and Cong Hoa in Tan Binh District. Customers flocked these car showrooms regularly.

This golden phase gradually ended in recent years. Showrooms closed down and are now struggling to remain operational.

Phan Thanh Hoa, owner of Phan Hoa showroom in Tran Hung Dao Street in District 1 said in 2007 his family had five showrooms with more than 100 staff  and earned more than VND50 million per month from each store.

However, now because of the economic downturn and various taxes imposed on potential customers, he had to close down four stores and kept only one which is also his residence. Moreover, he said car sales have not increased even though he launched many promotions and offered discounts as well as support for bank loans.

To survive in these hard times, most enterprises reduced prices as much as possible to improve sales. For instance, price of Renault Koleos car made in 2011 slipped from VND1.429 billion (US$68,701) to VND1.25 billion ($60,096) while Renault Fluence from VND1.046 billion to VND830 million.

In addition to discount prices, the store also offered 20 percent discount on service fee, 15 percent on spare parts and free petrol for maintenance.

Due to poor sales performance over the last two months, Toyota Motor Vietnam (TMV), the leading auto firm in the local market, has come up with a special program for clients of Fortuner vehicles by offering buyers of Fortuner V, G and TRD Sportivo free insurance for their cars.

Vietnamese carmaker Truong Hai offers besides discounts, gifts for customers. For instance, any customer buying Kia Morning, Kia Forte, Kia Carens and Kia Sorento will receive equipment and accessories for decoration worth VND27-100 million.

Western Ford in Binh Tan District offers discount prices of all kinds for new launches in 2012. However, Ngo Thanh Tri, head of Sales Department, complained that despite impressive discounts, a year-on-year decrease of 40 percent of customers has been reported.

Toyota Vietnam, Ford Vietnam, Isuzu Vietnam, Mercedes-Benz Vietnam, Honda Vietnam, Samco, Vinamotor and Hino all reported a downtrend.

To solve the problem, VAMA petitioned the government to be transparent in fees for customers especially fee to limit the use of personal vehicles, in an effort to ease congestion and improve traffic order and safety.  Moreover, customers should pay 5 percent of registration fees for cars and 2 percent for trucks.

Total car sales in 2011 reached 170,000 units while only 48,910 cars sold so far this year, a decrease of 32 percent over the same period last year, according to Vietnam Automobile Manufacturers’ Association (VAMA) .

VAMA also forecast car sales this year at only 80,000 units, dropping sharply against the sale of more than 110,000 units in 2011. Low sale of cars are sending enterprises on the verge of absolute bankruptcy and the government has lost valuable foreign exchange currency.  Slow auto sales have led to a sharp fall in tax collection to the state budget of VND6 trillion in the first four months of the year.


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