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Industry still leading tax contributor

The industrial sector continued to be the leading tax contributor on the list of the 1,000 leading corporate taxpayers in Viet Nam, accounting for 66 per cent of total tax payments this year and including an additional 88 businesses from last year.

The so-called V1000 profile, released on Friday in Ha Noi by the Viet Nam Report Co in co-operation with the General Department of Taxation and online newspaper Viet Nam-Net, showed that the tax contribution made by the agriculture sector also sharply increased, with 17 new enterprises on the list in comparison with 2010 and 22 more than in 2009. The total paid by the service sector fell however.

In terms of corporate tax, industrial enterprises also accounted for the highest proportion with 61 per cent while agricultural firms made up 6.5 per cent.

Banking, telecommunications and real estate once again made a big tax contribution to the State Budget, accounting for 21, 20 and 12 per cent respectively out of the total 1,000 businesses.

According to the report, the economy and State Budget still depend on the financial and property sectors despite the downturn they are suffering.

It also revealed that the tax contribution of State-owned enterprises has remained stable as they paid more than half of the amount to the State. Private businesses accounted for 41 per cent of the total while the foreign direct investment sector saw a decrease in the number of enterprises listed.

Five big cities and provinces including Ha Noi, HCM City, Binh Duong, Dong Nai and Ba Ria-Vung Tau continued to top the list. Businesses in Ha Noi and HCM City contributed to three quarters of the total corporate tax.

This has been the third year a list has been announced recognising the contribution of 1,000 businesses in the context of the economic slowdown. The tax contribution of the businesses was VND54 trillion, accounting for 8 per cent of total enterprises operating in Viet Nam.

At a ceremony unveiling the list, Tran Duy Khuong, chief editor of Lao Dong (Labour) newspaper said they would announce the top 50 best workplaces in Viet Nam in June.

PM hails efforts at major steel plant construction launch

Prime Minister Nguyen Tan Dung yesterday attended a ceremony to start construction on the Ha Tinh Formosa steel plant in the Vung Ang economic zone in Ky Anh district, Ha Tinh.

The US$15billion project is one of the largest by the Formosa group of Taiwan (China) in the Vung Ang economic zone.

The project covers 3,300ha and includes a steel metallurgy mill, a seaport capable of receiving 300,000-tonne ships and a 2,100 megawatt thermal electricity plant. It is expected to produce 7 million tonnes of steel ingots in phase one.

Addressing the event, Dung hailed Formosa’s efforts in implementing facilities on time and affirmed that the Government would create favourable conditions for international investors to do long-term business in Viet Nam, including the Formosa group.

The same day, Dung inspected the construction of Vung Ang 1 thermal electricity plant in the Vung Ang economic zone.

Earlier on Saturday, Dung visited central Nghe An province and urged its leaders to create an attractive investment environment to make the most of its potential.

He said Nghe An should pay attention to public administration reforms, eliminate impediment to growth, increase the efficiency of commerce and tourism promotion activities and expand its export market. Nghe An’s comparative advantages included agriculture, forestry, animal husbandry and construction material processing.

During the meeting, provincial People’s Committee Chairman Ho Duc Phuoc briefed Dung on what the province had done this year. He said GDP was estimated at 6.63 per cent, the average annual income per capita was VND20 million (over $950) and 15,000 households had been lifted out of poverty.

Despite its performance, Nghe An was still facing challenges it needed to work on, including weak infrastructure, high population growth rate and rampant drug addiction, he said.

Phuoc said that for the coming year, it aimed to increase GDP to 6.5-7.5 per cent, reduce poverty to under 12.5 per cent and generate jobs for 37,000 people.

Dung said the province should continue to develop education and the healthcare system and maintain public order. Special attention should go to poverty reduction in the western part of the province.

As part of the working tour, Dung paid tribute to President Ho Chi Minh by offering flowers and incense at Kim Lien Memorial Site. He also visited Military Zone 4.

Dong Nai invests in livestock

The southeastern province of Dong Nai, the country’s largest animal husbandry producer, plans to invest VND3 trillion (US$142 million) to develop livestock, poultry and aquatic cultivation through 2020.

The provincial People’s Committee said it had collected opinions about the plan from several departments and agencies.

Under the proposal, the province would establish large-scale cultivation areas to increase the total production of pigs, chicken and aquatic species.

It calls for 2.2 million heads of pig, with a total output of 250,000 tonnes a year by 2020. Farms would account for up to 80 per cent and individual farmers for 20 per cent of production.

The plan also aims to increase the province’s chicken population to 13 million heads, with 95 per cent of them raised on farms.

It will also support the building and developing of hygienic supply chains of pig and poultry meat products and eggs.

By 2020, 30 per cent of the province’s aquaculture area would meet Vietnamese Good Agricultural Practice standards.

Dong Nai currently has a pig population of about 1.3 million heads, according to the province’s Department of Agriculture and Rural Development.

Many pig and chicken raisers in the province have faced severe losses this year as prices have fallen lower than production costs.

Chicken is selling for VND8,000-12,000 per kilo lower than production cost this year.

Disease outbreaks are one of the major reasons behind the price decline. About 60 per cent of livestock in the province are now being raised on farms.

Central growers fear damaging drought

Nguyen Nao finds it hard to believe that it is the rainy season now.

The 72-year-old farmer in the central province of Binh Dinh says that weather conditions at present match that of the summer season.

“I have lived my whole life here, but I have never seen such an abnormal weather situation like this year,” he said.

Nao, a resident of Phu My District, said his area has had just a few small showers from the beginning of the rainy season until now.

Farmers all over the Tay Nguyen (Central Highlands) and central regions are worried about their crops as the prospects of a hurtful drought loom large this year.

In the central region, the quantity of rainfall in many provinces has been much lower than last year, local officials say.

In Binh Thuan, the quantity of rainfall received so far during the ongoing rainy season is just 20 per cent of the same period last year, according to the province’s Irrigation Projects Exploitation Company.

In Quang Nam Province, thousands of families along the Thu Bon River are worried as there has been no flooding so far this year, despite it being the storm season.

Although people in low lying areas face difficulties when the floods come, but they also have highly beneficial impacts. They bring silt into paddy fields and wash alum and salinity out of paddy fields, helping farmers have a good harvest.

Thua Thien – Hue, Quang Binh and Quang Tri provinces, which normally experience at least three to four storms and floods during the rainy season, have drawn a blank this year.

Nguyen Van Bai, director of the Quang Tri Department of Agriculture and Rural Development, said the rainfall in the province was just 1,700mm so far this year while the average annual rainfall in the province was 2,500mm.

In fact, millions of farmers have not dared plant crops because they are unsure of getting enough water.

In Binh Dinh, the possibility of drought occurring during the 2012-13 winter-spring crop and for the whole of 2013 is very high, according to the province’s Department of Agriculture and Rural Development.

The area of paddy fields in Binh Dinh that lack irrigation water for the winter-spring crop is between 3,300-4,300ha, according to the department.

Water levels in Binh Dinh reservoirs now stand at 30 per cent of their capacity.

Le Huu Loc, chairman of the Binh Dinh People’s Committee, said he has instructed the Department of Agriculture and Rural Development and people’s committees at all levels to prepare plans for distributing available irrigation water.

Priority in water supply would be given to households’ daily use, animal husbandry, aquaculture and rice cultivation, he said.

Meanwhile, in the Tay Nguyen (Central Highland) province of Gia Lai, the drought has already caused poor harvests in eastern districts.

Dang Dia, deputy head of the Krong Chro District’s Agriculture and Rural Development Bureau in Gia Lai, said the district has been hit hard for nearly one month now.

Nearly 1,000ha of crops, mostly corn and cotton, have been destroyed because of droughts, he said.

The Ba River, which provides most of the irrigation water for Gia Lai’s eastern districts, is drying up because of several hydropower plants.

Le Thanh Xuan, deputy head of the Gia Lai Irrigation and Aquaculture Sub-department, said the shortage of irrigation water in the province has occurred since last year, but the situation was more severe this year.

His sub-department would monitor the situation and be active in providing water for agriculture production from irrigation projects and reservoirs of hydropower plants, he said.

Bio-technology helps sustainable farming

Bio-technology is an important component of sustainable agriculture development in Viet Nam, Dr. Nguyen Thi Phuong Thao, Dean of the Bio-technology of the Ha Noi Agriculture University No.1 told a workshop held on Thursday in the capital city.

Thao said 29 countries have planted bio-tech crops on 160 million hectares of land. These crops have greatly contributed to food security, sustainability and climate change by increasing crop production value to US$ 78.4 billion; providing a better environment as less pesticide is used; conserving biodiversity and reducing CO2 emissions.

Nguyen Thanh Thuy, deputy director of the Agriculture Genetics Institute, said 2007 was the first time Viet Nam started field trials of genetically modified corns (Bt corn).

Since then several Bt corn tests have been conducted in the provinces of Vinh Phuc (in the north), Son La (the northern mountainous province), Dak Lak (in the Central Highlands) and Vung Tau City (in the south).

Results from the four trials show an increase in productivity by as much as 30 to 40 per cent in comparison with conventional corn grown in the same condition.

“It was observed that the new corn quality is much better, and farmers and other personnel involved in the trial did not show any adverse health symptoms,” Thuy said.

Professor Vo Tong Xuan, a member of the International Service for the Acquisition of Agri-biotech Application (ISAAA), expressed his concern about the increase in the country’s food demand.

“It is estimated that by 2020, Viet Nam will need about 50 million tonnes of cereal. By 2050, the figure will jump to 80 million, and all the while the cultivated land is being eaten up by urban and industrial development,” Xuan said.

Dr Leo Gonzales, a senior researcher from the Philippines, said results after ten years of Bt corn commercialisation in the Philippines indicated positive socio-economic impacts.

“Bt corn seed users were superior to ordinary hybrids ones in terms of yield, farm production cost, farm income, economic carrying capacities, global cost competitiveness and returned on investment by up to 42 per cent,” he said.

In the National Food Security Plan 2020, the Vietnamese government stresses the need to strengthen technology research and application, reduce post harvest losses and renovate land policy as well as to enhance environmental protection standards.

It is the inevitable trend of the global agriculture industry to ensure a scientifically proven food supply with no potential health risks.

Cement-plant pollution upsets residents

Many householders in central Quang Ngai Province’s Binh Son District last weekend flocked to Dai Viet-Dung Quat cement plant to oppose its environmental pollution.

The crowd used bamboo to barricade the main gate, preventing vehicles from going in or out. They also sent their complaints to provincial authorities.

Pham Thi Gac, a resident in Son Tra Village in Binh Dong Commune, said the plant was very noisy and also discharged clouds of dust that affected people’s health. She said all householders had to shut their doors all day and that children found it difficult to study due to the noise.

According to Nguyen Dinh Vi, local wells were polluted with cement dust. People did not dare to use it any more and were forced to buy water for daily living at a cost of VND10,000 (US$0.48) per 20-litre-tank.

Nguyen Van Lang, general director of the Central Cement Joint Stock Company which manages the plant, admitted that the dust discharge had affected local residents.

“We will minimise the volume of dust discharged to the surrounding environment in the near future,” said Lang.

The plant started operation six months ago and is still only using one third of its design capacity.

Residents are waiting for the provincial People’s Committee to stop the pollution and stabilise daily living for those living around the plant.

Banks move on soft home loans

As the property market has yet to recover and real estate sales by banks are still facing challenges, local lenders have continued to launch preferential home credit programs but with certain conditions.

Orient Commercial Bank has expanded a home loan program with rates from 13.5% per annum, or a three-percentage-point reduction. However, individual borrowers must have stable income of no less than VND12 million a month while business households must have operated for at least two years.

The bank offers the longest term of 15 years for this credit program and the maximum disbursement for a client is VND1.5 billion.

HDBank, meanwhile, offers the lowest rate for home loans at 8.6% per annum in the first three months. There is VND1 trillion worth of home credits available at this bank.

Eximbank on Thursday also announced a VND5 trillion credit program for customers having demands to buy or repair homes. Eximbank will fix the lending rate at 12% per annum in the first two years and after that, lending rate will be deposit rate of 13 months plus 2.5 percentage points. Loans amount up to 70% of guarantee asset value.

Large banks such as Vietcombank, VietinBank and BIDV have expanded home credit programs since June with rates hovering around 12% per year in the first three to six months. After that, these lenders will negotiate with borrowers to figure out new rates.

In fact, banks apply low lending rates for home loans only at the start of the term and customers then have to pay interest rates following rates on the market. Attractive rates of 8-10% per year actually are just a way to lure customers.

Therefore, the lending rate calculation formula after the preferential period should be read carefully.

For example, Eximbank applies a rate of 12% in the first two years but after that, the lending rate will be a deposit rate of 13 months plus 2.5 percentage points. If the deposit rate in the third year is 12%, customers will be subject to a rate of 14.5% per annum.

Fake goods pose economic and health risks

Fake products have become an increasing problem in the Vietnamese market, affecting customers’ health and causing losses for the national economy, said Deputy Minister of Industry and Trade Ho Thi Kim Thoa.

Thoa made the comment at a conference to mark “Vietnam Anti-counterfeit Goods Day”, on November 29 in HCM City.

At the event, the chairman of the Vietnam Association for Anti-counterfeiting and Trademark Protection (VATAP) Le The Bao, said, “Violations of intellectual property and industrial design regulations have become more sophisticated. Fake goods are both manufactured domestically and smuggled into the country, including those that affect public health such as contraceptives. Many manufacturers have complained that they have seen false versions of their products within one month of launching their own.”

Counterfeit products have been widely sold, both rural markets and urban supermarkets as well as trade centres in cities, said Tran Hung, Deputy Head of the Ministry of Industry and Trade’s Market Management Department.

Speaking at the conference, a representative from the Ministry of Agriculture and Rural Development pointed out the example of illegally imported, substandard chicken, which poses a health risk to the public and possible infection of domestic poultry. He noted that every year around 70,000 – 100,000 tonnes of low-quality chicken are imported into Vietnam, much from China. These products often have an antibiotic content as much as 20% higher than the regulated levels.

According to VATAP Chairman, Le The Bao, fake fertilisers are also very common in the country’s key agricultural areas. Between 2007 and August this year, Vietnam saw poison cases suspected to be linked to these fertilisers, affecting 249 people and causing 66 deaths.

Deputy Minister of Industry and Trade, Ho Thi Kim Thoa said that over the past few years, hundreds of counterfeit goods have been seized, with fines collected amounting to more than VND100 billion (USD4.76 million). Still, he says, the problem is far from being solved. “Even though we have five task forces on the lookout for fake and smuggled goods, the situation persists.”

An official from the Ministry of Agriculture and Rural Development said sanctions for these violation are not strict enough. “Each kilogramme of substandard chicken imported from China costs just VND15,000, but is sold at up to VND50,000-60,000 retail. These high profits lure traders to bring their low-quality products to Vietnam.”

According to Tran Hung, Deputy Head of the Market Management Department, said that along with the more sophisticated ways of counterfeiters, many companies who have been forced to compete with fake versions of their own products are intimidated to go to the authorities. He added that regulations on the matter remain weak.

VATAP Chairman Le The Bao said that the State budget for fake product prevention and control activities is still modest.

Deputy Minister Kim Thoa called on the cooperation of customers, enterprises and the whole community in the fight against fake products.

Sojitz warns of neighbourly competition

Japan’s Sojitz Corporation has proposed that the Vietnamese government offer foreign investors more incentives as a key measure to make Vietnam more attractive than other rivals, and thereby help attract more Japanese investors into Sojitz’s industrial parks in the country.

Takashi Ikeda, Sojitz’s president and chief executive officer for Asia and Oceania, said at a meeting with the Ministry of Planning and Investment on November 24 affirmed Vietnam was a good place for manufacturing. But he warned that Vietnam was also facing growing competition from other countries like Indonesia, Thailand and even Cambodia and Myanmar.

“Vietnam has advantages of labour costs and an abundant workforce that other countries also have. But these countries are actively changing their policies to attract foreign direct investment. Vietnam should not delay the change of its investment policy,” said Ikeda.

He said the Vietnamese government should give investors inside industrial parks more incentives, especially as more and more Japanese investors are increasing overseas investments. “At this time, Vietnam’s incentive policy is less attractive than in Thailand, Indonesia, Malaysia and Myanmar,” he added.

Sojitz invested into two industrial parks (IP) in south of Vietnam, Loteco in Dong Nai province and Long Duc in Long An province. Loteco, covering 100 hectares of land, has already fully occupied by 57 investment projected with the total investment capital of approximately $469 million.

Meanwhile, the 282-hectare Long Duc IP has attracted only three manufacturing projects. Sojitz has invested in 17 joint ventures in Vietnam since 1993.

IFC helps champion nation’s energy efficiency

Vietnamese firms are expected to use energy more efficiently and save money.

This is thanks to technical and capital support from the Danish embassy in Vietnam and International Finance Corporation (IFC) during 2012-2015. Last week, the Ministry of Industry and Trade (MoIT) officially launched the energy efficiency campaign from 2012 to 2015 to create positive change in energy consumption within industrial sectors and state agencies.

The National Assembly ratified Law on Energy Saving and Efficiency governs all organisations, households and individuals in Vietnam. In October, 2012, through its Decision No. 1427/QD-TTg, the government ratified the revised national programme on energy efficiency for 2012 to 2015 designed to reduce between 5-8 per cent of national energy consumption during 2012-2015.

With $30 million in technical support from the Danish embassy in Vietnam and $100 million capital support from IFC for energy saving projects, the campaign will focus on improving the awareness and supporting key energy business consumers in their implementation of the Law on Energy Saving and Efficiency, which came into effect on January 1, 2011.

During the first phase from 2012-2013, the campaign will focus on cement, steel, paper and chemical production, the four most energy-hungry industries in the country. Specifically, under the campaign, Vietnamese firms which have energy efficiency financing programmes will have an opportunity to borrow capital from various financial institutions such as the IFC at $100 million, the Danish embassy $30 million, Asian Development Bank $100 million, World Bank $70-$100 million and Japan International Cooperation Agency $50 million.

Simon Andrews, IFC manager for Vietnam, Cambodia, Laos and Thailand, said Vietnam’s many industrial enterprises had shown higher energy consumption rates per product unit than regional countries of up to 40 per cent. The campaign would be good opportunity for participating companies to improve energy efficiency awareness, especially the most energy hungry industries such as cement.

“Apart from helping improve business’ awareness, IFC, through local financial institutions like Techcombank and VietinBank, will help accelerate the modernisation process in enterprises and move the local economy towards low-carbon growth path,” Andrews said.

According to the MoIT, there are about 1,200 key energy business consumers using up to 1,000 tonnes of oil equivalent per year. They account for around 70-80 per cent of total national energy consumption.

Rice output estimated at 43.7 mln tones in 2012

Vietnam’s rice output for 2012 is expected to increase by 1.45 million tonnes over the last year’s figure, to reach 43.7 million tonnes, according to the Ministry of Agriculture and Rural Development.

Of which, the winter-spring harvest will yield an estimated 20.27 million tonnes, up 495,000 tonnes. Following is the main crop (from late May to mid-November) with a total output estimated at 8.2 million tonnes. The yield of the summer-autumn crop is expected to be 11.7 million tonnes, while the autumn-winter crop will produce about 3.5 million tones.

The higher rice output this year was attributed to the application of supporting policies by local authorities, coupled with developing the so-called Grand Paddy Field model, according to the ministry’s Planning Department.

Northern provinces have basically completed harvesting the main crop, and are currently stepping up sowing and planting winter crops in spite of unfavourable weather conditions. Meanwhile, many localities in the Mekong Delta, the country’s rice granary, are speeding up sowing of the 2012-2013 winter-spring crop.

PPP likely brings in $80 billion in decade

The Public-private partnership (PPP) form, which has been implemented in Viet Nam on trial basis over the past two years, can generate between US$ 70-80 billion for the country in the next 10 years, according to development partners.

Following the Ministry of Planning and Investment’s   establishment of a “one-stop” office in charge of PPP at the Bidding Management Department, the Government set up a steering committee for PPP investment, headed by Deputy PM Hoang Trung Hai, to duplicate the investment formula.

According to Deputy PM Hoang Trung Hai, the key task of the steering committee and relevant agencies is building institutions and management models that are in line with international practice and fit in Viet Nam’s economic and financial real situations.

The Deputy PM also asked ministries, sectors and localities which have large, complex projects invested in the form of PPP to complete their departments specialized in PPP. They should screen their projects to make the list of the ones that are to be proposed for PPP.

Earlier, the PM issued a mechanism on managing and implementing the project on building the Dau Giay – Phan Thiet Expressway, the first of its kind using the form of PPP.

15-year access to Internet and path-opening tool

The number of Internet users in Viet Nam increased from 200,000 in 2000 to 32.4 million in the first quarter of 2012, ranking 18 among 20 countries with highest Internet access.

According to the General Statistics, the total Internet subscribers was estimated at 4.4 million in June this year, up 26.5% against the same period last year.

The number of 3G mobile Internet users reached 16 million by the end of 2011, accounting for over 80% of the total broadband Internet subscribers.

At present, all State agencies, mass organizations, businesses schools and many families surf the worldwide web to explore information. The Internet is becoming increasingly important for direction and management activities.

The quick development of the Internet is attributed to the Government’s Resolution 49/CP on developing information technology in 1990s, which was signed by Prime Minister Vo Van Kiet on August 4, 1993.

The Resolution was designed to fruitfully implement the renewal policy adopted by the 6th National Party Congress. It summarizes information technology status in Viet Nam and sets targets, contents and measures for information technology development until 2000.

To realize the Resolution, the Prime Minister signed Decision 221/TTg dated May 6, 1994 on the establishment of the National Program Steering Committee on Information Technology which was headed by former Minister of Science, Technology and Environment Dang Huu.

On March 11, 1995, the Prime Minister signed Decision 154/TTg on supplementing functions and tasks to the Steering Committee which was put under the Prime Minister’s management.

The Committee lured both local and foreign famous experts to offer regular advices on how to deploy the program.

An overall budget plan for the program was submitted to the National Assembly for approval at the last working session in 1995.

In 1996, the Government poured VND 100 billion to implement nearly 100 sub-projects of the program.

To consolidate backgrounds for a report to the leader of the Party and State, the Committee dispatched a number of survey delegations to Singapore, the US, Canada, Japan, the Republic of Korea, France, Hungary, Australia between 1996 and 1997.

Many seminars were also organized with the participation of international professionals and overseas Vietnamese people.

On November 19, 1997, Viet Nam was officially connected with the international Internet network.

The Resolution 49/CP created a legal framework and a driving force for Viet Nam to open the national Internet gateway 15 years ago.

Agriculture restructuring enhances food security

Restructuring the agriculture sector will enhance food security and increase exports of farm products, helping the country reduce poverty and eliminate hunger and contributing to rural development.

The view was shared by agricultural experts and sponsors at a conference held by the Ministry of Agriculture and Rural Development and the Japanese Embassy in Vietnam, in Hanoi on December 4.

The event, themed “Restructuring agricultural sector: Sustainable development and added value,” drew representatives from the Food and Agriculture Organisation, the Japan International Cooperation Agency and the International Fund for Agricultural Development, together international donors.

According to Minister of Agriculture and Rural Development, Cao Duc Phat, Vietnam considers the quality and sustainability of agricultural growth an important issue in the coming time.

The ministry has developed a project to restructure the sector aiming to increase added value and ensure sustainable development.

The three primary outcomes will include developing rural areas to raise a farmer household’s income by 2.5 times before 2020, reducing the rate of poverty by 2 percent every year, and increasing the number of modernity-oriented rural communes by 20 percent in 2015 and 50 percent in 2020.

At the conference, participants said they highly valued Vietnam’s agricultural achievements during the last 25 years. It has transformed from a country lacking food to the world’s leading rice exporter, they added.

For effective restructuring, Vietnam needs to reprioritise public investment, improve the effectiveness of public investment use and management, reform the sector’s institution and innovate state-owned enterprises.

Sales shoot up in the south

The retail market in the south of Viet Nam has reason to be cheerful after x, a seminar in HCM City heard yesterday.

It was announced that the value in southern provinces and cities during the first 10 months of this year grew 18.9 per cent over the same period last year. The increase was higher than the national average of 17.1 per cent, with Hau Giang, An Giang, Binh Duong and Long An provinces contributing significantly to the growth.

Ten-month export turnover in the southern region rose by 10.1 per cent year-on-year, and import was up 2.7 per cent, with HCM City and Ba Ria-Vung Tau and Dong Nai provinces taking the lead.

Deputy Minister of Industry and Trade Ho Thi Kim Thoa said that industrial product manufacturing in rural areas was a strong point of localities in this region, but there were some obstacles to finding a consumption market for them, and well considered policies were required to do so.

Nguyen Nguyen Phuong, head of the HCM City Department of Industry and Trade’s trade management section, said local businesses were facing difficulties such as weak infrastructure and distribution systems, and added that the imbalance between supply and demand was also putting producers at a disadvantage in front of retailers.

He said that localities should actively develop distribution systems and accelerate investment in quality goods.

Ministry official Do Thi Minh Tam urged the local areas to speed up the progress of industrial stimulation projects and help enterprises improve technologies and enhance production capacities and operation efficiency.

She said that a close observation should be put on business activities, market management and price control should be intensified, and these firms should benefit from preferential Government policies.

Phuong suggested that industrial stimulation should focus on traditional trade villages and specialities.

He also declared that in the near future, HCM City would boost co-operation with southern provinces and cities to supply goods and materials, while seeking good manufacturers to develop the city’s distribution system.

Textile, garments industry hits a rough patch

Concerns have been raised over whether the garment and textiles industry would meet its annual export target of US$17 billion this year due to global economic hardships, according to the Viet Nam Garment and Apparel Association (Vitas).

Vitas vice chairman Pham Xuan Hong said that with an export turnover of $1.3 billion in November, down 3.4 per cent over the previous month, the industry had made just $13.78 billion year to date.

Hong said that orders from the country’s main export markets had fallen significantly this year, with Europe dropping 15 per cent against last year.

Revenue also fell as buyers turned their attention from high-end products to mid-range items in an attempt cut costs, Hong said.

Exports to the EU market are expected to continue to slide next year, so Vitas has urged domestic firms to concentrate on opportunities in Japan, US and South Korea.

Several Japanese customers have already signed deals to increase imports, which Vitas hopes will offset losses from the EU.

Vitas said that exporters should find new customers instead of depending on traditional markets. The Ministry of Industry and Trade is also implementing trade promotion programmes to help exporters boost shipments to new markets such as Hong Kong, Thailand and Malaysia.

Vitas expected an increase of fibre exports to China, Turkey, the Middle East and Africa would also help to boost revenue.

Domestic manufacturing index hits 14-month high

The Viet Nam Manufacturing Index (PMI) recently released by HSBC Viet Nam went beyond the neutral 50.0 point in November for the first time since September of last year.

The PMI rose slightly to 50.5 in November, up from 48.7 in October.

The improvement in operating conditions reflected returns to growth in both production levels and new orders during November, according to HSBC.

Output increased at the most marked pace since September 2011, ending a seven-month period of reduction.

Support to production levels was mainly provided by domestic demand in November, as new export order volumes continued to decline.

HSBC’s survey respondents mentioned the relatively subdued demand within Asia and the ongoing economic downturn across Europe.

Overall, new business levels returned to growth in November, ending a six-month contraction period.

Although the latest rise in new orders, which includes both export and domestic ones, was modest, the rate of expansion was the strongest since April 2011.

Meanwhile, backlogs of work fell for the eighth consecutive month, suggesting a general lack of pressure on operating capacity across the country’s manufacturing sector.

In addition, another rise in staffing levels contributed to the latest reduction in work outstanding across the sector.

The pace of job creation picked up slightly since October, and was the most marked for a year.

Higher production requirements and stronger new business inflows resulted in an expansion of input purchases for the first time since March.

According to the report, this did not prevent a 13th successive monthly decline in stocks of purchases in the manufacturing sector.

The HSBC Viet Nam Manufacturing PMI, comprising five sub-indexes of new orders, output, employment, suppliers’ delivery times and stock of items purchased, is based on data compiled from monthly replies to questionnaires sent to purchasing executives in 400 manufacturing companies.

VN needs to learn the benefits of milk

The importance of milk as a source of nutrition and ignorance of this in Viet Nam were discussed at an international milk conference held in HCM City last Friday.

Thai Huong, chairwoman of the TH Milk Group, one of the organisers, said Vietnamese need to realise that milk is an indispensable food, especially for children.

Anders Henriksson, senior application specialist at Dupont Nutrition and Health, Australia, said milk offers more benefits than many other foods.

For instance, milk protein receives a score of 1 on the protein digestibility-corrected amino acid score, which means that it completely fulfills the body’s need for amino acids. The score is only 0.92 for beef, 0.75 for black bean, 0.52 for peanuts, and 0.225 for wheat gluten, he said.

“The most likely effect of dairy product supplementation is a 0.4cm per annum additional growth per 245 ml of milk daily.”

Fresh and fermented milk helps build and maintain strong bones throughout life besides providing a range of other health benefits.

According to the World Health Organisation, osteoporosis, or a decrease in bone mass, currently affects 200 million people globally.

Henriksson also urged businesses not to use hormones and additives/preservatives, and use environmentally friendly packaging.

Delegates said since milk products are an important food item, quality control and improvement are vital.

TH Milk Group said dairy farmers need to pay more attention to sanitation and modern technology to combat diseases, especially mastitis in cows and ensure milk quality.

Viet Nam has yet to issue regulations on milk quality standards, Huong noted, calling for such regulations soon to make consumers understand clearly about quality.

She said relevant agencies should carry out market inspections to classify the quality of milk products.

Deputy Minister of Science and Technology Tran Viet Thanh said with domestic businesses realising the rising popularity of milk in overseas markets and the global trend towards natural and less processed foods, they are likely to standardise milk quality to improve their competitiveness.

But the country’s dairy sector is still young and depends heavily on imports for raw materials.

To reduce reliance on imports, he urged them to use technologies to improve their production of raw materials.

Tighter controls on import quality urged

Stricter import controls were necessary to prevent products of unverified quality being sold on the domestic market, said Nguyen Huu Thien, former director of the General Department of Standards, Measurements and Quality.

Rumours had spread lately that products, including fruit, toys and bras, contained toxic materials which could harm people’s health.

He said Market Watch, under the Ministry of Industry and Trade, and other agencies had collected suspected products and tested them but in the meantime the rumours had continued and enterprises who had followed correct procedures had suffered losses in sales and reputation.

“Importing companies needed to be better aware of their responsibilities concerning product quality,” he said.

Before importing goods, they should ask about the production processes and products that were eligible to be imported into Viet Nam.

At present, quality testing by manufacturers was not being given enough attention, which caused State testing agencies to become overloaded with products of unconfirmed quality.

General Department deputy director Tran Van Vinh said it was impossible for any agency to test all products coming in to Viet Nam.

Under current regulations, importers must ensure the quality and eligibility of their products in accordance with Vietnamese laws.

He urged that stricter rules be introduced to make importers more responsible for their products.

Vinh said also that the large amount of smuggled goods was adding to the problem.

For example, he recommended products with unclear origins and of unverified quality be kept under custody at border gates until the importer could show documents to prove origin and quality.

Vinh also said testing processes had shortcomings, including insufficient equipment and cumbersome administrative procedures.

Crackdown on fraud before Tet

The customs department has ordered its offices and Anti-Smuggling Investigation Bureau to step up the fight against smuggling, fakes, and other frauds ahead of the upcoming Tet (Lunar New Year) festival.

It has written to custom offices in places with high incidence of smuggling, such as HCM City, Hai Phong, and Da Nang, and the provinces of Quang Ninh, Lang Son, Cao Bang, Lao Cai, Nghe An, Quang Tri, Ha Tinh, and Tay Ninh, to tighten inspection of goods and luggage at entry and exit points.

The inspections will focus on foreign liquor and beer, sugar, cigarettes, electronic and refrigeration goods, cell phones, fake money, wild animals, poultry, and livestock.

The Anti-Smuggling Investigation Bureau is responsible for collecting data from customs offices and forecasting the smuggling of major goods.

It has to then support the customs offices in drafting and implementing plans to fight smuggling.

In HCM City, the Market Watch Office seized 13,669kg of goods and 86,296 other items last month, all smuggled, banned, fake, or violating other regulations.

The goods, mostly from China, included consumer goods, foods, beer, liquor, milk, cigarettes, garments and cloth, cell phones, cosmetics, parts, watches, and eyeglasses.

In the southeastern province of Tay Ninh, though competent agencies have strengthened inspections and punished smugglers, the situation along the border remains dire, especially with regard to cigarette smuggling, local officials said.

Provincial agencies have busted 38 cases of cigarette smuggling and seized more than 55,000 packs so far this year, two times the number in the same period last year.

But the seizures are insignificant compared to the volume that gets through, the officials admitted.

Trieu Anh Hung, deputy head of the Tay Ninh Border Guard Police’s Drug Crime Prevention and Control Division, said cigarette smugglers did not carry the contraband themselves but hire workers for the purpose.

“The cigarettes are stockpiled on the Cambodian side of the border from where the hired workers use motorbikes or small motor boats to transport them to designated sites,” he said.

“In the Moc Bai border to Go Dau town stretch on the Trans-Asia Road, smuggled cigarettes are put into boxes of beer and instant noodles and hired workers carry them through check points,” he said.

“If Tay Ninh cracks down on the smuggling, the smugglers would simply move to the neighbouring province of Long An and vice versa,” he added.

Ministry revises auto industry master plan

The Ministry of Industry and Trade has revised the auto industry development master plan in light of actual experiences in the past few years in a bid to cope with new trends on the market.

Deputy Minister of Industry and Trade Tran Tuan Anh said the plan has been sent to the Ministry of Natural Resources and Environment for reference before seeking final Government approval.

“We have built detailed targets and policies, especially policies on taxes and technology, to develop support industries,” Anh said.

According to the revised version of the Viet Nam Automobile Development Plan to 2020 with a vision to 2030, the local auto sector will focus on the domestic market and will classify market segments to meet diversifying demands. The plan should go in line with the overall development of the country’s socio-economic plan and help boost evolution of the manufacturing sector.

The Vietnamese auto industry faced a lot of difficulties, including the weakness of metallurgy and the lack of support industries, Anh said, noting that the ministry has added three “breaking” solutions to the revised plan, including more stable policies affecting the auto industry, producing environmentally-friendly vehicles, and creating more favourable conditions for development of the industry.

“In order to make it work, I believe the government needs co-ordinated methods to attract more investment to the sector and needs to upgrade transportation infrastructure” Anh said.

Development of support industries would be a core factor in the growth of the industry as a whole, Anh said, adding that the ministry was drawing up plans to build a complex that would gather together businesses in the support industries in a bid to help the ailing auto industry.

The country has 18 automobile manufacturers belonging to the Viet Nam Automobile Manufacturers Association (VAMA) and some 10 other smaller private manufacturers.

About 8,000 vehicles were sold in Viet Nam in October, down 21 per cent from the same month last year, according to VAMA. The industry group forecast that domestic manufacturers would sell a combined 95,000 vehicles in 2012.

Da Nang fails to hit growth targets

Central Da Nang City achieved low results on seven out of 11 annual socio-economic development targets, according to a year-end report announced at the city’s People’s Council meeting yesterday.

The report blamed the poor showing on slow socio-economic development caused by the worldwide economic downturn, which lowered the city’s growth rate, service production value, industrial production and construction and export turn-over. These factors also negatively affected the State budget, which in turn diminished funds for investment and job creation.

“The city had a difficult time with social-economic development due to the global economic crisis. Enterprises faced bankruptcy and had to deal with massive inventories and high interest rates,” the city’s chairman Van Huu Chien said at the meeting.

“Last year, the city set a target of 13 per cent for economic growth, but we could only achieve 9.1 per cent,” Chien said, adding that the city’s State budget revenue was only VND10.9 trillion (US$519 million) –81 per cent of what was hoped for.

“We have created 28,000 jobs, only 86 per cent of the target for the whole year,” Chien said.

He also complained that the real estate sector – a major source of revenue for the city – has been stagnant.

The city’s Small-and Medium-sized Enterprises Association reported that over 4,100 of the 14,000 enterprises in the city had gone bankrupt since 2009.

However, the city achieved growth in the fields of tourism, foreign direct investment and social housing for the poor.

Da Nang attracted 241 FDI projects with total capital of $3.6 billion, while the tourism sector hosted over 2.6 million tourists, bringing in VND2.6 trillion ($124 million).

The city has made available 7,700 apartments for low-income residents and rooms for 6,000 students.

At the two-day meeting, the city’s people’s council focused on social-economic development plans for 2013 as well as approving a vote of confidence for the council’s members.

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