Cashew growers face uncertain future

Though Viet Nam maintained its position as the world's top cashew nut exporter after attaining exports of US$1.45 billion last year, analysts are not confident about the cashew industry's sustainable development because of its lack of competitiveness and decrease in yield.

The cashew sector must be revamped, and the technique of growing cashew trees from nuts must be jettisoned, they warned, saying saplings should be used instead.

Last year Viet Nam harvested nearly 290,000 tonnes of cashew from over 330,000 hectares, meaning a yield of 0.91 tonnes per hectare. It had been 1.07 tonnes in 2007.

As the cashew industry has to import up to 50 per cent of raw materials for processing and export of cashew products, the analysts said Viet Nam could turn into a cashew-processing country.

The area under cashew cultivation has been reduced since 2009 while the yields have been inconsistent.

The area under high-yielding varieties is only 40 per cent of the total area under cashew. In the remaining areas, the yield is only between 0.7 and 0.9 tonnes per hectare, worth about VND24 million, or just over $1,000.

As a result many cashew farmers have switched to crops that bring them a higher income.

How to reduce the import of raw cashew for processing is now among the challenges facing the country.

Recently the Ministry of Agriculture and Rural Development zoned 150,000ha for high-yield cashew in Binh Phuoc Province and another 50,000ha in Dong Nai Province, the two provinces with the highest cashew yields in the country.

Experts said farmers would not switch to other crops if the yield in these areas reaches two or three tonnes per hectare.

The Ministry also has plans to zone 200,000ha for intensive cashew cultivation with an average yield of three tonnes per hectare. The plan, if realised, could make the master plan for the development of the cashew sector more feasible.

Dr Bui Chi Buu, head of the Southern Institute for Agricultural Technology, said to achieve sustainable development, the cashew industry must be revamped with more investment in technology and better training for human resources.

Buu said planting cashew nuts must be stopped and farmers should use saplings instead. The quality is poor if nuts are used, he explained.

According to the Viet Nam Cashew Association, measures to ensure sustainable development of the cashew sector must include financial support for cashew farmers, improvement and diversification of cashew products, improvement in technologies, and building of brand names for cashew products.

In 2013 more trade barriers would be imposed by importers of farm produce including cashew, the association warned.

Many cashew firms will then remain mired in financial difficulties and be forced to cut back on production or even shut down.

Hai Phong attracts FDI

Hai Phong surpassed Ha Noi and HCM City to take over second position in the FDI (foreign direct investment) list 2012.

By the end of the year, the northern coastal city mobilised US$1.16 billion in FDI, just behind Binh Duong with US$2.53 billion, according to figures from the MPI's Foreign Investment Agency.

Meanwhile, Hai Phong Department of Planning and Investment revealed that the city attracted $1.23 billion last year.

Around 95 per cent of this sum, or some $1.2 billion, was poured into Dinh Vu-Cat Hai Economic Zone and the city-based industrial parks, according to Mai Xuan Hoa, deputy head of the Hai Phong Economic Zone Authority.

Although 2013 is forecast to be a tough year, Hai Phong City still pins high hope on FDI mobilisation, especially investment from Japanese firms.

Hai Phong is considering establishment of an industrial park for Japanese manufacturers, specialising in support industries, said Hoa.

Garment makers see orders

Although the economic turmoils have seriously hit the big markets such as European countries and the US, most local textile and garment enterprises have received orders for 2013, according to Viet Nam Textile and Apparel Association (VITAS)

At present, these enterprises have been manufacturing goods for orders made for the new year 2013.

"We have received enough orders for the first half of the year. Our subsidiaries have taken measures to raise labour productivity, in order to deliver goods to customers in due time," Vietnam Investment Review (VIR) quoted Bui The Kich, Chairman of the Management Board of Dong Nai Garment JSC (Donagamex), as saying.

To fulfill all contracts in 2013, Donagamex has a plan to recruit 1,000 new workers for its factories which have been become operational in the past few months.

Shortly after the Tet (new lunar year festival), Donagamex will put Dong Phuoc Garment factory in Binh Phuoc Province into operation and production at the new factory will be accelerated when necessary, said Kich.

In 2013, Donagamex targets turnover of VND1.35 trillion (US$64.7 million) and profits of VND75 billion ($3.5 million) in 2013. The management board of the company also wanted to increase income for their employees by 10 per cent compared with 2012.

With a total turnover of about $100 million last year, Bac Giang Garment Co. has received enough orders for the first and second quarters of 2013.

Luu Tien Chung, Deputy Director of the company, said they exported goods everyday and so the 8,500 workers at their 10 factories had to work day and night.

Chung said Bac Giang Garment Co. targeted 10 per cent growth rate for 2013.

The biggest challenge facing the company is the increasing prices of "input" materials while prices of their products remain stable, according to Chung.

However, the company has re-organised and enhanced their production systems, raised labour productivity and improved quality of their products to meet customers' demands.

Despite the economic turmoils facing their customers, Garment JSC No 10 targets total turnover of nearly VND1.69 trillion ($81 million), profits of VND40 billion ($1.9 million), and workers to earn average monthly salary of VND4.8 million ($230) this year.

"We have received many orders from our customers and they are not a problem for us at the moment," Than Duc Viet, CEO of Garment JSC No 10 told VIR.

"The most importance is how to raise labour productivity and lower production costs."

Another flight to serve Da Nang-Singapore run

SilkAir will add another direct flight between Singapore and Da Nang beginning March 31, the airlines told Viet Nam News. It will be the third direct flight weekly between the two cities, serving the route on Mondays, Saturdays and Sundays, while direct flights to SiemReap will continue on Tuesdays, Wednesdays and Fridays.

Singapore-based SilkAir debuted in Da Nang in 2005 and began offering three direct flights weekly between Ha Noi and Singapore last June.-

Utility to invest $225m in power projects

The Southern Electricity Corporation has announced that it will invest nearly VND4.5 trillion (US$225 million) in major power projects this year in efforts to ensure electricity for people in the region.

The projects include a sea cable system from Ha Tien to Phu Quoc Island and power transmission networks in rural areas.

The firm has signed an EPC contract with Italy's Prysmian Powerlink Srl company for laying 56km of sub-sea cable to Phu Quoc Island. Scheduled to be completed in 2014, the power transmission line will connect the resort island to the national power grid. More than VND2.3 trillion ($111 million) has been invested in the project.

Meanwhile, VND1 trillion ($49 million) will be poured into the construction of power grids in areas inhabited by Khmer people in Kien Giang, Soc Trang and Tra Vinh provinces. This year the second phase of the project will be completed, bringing electricity to 33,312 households in the area.

The German Development Bank-funded rural power distribution project will be accelerated to meet the deadline in 2014. With a total investment of VND1 trillion, the project aims to ensure stable electricity supply, improve safety and reduce power loss in rural areas.

Last year the corporation invested a total of VND2.9 trillion ($139 million) in 45 110kV power grid projects and 218 distribution networks in the South.

Growth in services sector outstrips GDP
 
The services sector is playing an important role in the nation's economy and contributing significantly to growth, adding value to products in the agricultural, industrial and building sectors, says the Government's website.

However, the sector's growth has many latent problems, it says.

Developed countries around the world have been striving to develop their services sectors as they shift gradually from manufacturing-based economies, helping reduce environmental pollution and reducing reliance on cheap labour. The trend has helped explain why developed economies have seen growing trade deficits in goods, even as they enjoy a trade surplus in services, the site says.

Growth in Viet Nam's services sector and export in services has exceeded GDP growth annually since 2005, with services growing by 6.42 per cent last year against a GDP growth rate of 5.03 per cent and productivity relatively higher than in other sectors.

However, the export of services began to slow in 2009 with the global economic downturn. Between 2005-12, services exports rose by an average of 11.8 per cent per year, with tourism services alone growing by 18 per cent.

Exports of services remain small. Services export as a share of the country's total exports declined from 11.6 per cent in 2005 to just 7.6 per cent last year.

Services as a proportion of the overall economy have also seen a decline since a peak of 44.06 per cent in 1995. And while the number of employees working in the services sector has risen, their contribution to GDP has effectively declined, suggesting problems with labour productivity in the sector.

Last year, Viet Nam saw an overall trade deficit of $3.1 billion in services. The exports of the transport sector alone totalled $2.1 billion, with imported transport services valued at $8.7 billion.

Workshop urges enterprises to invest more on R&D
 
Domestic enterprises have scaled up funding for implementing new technology, but backing for research and development remains low, according to speakers at a workshop held here on Saturday.

Organised by the Ministry of Science and Technology and the Viet Nam Union of Science and Technology Associations (Vusta), the workshop focused on helping enterprises with limited funding invest in science and technology– a vital path for sustainable development.

Vusta's deputy chairman Dr Tran Viet Hung said that over 95 per cent of enterprises in Viet Nam are considered small. Due to their limited resources, they have focused on replacing old technology with new machines rather than carrying out studies.

Additionally, 30 per cent of enterprises - including foreign-invested firms – are still not fully aware of the importance of science and technology.

Spending for research and development (R&D) has sharply decreased, plunging from 55.3 per cent of firms' technology budgets in 2007 to 38.3 per cent in 2010. In contrast, more money has gone into renewing technology.

On average, each enterprise in the country spent VND712 million (US$34,000) on replacing old technology in 2007. By 2010, this figure had tripled, rising higher than VND2 billion.

Minister of Science and Technology Nguyen Quan explained the situation by saying enterprises had depended too much on the State budget in recent years. While spending on science and technology (S&T) makes up 2 per cent of the State budget, almost equal to the average level in other countries, due to the country's low Gross Domestic Product (GDP) last year the nation managed to allocate only $700 million to S&T - $300 million lower than the amount funded by Samsung of the Republic of Korea alone.

Quan said the problem could be solved by gathering financial resources from all of society, particularly enterprises and individuals, as other countries have done. In 2011, China saved 2 per cent of its GDP for S&T in 2011, but only one-third of S&T funds came from the State, while the rest came from enterprises, organisations and individuals.

The minister also made clear that investing in S&T was necessary to help enterprises grow their competitive edge in a free market system. In fact, he said, the State should compel enterprises to invest in S&T. Enterprises would contribute part of their earnings to the national S&T development fund, and the State would utilise the fund efficiently.

Hung suggested the State allocate money to scientists to study the demand for S&T at enterprises. He was backed by other participants at the workshop, who urged the Government to create more incentives for scientists.

Hydro plant begins generating electricty

The first turbine of the Nam Chien 1 Hydroelectric Plant in Muong La District in the northern mountainous province of Son La started generating power at 6pm yesterday.

Construction on the plant began in 2005 with total investment of VND6.4 trillion (US$300 million), 55 per cent of which came from Song Da Corporation.

The plant was built under the Build-Operate model about 17km from the Son La Hydroelectric Plant. It has the most complicated design of all the hydro-power generators in Viet Nam, including two turbines with total capacity of 200MW.

The remaining turbine is expected to generate power by the beginning of next month, said Nguyen Van Quan, general director of the Nam Chien Hydroelectric Joint-stock Company.

The plant will supply about 814 million kWh of power per year when fully operational.

Capital sought for infrastructure development
 
Mobilising capital and management experiences from the private sector is a decisive factor for infrastructure development in Viet Nam, especially transport, says Deputy Transport Minister Truong Tan Vien.

Speaking at a Lower Mekong Initiative Infrastructure Best Practices Exchange in Ha Noi yesterday, Vien noted the transport sector needed over US$77 billion by 2020 for infrastructure development.

Meanwhile the Vietnamese Government aimed to cut down on public spending which has remained a major fund for infrastructure development in the country, he said.

Public-Private Partnerships (PPP) model was first launched in Viet Nam in 2010 when the Government approved Decision 71 governing projects developed under PPP contracts.

A national Steering Committee on PPP chaired by Deputy Prime Minister Hoang Trung Hai was set up last November.

However, also late last year, the Ministry of Planning and Investment announced a revision and upgrade of the decision to better adapt it with real situations.

Earlier, in 2009, the Lower Mekong Initiative (LMI) was created in response to the meeting between Secretary of State Hillary Clinton and the Foreign Ministers of the Lower Mekong Countries—Cambodia, Laos, Thailand and Viet Nam —in Phuket, Thailand.

The five Ministers agreed to enhance co-operation in the areas of environment, health, education and infrastructure development.

Since then, the five countries have sought to strengthen co-operation in these areas and build on their common interests.

Myanmar formally joined the initiative in July 2012.

As part of LMI, Infrastructure Best Practices Exchange is expected to bring together government officials from the LMI partner countries responsible for infrastructure development. Experts will be drafted from the public and private sectors in the United States, the Lower Mekong Sub-region and beyond to share infrastructure development best practices.

At the exchange yesterday, US Ambassador to Viet Nam David Shear said that he hoped the US and its LMI partner countries could generate cleaner electricity, build modern airport, seaport and transport networks to move goods efficiently and build information networks to move ideas and drive innovation.

Lorraine Hariton, special representative for Commercial and Business Affairs from the US Department of States, said that thousands of people in the sub-region had yet to access power, clean water and sanitation, especially women and children.

Improved infrastructure would help them to better access markets, improve livelihood and income, she said.

"The exchange regarding the Lower Mekong Initiative was very important because it brought together regional governments and local and international business to discuss infrastructure best practices that would benefit everyone in the region," she said.

Over 30 US companies attended the two-day exchange to discuss with regional government officials ways to meet infrastructure growing demand, which proved their interest and US commitment to help lower Mekong countries with infrastructure development.

Asian Development Bank's Viet Nam Resident Mission country director Tomoyuki said that it was important to find feasible and suitable PPP models based on particular sectors and nations.

He urged a maturity of legal framework on PPP including realistic objectives and a cost and risk division between public and private sectors to ensure a win-win situation.

Meanwhile, Roland Yap, director of Government Affairs and Policy, General Electric, emphasised that transparency with high accountability and connectivity were among prior factors that investors cared about most when deciding any investment.

Official calls on Vinacomin to sell down coal stockpiles

The Viet Nam National Coal and Mineral Industries Corporation (Vinacomin) was urged to take prompt measures to sell off remaining coal stocks from the beginning of this year.

The request was made by Deputy Prime Minister Hoang Trung Hai on Saturday after the corporation reported it had about 7.5 million tonnes of coal in stock by the end of last year.

"Vinacomin needs to be resolved in asking their customers to sign long-term contracts with the producers, which is crucial to the sector's future plan," Hai said.

He also asked the corporation to report to the Government any cases where clients refused to make long-time commitments.

Vinacomin made a profit of VND2.5 trillion (US$120 million) from producing 44.5 million tonnes last year, slightly higher than initial plan, but only accounting for 92 per cent of 2011's total production.

Hai said the Government was considering restructuring the corporation with a greater focus on its major businesses.

But Vinacomin should increase its management capacity and review economic targets in comparision with regional countries for sustainable development.

He also asked the sector to take heed of labour safety, where the individual responsibilities of directors of each unit should be clearly defined.

According to Vinacomin General Director Le Minh Chuan, due to economic difficulties, the corporation had managed to economise 5 per cent of expenditure from the earlier plan, achieving savings of VND1.7 trillion ($817,000).

The corporation had also been proactive in revamping operation of its businesses. It had divested some minor businesses, including one related to a road highway worth VND9.5 billion and an insurance arm worth VND50 billion.

Vinacomin plans to consume 43 million tonnes of coal this year, an increase of 3.7 million tonnes from last year; and keep maintain profits gained in 2012.

Measures laid out include market-oriented production and discount policies for new customers, as well as improving the operation efficiency of sales channels.

Vietnam to put coins back into circulation

Vietnam will continue the circulation of coins after a period of discontinuation, one official said.

Nguyen Chi Thanh, an official of the State Bank of Vietnam (SBV), said the bank has made a proposal to restart circulation of coins, which would solve some of the problems that caused their temporary discontinuation. The proposal has got the approval from the prime minister, and as a result, coins will continue to be minted and put into circulation. The SBV will be responsible for maintaining the quality and integrity of coins in circulation.

The SBV has issued coins with denominations of VND5,000; VND1,000 and VND200 since December 17, 2003. On April 1, 2004, they added coins with values of VND2,000 and VND500 in order to increase the amount of coins in circulation.

However, the number of coins actually being circulated has been falling over the past nearly nine years.

Former SBV Governor, Nguyen Van Giau, admitted at the 11th National Assembly’s 6th session that the plan on boosting coin use had been ineffective.

The SBV stopped issuing new coins in 2010 due to rising steel prices, which made them considerably more expensive to produce than polymer banknotes.

In May 2012, Le Thi Thanh Hang, Deputy Director of the SBV’s branch in Ho Chi Minh City, confirmed that the bank had yet to issue any directive on recalling coins.

Concerning the possibility of halting the circulation of cotton money with face values of VND10,000 and VND20,000, Thanh said that these notes ceased being circulated beginning January 1, 2013. He added that any individual or organisation could exchange these notes for others of equal value.

He said that all the counterfeit polymer currency detected between 2004 and 2011 was only one third of that detected in cotton bills between 1997 and 2004.

The volume of fake money seized by banks and the state treasury has been significantly falling each year of the 2007-2012 period.

Nation urged to make IT a spearhead industry

Transforming information technology into one of the national economy’s spearhead industries will help Vietnam join the ranks of modern industrialised countries currently dominating the 21st century’s knowledge based economy.

Deputy PM Hoang Trung Hai issued the encouragement in his speech to a January 15 online conference reviewing the implementation of the 11th Party Central Committee’s 4th Plenum’s resolution.  

Hai listed priorities including raising public awareness of IT’s importance, developing telecommunications infrastructure, and applying the latest IT in state agencies as well as other economic and social sectors.

The Deputy PM emphasised the need to enhance the technical infrastructure servicing by software industries and IT services. He called for mobilising both human and capital resources in the name of establishing local IT zones that will help conquer the domestic market, develop export markets, and attract investment from the sector’s international leaders.

The conference also offered an opportunity for state management agencies, businesses, and experts to discuss measures expanding the role of information technology and communications in the national construction, industrialisation, and modernisation processes.

Delegates dedicated the conference’s opening session to discussing the IT infrastructure necessary for implementing the central resolution at the grassroots level as well as strengthening coordination among relevant agencies.

The conference also covered developing internet bandwidth, improving the efficiency of the cable, satellite, and 3G systems, and ensuring information security.

Ta Nung Int’l Trade Fair opens in Cao Bang

Vietnamese and Chinese businesses are attending the 2013 Ta Nung Border Gate International Trade Fair from January 15-22.

They have more than 100 stands displaying consumption goods, handicrafts, machinery and equipment, electrical devices, household appliances and garments.

The event marks the 63rd anniversary of Vietnam-China diplomatic ties.

Ta Nung is the most important border gate in the northern province of Cao Bang to promote trade exchange with China.

Over there, 30 projects have been licensed with a total capitalization of more than VND2.5 trillion, of which 11 are already operational.

Two-way trade revenue through the border gate has increased remarkably in recent years, hitting over US$200 million in 2012.

VBCSD helps promote business community

Deputy Prime Minister Nguyen Thien Nhan held a meeting with the Vietnam Business Council for Sustainable Development (VBCSD) in Hanoi on January 15.

The Deputy PM hailed the council’s successful organization of two important forums on sustainable development and food security, which attracted large numbers of businesses and mass media.

In addition, the council also well hosted some conferences on burning issues, including economic growth, environment management and climate change.

Notably, it has exerted efforts to bring the theme of business social responsibility into university education.

Deputy PM Hai hoped that VBCSD will play an active part in encouraging the business community to implement the national strategy for sustainable development and serve as a bridge between enterprises and related agencies at both central and local levels.

Dr. Doan Duy Khuong, Deputy Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) briefed the Deputy PM on the council’s activities over the years and its future plan.

He said the VBCSD will continue to support businesses in improving their competitive capacity in 2013.

The council will work closely with related agencies to on the effective use of energy for sustainable growth in Vietnam.

No subsidy for Vietnam’s shrimp producers: VASEP

The Vietnam Association of Seafood Exporters and Producers (VASEP) has all necessary evidence to prove that Vietnam’s shrimp producers and exporters do not receive any subsidy from the Government.

VASEP Secretary General Truong Dinh Hoe made the statement in response to reports that the Coalition of Gulf Shrimp Industry in the US has filed an anti-subsidy lawsuit against shrimp imports from Vietnam.

The US Department of Commerce (DOC) is expected to give an official reply on January 17 as to whether they will launch anti-subsidy investigation into frozen warm-water shrimp imported from several countries, including Vietnam.

Hoe asserted that Vietnam is a member of the World Trade Organisation, and it complies with the WTO regulations regarding the provision of subsidy for agriculture, adding that the country has data to prove its compliance.

He urged shrimp exporters to prepare documents and data to counter the accusation, while getting ready to cope with the worst scenario when the DOC accepts the anti-subsidy petition.

According to Hoe, if the petition is accepted and Vietnamese businesses fail to persuade the DOC, Vietnam’s shrimps will be subject to a 12 percent anti-subsidy tax rate. As a result, the price of shrimp will increase and it is the American consumers who have to pay for the extra.

The US was the second largest importer of Vietnamese shrimp in 2012, paying out US$480 million or more than 20 percent of Vietnam’s total earnings from shrimp exports.

Deputy Director General of the General Fisheries Department Nguyen Huy Dien affirmed that the government plays an important role in the law suit, which would last more than one year.

This is the second time Vietnam’s shrimp exports have faced a legal barrier in the US market.

Handicraft producers seek better access to Japan

A seminar to help improve the Vietnamese handicraft and interior decoration sector’s access to the Japanese market took place in Ho Chi Minh City on January 15.

The event was co-organized by the Vietnam Trade Promotion Agency and the ASEAN -Japan Centre for Trade, Investment and Tourism Promotion (AJC).

AJC interior decoration expert, Hiroshi Sakamoto, suggested Vietnamese businesses improve their approach to design and marketing to succeed in the demanding Japanese market.

Domestic producers were also asked to study the market’s climate, culture, and demographic profile to increase the value of their products, as well as its distribution networks, legal regulations and market prices.

Experts forecast that reasonably priced and functional products will be in high demand this year.

According to the Ministry of Agriculture and Rural Development, Vietnam strives to earn US$1.6 billion from handicraft exports by the end of 2015. Of the total, revenue from bamboo and rattan products, and ceramics and pottery is expected to reach US$530 million and US$480 million respectively.

First open-end fund launched in Vietnam

Local incorporated fund management company VinaWealth has launched Bao Thinh Vinawealth (VFF) - Vietnam’s first open-end fund - in HCM City on January 15.

The State Securities Commission granted the fund its public investment fund certificate.

At least 80 percent of the VFF’s investment portfolio is comprised of bonds, with a focus on Government bonds and bonds guaranteed by the Government, as well as corporate bonds, money market tools, and other assets.

Vinawealth aims to become the local fund management leader in Vietnam, offering a wide range of value-added investment products and services for the Vietnamese capital market.

VinaWealth Chief Executive Officer Sebastian Subba said launching an open-end fund is currently opportune, expressing confidence that VFF will attract investment in accordance with the financial capacity of potential customers.

Bad debt settlement – key to bank restructuring

The success of the commercial bank restructuring process rests heavily on the settlement of bad debts that continue to obstruct capital mobilisation for the national economy.

Over the past 20 years of Doi Moi (Renovation), the shortcomings of local commercial banks have been exposed, particularly through poor management, inadequate human resource training, weak liquidity, and rising bad debt ratio.

In 2013, the banking sector is set to reduce the bad debt ratio in commercial banks.

Two years ago, the State Bank of Vietnam (SBV) approved three M&A deals to improve the operations of several banks, including Ficombank, TinNghiaBank and Saigon Bank (SCB) and rearrange credit organizations in the process of economic reform.

Dr. Dao Duy Huan from the University of Finance says the restructuring of the banking sector is slow going due to snags in most newly-established commercial banks.

According to the latest statistics, Vietnam has more than 80 commercial banks, many of which operate inefficiently for lack of management skills and capital shortages. With a high ratio of outstanding debts they all find it difficult to avoid hidden risks.

Eximbank General Director Truong Van Phuoc is very concerned about a sharp fall in profit on account of their rising bad debts.

Phuoc’s view is shared by Pham Ngoc Hung, Vice Chairman of the Ho Chi Minh City Business Association, who says commercial banks still care too much about mobilizing capital by imposing high interest rates on loans and too little about settling bad debts in the process of bank restructuring.

According to SBV Governor Nguyen Van Binh, the bad debt ratio among commercial banks has reached 10 percent. Giant State-owned enterprises (SOEs) owe a huge amount of bad debts rising from their incentive policies for loan access.

Binh says bad debts are threatening national economic development. Even though some banks have lowered their interest rates, many businesses are still cash-strapped.

Economists have proposed new regulations on credit loan provision and bank operation control.

Dr. Le Tham Duong from the HCM City-based Bank University insists on applying international standards on bank operations. Modern standards will reduce bank profits from credit loans but increase those earned via service fees, he notes.

Under the SBV’s scheme, bank restructuring is necessary to provide fresh impetus for economic reform inherent in the ongoing growth model shift.

Economists have urged commercial banks and businesses to closely cooperate in the bank restructuring process by handling bad debts and simplifying loan access procedures in the first place.

EVN secures USD2.58-billion loan for 2013 projects

The Electricity of Vietnam Group (EVN) is completing procedures and negotiations with foreign banks and financial institutions to get a USD2.58-billion loan for its power projects in 2013.

EVN will spend around VND106.6 trillion (USD5.08 billion) to implement power projects this year, including around VND30.29 trillion (USD1.45 billion) which will go to debt repayments.

In 2012, EVN received a loan of USD2.5 billion from both domestic and foreign partners, including USD1.93 billion in loans from international organisations such as the Asian Development Bank, the World Bank, the Japan International Cooperation Agency, with the remainder sourced locally.

EVN also announced that power prices would average VND1,459 per kWh this year, up 7.2% from last year.

Vinacomin’s debts estimated at USD1.2 billion

Vietnam National Coal-Mineral Industries Holding Corporation Limited (Vinacomin) received loans of over VND25 trillion (USD1.2 billion) in 2012 from both domestic and foreign partners.

The figure was announced by General Director Le Minh Chuan at a meeting to review the group’s operations in 2012.

Vinacomin borrowed USD300 million from Citibank and Japan’s Nippon Export and Investment Insurance for its Lam Dong Bauxite Project. It also received USD200 million from the Sumitomo Mitsui Banking Corporation for the Dong Nai 5 Hydropower Plant.

VIB and MaritimeBank lent Vinacomin VND1.3 trillion (USD61 million) for its coal projects.

Fuji Xerox builds digital device factory

Fuji Xerox Asia Pacific Pte Ltd on January 14 started building a factory to produce digital colour multifunction devices and small LED printers in the northern city of Haiphong.

This is the sixth project in the Vietnam-Singapore Industrial Park and the first foreign- invested project in 2013.

The factory covering 18ha, with total investment estimated at approximately US$119 million, is scheduled for completion in August this year.

Bridgestone tire plant opens in South

Bridgestone Tire Sale Vietnam Limited Liability Company has opened its first plant in Vietnam, applying state- of-the- art technology at My Phuoc three Industrial Park in the southern province of Binh Duong.

The Bridgestone Bandag Retread plant will implement the entire retread process, including inspecting casing conditions, repair work, new treads and a final check before they return to the market.

According to Bridgestone, using Bandag retread tires can save up to 35 percent of the cost compared with new ones.

Vietnam-Malaysia trade keeps rising

Two-way trade turnover between Vietnam and Malaysia reached US$7.3 billion in the first eleven months of 2012, up 7.5 percent against the same period of the previous year.

The figures were released by the Vietnam Trade Office (VTO) in Malaysia on January 14.

Of the total, Vietnam’s export earnings, mainly from crude oil, computers, electronic products and spare parts, rubber, rice, steel, glass products and vehiclesand components, hit US$ 4.16 billion.

Its main imports included electronic appliances and spare parts, vegetable oil, unprocessed plastic, fuel, chemicals, machinery and household electrical equipment.

Two-way trade is estimated fetch US$7.6 billion for the whole of 2012 and this is the first time Vietnam has achieved a trade surplus with Malaysia since 1992.

Vietnamese trade counselor Vu Van Canhsaid Vietnam and Malaysia aim to raise bilateral trade to US$ 8 billion in 2013, with Vietnamese exports climbing to nearly US$5 billion, an increase of 11 percent over 2012.

Auto sales down by one third

The Vietnam Association of Automobile Manufacturers (VAMA) has reported 2012’s automobile sales fell by 33 percent compared to the previous year.

Despite a monthly increase of 4 percent, December’s sales totaled 9,983 units - 22 percent lower than during the same period in 2011.

The VAMA said the downwards trend was also reflected in revenue earned from trucks and four-seat sedans.

The association said that more than 7,700 units were assembled domestically in December 2012.

There was also a sharp increase in imported vehicles (2,282 units), up 28 percent on the previous month.

Vietsovpetro targets 5.4 million tonnes of crude oil in 2013

The Vietnamese-Russian oil and gas joint venture enterprises (Vietsovpetro) plans to exploit 5.4 million tonnes of crude oil and bring ashore 3.06 billion cubic metres of gas this year.

The information was released at the Vietsovpetro conference held in HCM City on January 14.

To achieve the set target, the joint venture will begin construction on 3 exploratory oil wells and is expected to complete 22 others.

Vietsovpetro pumped up more than 6 million tonnes of crude oil in 2012 and collected 1.25 billion cubic metres of gas.

It earned total revenue of US$5.43 billion, contributing significantly to the State budget. Its US$3.54 billion profit exceeded its initial target by 47 percent.

Vietnamese cashew nuts dominate global market

Vietnam ships more than 160,000 tonnes of cashew nuts abroad annually, becoming the US’ largest cashew nut exporter.

India lost its top cashew nut exporter status to Vietnam four years ago and is now a major importer of Vietnamese cashew nuts.

In eight of 2012’s months, India imported 3,245 tonnes of cashew nuts at an average price of 163.38 rupee/kg. A large proportion of that volume was supplied by Vietnam.

According to the Cashew Export Promotion Council of India (CEPCI), the Indian market’s huge volume cashew nut imports over the past two years are likely to continue in the future.

GiridharPrabhu, Achal Cashew Export Company Director, says India’s cashew nut demand is increasing, both for household consumption and food processing.

Vietnam is a promising source of broken cashew nuts as its key export market—the US—is not interested.

Local exporters are therefore keen to capitalize on the Indian market.

CEPCI estimates India needs at least 700,000 tonnes of imported cashew nuts for its food processing industry.

Gloom about seafood exports in 2013

Vietnam’s seafood exports will face a lot of difficulties on account of shrinking markets in the US, the EU, Japan and the Republic of Korea (RoK).

The Vietnam Association of Seafood Exporters and Producers (VASEP) estimates shrimp export turnover in 2013 at US$2.4 billion, up 6.5 percent compared to the previous year if the domestic businesses succeed in competing against Chinese traders and overcoming Ethoxyquin barriers.

Last year, seafood exports earned US$6.15 billion, up 0.7 percent against the previous year but just 94.2 percent of the set target.

Prospects for Vietnam-Portugal trade cooperation

Vietnam and Portugal show great potential for boosting cooperation and lifting two-way trade turnover to a new level, says Portuguese ambassador to Vietnam Jorge Torres-Pereira.

According to Tran Kim Chung, Portugal’s Honorary Consul General in Vietnam, who is also President of CT Group, export turnover in 2012 between the two countries grew by 10 percent over 2011.

Two-way trade exceeded the US$170 million mark last year. Vietnam’s exports accounted for 64 percent of the figure, meaning the country continues to maintain its export surplus to the Portuguese market as it has over recent years.

Jorge says in the world list of goods suppliers to the Portuguese market, Vietnam moved up to 45th position in 2011, from 64th in 2007. Conversely, a significant volume of Portuguese products has been sold in Vietnam.

Portugal’s key exports to Vietnam included mechanical engineering products (34 percent), fibre and fibre cloth (34 percent), farm products (10 percent), and chemicals (5 percent), but remained low in value.

Jorge says Portugal has established strong relations with many Asian countries including Vietnam over the years. However, since the boom years of trade exchange between Vietnam and Portugal under French rule, bilateral trade turnover has declined rapidly.

Over the past decade, the Portuguese Government has acknowledged the crucial role of ASEAN member countries in Asia and has strengthened relations with them, especially with Vietnam in various fields, diplomatic, economic, cultural and social.

In the meantime, Portugal has also paid attention to promoting trade exchanges in Europe and other parts of the world.

Portugal shares certain similarities with Vietnam in the geographical and cultural fields. With a millennia of experience in marine-based economic development, it is keen to boost cooperation with Vietnam in sea port exploration.

Chung describes Portugal as one of potential markets for cheap goods in the EU. Most products

sold in Portugal are always 1.5- 2 times cheaper than those of the same trademarks consumed in other EU nations.

Over the years, there have been regular exchanges of business delegations between Vietnam and Portugal to seek investment and trade cooperation.

At a recent meeting between Vietnamese and Portuguese entrepreneurs, Nguyen Tuan Hai, Deputy Head of the Vietnam Chamber of Commerce of Industry (VCCI)’s International Relations Department, called for greater efforts to lift economic and trade cooperation between the two countries to a higher level for the benefit of sustainable growth.

Since the establishment of ambassadorial-level diplomatic ties in 1975, Vietnam has always attached great importance to boosting cooperative relations with Portugal, Chung says.

However, he notes, two-way trade exchange remains relatively modest and many business areas have not yet been fully exploited.

Since early last year, the Portuguese Honorary Consul General to Vietnam has organized investment promotion conferences in both Lisbon and Porto.

The Portuguese government is currently offering incentives for Vietnamese investors to do business in Portugal and is considering granting Portuguese nationality to Vietnamese businesspeople qualified for the Golden Residence Permit.

Vietnamese businesspeople operating with the Portuguese market will have the chance to gain access to over 250 million Portuguese-speaking consumers throughout Europe.

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