Ha Nam province sees positive signs of FDI

Despite the impact of the global economic downturn, the northern province of Ha Nam is optimistic about foreign direct investment (FDI) inflows.

The Ha Nam Department of Planning and Investment says it has licensed 11 projects with a total capitalization of US$78.4 million in the first half of the year, bringing the province’s total valid projects to 77 with a combined registered capital of US$669.6 million.

Among several major foreign investors, Japan and the Republic of Korea (RoK) have positively contributed to socio-economic development in the province.

From 2001–2005, Ha Nam had only five projects licensed with a total capitalisation of US$7.5 million.  Then, in the next five years (2006–2010), it saw the figure rising to 39 worth US$267.8 million in total.

The largest include a US$40 million project to build the Frieslandcampina Ha Nam milk factory, Sumi Vietnam Wiring System Co. Ltd’s US$29 million project specialising in producing small wire car and motorbike harness cables, and Cargill Vietnam Co. Ltd’s US$15 million livestock feed project.

Since 2011, Ha Nam has licensed 33 more projects with a total registered capital of US$394.3 million.

In the first six months of 2013, the FDI sector generated around 15,600 jobs (up 15.4 percent) and contributed US$12.5 million to the state budget, (up 27.8 percent), and earned US$293 million in revenue (up 36.6 percent) compared to a year earlier.

Some of the newly-licensed projects include Myeongsung Vina Co. Ltd’s mobile microphone production project and Finetek Vietnam Co. Ltd’s touchscreen panel project in Phu Ly district and Keyrin Telecom Vietnam Co. Ltd’s advanced electronics manufacturing project in Duy Tien district.

Apart from Japan and the Republic of Korea, Ha Nam has also attracted a number of investors from the US, Australia, Holland, Singapore, and Taiwan.

The province is expected to welcome another 15–20 foreign investors with a total registered capital of around US$120 million, generate an additional 18,200 jobs, and contribute around US$24.9 million to the state budget by the end of the year.

Ha Nam has learned a lot of experiences from Japanese and South Korean investors. Provincial authorities recently selected a Japanese enterprise director who is Chairman of Hiroshima Small and Medium-sized Business Association to serve a bridge between Japanese enterprises through his trade promotion office.

In addition, they have closely worked with the department of transport on the opening of more bus services for commuting workers to ensure their safety and productivity levels.

They have always encouraged organisations and individuals, both foreign and domestic to engage in attracting more foreign investment to the province.

The Ha Nam provincial People’s Committee is set to upgrade infrastructure facilities, improve the training of high quality human resources, and push through administrative reforms at any cost.

Vietinbank targets capital of over 1.7 billion USD

Vietnam Joint Stock Commercial Bank for Industry and Trade or V ietinbank (CTG) said it will increase its capital to more than 37.23 trillion VND (over 1.7 billion USD) by the third quarter.

Vietinbank’s charter capital as of June 30 was 32.66 trillion VND (1.5 billion USD).

The bank will carry out dividend payment in cash at the rate of 16 percent of the charter capital for 2012 prior to the issuance of additional shares to strategic shareholder Bank of Tokyo, Mitsubishi UFJ Ltd (BTMU), BTMU will not receive each dividends for the fiscal year of 2012.

In addition, Vietinbank will issue shares at par value to existing shareholders at a rate of 14 percent of the charter capital (including the issuance to BTMU).

In the plan to increase capital, BTMU will buy more shares to maintain its percentage of ownership in Vietinbank.

After Vietinbank finalises its plan to raise its charter capital, State shareholders will hold 64.46 percent, equivalent to around 24 trillion VND (1.14 billion USD), BTMU will hold 19.73 percent, equivalent to nearly 7.35 trillion VND (346.6 million USD); and other shareholders will hold 15.81 percent or over 5.88 trillion VND (277.3 million USD).

Vietinbank expects to use the additional funding to improve credit, expand its network and invest in technology, new facilities and services while also boosting mergers and acquisitions.

“Increasing capital is the base for our bank to enhance its financial capacity, maintain high growth and create more benefits for shareholders,” said Vietinbank chairman Pham Huy Hung.

During the meeting, Vietinbank also selected two new members of the board: BTMU’s Asia and Oceania director Go Watanabe and corporate client director Hiroyuli Nagata.-

Samsung Vina opens enterprise experience center in town

After succeeding in business with individual customers, Samsung Vina Electronics Co. is now shifting its attention to corporate clients by opening the Enterprise Experience Center in HCMC’s District 4 last Friday.

The center, located at the REE building at 9 Doan Van Bo Street, features advanced solutions for organizations and companies in the State sector as well as in areas of banking-finance, education, restaurants, hotels and retail industries.

Nguyen Van Dao, vice president of the company, said that with the center, businesses can experience overall solutions and use lots of Samsung devices such as smart phones, tablet computers, printers and large format displays as well as secure mobility solutions, mobile printing solutions, visual display solutions and cloud display devices.

Other solutions offered at the facility also include transparent displays suitable for fashion outlets and flexible electronic payment mPOS appropriate with enterprises having payment demand anytime and anywhere.

The highlight of the center is a solution to display Video Walls which is able to gather up to 100 single screens for many different types of companies.

Thanks to the diversified technological strengths and the successes with business-to-customer (B2C) products, Samsung will continue to provide business-to-business (B2B) solutions for organizations and entities, Dao remarked.

Samsung has set a target of developing the B2B segment as its long-term strategy and considers this as one of the key business activities. It is looking to achieve global sale growth of 23% in 2020, with its subsidiary in Vietnam following the same target.

Banks see profit targets beyond reach

Local commercial banks are facing huge challenges in realizing this year’s profit targets as credit growth remains low amid current economic difficulties.

While enterprises still have low a demand for capital, most banks, especially small lenders, have paid attention to restructuring, management capability improvement or capital preservation rather than setting up high profit targets.

Nguyen Dinh Tung, general director of Orient Commercial Bank (OCB), said that the lender fulfilled 50% of its full-year profit target in the first six months because its target is low. In addition, OCB does not attach importance to business results and instead it places focus on transforming itself into a retail bank and strengthening its operation this year.

It is possible that OCB can meet the profit target established early this year, Tung said.

In 2012, OCB obtained VND304 billion in pre-tax profit, or 57.4% of the year’s target. Therefore, the bank aims at a modest goal of only VND320 billion for 2013, or 5.3% higher than last year’s figure.

Other banks such as SeABank and ABBank also told the Daily that 2013 is the year for consolidation, improvement of governance and competitiveness, effective and safe business while earnings are no longer the top priority.

Last year, ABBank gained VND528 billion in pre-tax profits, rising from VND400 billion in the previous year but it was only 66% of the year’s target. This year, the bank targets to attain VND650 billion in pre-tax profits while in the 2013 annual report, the bank says it mainly focuses on restructuring, governance and safe operations.

Meanwhile, SeABank gained only VND69 billion in pre-tax profit in 2012 due to losses in stock and foreign exchange investments. This year, the lender estimates to obtain VND216 billion in pre-tax profits.

However, profit targets will be a huge challenge for banks as the macro economy had yet to see positive signs in the first half of this year. Banks, as the intermediary channel for capital circulation in the economy, will suffer adverse impacts from the economic slowdown.

According to the central bank, the banking system obtained credit growth rate of nearly 3% at the end of May while mobilization increased 7%. Capital surplus has forced banks to invest in government bonds and foreign exchange to improve earnings.

Commenting on the possibility of banks fulfilling profit targets this year, Viet Dragon Securities Company (VDSC) said that most banks have been more reserved, which is quite different from previous years.

The Government has applied many measures to speed up credits such as the VND30-trillion loan program for the real estate market and reduction of interest rate ceiling. However, VDSC said that the solutions would not bring about results in short term.

DHG transfers brand to Thai partner

Hau Giang Pharmaceutical Joint Stock Co. (DHG), has transferred the Eugica brand of all pharmaceutical products and functional foods to Thailand’s Mega Lifesciences Limited (Mega), said a senior executive of the local company.

Doan Dinh Duy Khuong, deputy general director of the company, confirmed last Friday that the deal was worth US$6 million. This is the first brand transfer from a local pharmaceutical enterprise to a foreign partner, Khuong, who is also marketing director of the firm, told the Daily.

“DHG hopes Eugica products will not only develop in Vietnam but also go global thanks to the strong market share of Mega in 21 countries. We will continue to produce Eugica medical products and functional foods for Mega under subcontracts in the next five years,” Khuong said.

Eugica is a cough medicine brand using 100% home-made materials which was studied and launched onto the market by DHG in 2006. The company obtained VND250 billion in sales from Eugica products annually.

Khuong expects sales of Eugica products to grow 15-20% annually after Mega officially exports them in 2014.

DHG now has about 50 functional foods. Mega, meanwhile, has been present in Vietnam since 1995, with its representative office located at E-Town building in HCMC’s Tan Binh District.

Third sale round of Hyundai Hillstate kicks off

Hyundai last Friday began the third sale round of its project Hyundai Hillstate in Hanoi, offering fully-furnished apartments covering 102-168 square meters each at VND22.8 million per square meter, inclusive of value-added tax.

Hyundai Hillstate is the first real estate project of South Korea’s Hyundai Group in Vietnam and also its first project overseas, said Seo Duk Yeol, sales manager of Hyundai RNC Ha Tay, a subsidiary of Hyundai Group.

Hyundai Hillstate introduces several policies to stimulate demand.

Homebuyers only need to make a down payment equivalent to 30% of an apartment’s value to receive the home and settle the rest within one year after signing the contract with no interest charged. The project owner this time also offers lower prices than in previous sale rounds in 2010 and 2011.

The first sale round took place in late 2010 with 200 apartments and 62 villas on offer sold out in just one day thanks to the then thriving property market. The second round was held in November 2011, when the market slowed down, leading to lukewarm response.

Hyundai Hillstate is located on To Hieu Street in Hanoi’s Ha Dong District, some 16 kilometers from Hoan Kiem Lake in the city’s center.

This high-end apartment and villa project got off the ground in 2009. It covers an area of 4.67 hectares and costs a total of US$200 million.

Hyundai Hillstate comprises two main zones: the apartment zone with five buildings supplying 928 flats and a commercial center, and the villa zone with 100 units.

The project lies near the Cat Linh-Ha Dong metro line scheduled for completion in 2015. The apartment zone of Hyundai Hillstate is connected to commercial infrastructure and public utilities of the new administrative area of Ha Dong District. It is located next to Metro Ha Dong Hypermarket and Lotte Ha Dong Cinema.

Accenture suggests solutions to raising port efficiency

Global management consulting, technology service and outsourcing company Accenture has recommended measures to address the problems related to efficient operations of ports in Vietnam.

Fox Chu, Accenture’s director for infrastructure and transportation in Asia Pacific, emphasized the importance of building strong connectivity to make ways for cargo to be transported to the ports in Vietnam and shipped to trading partners.

“So there are two things: the road connectivity (to ports) and having the vessel’s calls,” Chu told the Daily last week, when he was in HCMC to attend the 11th ASEAN Ports & Shipping Conference.

Chu highlighted a number of challenges that hinder advancement of the port industry in Vietnam. These barriers include traffic congestion, uneven distribution of the shipment loads across ports in the country, and poor cooperation among stakeholders.

In his presentation about trends, challenges and opportunities for ports in Vietnam, Chu said there were Vietnamese ports operating at just 20-30% of their designed capacity, leading to higher costs and lower productivity. He also gave an example that a 40-foot container shipped from Hong Kong to Los Angeles was 28% less expensive than the one shipped from HCMC.

To attract more vessels to ports in Vietnam, Chu called for more efforts of relevant parties to ensure road connectivity and sufficient volume of cargo for vessels to come frequently.

Chu said the poor cooperation issue could be improved by partnerships and equitization of port businesses, especially for global port operating groups to invest in for financial and operational support.

Chu insisted on collaboration among ports and management agencies in establishing a market order and a strong domestic network by repositioning ports for handling the types of cargo and vessels according to their scale and locations instead of competing with one another.

He said policymakers and investors were very important to establish such a market order in the port industry to set appropriate policies and make fundamental investment in developing certain ports as hubs for cargo and ships. It is also crucial for Vietnam to integrate its ports into the world’s shipping and port network.

The world’s economic stagnation has made life difficult for port operators to maintain high performance but there are ways to achieve this as suggested by Accenture in its new research. Chu said port operators need to become more customer-centric businesses that can flexibly respond to the needs of shipping lines for a lower cost as well as streamline operations and offer more personalized services for shippers to increase customer loyalty.

PAN Services wins 2013 Vietnam Brands Competition award

PAN Services has been honoured with the 2013 Vietnam Brands Competition’s “Famous Brand” award in Hanoi on July 14recognising its enviable industrial cleaning service and other facility service record over the past 20 years.

PAN Services Deputy Director Vu Thi Ngan said the award will spur on the company’s 4,000 professional staff from PAN Services to invest greater efforts in improving quality, rewarding the trust of customers, and raising the profile of the PAN Services brand.

PAN Services was deemed eligible for the award after meeting the organising board’s assessment criteria, including territorial scope, brand longevity, and cleaning service revenue.

The 2013 Vietnam Brands Competition’s “Famous Brand” award seeks to acknowledge businesses’ achievements in improving their competitiveness, providing high quality services and goods, incorporating sustainable development goals, contributing to Vietnamese brand development, and promoting Vietnamese products and services on international markets.

The award has helped introduce Vietnamese trademarks to international friends and demonstrated to domestic businesses the importance of protecting their brands’ reputations.

Cooperative economy promoted in Mekong Delta

A seminar was held in Can Tho city on July 15 to consider building new-style cooperatives in the Mekong Delta.

The event was co-organised by the Ministry of Planning and Investment (MPI) and the Southwestern Region Steering Committee (SRSC).

In his opening speech, MPI Deputy Minister Dang Huy Dong emphasised the significance of the project to develop the collective economy.

The aim is to promote the sustainable development of the collective economic sector in the region, especially agricultural cooperatives to help improve farmers’ economic, cultural and social lives, he said.

According to Dong, the Mekong Delta region has developed the individual economic model for years. However, the model has not yet proved its effectiveness and people’s living conditions are still low with unstable incomes. The failure of the model is due to lack of cooperation, management and guidance.

The cooperative model is designed to deal with the problems facing farmers. By joining cooperatives, they will be provided with low-cost input materials and technical support as well as assistance in selling their products in the most effective way, Dong said.

The initial step will see the formation of three cooperative models in rice cultivation, tra fish breeding and fruit growing, Dong added.

Duong Quoc Xuan, Deputy Head of the SRSC said there are more than 1,300 cooperatives and 45,000 agricultural and seafood cooperative groups in 13 Mekong Delta localities, accounting for 14 percent of the country’s total number.

Seminar discusses Myanmar’s investment potential

Hanoi hosted a July 15 seminar discussing Myanmar’s emerging opportunities and potential for investment opportunities.

It reviewed the status of economic cooperation between both nations’ business communities and sought to promote trade activities in the future.

Tran Bac Ha—President of the Bank for Investment and Development of Vietnam (BIDV) as well as the Association of Vietnamese Business Investors in Myanmar (AVIM)—said AVIM has already dispatched 50 delegations and nearly 1,500 business representatives to Myanmar for market survey and collaboration missions. BIDV leaders said the bank is eager to become the institutional pioneer for investment in Myanmar and support Vietnamese businesses bold enough to perceive the country’s opportunities. BIDV is currently preparing for establishing a joint banking venture in Myanmar.

Vu Van Trung, Deputy Head of the Ministry of Planning and Investment’s Foreign Investment Agency, highlighted the chance to capitalise on Myanmar’s emerging consumer goods, agriculture, and processing technology markets. Vietnam has invested nearly US$600 million in Myanmar.

Myanmar’s representatives thanked Vietnamese businesses for their contributions to investment and trade activities, affirming the Government of Myanmar is intent on continually improving its business and investment environment for all foreign partners.

The Vietnamese business community told the Government of Myanmar that issuing a regulation guiding the implementation of new investment laws would be a boon to their trade and investment activities.

Telecom Providers ask for hike in 3G service fee

Telecom Company, Viettel, has said that it has sought permission from the Ministry of Information and Communication to raise fees for 3G services, as the service costs are presently too low.

Tong Viet Trung, Deputy Director-General of Viettel, said while the numbers of 3G subscribers are increasing rapidly and smart phones are becoming more popular, the service costs have remained low.

At the beginning, competition between mobile phone service providers was too fierce; hence service providers resorted to low tariffs to attract subscribers.

But as the numbers of users have increased substantially, Viettel will have to raise prices as the current fee structure does not even cover production costs, said Trung.

Another reason is that the service provider has to upgrade the current network capacity quality and rise in fees is needed for this huge investment.

According to figures released, the price of 3G in the country is much cheaper than in China or in European countries.

In early April, two leading mobile phone service providers, MobiFone and VinaPhone, announced a hike on 3G packages from VND40,000 (US$1.9) to VND50,000 ($2.4) a month.

According to the Ministry of Information and Communication, mobile operators in the country have spent VND28 trillion ($1.3 billion) to upgrade 3G packages. They also offered low 3G packages to attract more subscribers. For instance, unlimited package costs only VND50,000 a month and package for students is VND35,000 per month.

One more thing that made service providers increase fee of 3G packages is the use of Over The Top (OTT) services that allows subscribers to send free messages and calls. The ministry said the country has 20 million 3G subscribers. If a large number of subscribers use free OTT services, it would be a huge loss for mobile operators.

Nguyen Manh Hung, Deputy Head of Viettel, said that if their 40 million subscribers use 3G and OTT services, the company would see 40-50 percent loss in revenue.

Do Vu Anh from the Vietnam Posts and Communications Group said that free OTT services are making losses for Vietnamese telecom operators and its counterparts in the world.

Mekong Delta expands dragon fruit cultivation

As rice cultivation has dropped in the last two years in the Mekong Delta, farmers have switched to planting dragon fruit instead, which brings in two or three times more income than rice.

Many farmers in Tien Giang and Long An Provinces have happily switched to growing the popular dragon fruit. Along streets in Long Tri, Duong Xuan Hoi Communes of Chau Thanh District in Long An Province, dragon fruit is seen growing in abundance. The district now plans to cover 2,500 hectares with dragon fruit cultivation by 2015.

Moreover, export processing services are also beginning to mushroom in the province. Hoang Huy Company in Duong Xuan Hoi Commune has opened more warehouses for storing and bought more freezers to store the fruit for export.

A few kilometers from there is another factory using hot steam to treat dragon fruit before shipping--the first factory of its kind in the region that was built at a cost of US$1.5 million.

Vo Mai, Vice President of Vietnam Gardening Association, said dragon fruit is a key agricultural produce of the country for export. Entering the US market for the first time in 2008, the volume of dragon fruit was 100 tons, in 2012 it increased to 1,200 tons and by it is expected that the volume will amount to 2,000 tons for this year. The volume to Japan and South Korea also leaped over the years.

Tran Ngoc Hiep, Director of Thanh Long Hoang Hau Company in the central province of Binh Thuan, said besides the Chinese traditional market, his company plans to expand to EU countries, the U.S., South Korea, Indonesia and Thailand.

Vietnam bans Japanese skin whitening products

The Drug Administration of Vietnam has decided to withdraw 17 skin whitening products made by Japan’s Kanebo Cosmetics, from store shelves across the country.

Nguyen Viet Hung, Deputy Head of Drug Administration, said that the decision to withdraw these cosmetic products was fear of Rhododenol, a quasi-drug ingredient also known as 4HPB which cause white patches on the skin.

These Japanese cosmetics products are imported and distributed by LK Commercial Company located at 198 Khuong Thuong Street in Dong Da District in Hanoi.

Health watchdogs have ordered the importer to withdraw all products as well as send a report of withdrawal to the Administration before July 30.

Earlier, the health watchdog had sent a document to the Department of Customs asking not to clear five cosmetics with Rhododenol content imported by the Logitem Vietnam Company at 36 Bui Thi Xuan Street in District 1 in Ho Chi Minh City.

Ministry lists jobs for minors

The Ministry of Labor, Invalids and Social Affairs has prepared a list of jobs that will permit the hiring of children below the age of 15.

The list includes jobs in the field of sports, singing, movies and handicrafts, which will allow for the hiring of children from the age of 13-15.

The Ministry has also asked local authorities to check on businesses hiring minors. If any business hires labor that is below 15-years-of-age, they must show their medical certificate and offer free medical treatment.

Nghe An lures South Korean investors

Nghe An has promised South Korean investors favorable conditions to attract them into the province, especially those involved in the production of technology products.

At a conference on Korean investment promotion for Nghe An held in Hanoi last Friday, Nghe An Vice Chairman Huynh Thanh Dien pledged that the province would provide investors with cleared sites, infrastructure and human resources.

In recent years, the government of Nghe An has focused on improving the business and investment environment and organized many direct dialogues with entrepreneurs and investors to promptly resolve their difficulties.

The province sees administrative reform as a key task, applying the one-door mechanism, developing a multilingual website for investment promotion and introducing preferential policies to support investors.

Nguyen Xuan Duong, chairman of Nghe An, said the province had always appreciated the efficiency of South Korean investment.

Currently, South Korea has 12 valid projects in Nghe An, with total registered capital of US$60.97 million, using more than 10,000 local workers. In addition, many South Korean entrepreneurs and investors are seeking opportunities in Nghe An.

“We pledge to adopt our policies consistently, prepare cleared sites and infrastructure at economic zones and industrial parks, prepare human resources, upgrade airports, seaports, roads, railways and supporting services so that investors can operate in the most efficient way,” said Duong.

Jun Dae Joo, South Korean Ambassador to Vietnam, remarked that South Korean FDI in Vietnam had been increasing in recent years, with Hanoi and HCMC attracting the most South Korean firms.

However, the costs of investment in these cities are very high, especially land and labor costs. Therefore, South Korean investors are looking at other destinations, including Nghe An, said Jun.

Kwon Kyoung Doug, deputy director of the Korea Trade-Investment Promotion Agency (KOTRA) said textile-garment companies from South Korea wanted to invest in Vietnam to enjoy the preferential tariffs once the Trans-Pacific Partnership Agreement (TPP) was successfully concluded. Many businesses are eyeing Nghe An thanks to abundant land and labor in the province.

However, transport infrastructure is a weakness of Nghe An since it takes up to seven hours to travel from Hanoi to Nghe An. Moreover, human resources, despite abundant, are not well trained or skilled.

“If the above weaknesses are overcome, there will be more South Korean firms investing here,” said Kwon.

At the conference, Nghe An signed a memorandum on cooperation with South Korea. In addition, the province signed a memorandum on cooperation with Vietnam-Korea Strong Plus Elevator Co. in an elevator production project worth US$10 million, and another on cooperation with Global Sourcing International Co. Ltd. in a garment project with initial investment of US$2.5 million.

* The government of Yen Bai City will help investors in Dam Hong Industrial Zone with 70% of the costs of site clearance and site leveling.

The municipal government in collaboration with the Vietnam Chamber of Commerce and Industry (VCCI) last Friday held a conference on investment promotion for Yen Bai City in Hanoi.

At the event, Nguyen Lam Thang, chairman of Yen Bai City, invited local and foreign investors to invest in 17 projects in the fields of textile-garment, leather-shoe, mechanical engineering, electronics, chemicals, automotive assembly, processing of agricultural and forestry products, infrastructure construction and tourism.

At the conference, memorandums were signed between Yen Bai City and the Korean Chamber of Commerce and Industry (KCCI), the Taipei Economic and Cultural Office, the Central Council of Vietnam Business Associations, Vietnam National Textile and Garment Group (Vinatex), Hoa Sen Group, Ho Guom Garment JSC and Cuong Thinh Thi Investment and Construction JSC.

Hanoi apartment market sees positive signals

The apartment market in Hanoi witnessed several positive signals last quarter, with a larger sales volume than in the first quarter.

A report on the Hanoi property market by Knight Frank reveals the city-based projects attracted the interest of more homebuyers in the second quarter. Apartment prices in the western and southern parts of the city did not change much.

Most of the apartment projects in the western and southern districts like Ha Dong, Hoang Mai and Hai Ba Trung are in the low- and mid-end segments. They have always recorded a higher transaction volume than the projects in other areas.

The projects with an average price of around VND20 million per square meter like Hoa Binh Green City, HUD3 Tower, Phuc Thinh Tower and Xuan Phuong Viglacera achieved good sales volumes in June.

Do Thu Hang, head of research and consultancy at Savills Vietnam, remarked the apartment market in Hanoi was quite active in the second quarter, with eight newly-launched projects supplying 2,100 apartments, taking the total primary supply to 11,700 units, up 7% against the preceding quarter.

The projects in the primary market had prices ranging from VND10 million to VND94 million per square meter, unchanged from the first quarter. The absorption rate was 7%, up two percentage points over the preceding quarter, which is attributed to good operations of the projects with fast development and reasonable prices.

Meanwhile, apartment offer prices in the secondary market went down due to low liquidity. Tu Liem District recorded the sharpest drop of 7%, followed by Long Bien, Ba Dinh and Cau Giay with a decline of 5%.

Though the number of newly-launched apartments in the second quarter is higher than in the first quarter, the number of flats going on sale in the first six months was only 36% of the figure in 2012 and 14% of that in 2011, according to CBRE Vietnam.

However, the number of apartments completed in the first half of 2013 was 90% of the total number in 2012. Thus, CBRE thinks investors are making great efforts to finish their projects.

Metro Line No.1 set for operation in 2018

Residents in HCMC can use the Metro Line No.1 connecting Ben Thanh Market in District 1 with Suoi Tien Theme Park in District 9 in 2018, according to the commitments of related sides.

The HCMC Management Authority for Urban Railways and a consortium of Japan’s Sumitomo Corporation and Vietnam’s Civil Engineering Construction Corporation No. 6 (Cienco 6) on Sunday clinched an agreement on the construction pace of the metro line.

At the signing ceremony, Nguyen Do Luong, director of the city’s Management Authority for Urban Railways, said the project’s progress has been scheduled for every year.

Work on the scheme’s pickets along Hanoi Highway will start this year while elevated girders for the track will be installed next year, with the elevated track construction along the highway set for basic completion in 2015.

The work’s construction, including an underground section, will be completed in 2016 before the assessment and handover of the work in 2017. The line will be commissioned in 2018.

Among the three bidding packages of the line No.1, only the 2.6-kilometer underground section running from Ben Thanh to Ba Son Shipyard is in the process of preparations for a bidding round.

The second package, which runs more than 17 kilometers, is being constructed as an elevated route. Meanwhile, Japan’s Hitachi struck a deal to provide engines and trains for the third package early last month.

The construction of the metro line aims to lessen the chronic congestion at the northeastern gate of the city where traffic flow from southern and central provinces is huge.

When in place with a maximum velocity of 80 kilometers an hour in the tunnel and 110 kilometers an hour on the elevated section, it will take about 20 minutes to go from Suoi Tien to the downtown area, with an interval of five minutes and a stopping time of 1.5 minutes at every terminal.

The metro line is expected to transport some 620,000 passengers a day by 2020, which is projected to rise to 1.02 million by 2040. The route will be extended to Bien Hoa City in the southern province of Dong Nai in the future.

The line No.1 was initially estimated to cost US$1.09 billion in ODA loans and State budget but the cost has now swollen to US$2.07 billion due to foreign exchange rate volatility.

Ha Long to host young inventors’ festival

Quang Ninh province’s Ha Long City is preparing to host the sixth national young inventors’ festival over October 18–19.

The festival will honour the best ideas and inventions designed and created by Vietnamese citizens aged between 16 and 35, as well as young people’s collaborative innovations in agriculture, industry, security and defence, health, education, environmental protection, administrative reform, transport, and post and telecommunications.

Ho Chi Minh Communist Youth Union organisations in cities and provinces nationwide will nominate and submit those responsible for their localities’ outstanding ideas and inventions, focusing on projects already realized rather than existing only in theory.

Over half of Vietnam Steel Corporation’s subsidiaries make loss

Up to seven out of 13 members of Vietnam Steel Corporation's (VnSteel) members are operating at a loss, said corporation General Director Le Phu Hung.

He said that five joint ventures involving VnSteel have also made losses, adding that in the first half of this year, VnSteel’s output fulfilled only 42.4% of the set target. Meanwhile, steel firms are facing higher production costs.

Huynh Cong Du, Director of Phu My Flat Steel Company, said prices of steel production materials and power are on the rise, meanwhile, the company is facing difficulties in finding outlets for their products which also affects their profits. Besides, local steel companies have to compete with massive imports of steel from other countries.

According to Bui Quang Chuyen, Deputy Head of the Heavy Industry Department under the Ministry of Industry and Trade,  not only steel billets and steel sheets but also corrugated iron now see inventory. The market share of local steel enterprises is on the decline, while that of joint ventures has increased.

The inventory will result in more fierce competition and even bankruptcy risk among steel firms. Therefore, steel companies have to find their own ways to boost consumption and restructure their operations.

Tighter control over pricing of airport services

The Civil Aviation Administration of Vietnam (CAAV) will request the airport management board to tighten control over the prices and quality of all services, said deputy head of the department, Luu Thanh Binh.

Airports nationwide will be required to establish public hotlines to receive customer complaints on the quality of their services.

Speaking at a recent conference on aviation service quality, Binh said, following recent reports about high prices and low quality of food at Noi Bai International Airport, this week the department will send an inspection team to the airport.

At the meeting, the Northern Airports Authority said they recently found that Hoang Kim and Dai Thai Binh Duong companies sell expired products and without listing prices at some airports.

Head of the department, Lai Xuan Thanh, said that the department will issue a set of quality standards, clearly stipulating things to do to improve services. Based on these, Thanh added, authorities will be able to inspect, and if necessary, warn service providers.

Duong Tri Thanh, Deputy General Director of Vietnam Airlines, noted the importance of the behaviour of staff members and their responsibility to serve customers courteously. He added that Vietnam Airlines recently dismissed a staff member for surfing the internet and ignoring passengers' questions about their flight delay.

Vietnam Airlines says they will try to reduce the rate of late flights that result from unreliable weather forecasts, weak infrastructure and power losses.

Further questions asked of Metro sturgeon origin

After a week of controversy, Ha Noi Market Watch will check with suppliers over the origins of sturgeon being sold at the Metro supermarket, the authority's deputy director Nguyen Cong San has said.

Questions were raised about the sources of the sturgeon last week when Le Anh Duc, chairman of the Viet Nam Sturgeon Group, denounced Metro supermarket for selling what he claimed to be illegal fish.

He said the supermarket chain in the north imported between 50-70 tonnes of sturgeon every month, while production in this area was unlikely to exceed 30-40 tonnes. Duc also believed that in the official documents, Metro's sturgeon was said to have come from the northern province of Lao Cai, but the farmers there did not rear them.

On Tuesday, market watch officials checked sturgeon at two Metro supermarkets, in Hoang Mai and Tu Liem districts. Labelling said the fish had come from Viet Nam and senior Metro officials were in possession of documentation proving the origin of the fish.

According to a Metro representative, the enterprises that supplied the fish were Seaprodex Ha Noi/Hasimex Company and Hieu Ngan Food Company.

The Viet Nam Sturgeon Corporation estimates that up to 15 tonnes of unauthorised fish are brought into Viet Nam every day, equivalent to 5,000 tonnes a year.

The latest incident marks the second time this year that a foreign invested supermarket chain has been pulled up for alleged infringements. In April, the Big C supermarket in Tu Liem District was found to be selling green grapes from Ninh Thuan province, but with a Chinese flag on the label.

Co-operative model eyed at Delta meeting

A meeting to review the implementation of a project on cooperatives designed to help local residents move out of poverty was held yesterday in the Mekong Delta city of Can Tho.

Organised by the Ministry of Planning and Investment (MPI) and the Steering Board for the Southeast Region, the meeting was attended by representatives of the Departments of Agriculture and Rural Development, Planning and Investment in the Mekong Delta and the Union of Cooperatives of Viet Nam.

The cooperative project is centered on the collective economic sector, especially agricultural cooperatives.

Dang Huy Dong, Deputy Minister for Planning and Investment, said the project also helped local residents and members of the community understand the importance of working together to improve their livelihoods.

According to an MPI report, individual economies in the area of rice, fruit and aquaculture cultivation have been successful, but many local residents in the region are still poor due to low incomes.

The causes of the low incomes were identified to be the lack of quality seeds and breeding animals; outdated modes of cultivation and the low level of technical know-how and the absence of modern machinery and equipment.

Also, the lack of stable and quality materials for production, and low prices for their products due to pressure from traders have also contributed to the poverty levels.

Dong said there had been a lack of close cooperation among households or private enterprises, and a lack of support from organisations and units that can help people conduct business more effectively.

"The cooperative mode is a very suitable one to solve this problem," Dong said, adding members are provided with input materials at soft prices and support in technological production and consumption.

Because of these advantages, cooperatives are critical in helping farmers become more close-knit, thus improving their living standards.

The Cuu Long River Delta has three types of cooperatives, one in rice cultivation, another in catfish raising and a third in orchards. These are all agricultural strengths of the region.

Duong Quoc Xuan, deputy head of the South West Steering Committee, said the Delta has 13 provinces with more than 1,314 cooperatives, employing 23,260 people.

There are 45,000 cooperative groups involved in agricultural and seafood production and 3,280 farms (accounting for 14 per cent of the country's total).

"The local cooperative economic sector has made active contributions to socio-economic development, poverty reduction and hunger eradication in local provinces," Xuan said.

However, he pointed out that some cooperatives were operating ineffectively, most of which are located in rural and remote areas.

In some localities, state management agencies had not yet paid sufficient attention to carrying out the Government's cooperative development policies as well as giving proper assistance to existing cooperatives, according to Xuan.

As a result, the products from these cooperatives have not been highly competitive in the market.

Highway project gets priority

Contractors responsible for construction delays in the project to expand National Highway 1A should be replaced immediately.

At a conference in Da Nang yesterday, Deputy Prime Minister Nguyen Xuan Phuc urged the transport sector to take such drastic actions if any construction delays arouse. The conference focused on site clearance and safety issues related to the country's two major highway construction projects.

"Site clearance for the projects is a major issue and a key factor in meeting the completion schedule by 2016," Phuc said.

He also urged leaders from 23 provinces and cities, as well as contractors, investors and officials from the ministry of transport to find more effective methods for site clearance to ensure that the two projects are completed by 2016.

"Site clearance, compensation and resettlement in the provinces and cities will be crucial to helping ensure that the two projects are finished on time. These are complicated issues and require hard work from local authorities, contractors, investors and the ministry of transport," Phuc said.

"The deadline for the completion of the two projects is fixed. We have only three years to reach the target, so preparations for site clearance and the issues of resettlement and compensation must be completed first."

He also criticised some provinces and contractors for carrying out their projects too slowly, pointing to the case of Quang Tri Province, which had to spend five years to complete only five of the 13km section on National Highway 1A, while Ha Tinh Province completed a similar project much faster.

The deputy Prime Minister asked leaders from the provinces and cities to make every effort necessary to catch up to the proposed time schedule.

Minister of Transport Dinh La Thang said that involvement of local authorities would be crucial for creating the conditions necessary to complete the projects smoothly.

"Solving the delays in site clearance is the primary responsibility for local authorities. I ask the local authorities to create priorities for contractors, investors and bidders and to ensure that they carry out their projects on time," Thang said.

National Highway 1A runs from the north to the south of the country. An expansion of 672km of its 1,887-km length is expected to be completed by the end of this year. The 663-km Ho Chi Minh Highway Project through the Central Highland region has a budget of VND533 billion (US$25.1 million) and requires 220ha of land and the resettlement of 620 households.

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