Petrol prices slashed twice in 10 days

Petroleum enterprises were asked to cut the retail price of petrol for the second time in the past ten days after a drop in global petrol prices.

Accordingly, the price of a RON92 litre was cut by nearly VND500 per litre to VND24,810 (US$1.16).

The price reduction of diesel, gasoline and mazut were VND153, VND138 and VND68 per litre, respectively.

This was the second price reduction for petroleum products in the past ten days. The first cut of VND330-VND350 per litre this year was made on July 28.

The ministries of Finance, and Industry and Trade also requested petrol enterprises to reduce the money they can get from the Price Stablisation Fund from VND600 to VND300 per litre.

However, the reduction in price is still much lower than the five combined price hikes, amounting to a total of VND1,450 per litre.

According to the ministries, the fall in domestic petroleum prices is due to a fall in prices on the international market, especially that of Singapore.

Within 30 days, from July 8 to August 6, prices of 92 octane gasoline fell and fluctuated at around US$116.8 per barrel. Diesel and kerosene also fell to US$118 per barrel in Singapore.

Canada conducts investigation on Vietnam’s OCTG

The Canadian International Trade Tribunal (CITT) has initiated a preliminary investigation on anti-dumping and anti-subsidy tariff on certain oil country tubular goods (OCTG) from several countries, including Vietnam.

The Competition Management Department under the Ministry of Industry and Trade said on August 6 that CITT decided to conduct the investigation after it received a report from the Canada Border Services Agency on carrying out the anti-dumping price and anti-subsidy investigation on OCTG imported from some countries, including Vietnam on July 21, 2014.

Those who want to take part in the investigation are required tosend their application to CITT before August 5. List of participants will be announced on August 8.

Submissions by those in opposition to the lawsuit must be sent not later than August 21, 2014 and plaintiff can submit its documents to the respondents no later than August 29.

CITT is scheduled to give preliminary decision on October 19, 2014.

Vietnam – an important destination for Singaporean businesses

Vietnam, especially HCM City remains a major investment destination for Singaporean businesses, said Singapore’s Consul General in HCM City, Leow Siu Lin at a ceremony honouring the 49th anniversary of Singapore’s National Day on August 6.

Singapore is one of the leading foreign investors and trading partners of Vietnam. As of July 1st, the country’s total investment in Vietnam had reached US$30 billion with 1,300 projects, making it the country’s third largest foreign investor, trailing Japan and Taiwan. The two-way trade volume between the two nations has quadrupled since 2000 to US$17.4 billion in 2013.

Ms Leow Siu Lin said that his nation’s investment and cooperative projects such as Vietnam-Singapore Industrial Park (VSIP) have become a symbol of bilateral  effective economic cooperation. Singapore tops foreign investors in HCM City with 686 projects capitalised at US$6.56 billion.

Nguyen Thanh Rum,Vietnam-Singapore Friendship Association President in HCM City said that despite the global economic downturn, with Vietnam’s open-door policies and traditional cooperative relations, Singaporean investors have effectively implemented several investment projects in the country.

Singapore has made its stronger presence in Vietnam’s economic sectors such as petroleum, industrial production, agro-forestry-fishery sector, infrastructure, service, and real estate. Singapore-invested projects have greatly contributed to generating jobs and boosting the country’s economic growth, Rum said.

Positive signal for Vietnamese handicraft exports

The export value of handicraft products in the first half of this year reached nearly US$900 million, an increase of about 10% compared to the same period last year, the Vietnam Economic News (VEN) reported, citing figures released by the Vietnam Handicraft Exporters Association (Vietcraft).

The US, the EU and Japan remained traditional markets, accounting for a large share of total handicraft export turnover. In addition, enterprises in the handicraft sector were focusing on exploiting new markets such as Brazil, Russia, India, China and South Africa (BRICS).

Vietcraft General Secretary Le Ba Ngoc said that BRICS countries have strongly developed in recent years and this block would create a potential market of the handicraft sector.

Furthermore, thanks to favorable geographical location, Vietnam has strengths for market research and transport (except for Brazil and South Africa). Vietnam reached an export turnover of about US$100 million in furniture products to the Chinese market and shoes to the Russian market.

Ngoc also added that orders from China and Japan have strongly shifted to Vietnam, offering good opportunity for the handicraft sector to achieve its export turnover target of US$1.6 billion in 2014.

To promote advantages and increase export turnover, Ngoc recommended that small scale enterprises should focus on mid-market segment in accordance with its production capacity, raw materials and skilled workers. In addition, expanding the market and improving the competitiveness are needed.

“To promote exports to the BRICS block, in August, Vietcraft will send delegations to Brazil to learn for experience,” Ngoc was quoted as saying.

According to Hanoi Industry Promotion Centre Director Hoang Xuan Thuy, Vietnamese businesses should register the copyright, contributing to protecting their design and avoiding replication.

Dung Quat EZ attractive to RoK investors

Companies from the Republic of Korea (RoK) are upbeat on business opportunities in the Dung Quat Economic Zone located in central Quang Ngai province.

The RoK is one of the largest investors in the EZ. Most notably, Doosan Group has invested more than US$300 million to construct five factories specialising in producing steam boilers.

Korean Hanwha Group erected an asphalt factory in the EZ while Ulsan Industrial Centre investors recently announced plans to install state-of-the-art machinery and equipment in a modernised facility.

Le Van Dung, deputy head of the zone’s management board said they have gone to great lengths to support companies’ efforts to locate highest quality labour resources and get them in contact with vocational training schools in the province.

The province also hired a Japanese consulting agency to assist in planning the Dung Quat deep water port No 2 with a capacity to handle over 300,000 tonne container vessels, meeting the demand for development of the local heavy industry.

Local company exports ocean tuna to Japan

Binh Dinh Fishery Joint Stock Company (Bidifisco) and Japanese Kato Hitoshi General Office Co Ltd (Kato Office) have signed a contract to export ocean tuna to Japan.

In accordance with the terms of the contract, the Kato Office will act as a distributor of ocean tuna products in auction centres and seafood chains of Kato’s partners.

As scheduled, Bidifisco will send the first shipment of tuna to Japan via air route on August 6.

Previously, Bidifisco had inked contracts to buy ocean tuna with five Japanese fishing boats using advanced technology.

From late July to early August, the fishing vessels have caught 54 ocean tuna with an average weight of 40-50 kilogram’s each.

LienVietPostBank pledges to finance Tuan Chau projects

LienVietPostBank will consider lending VND10 trillion to Tuan Chau Group’s projects in the country as part of a comprehensive cooperation deal the two sides clinched in Halong City on August 4.

The group will lend to Tuan Chau’s infrastructure, tourism and technology projects with a focus on those in Quang Ninh Province. The firm will also use financial services of LienVietPostBank such as fee collection, money transfer, international and domestic payments.

According to a statement released on August 4, the deal aims to tap the strengths of both sides and contribute to development of Quang Ninh Province and the local economy.

LienVietPostBank has strongly expanded its network through more than 10,000 post offices nationwide. At the end of last year, the bank had total chartered capital of nearly VND6.5 trillion and total assets of nearly VND80 trillion. The total amount deposited at the bank hit over VND70 trillion while its total outstanding loans reached over VND36 trillion.

Tuan Chau Group is active in various fields such as real estate, travel, hotel, entertainment, golf course and mining.

In a related development, the company on August 4 received Guinness Vietnam recognition for its biggest man-made yacht wharf.

VN Airlines, Jet Airways ink deal

Vietnam Airlines signed a code share agreement with Indian Jet Airways yesterday.

Under the deal, Jet Airways will co-operate with Vietnam Airlines on flights from Singapore and Bangkok to HCM City and Ha Noi. Meanwhile, Vietnam Airlines will co-operate with Jet Airways on flights from Bangkok to Mumbai and Delhi and from Singapore to Mumbai, Delhi and Chennai.

Khanh Hoa approves new resort

The People's Committee of the central coastal province of Khanh Hoa signed an approval for project details of Diamond Bay Resort & Spa on Monday.

The US$2 billion project, invested and managed by Hoan Cau Group, will cover 88 ha in Phuoc Ha Hamlet, Phuoc Dong Commune, Nha Trang City.

Designed by architect Luong Trong Vu, the urban resort will contain villas, apartment buildings, offices, hotels, amusement parks, restaurants, a spa and gym, as well as a yacht bay with space for 500 cruise ships.

Construction is expected to be complete in 15 years.

Making a case for river transport

The Minister of Transport, Dinh La Thang, said yesterday he would ask the Government for policies to attract investment to inland waterway facilities.

Thang told a conference on boosting water transport throughout the Hong (Red) River Delta that it was necessary for agencies and localities to recognise the role of inland waterways in helping create a balance among different modes of transport.

He said river haulage generally cost less than road or rail transport and could carry super-long and super-heavy loads.

In the delta region, water transport had huge potential because it involved 10 out of the 18 main river routes in Viet Nam and had a total length of 1,550km of rivers and canals.

The region is also home to economic hubs such as Ha Noi, Hai Phong, Quang Ninh which have high demand for coal and building materials.

River transport carries about 25 per cent of total goods transported in the region.

Minister Thang said that to take full advantage of river transport, he would give priority to projects to open new routes and canals linking up with road and marine transport.

A representative from the Waterway Transport Company (VIVASO) said that little money had been spent on river transport or adjusting and dredging rivers and canals.

Some routes faded in the dry season because of low river levels. In some cases, the space between the river and bridges was too low for boats to pass.

He said investment could bring great economic benefits. For example, to carry one tonne of goods by road from Ha Noi to Viet Tri cost VND4,000, only VND500 by river.

He added that the link between rail and rivers also needed adjusting because both systems offered cheap transport.

"However, logistic costs or costs to load or unload goods and carry goods from trains to boats and vice versa are too high," he said.

Pham Minh Nghia, chairman of the Viet Nam Inland Waterway Transportation Association, said that now was the time to improve public awareness about inland waterway transport as cheap, fast and safe.

In Belgium, England and the Netherlands, waterways were first choice for transporting extra-long or heavy goods.

In Viet Nam, inland ports and ferries were small scale and scattered, he said, emphasising that it was crucial to develop proper facilities with customs areas, storage and road links.

He noted that waterway tourism had developed well in the south, but not in the Red River Delta.

Deputy director of the Directorate for Roads, Nguyen Van Quyen, said that about 70 per cent of goods and 90 per cent of passengers were transported by road, creating an imbalance among transportation modes.

To reduce overloading on roads and cut costs, harmonious development of different transport modes was needed.

He suggested setting up a trading floor for the transport sector where transport firms, logistic firms and goods owners could operate.

The floor could help create healthy competition and reduce costs - including bribery.

Crimes at major banks prompt call for oversight

The Prime Minister Nguyen Tan Dung told the State Bank of Viet Nam to increase supervision at credit institutions to ensure a safe and sound monetary system.

The PM gave the directive following the arrest for criminal investigation and temporary detention of three former senior officials of the Viet Nam Bank for Construction (VNBC) last week, and the detection of other wrongdoings at some big banks.

According to the Ministry of Public Security's Investigation Police Agency, the three former officials of VNBC were arrested for allegedly violating Viet Nam's Penal Code's Article 165. The Article deals with deliberate acts against the State's regulations on economic management, leading to serious consequences.

The three arrested persons are Pham Cong Danh, 49, former chairman of VNCB; Phan Thanh Mai, 43, former member of VNCB's executive board and general director; and Mai Huu Khuong, 31, former member of VNCB's executive board, in charge of finance.

Thanh Nien Daily's sources said that preliminary investigation found that the accused used a savings book of the Tan Hiep Phat Group to deposit 39 loans at VNBC, and made transactions without the signatures of the account holders for personal gains. The fraud involved more than VND6.6 trillion (US$311 million).

Earlier on July 25, the State Audit of Viet Nam's (SAV) 2013 report hinted at dubious operations being done by big lenders.

Agribank, one of the big four credit institutions in terms of assets, reportedly violated the safety ratio of united capital, which is the ratio of due-date payment capacity to seven-day payment capacity. In 2012, its return on equity (ROE) was 5.39 per cent, a sharp drop compared to 7.11 per cent in the previous year. At the end of 2012, Agribank reported credit growth rate of 10.22 per cent, but its bad debt ratio was 8.16 per cent, surging by one-third year on year.

In terms of deposit activities, three of the big four banks, namely Vietcombank, Vietinbank and Agribank, were marked down for exceeding the deposit cap set by the central bank.

In the July Government Meeting Resolution issued on Monday, PM Dung told the central bank to hasten restructuring at commercial banks and to accelerate the speed of the process of resolving bad debts.

The bad-debt ratio in Vietnamese commercial banks rose in the first half of the year to 4.84 per cent in late June 2014, from 3.61 per cent in late 2013. The SBV reported last week that the total amount of bad debts stood at VND240 trillion ($11.3 billion).

Lending drive reconciles banks to losses

Under pressure to achieve their growth targets, many banks are now ready to take losses to boost lending and are offering loans at very low interest rates, according to analysts.

State Bank of Viet Nam data shows that the banking sector achieved credit growth of 3.52 per cent as of June 30.

But the central bank remained determined to pursue a target of 12-14 per cent for the year, Nguyen Thi Hong, director of its Monetary Policy Department, said.

The analysts said this put banks under great pressure to push up credit activities even at the likelihood of making losses.

SeABank, for instance, which achieved credit growth of 6 per cent in the first half, has slashed lending rates to attract borrowers.

Its general director Dang Bao Khanh said the bank offered long- and medium-term loans at just 6 per cent interest for the first six months.

"The bank also has several other credit packages with interest rates that could cause a ‘shock' to customers.

"Between April 1 and June 29 the first borrowers could enjoy a zero interest rate for the first 12 months.

"With such low interest rates, the bank will make a certain loss from new loans."

But the rate cut was imperative since banks found it very difficult to lend now, especially to well-performing companies, which are the target of most banks, he said.

OceanBank recently earmarked VND2 trillion (US$94.14 million) for companies that want to bolster their working capital at an interest rate of just 7 per cent for the first three months.

ABBank has joined the race, offering personal loans worth VND1 trillion ($47.07 million) at 8.5 per cent for the first 12 months.

LienVietPostBank is prepared to lend VND2 trillion for various terms at interest rates starting from zero per cent.

A bank executive in HCM City, who asked not to be named, said to attract borrowers many banks were ready to lend at 6 per cent or even 5 per cent. Meanwhile, the interest rates on deposits of 12 months or more were 7-8 per cent.

"This means that the banks are making losses," he said.

"Some companies are taking advantage of the interest rates difference to make profits: They borrow from this bank and deposit the money at another bank.

"This phenomenon is not good for the economy since … the money is not pumped into the economy."

The analysts said the banking sector faced a difficult task in achieving the credit growth target because demand was very low.

Interest rates were not a central factor in deciding credit growth, they said, adding that the growth relied on the demand and enterprises' ability to absorb capital.

OceanBank deputy general director Vu Nhat Lam concurred, telling Business Times newspaper that whether or not capital can be pumped into firms "depends on the efforts of both the banks and enterprises."

"The former need to simplify lending procedures and the latter must prove their capacity to use the money effectively and earn profits."

Vietnam aquatic products stay strong in global market

Vietnamese aquatic products are gaining a firmer foothold in the global market as evidenced by healthy growth in export to both traditional and new markets.

In the first seven months of 2014, the country’s aquatic exports picked up 24.5 percent from a year earlier to 4.2 billion USD with the US, the EU, Japan, the Republic of Korea (RoK) and China as top importers.

Such a pace was fuelled by strong shrimp shipments which saw double-digit growth in many markets, said the Vietnam Association of Seafood Exporters and Producers (VASEP). Shrimp export to the US and the RoK even posted three-digit increases.

In the first half of this year, white-legged shrimp brought home 1.06 billion USD, shooting up 133 percent compared to the same period last year.

Shrimp exports for the period almost reached 1.8 billion USD, a year-on-year increase of 62 percent, and accounted for 49.5 percent of total export revenues from aquatic products.

Nguyen Huy Dien, deputy head of the Directorate of Fisheries under the Ministry of Agriculture and Rural Development, attributed the achievement to stable material supply and good control over diseases of shrimps.

Rising demand also pushed the export of other kinds of crustacean, squid and octopus up by 14 – 21 percent.

Meanwhile, Vietnam’s efforts to ensure the quality of its products have been paid off.

To satisfy strict quality regulations by importers such as Japan, the US and the EU, relevant agencies have closely monitored the trading and the use of substances used in aquaculture, helped farmers with professional techniques, and imposed sterner rules on cultivation.

At present, some 100 tra fish farms covering more than 2,800ha of water, about 40 percent of Vietnam’s tra fish farming area, have received sustainable production certificates such as VietGAP, ASC, BAP, SQF 1000/2000 CM. Notably, 2,000ha of them have been confirmed as meeting GlobalGAP standards.

All frozen food processing companies in Vietnam have satisfied the national food safety standards and are operating under the HACCP quality management system, eligible for exporting their products.

Among them, 415 (or over 73 percent) seafood processing plants in the country are qualified for shipping their goods to Europe.

Notably, Vietnam is piloting a tuna production chain following Japanese standards in three central provinces, namely Binh Dinh, Phu Yen and Khanh Hoa.

The shipment of aquatic products has also been assisted by trade promotion in potential markets as well as active negotiation with foreign partners to enhance cross-border activities and deal with trade barriers.

VASEP predicted that aquatic exports will continue the upward trend in the third quarter to hit 2.1 billion USD, including 1.2 billion USD from shrimps, as foreign demand is expected to increase in the holiday season at the end of the year.

Nghe An focuses on developing breeding farms

The central province of Nghe An plans to effectively develop breeding farms as they are suitable for the local natural conditions.

In the past, the animal husbandry in Nghe An was characterised by small scale and scattered breeding. Even in some mountainous districts, buffaloes and cows were let wander in forests while pigs and chicken in residential areas.

This breeding habit not only reduced productivity but also spread diseases among livestock and poultry and caused environmental pollution.

To improve its livestock industry, the province has rearranged breeding farms and encouraged businesses to get involved in building large-scale breeding models. Farmers have been given loans to develop their concentrated breeding farms.

Nghe An has also coordinated with relevant agencies under the Ministry of Agriculture and Rural Development in selecting breeding animals that can produce high yield and adapt to local climate conditions as well as sent veterinarians to all communes.

Thanks to these efforts, the province has to date developed 380 breeding farms, including 90 pig, 32 poultry and over 210 cattle farms.

It now has more than 29,700 dairy cows, expected to produce 100,000 tonnes of fresh milk this year.

Number One factory starts operations in Ha Nam

The Tan Hiep Phat Group has started operating the first phase of the Number One beverage factory in the northern Ha Nam province.

With this, the factory has become the largest non-alcoholic beverage factory in northern Vietnam.

Spread over 26 hectares in the Kien Khe 1 Industrial Park, the Number One factory has been built with a total investment of 1.78 trillion VND (84.76 million USD) and has European technology capable of producing 600 million litres of the beverage annually.

The project is divided into two phases. The 2012 -17 phase will have five production lines, while the 2018-22 phase will have six lines.

Once becoming fully operational, the factory will create jobs, offering an average monthly income of 5.5 million VND (262 USD) for about 2,000 local workers.

Garment group furthers investment in local market

The Vietnam National Textile and Garment Group (Vinatex) is striving to gain a firmer foothold in the domestic market by expanding its distribution system and increasing the quality of its products.

This year, the group is working towards a rise of 12 percent in total revenue, of which 30 percent will be contributed by domestic sales.

Tran Viet, head of the marketing department of Vinatex, said the local garment market is promising as domestic consumption for clothing and fashion accessories only ranked after food and foodstuff.

In the first six months of this year, the group’s domestic revenue is estimated at 11 trillion VND (517 million USD), a year-on-year increase of 10 percent.

According to the group’s statistics, each Vietnamese consumer spends between 150,000 VND and 500,000 VND (7-24 USD) on clothes and fashion accessories every month, accounting for 18 percent of his or her monthly consumption.

Vinatex General Director Le Tien Truong said that to seek a firm foothold in the local market, garment companies have to enhance their localisation ratio to 60 percent by 2015.

To that end, the group has increased investment in upgrading technology in order to increase production and renew designs.

Than Duc Viet, Deputy General Director of Garment 10 – a Vinatex subsidiary, said that his company has paid attention to technology investment and cut production costs to supply domestic products at competitive prices.

Expanding the distribution network is also one of the solutions to ensure Vinatex products get closer to local consumers. The group now has more than 4,000 shops in the country. However, Truong said domestic products have sought a firm foothold in medium and high-end segments only, while locally-made products are not capable of competing with cheap imported ones.

Phan Chi Dung, Director of Light Industry Department under the Ministry of Industry and Trade, said Vietnamese garment companies need to make more efforts to compete with imported ones on home turf, while paying more attention to developing the retail network across the country.

Garment companies need to work out policies to further invest in designing and applying new technology to produce high-quality and specialised products, he added.

Coal industry aims to increase production in H2

The Vietnam National Coal Mineral Industries Group (Vinacomin) has adjusted this years’ coal production and consumption plans as domestic coal consumption in the second half of 2014 is expected to rise.

The group set a target to increase the clean coal output by one million tonnes to over 35 million tonnes and coal consumption to 35.5 million tonnes, up 500,000 tonnes.

Vinacomin’s reports showed that the group turnover from coal and electricity production in the first half of this year (H1) was approximately 55.3 trillion VND, representing 52 percent of the years’ plan and 18 percent year-on-year increase. The group also guaranteed jobs for 126,000 laborers.

Vinacomin's General Director Le Minh Chuan said coal consumption in H1 of the group reached 18.6 million tonnes, equal to 54.1 percent of the years’ plan, including 3.9 million tonnes of exported coal and 14.7 million tonnes of domestic consumption. Coal inventory level until the end of June was 7.5 million tonnes, down one million tonne compared with early this year.

Some member companies of the group have made significant contributions to Vinacomin’s growth during the period such as the Underground Mine Construction Company II and Mong Duong Coal Joint Stock Company.

Le Minh Chuan said in H2, Vinacomin strives to increase turnover by five percent, implement technological innovation to improve capacity, reduce product prices and increase wages for workers from 5-10 percent. The group has also adjusted coal exploitation up one million tonne and coal consumption up 500,000 tonnes compared with the earlier plan, including domestic consumption of 28 million tonnes and export of 7.5 million tonnes.

It is expected that in H2, the domestic coal consumption will not see sudden changes. However, with the recovery of construction material market, notably the operation of five cement plants at capacity of 8.1 million tonnes, there will be more opportunities for coal consumption in the coming period.

At the Vinacomin’s conference to sum up its production and business activities in H1 and task implementation in H2, Minister of Industry and Trade Vu Huy Hoang stressed: “The coal industry has to keep making efforts, resolving difficulties to complete its set targets as the coal industry could affect other sectors such as building materials, fertilizers and people’s daily activities.” He also asked the group to accelerate its restructuring and focus on its core businesses.

ODA disbursements reach US$ 3.2 bln by first half 2014

The Official Development Assistance (ODA) and preferential loan capital disbursements in the first half of 2014 were US$ 3.2 billion, reaching 58.7 percent of this year goal and up 46 percent compared to the same period last year, according to the Ministry of Planning and Investment

Additionally, the total ODA and preferential loan capital in the first half of 2014 gained US$ 2.25 billion.

At the meeting of the national steering committee presided by Deputy Prime Minister Hoang Trung Hai, he asked the relevant agencies have to continue to check, supervise and speed up tasks of campaigning, managing and using ODA and contracted preferential loan capital for this year.

Low interest loans needed to replant aged coffee fields

The Vietnam Bank for Agriculture and Rural Development (BARD) should lower interest rate and facilitate farmers’ loan access to replant a large area of aged and low-yield coffee area in the Central Highlands, said Mr. Trinh Tien Bo, an official from the Department of BARD in Dak Lak Province.

About 50,000 hectare coffee plants in Dak Lak, the largest coffee growing province in the Central Highlands, are getting old and yielding very low productivity. Of these, only 6,287 hectares have been replanted for the last two years.

A lot of households are short of capital for replanting, said Mr. Bo.

BARD has approved the credit package worth VND8-10 trillion for a coffee replanting program in the Central Highlands for the 2013-2015 period.

However, the package’s disbursement is very slow because of high interest rate, he said.

According to the Coffee and Cocoa Association, Vietnam has 622,000 hectare coffee plants, which mainly concentrate in the Central Highlands with an output of nearly 1.4 million tons. Of the total, 86,000 hectares are over 20 years old and in urgent need of being replaced.

However the process has been too slow. Only 2,000 out of 25,000 hectares older than 20 years have been replanted for the last three years.

Lam Dong, the second largest growing province in the Central Highlands, has replanted most with 8,500 out of 150,000 old hectares.

Grower Hoang Van Lam has one aged coffee hectare in Cu Kuin District, Dak Lak says it costs as high as VND150 million to replant a hectare and the newly grown area will bear fruits after three years.

Farmer Nguyen Van De from Cu M’gar District last year destroyed and replanted 1.5 hectares of 30 year old coffee field. However the surviving ratio is only 20 percent. He hoped that banks would provide low interest loans in three years when the new plants are ready for harvest.

Industry insiders are mulling strategies to boost 4G services in Vietnam at more reasonable costs.

Qualcomm Vietnam CEO Thieu Phuong Nam said terminal equipment cost was an important issue to mobile network operators when they consider investing in 4G.

Nam argued that the volume of terminal 4G equipment would soar on the back of 2014’s booming deployment of 4G services worldwide. This would help reduce terminal equipment cost.

In fact, current 4G terminal equipment fetches a fairly high price, but the cost of each unit of equipment was expected to drop to $150 each by the end of this year, and further slide to $100 in 2015.

The Ministry of Information and Communications (MIC) is considering using low frequency bands to help firms save on initial expenditure, which would lower investment costs and end users’ 4G service costs.

Huawei Vietnam CEO Yuan Song suggested promoting 4G in urban locations or areas without fixed bandwidth, but not on a massive scale due to costly investment and limited subscriber count.

In terms of how to boost 4G service revenue, LTE Business Group vice president Qin Liang at China’s Huawei suggested network operators apply diverse value added services to increase data usage services by subscribers and thereby boost revenues.

“Also, voice services on 4G are often lower quality than on 2G, which has a lower service cost. Operators therefore must change their business models when implementing 4G,” Qin noted.

Statistics by the global association for the mobile telecoms industry (GMSA) show that 279 networks in 115 countries and territories are using 4G, and that this number may increase to 350 networks by the end of this year.

Mobile subscribers reportedly represent 56 per cent of total telephone subscribers, putting Vietnam near the top of mobile subscriber counts among countries in the Asia-Pacific region.

This is regarded as a significant strength for network operators promoting 4G.

Ministry seeks ways to secure new rice export contracts

The Ministry of Industry and Trade has urged Vietnamese rice exporters to promptly manage the volume of rice exports and stockpile, thus accelerating the signing of new contracts by the year-end.

The request was made in the context that the amount of rice exports through sub-border gates in northern provinces have been out of control.

Given this situation, the ministry has partnered with customs office and related agencies to inspect the cross-border export of rice.

The ministry has also coordinated with the Ministry of Agriculture and Rural Development, the Vietnam Food Association and food companies to review the rice supply as well as signed rice export contracts. Then it will propose rice export scheme in the time to come.

In the first seven months of this year, Vietnam exported about 3.861 tonnes of rice, representing decreases of 7.9 percent in volume and 4.8 percent in value over the same period last year.

In June and July, rice exports dropped about 30 million USD each month compared with that in previous months.

To date this year, domestic rice exporters have signed contracts to sell 5.3 million tonnes of rice.

Moody’s upgrades credit ratings of BIDV and Vietinbank

Credit ratings agency Moody’s has upgraded by one notch the long-term deposit and issuer ratings of BIDV and Vietinbank, two of the largest commercial banks in Vietnam.

In a statement on its website, Moody’s said the upgrades are due to a more stable outlook and they reflect a systematic reassessment of the deposit ratings of Vietinbank and BIDV.

The reassessment came following Moody’s upgrading of the Vietnamese Government’s issuer and senior unsecured bond ratings from B2 to B1 and the upgrade of the long-term foreign currency deposit ceiling from B3 to B2.

Moody’s said the upgrades were driven by the Government’s enhanced capacity to provide extraordinary support to these two banks, which it considers as critically important to the domestic banking sector with market shares of assets of around 10% each at the end of 2013.

Vietinbank and BIDV currently have 64.5% and 95.8% of their respective shares owned by the State, added Moody’s.

It noted that Vietnam’s stronger capacity to offer support to large banks is a result of its improved macro-economic stability, strengthened balance of payments and external payments position, as well as reduced risks in the banking sector.

In its latest report, Moody’s also kept its ratings unchanged for another seven Vietnamese banks, including Techcombank, ACB, Military Bank, SHB, Sacombank, VIB and VPBank.

Cooking gas prices to fall in August

Retail cooking gas prices will be reduced by VND 1,000 per kilogram in August due to falling prices on the world market, according to several companies in HCM City.

Saigon Petro said that they have reduced the price of SP gas by VND 12,000 to VND 384,000 per 12-kilogram canister, beginning August 1.

Do Trung Thanh, deputy head of Saigon Petro’s Business Department said, that the price cut was a result of a USD 40 per tonne fall on the world market in August.

The price of gas was remained stable in July despite a fall of USD 5 per tonne for imported gas. Local trading companies attributed the situation to an increase in the value of the USD against the VND imposed by the state bank.

Fruit and vegetable imports fly under radar of inspection

Food safety inspection teams have been facing difficulties in inspecting fruit and vegetable imports as a result of lack of funding and skilled staff.

Recently, this problem was brought into the public eye when it was reported that a 280 tonne batch of fruits imported from China in 2013 failed safety inspection. The fact that, at the time this was first reported, the large batch of fruits had already hit the Vietnamese markets and was being sold, compounded public worries over import inspection policies.

Nguyen Xuan Hong, director of the Ministry of Agriculture and Rural Development’s Plant Protection Department, said that the inspection of that batch of fruits was, in fact, in accordance with Vietnamese regulation. He said that fruits and vegetables entering Vietnam for sales are subject to inspection, but that only 10% of each load is randomly selected for testing. Because testing takes ten days, the goods are allowed into the country for distribution before the results come back.

During the period when authorities are waiting for the results, distribution of the produce is monitored but not controlled. If the results show any violation in food safety regulations, the next loads from that importer would have their goods subject to 30% testing. The importer would also have to wait for a maximum of ten days, pending the test results, and pay for storage of the goods during that time.

“In cases of normal inspections, in which produce has been found to slightly exceed the limits of harmful agents, there is not serious risk for harm," Hoang noted.

Many, however, remain worried about the department's inspection policies.

Hong admitted that the state budget for examination of imported fruits and vegetables is modest. The figure was around VND7.5 billion (USD353,107) in 2012, which fell to VND2.5 billion (USD117,702) in 2013, and VND2 billion (USD94,161) in 2014.

“The lack of resources has forced us to limit our inspections to fresh vegetables and fruits because of the large volume and high costs of inspecting other goods such as dried beans. It would be great to double our funding to around VND5 billion (USD235,404). That way we could inspect all imported products,” he stated.

The process also suffers from a lack of modern equipment and facilities at the borders. Because there are no labs located at border crossing points, vegetable and fruit samples must be sent to the labs in Hanoi or HCM City, and results take from three to five days to come back.

The lack of funding also means that there is not enough to purchase new equipment or train staff thoroughly. Recently, Cao Duc Phat, minister of Agriculture and Rural Development (MARD), approved a plan to invest VND33 billion (USD1.55 million) in purchasing equipment and machines at labs and training staff in 2015.

“We really lack a skilled workforce capable of conducting reliable inspections. Due to the limited targets for hiring state employees, the current staff are compelled to work overtime and on weekends and holidays,” he added.

Filling station employees found fleecing customers

A DTiNews investigation found employees at yet another petrol station have been using their pumps to steal from customers.

After several days of investigation, reporters caught two employees at a petrol station at No. 199 Minh Khai Street in Hanoi have been regularly stealing money from customers by pumping less gasoline that what was paid for.

These employees would take advantage of customers who do not pay attention to the meter when they arrive at the pump, and begin filling tanks starting from the amount the last customer paid instead of clearing the meter back to zero. During the time reporters were monitoring the situation, these employees skimmed an average of VND5,000 from each fraudulent transaction.

In the video taken of this activity, the victim wearing white-blue t-shirt was obviously cheated. When the staff is pumping petrol for him, the gauge started at VND70,110 and suddenly stopped at VND115,160, selling the customer VND45,050 out of the ordered amount of VND50,000.

DtiNews has conducted similar investigations in the past, in which we exposed scams being run at stations located at 343 Pham Van Dong Road in Cau Giay District and on Nghiem Xuan Yem Road in Thanh Tri District.

For years, public concerns have been raising over the misconducts by petrol stations; however, local authorities have yet to take comprehensive measures to improve the situation.

VietJet Air compensates passengers for delay

VietJet Air has compensated hundreds of passengers whose flight was delayed by 10 hours on August 2.

The flight from Hanoi to Buon Ma Thuot was scheduled to depart at 12:20am on August 2, but was delayed twice due to bad weather, but the carrier was not able to conduct the flight at the rescheduled time.

Passengers received two light meals, but most passengers were still very upset because of the the long wait. Many requested that they be rescheduled on another airline.

A VietJet Air representative said that, due to the bad weather, another flight from HCM City to Vinh had to land at Danang Airport, which affected the flight from Hanoi to Buon Ma Thuot.

Vo Huy Cuong, deputy head of Civil Aviation Authority of Vietnam, said that the delay was due to the fact that VietJet Air lacked aircraft.   The flight finally left at 10:20pm on August 2, 10 hours behind schedule.

VietJet Air has compensated each passenger with VND300,000 (USD14.2).

Under current regulation, a flight is considered late when the departure time is more than 15 minutes later than scheduled.

Ministry suggests unprecedented incentives for supporting industries in Vietnam

The Vietnamese Ministry of Industry and Trade has completed adraft decree on developing supporting industries with the largest-ever incentives in order to give a real boost to the sector considered vital to modern manufacturing industries.

The ministry has stressed the need of incentives for those operating in the supporting industry area as the sector is still in a very primitive stage. This is emphasized from the beginning of the report on the draft decree that will be submitted to the government.

Vietnam currently has only 656 enterprises producing spare parts compared to 58,000 businesses operating in the manufacturing industry - a very small number.

Meanwhile, after studying many aspects, the ministry underlined that without multi-faceted support from the state, it is very hard for local businesses operating in the field to have the chance to be involved in the supply chain of multinational corporations investing in Vietnam.

Moreover, according to the ministry, the underdeveloped state of the local supporting industry has resulted in increased production costs, the risk of bigger trade deficits with foreign partners and low competitiveness of Vietnamese products compared with regional peers due to the imports of components and spare parts, mostly from China.

The top incentives include the exemption of business income taxes for organizations and individuals operating in the field or taking part in the transfer of supporting industry technologies, according to the draft decree.

Specifically, those participating in the process will enjoy corporate income tax exemption for up to four years, and the tax rate will be cut by half in the next nine years.

They will also be refunded up to 50 percent of their capitals if investing in technologies in pollution treatment and environmental protection.

In addition, if their bases are located outside industrial zones, the land rent will be reduced by 50 percent for 11 years.

The state will also support a maximum of 50 percent of funding for the training costs of technical staff of businesses operating in support industries. Each employee is trained only once with a training period lasting no more than six months.

The state budget will also support a part of the cost of advertising in mass media and registering trademarks for the businesses' operations. The funding to participate in the local and international trade fairs and access market information will also be partly covered by the state.

There will also be a pilot program lasting until 2020 that will cut 50 percent personal income tax for individuals working as specialists or trainers in technology transfer in supporting industries for a maximum period of one year.

The incentives also include exemption from import duties for goods imported to create fixed assets for production and products of supporting industries.

The lending rate for projects in supporting industries will enjoy a preferential rate that will not exceed the maximum rate of 80 percent of normal rates for loans with a maturity period of up to 10 years.

Those who join a cluster of supporting industries will be allowed to pay land rent for one time or multiple times. If businesses choose to pay once for all, the rate will be cut by 20 percent.

The development of supporting industries in clusters will achieve the maximum synchronization capacity, optimize the supply and manufacturing process for the final products, and accelerate the allocation of labor and the specialization of labor to a higher level, said the ministry.

As a result, many preferential policies will also be available for investment in the development of industrial clusters.

There will also be centers for the development of supporting industries to be established across the nation.

The support center will help reduce costs for businesses such as the costs of hiring experts, designing, production, product testing, and combined testing and checking of product quality standards to meet the norms of multinational corporations.

At the same time, they will help promote the consumption network inside and outside the country by connecting with local and multinational corporations.

The ministry said that those policies are needed to support this sector before 2018 when the regional free trade agreement takes full effect.

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