VAFI calls for tax on trading of gold bars

The Viet Nam Association of Financial Investors has called for a 10 per cent value added tax on gold bullion trading to prevent the ‘goldisation’ of the economy, which refers to people’s propensity to use gold instead of money.

In a report in the Viet Nam Financial Times on Monday the VAFI said the recent gold bullion auctions by the central bank were only a temporary solution to ensure supply for credit institutions and reduce the gap between global and domestic gold prices, and did not help fight "goldisation."

Most of the measures used by the State Bank of Viet Nam to manage the gold market were not used anywhere else in the world, it claimed.

They did not help check the "goldisation" but instead caused gold worth $22 billion to be kept idly by individuals and affected policies related to interest rates and foreign exchange, it charged.

No country in the world waived tax on gold trading, it pointed out.

The association also suggested that the central bank should gradually lower interest rates on foreign currency deposits to zero per cent and on foreign currency loans to 3 per cent.

This would enable the dong to appreciate, causing interest rates on both loans and deposits in dong to further drop.

The plunging interest rates would help the securities and property markets recover and enable businesses to get access to cheap funds and expand, it said.

Excess cement prompts production check

The Ministry of Construction has recommended the Government cancel many pending cement production projects and delay a number of others in order to align more closely with market demand.

In a report on the cement industry sent to Deputy Prime Minister Hoang Trung Hai this week, the ministry suggested the removal of nine planned cement plants, with an expected total output capacity of 4.15 million tones, from the nation’s Cement Industry Development Plan during 2011-20, which was approved by the Prime Minister a few years ago.

They also suggested that the construction of another seven cement production projects, which would produce a total of 9.73 million tones annually, be delayed until 2016.

The nation’s development plan for the industry was designed to accommodate yearly growth of 10-15 per cent, matching the rising rate of the industry in the period 2006-10.

However, according to the ministry, the output suggested in the long-term plan will far exceed domestic demand in the next two years, which has fallen due to the country’s economic difficulties.

Demand fell by 15 million tonnes in the last two years from the output stated in the plan, but despite this new cement production plants have continued to be developed, causing an excess which will reach 25 million tonnes by 2015. The redundant figure would rise to 40 million tonnes by 2020 when the sector is producing 129.5 million tonnes.

Chairman of the Viet Nam Construction Materials Association Tran Van Huynh said last year was stormy for cement businesses and the situation does not look to improve. He warned that if no drastic changes are made, more Vietnamese cement companies will face the prospect of bankruptcy.

The association’s statistics showed that last year alone, coal and power prices surged 10 and 20 per cent respectively and prices of some other input materials also increased by more than 7 per cent. Compounding things further is the falling demand for cement, causing many plants to post losses and consider closing their doors, he said.

Survey condemns quality of companies’ financial reports

The evaluation of the quality of the financial statements of companies depends heavily on auditing firms but auditors are not responsible for fraud of companies and they have little ability to prevent swindling.

According to Bui Van Mai, vice chairman of the Viet Nam Association of Certified Public Accountants (VACPA), auditors can help companies find out data errors and shortcomings during the process of making reports, as well as consult and help companies improve their management systems.

"However if they wish to swindle, auditors are not responsible for detecting and making conclusions on such fraud," Mai was quoted as saying on the Thoi bao Ngan hang (Banking Times) newspaper.

According to market insiders, the responsibility is in the hands of the company’s board of directors and its internal control department.

However, the role of board members in Vietnamese companies is more for execution rather than strategic management and supervision. Meanwhile, the roles of internal control departments are weak.

The Corporate Governance Scorecard 2012 of the State Securities Commission showed a disappointing result in which overall points of all surveyed businesses were below 60 per cent while the average score was 42.5 per cent, lower than the two previous surveys which scored 43.9 per cent and 44.7 per cent, respectively.

The annual survey rated quality of corporate governance of 100 listed companies on both HCM City and Ha Noi stock exchanges which represent 80 per cent of total market capitalization.

Following the 2012 survey, economic woes pushed many domestic companies into financial difficulty and many attempted to conceal their weak business results.

The report concluded that the information in the reports was incomplete and much more formal.

Experts say the most important thing is that shareholders should be aware of and utilise their authority in supervising operation of their businesses.

They should be strict in the matters of appointment of independent auditors, ask for information from board members as well as information in the financial statements. They are also encouraged to participate in shareholder meetings.

In addition, Le Thi Thao, from the Law Faculty of University of Hue, suggested to empower independent directors to increase their control over the performance of boards of directors as well as increasing the responsibility and power of the internal control department to support their supervisory role.

In an attempt to help listed companies improve their corporate governance, the Ha Noi Stock Exchange recently announced a plan to organise fact-finding tours for its listed companies to the Thai Stock Exchange to learn about the Thai system of managing information of listed companies as well as how the system can help strengthen the company corporate governance.

Earlier this year, a similar tour was organised by the HCM City Stock Exchange to Bursa Malaysia with the support of Maybank Kim Eng Securities Co.

VN Airlines announces new S Korea route

Vietnam Airlines will launch a direct air route between central Da Nang City and the South Korean (Republic of Korea) city of Incheon on July 1.

Chief Representative of the carrier’s South Korean branch Cao Anh Son announced the plan in Seoul on Thursday on the sidelines of the 26th Korean World Tourism Forum.

Using Airbus A321, the carrier will provide two-way direct flights on the route on Mondays, Thursdays and Saturdays.

Last year, Vietnam Airlines’ South Korean branch catered for 640,000 passengers travelling between the two countries, accounting for 20 per cent of the carrier’s international passengers and up 6 per cent from 2011.-

Firms need to prove themselves

Enterprises who wanted to access bank loans needed to actively demonstrate their operating capacity, efficiency of their business plans and their ability to pay loans.

The advice came from the Viet Nam Chamber of Commerce and Industry general secretary Pham Thi Thu Hang.

The lending interest rates were recently slashed to between 8-12 per cent – the level of the 2005-06 period. That meant interest rates were no longer hindering firm’s access to bank loans, head of the State Bank of Viet Nam’s Monetary Policy Department Nguyen Thi Hong said.

Each enterprise should restructure its business in an attempt to better convince banks about the feasibility of its projects as well as to prove its cash flows, she said.

Both enterprises and banks had encountered business difficulties, said VPBank general director Nguyen Duc Vinh.

"We are willing to lend to the firms but with certain conditions," he said.

Banks would take into account the firm’s operating capacity, mortgage assets and specific plans for loan disbursement.

He emphasised the importance of more effective assistance from the State and sectors in order to bring banks and enterprises closer.

SME development fund

A fund for small and medium-sized enterprise (SME) development will be set up with a total charter capital of VND2 trillion (US$95 million).

The move aims to enhance the competitiveness of these enterprises and to create more jobs.

Functioning as a State financial organisation under the management of the Ministry of Planning and Investment, the non-profit fund is responsible for managing and using financial resources to support SME development.

To get the financial assistance, SMEs must meet a number of conditions, including having feasible production or business plans in line with the fund’s list of priority areas.

The maximum loan for each project will not exceed VND30 billion ($1.4 million) and must be repaid within seven years. The establishment of the fund is part of a bigger programme on SME development in the 2011-15 period.

Bank gets go-ahead to raise charter

The Joint Stock Commercial Bank for Investment and Development of Viet Nam (BIDV) has got approval to raise its charter capital in the first phase of 2013 from VND23.012 trillion (US$1.1 billion) to VND28.112 trillion ($1.34 billion).

The Ha Noi-based bank shall increase its charter capital through paying share dividends and issuing new shares to existing shareholders.

The charter capital increase will be implemented in accordance with a plan approved by its annual general meeting on April 26, 2013, and with a resolution of the board of directors dated May 27 this year.

The approval will be valid within 12 months. In case BIDV does not raise its charter capital within the terms of the decision, and its shareholders approve a change in the plan to hike charter capital, the approval will expire.-

IFC supports efforts to make construction more energy-efficient

International Finance Corporation (IFC), a member of World Bank Group, will provide support to the Ministry of Construction to enhance energy efficiency in construction.

IFC will help the ministry create instructions and training courses for energy efficiency in construction and set up a strategy for the development of green construction in Viet Nam.

The programme, to be implemented over five years, aims to reduce energy consumption by 15 per cent for newly constructed buildings, helping Viet Nam cut greenhouse gas emissions by 8-10 per cent in the 2011-20 period.

Tech firm opens two offices in VN

Agilent Technologies yesterday announced the opening of two new offices in Ha Noi and HCM City in a move to expand its business in Viet Nam.

"As one of the fastest developing infrastructure and business regions in the world, Viet Nam is a critical component in Agilent’s key emerging markets strategy," said president of Agilent’s Life Sciences Group Nick Roelofs.

In Ha Noi, Agilent’s Advantage Services facility, a repair and calibration centre for electronic testing instruments, will serve customers spanning industries such as government, defence, education and manufacturing.

In HCM City, Agilent’s Technology Demo Centre is equipped with cutting-edge bio-analytical instruments used by scientists and researchers.-

Ben Tre Province stops idle projects

Southern Ben Tre Province’s investment promotion centre said it had revoked the investment certificates of four enterprises as they didn’t implement projects within a year after receiving licences.

Companies which were to stop projects are fruit juice producer Gia Nguyen, mechanics manufacturer Vastalux-Alpha, fruit processor Van Dat, and trade and tourism service dealer Hoang Ngoc.

Their projects had a total registered capital of US$26.6 million and were expected to cover a total area of over 74,000sq.m.

Celadon City project receives Singapore quality certificate

The Celadon City project in Son Ky Ward of HCM City’s Tan Phu District received a certificate of Construction Quality Assessment System (Conquas).

Conquas is a standardised system developed by the Singapore Building and Construction Authority to control project quality from groundbreaking until completion. The standard is frequently applied in Singapore, Malaysia and Australia.

According to Hoa Binh Corporation - the first contractor to be granted a Conquas Certificate in Viet Nam- Celadon City covers 80ha and is invested by Malaysian Gamuda Land Group and Sacomreal.

Hoa Binh is the main contractor of the Ruby Building, which has 1,448 apartments and shops.

Five FDI projects under construction in southern province

Among 11 registered property projects licensed for foreign direct investment in the southern province of Dong Nai, only five are being carried out.

The five projects are worth US$828 million, said the province’s Department of Planning and Investment.

Investors in another four projects with a total investment capital of $1.56 billion have cleared construction sites. The two projects not yet begun are the workers’ living area of Formosa Company and dormitory of Hyosung Vina.

The department said the two investors and owners of the would-be construction sites have not compromised on compensation payments.

The province’s statistics show office vacancies stand at 14,000sq m while there are 1,100 flats remaining for sale.

Work starts on first five-star hotel in northern tourist town Sa Pa

Viet Nam Investment Construction and Trading Joint Stock Corporation (Constrexim) on Thursday began construction of its five-star Indochina International Hotel in the tourism town of Sa Pa, northern Lao Cai province.

This is the first five-star hotel in Sa Pa, with investment capital of over VND287 billion (US$13 million).

Once completed, the hotel will cater for both domestic and foreign visitors with 156 rooms, plus meeting facilities and swimming pools.

Industrial harmony promoted

The Government needed to be more actively involved in both policy making and law enforcement to help promote harmonious industrial relations, labour experts have pointed out.

While acknowledging that a number of new provisions specified by the new Labour Code and Trade Union Law indicated the increased roles of upper-level trade unions and local labour organisations in promoting better industrial relations, experts complained that the provisions were lacking in specification, orientation and practicality.

"When we look at the Labour Code, it is difficult to find specifications on the Government’s role in solving industrial disputes," said Yoon Youngmo, chief technical advisor on industrial relations for the International Labour Organisation in Viet Nam.

Vi Thi Hong Minh, head of the Employers’ Society’s Office under the Viet Nam Chamber of Commerce and Industry pointed out that the Labour Code had provisions about harmonious industrial relations but offered no specific definition as to what a harmonious industrial relation should be.

There is also a provision about the roles of trade unions, employers’ associations and Government labour agencies regarding inspecting the implementation of the labour laws, but there are no specifications as to how it should be done.

Minh added that the new Trade Union Law came into effect over five months ago but specific guidance on violations of the law had not been issued.

Youngmo pointed out that the real role of the Government in promoting industrial relations was also absent.

"The Government only acts when strikes have already occurred, they don’t keep track of the real problem."

They should have been proactive rather than reactive, Youngmo said.

He added that Government mediators had not been fulfilling their roles because trade unions and employers could not access support from them.

Mai Duc Chinh, vice chairman of the Viet Nam General Confederation of Labour, said it would take time to promote the role of Government labour agencies in handling disputes involving industrial relations.

He said there were only over 400 labour inspectors throughout the whole country and more than 400,000 enterprises.

Nguyen Thi Dan, head of the Wage and Salary Division under HCM City’s Department of Labour, Invalids and Social Affairs, said it was a great challenge for labour management agencies to play a role in providing instruction for employers and employees regarding constructive dialogue, collective bargaining and harmonious industrial relations as specified in Article 4 of the Labour Code.

"Given that the Labour Code is not specific, labour management agencies must have highly experienced staff with a good knowledge of enterprises’ circumstances and practical experience of promoting industrial relations."

Dan pointed out that these limitations would inhibit the implementation of the Labour Code.

She added that frequent rotation of staff was also a challenge.

Despite the difficulties, Youngmo said that it was possible for the Government to get more actively involved in reducing disputes and preventing strikes.

He said most strikes occurred in a select number of companies, sometimes even repeatedly, so they were predictable.

Government mediators could make plans to deal with disputes in strike hot spots, and try to discover the root of the problem, he added.

According to the Viet Nam General Confederation of Labour, from 2008-11, Viet Nam witnessed nearly 2500 cases of wildcat strikes and 70 per cent of those occurred in FDI enterprises.

In 2010, there were over 400 cases, and in 2011 it peaked at nearly 1,000. Last year saw 550 strikes and during the first quarter of this year, 140 cases have been reported.

$4m project to develop industrial relations

A US$4 million project to develop industrial relations in Viet Nam was launched last Friday in Ha Noi, aiming to help employers and workers benefit from the new Labour Code and Trade Union Law.

The four-year project is titled "Support to development in industrial relations, wage fixing, and labour law implementation institutions and capacity in Viet Nam", and will receive financial support from the US Government.

It will be implemented by the International Labour Organisation (ILO) and the Ministry of Labour, Invalids and Social Affairs (MoLISA), among other relevant agencies.

The non-refundable official development assistance aims to promote effective enforcement of the new labour code, raise the influence of employers’ and workers’ organisations, promote collective bargaining and social dialogue, and develop the minimum wage law and a good wage fixing mechanism.

The new code is also expected to improve the mediation role of the Government to effectively deal with labour disputes and prevent wild-cat strikes.

VMS, IBM ink pact on cloud computing for mobile services

The Viet Nam Mobile Telecom Service Company (VMS) - owner of MobiFone - has become the first telecom service provider in the country to offer mobile solutions based on IBM’s cloud computing capabilities.

The solutions will be offered under a strategic co-operation pact they have signed, the two companies said in HCM City last Thursday.

Lack of protection over dodgy dealings raises red flag

The recent dispute between investors and a securities firm relating to abuses with investors’ money is again raising concerns about the lack of protection.

Two investors who deposited about VND900 billion (US$43 million) at Dai Viet Securities Co’s Ha Noi branch recently accused the company of using the money without their consent. They claim the money was secretly transferred to the account of the branch’s director, Dang Kim Thoa, without their request.

Lawyer for Dai Viet Securities Nguyen Thanh Cong told ttvn.vn that Thoa and his colleagues seriously violated company rules.

"(However) the company did not illegally appropriate customers’ money and we will pay the money back," Cong said.

The State Securities Commission will send an inspection team to check trading at the company’s Ha Noi branch.

After the incident, many investors expressed concern about the possibility of their money being used by securities companies without their knowledge. According to lawyer Le Duc Thang, head of Le & Dong law office, transferring investors’ money without their request violates Ministry of Finance regulations.

Phung Thi Thanh Ha, head of MB Securities Co’s risk-management department, said in many cases, leaders of securities companies did not know about the violations until clients complained.

According to market insiders, the misuse of investor funds can be avoided if every money transfer is controlled and compared with the clients’ request, data and signature.

They said that this should be done daily or at least monthly, but for many reasons, the regulation seems to be ignored at many securities firms.

VN firm launches community development investment

Hoang Anh Gia Lai Group last Friday kicked off its US$10 million investment programme of community development in a bid to improve life for people in Cambodia’s Ratanakiri province, where it is investing in agricultural projects.

In the first stages of the programme, the group provided free healthcare services to roughly 1,500 local people in the province’s Sre Aung Chhrong Commune; also offering gifts of rice, salt and sugar to 400 poor local households.

Under the programme, which will last until 2016, the group will also build up community cultural houses, schools, medical stations and roads in the province, besides giving sponsorship to local students to study teaching and healthcare in Viet Nam’s Gia Lai and Kontum provinces.

Tiger Air unveils promotion to mark anniversary

Singapore-based Tiger Airways and the Singapore Tourism Board are offering huge discounts on Viet Nam-Singapore tickets to mark the eighth anniversary of the low cost carrier’s operation on the route.

A one-way ticket to Singapore from HCM City and Ha Noi will be sold at VND88,000 and VND688,000 respectively from June 3 through June 9 for travel between October 9 and November 30.

Organic rice farmers go against the grain

Yesterday’s nice weather proved ideal for rice farmers in Chuong My District’s Dong Phu Commune as they set to work harvesting their crops, and it wasn’t just the sunshine that had them smiling.

Last year, these farmers made a commitment to completely avoiding the use of pesticides, herbicides and chemical fertiliser on their crops, and they are finally reaping the rewards.

This is the second season that they have foregone the use of chemicals after receiving the training of experts from the University of Tokyo and Ha Noi University of Agriculture.

"My rice is growing well," said Bui Thi Khuynh, 53. "We only used organic fertiliser for the crop and it is making a big difference."

Last year, the commune’s chemical-free crop was about 140 kilo for every 360 sq.m area. This year it looks as if that amount will rise to 170 kilos.

In fact, the productivity is mostly the same as in fields that are using pesticides and herbicides, and in some cases it is even higher.

However, this chemical-free method of farming is more labour intensive, as farmers need to weed at least three times during a crop season, whereas farmers who choose to apply herbicide only need to do this once. During harvest, Khuynh has to hire two or three other farmers to help, to whom she pays about VND200,000 (US$9 ) each per day.

"The most important thing is that our product is safe," she said. "I do the farming for my family’s consumption first and then I sell the rest. It is quite popular because it is better for your health and tastier than rice that has been sprayed with pesticides."

It is also potentially more lucrative. Last year, Khuynh’s rice was sold at VND25,000 per kilo, nearly double the price of normal rice.

Another local farmer, 67-year-old Nguyen Thi Ton, said that for the last few years local farmers have minimised the use of agro-chemicals as they had become more aware of the harm that they can cause to human health.

"If we overuse chemicals for crops, it will have a damaging long-term effect. We and our children eat the rice, but the problems might not become obvious for another 20 or 30 years. By then, the damage is done. We are willing to grow safer rice for ourselves, the next generation and consumers," she said.

Khuynh and Ton are from two of the 15 households in the commune that joined a project called ‘Improving Production and Marketing Capacity Improvement for Sustainable Agriculture, Farmers Empowerment, Rice Improvement and a Cleaner Environment’ (PAMCI-SAFE RICE).

Vice chairman of Dong Phu Commune People’s Committee Nguyen Van Bai said that farmers who had participated were happy to provide safe products for themselves and their consumers, who welcomed having more choice.

If they could find a stable market, they could expand the model and develop an agricultural brand for local safe rice, Bai said.

Dr. Kako Inoue from the Agro-Environmental Laboratory at the University of Tokyo said that when conducting research on the behaviour of farmers towards sustainable rural development in the Red River Delta, she found that many were overusing agro-chemicals in the belief it would lead to higher yields and reduced labour cost. Instead, it resulted in environmental and ecological degradation.

The subsequent PAMCI-SAFE RICE project encouraged farmers to produce rice without any agro-chemicals and to adopt the SRI (System of Rice Intensification) method to prevent pest damage and to achieve higher yields.

"Importantly, the project encourages farmers to eat their products themselves. We are not emphasising the economic value of safe crops. This is because we want farmers to continue their sustainable agricultural production for their own health. After that is established, they can share the remaining rice with society and make money for their efforts," Inoue said.

The project, funded by Japanese International Co-operation Agency, kicked off last May in the communes of Dong Phu, Dai Nghia and Dai Hung in the district, and will end in 2015.

The SRI is a technique to produce rice with less input (in the form of seeds, water and agro-chemicals). Seedlings are planted one by one, leaving more space than usual and intermittent irrigation is applied with less fertiliser and agro-chemicals. This technology sustainably provides a stable yield in harvest and a healthy paddy, resulting in less pest damage and heightened resilience against storms. The SRI method is also expected to reduce greenhouse gas emissions.

Farmers’ profits jump after switching to corn

Switching from low-yield rice to corn has brought higher incomes for farmers in the Mekong Delta province of An Giang, according to officials.

Over the past two years, many farmers in An Giang Province have been planting one corn crop and two rice crops on the same field each year.

Previously, they rotated three rice crops on the same field every year.

Farmers who participate in the rotating corn-rice crop model have harvested an average of 10.8-12.3 tonnes of corn per hectare, the highest yield in the country.

An Giang is the leader in the Mekong Delta province in switching from planting low-yield rice to corn.

Nguyen Ngoc Khai, head of the An Phu District Agriculture Extension Centre in An Giang, said farmers could earn an average profit of VND24 million (US$1,100) per hectare for a corn crop, three times higher than the profit of a rice crop.

Khai made his remarks at a seminar held on Wednesday in An Giang.

Mai Thanh Phung, deputy director of the National Agriculture Extension Centre, said the model should be developed in other provinces.

The deputy head of the Ministry of Agriculture and Rural Development’s Plant Cultivation Department, Pham Dong Quang, said the country had to import about 1.5-2 million tonnes of corn a year.

The country has a large demand for corn, he said.

"However, the Delta should produce corn at a selling price that is equal to the price of imported corn," he said, adding that the country’s corn was mostly purchased by animal feed producers.

The ministry has assigned the Plant Cultivation Department to rotate crop cultivation on paddy fields to increase farmers’ incomes.

Farmers have been encouraged to grow either two rice crops and another cash crop each year, or one rice crop and two cash crops.

If most farmers continue to plant three rice crops each year, rice diseases and poor soil conditions will persist, according to scientists.

Economy expected to grow 6% next year

The Ministry of Planning and Investment is drafting the PM’s Directive for designing the socio-economic development plan for 2014.

Under the draft document, the Government should focus on accelerating economic growth, restructuring, and growth model transformation among others.

The Government also needs to zero in on effectively addressing pressing issues, especially pro-longed complaints and denunciations, corruption, crimes, social evils, traffic accidents.

Enhancing the network of preventive medicine and strictly controlling medicine prices would continue to be high priorities.

Specific targets include the economy expanding at around 6% and inflation under 7%./.

VN, South Africa to sign aviation cooperation deal

Viet Nam and South Africa will sign an agreement on civil aviation cooperation after transport officials from the two sides met in Pretoria on May 30.

The draft agreement includes 22 articles which cover transport rights, aviation security, flight frequency, taxes and fees and payments.

This is the first direct round of talks on aviation ties between the two countries, according to Vo Huy Cuong, Deputy Head of the Civil Aviation Authority of Viet Nam.

The agreement is expected to facilitate tourism, trade and investment linkages between the two countries.

Aquatic exports to Africa continue to rise

Vietnam ’s aquatic export turnover to Africa reached 30.3 million USD in the first quarter of this year, up 15 percent against the same period last year.

Last year, the turnover to 25 African countries hit 150 million USD, a 38 percent surge from 2011, with key exports including Tra and Ba Sa fish, shrimp and tuna.

According to the African, West and South Asian Markets Department under the Ministry of Industry and Trade, Vietnamese exporters have a good opportunity to promote aquatic exports to African countries as the nations have to import numerous aquatic products to meet their domestic demand and their aquaculture industry is underdeveloped.

Vietnamese exporters are even able to study the possibility of implementing aquaculture projects in the continent and exporting aquatic products to surrounding countries.

Moreover, the profuse domestic supply of Tra fish at stable prices facilitates Vietnamese exporters’ trade with the continent.

Egypt has become Vietnam ’s most promising aquatic export market with turnover of 79.6 million USD in 2012, up 33 percent over the previous year.

However, Vietnamese exporters have encountered several difficulties in exporting their aquatic products to the African market.

It takes around 40 days to transport goods from Vietnam to Africa by sea, and there is no direct air route between them.

In easing the difficulties and stepping up aquatic exports to Africa , domestic enterprises need to ensure the quality of their products and meet the local countries’ food hygiene and safety standards.

They have also been asked to set up a distribution network with a common price in the continent’s key markets in order to avoid dumping.

According to ministry, Egypt tops the list of Vietnam ’s aquatic export markets in Africa . It is followed by Tunisia with export turnover of 11.16 million USD, Algeria with 9.5 million USD, Cameroon with 7.1 million USD, and Libya with 6.5 million USD.-

Phu Quoc pepper looks toward Global GAP

Phu Quoc island district in the southern province of Kien Giang is making all-out efforts to improve the quality and value of pepper, its traditional product, aiming to obtain the Global Good Agricultural Practice certificate.

With 385 hectares of pepper trees, mostly in Cua Duong and Cua Can communes, Phu Quoc reaps nearly 1,000 tonnes of pepper a year.

The locality plans to expand its area of pepper trees to 500 hectares by 2015 and 1,000 hectares by 2020 with expected yield of 3 tonnes per hectare.

In 2011, the National Office of Intellectual Property of Vietnam granted a licence to Phu Quoc pepper, helping the district to affirm its product’s traditional value and quality while creating conditions for it to introduce its product to the world market.

Phu Quoc district is working on a pepper growing process in an efficient and eco-friendly manner and will transfer it to farmers.

Local officials have said they target clean and safe products to serve both domestic consumption and export.

According to Nguyen Minh Truc, Head of Phu Quoc’s Economic Office, the locality targets organic and sustainable cultivation of pepper trees while paying attention to promoting its brand name in the domestic and foreign market.

Apart from specialties such as pearl, seafood, fish sauce and wine, pepper cultivation in Phu Quoc is developing in a sustainable manner in combination with service and tourism, contributing to the locality’s socio-economic growth.-

Vietnam’s long-term business potential noted

Vietnam ’s long-term potential for business is promising, Teo Eng Cheong, Chief Executive Officer of International Enterprise Singapore , a government agency driving Singapore ’s external economy, has said.

In a press release issued on June 2 on IE Singapore Global Conversations session with Prime Minister Nguyen Tan Dung on June 1, CEO Teo mentioned fundamentals, like rapid urbanisation, a large domestic economy and abundant natural resources as opportunities to invite businesses.

He highlighted the consumer sector as a growing area, fuelled by an expanding urban population, better educational qualifications and rising disposable incomes.

This month, NTUC opened its first hypermarket in Ho Chi Minh City , the first in a series of hypermarkets planned for the Vietnam market.

With urban populations in Vietnam ’s three largest cities of Hanoi , Ho Chi Minh City and Hai Phong expected to triple by 2020, demand for urban solutions and infrastructure development is set to rise.

Sembcorp Development is currently operating four Vietnam - Singapore Industrial Parks (VSIPs), with progress underway for a fifth VSIP in central Quang Ngai province.

In the tourism and hospitality sector, Vietnam received 6.8 million international tourists and 32.5 million domestic tourists in 2012. This generated revenues of nearly 7.7 billion USD. In November 2012, Banyan Tree opened Vietnam ’s first large-scale luxury integrated resort in Central Vietnam .

Singapore is the third largest foreign investor in Vietnam , with cumulative registered capital of 27.2 billion USD across more than 1,000 projects to date.

In the first three months of 2013, Singapore overtook Thailand and Japan as the top foreign investor. Singapore is Vietnam ’s sixth largest trading partner, with total trade reaching 15.8 billion SGD in 2012, about 12.6 billion USD./

HCM City-Brescia cargo air route to be launched

A cargo air route between the Italian northern city of Brescia and Vietnam ’s Ho Chi Minh City will be launched.

The air route is implemented under an agreement reached by Vietnam ’s carrier Vector Aviation and Italian counterpart Catullo Spa, announced by the Vietnamese Embassy in Italy at a press briefing on May 31 at Garda Aeroporti in Brescia .

At the event, representatives from the Vector Aviation and its Italian counterpart unveiled their agreement’s first phase worth 15 million USD.

Under the agreement, the two sides will operate one flight per week with 65-70 tonne Airbus 330s-freighter between the two cities from this October.

In the second phase from next April, they plan to use Boeing 747s-400F.

Addressing the event, Vietnamese Ambassador Nguyen Hoang Long stressed the project will help promote cooperation programmes in trade, export and import between the two sides and connect Southwestern European countries and the Southeast Asian region.

Opening the direct route shows the increasing demand on cooperation in trade, investment, production between the two countries’ businesses as well as the two regions, the diplomat added.-

SBV delays classification of debt to aid companies

The State Bank of Viet Nam (SBV) announced on Monday that it would delay the application of a circular classifying and making provisions for bad debts by one year, until June 2014.

The delay is intended to help enterprises access credit, boost lending and reduce lending interest rates in the current context of economic hardship.

Additionally, it gives banks more time to prepare for the application of the regulation. The circular covers asset classification, risk provisioning and unitisation of provisioning by credit institutions and foreign bank branches. It aims to make the banking system safer and gradually comply with international rules.

However, many experts and business community recommended that the regulation be delayed, as it would turn many existing extended loans into non-performing loans (NPLs), meaning businesses would have trouble accessing loans.

If the circular took effect, roughly VND272 trillion (US$12.9 billion) worth of loans at credit institutions would become NPLs.

Currently, NPLs account for 5 to 6 per cent of outstanding loans. With the circular in effect, they would account for 15-16 per cent of outstanding loans – causing difficulties for both enterprises and credit institutions.

The new regulation also asks banks to make more risk provisions for credit grants, so banks fear their profits would be eaten up as they were forced to raise their lending interest rates to offset the losses.

Businesses claimed that if the central bank insisted in applying the regulation, it would cause their production to stagnate, bad debts to rise and credit to be even slower.

Price stabilisation programme needs to improve co-ordination

The price-stabilised-product system should be developed nation-wide and co-ordination among enterprises in creating a "goods reserve" should be improved, a conference was told yesterday.

The Ministry of Industry and Trade held the conference to evaluate the price stabilisation programme and to discuss whether and how to expand it.

Deputy Minister of Industry and Trade Ho Thi Kim Thoa said the programme together with policies to help enterprises were among tools to control the consumer price index and prevent speculation.

Under the programme, she said, essential commodities such as rice, sugar, oil, meat, eggs, vegetables and seafood products were sold at 5-10 per cent lower than market prices.

However, price-stabilised products had not reached residents in remote rural areas, said Ha Noi Department of Industry and Trade deputy director Nguyen Van Dong.

Dong said the distribution network should be enhanced in traditional markets, rural areas and industrial zones to better serve low-income earners and ensure they enjoy the benefits of the programme.

Van Duc Muoi, director of Vissan, said enterprises needed to be provided with preferential loans to manufacture and store goods for the price stabilisation programme.

"It is also important that enterprises co-ordinate with each other to ensure stable raw material sources for production and a smooth transition between production and distribution," Muoi said.

Director of the Domestic Market Department Vo Van Quyen said many localities now provided support to manufacturing enterprises, instead of mainly retail enterprises as in previous years.

"The price stabilisation programme was not non-market," Quyen said. He pointed out that enterprises got Government loans to reserve necessary goods during economic difficulties.

HCM City Department of Industry and Trade deputy director Le Ngoc Dao said the price stabilisation programme should encourage the participation of other economic sectors besides the Government.

She said that this year the city called for credit institutions and commercial banks to join the programme to help enterprises get access to loans at reasonable interest rates (about 6 per cent for short term and 10 per cent for long term).

Thoa told the conference that the ministry would have policies to encourage enterprises to join the programme by themselves without receiving loan support from the Government.

During 2012 and Tet holiday, a total of VND1.803 trillion (US$85.86 million) was provided to 45 out of 63 provinces and cities to participate in the price stabilisation programme. About 300 enterprises got involved in the programme, 20 per cent of which did not get loan support from the Government, the ministry’s report showed.