BUSINESS IN BRIEF 24/6 Stronger production chain for tuna fishing a must Spontaneous and uncoordinated production and obsolete post-harvest technology are the major weaknesses of the tuna fishing industry that needs to be addressed soon. Due to a recent sharp decline in tuna export price, experts have advised more effective measures should be applied to promote the sustainable development of tuna fishing and processing, including a pilot project launched by the Ministry of Agriculture and Rural Development (MARD). Tuna exports have increased rapidly in recent years from US$188.9 million in 2008 to a record high of US$570 million in 2012. However, export value dropped by 10% in 2013, despite volume rising by 30% as export price declined by 40% compared to 2012. Currently, Vietnamese tuna products are exported to 99 markets including the US, Japan, Germany, Italy, Spain, Israel, Canada, Tunisia and Mexico. Vu Dinh Dap, Chairman of the Vietnam Tuna Association, said tuna prices were quite stable before 2011, but have dropped sharply since 2012 due to the rapid development of hand-fishing together with the use of lights. The lights make tuna react suddenly, causing  muscle and blood to break, and meat to turn sour. Vietnamese tuna’s brand name on key markets like Japan is affected and its export prices fall dramatically. Pham Ngoc Tuan, Deputy Director of the MARD’s Aquatic Resources Exploitation and Protection Department, points out the major weakness of the Vietnamese tuna fishing industry, saying it has yet to form a coordinated production chain. Furthermore, post-harvest technology remains obsolete, reducing the quality and value of products. According to Tuan, Vietnam has great potential for tuna fishing, but the industry has not received much investment as tuna is not identified as a key export product. In addition, unhealthy competition and constant price gauging hinder sustainable development of the industry. To deal with challenges, the MARD has introduced a pilot project on exploiting, purchasing, processing and consuming tuna in a complete chain, to help the industry develop in line with its potential. The project is in its final stage ready to submit to the Prime Minister. If it is approved and is effective in reality, MARD says it will make a breakthrough in the tuna fishing industry. The project aims to use ocean tuna sources sustainably, in line with benefits of those involved in tuna exploitation, purchasing, processing and distribution. By 2020 tuna fishing vessels will operate in a fleet and they all will be equipped with modern maintenance systems to minimise losses post-harvest, to below 10%. The project will be implemented in three provinces –Binh Dinh, Phu Yen and Khanh Hoa – at an investment cost of VND760 billion. Ha Long Shipbuilding aims for 2014 equitisation The new-look Ha Long Shipbuilding One-member Co., Ltd, is taking shape, with its equitisation process is expected to be completed in September this year. According to General Director Nguyen Tuan Anh, the company, which is an affiliate of the Shipbuilding Industry Corporation (SBIC), has reached a deal with the Damen Shipyards Group of the Netherlands - one of the leading European groups in manufacturing high-capacity ships. With its effective cooperation with other shipbuilding companies in Vietnam, such as the Song Gam Company and Corporation 189, Damen wishes to become a strategic investor that holds a dominant power at Ha Long Shipbuilding. After equitisation, the company will operate under the new model, focusing on building oil and gas service ships with high quality and added value, he said. Damen will assist the company in management technology, equipment and warehouses in order to create high-quality products as well as ensure the safety for workers, he added. In 2013, Ha Long Shipbuilding posted an output value of over VND1.3 trillion ( US$63 million), or 100.56 percent of the yearly plan, and a revenue of nearly VND1.45 trillion ( US$69 million), equivalent to 99.8 percent of the target. Despite good business results, the company’s equitisation process still faces a lot of difficulties as the shipbuilding market in the world, and Vietnam in particular, is in decline. Low demand has created a shortage of orders at most SBIC shipbuilding companies. If the equitisation is not conducted drastically and seriously, State capital may be lost, Anh warned. As of May 2014, the company has received a contract to build four tugs for Damen Group, while the first car carrier ship will be handed over soon. It will build another four transport ships for a Venezuelan investor and is negotiating for the construction of two oil and gas service ships for another partner. In 2014, Ha Long Shipbuilding targets an output value of over VND890 billion, a revenue of about VND1.4 trillion and per capita monthly income of 4.8 million. Binh Duong enjoys 9.5 percent GDP growth in six months The southern province of Binh Duong enjoyed a 9.5 percent GDP growth in the first half of 2014 as compared to the same period last year, according to a report by the provincial People’s Committee. Industry-construction sector saw a 7.2 percent rise year on year, while service sector rose 13.2 percent and agriculture, 1.1 percent, said the report. Particularly, the province’s industrial production in the first six months of this year hit VND81.8 trillion, up 12.5 percent compared to the same period last year, with domestic sector enjoying 14 percent increase, and foreign-invested sector, 11.7 percent. In the first half of 2014, Binh Duong attracted US$990 million in foreign direct investment (FDI), almost fufilling its yearly target of US$1 billion, according to the report. At the same time, its exports grew by 13.2 percent, reaching US$6.7 billion in total revenue. The locality’s combined retails and service revenue was nearly US$52 trillion, up 18.5 percent year on year, with domestic sector accounting for 97.2 percent. According to Vo Van Cu, head of the provincial Industry and Trade Department, production of local enterprises was also gained higher rate of growth as compared to the rate of 11.9 percent in the first half of last year. Almost all enterprises have enough order to keep them busy until the end of the year, signaling a bright prospect for the rest of 2014, Cu said. Despite impacts of the recent incident, caused by some individuals taking advantage of local workers’ protests against China’s illegal placement of its oil rig in Vietnam’s waters, local businesses maintained their production thanks to timely and effective response and support of the local government, he added. Danang seeks to raise businesses’ competitiveness The central city of Danang has implemented a range of measures to help local businesses increase their competitiveness and promote goods consumption. According to Phung Tan Viet, Vice Chairman of the municipal People’s Committee, over the past years, enterprises in Danang have partnered with each other in production and trade. However, the models of connectivity have remained incomprehensive and limited, thus failing to raise the firms’ competitiveness. At the same time, consumers have no chance to benefit from qualified products. To help supply-demand links among businesses bear fruits, Viet said that his city has implemented many programmes, focusing on measures to connect firms and enable them to engage in supply chains. Besides, price is also a factor decisive to businesses’ competitiveness in the market, he said, adding that the creation of production and consumption chains with low costs is seen as an effective way to help enterprises develop in a sustainable manner. In the context that Vietnam is integrating deeply into the world economy, it is necessary for businesses in Danang and other localities nationwide to create connectivity and supply chains in order to compete with foreign ones in both domestic and foreign markets. HCM City welcomes more FDI businesses Ho Chi Minh City on June 21 presented investment certificates to five direct foreign investment (FDI) projects worth US$220 million in total. The newly-licensed projects were invested by Hong Kong (China) and Japan, mostly in construction, retail distribution, and precision engineering. HCM City People's Committee Chairman Le Hoang Quan called on foreign investors to run long-term business to help turn HCM City into the national powerhouse in economics, finance, trade, and science-technology. He highly valued the importance of FDI to local development and vowed to create the best possible conditions for FDI businesses to operate efficiently. Hans-Dieter Stell, German Consul General in HCM City, expressed his wish to strengthen bilateral strategic partnership, by promoting people's exchange programmes and sharing experience in sustainable development. Takashi Sakakibara, Deputy Director General of Japan's Nikken company, said his firm is expected to increase investment in HCM City over the next two years, with a focus on manufacturing, assembly, and production of automobile components. He spoke highly of Vietnam's incentive investment policies and abundant labour force. HCM City Department for Planning and Investment statistics show  since January 2014, as many as 169 projects have been licensed in the city capitalized at a total US$967 million. Fifty-three FDI projects increase their investment by US$110 million. Most FDI businesses were keen on processing and manufacturing industries (around US$234 million), accounting for 24.1% of HCM City's total foreign investment. Japanese consumers to taste Vietnamese lychee Farmers in Hong Giang commune, Luc Ngan district, which has the country’s largest lychee growing area, are marketing exports of lychee to Japan on a pilot basis. The fruit indigenous to the northern province of Bac Giang is a famous local specialty, however, China is the only significant export market. To reduce its reliance on the Chinese market and diversify outlets overseas, Hong Giang commune in collaboration with the Vietnam Academy of Agricultural Science and Technology are piloting a programme to market lychee in Japan. Bui Huy Tinh, Chairman of the Hong Giang commune People’s Committee, said that if the pilot programme is successful, next year local authorities will begin implementation of a full-fledged marketing and export campaign for the Japanese market. Preliminary results have been positive as Japanese feedback say they enjoy the flavour and are very fond of the fruit, Tinh added. Local farmers are optimistic that the fruit will be exported to other countries, including the US, the Republic of Korea, Australia and Western Europe. Many other varieties of Vietnam’s agricultural products are seeking their ways into differing countries to avoid an overdependence on China, the largest market of Vietnam’s vegetable exports making up 32% of market share. In late May, Vietnam became the first and only country to have been granted license to export dragon fruit to New Zealand. Currently the fruit has been sold in over 30 countries around the globe. HCM City inflation rises 0.58% in June Ho Chi Minh City’s consumer price index (CPI) for June increased 0.58% over the previous month and 1.1% compared to December 2013, according to the municipal statistics office. The only basket of goods reflecting a significant increase in cost for June was drugs and medical services which rose 8.69% over May, the highest increase ever reported in any one monthly period. This was the direct result of a decision by the HCM City municipal People’s Committee to raise the prices of medical services in public hospitals from June 1, the municipal statistics office reports. Three among eleven baskets of goods showed decline compared to May including tourism down 0.13%, telecommunications (down 0.35%) and beverages and cigarettes (down 0.05%). Meanwhile, gold prices and the price of US dollar saw increases of 2.7% and 0.86%, respectively from a month earlier. Vietnam sustains high trade surplus in five months Vietnam recorded a total import-export value of US$116.04 billion in the first five months of the year, generating a trade surplus of US$1.52 billion. Vietnam Customs statistics show that the country’s export earnings hit US$58.78 billion, a year-on-year rise of 15.9%, while its import value was US$57.26 billion, up 10.3%. In the second half of May alone, the import-export turnover gained nearly US$14.09 billion, up 25.8% compared to the first half of the month. Of the total figure, export earnings rose a staggering 42.4% over the first half of the month, reaching US$7.27 billion. Items attaining high export value included crude oil, garment and textiles, footwear, computers, and electronic products and components. In the half-month period, Vietnam imported US$6.82 billion worth of commodities, up 11.9%, mainly iron, steel, petroleum, vehicles and spare parts, machine, tools and fertilizers. In five months, FDI businesses’ import-export value hit US$68.65 billion, accounting for 59.2% of the country’s total. These businesses also enjoyed a trade surplus of nearly US$4 billion. Vietnam leads in shrimp exports to Japan Vietnam maintained its position as the No1 supplier of shrimp to Japan in the first four months of this year, according to the Vietnam Association of Seafood Exporters and Producers (VASEP). After Japan decided to examine all shrimp batches imported from Vietnam for Oxytetracycline (OTC) residue, experts forecast India and Indonesia would replace Vietnam to become major suppliers of this product in this lucrative market. However, VASEP statistics show in the first four months of the year Vietnam sustained its leading position in Japan, while India and Indonesia saw sharp declines in both value and output.   Four-month Vietnamese shrimp exports to Japan were up 31.9% in value but down 40.2% in volume compared to the same period in 2013 due to the OTC examination decision.   Vietnam is now the largest producer of prawn in the world with a stable output. VASEP forecasts that Vietnam’s shrimp exports to Japan will surpass the annual US$700 million mark this year if the OTC issue is controlled.   Vietnamese steel nail producer faces US lawsuit The US is conducting an antidumping (AD) and countervailing duty (CVD) probe into imports of steel nails from seven countries, including Vietnam. Under a US Department of Commerce (DOC) decision, steel nails from Taiwan, the Republic of Korea, Oman, Malaysia, Turkey, and India are also put under the microscope. The DOC decision says on May 29 US producer Mid Continent Steel & Wire, Inc. lodged a petition for an AD and CVD investigation into steel nails imported from the seven aforementioned countries, alleging that these products were materially injuring the US industry. According to the Vietnam Competition Authority (VCA), the US firm is accusing the imports of having a dumping margin of 323.99% and an estimated subsidy that surpasses the minimum level. As scheduled, the US International Trade Commission (ITC) will issue its preliminary determination of material injury or threat of material injury within 45 days, or no later than July 14, 2014.   The DOC will then announce preliminary countervailing duties in 85 days and preliminary antidumping duties in 160 days, though both deadlines may be extended. This is the fourth AD and CVD  lawsuit the US has filed against Vietnamese products since 2011, following similar suits involving P.E plastic bags, carbon welded steel pipes and steel wire garment hangers. US Customs statistics show that last year Vietnam earned about US$43.7 million from exporting 39,000 tonnes of steel nails to the US, accounting for approximately 17% of the US market share. BIDV funds road construction project in Laos The Bank for Investment and Development of Vietnam (BIDV) will lend US$53.16 million to Laos to build a road in Houaphan province. A document to this effect was signed in Vientiane on June 20 by representatives of the Lao government and BIDV. Under the loan agreement, a two-lane and 67km long road will be built linking Thamnou and Xamtai communes. Once the project is completed, it will be connected to northern provinces of Laos and the road system of Vietnam, especially the Nghi Son deepwater seaport in Thanh Hoa province, helping Laos spur socio-economic development and facilitate trade between Vietnam and Laos. Laos Finance Minister Lien Thikeo thanked Vietnam for financial sources for transport infrastructure construction, and vowed to use the sources effectively. Laos-Vietnam bank operates efficiently Since its inception 15 years ago, the Laos-Vietnam Joint Venture Bank (LVB) has achieved an annual impressive growth rate of more than 30%, becoming one of the most successful banks in Laos. The bank has to date owned its assets worth US$600 million, and secured both annual deposit and credit growth of more than 30%. It is now the second largest bank in Laos in terms of charter capital and the fourth in total assets. It has applied advanced technology to its operation, with its core banking system considered the most modern in Laos. Together with the parent bank, the Bank for Investment and Development of Vietnam (BIDV), LVB has implemented many social welfare programmes providing support for poor people in Laos. Addressing a ceremony in Vientiane on June 20 marking LVB’s 15th anniversary, Lao Prime Minister Thongsing Thammavong praised the bank’s efficient operation, noting the bank plays an important role in bolstering bilateral ties between the two nations, especially in economics, trade and investment. Singapore businessman sees opportunities in Vietnam “There are a lot of opportunities to do business in Vietnam,” said Jeffrey Yu, Merchandise Director of Giant Singapore, adding that his company will import more products from Vietnam, especially litchi. At the inauguration of the Vietnam Food Fair to be held from June 20-26 for the first time in all 66 stores of Giant supermarket chain, Director Yu told Vietnam News Agency’s Singapore-based reporter that the fair showcased distinctive Vietnamese products, including fresh fruits and vegetables as well as grocery imports such as “pho” noodles, rice papers and chili sauces, all preferred by home chefs. The Giant Singapore Director said one of the best items (from Vietnam) is sweet potato, which is well sold in Singapore. “We do not want to just start and stop from here. We want to continue our partnership with Vietnamese partners to grow this business,” he added. Joe Tan, General Manager of Ban Choon Marketing Pte Ltd, said, “For this fair, we have brought in 40 containers of fruits and vegetables from Vietnam like pumpkin and sweet potato from Da Lat, and pomelo, lime and dragon fruit from the Mekong region.” According to him, the fair is a success because customers love fruits and vegetables from Vietnam. The Ban Choon Marketing Pte Ltd executive said the event will enhance Singapore’s limited selection of Vietnamese products with an extensive array of fruits, vegetables, dried foods, sauces and beverages; bring new flavours and greater variety to consumers as well as reinforce Singapore’s reputation as Asia’s culinary melting pot. He said in the future, the company will bring in more Vietnamese fruit products such as cashew nut, coffee, chili sauce and tea and a wider range of Vietnamese vegetables into Singapore. According to Nguyen Viet Chi, Vietnamese Commercial Counsellor to Singapore, rice, cashew nut, sea food, fruit and vegetables are of Vietnam’s potential export items and of Singapore’s need. In the first five months of this year, two-way trade value between Vietnam and Singapore reached SGD8.2 billion with imports from Vietnam accounting for SGD1.53 billion, representing year-on-year increases of 22% and 23%, respectively. Progress in Vietnam-Customs Union FTA talks Vietnam and the Customs Union of Russia, Belarus and Kazakhstan have made marked progress in a number of issues during their 6th round of free trade agreement (FTA) negotiations. Meeting in Sochi, Russia, from June 16-20, working groups of Vietnam and the Customs Union aimed to solve pending issues to complete the content of the agreement by the end of 2014 as scheduled. Eight groups worked very hard on Trade in Goods, Services, Investment and Movement of Natural Persons, Rules of Origin, Government procurement, safeguard Measures; Customs Cooperation, Trade Facilitation, Intellectual Property, and Institutional Provisions. On June 20, the last day of their talks, both sides completed the wording of chapters on Trade in Goods, and Government Procurement, and narrowed differences in the content of chapters on Customs Cooperation, Rules of Origin, and Intellectual Property. They said they need more time to discuss chapters on Rules of Origin, Open markets for Trade in Goods, Trade in services, Investment, and Movement of Natural Persons, taking into account the interest of each side. Chief negotiators, Vietnamese Minister of Industry and Trade Vu Huy Hoang and Eurasian Economic Commission Trade Minister Andrey Slepnev, hailed progress both sides had made, describing it as a decisive factor in concluding the negotiations later this year. They assigned their working groups to exchange views on pending issues to be examined at the upcoming round to be held in Russia from September 15-19. HCM City aims for 9.5% GDP in H2 Ho Chi Minh City’s GDP growth rate will remain high at over 9.5% in the second half of this year despite economic difficulties, heard a conference in the city on June 20. To that end, a professor from the Ho Chi Minh City University of Economics suggested the locality take more drastic measures to develop the support industry. Meanwhile, Van Duc Muoi, General Director of the Vissan Company said that the city should enhance its role as the country’s powerhouse by building an integrated value chain in production in the regional scale. According to the municipal Institute for Development Studies, boosting the export of rice and vegetables to and the import of materials from ASEAN member countries and encouraging the innovation of technology and machinery are the main measures to help the city stabilise its economy in the last six months. The institute also urged the locality to promptly build a material centre for the garment and footwear sectors and continue implementing effective programmes, including those helping connect banks with businesses and stabilise the market. In the first half of 2014, HCM City, the country’s largest economic hub, recorded a GDP growth rate of 8.2%, reaching nearly VND380 trillion (US$17.8 billion). The services sector rose 9.6%, accounting for 59.4% of the total GDP, followed by the industrial and construction sector and the agricultural sector. Vietnam exports 200,000 tonnes of rice to Malaysia The Vietnam Southern Food Corporation (VINAFOOD II) has secured a contract to export 200,000 tonnes of 5% broken rice to Malaysia this year. A VINAFOOD II representative revealed the price is fixed at US$410 per tonne, free on board basis and the rice will be shipped to Malaysia in July and August. This is the second biggest rice contract Vietnam, one of the top three rice exporters, has signed with a foreign partner this year, following an 800,000 tonne contract with the Philippines in April. UN Food and Agriculture Organisation (FAO) statistics show that average export prices of Vietnam’s 25% broken rice increased to around US$364 per tonne in May 2014, up about 2% from the previous month, but down by about 4% compared to the beginning of the year. The 5% broken rice prices also rose to US$398 per tonne in May 2014 from US$386 per tonne in April, but were lower than the US$401 per tonne recorded at the beginning of the year. Malaysia is Vietnam’s traditional rice importer, with last year’s import volume reaching nearly 466,000 tonnes, down 39% from 2012, according to the General Statistics Office of Vietnam. The Vietnam Food Association (VFA) reported that in April 2014, Vietnam shipped 536,806 tonnes of rice abroad, earning almost US$237 million, free on board (FOB). Since January of this year, local exporters have reaped approximately US$765 million from 1.75 million tonnes, down 18% in both value and volume against the same period last year. HCMC grants investment certificates for FDI businesses Five foreign direct investment (FDI) enterprises in Ho Chi Minh City were granted certificates by the People’s Committee of Ho Chi Minh City on June 21. Five FDI projects were handed over new investment certificates with added -investment capital of US$ 219.4 million. Of these, three FDI projects are granted new licenses with total investment capital of U$ 168.1 million and two projects with investment capital of US$ 51.3 million are adjusted their chartered capital. As of the beginning of this year, 169 projects were issued new licenses with total capital of US$ 967 million, up 423 percent, compared to the same period of 2013. Current statistic showed that Ho Chi Minh City has attracted US$ 1.08 billion foreign investment capital, up 202 percent compared to the same period last year. Director of HCMC Department of Planning and Investment Thai Van Re said that foreign direct investment plays an extraordinary important role in economic development because foreign enterprises transfer not only their investment capital but also technology, techniques, methods into Ho Chi Minh City. Mr Re also pledged that investment management agencies in Ho Chi Minh City will improve the administrative formalities better for foreign investors in upcoming time. Speaking at the ceremony, Chairman of HCMC People's Committee Le Hoang Quan said that five licensed FDI projects are to prove that foreign investors keep faith in HCMC's investment environment.   Saigon Co.op promotes selling lychees Saigon Co.op, the country's largest supermarket chain, is promoting sale of lychees in its retailing outlets across the country to help farmers and respond to the campaign Vietnamese people consume Vietnamese commodities. Current lychee farmers are facing difficulties in consuming the fruit due to frozen export market to China. As of June, 2014, Saigon Co.op supermarket chains have promoting Vietnamese fruit consumption through fruit fests, part of green consumption ( the practice of using environmentally friendly products that do not cause risk for human health and do not threaten the function of diversity to natural ecosystems), in which lychee is one key fruit. Co.opmart retailling outlets in Ho Chi Minh City and provinces in the south have sold over 10 tons of lychees a day. Consumption of the fruit is expected to increase more and more. Co.opmart supermarkets are trying to promote sale of the fruit by displaying the fruit in eye-catching position and offering special discount. Saigon Co.op directly buy the fruit from farmers to design a cheap price to its customers. From June, 2014, suppermarkets have sold nearly 200 tons of lychees and Saigon Co.op said that this number is expected to be reached to 500 tons. Capital's high-end apartments still too expensive for buyers The luxury apartment market in Ha Noi is faced with a high inventory, though investors have reduced selling prices and offered a range of promotion programmes. Despite price reduction, the total value of a luxury apartment is still high, thus taking it out of the range of a majority of home buyers. Some projects at the completion stage, such as Huyndai Hill State in Ha Dong District, have a high inventory despite preferential interest rates. Home buyers interested in the project, which has an acceptable price of VND23 million per sq.m including value-added tax and 2 per cent of maintenance fee, were not able to pay for such an apartment with an area of 102 to 168 sq.m. The investor had decided to lend home buyers 70 per cent of the apartment's value on zero interest in the first year. Buyers, therefore, would have to pay 30 per cent of the total to own their house. A representative of the property exchange floor in Ha Noi told online newspaper Vietnamnet that the successful transactions of luxury apartments in the city were just 30 per cent. He said most of the customers wanted to buy apartments which were small and medium size in area. They were averse to buying apartments with a total value of more than VND3 billion each and with an area of over 100sq.m. Tran Nhu Trung, Deputy General Director of Tan Hoang Minh Group, told the newspaper that several investors had a high inventory of luxury apartments as it did not suit the home buyers' real demand as well as economic conditions. Trung said property investors should restructure their products to match people's demand, but were unwilling to lower the prices of luxury apartment because it was a matter of prestige. Several companies have even rent out the apartments to resolve the difficulties for short term periods. Experts forecast a preference for small apartments with favourable conditions. The difficult situation for the high-end segment was expected to continue. PV Gas plans 20% stake sale after pricing mechanism nod State-owned fuel giant PetroVietnam Gas Corporation (GAS) will sell additional 20 per cent of stakes held by the State after its gas pricing mechanism is approved, said the corporation's general director Do Khang Ninh. Ninh said the plan was endorsed by the Prime Minister at the corporation's meeting to review its business in 2013. "If the State sold 20 per cent stake in PV Gas and used this money to invest in other projects, its gains would be much larger than preserving the current holding and awaiting dividends," Ninh was quoted as saying by Lao Dong (Labour) newspaper. The State holding in PV Gas is roughly 97 per cent. According to the equitisation plan of PV Gas approved by the Prime Minister, this rate can be reduced to 75 per cent. State holdings in similar gas corporations in Thailand, Malaysia and Indonesia were also around 50-60 per cent, Ninh said. With regard to concerns over lowering the Government's power in distributing profits, Ninh said Decree 71/2013/ND-CP regulated 70 per cent of profits PetroVietnam receives from PV Gas's dividends will go to the State budget. He stressed that equitisation of State-owned enterprises was essential at present in the context of a limited State budget. It was a good way to raise capital, boost transparency and absorb new technology and experience from strategic shareholders. "After equitisation, the value of PV Gas has increased from US$700 million to nearly $10 billion and total assets tripled in 2008, reaching nearly $3 billion," Ninh said. In May, reputable US magazine Forbes listed PV Gas and Vietinbank among 2,000 of the most large and powerful enterprises in the world in 2014. The ranking is based on a criteria of sales, profits, assets and market capitalisation value. PV Gas is the main gas supplier in Viet Nam. It supplies input fuel for generation of nearly 40 per cent of national power output, 70 per cent of fertilizer demand and 60 per cent of LPG (liquefied petroleum gas), that help ensure national energy and food security. In the first three months of this year, PV Gas earned a net profit of nearly VND3.182 trillion ($150.8 million), down 23.4 per cent year-on-year. However, Ninh said performance of the corporation would be stable in the second half of the year and it targets a pre-tax profit of over VND7 trillion ($331.8 million). The share price yesterday fell 1 per cent to VND104,000 ($4.93) a share. State Audit Office to probe Vinalines accounts Transport Minister Dinh La Th¨ang approved investigations by the State Audit Office into accounts belonging to the Viet Nam National Shipping Lines (Vinalines) and Sai Gon Port Co., Ltd. The investigations will look into all financial transactions accrued in 2014 of the companies, both of which are run by the transport ministry. The move aims to accelerate the equitisation of State-owned enterprises (SOEs) governed by the ministry as well as realise a direction issued by Prime Minister Nguyen Tan Dung on stepping up restructuring of SOEs. With its chartered capital of VND10.693 trillion (US$502.57 million), Vinalines is managing 31 affiliated companies, 21 joint ventures and 19 long-term investment firms.. FPT revenue 26% higher than in 2013 The country's software giant FPT corporation earned a revenue of VND12.3 trillion (US$586 million) or an increase of 26 per cent against the same period last year. Pre-tax profit reached VND999 billion, increasing by 3 per cent compared to the same period last year or equal to 106 per cent of its yearly plan. After-tax profit reached VND817 billion or an increase of 3 per cent against 2013. Revenue, particularly from overseas markets, reached VND1.1 trillion ($52.3 million) with an increase of 19 per cent over the same period last year. HCM City drives transport infrastructure improvement Ho Chi Minh City’s Department of Transport has approved a 333 billion VND (approx 15.6 million USD) project to upgrade and broaden Tran Nao street in District 2. The project aims to meet the city’s increasing transport demands following the development of the Thu Thiem new urban area in the district. Accordingly, nearly 40,000 sq.m of land will be used for constructing the road, which will be 1.308 km long, with six lanes and a designed speed limit of 60km/h. Along with systems of water drainage, lighting and greenery, 110kv underground high voltage systems and a 220kV transmission line will also be set up in the framework of the project. The municipal People’s Committee has also decided to allot nearly 400,000 sq.m of land for the Dai Quang Minh Real Estate Investment JSC to build four main roads in the urban area. These roads, with a total length of 11.9 km, will cost over 12 trillion VND (564 million USD) and they are expected to be completed in early 2017. Geographical indication benefits Dak Lak coffee producers A certificate of geographical indication (GI) for the Buon Ma Thuot coffee trademark in the Central Highlands province of Dak Lak has helped increase the value of coffee beans shipped abroad, according to the Buon Ma Thuot Coffee Association. As many as 10 coffee producers in the province are entitled to use the GI. They are managing a combined coffee growing area of 15,067 ha, yielding around 46,620 tonnes of coffee beans annually. Protected geographical indication (PGI) for Buon Ma Thuot coffee was registered in Vietnam in 2005. The province has been completing necessary procedures to gain PGIs in 15 countries and territories in the world. GI-certificated coffee beans shipped by the Dak Lak September 2nd Import - Export Co., Ltd are highly valued by Japanese importers and processors. These products are purchased at higher prices than those without the GI. To ensure the quality of coffee products in line with the requirements of the international market, management agencies and coffee producers have instructed local growers to follow standardised coffee-growing models so that their products are able to get certifications granted by UTZ Certified and Rainforest Alliance, the two organisations tasked with promoting sustainable farming. The local authorities have also encouraged coffee processing enterprises, which are allowed to use the GI, to label their products with the Buon Ma Thuot coffee trademark and tell customers more about the distinctive characteristics of certificated coffee products. The province plans to continue expanding coffee-growing areas licensed to use the PGI and will call for the support of the European Trade Policy and Investment Support Project (EU-MUTRAP) to help Buon Ma Thuot coffee enter the European market soon. Dak Lak now has more than 203,500 ha of land under coffee cultivation, generating 430,000 tonnes of coffee beans a year.- Honeywell to train next generation of refinery technicians in Vietnam Honeywell Process Solutions just announced it would train technical personnel at Nghi Son Refinery and Petrochemical Limited Liability Company’s new 200,000 barrel-per-day complex being built in the north-central province of Thanh Hoa in Vietnam. Honeywell will be responsible for helping to prepare the workforce for the refinery’s 2017 start-up as well as the ongoing operational and business readiness of the facility. Nghi Son Refinery will be the country’s second, and largest, refinery and will meet about 30 per cent of Vietnam’s growing demand for refined petroleum products, such as motor fuel and petrochemicals. Vietnam is a net exporter of crude oil, producing more than 350,000 barrels per day of crude oil. But with limited refining capacity, the country currently imports more than half of its refined products to meet demand. “This refinery will be an important part of Vietnam’s energy picture, enabling us to turn our own vast oil reserves into finished products,” said Kazutoshi Shimmura, general director of Nghi Son Refinery and Petrochemical Limited Liability Company (NSRP). On projects such as the NSRP refinery, Honeywell is able to implement a standardised training strategy, which includes a targeted, cost-effective programme that addresses gaps in experience and competency of the recruited workforce. Honeywell’s in-country experience also enables it to identify and empower local educational institutions to provide a large share of training deliverables. “The training partnership between Honeywell and NSRP will help to enable the refinery workforce to become more productive faster, increasing value and safety to NSRP’s operations,” said John Rudolph, vice president of Honeywell Process Solutions. Industrial organisations can also leverage Honeywell’s training management services to integrate best-in-class instruction provided by industry experts for advanced-level training. This approach blends classroom instruction, including eLearning, with simulation, hands-on experience and on-the-job components. The programme also measures each employee’s progress and provides remedial intervention for those needing additional help. In addition, Honeywell’s comprehensive project management solution allows execution of training programmes on time and on budget. It further increases overall training retention, which will translate to faster, incident-free startups. The Nghi Son Refinery project is a joint venture of Vietnam Oil and Gas Group (PetroVietnam), Kuwait Petroleum Europe BV (KPE), Idemitsu Kosan Co., Ltd (IKC) and Mitsui Chemicals, Inc (MCI). In its role as training management consultant for the new facility, Honeywell will work with the NSRP human resources department to help train all operations, maintenance and quality assurance personnel before and after the facility’s start-up. This ranges from helping with recruitment and screening, to supporting the functions necessary to achieve a competent workforce. Honeywell will also leverage local resources, educational institutions and in-country refining capabilities, thus reducing cost to NSRP as well as increasing the local facilities’ capabilities to support future initiatives. Honeywell has had a presence in Vietnam for the past 10 years, and in 2012, it partnered with PetroVietnam University to establish a regional Automation College in Hanoi. The goal of this partnership is to enhance the technical skills of the local engineering community in the application of plant automation and process control technologies, as well as build and sustain a strong future talent pool to support the projected process industry growth in Vietnam and South East Asia. Honeywell is a Fortune 100 diversified technology and manufacturing leader, serving customers worldwide with aerospace products and services; control technologies for buildings, homes and industry; turbochargers; and performance materials. Honeywell Process Solutions, part of Honeywell’s Performance Materials and Technologies strategic business group, is a pioneer in automation control, instrumentation and services for the oil and gas; refining; pulp and paper; industrial power generation; chemicals and petrochemicals; biofuels; life sciences; and metals, minerals and mining industries. EVN told to follow inspectors’ conclusions The Government has told Vietnam Electricity Group (EVN) to strictly comply with the conclusions of the Government Inspectorate announced early this year to clarify why luxury villas with pools and tennis courts were included as part of EVN’s power projects and why these housing facilities were factored into electricity production costs in 2011. In a report sent to National Assembly (NA) deputies at their ongoing session in Hanoi, the Ministry of Industry and Trade said related agencies were cooperating to separate the property development costs from electricity costs as required. The ministry, however, did not mention specific solutions to the issue. According to the Government Inspectorate, EVN has added many types of unreasonable fees to power prices. For example, the ministry allowed EVN to add VND600 billion spent on a housing facility for project management and operation to the costs of six power generation projects, thus running counter to the Government’s regulations because this housing project was for the group’s employees. Speaking to NA deputies, Minister of Industry and Trade Vu Huy Hoang insisted that building such housing, which is far from urban areas and economic centers, was necessary to serve foreign experts during the construction and technology transfer process of the projects. When construction ends and foreign experts return to their countries, those facilities could be transferred to Vietnamese investors. Hoang said that out of these six projects, only Phu My 1 Thermal Power was priced into electricity generation costs because it was built a long time ago, but the amount was small, from VND1.5billion to VND3.7 billion a year. The investments of other five remaining projects had not been added to electricity prices, Hoang explained. Hoang told the NA Standing Committee over two months ago that in principle, it was reasonable to provide services for officers and employees in the industry who have to work in remote areas. The costs will be counted into investments later. Solutions sought to improve cashew yields Agriculture officials convened at a conference in Dong Nai Province on June 12 to look for solutions to improve earnings of cashew farmers and arrest the shrinking cashew acreage. Phan Minh Dao, director of the Dong Nai Department of Agriculture and Rural Development, said it was difficult for the southern province to maintain the existing area of 45,000 hectares under cashew farming. Vo Van Chanh, vice chairman of Dong Nai Province, told the conference that a hectare generated 1.1 tons of cashew nuts on average and the price of this nut ranged from VND17,000 to VND30,000 per kilo. Dao calculated one hectare of cashew brought in VND6.3 million, equivalent to 20% of coffee and only 7% of pepper. Now earnings from cashew farming are the lowest compared to other plants in the southern province. Dao said low incomes had forced farmers to shift to other high-yield plants. “Thus, to keep the cashew farming area, there should be a good mechanism to support cashew prices,” Dao said. Nguyen Duc Thanh, chairman of the Vietnam Cashew Association (Vinacas), said domestic cashew prices depended much on global prices and fluctuations on the domestic market were inevitable if global prices dropped. Thanh said as Vietnam had yet to build strong brands for its cashew products and that local enterprises mainly exported low-value cashew nuts. “Processors and exporters can purchase unprocessed cashew nuts at VND20,000-22,000 per kilo and these prices would remain unchanged in the coming years,” Thanh said. This is one of the reasons why the national area under cashew farming has slid in the past nine years, from over 433,000 hectares in 2005 to more than 313,000 hectares last year. This meant a decline of 15,000 hectares of cashew farming each year, said Nguyen Van Hoa, deputy director of the Plant Cultivation Department under the Ministry of Agriculture and Rural Development. The shrinking area has led to a severe shortage of material supply for local processing enterprises and rises in import of unprocessed nuts, which stood at 651,000 tons last year. Electricity consumption rises in all fields The electricity volume consumed in the January-May period rose across all areas of the economy, according to Vietnam Electricity Group (EVN). According to EVN, of nearly 50 billion kWh consumed nationwide in the five-month period (up 8.9%), agriculture, industry, commerce-hotel-restaurant and household use picked up nearly 19%, 12.22%, nearly 6% and 4.8% respectively. Meanwhile, power consumption for industrial production rose 12.22% year-on-year, EVN said. Statistics of the General Statistics Office indicated that the industrial production index jumped 5.6% in the period. Some production fields maintaining high growth were textile-garment with 21.1%, manufacture of vehicles 20.4%, leather and leather products 18.2% and production of metal products 14.3%. Regarding electricity supply, EVN will start work on the expanded Thac Mo hydropower project late this month, and will soon finish and test-run two generators of Nghi Son 1 thermal power plant. Besides, the group will complete many grid projects, including two 500KV lines. Earlier, at a press briefing held early this week, Deputy Minister of Industry and Trade Do Thang Hai said the electricity price would not rise for now. Under the Prime Minister’s Decision 28/2014/QD-TTg on electricity retail price taking effect on June 1, the electricity price is divided into six levels instead of seven like previously. According to the Ministry of Industry and Trade, 12.1 billion kWh was generated last month (up 10.5%) while the total volume in the year’s first five months amounted to 54.42 billion (up 11.1%). Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR