BUSINESS IN BRIEF 6/8 Consumer goods producers fare well Listed enterprises in the consumer goods industry reported positive earnings in the second quarter of this year although economic difficulties had yet to abate. Notably, Vietnam Dairy Products Company (VNM) obtained nearly VND8.3 trillion in revenue in the second quarter, a 14.5% rise compared to the same period of 2012. In the first half, its revenue stood at over VND15 trillion, up VND2 trillion year-on-year, according to its unchecked financial statements. The enterprise gained over VND1.8 trillion in after-tax profit in the second quarter, a 22.1% year-on-year increase. In the first half, its net profit was over VND3.3 trillion, nearly 54% of this year’s target. Meanwhile, revenue of Vinacafe Bien Hoa Company (VCF) was VND438 billion in the second quarter and VND865.5 billion in the first six months. However, its profit was only VND16.8 billion and VND52.3 billion respectively, a strong decline against the same period of 2012. Rising sales cost ate into the profit of the coffee producer. In the second quarter, it spent nearly VND102 billion on sales, doubling that in the previous year. Its sales cost soared by VND76 billion to VND170 billion in the first half of this year. This year, the enterprise expects an after-tax profit of VND475 billion on revenue of VND3.1 trillion. In the home appliance sector, Rang Dong Light Source and Vacuum Flask Company (RAL) saw its profit rocketing 240% to VND21 billion in the second quarter. Its profit increased by VND11 billion to VND48.6 billion in the Jan-Jun period. Duc Thanh Wood Processing Company (GDT) reported revenue of VND56.9 billion in the second quarter, taking to VND99 billion the total in the first half, and after-tax profit of VND8.5 billion and VND15.8 billion in the respective periods. Compared to the previous year, its second-half profit jumped 23%. However, its profit did not increase compared last year’s first half and was far from this year’s target. The enterprise during its annual general meeting estimated after-tax profit at over VND37 billion on revenue of VND243.6 billion this year. Tea brands need quality boost to expand export Tea export turnover in the first half of 2013 increased 3.3 percent over the same period last year to reach 94 million USD, despite export volume slipping by 0.4 percent. Although the void was filled by a 6 percent rise in export prices, the Vietnam Tea Association claimed export prices for Vietnamese tea remained low, at just 40-50 percent of the value enjoyed by many other countries. This was attributed to the failure to establish a well-recognised brand for “made-in-Vietnam” tea products. About 90 percent of Vietnamese tea is exported in the form of raw materials and only 10 percent leaves the country as a finished product, according to the association. Director of the Plantation Protection Department Nguyen Xuan Hong said efforts are being taken to enhance the quality of tea products. The department has asked localities to keep a close watch on the use of pesticides to ensure exported products meet importers’ standards. Tea processing companies should also work with farmers to create supply chains and offer farming techniques to meet the international standard of groups such as the Rainforest Alliance (RA) Certificate or VietGap. JICA help vegetable production and sales The Japan International cooperation Agency (JICA) is funding a 4.1 billion VND (195,000 USD) project to help farmers in central Quang Nam province improve their incomes from vegetable production in the 2013-16 period. Vice chairman of the Quang Nam Union of Friendship Organisations Hoang Chau Sinh said Japanese experts from the Minamiboso City International Cooperation Planning Committee would provide training courses on sales promotions, management and processing technology for local farmers. “Around 14,000 farmers from the district of Thang Binh, Duy Xuyen, Dien Ban and Tien Phuoc along with those from Hoi An would be trained how to produce safe vegetables, market their products and form distribution networks throughout the province,” Sinh said. Plastic exports continue to rise Exports of plastic products are expected to increase by 11-13.5 percent, reaching 2.2 billion USD in turnover this year, according to the Vietnam Plastic Association (VPA). The country earned more than 1 billion USD from plastic exports in the first half of the year, up 9.3 percent from the same period last year. Japan was the largest importer, accounting for more than 22 percent of the country’s total plastic exports, followed by the US , Cambodia and the EU. In addition, India has emerged as a potential market for Vietnamese plastic products as its demand from the Indian industry increased, according to the association. The association also forecasts that plastic exports to Japan, the US , China , India , Thailand and Malaysia will continue to rise. Experts agreed that the domestic plastic industry will develop well, as locally made products have improved in quality, adding that increase global demand has also provided opportunities to expand markets. However, despite higher demand, the domestic plastic industry still faces many difficulties such as lack of sufficient raw materials, high input costs and poor production technology. VPA General Secretary Huynh Thi My said the plastic industry needs 2.2 million tonnes of raw materials each year, but the local market only supplies 450.000 tonnes. In the first half of the year, the country spent 2.7 billion USD on imported raw materials to produce plastic, a year-on-year rise of 20.3 percent. Qualified human resources are another problem facing the industry, according to the VPA. The plastic industry, which targets export revenues of 7 billion USD by 2020, plan to produce more high-quality and environmentally friendly products with a diverse range of models. In addition, it also plans to reduce production of packaging and household plastic products and increase production of technical plastics and plastic products for construction. To achieve the targets, the industry will focus more on developing raw material sources and will invest in new equipment and technology. Plastic exports topped 1.98 billion USD last year, up 42.2 percent over 2011. Exporters eager to follow Phu Quoc The recent Protected Designation of Origin (PDO) recognition for the Phu Quoc fish sauce trademark in the EU has raised hopes for thousands of Vietnamese exporters of agricultural products. The fish sauce made on Phu Quoc Island in the country's southwestern region is the first-ever Vietnamese product to be granted PDO status in the EU. It took three years to get trademark-protection recognition, according to the Phu Quoc Fish Sauce Association. Nguyen Thi Tinh, chairwoman of the association, said that PDO status will allow exporters to expand markets abroad. According to the Ministry of Industry and Trade, trademark protection in 28 countries in Europe creates favourable conditions for preventing fake products in the EU market and paves the way for other agricultural products to receive PDO recognition in other countries. Tinh said that Europe is the main market for Phu Quoc fish sauce. Vietnam exports 800,000 litres of Phu Quoc fish sauce to the EU each year, while its total annual export volume is about 1.5 million litres. With PDO recognition, the fish sauce, which has been produced on Phu Quoc Island for more than 200 years, will have much better access to foreign markets. To further protect its locally made products, the Phu Quoc Fish Sauce Association plans to proceed with a lawsuit against Thai fish-sauce producers that sell products with a phony Phu Quoc name in Europe . These Thai enterprises have not registered this brand in Europe and even in Thailand . Tinh added that the association is preparing the necessary documents for PDO recognition for fish-sauce products in Thailand , Hong Kong and other countries and territories. According to the Ministry of Science and Technology's Intellectual Property Department , Vietnam has thousands of agricultural products that could potentially be registered with an official trademark. However, only 35 products have been registered, and few of those are registered in other countries. Because of the lack of official registration, the name of Vietnamese products is often used illegally by other producers. For example, Trung Nguyen coffee and Phan Thiet fish sauce have been used illegally in other countries. Local companies that have been the victim of such practices say that it takes a great deal of time and money to win a lawsuit and reclaim their brand name. Nguyen Lam Vien, chairman and general director of Vinamit, which produces dried jackfruit, told Nguoi Lao Dong (Labourer) newspaper that he spent four years and hundred thousands of US dollar on a lawsuit to reclaim his company's trademark which had been illegally registered for PDO status in China in 2007. The Dong A General Production and Trade Company, the owner of Ben Tre coconut candy, has filed a lawsuit against Chinese enterprises that had registered the company's trademark in the country. In 2011, it was discovered that many famous geographical locations in Vietnam , such as the branded Buon Ma Thuot coffee, Dak Lak coffee and Phu Quoc fish sauce, were registered illegally in other countries. Several government agencies are now collecting proof to prepare for the process to reclaim these well-known brands. Vietnamese market falls back in world index Viet Nam's stock market has been rejected from the world's top six strongest growing markets, according to IndexQ which ranks the world market index. On Tuesday, the VN-Index still ranked sixth. However on Wednesday, IndexQ calculated the index increased at just 18.12 per cent from earlier this year, while the Nasdaq grew 19.77 per cent. Therefore, the US stock index replaced the VN-Index in the list. Investment in affiliates boost REE profits Refrigeration Electric Engineering Co (REE) said it achieved a net profit of VND529.4 billion (US$24.9 million) in the second quarter thanks to investment in affiliates. The company's revenue declined 9 per cent over the same period last year to VND610 billion ($28.7 million). However, profits from investment activities in affiliates reached VND382 billion ($18 million), driving the total profit up almost 3.5 times. The affiliates include Pha Lai Thermal Power (PPC), Deo Nai Coal (TDN) and Nui Beo Coal (NBC). Accumulated for the first half of this year, REE had a revenue of VND1.12 trillion ($52.8 million), down 5 per cent, while earned a profit of VND639.6 billion, up 58 per cent. The company completed only 47 per cent of the year's revenue plan but already 98 per cent of profit target. One in, one out on HCM City exchange Godaco Seafood Company (AGD) will voluntarily delist nearly 12 million of its shares from the HCM City Stock Exchange from August 28. AGD closed yesterday's session at the floor price of VND43,800 (US$2) per share. Meanwhile, Cai Lat Port Company has filed to list 24 million shares on the HCM City Stock Exchange. The company has a charter capital of VND240 billion ($11.3 million).- SAP Forum highlights latest innovations More than 400 business leaders and managers gathered for the SAP Forum Viet Nam to announce its latest innovations to help companies in in the country and the rest of the world to master the convergence of mobile, social, big data and cloud technology and succeed in a real-time networked economy. SAP Forum is a series of global events organised by SAP to showcase the latest technology innovations in countries across the world. It aims to deliver a premier customer experience to more than 70 cities in over 49 countries in Asia Pacific & Japan, Europe,the Middle East & Africa, Latin America and the Caribbean. The global road show will reach more than 45,000 customers, partners and industry analysts.- Bkav launches secure system for online banking The Bkav Internet Security Corporation launched a digital signature solution this week. Named Core CA, it is designed to protect electronic share trading on the stock market and during online banking transactions. The new software consists of the Online Certificate Status Protocol (OCSP), the digital signature provider and delivery system SubRA and the digital signature system SignServer. Ngo Tuan Anh, director of the department working on Bkav CA, said that if banks introduce systems using digital signatures like Core CA, all transaction data will be protected and users will not lose their accounts. HCM City hosts advertising exhibition The latest creative equipment and technologies used in the advertising industry are on show at an exhibition that opened in HCM City on Saturday. Eighty local and foreign advertising firms from China, Japan, South Korea, and Taiwan are taking part in the four-day event. Non-metal laser engraving machines, digital inkjet printers, LED technologies, advertising materials, gifts, and services are among the products on show at the 4th Viet Nam International Advertising Equipment and Technology Exhibition (VietAd). Several workshops are planned on the latest advertising technologies, equipment, and services, with a focus on green technologies. "VietAd, which achieved a certain success in the last three years, is a platform to connect advertising firms, creative advertisement designers, and equipment and technology suppliers," Dinh Quang Ngu, chairman of the Viet Nam Advertising Association, one of the organisers, said. According to the association, the Vietnamese advertising industry has grown rapidly, with revenues doubling between 2005 and 2011 to US$1 billion. Vietbuild expo to open in HCM City Nearly 800 local and foreign companies will showcase the latest developments in the construction industry at an exhibition in HCM City on August 14-15. Vietbuild 2013, the country's biggest construction sector expo, will be organised for a second time this year and be titled Property – Internal and External Decoration – Construction Materials. More than 2,160 booths will display building materials, internal and external decorative items, and equipment like solar energy systems and LED lighting. The 212 foreign businesses will be from 18 countries and territories including China, South Korea, Japan, Malaysia, Thailand, Italy, Hong Kong, Switzerland, Australia, Germany, the US, and the Netherlands. The organisers said amid the construction and property downturn, the event would be a valuable opportunity for businesses to market themselves. The exhibition will also feature a seminar on new products and advanced and environmentally friendly technologies in the construction sector, and a forum for businesses to compare notes on trends and demand. Ba Huan to supply US quality chicken Ba Huan Company Ltd, the biggest egg supplier and price-stabilisation programme participant in HCM City, yesterday announced that it had become the sole Vietnamese company to supply Hy-Line chicken, a high-quality chicken breed from the US. Although it did not disclose the amount of investment capital, the company said the co-operation between Ba Huan and Hy Line International, a world leader in poultry-layer genetics, would benefit the city's breeding sector and the city's price-stabilisation programme. The company has already run a trial programme and has achieved initial success, and the products from the new chicken breeds will soon reach the city's supermarkets. Le Ngoc Dao, deputy director of the city's Department of Industry and Trade, said that local companies in the city's price-stabilisation programme had remained passive in ensuring sources for poultry breeding. Because they had depended on foreign companies that had strengths in raising poultry, local companies had failed to control the price, she said. The co-operation between Ba Huan and Hy Line International, she said, would open a new page for local companies to develop close production in which a company would take part in all processes, from raising chickens, producing feed, harvesting eggs and selling poultry breeders to farmers. Such new steps, she said, would play an important role in the city's price stabilisation programme as domestic companies would begin to gain the initiative over their foreign counterparts. "For many years, Viet Nam faced a shortage of chicken breeds. Meanwhile, development of chicken breeds and their prices have strongly affected the price of eggs in the retail market. That's why we decided to invest and become more active so that we can supply a better price to Vietnamese farmers and customers," said Pham Thi Huan, director of Ba Huan Co Ltd. Pham Thanh Hung, the company's deputy director, told Viet Nam News that, with such a proactive move, his company would gain higher profits and production as it would help his company save time and money. Hung, however, declined to predict the level of future profits or production. Farmers advised on proper use of antibiotics in breeding Farmers should not use antibiotics and vaccines for their livestock without consulting animal health officials because the consequences of improper use are serious, experts said at a recent forum. They said improper use of antibiotics in livestock breeding can develop drug resistance in the animals and leave residues in animal meat, badly affecting the health of consumers. The forum, organised in southern Binh Duong Province, dealt with the use of medicines and vaccines for disease prevention in livestock. Dr Ha Thuy Hanh, deputy director of the National Agricultural Extension Center, said that while the livestock industry has advanced in recent years in terms of developing high quality breeds, providing better nutrition and taking better care of the animals, diseases have continued to exact a heavy price. This has happened because of shortcomings in vaccination and disease supervision, she said. "Using vaccines and other veterinary medicines in an improper way cannot help animals recover from disease. Instead it develops drug resistance, adversely affecting animal health and consumer health." Dr Nguyen Ngoc Hai of Nong Lam University said the local pig breeding industry did not develop in a stable manner and has a lower output compared to other countries. "Many farms have hundreds to thousands of sows, equalling industrial scale farms, but they have not developed in a systematical way, thus creating many problems," he said. Most local farmers are also not equipped with proper knowledge and skills to manage large scale breeding farms, he said. For instance, when diseases occurred, they do not know what emergency measures need to be taken to minimise damage. As a result, diseases get a chance to prolong and spread on a large scale, affecting the entire animal breeding industry, Hai said. On the other hand, the overuse of antibiotics has developed antibiotic resistance in animals, making it much more difficult to tackle diseases and epidemics. Hai said "most animal feed products available in the market are mixed with various antibiotics, so breeders must be very careful in choosing what they give their animals." He said improper use increases production costs in the long run. Delegates at the forum agreed that not all animals need every vaccine, so farmers should administer only those that are needed the most, based on the location of their farm and the history of the herd or flock. Most importantly, experts should be consulted before the vaccines are chosen and administered, the delegates said. The animal breeding industry in Viet Nam has enjoyed an average annual growth of 5-7 per cent in recent years, the forum heard. The country currently has 24.5 million pigs, 308 million poultry and 7.7 million heads of cattle. Organised by the National Agricultural Extension Centre in collaboration with the Department of Agriculture and Rural Development of Binh Duong Province, the forum saw the participation of more than 250 delegates from 23 provinces and cities, most of them farmers. Oil sector to focus on refinery, petrochemicals An executive from the Viet Nam National Oil and Gas Group (PetroVietnam) has stressed the need to develop the refining and petrochemical industries to help safeguard national energy and food security. The industries are also essential to the country's industrialisation and modernisation, Tran Thi Binh, PetroVietnam Deputy General Director said at a seminar in the central province of Quang Ngai on Thursday that sought ways for the sustainable growth of the oil and gas sector. The industries needs good planning, cutting-edge technologies and incentives for their projects, participants said, suggesting mobilising more foreign direct investment (FDI) and bank loans for the work. According to PetroVietnam's Development Strategy by 2015, the Dung Quat Oil Refinery will increase its current refining capacity of 130,500 barrels a day to 200,000 barrels. The Nghi Son Refinery will also be put into operation with a capacity of 200,000 barrels a day. The figure is expected to hit 400,000 barrels a day during the 2016-25 period. Another oil refinery named Long Son is expected to be built soon. By 2025, the oil and gas sector needs an investment capital of US$20-25 billion. Electricity price hike to hit business The 5 per cent increase in the price of electricity from Thursday has made people and businesses more worried about the possible increase in the cost of other goods and services in tough economic times. The Ministry of Industry and Trade announced the price of electricity would rise to an average VND1,508.85 per kWh (exclusive of value added tax), a surge of VND71.85 (5 per cent). The adjustment aimed to partly offset for the increased cost of power generation caused by the price hike of coal and gas. However, the move was a surprise to most people since the last electricity price rise was only in December. Also, the Government has always been cautious about raising power prices to curb inflation and stablise the macro economy and because many firms suffered from high inventories. Owner of freezing storehouses in Ha Noi's Hoan Kiem District Nguyen Thi Hieu said the cost of electricity made up 30 per cent of her total outgoings. "From the beginning of this year, costs have increased but to avoid losing clients we can't raise the rent," she said. Nguyen Hong Quang, director of Quang Lan Mini Mart supermarket in Long Bien District, said: "We are struggling to balance costs and revenue; more spending on power means less spending on other things." Chairman of the Ha Noi Supermarkets' Association Vu Vinh Phu said purchasing power was still weak and the increased electricity price was likely to cause deflation. Most supermarkets were planning to increase the prices of products while minimising costs, he said, emphasising it was a tough problem. Deputy General Director of Viet-Uc Steel Company said the power price rise was an extra burden to the industry already buckling under high inventories caused by the slowdown and the stagnant housing market. "The Government offered policies to stimulate production and consumption but the increase in power prices could hinder its efforts," he said. Meanwhile, president of the Viet Nam Energy Association Tran Viet Ngai said the price hike was necessary. Power prices were about 7 cent per KWh, 3 cents lower than in neighboring countries, he said, noting that the low prices depressed investors in power projects and Electricity of Viet Nam had suffered losses and didn't have enough capital to re-invest in production. "Without reinvestment in the power sector, energy security may be threatened," he said. He emphasized, however, that in the long-term a suitable road map for the power price hike was needed so that enterprises could adapt properly. At a recent monthly press conference, Government Office Minister Vu Duc Dam said higher power prices were expected to boost technological innovation and energy efficiency in projects in Viet Nam. "Moreover, with a limited State budget, Viet Nam is calling on the private sector to join the power industry but low prices accompanied by low profits had failed to attract investors," he stressed. Dam said the Government would relieve the burden on the poor and heavy laden and low-income earners. Under the new power price adjustment, poor and low-income households that use 0 to 50 kWh per month will be charged the same amount (VND993) as before but households that use 100-400 kWh per month will be charged an additional VND6,800 to VND37,000 per month. The last electricity price rise was 5 per cent (or VND68 per kWh) to VND1,437 per kWh, on December 22. On Saturday, Deputy Prime Minister Hoang Trung Hai hosted a meeting of the Steering Committee on National Power Development Plan No 7 to scrutinise the implementation of power projects. According to the Ministry of Industry and Trade, power productivity would rise by 13 per cent in the next two years. Power demand will be met from now until 2016-17, but after that period, there will be a shortage of 600 million kWh per year. Hai asked relevant authorities to carefully calculate demand and productivity, and look at every eventuality for investment in power projects until 2015. Project to lift tra fish sector sustainability Viet Nam plans to develop a sustainable supply chain for the tra fish (pangasius) industry by 2020, experts said at a conference held in HCM City yesterday. The Viet Nam Cleaner Production Centre and Viet Nam Association of Seafood Exporters and Producers (VASEP) together with other partners yesterday launched the Establishing a Sustainable Pangasius Supply Chain project (SUPA). The project, worth 2.4 million euros (US$3.2 million), of which the EU has funded 1.9 million euros ($2.5 million), will be implemented by the Viet Nam Cleaner Production Centre, VASEP, World Wildlife Fund (WWF-Viet Nam) and WWF-Austria. Speaking at the project-launch ceremony, Berenice Muraille, development counselor of the delegation of the EU to Viet Nam, said SUPA would improve the competitiveness of Viet Nam's pangasius industry in the global market. Under the project, the EU will support the entire pangasius supply chain, from hatcheries, feed producers and processors in Viet Nam to traders and end-use customers, including those in the EU, the largest export market for pangasius. The four-year project, which ends in 2017, will focus on capacity-building; promotion of responsible production to increase product quality; mitigation of environmental impact and reduction of production costs, by applying Resources Efficiency and Cleaner Production methodologies; product innovation; and market development and promotion. The project also supports information exchange and techniques for households and small- and medium-sized enterprises in applying the standards for sustainable production as outlined under the Aquaculture Stewardship Council and Global GAP (General Agricultural Practices) requirements. Speaking at the ceremony, Nguyen Hoai Nam, VASEP deputy secretary general, said pangasius, which is used as a daily food for residents in the Cuu Long (Mekong) Delta, has become a leading processing and export product of the aquaculture sector. Last year, the sector harvested about 1.2 million tonnes with export value of more than $1.7 billion, up from $40 million in 2000, Nam said. Besides its advantages, the pangasius sector is also facing a number of challenges such as a lack of long-term planning for the material production. In addition, the exported products are not diverse, and prices are not stable. The industry has not built a brand for the product, which allows it to be affected by negative information about its quality from rivals, he told Viet Nam News. According to Nam, the most critical issue in the industry is the lack of a value-chain and a balance between production and consumption, which has caused instability in profits and supply capacity. Tran Van Nhan, director of the Viet Nam Cleaner Production Centre, said SUPA was one of the support projects for Viet Nam's pangasius industry that uses effective methods for sustainable production and market promotion. The project also includes the application of research results into practice, Nhan said. Le Xuan Thinh, coordinator of the project, said the target groups of the project include 200 aquatic feed producers, 1,000 pangasius hatcheries, 100 pangasius processing companies, 750 small pangasius farms and 150 middle to large pangasius farms. It is expected that by the completion of the project at least 70 per cent of the targeted mid – to large pangasius producing and processing enterprises, and 30 per cent of the feed producers and small independent producers, will be actively engaged in resource efficiency and cleaner production. In addition, by 2017, at least 50 per cent of targeted small- and medium-sized processing enterprises will provide sustainable products compliant with ASC standards to the EU as well as other markets, according to Thinh. Vietnamese pangasius is well-liked by local and international consumers for its high nutritious value, white meat, few bones and lack of smell or sediment. It is also considered a safe product for all age groups. Viet Nam has nearly 70 pangasius export and processing companies, all of which have advanced equipment. Pangasius farming areas are strictly managed according to national regulations on food safety and environmental protection. As of June 2012, more than half of fish farming areas nationwide had been audited and certified by internationally sustainable standards, such as Global GAP, AquaGAP, BAP/GAA and ASC. The fish is exported to 145 countries and territories worldwide, particularly to the EU, the US, ASEAN member countries, Canada, the Middle East, China and Japan. Vietnamese outfits gain Asia recognition Ten Vietnamese enterprises have been included in Forbes Asia's list of 200 Best Under a Billion (dollars) of small- to medium-sized companies this year. They are Binh Dinh Minerals, Dinh Vu Port Investment & Development, Education Book JSC in Ha Noi, National Seed, Ninh Hoa Sugar, Pan Pacific, Sea & Air Freight International, Southern Seed, Vegetable Oil Packing and Viet Nam Container Shipping. The financial magazine said prospects for an economic rebound in Japan were looking better. The country jumped to 17 slots from four or fewer in recent years. Meanwhile, mainland Chinese and Hong Kong firms again dominate the list with 63 names. Taiwan has 26 names. The magazine described the Philippines as weak for scoring only one. In contrast, Viet Nam, struggling to regain recent economic-growth rates, has 10 names on the list. The editors, drawing on databases of 15,000 stock-traded companies in the Asia-Pacific with revenues between US$5 million and $1 billion, winnowed the choice to 873 that satisfied the following criteria - a five-year average return on equity and pretax margin greater than 10 per cent, positive sales and earnings per share growth for both the most recent fiscal one and three-year periods, debt less than 75 per cent of shareholders' equity, and a trading history of at least one year. The final 200 list is not ranked, but qualified firms are measured comparatively. Lee&Man gets project reprieve Hong Kong-based Lee&Man Paper Manufacturing has received in-principle approval from the Hau Giang People's Committee to extend the implementation progress of its paper complex in the southern province until the end of next year. During a recent meeting with the committee, representatives of the company promised to put its long-delayed complex into operation nearly two years later than the deadline agreed. The committee's deputy vice chairman, Nguyen Thanh Nhon, asked the company to provide reasons for the project's sluggish implementation as well as detailed plans for each phase of work in the future. This will be used by the committee to make a final decision on a time extension, Nhon said. In 2011, Lee&Man Viet Nam's director, Cheng Ching Kay, sent a document to the committee, announcing that the complex would go into commercial production in October this year. The provincial Industrial Zones Authority's report, however, said that as of July 25, the investor had only finished 83 per cent of site clearance while other major works remained under construction. Lee&Man, one of the world's premier paper manufacturers, obtained an investment licence in 2007 and broke ground for a paper complex in the province. It was hoped the plant would be able to supply the local paper-hungry industry. The investor earlier said it planned to pour US$1.2 billion into the complex and develop it in three phases. Power plant to follow BOT model The Ministry of Industry and Trade (MoIT) and Malaysian Toyo-Ink Corporation on Thursday signed a Memorandum of Understanding (MoU) on the Hau River 2 thermal power plant, which will be built towards the build-operate-transfer (BOT) model. The plant, which will have a total capacity of 2,000 MW, comprises of two turbine generators and will run on imported coal to supply electricity, contributing to ensuring national energy security, particularly in the southern region. According to Director General of MoIT's General Department of Energy Pham Manh Thang, the first generator of the plant is expected to start commercial production in the second quarter of 2021, and the entire plant in the second quarter of the following year. The General Department pledged to provide guidance and work closely with the investor to ensure the progress of the project, Thang added. Song Kok Cheong, CEO of Toyo-Ink, said with the support of MoIT, the corporation has worked with Viet Nam Electricity (EVN), other related agencies, localities and banks to run the project smoothly. He also committed to following the progress and ensuring the project's quality as set by MoIT. Addressing the signing ceremony, Deputy Minister of Industry and Trade Le Duong Quang affirmed that Viet Nam's total coal-fired power capacity needs to reach 36,000MW, accounting for 47 per cent of the whole power generation system's capacity. To meet the goal, the Vietnamese Government has issued policies and incentives to encourage investors, both in and out of the country, to join in building the core constructions under different cooperation forms, including the BOT model, he said. Subsidised computers to boost rural sales Each computer purchased through the Knowledge Connecting Network Programme will receive VND1 million (roughly equivalent to 15-20 per cent of the cost of a computer), according to the Ministry of Information and Communication (MIC). The programme will especially benefit people living in remote and isolated areas as they will get an additional VND500,000 plus a loan to buy a computer at zero interest for three years. In addition, each beneficiary will enjoy the lower internet access fee of VND250,000 for one year. According to MIC, half of the VND9 trillion programme will come from the State budget while the remainder will be made up from businesses operating in the information technology sector. MIC says that businesses who support the programme will get free nationwide advertising in most of the programme's activities. According to the draft that was submitted to the Government for approval, another 2.5 million computers supplied by the programme will be connected to the network by 2015. The number will increase to 7.5 million by 2020, according to the ministry. The programme's beneficiaries include pupils, students, teachers, professors, trainers, universities and colleges, people living in rural areas and people living in remote and isolated areas. Anyone who wants to apply to the programme should contact their provincial department of information and communications to find out how to apply and the procedures. The ministry hopes the draft will be approved within the year. Latex price drop hits farms, firms Falling rubber prices have been hitting local farmers and businesses for over a year. The price had fallen sharply from VND25,000 per kilo in the Central Highlands in mid-2012 to VND8,000-9,000 per kilo today, according to farmers. Rubber market experts said the falling price was following a global trend because large importers of Vietnamese rubber such as China had high inventories, and supplies were plentiful following harvests in Thailand and Malaysia. In July, the average export price dropped by 13.7 per cent against the same period last year to US$2,191 per tonne, according to the Ministry of Industry and Trade. This has had a negative impact on exports, and in the first seven months of this year, volume fell by 0.1 per cent to 500,000 tonnes and value plunged 17.6 per cent to $1.22 billion compared to the same period last year. Nguyen Thi Khuong, a farmer in Cu Mgar District, Central Highland Dak Lak Province has been growing rubber trees since 1996. She said that the drop in price had caused her huge losses because she still had to pay workers' salaries and interest on bank loans. Nguyen Van Tam, a farmer from Dak Rlap District, Central Highland Dak Nong Province, said it was approaching harvest time but he didn't want to gather his crop when prices were so low because production costs were high and he would end up making a loss. The Dak Lak Rubber Co Ltd had also suffered with the farmers, said Le Thi Bich Thao, head of the company's administrative office. "The price of processed latex had declined by 38 per cent to VND43 million per tonne against early 2012, causing his company's H1 revenue to fall 50 per cent year-on-year," Thao said. Last year, the company achieved VND1.1 trillion in revenue. The company would have to cut expenditure and increase output to reach its target for the year, she said. Rubber export enterprises expected output to increase but prices to fall due to high supply, according to the Viet Nam Rubber Association. Rubber exports for this year were estimated to fall by 7.7 per cent in volume and 16.3 per cent in value compared with 2012, said the Ministry of Agriculture and Rural Development. Government outlines deposit insurance regulations Decree 68/2013/ND-CP: New guidance on deposit insurance The Government on June 28 issued Decree 68/2013/ND-CP, detailing and guiding the Law on Deposit Insurance applicable to deposit insurers, organisations participating in deposit insurance, insured depositors and other related individuals and organisations. Accordingly, deposit insurers are state financial institutions established by the Prime Minister at the proposal of the Governor of the State Bank of Viet Nam as not-for-profit institutions with the legal entity status and self-financed operation. Their revenues are tax free. Eligible for participating in deposit insurance are credit institutions and foreign bank branches receiving individual deposits, including commercial banks, co-operative banks, people's credit funds; and foreign bank branches established and operating in accordance with the law on credit institutions. Micro-finance organisations must acquire deposit insurance for individual deposits, including voluntary deposits of micro-finance customers. Policy banks are not obliged to buy deposit insurance. At least fifteen days before commencing their operation, organisations participating in deposit insurance must submit their dossiers of application for deposit insurance participation certificate as prescribed in Clause 3, Article 14 of the Law on Deposit Insurance to deposit insurers, and may obtain such certificate within five working days after their dossiers are accepted. Institutions participating in deposit insurance may be authorised by deposit insurers to pay insurance sums to insured depositors. This Decree will take effect on August 19. Circular 87/2013/TT-BTC: Online securities trading services From August 15, securities companies whose operations are being suspended and transactions stopped for termination of their membership in the domestic stock exchanges or those placed under special control by the State Securities Commission (SSC) will no longer be allowed to provide on-line securities trading services. This is provided in the Ministry of Finance's Circular 87/2013/TT-BTC of June 28, guiding e-transactions on the securities market. Accordingly, securities companies providing on-line securities trading services must be members of and connected with the transaction system of the stock exchanges and register such services with the SSC. The new regulation also requires securities companies to provide services directly to investors but does not permit them to entrust or hire unlicensed organisations to provide such services. In the meantime, these companies must preserve and ensure the integrity of original electronic records and orders, record and preserve customer orders made via telephones for at least 10 years, and keep confidential information of organisations and individuals involved in on-line securities trading. The Circular details the application of digital signatures and certification by securities companies in on-line transactions. Both securities companies and investors are entitled to select digital signatures and certifications in on-line securities transactions. This Circular replaces Circular 50/2009/TT-BTC of March 16, 2009. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR