BUSINESS IN BRIEF 9/8 Vietnam ships over 4 million tonnes of rice Vietnam exported more than 4 million tonnes of rice in the first seven months of this year, raking in 1.74 billion USD. According to the Vietnam Food Association (VFA), the July figures were 576,398 tonnes and over 238.2 million USD respectively. At present, the price of dry rice in the Mekong Delta ranges from 5,300 VND to 5,400 VND per kg while the husked rice price varies from 6,900-7,200 VND per kg. VFA forecast that rice export this year can reach 7.5-7.6 million tonnes. Last year, the country shipped a record 7.72 million tonnes of rice, earning 3.45 billion USD. Foreign investors keen on new localities In the first seven months of this year, Viet Nam has seen foreign investors change their investment locations noticeably. Once attracting a large amount of foreign direct investment in the past years, big, bustling cities like Ha Noi and Ho Chi Minh City have so far this year recognized the rise of other localities which were previously seen as unattractive to foreign players, such as central Thanh Hoa province and the northern provinces of Thai Nguyen and Bac Ninh. These localities are regarded as “new land” for foreign investors. The Ministry of Planning and Investment has reported that as of July 20, 46 out of 63 provinces and municipalities lured new FDI projects. The northern province of Thai Nguyen became the second largest FDI recipient with over US$2.1 billion newly-registered capital and accounted 18.1% of the country’s total figure. Meanwhile, Bac Ninh province ranked third with over US$1.377 billion; followed by the southern province of Binh Dinh (over US$1 billion) and the northern province of Hai Duong (US$612 million). According to Nguyen Ba Cuong, Deputy Head of the Foreign Investment Agency, foreign investors are altering their location investment strategy as they are focusing more on local advantages such as abundant cleared land, labor forces and better investment environment. Vietnamese honey gets export permission to EU Viet Nam still stays in the list of countries which are allowed to export fresh honey to the EU, according to the Ministry of Industry and Trade (MoIT). The MoIT has reported that the EU had recognized the plan on residue management in made-in-Viet Nam honey exports. The European Commission's Directorate- General for Agriculture and Rural Development on July 31 released the recognition announcement on the plan. A representative of the Directorate-General revealed that the plan was accurate and met the EC’s criteria on health protection for customers. The MoIT said it hoped that the decision would help Vietnamese exporters consolidate and expand their export market and boost prestige of Vietnamese honey in the EU in particular and the world in general. Viet Nam is the sixth largest honey exporter in the world and the second largest in Asia. The country has recently shipped around 30,000 tons annually. State bank raises price of US dollar The State Bank of Viet Nam's Central Banking Department yesterday unexpectedly increased the US dollar price sold to commercial banks by VND274 to VND21,100 after keeping the rate unchanged for the past month. Interbank rate, however, remained stable at VND21,036 yesterday, unchanged since June 28. CEO of a commercial bank, who declined to be named, attributed the price rise to the SBV's move to resume the buying of the greenback after only selling it to stabilise the forex market during two weeks last month. The central bank decided to buy dollars again when it saw liquidity in the market improve and the cooling of the recent surge in exchange rates, he said. For the past week, the central bank has stopped selling dollars, but the market has remained stable. Dollar prices have been falling continuously, both in the official and unofficial markets. Early this week, some commercial banks continued adjusting down dollar prices, offering from VND21,080/21,100 for sales and VND21,160/ 21,170 for buying. Last month, the central bank had to sell a significant amount of dollars for two weeks to stabilise the forex market when dollar prices rose consecutively and often hit ceiling levels. Yesterday, forex rates listed at commercial banks also inched up after the SBV's move. Vietcombank listed the greenback selling/buying prices at VND21,060/21,130, up VND50 against the previous day. ACB and Eximbank rates were also up VND20-30. US$35 million plant to make automobile spare parts in Quang Ninh The Yazaki Haiphong-Vietnam Ltd Company will build a plant to manufacture automobile spare parts at Dong Mai industrial zone in Quang Ninh province. Construction of the US$35 million plant will start in October 2013 and be completed in August 2014. Once put into operation, the plant will produce more than 2.7 million sets of spare parts per year and generate jobs for around 3,000 workers.  Businesses updated on new EU’s tax regulations Local businesses and relevant agencies have learnt regulations on origin and issuance of certificate of origins, to help them expand exports in the EU market. At a seminar was held in the southern province of Dong Nai on August 6, Vietnamese businesses discussed principles of origins in free trade agreements (FTA) and the new Generalised Scheme of Preferences (GSP) of the European Union (EU). Claudio Dori, EU-MUTRAP’s technical assistance team leader, said the new GSP is expected to make a positive impact on Vietnam during the 2014-2017 period such as the re-application of preferential tariffs on a number of export products which was removed following the old GSP. However, Vietnam still faces increasing fierce competition from the union’s FTA partners, said Dori, adding that the problem can be solved once Vietnam signs a trade pact with the EU. According to the new GSP, all products from Vietnam will enjoy preferential tariffs when imported into the EU, but they must meet a number of requirements, especially those in origin. Nguyen Huu Nam, a representative from the Vietnam Chamber of Commerce and Industry (VCCI), said the new regulations will help promote Vietnam’s exports to the EU market. The seminar was co-organised by Dong Nai province’s Department of Industry and Trade and the European Trade Policy and Investment Support Project (EU-MUTRAP). Vietnam, Cuba sign MoU on economic cooperation Vietnam and Cuba have signed a memorandum of understanding (MoU) on building an agenda on bilateral economic cooperation, affirming the two Governments’ determination to further promote economic, trade and investment ties. The MoU was inked in Hanoi on August 7 by Vietnamese Construction Minister Trinh Dinh Dung, who is also President of the Vietnam-Cuba Intergovernmental Committee (VCIC), and Cuban Ambassador to Vietnam Fredesman Turro Gonzalez. The document reflects the two countries’ desire to expand and deepen their economic, trade and investment ties by defining priority areas for cooperation in the next five years with a view to bringing more practical and effective benefits to both nations’ development, he said. Ambassador Fredesman Turro Gonzalez said the document was a result of active contributions by Vietnamese agencies, especially the Construction Ministry. It will be a foundation for both countries to coordinate more closely in building and implementing economic and trade cooperation initiatives in priority areas, he said. On this occasion, Minister Dung presented the Cuban Ambassador with an insignia for the development of the Vietnamese construction sector. Banks optimistic despite profit fall, bad debts While most credit institutions(CIs) see potential risks in the banking system due to the level of bad debt, they also see brighter prospects for the second half of the year, according to a recent survey by the State Bank of Viet Nam (SBV). The survey of business trends, carried out by SBV's Department of Statistics revealed that 124 CIs around the country have stated that bad debt remains a major issue and subsequently business results for the first six months were not as good as expected. According to the survey, the most important factors that impact on banks are the business environment and customer risk. However the risk level of certain customer groups rose during the first six months of the year. This has resulted in fifty per cent of CIs warning that their bad debt ratio could exceed that of 2012. On top of this, more than half of CIs report that their pre-tax profits fell in the first six months of 2013 compared to the last six months of 2012, recording a drop of between 20-30 per cent. At the same time, CIs were more positive about the next six months when the economic recovery will bolster capital and encourage credit growth, improving profits. More than half of the banks interviewed (55.1 per cent) said they expect their business outlook to improve this year with an increase in customers when deposit rates and capital loans will be lowered over the next three and six months. While more than 70 per cent of CIs expect to see bigger profits, they will remain fairly modest, coming in at under 10 per cent. Experts to talk to hopefuls at international job expo Top business executives will interact with graduates and other youths at an international career and education expo that will be held for the first time in Viet Nam. US-based human resources firm CareerBuilder's annual Career Builder Day – Career & and Education Expo, will be organised in HCM City this month and Ha Noi early next month. Expected to attract more 10,000 visitors, it will see the participation of Pham Phu Ngoc Trai, chairman and general director of Global Integration Business Consultants, Dr Alan Phan, former chairman of VIASA Investment Fund, Than Trong Phuc, CEO of DFJ VinaCapital, and Ton Nu Thi Ninh, Viet Nam's former ambassador to the EU and Belgium. Central city promotes investment in Yokohama Japanese businesses were called to boost investment in a Hi-Tech Park and Information Technology (IT) Park in Viet Nam's central Da Nang City at an Investment Promotion Conference in Yokohama, Japan yesterday. At the conference, which drew the participation of over 180 Japanese businesses, the central city introduced the 1,010-ha Hi-Tech Park and the 341-ha IT Park – the third biggest in Viet Nam. The city has attracted 90 businesses from Japan with a total investment of over US$400 million. Exports from Japanese enterprises accounted for 37 per cent of the city's total imports, while 30 per cent of the city's industrial production value comes from Japanese FDI projects. Competition aims to find top creative entrepreneurs Young Vietnamese businesspeople working in creative industries are encouraged to join a global competition launched by the British Council. The Young Creative Entrepreneur Screen/Multimedia Awards will select a national winner who will go on to represent Viet Nam in the UK, where they will participate in a week-long tour, including two days at the London Cross Media Forum. The event will bring together leading multimedia creators, thinkers and practitioners from across the fields of film, television, inter-active media, on-line, mobile, gaming, publishing and live events. In addition, there will also be a curated programme of networking events and master class sessions introducing the competition's winners to UK peers and media experts. Gold exporters need SJC assessment certificate The General Department of Viet Nam Customs has recently requested exporters of material gold with 999,9 alloy to acquire assessment certificate from the Sai Gon Jewelry Company Limited (SJC) to clear export procedures. Exporters of material and jewelry gold with gold content of less than 999,9 must seek conclusions from organizations functional in gold assessment or ask for evaluation of the SJC. According to the Customs Department, the new procedures are carried out to avoid tax losses. In the past time, some customs divisions based on assessment certificate of unauthorized organisations to clear export procedures, resulting in improper tax collections. Customs to streamline procedures Deputy Prime Minister Vu Van Ninh has asked relevant ministries and agencies to continue implementing the ASEAN one door mechanism as part of Viet Nam's commitment to the bloc and for the interests of the country. Co-operation among relevant ministries and agencies relating to the import and export of commodities remained limited, wasting time and affecting customs clearance for commodities, he told a meeting of the National Steering Committee on the ASEAN one door mechanism, and the national one door customs mechanism, yesterday. The implementation of the programme remained slow and some ministries and agencies failed to fulfill their tasks, he said. Ninh stressed that joint inspections between relevant ministries and agencies would help facilitate import and export activities at border crossings. He also urged for the prompt implementation of the national one door customs portal. According to the committee, the ministries of industry and trade, finance and transport have piloted the national one door customs mechanism for procedures relating to exit and entry activities and sea vessels in transit at international ports in HCM City and the northern port of Hai Phing City, relating to e-customs procedures and procedures in granting commodities' origin certificates for export goods following an agreement on preferential tariffs for goods imported and exported among ASEAN member states. The committee plans to create a project on piloting a model of joint commodity inspection among relevant ministries and agencies at border crossings. HCM City licenses 16,600 new firms this year More than 16,600 new businesses with a total registered capital of VND68.3 trillion (US$3.23 billion) were licensed in HCM City in the first seven months of 2013, a year-on-year rise of 5 per cent. Over the same period, 20,860 existing businesses registered to increase their capital by VND64.7 trillion ($3.06 billion), bringing the total capital operational in HCM City to nearly VND133.1 trillion. However, 10,113 other businesses suspended operations, including 1,346 that were dissolved. The city received 224 new foreign direct investment (FDI) projects worth $259.1 million, while 68 other FDI projects registered for capital expansion worth $346.6 million in the first seven months of the year. The city's total export turnover during this period reached $15.76 billion. It's CPI (consumer price index) climbed by 0.96 per cent compared with December 2012 and by 1.47 per cent over the same period last year. Le Hoang Quan, Chairman of the HCM City People's Committee, said that in the second half of the year, his administration has been focusing on implementing measures to boost business, including production. Speaking at a meeting held last week to review the city's socio-economic development in the first seven months of 2013, he also said that they would continue promoting the price stabilisation programme in the remaining months of the year. This would ensure that essential goods could be purchased by residents at reasonable prices, he said. Island development too laid-back Deputy PM Vu Van Ninh has told the Ministry of Planning and Investment (MPI) to submit to the Government specific mechanisms and policies needed to turn the country's largest island, Phu Quoc, into a special economic zone. Ninh complained about the slow development of plans to turn the island into a city in southernmost Kien Giang Province and gradually set up a special administrative and economic zone. He said that although he had told the MPI to complete the plans in December last year, it has so far submitted only a draft to the PM. To speed up the progress, Ninh required the Steering Committee for the West Southern Region and Kien Giang Province to carry out feasibility studies on developing special procedures and policies for Phu Quoc. He added that they should see the proposal of Quang Ninh on building policies for Van Don Island as a reference. Ninh also instructed local authorities to scrutinise investors who want to invest in the area with priorities given to large-sized, high tech and environment protection projects. The local authorities recently said that they cancelled 93 projects on Phu Quoc Island, with a total area of 5,500ha. These projects were stopped because investors could not find funding to implement the projects so that the implementation were slow or did not take place at all. Some projects are no longer suitable for the development plan of Phu Quoc Island. In the whole island, the total number of valid projects is said to be more than 200. They cover a total area of 8,900ha. Of these, 81 projects were granted investment certificates covering 3,800ha, with a total capital of VND88 trillion, (US$4 billion) but only 13 are operating. In the Master Development Planning of Phu Quoc Island approved by the Government, the island is considered important as it is located in the centre of South East Asia. Enterprises informed of latest EU regulations A seminar was held on Tuesday in the southern province of Dong Nai to discuss the principles of ‘origins' in free trade agreements (FTA) and the new Generalised Scheme of Preferences (GSP) the European Union has adopted. During the seminar entitled "Rules of Origin in FTAs and new EU laws," which was co-organised by Dong Nai Province's Department of Industry and Trade and the European Trade Policy and Investment Support Project (EU-MUTRAP), businesses and Governmental agencies were updated with the latest information in the field. They also learned about the regulations on origin and issuing certificates of origin which would help them make full use of the new GSP and promote their exports further to the EU market. According to Claudio Dori, head of the EU-MUTRAP's technical assistance team, the new GSP will have a positive impact on Viet Nam during the period 2014-17 as a number of exports will see preferential tariffs reintroduced, after they were removed following the old GSP. However, Viet Nam still faces increasingly fierce competition from the union's FTA partners, said Dori, adding that the problem could be solved once Viet Nam signs a trade pact with the EU. According to the new GSP, all products from Viet Nam will enjoy preferential tariffs when imported to the EU, but they must meet a number of requirements, especially those on origin. Addressing the seminar, Nguyen Huu Nam, representing Viet Nam's Chamber of Commerce and Industry, said that the new regulations will help to promote Vietnamese exports to the EU market. Also at the seminar, Trinh Thi Thu Hien, an official from the Ministry of Industry and Trade, gave a briefing on ways of making full use of the Rules of Origin in FTAs, that Viet Nam has joined. Many bond-funded projects fall behind schedule Many projects funded by government bonds are falling behind schedule and delivering a lower economic efficiency than expected, which will build up debt burden, leading to rising inflation and macroeconomic imbalances in the future, said a source overseeing bond issuance. “Thus, I think there should be a mechanism to oblige owners of government bond-funded projects to use funds for the right purposes and timely put their projects into operation,” said Tran Van Dung, chairman and general director of Hanoi Stock Exchange (HNX), the unit in charge of government bond auction. The Government will constantly issue bonds but needs to keep public debt at a safe level. The best way to do this is to carefully select the projects to receive government bond funds and to effectively control fund use. The recent decision of the National Assembly and the Government on control over the use of government bond funds is a critical step towards this objective, he noted. Dung however said the bond market would remain attractive later this year for several factors. Bond yields in Vietnam have fallen but are still higher than the international average. If the exchange rate remains stable and the balance of trade is good, government bonds will be still attractive, especially when inflation is well restrained. In addition, deposits at banks are still rising, but credits will hardly grow across the board. Thus, there will be redundant cash, part of which may be spent on government bonds, he said. “To develop, a country needs investment, and as private investment is now modest, public investment must increase to maintain total investment,” said Dung. Public investment needs to balance the goals of managing the macro-economy, curbing inflation, protecting the local currency value and facilitating the private sector to grow, rather than replacing the private sector. When private investment has rebounded and credit growth is good, public investment will be reduced and government bond funding will slow down, he said “That’s the spirit of the coordination between fiscal and monetary that any policy maker and decision maker have to always consider,” he remarked. Local coal prices higher than global prices Vietnam National Coal and Mineral Industries Group (TKV) has not lowered local coal prices despite its few coal export contracts in the context that global coal prices have fallen sharply over the past months. A local company in Hanoi imported 10,000 tons of high-thermal anthracite coal from Australia on July 23, which is not the first import shipment of this enterprise in recent years. An executive of the importing company said the coal import is to diversify supply to avoid the reliance on TKV as the single supplier.  But the biggest reason is that the import coal price of the same type including transport fees is just equivalent to the price set by TKV right in the domestic market. In other words, TKV’s coal price is higher than that of foreign sellers. The coal product is imported into the country while TKV is still bemoaning the mounting inventories and its failure to win export contracts, especially after the finance ministry increased the coal export tax to 13% from the previous 10% from July 7. Specifically, the import price of the aforesaid coal comprising of the transport fee is US$128 a ton while the coal price TKV offers to local firms is higher although it isn’t slapped export tariffs. At the end of June, the offered price of low thermal coal dust of TKV is US$69 a ton while the same product is offered at only some US$55 to US$56 a ton in Guangzhou, China. TKV deputy general director of Nguyen Van Bien once ascribed the gap between TKV’s price and import prices to the export tax rate hiked to 13% from 10% by the finance ministry from July 7 and the production costs of his firm rising 4-5% annually. These two factors pushing up the production costs have made TKV unable to compete with other foreign producers in coal exports. At present, Indonesia, Australia and China as the world’s largest coal suppliers levy the export tax rates of between 0% and 10%. The high export price has dragged down the export volume of TKV to an average of about 400,000-500,000 tons a month from the previous 1.2 million tons. Still, TKV has not decreased the selling price to boost domestic sales while local firms have begun importing coal. According to a local company, as most domestic firms in need of stable supply have still purchased coal from TKV, the group remains the monopolistic supplier in the local market and it still has the right to fix the selling price. TV advertising still reigns over market Television stations continued to dominate the local advertising market in the first half of this year with a 92% market share, up three percentage points compared to the entire last year. In the first six months, the media reaped advertising sales of over VND10.9 trillion, according to a recent survey of Kantar Media Vietnam. Tran Thi Thanh Mai, general director of Kantar Media Vietnam, said that the survey reached 84 TV channels, 67 newspapers and magazines and one radio station, which accounted for nearly 90% of the local advertising market. The remaining 10% was shared equally among outdoor and online ads while the other types of adverting made up a small fraction. According to the enterprise, Vietnam has 65 public TV stations and 63 local stations, and 11 pay-TV service providers. The nation now has 198 local and foreign TV channels, around 800 newspapers and magazines. The number of Internet users has increased to 31 million while around 107 million phone subscribers have been reported. Kantar Media Vietnam’s surveys suggest that TV remains the most popular means of media in the country, making it the most effective advertising tool for goods producers. Budget revenue rises 41.9% in July Actual cash revenue received by the Government in July was estimated at VND73 trillion (US$3.43 billion), up 41.9% from the previous month, according to the Ministry of Finance. Total revenue in the first seven months of 2013 was VND429.165 (US$20.17 billion), up 6.3% from a year earlier and is equivalent to 52.6% of the budgeted revenue for the full-year. In the January-July period, revenue from domestic economic activities rose 8.2% year on year to VND281.720 trillion (US$13.24 billion) while revenue from crude oil exports reached VND64.33 trillion (US$3.02 billion). During the same period, total governmental expenditures were estimated at VND527.86 trillion (US$24.81 billion), resulting in a deficit for the seven-month period ending in July of VND98.695 trillion (US$4.64 billion). Despite an increase in revenue, many are concerned that the deficit is too high at 60,9% of the figure allowed by the National Assembly. Meanwhile revenue of some major economic centres like Ho Chi Minh City fell short of expectations and it is predicted that these localities will unlikely reach the target for 2013. Steel production still mired in hardship The steel industry is expected to see more challenges in the coming time as the real estate market remains sluggish, inventory keeps piling up and China-made cheap steel products continue to flow into the country. The Ministry of Industry and Trade in a report released at the regular press briefing in Hanoi on Monday said that local steel firms have also undercut one another to raise market shares and compete with others. In the January-July period, over 1.5 million tons of raw steel and iron was consumed, down 13.6% against 2012, while rolled steel sales reached nearly 1.6 million tons, up 24.5% year-on-year. Steel bar and angle steel sales was nearly two million tons, an 8.4% increase. To speed up sales and reduce stockpile, most producers have offered promotion programs and raised discounts for customers. They have cut sale prices for construction projects and given transport cost assistance. Compared to June, steel prices in July declined by VND100,000-250,000 a ton depending on areas and brands. According to the General Statistics Office, the steel industry reported a trade deficit of nearly US$3 billion from January to July. The nation exported 1.2 million tons of steel worth US$1 billion while imported 5.4 million tons worth US$4 billion, up 10.5% year-on-year. Meanwhile, the mechanics, electric and electronics sectors saw positive signs in the Jan-July period. During this period, assembled auto output reached nearly 55,000 units, up 13% year-on-year, bike production output was over 2.1 million units, a 19% increase, television set output was nearly 1.6 million units, up 3.8%, and cell-phone output increased 8.5% to 66 million units. The Government’s tax incentives and reduction of auto registration fee from 15% to 10% were reasons for production improvements of the industries. Banks grapple to boost consumer credit Banks are finding it tough to boost lending to individual clients, including consumer credit, in the backdrop of a sharp fall in demand among corporate borrowers due to economic woes. A senior source from Vietcombank said consumer credit only made up a small portion of the bank’s total outstanding credits. The lender has not achieved expected results from this operation as consumers are tightening their purse string. Sharing this view, the deputy general director of a joint stock bank in HCMC said his bank had not recorded positive changes in consumer credit. Loans provided to manufacturers and businessmen accounted for 84% of the total outstanding loans in HCMC in the first seven months of the year. The rest were non-manufacturing credits, including loans given to property firms and consumers. Total outstanding loans in HCMC at the end of July stood at VND903 trillion, up 5.56% from the end of 2012, said the HCMC branch of the central bank. Consumption was quite slow in the first half of the year due to sluggish demand, but the purchasing power is getting stronger, according to the General Statistics Office. Total retail sales of consumer goods and services in the first six months are put at over VND1.27 trillion, up 11.9% year-on-year, or 4.9% with the price hike factor excluded, versus 6.7% in the same period last year. However, consumption is on the recovery path as total retail sales of goods and services registered an increase of 5.1% in the second quarter, higher than 4.5% in the first quarter. In response to this positive sign, banks are boosting lending to accomplish their profit targets for this year. They have offered many consumer credit packages, some of which are advertised with an interest rate of 0% for the first few months. HDBank has launched a VND1-trillion credit package aimed at individual clients in need of loans for consumption and business. The lending rate is set at 0% for the first month and in the next 11 months, it is 11.86% for loans worth VND500 million or above and 12.8% for those ranging from VND200 million to below VND500 billion. Earlier, Nam A Bank has also offered a preferential credit package for homebuyers with a zero interest rate for the first three months. However, Tran Ngoc Tam, deputy general director of the bank, said the results so far were not as good as expected. Meanwhile, preferential programs for card holders are plentiful and diverse. For example, those making payments by ACB-Mastercard have a chance to win a trip to Singapore. Western Bank will refund 1% of the bill value to those using its ATM cards to make payments at any point of sales nationwide. Vingroup, insurers cut deal to cover Times City VinGroup Company on Monday signed an agreement with BIDV Insurance Corporation (BIC) and Petrolimex Insurance Corporation (Pjico) to provide insurance service for Times City project with the total cover of VND7 trillion. According to a statement released by BIC on Monday, the contract includes insurance packages for asset risks, fire and explosion, business interruption, public liability and machine collapse. Located in Hanoi City’s Hai Ba Trung District, the Times City urban complex covers 37 hectares with many facilities such as high-class condos, amusement park, commercial center, cuisine area, hospital and school. The project is expected to start operating this month. BIC since 2006 has provided insurance services for many projects developed by VinGroup such as Vincom Centre Hanoi, Vincom Eden B, Vinpearl Land and Vincom Village. On July 17, VinGroup appointed BIC and Pjico to provide insurance service for Royal City project with the total liability of nearly VND13 trillion. Saigon Co.op launches co-branded card with three banks Saigon Co.op supermarket chain and three banks Vietcombank, BIDV and DongA announced to launch the co-branded card last Friday. Saigon Co.op is the first local retailer which coordinates with local banks to offer the card to consumers. The card offers the benefits of supermarket chains Co.opmart and Co.opXtra of Saigon Co.op while also boasting key features of the local debit cards of the three lenders with an aim to increase benefits for customers and encourage them to make non-cash payments. Under the program, cardholders can use payment services offered by the banks including cash withdrawals at automated teller machines. They are also subject to the benefits of the customer programs at Co.opmart and CoopXtra like point accumulation and discounts. In addition, cardholders are able to enjoy incentives and take part in promotions designed for the co-branded card under arrangement of Saigon Co.op and the lenders. Customers can register for the card issuance at branches of the banks or at Co.opmart and Co.opXtraplus in HCMC’s Thu Duc District. Salt output up 1.5 times Vietnam’s salt output soared 146 percent to over 800,000 tonnes in the first half of this year as farmers switched to salt production to capitalise on its growing market value. The increase in salt producing areas promises to lift salt output to more than one million tonnes for the whole year, adequately meeting local demand, said the Ministry of Agriculture and Rural Development (MARD). To reap these satisfactory results, the provincial and municipal People’s Committees have paid due attention to directing salt production, processing and consumption to keep the price of salt at a reasonable level and help farmers increase their income, said deputy director of MARD’s Department of Agro-Forestry-Fisheries and Salt An Van Khanh. Meanwhile, some leading salt businesses like the southern Sosal Group, helped farmers consume their salt and ensure market stabilisation. The group is expected to buy and manufacture more than 711,300 tonnes of salt in 2013. In order to advance the salt quality and decrease dependence on high-quality salt imports, the State has strengthened its support for farmers to upgrade their salt fields, prioritising agricultural expansion, industrial stimulation, poverty reduction and the construction of new-style rural areas. Many local farmers received technical assistance to switch to producing clean salt crystals on salt fields with canvas, which proves very effective with better quality, productivity and ability to serve industrial production, compared to conventional methods. Deputy Head of the Ben Tre provincial Department of Rural Development Nguyen Van Thuong appealed for monetary support from the State to help salt workers expand the canvas model. His division is also proposing local leaders fund half of the canvas value for farmers. Should this proposal be approved, it will create opportunities for the sector’s development, thereby facilitating salt farmers to get rich from their occupation, Thuong added. A recent research study conducted by Hanoi University of Science and Technology on processing black salt into excellent industrial salt created new hope for the sector as its products are adequate to serve domestic industry and exports, completely altering the volume of imported high-quality salt. The MARD will shore up the sector by focusing on areas that have potential to turn out salt with high productivity to ensure local consumption and industrial production at home. Vinatex increases investments to spur localization Vietnam National Textile and Garment Group (Vinatex) and its member units are investing in many material supply projects to increase the localization rate and the added value of exported products. Le Tien Truong, deputy general director of Vinatex, said that to achieve this target, the group implemented 46 projects worth a combined VND6.144 trillion in the year’s first half. Among these, there are 14 yarn projects, four textile projects, 20 garment projects and 20 other ones. According to Truong, three yarn projects which have been put into operation are Vinatex-Hong Linh plant, Phu Bai plant and Dong Van plant. The total capacity of these three plants is 1,270 tons of yarn a year. Similarly, Vinatex has also started operating Yen My textile plant having a capacity of 180,000 meters of cloth. Other knitting and yarn projects are being carried out such as Phu Hung, PVTEX Nam Dinh, PVTEX Phu Bai 3, Dong Phu and Wash Tam Quan of Phong Phu Corporation with a total of 4.5 million products per year. According to Truong, the ultimate goal is to establish the full-fledged supply chain among units of the group, securing materials for all l production processes from yarn, knitting, dyeing to sewing. Truong said that such investment increase has helped raise the localization of products of member companies in the past time as well as reduce the import of materials. According to statistics of Vinatex, its export turnover amounted to some US$1.28 billion in the six-month period, up 13% year-on-year. However, the import of materials in the period rose by only 7% to US$581 million. Vinatex’s localization rate was over 50%. Enterprises forecast that the global garment trade would continue rising in the coming time and thus garment would still be Vietnam’s major exports. However, Vietnam’s garment still depends much on imported materials and its added value is low. Besides, the Trans-Pacific Partnership (TPP) agreement if approved is expected to boost the export of garments, especially to the U.S. thanks to the import tariff cut to 0% compared to the current rates of 16-32%. However, according to the Vietnam Textile and Apparel Association (Vitas), among over 3,000 textile and garment enterprises nationwide, the number of foreign-invested enterprises accounts for only 25% but their export turnover always account for over 60% of the country’s total. In the year’s first half, Vietnam’s total import turnover of textile-garment materials reached US$6.58 billion. Such import, according to Vitas, inched up by roughly 20% from last year’s same period while the import of materials for export rose by 21.1% to US$5.378 billion. Home insurance not easy to buy Home insurance is one of the solutions suggested by the Ministry of Construction in a bid to protect homebuyers from losing their money when investors fail to continue their projects, but this suggestion is deemed impractical. Nguyen Van Duc, deputy director of Dat Lanh Real Estate Co., said no insurance firm would dare to sell insurance to condo projects as many of them were now mired in troubles, posing a very high risk of project suspension. Duc wondered who would be the one to purchase home insurance. If it is homebuyers, then they will have to cover an additional cost. If it is investors, the costs of their projects will be pushed up and eventually factored in selling prices. Besides, home insurance premium will certainly be exorbitant since real estate is a highly risky area, making the suggestion of the construction ministry impractical, said Duc. Phung Dac Loc, general secretary of the Association of Vietnam Insurers, said insurance had been bought to cover the risk of fires and sudden disasters at buildings, not the financial viability of investors. Insurance companies do not dare to sell insurance to those likely to commit frauds and legal violations. But if they did, they would quote a very high premium that investors could hardly bear, said Loc. Home insurance is just like bank guarantee, Loc noted. It is insurance for the liability of investors to realize what they commit in the contracts with their customers. If investors failed to do so, those acting as guarantees for them would take over the liability, said Loc. The problem is, to get guarantee, investors must have money or collateral with a value greater than the project’s value. “People are playing on the safe side. No one would offer guarantee for free,” said Loc. The idea of home insurance emerges from the fact that many housing projects have got payments from homebuyers but cannot deliver homes on schedule, leading to the loss of confidence among homebuyers. The problem is homebuyers have no idea whether investors use their money to develop the projects or pour it into other projects. There are now some 1,320 housing projects with around 572,000 units in HCMC. Among them, 131 projects have been completed, about 310 projects are inactive and the rest are under construction, according to the HCMC Department of Construction. Complex project in Hanoi’s golden land area kicked off New Times T&T Joint Stock Company under Tan Hoang Minh Group on Monday began construction of the D’. San Raffles complex project located at 22-24 Hang Bai and 25-27 Hai Ba Trung in Hanoi’s Hoan Kiem District. The complex San Raffles consisting of a commercial center, office space and apartments is constructed in an area of 4,000 square meters. The complex is opposite to Trang Tien Plaza and only two minutes’ walk to Sword Lake, a golden land site in Hanoi. San Raffles has six basements, eight floors and a mansard roof with total floor space of over 40,000 square meters. ADB finances traffic project linking city with delta The Asian Development Bank (ADB) will lend Vietnam US$410 million to build traffic infrastructure connecting HCMC to the Mekong Delta, with the travel time between the city and Long Xuyen aimed to be reduced to 2.5 hours. Two cable-stayed bridges with a combined length of five kilometers and associated access and interconnecting roads totaling 26 kilometers will be built under the Central Mekong Delta Region Connectivity Project. The project will build a section of the second southern highway running on the boundaries of An Giang, Can Tho and Dong Thap to the west of the Mekong Delta Region, says a press release from the ADB on Monday. The two bridges and the interconnecting road will cut the time for travel between HCMC and Long Xuyen from 3.5 to 2.5 hours. Meanwhile, the travel time from Cao Lanh Ferry to Vam Cong Ferry will fall from 1.5 hours to 30 minutes. In addition, the travel distance from Cao Lanh to Long Xuyen will be reduced from 35.4 to 29 kilometers. The highway is expected to be open to traffic by the end of 2017. When the bridges and the highway are open to traffic, they will benefit 170,000 road users daily and generate 400,000 new jobs in the construction and manufacturing sectors, says the press release. Rustam Ishenaliev, transport specialist from the ADB’s Southeast Asia Department, said: “Vietnam has a rapidly growing export-led economy, and the Mekong Delta is a key economic driver which produces more than 60% of Vietnam’s agricultural and fishery outputs and the third largest industrial center.” “This transport link will help open up Vietnam’s western provinces in the Mekong River Delta and support its economic and industrial development,” he said. The project is expected to cost US$860 million, with US$410 million to be sourced from the ADB’s Ordinary Capital Resources. In addition, the Australian Agency for International Development (AusAID) will grant AUD$160 million, or around US$142 million, for construction of Cao Lanh Bridge and interconnecting road. Parallel financing of US$260 million from the Export-Import Bank of Korea will be used to construct Vam Cong Bridge and its associated road works. The Government of Vietnam will contribute US$56 million towards the cost of the project. As planned by the Ministry of Transport, if design and bidding were finished early, the project would get off the ground right in 2013. The Mekong Delta is divided by the Tien River and the Hau River. Although there have been My Thuan Bridge and Can Tho Bridge, vehicles traveling between the Mekong Delta localities still have to take Vam Cong Ferry across the Tien River and Cao Lanh Ferry across the Hau River. Fertilizer prices drop on low consumption Consumption of fertilizers, especially urea, has fallen sharply in the Mekong Delta as the summer-autumn rice crop is being harvested and the demand for fertilizers in the autumn-winter crop is sluggish. Nguyen Minh Dang, director of the private enterprise Minh Dang, a primary fertilizer sales agent in Can Tho, said his enterprise was selling China-made urea fertilizer and that of Ca Mau to secondary sales agents and farmers at VND7,500 per kilo, or VND375,000 per 50-kilo bag. This is the lowest price since the beginning of this year, he stressed. Fertilizer prices have dropped by an average VND600-700 per kilo, or VND30,000-35,000 each 50-kilo bag, from the level recorded nearly three month ago, during the peak time of sowing in the summer-autumn rice crop, according to sales agents in the Mekong Delta. Phu My urea fertilizer is currently priced at VND200 per kilo higher than Chinese and Ca Mau products. It sells for around VND7,700 per kilo, equivalent to VND385,000 a 50-kilo bag. Dang ascribed low consumption at home and price drops in the global market to shrinking fertilizer prices in the local market. PetroVietnam Ca Mau Fertilizer Company informed that granular urea fertilizers made in Southeast Asian countries were priced at US$332-345 per ton in mid-July, while Chinese fertilizers were quoted at US$305-310 per ton and American products at US$317-324. Ca Mau granular urea fertilizer in the middle of July sold for VND8,300-8,500 per kilo, or US$395-404 per ton, higher than the global levels. Meanwhile, Chinese crystal fertilizers were priced at US$295-300 per ton in the middle of last month and those made in the Middle East sold for US$315-320 a ton. Fertilizer dealers in the Mekong Delta predicted fertilizer prices would remain stable at low levels in the next few months. If there was any price fluctuation, it would not be wide, they said. Higher rice prices at home deal blow to exporters The rice market is warming up with both domestic and export prices increasing, but the companies that have signed export contracts at lower prices earlier are sitting on fire. Export offer prices of Vietnamese rice have risen by 3%, or US$10 per ton, over the past week, according to the rice market information website Oryza.com. However, exporters stressed export rice prices were picking up at a slower pace than domestic prices, leading to potential losses from the contracts signed earlier when prices stayed low. In the first seven months of the year, multiple rice export contracts were cancelled, said the Vietnam Food Association (VFA). A source told the Daily that the volume of rice signed in the cancelled contracts was nearly one million tons. Penalties for contract cancellation are not as great as the losses exporters would incur if fulfilling their contracts. Therefore, rice exporters are willing to cancel export contracts and pay penalties, said a rice exporting firm. Foreign institutions forecast Vietnamese rice prices would continue to increase. However, VFA noted rice supply was currently larger than demand in the global market, with India and Thailand likely to sell off their products, posing many challenges for Vietnamese rice export. Lam Tuan Anh, director of Thinh Phat Food Company in Ben Tre, informed Thailand had sold more than 100,000 tons of rice whose quality equals the 5% broken rice of Vietnam at over US$440 per ton, making it hard for Vietnamese companies to export rice at US$410 per ton. Thus, the FOB price of the 5% broken rice on Monday fell to US$405 a ton. Le Truong Son, general director of Docimexco in Dong Thap, said China, the largest rice buyer of Vietnam in the year to date, entered its harvest season this August, leading to a lower demand for rice imports. Rice exporters are awaiting the return to the rice market of traditional importers like Indonesia and the Philippines. Domestic rice prices are improving, but farmers do not benefit since most of them have already sold out their rice. Duong Van Men, a rice trader in Lap Vo District, Dong Thap Province, said the fresh paddy IR 50404 now sold for VND4,550-4,600 per kilo while the long-grain types were priced at VND4,850-4,950 a kilo, an increase of VND100 per kilo from the previous week. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR