New licensing for steel imports
Steel importers will have to register each lot of steel products they import with the MoIT. Every automatic import licence is valid within 30 days after confirmation by the ministry. The licence will be granted within seven working days for normal applications and five working days for online applications.
The move to enforce import registration was made after reports that a significant steel volume has been imported to the country while steel demand in the domestic market is low and local steel producers face high inventories due to low consumption. It was estimated that roughly 200,000-300,000 tonnes of Chinese steel are imported to the country monthly, mainly to southern provinces.
Meanwhile, according to the Viet Nam Steel Association, the domestic steel market has not showed signs of recovery for the past several months and consumption demands also remain low. The country’s steel output in July was 506,200 tonnes, while steel consumption in the same month was only 351,000 tonnes.
Domestic steel producers said that they had to cut output to avoid having too much inventory. But some steel products still had a surplus of up to 40 per cent in the first six months of 2012.
Le Phu Hung, general director of the Viet Nam Steel Corporation, said the corporation’s July output decreased 13 per cent from the previous month and many plants had to stop production several days early.
Hung said that his corporation found it difficult to sell products, even though it cut its sale price by VND300-900 per kilogramme.
Hung admitted that consumption of Viet Nam-made steel was low, and that domestically produced steel was less competitive than imported products due to high input costs.
MoIT forecast that steel demand in the last months of the third quarter would not increase. However, it recommended domestic steel producers seize the opportunity to boost consumption in the last quarter of the year as the Government has planned to increase public investment in the industry this year.
Gas supplies to remain stable
Meanwhile, gas traders said the refinery’s announcement to suspend production was made so suddenly that they were unprepared.
Sai Gon Petro Co Ltd also said it had to purchase an extra 1,000 tonnes of gas to stabilise its supply. The company estimated the shortage would last until the refinery returned to operation at around 9,000 tonnes.
However, the gas association’s vice president Le Thi Anh Man alleged that reserve capacity of many gas traders was insufficient.
Meanwhile, “gas supply for the market is assured,” she affirmed, adding that large companies such as Petrolimex and Sai Gon Petro had adequate reserves.
“The country is going to import over 40,000 tonnes, so a lack of gas is impossible,” she said.
Any increase in domestic gas prices depends on a number of factors, the most important of which is the contract price on the international market. “Therefore, a shortage for some small suppliers will not affect the domestic price,” she said.
However, some retailers have still raised their prices, citing short supply. A retailer in Ha Noi’s Cau Giay District lifted its selling price twice this month. The first time, the price rose by VND52,000 (US$2.4) for a 12-kg gas tank. It then increased by VND20,000 (nearly $1) a week later.
Retail gas price currently ranges between VND390,000-415,000 ($18.5-19.7) per tank.
Man said: “If management were strict enough, prices would not increase in such an unorganised way.”
Because gas is an essential consumer good, there should be more efficient sanctions to regulate the disorderly retail gas market.
Seafood exports see rising profits in Q3
The fisheries industry’s export value is expected to achieve a year-on-year increase of 17 per cent for the third quarter, hitting US$1.84 billion in total.
Therefore, the total export value could exceed $4.7 billion in the first three quarters of this year and the yearly export value target may reach $6.5 billion, according to the Viet Nam Seafood Exporters and Producers‘ (VASEP) report on seafood exports in the second quarter of this year.
Demand for seafood in key export markets is predicted to increase in the third and fourth quarters of this year, said Truong Dinh Hoe, VASEP general secretary.
Seafood exporting enterprises identified potential difficulties early this year in order to adjust their development strategies for the year and achieve positive business results in the last two quarters, he said.
The Government’s macroeconomic policies, including credit policies, have positively affected the export activities of the enterprises, he said.
The association expected exports of tra fish and shrimp would continue to reduce by 10 per cent in August against the same period of last year but the export value would rise after September because of high demand in export markets.
Shrimp export value was estimated to see a quarter-on-quarter increase of 19 per cent but a year-on-year decline of 4 per cent to reach $690 million for the third quarter.
Meanwhile, tuna, other kinds of sea fish, cuttle-fish and octopus would continue to surge in export value for the third quarter, rising by 25-40 per cent in comparison with the same period of last year.
However, the association said, seafood exporters would still face challenges in raw materials, high input costs and trade barriers in export markets.
The lack of raw materials for export product processing would continue until September, when a support package worth VND9 trillion ($428.6 million) for the tra fish production industry would go into action, promoting production of tra fish and creating favourable conditions in credit for enterprises to buy raw material for processing.
Next month, the domestic supply of shrimp and other kinds of sea fish would increase but the fisheries industry would still import raw material for export product processing with a total import value of $60-65 million each month in the third quarter, the association said.
In the third quarter, input costs would still be as high as in the second quarter and increase 15-25 per cent against the same period of last year. Therefore, the enterprises would find it hard to increase production in the third quarter.
Da Nang hopes to climb PCI ranking
Among 63 provinces and cities nationwide, Da Nang has gone down from being in the top three for six years (2005-10) to fifth last year.
The PCI, administered by the Viet Nam Chamber of Commerce and Industry, showed that the central city had sustained a progressive index in five years in a row, but the figure began going down from late 2010 to 2011 due to the global economic crisis and the lack of proactivity by city leaders.
“We were in the top three for six consecutive years, but last year that figure declined. The city has yet to release details of the many problems stemming from the economic downturn or offer effective solutions,” said the city’s chairman Van Huu Chien.
“For this reason, we hosted the conference to figure out the best way to improve the PCI in coming years,” he told the conference.
He added that the conference was an opportunity for businesses and officials from the city’s departments to propose ways to improve the investment environment as well as the PCI.
Businesses pointed out that the city’s poor condition resulted from major indexes including informal charges; business support service; time costs of regulatory compliance and access to land.
“The current PCI shows that businesses’ satisfaction with the city’s leadership has decreased. Among 14,000 enterprises in the city, small- and medium-sized enterprises (SMEs) have yet to receive preference on loans, land clearance and technology from the city,” said Van Huu Thiet, vice chairman and general secretary of the city’s SMEs Association.
“We need the city to support us in land policy, banks loans and transparency in investment policy,” he said.
He also added that SMEs could hardly manage to get loans with an interest rate of under 15 per cent from banks.
In a survey of the city’s Institute for Social Economic Development, 47 per cent of 188 businesses had to pay for informal charges ‘ higher than the figure last year.
“Private businesses still face more difficulties in getting loans than the State-owned businesses. They (private businesses) also are annoyed by public servants’ procedural issues,” said Ho Ky Minh, the institute’s director.
“18 per cent of those businesses have to bribe bank staff to get loans, while 32 per cent still blame the complicated procedure at banks,” he added.
The city has planned an industrial park in Hoa Khanh district for SMEs and also reformed its policy regarding them.
“The city should organise more dialogues between the city and businesses as well as economic forums, industrial exhibitions and sale promotion abroad,” vice chairman of Young Business Association Le Van Hieu said.
Int’l travel expo to be held in HCM CityFINECS Group to inaugurate plant
Construction began last December on the US$7 million project, which would produce 5 billion products per year.
Bac Kan enjoys industrial growth
Industrial production value in the first seven months of the year in northern Bac Kan Province saw a 7-per-cent increase over the same period last year.
The mining industry is valued at VND74.3 billion (US$3.5 million) while the processing industry is valued at VND73.1 billion ($3.4 million).
VN exports more shrimp to Australia
Viet Nam exported US$44.2 million worth of shrimp to Australia in the first half of this year, up 63 per cent year-on-year, according to the Viet Nam Seafood Exporters and Processors (VASEP).
During the period, exports of processed shrimp accounted for 77 per cent of Viet Nam’s shrimp export turnover from the market, which means the market looks promising for the Vietnamese shrimp industry.
Big C responds to promotion month
The French-owned Big C supermarket has launched a promotion offering discounts of up to 40 per cent on nearly 1,200 products until September 3 in response to HCM City’s annual promotion month in September.
The promotion is also part of its 14th anniversary celebrations in Viet Nam.
There will be lucky draws with attractive prizes for customers.
VN-built cranes shipped to Singapore
With the latest shipment, the company has supplied 36 of the total order of 39 cranes placed by PSA Corporation Ltd.
The RTGCs have a lift rating of 40 tonnes while the larger RMQCs are designed for a maximum load of 56 tonnes. These two types of cranes are at the centre of global logistics and are in use at ports worldwide.
Businesses grapple with debt
Many Vietnamese companies are deep in debt, after years of dependence on debt financing, excessive business diversification and property overdevelopment, according to experts.
“Financial reports for the second quarter show that the average ratio of total liabilities to equity of 647 non-financial Vietnamese companies listed on the country’s two stock exchanges (using book values) stands at 1.53, a high ratio compared to other economies,” said Nguyen Xuan Thanh, public policy director for the Fulbright Economics Teaching Programme in Viet Nam, affiliated with the Harvard Kennedy School.
Construction and real estate companies have the highest ratio of 2.07. Last year, the figures were 1.2 for listed companies in the US and 1.06 for those in China.
Thanh said the ratio of total liabilities to equity was much higher among State-owned enterprises, with Song Da Corp topping the list at 8.85, followed by Hanoi Urban Development (HUD) at 6.36 and Petrolimex at 6.29.
As of the end of April, State-owned enterprises represented more than 77 per cent of total outstanding loans.
“Many companies have diversified into banks, securities companies and the real estate sector,” he said.
Nguyen said that 90 per cent of the country’s more than 100 securities companies would shut down in the next two years, leaving five to seven survivors.
In addition, most real-estate companies are expected to go bankrupt if the market does not improve.
Ineffective management and lack of a long-term strategy as well as poor financial planning were the reasons behind the failures, according to Nguyen.
To handle the debt problem, Thanh said that state-owned enterprises should be treated first through equitisation, since they hold the biggest debt.
If they have already gone through equitisation, then selling some assets would be one way of paying debt. This would enable banks to expand credit and have a positive impact on the economy.
In addition, setting up institutions to trade debts and assets would help debtors in the non-state owned sector.
He suggested that companies review all ownership documents and paperwork, estimate the value of each site in the current market, assess the likelihood of a successful deal in the open market, and assess the best method of disposal, through tender, private treaty or auction. They should also outline the terms and conditions of sale.
Dominic Price, CEO for J.P. Morgan Vietnam, said that companies could also try to access more foreign capital through strategic sales, equity private placement, convertible bonds and secured or unsecured bank loans.
Foreign investors, however, consider transparency a critical factor when they make decisions, and many Vietnamese companies do not meet this criterion, according to Price.
Good corporate governance, a long-term development strategy and an ability to execute business strategies are other factors that foreign investors would consider.
Leading companies such as Binh Minh Plastic, Vincom and Vietcombank have successfully attracted foreign investment.
Mekong Delta plans to boost industry
The Cuu Long (Mekong) Delta’s 12 provinces and lone centrally administered city, Can Tho, are working on a co-ordinated programme to increase the proportion of industry to 40 per cent of their GDP by 2015.
The Southwest Region Steering Committee, which announced this, revealed some of the strategies they plan to achieve this target by increasing the value of manufacturing to VND302 trillion (US$14 billion).
The delta, the country’s largest rice, fruit, producing and aquaculture area, will speed up construction of the Ca Mau gas-electricity-fertiliser project and the O Mon power project to ensure there is enough electricity for industry.
The region will boost co-operation with HCM City and the south-east to develop, focusing on seafood and agricultural processing.
Kien Giang will develop the cement industry and An Giang will focus on mining sand and stones for construction.
Can Tho will develop heavy and high-tech industries, fisheries and agriculture machinery, consumer goods, technology-based sectors, and those that provide high value addition.
The region will build an additional 36 industrial parks and clusters, seaports that can accommodate 10,000-tonne ships, and the HCM City- Can Tho Expressway, and upgrade national highways from Can Tho to Ca Mau and Kien Giang.
An industrial parks association will be set up to facilitate investment.
The region will co-operate with research institutes and universities for technology transfer and training, especially to produce highly qualified workers.
Authorities will assist businesses in mobilising funds, improving their competitiveness, and creating brand names for local products.
With a population of about 17 million, the delta region accounts for more than 20 per cent of the country’s population.
Wholesale food prices continue to decline
Although fuel price has risen three times within three weeks, prices of many fresh food commodities at wholesale markets and supermarkets continue to decline.
On August 15, at Thu Duc Agriculture Wholesale Market, prices of many kinds of vegetables continued to drop by VND500-2,000 per kilogram. Compared to their price ten day earlier, the price of gourds and winter melons fell by VND500-1,000 per kilogram to VND3,000 per kilogram.
Tomatoes dropped to VND6,500 per kilogram, down VND2,000 per kilo. Cucumbers decreased by VND1,000 per kilo to VND3,500-4,000 per kilo. Chayote was sold at VND1,000-2,000 per kilo, a drop of VND1,500-2,000 per kilo.
According to Nguyen Thanh Ha, deputy director of Thu Duc Agriculture Wholesale Market Management and Trade Company, prices fell as the amount of produce converging in the market remained high, about 3,200 tons a night, while purchasing power did not improve and even slumped, leading to excess supply.
Ha forecast that the price of vegetables at Thu Duc Wholesale Market will continue to be stable at a low level as the weather is favoring cultivation. Besides, demand is expected to be weak as income of citizens did not improve in comparison with the current price level.
Meanwhile, Binh Dien Wholesale Market experienced the same situation with supply always exceeding demand so that traders had to extend their opening hours to 10 or 11am.
On August 14, the amount of pork meat gathered at the market reached 240 tons per night, up by 10 percent compared to that a week earlier. The amount of seafood also topped more than 900 tons per night.
According to Nguyen Dang Phu, deputy director of Binh Dien Wholesale Market, the price of broken port meat was at VND44,000 per kilo; first-grade mackerel was priced at VND125,000 per kilo, down by VND5,000 per kilo; round scads were sold at VND23,000 per kilo, a decrease of VND3,000 per kilo; pangasius dropped by VND2,000 per kilo.
In the past week, prices of many commodities decreased but the market management board will closely watch the market movement as fuel prices rose for the third time.
In reality, although prices remained stable or even fell at wholesale markets, price level climbed at retail markets since the beginning of this year. At retail markets, some products were sold at a price two or three times higher than their prices at wholesale markets.
For instance, a kilo of cucumbers sold at VND4,000 at wholesale market, but at VND12,000-15,000 in retail markets; wholesale price of tomatoes were at VND6,500 per kilo, but retail price was at VND13,000-15,000 per kilo; and wholesale price of winter melon was at VND3,000 per kilo but retail price was up VND4,000-9,000 per kilo.
Some said that it is not reasonable to compare mechanically wholesale price with retail price as traders also have to face pressure from fuel price rise and other expenses. However, it has been seen that traders benefit most from disparity in wholesale and retail prices. With retail prices not being controlled, people flock to sell vegetables, opening several spontaneous markets in alleys around the city as selling vegetables creates greater income than working at a factory.
Authorities should tightly control retail prices at markets and grocery stores to ensure justice for consumers and farmers, and help to boost consumption and stabilize social security.
In related news, BigC Supermarket has been offering a discount upto 40 percent on 1,200 products, along with thousands of prizes worth VND3.5 billion from August 15 to September 3. During the same period, LotteMart is also offering discounts of 30-40 percent on several products, including fresh foods, dried foods, cosmetics, household appliances, electronic devices and clothes.
Eximbank and GDC co-operate in tax collection
The Vietnam Export-Import Bank (Eximbank) and the General Department of Customs (GDC) signed an agreement yesterday to co-operate in collecting taxes and customs duties electronically.
Under the agreement, the GDC will be notified as soon as enterprises pay taxes at any Eximbank branch via a data network set up between the bank and the GDC.
This will help enterprises reduce the amount of time spent for clearing goods and fulfilling their tax obligations, and also simplify tax payment procedures.
Eximbank has also pledged to pay customs duties on behalf of exporters and importers if they cannot make their tax payments, a move aimed at reducing time and costs to boost business with foreign partners.
This co-operation between Eximbank and the GDC is expected to contribute significantly to reforming tax procedures and managing funds, in addition to promoting non-cash payments.
Renewable energy products launched at expoAquatic exports set to rebound in third quarter
Aquatic product exports are estimated to increase in the third quarter of this year to US$1.84 billion, up 17% against the previous quarter and 7% compared to the same period last year, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).
The VASEP also predicted that export revenues will record over US$4.7 billion in the first nine months of 2012 and possibly reach the target US$6.5 billion set for the year.
The Government’s bailout package of VND9,000 billion for the tra fish sector should boost production and create favourable conditions for businesses to buy input materials, thereby resolving the current material and capital shortages.
The US remains Vietnam’s largest export market, followed by Europe. The Republic of Korea, Australia, Mexico, ASEAN countries and China are also potential markets that are continuing to increase their imports from Vietnam.
Kinh Do divests financial investments
Kinh Do Corporation (KDC) has announced to basically finish divesting its financial investments in the year’s second quarter as part of its strategy of restructuring investments.
Kelly Wong, deputy general director for financials, said that the firm’s management board has decided to make divestments in both Nutifood and Tribeco as such investments are no longer suitable to its strategy.
Specifically, the stake transfer at Nutifood resulted in a loss of almost VND71.32 billion for Kinh Do while it earned VND1.7 billion from the divestment at Tribeco, according to its consolidated financial report of the second quarter.
Besides, the firm obtained VND18 billion by selling shares in its investment portfolio, but it did not mention the specific profit.
According to Kinh Do’s management board, the stake transfers at these two companies have left an impact on the firm’s short-term profit but will bring in long-term benefits, specifically with the resource focus on food production and business expansion in the future.
Regarding its staple products of confectionery and food, Kinh Do still achieved a revenue growth with an after-tax profit of over VND65.9 billion in the year’s first half despite economic difficulties.
Kinh Do suffered a loss of VND5.4 billion in the first six months resulting from the stake transfers. Besides, the firm will issue bonus shares to shareholders at a rate of 20% next month and then merge Vinabico into the group.
Hydropower in Laos to join Vietnam’s grid
Speaking at a seminar on national power development plan in the 2011-2020 period in HCMC on Wednesday, Nguyen Anh Tuan, deputy head of the Vietnam Energy Institution, said operation of the plant would help ease power shortage in Central Vietnam.
Construction of the project began in 2007 with the total investment of nearly US$280 million.
Vietnam has plans to build eight more hydropower plants in Laos in the future.
Tuan said the Government prioritizes importing electricity from Laos, and then Cambodia and China. However, over the past two years, power projects Vietnamese companies invest in Laos and Cambodia have fallen behind schedule due to financial hardship and problems in site clearance and evacuation.
Therefore, the nation has to import electricity from China with an output of around 1,000 MW, or five billion kWh, each year, making up 3-4% of Vietnam’s total output.
Concerning the national power development plan, Tuan said the Government has given nod for Electricity of Vietnam to revise down the national power demand by 2015 with an annual average growth rate of 13%. The plan earlier forecasted a growth rate of 14% per year.
Accordingly, the nation’s total commercial power output will be 151.5 billion kWh in 2015, falling by 18 billion kWh compared to the plan. Of which, power demand of the South will be 79 billion kWh, a hefty decline of 9.7 billion kWh.
‘”Revising down power demand forecast means extending implementation progress of power plants by a year compared to earlier schedule. This will help avoids mistakes in construction and reduce investment pressure for power projects,'” Tuan said.
All medical waste to be treated by 2020
A conference on master plan for treating harmful medical solid waste during the 2011-2015 period, with a vision toward 2020, was organised by the Ministry of Health (MoH) in Ho Chi Minh City yesterday.
The plan aims to ensure that 85% of non-hazardous solid medical waste and 70% of hazardous medical waste will be collected and properly treated by 2015, with 100% being properly treated by 2020.
The scheme will be implemented in three phases, focusing on collecting, classifying, storing and reducing solid waste at medical facilities, as well as upgrading solid waste incinerators and improving human resources management.
According to the MoH, more than 13,500 hospitals and medical clinics nationwide discharge around 140 tonnes of solid waste each day, including 30 tonnes of hazardous waste.
More than 95% of those facilities already classify their waste and nearly 91% collect waste every day.
However, only 45.3% of hospitals across the country store their waste in environmentally friendly facilities, while 73% have incinerators to effectively treat their waste but 27% still dispose of their waste by burning it in the open air or burying it on hospital grounds or in local landfills.
Lotte seeks to increase capital
Supermarket chain operator Lotte Vietnam on Wednesday submitted a proposal to the HCMC government to raise its chartered capital by US$55 million to expand its retail network in the country.
The company also announced its decision to buy the remaining 20% of its Vietnamese partner Minh Van Company to become a 100% foreign-invested company in Vietnam. Lotte also has plans to inaugurate two retail centers in Dong Nai Province and Danang City at the end of this year.
Speaking at the meeting on Wednesday with Moon Young-Pyo, executive managing director for Lotte Southeast Asia, HCMC vice chairwoman Nguyen Thi Hong said foreign retailers will be supported to expand distribution network into outlying areas and bring Vietnamese goods to the global market.
‘”The city center is covered by many retail centers while the distribution network in outlying districts fails to meet demands of the large population there,'” Hong explained.
Concerning support for Vietnamese goods export, Hong suggested that Lotte brings Vietnamese goods to its 256 retail points worldwide.
German supermarket chain Metro has recently agreed to launch Vietnamese goods at its network and Metro’s purchasing executives have worked with local suppliers. Many Vietnamese products have been displayed in Europe thanks to Metro’s retail centers, Hong added.
‘”We have invited around 150 Vietnamese suppliers to learn about demands and purchasing criteria of Lotte. Among these, many enterprises have been chosen,'” Moon said.
Sky high inventories plague firms
Building materials producers have been knocked sideways by a hostile business climate.
Vinacomin reported 10.2 million tonne coal inventory as of July 31. Assuming one tonne of coal fetches VND1.4-1.5 million ($66-$71), this unsold stock costs approximately VND15 trillion ($714 million).
Vinacomin reaped VND500 billion ($23.8 million) profits in the first six months of 2012, a big retreat compared to its more than VND2.2 trillion ($104.7 million) profits in 2011’s same period.
Vicem Ha Tien 1 Cement Joint Stock Company (HT1) currently has a VND1.105 trillion ($52.6 million) inventory, down VND160 billion ($7.6 million) compared to the first quarter as a result of its strenuous efforts to boost sales.
Bim Son Cement’s current inventory costs VND552 billion ($26.2 million). Small firms are also burdened with rising inventory. For instance, a tunnel brick shareholding company in central Thua Thien-Hue province reports unsold stock worth more than VND15 billion ($714,000) of this VND10 billion ($476,000) suffers high interest rates.
This big idle capital amount made the firm incur serious losses. It had to retrench production to ease consumption pressures, said the firm’s director Nguyen Van Thien.
As with HT1, of its current VND11.105 trillion ($528 million) outstanding loans short-term loans account for VND4.240 trillion ($202 million). This triggers concerns about the firm’s ability to pay up debts upon maturity since the company’s 2011 revenue was VND5.3 trillion ($250 million). HT1 did not generate profits in four consecutive quarters since financial expenses have eaten up its profits.
HT1 is not alone. Fifteen listed cement and cement packaging firms report total asset value VND32 trillion ($1.5 billion) but their outstanding loans have amounted to VND25.5 trillion ($1.2 billion), tantamount to 79 per cent debt over asset rate.
Of these firms, Bim Son Cement’s short-term debts reach VND1.496 trillion ($71.2 million) against VND1.370 trillion ($65.2 million) short-term asset. Its profits in the first six months shed 12 per cent on-year and equal to 40 per cent of the year’s plan standing at VND12.2 billion ($580,000).
Three firms counted losses in the first half including Sai Son Cement, Tien Son Ha Tay and Song Da Yaly Cement joint stock companies.
Vietnam’s first coal-fired power project gets steam drum installed
The lifting of the massive Unit 1 Steam Drum into the Mong Duong 2 BOT power project, the first and largest BOT project of it’s kind in Vietnam, commenced today in the northern province of Quang Ninh.
A ceremony was held in the presence of representatives from Ministry of Industry and Trade, and the Quang Ninh People’s Committee.
The steam drum is a key piece of a coal-fired power plant, being the heart of the boiler which produces steam to spin the turbine and power the generator.
The installation itself marked a significant milestone in keeping the pace of construction on schedule, and completes the work on the boiler’s steel structure and the commencement of its erection process. It was also a massive undertaking, as the drum weighed approximately 230 tonnes.
David Stone, Managing Director of the AES-VCM Mong Duong Power Company Limited, the company responsible for the project said at the ceremony, ‘”We are extremely happy to witness the commencement of lifting of the Unit 1 Steam Drum. There have been more than 3.5 million man-hours put into the work without any lost time incidents to date. We are confident that we’ll be able to complete the project on schedule, and that it will be a great contribution to Vietnam’s fast-developing economy.”
The project is slated to be operational by the second half of 2015 and will generate 7.6 billion kwh of electricity a year. After 25 years of operation, it will be handed over to the Vietnamese Government under the BOT agreement.
AES-VCM Mong Duong Power Company Limited was started by three shareholders, AES Corporation from the U.S. (51%), Posco Energy Corporation from Korea (30%), and the China Investment Corporation (19%). The project’s EPC contractors include Doosan Heavy Industries Vietnam Co. Ltd. and its subsidiaries.
Vietnamese goods fall short in domestic market
Despite the slowing in sales of Chinese goods, Vietnamese companies have not filled in the gap.
Over the past month, Vietnamese customers have tended to turn their backs on Chinese products, particularly clothes and agricultural products, after publicity about their low quality.
Thu Duc and Hoc Mon wholesale markets in HCM City, the largest outlets for Chinese products, saw a 30% fall sales of Chinese goods compared to last year.
Nguyen Thanh Ha, Deputy General Director of Thu Duc Wholesale Market, said that around 70-80 tonnes of Chinese vegetables and fruits are imported into the market every day, accounting for 10% – 15% of the market’s total products. Now, the market mostly imports popular goods such as onions, garlic, cabbage, potato and grapefruit from China, but they have now fallen out of favour with Vietnamese customers. Chinese produce only sells well when there are not enough domestic products, she said.
Chinese potatoes are priced at VND12,000 per kilogramme, compared to VND28,000 for Dalat potatoes, nevertheless, customers still prioritise domestic products. Some sellers tried to mix Chinese potatoes with red soil to make them look like those grown in Dalat, Ha added.
Chinese clothes and footwear traders also complain over poor sales. Thanh Hoai, owner of a fashion shop on Nguyen Trai Street, District 5, HCM City, said ‘”I used to come to the Mong Cai border in Quang Ninh Province to get Chinese products and resell them to shops. But for the past two months sales have gone down.”
Vietnamese companies fail to take advantage
In spite of the drop in sales of Chinese products, Vietnamese companies haven’t taken advantage of the situation as many expected.
Dr. Vo Mai, Vice Chairman of Vietnam Gardening Association, said Vietnamese fruits and vegetables are high-quality and abundant. Even though there are exports to countries like Thailand and China, inferior technology has set the industry back.
‘”Traders care about profits, which means that at times they force growers to produce quick, cheap goods at low cost. The situation has been slowing down the development of this industry for years,” he said.
Farmers are currently looking to the State for help in finding markets for their produce.
The Vietnamese garment and textile industries also find it hard to compete with Chinese because of the low overhead needed by their foreign rivals, and because the “Made in Vietnam” tag has often been used by foreign companies.
According to the Vietnam Textile and Garment Association, domestic supply sources only meet 0.75% of cotton demand and 30% artificial fiber. At the same time companies have to import 100% of machines and 70% of other materials.
2 new tourism ships launched for Mekong tours
The Saigon Shipyard in Ho Chi Minh City’s District 7 Wednesday saw the launch of two newly-built deluxe tourism ships named Mekong Prestige and Cruiseco Adventurer.
The 68m-long ships, designed and supervised by the Dai Duong Phang Co Litd, are equipped with 32 luxury cabins capable of carrying 64 tourists.
The shipbuilder said the high-quality boats are designed with optimized fuel-consumption, noise-reduction and high-speed engines.
In related news, a hydrofoil traveling from HCMC to the coastal city of Vung Tau Wednesday frightened its passengers after the vessel was flooded by water flowing through a broken glass window.
Fortunately the hydrofoil managed to dock at a nearby harbor, and there were no casualties.
Luxury tour operator wins award
Luxury Travel Co Ltd has won a 2012 Guide Award, marking the fifth consecutive year that the company has been recognised by luxury travellers for excellent performance.
Presented by the Guide Magazine, a Vietnamese travel and hospitality magazine, the 13th batch of awards aimed to honour the travel providers offering the best products and services to travellers, hotel guests, diners and shoppers in Viet Nam.
The awards are sponsored annually by the Viet Nam National Administration of Tourism and the Viet Nam Economic Times newspaper. In 2012, newspaper readers and travellers chose Luxury Travel Co for their unique products.
Established in 2004, Luxury Travel Co is the first luxury tour operator in Viet Nam. The company sees an annual growth of 30 per cent and serves some 10,000 travellers each year.
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