Tuesday, June 26, 2012

BUSINESS IN BRIEF 26/6 ? TalkVietnam

Vietbuild 2012 features 800 businesses

The International Exhibition of Construction, Building Materials, Housing and Interior Dcor (Vietbuild) 2012 will be held at the Phu Tho sports hall in HCM City from July 4-8.

Nearly 2,200 stalls representing 800 businesses from 22 countries and territories around the world will showcase a wide variety of products and practical programmes to help businesses with their future development and progress.

A representative of the Vietbuild 2012 organizing board, Nguyen Dinh Hung, said despite current difficulties in the construction and real estate markets, the expo has attracted many domestic and foreign businesses seeking to promote trade, investment cooperation, and co-ordination to work towards a brighter future for the sector.

About 20 seminars focused on new technologies and environmentally friendly innovations in the construction industry have been scheduled during the exhibition, and awards will be presented to the businesses producing the best quality products on show.

Agro waste turns into million-dollar revenues

It is without question that bagasse, pineapple skins, and cashew husks are agricultural by-products, but to some innovative businesses these are also a huge source of revenue, helping them rake in millions of US dollars annually.

?Cashew husks are no longer considered waste, but have become a valuable raw material,? said Tran Van Phuc, director of Phuc Dung Co Ltd, one of the dozen cashew-shell oil processors in the southern province of Binh Phuoc.

?Processing oil from the cashew husks can bring in several hundred US dollars every year.?

Cashew-shell oil businesses last year processed 80,000 tons of product, 60,000 tons of which was exported, allowing them to pocket more than $50 million, according to figures from the Vietnam Cashew Association (Vinacas).

?Cashew shell oil, and other products made from it, has potential for development in the future, and is a new direction for the cashew sector to go in, besides just exporting cashew nuts,? he said.

Businesses said the technology required to make oil from cashew husks is not complicated, and bears low expenses.

There are 15 such businesses in Binh Phuoc, consuming some 100,000 tons of husks annually, according to Vinacas.

Le Bong, director of Thien An Co Ltd, said cashew-shell oil supply currently fails to meet demand, which results in a fierce competition among suppliers.

?There is also a lack of cashew husk supplies as cashew processing companies have recently cut production,? he added.

Meanwhile, Kim Nghia Co Ltd has another source of huge revenue: bagasse, or the remnants of sugar cane after the sugar is extracted; and pineapple and orange skins, which they have been exporting some 70 tons of to Japan every month.

The agricultural by-products are collected, processed, and packed before export, yielding dozens of millions of US dollars every year, the company said.

?The products have to pass strict quality and food safety standards,? the company?s director Nguyen Van Nghia shared.

?Our Japanese partners said they have to spend more than $10 billion a year to import cow feed, while we can only contribute less than 1 percent of these huge sales,? he continued.

A member of the Kieu Loan Co Ltd, which processes more than 20,000 tons of cashew husks every year, said the cashew shell oil market has huge potential, while local businesses have only exported raw products, which yield low export values.

?Chinese importers, our main market, have used the oil to make other high-value products such as paints or insulated materials,? he said.

For its part, the Vietnam Fruit Association (Vinafruits) also said local businesses can make better use of the agricultural by-products such as orange, pineapple, and blue dragon fruit skins to produce cattle feed.

?There is huge demand but we are still wasting these sources of materials,? said Vinafruits deputy chairman Huynh Quang Dau.

Dong Nai 4 Hydropower plant joins national grid

The second turbine at the Dong Nai 4 Hydropower plant started contributing power to the national grid on Sunday, said the plant?s manager Pham Van Cuc.

He said the Dong Nai 4 plant, located in the two Tay Nguyen (Central Highlands) provinces of Lam Dong and Dak Nong, was now operating two turbine groups with total capacity of 340MW.

This would contribute average annual electricity of over 1.109 billion kWh, said Cuc, who is also deputy director of the Hydropower Projects 6 management board under thof Viet Nam Electricity (EVN).

The main dam at the Dong Nai 4 Hydropower plant is 128m high and 4,176m long, while the diameter of its connecting tunnel is 8m.

Cuc said that along with the existing Dong Nai 3 hydropower plant with capacity of 180MW since 2011, the Dong Nai 4 Hydropower plant will be one of the two largest hydropower plants in the south.

Cuc said the two hydropower projects would provide water for agricultural production in the downstream region and would be a boost for socio-economic development for the two provinces.

Viet Nam to keep 3.8 million hectares of land for rice

Viet Nam will protect land from non-agricultural projects to ensure about 3.8 million hectares of land for rice by 2020, said Minister of Agriculture and Rural Development Cao Duc Phat.

The minister made the comments on a television show that saw him responding to questions from the public on Sunday.

To make farmers more passionate about the paddy field, Phat said his ministry was co-ordinating with relevant sectors and localities to disseminate laws to farmers and give them policies in cultivation such as supplying new quality and high-yield rice varieties, building large fields and supporting application of advanced machinery for production.

In case farmers are forced to move out of their paddy field, they will receive compensation for site clearance and support for vocational training and the switch to another job with a higher income.

Private sector to access ODA capital

Private enterprises would likely have access to loans from official development assistance (ODA) sources under a new plan from the Ministry of Planning and Investment, according to a report from the Lao Dong newspaper.

The ministry?s move is part of a draft decree that makes adjustments to the existing Decree No.131 that was issued in 2006 on the regulation on management and use of ODA. The ministry?s decision was done to speed up the disbursement of ODA, which has been reportedly slow because of project delays.

The new policy would also help settle companies?urgent need of capital.

According to the ministry, in recent years some projects have used only 50 per cent of ODA capital set for the year.

The main reasons for the slow disbursement were a shortage of corresponding capital, slow land clearance and complicated legal regulations.

Minister of Planning and Investment, Bui Quang Vinh, said that in 2011 the ministry worked with major partners such as the World Bank, Asian Development Bank and embassies to identify projects behind schedule.

As a result, the disbursed ODA funds this year reached US$3.6 billion, higher than the previous years? average figure of US$3 billion.

The ODA disbursement rate in other countries was higher than in Viet Nam because these countries have used the private-public partnership model, thus offering enterprises opportunities to have easy access to ODA resources, according to Vinh.

Many experts agree with the investment ministry?s reform plan but say that this change should have been done a long time ago. The country needs large amounts for development but wastes ODA capital because of sluggishness caused by weak policies and even ODA users, according to Dr Nguyen Quang A, chairman of Viet Nam-Hungary Business Association.

In the past, the Government did not have enough confidence in the private sector and was still afraid that private enterprises would use ODA for wrong purposes. Thus, it did not inject ODA into this sector, A said.

Allowing private enterprises to borrow funds from ODA resources to develop business activities would contribute to efficient use of ODA resources. Private enterprises often are more flexible and have skilful staff, according to A.

With this change, private enterprises would be able to get long-term and cheap loans, thus contributing to production and trading activities in the country.

Senior economics expert Dr. Le Dang Doanh said that, to enable private enterprises to get access to ODA loans and use them effectively, the investment ministry should publicise detailed information on ODA resources and the conditions required for enterprises that want to borrow money from ODA.

Banks to lend dong at lower dollar rates

In a move seen for the first time in the country, many commercial banks are ready to lend in dong at interest rates charged on US dollar loans.

The aim, industry insiders and observers say, is to increase credit growth at a time the banks have been asked to limit loans made in foreign currencies through many strict conditions.

Enterprises or individuals who want to borrow money from banks for their business activities can take three or six month loans in Vietnamese dong at an interest rate of at least 7 per cent per annum, which is equivalent to the current rate for foreign currency loans.

While the repayment of the principal and interest has to be made in dong, the amount is based on the dong-dollar exchange rate when the loans come due.

Because many borrowers are still afraid of exchange rate fluctuations, some banks are also offering an exchange risk insurance service that covers a maximum of 3 per cent.

Under this arrangement, the bank will incur the borrowers?additional costs if the exchange rate is up by more than 3 per cent when borrowers have to pay back their loans.

This lending measure is expected to help banks expand their credit while the borrowers enjoy an interest rate that is much lower than the rate of normal dong loans. They however have to face the risk of exchange rate fluctuations, but this can be limited by the insurance scheme offered.

An official of the central bank told Nguoi Lao Dong (The Labourer) that the scheme did not break current legal regulations because the lenders? activities, including capital disbursement and collection of principal, interest and insurance fees, were all being made in dong.

Customers complain over gas price hike

Many cooking gas (LPG) traders have increased their retail prices after the Ministry of Finance hiked import tariffs, drawing severe complaints from consumers.

Since April, world gas prices have dropped continuously. As a result, gas prices in the world market had dropped in early June by US$130 (or 15.2 per cent) over May to $722 per tonne.

The drop in world prices prompted the finance minister on June 20 to hike import tariffs on gas products from the current zero per cent to 5 per cent.

Immediately, many domestic gas retailers raised their prices by VND11,000 to about VND350,000 per 12kg cylinder.

Customers are angry about the rise in retail prices.

Trinh Van Khu of HCM City?s Tan Binh District said gas traders now were still selling gas products they had paid no tariffs on so they should not be allowed to raise prices at this time.

?Even when they have to pay the import tariff of five per cent, they would still earn profits because the drop in world prices has been greater. Furthermore, they should not be allowed to increase retail prices by as much as VND11,000,? Khu said.

In recent months, domestic gas retailers have made great profits because world prices have fallen sharply, but no corresponding cuts in retail prices were made, said District 5 resident Huynh Thanh Tuan.

Tuan said with the world prices at $722 per tonne, the domestic gas retail price should have been cut by VND32,700 per 12kg canister, but it dropped by only VND30,000.

This meant that gas retailers were already making a profit of at least VND2,700 per 12kg canister. And now, they would continue making bigger profits when they raised the price by VND11,000 per canister, he said.

According to independent market analysts, in March, gas retailers could earn about VND86,000 from a 12kg gas canister. In April and May, it was around VND50,000 and VND70,000 respectively.

This was reflected in the fact that gas traders announced significant profits in the first quarter of the year. The PetroVietnam Gas Corporation (PV Gas) posted after-tax profits of VND2.295 trillion ($110.23 million) in the first three months of the year, the analysts said.

Although the Government wants gas prices fixed by market principles, the ministries of finance and trade and industry should have proper price control mechanisms to protect consumers, they added.

Kien Giang Province to attract investment

Prime Minister Nguyen Tan Dung stressed that Kien Giang Province should take advantages of current policies, or build new ones if needed, to attract infrastructure investment, especially in irrigation systems and traffic facilities for agricultural development.

He made the statement while working with key local leaders on the provincial socio-economic situation yesterday.

PM Dung said the southern province must do its utmost to bring into play its potential in agriculture, aquaculture, forestry, tourism and find dynamic and creative ways to mobilise its sources to serve the provincial development targets for faster and more sustainable growth in the future.

Specifically, he required Kien Giang to continue to focus on promoting agriculture and aquaculture while associating with the processing industry for export.

The province was also asked to apply science and technology to improve the productivity, quality, and competitiveness of its commodities on the market. Dung said it needed to support the development of the processing industry of agricultural and aquaculture products for export.

Kien Giang was also told to promote the development of the material construction production, focusing on cement production and consumer goods.

In addition, Dung noted that the province should pay more attention to social security, health care, education and training development to meet people?s requirements and job consultancy.

Reports showed that the socio-economic situation of Kien Giang Province in the first six months of this year has seen positive signals, proven by an increase of 10.1 per cent of GDP growth.

The province has implemented the Government?s Resolution 13 to remove difficulties and promote businesses, including the exemption and reduction of some State budget revenues, with the total amount of VND198 billion (US$9.5 million).

However, the province admitted shortcomings still existed, including below target export turnover and industrial production.

Previously, PM Dung, Deputy Prime Minister Vu Van Ninh and some leaders of ministries attended the investment promotion conference in Kien Giang Province.

The conference, which introduced the province?s potential, was an opportunity for international and domestic enterprises to find opportunities for investment and co-operation in the province.

Viet Nam still world?s No 1 pepper exporter

Viet Nam exported 62,000 tonnes of pepper worth US$424 million in the first five months of the year, maintaining its top position among pepper exporters worldwide, according to the Export ? Import Department under the Ministry of Industry and Trade.

The department said the amount of exported pepper, which accounted for 40-50 per cent of the world?s pepper output, increased 14.5 per cent in volume and 47.2 per cent in value, compared to the same period last year.

For May, 15,000 tonnes of pepper were exported, with a turnover of more than $102 million.

The US, Germany and the United Arab Emirates (UAE) are the three largest import pepper markets for Vietnamese pepper. Turnover was more than $30 million each from these markets.

As of the end of April, five other markets brought more than $15 million each, including Egypt ($18.93 million), India ($21.7 million), Holland ($27.7 million), Singapore ($18.33 million) and Spain ($21.26 million).

The UAE is a market with high potential because of strong pepper demand and favourable trade conditions, with no tariff barriers or charges.

Vietnamese companies have been urged to seek long-term relationships with UAE agents and distributors to gain prestige and a foothold in the country.

Companies announce listings

Based in the central province of Nghe An, has registered to list more than 1 million shares on the Ha Noi Stock Exchange.

Vneco4 has a charter capital of VND10.28 billion (US$489,500), wholly contributed by domestic investors.

Meanwhile, Mediplantex National Pharmaceutical Co halted its initial plan to list shares on the exchange due to recent declines of the market.

Previously, it had been approved to list over 5 million shares worth VND50.24 billion ($2.3 million) from last Friday.-

Construction firm delists, merges

Quang Ninh-based construction firm Song Da 6.06 (SSS) will delist 2.5 million shares on the Ha Noi Stock Exchange on July 13 to merge with Song Da 6 (SD6), headquartered in the capital city of Ha Noi. July 12 will be its last trading day.

The merger was previously approved through a stock swap, one SSS share for 0.6 SD6 shares.

Home appliance firm to issue shares

Home appliance provider Sana WMT (ASA) will increase its charter capital from VND30 billion (US$1.4 million) to VND100 billion ($4.7 million) via issuing 7 million shares at par value.

This year, it plans to achieve a revenue of VND220 billion ($10.4 million), increasing 107 per cent compared to last year, and triple its net profit to VND3 billion ($142,800).

The company will set aside VND2.2 billion ($104,700) to pay dividends.

Tight rein held on trade deficit

The trade deficit in the first half of the year was at US$685 million, a 10 per cent rise over the same period last year, reported the General Statistics Office (GSO) on Friday.

Director of the GSO?s Trade Department Le Thi Minh Thuy said the low trade deficit was due to high steady growth in exports along with declining growth in imports.

During the first six months import value saw a year-on-year increase of 6.9 per cent to $53.812 billion, while export value surged 22.2 per cent to $53.127 billion, said Thuy.

The foreign direct investment (FDI) sector gained the highest export value at $32.65 billion, seeing an increase of 37.3 per cent compared with the same period last year. Meanwhile, the domestic sector saw a year-on-year rise of 4 per cent to $20.47 billion.

Export value for telephones and components achieved the highest export growth rate of 129 per cent for the first half, to $4.69 billion.

Other products gained high increases in export value of 30 per cent to $685 million for cashew nuts, a 24.4 per cent rise to $2.22 billion for wood and wooden products, a 12.5 per cent increase to $3.83 billion for crude oil and a 8.7 per cent rise to $6.76 billion for textiles and garments.

Meanwhile, the import value for the FDI sector increased by 26.1 per cent to $27.98 billion in the first six months as the sector continued to witness high growth in production and exports. The domestic sector saw a fall in import value of 8.2 per cent to $25.82 billion against the same period of last year.

Many products that rely on imports of materials for production saw falls in import value, by 34.1 per cent to $1.35 billion for autos, 29.9 per cent to $440 million for cotton, 13 per cent to $1.22 billion for animal feed and 10 per cent to $644 million for fertiliser.

Automobile imports halved in volume, value this year

The General Statistics Office reported that 11,900 automobiles worth US$235 million were imported in the first five months of this year, a decrease of more than half in both volume and value terms from the same period last year.

In May the numbers were sharply up from the previous month at 2,430 units and $53.7 million. South Korean vehicles were the most popular, accounting for more than 5,500 units, or almost half of all imports.

Hard times, low margins weigh on bank profits

Total net profits in the banking industry last year increased by 15.1 per cent over 2010, a rate lower than that of the preceding several years, the State Bank of Viet Nam announced on Wednesday.

Nealy half of all lending institutions saw their profits tumble in 2011, and over 10 per cent of those suffered losses.

?Generally speaking, credit institutions? profitability last year matched the scale of their assets, ownership capital and management capacities, as well as the difficult economic conditions,? the SBV wrote on its website.

The figures were released at a time when the public had begun to question why a handful of banks had continued to post significant profits during difficult economic times when production and business activity was stagnant.

The central bank attributed the profitability of some institutions to their efforts to enhance the efficiency of their use of capital. These institutions expanded services related to money transfer, electronic payment and foreign exchange, with total revenues from such services increasing 15 per cent last year over 2010.

However, the SBV admitted that the profitability of the banking system overall was driven by a few banks with large-scale assets and capital and good management. The profits of many banks, they added, were whittled away significantly by the need to establish provisional funds against risk.

The central bank said it was studying revision in regulations related to debt classification, provisional funds and risk management to assist lending institution?s to report profits more exactly.

Meanwhile, increasing bad debt levels had continued to weigh on the profits of the nation?s lending institutions, and the margins between earnings and costs as of April 30 was ?very low? and half the level of the industry at the same time last year, the State Bank said.

Two of the most important indices reflecting a bank?s financial health ? return-on-assets (ROA) and return-on-equity (ROE) ? were lower last year, the State Bank said. Industry-wide, ROA fell from 1.29 per cent in 2010 to 1.09 per cent last year, while ROE declined from 14.56 per cent in 2010 to 11.86 per cent last year.

These figures lagged behind regional averages in Southeast Asia, where the ROE of banks remained at 14-15 per cent.

Foreign engineering firms scope machinery and equipment market

Foreign mechanical engineering businesses are eyeing the Vietnamese market, on which machinery and equipment imports reach roughly 15 per cent yearly.

The country for the first time hosted French businesses studying the local mechanical engineering industry. The French Trade Office (Ubifrance), which organised the trip, said the French firms would visit leading mechanical engineering groups and companies to seek co-operative opportunities.

In another move, 10 machinery and equipment producers from Germany, the US, South Korea, Britain and Italy are displaying products at an exhibition in the capital aimed at sourcing Vietnamese customers.

The Government has so far shown priority towards growth of the mechanical engineering sector to serve industrialisation and development targets.

Last year, the country?s import value in machinery and equipment reached US$20 billion, equal to roughly 14 per cent of total import turnover. While market size remained small, a growth rate of 13 per cent revealed a positive outlook.

Chairman of the Viet Nam Association of Mechanical Engineering Nguyen Van Thu said the country planned to invest in the construction of coal-fired and hydro power plants with total capacity of 108,100MW from now to 2025. Investment will also be focused on alumina production plants, expected to churn out roughly 15 million tonnes by 2025. Thu said total capital investment for such plants was estimated at roughly $100 billion.

If including chemical, construction and other industries, total investment capital would reach about $250 billion, he added.

Moreover, Deputy Chairman of the National Assembly?s Economic Committee Nguyen Duc Kien noted that if the country implemented its $60 billion high-speed railway project, it would encourage the development of many industries, especially the metallurgical, mechanical engineering and automation industries.

However, to enter the potential market, the world?s industrial giants will have to compete against Chinese counterparts. According to a study by the Centre for Economic Policy Research, China is Viet Nam?s largest machinery and equipment supplier, accounting for up to 30 per cent of the country?s total import turnover. But the chance for the world?s industrial giants to gain a market share in Viet Nam remains open as most Chinese products are low-tech.

Ubifrance said French companies expected to enter Viet Nam?s mechanical engineering market as the country would surely enhance quality and productivity through the import of modern machinery and equipment from the world?s major industrial countries in order to meet its target of becoming an industrial nation by 2020.

Fertiliser shortage ratchets prices

Despite a global decreasing prices, the domestic fertiliser market is heating up due to a shortage in supply sources, according to industry insiders.

Accordingly, a 50-kg bag of urea fertiliser in southern provinces currently stands at VND570,000-575,000 (US$27.14-27.38), up roughly VND70,000-80,000 against early this year. In several northern and central provinces, the price is even higher, reaching VND590,000-600,000 per bag. The rise is estimated to increase by nearly 40 per cent compared with the same period last year.

This is in direct contrast to a price decline in the global market where a tonne of fertiliser is at US$460-465, down $40-100 against May. With the import price, in addition to transport and other costs, it is estimated that a 50kg-bag of fertiliser should be sold at roughly VND500,000.

Cao Hoai Duong, general director of the PetroVietnam Chemicals Co, attributed the local price skyrocketing to the shortage of fertiliser supply in the domestic market due to an inaccurate forecast.

Earlier this year, fertiliser industry experts anticipated that the country would not have to import urea fertiliser in 2012 in the wake of the operation of two new plants of Ca Mau and Ninh Binh due in the first quarter. As a result, domestic businesses did not import urea fertiliser this year. Unfortunately, the plants could not be put into operation as scheduled due to technical problems.

According to statistics from the General Department of Customs, the country imported only roughly 110,000 tonnes of fertiliser in the first five months of the year compared with 1.3 million tonnes of the same period last year.

Currently, domestic importers do not want to import fertiliser either, as they are afraid of suffering a high inventory again as last year. In the last quarter of last year, domestic businesses imported a large amount of fertiliser as it was forecast the product?s demand in the domestic market would surge sharply. However, they were then burdened with a high inventory as demand was lower than anticipated.

To solve the fertiliser shortage in the domestic market, PetroVietnam Chemicals Co, which supplies roughly 40 per cent of the country?s total fertiliser demand, said it would run all of its capacity to meet local demand. The company this month will produce roughly 130,000 tonnes of urea fertiliser. It is also organising programmes to sell fertiliser directly to farmers to avoid unreasonable price hikes.

The industry insider expected the fertiliser market to stabilise in the third quarter when Ninh Binh and Ca Mau fertiliser plants officially come into operation after several months under trial. The two plants will supply the domestic market with a total 1.36 million tonnes of urea fertiliser yearly.

State Bank tips tighter control on FDI loans

The State Bank of Viet Nam has asked organisations to apply stricter control over the management of foreign-direct investment (FDI) loans, according to reports in Nguoi Lao Dong (The Labourer) newspaper.

Many FDI businesses that have borrowed capital from credit organisations are operating inefficiently, with some investors fleeing the country, badly affecting credit organisations and the investment environment.

Credit organisations have been asked to report to the SBV regularly about the status of their loans of FDI enterprises.

By the end of last year, the number of loans borrowed by FDI enterprises at domestic banks had increased sharply.

However, in nothern Hoa Binh Province, of the 22 FDI businesses located there, only one has borrowed from foreign credit organisations.

And in central Binh Dinh Province, FDI companies have not invested in the province?s Nhon Hoi economic zone and industrial parks, even though they had borrowed capital from domestic credit organisations.

In the central provinces of Quang Tri and Quang Ngai, the departments of Planning and Investment said many companies that were operating ineffectively had taken out loans only at domestic credit organisations.

In southern Dong Nai Province, about 10 FDI businesses have outstanding credit. Seven of those companies received loans from domestic banks and three from their parent companies.

Credit organisations said supervision of the use of loans by FDI companies was difficult because the businesses said they had borrowed capital to purchase imported raw materials.

Habubank merger enters second stage

The merger of Habubank (HBB) and Sai Gon-Ha Noi Bank (SHB) is reaching the second stage of a three-stage process. The deal, if carried out successfully, will become the first voluntary bank merger to take place this year.

In a decision last week, the State Bank of Viet Nam approved the merger in principle, and SHB is preparing to ask the State Securities Commission to approve an issue of additional shares.

?These are not bonus shares or treasury stocks, so there will be no changes in reference price or dilution,? said SHB chairman Do Quang Hien.

The Ha Noi Stock Exchange had no plan to adjust the reference price of SHB shares, although the bank had not yet released its issuing plan, an exchange official told the publication Dau tu Chung khoan (Securities Investment) on condition of anonymity.

It was possible, he said, that the exchange would widen the trading margin for the stock so that investors could decide the price.

Under the plan being discussed, HBB shareholders will be able to exchange one HBB share for three quarters of a new SHB share. If SHB shares retain their current trading price of VND9,200 per share, that would result in HBB being traded at around 20 per cent below converted value. The expected result is that, after the merger, SHB shares would decline in value.

HBB shareholders will retain about 75 per cent of equity in the bank, worth around VND4 trillion (US$190.4 million), while the remaining 25 per cent will be bought up by SHB.

Exports to Spain increase sharply in recent years

Two-way trade between Viet Nam and Spain has increased rapidly in recent years, according to the Import Export Department under the Ministry of Industry and Trade.

The country earned US$1.1 billion from exports to Spain in 2010 and $1.55 billion in 2011, up 39.96 per cent.

According to the department, in the first two months of 2012 alone, the export turnover to Spain hit $275.98 million, a year-on-year increase of 34.43 per cent. As a huge market, Spain needs large quantities of garments and textiles, footwear, household commodities and seafood, which is a big advantage for Vietnamese businesses.

VietJetAir offers promotion for limited time

VietJetAir is launching a special promotion only available for a three-hour period every night next week. As many as 5,000 tickets for just VND299,000 (US$14) will be up for grabs with the tension at EURO 200 reaching fever pitch.

The sale lasts from 9pm till midnight from June 25 to July 1 ? perfect for football fans waiting up for a big match next week or anyone who is hoping to travel to one of Viet Nam?s leading destinations with VietJetAir. These heavily discounted tickets will be available for some domestic routes including HCM City- Ha Noi; HCM City-Da Nang; Ha Noi-Da Nang (for flights between August 15 and November 15); and the soon-to-be launched HCM City ? Hai Phong (for flights between October 1 and November 15).

Petrol import tariffs rise from 7 to 10 per cent

The Ministry of Finance (MoF) yesterday decided to hike import tariffs on petrol products from the current 7 per cent to 10 per cent.

A new circular issued by MoF yesterday also stipulated that import taxes on diesel fuel for cars will increase from 6 per cent to 8 per cent and other fuel will rise to 10 per cent. This is the fourth time the ministry has revised the petrol import tax since the beginning of this year. Earlier on June 8, import taxes levied on various kinds of gasoline were raised by 3 per cent.

HCMC: 1,500 businesses stop social insurance payments

A high percentage of employees and businesses withdrew from social insurance participation in the first five months of this year, said the director of HCMC Social Insurance Company, Cao Van Sang.

The number of businesses dissolved or temporarily ceasing to pay social insurance had reached to nearly 1,500 over the last five months, Sang added.

As a matter of fact, 300,000 employees became jobless. The shift in production and business activities has been abrupt and challenging. The violation of social insurance laws has been rampant, Sang said.

So far this year, the HCMC Social Insurance Company received unemployment benefits applications from 45,000 labourers, an increase of 100% over the same period last year. The company has paid unemployment benefits worth of VND 178 billion (nearly US$8.5 million) for 28,000 employees.

The company has so far sued 97 companies for their total debt of VND 40.2 billion (US$ 2million) and reclaimed VND11 billion US$ 500,000).

Low prices may lead to a shortage of pork

Without timely measures, there will be a shortage of pork on the domestic market this year, warns the Ministry of Agriculture and Rural Development.

With blue ear disease continuing to affect swine herds nationwide, as well as economic difficulties, many consumers are turning their backs on pork, causing a progressive price reduction in the market.

As a result, more farmers have stopped breeding pigs in their localities, said Nguyen Thanh Son, deputy director of the Livestock Farming Department.

According to the northern Bac Giang Province?s agriculture and rural development department, unprocessed pork costs between VND32,000 ? 33,000 (or US$1.5) per kg. Despite this cheap price, it is still hard to find buyers, said a local agriculture official, adding that thousands of farmers worried about their futures, while many were starting to leave their pig cages empty.

Deputy director Son said though avian influenza and foot and mouth disease were temporary controlled, the persistent blue ear disease since this February had been affecting consumers and directly harming the industry.

According to the Epidemiological Department, until last week, the disease was reported in the provinces of Dien Bien, Bac Ninh, Quang Ninh, Lai Chau, Hoa Binh, Lang Son, Bac Lieu and Dong Nai.

The department calculated there were over 33,000 pigs infected with the disease including 21,000 pigs destroyed in the first six months. Compared with the same term last year, it?s an increase of 2.5 times.

Son said without close monitoring, blue ear disease would spread to 13 provinces throughout the Cuu Long (Mekong) River Delta.

Besides, chicken breeding also met a lot of difficulties.

Nguyen Van Sau, a chicken breeder living in Ha Noi?s Ba Vi District, said at present the wholesale chicken price was VND24,000 ($1.14) per kilo whereas the expenses for breeding them was VND32,000 ($1.52) per kilo. The result is that he suffers a loss of VND8,000 ($0.4) per kilo.

?In the past ten years I have never suffered such a great loss,? said Sau.

MARD deputy minister Diep Kinh Tan said ?if this problem is not handled well, in the next four months, we shall lack the meat that is now in excess.?

As the disease shows no sign of stopping, and is even spreading to the south, stamping it out is the priority of the agriculture sector, said Hoang Van Nam, director of the Animal Health department.

Nam said the disease has spread as transportation from infected areas has not been strictly controlled. Thus, Nam?s department would work with the inspectors to boost the inspection of not only transportation, but also of the slaughter houses.

MARD?s deputy Tan said his ministry was preparing to hold an online conference with key breeding areas later this month for a clearer review of the problem and determining a good solution.

Son said his department, under the assignment of MARD, was planning a solution to help the industry. The scheme could include an aid of VND9 trillion ($428million) in support given to farmers as very low interest rate loans.

However, Son said the plan was only on paper as of now and nothing yet done to support the farmers.

MARD?s deputy minister Vu Van Tam said the ministry was also working with other ministries and banks to determine proper measures for the coming time.

?However, we should be careful when making policies for breeders and enterprises so as to not violate international regulations and the Government?s macroscopic policies,? he said.

The key measure is helping breeders approach the capital, said Tam.

Traditionally, pork is a kind of food that cannot be missed during the year end festivals when the price often rises to troubling heights for consumers.

Disease strikes Delta longan crop

Witches? broom disease is sweeping through more than 60 per cent of the longan-growing area in the Cuu Long (Mekong) Delta, leaving many farmers with severe losses, according to the Plant Protection Department.

Can Tho City and Soc Trang, Tien Giang, Tra Vinh, Vinh Long, Dong Thap, and Hau Giang provinces have all announced epidemics, with 24,000 ha out of their 39,000ha under the fruit being affected.

?Witches? broom, which causes an abnormal brush-like cluster of shoots arising from or near the same point on branches, affecting fruiting, is caused by a bacteria,? said Dr Nguyen Van Hoa of the Southern Fruit Research Institute.

The vector of the bacteria is nhen long nhung (Eriophyes dimocarpi), an insect that is 0.12-0.17mm long and cannot be seen with the bare eye, Hoa said.

The disease appeared in Viet Nam in 2003 from infected longan strains imported from neighbouring countries, according to experts.

There are no effective measures to prevent or control the disease.

Nguyen Minh Hai of Tien Giang Province?s Chau Thanh District said 85 per cent of the 130 longan trees in his 0.4ha orchard were affected.

?I have to cut down all the infected trees and spray disinfectants to prevent the disease from spreading,? the farmer, whose trees are more than 10 years old, said.

Nguyen Van Liem, deputy director of the Vinh Long Province Department of Agriculture and Rural Development, said since the disease outbreak occurred, his department has been actively taking measures across the province to contain it.

Vinh Long is the worst affected in the delta with 9,020ha out of its 9,840ha affected by 30-100 per cent, according to its Department of Agriculture and Rural Development.

?The department has also studied growing other fruits such as green-peel grapefruit, king orange, and Nam Roi grapefruit in severely affected areas,? Liem said.

It has also organised training courses for 2,010 farmers on measures to control witches? broom this year.

The measures include trimming branches after harvest to remove infected parts, providing adequate water and proper fertilisers for longan trees, and not planting infected saplings.

The Tra Vinh Province People?s Committee has earmarked VND12 billion (US$570,000) to help control the disease.

The money will be used to survey infected areas, organise disease-prevention courses for affected farmers, and give them financial support.

Cau Ke District accounts for well over half of the province?s 3,000ha of longan. In its Hoa Tan, An Phu Tan, Ninh Thoi, and Tam Ngai communes, all 1,700ha have been affected by witches? broom, reducing fruit output by more than 60 per cent.

Many farmers have suffered losses and are in debt, according to agriculture departments in the region.

In April the Government decided to provide farmers assistance worth VND7 million per ha if more than 70 per cent of their longan orchards are affected by the disease and VND5 million if it is 30-70 per cent.

The subsidy is meant to enable farmers cut down diseased trees and buy chemicals to kill nhen long nhung.

Dragon Capital nominated as sustainable investor candidate

Fund manager Dragon Capital has been honored as a nominee for the FT/IFC Sustainable Finance Awards 2012 in the ?Sustainable Investor of the Year? category for the second straight year given its commitment towards sustainable development.

The 2012 FT/IFC Sustainable Finance Awards are launched by the Financial Times and International Finance Corporation (IFC), a member of the World Bank Group. It aims to honor banks and other financial institutions that demonstrate leadership and innovation in integrating environmental, social and corporate governance considerations into their business.

IFC executive vice president and CEO Lars Thunell said in a statement released on Wednesday that these awards recognize the key role that sustainable financial organizations can play in creating jobs, fighting climate change and improving access to finance. In their seventh year, the 2012 awards attracted 161 entries from 145 financial institutions and 36 non-financial groups in 67 countries.

Established in 1994, Dragon Capital is one of the most active fund managers in Vietnam.

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