Industrial sector urged to surpass year's target

HCM CITY — The industrial production sector should strengthen production, investment and exports in the remaining months of the year to surpass the annual target set by the Government, says Vu Huy Hoang, Minister of Industry and Trade.

Speaking at an online – meeting to review the sector's performance in the first nine months and set tasks for the last three, Hoang said industrial production for the whole year is expected to increase by 14 per cent, higher than the Government's 12 per cent target.

Industrial production in the first nine months of the year surged 13.8 per cent year-on-year, reaching roughly VND574.5 trillion (US$30.24 billion), he said.

In September alone, industrial production was valued at VND70.7 trillion ($3.7 billion), up 15.1 per cent over the same period last year.

The fourth quarter is the most important stage since high growth in this stage will create the proper momentum for the sector to enter a new year, he said.

Although the sector has achieved strong growth in the past several months, industrial production has not created export products of high added value, mostly focusing on outsourcing products.

The sector's development efficiency therefore remains low while supporting industries have not developed, delegates at the meeting said.

In addition, power shortages and high interest rates have caused and will continue to cause difficulties for businesses, they added.

Hoang asked the Electricity of Viet Nam Group to co-operate with the Viet Nam National Petroleum Group (PVN) and Viet Nam Coal and Minerals Industries Corporation to step up efforts to meet power consumption demand.

PVN, for instance, should shorten the time taken for gas pipeline maintenance at its power plants in Ca Mau Province, he said.

"The power sector must ensure sufficient power supply for industrial production in any situation," Hoang stressed.

Regarding high bank loan interest rates and exchange rates, Hoang said the recent appreciation of the US dollar against the dong has benefited exporters, but caused difficulties for import companies.

He ordered relevant agencies to work with the State Bank of Viet Nam (SBV) to ensure sufficient supply of dollars for enterprises who need to import materials for their production.

He also suggested that the SBV reduces interest rates to support enterprises in developing their production and trading activities.

To ensure the sector's sustainable development, it needs to improve labour productivity, promote development of auxiliary industries and improve investment efficiency, said Le Van Duoc, director of the Planning Department under the Ministry of Industry and Trade.

Developing auxiliary industries would help businesses become more active in production and gradually reduce reliance on imports, he said.

Delegates at the meeting petitioned the Ministry of Industry and Trade to enhance the programme that brings Vietnamese goods to rural areas and set up distribution agents in these areas so that domestic products can gain a strong foothold in the rural market. — VNS

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EVN pledges sufficient power supply in Q4

HCMC – The Electricity of Vietnam Group (EVN) pledged on Monday that the State utility would try its best to meet the country’s total power demand at some 25 billion kilowatt hours in the fourth quarter of this year.

The group’s deputy general director Dang Hoang An told an online meeting organized by the Ministry of Industry and Trade that EVN would mobilize more energy sources to minimize power outages.

EVN has had to purchase a maximum volume of power from other sources including 67.8 billion kilowatt hours from China to lessen impacts of the power supply crunch in the January-September period, An told the meeting to review industrial production in the first three quarters. He explained that power supply was strain lately due to droughts, causing the water flow to reservoirs to dwindle.

According to a report issued on Monday by the Ministry of Industry and Trade, in the last quarter of the year, some power plants are expected to start commissioning such as the first power turbine of Son La Hydropower Plant, and the first turbines of Song Tranh 2 Hydropower Plant and Dong Nai 3 Hydropower Plant.

The forthcoming operation of such hydropower plants will help ease the power shortage in the country.

However, An noted that the power outages could still occur for around ten days this month as PetroVietnam has just announced a scheme to maintain the gas pipelines of Ca Mau Gas Power Complex over ten days.  

Furthermore, An of EVN also told the ministerial meeting that the most worrying problem for EVN is to cope with the water storage in the coming months, particularly during the dry season in the first half of next year.

“EVN will work with the Ministry of Agriculture and Rural Development in the coming days to seek measures for this matter,” An said, referring to the conflict of storing water for power generation and pumping water for farming.

Speaking at the meeting, Minister of Industry and Trade Vu Huy Hoang asked PetroVietnam to work with its Malaysian partner to speed up the gas pipeline maintenance and for the time being use oil to fuel the Ca Mau power plant so that it can run at full capacity in the pipeline maintenance process.

Related to industrial production of the country, the ministry in its report expected a growth rate of 14% as targeted for the manufacturing sector this year, after attaining an industrial production value of VND574 trillion in the year to date, a year-on-year increase of 13.8%.

The ministry also predicted that for the whole year 2010, the country will also obtain total export revenue of US$69 billion, an increase of 21%, while import expenditure is estimated at US$82 billion, up 17% year-on-year.

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Industrial production surges past annual target

HA NOI — Industrial production in the first nine months of the year surged 13.8 per cent year-on-year, higher than the Government's 12 per cent annual target, to reach roughly VND574.5 trillion (US$30.24 billion), according to the General Statistics Office.

In September alone, industrial production valued VND70.7 trillion ($3.7 billion), up 15.1 per cent over the same period last year.

With a growth rate of 17.4 per cent in the January-September period, foreign invested enterprises topped the list, creating value of VND241.8 trillion ($12.7 billion). Private businesses followed with a surge of 12.7 per cent to VND201.1 trillion ($10.59 billion). State-owned firms faired the worst, churning out an output of only VND131.5 trillion ($6.9 billion).

The GSO reported that the processing industry accounted for nearly 90 per cent of the country's total industrial production value in the first nine months, noting that the industry's 14.7 per cent growth rate contributed significantly to the country's growth rate of 13.8 per cent in January-September.

The significant growth of the processing industry was, according to the GSO, due to the world's economy recovery, which had helped industrial producers, especially foreign invested firms, to enlarge their production in the wake of rising consumer demand.

Sport shoe production saw a robust surge of 25.2 per cent year-on-year, churning out 146.3 million pairs. Glass production also rose 22.8 per cent to 69.2 million sq.m. Cement, fridges, vans and motorbikes also reported significant increases between 16.4 per cent and 21.1 per cent.

However, the mining industry in the first nine months of the year reported a modest 3.8-per-cent growth over the same period last year, with coal only rising 1.4 per cent to 32.4 million tonnes. Crude oil exploitation even reported a 13.8-per-cent decrease to only 11.1 million tonnes in the first nine months.

Deputy director of the Ministry of Industry and Trade's Planning Department Nguyen Thanh Hoa said the industrial production's growth had surged and remained stable at more than 13 per cent since April.

Besides the global recovery, Hoa also attributed the positive results to the effective implementation of Government policies including the encouragement to use Vietnamese products and the measures to limit the trade deficit.

With the increasing rate, Hoa forecast that the country's industrial production would rise roughly 14 per cent this year. — VNS

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Latest technology, market info top priority for firms

by Mi Bong

HCM CITY — The ability to access market information and advanced technology were the two major factors affecting the business community in the second quarter of the year, according to Viet Nam Business Insight Survey.

At a seminar held yesterday in HCM City by the Viet Nam Chamber of Commerce and Industry, Pham Thi Thu Hang, head of the Business Development Institute, said the survey had received 374 responses from domestic enterprises.

Government investment in information and technology had helped further the use of advanced technology, they said.

Domestic and foreign market demand ranked second and third, respectively.

Some other influences included production costs, loan access, skilled human resources, infrastructure conditions such as water, electricity and wastewater treatment systems, transport infrastructure, land issues and site clearance.

The survey discovered that 65 per cent of businesses must borrow a short-term loan with an annual interest rate of 12-13 per cent and upwards.

Most of them said the interest rate was too high and would affect their investment plans.

The businesses said the interest rate should be adjusted to below 12 per cent to create favourable conditions to their production and business.

They expected there would be positive changes related to macroeconomic policies, loan access conditions and infrastructure improvement.

Vo Tan Thanh, director of the VCCI's HCM City branch, said the Viet Nam Business Insight Survey aimed to investigate and collect concerns and feedback from the business community through online fora.

It targets documenting the state of economy, industry and business environment in a timely and accurate manner.

The VBiS will also provide the Government as well as firms and executives with a precise and comprehensive insight into Vietnamese enterprise development and feedback on policy.

It was launched by the VCCI, the Asia Competitiveness Institute and the General Statistics Office under the sponsorship of the Asia Foundation.

At the seminar, Vu Van De, head of HCM City Statistics Department's Statistics-Industry Sub-Department, said industrial production growth in the first eight months of this year had increased 8.8 per cent over the same period last year.

The water and electricity distribution as well as production industry had the highest growth rate, 15.4 per cent, in the period.

The manufacturing and processing industry accounts for the highest, 60.1 per cent of total industrial production value, an increase of 11.6 per cent.

Challenges

Although industrial production has overcome the financial crisis period and seen a growth, it has faced challenges.

By early August, because of a drop in exports, the warehousing of manufacturing and processing products was fairly high, with an increase of 137.5 per cent over the same period last year, while consumption reached 112 per cent.

Power shortages in the first and second quarters affected the economy greatly.

Technical and trade barriers have made exports slow and unstable, causing a back-up of stored goods in the manufacturing and processing industry, according to the report. — VNS

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