Plastic exports set to hit $1 bln

Vietnam’s 2010 plastic exports are expected to reach US$1 billion for the first time ever, following a dramatic increase in shipments from the previous year.

The country has shipped more than $554 million worth of plastic products a month so far this year, according to a report published by the Vietnam Economic Times Monday. In July alone, exports were reported to total $86.4 million, up 24.2 percent from the same month last year.

Vietnamese plastic products are now available in nearly 70 countries. Some of the largest markets are the US, Japan, Cambodia, Germany and the UK.

Plastic is one of the fastest growing industries in Vietnam and local products have great potential to secure their presence in the global market, the Ministry of Trade and Industry said.

According to the Vietnam Plastics Association, the biggest challenge for the sector now is its dependence on imported materials. The country has to import 1.6-1.7 million tons of plastic materials every year as domestic supplies add up to around 300,000 tons.

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Plastic exports set to hit $1 bln

Vietnam’s 2010 plastic exports are expected to reach US$1 billion for the first time ever, following a dramatic increase in shipments from the previous year.

The country has shipped more than $554 million worth of plastic products a month so far this year, according to a report published by the Vietnam Economic Times Monday. In July alone, exports were reported to total $86.4 million, up 24.2 percent from the same month last year.

Vietnamese plastic products are now available in nearly 70 countries. Some of the largest markets are the US, Japan, Cambodia, Germany and the UK.

Plastic is one of the fastest growing industries in Vietnam and local products have great potential to secure their presence in the global market, the Ministry of Trade and Industry said.

According to the Vietnam Plastics Association, the biggest challenge for the sector now is its dependence on imported materials. The country has to import 1.6-1.7 million tons of plastic materials every year as domestic supplies add up to around 300,000 tons.

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Banks to face stricter rule on real estate loans

HCMC – Banks have already refrained from making property loans due to difficulties in raising middle and long-term funds and their customers will find it even harder to gain access to real estate loans when a new central bank rule takes effect in early October.

Circular 13/2010/TT-NHNN issued by the State Bank of Vietnam requires the risk reserve ratio for real estate and stock loans to rise to 250% of the loans from the current 100%. This means a higher proportion of risk reserve for property loans will affect the capital adequacy ratio (CAR) of banks, at 9% or higher.

Those banks acting as retail ones are in the position of boosting real estate loans given strong demand. To meet the CAR requirement, lenders will have no choice but to either reduce real estate and stock loans, or increase their capital.

The general director of a joint-stock bank said that if giving out a property loan of VND40, the total amount must be set at VND100 to keep the CAR unchanged. Meanwhile, he added, for other sectors where a risk reserve ratio below 250% applies, banks can lend more than VND40 given the same amount of VND100.

Making loans for customers in sectors where the possibility of loan defaults is high will affect profits, so lender banks must consider limiting real estate and stock loans, and boosting credit for clients in the manufacturing and trading sectors, he noted.

That explains why in recent weeks, banks have launched incentives to corporate enterprises. For example, An Binh Commercial Bank last week opened a center for supporting small and medium enterprises, Asia Commercial Bank has doubled the credit line for import and export firms to US$100 million, and Vietnam International Bank gives a credit line of VND1.5 trillion for wood processors.

The head of the individual customers division of a joint-stock bank said banks would restrict real estate loans. “The new regulation will lead banks’ capital cost to increase, so interest rates for real estate loans should be hiked,” he added.

The Vietnam Banks Association acting on behalf of 14 institutions has written to the central bank asking for a reconsideration of unreasonable points in Circular 13, including the higher risk requirement for real estate and stock loans. The association has even suggested postponing this circular.

The Prime Minister last week asked the central bank to reconsider the circular following the Vietnam Banks Association’s proposal. The central bank has told banks to clarify the difficulties they might face when adhering to the new circular. Reports must be sent to the central bank by late this month.

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USDA forecasts strong corn import from Vietnam

HCMC – The U.S. Department of Agriculture (USDA) has forecast Vietnam will import 1.6 million tons of corn this year, up by 28% from last year, said the Vietnamese Market Analysis and Forecast Joint Stock Company.

Pham Duc Binh, deputy chairman of the Vietnam Animal Feed Association, however, said the nation would import around 1.25 million tons, equivalent to last year’s figure.

Regarding the USDA’s forecast, Binh said the department had gauged corn demand this year based on Vietnam’s growth rate and pork demand. “Pig farming in the country is in trouble due to blue-ear disease which has led consumers to shift to alternative foods like chicken and seafood,” Binh said.

The world corn price formerly stood at around US$230 per ton but then increased to US$260 after Russia decided to ban wheat export. The price along with 5% import tariff from outside the ASEAN region disenables imports to compete with local products, Binh added.

According to the association, world corn and wheat prices are fluctuating strongly. As a result, animal feed factories in Vietnam use materials in stock before deciding what materials they have to import.

Wheat and corn demand in the country is expected to surge sharply in the future to serve animal feed production as a large amount of cassava will be used for growing ethanol production.

Vietnam is the fifth largest corn importer in Asia after Japan, South Korea, Taiwan and Malaysia.

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Gov’t orders check on Guang Lian steel project

HCMC – Deputy Prime Minister Hoang Trung Hai has told the Ministry of Industry and Trade to check the ability of mobilizing investment capital for Guang Lian Dung Quat steel project.

The order comes after the project developer proposed expanding the designed production capacity from five million to seven million tons a year.

According to a document issued by the Government Office, Hai also required the industry and trade ministry to check the product lines of this large project and report the results to the Government within this month.

An official of the Vietnam Steel Association (VSA) told the Daily on Monday that it was necessary to carefully scrutinize whether the project developer could raise as sufficient capital as needed to ensure the viability of the long-delayed project.

The project has been underway for over four years but has turned out no steel products.  

Guang Lian Steel Vietnam Limited Company as developer of the project in the central province of Quang Ngai has asked the Government and relevant ministries to allow it to raise the production capacity.

The output adjustment will send the total cost of the project in Dung Quat Economic Zone rising to US$5 billion from the previous US$3.5 billion, the official of VSA said. “The project has changed hands four times so far.”

The steel association official said the proposal for scaling up the capacity of the project could be seen as a time-buying tactic as the investor had difficulty mobilizing enough capital for the project.

The official, who declined to be named, said the association also petitioned the Government to ask Quang Ngai Province to set a deadline for the developer to finish the whole project; otherwise, the investment license would be revoked.

The official described the proposal of Guang Lian Steel Vietnam Limited Company as irrational. The investor wanted to increase steel production by two million tons a year, but they suggested boosting their annual processing capacity by only 500,000 tons of cast iron as the main material.

Dung Quat Economic Zone Authority says on its website that while waiting for approval for expanding the production capacity at the steel mill, piling work is still taking place so that factory construction can start early next year.

The authority said Guang Lian steel project was licensed in 2006 and that the groundbreaking ceremony took place a year later.

According to the newly-proposed plan of Guang Lian Steel Vietnam, construction of the first phase is scheduled to finish in late 2013 and the steel mill would be up and running after that.

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Vietnam’s tra fish export to Egypt still down

HCMC – Tra fish, the biggest contributor of Vietnam’s seafood export to Egypt over the last three years, has seen a steady fall in shipments there since last year due to a groundless rumor about contamination.

Dang Ngoc Quang, Vietnam’s trade counselor in Egypt, told a conference in HCMC last week on ways to export to Africa, that the dip in Vietnam’s tra export to Egypt had shown no signs of abating since early 2009 after Al Ahram, an Egyptian newspaper, carried an inaccurate report on contamination at Vietnamese fish farms.

The news report then resulted in a suspension of licensing Vietnamese tra export to Egypt. The rumor later was rejected by the Egyptian Ministry of Agriculture and Land Reclamation, and the issuance of licenses was then reinstated by the Egyptian embassy in Vietnam.    

The impact of the rumor, however, is still lingering and causing Egyptian consumers to shun the Vietnamese product, leading to a sharp decline in Vietnamese tra export to Egypt which consumes millions of tons of seafood per year.  

Tra accounts for 87% of Vietnam’s US$63 million seafood exports to Egypt in 2008 and 73% of US$59 million in 2009. However, tra imports from Vietnam are on the decrease, with the proportion of the fish in the US$25 million seafood export there in the first six months of the year dropping to 65%.

Quang said some Egyptian businesses recommended a publicity campaign to dispel worries about the safety of Vietnam’s tra fish. Besides, Vietnamese exporters should boost the export of well trimmed tra fish, a high quality product, to the Egyptian market, instead of low-priced products.  

Despite the fall in tra fish exports, shipments of other seafoods to the market are improving, including shrimp, tuna, sailfish, cuttlefish, crab and oyster. Statistics provided by Quang show shrimp accounted for only 11% of the country’s US$63 million seafood exports to Egypt in 2008, but the figure rose to 31% in the first half of 2010.    

Seafood is considered Vietnam’s leading export to Egypt, accounting for one third of total exports to this African market.

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Local tour operators honored in Thailand

HCMC – The Tourism Authority of Thailand’s HCMC Office has announced five Vietnam travel agencies that have won The Friends of Thailand awards.

The five are Saigontourist Travel Service, Vietravel Marketing and Tourist Company, Tan Dinh Trade and Travel Service Company (known as Fiditourist), Ben Thanh Tourist, and TST Tourist.

The Thai tourism authority has also presented a personal award to Duong Thi Thu Thuy, reporter of Travel & Entertainment magazine, and an international press award to Doanh Nhan Sai Gon newspaper.

The Friends of Thailand awards are designed to honor individuals, organizations and tourism companies in recognition of their contributions to the tourism development of the “Land of Smile”. The international press award is for articles that introduce and promote images, country, people and new tourist destinations in Thailand.

The Friends of Thailand was launched by Tourism Authority of Thailand in 1996 and every two years, the awards are presented to contributors to Thai tourism. The 2010 award ceremony will be held in Bangkok in late September.

Vietravel, one of the five award winners, says that over the past ten years, the number of tourists traveling to Thailand under its arrangement has leapt over 20 times. Its average tourism growth for the Thailand sector is 25-35%.

In the first six months of the year, the number of people booking Thailand tours at Vietravel was nearly 15,000, and the tour operator expects to arrange tours to Thailand for a total of 25,000 tourists, up 20% from last year.

Every year, Thailand welcomes around 14 million international tourists, including 30,000 from Vietnam, according to the Tourism Authority of Thailand.

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