Thursday, January 13, 2011

Coffee exports soar with spike in global demand

Workers dry coffee before processing. Rising global demand has pushed revenue from Vietnamese coffee exports to its highest level in two years. — VNA/VNS Hong Ky

Workers dry coffee before processing. Rising global demand has pushed revenue from Vietnamese coffee exports to its highest level in two years. — VNA/VNS Hong Ky

HA NOI — Rising global demand has pushed the price fetched by Vietnamese coffee exporters to its highest level in two recent years, according to the Viet Nam Coffee and Cocoa Association.

The price of coffee exported from Central Highland provinces stood at about VND30.2 million (US$1,550) per tonne, the association announced on Monday.

Coffee exports in September totalled $100 million, on a volume of 700,000 tonnes.

Export value in the first nine months of the year reached $1.32 million, an increase of just 0.9 per cent over the same period a year ago, while volume only climbed to 925 million tonnes, an increase of 4.2 per cent.

These results exploded expert predictions at the beginning of the year that total coffee exports in 2010 would struggle to reach VND1 billion ($50,000) due to low global prices.

Germany has become the leading importer of Vietnamese coffee, buying up 13.5 per cent of total Vietnamese coffee exports. The US, the Philippines and Russia are also leading markets.

Coffee growers, meanwhile, hope to harvest over a million tonnes of coffee before the end of the year, a yield 2.5 per cent higher than last year's. Global yield so far in 2009-10 has totalled only 1.26 million tonnes, contributing to the spike in prices, with global exporters shipping only 78.5 million tonnes between October 2009 and July of this year.

An expert from the Viet Nam Coffee and Cocoa Association, Doan Trieu Nhan, expected prices to remain stable through the end of the year at around $1,700-1,800 per tonne. — VNS

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Wednesday, January 12, 2011

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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UK port operators seek opportunities

HA NOI — Situated at the crossroads of maritime trade lanes with a coastline stretching 3,260 kilometres, Viet Nam has undeniably favourable conditions for developing its maritime industry.

British Ambassador Mark Kent emphasised this opportunity during the UK – Viet Nam Partnership in Ports seminar held yesterday in Ha Noi. The event was part of a three-day trip made by representatives from 10 UK's leading companies in port operation and development.

"British companies such as those involved in this mission are keen to forge partnerships that will help to identify and implement solutions aimed at improving the operating capacity of Vietnamese ports in the process of national industrialisation and modernisation," the ambassador said. Marine transport has played an important role in the country's economic growth and in its efforts to become an industrialised country by 2010, said Deputy Minister of Transport Do Hong Truong.

The Government has crafted policies to encourage domestic and foreign individuals and organisations to invest in Viet Nam's seaport infrastructure, he said.

During the event, the UK seaport operators shared experiences in port operation as well as exchanged knowledge and potential co-operation opportunities with around 60 Vietnamese and foreign companies operating in the port field.

Prime Minister Nguyen Tan Dung has approved the Viet Nam Seaport Development Master Plan, which calls for a total investment of between VND360 trillion (US$18.5 billion) and VND440 trillion ($22.5 billion) by 2020. Under the plan, the estimated volume of goods transported annually via the seaport system will be 500-600 million tonnes by 2015, 900-1,000 million tonnes by 2020 and 2,100 million tonnes by 2030.

To achieve that number, the plan will focus on developing several international-standard deep-water ports that can receive large ships, especially the international Van Phong transit port in central Khanh Hoa Province designed to receive container ships ranging between 9,000 and 15,000 TEU (twenty-foot equivalent unit). — VNS

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Ha Noi commercial property booms

HA NOI — The Ha Noi real estate market saw optimistic development in the third quarter and the growth trend is expected to continue to the end of this year, Savills Viet Nam real estate agent reported yesterday.

"Good economic recovery in the third quarter helped the office and retail sectors in the property market," said Pham Thanh Son, Savills Viet Nam economics expert.

Ha Noi's office occupancy rate average increased to 91 per cent, a 4 per cent jump, in the second quarter, according to Savills associate director and head of research and consultancy Tran Nhu Trung.

The average occupancy rate in the city's shopping centres remained high at 94 per cent and many new shopping centres opened in this quarter.

The serviced apartment sector average dipped slightly to 91 per cent from 92 per cent in the third quarter but average rental rates increased by 0.4 per cent to US$26 per sq.m per month, Trung said.

Son reported challenges to credit acquisition for the capital property market, which include depreciating dong, high interest rates for loans and Decree 71, which contributed to a decline in mobilised capital.

Son also asserted that the increased price of gold and the higher exchange rate attracted more investors to the financial market so available capital for property projects has declined. — VNS

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Poor fuel management costs millions

HA NOI — Poor fuel forecasting and lack of communication had caused Viet Nam to spend valuable foreign currency on importing petrol while domestic petrol was in oversupply, the Ministry of Industry and Trade said this week.

It has also contributed to Viet Nam National Petroleum Corporation (Petrolimex) losing US$41 million in exchange rates so far this year.

Deputy Minister Nguyen Cam Tu said only 9 out of 11 petrol enterprises had bought petrol produced by Dung Quat Oil Refinery this year, using only 30-40 per cent of its production capacity.

Petrolimex, which accounted for 60 per cent of the country's market share of petrol, had been expected to buy 28 per cent of Dung Quat's output, but had only bought 19 per cent.

Tu explained that the reason for the high imports was a shortfall last year when the new refinery had failed to reach its production target due to teething problems and as a result petrol traders had had to import petrol in order to ensure supply.

This year, traders had again signed contracts to import fuel, hedging against the same thing happening again at the refinery, but the plant had ironed out its problems.

Since August it had been producing to its design capacity, which was equal to 6.5 million tonnes a year, or 30 per cent of the country's needs, exceeding its own yearly plan by 25 per cent.

Thus while local production was up, local demand was down as domestic traders would suffer heavy losses if they cancelled their import contracts.

The differences in exchange rates had already caused Petrolimex a loss of VND800 billion (US$41 million) since the beginning of the year.

To address the problem, PetroVietnam would plan and work with petrol traders to limit stockpiled petrol and restrict imports.

In the meantime, Petrolimex had targeted to double petrol consumption from the refinery in the next three months and six out of 11 petrol importers had sought to reduce their imports to 700,000cu. m.

To date, the plant had processed 4.98 million tonnes and sold 4.74 million tonnes; in particular 4,500 tonnes of aviation fuel Jet A1 fuel was sold to PB Singapore Petroleum Company.

The country had imported 7.84 million tonnes in the first nine months, or 67.6 per cent of its forecast consumption for the year. — VNS

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Ministry mulls curbs on cement production

The Dien Bien Cement Plant began operations in the northern province of Dien Bien this month. — VNA/VNS Photo Manh Thanh

The Dien Bien Cement Plant began operations in the northern province of Dien Bien this month. — VNA/VNS Photo Manh Thanh

HA NOI — The Ministry of Construction plans to propose to the Prime Minister a suspension in the licensing of new cement production projects to limit the sector's overheated development, and unnecessary waste of energy.

Vu Quang Diem, Deputy Director of the Ministry's Building Materials Department, said in terms of the building materials production sector, the cement sector was the most energy-inefficient.

For each million tonnes of cement produced, the power sector had to supply 90-95 million kWh, Diem said.

The rapid growth of the building materials production industry, including the cement sector, had put pressure on infrastructure, especially the power sector, Diem said.

The most worrying problem was the number of new cement projects, many of which were inefficient and used out-of-date technology, would continue to rapidly increase if management was not tightened, he said.

The boom would lead to a waste of energy and harm the environment, he added.

The Department was developing a plan for cement sector development until 2015, with an orientation to 2025 to submit to the Government.

The ministry proposed a suspension of investment in 13 projects which had been approved in Prime Minister's Decision 108/2005/QD-TTg issued in 2005, but had not been carried out or would be harmful to the environment if continued.

As an alternative, the authority petitioned the Prime Minister to agree to the construction of nine projects which had more favourable local conditions and would have a significantly beneficial affect on the development of the region where they were located.

The ministry also asked for stricter punishment on projects that failed to meet schedules.

The head of the ministry's Department of Science, Technology and Environment, Nguyen Trung Hoa, said that it was difficult to compel enterprises to spend hundreds of millions of US dollars to renew technology.

Therefore it was necessary to offer preferential lending policies, so that companies would find it easier to access loans to upgrade energy-saving technology, he said, adding that a raft of complicated administrative procedures was one of obstacles that made companies hesitate when considering upgrading their technology.

The Government should strictly implement the regulation that forced cement factories to re-use exhaust fume heat discharged to generate power, as the temperature of the exhaust fumes could reach up to 370 degrees Celsius, Hoa said.

If factories could take advantage of this energy source, they could save 30 per cent of the electricity they consumed, he added.

Although the policy had been outlined in Decision 108, many enterprises had not been interested in it, Hoa said.

Diem suggested that the Government only license new projects which included the construction of a power generator using exhaust fumes.

According to the ministry, by the end of 2009, total design capacity of all cement factories nationwide was 57.4 million tonnes per year, which could fully satisfy domestic consumption demand. However, this year, total capacity had added an additional 11.7 million tonnes to output. — VNS

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Overseas investment totals $730 mln

In the first nine months of the year, the Foreign Investment Agency (FIA) licensed roughly 90 overseas investment projects totalling more than US$637 million and gave permission for 25 existing projects to raise their capital by $92 million, according to FIA statistics.

The FIA said besides the traditional markets of Laos and Cambodia, Vietnamese businesses this year also poured significant investment into Russia, Malaysia, Algeria, the US and Cuba.

Vietnamese businesses have so far invested more than $8 billion in more than 500 overseas projects.

Mining topped the list of Vietnamese foreign investment to date, totalling $3.58 billion. The service and agro-forestry-fishery industries followed with $1.12 billion and nearly $985 million, respectively.

Apart from big names such as the Hoang Anh Gia Lai Group, the Sai Gon Thuong Tin Joint Stock Commercial Bank (Sacombank), the Bank for Investment and Development of Viet Nam (BIDV) and the Army Telecoms Corporation (Viettel), several more enterprises have begun to invest overseas.

The Truong Thanh Furniture Corporation recently signed a MoU with a South African partner to build a $30 million processing plant in the city of Umshwathi.

It also plans to plant 10,000ha of trees in South Africa's Kwazulu Natal province.

"The important thing is not just quantity but the quality of projects and how effective they are, especially in helping local exporters," said deputy director of the FIA's Overseas Investment Division Vu Van Chung.

To facilitate overseas investment, the FIA is collecting feedback from businesses for the amendment of Decree 78/2006/ND-CP, which provides enterprises with guidelines on how to prepare an application to speed up investment registration procedures, Chung said.

 

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