Overnight interbank rates exceed 8%

HANOI - The overnight interbank rates have unexpectedly exceeded 8% a year over the past few days after being kept below or around 7% for several months now.

The overnight interbank rates accelerated to about 8.4% on September 8, 2010 from 7.5% on September 7.

According to the central State Bank of Vietnam, the rates were relatively stable at below 7% a year from early June till end-August, and hovered around 6.9% on August 31. However, the rates climbed to 7.15% on September 1 and stayed above 7.1% until last Monday.

Le Thanh Van, deputy manager of the investment department of Vietnam Bank for Investment and Development attributed the surge to a sudden increase in demand for short-term capital from commercial banks, especially small ones, to invest in shares and real estates, and to make loans to equity investors.

Bui Quy Thanh, head of the securities analysis department in Bao Minh Securities said, said the sudden surge of the overnight interbank rate contributed to the steep fall in the main VN-Index, which she more than 12 points, or 2.65%, to close at 450 points last Friday.

Equity investors feared the movement could indicate banks were running short of money and therefore could limit access to loans for equity investments, while the base rate could go up if the trend continued in the next sessions.

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Overnight interbank rates exceed 8%

HANOI - The overnight interbank rates have unexpectedly exceeded 8% a year over the past few days after being kept below or around 7% for several months now.

The overnight interbank rates accelerated to about 8.4% on September 8, 2010 from 7.5% on September 7.

According to the central State Bank of Vietnam, the rates were relatively stable at below 7% a year from early June till end-August, and hovered around 6.9% on August 31. However, the rates climbed to 7.15% on September 1 and stayed above 7.1% until last Monday.

Le Thanh Van, deputy manager of the investment department of Vietnam Bank for Investment and Development attributed the surge to a sudden increase in demand for short-term capital from commercial banks, especially small ones, to invest in shares and real estates, and to make loans to equity investors.

Bui Quy Thanh, head of the securities analysis department in Bao Minh Securities said, said the sudden surge of the overnight interbank rate contributed to the steep fall in the main VN-Index, which she more than 12 points, or 2.65%, to close at 450 points last Friday.

Equity investors feared the movement could indicate banks were running short of money and therefore could limit access to loans for equity investments, while the base rate could go up if the trend continued in the next sessions.

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Drug material import to double in five years

HCMC – Vietnam will see its demand for pharmaceutical material imports to double within the next five years to some US$1 billion a year as local production is still undeveloped, the National Agency for Science and Technology Information said.

Phung Minh Lai, deputy director of the sci-tech information agency, told reporters at a press briefing over the weekend that “the cost for imported materials for medicine production will expectedly rise to US$1 billion a year from 2015.”

Lai, whose agency held the press briefing to call attention to an exhibition named Analytica Vietnam 2011 for technologies, analysis, biotechnology and diagnostics, said Vietnam last year spent US$480 million on imported drug materials out of the total US$1.5 billion of medicine import value.

Though Vietnam has set a target of achieving an annual growth in the drug-related chemical industry by 15%, its pharmaceutical chemistry is still undeveloped compared to the increasing demand for chemical products, the agency said.

The pharmaceutical chemistry sector is just able to produce some simple substances and limited types of products on simple technologies, according to the agency, which said the country would need to build six pharmaceutical chemistry plants by 2015.

Analytica Vietnam 2011 will be held in HCMC on April 7-9 next year by Munich Exhibition Company in collaboration with the National Agency for Science and Technology Information.  

Lai said that the exhibition would be a good opportunity for both local and international partners to exchange information in the field of technologies, analysis, biotechnology and diagnostics. This is the second Analytica Vietnam exhibition to be held in Vietnam after the first one in Hanoi last year, which attracted some 75 companies from 11 nations worldwide.

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Race to summit of Ba Den Mountain

The HCMC-based sports event company Viet Adventure will hold its second annual adventure hike and cross country mountain bike ride at a Ba Den Mountain (Black Virgin Mountain) in Tay Ninh Province on September 25.

The two-to-five-hour challenge will climb the 982m mountain, that is well known for it Buddhist legends and discover its rich history and wildlife.

The race will take the hundreds of stairs through rugged bushland to the Cao Dai pagoda then finish with a steep climb that utilizes a via ferrata (cables and steel steps) to the summit. The downhill leg will be a scramble down loose scree that takes in some of the mountain’s most stunning scenery.

For the more adventurous a new addition to last year’s event will be a 25km mountain bike race will be held on difficult off-road terrain before the climb up the mountain.

Following the challenge, there will be an environmental trek. Participants will navigate along a challenging multi discipline adventure course, collecting rubbish and photographing the mountain slopes.

With the proceeds of the adventure hike, Viet Adventure will finance a clean-up of the mountain. All volunteers will be welcome for the environmental work  in Mid-December.

Viet Adventure is committed to creating unforgettable adventure events, focusing on the natural beauty of the surrounding countryside to raise awareness on nature protection.

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Race to summit of Ba Den Mountain

The HCMC-based sports event company Viet Adventure will hold its second annual adventure hike and cross country mountain bike ride at a Ba Den Mountain (Black Virgin Mountain) in Tay Ninh Province on September 25.

The two-to-five-hour challenge will climb the 982m mountain, that is well known for it Buddhist legends and discover its rich history and wildlife.

The race will take the hundreds of stairs through rugged bushland to the Cao Dai pagoda then finish with a steep climb that utilizes a via ferrata (cables and steel steps) to the summit. The downhill leg will be a scramble down loose scree that takes in some of the mountain’s most stunning scenery.

For the more adventurous a new addition to last year’s event will be a 25km mountain bike race will be held on difficult off-road terrain before the climb up the mountain.

Following the challenge, there will be an environmental trek. Participants will navigate along a challenging multi discipline adventure course, collecting rubbish and photographing the mountain slopes.

With the proceeds of the adventure hike, Viet Adventure will finance a clean-up of the mountain. All volunteers will be welcome for the environmental work  in Mid-December.

Viet Adventure is committed to creating unforgettable adventure events, focusing on the natural beauty of the surrounding countryside to raise awareness on nature protection.

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Vinamilk licensed to invest in New Zealand

HCMC – The local leading milk producer Vietnam Dairy Products Joint Stock Co. on Saturday received a license from the Ministry of Planning and Investment to set up its presence in New Zealand, the company said in a statement on Sunday.

This is the company’s first project outside Vietnam that would pave the way for it to further penetrate the global milk market, said the milk processor commonly known as Vinamilk. It will buy a 19.3% stake in New Zealand-based Miraka Limited Company which has built a high-class powder milk factory at the center of North Island in the country, Vinamilk said in the statement sent to the Daily.

Vinamilk said that the factory in New Zealand, costing 121 million new Zealand dollars (some VND1.62 trillion) and having annual designed capacity of 32,000 tons of powder milk, would officially operate in August next year. The factory, which uses fresh milk supplied by farmers in New Zealand as feedstock, will sell its products widely on the global market.

The outbound investment project is in line with Vinamilk’s plan to expand its processing capacity and to secure more fresh milk material supplies for its production.

On the home front, Vinamilk has lately developed five cow farms in five provinces of Tuyen Quang, Thanh Hoa, Binh Dinh, Nghe An, and Lam Dong, with the total herd of 5,000 cattle head. The company expects to import 1,000 more cows this year.

Mai Kieu Lien, chairwoman and CEO of Vinamilk, told local reporters in a meeting last Friday that the company forecast its demand for fresh milk in the next five years at 1.3 billion liters annually, but the current local supply was about 200 million liters only. Therefore, the company is developing its own farms.

“We target to secure 40%-50% of fresh milk material demand from our own farms by 2015,” Lien said.

Vinamilk is deploying several projects to enhance its production in the country. The company will put into operation its US$30-million milk factory in Danang City by August next year, which will mainly produce yoghurt and liquid milk products.

By late 2012, two more factories of Vinamilk will operate.

The first one is a US$120-million liquid milk factory with an annual designed capacity of 400 million liters in the first phase and 800 million liters in the second phase. Meanwhile, the other one costing over US$100 million will produce powdered milk for kids with an annual designed capacity of 55,000 tons, four times higher than the current capacity of Vinamilk’s factory now.

Vinamilk currently has 250,000 distributors and retailers, selling nearly 10 million milk products a day. It now has a market share of 40% in Vietnam.

Lien said the company’s local sale revenue in this year to date has amounted to about VND9.6 trillion, equivalent to the whole revenue of last year.

Besides the local market, Vinamilk is also strong in export, obtaining about US$80 million in revenue every year. Its main export markets are the Middle East, Cambodia, the Philippines, and Australia.

In related news, Vinamilk is considering to raise product prices to compensate rising input costs. The company’s CEO said that Vinamilk was calculating to harmonize product prices with the price of fresh milk purchased from farmers.

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Denmark supports Vietnamese SMEs

Danish Ambassador to Vietnam John Nielsen announces the Business Sector Program whose main goal is to support Vietnamese SMEs in the private sector - Photo: Quoc Hung

HCMC - The Danish International Development Assistance (Danida) has approved the Business Sector Program in Vietnam, which will strongly benefit small and medium enterprises, especially those in the private sector.

The program will have a total budget of 123 million Danish Kroner, or about VND422 billion, and last for three years from 2011, Danish Ambassador to Vietnam John Nielsen told reporters at a press briefing in HCMC on Friday.

The program is now subject to the appraisal of the Vietnamese Government. The government-to-government agreement between the two countries is expected to be signed in December in order to allow for the program to begin in January 2011, according to the Danish embassy in a statement released at the meeting.

With the objective of strengthening the competitiveness of Vietnamese growth- and export-oriented enterprises and creating decent jobs, the ambition of the program is to help create conditions for continued strong private sector-led growth.

In particular, the program aims at strengthening innovation and adaptation of new technologies in SMEs known as component 1, supporting measures to fortify the national system of occupational safety and health in component 2, and enhancing the understanding of the SME sector through economic research in component 3.

For Component 1, the program will spend 63 million Danish Kroner to support 40 to 50 projects with an average funding of VND4 billion per project for enterprises in seven provinces, the ambassador said.

The direct target group is Vietnamese non-public enterprises providing services to small businesses or household enterprises or farmers operating in the export-oriented value chains, while the indirect target group includes small businesses, household enterprises and farmers.

The Global Competitiveness Facility (GCF) funding is expected to reduce the financial risk for Vietnamese non-public enterprises and organizations embarking on offering business services, new technologies, access to new export markets and piloting new business models.

The Ministry of Labor, Invalids and Social Affairs; the Central Institute of Economic Management and the Global Competitiveness Facility continue to be key partners of the program.

The support to improve labor protection under Component 2 will be implemented by the labor ministry through sector budget support to the National Program on Labor Protection and Occupational Safety and Health 2011-2015.

Ambassador John Nielsen says in the statement that “the strong economic performance of Vietnam over the past two decades reflects the increasing strength and buoyancy of the private sector, which is mainly made up of SMEs. The critical challenges of the next decade for Vietnam are to improve the quality of production, achieve and sustain global competitiveness and at the same time make sure that the poor are being taken along the growth path.”

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