Monday, January 24, 2011

Power cuts expected for months to come

HA NOI — Viet Nam is faced with occasional power shortages during the next two or three months – and the situation is not forecast to improve in the new year.

Statistics from State-run Electricity of Viet Nam Group (EVN) show that in the first nine months of the year, total water in national reservoirs was 33.3 billion cubic metres less than at the same period last year.

This is sufficient to cause hydro-power shortages of up to 6 billion kWh.

Total electricity production from all sources last month amounted to just over 8.6 billion kWh, up 15 per cent on the same period last year.

Reduced water levels have left power authorities perplexed at the possibility of power shortages and cut-offs in the near future as well as shortages next year.

To deal with the issue, Prime Minister Nguyen Tan Dung has asked the EVN to regulate power supplies for production and consumption and to try and limit cutting supplies.

He said the sector should mobilise oil-fired and coal-fired power plants, bring newly-built plants into operation and promote the saving of power among the population.

Deputy general director of the EVN Dang Hoang An said hydro power normally produced more than 59 per cent of total needs.

He said while the sector might be able to meet demand for 25 billion kWh in the last three months of this year, an additional problem was the temporary closure of Ca Mau Gas Factory PA3 pipelines for maintenance.

Ta Van Luan, director of Yaly Hydropower Plant, said water levels at Pleikrong Reservoir were about 537m, compared to 570m for the same period last year.

He said he did not expect the situation to improve in the near future and that the plant had been operating only five hours a day, lower than full capacity.

A similar situation is being experienced at the largest Yaly Hydropower Plant, which has a water level of 490m, 25m lower than average level last year.

Luan said water flow into Yaly reservoir was 160cu.m a second, but its four turbines needed 420cu.m a second to reach full capacity.

He said in the first nine months of the year, the plant had run at half of its capacity because of the low water levels.

And that some water would be saved for next year. The plant is expected to supply 4 billion kWh this year, compared to its expected production of 5.5 billion kWh.

Reservoirs in the Central Highlands and the south are facing drought.

Le Van Quang, deputy director of Da Nhim-Ham Thuan-Da Mi Hydropower Company said the water level at Ham Thuan was only 39cm above the lowest level and supplied water for electricity for only eight hours a day.

He said the 400MW Tri An Hydropower Plant had received 4.1 billion cu.m, 2 million cu.m lower than at the same period last year. Its water level was less than a metre above the lowest level.

Director of Tri An Hydropower Plant Nguyen Kim Phuc said low water levels had reduced expected electricity production this year to 1-1.2 billion kWh, the lowest level in 23 years of operation. ­— VNS

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Nations co-operate to foster tourism

Tuan Chau Resort in the northern coastal province of Quang Ninh. The three Indochinese countries have made efforts to boost co-operation on promoting tourism in the region. — VNA/VNS Photo Thanh Ha

Tuan Chau Resort in the northern coastal province of Quang Ninh. The three Indochinese countries have made efforts to boost co-operation on promoting tourism in the region. — VNA/VNS Photo Thanh Ha

HCM CITY — As part of the HCM City International Travel Expo 2010, a seminar was held recently, themed "Three Countries-One Destination".

This year marks the strong recovery of Viet Nam's tourism, with a 30 per cent growth of international tourist arrivals year-on-year, according to La Quoc Khanh, deputy director of the HCM City Department of Culture, Sports and Tourism.

Tourism in Laos and Cambodia has also seen encouraging growth, Khanh added.

"This achievement comes from efforts of each country, and from successful co-operation, co-promotion and formation of tourist products among the three countries," he said.

"There is a trend of overland tours through Viet Nam, Laos and Cambodia," Cao Tri Dung, director of Vietnamtourism – Vitours, said. "Tourists want to experience new ways of travel."

However, this kind of travelling has met difficulties because of the high charge for the vehicle border pass, few services on the way, and no cooperation between local authorities.

"There is no rest stop from Viet Nam to Laos," Dung said.

He proposed that authorities lower border check fees, and invest in rest-stop shops along the routes as well as infrastructure.

At the seminar, Edouard George, chairman of Phoenix Voyages Company, presented information about vessels that would be used for cruises on the Mekong River from Viet Nam to Cambodia.

They include the three-deck L'Amant offering 12 wide cabins; three-deck Tonle Pandaw accommodating 66 guests; three wood cabin The Bassac; three-deck RV Indochine; three-deck Mekong Eyes; three-deck Mekong Feeling; and 46-room French colonial-style vessel RV La Marguerite.

In order to support tourism, Viet Nam Airlines has introduced an air network and new policy for flights from Viet Nam to Cambodia and Laos, as well as a new route to Myanmar.

The national carrier is expected to fly to 44 international destinations and 23 domestic destinations in 2020, said Hoang Viet Thang, deputy general manager of the passenger sales and marketing department of the Southern Regional Office of Vietnam Airlines.

The airline currently has flights to 26 international and 20 domestic destinations.

According to Thang, Europe is an important market for tourism in Indochina. The airline expects to open new routes and improve direct flights from HCM City and Ha Noi to the region.

"Indochina is the target tourism destination for Northeast Asia tourism, so new routes will be opened by 2015," Thang said.

The carrier intends to open direct flights to the US next year and wants to open new routes to the Southwest Pacific as well as increase the frequency of flights within Southeast Asia to attract tourists to new destinations in Indochina.

The carrier will also develop direct flights from Viet Nam's central Da Nang City to Indochinese countries, to increase tourism from the midlands of Viet Nam to the region, Thang added.

In addition, it will create a dense network throughout the country of 44 routes and 2,100 flights a week by 2015, making connecting times convenient for flights from Indochina.

The carrier also will improve cooperation with Cambodia Angkor Air, Lao Aviation, Myanmar carriers, Tourism Authorities in Viet Nam, Laos, Cambodia and Myanmar to promote destinations in Indochina.

Ministers' conference

"We encourage national travel agencies to hold information exchanges, share experience in tourism master plans, promotions and product development," said Tran Chien Thang, deputy minister of Culture, Sports and Tourism.

Thang spoke at the conference of four Tourism Ministers on the opening day of HCM City's International Travel Expo from September 30 to October 2.

Among the attendees were Thong Khon, tourism minister of the Kingdom of Cambodia; Somphong Mongkhonvilay, chairman of Lao National Tourism Administration; and Aye Myint Kyu, deputy minister of Myanmar Hotels and Tourism.

The four countries should support each other in holding forums on tourism investment, Thang said, adding that the countries should create favourable conditions for others to join in international tourism events to increase the number of the tourists among the four countries.

At the meeting, countries unanimously approved the plan to strengthen cooperation in educating human resources for tourism by standardising jobs and teaching programmes, and by offering scholarships and information exchange, Thang said.

In addition, the four ministers agreed to create improved conditions for transportation among the countries, and called for more foreign investment in tourism.

Also, they decided to hold the Conference of Four Tourism Ministers every two years. — VNS

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Project to boost exports to Africa

Rice, which accounts for roughly 40 per cent of the country's total export turnover to Africa, is packed for export at the HCM City Food Company. The Ministry of Industry and Trade has approved a project to help exporters better exploit the African market. — VNA/VNS Photo Dinh Hue

Rice, which accounts for roughly 40 per cent of the country's total export turnover to Africa, is packed for export at the HCM City Food Company. The Ministry of Industry and Trade has approved a project to help exporters better exploit the African market. — VNA/VNS Photo Dinh Hue

HA NOI — A project to boost exports to Africa, a location considered to be a potential market for Vietnamese goods in the wake of saturation in traditional markets, was ratified by the Ministry of Industry and Trade (MoIT).

Under the project, the ministry will select a number of large exporters to focus on Africa specifically and they will be grouped together to focus on exporting special products to key markets in the region.

MoIT will also ask the Government to introduce policies to encourage small- and medium-sized businesses to do more business in Africa.

Besides rice, apparel, coffee, footwear, electronics and construction materials, the ministry will also urge exporters to ship goods that are in high demand in Africa, such as household utensils, consumer goods, food, plastics, mechanical goods and medicine.

Africa is the world's third largest continent with 54 countries and a total population of more than 1 billion. As the continent's economy is forecast to expand by about 4.5 per cent this year, they will likely need to import various necessities and a greater volume than in the past.

Currently, Vietnamese products are present in 53 African countries. The key export markets are Egypt, South Africa, Angola, Nigeria, Ghana and Algeria.

Strategic gateway

Two-way trade between Viet Nam and Africa has grown by an average of 45 per cent per annum. Last year, Viet Nam's exports to Africa reached US$1.56 billion, an increase of 20 per cent compared to 2008, of which South Africa accounted for roughly 30 per cent.

Do Quang Lien, commercial counselor to South Africa, said Vietnamese businesses should strengthen their investment and exports to South Africa as it is the continent's largest economy and a strategic gateway for trade between the continent and other countries.

Viet Nam's main exports to Africa include rice, consumer goods, textiles and garments, electronics, plastic and wooden products, coffee, motorbikes, dairy products, seafood and processing foodstuff. Currently, rice accounts for roughly 40 per cent of Viet Nam's total export turnover to Africa and it is forecast that the product will remain at the top of Viet Nam's exports to Africa for the next five years.

Although trade between the two countries has increased, Vietnamese exporters to Africa are still facing challenges, including incomplete legal policies, poor infrastructure, an undeveloped banking system and a lack of information about African countries in general.

Apart from Africa's remote location, which bumps up transport costs, the difficulty in making payments is a daunting one. Le Thi Thai Hoa, deputy director of the Ministry of Industry and Trade's African Market Department, said several African countries were saddled by outdated payment facilities, which deter Vietnamese enterprises from penetrating this market.

To deal with this, Hoa suggested businesses should actively contact her department and Viet Nam's trade offices in African countries to seek help, avoid fraud and minimise risk.

This year, Viet Nam targeted a 3-per-cent increase to $1.6 billion in export revenue to Africa. — VNS

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Malaysian firms eye investments in VN

HA NOI — Viet Nam is a new strategic market for Malaysian businesses to invest in franchises, the Malaysian Franchise Association (MFA) has announced.

At a seminar held in Kuala Lumpur on Wednesday, MFA Managing Director Sofia Leong Abdullah praised Viet Nam's potential, a country with a population of 87.9 million and ranked third in economic growth across the world.

Viet Nam's purchasing power had also rapidly increased, partly thanks to US$20 billion in foreign remittance, he said, noting that the country's franchise market was strongly developing with average turnover increasing by 50 per cent each year.

This trend was expected to last till 2012.

The two Malaysian brands that already operate in Viet Nam were Setia and Berjaya, he added.

During talks with reporters after the seminar, Abdullah said the MFA would work with Perbadanan Nasional, a leading agency employed by the government to develop the country's franchise industry, and the Malaysia External Trade Development Corporation (Matrade) to promote Viet Nam's potential market to Malaysian businesses.

The MFA intended to bring seven or eight local franchises to Viet Nam by the end of this year, he said, adding that the number would increase in 2011.

According to Abdullah, demand for franchises in Viet Nam can be seen in the retail sector, beverages, restaurant services, fashion and education. — VNS

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Sunday, January 23, 2011

City apartments sector heats up

HCM CITY — In the HCM City property market, the apartment segment saw both supply and demand rise in the third quarter, consultancy Savills Viet Nam said in a report.

The total primary supply of apartments for sale reached a record almost 16,600 units by the end of September, nearly three times the number from a year earlier.

Nearly 7,200 of them came into the market in the third quarter against 3,200 in the second and 2,900 in Q1.

The grade C segment saw the highest number of new projects, with the majority of them located in Tan Phu, Binh Chanh, and Binh Tan Districts.

The third quarter also saw the highest number of apartments sold in the primary market – at approximately 4,400 units, it was equal to total sales in the previous two quarter.

The majority of them, around 80 per cent, were grade C units.

Demand mainly came from the segment priced below US$1,000 per square metre. It recorded sales of nearly 3,300 units.

Rising demand for apartments was fuelled by increasing disposable incomes and growing migration to the city.

Migrants

In five years since 2004, around 1.6 million people have migrated to the south-eastern area of Viet Nam, with a million coming to HCM City alone.

Demand is expected to remain strong in the smaller-sized segment where apartments cost VND800 million-VND1.5 billion ($42,000 – $79,000).

A further 26 projects are expected to launch in the next two quarters and will offer around 10,000 units.

In the next two years 104,000 more apartments are expected to be built and put for sale.

There were approximately 2,950 serviced apartments in all grades from A to C for lease in the city.

The number of units rose by 6 per cent quarter on quarter.

In this, the market share of Districts 1 and 3 was 62 per cent. District 1 ranked first with 1,500 units.

With no new projects completed in Q3, the primary market remained unchanged at eight projects and approximately 800 units.

Almost 490 villas and houses were sold. The average price of villa land ranged from $1,500 to $2,500 per square metre.

Phu My Hung New Urban Area in District 7 accounted for 70 per cent of the villas and houses that came into the secondary market and had an average price of $600,000–$2.8 million. HCM City's population growth average 3.5 per cent a year, double the national rate.

The market is expected to add at least 9,500 villas and townhouses in the next few years. Many projects are in the planning stage or awaiting for licences.

Most are concentrated in outlying districts like 9, Can Gio, Binh Chanh, Binh Tan, and Hoc Mon.

District 9 ranks first in terms of total area and number of projects (11). — VNS

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Lifted import quota cools gold rush

HA NOI — Domestic gold prices yesterday plunged by VND1.2 million (US$61.53) from Thursday's record high to around VND31.85 million ($1,630) per tael, following the State Bank of Viet Nam's announcement late Thursday that it had approved additional gold imports. A tael is equal to 1.2 ounces.

Gold-selling districts in Ha Noi and HCM City saw prices change at least three times in the morning and early afternoon, with Saigon Jewelry Co, Sacombank Jewelry Co, Bao Tin Minh Chau, Agribank Jewelry Co and Phu Nhuaân Jewelry Co each quoting buy/sell prices at VND32.1-32.24 million per tael.

But late Thursday, with the domestic gold price VND1 million (around $50) higher than global prices, State Bank governor Nguyen Van Giau decided to allow 10 major gold trading enterprises to import an additional three tonnes of the precious metal over the course of the next week.

It marks the second time the central bank has allowed additional gold imports this year, allowing seven tonnes to be imported in July – a figure decried as too low.

"When people knew the gold import quota was so restrictive, many bought up gold," said Sacombank Jewelry Co general director Ton The Vinh Quyen.

But not everyone welcomed yesterday's move by the State Bank.

"Gold imports at this time may soak up the limited supply of dollars, while helping drive inflation up in the last two months of the year, when it is usually higher anyway before the lunar new year," said Do Thi The, a forex investor.

Similar concerns yesterday drove the cost of the greenback on the black market to VND19,850-19,880, about VND20 higher than on Thursday. However, bank exchange rates remained unchanged at VND19,470-19,500 per dollar, while the interbank rate continued at VND18,932.

The State Bank again yesterday denied rumours of a dollar shortage, saying that it continued buying up dollars from credit institutions in the third quarter, suggesting a plentiful dollar flow in circulation. However, yesterday's comments from the State Bank marked the third time since February it has issued a similar message to the public. — VNS

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Markets sort mixed economic signals

HCM CITY — Mixed macroeconomic signals and continued lateral movement of stock markets continued in September, but one of the most positive signs was estimated GDP growth of 7.16 per cent for the third quarter, according to a monthly review released by the company Viet Nam Asset Management yesterday.

The GDP rate during September contributed to the combined growth of the first nine months to 6.52 per cent.

The full-year GDP growth target was revised up to 6.7-6.8 per cent, given that the last quarter is usually the most robust period of economic activity.

For the first nine months, industrial production was up 13.8 per cent while retail sales revenue soared 25.4 per cent compared to the same period last year.

While economic growth is edging up, inflation and exchange rates are likely to become issues in the last three months of the year.

The September consumer price index (CPI) came in at 1.31 per cent month-on-month and 8.92 per cent year-on-year.

This was the first month-on-month increase of over 1 per cent since this February.

The sharp acceleration was driven by higher prices of foods, construction materials, gas and education fees, with the latter caused by a seasonal effect.

The exchange rate is another concern, as the unofficial rate, after months of converging with the official rate, suddenly heated up in September, trading at 1 per cent above the upper limit of the official trading band.

The recent fluctuation of the exchange rate in the unofficial market was primarily attributed to strong increases in gold prices in the last two months, accelerating inflation and widening the trade deficit.

The mix of a record-high gold price, an unexpected rise in September's CPI, and the divergence of official and unofficial exchange rates has once again sparked fears of inflation and further devaluation toward the year-end.

The securities market continued its prolonged lateral movement when the VN-Index closed the month at 454.52, almost flat against September.

The report suggests that despite the potential catalyst from corporate earnings in the third quarter, investors will likely remain cautious in October because of a stocks oversupply and mixed macroeconomic signals.

"We are still upholding our long-term interest in the consumer, IT, telecom and pharmaceutical sectors. For short-term seasonal play, we are closely watching natural rubber and some high-dividend defensive stocks. Overall, we strongly advise investors to look closely at individual firm's performances rather than choosing a specific industry," the report said. — VNS

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