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BUSINESS IN BRIEF 27/3   2009-03-27 - VNA

PM calls on cement industry to go internationally

Prime Minister Nguyen Tan Dung has urged the Vietnam Cement Industry Corporation (VICEM) to work out a concrete strategy on exports for a regional and international VICEM trademark.

The Government leader made the call at a working session with VICEM on March 26, urging the corporation to also aim for the status of a national cement industry group.

“It was reported that 2009 will see additional 18 cement factories put into operation, capable of producing over 20 million tonnes a year. VICEM has therefore to take care of marketing in the vested interest of both distributors and manufacturers, thus increasing both production outputs and market shares,” Dung said.

He also called on the industry to cut overheads in all production steps and promote product marketing as necessary steps to maintain profits and ensure stable incomes or wages for employees amid increasing input costs.

In order to address the industry’s weaknesses revealed in low productivities and delay in a number of investment projects that have caused wastes, the Prime Minister asked the national giant to focus investments in key products, not hesitate in personnel reshuffle and apply information technology.

“For immediate future, VICEM should map out a development strategy to 2020, speeding up tempo of underway investment projects and in some cases providing financial support for those projects in need to help them meet deadlines,” Dung concluded.

Dung and his deputies Truong Vinh Trong and Hoang Trung Hai all recognised VICEM’s contributions to the national construction, especially its success in stabilizing prices over the past decade while continuing making high profits amidst surges in material prices such as electricity, coals and paper.

They also lauded the corporation’s achievements in securing high wages for employees at 5.5 million VND per month.

Tan Mai Group set to launch four pulp, paper plants

Southern Dong Nai province’s Tan Mai Group has selected E.C. EURO Consult to transport its paper and pulp production equipment imported from Canada.

The 99.5 million USD contract will cover installation design, upgrading and operating the four production lines, valued at 49 million USD, which the Tan Mai Group bought from a factory in Quebec .

The production lines will be installed at the group’s four plants, located in southern Dong Nai, central Quang Ngai, and Central Highlands Kon Tum and Lam Dong provinces.

Once operational in late 2010, the factories will help the Tan Mai Group raise its total pulp and paper output by 460,000 and 550,000 tonnes, respectively.

More people hoard yellow metal

Gold companies and jewellers think that large quantities of gold are being hoarded by individuals.

Cao Thi Ngoc Dung, general director of the Phu Nhuan Jewellery Company (PNJ), estimates this at around 800 tonnes worth 24 billion USD at current rates.

Even accounting for the gold smuggled out of the country, the quantity is not less than 700 tonnes, gold companies said.

Around 500 tonnes were legally imported while the rest is contraband or gold held for many years, Dung said.

There are no officials figurers for the total quantity of gold imported so far, but consumption levels have been surging in the last few years, with imports topping 70 tonnes a year, according to gold companies.

Since Saigon Jewelry Holding Company (SJC), one of the country’s leading gold importers, launched its SJC gold bars in 1998, it has sold 11.7 million taels, or almost 439 tonnes.

Besides, bars sold by other gold companies are also available in the market and hoarded. Gold companies also estimate that 200 tonnes of gold have been used to make jewellery which is owned by people.

With international prices climbing, the General Statistics Office said gold exports were worth 2.3 billion USD in the first quarter, up 49 percent over the same period last year.

The State Bank of Vietnam has allotted quotas to several companies to export gold, a move hailed by analysts who said it would bring in foreign currency.

Model farm plays vital role in reviving agriculture sector

Vietnam Gardeners’ Association should expand the VAC model, which combines orchard development, fish breeding and animal husbandry, into large-scale and professional agriculture production in order to meet the criteria of Good Agriculture Practices.

The expansion should help make agriculture production develop in a modern and stable way, with products of high competitiveness for both domestic consumption and export, said Secretary of the Party Central Committee (PCC) and chairwoman of the PCC’s Mass Mobilisation Commission Ha Thi Khiet, at the National Congress of the Gardeners’ Association, held on March 26 in Hanoi.

She also urged members of the association to improve their professional skills to provide feedback and consultation in programmes on agriculture development and technical training for farmers.

According to the vice president of the association, Ngo The Dan, developing the VAC model is one of the major measures to change the present agricultural structure and to increase the income of farmers.

The target set by the agricultural sector is an annual income of 50 million VND (2,800 USD) per household and per hectare. The current figure is 29.2 million VND (1,670 USD).

Nevertheless, there are many households making huge profits after applying the VAC model, he said. A raft of farmers earn 70 million VND (4,000 USD) each year from their fruit plantations, with some special kinds of fruits paying out closer to 200 million VND (11,000 USD).

Also, in the past five years, the association launched models to improve the quality of lychees in Luc Ngan district of northern Bac Giang province, Dien grapefruit and Canh oranges in Hanoi and dragonfruit in central Binh Thuan province.

Additionally, 96 six to 12 month training courses have been organised.

The Vietnam Gardeners’ Association looks to have 1 million members in the next five years.

The association’s activities will include boosting the VAC model, passing on good agricultural practices to farm owners and strengthening market access.

Local law firm receives int’l awards

Vietnamese law firm YKVN has been presented with three international awards for the “National Law Firm of the Year” 2009, "Employer of Choice" 2008 and “Deal of the Year 2008” by Asian top law magazines.

The “National Law Firm of the Year” award was given by the International Financial Law Review (IFLR) to the local firm with the best track record for the preceding year in giving local law advice on the most innovative international finance deals from the country in question. This is the third time YKVN has received this distinction.

YKVN was named "Employer of Choice" 2008 for the second consecutive year according to a survey among over 15,000 lawyers region-wide conducted by Asian Legal Business.

The third award, "Deal of the Year 2008", was given by the Asian Counsel magazine, a leading journal for corporate counsel in the Asia-Pacific and Middle East regions, for YKVN role in the Initial Public Offering (IPO) of the Bank for Foreign Trade of Vietnam (Vietcombank) on the Ho Chi Minh Stock Exchange in January 2008, in which it acted as legal counsel for Vietcombank

PetroVietnam hooks up with Bolivian counterpart

The Vietnam National Oil and Gas Group (PetroVietnam) said it has signed a cooperation agreement with Bolivia’s state-owned oil and gas corporation Yacimientos Petroliferos Fiscales de Bolivia (YPFB).

Under the terms of the compact, the two companies will jointly assess oil and gas reserves for exploitation at a number of lots in Bolivia which has huge oil and gas potentials in South America.

PetroVietnam said it plans to sign another cooperation deal with the state-run energy company of Argentina ENARSA, and work with the Ministry of Planning and Investment of Argentina, and the Industrial Metalurgicas Pescarmona S.A.I.C.y F (IMPSA) – a partner who is negotiating for its participation in electricity projects in Vietnam.

Previously, the group inked an overall oil and gas cooperation agreement and a deal with Petroleum of Nicaragua, or Petronic, to jointly assess some oil fields located offshore Nicaragua.

Once reserves are discovered, PetroVietnam and Petronic will negotiate and sign oil production contracts.

PetroVietnam has pursued a strategy to explore investment opportunities in America, where it already signed a number of oil and gas contracts with partners from Cuba, Venezuela and Peru.

Rice export surges, farmers earn high profits

Vietnam fetched 785 million USD from exporting 1.74 million tonnes of rice in the first three months of 2009, reported the Ministry of Agriculture and Rural Development (MARD).

Both the export turnover and volume saw high increases, 76.2 percent and 71.3 percent respectively, as compared with the corresponding period last year.

In March alone, the country exported 700,000 tonnes, grossing up to 315 million USD.

According to the Vietnam Food Association, the rice price enjoyed light increases in March. Rice with 5 percent of broken rice fetches a FOB price of between 435-460 USD per tonne, and rice with 25 percent of broken rice at 400-410 USD per tonne.

However, the association has revealed its plan to slow down rice export as businesses has so far registered to ship 3.6 million tonnes of rice for the first six months of 2009. The nation targets to export 4.5-5 million tonnes of rice for the whole year.

As exporters are accelerating rice purchase for export, farmers in the Mekong delta rice bowl are selling at prices of 4,200-5,000VND per kg, pocketing a profit of 50 percent.

To date, Mekong delta farmers have harvested nearly 800,000 ha out of over 1.54 million ha of the winter-spring rice crop, yielding an average 6.2-6.3 tonnes of paddy per ha.

The MARD estimates the delta will obtain an output of 9.6-9.8 million tonnes in this crop

Railway corporation asked to become strong economic group

Prime Minister Nguyen Tan Dung has asked the Vietnam Railway Corporation (VRC) to increase service quality, accelerate infrastructure projects and personnel training in order to become a strong economic group.

To achieve the target, the PM allowed the corporation to mobilise capital from all economic sectors to develop infrastructure, boost export of diesel locomotives and organisational structuring.

Working with VRC leadership in Hanoi on March 26, PM Dung asked the corporation to work with relevant ministries and agencies to select suitable technology as well as construction and investment solutions to develop the Hanoi-Ho Chi Minh City express rail route.

The Government leader also pointed to the corporation’s shortcomings including poor service quality and infrastructure, adding that VRC should improve its service to meet public demand, especially during holidays.

According to VRC President and General Director Nguyen Huu Bang, in 2008, the corporation gained 6.87 trillion VND in revenues, a year-on-year increase of 16.2 percent, and a net profit of 50 billion VND.

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