Vietnam Overseas

Deputy Prime Minister Nguyen Sinh Hung okayed the proposal by the Viet Nam Administration of Tourism’s to advertise the nation as a tourist destination on the international news channel CNN.

The ads will be aired twice a day during peak hours for 13 weeks, which amounts to 182 broadcasts.

The funding for the advertising time will come from the National Budget.

Official letter, No 3430/VPCP-KTTH, date June 21, 2007. — VNS

Prime Minister Nguyen Tan Dung has recently approved a US$81.25 million program to help raise and standardize food hygiene and safety nationwide.

The National Program on Food Hygiene and Safety aims to meet international and regional standards in order to protect consumers and their health. The program’s goal is to have nearly all manufacturers, trading enterprises, managers, and consumers both understand and abide by new food hygiene and safety codes as soon as possible.

Decision No 149/2007/QD-Ttg, dated September 10, 2007.

by Le Hung Vong

Choosing the most expensive item as the best is not the ideal way to buy milk products in Viet Nam, experts said at a workshop in Ha Noi last week.

The Viet Nam Standard and Consumer Association (VINASTAS) told the seminar that the prices of dairy products have been continuously increasing in Viet Nam since 2007, and are among the highest in the world.

VINASTAS’ deputy chairman Ho Tat Thang said prices of dairy products in Viet Nam were 1.5 to 2 times higher than the same products in other countries.

The retail price of milk in Viet Nam is US$1.4 per liter on average, compared with $1.1 per liter in China, $0.50 to $0.90 per liter in European countries and America, and $0.50 per litre in India and Mexico.

Thang said raw material prices for dairy products had decreased by 40 to 60 per cent over the past two years, but the prices of the latter kept rising in the domestic market.

The sky-high prices of dairy products have helped producers, importers and distributors in Viet Nam earn huge profits from milk products.

“Profits in this sector amount to 86 per cent of turnover, the highest in the world,” said Thang.

According to figures released at the workshop titled “Introducing Viet Nam’s Dairy Industry to the Overseas Community” in Ha Noi last month, powdered milk companies in Viet Nam earned profits of 22 per cent to 86 per cent.

It costs the companies VND100,000 to produce a 900g tin of powdered milk that sells for VND215,000 in the market.

Dutch Lady accounts for 20 per cent of Viet Nam’s powdered milk market share, followed by Abbott and Vinamilk with 16 per cent each; Mead Johnson, 15 per cent; and Nestle, 10 per cent.

Meanwhile, profit earned by fresh milk companies is 48 per cent on average, with Dutch Lady posting 37 per cent and Vinamilk, 35 per cent, noted reports at the workshop which was jointly held by the International Dairy Federation, the UN Food and Agriculture Organization, and the Ministry of Agriculture and Rural Development.

Nguyen Thi Quynh Chi, chairwoman of the Women Customers’ Association, said some 300 brands of milk products sold in the local market, which had been mismanaged.

Thang said the belief that foreign goods are better was one of the reasons behind Vietnamese customers buying expensive milk products for their children.

VINASTAS advised customers to carefully choose suitable brands for their children by studying the formula on the milk products’ package, instead of merely selecting the most expensive “imported” brands.

The association also proposed that dairy product prices be better controlled and import taxes on milk and dairy products adjusted.

Farmers scratch their heads

Farmers in the Cuu Long (Mekong) Delta still do not know who to contact and what formalities they have to go through to access the preferential loans provided under the Government’s program to support the purchase of agricultural equipment and materials

Nearly a month after the Prime Minister issued a decision on interest rate subsidies to help farmers purchase agricultural equipment and materials took effect, many target beneficiaries are not even aware of such a program, says Nguyen Duy Luong, deputy chairman of the Viet Nam Farmers’ Association.

Only 13 out of 90 farmers in the Mekong Delta province of Tien Giang who owned tra fish breeding farms totaling 120 ha have been able to get bank loans of VND34 billion (US$1.8 million).

The Agribank’s Tien Giang branch, which has earmarked VND500 billion ($28 million) for tra fish breeders, does not want to provide loans to most of them because it finds it too risky. Only those who have signed contracts with seafood processors can access Agribank’s loans.

Le Thanh Dung, chairman of Hoa Hung Tra Fish Breeding Coop in Tien Giang Province says only one of its 26 members have been able to get the preferential loan with a 4 per cent interest subsidy. Others cannot access these loans because they have not repaid all previous debts owed to the bank.

Yet another reason that many farmers in the Cuu Long (Mekong) Delta cannot get bank loans to purchase agricultural machinery and materials is because the Prime Minister’s decision states that preferential loans are provided only to buy domestically produced machinery and equipment.

That is why only two of 64 applicants in Tien Giang Province could get preferential loans.

Meanwhile, a report from the Can Tho Department of Agriculture and Rural Development says just 40 out of 162 farmers in the city who have bought combined harvesters have been able to get loans with subsidized interest rate.

To make the interest rate subsidy program more effective, the provincial branches of the Vietnamese Farmers’ Association have been urged to help farmers fulfill formalities for preferential bank loans.

Developer tees up houses

In a situation of complaints and criticism from the community about the provincial authorities’ licensing of so many golf course projects across the country, a foreign investor has been seeking permission to build “houses for rent and sale” on the land of a licensed golf course project.

Noble Assets Pte. Ltd. of Singapore has been seeking to renew the license for the Van Tri Golf Course project which has been implemented by Noble Viet Nam Ltd., a joint venture between Thai and Vietnamese companies, since mid-2003.

In a dispatch sent to the Government office dated May 19, 2009, Phi Thai Binh, deputy chairman of the Ha Noi People’s Committee, said the new developer had sought permission from the Vietnamese authorities to turn the investment license for the joint venture golf course project into a 100-per-cent foreign-invested company, adding a clause that allows the company to build houses for rent and for sale on the licensed.

Under the Foreign Investment Law, any transfer of ownership without legal capital refunding in foreign-invested enterprises must be approved by the Prime Minister.

Construction of the Van Tri Golf Course project, which is located on 128 hectares in Dong Anh District’s Kim No Commune, has encountered protests from local residents since 1995 because it eats up to 93 ha of arable land in the commune.

When land compensation was finished in 1999, construction was again delayed because Daeha Ltd. (South Korea), the first developer of the project, was seriously affected by the regional financial crisis.

In late 2004, Noble Viet Nam – the new owner of the golf course project – started construction of the Van Tri Golf Course, after providing “financial support” of VND6 million to each of 448 households affected by the project. — VNS

April 28, 2009

HA NOI — The nation’s banks have made about VND254.9 trillion (US$14.4 billion) worth of loans to date at the Government-subsidized interest rate of 4 per cent, according to the State Bank of Viet Nam.

State-owned banks and central credit unions have made the lion’s share of subsidized loans, disbursing VND187.66 trillion ($10.6 billion) under the program to inject funds into the economy and spur production and consumer spending.

Private commercial banks had made VND55.24 trillion ($3.12 billion) worth of loans under the program, while foreign-invested banks and joint venture banks have loaned another VND11.04 trillion ($623.84 million). Finance companies have been responsible for the remaining VND953 billion ($53.84 million).

In a conference held in Ha Noi last week to discuss the subsidized loan program, many commercial banks confirmed that they were quick to approve subsidized loans for eligible customers but they would not loosen lending criteria or increase risk simply to make more loans under the program.

The program was expected to inject another VND165.1 trillion ($9.33 billion) into the economy this year, for a total of VND420 trillion ($23.73 billion).

A number of banks have made great efforts to apply all idle capital toward the lending program, which might explain why the interbank rate on mid to long-term dong loans last week had nudged up by 0.4 per cent. Average overnight rates on the interbank market were 6.13 per cent while longer-term rates ranged from 7 to 8.4 per cent.

Short-term deposits have continued to account for a large portion of commercial banks’ deposit structure, with most deposits for terms of less than six months. Meanwhile, banks are attempting to ensure capital for longer-term lending through 2011.

Banks are therefore offering long-term certificates of deposits or offering promotional rates on longer-term deposits of up to 8.8 per cent per year.

Interest rates offered on three to 12-month dong deposits at State-owned banks and commercial banks last week ranged from 7.1-7.95 per cent.

Cao Si Kiem, vice chairman of the Consulting Committee for National Monetary Policy, said that banks that adjusted their rates on long-term deposits might suffer a loss in the short term but would over time ensure capital supplies to meet customer demand.
Greater transparency from the Government about the status of the economy would help depositors feel more confident about putting their money in banks, Kiem added.

Doan Van Thang, general director of Lien Viet Bank, said commercial banks should mobilize more mid- and long-term sources of capital as the demand for loans at the 4-per-cent interest rate would only increase.

The Prime Minister, back on April 4, encouraged domestic banks to raise interest rates on longer-term deposits to ensure sufficient long-term capital, Thang noted.

Lien Viet Bank, for instance, has already increased rates to 7.4 per cent for six-month deposits, 7.6 per cent for 12-month deposits, and 7.7 per cent for 36-month deposits, Thang said. — VNS