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Archive for October 10th, 2008|Daily archive page

Melamine scandal hits local farmers

In Uncategorized on October 10, 2008 at 5:02 pm

by Thu Giang

A cow farmer in Gia Lam District, Ha Noi keeps fresh milk in good condition. — VNS Photo Truong Vi

HA NOI — Waiting in front of a dairy milk agent in Phu Dong Commune in the capital city’s outlying district of Gia Lam, 45-year-old Vu Duc Dac looks dejected. The tanker that usually comes to buy his milk doesn’t seem to be coming today.

Dac is one of many dairy farmers who are increasingly waiting in vain all day and night at Vu Van Thuc’s dairy milk agent, one of three in the commune, where the farmers wait for their turn to sell milk. A drop in business started one week ago after some milk products at the Hanoimilk Company, which included milk imported from China, were discovered to contain melamine.

Domestic consumers boycotted the company’s products, forcing Hanoimilk to reduce the volume of milk they purchased from cow breeders even though local supplies are thought to be safe.

Dac has three cows which can produce 60 litres of milk per day. Now he says he is forced to throw away milk that he can’t sell as local milk agents are unable to find customers.

“I don’t know what to do at home,” says Dac. “I can’t hold back my tears when I see my wife drinking milk instead of eating rice.”

There are more than 560 households breeding 1,300 cows in the commune, of which 700 cows produce 9-9.5 tonnes of milk each day. About 300 dairy households face financial difficulties after the scandal.

Chairman of Phu Dong Cow Breeding Co-operative Hoang Trong Nguyen says Hanoimilk previously bought 5 to 6.5 tonnes of milk per day, Vinamilk bought 1.5 tonnes and the remainder was bought by International Milk Joint Stock Company.

“After Hanoimilk reported that it was going to reduce the purchase of milk, things got very difficult as we don’t know where to sell our products,” says Nguyen, adding that his co-operative had to throw away over 1 tonne of milk worth VND8 million (US$484). He asked for help from Vinamilk but its representative refused.

Director of Tien Son Milk Processing Factory To Viet Bac says her company only bought milk according to their contract. “We reported the situation of milk in Phu Dong Commune to the corporation, but it’s necessary to wait for the corporation’s plan,” says Bac.

Milk agent Thuc says he has been in touch with many processing units but only some of them have agreed to buy local milk. “Almost all units said they needed to check the quality before buying it. We can wait for them but the milk is only safe for the first three days because we lack preservation facilities.”

Bui Thi Linh, a mother of two, says her family has two cows supplying 40 litres of milk per day. She pays VND150,000 ($9) for feed including mash and grass, and earns about VND250,000 per day.

“My family’s finances are much better than several years ago when we were rice farmers. We can earn VND3 million per month from dairy milk while it was only VND750,000 for six months from rice cultivation,” says Linh.

Linh has borrowed a loan of VND17 million (over $1,000) from the bank to buy cows, with an expectation to pay back the loan by next year.

“Now we can not sell much milk but we still have to feed the cows,” she says. “If this situation lasts much longer, I will have to sell my cows for beef and find another job to earn money to pay back the bank.”


According to the Director of the Ministry of Agriculture and Rural Development’s Liverstock Breeding Department Hoang Kim Giao, the department has proposed milk processing units co-operate with breeders to survive the melamine scandal by buying all milk from local dairy farmers.

Giao confirms that milk in Phu Dong Commune is safe and has no melamine, adding that milk processing units should guide farmers in the best ways to produce safe milk.

” I think the ‘melamine storm’ is a challenge but a chance for people to be more professional in their business. The breeders will have to apply a quality breeding process, if they don’t follow it their products will be taken out of the market,” says Giao.

Chairman of Hanoimilk’s Management Board Tran Dang Tuan says his company’s situation has not improved. All his staff have had their shifts cut.

Tuan says the company still keeps buying milk for cow breeders under contract but in fact the company was in danger of bankruptcy as the value of the unsold milk had risen to about VND30 billion (US$176,000).

The company has bought fresh milk from breeders in Quang Ninh, Hung Yen, Bac Ninh and Tuyen Quang provinces and Ba Vi Commune in former Ha Tay Province and Phu Dong Commune in Ha Noi, the last being one of areas to suffer the most from the melamine scandal.

“If customers come back to our products, we will continue developing our business with Phu Dong Commune, which has a climate suitable for cows,” says Tuan.

Relevant sectors have tried to help breeders overcome the difficulties, which many were not ready for. The breeders are now the most vulnerable, as they are unable to publicise the safety of their products while relevant sectors have not built an adequate and timely information network to properly deal with the melamine scandal. —

Viet Nam seeks world help with avian-flu vaccination

In Uncategorized on October 10, 2008 at 5:02 pm

HA NOI — Chairman of the National Steering Committee on Avian Influenza Control and Prevention Cao Duc Phat yesterday called for further assistance from the international community to help Viet Nam vaccinate poultry vulnerable to avian flu, at a meeting in Ha Noi.

“Viet Nam is facing challenges controlling avian flu, including the need to find a way to successful move beyond subsidised vaccination of poultry, which is very costly and requires the mobilisation of tens of thousands of people for each campaign,” said Phat.

The annual meeting aims to review efforts to better control the avian and human influenza pandemic in Viet Nam.

In September 2008, Viet Nam started large-scale vaccination operations throughout the country under the National Programme of Avian Influenza Control and Eradication, the programme administered about 750 million doses of H5N1 (avian influenza) vaccine from 2007–2008. About 365 million doses of H5N1 vaccine were administered between 2005-2006.

“It is timely for us to come together now, to take stock of the current situation, mobilise resources and work on key issues as we move forward together to consolidate control of the virus,” said the minister.

“While we can say that the virus is basically under control, after five years of great effort we are still experiencing sporadic outbreaks in poultry, as well as five human cases in the first two months of this year. This underlines the great difficulty in bringing this virus under control in the current context,” he warned.

“We need to strengthen our efforts to re-organise national poultry production, moving towards enhanced bio-security and more scientific and industrialised approaches, without forgetting the importance of poultry production to many poor households nation-wide,” the minister added.

The partnership on avian and human influenza control was established through the signing of a partnership framework in November 2006 between Viet Nam and the UN, donors and NGOs. The purpose of the Partnership is to facilitate implementation of Viet Nam’s integrated operational programme for avian and human influenza, also known as the Green Book.

Speaking at the meeting UN Resident Co-ordinator John Hendra stressed that avian influenza is present not only here, but in a number of other countries, and therefore the need to control the virus in poultry and prepare for a possible human pandemic still remains.

He recommended donors consider supporting vaccination campaigns, develop an action plan to contain a possible human pandemic, and strengthen the capacity of the National Steering Committee.

Hendra also confirmed UN commitments to supporting the implementation of the Green Book Programme.

The Green Book, adopted by the Government and international donors in mid-2006, sets out an integrated programme for the 2006-2010 period with an estimated cost of US$250 million, of which $31.2 million will be spent on co-ordination activities, $116.4 million is set aside for the agricultural sector and $102.4 million for the health sector.

To date donors have committed $201.7 million to support Viet Nam’s response to avian influenza and pandemic preparedness, according to statistics by the committee. —

PetroVietnam reports record $13.5b revenue

In Uncategorized on October 10, 2008 at 5:00 pm

HA NOI — The National Oil and Gas Group (PetroVietnam) earned record revenue of VND223 trillion (US$13.5 billion) in the first nine months of this year, up 56 per cent on the same period last year, the group reported yesterday.

Of that sum, more than $9 billion came from crude oil exports, which amounted to 10.4 million tonnes.

Phan Thi Hoa, a member of PetroVietnam’s management board, attributed the company’s record turnover to the skyrocketing global oil price.

“The oil export price averaged $872 per tonne or $116 per barrel in the first three quarters [of this year],” she said, adding that she expects the oil price to average $675 per tonne or $90 per barrel in the last quarter of the year.

So far this year, the group and its local and international partners have signed nine contracts to exploit oil and gas both here and abroad.

Notably, the group began exploiting oil and gas in four new fields – Ca Ngu Vang (Golden Tuna), Su Tu Vang (Golden Lion), Phuong Dong and Bunga Orkid.

In addition, Hoa said the group was looking to exploit oil and gas in Venezuela and Russia this year.

PetroVietnam is expecting to notch up record revenue of VND316.4 trillion ($19.2 billion) this year.

“If the group achieves this figure it would be the first time its turnover has surpassed the VND300 trillion mark,” said PetroVietnam deputy director general Le Minh Hong.

Hong estimated that the group would pay VND113 trillion in tax this year. —

Lower petrol prices ease market fall

In Uncategorized on October 10, 2008 at 4:59 pm

Local stock indices kept falling as uncertainty in world financial markets continued. — VNS Photo Viet Thanh

HA NOI — Lower domestic petrol prices helped to slightly diminish the fall of local stock indices yesterday, as no signs of improvement were seen in the global financial market arena.

The retail price of A92 petrol was slashed by VND500 (3 US cents) per litre nation-wide by the Ministry of Finance yesterday to VND16,500.

The VN-Index slipped another 12.91 points or 3.12 per cent to close at 401.33. Liquidity improved, however, as trading volume increased 46.5 per cent to reach 14.65 million shares, with a total turnover of VND432.7 billion (US$26.2 million).

The HCM City Stock Exchange witnessed 127 losers yesterday, with most of them hitting the floor of the trading band. As many as 24 gained, while 13 remained unchanged.

Orders for Sacombank (STB), the most active code during the day, was 4.17 million shares, 2.5 times higher than Tuesday’s figure. This was followed by Phu My Fertilisers (DPM) with 1 million shares traded and Hoa Phat Group (HPG) with 515,000 units.

Foreign clients yesterday bought 1.6 million shares and unloaded 2.68 million units, with a net sales value of VND43.68 billion ($2.65 million).

The Ha Noi Securities Trading Centre meanwhile saw 128 losers and 18 winners.

The HASTC-Index closed 7.45 points lower, 5.52 per cent, to end at 127.53. Trading volume rose 43 per cent to more than 10 million shares for a total revenue of VND318.46 billion ($19.3 million).

Asia Commercial Bank (ACB) showed the most action on the northern market with 1.38 million shares changing hands. Petroleum Technical Services Corp (PVS) was next with about 812,000 shares traded, followed by Vinaconex Corp (VCG) with 560,000 units.

The domestic market would continue to see a downward trend following the US market moves, said Hoang Thi Hoa, director of Viet Capital Securities’ Research and Analysis Department.

“The market may determine a clearer trend at the end of this month when companies finish releasing their third quarter business results and some macro-level indexes are announced,” she said.

In the next few months, information that might influence the local exchange would be the possibility of [another] petrol price adjustment, the banking system’s credit growth and lower lending interest rates, said Hoa.

“The market enters the fourth quarter with great concern, because the domestic economy depends largely on export; the world economy is forecast to face more difficulties with the US financial crisis,” said Hoang Thach Lan, director of SME Securities’ Securities Investment Analysis.

Lan said the local market was feeling indirect impacts of the global recession through difficulties weighing down enterprises.

SME Securities data shows about 30 out of 160 companies listed on the HCM City Stock Exchange had cumulative turnovers for four quarters (from the third quarter of 2007 to the second quarter of 2008) shrink compared with the same period in 2006-2007.

Lending rates were still high, which would expand companies’ costs and diminish their profits between now and the end of the year, said Lan.

“However, the market may rebound at the end of the year as the prices of big stocks are getting attractive,” he said. —

Viet Nam seeks markets in the Middle East

In Uncategorized on October 10, 2008 at 4:58 pm

Viet Nam seeks markets in the Middle East

Domestic businesses are urged to tap more export opportunities in markets in the Middle East, which are emerging as potential outlets for Vietnamese products. Viet Nam News reporter Thu Tra spoke to Nguyen Cong Hien, deputy head of the Industry and Trade Ministry’s South West Asia and Africa Department about trade ties between Viet Nam and the Middle East in the past few years and ways to help local firms boost their exports to the markets.

Could you assess trade relations between Viet Nam and the Middle East in recent years?

Trade ties between Viet Nam and the Middle East have demonstrated a significant growth rate in the past few years, topping US$1.19 billion in 2007. Of the sum, $700 million came from Vietnamese exports, marking a year on year increase of 17.2 per cent.

Last year, the country also imported $400 million worth of products from the Middle East, mainly petroleum, petrochemicals, fertilisers, chemicals, and steel and plastic products.

Viet Nam’s key export items to the Middle East include rice, coffee, textiles and garments, computer and electronic components, footwear, seafood, rubber, coal, tea and wooden furniture.

Besides the United Arab Emirates (UAE), Vietnamese products are also shipped to Turkey, Israel and Saudi Arabia. In the Middle East, Viet Nam has seen a shift from a trade deficit to a trade surplus and the UAE and Turkey are now Viet Nam’s leading export markets in the Middle East. In 2007, Viet Nam’s exports to the UAE amounted to $233 million, and $202 million to Turkey.

I think, these results are attributed to increasing efforts from Vietnamese companies in seeking trade partners, diversifying their selling methods and effective support from the Government and relevant agencies. Local firms have taken the initiative in exploring export opportunities in these markets as well as participating in trade fairs and exhibitions to better advertise their products and find ways to promote exports to the markets.

Viet Nam’s exports to the markets are expected to increase by 25-30 per cent this year.

What are the advantages under which Vietnamese companies can export to the Middle East?

Viet Nam has established good political and economic relations with countries in the Middle East. Many bilateral agreements and protocols were inked, creating legal foundations to promote bilateral co-operative activities such as trade agreements, agreements on science, technology and economic co-operation and agreements on maritime transport. This encourages Vietnamese companies to seek partners and diversify sales in the Middle East.

Viet Nam has already established trade offices in Dubai, Iran, Turkey, Kuwait and Iraq.

Under national trade promotion programmes, the Ministry of Industry and Trade, the Ministry of Agriculture and Rural Development and different business associations have brought many Vietnamese companies to the Middle East to examine the situation and attend fairs and meetings. Furthermore, businesses from the Middle East have paid increasing attention to enhancing co-operation in trade and investment with Vietnamese firms.

The Vietnamese Government regards 2008 as the year to increase co-operation with the Middle East and a number of activities will take place this year to approach this goal. As scheduled, later this year Vietnamese Prime Minister Nguyen Tan Dung will visit the UAE, Saudi Arabia and Kuwait. Vietnamese companies will accompany the Prime Minister on his trip to increase trade relations with foreign partners in the Middle East.

What difficulties might Vietnamese firms face while exporting goods to the Middle East?

Despite existing potential, there are still risks that Vietnamese companies may have to face while doing business in the Middle East. These are mainly due to the region’s latent political and security instability. Thus local firms must make quick yet careful decisions on a case by case basis.

Lack of information about market demand, business practices, the taste of customers, law systems, custom regulations, distribution channels as well as trade barriers also present challenges to our businesses.

In addition, due to the region’s low import taxes of 0-4 per cent, Vietnamese firms have to face with harsh competition from foreign rivals.

What should local businesses do to boost their exports to the Middle East?

The demand for goods in the Middle East are diverse ranging from high to mid-quality products; huge export opportunities are awaiting Vietnamese enterprises in these markets. The most important thing is that local enterprises need to ensure the product quality matches their commitments in signed contracts. And they must deliver the goods on time.

Domestic firms also need to study the region’s business customs and customers’ tastes carefully if they wish to successfully penetrate the market.

Which business fields are of greatest importance in the Middle East?

The Middle East sits atop the largest reserves of oil in the world so Viet Nam should be active in this region in the oil and gas field. In addition, there are other areas in which Viet Nam has advantages. Products such as footwear, textiles and garments, tobacco, processed food, and mechanical equipment can be very much in demand. —

Monthly car sales slump to two-year low

In Uncategorized on October 10, 2008 at 4:57 pm

HA NOI — The auto market last month saw the lowest sales volumes seen in two years, reported the Viet Nam Automobile Manufacturers Association (VAMA).

Seventeen leading auto makers in the country sold 5,180 vehicles last month, down 33 per cent over the same period last year and 2,629 vehicles less than in August, it said.

According to the association, only Toyota had sales of more than 1,000 units last month. Six months ago, five companies reached that number.

The passenger-car segment led the figures down in September, with a 49 per cent decline year-on-year to 1,137 units, the lowest level since May 2007.

Sport Utility Vehicle and Multi Purpose Vehicle (SUV/MPV) saw a 28 per cent decline year-on-year to 1,130 units, the worst figures since April 2006.

Commercial vehicle sales also saw a 25 per cent decline year-on-year to 2,913 units.

“Severe economic recession and galloping inflation has impacted customers and negatively affected the auto market,” said a representative from GM-Daewoo in Ha Noi.

In company rankings, Toyota topped the list with 1,226 units sold last month, followed by bus and truck maker Vinamotor with 771 units, GM-Daewoo brand Vidamco with 601 units and Truong Hai with 566 units.

Car ownership remains limited to the elite and emerging upper classes in Viet Nam. The country has more than 900,000 privately-owned cars and 21 million motorbikes.

According to the Ministry of Industry and Trade, Viet Nam has more than 40 auto makers and more than 100 auto-part makers with a total capacity of more than 200,000 units per year. —

Germany may become VN’s biggest EU trading partner

In Uncategorized on October 10, 2008 at 4:57 pm

HCM CITY — Germany and Viet Nam have strengthened co-operation in various fields, ranging from trade and investment to economic aid over the last decade or so.

Germany is set to become Viet Nam’s biggest trading partner in Europe, with bilateral trade expected to top US$3.5 billion in 2008, a threefold increase since 2000.

Vietnamese exports will be worth $2 billion and imports $1.5 billion.

Germany has been a fairly large investor in the Vietnamese economy. Its investment this year of $53.9 million takes its total investments to $607 million for sixth place in the list of European investors.

German equipment and technologies have significantly helped Viet Nam develop its thermal power, textile and garment, and footwear industries, according to investment officials. And it has also been one of the major aid donors to Viet Nam over the last 15 years. In 2006-07 it gave $120 million in development aid. And it is considering aid of $100 million next year.

During Prime Minister Nguyen Tan Dung’s trip to Germany last March, the two sides signed an agreement for the building of an urban rail system in HCM City.

Businesses from the two countries have signed other agreements and economic deals worth more than $5 billion.

Earlier this week a team of 40 German business executives visited Viet Nam to seek investment opportunities in Viet Nam. They also inquired into the progress made on the HCM City subway project. The German Government has agreed to provide 350 million euros ($476 million) for the project, including 85 million euro in outright grants.

The visitors said they wanted Viet Nam to develop a solid legal system and highly-trained workforce to reassure them about long-term investments.

Minister of Planning and Investment Vo Hong Phuc said he wanted Germany to invest in and promote co-operation with Viet Nam, especially with small-and medium-sized enterprises to help them develop. —