Policymakers to ensure State firms contribute fully

HA NOI — Policy-makers and economists yesterday gathered to discuss a draft of the new regulations managing the establishment and operation of State-owned economic groups as well as how to supervise them to ensure they contribute fully to the entire economy.

The regulations, proposed by the Central Institute for Economic Management (CIEM), are designed to deal with certain economic groups/corporations that have expanded to sectors unrelated to their major businesses, sometimes putting the entire enterprise at risk.

According to the draft , a State economic group is comprised of state corporations, or State owned parent-subsidiary companies.

Every State economic group has a major business sector, decided by the company with the largest controlling stock. If they plan to expand to other related sectors, they must meet some certain requirements.

Firstly, the related business must not affect the performance and development of the core business; and secondly, revenue from related businesses must be re-invested in the core business.

If the parent company (of an economic group) directly or indirectly via another company, in which the parent company hold the ruling stake, invests in sectors risky to core business performance, the parent company must get the Prime Minister’s approval.

CIEM proposed a 21-sector list for major economic groups: telecommunication, information and technology, post communication, shipbuilding, textile and garment, electricity, oil and gas, coal and mineral, rubber, coffee and cacao, financial and insurance services, petrol and oil services, food, aviation, maritime transportation, cement, tobacco and cigars, paper and pulp, fertiliser and chemicals, and state capital investment.

Tran Tien Cuong, head of Enterprises Renewal and Development Research Board under CIEM said that these major sectors were determined based on the importance and contribution of these business to the economy.

“These sectors must be able to lure and to support the development of other businesses,” said Cuong.

In terms of administration, groups are allowed to decide for themselves: the State has no general administration system for all enterprises belonging to the group.

In another development, if a parent-subsidiary corporation or state corporation plans to shift into the business model of an economic group, they must run one of the 21 major businesses, and have the potential ability for development.

The parents company [of a parent and subsidiary corporation or state corporation] must have at least VND7 trillion (US$425.53 million) of state owned equity, be equipped with a sufficient and experienced staff, and have a strong financial capability to run the major business and other related businesses.

Furthermore, the parent company must be wholly stated-owned and set up under the model of one member limited liability, over two member limited liability, joint stock or state company.

CIEM, economists and existing economic groups also discussed other issues including administration, monitoring, reporting and the responsibility of economic groups.

The proposal is to be submitted to the National Assembly Standing Committee next month. —

Local catfish lovers up profits

Customers buy catfish at a Metro supermarket in Ha Noi. Catfish products have made a significant contribution to the 35 per cent growth in sales of frozen and processed foods in local markets. — VNA/VNS Photo Huu Oai

HCM CITY — Breeders and processors of basa and tra catfish are increasingly looking to the domestic market to raise profits, industry officials have said.

The fish, which is exported in large quantities, is especially popular in HCM City, the provinces in the Cuu Long (Mekong River) Delta and in the southeast, Tran Thi Thuyen, a catfish trader in An Giang province’s Chau Phu District, said.

Nguyen Van De, owner of a catfish shop at the Binh Dien Market in HCM City, said that sales had reached 1,000 tonnes per day.

At the Phu Nhuan market in HCM City, sales of whole catfish are the most popular.

Since July the fish has been sold at fresh food stalls in indoor supermarkets. Sliced basa catfish is now selling for VND20.500 (US$ 1.2) per kilogramme.

Nguyen Ngoc Hoa, general director of the Sai Gon Co-op chain, said 50 kinds of catfish products were sold at his supermarkets.

A representative of Maximark supermarket said that purchases of frozen and processed foods had increased about 35 per cent against last month. Processed basa catfish products had made a significant contribution.

The An Giang Fisheries Import and Export (Agifish) is a pioneer in selling basa catfish products in the local market.

Agifish deputy general director Huynh Thi Thanh Nga said the company’s distribution network comprised 200 agents responsible for supplying products to supermarkets, restaurants and school canteens nationwide.

The company’s turnover from the local domestic market last year was VND90 billion ($5.4 million). It now stands at VND 70 billion ($4.2 million) for the first half of this year, an increase of 53 per cent over the same period last year.

Catfish processing companies decided to upgrade their cold storage and reorganise their distribution networks to increase their sales in both urban and rural areas. —

Price of steel, cooking gas, fertiliser drops

HCM CITY — The fall of global prices of steel, gas and fertiliser has caused a drop in local prices, industry officials have said.

According to steel production companies, the price of steel ingots on the global market have fallen to US$960 per tonne from $1,100-1,200 per tonne.

Several HCM City-based steel producers have cut their prices by VND2 million per tonne to VND17.33-18.5 million per tonne for steel bars and to VND17.63-19.5 million per tonne for rolled steel.

Nguyen Tien Nghi, deputy chairman of Viet Nam Steel Association, said steel prices in the northern market are currently VND1 million lower than in the south.

He said if steel producers in the south did not adjust their prices, steel from the north would pour into the south.

Nguyen Hac Thuy, deputy chairman of Viet Nam Fertiliser Association, said global prices on fertiliser have dropped, with the price of urea and diamonium phosphate (DAP) fertilisers falling respectively by $20 per tonne to $790-830 per tonne and by $30 per tonne to $1,170 per tonne, compared to last month.

Fertiliser prices have fallen in the Mekong Delta. Chinese Urea fertiliser has dropped by VND200 per kilo to VND9,400 per kilo, and Korean and Chinese DAP fertilisers have dipped by VND1,000 per kilo to VND20,100 per kilo and by VND2,000 per kilo to VND18,000, respectively.

According to fertiliser dealers, fertiliser prices will continue to fall because of reduced demand and abundant supply.

Lai Duc Nam, director of Viet Nam Petronas Ltd Company, said gas prices in the world market had fallen in recent weeks and currently stood at $843 per tonne.

Several gas production companies plan to cut prices by VND5,000-6,000 for each 12-kilo canister at the end of this month.

According to gas agents, gas prices fell by VND6,000-12,000 for each 12-kilo canister but sales remained sluggish, with a drop of 30-35 per cent compared to last year. —

Garment makers hit record sales

Workers at Dinh Quan Garment Co in southern Dong Nai Province make clothes for export. The garment sector earned around US$5.1 billion in the first seven months of this year. — VNA/VNS Photo Van Khanh

HA NOI — Viet Nam earned around US$930 million from garment exports in July, bringing exports in the first seven months of the year to a record $5.1 billion – up 20.5 per cent on the same period last year.

Le Quoc An, chairman of the Viet Nam Textile and Apparel Association (Vitas), said: “This point in time [from July to September] is regarded as ‘the harvest time’ for the apparel sector”.

“On the back of impressive figures in July, in addition to the positive outlook for the next two months, it is possible for the industry to reap $9.5 billion in export revenue by the end of the year, as set earlier.”

However, he said the industry would have to cope with a number of difficulties, such as high inflation, high interest rates on commercial loans, expensive raw materials, strikes and resignations, among other factors.

In addition, he said the sector was overly dependent on major markets such as the US (holding 55 per cent market share), the EU (17 per cent) and Japan (8 per cent), and that it was therefore vulnerable to unexpected market volatility.

To offset the risk, industry experts recommend that exporters look to other markets such as the Middle East and South Africa.

Vitas also advised garment makers not to ignore regional markets such as South Korea, Singapore and Taiwan.

An said he had witnessed “made-in-Viet Nam clothing” being sold regionally. “Although the volume of our products in these markets remains modest, in the face of current impediments, garment makers should try to gain more from minor markets [if it wants to reach its] $95 billion target,” he said. —

Local stock market makes a comeback

HA NOI — The stock market marked five consecutive days in the green, with increases dominating electronic boards at both bourses yesterday.

The HCM City Stock Exchange’s benchmark VN-index rose 5.09 points or 1.12 per cent to close at 459.89 points with purchases outnumbering sales.

The bourse witnessed over 21.9 million shares changing hands at a total turnover of VND791.6 billion (US$48 million). As many as 138 codes gained, 10 lost and 12 remained unchanged.

A big rise was seen for Hau Giang Phamarceuticals (DHG) at VND3,000, to end at VND136,000 per share. Binh Dinh Minerals (BMC) rose VND3,000 to close at VND108,000; PV Drilling (PVD) was up VND2,000 to stand at VND101,000; and FPT increased VND2,000 to close at VND74,000.

Some stocks were not so lucky, with drops for IMP of Imexpharm Pharmaceutical, ITA of Tan Tao Industrial Development Corporation and VNS of Vinashun.

STB of Sacombank was the most active share with 3.48 million shares changing hands. The code was followed closely by Phu My Fertiliser of DPM at 3.18 million, SAM of Sacom with 1.17 million shares and HPG of Hoa Phat group at 1.14 million shares traded.

Meanwhile, BBT of Bach Tuyet Cotton Corporation slipped 0.1 points to stand at VND6,000 per share, marking its 17th consecutive losing trading session. Until now, the corporation has not addressed financial difficulties.

Gia Dinh Textile Garment, who owns 30 per cent of BBT’s stake, asked the corporation to independently audit its finance status before approving plans to issue additional share to raise charter capital.

In Ha Noi, the HASTC-Index rose 2.52 points to close at 139.54. This is the third consecutive increase of the HASTC-Index.

The northern bourse saw 12 million shares changing hands with a total turnover of VND416.8 billion.

Of the total 146 listed shares, 135 were up, nine were down and two were inactive. VSP of Vinashin saw the highest increase at VND5,100 to end at VND133,300 and DTC of Dong Trieu Viglacera was up VND3,700 to end at VND98,500.

Doan Duc Vinh of Au Viet Securities said that the VN-index could exceed over 480 points this month as it did in July. He attributed the increase to the fresh fall in crude oil prices and a sharp reduction in gold prices, prompting investors to turn their interest to the rallying stock market.

Quang Minh, an investor with APEC Securities, said the market was also supported by a cut in lending interest rates by commercial banks, and the Government’s efforts to control inflation. In addition, the prices of cement, fertiliser and steel are going down. All these factors were good news for the stock market.

Local gold prices in Ha Noi early yesterday suddenly lowered to less than VND17 million per tael (equivalent to 1.2 ounces). As a result, investors have rushed to gold shops to buy as much as possible. Late in the afternoon, gold prices increased to over VND17.2 million per tael on high demand from local customers.

Pham Hoang Lan of Ha Noi Jewellery Shop said her company has enough gold to meet customer demand. On the global market, the price of gold was down to US$803 per ounce yesterday. —