Farmers in roadblocks to reach subsidized credit

A farmer harvests shrimp in his farm in Nam Can District in the Mekong Delta province of Ca Mau. Farmers have difficult access to government-subsidized loans designed to stimulate the slowing economy - Photo: TTXVN Tran Van Tao, a shrimp farmer in My Tu District in Soc Trang Province, was a lucky borrower of the local Bank for Agriculture and Rural Development (Agribank) right at the moment the Government’s subsidized lending policy took effect under the second stimulus package. Tao easily completed procedures for the credit at Agribank Soc Trang as he has paid old debts and is a prestigious customer of the bank.
However, other farmers are not as fortune as Tao. Besides small and medium enterprises, farmers are facing obstacles to the subsidized lending program due to many requirements of credit institutions.
Commercial banks in Soc Trang Province through last month loaned over VND2.8 trillion to over 1,000 enterprises, farmers, farm owners and individuals, according to a report of the provincial authorities. The largest disbursement was recorded at Agribank Soc Trang at some VND1 trillion while the local Bank for Investment and Development offered the second largest disbursement of over VND200 billion.
Though only just over 700 local farmers have accessed subsidized loans to date, Soc Trang Province is still seen to have the fastest disbursement rate among localities in the Mekong Delta and nationwide. However, the sum is too modest to serve a province rich in agricultural potential with 40,000 hectares of shrimp farming area and thousands of salt farming families. Farmer Tao is actually a rare circumstance in the province to enjoy the subsidized interest rate.
Like any enterprise, farmers at first are asked to pay old debts before asking for new credits at any commercial bank. Therefore, statistics of the Department of Agriculture and Rural Development in Dong Thap Province show that only 40% of households have settled all old debts and can meet the first requirement of banks. Meanwhile, borrowers who really need money due to last year’s losses or failed crops are rejected by creditors.
If the debts are rescheduled following the Government’s loan extension program, farmers then are asked to submit a qualified production or business plan, says Duong Quoc Nghia, chairman of the provincial Aquaculture Association. Such a requirement is certainly not simple as farmers have to indicate buyers of their products, selling places and underwrite contracts with enterprises.
Many fish farmers in the Mekong Delta say that they have paid old debts at banks but failed to make a business plan because fish farms are required to have certificates from local authorities and trading contracts with enterprises. In fact, only some provinces have expanded the regulation on certificates to local farmers as the Ministry of Agriculture and Rural Development issued the regulation last year.
Just one or two out of every ten farmers in An Giang Province can sign a contract with enterprises, says an official of the provincial agricultural department. However, enterprises on the contracts only promise to buy fish at market prices after harvest due to disputes with farmers and among farmers themselves while commercial banks always ask farmers to list buying prices of enterprises.
The requirement on underwriting contracts is really a big challenge for farmers. An example is a fish breeder in the province who failed to get a subsidized loan because he could not say who would buy his young fish after harvest.
In addition, creditors ask farmers to submit input material purchasing receipts while the farmers are quite used to a “no-receipt” trading habit. Others cannot even get a receipt as they do not buy materials from companies but from individuals.
The Government’s subsidized interest rate policy took effect on February 1 but by that time many farmers had already secured loans without the benefit of the subsidized interest in order to prepare for the winter-spring crop in early 2009. As a result, they may have to sell their products early to re-pay the loans and follow other procedures for subsidized credits. And of course, both farmers and banks will have to spend more time and effort for the job.
Concerning complicated procedures that prevent farmers from reaching subsidized interest, the State Bank of Vietnam early this month sent a document to credit institutions outlining a simplification of the process that will help farmers who lack receipts for their input material purchases.
The Saigon Times Daily

3G technology seen usher in new telecom era

Visitors are experiencing a mobile phone compatible with 3G technology at the 12th Vietnam Telecomp-Electronics 2008 - Photo: Kien Nam Nguyen Lan Thanh, a logistic manager of Bluescope Steel Factory in Ba Ria Vung Tau Province who is very busy with customers’ relations, feels sorry when she has just bought a new mobile phone of the make Nokia Supernova 7610 at VND4.2 million. Though the new phone is of good quality with all functions, she says, the handheld device will not allow for 3G communications when the new technology is introduced.
Thanh’s regret is understandable, as she had acquired the new cell phone just days before four telecom providers obtained the third-generation network (3G) licenses last week. The early winners are the military-run Viettel, MobiFone and VinaPhone under the Vietnam Post and Communication Group and the consortium between EVN Telecom and Hanoi Telecom.
“With the new mobile phone, I still can solve my job quickly with various functions on the device. However, the mobile phone cannot match with the 3G technology which can offer various added values,” Thanh says.
“It means that I should buy a new one which can accommodate 3G technology that will be deployed soon,” she explains, adding that “I’m eagerly looking for the time when 3G technology is available to use new value-added services such as videophone, on-line video streaming and high-speed internet.”
Thanh is not the only person eager with the 3G technology, which now is becoming a very hot topic around the country when mobile users, telecom providers, industry insiders and the Government are waiting for what 3G brings about.
Industry insiders say the most precious advantage of 3G is that it makes the telecom infrastructure more comprehensive via wide broadband, enable the digital content industry to develop, and help narrow the digital gaps between rural and urban areas.
“Thus, 3G means it enhances Vietnam’s competitive index in terms of telecommunications compared to other countries in the region,” says Le Nam Thang, deputy minister of Information and Communication.
Strong commitment
The four mobile carriers that have just obtained the 3G licenses has committed to quickly introduce the technology into the market. They have pledged to invest nearly US$2 billion for 3G technology deployment within the first three years.
Under the ministry’s requirement, the winners will have three months to make deposits and prepare finance to carry out their commitments. After that, the ministry will formally grant licenses for 3G network establishment with a term of 15 years. The total deposits alone by the four telcos is estimated at VND8.1 trillion, or over US$450 million.
The 3G licenses are granted according to the International Mobile Telecommunications-2000 (IMT-2000) standard and 1900-2200 MHZ frequency. It is the global standard for third-generation (3G) wireless communications, defined by a set of interdependent International Telecom Union’s recommendations.
IMT-2000 provides a framework for worldwide wireless access by linking the diverse systems of terrestrial and/or satellite-based networks. It will exploit the potential synergy between digital mobile telecommunications technologies and systems for fixed and mobile wireless access systems.
Hoang Son, director of Viettel Telecom, confidently says Viettel will officially launch 3G services within the next nine months which can cover 86.5% of the country’s total population with 5.000 base transceiver stations (BTS).
“We commit to invest US$800 million in the first three years. In our long-term plan, Viettel will spend US$1.5-1.8 billion within 15 years. In addition, 16,000 current BTS will be upgraded for the 3G technology,” Son says.
According to Son, Viettel applies High Speed Packer Access which allows the Internet speed rate at 2Mbps.Meanwhile, other competitors like MobiFone also commits to supply 3G coverage at 100% of the population in 63 cities and provinces nationwide in the first three months upon the receipt of the 3G license last week.
A representative of MobiFone explains that MobiFone will upgrade its current 2G infrastructure for accommodating the 3G technology. It will help clients to approach 3G service in a short term and save expenditure, he says.
Similarly, the consortium between EVN Telecom and Hanoi Telecom has made a strong commitment when Dinh The Phuc, director of EVN Telecom says that the two parties involved have plans to invest VND6 trillion in the first three years of 3G deployment.
Phuc reveals that his company has inked many deals with digital content suppliers, and digital content service is expected to account for 5-6% of their 3G service revenue in the coming years.
According to Phuc, digital content service now is taking a small piece in EVN Telecom’s turnover. With the 3G license, Phuc hopes it can generate more profits to EVN and Hanoi telecoms as well as to enhance their competitiveness.
Mobile carriers optimistically say that in the next three years the number of mobile users will increase from 50% of the population to some 80% in the next couple of years and to 100% in the next 15 years.
Rocky road ahead
Although 3G mobile carriers pin big hopes on 3G, many customers and experts express their suspicions about the benefits of the new technology.
Despite eagerness with the 3G technology, Thanh of Bluescope Steel still shows her worry about the high cost of service and expensive equipment.
She says that the mobile service charge will likely be more expensive than before because the 3G service offers various added values. Additionally, she is also worried about the high price of handheld devices compatible with the new technology.
However, in a talk about 3G service with Tuoi Tre, deputy minister Le Nam Thang says it is likely that the 3G charge will not be higher than the current 2G technology fee because telecom providers will save on the investment cost by upgrading their 2G infrastructures.
According to Thang, a price war may emerge soon among 3G telecom providers to lure customers for 3G development, and therefore, the charges will be competitive.
Pham Tien Thinh, who is a former strategy and business development director of Qualcomm in Pacific Ocean and South East Asia region, says on Thoi bao Vi tinh Sai Gon, an edition of Saigon Times Group, that 3G development in rural areas will not be easy because poor rural people’s demands are mainly limited to telephony services. The 3G deployment in the countryside will be slower than expected because residents have poor awareness about what 3G could bring.
“They prefer to use mobile phone for calling rather than surfing the Internet, downloading music or video,” Thinh explains.
The Saigon Times Daily

De Nhat Hotel reaches high revenue in 2008

HCMC – The four-star De Nhat (First) Hotel in HCMC has maintained 22% annual growth over the last five years and reached nearly VND167 billion in revenue last year, said hotel director Huynh Van Phat.
Last year’s profit was twice 2004’s profit. The hotel targets VND184 billion in revenue this year and to contribute to its parent company, Saigontourist Holding Co., around VND200 billion till 2010, Phat added.
De Nhat Hotel was constructed in 1969 and launched into operation one year later. The hotel, after several renovations, has 108 rooms, five meeting halls, four restaurants with 2,000 seats, a video game club, business centers and tennis courts.
The hotel has applied ISO 14001 environmental management standards since 2003 and received the ASEAN Green Hotel prize in 2007 for achievements in natural resources, energy and environment protection. This year, De Nhat plans to upgrade its infrastructure and develop its cuisine and wedding services.
De Nhat Hotel was awarded a 2nd class Labor Medal by the State President on Wednesday. Phat also received 3rd class Labor Medal.

Delta Air Lines debuts in Vietnam

HCMC - Delta Air Lines has marked its official entry into Vietnam’s growing aviation market via the opening last week of an office in HCMC.
The Vietnam office is part of Delta’s preparations for launching daily service to and from HCMC on June 1 this year in a strategy for expansion in Asia.
Establishing an office in Vietnam will enable the airline to provide first-hand service to originating passengers connecting through Tokyo to the U.S., said Brian Swain, managing director of Delta Air Lines in Asia.
Swain told reporters in HCMC last Friday that he believed the service to HCMC would make profit for Delta in the very challenging times for global airlines, which are forecast to lose US$4.7 billion this year. He said Delta expected business growth in certain markets despite the global economic recession.
“Even when we are shrinking, we are still able to grow in certain destinations such as some European markets, African market and Asia Pacific including HCMC…,” Swain said. He added Delta decided to fly to HCMC after carefully considering the current situation and expectations for future.
General Statistic Office’s figures showed American visitors to Vietnam in the first quarter of this year grew 17.2% year-on-year to nearly 121,000, though the international financial crisis had dealt a blow to consumers stateside.
The U.S. was among the few markets from which Vietnam attracted more visitors in the January-March period, when Vietnam welcomed less than one million international tourists, down 16.1% year-on-year.
Vietnam was an emerging market in Southeast Asia and an attractive destination for the U.S. travelers, said Sarathool Monthienvichienchai, general manager of Northwest Airlines – a wholly-owned subsidiary of Delta for Thailand, Vietnam and Nepal.
Swain told the Daily at the press conference that Delta’s plan to fly to HCMC was proceeding as scheduled. “Now is the right time for us to commence service to HCMC,” he said, referring to the aforesaid factors.
Swain said bookings for Delta’s flights were now available at the Vietnam office as well as the website of Delta and Northwest. He said fares for the service were “very competitive” but declined to give details.
As scheduled, Northwest’s inaugural flight will arrive at Tan Son Nhat International Airport at 11:10 p.m. on June 1 and depart at 6:15 a.m. on the next day.
Northwest will use Boeing 757-200s for the service between HCMC and the U.S. via Japan’s Narita International Airport.
Sarathool said guests from Northwest aircraft would board connecting flights in Tokyo to such U.S. gateways as Los Angeles, Atlanta, Minneapolis-St. Paul, Detroit, Portland, Seattle and San Francisco.
Sarathool said passengers would be able to make easy connection to and from the U.S. gateways. Northwest has not been granted the fifth freedom to transport passengers on the HCMC-Tokyo sector, he said.
Vo Huy Cuong, director of the Air Transport Department of the Civil Aviation Administration of Vietnam, said Tokyo would be a technical stop for Northwest, where this carrier will not let the passengers departing from HCMC leave, as well as pick up more passengers there.
Swain said Delta’s ability to take and disembark passengers in Tokyo would depend on negotiations between government agencies of the U.S. and Vietnam. Despite this, he is pinning high hopes on the upcoming service, especially when the world’s economy recovered given the airline’s advantage of having wide network coverage worldwide.
Delta, its Northwest subsidiary and Delta Connection carriers currently operate service from hubs in the U.S. and Tokyo to 379 destinations in 66 markets, and serve more than 170 million passengers each year. Delta’s marketing alliances allow customers to earn and redeem on over 16,000 daily flights offered by SkyTeam and other partners.
Pham Van Hien, chairman and CEO of East Sea Travel and Air Service Co., Delta’s sales representative in Vietnam, said passengers from Hanoi would be able to fly with Delta to the U.S. and beyond through its code-share services with SkyTeam members.

Vinalines to expand to ship repair operations

HCMC – State-owned Vietnam National Shipping Lines (Vinalines), the nation’s leading shipping and seaport operating firm, will expand its operations to ship repair services.
Its subsidiary North Sea Transportation Company (Nosco) will develop a ship repair facility in the northern province of Quang Ninh.
Construction of the US$250 million Nosco-Vinalines ship repair plant started in Yen Hung District of Quang Ninh last Saturday, Vinalines said in a statement.
The facility will cover 100 hectares along the Chanh River. Vinalines experts said the location would enable the factory to receive large ships for repair.
The project will be developed in two phases, with the first requiring around US$150 million and being completed by 2011. After completing the first phase, Nosco-Vinalines can repair 120 to 150 ships up to 70,000 DWT a year.
The second phase is expected to be finished by 2013, by which the plant can repair 150 to 200 ships up to 100,000 DWT a year.
Vinalines is looking to obtain total turnover of VND1 trillion a year and generate 700-800 jobs when the plant is operational.
The Vietnam News Agency quoted Deputy Prime Minister Hoang Trung Hai, who attended the groundbreaking ceremony last Saturday, as requesting the plant’s investors pay due attention to environmental protection.
In February, Vinalines signed a deal with Vietnam Shipbuilding Industry Group (Vinashin) for 40 ships with delivery taking place from 2009 to 2013.
Last year, Vinashin started building four ships of 22,500 DWT and five ships of 12,500 DWT for Vinalines, as well as delivered three ships for the shipping company. These ships are part of a long term plan to add 32 new ships to Vinalines’ fleet.
Vinalines chairman Duong Chi Dung said that by the end of 2008, the corporation’s fleet had risen to 145 ships with a total holding capacity of 2.5 million tons. Vinalines now manages five key ports in the country – Saigon Port, Can Tho Port, Danang Port, Quang Ninh Port and Haiphong Port.

Samsung phone factory to come online this month

HCMC - South Korea’s Samsung Electronics Co. will commission the first phase of a US$670 million cell-phone factory in the northern province of Bac Ninh some time this month, said a source from Samsung Vina.
The facility in Yen Phong Industrial Park, some 30 km from Hanoi, will mainly supply foreign markets, the source told the Daily at a road show which Samsung Vina held in HCMC last week to present its LED televisions.
Everything is ready and the factory will have a trial run this month before commercial production, and target Asia as the first foreign market, the source said.
The world’s second largest mobile handset maker commented work on the plant in April last year.
The source give no further details about the project but others said the plant could produce 30 million mobile phones a year in the first stage, which will triple to some 100 million units in the long run.
The investment reflects Samsung’s effort to cut costs to improve its competitiveness on the global market and meet fast-growing demand in Southeast Asia.
In addition to Samsung’s phone plant in Gumi, some 260 kilometers southeast of Seoul, Samsung has facilities in China, India and Brazil.
For the television front, Samsung Vina late last week launched its first full line of LED Full HD televisions and a comprehensive line-up of audio-visual products at the Samsung LED TV - AV Roadshow 2009 in HCMC.
The 32 to 55-inch LED Full HD televisions come with price tags from VND17.9 million to VND129.9 million per unit.
These models use LEDs as their primary light sources rather than traditional Cold Cathode Fluorescent Lamps (CCFL) to achieve mega contrast ratios, slimmer depths of 29.9mm thick, 70% thinner than traditional LCD televisions, and energy consumption reduction of some 40% compared to traditional LCD televisions.

Mercedes-Benz Vietnam launches SUV

Vo Hoang Yen, the first runner-up of Miss Universe Vietnam 2008, poses next to the Mercedes GLK car at the unveiling in HCMC last week - Photo: Kinh Luan HCMC - Mercedes-Benz Vietnam has launched a sport utility vehicle model made on a new production line in which the company has invested about US$3.3 million.
The GLK SUV is designed as a sedan for use in the cities and a spacious versatile vehicle for any countryside or off-road trips.
It comes with the latest 4MATIC drive system and the 231 HP V6 engine and the 7G-TRONIC automatic transmission.
General director of Mercedes-Benz Vietnam Udo Loersch said, “GLK is a special model. It has opened up a new luxury vehicle segment in global markets. Now it prepares to make debut in Vietnam in early June.”The car has a price tag of US$77,900, including VAT.
“Vietnam is the only country in the world to produce GLK in CKD form. Quality standards of our national production are subject to strictest quality standards,” Loersch said. In CKD form, completely-knocked-down auto parts are imported and used for local assembly.