VINACHEM

Hoang said this year's industrial production growth rate would surpass the target of 12 per cent set by the Government as those of the first six months recorded an impressive 13.6 per cent growth.

Essential products would be in sufficient supply, the minister told the meeting reviewing the first half of the year's results in Ha Noi and HCM City yesterday.

Exports and the domestic market would grow, while retail and service turnover would improve due to increased consumption of food and drink over the summer holiday period.

Industrial production value last month was VND66 trillion (US$3.6 billion), an increase of 14.6 per cent over the same period last year, comprising VND366 trillion ($19.8 billion).

Of the total, the foreign direct investment sector saw the highest growth rate of 17 per cent, followed by non-governmental and State-owned sectors with 12.6 and 9.5 per cent respectively.

Attendees also heard that 10 out of 14 key industrial cities and provinces posted higher industrial production values than during the same period last year. They include Vinh Phuc, Phu Tho, Binh Duong, Thanh Hoa, Quang Ninh, Hai Phong, Ha Noi and HCM City.

"Industrial production during the period wasn't at maximum growth as many businesses had to reduce their capacity," Hoang said.

He added that prices of some industrial items such as steel had been stable or had seen reductions although some prices have surged in recent months.

Total export turnover in the first six months was VND32 billion ($1.7 million), an increase of 15.7 per cent against the same period last year.

The average export turnover in the period reached $5.35 billon per month.

The trade deficit stood at $6.7 billion, equalling 21 per cent of export turnover.

Challenges

The Industry and Trade Minister said many construction projects had failed to make progress as they could not access bank loans due to overly high interest rates.

In addition, increasing prices of input materials had lowered enterprise effectiveness.

Vu Duc Giang, general director of Viet Nam Garment and Textiles Group said the industry was not on the list of preferential investments, adding that they were facing difficulties due to high material prices, training costs and electricity blackouts.

Electricity provision is likely to prove insufficient in the upcoming time. Most enterprises have been asked to focus on ensuring electricity for production and business.

TKV's general director Tran Xuan Hoa proposed to invest in an electricity system specifically for mines as the national electricity grid suffered from problems.

Attendees also mentioned the reduced inflows of FDI into industrial production over the previous months. Only 20 per cent of FDI in Viet Nam currently is invested in industry.

In an effort to ease the situation, MoIT had asked businesses and its departments to take measures to reach the set GDP target of 6.5 per cent this year.

The ministry asked Viet Nam Electricity (EVN) to collaborate with PetroVietnam and other electricity producers to exploit the maximum capacity of electricity plants to meet production and domestic demand.

It also urged enterprises to promote production to ensure a balance of supply and demand in essential items.

The minister said the country will have to import machines and equipment in the coming time as it was implementing major energy, chemical and apparel projects.

Groups and businesses should revise and audit their imported items to more suitable levels.

The ministry would continue to organise training classes at localities on free trade agreements and tax reductions, in order to push exports.

The minister asked authorities to carry out promotional programmes, focusing on selling Vietnamese goods to rural areas and industrial zones to stabilise the domestic market.

(Source: VNS)