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Ministries disagree, enterprises suffer


images (4) Chemical producers cry about the lack of industrial salt, but the Ministry of Industry and Trade (MOIT) still cannot grant quotas to import the products, because it still needs to consult with the Ministry of Agriculture and Rural Development (MARD).

The enigmatic silence

One month ago, a hot debate was triggered about whether to allow to import salt. MOIT believed that Vietnam should import salt to satisfy the domestic demand, especially from chemical producers, while MARD thought that it was not necessary to import salt, because the domestic supply can absolutely meet the demand.

At that moment, MOIT faced violent criticism from salt workers, who said that the imports killed the domestic production and pushed them against the wall as the salt price kept dropping.

A solution was suggested that MOIT should organize an open dialogue between salt producers and chemical enterprises, to find out the problem. Such a meeting was arranged in July, but no salt producer attended the dialogue.

However, a compromise was still made: MOIT agreed to delay the granting of quotas for salt imports until the end of June and July – the high domestic salt crop season. The ministry also urged salt enterprises, which still had industrial salt in stocks, to contact chemical enterprises to make deals.

However, salt workers still haven been keeping silence.

In early August 2011, the relevant departments under MARD and MOIT organized an inspect tour to learn about the salt production in some provinces in the south of the central region.

Luu Hoang Ngoc, Deputy Director of the Chemical Department under MOIT, has affirmed that most of the producers are not capable to provide industrial salt this year.

“In fact, some producers can make out industrial salt, but they do not do this, but they make lower quality salt to provide to loyal clients,” Ngoc said.

After the inspection tour, MOIT has urged MARD to give the answer if MARD agrees to the salt import proposal. However, to date, no official answer has been given by MARD.

While the two relevant ministries are still busy discussing whether to allow importing salt, chemical producers are on the tenterhooks. Le Van Hung, Director of the Southern Basic Chemicals Company, said that due to the lack of industrial salt, the company has to delay some new projects, and it may face the material shortage for production.

Wrong investments?

The key problem for Vietnam’s salt industry is that it has normal salt in excess, but it lacks industrial salt. Therefore, experts have urged to make more investments in making industrial salt. However, the program to step up the production of industrial salt has been facing big difficulties from all four sides.

Experts have denied the opinion that the salt price has been decreasing dramatically and salt producers cannot make profits. A lot of big guys have earned big money from salt. At present, four enterprises are holding 80 percent of the salt market share, namely the Ha Long Production Investment and Development, the Southern Salt Corporation, the Central Region Salt and Trade Corporation, and the Khanh Vinh Salt Company in Hai Phong City.

However, the four enterprises have only been making normal salt.

Why don’t domestic enterprises want to make investment in making industrial salt? It is because chemical enterprises do not want to use domestic products, while salt production has not been considered an important sector. This explains why the sector has been put under the seven different state management bodies since the day of establishment.

A high hope has been arisen that Bim Group has set up a production line worth 20 million dollars in Vietnam, planning to develop a project on making industrial salt in Ninh Thuan province. It is expected that this would be the biggest salt producers in South East Asia with the designed capacity of 200,000 tons of industrial salt per annum.

However, analysts have raised doubts about the feasibility of the project, saying that with the current input material quality, the production line of the factory may not be able to operate for a long time.

MOIT has called for foreign investments in salt production sector. However, in order to attract investors, the government needs to keep another viewpoint on salt production.

http://vietnambusiness.asia/ministries-disagree-enterprises-suffer/

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