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PM okays Van Don EZ development
Prime Minister Nguyen Xuan Phuc has given the northern province of Quang Ninh the go-ahead to develop the Van Don Economic Zone as a special administrative-economic unit.
The province has been asked to use the local budget and other sources to fund and implement the project.
The PM has also agreed in principle to selecting and hiring foreign consultants for the project, in line with the Law on Bidding and Decree 30/2015/ND-CP, dated March 17, 2015.
The Quang Ninh People’s Committee will discuss and negotiate the contract value and payment with foreign consultants.
Van Don District comprises over 600 islands, and is located around 175km from Ha Noi, 80km from Hai Phong City and 50km from Ha Long City. The district encompasses the World Heritage site Ha Long Bay. It covers a total area of 2,171sq.km, of which natural land is 551sq.km.
The district is sparsely populated and its total population is 41,645 people. With the variety and uniqueness of the archipelago, rich ecosystems and beautiful beaches, the islands have the potential to become a world-class maritime tourism destination. Its favourable transport infrastructure, much better compared to the country’s 14 coastal economic zones, is an added benefit.
The province’s leaders have also asked the government to promulgate the circular on casinos, which will lay guidelines for Vietnamese citizens, and contribute towards attracting more investments into Van Don, where luxury resort complex projects and a casino are being planned.
Quang Ninh is working towards developing the required infrastructure for the special administrative-economic unit, even as it draws up detailed plans of the project.
The unit will also help in the development of the Mong Cai-Hai Ha border economic area and Dinh Vu-Cat Hai Economic Zone.
Van Don (Quang Ninh), Bac Van Phong (Khanh Hoa) and Phu Quoc (Kien Giang) are all to be developed as special administrative-economic units, once the draft law is passed by the National Assembly (NA), according to the Government Office.
Special administrative-economic units are magnets for investment, high technology and advanced management, becoming high-growth areas that generate more resources and motivation and accelerating the development and economy of the province, the region and the country.
The Ministry of Planning and Investment expects that the three special administrative-economic units of Van Don, Van Phong, Phu Quoc will contribute billions of dollars annually to the local GDP from 2020.
The average income per capita in the units will be $12,000 to $13,000 per person per year after 2030.
Hanoi -After 50 years of development, the Association of Southeast Asian Nations (ASEAN) has been internationally recognised as a comprehensive regional cooperative organisation and a cohesive and dynamic political-economic entity that contributes to global connectivity.
ASEAN enjoys half century of dynamic, comprehensive development (Source: asean.org)
The association has an important role and position in the Southeast Asian and Asian-Pacific regions with profound political, economic, cultural and social influences.
A spirit of solidarity, consensus and mutual support and respect, along with harmonious combination of national and community interests have helped enhance the association’s position.
Over the past half century, ASEAN has proved itself a leading factor in ensuring a peaceful environment, security and cooperation for regional development, illustrated through the bloc’s efforts to cooperate in politics and security and build codes of conduct to increase mutual understanding and prevent conflicts in the region.
ASEAN has also established collaboration with important partners in the world, while initiating and playing a key role in several regional cooperation frameworks, especially the ASEAN Regional Forum (ARF) – the only mechanism for dialogues and cooperation in political and security matters in Asia-Pacific.
The association has created favourable conditions for important partners outside Southeast Asia to contribute to the settlement of common security challenges, helping reinforce peace and security in the region.
More countries around the world have shown interest in Southeast Asia. The Treaty of Amity and Cooperation initiated by ASEAN in 1976 has until now attracted 35 external nations, which serves as a foundation for the bloc and other countries to promote peace and stability in the region.
ASEAN also plays a key role in promoting cooperation and connectivity in East Asia, especially in economics and trade, through initiating and playing the key role in suitable cooperative mechanisms such as ASEAN plus and East Asia Summit (EAS).
In addition, ASEAN was among the founders as well as assumed an important role in inter-regional cooperation mechanisms such as the Asia-Pacific Economic Cooperation, the Regional Comprehensive Economic Partnership and comprehensive economic agreement between ASEAN and big partners in Northeast Asia and beyond.
In the context of slow global economic recovery, the association’s economy is forecast to maintain its current average economic growth of 5 percent per year in the next decade, nearly double the world’s average, making it one of the driving force for the global economy.
With total gross domestic product growth of 2.43 trillion USD in 2015, ASEAN rose to become the sixth largest economy in the world and is likely to rank fourth by 2025.
The formation of the ASEAN Community on December 31, 2015 with three pillars: politics-security, economics and culture-society, has also enhanced the bloc’s development.
ASEAN Secretary General Le Luong Minh has affirmed that in the post-2015 period, ASEAN will be a people-centred and rule-based community that looks toward sustainable development and can make use of new opportunities and cope with new challenges.
In the next 10 years, the ASEAN community will play a greater role in regional and international issues, he said, adding that the bloc has implemented measures to build and reinforce the community across the three pillars while carrying out an overall plan for ASEAN connectivity through 2025 as well as other action plans on ASEAN integration.
At present, ASEAN faces both internal and external challenges, including the complicated situation in the East Sea and the expansion of terrorism and extremism, particularly threats by the self-claimed Islamic State.
In addition to diversifying external relations, ASEAN is strengthening cooperation in the fields of politics, security, economics and culture, as well as building trust to make active contributions to peace, security and stability in the region and around the world, while reinforcing and increasing its position as a cohesive, dynamic and successful cooperative organisation.
Established in 1967, the 10-member ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
Sweets industry still pulling in investors
Though the growth of the sweets market has slowed down, it is still attracting investors.
After Kinh Do Group sold its sweets manufacturing division to Mondelez and industry growth slowed, some analysts commented that the sweets market was no longer attractive.
However, they may have to rethink the market prospects as Vinataba recently made a fat profit after divesting its 51 percent stake in Hai Ha and Huu Nghi Confectionary Companies.
The deal has brought hundreds of billions of dong to Vinataba, while Huu Nghi’s and Hai Ha’s shares have been hunted by investors. Bibica and Quang Ngai Sugar Company, the owner of Biscafund sweets brand, have also seen the prices of their shares increasing.
By the end of April, Bibica share price had climbed to VND100,000 per share, 3-4 times higher than Hai Ha and Huu Nghi share prices.
Securities analysts believe that the shares of sweets companies can go for good prices because there are few sweets shares listed on the bourse.
A representative of Vinataba confirmed that the divestment from Huu Nghi and Hai Ha is a part of the corporation’s plan to withdraw capital from non-core business fields. He denied that Vinataba divested Huu Nghi and Hai Ha shares because of the two companies’ bad business performance.
Phap Luat cited its sources as reporting that Huu Nghi has annual turnover of over VND1 trillion and output of 20,000 tons. Meanwhile, Hai Ha reported a 5-7 percent growth rate in the first six months of the year.
According to Lam Ngoc Tham, CEO of Topcake, the sweets joint venture had stable growth rate of 15-20 percent.
Among soft cake manufacturers, in 2015, Pham Nguyen Food Processing and Confectionary reported turnover of $30 million (VND682 billion). In 2016, it had turnover of VND739 billion which meant the 15 percent annual growth rate.
Meanwhile, Orion reported huge revenue of VND4 trillion in 2016, an increase of 24 percent over the same period of the year before.
Not only high domestic demand, but satisfactory exports are also why investors are pouring money into the sweets industry.
With its products exported to more than 10 markets, Hai Ha reported export turnover of $3.2 million in 2016, while the figure is expected to increase to $3.3 million this year.
Tham of Topcake said the company exports tens of containers of products to Cambodia, Japan, Thailand and Myanmar, and it is planning to export products to the US.
Some domestic sweets manufacturers said that sweets exports maintain two-digit growth rates in some markets such as China, the US, Cambodia, Japan and South Korea.
Kim Chi, VNN
M&A market poised for a turnaround
Despite a slowdown dating from the second half of 2016, the pace of the merger-and-acquisition market is expected to pick up in the months to come with many potential deals ahead.
The Japan-invested Daiwa-SSI Fund is on the way to acquire a 20 per cent stake in Hanoi-based CVI Cosmetic & Pharmaceutical Co. for an undisclosed sum.
“We are working on necessary procedures to complete the acquisition by the end of July. The Japanese investment will enable us to develop a factory in the Hoa Lac Hi-Tech Park,” Phan Van Hieu, chairman of CVI, told VIR.
Daiwa-SSI’s bid is among the new potential deals for the second half of 2017, while many others are being negotiated.
At last week’s press conference on the M&A Vietnam Forum 2017 organised by Vietnam Investment Review and AVM Vietnam, experts said pharma and healthcare will be among sectors that hold the biggest appeal for mergers and acquisitions (M&A) in 2017 and 2018, driven by the increasing population and growing middle class.
“Increasingly deep global integration, through the signing of free trade agreements and the establishment of the ASEAN Economic Community, has contributed to making Vietnam more attractive to international groups and M&A is an effective investment channel,” said Tran Thanh Tam, director of KPMG’s Markets Group.
One of the most notable M&A deals in the healthcare sector recently is Quadria Capital, Asia’s leading private healthcare investor, acquiring a stake in French-Vietnam Hospital in mid July.
Future M&A trends in potential sectors
M&A Vietnam Forum 2017 experts expect there will be big M&A deals in the sectors of agriculture, banking and finance, infrastructure and energy, IT and telecom, education, and pharmaceutical and healthcare in the coming time.
In the past few years, many leading private firms of Vietnam have shifted their investments to agriculture. It is forecast that share issuance for their partners and transfer of stake among investors will become more popular.
One of the latest M&A deals in the agriculture sector is Thanh Thanh Cong Tay Ninh Sugar JSC (TTCS) fully acquiring Bien Hoa Sugar Joint Stock Company (JSC) to become the biggest sugar producer in Vietnam.
The banking and finance sector is also expected to have many M&A deals on the back of the sector’s restructuring.
A driving force for this sector is the National Assembly’s recent adoption of Resolution 42, on piloting the settlement of bad debts of credit institutions. This resolution’s focus is the resettlement of guaranteed assets, thus helping better settle bad debt.
“Foreign investors who are interested in the acquisition of nationalised banks are very concerned about bad debt settlement prospects. So Resolution 42 will create an incentive for foreign banks to join Vietnam’s banking restructuring,” said Bui Huy Tho, director of Management and Licensing for Credit and Banking Activities Department, under the State Bank of Vietnam (SBV).
Nationalised banks here mean very weak banks that were taken over by the SBV for zero dong.
“Domestic and international investors are very keen on buying into Ocean Bank, GP Bank, Vietnam Construction Bank. The SBV has given them the green light to learn more about these banks before taking further steps,” he added.
The latest M&A in the banking sector, between Hanoi-based Vietnam International Bank (VIB) and the Ho Chi Minh City branch of the Commonwealth Bank of Australia (CBA), happened in early July. In April this year, ANZ Vietnam also parted with its retail arm, selling to South Korea-based Shinhan Vietnam.
HSBC Holdings Plc. and Standard Chartered Plc. are also planning to divest their stake at Vietnamese banks - HSBC’s 19.41 per cent in Techcombank and Standard Chartered’s 15.69 per cent in ABC, respectively - after over a decade of being strategic investors with these banks.
With the policy to attract private investment in infrastructure development, there has been a change in rights for operating certain infrastructure projects, especially airports and seaports.
France’s Vinci Group is working with state-owned Vietnam Expressway Corporation, the country’s largest expressway developer, on the transfer of the operation right for the Cau Gie-Ninh Binh and Ho Chi Minh City-Long Thanh-Dau Giay Expressways.
In early June, two Japanese expressway companies, East Nippon Expressway Company (NEXCO) and Expressway International Company Ltd. (JEXWAY), signed a co-operation agreement with Vietnam’s Foundation Engineering and Underground Construction JSC (FECON), to buy a 20 per cent stake in Fecon’s build-operate-transfer project, which includes a bypass road on National Highway No 1 at Phu Ly and reinforcement work along the road in the northern province of Ha Nam.
The other sectors that have potential for M&A activities in the coming time include education, pharmaceuticals, and healthcare, thanks to Vietnam’s increasing population and disposable income.
In the pharmaceutical market, buyers are looking ahead to the scrapping of foreign ownership limits (FOL) in the country’s biggest drug makers, Domesco (DMC), Hau Giang Pharmaceutical JSC (DHG), and Traphaco (TRA).
DHG has announced that one of the issues it will raise at the extraordinary annual general meeting this month is the opening of the FOL to 100 per cent, while TRA is also interested in scrapping its FOL, amid growing interest from multinational corporations.
Foreign pharma groups see the FOL removal as a positive signal. A clear path in converting partnerships into majority ownership would provide companies with much stronger arguments to convince their global headquarters to invest in Vietnam.
Back in September 2016, when DMC removed its FOL, US-based Abbott Laboratories increased its stake in the firm to 51.7 per cent, boosting its footprint in the local pharmaceutical market.
For DHG, if the FOL removal is approved, it will facilitate Taisho Pharmaceutical Holdings, one of the five biggest drug firms in Japan, to increase its stake in DHG from the current 24.5 per cent.
In the aviation sector, the Ministry of Transport (MoT) will seek the government’s permission to continue selling stake in state-owned Airports Corporation of Vietnam (ACV) – the country’s largest airport operator – to strategic investors. Europe’s leading airport group Aeroports de Paris (ADP) is ACV’s foreign strategic partner.
Big potential deals longing for big pushes
At present, a series of M&A deals are still frozen, waiting for accelerated equitisation of state-owned enterprises (SOEs) and investment divestments. If the process gears up, the M&A pace will pick up.
According to statistics from the M&A Forum (MAF), Vietnam equitised just 52 SOEs in 2016, or 25 per cent of the 2015 number. In the first half of 2017, the number was 20 SOEs, equal to 76 per cent of the same period last year.
“Together with strong competition from regional countries and a small number of big-scale enterprises, slow equitisation has caused stagnancy in the M&A market since the second half of 2016,” said Dang Xuan Minh, general director of AVM Vietnam, vice head of the forum’s organising board.
In the period, the value of each M&A deal averaged a lightweight $3-4 million.
“Vietnam’s total M&A value in 2017 cannot surpass the $5.8 billion of 2016 if there are not big pushes from SOEs and government policies,” he added.
Foreign investors are waiting for the government’s decision to buy state stakes in state-owned Sabeco, the largest brewer with 46 per cent market share, and Habeco, the third biggest brewer. The state now holds an 89.59 per cent interest in Sabeco and 82 per cent in Habeco.
“As expected, Habeco and Sabeco will submit to the Ministry of Industry and Trade (MoIT) their divestment plans in July. If approved, the stake sales will be completed within 2017,” said Bui Truong Thang, vice head of the ministry’s Light Industry Department.
Heineken, AB InBev, SABMiller, Asahi, Kirin Holdings, Singha, Thai Beverage, and Shingha are queuing up to buy into Sabeco, while Carlsberg is waiting to buy into Habeco.
In addition, the long awaited equitisations of MobiFone and Vietnam National Shipping Lines (Vinalines), as well as the divestment of Petrolimex, attract special interest from international groups and investment funds.
There is also room for foreign investors to buy into Vietnam’s biggest dairy company, Vinamilk.
The State Capital Investment Corporation (SCIC), Vietnam’s sovereign fund, has submitted two options for divesting its stake in Vinamilk, in which it still holds 39 per cent.
Vinamilk is among the more than 130 companies that SCIC has to divest from during the 2017-2020 period, according to a government decision signed on July 10. Vinamilk is a subject of particular interest, as the local government has asked SCIC to fully exit the $9.8 billion firm.
Consumer goods, retail, and real estate remain top attractions
In the period from 2014-2018, the M&A market entered its second wave with a total predicted value of $20 billion, driven by strong commitments to SOE equitisation, the rise of the private sector, the country’s deepening global integration, and strong foreign investor interest.
In 2016, the total value of M&As hit an all-time high of $5.8 billion, rising 11.92 per cent from 2015. Consumer goods, retail, and real estate were the most attractive to buyers. Among the sectors, M&A deals in retail accounted for 38.46 per cent of the total M&A value.
Between 2016 and the first half of 2017, retail made up 20.33 per cent of the total M&A value, followed by consumer goods with 22.52 per cent, and real estate at 9.63 per cent.
“The majority of M&A deals during the period focused on the market approach and expansions to cash in on the country’s young population and rising middle class,” said AVM’s Minh.
Typical examples for this trend were deals made by Thai groups, including Central Group’s $1.05 billion acquisition of Big C, and the $800 million Metro Cash & Carry Vietnam deal carried out by TCC Holdings.
Beside retail and consumer goods, real estate continued to be on the radar of international groups from South Korea, Japan, and Singapore after a recovery in 2014.
Experts forecast that these sectors will remain the most attractive in the coming time, thanks to strong local purchasing power.
Asian investors have the upper hand
The majority of M&A deals in the $20-100 million range involved foreign investors, making up 77 per cent of the total M&A value in Vietnam. Asian buyers, especially those from Singapore, South Korea, Thailand, and Japan, remained the most active participants.
“M&A deals in Vietnam mostly attracted buyers from Asia, especially Japan, South Korea, Taiwan, and Singapore. The market is yet to appeal strongly enough to EU and US investors, due to the smaller scale of Vietnamese firms,” said Nguyen Quy Lam from the Vietnam Prosperity Joint Stock Commercial Bank Securities Co., Ltd.
Tam from KPMG said the firm is providing advisory services for many M&A deals, and most of the buyers are from Asia.
Japan investors focused on aviation, petroleum, and pharmaceuticals; Singaporeans targeted real estate; the Thai concentrated on retail;and South Koreans invested in food, banking, and finance.
With the biggest players expected to remain unchanged, and interest among Japanese and South Korean investors continuing to focus on retail and consumer goods, the majority of M&A deals should concentrate on these sectors in the future.
Transport ministry reconsiders ride-sharing service ban
GrabShare service launched in Vietnam in May this year.
Agriculture turns out to be promising land for investors
More and more investors have injected money into agriculture, even though the sector is believed to have many latent risks.
In the first half of 2017, the major segments of agriculture such as cultivation, fisheries and forestry all prospered, with a 2.6 percent growth rate, contributing 0.43 percentage points to the growth of the economy.
According to MARD, the total export turnover of the agriculture sector reached $17.1 billion, an increase of 13.1 percent over the same period last year. The export of key farm produce brought $9.1 billion, including $1.7 billion worth of vegetables and fruits, increasing by 44 percent.
The outstanding loans disbursed under the government’s policies on supporting agricultural development had reached VND1.148 trillion by the end of May 2017, up by 9.9 percent over the end of 2016.
Agriculture, which is one of the five priority sectors for bank lending, now has a ceiling lending interest rate of 6.5 percent instead of 7 percent.
According to director of credit department Nguyen Quoc Hung, after the government released Resolution 30 on the VND100 trillion credit package for hi-tech agriculture development in March 2017, outstanding loans provided to the sector increased from VND3.7 trillion to VND32.3 trillion. As such, the loans to agriculture increased sharply by 8.7 times within half a year.
Most of the credit package has been disbursed for hi-tech agriculture projects (VND27.7 trillion), with VND4.6 trillion for clean agriculture production projects. To date, 4,125 clients have accessed the package, including 3,956 individuals and 168 institutional clients.
Vingroup, PAN Group, Hoang Anh Gia Lai, Loc Troi and NutiFood are well known as pioneering investors in hi-tech agriculture.
PAN Group’s farm produce has been exported to more than 20 countries and it plans to invest VND2 trillion more in agriculture projects through M&A deals.
PAN’s president Nguyen Duy Hung said PAN Farm, which focuses on exporting flowers to Japan, has successfully called for VND400 billion from IFC, SSIAM and SSI.
More recently, NutiFood poured more than VND1 trillion into an agriculture project in Da Lak through the purchase of a 25 percent stake in Phuoc An Coffee. The company has 1,400 hectares of UTZ Certified coffee area.
Loc Troi Group and Thaco, an automobile manufacturer, has cooperated to implement a VND7.8 trillion agriculture mechanization project, which runs a closed chain of production, harvesting, processing, transportation and distribution of farm produce to be cultivated on an area of 2,000 hectares in Thai Binh province.
UDC, an infrastructure development company, has received approval from shareholders to add agricultural production to its major business fields, commencing on July 14.
Thanh Mai, VNN
BUSINESS IN BRIEF 26/7
Japan-invested firm opens 42 mln-USD factory in Binh Duong
The Japanese-invested TPR Vietnam Co. Ltd on July 21 put into operation a factory producing gaskets, electric mattress pads and plastic products for daily use in the southern province of Binh Duong.
The plant, based at the Vietnam-Singapore Industrial Park 2 in Tan Uyen township, was built at a cost of more than 42 million USD.
Kishi Masanobu, General Director of Japan’s TPR Group, said his firm highly values Binh Duong authorities’ attention to creating a favourable investment climate. It decided to expand investment here by opening the fifth factory in Binh Duong.
The new factory manufactures about 120,000 electric mattress pads and 30,000 plastic products each month, along with some other products.
Chairman of the Binh Duong People’s Committee Tran Thanh Liem promised continuous efforts to improve the investment environment and upgrade local infrastructure to better serve investment demand and economic development.
Earlier, TPR Vietnam, set up in 2006 in Binh Duong, invested in four automobile component factories at different industrial parks in the province.
Binh Duong attracted more than 1.72 billion USD of foreign investment in the first six months of 2017. It has so far housed 2,946 foreign invested projects worth over 27.4 billion USD, ranking second in Vietnam in foreign investment attraction after Ho Chi Minh City.
Vietnam aquatic, Tra fish festival scheduled for October
A Vietnamese aquatic products and Tra fish festival will run October 6-8 at the Vietnam Trade Promotion Centre for Agriculture on Hoang Quoc Viet Street, Cau Giay District, Hanoi.
Aiming to promote Tra fish in northern Viet Nam and foreign markets, especially China, the event, held by the Ministry of Agriculture and Rural Development, will showcase Tra fish, Tra fish-based products and other Vietnamese aquatic goods at 100 booths.
It is hoped to offer businesses opportunities to broaden their networks with producers, supermarkets, domestic and overseas customers while helping Tra fish become a high value product.
The event will also include workshops on Tra fish production and consumption and Tra fish-based dishes.
In the first half of this year, Vietnam’s fishery output reached 1.6 million tonnes, up 4.8 percent against the same period last year and fulfilling 54.8 percent of the yearly target.
Tra fish output hit 583,503 tonnes, equivalent to the number recorded in the same period last year and 50.7 percent of the target set for the whole year.
During the reviewed time, aquatic products worth 3.5 billion USD have been shipped abroad since the beginning of this year, predominantly to the US, Japan, China and the RoK, marking a 14.1 percent rise.
Particularly, in Japan, Vietnam’s tra fish sold at Aeon supermarkets is listed among “TopValu” products which are goods with leading quality.
Vietnam reaching a heady high in the global beer business
With the Vietnamese thirst for beer seeming to know no limits, brewers are finding it hard to resist tapping into the country's potential market.
Vietnam is forecast to lead Southeast Asia to see volume growth of 2.3 billion liters over 2016-2021, market researcher Euromonitor International said in its July report.
Southeast Asia’s volume gains will even surpass those of larger regions, such as North America, Europe, the Middle East and Africa, the report said.
An expanding Vietnamese middle class and youthful population have helped drive a 300% surge in beer demand since 2002, according to Euromonitor, which estimates the market was worth VND147.2 trillion (US$6.5 billion) last year.
It predicts per-capita consumption will reach 40.6 liters this year, making Vietnam the biggest beer consumer in Southeast Asia.
Vietnam will be “the next key battleground for brewers”, Bloomberg cited Euromonitor as saying in a report.
Saigon Beer Alcohol Beverage Corp. (Sabeco) and Hanoi Beer Alcohol Beverage Corp. (Habeco), the nation’s two largest beer companies, will submit IPO plans to the government this month, an official from the industry and trade ministry told local media last week.
“The stake-sales will create an opportunity for international companies to expand geographically, especially those still without a presence in Vietnam,” John Ditty, managing partner of KPMG Vietnam’s deals advisory unit, told Bloomberg.
A study jointly conducted by Vietnam's health ministry and the World Health Organization (WHO) last year showed that 77% of Vietnamese men drink liquor and beer, and nearly half of them drink at hazardous levels.
Nguyen Phuong Nam, an official from the WHO, said nearly 67% of the 1,840 traffic accident patients involved in the study had high concentrations of alcohol in their blood, and 45% had driven after drinking for two hours or more.
Vietnamese drank 3.8 billion liters of beer last year. That was an average of 42 liters per person, four liters more than 2015, according to data collected by the trade ministry.
Private-label products hold high potential
The development of private-label products, also known as “phantom brands” that are made by a manufacturer and sold under a retailer’s brand name, is considered an irresistible trend despite a small proportion in Vietnamese retail market.
A research by Kantar Worldpanel Vietnam shows that private-label products account for only 0.6% of total commodities at supermarkets in Vietnam compared to 50% in France, said Nguyen Huy Hoang, commercial director of the company.
However, the domestic rate is not too low compared to that in other Asian countries with 1.2% on average. The Republic of Korea and Malaysia are among countries with high rates of 2.7% and 2.2% respectively while the Philippines, Indonesia and China have a very low rate of 0.2%.
Hoang attributed the low rate of private-label products in Vietnam to the limited number of modern distribution channels, currently accounting for only 13%.
The research by Kantar Worldpanel also reveals that 38% of Vietnamese consumers choose private-label products due to the strong confidence in retailers.
Some common products are detergents and toilet paper while packaged food, milk and beverage products do not sell well.
According to Kantar Worldpanel, Vietnamese enterprises should attend to private-label goods and develop their own brands in the context of strong competition.
Cao Tien Vi, general director of Saigon Paper Corporation, told the Daily that the company accepts to manufacture products under supermarkets’ brands to fully utilize the company’s production lines, equipment and manpower, thereby earning more revenue.
Manufacturers need to invest in attractive packaging with limited cost and create new products as Vinamit, Saigon Food, VinaCacao and Lix have implemented successfully.
Retailers prefer medium and small manufacturers as a way to help these manufacturers get more experience in designing packaging, meeting customers’ demand and boosting production.
Many retailers not only provide products of domestic manufacturers but also cooperate with foreign enterprises to offer more private-label commodities.
Meanwhile, many foreign retailers such as Lotte Mart and MM Mega Market have had private-label products manufactured by enterprises in Vietnam for export to other markets.
Multinationals view ASEAN with renewed optimism
A growing middle-income class, increasing regional integration in tandem with solid economic growth over the past few years are some of the reasons multinationals are viewing ASEAN with a renewed sense of optimism, said the Business Times.
The Deloitte Global Manufacturing Competitiveness Index for 2016, the Business Times said, noted that by 2020 – Malaysia, Indonesia, Thailand, India and Vietnam – could quite possibly rank among the top 15 manufacturing countries in the globe.
Manufacturing labour costs in Indonesia, according to Deloitte, currently run about one-fifth of those in China, while in Vietnam and India they are about half the level of the most populous nation in Asia.
The five Southeast Asian countries have a few distinct longer term competitive advantages over China, Deloitte said, such as better prospects for a continued growing younger workforce over the next three decades.
In addition, a Regional Comprehensive Economic Partnership currently under negotiation among ASEAN and India, China, Australia, the Republic of Korea, Japan and New Zealand holds great promise for higher levels of commercial and services trade for the Southeast Asian regional bloc.
Executives of leading multinationals are also taking a long hard look at these same five countries, especially Vietnam, as alternative manufacturing bases, said the Business Times, based on its review of interviews published in Voice of Asia.
The executives cited by the Business Times all stated they were currently operating in ASEAN and were sanguine on continued prospects for their companies to prosper in terms of sales and earnings within ASEAN, especially expressing optimism with respect to Vietnam.
The list of executives included those from Borden Company (PTE) Limited, which has been successfully selling its green Eagle Brand medicated oil produced in Vietnam since the 1960s.
Similarly, Singapore-listed Darco Water Technologies said it is bullish on Southeast Asia, and Vietnam, even as it expands in China through a recent acquisition. The ASEAN market for environment solutions, whether water or waste, is very big, said CEO Thye Kim Meng.
Real estate firms are also eyeing opportunities in Vietnam and other ASEAN markets, said the Business Times. Real estate broker Huttons was one of the first agencies in Singapore to expand into the Vietnamese and Cambodian markets.
Wealth management and real estate services company ZACD Group, meanwhile, noted that the governments in ASEAN have started to liberalize their real estate markets in recent years.
In 2015, new laws opened the Vietnamese real estate market to expatriates. Restrictions on foreign investors in the region would continue to ease and most likely cause investments to rise, said ZACD Group chair Kain Sim.
Lastly, the Business Times cites Surbana Jurong, a Singaporean government-owned consultancy company focusing on infrastructure and urban development. It was formed in June 2015 with the merger of Surbana International Consultants and Jurong International Holdings.
Surbana Jurong is proposing an integrated resort in Vietnam and building hydro-electric dams in Malaysia, which have benefited tremendously by the formation of ASEAN and the consequent lowering of tariff and elimination of other barriers to market entry.
Our smart sustainable city initiatives have given us first mover advantage in addressing the ASEAN region’s growing urbanization, said Jeffrey Cheah, founder and chair of Surbana Jurong.
Da Nang determined to build startup city
The central city of Da Nang is determined to a build startup destination for innovation and creativity, said Secretary of the municipal Party Committee Nguyen Xuan Anh.
Anh made the statement at the Da Nang Start-up Conference and Exhibition themed “Startup Technology and Ecosystem” on July 21, attracting more than 400 young entrepreneurs and startups from 27 countries and territories worldwide.
In order to achieve the goal of becoming a startup destination in ASEAN under a project on developing a startup ecosystem until 2020 with orientations to 2030, Da Nang is set to develop startup culture, raise young generations’ awareness of startups, continue refining relevant mechanisms and policies, develop startup network and expand cooperation to attract resources at home and abroad for the effort, he said.
Vo Duy Khuong, Chairman of the Da Nang Startup Council, said the council will work with schools, universities and colleges to add startup into their curricula and urge the municipal authorities to launch a startup fund which helps startups access capital from domestic and foreign investment funds, financial and credit organisations.
At the same time, conferences and exhibitions to share experience and introduce products to domestic and foreign markets will continue to be held.
As part of the event, 10 most outstanding startups will enter the final round of the Pitching Competition to vie for awards worth VND200 million, and an exchange with tourism billionair Jeff Hoffman will also be organised.
The event was co-hosted by the Da Nang Startup Council and the municipal business incubator.
Vietnam beats France to crack China's top 10 travel destinations
Vietnam has become the 10th most popular destination among Chinese tourists, according to new statistics.
Figures from CLSA, a Hong Kong brokerage and investment firm formally known as Credit Lyonnais Securities Asia, showed Vietnam has overtaken France to enter the top 10, which is led by Hong Kong, Thailand and the Republic of Korea.
The survey polled more than 400 Chinese travelers across 25 cities with an average age of 35 and a monthly income of 20,000 yuan (US$2,900).
Safety remains the prime concern for mainland travelers, followed by cost and sightseeing opportunities.
A series of terror attacks last year in Europe had deterred Chinese travelers, it said, as cited by the South China Morning Post.
Last May, a MarketWatch report, citing data from American Express, also showed that summer bookings to Europe’s top destinations, notably France and Turkey, had been hurt by the attacks.
China has always been Vietnam's main source of tourists, and their numbers increased by 57% on-year in the first six months of 2017, reaching nearly 1.9 million and accounting for 30% of all foreign arrivals.
Last year, Vietnam welcomed around 2.7 million Chinese tourists, a jump of 51% from the year before.
Vietnamese media said Chinese visitors have been encouraged by a new policy that allows groups of travelers to visit the border province of Quang Ninh, home to the popular Ha Long Bay, for up to three days without a visa.
CLSA reported that 135 million Chinese people traveled abroad last year, and with 200 million Chinese tourists expected to make outbound trips in 2020, Vietnam is set to become even more popular.
A Bloomberg report last December said Chinese tourists could have a big impact on Vietnam’s economy. It said a 30% increase in spending by Chinese tourists would boost Vietnam’s economic growth by nearly 1 percentage point. For Thailand, that would be around 1.6 points.
“Chinese tourism is pretty big for ASEAN now, and all the countries rely on Chinese visitors to keep coming and keep spending,” Edward Lee, an economist with Standard Chartered Plc in Singapore, was quoted as saying in the report.
PVN exports 355 million tonnes of crude oil in 30 years
The Vietnam National Oil and Gas Group (PVN) has exported 355 million tonnes of crude oil, worth US$145 billion, since the shipment of its first barrel from Bach Ho field in April 1987.
The PVN today not only ships crude oil abroad but also supplies oil for Dung Quat Refinery in central Quang Ngai province.
The firm has extracted 7.48 million tonnes of crude oil, both locally and overseas, in the first half of 2017, bringing home US$3.17 billion.
Of the amount, 3.04 million tonnes has been provided to Dung Quat Refinery, exceeding the plant’s designed capacity.
According to the state-run group, a barrel of crude oil earns Vietnam US$54.4 on average during the period, higher than the expected rate of US$50 and global prices.
Crude oil prices are projected to hover around US$46 – 50 per barrel in the remaining months of this year, lowering the entire year’s average to about US$50 per barrel.
Saigon Plant Protection company opens branch in Myanmar
The Ho Chi Minh City-based Saigon Plant Protection JSC (SPC) has recently opened a representative office in Myanmar, after obtaining a local licence earlier this year.
Currently, 20 SPC products can be used on paddy fields, vegetables and fruit trees in Myanmar.
In the past 15 years, the SPC has worked with Myanmar companies to introduce its products, including pesticides, farming equipment and rice and vegetable seeds, in the country.
The company also worked with the Myanmar Government to present new cultivation methods for dragon fruit, mango and longan.
In 2005, the SPC established branches, then subsidiaries, in Cambodia and Laos.
To date, its annual export revenue is estimated at US$10 million.
Selling price of social housing may rise
Social housing is expected to get more expensive soon as investors have not received preferential interest rates for loans, experts have said.
The Ministry of Construction has allowed investors to factor in the normal interest rate of loans into selling prices, which may cause prices to exceed those of commercial housing projects, reported Tien phong (Vanguard) newspaper.
According to regulations on social housing policies issued in 2011, enterprises that develop social housing projects are exempt from land use tax and enjoy preferential interest rates for loans for the projects.
Then in 2013, the State provided a credit package of VND30 trillion (US$1.32 billion) to loan 70 per cent of credit for apartment buyers and 30 per cent for investors of the projects at low interest rates, the moves which stimulated the social housing market..
With those policies, social housing projects were sold at VND10 million per sq.m.
After the package ended on June 30, 2016, the Government announced a policy of preferential interest rates for investors of social housing projects.
Under this policy, enterprises can take State loans from the Social Policy Bank or credit organisations designated by the State. However, this policy has yet to be implemented.
Therefore, Binh Tan Consumer Goods Production Co, Ltd has asked the Ministry of Construction for support as the company has borrowed capital from banks at interest rates of 6.9 per cent for the first year and 9-10 per cent per year from the second year to complete its social housing projects after the VND30 trillion package ended.
With the high interest rate, the company could not continue developing the project and sell apartments at low prices.
However, the ministry replied that investors who used commercial loans could factor the high interest rate into the selling and rental price of apartments.
Thus, apartments in social housing projects can now be sold at commercial prices, leading to prices in projects like Tam Trinh and Rice City Song Hong in Ha Noi to increase to more than VND15 million per sq.m.
Nguyen Chi Dung, deputy director of Ha Noi Construction Department, said there is no ceiling price for social housing apartments, though legally investor’s profits from a social housing project can not exceed 10 per cent of total investment in the project.
However, social housing projects have enjoyed many incentives so the selling price has often been lower than in commercial housing projects with similar levels of investment, Dung said.
Investors of social housing projects have proposed ceiling prices for the projects and are waiting on approval from city authorities, he said.
Tran Ngoc Hung, chairman of the Viet Nam Construction Association, said the State should encourage enterprises to build cheap, small apartments without tax incentives, and instead convert tax revenue paid by investors in the projects to a fund for poor buyers. The State can then offer loans from the fund at low interest rates, even zero interest in the first year and 1-2 per cent from the second year.
The State should let enterprises compete according to market rules, Hung said. All tax revenue paid by investors’ projects should be converted into loans for buyers that need social housing instead of being used to support firms that build the houses.
According to a Ministry of Construction report, the Ministry of Planning and Investment is building a plan to allocate funds from the Bank for Social Policies to provide loans for buying social houses.
Meanwhile, the Construction Ministry has asked the bank to create favourable conditions for low-income people and labourers in industrial zones to take loans as soon as possible.
VN property market looks to up transparency
The Vietnamese property market must improve market information transparency to attract investment and develop sustainability, experts said.
Although there are currently many sources for market information--real estate associations, property services firms such Savills, CBRE, JLL and Cushman Wakefield as well as the Ministry of Construction--the information is rarely consistent among market research firms.
In addition, the construction ministry has failed to provide regular market updates and transform the real estate market and housing information system into a reliable source.
Ultimately, experts say that real estate market information of Viet Nam still lacks accuracy and reliability.
Economist Le Ba Chi Nhan said that property market supply and demand information remains very confusing. Consultant firms provide their own sales figures every quarter, but the figures largely differ.
For example, Savills Viet Nam’s report revealed that nearly 11,600 apartments were sold in the second quarter in HCM City, touching a six-year high. The CBRE Viet Nam figure was 9,522.
Savills forecasted that mid-end segment would dominant the supply in the future, while CBRE said high-end segment would improve the second half of this year, and JLL said low-priced housing would lead the market.
Nhan said that these figures were mainly not verified by any independent organisations. Thus, they lacked reliability.
Dang Hung Vo said that market information must be provided adequately to prevent misunderstanding.
For instance, Ha Noi and HCM City recently announced projects at banks, but the announcements failed to mention details and caused confusions and misunderstandings.
Market transparency requires that information be regularly updated, accessed easily and equally, Vo said.
Le Hoang Chau, President of HCM City Real Estate Association, said the Law on Real Estate Business does not specify which organsations and companies can provide market reports. This means anyone can provide their own figures. Of course, each has their own statistical method.
Chau said the construction ministry must develop a market information system, which would provide regular updates about transactions, mortgaged projects as well as planning and policies as a reliable source to ensure market development on the right track.
However, a ministry representative said that real estate price index is just being developed, and it will take time to complete the database.
In 2016, the JLL global real estate transparency index ranked Viet Nam 68 among 109 countries, indicating that Vietnamese property market has low transparency due to difficult access to planning information and the lack of market database.
TAC announces 34% rise in profits in Q2
Tuong An Vegetable Oil Joint Stock Company has reported a 34.2 per cent year-on-year jump in profit before tax in the second quarter to VND63 billion (US$2.7 million).
Net sales grew by 4.7 per cent. The gross profit margin increased from 9.1 per cent to 10.9 per cent.
The company attributed the increase in profitability to a change in its product strategy to focus on higher margin products. It said it would be launching new oil products that are nutritious and healthy in the second half of 2017 to cater the ongoing increase in demand and consumers’ expectations.
The company also plans to introduce new packaged products this quarter as part of its larger strategy to increase utilisation of its distribution network.
SSI reports robust performance in 2nd quarter
Saigon Securities Inc. (SSI) reported pre-tax profits of VND402.3 billion (US$17.7 million) on revenues of VND762.1 billion (US$33.57 million) in the second quarter of the year, up 9.5 per cent and 10.3 per cent year-on-year.
Securities services and principal investment continued to be the biggest contributors to its revenues, with the latter accounting for VND328.5 billion.
Revenues from brokerage services doubled to VND185.9 billion and from securities services were up 52 per cent at VND316.1 billion.
SSI retained its leading position on both the HCM City and Hà Nội exchanges with a 15.35 per cent and 13.67 per cent market share.
Following its solid performance in the first half of the year -- revenues topped VND1.31 trillion ($57.79 million) and profit before tax was estimated at VND735 billion, or 69.5 per cent of the full-year target -- the company is confident of achieving its 2017 business plans.
VEIL inducted into FTSE 250 Index
The Vietnam Enterprise Investments Limited (VEIL) announced it has been inducted into the FTSE 250 Index under the London Stock Exchange (LSE).
"We are extremely pleased to be the first Vietnamese focused investment company to warrant inclusion into the FTSE 250,” Dominic Scriven, executive chairman of Dragon Capital, said in a statement.
“Since moving on to the London Stock Exchange in July 2016, VEIL has gone from strength to strength, benefitting from the strong underlying economic fundamentals of the Vietnamese economy and a highly rigorous investment approach,” he said.
“VEIL’s inclusion in the FTSE 250 should help build on the progress we have made to narrow VEIL’s discount to NAV as a higher profile investment company."
FTSE 250 Index includes 250 stocks that are traded on the LSE with total market capitalisation of 385.52 billion pounds (US$501 billion).
The decision on VEIL’s inclusion in the FTSE 250 Index came into effect on July 18. On July 5, 2016, VEIL was admitted to the LSE – a step that was expected to raise trading liquidity and transparency for the fund certificates.
Launched in 1995, VEIL is a closed-ended, focusing on Viet Nam’s listed and pre-IPO companies in the country that offer attractive growth and value metrics and strong corporate governance.
The fund started with initial value of $12 million. According to the latest announcement, at close of business on July 17, VEIL’s unaudited net asset value reached $1.2 billion, or $5.49 per share.
The top 10 Vietnamese firms in VEIL’s portfolio included dairy producer Vinamilk, phone and accessory distributor Mobile World Corporation (MWG), information-technology FPT Corporation and steel producer Hoa Phat Group, as well as aviation company Vietjet Air and PetroVietnam Gas Corporation.
The value of investment in Vinamilk occupies 12.5 per cent of VEIL’s net asset value, followed by MWG (7.62 per cent), Military Bank (6.9 per cent) and Asia Commercial Bank (5.87 per cent). Total investment in the top 10 Vietnamese companies is equal to 58.6 per cent of the fund’s net asset value.
Mercedes-Benz H1 sales in VN grow by 60%
Mercedes-Benz Vietnam (MBV) reported year-on-year growth of more than 60 per cent in automobile sales during the first half of 2017, its best performance in its 22 years in Viet Nam.
The firm sold a total of 2,900 cars during the period in spite of market fluctuation.
While many automakers are cutting prices of both affordable and luxury models sold in Viet Nam to boost demand, MBV still enjoyed high sales even with its prices ranging from VND1.34-14.45 billion.
The brand also appeared to not be much affected by the upcoming elimination of Viet Nam’s import tariff on ASEAN-made vehicles in early 2018 following the ASEAN Trade in Goods Agreement (ATIGA).
According to MBV, since the beginning of this year, the company has received over 100 orders for luxury model Mercedes-Maybach, with half of them delivered. The new-generation E-Class also saw good sales, with more than 600 units sold since its debut in late 2016.
HCM City: retail sales, services revenue up 10.2% in H1
Ho Chi Minh City’s total retail sales and services revenue are expected to hit nearly VND450 trillion (US$19.8 billion) in the first half of 2017, up 10.2% from the same period last year.
According to Nguyen Phuong Dong, deputy head of the municipal Department of Industry and Trade, of the total, revenue from retail is estimated at VND291 trillion (US$12.8 billion), 64.7% of the total and up 12.1% year-on-year.
During January-June, the Department carried out measures to stabilise the market and connect businesses and banks, while implementing projects to establish an aromatic and chemical business centre, develop the logistics and support industry sector and help enterprises tackle difficulties.
From now until the end of this year, the department will continue measures supporting enterprises, hold a second meeting for municipal leaders and enterprises and complete industry and support industry data to help connect production businesses with distributors, Dong stated.
The department will also speed up the implementation of the supply-demand linkage programme and the “Vietnamese people prioritise using made-in-Vietnam products” campaign, and intensify promotion activities inside and outside the country.
The trading of counterfeit and low-quality products will also be punished strictly, he added.
Workshop promotes sustainable rubber planting
A workshop to promote sustainable rubber forests was jointly organised by the Vietnam Rubber Association (VRA) and the Worldwide Fund for Nature (WWF) in HCM City on July 24.
Vo Hoang An, VRA Vice President, highlighted the fast development of the rubber sector, with rubber forests covering the biggest area among long-term industrial plants in Vietnam, hitting about over 976,000 hectares in 2016.
In 2016, rubber wood made up 22.1 percent of the country’s total wood export values, and 31.7 percent of the sector’s export value.
He underlined the increasing trend of using forest-based products with legal origin or sustainable forest management certification in the context that countries are making every effort to cope with global climate change.
Forest certification is considered a tool for sustainable forest management, thus ensuring socio-economic development and environment protection goals.
According to Le Thien Duc from WWF Vietnam, around 230,000 hectares of forests have been granted with the Forest Stewardship Council (FSC) certification, accounting for 42 percent of the target set for 2020.
Vietnam has yet to submit the FSC its national standards on sustainable forests management, Duc said.
Meanwhile, Truong Minh Trung, Deputy Director General of the Vietnam Rubber Group, said Vietnam has no rubber forests granted with FSC certificate.
Wood products with FSC certification have higher prices than normal ones, Truong said, adding that his group will step up FSC-met forests planting in its member units.
According to the WWF, in order to develop rubber forests sustainably, the rubber forests must follow Vietnamese and international law, gaining local support and respect while minimising their impacts on the environment.
Amended decision on anti-dumping measures against imported steel
The Ministry of Industry and Trade (MoIT) issued Decision No.2574/QD-BCT on amending Decision No.3584/QD-BCT dated September 1, 2016 and Decision No.1105/QD-BCT dated March 30, 2017 on taking anti-dumping measures against imported plated steel.
According to the new decision, Vietnam will exclude Hong Kong from the list of countries and territories subject to anti-dumping measures against plated steel imported to Vietnam.
Plated steel of Hong Kong origin that was already exported to Vietnam will receive anti-dumping tax refund.
According to the MoIT’s Vietnam Competition Authority, plated steel imported from China (including Hong Kong) and the Republic of Korea were subject to anti-dumping measures under Decisions No.3584 and No.1105.
Vietnam, Laos work closely to promote trade
Since Vietnam and Laos set up diplomatic relations in 1962, the relationship between the two countries has flourished thanks to efforts from both sides to make ties deeper and more effective, especially in economy, trade and investment.
According to Deputy Minister of Industry and Trade Tran Quoc Khanh, since a bilateral trade agreement was signed in March 3, 2015 and a border trade agreement was inked on June 26, 2015, trade ties between the two countries have developed.
Launching the Vietnam-Lao trade website at www.vietlaotrade.com has also fostered connections and trade exchange between business communities of both sides.
Deputy Minister Khanh said the website aims to provide the business community timely and comprehensive information on economic, trade, industry regulations, mechanisms and policies as well as trade promotion activities, aiming to better serve enterprises of both countries and make information cheaper to access.
Statistics of the Ministry of Industry and Trade (MoIT) showed that as of March 2017, trade between the two countries reached 236 million USD, up 4.3 percent year on year, with Vietnam’s exports at 135 million USD, a rise of 22.6 percent.
Meanwhile, Vietnam imported 101 million USD worth of goods from Laos, down 13.1 percent over the same period last year, resulting in a trade surplus of 34 million USD for Vietnam.
Vietnam mostly exported fuel, steel, iron, transportation vehicles and spare parts to Laos, while importing rubber, fertiliser, ore and minerals.
To celebrate the 55th anniversary of Vietnam-Laos diplomatic relations and 40 years of the Vietnam-Laos Treaty of Amity and Cooperation, a trade fair was held from June 29-July 3 in Vientiane to encourage stronger economic, trade and investment cooperation between the two countries.
Meanwhile, two-way trade between Vietnam and Laos dropped about 20 percent in 2016, mostly because the Government of Laos stopped exporting woods and minimised imports of some products the country can supply itself such as cement, iron and steel. Trade competition in Laos has also become fiercer.
Recently, Minister of Industry and Trade Tran Tuan Anh had a meeting with Lao Minister of Industry and Commerce Khemmany Phonexena to discuss the fall in trade and seek measures to promote bilateral trade.
The two sides have agreed to work closely in building a bilateral trade development plan for the next 10 years, and to strengthen communications on the bilateral trade and border trade agreements.
To fulfil the target of 4 billion USD in two-way trade in 2020, the two sides will launch new cooperation projects in Laos and assist existing projects, while carrying out the agreement on border and border gate management and the protocol on borderline and national border markers.
The MoIT will also review Vietnamese projects in Laos to seek measures to support investors.
Australia partially ends probe against Vietnam’s zinc coated steel
The Anti-Dumping Commission (ADC) under the Department of Industry, Innovation and Science of Australia has announced the partial rescission of its anti-dumping and anti-subsidy investigation on Vietnamese zincs coated (galvanised) steel.
Among the countries under the ADC’s probe, which also looked into zincs coated steel imported from India and Malaysia, only Vietnam gets the partial termination.
According to the Vietnamese Ministry of Industry and Trade (MoIT), the ADC concluded that Vietnamese galvanised steel producers and exporters received countervailable subsidies from the Government during the investigation period but the subsidies never exceeded the negligible level.
Therefore, the ADC decided to terminate the anti-subsidy investigation against all Vietnamese galvanised steel producers and exporters.
Besides, the commission will not give any recommendations about subsidies for Vietnam in its final report to the Minister for Industry, Innovation and Science.
The investigation also found that two out of the three Vietnamese producers and exporters who fully cooperated with Australian investigators had the dumping range lower than the minimal level. Hence, the commission has terminated the investigation into the two companies.
The MoIT said that, the Australian commission took into account complaints from concerned parties, the statement of essential facts (SEF), comments relating to the SEF and information it received from the investigation process to make the decision.
Parties may seek a review of the decision by lodging an application with the Anti-Dumping Review Panel within 30 days of publication of the notice.-
DOC stops anti-dumping investigation against VN polyester fibre
The US Department of Commerce (DOC) has announced the termination of anti-dumping investigation on polyester fibre imported from Vietnam.
Earlier, on June 20, DOC officially initiated the investigation on polyester fibre imported from Vietnam, China, India, the Republic of Korea and Taiwan (China) based on petitions filed by DAK Americas LLC; Nan Ya Plastics Corporation, and Augira Polymers.
The plaintiffs alleged that polyester staple fibre products are being shipped to the US at prices lower than their normal value. In addition, dumping has caused significant damage to the domestic industry due to price depression.
The scope of these investigations covers fine denier polyester staple fibre, not carded or combed, measuring less than 3.3 decitex in diameter, coded HS: 5503.20.0025.
The withdrawal of the lawsuit was requested for only Vietnam, and the investigation still continues with China, India, the Republic of Korea and Taiwan (China).
According to the Ministry of Industry and Trade, Vietnam exported about 13,000 tonnes of fine denier polyester staple fibre with an estimated 12.4 million USD to the US in 2016, ranking third behind China (79.4 million USD) and India (14.7 million USD).
Taiwan expo to showcase green technologies
Environmentally friendly technologies will be showcased at Taiwan Expo 2017 at the Saigon Exhibition and Convention Centre in district 7 from July 26-28.
With the theme of Greener Tech – Smarter Life, the exhibition will bring opportunities for stronger business ties between Vietnam and Taiwan.
As many as 150 Taiwanese exhibitors operating in the fields of agriculture, fishing, health, employment, food processing, tourism and education are scheduled to take part in the event.
At the exhibition, many workshops related to trade promotion and green energy development as well as other issues will organised.
Vietnam imports many products from Taiwan, including machines and equipment for production.
By the end of May, Taiwan has had 2,526 investment projects worth 32.4 billion USD in Vietnam.
Bac Lieu reviews FAO-funded project on shrimp farming
A FAO-funded project has identified the causes of shrimp breeding failure in Soc Trang and Bac Lieu province, it was reported at a seminar held by the Department of Agriculture and Rural Development of southern Bac Lieu province on July 21.
The project, began in 2016, was a joint effort of the Soc Trang and Bac Lieu departments of agriculture and rural development, the United Nations Food and Agriculture Organisation (FAO) and the Research Institute for Aquaculture No.2.
Participating scientists and specialised engineers attributed shrimp breeding failure to dramatic changes in the local environment as a consequence of climate change, poor investment in pond’s conditions and equipment, and farmers’ lack of knowledge and expertise.
Based on the finding, the project has helped 20 farming households pilot a sustainable shrimp breeding model through providing them with shrimp fry and training in farming techniques. As a result, they have earned higher incomes and gradually mastered technological application.
Speaking at the event, FAO chief representative in Vietnam Jong Ha-bae said FAO will work with the Ministry of Agriculture and Rural Development’s agenciesto work out advanced shrimp farming models adaptive to climate change in order to ensure farmers’ livelihoods and protect the environment, contributing to the sustainable development of the shrimp sector.
Conference promotes tourism in Ha Giang
A conference to promote tourism in the northern province of Ha Giang took place in Ho Chi Minh City on July 21.
Speaking at the event, Director General of the Vietnam National Administration of Tourism Nguyen Van Tuan said tourists to Ha Giang could enjoy pristine and impressive natural landscapes, and the special culture of the northwestern plateau. It is also home to unique heritages of the nation and the world.
In order to develop local tourism, he urged joint efforts of the provincial authorities and tour operators at home and abroad.
Nguyen Van Son, Chairman of the provincial People’s Committee, said tourist arrivals in the province grow nearly 32.5 percent on average each year.
He called on domestic and foreign investors to engage in tourism projects in the province and committed all possible support to them.
Tran The Dung, Director of a Ho Chi Minh City-based travel agency, said the province should further tap existing adventure tours at Tu San mountain, and tour route of Gam river, Bac Me and Hoang Su Phi terraced field.
He suggested extending road from the National Highway 4C to Lung Khuy village which is home to a pristine stone cave with strange-looking shapes.
Statistics from the provincial Department of Culture, Sports and Tourism showed that nearly 470,000 people visited Ha Giang in the first half, 85,000 of them were foreigners. The total revenue surpassed 417.8 billion VND ( USD) in the period, up 11.2 percent annually.
The province now has two outbound travel agencies and five others specialised in domestic tours.
On the occasion, the tourism associations of Hanoi, Ha Giang, Ho Chi Minh City and Ba Ria-Vung Tau, inbound and outbound travel agents signed an agreement to promote local tourism.-
Conference seeks ways to improve tourism services
Representatives of over 200 tourism businesses attended a conference on improving management of tourism operations on July 21 in Ho Chi Minh City.
Vietnam served more than 6.2 million foreign tourists in the first six months of the year, up 30.2 percent against last year, and 40.7 million domestic travellers, said Nguyen Van Tuan, Director General of Vietnam National Administration of Tourism (VNAT) at the event, which was co-held by the VNAT and Vietnam Tourism Association.
Tuan added that Vietnam raked in 254.7 trillion VND ( 11.2 million USD) from tourism, a year-on-year increase of 27.1 percent.
Towards the goal of 13 million international visitors in 2017, the country needs to enhance tourism quality and services by checking and reshuffling tourism activities, he noted.
The Director General suggested travel agencies and hospitality establishments should proactively take measures to upgrade service quality for the development of tourism as a key economic sector, adding that the Administration will continue inspecting and withdrawing star-standard certifications of disqualified hotels.
It will work with local authorities to organise inspections of tourism sites and travel agents in the time ahead, he noted.
Vu The Binh, Vice Chairman of Vietnam Tourism Association, suggested that it is necessary to give training to tour guides on the 2017 Tourism Law as well as professional skills.
He added that the Association will coordinate with the VNAT to provide businesses with latest update on tourism management policies and the Tourism Law.
Vietnam, Indonesia agree to lift two-way trade to 10 billion USD
Deputy Prime Minister Vuong Dinh Hue and Indonesian Vice President Jusuf Kalla agreed to the aim of lifting two-way trade to 10 billion USD during a meeting in Jakarta on July 21.
The two leaders vowed to actively seek opportunities for economic cooperation towards the goal, and at the same time continue stepping up national defence-security ties through maintaining joint working group of the two navies, accelerating the launch of a hotline, organising joint activities in search and rescue towards conducting joint patrols at sea.
They also agreed that the two countries will accelerate negotiations for the early signing of an agreement on demarcation of their exclusive economic zones and an MoU on marine and fishery cooperation.
Both sides committed to working closely together to strengthen solidarity and internal unity of ASEAN and to maintain consensus and ASEAN’s central role in regional issues, the East Sea issue and at regional and global forums.
They agreed to enhance cooperation to maintain peace, stability, security, maritime and aviation safety and freedom in the East Sea.
Vice President Jusuf Kalla affirmed that Indonesia supports Vietnam in successfully fulfilling its role as Chair of APEC 2017.
At the ASEAN Secretariat headquarters, the Vietnamese Deputy PM said ASEAN has recorded significant achievements in maintaining its central role and has become an important forum for Southeast Asia and related countries to hold dialogue for the common goal of preserving peace, stability and sustainable development of the region, while providing support for its member countries.
He affirmed that Vietnam considers ASEAN the foundation of and one of the top priorities in its external policy and vows to work closely with member states to successfully build the ASEAN Community on all the three political, economic and socio-cultural pillars and strengthen the bloc’s central role in the region.
The Vietnamese government is taking a range of measures to effectively implement contents set in the ASEAN Vision 2025, towards a resilient and people-centred grouping of comprehensive growth, he said.
The ASEAN Secretary-General spoke highly of Vietnam’s active contributions to ASEAN since it joined the bloc in 1995, including its role in the formulation of the bloc’s major documents such as the ASEAN Charter 2007, the Hanoi Declaration on ASEAN Vision 2020, the ASEAN Community Vision 2025, blueprints for the bloc’s pillars and other important agreements.
He pledged to coordinate with Vietnam in the implementation of the Master Plan on ASEAN Connectivity 2025 and the third-stage working plan for the ASEAN Integration Initiative.
In the evening the same day, Deputy PM Vuong Dinh Hue left Indonesia for Australia and New Zealand.
Vietnam may relax rules to assist foreign flyers who lose passports
Tourists are seen arriving at Tan Son Nhat International Airport in Ho Chi Minh City.
The administration of the south-central province of Khanh Hoa, a popular destination for international tourists thanks to its beachside city of Nha Trang, has suggested allowing foreigners to fly domestically even if they have lost their passports in Vietnam.
All they have to do is apply for a confirmation letter from local police and use that document to complete check-in procedures, according to a proposal sent to the Ministry of Transport and the Civil Aviation Authority of Vietnam.
At present, visitors who lose their passports must physically go to the consular agency of their countries, normally in Hanoi, Ho Chi Minh City or Da Nang.
In some cases, tourists will have to travel by air to reach these cities, while current regulations stipulate that they must have the original copies of their passports to check-in.
The Khanh Hoa administration said its proposal would save tourists this inconvenience.
The CAAV has shown its support for the proposal in a document sent to its superior body, the transport ministry, which will give the final conclusion.
TUOI TRE NEWS
Experts deny worries over trade deficit towards ROK
Some experts have raised concerns over the Republic of Korea (ROK) surpassing China in trade deficit, to become Vietnam’s biggest import market, however, others claimed these worries unfounded and considered it normal as Vietnam is integrating into the world economy.
Origins of trade deficit towards the ROK
Since April 2017, the ROK has taken over China to become Vietnam’s biggest import market with US$9.3 billion of trade deficit for the first four months of 2017, slightly larger than China in this period.
For the first half of 2017, Vietnam’s trade deficit towards the ROK totalled US$16 billion, while it was US$14.1 billion towards China.
Many think that the leading position of the ROK derives from the huge import volumes of Samsung and LG manufacturing facilities in Vietnam.
In a quarterly meeting, a representative of the Ministry of Industry and Trade (MoIT) confirmed that Vietnam’s huge trade deficit towards the ROK was related to big South Korean enterprises in Vietnam, such as Samsung and LG.
“Samsung and LG’s local factories have imported a large number of machinery, equipment, and materials for their manufacturing activities, leading to the growth of Vietnam’s trade deficit towards South Korea,” the representative said.
Vietnam has been importing from the ROK for a long time, but the import volume has significantly increased since 2008, when Samsung made its first large-scale investment in the country, which resulted in an investment wave from the ROK. Currently, Samsung has invested more than US$17 billion in Vietnam and LG over US$5 billion.
From early 2017, Samsung Display Vietnam and LG Display Vietnam’s expansion projects have raised the number of imports from the ROK. In addition, according to MoIT, as the Vietnam-South Korea Free Trade Agreement (VKFTA) became effective, duties imposed on components and materials imported from the ROK dropped to zero, while duties on Chinese imports remained, meaning the increase in imports from South Korea is normal.
No concerns over rising trade deficit towards the ROK
There have been some concerns over the rising trade deficit towards the ROK, but Tran Thanh Hai, deputy director of MoIT's Import-Export Department insisted that this rising trade deficit was normal.
The reason is that in the first half of 2017, big South Korean enterprises in Vietnam largely imported machinery and equipment. Besides, the increasing imports of oil and gasoline and textile materials from the ROK were also contributing factors.
According to Dr Nguyen Duc Thanh, head of the Vietnam Institute for Economic and Policy Research, Vietnam’s trade deficits towards China and the ROK are very different. Imports from China are consumer goods, while those from the ROK are materials, machinery, and equipment used for manufacturing.
Thus, increasing trade deficit towards South Korea is normal and it should not be much of a worry.
An economist told VIR that as Vietnam is more and more deeply integrated into the world economy, economic performance should be assessed in the global context.
“We have a trade deficit of US$16 billion towards the ROK, but we have trade surplus towards other countries,” he said.
The economist took the example of Samsung which may import a lot of materials and components from the ROK to manufacture mobile devices, but exports the finished products all over the world, not only to the ROK.
According to statistics of the General Department of Vietnam Customs, in the first half of 2017, Vietnam exported over US$1.7 billion of mobile phones and components to the ROK, while the amount of such exports to the US was worth more than US$2 billion.
Moreover, the amount of mobile phones and components to the United Arab Emirates was US$1.9 billion, to the UK more than US$861 million, to Brazil US$408 million, to India more than US$240 million, and to Germany US$860 million.
Samsung has increased Vietnam’s trade deficit towards the ROK, but at the same time, it contributed more than US$40 billion to Vietnam’s export turnover last year. This year, this amount may rise up to US$50 billion.
In addition, as the localisation rate of Samsung Electronics Vietnam in the northern province of Bac Ninh and Samsung Electronics Vietnam Thai Nguyen in the northern province of Thai Nguyen has increased to 57%, the added value that Samsung has brought to Vietnam is considerable.
Similarly, LG and other South Korean enterprises in Vietnam may import a large number of materials, machinery, and equipment from the ROK, but they also export to many other countries.
Heavy dependence on a single market is not good, but to accurately assess Vietnam’s trade deficit towards the ROK, the matter should be considered in the global context.
Mekong Delta authorities warn about excessive rice stock
Electronic toll collection to begin in south
HÀ NỘI - Four more toll stations in the southern region will be equipped with electronic toll collection (ETC) systems in the next two months.
An ETC station on the stretch of National Route 1 going through the central province of Quảng Bình. - VNA/VNS Photo Việt Hùng
S Korean banks to expand in VN
HÀ NỘI - In addition to the wave of investments in the banking and finance sector from financial institutions in Japan, UK, Hong Kong, Singapore, Malaysia and the US, there will be a marked presence of South Korean banks in the Vietnamese market in the near future, observers forecast.
The observers, who declined to be named, told Trí thức trẻ (Young Intellectual) online newspaper that there could be big deals involving South Korean companies in the future, following a series of co-operation agreements between South Korean and Vietnamese financial institutions recently.
In the middle of July, a major South Korean bank, Daegu, announced that a comprehensive co-operation agreement had been signed with Việt Nam’s Orient Commercial Joint Stock Bank (OCB).
Nguyễn Đình Tùng, general director of OCB, said Daegu would support OCB in various areas, such as international money transfer, product development, SME services, training exchange programmes on risk management, information technology, and product development in South Korea.
Daegu Bank has pledged to provide the best companion programmes to facilitate OCB’s growth among the South Korean business community in Việt Nam, and to share its experience so that OCB will eventually hold a 50 per cent market share in SME services in the country.
In South Korea, Daegu holds over 50 per cent of the market share in the loans to local small- and medium-sized enterprises (SMEs) area.
In mid-April, Korea Development Bank (KDB) marked its presence in Việt Nam through a comprehensive co-operation agreement with Commercial Joint Stock Bank for Investment and Development of Việt Nam (BIDV).
KDB is the top bank in South Korea in terms of total assets and equity, and ranks 94th in the world. It has a presence in 22 countries.
With the State holding around 95 per cent of its charter capital, BIDV, which tops Việt Nam’s commercial banks in total assets, has most room for foreign investors among Việt Nam’s privatised banks, of up to 30 per cent.
Ever since BIDV’s shares were listed on the stock market in 2014, its leaders have repeatedly stated that the bank is looking for foreign strategic partners, and could sell 25 to 30 per cent of its stake. With the co-operation, there is a possibility that the Korean partner may become one of BIDV’s strategic shareholders.
Besides co-operation agreements, financial institutions from South Korea have also been taking more direct, stronger steps into the Vietnamese financial market.
Take the case of Shinhan Bank, which received a licence and became one of the first five banks with 100 per cent foreign capital in Việt Nam in 2008.
In April this year, Shinhan surpassed its four rivals to acquire the lucrative retail segment of ANZ Vietnam.
Previously, after acquiring a 50 per cent stake in Shinhan Vina (a joint venture between the Commercial Joint Stock Bank for Foreign Trade of Việt Nam or Vietcombank and Shinhan Bank with 50 per cent stake for both), the bank was renamed Shinhan Bank Vietnam in 2011.
ANZ’s retail segment serves around 125,000 individual customers in Việt Nam and A$320 million in outstanding loans. The handover is underway and expected to be completed before the end of 2017, sources revealed.
In November last year, the largest lender by assets in the Republic of Korea Woori Bank also officially set up a wholly foreign-owned bank in Việt Nam. The bank’s representatives said that Woori Bank would boost its retail business and target becoming the top foreign credit bank in the Vietnamese market.
With the advantage of established trade relations, Việt Nam’s untapped potential and global integration goals will make it an ideal destination for South Korean banks. So Vietnamese banks, though they have been receiving investments, should be well-prepared to compete, if they want to survive and grow.
While Vietnamese banks are still struggling to lend to FDI firms and have seen very modest results in the area, foreign banks, especially South Korean ones, are showing much stronger initiative in not only providing loans to local enterprises but also to Việt Nam’s huge projects.
Most recently, South Korea’s Keximbank expressed interest in investing in several metro lines in HCM City and received enthusiastic support from the transport sector. Minister of Transport Trương Quang Nghĩa has encouraged Keximbank to invest not only in the metro lines in HCM City, but also in metro projects in Hà Nội. In particular, Nghĩa hopes Keximbank will fund three other transport projects of Tân Vạn-Nhơn Trạch, Lộ Tẻ-Rạch Sỏi and Mỹ Thuận 2 bridge. - VNS
Private SMEs tackled by inaccessibility to bank loans
Inaccessibility to bank loans is one of the main factors that has prevented private small and medium-sized businesses from further development, experts say.
Customers make borrowings at a VPBank’s office in Khanh Hoa Province.
Private businesses have made significant developments in all fields, sectors and regions. According to 2016 data from the Statistics General Department, the private sector contributed 40 per cent of the total GDP and generated 51 per cent of jobs across the country.
Though the Government, the State Bank of Viet Nam and local banks have made efforts and solutions to help private businesses access bank loans, there are still troubles for them to receive financial support.
“About 70 per cent of private businesses cannot access bank loans, though there are many policies that allow local banks to increase their credit growth in the private sector,” said To Hoai Nam, Secretary General of the Viet Nam Association of Small and Medium Enterprises at an online conference held yesterday by the Government portal chinhphu.vn.
SMEs and private companies have to look for other available sources of capital, such as relatives and the black market, which offers high interest rates and risks, according to Nam.
Local banks are often cautious considering business plans of private companies and hardly change their policies to meet businesses’ requirements.
On the other hand, private companies are unable to demonstrate the potential outcomes in their borrowing proposals and comply with bank requirements about the standard form of financial reports, and they often have low-valuated guaranteed assets.
According to economist Nguyen Minh Phong, there are a few main reasons that have kept SMEs from obtaining bank loans.
First, private companies do not have long-term business strategies. Therefore, they prefer available financial loans to those from banks.
Secondly, bank lending rates are often higher than those of other capital sources, and the businesses themselves are not qualified to make loans from banks.
Lower lending standards for SMEs
"Local banks need to change their ways of thinking and have more practical actions in making loans to SMEs," Nam said.
Local lenders should filter 10 per cent of the privates companies – among the 70 per cent of the private companies that have been unable to make bank loans – as potential businesses, he said.
Banks should also redesign lending terms to help private companies become able to access loans, he added. “It is important that banks make unsecured loans for SMEs and allow them to access the long- and middle-term loans.”
Phong said that private companies should merge with each other to raise their status on the market and make their brands more well-known so that they are able to receive loans from banks.
Private companies should also look for other sources of capital such as initial public offering (IPO) on the securities market, he said.
Local banks should improve their risk management mechanisms and lower their standards for guaranteed assets and unsecured loans for private companies, especially newly-established firms in the market, Phong said.
Half private firms take loans for operation: VCCI
Local private enterprises have improved their productions and operations, but half of them still must take operational and production loans, according to the Viet Nam Chamber of Commerce and Industry (VCCI).
VCCI research surveys show that Vietnamese private enterprises had developed robustly since 2000, and they had registered to operate mainly in sectors of commerce, services and construction.
Few of them had joined the production and industry sectors, and local private enterprise contribution to the domestic economy remained limited, said the VCCI.
According to the survey roughly 50 per cent of local private enterprises have taken loans. Large firms commonly took big loans. They have used the loans mainly to stabilise operations, but not to invest in updating equipment and technology.
At 2 per cent, the portion of enterprises using high technology is very low compared to other countries in the region. Small and medium-sized private enterprises have invested only 0.2-0.3 per cent of their revenue to technology reform.
Small and medium sized enterprises (SMEs) and private firms have paid attention to quality of products and strategies on products because of high market demand.
However, SME production has continued a low technology rate and has been mainly based on labour advantages.
Meanwhile, SME managers lack skills, management knowledge and reform experience, leading to a failure to implement regulations on tax, financial management, labour, product quality and intellectual property.
Dau Anh Tuan, head of VCCI Legal Department, said according to surveys on annual production and business results of enterprises, 65 per cent of SMEs and private firms have faced difficulty in seeking for customers while 44 per cent of them have had obstacles in approaching capital. In addition, they mainly have customers on the domestic market.
Local private firms have not joined deeply global supply chains, while the nation has signed free trade agreements with many other countries, Tuan said.
Vietnamese SMEs and private firms have faced limitations in approaching international standards in corporate management. Strategies for distribution, communication and trade promotion have not received reasonable investment. They have put about 1 per cent of their revenue to those strategies, while foreign firms have invested 10-20 per cent of their revenue in that sphere.
Local firms have also not sufficiently researched potential markets, leading to losses, he said.
Experts expect that the Law on Support for Small and Medium Sized Enterprises will partly contribute to the improving business environment and encouraging development of private enterprises, Vietnam News Agency reports.
Especially, the law will have indirect supports related to credit for local SMEs and private firms.
Where is Vietnam’s banking system on the region’s map?
Phan Minh Ngoc, an economist, analyses the indexes to show the health of Vietnamese banks.
Credit growth rate
Reports show that credit in Vietnam has soared since 2015, putting Vietnam among the countries with the highest credit growth rates. However, other developing countries at the same development level with Vietnam also saw relatively high credit growth rates in 2016 and expect the same high growth rates for 2017, just 2-3 percentage points lower than Vietnam’s.
The ratio of credit to GDP
Vietnam has the highest ratio of credit to GDP among the countries with lowest average income and the same development level (122.3 percent in late 2016).
This is the result of a long process when Vietnam tried to boost lending to recover the economy and stimulate GDP growth rate after the regional financial crisis. For several years, the credit growth rate rose 20-30 percent or higher.
Vietnam’s ratio of outstanding loans to total assets is among the highest level in the region, which shows that Vietnamese banks depend more heavily on lending than other regional banks.
With 88.1 percent, Vietnam is just second to Indonesia among countries with the same development level in terms of ratio of credit to mobilized capital.
The capital adequacy ratio (CAR)
Vietnam has the lowest CAR in the region (11.8 percent in 2016), even compared with Indonesia and the Philippines, and it is just higher than India’s.
Vietnam’s CAR is still calculated in accordance with Basel I, while the majority of regional countries now follow Basel II. If calculating Vietnam’s CAR in accordance with the higher standards, Vietnam’s CAR would be even lower.
Net interest margin (NIM)
Ngoc, who analyzed the reports of 25 commercial banks by April 2017, said that the average NIM was 2.4 percent at the end of 2016, a slight decrease from 2.5 percent in 2015.
Vietnam’s NIM is lower than Indonesia, the Philippines and Thailand, but it is far higher than developed countries.
Return on assets (ROA)
ROA shows that the profit made by the 25 Vietnamese commercial banks is relatively low (0.64 percent in 2016), just higher than South Korea’s and Taiwan’s and far lower than ASEAN’s countries, including Singapore.
Ngoc said that existing problems don’t indicate that the attractiveness of the Vietnamese banking system has decreased. In fact, the indexes about profit, including NIM and ROA, have been stable and they have seen little improvements in the last two years.
Thanh Lich, VNN
BUSINESS IN BRIEF 27/7
HCM City, Lotte group seal deal to build Eco Smart City
Representatives from Ho Chi Minh City’s authorities and a Lotte Group joint venture signed a contract on the construction of the Eco Smart City in new Thu Thiem urban area on July 25.
The joint venture consists of Lotte Asset Development, Lotte Shopping, Lotte Hotel and Lotte Engineering and Construction companies.
The construction of the project, worth about 20.1 trillion VND (884.4 million USD), is expected to begin within the third quarter this year.
The contract signing took place as part of a meeting between Chairman of the Ho Chi Minh City People’s Committee Nguyen Thanh Phong and CEO of Lotte group Shin Dong-bin. Both witnessed the signing ceremony.
Receiving CEO of the Republic of Korea conglomerate, Phong vowed to facilitate foreign investors, including Lotte, to operate in the city.
He said Lotte showed serious investment commitments when signing a pact to lease land for its Eco Smart City in the Thu Thiem urban area. The leasing price is 2 trillion VND (88 million USD).
For his part, Shin Dong-bin thanked the local authorities for the favorable conditions it has created for Lotte and called for further assistance to the Thu Thiem project.
He said his group is striving to serve the demand of Vietnamese customers and contribute to the country’s overall development.
US company seeks to build solar energy plant in Can Tho
The Dragon Capital Management Limited of the US discussed its plan to build a solar energy plant with authorities of the Mekong Delta city of Can Tho at a working session on July 25.
The company’s investment director, Gavin Smith, said the city has favourable conditions for such a plant, adding that the company will begin feasibility studies in August, with construction to be started in the first quarter of 2018.
According to him, the plant will be built in two phases, with the first phase having a capacity of 29 MW and the second – 100 MW, with an initial investment of 1 trillion VND (44 million USD).
The city suggested two sites for the future plant, both in the O Mon industrial park, asking the company to submit detailed reports on the construction of radiation measurement stations, the plant’s technical data and safety.
Vietjet Air, Japan Airlines ink cooperation deal
Vietjet Aviation Joint Stock Company (Vietjet Air) and Japan Airlines (JAL) on July 25 signed a cooperation agreement in order to improve their service quality and turnover.
Under the agreement, the two airlines will initially launch a code-share partnership for routes between Japan and Vietnam, their domestic flights as well as flights between Vietnam and other Asian nations.
Besides, they will join hands in regular customer services, technical maintenance, training and ground services.
Japan Airlines Deputy General Director Tadashi Fujita said the Japanese carrier believes that the deal will help increase the numbers of passengers and cargoes between the two countries.
Vietjet Air Managing Director Luu Duc Khanh said Japan is a key market in Vietjet Air’s plan to expand its network across Asia-Pacific.
The cooperation is expected to help diversify products, classify customers, stimulate travel demand in Vietnam and Japan in the time ahead, and enhance links between the two airlines, he said.
The two airlines also discussed the launch of more flights to meet the increasing travel demand of people in Asia and the two countries in particular.
Japan Airlines is conducting routes from Narita airport in Tokyo to Ho Chi Minh City and Hanoi and from Haneda airport in Tokyo to HCM City.
Vietjet is the first private airline in Vietnam to operate as a new-age airline with low-cost and diversified services to meet customers’ demand.
Currently, the airline boasts a fleet of 45 aircraft, including A320s and A321s, and operates 350 flights a day. It has already opened 63 routes in Vietnam and across the region to international destinations such as Thailand, Singapore, the Republic of Korea, Taiwan, Malaysia, China and Myanmar. It has carried nearly 35 million passengers to date.
Khanh Hoa asks faster Cam Ranh airport runway construction
Authorities in the central province of Khanh Hoa have requested a new runway that is under construction at Cam Ranh international airport should become operational in 2018.
The project on Cam Ranh airport’s second runway began in March 2015 and was expected to be completed within 36 months. However, unfavorable weather conditions have deterred the construction from finishing as schedule.
Financed by the State, the project costs over 1.9 trillion VND (83.6 million USD). The construction features a runway, which is 3.048 metres long and 45 metres wide.
Cam Ranh airport was built by the US troops to serve its military missions during wartime and was converted into a civil airport in 2004. It was upgraded to an international airport in 2009. Currently, the airport’s international terminal has a capacity of 1.5 million passengers annually.
In September last year, the construction of a new international terminal at Cam Ranh airport began. The project, worth over 3.7 trillion VND (162.8 million USD) is set to be carried out in three stages. The first stage is planned to be completed in 2018, enabling the terminal to greet 2.5 million passengers annually.
In 2016, Cam Ranh airport handled 4.9 million passengers.
An Giang targets 800 million USD in export turnover
The Mekong Delta province of An Giang is striving to fulfill the target of 800 million USD in export revenue this year by promoting the shipment of rice, aquatic products and vegetables, a local official said.
The province has assisted local enterprises in developing material areas while boosting the export of products with high added value, processed products, said Vo Nguyen Nam, Director of the provincial Department of Industry and Trade.
An Giang has focused on strengthening connections at home and abroad, increasing trade promotion activities, expanding markets and assisting local enterprises in attending fairs and workshops.
The province has also regularly updated businesses on export markets and taken measures to remove difficulties for production firms.
In the first seven months of this year, An Giang shipped abroad over 212,000 tonnes of rice, raking in 98.2 million USD, equivalent to 80 percent in volume and 94.3 percent in value of the same period last year.
The export of frozen aquatic products reached nearly 73,000 tonnes, worth 139.4 million USD, up 3.89 percent year on year.
Apparel exports totaled 10.13 million units, valued at 55.3 million USD, a slight fall in volume, but rising by 5.73 percent in value year on year.
In the reviewed period, the province’s export value exceeded 429.5 million USD, accounting for 52.3 percent of the annual target, up 1.69 percent year on year.
Chinese trade fair to open in Hanoi
The sixth export fair of Zhejiang, China will take place at the International Centre for Exhibition (ICE) in Hanoi from August 3 -5, heard a press briefing on July 25.
Over 100 businesses from the Chinese province, which represent the “Zhejiang Made, All Need” symbol, are displaying their products at 150 booths featuring machinery, electricity and electronic equipment, construction materials, interior decoration, metals, garment and textiles, and consumer products.
The 2017 Zhejiang Export Fair will serve as a bridge, promoting the economic and trade relations between Vietnam and the Chinese province.
Last year, the fair witnessed the signing of contracts worth nearly 24 million USD.
Deputy Director of the Vietnam National Trade Fair & Advertising Joint stock Company (Vinexad) Trinh Xuan Tuan said Vietnam is the biggest trade partner of Zhejiang in Southeast Asia.
Trade between Vietnam and Zhejiang hit 6.7 billion USD in 2016, a yearly rise of 12 percent.
By the end of 2016, 186 enterprises from Zhejiang invested 1.68 billion USD in Vietnam while Vietnam set up 26 enterprises in Zhejiang with total investment of 20 million USD.
Around 250 firms to attend Medi Pharm Expo in HCM City
As many as 250 enterprises operating in the pharmaceutical and medical sectors from 22 countries and territories are expected to display their products at the upcoming medical and pharmaceutical exhibition in Ho Chi Minh City.
Taking place at the Saigon Exhibition and Convention Centre from August 17-19, the Vietnam Medi Pharm Expo 2017 will showcase medical devices, healthcare and pharmaceutical products, functional foods, cosmetic, processing and packaging machines, dental equipment, among others.
Exhibitors will include Vietnamese giant firms and leading global companies from the US, Germany, Italy, France, Ukraine, Belarus, Russia, Uzbekistan, Iran, Turkey, the Republic of Korea, Japan, China, India, Malaysia, Singapore, Pakistan and Thailand.
Workshops will be held within the framework of the expo, with discussions covering Vietnam’smedical market and relevant regulations. A fact-finding trip to a major hospital in HCM City will be organised for foreign exhibitors to study demand for medical check-up and treatment of local residents in HCM City in particular and Vietnam in general.
According to the European Chamber of Commerce in Vietnam, the country’s medical equipment market is valued at465.4 million USD and is expected to reach 1.4 billion USD in 2018.
Meanwhile, Vietnam has only about licensed 50 firms producing 600 devices, most of them are simple equipment, failing to meet the demand of the domestic market.-
Dak Nong earns 50 million USD from aluminium export
The Dak Nong Aluminium Company in the Central Highlands province of Dak Nong, part of the Vietnam National Coal and Mineral Industries Group, has earned 50 million USD from exporting 140,000 tonnes of aluminium and 24,000 tonnes of hydrate so far this year.
The company produced more than 240,000 tonnes of aluminium in the period and expects to generate another 230,000 tonnes by the end of this year.
Most of their products are sold in the Republic of Korea and Japan.
According to experts, Vietnam is endowed with a large amount of bauxite, with estimated reserves of 11 billion tonnes, mainly in the Central Highland region.
The Dak Nong Aluminium Company, built at total cost of 16.8 trillion VND (739 million USD) with a designed capacity of 650,000 tonnes of aluminium per year, became operational in November, 2016 at Nhan Co industrial park in Nhan Co commune, Dak R’Lap district.
Dung Quat oil refinery works on expansion project
The State-owned Binh Son Refinery and Petrochemical Company Limited (BSR) has completed the overall plan for the upgrade and expansion of the Dung Quat Oil Refinery.
Tran Ngoc Nguyen, CEO of BSR, said the expansion project will cost more than 1.8 billion USD, of which equity capital and loan capital will account for at least 30 percent and 70 percent, respectively.
BSR plans to borrow some 1.26 billion USD, Nguyen said, adding that the estimated loan amount is in line with the Prime Minister’s decision on granting approval.
Under the project, BSR will set up and put into operation some additional technology workshops for the processing of crude oil with higher sulfur content, such as Murban, ESPO and Arab Light, increasing the stable supply of petroleum products in accordance with the Euro 5 standard.
Crude oil supply of the refinery will also be significantly increased, thus helping it become less dependent on crude oil supply from the Bach Ho (White Tiger) oil field.
Expansion work is expected to be completed by 2021, following which Dung Quat Oil Refinery will have capacity to refine 8.5 tonnes of crude oil per year.
Manufacturing, processing industry lures FDI
Vietnam’s manufacturing and processing industry attracted 12,075 foreign-invested projects with a total registered capital of 180.68 billion USD as of late June, according to the Ministry of Planning and Investment (MPI)’s Overseas Investment Agency.
Economists attributed the figures to Vietnam’s abundant workforce and several incentives for investors.
At the Vietnam Business Forum recently held in Hanoi, Deputy Prime Minister Vuong Dinh Hue reiterated the Vietnamese government’s policy of considering the foreign-invested sector an extremely important part of the Vietnamese economy.
Head of the MPI’s Central Institute of Economic Management Nguyen Dinh Cung said foreign direct investment (FDI) flowing into manufacturing and processing industry is a positive sign, helping Vietnamese firms access advanced technology.
Vietnam is in the period of golden population with over 6.3 million people of working age, giving the sector an edge to attract FDI.
Hà Giang Province awaits tourism boom
The northeastern border province of Hà Giang boasts majestic scenery, geological features, a diverse eco-system, rare fauna and flora, and the unique cultures of 22 ethnic minorities, but has yet to realise its enormous tourism potential, tourism officials say.
The province has seen average annual growth of 32 per cent in the number of tourist arrivals in the past few years, said Nguyễn Văn Sơn, chairman of its People’s Committee, said.
Last year arrivals numbered nearly 854,000, including 176,500 foreigners.
Revenue from tourism was estimated at VNĐ795 billion (US$35 million), a year-on-year increase of 13 per cent.
In the first six months of this year, there were more than 470,000 tourists, with visitors from HCM City accounting for 35 per cent.
But, speaking at an event to promote Hà Giang as a tourist destination in HCM City yesterday (July 21), Sơn said: “The province’s tourism sector is at an early stage of development and faces obstacles like limited human resources and infrastructure.
“The province promises to offer favourable conditions for domestic and international investors to develop tourism projects.”
Trần Thế Dũng, deputy director of Young Generation, an HCM City tourism company, said the province should offer other tourism products besides the Đồng Văn Karst Plateau Geopark to attract more tourists.
He suggested adventure travel in the Tu Sản alley area, Hoàng Su Phì terraced fields, the Gâm River and festivals of ethnic groups.
The province’s tourism authorities should develop closer co-operation with travel agents and inform them early about activities like festivals to enable them to make tour plans, he added.
In October 2010 the geopark was recognised as a member of the Global Geopark Network, the first in Việt Nam and second in Southeast Asia to achieve the status.
It covers an area of 2,356sq.km and with an average altitude of 1,400-1,600 metres, enjoys a cool climate and a range of different terrains.
There are many grand, deep canyons. Mã Pì Lèng Pass, recognised as the deepest canyon in Việt Nam, is 700-800m deep and 1.7 km long.
Lũng Cú flagpole, the northernmost point of Việt Nam, is a must-see tourism destination for not only Vietnamese overseas who come back for a visit but also for many locals across the country.
Highland unique cultural feature of the 22 ethnic minorities living in the province.
The Hoàng Su Phì terraced fields, recognised as national heritage, is considered one of the most beautiful landscapes in the whole country.
Khâu Vai love market, where people can meet up with their old flames for a chat takes place once a year on the evening of 26th and morning of 27th in the third lunar month in Mèo Vạc District’s Khâu Vai Commune. Due to exessive tourism and intruding photographers, locals say they have moved further to find their own quiet space to meet up with their once loved-ones.
With its inherent appeal, the market has become a unique cultural identity of the ethnic minorities in the region.
The province hopes to welcome 1.5 million tourists by 2020, including 600,000 foreign visitors.
Longan production down, price up
Hung Yen Province is expecting this year’s main longan crop to decline in quantity and ripen a week behind schedule. As a result, prices have shot up by VND7,000 (31 US cents) per kilogramme.
Doan Thi Chai, Deputy Director of Hung Yen provincial Department of Agriculture and Rural Development (DARD), said that due to high temperatures in the winter months of 2016 and the beginning of 2017, the amount of longan blossoms declined in some areas in the province.
Chai also said that since production is expected to go down, the selling price will reach an average of VND35,000 to VND36,000 ($1.55 to $1.6) per kilogramme. A majority of supermarkets and big suppliers have signed contracts with farms and cooperatives in Hung Yen Province at $1.55 per kilogramme of longan.
The decline in longan output may mean trouble for exporters, as the added 31 cents per kilogramme will put further strain on production costs - from transporting and processing to conserving of the fruit, and ultimately drive up export prices.
The DARD forecast earlier this year that Hung Yen longan farms would loose around 40 to 50 per cent of their annual crop.
But at present, the total provincial output is approximately 32,000 to 33,000 tonnes, as opposed to 40,000 last year. Farmers and provincial authorities were able to save a large part of the harvest by using chemical and biological stimuli on the majority of longan trees, and the province’s estimated turnover is just 20 to 30 per cent behind the normal harvest.
Although the main crop is expected to go up in price, the early longan crop, which makes up about 10 per cent of the total harvest in the province, is priced lower than last year.
Despite the usual demand for early crops, the price fluctuates from VND45,000 to VND50,000 ($2 to $2.2) per kilogramme, much lower than the previous years’ price of VND70,000 to VND80,000 ($3.1 to $3.5).
The DARD explained that this is due to yet another late lychee harvest, making the demand for longan drop as consumers are occupied with lychee, instead.
VN leatherware makers make a mark
Many leading fashion houses have switched from Chinese to Vietnamese makers of leatherware, acknowledging the improved quality of leather craftsmanship in Viet Nam, industry insiders say.
The Vietnam Leather, Footwear and Handbag Association (LEFASO) announced recently that Viet Nam was the fifth largest exporter of handbags and suitcases in the world, accounting for 5.4 per cent of global supply.
The country produces over US$3.2 billion worth of handbags, suitcases and backpacks that are exported to 10 major markets. A large number of factories have become trusted producers for major multinational brands.
Nguyen Duc Thuan, LEFASO’s Chairman, said the nation’s leather industry has grown by 10 to 15 per cent per year for the past five years, driven significantly by international fashion brands moving their handbag manufacturing facilities to Viet Nam.
Thuan said a majority of fashion houses have chosen to replace Chinese manufacturers with Vietnamese ones through foreign direct investment.
In the first five months of 2017, the US was the largest market for Vietnamese suitcases, backpacks, and handbags worth $555 million, a six per cent increase over the same period in 2016, according to the General Department of Customs.
The EU was second, importing goods worth $365 million, up 8.2 per cent year on year.
Exports to other main markets included Japan at $146.5 million, up 1.7 per cent; China at $57.6 million, down 6.8 per cent; and South Korea at $52.8 million, down 0.4 per cent.
Nguyen Minh Phong, Head of the Economic Research Section of the Ha Noi Socio-Economic Development Research Institute, had said in June that bag producers in Viet Nam should diversify their export markets, with emphasis on the US and EU markets.
Phong also said that the founding of the ASEAN Economic Community (AEC) in 2015 would pose new challenges for Vietnamese leatherware industry. However, he believed the country could turn this into an advantage and expand exports to other ASEAN markets instead.
He recommended that Vietnamese bag makers work together with their counterparts in Thailand, Malaysia or Indonesia to create better value chains, cut costs and increase productivity, as materials are more accessible within the AEC than outside.
As local bag and suitcase manufacturers mainly perform outsourced tasks for FDI companies, they need to increase investment, expand production scale and improve product quality to gain a foothold in the domestic market.
At present, China still reigns as the world’s largest producer and exporter of backpacks, suitcases and handbags, churning out more than 40 per cent of total global output every year.
Improve implementation of tobacco tax policies, ASEAN urged
ASEAN governments should do more to make their tobacco tax policies more effective, not only for health reasons but also for the budget generation.
This was the recommendation under the tobacco tax index issued by the Southeast Asia Tobacco Control Alliance (SEATCA).
The index was released during a regional workshop on strengthening tobacco tax administration in Siem Reap recently, which was attended by tobacco tax experts from ASEAN countries, including Viet Nam, Cambodia, Indonesia, Laos and Myanmar.
The index tracked progress of the tobacco tax policy against WHO FCTC Article 6 Guidelines and showed that while some countries have made significant progress in formulating and implementing tobacco tax policies, the region as a whole has advanced at a slow pace in the past few years, outpaced by economic and income growth.
According to the index, cigarettes are becoming more affordable in ASEAN countries.
Thailand currently has the highest tax burden as a percentage of retail price (70 per cent), followed closely by Singapore (66.2 per cent) and Brunei (62 per cent). In contrast, countries with the lowest tax burdens are Cambodia (25-31.1 per cent) and Laos (16-19.7 per cent).
Viet Nam, Laos, the Philippines and Thailand have successfully earmarked tobacco excise revenue for tobacco control, health promotion and universal healthcare.
Only four (Brunei, the Philippines, Malaysia and Singapore) out of the 10 ASEAN countries tax all tobacco products in a comparable manner.
Sophapan Ratanachena, SEATCA’s Tobacco Tax Programme Manager, said most countries had no long-term tobacco tax policies with regularly adjusted fiscal and public health targets.
“The major obstacles in some countries are the ineffective tobacco tax structures (such as Indonesia’s multi-tiered system or those with purely ad valorem tax systems), weak tax administration and tobacco industry interference to weaken tax policy or reduce tax collection efforts,” Ratanachena said.
Based on international guidelines, the report urged ASEAN governments to implement long-term tobacco tax policies that include public health targets, apply a uniform specific tax system or a mixed system with a minimum specific tax floor and tax all tobacco products in a comparable way.
The governments should ask tobacco companies to periodically submit detailed financial reports; establish a tracking and tracing system, including fiscal markings with a unique identifier, to reduce the risk and assist in investigation of illicit trade; prohibit tax-free or duty-free tobacco products; and implement a code of conduct for all government ministries and officials that prohibits unnecessary government interaction with the industry.
“Legislating substantial tax increases, strengthening tobacco tax administration and protecting tax policy from tobacco industry interference are equally important for saving lives, raising revenue and controlling illicit trade,” Ratanachena said.
“This was echoed in a resolution adopted in June 2017 by the United Nations Economic and Social Council that not only gives due attention to the Addis Ababa Action Agenda, which recognises that tobacco taxation can be an effective and important means to reduce tobacco consumption and healthcare costs and represents a revenue stream for financing development in many countries, but also encourages UN agencies to develop and implement policies on preventing tobacco industry interference to ensure a consistent and effective separation between the activities of the United Nations system and those of the tobacco industry,” she added.
At the meeting, participants exchanged information, expertise and best practices in the management of tobacco taxes, identifying gaps and ways to strengthen the administration of tobacco taxes in ASEAN.
10th Vietnam annual report awards announced
Bao Viet Holdings, HCM Securities Corporation, PAN, DHG and Traphaco are among the 10 winners of the the Best Annual Report Awards, which were announced on Tuesday in HCM City.
Five others listed companies that were given the Top 10 prize are Novaland, Vingroup, FPT, Asia Commercial Bank and CotecCons.
This year’s annual report awards was organized by the Vietnam Investment Review (VIR), the two HCM and Ha Noi Stock Exchanges and the assets management firm Dragon Capital.
A total of 50 listed companies received a prize.
Vinamilk, apart from being in the 50 top list, was given the sustainable growth report first prize, while HCM Securities Corporation won the corporate management content prize.
The first Annual Report Awards was organized in 2008, with the participation of only 38 listed companies. Six received awards.
This year, the awards attracted 638 companies with 50 winners.
Le Hai Tra, executive member of the HOSE and head of the organising board, said that “transparency and protection of the investors’ legal rights are not only the targets of the legal system on securities and securities market, but also the effort under the name of the Annual Report Awards”.
He said transparency awareness of listed companies has continued to improve since the first year of the awards.
VIR’s editor in chief, Le Trong Minh, expects to promote the quality of information release to boost the raking of Viet Nam’s market and encourage businesses to employ international practices on corporate management and risk management toward sustainable development.
He also hopes to attract the participation of professional institutions--local and international--in the awards jury so that the awards will be widely recognized by international investors.
FPT reports H1 results
FPT Corporation recorded consolidated revenue of over VND20.1 trillion (US$882 million) in the first six months of this year, up 13 per cent year-on-year.
The figure is equal to 102 per cent of the target for the period.
Profit-before-tax was about VND1.42 trillion, increasing by 13 per cent year-on-year and equal to 102 per cent of the target. Profit-after-tax was VND1.2 trillion, up 12 per cent year-on-year.
Profit-after-tax attributable to the parent company’s shareholders was VND925 billion, up 13 per cent year-on-year. Earnings-per-share was VND1.7 trillion in the six months, an increase of 12 per cent compared with the same period last year.
FPT’s earnings growth in the first half of the year continued to be driven by the two core business sectors -- technology and telecom -- which together accounted for 75 per cent of consolidated profit-before-tax of the group.
More specifically, profit-before-tax of the technology and telecom sectors increased by 27 per cent and 17 per cent year-on-year, respectively.
The distribution and retail sector achieved 103 per cent of revenue and 104 per cent of profit-before-tax targets for the period, of which the retail segment continued to perform outstandingly in the first six months, up 31 per cent in revenue and 44 per cent in profit-before-tax.
During the reported period, FPT’s overseas markets recorded revenue of more than VND3 trillion, up 14 per cent, and profit-before-tax of VND450 billion, up 19 per cent.
Pure Storage introduces data platform for VN businesses
Pure Storage unveiled its vision of a data platform for the cloud era at an event on Tuesday in Ha Noi to help customers accelerate innovation and business transformation.
To help organisations in Viet Nam put their data to work, the company announced its new data platform that includes more than 25 new software features and comprehensive hardware updates. They are set to deliver the speed, agility and intelligence that businesses in Viet Nam need to stay competitive in terms of scale.
“Modern digital businesses require a data platform that eradicates all complexity while enabling business to build a new class of applications, to extract new insights from data and to do so in real-time,” Pure Storage CEO Scott Dietzen said.
“Businesses need to understand how to use the entire data ecosystem -- cloud and on-premises-- to put their data to work and mine insights to deliver customer results,” Dietzen added.
’Evolution’, a global research conducted by US-based Pure Storage, confirms that a new digital era has arrived in Viet Nam. The survey found that digital transformation is reaching the tipping point across Viet Nam, with 53 per cent of businesses now deriving more than half their revenue from digital streams. However, 48 per cent of businesses cited technical complexity as the main barrier to digital transformation.
HCMC to host export markets forum
An export forum on “Market Identification and Risk Management in Export of Vietnamese Enterprises” will be held in HCM City on August 8 to disseminate the latest information, especially about effective ways and solutions to enhance the competitiveness of domestic firms in key export markets.
Delegates will discuss global and regional markets after the US’s withdrawal from the Trans-Pacific Partnership (TPP), opportunities and challenges for Vietnamese enterprises when participating in global value chains, ways to improve the quality and competitiveness of Vietnamese products, and the difficulties, risks and risk control techniques when promoting exports.
Speakers at the forum will include John Rockhold, executive director of the American Chamber of Commerce in HCM City, Yasuo Nishitohge, general director of Aeon Vietnam, Yuichiro Shiotani, general director of TopValu, and Harry Loh, director of United Overseas Bank (UOB).
Organised by the Investment and Trade Promotion Centre of HCM City, the event will gather around 400 delegates, including Government officials, representatives of local and foreign investment and trade promotion agencies, business associations, consuls general, trade counsellors of foreign countries, and executives from local producers of export goods, logistics enterprises, banks and foreign corporations.
Online business registration beyond expectations
The rate of registered businesses through the official website of Vietnam in the second quarter of 2017 exceeds the 10% that the Vietnamese government required in Resolution 36a, according to the statistics of the Ministry of Planning and Investment.
The latest report on Resolution 36a announced by the Government Office shows that the ratio of business registration through the website http://dangkykinhdoanh.gov.vn in Vietnam is 39.8%, higher than the 31.7% of the first quarter of the year.
Hanoi reached 65.9% and Ho Chi Minh City 51.5%.
Ho Chi Minh City has a private registration channel with a total of 7,565 business registration files, occupying 12.6% of the total business registration files in the quarter.
Resolution 36a on e-government was issued on October 14, 2015, aiming to promote the development of e-government as well as improve the quality and efficiency of state agencies in order to serve people and enterprises better on the Internet platform.
Hong Kong financial group invests in low-cost multiplexes
Financial group Blue HK from Hong Kong signed an investment agreement with Start-up Beta Media JSC to construct low-cost multiplexes in smaller cities and provinces in Vietnam, according to newswire NDH.
According to the agreement, Beta Media is valued at VND600 billion (US$27.5 million). However, the specific value of the agreement and the stakes to be held by the Hong Kong partner have yet to be disclosed.
Previously, Beta Media received investment from Vietnam Investments Group (VIG)—the investor of Galaxy Cinemas and Galaxy Studios, as well as numerous food brands.
Since 2015, with the launch of the Beta Cineplex chain in northern province of Thai Nguyen, Beta Media has built and opened three other cinemas in Bien Hoa city in the southern province of Dong Nai and two in My Dinh and Thanh Xuan districts in Hanoi. Ticket prices are 60% to 65% lower than high-end cinemas in major cities.
Beta Media general director Bui Quang Minh said that by developing cinema theatres in smaller provinces, the company can avoid the fierce competition with large firms.
In 2017, Beta Media plans to open six more multiplexes in the central province of Thanh Hoa, the northern province of Bac Giang, as well as Hanoi, Nha Trang and Ho Chi Minh City, increasing the number of its total multiplexes to 10. The figure is expected to reach 20 by 2018.
At present, five leading businesses hold 98% of the Vietnamese film distribution market, three of whom are foreign-invested.
They include CJ CGV with 43%, Lotte with 30%, Platinum with 10%, Galaxy with 9%, and BHD with 6%.
CJ CGV, owner of the CGV cinema chain, now has 38 cinema complexes in Vietnam alone, with 247 projection rooms, an increase of 20% over 2015.
Lotte Cinema is CJ CGV’s biggest rival, holding 30% of the market share. Owning 29 cinema complexes in the country, Lotte Cinema has a high average growth rate, even higher than CJ CGV’s.
Dutch company signs wastewater contract in south
The Netherlands’ Royal HaskoningDHV has recently signed a $11.07 million contract with the Ba Ria Vung Tau Urban Sewerage and Development Company (BUSADCO) to implement a complete wastewater solution for over 175,000 residents of the Phu My New Urban Area in southern Ba Ria Vung Tau province.
The project will deliver sanitation to residents and industries whose wastewater is currently discharged untreated, resulting in high levels of environmental pollution. The Dutch Government is financing the project as part of its Facility for Infrastructure Development (the ORIO program) in developing countries. The project is expected to be completed by the end of 2019.
The new sewage plant will use Royal HaskoningDHV’s Carrousel technology, a proven, cost-effective, reliable, and highly efficient system now applied in some 1,500 wastewater treatment plants around the globe for the biological treatment of municipal and industrial wastewater. The plant will have a treatment capacity of almost 30,000 cu m per day.
The project also includes the construction of four pumping stations, over 100 km of pipelines, and connections to 15,000 households and over 1,000 small and medium-sized enterprises (SMEs). During the operation and maintenance phase, the team will also provide technical assistance and staff training.
“The construction of a complete wastewater collection and treatment system for the Phu My New Urban Area has become an urgent issue and a top priority for economic and social development in Ba Ria Vung Tau province,” Mr. Hoang Duc Thao, Chairman of BUSADCO, told the signing ceremony.
“Since we started to define the need for proper sanitation in this area, all stakeholders have been focused on making this project happen,” said Mr. Doan Manh Thang, Royal HaskoningDHV’s Director of Water, Vietnam. “We have worked closely with BUSADCO, local authorities, and the Dutch Government to define, design, and now implement this much-needed solution. The environmental benefits will be visible in significantly improved water quality in the area’s lakes, canals, and the Thi Vai River, and will result in better living conditions for residents. It will also help SMEs protect the quality of the environment around their businesses.”
The wastewater solution for Phu My is the third ORIO-funded project in Vietnam that Royal HaskoningDHV will implement. ORIO encourages public-infrastructure development in developing countries.
The scheme will improve the living conditions of approximately 400,000 people. It also adds to the company’s growing number of environmental improvement schemes in Vietnam, of which ten are ongoing.
Packaging and printing industry on the rise
Vietnam’s packaging and printing industry has been developing strongly over the last few years due to increasing demand triggered by rising local food consumption and exports, a recent technical seminar on the industry held by German Industry and Commerce in Vietnam (GIC) in cooperation with Germany’s Messe Düsseldorf Asia Pte Ltd in Ho Chi Minh City heard.
Major challenges face the domestic packaging and printing industry, however, as new technologies are in short supply and those in use create only simple designs and patterns. Such challenges result in local enterprises not fully participating in global value chains and losing sustainable benefits.
Solutions raised by industry insiders included the application of advanced technologies in production, the use of new materials, and investment in modern production lines, to increase efficiency and ensure product quality.
German experts introduced the development of the world’s packaging and printing industry, technological solutions for Vietnamese packaging enterprises, supporting technologies for printing and packaging design in line with the demand and potential of the industry in Vietnam, and development trends in the future.
The seminar aimed to link trade and technology exchanges between German and Vietnamese enterprises so that the latter in the packaging and printing industry can access the latest technological information.
According to figures from the German Engineering Federation (VDMA), the packaging industry for processed food in Vietnam will grow 38 per cent between 2015 and 2020, while demand for machinery and materials will also increase, by 25 per cent.
There are now some 1,500 industrial packaging and printing enterprises operating nationwide, earning total revenue of more than $2 billion a year.
Vietnam’s packaging and printing industry has grown significantly in recent times, at an average of 15-20 per cent annually.
The expansion of industrial production has contributed to the growth of industrial packaging and label printing in the country, according to the Vietnam Printing Association.
“Technology is considered key in the packaging and printing industry moving further ahead in the global context,” Mr. Gernot Ringling, Managing Director of Messe Düsseldorf Asia, told the seminar. “Vietnamese producers should focus on applying the latest technologies from Europe, the US, and other parts of Asia to remain competitive.”
The seminar was organized to introduce technical developments in printing and packaging, solutions for smart packaging, the importance of workflows in a modern print environment, and diversification and individualization in the future.
It attracted the participation of nearly 200 domestic enterprises in the field.
Vietnam removes Hong Kong from steel dumping list
Vietnam has lifted anti-dumping duties on galvanized steel imports from Hong Kong, according to the Ministry of Industry and Trade, Lao Dong newspaper reports.
The ministry issued two decisions on anti-dumping measures, namely Decision 3584/QD-BCT dated September 1, 2016 on temporary anti-dumping duties and Decision 1105/QD-BCT dated March 30, 2017 on anti-dumping duties on galvanized steel imports from China (including Hong Kong) and South Korea.
After a review, the ministry issued Decision 2754/QD-BCT on July 20, 2017 amending Decision 3584 and Decision 1105. Vietnam now removes anti-dumping duties on galvanized steel imported from Hong Kong in line with the Decision 2754.
Sabeco says has selected consultant for State divestment plan
Saigon Beer, Alcohol and Beverage Corporation (Sabeco) has chosen a consultant for drawing up a plan to further divest State capital in the company later this year.
A report on Sabeco’s first-half performance shows its board of directors approved on June 28 a scheme on negotiations for choosing a consultant for its divestment plan.
The report does not disclose the name of the consultant but says the consulting partner was chosen in late April when Sabeco considered consultants for a service package called Solutions for implementing the divestment of the State stake at Sabeco. However, a source from the Ministry of Industry and Trade said it was a tripartite alliance.
Bui Truong Thang, deputy head of the Light Industry Department under the ministry, told a press conference in the middle of this month that the alliance groups Ernst and Young Vietnam Co Ltd, Bao Viet Securities JSC, and Southern Information and Valuation Corp. The alliance has been chosen to advise Sabeco on sale of its State-owned stake, which is an overwhelming 89.59% and held by the Ministry of Industry and Trade.
Thang added Sabeco has been drawing up a plan for the divestment of its State capital, which will be submitted to the ministry prior to the end of this month.
Upon the Prime Minister’s approval on the plan, the ministry will take steps to divest the State stake in Sabeco in line with prevailing regulations. The process is expected to be completed later this year.
The board of Sabeco at their general meeting on April 18 proposed the trade ministry divest the State stake as soon as possible to turn the country’s leading brewery into a real public company by nature, and that the stake be put up for auction on the local stock exchange. Sabeco has been listed on the Hochiminh Stock Exchange.
Sabeco put its after-tax profit at around VND4.65 trillion last year, and paid a dividend of 30%.
The corporation aims for total beer sales of over 1.7 billion liters worth around VND34.47 trillion this year. It targets an after-tax profit of VND4.7 trillion and a dividend of 35% for 2017. The total tax amount to be paid this year is expected at VND9.26 trillion.
HCM City to host export markets forum
An export forum on “Market Identification and Risk Management in Export of Vietnamese Enterprises” will be held in HCM City on August 8 to disseminate the latest information, especially about effective ways and solutions to enhance the competitiveness of domestic firms in key export markets.
Delegates will discuss global and regional markets after the US’s withdrawal from the Trans-Pacific Partnership (TPP), opportunities and challenges for Vietnamese enterprises when participating in global value chains, ways to improve the quality and competitiveness of Vietnamese products, and the difficulties, risks and risk control techniques when promoting exports.
Speakers at the forum will include John Rockhold, executive director of the American Chamber of Commerce in HCM City, Yasuo Nishitohge, general director of Aeon Vietnam, Yuichiro Shiotani, general director of TopValu, and Harry Loh, director of United Overseas Bank (UOB).
Organised by the Investment and Trade Promotion Centre of HCM City, the event will gather around 400 delegates, including Government officials, representatives of local and foreign investment and trade promotion agencies, business associations, consuls general, trade counsellors of foreign countries, and executives from local producers of export goods, logistics enterprises, banks and foreign corporations.-
Electronic toll collection to begin in south
Four more toll stations in the southern region will be equipped with electronic toll collection (ETC) systems in the next two months.
Apart from the eight ETC stations that have begun operating in the northern, central and Central Highlands regions, an ETC system will be installed at a toll station in the southern province of Đồng Nai this month, the VOV online newspaper reported.
It will be the first ETC station in the southern region, said the VETC electronic toll collection company, which has been assigned the task of developing and launching the ETC systems.
In September, VETC will open three more ETC stations on Hà Nội Highway, Đại Hàn Highway and Phú Mỹ Bridge in HCM City.
Việt Nam loses VNĐ3.7 trillion (US$162.7 million) every year on paper ticket printing and traffic congestion at the manual toll collection (MTC) systems, the newspaper reported. This is based on the cost calculated at around 100 MTC stations nationwide, and paper ticket printing accounts for VNĐ100 billion ($4.4 million), or 2.7 per cent.
Hundreds of millions of đồng are also lost through wasted fuel due to traffic congestion and delayed goods transportation, considering the waiting time for vehicles at manual toll stations, not to mention the negative effects of gas emission to the environment and the risk of traffic accidents.
An ETC system operates exactly like a prepaid mobile network provider, said VETC director Vũ Quang Lâm. Every vehicle will be given an electronic tag (e-tag) similar to a mobile SIM card, with a series number similar to a mobile number, which can be topped up using common prepaid mobile services, he explained.
“Going through an ETC station will be like making a phone call. The system will automatically charge vehicles in accordance with the toll rate of the station,” Lâm said. “Investors under the Build-Operate-Transfer (BOT) model will no longer have to organise a toll collection mechanism. We will do that for them.”
Through e-tag, the system will identify the vehicle and transmit its image and information to a data centre at high speed. Confirmation of the vehicle’s information and deduction of required amount from the account will be almost immediate, so the barrier will lift without the vehicle having to stop. Electronic devices will also be used to supervise the entire toll collection process.
VETC is collaborating with Việt Nam Register to install e-tags on motorised vehicles.
Deputy Minister of Transport Nguyễn Hồng Trường said that he wanted ETC systems to be installed at all toll stations nationwide by 2020.
VNA to operate from Singapore Changi Airport T4
Vietnam Airlines will move its operations to Singapore Changi Airport Terminal 4, which officially opened on July 25.
Following negotiations, Vietnam Airlines said it would be one of nine airlines to operate from T4, including Air Asia Group, Cathay Pacific, Cebu Pacific, Korean Air and Spring Airlines.
Vietnam Airlines officially launched its direct route between Ha Noi and Singapore on July 1, 1995, with two flights per week.
It currently operates 14 flights per week on the HAN-SIN route (from Ha Noi) and 21 flights per week on the SGN-SIN route (from HCM City) on A321 aircraft.
The modern-looking T4 is inspired by the purple orchid, Singapore’s national flower. The image of the orchid appears on the architecture and interiors of the terminal, with some 1,000 tall trees grown at the site.
There is a shuttle bus service, with a bus every five minutes, connecting Singapore’s T4 and remainder terminals at the airport. With this new terminal, Changi Airport’s capacity is enhanced to receive 82 million passengers per year, with 90 seconds per flight on average.
LG Electronics gets preferential customs
South Korea’s LG Electronics Viet Nam was granted preferential customs treatment by the General Department of Customs on Monday.
Located in Trang Due Industrial Zone, Hai Phong City, LG Electronics Viet Nam is an affiliate of Korean conglomerate LG Group. The company has a total investment capital of US$1.5 billion, making it the largest foreign-invested firm in the northern port city so far. It focusses on manufacturing and assembling digital devices for automobiles, mobile phones, washing machines and air conditioners.
In his speech at the event, Ryu Nam Ki from LG Electronics Viet Nam vowed that his company would make greater efforts to maintain its certification.
Under the General Department of Customs’s programme on priority regime of customs, which began in 2011, an estimated 62 enterprises have received preferential treatment so far. The firms, including 11 from South Korea, now account for 27 per cent of the country’s annual export turnover.
Leading US spider silk developer expands footprint into Vietnam
A US leading developer of spider silk based fibres said yesterday (July 25) in a press release that it is expanding its international presence into the Southeast Asian country of Vietnam.
Ann Arbor Michigan based Kraig Biocraft Laboratories, Inc. said in the statement that it would locate its headquarters in the heart of Quang Nam province within proximity to mulberry fields and easy access to international air and sea ports.
With the location finalized we are now preparing the final documents to obtain approvals to begin work with our innovative hybrid transgenic silkworm technology in Vietnam, said COO Jon Rice.
Kraig Biocraft Laboratories, Inc. (OTCQB:KBLB) has achieved a series of scientific breakthroughs in the area of spider silk technology with implications for the global textile industry, said the statement.
It is now expanding its footprint into Vietnam working to commercialize the transgenic silkworms to compete in the garment industry silk market for which it claims the Chinese market alone is worth US$3-5 billion per annum.
BUSINESS IN BRIEF 28/7
Vinacomin divestment sees avid foreign interest
Vietnam National Coal and Mineral Industries Group (Vinacomin) plans to decrease its holding in Vinacomin-Power Holding Corporation to 65 per cent from the current 99.68 per cent.
According to Dang Thanh Hai, general director of Vinacomin, investment funds and both foreign and domestic enterprises operating in the power sector may join the purchase. At present, numerous foreign investors from Japan, Thailand, China, and Singapore have expressed interest in Vinacomin-Power Holding Corporation’s shares.
Vinacomin and Vinacomin-Power Holding Corporation will organise meetings with investors in the third quarter of 2017 and expect to conduct the transaction in the fourth quarter.
Vinacomin-Power Holding Corporation currently has the chartered capital of VND6.8 trillion ($298.98 million), equaling 680 million shares with a price of VND10,000 apiece. Thus, the divestment would involve 235.81 million shares worth VND2.36 trillion ($103.75 million).
Operating under the joint stock company form since January 15, 2016, Vinacomin-Power Holding Corporation owns seven power plants with a total capacity of 1,730MW. Besides, Vinacomin-Power Holding Corporation contributes capital to three other power plants, with holdings from 5-10 per cent.
Specifically, the compnay has developed Na Duong 2 thermal power plant in the northern province of Lang Son. Once completed in 2018, the plant, which has a total investment capital sum of $192 million, will have a capacity of 110MW, generating 650 million kWh of electricity each year and helping ensure a stable power supply for Lang Son and other northern border provinces, as well as national energy security.
In 2016, Vinacomin-Power Holding Corporation earned a pre-tax profit of VND244 billion ($10.7 million). The figure of the first half of this year was VND261 billion ($11.5 million).
Tra Vinh strives to attract more investment projects
The economic zone management board of the Mekong Delta province of Tra Vinh is taking a range of measures in a bid to lure at least 3-5 more investment projects in the remaining months of this year.
It also expects that the remaining area of 8 hectares in Long Duc Industrial Park will be fully occupied by investors.
Pham Van Tam, head of the management board, said it will listen to businesses’ opinions, promptly address arising problems within its jurisdiction and improve the quality of verifying and licensing investment certificates.
The board will also cooperate with relevant agencies to accelerate administrative reform in the direction of reducing procedures and efficiently implementing the “one-door” mechanism to create favourable conditions for businesses.
In addition, it will revoke licenses of projects have been postponed for a long time to give land to other capable investors.
Tra Vinh is home to one economic zone and three industrial parks, namely Dinh An economic zone and Long Duc, Cau Quan and Co Chien industrial parks.
The Dinh An economic zone and Long Duc industrial park have attracted 29 projects each with registered capital of 151.36 trillion VND (6.66 billion USD) and 2.64 trillion VND (116.19 million USD), respectively.
State Treasury raises 2.37 trillion VND from G-bonds
The Hanoi Stock Exchange (HNX) has mobilised 2.37 trillion (around 104.4 million USD) by auctioning off Government bonds issued by the State Treasury.
Specifically, the amount includes 1.1 trillion VND worth of 20-year bonds with an annual interest rate of 5.82 percent.
Successfully bidders bought 1.27 trillion VND worth of 30-year bonds with an interest rate of 6.22 percent per annum.
Meanwhile, there was no successful bid for five-year bonds.
Since the outset of this year, the State Treasury has mobilised nearly 141 trillion VND (6.2 billion USD) from issuing Government bonds through auctions at the HNX.
Seagoing vessels to be inspected for safety worldwide
Starting from September this year, port authorities worldwide will carry out comprehensive inspections into foreign vessels to see whether they meet international safety, security and environmental standards.
The inspections until November 30 will take place at ports in five regions, namely West Europe–Northern Atlantic Ocean (Paris-MoU), Asia-Pacific (Tokyo-MoU), Black Sea (Black Sea MoU), Indian Ocean (Indian Ocean MoU) and Latin America (Vina del Mar), according to Vietnam Register.
The common marine safety violations of Vietnamese-flagged ships, according to Vietnam Register, are outdated printed materials, non-notified sea routes, no or not-working signal lights, sirens or voyage data recorders. Violating vessels will be detained by port authorities for repair.
Vietnamese vessels mostly operate in the area of Tokyo-MoU where many ships of Vietnam were detained in the past, Vietnam Register said. Ship owners must examine their own vessels in advance for any issues that can affect maritime safety and avoid detention.
In late 2014, Vietnam’s shipping fleet was removed from the Tokyo-MoU blacklist. In the first half of 2017, more than 3% of Vietnamese-flagged vessels were detained by Tokyo-MoU, so the Vietnamese ship fleet is now in the white-gray list.
Private capital in healthcare sector helps ease HCM City’s budget constraints
Rising private investments in the healthcare sector in HCMC have helped ease the city’s budget constraints, as healthcare demand is increasingly huge while financial allocations for the sector are modest.
Numerous investment projects in the city’s healthcare sector are being implemented in public-private partnership (PPP) format or funded only by the private sector.
Most recently, the HCMC Finance and Investment Company (HFIC), Y Dao Medical Service Consulting Investment Corporation, and District 2 Hospital have struck an agreement to build a high-tech medical examination and treatment facility on the hospital’s campus.
The 100-bed facility, which requires total capital of VND320 billion (US$14.1 million) in PPP form will be equipped with modern equipment such as a magnetic resonance imaging system for early and accurate diagnosis of cardiovascular, spinal and intra-abdominal diseases.
Meanwhile, the HCMC government in April gave District 3 the go-ahead to operate a private clinic investment scheme on a trial basis. The district government has so far teamed up with other relevant agencies to provide professional medical expertise, investment capital, and well-trained doctors to clinics.
As a result, a general clinic of Viet Anh Medical JSC which is situated at a health center in Ward 11 has been operational since May.
The city government has also approved seven city- and district-level hospital projects under PPP mode in 2015 and 2016. They are intended to develop a medical examination and treatment facility at Nguyen Tri Phuong Hospital, upgrade Tan Phu District Hospital, and build Saigon General Hospital, and local hospitals of districts 3, 5, and 7.
The city has also approved a proposal by the Department of Planning and Investment to allow HFIC manage expenses on its own to develop additional facilities at Children’s Hospital 1.
According to the HCMC Department of Health, there are some 80 healthcare projects to be implemented in the city in the 2016-2020 period with huge investment required. However, the city government in a report in mid-May said the State budget could allocate only VND12.5 trillion for healthcare projects in the five-year period, meaning a sizeable amount of investment must come from private sources.
The PPP format is also expected to attract more private funds into the city’s healthcare sector.
HFIC deputy director general Dang Ngoc Thanh said PPP has become an indispensable source of investment for public healthcare facilities. PPP also helps relieve spending pressure on the State budget, and increase incomes of health workers.
Mekong Delta firms advised to foster connectivity for better integration
Mekong Delta enterprises should foster connectivity and cooperation, while strengthening the application of high technology in production and business, said Vo Hung Dung, Director of the Vietnam Chamber of Commerce and Industry in Can Tho city.
Addressing a conference in Can Tho city on July 26 to seek measures for regional businesses to adapt with changes of the world economy amidst the fourth industrial revolution, Dung noted that Mekong Delta region faces many difficulties in infrastructure, logistics and technology.
He held that the fourth industrial revolution will benefit regional firms by reducing labour cost, increasing productivity, thus improving profit.
Sharing Dung’s opinions, Nguyen The Quang, Vice Director of the E-Commerce and IT Department under the Ministry of Industry and Trade, mentioned the “sharing economy” model, which is proving its efficiency in many countries in the world.
He cited the success of IT-based businesses such as Grab, Uber, Trip me and Ahamove, which aims to share cost and increases profit, adding that regional firms can learn the model for better integration.
Huynh The Du, Director of the Fulbright Economics Teaching Programme, noted that so far this year, the region has had 4,275 new enterprises, up 110.5 percent over the same period last year, with total investment of 30.81 billion VND, a rise of 122.7 percent.
However, the number of dissolved firms were 2,426, an increase of 114 percent year on year, he said.
He analysed that the majority of local businesses are specialised in agriculture with small and medium scale and vulnerable to competition in capital, technology and human resources. He highlighted the need for specific support policies suitable to each locality to guide local firms in sustainable growth.
Du stressed that enterprises should be updated themselves on business laws, especially financial and fiscal policies, to avoid legal violations and the missing of support policies for their firms.
Mekong Delta sees drop in Fall-Winter rice areas
Mekong Delta provinces cultivated 355,400 hectares of Fall-Winter rice crops by mid-July, an 8.7 percent drop from the same period last year, according to the Ministry of Agriculture and Rural Development.
The largest rice areas were reported in Dong Thap, Kien Giang, Hau Giang and Long An provinces and Can Tho City.
Some provinces advised farmers to only grow rice in lands surrounded by good embankments to escape floods; and to ensure a proper period of time between crops.
Vietnam has cultivated more than 2.12 million hectares of Summer-Fall rice crops during the period, up 2 percent year on year. Southern provinces contributed to approximately 90.6 percent of the total area and those from the Mekong Delta accounted for 77.6 percent, down 2.3 percent year on year.
The contraction was largely due to farmers shifting to grow annual and perennial plants.
The later-grown Summer-Fall rice areas have reached the stages of heading and flowering while the early-grown crops have been harvested in an area of 663,700 hectares, accounting for 34.5 percent of the total areas, including 654,300 hectares in the Mekong Delta.
The yield was estimated at around 58.7 quintals per hectare.
Northern Vietnam has finished cultivating its winter rice crop with the early-grown areas in the stage of tillering.
HCMC to handle half done projects in downtown area
The HCMC People’s Committee has required the Department of Construction to review and handle half done property projects in District 1.
The committee has assigned the agency to send a document requiring investors of these projects to resume construction within six months starting from the date the announcement was made.
If investors do not restart construction beyond the above time limit, the agency will base on regulations in the construction field to consider and handle each specific case.
According to the city People’s Committee, three incomplete projects have affected urban landscape comprising Saigon One Tower at 34 Ton Duc Thang street. Eighty percent of the work volume has completed but it has been immovable since 2011 because of internal conflict.
The second project locates at 23 Le Duan street, successfully auctioned by Tan Hoang Minh Company in 2015 with the price of VND1,430 billion (US$62.91 million).
While the project was waiting for investment certification, the city People’s Committee’s Decision 09 on construction of essential works became invalid. Therefore, the project has delayed until now. The city is assisting land use right certificate granting for the investors to carry out the project.
The third project at 8-12 Le Duan has been halted because of an inspection decision.
HoREA proposes changes to Land Law
The Ho Chi Minh City Real Estate Association (HoREA) has released a document on amending and supplementing a number of issues in the Land Law 2013, including a proposal to change the mechanism for land use fees.
The law took effect on July 1, 2015 and has had a positive influence on the economy and the real estate market, contributing to protecting the legitimate rights of land users.
But after three years of implementation there remain many deficiencies that need to be amended or supplemented, especially regarding land use fees.
According to HoREA, the land use fee problem is a “bottleneck” for the property market and a burden that real estate businesses and owners both shoulder.
There is also a lack of transparency, with investors being unable to predict the fees prior to making investment decisions. The “ask-give” mindset also prevails.
HoREA therefore proposed changes to the mechanism for land use fee calculations to cut housing costs, increase transparency, and eliminate the “ask-give” mindset in the property market.
In order for the market to fully function in Vietnam’s market economy, HoREA also proposed two modifications. First, viewpoints on land use fees must change and such fee should be considered as a tax, as suggested by the Ho Chi Minh City People’s Committee. Land use fees should be removed in the long term and replaced with a land use tax at certain rates, suggested at about 10 or 15 per cent of the listed land price. The application of a land use tax would help businesses and purchasers, according to HoREA. Businesses would also be able to predict the land cost when investing in projects and the State, meanwhile, would have a stable, long-term source of tax income.
Second, enterprises should be allowed to participate in the process for determining land use fees and the process for preparing and evaluating land prices should be shortened from three years to one year.
HoREA also proposed the removal of the annual land price list, replaced by a land price list valid for five years.
Real estate inventory down in Q2
Total real estate inventory in Vietnam stood at about VND27.3 trillion ($1.2 billion) as at the end of the second quarter of 2017, down VND3.6 trillion ($167 million), or nearly 12 per cent, year-on-year, according to a report from the Vietnam Real Estate Association (VnREA).
The report noted that the higher inventory is in residential land, with more than 3.3 million sq m worth VND13 trillion ($593 million), followed by low-rise housing with 3,447 units worth VND7.268 trillion ($330 million). Apartment inventory was 3,200 units worth VND4.5 trillion ($208 million), while commercial land totaled 648,139 sq m, worth VND2.48 trillion ($112 million).
The Housing and Real Estate Market Management Agency at the Ministry of Construction said that the process of cutting inventories has slowed and are primarily in projects far from city centers with inadequate infrastructure.
Hanoi and Ho Chi Minh City have the largest inventories, accounting for nearly 40 per cent of value.
The report also revealed that in the second quarter, more than 6,700 apartments were introduced for sale in Hanoi, mostly in the districts of Bac Tu Liem, Nam Tu Liem, Ha Dong, Hoang Mai, and Thanh Tri, accounting for 63 per cent of total new supply.
The mid-end apartment segment has a large supply, with many projects conducting sales in the second quarter, such as T&T Riverview, Viet Hung Green Park, Ecolake View, Imperial Plaza, An Binh City, FLC Tay Mo, Gelexia Riverside, and Riverside Garden.
Total apartment transactions in the second quarter in Hanoi were for 5,417 units on a total of 406,240 sq m and worth VND11.3 trillion ($517 million), with the affordable housing segment leading the way, accounting for 55 per cent of total transactions.
In Ho Chi Minh City, total apartment transaction in the first six months of 2017 reached 9,827 units, equivalent to 751,385 sq m. Total transaction value reached VND25.88 trillion ($1.17 billion) with the mid-end segment leading the way, accounting for 47 per cent of total transactions.
Projects include The Art, Citisoft, LuxGarden, Celadon City, Green Town, Binh Tan, Sun Square, Conic Skyway Residence, and The Golden Star. High-end projects initially introduced included Sophia Garden, Lancaster Lincoln, Sensation, and Republic Plaza.
TPBank introduces IA application
TPBank has recently applied an artificial intelligence (AI) application called T’Aio on its Facebook Fanpage to serve its digital banking customers.
It is the first bank to use AI to improve service quality and meet the need to serve customers 24/7.
The response speed of T’Aio is less than five seconds.
When it receives a question from a customer, it analyzes the available answers in the data system and its confidence level about answering the question. If it has a high confidence level, it provides an answer.
If available answers are considered insufficiently reliable, T’Aio will connect customers with a consultant and will automatically record new questions and answers for future responses.
T’Aio can answer questions relating to payment accounts, saving accounts, bank cards, eBank, and LiveBank.
Using Facebook’s general infrastructure, T’Aio is fully capable of responding to over 1.5 million TPBank customers interacting at the same time. The bank expects Facebook will support voice communications technology such as Siri, Cortana, and Google Assistant.
It is preparing plans to integrate T’Aio into its website and eBank and will expand its functions.
T’Aio has already answered millions of questions about TPBank’s products and services 24/7. Development partners include leading technology groups in the world, such as Singtel, Google, and Microsoft.
The bank previously deployed LiveBank in early 2017, to change traditional banking.
General Director Nguyen Hung said that TPBank began to apply LiveBank in Hanoi and Ho Chi Minh City in late 2016; a new banking model used around the world in Germany, Japan, Turkey, and Hong Kong (China). Singapore is the only country in Southeast Asia to use the model.
Financing issue delays Long Son petrochemical project
The $5.4 billion Long Son petrochemical project in southern Ba Ria Vung Tau province has come to a standstill due to a financing problem, according to Mr. Nguyen Vu Truong Son, CEO of the State-owned energy giant the Vietnam Oil and Gas Group (PetroVietnam).
Site clearance has been completed and the investors have selected an engineering, procurement and construction (EPC) contractor for the project, S&P Global Platts quoted Mr. Son as saying.
PetroVietnam now holds a 29 per cent stake in the project while Thailand’s Siam Cement Group (SCG) holds 71 per cent after acquiring the entire 25 per cent interest of Qatar Petroleum International (QPI) earlier this year for $36 million.
The two investors plan to borrow $3.2 billion out of the $5.4 billion from financial institutions, with the remainder being self-financing.
SCG has pledged to provide a guarantee for the $3.2 billion package but it asked PetroVietnam to issue a commitment to Long Son Petrochemicals guaranteeing the 29 per cent portion of the $3.2 billion the Thai partner will borrow on its behalf.
Construction of the project cannot begin, however, as PetroVietnam is prohibited by law from providing a loan guarantee for the Long Son Petrochemicals Company, the investor in the project.
A State-owned enterprise is prohibited from providing loan guarantees for a subsidiary in which it holds less than 51 per cent. Though Long Son is classified as a key project in the oil and gas sector and thus falls under those that may receive government loan guarantees, the government has refused to provide such a guarantee for fears over mounting public debt, according to Mr. Son.
“Construction could begin in August or September if this issue is cleared up,” Mr. Son said, adding that if things go smoothly, the project, which includes a 1 million ton ethylene cracker with a flexible gas and naphtha feed, allowing for an olefin capacity of up to 1.6 million tons per year, is expected to start in 2021.
Licensed in 2008, the complex was initially scheduled to commence construction in 2014 and begin commercial operations in 2017. It has faced several delays due to site clearance and the exit of QPI following a slump in global oil prices in 2014.
Amid a recent crackdown on its loss-making projects, PetroVietnam saw after-tax profit for the first half of this year rise to VND13.1 trillion ($576.3 million), equal to 79 per cent of the annual plan, mainly due to a surge in the global crude oil price and an increase in crude oil extraction to support Vietnam’s economic growth.
The group extracted a total of 7.9 million tons of oil in the first half, 141,000 million tons higher than the half-year target, with some 970,000 tons also coming from abroad, while gas extraction output stood at 5.25 billion cu m.
CJ invests $62mn in food production complex in HCMC
South Korean conglomerate the CJ Corporation has recently announced it will invest nearly $62 million in an integrated production base applying advanced technology in Ho Chi Minh City’s Hiep Phuoc Industrial Park.
A breaking ground ceremony was held recently at the industrial park and once completed in July 2018 the complex will include a processing facility, an R&D center, and a food safety control system.
“CJ sees Vietnam as a strategic market in Southeast Asia,” CEO Mr. Kim Chul Ha said in a statement. “Last year and this year, CJ has focused on investing and expanding in the food business through many M&As in the field of frozen food and seafood processing.”
The complex covers a total area of 66,000 sq m and is set to produce 70,000 tons of food per year. The Vietnam expansion is expected to push the South Korean group’s revenue from the food business to $700 million by 2020.
In the past year and in 2017, CJ has seen remarkable growth in its food business, with the appearance of three new members: Kim & Kim, CJ Cau Tre, and CJ Minh Dat. Through CJ Cau Tre and CJ Minh Dat, the group has also set a target of exporting Vietnamese food and culture to global markets.
With a combination of these three brands, CJ has officially embarked on the construction of a large-scale food complex, applying advanced technology to boost innovation in Vietnam’s food production industry.
In the latest move, CJ last month held a launch ceremony for an agricultural processing plant in south-central Ninh Thuan province primarily focusing on chili processing, with total investment capital of $650,000.
CJ acquired kim chi distributor Ong Kim in January 2016 and bought a 47.33 per cent stake in Cau Tre Foods later in the year. In April 2017, it increased its ownership in the Ho Chi Minh City-based company to 71.6 per cent.
The Ninh Thuan plant covers an area of 640 sq m and has a capacity of 500 tons of chili powder each year. Processed under CJ’s strict conditions, products from the plant will be the main material source for the group’s food industry.
In March 2017, it spent $13.44 million acquiring a controlling stake in Minh Dat Food.
It also secured a 4 per cent holding in Vietnam’s leading meat processor Vissan, when the State company conducted its IPO in March 2016. It competed with homegrown food platform Masan in the race for a 14 per cent stake but lost out.
Ha Nam licenses domestic and foreign projects
The Ha Nam Provincial People’s Committee issued investment certificates to foreign and domestic investors with projects totaling over VND4.6 trillion ($202.33 million) in capital on July 26.
Projects include the U1 University from South Korea in Phu Ly, with investment of $45 million to train 4,200 students year, and a pork project from Masan at the Dong Van IV Industrial Zone in the northern province with a processing capacity of 600,000 pigs per year.
The Tan Port - Dong Van III Construction Joint Stock Company project belonging to the Tan Cang - Dong Van Ha Nam Joint Stock Company, in logistics services and warehousing at the Dong Van III Industrial Park and capable of conducting goods clearance on 37,000 TEUs per year and with investment capital of VND181 billion ($7.96 million), was also licensed, as was a clean water supply project in Duy Tien district belonging to the Ha Nam Clean Water Joint Stock Company with the capital of VND2.6 trillion ($114.35 million).
In the first half of this year there were 317 new enterprises established in the province, an increase of 40 per cent year-on-year, with total capital of VND3.9 trillion ($171.54 million). Two investment promotion conferences were also held by the province - one in Japan and in South Korea - and a meeting with major investors in Ho Chi Minh City.
Ha Nam attracted 52 investment projects in the first half, including eleven foreign direct investment (FDI) projects and 41 domestic projects, with capital of $51.07 million and VND3.5 trillion ($153.94 million), respectively.
The number of workers employed at new enterprises totaled 7,728. Most new enterprises are of small and medium size, however, with low charter capital and uncompetitive products. Some have received land but construction progress is slow.
The People’s Committee also held a meeting with enterprises to hear their opinions, recommendations, and solutions on the difficulties they face in the province.
Ideas from enterprises included support in fees, support for women, support in accessing capital, and measures in tax policy and industrial management.
Provincial leaders addressed questions from enterprises and proposed solutions.
Chairman of the Ha Nam Provincial People’s Committee, Mr. Nguyen Xuan Dong, suggested provincial departments receive further opinions and recommendations from enterprises and provide full answers in the shortest possible time.
Dragon Capital to invest in $44 million solar farm in Can Tho
Solar power field is still a lucrative field as evidenced by a growing number of foreign investors expressing intentions to pour capital into new projects.
Gavin Smith, general director of Dragon Capital, announced plans to build a solar power project with an initial capital of VND1 trillion ($44 million) and a designed capacity of 40 MW in the Mekong city of Can Tho at the working session with representatives of the Can Tho People's Committee on July 25.
The construction is expected to be kicked off in the first quarter of 2018 and completed by 2019.
At present, the group can arrange capital for implementing the project, including its equity capital and loans, however, the specific time to kick-off the construction depends on land clearance and the completion of administrative procedures.
Smith proposed the city to supply an area of 40-50 hectares to implement the project. After the first phase comes into operation, they will continue to develop the second phase and even the third phase.
After the working session, the group will begin conducting the feasibility study.
Early in June, Hanwha and BCG Bang Duong inked a deal to develop a US$100-million solar power project in the southern province of Long An.
Covering an area of 125 hectares in the province, the solar power plant will boast a total designed capacity of 100 MW. The plant is scheduled to be built in the first quarter of 2018 and will generate electricity as soon as in 2019.
Under the agreement, BCG will arrange capital sources, carry out the necessary procedures, study and implement the project, as well as negotiate and sign a power purchase contract with EVN.
Meanwhile, Hanwha will be responsible for providing technology, equipment, engineering, installation, and arranging international financial funds.
As a tropical country, Vietnam has enormous advantages and holds ample potential for solar energy.
The country's residential and commercial solar energy production is estimated to be at least 2-5GW over the next decade.
The capacity of ground solar systems in the south of Vietnam amounted to about 22GW.
Accessing this new source of energy not only contributes to the energy supply, but also helps save energy and reduce environmental pollution.
Cashew nut farmers struggle to profit from fruits of their labour
Vietnamese agriculture, one of the largest processors of cashews anywhere, is on track to import an estimated 360,000 metric tons of nuts this year and export them to the burgeoning European, US and Asian markets.
Cashews had become one of the main cash crops in the country prior to 2016 for many smallholders, said Nguyen Duc Thanh, head of the Vietnam Cashew Association, and in good years had allowed families to earn a decent living.
But unfortunately, in 2016 and again this year, harsh weather combined with the ever-increasing dependence of farmers on imports from Africa resulted in low earnings and growers didn’t benefit much from the fruits of their labour.
Due to the lack of quality nuts available in the domestic market, and low earnings, said Mr Thanh, many smallholders had been forced to shutter their doors and moved on to other cash crops.
Currently, nearly two-thirds of all nuts processed by Vietnamese ag are imported, principally from Africa, he noted, adding that the processing industry in the African continent is continuing to expand making it harder to compete.
West Africa, where 80% of the cashew nuts of the continent are grown is increasingly seeing more multinationals investing in manufacturing plants and processing more of the output.
Last month, Nigeria alone unveiled that six more cashew processing factories will open for business, one each in the states of Enugu, Imo, Benue, Kogi, Kwara and Oyo, which lie on the cashew belt of the continent.
In addition, the Nigerian press reported last month that Walmart and Nigeria announced a 130,000-metric ton deal that could be worth as much as US$7 billion for cashew nut exports to the US market.
This rising dominance by multinationals in Africa very often has and will continue to result in their absorbing the higher quality nuts leaving only lower quality product available for export to countries like Vietnam.
Nguyen Quang Huyen, head of Hoang Son 1 Co, Ltd, a leading cashew nut processor, said the shortage of raw cashews in the domestic market is nothing new for the Vietnamese industry.
He noted that the larger cash heavy businesses in the domestic industry squeeze out the smallholders by buying up all the higher quality nuts at the start of the year and storing in inventory.
Strapped for cash, the smallholders aren’t in any position to compete for domestic produced nuts and the only good option for them is to rely on imports from Africa or close their doors and switch to growing other crops.
It’s important to keep in mind that Vietnam is not the largest producer of cashews, it is only one of the largest processors, and therefore highly dependent on imports, which greatly undermines its sustainability.
Ever since the disruptions to supplies during 2016, Vietnam ag has struggled to process enough cashews to satisfy the high global demand and prices started climbing as a result.
But because there are limited cashew nut supplies, the Vietnam industry is in no position to cash in. Cashew exports from Vietnam have been estimated to have fallen 10% year-on-year during the first months of 2017.
Chinese trade fair opens in Ha Noi
The 2017 Zhejiang export fair will be held in Ha Noi from August 3 to 5, showcasing the best products from the Chinese province.
The sixth Zhejiang export fair, organised at the Ha Noi International Exhibition Centre on Tran Hung Dao Street, will feature 150 booths of nearly 100 well-known businesses, Trinh Xuan Tuan, deputy general director of event organiser Viet Nam National Trade Fair & Advertising Company (Vinexad), said during a meeting held on Tuesday.
Products on display will include machinery, electronic equipment, construction material and interior decoration furniture, as well as textiles and garment material and consumer products.
With the slogan "Zhejiang Made-All Need" the Zhejiang export fair has been held in many countries, such as Japan, Dubai, Czech Republic, Iran and Malaysia. Viet Nam is a gateway for Zhejiang’s import and export transactions and investment in Southeast Asia in particular and Asia in general.
The fair will also be an opportunity for businesses to seek partnerships and serve as a bridge to further promote economic and trade relations between Zhejiang Province and Viet Nam. Zhejiang is a coastal province located in southeast China with ideal natural conditions. It has posted rapid economic growth in recent years and boasts economic relations with over 230 countries and territories around the world.
Trade turnover of Zhejiang and Viet Nam reached US$6.7 billion, an increase of 12 per cent over 2015.
By the end of 2016, 186 Zhejiang enterprises were investing in Viet Nam with total investment of $1.68 billion. Meanwhile, Viet Nam set up 26 firms in Zhejiang with total investment of $20 million.
Beware of pitfalls while eyeing Eurasia windfall: experts
Vietnamese businesses should be aware of the potentially huge pitfalls of trading with the Eurasian Economic Union (EAEU), and the importance of tackling these together, experts said at a conference on Tuesday.
Representatives from the Ministry of Industry and Trade (MoIT) emphasised at the conference that Viet Nam’s producers and exporters must be aware of both the pros and cons of conducting trade with the Eurasian Economic Union (EAEU).
The conference was held to mark one year of the Vietnam-Eurasia Economic Union Free Trade Agreement (VN-EAEU FTA).
Ngo Chung Khanh, Deputy Director of MoIT’s Multilateral Trade Policy Department, said that his chief concern was the trigger safeguard measure within the EAEU in the textile and furniture industries and its effect on Vietnamese exports to this market.
He asked Vietnamese textile exporters to be extremely careful of this safeguard mechanism, and only allow a limited number of consignments to be shipped out to the EAEU each year. He warned that should one company break the rule, all will suffer the consequences.
Khanh explained that even though the EAEU had agreed at the start of negotiations to bring tariffs down to zero per cent with no rule of origins requirement for thread or fabric, as in other FTAs that require the whole product to be made in Viet Nam from scratch, the bloc was not in total favour of opening its textile market to Vietnamese goods.
As such, they apply a trigger mechanism that takes effect if the total export turnover from Vietnamese producers to the EAEU grows to twice the average volume that Viet Nam has exported to the region over the last three years.
If Viet Nam’s textile export exceeds this volume, the EAEU will conduct an investigation to decide whether to apply tariffs of 20 per cent instead of zero per cent.
Khanh also stressed the importance of following the rules set by the VN-EAEU FTA, one of which is the prohibition on dividing shipping consignments between different countries.
This means for a shipping container to be subjected to the zero per cent tariff treatment, it must be shipped directly and wholly from Viet Nam to an EAEU member, even if it belongs to a multinational company with factories in many countries.
The EAEU has also made it clear that should any company forge a certificate of goods origin, the entire industry may be forbidden from exporting to their market.
"Altogether, these risks mean that Vietnamese producers in all fields must band together to ensure their rights and benefits, as well as the benefits to the sector as a whole," said Khanh.
Duong Quoc Thanh, Partner at the DIMAC Independent Law Firm, said that EAEU member countries, especially Russia, are concerned about the consistency of Vietnamese products’ quality, so businesses should keep this in mind and respond accordingly.
With the EAEU’s rising influence, Vietnamese firms are gaining market share in this region through the signing of the VN-EAEU FTA in October 2016.
Along with other FTAs, it elevated Viet Nam’s status among East Asian countries, as the country was the first in the ASEAN community to sign an FTA with the EAEU.
In addition to favourable conditions for the fabric, textile and garment industry, the VN-EAEU FTA also brings up to 90 per cent tariff reductions for other export sectors like seafood, footwear, handbags and suitcases.
Tuesday’s conference was jointly organised by the Hanoi Centre for Small and Medium Enterprises Support, Hanoi Department of Planning and Investment under the Department of Planning and Investment and the Hanoi Supporting Industries Business Association (HANSIBA).
Taiwan Expo 2017 features green tech
Taiwan Expo 2017, which opened on July 26 at the Saigon Exhibition and Convention Centre in District 7, offers opportunities to explore partnerships between enterprises of Taiwan and Viet Nam in many fields, including healthcare and business production.
The exhibition, with the theme “Greener Tech-Smarter Life” is organised by the Taiwan External Trade Development Council (TAITRA).
It has attracted 150 Taiwanese exhibitors including ASUSTek Computer Inc, Acer Incorporated, AAEON Technology Inc, Advanced Green Biotechnology Inc, Animal Health Research Institute, Healthcare Industry Development Association Across The Straits, and Unitech Electronics.
They are displaying advanced green technologies and equipment for food processing, plant seeds, biological pesticides, aquatic vaccines and deep-sea fishing equipment.
Vu Tien Loc, chairman of the Viet Nam Chamber of Commerce and Industry (VCCI), said: “The Taiwan Expo 2017 will help Vietnamese consumers and enterprises access advanced environmentally friendly technologies useful for life and production, matching the country’s policies on green growth”.
The exhibition showcases not only technologies made in Taiwan but also products and machines made in Viet Nam in co-operation among Vietnamese and Taiwanese enterprises, Loc said.
Viet Nam imports many products from Taiwan, including machines and equipment for business production, according to VCCI.
As of May, Taiwan had 2,526 investment projects worth a total of US$32.4 billion in Viet Nam.
Petrolimex to launch non-cash payment service
Domestic ATM card holders of 41 National Payment Corporation of Viet Nam (NAPAS) member banks can pay by card at Viet Nam National Petroleum Group (Petrolimex)’s petrol stations nationwide from August 1.
The card payment service is connected via PG Bank’s Point-of-sale (POS) system at Petrolimex petrol stations.
The move was announced after Petrolimex inked a co-operation agreement with NAPAS and PGBank in Ha Noi yesterday.
Chairman of Petrolimex Bui Ngoc Bao said that the co-operation with NAPAS would raise its service quality at petrol stations nationwide and strengthen management capacity and transparency as the company looks to build a modern petrol station system.
“This is also common trend of the era of the industry 4.0, which will push the development of non-cash payment model in Viet Nam. This payment model creates advantages for not only businesses and banks but also customers who enjoy conveniences,” said Bao.
According to a report of the National Traffic Safety Committee, Viet Nam has nearly 3.2 million cars and more than 48.3 million motorbikes operating in the country. A majority of them use fuel supplied by Petrolimex.
With the use of ATM cards, the customers can manage their fuel costs via their bank statements. In addition, this can also enjoy promotional programmes, including discounts when they buy fuel, Bao said.
Deputy General Director of NAPAS Nguyen Dang Hung said he expects the connection of domestic cards between the corporation’s banking members and Petrolimex will help boost the non-cash payment model.
Vietnam boosts trade promotion in Argentina, Paraguay
The Embassy of Vietnam in Argentina and the Argentinean Confederation of Medium Enterprises (CAME) jointly held a business workshop in the country’s capital city of Buenos Aires on July 25.
The event saw the participation of 60 enterprises from the two nations.
Addressing the opening ceremony, CAME President Fabian Tarrio highlighted Vietnam’s potential and room for trade exchanges between the two nations, expressing his hope that CAME will become a bridge to connect the two sides’ enterprises, contributing to raising their bilateral trade value.
For his part, Vietnamese Ambassador Dang Xuan Dung underlined the remarkable growth rate of 20 percent on average during 2012-2016 of the economic–trade relations between Vietnam and Argentina since the Vietnam – Argentina comprehensive partnership was established in 2010.
He noted that Argentina is one of the most important partners of Vietnam in Latin America.
According to the Ambassador, the 45th anniversary of the diplomatic ties in 2018 will be an important milestone in the long-term comprehensive cooperation between the two nations.
He suggested the two sides play a more active role in the Association of the Southeast Asian Nations (ASEAN) and the South America’s Trade Bloc MERCOSUR, in order to help each other enter the market in those two regions.
Tran Duy Dong, Director of the America Market Department under the Ministry of Industry and Trade said Argentina is a potential market for Vietnamese key exports such as footwear, garment-textile, wood products, and handicraft.
Vice versa, with a population of nearly 100 million people and increasing purchasing power, Vietnam is also a promising market for Argentinean exporters, Dong said, expressing his hope Argentina will support the negotiation on a free trade agreement between Mercosur and Vietnam.
Gustavo Martino from the Argentinean Foreign Ministry lauded the dynamic development of Vietnam, particularly in manufacturing, and said the two countries’ firms can connect with each other to bring their products to Asian and Latin American nations.
The event witnessed the signing of several contracts between the two nations’ enterprises, mostly in wood materials and animal feed. Argentinean firms expressed their interest in Vietnam’s garment-textile products, coffee and electric bulbs.
As part of a trade promotion programme in Argentina from July 23-27, the delegation of Vietnamese firms visited the 2017 Argentina Agriculture Fair and the Pilar Industrial Park in Buenos Aires.
Previously, the delegation held several trade promotion events in Paraguay, with the support of the Commerce Office under the Embassy of Vietnam in Buenos Aires.
Indonesian embassy promotes palm oil, paper trade with Vietnam
The Indonesian Embassy in Vietnam held a seminar in Hanoi on July 26 with the aim of linking the two countries’ businesses in the trade of palm oil and paper.
Addressing the event, Ambassador Ibnu Hadi said that the relations between Vietnam and Indonesia have been growing. In 2016, two-way trade reached 5.6 billion USD, he noted, added that the two sides agreed to lift up the figure to 10 billion USD in 2018.
Vietnam mostly exported to Indonesia telephones, iron, steel, machineries, equipment, rice, computer, electronics and spare parts, garment, leather and footwear materials, vehicles, plastics and plastic material.
The ambassador said that last year, paper was the third largest goods that Indonesia exported to Vietnam with revenue of 181 million USD, followed by animal and plant oil with 161 million USD.
In order to beef up the Vietnam-Indonesia cooperation, especially when the ASEAN Community has been formed and the region has experienced many significant changes, the two sides should increase the exchange of information and investment promotion as well as the connection among businesses, thus improving the competitiveness of ASEAN enterprises, he said.
Meanwhile, Pham Quoc Manh, public relations official of the Indonesian Embassy said that last year, Indonesia ranked 14th in the worth in terms of export of paper, mostly printing paper, with revenue of 3.2 billion USD.
Indonesia is also the world top exporter of palm oil as the country provides 36 million tonnes out of total 56 million tonnes exported by countries around the world, or 62 percent, he added.
At the event, Indonesian Embassy officials also shared information on cooperation opportunities in palm oil and paper trade with participating Vietnamese businesses.
Project on credit institution restructuring gets PM’s approval
The Prime Minister has issued Decision 1058/QD-TTg approving a project on restructuring the system of credit institutions in combination with settling bad debt for the 2016-2020 period.
The project aims to restructure credit institutions and settle bad debt on the principles of ensuring the interests of depositors and maintaining the stability and safety of the banking system, and reduce the number of badly performing credit institutions.
Overall solutions include completing the legal framework, perfecting policies and mechanisms related to monetary and banks’ operations, improving the financial and business administration capacity of credit institutions, and bettering inspections and supervisions over banks’ operations.
The project stresses the need to improve the capacity of the State Bank of Vietnam (SBV) to make early warning of systematic risks and to prevent the risk of law violations of credit institutions and foreign banks’ branches.
Inspection work will be reformed on the basis of using new risk control tools and methods.
The project also puts forward orientations and measures to restructure commercial banks in which the State holds more than 50 percent of chartered capital, and improve operations of joint stock commercial banks, financial and financial leasing companies.
For bad debt settlement measures, the project asks the SBV, ministries, localities, credit institutions, Vietnam Asset Management Company (VAMC), and organisations and individuals involved to continue implementing the Decision No.843/QD-TTg on settling bad debts of the credit institution system.
Credit institutions are required to review the quality and recovery possibility of outstanding debts, while continuing to restructure debts.
The SBV, ministries and localities are requested to continue implementing measures related to monetary, credit and banking policies and mechanisms, along with solving difficulties for business and production activities, and stimulating consumption.
The SBV needs to intensify inspections and supervisions on credit institutions’ observance of rules on credit, safe operation and debt classification, while the VAMC focuses on classifying borrowers, mortgage assets and loans, coordinating closely with credit institutions in taking back and restructuring debts and selling debts and guarantee assets, and providing financial assistance for borrowers to recover business and production and complete unfinished projects.
The country’s system of credit institutions currently includes State-owned banks, joint stock banks, finance companies, financial leasing companies, foreign credit institutions, co-operative banks, People’s credit funds and microfinance institutions.-
Vietnam sees feasible 3 billion USD export of fruits, vegetables
Vietnam’s vegetables and fruits by mid-July continued to enjoy a rosy export growth, boding well for the export revenue of 3 billion USD for the whole year as forecast.
Latest statistics from the General Department of Vietnam Customs showed that the country pocketed nearly 1.85 billion USD from vegetable and fruit export from the beginning of this year to July 15, surging by 45 percent from the same time last year.
In addition, consumers’ demand for Vietnamese vegetables and fruits will be higher during the Christmas and New Year holidays, auguring well for the country’s export revenue goal.
Vietnamese vegetables and fruits have been present in 60 markets globally. China, Japan, the Republic of Korea (RoK) and the US were four leading importers, accounting for 85 percent of total vegetable and fruit export value.
Shipments to traditional markets witnessed good expansion, including Japan (56 percent), China (50 percent), the US (23 percent), the RoK (15 percent) and Thailand (12 percent). Meanwhile, substantial growth was seen in Hong Kong (102 percent), the United Arab Emirates (81 percent), Laos (78.6 percent) and Russia (54.6 percent).
However, export revenue suffered stark decline in Cambodia (81.8 percent), Indonesia (53 percent) and the UK (42 percent).
Dragon fruit ranked first in export value, accounting for 50 percent of the total fruit export revenue. Binh Thuan province, the country’s largest dragon fruit exporter, has paid heed to developing VietGAP dragon fruit cultivation. Nearly 7,700 hectares of land were zoned off for growing dragon fruit in line with VietGAP standards for exports to fastidious markets like the US and the EU.
Mangos, litchis and longans are also Vietnam’s strategic staples.
The Plant Protection Department under the Ministry of Agriculture and Rural Development is making a beeline for bringing litchis to Japan. It will continue negotiations and complete procedures to ship longans to Australia and New Zealand.
As the largest litchi growing area, Bac Giang province has exported 15,000 tonnes of litchis to China through three border gates of Lang Son, Lao Cai and Ha Giang. Another 13 tonnes have just been shipped to Australia while a batch of litchis has entered Thailand, opening big opportunities for the Vietnamese fruit.
The first batch of 3.5 tonnes of mangoes from northern Son La province underwent irradiation treatment for shipment to Australia. The mangoes, weighing 450-650 grammes each, were purchased by Agricare Vietnam Co., Ltd. at the price of 22,000 VND (0.9 USD) per kilogramme.
According to Lo Minh Hung, Vice Chairman of the provincial People’s Committee, the province has a plan to develop fruit tree cultivation, especially mangoes. Currently, it has some 4,000 hectares of mangoes with total productivity of over 3,000 tonnes.
By 2030, 100,000 hectares will be used to grow fruit trees, half of which will be set aside for mango plantation, he added.
Le Son Ha from the Plant Protection Department said that mango export to Australia will pave the way for the fruit to enter many new markets. The US, the EU, Japan, the RoK and Australia are prioritised markets for trade promotion, he stressed.
Vietnam Farm & Food Expo 2017 kicks off in HCM City
The fifth Vietnam Farm and Food Expo 2017 and Agritech Vietnam 2017 opened in Ho Chi Minh City on July 26 with nearly 200 booths of 120 domestic and foreign enterprises.
The Vietnam Farm and Food Expo introduces outstanding agricultural products, food, and plant varieties of different localities across the country, while the Vietnam Agritech Expo features the latest machineries, equipment and production chains serving agricultural activities. The events are considered the venue for both input and output of Vietnam’s agricultural sector.
Opening the events, Nguyen Phuoc Hung, Vice President of the Ho Chi Minh City Business Association said that the annual exhibitions aim to promote the application of science and technology to improve productivity and quality in agricultural production, while seeking markets for Vietnamese farm produces.
Hung held that this is a good chance for agricultural firms to introduce and promote their products, and form production-supply chains.
Within the framework of the events, the organising board will coordinate with the Department of Agriculture and Rural Development of the Mekong Delta province of Vinh Long to hold a conference on strengthening links for selling farm produces in Vinh Long, in which Vinh Long will introduce its agricultural development potential, especially its fruits for export.
Nguyen Van Liem, Vice Director of the Vinh Long Department of Agriculture and Rural Development said that he hopes through the exhibitions, the province will find out additional distribution channels for its products, thus boosting the sustainable growth of the local agricultural sector.
The events will run until July 28.
VN needs policies to boost digital economy: experts
Viet Nam needs to form policies that will boost the digital economy, a move that will generate added value and help sustainable development, experts said at a conference on Wednesday in Ha Noi.
Rapid e-commerce development is favourable for the digital economy.
Dao Huy Giam, General Secretary of the Viet Nam Private Sector Forum (VPSF), said that more than ever, it’s time for Viet Nam to pay attention to digital economy.
Giam cited statistics showing that 1.7 per cent of the population are involved in the digital economy and contribute 5 per cent to the gross domestic product (GDP). Each labour worked in the digital economy creates added value three times higher than the national average.
“The digital economy stimulates high added value and leads to breakthroughs in capacity for sustainable development,” Giam stressed.
According to Nguyen Trung Chinh, head of the VPSF’s working group on digital economy, with US$900 million revenue from e-commerce in 2016 and 60 million smartphone users, Viet Nam had significant room to boost the digital economy.
Still, the biggest challenge is that Viet Nam had not had favourable policies to encourage new business models and digital technology-enabled companies, Chinh said.
He said that to develop digital economy, the Government should hasten efforts in limiting the use of cash, promoting e-commerce and e-contracts and creating payment infrastructure for electronic transactions. In addition, incentives should be given to the software industry and hi-tech zones.
Chinh said that in digital economy, firms needed fair playing ground to develop, adding that there are still differences in treatment compared to different economic sectors.
According to Bui Quang Ngoc, deputy chairman of technology FPT Group, “It is critical to create a fair playing ground for different economic sector, especially in accessing State-funded IT projects.”
Experts added that focus should be paid to develop IT human resource.
According to Pham Van Hai from the Ha Noi University of Technology, the IT sector faces a severe human resource shortage.
A report by job finding website VietnamWorks in 2015 said that Viet Nam needed 1.2 million IT workers by 2020. However, with the current growth rate of 8 per cent per year, Viet Nam will faced with a shortage of 500,000 workers.
VPSF statistics show that the global digital economy was worth $3 trillion in 2016 with an anticipated annual growth rate of 9 per cent by 2020. ASEAN’s digital economy is worth $150 billion.
PM’s team: ’Race with time’ to restructure economy
HÀ NỘI - Việt Nam can no longer rely on the increasing investment by the public sector and exploitation of natural resources to drive its economic growth in the future, the Prime Minister’s newly established economic council warned in its very first meeting.
The team leader, Dr Vũ Viết Ngoạn, told PM Nguyễn Xuân Phúc during the Saturday meeting that the country should focus on strengthening investment efficiency and labour productivity in order to bring Việt Nam back to the path of economic growth of over seven per cent.
“The restructuring process of the economy is in a race with time,” Ngoạn said. “Unless we have practical measures to realise the Government’s orders and set the whole administrative system in motion, we won’t be able to achieve key economic goals set by the 12th Party Congress.”
Dr Vũ Thành Tự Anh, director of research at the Fulbright Economics Teaching Program in Vietnam, agreed that economic restructuring is a must for development, especially when the balance of payments, the State budget and the currency are stretched thin.
According to the council members, short-term and medium-term policies should take into account two fundamental issues: eliminating difficulties and reducing business costs while improving the performance of the State-owned business sector.
Prof Dr Trần Ngọc Anh of Indiana University in the US suggested the PM develop a table tool tracking the work of the ministries and local authorities to monitor how the PM’s and Government’s policy orders are carried out.
Also attending the meeting, Deputy Prime Minister Vương Đình Huệ said several measures suggested by the consultants were similar to those the Government was implementing, proving that the Government was on the right track so far.
Huệ, however, asked the team to work on particular issues, such as the reasonable growth level that can be expected, or the roles of the State and the private sector in a socialist-oriented free market economy like Việt Nam’s.
PM Phúc welcomed all the suggestions, agreeing with the experts on the need for administrative reform to create a better investment environment.
He said that he believed the team would become a key channel in developing new economic policies and measures. - VNS
Vietnam to go public with budget spending in August
Piles of Vietnamese currency are being counted by hand in this photo illustration. Photo: Tuoi Tre
A new circular effective from next month will require bodies operating on state budget in Vietnam to make their spending plans public.
By Tuoi Tre News
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