BUSINESS IN BRIEF 16/1 Vinacomin focuses investment on key projects Deputy PM Hoang Trung Hai has urged the Vietnam National Coal and Mineral Industries Group (Vinacomin) to strengthen management and improve its performance to meet the country’s coal demands. At Vinacomin’s January 14 conference in Hanoi, Hai said the group must proactively respond to emerging challenges and ensure key projects can rely on sufficient capital and human resources. It should accelerate coal mine construction in anticipation of increasing demand and apply comprehensive labour safety measures, he said, adding the private sector can help with restructuring and mobilising investment. The Deputy PM acknowledged improvements in thermal power projects have been better but emphasised greater efforts are needed as Vietnam’s electricity still depends on imported coal. Hai encouraged the Ministry of Industry and Trade and Vinacomin to pursue trial coal exploitation in the Mekong Delta. Vinacomin General Director Le Minh Chuan said the group has planned a series of measures to accelerate coal exploitation and improve the quality and efficiency of its operations. It aims to mine 35 million tonnes of coal, with 27 million tonnes for domestic use and the remainder for export. Chuan forecasts rising coal demands combined with sluggish investment and high input costs poses challenges for the group. Vinacomin has asked its affiliate companies to adjust production in line with the market law of supply and demand, so as to take advantage of favourable market conditions. It strives to use domestic materials and capitalise on new technologies to raise investment efficiency. Vinacomin mined 42.6 million tonnes of coal in 2013, down 4%, against the previous year. It sold 39.1 million tones, of which 27.1 million tonnes was for domestic use. Its revenues rose 6% to VND100 trillion. The average monthly salary of its workers stood at VND7.76 million. Businesses to be honoured with State distinction Twenty-five businesspeople and 25 businesses in Hanoi will receive the State’s Independence and Labour Orders in Hanoi to recognise their contributions to local and national development. More than 100 other businesses will be also awarded certificates of merit for their outstanding performance in 2013. The awards ceremony will be held at Hanoi’s Opera House on January 17 by the Municipal Emulation and Rewards Committee and the Hanoi Small and Medium Businesses Association. Organisers say despite domestic and global difficulties, Hanoi’s businesses made an extraordinary effort in 2013, riding out the economic slowdown and standing firm at home and abroad. More than 500 business representatives are expected to attend the event to share experience in weathering the storm and reaping success in operation. Public confidence worth its weight in gold The Government has instructed the State Bank of Vietnam to issue "proper" policies in order to mobilise gold hoarded by the public and use it for socio-economic development. Experts have suggested several ways to do this, including the issuance of gold deposit certificates that can be used in derivatives market transactions. In the past, the focus has been on "larger national interests" that failed to consider the factors behind the Vietnamese public's long-standing tradition of hoarding gold, which they see as the safest investment and insurance in times of economic and financial uncertainty. The Government's latest instructions have come after three years of applying several administrative measures to encourage people to release their gold hoardings and settle the "disorder" that the domestic market for the yellow metal had experienced over the past several years. The disorder, which included significant price differences between domestic and world gold prices and the impact of speculative activities, has been blamed by many experts on weak legal and technical frameworks that governed the market. The situation was exacerbated by developments in the forex market that undermined public confidence in the domestic currency. In response, the State Bank of Vietnam had taken several steps including suspension of 20 gold trading floors, the closure of all gold deposit accounts at commercial banks, stricter conditions for trading in gold bars, establishment of a single national brand and conducting gold auctions. Last year ended with the closure of gold deposits as well as the end of a 12-year bull run on gold, domestic prices of which plunged 24% year-on-year towards the year-end. Vu Viet Ngoan, Chairman of the National Financial Supervisory Committee, said given the perspective that the decline in local gold prices was in keeping with the world trend, the central bank's moves have stabilised the domestic market. World gold prices fell 28% in 2013 after the US Federal Reserve announced plans to reverse its ultra-loose monetary policy starting January 2014, diminishing gold's appeal as a hedge against inflation. With Vietnam having completed blocking most ways of doing business with gold legally, and the propensity for intensive speculation and major market fluctuations reduced significantly, policymakers do have a new opportunity to have gold hoardings by the public released for national development, experts agree. The administrative measure applied in the gold market thus far is likened to a tactic employed by Vietnamese children to catch cave crickets. They block all except one exit with solid objects and pump water into a nest. The crickets have no choice but to escape through the only exit that is open, allowing the children to capture them easily. However, "capturing" hoarded gold might not be that easy. They suggest that the central bank issues gold deposit certificates for fixed-term deposits that cannot be withdrawn before the maturity date. Gold deposits mobilised thus can be used as collateral at foreign credit institutions to borrow foreign currencies at cheaper costs. The capital thus raised can be used to further socio-economic development, they say. They also say that to facilitate this process, policymakers need to prepare "competent legal and financial grounds," as also a derivatives market where the gold deposit certificates can be traded easily. However, they confirm that no measure can be effective unless public concerns are allayed and the gold deposit certificates have the liquidity that allows owners to use them for purposes that gold had been traditionally used for, like buying major assets including land and other properties. Japanese businesses seek opportunities in HCM City Nearly 40 Japanese businesses are conducting investment and trade promotion activities in Ho Chi Minh City over January 14–15. Their diverse fields of operation cover the support industry, precision engineering, automobile and motorbike manufacturing, automation, and industrial machinery. Mitsutoshi Okabe, the Ehime branch chief of the Japan External Trade Organisation (JETRO), spoke at a seminar on support industry links between Ehime Prefecture and Ho Chi Minh City. He explained the prefecture’s focus on machinery, equipment, technology, and heavy industry in the north, tourism and services in the central region, and agriculture in the south. Okabe hopes his visit will help Japanese businesses take advantage of the prefecture’s complementary economic, trade, and investment similarities Ehime shares with HCM City and its neighboring provinces. HCM City People’s Committee Vice Chairman Le Manh Ha elaborated on the municipality’s efforts to honour its status as Vietnam’s economic hub, inspiring industry boosting initiatives including industrial zones and technology parks tailored to foreign investors. The city works hard to ensure it has the necessary seaports, airports, education, healthcare, commercial centres, hotels, and restaurants to cater to foreign partners, he said. By the end of 2013, HCM City had attracted around US$33 billion in foreign direct investment capital. More than US$11 billion of the total was invested in industry. Japan is currently the city’s third largest foreign investor with combined capital exceeding US$3 billion (including US$1.3 billion in industry). Ha urged Ehime businesses to promote their products, services, and technologies locally and explore mutually beneficial cooperative opportunities with HCM City’s small and medium-sized enterprises. Shrimp exports to China increase sharply China has cemented its place among the world’s largest purchasers of Vietnamese shrimp, importing US$350 million in 2013 turnover, an annual increase of 53%. The Vietnam Association of Seafood Exporters and Producers (VASEP) reports the surge helped push China beyond the Republic of Korea and into fourth on the list of the largest Vietnamese seafood consumers. Seafood exports to China increased by 40% in 2010, 20.5% in 2012, and 38% in 2013, respectively. Chinese shrimp shortages in the wake of early mortality syndrome  (EMS), falling from 1.5 million tonnes to 1.1 million tonnes, contributed to its larger quantities of Vietnamese imports. The price of Vietnamese shrimp exports on the Chinese market has remained a stable US$7.50–US$8.50 per kilogram over 2006–2013, and is only expected to rise in the near future. Experts warn against excessive celebration, noting Vietnamese shrimp has yet to meet the high standards demanded by more lucrative markets such as the US, Japan, and the EU. Processed shrimp made up 3.6% of Vietnamese shrimp sales to China. Frozen raw shrimp occupied the remaining 96.3%. Vietnam’s shrimp exports across all markets are split into 31% processed shrimp and 69% frozen raw shrimp. Agricultural exports to rise sharply in 2014 Government economists are predicting significant expansion for Vietnam’s agricultural exports in 2014. According to the Vietnam Fruits and Vegetables Association (Vinafruit), 2014 is looking like it will be another bumper year for vegetable exports, which have experienced annual growth rates of 20% to 30% in recent years. The Vietnam Pepper Association (VPA) in turn has forecast that the export volume of pepper will be around 125,000 to 130,000 tonnes with total revenue remaining relatively unchanged from 2013 at US$900 million. The revenue forecast is a rather conservative estimate based on the assumption that pepper prices were stable in 2013 and will not increase in 2014.  Pepper prices hovered around VND120,000 a kilo throughout 2013. For rice exports, the Ministry of Agriculture and Rural Development and Vietnam Food Association (VFA) said the export outlook is expected to remain unchanged compared to 2013. However, Vietnam will face tougher competition from Thailand and other main rice suppliers in Asia. India will remain the world’s leading supplier and a strong rival of Vietnam this year. VFA says despite falling demand in Southeast Asia, Vietnam is still in a position to win government-to-government export contracts with regional countries. China, Vietnam’s biggest rice importer, is forecast to continue its high level of imports, yet economists warn of trade risks from this market. VFA says Vietnam’s rice exports will reach around 6.5-7 million tonnes this year. Taxation sector asked to help remove obstacles for business Deputy Prime Minister Vu Van Ninh has asked the taxation sector to continue designing policies to ease business difficulties, creating suitable growth in 2014. Speaking at a January 14 conference to review the sector’s operation in 2013, Ninh said it is necessary to clearly classify debts and outline plans to collect and settle stagnant debts. He said the sector should exert more efforts to prevent fraudulent transfer pricing, control tax refunds and speed up administrative reforms as well as the application of information technology in tax management, while strengthening training for staff. The sector should also continue fostering coordination with others and enhance dialogues with enterprises, he stressed. Bui Van Nam, General Director of the General Department of Taxation, in 2014, the sector will strive to exceed the set target for State budget collection by a minimum of 5%, while intensifying tax inspection in at least 14.65% of the total operating enterprises. The sector will also enhance the control of tax refunds in accordance with the law, especially in value added tax. It will work to provide access to an e-tax service for 90% of business taxpayers, so they can submit their declarations online, Nam said. He said that negotiations for double taxation avoidance agreements with other countries and territories will also be stepped up. Meanwhile, transparency in investment, equipment purchasing and staff recruitment will also be enhanced. According to the General Department of Taxation, the sector collected VND676.696 trillion (US$31.8 billion) in tax, equivalent to 105% of the projection and 112.7% of the figure in 2012. Of the amount, tax from crude oil sales was VND120.436 trillion (US$5.64 billion) and domestic tax was VND556.260 trillion (US$26.144 billion), equivalent to 102% of the projection and up 17.8% over that of 2012. Forty-seven out of the 63 localities nationwide reached their projection, while tax arrears collected after inspections totalled nearly VND13.200 trillion (US$602.4 million) and loss reduction was VND11.430 trillion (US$537.21 million), the department said. It added as of November 30, 2013, the sector collected 52% of all tax debts. A debt increase of over 30% was seen in as many as 30 localities, while a decrease was enjoyed in seven others. Overseas employment growth to boost 2014 remittances Remittances to Viet Nam are expected to increase this year, boosted by better employment prospects in overseas markets and new investments by overseas Vietnamese, according to economic think-tanks. Le Xuan Nghia, a former vice president of the National Financial Supervisory Committee, said that according to the data and market analysis of the past three years, remittances increased every year. Remittances to Viet Nam were US$9 billion in 2011, $10 billion in 2012 and $11 billion last year. There are two main sources for the country's remittance inflows. The incomes of Vietnamese workers overseas are likely to increase as unemployment rates fall to 4-5 per cent from 9-10 per cent in some developed countries, including the United States, Canada and Australia. Several Vietnamese workers are also likely to venture into new labour markets. Nguyen Thi Nhu Ly, the Regional Director of Western Union, Indochina, said remittances are being repatriated to Viet Nam from an increasing number of countries. In 1994, the remittances transferred via Western Union came from only 16 nations. Today, remittances originate from more than 200 countries and territories. In addition, the Government's policies have become more supportive for Vietnamese workers hoping to work abroad. Workers can send money home for investments, noted Vietcombank Deputy General Director Pham Thanh Ha. Vietnamese individuals who live abroad but have retained their Vietnamese citizenship can now buy property without restrictions, according to the latest decree on the implementation of the Land and Housing Law. Those who are eligible to buy houses in Viet Nam can also enjoy other privileges, such as transferring land-use rights when selling property, using credit institutions to mortgage their land-use rights and leasing their properties. The Viet Nam Association of Financial Investors' General Secretary, Nguyen Hoang Hai, added that the increasing stability of the dong has aided in attracting increased remittances. In a report released in October, the World Bank noted that Viet Nam ranks among the top 10 countries receiving the largest inflows of remittances. The country received $10.6 billion in remittances in 2013, 6.5 per cent higher than 2012's figure. According to the Committee for Overseas Vietnamese Affairs, some 4.5 million Vietnamese live in more than 100 countries and territories around the world. There are also around 500,000 Vietnamese guest workers. Decree 95 stiffens fines for labour rights violations On 22 August 2013, the Government issued Decree No 95/2013/ND-CP, referred to hereafter as Decree 95, that sets out administrative sanctions for violations relating to labour rights, particularly those related to social insurance and overseas labour contracts. An important part of Decree 95 is the increase in penalties imposed on unlicensed employment services. A fine of VND45 million to VND60 million (US$2,142-$2,857) will be imposed on firms illegally operating any employment service or those continuing operations after their business license has expired. Decree 95 also revised penalties for infringements relating to payment of wages. Fines of VND5 million to VND45 million can be imposed on any employer who: does not pay salary on time; pays less salary than stated in information submitted to competent authorities; pays lower than regulated wages for overtime work or night-shift work; and deducts wages of workers in contravention of existing regulations. Any employer who pays less than the minimum wages prescribed by the Government will be fined between VND20 million and VND75 million. Additionally, the operations of such employers can be suspended for one to three months based on the level of violation. Penalties of VND10 million to VND20 million will be imposed on any employer who requires female workers who are (i) at least 7 months pregnant (6 months if working in remote areas, highlands or border areas) or (ii) have children under 12 months old to work overtime, work night shifts or go on business trips. Decree 95 also says that administrative penalties will be doubled for violations committed by an organisation rather than an individual. Penalties for violations related to social insurance: An administrative penalty of VND500,000 to VND1,000,000 ($238-476) will be imposed on employee who reaches an agreement with the employer on not participating in compulsory social insurance and unemployment insurance schemes. An administrative fine equal to between 12 per cent and 15 per cent of the total compulsory social insurance and unemployment insurance amount, but not exceeding VND75 million, will be imposed on employers who: do not pay the mandatory social insurance and unemployment insurance premiums on time; do not pay compulsory social insurance and unemployment insurance at stipulated levels; and do not make social insurance and unemployment insurance payments for all employees. A fine at the rate of between 18 and 20 per cent of the total amount of money payable for compulsory social insurance and unemployment insurance at the time of preparing the minutes of administrative offence, but not exceeding VND75 million, shall be levied on any employer who fails to pay compulsory social insurance or job loss insurance for all employees eligible for both benefits. Fines for violations related to overseas labour supply contracts: Administrative fines of VND150 million to VND200 million shall apply for the following acts: sending workers abroad without registration of manpower supply contracts or probation acceptance contracts; or when such contracts have been registered but not yet approved by the competent State body; or when any contractor, tender winner or organisation conducting offshore investments sends Vietnamese workers abroad without reporting to the competent State body or when it reports the sending of workers abroad, but has done so before obtaining approval from competent State body. In addition, such enterprises, contractors and organisations can be suspended from sending workers overseas for six to 12 months based on the level of violations committed. Enterprises in the business of sending workers abroad will be fined between VND5,000,000 and VND10,000,000 if: they fail to publicise details of their business license in accordance with regulations; they fail to publicly list their decision to assign the service to a branch and display a copy of the business license at the branch office; appoint someone without a bachelor's degree or higher qualification to a management position; and fail to report changes in executive leadership. Decree 95, which took effect on 10 October 2013, replaced Decree No. 47/2010/ND-CP, dated 6 May 2010 on penalties for violations of labour regulations, Decree No 86/2010/ND-CP, dated 13 August 2010, on penalties for administrative violations of social insurance regulations and Decree No. 144/2007/ND-CP, dated 10 September 2007, on penalties for administrative violations related to sending workers overseas. DATC acquires $82m of business debt The Debt and Asset Trading Corporation (DATC) signed 15 contracts to buy debts valued at nearly VND1.8 trillion (US$81.82 million) in 2013. The Ministry of Finance announced the figure at a meeting in Ha Noi on Monday. Last year, the corporation's total revenue was VND530 billion ($24.09 million), including revenue from debt trading activities of more than VND326 billion ($14.82 million). In the past year, DATC focused on negotiations with commercial banks to buy bad debts of mainly state-owned groups and corporations, and restructured five state-owned enterprises into joint stock companies. This year, DATC is targeting the restructuring of 20 businesses, including restructuring the debts of 12 enterprises that converted from 100 per cent state ownership to joint stock companies. In addition, the government-owned entity recently said it is necessary to increase its scale of operations and capital, as well as reconsider its business model. In particular, it wants to become the main national entity under government management responsible for dealing with bad debts, according to Thoi bao Kinh Te Sai Gon (The Saigon Economic Times). The corporation is also seeking permission to increase its chartered capital and the right to issue government-guaranteed bonds that will be used to buy debts from credit institutions. It has also mentioned the necessity of establishing some joint stock companies in which it hopes to hold shares ranging between 36 per cent and 49 per cent. The joint stock companies are expected to have a total charter capital of VND2 trillion ($90.9 million). The expectation is that these companies will help attract more capital from different financial sources, which would help the process of settling bad debts. Locally made equipment exported to Mexico Doosan Heavy Industries Viet Nam has shipped Heat Recovery Steam Generator (HRSG) components to the Intergent thermal power plant in San Luis Potosi, Mexico. The company told Viet Nam News yesterday that it is the first export shipment of made-in-Viet Nam components this year. Production for the 200 MW Intergent HRSG project began last July at the company's 110-ha complex in Dung Quat Economic Zone of central Quang Ngai Province. Doosan Vina has completed and shipped 10 HRSG units to customers in Viet Nam and around the world since 2009. Cast iron, steel plant opens in Tuyen Quang A cast iron and steel plant, built with Chinese investment and having a capital of US$50 million, opened in the northern mountainous province of Tuyen Quang on Monday. Covering 20ha in Long Binh An Industrial Zone, the plant is expected to produce 200,000 tonnes of cast iron per year in its first phase. The plant is expected to contribute VND1.5 trillion (US$70.5 million) to the province's industrial production value and over VND100 billion to the State budget every year, while providing 700 jobs. VN posts $384m trade surplus with Czech Republic Bilateral trade between Viet Nam and the Czech Republic had surpassed $500 million by the end of November 2013, according to the Vietnamese Trade Office. During the reviewed period, Viet Nam had an export surplus of $384 million, with items enjoying high turnover including seafood, agricultural products, chemical and plastic products, garments, footwear and electronics. Meanwhile, Viet Nam's imports from the Czech Republic were valued at $124 million – exceeding $100 million for the first time in many years. Among key imports were engineering goods, electronics, crystal, glass and medical equipment. The trade office also predicted that these impressive trade results would help accelerate bilateral economic relations in the near future. Ca Mau targets 1.1 billion USD in aquatic exports The southernmost province of Ca Mau has set a target of earning over 1.1 billion USD from exporting aquatic products in 2014, a year-on-year increase of 10 percent. Local authorities expect aquaculture will be a spearhead sector in the province’s economic development and said they will work out a series of measures to achieve the goal, prioritising the export of aquatic products, said Ly Van Thuan General Director of the provincial Seafood Processors’ Association. The province will improve aquaculture and catching to ensure a supply of 250,000 tonnes of material shrimp a year, meeting 50 percent of processing demand. It plans to expand export markets via trade promotion activities, focusing on major markets such as the US, the EU, ASEAN, Japan and China. The province will also actively join international economic integration by participating in regional and international fairs to boost exports while enhancing cooperation with other localities and foreign partners. It will also create favourable conditions for businesses, reduce costs and raise employee salaries.- New centre for Integrated Circuitry opens in Da Nang The Da Nang Department of Information and Communications recently inaugurated its new Centre for Integrated Circuitry (CENTIC). According to the Dang Nang Today online newspaper, the new centre will conduct research on technologies to develop integrated circuitry (IC) and embedded systems (ES). Special attention is also paid to applying IC and ES for communication devices, electronic appliances, and industrial production lines. In addition, a focus is placed on transferring research results on IC and ES to individuals and organisations at home and abroad. The aim is to help them to apply these results to develop their production and improve the quality of their lives. Top priority is also given to training IC and ES human resources. Vice Chairman of the municipal People's Committee Phung Tan Viet promised that the local authorities would create very favourable conditions to facilitate the centre’s operation. He also asked for more assistance from consultants to help the centre develop effective and highly-applicable products.- HSBC predicts Vietnam dong to stay stable this year HSBC Global Research released a report on Thursday predicting Vietnam dong will stay stable this year owing to better economic fundamentals, but warns that loosening measures, if any, could put the currency at risk. The U.S. dollar-Vietnam dong exchange rate has been stable for seven months now since the central State Bank of Vietnam depreciated the local currency by 1% in June, at VND20,828 to the dollar on the inter-bank market. After initially weakening to VND21,250 per dollar, the local currency has stabilized to trade around the new midpoint, HSBC remarks in the report. It also noted that the foreign exchange rate had been stable for a long time since December 2011 before the central bank weakened Vietnam dong last year. In its report, the bank’s researchers refer to several factors that help keep the local currency stable. The balance of payments continues to stay on a stabilization trend. The trade balance rebounded in the second half of 2013 thanks to better exports, supported by the previous currency devaluations and seasonal factors. Structural advantages such as competitive labor costs could also have contributed to the brighter export outlook. “The ongoing restructuring trend is dampening consumption and investment demand onshore and hence curbing import demand, something which should continue in 2014,” according to the report. In addition, the combination of a modest trade surplus and strong remittance inflows will continue to provide current account support for the currency. FDI inflows were also strong in 2013, registering US$21.6 billion compared to the Government’s full year target of US$13-14 billion, while equity portfolio flows also showed a steady upward trend in 2013, as Vietnam’s economic outlook improved. Last year’s fourth-quarter GDP rose 6.0%, quickening from 5.5% in the previous quarter. The upbeat growth outlook is likely to continue to attract foreign inflows in the form of FDI and portfolio inflows. “We believe the overall positive flows have helped the SBV to further build up FX reserves, which helps to improve Vietnam’s import coverage ratio though this is still low compared with most of Asia,” says the bank. Inflation has been largely stable, thanks to the weak demand caused by the domestic banking system deleveraging. Although the recent trend in CPI is slowly trending higher, there is limited risk for it to rise above the policy rate in the near future. Hence real interest rates should stay in positive territory and help to reduce dollarization risks. But there are still risks to this outlook. “Stability in the current account and inflation has a short track record and prudent monetary policy is required to keep them in check,” says the bank, warning that signs of excessive monetary loosening or another pick-up in inflation would be red flags for the currency. Meanwhile, the credit-to-GDP ratio, although lower than its 2012 peak, is still relatively high – at 93% versus 125% in 2010 – compared to the levels of economic development. This indicates further deleveraging and restructuring may have to come, which could add pressure to banks’ asset quality and drag on economic growth. Economists believe transparency in price adjustment necessary Vietnam Television recently broadcasted an income report of the employees in industrial parks. Workers in industrial parks resort to asking loan-sharks, with high interest rates of up to 20 percent a month, to afford transportation and commodities for family in the country. Although the government is successful in controlling inflation prices, employees in industrial parks are earning poverty-level wages. Sai Gon Giai Phong Newspaper held talks with deputy head of the National Assembly’s Economic Committee, Nguyen Duc Kien, and Tran Du Lich, a National Assembly delegate. Both experts claim that poverty levels are due to several factors -unrelated inflation. The cause is transparency in price adjustment, said Nguyen Duc Kien.  When the price of petroleum increases, companies mislead the cause due to loss of subsidies. For instance, when price of petroleum increased, the concerned agencies explained that the adjustment is unavoidable to subsidize the loss. Consumers set up a query for Dung Quat Oil Refinery. The concerned agencies say that the refinery still has to import crude oil for processing. Laborers are unable to make ends meet with their small income, said Tran Du Lich.  The country is dependent on cheap labor costs and a long-lasting insourcing industry.  The government should encourage local enterprise to produce hi-tech accessories, Lich said. Lich also believes there is a need for a roadmap to increase education and medical service fees. PM affirms necessity for Long Thanh International Airport construction Prime Minister Nguyen Tan Dung said that it is necessary to build Long Thanh International Airport, as an upgrade to Tan Son Nhat International Airport to raise its annual capacity to 40 million passengers would be costly and unfeasible. According to the PM, the southern economic zone is Vietnam’s economic centre, which sees the highest aviation transport demand in the country and must meet rising transport demand for both domestic and international routes. Currently, Tan Son Nhat Airport is designed to meet a maximum demand of around 25 million passengers per year. It is located in the city's centre with high population density, but without a land fund for an upgrade or expansion in line with the International Civil Aviation Organisation (ICAO). He said it would be costly and unfeasible for the airport to make an upgrade plan that would raise its annual capacity to 30-40 million passengers, government leaders said, adding that the construction of Long Thanh International Airport will help to mitigate overcrowding Tan Son Nhat International Airport. Long Thanh International Airport has been named in the country’s airport development plan. Currently, management agencies have been completing investment procedures to report them to the State Appraisal Council before they are submitted to the government and National Assembly for approval. After they are approved by the National Assembly, the search for investors will begin. By 2030, Long Thanh International Airport will be expanded to replace Tan Son Nhat International Airport, becoming the most important airport in the southern region and the biggest international airport of Vietnam, with an annual capacity of 80-100 million passengers per year. The project is planned to be located on a 5,000-ha site, and will cost around USD13 billion. The large cost has raised eyebrows among many, who say it would add too much to the national debt. Argentina prioritises Vietnam market The Argentina government considers Vietnam one of the world’s most dynamic emerging economies and one of its key export markets over 2014-15. Buenos Aires recently announced a list of 24 priority economies in its market expansion strategy, aiming to raise its export earnings to US$94 billion in 2014 and US$101 billion in 2015. The list includes 15 emerging economies such as China, India, Indonesia, and Vietnam from which Buenos Aires expects to get high export value. Industry Minister Debora Giorgi says the strategy was drawn up to help small and medium-sized businesses and localities to boost exports. To meet the target, Argentina plans to attend 252 international fairs, conduct 70 trade promotion tours overseas, and receive 22 foreign importers. The government will provide credits to support export activity. Argentinean exports have increased 11% annually over the past decade. Export earnings of industrial products rose from 26% in 2003 to 34% in 2013. Two-way trade between Vietnam and Argentina hit a record high of US$1.5 billion in 2013, and the latter enjoyed a high trade surplus. Plastic export revenues jump 57% Viet Nam's plastics industry earned US$2.2 billion last year, posting a 13 per cent increase from the previous year. The export turnover from plastic products accounted for $1.8 billion. Ho Duc Lam, chairman of the Viet Nam Plastic Association, told Customs newspaper that the export turnover of plastic materials was $407 million, representing a rise of 25 per cent and 57 per cent from the previous year in terms of quantity and turnover, respectively. Plastic material production requires the use of high technology, which generates higher-value exports compared with common plastic product exports. Lam said the industry last year exported 20 plastic products to foreign markets; six of these products generated a turnover of more than $100 million each. In particular, the exports of plastic bags, films and garbage bags generated a turnover of over $150 million last year. Plastic bag exports posted an increase of 27 per cent in 2013 over the previous year, while the growth in exports of plastic decorative products was 26.4 per cent. Viet Nam's plastic products were shipped to 151 countries and territories, including high-demand markets, such as Japan, the United States, Germany and the European Union. Japan is the country's largest importer of plastic products, importing goods worth $401 million and accounting for 20 per cent of Viet Nam's total plastic exports. The association noted that Japan continues to hold immense potential demand for the industry's products. Viet Nam exported 20 varieties of plastic products to Japan; 15 of these products generated a turnover of more than $1 million each. Lam urged Vietnamese plastic producers to prepare long-term strategies and invest in market research to increase their penetration of the Japanese market. The US is the second largest consumer of Viet Nam's plastic exports, accounting for $175 million, or 8.6 per cent, of the total export turnover last year. In 2013, plastic producers continued operations, despite facing tough economic challenges. The association forecast a growth rate of 13.5-16.5 per cent for the industry this year because of the global economic downturn. Lam added that domestic plastic producers are facing competition from other countries in the region. Moreover, businesses need to focus on environmentally-friendly and safe products for sustainable growth in exports. Last year, domestic plastic firms accounted for 45 per cent of the country's total export turnover. The balance was accounted for by foreign-investor-led enterprises. Steel corp sets goal of higher output The Viet Nam Steel Corporation has targeted manufacturing nearly 1.5 million tonnes of billet steel and 2.6 million tonnes of rolled steel this year, up 24.5 per cent and 8 per cent from last year. However, the corporation's general director Le Phu Hung noted that the steel industry will have to undertake greater efforts to achieve those production targets as the forecast is that there will be excess supply compared with demand, as well as increasingly fierce competition from Chinese imports. Hung said at a seminar held in Ha Noi late last week that the corporation also proposes to undertake corporate restructuring by focusing on privatisation. At the seminar, Nguyen Manh Quan, director of the Ministry of Industry and Trade (MoIT)'s Department of Heavy Industry, predicted that the steel industry will continue facing stiff competition this year, especially after Viet Nam joins the Trans-Pacific Partnership (TPP). The corporation should, therefore, define sound strategies and outline specific plans to meet every eventuality, Quan stressed, adding that MoIT will also introduce measures to solve the problems being faced by the sector this year. Quan said the ministry will co-operate with the Ministry of Finance to help enterprises access higher levels of capital in a bid to promote production and other business operations. In particular, MoIT will host a meeting to help the steel corporation co-operate with the Viet Nam Coal and Mineral Industries Corporation to encourage the coal and mineral mining company to use the steel corporation's output, he added. If the co-operation materialises, it will help the corporation sell a significant quantity of steel products, Quan added. Last year, the sector faced difficulties due to sharply declining demand for steel and increasing competition from rival Chinese companies. Due to the low demand, steel manufacturers reduced production. In 2013, the total number of tonnes of billet steel and rolled steel manufactured was only 93 per cent of the target set for the year. Sindoh invests $30 million in Vinh Phuc device factory Sindoh Vina Co Ltd, a South Korean company, will invest in a factory that will manufacture multi-functional devices and office equipment such as fax machines, copiers, laser printers. The US$30-million factory will be built in Khai Quang industrial zone in Vinh Yen town, Vinh Phuc Province, 40km west of Ha Noi. According to the plan, the factory will be operational from the first quarter of 2015 and will create jobs for 500 employees. This factory will be the 54th project of Sindoh Vina Co Ltd in Vinh Phuc, bringing the total investment capital of South Korean investors in this province to $453.4 million. Phu Quoc grants more investment certificates Last year, authorities in southern Phu Quoc island brought seven new projects into their locality and granted investment certificates to 20 others, thus bringing the total number of projects there to 194. The Investment Management Board of Phu Quoc Island, Kien Giang Province, reported this, adding that in 2014-15, Phu Quoc will focus on developing the transport system by completing work on its south-north road system, the inland roads and the airport. Generali Viet Nam launches education insurance Generali Viet Nam has just launched a new education insurance product, with outstanding savings values, for children. It's meant for 30-day-old infants and older children. The product aims to protect the whole family with flexible premium payment schemes. With a tradition that focuses on investing for the future, the top concern for Vietnamese parents is education costs. Parents can build a large fund for education of their children from regular small annual savings. A protective clause makes sure the fund is always reserved for the children in case the policy owner dies. Work begins on highway expansion A ground-breaking ceremony for the expansion of a 41-kilometre section of National Highway 1A was held in central Quang Nam Province yesterday. This is the second package, for a total of 80 kilometres, to pass through the province and is expected to be completed within 2 years, in line with a Building-Operation-Transfer agreement, with an investment of VND1.4 trillion (US$71 million). The 20.5-metre-wide section, which includes four lanes passing through the four districts of Duy Xuyen, Que Son, Thang Binh and Phu Ninh, will help ease the bottleneck on National Highway 1, which connects Quang Nam with Quang Ngai Province. Speaking at the ceremony, Deputy Prime Minister Nguyen Xuan Phuc lauded efforts made by the local administration to clear sites for the project. He asked the project investor and contractors to make concerted efforts to ensure the project was completed on schedule. Phuc also said investors should select the most suitable construction method to make allowances for existing traffic flows on National Highway 1 during the construction period. Last year, the 140-kilometre Da Nang-Quang Ngai Expressway Development project commenced construction in Dien Ban District of Quang Nam Province. Meanwhile, the Transport Ministry and Central Highlands Lam Dong Province People's Committee kicked off a project on Sunday to upgrade part of National Highway 20 running through the province. The project is expected to cost over VND4.1 trillion ($195 million), including VND1.4 trillion from build-operate-transfer contracts and over VND2.7 trillion from build-transfer contracts. The road is a key route that connects Lam Dong Province – the famous flower and vegetable growing areas in Viet Nam – with HCM City and other roads in the Mekong Delta. Officials noted that the road has been seriously degraded in recent years. Viet Nam, RoK sign agricultural agreement Viet Nam and the Republic of Korea (RoK) yesterday signed a Memorandum of Understanding (MoU) to further agricultural cooperation in a joint effort to improve food security. The MoU follows an agreement reached by the two countries during President Park Geun-hye's visit to Viet Nam last September. In a press release the RoK's Ministry of Agriculture said the two sides would actively increase bilateral exchanges in agriculture with the establishment of a joint committee on agricultural cooperation, to alleviate concerns with food security. The agreement also consolidates the strategic partnership between the two nations and is expected to further promote investment in agriculture in each country, the ministry said. Viet Nam's Minister of Agriculture and Rural Development Cao Duc Phat and his RoK counterpart Lee Dong-phil were present to sign the agreement. During their meeting in Sejong, Minister Lee Dong-phil said the Republic of Korea would endeavour to share skills and provide agricultural technology for Viet Nam. The two ministers also discussed other issues, including the RoK's pork exports to Viet Nam. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR