Thứ Ba, 28 tháng 7, 2015

BUSINESS IN BRIEF 28/7


New roads being built to Cat Lai port
Roads connecting Cat Lai Port with the road networks in the area are being built as HCM City seeks to turn the port in District 9 into a modern facility.
The dearth of a good road system was the main cause of frequent traffic jams at the port, the city Department of Transport said in a recent report.
Speaking at a meeting with city leaders on Wednesday, a spokesman for the Cat Lai Port Authority said the increase in cargo handled made Nguyen Thi Dinh Road leading to the port overloaded.
As of July 20, the port had handled 45 million tonnes of goods this year as against 46.6 million tonnes planned for the whole year. On average, it receives 14,000 trucks and other vehicles every day. The huge increase in cargo means container trucks have to queue up to load and unload, causing congestion on Nguyen Thi Dinh Road.
The increasing traffic on HCM City's Beltway No 2 after the HCM City-Long Thanh-Dau Giay Expressway was opened recently has worsened the congestion.
The Cat Lai Port Authority has asked the city to build a road running from the port to nearby Phu Huu Port and widen Nguyen Duy Trinh Road to facilitate movement of cargo to Phu Huu, which can share the burden currently shouldered by Cat Lai Port.
Addressing the meeting, Le Hoang Quan, the Chairman of the city People's Committee, said since it is difficult to raise funds for infrastructure, the authority has to build the link road itself.
The city would sell 20ha of land in Phu Huu Port to Cat Lai for it to resell and raise money to invest in infrastructure, he said.
He instructed relevant departments and agencies to speed up works required for developing Cat Lai into a modern port complex and District 2 and 9 authorities to co-operate with property investors along new roads to improve infrastructure in the area.
According to Sai Gon New Port Corporation, the operator of Cat Lai Port, last year 3,600 ships berthed at the port to load or unload 3.6 million TEUs, up 13 per cent from 2013. The port also handled some 300,000 TEUs transferred from Cai Mep Port in Ba Ria-Vung Tau.
Cat Lai led the country in terms of cargo volumes handled.
It was ranked among the 34 largest and most modern container ports anywhere in the world.
In 2015 the port is expected to handle 4.45 million twenty-foot equivalent units of cargo, including 4.1 million TEUs of container cargo.
Apple Music breathes new life into online service
Apple Music has officially entered the Vietnamese market following its global debut in late June.
Although free download sites have become a dominant force for online music fans here, Apple Music has won over a number of customers.
The service is offering a free three-month trial to users before officially starting to charge them US$9.99 per month for access to over 30 million songs in the Apple Music library. However, it is offering a lower fee for users in Viet Nam at around VND60,000 (US$2.76) per month.
With an eye-catching, simple and easy to use platform, Apple Music also offers users a variety of choices, from streaming music to listening to its 24/7 Beats 1 radio, or connecting with artists who join the Apple social network. Moreover, Apple also supports searching in Vietnamese.
Listing regulations spur trading on the UPCoM
New data showed that regulations on the Unlisted Public Company Market (UPCoM) have been stimulating trades in Ha Noi.
Decree 51, which went into effect in 2014, forces State-owned enterprises to list shares in an official stock exchange or on UPCoM 90 days after making an initial public offering (IPO). This and the recent expansion in daily trading from 10 per cent to 15 per cent in the UPCoM helped increase trades.
According to the Ha Noi Stock Exchange, the UPCoM organiser and operator, more than 200 companies have listed shares here with total market capitalisation of more than VND38 trillion (US$1.74 billion).
The daily trading value reached nearly VND70 billion ($3.2 million) this week. Wednesday saw the highest value, nearly VND150 billion ($6.9 million). This nearly doubled the average per-session value of the past six months, VND40 billion ($1.8 million).
However, trade is mixed, as a small number of stocks have high liquidity while most others have seen sluggish trading.
Only six codes often have trades of more than 100,000 shares per day. Twenty-one stocks have daily trading volumes of between 10,000 and 100,000 shares. Meanwhile, more than 60 per cent of of stocks have traded less than 1,000 shares per session.
Despite posting heavy losses, beverage company AnViFish (AVF) is among the most active stocks in the UPCoM with daily trade ranging from 200,000 to 500,000 shares.
The company was forced to move from the Ha Noi Stock Exchange to the UPCoM on June 18 after it recorded a loss of VND893 billion ($41 million) in 2014, making its equity charter to negative VND370 billion ($17 million).
Other speculative stocks include Petroleum Dong Do (PFL), metal producer Huu Lien Asia Corp (HLA) and Viet Hai Shipping & Real Properties Corp (VSP) with trades of 50,000 to 300,000 shares per session.
Newly listed shares like chemical company DAP-Vinachem (DDV) and Tri Viet Securities Co (TVB) also attracted investors' interest.
DDV's average trading volume reached nearly 360,000 shares per day after just over one month of being listed, just behind AVF and Sacombank Securities Co (SBS). However, the company posted a poor performance with a loss of VND38.4 billion ($1.8 million) in the second quarter of 2014.
TVB's result was better with a profit of VND8.3 billion ($381,000) in 2014, a tenfold increase over 2013.
Asia-Pacific firms slow to provide mobiles for work
Only 38 per cent of the workers in small- and medium-sized businesses in 10 Asia-Pacific countries are assigned mobile devices for work, a recent study has found.
US technology giant Microsoft surveyed more than 2,000 workers, including 200 from Viet Nam, for the Microsoft New World of Work index based on people, places and technology. The index provides insights into the workers' current work and life needs and the factors that prevent them from thriving.
The mean score for the Asia-Pacific countries and territories was 40 out of 100. Taiwan had the lowest score of 21, while Indonesia achieved the highest score of 62. Viet Nam was ranked third in the region, with a score of 44.33.
The survey found that 59 per cent of the respondents were not given enough devices to work efficiently in a modern working environment. At the same time, 99 per cent of them said they were required to be on call outside working hours (after 5pm) in order to do their work effectively.
Sixty-six per cent of the respondents said they needed to be present in their office to have access to important equipment or tools, while 36 per cent had to be in the office to access important information. Only 34 per cent of the respondents believed they were productive outside the office, such as at home, at customer sites or in public places.
In Viet Nam, 80 per cent of the respondents said they used four or five productivity tools, including email, document collaboration, file sharing and virtual meetings.
Microsoft Vietnam General Director Vu Minh Tri said small- and medium-sized enterprises accounted for more than 90 per cent of the businesses in Asia and 93 per cent of the businesses in Viet Nam.
"We conducted the survey to better understand changes in the way of living and working of employees in the Asia-Pacific region. Technology innovation is essential to help them increase their effectiveness at work. The companies still need a corporate culture, policies, infrastructure and the ability to cooperate to remove obstacles to initiatives in order to boost their competitiveness," he said.
HCM City office market set to bustle by year-end
In the second half of 2015 the HCM City office market is expected to add more than 100,000sq.m of office space from one grade A and three grade B projects, according to the latest report from Cushman and Wakefield on the city real estate market.Competitive deals remain available for the best and largest tenants as new supply gets delivered with Vietcombank, Lim Tower 2, and Pearl Plaza being the most prominent. A lack of quality Grade A leasable space may mean rents will stabilise in the fourth quarter of 2015.
In the second quarter occupancy rates for both grades continued to increase, grade A by 1 per cent on both a quarterly and yearly basis to 92 per cent, and grade B, whose average occupancy has trended upwards during the last eight quarters, by some 2 per cent year-on-year to 94 per cent.
Grade B buildings in the central business district (CBD) achieved a high average occupancy of 94per cent.
Approximately 35 per cent of grade B buildings in this area saw occupancy increase. On the other hand, over the last four quarters average occupancy remained slightly lower in the CBD then elsewhere at 95 per cent, showing that tenants remained attracted due to the area's affordability.
In terms of rents, the average rents of both grades remained stable on both a quarterly and yearly basis at around VND1 million (US$46.60) per square metre per month for grade A and VND595,000 ($27.30) for grade B.
Affordable apartments of small sizes will continue to be the most sought-after. Notably, there is no future supply located in the city centre due to limited supply of development sites while permission to build housing is also difficult to obtain.
Therefore, future supply will be in non-CDB areas but which offer easy access to the city centre – such as Districts 7, 2, 4, and Binh Thanh.
Especially projects located along the first metro line will attract more buyers and investors.
Some suburban districts like 8, 9,12, and Binh Tan with an abundant stock of affordable apartments, sufficient land for projects and improving infrastructure are also attracting developers and low income earners.
The amendments to the Housing Law, which took effect on July 1 and allow foreigners to own commercial properties in Viet Nam will help strengthen demand, especially for mid – to high-end projects.
In addition, the new guarantees required by developers from banks for new developments will add more confidence to the market. However, the cost of these guarantees is expected to be passed on to the consumer.
The residential market in HCM City continues to improve and this is likely to continue throughout 2015 and beyond.
Bac Ninh's FDI climbs to $7.83b
The cumulative foreign investment in the northern province of Bac Ninh was worth US$7.83 billion as of June 20, ranking it ninth out of the country's 63 provinces and cities, the Foreign Investment Agency said.
In an online report on Thursday, it said Bac Ninh ranked third out of 11 localities in the Red River Delta.
The manufacturing and processing sector accounted for $7.12 billion or 91 per cent of the FDI, with the property sector ranking second with around $332 million.
Almost all the FDI projects are wholly foreign-invested, with the rest being joint ventures, joint stock companies or business co-operation contracts.
Singapore topped the list of foreign investors, accounting for 35.6 per cent of FDI, followed closely by South Korea with 33.1 per cent and Japan with 10.5 per cent.
Singapore-registered Samsung Electronics' $2.5 billion project is the largest foreign-invested one.
The second largest investment is $1 billion by South Korea's Samsung Display Company Limited.
HCM City reviews bank-business links
HCM City has set a credit target of VND127.7 trillion (US$5.86 billion) this year for its bank-enterprise linkage prog-ramme, a meeting heard yesterday.
Speaking at a meeting to review the programme over the last three years, To Duy Lam, director of the State Bank of Viet Nam's HCM City office, said around 80 meetings had been organised since July 2012 to bring banks and companies together.
The programme had surpassed its targets every year in the three years when banks agreed at these meetings to provide loans worth VND145.1 trillion ($6.66 billion) to 6,298 businesses, he said.
In the first half of this year alone they had provided credit worth VND77.6 trillion ($3.56 billion), he said.
Under the programme borrowers enjoyed preferential interest rates of 6-7 per cent for short-term loans and 9 per cent for medium- and long-term loans, he said.
Nguyen Thi Hong, deputy chairwoman of the HCM City People's Committee, said the programme had significantly helped businesses, thus contributing to the city's economic growth.
The cheap loans helped enterprises reduce costs and invest in technologies to boost their competitiveness, she said.
Tran Tu, chairman and general director of Savi Pharmaceutical Joint Stock Company, said like many others his company too had cash flow problems in 2010-12, but the programme helped it borrow from VietinBank and sustain growth.
The company now enjoyed an annual growth rate of 20 per cent as it exported to demanding markets like Japan, he said.
Nguyen Hoang Minh, deputy director of the SBV's HCM City office, said the truth was that many companies still had difficulty borrowing from banks.
In the second half of the year, the city would continue to study businesses' demand for credit and organise meetings in all the city's districts, he said.
The city as well as the SBV would also keep a close eye on the disbursement of the loans, he said.
Central Highlands targets economic development connectivity
Connectivity for Central Highlands economic development, especially in terms of infrastructure, tourism and value chains of several farm produces, was the dominant topic of a workshop held in Buon Ma Thuot city in the Central Highlands province of Dak Lak on July 24.
Participants proposed mechanisms rallying resources for transport and irrigation infrastructure, including stepping up the progress of road projects connecting the Central Highlands with the south central and southeast regions, Ho Chi Minh City and Da Nang.
According to them, a regional transport infrastructure foundation should be established.
Several raised an idea to set up a regional tourism coordinating board to link the Central Highlands with other localities and seek support from ministries and agencies.
Another board is also expected to assist with the development of value chains of key farm produce and extend the commercial reach of coffee, pepper and rubber.
They also agreed to establish a regional foundation that will foster connectivity models in coffee production, processing, preservation and consumption up to Good Agricultural Practices (GAP) standards.
The event was co-hosted by the Steering Committee for the Central Highlands, the Party Central Committee’s Economic Commission and the Vietnam Economic Times.-
Domestic product consumption surges
Some 63 percent of Vietnamese people are choosing domestic products, doubling the rate from before the campaign “Vietnamese people use Vietnamese products” was launched six years ago, a senior official said, quoting the 2014 survey.
During a conference on July 24 to review the implementation of the campaign in the first half of this year, Deputy Minister of Industry and Trade Ho Thi Kim Thoa said 92 percent of the interviewees said they were aware of the drive, 54 percent of which personally involved in the campaign.
She urged the sector to focus on developing the domestic market in tandem with campaign implementation in order to enhance the competitiveness of domestic enterprises and the consumption of domestic products.
The Deputy Minister said the campaign has yielded positive changes, particularly in domestic product quality and design.
Le Viet Nga, Deputy Director of the Ministry’s Domestic Market Department, highlighted the major market share made-in-Vietnam products account for among products sold by domestic and international distributors.
As many as 50 promotion events, including trade fairs, have been organised to introduce domestic products to residents in rural, remote and mountainous areas across the country.
This year, the Ministry has invested in developing infrastructure facilities and enhancing technology application in enterprises under its management to improve their product quality and competitiveness.
Looking forward, it aims to boost the consumption of domestic industrial products by strengthening the connections among businesses in the northern and southern regions.
It also calls for government investment in promoting the campaign while mobilising social resources for the drive.
Prime Minister Nguyen Tan Dung has approved a project worth 228.93 billion VND (10.75 million USD) on increasing the consumption of domestic goods in close link with the ongoing campaign.
The two initiatives aim to increase the market share of domestic products in Vietnam to 80 percent by 2020.-
Agricultural administrative reform to focus on serving people, businesses
Administrative reform in agriculture should focus more on people and enterprises by issuing practical documents facilitating agricultural production and serving the integration process, stated Minister of Agriculture and Rural Development Cao Duc Phat.
In order to enhance reform efficiency, leaders of the ministry and its agencies should acknowledge shortcomings while building legal documents in the field and raise the sense of responsibility in proposing the omission of unnecessary procedures, he said at a conference on July 24 to review five years of administrative reform in the sector and map out orientations for 2016-2020.
From 2016-2020, the ministry will continue completing mechanisms and policy systems focusing on management in the value chain from input to processing and marketing.
The ministry will also review the efficiency of administrative procedure in all areas, especially those related to people and businesses, stated the minister.
He noted that from 2011-2015, the ministry issued and proposed 323 documents, including three laws, 21 decrees and 281 circulars, helping promote the role and strengths of the sector amid tough economic situations.
During the conference, participants also pointed out that many legal documents issued by the ministry remain inefficient and are unfeasible.
According to Head of the ministry’s Legal Department Nguyen Thi Kim Anh, together with overlapping and unsystematic documents, there is a lack of regulations on the circulation, processing and producing of farm produce as well as the development of a rural economy and management of rural trade.
She also pointed to the slow reforms of the legal document system and the ineffective supervision of law enforcement in the sector.
HCM City to disburse 127,333 billion VND in loans for businesses
Ho Chi Minh City plans to disburse another credit package worth 127,333 billion VND (583.6 million USD) this year to provide preferential loans for local enterprises.
The credit package is part of the “Connecting banks and businesses” programme, which was launched in 2012.
To Duy Lam, Director of the Ho Chi Minh City Branch of the State Bank of Vietnam , told a conference held on July 24 to review the initiative that the programme provided low-interest loans for around 6,300 customers over the past three years, with a total capital of 145,111 billion VND (66.5 million USD).
Meanwhile, Nguyen Thi Hong, Vice Chairwoman of the Ho Chi Minh City People’s Committee, held that the programme has contributed to maintaining and recovering production and business activities in the locality while supporting the market and promoting the city’s economic growth.
It has also helped settle businesses’ difficulties related to capital, credit and interest, supporting them in improving their financial capacity and competitiveness, she added.
In the second half of this year, the programme will focus on monitoring and inspecting credit package disbursement and ensuring commercial banks’ smooth disbursement of registered credits.
From 2016-2020, a number of activities will be organised to support enterprises and remove obstacles through improved policies and a more favourable competition environment.
Fruit and vegetable exports record rapid growth
Vietnam earned nearly 879 million USD from exporting fruits and vegetables in the first half of this year, a 28.41 percent increase compared to the same period last year, the Vietnam Economic Times reported.
With this result, fruit and vegetable export turnover is likely to reach 2 billion USD as a number of demanding markets are opening their doors to Vietnamese agricultural products, such as Australia, the European Union (EU), Japan and the US.
Vietnamese fruits and vegetables have been shipped to more than 40 countries and territories, with the key markets consisting of China, Japan, the US, Russia, Taiwan, the Republic of Korea (RoK) and Singapore. China remains Vietnam’s top importer, accounting for 33.44 percent of all fruit and vegetable exports from Vietnam.
Japanese authorities recently gave the “go ahead” to importing Vietnamese mangos cultivated in Xuan Loc district in the southern province of Dong Nai. Japan is now Vietnam’s second largest fruit importer, accounting for 4.79 percent of Vietnam’s total fruit and vegetable exports. Japanese customers buy Vietnam’s concentrated juices, canned fruit and processed vegetables.
The export of these agricultural products, which are considered fresh and competitively priced, to new markets such as Australia, Canada and Russia are also increasing.
According to the American Market Department under the Ministry of Industry and Trade, in order to capitalise on the US’ taste for fresh fruits and vegetables, Vietnam has submitted a list of 11 fruit varieties to the US Animal and Plant Health Inspection Service (APHIS) to enlarge this potential market. To date, red and white flesh dragon fruits, lychee and longan have been admitted to the US market.
However, Vietnamese fruit and vegetable exports still face a number of challenges, such as limitations on cultivation areas that apply Vietgap and Globalgap, and inadequate investment in processing and preserving technologies.
According to experts, in addition to quality improvement, trade promotion and marketing mechanisms need to be adapted in order to stabilise the fruit and vegetable export growth.
Meanwhile, Huynh Quang Dau, Vice Chairman of the Vietnam Fruit Association (Vinafruit), recommended that fruit businesses develop their facilities in line with international standards and help famers improve irrigation systems and seed varieties.
New generation of FTAs: Opportunities and challenges
Free Trade Agreements (FTAs) have increased in recent years, posing numerous opportunities and challenges for Vietnamese enterprises since tariffs are no longer a barrier. However, the liberalisation of services and investment is much harder to achieve.
After a decade of being a member of the World Trade Organisation (WTO) - a milestone that marks the first investment wave in Vietnam - the country is now negotiating a range of new free trade agreements (new generation FTAs), such as the Trans-Pacific Partnership (TPP) agreement and the Vietnam-European Free Trade Agreement (Vietnam-EU FTA), which are expected to bring the second wave of investments.
According to statistics published by the Vietnam Chamber of Commerce and Industry (VCCI), Vietnam is expected to remain at the forefront of this trend among the 12 countries joining TPP negotiations. The nation’s gross domestic product (GDP) is forecasted to increase by 23.5 billion USD by 2020 and export value is expected to increase to 68 billion USD by 2025.
However, VCCI Chairman Vu Tien Loc said the promising figures can only be achieved in an “ideal” situation - if Vietnam meets international standards and makes use of opportunities, particularly with big and important partners like the European Union and the US.
New generation FTAs create great opportunities for Vietnam to increase its price competitiveness compared to the WTO (members states only commit to reducing but not eliminating tariffs for “some” but not “most” tariffs). FTAs, therefore, include hugely beneficial preferential conditions, particularly tariff incentives.
On the other hand, tariff preferences also pose a number of challenges as tariff exemptions are applied only to export products that have a clear origin. In Vietnam, most raw materials have poor quality, which can hinder Vietnamese products from entering FTA markets.
Meanwhile, since FTAs are reciprocal agreements, Vietnam will no longer enjoy its “home ground” advantages. Local enterprises will have to keep prices low but provide high quality products and services to TPP member countries.
Furthermore, free trade is not based on utility, but on the legal framework. New laws and policies for production will have to be devised, especially for agricultural production.
When tariff barriers are removed, relative advantages and the distribution of labour between economies become clearer.
Vietnam enjoys a stable political and economic climate, and has abundant natural resources and manpower. Its strengths lie in apparel, footwear, electricity, consumer goods, and high-tech agriculture sectors, which are expected to create opportunities for capital investment and management cooperation.
In terms of the business climate and corresponding policies, the new generation FTAs could initiate a wave of institutional and administrative reforms, making Vietnam a more effective and market-oriented economy.-
Crab exports to Australia increase sharply
Vietnam exporters shipments of crab to Australia during the five months leading up to June enjoyed a robust year-on-year rise of nearly 185% to hit a record setting US$889.000, according to the Vietnam Trade Office in Australia.
The Vietnam Association of Seafood Exporters and Producers (VASEP) in turn unveiled that the dramatic rise in crab exports lead to an overall jump of 2% in aquatic exports to the land down under for the five month period.
Vietnam stands as the fourth largest nation exporting crab to Australia, just after Myanmar, Thailand and Indonesia, with exports consisting mainly of frozen and processed crab the Trade Office reports.
The average price for Vietnamese imported crab during the January-May period hovered around US$8.50 per kilo.
A spokesperson for the Trade Office said Australia is a demanding market which requires high quality products. Therefore, to compete with other nations in the ASEAN bloc, Vietnam’s aquatic exporters should strive to continue improving product quality.
HCM City monorail line No 2 costs US$690 million
Ho Chi Minh City's monorail line No 2 linking District 8 with the Thanh Da - Binh Quoi Urban Area in Binh Thanh district will cost over VND15 trillion (nearly US$690 million).
According to the HCM City Management Authority for Urban Railways (MAUR), the 27.2km route will start from the Nguyen Van Linh Avenue- National Highway No 1 A – National Highway No 50 intersection (in District 8) and run through densely populated residential areas in districts Binh Chanh, 2, 7 and Binh Thanh.
An 8ha maintenance depot will be built in Phong Phu commune in Binh Chanh.
Tuoi Tre (Youth) newspaper quoted the authority as saying the BOT (Build – Operate - Transfer), BT (Build – Transfer) or PPP (Public – Private Partnership) mode of investment would be adopted.
According to the adjusted master plan for transportation for the period through 2020 approved by the Government, HCM City will have eight metro lines, six bus rapid transit routes and three tramway or monorail lines.
The 16.5km monorail line No 3 will run from the Phan Van Tri - Nguyen Oanh crossroad (in Go Vap district) through Quang Trung Software Park to Tan Chanh Hiep in District 12.
The monorail lines, which can carry 90 to 125 passengers and travel at 80-90 km per hour, are aimed at easing traffic congestion, MAUR said.
A 13km tramway No 1 line will run from Ba Son Shipyard through Ton Duc Thang street, Me Linh Square, Vo Van Kiet street, and Ly Chieu Hoang street to the Western Bus Station in (Binh Tan district), and Thanh Da Urban Area in Binh Thanh district.
Vietnam's trade deficit: A signal of strength
The nation’s trade deficit grew by more than US$3.07 billion in the six months leading up to July 2015— a further vindication of the nation’s improving economy, reports the General Department of Vietnam Customs.
The growth indicates higher economic activity and an increase in the capacity of the economy to produce goods and services according to economists from Vietnam Customs, who compiled and released the figures.
Foreign direct investment (FDI) disbursements throughout the nation continue to increase – principally in the manufacturing sector – and as that happens then imports of machinery, equipment and construction related materials are inevitably bound to rise and add to the trade deficit.
While the increased deficit has led some leading experts to warn that the chronic gap between imports and exports remains an open wound in the nation’s generally improving economy, Vietnam Customs brushed those concerns aside.
“As a nation we import basically everything,” said Vietnam Customs in its latest report.
“When you see an increase in the deficit, that definitely indicates something is happening in the economy,” the report said, pointing to increases in construction material imports and machinery and equipment showing more building activity in the country.
The Vietnam Customs report shows that during the period from January-June the nation’s total goods and service trade jumped 13% on-year to US$158.61 billion with exports tallying in at US77.77 billion (up 9.3%) and imports at US$80.84 billion (up 16.7%).
Most significantly the report shows that 63.5% of the nation’s total trade of US$158.61 billion (or US$100.71 billion) was directly attributable to FDI invested companies, which represents a 22% hike compared to the first six months of 2014.
In its report,Vietnam Customs said this deficit really shouldn’t be surprising as it’s connected with the patent need by FDI companies to import materials and equipment to construct manufacturing facilities and build-up inventories in Vietnam.
“It has also been long forecasted,” the report added.
Vietnam Customs has forecast large deficits throughout 2015 and 2016 saying they are inevitable and nothing to worry about so long as overseas orders of products start picking up steam by late 2015.
The nation’s total domestic goods and services trade during the six month period tabulated to just US$57.90 billion and that definitely shows weakness and lack of competitiveness by domestic businesses.
In addition, all of the recent business surveys reveal that approximately 90.3% of all businesses currently operating in Vietnam are bullish on the number of new export orders increasing in the latter part of 2015, Vietnam Customs underscored.
FDI invested companies are the most sanguine as a hefty 51.3% of them predict the number of overseas orders will fly sky high by the end of the year with only 8.6% forecasting the figure will decline.
The Ministry of Industry and Trade (MoIT) is also upbeat on the good news and forecast export revenues will hit a record setting US$165 billion by the end of this year, noting that exports have already reached US$77.77 billion, equivalent to 47% of the year’s target.
Japan courts dietary supplement market
A Vietnamese company, Tocontap Saigon JSC, recently collaborated with seven Japanese businesses to sponsor a seminar introducing nutritional supplements from Nara prefecture in Vietnam.
Nara, the ancient capital of Japan, is famous for its rare herbs said to possess many health benefits. At present, Nara is also a centre for producing a variety of dietary products and has contracts with popular brands like Waki, Shinsei, Daisho, and Nihon.
During the seminar, the seven Japanese companies introduced their products namely Nananomi Collagen Ace, Two Top Q10 Drink RJ Coenzyme Q10, Vitamin B1, B2, B6, B12, Rehone Pro and an anticancer treatment named Happoutake.
Tocontap Saigon JSC has partnered with a number of Japanese businesses to introduce products to the Vietnam market since it was first founded in 1956 by the Ministry of Industry and Trade (MoIT).
The company specializes in exporting and importing essential goods such as household utensils, leather and footwear, rubber, and clothes.
New cooperative models boost agricultural development
As Vietnam shifts to mass production, cooperatives are asked to adapt to new market mechanisms and international economic integration to help boost agricultural production.
By 2014, Vietnam had a total of 10,400 cooperatives engaged in agricultural production, only 10% of which were functioning well with reformed production, advanced technologies, and a close connection with businesses.
Since Vietnam’s Law on Cooperatives was issued in 2012, few new cooperatives have been established, while many have been dissolved due to poor performance attributable to an outdated approach which focuses on simply providing input services for agricultural production.
Cooperatives need to strengthen their interconnection to satisfy mass production requirements for registered brands, marks of origin, and certificates of quality. These are the basic conditions for joining the international trade deals Vietnam has signed or is negotiating.
Ma Quang Trung, head of the Department of Economic Cooperation and Rural Development of the Ministry of Agriculture and Rural Development, said, "The role of cooperatives in agricultural production is of great importance because the production of an individual farmer has little competitiveness in the market as Vietnam integrates into the world. Farmers must cooperate to create products of high quality under good and effective management."
In the past, cooperatives provided services to farmers with little connection to outside markets. As Vietnam began to industrialize and modernize, cooperatives revealed a number of shortcomings in their bulky systems, small-scale production, and slow adaptation to market changes.
Many cooperatives produce the same product, leading to lower prices after bumper harvests. In a new roadmap establishing a new model for cooperatives in the 2015-2020 period the Vietnamese government emphasizes the importance of recognizing the role and influence of cooperatives in a market-oriented economy.
Vuong Dinh Hue, head of the Party Central Committee’s Economic Commission, told VOV, "The first and foremost task is to raise awareness. We need to raise public awareness of the role, influence, and economic potential of the collective economy, and the difference between the old and new model of cooperatives. It’s also of great importance to raise the awareness of authorities at all levels on publicizing and implementing the Law on Cooperatives, and putting current policies on cooperatives into practice."  
The new model cooperatives are expected to give a strong boost to Vietnam’s agricultural production by encouraging farming households to be creative in their cultivation, husbandry, and fishing activities.
Under this new model, farmers will be given timely support from the government and cooperatives to increase their competitiveness and tighten their cooperation with businesses.
FPT IS inaugurates IT system for Cambodia
FPT Information System (FPT IS) launched the financial management information system (FMIS) for the National Treasury of the Royal Government of Cambodia early this week.
This is the first information technology system to be deployed on a nationwide scale in Cambodia.
 The project is expected to become operational in eight subsidiaries of Cambodia's economy and finance ministry by the end of 2015, and at 25 provincial treasury offices by March 2016.
Thailand seeks closer IT, telecom ties with Vietnam
Thares Punsri, chairman of Thailand's National Broadcasting and Telecommunication Commission, said he hoped to sign a memorandum of understanding with Vietnam on telecoms and information technology.
It has signed an MOU with Laos, and plans to sign ones with Cambodia and Myanmar soon, he said during a meeting with Deputy Minister of Information and Communications Le Nam Thang in Ha Noi on July 23.
Thang expressed his support for the initiative, and instructed the ministry's Department of International Cooperation to liaise with Thailand to draw up the MOU.
Punsri said Vietnam and Thailand should strengthen co-operation in IT and telecoms to have a stronger voice on the international scene in the context of the ASEAN Community that will be formed at the end of this year.
Thang said ASEAN countries needed to co-operate with each other to have a common voice to boost the development of telecoms and IT. He hoped Vietnam and Thailand would share their experiences to set up their respective national broadband networks and make terrestrial digitisation plans.
Agricultural administrative reform to focus on serving people, businesses
Administrative reform in agriculture should focus more on people and enterprises by issuing practical documents facilitating agricultural production and serving the integration process, stated Minister of Agriculture and Rural Development Cao Duc Phat.
In order to enhance reform efficiency, leaders of the ministry and its agencies should acknowledge shortcomings while building legal documents in the field and raise the sense of responsibility in proposing the omission of unnecessary procedures, he said at a conference on July 24 to review five years of administrative reform in the sector and map out orientations for 2016-2020.
From 2016-2020, the ministry will continue completing mechanisms and policy systems focusing on management in the value chain from input to processing and marketing.
The ministry will also review the efficiency of administrative procedure in all areas, especially those related to people and businesses, stated the minister.
He noted that from 2011-2015, the ministry issued and proposed 323 documents, including three laws, 21 decrees and 281 circulars, helping promote the role and strengths of the sector amid tough economic situations.
During the conference, participants also pointed out that many legal documents issued by the ministry remain inefficient and are unfeasible.
According to Head of the ministry’s Legal Department Nguyen Thi Kim Anh, together with overlapping and unsystematic documents, there is a lack of regulations on the circulation, processing and producing of farm produce as well as the development of a rural economy and management of rural trade.
She also pointed to the slow reforms of the legal document system and the ineffective supervision of law enforcement in the sector.
Lam Dong a hotbed for Agricultural Innovation
When it comes to high-tech agricultural innovation, the smart money is on the Central Highland province of Lam Dong where farmers seek big markets with strong growth prospects.
In the first six months of 2015 farmers in the province imported 30 million seeds and seedlings belonging to 41 species from 26 countries around the globe as part of an effort to jump start high-technology agriculture in the region.
Along with flower, fruit and vegetable seeds the imports included more than 29.9 million trees and flower bulbs from as far away as the Netherlands, US, France, Chile, Australia and Japan.
Lam Dong province is a pioneer in Vietnam aiming to be at the cutting edge in agricultural service and a leading agricultural exporter of fruits and vegetables to the world.
Jan-July FDI disbursement increases
Some $7.4 billion in foreign direct investment (FDI) was disbursed from January to July, equal to 109.6 per cent of the figure for the same period last year, according to the Foreign Investment Agency under the Ministry of Planning and Investment. $1.1 billion was disbursed in July.
Newly-registered capital in July was $3.3 billion, a slight rise compared to June. The total of newly-registered and additional capital from January to July was $8.8 billion, equal to 92.4 per cent of last year’s figure. Newly-registered capital was $6.9 billion in the seven months, an increase of $100 million compared to same period last year. Additional capital was only $1.8 billion, equal to 70 per cent of the figure last year. $1.3 billion belonged to 245 projects in manufacturing and processing.
In July the three sectors attracting most FDI were manufacturing and processing, with $1.95 billion, real estate with $1.23 billion, and wholesale, retailing and repair with $18 million.
The FDI sector continued to record a trade surplus in the first seven months, with $65.69 billion in export turnover (including crude oil) and $56.6 billion in import turnover.
MoIT seeks export opportunities
The Ministry of Industry and Trade (MoIT) plans to promote the export of Vietnamese products through foreign-invested enterprises (FIEs) operating in Vietnam and foreign retailers in the country, according to Deputy Minister Ho Thi Kim Thoa.
MoIT has worked with major retailers such as Metro, Big C, AEON, and Lotte in Vietnam to export Vietnamese products to their distribution networks in other countries, Mr. Thoa told a meeting on the results of the “Vietnamese People Prioritize Vietnamese Goods” campaign in the first six months of this year.
Some 200 types of Vietnamese consumer products will be widely sold in South Korea this year, valued at about $1 million, or four times higher than in 2014, due to the support from Lotte Vietnam.
MoIT is also conducting promotion activities with major distributors such as Walmart from the US and Auchan from France regarding the purchase of Vietnamese goods for their networks.
Regarding the domestic market, the proportion of Vietnamese products in distribution channels nationwide is quite high, at up to 90 per cent.  
The campaign has been implemented for six years and gained positive results in changing Vietnamese consumers’ behavior, with more beginning to choose Made in Vietnam goods and having a greater belief in their quality of local products.
FPT Software to boost staff numbers
FPT Software currently has the highest number of staff among the subsidiaries FPT Telecom, with 8,000, and plans to have 10,000 by the end of the year.
From 2012 to 2015 FPT Software created over 4,000 new jobs in Vietnam and overseas, in Japan, the US and Slovakia, doubling its staff numbers from the original 4,000. Some 1,000 of these new staff were in its overseas operations.
FPT Software said it needs to recruit about 4,500 to 10,000 staff a year to achieve its ambition of earning $1 billion in revenue and employing 30,000 staff by 2020. To have sufficient human resources it plans to recruit both domestically and overseas. In its long-term strategy, ASEAN is considered a center of human resources, new technology, and research and development.
The company is also focusing on investing and developing new IT services and solutions, providing expert solutions to automobile manufacturing, banking and finance, insurance, television entertainment, aviation, and electricity.
In May, FPT Software established a subsidiary in Cebu, the Philippines, which is expected to be a service development center with IT ability and staff numbers as large as its other centers in Vietnam, with 150 staff this year and 1,500 by 2020.
Farming friend
LienVietPostBank was unscathed by the problems experienced by other banks some years ago and continues to be a major player in the sector, with a particular focus on agriculture.
More than seven years ago, when it first joined the market, LienVietBank identified its priority business strategy in its so-called “Agricultural Triad” (agriculture, rural areas, and farmers). It was obviously one step ahead in having credit policies towards these sectors. Moving even closer to its target, LienVietBank made a wise move in merging with VNPost (the Vietnam Post Corporation) and LienVietPostBank (the Lien Viet Post Joint Stock Commercial Bank) was established in 2008 with charter capital of VND3.3 trillion (some $150 million at the current exchange rate but much more at the time).
According to the bank’s reports its basic financial indicators have maintained very high growth since 2008. Its charter capital increased from the original VND3.3 trillion to VND3.65 trillion ($170 million) in 2009 and 2010, then VND6.01 trillion ($275 million) in 2011 and VND6.46 trillion (nearly $300 million) in 2012 to 2014.
Regarding mobilized capital, one of the basic elements measuring liquidity, LienVietPostBank has created a solid foundation, with VND3.801 trillion ($174 million) in 2008, VND13.399 trillion ($614 million) in 2009, VND30.421 trillion ($1.39 billion) in 2010, VND48.148 trillion ($2.2 billion) in 2011, VND57.628 trillion ($2.64 billion) in 2012, VND71.139 trillion ($3.26 billion) in 2013, and VND91.759 trillion ($4.2 billion) in 2014.
Unlike many other banks, LienVietPostBank doesn’t focus solely on profit indicators but attaches great importance to financial security so it may create a safe cushion in the course of its operations. According to Mr. Nguyen Duc Huong, Vice Chairman of LienVietPostBank, it is among a small number of banks that have not sought refinancing from the SBV for liquidity support since 2008.
2008 to 2010 was a golden period for Vietnam’s banking sector. Many reserved a significant proportion of loans for the stock market and real estate market. The attraction was so substantial that many banks funded the two markets with corporate bonds before authorities blew the whistle to avert the potential risk. LienVietPostBank had not followed such a path, however, and this was one factor in it successfully becoming a major funding institution on the interbank market when liquidity chaos broke out in subsequent years, which led many others to the verge of bankruptcy.
Being consistent with its aims in the “Agricultural Triad”, a sector considered to pose many risks by its competitors, the bank even set aside 40 per cent of its funds for loans to the sector. LienVietPostBank was one of the pioneers in deploying a new strategy of “the left hand gives, the right hand receives” in  providing loans to agricultural enterprises and farmers in the Mekong Delta.
Specifically, the bank lends to enterprises who are centralized agricultural product purchasers for export. They use the funds to finance the supply of seeds, chemicals, and fertilizers to farmers. When the harvest arrives, farmers sell their products to these centralized purchasers, with the earnings for farmers being equal to total revenue minus inputs provided. The difference in this business model is that LienVietPostBank required the enterprises open accounts at the bank. From here, money flows directly to farmers and then flows automatically back to the bank from farmers when the harvest is completed, meaning the bank always has strict control over the money flow and enterprises are prevented from using the loans for other purposes.
The “once in a lifetime” M&A deal with VNPost gave LienVietPostBank access to an extremely large distribution network of more than 10,000 post offices around the country, even in remote rural areas.
The channel not only provided for sizeable capital mobilization but was also safe, as large customers tend to come and go and leave banks in a state of liquidity flux if they withdraw substantial sums, for instance, while the small amounts of capital mobilized on a regular basis from farmers presents no such risk. “From this year onwards, one of the priorities of the bank is to fully exploit postal savings points at post offices to lend and collect from farmers in all parts of the country,” said Mr. Pham Doan Son, CEO of LienVietPostBank. “This is a unique advantage of LienVietPostBank that no other bank has, not even Agribank.”
SHB to increase charter capital
The Saigon - Hanoi Commercial Bank (SHB) has gained approval from the State Bank of Vietnam (SBV) to increase its charter capital from VND8.86 trillion ($406.14 million) to VND9.48 trillion ($434.56 million).
The approval was given in Document No. 5420/NHNN-TTGSNH.
The increase will be done via issuing additional shares, which will also fund paying a dividend for 2014, under a plan approved by shareholders at the annual general meeting (AGM).
At the AGM the bank set targets for 2015 of reaching VND200 trillion ($9.16 billion) in total assets and increasing its charter capital by VND1.62 trillion ($74.26 million) to VND10.48 trillion ($480.40 million), an 18 per cent increase.
Profit after tax is targeted at VND1.12 trillion ($51.34 million), an increase of 10.6 per cent against 2014.
Non-performing loans are to be managed at less than 3 per cent.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR

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