Thứ Năm, 22 tháng 10, 2015

BUSINESS IN BRIEF 22/10


Forum seeks end to loan sharks

Demand for consumer credit is growing strongly and it is time to eradicate private moneylending, a round table on financial issues heard in HCM City yesterday.

Speaking at the forum, which was titled "more transparent, less troublesome" and organised by Thoi Bao Ngan Hang (Banking Times) newspaper, experts said eliminating loan sharks would protect both consumers and investors, but would become a reality only when credit companies and institutions become transparent.

Nguyen Hoang Minh, deputy director of the State Bank of Viet Nam's HCM City office, said consumer credit had grown strongly in the last three years, three-fold in HCM City in that period.

The oustanding consumer loans are now worth VND80 trillion (US$3.8 billion), or 6.8 per cent of total loans, much higher than in any other city.

"With the rise in population and living standards, consumer credit will continue to further grow."

Minh and other attendees agreed that many people cannot get loans from banks and finance companies for various reasons, which sends them to loan sharks who give them money easily and quickly.

Economist Le Xuan Nghia said, "It is time to eliminate the credit black market, and Viet Nam has the capability to do that."

The Government should allow credit institutions to expand their activities, he said.

To ensure transparency, these companies and institutions should be controlled by the central bank and monitored by legal and consumer protection organisations, he said.

Friedrich Weiss, CEO of Home Credit Viet Nam, said: "The black market will never 100 per cent disappear.

"You can only limit it by opening up the financial market, promoting banks, promoting regulated finance companies and making them really transparent.

"On one hand you have to protect customers and on the other you must protect the investors."

Besides opening up the financial market, authorities should also educate customers, which has been successfully done in many foreign countries to achieve financial market transparency, he said.

Nghia raised another concern when he said credit contracts were difficult to understand and financial companies should simplify them.

In terms of interest rates, the current 39-49 per cent rate per year was very high considering bad debts amount to only 5 per cent, he said.

He suggested setting up more financial institutions so that there would be competition, which would lead to a reduction in interest rates.

Woman-led firms account for 20% of VN market cap

The number of Vietnamese women in senior positions in public companies is still very small, but the picture does appear brighter if one looks at Viet Nam's largest companies.

Of the 680 companies listed on the two national stock exchanges, only 5 per cent are under management of female CEOs. Yet, the market cap of these women-led companies accounted for VND260 trillion (US$11.6 billion), 20 per cent of Viet Nam's total market capitalization.

Some of the biggest firms in Viet Nam, like dairy giant Vinamilk (VNM), real estate developer VinGroup (VIC), Refrigeration Electrical Engineering Corp (REE), FLC Group (FLC) and Kinh Bac City Development Share Holding Corp (KBC) are run by female CEOs.

Nguyen Van Quy, an analyst of FPT Securities Co, spoke to Viet Nam News about the small group of powerful Vietnamese female CEOs. He said, unlike some of their male counterparts, they were more likely to run a tight-ship, especially careful and detail-oriented in planning their business strategies.

One of these outstanding female leaders, Mai Kieu Lien, has worked in the industry for almost four decades and has served as Vinamilk's CEO since 1992.

"Mai Kieu Lien is one of the most powerful businesswomen. She has built a reputation for her decisiveness and care for employees and investors," Quy said.

Lien has made it onto Forbes' Asia's Power Businesswomen list for several years and under her leadership, Vinamilk has recorded consistent growth in revenue and profit since listing in 2006.

Vinamilk is the biggest company on Vietnam's stock market with a market cap of over $6 billion yesterday. Its shares have rallied 39 per cent this year.

"It's very hard for women to be successful in their careers in Viet Nam since they are expected to take on two big positions; perhaps as a manager at company, but also as a wife and mother in the family," Quy said.

VN's marine industry looks for path forward

Viet Nam should use modern technologies to develop Viet Nam's marine industry, experts said yesterday at a conference.

The conference atendees discussed strategies for ocean industry development between Norway and Viet Nam. There were suggestions that Norway share their best practices and expert experience as one of the biggest ocean-based economies in the world.

Torger Reve, head of the Centre for Maritime Competitiveness at BI Norwegian Business School, said that Norway saw a global race and competition between nations and regions to attract the biggest players in the world.

In Norway, ocean businesses such as offshore gas and oil, aquaculture and shipping contribute 80 per cent of the country's export. Norway last year recorded GDP of US$600 billion while Viet Nam's was $200 billion.

Therefore, Viet Nam should consider the ocean industry as a key to improve its economy as it has similar conditions as Norway such as a long coastline, a long history in the marine industry and larger human resources, Torger said.

He said that there were some issues that the Vietnamese Government could do to improve the country's ocean industry, such as encouraging more innovation and creativity in the country to improve productivity, and show some "entrepreneurship" spirit to create "crazy but efficient things" for this industry.

The country's public and private sector need to work in a smarter way, applying advanced techonologies and worldwide knowledge to reduce the development time and catch up with other countries in the world, he added.

Public and private enterprises as well as Government agencies should also improve business integration, not only inside the company but also between private firms and government organisations, he said.

He also suggested that private and public companies should work in a trust-based manner, which may help them keep loyal people and run the business more cost-effectively.

Viet Nam should develop its world-class industrial clusters or global knowledge hubs, which aim to attract talent, modern technologies and high-quality senior managers from all over the world, he said.

He also suggested that Viet Nam should combine research and development, innovation and education with other factors such as global environment and governmental policies to prosper in the ocean industry.

Tran Dinh Thien, Director of Viet Nam Institute of Economics, said that the country had great potential with many natural and geographical conditions to catch up with and even surpassed other marine-based economies such as Norway.

However, the country needs to improve its financial conditions and technological background as well as construct a good system of policies in order to improve the competitiveness for domestic marine businesses, he said.

He spoke of South Korea as an example for using advanced technologies in the ocean industry and having remarkable achievements in marine sectors, especially the energy sector.

Thien also said that the country should concentrate on developing marine industrial zones with good structures and qualities to attract highly skilled labourers.

"Ocean industry will play an important part of the global economy in the future," said Dilek Ayhan, State Secretary at Norway's Ministry of Trade and Industry.

However, Viet Nam's ocean industry would face a lot of challenges when it transformed from a traditional business to a green industry, which uses modern technologies to exploit and preserve marine resources.

Export resilience to boost economy

The Vietnamese economy will likely expand more than 6 per cent annually over the next few years thanks to continued export resilience and ongoing reform measures by the government to improve the country's business environment, according to BMI research firm.

In the latest study in October, BMI research, a Fitch Group company, forecast gross domestic product (GDP) growth will accelerate to 6.4 per cent in 2015, an increase of 0.4 percentage points, compared to 2014 and for the economy to grow in excess of 6.0 per cent in real terms over the coming years.

BMI maintains a "positive outlook" on Viet Nam's economy due to rising foreign investor interest, continued efforts by the government to improve the country's business environment, and the potential for greater private sector participation.

The country has made substantial efforts to establish itself as a key logistics hub in the Greater Mekong region, and consequently has reduced bureaucracy to attract investment.

Specially, firms have benefited from a gradual reduction in tariff and non-tariff trade barriers, increasing the competitiveness of local producers compared to other regional producers.

Regarding the labour market, the study observed that Viet Nam offers a number of notable advantages to firms including a high rate of literacy and an increasingly skilled and well-educated graduate population.

These advantages allow companies to access a competitive and available workforce.

Besides, Viet Nam also has strong potential in the construction and real estate sectors. With the easing of regulations on property ownership for foreigners taking into effect since July of 2015, foreign investors can engage more deeply in the housing market and Viet Nam.

Meanwhile, loose monetary policy and lower inflation will boost the construction and real estate sector in the future.

With regard to foreign direct investment (FDI), the study found out that Viet Nam will attract more FDI in the next quarters thanks to the great effort of the government to stabilise the the economy.

In addition, the Vietnamese government has sent a strong message to investors that Viet Nam will accelerate the process of equitisation of State owned enterprises.

This reform will improve the banking system, as well as reallocate many resources for the private sector.

New strategies urged for TPP

The Vietnamese business community must develop new business strategies in order to be more competitive after the Trans-Pacific Partnership (TPP) takes effect, delegates heard at a conference held last Sunday in Ha Noi.

The conference was organised by the Party Committee of the Central Business Bloc.

The Bloc comprises 33 corporations, groups and banks, including major State-owned enterprises.

"TPP will open a new market of 800 million people, with TPP members representing 40 per cent of global GDP and 30 per cent of international trade purchases," Tran Quoc Khanh, deputy minister of Trade and Industry, and head of Vietnamese TPP negotiation delegation, was quoted as saying in the Sai Gon Giai Phong (Liberated Sai Gon) newspaper.

"Under the TPP, almost all import taxes will be eliminated, but there will be more challenges for the Vietnamese business community," he said. "The business community, especially the Central Business Bloc, must reform to take advantage of the opportunity."

Bui Van Cuong, secretary of the Party Committee of the Central Business Bloc, said the bloc's members all played an important role in the national economy in the electricity, coal, oil & gas, minerals, airline and railway sectors.

These enterprises contribute one-third of the national budget and provide jobs for 1.3 million workers.

The business bloc has 50 investment projects outside of Viet Nam with total registered capital of nearly US$5 billion, with $4 billion implemented.

At the seminar, the Central Business Bloc's corporations, groups and banks shared their readiness for international integration.

Most of them said they were aware of the opportunities and challenges as Viet Nam joins the ASEAN Economic Community (AEC) and takes part in several Free Trade Agreements (FTA), especially the Trans-Pacific Partnership.

Speaking at the event, Pham Ngoc Minh, deputy general director of Vietnam Airlines, said the airline had prepared to cope with severe competition from international airlines, focusing on providing excellent services by choosing state-of-the-art aircraft and hiring foreign experts and pilots.

In the last three years, Vietnam Airlines replaced all of its aircraft with wide-body planes, which are more environmentally friendly and consume less fuel.

"We believe Vietnam Airlines will take the lead in its products in the Southeast Asian region.

The airline will be as good as Thai airlines by 2020," Minh said.

However, Vietnam Airlines would find it difficult to become a global airline due to a lack of financial capacity.

Minh said the goal would be to cooperate with other airlines that do not have the same route map as Vietnam Airlines.

"Vietnamese businesses should work together to compete better. Cooperation would help companies create the most competitive products," Minh said.

Vo Sy Luc, chairman of the board of directors of the Viet Nam Rubber Group, said Vietnamese rubber output had reached 1 million tonnes, accounting for about 8 per cent of the world's rubber output, which is 3-4 million tonnes lower than Thailand and Indonesia. The challenge facing the rubber industry is a lack of consistent quality management.

To integrate successfully, the Government needs to develop a programme to manage the quality of rubber and create a brand for Vietnamese rubber that is internationally recognised.

The industry is facing difficulties due to a drop in prices. This year, the industry is expected to earn a profit of around VND2 trillion ($90 million).

To help the industry compete in the international market, the Viet Nam Rubber Group suggested that the Government continue support for the industry by offering tax and land incentives for rubber plantations.

Also speaking at the event, Nghiem Xuan Da, general director of Viet Nam Steel Corporation, said the steel industry heavily depended on imported raw materials (70-80 per cent).

After the TPP takes effect, import tariffs will be reduced to nearly zero per cent, which will open up huge opportunities for the steel industry.

Steel output for exports is expected to increase by 35 per cent against the current figure.

However, Da noted that opportunities under the TPP would not be shared equally among industries.

Steel businesses are expected to face stiff competition with cheap imported steel, especially from China.

Vietnamese steel is vulnerable to steel imports because the former does not have much added value, while Vietnamese steel businesses lack skills and financial capacity. The industry is also facing a number of dumping lawsuits, which have seriously affected steel exports.

Da suggested that the Government provide support to restructure the steel industry, such as low interest rates for medium- and long-term loans and foreign-currency loans for investment and import of raw materials.

Government agencies should also help businesses cope with international trade lawsuits, especially dumping cases, to reduce the challenges facing the industry.

Nguyen Thien Nhan, chairman of the Central Committee of the Vietnamese Fatherland Front, told businesses and their representatives that there should be more dialogue between enterprises, ministries and other parties to devise the most effective solutions to compete as the TPP takes effect.

Nhan said the Ministry of Industry and Trade and other relevant sectors and associations must listen to suggestions made by enterprises.

Each enterprise should be active in conducting research on new business strategies to take advantage of TPP opportunities. Companies in each industry must work together more closely as well, he said.

"For instance, the concern about being sued for dumping steel. We need to overcome this worry. In order to do that, we should consult international experts with deep knowledge about commercial conflicts," Nhan said.

In order to help society, the business community must learn as much as possible about the TPP, and outline the advantages and challenges of each sector so that enterprises could make thorough preparations, he said.

Finland seeks education, ICT cooperation in Vietnam

Vietnam is an attractive destination and promising market for businesses from Finland, especially in education and communication-information technology (ICT) fields, as heard at a workshop in Ho Chi Minh City on October 20.

Regarding education, Finland has named Vietnam as the only Asian nation in the list of receiving funds from the second phase of the North-South-South education exchange programme.

Several training units in Vietnam such as the Hai Phong University and the Hue University of Medicine and Pharmacy have already established cooperative ties with Finland.

Regarding technology, the two nations have built the Innovation Partnership Programme (IPP) with a non-refundable aid package from Finland worth 3 million USD.

Experts said the bilateral cooperation potential remains enormous and businesses should take advantage of this workshop to seek investment opportunities and trade connectivity tools to expand affiliation in education and ICT as well as other domains.

Addressing the event, Finnish Ambassador to Vietnam Ilkka-Pekka Simila said the cooperation between the two countries has been consolidated in recent time, adding that Finland regards Vietnam as an important partner in economy, trade and investment.

Additionally, the free trade agreement between Vietnam and the EU basically completed in August 2015 has created numerous opportunities and more propitious conditions for Vietnam and Finland to boost their bilateral and multilateral cooperation, he noted.

Director of the Vietnam Chamber of Commerce and Industry’s branch in HCM City Vo Tan Thanh said one of the positive signs in the bilateral relations is the dwindling trade deficit, which hit only 56.6 million USD in 2014, a decrease of 22 percent year-on-year.

Two-way trade in the first eight months of this year reached over 215.6 million USD, of which Vietnam earned some 78 million USD from exports and imported over 137 million USD worth of goods.

Beijing hosts Vietnam-China trade, economic cooperation session

The ninth session of the Vietnam-China trade and economic cooperation committee took place in Beijing on October 20.

Deputy Minister of Industry and Trade Nguyen Cam Tu and Vietnamese Ambassador to China Dang Minh Khoi participated in the event.

The two sides briefed each other on the economic situation in their respective countries and exchanged opinions on how to propel the bilateral economic ties forward.

They acknowledged that since the eighth session, relations between Vietnam and China have seen notable strides. Bilateral trade topped 59 billion USD in 2014; China continues to be one of the biggest trade partners of Vietnam and Vietnam has become the second largest trade partner of China in ASEAN.

According to the General Department of Vietnam Customs, bilateral trade was 49.16 billion USD as of September this year, a year-on-year increase of 16.1 percent.

Both nations agreed to exchange measures to realise the target of 100 billion USD in bilateral trade in 2017 as set by their leaders and gradually address trade deficits from China.

They will continue to effectively carry out the Memorandum of Understanding on cooperating in trading farm produce to promote Vietnamese agricultural and aquatic product exports to China.

They pledged to support businesses to speed up the implementation and ensure the quality of China’s engineering, procurement and construction projects underway in Vietnam as well as its preferential credit packages to build infrastructure and transport projects in the Southeast Asian country.

The two sides concurred to increase coordination between ministries and sectors to weather business hurdles and enhance the comprehensive strategic cooperative partnership between the two countries.-

Border residents entitled to import tariff exemptions

Border residents will be given exemptions from import tariffs and other taxes when buying, selling and exchanging goods valued at the maximum of 2 million VND (89.64 USD) per capita a day for four days a month.

Under the Prime Minister’s recent decision on the management of cross-border trading activities with Vietnam’s bordering countries, those entitled to the exemption include Vietnamese nationals, those from neighbouring countries with regular residences at border areas, and those permitted to reside in border areas by the police agencies of bordering provinces.

The goods must be included in the list of permitted commodities bought, sold and exchanged by border residents issued by the Ministry of Industry and Trade.

Goods with values that exceed the stipulated level will be subject to taxes in accordance with existing legal regulations.

The decision also states that Vietnamese traders who do not have foreign-invested capital are allowed to trade across borders.

Meanwhile, foreign-invested traders, companies and subsidiaries of foreign businesses in Vietnam are allowed to buy and sell goods across borders under the circumstances specified in Vietnamese laws or international treaties where Vietnam is a member.

Traders who buy and sell goods across borders must fulfil tax obligations and are entitled to incentives in line with existing legal regulations and international treaties, the decision added.

Vietnam shares land borders with China, Laos and Cambodia.

Vietnam learns from Norway’s experience in marine economic development

Norway’s experience in sea-based economic development as well as cooperation opportunities between Vietnam and the country in this area were the main topics of a seminar in Hanoi on October 20.

Speaking at the event, Deputy Minister of Foreign Affairs Bui Thanh Son confirmed that Vietnam is keen to enhance international collaboration in maritime economy.

Vietnam and Norway boast substantial potential and opportunities for economic cooperation, he noted.

The Deputy PM stressed the urgent need for Vietnam to raise its competitive edge while boosting sustainable maritime economic development in the context that the industry has become one of the trends that dominate the global economy.

Secretary State of the Norwegian Ministry of Trade, Industry and Fisheries Dilek Ayhan said maritime economy is among priorities of the Norway-Vietnam cooperation.

He voiced his hope that the two countries will conduct more practical activities to strengthen their collaboration in this field.

Prof. Torger Reve from the BI Norwegian Business School shared his country’s experience in the management and administration of sea-based economy as well as scientific and technological research and application in order to increase the industry’s competitiveness.

The encouragement of business start-up spirit and innovations is crucial to sea-based economic development, he said.

Reve added that Norway is one of the first countries worldwide that have invested in building maritime industrial complexes of international standards and the Global Maritime Knowledge Hub.

Delegates at the event also discussed ways to raise the competitiveness of Vietnam’s maritime economic sectors and lure more investment in the industry as well as how to develop maritime economy in harmony with environmental protection.

Auto prices to nearly halve by 2019

A number of types of automobiles will see prices drop by up to 42 percent by 2019 as a result of lower import and special consumption taxes, said Pham Dinh Thi, Head of the Tax Policy Department in the Ministry of Finance.

The official revealed the information at a press briefing on the draft Law on Amendments and Supplements to several articles of the Law on Value-Added Tax, the Special Consumption Tax and the Law on Tax Administration in Hanoi on October 20.

He said taxes imposed on cars with less than nine seats and a cylinder capacity of below 1,000 cubic metres will drop between 15 and 25 percent.

Thi also stressed the need to adjust the special consumption tax levied on autos which are environmentally-friendly and have small cylinders to a level equal to that of other Southeast Asian nations, thus boosting the country’s auto industry.

He explained that the ASEAN Trade in Goods Agreement and a handful of bilateral agreements will reduce import taxes on cars as well as commodities subjected to the special consumption tax to zero percent.

Vietnam has limited time to abolish auto import taxes in 2018 as committed, the official noted.

According to him, taxes on vehicles with less than nine seats and a cylinder capacity of below 2,000 cubic metres in many regional countries hovers at only 15-30 percent.

Vietnam’s special consumption tax is higher than the average of other ASEAN nations like Indonesia, Thailand, Singapore and Malaysia, Thi said.

Responding to concerns whether tax reductions would affect State budget collections, he said Vietnam’s announcement of the special tax consumption contraction roadmap is bound to lure more investors.

The increase in market size and advanced support industry could add much more to the State budget than the current taxes, Thi said.

Dong Nai chocolate to enter regional markets

A business in southern Dong Nai province is taking the lead in producing UTZ certificated chocolate for outbound shipments to regional nations.

The Trong Duc Cocoa Co. Ltd is closely working with its Japanese partner to prepare the first batch for shipping in early 2016. It aims to process up to 40 tonnes of fresh cocoa pods annually and targets Japan, the Republic of Korea and Taiwan (China) as potential export markets.

The company has thus far created a network of farmers across Dinh Quan, Tan Phu, Thong Nhat and Xuan Loc districts to develop 1,000 hectares of cocoa trees, 134 hectares of which have obtained the UTZ Certified Good Inside.

UTZ Certified is a creditable programme and label for sustainable coffee and cocoa farming and is featured on more than 10,000 different product packages in over 116 countries.

Under the programme, local farmers are equipped with improved and greener agricultural methods, which help cut costs and raise productivity.

Each kilogram of dried beans fulfilling UTZ criteria is sold for 2,500 VND (0.11 USD) higher than the average price.

Jetstar celebrates women’s day with discounted tickets

The budget carrier Jetstar Pacific is offering as many as 10,000 tickets for only 20,000 VND (0.9 USD) for 22 domestic and international routes on the occasion of the Vietnam Women’s Day (October 20).

Accordingly, tickets will be available from 11:00 October 20 to 24:00 October 22 on www.jetstar.com and the carrier’s ticket offices nationwide. The fares will exclude taxes and fees.

For international routes, passengers have the option to pay after registration.

On the occasion, hundreds of passengers in the Noi Bai and Tan Son Nhat international airports were surprised to receive gifts from Jetstar Pacific right on the conveyor belts.

Jestar Pacific, the first low-cost carrier in Vietnam, is a member of Jestar Group, one of the leading airlines in the Asia-Pacific.

Currently, the airline is operating 25 domestic and international routes.

On October 25, Jestar Pacific will launch three new domestic air routes: Hue-Da Lat, Chu Lai-Buon Ma Thuot, and Ho Chi Minh City-Pleiku.

Vietnam offers gateway for Middle East, Africa goods

Vietnam is willing to be a gateway for goods and services from the Middle East and Africa to navigate the markets of ASEAN member states, Deputy Prime Minister Vu Van Ninh said at a seminar held by the Foreign Ministry in Hanoi on October 20.

He expressed his satisfaction with the eight-fold increase in bilateral trade between Vietnam and the Middle East and Africa over the past 10 years from 2 billion USD in 2005 to 15.7 billion USD in 2014.

A number of Middle East and African firms have invested in key Vietnamese projects in the fields of oil and gas, seaports, industry and construction materials.

Moreover, joint work in labour exports, exchanges of medical staff and collaboration in the farming and education sectors are also a spotlight in multi-faceted cooperation between the two sides.

The Vietnamese government has committed all possible support to foreign enterprises and those from the Middle East and Africa in particular, he stated.

In his speech, Secretary General of the United Nations Conference on Trade and Development Mukhisa Kituyi said Vietnam is among the few countries that have a traditional friendship and business cooperation with the Middle East and Africa.

He hoped the seminar would map out new solutions to fine-tune legal regulations that facilitate business networking and diverse bilateral collaboration.

Vietnamese businesses, particularly those operating on small and medium scales, must improve their competitiveness to expand their operations into the Middle East and Africa, said the UN official.

Participants presented their ideas featuring bilateral economic prospects at the seminar, including investment attraction opportunities and recommendations for Vietnam-Africa farming and fisheries coordination.

Consumers admire responsible brands

Vietnamese consumers are the most socially conscious in Southeast Asia, according to the 2015 Nielsen Global Corporate Sustainability Report released last week.

Consumers in Southeast Asia are the most willing globally to pay more for sustainable products and services, surpassing other regions around the world, including the Middle East/Africa, Latin America, Europe and North America, the survey found.

The 2015 Nielsen Global Corporate Sustainability Report released on October13 shows eight in 10 consumers in Southeast Asia (80 percent) prefer to buy socially responsible brands, compared to the Middle East/Africa (75 percent) and Latin America (71 percent), Europe (51 percent) and North America (44 percent).

Among Southeast Asians, Vietnamese and Filipino consumers are the most socially-conscious, with 86 percent of respondents from Vietnam and 83 percent from the Philippines stating their willingness to pay extra for products and services from companies committed to positive social and environmental impact (up 12 points and 4 points, respectively).

To gain better insight into the factors that influence consumer sentiment and purchase behavior, Nielsen polled 30,000 consumers in 60 countries across the globe. Consumers were asked how much influence factors such as the environment, packaging, price, marketing and organic or health and wellness claims had on their consumer-goods purchase decisions.

"Nowadays, you will be hard-pressed to find consumers who do not show concern for environmental and societal issues," Connie Cheng, head of Shopper Insights for Nielsen in Southeast Asia, North Asia and Pacific said. "In small and big ways, consumers are trying to be responsible citizens of the world, and they expect the same from corporations. Committing to sustainability might just pay off for consumer brands."

One of the top sustainability factors that influence purchasing for 77 percent of Vietnamese consumers is health and wellness. Moreover, products made with fresh, natural, and/or organic ingredients carry similar weight with consumers in Vietnam (77 percent).

Equally important among consumers in Vietnam is brand trust (75 percent).

When it comes to purchase intent, commitment to the environment has the power to sway product purchase for 62 percent of consumers in Vietnam, according to the survey.

Commitment to either social value or the consumer's community are also important (each influencing 61 percent and 62 percent of respondents, respectively).

In 2014, 65 percent of total sales of consumer goods measured globally were generated by brands whose marketing conveyed commitment to social and/or environmental value.

TV ads highlighting a company's commitment to positive social and/or environmental impact are influential in the path to purchase for 45 percent of respondents in Vietnam.

Vietnam-Laos oil pipeline survey conducted

The authorities of the central province of Quang Binh held a working session with the Laos Petro Join Stock Company on October 19 to discuss the outcomes of a site survey for a bonded warehouse and oil pipeline in Vietnamese territories, reported the Lao Dong (Labour) newspaper.

The survey is part of a project to construct a bonded warehouse and an oil pipeline from Quang Binh’s Hon La Island to Khammouane province in Laos.

As planned, the Hon La bonded warehouse will span 30 hectares with a total capacity of about 150,000-200,000 cubic metres.

The oil pipeline from Hon La to the Cha Lo border gate will have total length of 135 kilometres, comprising two pipes spaced five metres apart and passing through Quang Trach, Tuyen Hoa and Minh Hoa districts.

The pipe system from Hon La economic zone is 32 kilometres in length and the pipeline in Minh Hoa extends 75 kilometres.

China, Vietnam aim for US$100 billion in bilateral trade by 2017

A score of measures were discussed at the 9th meeting of the Vietnam-China Economic and Trade Cooperation Committee held in Beijing on October 20 aiming to elevate bilateral trade volume to US$100 billion by 2017 and gradually resolve trade deficit from China.

At the meeting, the two sides briefed each other on the economic situation in their respective countries, reviewed trade and economic cooperation since the previous session, and compared notes on issues pertaining to industrial and trade cooperation to further promote trade links in the time ahead.

Trade ties between Vietnam and China has grown considerably so far with two-way trade turnover reaching nearly US$59 billion last year.

China remains the largest trading partner of Vietnam and Vietnam is now the second biggest trading partner of China among ASEAN countries.

According to the General Department of Vietnam Customs, by the end of September this year, bilateral trade volume hit US$49.16 billion, up 16.1% over the same period one year earlier.

The two sides set sights on strengthening cooperation between ministries in order to solve arising problems and maintain a good comprehensive strategic partnership between the two countries.

They will continue to effectively implement the Memorandum of Understanding on cooperating in trading farm produce to promote Vietnamese agricultural and aquatic product exports to China.

They pledged to support businesses in accelerating the implementation and ensure the quality of China’s engineering, procurement and construction projects underway in Vietnam as well as its preferential credit packages to build infrastructure and transport projects in the Southeast Asian country.

At the end of the session, they signed the minutes of the 9th meeting.

Vietnam’s e-commerce lags, but ready to take off

Online retail is a recent phenomenon in Vietnam but more and more businesses are coming online the Vietnam E-commerce and Information Technology Agency (VECITA) reported in a recent survey.

An ever increasing number of companies have been increasing their online presence, with 45% of 3,500 companies surveyed reporting they have a website, up from 43% in 2013.

In addition, more companies are selling products through the use of social networks, with 24% of those surveyed saying they’re currently doing so and 8% expecting to start sometime in 2015.

As well, the percentage of those selling products through online marketplaces is growing and is now 15%, up from 12% in 2013.

Lazada.vn, the nation’s biggest electronic retailer with in excess of 270,000 products on its website boasting a market share of 21% of the market, reported a year-on-year increase of 150% in online sales in 2014.

Lazada has raised an estimated US$584 million in capital from investors – Temasek, Tesco, JP Morgan, Kinnevik, and Rocket Internet – over the past few years to increase its online presence in Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.

FPT Corporation’s ecommerce arm, sendo.vn, currently ranks the second largest online retailer with an average of 120,000 sales transactions per month. Its online presence was fuelled with the acquisition of the customer base of 123mua.vn in July of last year.

Meanwhile in 2014 Sendo entered into a strategic business partnership with three Japanese internet service providers, namely SBI Holdings, Econtext Asia, and Beenos.

“The potential of e-commerce in Vietnam is limitless,” said CEO Alexandre Dardy of Lazada.vn.

Vietnam consumers have a high rate of Internet use and we believe this bodes extremely well for the future of e-commerce Dardy said, adding that as of March 2015, an estimated 45% of the population was hooked up to the internet.

Yet according to VECITA statistics, Vietnam retail sales from e-commerce remains paltry at US$2.97 billion in 2014 and the nation still lags behind most other countries in the region and all developed nations.

CECITA figures show that the average per capita online retail sales in 2014 were a modest US$145 per person, significantly less than the average of US$691 for India.

According to Sendo Chair Nguyen Dac Viet Dung, the main reason e-commerce has not caught on more rapidly in Vietnam is that most consumers prefer to shop in person and either don’t have or don’t use plastic cards and prefer to pay in cash.

In order to change Vietnamese consumers purchasing habits gradually to online shopping, both Lazada and Sendo have been trying to make the experience as convenient as possible.

In addition, they have been offering huge discounts for online purchases as well as enticing customers with more attractive financing options for online purchases using finance companies such as Homecredit.

“Ecommerce is expected to grow even more this year,” said Sendo Chairman Dung.

"Vietnam is a late bloomer in terms of e-commerce” said Dung, but its ready to take off, and if retailers want to be successful in tomorrow’s marketplace they better get a hold of it.

Foreign currency use expanded

The State Bank of Vietnam (SBV) has issued Circular No. 16/2016/TT-NHNN, amending and supplementing certain articles in Circular No. 32/2013/TT-NHNN on the right to use foreign currencies in Vietnam.
Circular 16 adds some cases relating to national defense and security and oil and gas where the use of foreign currencies is permitted after approval is sought and gained from the SBV.
The Circular also provides direction on the necessary documentation for such requests, such as licenses and similar organizational paperwork, as well as proof of the need to use foreign currencies.
If the paperwork is found to be lacking the SBV will seek additional document within ten working days. If everything is in order, a decision will be made within 45 days.
The Circular will take effect on December 3.

OCB to increase charter capital

The Board of Management at the Orient Commercial Bank Vietnam (OCB) has agreed to increase the bank’s charter capital from VND3.54 trillion ($158.48 million) to VND4.5 trillion ($201.46 million).
It expects to issue some VND953 billion ($42.66 million) in shares, of which 5 per cent are bonus shares from 2014 profits, and a new issue of VND780.6 billion ($34.94 million) for targeted shareholders, excluding those already holding a certain amount of shares, Members of the Board of Management and the Supervisory Board, and the General Director.
The additional capital will be used to buy and improve infrastructure, for which VND180 billion ($8.05 million) is to be set aside, and to bolster working capital by VND773 billion ($34.60 million)
The timing of the issue will be decided upon by the Board of Directors after authorities grant approval.
In mid-October the Debt and Asset Trading Corporation (DATC) announced it would conduct an auction to sell its holding of 26,660 OCB shares at a starting price of VND4,900 ($0.22) per share.

BIDV and VLA come together

The Bank for Investment and Development of Vietnam (BIDV) and the Vietnam Logistics Association (VLA) have signed a Memorandum of Understanding (MoU) on comprehensive cooperation in the 2015-2020 period.
The agreement was signed by Mr. Le Trung Thanh, Deputy General Director of BIDV, and Mr. Do Xuan Quang, Chairman of the VLA.
BIDV will provide banking and finance services for VLA, while VLA will cooperate with BIDV to provide preferential policies to customers introduced by BIDV and vice-versa.
The two sides also commit to cooperating in communications and branding and to support each other in terms of exchanging information.
Mr. Thanh said that as Vietnam integrates internationally the logistics sector is facing many challenges in human resources, training, technology, management, and especially poor infrastructure due to limitations on financial resources. Bank credit therefore plays a significant role in terms of supporting business activities and increasing the competitive advantages of logistics companies.
The signing of the MoU was conducted at a logistics forum in Ho Chi Minh City with the theme “Solutions to Improving Infrastructure, Facilitate Trade, and Improve the Quality of Logistics Services for Import and Export Enterprises.”
Deputy Minister of Industry and Trade Tran Tuan Anh told the forum that export enterprises incur high costs in logistics services. Logistic enterprises and exporters have not found common ground and have failed to cooperate for mutual development. The cost of logistics is affecting Vietnam’s competitive advantage in international markets, accounting for around 20-25 per cent of GDP over recent years. Vietnam’s competitiveness will be improved if logistics costs can be cut.

Maritime agency wants to downsize HCMC ports

The Vietnam Maritime Administration has expressed the intention to downsize ports in HCMC to divert ships to the underperforming Cai Mep-Thi Vai port complex in Ba Ria-Vung Tau Province.

The administration will write to the Ministry of Transport proposing limiting cargo throughput at the city’s ports to help the Cai Mep-Thi Vai port complex cope with undercapacity.

The administration’s deputy head Bui Thien Thu mentioned this plan at the Logistics Forum 2015 in HCMC last Friday.

At the forum, many enterprises bemoaned ports in the southern region, especially Ba Ria-Vung Tau Province, are grappling with undercapacity while Cat Lai Port in HCMC’s District 2 always faces cargo backlogs, thus causing traffic congestion on the streets leading to the port.

Thu said the Cai Mep-Thi Vai port complex is operating at 15% capacity.  He said the transport ministry has taken a slew of solutions including a pilotage reduction but the number of ships using the port complex has remained woefully low.

Thu attributed the situation to weak cooperation between provinces and the competition between HCMC and Ba Ria-Vung Tau Province to lure cargo vessels to their ports.

To solve the problem, Thu said VMA will propose the ministry apply a throughput limit plan at HCMC’s ports to enable the Cai Mep-Thi Vai port complex to handle more cargo based on the experience in developing Laem Chabang Port in Thailand when the Thai government imposed a cargo volume ceiling on Bangkok Port. As a result, more shipping lines dispatched their vessels to Laem Chabang.

Thu said that a similar approach will be applied if the National Assembly approves draft amendments to the Maritime Code.

Saigon Newport Corporation (SNP) in May signed a contract to lease infrastructure facilities at Phu Huu Port to reduce cargo volume at Cat Lai Port.

To ease cargo congestion Cat Lai Port, the ministry has allowed SNP to build an inland container depot on over 11 hectares in Phu Thach Commune, Nhon Trach District of Dong Nai Province with a designed capacity of 150,000 TEUs per year.

VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR

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