BUSINESS IN BRIEF 10/3
Vietnam high-quality goods fair opens in An Giang
A Vietnam high-quality goods fair opened in the Mekong Delta province of An Giang on March 8, opening a series of similar events nationwide.
The event, concurrent with the 20th anniversary of the debut of high-quality Vietnamese goods polled by consumers, brings together 150 exhibitors showcasing goods at 350 stalls, including consumer goods, electronics, handicraft and wooden furniture.
Specialties from the Mekong Delta provinces of An Giang, Ben Tre, Can Tho and Dong Thap are also on offer.
A seminar attracting specialties makers from the above provinces, and others on technological advances and Mekong agriculture will also be held.
An exhibition featuring the province’s innovative products, as well as promising companies which are shortlisted to vie for the title “Business of Innovation and Integration”, which was launched by the Centre of Business Studies and Assistance under the auspices of the Ministry of Science and Technology, is on show at the fair.
The event will last till March 13.
Vietnam attends largest food fair in Japan
Vietnamese culinary delights are drawing attention at the 41st FOODEX, Japan’s largest international food and beverage exhibition, which opened in Chiba prefecture on March 8.
Twenty-one Vietnamese firms are displaying their products, including fruit, cashews, cakes and juices, on an area of 180 square metres.
According to Nguyen Hong Viet, head of the Trade Promotion Centre of Agriculture’s Media and Event Department, Vietnam has taken part in the annual exposition since 2012.
This year marks the country’s fifth time participating and is the largest in scale yet, both in terms of numbers and exhibition space.
Vietnamese products are receiving credit from several international businesses at the fair and expect to make inroads into the Japanese market.
Vietnamese Trade Counselor to Japan Nguyen Trung Dung said FOODEX Japan 2016 opens a great opportunity for Vietnam to boost exports to Japan.
The trade show, which lasts through to March 11, gathers 3,000 enterprises from 83 countries and territories worldwide and is estimated to welcome 75,000 visitors.-
VN, Turkey hope to double trade
Viet Nam and Turkey have set themselves a target of doubling bilateral trade to US$3 billion this year, according to the Viet Nam Chamber of Commerce and Industry (VCCI).
Speaking at a business meeting in HCM City yesterday, Nguyen The Hung, deputy director of VCCI's HCM City office, said trade between the two countries had grown rapidly in the past few years, reaching $1.5 billion last year, with Viet Nam enjoying a surplus.
Viet Nam exports mainly mobile phones and accessories, fibres and yarns, computers, electronic products and accessories, fabric, and rubber, and imports machinery and equipment, milk and milk products, medicines, plastic products, and chemicals from Turkey.
Ozcan Dogu Kaya, board member of the Istanbul Chemicals and Chemical Products Exporters Association, said: "For some products, we see a well-established collaboration. For example, in the case of manmade filaments, Turkey accounted for 23 per cent of Viet Nam's exports in 2014, and in the case of staple fibres, 15.6 per cent. This trade has gradually increased over the recent years."
Hung said, "Although there is rapid growth in trade ties, it is still far from our potential."
Kaya said there is great potential for co-operation in many sectors between businesses in the two countries.
Citing the example of pharmaceutical products, he said: "Turkey is a growing exporter and Viet Nam is a significant and growing importer from India as well as Europe. We see only small trade between our countries.
"In [the case of] taps and valves, both Turkey's global exports and Viet Nam's global imports have almost doubled between 2008 and 2014 to $600 million and $400 million respectively, but trade between Turkey and Viet Nam is stuck at about 0.1 per cent of these numbers."
As for investment, Turkey ranks 25th out of 110 countries and territories investing in Viet Nam with $730 million in 13 projects.
Hung hoped that the business-matching event would strengthen co-operation between the two nations' business communities.
The two sides have signed many significant agreements such as the Air Service Transit Agreement, the Marine Agreement, Agreement on Promotion and Protection of Bilateral Investment, Agreement on Avoiding Double Taxation and others to help push trade and investment ties further, he said.
The meeting was attended by executives from 14 Turkish companies and more than 70 of their Vietnamese counterparts, and they explored business opportunities.
The visiting executives are from sectors like machinery and equipment manufacturing, air conditioning, food and beverages, specialised vehicles, electronic products.
Speaking to Viet Nam News, Nguyen Tri Thong, director of Lap Nguyen Corporation, said he attended the event to find out about importing energy saving products for distribution.
The event was organised by the VCCI in collaboration with the Turkish Exporters Assembly and support from the Turkish embassy.
5,000t of tuna imported for locals
Vietnam imports around 5,000 tons of tuna for local consumption demand every year, according to an official of the Vietnam Tuna Association.
Vu Dinh Dap, chairman of the association, said the nation has 3,600 ships to catch ocean tuna mainly in Binh Dinh, Phu Yen and Khanh Hoa central provinces, with a total average output 17,000 tons of tuna per year.
However, recently, local tuna processors have been importing 4,000 tons to 5,000 tons of tuna every year to meet their demand on export processing due to the instability in the supply of tuna caught on the ocean, Dap said.
The Mai Tin Company, a South Korean firm, in Khanh Hoa Province, was one enterprise which only imported tuna for export processing of sushi products to Japan every year, reported zing.vn.
Now, Vietnam’s frozen tuna fillet products are exported to 100 countries and territories, including to the European Union (EU), the United States (US), Japan and China.
The Vietnam Association of Seafood Exporters and Producers (VASEP) reported last year, local tuna exporting processors still imported material for export processing due to the difficulty in supply of material.
Vietnam reached a total import value of tuna at US$214.9 million, an increase of 16.8 per cent year-on-year from 36 countries and territories, including South Korea, mainland China, Hong Kong and the EU, said the General Department of Customs.
In 2015, the tuna import value surged by 66 per cent from South Korea to $45.7 million, and by 313 per cent from the EU to $10.2 million compared with 2014.
The tuna imports from the EU were expected to increase further in the future due to the impact of the Vietnam–EU free trade agreement, according to VASEP.
Tuna exploitation output in the first months of this year was predicted to be low so tuna imports would continue, said VASEP.
Administrative reforms boost competitiveness: VCCI
The Government has taken many innovative measures to reform administrative procedures, thereby helping to improve the business environment, national competitiveness and efficiency of State management, Vietnam Chamber of Commerce and Industry (VCCI) Chairman Vu Tien Loc said.
Lộc made the statement at a seminar to review surveillance programmes on administrative reform to improve the business environment and enhance national competitiveness in the field of taxation and customs.
As head of the Steering Committee of the surveillance programme, Loc said the Government has enacted many effective measures to improve administrative reform in recent years, such as issuing Resolution 19, which tasks many important institutions with improving the business environment and reforming administrative procedures.
The Government also assigned the VN Fatherland Front (VFF) and VFF’s members, such as VCCI, to supervise the Government agencies’ operations, particularly tax and custom authorities, to ensure they are making objective assessments.
With judicious leadership and guidance from VFF President Nguyen Thien Nhan, within a short time, VFF has established a steering committee to supervise the administrative reform process among Government agencies and bodies. VFF has tasked its member organisations with working together to conduct the programme, and they received praise from ministries and sectors.
"This helps VFF engage more deeply in the task of assessing and supervising the reform of administrative procedures," Loc said.
According to an evaluation of supervisors, the surveillance programme on administrative reform in the field of tax and customs has been carried out at the right time, contributing to the reform of administrative procedures in these fields.
The programme has led to a drastic change in the administrative reform process, which was appreciated by the business community, Loc said. It also promoted the role of VFF’s members, empowered enterprises, and created a link between state agencies and enterprises.
However, in addition to positive results, the programme has still encountered some difficulties, such as financial troubles and a lack of experts specialising in the fields of tax and customs.
Pham Thu Huong, Deputy Head of the Law and Democracy Committee under VFF, said the surveillance program this year will focus on reflecting the real situation of administrative reform in the fields of taxation and customs through the evaluation of businesses, co-operatives and business associations.
The programme also listed problems and difficulties that enterprises have to face when complying with State regulations in the field of taxation and customs, then collected their recommendations and requests to accelerate the simplification of administrative procedures.
Huong said the surveillance programme will continue to focus on supervising administrative reform in 13 provinces and cities of Hanoi, Hai Phong, HCM City, Binh Duong, Ba Ria-Vung Tau, Dong Nai, Vinh Phuc, Quang Ngai, Quang Ninh, Khanh Hoa, Da Nang, Can Tho and Bac Ninh.
It will also focus on reviewing and assessing the legal provisions and administrative procedures related to taxation and customs, especially the implementation of electronic tax declaration and filing. The period of surveillance activities will last from July to October this year, Huong said.
Ho Chi Minh City sees youth potential for business growth
Dynamic youth are likely to help Ho Chi Minh City realise its goal of doubling the number of enterprises in 2020, visiting senior advisor to the US Secretary of State David Thorne said to local authorities on March 8.
Thorn said his visit is part of a US programme to assist ASEAN countries, including Vietnam, in promoting business and innovation.
He expressed his appreciation for the southern city’s support for the construction of a Fulbright University here.
He said he would try to make sure that President Barack Obama will visit the south and Ho Chi Minh City as part of his trip to Vietnam in May.
Ho Chi Minh City welcomes Obama’s upcoming visit, Secretary of the municipal Party Committee Dinh La Thang said, taking note of growing relations between the two nations – particularly after a visit to the US by Party General Secretary Nguyen Phu Trong in July last year.
Ho Chi Minh City pay heeds to cooperation with US localities and enterprises, he added.
According to Thang, the southern hub is home to more than 266,000 companies, which accounts for half of all Vietnam businesses. Aiming to double the number by 2020, local authorities have committed to promoting links in innovation and creativity while supporting start-ups, especially that of young people.
Vietnam meets with WTO, Swiss customs-finance officials
A delegation of Vietnamese finance, customs and taxation officials visited Switzerland and met with officials of the World Trade Organisation (WTO) and the Swiss Federal Customs Administration and Federal Department of Finance from March 5 – 8.
The visiting delegation, led by Deputy Minister of Finance Do Hoang Anh Tuan, included representatives of the General Department of Customs and the General Department of Taxation.
At a working session with WTO Director-General Roberto Azevêdo on March 7, the two sides discussed the implementation of the WTO Trade Facilitation Agreement (TFA) in Vietnam, which ratified the pact in November 2015.
As the head of the negotiation group on the agreement, the customs general department actively sought technical assistance to prepare for the TFA implementation and engaged in bilateral and international forums on trade facilitation.
Deputy Minister Tuan thanked WTO officials for helping Vietnam during negotiations and carry out post-negotiation works, especially sending experts to help the country gain an insight into and disseminate the deal.
Official WTO membership since 2007 has helped Vietnam gain valuable experience and make use of the organisation as a negotiation and dialogue channel to better protect Vietnamese enterprises’ interests in the global business world, he added.
At a meeting with Deputy Director of the Swiss Federal Customs Administration Robert Lussi the same day, the two sides reviewed the cooperation between the two countries’ customs agencies, noting that they signed a cooperation document in 2012.
Lussi said Vietnam is an important trade partner of Switzerland, and his country has continually paid attention to building a bilateral cooperation programme.
Meeting with State Secretary in the Swiss Federal Department of Finance Jacques de Watteville, Tuan spoke highly of the nations’ cooperation, including technical assistance to Vietnam to promote public financial management and public debt management, fine-tune institutional framework and tax policies, streamline tax procedures, and help with financial solutions for disaster risks and insurance.
The officials also shared experience in tax management and the realisation of the Vietnam – Switzerland agreement on avoidance of double taxation, which took effect in 1997.
Temporary safeguard measures on imported steel launched
The Ministry of Industry and Trade (MoIT) has recently issued Decision No 862/QD-BCT on applying temporary safeguard measures against steel ingots and long steel products imported into Vietnam .
Accordingly, the ministry will impose temporary safeguard duties of 23.3 percent on steel ingots and 14.2 percent on long steel products for a maximum of 200 days.
However, the safeguard measures will not be applied to a product originating from a developing country, if that country’s share of total imports of the product is less than 3 percent, provided that the developing countries with less than 3 percent share, collectively account for not more than 9 percent of total imports.
On December 25, 2015, the MoIT issued Decision No 14296/QD-BCT on a safeguard investigation into imports of steel ingots and long steel products, upon a complaint lodged by local producers Hoa Phat Steel Joint Stock Company (JSC), Southern Steel Co Ltd, Thai Nguyen Iron and Steel JSC and Vietnam-Italy Steel JSC.
Vietnam expects 17 billion USD from leather, shoe exports
Vietnam’s leather and footwear industry expects to reach a total export value of 17 billion USD this year, partly due to advantageous business conditions.
Nguyen DucThuan, Vietnam Leather and Footwear Association (Lefaso) Chairman, said the chances of expanding export markets are good this year due to advantages from free trade agreements (FTAs) with the European Union (EU), the Republic of Korea and especially the Trans-Pacific Partnership (TPP) agreement.
The zero tax rate under the Vietnam-EU FTA and TPP, effective in 2018, will promote Vietnam’s exports in leather, footwear, bags, umbrellas and suitcases in the future, he said.
In addition, the Court of Justice of the European Union (CJEU) recently declared partially invalid an anti-dumping regulation on certain leather footwear imports to the EU from China and Vietnam.
It said that the Council of the EU and EU Commission did not comply with certain procedural rules when the regulation was adopted.
On October 5, 2006, the Council of the EU adopted a regulation imposing an anti-dumping duty on certain leather footwear imported from China and Vietnam to the EU with a rate of 16.5 percent for footwear manufactured by companies established in China (with the exception of the company Golden Step, whose anti-dumping duty was set at 9.7 percent), and at 10 percent for footwear manufactured by companies established in Vietnam.
The change to the anti-dumping tariff for Vietnamese footwear will support local footwear firms in reducing the current difficulties of production and business, he said.
Last year, Vietnam gained a high growth rate in export value from the leather and footwear industry at 15 billion USD, an increase of 16 percent year-on-year, according to the association, including 12 billion USD from footwear.
Ha Duy Hung, Chairman of the Dong Hung Industry Joint Stock Company, said the local leather and footwear industry has in the past developed key export markets in Europe, the United States and Japan, and they are expecting higher exports to those markets in the future as the FTAs generate interest, the Dau tu online outlet reported.
Now, Vietnam is one of four largest footwear producers in volume on the world market, after China, India and Brazil, and is also the third largest footwear exporter in value on the global market, after China and Italy. Domestic footwear products have been shipped to 50 countries and territories.-
Vietnam's coworking space startup Toong raises 7-digit funding
Toong, a seven-month-old startup that runs Vietnam's first coworking space chain, has secured a round of seven-digit funding from a group of local investors, according to media reports.
Details of the deal have not been revealed, but the company was quoted as saying that their backers have long operated in the sectors of investment, retail and services.
Local news website Dau Tu said the backing is worth more than US$1 million, but some other reports suggested it can be a multi-million deal.
vietnam's coworking space startup toong raises 7-digit funding hinh 0
Linh Vu, marketing manager at Toong, told Singaporean news website e27 that the new funding will allow it to reinforce facilities and services at its two existing outlets, both in Hanoi, and open a new one in Ho Chi Minh City this year.
In December last year Toong reportedly raised US$300,000 from unnamed angel investors.
The company provides space and different services for other startups, freelancers and tourists at the starting price of VND90,000, or nearly US$4, for three hours.
FPT seeks partners for retail business
Vietnam's tech giant FPT is looking for partners with financial capacity and experience in retail and e-commerce to expand its digital store chain, news website ICTNews has reported, citing a representative.
FPT Shop, which saw the fastest revenue growth among the group's subsidiaries last year, is now in need of extra capital and advanced corporate governance, the unnamed representative said in the website.
With nearly 270 stores across the country, the chain posted a revenue of over VND7.83 trillion in 2015, up 148% from the previous year and accounting for 19.6% of FPT's earnings, according to the website.
It plans to open at least 50 new stores this year, the representative said.
Top mobile retailer The Gioi Di Dong (Mobile World) has expressed its interest in a deal with FPT Shop, ICTNews reported.
CEO Tran Kinh Doanh told the website that The Gioi Di Dong has planned to expand its business through mergers and acquisitions since last year, but has yet to find a suitable sale.
The retail giant itself plans to add 100 stores this year, bringing its existing outlets to 850, the website reported.
Gold no longer glitters in Vietnam as prices fall below global rates
Analysts have reacted to gold prices in Vietnam dipping below global rates for the first time in nearly five years, saying it indicates that the precious metal is no longer a safe haven asset in the country.
While there was previously a traditionally wide gap between Vietnamese and global gold prices, as high as VND7 million (US$313) a tael during 2013, a number of management measures by the State Bank of Vietnam had turned the tide.
Gold is mostly sold in Vietnam by tael, equivalent to 37.5 grams or 1.33 ounces.
Gold closed on March 8 in Vietnam at VND34.05 million (US$1,520) a tael, compared to the global market’s closing price of US$1,266.5 an ounce, or VND34.09 million (US$1,522) a tael.
The gap was some VND160,000 (US$7.14) a tael on March 4, when prices in Vietnam dropped to below global rates for the first times since 2011.
“Global gold prices rose so fast that the market in Vietnam failed to react accordingly,” said Nguyen Thi Cuc, deputy general director of Phu Nhuan Jewelry (PNJ), one of the major gold producers in Ho Chi Minh City.
Cuc also admitted that demand for gold among local consumers had dropped substantially.
“We sell around 200 taels of gold on a daily basis, which is nowhere near the peak of a few years ago,” she said.
Global gold prices have soared 19% so far this year, a pace as fast as that in July and August of 2011, according to gold expert Tran Thanh Hai.
“Such a sharp increase could have encouraged everyone, from consumers and businesspeople to banks, to invest in the precious metal, had it not been for the policy to tighten the gold market by the State Bank of Vietnam,” he added.
As gold is under strict and careful management of the central bank, domestic prices remained stable and there was no ‘gold fever,' according to the expert.
Since late 2012, banks in Vietnam have not been allowed to either accept gold deposits or offer loans in the precious metal. There are also a limited number of licensed gold shops across Vietnam after the central bank tightened the registration rules the same year.
The State Bank of Vietnam has also applied measures to stabilize the foreign currency market to discourage people from holding onto gold or dollars.
“There used to be a strong connection between gold, foreign currency and the dong,” Hai said.
But the VND is the only pillar that is not tightly controlled, so such a connection is broken, and thus unable to cause any ‘waves’ in the gold market, he added.
“All these factors have made Vietnam’s gold market less active, and people are now hesitant to invest in it,” he concluded.
When gold was more valuable in Vietnam than in other countries, it was common for people to sell gold smuggled from Cambodia to earn big profits.
However with raw gold in Vietnam currently fetching some VND500,000 (US$22.32) a tael less than world rates, local traders are collecting gold jewelry and turning them into raw forms to sell across the border.
“Traders can earn more than VND5 million [US$223] in profit from every kilogram of raw gold sold across the border,” an industry insider said.
Cuc from PNJ also confirmed the cross-border gold sales.
“But only some small gold shops are doing this, while big companies are staying out of the trend,” she said.
“However if gold prices in Vietnam remain below global rates, smuggling will increase.”
Vietnam can only afford half of spending planned for 2016-20
The Vietnamese government will need twice as much as it can afford when it comes to spending in the next five years, the Ministry of Planning and Investment has said, raising the eyebrows of lawmaking National Assembly members.
The government is seeking approval from the National Assembly for a tentative financial plan for the 2016-20 period, with the capital needed for investment and development totaling VND4 trillion (US$178.57 million).
“This is 2.1 times higher than what the budget can afford, VND1.84 trillion [US$82.14 million],” Minister of Planning and Investment Bui Quang Vinh admitted at a National Assembly Standing Committee meeting in Hanoi on March 7.
The standing committee was briefed on the spending plan before lawmakers officially decide on whether to approve or reject it at the next meeting later this month.
As it will be difficult to arrange enough capital as needed, the government suggested that allotment be prioritized for such projects that are completed but not commissioned due to financial hurdles, or those whose completion is expected to meet deadlines, Minister Vinh said.
“For projects slated to kick off in the 2016-20 period, the government suggests that only those that are really necessary be kick-started,” he said.
“Construction of these projects must be in line with the official development assistance and preferential loans the government has signed agreements to receive.”
The financial plan also proposes that the government be allowed to raise VND200 trillion (US$8.93 billion) in bonds for investment in traffic, irrigation, and healthcare.
In the meantime, another report by the Ministry of Finance, also delivered by Minister Dinh Tien Dung at Monday’s meeting, showed that government debt had already broken the ceiling by the end of last year.
The government now owes debts worth 50.3% of GDP, compared to the allowed 50% cap, according to the report.
A ceiling of 65% is set for national or public debt.
Public debts include the government’s total outstanding loans from domestic and international sources; government-backed debts, including guarantees on foreign loans of enterprises and credit institutions and guarantees for loans/bonds in the domestic capital market for financial institutions; and liabilities taken on by province-level administrations.
The finance ministry therefore advised that the ceiling for government debt be raised to 55% of GDP by 2020, while the cap on national debt remains unchanged.
“The government will have to guarantee large loans in the future as many megaprojects such as Long Thanh International Airport and the Ninh Thuan nuclear power plant are slated to be developed,” the minister explained.
The new airport, located in the southern province of Dong Nai, needs VND336.63 trillion (US$16.03 billion) to build, whereas the nuclear power plant, located in the south-central province of Ninh Thuan, costs some VND3.235 trillion (US$148.3 million).
But the proposal to hike the debt ceiling for the government was rejected by National Assembly chairman Nguyen Sinh Hung.
“Could you be able to lower the cap once it is hiked to 55% of GDP?” Hung challenged the finance minister.
“It will be a disaster if you allow public debt to keep rising as in recent years.”
In 2015 Vietnam’s public debt was some 61.3% of GDP, still below the 65% limit, but experts are concerned that it will soon breach the ceiling.
After commenting on the reports of the finance and investment ministries, the National Assembly Standing Committee eventually decided to delay approval for them until the next tenure of the legislative body.
“The government should prepare the spending and investment plans more carefully so that the 14th National Assembly can ratify them,” Hung said.
The finance ministry has yet to have stable and firm solutions for earning money, whereas its investment counterpart does not have a detailed list of projects that need funding, according to the chairman.
“With all these uncertainties and shortcomings, how could lawmakers give their nod?” he said.
Plastics producers expect 16% growth
Viet Nam's plastics sector will maintain its strong growth rate of 14-16 per cent in the next few years due to its young population and high consumption capacity, according to the Viet Nam Plastics Association.
Falling oil prices will benefit the plastics manufacturing by lowering production costs but also boosting demand, Ho Duc Lam, chairman of the association, said.
"The plastics manufacturing industry is one of the fastest-growing industries in Viet Nam, sustaining an average annual growth of 16-18 per cent between 2010 and 2015," he added.
"Viet Nam's production output of plastics per capita increased sharply from 3.8 kg/per year in 1990 to the current 41kg/per year," Lam said at a workshop held yesterday in HCM City.
In developed countries, the average per capita consumption is much higher. In Japan, it is 118kg/per year, in the US 155kg/per year and in the EU 146kg/per year.
Most of the production is concentrated on domestic items with packaging (37 per cent), household appliances (29 per cent), construction (18 per cent) and technical products (15 per cent).
Plastics in the technology industry such as pressure pipes and covers of TV have high added value but very few enterprises are engaged in this work, he added.
The biggest challenge for the domestic plastics industry is the import of raw materials, which accounts for 85-90 per cent of raw materials.
The sector imports an average of 3.5 million tonnes of raw materials while domestically produced supplies of raw materials and chemicals are only 900,000 tonnes.
By 2020, domestic plastics producers would need five million tonnes of raw materials for manufacturing.
The plastics industry lacks technology and know-how, with many of the polymer manufacturers using out-of-date equipment imported from China.
The plastics industry needs to invest more than US$2.5 billion in machinery every year.
Last year, plastics exports rose by 12.4 per cent compared to the previous year, with export revenue totaling $2.4 billion.
The largest importers of Viet Nam's plastics products were Japan (22 per cent) and US (14.6 per cent).
The sector has more than 2,200 enterprises, with private enterprises accounting for 99.8 per cent and the remaining 2 per cent belonging to State-owned enterprises.
Local firms urged to close ranks
Domestic businesses should be more closely associated with each other to take advantage of the Trans-Pacific Partnership agreement (TPP), Tran Quoc Khanh, deputy minister of Industry and Trade, said.
Khanh told the conference on TPP – Opportunities and Challenges for development of industrial sectors in Viet Nam held in Ha Noi on Tuesday that all economic sectors would be competing equally while participating into the trade pact. However, small scale businesses could be removed, creating conditions for the restructuring of production sectors.
"Local enterprises should be active in seeking information relating to trade pacts while improving their human resources," he said.
The deputy minister urged firms to closely follow the road map and regulations on the market open in the TPP to build their own production plans as well as improving competitiveness in joining supply chain in the region.
Sharing the ideas, Nguyen Van Sua, vice chairman of Viet Nam Steel Association said the number of small scale businesses in terms of financial resources, technology and management skill in several industries was big.
Businesses should improve their product quality while connecting with each other to compete with foreign firms in a big market with strict regulations on origin and quality.
"Management agencies should support firms in trade defence and provide them information to access the market," Sua added.
The ministry's Heavy Industry Department also urged close co-ordination between State agencies and businesses to expand operation and export and minimise adverse impacts of market opening.
State agencies need to assess the TPP's possible impacts on local goods, investment and services areas so as to fine-tune policies designed for TPP-benefiting industries.
Meanwhile, companies should also acquire an in-depth knowledge of free trade agreements to grasp opportunities, the department added.
Vo Tri Thanh, former director of the Central Institute for Economics Management (CIEM) said Vietnamese enterprises should co-operate with multinational groups to join the global production chain.
Thanh forecast that the country's advantage of cheap labour cost may not exist in the next 15 to 20 years due to the rapid development of automation.
Viet Nam would not find it easy to take advantage of the TPP if the knowledge of Vietnamese businesses about the pact is still limited, and when they lack a support mechanism, he added.
He said local firms should pass the barriers of technical standards and hygienic safety regulations.
In addition, the government should have policies for the development of the exporter. Viet Nam has seen a shortage of immediate companies which have adequate information and professionals to bring Vietnamese goods to the foreign markets.
Businesses were also urged to increase the localisation rate to enjoy preferential in TPP.
Dong Nai promises incentives to investors in large-scale fields
The southern province of Dong Nai will offer incentives to attract enterprises and co-operatives to invest in large-scale fields.
At a meeting on March 2, Vice Chairman of the provincial People’s Committee Vo Van Chanh urged local agencies to publicise incentives and facilitate investors’ access to those measures.
Dong Nai has issued a range of preferential policies to stimulate investment in large-scale fields, including land and water surface leasing-free schemes, subsidies in manpower training, market development and technological scientific application. However, investors are hesitant due to a lack of information about those measures.
According to the Dong Nai Department of Agriculture and Rural Development, four large field projects on cashew, sugar cane, cacao and coffee farming have been approved in the province. Another 28 projects have been registered for 2016.
SMEs eye opportunities from integration
After finishing construction of a factory that makes plastic materials, Hung Phat Co, Ltd of HCM City's Binh Tan district has quickly imported modern machines to expand production.
Nguyen Hung, its director, said sales have increased strongly thanks to good quality and competitiveness compared even to other countries in the region.
The formation of the ASEAN Economic Community (AEC) and Vietnam's free trade agreements have opened up export opportunities but also great competition even in the domestic market, he told Dau tu (Vietnam Investment Review).
"To capitalise on the opportunities and overcome the challenges, I researched a lot to expand production scale to gain a firm foothold in the market and compete with foreign firms."
Hoang Thanh Thuy, after working for a foreign garment company for more than 10 years, set up her own in 2012 with 20 workers.
Two years later, with the country preparing to sign the Trans-Pacific Partnership (TPP) agreement and the imminent establishment of the AEC, she decided to expand.
Now her company, Van Tuong Garment Co Ltd, has a factory in Tan Phu district with nearly 100 skilled workers.
Last year she signed a large outsourcing order for the Japanese market.
Japan is a fastidious market with stringent technical requirements, and so her company had to methodically invest in technologies and technical processes, she said.
TPP would bring opportunities for her company to boost exports to Japan, she said, adding that she plans to buy more advanced machinery and equipment to expand production.
Besides the garment and textile sector, the wood processing sector, with a large number of small- and medium-sized enterprises, will also benefit from international integration.
Thien Huong Interior Co Ltd in Long An province are busy fulfilling export orders from the US.
Nguyen Van Hoan, its director, said though he only runs a medium-sized company, he always keeps a close eye on information related to TPP and expects the wood products sector to enjoy its benefits since most Vietnamese companies import timber from and export products to member countries.
While they lack the financial strength of large companies, SMEs have developed close linkages among themselves in each stage of production, which enables them to make quality products that are able to compete in global markets, according to the HCM City Business Networking Club.
RoK firm cooperates in developing support industry
Korean leading manufacturer Woojin Plaimm will supply machines and maintenance services to Minh Nguyen support industry company under their comprehensive strategic cooperation agreement signed in Ho Chi Minh City on March 2.
The deal will give a boost to Minh Nguyen company’s Phuoc Thanh Hi-tech Research, Application and Production Complex project for 2016-2017, under which the Korean partner will also send technicians to Vietnam to offer training in operating machines.
Built at a total cost of 1.6 trillion VND (72.7 million USD), the complex is able to produce 20 million products per year once operational, mostly hi-quality technology products such as plastic and metal electronic components and moulds for the plastic industry, among others.
Woojin Plaimm currently has representative offices in 23 countries worldwide, including Vietnam, which it considered as a strategic market.
Ha Nam welcomes new Korean-funded project
The Republic of Korea-based HTC company had a working session with Ha Nam’s authorities on March 2 concerning the construction of its plant in the northern locality.
According to HTC Director General Lee Chang Bok, Ha Nam has a good investment policy for foreign investors, especially those from the Republic of Korea and Japan. It also has a favourable geographical location and productive trade ties with Hanoi and other neighbouring provinces.
Taking into account these conditions, the company decided to invest in building a plant producing high-quality household articles in the Dong Van I industrial park. The facility will cover 20,000 square metres, costing an estimated initial investment of up to 8 million USD.
Vu Dai Thang, Vice Chairman of the provincial People’s Committee, said his agency will make it easier for HTC to finish relevant administrative procedures.
He hopes the plant will soon complete and operate productively, and that more Korean businesses will choose Ha Nam as their investment destination.
Currently, 155 foreign enterprises are investing in the province, 82 of which are from the Republic of Korea.
ADB continues supporting trade activities in Vietnam
The Asian Development Bank (ADB)’s Trade Finance Programme will provide the Ho Chi Minh City Development Joint Stock Bank (HDBank) and the Saigon-Hanoi Commercial Joint Stock Bank (SHB) with guarantees of up to 100 million USD a year to support trade activities in Vietnam.
Agreements to this effect were signed between the programme and its two Vietnamese partners in Hanoi on March 2.
Accordingly, ADB and its new Vietnamese bank partners will support exporting and importing companies, including small and medium-sized enterprises, thus helping boost economic growth and create jobs, said Steven Beck, ADB’s head of trade finance.
The deals raised the number of Vietnamese banks involving in the programme to 11, said Eric Sidwig, ADB Country Director in Vietnam .
Since 2009, the programme has conducted over 4,300 transactions, supporting 6.5 billion USD in trade in Vietnam , he said.
Backed by ADB's AAA credit rating, the Trade Finance Programme provides guarantees and loans to over 200 partner banks to support trade, enabling more companies throughout Asia to engage in import and export activities.
With dedicated trade finance specialists and a response time of 24 hours, the programme has established itself as a key partner in the international trade community, providing fast, reliable, and responsive support to fill gaps in the region’s most challenging markets.
Since 2009, the programme has supported more than 6,000 small and medium-sized enterprises across the region, through about 10,000 transactions valued at over 20 billion USD, in sectors ranging from commodities and capital goods, to medical supplies and consumer goods.