BUSINESS IN BRIEF 27/3
Vietnam leads investments into Laos
Vietnam is the second biggest investor in Laos according to a report from the Ministry of Planning and Investment.
The announcement was made by Do Nhat Hoang, head of the Foreign Investment Department, under the Ministry of Planning and Investment.
Hoang said after China, Vietnam was the second biggest investor to Laos with various projects including joint-venture banks, petroleum distribution and telecommunication projects. According to Hoang, the investment projects created jobs for 40,000 local people in Laos.
Laos tops the list of the 68 countries that Vietnamese firms are investing in. By 2015, Vietnam's investment in Laos reached USD5 billion, mostly focused on energy, mining, forestry, agriculture and services projects.
Hoang went on to say that ASEAN Economic Community would better connect and open more opportunities for regional investors. He hoped that the Laos-Vietnam investment co-operation meeting, which is scheduled to take place in Danang between March 26 and 27, would see further investment.
Thai village trade fair opens in HCM City
A Thai-themed trade fair attracting more than 120 exhibitors showcasing food, clothing, fashion items, footwear and household products has opened at Park 23/9 in Ho Chi Minh City.
According to the organizers, the three-day event running March 25-27 is part of festivities celebrating the 40th anniversary of diplomatic relations between Vietnam and Thailand.
Other fun-filled activities include musical and cultural performances, hands-on culinary arts demonstrations and a massive outdoor food court featuring traditional Vietnamese and Thai dishes.
The event, attended by Thailand’s Minister of Culture and leaders of HCM City, is free and open to the public. Portions of the money raised during the event will go for charitable causes.
Vietbuild Hanoi 2016 underway
Vietbuild Hanoi 2016 is being held at the National Exhibition Construction Center in Hanoi from March 24 to 28.
Featuring 1,350 booths of almost 450 enterprises, the exhibition is organized by the Ministry of Construction and the VNREBUILD Real Estate International Exhibition Organization Corporation.
There are 216 domestic enterprises, 171 joint venture companies, and 63 international companies from China, South Korea, Japan, Malaysia, Thailand, Germany, the US, France, Singapore, Switzerland, and Australia in attendance.
Three main fields are under focus: Building - Building Materials; Real Estate - Electrical Equipment, Doors and Painting Tools; and Furniture Decoration - Bathroom Equipment and other construction accessories.
Mr. Nguyen Tran Nam, former Deputy Minister of Construction, said that the number of exhibitors could have been higher but to ensure quality the organizing board limited their number.
Workshops are being organized during the exhibition, encouraging enterprises to research and provide new products of high quality.
Vietbuild 2016 will be held three times this year: in March, July, and November.
Firms ignorant of intellectual rights
Many Vietnamese firms are indifferent to intellectual property rights regulated in the Trans Pacific Strategic Partnership (TPP) agreement, despite the fact that Việt Nam is a signatory to the deal, Deputy Minister of Industry and Trade Trần Quốc Khánh said.
Khánh said during a talk show held by the Government’s Portal yesterday in Hà Nội that businesses’ awareness regarding the issue was limited and inadequate.
Without effective measures, it would be very difficult for Vietnamese firms in particular and the country in general to participate in the TPP deal, he said. Once the deals took effect, Vietnamese businesses would have to spend more time on lawsuits.
“If we do not conduct specific measures and impose stiffer penalties on the violation of intellectual property rights, we will cause severe damage and losses for individuals and organisations that have patented inventions – not to mention we are also showing our disrespect to the inventors and discouraging them to create and invent more,” Khánh said.
Another important thing to note was that Việt Nam currently only imposed administrative punishments on intellectual property rights violations, he said. But the TPP includes criminal penalties for such crimes. Violators may receive warnings and administrative fines or be imprisoned, depending on the severity of the crimes.
Lê Ngọc Lâm, Deputy Director of the Intellectual Property Rights Department under the Ministry of Science and Technology said intellectual property rights issues in the TPP deal were different from other trade agreements.
“There are things stipulated in the TPP that we’ve never thought of, such as the protection of copyrights about scents, flavours and sounds,” Lâm said. “That is obviously a real challenge for the business community.”
He said the wave of foreign investment pouring into Việt Nam was likely to trigger disputes about intellectual property rights issues. It was no coincidence that when investing in Việt Nam, most foreign firms asked the Government to commit to protect their intellectual property rights.
Intellectual property violations hurt all Vietnamese enterprises and the entire economy. They stop Việt Nam from accessing and utilising the world’s technological advancements, Lâm said.
Lâm said enforcement in Việt Nam was still limited. This was one of the weakest aspects of the country’s legal system.
There is no Vietnamese court that specialises in handling intellectual property rights cases. Many trademark and design disputes remain unsolved.
Vũ Thị Thuận, chairman of the board of directors of Traphaco Pharmaceutical JSC, said the TPP deal would also provide Việt Nam with more opportunities to make the business environment transparent and predictable.
In particular, strengthening protection for intellectual property rights will create opportunities to attract more investment in knowledge-based sectors such as pharmaceutical production like vaccines, Thuận said.
Thuận said the domestic businesses must adapt themselves to the TPP’s intellectual property right regulations, adding that the firms must also make changes in accordance with new legal regulations.
Khánh said Vietnamese firms should improve their understanding of international laws to enhance the recognition, application, development and protection of intellectual property rights; promote research and innovation; and apply science and technology for greater quality and productivity.
He added that the Government and law enforcement agencies needed to improve knowledge and experience to be able to handle cases related to intellectual property rights and build a stronger legal framework in line with the regulations of the TPP.
Infrastructure project to help farming region deal with drought, salt water
Experts have called for the urgent implementation of a project that would improve infrastructure in the Long Xuyên quadrangle, a major agricultural hub in southwest Việt Nam.
The VNĐ3.6-trillion (US$160.5 million) project to upgrade infrastructure would help deal with drought and seawater intrusion as well as support long-term development of the quadrangle, Nguyễn Phong Quang, permanent deputy head of the Steering Committee for the Southwestern Region, said.
The Long Xuyên Quadrangle, which consists of the Cửu Long (Mekong) Delta provinces of Kiên Giang and An Giang provinces and a small part of Cần Thơ City, has a total farmland of 350,000 hectares, accounting for one-fourth of the Mekong Delta’s total area.
Speaking at a meeting in Cần Thơ City on Monday, Quang said the project would develop the transport system and agricultural production.
The devastating drought and seawater intrusion in the Mekong Delta requires even faster preparations for the project, delegates at the meeting said.
Under the proposed project, a comprehensive infrastructure system prepared by the Southern Institute for Water Resources Research would help sustainable development of agriculture, along with natural disaster prevention and response efforts, in the Long Xuyên quadrangle.
Tô Văn Thanh, deputy director of the Southern Institute for Water Resources Research, said the institute had adapted the project to the current drought and saltwater intrusion in the region.
The project will survey local irrigation and transport facilities, recommend construction solutions, and estimate building expenses.
Experts said existing infrastructure ensured food security in the past but can no longer satisfy demand.
Irrigation works have greatly benefited the region in controlling floods and saltwater intrusion for years. However, they are poorly maintained and not suitable for current weather conditions.
Agricultural restructuring, which will include shifting from rice to fruit and other crops as well as aquaculture, needs improved infrastructure, according to Trần Anh Thư, director of An Giang Province’s Department of Agriculture and Rural Development.
For instance, a drainage canal is needed from Trà Sư Canal in An Giang Province to Tha La Canal in Kiên Giang Province.
She said that farmers should produce only two rice crops a year and earn more income from aquaculture and other farming models.
Agricultural restructuring should be jointly carried out by all provinces in the delta, she added.
Trần Quang Củi, deputy director of Kiên Giang Province’s Department of Agriculture and Rural Development, said the restructuring programme must deal with the pressing issues of water drainage, water supply and prevention of saltwater intrusion in An Giang, Kiên Giang and Cần Thơ.
Nguyễn Phong Quang, permanent deputy head of the Steering Committee for the Southwestern Region, said the infrastructure project would need a huge amount of capital, and as a result, more meetings would be held to thrash out and fine-tune the project before it is submitted to the Prime Minister for approval.
Last month, the committee held a meeting with leaders of Cần Thơ City and An Giang and Kiên Giang provinces with the aim of speeding up the project’s implementation.
Authorities to make Quảng Bình Province a tourism hub by 2020
The central province of Quảng Bình will be elevated into a tourism centre for Southeast Asia by 2020, announced the local authority at a recent conference of managers from tourism enterprises based within the province.
According to Nguyễn Hữu Hoài, chairman of the local People’s Committee, Quảng Bình now has the potential to achieve that status as it has become a favourite tourist destination for both domestic and international visitors over the past five years, earning its own global tourism trade mark.
Many domestic and international media agencies and film producers have visited the province to seek potential cooperation and investment opportunities. Recently, ABC Studios from the US, NHK Channel from Japan and the Hollywood producers of the upcoming blockbuster Kong: Skull Island have all visited the province.
Quảng Bình is home to the world natural heritage site Phong Nha Kẻ Bàng with its unique system of caves and diversified ecosystem, and also boasts one of the longest and most beautiful beaches in Việt Nam, in addition to numerous cultural, historical and spiritual tourist destinations.
Hoài said that with such strengths, the province only needed determination, sensible methods and the unanimous focus among its relevant departments and the local people in order to achieve its tourism aspiration.
According to Hoài, the first and foremost strategy to earn tourists’ enduring trust was by enhancing service quality, ensuring food safety and maintaining public security.
Many tourist enterprises contributed valuable ideas towards boosting the local tourism industry. Common suggestions included improving electricity, traffic and broadcasting infrastructure. Others suggested regular promotions and new forms of tourist activity to encourage visitors in winter.
Chairman Hoài welcomed the input from tourist enterprises, and confirmed that he would address all of their questions to best serve the target of boosting local tourism. He added that all relevant departments will be required to strictly handle any problems that tourists report, such as overcharging or soliciting.
To improve infrastructure, the province will continue to issue policies that encourage and stimulate tourism enterprises to invest and develop in the province. Meanwhile, local electrical networks, traffic systems and broadcast stations will receive timely investment to be upgraded by this May.
Quảng Bình is also planning to expand its airport to connect with more air routes to serve domestic travel. Besides the currently available routes between Quảng Bình and the major cities of Hà Nội and HCM City, the province will also open a route with Taipei.
The local tourist industry has developed greatly over the past five years. In 2015, the province welcomed nearly three million visitors, 65,000 of whom were international. The turnover in the tourist industry that year was over VNĐ3.3 trillion (US$150 million).
The province has recently received much investment from both domestic and international investors like FLC Group, Vingroup and the Trường Thịnh Group to construct new golf courses, luxury resorts and sports centres.
HCM City’s CPI rises in March
Ho Chi Minh City’s consumer price index (CPI) in March rose 0.09 percent compared with February and 0.64 percent against the same period last year, said the municipal Statistical Office.
According to the office, among 11 reviewed categories, only indexes of 5 groups increased in comparison with the month before.
Medicine and health services topped the list with an increase of 8.69 percent, as health service prices rose from March 1, 2016.
Other categories which saw upward trends in the month were education at 2.92 percent; home appliances by 0.34 percent; housing, electricity, tap water, fuel and building materials rose 0.22 percent; and culture, entertainment and tourism were up 0.06 percent.
In contrast, prices across six areas went down in the reviewed month compared with February, including transportation; other goods and services; beverages and cigarettes; post and telecommunications; restaurant and catering services; apparel, headwear and footwear.
The US dollar price in March hiked by 3.44 percent against the same period last year, but had actually fallen 1.35 percent since the beginning of this year; while gold prices had dropped 4.36 percent year-on-year, but were up 1.44 percent against January, 2016.
Vietnam credit growth rises
Credit growth by February 20 rose 0.39 percent while capital mobilisation increased 0.34 percent against December last year, a government report released early this week said.
Compared with the same period last year, credit increased 0.96 percent and capital mobilisation inched up 0.05 percent.
The report said the lending interest rate was stable during the months, but the deposit interest rate was on an upward trend, especially for medium- and long-term deposits, as commercial banks tried to attract idle money from local people after Tet (Lunar New Year) to restructure their capital sources, in order to meet rising medium- and long-term capital demands during the remaining months of the year.
After staying out of an interest hike race of small- and medium-sized banks early this year, all major banks such as Vietinbank, Vietcombank and BIDV have now joined it.
Vietcombank recently increased the interest rate for deposits with terms of more than 12 months from six percent to 6.5 percent per year. A 0.2 percent hike has also been applied on short-term deposits, pushing up the rate to 4.8 percent for two-month deposits, five percent for three-month deposits and 5.4 percent for six-month deposits.
Vietinbank also quoted a 6.8 percent interest rate for 12-month to 24-month terms, up from six percent earlier. The bank has also increased the interest for short-term deposits by 0.3 percent.
The same trend is seen at BIDV, which has increased the interest rate by roughly 0.3 percent for short-term deposits and 0.2 percent for nine-month to 12-month deposits.
After this move, the interest rate gap for long-term deposits between small and large banks has been reduced to 0.8 to one percent from 1.5 to 1.8 percent. Small banks often have to list higher interest rates than large banks to lure depositors.
Banks said the interest rate hike was not because of poor liquidity, but to have enough capital to fund medium- and long-term projects.
Director of Orient Commercial Bank (OCB) Nguyen Dinh Tung said if liquidity was poor, banks must attract short-term deposits to deal with the shortfall. Tung said interest rates would be on an upward trend, adding that the rise would help banks readily meet the expected rising capital demand in the next few months as credit was expected to rise by 18 to 20 percent this year.
Real estate urged to seek out stable capital
Experts have said it is necessary for the real estate sector to find stable financial sources to ensure adequate housing supply as demand was anticipated to pick up rapidly.
Even though the Vietnamese economy was entering a new growth circle and the property market was on the recovery path this year, limited funding has turned into a barrier, experts agreed at a conference jointly held by the Vietnam Real Estate Association and Lao Dong (Labour) Newspaper on March 23 in Hanoi.
Le Xuan Nghia, Director of the Business Development Institute, said that initial research, which took the impact of the Trans-Pacific Partnership (TPP) into account, found that the property market might narrow down the excess and supply over demand and reach a balanced status in 2018.
From 2019, there would be a shortage of housing in big cities as around three million people would move from rural areas to cities, plus dozens of thousands of foreigners would enter the country as an impact of TPP, Nghia said. “The property market might be overheated from as early as 2021.”
“Tightening credits of the real estate sector is not a good idea at this moment,” Nghia said, and added that the current situation was different from what prevailed in 2006, when a bubble was formed, which burst two years later. “Instead, the credit flow into the property sector should be put into better management.”
The monetary policy should be loosened reasonably to keep interest rates stable to support the recovery of the property market which was closely attached to the financial market with 70 percent of banking credits being real estate assets, according to Nghia.
Finding stable capital sources for property development has become a matter of concern now that demand might surpass supply in the next few years if no improvements were made to improve supply, the association’s president Nguyen Tran Nam said.
In developed countries, sources of capital for the property market were abundant. They came from banks, investment funds, real estate investment trusts, and pension funds, apart from foreign direct investment (FDI) and indirect investment (FFI). In comparison, in Vietnam, the property sector largely relied on banks and buyers for funding.
Property expert Dang Hung Vo said at the conference that the property market had not created a stable capital inflow while equity capital of property firms was limited. The capital from banking credits had high interest rates and were vulnerable to ups and downs of the financial market due to the shortage of long-term capitals, he said.
The property market was on a recovery path, and it offered great opportunities for the securitisation of investments in the sector while Vietnam had the legal framework for such securitisation, he said.
Vo urged local investors to launch property investment funds to operate in the security market, which would help generate capital for the property sector.
In addition, Vo proposed that Vietnamese property assets be allowed as mortgages at foreign banks to pave the way for accessing medium and long-term capitals from banks with huge financial capacity. The current legal system did not allow this.
“When access to land is easy, access to capital is easy and borrowing costs are low, can property prices be lowered?” Vo asked.
Nguyen Trong Du from the State Bank of Vietnam said that the central bank’s policies would avoid sudden adjustments to ensure that policies supported the market as it was important to the economy.
The central bank wanted commercial banks to be healthier but did not mean to ask banks to cut leadings for the property sector, Du said.
According to Nguyen Quoc Hiep, Chairman of GP Invest, the crossholdings between commercial banks and property developers should be limited, while the central bank must closely monitor credit inflows to property projects.
Speaking at the conference, Vu Van Phan, Deputy Director of the Construction Ministry’s Department of Housing and Real Estate Market Management, said that the close management of credit flow into the property sector was necessary to ensure capital efficiency and the firm recovery of the market while preventing shocks which might badly affect the economy.
Compal Electronics to produce smart devices in Vinh Phuc
Authorities in northern Vinh Phuc province had a working session with a representative from Taiwanese-based Compal Electronics on March 23, regarding the construction of a Compal plant manufacturing smart phones and tablets.
Chairman of the provincial People’s Committee Nguyen Van Tri said the project is in line with the local outlook of high-tech industry development.
Vinh Phuc will provide favourable conditions for building the factory, while Compal ought to study Vietnam’s policies on foreign investment further for effective outcomes to its project, Tri noted.
Compal Senior Vice President Bruce Riggs said his company is committed to implementing the project on schedule and investing in the most advanced technologies compared to all previous projects it carried out in Vietnam.
Compal is seeking support from local authorities in the arenas of human resources, land leasing prices and corporate tax, Riggs added.
According to him, modern manufacturing machinery will be assembled at the plant in April and the first batch of smart devices will be shipped around September.
In October 2007, Vinh Phuc licenced Compal Vietnam Co. Ltd to build a plant producing laptops and computer components, with registered capital valued at 500 million USD, the highest recorded in the province thus far. The project was expected to turn out 24 million laptops per year by 2012, create 35,000 jobs, and attract 50 related projects that might bring an additional investment of 1 billion USD to Vinh Phuc.
However, economic recession and computer-market downsizing put an end to the construction of the promising plant.
In early 2015, seeing upbeat signals from the market of smart devices, Compal returned to Vinh Phuc and secured a licence for its new project.
HCM City’s import-export turnover enjoys climb
Ho Chi Minh City’s import-export turnover in the first three months of 2016 enjoyed a slight climb compared with the same period last year.
Export turnover growth in the first quarter of the year was estimated at 6.7 billion USD, a year-on-year increase of 0.1 percent; while import turnover hiked 8.2 percent against the same period last year, reaching 7.9 billion USD, with major imported goods being equipment and materials for production – such as pharmaceuticals, electronic components and parts.
According to the municipal People’s Committee, the primary markets for Vietnamese exports all saw rises including Indonesia (308.9 percent), the Philippines (36.1 percent), the Netherlands (26.6 percent), and China (26.5 percent).
Meanwhile the city’s traditional export markets such as the US, Japan and the Republic of Korea experienced slow growth.
In order to help expand markets and increase trade in goods, the city has regularly received and provided information to domestic and foreign buyers and investors, while continuing to tackle difficulties in the business and production processes.
Can Tho: Exports surge in first quarter
The Mekong Delta city of Can Tho posted total export value of 234 million USD in the first three months of this year, a year-on-year increase of 17.5 percent, and accounting for 16 percent of the yearly plan.
The city’s main exports have remained rice, aquatic products and garments. Of which, rice accounted for 24.5 percent of the total export turnover.
Aquatic product exports to the US market in the period hit 30 million USD, recording an especially strong increase compared to last year’s figure of 8.9 million USD.
Can Tho has set a target of earning some 1.5 billion USD from exports this year, according to the municipal Department of Industry and Trade.
Last year, Can Tho's exports experienced a modest yearly decrease of 7.6 per cent, with an overall value of 1.2 billion USD.
According to the department, the city has shipped goods to 100 countries and territories worldwide. Among its key export items were agricultural products, textiles, garments and footwear, along with fine arts and handicrafts.
Hanoi courts US investment
The capital city will create the best possible conditions for the US investors to launch their projects in the locality, Nguyen Duc Chung, Chairman of the municipal People's Committee, said.
During a meeting on March 23 with more than 50 American businesses, Chung said, the city always regarded the United States as one of the most reliable trade and investment partners. However, the bilateral relationship has failed to match each other's potential.
Chung called on US companies to make further investments in a wide range of sectors including banking and finance, software development, electronics, and IT, in addition to support industries and environment protection.
Deputy Minister of Foreign Affairs Le Hoai Trung said it was the right time for two business communities to expand their cooperation. Trung added that enterprises from the two nations could supplement each other, especially Vietnamese firms who desired to receive funding and update hi-end technologies from their US counterparts that could help them gradually penetrate the global value chain.
He emphasised the importance of organising such events to facilitate bilateral cooperation between the businesses of the two nations.
Vietnam was expected by the US firms to perfect the infrastructure and improve the quality of human resources, the US Ambassador to Vietnam, Ted Osius, said at the event.
US investments in Vietnam were expected to rapidly increase due to Vietnam's potential for consumption and new business opportunities, according to the Ministry of Planning and Investment's Foreign Investment Agency (FIA).
The FIA said that many US corporations saw Vietnam as a strategic market with long-term benefits, pointing out that low labour costs was a key factor in attracting investments.
Only in 11 months last year, US businesses pumped more than 226 million USD in investments into Vietnam, ranking 14th among 57 foreign investors in the country, bizlive quoted the Ministry of Planning and Investment's statistics as saying.
Hanoi’s CPI increases slightly in March
The consumer price index (CPI) of Hanoi in March increased slightly compared to February but no specific figure has been given, according to a report from the municipal Statistics Office.
According to the office, the increase was attributed to the rise in medicine and health service sectors, as health service prices rose from March 1, 2016.
Culture, entertainment, and tourism costs also climbed due to high demand during the spring festival season and the International Women’s Day on March 8.
Other areas that saw light price rises were home appliances, apparel, headwear, footwear and education.
In contrast, the prices of oil and petrol continued to go down, contributing to the sharp decrease in the transport sector. Some groups of commodities that also saw prices drop were housing, electricity, tap water, fuel and building materials.
In the same month, gold prices on the local market rebounded by 7.73 percent compared with the previous month. The 99.99 pure gold was traded at 3.33 million VND (150 USD) per tael (37.5g) at private shops, while the US dollar at commercial banks remained stable, with a slight fall of 0.1 percent.
The municipal People’s Committee is implementing several economic solution packages and administrative reform in order to tackle difficulties for local enterprises.
Can Tho grants investment licences worth over 180 mln USD
Can Tho granted investment licences to four enterprises with a total registered investment capital of over four trillion VND (180 million USD) in the Mekong Delta city on March 23.
The enterprises were the Republic of Korea’s Tae Kwang Vina Industrial, Truong Hai Auto Cooperation (THACO), Hai Ha Land Transport Limited Company, and Phuc Tan Ready-Mix Concrete Construction Limited Company.
The four firms are operating in areas as diverse as sport shoes, repair and maintenance shops and vehicle showrooms, ready-mix concrete and concrete masonry units (CMU) manufacturing.
Chairman of the municipal People’s Committee Vo Thanh Thong said the licenced projects will contribute to the city’s socio-economic development and they are also the catalyst for more investment to the locality.
He added the city will create best possible conditions for investors to implement the projects as scheduled.
Deputy Director of Tae Kwang Vina, Huyng Jin Lee hoped the company will continue to receive support from the local authority to effectively carry out the project.
He added that once the 171 million USD sport shoes accessories manufacturing project is put into operation, it could create jobs for 30,000 local labourers.
Tra Vinh pitches for Singaporean investment
Leaders of southern Tra Vinh province have called for Singaporean investment in 25 key projects and in establishing a high-quality industrial, urban and service zone similar to the Vietnam – Singapore industrial parks (VSIP) already operating in Vietnam.
During an investment promotion seminar held in Singapore on March 23, Chairman of the provincial People’s Committee Dong Van Lam said the projects involve building technical infrastructure in industrial zones, bonded warehouses, chemical refinery facilities, deep-water ports and Long Toan airport.
He expressed hope for partnering with Singapore’s Sembcorp to build the first VSIP in Tra Vinh in the future.
A number of Singaporean enterprises showed their interest in the fields of infrastructure, seaports, transport, logistics, health care, education and training.
They raised questions about Vietnam’s investment incentives, taxation and infrastructure service as well as available workforce.
Several entrepreneurs inquired about investment services such as offices, hospitals and accommodation for foreigners working in Vietnam.
Lam affirmed that the province will continue working closely with the embassy, the Singapore Manufacturing Federation and the Singapore Investment and Trade Facilitation Authority to meet business demand.
Tra Vinh also plans to launch a website designed for wooing Singaporean capital inflows following the visit, he said.
Last year, representatives from six Vietnamese provinces travelled to Singapore to pitch for investment, said Vietnamese Ambassador to Singapore Nguyen Tien Minh.
Japanese food processors call for simplified import procedures
Food quarantine certificates, fees and online filing for animal-derived food imports were discussed during a business meeting in Ho Chi Minh City on March 23.
Nakagawa Motohisa representing Japanese firms said Vietnam’s requirements are posing some difficulties to Japanese exporters of processed food, given that Japan is well-known for its green agriculture.
Le Son Ha from the Ministry of Agriculture and Rural Development’s Plant Protection Department argued that quarantine for imported glutens will continue since some have been found to contain harmful micro-organisms.
If Japanese exporters want to waive this step, they could provide detailed information on processing technology for Vietnamese authorities, he suggested.
Nguyen Hung Long, deputy head of the Health Ministry’s Vietnam Food Administration, said online filing for imports has been made available since late 2014, which has received warm response from enterprises.
Filing procedures will take less time in the future, he informed, adding that requirement for product samples are likely to be waived through the process.
Regarding animal-derived food imports, Japanese exporters wished for simplified procedures so that food preservation costs can be lowered, as the goods will reach the hands of Vietnamese importers sooner.
The event was hosted by the Japan External Trade Organisation.
Dong Nai: FDI attraction triples in first quarter
The southern province of Dong Nai attracted 448 million USD of foreign direct investment (FDI) in the first three months of this year, an increase of 311 percent against the same period last year and accounting for 48.8 percent of the yearly plan.
Of the figure, over 190.5 million USD was registered to 21 new projects and the remaining 297.4 million USD went into 21 existing projects, according to the provincial Department of Industry and Trade.
Notable projects in the quarter included a carton manufacturing plant worth 24 million USD under Japan ’s Ssang Jung Vina and a machinery factory with registered capital of 26 million USD from Japan ’s Samshin Vina company.
Meanwhile, the British Virgin Islands’ Shing Mark Vina and the Republic of Korea ’s Dong-il Vietnam added 100 million USD and 51 million USD to their projects, respectively.
Dong Nai is now home to 1,577 FDI projects worth over 28.3 billion USD with 1,208 projects remaining active with 23.79 billion USD and 369 others revoked with 4.52 billion USD.
The projects are from 43 countries and territories, lead by Chinese taiwan , followed by the Republic of Korea and Japan.-
Sale of microbe-free tra fish permitted in Panama
Panama has allowed the sale and distribution of Vietnamese tra fish free of disease-causing microbes after it detected harmful microbes in several batches of tra fish from Vietnam.
Panama gave permission after receiving a document from the Vietnamese Ministry of Agriculture and Rural Development, the Lao dong (Labour) daily quoted the ministry’s National Agro-Forestry-Fisheries Quality Assurance Department as saying.
Vietnamese tra fish exported to Panama will be examined and allowed to be distributed if it satisfies safety requirements.
The Central American country is expected to send staff to inspect tra fish farms and processing facilities in Vietnam in the near future.
Samples of tra fish shipped to Panama will not be taken for testing any more if the facilities are qualified, the department said.
HCM City announces 2016 price stabilisation programme
Ho Chi Minh City’s Department of Industry and Trade on March 22 announced this year’s stabilisation programme.
This year’s programme, lasting until the 2017 Lunar New Year holidays, will focus on four groups of goods, including essential foods and foodstuff, schooling materials, medicines and dairy products, according to Pham Thanh Kien, Director of the Department.
He said 86 companies had registered to take part in the programme, adding that the total amount of goods under the programme will increase about 15-35 percent against last year.
Ten commercial banks will join the plan with a registered capital of 12.9 trillion VND (560 million USD), Kien said.
The lenders will earmark the capital for short-term loans at 5-8 percent per year and for middle and long-term loans at 8.5-9 percent, he noted.
FPT seeks partial sales retail and distribution units
Vietnamese technology firm FPT plans to sell parts of its profitable retail and distribution units this year to focus on its core businesses, the company said on March 23.
As of February, FPT owned 85% of FPT Retail and 100% of FPT Trading, its distribution unit, FPT said in an email responding to Reuters questions on March 23. The sections accounted for a quarter of FPT's profit last year.
Technology retail businesses like FPT and rival Mobile World Investment Corp, whose net income soared 60% last year, have been benefiting from Vietnam's tech-savvy 90-million population.
The number of mobile phone subscribers in Vietnam grew 26% to 124 million during 2009-2013, latest data from the government showed.
FPT was Apple's sole distributor in Vietnam until late last year and its retail flagship store chain, FPT Shop, reported a 335% jump in annual net profit in 2015 with 252 stores after four years in operation, the company said.
FPT declined to disclose the amount of shares it plans to offload or the value of the units. FPT Trading, which also operates in Cambodia, Myanmar and Nigeria, has VND680 billion (US$30.4 million) in registered capital while FPT Retail has 200 billion dong.
FPT wants to focus on its core businesses, information technology and telecommunication, which accounted for 70% of profit last year, and to find investors with financial expertise and international business and management experiences to boost performance in retail and distribution.
The firm said it has signed an advisory contract with Japan's Nomura Securities and local Viet Capital Securities to carry out the deal.
Will Vietnam’s wood industry benefit from FTAs?
It is no secret that market analysts believe many industries in Vietnam will benefit from the signing of trade deals such as the free trade agreement (FTA) between the EU and Vietnam and the ASEAN Economic Community (AEC).
The wood industry in Vietnam is no exception, according to Nguyen Quoc Khanh, chairman of Handicrafts and Wood Industry Association (HAWA) based out of Ho Chi Minh City.
“FTAs are also seen as a huge opportunity for companies to relocate some of their manufacturing facilities from relatively higher cost areas such as China to places such as Vietnam where labour costs, in particular, are cheaper,” said Mr Khanh.
“But let’s keep things in the proper perspective.”
Vietnam will most likely see strong gains as a sourcing destination for wood products as a result of FTAs, but large multinational companies are not going to put all of their eggs in one basket and source product only from Vietnam.
If a multinational company desires to sell product in India, they will source some of their product from India regardless of the cost in Vietnam. The same is true for other countries such as China, Indonesia, Cambodia and Singapore.
We have to be pragmatic about the expectations of Vietnamese business community and citizens resulting from FTAs and acknowledge that at some point the country will maximize its labour pool and the law of diminishing returns will set in.
One must also factor in ‘wage creep’ or the simple fact that future wages will surely rise in Vietnam and negate any current labour cost savings— and a host of other issues such as future logistics problems.
In other words, Vietnam has a limited amount of quality labour that is adequately trained (or trainable) that can produce product efficiently, he said, and there are many leading economic analysts that see Vietnam maximizing its labour forces as early as 2017.
Environmental concerns and increased costs of dealing with air and water pollution resulting from increased production must be examined carefully along with the cost of infrastructure for erecting sustainable power supplies.
Operating a manufacturing business in Vietnam is no panacea – by any stretch of the imagination – and we would only be trying to fool ourselves and others if we fantasize and make believe it were.
Most importantly, we as a nation, must stop making these wild claims that multinational companies prefer Vietnam over other locations such as China and recognize that most multinational companies around the globe want to be major players in the Chinese market.
Accordingly, they are going to source product in China because that is the nature of business. If a multinational company wants to be a seller in the Chinese market they must and will source product from the Chinese market irrespective of the cost.
If Vietnam companies in the wood industry want to be a major player in another significant market such as the EU, US or Russian market then they too, must learn the lessons and source some of their product from these markets.
It’s all a bit circular, if a company pays more for a product they source, then they charge more for the product they sell. It all comes out in the wash because it’s all relative to a specific market.
The long and the short of it all is— expect the large multinational companies to make intelligent sourcing decisions and expect Vietnam, China, India and the rest of ASEAN to see economic benefits over the next few years from FTAs.
Recognize that Vietnam has a fair shot at benefiting from FTAs, but that will only happen if and when they adequately prepare themselves to take advantage of the opportunities the deals present.
Companies operating in the wood processing industry within Vietnam’s borders, said Mr Khanh, are expected to export US$7.6 billion worth of product this year, up 10.2% compared to last year.
Japan boosting exports to Vietnam via convenience stores: report
Four companies that run the biggest chains of convenience stores in Japan are considering plans to either expand or start their business in Vietnam, local media have reported, citing a Japanese business group.
The representatives of 7-Eleven, FamilyMart, Lawson and Ministop revealed their plans, as they were accompanying Japanese Minister of Economy, Trade and Industry Motoo Hayashi to visit Ho Chi Minh City on March 20, according to news website Saigon Times Online.
FamilyMart and Ministop, which are operating a total of 130 stores around the country, will open another 70 by the end of this year, it said.
7-Eleven is expected to launch its first store in Vietnam next year, while Lawson is studying the local market, the website reported.
Yasuzumi Hirotaka, chief of the Japan External Trade Organization's office in Ho Chi Minh City, was quoted as saying that convenience stores are a "very important" channel for medium and small Japanese businesses to sell their products in Vietnam.
Given that Japanese convenience stores operate like all-in-one shops, the businesses will bring not only consumer goods but potentially also financial and related services, he said.
When Trans-Pacific Partnership (TPP), a trade bloc that Vietnam, Japan and another 10 countries, including Australia and the US, takes effect, bringing low or zero duties and simple import procedures, Japanese products and services will stand a better chance to enter Vietnam, one of the biggest and most potential retail markets in Southeast Asia, he said.
Vietnam's retail sales hit VND2,469 trillion (US$108.8 billion) last year, up 10.6%, according to official figures.
Edelman hires Thien Thanh Nguyen as Vietnam CEO
Edelman, a leading global communications marketing firm, today announced that it has hired Thien Thanh Nguyen as CEO of AVC Edelman in Vietnam, effective immediately.
Nguyen, former general manager of Publicis Vietnam, will lead Edelman’s Ho Chi Minh City office of 46 employees. She reports to Iain Twine, CEO of Edelman Southeast Asia and Australasia. Ngoc Anh Bui, former managing director of AVC Edelman, remains with Edelman in a new advisory role.
“Since the acquisition of AVC Communications in 2012, AVC Edelman has grown immensely together with its clients under the leadership of Ngoc Anh,” said Twine. “We are delighted to welcome Nguyen, whose creative advertising experience and strategic planning leadership will maintain AVC Edelman’s top position in the Vietnam PR industry, while extending its capabilities across the entire communications marketing spectrum.”
Nguyen spent the past 14 years with Publicis Vietnam, where she served eight years as general manager. Prior to this, she worked at JWT as Planning & Account director for nearly five years. Nguyen has worked with both multinational clients such as Ford, Unilever, L’Oréal, Nestle, Heineken and Sanofi Aventis, as well as local brands Kinh Do, Diana, THP, Vinasoy and Dong A Bank.
“Media consumption in Vietnam is experiencing a transition, moving away from traditional patterns,” said Nguyen. “I believe Edelman is equipped to take on a leading role in shaping public and consumer engagement. Through smart, integrated strategy and execution, Edelman's range of services are geared towards taking brands and companies to another level – areas I can build on and grow with my past experience. Edelman's dedication, ethic, expertise and passion is what made this role a logical step for me, and the serious mindset to nurture, coach, train and grow talent that has deep local roots and insights are what really excite me as someone from this market.”