BUSINESS IN BRIEF 31/3
Apparel, footwear firms urged to tie up to boost competitiveness
Experts have called for domestic enterprises in the apparel and footwear sectors to strengthen tie-ups for co-existence and growth at a time when Vietnam is intensifying international integration.
At a seminar in HCMC last week on how the apparel and footwear sectors could make the most of opportunities from the Trans-Pacific Partnership (TPP) trade pact, experts said cooperation would enable businesses to join the global value chain.
Competing with one another would benefit no one, they told the seminar organized by the Vietnam Association of Foreign-Invested Enterprises and Dau Tu newspaper.
Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association (VITAS), expressed concern that many businesses have not made good preparations to benefit from the free trade agreements (FTAs) which Vietnam has signed.
“Now a lot of enterprises have little or no knowledge of FTAs including the TPP,” Giang said, adding companies in the sectors have failed to join forces to improve their competitiveness.
Giang complained about lax cooperation among domestic businesses, saying they would only seek help from the association when they had trouble with their contracts with foreign partners.
“Enterprises seem to take for granted what they have now. Foreign direct investment (FDI) enterprises cooperate closely,” Giang said.
Experts warned enterprises in the sectors are competing not only in selling goods but also attracting skilled workers.
Nguyen Cong Ai, deputy general director of KPMG Vietnam, said companies having production facilities in the same area find ways to lure workers or customers of others. They are competing with one another.
Local enterprises have no choice but to join hands to survive and grow in the face of mounting competition.
Diep Thanh Kiet, vice chairman of the Vietnam Leather, Footwear and Handbag Association (LEFASO), suggested material suppliers can team up to better serve producers in the sectors.
Giang of VITAS said cheap labor is no longer Vietnam’s advantage.
Kiet shared Giang’s view, saying Vietnam’s labor cost has gone up. This is one of the reasons why a number of footwear enterprises have invested in automatic production lines to reduce workers to improve productivity and competitiveness.
Experts urged Vietnam to quickly develop supporting industries for the apparel and footwear sectors instead of relying on low labor cost.
Over the past years, many domestic and foreign direct investment (FDI) enterprises have spent big on yarn, dyeing and weaving projects in provinces to replace material imports, according to Giang.
Kiet said to achieve sustainable growth, it is important to develop a value chain on the domestic market.
HCM City’s Q1 budget revenues up slightly
The HCMC Department of Finance has estimated the city’s budget revenues at VND72 trillion (US$3.2 billion) in the first three months of this year, a year-on-year increase of 0.92%.
The mild rise in budget collections in quarter one is due to decreases in tax and fee revenues from crude oil as well as exports and imports despite a strong rise in domestic tax revenues, according to a report released last week by the department.
Revenues from domestic sources in the period are put at VND47.3 trillion, up 12% against the same period last year, while those from crude oil exports, and import-export activities have fallen by nearly 54% and 4.2% to VND3 trillion and VND21.7 trillion respectively.
The department ascribed the fall in budget collections from imports and exports in the first three months to tariff cuts and exemptions in line with Vietnam’s commitments to free trade agreements and the drops of one to three percentage points in preferential and special consumption taxes.
On top of that, certain fertilizer products, animal feed material, machinery and equipment for agricultural production and offshore fishing enjoy value-added tax exemptions. The falls in fuel prices since June last year has affected the city’s budget collections as well.
However, the department said the city’s overall budget revenues in the first quarter are still stable, with tax revenue from economic activities rising by 15.3%. This suggests businesses have performed better, contributing more to the city’s budget.
This year, the city is assigned to collect a total of VND298.3 trillion in fees and taxes, up 12.24% from the target of 2015 and 9.53% over the revenue it posted last year.
HCMC is allowed to spend VND63.8 trillion from the budget this year and more than VND9 trillion has been disbursed in the first quarter, a year-on-year rise of 7%. Besides, the city has used more than VND3.2 trillion for development investments in the period, up 12%.
The city plans to borrow VND5 trillion in 2016, including VND2 trillion from the State Treasury and VND3 trillion via municipal bond issues, the city government said in a recent report sent to the Ministry of Finance. The money would be used to fund key projects in the city.
Turkey imposes dumping duty on Vietnam steel pipes
Turkey’s Ministry of Economy has slapped a dumping tariff of 25.27% on stainless welded cold-rolled steel pipes imported from Vietnam and Malaysia. The decision was made on March 18.
However, one manufacturer from Malaysia and three from Vietnam including Inox Hoa Binh Joint Stock Company (JSC), Sonha International Corporation, and OSS Dai Duong International JSC are exempt from the duty. These companies fully cooperated with Turkish authorities throughout the investigation process and proved that they had self-produced the products subject to the investigation.
The Vietnam Competition Authority under Vietnam’s Ministry of Industry and Trade said other local companies had not either provided details or answered questionnaires as fully as required. As the result, the high dumping tax is slapped on them.
In December 2014, the General Department for Imports under Turkey’s Ministry of Economy initiated a probe into the evasion of possible anti-dumping duties on stainless welded cold-rolled steel pipes imported from Vietnam and Malaysia. Turkey suspected that Chinese and Taiwanese makers of stainless steel pipes subject to Turkish anti-dumping duties shipped their products to Turkey through Vietnam and Malaysia to evade the tariffs.
NA finance committee frets about higher budget deficit
The National Assembly (NA) Financial and Budgetary Committee has voiced concerns over a steady increase in budget deficit in an assessment report on the implementation of the State budget plans in the past years.
In the report on the result of the 2015 budget plan and the 2016 budget estimate, the committee said overspending always beat limits. Public debt has kept mounting and almost touched the ceiling approved by the legislature.
Government debt had exceeded the cap, reaching 50.3% of gross domestic product (GDP), by the end of last year. The State budget has not disbursed funding for many programs, particularly those for social welfare. Regular expenditures have snowballed while development investments have dwindled.
The ratio of budget deficit to GDP was 4.4% in 2011, 5.4% in 2012, 6.6% in 2013, 5.64% in 2014 and 6.11% in 2015.
Regarding the 2015 budget expenditures, the report said, development investments were 21.5% higher than the estimate, regular expenditures were up 1.7%, and spending from the extra budget revenues edged up by VND69.37 trillion.
The committee called for a serious review of financial discipline relating to funding allocations to cities and provinces in compliance with the 2013 Constitution and relevant laws. The committee said there remained haphazard budget allocations, a waste of State money in some provinces and delays in many projects financed by foreign concessional loans.
The committee requested the Government to clarify responsibilities, handle violations and maintain financial discipline.
In a report sent to the NA, the Government said total budget spending in the 2011-2015 period doubled that in the previous five years.
Of the budget spending in 2011-2015, regular expenditures made up 64-65%, up from 55.2% in the 2006-2010 period. Meanwhile, development investments slid from 30.6% of the budget spending in the 2001-2005 period to 28.2% in the 2006-2010 period and 23.6% in the following five years.
As explained by the Government, it was difficult to strike a budget balance in 2011-2015 due to unfavorable developments at home and abroad. Meanwhile, spending needs were huge and led budget deficit to rise higher than approved by the NA.
As of late last year, the ratios of public debt, government debt and foreign debt to GDP were 62.2%, 50.3% and 43.1% respectively.
Vietnam sees improvements in budget transparency
The International Budget Partnership (IBP)’s survey on the Open Budget Index 2015 (OBI 2015) revealed that Vietnam has seen significant changes in publicising the country’s coffers with five out of eight key budget documents unveiled, heard a conference held in Ho Chi Minh City on March 28.
Vietnam’s 2015 score was 18 out of 100 on the OBI which measures budget popularisation, public participation and budget oversight, according to IBP’s Open Budget Survey. Although the score was lower than the global average of 45, the country still recorded improvements in its transparency compared to 2012.
Ngo Minh Huong, director of the Centre for Development and Integration (CDI) which joined the IBP in conducting survey in Vietnam, said that Vietnam is giving a push to increase its OBI ranking to enhance faith from foreign partners and investors through adjusting fiscal policies and open budget mechanisms in accordance with OBI standards.
Meanwhile, Joel Friedman, senior researcher from IBP, attributed the low score to Vietnam’s failure in making budget proposals and mid-year review available to the public.
At the conference, experts said that as Vietnam has satisfied the criteria on budget oversight and public participation, the country’s OBI is likely to reach 60 out of 100 after the revised Law on State Budget takes effect in the 2017 fiscal year.
The International Budget Partnership’s Open Budget Survey (OBS) is the world’s only independent, comparable measure of budget transparency, participation and oversight.
The 2015 OBS evaluates 102 countries from around the world and measures three aspects of how governments are managing public finances for its OBI rankings.
Hanoi appeals for Italian investment in infrastructure projects
Chairman of the Hanoi People’s Committee Nguyen Duc Chung has invited Italian investors to the capital city, saying that Hanoi is looking for promising and established investors for its urban infrastructure development projects, the Ha Noi Moi daily reported.
At a reception on March 28 for Italian Ambassador Cecilia Piccioni and Nicola Colella, Business Development Manager Far East of Italy’s Astaldi Group, Chairman Chung informed the guests that urban infrastructure development is one of the city’s major tasks for 2016-2020 and beyond.
He noted that Hanoi will soon announce 52 projects which need total investment of about 20 billion USD, including urban railways, four bridges across the Hong (Red) River, dykes along the Red River and various belt roads and axis roads.
The official also suggested Italy assist the capital city in restoring and preserving its ancient houses as well as historical, cultural and tourism sites in the locality.
In reply, Nicola Colella said his company is interested in the city’s elevated railway project and will explore this project as well as other investment possibilities in Hanoi.
ASTALDI is an international construction group with a leading position in Italy and ranked, by revenue, among the top 100 International Contractors .
Purchasing power picks up 9.1% in Q1
Total goods retail sale and service value was estimated at over VND 856 trillion in Q1, representing a year-on-year growth of 9.1%.
However, excluding price factors, the total sale only rose 7.9%, lower than the rate of 9.2% recorded last year.
Retail sale of goods valued VND 657 trillion, accounting for 76.4% of the total, up 9.2% against the same period last year.
Catering and food service turnover reached VND 97.3 trillion, making up 11.3% of the total, up 8.5% the same period last year.
In March, total goods retail sale and service value amounted to VND 275.4 trillion, down 3.4% against the previous months but up 8.8% against the same period last year.
MB Securities lists on HNX
On March 28 over 122 million shares of the MB Securities Joint Stock Company were officially listed and traded on the Hanoi Stock Exchange (HNX), under security code MBS.
The offering price to the market was VND10,000 ($0.45) per share.
Charter capital now stands at VND1.22 trillion ($53.80 million).
MB Bank is the largest shareholder, with 79.52 per cent.
In 2015 MBS recorded revenue of more than VND390.7 billion ($16.62 million) and profit of VND9.2 billion ($412,528), down 87 per cent against 2014.
After its first day of trade MBS closed at VND7,700 ($0.35), down 23 per cent, on total trade of around 340,000 shares.
Improvements sought for Ba Ria Vung Tau ports
The “Solutions to Continue to Improve the Efficiency of Port Management and Exploitation of Group 5 Ports and Seaports at Cai Mep - Thi Vai (CM-TV)” conference was held by the Ba Ria Vung Tau Provincial People’s Committee on March 25 and hosted by Deputy Minister of Transport Nguyen Van Cong.
The province cooperated with the Ministry of Transportation (MoT) and the Vietnam Maritime Administration in organizing the conference to discuss solutions for existing issues in excavation and management at CM-TV seaports. Improving efficiency would bring a host of benefits not only to the country but also to local regions in the Southern Key Economic Zone, which includes Ba Ria Vung Tau.
Addressing the conference, representatives from seaport enterprises, shipping lines, and associations proposed easing maritime fees and charges and customs procedures, enhancing road infrastructure, introducing a floor price on loading and logistics services, and conducting research on solutions for seaport planning management, in particular proposing MoT strengthen the transshipping of cargo between CM-TV seaports.
Deputy Minister Cong emphasized that the ministry has been investing in highway transport networks, including the Bien Hoa - Vung Tau Highway and seeking funds to complete the route between Cai Mep and Thi Vai, and dredging to the 14 meter standard and reaching 15 meters in the near future. It has also promoted investment in domestic waterway networks, to connect cargo transport from the Mekong Delta and southeastern region with CM-TV.
The Provincial People’s Committee will collect opinions and solutions and cooperate with local departments before submitting them to MoT and the government for approval. The target is to make CM-TV seaport an international transit port, attracting huge volumes of cargo from regional countries.
GSO surveys firms on performance
The General Statistics Office (GSO) is conducting a nationwide survey into Vietnamese enterprises to evaluate their business performance and preparedness for global integration.
The survey, which started in early March, also aims to review enterprises’ application of science and technology, and build a business database on local and nationwide scales, GSO said.
GSO’s General Director Nguyễn Bích Lâm said the agency carries out the survey with a goal of serving policy-making, socio-economic development plans, enterprise development and investors.
The survey collects data from both state-owned and private enterprises, including 31 State-owned groups and corporations in the fields of postal service, telecommunications, electricity, insurance, aviation, railways and banking.
Private sectors are divided into several categories based on the number of employees hired by the firms.
The survey includes questionnaires on employees, earnings, assets, equity, performance and taxes.
As scheduled, the survey’ results will be published this November.
Limit on bad loans to boost the local market
The circular limiting sub-prime loans for securities trading will make the local market healthier, said Đỗ Bảo Ngọc, a senior stock expert from MBS securities company.
Ngọc said Circular 07/2016/ TT-BTC, effective on March 15, stopped securities companies and investors from using third-party loans between them and banks for margin trading in order to limit investment risk.
Prime loans were the margin lending between securities companies and investors, allowed by the State Securities Commission and the Stock Exchange, accounting for 80 per cent of the total margin loans while the sub-prime margin were those under which securities firms used their own money and investors’ money as a deposit to take loans from banks.
Prime loans are handled by big securities companies with good capital, equity, bond deposit took advantage in using large-scale lending.
Most of the small securities with lower financial potential took the sub-prime margin to attract more investors.
Some small securities firms let their investors use margin trading with stocks that were not included in the permitted list and offered loans of more than 50 per cent.
A securities leader told the financial website tinnhanhchungkhoan.com that some banks whose securities company are a subsidiary, did not ask for a deposit before lending.
Ngọc said the circular only changed the disbursement mechanism for sub-prime loans but would not influence the cash flow of the market much.
Under the circular, brokers must withdraw their collateral at the bank while investors must close their account and have no more disbursement from the bank. Ngọc said in this case some investors had to sell their mortgage securities to finish their obligations with the banks.
He said though the movement could limit cash flow in the market, while on the other hand, increased the supply of stocks, giving more chances for other investors.
Ngọc said the limitation of sub-prime loans could not cause any technical correction to the market as sub-prime loans only accounted 20 per cent of the total margin and would be closed between one and three months.
Different from a margin call which immediately demanded an investor to deposit additional money or securities to retain their account, the circular would allow investors to decide their selling between two weeks and a month as minimum. Thus, it would not create net selling in the market, MBS’s official said.
The circular is expected to make local investors to turn back to the prime margin loans, investing in blue chips thus boosting the local stock market.
Fans and aircons selling fast
Consumers are flocking to electronic shops and supermarkets to buy fans, air conditioners and other electronic products to ward off the heat in the southern region.
Shopping at an electronics shop on Xô Viết Nghệ Tĩnh Street, Thanh Hải of Bình Thạnh District said he was buying an air conditioner because of the higher temperatures. Another customer at the shop, Thanh Trúc of Thủ Đức District, said he had bought a water misting fan to cope with the heat.
A representative of Nguyễn Kim Electronic Appliance Centre said sales of air conditioners, refrigerators, fruit juicers and blenders had increased significantly compared to the same period last year.
Sales are expected to continue to increase as the heat wave is predicted to reach its peak in a few weeks, he said.
According to electronic shops, this is the best time to buy such products before the peak season’s higher prices.
Traders said fan brands, including KDK, Panasonic, Mitsubishi, and Asia, are priced from VNĐ300,000 (US$13.45) to VNĐ1 million for popular ones and VNĐ1 million to VNĐ3 million for hi-end ones.
Customers are paying more attention to product quality and durability, according to shop owners. They also prefer energy-efficient air conditioners.
The most popular are 1-1.5 HP air conditioners from Toshiba, Daikin, LG, Panasonic and Reetech, with prices between VNĐ8 million and 12 million.
With the hot and dry season expected to be more severe this year, electronic shops expect sales of refrigeration products to increase strongly.
New products and promotions to attract shoppers have been launched by shops in collaboration with producers.
At Nguyễn Kim Electronic Appliance Centre, for instance, customers buying air conditioners from March 11 to 31 will receive a free guarantee for an additional year as well as a maintenance package.
It will also discount up to 30 per cent on fans, juicers, blenders and refrigeration products, and offer freebies.
Agro-fishery-forestry exports rise to over $6.7b
Agro-fishery-forestry exports were estimated at US$6.73 billion in the first quarter of this year, a year-on-year increase of 3.1 per cent, according to the Ministry of Agriculture and Rural Development.
Many types of agricultural produce saw increasing export values in the first three months, of which some 1.59 million tonnes of rice were shipped to foreign markets and brought home $692 million, up 41.6 per cent in volume and 40.8 per cent in revenue against the same time last year.
Indonesia emerged as Việt Nam’s largest rice importer with 31.42 per cent of the market share, followed by China with 17.15 per cent.
Overseas shipments of 479,000 tonnes of coffee also earned the country $808 million, showing annual gains of 30.2 per cent and 5.7 per cent in volume and value, respectively.
Despite a 1.7 per cent reduction in export volume to 55,000 tonnes in Q1, cashew nuts still contributed revenue of $416 million to the country’s total exports, up 3.3 per cent, thanks to a price hike of 5.5 per cent. The United States, China and the Netherlands remained Việt Nam’s largest cashew consumption outlets with market shares of 27.5, 21.2 and 12.7 per cent, respectively.
In stark contrast, the volume of tea exports declined by 5 per cent to 23,000 tonnes, compared to the same time in 2015. As such, its revenue was down 10.2 per cent to $35 million.
The value of aquatic exports in the quarter was calculated at nearly $1.36 billion, rising 1.7 per cent from the same period last year.
Accounting for roughly 51.8 per cent of the market share, the United States, Japan and China remained Việt Nam’s largest seafood consumption markets.
In the first quarter, the country also earned $1.49 billion from the export of wood products, down 1.4 per cent.
As for imports, the country had to spend $5.31 billion for agro-forestry-fishery imports in Q1, down 3.9 per cent against the same period last year.
Trade and Industry Ministry proposes plans to spur industry growth
Domestic business groups, corporations and enterprises should focus on intensive industrial development to create industrial products with a national brand and high competitiveness on the world market.
Deputy minister of industry and trade Trần Tuấn Anh said this at the Ministry of Industry and Trade (MoIT)’s monthly meeting held in Hà Nội yesterday.
At the meeting, the MoIT’s Planning Department reported that the index of industrial production (IIP) in March had a month-on-month increase of 23.8 per cent and a year-on-year surge of 6.2 per cent.
The IIP, in the first quarter, gained a year-on-year growth rate of 6.3 per cent, the department said.
Vũ Bá Phú, head of the Planning Department, said that in the first quarter, some industries achieved high growth rate in the IIP, which included metal production with a rate of 23.1 per cent, paper production at 14.8 per cent and textile at 12 per cent.
The industries also saw high consumption in the first quarter against the same period of last year such as beverage, textile, metal production and medicine production, Phú said. But some other industrial products such as garment, paper and transport vehicles saw reduction in consumption.
However, Phú said the growth rate at 6.3 per cent in the IIP for the first quarter was low against an increase of 9.1 per cent in the first quarter of 2015 mainly due to reduction in crude oil exploitation and low growth rate in production from groups of electronic products, computer and electric products.
Low electricity supply volume in the industrial and construction fields affected the economy.
Phú said that in the next few months, the world crude oil price was expected to stay at low so that was a good chance for industrial entrepreneurs to restructure their production and business, cut production costs and improve quality of products before crude oil prices recover.
In addition, prices of some services for production such as warehouses and transport would decrease against the same period to create favourable conditions for production and business of the enterprises, he said.
Especially, enterprises should strengthen their traditional markets, expand potential markets, actively look for human and financial resources, and have investment in technologies for developing material suppliers, he said.
Deputy minister of industry and trade Trần Tuấn Anh said that the enterprises under the ministry should follow global and local markets and consult state offices to solve difficulties in production and business of local firms, and promote exports in the future.
They should also improve competitiveness, reform technology and promote restructuring, Anh said, while the state would develop policies to attract foreign investment, improve domestic production skills and increase exports.
The price index of industrial production fell during the first quarter of this year by 0.73 per cent quarter-on-quarter, and 1.01 per cent year-on-year, according to the General Statistics Office (GSO).
The reduction of the price index in the first quarter was partly due to lower prices of all three major industrial products, including mining products, which dropped 3.9 per cent against the previous quarter, processing and manufacturing products, which fell 0.13 per cent, and electricity and electric distribution, which was down 1.35 per cent.
The office said that another reason for the decrease in the IIP was price reduction in crude oil and iron ore on the world markets.
However, the price index for the group making up clean water, waste water, and waste water and rubbish treatment, increased by 0.41 per cent quarter-on-quarter, the office said.
ACB expects 14% profit growth
The Asia Commercial Bank (ACB) plans to report a pre-tax profit of about VNĐ1.5 trillion ($66.7 million) this year, an increase of 14 per cent over last year.
The bank announced the plan in a draft resolution prepared for its shareholders' meeting, which will be held in HCM City on April 8.
This year, the bank is expected to pay dividend in shares at a rate of 10:1, meaning a shareholder owning 10 shares will receive a new share.
Its total assets are expected to reach VNĐ237 trillion on December 31, 2016, up 18 per cent over the end of 2015.
The bank also projects a year-on-year growth of 18 per cent for both deposits and lending, while controlling bad debts at less than 3 per cent of its total outstanding loans in 2016.
Last year, deposits at ACB grew by 13 per cent year-on-year to VNĐ175 trillion and its credit rose by 15 per cent year-on-year to VNĐ134 trillion.
The bank reported a charter capital of nearly VNĐ9.4 trillion at the end of 2015.
Local fund VFM to target retail investors
VietFund Management (VFM), Viet Nam's first home-grown fund management company, on March 28 unveiled its new strategy of expanding to individual investors.
But it would continue to focus on its traditional customer base of large organisations and international institutions.
To reach individual investors, it plans to expand its distribution system as well as have more partners including stock brokerages.
Among other efforts to achieve the target, the company on Monday announced its new branding awareness.
Last year, the net asset value of VFM's VF1 and VF4 grew by 13.6 per cent and 19.9 per cent.
Its VFB (bond investment fund) reported growth of 6.3 per cent.
STK achieves 20% of 2016 revenue target
The Century Synthetic Fiber Corporation (STK) earned VND323.5 billion (US$14.48 million) as of March 26, achieving 20 per cent of its revenue target, Chairman Đang Trieu Hoa said.
Speaking at the company's annual general meeting on March 28, Hoa said the company's total output in March was more than 5,300 tonnes, which was more than the combined total output in January and February. STK expects its output this month to range between 5,800 tonnes to 6,000 tonnes.
He said the recovery of the market in Thailand and Turkey, as well as increased orders from foreign direct investment (FDI) enterprises caused the company's revenue to increase in the first quarter.
STK said the number of orders would continue to recover and stabilise in the second quarter of this year.
The company aims to earn VND1.645 trillion in revenue and VND127.1 billion in after-tax profit this year, 39 per cent and 78 per cent higher than in 2015, respectively.
STK would exploit markets that need high-quality fibres such as Thailand or markets that offer preferential tariffs such as South Korea this year, Hoa said.
Also at the meeting, the management board of STK submitted to shareholders a plan to issue 6.98 million shares to raise capital amounting to VND69.8 billion.
The expected charter capital of the company after the share issue will be VND535 billion.
STK earned VND1.035 trillion in revenue and VND71.3 billion in after-tax profit in 2015.
Workshop trains SMEs on potential of e-commerce
More than 200 small and medium-sized enterprises (SMEs) were trained on the potential of e-commerce at a workshop in Vung Tau City today.
The workshop was organised by the Vietnam Chamber of Commerce and Industry (VCCI) and Verisign Company.
The participants of the workshop agreed that mobile e-commerce continued to gain momentum in emerging markets. In Viet Nam, consumers are increasingly utilising their mobile devices to engage and participate in online activities. SMEs should prepare for this shift to mobile and ensure that they are able to meet the needs of their customers.
"Consumers are moving away from desktops and laptops. There is an increase in the uptake of smaller, portable devices that allow one to have round-the-clock access to the online world. Therefore, it is essential for SMEs to find ways to meet this demand and stay abreast of the latest mobile e-commerce trends, in order to retain their competitive edge in the business environment," Deputy Director of VCCI in Vung Tau Nguyen Xuan Bich Thoai said.
"A strong online presence will ensure that businesses are more visible to a wider audience. I believe this will definitely increase profitability in the long term," Thoại said.
"We advise businesses to choose the .com domain name because it is the global standard for doing business online. Choosing the right domain name is the first step towards building a successful website," Nguyen Van Hoc from PA Viet Nam said.
According to the Viet Nam Mobile E-Commerce Report 2014, there are 134 million mobile subscribers in Viet Nam, while more than 11.6 million smartphones were sold between 2014 and 2015. Thirty-nine per cent of the Vietnamese population are using the Internet and 34 per cent are going online on their handheld mobile devices. As a result, Viet Nam is recognised as a booming market for mobile e-commerce.
The Vietnam E-Business Index 2015 said only 26 per cent of the business websites were mobile-friendly and 43 per cent of the companies have earned higher revenue after going online.
Thailand to host ASEAN agricultural business expo
The second annual SIMA ASEAN Thailand international agricultural trade show will be held in Bangkok next September.
It is expected to attract more than 450 Thai and international agricultural companies. It will have an exhibition area of 13,500sq.m indoors and 10,000sq.m outdoors, Tita Kanittanon, assistant marketing manager at Impact Exhibition Management Co.,Ltd, one of the organisers, said.
SIMA offers a comprehensive range of products and services like tractors, spare parts and accessories, embedded electronics, tilling, sowing, planting, harvesting and post-harvest equipment, equipment for tropical and special crops, handling, transportation, storage and breeding equipment, renewable energy, consultancy, management and software.
The latest innovations pertaining to regional crops will be presented and conferences to assist ASEAN farmers and breeders will be held.
SIMA ASEAN would mainly cater to the demand for agricultural machinery and growth in mechanisation of agricultural practices in ASEAN countries, including Viet Nam, Kanittanon said.
The event expects to have Vietnamese exhibitors this year, she said.
Held at the Impact Exhibition Centre from September 8-10, it is expected to welcome more than 25,000 visitors compared to last year's 13,200, she added.
Indonesia continues levying AD tax on Vietnam steel
The Indonesia Anti-Dumping Committee (KADI) has announced its final decision after an administrative review of the anti-dumping investigations into cold rolled steel coil and sheets imported from Vietnam and four others.
The Vietnam Competition Authority (VCA) under the Ministry of Industry and Trade (MoIT) on March 28 said KADI continued imposing anti-dumping (AD) tax rates of 12.3 – 27.8% on Vietnam steel for five years.
The rates were quite higher than those imposed on steel imported from the Republic of Korea and Taiwan, but much lower than Japan (18.6%-55.6%) and China (13.6%-43.4%).
The lawsuit was lodged by the plaintiff, PT Krakatau Steel in 2011. In March 2012 the Indonesian Ministry of Finance decided to levy AD duties of 5,9% - 55,6% on the products imported from the five countries.
In September 2015, Indonesia reviewed AD investigations and continued to impose duties with unchanged standpoint during the process.
Vietnam’s textile, garment enjoys TPP
The Trans-Pacific Partnership (TPP) is hoped to bring more opportunities for Vietnam’s textile and garment sector in expanding markets and export, however, enterprises and policy-makers must quickly remove current obstacles as well as have synchronous measures.
According to the Vietnam Textile and Apparel Association (VITAS)’s figure, turnover of textile and garment reached US$27 billion in 2015 yet the value of import was quite great and the sector still imported much Chinese commodities.
After Vietnam joins the TPP, the tax will be gradually reduced to 0%. With the original rules encouraging the use of the materials from the TPP block, in the long term, Vietnam will invest in the production of materials, specifically fibers and dyes. Importantly, the textile and garment industry will have more opportunities to build an auxiliary sector for itself.
When Vietnam becomes a TPP member, it will be in the same block with the United States and the American consumers will get benefits because Vietnamese garment exports will enjoy a preferential tax rate. The current problem is that the textile and garment industry of Vietnam still largely depends on imported materials and accessories.
VITAS Deputy Chairwoman of the Vietnam Textile and Apparel Association (Vitas) Dang Phuong Dung said that Vietnam had not exploited much on tax incentive.
Moreover, most common challenges in the sector are market, technique and waste treatment methodologies. In addition, local governments of the southern provinces of Vung Tau, Dong Nai and Binh Duong refused to open door for foreign textile enterprises though Vietnam is trying to attract foreign direct investment (FDI).
Furthermore, Vietnamese textile companies should increase its value by paying more attention to design because many fashion shows have been held individually showing a loose combination between textile companies and designers. Most of all, enterprises should focus on building its brand names and developing distribution networks.
Meantime, KPMG Vietnam Company Deputy General Director Nguyen Cong Ai said that most Vietnamese textile companies do outwork (processing) following overseas companies’ orders hence to get low profits.
Meanwhile TPP requires textile companies themselves make production materials not import commodities from nations which are not TPPs members. Currently, domestically-made materials just meet 40-50 percent of the demand.
Chairman of Garmex Sai Gon Company’s Managing Board Le Quang Hung said that as per the international organizations, Vietnamese textile and garment will reach US$30 billion by 2010 and US$50 billion by 2050 only when material suppliers can develop equally.
He stressed the need of incentives for those operating in the supporting industry or else the above-mentioned forecast will not come true. In addition, the investment in supporting industry will help enterprises to increase competitiveness and actively control production quality. The government can help by asking related agencies to analyze products for export from which to forecast demand of every material for future manufacturing, said Mr. Hung.
Vietnamese economy struggles as growth slows in first quarter
Disappointing GDP growth in the first quarter of 2016 suggests that Vietnam’s economy may be experiencing a slowdown; if no bold measures are taken, the full-year target of 6.7% will be elusive.
According to the General Statistics Office (GSO), Vietnam’s economic output during January-March increased by 5.46%, better than the same period in 2012, 2013 and 2014, but short of the 6.12% expansion seen in the first quarter of last year. The services sector made the largest contribution with its value up 6.13%, the fastest pace since 2012.
Combined industry and construction also rose 6.72% but nothing close to the 8.74% increase in the first three months of 2015. Industry only rose by 6.2% compared with 9.27% last year due to a 1.2% contraction in mining and extraction, with crude oil down 3.7%, and manufacturing up by only 7.9% compared with 9.7% in the first quarter of 2015.
On the contrary, construction during the January-March period posted an impressive growth rate of 9.94%. This marks the largest increase since 2010, in which the private sector saw a rise of 23% and the State sector 11%, while growth in other sectors went into negative territory, said GSO General Director Nguyen Bich Lam.
The economic picture in the first three months of the year was a mix of highs and lows. During the said period, more than 23,700 new enterprises were formed with total registered capital reaching VND186 trillion (US$8.37 billion), marking increases of 24.8% in enterprise numbers and 67.2% in capital. The number of businesses resuming operation also rose by 84.1% compared with the same period last year. But according to the GSO, slow growth, coupled with negative external impacts, caused domestic enterprises to face more and more difficulties. The first quarter saw more than 2,900 enterprises completing dissolution procedures and ceasing their operation, an increase of 13.8% from a year earlier. Those forced to close temporarily also numbered more than 20,000, up 23.9%.
The first quarter of 2016 is the starting quarter of the 2016-2020 socio-economic development plan. This quarter’s performance will provide impetus for the whole economy, especially as most forecasts are upbeat about Vietnam’s economy. However, the disappointing figures above suggest that growth is being maintained but is slowing down and inflation, although still running low, is showing signs of bouncing back. The target of 6.7% for the whole year is now an enormous challenge, given that Vietnam’s economy is being additionally hit by severe natural disaster and risks from the world economy’s fragile recovery.
According to the GSO head, sharp falls in global commodity prices, especially plummeting crude oil, slowdown in global trade growth, and unpredictable volatility of the financial and monetary markets in the world and China in particular, adversely affected Vietnam’s economy, with exports and government revenues hardest hit. Earlier this year, strong cold spells caused substantial damage to plants and livestock in northern mountainous provinces. Severe on-going salt intrusion in the Mekong Delta and drought in the Central Highlands, South Central and South Eastern regions have also wreaked havoc on agricultural production and the lives of local residents.
These woes caused the agro-forestry and fishery sector to post negative growth for the first time in many years, slumping by 1.23% in the first quarter. Respective growth of 6.24% and 2.12% in the forestry and fishery sub-sectors failed to lift the sector’s overall growth due to a sharp decline of 2.69% in agricultural production.
The GSO head predicted that in the remaining quarters of 2016, Vietnam’s economy would continue to suffer from impacts of drought, salt intrusion and abnormal weather patterns unfavourable to agriculture and aquaculture. In addition, oil prices will remain volatile. He said oil prices have shown signs of recovering recently but are projected to remain low, which will affect oil-related revenues. But lower oil prices could also boost the domestic economy thanks to lower input costs for most sectors, which in turn will increase gross domestic product and offset lost revenues from crude oil.
The economic picture in the remaining months of 2016 will see more disadvantages than advantages. As such, the government, local authorities and enterprises should take a more proactive and flexible approach to overcome the difficulties in order to fulfil the set targets.