BUSINESS IN BRIEF 4/6
IP rights must be ensured: official
Protection of intellectual property will be an essential factor to further innovation and economic growth of the country, an official with the Ministry of Science and Technology has said.
Speaking at the International Innovation Business Forum held in HCM City yesterday, deputy minister Tran Viet Thanh said that intellectual property (IP) was an unlimited resource and the result of people's innovation, unlike limited resources such as labour, capital and land.
Protection and trading of IP rights would bring great benefits not only to businesses but to the entire economy, he said. The role of IP is critical as Viet Nam integrates more deeply in the global economy.
Thanh said that IP would be a decisive factor in strengthening the competitive capacity of enterprises as well as the entire economy.
Around 1,500 patents, 15,000 industrial designs and 160,000 trademarks of businesses in Viet Nam are protected currently.
By trading their own intellectual property, businesses could recoup their expenses for creating, developing and protecting IP, and, at the same time, increase IP value, Thanh said.
He noted that foreign organisations had recognised the value of several Vietnamese companies' intangible assets.
For example, the Vinamilk brand last year was valued at US$1.1 billion, accounting for 22 per cent of the company's wealth. The Viettel brand was valued at $580 million and Vinhomes at $343 million.
A recent survey by the ministry showed that in the 2000-14 period there was an increase in the number of intellectual asset licenses among businesses in Viet Nam, he said.
The number of Vietnamese intellectual assets transferred to foreign investors was also on the increase, with sales in 2014 rising by 20 times over the figure in 2006.
Sales of intellectual property mainly occur in industries such as pharmaceutical, pharmaceutical chemistry, processing, food preservation, garment and textile, engine manufacturing, electrical equipment and medical equipment.
The entry of foreign investors from South Korea, the US, China, Thailand, Japan and other countries had contributed to the promotion of commercialisation of intangible property of Vietnamese firms, he said.
Lai Tien Manh, director of Mibrand Viet Nam, noted that brands were the most important intellectual asset of a business.
Products with a good brand name can command prices 10 times higher than one with a weak brand, even though the product may be similar, he said. Total brand value in Viet Nam, however, remains very low compared to other countries.
The total value of the country's 50 leading brands is only $5.5 billion, slightly higher than a Singaporean brand (BBS bank valued at $4.4 billion), he said.
Many local firms had not protected their intellectual property, he said. Without IP protection, a company's investment in research and development, product differentiation, and marketing could be stolen or copied.
He said that Vietnamese companies should focus on improving their brand value and become more aware of intellectual property rights.
The Government should also develop a legal framework that allows adding a company's brand value to its total asset value, he said.
Thanh said that the Trans Pacific Partnership (TPP) trade agreement would set high standards on intellectual property protection.
But the enforcement of such regulations would be a challenge for many Vietnamese firms, he added.
In the long run, however, better protection of intellectual property is expected to provide stronger incentives for businesses to invest in creative industries that Viet Nam is seeking to develop, Thanh said.
The forum was organised by the Ministry of Science and Technology, Business Association of High-Quality Vietnamese Goods, Business Studies and Assistance Centre, and Leading Business Club.
Techcombank, insurance company ink deal to boost co-operation
The Viet Nam Technological and Commercial Joint Stock Bank (Techcombank) and PetroVietnam Finance and Insurance Company (PVI), on June 2, signed a comprehensive agreement on building and developing the business.
Under the agreement, Techcombank will supply the financial logistics for the management of currency flows, foreign exchange and bond investment for PVI in order to help it save expenses in operations and human resources.
Meanwhile, with its leading role in the insurance sector, PVI will design and provide Techcombank and its staff and customers with quality insurance programmes, which have a preferential fee.
General Director of PVI Bui Van Thuan said this co-operation was a golden opportunity for the two sides to maximally exploit their strengths in crossed sales of services and products, bringing about added values for participants including the bank, insurance supplier and customers.
As one of the leading insurance companies in Viet Nam, last year PVI reported a revenue of VND980 billion (US$44 million) and after tax profits of VND530 billion, an increase of 36 per cent and 217 per cent over 2014 respectively.
Techcombank has been co-operating with many organisations and businesses to supply its products, including Vietnam Airlines, State-run Viet Nam National Chemical Group, Electricity of Viet Nam, and Vietnam National Coal and Mineral Industries Group, in addition to Viet Nam Post and Telecommunications Group, and Viet Nam Coffee and Cocoa Association.
The bank said it would list on the Unlisted Public Company Market (UPCoM) this year, and then on one of the two official bourses in Ha Noi and HCM City.
Last year, the bank reported a profit before tax of VND2.037 trillion, an increase of 43.8 per cent over 2014.
More exports join “one-billion USD” club
The country’s “one-billion USD” club, which comprises exports with turnover of more than US$1 billion, has been expanded after admitting an additional 12 exports as its members in the first five months of the year.
Mobile phones and spare parts took the lead in export revenue with US$14.44 billion, which made up 21.3% of the nation’s export turnover during the period. Last year, they became the first commodity to surpass export revenue of US$30 billion. Meanwhile, it is likely for the country to rake in more than US$36 billion from shipping mobile phones and spare parts abroad in 2016.
Regarding its consumption markets, the United Arab Emirate (UAE) was the largest purchaser with US$1.5 trillion, followed by the US (US$1.47 trillion), the Republic of Korea (US$810 million) and the UK (US$637 million).
Garment and textile products were also listed in the club with US$8.6 billion in export revenue. The export revenue in the five month period in 2016 recorded a year-on-year increase of 6.1% and is expected to exceed US$24.5 billion for the whole year.
Major export markets of this commodity were the US, Japan, the RoK and Spain.
Other member of the club was computers and spare parts, which had an export revenue of US$6.34 billion in the first five months of this year, an increase of 5.4% compared to the same period in 2015. Export revenue reaching over US$100 million was seen in ten markets, including China (US$854 million), the US (US$820 million) and the Netherlands (US$539 million).
Footwear also secured a place in the one-billion USD club with US$4.96 billion earned in foreign markets during the five month period. The largest consumption markets were the US (US$1.33 billion), China (US$253 million) and Japan (US$226 million). Total export revenue of the commodity is forecast at US$12.7 billion in 2016.
Machines, equipment and tools, aquaculture products, coffee, accessories (handbags, purses, suitcases and umbrellas), rice and vegetables were also present in the club with export value of 3.63 billion USD, 2.54 billion USD, 2.45 billion USD, 1.33 billion USD, 1.13 billion USD and 1.01 billion USD, respectively.
Danang: Land of promising UK businesses opportunities
Danang is an important investment destination for UK businesses and with the advent of the EU-Vietnam Free Trade Agreement (FTA), business opportunities are set to increase, said speakers at a June 3 seminar in the city.
The seminar examined the likely impacts the FTA will have on key business segments of the economy, heard success stories from companies that have succeeded in Danang, and looked at what support is available to help UK companies work with and in Danang.
In a keynote address at the event, UK Consul General to Ho Chi Minh City Ian Gibbons said currently UK companies have invested US$1.6 million in nine business ventures in the coastal city.
These have been largely in English language training, information technology, business consultancy and import-export activities. A large number of UK companies have also opened representative offices in the city.
Looking forward, said Mr Gibbons, UK companies have an avid interest in and are eager for opportunities in the tourism and hospitality segments, which he believes holds great promise for expansive growth.
Deputy Director Huynh Lien Phuong of the Danang Investment Promotion Centre in turn spoke about the advantages for UK businesses to invest in the city – citing strengths such as the Tien Sa deep-natural water port, the international airport, low labour cost and low land rents.
Ms Phuong said she hoped more UK businesses invest in the city and assured them the city would go out of its way to accommodate their needs and simplify the administrative processes to the greatest extent possible.
At the end of the seminar, leaders of Danang hi-tech park and the British Business Group Vietnam signed a preliminary memorandum of understanding to explore the possibility of investing in several enterprising ventures.
First Vietnam Private Economic Forum
On June 3, Deputy Prime Minister Vuong Dinh Hue chaired the first Vietnam Private Economic Forum in Hanoi.
The forum pointed out proposals that enterprises want to receive from the Government and from private business partners, looked at the main challenges that they were facing, and put forward recommendations and solutions to stakeholders.
Hue said at the forum that the government will listen to business proposals to find the appropriate support for them.
“The government will exert its greatest efforts to improving the investment environment, business competitiveness, and create equal opportunities for economic sectors to experience healthy competition in the market economy. The government is also working on a law to support Vietnam’s small and medium sized enterprises (SMEs)" the Deputy PM said.
ODA projects need to keep disbursement schedule
The Government will continue issuing instructions for projects using official development assistance (ODA) to ensure their capital disbursement meets the deadline, said Minister-Head of the Government Office Mai Tien Dung.
According to Dung, as of May, 71 percent of the total signed ODA and preferential loans were disbursed.
Currently, ODA a preferential loans nd preferential loans that haven’t been disbursed total about 22 billion USD, of which 2.15 billion USD must be spent in 2016.
According to preliminary reports, ministries, sectors and localities need about 39.5 billion USD from ODA and preferential loans for 2016-2020. Most of the sum will be earmarked for transport, urban development, agriculture, rural development, environment, education, training, health care, and science and technology.
The disbursed ODA and preferential loans between now and 2020 is expected to be 25-30 billion USD, up 14 percent over the past five years.
EU free trade pact upends Vietnam agriculture
Agricultural produce in Vietnam will face increasingly stiff competition from the EU as an expansive free trade agreement eliminates import tariffs on substantially all products traded between the two economies over the next five years.
The European Commission has released an update on opportunities for EU agriculture in Vietnam arising as a result of slashes in import tariffs under the EU-Vietnam Free Trade Agreement.
According to the update, Vietnam's average tariff on agricultural products was 16% as of last year. Under the trade pact, which came into effect late last year, Vietnam will reduce and eventually eliminate tariffs across a broad range of food and agricultural products.
This will help put actors in the EU agriculture segment of the economy and their exports on a level playing field in Vietnam with those in the local industry, and give the EU a leg up on other foreign competitors.
Dr Vo Tri Thanh, vice president of Central Institute for Economic Management, recently warned guests at a seminar in Hanoi that the trade accord with the EU could negatively impact the agriculture segment of the nation’s economy.
Even more trouble for agriculture is lurking in the shadows, said Dr Thanh, as the EU is finalizing free trade agreements with Laos, Cambodia and a number of other ASEAN countries.
When these latter agreements come into force they will for all practical purposes put Vietnam agriculture on a level playing field and competitive basis with all other ASEAN member nations.
Even more troublesome for agriculture is the growing prevalence of locally grown unsafe produce in the country that has sparked a consumer demand for foreign products, especially those from regions such as the EU.
This offers huge openings for companies in EU agriculture to do business in Vietnam, said Dr Thanh.
At conferences across the EU, representatives from many agriculturally-linked businesses have said that the free trade deal with Vietnam enables them to expand their sales, thanks principally to reduced import tariffs.
Nguyen Do Anh Tuan, head of the Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD) under the Ministry of Agriculture and Rural Development agrees with Dr Thanh.
The free trade agreement with the EU is already beginning to exact its toll on Vietnam agriculture, said Mr Tuan, and is one of the leading reasons agriculture in Vietnam contracted, experiencing negative growth in the early months of 2016.
It’s vitally important for the players in the local agriculture segment of the economy to get their act together, he said, and in the medium and long term focus on restructuring to achieve food hygiene and safety as the number one priority
Secondarily, they need to achieve a proper balance among quality, price and timeliness of production.
Mr Tuan suggests that the coffee segment be restructured first – followed in rapid succession by the rice, pepper and seafood segments of the industry.
Not only are Vietnamese consumers beginning to turn their backs on local produce over food safety concerns, said Mr Tuan, but EU importers are also starting to sound the alarm and are warning of unacceptable pesticide residue.
All the other problems that agriculture faces, pale in significance to food safety concerns, he said, — and if the industry doesn’t resolve the problem, it will continue to see a mass exodus of consumers compounded by an influx of foreign competitors.
In short, the EU-Vietnam trade pact may just upend Vietnamese agriculture as we know it today, he concluded.
HCM City, South Australia step up cooperation
Chairman of the Ho Chi Minh City People’s Committee Nguyen Thanh Phong asked for South Australia’s support in education and agriculture, especially high-tech agriculture and bio-tech centre development.
He made the call during a reception for a delegation from South Australia led by Governor Hieu Van Le (in Vietnamese Le Van Hieu) on June 2.
According to Phong, Ho Chi Minh City and Australian localities like Queensland and North Australia have enjoyed sound relations in past years. He said that two-way trade in 2015 reached nearly 600 million USD and Australia is currently 18th largest investor in the city with 150 projects valued at over 187 million USD.
He expressed his hope that as the first Vietnamese to become a Governor in Australia, Le will do his utmost to elevate relations between South Australia and Ho Chi Minh.
The South Australia Governor said that the delegation’s visit aims to promote cooperation between two sides.
Enterprises from the Australian state want investment and cooperation opportunities in education, medical and healthcare skill training, he noted, adding that collaboration would be significant to enhancing relations between two countries.
Large-scale seminars feature Vietnam-Germany economic prospects
Two large-scale seminars featuring the prospects of Vietnam-Germany economic ties will take place in Berlin on June 22, attracting nearly 250 businesses from the two countries.
The first seminar will attract the participation of businesses, policymakers and government officials, including Vietnamese Minister of Industry and Trade Tran Tuan Anh, Deputy Foreign Minister Bui Thanh Son and Parliamentary State Secretary at the German Federal Ministry for Economic Affairs and Energy Uwe Beckmeyer, said Ambassador to Germany Doan Xuan Hung during a recent press briefing.
Other distinguished guests include representatives from the German Chamber of Industry and Trade and the German Asia-Pacific Business Association.
The second seminar is expected to attract 200 delegates and will discuss the prospect of Vietnam-Germany economic and trade ties, and the role of Vietnamese businesses in Germany.
Hung said since the establishment of the Vietnam-Germany strategic partnership in 2011, their all-around links have progressed positively. Two-way trade soared to 9 billion USD last year from 4.1 billion USD in 2010.
Vietnam currently records more than 300 German companies registering a total capital of 1.41 billion USD, ranking fifth among EU countries investing in Vietnam.
The ambassador also suggested holding more similar seminars to facilitate bilateral trade and investment.
In an interview with Germany’s Deutsche Welle television, Hung said both sides need to increase high-level visits to build trust. Apart from economic ties, more attention should be paid to tourism, cultural and human resources cooperation.
Speaking at the press briefing, Counsellor Bui Ha Nam said the two seminars will provide a chance for enterprises to be fully aware of Vietnam’s potential and market access methods.
The embassy will serve as a bridge to help firms navigate the market, seek opportunities and deal with arising problems, he said.
Workshop promotes Indian investment in Vietnam
A workshop was held by the Vietnam Embassy in India and the India – ASEAN – Sri Lanka Chamber of Commerce and Industry in the Indian industrial hub of Chennai on June 1 to promote investment in Vietnam.
The event was attended by representatives from 50 host businesses, including such big names as Ashok Leyland, KCP, Sime Darby Edible Products, Indias, and Millmore Engineering Private Ltd.
Addressing the event, Vietnamese Ambassador to India Ton Sinh Thanh highlighted the potential of southern India, Chennai City in particular, and Indian groups.
In 2015, India was the 28 th biggest investor in Vietnam, at 570 million USD, Thanh said.
He underlined the Vietnamese market’s potential for Indian enterprises, particularly the taxation incentives when Vietnam becomes a member of the ASEAN economic community and through recent free trade agreements, particularly the Trans Pacific Partnership (TPP).
Echoeing the Ambassador’s opinion, Muthu Subramaniyan - President of the Chennai-based KCP Company, which has an affiliate in Vietnam, shared with participants the opportunities for Indian investors in Vietnam.
In April, the Embassy of Vietnam in India organised a similar event in New Delhi.
Can Tho to host Vietnam – France cooperation conference
The Mekong Delta city of Can Tho will host the 10th cooperation conference between Vietnamese and French localities from September 15-17.
French Ambassador to Vietnam Jean Noel revealed at a working session with the municipal leaders on June 2 that the conference’s time will be reduced to three days, instead of one week as was the initial plan.
A highlight in a series of events of this year’s conference is a Vietnam-France international fair themed: “ Viet- France economic development cooperation”.
Representatives from France to the fair are enterprises, specialising in supplying services to businesses and localities in the areas of architecture, software, museums and entertainment parks, and are expecting to introduce to the host country the latest technological solutions.
The event is expected to attract about 30 enterprises from 20 localities from the European country. A poetry exhibition and French movie days, along with several cultural exchange activities will await attendees to the event.
The Vietnam – France cooperation conference means to improve the efficiency of cooperation between Vietnamese and French localities for sustainable development, thus driving the two countries partnership forward.
The conference between Vietnamese and French localities dates back to 1989, when Hanoi and the region of Ile-de-France set up a partnership. This form of cooperation has developed and contributed to the friendship and multifaceted cooperation between the two countries.
The conference, also known as the Vietnam – France decentralised cooperation conference, is held biennially or triennially on a rotational basis to review the cooperation effectiveness and set up collaboration directions for following years.
Vietnam’s central city of Hue and northern port city of Hai Phong hosted the conference in 2005 and 2010, respectively.
The 9th conference was held in the city of Brest in France in June 2013, with the participation of 16 Vietnamese cities and provinces.
Jetstar Pacific delivers services on new domestic routes
Travel will now be easier for customers of the low-cost carrier Jetstar Pacfic after the airline officially launched its services on Hanoi-Quy Nhon and Hanoi-Chu Lai routes on June 1.
Two A320 aircrafts carrying nearly 360 passengers from Hanoi landed at Quy Nhon Airport, in the central province of Binh Dinh and Chu Lai Airport, in the central province of Quang Nam on the day.
The carrier operates three return flights a week on Wednesdays, Fridays and Sundays on the Hanoi-Chu Lai route; and on Mondays, Wednesdays and Sundays on the Hanoi-Quy Nhon route. Promotional one-way tickets costing 188,000 VND (8.4 USD), excluding tax and fees, are available for customers to purchase from 11am on June 1-2 on www.jetstar.com.
On the occasion, customers also have chance to purchase low fares on Ho Chi Minh City-Bangkok route at 199,000 VND (8.9 USD) and Ho Chi Minh-Singapore and Hanoi-Hong Kong routes at 499,000 VND (22.2 USD).
The airline has operated flights connecting Ho Chi Minh City and the two central provinces from 2015.
Jetstar Pacific is a member of the Jetstar Group, a leading low-cost airline brand in Asia-Pacific, with a fleet of 75 aircrafts and a network of routes in 17 countries.-
Vietnam, RoK boost cooperation in food processing
Nearly 100 businesses from the Republic of Korea (RoK) were brought together at a workshop in Seoul on June 1 to explore cooperation opportunities in food processing and beverages in Vietnam.
The event was jointly organised by the Vietnam Ministry of Planning and Investment, and the Ministry of Industry and Trade of Vietnam, and the ASEAN-Korea Centre (AKC).
Vice Secretary General of AKC Kim Ki-hong said the workshop is one of the main activities of the centre this year to support ASEAN member countries, including Vietnam, to seek and promote collaboration opportunities in food processing.
Vice Ambassador to the RoK Tran Anh Vu highlighted the growing relations between the two countries, especially in economy. The RoK has always been one of the top investors in Vietnam with two-way trade thriving over the past few years.
The workshop offers a good chance for RoK investors to study the food and beverages market in Vietnam, while Vietnamese firms could optimise opportunities from the Vietnam-RoK free trade agreement (FTA) to gradually make inroads into that market.
Deputy Director of the Vietnam Trade Promotion Agency (Vietrade) under the Ministry of Industry and Trade Ta Hoang Linh said the Vietnam-RoK FTA has opened up a new development era bilateral economic relations.
The two sides have bolstered cooperation and established specialised groups to support businesses in making the best use of the deal’s incentives across many fields, including food processing, he said.
He added that Korean enterprises could use the rich materials in Vietnam and RoK’s technology to invest in food processing in Vietnam, and access other markets with which the Southeast Asian country has signed FTA agreements.
Additionally, the support industry for food processing in Vietnam is growing strongly, creating golden opportunities for Korean businesses to explore, he noted.
During the workshop, Vietrade and the post-FTA business support agency under the RoK’s Ministry of Trade, Industry and Energy signed a Memorandum of Understanding (MoU) on trade promotion to support businesses from both countries in implementing the Vietnam-RoK FTA.
The MoU will enable the two sides to enhance trade cooperation activities and set up information exchange channels, while seeking opportunities and supporting each other in trade and investment promotion.
An Giang: Tinh Bien trade fair pulls in 17 billion VND
The six-day Tinh Bien international trade fair rounded off in the Mekong Delta province of An Giang on June 1, grossing more than 17 billion VND (756,840 USD) in sales.
Of the total, the trade of consumer goods contributed the lion’s share worth 11 billion VND (489,720 USD).
Twenty business contracts were sealed at the fair.
Featuring 500 stalls run by Vietnamese, Thai and Cambodian firms, the event attracted 175,000 visitors, including 23,000 Cambodians.
Bordering Cambodia, An Giang serves as a gateway through which local commodities are able to access the ASEAN market.
Firms urged to up use of trade remedies
After more than 10 years of enforcing trade remedies laws, the number of trade investigations that Viet Nam initiated against imported products were finally able to be counted on one hand, heard a conference yesterday.
Viet Nam launched four cases of safeguard investigation and two cases of anti-dumping investigations. No anti-subsidy investigation has been initiated, to date.
In comparison, Vietnamese products face roughly 100 trade defence investigations from foreign markets.
"The application of trade defence instruments by Vietnamese firms remains modest," Pham Chau Giang, head of the Investigation Department under the Viet Nam Competition Authority (VCA), said at the conference held by the VCA in collaboration with Viet Nam Chamber of Commerce and Industry (VCCI).
"Local firms are still passive in using trade remedies although these instruments, allowed by the World Trade Organistion (WTO), were considered to be effective in protecting local production amid international integration," she said.
Giang said that the awareness of businesseses was low while the roles of industry associations had not been promoted.
Taking the steel industry as an example, Giang said that Viet Nam imported 1.9 million tonnes of steel ingots last year, coupled with the local production capacity of 7.5 million tonnes, exceeding local demand which was estimated at 6.2 million tonnes.
"If trade remedies are not applied, local production will be pushed into difficulty," she said.
According to Nguyen Thi Thu Trang, director of VCCI's WTO Centre, steel was the product that caused Viet Nam to launch three out of six trade defence investigations.
Trang said that the problem was that the human and financial resources of local businesses remained limited and trade defence was seemingly an instrument of firms holding controlling market shares.
In order to promote the application of trade defence instruments, Pham Tat Thang from the Ministry of Industry and trade said that Vietnamese businesses must enhance their knowledge on trade remedies and should get prepared in resources to be capable of using these instruments.
In addition, trade remedies laws should be revised to ensure consistency with the amended laws on investment, enterprise, import-export tax and customs, Thang said.
Trade defence investigations initiated by Viet Nam against imported products (according to WTO Centre):
- Anti-dumping investigation against cold rolled stainless steel imported from mainland China, Malaysia, Indonesia and Taiwan filed on June 5, 2013
- Anti-dumping investigation against plated steel imported from mainland China, Hong Kong and Korea filed on December 24, 2015
- Safeguard investigation against billet steel and long steel filed on December 25
- Safeguard investigation against monosodium glutamate filed on June 6, 2015
- Safeguard investigation against vegetable oil filed on November 30, 2012
- Safeguard investigation against float glass filed on May 25, 2009.
VN shrimp exports to S Korea to rise
Exports of Vietnamese seafood products to South Korea are expected to increase strongly this year thanks to the free trade agreement between the two countries that took effect last December, according to the Korea Fishery Trade Association.
Under the FTA, Korea has committed to clear taxes for 10,000 metric tonnes of Vietnamese shrimp in the first year and 15,000 metric tonnes in the next five years.
Choi Dug-Boo, managing director of the association, said shrimp was the favourite seafood item in South Korea. Tilapia and pangasius are also popular.
Dug-Boo spoke at a press conference held early this week in HCM City to introduce the Busan International Seafood and Fisheries Expo 2016 (BISFE).
Viet Nam earned US$580 million from seafood exports to South Korea last year, with revenue from shrimp accounting for $250 million.
The main seafood items of Viet Nam exported to South Korea are shrimp, octopus, squid, pangasius and other fish.
Korea imported 77,000 metric tonnes of shrimp in 2015, with Viet Nam being the largest supplier of 30,000 metric tonnes.
Dug-Boo has encouraged Vietnamese seafood exporters of shrimp, tilapia, pangasius and other products to take part in BISFE, the largest international seafood trade exhibition in Korea.
The organisers will apply special preferential prices for Vietnamese exporters who register to participate in the show via the Viet Nam Association of Seafood Exporters and Producers (VASEP), he said.
"We will strive to do our best to introduce potential importers to Vietnamese exhibitors at BISFE to create conditions for the two sides to develop business connections and come up with a trade agreement right at the fair," he said.
To be held at the BEXCO Exhibition Centre I in Busan from October 27-29, the exhibition will feature 850 booths of 400 exhibitors from 30 countries.
Japanese businesses prioritize investment in Vietnam
Around 53.5% of the surveyed Japanese businesses chose Vietnam as their investment destination in ASEAN, up 4.9% over last year, according to a survey conducted by Mizuho Research Institute on 1,100 businesses.
Being a member of Trans-Pacific Partnership (TPP) Agreement is one of Vietnam’s advantages, said Japanese investors.
Relating to plans to expand investment in 12 TPP member countries, 12.8% of the surveyed businesses chose Vietnam, 10.7% chose Japan while 4.9% chose the US.
Another survey conducted by the Japan External Trade Organization (JETRO) early this year showed that more than 60% Japanese businesses operating in Vietnam planned to expand their investment and considered it an important investment destination.
Japanese businesses named low labour cost, social and political stability, good investment environment and growth ability as Vietnam’s advantages.
The survey also said that Japanese businesses put a high hope on the establishment of the ASEAN Economic Community (AEC) with simplification of customs procedures, tax removal and unity in certificate of origin (C/O).
JETRO conducted the survey on 1,027 Japanese businesses, 364 of which invested in manufacturing and 193 others in non-manufacturing industries and services in Vietnam.
Around 58.8% of the surveyed businesses said they gained profits, down 3.5% while 26.2% suffered loss, up 1.3%, according to the survey.
In general, Vietnam has remained a trusted destination of Japanese investors. Japan’s investment in Vietnam will help the country improve its competitiveness in fields requiring highly qualified workers like engineering, manufacturing and electronics.
Rebounding market sees high sales in premium properties
As the Vietnamese residential property market picks up, buyers are spending millions of dollars snapping up luxury properties.
Timo Schmidt, head of international sales and leasing at Savills Vietnam told VIR that “While we are seeing more launches of high-end apartments, particularly in the central business district and exclusive residential neighbourhoods such as Thao Dien, the luxury segment in the Ho Chi Minh City property market is still undersupplied.”
“The true luxury segment is only starting to develop, where we are seeing developers put an emphasis on outstanding location, design, and the uniqueness of a project,” Timo said.
According to him, all luxury projects in Ho Chi Minh City are now located very close to the river and offer magnificent views.
Also, developers have implemented a combination of privacy and space interspersed with well-designed and well-constructed buildings to attract luxury home buyers.
There has been plenty of fresh supply in the Grade A segment. Still, the luxury market still only comprises a handful of developments meeting the high standards of premium living.
On the other hand, there is significant demand for luxury residences from both Vietnamese and foreign buyers, so take-up rates are very healthy.
Sharing the same view, David Clarkin, joint managing director of Sapphire Vietnam, said that the Vietnamese residential property market began to rebound two years ago, so this firm launched its up-market residential project last year.
“Thanks to improved market sentiment, we recorded good absorption rates at our commercial and residential projects,” Clarkin said.
In particular, Sapphire’s Holm Residence in district 2’s Thao Dien area has sold half of the 29 luxury riverfront villas with prices ranging from US$1.7 million to US$5.3 million”.
According to Clarkin, 2016 will see continued growth in the luxury segment as new supply is matched by continuing demand. The demand is mostly locally driven as buyers have increased confidence in investments as well as in lifestyle options.
Foreign buyers will also continue to take advantage of the new laws as Vietnam remains a relatively inexpensive investment option with a strong growth outlook.
According to Savills Vietnam, luxury projects are increasingly attractive to homebuyers. The Nassim, a boutique development by Hongkong Land and SonKim Land, has seen tremendous sales, particularly from foreign investors and house hunters.
Nearly half of all transactions to date were made by foreigners or their Vietnamese spouses.
Meanwhile, sales at Diamond Island have picked up traction over the past six months. Developed by Kazakhstan-based Kusto Home, Diamond Island is a luxury project with resort characteristics in Ho Chi Minh City.
Once fully finished in 2018, it will have 888 apartments and 20 sky villas spread out over an eight-hectare site.
Vietnam keeps watchful eye on inflation after fuel hikes
Prime Minister Nguyen Xuan Phuc has ordered electricity prices and toll fees to be kept stable this year to control inflation and allow the economy to grow, according to the government website.
Consumer prices in May had the biggest month-on-month increase since 2012.
At a government meeting on June 2, the newly-elected PM also demanded his cabinet keep close watch on fuel prices, which are rebounding following the recovery in global oil prices. Gas prices in Vietnam were increased twice last month, up nearly 6% in total.
A report by the Ministry of Planning and Investment showed crude prices rose 80% in the past five months and will likely continue to go up for the rest of the year. Since March, local pump prices have seen four consecutive hikes.
Phuc, who also ordered his cabinet to stabilize food prices, said the Vietnamese government will maintain a price cap on formula products for babies under six years old until the fourth quarter.
That means Vietnam will unlikely lift the ceiling it applied two years ago in July, as promised by Finance Minister Dinh Tien Dung when he met with the US Trade Representative Michael Froman last month.
Vietnam's consumer price index rose 0.54% from April. Compared to December, it was up 1.88%, according to official data.
The government expects inflation to be around 5% this year, after a record low of 0.63% last year.
VIB offers preferential rate for business' auto loans
Vietnam International Bank (VIB) is offering a preferential interest rate of 7.15 per cent for business' auto loans in the first six months.
Following the bank's new campaign, which runs from now until the end of September, enterprises can take a loan for a maximum term of 60 months and borrow up to 80 per cent of the vehicle's value, the bank said on Wednesday.
Previously in May, VIB announced it would provide enterprises in the textile and garment sector with soft loans and 20 per cent reduction in trade financing costs.
This practical programme implemented by VIB was in response to calls from the prime minister and the State Bank of Viet Nam to reduce interest rates for businesses.
HNX releases financial data for first time
The Ha Noi Stock Exchange (HNX) on June 1 released detailed financial data related to its business performance for the first time after being in operation for 11 years.
According to the report, HNX's revenue last year reached VND366 billion (US$16.26 million), down 15 per cent against the previous year, due to a decline in share value traded on the exchange. Last year, the total value of shares traded on the HNX fell by 32.32 per cent to VND135 trillion.
It is reported that HNX's largest source of revenue worth VND224 billion came from share transaction fees, which accounted for 61 per cent of the exchange's total revenue. Compared with the previous year, the earnings from the fees declined 13 per cent. Currently, fees paid to HNX are 0.03 per cent of the total share value for listed shares and 0.02 per cent for unlisted shares on UPCom.
Another source of revenue for HNX was from the auction of Government bonds. Last year, G-bond auctions via HNX rose 39.29 per cent against the previous year to 312 and total value of G-bonds bid successfully via the exchange also increased 3.67 per cent to VND250 billion. However, this earning source brought the exchange VND91.25 billion last year, down 27 per cent against the previous year.
The exchange's after tax profit was reported at VND146 billion, down 25 per cent against the previous year.
By the end of 2015, HNX's total asset value was VND1.514 trillion, of which VND216 billion was in cash. The exchange also reported deposits worth VND945 billion at banks.