BUSINESS IN BRIEF 23/12 VN mangosteen hit US and Australian supermarket shelves   Vietnam mangosteens and lychees have been licenced to enter the US and Australia. This is a good sign for the fruit and vegetable sector. mangosteen hit us and australian supermarket shelves  hinh 0 Meanwhile, the number of dragon fruit, rambutan, lychee and mangosteen shipments to demanding markets like the US, Japan and the Republic of Korea is on the increase. According to statistics released by the Ministry of Agriculture and Rural Development, fruit and vegetable exports hit US$186 million in November, bringing the total export value in 11 months to US$2.178 million. China is the largest consumer of Vietnam fruit and vegetables, accounting for 70.4% of Vietnam’s total export revenue, trailed by the RoK (3.6%), the US (3.4%) and Japan (3.1%). However, Vietnam also spent US$814 million importing fruits and vegetables in 11 months, up 44% against the same period last year. Fruit and vegetable exports are expected to reach US$2.5-2.6 billion this year. Vietnam detects banned chemicals in 134 batches of catfish exports The reputation of some exporters is on the line, with one already banned by the European Union. Inspectors have detected banned antibiotics and pathogenic microorganisms in 134 batches of catfish meant for overseas markets, according to the National Fisheries Quality Assurance Department. The department did not reveal the total volume and value of these batches, which were pending for export documents. Earlier, between January and November, 11 catfish batches of Vietnamese enterprises were returned due to excessive content of chemicals. Most of the batches were on their way to the U.S. and European countries. One exporter has already been banned by the European Union while another company faced a similar sanction from the Brazilian government. Australia, Vietnam’s largest shrimp importer, has also imposed a rule that requires all seafood shipments from Vietnam to be checked for biological toxins and bacteria. Last year, Vietnam earned US$6.6 billion from seafood exports. The country's target of US$8 billion for 2016 is now a little too high considering that exports in the first 11 months only reached US$6.4 billion, according to latest customs data. Clothiers face hurdles to benefit from Vietnam-EU free trade pact A free trade agreement expected to come into force by 2018 holds great potential to boost retail sales of clothing, footwear and textiles produced in Vietnam in the 28 member countries of the EU, say trade experts. Speaking at a recent forum in Hanoi sponsored by the French Chamber of Commerce and Industry, the experts and business leaders in attendance from both France and Vietnam urged for speedy ratification and entry into force of the agreement. The retail sector in France has an acute interest in Vietnam, said Guillame Crouzet of the Chamber at the conference. French retailers are interested in Vietnam as a growth market for retail establishments, he noted, and they also view the Southeast Asian country asone of their top three largest sources of clothing, footwear and textiles. In addition, they view Vietnam as a good source of fast moving consumer goods. EU retailimports of consumer goods are set to get a possible boost from the elimination of tariffs under the free trade accord, which could lower their import tariffs, raising Vietnamese competitiveness with Chinese goods, he added. Nguyen Thi Tuyet Mai, adirector of the Vietnam Textile and Garment Association in turn also noted the decrease in tariffs potentially could boost Vietnamese competitiveness with China as well as neighbouring Cambodia and Myanmar. Tariffs levied on Vietnamese imports of consumer goods currently average 12% as compared to no tax levy on comparable imports from China, Cambodia and Myanmar, Ms Mai noted, so all things being equal this should be beneficial to trade. However, Ms Mai cautioned, the full elimination of the tariffs will be staged over seven years. There are also strict rules of origin conditions imposed for goods such as garments that will require the use of fabrics produced in Vietnam, with the only exception being of those produced in the Republic of Korea (ROK), another free trade partner of the EU. Given that many Vietnamese companies source their raw materials and intermediary goods from China, they will not gain any advantage from tariff reductions unless they change their operating methods and import these items from the ROK or another qualifying trade partner. Another consideration is the fact that many Vietnamese producers will not benefit because they do not pay tariffs in the first place.  Many small companies in the industry sell their goods cash on delivery in Vietnam (most often referred to as FOB shipping point). Therefore, they pay no tariffs, and will obviously not receive any benefit, underscored Ms Mai. Neither will the EU buyer receive any tariff reduction advantage because they are not the producer and therefore do not qualify for such relief. If Vietnamese producers change their method of selling to ship product to the EU and have the buyer take title to the goods at the destination (technically referred to FOB destination) then both parties would benefit from the tariff reductions. The Vietnamese producer would not pay tariffs in this scenario because they are the manufacturer and importer into the EU and no tax would be levied on the buyer because title passes in the EU. This change is not as easy as it sounds and may in many cases not be practical, Ms Mai emphasized, because shipping costs, insurance against risk of loss or damage while the goods are in transit, inspections upon receipt of goods and payment methods all become more complicated. But this is obviously a viable and in many cases a preferable option for medium sized or larger domestic manufacturers. It could also be practical for all businesses if there was an industry wide revamp. Another alternative is for Vietnamese producers to change the status of their contracts from that of being a contract manufacturer to that of becoming an outsource contractor for the EU buyer. This is a common mode of doing business in countries like Taiwan. Technically the term original design manufacturer (ODM) or original equipment manufacturing (OEM) are used, but substantively they are outsourcing contracts.  It is widely estimated that Taiwan manufacturers produce 95% of all their computer components and parts using this type of contract, and in many instances, do so specifically to take advantage of reduced tariffs and other benefits of trade agreements. In a nutshell, a ODM contractor is a private label contractor making branded products that belong to others.  The Vietnamese brand goes away, as well as the Made-in-Vietnam label. A Vietnamese ODM producer would be responsible for designing and building a product as per another company’s specifications. They do not design and produce a product per their own specifications. An OEM would refer to a Vietnamese company that is responsible for designing and building a product per its own specifications, and then selling the product to another company in the EU that is responsible for its distribution. Like the ODM the Vietnamese brand and the Made-in-Vietnam label go away and the products are marketed by the buyer under its own brand name. Both OEM and ODM can be quite confusing and local companies must take great care and time to understand them thoroughly, said Ms Mai. However, the point that Ms Mai was trying to stress was that the clothing, footwear and textiles segments of the economy will not automatically benefit from the Vietnam-EU free trade pact. If they do nothing there will most likely not be any advantages at all. Domestic companies must seize the initiative and restructure to gain the fullest advantage from the agreement and overcome the obstacles it presents to elevate their global competitiveness in the high-end segments of the industries. The Vietnam-EU free trade pact was concluded on December 2, 2015. Final signature is expected in early 2017 with entry into force by 2018. The agreement will eliminate 99.8% of duties on trade products gradually over a 10-year period. Combined commercial trade between Vietnam and the EU was over US$47 billion in 2015 and is set to increase this year. Ms Mai noted that local businesses need to focus on training high skilled workers, who are capable to do complex jobs, to produce high-end products. Rubber industry expects export recovery this year   Rubber exports are expected to reach 1.2-1.25 million tonnes of this year, a year-on-year increase of 5.5-10%, according to the Vietnam Rubber Association. Speaking at a press conference to introduce the fifth International Exhibition on Rubber Industry and Tyre Manufacturing (Rubber and Tyre Vietnam) in HCM City on Tuesday, Vo Hoang An, VRA’s deputy chairman and general secretary, said the country had exported 1.12 million tonnes of raw rubber worth US$1.45 billion in the first 11 months. The global market faces severe difficulties caused by a relentless decline in prices in recent years as supply outstrips demand, he said. Vietnam ranks third globally in output and fourth in exports, he said.  Production is expected to top 1.04 million tonnes this year. Tran Thi Thuy Hoa, head of VRA’s advisory board for rubber development, said many countries have reduced rubber production by reducing exploitation and chopping down rubber trees for replanting or growing other trees. The lower output has pushed up rubber prices in the last two months, bringing hope to export firms and farmers, she said. According to An, the fall in prices has benefited rubber processing firms, whose exports of rubber products are going up year after year. Vietnam earned $1.42 billion from export of products such as tyres, rubber accessories and conveyors last year, accounting for 39% of the industry’s total export revenues, he said. Tyre exports are growing at 14% a year, and reached $523.4 million last year, he said. Nguyen Quoc Anh, chairman of the Rubber-Plastic Manufacturers Association, said Vietnam’s exports of rubber products are worth just a tenth of Thailand or Malaysia. Vietnamese firms should invest more in processing technologies and seek new buyers for their products, he said, adding that the Rubber and Tyre Vietnam, an international exhibition, would help them get up-to-date on technologies and products and build new relationships. To be held at the Saigon Exhibition and Convention Centre from June 13 to 15 next year, the exhibition will see more than 80 local and international exhibitors displaying their latest equipment and technologies and products and services. There would be conferences and seminars at the three-day exhibition, according to the Minh Vi Exhibition and Advertisement Services Co., Ltd, one of the organizers. A rubber sourcing fair will be held for the first time to enable Vietnamese tyre and rubber producers and foreign buyers to compare notes and explore business opportunities. Binh Dinh speeding up investment licensing procedures In 2016, the central province of Binh Dinh granted investment certificates to eight foreign invested projects with the total registered capital of US$30.16 million, and approved 32 others worth US$8.511 billion. What made Binh Dinh so attractive to investors in the past year? Last year, Binh Dinh set its own record by granting an investment certificate to VND4 trillion (US$174 million) mega project FLC Nhon Ly within less than a single month.  Talking about this, Nguyen Bay, director of the Binh Dinh Investment Promotion Centre (IPC), emphasised that, “FLC Group visited Binh Dinh to attend the Conference on Tourism Investment Promotion in Quy Nhon City on March 30, 2015. During the tea break of the conference, representatives of FLC introduced and discussed several projects that the group was interesed in to the local authorities. FLC then received all information they needed for these projects.” “FLC sent a team of experts to a field trip 14 days later. After that, the Binh Dinh People’s Committee, FLC, and Bank for Industry and Development of Vietnam signed the trilateral cooperation agreement on April 21, 2015. It took FLC only 24 days after visiting Binh Dinh to receive its investment certificate.” This record, however, was broken in August 2016 when Binh Dinh granted an investment certificate to a foreign invested organic farming project, worth up to VND650 million (US$28,260) in a single day.  This project, funded by Kei’s Company Ltd. (Japan), is expected to be carried out in the province’s An Nhon Commune. According to Nguyen Bay, in order to speed up the procedures, the Binh Dinh Department of Planning and Investment requested the Binh Dinh Investment Promotion Centre to directly give direction and advice, as well as support through the procedures to grant the investment certificate. Besides, director of the Business Registration Office was also asked to give careful instructions to Kei’s on enterprise establishment. He asserted that, “This is an effort of the province and the Department of Planning and Investment to reform and simplify administrative procedures, as well as deal with impediments in time to boost the image of the province as an active investment environment.” Thanks to the ongoing administrative reform in Binh Dinh, plenty of new projects have flown into the province, along with many others raising capital.  Notable projects include FLC Nhon Ly, Casa Marina Island of Truong Thanh Quy Nhon Company in Hon Dat and Hon Ngang islands, Bai Xep International Resort, and Kien Hoang’s Xuan Dieu five-star hotel.    Binh Dinh also became a compelling investment environment to prestigious foreign investors, including Dainichi Techno Green (Japan) and SBH Hotels & Resorts (Spain). In 2017, to maintain this reputation, in addition to administrative reforms, Binh Dinh authorities will boost the dialogue with businesses to understand their demands and difficulties to improve the business climate, enhancing the socio-economic growth of the province. Moreover, the Binh Dinh Department of Planning and Investment is drafting a proposal to apply the “one-stop shop” model. Currently, the local authorities await the submission of the draft for approval. E-regulation system is also being carried out at the same time.  This portal is receiving the finishing touches and will be full of foreign investment procedures so that investors can have access and learn more about investment procedures in Binh Dinh. Nguyen Bay emphasised that Binh Dinh wishes to keep investments coming to Nhon Hoi Economic Zone and other industrial zones in the province, styling them out to be the core of Binh Dinh’s growing industry, tourism services, and urban development.  “Importantly, we aim to create the foundations for a fast pace of development in the central region by 2020,” he said. Business leaders from Vietnam, Japan hold trade conference Business leaders and government officials from the public and private sectors of Vietnam and Japan’s Toyama Prefecture held a trade and investment conference on December 21 in Hanoi. Toyama Prefecture, with its lively manufacturing segment, is a favoured trade partner for Vietnam businesses, said Vu Tien Loc, chair of Vietnam Chamber of Commerce and Industry (VCCI) at the conference. It’s geographical location, about two hours from Tokyo by taking Japan’s high-speed Shinkansen railway network and ready access to Russia, which it faces across the Sea of Japan, offer Vietnamese businesses many opportunities. In fact, Russia has for many years been a major trade partner of the Prefecture, dating back to the late nineteenth century, said Mr Loc, adding that it could serve as a springboard for Vietnam businesses to enhance trade with Russia. At the meeting, those in attendance discussed the status of the roughly 40 manufacturers from the Japanese prefecture that are operating in Vietnam and solutions to work out the problems they are having. They also discussed many opportunities for boosting commercial trade between the two economies as well as the prospects for the Trans Pacific Partnership that now appear to be stalled. Maritime Bank supports RoK SMEs in Vietnam Maritime Bank has signed an agreement with the Korea Federation of SMEs (KBIZ) under which the bank will support operation of KBIZ member firms in Vietnam. Under the deal signed in mid-December in HCM City, Maritime Bank is now a strategic partner and an advisor of KBIZ. The two sides agreed on bilateral and long term cooperation, not only to promote business activities but also to draft out business strategies beneficial to both sides and to RoK small- and medium-sized enterprises (SMEs). The bank will offer a comprehensive financial service package for enterprises and personal financial packages for individuals working for KBIZ member firms. Meanwhile, KBIZ can access Maritime Bank’s extensive customer networks while it stands ready to introduce the Vietnamese bank to the federation’s members.  In 2016, Maritime Bank has signed deals on provision of specifically designed services for numerous international partners, including Vietnam Logistics Association (VLA), Lotte Mart, Prudential and the Business Networking and Referrals (BNI).  Taiwanese firm builds workshops in Vinh Phuc Fuhua Co., Ltd of Taiwan (China) on December 21 commenced the construction of 17 workshops for rent in the Binh Xuyen 2 Industrial Park in the northern province of Vinh Phuc.  As a wholly foreign-owned firm, Fuhua specialises in building industrial workshops for sale or for rent, and repairing workshops and other architectural works.  The provincial management board of industrial parks licensed the firm to invest 28.5 million USD in a 29-workshop project covering a total area of 18.8 ha in the Binh Xuyen 2 Industrial Park. The first phase of building 12 workshops was completed in July 2015 and 11 of them have been sold and leased, contributing 86.2 billion VND (nearly 3.8 million USD) to the locality’s budget. Yao Zi Yan, Fuhua General Director, said in this second phase, his firm will pour over 10 million USD into constructing 17 facilities, towards meeting the increasing demand of businesses. These workshops are scheduled to be completed and put into use by the end of March next year.  According to the provincial management board of industrial parks, IPs in Vinh Phuc attracted 19 new foreign-invested projects in the last 11 months.  The local authorities have recently granted an investment certificate for Japan’s Sumitomo Corporation to develop infrastructure of the 213-hectare Thang Long Vinh Phuc industrial park, which is expected to attract 79 investment projects from Japan with a total registered capital of 1.5 billion USD. In a bid to lure more investments, the province has paid heed to improving local business climate, attracting resources for development while building essential infrastructure and enhancing vocational training quality. Mapping out plan for urban development and facilitating administrative procedures for investors are also given top priority. Furthermore, the province has held talks with FDI businesses to promptly tackle their difficulties. Mozambique wants to learn from VN’s cashew development experience Mozambique wants to learn from Vietnam experience in developing the cashew industry, Director of the Mozambique National Cashew Institute (INCAJU) IlidioAfonso Jose Bande said at a recent workshop. The workshop on bilateral cooperation in the cashew industry was held on December 19-20 by the Vietnamese Embassy in Mozambique, INCAJU, and Mozambique’s Ministry of Agriculture and Food Security and Cashew Industry Association (AICAJU). It also drew representatives from AICAJU member businesses, cashew growing provinces such as Gaza, Nampula, Zambezia and Cabo Delgado, along with Vietnamese entrepreneurs. The INCAJU Director said cashew plays an important role in Mozambique’s agricultural development and food security strategy. He expressed admiration at the considerable development of Vietnam’s cashew industry. Mozambique wants Vietnam to transfer technology and help train personnel in the field, he said, calling on Vietnamese businesses to grow and invest in cashew processing lines to help his country boost exports. Briefing participants about Vietnam’s cashew industry, Vietnamese Ambassador to Mozambique Nguyen Van Trung emphasised that after only more than 15 years, Vietnam has become the No. 1 cashew nut exporter in the world with lots of experience and advanced techniques in planting, harvesting and processing cashew. More and more Vietnamese enterprises are interested in the cashew industry in Mozambique and seek partnership and investment opportunities there, he noted. He asked Vietnamese firms to point out obstacles to their business in the African nation and asked local authorised agencies to tackle those problems and facilitate their operations, thereby contributing to the local cashew industry’s expansion. During the time of the Portuguese colonialism, Mozambique was the biggest cashew grower and exporter in Africa with an output of over 200,000 tonnes per year between 1973 and 1975. Its Government has approved a master plan for the cashew industry development until 2020, aiming to turn cashew into one of the key exports in the near future. However, the country is facing certain difficulties as a lack of modern planting and processing technologies and cashew products’ low quality. Its annual cashew output now is just about 100,000 tonnes with productivity of under 1 tonnes per hectare. Less than 50 percent of the output is shipped abroad. During the workshop, Vietnamese and Mozambique cashew companies discussed the local legal framework for raw cashew shipment, cooperation in cashew planting, and investment in processing. Participants also visited some cashew factories and had a working session with Mozambique’s Ministry of Industry and Trade to solve issues facing Vietnamese firms in exporting raw cashew to Vietnam. Conference talks Vietnam-US future trade prospects With or without the Trans Pacific Partnership agreement, trade between Vietnam and the US would continue to rise, a conference heard in HCM City on December 20. Speaking at “Vietnam-US Trade Interaction after 2016,” Le Thanh Liem, deputy chairman of the municipal People’s Committee, said the two countries enjoyed average trade growth of more than 19 percent a year for the past 10 years. The US is Vietnam’s largest export market, he said. According to Mary Tarnowka, the US consul general in the city, bilateral trade nearly tripled in the last eight years and now tops 45 billion USD. US exports to Vietnam surged 44 percent in the first half of this year, making Vietnam the fastest growing export market for the US. “The US is encouraged by Vietnam’s recent resolution on international economic integration, reaffirming Vietnam’s intention to continue its economic reforms and further open its economy, with or without TPP. “This resolution is an important signal to trading partners that Vietnam is moving to establish a level playing field for US companies looking to invest and compete in Vietnam.” These reforms will promote fair, transparent and predictable regulatory systems that enable innovation, attract trade and investment and promote Vietnam’s continued integration into the regional and global supply chains, she said. "Vietnam is already the 11th largest export market for US agricultural products," she said. “We can continue to promote these exports. We can also take steps to meet Vietnam’s growing demand for state of the art agricultural technology and equipment, as the country strives to improve food safety and develop its food processing industry.” She also spoke about co-operation between the two countries in other sectors like education and travel as well as US support for Vietnam’s preparations for the WTO Trade Facilitation Agreement and others. Le Quoc An, former president of the Vietnam Textile and Apparel Association, said the TPP would enable Vietnamese firms to boost exports to the US. “However, there is no problem if there is no TPP. Our exports to the US were still very good [in the past] without the TPP.” He also urged businesses to make more efforts to offer products and services of the best quality to global consumers, especially those in the US, to boost their exports. Delegates agreed that whoever is president of the US, Vietnam would continue to develop and integrate. Tran Ngoc Chau, Vice President of the Vietnam-US Friendship Association’s HCM City chapter, said: “We believe trade between Vietnam and US will reach 57 billion USD in the next five years, with exports from the US doubling from now, whether the TPP comes into being or not.” Liem said HCM City has welcomed many large US companies seeking opportunities arising from the country’s deeper integration. “The US currently ranks 11th among countries and territories investing in Vietnam, and I hope the US will soon become the city’s largest foreign investor.” Le Hoai Quoc, Director of the Saigon Hi-Tech Park, the largest technology cluster in Vietnam, was optimistic that US tech companies like Intel would continue to grow their business in Vietnam irrespective of the TPP. “Intel is increasing its products and volumes of productions in the high-tech zone. In 2016 its exports from Vietnam will reach 4 billion USD.” Organised by the Vietnam-US Friendship Association, the conference attracted around 200 delegates, including diplomats, policy makers, entrepreneurs and economists. ABD to help build HCM City’s third ring road The Asian Development Bank (ADB) signed an agreement on December 21 to provide transaction advisory services to the Ministry of Transport (MOT) for Ho Chi Minh City’s Third Ring Road project. The document was signed by Nguyen Ngoc Dong, MOT Deputy Minister of Transport and Eric Sidgwick, ADB’s Country Director for Vietnam.  Under the agreement, ADB’s Public-Private Partnership Office will support the MOT in the development of a bankable public-private partnership (PPP) structure for the project to enable leveraging of private investments.  This assistance will complement the government's ongoing project preparation activities supported by ADB and thereby promote optimal use of public and private sector investment. “There is a need to increasingly mobilise resources from private sector and better coordinate project preparation to develop bankable PPP projects in Vietnam,” said Sidgwick. “A greater role for PPPs should be considered for infrastructure projects and impediments to the development of PPP transactions should continue to be identified and addressed.” Ho Chi Minh City is the country’s major economic hub, serving key industries and growing population. However, roads around the city are heavily congested, travel speeds are slowing and, as a result, transport costs are rising.  The third ring road, to be constructed at a radius of 25 kilometers from the city centre, will facilitate the diversion of through traffic and reduce traffic congestion in HCM City.  ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. It was established in 1966 and is owned by 67 members with 48 from the region. In 2015, ADB assistance totaled 27.2 billion USD, including cofinancing of 10.7 billion USD. Japanese prefecture keen to cooperate with Vietnam A delegation of Toyama prefecture of Japan expressed wish to expand business cooperation with Vietnam at a seminar in Hanoi on December 21. Addressing the seminar, Chairman of Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc said that along with many encouraging policies and mechanism to attract foreign investment, Vietnam is regarded as a country with the most stable politics and society in Southeast Asia, winning the trust of investors. He affirmed that the Vietnamese Government, the VCCI, and local authorities are committed to continuously improving business and investment environment. Toyama Governor Takakazu Ishii said that Toyama is Japan’s leading locality in chemicals - pharmaceuticals, electrical and support industries. He said about 40 businesses of Toyama prefecture have invested in Vietnam and the figure is hoped to increase in the future. Toyama prefecture in Honshu Island is known for its mechanical and pharmaceutical products, electronic components as well as industrial waste treatment technology. Sacomreal-S opens office in Hanoi The Sai Gon Thuong Tin Real Estate Trading and Service One-Member Limited Liability Company (Sacomreal-S), a real-estate transaction company, has opened a representative office in Hanoi at the Royal City Trade Centre in Thanh Xuan district. The company said the office opening would help expand its market and help introduce products of its mother company, the Sai Gon Thuong Tin Real Estate Joint-Stock Company (Sacomreal), to customers in the northern region, especially in Hanoi. To win more market share, the company has announced a strategic partnership with Max Vietnam Joint-Stock Company (MaxLand), which will distribute key products in 2017. Pham Dien Trung, chairman of Sacomreal-S, said the company chose Maxland because of its high prestige and its role as a distributor for the projects Cocobay Da Nang, Mon Bay Ha Long, Vinhomes Gardenia and Vinhomes Dragon Bay. On the occasion of the opening, many promotions are being offered by the company. Sacomreal debuted Sacomreal-S in 2008 as a successor to its trading department. HCM City to host 2017 Rubber & Tyre Expo The fifth Rubber & Tyre international expo will take place in Ho Chi Minh City from June 13-15, 2017. The event will be held by the Vietnam Rubber Association (VRA), HCM City Rubber Plastic Manufacturers Association, and Minh Vi Exhibition & Advertisement Service Co., Ltd (VEAS). Speaking at a press conference to introduce the event in HCM City on December 20, VRA Vice Chairman cum Secretary General Vo Hoang An said the expo aims to support rubber businesses to seek cooperation and investment opportunities as well as expand export markets. The Rubber & Tyre VietNam 2017 is expected to welcome more than 80 businesses and around 2,000 visitors.  On display are various rubber and tyre products, equipment and technologies.  Thematic workshops will be held as part of the event. A highlight of next year’s expo is the establishment of the rubber sourcing fair between Vietnamese rubber and tyre manufacturers and foreign purchasers. The expo will take place in conjunction with the Paper Vietnam 2017 and Coatings Expo Vietnam 2017. In 2015, Vietnam exported rubber and tyre products worth 1.42 billion USD and 523 million USD respectively. Intensive Sulfadiazine check required for Japan-bound shrimps The National Agro-Forestry- Fisheries Quality Assurance Department issued a document on December 20 requesting seafood processors to strengthen their checks for Sulfadiazine in shrimps to be shipped to Japan.  Accordingly, the agency requested seafood exporters to keep themselves updated on Japanese regulations and proactively monitor Sulfadiazine limit (no more than 0.01 ppm) according to Hazard Analysis and Critical Control Points (HACCP). Those receiving warnings for their products are must quickly investigate the cause behind the warnings and take proper actions to address the issues, and report to the agency to inform the Japanese side. According to the Department, it received information from the Vietnam Trade Office in Japan, Japan’s Ministry of Health, and the Labour and Welfare relating to the examination of Vietnamese seafood products exported to Japan. The Japan side said it still found Sulfadiazine in Vietnamese shrimp products, and have decided to raise checks for Sulfadiazine in Vietnamese shrimp products from 30 percent of batches to 100 percent from December 6, 2016. The Japanese Health Ministry requested Vietnam to accelerate its supervision of the issue and keep the Japanese side informed. EU trade pact to generate new momentum for Vietnam The upcoming free trade agreement between Vietnam and the European Union (EVFTA) will open new opportunities for Vietnam to access modern technologies and learn management skills, Deputy Industry and Trade Minister Tran Quoc Khanh said at a conference in Hanoi on December 20. The conference, organised by the Ministry and Industry and Trade and the European Trade Policy and Investment Support Project (EU-MUTRAP), was aimed at providing information on industrial sectors which have potential for investors, as well as the expected investment trends of European businesses once the EVFTA takes effect. "The EU is one of Vietnam’s most important trade partners, and will be more so once the EVFTA, scheduled to be signed in 2017, takes effect in 2018," Khanh said. “EVFTA is expected to create a momentum to promote investment and trade between the two parties,” Khanh said. Accordingly, the total import–export turnover between Vietnam and the EU is expected to increase by around 50 percent in the first years after the agreement takes effects. Nearly 40 percent of European firms in Vietnam plan to increase their investment in the upcoming years. He said the agreement ensures benefits for both Vietnam and EU. The pact facilitates trade, services and investment, as well as new approaches to protectionism and investment disputes. The agreement is considered the top commitment which Vietnam has reached in FTAs so far. “With its high quality, EVFTA is expected to be an important momentum for trade promotion between Vietnam and the EU, especially for key Vietnamese products, such as garment and textile, shoes, agricultural products and for European goods such as equipment, auto and alcohol.  Bui Huy Son, Director of the ministry’s Trade Promotion Department, said the EU has 1,089 projects with a total registered capital of 23.16 billion USD, accounting for 8 percent of the total registered capital in Vietnam. EU investors are particularly interested in manufacturing, real estate trading and electricity distribution, he added.  “EVFTA is expected to attract more investment from the EU to Vietnam with new technologies and transfer in areas which the country has committed to open, such as garment and textile, leather shoes and wood production,” Son said. He also suggested that local firms carefully prepare, in co-operation with foreign investors, to welcome investment inflows, absorb new technologies and management skills. Vietnamese companies could be trusted partners of foreign firms, especially from the EU, he said. Committee set up to fix projects        Prime Minister Nguyen Xuan Phuc has decided to set up a steering committee that will resolve problems with 12 huge projects under the Ministry of Industry and Trade. The committee will be headed by Deputy PM Vuong Dinh Hue and will have members from concerned ministries and sectors. It aims to minimise the risk of losing investment capital and affecting the human and financial resources of the State. Five of the ineffective projects are those picked by the National Assembly deputies during its second session last month. These include Dinh Vu Polyester Fibre Plant; Phuong Nam Pulp Production Plant; Phase 2 expansion of a plant run by Thai Nguyen Iron and Steel Corporation; Dung Quat Bio-Ethanol Plant; and Ninh Binh Nitrogenous Fertiliser Plant. These plants had investment capitals of between VND1.9 trillion (US$83.37 million) and VND12 trillion; the Ninh Binh plant had the highest investment capital. Seven other projects have been added to this list: Ha Bac Nitrogenous Fertiliser Plant; DAP No.2 Lao Cai Fertiliser Production Plant; DAP No.2 Hai Phong Fertiliser Production Plant; Binh Phuoc Ethanol Plant; Phu Tho Ethanol Plant; Dung Quat Shipbuilding Plant; and Quy Sa Mine Project, a joint venture between Lao Cai Mineral Company and its partner. At a meeting held at the Government Office in Ha Noi on Tuesday, Hue said the committee would have to address the issues of these plants and projects, while adhering to Resolution No.5 of the 12th Party Central Committee’s fourth plenary meeting. He asked committee members to study the National Assembly’s resolutions and the Government’s instructions on restructuring State-owned enterprises. The committee must solve the problems resolutely, promptly, systematically and unanimously, ensuring a drastic change in these projects by the end of 2017 and their completion by the end of 2018, the Deputy PM said, adding that the solution would aid the country’s development. All relevant ministries, sectors, businesses and project management boards will have to honestly report the real situation so that the committee can arrive at a practical solution. “The committee will assign concrete tasks and deadlines to every ministry, sector, organisation, unit and individual. These projects will not remain delayed or undeveloped,” Hue said. The committee will check the progress of these projects, assess the situation, estimate the volume of loss, and send its report to the Prime Minister. Projects that have production capability will be restructured in terms of production, human resources and management. Those that cannot be restructured will be auctioned, divested, dissolved or declared bankrupt as per the laws, Hue said. “The State will not use its budget to compensate for losses or support these factories and projects anymore.” He has also asked the auditing agency and inspectors to investigate, define the responsibilities and propose strict action against organisations and individuals who have violated any law. Rubber industry expects export recovery this year      Rubber exports are expected to reach 1.2-1.25 million tonnes of this year, a year-on-year increase of 5.5-10 per cent, according to the Viet Nam Rubber Association. Speaking at a press conference to introduce the fifth International Exhibition on Rubber Industry and Tyre Manufacturing (Rubber and Tyre Vietnam) in HCM City on Tuesday, Vo Hoang An, VRA’s deputy chairman and general secretary, said the country had exported 1.12 million tonnes of raw rubber worth US$1.45 billion in the first 11 months. The global market faces severe difficulties caused by a relentless decline in prices in recent years as supply outstrips demand, he said. Viet Nam ranks third globally in output and fourth in exports, he said. Production is expected to top 1.04 million tonnes this year. Tran Thi Thuy Hoa, head of VRA’s advisory board for rubber development, said many countries have reduced rubber production by reducing exploitation and chopping down rubber trees for replanting or growing other trees. The lower output has pushed up rubber prices in the last two months, bringing hope to export firms and farmers, she said. According to An, the fall in prices has benefited rubber processing firms, whose exports of rubber products are going up year after year. Viet Nam earned $1.42 billion from export of products such as tyres, rubber accessories and conveyors last year, accounting for 39 per cent of the industry’s total export revenues, he said. Tyre exports are growing at 14 per cent a year, and reached $523.4 million last year, he said. Nguyen Quoc Anh, chairman of the Rubber-Plastic Manufacturers Association, said Viet Nam’s exports of rubber products are worth just a tenth of Thailand or Malaysia. Vietnamese firms should invest more in processing technologies and seek new buyers for their products, he said, adding that the Rubber and Tyre Vietnam, an international exhibition, would help them get up-to-date on technologies and products and build new relationships. To be held at the Saigon Exhibition and Convention Centre from June 13 to 15 next year, the exhibition will see more than 80 local and international exhibitors displaying their latest equipment and technologies and products and services. There would be conferences and seminars at the three-day exhibition, according to the Minh Vi Exhibition and Advertisement Services Co., Ltd, one of the organsiers. A rubber sourcing fair will be held for the first time to enable Vietnamese tyre and rubber producers and foreign buyers to compare notes and explore business opportunities.  Ha Tinh shuts down $79 million steel plant      The Van Loi Steel Mill, a VND1.8 trillion (US$ 79 million) steel plant in the central province of Ha Tinh, has been offically closed down due to prolonged financial problems. A member of Ha Tinh Economic Zone’s management board was quoted by Lao Đong (Labour) newspaper as saying on December 20 that they have revoked the project’s investment certificate. Van Loi Steel Mill occupies around 25 hectares of Vung Ang No.1 Economic Zone. It received its investment certificate in 2007, but work at the factory has been suspended for nearly six years now. The plant was supposed to specialise in refining steel and was to have a capacity of 250,000 tonnes per year in the first phase of the project and 500,000 tonnes per year in the second phase. It was scheduled to produce its first batch in August 2010, but because of financial problems, the project got stalled in 2010. Ha Tinh Steel JSC, the investor, admitted that it cannot implement the project as committed. In 2015, Ha Tinh Steel JSC Director Ho Van Dung said the company owed banks money to the tune of more than VND750 billion, and that the machines and equipment imported a decade ago had rusted and were damaged. After Van Loi Steel Mill suspended operations, the VND158 billion Vu Quang steel production factory, which was set up in 2008 to provide iron ore to Van Loi Steel Mill, halted operations in 2012 as the raw steel produced cannot be used. More than 100 workers of the factory lost their jobs then. The Vu Quang factory had begun operations in 2009 and had the capacity to produce 500,000 tonnes per year. Another project in the province - to exploit Thach Khe ore mine, which has the largest reserves in Southeast Asia - has been similarly suspended since 2011 because of capital shortage. The mining project, which kicked off in 2009 and required a total investment of VND10 trillion, was managed by Thach Khe Iron JSC. The mine, with an estimated total reserve of 544 million tonnes of ore, was expected to become a sound supply source for the country in the next five years, producing 10 million tonnes a year. However, two years later, this project ground to a halt, too. Ha Tinh province officials had held a meeting to discuss the matter and prepared documents to submit to the government.  Can Tho licenses U$47 million waste-to-energy plant       Authorities in the Mekong Delta city of Can Tho on December 20 granted an investment certificate to the China Everbright International Company to build a US$47 million waste-to-energy plant. The Thoi Lai solid waste treatment plant will be built on an area of 53ha in Truong Xuan Commune, Thoi Lai District. Construction of the factory is scheduled to kick off in February 2017. Following its completion in February 2018, the facility will be capable of treating 400 tonnes of garbage per day and generating electricity for the national grid. Chen Xiao Ping, director general of China Everbright International, said as one of the leading companies in the field of waste treatment, it currently has 68 waste-to-energy projects with combined capacity of 55,000 tonnes of garbage per day. This is the first project in Viet Nam funded by Everbright, he said, also pledging to make it a key environmentally-friendly project in the Mekong Delta. For his part, Vo Thanh Thong, chairman of the municipal People’s Committee, said Everbright was selected among seven investors after the city sent a delegation on a field trip to observe the company’s projects in China. He urged the investor to abide by Viet Nam’s environmental standards and pledged to facilitate implementation of the project. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR