BUSINESS IN BRIEF 1/1
Viet Capital Bank launches MasterCard debit card
Viet Capital Bank has launched MasterCard debit cards.
Card holders, besides paying for goods and services, can also withdraw cash free of charge at ATMs with the MasterCard logo.
Viet Capital Bank issues the card to customers aged 15 years and above.
To mark the launch, Viet Capital is offering discounts of up to 50 per cent or gifts when shopping or eating at Lotte mart, Nguyen Kim Electronics and many other places.
FDI in City industrial zones halved
Industrial zones in HCM City hope to attract investments worth US$500 million next year, according to the HCM City Export Processing and Industrial Zones Authority.
Exports by companies situated in Industrial parks (IPs) and export processing zones (EPZs) are expected to top $6 billion next year, Tran Cong Khanh, head of the HEPZA office, told a press meeting on December 30.
HEPZA continues to encourage investment in four key industries, including -- mechanical engineering, electronics and IT, chemicals and food processing, and supporting industries -- he said.
To achieve the target, it plans to expand Le Minh Xuan IP and complete the third phase of Hiep Phuoc IP.
It will develop areas set aside for supporting industries in Hiep Phuoc, Le Minh Xuan No.3 and Automotive-Mechanical IPs.
Tran Viet Ha, head of the investment management department, said foreign direct investment halved this year to $255.61 million.
Investments by domestic enterprises were worth VND5.2 trillion ($237.71 million), a year-on-year decrease of 14 per cent, he said.
He attributed the decline to a shift in investment towards high-tech industries instead of labour-intensive sectors, meaning there was a fall in investment in sectors like textiles and footwear.
Exports by enterprises in IPs and EPZs were estimated at $5.86 billion.
A total of 1,385 projects with a combined investment of $9.22 billion, including 535 FDI projects worth $5.41 billion, are operating in IPs and EPZs.
They employ more than 285,700 workers, including 2,346 foreign nationals.
The average Tet (Lunar New Year) bonuses to be paid by domestic and foreign enterprises in IPs and EPZs are respectively VND7 million (US$300) and 6.8 million (US$295), Khanh said.
The highest is VND1 billion (US$43,480) to be paid by a domestic company, he said.
The lowest is VND3.5 million (US$152).
A total of 6,000 workers will also get bus tickets to return home for Tet and gifts.
Challenges face textile sector as cheap labour no longer an advantage
Textiles are often regarded as one of Vietnam’s key export sectors with an average annual growth rate of 15% during 2010-2015.
However, it is also faced with a range of challenges, of which the most recent challenge stems down to labour in the country no longer being as cheap as it once was.
In 2015, though the sector only recorded a growth of more than 10%, total textile exports still reached US$27.5 billion. In 2016, the sector targeted a growth of about 10-15%, with exports expected to reach US$31 billion.
However, market volatility and lower consumer demand around the world has made Vietnam’s textile exports amount to a mere US$28.3 billion, an increase of nearly US$1.5 billion, corresponding with a growth of nearly 5% compared to 2015 – the lowest growth rate since 2008.
Not only that, due to increasingly fierce competition, domestic textile enterprises have faced a range of difficulties in expanding markets and seeking customers, even facing the risk of declining orders due to losing competitive advantages.
According to experts, previously apparel orders constantly poured into Vietnam thanks to its cheap labour competitiveness, however, it is no longer an advantage as labour costs have increased. Inevitably, orders have moved to the lower-cost countries, such as Laos, Cambodia and Myanmar.
One of the major bottlenecks that Vietnam's garment sector is always seeking measures to address is how to get rid of the current situation of out-sourcing with low added value, while avoiding a dependence on imported raw materials (the country still has to import more than 80% of raw materials) in order to control prices and increase competitiveness.
Although the Vietnam National Textile and Garment Group and several major enterprises have invested in spinning, weaving, dyeing and finishing chains, it does not seem enough to meet the needs of thousands of companies specialising in garment exports.
Meanwhile, companies without resources have turned to accepting out-source orders with low cost and quick payback.
On the other hand, it is also difficult to raise the textile industry to a higher level due to competitive factors in labour skills, modern technologies and equipment and diversified products.
Due to limited resources, most domestic companies choose to gradually invest each year. This situation is in contrast compared to FDI as they represent less than 25% of the nearly 7,000 textile enterprises nationwide but account for 70% of the total export capacity.
This shows that the overwhelming advantages of foreign companies over domestic enterprises will only continue to grow if reasonable policies and development direction are not soon formed.
According to the Vietnam Textile and Apparel Association, 2016 is an extremely difficult year for the country's textile industry, with the lowest growth rate since 2008 (the year that Vietnam's garment recorded no export turnover growth due to the global economic crisis) so far.
By 2018, Vietnam's garment industry has been forecast to face many challenges, especially in regards to small and medium-sized enterprises facing the risk of closing down due to poor competitiveness and extremely difficult production conditions.
Many customers have been moving their orders to Cambodia, Myanmar and Laos, countries with tax incentives to export goods to Europe and the US – the two largest export markets for Vietnam’s textile and garment industry.
Therefore, companies need to change production methods towards ODM and OBM models, while reducing costs, increasing productivity, investing in technologies and diversifying products.
The Government and concerned ministries should promote administrative reform and provide reasonable support policies regarding capital, infrastructure, employment, income and health insurance to reassure businesses.
Agriculture sector restructuring prioritized next year
Priority will be given to the restructuring of agriculture next year to ensure higher growth for the sector, the Ministry of Agriculture and Rural Development said in a statement.
The statement came out after a conference recently held in Hanoi to review the agriculture sector’s performance in 2016 and discuss development plans for next year.
Minister Nguyen Xuan Cuong said the sector had made three important achievements this year: growth of 1.2%, export revenue of US$32.1 billion, up 6% against last year, and higher food safety.
The export turnover spike has resulted from a significant rise in exports of major products, including coffee with a 25.5% year-on-year increase, cashew nuts with an 18% improvement, pepper with a 13% surge and seafood with a 6.3% upstick
As for next year, the ministry will focus on developing 10 major products which can register export revenue of over US$1 billion each and key products of each province.
After major and signature products are determined, the ministry will develop specialized cultivation areas and choose key enterprises while the State agencies assigned to manage the production of those products will make financial and technology preparations.
The targets which the ministry set for next year include growth of 2.5-2.8% and export revenue of US$32-32.5 billion.
Attending the conference, Prime Minister Nguyen Xuan Phuc stressed the need to further improve the quality of agricultural products, add more value to them, instead of focusing only on quantity, apply advanced technology to production, and strengthen the capacity to respond to natural disasters.
The policies which obstruct the development of agriculture should be revoked, he was quoted by a Government news website report.
He told the agriculture ministry to work with the Ministry of Natural Resources and Environment and other relevant agencies to make recommendations for amending the Land Law in a way that facilitates the implementation of large-scale farming projects.
The central bank should take policy steps that encourage banks to lend to agricultural investors while the Ministry of Planning and Investment is assigned to find ways to raise funds for agricultural development in the medium-term public investment plan.
Saigon Co.op launches new convenience store brand
The Saigon Union of Trading Cooperatives, or Saigon Co.op, recently launched a brand-new convenience store brand called Co.op Smile.
Although the company formally announced the new store chain on December 28, it has already had 12 Co.op Smile convenience stores in six districts: 4, 11, Binh Thanh, Phu Nhuan, Cu Chi and Hoc Mon.
With the new store brand in place, Saigon Co.op has strengthened its position as the country’s leading retailer.
Its retail systems span across the country, and include Co.opmart supermarkets, Co.opXtra hypermarkets, Co.opFood stores, Ben Thanh Store, Sense City commercial center, SC Vivo City complex, and a TV shopping channel.
Saigon Co.op plans to open eight more Co.op Smile outlets from now towards the end of next month, raising the total to 20. By the end of next year it will have had 200-300 Co.op Smile stores.
Co.op Smile stores, which are 20 to 200 square meters each, are located in both urban and suburban residential areas, and stock 1,500 to 2,000 items each, such as food, cosmetics, clothes, and goods under the price stabilization program.
Lunar New Year bonuses show stark income divide across Vietnam
With rewards for the upcoming Tet holiday ranging from only less than US$5 to a brand new car, it's not going to be an equally happy new year for all.
A real estate company in Hanoi has decided to give its managers each a car worth VND1 billion (US$44,000) for the upcoming Lunar New Year — holiday gifts that will make the bonuses of less than US$5 for some workers in Haiphong much less generous.
The Hanoi company said eight mid-level managers, whose work has contributed to a 20% revenue increase this year, deserve the reward, believed to be the biggest for the Tet holiday so far, the Vietnam News Agency reported.
Vietnam’s labor ministry last month asked cities and provinces to work with businesses over their plans for Tet bonus payouts and report to the authorities.
Tong Van Lai, deputy head of the ministry’s wage department, said only nine cities and provinces have submitted bonus reports for the country's biggest holiday, which is a month away.
A Chinese-owned stationery company in the northern city of Haiphong might be paying the least: VND100,000, or less than US$5.
Ho Chi Minh City’s labor department said the average Tet bonus in the city will be VND8 million a person, based on a survey of more than 1,100 companies. A foreign plastic producer has promised rewards of up to VND500 million.
In the Mekong Delta city of Can Tho, holiday bonus pledges range from VND1.5 million to VND385 million (US$66-US17,000).
The General Statistics Office announced this week that the average income in 2016 has reached US$2,200.
In Vietnam, bonus pay is a matter of agreement between employers and their workers. Businesses are highly encouraged by the government to reward employees based on business performance.
There have been wildcat strikes in previous years where workers protested low or no bonus payments.
Last time Tet bonuses ranged from a meager VND40,000 (US$1.77) to VND624 million (US$27,700).
Both these lowest and highest levels were reported at foreign-invested companies. Some companies offered nothing.
The upcoming Year of the Rooster will begin on January 28. The government has approved a seven-day break for the holiday from January 26 to February 1.
Concern over pre-TET price hikes
The year’s biggest petrol price hike of nearly VND1,000 (4.5 cents) has coupled with unfavourable weather conditions, have triggered worries of price hikes of transportation and goods ahead of the Lunar New Year celebration (TET).
The traditional holiday will fall on the last end-week of January and shopping demand is already on the rise by around 10 % compared to other months.
Preparations have been made to meet the rising demand for goods and services, stabilise prices and prevent price increases. Still, experts forecast that prices, especially of essential goods, will rise starting next week.
According to Vu Vinh Phu, President of the Hanoi Supermarket Association, petrol price hikes would definitely affect other prices, but it would normally take around 15 days to see the impact.
Phú forecast that prices of goods and services would be pushed up by around 5-7 %. However, just a modest part of the increases was caused by petrol price hikes.
In local markets, products such as meat, fruits and vegetables have already registered price increases of 10 to 50 %.
A trader at Binh Dien wholesale market in HCM City said that there was a scarcity of vegetables and fruits due to unfavourable weather conditions in the central region and Da Lat.
According to Nguyen Van Thanh, president of Vietnam Automobile Transport Association, although petrol prices were hiked, transport costs are not adjusted immediately as firms need to calculate the impact. “However, the pressure is there,” Thanh added.
The HCM City Market Watch said petrol price hikes would definitely affect the price of many goods and services. However, prices of essential goods will be kept stable.
Major cities such as Hanoi and HCM City were gearing up for the TET holiday.
In HCM City, firms prepared a total of VND17 trillion (US$759 million) of goods, 20 % higher than the city authority’s plan.
In Hanoi, VND23.5 trillion of goods were prepared, rising by 10 % over the previous year.
The Ministry of Industry and Trade also asked retailers nationwide to ensure adequate goods for the holiday.
Retailers: Keeping pace with accelerating change in 2017
The coming year will be another challenging one for domestic sector retailers as they seek to maintain market share and compete with the growing foreign sector for sales revenue, said experts at a recent business forum in Hanoi.
Dr Luu Duc Hai of the Ministry of Planning and Investment said that based on what has happened in 2016, it could be argued that next year would be even more challenging.
Dr Hai said more aggressive marketing strategies are needed by local companies as they try to carve out a niche in the retail market, adding that he believes the major battlegrounds would shift to online shopping.
Online shopping, said Dr Hai, offers a more cost-effective channel to reach select targeted consumer groups.
The retail sector can also expect to see more intense price competition, in an industry that is already operating on thin gross profit margins.
It therefore becomes critically important for companies to not only channel the right market but effectively manage their resources, particularly in keeping inventory and product mix at optimum levels.
Excessive amounts of inventory have advantages and disadvantages for a business, which makes inventory control a delicate balancing act.
When a company holds a high level of inventory, it ties up business funds that could be used in other areas such as research and development or marketing. It also leads to higher warehousing costs and can lead to quality problems such as degradation and potential obsolescence.
However, not having enough of an item on hand can lead to lost sales from not having an item to fill a customer order and can also lead to customer dissatisfaction and customer loss as they go to a competitor to acquire the product.
Another consideration, said Dr Hai, is that small retailers can obtain a savings when purchasing many products in bulk quantities. Many suppliers give larger discounts to customers who order larger quantities.
Dr Doan Thi Thuy Duong of the Ministry of Planning and Investment in turn agreed that 2017 would be a particularly challenging year for domestic sellers in the country.
Dr Duong said consumer behaviour had changed in 2016, particularly with the advent of online shopping and the implementation of novel online-purchasing models throughout the country.
She noted that major challenges for local retailers would evolve around gaining a better understanding of consumer buying habits and realizing that they are changing at a dramatically fast pace.
The country’s retail markets are moving into the digital age and a whole new era of interactive online marketing is beginning to emerge. It just may be that the key to success of domestic sector companies for 2017 depends upon their ability to tap into this behaviour and cater to it better than their foreign sector counterparts.
Clinging to outdated sales and marketing strategies would most likely not be successful in 2017, she underscored.
Dr Hai noted that complex challenges for retailers lie ahead in the coming year as they struggle to develop differing strategies to target the diversity of target consumer groups.
Not only online shopping is having a significant impact on the retail market, added Dr Hai, but the demographics are changing as more young people, foreign business people and tourists impact the consumer mix.
The increased complexity of the consumer mix complicates marketing activities and it just may be that the most successful companies for 2017 are the ones that can best understand and adapt their company policies.
Lastly, Mr Hai commented that another emerging challenge facing domestic sector retailers is in coping with new payment methods as well as how they deliver products and services to the consumer.
Revolutionizing farming with Israeli technology
Vertical farming, drip irrigation, soil solarisation and similar terms will soon become common terminology in Vietnam agriculture, said Vo Kim Cu, president of the Vietnam Cooperative Alliance.
He made the statement at a signing ceremony on December 30 for a new multi-year contract aimed at bringing Israeli hi-tech farming methods to Vietnamese farmers in hopes of boosting production and farming skills.
It is common knowledge that Israeli farmers are four to five times more productive for produce such as cherry tomatoes, seedless cucumbers, brinjals and coloured capsicums, said Mr Cu, using the same amount of land as their Vietnamese counterparts.
Pursuant to the agreement between the Vietnam Cooperative Alliance, the Israeli Chamber of Industry and Commerce in Southeast Asia and IVA Israel, experts from Israel will regularly visit centres in Vietnam and organize free training sessions for farmers, teaching them – protective agriculture – to increase their crop yields while optimally using fertilizer and water.
In addition, corporates and professionals will also be taught ways to produce quality vegetable seedlings.
The idea is to transfer applied research and technologies to farmers in provinces across the country. Israel has a proven track record with these type contracts, having already entered similar agreements with successful results.
Methods like vertical farming help save space on the ground by growing the crops vertically while drip irrigation saves almost 90% of water. These methods are revolutionary in Vietnam, said Mr Cu.
The Vietnam Cooperative Alliance plans to give effect to these projects in the second quarter of 2017 at priority locations in Lam Dong, Binh Phuoc, the north-western region, the Mekong Delta region and the Central Highlands, he noted.
Productivity jumps 5% for calendar year 2016
Vietnam worker productivity jumped at an annual growth rate of 5% for calendar year 2016 rising by US$193 to US$3,853 per worker aged 15 and over, per figures from the General Statistical Office.
Productivity expanded at the highest rate in industry and construction followed by the service sector and was heavily weighed down by agriculture, which comes as no surprise as low worker productivity is widely recognized.
The increased figures are welcomed news for the economy, said the statistics office and show that significant headway is being made and that as the economy shifts away from agriculture to industry more improvement is in store.
Prime Minister: Vietnam can overcome its economic challenges
As the country marks the end to another tumultuous year for the national economy, that has seen significant challenges to globalization and integration, there has been a lot of reflecting about the past and future.
In this vein, Prime Minister Nguyen Xuan Phuc has delivered a series of speeches outlining the country’s future challenges and introducing solutions on how they might be overcome.
The Prime Minister has said the country’s most immediate challenge over the next decade would be raising productivity to grow the economy. Per capita GDP has been on an upward trajectory over the past four years but growth is slowing.
The country’s annualized growth for 2016 has been estimated at 6.2%, the first slowdown in annual GDP growth since 2012— and well below the 7% growth that had been forecast at the beginning of the year.
Exports, which have averaged annual growth of 12-14% from 2000 to 2015, have been estimated to have slowed to 7.5% for 2016.
The export boost that was expected to have come over the next decade from the Trans-Pacific Partnership (TPP) probably won’t materialize because President-elect Donald Trump has vowed the US will not participate in the 12-member Pacific Rim free trade pact.
The demise of the TPP and slowdown in exports have also weighed heavily on investment for 2016 and would continue to weigh heavily on future foreign direct investment inflows both into and out of the country.
The Prime Minister cautioned that if the country does not find an avenue to continue growing, it would stagnate and lose ground like other countries including Taiwan, the Republic of Korea and even Japan.
That in turn could result in great economic and social problems, including high rates of unemployment.
Maintaining growth, Prime Minister Phuc said, can be achieved through increased worker productivity. To help achieve this, Phuc said the government had instituted start-up programs to support Vietnamese launch of new companies.
These companies are aimed at promoting productivity of the Vietnam domestic sector through innovative and progressive thinking.
Private-sector credit is estimated to have grown at near 20% for 2016, a rate that is not sustainable over the long term and signals the urgent need for bank restructuring to guard against another nonperforming loan crisis.
Lastly, the country faces potential problems with its monetary policy, said the Prime Minister, putting tremendous downward pressure on the value of the dong, which could depreciate by 4-5% in 2017, unless effective remedial action is not taken.
Ultimately, said the Prime Minister, the ability of Vietnam to confront these challenges lies not just with governmental policies and circumstances, but is dependent on responsible and committed leadership.
Now more than ever, Vietnam needs governmental, business and civic leaders who can win the support of the people and rally the country together to work collaboratively and cooperatively to accomplish a common goal.
And then, not only will this generation enjoy a good quality of life, but they will be able to overcome the economic challenges the country faces and look forward to a brighter future for themselves, for their children and for their grandchildren.
Eight honoured at first ever startup festival
Eight startups received awards in five categories at the 2016 Start-up Festival in Hanoi on December 29.
The categories were Startup of the Year; Women’s Startup, Bluebird IT Startup, Potential Startup and Most Favoured Startup.
The event, which is held for the first time by Vietnam Television’s VTV6, the Vietnam Climate Innovation Centre (VCIC), Topica Founder Institute and Bluebirds JSC, is the biggest event for the startup community this year.
The festival attracted about 1,000 startups.
With 53 percent of voting from 200 delegates, DesignBold, a design application, overcame GotIt! (47 percent) to win the most important award, Startup of the Year award.
“We promise to try our best to bring resources from overseas to support Vietnamese startups. Receiving the award is an honour for us but also a responsibility. We set the target to support Vietnamese startups to catch up with other startup ecosystems in the world,” said Dinh Viet Hung, the CEO of DesignBold.
DesignBold is a tool that helps both professional and amateur users design by themselves. It is also the winner of Creative Business Cup Vietnam 2016 and became the Vietnamese representative for the final round at the Creative Business Cup 2016 in Copenhagen, Denmark in November this year.
The Women’s Startup Award was given to Vu Nguyet Anh, founder of the dating app Rudicaf. “For me, this is an honour as well as a great motivation, but also a pressure to make more efforts in the future,” she said.
The Most Favoured prize was given to Le Thong Nhat, a retired teacher, for his BigSchool Vietnam product. Three startups, namely, 1offfice, Giaohangnhanh and WeFit, won the Potential Startup Award. The prize is a two-week visit to Israel, dubbed the startup nation.
“I believe that the spirit of the young generation in Vietnam will boost the startup ecosystem. In my opinion, it is always better to pursue and try to fulfill your dream than not to try at all,” said Yaniv Tessel from Israel’s Economic and Trade Mission.
In the Bluebird IT Startup category, Mysterious Stone and Suge Dict overcame 200 games and applications to win. They will receive an award of 50 million VND and an opportunity to visit the Google offices in Silicon Valley.
In addition, the organisation board gave a prize for the startup event of the year to the event that the startup community proposed for the amendment of the Article 292 under the Penal Code.
Article 292 of the Penal Code adopted by the National Assembly last year stirred up controversy as it was stated that any services offered online or via telecommunication networks without prior permission would be deemed illegal. Fearing that start-up businesses could be harmed, a petition calling for the scrapping of Article 292 was sent to officials, ministers and agencies and collected nearly 6,000 signatures after only one week.
Stronger SME connectivity needed to boost support industry
Linking small and medium-sized enterprises (SME) and selecting some of them to join the supply chain for FDI firms to boost support industry is among ideas to promote the role of SMEs in the industry’s growth that was given in a recent conference in Ho Chi Minh City.
Currently, Ho Chi Minh City is focusing on four major industries of mechanics, electronics-information technology, pharmaceutical chemistry and food processing, along with two traditional ones of apparel and footwear.
The four major industries’ contribution to the city’s total industry structure rose to 60 percent in 2015 from 54.6 percent in 2005, while the other two traditional ones made up 17.7 percent.
However, the support industry for the sectors has faced many difficulties, as the majority of firms in the field are SMEs with limited capital and technology, making it hard to expand production and join the global supply chain.
According to Ho Minh Son, General Director of Amura Precision, a mechanics company, support industry should be paid special attention to meet high demand of the world market, especially developed countries.
Son suggested that along with more investment in technology and human resource training, it is necessary to connect enterprises in the field to enhance their mutual support and coordination, creating a supply circle and bringing higher added value to all parties.
In Ho Chi Minh City and Vietnam at large, joining the supply chain for FDI firms remains a challenge for Vietnamese businesses, he said, taking Intel Products Vietnam as an example. The firm needs 100 suppliers while only 18 firms can cooperate with it, the majority of them are foreign-invested.
Meanwhile, Le Bich Loan, deputy head of the Ho Chi Minh City Management Board for High Technology Industrial Parks, proposed the selection of some firms to join supply chain for FDI businesses.
The city should design special policies for the chosen firms to produce outstanding products in terms of quality and price, thus drawing more orders from FDI firms, she said.
At the same time, Tran Anh Tuan, acting head of the Institute for Development Studies, the growth of SMEs remains limited as there has been no specific law applicable to them and poor support in various fields, including tax, market, trade promotion, technology and human resources.
Tuan held that stronger support for SME should me made with careful selection of sectors, adding that Ho Chi Minh City should prioritise high technology, support industry and startup.
PetroVietnam’s oil exploitation on target
The Vietnam Oil and Gas Group (PetroVietnam) exploited around 15 million tonnes of oil equivalent in 2016, meeting its annual target, the company said.
PetroVietnam also exploited around 9.6 billion cubic metres of gas this year.
A company representative said that in the global context of low oil prices in 2016, with an average price of around 44 USD per barrel, PetroVietnam’s financial indicators have been strongly hit. So from early on in the year, the group actively implemented measures to ensure there was mining production in more than 30 oil and gas mines across the country.
The company has taken several steps to improve its oil recovery factors, its operation systems, and the repair and maintenance of equipment. Two giant oil platforms - RC-9 and Thien Ung oil rigs - have also been put into operation. Most of PetroVietnam’s mines have met their annual targets or even exceeded them.
“The results were fruitful mainly because of the group’s robust performance in mine management, optimisation of exploitation operations and the excellent condition of some mines,” the representative said, adding that 2016 is the eighth consecutive year in which PetroVietnam’s mining production has exceeded the target set by the government.
HCM City’s banks maintain high growth
Banks in the southern economic hub of Ho Chi Minh City have maintained their high growth in 2016 compared to previous year, according to the Ho Chi Minh City branch of the State Bank.
Nguyen Hoang Minh, Deputy Director of the branch said on December 29 that total capital mobilization of credit institutions in the city is estimated to reach 1.82 quadrillion VND (approximately 80 billion USD), up 16 percent against 2015.
Total outstanding loans will go up nearly 19 percent to hit 1.56 quadrillion VND (about 68 billion USD) compared to the end of last year.
The city’s banking sector has reached the credit growth rate target of 18 – 20 percent in 2016.
According to the Vietnam General Office of Statistics, the credit growth of the national economy reached 16.46 percent as of December 20. Banks’ capital mobilisation upped 16.88 percent and deposit interest rates remained stable.
The year’s average VND/USD exchange rate showed a year–on–year increase of 2.23 percent and the average core inflation rate went up by 1.83 compared to the previous year.
Vietnam, Israel develop supply chain of farm produce
The Vietnam Cooperative Alliance (VCA)’s Cooperative Union of Agricultural Consumption have reached with Israeli partners a deal to develop a supply chain of clean agricultural products using Israeli technology.
The deal was signed in Hanoi on December 30 by the union and the Israel Chamber of Commerce and Technology in Southeast Asia and IVA Corporation of Israel.
VCA President Vo Kim Cu said the two sides with work togerther to build farms producing vegetables, fruits and farm produce in Vietnam and abroad; help the union develop a chain of supermarkets and build brands for safe farm produce.
The VCA will embark on projects in the Central Highlands province of Lam Dong, the southern province of Binh Phuoc, the northwestern region and the Mekong Delta, with a total area of 20 ha in the second quarter of 2017. The area will be expanded to 100ha in the fourth quarter.
Outlets for safe farm produce will be built along with the development of farms.
Vietnam Airlines successful in UK market
Vietnam Airlines has enjoyed rapid growth in the UK market since its first flight landed in Gatwich Airport in London in November, 2011, marking the launch of the carrier’s direct air route to the European country.
With four flights per week, Vietnam Airlines officially became a “bridge” linking Vietnam and the UK. In 2015, the airline switched to Heathrow airport, one of the most important international airports of the UK.
The carrier began to use the new generation aircraft Boeing 787-9 Dreamliner for its flights to Heathrow airport on September 9, 2015, becoming the first airline in the region to use the modern airplane on a direct route from Southeast Asian to Europe.
Vietnam Airlines gradually increased the frequency of flights from Hanoi/Ho Chi Minh City to the UK to 5-6 flight per week, then one every day.
Thanks to its efforts to improve service quality, the carrier was also certified as a four-star airline by the UK-based airline and airport rating organisation SkyTrax.
Vietnam Airlines held a Christmas greeting programme in Heathrow airport for passengers on its flight to Vietnam on December 21, and a similar event in Tan Son Nhat airport to welcome the passengers.
This year, Vietnam Airlines plans to transport 20.6 million passengers.