BUSINESS IN BRIEF 23/1
Vietnam cotton industry grows on Chinese demand
Despite concerns that the industry might continue to decline, cotton imports of Vietnam have increased in the first few months of 2016-17. It is estimated that imports will experience an increase of 18%.
One of the major reasons for the uptick in Vietnam’s cotton industry is the demand for yarn in China. This has been explained by the recent growth in the Chinese garment industry.
The industry has thrived on the demand from the US and Europe for inexpensive manufactured clothes.
In China, the industry focuses on producing finished textile goods, which explains the demand for the yarn from Vietnam. Some experts and industry watchers had been concerned that China’s internal cotton production would increase to the point where it would render Vietnam imports unnecessary.
However, as many in China increasingly turn to the cities for employment and the urban lifestyle, China is having a harder time meeting its agricultural labor needs and hence a high dependence on yarn imports from Vietnam has developed.
Way too much supply deflating natural rubber market
The global natural rubber market is currently starting its fifth year of surplus that is creating excessive stockpiles of inventory and contributing to a steady fall in prices, says the Vietnam Rubber Association.
Speaking at a press conference launching an international rubber expo in Ho Chi Minh City last December, Vo Hoang An, deputy chair of the VRA, told reporters that it is expected by the year 2020 there will be a surplus of approximately 1 million tons of natural rubber and 3 million tons of synthetic rubber.
An noted Vietnam natural rubber exports for 2016 surpassed expectations jumping 10.6% in volume to 1.26 million tons and 9% in value to US$1.67 billion when compared against 2015.
On the downside, however, the average price for rubber fell 6.3% to US$1,290 per ton over the course of the year.
Vietnam was the fourth largest exporter of natural rubber, he said, primarily shipping product to China and Malaysia who collectively account for roughly two-thirds ofthe country’s rubber exports.
However, he was less optimistic about the outlook for 2017.
The world demand for rubber, he pointed out, is primarily used to manufacture tires, and the looming economic slowdown in China could potentially spill over and slow the demand for natural rubber.
Asia accounts for 93% of the world rubber production, he added, noting that Thailand is the largest producer followed by Indonesia and then Vietnam, the third largest.
Other large rubber producers in the region include India, China and Malaysia.
China is the world's largest consumer of rubber followed by India and the US. Increasing consumption of tires and industrial rubber products in the US is expected to boost the global demand for rubber.
Tran Thi Thuy Hoa, head of the Vietnam Rubber Association’s advisory board has recently recommended the commodity not be sold at the current low prices.
Hoa pointed out that production had been cut by rubber growers in the last two months of 2016 and many smallholders are in the process of shifting production to other agricultural crops.
Meanwhile, Hoa urged Vietnamese rubber processors to invest more in advanced technology and seek out new buyers for their products.
She suggested that they plan on attending the Rubber and Tyre Vietnam, an international exhibition, to help them get up-to-date on the latest technologies and products and build new relationships.
To be held at the Saigon Exhibition and Convention Centre June 13-15 this year, it is anticipated that the exhibition will see more than 80 local and international participating exhibitors.
There will be conferences and seminars at the three-day exhibition, she noted, as well asa rubber sourcing fair to enable Vietnamese tire and rubber producers and foreign buyers to compare notes and explore business opportunities.
Businesses push ahead with trade promotion in early 2017
The National Trade Promotion Programme has been carried out since the beginning of 2017 in order to expand markets and diversify export commodities.
Speaking at a conference in Hanoi on January 19, deputy head of the Trade Promotion Agency under the Ministry of Industry and Trade Ta Hoang Linh said the programme targets European countries such as France, German, Belgium and Italy as well as Trans-Pacific Partnership (TPP) members like Australia, the Republic of Korea, Japan and New Zealand, along with countries in the ASEAN Economic Community like Laos, Cambodia and Myanmar.
The programme also focus on developing domestic market, especially in rural, border and disadvantaged areas, and implementing effectively the campaign “Vietnamese prioritise using Vietnamese goods”, he added.
The management board of the programme planned to work with associations, localities and enterprises immediately to map out trade promotion activities according to sectors and economic regions in medium and long terms in order to build feasible and high-quality projects.
Deputy Minister of Industry and Trade Tran Quoc Khanh said the ministry will continue implementing practical activities to help businesses register for protection and geographic indication, and connect with the Vietnamese commercial system abroad to develop their brand names.
Last year, the programme supported 6,000 businesses to sign domestic and foreign contracts and transaction deals worth over US$354 million and VND890 billion (US$39.4 million) respectively at trade promotion events.
Jetstar Pacific deploys online check-in service
The low-cost carrier Jetstar Pacific on January 19 inaugurated an application that enables passengers to conduct check-in on its website.
Accordingly, passengers flying with Jetstar Pacific starting from Hanoi, Ho Chi Minh City and Da Nang city, can perform check-in on the website http://www.jetstar.com/vn/ before they arrive at airports.
The service is only applicable to passengers holding Vietnamese nationality and having no luggage.
Previously, the airline also applied mobile check-in service to make customers’ flying easier, especially during the lunar New Year festival.
The new applications significantly contribute to improving the airline’s service quality, thus attracting more passengers using its services.
On the same day, Jetstar Airways, an Australia–based member airline of the Jetstar Group, began selling tickets for the two direct air routes connecting Vietnam and Australia, including the HCM City-Melbourne and HCM City-Sydney services.
The arlines uses Boeing 787 aircrafts for the routes. The flights on these routes are also connected to 37 internal and international air routes operated by Jetstar Pacific.
This is the first time the low-cost carrier has opened a direct long-distance route between Vietnam and Australia.
Jetstar Pacific is a member of the Jetstar Group, one of the largest low-budget airlines in Asia-Pacific. It is running flights to 80 destinations in 17 countries in the region.
Temporary floating bridge built to boost Vietnam-China border trade
A ground-breaking ceremony for a temporary floating bridge over the Ka Long border river was held in Mong Cai city of the northern province of Quang Ninh on January 19.
The bridge is the first of its kind connecting Mong Cai city with Dongxing city of China.
The bridge which has total investment of VND160 billion (US$7.09 million) is 114m long and 12m wide, and has two lanes for vehicles.
Once completed, the floating bridge will boost import-export activities and economic development between the two border cities and minimise the weather impact on goods transport while reducing cost of transportation, contributing to the socio-economic development of the two localities.
Foreign visitors to Da Nang rise in Lunar New Year
The central city of Da Nang is expected to welcome 100,356 foreign visitors in the Lunar New Year 2017, an increase of 26.6 percent year-on-year, according to the Department of Tourism.
The total number of visitors coming to Da Nang city is estimated to reach 243,230, rising 9.5 percent compared to last year.
Recently launched international direct flights were credited for the rise of foreign visitors to the city, mostly from the Republic of Korea, China and Japan.
Da Nang will host several cultural events to celebrate Lunar New Year 2017 such as an event on New Year’s Eve on the Han River and a spring flower festival.
The city was honoured as Asia’s leading festival and event destination by the World Travel Awards in 2016.
The Da Nang airport is now operating 20 international routes, including 11 direct and 9 charter ones.
Da Nang served more than 5.51 million visitors last year, up 17.7 percent from 2015. Of the figure, 1.67 million were foreigners, marking a 31.6 percent increase.
Dried food helps enrich Son La people
In recent years, producing dried beef and pork has created new income for many households in Son La province. When Tet comes, the dried meat market is busier than ever. Son La branded products are now in demand nationwide.
Nguyen Thi Ly’s family in To Hieu ward, Son La City, has been making dried meat for 20 years. At first Ly only sold dried pork meat and sausages. In 2006, when she realized the potential of dried meat market, Ly’s family invested more than US$1,500 in building a smoker oven and vacuum-pump. Now her family sells nearly 2 tons of dried beef a year, and more than 1 ton of dried meat during Tet. Ly says she makes an annual net profit of US$8,800.
“I have 20 years of experience. The busiest time of the year is around the Tet holiday when the number of customers calling or coming to my house to order goods is much higher. This job gives us a stable income, enough money for the children to attend school,” Ly elaborates.
Son La’s dried meat is made of pork, beef, buffalo meat, or horse meat mixed with the typical spices of Thai ethnic people - chili, ginger, garlic, and “mac khen”, - a kind of forest peppercorn with a distinctive aroma.
After being seasoned, the meat is smoked over firewood for 2 days and 1 night and then steamed. The last step is to continue to smoke the meat until it is dry to ensure it will keep for a long time.
Each step is done manually, Hoang Thanh Binh, a tourist of Hoa Binh province, says “Son La’s dried meat is delicious and distinctive. Both children and adults like it. I bought several kilos as gifts for my family and friends.”
During this year’s Tet holiday, the Son La dried food market is offering a new product: dried Giang fish. Dried Giang fish is prepared like other dried foods, but it takes more time to smoke the fish and it’s a bit more complicated to prepare. A kilo of this specialty can cost as much as US$13.
Lo Thi Muon, an experienced seller in Heo hamlet, Son La City, says “This year many people have ordered this product for Tet instead of dried beef, pork, or sausage because it is a new dish with a different flavor and it’s not greasy or cloying.”
Son La has hundreds of outlets selling dried meat of various kinds, earning each household about US$13,200 per year.
Son La dried meat is trusted by consumers for its quality, hygiene, and safety, according to Lu Van Truong, Deputy Head of the provincial Veterinary Department.
“During the Lunar New Year, the volume of poultry and cattle used to make food greatly increase. We have asked grass-roots units and the inspection agency to step up inspection and monitoring of slaughtering activities and punish all violations. We are also warning people to buy stamped products which indicate hygiene and slaughtering checks.”
Sun Life now wholly foreign-owned
Sun Life has recently made the switch to Sun Life Vietnam, a 100% foreign-owned subsidiary of Canadian life insurance company Sun Life Financial, aligning with the parent firm’s global strategy to better serve Vietnamese customers.
This week, Sun Life Vietnam is launching a series of grand opening ceremonies, combined with its distribution kick-off events in major cities throughout Vietnam.
The series of events will officially mark the debut of the Sun Life Vietnam brand to the general public after Sun Life Financial Inc. acquired the remaining 25 per cent charter capital of PVI Sun Life Insurance Company Limited from PVI Holdings on November 7, 2016. The company’s new name, Sun Life Vietnam Insurance Company Limited, reflects its current status as a wholly-owned subsidiary of Sun Life.
Launched in 2013, Sun Life Vietnam has established itself as a market leader and industry pioneer in pensions. According to Larry Madge, CEO of Sun Life Vietnam, the leadership of the company is working hard to align not only the look and feel but also the core competence of Sun Life Vietnam with Sun Life Financial Group.
“This transaction will add to Sun Life’s momentum in Vietnam,” Madge said. “Being a full member of Sun Life Financial Group, Sun Life Vietnam is well positioned to leverage financial strength as well as the over-150-year financial services expertise of the group.”
Strategy-wise, Sun Life Vietnam will continue with a distribution strategy covering individual and group employee benefits through agency and corporate sales channels.
On the one hand, the company will maintain its strength in retirement products with PVI as its distribution partner, and develop partnerships with other distribution partners who have access to unique markets. On the other hand, Sun Life will develop the agency channel for individual sales as one of its strategic priorities.
For individual insurance in Vietnam, the agency channel has long been the dominant outlet for most life insurers. However, high agency turnover and rampant poaching adversely affect the sustainable development of the industry. Sun Life Vietnam will apply Sun Life Financial’s MRA model, which is a time-tested and highly effective agency strategy applied across the firm’s operations in Asia to build a high-quality, highly productive agency force.
MRA stands for “Most Respected Agency”. Sun Life Vietnam aims to build an agency force which is the most respected within the industry - and most importantly, in the eyes of clients. For a Sun Life advisor, MRA means putting clients’ interests first and living by four MRA core values: being caring, professional, inspiring, and winning.
The “caring” aspect can be seen in the way the MRA takes care of and understands its clients, to offer them financial solutions meeting their changing needs at different life stages.
The “professional” facet provides credibility and trust. Sun Life Vietnam ensures its MRA representatives are professional, by applying a well-defined recruitment process and career path together with product knowledge and professional accreditation.
The “inspiring” side is related to engagement and excitement. The company provides a supportive and motivating workplace to help its advisors achieve leading roles in industry groups. Finally, the “winning” factor is related to performance excellence and ultimately market leadership.
“We have defined 12 cross-country metrics to track progress building the MRA. These core values are embedded into our agency operations,” said Madge. “In sum, MRA is one of Sun Life’s top strategic priorities. We are convinced that our MRA strategy will yield huge benefits to all our advisors, and most importantly, to our clients and the market as a whole.”
Though the market is still small and people’s awareness about insurance is still far lower than that in mature markets, Vietnam holds a lot of potential.
The total premium income of life insurance companies in Vietnam was VND49.67 trillion (US$2.23 billion) in 2016, up 29.8 per cent on-year, according to data by the Insurance Supervisory Agency under the Ministry of Finance. In the past three years, growth has averaged 30 per cent.
“I believe that the strong growth of Vietnam’s life market doesn’t come all of a sudden, but as the collective result of all the key macro- and micro-economic factors,” Madge said. “Learning more about Vietnam, I am personally quite optimistic about the life market and excited that Sun Life Vietnam will be accelerating its investment in the market to help bring improved finance security to more Vietnamese people.”
According to Madge, these impressive figures mean that Vietnamese people have an increasing awareness of the importance of having financial solutions for them and their families.
“The future development of Vietnam’s life insurance market lies in growing the needs of customers. People will only be interested in life insurance if we can help them understand that our solutions can fulfil their needs, not only once but also at different life stages of their life time,” Madge said.
He added that this dynamic highlights the importance of Sun Life’s “Brighter Life” approach, which involves keeping clients for life, rather than just going for a product sale.
With its “Brighter Life” model, Sun Life delivers outcomes that matters to a client’s life. These include the right type of insurance, impressive investment results, sound financial planning advice, support in returning to work after an illness, and most importantly, peace of mind.
“We will make it easier for clients to do business with us, we will increase our proactive contact, and we will resolve problems better. By doing so, clients will stay longer, buy more, and refer more business to us,” Madge explained.
In Vietnam, likewise, the company’s aim is to help Vietnamese clients achieve lifetime financial security by offering a strong suite of life insurance, health, and savings products.
As a full member of Sun Life Financial, Sun Life Vietnam is now well positioned to adopt and leverage the “Brighter Life” strategy for sustainable growth according to Madge.
“With over 70 years of experience in pensions, savings, and retirement funds, our expertise in retirement insurance is unique and time-tested. This is a solid base for Sun Life Vietnam to move ahead on, as an industry pioneer and a market leader of this type of insurance,” he said. “We will continue to leverage our hereditary strength, utilise local market insights, and build on our track record in Vietnam’s market to enhance our footing in this market .”
Tourism to peak during Tet holiday
In recent years, instead of welcoming in the Lunar New Year at home, many Vietnamese families have opted to go travelling to experience the Tet atmosphere in domestic and international destinations.
Aiming to meet the demand, during this year’s Tet holiday, travel agents have launched attractive tours, along with a range of promotional programmes.
Tet is the longest holiday of the Vietnamese people, a time for family members who live apart to be reunited and spend time together. For this reason, Tet has become a golden opportunity for families to go travelling. During this year’ holiday, most Vietnamese people have one week off during the holiday.
According to statistics of travel company Fiditour, 60% of customers have purchased tours during Tet, while Vietravel has recorded around 70%. The tours are generally three or five-day tours.
This year the schedule for the long Tet holiday was released soon, for this reason people were able to make travel plans in advance. Meanwhile, travel agents have been receiving bookings for tours as long as two months ago.
Nguyen Cong Hoan, Deputy General Director of Hanoi Redtours, said that in regards to domestic tourism, tours visiting heritage sites in the central region are thriving.
In the north, many visitors have also selected destinations in the northeast and northwest regions to experience the Tet celebrations of ethnic groups. Popular destinations, such as Danang, Nha Trang, Da Lat and Mui Ne, are also the choice of many visitors, who want to relax with their family.
Meanwhile, in the Mekong River Delta region, Phu Quoc and Chau Doc are considered as the most attractive destinations.
Furthermore, this year the holiday season has witnessed the tremendous growth of the demand of outbound tours. The reason is simple: outbound tours offer attractive destinations, a wide range of activities during traveling and more importantly, the price is equivalent to inbound tours.
The destinations most popular among Vietnamese travellers are Cambodia, Thailand, Singapore, China and Hong Kong – countries which are near Vietnam and which have similar cultures.
Particularly among the young Thailand is a hot destination as the price is reasonable. Other places chosen by a large number of Vietnamese include China and Singapore as they have beautiful landscapes, various shopping choices and a number of eye-catching traditions to celebrate the lunar New Year.
According to travel agents, the number of domestic tourists rose by 10-20% over the same period last year. Aiming to attract more people to spend money on tourism, travel agencies in the country have offered a large number of promotion programs.
In general, travel firms all have raised tour fees by 20-30% as costs have been rising on par with demand, therefore travel firms have had to increase tour fees to cover expenses.
Outbound tour fees have increased by 25%, while domestic tours have risen by 20-30%. However, the 20-30% tour fee increases have not reduced demand. The number of travellers booking both domestic and outbound tours has increased over previous years.
It is clear to see that the long Tet holiday has helped stimulate the demand for traveling.
Hanoi aims to receive 4.3 million inbound tourists
Hanoi aims to receive 23.61 million visitors, including 4.3 million foreigners in 2017, the municipal Department of Tourism said at a meeting in Hanoi on January 19.
In 2016, the tourism sector played an important role in the capital city’s economic development. The number of tourist arrivals to Hanoi increased significantly.
The city welcomed more than 21.8 million visitors, including over 4 million foreigners, up 11% and 23% respectively. Hanoi was also selected among the world’s cheapest holiday destinations by international travel magazines.
The results were attributed to diverse effective measures taken by the sector. The Hanoi Tourism Department has organized a number of impressive events in the country such as Vietnam International Travel Mart (VITM), a ‘Memory of Hanoi’ program, a traditional craft village festival, and Hanoi Ao Dai festival. It has attended and conducted tourism promotion activities at international travel fairs in China, Japan, France, and the UK. It has also coordinated with CNN to promote Hanoi images on the world renowned TV channel.
This year, Hanoi will continue to improve the quality of tourism services and conduct new tours to attract more visitors and obtain VND66.611 trillion from tourism revenue.
Hà Nội tax revenue up 16 per cent
Hà Nội collected over VNĐ160.5 trillion (US$7.1 billion) in taxes this year, 4 per cent higher than its annual target and 16 per cent higher compared with 2015.
This was reported by the municipal Tax Department.
Of the estimate, domestic tax revenue (excluding budget collections from crude oil) reached VNĐ158.7 trillion, up 18 per cent year-on-year and increased by 3 per cent in comparison with the yearly target, Nguyễn Thế Mạnh, director of the Hà Nội Taxation Department, said during a conference held by the department in Hà Nội on Tuesday.
The department conducted inspections on over 17,900 companies located in the capital city, Mạnh said, adding that the inspections aim to reduce unpaid tax and force businesses to comply with tax laws, thus avoiding losses for the State budget.
A focus on debt collection by Hà Nội’s Tax Department this year has resulted in the recovery of VNĐ12.7 trillion in arrears, up 30 per cent year-on-year, Mạnh said, adding that the city’s tax department has become the country’s leading tax unit in debt collection.
Mạnh said the application of information technology was one of the key reforms needed in the administration of taxation.
Time and costs spent on completing procedures in taxation had already been significantly reduced thanks to a series of measures promoting administrative reform, including the application of IT in tax management, he said.
As many as 98 per cent of businesses in the city used online tax filing procedures and 93 per cent registered for e-tax payments as of the end of 2016, Mạnh said.
Vietinbank successfully issues bonds at low interest rate
Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) announced it successfully issued non-convertible five-year bonds worth VNĐ2 trillion (US$88.1 million) at annual interest rate of 5.8 per cent.
Compared with the interest rates of other bond issued recently, the 5.8 per cent rate is considered the lowest rate. It is even lower than the interest rate of 7 per cent per year applicable for deposits of over three years in Vietinbank.
Previously, in December 2016, Vietinbank also issued 10-year bonds worth VNĐ2.9 trillion at interest rate of 7.5 per cent in the first five years.
Vietinbank reported a high profit of VNĐ8.25 trillion in 2016, 4 per cent higher than the target set at the bank’s general meeting of shareholders.
As of December 31, 2016, the bank’s total merged assets were estimated at VNĐ947 trillion, up 22 per cent from the previous year.
Also in 2016, the bank’s total outstanding loans were VNĐ720 trillion, a year-on-year rise of 18 per cent, while total mobilised capital reached VNĐ862 trillion, up 21 per cent. By the end of 2016, the bank continued to effectively manage the quality of assets with bad debt ratio of less than 1 per cent.
The bank in 2017 has set a target of a 15-17 per cent rise in total assets and an 18 per cent increase in outstanding credit.
Banking system liquidity under pressure until Tết ends
Liquidity of the banking system from now until the end of Tết (Lunar New Year) will remain under high pressure due to rising capital demand.
According to Bảo Việt Securities Company (BVSC), the State Bank of Việt Nam last week had to pump a net VNĐ3.786 trillion (US$166.78 million) into the system through open market operations (OMO) channel to support liquidity of the banking system.
The few weeks before Tết are often the peak time for the banking system’s liquidity, when capital demands rise sharply due to seasonal reasons.
BVSC also reported that inter-bank interest rates last week rebounded rather sharply within the range of 0.07-1.2 per cent.
Specifically, the average interest rate for overnight term increased 1.2 per cent to 4.6 per cent per year; 0.3 per cent for one-week term to 4.7 per cent per year and 0.07 per cent for two-week term to 4.8 per cent per year.
The inter-bank interest rate rebounded quickly only after a week of cooling down, proving that the system’s liquidity is still suffering from pressure during the weeks close to Tết.
“We maintain our view that from now until Tết, the system’s liquidity will remain under pressure and at some points certain support will be needed from the central bank,” BVSC analysts said.
They also forecast inter-bank interest rates from now until the end of Tết would continue anchoring at a high level, ranging from 4.5-5 per cent per year.
Vietnam to debut first dairy fair
The Vietnam Dairy Association will collaborate with Vietnam Advertisement and Fair Exhibition JSC to hold Vietnam Dairy 2017, the first international festival about milk and milk products in Vietnam.
The Ministry of Industry and Trade, Ministry of Health, Ministry of Agriculture and Rural Development and other agencies have supported and agreed to sponsor the fair. It will be held at Friendship Palace in Hanoi from May 31 to June 3.
The fair will introduce all production processes from choosing the cows to selecting the feed. The processing line, labelling process and food safety standards will also be presented. The fair will act as a bridge to help companies in Vietnam and overseas exchange technologies and conduct business.
Vietnam Dairy Association hopes to provide a space for major local and international brands to participate at the fair, while also providing consumers with a greater understanding about the industry and dairy products.
Parents can also bring their children along to participate in the Children's Festival on June 1.
The fair is hoped to connect dairy companies with management agencies, nutrition experts, education facilities, distributors and consumers.
Vietnamese dragon fruit to head to to Japan
Mr. Nguyen Huu Dat from the Vietnam Fruit and Vegetables Association confirmed with VET that red-flesh dragon fruit will be exported to the tough Japanese market shortly. “The official announcement was made by Prime Minister Nguyen Xuan Phuc during the visit to Hanoi by Japanese Prime Minister Shinzo Abe on January 16 and 17,” he said.
This is the second Vietnamese fruit to be licensed for export to Japan, following mangoes. Like mangoes, the red-fresh dragon fruit must also be steam-treated before being exported, to counteract fruit flies.
The Vietnamese exporters are still to be officially named but Mr. Dat predicted they would be Ho Chi Minh City’s GoodLife, Binh Thuan province’s Hong An, Binh Duong province’s Fine Fruit Asia and Yasaka, and Long An province’s Hoang Phat Fruit, as they have factories with steam treatment systems that meet Japanese regulations.
Earlier, Australian agriculture officials released their final report on the quality of fresh dragon fruit from Vietnam, according to the Australian Embassy in Vietnam. The first shipments will reach Australian shores sometime this year.
Australia’s Department of Agriculture and Water Resources finished its draft report on dragon fruit imports from Vietnam and a 60-day period for feedback and discussion was then in place before the final step of allowing the imports was taken by the Australian Government. Australia will allow imports from all dragon fruit-growing regions in Vietnam as long as the fruit meets the country’s biological safety standards.
Vietnam exported more than 10 tons of lychees to Australia last year, according to the Vietnam Trade Office at the Vietnamese Embassy in Australia. The first consignments were shipped to Australia and the US in 2015, even though the volume was small, at just 35 tons in total.
Dragon fruit has the highest export value among Vietnam’s fruit and is expected to be one of nine key export fruit in the future. Export volumes to the US, however, remain small as a great deal comes from China via unofficial channels. Official exports account for 2-3 per cent of the total, according to the Ministry of Industry and Trade.
Resolution on tourism development released
The Political Bureau issued Resolution 08-NQ/TW on tourism development on January 16, targeting to convert tourism into a spreahead economic sector.
Under the Resolution, the number of international and domestic tourists is set to soar 10.2% and 11.8% per year, respectively.
Last year, Viet Nam welcomed 10 million foreign guests and 62 million domestic visitors. The tourism sector contributed 6.8% of GDP.
Nevertheless, the tourism sector failed to tap its potentials, strength, and meet expectations. Tourism products remain unattractive with low competitiveness. Tourism human resources were weak and faced a shortage.
The Resolution set a goal that by 2020, the tourism sector will be converted into a spreahead industry, serving to promote socio-economic development; profession; technical infrastructure; high-quality, diversified, brand-name, competitive products with national cultural identity.
Especially, it targets to attract 17-20 million international guests and 82 million domestic ones. The sector would make up 10% of GDP. Tourism revenue would hit US$ 35 million. Tourism export would reach US$ 20 billion and generate 4 million jobs including 1.6 million direct jobs.
By 2030, tourism will become a spreahead economic sector. Viet Nam will enter the list of Southeast Asian countries leading in tourism.
To realize the aforesaid goals, the resolution mentioned a group of eight solutions on (1) renovating awareness and thinking on tourism development; (2) restructuring tourism; (3) perfecting mechanisms and policies; (4) developing infrastructure and technical materials; (5) strengthening tourism promotion; (6) generating a favorable environment for tourism businesses; (7) developing human resources; (8) rasing State management on tourism./.
Local steel producers fret about imported steel alloy
Steel billet and some other steel imports from China have been in steep decline but construction steel disguised as steel alloy to enjoy low tariffs is still flowing into Vietnam, which industry insiders said would adversely affect domestic steel production.
Ho Nghia Dung, chairman of the Vietnam Steel Association (VSA), told the Daily on January 17 that the current volume of steel billet imported from China has decreased by 60%. Other types of steel have also fallen sharply compared to early last year due to the adoption of some trade defense measures.
However, an increasing volume of long steel and construction steel has been imported into the country in the form of steel alloy that can evade trade defense duties. “The association has been cooperating with firms to clarify the issue while still voicing its alarm to protect local production,” he said.
He added the steel industry reached an average growth rate of 12% last year, generating good profits for local firms.
VSA estimated the total steel consumption this year would reach 17 million tons, including construction steel, cold rolled steel, welded steel pipes and galvanized sheets, a year-on-year increase of two million tons. In particular, the consumption of construction steel would be around 8.2 million tons, up by one million tons compared to last year.
Dung expected consumption in the domestic market would remain stable this year. In addition, steel prices would be higher than last year, as raw material prices on the world market have been on the rise. The growth rate of the sector is predicted at around 12-15% year-on-year.
Prices of steel billet on the world market rose by around US$25-45 per ton last December, resulting in a month-on-month increase of VND0.6-1 million each on the local market.
The steel industry produced 15 million tons of finished products, including cold rolled steel, cold-rolled coil (CRC) steel, steel pipes and galvanized sheets that met domestic demand and yielded relatively positive export results in 2015.
However, Vietnam still imported nine million tons of hot-rolled coil (HRC) steel as raw material for production of other steel products.
Vietnam’s coffee export forecast to fall this year
Vietnam’s coffee export this year is predicted to plunge by 20% to 30% compared to 2016 due to bad weather.
Nguyen Viet Vinh, general secretary of the Vietnam Coffee and Cocoa Association (Vicofa), said the country last year shipped abroad some 1.79 million tons of coffee worth US$3.36 billion, up 33.6% in volume and 25.6% in value against the previous year.
Vicofa forecast the country’s coffee exports this year might tumble 20-30% to only some 1.3 million tons. Vinh ascribed the sudden fall this year to the impact of El Nino, causing drought in the Central Highlands, the key coffee growing area, and cold weather in northern provinces.
In addition, the growing acreage of replanted coffee along with the massive planting of pepper and fruit trees has contributed to the fall in coffee output for export in the 2016-2017 crop. This also poses many challenges for the sustainable development of coffee in the Central Highlands, Vinh added.
According to the coffee replanting program initiated by the Ministry of Agriculture and Rural Development, some 120,000 hectares of coffee will be replanted in the Central Highlands region between 2014 and 2020. However, work on the scheme has been slow given financial distress. One of the reasons is high interest rates for bank loans.
Mobile carriers prepare plans to fight network jamming at Tet
Mobile carriers have unveiled plans to cope with network jamming during the upcoming Lunar New Year holiday, or Tet. MobiFone plans to send out around 30 mobile base transceiver stations, especially to crowded places with high cell traffic, during the long holiday.
The mobile cell sites can improve the quality of 3G and 4G services in places like the Sword Lake and Huong Pagoda in Hanoi, Yen Tu Pagoda in Quang Ninh, Han River Bridge in Danang, and Nguyen Hue pedestrian square in HCMC.
VinaPhone will increase its bandwidth and capacity for its 3G network on 900MHz frequency.
It will also focus on the upgrade and expansion of coverage areas, prevention of call, 3G and SMS jamming in key areas, as well as update of information security plans.
VinaPhone installed more than 7,900 3G cell towers last year, bringing the total number of 2G/3G stations to over 54,200 nationwide. The coverage has increased by roughly 2.5 times over the previous year.
Meanwhile, MobiFone has doubled its network capacity over 2015, with nearly 10,000 3G cell sites installed.
Statistics of MobiFone showed that a large number of its customers traveling back to their hometowns in southwest, central provinces and the northern delta during Tet have in recent days led to a rise of 2 or 3 times in calls and text messages compared to normal days.