BUSINESS NEWS IN BRIEF
Mekong Delta region targets 9.4 percent export growth
Provinces in the Mekong Delta region aim to generate 15 billion USD from exports in 2017, surging 9.4 percent from the previous year, according to the Steering Committee for the Southwest Region.
To reach the goal, the provinces plan to accelerate trade and investment promotion and seek new export markets for their agricultural goods.
Top priorities will also be given to changing the structure of exports towards high-value goods, applying advanced science-technology while reducing exports of low-value farm produce, the committee said, adding that provinces will also speed up administrative reforms to better facilitate businesses and support them in fostering technical innovations to improve production capacities.
Localities with large export turnovers, such as Long An, Tien Giang, Can Tho, and Dong Thap, will hold dialogues between leaders and enterprises to solve difficulties in capital, policies and markets.
Last year, provinces in the region earned 13.7 billion USD from exports, up 7.4 percent year-on-year. The major export commodities included seafood, rice, processed food, garment and textile, footwear, and handicraft.
Several regional localities recorded high export value in 2016, including Long An with 6.6 billion USD; Tien Giang (3.3 billion USD); Can Tho (1.4 billion USD) and Dong Thap (1.2 billion USD).
The Mekong Delta region comprises Can Tho city and 12 provinces – An Giang, Bac Lieu, Ben Tre, Ca Mau, Dong Thap, Hau Giang, Kien Giang, Long An, Soc Trang, Tien Giang, Tra Vinh and Vinh Long. The region has advantages in agriculture, seafood farming and fruit.
Reference exchange rate goes down 2 VND
The State Bank of Vietnam set the reference VND/USD exchange rate at 22,191 VND per USD on the morning of January 23, down 2 VND from the end of last week.
With the current +/- 3 percent VND/USD trading band, the ceiling exchange rate is 22,856 VND per USD and the floor rate is 21,526 VND per USD.
Meanwhile, Vietcombank bought one USD for 22,530 VND, and sold one USD for 22,600 VND, unchanged from the end of last week.
BIDV listed the buying rate at 22,520 VND per USD and the selling rate at 22,590 VND per USD, down 10 VND.
In Eximbank, the buying rate was 22,510 VND per USD, while the selling rate was set at 22,600 VND per USD, down 10 VND.
Vietnam, UK boost strategic partnership
The Vietnam-UK Network has contributed significantly to stimulating the strategic partnership between the two countries, said Vietnamese Ambassador to the UK Nguyen Van Thao at a recent meeting of the network.
Thao said the two partners overcame difficulties to secure sound cooperation outcomes last year, with bilateral trade revenue increasing 15 percent year-on-year.
There are 12,000 Vietnamese students studying in the UK, he added.
The diplomat noted that room for future cooperation remains extensive.
Alok Sharma, UK Minister for Asia and the Pacific, also spoke highly of contributions made by the Vietnam – UK Network, adding that the growth of the bilateral partnership could play an important role in developing the Asia-Pacific economy.
The Vietnam-UK Network was established in January 2013, as part of Party General Secretary Nguyen Phu Trong’s visit to the UK. It is an overarching umbrella group bringing together organisations and individuals with shared interests in Vietnam to promote Vietnam – UK cooperation.
Thai investor to develop solar power project in Quang Ngai
Thailand’s Triple Win Corporation plans to develop a solar power project in Duc Pho district in the central province of Quang Ngai later this year.
The provincial Department of Industry and Trade said the Thai investor has been preparing a pre-feasibility study on developing a 150 megawatt (MW) project in coastal Pho An commune, 40km south of Quang Ngai city.
The department said the solar power project will help the province’s ‘green’ growth efforts and provide a ‘green’ power source connected to the national grid.
In 2015, the province began construction on a 19.2 MW solar power plant in Mo Duc district with total investment of nearly 900 billion VND (41 million USD).
When finished, the power station, which covers 24ha, will supply 28 million kilowatts an hour to the national grid.
In 2005, a solar power project was developed in An Binh islet of Ly Son island district, 30km off the coast of Quang Ngai, however the district started using power from the national grid at the end of 2014.
The province has called for domestic and foreign investment in infrastructure projects in Dung Quat Economic Zone and other industrial parks.
According to latest reports, the central province has attracted 36 foreign direct investment projects, worth 4 billion USD.
Singapore’s Sembcorp has been preparing to construct a 141ha thermal power plant in the Dung Quat Economic Zone
The 2,100MW thermal power plant has investment capital of 2 billion USD for the first phase, and is expected to become operational by the third quarter of 2020.
Power tariff likely to keep unchanged this year
The Ministry of Industry and Trade (MoIT) has not yet decided to adjust power tariffs this year and has been calculating basic prices, the ministry announced at an electricity production cost conference in Hanoi on January 20.
The ministry said that EVN is required to build a basic price for the year of 2017 based on calculation of 2015 and estimates of 2016.
Concerning those numbers, Electricity of Vietnam’s (EVN) 2015 power turnover reached more than 234.3 trillion VND (10.32 billion USD) or equivalent to electricity retail price of 1,630 VND per kWh.
Turnover from activities relating to power production and trading in 2015 was 2.5 trillion VND.
According to Deloitte Vietnam’s independent audit report, the losses which have not been calculated into EVN’s electricity production and trading in 2015 were up to 8.5 trillion VND. The losses came from the foreign exchange rate differences throughout the group’s wholly invested companies. Its foreign exchange rate difference at companies which EVN hold shares was over 1.3 trillion VND.
EVN in 2015 therefore posted a slight loss in power production and continued to sell electricity lower than the production cost.
Nguyen Anh Tuan, Director of the ministry’s Electricity Regulatory Authority, said that in 2015 the prices of main fuels including coal, oil and gas affected the electricity production. The Ministry of Science and Technology in the same year promulgated a decision to increase gas prices sold to electricity production by 2 percent while keeping coal prices stable.
“The important factor in 2015 was that hydropower plants did not reach the set productivity due to unfavourable hydrological conditions. The power output from hydropower plants was reduced and EVN had to mobilise electricity from coal-fired and gas-power plants. This affected to production costs,” Tuan added.
He added that according to current regulations, construction costs of villas and tennis courts have not been calculated into power production cost. The construction has come from the EVN’s welfare fund, of which, turnover from EVN’s financial activities was around 1.01 trillion VND and those from its corporations was 194.3 billion VND. Turnover from dividend and profit was 60.95 billion VND.
He said the losses from the foreign exchange difference would be gradually accounted into power tariffs.
EVN Deputy General Director Dinh Quang Tri said in 2015 that the group has itself avoided roughly 3.5 trillion VND in foreign exchange difference losses thanks to maximising costs and increasing profit. The remaining losses will be gradually accounted for.
“Normally, the foreign exchange difference losses must be accounted in a year according to the accounting mechanism. However, the EVN asked the ministry and finance ministry to gradually handle the losses over five years due to its special characteristics. If the loss was accounted all at once, power tariffs would surge. The losses would be taken into account of power tariff or reducing production costs,” Tri said.
“The ministry would review the basic prices. If there is a change of input prices such as fuel, foreign exchange and rates of power resources higher than 7 percent, the power tariff would be adjusted,” he added.
Businesses urged to act for consumer rights
The Ministry of Industry and Trade’s Competitive Management Department launched a programme in Hanoi on January 20 encouraging businesses to take actions to protect consumer rights.
The programme’s launch, in response to the Vietnamese Consumer Rights Day (March 15), aims to raise businesses’ social responsibility for consumers by obeying legal regulations on the protection of consumer rights, said Deputy Minister of Industry and Trade Tran Quoc Khanh.
He noted that the Law on Protection of Consumer Rights has contributed to building a healthy consumption environment in Vietnam since it took effect in July 2011.
Under the programme, goods and services trading companies can conduct activities such as building procedures to receive and address customers’ complaints, opening training courses and workshops on consumer rights and safe consumption, and providing free repair of products for customers, among others, said deputy head of the Competitive Management Department Trinh Anh Tuan.
It will run from the launching day to the end of March.
Food factory using Thai technology inaugurated in Ben Tre
The Go Dang JS Company (GODACO) on January 19 inaugurated its food processing factory in An Hiep commune, Chau Thanh district, the Mekong Delta province of Ben Tre.
The factory was built on an area of 20,000 square metres in the An Hiep industrial zone, with total investment of 20 million USD.
The factory using technology transferred from the GFS Company of Thailand has a designed capacity of processing 10,000 tonnes of aquatic products a year to export to the European Union, the United States and Japan. It generates jobs for 400 workers.
GODACO Director Nguyen Van Dao said first products of the factory have been shipped to Singapore, Hong Kong and the UAE.
The company targets 23,000 tonnes of products in 2017, earning 1.75 trillion VND (77.5 million USD), with 70 million USD from exports.
VASEP believes in 7.4 billion USD of aquatic exports this year
Aquatic exports are likely to increase 5 percent from last year to 7.4 billion USD in 2017, despite difficulties in overseas markets and fiercer competition, the Vietnam Association of Seafood Exporters and Producers (VASEP) said.
It forecasts growth in shipments to the US, the EU and Japan – the three biggest markets. While the shipments of aquatic products to the US could expand 5 percent to 1.5 billion USD, those to the EU and Japan are likely to rise only 1 percent and 2 percent to some 1.2 billion USD and 1.1 billion USD, respectively.
At a meeting in Ho Chi Minh City on January 19, VASEP Chairman Ngo Van Ich said although aquatic exports encountered problems in the first three months of 2016, they started to rebound in the Q2 and grew for the rest of the year, reaching more than 7.05 billion USD for 2016.
Revenue rose by 7.4 percent from the previous year and contributed some 22 percent to total agro-forestry-fishery exports.
Vietnam shipped aquatic products to 161 markets in 2016 with 3.13 billion USD worth of shrimp and 1.67 billion USD worth of tra fish, both of which went up about 7 percent.
Deputy Minister of Agriculture and Rural Development Vu Van Tam described last year’s aquatic exports as impressive as the agricultural sector contracted in the first half of the year, and few believed shrimp export volume would reach 652,000 tonnes since only 190,000 tonnes were exported in the first six months of 2016.
He said facing an unfavourable situation, many seafood processors and exporters shifted to environmentally friendly development models instead of racing to export as much as they could.
While the quality of aquatic products improved last year, marine pollution along the central coast in early 2016 affected the prestige of Vietnamese seafood. Some countries enhanced examinations of fisheries products from Vietnam, said Nguyen Nhu Tiep – Director of the agriculture ministry’s National Agro-Forestry-Fisheries Quality Assurance Department.
VASEP Secretary General Truong Dinh Hoe said saltwater intrusion, high production cost of raw materials, strong competition and technical barriers in import markets will remain challenges for seafood businesses.
Agreeing, Tam warned of an emerging challenge with some countries protecting local production through technical barriers or food safety and quarantine regulations to hamper imports.
Businesses should keep updated on export markets to avoid having their goods returned, he said.
At the meeting, enterprises also asked the Government for support policies to ensure the domestic supply of raw materials, improve farming-processing-export links, and reduce production costs.
Implementation of water project to be extended
The Prime Minister has approved adjustments to an investment project on water supply and urban waste water treatment funded by the World Bank (WB).
The deadline for implementing the project will be extended to December 31.
The Prime Minister asked the State Bank to work with the WB to adjust the agreement on the project in line with law.
The Ministry of Construction and People’s Committees involved in the project were asked to ensure the implementation of the project on schedule.
Deputy Prime Minister Pham Binh Minh also adopted a proposal on projects to connect transport in northern mountainous provinces and upgrade the East-West Corridor in the Greater Mekong Sub-region using loans from the Asian Development Bank (ADB).
He also approved an investment project on technical support to enhance links in the East-West Corridor using non-refundable official development assistance from the ADB.
Financial mechanisms for the projects will be determined based on meetings between the Ministry of Planning and Investment and the Ministry of Transport with the bank.
The Ministry of Finance will coordinate with the Ministry of Transport and agencies and localities to build a finance mechanism.
Vietnam, US team up for food safety
The High Quality Vietnam Products Business Association, the American Chamber of Commerce in Vietnam and the Washington-based Global Food Safety Forum have signed a memorandum of understanding on co-operation in food safety.
Herb Cochran, AmCham Executive Director, called food safety an issue of concern in both Vietnam and the US.
“The first objective of the MoU is to help Vietnamese companies join global food supply chains under the US Food and Drug Administration’s (FDA) International Food Safety Capacity Building Plan,” he said.
The US imports 15 percent of its food, 20 percent of vegetables, 50 percent of fruit and 80 percent of seafood.
The US Congress requires that the “FDA develop an International Food Safety Capacity Plan to help foreign and food industries that export food to the US.”
The US FDA will provide “training of foreign governments and food producers on US requirements for safe food. To reach our objective, we will arrange delegation visits to the US and Vietnam, workshop and town hall meetings, websites in English and Vietnamese, Internet-based training programmes targeting company managers, technicians, and official representatives from safety regulatory agencies, special on-site training at Vietnamese companies.”
In March, a delegation will visit the US to meet with parties in the US Congress, US government agencies including FDA, USDA, USTR, USAID, State and Commerce, as well as business associations such as the International Food and Beverage Alliance.
In April, Dr. Rick Gilmore, founder and CEO of Global Food Safety Forum, will visit Vietnam on an exploratory mission to establish contacts, hold workshops, plan future events, and gauge the needs of relevant parties in business and government, he said.
“Our co-operation under the MoU will help both Vietnam and the US Government and business implement TPP and TFA (WTO’s Trade Facilitation Agreement). Ratification is an important legal step. Equally important is that businesses and government co-operate to understand and meet the food safety requirements.”
The signing ceremony was part of a year-end party of the Leading Business Club.
Underground scanning system to be installed at airport
HCM City Customs Department will soon deploy an underground scanning system for luggage at Tan San Nhat International Airport to facilitate entry of passengers and minimise time spent on procedures.
The deployment of underground scanning will allow all registered baggage of passengers that are entering to be checked via scanner without disassembly and damage.
If the scanner detects luggage with suspicious items, it will continuously be monitored throughout the time it move in the underground system until the procedures stage. When passengers receive the baggage, they will be directed to the inspection area and customs declaration for further execution.
Only those passengers who are believed to be carrying suspicious items in their luggage must take further steps of customs inspection, according to the department.
The application of the new system will also reduce the pressure on customs officers and they will have more time to focus on handling suspected cases and violations.
Meanwhile, the department will also apply the e-manifest system (a module used by airlines, shipping lines and forwarders for the submission of manifest and shipping documents) at Tan Son Nhat airport.
It is expected that the system will reduce the procedures and time taken on entry, exit or transit procedures. At the same time, customs authorities will apply the electronic chip system for tracking suspicious luggage to ensure strict management, improve efficiency while handling violations and preventing drugs trafficking and illegal weapons transportation across the border.
In a bid to promote reform and modernisation, since the beginning of the year 2017, HCM City’s Customs Department has implemented electronic monitoring procedures under Article 41 of the Customs Law for seaports and airports.
Accordingly, customs authorities and enterprises will connect via information technology systems to exchange data on imported and exported goods during customs clearance at seaports, simplifying procedures and reducing time and costs of enterprises.
Since last year, customs officers have deployed the container scanning system at large ports, such as Cat Lai, VICT port and Phuoc Long ICD, for inspections before exported and imported goods are loaded and unloaded, thereby accelerating the clearance of goods while ensuring strict management of customs.
New regulation prepares for BASEL II
The State Bank of Vietnam (SBV) has issued a new circular to prepare for the application of BASEL II standards in the domestic banking system.
Under Circular 41/2016/TT-NHNN issued recently, commercial banks must maintain a capital adequacy ratio (CAR) of at least 8 percent from January 1, 2020.
The new circular will replace Circular 13/2010/TT-NHNN that currently regulates minimum CAR of at least 9 percent for banks.
However, according to the central bank, commercial banks that are capable of implementing the new regulation earlier than the above date can register to apply earlier.
The central bank’s move is aimed to prepare for the application of BASEL II standards in the domestic banking system. Under BASEL II standards, minimum CAR is required at 8 percent.
According to a recent report from the National Financial Supervisory Commission (NFSC), minimum CAR of the entire banking system this year is estimated at 11.3 percent.
However, experts estimate that when the BASEL II is applied, the current CAR at banks would reduce sharply due to an increase in the amount of their risky assets.
The NFSC also reported that a pilot application of BASEL II at 10 banks showed that the CAR at the banks will reduce sharply compared with the current situation. Taking the four State-owned banks of Vietcombank, BIDV, Vietinbank and Agribank for example, their current CAR stands at nearly 9 percent, but it reduces to less than 8 percent when applying BASEL II standards.
Vietnam currently applies Basel I for the banking industry. However, the central bank has selected the 10 largest and most prestigious domestic commercial banks to apply in a pilot phase the BASEL II standards.
The banks, which will pilot capital and risk management methods according to Basel II standards, is due to complete the pilot run by 2018 and the Basel II application will be then deployed at other commercial banks in the country.
Basel II is a new, higher level for Vietnamese banks in accordance with Basel Accords standards set by the Basel Committee on Banking Supervision. The application is flexible to different countries but the overall spirit is tighter regulations on banking operations.
Industry insiders said the Basel II application in Vietnam would be a challenge for local banks; however, it is a must as it is believed to be the best solution to make Vietnamese banks healthier.
Le Trung Kien, Deputy Director of the SBV’s Department for Banking Operation Safety Policies, said banks would face challenges in human resources and finance when the Basel II is applied, however, applying Basel II’s standards is a key task listed in the programme on credit institution restructuring.
Besides this, Kien said, "it is essential for local banks to apply Basel II when Vietnam integrates with the global economy, as most of other regional banks have, so far, applied Basel II or even Basel III."
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 354 million USD and 890 billion VND (39.4 million USD) respectively at trade promotion events.
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 160 billion VND (7.09 million USD) 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.
Le Nguyen, a passionate for dragon fruit products
The Ham Duc dragon fruit cooperative in Binh Thuan province was set up in 2015 and is now headed by Ms Le Nguyen. In a little more than a year, they have established their trademark in the domestic and foreign markets.
le nguyen, a passionate for dragon fruit products hinh 0 Binh Thuan province is a principal producer of dragon fruit in Vietnam. In recent years, the price of dragon fruit has dropped sharply, causing great financial losses for local farmers. Ms Le Nguyen came up with the idea of establishing the Ham Duc dragon fruit cooperative to buy dragon fruit at a stable and reasonable price.
Ms Le Nguyen said “Since we began purchasing dragon fruit to make wine, farmers don’t have to accept the low prices offered by fruit wholesalers. We are now producing red and white dragon fruit wine. The wine is good for your health”.
Ms Le Nguyen has also done research to create other products like dried dragon fruit and dragon fruit juice. Her ideas have helped to boost local incomes and living standards.
Ms Nguyen Thi Hai, a member of the Ham Duc cooperative said “Our life has greatly improved since we joined the cooperative. It has generated stable jobs and income for us. The work of the cooperative is not too complicated. Anyone can do it”.
Ham Duc cooperative’s dragon fruit products are now available in many provinces and cities nationwide. And Ms. Le Nguyen recently signed a contract to export dragon fruit wine to Cambodia. The cooperative attended the 13th ASEAN-China Fair and signed a contract to sell its wine to the Chinese market. 2 batches have already been exported to China. Market demand for dragon fruit wine is growing.
“We plan to build a factory. The work is suitable for female workers. Even the elderly can do it. We are looking for new outlets for local dragon fruit,” Ms Le Nguyen noted.
The Ham Duc dragon fruit cooperative has become a role model for other local Farmers Associations to follow.
Sun Group opens Dragon Park in Ha Long
On January 25, Sun Group will officially open the biggest theme park in Southeast Asia, Dragon Park, in Ha Long.
The park, which is part of the Sun World Ha Long Park entertainment complex in Ha Long city of Quang Ninh province.
The park has 30 games and has been certified by Technischer Überwachungsverein (TUV).
This is the first theme park in Asia that is managed by Spanish brand Parques Reunidos, which manages about 60 parks in 14 countries in the world.
With area of 40 hectares, Dragon Park was designed to provide visitors with unforgettable moments.
Games are designed to suit people of many ages including children, teenagers, and adults.
For children, Dragon Park opens up a magical world with games inspired by well-known fairytales such as Magic Cup and Fairytale Train.
Children can also join mini tours to explore Paris and the Eiffel tower through the Tour de Paris.
Teenagers and the whole family can ride on the two-story carousel or on a boat in the river under the shade of bamboos.
The highlight of the theme park is games such as the Phi Long Than Toc roller coaster, the longest one in Asia with length of 1.1 kilometres, manufactured by B&M at limited number.
The Rhino Sling has players go around the giant horns and free fall atup to 65 kilometres per hour.
Experiental games such as Pirate Boat, Explorer and Dragon Track are a chance for visitors to explore Dragon Park in the best way. All the games at the park are imported from Europe.
Besides the games, Dragon Park also attracts tourists due to the scenery with over 100,000 flower bushes and 10,000 trees.
After playing, visitors can rest at one of the restaurants in the park and enjoy diverse dishes and high quality service.
Dragon Park is the second biggest part of Sun World Ha Long Park, which started operation after the Queen Cable Car made two world Guinness records and the Sun Wheel were introduced in June 2016.
Launched on the occasion of the lunar New Year, Dragon Park is ready to welcome millions of visitors in the holiday.
As Southeast Asia’s biggest water park, also in the same complex, is going to open to visitors in March, Dragon Park is the most modern tourism product Halong has ever had, and is expected to add to the appeal of the city.
Tuan Tu vegetable village in spring
Tuan Tu is a famous vegetable village in Ninh Phuoc district, Ninh Thuan province. It’s especially crowded with traders before Tet.
The Cham people of Tuan Tu village earn their living by growing vegetables, supplying tons of vegetables and fruits to the market.
Villager Chau Thi Ot says “Our grandparents grew watermelons, beans, and cabbages for the family. We have applied farming technology to grow many other types of vegetables, which bring us a stable income.”
Using modern technology, farmers in Tuan Tu village have increased their productivity and ensured food safety and hygiene. Tuan Tu farmers apply Vietgap standards to growing asparagus. Farm households have formed a cooperative which contracts to supply vegetables to companies and supermarkets.
Hung Ky , Head of the Tuan Tu Cooperative, says “We cannot meet all of the market demand for asparagus. Our lives have improved and some families are better-off.”
Hardworking farmers have turned Tuan Tu village, which was endowed by nature with fertile land and favorable weather, into a verdant and attractive tourist village.
Deutsche Bank expects Vietnam’s GDP to grow 6.4%
Thanks to the sustainable recovery of agriculture and export, Vietnam is expected to achieve GDP growth of 6.4% this year, up from 6.2% in 2016, said Juliana Lee, senior economist at Deutsche Bank, at a recent meeting with the media.
The economist said this forecast was carefully made, taking into account risks Vietnam might face given global economic uncertainties. However, this is less significant than the Government’s commitments to further reforms to tap growth potentials in the long term.
Deutsche Bank anticipates the boom of Vietnam’s economy based on export growth and steadily rising foreign investment, as well as the Government’s promises on further restructuring.
With considerable progress in economic reforms, supported by foreign capital inflows, the dong might strengthen, in contrast to the predictions of its steady devaluation against the U.S. dollar, said Lee. This would also entail risks affecting Deutsche Bank’s forecast for a growth rate of more than 6%, she added.
Vietnam can achieve progress in bank restructuring and bad debt resolution. Earlier, a detailed guidance on State ownership has been released, signaling an acceleration of State-owned enterprise (SOE) restructuring this year.
SOE restructuring is vital to the financial situation of Vietnam since it not only assists long-term growth but also improves the financial situation in the coming time, Lee said. For example, the proceeds from the sale of SOEs may be used to partly settle public debt.
Lee stressed the importance of tackling bad debt and boosting credit risk management to ensure the stability of the banking system, in case interest rates went up in the medium term.
In fact, Vietnam is looking for greater foreign investments.
Recently, Prime Minister Nguyen Xuan Phuc has unveiled the intention to raise the limit on foreign ownership in banks and make it easier for foreign investors to gain access to the domestic stock market, as early as at the beginning of this year. As a result, foreign investors may be given full control of struggling banks in Vietnam.
Overall, the senior economist at Deutsche Bank said conditions would remain favorable for business and investment in Vietnam. And the country is carrying out significant improvements in their business climate.
In the ease of doing business index of the World Bank, Vietnam has moved to 82nd in 2017 from 91st in 2016.
Despite its relatively good performance in terms of getting credit, registering property and dealing with construction permits, Vietnam still needs to make more efforts in terms of paying tax, starting a business and resolving insolvency. The State Bank of Vietnam is developing related laws to facilitate the settlement of bad debts.
The forecast of Deutsche Bank for Vietnam’s GDP growth in 2017 is a little lower than that given by Standard Chartered Bank five days before.
Jens Ruebbert, chief country officer of Deutsche Bank Vietnam, said his bank last year had struck a number of deals in the market of Vietnam, including the initial public offering of Vietjet Air, Thailand’s Central Group’s acquisition of Big C Vietnam and Singha Asia’s investment in Masan Consumer.
Microsoft and FPT develop strategic partnership through cloud development
US technology giant Microsoft and FPT, a local leading information technology and telecommunications company, has signed an enterprise agreement related to digital transformation, particularly cloud deployment.
The agreement (EA) tightens the long-term and sustainable strategic partnership that has been lasting for almost 20 years between the two leading IT corporations.
Specifically, FPT will be the first and the largest enterprise in Vietnam to deploy Microsoft’s cloud computing for the entire operations of the corporation in order to optimise operational efficiency, improve competitiveness.
Besides, FPT will also promote the provision and deployment of Microsoft's advanced cloud services to the corporation's clients.
“As the two global and local IT corporations, Microsoft and FPT want to continuously strengthen this long-term, sustainable relationship via technology cooperation. The move to cloud by Microsoft technology will surely help FPT further develop, complete its mission to bring technology, knowledge to enable Vietnam to reach potential and partly address the socio-economic issues,” said Vu Minh Tri, CEO of Microsoft Vietnam.
In the first phase, FPT will adopt Microsoft Office 365 to move its entire system and data to the cloud, at the same time deploying One Drive for Business and Skype for Business to optimise operating performance.
In the next phase, FPT and Microsoft will strongly develop the cloud (including Office 365 and Microsoft Azure) to digitally transform for clients in Vietnam.
According to FPT CEO Bui Quang Ngoc, cloud services are strongly growing worldwide and gradually replacing traditional ones to help businesses solve the problem of cost, human resources and risk management.
FPT is doing digital transformation in all areas such as management, technology, sales, and customer service.
The deployment of Microsoft Office 365 cloud is one of FPT’s steps on digital transformation way to become the pioneer enterprise in the fourth industrial revolution.
“With the experiences and capabilities recognised by its customers and partners, FPT will provide optimum, beneficial and truly unique solutions and services for customers in the digital revolution,” Ngoc stressed.
Nowadays, most of the world’s large technology companies have adopted cloud computing.
However, in Vietnam, the majority of businesses are still reluctant to move their system and data to cloud, particularly large ones. Such a large tech corporation as FPT pioneers in application Microsoft Office 365 advanced cloud for a large number of users will contribute to push other businesses access and adopt cloud.
With the strength of Vietnam’s leading provider of IT services, FPT and Microsoft will jointly develop cloud market segment in Vietnam and other countries.
Earlier, in 2010, Microsoft and FPT signed the cooperation agreement to develop cloud computing services. FPT has been distributing, deploying Microsoft's software and cloud services for a lot of large enterprises.
One major project of FPT Japan’s transformation from Notes to Office 365 with Calsonic Kansei (the world’s leading car part manufacturer) was selected as a case study by Microsoft Japan and posted on the corporation’s blog.
FPT is currently the most senior partner of Microsoft. In their 20-year history, Microsoft and FPT have collaborated to bring Microsoft’s powerful solutions to customers in Vietnam and other countries, such as e-government (eGov), eTax, eCustoms, and eHospital, among others.
The two parties also cooperate in network architecture building, personnel training, hardware purchase, software distribution and development in order to provide the comprehensive cloud computing solutions that are proper for Vietnamese customers.
French kiwifruit approved for import into Vietnam
The Vietnam Fruit and Vegetables Association has unveiled that fresh kiwifruit from France have been approved for import and will soon be hitting supermarket shelves across the country.
The Association made the announcement at a joint news conference in Ho Chi Minh City with officials from the French Consulate General at which they stated the organically grown kiwifruit have undergone thorough testing and pose no pest or health safety risk.
Kiwifruit are the second fruit from France to receive approval for market entry into Vietnam. Presently, French apples are sold at supermarkets throughout the country such as Big C, Coopmart and MM Mega Market.
AkzoNobel launches global chemicals start-up challenge
AkzoNobel has just launched Imagine Chemistry, providing an exciting opportunity to partner with start-up firms, students, research groups and career scientists from across the world to jointly exploit the knowledge of chemistry and solve several real-life chemistry-related challenges.
The challenge is part of an integrated approach to further deploy AkzoNobel’s innovation capability in support of its growth ambitions.
The company believes there is tremendous potential even in mature chemistries, and the challenge aims to tap into that as well as uncover new opportunities.
Imagine Chemistry, launched in conjunction with global professional services firm KPMG, aims to address a number of specific societal challenges as well as finding new sustainable opportunities for AkzoNobel businesses.
“Our world is made of molecules and we believe that chemistry, mastering the elements, is essential to making the world a better place,” explained Peter Nieuwenhuizen, RD&I director for AkzoNobel’s Specialty Chemicals business.
“To get there, we believe open innovation will be vital, seeking ideas both internally and externally to advance our technology and mutually gain from creative thinking. Imagine… with all of our knowledge of chemistry, we can work together to solve some of life’s biggest problems. It’s a great opportunity for everyone to get involved.”
Imagine Chemistry focuses on finding solutions within the following five areas: Revolutionizing plastics recycling; wastewater-free chemical sites; cellulose-based alternatives to synthetics; bio-based and biodegradable surfactants and thickeners; and bio-based sources of ethylene
In addition, there are “open challenges” for broad ideas in two further areas: Highly reactive chemistry and technology and sustainable alternatives to current technologies.
All challenges are business-driven and should go commercial in a 3-5 year time horizon.
A dedicated online challenge platform has been launched, operated by KPMG, where participants can submit their ideas and solutions. Anyone who registers will get feedback from AkzoNobel chemicals experts.
The challenge will give the winners the chance to see their ideas become a commercial reality.
“We will provide access to customers, investors, subject matter experts, mentorship and an accelerator programme, along with additional support. The collaboration could take on many forms: a joint development agreement, having AkzoNobel as a launch customer, organizing partnerships, or investing in your startup. Our ultimate goal is to innovate together,” Nieuwenhuizen added.
“Imagine Chemistry is just the latest example of the commitment of AkzoNobel to fostering innovation, and also to doing innovation differently,” he added.
It follows a recent decision by the company to participate in a €50 million collaborative venture capital fund, run by Icos Capital, that will focus on investing in early stage chemical and clean technology innovation start-ups, as well as plans to establish an Open Innovation Centre at the AkzoNobel Chemicals Research Facility in Deventer, the Netherlands.
“Vietnamese people do perform really well at natural science, and chemistry is a prominent field. As the government is increasingly investing in natural science education, chemistry-related majors have been rising strongly in Vietnam that attract thousands of young talents,” said David Teng, general director, AkzoNobel Paints Vietnam.
“I believe that Vietnam is a potential country for chemical talents to grow, and AkzoNobel – as a leading company with chemistry background, see itself to play an important role to contribute to the development of chemistry in Vietnam.”
In Vietnam, the Imagine Chemistry challenge is organised nationwide, opening an opportunity for students, researchers and especially for all those who have a huge passion for chemistry to turn their concepts into reality.
Businesses encouraged to take actions for consumer rights
On January 20, the Ministry of Industry and Trade’s Competitive Management Department launched a programme in Hanoi calling for businesses to take actions to protect consumer rights.
The programme’s launch is designed to raise businesses’ social responsibility for consumers by complying with legal regulations on the protection of consumer rights, said Deputy Minister of Industry and Trade Tran Quoc Khanh.
The Law on Protection of Consumer Rights has contributed to building a healthy consumption environment in Vietnam since it become effective in July 2011, he said.
Under the programme running from the launching day to the end of March, goods and services trading companies can conduct activities such as building procedures to receive and address customers’ complaints, opening training courses and workshops on consumer rights and safe consumption, and providing free repair of products for customers, among others, said deputy head of the Competitive Management Department Trinh Anh Tuan.
Tata Group investigates different angles in Vietnam
India’s Tata Group announced plans to expand into Vietnam in a wide range of business sectors, focusing on energy, coffee processing, and agricultural machinery.
Indronil Sengupta, executive director of Tata Group in Vietnam, confirmed in a recent meeting with President Tran Dai Quang that the group’s expansion plan will target solar and wind power projects, a coffee processing plant in Binh Duong, and the installation of agricultural machinery in the Mekong Delta.
The movement came after a series of its subsidiaries, such as Tata Power, Tata Projects, Tata Chemical, and Tata Motors, were reported to be on the lookout for opportunities in Vietnam. Optimism is high, although the failure of Tata Steel’s US$5 billion steel project in the central province of Ha Tinh is still fresh in the memories of seasoned employees.
“The demographics and the economic development stage of [Vietnam] represent a market for several products and services from Tata Group,” the group stated in a report on its website.
In late 2016, Tata Coffee announced plans to set up a state-of-the-art freeze-dried coffee plant in Vietnam with an installed capacity of 5,000 tonnes per year. The plant in Vietnam will serve global customers of Tata Coffee new product mixes of freeze-dried coffee, according to the website.
Sanjiv Sarin, managing director of Tata Coffee, in a press release issued late last month, said, “This move is in line with the company’s strategy to strengthen focus on differentiation, premiumisation, and customer-centricity. Vietnam offers an attractive business environment besides being the largest Robusta coffee-growing region. The plant will help us further expand our global footprint.”
Tata Power plans to increase investment in Vietnam to exploit business opportunities in an increasingly energy-thirsty market. To supply such energy, it is looking at renewable as well as thermal sources.
Tata Power proposed to invest in the build-operate-transfer (BOT) Long Phu 3 thermal power plant in the Mekong Delta province of Soc Trang, after it had been granted approval by the Vietnamese government to build the $2 billion plant in the province. In November 2013, the company inked a memorandum of understanding regarding the plant’s construction with the Ministry of Industry and Trade.
In a previous interview with VIR, Sengupta said that, with the potential growth of the economy and the expanding market, he believes that Vietnam will remain at the top of Tata Group’s list of interests. Although he also mentioned that the 2013 failure of Tata Steel’s $5 billion steel project in Vietnam may cause the group to take heed.
Jitendra Manghnani, the country manager at Tata International, a subsidiary of Tata Group, said in his business trip to Vietnam that the enterprise would invest in an agricultural machinery plant in the Mekong Delta city of Can Tho, according to Can Tho’s official website.
The plant would supply machines for the Vietnamese market as well as overseas. The capital investment for the project, still undisclosed, would likely be enormous.
“Tata International has been distributing farm machinery in Africa through strategic partnerships with reputed manufacturers and global leaders.
Our in-depth understanding of the needs of the farming business makes us a reliable partner that farmers depend upon in the places where we operate,” he said.
National Trade Promotion Programme under scrutiny
On January 19, the Trade Promotion Agency under the Ministry of Industry and Trade hosted a conference on the National Trade Promotion Programme aiming to expand markets and diversify export commodities.
In his speech, deputy head of the Trade Promotion Agency under the Ministry of Industry and Trade Ta Hoang Linh said the programme targets European countries- France, German, Belgium and Italy as well as Trans-Pacific Partnership (TPP) members such as Australia, the Republic of Korea, Japan and New Zealand, along with countries in the ASEAN Economic Community like Laos, Cambodia and Myanmar.
The management board of the programme has worked with associations, localities and enterprises immediately to devise trade promotion activities according to sectors and economic regions in medium and long terms in order to build feasible and high-quality projects.
The programme also focus on developing domestic market, especially in rural, border and disadvantaged areas, and carrying out effectively the campaign “Vietnamese prioritise using Vietnamese goods”, he said.
Deputy Minister of Industry and Trade Tran Quoc Khanh said the ministry's practical activities aim 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 valued at US$354 million and US$39.4 million.