BUSINESS IN BRIEF 8/4
Businesses keen on clean energy plants in Dak Lak Province
Many domestic and foreign enterprises have been granted investment licenses to develop solar and wind power projects in the Central Highlands of Dak Lak, according to the provincial People’s committee.
It is sunny and windy much of the year in Dak Lak province, giving it great potential to develop clean energy, according to experts.
According to a national master plan on solar and wind power development to 2020 with a vision to 2030, Dak Lak province aims to bring clean energy capacity to about 5,250 MW.
Wind power will be developed in Krong Buk, Cu M’gar, Krong Nang, Ea H’leo districts and Buon Ho town with a tentative capacity of 1,382 MW. The rest of the electricity will be generated at solar power plants.
The HBRE Wind Power Company Ltd. has invested 270 million USD to build a wind farm with total capacity of 120 MW in Dlie Yang Commune, Ea H’leo District.
The farm, the first of its kind in the Central Highlands, is designed to produce 450 million KW of electricity per year.
For solar power projects, Vietnam’s Xuan Thien Company Ltd. will invest 2.2 billion USD in a 2,000MW solar installation in Ea Sup District.
Long Thanh Infrastructure Development and Investment Company has planned to invest 310 million USD in a 250MW solar installation while TH True Milk Group will build a 1,117 MW solar plant on an area of 1,117 ha in the same locality.
Meanwhile, the US power group AES Corporation has spent 750 million USD on a solar factory, which will have the capacity to generate 300 to 500 MW in Ea Sup and Buon Don Districts.
Hanoi expects to have 40,000 new enterprises in 2017
Hanoi expects to have 40,000 new enterprises in 2017, with about 30-35 percent of them operating in the innovation and creativity fields.
The city also plans to establish a service area to support start-ups in the year.
To realise the targets, the municipal authorities have taken various measures, focusing on administrative reform and preferential policies.
Enterprises will be supported through programmes and projects, helping them improve competitiveness and build brands.
Newly-established enterprises are expected to create jobs for 150,000 labourers, and contribute 40 percent to the city’s GDP.
Last year, the number of newly-established firms in Hanoi was 36,442.
Most of these operate in real estate, health care and social assistance and education-training.
HCMC Secretary promotes trade, investment in Japan
Secretary of the Party Committee of HCM City Dinh La Thang is on a visit to Japan from April 6-15, aming to enhance trade and investment ties between the city and Japan.
During the visit, Thang is scheduled to meet local authorities and businesses to seek cooperation in infrastructure development, transportation, tourism and high technology.
The secretary will attend events promoting trade, investment and tourism in Osaka, Tokyo, Hyogo, Aichi and Nagano. Especially, conferences in Osaka and Hyogo are intended to call for investment in the city’s key projects and introduce its potential for investment and tourism.
He will tour several industrial parks and hi-tech agricultural and industrial projects in Japan.
On April 6, Secretary Thang met with Vietnamese Ambassador to Japan Nguyen Quoc Cuong in Tokyo where he updated Cuong on socio-economic development in HCM City.
The city reported economic growth of 7.46 percent in the first quarter of 2017, higher than the same period last year, while about 85 trillion VND in tax payment was collected, Thang said.
At the same time, it confronted several major challenges in terms of infrastructure, transportation, environment, food safety and security, he added.
He expressed his hope that the Vietnamese Embassy will continue connecting HCM City and Japan so that more Japanese investment will enter the city.
Last year, Japan ranked sixth among countries and territories investing in HCM City.
Hanoi needs comprehensive tourism product development
Branching out tourism products is necessary to lure more tourists to the capital city of Hanoi, heard a tourism meeting held by the municipal People’s Committee on April 6.
Hanoi has more than 5,000 historic cultural relic sites, including those recognised by the United Nations Educational, Scientific and Cultural Organisation (UNESCO) like the Imperial Citadel of Thang Long and a system of 82 stone steles at the Temple of Literature 1,350 craft villages and various non-tangible cultural heritages.
However, the city lacks international-scale entertainment zones and typical tourism packages to compete with neighbouring countries.
Creating new products and renewing available resources will help build Hanoi into a high-quality destination, said Nguyen Van Tuan, General Director of the Vietnam National Administration of Tourism.
Tourism projects have been brought to the city while further infrastructure and human resource development is needed to revitalise tourism sites like Hanoi’s Old Quarter, Hoan Kiem Lake and eco-tourism sites, Tuan stressed.
Nguyen Tien Dat, Deputy Director of TransViet Tourism Company, suggested adding cultural activities to pedestrian-only areas around Hoan Kiem Lake.
Local people should be encouraged to wear Ao Dai (traditional long dress) and fashion designers can organise Ao Dai show in the areas, he said, adding that a cultural historic space should be set up through exhibitions of photos, vehicles and costumes.
Hanoi should zone off key tourism areas like Malaysia did, with Kinabalu a major eco-tourism and Kuala Lumpur a place for meeting, incentive, conference and exhibition, entertainment and shopping tourism.
The city leaders agreed to support enterprises, organisations and individuals to develop tourism in the city.
Vietnam Ambassador discusses trade links in Japan
Trade opportunities with Japan were explored when Vietnam Ambassador Nguyen Quoc Cuong visited Kagawa, the island nation’s smallest, most abundant prefecture today (April 7).
The visit of Ambassador Cuong aimed to showcase Vietnam as an investment and business destination for Japanese investors, especially in the areas of science, innovation, infrastructure, agriculture and transport.
During the visit, the Ambassador met with key business representatives of the prefecture, which is brimming with historical and cultural attractions and is also within easy access of the Japanese big cities of Tokyo, Osaka, Kyoto, and Hiroshima.
vietnam ambassador discusses trade links in japan hinh 1 He also visited Tokushima Prefecture and met representatives from the public, private and civil society sectors and assured them that Vietnam is always happy to support trade links between the two economies.
Near the end of the day, Mr Cuong toured Kagawa University, one of the oldest institutions of higher learning in Japan, which specializes in pure and applied research in bioscience and biotechnology.
Dragon Capital signs joint venture to expand in Myanmar
Dragon Capital Group and Ruby Hill Financial Company, a member of Loi Hein Group from Myanmar, have agreed today to set up Ruby Hill Microfinance, a new microfinance firm based in Yangon, Myanmar.
At the signing ceremony in Ho Chi Minh City, the two partners announced that Ruby Hill Microfinance will commence business with the initial capital commitment of US$5 million.
Dragon Capital and Loi Hein Group will respectively own 49% and 51% of the stakes in the new firm.
Ruby Hill Microfinance will focus on promoting inclusive loan products and services to the burgeoning workforce driving Myanmar’s rapid economic development.
The firm will be strategically led by Dr Sai Sam Htun and Dominic Scriven, the respective chairmen of the two groups. They will directly chart the business course of the microfinance institution from its board of directors.
Meanwhile, Trinh Proctor, Loi Hein Group’s chief strategy officer, has been appointed as CEO.
The formation of Ruby Hill Microfinance will combine the banking and microfinance expertise developed by Dragon Capital Group in Vietnam and the Greater Mekong Subregion with the local presence and knowledge of Loi Hein Group, one of Myanmar’s largest business conglomerates.
Ruby Hill Microfinance aims to serve at least 50,000 consumers in its first year of business, according to chairman Dr Sai Sam Htun. The firm plans to consistently raise its capital to US$1.2 billion within the next ten years.
“The success of Ruby Hill Microfinance is of paramount importance to Dragon Capital Group, as it is our first investment in Myanmar,” said Dominic Scriven, chairman of Dragon Capital. He was glad to collaborate with Loi Hein Group to help the Burmese gain access to credit and escape poverty.
The United Nations Capital Development Fund estimates that more than 50% of Myanmar’s 60.9 million strong population had no access to financial services. The total unmet financing demand in Myanmar is estimated at around US$1 billion, which presents a great opportunity for microfinance services.
Robins to run midnight sales on April 8
Robins department store, a member of the Central Group Vietnam, will run a midnight sales program on April 8 from 9:30 a.m. till midnight at its property in the Crescent Mall in HCM City’s District 7.
This is a special promotion program to bring a unique shopping experience to customers with thousands of gifts and up to 50% discounts on hundreds of fashion, cosmetic, accessory and household appliances’ brands like The Body Shop, Yves Rocher, Bobbi Brown, Kanebo, iBasic, Lovell, Vera, Triumph, Vascara, Lemino, Travel Point, JBL, SuperSports, Akemi, Jean Perry, Komonoya, and Sanrio.
For shopping bills worth from VND700,000, customers will receive vouchers worth VND50,000 while customers with shopping bills worth from VND1.2 million will get vouchers worth VND100,000.
The One Card’s holders will be given Robins’ pillows for any shopping bills worth from VND1.2 million (each customer can receive a maximum of two pillows). New membership card holders will get canvas bags, notebooks or Robins helmets.
Furthermore, Robins also hosts a lucky draw for shoppers with their bills from VND1.2 million during the golden hours from 10 a.m. to 12 p.m., from 2 p.m. to 4 p.m., from 5 p.m. to 7 p.m., from 7 p.m. to 9 p.m. and from 10 p.m. to 12 a.m. Interesting prizes include TV Samsung 40”, Bluetooth JBL speakers, iPad Mini 2 32G, and Samsung Galaxy J7 Prime G610.
This is the fourth time Robins has joined hands with the Crescent Mall to hold the midnight sales program.
Hanoi district to resettle street vendors in local market
Authorities in Hanoi will reserve a part of the Thanh Xuan Bac Market in Thanh Xuan District for those street vendors who have been forced off the sidewalks in ongoing campaigns to restore order on the streets.
The vendors would have the first three months free from rent for market space, according to a recent directive from the Thanh Xuan administration.
According to Nguyen Xuan Luu, chairman of the Thanh Xuan People’s Committee, up to 70% of households in the district have voluntarily reorganized their business and removed items that previously occupied the capital’s sidewalks following the call of local authorities.
To assist street vendors in need of a location to carry on with their business, the district’s administration has asked its Economic Division to work with managers of the Thanh Xuan Bac Market to come up with a ‘resettlement’ plan for the vendors.
Accordingly, kiosks inside the market measuring between three and four meters in width will be reserved for those who wish to find a permanent space for business.
The first three months’ rent for the kiosks will be waived, Thanh Xuan officials said.
Those who want to continue ‘street vending’ or cannot afford to pay the rent for a kiosk will be allowed to sell in the market’s front yard.
If the market runs out of space, vendors will be permitted to sell their wares on the 200-square-meter first floor of the district’s Center for Commercial Services, which is next to the market.
Samsung to assist Vietnamese businesses in producing sophisticated electronic parts
On April 5, Samsung Vietnam officially kicked off their consultation programme for Vietnamese enterprises, assisting them in joining the component supply chain for the year 2017.
According to the roadmap, the consultation programme started in 2015 with focus on industries such as printing, packaging, and plastic moulding. In 2017, Samsung will expand their field of consultation to hi-tech industries such as electric and electronics (PCB, speakers built into TV, wire harness and more) to help Vietnamese enterprises produce sophisticated electronic parts which have added-value and hi-tech content in the global supply chain.
Samsung’s target in 2017 will be to provide consultation for 12 Vietnamese suppliers, which would bring the total number of business consultees to 26 since the year 2015. And Samsung affiliates like Samsung Display Vietnam and Samsung Electro-mechanics Vietnam will join this programme for the first time.
Also in this year, Samsung will launch a pilot model for tier-1 vendors to guide tier-2 vendors, creating a ripple effect in Vietnam’s supporting industry. This turning point demonstrates the Samsung’s commitment in increasing localisation rate, supporting Vietnamese businesses to get further involved in Samsung’s component supply chain and contributing to the development of Vietnam’s supporting industry.
With 12 Vietnamese firms participating in the consultation programme in 2017, Samsung will continue to send South Korean experts experienced in the field of final product technology and production quality control to directly guide them for 12 weeks. The South Korean experts will survey and assess local firms for two weeks and directly consult and work with them in the following 10 weeks in reforming production procedures and complete all standards in the product and parts supply process for Samsung’s factories in Vietnam.
In response to the call of the government of Vietnam, which is raising the localisation rate and the presence of Vietnamese enterprises in Samsung's component supply chain, since 2015, Samsung’s supporting programmes have helped increase the competitiveness of Vietnamese enterprises, bringing positive achievements in improving equipment efficiency as well as reducing inventory days and poor-quality stages. Through the consulting, all suppliers have achieved good results, including average 25 per cent reduction in defect rate and a 30 per cent increase in manufacturing capacity
“During the past two years, Samsung has always endeavoured to support Vietnamese enterprises in increasing their competitiveness in production and product quality. The consultation expansion into hi-tech industry with the aim of assisting local firms in producing sophisticated parts and joining the value chain is a strong affirmation for Samsung's long-term and sustainable commitments in Vietnam,” Han Myoung Sup, president of Samsung Complex Vietnam, said.
This consultation programme is one of the Samsung’s efforts to dramatically increase the number of local firms participating in its supply chain with 201 vendors in total (23 tier-1 vendors and 178 tier-2 vendors). They are participating in supply chain for three Samsung’s plants in Vietnam, namely Samsung Electronics Vietnam (SEV), Samsung Electronics Vietnam Thai Nguyen (SEVT), and SEHC Complex in Ho Chi Minh City.
It is expected that, Samsung’s total number of tier-1 vendors will increase to 29 ones in 2017. Besides, Samsung Vietnam has also recorded the significant breakthrough in raising the localisation rate of products from 35 per cent in 2014 to 57 per cent at present. This year, the turning point in supporting programme for high-tech enterprises will promisingly create more opportunities for Vietnamese suppliers to join Samsung's global value chain as well as help Samsung achieve its goal of increasing localisation rate in 2017.
Private sector working with government in development
The private enterprise community is a companion of the government in economic development in 2017, Mr. Ngo Huy Giam, Secretary General of Vietnam Private Sector Forum (VPSF) told the Creation of a Favorable Business Environment, Promoting Trade Facilitation in Vietnam seminar held on April 4.
The aim of the forum was to bring into full play the pivotal and positive role of the business community and the private sector in working with the government and was held by VPSF together with the EU-Vietnam Trade and Investment Facilitation Investment Project (EU-MUTRAP).
Enterprises and business associations attending the conference also pointed out that difficulties and longstanding problems in the investment, production, and business environment have been proposed by many agencies but solutions are yet to be found.
Specific issues included problems in the implementation of tax procedures, social insurance, customs procedures, and specialized inspection management procedures (import / export licensing, quality control of food safety, animal and plant quarantine, and cultural inspection).
Associations such as the Vietnam Association of Logistics Services, the Association of Textiles, Footwear, Fisheries, Cotton, Wood and Forest Products, and the Japan Business Association, as well as Vietnamese enterprises, shared their thoughts at the seminar.
The VPSF also stated that management issues and regulations are in tune with the idea of a constructive government.
Mr. Giam also emphasized that consultation, cooperation, and public-private dialogue are solutions in dealing with the difficulties and longstanding policy and legal issues.
VPSF has also compiled a plan to assess and build reform solutions for enterprises based on their difficulties.
This will help businesses follow the progress of their petitions. Forums and associations will more actively participate in policy matters, and relevant agencies will understand business insights and views.
The difficulties in import-export procedures were also discussed. Mr. Hoang Ha, CEO of FPT Group, told VET that complex customs procedures have had a major impact on the import and export activities of manufacturing enterprises, including FPT.
SCG reboots Vietnam's first petrochemical complex
Thai industrial conglomerate the Siam Cement Group (SCG) has recently re-signed a joint venture contract and articles of association with the Vietnam Oil and Gas Group (PetroVietnam) to become the two largest investors in the Long Son Petrochemicals (LSP) Complex, reviving the long-delayed project in southern Ba Ria Vung Tau province.
SCG, through its wholly-owned subsidiary Vina SCG Chemicals (VSCG), previously acquired a 25 per cent stake from Qatar Petroleum International (QPI) in LSP Limited, the investor of the LSP Complex, according to a statement published on SCG’s website.
The $36.1 million acquisition directly and indirectly increased SCG’s stake in LSP Limited from 46 to 71 per cent and continued to strengthen its position as a major investor in Vietnam’s first petrochemical complex. The remaining 29 per cent is held by PetroVietnam.
Investment capital for the project is now $5.4 billion, up from the $3.7 billion in the initial investment certificate. “We have rationalized to get the best project,” said Mr. Dhep Vongvanich, SCG Vietnam’s Managing Director. “There have been some changes in product types and production scale. The project has also received good support from local authorities and has paid land rentals for a period of 50 years and is now just waiting for construction.”
The project is expected to receive an adjusted investment certificate in the second quarter, for construction to begin in the third quarter, with an estimated operational date of 2021.
SCG has been looking for a new partner in the project since 2015, after QPI decided to withdraw, and purchased the entire 25 per cent stake from Qatar Petroleum Vietnam Limited (QPIV), a division of QPI.
The project will be financed through a combination of equity and debt, the final decision on which is expected to be made in the first half.
Located some 100km from Ho Chi Minh City, LSP is the first petrochemical complex in Vietnam, with a goal of developing a 1 million ton ethylene cracker with a flexible gas and naphtha feed, creating an olefin capacity of up to 1.6 million tons per year.
Entering Vietnam in 1992, SCG is a century-old Thai corporation with interests in cement production, construction materials, chemicals, and packaging. Regionally, it has investments in Indonesia, Vietnam and Cambodia. As at the end of 2016, it had invested more than $800 million in Vietnam via a number of projects.
It invests heavily in core businesses, including construction materials, petrochemicals, and packaging. In addition to direct capital inflows, it has also expanded its investment in Vietnam through mergers and acquisitions (M&As) in recent years. As at the end of 2016, its total assets in Vietnam stood at about $943 million.
The group last month announced it would pay $156 million to acquire 100 per cent of the Vietnam Construction Materials JSC (VCM), an integrated cement producer in central Vietnam.
Hanoi encouraged to create more attractive tourism products
Hà Nội’s tourism industry has made many significant achievements in recent years, but its development has not lived up to its potential or its expectations, tourism managers and enterprise workers agreed at a conference in the capital city.
Held within the framework of Việt Nam International Travel Mart at the International Exhibition Centre, the conference aimed to enhance tourism cooperation among nations, organisations, cities and provinces of high tourism potential.
The event also created opportunity for state tourism organisations to receive constructive feedback and support to overcome difficulties.
Việt Nam’s tourism in general — and Hà Nội’s in particular — have achieved obvious development. In 2016, the total number of tourists to visit the capital reached 21.8 million, increasing by 11 per cent over 2015. Meanwhile, the figure of international tourists to Hà Nội was 4 million, increasing by 23 per cent in comparison with the previous year.
The development has transformed economic structures and created job opportunities. It also has improved living standards, global integration and the national image.
According to Nguyễn Văn Tuấn, Vietnam National Administration of Tourism’s general director, Hà Nội possesses many tourism resources that make it a high quality destination. There are two options for Hà Nội’s tourism development: creating new products and renovating the old ones.
In creating new products, the city has attracted many investors to launch large-scale tourism projects. However, to refresh available products like the old quarter, Sword Lake or cultural heritage sites, the tourism sector needs to improve their quality by investing in infrastructure and human resources.
Nguyễn Tiến Đạt, the vice director of TransViet Company, argued that the pedestrian zone around Sword Lake, a temporary tourism product in the city, has not met its expectations. He suggested the introduction of more diversified cultural activities to enhance its attractiveness, like áo dài zone to display Việt Nam’s traditional dress or photo exhibition capturing each period of Hà Nội.
According to Nguyễn Quang Lân, the chairman of Việt Nam Tourism Association, Hà Nội needs to construct more international-standard leisure centres. Moreover, it is important to organise the tourism zones within the city to clearly identify its major tourism areas.
The conference also witnessed the signing ceremony of the cooperation agreement between Hà Nội and other provinces including Huế, Đà Nẵng, Quảng Nam, Điện Biên, Lào Cai, Sơn La, Nghệ An, Thanh Hóa, Ninh Bình and Hòa Bình.
Industrial salt import limited to 102,000 tonnes
The Ministry of Industry and Trade (MoIT) has limited import quota for industrial salt to only 102,000 tonnes in a bid to support domestic salt production, the ministry’s chemical department said.
The decision will take effect from July 1 and last until December 31, according to the Công Thương (Industry & Trade) newspaper.
Although the demand for industrial salt import is very high, MoIT still has to tighten import quota for salt so as not to affect the domestic salt industry, Nguyễn Văn Thanh, head of the chemical department, said.
The salt import quota has been limited to 102,000 tonnes, but in practice, the actual quantity of salt allowed to be imported may be much lower than the quota, estimated to be just some 40,000 tonnes, Thanh said.
According to the Agro-Forestry Processing and Salt Industry Department under the Ministry of Agriculture and Rural Development, in the first two months of 2017, the quantity of handmade salt reached nearly 2,600 tonnes while industrial salt touched over 11,100 tonnes.
By the end of February 2017, the total quantity of stockpiled salt was estimated at some 400,000 tonnes. However, many enterprises producing chemicals and medicines continue to face a shortage of industrial salt.
Salt produced in the country is mostly handmade and used for cooking and food processing, while enterprises need industrial salt refined from crude salt to use as the main raw material in medical products and chemical production. Therefore, enterprises are greatly in need of industrial salt, which has low domestic production due to a low-tech salt refining facilities, a chemical manufacturing company based in HCM City told Công Thương (Industry & Trade) newspaper.
Price spike sparks tra fish farming rush
Many farmers in the Mekong Delta are racing to breed tra fish (pangasius) as tra fish prices have climbed to VND27,000 a kilo, the highest in recent years, Tuoi Tre newspaper reports.
Experts ascribed the increase in tra fish prices to strong exports to the Chinese market but China is a highly unpredictable market. Therefore, farmers may face heavy losses if market conditions turn tough.
Pham Thanh Nhi, head of the Agriculture Division in Hong Ngu District in Dong Thap Province, said local farmers have shifted from growing snakehead fish to tra fish as the price of the latter is soaring while snakehead fish are marking down.
Truong Van Dien, director of Phu Thuan B seafood cooperative in the province, said the facility has not been able to meet the strong demand.
Vo Hung Dung, vice chairman of the Vietnam Pangasius Association (VN Pangasius), said the tra fish price had risen to record highs as breeder fish are getting scarce and tra fish exports to the Chinese market are edging up.
Pangasius shipments to the northern neighbor last year accounted for 18% of the country’s total, Dung added.
Dung said the association was looking into the Chinese market to make recommendations for exporters.
Nguyen Van Nghiep, who has a tra fish farm of over 8,000 square meters in An Giang Province, said the current fish price is a big dream of farmers over the past years.
Transport Ministry halts equitization of five entities
The Ministry of Transport suspended equitization of five public services entities under its management in the first quarter of this year.
These entities were the Vietnam Aviation Academy, Thang Long Transportation Vocational School, Nam Thang Long Hospital and the transport hospitals in Vinh and Danang cities, according to a report on equitization of entities under the ministry in quarter one.
The report did not clarify reasons for the suspension but sources told the Daily earlier that they wanted to operate as financially-independent entities, instead of going public.
In May 2015, the ministry sought the Government’s nod to implement a pilot scheme to equitize 12 out of its 114 entities in the health and educational sectors. After the Transport Hospital went public in late 2015, the ministry told scores of entities under its umbrella to prepare their equitization plans.
Later, the academy, the school and three hospitals won approval from the Government to call off their equitization plans.
In the first quarter of this year, Vietnam National Shipping Lines (Vinalines) had to reassess its corporate value determined by December 31 last year and map out a new equitization plan as required by the Prime Minister.
As for the equitization of Airports Corporation of Vietnam (ACV), the firm struck a basic investment agreement with French group Aeroports de Paris in January this year and is now in talks to sell its shares. The ministry is expected to ask for the Prime Minister’s approval to deal with relevant problems that are beyond its authority.
Higher price cap for tra fish fillets
The Ministry of Agriculture and Rural Development has issued a circular capping the ratio of ice at 20% in net weight of frozen tra fish fillets for export, with effect from May 5 this year.
Circular 07/2017/TT-BNNPTNT, which provides regulations and standards for frozen tra fish fillets and seafood, comes after nearly 27 months of debate between seafood firms and relevant agencies on the ice-to-fish ratio rule. The circular specifies the moisture ratio is no more than 86% of net weight of tra fish fillets.
The ministry raised ice and moisture content in the new circular compared to the respective ratios of 10% and 83% provided in the Government’s Decree 36/2014/ND-CP issued in April 29, 2014. The decree came into force on June 20 in the same year, except for the ice ratio rule which took effect on January 1, 2015.
However, before the ice ratio rule in Article 6 of Decree 36 became effective, seafood firms voiced disagreement with the maximum ice and moisture ratios of 10% and 83% and triggered debate with relevant agencies.
Due to the persistent requests of seafood enterprises, the rule on ice and moisture contents in tra fish fillets was postponed until the end of 2015 as proposed by the agriculture ministry to make life easy for exporters.
However, seafood exporters again called for a delay of the rule throughout 2018 as an agreement on the ice ratio in tra fillets for export had not been reached by the parties concerned.
The ministry made concessions and then signaled at some meetings that the ice and moisture ratios would be changed to prevent the enforcement of the rule from further delays. As a result, the ministry issued the circular setting the maximum ice and moisture ratios at 20% and 86% respectively.
HCMC approves 372 new gas stations
The government of HCMC has approved a plan to set up 372 new gas stations between now and 2030, mostly in outlying districts.
A senior source from the Trade Management Division at the HCMC Department of Industry and Trade told the Daily on Tuesday that the city government had given the nod to the number of new gas stations in each district.
For instance, Cu Chi District will have an extra 53 pumping stations and Binh Chanh 51. New stations will also go up in districts Binh Tan, Go Vap, Can Gio, Nha Be, Hoc Mon, 2 and 12.
There will be 62 new gas stations on the water surface in districts 1, 2, 5, 6, 7, 8, 9, Thu Duc, Nha Be, Hoc Mon, Can Gio, Cu Chi and Binh Chanh serving waterway tourism and transport.
The Department of Industry and Trade has forecast that the city will consume some 2.3 million cubic meters of fuels by 2020, about 3.2 million cubic meters by 2025 and nearly 4.3 million cubic meters by 2030.
The Trade Management Division said it would encourage investors to set up gas stations combined with convenience stores and parking lots.
A license for establishing a gas station is valid for one year only. If investors fail to open a station within one year, they would lose the license, so others will be found to replace them.
HCMC now has 532 gas stations.
Q1 seafood exports estimated at US$1.5 billion
Vietnam’s seafood exports in March were estimated at US$537 million, bringing the total in the first quarter to US$1.5 billion, up 3.6% over the same period in 2016, said the Ministry of Agriculture and Rural Development.
Japan, the United States, South Korea and China were the top four importers of Vietnamese seafood. The foreign markets to which Vietnamese seafood exports surged strongly in the period include Brazil with 67.6%, the Netherlands with 55.6%, Japan with 28.5%, Canada with 24.3%, China with 19.5% and South Korea with 13.5%, Vietnmaplus reported.
Meanwhile, the nation's seafood import bill in March totaled US$104 million, bringing the total in the first three months of 2017 to US$306 million, up 30% over the same period in 2016.
An undersupply and an increasing demand of exporters have led to tra fish (pangasius) prices soaring. Compared to the previous month, the price of unprocessed pangasius has increased by about VND1,000 per kg to VND24,000-26,500, helping farmers and traders get a profit of VND500-1,000 per kg.
Similarly, the price of unprocessed shrimp in southwestern provinces in the first quarter edged up sharply due to limited output in the beginning of the shrimp season and high export demand.
Chicken imports surge steadily
Vietnam has in the past few years spent hundreds of millions of U.S. dollars a year importing chicken meat, according to the General Department of Customs.
In 2016, local firms imported 140,000 tons of chicken meat with a total value of US$107.8 million. In 2015, the respective figures were 153,100 tons and US$111.1 million.
In the year to March 15, chicken imports had reached 22,300 tons worth US$19.8 million. The pre-tax average price of imported chicken ranges from US$0.72 to US$1 a kilo.
Vietnam mainly buys chicken meat from the U.S., Brazil and South Korea. The volume from the U.S. always makes up more than half of total chicken imports.
Chicken imports are now subject to different tax rates depending on the origin of chickens. The import tariff for whole chickens is 40% while chicken wings and thighs are taxed 20%.
Tariffs are lower for imports from the markets with which Vietnam has signed trade agreements. For example, whole chickens and chicken wings from South Korea are duty-free while chicken thighs are subject to an import tariff of 5%.
Huge chicken import volume has left direct impact on domestic chicken prices. In the past, the price of white-feather chickens dipped to a mere VND15,000-18,000 a kilo.
Chicken prices go up in Dong Nai again
A number of chicken farms in Dong Nai Province said the price of white chickens in late March increased to VND28,000-36,000 per kilo after having fallen to VND15,000-18,000.
Nguyen Van Ngoc, vice president of the Southeastern Livestock Association and the owner of a chicken farm in Dong Nai, said white chickens were now selling for VND28,000 a kilo at the farm, up VND7,000-10,000 from mid-February.
The price of buff chickens has also gone up to VND27,000-28,000 per kilo, a rise of VND3,000-4,000 from mid-February, but farmers are still incurring losses as production costs are as high as VND35,000-36,000 a kilo, said Ngoc.
Nguyen Thanh Phi Long, technical director of Long Binh Livestock Co. Ltd. in Dong Nai, said the price of white chickens ranged from VND30,000 to VND36,000 per kilo depending on type.
The white chicken price surge in Dong Nai, Long said, has resulted from the weather anomaly which has affected chicken growth and productivity.
Jetstar Airways to launch two direct flights to HCM City
Low-cost carrier Jetstar Airways of Australia will open two direct flights from Melbourne and Sydney to Ho Chi Minh City of Vietnam from next month.
Australian Assistant Minister for Trade, Tourism and Investment Keith Pitt and representatives of Jetstar Airways announced this information at a press conference in Ho Chi Minh City on April 5.
Accordingly, Jetstar Airways will use Boeing 787 Dreamliner for three flights per week from May 10 between Ho Chi Minh City and Melbourne, and four flights per week from May 11 between Ho Chi Minh City and Sydney.
In the past 12 months, the flow of visitors from Vietnam to Australia has increased 21 percent, and the number is expected to continue rising after the launching of the two air routes, said Paul Rombeek, Jetstar Groups’ Global Head of Sale.
Assistant Minister Keith Pitt said Vietnam is rapidly becoming one of the most attractive destinations in South East Asian for Australian tourists.
He also noted that the new flights will connect economic hubs of Australia and Vietnam and promote the linkage between people and businesses of the two countries.
Entrepreneurship competition for Vietnamese held in US
A global entrepreneurship competition for Vietnamese (VietChallenge) took place recently with the final round held in Boston city, the US state of Massachusetts, on April 1.
The final round saw the attendance of Vietnamese Ambassador to the US Pham Quang Vinh, Vietnamese Ambassador to the United Nations Nguyen Phuong Nga, Babson College President and former Governor of Massachusetts Kerry Healey, and representatives of many businesses.
This year’s competition attracted more than 170 teams from Vietnam, the US and many other countries.
Team ScholarJet won the first prize, worth 20,000 USD, with the idea of building a website to help students seek scholarships.
Speaking at the final round, Ambassador Vinh said the competition was a big success of the Association of Vietnamese Students and Professionals in the US (AVSPUS) in encouraging entrepreneurship and creativity.
It also connected young Vietnamese people in the US with their peers around the world, helping them to create opportunities for themselves and contribute to the homeland’s development, he noted.
Before the final round, Ambassador Vinh met with AVSPUS leaders, informing them about Vietnam’s socio-economic development as well as recent progress in Vietnam-US relations.
He spoke highly of the association’s contributions and innovative ideas as well as its successes in supporting the life, study and start-up of young Vietnamese in the US.
TH True Milk to invest in Dak Lak
The TH True Milk Group is looking to invest in new projects Ea Sup district in the central highlands province of Dak Lak.
The Group is to build a modern fruit processing plant in the province with input materials primarily grown on land belonging to the Dak Lak Forestry and Food Processing Limited Liability Company and from joint ventures with farmers and cooperatives in the province.
It also plans to invest in a solar power plant with a maximum capacity of 1,117 MW on 1,117 ha belonging to Dak Lak Forestry and Food Processing Limited Liability Company.
The investment will be implemented in two phases: the first having a capacity of 117 MW and the second 1,000 MW. To speed up its investments, the Group will survey the location of the fruit processing plant. Regarding the solar power project, it has proposed that the province decide to approve the investment and submit it to the government for approval.
Ms. Thai Huong, Chairman of the TH True Milk Group, said that strategic investment in science and technology to focus on bringing high technology into the Group’s production will bring into full play the local advantages to create a breakthrough competitive advantage, creating the basis for sustainable development.
At a recent meeting between the Group and the province, Chairman of the Dak Lak Provincial People’s Committee Pham Ngoc Nghi suggested that the Group quickly deploy the land use plan and survey the construction of solar power plants, and report to the province so it has a basis for reporting to the government.
Chairman Pham Ngoc Nghi also asked the Department of Industry and Trade to revise its power planning and study and supplement the Group’s solar power project into the provincial power plan. The People’s Committee unanimously decided to set up a steering committee to resolve and deal with difficulties facing enterprises when promoting and investing projects in Ea Sup district, thereby speeding up the tempo and creating favorable conditions for enterprises to invest in the area.
Gamuda Land to launch The ZEN Residence this month
The ZEN Residence, Gamuda Land’s third luxury apartment project, will be officially introduced this month at Gamuda Gardens Township, at Km 4.4 Phap Van, Yen So ward in Hanoi’s Hoang Mai district.
Anticipated to be one of the hottest real estate products in the market, The ZEN Residence encompasses all of the elements that have made Gamuda Land a success in past decades.
With the aim of tightening the relationship between family members and neighbors, it offers residents high-quality and versatile facilities for both community and private purposes.
The infinity pool, one of the highlights of The ZEN Residence’s landscape concept, allows residents and guests to capture the beautiful scenery of the township from a special vantage point and relax among luscious greenery.
Working towards providing the best lifestyle for residents and to ensure the safety of everyone, especially youngsters, a kids’ pool has been woven into the design of the fifth floor, in addition to the spacious infinity pool.
Simultaneously, an outdoor playground, a luxurious gym, and 3,000 sq m of retail space are among the special features of The ZEN Residence that few other projects possess.
In addition to its overall master plan and detailed design, Gamuda Land emphasizes the importance and constant improvement of security systems at Gamuda Gardens township as well as at The ZEN Residence.
With brand new technological advances to meet increasing customer demand, each unit at The ZEN Residence is equipped with a smart digital lock for the main door, which can be opened by a number of methods: key, access card, or password.
The elevator system is monitored minimize access and ensure security.
The architecture is in harmony with the design of other projects at Gamuda Gardens, i.e. Camelia Homes and Lily Homes. As the first township project of Gamuda Land in Vietnam, Gamuda Gardens is built on the four core pillars of “Design Quality”, “Community & Amenities”, “Healthy Lifestyle”, and “Safety & Security”.
With a desire to provide an ideal lifestyle to an integrated township, Gamuda Gardens has become a prestigious community hub for Hanoians. Luscious greenery, high-end amenities, and modern facilities such as a resort-style clubhouse and tennis courts can all be found within the vicinity.
Gamuda Land, a real estate corporation under Gamuda Berhad Malaysia, is one of the largest infrastructure companies in Malaysia. It marked its presence in Vietnam with its first project, the 500 ha Gamuda City in Hanoi. With total investment of $5 billion, Gamuda City includes five key components: Yen So Park, Gamuda Lakes, Gamuda Central, Gamuda Plaza, and Gamuda Gardens.
Creating conditions to promote textile and garment exports
This year, the Vietnamese textile and garment industry set a target of 6.5%-7% growth, compared to 2016, and gaining an export turnover of over US$30 billion.
However, it seems that a lack of synchronous and long-term development strategy, proactive investment, technological innovation, enhancement of management and preparation of raw and auxiliary materials of enterprises, will impact the competitiveness of the country’s textile and garment industry, particularly in the context of deep and strong international economic integration.
The export turnover of the Vietnamese textile and garment industry reached US$28.3 billion in 2016, much lower than the target of US$31 billion. In the last months of last year, enterprises lacked orders as their partners moved contracts to countries with a lower cost than Vietnam. One may observe that though the Vietnamese textile and garment sector’s strength has been the first stage (yarn) and last stage (tailoring), it has not paid much attention to weaving and dyeing, thus failing to create added value or improve the competitive element of products.
General Director of Nam Dinh Textile and Garment Joint Stock Company (Vinatex Nam Dinh), Nguyen Van Mieng, said that Nam Dinh province’s textile industry has had a long tradition and used to hold leading position in the country in terms of products’ quality. However, obsolete equipment and technology caused energy-consuming production and poor quality of products. Meanwhile, Nam Dinh Garment Company did not operate effectively and lost the market. On the other hand, textile and garment makers in the province were conservative and did not want to change, creating stagnation and low-efficiency in production and business for a long time.
With the above issues as a backdrop, Vinatex Nam Dinh has restructured its parts, focusing on relocating its dyeing plant to Hoa Xa Industry Zone, as well as investing in modern equipment to improve the product quality.
Since its technological update in March 2016, the fibre plant has had only 45,000 spindles compared to its earlier number of 78,000. Meanwhile, the number of workers has decreased to 450 while the product output has increased to 630 tonners per month. In terms of garment industry, thanks to the renewal, the total output is recorded at 300,000 products per month.
Also, according to General Director Mieng, Vinatex Nam Dinh still encounters numerous difficulties. For instance, the waste-water treatment station of the fibre plant was forced to stop operating for more than a year due to poor quality, quitting of skillful workers and loss of partners.
Currently, the textile and garment industry employs around three million workers in nearly 8,000 enterprises, significantly contributing to transferring economic structure from agriculture to industry. However, there have not been enough training facilities that are essential for the textile and garment sector such as human resources for order management as well as for those relevant in fields like weaving, fibre and dyeing.
Despite its contribution to the country’s socio-economic development, the textile and garment industry outsources significantly. This is likely to lead to problems in terms of improving the industry’s competitiveness in the global supply chain in the near future. Regarding this issue, Head of the Hanoi Textile and Garment Industry University, Hoang Xuan Hiep, affirmed that in the short-term, the university will train engineers and management officials at senior, medium and grassroots levels in this field. This is a solution to help enterprises maintain competitive advantage in producing high quality products, improve workers’ productivity and gradually increase the localisation proportion. In the long-term, the university would continue to train high-level human resource for textile and garment industry such as factory directors and order managers, significantly contributing to helping enterprises add value to the production method.
The textile and garment industry has been one of the largest export earners in Vietnam; however, 80%-85% of materials have been imported, including fabric, leather, sewing thread, button and metal buckle. The industry’s export turnover reached over US$28.3 billion, but nearly US$15 billion was spent to import materials for production. Thus, the value margin that the industry gained was very small.
Specifically, the volume of domestic fibres can meet the demand of production in the country and exports; however, fabric and cotton can meet only 20%-30% and 3%-5% of the production demand, respectively. According to a director of a big fibre plant in the north region, its fibre commodities have been exported to two major markets of China and the Republic of Korea.
Notably, there have been mechanisms to eliminate the ‘knot’ as Vietnam exported fibre but imported fabric to serve production activities. It is imperative to find solutions to solve this problem as well as accomplish investment policies to develop weaving and dyeing factories in the future.
Tran Van Dinh, an official from Tra Ly Fibre Joint Stock Company in Thai Binh province, said that the company now has 71,000 spindles (annually producing around 14,000 tonnes of fibre), earning over VND660 billion in 2016. The company has to import 100% of materials, so it is forced to export its products to reinvest. If its products are sold in the domestic market, it will have to exchange foreign currency to import materials for production.
Although there have been several factories manufacturing materials for the textile and garment sector, the production in the country is still heavily reliant on imported material resource. Therefore, the important issue is to help enterprises take the initiative or guide them to reduce their dependence on imported materials as well as benefit from tariff preferences while fully meeting the rules of origin as Vietnam joins the free trade agreements with foreign countries such as EU, Japan and the RoK, in the near future.
Regarding this problem, General Director of the Vietnam National Textile and Garment Group (Vinatex), Le Tien Truong, emphasized that the rules of origin under the EU – Vietnam Free Trade Agreements (EVFTA) are based on the ‘fabric forward’ rule. If the garment enterprises do not take the initiative in developing fabric sources in Vietnam or the EU, they will be not be in a position to utilize opportunities. Instead, they will also face numerous challenges and risks as their customers transfer orders to enterprises that can be proactive in sewing and fabric sources.
In addition, if the enterprises cannot manufacture fabrics on their own to meet the rules of origin of the EU, enterprises will be entitled to tax reduction and forced to reduce costs of outsourcing, causing low profits and even loss.
In order to survive and develop, the Vietnamese textile and garment sector must device mechanisms to promote the supporting industry. In particular, it is essential to establish industrial clusters for manufacturing materials, ensure requirements for wastewater treatment in dyeing and kinds of environmental-related materials such as plating in manufacturing metal buttons. The relevant agencies also need to set out preferential policies related to land tax, VAT, income and tax exemption and reduction and capital for enterprises investing in industrial complexes for materials.
In addition, a fund for credit incentives and support should be launched for enterprises operating the mode of FOB (free on board) for orders with localization rate of 50% and over as well as those who are experimentally producing spare parts and materials and equipment in the production line of auxiliary products.