BUSINESS IN BRIEF 27/5
Opportunities for Vietnam’s fruits, vegetables export
The global demand for fruits and vegetables is forecast to soar in the near future, affording Vietnam a chance to expand to choosy markets such as Japan, the Republic of Korea and the US, as heard a seminar in Hanoi on May 24.
On the global market, fruits and vegetables account for over 59 percent of the total and are predicted to grow 2.88 percent for the 2016-2021 period, reported the Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD).
Nguyen Duc Loc from the IPSARD said the demand for certified produce is growing. Over the past years, Vietnam has strived to improve the quality and hygiene of GAP certified products and issued regional codes for quality ones.
However, Vietnam still meets difficulties regarding fruits and vegetables preservation while connectivity between producers and businesses remains loose.
A representative from the Pan Group said the government targets restructuring agriculture towards a growth of 3.5- 4 percent from 2016-2020, with a focus on high-tech farming, but also admitted that the domestic farm produce quality management system and origin tracking capability remain weak.
Nigel Smith, General Director of the Fine Fruit Asia, said fruit is gaining the upper hand in regional exports and Vietnam is one of the important partners in ASEAN.
He suggested diversifying fruits and vegetables to ease reliance on China, and developing partnership between businesses, farmers and the government at the regional and sectoral level so that Vietnam’s fruits and vegetables could compete well in international market.-
Committees work to facilitate Vietnamese, Lao enterprises
Representatives from the Vietnam-Laos Cooperation Committee have worked with their counterparts from the Laos-Vietnam Cooperation Committee on the implementation of the Hanoi Agreement 2017 and the “one-stop-shop” customs model at the pair of Lao Bao-Densavan border gates.
During their meeting in the central province of Quang Tri on May 24, the two sides informed each other of cooperation between Vietnamese and Lao border localities, and information related to socio-economic development, security-defence, potential and strength for promoting cooperation between the two nations.
Vice Chairman of the provincial People’s Committee Nguyen Quan Chinh briefed participants on links between Quang Tri and Savannakhet province of Laos, highlighting investment of enterprises from the Vietnamese locality in Savannakhet.
He pointed out difficulties facing Vietnamese businesses and people as Laos changed policies on trade, investment and export-import, proposing the Lao Government improve regulations on inspection and coordination between the two sides’ sectors in line with the one-stop-shop model.
Meanwhile, Vice Chairman of the Laos-Vietnam Cooperation Committee Khamphon Keo Kin Naly stressed that the Lao Government always creates favourable condition for business and trade activities of Vietnamese people in Laos.
He affirmed that the committee will continue building coordination regulations between the two countries at levels, thus promoting export-import turnover between the two countries and facilitating Vietnamese firms’ operation in Laos.
Officials of Quang Tri and Savannakhet agreed on measures to make it easy for the two nation’s enterprises to further development in the time ahead.
ABBank, TPBank join ADB trade finance programme
An Binh Joint-Stock Bank (ABBANK) on May 24 officially signed an agreement with the Asian Development Bank’s (ADB) on joining the Trade Finance Programme (TFP) – one of prominent programmes enabling Vietnamese enterprises to increase competitiveness and get more opportunities to promote economy.
Under the agreement, ABBANK will promote the implementation of regulations on safe management and operation, towards constantly improving the quality of services and helping enterprises easily access international market.
Becoming a member of the TFP, ABBANK will serve as an effective bridge, bringing opportunities to Vietnamese firms to expand links with other 200 member banks of the TFP worldwide.
“Our Trade Finance Programme aims to help Vietnam and Vietnamese businesses expand trade opportunities, increase competitiveness, and promote trade-led inclusive growth,” said Steven Beck, ADB’s Head of Trade Finance.
According to Cu Anh Tuan, Chief Executive Officer of ABBANK, the signing with the TFP marks the start of a positive development and close relationship between ADB and ABBANK in developing banking services of the Vietnamese bank.
Cooperating with the TFP will not only bring higher business efficiency, but also create an opportunity for our bank to affirm its brand in the banking and financial market, he stressed, hoping that ADB’s continued trust and support will further promote trade development between Vietnam and other countries.
The same day, Tien Phong Commercial Joint-Stock Bank (TPBank) signed a similar agreement with ADB.
According to Nguyen Hung, Chief Executive Officer of TPBank, ADB's extensive network of banks and other financial institutions will provide great opportunities for TPBank to expand its global partnerships.
He said that the guarantee limit from ADB shall be used to support Vietnamese small and medium-sized enterprises to optimize their businesses so they can contribute to Vietnam’s economic growth.
ABBANK is one of the leading commercial joint-stock banks and is among the top ten largest commercial banks in terms of charter capital in Vietnam. Its current charter capital exceeds 5,319 billion VND (about 234 million USD) and it has an extensive network of 164 transaction offices located in 34 provinces nationwide.
Meanwhile, TPBank is one of the most dynamic commercial banks in Vietnam with total assets of around 106,000 billion VND (4.6 billion USD), about 4,000 employees, and an extensive network of 55 branches and transaction offices across Vietnam. Currently, with more than 1.5 million individual customers and businesses, TPBank has been asserting its position as a strong, sustainable and healthy bank in the country.
To date, TFP has supported 8.2 billion USD in trade through 5,814 transactions covering both guarantees and direct funding in Vietnam. Out of TFP’s total transactions in Vietnam, 67 percent are related to small and medium-sized enterprises. TFP is currently working with 11 commercial banks in Vietnam and, with the signing of agreements with ABBANK and TPBank, this will increase to 13 commercial banks.
Bond demand hits seven-month high
Demand for Government bonds has hit a seven-month high, helping the State Treasury successfully issue all 5-15 year bonds worth 4 trillion VND (175.43 million USD) set for bidding last week.
The monetary report released by the Saigon Securities Incorporation (SSI) this week showed that the registration ratio for the auction rose 356 percent, the highest level since October 2016. The high demand also helped the Treasury successfully call for an additional bidding of more bonds worth 1.2 trillion VND.
Thanks to the high demand, it was easy for the Treasury to issue the bonds at yield falling six percentage points, stopping the constantly upward trend of the yield since February.
In the week, the Bank for Social Policies also issued successfully five,10 and 15 year bonds worth 720 billion VND out of 1 trillion VND set for bidding. The 10-year bond yield fell six percentage points, while the 15-year bond yield slid 20 percentage points.
In the secondary market, rising bond demand has also helped improve liquidity significantly. Total bond value traded last week reached 42.5 trillion VND, or 8.5 trillion VND per bid on average. Foreign investors also increased their buying value from 800 billion VND to 1.3 trillion VND last week, making them become net buyers of 477 billion VND.
The bond yield in the secondary market continuously fell by 2-11 percentage points, of which the three-year bond yield posted the highest decrease of 11.6 percentage points, followed by the one and two-year bond yields of 11 and 6.4 percentage points, respectively.
Treasury mobilises more capital from Government bonds
Over 5.86 trillion VND (262.77 million USD) worth of Government bonds issued by the State Treasury were sold at an auction at the Hanoi Stock Exchange (HNX) on May 24.
The sale included 1.5 trillion VND (66.13 million USD) worth of five-year bonds with an interest rate of 5.03 percent per annum, 0.13 percent lower than bonds of the same term sold in the previous auction on May 17.
Similarly, 1.95 trillion VND (85.97 million USD) worth of seven-year bonds sold at the auction bear an interest rate of 5.35 percent, 0.09 percent per lower than those sold in the May 17 session.
Meanwhile, the sold 20-year bonds, worth a total 1.3 trillion VND (57.3 million USD) bear an interest rate of seven percent per annum, 0.09 percent lower than the successful bid at the previous session on May 10.
The successful bids for 30-year bonds worth 1.115 billion VND (49.16 million USD) put the interest rate at 7.55 percent per annum, 0.09 percent lower than those sold at the May 10 session.
Since early this year, the State Treasury has mobilised more than 97.5 billion VND (4.3 billion USD) from the auction of G-bonds on the HNX.
Annual exports to South America expand by 30-40 percent
Vietnam’s exports to South America enjoy an annual average growth of 30-40 percent with many popular and highly-competitive products, heard a workshop in Hanoi on May 24.
Deputy head of the Trade Promotion Department under the Ministry of Industry and Trade Ta Hoang Linh said with a population of over 600 million people and total gross domestic product (GDP) of over 6 trillion USD, South America is a potential market for Vietnamese businesses.
At the same time, he highlighted difficulties and challenges facing businesses when entering the market such as geographical distance, transportation cost, cultural and institutional differences.
The bilateral trade between Vietnam and Latin America is quite balanced. In 2014, Vietnam exported 4.71 billion USD worth of goods to the market, a year-on-year rise of 36.8 percent. Vice versa, the country imported 4.8 billion USD from the market, up 44.9 percent.
Vietnam mainly exported footwear, seafood, rice, garment-textile, coffee, plastic products, electronic equipment and components, and computers, while importing textile-garment and footwear materials, paper, plastic material, cattle-feed, soybeans, and cotton.
Former trade counselor of Vietnam in Chile Tran Dinh Van said Chile is one of the leading open economies in the world, and Vietnam’s goods face fierce competition by counterparts from the South American region and Asia.
Currently, Vietnam has surpassed India and Thailand to become the biggest ASEAN exporter to Chile, ranking ninth among countries exporting to Chile.
The free trade agreement between Vietnam and Chile took effect in January 2014, covering 9,000 lines of products.
This has created good opportunities for businesses to boost exports to the market.
Vietnam’s shrimp export to Japan sees sharp increase
Vietnam’s shrimp exports to Japan in the first quarter of this year increased by 29.6% year-on-year to reach US$135.4 million, making Japan the country’s largest shrimp importer.
According to the Vietnam Association of Seafood Producers and Exporters (VASEP), shrimp exports to Japan recovered since August 2016 and kept growing until March 2017.
The association attributed the rise to changes in tastes of local consumers who now prefer cheaper aquatic products to salmon, tuna and cuttlefish.
Demand for different kinds of shrimp among high-end consumers also increased, the association said, noting that all these factors have drawn shrimp businesses to Japan.
Although Vietnamese shrimp is sold at a high price of US$12 per kg on average, they are still popular thanks to their improved quality, the association said.
Cooperation programmes in agriculture between the two countries have also facilitated Vietnam’s shrimp export to Japan, the association added, asking Vietnamese businesses to maintain product quality and prestige.
Vietnamese shrimp firms, however, said they still face various difficulties, especially a shortage of raw shrimp.
The Director of Thien Phu Export Seafood Processing Company Limited said the company is making every effort to ensure material supply by connecting with shrimp farms which follow GlobalGap standards, covering a total area of 500 ha in the Mekong Delta province of Bac Lieu.
VASEP forecast that Vietnam’s shrimp export turnover in 2017 will amount to about US$3.4 billion, up 9% year-on-year, of which export value of white-leg shrimp is expected to edge up 8% to hit about US$2 billion.
Cattlemen look to imports to meet growing demand for beef
Vietnamese cattlemen have requested the Vientiane Cattle Breeding and Entrepreneurs Association to supply up to 400 head of cattle per day to meet the increasing consumer demand for beef.
This request comes on the heels of the Association signing a contract under which it agreed to supply beef cattle to the Vietnamese cattlemen, Mr Viengsavanh Southivong of the Association told reporters on May 22.
The problem is that Association has entered into an agreement that it is currently not prepared to fulfil, said Viengsavanh, noting the 27 Lao members need more time to come up with a plan to meet their commitment.
To start a cattle ranch the Association and its members are currently seeking equity capital to purchase the equipment, grass, seeds, and cattle it needs to get it up and running, said Viengsavanh.
The Association has plans to import 2,000 animals from Australia to use in Vientiane as breeding stock.
Nor does the Association have the technical skill and staff or the land and natural resources needed, he said. We hope to establish collaborative agreements with Thailand ranchers to supply some grass seeds, technology, and vaccines among other things.
With support from the government and the assistance of local residents, we are hoping to find 1,500 hectares of land along the That Luang marsh channel to establish a cattle ranch.
This year, the Association also plans to purchase 300 hectares of land for cultivation and will further expand when the ranch gets up and running with visible progress.
The farmland is in the district of Xaysettha in the villages of Phonthong, Na Pien, Doung, Kharm-ngoy, Na Xangphay and Haykham.
As we learned from the mistakes of a foreign business entrepreneur in the province of Xieng Khuang, we must prepare meticulously before importing the cattle, said Viengsavanh.
The number of head of cattle currently being reared by the members of the Association are still insufficient to meet the current commitments it has already made to supply the domestic market.
The Association needs more than 500 cattle to meet its obligation to supply local slaughterhouses daily and is currently bringing in cattle from other provinces like Saravan and Attapeu to do so.
The supply issue has caused beef prices in Vientiane to spike, while pork has remained relatively inexpensive in comparison.
Most startling is the fact that Viengsavanh acknowledged that the Association members are still lacking in the expertise to operate a cattle ranch and compete with their peers in the Lao marketplace.
This situation highlights the importance of Vietnamese businessmen being careful in entering contractual agreements with foreigners in Laos. In this situation clearly, the Association is not prepared to meet its end of the bargain.
In English, one would say the Association clearly put the ‘cart before the horse.’ But in any event, it looks like the Vietnamese cattlemen will need to look to other suppliers to meet the rising demand for beef by Vietnamese consumers.
VN, Denmark exchange lessons in food control
The Vietnamese Ministry of Agricultural and Rural Development (MARD) met with the Ministry of Environment and Food of Denmark (MFVM) on Tuesday in HCM City at a conference on safe management of the pork product value chain.
The conference’s goal was to raise awareness for both farmers and consumers in Viet Nam. The guiding principle was “from farm to fork”, and the discussions spanned areas such as feed, veterinary medicine, chemicals and product origin.
Phung Huu Hao, deputy head of the National Agro-Forestry-Fisheries Quality Assurance Department (NAFIQAD) under the MARD, said at the conference that Denmark has one of the world’s top food quality control systems, and Viet Nam looks forward to collaborating with Danish agencies.
Commenting on agricultural and animal husbandry in Viet Nam, Finn Clemmensen, Senior Counselor of the Food and Veterinary Management Department under the MFVM, stated that despite the presence of numerous associations in these fields, actual inspection and monitoring of farms and businesses are usually done by government agencies.
According to Clemmensen, after a field tour, he noted that several slaughterhouses did not strictly obey safety and sanitary procedures, and the whole pork production business is in need of further regulation. He emphasised the need for a complete and safe value chain to ensure the benefits of domestic consumers and the potential for Vietnamese pork exports.
Representatives from the NAFIQAD agreed with Celemmensen, stating that while Danish pig farms are all numbered and registered before the authorities, in Viet Nam there are around 4.5 million unregistered household farms with about 29,000 slaughterhouses. This has greatly inconvenienced State run agencies responsible for pork safety and quality control.
Until 2020, relevant agencies will continue implementing annual origin inspections for animal products, along with projects ensuring food safety in transporting and slaughtering cattle and poultry. Agencies will also enhance international co-operation in the field, said Huynh Thi Thanh Binh, head of the Community Veterinary Division under the Department of Animal Health.
The two countries have been working together since 2013, after the signing of a protocol on food safety control between the MARD and the MFVM. In 2016, both sides agreed to implement strategic pork value chain co-operation to take place between 2017 and 2018.
To honour this co-operation agreement, Danish MFVM will grant about US$45,000 to Viet Nam, together with field experience and technical support from experts and administrative departments from Denmark. The objective is to enhance capability among Vietnamese authoritative agencies to help them chart their own sustainable strategies in food safety control.
Can Tho wants more firms, jobs
Solutions to develop nearly 7,000 new enterprises by 2020 were top of the agenda of a meeting organised by Can Tho City’s People’s Committee and relevant agencies on Tuesday.
Can Tho City, currently, has more than 6,900 enterprises with total registered capital of VND55.5 trillion (US$2.47 billion), creating jobs for over 101,500 workers. On average, each enterprise has registered capital of over VND8 billion.
To implement Government’s Resolution 35, Can Tho City targets to have 13,800 enterprises by 2020. Of the total, 6,900 enterprises will be newly-established and some 20-25 per cent of them will apply high technologies in production.
The enterprises are expected to help increase the contribution of enterprises to the city’s Gross Regional Domestic Product (GRDP) to 50-60 per cent and create over 210,000 employees of whom 40 per cent will be female.
Last year, there were 1,100 enterprises set up in Can Tho City and more than 400 enterprises were established in the first four months of 2017. Thus, from now until the end of 2020, to achieve the set target, each year, Can Tho City needs some 1,700 newly-established enterprises.
Nguyen Phuong Lam, deputy director of the Viet Nam Chamber of Commerce and Industry’s Can Tho branch, said that for developed countries, for every 10-15 people, there is one enterprise, but in Viet Nam the ratio is 1:248.
In the Mekong Delta region, the ratio of enterprises to the population is only half that of the whole country, which is some 450 people per enterprise, but Can Tho City, with more favourable conditions, has some 250-300 people per business.
Lam said the city’s target of new businesses by 2020 is achievable, provided that the city continues to improve its investment climate, including its provincial competitiveness index.
According to Lam, among Mekong Delta localities, Can Tho City currently has the best conditions for business development, but the city still lacks leading enterprises to create a driving force for small and medium-sized businesses.
In the long term, Can Tho needs to focus on developing startups, meaning businesses with new innovations and creativity, rather than establishing new ones in the normal sense, Lam stressed.
Besides this, the city should also pay attention to seeking investment from businesses from other localities, such as from HCM City, Lam said, adding that the municipal authorities need to create good conditions for university graduates to start their own business.
Tran Quoc Ha, director of the State Bank of Viet Nam’s Can Tho branch, said the city’s information e-portal should set up a forum for startups, providing information about the city’s startup policy so that all individuals know and participate.
The city also needs a resolution served as the basis for implementing its startup plan, Ha said, stressing the importance of having a very specific policy for commercial banks to join hands in the programme.
Can Tho also needs concrete policies and directions to develop enterprises in the fields of information technology and automation, Ha added.
Nguyen Van Hong, director of the provincial Department of Planning and Investment, said the city could reach the target of newly-established enterprises, but the number of new businesses set up according to the nature of startups – i.e. be creative and apply new technologies -- is not many.
This is the most challenging issue that Can Tho City and many other places in the Mekong Delta are facing, Hong said.
An Giang moves to develop sustainable tourism
The Mekong Delta province of An Giang is striving to take full advantage of its potential for tourism development and turn it into a spearhead economic sector.
According to Vice Chairman of the provincial People’s Committee Nguyen Thanh Binh, the province issued a resolution on tourism development until 2020 with orientations through 2025, which identifies four key tourism types, namely spiritual tourism, eco- and resort tourism, eco and water tourism and cultural – heritage tourism.
Measures have been devised to tighten the management of tourism activities while boosting efforts to attract international tourists and improve tourism service quality.
By 2020, the province hopes to welcome 10.1 million visitors and earn about 4 trillion VND (176.36 million USD) from tourism services, making up 8.8 percent of its gross regional domestic product (GRDP).
By 2025, the figures are expected to reach 12.9 million visitors and 15.3 percent of GRDP.
To realise the targets, the sector needs to focus on publicity work to get the community more involved in tourism development, invest in infrastructure facilities, particularly the traffic network to explore border tourism, said Binh, adding that efforts are also needed to mobilse resources to build infrastructure and train human resources.
Dang Duc Phong, Director of the Centre for Tourism Promotion, underlined the need to offer a wide range of tourism products, particularly community-based tourism, sports tourism, resort tourism, among others.
Investment should be made in key products to develop brand names for the locality’s tourism while protecting natural resources, cultural values and the environment, Phong said.
An Giang has cultural diversity with four ethnic groups, namely Kinh, Khmer, Champa, and Chinese, and a wide range of traditional festivals, such as Ba Chua Xu Nui Sam in Chau Doc and Bay Nui (Seven Mountains) cow racing festival, according to Director of the provincial Department of Culture, Sports and Tourism Nguyen Van Len.
An Giang has 15 major tourism sites, including Nui Cam and Nui Sam tourism sites. Cu Lao Ong Ho tourism site in My Hoa Hung commune was named among national tourism sites in the Master Plan for tourism development in the Mekong Delta region by 2020 with a vision to 2030.
The number of visitors to An Giang has increased rapidly, from 4.5 million in 2010 to 6.5 million in 2016, including 70,000 foreigners, generating 3.2 trillion VND (140 million USD).
Sacombank postpones AGM to June 30
In an announcement published on its website on May 24, Sacombank said it cannot hold its 2015 and 2016 annual general meeting (AGM) in May as expected, with a new date set for the end of June.
“Due to the incomplete preparations of AGM documents and personnel for the new Board of Directors and Supervisory Board during the 2017-2021 tenure, Sacombank will postpone the AGM, which was set for May 26, and expects to hold it on June 30,” the statement read.
This is the second time Sacombank has postponed its AGM, which was initially set for April 28.
The announcement also noted that the bank’s restructuring plan post-merger was approved by the State Bank of Vietnam on May 22, and its audited financial statements are currently being completed.
Sacombank is yet to publish its 2015 and 2016 audited financial statements.
It will send an invitation letter to shareholders and publish documents for the AGM within the prescribed time limit.
In addition to the bank’s current senior officials, including Chairman Kieu Huu Dung, the list of candidates for the new Sacombank Board for the 2017-2021 tenure includes Mr. Nguyen Van Huong, the recently-resigned Deputy Chairman of LienVietPostBank.
Mr. Huong is currently the Deputy Chairman of the year-old Vietnam Macadamia Association, a social and professional organization co-founded by LienVietPostBank and real estate giant the Him Lam JSC, which holds more than 30 per cent of LienVietPostBank.
Sacombank became the fifth-largest lender in the local banking sector in 2015 after its voluntary merger with Southern Bank. Previously among three private lenders with the highest annual net profits, the joint entity was supposed to bring greater benefits to Sacombank’s shareholders and customers. But the bank was hit almost instantly post-merger, with a pre-tax loss of VND671 billion ($29.5 million) in 2015’s fourth quarter, making its pre-tax profit for 2015 as a whole only VND1.29 trillion ($56.6 million), a fall of 55 per cent against 2014.
In its October 2016 report, Moody’s confirmed Sacombank’s “B3” long-term ratings and “caa1” BCA, and changed the outlook to negative. The confirmation of the caa1 BCA reflects the high solvency and liquidity risks faced by Sacombank post-merger.
The B3 long-term ratings of Sacombank were confirmed because Moody’s continues to incorporate one notch of uplift, based on the rating agency’s expectation of moderate support from the Vietnamese Government. The negative outlook on Sacombank’s ratings reflects the uncertainty around the strategic direction of the bank, its unclear ownership structure, and the true scope of asset quality challenges.
The bank posted an after-tax profit of VND210.5 billion ($9.28 million) in the first quarter of this year, a 30 per cent increase year-on-year, according to the bank’s latest financial report. Its bad debt ratio fell from 5.35 per cent at the end of 2016 to 4.88 per cent as at March 31, but remains the highest among its peers.
RoK business pushes for partnership with Hung Yen
Hyundai Aluminum Vina shareholding company, which belongs to the Aluko group from the Republic of Korea, and authorities in the northern province of Hung Yen signed a memorandum of understanding on May 24.
The signing was part of a working session to discuss investment opportunities. The meeting was attended by representatives from both sides and Kim Kyoung Hun, head of the council in Daejeon, a Korean city.
Kim Kyoung Hun said he wants to see win-win cooperation between the sides, with investment focused on high-tech farming and agricultural processing, among other sectors.
Nguyen Van Phong, Chairman of the provincial People Committee, introduced local strengths and industrial projects, including the 3,000-ha Ly Thuong Kiet industrial urban area and the 1,000-ha Pho Hien university complex.
He invited Korean investors to invest in the local market, particularly in industry, agriculture, health, education and culture.
Dang Ngoc Quynh, Vice Chairman of the provincial People’s Committee, said Hung Yen will create the best conditions possible for the company to study the feasibility of a 200-ha project at the Ly Thuong Kiet urban area.
Beijing promotes tourism in Hanoi
The Tourism Development Committee of China’s Beijing city organised a tourism promotion programme in Hanoi on May 24.
At the event, the committee introduced the Chinese capital city’s tourism potential, as well as new tourist sites and attractive products to draw more Vietnamese visitors.
A committee representative said that Vietnam and Hanoi in particular are important markets for Beijing’s tourism sector.
Deputy head of the Vietnam National Administration of Tourism Ngo Hoai Chung said that Vietnam will continue facilitating cooperation between the two countries’ travel agencies, with the focus on the Beijing market.
China led in the number of tourists to Vietnam with 2.7 million in 2016, a year-on-year rise of 51 percent, while Vietnam led in ASEAN in the volume of visitors to China with 2.2 million.
Spanish press informed about Vietnam’s tra fish products
Accurate and detailed information about the production and trade of Vietnam’s tra fish was provided to the Spanish press at a press conference held in the Vietnamese Embassy in Spain on May 25.
Chairing the event, Deputy Minister of Industry and Trade Cao Quoc Hung noted that recently, some media reports in Europe painted a distorted picture about Vietnam’s tra fish, thus affecting the product’s prestige and consumers’ trust.
The Deputy Minister stressed that in order to export tra fish to the EU, Vietnamese producers and exporters have to pass multiple inspections of the union. The list of eligible exporters is reviewed by the EU every year, and every batch of Vietnamese tra fish exported to the EU has to undergo inspections of EU-approved centres.
He told the conference that Vietnam’s tra fish are shipped to over 160 countries and territories worldwide with export turnover reaching about 1.66 billion USD a year.
He affirmed that Tra fish breeding has become one of the means for Vietnamese farmers to escape from poverty and ease adverse impacts of globalisation.
At the press conference, representatives from the Vietnam Association of Seafood Producers and Exporters (VASEP) and Vietnamese tra fish exporters also presented detailed information on the situation of Vietnam’s tra fish sector.
In January this year, Spanish commercial television channel Cuatro broadcast a report with incorrect and defamatory information on tra fish breeingd in the Mekong River.
As a result, Carrefour Group stopped selling Vietnamese tra fish at its supermarkets and stores in Spain, Belgium and France. A number of schools in Spain also refused to buy Vietnamese tra fish.
Spain is an important market in Europe for Vietnam. The two countries have recorded increasing trade, with two-way trade hitting 2.9 billion USD in 2016 and 835 million USD in the first four months of this year. They aim to bring bilateral trade turnover to 5 billion EUR by 2020.
Vietnam mainly exports aquatic products, coffee, textiles, rice and footwear to Spain, while importing chemicals, machines, pharmaceuticals, milk, electronics and spare parts.
Not all SMEs to enjoy lower tax
Not all small and medium enterprises (SME) in Vietnam could enjoy a preferential corporate income tax under the draft law on tax support for SMEs, said Minister of Planning and Investment Nguyen Chi Dung at the ongoing sitting of the National Assembly on May 23.
Dung said SMEs, accounting for 98% of enterprises in the country, are identified as an important driving force for the national development by the Party Central Committee in a resolution adopted at its 5th plenum.
According to the Standing Committee of the National Assembly, only profitable enterprises will directly benefit from the law on supports for SMEs.
Vice Chairman of the National Assembly Phung Quoc Hien explained that the number of profitable entities accounts for 49.4% of operating enterprises, thus an estimated 301,300 units, including about 4,160 medium enterprises, 116,920 small enterprises and 173,271 micro enterprises, would benefit directly from these regulations.
According to the Standing Committee of the National Assembly, the draft law does not specify the reduction level compared to the current rate of corporate income tax, but it is assumed that the reduction would be 1% for medium enterprises, 2% for small enterprises and 3% for micro enterprises compared to the current tax.
The tax cuts are predicted to send State budget revenues falling by about VND1,920 billion (about US$84.7 million), including VND103 billion for medium enterprises, VND1,314 billion for small enterprises and VND502 billion for micro enterprises.
The draft law stipulates that in each certain period, the Government would decide the policy to support credit institutions to increase lending to SMEs.
The draft law has abolished the regulations that interfere directly in the operation of the banking system which is not in line with market principles. In particular, the draft law eliminates a provision urging banks to provide loans with interest rates and loan terms consistent with the solvency of the SMEs and the financial situation of the bank.
According to Article 11 of the draft law, foreign-invested and state-owned SMEs are not eligible for support in terms of production space.
The draft law defines SMEs as micro, small and medium enterprises with an average number of employees covered by social insurance in the preceding year of no more than 200 each.
Such SMEs must also meet one of two conditions, namely total capital in the preceding year shall not exceed VND100 billion and turnover in the preceding year shall not exceed VND300 billion.
Large projects in HCMC uncompleted due to urban planning
When it comes to doing the planning, HCMC will need innovation and breakthroughs to deal with many large projects that have been stalled or uncompleted over inappropriate urban planning, the city government said.
According to a report of the HCMC People’s Committee sent to the Ministry of Construction, at present, investors wanting to implement large projects have to go through multiple planning stages and in several cases investors have got stuck owing to such planning. Therefore, the municipal government and relevant agencies will study and adjust the general planning of the city.
The city government said the current planning still depends on too many positioning factors (boundary and location) and quantitative factors (scale, area and quantity). Besides, functional areas are specified in the planning for each region, creating legal barriers for large projects and inflexibility for the development of the city.
In addition, due to the constraints of standards and regulations, the management and implementation of the planning (zoning planning and detailed planning) is not aligned with the reality of the city and the demand of investors, leading to failure to comply with the approved planning and complicated adjustments.
At the same time, due to weaknesses in implementing the planning, some projects have become infeasible shortly after they were approved, forcing investors and authorities to adjust the planning or the projects many times.
Therefore, the city government said the new master planning would be studied extensively in all fields and sectors in order to get a comprehensive picture and appropriately evaluate the urban development potential of the city.
In the long past, the city was unable to predict the fast pace of urbanization. Therefore, the general planning will focus on forecasts and evaluations of economic and social factors.
Previously, the master planning of HCMC towards 2025 was approved by the Prime Minister in Decision No. 24/QD-TTg dated January 6, 2010.
Expensive car imports decrease
The number of automobiles with nine seats or less imported into Vietnam has grown strongly this year, but the volume of expensive cars has decreased, according to the General Department of Vietnam Customs.
Over 20,800 such vehicles had been imported into Vietnam with a total value of more than US$329 million by May 15, a 46% surge against the same period last year.
However, the average price was US$15,776 a unit, around US$1,000 lower than that last year. This falling average price points to the fact that fewer luxury cars were imported in the period.
As import duty on cars from ASEAN countries has been cut from 40% to 30% early this year, and 0% by 2018, tax revenue is poised to fall sharply in the coming time despite a rise in imports. Last year, imports of cars, especially luxury ones, helped raise tax revenue.
Worries loom as international arrivals seen surging
The local tourism sector will likely see a strong upsurge in international tourist arrivals this year, but some are of the opinion that the sector should attend more to quality improvement instead.
Addressing the National Assembly session in Hanoi on May 22, Deputy Prime Minister Truong Hoa Binh said the Government has set a goal of achieving a 30% rise in international arrivals in 2017. If the target is realized, the country would welcome some 13 million international visitors this year, up from 10 million last year.
However, even some industry players are worried about overheated development given the poor preparedness in terms of both human resources and infrastructure. They stressed the quality of services and tourism staff needs improving for sustainable development.
Nguyen Quoc Ky, general manager of tour operator Vietravel, said higher tourist numbers would cause many problems such as shortages of tour guides and hotel rooms, and a possible fall in service quality. The lack of hotel rooms in Nha Trang in the upcoming summer holiday, for example, needs thorough consideration to better respond to the high growth of tourist arrivals, and supporting services need improvement.
Ky cited the so-called “zero-dollar” tours in Vietnam as example, saying the unchecked development had caused huge injury for the tourism industry as many tour operators had failed to develop services and secured sufficient tour guides to serve a strong surge in tourists from China and South Korea. Consequently, foreign tour operators have jumped in, leading to lost revenue for Vietnamese firms.
Ky also underscored the importance of human resource and service development, which have been left unattended to.
At present, localities have expressed the desire to develop tourism and attract as many tourists as possible, but they have not developed tourism services and anticipated the pressure of a large number of visitors on local infrastructure.
Phu Quoc is an example to this effect. Numerous hotel and resort projects have been licensed on the island off Kien Giang Province, but operators of these hotels and resorts are struggling with many difficulties such as human resource shortages and waste treatment problems.
Nguyen Duc Quynh, deputy general manager of Furama Danang Resort, told the Daily that the tourism sector should improve the quality of products and services instead of target visitor numbers.
Startup Wheel 2017 Contest launched
The annual Startup Wheel 2017 contest supporting young entrepreneurs has been launched nationwide.
This year’s contest will take place in main cities, Hanoi, Ho Chi Minh City, Da Nang and Can Tho. It is expected to attract 700-1,000 contestants.
Launched in 2013 in HCM City, the competition aims to give an opportunity to young people to start and promote their own businesses with support from the business community.
The contest is co-organized by the City's Ho Chi Minh Communist Youth Union, the HCM City Youth Federation’s Business Startup Support Centre (BSSC), the HCM City Young Business People Association (YBA), Vietnam Youth Union, Vietnamese Students' Association – Ho Chi Minh City branch and the HCM City Department of Science and Technology.
VN firms eye South America
With GDP totaling more than US$6 trillion and a population of more than 600 million, South America has great investment opportunities for Vietnamese companies.
Deputy director of the Ministry of Industry and Trade’s Trade Promotion Agency Ta Hoang Linh made the statement during a conference held on Wednesday in Ha Noi.
In recent years, Viet Nam’s exports to the region have experienced annual average growth of 30-40 per cent, Linh said.
However, Vietnamese enterprises still face several challenges in exporting to the region such as geographical distance, high transportation costs and cultural and institutional differences.
Former Vietnamese Trade Counselor to Chile Tran Dinh Van agreed. He mentioned inadequate market information and difficulties in language as two other obstacles facing Vietnamese exporters.
As for the Chilean market, Viet Nam’s goods also faced fierce competition from their peers from South American and Asia, he noted.
Le Thi Van Anh, director of Thanh Dat Joint Stock Co, which exports farm produce in the northern province of Hung Yen, said her enterprise stopped searching for export opportunities to the region as it had failed to receive payment for a cashew nut shipment in 2014 from a South American partner.
Her company couldn’t even get its products back, Van Anh told the Industry and Trade newspaper.
To facilitate Vietnamese exports to the region, Van called on closer co-operation between relevant State agencies and enterprises, especially in trade promotion.
He also suggested domestic firms improve their understanding about South American trade information, custom procedures and payment methods.
HCM City to host international coffee expo
The 2017 Coffee Expo Vietnam, the most prominent trade event in the coffee, tea, bakery and dessert sectors, which opens in HCM City on June 1, will provide a platform for domestic and foreign companies to network and explore business opportunities.
The second international expo will showcase tea and coffee products and machinery, equipment and materials to make coffee, other beverages and sweet foods.
There will also be several concurrent events like the 2017 Vietnam Super Barista Championship Competition, workshops, one-day training classes and a business matching programme.
Baristas from coffee shops, restaurants, and hotels will compete with the winner getting the grand prize of VND200 million (US$8,810) and being sponsored by Coex Vietnam to participate in the 2018 World Super Barista Championship in Seoul, Korea.
Tax authorities to take closer look at foreign retailers
The General Department of Taxation has asked local tax authorities to inspect foreign retailers operating in Vietnam to see if they are transfer pricing or shifting profits to avoid tax.
Tax authorities will audit corporate, value added and personal income tax paid by these retailers between 2012 and 2016.
The department will also monitor the use of brand names in the form of franchising or ownership transfer among foreign retailers.
Transfer pricing is not illegal per se, but it is a gray area that tax agencies keep a close eye on. Abuse of the practice is often very difficult to prove, especially when it involves multinational corporations with a complex network of internal buyers and suppliers.
Vietnam’s retail market grew 10.2% last year with total sales reaching VND2,670 trillion (US$117.6 billion), according to the General Statistics Office.
The country, recently ranked by A.T. Kearney among the world's top 30 retail markets with the best opportunities, has seen many foreign arrivals.
BigC supermarket chain, MM Mega Market (previously Metro Vietnam), electronics chain Nguyen Kim and Aeon Vietnam are several of the major foreign retailers operating in the country.
In 2015 retail giant Central, run by Thailand's third-richest family, the Chirathivats, made headlines with its US$200 million purchase of a 49% stake in electronics retailer Nguyen Kim, via its subsidiary Power Buy. Then in 2016, Central and Nguyen Kim acquired Vietnam's biggest foreign-owned supermarket chain Big C.
Vietnam's tax authorities last year gave Big C Vietnam a tax bill of VND2 trillion (US$88 million) for its capital gains tax obligations after its former French owner Casino Group sold its stake to Central for 1 billion euros (US$1.14 billion).
In 2015, authorities also collected VND1.9 trillion (US$85.6 million) in tax arrears from the US$700-million acquisition of Metro Vietnam.
German-retailer Metro Cash & Carry, before being sold to Thailand’s TCC International Land, was accused of falsely reporting losses for 12 years in Vietnam and failing to pay tax bills worth US$23 million, according to the General Department of Taxation.