BUSINESS IN BRIEF 6/5
Vietnam’s northern province to export mangoes to Australia
Vietnam’s northern province of Son La will export mangoes to Australia for the first time in May, according to the Plant Protection Department under the Ministry of Agriculture and Rural Development.
The department has recently worked with the provincial People’s Committee to build a coordination programme with Agricare Vietnam Co., Ltd to grant codes to areas growing mangoes for export and to implement irradiation services.
Director of the department’s plant quarantine centre Le Nhat Thanh said his centre will work with the provincial Department of Culture, Sports and Tourism to hold a training course for farmers and provide codes for Yen Chau and Mai Son districts to export mangoes to Australia.
Two batches of mangoes (each about 10 tonnes) will be exported to the market at the end of May.
Mangoes purchased by businesses for export normally cost 15-20 percent higher than others.
Son La is home to more than 4,000 hectares of mangoes, hundreds of which use the Vietnam Good Agricultural Practice (VietGap).
Agricare Vietnam Co., Ltd mainly buys mangoes from southern provinces for export. This is the first time the company has purchased mangoes in the north for export.
Son La mangoes have been sent to Australian partners and received good feedback.
The local mangoes will be packaged and transported to Hanoi for irradiation before being sold to Australia.
Apart from round-shaped mangoes, local farmers are expanding areas for hybrid mangoes in Yen Chau, Moc Chau and Mai Son districts. The potential for exporting mangoes to foreign markets is huge.
The Plant Protection Department is also working with local authorities to grant codes for longan areas in Song Ma district, which has some 6,000 hectares of longans.
Since 2016, the province asked the department to help businesses build a brand name for Son La longans for exports in 2018.
Roundtable shares ways to invest in Vietnam
A roundtable discussing investing in and exporting to Vietnam was held by the enterprise club of the Association of Enterprises in the Ile-de-France region (MEDEF Ile-de-France) on May 4.
The event drew many French businesses which have invested in and exported to Vietnam, as well as partners who want to learn about Vietnam.
Michel Jonqueres, Chairman of the International Committee under MEDEF Ile-de-France, said that the two countries have yet to fulfill their economic and investment potential.
France’s exports to Vietnam were valued at 1.7 billion EUR last year, accounting for only 1 percent of Vietnam’s imports, he said, suggesting French businesses expand operations in the Southeast Asian nation.
Agreeing with Jonqueres, Vietnamese Ambassador Nguyen Ngoc Son said that France is the 15th biggest trade partner of Vietnam. It is the 13th largest exporter to Vietnam and ranks 16th among countries and territories investing in the Southeast Asian country.
At the event, representatives of Vietnamese trade and investment promotion agencies in France presented the strengths of Vietnam’s investment climate, including stable political system, positive and sustainable growth prospects, competitive labour costs and high domestic demand.
Le Cong Thanh, Counsellor in charge of investment in France, stated that Vietnam wants to attract investment in hi-tech and environmentally-friendly fields, which are strengths of France.
Representatives from several French enterprises shared their experience in doing business in Vietnam.
Some 300 French enterprises currently operate in Vietnam, with a total investment capital of 3.4 billion EUR, generating about 26,000 jobs.
MEDEF Ile-de-France comprises of enterprises from Paris and seven surrounding provinces.
Decree designed to encourage investment in agriculture
The Ministry of Planning and Investment (MPI) said it is collecting opinions from organisations and individuals for a draft decree on policies to encourage investment in agriculture and rural development.
The decree regulates additional incentives and investment support of the State for businesses investing in agriculture and rural development. It will be applied to enterprises established and registered for operation in line with Vietnam’s laws.
Under the decree, enterprises having investment projects in agriculture can get deductions of between 50-70 percent of their land rental, or are exempted from the land rental.
Businesses having large scale breeding projects will receive maximum financial support of 5 billion VND (220,000 USD) and at least 3 billion VND (132,000 USD) for building wastewater treatment, transport, electricity and water infrastructure, and purchasing equipment.
The MPI said agricultural projects invested by enterprises will also benefit from other incentives apart from the above-mentioned regulations.
Garment-textile businesses seek to penetrate Russia
With demand to import more than 10 billion USD worth of apparel products each year, Russia is a market with potential for Vietnamese garment-textile businesses.
According to the Vietnam Textile & Apparel Association, businesses have received many jacket and jeans orders from Russian companies in recent years.
The garment-textile industry was predicted to get the most benefits when the free trade agreement between Vietnam and the Eurasian Economic Union came into force in October 2016.
At present, Vietnam exports about 320 million USD worth of apparel each year to Russia, making up roughly 2 percent of the country’s total exports.
The figure is expected to exceed 1 billion USD, accounting for 10 percent of total exports, in the next few years.
Chairman of the Vietnam Textile & Apparel Association Vu Duc Giang said Russia has a cold climate, so its consumers have big demand for jackets and jeans.
However, the problem is how to bring the products into the market at competitive prices since Russia still faces economic difficulties and sales of apparel in the market are not as strong as in the European Union, Giang said.
Additionally, the geographical distance between Vietnam and Russia will make it difficult for businesses to complete payment, he said, adding that more bank branches should be opened in Russia for direct payment between businesses.
He advised businesses to study the market thoroughly before exporting to Russia and other northern European nations, as well as to make regular contact with partners for long-term cooperation.
Enterprises should have business strategies to cope with fierce competition on quality and price in the market, he noted.
It is necessary to create high-quality products, improve designs, and build brand names, he said.
According to the Vietnam Customs, garment-textile export turnover to Russia increased by over 30 percent year-on-year to reach 110 million USD in 2016.
Ca Mau to build rice trademark
The southern province of Ca Mau is focusing on building a trademark for its rice, simultaneously promoting the product’s trade and advertisement after being certified as meeting domestic and international quality standards.
The province is also prioritising connecting with enterprises to popularise Ca Mau’s specialty rice products at agents, shops and supermarkets inside and outside the province.
Currently, the provincial Department of Agriculture and Rural Development plans to restructure the high-quality rice sector by 2020.
Earlier, the Ministry of Agriculture and Rural Development launched a logo design contest for Vietnamese rice trademark, aimed at promoting the reputation of the country’s rice.
The contest is part of activities to realise the project to develop Viet Nam’s rice brand to 2020 with a vision to 2030, which was approved by the Prime Minister two years ago.
Lý Sơn to develop organic garlic farm
The Island district of Lý Sơn in the central province will start constructing its first organic garlic farm, with a total investment of VNĐ4 billion (US$177,000).
The director of the Lý Sơn Island Company, Nguyễn Văn Định, told Việt Nam News that the farm will be built on 2,500sq.m with updated high-tech farming equipment.
He said the farm will provide 700kg tall shoots of garlic each day after a two-month growth period. It will also employ 50 local residents with stable income.
Định said the farm will provide technical consultancy for local farmers in the district to develop organic garlic farms with high productivity and price.
He said the farm can increase its garlic area by growing on ready-made soil on high-rise buildings.
It’s also the first investment in high-tech farm project in the island, which is 30km off the coast of the central province.
The farm plans to offer a tour for VNĐ20,000 (nearly $1) per visitor.
Last year, the National Office of Intellectual Property of Việt Nam, under the Ministry of Science and Technology, recognised the brand ownership for the products of Lý Sơn Island including garlic, onion, seafood, garlic wine, dried seafood and seaweed.
It’s also the first made-in-Lý Sơn seafood and aquaculture products to have their own brand nationwide.
In 2015, 40 tonnes of Lý Sơn garlic were exported to Thailand.
The company, in co-operation with the island district and the island’s farmers association, plans to produce organic black garlic for export to Japan, the US and Asian countries, and produce garlic oil.
Lý Sơn garlic has a distinctive flavour and is in high demand at home and abroad. However, this year only 250ha of garlic and onion were planted due to serious drought on the island.
The island, known as the Kingdom of Garlic in Việt Nam, has 21,000 inhabitants, of whom 73 per cent makes their living from farming garlic and spring onion or fishing.
Agro-tourism lures visitors to Mekong Delta province
Lotus has long been a special plant in Tháp Mười District of Đồng Tháp Province. The beautiful lotus ponds in the Mekong province have been a magnet for visitors to Đồng Tháp.
Sa Đéc is famous for its flower gardens, which give the city its title as the “Mekong Delta’s flower capital”. Besides the economic value the flowers offer, the gardens have also been developed into stunning tourism sites.
Tân Thuận Đông is an islet in the Tiền (Anterior Mekong) River in Cao Lãnh city. Vast gardens of fruits such as mango, orange and longan attract visitors, who come to sightsee and also get a first-hand experience of farmers’ lives.
The locality also offers recreational activities like folk singing and dancing and other cultural performances and unique foods, leaving visitors with unforgettable memories.
There are now more tours to Đồng Tháp, which offer trips to beautiful flower villages, orchards and lotus fields, turning the province into one of the tourism hubs of southern Việt Nam.
Ties with franchisees key to success
Building a strong relationship with franchisees is the basis for success in the franchise business, delegates said at a seminar in HCM City yesterday.
Nguyen Phi Van, chairwoman of Retail and Franchise Asia, said franchising was a common strategy that companies choose when expanding their business.
Franchsing in the food and beverage industry has developed strongly in Viet Nam, especially in the fast food segment, she said.
Before starting a franchise, businesses need to evaluate their financial efficiency and the feasibility of their target market.
They should also build a good internal labour force so they can effectively support their franchisees.
There are six development phases involved in a relationship between franchisors and franchisee, according to Van.
They include the “glee phase” (when franchisees are pleased with franchisors); “fee” (franchisees experience practical business operations and feel pressure of expenditures); and “me” (franchisees feel they have explicit knowledge of trading and think that the management role of franchisors is no longer important and does not contribute much to their success).
The next phase is the “free” phase in which franchisees do not want to be managed. This is the period in which the franchise relationship can break down if the two sides do not have ways to retain their relationship, she said.
If they pass the “free” phase, they will come to the “see” phase (the two sides will sit down and admit each other’s value and find ways to build a better relationship for mutual benefit).
The last phase is the “we” phase, which is the peak in the relationship, when the two sides combine their strength to develop their brand.
Franchisors must understand the various phases in developing the businesses and adopt support plans and training programmes for franchisees in each phase, Van said.
To have a sustainable franchise, businesses need to understand that the most important aspect in a franchise is building a good relationship, she said.
To make sure the franchisor and franchisee relationship does not break down, the two sides must adhere to the terms of the franchise agreement, she said.
Le Thi Ngoc Thuy, director of IP Plus Group, which franchises Viva Star coffee brand, said the company entered into a franchise business in 2013 and has 63 franchised Viva Star coffee shops plus two of its own. Some disagreements arose when franchisees tried to intervene to deeply in the management of franchised shops and did not agree about maintenance fees, she said.
Lawyer Ho Huu Hoanh said franchisors should clearly state their franchise policies, fees and other terms in their agreements so that franchisors can avoid disputes later.
Regarding difficulties faced by franchisees, Hoang Son, a franchisee of the US Smoothie Factory, said it faced difficulties in sourcing raw materials for the Smoothie Factory’s product formula in Viet Nam. The two sides gradually solved the problem, with the franchisor helping his company import materials from the United States, he said.
Huynh Ngoc Hoa, a franchisee of Viva Star Coffee, said the franchisor typically uses a common management process for its entire franchise chain, but should consider adjusting it to suit each region.
Franchisors should collect feedback from franchisees to better develop the franchise system, he said.
The seminar is part of a series of seminars included in the Vietnam Retail and Franchise Show 2017 to be held at HCM City’s Saigon Exhibition and Convention Centre from June 1-3.
Firms stop pork import, buy local
With the glut of pigs forcing local pork prices down to levels comparable with imported ones, some food processing firms in HCM City have suspended imports and increased local purchases.
A spokesperson for Cau Tre Export Goods Processing Joint Stock Company said the company normally uses both local and imported pork for processing, but with local prices plunging, it has temporarily stopped imports. The company plans to buy 200-250 tonnes, equivalent to three months’ requirement, and stockpile, he said.
Nguyen Dang Phu, deputy general director of Vissan Co Ltd, said his company has stopped pork imports and is buying more pigs from Long An Province.
But the pigs must meet VietGap standards, should be bred under the Livestock Competitiveness and Food Safety Project (Lifsap), and must be from farms participating in a HCM City programme to trace their origins, he said.
Vissan has increased its buying from 1,500 pigs a day to 1,800 in the last 10 days, he said.
The HCM City Department of Industry and Trade held a meeting with food processing firms and retailers on Wednesday to discuss ways to stimulate consumption of pork.
It told the meeting that pig prices in the south are VND25,000-30,000 a kilogramme (US$1.10-1.32), a drop of VND13,000-15,000 from a year ago. The prices of pigs bred without following VietGap standards or being part of the Lifsap or origin-tracing programmes have fallen the most.
A survey by the department in provinces like Long An, Tra Vinh, Dong Nai, Vinh Long, and Ben Tre found that a majority of pig farmers are small households who fail to keep abreast of the market. They mainly sell their pigs to traders for cash and are afraid of tying up with businesses.
Pig exports have been hit due to various difficulties in recent years, but farmers have not reduced the sizes of their herds, leading to oversupply.
Retailers told the meeting they have rolled out promotions to stimulate pork demand, which has increased significantly as a result.
A Saigon Co.op executive said 10-20 per cent discounts since April 25 have increased pork sales at Co.opmart and Co.op Food by 20-30 per cent.
Ho Quoc Nguyen, PR director of Central Group Vietnam, said within a week of offering 20-30 per cent discounts on pork, sales at Big C have picked up by more than 30 per cent.
Lotte Mart supermarkets are also offering discounts of 10-20 per cent.
Nguyen Huynh Trang, the department’s deputy director, said besides working with producers and distributors in HCM City, the department is also in touch with its counterparts in other provinces to explore ways to boost consumption.
It seeks to establish close links between farmers and businesses and develop an efficient supply chain for the pig breeding sector, she said.
Trang and others at the meeting agreed that the Government needs to have development plans for the sector to avoid a repeat of this situation in future.
Dong Nai earns $5.2b from exports till April
The southern province of Dong Nai shipped goods worth US$5.2 billion abroad from January to April, up 12.8 per cent from the same period last year.
The locality also imported goods worth $4.78 billion during the period, according to the provincial Department of Industry and Trade.
The department said the trade surplus can be attributed to local businesses’ efforts to seek domestic supply of materials and goods.
Stronger connection among domestic enterprises has also helped reduce imports while allowing domestic enterprises to enjoy tax incentives when shipping their products to markets with which Viet Nam has signed free trade agreements, including the Republic of Korea (RoK), Japan, Chile and ASEAN nations.
Export revenue from traditional markets recorded good growth, such as an 88 per cent increase year-on-year in the RoK market, nearly 13 per cent in Japan, over nine per cent in France and nearly eight per cent in the United States.
The province’s major export products were footwear, machinery and equipment, vehicles and fibre.
Meanwhile, a number of agricultural products saw their export price rise in the period, such as cashew nut, coffee bean and rubber latex.
The locality aims to look for more export markets while developing brand names of agricultural products to increase export revenue.
DHL Express Việt Nam receives Gold Award
DHL Express Việt Nam received the Gold Award for the Best Community Programme at the 9th Global CSR Summit and Awards 2017.
The awards are the region’s longest reigning and most widely respected CSR summit.
The award recognises and honours companies for outstanding, innovative and world-class products, services, projects and programmes implemented.
Receiving the honour for the first time, DHL Express Việt Nam was awarded for its successful community projects, which have resulted in poverty alleviation, better education, business growth and community engagement. As part of the company’s "Living Responsibility" programme, DHL Express Việt Nam focuses on the three pillars of environmental protection (GoGreen), disaster management (GoHelp) and education (GoTeach), as well as supporting employee volunteerism. Through these programmes, DHL Express Vietnam has made a positive impact on the wellbeing of local communities and society.
“This is the first time DHL Express Việt Nam has participated in the Annual Global CSR Summit and Awards, and we are very proud to be globally recognised with a Gold Award for the Best Community Programme. This is a testament of our dedication to providing the very best community project to our local community here in Việt Nam,” said George Berczely, DHL-VNPT Express general director.
Presotea seeking local franchisees
Taiwanese bubble-tea chain Presotea is looking for franchisees in Vietnam to expand its international network, according to Inside Retail, Asia’s leading authority on retail industry news and trends.
During its expansion plans, Presotea is looking at Vietnam, where the milk- and bubble-tea market is expanding rapidly with numerous international brands already on the ground.
“We are looking for partners to set up 30 to 50 stores in Vietnam, with five in the first year,” said Presotea’s overseas business manager, Mr. Jackson Kah.
What makes Presotea different from other players and become the biggest fresh-tea chain in Taiwan is the use of espresso-type machines to brew tea in a bulk bucket, which preserves the fresh taste. By using tea buckets, Presotea is also able to save and control the quantity of ingredients for its stores.
Presotea’s menu is filled with various kinds of high quality tea, including Jasmine green, Oolong, Sencha green, and Darjeeling. Customers can hand-pick the ingredients to make their own cup of tea.
Franchisees should have experience in chain restaurant management and market development and understand consumption trends.
The franchise investment is upwards of $1 million. Apart from providing standard administration and operation guidelines, Presotea provides in-store problem solving and operation consultation to assist franchisees in meeting the brand’s professional tea brewing standards.
Presotea is owned by Good Young and currently has 340 outlets in five countries, with more to come.
There are many bubble-tea brands already in Vietnam, including Ding Tea, Gong Cha, and Chatime.
Firms compelled to issue e-invoices from 2018
The General Department of Taxation has ruled that from 2018, firms with chartered capital of more than VND15 billion must issue electronic invoices and periodically send tax offices data on the issued invoices.
Aiming to have 90% of enterprises issuing e-invoices by 2020, the regulation will apply to enterprises in industrial parks, economic zones, export processing zones, high-tech zones, non-business public units having production or commercial activities as prescribed by law and newly established enterprises.
From early 2019, many other types of enterprise, including household businesses with revenue of more than VND3 billion, will be forced to issue e-invoices and those with tax codes provided by tax authorities.
This is the roadmap proposed by the General Department of Taxation under the Ministry of Finance in a proposal for a decree replacing Decree No. 51/2010 /ND-CP and Decree No. 04/2014 /ND-CP on invoices for sales of goods and services.
According to the Ministry of Finance, the number of businesses using e-invoices has increased significantly over the past few years, rising from 30 enterprises in 2011 to 331 in 2015 and 656 in 2016. The number of electronic invoices issued has also increased sharply, from 9,014 in 2011 to more than 277 million in 2016. E-invoicing will benefit enterprises as it will save time and cost, and improve production efficiency, service quality and competitiveness.
The Ministry of Finance said that at present, information technology infrastructure can meet the needs for issuing electronic invoices.
In particular, data of the Ministry of Information and Communications shows that there were more than 43.9 million 3G subscriptions and 9.3 million broadband Internet subscriptions nationwide by January 2017. 3G is available in all of the nation’s 63 provinces and cities while 4G services are also being expanded.
Electronic tax filing and payment services have been adopted by 576,056 enterprises, accounting for 99% of the total in operation.
An electronic invoice containing data on sales of goods or services is issued, sent, received, stored and processed electronically. Electronic invoices must comply with the country’s legal regulations and be issued and processed by the computer systems of organizations which have been granted tax codes.
Sugar import quota for 2017 to be auctioned
The Ministry of Industry and Trade will put up for auction the quota for importing 89,500 tons of sugar this year, and at least VND140 billion (about US$6.15 million) could be raised if the bid for this year’s quota is the same as that last year.
The ministry has issued Circular 05/2017/TT-BCT regulating auction of sugar import quota in 2017, which will take effect from May 6 and expire on December 31.
Traders using crude sugar for domestic refining or refined sugar as a feedstock and relevant individuals and organizations can participate in the auction. The sugar import quota auction will be conducted through a council founded by the Ministry of Industry and Trade.
The sugar import quota auction in 2016 took place at the office of the Ministry of Industry and Trade on September 7 that year, with 22 valid bids for import of 85,000 tons of sugar. The ministry raised VND128 billion from the auction.
Experts have expressed concern that this sugar import quota this year may cause an oversupply. According to the Vietnam Sugar and Sugarcane Association (VSSA), the country’s sugar exports to China have come to a virtual standstill over the past few weeks while the amount of sugar smuggled into the local market has surged and its price has been VND500-1,000 lower than domestic products.
White sugar prices in the final week of April ranged from VND15,100 to VND16,300 per kilo while refined sugar was sold at VND16,800-17,300 per kilo.
According to data of VSSA, sugar inventories at factories and trading firms had amounted to over 700,000 tons by April 21. At the same time, 13 sugar factories have finished production for the 2016/2017 season.
New manufacturing orders rise sharply in April
The strong growth of new orders continued to support rises in output, employment and buying activity in the Vietnamese manufacturing sector in April, with a survey-record increase in new business from abroad reported.
According to a Nikkei report released on May 3, the Vietnam Manufacturing Purchasing Managers’ Index (PMI) was 54.1 in April, down from 54.6 in March but still a solid monthly improvement in the health of the sector at the start of the second quarter. Business conditions have now improved in each of the past 17 months.
A sharp rise in new orders was central to the latest improvement in operating conditions, with new business from abroad increasing at a survey-record pace. The rate of growth in new export orders has now quickened in three successive months.
Panelists linked expansions in both total new business and new export work to strengthening client demand. New orders have increased continuously since December 2015.
Andrew Harker at IHS Markit, which compiles the survey, said a record rise in exports was the key highlight from the latest Vietnam Manufacturing PMI survey as firms once again displayed a good ability to secure new work in international markets.
This success fed through to improvements throughout the sector, with production, employment and purchasing activity all rising solidly in April. The manufacturing sector therefore remains a star performer in Vietnam at the start of the second quarter, the expert said.
Growth of new work led manufacturers to increase production again in April. The rate of expansion was marked, albeit weaker than March’s 22-month high.
The rise in production enabled firms to work through outstanding business despite strong new order growth. The fall in backlogs of work was the first since the end of 2016.
Besides, employment increased for the thirteenth successive month as firms responded to new order growth. The rate of job creation eased, but remained solid.
A further impact resulting from the rise in new work was a pick-up in purchasing activity by Vietnamese manufacturers. The rate of expansion remained sharp and contributed to a tenth successive monthly rise in stocks of purchases.
Some panelists mentioned having increased inventories in anticipation of further new order growth in the coming months. Confidence around future rises in new business was also a factor behind continued strong optimism with regards to production over the next year.
Higher demand for inputs encouraged suppliers to increase their prices during April, thereby leading to another monthly rise in input costs. There were also some mentions of higher prices for goods from China.
However, the rate of cost inflation eased to the weakest since last October. Output prices also rose at the slowest pace in six months as charges were increased only modestly. Where factory gate prices rose, this was largely in response to higher input prices.
Vietnam imports 35,000 autos in Jan-Apr
Imports of completely-built-up (CBU) autos in the first four months of the year increased nearly 20% year-on-year to 35,000 units, according to the General Statistics Office.
In April alone, Vietnam imported 8,000 CBU autos worth nearly US$200 million, decreasing by about 3,000 units but increasing by US$20 million month-on-month.
In the first four months, the total spending on CBU auto imports was US$688 million, down 5.7% against the year-earlier period.
Statistics show that the majority of imported cars this year were cheaper than in the same period last year, especially passenger cars with less than nine seats.
In the first quarter of this year, the volume of cars with less than nine seats imported from ASEAN countries jumped 67.6% to 14,460 units, with Thailand accounting for 10,050 units, up 28.8%, and Indonesia 4,400 units compared to 833 units last year.
Experts predicted that car imports from Thailand and Indonesia will continue to grow strongly in the coming time because the duty on CBU autos imported from ASEAN countries will go down from 30% in 2017 to 0% in 2018 under the ASEAN Trade in Goods Agreement (ATIGA).
Traders forecast that sales of autos with below nine seats this year will fall by 7-10% over the same period last year as consumers will wait until 2018 to buy cars.
However, the import volume of auto parts and accessories in the first four months of this year surged. Specifically, Vietnam spent US$320 million importing auto parts and accessories in April, raising the total in the first four months of this year to US$1.15 billion, said the statistics office.
The country spent nearly US$1.84 billion importing CBU autos and accessories in the first four months, up 3.9% over the same period last year.
Jetstar Pacific receives IOSA registration
Jetstar Pacific Airlines has been registered under the international operation safety audit (IOSA) of the International Air Transport Association (IATA).
The low-cost airline has been added to the list of airlines that have received the IOSA registration of IATA.
The IOSA programme is an internationally-recognised safety evaluation system, designed to assess the operation management and control of safety standards of an airline. According to Jetstar Pacific chief executive officer Nguyen Quoc Phuong, the airline cleared over 900 standards and recommended practices outlined in the programme to get the certification.
Jetstar Pacific is currently using the Safety Management System approved by the Civil Aviation Authority of Viet Nam and based on standards of IATA, the International Civil Aviation Organisation and Australia’s Qantas Airways.
Gyeongsan, Da Nang to co-operate in cosmetics
Da Nang and South Korean city of Gyeongsan have inked a Memorandum of Understanding (MoU) on development and co-operation in the cosmetic industry.
The MoU, which was signed in Da Nang during a working visit by a delegation from Gyeongsan last week, also aims to boost tourism, investment and technology transfer among businesses based in Korea and Da Nang.
As planned, Gyeongsan will open a showroom at the city’s exhibition and trade fair centre to introduce cosmetic products and technology.
Last year, the Da Nang-based Green Belt Technology and Environment Company introduced the first made-in-Da Nang organic cosmetics using local essential oils and available natural ingredients.
The Arya Tara cosmetic products of Da Nang have been chosen to feature in the ‘typical souvenirs of Da Nang’ list for 2017, when the city hosts the APEC summit this November.
Tourists from South Korea comprise the second-largest segment of foreign tourist arrivals to Da Nang, with more than 443,000 Korean tourists – nearly 20 per cent of total foreign travelers – visiting the city last year.
Da Nang is home to 53 foreign direct investment projects from South Korea with total capital of US$734 million.
The budget airline, T’way Air is operating five flights each week from Da Nang to Daegu, four flights between Da Nang and Seoul, and a daily route between HCM City and Seoul, while Jeju Air offers daily flights from Da Nang to Incheon.
Local low-cost airline, VietJet Air, also launched a new route from Da Nang to Daegu, South Korea, while Vietnam Airlines has operated a Da Nang-Busan route, with two flights per week, since 2013.
According to the city’s tourism department, there are 12 flights from South Korea to Da Nang every week, carrying an average of 1,500 passengers.
As planned, two new direct flights from Da Nang to Pusan and Muan, Korea would be opened later this year.
The city also plans to boost tour exchanges between Jeju Island; Incheon, Seoul; and other localities, including UNESCO-recognised world heritages Phong Nha-Ke Bang, Hue City, Hoi An and My Son in central Viet Nam.
HCM City to organise ICT fair
The first Electronics – Information Communications Technology Fair & Exhibition 2017 will be organised by HCM City next week.
The exhibition is expected to have 50 booths displaying new software, electronic, telecommunications and chipset products that can be used to set up e-governance and make the southern metro a smart city.
It will also feature conference on new products and technologies, signing of agreements for co-operation and technology transactions and a gala dinner for executives in the sector.
The city Department of Information and Communications will organise the event along with others like the HCM City Trade and Investment Promotion Centre, the HCM City Computers Association, the Viet Nam Information Safety Association, the HCM City Chipset Association, Quang Trung Software Park, and the HCM City National University’s Software Park.
Asia Coffee-Markets quiet; premiums edge lower in Vietnam
Coffee export markets were quiet this week with premiums in Vietnam edging down on a rebound in London prices while discounts widened in Indonesia amid a steady supply of bean, traders said on May 4.
The London ICE July contract extended its rebound for a third straight session, rising 1.95 percent to close at $2,034 per tonne on May 3.
The 5-percent black and broken grade 2 robusta in Vietnam, the world's largest grower of robusta beans, was quoted at a premium of $20-$30 per tonne to London's ICE July contract, narrowing from $40-$50 per tonne a week ago.
Coffee was traded locally at 44,800-45,000 dong ($1.97-$1.98) per kg, up from 43,000 dong on April 27. However, trade was thin as farmers held back their stock seeking higher prices.
"Farmers are still holding onto beans as they want to wait for prices to bounce back to their previous level," said Nguyen Quang Binh, an independent analyst.
Vietnam exported an estimated 604,000 tonnes (10.1 million 60 kg bags) of coffee in the first four months of 2017, down 8.8 percent from a year ago, the government said on April 28.
Coffee exports in April were estimated at 150,000 tonnes, well above market expectations of 100,000-130,000 tonnes.
Discounts widened this week in Indonesia, traders said. Robusta grade 4 defect 80 traded at a $40-$80 discount to the July contract, compared with a $40-$50 discount on April 27.
"This is because prices at the London terminal have dropped significantly," a trader in Lampung said, adding that the big discount left traders on the sidelines.
Meanwhile, the market is seeing a steady supply of beans as the harvest continues, traders said.
Renewable energy will lead the power sector
Renewable energy will lead the energy sector in the next 20 years and the production cost of renewable energy is gradually approaching that of traditional energy, heard a conference on energy solutions for Vietnam held by General Electric Company (GE) in Hanoi on April 27.
Andres Isaza, vice president and chief commercial officer of GE Renewable Energy, said there are three trends in the energy industry: technological change, scattered electricity production and reduction of CO2 emissions.
Digital technology with data analysis software and modern hardware will provide stable power supply at more reasonable costs.
In addition, the trend toward scattered electricity generation, in which power plants are not centralized at certain areas but located near sources of electricity consumption, will also change the energy sector. Consumers have become electricity producers as more and more individuals and organizations install and operate their own power generation units. Therefore, power firms will face many challenges due to profit decreases.
In the third trend, the world's electricity industry is required to slash CO2 emissions by using modern technology. In December 2015, as many as 196 countries signed the COP21 Paris agreement to keep global temperatures in this century at no more than two degrees Celsius above the average in the pre-industrial era.
Vietnam will be directly affected by these changes, said Isaza, and gas power will account for a greater part of the country’s power sector and renewable energy will grow faster than traditional energies.
According to Isaza, new technology has helped reduce the cost of renewable energy production and in the next 20 years, renewable energy will contribute 60% to growth in the electricity sector.
Wind power is a source of renewable energy in which Vietnam has advantages, but the Government needs to issue policy incentives and create favorable conditions for this sector to grow and contribute to the development of the electricity industry.
Basic salary to rise to VND1.3 million from early July
The monthly basic salary for civil servants and public employees will increase 7% to VND1.3 million (about US$57.2) from the current VND1.21 million from July 1, according to Decree 47/2017/ND-CP issued on April 24 by the Government.
The new basic salary, which is used for calculating payrolls and allowances, will be applied to public officials, public employees working in agencies and civil service providers of the Vietnam Communist Party or the Government, state-funded socio-political organizations and the armed forces.
The ministries, ministerial-level agencies and other Government agencies will have to use the unused budget for wage reform in 2016, State budget estimates and public incomes to cover the pay raise in 2017.
Meanwhile, provinces and cities under the central Government will use 10% of their regular expenditures (excluding salaries and salary-based allowances), part of public incomes, 50% of increased local budget and unused budget for salary reform in 2016 (if any) for the increase.
Localities having limited budgets will receive additional support from the Government. After using all of the above sources but still lacking money for salary payments, such localities will receive extra money from the State budget.
Plans weighed to restrict private vehicles in HCMC
Restricting private vehicles is a must to reduce traffic congestion and air pollution in HCMC, said the director of the city’s Department of Transport at a meeting on April 27 on the city’s socio-economic performance in the first four months of 2017.
Bui Xuan Cuong said the department would send the HCMC People's Committee plans and specific roadmaps to restrict private motorcycles and automobiles in the city.
The department is working with relevant agencies to research and map out plans to reduce traffic congestion. Transport experts and scientists will join forces to evaluate and adjust the plans before seeking public comment.
"Restricting private vehicles is an urgent task since the development of the city's transport infrastructure cannot meet the fast growth of private vehicles, causing not only traffic congestion but also environmental pollution,” he added.
Data as of April 15, 2017 showed the city had had about eight million vehicles, 640,000 of them autos and the remainder motorcycles. In addition, the city has some 169 autos and 816 motorcycles newly registered a day.
According to the plan to reduce environmental pollution by 2020, the city has to cut 70% of emissions from vehicles. Therefore, controls on private vehicle growth will help reduce not only congestion but also environmental pollution.
Speaking about the recent traffic congestion situation, Cuong said there are 120 construction site fencing hoardings in the city at the moment. To construct Metro Line No.1, the number of such hoardings will even increase in the coming time.
Petrol prices slightly drop
The Ministry of Industry and Trade and Ministry of Finance decreased prices of all oil and petrol products from 3:00pm on May 5.
Accordingly, the prices of RON 92 slightly dropped by 309 VND per litre to be sold no more than 17,274 VND (76 US cent) per litre.
The prices of E5 bio-petrol declined by 314 VND per litre to trade at a maximum of 17,068 VND (75 US cent) per litre while the new ceiling prices of diesel oil 0.05S and kerosene are 13,603 VND (59 US cent) per litre and 12,053 VND (53 US cent) per litre.
According to the two ministries, the average global price of RON 92 during the last 15 days to May 5 was 62,147 USD per barrel, down 4 USD from the previous adjustment.
The prices of petrol and oil are adjusted every 15 days depending on changes in the world market.
Lao Cai to develop tourism, border gate economic zone
The Prime Minister has approved a task on planning the development of Lao Cai border gate economic zone in the northern province of Lao Cai to 2040 with a vision to 2050.
The proposed border gate economic zone will cover the districts of Bat Xat, Bao Thang, Muong Khuong and Si Ma Cai and Lao Cai city on 15,929 hectares.
It is expected to become a key economic area of the locality, promoting trade, industry and service development and improving locals’ living standard while protecting the natural ecosystem and consolidating national defence.
It is also hoped to serve as a multidisciplinary economic zone, a development pole of the northern midland and mountainous area and a trade hub of the area of ASEAN and the southwest of China.
HNX earns 142 billion VND in auctions in April
Some 142 billion VND (6.2 million USD) was raised through four auctions on the Hanoi Stock Exchange (HNX) of state-owned enterprises selling shares from businesses in their non-core areas in April.
The auctions were held for the State Capital Investment Corporation (SCIC) to divest from Barotex Vietnam Investment and Trading JSC, Vietnam National Shipping Lines to sell shares of Vinalines Ship Repair Company, the Ministry of Agriculture and Rural Development to offload its shares from a maize investment and development company and Truong Son Construction Corporation to sell shares of Construction JSC 565.
More than 31 million shares were put up for sale while investors registered to buy some 40 million shares, 31 percent higher than the volume offered.
Shares in the four auctions sold out.
In May, HNX will hold nine auctions of the central investment and development JSC, Hanoi Food JSC, Telecommunication Project Construction Development JSC, Vietnam Post and Telecommunication Land JSC, PetroVietnam Oil Quang Ninh JSC, Post and Telecommunication Service Construction JSC, Vietnam General of Agricultural Materials Corporation (VIGECAM), Apax Holding JSC and Viglacera Corporation.
Lazada begins to sell New Zealand products
Lazada began to sell more than 70 New Zealand products ranging from food and beverages to skincare on Wednesday at www.lazada.vn.
They include milk products are from Anlene and Meadow Fresh, naturally harvested green shell mussels from Pure New Zealand, and natural skincare brand Trilogy.
Also available are premium products like Manuka honey, natural peanut butter, organic milk powder, goat milk, and beef jerky.
“We recognise that Vietnamese consumers are not only looking for quality products, but are also very sensitive to product origins,” Karlene Davis, New Zealand’s consul general and trade commissioner in HCM City, said.
“They are looking for products that they can trust and that come from a clean environment. New Zealand is a leader in food safety and product traceability and is a trusted supplier of high-quality and safe food to consumers in more than 100 countries.”
This online launch would make “quality products from New Zealand’s sustainable and pristine environment truly accessible across Viet Nam,” she said.
Last year there was 52 per cent internet penetration in Viet Nam.
Besides, with changing demographics and consumer behaviour, the e-commerce market is set to grow to US$7.5 billion by 2019.
New Zealand has a long trading history with Viet Nam, and last year exported $249 million worth of products to the country, with milk powder, butter and dairy spreads being the top items.