BUSINESS IN BRIEF 20/6
Vietnam’s support industry viewed as boasting huge potential
Chief Representative of the Hanoi Office of the Japan External Trade Organisation (JETRO) Kitagawa Hironobu said Vietnam’s support industry has huge potential during the Vietnam Support Industry Forum in Hanoi on June 15.
According to the JETRO, Vietnam’s manufacturing currently ranks second in ASEAN, notably electronics.
Major electronic groups such as Intel, Panasonic and Microsoft have moved to Vietnam while domestic rivals continue winning new orders. Imports tripled from 2011 to 2016 while exports surged nearly five-fold from 12.8 billion USD to 65.8 billion USD in 2015.
Over the past years, exports of mobile phones accessories have greatly contributed to reducing Vietnam’s trade deficit. This year, Vietnam plans to earn more than 40 billion USD from electronics export.
Speaking at the event, Hironobu said Japan is interested in Vietnamese market, evidenced by more than 570 projects in 2016. However, the rate of locally-made materials and spare parts is only 34 percent, forcing Japanese firms to import them from neighbouring countries like Thailand and China.
He suggested Vietnamese firms raise added values for spare parts so that they could catch up with Japanese partners in the global supply chain.
President of the Vietnam Electronic Industries Association Luu Hoang Long said Vietnam is gradually becoming a new manufacturing centre with qualified workforce costing lower than Indonesia’s and only half of Thailand’s.
According to him, Vietnam’s electronic industry will still face challenges in the future.
India is Vietnam’s biggest rival in terms of foreign investment attraction due to its government and federal incentives, low salaries and high technology, he said.
The event was co-hosted by the JETRO and the Ministry of Industry and Trade’s Trade Promotion Agency.
Bank stocks rise on coming bad debt resolution
Shares ended June 19 on a positive note as banks reacted to information that the new bad debt settlement resolution will likely be approved by the National Assembly this week.
The VN-Index on the HCM Stock Exchange increased 0.73 percent to close at 766.83 points. The benchmark southern index expanded 1.5 percent last week.
On the Hanoi Stock Exchange, the HNX-Index gained 1.12 percent to end at 99.41 points. The northern market index rose 1 percent a week ago.
Bank stocks were the major contributor to the market rise as all nine listed lenders on the two exchanges gained value.
Nam Viet Bank (NVB), the smallest capitalised bank among nine listed banks, hit the maximum daily rise of 10 percent for a second session on the Hanoi Stock Exchange, closing at 10,300 VND a share. These shares have climbed 110 percent since early this year.
Other banks such as Sai Gon-Hanoi Bank (SHB), Military Bank (MBB) and Sacombank (STB) increased 4.1 percent, 2.7 percent and 1.8 percent, respectively. These shares have also increased substantially since the beginning of 2017.
Sai Gon-Hanoi Bank has gained 64 percent compared to December 30 last year; Sacombank, up 50 percent; and Military Bank up 48 percent.
Three biggest listed banks including Vietcombank (VCB), Vietinbank (CTG) and BIDV (BID) rose by a more modest 0.5-1.5 percent each.
According to Bao Viet Securities Co, the National Assembly will likely approve the new bad debt settlement resolution this Wednesday. Only one issue remains unresolved surrounding the time frame, on which there are currently two perspectives. One is dealing with non performing loans (NPLs) ending December 31, 2016 and the other is applied to bad debts arising before 2016 as well as during the period in which the bad debt settlement resolution takes effect.
“With the high possibility that the resolution of bad debt will be approved, we think that the banking stocks may continue to gain momentum in the next two sessions. As a result, the overall performance of the indices will likely also receive substantial support,” Tran Hai Yen, a stock analyst at Bao Viet Securities Co, wrote in a report on June 19.
Apart from banks, many other large-cap stocks picked up and contributed to the market rise, including Vinamilk (VNM), brewery Sabeco (SAB), Petrolimex (PLX), VinGroup (VIC), Saigon Securities Inc (SSI) and PV Gas (GAS).
“From our view, the overall market outlook is positive in the short-term,” Yen said, but warned about rising profit-taking pressure on large-cap stocks lacking supportive information.
Liquidity was positive with a total of 265.3 million shares worth a combined 5.1 trillion VND (224.1 million USD) traded on the two markets.
Ho Chi Minh City’s economy grows 7.76 percent in six months
Ho Chi Minh City’s gross regional domestic product grew by 7.76 percent in the first half of this year, higher than the same period in the past two years.
It was unveiled during a meeting of the municipal People’s Committee on June 15 to discuss the city’s socio-economic-cultural performance and the budget expenditure and spending in the first half of the year, and major tasks for the remaining months.
With this growth, the city is likely to fulfill the set growth of 8.4 – 8.7 percent this year, said Chairman of the municipal People’s Committee Nguyen Thanh Phong, adding that the total State collection hit 173 trillion VND (7.52 billion USD), or 49.5 percent of the yearly target.
The services sector grew 7.38 percent while industry and construction expanded by 7.17 percent and agriculture up 5.93 percent.
Pham Thanh Kien, Director of the municipal Department of Industry and Trade, said the six-month industrial development index rose 7.5 percent year-on-year, the highest in the past five years.
During the period, there were more than 18,000 new businesses with a total registered capital of upwards 227 trillion VND. The total registered and additional capital topped 492 trillion VND, marking a 2.2-fold increase annually.
The city also licensed 340 foreign-invested projects, mostly in the processing and manufacturing industries, which doubled the city’s capital attraction of the previous period in 2016 to 2.15 billion USD.
In order to achieve set targets this year, the municipal authorities asked departments and localities to clear obstacles to businesses by improving business climate, reforming administrative procedures regarding taxation and customs while perfecting start-up ecosystem and promoting start-up innovation.
The city will also promote programmes on supply-demand, business-bank connectivity, demand stimulation, and market stabilisation.
Exhibitions to promote Vietnam’s support industry
Three exhibitions introducing auxiliary products for industries will be held concurrently in Hanoi from September 13-15, as part of activities to realise commitments of the Japanese Government to assisting support industry development in Vietnam.
The events are the seventh Vietnam-Japan Support Industry Exhibition, an expo on equipment and technology and support industry for the electronic industry and an expo on Vietnamese support industry products.
They will be co-hosted by the Japan External Trade Organisation (JETRO) in Hanoi, Reed Tradex Co., Ltd of Thailand, the Ministry of Industry and Trade’s Vietnam Trade Promotion Agency and the Vietnam Electronic Industries Association.
Speaking at a press conference in Hanoi on June 15, Director of the Vietnam Trade Promotion Agency Bui Huy Son said the events are hoped to offer exhibitors opportunities to seek partners, thus promoting investment and trade cooperation between Vietnam and Japan.
Son said the Vietnamese Government is proactively assisting firms operating in the support industries in applying modern quality management systems, improving the quality and reliability of products, thus enabling them to join global production and supply chains.
Through the exhibitions, Vietnamese firms will be supported to increase the ratio of local contents in electric products and support industries.
Hironobu Kitagawa – Chief Representative of JETRO said the organisation published a book listing outstanding Vietnamese firms working in the manufacturing industry.
This will be a useful reference for Japanese enterprises and those from other countries, which are exploring opportunities to pour investment into Vietnam, he added.
Hironobu Kitagawa said the Vietnam-Japan Support Industry Exhibition will display the Pre-matching system for the first time, which allows enterprises to connect and exchange in a more effective way.
Suttisak Wilanan – Deputy Managing Director of Reed Tradex stressed that the organisation of the three exhibitions at the same time and same location will help increase business opportunities by three times and raise localisation index for Vietnam’s electronic industry.
Attended by over 200 leading brands from 20 countries and territories worldwide, the events will help Japanese manufacturers to meet and tighten links with local spare part manufacturers.
After the press conference, the organisers signed an agreement on cooperation to enhance the localisation ratio, promote the support industry in Vietnam.
Ways to ensure sustainable economic growth in mid term sought
Removing business barriers, clarifying responsibility of management units and dealing with bad debts are among solutions raised at a workshop in Hanoi on June 15, aiming to ensure the rapid and sustainable economic growth in the mid term.
Nguyen Anh Duong from the Central Institute for Economic Management (CIEM), said Vietnam’s economic growth has remained sluggish over the past years, suggesting a close and flexible combination between fiscal year and capital and monetary markets.
It is necessary to take into account the greatest benefits while engaging in the Trans-Pacific Partnership (TPP) agreement and materialsing free trade agreements in general.
Other delegates at the even proposed the Government well implement its commitment to building a facilitating Government that supports businesses.
They also called for efforts to curb with bad deeds like corruption, wastefulness and group interests to ensure a fair and transparent business environment.
The Government should consistently pursue its viewpoints on sustainable development and manage the economy on the basis of market rules, they said.
Dr. Dang Thi Thu Hoai, from the CIEM, said reforming the growth model is an urgent task to serve the target of rapid and sustainable growth in the context of integration.
She underscored the need to identify both opportunities and challenges facing the economy.
Hoai noted that it is necessary to improve added values of products, especially those belonging to promising sectors, and quality of human resources, looking towards higher productivity.
“The Government should take measures to ensure equal access to resources of businesses, avoiding wastefulness, conflicts or overlapping of interests,” she said.
Mechanical machines, equipment displayed in Hanoi
The latest equipment and technologies for the manufacturing, engineering and electronics industries are being showcased at the CA-MEXPO Vietnam 2017 which opened in Hanoi on June 15.
On display at the exhibition, the second of its kind in Vietnam, are industrial machines, vehicles, agricultural machines, wood processing machines, mining machines, security devices, household appliances and energy-saving equipment.
The three-day event, jointly held by the Trade Promotion Agency under the Ministry of Industry and Trade and the secretariat of ASEAN-China Expo, drew the attraction of over 100 prestigious producers and exhibitors from China, including firms in China’s Top 500 list.
The CA-MEXPO is a significant trade promotion activity which helps Vietnamese and Chinese enterprises further enhance business cooperation as well as facilitate the transfer of advanced technology between firms from both sides, Deputy Minister of Industry and Trade Tran Quoc Khanh said at the opening ceremony.
The organising board expects that the CA-MEXPO 2017 will continue to serve as a catalyst for the development of enterprises in both countries.
Last year’s event saw the participation of over 100 enterprises from 10 Chinese provinces and cities, attracted thousands of visitors while tens of contracts were signed.
China is currently Vietnam’s leading trade partner. Last year, two-way trade experienced a yearly rise of 2.5 percent to more than 98 billion USD.
US trade mission targets higher seafood exports to Vietnam
The Alaska Seafood Marketing Institute in collaboration with a group of other US fish and seafood advocacy organizations are gearing up for a trade mission to Southeast Asia later this year, according to multiple sources.
Hannah Lindoff, program director for the Institute, said this is the second such mission to Asia, which hopes to build on the prior success and make further inroads into cracking the yet largely untapped market.
The first trip, which was led by Food Export Northeast and principally focused on China, was positive and now the Institute is looking to double its efforts and concentrate more on exploring markets in Southeast Asia.
Food Export Northeast, is a non-profit trade group that promotes the export of food and agricultural products throughout the globe from states in the northeast region of the US such as Maine.
Industry members have been urging the Institute to spearhead more aggressive attempts to pursue market share in Southeast Asia, noted Ms Lindoff, particularly those lucrative markets in Vietnam, Indonesia and Thailand.
The trade mission will take industry members for a bevy of seminars and meetings this September 10-14 with representatives from Vietnam, Malaysia, Indonesia, the Philippines, Singapore, and Thailand.
Southeast Asia represents an emerging market that is large and diverse, driven by consumers with a hunger for fish and seafood who are predisposed to favour products from the US due to their superior reputation for quality and safety.
Southeast Asia has a lot of potential as an end and reprocessing market, so we have several interests in mind, Ms Lindoff continued, noting the US brand really stands for quality and commands consumer attention.
Particularly in high-end markets like Singapore and emerging ones like Vietnam, consumers are developing a taste for top-shelf products like sockeye salmon, king crab and spot prawns.
Interest in salmon and salmon heads is also prevalent in other countries such as Thailand and Indonesia, but Ms Lindoff said consumers need to be coached on the differences between wild and farmed salmon and why wild-caught are the tastier and healthier choice.
Land pooling policies urged
The Government needs new policies on land pooling and accumulation, as well as credit, to develop the farm economy, delegates said at a forum held in HCM City on Thursday.
The country has 31,717 farms, of which 16,523 are animal breeding farms. Farmland covers a total of 133,826ha, accounting for 0.6 per cent of the country’s total agricultural land.
Nguyen Van Tien, head of the Central Economic Committee’s Agriculture and Rural Department, said although there has been a rapid increase in the number of farms, they are mainly household farms, with an average scale of just 4.54ha.
According to the Ministry of Agriculture and Rural Development, the farm economy is an advanced form of the household economy, bringing higher economic efficiency since farms are applying new technologies and expanding markets for their products.
Vu Trong Khai, an agricultural expert, said the shift from smallholder production to large-scale and modern agricultural production would ensure a safe and sustainable agriculture.
The Government in the past issued many policies to develop farms, but few farmers and businesses benefited from these policies, he said.
Farm owners have encountered difficulties in accumulating land as well as accessing credit to expand their scale, he said at a forum held by the Viet Nam Farms and Agricultural Enterprises Association and the Department for Economic Co-operation and Rural Development.
Vo Mai, vice chairwoman of the Viet Nam Gardening Association, said capital sources for the agricultural sector remained low compared to actual demand.
As of June 2016, total outstanding loans in the agricultural sector reached an estimate of VND886 trillion, accounting for 18 per cent of total outstanding loans in the economy.
Customers in the agricultural sector have faced difficulties in accessing bank loans due to credit regulations, she said.
For instance, the Government’s Decree 55 stipulates that customers involved in the agriculture and rural development sector can obtain loans at credit institutions without mortgaged assets, but the decree also stipulates that customers must submit their land use certificates to credit institutions when they apply for loans.
They still had to guarantee assets when applying for loans, she said.
Khai said that domestic agriculture was still small-scale and underdeveloped, which does not ensure efficiency, so banks are anxious to offer unsecured loans.
Vo Quan Huy, director of Huy Long An Co Ltd, who has a large banana farm in the southern province of Long An, said his company had to mortgage assets to obtain a loan, but he said the assets were priced by the banks at a level which is too low compared to the market price.
Similarly, Doan Minh Chien, owner of a general farm in the southern province of Binh Duong, said “Each hectare of my farm is valued at VND7-8 billion at the market price, but the bank values it at just VND300 million.”
Huy and Chien suggested that the Government and central bank reconsider amending the asset valuation policy.
Tien said household and farm economies would continue to be the base of the country’s agricultural production.
The Government should develop policies to encourage pooling and accumulating land to expand production scale, and develop linkages in agricultural production.
Delegates at the forum said the Government should complete financial and credit policies in the agricultural sector that support individuals and organisations in pooling land. Developing insurance models in agricultural production is also important, they said.
VN eyes export boost through Chinese border
Viet Nam should implement polices to increase its export volume through its border gates with China by taking advantage of the Viet Nam-China Border Trade Agreement, experts said.
The agreement has created favourable conditions for Viet Nam’s border provinces to change reasonably their economic structure, experts said.
However, many experts were of the opinion that Viet Nam should limit shipments of small volume of exports without legal contracts, and promote large volume of exports, as small-scale exports did not provide enterprises with incentives to improve the quality of their goods and competitive ability.
Nguyen Van Hoi, deputy head of the Border and Mountainous Trade Department under the Ministry of Industry and Trade (MoIT), said the trade agreement was signed in September 2016 with 16 articles to ensure an annual growth of 30 per cent in the trade value of goods exported through the border gates between Viet Nam and China.
The agreement will contribute partly to the socio-economic development and improvement of the living standards of the people in the border areas, he said. Viet Nam’s major export goods to China include farming, forestry, seafood and fresh fruit products.
Dinh Van Thanh, former head of the MoIT’s Trade Research Institute, said the agreement was applicable for trading via border gates and border markets in seven provinces of Viet Nam, including Cao Bang, Quang Ninh, Lang Son, Ha Giang, Lao Cai, Lai Chau, Dien Bien, and two China’s provinces of Yunnan and Guangxi.
Nguyen Van Son, chairman of the People’s Committee of the northern mountainous province of Ha Giang, said the development of border gate economy and border trade is the key to economic development in Ha Giang Province.
To promote border trade development, Ha Giang has received recommendations from enterprises to improve infrastructure, reform administrative procedure and create favourable conditions for attracting enterprises’ investment in border trade activities.
Thanh said the infrastructure at border gates was limited owing to the lack of investment, and the two countries have not had specific management policies for border trade activities because of which those activities had not developed strongly.
There are not enough warehouses at the border gates between Viet Nam and China to meet the demand of trading activities, especially cold storage system, which has not got any investment to be built.
Meanwhile, some kind of farming and fresh fruit products of Viet Nam have been exported to China, but they were not exported under contracts.
Pham Van Truong, a MoIT expert, said Viet Nam should restructure the production of farming products and goods to ensure the quality of those products and promote exports with large volume. This would help avoid "saving" farm produce from plummeting prices that happened over the past time, partly due to small-scale and lack of legal contracts.
The State should have specific solutions to provide market and capital support to enterprises, said Truong, adding that the State should continue negotiations with China to expand the market for Vietnamese goods by facilitating contracts for large exports .
Thanh from the Trade Research Institute said Viet Nam should establish a border business association to protect the interests of local enterprises engaged in trading activities with China, as well as other countries.
The Government needs to upgrade infrastructure for trading activities at border gates, creating favourable conditions for border trade development, he added.
On the other hand, he said Viet Nam must diversify its forms and methods of trade promotion with neighbouring countries and perfect a database of information on border trade activities for managing those activities.
CBRE Vietnam wins three 1st prizes at Asia Pacific Property Awards
CBRE Vietnam was honoured at the 2017 Asia Pacific Property Awards with three first prizes in important categories. The company won for “Best Real Estate Agency in Vietnam,” “Best Lettings Agency in Vietnam” and the “Property Consultancy Award” at a ceremony held in Bangkok earlier this month.
Meanwhile, Le Trong Hieu, director of CBRE Vietnam’s advisory and transaction of office services, won the award for “Best Real Estate Agent in Vietnam.”
With these achievements, CBRE Vietnam has become the only real estate consulting and management firm in Vietnam to win three first prizes in the nine-year history of the Asia Pacific Property Awards.
The Asia Pacific Property Awards, part of the International Property Awards, honours leading companies in all fields of the property industry world-wide. This year CBRE Vietnam has surpassed other leading firms in the industry to achieve the ‘five-star’ prizes.
Furthermore, CBRE Vietnam as the Best Letting Agency will compete against other winners from Africa, Arabia, Europe and America for the title of “World’s Best Letting Agency.”
The prizes prove CBRE Vietnam’s qualifications and professionalism in providing real estate services and customer care in highly competitive markets like the Asia Pacific and Vietnam.
Recently CBRE Vietnam was chosen as the exclusive management and leasing agent of Viettel’s head office and the Viettel Shopping Center.
The firm has continued to strengthen relations with many customers, and is the management agent for the Jamila project developed by Khang Dien and Hado Centrosa Garden and Hado Garden Villas of Ha Do Group.
In addition, CBRE has been selected as the lead agent for the Waterina, the first project in Vietnam by Japan’s Maeda Group, which is the management unit for the underground construction for the metro line No. 1 (Ben Thanh-Suoi Tien) in HCM City’s District 1.
In Hanoi, the firm is the exclusive agent for Central Field, a project by 19-12 Bac Ha Co Ltd, and the managing agency for Richy Tower and Sun Square buildings.
Dang Phuong Hang, managing director of CBRE Vietnam, said it is a pleasure to work with the CBRE Vietnam team to achieve these goals.
“We will do our best to develop CBRE Vietnam and achieve more success in the near future. Moreover, to meet the increasing demand of the real estate market, we introduced hotel services to provide advice and expertise in the hotel industry, sustainability services to provide solutions for green building, and leasing services to help investors with apartment leasing.
“With integrated real estate services, CBRE Vietnam is confident of generating benefits for customers.”
In the past CBRE Vietnam was the only property consultant in the country honoured at the Golden Dragon Awards. In addition, the company was listed among FORTUNE’s Most Admired Companies for five consecutive years.
CBRE Vietnam was also named the Best Property Consultant Agent in Vietnam for the fifth time by the Euromoney Awards.
Direct Da Nang-Incheon flight route launched
Eaststar Jet of Korea has begun operating a new daily direct flight from Da Nang to Incheon, using the Boeing B737-800 aircraft with 189 seats.
The airline said at the launching ceremony on June 14 that the new route would help boost tourism and facilitate travel between Da Nang and Korea.
It said Da Nang is the third city in Viet Nam, after HCM City and Ha Noi, from which the airline is operating direct flights to Incheon.
According to the Da Nang tourism department, nearly 200,000 South Koreans visited the city in the first quarter of this year, a 90 per cent growth over the same period last year.
The department said eight airlines – Korea Air, Asiana Airlines, Vietnam Airlines, Vietjet, Jeju Air, Jin Air, T’way and Eaststar Jet – now operate a total 56 flights per week connecting Da Nang with Incheon, Busan, Daegu and Muan in Korea, with total capacity of more than 8,000 passengers.
It said Da Nang and world heritage destinations in central Viet Nam could promote tour exchanges between Jeju Island, Incheon and Seoul.
More than 443,000 Korean tourists – nearly 20 per cent of foreigners – visited the city last year.
At Co.opmart, the more customers buy, the more benefits they get
Besides having close co-operation with suppliers and together foregoing profits to offer discounts on farm produce during the rainy season, starting this week Co.opmart and Co.opXtra supermarket chains nation-wide are offering huge discounts when customers buy the second, fourth and sixth items of certain products.
Until June 25, under the “Buy more, get great incentives” programme, which is part of the supermarkets’ 2017 Green Consumption Month, the price of a 40g pack of strawberry/chocolate cream-flavoured biscuit sticks is cut from VND9,900 to VND4,900 for the second item, that of a 62g paper box of egg buttermilk cake is cut from VND10,400 to VND7,500, that of a food wrap film pack is cut from VND19,900 to VND 9,900, and that of an 800ml pack of apple-scented dishwashing liquid is cut from VND16,500 to VND 9,900.
The price of an 80-piece pack of baby wet tissues is reduced from VND28,800 to VND14,800, that of a 650ml bottle of Men Classic perfumed shower cream is reduced from VND87,900 to VND37,900, that of an SGC animal-shaped bolster pillow is reduced from VND71,900 to VND39,900, and that of an SCG vacuum-packed pillow is reduced from VND96,900 to VND49,900.
Meanwhile, under the Good Price Promotion Programme, customers can buy many essential items at discounts of VND16,000-VND400,000.
For instance, two 16-sachet boxes of peach tea is sold at just VND27,000, a nine-kilogramme pack of detergent is discounted by VND40,000 to VND155,500, an SGC 37cm x 105cm vacuum packed bolster pillow is reduced by VND164,000 to VND109,000, a 360 degree aluminum floor cleansing stick is discounted by VND30,000 to VND94,000, a set of SGC 1.6x2m blanket, bed cover and pillow cases is reduced from VND1.079 million to only VND679,000.
Also under the 2017 Green Consumption Month programme, Co.opmart and Co.opXtra will present four to seven times higher than normal bonus points on customers’ loyalty/VIP cards when they buy major brands of liquid detergents, fabric softeners, coffees, biscuits, and other products from Unilever, Trung Nguyên, Vietnamcacao, Oreo, LU, and others.
Policies key to attracting foreign investment
Places with stable and favourable policies which promote business linkages are magnets for foreign investment, said Chairman of the Japanese Business Association in Vietnam Sagara Hirohide.
Sagara Hirohide, also Co-Chairman of the Vietnam Business Forum (VBF) Consortium’s Management Board, made the remark at a press conference held on June 15 on the threshold of the VBF 2017.
He lauded Vietnam’s efforts to improve its business climate, especially the recently passed Law on Support of Small-and Medium-sized Enterprises (SMEs). He said the move will encourage the development of private businesses.
Vietnam boasts huge potentials to attract foreign investors, he stressed, adding that both large enterprises and small-scale firms from Japan can set up business relations in Vietnam due to the favourable business climate and simple and transparent legal procedures.
Business links will aid the Vietnamese industrial sector, particularly the support industry, he said.
For his part, President of the Vietnam Chamber of Commerce and Industry and Co-Chairman of the VBF Consortium’s Management Board Vu Tien Loc, said that measures to connect domestic and foreign firms, especially SMEs, would be discussed at the VBF 2017 on June 16.
Enterprises must set up business cooperation and the Government will provide them with favourable policies and conditions, Loc stressed.
Luc Ngan lychee week opens in Hanoi
A Luc Ngan “Thieu” lychee week, the second of its kind, opened on June 16 at Big C Thang Long shopping centre at 222 Tran Duy Hung, Cau Giay district, Hanoi.
During the week-long event, big supermarkets and wholesale markets will sign contracts with Luc Ngan businesses, cooperatives and farm owners to buy lychees.
According to the Department of Commerce and Industry of the northern province of Bac Giang, this year’s lychee production is estimated to hit 100,000 tonnes, equivalent to 70 percent of the previous year’s output. Of them, there are 26,000 tonnes of early-ripening lychees and 74,000 main-crop lychees.
About 40,000 tonnes of fresh lychees are expected to be shipped to China, representing 80 percent of this year’s lychee exports, said the department.
Apart from China, the province has also expanded consumption markets to the US, the EU, Japan and the Republic of Korea.
Binh Duong real estate market stagnant
Poorly-planned projects have led to large housing inventory and a stagnant real estate market in Binh Duong Province.
Tran Khanh Quang, director of Viet An Hoa Company, said there were no new projects in Binh Duong. The real estate market had grown recently but not as much as the markets in Long An and Dong Nai provinces.
According to Quang, existing projects still have many empty apartments which was why investors were reluctant to start new projects. Moreover, because of excessive supply, prices won't increase. There are demands from Di An Commune and the areas near HCM City but the demand is small and most customers just want to buy plots of land.
Quang said Binh Duong once had like thousands of real estate products and housing units at good prices five years ago and attracted a huge number of customers. But then those homes are sold and resold, investors can't find customers.
A leader from the HCM City Real Estate Association said while the real estate market in Binh Duong had slowed because of excessive supply, Dong Nai was having a huge boost from planned Long Thanh Airport and highways. Long An Province was neglected before so it is attractive to investors now.
Nguyen Van Duc, deputy director of Dat Lanh Company said the authorities in Binh Duong was too ambitious and had miscalculated.
"They relocated their administrative centre to the new urban area, hoping that their officials would also move there but they were wrong. It's not easy to motivate people to relocate, they need long-term policies," he said.
Binh Duong authorities want to establish a similar urban area like Phu My Hung in southern HCM City. However, they set the prices too high, offering people to make an instalment payment in 20 years and no one wanted to move in. Now the area looks deserted.
A square metre of land in the urban area cost VND30m (USD1,300) while the land 100 metres away costs just VND3m per square metre.
Tran Khanh Quang, director of Viet An Hoa Company suggested lowering the prices. The province has a population of over one million, with a few hundreds of thousands of migrants from other provinces, and many of them are poor workers.
Duc also agreed that lowering prices was necessary as they need a breakthrough to deal with the high inventory.
Meanwhile, Nguyen Vu Huy, director of Ban Viet Company said Binh Duong authorities should invest in small urban areas with affordable land lots before investing in luxury projects.
Le Hoang Chau, chairman of HCM City Real Estate Association, said customers were reluctant to move to new urban areas as Binh Duong Province's infrastructure was still weak.
Hanoi tax department publishes debtors
The Hanoi Department of Taxation has recently released a list of 72 enterprises with outstanding tax, fee, and land rental debts totaling nearly VND86 billion ($3.8 million).
Six enterprises owed land rentals of VND27 billion ($3.8 million), of which the largest debtor was the Cau Giay Investment Trading Service Joint Stock Company, with over VND22 billion ($970,000).
Regarding taxes and fees, 66 enterprises owe a total of over VND58 billion ($2.55 million). The largest debtor, with nearly VND7.4 billion ($330,000), is the Ha Thanh One Member Limited Liability Company. Thirteen companies owe tax debts of over VND1 billion ($44,000).
Other large tax debtors include the Atesco Industrial Feed Joint Stock Company (VND4.4 billion ($200,000)), the VNC Construction Joint Stock Company (VND3.5 billion ($150,000)), the Thang Long Tourism and Import-Export Joint Stock Company (VND3.5 billion ($150,000)), the Tien Hung Construction and Trading Company Limited (VND3.4 billion ($150,000)), and the Havico Joint Stock Company (VND3.3 billion ($145,000)).
The department previously published the debts of 720 enterprises and projects totaling nearly VND2.7 trillion ($2.55 million). After the disclosure, 209 paid over VND69 billion ($3 million) to the State treasury.
Support to grow
The Daiwa-SSIAM Vietnam Growth Fund II, co-managed by Daiwa Corporate Investment under Japan’s Daiwa Securities Group, last month became a new investor in the Pan Farm JSC, the agriculture arm of Vietnam’s Pan Group. Along with Daiwa, the International Finance Corporation (IFC), a member of the World Bank Group, and SSI Asset Management under Saigon Securities also purchased an 18 per cent stake in Pan Farm. Earlier, DEVNET International, a Japanese organization providing development information, revealed there would be about 3,000 companies, mainly Japanese agricultural cooperatives, established in Vietnam over the next few years.
Agriculture brings many cooperation opportunities for both Vietnam and Japan given that foreign investment capital in the sector remains limited, according to Mr. Fumiyasu Akegawa, President of DEVNET. “I think it is a good idea to quickly and skillfully combine Japanese companies’ technical ability and information resources with potential markets such as Vietnam to promote the development of agricultural production chains,” he said.
The model of coordination between Vietnamese and Japanese enterprises in agriculture has borne positive results in recent years. In addition to direct investment, many Japanese enterprises also choose to cooperate with Vietnamese enterprises to establish fruit and vegetable farms around the country. Figures from the Japan External Trade Organization (JETRO) in Vietnam show there are 42 direct investment projects in Vietnam’s agriculture sector. “Most projects are direct investment, but there are also many established under cooperation between enterprises from the two sides,” said Mr. Hironobu Kitagawa, JETRO Hanoi’s Chief Representative.
Deputy Director of the Ministry of Agriculture and Rural Development’s International Cooperation Department Nguyen Anh Minh told a workshop on opportunities in agriculture and investment cooperation between Vietnam and Japan in February that the number of Vietnamese firms attending the workshop this year increased five-fold compared to last year, which proves that local businesses are very much interested in seeking cooperation opportunities with foreign partners. “Local firms are seizing the opportunity to collaborate with Japanese businesses, learn from their experiences and high-tech farming techniques, develop production bases for material supplies, and secure high-tech farming equipment and agricultural machinery from partners,” he said.
Meanwhile, in order to cement investment opportunities in Vietnam, Mr. Hiroto Okabayashi, Chairman of Japan’s New Gate Co., said he is looking for a partner in Vietnam to invest 500 million JPY ($4.49 million) into energy, machinery and equipment for agricultural production in the country. A representative from Japan’s JC Service Co. said it is also seeking partners in the field of biomass power plant construction, which takes advantage of the inherent strengths in Vietnam’s agriculture sector.
Most Japanese investors and organizations in Vietnam’s agriculture sector hope to take advantage of the country’s favorable natural conditions, climate, and large consumption market, said Mr. Kitagawa. Japanese businesses, he went on, believe that Vietnam is yet to have a complete cold storage system and form a global food value chain. Increasing value added in agricultural products is also not fully developed.
While Vietnamese farmers cultivate onions and then sell those onions, he said by way of example, Japanese farmers process their onions to increase added value. Japanese investors therefore expect that Vietnam’s agricultural output will meet that value requirement. Incomes in Vietnam are also gradually improving, which increases demand for safe fruit and vegetables. “I also look forward to Vietnamese enterprises actively inviting cooperation from Japanese partners to create a win-win situation,” he said.
Cooperation with organizations such as Daiwa and the IFC will help Pan Farm not only regarding capital but also present opportunities for it to expand cooperation with the broad global network of the two, said Pan Group Chairman Nguyen Duy Hung. Pan Farm will expand its production scale and improve corporate governance and financial potential, gradually implementing its strategy to become a leading company in the field of agriculture in Southeast Asia. Mr. Tatsuyuki Ota, Chief Representative of Daiwa Corporate Investment in Vietnam, said that Daiwa will help Pan Farm seek markets and partners in Japan and provide support in technology and experience.
It’s clear to see that the need among Japanese enterprises to seek business cooperation opportunities in Vietnam is increasing, but for these to work effectively the Vietnamese Government must continue to create a friendly business environment for investors. “A transparent business environment is the key factor attracting foreign businesses,” said Mr. Akegawa. “The exchange rate also is a matter for the government to pay attention to.”
Moreover, it is difficult for foreign enterprises to acquire large parcels of agricultural land at a reasonable price, which makes it difficult to apply advanced technologies, according to Mr. Kakioka Naoki, Senior Representative at JICA Vietnam. “Agriculture contracts have not yet become common practice for farmers in Vietnam,” he said “Contracts are easily breached, which seriously affects the business of foreign enterprises and mutual benefit.”
Completing value chains
The food value chain was expected to address shortcomings in Vietnam’s agriculture sector, including modest productivity levels and quality and the lack of proper cold storage facilities and a frozen food distribution network. According to Mr. Irie Yasuo, Chairman of Japan’s Tanka Co., which specializes in preserving fruit and vegetables, preservation methods are important for transporting vegetables from Da Lat to Hanoi or Ho Chi Minh City. Tanka therefore wishes to cooperate with Vietnamese companies to apply Japanese methods to increase the effectiveness of storage systems.
The two governments are also working together on agriculture projects, selecting certain localities in Vietnam to conduct pilot programs addressing specific shortcomings. For example, north-central Nghe An province has received assistance to boost productivity and added value in its farming products. The central highlands province of Lam Dong is being assisted in developing key products and food processing. Outlying districts of Hanoi and Ho Chi Minh City are being helped to improve cold storage and frozen food distribution systems, while Mekong Delta provinces are being aided in adapting their farming to the impacts of climate change.
Compared with other ASEAN countries, Vietnam’s agriculture infrastructure has been well developed. Water and electricity supply and roads, which are the most important factors in the establishment of food value chains, are all in good shape, according to Mr. Naoki, However, he also pointed out that there are many lingering shortcomings, such as unsafe crop production from the incorrect use of pesticides, insufficient post-harvesting, unclassified produce, a lack of safe vegetables in markets at good prices, complex distribution channels, and poor competition, and many other issues.
In addition, productivity is not high and Vietnamese farmers do not have sufficient knowledge and techniques to improve productivity and produce safe agricultural products. To increase agricultural productivity, the use of machinery is crucial. “Used machinery can still ensure production capacity, but the government has not adopted policies to import such equipment from Japan and facilitate access by farmers,” Mr. Kitagawa said.
In August 2015, the Vietnamese and Japanese Governments agreed to encourage private sector investment in the agriculture sector in order to establish agriculture food value chains in Vietnam. Many Japanese companies have visited Vietnam seeking opportunities under the agreement. Actual investment in the agriculture sector has only just begun, however, and with JICA’s support is gradually increasing. “We believe Japanese investment can help to not only drive Vietnamese agriculture but also improve hygiene and safety,” Mr. Naoki said.
Workshop promotes digitalisation in SMEs
Measures to involve Vietnamese small and medium-sized enterprises (SMEs) in the global market through digital solutions was discussed at a workshop held by the US-ASEAN Business Council and the Vietnam Chamber of Commerce and Industry (VCCI) in Ho Chi Minh City on June 15.
Sanket Ray, CEO of Coca-Cola Vietnam, said the workshop serves as a forum for US multinationals to share experience with Vietnamese SMEs in digital marketing.
Vo Tan Thanh, VCCI’s Director in Ho Chi Minh City suggested the State renovate policies to improve the business climate, especially programmes to support enterprises in increasing investment for science and technology, human resources development, renovation and creativeness and economic digitalisation.
According to Thanh, the Government has made every effort to improve the business climate.
The VCCI worked with Microsoft Vietnam to deploy a project to support Vietnamese SMEs in sustainable development, aiming to help enterprises access new business opportunities and cope with sustainable development challenges, he noted.
The project focuses on assisting firms operating in materials, service and trade, he added.
Experts said the retail is a promising sector in Vietnam thanks to the increasing income of the middle-class and consumer confidence.
Effective use of technology and cooperation with experienced logistics suppliers will help Vietnamese SMEs in Asia and globally, they said.
Daryl Tal, CEO of UPS Vietnam Company said online customers in Asia have a deep understanding of technology and can catch up with technology trends very quickly, so it is necessary to optimise the electronic supply chain to attract more customers.
In 2017-2018, Vietnam is aiming to keep pace with other ASEAN nations in improving its business climate and promoting international integration in the context of the 4th industrial revolution and economic digitalisation.
Slow disbursement of public investment constrains economic growth
Deputy Prime Minister Vuong Dinh Hue and Minister of Planning and Investment Nguyen Chi Dung, have both accepted responsibility for the sluggish disbursement of public investment, resulting in lower than estimated economic growth.
At the National Assembly Q&A session on June 15, Minister Dung claimed responsibility for the weaknesses in the management of public investment and the inadequacies in the implementation of the Public Investment Law that has caused the slow disbursement of public investment.
Giving an additional explanation for Minister Dung, Deputy PM, Vuong Dinh Hue said, although the disbursement of public investment in 2016 and in the first five months of 2017 was higher than the same period in previous years, public investment has yet to be fully disbursed as estimated.
"The Government takes responsibility towards the National Assembly to do better in the future," said the Deputy PM. He admitted that slow disbursement of public investment is "one of the causes of unsuccessful economic growth", combined with ineffective use of capital.
Hue affirmed that the Prime Minister and the Government have made every effort in order to accelerate the disbursement of public investment. The disbursement rate in the last five months of 2016 was seven times higher than the rate in the first seven months of 2016. In 2017, the disbursement rate in the first five months has reached 24.7% of the plan, up nearly 4% over the same period last year. However, this result is still considered slow, he added.
The Deputy PM noted that the Government has worked out some specific solutions to this problem, such as requiring ministries and local authorities to continue inviting bids for construction projects, promoting decentralisation, accelerating land clearance, reviewing the inadequacies in guiding legal documents and applying disciplinary measures on officials causing slow disbursement, among others.
Nevertheless, the Government expects more regular attention and supervision from the NA, the Deputy PM said.
Explaining for the delay in disbursement of public investment, Deputy PM Hue identified two reasons, he said that one of the goals of the Public Investment Law is to avoid losses and over-diversification, therefore several regulations in the law are impeding the disbursement.
In addition, the decentralisation from ministries to local branches and governments is limited, also resulting in the slow progress of investment disbursement.
The deputy PM also confirmed the harassment and irresponsibility of certain public officials in the process of public investment disbursement.
At the same time, ministries are taking time to scrutinize priorities to cut down public project items and subprojects, thus slowing down the disbursement progress, He noted.
Promoting geographical indication of Dak Lak coffee
The Central Highlands province of Dak Lak boasts the country’s largest coffee-growing area, with a total area of over 200,000 hectares, producing up to 450,000 tonnes of coffee beans annually. However, in order to improve its competitiveness, as well as to protect local products, it is necessary for Dak Lak to manage and develop the geographical indication of “Buon Ma Thuot Coffee”.
According to Chairman of the Buon Ma Thuot Coffee Association, Trinh Duc Minh, a certificate of geographical indication (GI), for the Buon Ma Thuot coffee trademark in Dak Lak, has helped to increase the value of coffee beans shipped abroad.
Protected geographical indication (PGI) for Buon Ma Thuot coffee was registered in Vietnam in 2005. The province has completed the necessary procedures to gain PGIs in 15 countries and territories around the world and as many as 11 coffee producers in the province are entitled to use the GI. They are managing a combined coffee growing area of 15,300 hectares, yielding around 47,500 tonnes of coffee beans annually.
To ensure the quality of coffee products, in line with the requirements of the international market, management agencies and coffee producers have instructed local growers to follow standardised coffee-growing models, so that their products may obtain certifications granted by UTZ Certified and Rainforest Alliance, the two organisations tasked with promoting sustainable farming.
The local authorities have also encouraged coffee processing enterprises, which are allowed to use the GI, to label their products with the Buon Ma Thuot coffee trademark and inform customers in more detail about the distinctive characteristics of certificated coffee products.
Coffee growers in the province have also applied internationally-recognised programmes on sustainable coffee production to raise their incomes, according to the provincial Department of Agriculture and Rural Development. More than 40,500 coffee farming households in Dak Lak are producing coffee in line with programmes such as UTZ certificates, Common Code for Coffee Community (4C) and Rainforest Alliance Certified Coffee (RFA). They have produced 226,000 tonnes of coffee beans on a combined area of 65,000 hectares each year, accounting for over 50% of the annual output.
All 11 units granted with the Geographical Indication of Buon Ma Thuot coffee have also joined certified coffee production programmes. In Cu M’gar district, the main coffee growing locality in Dak Lak, almost 10,000 coffee farming households have taken part in certified coffee production programmes on an area of 15,000 hectares, making up 45% of the district’s total coffee area.
These households have been provided with techniques in growing, caring, watering, fertilising, harvesting, processing and preservation and have also been instructed on how to reduce production costs and use fertilizers in order to minimize impacts on the environment.
Dragon fruit exports to China surge through Lao Cai
Thanks to the Noi Bai - Lao Cai Expressway the journey to Kim Thanh Border Gate, in the northern mountainous province of Lao Cai, has become more convenient than ever before, with traveling time cut by half, thus facilitating exports of Vietnamese vegetables and fruits to China, including dragon fruit.
According to the Lao Cai Customs Department, for the first time dragon fruit exports to south-western China, via the province’s border lines, reached tens of thousands of tonnes, with a value of more than US$20 million.
Since the end of April, the department has prepared customs clearance procedures for more than 4,000 tonnes of the fruit through Kim Thanh Border Gate, with support from an e-customs service, to ensure a convenient and safe declaration and shorten clearance time.
The volume of fruit mainly originated from the central and southern provinces. This is the first time Lao Cai recorded a large quantity of exported dragon fruit through Lao Cai border gate.
The Chinese side has agreed to allow Vietnamese dragon fruit containers to run across the Kim Thanh Bridge to China without tranship. It is a convenient and important way to ensure the quality of dragon fruits (not being bruised during transport).
Previously, dragon fruit was usually exported to China through border gates in Ha Giang and Lang Son provinces.
Currently, there are about 400-600 tonnes of dragon fruit exported through the Kim Thanh Border Gate. Customs staff and other specialised forces at the gate has strengthened efforts and prioritised making clearance early in the morning to ensure the timely delivery and quality of dragon fruit exports.
Statistics from the General Department of Customs show that China continues to be Vietnam's largest trading partner in the first five months of 2017, with two-way trade reaching US$ 32.8 billion, up 23.6% over the same period last year.
In particular, some products have recorded increasing imports from Vietnam such as vegetables, fruits and seafood. In terms of fruit and vegetable exports, as of the end of May, China remained the leading market for fruit and vegetable consumption in Vietnam, with US$1.06 billion, up 51% and accounting for 75% of the total value of export vegetables and fruits.
In a joint statement made during a recent visit by President Tran Dai Quang to China, the two sides agreed to speed up the completion of market opening legal procedures for a number of fruits from Vietnam to China. These legal procedures are expected to give a further boost to Vietnamese fruits and vegetables exports to the Chinese market.
Hoa Binh Hydropower Plant recognised as project of national security
The Hoa Binh Hydropower Plant, located in the northern province of Hoa Binh, was recognised as an important project with relation to national security, according to the Government Decision signed on January 20, 2017.
A ceremony to announce the decision was held in Hoa Binh on June 14, by the Electricity of Vietnam (EVN), in co-ordination with the Ministry of Public Security and Hoa Binh province.
The Hoa Binh plant is the second largest hydropower plant in Vietnam, after the Son La Hydropower Plant, with an annual electricity output of over 10 billion kW/h.
In accordance with the decision, the protection of the plant is determined as an important task of the public security force and related ministries and sectors.
Meanwhile, Hoa Binh province is assigned the task of developing a master plan to ensure security of the project and to co-ordinate with the EVN to define the protection corridor of the reservoir area and the entire plant.
In addition, the province should ensure social welfare for local households who have had to relocate to resettlement areas, in order to serve the construction of this important project.
Director of Hoa Binh Hydropower Company, Nguyen Van Minh, said that the Hoa Binh plant has taken on several important tasks, including ensuring flood and drought prevention for the downstream area, providing electricity to the national grid and improving waterway transport, as well as ensuring local socio-economic development.
Particularly, the plant will be expanded in the future, with the installation of two more turbines that will raise the total capacity from 1,920 MW to 2,400 MW by 2022, equivalent to the capacity of Son La Hydropower Plant, contributing to ensuring national energy security, Minh noted.
Thus, the Hoa Binh Hydropower Plant was listed as one among seven projects of significant importance to national security, pursuant to the Government decision, Minh added.
HCMC tax agency inspects over 7,200 businesses
The HCMC Taxation Department reported that its divisions had inspected 7,230 businesses in the first five months this year and imposed penalty on tax dodgers and tax liability companies.
The inspection helped collect nearing VND1,754 billion ($77.29 million), a year on year increase of 37.19 percent.
Businesses’ loss amount decreased VND5,041 billion and value added tax deduction reduced VND175.5 billion.
In the upcoming time, the agency will focus on inspecting large-scale groups with high revenue; businesses in fields of multi-level marketing, petrol and medicine; companies receiving tax refund; loss making firms with signs of transfer pricing; those who have not been inspected for many years and enjoying tax incentives.
Banks’ registered loan for hi-tech agriculture reaches $5.29 billion
Eight banks have attended a credit package of VND100 trillion in the hi-tech agriculture field with the total registered capital of VND120 trillion (US$5.29 billion).
According to Minister of Agriculture and Rural Development Nguyen Xuan Cuong, VND30 trillion of the funds has been disbursed with loan interest rate being 0.5-1.5 lower than normal.
The package was launched in March by the State Bank of Vietnam (SBV) and the ministry, initially providing funds for businesses granted with hi-tech agriculture investment certificates.
Afterwards, SBV has made Decision 813 to bolster hi-tech and clean farming.
At present, the Ministry of Planning and Investment is building a draft decree encouraging businesses to invest in agricultural and rural field over large scales, attend in value chains and develop areas specialized farming zones applying modern technologies with the financial assistance of VND200 million to VND10 billion a project.
Vietnam consumes $2 billion cosmetics a year
The Vietnamese market consumes about US$2 billion of cosmetics per year, reported deputy chairman of Vietnam Association of Oil, Aromas and Cosmetics Nguyen Van Minh.
Consumption of cosmetics products strongly increases amongst the middle income consumers, forecast to reach 33 million customers by 2020.
In related news, nearly 200 businesses from Japan, South Korea, Singapore, Hong Kong and India will attend Mekong Beauty Show 2017 at Saigon Exhibition and Convention Center, District 7, HCMC from June 15-17.
At the event, they will seek importers and trading opportunities in the potential cosmetic market of Vietnam.
SOE divestment seen bringing US$15-20 billion
Divestment from State-owned enterprises (SOEs) will bring US$15-20 billion in the 2016-2020 period if the Government is firm on its SOE equitization plan, said Minister of Planning and Investment Nguyen Chi Dung said in a report.
Among 240 SOEs to be restructured between 2016 and 2020, the State will retain full ownership of only 103, maintain ownership of more than 50% at 31 and selling all stakes at the remaining 106. Proceeds from the sale of SOEs will be used to finance development investment, not regular spending.
According to the report sent to National Assembly deputies who are meeting in Hanoi at the moment, the nation’s total investments are expected to make up 32-34% of gross domestic product (GDP), or VND9,000-10,000 trillion. State investments, including those by SOEs, will fall sharply.
State investments in 2016-2020 would decline to 31-34% from 39.1% in 2011-2015 while non-State sector investments, especially private enterprises, are estimated to surge from 38.3% to 48%.
To meet funding demand for development investment, the Government will continue speeding up economic restructuring as envisaged in the economic restructuring plan from 2016 to 2020, Dung said.
The minister mentioned the issues that led to wastefulness in public investment projects. For instance, some projects were approved but their investment principle was not suitable with development goals of sectors or localities, resulting in low efficiency and inaction.
Besides, some investors failed to make good financial calculations and ensure feasibility. Therefore, they did not finish projects on schedule, and struggled with enormous cost overruns.
Domestic businesses cause steep trade deficit in Jan-May
Foreign-invested enterprises continued generating a trade surplus in January-May but their domestic peers caused a trade deficit of a whopping US$9.31 billion, resulting in the country’s trade deficit amounting to US$2.5 billion.
Data of the General Department of Vietnam Customs showed that the nation’s total export and import turnover in May was US$36.4 billion, a 4.3% rise against the previous month. This took total import-export turnover in the first five months of 2017 to nearly US$162.5 billion, up 21.5% against the year-earlier period.
The foreign direct investment (FDI) sector posted total import-export turnover of US$106.5 billion in the first five months, increasing by 23.7% or US$20.4 billion compared to the same period last year. In particular, the sector exported US$56.66 billion worth of goods in January-May, a 20% increase against the same period last year, and imported over US$49.84 billion worth of goods, a 28.1% year-on-year increase. Therefore, its trade surplus was upwards of US$6.8 billion in the first five months of 2017.
However, the domestic sector posted a trade deficit of US$2.13 billion in May, bringing its January-May trade deficit to US$9.31 billion.
According to the General Department of Vietnam Customs, China remained the country’s biggest trading partner with import-export turnover in the five-month period totaling US$32.76 billion, up 23.6% over the same period last year. Meanwhile, South Korea emerged as the second biggest trading partner of the country with bilateral trade soaring 45.2% year-on-year to nearly US$24 billion.
The U.S. fell one notch, becoming Vietnam’s third largest trading partner with total turnover of US$19.96 billion, up 12.9%. The EU came in fourth with bilateral trade reaching US$19.66 billion, a year-on-year increase of 13.3%.
In January-May, Vietnam had trade surpluses with only three countries among the top 10 trading partners. The U.S. remained the key market for Vietnamese exporters, with a trade surplus of US$12.07 billion in favor of Vietnam, followed by the EU with US$10.03 billion and Japan with US$152 million.
In the first five months, Vietnam had the largest trade deficit with South Korea, with US$12.96 billion. China followed with US$11.5 billion, slipping from its No.1 spot in previous years, and Taiwan with US$3.9 billion.
The period saw 17 of 54 commodities having import turnover of more than US$1 billion each.
Imports of ten key commodities totaled nearly US$54 billion, accounting for 65.5% of the country’s total imports in the year to end-May.
Specifically, imports of cashew nuts increased by a sharp 125.3% over the same period last year, crude oil 120.3%, rubber 90.1%, vegetables 79.1%, metal junk 79.1%, coal 58.3% and cotton 49.9%.
Fujitsu picks Digiworld as strategic partner
Fujitsu Vietnam announced on June 14 that Digiworld Joint Stock Company had become a strategic partner responsible for distributing Fujitsu products in Vietnam.
This marks Fujitsu’s comeback to the Vietnamese market, focusing on information technology solutions and devices.
Digiworld is responsible for distributing Fujitsu laptops. On this occasion, Fujitsu Vietnam and Digiworld launched new laptops of Lifebook U-series.
Fujitsu has brought a new look to their laptops, which are designed for a wide range of customers.
Nguyen Quang Tuyen of Fujitsu Vietnam said the company’s products feature advanced security and storage technology. Fujitsu is now the information technology solutions and devices provider of many enterprises, Government agencies and banks in Vietnam.
Fujitsu’s high-grade laptops such as Lifebook U937 and 747 come with a highly reliable biometric authentication system based on palm vein pattern recognition technology. Fujitsu also offers medium-grade products that are affordable for most Vietnamese.
In 2017, Fujitsu focuses on devices such as laptop, scanner, printer and storage devices, as well as application software for healthcare, education and business management, security technologies and smart solutions for transport, healthcare and environmental protection.
Coffee, pepper exports to India plunge
Vietnam’s coffee and pepper exports to India dipped in the first five months of the year although the two sides had lifted their bans on imports of agricultural products from each other, said the General Department of Vietnam Customs.
January-May saw Vietnam’s merchandise exports to India reaching nearly US$1.4 billion, up nearly 41% year-on-year. Among 28 items exported to India in the period, coffee and pepper were the only two which fell in export value.
Pepper edged down 38% to US$31 million and coffee decreased 16% to US$27.2 million over the same period last year.
Pepper and coffee were among the agricultural products of Vietnam of which India suspended imports in retaliation for a decision of the Ministry of Agriculture and Rural Development of Vietnam to stop importing groundnuts, cocoa beans and haricot beans from India over concerns about the beetle Caryedon serratus Olivier, a major insect pest.
However, the two nations agreed in March to remove the import bans on agricultural products from each other, citing negative effects on business activities of enterprises of both sides.
India agreed to lift the suspension on six agricultural products of Vietnam including coffee and pepper. In return, the Ministry of Agriculture and Rural Development revised Decision 558/QD-BNN-BVTV in a way that products from India are closely monitored for pests, instead of being suspended from import.
Cashew nut imports from Vietnam which were not banned India grew 23% in January-May.
In 2016, bilateral trade between the two countries was balanced. According to the customs, Vietnam spent US$2.7 billion importing Indian goods and earned the same amount from exports to the Indian market. Vietnamese items of high value exported to India included phones, electronic parts and farm produce.
Seafood processors guzzle energy
Seafood processing enterprises are energy guzzlers, said Nguyen Thanh Tung, head of the Technical and Application Division of the Can Tho Energy Conservation Center.
To process a kilo of tra fish or shrimp, for example, they need over 1.5 kWh or even 3 kWh of electricity although they have options to use 20% less energy.
At a seminar “Technological and financial solutions for shrimp farming and processing” in Can Tho City on Tuesday, Tung cited data of 20 tra fish and six shrimp processors in the city as saying that 1.55 kWh of electric power is needed to process a kilo of tra fish while shrimp processing requires 1.53 kWh.
Thanks to new technologies and production processes, some enterprises consume less than one kWh for tra fish and shrimp processing. But others may guzzle up to 3 kWh, Tung added.
A statement of the International Finance Corporation (IFC) under the World Bank said only 40% of 21 seafood processing plants in the Mekong Delta have taken energy-saving measures.
According to the Energy Conservation Center HCMC (ECC HCMC), seafood processors should apply energy-saving technology at stages that need a lot of energy.
ECC HCMC said T8 bulbs can be replaced with 18W LED bulbs to save 60-65% of energy and compact bulbs replaced with LED downlight bulbs to save 50-55% of energy.
Heavy-duty refrigeration systems, instead of low-duty ones, can help save 10-30% of energy. Air-conditioners of low efficiency should be replaced with inverter machines to save 30-40% of energy.
Energy saving will help reduce selling prices to increase the competitiveness of local seafood products.
Midterm Vietnam Business Forum opens in Hanoi
The midterm Vietnam Business Forum (VBF) 2017 opens in Hanoi on June 16 in the presence of Government and ministries officials, and representatives from international organizations, trade associations and businesses.
The forum serves as a bridge connecting foreign direct investment (FDI) and local enterprises, contributing to sustainable development and improving the quality of the national economy.
Participants discussed solutions to help small-and medium-sized enterprises (SMEs) connect with FDI enterprises and join regional and international production networks towards eliminating national bounderies in production.
Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry and chairman of VBF, said the forum focuses on enhancing the link between foreign and domestic sectors in the new context of the world economy, especially SMEs towards ensuring equal development of the two sectors and avoiding the situation of one country, two economies.
It is also a high-level public-private policy dialogue between the government, domestic and foreign business communities, and donors and diplomatic agencies, aiming to improve the business environment in Vietnam, attract investment from the private sector to response impact of global policies like TPP, EVFTA, RCEP and Industry 4.0.
The organizing board said so far this year VBF has received nearly 1,000 suggestions from businesses and associations sent to the Government and administrative agencies.
The forum includes four sessions, focusing on employment, development of the support industry, investment into infrastructure, the fourth industrial revolution, or industry 4.0, free trade agreements, elimination of non-tariff barriers, attracting investment from the private sector and improvement of the effectiveness of law enforcement.
Grim future awaits Vietnamese railway sector
Contrary to the robust growth of the road and air travel sectors, Vietnam’s railway industry has been gradually losing market share, easing into a reputation as a less attractive option for individual passengers, and logistics and transportation companies alike.
The situation only seems bleaker after a plan calling for private investment to revitalize the railway sector went largely ignored.
In 2013, rail travel accounted for 3.61% of the country’s passenger transport market share, and 1.82% of the cargo market.
Since then, that number has been in continual decline, slipping to only 1.98 percent of the passenger market, and 1.33% for cargo in 2016.
Le Van Phuoc, director of a handicraft maker in Ho Chi Minh City, said there is in fact a real demand for transporting goods by train thanks to stable costs and low risk of damage during delivery.
Doan Minh Tai, deputy director of a fertilizer company, said one of the biggest problems of road transportation is the chronic traffic jam at the entrances of major cities.
“Regular traffic congestion results in late delivery, something we don’t worry about if we transport by train,” Tai said.
But Phuoc and Tai, as well as many other local businesses, do not turn to the railway sector for logistics services.
The train sector has missed the opportunity to grab demand for safe, affordable cargo transportation from local businesses, and they can blame no one but themselves, according to critics.
“While road transportation companies are active in seeking customers and offering incentives to attract orders, the railway sector still thinks that they do not have to ‘serve’ anyone,” one businessman explained.
Nguyen Manh Sinh, a business owner in Ho Chi Minh City, said the railway sector is only responsible for bringing goods from A to B, and does not care what will happen next.
“Businesses have to hire a third-party service to continue carrying the goods to their final destination once the cargo is unloaded [at the train station],” Sinh said.
Other industry insiders said another disadvantage of the railway system in Vietnam is that it does not connect with the country’s seaports.
“Businesses will have to pay for intermediary services to bring their goods from the seaport to the train station,” Do Dinh Duoc, deputy general director of the Saigon Railways, admitted.
Vietnam’s railway system, most notably the north-to-south route connecting Hanoi and Ho Chi Minh City, is overseen by state-run Vietnam Railways.
In 2014, the Ministry of Transport approved a master plan to solicit investment from the private sector to help develop the railway sector, hoping to attract non-state capital to upgrade rail tracks, renew stations and improve service quality.
One of the core aspects of the plan involved seeking private operators for 13 train routes.
If proved effective, the plan will be expanded in a way that the entire railway system would be transferred from the state to the private sector.
However, even the initial goal has not been met.
“Few private investors have shown interest in the railway sector,” Deputy Minister of Transport Nguyen Ngoc Dong admitted.
Some major corporations, both local and international, have signaled plans to invest in the Hanoi or Saigon train terminals, but eventually decided to back off, according to the deputy minister.
Dong added that the ministry is seeking investors for a project to build a railway route connected with Hai Phong Port, an international gateway in northern Vietnam, but the call has so far gone unanswered.
“The initial investment needed for the project is US$1.55 billion in phase one alone,” Dong explained.
Huge investment cost is the main reason why the call for the private sector to join in developing Vietnamese railways is not responded, the deputy minister said.
“We cannot apply the BOT [build-operate-transfer] scheme as the cost to develop a railway route is considerably larger than a roadway,” he said.
NEPCON Vietnam 2017 set to open in Hanoi in Sept
Vietnam Exhibition on SMT & Testing Technologies, Equipment and Support Industries for Electronics Manufacturing (NEPCON Vietnam) will be held at Hanoi International Center of Exhibition at 91 Tran Hung Dao St on September 13-15, said a press conference on June 15.
The event, which is expected to attract 200 exhibitors from 20 countries in the world aims to accelerate the development of the support industry in Vietnam, complete the production line of the electronics industry and connect trade opportunities between Vietnam and Japan.
A representative from the Japan External Trade Organization, Mr. Hironobu Kitagawa said the exhibition serves as a unique platform for Japanese technology providers to meet local manufacturers to jointly drive the growth of the electronics industry in Vietnam and attract global electronics investment.
Two other exhibitions, Industrial Components & Subcontracting Vietnam 2017 and Vietnam-Japan Supporting Industries Exhibition, will also take place coinciding with NEPCON Vietnam.
Addressing the press conference, Head of the Trade Promotion Agency Bui Huy Son said the important event aims to support Vietnamese businesses in enhancing production capacity and connecting Japanese partners. It is part of activities to realize Japan’s commitment to help Vietnam’s support industry within the framework of the bilateral Economic Partnership Agreement.
At our event, you will meet thousands of future customers and business partners in the country’s only electronics manufacturing exhibition. It will offer an ideal marketplace to present a comprehensive range of technologies for SMT line manufacturing, from feeder to testing, from leading brands to over 10,000 visitors, Son said.
Therefore, this will be a good opportunity for you to present innovative technologies to electronics manufacturers, meet with potential buyers, and network with local manufacturers for the opportunities of future order, he added.
LOTTE sets up training centre for retail industry
The LOTTE-KOICA-IUH Service Training Centre for retail industry training was launched in HCM City at the Industrial University of HCM City on Wednesday.
Set up by the Ministry of Industry and Trade, Korea International Co-operation Agency (KOICA), Lotte Group, Korean Re-shaping Development Institute (ReDI), the centre will offer short- and medium –term training courses to meet an increasing human resource demand in the retail industry in the city and surrounding areas.
The centre is one of the components of a KOICA-LOTTE project to develop Vi?t Nam’s retail industry.
The trainees will be taught foreign languages, sales service, warehouse management, hygiene and food safety management, and others.
After completing the training, they will have the opportunity to work at LOTTE Group companies.
The project is expected to train 1,200-1,500 people a year.
In another development, on June 15 LOTTE Group opened an R&D centre in Bình Duong Province to ensure the quality of LOTTE Group’s products in Vi?t Nam.
Ben Tre: New cooperatives to form agricultural value chains
From now to 2020, the Mekong Delta province of Ben Tre plans to set up 27 agricultural cooperatives which will partner with businesses to form value chains for eight key agricultural products.
The targeted agricultural products are coconut, green-skin grapefruit, rambutan, longan, ornamental flowers, pig, cattle, and saltwater shrimp.
Vice Chairman of the provincial People’s Committee Nguyen Huu Lap said to improve the effectiveness of cooperatives’ activities, Ben Tre will develop cooperatives in line with the 2012 Law on Cooperatives.
It is going to help them apply scientific and technological advances in production and business activities so as to increase productivity and product quality. They will also be assisted to promote trade and seek markets.
Lap said since the Cooperative Law was enforced three years ago, a number of cooperatives operating in various spheres have been established in the province. Linkages among cooperatives and between cooperatives and other economic organisations have started to develop.
The capacity of cooperatives’ managers has also been enhanced, thus raising their operation efficiency.
Chairman of the Ben Tre Cooperative Alliance Phan Chanh Thi said 65 cooperatives and one cooperative union have been licensed in the province, gathering 30,139 members.
The cooperatives provided jobs for more than 1,260 people whose annual per capita income is about 42 million VND (1,850 USD). Each of them gained 2.5 billion VND (110,170 USD) in average revenue.
However, he also admitted certain shortcomings in local cooperatives such as irregular popularisation of knowledge about cooperative economy and cooperatives, limited capacity, and a shortage of skilled managers.
Samsung Viet Nam to prioritise pork use
Samsung Vi?t Nam on Thursday officially launched the food campaign prioritising the use of pork in meal for all its 142,000 workers.
The campaign is aimed at responding to the call of the Vietnamese Government to support farmers in overcoming difficulties due to the fluctuation of pork prices since May. It contains a series of practical activities such as increasing the pork consumption in daily meal by 60 per cent for workers, providing nearly VNÐ800 million to purchase pigs in northern B?c Ninh, Thái Nguyên and B?c Giang, organising the ’Pork Day’ and recommending to employees to use pork in their meal.
Accordingly, since May, all Samsung factories have prioritised dishes processed from pork for three meals per day. Within a month of its implementation, the amount of pork consumption in the five factories has increased by nearly 60 per cent, from 6.2 tonnes to 10.4 tonnes a day.
In addition, the Pork Day programme has strengthened the effectiveness of the campaign. Accordingly, Samsung Vi?t Nam will spend one day per week to put pork on the entire menus of its factories.
Samsung Vi?t Nam has officially deployed groups to purchase directly from pork supplying units that meet general standards, including B?o Nguyên Company, Sông C?u Company, Ðông Bình Agriculture Service Co-operative and Thanh Th?o Pig Farm. Samsung Vi?t Nam has offered these units leftovers of Samsung Electronic Vietnam EV and Samsung Vietnam Thái Nguyên employees for farming. All the pigs bought will be gifted to 55 agencies and schools within the three provinces, including Social Protection Centre, Nursing Centre for People with Merits and Boarding Ethnics School.
Samsung Vi?t Nam will proactively carry out the communication campaign for all employees to raise awareness on collaborating and supporting Vi?t Nam’s breeding and farming sector.
In the upcoming period, Samsung Vi?t Nam will continue to work with the food supplier to create more menus using pork daily for the employees. It is expected that this action will contribute practically to help Vi?t Nam’s breeding households surpass the difficult period.
Shim Wonhwan, Samsung Vi?t Nam’s president, said “As a member of the Vietnamese society, Samsung Vi?t Nam has been conducting massive pork consumption campaign to ease the difficulties Vietnamese farmers are facing. Many of our employees, including South Korean expatriates and I, are actively participating in the campaign as family of farmers, and I think it makes it more meaningful to be able to donate the pigs that have grown up on the leftovers of our canteen.”
China buys over 9,500 tons of lychees
China remains a traditional and important market for Vietnamese lychees, according to the Bac Giang provincial Department of Industry and Trade.
The province has, so far this year, sold more than 22,000 tons of lychees at average prices of US$.65-US$1.95 (VND15,000-45,000 a kilo). Of which, Yen The district sold 12,000 tons, Luc Nam over 2,000 tons , Luc Ngan over 5,500 tons, and Yen The over 800 tons .
Bac Giang lychees were consumed both in the domestic and foreign markets. More than 9,500 tons were shipped via Lang Son and Lao Cai border gates to China.
This year, China remains an important market of Bac Giang lychees. The province is expected to export around 50,000 tons, including 40,000 tons to China.
It’s noteworthy that this is the first time Vietnamese lychees have been exported to three new markets – Middle East, Canada and Thailand.
The first shipment of Luc Ngan lychees is expected to arrive in Thailand on June 20, opening a huge opportunity for the fruit to enter the potential market, especially after import duties are removed.
The provincial lychee output is estimated to reach 100,000 tons this year, which equals to 70% of that last year. Forty thousand tons of which met VietGap and the remaining 1,600 tons met GlobalGap standards.
Surprising reasons Vietnam can’t develop ability to compete globally
The competitiveness of the Vietnam private sector is at a crossroads, said speakers at a recent conference sponsored by the Ministry of Industry and Trade in the capital city of Hanoi.
Private sector businesses are slowly coming to the full realization that they cannot develop the ability to compete in the international marketplace, a fact that has far reaching implications.
The signs of the problem had been visible for some time. Almost all the economic growth the country has experienced over recent years has been created by the foreign sector, principally by companies such as Samsung and LG Electronics.
The same is true for job creation. While it is accurate that some of the new jobs have been created in government, healthcare and retailing, these are areas of the economy that are not exposed to international competition.
If one looks at the jobs created by the domestic private sector in manufacturing, which is exposed to competition from foreigners, the results can be described as lacklustre at best, a sure sign Vietnamese businesses are not developing an ability to compete.
Vu Thi Kim Hanh, chair of the Business Association of High Quality Vietnamese Products told the audience at the conference that she believes there is a generic problem with the strategies being pursued by domestic private sector businesses.
Business leaders, she said, generally try to place the blame for their failures on the government, foreign tariffs, other non-tariff barriers, the legal system, K–12 education, and fiscal or monetary policy.
In other words, the inability to compete isn’t the business leaders’ fault— it’s always the fault of someone else and not them. When in fact management is all about the art and science of getting things done and overcoming constraints, whatever they happen to be.
In other words, Ms Hanh is saying that we often hear Vietnamese agricultural businesses complain about problems they encounter with shipments of product being rejected by the US Food and Drug Administration.
The problem doesn’t lie with the USFDA, according to Ms Hanh, but with the Vietnamese business leaders who don’t have the ability to channel their company’s resources to meet with the exacting standards and requirements for safe food.
Through globalization, it has become possible and attractive for local businesses to operate in far more countries.But going international requires a monumental and fundamentally novel way of leading and managing a business.
It requires business leaders to shift from the old management style of controlling individuals to organizing teams of workers;a change from coordinating work by hierarchical bureaucracies to dynamic linking;anda move from top-down communications to horizontal conversations.
Dealing with competitiveness thus implies a revolution in the way private sector businesses are run. To be sure, improvements in the tax code and streamlining regulations will help. But ‘business leaders’ need to start acting like true managers and draw on the long tradition of can-do management on which the country was built.
More now than ever in the history of the country, there is a need for a wider embrace of the ethos of imagination, exploration, experiment and discovery.Now to compete, businesses have to excel with their customers on a global basis.
Today to become successful, businesses need to continuously delight their customers with innovative and creative new products, said Ms Hanh. Whereas in the past just being a bit more efficient than the local competitor might have been enough to get by.
Most importantly Vietnamese business leaders have yet to step up and meet the challenges presented by globalization and the new age consumer demand for quality products— and discard the outdated concept that cheap is best, Ms Hanh concluded.
Vietbuild Construction Exhibition to open in Ho Chi Minh City
More than 800 exhibitors from 27 countries in the world will take part in the Vietbuild Construction International Exhibition (Phase 1) in Saigon Exhibition and Convention Centre on June 23-27.
The exhibition will be held in 3 phases. The first phase, themed Construction – Building Materials – Real Estate & Interior - Exterior Decoration, has been the largest so far with more than 2,500 pavilions displaying materials, machinery and equipment along with technologies for the construction industry.
In addition to world leading brands, many notable construction groups and businesses in Vietnam like Viglacera, Prime, Phuc Khang, An Cuong, Hoa Sen, Secoin, Vicostone, Austdoor, and SCG will also join the exhibition.
They will introduce their latest products, equipment, technologies, and services in line with the themes of sustainable development and environmental protection.
Vietbuild Exhibition 2017, phase 2 will be held in late September under the theme ‘Real Estate - Architecture & Exterior-Interior Decoration’. In this exhibition, 800 businesses from 24 countries will showcase their products in 2,450 pavilions. Phase 3, themed ‘Housing - Home Decoration & Household Appliances’ will take place on December 14-18 with 2,450 pavilions from 12 countries.
Vietjet Air to offer promotional tickets on Vietnam-Myanmar flights
To celebrate the summer, Vietjet Air is to organise a series of activities at Myanmar Plaza, looking to offer its visitors exciting performance and opportunities to buy super promotional tickets.
The event’s participants cannot only enjoy playing games for lovely gifts, but also have chances to buy over 1,000 promotional tickets priced from only 0 USD, applied for Ho Chi Minh City-Yangon route for flight time being from July 10 to December 20, 2017 and Hanoi-Yangon for flight time from September 6 to December 20, 2017.
Also, people visiting the site can enjoy exciting performances, try their luck with lucky wheel games and take photos with flight crew.
With its high-quality services, special low-fare tickets and diverse ticket classes, Vietjet offers its passengers enjoyable flights with dynamic and friendly flight crew, comfy seats, amazing hot meals, special surprises from the airline’s inflight activities and amazing ticket fares through “12pm, It’s time to Vietjet” promotion.
Vietjet Air is the first airline in Vietnam to operate as a new-age airline with low-cost and diversified services to meet customers’ demands. It provides not only transport services but also uses the latest e-commerce technologies to offer various products and services for consumers.
Vietjet Air is a member of the International Air Transport Association (IATA) with the IATA Operational Safety Audit (IOSA) certificate. The airline was also named as one of the Top 500 Brands in Asia 2016 by global marketing research company Nielsen and “Best Asian Low Cost Carrier” at the TTG Travel Awards 2015, which compiles votes from travelers, travel agencies and tour operators in throughout Asia. The airline was also rated as one of the top three fastest growing airline brands on Facebook in the world by Socialbakers.
Currently, the airline boasts a fleet of 45 aircraft, including A320s and A321s, and operates 350 flights each day. It has already opened 63 routes in Vietnam and across the region to international destinations such as Thailand, Singapore, the Republic of Korea, Taiwan, Malaysia, China, Myanmar and Cambodia. It has carried nearly 35 million passengers to date.
Looking ahead, the airline plans to expand its network across the Asia Pacific region. To prepare for this plan, Vietjet Air has signed agreements with the world’s leading aircraft manufacturers to purchase more brand-new and modern aircraft.