BUSINESS IN BRIEF 19/3 Cut costs to integrate: U.S. execs Domestic small and medium enterprises (SMEs) should cut costs and improve their competitiveness in order to integrate into the global supply chain, said U.S. multinationals at a workshop in HCMC on Tuesday. The ASEAN SMEs training workshop called “Improving Competitiveness Tools for SMEs to Connect to Global Markets” was held by Vietnam Asia-Pacific Economic Center (VAPEC) in HCMC and the U.S.-ASEAN Business Council. SMEs in Vietnam can save money and boost competitiveness by improving the supply chain and online payment and marketing methods, Emre Olcer, general manager of Procter & Gamble (P&G) Vietnam, told the event at the Saigon Times Group head office. A company sees 15-40% of its costs associated with the supply chain. Therefore, if the chain is adjusted reasonably, the company can sharply reduce costs, said Jeff McClean, general manager of UPS Vietnam. For freight forwarding and logistics firms, a modern business model is to customize their products. In addition, they have to connect e-commerce with the supply chain, he said. There are now over 1,000 logistics companies in HCMC. Most of them still have to cover high costs and thus earn modest profits, leading to low foreign direct investment (FDI) in logistics. To improve the supply chain, McClean suggested enterprises better understand the market, review their business models and choose third-party partners. One of the reasons why Vietnamese enterprises bear high costs is the small number of SMEs making and accepting card payments, said Lorijon Bacchi, VISA country director for Vietnam. The percentage of SMEs using cards to make payments in Vietnam is much lower than in other nations in the region like the Philippines, Thailand and Singapore, she said, adding SMEs mainly use bank cards to buy tickets and pay for tourism, entertainment and daily activities. A survey by VISA Vietnam shows that the charge of 3.5% on each credit card payment is unattractive. The charge should be lowered as competition among banks is growing stronger and the number of e-commerce participants is increasing, she said. HCM City’s trade promotion focuses on regional countries The HCMC Investment and Trade Promotion Center (ITPC) will strengthen trade promotion activities in Myanmar, Laos and Cambodia to help HCMC-based enterprises sell products. Speaking to the Daily on the sidelines of the meeting launching the year’s plan of ITPC held in HCMC on Tuesday, Pho Nam Phuong, deputy head of ITPC, said that the center would help enterprises sell products and expand distribution networks. Therefore, Laos, Cambodia and Myanmar are the three major markets which have much potential and are Vietnam’s traditional markets. In every country, ITPC will have different trade promotion programs, specifically with three exhibitions in Cambodia April, June and November. Besides, there will be promotion conferences and an exhibition to be held in Laos in May. Meanwhile, Myanmar as the emerging market is considered to be full of potential. In addition to exhibitions, business groups of HCMC will visit and explore this market in June. According to Phuong, besides these three focal markets, ITPC will continue exploiting established markets such as Japan, European countries, the U.S. as well as new markets like African and South Asian countries. To make trade promotion programs work effectively, ITPC will work with trade offices in foreign countries to arrange meetings and facilitate business matching among enterprises, Phuong said. The HCMC government will assist enterprises producing consumer goods by paying the advertising costs on posters, radio and Cambodia’s Apsara TV in June. Such assistances were offered last year and delivered high efficiency. Most of trade promotion programs mentioned above have received positive responses from enterprises, most of which are ones operating in the sectors of textile, garment, footwear, food processing, electronics, and interior decoration, according to Phuong. HCMC vice chairwoman Nguyen Thi Hong said at the meeting that ITPC should work with enterprises from other provinces and ask them to join those promotion programs for synergy. Besides, ITPC this year will have four investment promotion teams tasked with calling for investments into HCMC in the high-technology and supporting industries. Promotion teams will visit the U.S. next month, Singapore in May, Germany in July and Cuba and Chile in September. CAAV accredits VietJetAir engineers VietJet Aviation Joint-Stock Co., better known as VietJetAir, has received an approved maintenance organization (AMO) certificate from the Civil Aviation Authority of Vietnam (CAAV), more than one year after the low-cost carrier launched commercial flights. The certification allows VietJetAir’s engineers to conduct daily maintenance of its fleet consisted of six Airbus A320 planes, the carrier said on Wednesday. It said the accreditation made it more flexible in planning and controlling maintenance activities, helping reduce management costs and maximize operational efficiency. Lai Xuan Thanh, director general of CAAV, said the AMO certification took effect from March 1 this year and would be reviewed on an annual basis. “VietJetAir meets our requirements in excellence of manpower, engineering facilities, spare parts and tooling, and documentation,” he explained. Thanh believed the certificate would further facilitate VietJetAir’s commitment to providing passengers with flights of safety and high-quality services at the lowest possible cost. Desmond Lin, director of business development at VietJetAir, said the air carrier had continued to reinforce its aircraft fleet maintenance and operation quality, in addition to heavy investment in new, modern and cost-saving planes. VietJetAir said it was now is supported by major aviation services and technology corporations, including Airbus, CyberSource and Singapore International Airlines Engineering Co. (SIAEC). VietJetAir took off in December 2011 for its first route linking HCMC and Hanoi. One year later, the airline transported more than one million passengers on its six Airbus A320 aircraft that fly within a domestic network connecting HCMC, Hanoi, Dalat, Danang, Phu Quoc, Hue, Nha Trang, Vinh and Haiphong. The private carrier VietJetAir commenced the HCMC-Bangkok service last month and also has plans to link HCMC and Hanoi with other Southeast and Northeast Asian countries later this year. VietNamnet