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BUSINESS
IN BRIEF 2/3
New rules
press VAMC to be more transparent
The Viet Nam Asset
Management Company (VAMC) will have to publish information about its
activities and become more transparent under a new regulation issued by the
State Bank of Viet Nam (SBV).
Circular No04
issued on Wednesday, required the firm to publish information pertaining to
its management policies, internal regulations on buying and selling
non-performing loans, its processes and methods for calculating loan price
and assets, and its processes and methods for selling loans and assets.
VAMC's audited
annual reports, its criteria while buying bad debts from financial
institutions and its methods of selling bad debts and insured assets will
also have to be disclosed.
VAMC must also
follow regulations to provide statistics on its activities to SBV's Monetary
Statistics and Forecasting Department. When statistics in reports are
adjusted or undergo any unusual changes, the company must submit all
documents required by the department.
The circular will
come into effect on June 1.
Hai Phong
thermal power plant 2 to be transferred in Q1
Chinese and
Japanese contractors are expected to transfer the Hai Phong Thermal Power
Plant 2 to its investor in the first and second quarters of this year.
After three years
of construction, the two-turbine plant, with a designed capacity of 600 MW,
was fully connected to national grid in February 17.
Located in Tam Hung
commune, Thuy Nguyen district, the second plant was constructed by
Earlier, the Hai
Phong Thermal Power Plant 1 was put into operation in 2011, with an annual
electricity output of 3.6 billion kWh.
The two plants
contribute to ensuring power security and stable electricity supplies for
local factories’ production.-
Steel
production falls in January
The sales of
building steel in January this year fell sharply by 36 per cent over the
previous month and 42 per cent reduction compared to January 2013.
The statistics of
the Viet Nam Steel Association (VSA) showed that the total domestic steel
production in January was only 319,975 tonnes, a 30 per cent decrease against
the previous month and 5 per cent lower than the corresponding period last
year due to slow consumption.
Steel producers
have estimated that the production level was appropriate for the inventory.
By the end of
January, the inventory of building steel was more than 436,000 tonnes. The
association said the output would ensure sales for February, while the raw
steel would also meet the demand of the material at rolling steel factories
nationwide.
On the bright side,
the sales of steel pipes maintained a growth rate of 0.8 per cent over the same
period last year, reaching 68,045 tonnes. Its inventory was over 23,700
tonnes by the end of last month.
VSA forecast the
steel industry would continue to face difficulties in February and even lower
sales than January due to the long Tet holiday.
However, it
expected that the market would recover in March as several construction works
would begin.
The Ministry of
Industry and Trade has said that the steel enterprises had to cut their scale
of production by up to 40 per cent.
Ho Nghia Dung,
VSA's chairman, added that the demand for steel has sharply reduced. He
suggested that the Government should opt for solutions including issuing
bonds, investing in infrastructure and improving the property market to help
the steel industry gain a growth rate of 5-7 per cent this year. —
Retail
sales on upward trend in first two months
The nation's total
retail sales and service revenues increased 11.6 per cent year-on-year to
VND474.10 trillion (US$22.6 billion) in the first two months, the General
Statistics Office (GSO) reported.
Vu Manh Ha, a
senior expert at the GSO Trade Department, said that the nation's retail
sales during the reviewed period has returned to average growth of 6.2 per
cent, if price hikes were excluded.
The growth,
however, was far lower than the rate seen in the same period last year. This
means that the domestic consumption demand has yet to be improved as the
locals have curbed their spending habits and are focused on buying or using
only essential goods and services.
Many enterprises in
the retail sector, meanwhile, continued to restrict their business expansion
programmes as they continued to encounter obstacles including capital
shortages, a high volume of stockpiled goods and the increasing prices of raw
materials, Ha stated.
The trade sector,
which accounted for nearly 80 per cent of total revenues, rose 9.6 per cent
over last year's corresponding period.
In the
January-February period, the foreign-invested sector experienced the highest
revenue growth at 11.4 per cent, reaching $19.63 billion, while the
State-owned sector recorded a modest rise of 7 per cent at only $2.11
billion.
The country's
retail sector, with a boost from foreign retail distributors, has initially
proven it has changed for the better.
At present, there
are 650 supermarkets in 59 of the 63 provinces and cities across the country
and 117 shopping centres in 32 provinces and cities.
Draft law
proposes new fat tax on carbonated soft drinks
A special
consumption tax of 10 per cent is likely to be imposed on carbonated soft
drinks due to their potential health risks.
This is mentioned
in the revised draft of the Law on Special Consumption Tax released by the
Ministry of Finance recently.
The tax rate on the
beverage is currently zero per cent.
The ministry said
that several studies have pointed out the potentially harmful effects of soft
drinks on public health, suggesting that their consumption should be
controlled in the same way as that of cigarettes and alcohol.
The ministry cited
the harmful effects of preservatives, high sugar content and other additives
found in many such beverages, saying that higher taxes would dissuade their
consumption.
It also mentioned
the
In Asia,
As a side note, the
ministry stated that a 10 per cent tax would add VND1.5 trillion, or US$72
million, to the State budget by 2016. The revised law is expected to be
passed this year and take effect in July 2015.
However, industry
insiders said that more study should be done before imposing the tax, adding
that the potential health risks of soft drinks have remained a controversial
issue in the world.
Under the draft
law, the special consumption tax levied on beer, wine and tobacco will also
be hiked by 10 to 15 per cent from 2015, in a bid by the Government to reduce
the consumption of these products.
The tax on beer,
wine and tobacco products will hit a record high of 75 per cent in 2015, and
is likely to go up to 85 per cent in 2018. The taxes are expected to
contribute more than VND2.9 trillion, or $131.82 million, to the State budget
in 2016 and VND7.7 trillion, or $350 million, in 2018.
The Ministry's statistics
showed that beer and wine sales in 2013 were roughly 3 billion litres,
equivalent to 32 litres per capita, making
The excessive
consumption of beer and wine has a negative impact on public health and
threatens social security due to rising social evils, violence and traffic
accidents, especially during festivals and holidays.
It will also be
proposed that a 30 per cent tax be imposed on voting games and betting via
texting.
Making use
of EU regulation to boost exports
However, leading
experts say the GSP scheme, in fact, only provides modest benefits to
Under the scheme,
GSP is applied to most of
Tran Ngoc Quan,
deputy head of the European Market Department under the Ministry of Industry
and Trade, postulates the GSP scheme will no longer be valid when a free
trade agreement (FTA) between
Although graduation
thresholds increase from 15% to 17% on products, excluding garments, many of
Vietnamese exports are likely to reach these threshold levels and will not
enjoy EU preferences.
If the new GSP is
applied, the market share of Vietnamese coffee, tea and spices in the EU will
increase to 21.68% from the current 12.11%, meaning these products will cross
over the graduation threshold and will not receive preferences.
Similarly, Vietnamese
seafood and footwear are no exception, as these two groups of products are
expected to make up 19% and 34% of the EU’s market share respectively.
Claudio Dordi from
the EU Investment and Trade Policy Support Project says EU tariff incentives
create a competitive advantage for Vietnamese garment businesses, especially
when their major rival, China, is paying Most-Favoured-Nation (MFN) taxes
which are 3% higher than GSP levels on average
Customers,
therefore, will place orders with
However, Dordi
warns the GSP brings a definite competitive advantage as the validity of the
GSP is not permanent.
Than Duc Viet, a
Garment 10 Corporation representative, says the most difficulty in gaining GSP
advantages is to meet Rules of Origin of materials to get certificate of
origin (C/O) form A.
Currently, the
company cannot apply for incentives for its FOB products as most of its
materials are imported from
Former Trade
Minister Truong Dinh Tuyen posits GSP does not exert sufficient pressure on
economic restructuring, thus affecting a trade balance. Exports may rise
thanks to GSP, but imports may also increase due to low competitiveness in
labour productivity, quality and production costs.
As
This means GSP
creates an external source of competitive advantage and domestic businesses
should not rely on this source, Tuyen says. Instead, he advises businesses to
grasp GSP rules to avoid obstacles, even losses when exporting products to
these markets.
To this end, the
former Trade Minister says business should make full use of GSP incentives by
improving product quality, diversifying their exports, and reducing costs and
prices to sharpen the competitive edge of Vietnamese products.
In addition, a
greater effort is needed to accelerate economic restructuring and growth
model shifting, he concludes.
Forestry,
seafood exports up in 2014
Export value of
agro-forestry and seafood products have increased 9.4 per cent compared to the
same period last year, according to the Ministry of Agriculture and Rural
Development.
Exports are
estimated to reach US$4.33 billion in the first two months of the year.
During this period,
exports of key agricultural products were about $1.73 billion, down 20.5 per
cent against the same period last year as rice, coffee and rubber exports
have declined.
The country
exported about 702,000 tonnes of rice worth $330 million, down 12.3 per cent
in volume and 8.4 per cent in value.
In January and
February, about $919 million was earned from seafood exports, up 23.5 per
cent against the same period last year, while exports of key forestry
products was $837 million, up 30.2 per cent.
Exports have
increased partly due to the VAT exemption on raw products of agro-forestry
and fisheries that took effect early this year, experts said.
The global recovery
has also led to a higher demand for agro-forestry and fishery products.
Moreover, the
decline of the US dollar in February stimulated importers to buy more
agro-forestry and fishery products for storage, experts said.
Many exporters said
they now have long-term orders.
The ministry has
set a target of exporting $28.5 billion of agro-forestry and fisheries
products this year, up 3.63 per cent against last year.
If the world
economy continues to improve, the export value of agro-forestry and fisheries
can reach $30 billion this year, according to the ministry.
The programme to
establish stronger links between commercial banks and enterprises to
facilitate access to preferential credit will expand this year to include
small traders, a senior
Nguyen Thi Hong,
Deputy Chairwoman of the HCM City People's Committee, said at a review
meeting that the city had initiated the linkage programme last year after
organising meetings between the two sides in all 24 districts.
Under the
programme, banks had pledged to provide loans worth VND13.7 trillion
(US$648.86 million) to 654 enterprises, small household businesses and
co-operatives at annual interest rates of nine per cent for short-term loans
and 9-12 per cent per year for medium and long-term loans.
Lat year, the city
had also helped connect banks with businesses participating in the city's
price stabilisation programme, Hong said.
Unlike in previous
years, when companies received interest-free loans from the city, credit
institutions last year offered loans at six per cent annual interest, she
added.
Van Duc Muoi,
general director of Visssan, which participates in the price stabilisation
programme, said businesses had felt more secure about accessing capital and
the lower interest rate had also helped them reduce production costs and
become more competitive.
For 2014, the
programme targets loans of VND20 trillion ($947 million), Hong said.
This year, the
programme will create conditions for more businesses including small traders
and households to gain access to preferential loans, Hong said.
She said it will
"continue to focus on providing preferential loans to enterprises
involved in priority sectors, with particular preference given to those that
want to upgrade production technology and equipment or apply hi-tech
advances, or to those working in support industries."
Le Hoang Quan,
Chairman of the HCM City People's Committee, asked the municipal Department
of Industry and Trade, business associations, HCM City Export Processing Zone
Authority and others to collect more information from businesses in their
areas to help them solve problems in a timely manner.
Quan said that
businesses, for their part, should review their operations and cut
unnecessary costs.
Nguyen Van Binh,
Governor of the State Bank of
Binh also
encouraged all banks to participate in the programme.
At the meeting,
four commercial banks -Sacombank, Agribank, Vietcombank and Vietinbank -
signed agreements to provide loans of more than VND800 billion ($37.87
million) to 11 businesses, including Nutifood, Ba Huan, ABC Bakery and Pham
Ton.
SBV to get
support for infrastructure
The State Bank of
Viet Nam (SBV) will be supported by NEC Asia Pacific and MITEC Vietnam JSC in
boosting its infrastructure and storage capacity.
This follows a
contract titled "Procurement of Servers, Middleware and Database for the
State Bank of
The project,
beginning in March, is expected to be completed in the next nine months.
With a total
investment of over US$9 million, the project will equip and deploy the setup
of a server system, middleware, network equipment, software and advanced
databases in SBV's data and backup centre.
Speaking at the
signing ceremony, SBV Deputy Governor Nguyen Toan Thang said, "I am very
happy that SBV has chosen highly competent and experienced partners such as
NEC Asia Pacific Pte Ltd Singapore, and Mitec Vietnam JSC. SBV hopes and
believes NEC-MITEC will continue to coordinate to implement the project
successfully as planned."
As part of the
Financial Sector Modernisation and Information Management System (FSMIMS), a
$71.83 million project financed by the World Bank, the project will provide
the required infrastructure to upgrade current banking technologies, and to
integrate with international banking systems.
It will strengthen
the capacity to support the implementation of monetary and foreign exchange
policies, as well as to enhance banking inspection processes of the bank.
The project will
not only help support the operation of core banking systems but also involve
training and knowledge transfer to local staff after the implementation.
Vivian Tay, Deputy
Managing Director of Public Security of NEC Asia Pacific, said that the
project was another milestone for them in
"The FSMIMS is
a key project and of paramount importance to facilitate linkages between SBV
and financial intermediaries, as well as enhance domestic and cross-border
exchanges within the financial markets," she said.
The first three
fish farms raising tra fish for export in the Mekong Delta
Covering a total
area of 36.7 hectares, the facilities are run by the Co Chien, Nam Vang and
Nam Song Hau companies in Vung Liem and Tra On district with the support of
the Government’s programme to build safe tra fish farming areas meeting
GlobalGap/ASC standards.
Founded in 2010 by
the World Wide Fund and the Dutch Sustainable Trade Initiative, the ASC is a
global organisation working with aquaculture producers, seafood processors,
retail and foodservice companies, scientists, conservation groups and the
public to promote the best environmental and social choice in seafood.
The ASC's
aquaculture certification programme and seafood label recognises and rewards
responsible aquaculture.
ASC certified
enterprises will be assisted to transform their production practices and
apply advanced technology in fish farming, thus minimising the use of
chemicals in production.
More importantly,
the enterprises will be put under the supervision of the surrounding
community, raising their responsibility towards society and their workers.
Currently, Vinh
Long counts 239 fish farming facilities operated by 58 firms and 192
households.
This year, the
province will work harder to ease difficulties in capital, market, breeding
stock and infrastructure for the fish farming sector in a bid to ensure the
stable operation of 430 hectares of farming waters, striving for a total
output of 100,000 tonnes.-
For three
consecutive years (2011-2013), the Ho Chi Minh City Power Corporation (EVN
HCMC) took the lead among localities nationwide in the attempt to reduce the
elasticity coefficient of electricity consumption, contributing to increasing
the efficiency of the use of electricity throughout the city.
The result was
attributed to the corporation's efforts such as guidance for power companies
in the city to encourage their customers to implement power saving solutions,
according to Nguyen Anh Vu, Director of the EVN HCMC’s Community Relations
Department.
It coordinated with
the city’s steering committee for power supply and conservation and the Ho
Chi Minh City Export Processing and Industrial Zones Authority (HEPZA) to
inspect the use of electricity at large businesses and those based in
export-processing and industrial zones in the city, Vu was quoted by the online
Vietnam Economic News as saying.
In addition, the
corporation held meetings with businesses to disseminate power saving
solutions.
The city has been
the first locality nationwide to establish an energy safety and efficiency
information office responsible for providing energy saving solutions and
basic knowledge about electrical energy. This office also introduced power
saving products to all dwellers, especially students.
Vu said i n early
2013, the EVN HCMC launched the Power Saving Family programme for the period
from 2013-2015. O ther models include Power Saving Streets programmes
implemented in 25 streets, which saved more than 334,500kWh, and another
programme that promoted the use of solar water heaters, with 6,335 solar
water heaters installed, exceeding the target by 19.5 percent. A power saving
programme has been implemented with the participation of over 24,000 students
in the city.
In addition, the
corporation has provided each power company with five LCD monitors for
residential and public areas to promote power safety and efficiency
information. It has coordinated with media organisations to produce public
information broadcasts on power saving. In association with the municipal
Department of Industry and Trade, it organised an international fair and
exhibition on power saving technologies, energy efficient products and green
energy.
Last year, it
trained 700 officials from the Vietnam Fatherland Front Ho Chi Minh City
chapter, 300 officials from the city’s Women’s Union and War Veterans’
In 2014, the EVN
HCMC continues to modernise the power grid in the city and build a smart
power grid to ensure its flexible and safe operation. This year, the city’s
commercial electricity output is expected to reach 19.22 billion kWh and the
power loss rate to be less than 5.3 percent, down 0.3 percent compared with
2013.
In 2013, the
country saved an estimated 2.62 billion kWh, equal to 2.3 percent of the
commercial electricity output, and the elasticity coefficient of electricity
consumption with respect to the country’s gross domestic product (GDP) stood
at 1.69.-
Ba Ria-Vung
Tau withdraws port, warehouse project licences
The southern
coastal
Investors of these
projects were urged to start construction but they failed to comply.
According to the
provincial Department of Planning and Investment, local authorities will hold
meetings with investors to enquire about the difficulties facing businesses
as well as their expectations so as to take measures to support them.
However, the
province will take back licences from projects that their investors are
unable to carry out.
Ba Ria-Vung Tau
province has granted investment licences to seven new local projects so far
this year. It has set a target of permitting 17 domestic projects to be
constructed in 2014.
In 2013, the
province attracted 13 FDI projects worth 217 million USD and 29 others
invested by local businesses worth 14 trillion VND (666.6 million USD).-
Vietnam
attractive to Japanese investors: JETRO
Japanese businesses
are looking closely at the investment environment in
According to
Kawada, about 2,000 Japanese firms are operating in
A recent survey conducted
by the JETRO revealed that up to 70 percent of Japanese businesses plan to
expand their operations in the Southeast Asian country.
The survey also
found that the country surpassed larger competitors like
Most of the
questioned Japanese businesses highly valued
Many companies plan
to build more factories in
He said the number
of visitors to the page on
The country holds
an important position in the ten-member group, he said, noting that most of
the Japanese businesses operating in
Notably, low-cost
labour is one of Vietnam’s advantages, with each worker receiving 3,000 USD
per year on average in 2013, one eighth of what Japanese companies pay their
employees in Singapore and half what they pay in Thailand.
Japanese businesses
currently focus their investment on the processing and production on small
and medium scale, but they also have their eyes on the high-tech sector.
Dr. Nguyen Dang
Minh from
This is an
opportunity for
However, Minh also
proposed
He underlined the
need for the country to establish a national programme on attracting Japanese
investment and organise more exchanges for the two countries’ businesses.
Vietnamese
labourers should be equipped with not only technical and language skills but
also understanding the Japanese business culture, he said.
Kawada also
suggested
The JETRO has made
a list of outstanding Vietnamese businesses operating in the area to
introduce to Japanese firms, thus helping them establish connections, he
said.
According to
statistics released by the Foreign Investment Agency under the Ministry of
Planning and Investment, there were 2,103 Japanese-invested projects worth a
total of 34.5 billion USD in
With the amount of
added capital climbing from 1.2 billion USD in 2012 to 4.5 billion USD in
2013,
Southern
hub strives to keep economic recovery in 2014
Overcoming the
country’s economic difficulties and the global financial recession, last year
With the current
national economic growth, the country's economic hub in the south has
targeted a GDP growth rate of between 9.5 and 10 this year. It will continue
to implement policies on tax exemption and payment extension to help
enterprises recover trading and production.
“Municipal
authorities will keep trying to clear inventories, remove obstacles for
businesses, and promote trade and expand export markets through trade
promotion programs, encouraging people to use Vietnamese products, and
practicing thrift. Six breakthrough programs will be implemented with
priority given to developing science and technology, stepping up exports, and
ensuring social security,” Le Hoang Quan, Chairman of the municipal People’s
Committee, was quoted as saying by Radio the Voice of Vietnam (VOV).
This year, the city
will focus on the improvement of the business environment and competitiveness
on top of supporting enterprises with information sources and simplifying
administrative procedures. With advantages over services, it will continue
policies to speed up e-commerce, apply modern distribution channels, and
provide capital for enterprises.
To reach the GDP
and export growth targets, the banking sector should be more active in handling
difficulties for businesses in which capital sources should be prioritised to
the production of the city’s key items, said Nguyen Hoang Minh, Deputy
Director of the State Bank of
Industry
restructure will continue in the direction of reducing mining and increasing
processing to turn out products of high added value. More policies will be
designed to encourage multi-national economic groups to invest in the city
using advanced technologies. The city is boosting investment in the second
phase of the high-tech zone, prioritising the development of
microelectronics, IT, telecommunications, precise mechanics-automation, and
nano- and bio- technologies.
Le Hoai Quoc, head
of the
The city will
develop safe agriculture through the use of high- and bio-tech as it wants to
create a favorable environment for the municipal economy to grow sustainably
in the future.-
While demand for
white-leg shrimp is running high, farmers of this crustacean species in the
Mekong Delta region’s coastal provinces are struggling with a shortage of
electricity for their farms.
Soc Trang
Province’s Department of Industry and Trade said at a meeting on Wednesday
that around 338 kilometers of power line would need to be upgraded at a total
cost of over VND85 billion to serve shrimp farming in the province this year.
However, Nguyen
Thanh Duy, chairman and general director of Southern Power Corporation (EVN
SPC), said that in recent years the firm had spent big on the 110-kV Ha
Tien-Phu Quoc submarine power line in Kien Giang Province, and grid upgrades
for shrimp farming in Bac Lieu and Ca Mau provinces and for dragon fruit
cultivation in Binh Thuan, Long An and Tien Giang provinces.
“We’ve had to spend
a great amount of money, so we are unable to fund new projects,” Duy said.
Duy agreed with Soc
Trang Province’s plan to upgrade and improve 52 kilometers of medium-voltage
line, nearly 156 kilometers of low-voltage line and 138 transformer stations
at a cost of some VND54 billion.
Of this amount, EVN
Soc Trang and EVN SPC will provide VND10 billion and VND15 billion
respectively and the province’s reciprocal capital will account for the rest,
he added.
No matter how the
plan will play out in Soc Trang, the electricity shortage is still ongoing.
According to rough
estimates of Soc Trang, Bac Lieu, Ca Mau, Tien Giang and Ben Tre provinces,
there is over 20,000 hectares of brackish water shrimp farming affected by
the electricity shortfall.
In
Tran Thanh Nghiep,
vice chairman of
Nghiep said Soc
Trang Province’s export revenues last year rose to an all-time high of over
US$520 million, mostly contributed by shrimp export. “If the electricity
shortage continues, the province’s shrimp farming and exports will face huge
difficulties,” he said.
Ministry
proposes to raise prices on wind power
The Ministry of
Industry and Trade proposes increase on wind power price to attract foreign
investment, said Pham Trong Thuc, director of the ministry’s Renewable Energy
Department on February 20.
Power corporations
currently purchase electricity generated from renewable energy sources at
US$7.8 per kilowatt hour, said Thuc during a seminar about wind power
development in HCMC. This rate is lower than the world’s average price
for renewable energy. It has been unable to increase due to social
welfare.
Vietnam’s aim is to
generate 1,000 megawatts of wind power by 2020. This will account for
5.6 percent of the country’s total electricity. The country aims to increase
this number to 6,200 megawatts by 2030, which will account for 9.4 percent of
the country’s total electricity.
The Ministry of
Industry and Trade is studying Decision 37 and changes to wind power price in
order to reach the target.
The ministry will
submit the decisions for approval by the end of 2014.
The ministry will
also seek sponsorship for projects estimating Vietnam’s wind potential in the
mainland and offshore.
FPT says will make vigorous steps abroad
Vietnam’s
information technology giant FPT Corporation will make vigorous investment
steps abroad this year to expand its business scale rather than focusing on the
home market that has become crowded, said the company’s CEO.
General Director
Bui Quang Ngoc told the media at a post-Tet meeting in HCMC on Wednesday that
making outbound investment will be one of the main paths that FPT would walk
in the coming time.
FPT since 2008 has
set the target to obtain US$1 billion in annual revenues, and the domestic IT
market has become small for the group to realize its ambition.
“It’s time for FPT
to enter a bigger, more challenging playground to sustain its high growth like
in the past years,” Ngoc told assembled reporters. Last year, the group’s
revenues from overseas markets totaled US$130 million, he said.
Ngoc stressed that
Japan, the United States, Singapore, Myanmar, and some other emerging markets
will be the main focus for FPT’s investment. FPT targets to obtain an annual
revenue of between US$350 million and US$400 million from abroad.
Apart from
attracting more outsourcing orders from main markets like Japan, Europe and
the U.S., FPT will also develop more applications based on social network or
mobility platforms, as well as big-data analysis and cloud computing
solutions.
Apart from
establishing subsidiaries in foreign markets, FPT will also pursue merger and
acquisition activity, buying foreign firms to enter overseas markets quicker,
especially Japanese firms.
Last year, FPT
Software, a subsidiary of the IT group, struck a deal with Japan’s Recruit
Technologies, which specializes in providing web-based trade promotion
solutions, to help the Vietnamese IT firm to boost supplies of packaged
services to the Japanese market.
In the U.S., FPT
has launched a research and development center to boost its technology
capacity and prepare a springboard for the group to approach international
customers stateside. In this market, FPT has won contracts to supply cloud
computing services to customers in the areas of aviation and insurance. Asked
if FPT is taking risks when marching overseas, Ngoc said there are always
challenges, but “this is the strategy FPT has set out and will pursue.”
“We have taken
prudent preparations for sailing to the outer sea, with the crucial factor
being our workforce with 6,500 programmers and IT experts currently working
in 17 countries. In terms of technology, we are now partnering with major
technology giants like Microsoft, Cisco, IBM and Oracle,” Ngoc said.
FPT reaped strong
business results last year, with some VND28.65 trillion, or roughly US$1.36
billion in revenues, rising 12% year on year, while its pre-tax profit
amounted to VND2.5 trillion after-tax profit VND2.06 trillion. IT and
telecom are two key business spheres of the IT group.
Software exports
last year brought the group VND2.15 trillion, or over US$100 million, a
strong rise of 24% against 2012.
State
representatives at firms must speak foreign language
Those chosen to
represent the State holdings at enterprises with foreign involvement must be
fluent in foreign languages and can work directly with foreign partners,
instead of being through interpreters, the Ministry of Finance says in a new
circular.
Circular 21/2014
issued by the ministry last Wednesday rules that representatives must have a
good command of spoken foreign languages to work directly with foreign
partners. This requirement will affect numerous officials as many of them do
not speak English or any other foreign language.
Representatives who
cannot speak foreign languages as required must be replaced within 60 days
after the circular takes effect.
The circular also
specifies that representatives of State interests in other enterprises must
have obtained tertiary education in the professional fields they work, must
have at least three years’ experience in the fields in terms of financial and
organizational management.
To prevent
conflicts of interest, representatives must not have relationship of kinship
or marital relationship with people holding managerial positions in the
enterprises where they represent the State holdings.
Representatives
must report to the owner of State interests the operational situation of the
enterprises or their wrongdoings, if any, according to the circular.
Meanwhile, such enterprises are legally bound to provide sufficient
information regarding their business operations to the representatives.
Shipping
firms not ready for ASEAN single market
Vietnamese shipping
firms will have to face tougher competition in the ASEAN single shipping
market as they are not ready for the new playground, experts said at a
workshop on Thursday.
Speaking at ASEAN
single shipping market – Opportunities and Challenges, Do Xuan Quang,
chairman of the Vietnam Logistics Association, said that ASEAN nations have
agreed to establish a common economic community in 2015. In addition, the
nations will reach an agreement for a single shipping market, facilitating
free circulation of goods, services, investment capital and manpower.
The market will
bring about a lot of opportunities and challenges for the local shipping
industry. However, local firms have yet to prepare for the market, Quang
said.
Concerning the
positive side, Dr. Jose Lelis Tongzon, dean of the logistics faculty of South
Korea’s Inha University, said that Vietnamese firms will have opportunities
to do business in a larger market.
They will be able
to cooperate with each other to exchange technologies and management
experiences. Customers will also have more options of low charges and better
quality offered by foreign shipping lines.
However, as most
Vietnamese firms are small and medium-sized enterprises (SMEs), they will
face huge obstacles in the market. Small firms with bad services may be
eliminated from the market.
In addition,
foreign firms will have more advantages than local enterprises. Vietnamese
enterprises still have problems with port infrastructure and human resources.
To help SMEs
compete with foreign enterprises, Tongzon said that local enterprises must
cut shipping charges and improve service quality.
Shipping
enterprises should pay attention to cooperation among ports, transport and
logistics enterprises to link up a chain and reduce transport costs, he said.
WGC:
Vietnam’s gold demand jumps in 2013
The nation posted
up total gold demand of 92.2 tons in 2013 with a value of US$4.16 billion, a
20% rise compared to the previous year, according to the latest report of the
World Gold Council (WGC).
Last year, the
nation ranked seventh worldwide in terms of gold consumption. Vietnam
imported 80.3 tons of gold for gold bar production and 11.9 tons for making
jewelry.
Meanwhile, jewelry
companies are barred from importing material gold directly given current laws.
Global gold demand,
in contrast, dropped 15% to over 3,700 tons worth US$170 billion last year as
exchange traded funds sold the precious metal and central banks reduced gold
purchases.
China, India, the
U.S., Turkey, Thailand and Germany reported higher gold demand than Vietnam.
Earlier, a WGC
member told the Daily that gold consumption of local people actually fell
last year. But as local banks needed 30 tons of gold to close gold accounts,
the nation’s gold demand increased.
Vietnam-UK
trade up nearly 20%
Vietnam Customs
statistics show two-way trade between Vietnam and UK reached a very promising
US$4.27 billion in 2013, a year-on-year increase of 19.48%.
The value even
exceeded the US$4 billion target outlined in their 2010 Strategic Partnership
Agreement.
Of the total,
Vietnamese exports hit US$3.69 billion, up 21.94%, and its imports were
US$573.27 million, up 5.7%.
Mobile phone
handsets and components topped the list of Vietnamese exports to the UK,
raking in US$1.24 billion. They were closely followed by footwear (US$543
million), garments (US$471 million), computers and components (US$400
million), wood and timber products (US$217 million), seafood (US$143
million), plastic products (US$88 million), and coffee (US$86 million)
Meanwhile, the
major Vietnamese imports included machinery and equipment (US$194 million),
pharmaceuticals (US$79 million), pesticides (US$42 million), chemical
products (US$34 million) and iron and steel scraps (US$24 million).
Vietnam often
maintains a trade surplus with the UK.
UK Trade Counselor
Piers Craven has said the UK wants to balance trade with Vietnam and
encourages more Vietnamese businesses to invest in the UK.
The Director of the
UK Trade and Investment (UKTI) program in Vietnam, Douglas Barnes, has
believed bilateral trade will increase in the future because trade is a key
priority in the strategic partnership between the UK and Vietnam.
At the seventh
meeting of the Vietnam-UK Joint Economic and Trade Committee (JETCO) held in
Hanoi on January 7, the two sides discussed measures to remove difficulties
for Vietnamese businesses exporting wine and dragon fruits to the UK, and
strategies to strengthen market management.
Japan
considers Vietnam a potential market
A Japan External
Trade Organization (JETRO) survey shows 70% of Japanese firms investing in
Vietnam plan to expand their operations to capitalize on investment
preferences.
Most of them
explained the reason behind their expansion plans is to increase sales
revenues. In particular, non-manufacturing enterprises are attracted by
Vietnam’s steady growth and potential market.
The country also
has an abundant supply of labour and socio-political stability.
However, the JETRO
report points out high risks the Vietnamese investment climate incurs, most
concerning legislation, administrative procedures, taxation policy, customs
procedures, and labour costs.
On the other hand,
the localisation rate in Made-in-Vietnam products is rather low, at 32.2%
compared to 64% in China, 53% in Thailand, 42% in Malaysia, and 41% in
Indonesia.
Hirotaka Yasuzumi,
HCM City-based JETRO Office managing director, said that Vietnam needs to
accelerate policy and institutional reforms which concern Japanese businesses
most.
He suggested the
government assist local and foreign businesses in support industries to
improve the competitive capacity, through appropriate interest rate and human
resource development policies.
Hirotaka Yasuzumi
acknowledged Vietnam’s efforts in holding dialogues with businesses and
timely addressing their concerns, considering this an effective solution for
investment attraction.
The survey examined
1,000 Japanese companies operating in 20 countries and territories in Asia
and Oceania.
Through the survey,
JETRO wants to gain a better understanding of Japanese operations in Asia and
Oceania, so that it comes up with recommendations to facilitate their
operations.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Bảy, 1 tháng 3, 2014
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