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BUSINESS
IN BRIEF 6/5
Authorities
call for oversight of fraudulent retail websites
To tap the
potential of online trade, stricter penalties should be imposed on websites
that engage in fraud, a government source was quoted as saying in the Nguoi
Lao Dong (Labourer) newpaper.
In recent years,
improved legal regulations for online trade have helped reduce online trade
fraud, but fraudulent practices continue, mostly due to the poor management
of several agencies, according to the source.
"The online
shopping model would develop strongly in
By 2015, at least
40-45 per cent of the country will be using the internet, and turnover from
online retail will reach more than US$4billion, according to forecasts from
the E-commerce Association of Viet Nam
In addition,
average per capita income in the country could reach $820 by that time, and
with a young population and increasingly high incomes, more money would be
spent on non-essential goods.
The number of
internet users is expected to rise to 37 million by 2016 from 30 million in
2011, according to Business Monitor International (BMI).
Meanwhile, the
rapid development of high-speed internet services will offer ready access to
online shopping services.
However, analysts
have said that only 5 per cent of Vietnamese consumers now taking part in
e-commerce are satisfied with the service.
Consumers have
cited concerns about poor delivery services and complicated procedures, he
said.
They have also said
that product quality wa so lower than what had been advertised online, and
prices were as high as similar items sold offline.
Nguyen Ngoc Dung,
deputy general secretary of the
However, only 1,100
websites in
The city has yet to
punish organisations and individuals for failing to register their websites,
he said, adding that the city was focusing on disseminating the regulations.
A representative of
the city's Department of Trade and Industry said the agency had organised
many conferences and training courses to educate businesspeople about the
decree. Meanwhile, the department is reviewing a list of e-commerce-related
websites in the city and reminding the owners to register them.
Electronics
sector in need of support
Domestic
electronics industry still struggle to survive as local electronic
manufacturers have to narrow their production.
The most important
problem of the electronics industry is attributed to poorly-developed support
industry. Electronics businesses are still facing difficulties in having
access to bank loan and seeking workshop for their production.
In addition,
Most of
locally-manufactured products are made in line with foreign design. Very few
local makers are produced by local manufacturers and generate a very low
added value and low competitive edge, reports Viet Nam Economic Times.
For a long period,
Vietnamese electronics industry only have assembled electronic spare-parts
and labelled Made-in-Vietnam products
On the other hands,
local electronics manufacturers have low competitive edge in comparison with
foreign direct investment companies as FDI businesses enjoyed huge tax and
fee incentives. FDI businesses will enjoy a 10 per cent corporate income tax
rate for 15 years, down from the usual 22 per cent. Furthermore, the investor
will also enjoy a four year tax break and a 50 per cent reduction for the
following nine years. While, local investors have to pay 20 per cent
corporate income tariff. The tariff is applied in 2014.
Furthermore, one of
the obstacles hinder local electronics manufacturers getting into global
value chains in the electronics industry is the concept of building a
comprehensive electronic industry ranging from eletronic accessories to CKD
products.
Local insiders
noted that to develop this concept is not a simple thing. To participate in
the global value chains in the electronics industry, Vietnamese electronic
makers need to shift their production structure by changing from production
and assembling of civil electronics products to design and development of
specialised ones. They are also asked to focus on specific investment
strategies.
General secretary
of Viet Nam Chamber of Commerce and Industry (VCCI) Pham Thi Thu Hang said
local electronics makers needed to specify which are the best products and
accessories having high competitive edge to be produced so as to meet the
three following targets: "quality, on time delivery and reasonable
price."
If the three
targets were met, local electronic producers could participate in the global
value chains in the electronics industry, she said.
According to the
General Statistic Office (GSO),
According to the
annual report of the VCCI, the great achievement in export turnover of
electronics sector in the last three years showing that this sector plays an
important role in the country economic development. However, it noted that
the great achievement is mostly contributed by FDI businesses while local
businesses have not yet made any impressive development in the achievement.
Although FDI
businesses account for 25 per cent out of 500 electronics businesses in
Even
distribution of FDI a must: experts
A Viet Nam News
Agency (VNA) report yesterday cited several experts as saying the nation's
foreign direct investment (FDI) policy should also ensure added value for
domestic products and services.
The report noted
that as a global economic recovery begins to take shape, the Government and
localities nation-wide are trying to offer greater incentives for FDI
capital.
It said FDI has
played an important role in
According to the
Ministry of Planning and Investment, as of late 2013, some 100 countries and
territories had invested in 15,300 projects with a total registered capital
of over US$223 billion.
The VNA report
quoted faculty of the HCM City University of Economics as saying foreign
investment has become an important additional resource for the country over
the last 25 years.
It said the FDI
sector has seen the highest growth compared to other economic sectors,
contributing 20 per cent to the country's GDP, taking technology to higher
levels, improving the quality of human resources and generating jobs.
It also quoted Le
Manh Ha, Vice Chairman of the HCM City People's Committee, as saying that
since the beginning of this year, the city has enjoyed a nine-fold
year-on-year increase in FDI inflow.
Ha said further
that neighbouring cities and provinces like Dong Nai, Binh Duong and Ba Ria –
Vung Tau, have also reaped success in attracting FDI.
Members of the
Central Economic Committee as well as academics with the HCM City Economics
University have stressed the importance of bringing about "drastic
changes" in attracting foreign investment, mainly through a clear
preference for advanced technology and environmentally-friendly projects, the
report said.
Dr Hoang Xuan Hoa
of the Central Economic Committee said that FDI resources should be allocated
in such a way that they spur economic development in all cities and
provinces.
Provinces in the
southern region have taken the lead in offering many incentives to achieve
their FDI goals for 2014 and coming years, the VNA report said.
Bo Ngoc Thu,
director of the provincial Department of Planning and Investment, said that
to reach its goal of attracting $900 million in FDI this year, of Dong Nai
has instituted several preferential policies.
FDI businesses will
enjoy a 22 per cent corporate income tax for both new projects and project
expansions, she said. They will also benefit from a four-year tax exemption
and a 50 per cent reduction for the following nine years. Businesses
operating in industrial parks will also enjoy a tax rate of 22 per cent, as
opposed to the usual 25 per cent.
Thu said Dong Nai
has also issued policies to assist small and medium-sized FDI enterprises,
with administrative procedures eased considerably for prrojects with an
investment of less than VND100 billion ($4.7 million) that employ at least
300 people.
Meanwhile,
Ha, vice chairman
of the HCM City People's Committee, said the city enjoys several advantages
including location, a large number of qualified employees, excellent living
conditions for investors, and improved social infrastructure facilities.
To attract foreign
investors,
Hung So, General
Secretary of the Korean Chamber of Commerce in
However, they are
hoping for further reforms in investment policies, he said.
Both experts and
investors say that administrative procedures and inappropriate policies have
hindered
It noted that in a
recent dialogue with foreign investors, Minister of Planning and Investment
Bui Quang Vinh said that efforts are on to simplify the issuance of
investment certificates, including exemptions for projects that do not use
large land areas or cause high levels of environmental pollution.
Vinh also said that
the corporate income tax policy will be changed gradually. From January 1,
2016, the tax will fall to 20 per cent from 25 per cent. For some priority
industries, it will be further reduced to 17 per cent, he said.
Hoang Thi Tu of the
Central Economic Committee said consensus has to be reached on tax and
investment policies towards helping raise national competitiveness in
attracting foreign investment.
The Internet should
be used to highlight the investment attractions of
Mai also said that
the Internet should provide information that investors need to make decisions.
The draft amendment
to the Viet Nam Law on Enterprises 2005 allows enterprises to become involved
in businesses not listed in their business register certification, except for
those requiring specific conditions.
This change is seen
by the business sector as an important point in the ongoing legal reform.
Under the proposed
changes, enterprises could expand business lines with a notification sent to
the business registration agency.
The amendment is
also meant to separate the registration for receiving a business licence for
consitional lines, which had caused confusion during the administrative and
practical processes.
Under the current
law, enterprises must register business activities and would be violating the
Law on Enterprises if they carry out business activities not mentioned in
their business register certificate.
Experts note that
registering enterprises is a formality required when opening a business. But
how an enterprise operates or invests is part of the process of developing a
business idea.
Thus, the amendment
would help reduce risks prone to re-registration of business certificates.
These risks include modification costs, wasting time, litigation, conflicts
and collapsing contracts, said Nguyen Dinh Cung, acting director of the
Central Institute for Economic Management (CIEM).
"The change
would also help implement a principle mentioned in the Constitution, that
people are allowed to conduct any business which the law does not ban,"
said Cung.
However, lawyer
Dinh Nhat Quang from Leadco legal counsel said the separation of business
establishment registrations and business line registrations, and the
abolition of the requirement for business conditions (such as a practicing
certificate, certify legal capital) at the time of registration, would result
in an inability to filter out investors who would normally not be approved to
set up enterprises.
Additionally, the
combination of business establishment registration and business line
conditions would not waste the time and money of investors, but save a wide
array of fees associated with opening and closing weak enterprises, Quang
argued.
Another significant
change is the draft amendment to the Viet Nam Law on Enterprises 2005, which
focuses on the practices of State-owned enterprises (SOEs) along with the
rights, obligations of ownership and managerial process.
The draft reflects
the growing pressure to restructure this driver of the economy. According to
the new chapter proposed by the Ministry of Planning and Investment (MPI),
the amended law would identify the roles and missions of all SOEs and also
each SOE, in particular.
The proposal
legalises principles to secure and develop State capital in commercial
operations.
In terms of
ownership rights and implementing obligations, the draft proposes to separate
the practice of ownership rights from other practices.
Every enterprise
must have a representative body which takes responsibility before the
Government and the National Assembly for State ownership practices in the
enterprises. However, the body would not directly issue administrative orders
or interrupt the enterprise's commercial operations.
The draft also
regulates disclosure of periodic reports and requested information from SOEs.
The amended business
law retains the fundamental structure of the current Law on
For Japanese
companies,
Increasingly,
Japanese firms are finding that tapping into the local workforce skills and,
most especially, recruitment of senior staff is a prerequisite to a
successful expansion strategy to penetrate the market.
“Over 85% of
foreign owned companies, including Japanese firms, need Vietnamese qualified
senior personnel who can manage their companies in the startup phase and
beyond” reports Nguyen Thi Van Anh, Managing Director of Navigos, an
established executive recruitment agency.
Vietnamese
candidates are in high demand, especially by Japanese companies thanks to
their excellent oral and written communication skills, work experience and
high-skill levels, said Van Anh.
Representatives
from The Japan External Trade Organization (JETRO) in turn report that, in
the coming time, Japanese firms have plans to invest heavily in the field of
high technology and fully anticipate the demand for qualified human resources
will increase dramatically, especially information technology (IT) senior
engineers.
Currently, there
are more than 2,000 Japanese companies are investing in
FDI
businesses enjoy huge export surplus
Foreign direct
investment (FDI) businesses remain the main contributor to the country’s
trade balance, obtaining a record high of nearly US$4.1 billion in export
surplus in the first four months of the year.
Foreign Investment
Agency statistics show FDI businesses earned US$30.35 billion from exports
(including crude oil) in the reviewed period, representing a year-on-year
increase of 17.2% and accounting for 66.3% of the country’s total.
Mobile handsets and
components topped the list of commodities attaining high export earnings,
fetching US$7.7 billion, up 29.2%.
FDI businesses also
imported US$26.25 billion worth of materials for production, up 18.2% from a
year ago, or 58.3% of the country’s total.
While FDI
businesses achieved a trade surplus of nearly US$4.1 billion, domestic
businesses continued a trade deficit of US$3.4 billion in four months.
Great potential for
Vietnam- Algeria trade cooperation
Vietnamese exports
to
In the first quarter
of 2014, official statistics show exports jumped 32% compared to the same
period last year tallying US$67.89 million. Of the figure, coffee exports
accounted for the lion’s share at US$30.97 million, and telephone and
component exports trailed a distant second at US$18.51 million.
Vietnamese major
exports to
Additionally, a
number of Vietnamese commodities have a good prospect of penetrating the
market, including steel and iron, fruits and vegetables, rubber, ships,
footwear, and handicrafts.
The Algerian
Government is currently implementing programmes to attract investment in the
processing industry, agriculture, and consumer goods production as part of an
effort to boost the nation’s economy, diversify its industries and generate
jobs.
Furthermore, the
Algerian government has expressed a keen interest in cooperating with
Dragon
fruit gain
In addition to the
common requirements, applicable to all fresh fruit and vegetable imports to
On May 1, 2014, the
MPI issued a regulation on import and clearance of fresh fruit and vegetable
into
Footwear
exports aim for US$12 billion in 2014
A sharp increase in
footwear exports during the first four months is painting a picture of
cautious optimism as the industry aims for an annual increase in sales of 20%
to US$12 billion for 2014.
The General
Statistics Office (GSO) reported that from January to April 2014, footwear
exports jumped 21.9% from a year earlier to US$2.9 billion.
The average monthly
growth in export sales in the first four months was over 20% thanks to rising
consumption and improvements in standards of living in countries around the
world, most notably in the EU.
Vietnamese footwear
exports have been enjoying the benefits from many incentives from the
Generalize System of Preferences (GSP) offered by the European Union (EU) as
from January 2014.
Accordingly, the
tariffs levied on made-in-Vietnam footwear exports dropped from nearly 7.7%
to less than 4%, thus sharpening Vietnamese footwear’s competitiveness in the
EU market.
A Puon Chen
In addition, the
Trans-Pacific Partnership (TPP) agreement will also create numerous
opportunities for footwear exporters in the near future. The Vietnamese
footwear industry will be provided with more competitive advantages in such
big markets as the
At present, local
footwear exporters are making use of importers’shift to new locations to
select new goods suppliers. Many importers have chosen
To meet the
increasing demand for footwear of both domestic and overseas markets,
Vietnamese businesses are expanding their production scale and improving
product quality. Many local exporters report they are backlogged on orders
for the next six months.
Nevertheless, there
remains a paradox in the footwear sector. More than 70% of footwear exports
are attributable to direct foreign investment (FDI) businesses, which means
that the lion’s share of the profits are going to these businesses, and for
100% Vietnamese owned businesses, added value is still much too low.
In recent years,
some large Vietnamese enterprises have increased investment in upgrading
technology, modernizing production chain, and developing their own brand name
for export.
This has improved
the localization rate in
However, many
small-and-medium-sized enterprises (SMEs) still depend much on imported input
materials and more needs to be done to expand the production chain, they
caution.
Cashew nut
exports up in volume, value
Cashew nut exports
are forecast at 20,000 tonnes in April with sales of US$132 million,
according to the Ministry of Agriculture and Rural Development (MARD).
The April figure
brings total cashew nut export volume up 14.5% to 73,000 tonnes in the first
four months of 2014 with sales of US$456 million up 15.7% in value, compared
to the same period last year.
MARD reports that
the export price of cashew nuts stood at US$6,182 per tonne, up 1.76%.
The
The Vietnam Cashew
Association (Vinacas) predicts that with nut shell oil and other processed
products, the cashew sector is likely to realise a turnover of US$2.2 billion
this year.
The Vietnamese
economy has expanded 7.8 times since the country regained national
independence in 1975, the Government news portal reported.
The economy posted
a continuous growth since 1981 and the GDP per capita increased from US$86 in
1980s to US$1,899 in 2013.
Investors from 90
countries and territories have poured some US$270 billion and the disbursed
volume reached US$114 billion. The FDI sector accounts for around 45% of
International
friends have pledged to grant some US$81 billion in official development
assistance (ODA) to
At present,
The economy,
however, is facing a number of big challenges, especially in terms of growth
quality, investment efficiency, and productivity, the news portal added.
Enterprises
urged to prepare for TPP
Vietnamese small
and medium sized enterprises (SMEs) lack preparedness to cope with
cross-cutting issues posed by the Trans-Pacific Partnership (TPP) and need
changes in management and production methods to more effectively compete
after the pact comes into effect.
The National
Assembly Committee for Economic Affairs has approved
Although the TPP
offers opportunities for Vietnamese businesses to penetrate new markets and
improve their competitive edge,
It is most certain
that the TPP will directly and negatively impact all Vietnamese SMEs that do
not adequately prepare for its implementation.
Dr Nguyen Duc Kien,
deputy head of the NA Committee for Economic Affairs said that the
participation of Vietnam in the TPP will provide Vietnamese domestic
businesses greater access to the markets of other TPP member nations, each of
which will have differing and complex requirements related to such things as
quality standards that must be met before Vietnamese products will be
permitted into the market.
Regarding TPP’s
advantages, Dr Hoang Phuoc Hiep, head of the Faculty of Economics Law from
the Hanoi University of Business and Technology (HUBT) said that the signing
of TPP will help Vietnam better allocate human resources within the economy
more effectively, speed up the restructuring process and bolster the
renovation of the growth model.
Trade
liberalization with major markets such as the
Hiep noted that the
impact of the TPP on the Vietnamese economy is not necessarily always going
to positive for all sectors and businesses in
Factoring in recent
trends in the flow of international foreign investment into Southeast Asian
nations like
Many Vietnamese
businesses are not reacting to the signing of TPP with such vigilance and as
a consequence may be setting themselves up for failure; Hiep said or they may
just simply miss out on participating in the opportunities it affords.
Hiep quoted
information from Bloomberg’s as saying that Chinese businesses have made
early preparations for the TPP and cites one of
From mid-2012
forward, Texhong Textile has poured US$300 million investment funds into
expanding its fabric manufacturing facilities in the
Additionally, in
November 2012, a joint venture of Shengzhou Sunrise Textile Co., Ltd and
Thien Nam Investment and Development Joint Stock Co was established under the
name of Thien Nam Sunrise Textile Joint Stock Company.
With total
investment capital of US$24 million, the joint venture built a spinning
factory with a capacity of 300 tonnes per month. As yet one more instance,
Hong Kong’s
Meanwhile, Le Tien
Truong, deputy general director of the Vietnam National Textile and Garment
Group (Vinatex) said that one of the challenges his company faces is rapid
and strong investment of foreign investors and the resulting competition it
portends.
Chinese businesses
are preparing to capitalise on the passage of the TPP in terms of finance,
technology and market compared to local businesses, Truong warns.
Dr Tran Dinh Thien,
Director of the Vietnam Economic Research Institute said that the competitive
edge of Vietnamese SMEs in the international arena is going to be limited and
in actuality may more than likely turn negative for some localities unable to
adequately cope and fail to meet the demand for development, even in the
agriculture, industry and service sectors. Most importantly, sudden trade
liberalization could potentially lead to bankruptcy and unemployment at
businesses with low competition capacity, if adequate preparations are not
undertaken.
In addition, other
significant issues faced by SMEs when joining TPP are the protection of
intellectual property rights, environmental standards and rules of labour
that all can have severe negative adverse consequences if these issues are
not adequately addressed and prepared for.
These issues could
represent the death knell for Vietnamese SMEs and offset all of the other
advantages from reduction in import tariffs and increased market access if
not properly addressed.
Most notably, Thien
said that SMEs have inadequate information on TPP due to poor dissemination.
Meanwhile, these businesses must be fully cognizant of the agreement, so that
they can devise proper plans to make appropriate changes in production and
business activities.
Therefore, he
warns that to reduce the risks of joining the TPP, Vietnamese SMEs are fully
advised to adequately prepare for the TPP and make necessary changes in
management and production to improve their competitive edge.
Government
directs centralized capital for priority areas
A resolution on a
regular cabinet meeting has been issued emphasizing the need to centralize
investment capital on priority areas to help enterprises alleviate
difficulties in production and business operations.
Accordingly, the
Government requested the State Bank of Vietnam (SBV) to manage credit growth
in line with the plan set early this year while ensuring credit quality and
assisting businesses to restructure old debts to increase credit access.
The SBV was asked
to intensify operational management of the banking system and closely monitor
the implementation of safety ratio for banking activities.
It is essential to
implement a plan to restructure credit institutions for the period 2011 –
2015, enhance the role of the National Asset Management Company and speed up
the settlement of bad debts in the banking system, the resolution said.
The Ministry of
Finance will direct budget collection activities to ensure the progress of
revenue collection as planned, strictly control expenses and reinforce
administrative reform and prevent acts of tax evasion, price rigging to
protect consumer rights and ensure capital investment sourced from state
budget and government bonds are used effectively.
The Ministry of
Planning and Investment will coordinate with ministries, sectors and
localities to implementing solutions to accelerate disbursement of investment
capital primarily from State budget, government bonds, ODA and FDI for key
construction.
The Ministry needs
to provide enough capital for ODA projects and for those due for completion
in 2014.
The Ministry of
Agriculture and Rural Development is tasked to coordinate with ministries,
agencies and localities in managing agricultural structure in conformity with
the market situation and production capacity to benefit farms.
The Ministry should
strengthen the examination and prevention of epidemics by closely monitoring
the illegal cross-border transport of livestock and poultry to limit the
spread of epidemics.
It should prepare
to implement contingency plans for flood and storm control, accelerate the
construction of irrigation works, prevent droughts and saltwater intrusion in
the central, the
The Ministry of
Industry and Trade will work with ministries, sectors and localities on
solutions to support and encourage exports, control market prices, help local
businesses with market expansion and product consumption, combat smuggling
and counterfeit and substandard goods, and duly punish acts of violations.
Green
action plan for SMEs closer to reality
The country
currently has approximately 543,963 business enterprises, nearly 97% of which
are small-and medium-sized enterprises (SMEs).
SMEs are the
backbone of the Vietnamese economy, accounting for more than 40% of the
country’s GDP and generating millions of jobs for workers, helping to reduce
poverty and ensure the social welfare.
However, in recent
years, the majority of SMEs have not paid proper attention to environmental
protection. Most of them use outdated machinery and technology, consuming too
much energy and causing excessive environmental pollution.
To raise the SMEs
awareness on the importance of environment protection, the
The project aims to
help SMEs formulate and implement green plans to improve their overall
business operations. It also aims to organise a network of SMEs to
efficiently cope with climate change and effectively and sustainably use
natural resources while protecting the environment.
Through green
activities, businesses are not only increasing their ability to improve their
products and services but are also attracting more customers, allowing for
greater penetration into new and emerging markets.
Green activities
help reduce production costs and time, allowing for optimal use of materials,
raising productivity while limiting the negative impact on environmental
pollution.
Sharing information
among businesses is a fundamentally very important task as it can help SMEs
choose safer business solutions, minimize risks and losses, develop
international market and find the best environment management experience.
Dak Lak
exports coffee to 60 countries worldwide
Coffee, the key
export of the central highland
Among them, 31
markets have an export value of more than US$1 million each while 13 others
have obtained values in excess of US$10 million each including Germany,
Japan, Italy, the US, Belgium, Spain, the Republic of Korea, Switzerland,
France and Russia.
Since 2008,
cumulative coffee exports of the province have reached more than US$3.5
billion. In the first quarter of 2014 alone, total coffee exports were
US$260 million, far outpacing the US$600 million for all of 2013.
According to the
People’s Committee, the export volume of coffee has remained relatively
stable and the increases in value are directly attributable to increases in
the selling price. At present, Dak Lak leads provinces and cities nationwide
in coffee cultivation area, with more than 202,022ha, accounting for over 40%
of the total area in the central highlands dedicated to growing coffee and
30% of the total area nationwide. It yields around 400,000 tonnes of coffee
bean per annum.
Given the current
state of the market, leading economists are relatively confident that coffee
will continue to play a vitally important role in boosting the locality’s
socio-economic development for many years to come.
Industrial
sector production accelerates 5.4%
Overall industrial
production in the first four months of the year expanded by 5.4%
year-on-year, concurrent with a 13.9% jump in inventory indices, according to
the General Statistics Office of Vietnam (GSO).
The growth in the
processing and manufacturing industry was 7.4%, 9.6 % for electricity
production and distribution, and 5.4 % for water supply and wastewater
treatment.
Mineral
exploitation experienced an overall decline of 2% year-on-year.
Some sectors having
high index of industrial production (IIP) included garments and textiles,
leather production, electronics, computers, optics, and machinery
manufacturing.
Meanwhile, there
was a decline in IIP of some sectors- pharmaceuticals, drug, crude oil and
gas exploitation, tobacco production, coal exploitation.
Inventory index of
the processing and manufacturing industry shot-up 13.9% against same period
last year’s figure, showing that industrial production still faces
difficulties in production consumption. Average inventory rate of the sector
in the first quarter of this year was a whopping 80.7%.
Employment rates at
industrial businesses rose by 4.5% from last year’s same period, of which the
State-owned enterprises fell by 1.6%, non-state sector went up 4% and foreign
direct investment (FDI) sector up 7%.
Fiercely
competitive food market
Food producers need
to heavily invest to truly differentiate their products as competition is
fierce from rivals, according to industry leaders and analysts.
The Statistics
Office in
Analysts attribute
foreign direct investment (FDI) to the growth in the industry. As an
example, they cite
Domestic food
producers in
Vissan Company
leads in transforming themselves in the marketplace. Its General Director Van
Duc Muoi says his company put forward a strategy to change completely. It
used to control all phases of production, ranging from husbandry, food
animal, and slaughtering to distribution.
Now its market
strategy is more narrowly focused on finding its niche in the marketplace
limiting its attention to higher added value slaughtering, production and
wholesale and divesting itself of investment in lower added value product
lines.
A complicated issue
is that many domestic businesses find it difficult to align themselves to
form a chain of shops to collectively promote a brand name due to limited
capital and related difficulties in locating good business locations, which
generally are more expensive. FDI businesses do this better, as they have
more ready access to investment for such start-up costs.
A director of a
domestic food business in
Furthermore,
consumers are paying more attention to standards and parameters on production
date, expire date, origin of products, and Hazard Analysis Critical Control
Point (HACCP), and many domestic businesses don’t include these parameters.
Including this type
of information on packaging requires an initial investment which companies
simply don’t have. Even though the initial investment will result in
long term returns, that more than offset the initial investment many times
over.
Therefore, domestic
businesses are forced to compete with foreign rivals based on price and are
forced to reduce prices substantially in order to do so. In fact,
prices of domestic products are often 5-10%, even 20% cheaper than imported
ones.
Tran Thi Thanh
Huong, Director of Quoc Huong Technology Company, says price competition is
just suitable for those which have abundant products. Domestic businesses
suffer from losses in a long-term.
Huong analysis is
that small businesses often pay too much attention solely to price
competition. Some are passive in updating information and even do not care
for HACCP and other standards in circulation. Thus, they will suffer losses
when exporting products to demanding markets.
Huong reveals that
her company is striving to obtain reputable certificates to create special
products to attract customers.
Vissan also can
afford 80% of input materials and will pay more attention to origin of
products in the future, Muoi says.
Regarding a food
strategic project by 2020, Muoi says businesses are not strong enough to
conduct survey for the project. The State should be involved in order to have
a completed project for the food processing sector.
They will also
create favourable conditions for their information technology businesses to
expand cooperation and seek investment opportunities.
The agreement was
reached at a working session in
Son spoke glowingly
of the assistance OFCOM has provided Vietnamese broadcasting and
telecommunications management agencies over the past years in developing a
healthy and competitive marketplace.
The Vietnamese
telecom sector has developed strongly over the past 20 years, especially in
mobile communication and internet development, which is expected to continue,
said Son.
The country
currently has 13 businesses developing telecom infrastructure and 90
businesses providing telecom services, especially internet services.
It has more than
135 million telephone subscribers, including 126 million mobile phone
subscribers, and over 31 million Internet subscribers. There are currently 67
radio and television stations at central and local levels throughout the
country.
A premiere success
of the sector came with the launching of the nation’s first
telecommunications satellites (VINASAT 1 & 2), culminating in the
launching of VNREDSat-1 - its first optical Earth observing satellite which
is now in permanent orbit.
Total revenues of
the telecommunication sector were an astounding US$9.9 billion last year, Son
concluded, contributing significantly to the strong economic development the
country is experiencing.
The country has
also permitted businesses to pilot the Long Term Evolution (LTE) services in
an effort to develop 4G mobile phone services by 2015.
OFCOM leaders
shared the
Singapore
encourages firms to invest in Vietnam
A press release of
the Ministry for Trade and Industry quoted Lim as saying "
The press release,
issued following the 10th Singapore-Vietnam Connectivity Ministerial Meeting
which was held in Singapore on April 29, wrote that the meeting was
successful, highlighting the need for Singapore and Vietnam to continue
seeking greater economic collaboration and forging stronger bilateral
economic ties.
During the meeting,
both sides noted good progress made across the six pillars of Connectivity,
namely finance, education and training, transportation, investment,
information technology and telecommunications, and trade and services.
Since its
implementation in early 2006, the Connectivity Framework has successfully
facilitated several private sector projects into
The Connectivity
Framework has also strengthened public sector cooperation in all six sectors.
For example,
Noting the strong
growth in bilateral trade and investment services between the two countries
over the past decade, both sides at the 10th Connectivity Ministerial Meeting
agreed that there is potential for deepening and expanding bilateral economic
collaboration.
The ministry added,
as Vietnam is liberalizing and developing its economy, Singapore companies can
contribute and participate in Vietnam’s economic development in a wide range
of sectors, including urban solutions, retail and food services, logistics,
telecommunications as well as tourism and hospitality.
Bilateral trade has
grown steadily over the last decade, achieving a three-fold increase since
2003 to reach SGD17.4 billion in 2013. As of March 2014,
Other upcoming
projects include
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Hai, 5 tháng 5, 2014
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