BUSINESS IN BRIEF 16/10 Retail sector to be modernised Modern retail will boom and be a driving force for the development of the country’s retail sector, experts said at a seminar in Hanoi on October 13. Tran Nguyen Nam, Deputy Director of the Domestic Market Department under the Ministry of Industry and Trade, said the Vietnam’s retail market is booming with many convenience stores, supermarkets, and commercial centres. Some world’s leading retailers like Walmart, Auchan and Robinson are seeking opportunities or have begun operation in Vietnam. There is a huge opportunity for investors, however, domestic businesses are not competitive right on their home turf, Nam said. 2014 is considered a year of global retail market with basic and strong changes. Vietnamese customers have become more dynamic with increasing demands. President of the Vietnam Retailers Association (VRA) Dinh Thi My Loan stated that more foreign retailers will penetrate Vietnamese market, posing both challenges and opportunities for domestic firms. The fierce competition will demand domestic firms to improve their retail services and skills as well as the quality of products. Loan highlighted the transparency in policies to attract foreign investment while protecting domestic businesses. The MoIT reported that by the end of 2013, Vietnam had 724 supermarkets, 132 commercial centres, nearly 9,000 traditional markets and around 1 million household-run shops. It is expected to have around 1,300 supermarkets, 180 commercial centres and 157 shopping centres by 2020. Entrepreneurship on the rise in Vietnam Over the next ten years, the business community has ambitious goals, aiming to create an additional one million businesses, creating better jobs and improving the livelihoods of the nation’s people. Vietnam Chamber of Industry and Trade (VCCI) President Vu Tien Loc made the affirmation on the occasion of Vietnam Entrepreneurs’ Day (October 13), a holiday set aside to honour the Vietnamese business people who promote entrepreneurship, business, innovation, and new jobs. “This is the tenth year since the Prime Minister signed the decision to set aside October 13 as Entrepreneurs’ Day and the economy has seen many ups and downs during the decade,” Loc said. According to VCCI statistics, the opening of the markets in line with World Trade Organization (WTO) commitments during this period and the resulting influx of foreign investment has resulted in the creation of 11 million jobs, benefiting over 4.6 million individual households in recent years, he said. However, on the other hand Loc said, the statistics show that 60-70% of entrepreneurial start-up ventures have failed.  So it has not been a complete success story.  There are no gains, without some pains and it is incumbent upon all businesses aiming for success to develop a good solid business strategy and assess the risks. Statistics from the VCCI reflect that as of January 2014, the country had more than 750,000 businesses established in accordance with the Enterprise Law. Over 390,000 of them were established in the last five years and over half of them were established in the last ten years, Loc said. Nguyen Thi Nguyet Huong, President and CEO of the Vietnam Investment Development Group in turn said many entrepreneurs in the country are hopeful that future amendments to the Enterprise Law will offer even greater opportunities for millions of people to get involved in business activities. Victoria Kwakwa, (WB) Country Director in Vietnam said the rebound of the global economy bodes well for Vietnam and the business community and expressed her confidence that the government will create improved economic conditions for business to flourish. “Vietnam is situated in one of the most dynamic development regions in the world, Kwakwa said adding “The increased consumer trust in the government and business community has strengthened consumer demand in the Made-in-Vietnam brand.” However she cautioned the Vietnam Government has to make further efforts to improve the investment environment and continue its quest to devise improved support policies to help Vietnamese businesses continue to thrive. Victoria Kwakwa said now is a prosperous and opportune time for private businesses in the country and encourages Vietnamese businesses to take full advantage of the opportunities presented in the dynamic marketplace in the country. Vietnam entrepreneurs should outline a clear business strategy with detailed business plans to improve their competitive edge and grow their businesses. She says businesses need to be heedful of the importance of having a long-term vision. They also need to be mindful of the need to invest in building human resources and enhancing capacity to overcome difficulties, she said. Addressing the recent Vietnam Business Forum 2014, State Vice President Nguyen Thi Doan called on the VCCI to continue to implement the Politburo Resolution No.09 on building and promoting the role of Vietnam entrepreneurs in the context of industrialization, modernization and international integration process. Doan said in the current situation, businesses and entrepreneurs should full take advantage of opportunities and inquire into the market and competition. They should improve their management and professional skills to compete with others in the international market for stronger and sustainable development, she added. Central region takes biofuel lead The National Oil and Gas Group (Petro Viet Nam) has opened three biofuel plants with total capacity of 300 million litres per year in order to meet increasing demand for green energy. The Dung Quat plant alone provides the central region with 1.5 million tonnes of E5 per year, deputy general director of Petro Viet Nam Nguyen Sinh Khang said at a conference in Da Nang city late last week. "We are making sure that biofuel is always available at stations and costs the same as RON 92. We have sold 106,000 cubic metres of E5 since 2010," Khang said. Da Nang, Quang Ngai and Quang Nam were leading the way when it came to promoting biofuel due to their efforts to raise awareness about environmental protection, he said. Nguyen Van Hoi, deputy general director of Binh Son Refining and Petrochemical Company (BSR), said the company had supported its fuel agents with VND350 per litre of E5. "BSR has produced over 10.06 million litres of E5 RON 92, of which over 10 million litres were sold in the country," Hoi said. "We are supporting agents to prepare for the mass launching of biofuel sales." The central city of Da Nang will completely replace RON 92 with E5 at its 118 retail filling stations next month, while Quang Ngai plans to stop selling Mogas 92 by the end of 2014. Binh Son Refining and Petrochemical Company said the company would provide 24,000 cubic metres of E5 for Da Nang, Quang Nam and Quang Ngai in October and November. Last week, the Vietnam National Petroleum Group (Petrolimex) announced that E5 RON 92 was priced between VND25,310 (US$1.2) and VND25,810 ($1.22) per litre in Quang Ngai Province. Experts urge gradual consumption tax hike Viet Nam should increase special consumption taxes on goods like liquor and tobacco in "reasonable" increments over several years so as to discourage smuggling and other forms of illicit trade, experts have said. Speaking to Viet Nam News on the sidelines of the recent 11th Asia-Pacific Tax Forum, they said that a gradual rise would also reduce the impact on consumers. The experts were referring to increases to the special consumption tax on liquor, beer and tobacco that have been proposed in draft amendments to the Law on Special Consumption Tax. The draft law, now under discussion, is expected to be approved this year and come into force on July 1, 2015. It seeks to hike the tax on tobacco from 65 per cent to 70 per cent on January 1, 2016, and to 75 per cent in 2019. The tax on beer will be increased from 50 per cent to 55 per cent on July 1, 2015, to 60 per cent in 2017 and 65 per cent in 2018. The special consumption tax on liquor with alcohol content of above 20 per cent will be raised from 50 per cent to 65 per cent and that on liquor with less than 20 degrees would be increased from 25 per cent to 35 per cent. Daniel Witt, president of the International Tax and Investment Centre, said that gradual tax adjustments with carefully-planned roadmaps are required to avoid creating a shock and increasing smuggling and illicit trade. "The Government of Viet Nam's approach is in the right direction," he said. But he said "The 10 per cent increase is too high and should be set at just 5 per cent annually, the same increase proposed for beer. Again, all products should have the same, gradual tax increase." Higher upfront increases could risk incentivising smuggling and shifting consumption to the black market as consumers would substitute consumption to other products that had not experienced the large tax increase, which would pose risks to Government revenue, he added. Agreeing, Stephane Gripon, general director of Diageo Viet Nam, said: "The proposed increases are substantive and could have significant impacts on legitimate business if not implemented in a reasonable way. "We are concerned that any excessive increase in tax will only lead to widespread unrecorded and untaxed alcohol." He said the hikes should not begin before 2016 and should be phased over three or four years. More importantly, he said, this should be done equally for all alcoholic beverages – beers, wines, spirits – over the same period of time. He suggested an increase of 5 per cent per year from 2015 to 2017. Rob Preece, lecturer in excise at the University of Canberra, Australia, said one of the causes for increasing black market trade was that the penalties were too small, and many people would be willing to take the risk to earn high profits. "The principle is slow adjustment to minimise unintended consequences," he said. Witt said efficient co-ordination between relevant authorities, including police, tax and customs officials as well as the health ministry was critical to addressing the issue. "Tax policy and rates should be neutral," he said, adding that tax increases should not hurt competitiveness. ‘Neutral' refers to a level that will not force businesses to change their economic routines to accommodate the tax. Striking a balance in revenue, employment, investment, consumption and production was important, other experts said. The forum heard that a two-year study into the development of excise tax policy in the context of the ASEAN Economic Community 2015 was to come out this year. This is expected to provide Viet Nam as well as its ASEAN neighbours with a roadmap to modernise excise taxation and ensure more stable revenue and consumption. Vietnamese choose fresh fruit over other snacks Fresh fruit tops the list of most popular snacks in Viet Nam, as the country ranked second after the Philippines in Southeast Asia in listing freshness as the most important quality for snacks, according to a report from Nielson, an international global information and insights company. Conducted from February 17 to March 7, the Nielsen Global Survey of Snacking polled more than 30,000 online consumers in 60 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa and North America. It identified which snacks were the most popular and which health, taste and texture attributes were most important in the selection criteria. The reports says that consumers in the region are relatively healthy snackers, with 30 per cent of Vietnamese, 26 per cent of Indonesians, and 23 per cent of Thais preferring fresh fruit as their snack of choice, compared to 18 per cent of consumers globally. While 31 per cent of Filipinos, 20 per cent of Singaporeans and 17 per cent of Malaysians rank bread and sandwiches as their preferred snack followed by fresh fruit. Sixty-two per cent of Vietnamese consider freshness as the most important criterion, followed by flavour and indulgence (i.e., the right balance between healthy and indulgent). While freshness takes the lead in the region with 75 per cent of Filipinos, 54 per cent of Malaysians, 52 per cent of Indonesians, 48 per cent of Singaporeans and 40 per cent of Thais, flavour is also an important texture attribute for the majority of consumers. The report shows that having all natural ingredients is a priority for three in five Vietnamese consumers. Meanwhile, concerns about taste and health focus more on the absence of ingredients than the addition of them. No artificial colours rated as the most important health attribute for Indonesians (56 per cent), Malaysians (49 per cent) and Thais (45 per cent), while low salt and no artificial colours topped the list for Singaporeans (34 per cent). Filipinos rated fibre as the most important attribute of snacks (63 per cent). Along with Filipinos, Vietnamese are the most environmentally conscious consumers, with half of Filipino respondents saying that it is very important that snacks include ingredients that are organic and 40 per cent preferring local herbs. Close to half of Vietnamese consumers say sustainable sourcing is important. Consumers from Viet Nam, Indonesia, Malaysia, and Singapore rank enjoyment as the foremost reason for snacking, a view shared by majority of global respondents. Conversely, 74 per cent of consumers in the Philippines view snacks as a source of nutrition and nearly eight out of 10 Thai consumers snack to satisfy a craving. Southeast Asia is a key driver of growth for the global snack food industry, with snack food sales in Southeast Asia growing at a rate of 3.6 per cent year-on-year compared to 2 per cent globally. Spending is forecast to increase as Southeast Asia welcomes almost 300 million new consumers in the next decade; rising income levels and a burgeoning middle class population will fuel growth in the coming years. "Southeast Asia is the stage for future growth of snacking for two key reasons: increased consumption per capita and a growing middle class population," says Connie Cheng, head of Shopper Insights for Nielsen in Southeast Asia, North Asia and Pacific. "Localising product portfolios to appeal to the taste and health preferences of Southeast Asian consumers is critical for a successful growth strategy." On the whole, there are clearly two ends of the spectrum: impulse-driven snackers who try a variety of snacks to satisfy their craving and primarily consume snacks immediately after purchase, and purposeful and planned snackers. "For purposeful snackers, it is important to clearly state product features such as sustainable sourcing and fair trade. Conversely, getting products in high visibility areas, particularly in front-of-store locations, is key to cornering the impulse-driven snack market," Cheng said. HCM City to host packaging, processing, rubber expos Vietnam Exhibition and Advertising and its partners from Taiwan and Hong Kong are organising three exhibitions in HCM City related to printing and packaging, food processing, and rubber and plastics in the next few weeks. The Vietnam International Printing and Packaging and VinaFoodTech expos from October 22-25 will see 350 stalls set up by 230 companies from Taiwan, Japan, India, Malaysia, Viet Nam, China and others at the Saigon Exhibition and Convention centre in District 7. The four-day 2014 Vietnam Plastics and Rubber Industry expo will open on November 5 at the same venue with 220 companies from Australia, Saudi Arabia, China, India, Korea, Myanmar, and several other countries. David Yang, director of Taiwan's Chan Chao Vietnam, one of the organisers of the events, said they would be platforms for approaching target customers and establishing business ties, while strengthening Viet Nam's position as a production and distribution hub for related industries in ASEAN. Car sales leap 65pct y-o-y in September: car assoc. Car sales in Vietnam last month rose around 65 percent over the same period last year, said the Vietnam Automobile Manufacturers' Association (VAMA) in its monthly report. VAMA's report, covering sales of SUVs, passenger cars and commercial vehicles manufactured by 21 member companies, shows that sales for the entire local automotive industry in September reached 16,149 units, up 29 percent compared to August and 65 percent compared to the same period last year. This is the 18th consecutive month that automobile sales in Vietnam have grown over the same period in the previous year. Sales in the first nine months of 2014 jumped 34 percent from the same period last year to 90,108 units, VAMA said in its monthly report. Car sales in September reached 10,511 units, up 30 percent compared to August, while truck sales reached 5,638 units, up 25 percent. The production of locally-assembled cars reached 11,323 units, up 16 percent from the previous month, while the number of imported vehicles, or completely built units (CBU), stood at 4,917 units, up 73 percent. Total automobile sales in Vietnam over the first nine months of the year reached 106,710 units, up 39 percent compared to the same period in 2013, while sales of cars reached 67,930 units, up 40 percent, and truck sales reached 38,780 units, up 36 percent. By the end of September, sales of locally assembled vehicles had risen 30 percent compared to the same period last year to 79,754 units, while the sales of imported vehicles rose 30 percent year-on-year to 26,955 units. With car sales continually increasing in the first nine months of this year, VAMA has raised its sales forecast in 2014 to 145,000 units, up 15,000 units from the previously forecast 130,000 units. This is the third time this year VAMA has raised its forecast, the most times in the last three years. VAMA raised its outlook to 125,000 units from 120,000 units in March, and to 130,000 units in July. With these latest figures, automobile sales in 2014 will increase 32 percent compared with 2013. Regarding sales of vehicle manufactured by VAMA members, the number of units sold reached 12,940, up 53 percent compared to the same month last year. In total, since the beginning of the year, VAMA members have sold 90,108 vehicles, up 34 percent compared to the same period last year. Among VAMA members, Truong Hai Automobile Co. (Thaco), specializing in assembling trucks, buses and sedans, continues to lead in the number of cars sold, with 4,195 vehicles moved, accounting for a market share of over 32 percent. In the first nine months of the year, Thaco sold 28,701 vehicles, up almost 30 percent over the same period last year, reaching the sales target of over 35,000 vehicles it set earlier this year. Toyota Vietnam ranked second by selling 3,747 vehicles in September, bringing total sales in the first nine months to 27,774 vehicles. Third place went to Ford Vietnam with 1,390 vehicles sold in September, and 9,248 vehicles sold since the beginning of the year. FDI enterprises reduce, cut losses in HCMC According to the Ho Chi Minh City Department of Taxation, state budget revenue sources increased most from Foreign Direct Investment (FDI) sector in Ho Chi Minh City in the first nine months this year, thanks to a reduction in the number of enterprises declaring loss. Besides strong export growth, loss reduction and cut by FDI enterprises was considerably improved compared to the same period in previous years. This year, the department has inspected large companies in garment and textile and footwear fields, especially those regularly declare loss. As a result of, in the first nine months, the department inspected 11,999 businesses, collected taxes and issued penalties totaling VND3,281 billion and reduced VND6,101 billion loss. Several textile and garment and footwear companies declaring losses for many consecutive years have declared profit. In the first nine months, the tax department collected VND120,913 billion, accounting for 79.8 percent of the year’s estimates and increasing 10.7 percent over the same period last year. Of these, revenue collected from state business sector reached VND17,556 billion, up 1.3 percent. It hiked 9.8 percent from the private sector. FDI sector generated VND27,436 billion, accounting for 80.3 percent of 2014 estimates and up 27.3 percent from a year ago. All 24 districts in the city fulfilled their budget collection plans for the last several years thanks to an increase in land use fee. This year, HCMC budget revenue source is expected to exceed 3.5 percent as compared with its plan for domestic revenue predicting to hit VND158,900 billion. German, Vietnamese firms to present construction technology in seminar Schueco, a German-based provider of system solutions for building façades, and TID Façade, a leading brand in the field of design consultancy are bringing Hanoi’s architects together for an action-packed “Architect Seminar” on October 17. At the event, speakers from Schueco will present the company’s innovations, technology and processes for building façades as well as the potential they hold for Vietnamese building projects. In addition, participants will be given a preview of the premium new boutique showroom developed jointly by TID Façade and Schueco. Upon opening in 2015, the showroom will give local and international architects the opportunity to learn about Schueco’s leading system solutions (as fabricated by TID), helping to inform and inspire their designs. Schueco, established in Germany in 1951, specialises in system solutions for doors, windows and building envelopes. The firm is now present in 78 countries and employs 4,800 people. It earned revenue of €1.5 billion ($1.91 billion) in 2013. TID Façade Joint Stock Company is one of the four member companies of TID Joint Stock Company, which was established in 1995 and specialises in design consultancy, professional construction of large curtain wall systems, full dimension glass and heat resistant glass for tall buildings. MHB finances dairy cow breeding in Long An province Ho Chi Minh City-based Mekong Housing Bank (MHB) last week signed a preferential credit agreement worth VND100 billion ($4.7 million) to support dairy cow breeding according to associated model in the Mekong Delta province of Long An. Under the agreement, participating enterprises have to sign associated contracts on food processing and output consumption while farmers need to sign associated production and product sale contracts with enterprises. At the same time, the bank also deployed a VND1 trillion ($47.6 million) credit line package belonging to MHB’s VND13 trillion ($619 million) project for agriculture and infrastructure development in the Mekong Delta region granted for enterprises in Long An province. Real estate buy-out deals continue to find favour Despite facing many technical obstacles, foreign and domestic investors have pounced on good-value investment opportunities presented by ailing companies. Despite inadequate legal regulations, foreign firms haven’t been put off buying assets In the third quarter of 2014, a majority of transactions were reported in Ho Chi Minh City. Japan’s Creed Group  caught the headlines after buying into a range of projects of Nam Bay Bay Investment Joint Stock company (NBB), starting from City Gate Towers with the price of more than $59 million, followed by the NBB Garden 2 and NBB Garden 3 buildings. Also in Ho Chi Minh City, Posco sold its Diamond Plaza to Lotte Shopping, while domestically-owned Tien Phuoc Corporation sold the Estella development to Singapore’s Keppel Land. Japan-based Daibiru Corporation, an office developer also announced its buy out of the Conerstone Building in Hanoi for more than $60 million. Conerstone was built by VIB Ngo Gia Tu, a joint venture between the Vietnam International Bank and Ngo Gia Tu Company. According to Real Capital Analytics, a global data provider on property transactions, 15 transactions were reported per year on average during 2011 to 2013. It is estimated that the average value per transaction reached more than $35 million. During this period, most outstanding transactions reported were Metro Cash and Carry ($877 million), Vincom Centre A ($314 million) and Hanoi Daewoo Hotel ($114 million). Figures from CBRE Vietnam revealed that domestic players dominated overall, but Korean firms were active in both selling and buying, with a range of names such as Kumho Asiana, Daewoo, Lotte and CJ while Singapore firms proved active buyers with through Keppel Land, Mappletree,  and CapitaLand. Among foreign players, Korea, Singapore and Japan led the buyer group while Korea and Hong Kong were largely sellers. Despite the legal reforms, buyouts by foreign firms still remain overly complicated. Neil MacGregor, managing director of Savills Vietnam, commented that the primary barrier to foreign investors was a lack of stocks and legal procedures. “What typically happens is when they start looking for those operating assets, they realise that it’s challenging and there are not that many assets available and then they move in for development,” MacGregor said. Another challenge in finding available land is clearly defining who has legal ownership and clear titles to the land, a vital issue that foreign investors need to resolve, MacGregor advised. Japan, Singapore and Hong Kong investors are among the most avid property hunters, he added. According to the Foreign Investment Agency under the Ministry of Planning and Investment, the real estate sector still ranked second in terms of overall FDI attraction in Vietnam in the first 9 months of 2014 with 27 new and extended projects licensed worth $1.2 billion. Vietnam Association of Female Entrepreneurs to be established The Vietnam Association of Female Entrepreneurs is set to be launched on October 18, said Ho Thi Kim Thoa, deputy minister of Industry and Trade. At an October 11 press conference to introduce the new body, Thoa said the establishing congress of the association is expected to draw the participation of 500 delegates. They will all be outstanding female entrepreneurs from across Vietnam.   President Truong Tan Sang met with Vietnamese businesswomen in 2013. The association aims to boost the capacity and role of businesswomen, offer a venue to share experiences and improve professional knowledge. It will also protect the legitimate interests of female entrepreneurs and business people. Thoa added that the association will also act as a bridge between the community of businesswomen and the government and relevant agencies. At the press conference on October 11, Ha Thi Thu Thanh, chairman of Hanoi’s Female Entrepreneur Association, cited statistics from the Vietnam Chamber of Commerce and Industry which say that over the past 14 years, since the Vietnamese Law on Enterprises took effect, 20% of Vietnamese businesses are managed by women. To date, more than 40 clubs of female entrepresnurs have been established nationwide, but only the Hanoi association has legal status. The Hanoi’s Female Entrepreneur Association has 218 members, 90% of which are the leaders of private firms. Four industry expos open under same roof Thai firm Reed Tradex on October 9 opened three exhibitions, namely METALEX Vietnam 2014, NEPCON Vietnam 2014 and Industrial Components and Subcontracting Vietnam 2014, while the Japan External Trade Organization (JETRO) in HCMC also kicked off the expo Business Alliance for Supporting Industry 2014. These events are now taking place at the Saigon Exhibition and Convention Center (SECC) in HCMC’s District 7 until Saturday. As many as 700 local and foreign enterprises are showcasing their latest technologies in metalworking, surface mount technology (SMT) and the making of high-quality industrial parts and components at the three exhibitions organized by Reed Tradex. The venue is the convergent point for such world-famous brands as ABB, Amada, DKSH, Hexagon, Metrology, Ito Group, Keyence, Nihon Superior, OTC, Sumitomo, Saitama, Sinfonia, SIP, Soco, Thaisarco, THK, and Tostem. There are also nine pavilions from Germany, Japan, Korea, Malaysia, Singapore, Taiwan, Thailand, and Vietnam. Duangdej Yuaikwar, country director of Reed Tradex in Vietnam, said there are 104 Japanese and Vietnamese firms joining Business Alliance for Supporting Industry in different categories including mold, casting and forging, metal processing, and heat and surface treatment. Meanwhile, 14 other companies led by Tokyo Metropolitan Government with superior products and high technologies are also exhibiting in the Tokyo pavilion at METALEX Vietnam. Visitors will have a chance to engage in a host of activities in the three-day events, especially the spintop battle Koma Taisen held in HCMC for the first time as part of METALEX Vietnam. As many as 16 teams will compete in the spintop battle scheduled for this Saturday from 1 p.m. to 4 p.m. at the Meeting Room in the Exhibition Hall. The winner from this competition will take part in World Champion Sekai Koma Taisen 2015 in the Japanese city of Yokohama on February 15 next year. The competition aims to promote prosperity of the manufacturing industry. Many small companies do not have opportunities to manufacture their own products because they normally act as subcontractors for large technology firms only. Koma Taisen motivates these small companies to create spintops to join the battle where they can show and promote high professional skills to the world. Floor service fees proposed for seaports A number of sea transport firms have proposed the Ministry of Transport set minimum service charges at seaports nationwide to stave off unhealthy competition. A representative of Lotus Port told at a webcast conference organized by the Ministry of Transport last week that the lowest container handling fee is the only cap to be applicable at ports. The lack of minimum port service fees has benefited foreign shipping lines and triggered unfair competition. On the same side, Nguyen Huu Sia, general director of Danang Port, suggested applying the floor charges at the seaport in the central coast city of Danang. Nhu Dinh Thien, general director of the Vietnam Ship Agents and Brokers Association (VISABA), said shipping lines have applied unreasonable fees at ports, thus forcing those local ports to discount the cargo containerizing fee. Deputy Minister of Transport Nguyen Van Cong said the Vietnam Maritime Administration is considering floor charges for ports in HCMC and Haiphong City. However, it may take time as fee data needs to be collected before approval from the Government and the National Assembly is sought. Earlier, the Ministry of Finance issued the floor charges for container lift at the Cai Mep-Thi Vai port complex in Ba Ria-Vung Tau Province, with US$46 on a full 20-foot container and an empty 20-foot one charged US$29. The charges for full and empty 40-foot containers and full and empty containers of over 40 feet are US$68, US$43, US$75 and US$48 respectively. As for containers of frozen or hazardous goods, and overloaded and oversized containers, ports and customers will negotiate to set the charges which should not be lower than the floor levels. Russian hi-tech firms find Vietnamese partners A delegation comprising 23 Russian firms, mostly in hi-tech industry, met Vietnamese firms at the Vietnam-Russia Business Forum in HCMC last week to explore business opportunities. Maxim Golilok, Russia’s chief trade representative in Vietnam, told the forum held by the Vietnam Chamber of Commerce and Industry (VCCI) that Russian firms wanted to find partners in fields such as research and development of new material, biotechnology, radio components, healthcare, space, oil and gas, and finance. The delegation members included SAG Ltd. producing spaceships and light aircraft, private-firm Etalon JSC making telecommunication products, and the Fund for Venture Investment Development Assistance for Small Science and Technology Enterprises of St. Petersburg. Phan Minh Tan, director of the HCMC Department of Science and Technology, said Russian companies are encouraged to invest in the hi-tech sector in the city. According to VCCI, Russian companies registered total investment capital of around US$2 billion for projects in Vietnam in the first half of this year while Vietnamese enterprises pledged some US$2.5 billion for oil and gas, real estate, apparel and footwear projects in Russia in the period. Two-way trade between the two countries last year rose by 13% year-on-year to nearly US$2.8 billion, including US$2 billion of exports from Vietnam, and reached US$1.8 billion in the first nine months of this year. However, Vo Tan Thanh, director of VCCI in HCMC, said bilateral trade had yet to match potential. The two nations are working toward signing a free trade agreement between Vietnam and the Customs Union of Russia, Belarus and Kazakhstan. Once signed, this pact is expected to help Vietnam and Russia boost two-way trade to US$7 billion next year and US$10 billion in 2020. Aleksei Evgenhevich Likhachev, Russia’s Deputy Minister of Economic Development, described Vietnam as a springboard for Russian companies to further penetrate into Asia Pacific. Better business climate pledged The government of HCMC will do all what it can to create favorable conditions for investors to do business, said Tat Thanh Cang, vice chairman of the city. Speaking at a function held on Saturday to mark the 10th anniversary of the Vietnam Businesspeople Day and honor the city’s outstanding businessmen, Cang said businesspeople had contributed significantly to the city’s growth and development. Nguyen Xuan Han, chairman and general director of Phu Nhuan Service Joint Stock Company (Maseco) and one of the city’s outstanding entrepreneurs, told the Daily policymakers had acted to support businesses at a time of hardship. However, he noted, more administrative reforms would be needed to make doing business easier. Regarding the role of entrepreneurs, Tran Ngoc Tuoi, director of Vinh Thuan Company Limited, said businesses are responsible not only for their development but also for society. Ten out of the city’s 100 outstanding entrepreneurs also got certificates of merit from the Vietnam Chamber of Commerce and Industry. Oversupply hits rubber prices Natural rubber prices will continue staying low in the next two years as supply has exceeded demand. Vietnam and other countries with large rubber outputs such as Thailand, Indonesia and Malaysia have expanded areas under rubber cultivation to cash in on a price surge in previous years, according to the Vietnam Rubber Association (VRA). Tran Thi Thuy Hoa, secretary general of VRA, said the local rubber growing area was earlier expected to reach 800,000 hectares in 2020 as indicated in the Prime Minister’s Decision 124. In reality, the total area had reached 955,000 hectares by the end of 2013. In 2005-2011, the steady rise in rubber prices prompted many countries to expand rubber farms worldwide by 1.44 million hectares. The total area under rubber cultivation had risen to some 12.5 million by end-2013, with total output of 12.04 million tons, while total demand was around 11.4 million tons. The amount in excess estimated at 1.4 million tons during the 2011-2013 period has piled pressure on rubber prices. VRA forecast the market demand for rubber will continue to grow. However, the association recommended businesses reduce production in this period of time to stabilize rubber prices. Vietnam, Thailand, Malaysia, Indonesia and India will sit down together in the coming weeks to discuss measures to check rubber supply, as well as to stop prices from falling further, Hoa said. Rubber prices in the Central Highlands and Southeast regions last week were VND22,000 per kilogram for SVR10 and VND27,100 for RSS3, down VND200 per kilogram compared to September 30. According to the Ministry of Agriculture and Rural Development, Vietnam exported 705,000 tons of rubber worth US$1.25 billion in January-September, down 2.4% in volume and nearly 22% in value year-on-year. The export price of rubber in the last eight months averaged out at US$1,800 per ton, falling over 24% compared to the same period last year. ASP issues 14.5 million shares via private placement An Pha Petroleum Group (ASP) has announced to issue 14.5 million shares via private placement to two investors, or 98.9% of the volume put up for sale. Individual investor Dinh Ngoc Hai bought nearly 1.2 million shares to hold a 3.13% stake while Saisan Joint Stock Company purchased over 13.3 million shares to raise its ownership from 20.4% to 48.2%. ASP raised VND145 billion from the issue as there was no issuance cost. According to a statement sent to the Hochiminh Stock Exchange, the Japanese firm now holds nearly 18 million ASP shares. ASP shareholders at an earlier annual general meeting approved a plan to issue 14.67 million shares via private placement at VND10,000 each. Most of the shares would be offered to the Japanese partner. Closing last Friday’s session, ASP moved sideways at VND8,300 a share with over 400,000 shares changing hands. Mercedes-Benz Vietnam embarks on truck business Mercedes-Benz Vietnam (MBV) has begun a foray into truck business by launching the FUSO brand in Vietnam under a new organization and brand identity after its success in the luxury passenger car segment. Mercedes-Benz has become the exclusive importer, manufacturer and distributor of all FUSO products in the Vietnam market. FUSO is an 80-year-old-plus brand. Mitsubishi Fuso Truck and Bus Corporation (MFTBC) in Japan, one of Asia’s commercial vehicle manufacturers, is an integral part of Daimler Trucks Asia (DTA). In July 2014, MBV became the exclusive importer, manufacturer and distributor of FUSO trucks on the local market. “I am convinced of the immense business potential in the years ahead for Vietnam. With nearly 20 years of experience and achievement in passenger car business, MBV has every reason to secure the success for the FUSO brand. MFTBC will cooperate and support MBV to get a higher position in this competitive market,” said Dr. Albert Kirchmann, MFTBC President & CEO and Head of DTA. Michael Behrens, CEO of MBV, said, “Truck business is an opportunity for us. We now join the race and face many competitive truck brands as a market challenger, at the same time we make our business more sustainable and stable. Trucks will in future be the second pillar of our business at MBV, next to our established and renown passenger car business.” Formally known as Mitsubishi Fuso, the products entered the Vietnam market in1995 starting with four models in the light-duty-truck (LDT) segment with its “Canter”. Through the operation of MBV, the medium-duty-truck Fighter and the heavy-duty-truck Tractor are on offer to satisfy diversified customer demands. Japan SMEs eye Vietnam Many Japanese small and medium-sized enterprises (SMEs) were seeking partners and investment opportunities in Vietnam during the METALEX Vietnam 2014 exhibition in HCMC. Duangdej Yuaikwarmdee, deputy managing director of Thai firm Reed Tradex, the organizer of the exhibition at the Saigon Exhibition and Convention Center (SECC) in District 7 from October 9-11, last Friday said Japanese SMEs have expressed interest in investment in Vietnam, Indonesia and Thailand. However, Japanese companies are interested in two supporting industries – electronics and bike assembly – in Vietnam thanks to an improving investment environment, low labor cost, government incentives and political stability. After leading Korean electronic groups have pledged to make big investments in Vietnam, the nation is expected to strongly develop the electronics industry, Yuaikwarmdee said. Yuaikwarmdee also believed that Vietnam would take the lead in terms of electronic export value in the region within the next five years, attracting SMEs from Japan and other countries to come to supply parts for Korean producers. Vietnam also has a developed motorbike industry thanks to the presence of large Japanese firms, so the nation is expected to remain a destination for bike consumption and bike and bike parts exports, he added. For car assembly, Yuaikwarmdee said the localization ratio in production is still low. The nation may attract many more Japanese firms given better strategies and policies. Some 14 Japanese SMEs showcased advanced products and technologies at the METALEX Vietnam 2014 at the Tokyo pavilion. Atsushi Hisano, director of Bureau of Industrial and Labor Affairs of Tokyo Metropolitan Government, said it was the first time Tokyo had taken part in the exhibition. Many enterprises in Tokyo have plans to expand business in Vietnam and cooperation between both sides will contribute to economic development in the country, Hisano said. Reed Tradex opened three exhibitions, namely METALEX Vietnam 2014, NEPCON Vietnam 2014 and Industrial Components and Subcontracting Vietnam 2014 from October 9-11 while the Japan External Trade Organization (JETRO) in HCMC also kicked off the expo Business Alliance for Supporting Industry 2014. As many as 700 local and foreign enterprises showcased their latest technologies in metalworking, surface mount technology (SMT) and the making of high-quality industrial parts and components at the three exhibitions. There were 104 Japanese and Vietnamese firms joining Business Alliance for Supporting Industry in different categories including mold, casting and forging, metal processing, and heat and surface treatment. Fruit and veggies imports up 300% Vietnam imported over US$772 million worth of fruits and vegetables in January-August, a year-on-year jump of nearly 300%, according to the Industry and Trade Information Center under the Ministry of Industry and Trade. Thailand emerged as the largest supplier of fruits and veggies for Vietnam, with a total value of US$125.1 million, followed by China with US$83.8 million and Myanmar with US$42.1 million, which surged 167%, 92% and 755% respectively versus the same period last year. Those products of China entered the local market via Lao Cai, Huu Nghi and Tan Thanh border gates and Chua Ve Port in the northern region. The country also imported fruits and veggies worth US$6.6 million from New Zealand, US$4.4 million from South Africa, US$3.1 million from India, US$2.7 million from South Korea and US$1.9 million from Israel. The center’s statistics showed Vietnam’s export revenues from fruits and veggies reached more than US$1 billion in the first eight months of the year, up 47.4% from a year earlier. Meanwhile, the country imported vegetable oil worth US$459.4 million, rising 14.16% against the same period last year, with Malaysia as the largest supplier making up US$338.5 million. Sacombank, CPA Australia issue co-branded card Representatives of Saigon Thuong Tin Commercial Bank (Sacombank) and the Australian Society of Certified Practicing Accountants (CPA Australia) shake hands after signing an agreement on issuance of a co-branded card last week. The card includes gold and platinum versions to meet needs of staff, members and students of CPA Australia. Cardholders will receive preferential treatment in payment, shopping and cash withdrawal. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR