BUSINESS IN BRIEF 26/10 Vietnam, Finland target expanded agro-fisheries trade The Vietnam Chamber of Commerce and Industry (VCCI) in collaboration with its counterpart in Finland on October 23 launched a project aiming to boost mutually beneficial agro-fisheries cooperation. Nguyen Tuan Hai, Deputy Head VCCI’s International Relations Department, said the project aims to enhance the capacity for local seafood enterprises and bolster trade and investment ties between Vietnam and the entire Northern European region. The major activities of the project focus on improved marketing and advertising efforts and stepping up the number of exchanges in hopes of creating more opportunities for businesses to close deals. The project backed by the Finnish Embassy will concentrate its endeavours in HCM City, Hanoi and the Mekong Delta provinces. Finnish Ambassador to Vietnam Kimmo Lahadevirta said Finland and Vietnam have strengths which complement each other and there is ample opportunity for increased cooperation in water resources, environmental sanitation, forestry, innovations, and support for business start-ups. In the short-term, Finland is seeking cooperative opportunities to help ensure sustainable development, generate jobs and reduce poverty in Vietnam. At present, some 75 Finnish businesses are investing in Vietnam and the two-way trade volume averages more than EUR200 million per year, Ambassador Lahadevirta said. Vietnamese key exports to the Finish market are clothing, footwear and fish fillets while the Finnish major exports to Vietnam are hi-tech products like machinery, electronics and modern consumer equipment. The Ambassador expressed his hope that the Vietnam-EU Free Trade pact expected to come into effect in the near future will contribute greatly to increasing trade and investment between the two nations. Adventurous expats flock to Viet Nam Viet Nam ranks second among expats' most favourite destinations in Asia for challenge-seeking, according to a study released by HSBC on Wednesday. The Expat Explorer survey polled almost 9,300 expats from over 100 countries through an online questionnaire in April and May. Thirty one per cent of respondents said they moved abroad because they wanted to have new challenges. The region that most attracts these challenge-seeking expats is Asia, with 44 per cent of respondents living there citing it as a key driver. Two-thirds of expats in Japan, 52 per cent in Taiwan, and the same rate in Viet Nam said that was one of the main reasons for moving, and the desire for a challenge outranks all other reasons. Those heading to Asia often come from western countries suggesting that the different cultures, languages, and opportunities available make for an interesting challenge. US nationals make up 42 and 35 per of expats in Japan and Taiwan respectively. Britons account for 27 and 25 per cent in Malaysia and Viet Nam. Around two-thirds of expats said they associate Thailand and Viet Nam with a higher quality of life (69 and 62 per cent respectively). Many of them (72 and 75 per cent) also commented on the comparatively higher levels of disposable incomes. Around two-thirds of those in Thailand and Viet Nam associate their host country as being a culturally interesting place to live, compared to the global average of 47 per cent. Local cuisine is also a standout part of life in Viet Nam, with 87 per cent saying they enjoy the country's fare compared to 72 per cent globally. VN sees $1.4b trade surplus with Australia Viet Nam experienced a trade surplus of about US$1.4 billion in the past nine months with Australia, thereby making it Viet Nam's largest export market in the Oceania region. Vietnam Economic News quoted the Ministry of Industry and Trade as saying that the value of the country's exports to Australia posted a 24.5-per cent year-on-year increase to $3 billion, with major export items including crude oil, mobile phones and components as well as seafood. Other products recorded strong growth rates included steel and iron, electrical wires and cables, transport vehicles and components, pepper, metals and metallic products, and textiles and garments. The Australian market has been providing foreign businesses, including Vietnamese, with numerous opportunities because of its significant dependence on imports for its industrial production and domestic consumption, according to the Vietnamese Commercial Office in Australia. The market also has a high demand for imports where Viet Nam had the advantage, including apparel and footwear, as well as wood products, seafood and cashew nuts. In spite of its great potential, Australia remains a challenging market to foreign suppliers, with Australian importers imposing strict product quality and delivery requirements and expecting lower-priced goods. To facilitate Vietnamese exports to the market, the office has conducted a number of export promotion activities. In early August, it organised a trip for some Australian seafood businesses, who visited Viet Nam to explore aquaculture conditions and sign co-operation contracts. Last September, businesses from southern Ca Mau Province received enough support to enable them to participate in Fine Food Australia, the largest annual food industry exhibition in Australia. Later this year, a delegation of 10 Vietnamese textile and garments businesses are expected to take part in the Australian International Sourcing Fair, the only dedicated sourcing trade fair in the country. This is expected to create a business platform connecting international manufacturers with Australian brands and buyers across fashion and textile product categories. Lasting from November 18 to 20, the event will be a good opportunity for Vietnamese businesses to introduce their major export products and increase their exports to this market. Tra sector asks for more support The Viet Nam Tra Fish Association has asked the Government to continue its export credit assistance policy and loosen up lending regulations to help the tra fish industry overcome difficulties. In a document sent to the Prime Minister this week, the association said it expected the Bank for Development of Viet Nam (BDV) to cut lending interest rates, reduce lending regulations in relation to mortgaged assets and extend the debt repayment periods of tra fish producers and exporters. The people's committees of several cities and provinces have likewise asked the BDV to expand the list of qualified borrowers under the Government's export credit assistance policy. Easier access to credit is expected to ease the challenges of businesses, especially those engaged in agriculture and located in isolated rural areas, thereby contributing to a rise in the living standards of rural residents and an increase in export turnover, the people's committees said. According to the association, the tra fish industry is facing major difficulties resulting from export market restrictions in the wake of a global economic downturn and high anti-dumping duties imposed by the United States on Vietnamese tra fish. The association said the domestic tra fish industry has benefited from the Government's export credit assistance policies in previous years, adding that tra fish producers and traders have so far been granted access to a significant amount of money from credit sources that enabled them to build processing plants and meet export contracts. Many tra fish exporters and producers are currently regular customers of their respective credit sources, it noted. The Government's export credit policy has helped to ensure the availability of credit sources that has enabled tra fish businesses to boost production and business performance, thereby helping to popularise the Vietnamese tra fish trademark in the global market. According to the association, Viet Nam is currently the world's leading tra fish exporter, with an annual export turnover of nearly US$2 billion. Currently, Vietnamese tra fish are exported to 149 countries and territories, with the European Union and the US, the two largest markets, accounting for nearly half of the exports. Industrial production climbs in October country's index of industrial production (IIP) in October rose by 4.6 per cent against last month, the General Statistics Office (GSO) estimated. The October results brought the index's rise in the first 10 months of the year to 6.9 per cent. The processing and manufacturing sector, which comprises 70 per cent of the country's total industrial output, achieved an encouraging 8.4 per cent growth. Most processing and manufacturing industries, except the cigarette industry, saw growth in the first 10 months of the year. Several manufacturing industries reported high growth, including electronics, computers and optical equipment with 33.2 per cent; engine vehicles with 23.1 per cent, leather products and footwear with 20.8 per cent; and fibre with 18.7 per cent. The highest consumption was also seen in the above industries, with the highest growth rates being in electronics, computers and optical equipment with 33.1 per cent; engine vehicles with 15.5 per cent; and leather products and footwear with 23.4 per cent. Experts also said that despite the 10-month growth, the nation's IIP remained equal to one-third of the growth seen a few years ago. They attributed this to low consumption and a high inventory index, which stood at 10.1 per cent and 10.9 per cent respectively. Minister of Industry and Trade Vu Huy Hoang has forecast that the industrial production will continue to increase towards the end of the year, thanks to the rising demand for imported raw materials and equipment for domestic production. Items of textiles and garments, footwear and electronic items and components have so far had stable export contracts, and the import demand for the products are also continuously rising, Hoang said. However, Hoang added that businesses should prepare to face new challenges that might arise in the last months of the year, such as political instability in some export markets, rising trade barriers and low global economic recovery. FPT revenue reaches $1.1b in first nine months FPT Group's revenue in the first nine months reached VND24 trillion (US$1.14 billion), an increase of 21 per cent compared to the same period last year and over 8 per cent of the group's annual target, according to the group. The increase in revenue has been attributed to the growth in software exports, telecommunications and retail. Pre-tax revenue reached VND1.83 trillion ($86.2million), 0.7 per cent lower than last year. Net profit reached VND1.54 trillion (US$72.5million), up 1 per cent. Foreign markets continue to drive sales and profits thanks to the group's expansion efforts and M&A strategy. EU steps up VN dragon fruit inspections The National Agro-Forestry-Fisheres Quality Assurance Department (Nafiqad) has announced plans to increase inspections of dragon fruit following an EU regulation on imported food products. The EU has increased inspections of Vietnamese dragon fruit by 20 per cent to analyse the use of plant protection chemicals since October 1. Nafiqad has asked municipal and provincial agriculture and rural development departments, the Viet Nam Fruit and Vegetable Association and the Viet Nam Chamber of Commerce and Industry to instruct relevant individuals and organisations to implement the regulation. Vietnam Italy Steel sales rise with help of modern approach Vietnam Italy Steel Co (VIS) reported that net sales in the third quarter topped VND897 billion (US$42.5 million), a rise of 36 per cent year-on-year, while net profit was nearly VND4 billion ($190,000). The company implemented new technology, reducing production costs. Its performance improved substantially compared with a loss of VND36 billion ($1.7 million) in the same period of last year. By the end of September, total sales reached VND2.684 trillion, up 12 per cent year-on-year, and net profits were VND15.8 billion ($749,000), about 78 per cent of the yearly target. Chinese investor raises stake in Vietnam Investment Securities Co Xiang Qing Song, chairman of China's Zhejiang 001 Group Co Ltd, bought another 196,700 shares of Vietnam Investment Securities Co (IVS) yesterday, thus raising his stake in the brokerage company from 4.58 to 5.8 per cent and becoming IVS's largest shareholder. IVS said Zhejiang 001 Group was planning to raise its stake in IVS to over 3 million shares. Zhejiang 001 Group, founded in 1988, specialises in manufacturing and exporting TV antenna, drawing boards and other products. Binh Minh Plastic shareholders to receive 10% cash dividends Binh Minh Plastic Co (BMP) plans to spend VND45.4 billion (US$2.15) to pay shareholders 10 per cent cash dividends in the first phase of this year, which is expected in December. BMP plans to pay at least 20 per cent dividends in cash for 2014's business performance if total revenue reaches VND2.2 trillion ($104.3 million) and pre-tax profits hit VND500 billion ($23.7 million) by the end of this year. The firm has yet to release third-quarter business results. Soaring brokerage fees raise VNDirect profits by 90% July-September brokerage fees at VNDirect Securities Co (VND) soared 254 per cent on the year to nearly VND50 billion (US$2.37 million), the firm reported. Other sales also increased to VND48.8 billion ($2.3 million) and revenue from securities investment rose to VND14.7 billion ($697,000). However, sales cost climbed 960 per cent to VND29 billion ($1.4 million). Third-quarter revenue rose 122.4 per cent year-on-year to VND114.2 billion ($5.4 million) while net profits reached VND43.4 billion ($2 million), up 90 per cent. As of the end of September, net profit reached over VND121 billion ($5.7 million), up 118 per cent year-on-year. Dong Nai firms recovered quickly after riots Most enterprises in southern Dong Nai Province affected by the May riots sparked by China's placing its oil rig in the East Sea were able to resume business within a few weeks, and some expanded operations. Mai Van Nhon, deputy chief of Dong Nai Province's Industrial Zone Authority (DIZA), said most of the affected companies had received support from the provincial administration. More than 200 enterprises suffered damages, including property damage and theft, as well as delays in production, totalling VND376.8 billion (US$17.7 million). Of that number, about 80 businesses recovered on their own without help from the province, according to the provincial People's Committee. Nhon said a number of companies had stepped up production to make up for losses, with four companies increasing investment capital by a total of $217.5 million. They include Amico Ltd, Kang Yuan Vietnam Ltd, Da Luen Vietnam Ltd, and Hung Nghiep Formosa Ltd. Because of the disruption in business and damage to machinery, the Hung Nghiep Formosa Ltd Company suffered damages of VND103 billion ($4.84 million), followed by the Noroo Nanpao Ltd Company with a VND84.5 billion loss ($4 million). While Johnson Wood Joint-Stock Company suffered damages of VND62.86 billion ($2.95 million), Advanced Multitech Ltd Viet Nam lost a total of VND45.38 billion ($2.13 million). The Viet Nam Center Power Tech Ltd Company recorded a loss of VND26.17 billion ($1.23 million). Another company, Advanced Multitech, which has 2,000 workers, is recruiting more workers. "We need an additional 600 workers to meet production expansion," a representative of the company, who declined to be named, told Viet Nam News. Shen Hsin Yuan, vice director of Perfect Vision Company, a Taiwanese firm based in Long Thanh Industrial Park, was quoted by the Vietnam News Agency as saying that he was still confident about the investment environment in Dong Nai Province. "I hope the Government will continue to provide assistance to businesses," he said. Meanwhile, Imamura Tomofumi, chairman of the Japanese Business Association in Dong Nai, said 32 affected Japanese companies in the province had resumed work soon after the incident. Provincial aid As of the end of August, total tax refunds for 54 affected businesses had reached VND373.156 billion ($17.56 million), all of which have been disbursed. The Customs Department in Dong Nai Province has also simplified procedures for customs declaration for 34 of the affected businesses, and provided services during off-hours. In addition, the Finance Ministry has worked with the province to advance insurance compensation worth a total of VND37.6 billion ($1.77 million) for the affected businesses, and has urged insurance firms to assess losses and damages so that claims can be made. However, only three insurance companies, Bao Minh, PJICO and Cathay, have released information on compensation payments, according to DIZA. The province has also waived and reduced land rental prices worth a total of VND12.8 billion ($602,496) for 19 enterprises that suffered damages worth more than VND1 billion ($47,070) each. As for credit support, Techcombank Dong Nai has extended a loan-payment period to an additional three months for Center Power Tech (for a loan of $3.96 million) and has also provided a new loan of $349,400. The An Binh Commercial Bank branch in Dong Nai Province has given the Vietbo Joint-Stock Company an additional month to pay back its loan of $355,420. In addition, the State Bank of Viet Nam branch in Dong Nai Province has asked credit institutions and commercial banks in the province to consider giving foreign-currency loans to businesses so they can import machinery. Petitions The province has petitioned the Government to allow it to provide a total of VND100 billion ($4.7 million) in loans to affected enterprises, with 50 per cent of the interest to be funded by the province's budget. However, the province has yet to receive an answer from the Government, Nhon told Viet Nam News. The province has also asked the Finance Ministry to urge insurance companies to speed compensation payments to affected enterprises. Several companies received insurance compensation in advance, but it was only VND37.6 billion ($1.77 million), a small figure compared to the total damages of VND376.7 billion (17.73 million) suffered by the affected companies. Nhon said the procedures for insurance compensation were complicated and time-consuming because most of the businesses had lost documents in fires and could not show proof of damage. The province has also asked the Finance Ministry to offer guidance on how much to pay employees who lost work days during the riots. According to the province's People's Committee, the amount must not exceed 70 per cent of the salary paid by the companies. The money would be sourced from income taxes paid by the affected businesses. The riots occurred on May 13-14 in HCM City and in the southern provinces of Binh Duong and Dong Nai as well, as in Ha Tinh Province in the central region, after "aggressive elements" took advantage of peaceful marches against China's illegal placement of its Haiyang Shiyou oil-drilling rig in Vietnamese waters, according to local media. Building materials sector in need of revamp Viet Nam should apply advanced technologies in producing building materials to enhance their quality and designs, amid the inflow of imported products, urged experts at a Ha Noi workshop yesterday. The workshop, jointly held by the Association of Building Materials and the Ministry of Construction's Department of Science, Technology and Environment, aimed to implement efficiently the science and technology development strategy of the construction industry towards 2020 and vision for 2030. The workshop also sought opportunities to improve the levels of science and technology, develop new kinds of building materials and boost competitiveness of the Vietnamese building material producers for the sustainable development of the industry and protection of the environment, as well as the reduction of energy consumption. Experts pointed out that the application of advanced technology in the production of building materials remains limited in the country. Tran Dinh Thai, Deputy Director of the Department of Science, Technology and Environment, attributed this to the loose coordination between building material production firms and research institutes, and among relevant industries. Thai said that the sources of funds for research and development and technology innovations in building material production are limited and meet only a part of the demand. It is also difficult to raise capital for research and development as only large State-owned firms are willing to invest in them. In general, experts said that the level of science and technology in building material production in Viet Nam has failed to keep pace with the other countries in the region. Many products cannot compete with imported products in terms of design, quality and prices. "If Vietnamese building material production firms do not innovate designs, enhance quality and have competitive prices, they will certainly fail even in the domestic market," said Tran Van Huynh, president of the Association of Building Materials. Experts urged for a special mechanism to help research activities to develop new technologies for the building material industry. Viet Nam also must be open to advanced and modern technologies in the world, and boost international co-operation in this sector to enhance quality and reduce prices. Applying science and technology, which are regarded as stimulators for sustainable development of the Vietnamese building material industry, is critical for transforming the industry into a modern one of a level equal to the corresponding industries in the other countries of the region and the world by 2020. In addition, a sound and consistent strategy for the development of the building material industry is essential, and must be based on the market supply and demand and the country's mineral resources. The strategy must prevent the overspreading of investments in this sector, which will cause supply to exceed demand and have negative impact on the environment. Viet Nam should also pay attention to developing the mechanical industry to supply equipment for the production of building materials and avoid dependence on imported machines, experts said. Statistics of the building material association showed that the export turnover of the sector reached US$1.35 billion in 2013. Local firms attend high-tech agricultural fair in HCM City The third high-tech agriculture and food processing fair (Hi-Tech Agro 2014), HCM City's most important agricultural exhibition, opened yesterday at Le Van Tam Park in District 1. It features 340 booths set up by more than 200 high-tech agricultural and food processing companies from HCM City and 29 other provinces and cities. Products on display include farm produce, processed foods, ornamental fish and trees, seedlings, high-tech farming models, bio-products, plant protection products, fertilisers, post-harvest technologies, and semi-processed and processed products. A meeting to link the exhibitors from the south with distributors like Lotte Mart, Metro, Big C, Co.opExtra, and Aeon and wholesale markets in the city will be organised on the sidelines. There will also have seminars on the use of post-harvest technologies to improve the value of farm produce and processed foods and measures to improve the efficiency of farm-produce supply chains. The fair offers stakeholders an opportunity to find out about the latest scientific and technological advancements and sharpen the competitiveness of Vietnamese agricultural products, Pho Nam Phuong, director of the HCM City Investment and Trade Promotion Centre (ITPC), said. It seeks to promote Vietnamese brands and help attract more investment in agriculture and food processing and look for stable outlets for farm produce, she said. The fair, organised by the centre, ends on October 26. Packaging, food processing exhibitions open Two exhibitions, VNPrintpack and VNFoodtech, opened yesterday in HCM City with many top international companies showcasing their machinery and technologies. A total of 230 companies from Germany, Singapore, Korea, India, and Taiwan among others have put up 350 stalls to exhibit paper cutting, label printing, and food processing machinery and equipment. The event, organised by Vinexad and its partners from Hong Kong and Taiwan at the Saigon Exhibition and Convention Centre, District 7, will go on until Saturday. Singaporean SMEs look at regional markets A survey by International Enterprise (IE) Singapore revealed on Tuesday that 27 per cent of Singaporean small and medium-sized enterprises (SMEs) had business involvement in Viet Nam. In Southeast Asian markets, Malaysia topped the list with involvement by 64 per cent of Singaporean SMEs, followed by Indonesia with 44 per cent, Thailand with 35 per cent, Viet Nam with 27 per cent and the Philippines with 23 per cent. Among the 2,836 SMEs surveyed, 51 per cent said they earned revenue from foreign markets, up from 46 per cent last year. Clean businesses learn new tricks Twenty four innovative clean-tech startups went through Viet Nam's first-ever ‘Clean Tech Bootcamp' held to help small- and medium-size enterprises develop and bring to market innovative clean-energy and energy-efficiency solutions in the areas of transportation, agribusiness, and water management. The four-day programme of lectures and hands-on workshops gave their owners an opportunity to refine their product strategies, business models, and marketing pitches, sharpen their negotiating skills, and network with clean-tech entrepreneurs, investors, and peers. "To tackle climate change, we need to help train innovative and successful climate technology entrepreneurs," Dr Aiming Zhou, senior energy specialist at the Asian Development Bank, one of the organisers of the training, said. "A boot camp like this, which provides intense hands-on support to the most promising emerging climate technology businesses in Viet Nam, plays a critical part in making this happen." The initiative was developed by the World Bank's Climate Technology Programme in partnership with the ADB to accelerate the growth of new green businesses in the region and help reduce the threat posed by climate change. With the successful conclusion of the boot camp, the programme will continue to nurture and mentor these and other climate technology SMEs and startups through the Climate Innovation Centre. This upcoming business hub is designed to provide services like early-stage financing, technology commercialisation, business development, and capacity building support. Supported by the UK and Australia, the centre will deliver business advisory services and technology commercialisation funding to up to 65 climate technology entrepreneurs, including equity investments in 25 companies, in the first five years. Through this, the centre is expected to reduce or prevent the equivalent of the annual emissions of 47,000 passenger vehicles (225,000 metric tonnes of CO2 emissions), improve access to clean water, increase agricultural efficiency, and provide access to renewable or more efficient sources of energy. Overall, the centre will make one million people less vulnerable to climate change. Viet Nam is one of the five countries most vulnerable to climate change in the Asia-Pacific region. In the last 50 years sea levels have risen by 50cm, while extreme climate events (such as typhoons, floods, landslides, droughts, and saline intrusion) have cost the country 9,500 lives and approximately 1.5 per cent of GDP every year, according to World Bank Viet Nam. Source: VNS/VOV/VIR/dtinews