BUSINESS IN BRIEF 22/11 Korea, Hong Kong emerge as major investors Together with Singapore, South Korea and Hong Kong have taken the lead in foreign direct investment (FDI) in the country, replacing Japan as the biggest foreign investor over the years. According to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment, Korea since early this year has become the biggest investor among 56 countries and territories investing in Vietnam. Korea has pledged total newly-registered and extra capital of US$3.6 billion, or 26.3% of the total FDI approvals. Korean firms have focused on manufacturing and processing sectors, injecting over US$3 billion into 271 new projects and 106 existing projects, or 85% of their total registered capital in Vietnam. Huge projects of major firms such as Samsung and LG have attracted other Korean parts suppliers into the country. In addition, other groups in the fields of trade, service and production such as Lotte, CGV, CJ and Kumho have repeatedly expanded business operations in the local market. For instance, Lotte has plans to develop a nationwide network of 60 stores by 2020. It has also cooperated with Japanese investors to build a 10-hectare smart complex in HCMC with a total investment of US$2 billion. Other Korean retailers such as E-Mart and Shinsegae are seeking opportunities to open distribution systems in Vietnam. The projects are expected to spur the development of supporting products and services, industry insiders said. Meanwhile, a report of FIA shows a strong rise in FDI capital from Hong Kong. Between January and October, Vietnam saw 103 newly-established and expanded projects of Hong Kong’s firms with total registered capital of over US$1.67 billion. Hong Kong has surpassed Japan to rank third in FDI, focusing on dyeing, textile and real estate sectors. For dyeing and textile, large companies such as Huafu, Texhong and TAL have strongly developed business in the country in anticipation of enjoying a zero export tariff in the U.S. market. The U.S. is the biggest market of Vietnam among the countries participating in the Trans-Pacific Partnership (TPP). Meanwhile, Vietnam’s real estate market has become attractive again given clear signs of recovery. Sun Wah, Warburg Pincus Fund and Texhong have strongly disbursed into the sector. With total registered capital of US$1.66 billion, Japan ranked fourth after Korea, Singapore and Hong Kong for FDI during the period. As Japanese enterprises shifted to supporting industries, their projects have reported small capital scales. From January to October, manufacturing and processing remained the most attractive to foreign investors with 636 projects. The combined newly-registered and supplemental capital was US$9.7 billion, making up 70.8% of total FDI capital into Vietnam. Real estate ranked second with US$1.22 billion, or 8.9%, followed by construction with over US$1 billion, or 7.5% of the total. Vietnam hosts largest German networking event The 14th Asia-Pacific Conference of German Business (APK) starts on November 20 in HCMC, attracting hundreds of German businesses from Germany and Asia-Pacific region, as well as high-ranking officials. This is the first time Vietnam hosts the largest German business networking event that has been organized biannually in Asia since 1986. At the 14th APK, held from November 20 to 22, more than 700 decision makers will analyze current political and economic trends in Asia and power shifts. In a written announcement released by the German Embassy in Hanoi, German Vice-Chancellor and Minister of Economic Affairs and Energy Sigmar Gabriel is quoted as saying that the conference would bring about great opportunities to foster economic relations between Germany and Vietnam, and the region as a whole. The Asia-Pacific region with strong growth is becoming more and more important to German enterprises. Besides big economies in East Asia, ten ASEAN countries are playing a more important role in economic and politic issues, especially Vietnam as a major partner of Germany in the region, said the minister who is paying a visit to Vietnam on November 18-22. The conference aims at taking a close look at the Asian countries' development strategies, future-oriented sectors, innovative business ideas and consumer demands. It addresses the role of the political context for successful investments. It is increasingly important to German businesses to understand how trends develop in Asia which already accounts for roughly 30% of the world’s GDP and 60% of the world's population. The conference is graced by Prime Minister Nguyen Tan Dung, ministers from Cambodia, Laos, Malaysia, the Philippines, and Vietnam, the ASEAN Secretary General, and other regional dignitaries. PEB Steel opens fifth plant PEB Steel Buildings Co., Ltd has recently put into operation its fifth plant at Dong Xuyen Industrial Park in Ba Ria-Vung Tau Province and celebrated the 20th anniversary of its presence in Vietnam. The new facility helps increase the production capacity of PEB Steel to 120,000 tons per year, double the capacity of the four previous plants. The opening of the fifth factory aims to meet the increasing demand of customers and fulfill orders on time when there are more foreign investors choosing Vietnam to set up shop. In addition to expanding the capacity, PEB Steel has embraced new technologies in the past 20 years to improve production efficiency like the application of the advanced galvanized frame (PEBHybrid) to shorten the fabrication period and lengthen the life cycle of the project, the special insulation material (PEBInsul) combined with the ridge ventilation system (RV3.0) to keep temperatures inside six degrees Celsius lower than outside temperatures and create a ventilated environment. Prefabricated steel products of PEB Steel designed and made at its five plants at Dong Xuyen Industrial Park and two plants in India and Bangladesh are exported to ASEAN countries and others like Japan, Qatar, Pakistan, Australia and Papua New Guinea. Customs warns of Chinese goods with Vietnam origin There are local businesses importing goods from China for packaging and then exporting them to other countries, a practice which is being exploited to secure Vietnam’s certificates of origin (C/O) for preferential tariffs. This business practice affects domestic production. Nguyen Huu Nghiep, deputy head of the HCMC Customs Department, on November 19 expressed concern while answering questions about certification of origin of goods at a conference with businesses. According to him, the customs agency has had to work with delegations from the United States Department of Commerce to verify the origin of goods. These teams have visited export processing zones for inspection. Many local firms have imported semi-finished or finished products from China and completed packaging in Vietnam to get Form D of the C/O to enjoy preferential tariffs, he explained. Nghiep considered the action as a threat to the economy because the U.S will impose import tariffs on Vietnamese goods indiscriminately. “The certifying agency has to determine the content of goods carefully to protect local production. Vietnam now has a huge trade surplus with the U.S., so we have to respect rules,” he said. The customs will inspect the origin of goods when the revised Customs Law comes into effect. Phan Binh Tuy, deputy head of supervision and management at the city’s customs department, said the issuance of certificates of origin is managed by the Ministry of Industry and Trade. Under the current trade agreements to which Vietnam is a signatory, simple outsourcing such as packaging and separation are denied certification of origin. Urban consumer confidence declines further The third quarter of this year saw confidence declining among urban consumers, which was driven by lower income groups with monthly income per capita below VND3 million, according to a report of Kantar Worldpanel Vietnam. The report pointed out that the Purchasing Confidence went back to the year-ago level last year at 7.4 points after a half year stabilizing at 8.1 points, as consumers in the country were still tightening their spending on the fast moving consumer goods (FMCG). Although the purchasing power and the willingness to buy improved during the last quarter, the real purchase sub-index faced a decline as consumers’ expenditure has been tightened on FMCG. According to a survey of the market research firm in four major cities Hanoi, HCMC, Danang and Can Tho, 51% of urban consumers stated that they anticipate their financial situation would improve in the next 12 months, and only 3% thought it would get worse. However, only 15% believed they had no financial worries when asked about their current condition, while another 22% admitted they were facing some constraint. Kantar Worldpanel’s record in the last quarter said 47% of urban families had significantly cut down on their FMCG spending. The Purchasing Confidence is an indicator designed by Kantar Worldpanel to measure consumer confidence regarding their purchasing, with three components: purchasing capability, willingness to buy and real purchase. Information security awareness enhanced The ratio of enterprises and organizations having staff take care of their information security has increased from 62% last year to 73% this year, said a report of the Vietnam Information Security Association (VNISA). This year, 39% of State agencies have set up offices tasked with information security compared to the rate of 31% of last year, according to the report announced at a meeting on the occasion of Vietnam’s information security day of November 19. To make the report, the VNISA branch in the South conducted a survey among 400 organizations and enterprises. It found that more enterprises have deployed security solutions such as digital certificate and signature, and one-time authentication, while many enterprises have approached international security standards. Trinh Ngoc Minh, deputy head of VNISA branch in the South, said the number of enterprises interested in information technology outsourcing services has increased. However, the information security systems of enterprises in general need a long way to reach the standard security level while some firms are having difficulty investing in their information security systems. VNISA also predicted a higher demand for mobile devices and cloud computing services in the coming time. Enterprises will have to get used to working and securing information on mobile devices and data saved on the cloud. Many enterprises have worked on mobile devices but still hesitate about cloud computing services, it said. Nguyen Minh Hong, deputy minister of Information and Communications, said the State paid greater care to information security in terms of legal procedures. Some works have been done including the establishment of Authority of Information Security under the information-communication ministry, Internet Security Department of the Ministry of Public Security, and the establishment of National Electronic Authentication Center (NEAC). Kumho Asiana eye Tan Van-Nhon Trach road project President Park Sam Koo of South Korean Kumho Asiana Group showed keen interest in a project to develop Tan Van-Nhon Trach road section during a meeting on Tuesday with Minister of Transport Dinh La Thang. According to the transport ministry, the road section, also known as package No. 2 of Belt Road No.3 of HCMC, will be developed under the build-operate-transfer (BOT) format. The ministry is finalizing investment procedures and bidding documents for choosing investors for the project. The ministry would organize bidding rounds to select capable investors, or ask for the Prime Minister’s approval if only one investor wants to join the project, said Thang. Tan Van-Nhon Trach section with a length of 17.8 kilometers is the first phase of Belt Road No.3 project. The section consists of two packages including a US$200-million package (1A) with a length of 8.7 kilometers funded by the Export-Import Bank of Korea and the remaining one (1B) of 9.1 kilometers projected to be developed by private investors in the BOT format. According to Cuu Long Corporation for Investment Development and Project Management of Infrastructure, the section runs from the intersection at Dong Nai’s Ben Luc-Long Thanh Expressway to the Tan Van-My Phuoc intersection in Binh Duong, with a total length of 34.2 km, including the main section of 28.4km and an approach section of 5.88 km connecting it with HCMC’s Thu Duc Intersection. In the first phase, a section of 17.8 km from Nhon Trach to Thu Duc Intersection will be constructed with four main lanes and two sideways in parallel, and is expected to cost US$430 million. Exporters told to respect copyright A representative of the United States Patent and Trademark on November 19 warned local businesses about copyright issues when exporting goods stateside, as many exporters in Asia and South America are now facing penalties for such violations. When using an unauthorized version, users do not pay for software, helping them cut costs and product prices, which gives way to unfair competition, according to Peter N. Fowler, Regional Intellectual Property Attache for Southeast Asia of the U.S. Embassy in Bangkok. Therefore, this infringes both intellectual property rights and unfair competition law, he said at a conference on Unfair Competition Enforcement (UCE). Such infringement can be found in various sectors, from seafood processing and tire manufacturing to electrical appliances, textiles and aviation. Recently, China-based Guangdong Canbo Electrical Appliance was fined up to US$250,000, and a tire manufacturing firm in Thailand had to pay US$750,000 after being sued for using pirated design software, the expert said. Fowler noted Vietnamese exporters should pay attention to the copyright issue because local businesses are not acquainted with using copyrighted software. Those using subcontractors should give this factor more consideration. Businesses can save a little when using pirated software. However, it will take more than the amount saved to pay penalties, he said, adding the gain is just a fraction of the value of a shipment to the U.S. but the images of violating exporters will be tainted. According to Fowler, a smart businessman would eliminate the problem as soon as he realizes it, not solving it when it happens. He also advised businesses to ascertain the standards of fair competition requirements in the U.S. through the support of lawyers before penetrating the market. Warnings against residue of banned substance on tra fish The Europe Union (EU) and South Korea for the first time have warned of higher-than-allowed antibiotic residue on tra fish shipments from Vietnam. The EU’s Rapid Alert System for Food and Feed (RASFF) last month detected 11 batches of tra fish from the country with Nitrofurazone, a prohibited substance, according to the National Agro – Forestry – Fisheries Quality Assurance Department (NAFIQAD). In addition, South Korea’s National Fishery Products Quality Management Service (NFQS) said it would enhance inspections of substances in the Nitrofuran group on tra fish imported from Vietnam. Inspections will be applied on 3% of batches arriving there between November 5 and December 31 this year. This is the first time Vietnamese frozen tra fish being found with residue of a banned substance. In previous years, only frozen shrimp was found to have prohibited antibiotic residues such as Trifluralin and Ethoxyquin. At some point, Japan checked 100% of frozen shrimp batches from Vietnam. NAFIQAD has ordered local tra fish producers and processors to inspect and monitor fish farming to ensure farmers’ compliance regarding the use of chemicals and antibiotic substances as permitted by the Ministry of Agriculture and Rural Development. On the other hand, companies must control antibiotic residues, especially Nitrofuran and Chloramphenicol, during their manufacturing processes. In a related development, NAFIQAD has stopped checking Triphosphates in fried fish and surimi, Polyphosphates in tra fish and basa fish fillet and frozen shrimp. Meanwhile, Trifluraline inspection in seafood is reduced to one per 20 batches. C.bank governor’s words ease forex market The exchange rate between Vietnam’s currency dong and the U.S. dollar on November 19 eased off the previous day’s volatility after the central bank governor pledged to keep the exchange rate steady. Having almost hit the ceiling on Tuesday, the exchange rate was revised down by VND20 to VND21,400 at Vietcombank on November 19. Eximbank in the morning sold the greenback at VND21,400 per dollar, down VND15 against the previous day, before raising it by VND10 at the end of the day. Techcombank maintained the selling price of the dollar at VND21,420. On previous days, many banks sold the dollar at VND21,420, which was near the upper limit of VND21,458 regulated by the State Bank of Vietnam. However, the dollar continued strengthening against the dong on the unofficial market on November 19, at VND21,430 for buying and VND21,460 for selling. According to the central bank, speculation about an exchange rate adjustment has caused the greenback to rise. In addition, some banks have been increasing dollar purchases to reverse their negative foreign currency positions. Foreign currency supply remains high while there is no huge demand. From January to October, the nation had a trade surplus of US$2.36 billion and the total balance of payments ran a surplus of over US$11 billion. Banks have net bought foreign currencies from customers while all demands for foreign currency have been fully met, the central bank said. HCM City’s customs nearly meets tax target The HCMC Department of Customs had collected VND74.3 trillion in taxes for the State budget as of November 12, meeting 99.3% of the VND74.8 trillion target set by authorities. Speaking to the Daily, a customs official said the city’s imports this year stood at a high level, equal to that of last year, thus generating big import duty revenues. The strong import volume also indicates that business is going well in the city. In addition, the process of debt collections was also conducted smoothly. As of November 15, the amount earned from tax debts and fines totaled VND819.5 billion, accounting for 86% of the VND952.8 billion target.    The amount of newly-arising debt is small as enterprises from July 1 last year had to pay tax before completing customs clearance procedures. Indovina Bank introduces IVB-VISA credit card Marking the 24th anniversary of its establishment, Indovina Bank (IVB) is scheduled on November 21 to issue IVB-VISA credit card as part of a plan to expand its services to domestic individual and corporate clients. This credit card is made based on innovative technologies Payment Card Industry Security Standard (PCI DSS) and 3D-secure service. The first technology requires issuing banks to keep customer data confidential as regulated by the VISA card organization while the latter enhances security for clients to make online payments as it requires cardholders to enter a one-time password for each transaction. IVB will exempt customers from service fee in the first year of card usage. In addition, the first 200 early birds will be given VND1 million when they make a successful transaction and the bank will also refund VND100,000 per transaction to those using the IVB-VISA card to pay for goods and services. This promotion program starts from November 21 this year to February 21 next year. Jan Yei Fong, general director of Indovina Bank, said the issuance of the IVB-VISA card is in line with the State Bank of Vietnam’s policy for encouraging the use of cards to pay for goods and services. When it was established in 1990, Indovina Bank, a joint venture between Vietnam Bank for Industry and Trade (VietinBank) and Taiwan’s Cathay United Bank, mainly offered services for foreign-invested enterprises at industrial parks and big cities in Vietnam. But now it is expanding its services toward local individual and corporate customers. German investors target Vietnamese market Vietnam is an attractive market for German investors as more than 500 businesses from the European country are seeking Vietnamese garment and footwear suppliers. On November 20, Germany’s TUV SUD Group and the Ho Chi Minh City Union of Business Associations (HUBA) signed a memorandum of understanding on further collaboration in many fields including electronics, medical equipment and food industry. TUV SUD, which specialises in quality testing, evaluation and certification, has supported Vietnam’s garment sector in ensuring its high-quality production and connecting local firms with those in the EU and the US in recent time. Germany is also implementing the “German House” project in Ho Chi Minh City and a series of trade and investment promotion activities are scheduled for next year when the two countries celebrate the 40 th anniversary of their diplomatic ties. Also on November 20, Germany’s NurnbergMesse in collaboration with the German Industry and Commerce in Vietnam (GIC) and the Vietnam Trade Promotion Agency (VTP) organised a press conference introducing the two countries’ potential and trade promotion via global trade fairs. Statistics from GIC show that, two-way trade between Vietnam and Germany reached 7.7 billion USD in 2013, up 18 percent compare to the previous year. More than 300 German businesses have been licensed to operate in Vietnam so far. According to VTP, Vietnam ’s exports to Germany earned 4.7 billion USD in 2013 and 3.3 billion USD in the first eight months of this year. The country’s staples in the German market are garments, footwear, coffee and seafood. Taiwan clears customs for 200 tons of Vietnam tea hit by dioxin rumor Nearly 200 tons of tea grown in the Central Highlands province of Lam Dong was able to clear customs in Taiwan on Thursday after being held for months over a dioxin contamination rumor, the Vietnam Tea Association (VITAS) announced the same day. The exported Oolong tea, worth hundreds of billions of dong (VND1 billion ~ $47,000), was not allowed to clear customs since September following an allegation from Taiwan that it was tainted with the highly toxic chemical dioxin. Dioxin is a small compound which was contained within the "Agent Orange" herbicide that the American military used to defoliate jungles during the war in Vietnam, and it is one of the most toxic compounds ever known, according to scientists. Hundreds of tea producing and trading companies in Lam Dong, including 30 Taiwanese firms, have been hurt by the rumor for months. The Lam Dong administration on Wednesday filed a dispatch saying tea grown in the province is dioxin-free, and its agricultural land is not contaminated either. Upon receiving the affirmation from the Lam Dong administration, the Taipei Economic and Cultural Office in Vietnam notified Taiwanese authorities, which in turn asked the port authorities, to clear customs for the Vietnamese-grown products, according to VITAS deputy chairman Doan Trong Phuong. “The exports had passed quarantine and pesticide residue tests earlier but the port authorities were hesitant to clear customs for them due to the rumor until receiving an official explanation from Vietnam,” Phuong said. On November 11, a Taiwanese news anchor said on his Facebook page that Vietnamese tea contains dioxin, according to Chinese-language newswire ETtoday. The news commentator added tens of thousands of tons of tea imported from Vietnam had been sealed at a Taiwanese port for investigation, and warned Taiwanese consumers not to use the product. The customs clearance, however, did not completely resolve the issue, according to VITAS. “The unfounded rumor must be silenced in Taiwan in order to protect the reputation of Vietnam’s Oolong tea,” the association said in a statement. The Lam Dong administration and Vietnamese industry insiders have demanded that Taiwanese authorities organize a press meeting in Taiwan to clarify the information. “If the media meeting is held, Lam Dong and Vietnamese tea businesses should send representatives to attend, and present all evidence available,” Phuong said. If the Taiwanese side refuses to organize the press meeting, VITAS will petition to relevant authorities to have it hosted, he added. The rumor was allegedly spread by Taiwan’s domestic tea makers as a method of unhealthy competition to tarnish the reputation of their counterparts in Vietnam, even including the Taiwanese firms, according to Han Wen Te, director of Fushen Co., a Taiwanese tea company based in Lam Dong. This is because Vietnamese-grown Oolong tea is imported to Taiwan at a price that is only one-fourth the domestic rate, he elaborated. Cocoa sector in search of fresh way forward The agricultural sector, companies, and researchers should do more research into the cocoa market, and utilise the by-products of the crop to develop the sector, a seminar heard in Ho Chi Minh City on November 19. Le Duc Thinh, Deputy Head of the Ministry of Agriculture and Rural Development's Department of Cooperative Economy and Rural Development, said not much research is done into cocoa and the industry lacks professional researchers. Most researchers in the field are from other sectors, he said, and much of their studies is impracticable, he told the seminar organised by the Cao Nguyen Xanh Joint Stock Company. They focus on particular problems to cope with short-term challenges related to production, improving quality, expanding cultivation area, and diseases, while basic research to achieve greater understanding of the fundamental aspects of the sector is lacking, he said. The Government has invested in research but that mainly focuses on seedling and farming techniques, and few studies are done on developing the domestic cocoa market, marketing strategies, or developing the value chain, he said. This should be changed, and the Government should collaborate with the private sector for such research and strengthen co-operation with international cocoa research organisations, he said. Nguyen Van Hoa, Deputy Director of the Department of Crop Production, said though cocoa trees were introduced to Vietnam in the 1950s, cocoa plantations did not prosper until 10 years ago. Since cocoa is still a relatively new crop in Vietnam, more research is needed to come up with better cultivation techniques to improve efficiency, he said. The area under the crop has increased from 2,000-3,000ha in 2003-04 to nearly 20,000ha now. Those areas applying proper farming techniques achieve very high yields, he said. Experts said the industry has new opportunities thanks to the growing global demand, which is expected to cause a shortage of one million tonnes by 2020. The seminar was held as part of the "Cooperation for enhancing sustainable cocoa development," a Vietnam-Netherlands public private partnership project for sustainable cocoa development, which aligns the public efforts with those by Rabobank Foundation, Mars Incorporated, Cargill and others. Italy to offer technical support to SMEs in Dong Nai Italy will provide technical support for small- and medium-sized enterprises (SMEs) in the southern province of Dong Nai in order to help them improve their competitiveness, said an Italian official. Italy, with strengths in furniture, footwear, garment, farm produce processing and mechanics, is willing to transfer technology to Vietnamese businesses, stated Ricardo Mattei, Director of the Development Cooperation Agency under the Italian Embassy in Vietnam during his November 20 working session with Vice Chairman of the provincial People’s Committee. The country has implemented a project to increase Vietnamese SMEs’ competitiveness through the establishment of a free business training centre, he added. Italy will provide Vietnam with 15 million EUR in soft loans and 200,000 EUR via the United Nations Industrial Development Organisation (UNIDO) to carry out technical support projects in Dong Nai and Binh Duong provinces and Ho Chi Minh City . At the working session, the province’s Vice Chairman said Italy’s projects are suitable for local SMEs’ development demand, stressing that Dong Nai wishes to cooperate with Italy in human resources training and technological transfer. PVN to offload 11 percent stake in PET The Vietnam Oil and Gas Group (PVN) has registered to sell about 7 million shares of the PetroVietnam General Services Joint Stock Corporation (PET). According to the group, the sale is part of its restructuring plan that has been approved by Prime Minister Nguyen Tan Dung, and is expected to be done via negotiations or a matching order in the local stock market between November 24 and December 23, this year. Currently, PVN holds 24.6 million shares or a 35.24 percent stake in PET. After the sale of shares, the group will still have 17.6 million shares or a 24.25 percent stake. PET, based in HCM City, is a member company of PVN that has great potential in the development, trading and distribution of the group's oil and gas products, as well as related services and real estate, said a representative of the group. In the first nine months of this year, the corporation gained a net profit of 143 billion VND (6.7 million USD), an increase of 7.5 percent over the same period last year. On November 19, PET's shares closed at 24,400 VND (1.15 USD) each in HCM stock exchange. Dong Nai coffee growers enjoy higher output, prices Robusta coffee prices in the southern province of Dong Nai remaine high during the harvest season, which began this month, according to the local Department of Agriculture and Rural Development. This year’s bumper crops did not drag down prices as last year. Prices for coffee beans traded at orchards are now around 40,000-41,000 VND (1.88-1.93 USD) per kg, up by 2,000 VND per kg compared to last week. Gieng Hoa Quang, a coffee grower in Thanh Binh commune, Trang Bom district said his orchard’s output rose from 600–700kg per hectare last year to 1.2–1.3 tonnes per hectare this year, adding that his family earned 40 million VND (1,879 USD) in revenue per hectare. However, in spite of increased coffee prices and outputs, growers are still struggling due to higher production costs, particularly for fertilisers and pesticides. Fertilisers cost nearly half the revenue, he noted. Dong Nai province has more than 20,000 hectares of coffee areas, mainly in Xuan Loc, Cam My, and Trang Bom districts and Long Khanh town. In recent years, provincial authorities have provided funds to facilitate the applicaton of higher-yielding varieties and advanced technology in cultivation as well as encouraged large-scale production and better linkages between production and distribution. This move has helped local growers improve coffee quality and output. Most notably, orchards of the TR4 coffee variety in Tan Phu district recorded a yield of nearly 5 tonnes per hectare, three times higher than that of local varieties. Bac Giang seeks lychee consumption market Chairman of the People’s Committee of northern Bac Giang province asked relevant authorities to actively examine lychee export markets in a bid to minimise the reliance on China, the province’s traditional market. Accordingly, the province will promote lychee production in line with current development plans and quality standards to ensure food safety and meet the demand of traditional and new markets. In addition, by 2015 a 100-hectare lychee cultivation area will comply with the Global Good Agricultural Practices (GlobalGAP), expecting an output of 500-600 tonnes at the Hong Xuan cooperative in Hong Giang commune in Luc Ngan district. The province expects to have 150 hectares and 170 hectares of lychee cultivation certified as GlobalGAP crops by 2016 and 2017, respectively. It also encourages enterprises to connect with producers in order to expand cultivation areas with a view to exporting to new markets. It also pledged to expand the total cultivation area to 9,500 hectares with a capacity of 47,000-57,000 tonnes. Furthermore, Bac Giang’s lychee is registered for protection in the US, Japan, the Republic of Korea (RoK), the EU, Russia, Israel, Singapore and many other countries. The province is running a number of trade promotion campaigns in potential markets. Vietnam, Thailand cooperate on e-commerce application A workshop focussing on fostering cooperation between Vietnam and Thailand in applying e-commerce in trade promotion was held in Ho Chi Minh City on November 20. According to Do Kim Lang, Deputy Head of the Department of Trade Promotion (DTP), the Vietnamese website buyvietnam.com.vn, which counts over 300 businesses amongst its members, brings a number of benefits to domestic businesses, helping them introduce their products and investment projects. Lang said in order to meet the increasing demand for the application of IT and e-commerce to promoting trade, seeking partners and expanding markets, his agency teamed up with the ASEAN-Japan Centre (AJC) to launch this website. The DTP also seeks to establish partnerships with foreign trade promotion organisations with the aim of creating more business and investment opportunities for enterprises. The links between “buyvietnam.com.vn” and “Thaitrade.com” of Thailand are considered a great opportunity for the two countries’ business circles to forge partnerships, Lang said. Suwipan Thisyamondol, Deputy Head of Thailand’s Department of International Trade Promotion (DITP) highlighted that the “Thaitrade.com” website was one of the most effective measures to boost Thailand’s trade and integration efforts by applying modern technologies. He added that all firms participating in the website were prestigious businesses, so they would be reliable partners for Vietnamese companies. On the occasion, the DPT and DITP signed a cooperation agreement on fostering trade promotion between the two countries in order to benefit businesses on both sides in the near future. Jetstar Pacific to launch Hanoi-Bangkok air route The low-cost carrier Jetstar Pacific has announced its plan to introduce a new round-trip service between Hanoi and the Thai capital of Bangkok with a flight a day as from March 29 next year. Accordingly, the daily flight using Airbus 320 departs from Hanoi at 12:25 while the return one leaves Bangkok at 15:35. Ticket for the new route is on sale from November 20 at its website and ticket offices across the country. This is the second route linking Vietnam and Thailand opened by Jetstar Pacific. Previously, the carrier inaugurated its service between Ho Chi Minh City and Bangkok, which will officially operate on December 10. VietGap standards help promote sustainable aquaculture Representatives from agencies, associations and businesses and farmers in aquaculture have gathered in the Mekong Delta province of Soc Trang for a workshop on the application of VietGap standards in the sector’s sustainable development. During the workshop on November 19, participants discussed advantages and difficulties for the sector, including environment and the application of the Vietnamese Good Agriculture Practice (VietGap) standards in intensive shrimp farming, while seeking ways to connect the Vietnamese Good Agriculture Practice (VietGap) standards with other clean production international models, such as ASC (Aquaculture Stewardship Council), GlobalGAP, BAP. President of the Vietnam Fisheries Society Nguyen Viet Thang said the event helped figure out the similarity and correlation of sets of standards to ensure sustainable development for aquaculture with focus on food safety and hygiene. According to the Department of Aquaculture, the country’s total aquatic products hit more than 6 million tonnes in 2013, a year-on-year increase of over 2 percent, making a substantial contribution to the country’s export. The sector targets to have 30 percent of aquafarming establishments receiving VietGap certificates by 2015. The figure is expected to rise to 80 percent by 2020. Can Tho port needs more infrastructure investment Can Tho port, located in the heart of the Mekong Delta, is in need of significant investments in infrastructure, a network of international-standard warehouses and logistics services that connect it to other ports in the region. Located within a 200km-radius of all the Mekong Delta localities, the port is ideally suited for cargo transported by land or waterway. It is also strategically linked with container ports in Ho Chi Minh City, the southern province of Ba Ria–Vung Tau and Phnom Penh in Cambodia, which are also within a 300km distance. However, the port can currently only process 5,000DWT vessels and the volume of cargo reached a meagre 1.5 million tonnes last year, partly due to poor road infrastructure, making it harder for cargo to access the port, especially from industrial zones and manufacturing areas. Inter-provincial roads between Can Tho and Kien Giang, An Giang, and Soc Trang are narrow with only two lanes, which are seriously hindering transportation to Can Tho port. Currently, most exporters take their products to the ports in Ho Chi Minh City and Ba Ria-Vung Tau via road or river barges, pushing up transport fees and putting pressure on the National Highway 1A and inland waterways via the Cho Gao canal in Tien Giang province. Inland waterways are quite promising in the Mekong Delta, but regional localities must fine-tune their policies and offer support for the firms involved, Transport Minister Dinh La Thang told lawmakers in a question-and-answer session in Hanoi on November 18. The ministry will accelerate dredging in Dinh An estuary and launch a transport route via Quan Chanh Bo canal in order to tap into the advantages of Can Tho port, which comprises of Hoang Dieu and Cai Cui ports, he said. From 2014-2015, priority will be given to developing modern container unloading and shipping services in Cai Cui port, making it easier to connect to Phnom Penh port and Cai Mep port in Ba Ria-Vung Tau, a representative from Can Tho port company said. Nguyen Phong Quang, standing deputy head of the Steering Committee for the South-Western Region, suggested the ministry review a master plan on inland waterways in the Mekong Delta. Supervision over bivalve mollusc processors intensified Inspectors are examining all facilities processing bivalve mollusc products for export to European Union (EU) countries from November 24 to early December, the National Agriculture-Forestry-Fisheries Quality Assurance Department (NAFIQAD) announced on November 20. The move is prompted by the EU’s detection of violations of food safety regulations for the products during the September 9-18 fact-finding tour by a delegation of the Food and Veterinary Office under the EU Commission’s Directorate General for Health and Consumers. The mission found that Vietnamese blanched noble scallop (Mimachlamys Nobilis) flesh had not been heat-treated in accordance with EU standards before being exported to EU markets. Meanwhile, processed noble scallops and ark clams (Anadara Subcrenata) shipped to the EU were found to originate from areas contaminated with lipophilic toxins. Following the finding, the Ministry of Agriculture and Rural Development on November 17 requested the NAFIQAD and processors tightly monitor the processing process and re-train workers and quality managers in order to promptly fix violations found by EU inspectors. The NAFIQAD was also asked to increase supervision over processing facilities and decline to award export certificates to those that fail to meet EU requirements, NAFIQAD Director Nguyen Nhu Tiep said. According to Jean-Jacques Bouflet, Minister Counsellor and head of the Trade and Economic Section of the EU Delegation to Vietnam, the EU has yet to take any sanction measures against Vietnamese bivalve mollusc products in response to Vietnamese relevant agencies’ endeavours to address the problem. He stressed that exporting companies must still stringently obey the EU’s current requirements though some may no longer be suitable for the reality. After NAFIQAD completes their examinations, local bivalve mollusc processors will be re-checked by EU officials. The processors are given six months to remedy their shortcomings and prove operations in line with EU standards. In September, 2014, the NAFIQAD ordered a temporary suspension of the export of the offending products. There are 47 Vietnamese businesses exporting bivalve mollusc to the EU at present, it said. Investment law revision aims to draw more FDI The National Assembly will pass the revised Investment Law this month. The new law aims to improve the business climate in Viet Nam by creating a clear, open and transparent environment for investors. The Viet Nam Chamber of Commerce and Industry (VCCI) and Dien dan Doanh nghiep (Business Forum) organised a meeting on how the revised law would affect foreign direct investment yesterday in Ha Noi. Deputy director of the Ministry of Planning and Investment's Legal Department Quach Ngoc Tuan said that regulations on prohibited and conditional businesses were some of the most important contents of the revised law. The regulations strictly follow the Constitution adopted last year, which sets out the principle that people have the right to do business in sectors that are not explicitly prohibited by law. According to the draft submitted to the National Assembly at the eighth session of the 13th National Assembly, there are six prohibited business sectors, as well as 272 conditional sectors whose acceptance will be based on the results from 51 prohibited businesses and 386 conditional businesses in accordance with existing law. The list is currently being updated. The revised law will also provide clear regulations for economic organisations that use foreign investment capital, Tuan added. Nguyen Van Phung from the Tax Policy Department said there would be changes to corporate tax policy. Specifically, enterprises would not have to register materials consumption with tax agencies. Additionally, there would be 10 to 20 per cent tax reductions for new investment projects, as well as exemptions from taxes on personal income, import and export and expanding investment. FDI accounts for 22-25 per cent of total investment capital and is increasing. The country's FDI disbursement capital reached $11.5 billion last year and this year's target is $12.5 billion, according to the Foreign Investment Agency under the Ministry of Planning and investment. The 10 leading FDI partners of Viet Nam are Japan, Korea, Singapore, Taiwan, the UK, Hong Kong, the US, Malaysia, China and Thailand. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR