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BUSINESS IN BRIEF 7/4
Dollar appreciation hurts
The Vietnam Association of Seafood Exporters and
Processors (VASEP) has estimated that the country’s total seafood export
turnover in the first quarter reached US$1.27 billion, down 23 percent
compared to the same period in 2014.
That is the biggest drop in the past five years, VASEP
said.
The value of two major Vietnamese export items shrimp
and pangasius fell sharply in the first three months, with $348.6 million
(down 30 percent year on year) and nearly $225 million (down 18 percent year
on year), respectively.
According to VASEP, the local currency in many export
markets, especially in
As over 90 percent of Vietnamese seafood enterprises
choose the U.S. dollar as the currency for payments for their foreign
partners, the appreciation of the greenback against other currencies in
This has forced Vietnamese seafood exporters to lower
their prices so as not to lose their customers there.
"Vietnamese enterprises have no choice but to lower
their prices so that they can sell their goods easily, or stockpile their
shipments in warehouses, waiting for prices to rise,” Duong Ngoc Minh,
general director of Hung Vuong Co., told Tuoi Tre (Youth) newspaper.
“But fluctuations in exchange rates will last for many
months ahead, and the problem may not be resolved in the next few months,”
Minh said.
Hung Vuong is a big seafood processor and exporter based
in the Mekong Delta
The recent euro depreciation against the dollar has put
importers in
Tran Van Linh, general director of Thuan Phuoc Seafood
Co. in the central city of
But the picture has changed dramatically since the
beginning of 2015, with abundant supplies from other exporting countries such
as
As the goods exported from those countries have been
supported by weakened currencies, which are all floated, their prices are now
more competitive than those of Vietnamese seafood products, he said.
Along with the high anti-dumping duty rates the U.S.
Department of Commerce slapped on Vietnamese shrimp, local exporters have to
cut prices further if they want to sell their goods in the
"But if the prices are cut so sharply, Vietnamese
exporters will suffer losses and many have chosen to raise their inventories
so as not to sell at low prices,” Linh said.
The moves of foreign importers and local exporters,
consequently, have caused shrimp and fish prices to plummet, according to
VASEP.
Local aqua-farmers are in trouble as the price of their
produce has gone down so dramatically due to declining seafood exports.
From an annual volume of over 2,000 metric tons of
pangasius four years ago, farmer Nguyen Hoang Trung in Cao Lanh District in
the Mekong Delta province of Dong Thap has cut it by ten times to around 200
metric tons of the fish at the present time.
"While the price of the fish is uncertain, local
companies will only buy our products when the price is low, which will
severely affect our earnings,” he said.
With a price of VND24,000-24,500 per kilogram at the
start of this year, a farmer, like Trung, enjoyed a profit margin of
VND1,000-1,500 per kilogram.
But with the current price of VND23,000, it is a
break-even. And if that price drops further, farmers will incur losses.
"Local plants have said as export prices fell, they
cut the purchase price for my fish,” Trung said.
Trung is not alone because many catfish farmers in the
Mekong Delta are in the same situation. Shrimp farmers are also in the same
boat.
According to Tran Van Ngan in Dam Doi District in the
southernmost province of Ca Mau, the shrimp price has fallen around VND19,000
per kilogram, or roughly 20 percent, compared to that of earlier this year,
to about VND81,000 per kilogram.
But in comparison with the price in the middle of last
year, the current quote is a 40 percent drop,
With this price, competent farmers may get a break-even,
but poorer ones will suffer, he added.
Quang
The Prime Minister recently approved a project to
improve the environment at the Chu Lai Nui Thanh urban area in the Chu Lai
Open Economic Zone, Nui Thanh district of central Quang
In the short term, the project is set to build new local
wastewater treatment and drainage facilities and upgrade existing ones with
the aim to treat 80 percent of Chu Lai Nui Thanh’s wastewater by 2020 and
deal with floods.
The long-term goal is to make the Chu Lai Open Economic
Zone a multi-sector economic hub and turn Chu Lai Nui Thanh into a civilised
and modern urban area prioritising the development of industry and tourism
and commercial services.
The expected cost of the project is nearly 33.8 million
EUR (36.7 million USD), including 25 million EUR (27.2 million USD) sourced
from German official development assistance.
The southern business community launched the 2015 start-up
project competition in
According to Vu Kim Anh from the Centre of Business
Studies and Assistance (BSA), the competition offers potential candidates
chances to be sponsored by prestigious investors.
The management board also organised free training
courses on business planning for participants to enhance their knowledge and
capacity.
Winners of this year’s competition will pocket 30
million and 15 million VND (1,400 and 700 USD) for the first and second
prizes. The third and consolation prize winners will get 10 million and 5
million VND (466 and 233 USD), respectively.
Northwest region looks to optimise
potentials, attract investment
Utilising potential and advantages and attracting more
domestic and foreign economic resources are among targets set by the
northwestern region for its robust growth, announced the Steering Committee
for the Northwest Region during an investment promotion conference in Son La
Speaking at the event, Deputy Prime Minister Nguyen Xuan
Phuc, who heads the Committee, pointed out positive socio-economic changes in
the region recently, with GDP growth rate averaging around 9.5 percent and
per capita GDP reaching 24.7 million VND (1,160 USD) over the last five
years.
State budget collected nearly 26 trillion VND in 2014, a
rise of 30 percent over a year ago. Meanwhile, poverty rate lowered to 18.2
percent, he noted.
Administrative reforms have also been sped up to attract
and optimise investments and assistances, he said.
The northwestern region consists 12 mountainous and
midland localities of Yen Bai, Lao Cai, Dien Bien, Lai Chau, Son La, Phu Tho,
Ha Giang, Tuyen Quang, Bac Kan, Hoa Binh, Lang Son and Cao Bang, as well as
western districts of Thanh Hoa and Nghe An provinces.
The region, having a long border with
Director of the Ministry of Planning and Investment’s
Foreign Investment Agency Do Nhat Hoang said there were a few sizable foreign
direct investment (FDI) projects in the northwest. Currently, there were 106
FDI projects in operation, with a total registered capital of 1.73 billion
USD.
Deputy Minister of Planning and Investment Nguyen Van
Trung confirmed that the Government was making significant efforts to support
the region. Last year, about 15.5 trillion VND (738.10 million USD) from the
State budget, or 12.5 percent of the amount extracted for national
development, was reserved for the northwest.
In 2013, the Government also adopted a master plan for
socio-economic development of the northern mountainous area by 2020. The plan
set a GDP growth target of over 8 percent, and a GDP per capita goal of about
2,000 USD.
Deputy PM Nguyen Xuan Phuc urged the region to actively
improve the investment environment to secure both domestic and international
finances.
Well-developed infrastructure and human resources would
be vital for any development breakthroughs, and localities must collaborate
to achieve these general goals, he emphasised.
Steering Committee deputy head Truong Xuan Cu said the
region was now focused on calling for investments in mineral exploitation,
forest product processing, border gate economic activities, and tourism.
He said many provinces have joined hands in building
tours and this has helped them promote their advantages and the mountainous
villagers reduce poverty. Localities have also fostered links in education
and vocational training by connecting with universities.
In the northwest, Lao Cai attracted the most investment
capital with 875 million USD, closely followed by Hoa Binh with 435.4 million
USD, and Son La with 280 million USD, according to the MPI Foreign Investment
Agency.
The Son La conference attracted more than 500
participants, including policymakers, entrepreneurs, trade representatives
and diplomats.
On the occasion, commercial banks and investors signed
credit support contracts totaling 4.7 trillion VND (218.6 million USD) for 12
projects, mainly on mining, hydro-power generation, processing industry,
transportation and farm produce.
Budget collection jumps on economic recovery
The Finance Ministry said that macro-economic recovery,
together with administrative reforms, especially in tax payments from last
year, had helped boost budget collections.
The budget collection value during the first quarter
this year met 24.8 per cent of the annual target.
In March alone, budget collection was estimated to be
VND70.3 trillion ($3.32 billion).
The local budget revenue reached VND52.3 trillion ($2.47
billion) in March to boost the total local budget revenue to VND173.19
trillion ($8.19 billion) during the first quarter of this year, equivalent to
27 per cent of the year's target and rising by 19.6 per cent over the same
period last year.
According to the Ministry of Finance, recoveries in
production and business activities, coupled with easier access to tax
authorities from enterprises and online tax declarations had helped boost tax
collections.
In addition, taxation authorities had taken drastic
measures to intensify budget collection from the beginning of this year,
including regular checks of tax declarations, tightened management of value
added tax refunds and preventing smuggling and trade fraud.
The budget collected from crude oil was pegged at about
VND4.6 trillion ($217.7 million) in March and VND16.63 trillion ($787
million) during the first three months of this year.
Collection from import and export activities reached
VND35.4 trillion ($1.67 billion) during the quarter.
The Ministry of Finance had expected budget collections
to meet or even exceed the target this year, which was set at VND911.0
trillion ($43.12 billion).
Last year, State budget revenue had reached VND846.4
trillion ($40.05 billion).
More than 5,000 firms resume operations
More than 5,000 businesses became operational again in
the first quarter of this year, posting a 10 per cent year-on-year increase.
This showed that the economy had recovered and presented
investment and trading opportunities for firms in difficulty, the General
Statistics Office (GSO) said.
During the three-month period, Viet Nam saw over 19,000
newly-established enterprises starting business, with a total investment of
VND111.2 trillion (US$5.19 billion), up 4 per cent and 13.5 per cent in terms
of their count and registered capital, respectively.
GSO's data also revealed that in March, 5,238 new firms
were established, with a total registered capital of VND33.7 trillion ($1.57
billion), representing a 23 per cent year-on-year slump.
The reason for this was that the last month of the
quarter fell after the Tet holiday period, which did not see many new
business activities and was marked by low demand due to a high inventory, GSO
said.
The average registered capital for each company was
VND5.8 billion ($271 million) in March.
These businesses employed 265,000 labourers, 3.6 per
cent higher than the previous month.
The entertainment sector posted a higher growth in newly
registered capital with a 12 per cent increase; the property trading sector
grew 48 per cent and agro-forestry and fisheries reported a 36 per cent jump
in growth.
In the period, more than 16,000 businesses were either
dissolved or suspended operations, increasing 14 per cent from a year ago.
Most of the businesses were small-scale firms, with a
charter capital of less than VND10 billion ($467,000).
Of these, over 2,500 firms were completely dissolved,
reflecting a 0.6 per cent year-on-year decrease.
Can Tho firms need to compete
Policy makers and businesses gathered on Thursday in Can
Tho city for a seminar seeking solutions for raising competitive capacity of
businesses in the Cuu Long (
This is being done to prepare businesses in the region
for the global integration process.
Nguyen Thi Phuong Linh, general secretary of the
Business Association of Cuu Long (Mekong) Delta region, told participants
that businesses in the region needed to promptly update policies and trade
agreements that
Linh also warned that Vietnamese businesses needed to
enhance their internal resources, restructure their business, manage cash
flow, improve liquidity, as well as manage production costs.
On the other hand, businesses also needed to add more
value to their products, and work with other businesses to focus on
developing new products and seeking new markets, while improving design,
packaging and making more diversified products.
In addition, Linh proposed that relevant bodies in the
region should work towards bettering business climate and making business
information transparent and public.
Vo Hung Dung, director of the Can Tho-based Viet Nam
Chamber of Commerce and Industry (VCCI Can Tho), said as Viet Nam was going
to be a signatory of treaties, such as ASEAN + 1FTAs, the Regional
Comprehensive Economic Partnership (RCEP), the Trans-Pacific Partnership
(TPP), VCCI in Can Tho city had started programmes to help businesses in the
region train human resources, raise trade communication and introduce foreign
investors to local businesses.
In addition, VCCI Can Tho had also introduced local
investment projects to foreign investors and consulted with local businesses
to study and set strategic targets for their business performance.
VCCI Can Tho would also help local businesses adopt
measures to minimize production costs and improve product quality in
accordance with international standards.
According to VCCI Can Tho, the Cuu Long (
Businesses attributed the unsustainable raw material
supply and high prices to the difficulties encountered in selling their
products domestically. This was also a reason that some 1,932 businesses were
dissolved or had suspended their operations last year, which was 19.8 per
cent more than 2013.
Property market recovers but price fever
unlikely
The property market performed impressively in the first
quarter of this year, with figures showing that recovery returned after a
long freeze.
However, a price fever or "market bubble" is
not expected to occur due to several sources of supply, and because both
buyers and property developers have become more cautious after the 2007-08
bust.
The real estate market started warming up last year. In
the first quarter of this year, the recovery of the market was reflected in
the rising number of successful transactions, property start-ups and falling
inventory, together with easier credit.
The construction ministry's statistics showed that the
number of transactions in March and in the first quarter of this year rose a
whopping three times year-on-year.
The property inventory, as of March 20, fell by nearly
VND58 trillion (US$2.74 billion), compared to a year ago, to VND70.7 trillion
($3.34 billion). Outstanding loans as of the end of January rose by 4.8 per
cent over the end of last year to reach VND316.578 trillion ($14.98 billion).
The number of property start-ups in the first quarter of
this year also increased by 50 per cent year-on-year, showing improved
confidence and expectations for profits, the Agency for Business Registration
said. The property sector also ranked second in attracting foreign direct
investment (FDI), with $202.93 million being poured into the sector,
accounting for 11 per cent of the country's total FDI.
The government is speeding up the disbursement of the
VND30-trillion ($1.4 billion) credit package for the property market. The
construction ministry said as of February 25, about 20 per cent of the
package had been disbursed.
Although there was worry that market fever, as during
the 2007-08 period, might occur, given strong capital inflows due to the
return of speculators, several experts were optimistic about the realty
market's recovery and expected breakthroughs to occur in the following
quarters.
Director of An Gia Real Estate Investment and
Development Company Nguyen Trung Tin said the market was recovering, but was
not in a fever. The housing supply was moving to meet customers' demands and
buyers had several choices, while developers were seeking stable and
long-term growth, he said.
According to Director of Hung Thinh Land Nguyen Nam
Hien, the scars of the 2007-08 crisis would make both home-buyers and
property investors more cautious in transactions, which would contribute to
stabilising the market.
Sharing the same viewpoint, Deputy President of the HCM
City Real Estate Association Nguyen Van Duc said the prices of several
projects increased recently, but this was not evidence of speculation as
those were good projects that fit buyers' demands.
The market would gradually warm up this year, but
recovery did not mean that all projects would have a large number of
successful transactions, experts said, adding apartments with average prices
of about VND1 billion ($47,300) per unit would dominate the market.
In addition, the regulation that allows foreigners to
own houses in the country will help boost transactions in the medium and
high-end segments.
Stabilizing the macro-economy
The government’s monthly meeting for March reported that
in the first 3 months of this year,
Stabilizing the macro-economy remains a major priority
of the Vietnamese government.
The 6.03% GDP growth rate is attributed to the 100%
growth in the industry and construction sectors. Meanwhile, inflation in
March increased 0.15%, credit grew 1.25%, and social investment 9.1%,
compared to the same period last year.
Bank interest and foreign exchange rates were stable and
foreign currency reserve increased. State revenues and expenditures were
positive within projection.
The economy has some pending problems such as stagnated
production, slow growth in the service, agro-forestry, and fishery sectors,
and hot weather and drought in the coastal and southern regions affecting
agricultural production. Ministries, sectors, and localities will have
to promptly resolve current issues in order to reach socio-economic
development targets including a yearly GDP growth rate of 6.2%.
The government will concentrate on measures to stabilize
the macro-economy, in particular curbing inflation and budget overspending,
and reducing the import surplus while raising export revenues 10%. Reducing
obstacles to production and business, particularly in agriculture, is a
decisive factor for growth.
Prime Minister Nguyen Tan Dung said: “We have to work
together to boost agriculture. I urge ministries to assist agricultural
production and export. The government will chair a meeting to gather
recommendations and provide immediate support for farmers.”
Ministries and agencies were tasked with speeding up the
equitisation of 289 State-owned enterprises (SOEs) this year. The Prime
Minister said it is imperative to continue selling stakes in under-performing
SOEs and withdraw State capital from non-core business channels.
Reforming the banking system has been on the right track
under the government’s strict direction and monitoring.
The government has pushed measures to boost the export
of Vietnamese staples like rice, coffee, rubber, and minerals, while seeking
new export markets and tapping advantages in trade agreements, international
commitments, and the ASEAN Community.
Deputy Minister of Industry and Trade Tran Tuan Anh
said: “A series of free trade agreements have taken force. We will form the
ASEAN Community late this year and negotiations on the Trans-Pacific
Partnership, the EU-Vietnam Free Trade Agreement, and the Customs Union with
The government has asked the Ministry of Culture,
Sports, and Tourism to resolve obstacles to tourism and the Ministry of
Finance to adjust taxes to match
The Ministries will work together to build a technical
criteria system for import products, disburse resources, guarantee
social security targets, and secure the lives of national contributors and
ethnic minority people.
While local consumers and scientists are concerned about
the commercialization of genetically modified corn in
US-based DeKalb Genetics Corporation and Syngenta
DeKalb is a subsidiary of the world’s largest seed
provider Monsanto, whereas Syngenta
Monsanto is the company that produced Agent Orange, one
of 15 herbicides used by the
GM corn has been genetically modified to be resistant to
various herbicides and to express a protein from Bacillus thuringiensis that
kills certain insects, according to the U.S. National Corn Growers
Association.
DeKalb is scheduled to sell the GM corn seed to local
farms in the last quarter of this year, according to a company
representative.
In the meantime, Syngenta is slated to introduce the
first batch of GM corn seeds early this month before distributing them
countrywide, the company’s technical director said.
On April 2, DeKalb invited nearly 500 farmers in the
southeast Vietnamese region to its model crop of GM maize in the southern
Nguyen Hong Lam, who is selected to grow DeKalb GM corn,
said the productivity could be as high as 11 metric tons of dried corn per
hectare, comparable to that of the hybrid corn common to local farmers.
“But the advantage of the GM corn is that it requires
less weed killers and effort to take care of them,” the 64-year-old man
added.
Farmers have to spray insecticide on their hybrid corn
crops twice ten and 30 days after sowing, respectively.
“But you don’t have to use pesticide with the GM maize,
and only have to spray the weed killer once, 30 days into the crop,” Lam
said, adding this helps him save up to VND3 million (US$140) per hectare.
Nguyen Minh Tam, who came from the south-central
“I will use this new type of seed for my next crop if
prices are reasonable,” he said.
The GM maize in Dong Nai is among 100 such crops DeKalb
is piloting across Vietnam to calculate the added value the GMO brings to
farmers to determine the prices for its seeds.
DeKalb is expected to count 25 to 30% of the extra value
farmers gain from the GM corn into the seed prices, said the company’s
director of public relations Nguyen Hong Chinh.
The possible health risks GM food pose to humans are
still a debatable topic among scientists around the world.
But Nguyen Quoc Vong, a professor from
One of the biggest concerns for the commercialization of
GM corn in
“GM corn will soon entirely replace its hybrid
counterpart in the country thanks to its advantages,” he said. “
Once using GM seeds, farmers are not allowed to use any
type of weed killer other than those assigned by the seed providers,
otherwise the chemical will kill the crop as well, according to local
agriculture experts.
“It’s like they sell you beer and insist you drink it
with the food they choose,” the experts said.
Vuong, from the
“Any animal that eats GM food is considered a GM
animal,” he said, citing the U.S. Department of Agriculture.
“So will Vietnamese shrimp and catfish still be allowed
to enter
The popularity of tuna for sushi and sashimi – thinly
sliced raw meat or fish, like tuna or salmon – has caused global stocks of
tuna to decline and prices to soar.
The higher prices have created a critical shortage of
fresh tuna loins as raw material in the tuna industry, resulting in the
Seafood Processing Industry Association of the EU calling for a 0% percent
tariff on loins in a bid to boost its supply.
More acutely, the shortage has spilled over and created
an elevated demand for canned tuna as the EU tuna fishing fleets opt to sell
their catch in higher price markets like
The European Fish Processors Association (AICPE-CEP)
recently issued a press release in
According to the Vietnam Association of Seafood
Exporters and Processors (VASEP), in the two months leading up to March,
exports of tuna loins for processing in the EU jumped 11.8% on-year to$15.7
million.
In addition, exports of canned tuna for the period, the
main product that
In descending order–
The EU tuna processing industry in Spain, France, Italy
and Portugal are the major canned tuna producers in the EU the VASEP said,
adding that they rely heavily on imports of raw materialand this trend is
forecast to continue throughout 2015.
VASAP has also predicted that 2015 will be a good
year for tuna exports on the back of the formation of the ASEAN Economic
community (AEC) later this year and other free trade agreements that are
poised to come into effect.
As these agreements are realised, Vietnamese businesses
in the tuna industry will have more opportunities to enter global markets.
It cites the case of Sustainable Seafood Limited
Company, which has set its goal to realise over US$12 million in sales by
shipping 1,200 metric tonnes of tuna overseas in 2015, which would be up 20%
in volume and 30% in value compared to 2014.
Previously, the company principally exported products to
the
The
As opportunities are available, Vietnamese businesses
need to establish solid supply chain links with fishermen to improve tuna
quality so that the industry can generate US$600 million in 2015 as targeted
VASEP reported.
VASEP did caution, however that there is a risk that if
the euro continues to depreciate, tuna consumption in the EU might decrease,
causing canned tuna imports to decline.
On balance all this adds up to potentially very good
news for Vietnamese seafood exporters that have been struggling with
international competition and quality issues for the past several years and
it could well be an omen of good things to come.
Vietnam forges stronger ties with Latin
America
Vietnam’s combined imports and exports with the 33
countries comprising the Latin American market shot up 40.7% on-year to hit
US$9.5 billion in three months leading up to April.
According to the latest statistics released by Vietnam
Customs, the nation’s overall exports and imports to the Latin American
market surged 36.8% and 44.9% on-year to US$4.7 billion and US$4.8 billion,
respectively.
The three key markets of
Vietnam’s exports to Mexico alone for the three-month
period maintained strong growth jumping 18% on-year to US$272 million while
imports were US$88 million, resulting in a trade surplus of US$184 million.
Key export items included seafood, footwear, garments,
electronic goods and spare parts, while
Conference boosts investment in northwestern region
Managers, scientists and businesses compared notes on
policies to improve the investment climate in the northwestern region at
an investment promotion conference opened in Moc Chau district, Son La
province on April 4.
More than VND 500 billion have been donated from dozens
of donors to support the northwest social welfare system. Banks have
committed credit support worth 4.7 trillion dong.
Deputy Head of the Steering Committee for the
Northwestern Region, Truong Xuan Cu, praised businesses efforts to support
the poor: “The northwest must rely on investors to develop through incentive
policies. More communications should be carried out to advocate for business
support in balancing profit seeking and sharing the difficulties of local
people in economic development.”
Earlier, Deputy Prime Minister Nguyen Xuan Phuc announced
the Prime Minister’s decision to develop Moc Chau national tourism area. This
is a legal foundation to promote local geographical advantages, resources and
human development.
State Bank of Vietnam (SBV) Governor granted a gift
worth VND127 billion for the northwest’s social welfare banking system.
Phuc urged the region to actively improve the investment
environment to secure both domestic and international finances.
He pointed out positive socio-economic changes in the
region recently, with GDP growth rate averaging around 9.5% and per capita
GDP reaching VND24.7 million over the last five years.
The northwestern region consists 12 mountainous and
midland localities of Yen Bai, Lao Cai, Dien Bien, Lai Chau, Son La, Phu Tho,
Ha Giang, Tuyen Quang, Bac Kan, Hoa Binh, Lang Son and Cao Bang, as well as
western districts of Thanh Hoa and Nghe An provinces.
The Ho Chi Minh City Association of Women Entrepreneurs
(HAWEE) convened its first Congress for the 2015-2020 tenure on April 5, with
Vice President Nguyen Thi Doan in presence.
The HAWEE set the vision of establishing a venture fund
for underprivileged women nationwide in partnership with the Vietnam
Association of Women Entrepreneurs and other clubs and associations, among
other activities.
In her speech, Vice President Doan hailed the formation
of the HAWEE, especially at a time when
She asked the association to attract more members to
share experience and business opportunities, while tapping the State support
to build a contingent of successful entrepreneurs.
Vice Chairman of the municipal People’s Committee Tat
Thanh Cang pledged all possible support for the HAWEE which he said, will
serve as a bridge linking female entrepreneurs with local authorities to
clear any arising business barrier.
The Congress elected a 29-strong executive board led Cao
Thi Ngoc Dung, Chairwoman of the board of directors and General Director of
Phu Nhuan Jewelry JSC.
Deputy PM greenlights industrial complex
plan
Deputy Prime Minister Hoang Trung Hai has approved the
plan for the third phase of the industrial complex project in 20 provinces.
The approval is based on the industry and trade
ministry's proposal.
The 20 provinces and cities involved in the industrial
parks project are: Bac Giang, Dien Bien, Ha Giang, Ha Nam, Hai Duong; Hai
Phong, Hoa Binh, Lai Chau, Lang Son, Ninh Binh, Phu Tho,; Son La, Thai Binh
and Vinh Phuc in the north; Da Nang and Quang Nam in the centre; and Ca Mau,
Can Tho, Dong Thap and Hau Giang in the south.
The Deputy PM asked the industry and trade ministry
(MoIT) to announce a detailed list of planned industrial parks.
He also asked the MoIT to direct and examine the
implementation of the industrial parks project, following government's
regulations.
The Deputy PM asked the People's Committees of provinces
and cities to implement the planning, establishment and expansion of
industrial complexes in accordance with the government's regulations on the
management of industrial parks.
He urged provincial people's committees to resolve
problems of inefficient operation of industrial parks.
The Deputy PM petitioned the committees to check whether
laws were being followed in industrial complexes.
The MoIT reported in the first phase of implementation
of the industrial complex project, 14 cities and provinces had plans till
2020, following government regulations on land use and industrial park
establishment.
These 14 cities and provinces were: Bac Kan, Cao Bang
and Thai Nguyen in the north; Nghe An, Thua Thien-Hue, Binh Dinh and Phu Yen,
besides Khanh Hoa in the central region; Tay Ninh, Binh Thuan, Soc Trang and
Long An, besides Vinh Long in the south; and Gia Lai in the Central Highland.
The Deputy PM had approved the planning of the second
phase's industrial complex project in 26 cities and provinces last August.
Mechanics sector must improve
The domestic mechanical engineering sector needs to
change dramatically to become one of the "spearhead" industries
designated by the Government, insiders have said.
The government has invested time and money in the
mechanical engineering sector, as it plays a key role in Vietnam's
industrialisation and modernisation.
As a result, it has gained significant achievements. In
2013, the production value of the mechanics sector reached US$11.8 billion,
up seven times compared to that in 2000. Export value rose to nearly 35% of
the sector's total value.
However, the industry's growth has not been stable
because most of the production lines and technology have been imported.
Do Phuoc Tong, vice chairman of the HCM City Mechanics
Association, said the domestic manufacturing industry was the top importer in
the country of production lines and raw materials.
However, it had not been able to sell many of its
products.
"Product quality, pricing and delivery are decisive
factors that can help sales of mechanical products. However, most
domestically manufactured mechanical products have not been competitive in
these aspects," Tong was quoted as saying in Sai Gon Giai Phong
(Liberated Saigon) newspaper.
Domestic enterprises that manufacture mechanical
products from iron alloy are weak, mainly due to workers' poor skills. As
such, the quality of foundry products is uneven, he said.
Also, the prices of domestically made mechanical
products are not attractive since 80% of the production lines and input
materials, particularly carbon steel, have been imported from abroad.
The manufacturers also cannot deliver their products on
schedule since many of the products are returned due to poor quality.
Tong said that HCM City had one of the most developed
mechanics industry in the country, with 3,537 enterprises. However, many are
small-scale with a limited workforce and financial capacity.
The Government's policy to support the industry has been
ineffective as it has not fit enterprises' demands, Tong said.
Foreign-invested companies under current regulations are
allowed a zero import tax rate when they import production lines and
equipment. However, domestic manufacturers have to pay taxes for imported production
materials.
Dr. Huynh Thanh Dien of the HCM City Economics
University said the country was still unable to manufacture special-purpose
machine tools because of the weakness of the domestic industry.
As a result, enterprises involved in other industrial
sectors had to import sophisticated machine tools, limiting their
competitiveness, Dien said.
The main exports made by the domestic mechanical
engineering sector are automobile parts, machine tools and motorized
machinery for agricultural and forestry production, and electrical equipment.
Most of the machinery and tools are exported to ASEAN
countries, and China and the Republic of Korea.
Tong suggested that the Government adjust tax rates on
equipment and material imports of the domestic mechanics sector, particularly
carbon steel used to make machine tools.
Also, in the long term, it is necessary to outline a
development strategy for production of carbon and alloy steel to serve
machine manufacturing in the country.
He also said there was a need to establish financial
leasing companies able to offer loans at preferential interest rates, or to
lease machinery and equipment to help mechanical engineering companies
improve their production technology and skills of workers.
Toyota could cease making cars in Vietnam on
coming tax cut
The Vietnamese unit of the world’s largest carmaker
Toyota is considering putting an end on production and switch to import to
enjoy the preferential tax treatment a trade pact will offer in the next
three years.
Toyota Motor Vietnam could cease making cars in Vietnam
and import from other ASEAN countries to enjoy the zero import duty in 2018,
President Yoshihisa Maruta said at a meeting to announce the company’s
operation plans for 2015 on April 2.
Toyota Motor Vietnam currently has to import most of the
spare parts for its production in the Southeast Asian country, and there will
soon come the day when importing a complete car from Thailand is cheaper than
assemble it in Vietnam, Maruta said.
The Japanese president, who is also chairman of the
Vietnam Automobile Manufacturers' Association (VAMA), said the year 2018 will
be a big issue for the carmaking industry.
Passenger cars with fewer than 24 seats, 40 percent of
whose parts are manufactured by ASEAN countries, are currently subject to a
50 percent import duty. The rate will be lowered to zero in 2018, under the
Common Effective Preferential Tariff agreement.
ASEAN is a ten-member bloc which includes such Southeast
Asian countries as Indonesia, Malaysia, the Philippines, Singapore, Thailand,
Brunei, Cambodia, Laos, Myanmar, and Vietnam.
Industry insiders say it is more profitable to sell
imported cars than those that are domestically assembled.
Last year the Vietnamese government approved the planning
for the automaker industry between 2015 and 2020, with a vision to 2030.
But there are no specific policies included in the
planning, the Toyota Motor Vietnam chief executive complained, saying this
left the company “being unable to know what to do next.”
The carmaker is thus waiting for an action from the
government to have the answer as to whether it will stop making cars in
Vietnam or not.
Without a support from the government, the domestic
carmakers will surely fall into trouble, he warned.
The businesses under the VAMA will then have to import
complete cars for sale rather than assembling domestically, he added.
Toyota Vietnam sold 41,205 cars in 2014, a 24% increase
from a year earlier, according to data released at the on April 2 meeting. Of
these, 34,778 vehicles are domestically assembled.
The company accounted for 31% of the total sales among
the VAMA businesses.
Toyota Motor Corp meanwhile has plans to spend some
US$1.3 billion two build a new plant in China in 2018, and another in Mexico
a year later, AFP reported on April 3, citing reports by the Japanese
business daily Nikkei and Japan’s public broadcaster NHK.
The Chinese factory will be built in Guangzhou, whereas
the Mexico plant will be located in the state of Guanajuato, according to the
Nikkei.
The move is aimed at boosting the world’s largest
carmaker’s production capacity by some 300,000 units a year in a bid to
better compete with global rivals.
Source : VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Hai, 6 tháng 4, 2015
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