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BUSINESS IN BRIEF 4/5
Binh
Dinh facilitates Guangxi business operation
The
central
The
local authorities promise to support the Mingyang biochemical group in
particular to run the post-starch processing plant in Binh Dinh’s Nhon Hoi
economic zone, Thang told Vice President of the Guangxi Zhuang Autonomous
Region Wei Chao An – who visited the province on April 30 and May 1.
Wei Chao
An underlined cooperation potential in economics and investment between the
two localities, citing the construction of the 68-million-USD Mingyang
post-starch processing plant as a vivid demonstration of bilateral
cooperative ties.
The
plant could process 100,000 tonnes of products per year, he added.
He
called on the two localities to expand affiliation to other fields such as
culture and education in the coming time.
As many
as 36 projects in the Nhon Hoi economic zone received investment licenses
with a total registered capital of over 1.53 billion USD.
Particularly,
Binh Dinh province is expediting the implementation of an 22-billion-USD oil
refinery complex project at the zone, which is capable of refining 20 million
tonnes of crude oil a year, together with many other projects.
The city
is currently home to 38 seaports with a total length of nearly 13 kilometres,
including Tan Cang – Cat Lai,
According
to Chairman of the municipal People’s Committee Le Hoang Quan, the city’s
seaports handled 109 million tonnes of cargo and generated over 15 trillion
VND (705 million USD) in 2014, an annual rise of 15.3 percent.
The
outcomes were attributable to the city’s investment in key transport
infrastructure projects.
The completion
of the second phase of the Soai Rap dredging project is an example. The
project worth 2.8 trillion VND (131.5 million USD) was commissioned in late
June 2014, enabling faster navigation and handling 30,000-50,000 dead weight
tonnage ships.
The total
volume of goods transported via the river in 2014 reached 7.2 million tonnes,
a yearly increase of 16 percent.
The
According
to the national seaport development plan through 2020,
The
region’s seaports are expected to handle 185-200 million tonnes of cargo in
2015, 265-305 million tonnes in 2020, and 495-650 million tonnes in 2030.
Le Hoang
Minh, Deputy Director of the municipal Department of Transport, said the city
is relocating
Ho Chi
Minh City is planning 2,000 hectares for the construction of the Hiep Phuoc
urban industrial complex along the Soai Rap River which could welcome
50,000-70,000 dead weight tonnage ships from the East Sea to the Hiep Phuoc
seaports cluster, reducing transport time and increasing goods exchanges between
the city and Mekong Delta localities as well as other industrial hubs in the
southeast region.
Apart
from investing in developing the seaports system in Cat Lai and Hiep Phuoc
regions, the city is focusing on connecting the land and waterway transport
networks such as belt roads No. 2, 3 and 4 linking the city with the Hiep
Phuoc port and industrial park, the HCM City-Long Thanh-Dau Giay highway, and
the Ben Luc-Long Thanh highway.
The city
will also build a railway connecting Hiep Phuoc port with Long Dinh station
in Can Duoc district and Long An international port in Can Giuoc district.
Southern
region - a major contributor to
Southern
Vietnamese provinces and cities have made great economic strides over the
last four decades since the region’s liberation and the national
reunification in 1975, substantially contributing to
An array
of industrial hubs have been created in the south, which used to house only
small-scale mechanical industry mainly serving military purposes, said Vice
Chairman of the National Assembly’s Committee for Economic Affairs Nguyen Duc
Kien.
Ba
Ria-Vung Tau province, which used to be an underdeveloped area, currently
accommodates an oil and gas industrial park along with the largest maritime
service cluster of
Binh
Duong province has followed a similar path, becoming a modern industrial
locality following its ‘doi moi’ (renewal) efforts and the country’s
international economic integration.
With
agricultural advantages, southwestern provinces have helped ensure food
security and contributed to the nation’s export of 6 million tonnes of rice
and 8 billion USD worth of aquatic products each year.
The
southern key economic region, the biggest of its kind in Vietnam, consists of
HCM City and the provinces of Dong Nai, Ba Ria-Vung Tau, Binh Duong, Binh
Phuoc, Tay Ninh, Long An, and Tien Giang.
The
General Statistics Office said this region accounts for some 17 percent of
population and more than 8 percent of total area of
Under a
master plan approved by Prime Minister Nguyen Tan Dung in early 2014, the
economic region’s industry, construction, and service sectors will constitute
95-96 percent of its GDP with services making up 44 percent by 2020.
Average
per capita GDP will reach up to 4,000 USD in 2015 and exceed 5,000 USD by
2020. Meanwhile, per capita export value is expected to increase to 3,700 USD
and 5,400 USD, respectively.
By 2030,
the region is set to be a role model of sustainable development with an
advanced knowledge economy. It will also become an economic hub of
To
realise these ambitious goals, the regional localities need to speed up
economic restructuring with a focus on improving productivity, product
quality, and business competitiveness, said To Dinh Tuan, Editor in Chief of
the HCM City Party Committee’s website.
They
should develop infrastructure and high-quality human resources, a better
business climate and attract more foreign direct investment in fields that
they have advantages in, he added, noting that they must ensure good
connectivity within the region and with localities outside.
Regarding
He
pointed out problems facing the city, including enterprises’ low
competitiveness and the disparity between infrastructure development and
economic growth rate and living conditions.
Holding
a pivotal role,
Da
Lat works to boost agricultural and tourism potential
With
favourable natural conditions, 122-year-old Da Lat city is working to secure
a role as a key agricultural and tourism centre in the Lam Dong Central
Highland province.
The
biggest city in Lam Dong and the province’s political and administrative
centre, Da Lat has been the locomotive of local development in key economic
sectors, particularly hi-tech agriculture, trade, services and tourism.
Besides
its long-time reputation as a resort city with romantic landscape and
temperate climate, the city with a population of 216,000 has undergone a
dramatic change particularly in its suburban areas.
Based on
the traditional farms, hi-tech agriculture is gaining momentum, with 4,500 ha
cultivated using latest farming techniques, further reinforcing the
trademarks of Da Lat vegetables and flowers.
The city
is home to 4,440 ha under flowers, nearly two-thirds of the province’s total
flower fields, producing 1.5 billion flowers last year out of the province’s
output of 2.3 billion.
Da Lat
also has 6,600 ha under vegetable, ranking third in the province in terms of
area and output, but the city’s products fetch much higher economic value
thanks to the application of advanced cultivation technology.
Together
with promoting hi-tech agriculture, Da Lat is exerting efforts to become the
country’s leading agri-tourism destination.
Nguyen
Thi Nguyen, Director of the provincial Department of Culture, Sports and
Tourism, highlighted that Da Lat will focus on developing its eco-tourism,
resorts and conference centres.
She
added that it will leverage its agricultural potential to offer agri-tourism,
attracting both domestic and foreign visitors to the city.
Popular
agri-tourism activities include farm trips for visitors to try their hands at
planting and taking care of flower and vegetable, or sightseeing and picking
fruits at farms.
Last
year, over 3.6 million tourists arrived in Da Lat, out of the total 4.8
million visitors to Lam Dong province.
The
capital of
Nguyen
Ngoc Tuan, Vice Chairman of the Hanoi People’s Committee, said that the city
has asked relevant branches and ministerial departments to listen to the
complaints of foreign invested enterprises and to offer solutions in a timely
manner.
The city
requested foreign investors to implement their licensed projects on schedule,
otherwise their licences would be withdrawn.
Specifically
for 8 projects which are facing difficulties in site clearance, the city
asked relevant site clearance steering boards to work closely with the
investors to speed up the work.
City
authorities will also promote administrative reform, improving processes of
planning, investment, building and taxation to support business start-up.
Numerous
trade promotion activities will also be held in the near future with a view
to attracting more domestic and foreign investments to the city.
According
to statistics from the municipal People’s Committee, by the end of 2014,
In the
first quarter of this year, an additional 160.2 million USD poured into the
city.
To date,
the
Foreign
meat floods Vietnamese market
International
meat producers have revealed their intent to take over the market in
In
March, a Canadian delegation, led by the country’s Minister of Agriculture
and Agrifood Gerry Ritz, visited Vietnam in a bid to promote safe,
high-quality beef among local restaurants and hotel chains.
On April
20, the European Livestock and Meat Trades Union and the Polish Union of
Producers and Employers of the Meat Industry coordinated a press conference presenting
European beef and pork. As a Vietnam-European Union free trade agreement will
be signed this year, the region devised a complete promotion plan on the
quality and taste of meat.
Over 100
European enterprises, including 40 Polish companies, have been licensed to
provide meat for Vietnamese consumers, paving the way to meet an EU 2015 goal
of a 5 percent increase in meat exports to
The goal
is within reach, considering that in 2014,
Unable
to compete against the low price of Australian and American meat, which
currently occupies a considerable space within local supermarkets, the
European producers have shifted their attention to the high-end market of
hotels and restaurants. Domestic processing businesses are also considered as
potential customers, according to the Counsellor for Economic Affairs at the
Polish Embassy in Hanoi Mariusz Boguzewski.
The
Animal Husbandry Association of Vietnam reported the number of cows raised in
Chairman
of the association Nguyen Dang Vang said the major difficulty faced by
international meat exporters is the Vietnamese penchant for buying raw meat.
He said this could shift in the next five years as consumers look to save
time and reduce expenses.
He added
that it is not all black in the situation, as the fierce competition will
force the domestic husbandry sector to restructure towards large scale and
professionalism.
Vice
Chairman of the Vietnam Feed Association, Pham Duc Binh, said the
international meat influx is likely to lead to a massive closure of local
animal husbandry businesses and meat processing plants, leaving behind only
some foreign-funded giants.
The only
chance for those domestic enterprises to survive is to work together and
build strong connections so that their meat finds its way from farms to
shops, he noted.
Big
companies turn to agriculture to lift profits
Big
companies in
Hoang Anh
Gia Lai is the first big name to invest in agriculture, focusing on
sugarcane, palm oil, maize and rubber in the past two years.
The
company’s latest move is to spend 300 million USD on purchasing 230,000 cows
to enter the milk and beef markets.
Those decisions
reaped dividends when sugarcane alone contributed 34 percent of the company’s
total revenue in 2014. Maize and rubber contributed 14 percent.
The Him
Lam Joint Stock Company recently announced their involvement in the
agricultural sector, requesting approval from the Ministry of Agriculture and
Rural Development to use of 1,000 hectares of land in the Central Highlands
to grow trees.
If the
plan is approved, the company intends to invest 20 trillion VND (929 million
USD) into the production and processing of macadamia nuts.
The Hoa
Phat Group Joint Stock Company recently announced the establishment of a
company with a chartered capital of 300 billion VND (13.9 million USD) to
invest in livestock, food processing and animal feed.
Vingroup,
the nation’s biggest property developer, had a working session earlier this
month with Quang Ninh province to discuss a plan to grow clean vegetables and
fruit in the province.
Investors
interested in railway projects
Numerous
big investors have shown their interest in joining national railway projects,
Vu Ta Tung, General Director of Vietnam Railways (VNR) was quoted as saying
by Giao Thong (Transport) newspaper.
Among
them are the Railway Trade and Transportation Company (Ratraco) and the
Railway Logistics Company (ITL) who have demonstrated interest in the project
on upgrading the goods depot for the Yen Vien station in Hanoi.
ITL
Director Bui Quang Lien expressed the company’s interest in investing in
building a logistics centre for the Yen Vien station, saying the ITL has
submitted a proposal to the VNR and is awaiting approval.
He also
stressed the need for the application of technology in railway transportation
to improve services and ease the freight-load on road transport.
Meanwhile,
General Director of the Deo Ca Investment Joint Stock Company Ho Minh Hoang
said his company targets to invest in several railway projects, including the
Hanoi-Hai Phong railway or the Yen Vien-Pha Lai-Ha Long-Cai Lan railway.
He also
suggested the private-public partnership (PPP) model be applied in
implementing projects on infrastructure and public services which require
substantial investment with delayed returns.
The
Ministry of Transport has approved the project proposal on inviting social
resources for upgrades to 12 railways and the construction of five new ones.
The
projects will be initiated under the build-operate-transfer (BOT) or PPP
investment form.-
Ca
Mau province prioritises aquatic sector development
The
aquatic sector has been deemed the top development priority of the
southernmost province of Ca Mau with a targeted 800,000-900,000 tonnes in
output and 1.8 billion USD in exports by 2020.
Promotion
activities in the sector have been designed to raise local per capita income
to 1,600 USD in 2015 and 3,000 USD by 2020.
The
province plans to focus on transferring science and technology as well as
developing breeding, offshore fishing, and exports.
Training
courses offered by the provincial Department of Agriculture and Rural
Development and Department of Science and Technology will help local farmers
improve their awareness and understanding of aquaculture techniques.
Outstanding individuals will be sent to other localities in Vietnam and
abroad to learn about effective farming models.
Ca Mau
currently boasts 500 farms supplying 7 billion juvenile shrimp a year and
meeting 30 percent of demand. It targets to raise the respective figures to
1,000 farms, 18 billion juvenile shrimp, and 70 percent of demand by 2020.
Meanwhile,
the province plans to hasten the implementation of Government Decree 67 on
encouraging fishermen to build high-capacity steel offshore fishing ships and
develop fishery logistics services concurrently to ensure efficiency.
Promotional
activities will also be intensified abroad to boost exports. Local seafood is
currently exported to more than 50 countries and territories around the
world.
At
present, Ca Mau has 290,000 hectares of land used for aquaculture and nearly
4,000 fishing boats generating an average annual output of 480,000 tonnes,
though the output is widely believed to be far below its potential.
The
province saw an aquatic output of 490,000 tonnes in 2014, the highest output
recorded and representing an annual increase of 10.3 percent.
Roughly
180,000 tonnes were processed for export, bringing home 1.3 billion USD—a 200
million USD increase from a year earlier, Director of the provincial
Department of Agriculture and Rural Development Le Van Su told the Vietnamese
News Agency in a separate report.
Ca Mau
boats a coastline of more than 254 kilometres, equivalent to one third of the
Mekong Delta’s coastline, and a fishing ground of 71,000 square kilometres
considered to be one of the four key fishing grounds in Vietnam, according to
the province’s portal.
Tien
Giang expands pineapple growing area
The
Mekong Delta province of Tien Giang has expanded the growing area of
pineapples in Tan Phuoc district to 16,000 hectares, and is expecting to
produce over 287,000 tonnes for domestic consumption and export.
Besides
expanding the cultivation area, local authorities have encouraged farmers to
apply advanced farming techniques and manufacturing processes in line with
the Vietnam Agricultural Practice (VietGap) standards in order to improve the
fruit quality.
So far,
the district has invested in a 700-kilometre dyke system and pump stations to
protect pineapple crops in the flood season.
With an
average yield of nearly 20 tonnes per hectare, farmers earn a profit of 30-35
million VND a year, according to Deputy Chairman of the municipal People’s
Committee Nguyen Van Lam.
With 4
hectares of pineapple meeting VietGap standards, Ngo Van Bien in Tan Phuoc's
Tan Lap 2 Commune earns about 320 million VND (14,800 USD) in production
value annually, of which his net profit reaches about 50 percent.
More
interest shown at Hanoi auctions
A
greater number of investors participated in the equity auctions held on the
Hanoi Stock Exchange in April, the northern bourse reported.
Five
auctions were organised on the Hanoi Stock Exchange in April, including three
initial public offerings (IPOs) of State-owned enterprises, one auction of
share purchase rights, and one share offering in the form of direct
negotiation with investors present at the auction.
The
exchange reported an increase in the number of participants, with an average
of 103 investors per auction, a rise of more than 39 percent, as compared to
March.
As many
as 310 million shares were offered for sale, of which 24.1 million were sold
out, bringing in a turnover of 241.8 billion VND (11.2 million USD).
The
auction of more than 5 million share purchase rights of Tran Phu Electric
Mechanical Joint Stock Company, owned by the Hanoi People's Committee, was
the most successful, with the bid volume being 7.4 times higher than the
offering rights. A few investors registered to purchase at a price of 90,000
VND (4.17 USD), which was 5.2 times higher than the starting price.
All the
rights were sold, earning the Hanoi People's Committee 298.5 billion VND
(13.8 million USD).
Moreover,
of the three IPOs, the equity auction of the Infrastructure Development and
Construction Corporation (Licogi) of the Ministry of Construction saw the
highest results, with the entire offering being sold to 106 individual
investors. It brought in more than 212.8 billion VND (nearly 10 million USD),
higher than the expectation of 126.7 billion VND (almost 6 million USD).
Of note,
auctions of equity of those companies under the Vietnam National Coal Mineral
Industries Group (Vinacomin) witnessed poor results.
Vinacomin
Power Holding Corporation sold only 1.2 million shares of a total offering of
nearly 236.4 million shares, while Vinacomin Minerals Holding Corporation
sold just 1.3 million shares of the 46.7 million shares up for sale.
The sale
of shares of Cam Ranh Port Limited Liability Company saw only one
participating investor, selling just 307,000 shares of the total offering of
5.69 million shares.
According
to the Hanoi Stock Exchange auction plan, three equity auctions will be held
in May—one for Saigon Posts and Telecommunications Service Joint Stock
Corporation on May 14, the Hanoi Cadastral Survey Company Limited on May 19,
and Vinacomin Viet Bac Mining Industry Holding Corporation Limited on May
27.-
Dong
Nai opens club for coffee growers
A club
for coffee growers to share their cultivation knowledge and experiences has
made its debut in the southern province of Dong Nai.
It has
attracted over 100 coffee farmers from the Central Highlands provinces of Dak
Lak, Dac Nong, Lam Dong and Gia Lai, who will regularly discuss vital issues
including agronomic seasonal concerns, weather forecast, pests, diseases,
weed management as well as market prices and export conditions.
Bayer
CropScience Vietnam will provide training and organise seminars featuring
agronomists and experts on sustainable coffee production, innovative
pesticide solutions to improve yield, quality and profits.
Pham
Xuan Quang, a club's manager, said, "This is a useful forum for better
coffee yields."
The
English language daily Viet Nam News quoted Torsten Velden, Bayer
CropScience’s country division as saying that as coffee is second only to
rice in value of agricultural products exported from Vietnam, they would like
to support this further.
“With
the launch of the club, we aim to create a forum where key coffee growers in
Vietnam can reflect and develop their professional aspirations in the field,
and eventually help increase yield, quality, and profit in a sustainable
manner," he said.
The
opening of the club follows a programme called Bayer Much More Coffee, which
was started in 2013 to improve agronomy methods and make efficient use of
crop protection inputs.
The
programme was developed with the Western Highlands Agriculture and Science
Institute and has been tested and proven with the support of coffee farmers.
Coffee
farmers taking part in the programme have seen their profits increase by at
least 25 percent compared to normal practices, the company said.
Car
sales to slow ahead of 2018 tariff cuts
Car
sales have shown a positive trend this year with the distribution number for
high-end imports on the rise.
According
to figures released by the General Statistics Office, retail sales in general
goods and services throughout Vietnam have recorded a marked increase of
11.9% growth during April 2015 (excluding inflation).
Research
by Rong Viet Securities points towards a positive outlook generally, but
especially in the retail automotive segment, which has been benefiting from
remarkable recovery, with 20% growth in 2013 and 40% in 2014.
Sunny
prospects for the automobile sector in 2015 have been helped by the fact that
loans to buy automobiles are now much more appealing, as interest rates are
currently low and stable-from 7% to 9% per year for short and medium-term
loans.
Also,
the consumer confidence index for 2014 recorded a 5% increase on 2013.
The
distributors of imported vehicles are expecting high growth this year in
their commercial vehicle sector (trucks, dump trucks and tractors) as a
result of the implementation of stricter limits on overloading trucks, the
import duty on cars being cut by 50% from 2014, and the economy’s overall
upswing in recovery which is likely to prompt an increase in the demand for
freight transport.
However,
despite this positive trend, in 2015 the import of passenger cars is
predicted to slow compared to 2014.
As the
import tariff will remain unchanged (50%) this year, and will drop to zero in
2018 following the ASEAN Trade in Goods Agreement, it does not make financial
sense for customers to buy this year.
As such,
the forecast for this segment remains modest for the years leading up to
2018, when tariffs will be completely removed and the sales of both domestic
assembled cars and passenger cars are expected to go through the roof.
Due to
the tariff differential, domestic assembled cars are typically lower in price
than imported products. As such, distributors of locally assembled vehicles
are optimistic that their more favourable prices will stand in their favour
for now.
However,
this price differential will be eliminated in 2018 when the import tariffs
are removed.
The
Ministry of Industry and Trade has proposed cutting the special consumption
tax on domestic assembled passenger cars that are 2-litre and under in engine
size, while raising the tax on premium imported passenger cars with 3 litre
engines and upward.
However,
the amended Law on Special Consumption Tax will not come into effect until
after 2015, and so over the next three years, the government is considering a
tax cutting process for cars and trucks, specifically.
The
above analysis shows that the stocks of car retailers and distributors are
expected to rise over the course of 2015.
In
particular, stock investors should keep an eye on the rising fortunes of imported
commercial vehicle distributors Dongfeng and Hino, and distributors of
domestic assembled passenger cars such as Toyota, Suzuki, and Daihatsu.
Taiwanese
eye fresh FTA prospects
A new
wave of Taiwanese investments is expecting to hit Vietnam off the back of the
country’s Free Trade Agreements (FTAs).
Berton
BC Chiuvisit, a counsellor for Regional Economic Integration Projects at
Taiwan’s Ministry of Economic Affairs’ Bureau of Foreign Trade told VIR
that a bigger wave of Taiwanese would come to Vietnam to invest in, as they
saw enormous investment and trade benefits from the country’s multilateral
and bilateral FTAs.
He said
Taiwanese businesses strategically wanted to use Vietnam as a base and set up
partnerships with the Vietnamese in order to put regional economic
integration and supply chain efficiency to good use. They wished to invest
largely in Vietnam’s agriculture, textile, ICT and car/motorcycle component
sectors.
Jack
Lin, associate director of the general manager office of Taiwan’s I-Mei Foods
Co, Ltd said “Vietnam’s economic situation is strongly recovering and the
country has had many FTAs with great tax reductions. This will offer a good
opportunity for us to expand production here. We may increase our investment
in Vietnam. Currently, I-Mei operates a factory in Hanoi making rice
biscuits.
Sara
Huang, representative from ceramic-maker Taiwan’s Franz Collection Inc. also
told VIR that this company was finding Vietnamese distributors to sell its
products in Vietnam as imported tax rates for ceramic products under the FTAs
would be significantly reduced.
“Vietnam’s
demand for products like ours is on the rise, thanks to economic recovery.
After we establish a strong partner network in Vietnam, we may consider other
investment-related steps in Vietnam,” she said.
Referring
to the textile sector, Chiuvisit underlined that Vietnam had signed FTAs with
many important trading partners and could sign the Trans Pacific Partnership
Agreement (TPP) in the near future, thus allowing it to enjoy preferential
tariffs. Taiwan’s textile sector, however was facing pressure from regional
economic integration trends.
Chiuvisit
also stressed that Vietnam’s automobile and motorcycle parts industry was a
magnet to Taiwanese investors. After Vietnam joined the World Trade
Organisation (WTO), the tariffs on parts have gradually been decreased. Also
based on ASEAN’s Common Effective Preferential Tariff (CEPT), starting on
January 1, 2014, Vietnam has begun lowering tariffs on automobile and
motorcycles to below 50% and by 2018 these will be reduced to 0%.
During
1988-2014, Taiwanese businesses invested US$28.41 billion in 2,368 investment
projects in Vietnam, making Taiwan Vietnam’s fourth largest source of FDI.
Vietnam
has had six multilateral FTAs with ASEAN, and their partners including India,
Australia/New Zealand, the Republic of Korea, Japan and China. It also has
two bilateral FTAs with Japan and Chile. Vietnam is also negotiating
seven FTAs including Regional Comprehensive Economic Partnership Agreement
(RCEP), ASEAN-EU FTA, and TPP etc.
Furthermore,
Vietnam is also considering negotiations of the ASEAN-Canada FTA.
Da
Lat works to boost agricultural and tourism potential
With
favourable natural conditions, 122-year-old Da Lat city is working to secure
a role as a key agricultural and tourism centre in the Lam Dong Central
Highland province.
The
biggest city in Lam Dong and the province’s political and administrative
centre, Da Lat has been the locomotive of local development in key economic
sectors, particularly hi-tech agriculture, trade, services and tourism.
Besides
its long-time reputation as a resort city with romantic landscape and
temperate climate, the city with a population of 216,000 has undergone a
dramatic change particularly in its suburban areas.
Based on
the traditional farms, hi-tech agriculture is gaining momentum, with 4,500 ha
cultivated using latest farming techniques, further reinforcing the
trademarks of Da Lat vegetables and flowers.
The city
is home to 4,440 ha under flowers, nearly two-thirds of the province’s total
flower fields, producing 1.5 billion flowers last year out of the province’s
output of 2.3 billion.
Da Lat
also has 6,600 ha under vegetable, ranking third in the province in terms of
area and output, but the city’s products fetch much higher economic value
thanks to the application of advanced cultivation technology.
Together
with promoting hi-tech agriculture, Da Lat is exerting efforts to become the
country’s leading agri-tourism destination.
Nguyen
Thi Nguyen, Director of the provincial Department of Culture, Sports and
Tourism, highlighted that Da Lat will focus on developing its eco-tourism,
resorts and conference centres.
She
added that it will leverage its agricultural potential to offer agri-tourism,
attracting both domestic and foreign visitors to the city.
Popular
agri-tourism activities include farm trips for visitors to try their hands at
planting and taking care of flower and vegetable, or sightseeing and picking
fruits at farms.
Last
year, over 3.6 million tourists arrived in Da Lat, out of the total 4.8
million visitors to Lam Dong province.
Economist
warns of Vietnam’s over dependence on China
Party
General Secretary Nguyen Phu Trong recently led a delegation of party leaders
and cabinet ministers to China on a four-day trip that ended April 10 aimed
at mending fences with Vietnam’s largest trading partner.
Last
summer relations between the two nations began to unravel following China’s
placement of an oil rig in waters claimed by Vietnam near the Paracel Islands
in the East Sea.
Though
China withdrew the rig last July, the dispute has taken its toll on Chinese
tourism to Vietnam.
According
to official statistics Chinese inbound tourism into Vietnam fell 40% on year
in the three months leading up to April this year, even though non-tourism
trade has continued to surge.
“Despite
predictions last May that Vietnam-China trade relations were on the brink of
collapsing, non-tourism trade has continued to swell over the past year,”
said Associate Professor, Dr Tran Dinh Thien, director of the Vietnam
Institute of Economics.
Factories
in Vietnam – many owned by multinational firms – are highly dependent on
Chinese inputs Thien said, adding that Chinese companies also have an
extensive share of Vietnam’s contracts for infrastructure and industrial
projects.
According
to statistics from the Ministry of Industry and Trade (MoIT), Vietnam’s
exports to China have jumped up 17.84% since last May while imports from the
northern neighbour spiked 31.16%, contributing to an ever widening trade
shortfall.
According
to figures of the MoIT for just the three month period January-March of this
year alone, Vietnam’s exports to China dipped 1.2% while at the same time
imports from China shot up 26%.
“These
figures are very troublesome for the nation’s economy in light of China’s
deployment of oil rig Haiyang Shiyou-981 in Vietnam’s waters,” Thien said as
they are incipient of the underlying economic overreliance on China.
“China
accounts for nearly 29.3% of the nation’s total imports,” Thien underscored,
creating an unwise, unequal and unhealthy growing dependency of the national
economy on China.
Thousands
of factories in Vietnam rely on China for raw materials to keep production
lines humming and finding alternative suppliers is not only difficult but
would increase costs exponentially and threaten their bottom line profits.
For far
too many companies there is little alternative but to trade with China, which
supplies the nation’s factories with everything from the components to make
smartphones to the fibre that labour forces weave into sweatshirts and
t-shirts for international retailers.
According
to Vietnam Customs, the country’s manufacturing sector is profoundly dependent
on Chinese materials, relying on it for 70% of mobile phone components and a
quarter of electrical equipment.
At the
end of the day, local retailers from the very small mom-n-pops to the
multinational giants throughout Vietnam remain stocked to the brim with
Chinese products - everything from chopsticks to cloth and mechanical
components.
Thien
said the most disturbing aspect is that Vietnam-China trade ties will
increasingly deteriorate as time goes by and it corroborates the fact that
Vietnam’s economic restructuring efforts, at least to date, have not been
successful.
There is
also a large variance between Vietnam and China official trade statistics
that need to be adequately reconciled. Last year, according to China,
bilateral trade reached some US$83 billion while Vietnam’s statistics
showed trade at only US$58 billion.
Another
point of contention said Thien, is that Vietnam’s exports to China are mostly
unprocessed commodities with low added value. Most notably, there remain
shortcomings in the export structure from Vietnam to China and vice versa.
This
translates to lost opportunities by Vietnam to increase its competitiveness
and effectively join the global supply chain and begin producing high quality
products with higher added value and profits, Thien stressed.
It also
means that Vietnamese companies are missing out on the opportunities to
develop in the global production network through closer connections with
multinationals from around the globe as a good way to step up technology
transfer and promote economic development.
GCC
holds great potential for Vietnam fruit exports
The six
countries forming the Gulf Cooperation Council (GCC) – Saudi Arabia, Kuwait,
Qatar, Bahrain, the UAE and Oman – depend on imports for 80-90 per cent
of their food as a large part of their land areas are desolate.
Due to
the arid climate of the deserts, it is practically impossible for the
countries to become self-sufficient in growing fruit and vegetables,
according to the Africa, West and South Asia Department under the Ministry of
Industry and Trade (MoIT).
As a
result food production is always a problem with the end result that the six
countries import large volumes of soy protein, corn, vegetables, fruit, fruit
juices, chocolate, and grains. In the UAE, in particular, there is great
demand for organic fruit and vegetables.
However,
despite the potential for Vietnam fruit and vegetable exports to get a
stronghold in the region, sales have shown insignificant growth and overall
exports have remained modest the MoIT said.
Of the
nations, Saudi Arabia is the largest importer of fruit and vegetables with
sales reaching more than US$9 million, followed by the UAE at US$7.5 million.
These two markets combined account for nearly 80% of fruit and vegetable
exports to all GCC countries.
Overall
the sales of fruit and vegetables to all six GCC nations reached US$31.9
million for 2014.
The
department said the export of these products remains unimpressive as
Vietnamese farmers and processors have not devoted adequate resources to
nurturing the market. In addition, Vietnam’s fruit and vegetable exporters
face fierce competition from nations with advanced technologies and more
favourable locations such as Turkey, Egypt and Thailand.
The MoIT
added that if Vietnamese fruit and vegetable grower and processors would
invest in equipping the industry with state of the art canning and processing
technologies and devise an appropriate marketing strategy, they will find
huge opportunities in the GCC markets.
Expressway
to link booming coastal areas
A
blueprint has been made for a new cross-province expressway linking the busy
port city of Ha Long and Van Don special economic zone.
Plans
for the project, worth more than VND11.5 trillion (US$534.8 million), have
already been submitted by the People's Committee of northern Quang Ninh
Province to the Ministry of Transport for approval.
The
expressway will be about 60 kilometres long. It will make it easier for
containers to travel to and from Ha Long and Van Don - and similarly between
Ha Noi and Van Don via Ha Long.
Quang
Ninh authorities plan to build the expressway under the BOT
(Build-Operate-Transfer) model. Four toll stations will be set up on the road
for backers to recoup their investment.
Two toll
gates will be set up at either end of the route - and another two will be
placed at Dong La and Cam Y traffic junctions.
The
Quang Ninh People's Committee has another plan to renovate part of National
Highway 18 that runs through Ha Long City to Mong Duong Ward in Cam Pha City.
The
renovation work will cost more than VND1.7 trillion ($79 million).
Banks
use more short-term capital for loans after rule change
Commercial
banks boosted the use of short-term capital for medium- and long-term lending
after the State Bank of Viet Nam (SBV) doubled the allowed capital beginning
February 1, 2015.
Under
Circular 36/2014/TT-NHNN, prescribing limits and safety ratios in operations
of credit institutions and branches of foreign banks, commercial banks were
allowed to raise the rate of short-term capital used for medium- and
long-term loans from 30 to 60 per cent.
According
to data from the central bank, the rate of short-term capital used for
medium- and long-term loans increased sharply at commercial banks after the
circular took effect, hitting a record 29.66 per cent by February 28, 2015.
For many years, the rate was often only 20-24 per cent.
The
change is expected to help firms have better access to medium- and long-term
credit, as well as further boost credit growth.
In fact,
enterprises this year have had growing needs for medium- and long-term loans
to expand production, improve technology, as well as to prepare for bilateral
and multilateral economic partnership agreements, such as ASEAN Economic
Community (AEC) and Trans-Pacific Partnership (TPP), which Viet Nam signed.
SBV
Governor Nguyen Van Binh also affirmed that the SBV would find ways to
further lower lending rates to support enterprises, especially those for
medium- and long-term loans. Specifically, if macro conditions become more
attractive, the SBV would seek to decrease the medium- and long-term lending
rates by 1 per cent to 1.5 per cent to further assist enterprises in their
long run development.
According
to the SBV's report for the week ending April 17, 2015, State-owned
commercial banks continued to apply medium- and long-term rates of 9-10 per
cent per year to 5 priority sectors, including agricultural producers,
exporters, small- and medium-sized enterprises (SMEs), supporting industries
and hi-tech businesses. Other sectors were charged the lending rate of 9.3-11
per cent.
Commercial
banks also offered US dollar lending interest rates at 3-5.5 per cent per
year for short-term loans and 5.5-6.7 per cent per year for medium- and
long-term loans.
VN
eyes $2b in produce exports
Viet Nam
expects to reach a total export value of US$2 billion for fruits and
vegetables this year, an official of the Viet Nam Vegetable and Fruit
Association (Vinafruit) said.
Huynh
Quang Dau, Vinafruit deputy chairman, said Viet Nam's export value of fruits
and vegetables had seen strong growth in recent times, reported
kinhtenongthon.com.vn.
The
export value reached $1.47 billion in 2014, much higher than the $500 million
earned in 2013, due to the expansion of the export market.
In the
first quarter of this year, the Ministry of Agriculture and Rural Development
(MARD) said the nation had gained a year-on-year increase of 13 per cent in
the export value of fruits and vegetables, amounting to $274 million.
The
Southern Fruit and Plant Research Institute said the strong growth was due to
high demand for fruit in many countries, including the US, which has opened
its market to some new kinds of fruit from Viet Nam, such as longans,
litchis, rambutan and dragon fruit.
Additionally,
many other markets saw double or triple the demand against the same period
last year, including South Korea, Singapore and Hong Kong, it said.
The
export value of fruits and vegetables would continue increasing sharply this
year, Dau said, because many more kinds of Vietnamese fruits and vegetables
would start approaching strict export markets such as the US, Australia, the
EU and Japan.
New
Zealand has also permitted imports of Vietnamese dragon fruit and has
considered opening its market to Vietnamese mangos in the coming period, he
said.
South
Korea has continued importing milk fruit and plans to import other kinds of
fruit as well, including bananas, chillis and jack fruit, from Viet Nam after
treating it with irradiation technology.
Many
other markets such as the Czech Republic, the Netherlands, Australia and
Canada have had high demand for the Vietnamese buoi hong da xanh (green-peel
and pink-flesh) grapefruit, he said.
This
year, Viet Nam has a great chance of exporting more fruit to the US after the
US Department of Agriculture last year issued import licences for fresh
Vietnamese litchis and longans, Dau said.
In March
2015, Viet Nam's Plant Protection Department provided the first 10 codes for
regions growing litchis in the northern region of Viet Nam that reach the
conditions for exporting to the US.
The
north of Viet Nam does not have a US-certified factory for packing fruit or
the proper irradiation machines, so the fresh litchis must be transported to
the south of the country for packing and irradiation activities before the
fruit can be exported to the US.
Litchis
have the potential for high export value if local enterprises market their
product well, improve the quality of the fruit after harvest, handle
packaging and preservation, and build a brand for the fruit, he said.
The
association has proposed that the government and MARD should plan to create
regions especially for fruits and vegetables that meet VietGAP standards for
export and should manage the use of plant protection drugs and chemicals.
This
would ensure the production of clean fruits and vegetables reaching the food
hygiene and safety standards of the world market, he said.
Source : VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Hai, 4 tháng 5, 2015
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