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BUSINESS IN BRIEF 24/6
National
power plan falls behind schedule
Fears
that the Government would miss its target of universal electricity coverage
by 2020 are growing, as more than 500,000 rural households continue to live
without light, according to the Ministry of Industry and Trade (MoIT).
A
Government plan being carried out by MoIT and Electricity of Viet Nam Group
(EVN) aims to bring electricity to all corners of the country, from
mountainous areas to isolated islands, within the next five years. It also
aims to provide that electricity at an across-the-board regulated price,
which has proved difficult.
But in
reality rural areas have two options for buying electricity. Residents can
either purchase it directly from EVN, the national electricity provider, or
from third parties – local electricity co-operatives. The co-operative build
grids in the regions themselves and distribute power to consumers – generally
at higher prices than the Government's.
To standardise
prices EVN needs buy up the co-operatives' local power grids. But more than
20 per cent of the country's co-operatives – 2,000 – didn't properly record
their investments, making it difficult for EVN to take over their properties,
Industry and Trade Minister Vu Huy Hoang told the National Assembly that the
co-operatives.
"The
MoIT and Ministry of Finance are working together to find solutions, both on
clearance for transitioning control over the grid and minimising the
co-operatives' losses at the same time," Hoang said.
However,
most rural grids were decaying, and even posing a safety hazard in some
areas.
A
majority of the VND30 trillion (US$1.4 billion) set aside for the national
power coverage goal will be spent on local grid maintenance.
June
CPI picks up in major cities
Triggered
by the petrol price adjustment on May 20, the price bracket saw the sharpest
rise in transportation, soaring 3.58% from May.
Meanwhile,
price decreases were seen in food and restaurants (0.43%), thanks to the
abundant supply of food and farm produce.
Slight
surges were seen in garments, footwear and hats (0.14%); housing,
electricity, water, fuel, and building materials (0.06%); home appliances
(0.1%); beverages and tobacco (0.49%); medicine and healthcare services
(0.05%); culture, entertainment and tourism (0.17%); and other commodities
(0.1%).
Prices
in post-communication and education sectors remained unchanged.
Last
month, the Hanoi Statistics Office announced that the capital city's CPI
showed a month-on-month increase of 0.12% from April and a year-on-year surge
of 0.93%.
The
office said the increase was mainly due to a surge in petrol prices since May
5 that pushed a number of commodity prices up, especially transport prices,
which jumped 1.06% from April.
Meanwhile,
the HCM City Statistics Office also reported 0.62 % growth in the city's CPI
for June and a year-on-year increase of 0.78 %.
The rise
was attributed to the impact of strong increases in the transport and
pharmaceutical-healthcare sectors. Of this, transport rose 3.94 % over May
due to the petrol price adjustment.
Surges
in the city this month include pharmaceuticals and healthcare (3.98 %),
transport 3.94 %, food and catering service 0.32 % , drink and tobacco (0.12
%), garment and footwear (0.03 %) and household appliances (0.01 %) and
culture and entertainment (0.39 %).
Bank
guarantees for property meant to safeguard buyers
A
regulation ordering bank guarantees to become mandatory for property
purchases, which was to be completed in the future, has caused mixed concerns
among property developers and buyers.
Following
Article 56 of the Law on Real Estate Business, to take effect on July 1,
property developers, before selling or leasing unfinished or future property,
must obtain guarantees from eligible commercial banks as assurances of their
financial obligations to buyers.
Accordingly,
in case property developers fail to hand over apartments to buyers following
commitments, banks would be responsible for returning the buyers' money, in
line with signed contracts.
The
regulation was expected to protect the rights of home buyers, as well as
contributing towards cleaning up the realty market.
According
to Nguyen Manh Ha, Director of Housing and Real Estate Market Management
Department, this would eliminate risks for home buyers, as their money would
be guaranteed by banks, which would strengthen overall buyers' confidence.
Further
economic expert Nguyen Tri Hieu said the regulation would stimulate home
purchases and improve liquidity in the real estate market. Financial disputes
arising when property developers failed to complete their obligations were
also expected to be reduced.
Huynh
Trung Minh from HDBank was quoted by Tri Thuc Tre (Young Intellectual) online
newspaper as saying that bank guarantees reflected that the project met
certain standards and development potentials. Therefore, home buyers could
feel secure when spending money on guaranteed projects.
However,
there were concerns that the regulation would increase property prices and
cause disadvantages to small developers.
According
to Le Hoang Chau, president of HCM City Real Estate Association, guarantee
fees might be a factor to be calculated in property prices, which would push
up selling prices.
Thus, it
would be unreasonable to apply the regulation to all property developers, as
guarantees for projects of prestige developers were, in fact, not necessary,
Chau said. He added that, instead, buyers should be allowed to request a
guarantee if they found it necessary.
While
the regulation was expected to eliminate incompetent property developers and
enhance market transparency, Nguyen Van Duc, the association's deputy
president, worried that this regulation might burden small developers who
could need to purchase less favourable guarantee fees, in comparison to large
firms, or might face difficulties in negotiating with banks for guarantees.
Further,
some voiced concerns that this would undermine their competitiveness and even
force them to leave the market.
However,
no guarantee fees have been disclosed, as the fees should be competitive,
several banks said.
While
several developers were taking pioneering steps in signing agreements with
commercial banks to guarantee their property projects, others remained
confused with the regulation, claiming detailed instructions about guarantee
procedures were urgently needed.
To date,
no decree or circular outlining the implementation of the regulation have
been issued.
Most
recently, Sacomreal signed agreements with OCB, ACB and HDBank to guarantee
all of its projects. Previously, Novaland signed with VPBank to provide
guarantees for its four projects and Thao Dien Company signed with
Techcombank to guarantee its Masteri Thao Dien project in
Meanwhile,
a representative from a property company said he remained unclear about
guarantee procedures due to the lack of instructions.
Doan Chi
Thanh, general director of Hoang Anh Sai Gon Company, said detailed
instructions were urgently needed, as there were only two weeks left before
the regulation was to be enacted.
Ministry
seeks ODA for social housing plans
The
construction ministry has proposed to the government to consider the pilot
use of official development assistance (ODA) in social housing projects.
Deputy
Minister Pham Hong Ha was quoted by vietnamplus.vn as saying that the
construction ministry had sent a document to the planning and investment
ministry at the end of last year, suggesting for the pilot use of ODA from
Korea International Co-operation Agency (Koica) in developing social housing
projects in major provinces and cities.
However,
the document did not receive the planning and investment ministry's approval
as social housing development was not listed as a prioritised sector for the
use of ODA.
The
construction ministry and a Korean housing company had jointly prepared a
project proposal on developing a pilot model for investment in social housing
projects that were proposed to receive finance from Koica.
The
project aimed to prepare a master plan for social housing development, an
investment model and appropriate housing designs to ensure adequate supply of
accommodation for low-income earners by 2020.
In
October last year, the construction ministry reportedly received Koica's
decision that said the project proposal would be considered for financing
from Koica in the 2016 fiscal year, the online newspaper said.
Therefore,
the construction ministry proposed the project should be put in the list of
projects requiring ODA from
According
to the construction ministry, social housing projects should be included in
the list of prioritised sectors for financing from ODA, in line with
established regulations, specifically the Law on Housing and the Decree
38/2013/ND-CP about the management and use of ODA.
Construction
Minister Trinh Dinh Dung recently said social housing development required
efforts to be taken by the government, developers as well as residents,
especially credit and capital support by the government.
Dung
said social housing projects were a long-term programme and
Statistics
showed that the country needed about 700,000 social apartments during the
2012-15 period, and another 200,000 would be needed by 2020, with Ha Noi,
State
Treasury issues bills to raise funds
The
State Treasury has put up for sale VND6 trillion (US$275 million) worth of
treasury bills this week and plans another auction for VND6 trillion next
week to raise funds for the central State budget.
The
treasury bills aim to improve budget collections for the State budget while
demand for government bond sales has dwindled since late last year given
impacts of the National Assembly’s Resolution 78 and the central bank’s
Circular 36.
On
Monday, the agency held a bidding for VND6 trillion worth of short-term
treasury bills, including VND3 trillion for a 13-week tenor and VND3 trillion
for a 26-week tenor.
The
bills were registered at the Vietnam Securities Depository and listed on the
Hanoi Stock Exchange. The principle will be paid to investors upon maturity.
Banks
and financial organizations snapped up roughly half of the volume put up for
sale with annual winning coupons of 4% for the 13-week tenor and 4.8% for the
26-week term.
The
issue showed the Finance Ministry’s effort to finance the State budget
deficit.
Up to
now, the State Treasury has fulfilled less than one-third of this year’s
mobilization target of VND250 trillion (US$11.47 billion). Some G-bond
auctions even failed to attract buyers.
The
State Treasury has strongly raised bond yields for all tenors from five to 15
years. However, some foreign financial organizations have kept offloading
G-bonds to reduce their holding ratios as per Circular 36.
Article
17 of the circular regulates the highest ratios of 15% for commercial banks
with the majority State ownership, 35% for commercial joint stock banks,
joint venture banks and wholly foreign-invested banks, 15% for branches of
foreign banks and 5% for non-banking credit institutions.
Furthermore,
Resolution 78 stipulates that the State Treasury can issue bonds only with
tenors of five years or longer.
Philippines
may buy more rice from Vietnam
The
The
director of a big rice export enterprise in the Mekong Delta region told the
Daily that the NFA rejected the bids of
He said
the NFA then decided to allow the three nations to offer new bids but
Though
The
The government
of HCMC has shown a strong determination to put reconstruction of old
apartment buildings on fast track as the process has been moving slowly in
the past years.
Nguyen
Van Danh, deputy director of the HCMC Department of Construction, told a
meeting on deteriorating condo buildings in the city on June 18 that the city
targeted to replace old apartment buildings with total floor space of 445,000
square meters in 2011-2015 but only 60% of the target has been realized.
Danh
attributed this to the stagnation in previous years of the property market, a
lack of State funding for inspections and assessments at the buildings and
limited land for resettlement areas.
Competent
agencies have been able to assess only 40 out of the 178 old apartment
structures subject to checks in the city.
Danh
said the city has 1,244 apartment buildings, including 533 with a total of
50,460 units built before 1975.
The city
plans to demolish deteriorating condo buildings with combined floor space of
120,000 square meters and construct 180,000 square meters to replace the old
buildings in 2016-2020. Priority will be given to the buildings whose quality
is less than half the standard and those classified as extremely dangerous.
The old
buildings to be reconstructed include Co Giang in District 1; the buildings
on the corner of Nguyen Dinh Chieu and Pasteur streets and 11 Vo Van Tan
Street in District 3 and 6bis Nguyen Tat Thanh Street in District 4; Truc
Giang in District 4, Tan Da-Ham Tu in District 5, Ngo Gia Tu and An Quang in
District 10.
Speaking
at the meeting, HCMC vice chairman Nguyen Huu Tin told the Department of
Construction to propose incentives to attract investors to reconstruct old
apartment buildings and urban embellishment projects in the city.
The
department was assigned to suggest a list of old apartment buildings in Thanh
Da in Binh Thanh District and District 10 and those urgently needing
reconstruction. The agency should find effective measures to prevent
investors from selling projects before these structures are built and
completed.
Vietnam’s
tuna exports to Russia boasted strong growth in the first four months of 2015
as export value reached US$1.65 million, up 218.4% year-on-year, according to
the General Department of Vietnam Customs.
Frozen
tuna loins (HS0304) remained the most exported product with a value of
US$1.58 million, accounting for 95% of the total turnover.
Vietnam
also began exporting fresh chilled tuna to Russia this year achieving a
four-month export value of US$66,700
From a
small import market in 2014, Russia has become the ninth largest importer of
Vietnamese tuna in early 2015.
The free
trade agreement (FTA) signed with the Eurasian Economic Union on May 29, with
an import tariff pledge of 0% for all imported seafood items, will open up
numerous opportunities for Vietnamese seafood to enter this market, including
Russia.
Besides
Russia, Vietnam also saw growth in its tuna exports to the US (US$58.2
million, up 3.3%), ASEAN (US$10.06 million, up 13.8%) and Mexico (US$3
million, up 91.7%).
As shown
in statistics from the International Trade Centre, Vietnam was the third
largest tuna exporter to Russia in the first quarter of 2015, behind Thailand
and China.
Impacts
of FTAs on state budget collection discussed
A
workshop assessing the impacts of free trade agreements (FTAs) on State
budget revenues was organised in Hanoi on June 19 by the National Institute
for Finance (NIF) and the US Agency for International Development (USAID).
According
to NIF Deputy Director Truong Ba Tuan, the USAID and NIF have been working
together in the Vietnam Governance for Inclusive Growth (GIG) project to
establish a set of assessment tools for FTA impacts on key sectors as well as
state budget collection.
The
workshop would provide a platform for attendees to discuss methodologies for
assessing the potential impacts of FTAs, such as the Trans-Pacific
Partnership (TTP), on state budget, he noted.
Prof.
Inkyo Cheong from Inha University in the Republic of Korea (RoK) said that
the analysis of the TPP impacts on state budget is very complicated,
requiring evaluation of all components of the TPP.
NIF
Director Nguyen Duc Thanh believed that Vietnam joining FTAs might reduce
direct tax collection from import-export activities, however economic growth
fueled by the FTAs would benefit state budget in return.
As the
private sector, including the SMEs, is the key driver of economic growth,
there should be reform of administrative institutions and favourable business
climate for them to develop, the director added.
Integration
has double-edged effect on domestic production, requiring efforts of not only
the government but also the entrepreneurs. Domestic firms need to actively
look for information on the FTAs and its impacts on the market.
Vietnam
is seeking to conclude the TPP with eleven other countries which is expected
to fuel the country’s economy by reducing trade barriers, boosting exports
and increasing employment opportunities for its citizens
Oversea
remittances forecast to further flow in real estate market
Oversea
remittances to Vietnam have run into real estate market since last year,
which is expected to continue increasing because of recovery signs in this
market and the revised Housing Law, which will take effect in July to permit
foreigners to buy houses in Vietnam.
Le My
Hoa from District 10 said that her husband was working in China and
transferred home about US$30,000 a year. Because the Vietnamese dong interest
rate has dropped low for the last two years, she decided to withdraw her VND1
billion deposit to buy a 200 square meter land in Cu Chi District.
Director
of an oversea remittance company in HCMC said that the remittances have more
and more been invested in properties for the last two years because of low
reward interest rates for both U.S. dollar and Vietnamese dong.
The
revised Housing Law will further property investment if relevant procedures
are transparent, he added.
The
State Bank of Vietnam in HCMC reported that oversea remittances to the city
reached US$1.7 billion as of May, up 18 percent over the same period last
year and accounting for 35 percent of the whole year’s number.
Remittances
to Vietnam have mainly come from Europe and the US.
Positive
signs in the world economy and the warming real estate market are expected to
increase Vietnam’s remittances to US$5.3 billion this year, it forecast.
The bank
deputy director Nguyen Hoang Minh said that the ratio of remittances invested
in the real estate market was forecast to hike 23-24 percent in 2015. It was
21.2 percent last year.
6,600
apartments from seven new and 13 already existed projects have been offered
for sale in the first quarter this year, a quarter on quarter increase of 40
percent and year on year hike of 137 percent, according to the real estate
service provider Savills Company. That was the highest quarterly increase
since 2011.
The
latest report from the Ministry of Construction showed that the number of
successful transactions grew well, mainly in small and medium apartment
segment and on-schedule projects.
It
totaled 5,850 in the first four months this year, up 2.5 times over a year
ago. April alone recorded 1,600 successful transactions, up 10 percent over
March.
Banks
have step up lending, the number of projects has more and more increased, and
the volume of capital invested in the real estate market has been on the
rise. These together with the remittance flow are feared to signal a property
bubble.
Therefore,
Prime Minister Nguyen Tan Dung has asked authorized agencies to control over
the condition and prevent the bubble in the real estate market.
Fair
trade certification enables exporters to expand markets
Receiving
fair trade certifications would give a big advantage to Vietnamese exporters
of tea, coffee, cacao, spices and handicrafts in expanding their market, as
heard at a recent workshop in Hanoi.
Fair
trade certifications simplify business activities since they focuses on
controlling the production process rather than checking the quality of
products separately. Its registration fee is also less expensive than that of
other certifications, said Director of the Vietnam Rural Industries Research
and Development Institute Nguyen Bao Thoa.
A report
on the potential of fair trade in the aforementioned commodities indicates
that more than 95 percent of the products were sold through exports. The
markets are expected to expand due to advantageous natural conditions, labour
and material resources.
Under
the EU-funded fair trade promotion project in Vietnam, enterprises will
receive support to build business plans for the EU market and register for
fair trade certifications. Participants will also receive training and have
opportunities to join domestic and international trade fairs.
Nguyen
Thu Thao, a representative from the Vietnam Handicraft Exporters Association,
said all handicraft firms with certified fair trade standards in Vietnam
could join exports at different scales. The sector’s export turnover reaches
nearly 3 million USD per year and more than 65 percent of importers are fair
trade customers, mainly the US, Europe, Japan, Australia and South America.
However,
according to Nguyen Thi Hong Minh, an expert in fair trade promotion
projects, only a few businesses have received fair trade certifications so
far: five from the handicraft sector, 11 from coffee, three from tea and none
of the spices and cacao firms have earned the label.
Additionally,
the connection between fair trade recipients is weak, she noted, suggesting
businesses set up a fair trade network at home and the State promote fair
trade in promotion activities.
International
conference talks incentives for industrial development
Senior
officials and international experts gathered at a conference in Hanoi on June
20 to seeks ways for effective industrial development in Vietnam.
Addressing
the event, Deputy Prime Minister Hoang Trung Hai stressed the need for
accurately identifying opportunities and challenges in order to devise
suitable policies for the success of the National Strategy for Industrial
Development through 2020.
He
pointed to the two-digit growth rate recorded for many years by the
industrial sector and positive changes in the sector’s structure, including
the increasing proportion of manufacturing and processing in the total
industrial value and the expansion of the non-State and foreign-invested
economic sectors. The industrial sector has become able to meet the supply of
essential products for other production sectors as well as for consumption,
thus enhancing the economy’s self sufficiency, the Deputy PM said.
At the
same time, he highlighted the existing weaknesses, particularly the low added
value of products and the dependence on extensive growth. The support
industry is under developed, while industrial development planning is of low
quality, lacking a national vision.
In
particular, productivity and labour skill are low compared to many regional
countries, the Deputy PM said, adding that only a small proportion of workers
have good technical skills while the majority only received short-term
training.
Furthermore,
technologies in use in the country are mostly outdated even compared to those
used in regional countries, according to the government leader.
He said
therefore, the country faces great challenges in realising its goal of become
an industrialized economy by 2020.
Outlining
the directions for industrial development policies, the Deputy PM said they
should include incentives for small- and medium-sized enterprises, as well as
support industry.
Other
focuses include training skills for both managerial staff and workers in
tandem with improving infrastructure facilities to draw international
investment, he added.
Deputy
PM Hai also emphasized the protection of intellectual property, saying that
it will help raise the creativity and the development of science and
technology in the industrial sector.
Meanwhile,
Head of the Committee Vuong Dinh Hue stressed the need for developing a
roadmap for developing the national industry with medium- and long-term
visions.
He also
suggested incentives be devised for industries of fundamental and strategic
significance for fast and sustainable economic growth which will help enhance
the economy’s self sufficiency as well as its role in the global production
and distribution network.
Echoing
Hue’s opinion about focusing on key sectors, World Bank Country Director for
Vietnam Victoria Kwakwa called for stronger shift to productivity-based growth.
She also
urged the Government to further promote the private sector, saying that
without a strong and dynamic private sector, the industrialisation process
will be slow. The World Bank is willing to assist Vietnam in developing the
sector, she said.
HCM
City talks tax, customs-related hindrances with firms
State
agencies of Ho Chi Minh City talked face to face with representatives of
locally-based foreign invested companies on June 19 with a view to address
obstacles relating to new tax and customs regulations.
A recent
survey conducted by the Hepza Business Association show that the business
community supports the application of e-customs which has brought about
practical benefits, including shortened time for customs procedure and goods
clearance.
Association
Chairman Nguyen Van Be said however, companies still reported difficulties
when working directly with customs officers. While the most time-consuming
steps are verifying dossiers and considering the rate of goods to be checked,
certain difficulties still exist due to lax coordination among customs
sub-departments.
Dinh
Ngoc Thang, Deputy Director of the municipal Customs Department, explained
some new customs regulations and said businesses should actively update
related policy changes in order to save procedure handling time.
Nguyen
Duc Khanh, an officer of the department, said errors in e-customs systems are
inevitable during the transition from the old system to the new one.
The
sector will use old methods in case the new system encounters errors so as to
ensure goods clearance, he added.
Regarding
tax reform, Deputy Director of the municipal Taxation Department Tran Thi Le
Nga said her sector plans to continue reducing the required time to deal with
tax procedures by 45 hours by the end of this year, compared to 2014.
She
noted the Taxation Department will also increase dialogues with businesses to
timely tackle hindrances facing them.
The
dialogue on June 19 was held by the HCM City Investment and Trade Promotion
Centre, the Taxation and Customs Departments, and the HCM City Export
Processing and Industrial Zones Authority (Hepza).
Vietnam
– ideal destination for Cyprus businesses: ambassador
Vietnam
is an ideal destination for Cyprus enterprises, with great opportunities to
be opened up with the signing of the Vietnam-EU free trade agreement, stated
Vietnamese Ambassador to Italy and Cyprus Nguyen Hoang Long during a
Vietnam-Cyprus business forum on June 19.
Addressing
a crowd of Cyprus business executives at the forum, the ambassador noted that
besides the FTA with the EU, Vietnam has signed a number of free trade
agreements with partners and is negotiating for similar deals with other
countries and regions.
The
scheduled formation of the ASEAN Community of which Vietnam is a member is
also a favourable condition for Cyprus businesses to invest in Vietnam and
expand operation to regional markets, according to the ambassador.
During
the forum, participants also shared ideas on how to make it easier for
enterprises of both sides to meet and connect.
The same
day, Ambassador Nguyen Hoang Long had a meeting with Cyprus Foreign Minister
Ioannis Kasoulides, who spoke highly of efforts that the Vietnamese Embassy
as well as Ambassador Long have made to boost the bilateral friendship and
cooperation between the two countries.
Vietnam
and Cyprus set up diplomatic relations on December 1, 1975. Currently, around
12,000 Vietnamese expatriates live in Cyprus.
New
business council to boost Vietnam-West Australia trade
The West
Australia - Vietnam Business Council (WAVBC) made it debut in Perth on June
18, aiming to provide information for enterprises of both sides and support
their exchanges and promotion of business and investment ties.
Addressing
the event, Vietnamese Consul General in West Australia Le Viet Duyen
highlighted the significance of the council in the context of the growing
partnership between the two countries, with two-way trade surging by 227
percent in the past two years and reaching 1.185 billion AUD (approximately 921
million USD) in 2014.
He said
he hopes the council will help build stronger connections among businesses,
further fostering economic and trade ties between the two countries.
On the
occasion, the diplomat also introduced to Australian firms Vietnam ’s lychee,
a new product entering the Australian market recently.
Meanwhile,
Deputy Premier and Minister of Health and Tourism of West Australia Kim Hames
said he is delight at the impressive trade growth between Vietnam and West
Australia .
He
expressed belief that with the support of the WAVBC, trade partnership
between the two sides will be further bolstered in the future.
WAVBC
Chairman Graeme Sheard said the council will build an operation plan and set
up regular links between enterprises of both sides, while acting as a bridge
for the enhancement of the growing trade ties between Vietnam and West
Australia .
In his
greeting letter, West Australia Premier Colin Barnett highly values the role
that the council plays, saying that he believes that the formation of the
council is a milestone in the development of partnership between West
Australia and Vietnam.
Both
West Australian and Vietnamese firms at the launching ceremony showed their
delight that the new council will serve as an information centre and a venue
for them to enhance their connectivity and partnership.
They
pledged to help the council expand its network in both Vietnam and West
Australia.
Clarity
key to industrial success
The
success of Viet Nam's industrial development strategy depends on accurate
identification of opportunities and challenges, Deputy Prime Minister Hoang
Trung Hai said on Saturday.
Addressing
a conference seeking ways to effectively promote industrial development in
the country, he highlighted several impressive achievements to date.
He said
the sector had maintained a two-digit growth rate for several years and
effected positive structural changes, including a higher proportion of
manufacturing and processing in industrial value and larger roles played by
non-State firms including foreign investors.
The
sector had developed the capacity to supply essential products for other
production sectors as well as for consumption, making the economy more
self-sufficient, the Deputy PM said.
He also
spoke of persisting weaknesses, particularly low value additions to many
products, an underdeveloped supporting industry, low quality planning and the
lack of a national vision.
Productivity
and labour skills were low compared to many regional countries, the Deputy PM
said, noting that only a small proportion of workers had good technical
skills, the majority being recipients of short-term training.
Furthermore,
technologies used in the country were mostly outdated, even compared to
countries in the Southeast Asian region.
These
factors constituted major obstacles to realising the goal of becoming an
industrialised economy by 2020, Hai said.
Outlining
possible solutions, the Deputy PM said policy incentives were needed for
development of both small and medium-sized enterprises (SMEs) and the supporting
industry.
He
stressed the need for quality training for both managerial and technical
staff alongside improving infrastructure facilities in order to attract
foreign investment.
Better
protection of intellectual property would boost creativity as well as
application of scientific and technological advances in the industrial
sector, Hai said.
Finance
Minister Vuong Dinh Hue, who also heads the Party Central Committee's
Economic Commission, said a development roadmap based on medium and long-term
visions would effectively promote the sector's growth.
He
suggested that special incentives are devised for industries of fundamental
and strategic significance. He felt that this would not only enable rapid,
sustainable economic growth and greater self-sufficiency, but also enhance
the national economy's role in the global production and distribution
network.
Echoing
Hue's opinion about focusing on key sectors, World Bank Country Director for
Viet Nam Victoria Kwakwa called for a stronger shift to productivity-based
growth.
She
urged the Government to further promote the private sector, saying that
without a strong and dynamic private sector, the industrialisation process
would be slow.
The Ha
Noi conference, which sought to devise suitable policies for the success of
the National Strategy for Industrial Development through 2020, attracted the
participation of many senior officials and international experts.
VN
firms urged to tap fair trade potential
Fair
trade certification would give Vietnamese exporters of tea, coffee, cacao,
spices and handicrafts a huge advantage in expanding their market, but
enterprises that qualify are far too few, experts say.
The lack
of a national policy on fair trade development meant that such practices were
still sporadic and disjointed with very weak links between sellers and
buyers, and even between fair trade firms, Nguyen Thi Hong Minh, a lecturer
at the National Economics University, said at a workshop held in Ha Noi last
week.
Other
experts noted that there were just five enterprises and production facilities
in handicrafts that had received the Fair Trade certification, while the
coffee industry had 11 units and the tea industry, two units. There were no
firms or facilities in the cocoa and spices industries that qualify for the
special certification.
Awareness
of fair trade practices was different in each industry, Minh said.
A recent
study found that 80 per cent of enterprises in the coffee industry were aware
of free trade certification, 75 per cent in the handicraft industry, 56 per
cent in the cacao industry, 54 per cent in spices, and 27 per cent in the tea
industry.
Demand
for fair trade products in the domestic market was also very low, with just
24 per cent of consumers aware of the certificate, Minh said.
The
market for fair trade products was mainly outside the country, and while its
scale is narrower than non-fair-trade products, it was growing rapidly, she
added.
She said
fair trade was good for sustainable development of tea, coffee, cocoa, spice and
handicraft industries, as also assuring benefits for vulnerable producers,
she said. Boosting this practice would take a concerted effort by all
stakeholders including producers, enterprises, buyers, and policy makers, she
recommended.
Fair
Trade is an international movement that seeks to establish and develop a
global trading system based on the principles of equality in production and
business and respect for a sustainable living environment.
It has
been accepted worldwide for nearly 70 years, and with consumers more and more
concerned about the origins of goods and the conditions in which they are
produced, the trend to choose fair trade products is only likely to rise.
The
workshop was held to announce the report on the assessment of Fair Trade
development potentials in Viet Nam's tea, coffee, cocoa, spice and handicraft
industries.
The
report is a part of the project to promote fair trade in Viet Nam. It was
funded by the European Union and jointly compiled by the Viet Nam Rural
Industries Research and Development Institute (VIRI), the Viet Nam Tea
Association, Viet Nam Coffee and Cocoa Association, and the Viet Nam
Handicraft Exporters Association (Vietcraft).
Binh
Duong posts $1.1b trade surplus
The
southern province of Binh Duong recorded a trade surplus of approximately
US$1.1 billion in the first six months of this year, according to the
provincial Statistics Office.
During
the reviewed period, the province gained more than $8.5 billion from exports,
up 16.6 per cent against the same period last year, with $7.2 billion
contributed by the foreign-invested sector and $1.5 billion by the
domestically invested sector.
Among
its major exports, wooden furniture raked in $1.7 billion in exports, a
year-on-year rise of 15.4 per cent and accounting for 12.6 per cent of the
provincial total export turnover, while garment exports experienced a yearly
increase of 11.2 per cent to $904 million, fuelled by the positive influences
of free trade deals signed with South Korea and the Eurasian Economic Union
(EEU).
Export
revenue growth was also recorded in footwear ($741 million, up 16.4 per cent)
and ceramic products (nearly $51 million, up 6.6 per cent).
During
the January-June period, the province's imports topped $7.4 billion, surging
16.9 per cent from the same period in 2014. Of the amount, nearly $6 billion
was spent on the imports of foreign-invested sector; the import value of the
domestic economic sector was nearly $1.5 billion.
In the
first three months alone, the province exported goods worth $4.22 billion, an
annual increase of 15.6 per cent, while its imports hit $3.63 billion, a 15.5
per cent rise compared to last year's corresponding period. That resulted in
a trade surplus of $591 million.
According
to Binh Duong People's Committee, the State initiatives to clear business
hurdles took effect in Q1, with enterprises recording strong and stable
operations.
Rubber
exports register slight growth
Viet
Nam's local rubber industry made a small recovery as rubber exports in May
recorded higher prices and volume than April, according to the Ministry of
Agriculture and Rural Development.
In May,
the country exported 78,000 tonnes of rubber, earning US$114 million, against
58,000 tonnes exported and $84 million earned in April, the ministry noted.
However,
in the first five months of this year, the exports of Vietnamese rubber had a
year-on-year increase of 30.1 per cent in volume to reach 330,000 tonnes but
a year-on-year reduction in value, of 2.9 per cent to $475 million.
Meanwhile,
the ministry said that in the first half of May, the export price of Viet
Nam's key rubber product (SVR 3L) reached $1,655 per tonne, higher than $73
per tonne in the previous month.
The
export price of SVR 3L rose to $1,700 per tonne in the end of May and $1,790
per tonne last week, according to the ministry.
Due to
the high inventory of rubber on the world market, its export price is
expected to remain low between $1,500 and $2,500 per tonne until 2020, Tran
Thi Thuy Hoa, head of the Viet Nam Rubber Association's administrative office,
was quoted as saying by the Thoi bao Kinh te Viet Nam (Vietnam Economic
Times) newspaper.
The
price will possibly increase after 2020, Hoa added.
The
rubber industry should reduce its output, production costs, and investments
for production, she remarked.
For
consumption, the industry should change the structure of export products as
per market demand, ensure the quality of export products, and expand export
markets, she added. It should also build brand names, increase trade
promotional activities, and offer incentives for the development of the
processing industry.
The
National Agro-Forestry-Fisheries Quality Assurance Department pointed out
that to ensure the quality of rubber products, producers should strictly
monitor the process of extraction, transportation, preservation, as well as
quality checks.
Producers
should also upgrade their production line with modern technologies, the
department observed, adding that it would soon start cooperating with the
association and related offices to set up quality standards for rubber
material and processed products.
Ha
Bac fertiliser factory completes major upgrade
The
upgrade and expansion of the Ha Bac Nitrogenous Fertiliser Factory in Bac
Giang Province, an affiliate of Vietnam National Chemical Group (Vinachem),
have been completed.
The
project cost $US568.6 million and began in November 2010. The project
upgraded the old factory, constructed a second factory and outfitted it in
the latest technology to increase capacity, enhance product competitiveness
and reduce environmental impact.
The new
factory, covering 33.4 hectares, has a capacity of 500,000 tonnes of
fertiliser and generates jobs for 2,000 local labourers.
Speaking
at the event, Deputy Prime Minister Hoang Trung Hai asked Vinachem and the Ha
Bac Fertiliser Factory to hold true to their goals. He noted that the
chemical sector currently meets more than 80 per cent of domestic demand for
fertiliser, an impressive feat.
Knauf
Vietnam announces gypsumboard distributor in southern Vietnam
Knauf
Vietnam Limited, part of Knauf Group- a multinational producer of building
materials and construction systems based in Germany, yesterday presented its
gypsumboard distributor in southern Vietnam, the J & J Joint Stock
Company (JnJ).
Approximately
180 guests from gypsumboard distributors, contractors, architects and media
came together to celebrate this special event with the Knauf Vietnam team.
On the
occasion, general director of Knauf Vietnam David Victor Thomas said,
“Building the foundations for our business and our channel to the market is
one of the most critical aspects of our business. The strategic decision to
select JnJ as our southern distributor was based on a similar approach to the
market and the belief JnJ, like Knauf, will grow into a market leader in
Vietnam building material industry.”
“The
selection of JnJ as our southern distributor will strengthen our nationwide
coverage and help us to promote the Knauf brand and our broad range of
products and systems,” Thomas added.
According
to Thomas, construction of the company’s new gypsumboard plant in Haiphong
city will soon be finalised and the company expects to produce gypsumboard
locally right this year.
“Our new
plant will produce 20 million square metres per year so it is essential we
have our nationwide distribution network in place to enable us to supply the
Vietnamese market effectively,” said Thomas.
In the
past 18 months Knauf Vietnam has set-up offices in Vietnam’s major cities
including Hanoi, Haiphong and Ho Chi Minh City.
The
company has made constant efforts to expand its distribution network
throughout the country.
Knauf
Vietnam is supplying the Vietnamese market with high quality gypsumboard
products such as StandardShield, MoistShield and FireShield, as well as AMF
mineral fibre ceiling tiles which have received positive customer feedback.
Knauf
Group, founded in 1932, currently operates more than 220 production plants in
over 60 countries with roughly 25,000 employees.
Recently,
Knauf has been spreading the market to East Europe and Asia. Knauf Vietnam
gained an investment license in 2013 to build a gypsumboard manufacturing
facility in the northern port city of Haiphong that is expected to be
operational in 2015.
Government
instructs capital mobilization for iron exploitation project
Deputy
Prime Minister Hoang Trung Hai has instructed relevant agencies on measures
to mobilize capital for an exploitation project of the country’s largest iron
ore mine in the central province of Ha Tinh.
He
ordered the Ministry of Industry and Trade to guide shareholders of the
project’s investor to change their capital contribution rates if they fail to
sufficiently provide their parts by July 15.
In case
these changes are still unable to mobilize enough capital, the Vietnam
National Coal and Mineral Industries Group (Vinacomin) would raise their
contribution level which will be considered by the Ministry of Industry and
Trade.
The
Thach Khe iron mine exploitation project was invested by Thach Khe Iron
Company (TIC) that was established in 2007 with a total chartered capital of
VND2.4 trillion.
The
project aims to dig and process iron ore from the mine to supply local steel
mills and exports. Afterwards, a steel billet plant will be built to use this
material source.
Its
implementation has been scheduled in nine years. Exploitation capacity is
expected to reach five million tons a year in the first seven years and
increase to 10 million tons in the next two following years.
The
project was started in September 2009 with a total capital of VND14 trillion
(US$642 million). Of these, 30 percent comes from shareholders and 70 percent
from other sources.
Nine
initial shareholders include Vinacomin, Ha Tinh Minerals and Trading Company,
Vietnam Steel Corporation, Vietnam Posts and Telecommunications Group (VNPT),
Song Da Corporation, the Bank for Investment and Development of Vietnam,
Vietnam Shipbuilding Industry Corporation (Vinashin), Binh Minh Export Import
Production Company and Thang Long Mineral and Metallurgy Company.
They
contributed only VND221.5 billion instead of VND1.3 trillion as per
commitments in 2010.
Mid
2011, the Prime Minister instructed four large shareholders including VNPT,
Song Da, BIDV and Vinashin to withdraw capital from TIC to focus on their
main fields.
Thach
Khe is the largest iron ore mine in Vietnam locating eight kilometers
northeast of Ha Tinh city and 66 kilometers from Vung Ang Seaport. It was
spotted in 1960 with a reserve of 544 million tons.
Authorized
agencies calculated that exploitation output will reach 370-400 million tons.
The
project is expected to make Ha Tinh among the country’s largest heavy
industry centers and biggest steel exploitation and production centers.
Source : VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Ba, 23 tháng 6, 2015
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