BUSINESS IN BRIEF 25/7 Three Australian fruits to re-enter Vietnamese market Three fruits will be removed from the list of 38 Australian fruits subject to export suspension to Vietnam in the next several days, according to an official of the Ministry of Agriculture and Rural Development.   Permission for Australian oranges, tangerines and grapes to enter Vietnam is expected to be given on August 1, Deputy Head of the Plant Protection Department Hoang Trung said on July 22. Australia has conducted sufficient technical procedures and the department is taking the final steps to provide the approval, he noted, adding that the production, processing and preservation of these fruits meet Vietnam’s plant quarantine standards. The two sides are completing legal frameworks, especially those regarding import conditions, to enable other products to enter each others’ markets, Trung said. The agriculture ministry has halted the import of 38 fruits hailing from Australia since January 1 this year as the country was experiencing a fruit fly outbreak. PVFCCo Central lists on HNX PVFCCo Central, a subsidiary of the PetroVietnam Fertiliser and Chemicals Corporation (PVFCCo), officially listed on the Ha Noi Stock Exchange (HNX) on July 23. The first 10 million shares with the code PCE were listed at VND15,000 (US$0.68) each. PVFCCo Central trades in fertilizer and chemicals in the Central and Central Highlands regions of Viet Nam, which are hubs for coffee and pepper cultivation and account for the consumption of 1.7 million tonnes of fertilizer. Set up in the central Binh Dinh Province seven years ago, the company operates in 11 provinces in the two regions. It has a storage capacity of 60,000 tonnes. The company expects to earn revenue of VND2.168 trillion ($99.2 million) and profit before tax of VND19.5 billion ($893,000) this year. Le Cu Tan, Chairman of PVFCCo, which holds a 75 per cent stake in PVFCCo Central, said the listing would promote the company's business and benefit its employees. In the first day's trading, the shares jumped to VND17,000 ($0.77) each on the HNX. Hanoi, Lazio boost two-way trade cooperation Hanoi is keen to foster trade with Italian enterprises, including businesses from Lazio region, and pledges to facilitate conditions for the businesses to do long-term operation in the city. Vice Chairman of the municipal People’s Committee Nguyen Ngoc Tuan met with the Italian Ambassador to Vietnam Cecila Piccioni and Vice Chairman of the Lazio region people’s committee Guido Fabiani in Hanoi on July 23. Tuan thanked the Italian Ambassador for her contributions to the friendship between the two countries in general and Hanoi and Lazio region in particular. He said he hoped the two localities foster cooperation on technology, green economy, especially sewage and waste treatment and management, the environment and tourism. Meanwhile, Guido Fabiani expressed his wish for a Memorandum of Understanding (MoU) on bilateral trade cooperation to be signed in order to accelerate trade relations between the two localities. Hanoi is currently home to 15 Italian investment projects worth US$10 million, accounting for 0.03% of the city’s total registered foreign direct investment. Southeast region sees strong flow of foreign investments The first seven months of 2015 marked a significant flow of foreign investments to the Southeast region, Sai Gon Giai Phong newspaper reported. Accordingly, Dong Nai province is leading the region, recording 57 new foreign direct investment (FDI) projects with a total registered capital of close to US$1.2 billion. Binh Duong province reeled in approximately US$1.1 billion in FDI, exceeding its target for that period. The province attracted 74 new FDI projects in its industrial parks, which are valued at more than US$657 million. Out of the existing projects, 55 increased their capital, bringing in an additional US$287 million. The majority of FDI projects in the Southeast region is concentrated in the support industries, garment and textiles, footwear and electronics. Among the investors, NPC Toda Co. Ltd invested US$30 million in Binh Duong-based Vietnam-Singapore industrial park to produce 16,889 tonnes of plastic per year. Nippon Chemiphar Co. Ltd, a Japan-Vietnam joint venture, supplied US$25 million for the construction of a production plant with an annual capacity of 550 million electronic tablets. Vietnam’s trade deficit reaches 3.96 billion USD Vietnam recorded a trade deficit of 936 million USD in the first half of July, bringing the total number since the beginning of this year to 3.96 billion USD. Statistics released by the General Department of Customs show that, in the reviewed period, total export-import revenues were valued at 13.38 billion USD, a 7.2 percent drop compared to the second half of June. Exports brought home nearly 6.22 billion USD, a decline of 16.1 percent, while imports were valued value at 7.16 billion USD, up by 2.3 percent. The increase in import value mainly stemmed from rising imports in a number of products, including crude oil (up 48 million USD), and gas and petrol (up 45 million USD). As of July 15, the country’s total trade value reached 171.67 billion USD in 2015, up by 12.7 percent compared to the same period last year. Imports accounted for 87.81 billion USD, a year-on-year rise of 16.5 percent. Plastics, rubber, packaging expo opens in HCM City An International Exhibition on Plastics, Packaging and Rubber opened at HCM City's Saigon Exhibition and Convention Centre on July 23. The three-day event has brought exhibitors from India, mainland China, Taiwan (China), Singapore, the Republic of Korea and Iran who are showcasing their latest machinery and technologies used in the plastics and rubber industries. Packaging machinery and materials are also on display. A highlight is the participation by a large Iranian manufacturer of polymers, Amir Kabir Petroleum Co. Ho Duc Lam, Chairman of the Vietnam Plastics Association, said the exhibition would enable the Vietnamese plastics industry to achieve greater heights in the coming years. The sector is forecast to grow at 20 -25 percent in the coming years. With the Trans-Pacific Partnership (TPP) and free trade agreements soon to be in place, Vietnam, besides catering to the growing domestics market, will also grow its exports exponentially, meaning the country needs highly productive machinery, new technologies and the next generation of raw materials and additives. There will be international seminars on plastics on July 24. The 3-in-1 exhibition, organised by Enterprising Fairs India Private Limited, a B2B Exhibition company from India, in collaboration with the Vietnam Plastic Association and Vietnam Rubber Association, closes on July 25.- International, domestic retailers plan market expansion Several international and domestic retail firms are actively adjusting their operations in a bid to expand their market shares, according to experts at CBRE Vietnam Co. Ltd. After opening two Robins department stores in 2014, the regional retail giant Central Group from Thailand is planning to expand its electronics market by acquiring a 49 percent stake of Vietnam’s retailer Nguyen Kim. The Thai firm is also currently negotiating the purchase of shares in another Vietnam-based electronics retailer. Meanwhile, the domestic conglomerate Vingroup recently announced the launch of its four large retail outlets Beauty Zone, ShoeCenter, Sportworld and Fashion Megastore. A number of commercial centres will be opened in the capital city of Hanoi by the end of this year, including a 108,000-square metre shopping mall funded by the Japanese corporation AEON. Vingroup will also open two centres in Dong Da and Long Bien districts. The commercial real estate market is showing positive signs, since the vacancy rate is down by 1.5 percent compared to the previous quarter, reaching 17.1 percent. Rental prices are 6.9 percent lower compared to the previous quarter and 10.5 percent lower than during the same period last year.- Vietnamese consumer confidence index falls by 4.5 points in July Vietnamese consumer confidence index dropped by 4.5 points to 138.6 points in July, still exceeding the 2014 average of 133.3 points and higher than the figure in the same period last year, according to a report published by ANZ Bank on July 22. Reduced confidence in the Vietnamese economy over the next 12 months and five years to come led to the July decline, ANZ Bank explained. Accordingly, only 50 percent (down by 8 percentage points) of people polled expected Vietnam’s finance situation will be in “good conditions” in the next 12 months, the lowest score for this indicator since January 2015. Meanwhile, 13 percent (up by 3 percentage points) forecast ‘bad times’ financially. In the next five years, 64 percent (down by 2 percentage points) of people polled expected the country to have ‘good times’ financially, while 7 percent (up by 3 percentage points) predicted ‘bad times’. Finally, 40 percent (down by 7 percentage points) of respondents believed ‘now is a good time to buy’ major household items, the lowest score for this indicator since December 2014. In contrast, 12 percent (unchanged) of the people polled said ‘now is a bad time to buy’ major household items. ANZ Chief Economist for South Asia, ASEAN & Pacific, Glenn Maguire, said Vietnamese consumer confidence index was in decline compared to its mid-year record high. However, the results continued to reflect the ongoing economic recovery, which is broadening and strengthening. He pointed to the bill proposed by the Vietnam General Confederation of Labour (VGLC) to increase the minimum wage by 16-17 percent in 2016, saying that if endorsed, it would go a long way towards bolstering domestic demand and private consumption against what could be a more uncertain global backdrop. “We continue to remain optimistic about the strength and resilience of the Vietnamese economy’s recovery, particularly the role of consumers, as we look towards 2016”, Maguire stated. India eyes investments in Vietnam The Indian Ministry of Commerce and Industry will push clearance for the structure to promote investments in Cambodia, Laos, Myanmar and Vietnam (CLMV), according to local newspaper. The Live Mint newspaper on July 23 quoted Finance Minister Arun Jaitley as saying that the “Act East” policy of the National Democratic Alliance was intended to cultivate extensive economic and strategic relations in Southeast Asia. “In order to catalyse investments from the Indian private sector in this region, a project development firm will, through separate special purpose vehicles, set up manufacturing hubs in CLMV countries”, he said. The project development company will be managed under the Global Procurement Consultants Ltd, a consulting firm promoted by the Export-Import Bank of India (Exim Bank). The subsidiary will create a number of special purpose vehicles with private entities, acquire a special economic zone or industrial park, develop it and then allocate space in it to business entities in India against payments. Vietnam is expected to be the first destination for investment in which a textile industrial park could be developed. In addition, Vietnam is among 12 member nations joining ongoing negotiations for the Trans-Pacific Partnership agreement. India hopes its presence in Vietnam would smooth the way to enter the markets of developed member countries, including the United States and Canada. Indian exports to the CMLV nations surged 38 percent to 6.4 billion USD in 2013-2014 while imports reached 4 billion USD, up 4.2 percent year-on-year. The four nations are among the fastest growing economies in the region, particularly in the agriculture sector. SOEs restructuring, taxation reform on the table The Public Finance Partnership Group (PFPG) convened a high-level dialogue in Hanoi on July 23, focusing on its 2015-2016 activities to improve the restructuring of State-owned enterprises (SOEs) and reforms of taxation and customs procedures. Amid the ongoing economic restructuring push in tandem with shifts to new growth models, the dialogue enables Vietnamese agencies and foreign experts to learn about each other’s position on financial management, SOEs restructuring and improvement of taxation and customs formalities, Deputy Finance Minister Truong Chi Trung said at the event. Dang Quyet Tien, Deputy Head of the Finance Ministry’s Corporate Finance Department, said 61 out of the targeted 289 enterprises have been equitised, adding that there is still much to be done to equitise the remaining. The Asian Development Bank (ADB)’s chief economist Aaron Batten said the restructuring covers mostly small-scale SOEs. According to the economis, most of the equitised firms have failed to publicise their financial reports, making it difficult to gauge their performance. Only 8 percent of SOEs have released financial statements on their websites, he said. A representative from the Japan International Cooperation Agency (JICA) said equitisation is only the first step towards SOEs restructuring, adding that improving corporate governance following equitisation is a more essential step. Tien revealed that the government has a plan to sell capital in bulk, meaning that investors with sound financial and governance capability and long-term commitments could consider the offer. The government is also considering selling all of its capital in non-core areas to investors, he said, adding that relevant authorities will announce regulations enforcing the release of corporate information to the public. Nguyen Minh Duc, Senior Economist from the World Bank (WB) Office in Vietnam, said taxation overhaul should rely on regulations and taxation management and that tax filing and inspection should conform to international practices. The dialogue was co-hosted by the Ministry of Finance and the WB. Viettel strives to become global telecom group The military-run telecom Viettel is striving to become a global telecom group in civil and military fields by 2020. Director of the group Nguyen Manh Hung said Viettel is the second largest revenue earner among nearly 500,000 Vietnamese enterprises and is running investment in nine outbound markets with a total population of 175 million. Last year, Viettel grossed 197 trillion VND (9.03 billion USD) in revenue representing a yearly rise of 20 percent, Hung reported at a working session with Politburo member and permanent member of the Party Central Committee’s Secretariat Le Hong Anh in Hanoi on July 20. Politburo member Anh said Viettel has become the biggest telecom group in Vietnam after 15 years of development and is expanding its operation in foreign markets. The group has actively participated in social welfare activities to improve local living standards, especially in far-flung areas, he noted. He urged Viettel to focus its financial resources on building itself into a strong group in the defence industry and economics. Earlier, the Politburo member visited staff of the Viettel Research and Development Institute and those working at the group’s building in the Hoa Lac hi-tech park. He was informed on the application of advanced technology in banking, energy conservation, health exams at home, online education and new-generation television services. PM proposes higher tax for nine-seater vehicles Prime Minister Nguyen Tan Dung has asked the Ministry of Finance and other relevant ministries to review tax policies and fix a new import tax rate for high-powered cars. As per the instruction, nine-seater cars with an engine displacement of more than 3.0 litres are subject to a special consumption tax rate of more than 60%. The instruction was given during a recent meeting in Hanoi to discuss policy to draw up a strategy and plans for the Vietnamese automobile industry. Currently, three kinds of taxes are levied on cars smaller than nine-seaters: a 45% tax rate for cars with engine displacement of less than 2.0 litres; 50% for cars having displacement of between 2.0 and 3.0 litres; and 60% for cars with a displacement of more than 3.0 litres. According to the PM's instruction, vehicles with smaller cylinders will enjoy lower special consumption tax and those with larger cylinders will be subject to higher tax. The country's strategic plan aims to develop the Vietnamese automobile industry by 2025, and its vision for the period up to 2035 was approved by the government last year. The plan will focus on manufacturing small-sized nine-seater cars with economical engines. It has also set a target of manufacturing about 1.5 million cars in 2035, of which nine-seater cars will comprise 852,600 units, 10-seaters and bigger will comprise 84,400 units, trucks will make up 587,900 units and MPV will account for 6,500 units. In addition, locally-produced automobiles will account for 78% of the domestic demand. The plan envisages export of 90,000 units in 2035. Indicators augur well for yearly growth New high-profile forecasts are painting a rosy economic picture fuelled by local on-going production and a rebound in the level of consumer consumption. The National Financial Supervisory Commission has forecast that local production recovery and rising consumption will continue to be the key economic drivers, contributing towards a growth rate of at least 6.3% overall for the first nine months of 2015. The economy grew 6.08% in the first quarter and 6.44% in the second quarter. The commission also estimated that the economy would grow 6.5% this year, higher than the 6.2% target set by the government. A recently-conducted survey by the commission on household consumption showed that Vietnamese households tended to resume investment in production since last year’s first quarter. In this year’s first quarter, 31% of the respondents said they were planning to invest more in production and services, up 10% year-on-year. Additionally, 51% said they had deposit at banks, down 11% against the previous survey in 2014’s third quarter, and recording the lowest level since 2012. This decrease was ascribed to households tending to channel their money into investment and production. The National Centre for Information and Socio-economic Forecasting has also predicted that the economy would grow 6.5% this year, thanks to the recovery of local production. The centre has announced two growth scenarios for next year, with the first one predicting that the economy would reach a 6.7% growth rate, and the second one positing a massive 7.1%. These scenarios may come to fruition if production recovery continues strongly, and business-friendly policies are implemented effectively, together with Vietnam benefiting from tariff slashes brought about by various free trade agreements. In its latest report on Vietnam’s economy, ANZ-Roy Morgan maintained its forecast that Vietnam’s economy would growth 6.5% both in 2015 and 2016, thanks to local rising demand, an increasing in foreign direct investment, and a record high in consumer confidence. The report showed Vietnam’s consumer confidence increased 2.9 points to a new record high of 143.1 in June. This remained well above its long-term average of 135.7 and 10 points higher than June 2014. “The increase in June was driven by more confidence in the Vietnamese economy over the next 12 months and the next five years, and also more confidence about personal finances over the next 12 months,” the report stated. Of the survey respondents, 61% expected their families to be “better off” financially this time next year, compared to only 5% who expected to be “worse off”. Roughly 66% expect Vietnam to have “good times” economically over the next five years compared to just 4% who expect “bad times”. In early July, the General Statistic Office release a survey that gauged the opinions of 3,389 local and foreign processing and manufacturing firms in Vietnam. Results showed that nearly 50% of the respondents said their third-quarter business would be “better than the second quarter”, and only 13% forecast that their third-quarter business would be “worse than the second quarter”. Some 52% forecast that their third-quarter production would “increase form the second quarter”, and only 11% said their third quarter production would “decrease from the second quarter”. Prime Minister Nguyen Tan Dung has ordered ministries and localities to make greater efforts to reach an economic growth rate of 6.2-6.5% this year, on the back of enterprises’ ongoing revival. “Enterprises’ confidence is improving, laying the groundwork for us to reach greater growth,” he said. Vietnam going global – more investment headed outwards While Vietnam’s pledged foreign direct investment (FDI) fell 22% in the five months through May from a year earlier, more and more Vietnamese businesses are ploughing money into overseas markets according to official statistics. Vietnam’s outbound direct investment (ODI) has been robust during the early months of the year with the Foreign Investment Agency (FIA) reporting that as of May it has surged to a new high of US$15 billion. Overall, Vietnamese entrepreneurs have acquired proprietary (ownership) interests of 10% or more in 962 overseas business ventures and they now have a presence in 55 countries around the globe. The top three destinations attracting the most money have been Laos having garnered the lion’s share of US$3.9 billion trailed by Cambodia at US$3.2 billion and Venezuela at US$1.8 billion. Other popular destinations receiving healthy cash influxes include Peru with cumulative investment of US$1.3 billion and Russia at US$968 million, according to the FIA. In the early months of the year, investors have broadened the range of their acquisitions to non-traditional markets such as Algeria, Malaysia, Myanmar and the US in their quest to find strategic investment, the FIA said. Regarding operating industries overseas, they have concentrated most heavily in the mining sector, followed by agriculture, forestry and fisheries, but are starting to fan out to other sectors such as IT, real estate, finance and banking. “It's definitely fair to say Vietnamese entrepreneurs are now looking outward much more,” said Professor Nguyen Mai, former deputy chairman of the State Committee of Cooperation and Investment. The nation’s businesses have become financially stronger over recent years, Mai said and the situation is quite surprisingly changing to where they are now actively searching for complimentary markets for expansion. Mai said many domestic firms appear to be more ambitious and are beginning to take an active strategic approach and are exploring how innovations in their home market could also be applied to foreign markets. Many companies are also eying incremental investments in science and technology that contribute to improving their competitive edge and can put them on a safe, steady course to achieving long term sustainable growth, Mai added. “Overseas investment spills over and helps maintain strong political relations with traditional neighbouring nations,” said Dr Bui Duc Thu, a member of the National Assembly’s Finance and Budget Committee. Thu cites specifically the strong Vietnamese investment in neighbouring Laos and Cambodia as a contributory factor fostering the traditional ties of friendship and cooperation among the nations. Dr Thu said Vietnam’s regional and global integration has been on the fast track over recent years and this is spawning the increased ODI, which for the most part has reaped success for domestic businesses. However, there remain risks when investing abroad Chairman of Binh Dinh provincial People’s Committee Ho Quoc Dung cautions, citing the case of several local businesses that went belly up trying to grow rubber in Cambodia. A few businesses report they have encountered difficulties grappling with higher costs of land leases and differences in investment and management policies, so as businesses push ahead for overseas acquisitions they need to be prudent. Seminar discusses preferential tariff to boost exports to Japan On July 21, the Vietnam Association of Small and Medium-Sized Enterprises held a round-table seminar in Hanoi discussing Vietnam’s preferential import tariff when carrying out the 2015-2019 Vietnam-Japan Economic Partnership Agreement. Attendees pointed out the pros and cons and gave recommendations on how to boost exports to Japan, noting that the agreement has offered huge opportunities for domestic products to achieve greater Japanese market penetration, especially agricultural produce, seafood and garments and textiles. Average import duties from Japan to Vietnam will be reduced from 6.1% in 2015 to 3.7% finally in 2018. However, domestic businesses have to face serious obstacles when competing with local Japanese, higher quality products. In order to take full advantages of the agreement, Tran Dinh Thien, Director of the Vietnam Economics Institute, said businesses should focus on increasing the quality of their products rather than productivity. Some economic exports said tax and financial issues are not barriers for domestic businesses to enter the Japanese market. The bottom line is that they have to manage to meet Japanese requirements on the production process, and food hygiene and safety. Garment exports to the US likely to hit US$11 billion The US is the biggest importer of Vietnamese garment products, according to Dang Phuong Dung, Vice President of the Vietnam Garment and Apparel Association (Vitas). Garment exports to the US have increased rapidly from zero to US$9.8 billion over the past two decades. With current robust growth, it is likely to reach US$11 billion this year. Particularly, the export revenue may double after the signing of the Trans-Pacific Partnership (TPP), Dung forecast. Businesses will enjoy many benefits from TPP, typically tariff cut. Vietnam garment products are normally levied import duties of 15-16%, however, the duties will be cut down to 7-8% after the country joins TPP. Binh Phuoc makes wild vegetables a specialty ‘Rau nhip’, a wild vegetable which is highly nutritious and easy to grow, grows well even in home gardens. During the war ‘rau nhip’ was part of the daily diet of soldiers stationed deep in the jungle. Today people in Bu Dang district, Binh Phuoc province, grow this vegetable in their gardens as a source of income. Dieu Kinh of hamlet 5 in Bu Dang district has about 36 square meters of land planted in ‘rau nhip’ and cashew trees. Kinh says ‘rau nhip’ grows wild in the forest but it can take most of the day to go into the forest to pick enough for a meal. As forest areas shrink ‘rau nhip’ grows scarcer. For three years, Kinh and his family have grown ‘rau nhip’ at home, providing a stable income with relatively little work. Many traders order directly from him. Kinh said, “at first I had to go to the forest to pull up seedlings and bring them home to plant. Two months later new buds sprouted. In the first year we didn’t harvest. Rau nhip grows naturally without any fertilizer.” Dieu Hol, head of the ethnic affairs section of Binh Phuoc People’s Council meets with farmers The family of Dieu Dan, a Dieu Kinh’s fellow-villager, also grows ‘rau nhip’ along with cashew and cocoa trees on 1 hectare. Dan shared, "The price of ‘rau nhip’ fluctuates from US$1.9 to US$2.3 a kilo. When it’s hot, the price can go up to US$3.3 a kilo. In a month his family can harvest about 20 kilos of young leaves from 36 square meters." “The model is very convenient. When we’re too busy, we still have the vegetable for daily meals. Planting ‘rau nhip’ also helps prevent erosion,” added Dan. Statistics show that more than 200 hectares in Bu Dang district are used to grow ‘rau nhip’ in combination with other crops. According to experts, thanks to its adaptability, ‘rau nhip’ can be grown quickly with little cost or effort. All it needs is water. And ‘rau nhip’ is shade-tolerant so it can be grown alongside other plants. Nguyen Van Giang, an official of Bu Dang’s agricultural extension station, says if ‘rau nhip’ is planted in the shade of cashews in very moist soil, it grows very well. Giang explained, “local farmers often pull up seedlings in the forest to intercrop in their gardens or around their houses. This reduces the need to go to the forest to pick up ‘rau nhip’, provides safe, home-grown vegetables for daily meals, and reduces the erosion of garden soil. ” Rau nhip has become a new delicacy, popular with tourists and locals alike. Tran Mai Nho, a small trader in Bu Dang market, noted, “the vegetable can be made into simple but tasty boiled or fried dishes or soups. Many tourists buy it. Because it is a wild plant, it’s clean, without any fertilizer.” Growing wild vegetables at home is providing many nutritional and economic benefits, while conserving valuable natural resources and diversifying the diets of ethnic minority people in Binh Phuoc province. Textile and garment exports to TPP market up 70 per cent Viet Nam's garment and textile export turnover to countries taking part in the Trans-Pacific Partnership (TPP) negotiations increased by 69.66 per cent in the first five months compared with the same period last year, according to the latest report from the Viet Nam Textile and Apparel Association (Vitas). Exports to this market also accounted for 66.8 per cent of the sector's total export turnover. Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Viet Nam are members of the TPP. Exports to the US ranked top with US$4.05 billion, accounting for nearly 50 per cent of the export value to the countries joining the TPP agreement, a 53 per cent increase on the year. Viet Nam's textile and garment export turnover to the US is expected to reach $11 billion by the end of the year, Dang Phuong Dung, Vitas deputy chairwoman told Hai Quan (Customs) newspaper. Textile and garment export turnover to the US has increased dramatically in the past 20 years from zero to $9.8 billion in 2014. The turnover could be doubled once the TPP is signed, she said, adding that it would benefit local enterprises. Garment products' import taxes would be reduced by 7 to 8 per cent, replacing the current 15 to 16 per cent. However, the TPP would also require information about the goods' origins, which is difficult for domestic firms. Viet Nam's textile and garment sector needs improvement when it comes to naming raw material sources. The chairwoman called for ministries, society and the Government to help attract foreign investment, and encourage relationships between domestic producers and raw material producers. Only by doing those things could Viet Nam satisfy the requirements on goods' origins, she said. According to the newspaper, US Fashion Industry Association President Julia K Hughes said many US companies were willing to seek supply sources from nations joining the TPP agreement once it took effect. Viet Nam was ranked highest in terms of its ability to draw new businesses, Hughes said, so she advised Viet Nam utilise its new opportunities. Vitas forecast that the country's textile and garment export turnover could reach $27.5 to $28 billion this year. HCM City steps up export promotion efforts The Investment and Trade Promotion Centre of HCM City yesterday opened an international exhibition and business centre (Saigon Expo showroom) to promote exports of typical Vietnamese products. Located at 92-96 Nguyen Hue Street in District 1, the showroom also aims to help businesses market their exportable products to domestic and foreign customers and explore opportunities to expand exports. Eighty three companies from HCM City and other provinces and cities are displaying food and foodstuffs, cosmetics, handicrafts, beverages, confectionery, garments, tea and coffee, sauces, spices, drugs and healthcare products, plastic products, and household utensils there. ITPC director Pho Nam Phuong promised to provide businesses with information about export markets, information about importers there, demand, and networking opportunities and to send information about them to foreign consulates in Viet Nam and Vietnamese trade offices abroad. Weekend sample sale sessions would be organised from 5pm to 9pm at the showroom to enable companies to showcase their new products, she said. This way the companies could directly contact customers to learn about their demands and tastes, and gradually improve their quality and designs to fully satisfy consumer demand, she added. Nguyen Thi Nhung, assistant manager of Tan An Foods Processing Export Co, Ltd, which exports cashew nuts mostly to the US, Australia, Hong Kong, and the EU, said by displaying its products at the show the company hoped to popularise them. An executive from Tai Tai Production and Trading Joint Stock Company said the company hoped to find business partners to expand its export markets. Speaking at the opening ceremony, Nguyen Thi Hong, deputy chairwoman of the HCM City People's Committee, said enterprises, especially small- and medium-sized ones, should take advantage of the showroom to market their products. She said the city's exports (excluding crude oil) topped US$11.28 billion in the first half of the year, a year-on-year surge of 8.14 per cent. IT components get preferential tax treatment A preferential tax rate of 0 per cent will be imposed on imported materials, ancillary parts and components used for manufacturing major IT products from August 13, 2015. A worker assemble mobile phones at a factory of Viettel Group. Imported vibrating motors will get a preferential tax rate of 0 per cent from August 13, 2015. VNA/VNS Photo Phuong Chi This was stated in Circular No 101, issued on June 29, 2015, by the finance ministry (MoF). Major IT products, regulated in Circular No 164 issued by the MoF on November 15, 2013, include laser-etched rubber keyboards with polyurethane coating and temperature resistance of 150 degrees Celsius, and vibrating motors for mobile phones of no more than 30mm diameter and a capacity of less than 0.5W. Enterprises are required to register their list of imported materials, components and ancillary parts with sub-customs departments before importing the first batches of goods. While completing the customs procedures, the companies must submit official documents to request for a preferential tax rate for their imported items. Grocery market recovering in short term The urban four key cities and rural Vietnam have both continuously suffered from a deceleration in grocery growth since early 2014 but positive signs can be observed in the short term. According to the latest report from Kantar Worldpanel, released on July 21, value growth rose 1.9 per cent in urban areas and 7.2 per cent in rural areas. In general, almost all sectors have recovered their momentum, except for packaged foods. Beverages continue to perform well within the FMCG market, with value growth up 13 per cent in both urban and rural areas. “Both local and international players are expanding into new territories,” said Mr. David Anjoubault, General Manager of Kantar Worldpanel Vietnam. “While local brands perform better among lower income groups, high earners are heading more towards international brands. In Vietnam, about 70 per cent of FMCG categories reach less than 50 per cent penetration (on a yearly basis), and this implies every brand still has plenty of headroom for growth.” In terms of retail landscape, Kantar Worldpanel see street shops in urban areas lag behind the market but modern trade is still struggling to pick up additional share, not helped by the decrease of hyper/supermarkets. However, specialty stores and mini-stores saw the most outstanding performance in urban areas. For rural areas, street shops keep growing their dominance, with a 77 per cent share. Kantar Worldpanel’s annual Brand Footprint report revealed the Top 10 most-chosen FMCG manufacturers and the most-chosen brands by sector (health & beauty, homecare, food & beverages). The top three positions are the same as last year in both the urban and rural rankings: Unilever, Vinamilk, and Massan. Top rising brands include Dove, Fami, Diana, Milo, Aba, Coca-Cola and TH True Milk. Vingroup boosts investment in clean agriculture VinEco, a subsidiary of Vingroup, signed cooperative contracts on July 21 with three partners on receiving high technology for agricultural production, with a total value of over VND1 trillion ($46.5 million). The three partners come from countries renowned for agricultural production, including NETAFIM and Teshuva Agricultural Projects (TAP) from Israel and KUBOTA from Japan. The two countries have advanced agriculture technology and are superior in research, development, and the effective application of science and technology in agriculture. The partnerships will provide a high-tech platform to VinEco in large-scale agricultural production following GLOBALGAP and VIETGAP standards. TAP and NETAFIM will provide technology in greenhouses and net houses on a scale of up to 60 ha as well as automatic irrigation systems. They will also provide the technology for the proactive nutrition of crops on an area of nearly 1,000 ha in the first phase. Meanwhile, KUBOTA will transfer agricultural machinery and equipment to all VinEco farms around the country. VinEco will also receive techniques in the pre-processing and storage of agricultural produce after harvest, to guarantee fresh products and meet safety requirements for food hygiene as well as nutritional content. Under the plan, VinEco will put its first greenhouse into operation to start the production of clean vegetables in the fourth quarter of 2015. A day before this signing VinEco and the Dong Nai Food Industrial Corporation (Dofico) also signed a strategic cooperation agreement to manufacture and supply clean agricultural products to the market. The two will also develop agricultural processing using high technology on a large scale, create distribution channels, and transfer technology and experience in the production of clean agriculture. “The agricultural investment in Dong Nai through the cooperation with Dofico has important implications for developing the clean agricultural strategy of Vingroup, providing products to the market and bringing employment opportunities to local workers and those in the surrounding area,” Vice President of Vingroup, Mr. Le Khac Hiep, said at the signing ceremony. Japanese technical barriers an issue The most important factor now for Vietnamese enterprises exporting to Japan is not tariff barriers but technical barriers, Mr. Nguyen Son, Deputy Director General of the Interagency Steering Committee for International Economic Integration, told the Conference on Preferential Import Tariffs for Vietnam to Implement the Vietnam - Japan Economic Partnership Agreement (VJEPA). Since the VJEPA was signed in 2008 the most problematic matter for Vietnamese enterprises has become such technical barriers as quality and rules of origin. The quality requirements regarding exports to Japan are very strict and many Vietnamese enterprises fail to meet them. By way of example, he said that a few years ago Japan Customs, in a small inspection, found that some shrimp shipments from Vietnam contained antibiotic residues and so decided to conduct inspections on all shrimp shipments to the country. This suggests that barriers relating to quality are the most important matters businesses in Vietnam must overcome. Speakers at the conference also noted that after signing the VJEPA Vietnamese enterprises have also made use of their advantages in exporting to Japan, contributing significantly to growth in export turnover to the country. In first half of this year certain items saw significant increases, such as textiles, by 21.8 per cent, machinery, equipment, and spare parts, by 2.3 per cent, and wooden products, by 3 per cent, compared with the same period last year. Experts also said that in the future Vietnamese enterprises will be in a good position due to import demand in Japan rising and the country increasingly changing from importing Chinese goods to those from Vietnam and other Southeast Asian countries. Quy Nhon to become marine economic zone The Binh Dinh Provincial People’s Committee has announced a government decision on the general planning for Quy Nhon city and surroundings to 2035 and vision to 2050. Quy Nhon has an area of 67,788 ha under the general planning, including the city (28,553 ha), Tuy Phuoc district (21,713 ha), Canh Vinh commune and Canh Hien commune in Van Canh district (13,673 ha), and Cat Tien commune, Cat Chanh commune, and part of Cat Hai commune in Phu Cat district (3,847 ha). Quy Nhon city and surroundings will be developed in the form of a multi-center urban area, with the two main locations being the city and the Nhon Hoi Economic Zone. Quy Nhon city is the political, administrative, economic, cultural, and scientific center of Binh Dinh province and will become one of Vietnam’s main marine economic zones. Nhon Hoi Economic Zone is a driving force for the development of Quy Nhon city and surroundings as well as for the south-central region as a whole. The urban area will have an open structure, linked by a regional transport system. In the future the existing central area of Quy Nhon will be modernized by centralizing tall buildings. Land for education, health, defense and other agencies on Xuan Dieu Street and An Duong Vuong Street will be converted into land for high quality commercial and tourism projects. The coastal area, Nguyen Tat Thanh Street, will be similarly modified. A new development area will be formed in Tran Quang Dieu ward, Bui Thi Xuan ward, Nhon Binh ward and Nhon Phu ward, with an urban area to be built to meet local people’s living demands as well as the living demands of workers at the Phu Tai Industrial Zone, the Long My Industrial Zone, and surrounding areas. Animal feed plant underway in Dong Nai On July 21 the South Korean investment company CJ Vina Agri began operations at its plant producing cattle, poultry, and seafood feed at the Dau Giay Industrial Zone in Thong Nhat district, southern Dong Nai province. The plant is on an area of 8.3 ha and had total investment capital of more than VND294.5 billion ($13.4 million), with capacity standing at 390,000 tonnes per year. It employs some 300 local workers. Speaking at the opening ceremony, Mr. Nguyen Phu Cuong, Deputy Chairman of the Dong Nai Provincial People’s Committee, said he believes the animal feed plant will diversify feed supply sources in the local area, which is the country’s largest livestock region. Grand ambitions at Masan Resources Masan Resources JSC held a seminar for investors on July 20, where is announced it had charter capital of VND7.2 trillion ($2334.6 million) and targeted revenue of VND4.2 trillion (195.3 million) for this year and net profit of VND112 billion ($5.2 million). Masan Resources will be listed on UpCom at the end of the year and its strategic objectives are to create cash flows for merger and acquisition (M&A) activities and to increase shareholder diversification. It has taken over and is operating the Nui Phao tungsten mine project. Nui Phao has a 33 per cent global market share in the tungsten market. The company believes that after acquiring one or two bankrupted companies its market share will increase to 51 per cent. The consultant unit of Masan Resources, Vietnam Capital Securities JSC (VCSC), has released a number of pricing models for reference. Under methods for price/earnings (P/E), Masan Resources’ share price ranged from VND20,500 ($0.94) to VND70,000 VND ($3.21) per share. Based on the value of EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), a method used for enterprises with high depreciation costs, its share value is from VND18,000 ($0.83) to VND105,000 ($4.81). And in terms of PB (price to book) value, the company's share price is VND15,091 ($0.69) per share. Shares in Masan Resources have the potential to have a common dividend at a high cash rate, as the company plans a dividend of 50 per cent of income each year. Eximbank finally holds AGM The Vietnam Export Import Commercial Joint Stock Bank (Eximbank) held its annual general meeting (AGM) on July 21 after two delays and about three months later than other banks. The biggest concern for the bank is a change in Board of Management now that the 2010-2015 period is coming to an end. A vote on a new Board, however, was not conducted. The delay in the vote has been approved by central bank, with the bank to hold an extraordinary meeting to do so. In the first half of the year Eximbank earned revenue of VND570 billion ($26.12 billion), reaching 57 per cent of the annual plan. Charter capital stood at VND12.35 trillion ($556.12 million). Total assets are targeted at VND180 trillion ($8.25 billion) for this year, an increase of 12 per cent again 2014, and mobilized capital of VND126 trillion ($5.77 billion), an increase of 24 per cent, and outstanding credit VND108.75 trillion ($4.98 billion), 11 per cent higher than in 2014. Profit before tax is to be VND1 trillion ($45.84 billion), with a dividend payout of 4.8 per cent and a Return on Equity (ROE) ratio of 5.4 per cent. Due to the high level of provisions, as 20 per cent of its bad debt were sold to the Vietnam Asset Management Company (VAMC), profit before tax was only VND69 billion ($3.16 million), accounting for 3.8 per cent of the 2014 plan. As at the end of 2014 its bad debt ratio was 2.46 per cent and its Capital Adequacy Ratio (CAR) 13.6 per cent. The bank will not pay a dividend for 2014 due to the high level of provisions set for handling bad debts. Pre-tax profit for SSI in 1H Saigon Securities Inc. (SSI) announced its business results in the second quarter and the first half of 2015 on July 20. Profit before tax in the second quarter increased 52.8 per cent compared to the same period last year, to VND449.1 billion ($20.9 million). The figure was VND679.6 billion ($31.6 million) for the first half, up 13.9 per cent against the first half of last year. The market situation was quite bleak in the first quarter, according to SSI, and its financial safety ratio in June was 723 per cent. Revenue from brokerage activities in the second quarter stood at VND71.2 billion ($3.3 million), an increase of 4.9 per cent compared to the second quarter of 2014. SSI leads in brokerage services on both the HoSE and HNX exchanges, with a market share of 13.52 per cent and 8.54 per cent, respectively. The number of new accounts opened during the first half increased 48 per cent over the same period last year. In terms of investment activities, revenue reached VND181.5 billion ($8.4 million) in the second quarter. Despite increasing 8 per cent against the previous quarter it was down a significant 36 per cent compared to the second quarter of 2014. SSI also announced that it sold its investment in the Southern Seed Company (SSC), adding to the profit in its securities investment activities. SSC is therefore no longer an affiliated company of SSI on the latter’s consolidated financial statements. Transport Minister unblocks obstacles for businesses Minister of Transport Dinh La Thang and related agencies yesterday met with transport associations and businesses from many provinces and cities, listened to them and found ways to deal with obstacles. Chairman of Ho Chi Minh City Cargo Transport Association Bui Van Quan said that many seaports especially those who are not under the Ministry of Transport’s management had not seriously abided by loading capacity regulations. Their staff controls cargo loading in daytime and ignores it at night and some only supervised trucks travelling out the ports but not those getting in, he added. Besides, there has only one weigh station in Nguyen Van Linh Boulevard which works on the direction starting from the ports. Mr. Quan proposed to set up another weigh station in Nguyen Van Linh Boulevard. In addition, there should have two other stations in Hanoi Highway and 25B Interprovincial Road, where container trucks from many provinces such as Dong Nai, Binh Duong and Dak Lak frequently transport goods into HCMC seaports. Minister Dinh La Thang has instructed relevant agencies to keep so close eye on container trucks that  they comply with loading capacity regulations in both day and night time and in port in and out directions. The regulations requiring three-year experience to bed bus drivers is unreasonable because the matter is that drivers’ ability does not depend on their driving time, according to a bus operator from the northern province of Dien Bien. The company suggested the ministry to improve driver training and testing quality instead of focusing on the driving time. Agreeing that the importance is drivers’ ability, Mr. Thang said that he would reconsider this regulation. Some coach operators said that they must register their routes with authorized agencies although there have a route plan. Mr. Thang replied that the companies would no longer have to do the registration and relevant agencies must take the initiative in inspection to ensure that transport firms are operating on the right routes as per the plan. He instructed authorized agencies to grant badges to buses right at stations in holidays after businesses said they wasted a lot of time in asking for badges from the agencies in peak time. Vietnam International Container Terminals lamented that they must pay road maintenance fee for about 40 container trucks that have been operating within the port’s area and not running on roads (built with the state budget). Minister Dinh La Thang said that was wrong and the Ministry of Transport would talk to the Ministry of Finance on this issue. Responding to complaints from some ports’ management boards who reported that they have been charged two kinds of fee from the domestic seaport management board and the marine port management board, Mr. Thang affirmed that they would have to pay one of them. The Ministry of Transport will exchange in writing with other ministries and agencies on issues related to them to unblock obstacles for businesses, the minister promised. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR