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BUSINESS IN BRIEF 15/9
Nearly
VND19.6 trillion lands in Thua Thien-Hue industrial zones
Some
70 domestic projects and 22 foreign projects worth nearly 19.6 trillion VND
(872.2 million USD) have landed in six industrial parks in the central
The
province is speeding up infrastructure construction as well as carrying out
favourable policies in a bid to attract between 2.5 trillion VND (111.25
million USD) and 3 trillion VND (133.5 million USD) to the parks in 2015.
Authorities
are offering financial support for manpower training to any project using at
least 200 local labourers during the first three years of operation while
assisting projects developing industrial infrastructure with transport
expenditures for promotion activities.
Phu
Bai industrial zone alone has drawn 50 projects in fibres, garments, building
materials, ceramics, wooden furniture and beverages, among others. Upgrades
to the Phu Bai industrial zone are in phase four with 50 percent of the
workload completed.
In the
first eight months of this year, production in the provincial industrial
parks generated over 7.6 trillion VND (338 million USD), an 18 percent
increase over the same period last year. Jobs have been created for nearly
17,900 workers so far.
Vietnamese
investors updated on Vietnam-Laos trade agreements
Some
45 Vietnamese businesses investing in
The
event was held by the Vietnamese Embassy in
A
report of the department said by the end of June,
The
Ministry of Industry and Trade also gave the businesses an overview of the
Vietnam-Lao Free Trade Agreement and Border Trade Agreement signed in March
and June, respectively.
The
businesses were briefed on the benefits that the two agreements will bring
once they become effective.
As
Vietnam and Laos share a 2,000-kilometre border line, the border trade
agreement would open a new chapter for trade relations between the two
countries, fueling two-way trade and fostering regional integration within
ASEAN and the Greater Mekong Sub-region (GMS), Nguyen Van Hoi, deputy head of
the Mountainous and Border Trade Deparment said.
Bilateral
trade between the two nations totalled 1.3 billion USD last year, up 14.2
percent from 2013 and stood at 686 million USD in the first half of 2015.
Conference
looks to develop tourism in northeastern region
The
At the
event, Dr. Nguyen Anh Tuan, head of the Institute for Tourism Development
Research (IFDR), underscored the important role of cooperation among
provinces to develop tourism.
He
pointed to the weaknesses of localities in the region in terms of investment
in tourism promotion and human resource training, as well as in environmental
protection.
According
to Dr Duong Dinh Hien from the IFDR, tourism development in the northeastern
region is hindered by poor infrastructure.
Participants
recommended more contacts between provincial leaders, mapping out specific
master plan as well as financial, consulting and human resource mechanisms
and calling investment from Government and enterprises.
Local
officials suggested possible tours across provinces, including a tourism
triangle of former revolutionary bases in
Northeastern
region includes the provinces of
Vietnam
tourism development strategy by 2020 with vision 2030 eyes at taping beauty
of nature, people and culture in the north eastern, north western and central
highland regions.
Ministry may
adjust tariff rates
The Ministry
of Finance has proposed an adjustment to import and export tax rates for some
groups of goods from January 1, 2016.
The
adjustment is in line with the Standing Committee of the National Assembly's
tax rate framework and
At
present, the ministry is collecting opinions from other ministries,
associations and enterprises on the draft of a new circular on adjusting
import and export tariffs, which will replace Circular 164/2013/TT-BTC.
Under the
draft, the ministry will lower nine import tariff lines for fish and auto
products, with rates of between 1% and 3%, based on
In
addition, the ministry will adjust the preferential rates of import and export
taxes for 10 groups of goods, the Thoi bao Tai chinh newspaper reported.
Regarding
export tariffs, the ministry plans to increase preferential rates for raw
materials instead of finished products to limit the export of materials and
retain them for domestic production instead. The increase in export tax rates
is also aimed at reducing the number of trade fraud cases.
For
instance, the export tax rate will surge from 10% to 30% for rare-earth ores
and from zero to 20% for slag collected from metallurgical processes.
The
new export tax rates will also increase from between zero and 5% to between
10% and 22% for some commodities, including wooden chips, wood used as raw
material for wooden products, aluminium, manganese slag and zinc scrap.
Meanwhile,
the ministry will lower the preferential rates on import tariffs for some
production materials, including a dip from 3% to zero for blocks of yellow
limestone and marble and from 40% to 30% for extracts, essences and condensed
products made from coffee and tea.
However,
the preferential rates on import tariffs will increase to limit imports of
certain items, including fibre made from polyester (up from 0%- 3%) and
animal feed (up from 0% to 2%).
The
industry and trade ministry (MOIT) has set an export turnover target of
US$181.5 billion for 2016, a 10% increase compared with 2015.
The
growth rate has been set in the ministry's report on development targets for
industrial production and trade activities in 2016.
In the
first eight months of this year, the export turnover touched US$106.3
billion, which was lowered than expected due to a strong decrease in the
demand for agricultural, seafood and mineral products.
The
foreign direct investment (FDI) sector has been the main momentum for growth,
with an export turnover of US$74.6 billion, up 14.7%, while Vietnamese firms
contributed US$31.7 billion, down 2.3%. These figures show that local firms
still face difficulties.
The
ministry said the country should continue to promote market expansion and
exports to achieve the target set for 2016.
MOIT
will focus on diversifying markets to reduce the risks from depending on some
markets, while continuing the negotiations to penetrate new markets.
Vietnamese
agricultural and seafood products will need tax reduction and the removal of
unnecessary trade and technical barriers to get favourable conditions for
exports.
The
ministry will raise awareness on the signed free trade agreements in specific
sectors. In addition, it will provide information about the negotiations on
other FTAs to help businesses take advantage of the opportunities for higher
export turnover.
It
said the relevant agencies should implement administrative reforms and
improve the business environment to facilitate firms' production, trade and
exports. Exporters have been asked to actively co-operate with associations
as well as large firms in the processing sector and FDI companies to exchange
information on exports. This could help to quickly resolve the difficulties
faced by domestic businesses.
The
ministry had earlier set an export target of US$160.3 billion for 2015.
The
Japanese official development assistance (ODA), if approved, will be set
aside for the VND32.2 trillion (US$1.42 billion) 3a and the VND33.7 trillion
(US$1.48 billion) 3b metro lines, the management board said this week.
The
first route will stretch around 10 kilometers from Ben Thanh Station in
District 1 to Mien Tay (Western) Bus Station in Binh Tan District, while the other
will span over 12 kilometers to link Cong Hoa Station in Tan Binh District
with Hiep Binh Phuoc Station in Thu Duc District.
The
two metro lines will be built mostly underground, the management board said.
In
June, the Ho Chi Minh City administration began to seek funding for a
feasibility study to build a two-kilometer subway section, part of metro
project No. 5, to connect Cong Hoa Station to another at Tan Son Nhat
International Airport.
The
city has also requested technical support from the Korean government for the
research and implementation of metro project No. 5, according to a document
the municipal government sent to the Ministry of Planning and Investment.
Due to
the urgency of the project,
The
study will provide a basis to help define many important parameters,
including geology, topography, and hydrology, as prerequisites for the
implementation of the project.
According
to the management board, the Cong Hoa-Tan Son Nhat metro line will facilitate
passengers’ travel from the airport to inner city areas and the eastern and
western parts of the city – and vice versa.
Metro
line No. 5 has a total length of 24 kilometers, starting at the
The
two-kilometer section, once completed, will connect to the first phase of
metro line No. 5 , which will go along many streets like Hoang Van Thu, Phan
Dang Luu, Bach Dang, and Dien Bien Phu, linking a station at the Bay Hien
intersection to another near the Saigon Bridge for a distance of around 9
kilometers.
The
second phase of the project will connect the intersection, located in Tan
Binh District, to Da Phuoc Station in Binh Chanh District.
With
ODA loans from
Garments
and textiles sector prepares for integration
Vietnam
is about to sign some important trade deals including the Trans Pacific
Partnership, the EU-Vietnam Trade Agreement, the Vietnam-Korea Free Trade
Agreement, and has already signed an economic agreement with the Eurasian
Economic Union.
To
gain the maximum benefit from these deals,
Since
the beginning of this year,
The
industry will have even greater opportunities when
When
the Trans Pacific Partnership agreement is signed and delivers a gradual
reduction of tariffs, Vietnamese exporters can increase their market share in
the
The
free trade agreement with the Eurasian Economic Union, which was signed in
late May and has already taken effect, could help
Nguyen
Minh Hoa, a representative of the DHA Garment Export Company, told VOV that
the company “has enlisted many steps such as studying products relevant to
different markets and choose channels to buy raw materials for items that
meet the standards of quality and origin.”
Le
Tien Truong, Director General of the Vietnam National Textile and Garment
Group, said finding new markets will allow businesses to increase export
revenues and market share, strengthen their position in traditional markets,
and be more likely to achieve the US$28.5 billion target set for this year.
Truong
clarified the industry’s prospects ahead of the free trade deal with the
Eurasian Economic Union that “the Eurasian Economic Union imports goods worth
US$13 billion a year. Last year
Along
with the top of opportunities have come challenges - an increase in
compulsory rules and required trade, services, investment, and intellectual
property commitments. Dang Kim Dung, Secretary General of the Vietnam
Garments and Textiles Association, suggested a way to overcome obstacles and
prepare for the integration:
“We
call on domestic and foreign enterprises to identify weak elements and
strengthen internal chain links among garment companies and material
manufacturers to make the most of each other’s products. This will allow us
to meet the origin requirements of FTAs and the Trans Pacific Partnership
Agreement.”
To
take full advantage of the trade deals, garment enterprises should invest in
technology and improve designs, patterns, and quality to gain a firm foothold
in the international market.
Vietnam
set to see increased investment from RoK: HSBC
With
many giant Korean firms increasing their investment in Vietnam, more and more
supporting companies from that country are likely to come to Vietnam, the CEO
of HSBC the Republic of Korea (RoK), Martin Tricaud, has said.
Speaking
at a recent press conference in
Pham
Hong Hai, CEO of HSBC Vietnam, said Korean investment in sectors like retail
and entertainment is also set to grow sharply.
Tricaud
said with tax concessions on offer, a growing and stable economy that
averages GDP growth of 6%, and a young labor force,
He
quoted a recent survey by the Korea International Trade Association as saying
that 49% of interviewed businesses named
RoK
has been
Last
year too it had been the top investor with US$7.3 billion.
Around
4,000 RoK companies are in
Despite
a steep decline in earnings from crude oil exports, the government’s revenues
increased 7% year-on-year to VND618.14 trillion (US$27.19 billion) in
January-August, the finance ministry has reported.
It
attributed this to recent adjustments in tax policies that increased tax
payments by 16.5% to VND459.45 trillion (US$20.21 billion).
Crude
oil, traditionally a major revenue source, has fetched just VND47.1 trillion
(US$2.07 billion) this year, a 34.1% fall, though the government recently
reported an 8.7% year-on-year rise in output.
In its
latest report, the finance ministry also said the government’s spending
increased by 8.2% this year to VND733.3 trillion (US$32.25 billion).
Shrimp
exports sink in volume, value
The
latest statistics from the Ministry of Agriculture and Rural Development
(MARD) show that in the eight months leading up to September shrimp exports
spiralled downwards 17.5% year-on-year to US$4.13 billion.
Volatility
in currency exchange rates against the US dollar significantly impacted
shrimp exports MARD reported and were a significant factor in causing
Vietnamese shrimp sales in the eight months to plummet in both volume and
value.
Outbreaks
of Early Mortality Syndrome (EMS) in the eight months January-August also
sent the industry into a tailspin with infected shrimp ponds having
experienced high levels of mortality— in some cases reaching as high as 100%.
As a
result of volatile sales prices and higher feed costs brought about by the
currency rate changes and disease many farmers simply opted to get out of the
market in the early months of the year, drying up inventories.
Markets
around the globe experienced startling drops in shipments MARD reported, with
exports to the
At the
current pace, it is most unlikely shrimp exports will hit the export target
of US$8 billion for the year.
In
addition, stiff competition from
“Although
Professor
Ph.D. Bui Chi Buu from the Agricultural Science Institute
Buu
said one way
Under
this method, shrimp larvae are released into canals of the
This
method has been gaining in popularity and success, Buu underscored.
Book
detailing EU distribution system introduced
A book
guiding the organisation and operation of the distribution system in the
European Union (EU) was introduced to a seminar in
It
covers branding and export recommendations for vegetables, wooden furniture
and handicrafts to the EU, said Deputy Head of the Ministry of Industry and
Trade’s Trade Promotion Agency (VIETRADE) Bui Thanh An.
Almost
all of
Experts
called on domestic firms to thoroughly study the EU’s distribution process
and market demand, given that
They
also put forward approaches to navigating the EU vegetable, interior décor
and handicraft markets.
The EU
surpassed the
The
event was co-hosted by the ministry’s VIETRADE and the Department for
European Market.
Sugar
not so sweet as farmers plant other crops
Sugar
processing plants face a shortage of raw materials as Mekong Delta farmers
have shifted to other agricultural products after many years of losses from
cultivating sugarcane.
The
sugarcane area in the Mekong Delta in the 2015-16 crop fell by 6,000 hectares
compared with the last crop, according to the Viet Nam Sugar and Sugarcane
Association (VSSA).
Hau
Giang province has the biggest area of sugarcane cultivation, but it declined
by 1,500 ha to a total of 11,600 ha.
"Many
farmers in my village shifted their cultivation from sugarcane to other
fruits because of long-term losses," Le Van Doi, 3A village, Vi Tan
commune, Vi Thanh city, Hau Giang Province was quoted as saying in the Nguoi
Lao Dong (The Labourer) newspaper.
Farmer
Le Van Chieu, who lives in 2A village, said that his family had 1.3 ha for
sugarcane cultivation. He sells his products to the Vi Thanh Sugar Plant at a
cost of VND830 (0.4 cent) per kg.
"We
have a profit of VND3 million (US$140) for 10 months of cultivation or
VND250,000 ($11) per month, even lower than rice cultivation," he said.
Thanh
So Phanh, deputy head of the
Nguyen
Hoang Ngoan, deputy general director of Can Tho Sugarcane and Sugar Joint
Stock Company, said that his price for raw materials was higher than that
regulated by the Ministry of Agriculture and Rural Development.
However,
farmers said that sugar plants had complained about the lower quality of
sugarcane and cut prices.
To
cope with the situation, Truong Canh Tuyen, deputy chairman of the Hau Giang
People's Committee, has told the provincial Agriculture and Rural Development
to work with Science and Technology Departments, VSSA, sugar plants and
representatives of farmers to send samples of sugarcane to Can Tho University
for testing.
"The
sugar industry will be faced with a shortage of raw materials this season
because sugarcane production in the Mekong Delta will reach only 3.2 million
tonnes, a decrease of 486,000 tonnes compared with last season," Nguyen
Thanh Long, chairman of the VSSA, said.
He
warned that a price war would occur among sugar plants competing for raw
materials.
"The
sugarcane industry must seek solutions to the long-term shortage of raw
materials for production," he said.
The
new season for sugar plant operation begins in early September.
Safety
standards maximise profits for VN fruit farmers
Fruit
farms in the Central Highlands
Nguyen
Ngoc Trung's 60-ha durian farm in Gia Nghia Town's Dak Nia Commune, for
instance, has met VietGAP standards since 2013.
Trung
now harvests about 400 tonnes of durian a year and earns an income of VND10
billion (US$470,000).
The
harvest time of durian in the
Dak
Nong's soil and weather are suitable for growing durian and mangosteen as
well.
Tran
Quang Dong, who has 8ha of mangosteen orchard in Dak Nia Commune, said
traders and customers preferred the mangosteen for its high quality.
Mangosteens
planted in the province are large, beautiful and delicious.
Dong
has also planted avocados and oranges in his orchard.
Nguyen
Van Xa, deputy chairman of the province's Farmers Association, said:
"Many farms in the province have invested in advanced techniques to
increase fruit quality," earning VND10 billion ($470,000) a year.
The
province's Farmers Association plans to work with government agencies and
local authorities to develop agriculture co-operatives to develop fruit brand
names.
Many
farmers intercrop fruit trees in coffee gardens to increase income, according
to the province's Department of Agriculture and Rural Development.
The
province has 935 farms, including 877 cultivation farms and 58 animal farms.
The farms have an average annual income of VND1.1 billion ($52,000).
They
cover about 7,000ha and have created jobs for about 13,000 locals.
Dinh
Gia Thuy, head of the province's Rural Development Sub-department, said the
farms had been able to use barren lands, especially in rural and remote
areas.
The
farms have also created jobs in rural areas, helping people reduce poverty.
Conditions
in place
According
to the Asia Pacific Market Department under the Ministry of Industry and
Trade (MoIT), in recent years economic, trade and bilateral investment
cooperation between
Export
items to Japan recording large turnover in recent years include textiles,
footwear, handicrafts, furniture, seafood, crude oil, and components for
motor vehicles, machinery, computers, and electronic products, of which
textiles reached $2.7 billion in 2014 and are expected to reach $3 billion in
2015.
To
further promote trade between the two countries, MoIT, in collaboration with
the Embassy of Vietnam in
He
stressed that with a large import market like
Trade
relations between the two countries are on the increase and a great deal of
potential lies ahead given the number of trade agreements
The
Ministry of Finance (MoF) has recently announced preferential import tariffs
as part of the VJEPA in the 2015-2019 period. More than 3,200 tariff lines on
Japanese goods will be completely removed, with a focus on raw materials,
machinery, electronic products, and components. According to a representative
of AEON
When
the TPP is signed
Despite
trade agreements creating many opportunities for businesses in both countries
and promoting trade relations, Vietnamese enterprises still face many
barriers, mostly technical barriers, when exporting goods to Japan. According
to Mr. Ha Duy Tung, Deputy Head of the International Cooperation Department
under MoF, many Vietnamese products exported to
Agreeing,
Mr. Nguyen Son, Deputy Director General of the Interagency Steering Committee
for International Economic Integration, said that a few years ago Japan
Customs, in a small inspection, found that some shrimp shipments from
Mr. Do
Van Dung, Chairman of the Vietnam Enterprise Association in
Vietnamese
enterprises must understand the language and the culture of the country, he
added. For example, labeling must be clear. If sardines are incorrectly
labeled in the Japanese language it will be difficult for sardine exports to
enter the Japanese market. Many Vietnamese businesses do not understand this
issue. “The Japanese, when they do business, do it for their country, not
just themselves,” Mr. Dung stressed.
Therefore,
he added, the capture of information and the understanding of Japanese
business practices is extremely important for Vietnamese enterprises hoping
to gain a foothold in the market. Many Vietnamese enterprises, however,
especially small and medium-sized enterprises, still lack complete
information on the Japanese market. Some have struggled in the country
despite doing quite well in the
After
the signing of bilateral trade agreements there are many opportunities on
offer for Vietnamese enterprises because
Despite
the difficulties and the differences between enterprises from
Key
transport projects costing $32.23 billion
Deputy
Prime Minister Hoang Trung Hai met with the Central Steering Committee on Key
Transport Projects and the Ministry of Transport (MoT) on September 10, where
the ministry reported it had 35 key national projects underway costing a
total of VND724.939 trillion ($32.23 billion).
Deputy
Minister of Transport Nguyen Ngoc Dong said that the key projects are being
monitored by the Ministry to ensure progress and quality.
Some
projects, however, have fallen behind schedule, such as the
Deputy
Prime Minister Hai therefore emphasized that the ministry must continue
instructing relevant parties to fully comply with legal requirements relating
to the Traffic Law and regularly inspect, supervise and encourage investors
and contractors to ensure progress and quality.
He
also said the Long Thanh International Airport project is to be added to the
list of key national projects and ordered MoT to conduct pre-feasibility and
feasibility studies because it is a large-scale project to be conducted under
the public-private partnership (PPP) form.
Rice
exports tumbling
According
to the Vietnam Food Association (VFA), rice exports stood at 3.8 million tons
in the first eight months of the year, down 9 per cent compared to the same
period last year, with an FOB value of nearly $1.6 billion, down 11.1 per
cent, and CIF value of over $1.6 billion, down 15.8 per cent.
On
September 9 the National Food Authority of the Philippines (NFA) announced a
tender to import 750,000 tons in addition to the 1.8 million tons planned for
this year due to climate change affecting its output. The NFA sought bids
from
The
NFA expects to import around 250,000 tons by the end of the year, with the
remaining 500,000 tons to be imported in the first quarter of 2016.
This
is considered an opportunity to promote
The
price of rice in the Mekong Delta has only fallen slightly compared to
August.
Much
gained
After
landing at Hanoi’s Noi Bai International Airport for the very first time
after a tiring six-hour flight from Tokyo’s Narita Airport, Mr. Tadashi, a
Japanese businessman, jumped into a Toyota Vios taxi just after 10pm and
headed to the city center. The car darted along the eight-lane
Nhat
Tan Bridge, Vietnam’s largest suspension bridge, and Vo Nguyen Giap Highway
not only amazed Mr. Tadashi but also millions of international visitors
coming to Hanoi every year and are evidence of the fruitful relations between
Vietnam and Japan, as both projects were funded by official development
assistance (ODA) from the country of the rising sun. ODA from
At an
international symposium on “Attracting and Utilizing ODA in
Japanese
ODA projects have made significant contributions to
Japan
decided to restart ODA to Vietnam in 1992 and all preparatory work was
completed in the same year with the first package totaling JPY44.5 billion
($350 million). Bilateral relations between the two countries continued to
blossom in 1993 with emerging economic cooperation when the relationship was
upgraded to a strategic partnership. ODA has been a constant highlight of
relations since.
ODA
from
The
long-term assistance program
The
major area ODA from
In the
context of State budget resources remaining limited and the tendency of
foreign direct investment and private investment to focus less on
infrastructure, Japanese ODA plays a prominent role in making a difference in
The
difference between ODA provided by
It is
common that when ODA is provided to
There
are three major factors slowing down Japanese ODA projects. Firstly, they
sometimes fall short of achieving their anticipated results due to a lack of
project management skills. Secondly, spending ODA funds is no easy task, as
recipient agencies must prepare reciprocal capital, which is not a strength
of
In a
recent interview with VET, Mr. Mori Mutsuya, Chief Representative of the
Japan International Cooperation Agency (JICA) in
Mr.
Mutsuya also emphasized that there is still a lot of room for enhancing the
gains of local companies directly engaging in Japanese ODA implementation,
particularly in the areas of engineering and project management. “It is,
however, noted that many local companies still face financial challenges in
mobilizing the necessary resources for efficient contract execution,” he
said.
Despite
there still being particular issues, both the Vietnamese Government and the
National Assembly have agreed that
VEPR
identifies issues for livestock from TPP and AEC
On
September 9 the Vietnam Institute for Economic and Policy Research (VEPR)
released the results of its “Impacts of the Trans-Pacific Partnership (TPP)
and the ASEAN Economic Community (AEC) on
Because
the content of the TPP remains confidential the research was based on
scenarios that include tariff removals within TPP and AEC countries and a
scenario of +/- 7 per cent reductions in non-tariff barriers in TPP and AEC
countries.
The
research showed that
The
research analyzed
The
research also suggested certain policy changes, relating to improving
production scales, compensating for losses in tax revenue, and supporting
research and training to apply technology in the sector.
Those
at the press conference for the release of the research acknowledged the
results of the research and the difficulties the livestock sector will face
from
Long
An environment project gets green light
The
Long An Provincial People’s Committee has issued an investment license to
Vietnam Waste Solutions Inc. (VWS) for its
The
project covers an area of about 1,760 ha with total capital of $450 million
and will be implemented in three phases. The first phase, with capital of
$150 million, will be conducted over five years and once completed will treat
40,000 tonnes of waste per day from Long An province,
“The
project applies advanced waste treatment technologies and the transfer of
technology will help improve knowledge among experts and engineers in the
country,” CEO of VMS, Mr. David Duong, told the presentation ceremony. “It
will contribute positively to the protection of public health and create a
green and clean environment.”
It
will be developed, monitored, implemented and operated by US specialists
using the most advanced waste solution technologies in the world.
According
to Chairman of the Long An Provincial People’s Committee, Mr. Do Huu Lam, the
province is committed to facilitating the quick implementation of the project
and the completion of administrative procedures.
This
will be the second environmental project implemented by California Waste
Solutions Inc., the owner of VWS, following the Da Phuoc Integrated Waste
Management Facility in
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR
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Thứ Ba, 15 tháng 9, 2015
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