BUSINESS IN BRIEF 19/10 Wood exporters urged to get legal Vietnamese exporters should ensure that the timber they are exporting is legal and obtain certificates of origin for the strict EU market, experts suggested at a seminar held on October 14 in HCM City. Michael K. Jakobsen, customer relations manager of NEPCon, a non-profit organisation providing solutions for safeguarding natural resources, said that certification played a key role in mitigating risk of illegal harvesting of wood. In EU, there are many certificate requirements for timber. The EU Timber Regulation (EUTR), which came into force in March 2013, requires all EU member states to have a competent authority to ensure that all companies comply with three core requirements: that operators exercise appropriate due diligence in their sourcing of timber; that they avoid "first placing" illegal timber and products on the European market; and that subsequent traders keep records to ensure that supply chains within the EU can be traced if necessary. "Understand the requirements under which your customers operate, such as the EUTR. This will enable you to have a qualified discussion with your customers," Jakobsen said. Although most certification systems for forest products include legality of harvest among their criteria, these are voluntary, private sector systems. Thus, the accuracy cannot be readily determined by the government. Nevertheless, such certification systems may provide information useful to manufacturers and importers in their efforts to exercise due diligence regarding sources and species of timber. Jakobsen pointed out the risk of legal violations in connection with forest management and harvesting operations. The others include a risk of legal violation during trade and transport of the material throughout the supply chain, and risk of illegal materials mixed in through the supply chain. He suggested that businesses show customers that they are doing due diligence, including knowing their supply chain and evaluating the risk among their suppliers and mitigating the risk. The businesses should also provide an independent third party check of their system. It can help to convince their customers that you are a low-risk supplier. Tran Thi Thuy Hoa, office manager of Vietnam Rubber Association, said in order to promote exporting rubber wood to large foreign markets, businesses should focus on demonstrating its legal source. Farmers should quickly obtain the land-ownership rights to make sure their plantations are legal, while businesses need to declare and certify the origin of their export products. Vietnam's rubberwood products are exported to mainly Japan, China, and Korea. However, if exporters increase exports to the EU market, they can sell at prices higher than those in other markets. The biggest problems of the rubberwood industry are the decline in prices and risks that are equal to or below cost. Rubberwood supply in Vietnam also exceeds demand. The total volume of rubberwood in the market is estimated to be 9 million cu.m round wood, or 1.4 million cu.m preliminary processed wood per year. The Vietnam Woodworking Industry Fair that opened in HCM City yesterday is expected to help businesses in the sector find trade and investment partners and thus bolster their competitiveness amid the country's global integration. Around 280 companies from 21 countries and territories including France, Germany, Hong Kong, Italy, India and Taiwan are showcasing 1,200 machines besides components, industrial wood products and services at over 500 stalls at the Saigon Exhibition and Convention Center in District 7. The event, organised every two years by Vinexad and Chan Chao Int'l of Taiwan, helps companies meet clients, consolidate business ties and familiarise themselves with new technologies, according to Pham Quynh Giang, vice chairman of Vinexad. Phan Thi Thanh Minh, head of the Southern Operation Department, Ministry of Industry and Trade, said: "Vietnam's economy is integrating deeply into the regional and world economies. In 2015 there are many important events related to international economic integration: the Vietnam – Korea free trade agreement signed in early May, the trade agreement between Vietnam and the Asia – Europe Economic Union in late May, the Trans-Pacific Partnership across the Pacific concluded early this month, and the ASEAN Economic Community which comes into being in late 2015." She said the agreements would bring growth opportunities for Vietnamese enterprises, including those in the wood processing and exporting sector, but also fiercer competition. Wood products have become a major export item for Vietnam in recent years, with exports sustaining a high growth rate. Last year shipments of timber products were valued at US$4.3 billion, up 14.1 % from 2013. In the first nine months of this year exports grew 8.5 % to $3.4 billion. 109 state-owned enterprises completes equitisation A total of 109 state-owned enterprises (SOEs) have completed equitisation as of the end of September, said Pham Tuan Anh, Deputy Director of the Enterprises Renovation Department under the Government Office at the Vietnam-Japan Economic Forum held on October 14. The set target is to equitise 289 SOEs this year, which means 180 more should complete the process by the year’s end. Anh highlighted that by the end of this year, some big corporations will be among those to be equitised such as telecom service provider Mobifone, power generating firms under the Electricity of Vietnam (EVN) and PetroVietnam Power Corporation under the National Oil and Gas Group. As of September 28, total State capital divestment was estimated at nearly US$388.5 million, of which US$120.1 million was divested from real estate sector and US$60.7 million from insurance, security and finance-banking sectors. The official said at the current progress, the plans on SOEs equitisation and State capital divestment will be fulfilled. At the forum, Sakakibara Takashi, director of the Japan International Cooperation Agency (JICA)’s SOEs project in Vietnam, recommended making adjustments to share selling methods to make it easier for investors to access. He added that priority should be given to enterprises with stellar business performance rather than trying to sell businesses which are not attractive enough to investors. Public-private partnership in rice value chain discussed Public-private partnership in developing rice value chain was the focus of discussion at a Southeast Asia forum on the future of rice held in Ho Chi Minh City on October 14-16. Rice is a staple food in Southeast Asia, which produces 25% of the global rice output, with Thailand and Vietnam accounting for half of the world-wide rice export. However, their rice value chains are facing a number of difficulties. In Vietnam, farmers are yet to get rich from rice. Ma QuangTrung, head of the Department of Cultivation under the Ministry of Agriculture and Rural Development (MARD), pointed to flaws in the rice production sector, including small-scale farming, inconsistent rice quality, and limited adoption of post-harvest and processing technologies. In particular, Vietnam is one of the 10 countries hardest hit by climate change, global warming and severe weather patterns, which is taking its toll on rice production and consumption, he added. Bas Bourman, Director of the Global Rice Science Partnership from the International Rice Research Institute (IRRI), said despite the annual increase in volume of rice shipments from Vietnam, the value of export has not seen corresponding growth. Farmers still have low income, which prevents them from investing in techniques, seeds and other technologies which can help raise productivity and their livelihoods. In addition, small-scale farming also pushes production costs higher, he said. Several rice value chains are currently piloted in An Giang, Can Tho, Long An and Ben Tre, bringing farmers a 40% rise in revenue. Experts in the field said public-private partnership can help facilitate the application of new farming technology and promote large-scale production, thus improving rice yield and quality. This will raise the added value and the competitiveness of Vietnamese rice on the world market. The forum was co-hosted by the IRRI, the MARD and Bayer Vietnam company, attracting more than 100 policymakers and rice experts. TPP: A global business deal that would benefit Vietnam Vietnam should do well under the proposed Trans-Pacific Partnership (TPP), though it’s too early to tell because the deal has not yet officially been made public. Until then, newspapers and politicians would be wise to dial down the rhetoric. We do know that immediately after the 12 Pacific Rim countries announced the TPP deal, some members of the US Congress and the US presidential candidates began fretting about its pitfalls. Most notably, Hillary Clinton and Donald Trump the two leading US candidates to become the next president of the US have come out strongly against the trade accord as well as a majority of the remaining candidates running for the office. With 30 chapters of trade rules affecting jobs, drugs, labour and industries in every one of the 12 countries participating in the trade talks, the TPP is a bonanza for those bent on derailing the agreement. The problem is of course that not one of the people either advocating or spreading fear about it have read the agreement and it may take up to four to six weeks before the entire agreement is officially made public. In the meantime, politicians and newspapers who have yet to see the complete deal should refrain from spinning it either one way or the other because in all honesty the overwhelming majority of them have no clue about the specific details of the agreement. The potential economic benefits of the TPP to Vietnam simply are too great to dismiss the deal out of hand or reduce it to Twitter-friendly, partisan sound bites. Once the TPP agreement is published, citizens of Vietnam and the US will have at least 60 days and most likely 120 days to review and comment on it. Getting it through the US Congress could take four to six months, according to most authoritative sources, and let’s face the harsh reality that the TPP is in serious trouble of not being ratified by the US. But it’s really kind of difficult to be for or against something you haven’t read, say most reasonable people familiar with the TPP and it is extremely hard to support much of the pure speculation that is being published in much of the Vietnamese press. The devil is always in the details and what the ramifications to Vietnam and the remaining countries that constitute 40% of the world’s economy are at this point, no one can say. The majority of sensible people around the globe at least agree in principle that free trade unimpeded by high tariffs and other non-tariff barriers is a good thing and results in more jobs, production and investment in new technology globally. No doubt if the agreement is ratified by the 12 member states and comes into full effect there will be winners and losers but it will take many years for the full effect of the agreement to unveil itself. What we do know is that Vietnam today has a young talented workforce that has not realized its fullest potential. Regardless of the TPP, if the current workforce would improve its creativeness, increase its productivity, sharpen its competitiveness— more jobs would flow to Vietnam and incomes would be higher. Vietnam needn’t be concerned with the challenges of global competition, unemployment or business failures as the fruits of success come to those who stand up and tackle the challenges head on. Vietnam finds itself – for now at least – in a demographic golden age where 25% of the population is aged between 10 and 24 with the median for the entire population around the age of 29. Their foreign language skills, group working skills and lack of cultural knowledge of other nations are their biggest hindrances as success at any endeavour is almost totally dependent on the ability to effectively communicate with one’s peers. On the upside, Vietnam’s participation in the TPP would mean employees would gain fundamental principles and rights at work and as a result, businesses would increase the quality of the work environment. Meanwhile, Vietnamese workers would have more opportunities to ensure their legal rights are protected as it relates to income, working environment and the right to form trade unions. Nguyen Duc Thuan, CEO of Thai Binh Investment Joint Stock Company said it best when he uttered the words that “the TPP membership provides a superb opportunity for Vietnam’s economy”. Given the challenge more business will flow to Vietnam and it will  result in the creation of more jobs for workers with better salaries and pay — however, Vietnamese workers must step up to the challenges in a professional manner, he stressed. General Director Tran Tho Huy of Thien Nam Elevator Joint Stock Company in turn underscored his views stating that should the TPP come to fruition, the Vietnam workforces stand ready to meet the challenge. However, the ultimate challenge that lies before the country is not the TPP, it’s the challenge to sharpen the work forces competitiveness, improve people’s standards of living, reduce poverty, improve transparency and protect the environment. Vietnam handicrafts showcased at MERCOSUR Craft Fair The Vietnamese Embassy in Argentina attended the 5th MERCOSUR Craft Fair, which was held in Iguazu City, Misiones, Argentina from October 1-12. The annual fair showcased handicraft products at 250 stands from Brazil, Bolivia, Ecuador, Paraguay, Peru, Vietnam and the host Argentina. Vietnam joined the event with the aim of promoting the country’s land, people and tourism potential and accelerating the signing of a sister province agreement between Quang Ninh and Misiones to promote tourism potential of Ha Long Bay and Iguazu waterfall – two of seven natural wonders of the world. Visitors from Argentina and other countries were keen on Vietnam’s traditional handicrafts like embroidery pictures and silk and lacquer products. This is the second time Vietnam participated in the event. After last year’s success, a delegation of Misiones Craft Fund came to HCM City in April to attendan exhibition on handicrafts and wooden products. Forum discusses leading brand building in Vietnam A forum on Vietnam brand matters took place in Hanoi on October 14, analysing the role and importance of brands, building strategies, and brand development and management in businesses. Hosted by the Sage Brand and Communications Academy, the first-ever event, themed “Building leading brand”, brought together over 500 entrepreneurs, managers, administrators and famous marketing experts from leading Vietnamese and international firms. Nguyen Duc Son, Brand Name Strategic Director of Richard Moore Associates, who provides advice for many famous brands such Vietjet Air, Kangaroo, Pico, Nguyen Kim, and Mai Linh Taxi, shared brand building trends in Vietnam and developing leading trademark on the basis of differentiation. He underlined the need to pay attention to quality element, saying that it is key to a leading brand. Trademark management and marketing should be involved by members in the management board of a business, he said, stressing that leaders should have to understand the importance of brand building-related issues in order to outline suitable actions. Meanwhile, General Director of PhinDeli Pham Dinh Nguyen, who engaged in the development of X-Men shampoo brand, mentioned what are right ways for beginners in developing brand, emphasising that a distinction in product promotion is one of the factors decisive to success in brand building. With his great experience in administrating business and successfully developing leading brands for multinational groups such as Sony, BAT, Ericsson, Yahoo, Qualcomm and Microsoft, Vu Minh Tri , General Director of Microsoft Vietnam, said business operation and orientation process will lay a foundation for brand-building strategies, thus increasing the value of brand. Order decline challenges Binh Dinh’s wood exporters Wood processers and exporters in the central province of Binh Dinh are facing a lot of difficulties due to a decrease in orders, despite strong growth in exports in the first nine months of 2015. According to the provincial Department of Industry and Trade, the export value of wood and forest products reached 211.7 million USD during January-September, accounting for 51 percent of the province’s total export turnover and up 28.5 percent against the same period last year. However, orders for the remaining months of 2015 and 2016 are in a downward trend, falling by 30-35 percent. This is blamed for the instability of the world financial market, especially the devaluation of Euro against US dollar. To overcome difficulties and reach the set yearly target of 320-325 million USD in wood and forest product export, or a year-on-year increase of 5 percent, the local wood processing sector is required to carry out measures to increase product competitiveness, particularly in terms of price, material and design. Chairman of the provincial Association of Wood and Forest Products Do Xuan Lap suggested businesses remove unnecessary production costs and strengthen cooperation with material suppliers in order to reduce money spent on materials. Enterprises were also urged to use new materials in wood processing like plastic and metal, which are favoured by foreign consumers, to avoid dependence on imports. They should promote consumption in major and traditional markets such as the EU, the US, Canada, Australia, Japan and the Republic of Korea, he added. Prominent local and regional agro-industrial products selected Up to 100 locally- and regionally-famous farm, handicraft and industrial products will be named and honoured in Hanoi, Director of the Department of Local Industry under the Ministry of Industry and Trade Ngo Quang Trung told the press on October 14. The event, which will be broadcast live on the Television of Vietnam (VTV) on October 17, forms part of activities under the Government’s National programme on industrial promotion to 2020. It aims to feature products with high quality and those with potential for industrial production and winning bigger market shares, promisingly spurring rural industrial development. Targeted products include handicraft products, processed agro-forestry-fishery products and beverage, machineries and mechanical spare parts, from rural workshops across the country, according to Trung. They represent the potential of each region or each locality, said Vu Hy Thieu, vice head of the jury. The programme helps inspire rural industrial workshops to invest more in renewing their technologies to raise product quality, thus enhancing their competitiveness at home and abroad, Thieu added. The programme will make it easier for the selected products to find potential partners and to be showcased at trade fairs, exhibition events, said Vice Deputy Director of the Department Phan Van Ban. Trade-services help Can Tho fuel economic growth With its favourable transport network and infrastructure system, the Mekong Delta city of Can Tho has attracted more investment in the fields of trade and services, which is hoped to energise the local economy. To become an economic and trade-service hub in the region, Can Tho is working to shift its economic focus towards services, trade, industry and hi-tech agriculture. Diversifying potential services in such areas as finance, trade, tourism and those with high added value and maximising advantages of transport, science technology and communication information are one of the solutions to that end. Regarding domestic trade, the city encourages investment in developing trade centres and large-scale supermarkets in populous areas and new urban areas. Local authorities pledge to facilitate the development of various forms of financial services in addition to improving the quality of banking, insurance, stock market, and auditing services. According to the municipal Department of Industry and Trade, the total retail sale and service revenue between 2011 and 2015 was estimated at over 316.3 trillion VND (14.2 billion USD), including 80.9 trillion VND (3.64 billion USD) in 2015, ranking third nationwide after Ho Chi Minh City and Hanoi. Trade and services made up 57.8 percent of the local economic structure and recorded an average growth of 15.4 percent over the past five years. In the next five years, Can Tho will continually work towards developing the sectors with an average growth of 8.2 percent per annum. The industries are expected to make up 60.33 percent of the local gross domestic product (GDP) by 2020. From 2011 to 2015, despite difficulties, the city grossed over 7 billion USD from exports and foreign currency earnings, encompassing 1.35 billion USD in export turnover. The outcomes were attributable to the municipal efforts in promoting trade programmes, forging supply-demand links, and implementing price stabilisation programmes. Special attention is paid to reforming administrative procedures, creating favourable business environment and increasing manufacturing capacity and operational efficiency for enterprises. To date, the city has built and upgraded 109 markets and it is home to 12 supermarkets and trade centers. The city also stipulates the expansion of different distribution networks such as convenient stores, mini supermarkets, night markets, floating markets, and shopping centres. In respect of exports, the city holds regular meetings and dialogues with business players to weather their difficulties and support them to seek foreign partners and penetrate into new markets. The city has set up export relations with over 100 nations and territories in Asia, America, Europe, Africa, and Australia. Bac Kan announces its sticky rice trademark A conference was held in the northern mountainous province of Bac Kan on October 13 to announce the local specialty sticky rice brand, Khau Nua Lech Ngan Son. The brand registration certificate was granted to the Ngan Son District Farmer’s Association under Decision No. 49729/QD-SHTT by the National Office of Intellectual Property of Vietnam.  This high-quality variety of rice is cultivated in only a few areas in Ngan Son district. With the goal of expanding its cultivation area, improving its quality and building a brand name, the locality implemented a 24-month project in Ngan Son district from January 2014. Luu Ngoc Quyen, Deputy Director of the Northern Mountainous Agriculture and Forest Science Institute (NOMAFSI), has led the effort. The project is being carried out in Thuong Quan, Thuan Mang, Thuong An, Bang Van and Coc Dan communes with a total area of more than 40 hectares. It will determine appropriate areas for cultivation, to produce the highest yield and quality. The registration of the brand name Khau Nua Lech Ngan Son should help promote large-scale production of the rice variety and protect its trademark. On the occasion, a workshop was organised to review the implementation of the project and discuss ways to develop the brand in the future. Indian businesses eye investment opportunities in Nam Dinh An Indian business delegation led by Vishvajit Sahay, head of the Ministry of Heavy Industries and Public Enterprises’ heavy industry department has visited and studied the investment and business environment of the northern province of Nam Dinh. During the working session on October 13 with local leaders, Indian investors and businesses paid attention to Nam Dinh’s investment incentives, especially in garment and textiles, while learning about industrial zone and transport infrastructure and local labour forces. Vishvajit Sahay said Indian enterprises want to expand their business to other countries, including Vietnam. The Indian government always creates conditions for Vietnamese firms to invest in India and vice versa, he said, adding the government decided a preferential credit for projects in the Southeast Asian nation. Chairman of the provincial People’s Committee Doan Hong Phong briefed the guest on Nam Dinh’s potential and advantages such as young, abundant labour forces, comprehensive transport and energy infrastructure and safe investment climate. Nam Dinh has issued a number of policies and incentives on investment, especially for major projects using clean technology in agriculture, ship building, pharmaceuticals, electronics, information technology and tourism, he added. Japanese firm looks for thermal power plant building location J-Power, the largest electric utility in Japan, is seeking a suitable location to build a 1,200MW coal-fired thermal power plant in the central province of Quang Ngai that has a deep-water port serving major colliers. J-Power chief representative in Vietnam Wataru Okuyama made the statement while working recently with provincial leaders to unveil his company’s investment plan in the province. Okuyama said, according to a preliminary survey the Quang Ngai-based Dung Quat Economic Zone (EZ) is seen as one of the best locations for J-Power’s construction plan. A delegation of 13 leading Japanese businesses involving in energy, health care, insurance and construction is destined to travel Vietnam next month to learn about the business climate and investment opportunities in Quang Ngai. Japanese firms suggested pouring investments into agriculture Ministry of Agriculture and Rural Development official Nguyen Do Anh Tuan has suggested that Japanese enterprises should prioritise investments in seed production and breeding, support industries for farming, biological technology and produce maintenance in Vietnam. He also suggested that they develop farms, fish ports and irrigation works, adding that the country had been accelerating administrative reforms and support policies to attract investors into these areas. Tuan noted that, although advantages related to nature and farmers facilitates Vietnam's agricultural development, the country's products still remain cheap with the lack of modern technology application and linkages between production and distribution. Mori Mutsuya, Chief Representative of the Japan International Cooperation Agency (JICA) in Vietnam, said Vietnam can absolutely become a large agricultural producer in Asia, provided that what it manufactures is based more on market demand. Mori also suggested that the country should let market members, such as supermarkets, take part in the supervision of food safety and hygiene, for more efficient distribution chains. He added that Japanese businesses still face difficulties in renting lands in certain areas, such as in the Central Highlands province of Lam Dong, where the construction of hi-tech farming complexes is underway. Trade defence instruments needed amid global integration What keeps Vietnamese firms from using trade defence instruments against foreign commodity flows was the subject of a survey released at a seminar in Hanoi on October 14. Under the poll conducted by the Vietnam Chamber of Commerce and Industry (VCCI)’s World Trade Organisation Integration Support Centre, between 60 and 70 percent of the 1,000 surveyed businesses said they have learned of such instruments since late 2014. One-third of respondents raised concern that some foreign products are sold on the Vietnamese markets at prices lower than in their homelands, which is illegal. Nguyen Thi Thu Trang, Director of the centre, said Vietnamese enterprises have accumulated experience in coping with anti-dumping lawsuits, particularly those in the US against tra and basa fish and frozen shrimps. Though Vietnam’s exports are subjected to about 70 legal proceedings abroad, Vietnam only uses trade defence instruments four times. Also according to the survey, 86 percent of polled businesses are concerned about financial difficulties if they take legal action. Only around 12 percent consider going to court if necessary despite the high legal costs. Economists said only big companies with strong resources and large market shares are willing and able to take trade defence action. Lawyer Pham Le Vinh from ATIM law firm said most of domestic enterprises hesitate to confront foreign rivals when it comes to filing lawsuits. Dinh Thi My Loan, Chairwoman of the Advisory Council on International Trade Remedies under the VCCI, said Vietnamese firms need to adopt trade defence tools to protect domestic business environment and fair competition. Da Nang Airport's international terminal construction from November The Ministry of Transport has announced that construction of an international terminal at central Da Nang Airport will begin in November this year. The construction of the terminal is a step of the country's preparation to serve the Asia-Pacific Economic Co-operation conference planned in Da Nang City in 2017.         The new terminal, housed in 21,000sq.m with a designed capacity of four million passengers per year, is part of the ministry's decision on adjusting detailed planning on Da Nang International Airport by 2020 with a vision for 2030. The work on the new terminal is estimated to cost VND3.2 trillion (US$142.7 million). As planned, the 40,000sq.m airport will meet level 4E guidelines of the International Civil Aviation Organisation (ICAO) with the capacity reaching 11 million to 13 million passengers and 50,000 tonnes of goods per year, by 2020. The airport will be used for both military and civil businesses, especially aircrafts such as the B747s, B777s, B787s, and A320, in addition to A321s and A350s. The airport's available terminal will be upgraded to receive nine million passengers per year from the current capacity of 6 million to 8 million. The upgrading work will include an administrative area covering health quarantine, customs, border gate police, and fire-fighting station, in addition to a parking lot with a capacity of about 1,100 cars. If the number of cars increases, the ministry will study the idea of building a multi-storey parking lot. FDI companies recruit thousands of employees in HCMC Foreign direct investment (FDI) firms announced recruitment of 1,213 employees mainly technicians, electricity and electronics engineers, quality and manufacturing management staff and interpreters in Ho Chi Minh City on October 13. They were recruiting at a job exchange hosted by the HCMC Employment Service Center under the Department of Labor, Invalids and Social Affairs, to connect FDI companies with high-quality human resources together. Some need engineers to work in Japan in fields such as mechanics, mechatronics, automation, construction and machine design. The wages are announced to swing from VND35-45 million (US$1,564-2,000) a month. They have also sought nearly 1,000 laborers with the wage of VND4-7 million (US$179-312) a month. Sea ports look to provide international standard services The volume of cargo handled through seaports across the country increased from 152 million tonnes in 2010 to 201 million tonnes in 2014, according to the Vietnam Seaports Association (VSA). During its eighth congress for the 2016-2020 period in Hanoi on October 15, the association said that its member businesses also increased from 54 to 68 over the past five years. VSA President Le Cong Minh said thanks to a spectrum of renovations in line with the country’s international economic integration policies, the seaport sector attracted the participation of more economic sectors. Deep-water ports in the Cai Mep-Thi Vai port complex in the southern coastal province of Ba Ria-Vung Tau have been formed with Japan’s official development assistance, opening up opportunities for the sector to provide international standard services. Other ports have also revamped their management mechanisms and sought to increase productivity and service quality to meet the market’s increasing demands, he said. However, bottlenecks still remained such as the lack of involvement of all members in handling emerging issues, the congress heard. The association devised orientations and activities for 2016, including expanding membership and improving managerial and administrative capacity and personnel training. At the same time, the association will team up with competent agencies in making the seaport service market transparent, ensuring a healthy and open competitiveness environment. Japanese firms to study hi-tech agriculture investment in Vietnam The Japan External Trade Organisation (JETRO) will organise a visit to Vietnam for Japanese businesses to study the investment climate in hi-tech agriculture in this December, heard a workshop in Toyama prefecture on October 14. Nearly 70 Japanese firms were brought together to the event to get updated on the economic situation, new business policies and regulation in Vietnam. Officials from the Consulate General of Vietnam in Toyama and the northern province of Ha Nam pointed to trade and investment cooperation prospects between the two sides, particularly in hi-tech industry and agriculture. Vietnamese Ambassador to Japan Nguyen Quoc Cuong underlined the bilateral cooperation opportunities stemming from the freshly-concluded the Trans-Pacific Partnership (TPP) agreement and the establishment of the ASEAN Community by the yearend. He confirmed that the Vietnamese Government will continually create propitious conditions and improve the investment environment for Japanese enterprises. Representatives from the Japan External Trade Organisation (JETRO) described Vietnam as a primary destination for Japanese businesses. Ha Nam, in particular, is one of the most attractive localities for Japanese firms thanks to its active business climate improvements and assistance to foreign investors. Located in the north-west of Japan, Toyama prefecture has strength in manufacturing industry, producing electronic spare parts, pharmaceutics, agriculture and seafood. Remittances won't be reduced: experts The central bank's recent dollar deposit reduction would not have a negative effect on Vietnamese remittances from overseas because an insignificant amount of the remittances went into savings. After the central bank's decision to cut the interest rate cap on dollar deposits as of September 29, some were concerned that the move would cause a reduction in remittances sent home by Viet kieu (overseas Vietnamese). Under the decision, the interest rate cap on dollar deposits offered by commercial banks to organisations and companies was cut from 0.25 percent to zero percent per year, while the rate for individuals was be reduced from 0.75 percent to 0.25 percent per year. However, Nguyen Hoang Minh, Deputy Director of the State Bank of Vietnam (SBV)'s HCM City branch, said there would be no effect, while explaining that statistics showed remittances flowing into production and business accounting for more than 70.6 percent of the country's total remittances. Another 20.7 percent went into real estate investment and 6 percent to 7 percent were for Viet kieu's relatives for consumer purposes such as medical treatment or tourism. Besides, Minh is also optimistic about the inward remittances to the country next time to invest in the warming real estate market as the government has so far allowed foreigners to own houses in Vietnam. Overseas Vietnamese remittances to HCM City, which has been one of the top localities nationwide receiving the biggest volumes of remittances, in the first nine months of the year totalled 3.25 billion USD, according to the SBV's HCM City branch. The amount is expected to hit 5.5 billion USD this year thanks to the recent favourable adjustment of exchange rate, the recovery of local businesses and the warming real estate market. Tran Van Trung, Director of Dong A Bank's Remittance Co, said his company targeted a remittance growth rate of 15 percent to 20 percent this year. Last year, remittances to the company reached 1.6 billion USD, up 10 percent against the previous year. Besides the traditional markets of the United States, Australia and Canada, where there are many Viet kieu, his company will also focus on new markets such as Japan and Malaysia, which are Vietnam's large labourer export markets. Sacombank, meanwhile, targeted a remittance of 1.9 billion USD this year, equal to that of last year. According to Vo Tri Thanh, Deputy Director of the Central Institute for Economic Management, remittances play an important role in the nation's economic development and macro-economic stability. Vietnamese living abroad remitted more than 5 billion USD to HCM City last year, 4.2 percent higher than in 2013, according to city's Committee for Overseas Vietnamese. Between 1993 and 2014, Vietnam received total remittances of about 96.66 billion USD, with an average remittance of 4.4 billion USD per year, accounting for 6.8 percent of the country's gross domestic product (GDP) over the period. Remittances into Vietnam have increased about 22.4 percent annually in the past two decades, with an exception in 1997 and 2009 when economies in the world faced a financial crisis. Vietnamese garment firms post solid Q3 results Two of Vietnam's biggest listed garment companies have reported positive results in the first nine months of this year, foreshadowing perhaps a bright future for the country's textile industry under the potential Trans Pacific Partnership (TPP) trade agreement. On October 12, TNG Investment and Trading Co (TNG) reported year-on-year increases of 24 percent in both revenue and net profit in the third quarter which were 627 billion VND (28 million USD) and 25 billion VND (1.1 million USD), respectively. Through the first nine months of the year, TNG posted a combined revenue of 1.42 trillion VND (63.4 million USD), up 38 percent over the same period of last year, while its net profit reached almost 59 billion VND (2.6 million USD), up 47 percent year-on-year. TNG share price has also increased almost 11 percent in the last month, ending up 1.1 percent to 26,400 VND (1.18 USD) a share on October 13. Since garment and textile sector is expected to be one of the industries which will benefit the most from TPP, garment firms are proactively putting in place measures to capitalise on this opportunity. Thanh Cong Trade Textile Garment Investment Co (TCM) is investing in a weaving and dying garment factory with a total investment of 30 million USD during the 2014-17 period. Meanwhile, TNG has put into operation another cotton production line, worth more than 40 billion VND (1.8 million USD) to raise capacity 300 percent. TCM estimated its sales reached 825 billion VND (36.8 million USD), up 32 percent from the same period a year earlier, while profit is estimated at 80 billion VND (3.6 million USD), up 74 percent from a year ago. The company's nine-month net sales rose 12 percent to 2.16 trillion VND (96.4 million USD), equivalent to 78 percent of the company's target for the whole year. Of total eight listed garment firms, TCM is the largest one with a market value of 1.84 trillion VND (82 million USD) as of October 13. It was also the most profitable firm in the first half of the year with sales and profit accounting for 33 percent and 39 percent, respectively, of the entire sector. TCM price rose 1.4 percent on October 13 after the news to 37,500 VND (1.67 USD) a share. The share price has climbed over 10 percent in the past month, fueled by expectations of the success of TPP negotiations. According to a report by brokerage Bao Viet Securities Co's this month, TCM's total revenue could reach over 2.76 trillion VND (123.2 million USD) and after-tax profit is projected at 171 billion VND (7.6 million USD) by year-end, up 7.5 percent and 6.2 percent year-on-year, respectively. Vietnam's textile and garment exports reached 17.1 billion USD in the first nine months of this year, of which exports to the TPP's 12 member countries accounted for around 66 percent, according to the Ministry of Industry and Trade. Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam are members of the TPP, and each country must ratify the pact for it to take effect. According to the World Bank's latest report, Vietnam's garment and textile sector could grow 41 percent, equivalent to an increase of 11.5 billion USD, by 2020, if TPP takes effect. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR