BUSINESS IN BRIEF 6/7 2016 Viet Nam National Branding week to take place next week The "2016 Viet Nam National Branding" week will take place from July 11 - 17 in Ha Noi, according to the Ministry of Industry and Trade (MoIT). The one-week fair is organised to boost the promotion of the Viet Nam National Branding Programme and support local enterprises. In the framework of the programme, a forum themed "National brand with local products" will take place at the International Convention Centre in Ha Noi on July 13. The forum is an opportunity for local enterprises to share about their typical brands to partners and enterprises. Enterprises are still allowed to register for the programme until July 8. Shakeup needed to promote exports to US: Minister Vietnamese exporters need a revolution to promote shipments to the fastidious US market, said Minister of Industry and Trade Tran Tuan Anh. Vietnamese enterprises should develop a food safety system to ensure high-quality products, Anh noted, adding that consultancy organisations should be established to support businesses in completing relevant exporting process and procedures. In a bid to get a foothold in the market, Vietnamese exporters must better their understanding of US partners, regulations and business practices, the minister highlighted. Statistics from the Ministry of Industry and Trade (MoIT) revealed that two-way trade in the first five months of this year hit 17.8 billion USD, with 14.6 billion USD from Vietnam’s exports. As of May, the US was the 8 th largest investor of Vietnam with 809 valid projects valued at 10.8 billion USD. Although robust growth has been seen in Vietnam’s exports to the US in the past years, experts said that Vietnamese exporters have not fully benefited from the trade expansion due to fierce competition, trade barriers and enterprises’ shortcomings. According to Nguyen Duy Khien, Director of the MoIT’s American Market Department, the US has applied safeguard measures to imports, including Vietnamese farmed fish. Vietnam’s aquatic product shipments to the US have experienced a substantial fall from 2015 as a result of the US Department of Agriculture’s catfish programme, posing great challenges to Vietnamese exporters. Regarding other exports, Khien said that to increase Vietnamese product access to the American market, exporters must build their own brand names while ensuring sufficient supply to meet customers’ demand. Meanwhile, Do Kim Lang, Deputy Director General of the Vietnam Trade Promotion Agency, underscored that it is significant for Vietnamese exporters to deepen their knowledge about food safety and regulations to enter the US market. Former technical expert of the US Food and Drug Administration (FDA)’s Foreign Facility Registration Verification Programme David Lennarz pointed out other difficulties facing Vietnamese enterprises. He said that anti-terrorism measures such as the container security initiative and regulations on food and drug processing facility registration will increase export costs for Vietnamese enterprises. Revenue from Vietnamese exports to the US is expected to shoot up in the coming time thanks to high demands and opportunities brought about by global integration. However, Vietnamese exporters need to overcome trade barriers like food hygiene and registration procedures. Minister urges acceleration of public investment disbursement Minister of Planning and Investment Nguyen Chi Dung said that the ministry has proposed the Government issue a resolution on accelerating the disbursement of public investment capital. The move aims to resolve obstacles and speed up the disbursement for projects in the National Target Programme (NTP) that have not been allocated public investment capital in 2016. According to Dung, the draft resolution allows capital arrangement in 2016 for projects in the NTP and those benefiting from the Government’s Decree 210 on encouraging enterprises to invest in agriculture and rural development, projects using government bonds, a programme on solidifying schools and kindergartens in districts, and transport projects using the remaining capital from the National Roads 1A and 14 projects. This year’s capital is also arranged for special projects with their investment decisions approved after March 31, 2016. According to Dung, as of June 29, the ministry received reports from 53 out of the 56 ministries and central agencies and all the 63 cities and provinces on the progress of public investment capital disbursement. Reports showed in the first five months of 2016, disbursement of State budget capital reached over 81.8 trillion VND (3.6 billion USD), equal to 32.6 percent of the target, while that of Government bond capital was more than 6.9 trillion VND or 18 percent of the goal. Official development assistance (ODA), preferential loans and non-refundable aid the country has signed since 1993 totalled 75.7 billion USD, of which 22.6 billion USD needs to be disbursed in the coming time. Approximate 21 billion USD in ODA and preferential loans is expected to be disbursed during 2016-2020, including 4.75 billion USD planned for this year. However, only 1.85 billion USD was disbursed in the first half of 2016. Mondelez Kinh Do Vietnam ships first batch of moon cakes The Mondelez Kinh Do Vietnam company shipped the first batch of moon cakes to the US on July 4, targeting Asians living in the country. The exported moon cakes have various stuffing, from ground lotus seeds or durian, to green beans with pandan leaf extract, which will be distributed via the US’s Mondelez International. Vu Quoc Tuan, Mondelez Kinh Do Vietnam’s Deputy Director of External Relations and Internal Communications, said the exports have met the strictest standards, including food hygiene and safety requirements set by the US Food and Drug Administration. The company will continue manufacturing moon cakes for domestic consumption, he said. Slow economy threatens targeted GDP growth Vietnam’s economy slowed in the first half of 2016, threatening to stifle the annual GDP growth of the country which was set to hit 6.7 percent by the government this year, according to head of the General Statistics Office of Vietnam (GSO) Nguyen Bich Lam. Vietnam’s GDP dropped to 5.52 percent in the first six months, compared to 6.32 percent in the same period last year as the results of the global economic slowdown and the reduction in domestic agricultural output. The agro-forestry-fishery sector recorded negative growth of 0.18 percent against 2.16 percent in 2015 due to the impacts of the cold spell in the north and the prolonged drought and saltwater intrusion in the south. Other industries also posted lower growth rates, including mining, transportation, hospitality, and particularly, manufacturing & processing that was expected to rally faster thanks to business climate improvement and the implementation of new-generation free trade agreements. GSO head Nguyen Bich Lam recommended a number of measures the government should adopt for the country to achieve its overall GDP growth target this year. He proposed that the government focus its effort to continuously implement the Master Plan on economic restructuring between 2013 and 2020 to shift the growth model towards improving the quality, efficiency and competitiveness of the economy, and to speed up the equitisation of State-owned enterprises. Relief and support policies should be provided to disaster-hit areas while the Ministry of Agriculture and Rural Development needs to help farmers switch to more drought- and saline-resistant plants and scale up farming areas of summer-autumn crops in a bid to make up the agricultural losses. Lam also asked the government to identify the reasons behind the stagnant manufacturing and processing industry so that proper solutions for the problems can be put forward. The government should hasten the disbursement of foreign direct investment (FDI) and official development assistance (ODA) and reduce its bad debts to stimulate the country’s economic growth, he added. FMCG growth eases Growth of the fast moving consumer goods (FMCG) sector in six major cities in Vietnam cooled to 3.6% in the first quarter of this year, down from 5.7% in the previous quarter, according to a quarterly Market Pulse report released by market research firm Nielsen. The growth of the sector in Hanoi, HCMC, Haiphong, Can Tho, Nha Trang and Danang in the period was mainly driven by a volume increase of 3%, which was also below 4.9% in the fourth quarter of last year. Nguyen Anh Dung, director of retail measurement services at Nielsen Vietnam, said the FMCG pickup of 3.6% in the six cities was much lower than the gross domestic product (GDP) growth in quarter one. It is believed that when consumer income reaches a certain level, the consumption aspiration changes. “Urban consumers are increasingly demanding and expecting better choices. They’re looking for more innovations and new consumption experiments. With a lack of innovation, FMCG is becoming more basic items which consumers would still buy but only at a sufficient level,” Dung said. In the first three months of this year, beverages including beer continued contributing the biggest part to total FMCG sales with 39% in the first quarter and picked up 10%, the highest in two years. Beverages had remained stable growth in eight consecutive months. The report showed food contributed 15% to FMCG sales in January-March, milk products 16%, household care 6%, personal care 8%, tobacco 13%, and baby care 4%. Dung quoted results of a product innovation report as saying that Vietnam has the highest score for trying new products in Southeast Asia with 88% of Vietnamese consumers saying they purchased a new product during their last grocery-shopping trip, 19 percentage points higher than the region’s average of 69%. “This presents good challenges for manufacturers to provide true innovations for consumers. Currently only beverages and beers can keep pace with consumers’ ‘thirst for new’ via impressive product innovation that serves new needs,” Dung said. Dung noted that beverage and beer makers have run intensive marketing campaigns to create new emotional bonding and exciting emerging premium channels that provide new consumption experiences. More importantly, manufacturers also need retailer support to introduce new products and promotions to consumers. The Market Pulse report was compiled  based on results of Nielsen’s survey on consumption of main categories of the FMCG sector sold in identified commercial channels and retail stores. Investments in HCMC soar in 2016-2020 Total investments in HCMC in the 2016-2020 period are estimated at VND1,830 trillion, up 55% against the previous five years. The city government has assigned the Department of Planning and Investment to complete a public investment plan for the 2016-2020 period, with a focus on fueling growth of major industries and executing seven breakthrough programs and key projects. HCMC will manage to optimize the use of capital mobilized from the private and foreign-invested sectors while making the most of official development assistance (ODA) loans. Total investments of HCMC in 2011-2015 stood at VND1,180 trillion, or 31.7% of the city’s gross regional domestic product (GRDP). Investments steadily rose in the period, with nearly VND203 trillion in 2011, VND217 trillion in 2012, VND232 trillion in 2013, VND252 trillion in 2014 and around VND280 trillion last year. In the 2011-2015 period, the city disbursed over VND98.7 trillion from its coffers for 435 works, including roads along canals, the Saigon River Tunnel, canal sanitation projects, expressways, bridges and steel overpasses. For the next five years, HCMC looks to achieve annual GRDP growth of 8-8.5%, have total investments making up 30% of its GRDP and raise average GRDP per capita to US$9,800 in 2020 from the current US$5,300. Binh Dinh okays renewable energy project Three individual investors from Germany and Vietnam have got in-principle approval from the authority of Binh Dinh to execute a renewable energy project with an estimated investment cost of VND4.5 trillion (almost US$202 million). Ho Quoc Dung, chairman of Binh Dinh, has signed an approval document for the investors to establish a company to draw up an investment plan for the proposed project with a capacity of 150MW in the initial time. With the go-ahead, Vietnamese German Nguyen Quang Minh, German Pulkowski Jan and Vietnamese Nguyen Van Luc will proceed with the project which would cover 220 hectares in Cat Thanh and Cat Khanh communes in Phu Ca District. The investors plan to establish a solar power center using German technologies in the central province. Dung asked the investors to finish the investment plan of the project in the third quarter of this year for submission to the provincial Department of Planning and Investment for appraisal and the government of Binh Dinh for approval. Draft decree sets more conditions for customs priority Businesses have expressed concern over more requirements for special customs incentives in a decree drafted by the Ministry of Finance to amend the Government’s Decree 08/2015/ND-CP on customs procedures. The draft decree comprises six groups of conditions for importers and exporters to enjoy priority customs treatment. The first four exist in the current decree, including compliance with customs and tax rules, export and import turnover, internal control and accounting system. The draft decree has two new groups of conditions relating to the implementation of electronic customs and tax procedures, and import-export payments. Accordingly, priority firms must conduct electronic customs and tax procedures and have information technology (IT) programs to manage exports and imports. Besides, they must make payments via banks as stipulated by the State Bank of Vietnam (SBV) and provide the customs  with their account numbers and a list of banks chosen for transaction. New requirements are proposed in the draft decree. For example, the condition for compliance with tax and customs regulations requires no overdue tax payments and agents in charge of customs procedures are not allowed to have more than 0.5% of customs declarations fined for administrative violations. Under the prevailing regulations, enterprises only need to perform the operation management, supervision and control of the entire supply chain. The draft decree requires a tracking of cargo transport between firms and ports, inspections of container safety before goods loading, strict surveillance at critical locations such as entrances, warehouses, and manufacturing areas, among others. Many import-export firms have bemoaned the aforementioned requirements, saying they are too stringent. A source from a logistics firm said according to the draft decree a customs service agent must have at least 20,000 customs declarations in a year. Such a requirement is not feasible. In recent years, the General Department of Customs has adjusted requirements for customs incentives, including those for import-export turnover. However, only 50 companies have been eligible. Le Duy Hiep, chairman of the Vietnam Logistics Business Association (VLA), said many foreign enterprises in different sectors have been allowed to enjoy special customs incentives. But he proposed adjusting the conditions so that more local firms can benefit from it. Beneficiaries of special customs incentives enjoy priorities for export-import operations, cargo screening, customs clearance and advance tax refunds. Apartment sales in HCMC slide in Q2 Almost 5,890 apartments in HCMC were sold in the second quarter of this year, tumbling 35% quarter-on-quarter and 45% year-on-year, according to CBRE Vietnam. In its latest quarterly report, the property service firm said the second-quarter net absorption rate was only 16%, down 17 percentage points against the year-earlier period and nine percentage points from the first quarter. However, supply grew strongly in the city in the second quarter, adding 10,107 units to the market, a 20% rise from the previous quarter. The mid-end segment registered the highest proportion of new apartments in the period, accounting for 41%. Luxury apartments came second with 22%, mainly driven by the Vinhomes Golden River project on the Ba Son Shipyard site in District 1. CBRE Vietnam warned of oversupply as sales could not catch up with new supply and recent legal disputes between project developers and homebuyers were one of the reasons. A number of project investors were found to use apartments customers have registered to buy as collateral to take out bank loans or hand over unfinished units to them. The report said there has been a noticeable shift from demand to purchase apartments for living to leasing or resale in the last 12 months. However, apartment handover with average growth of up to 200% year-on-year in the next 18 months could eat into the profit of home owners. Low demand led housing project developers to lower their selling prices by 1% against the year-earlier period and 0.3% over the first quarter. In Hanoi, the housing market saw declines in new supply and sales in the second quarter. About 6,100 apartments were put on sale, down 23% year-on-year, but only 4,860 units of them found buyers, a 7.2% slide. Selling prices on the primary market picked up 5-7% while those on the secondary market experienced a slight increase of 1%. Higher prices were mainly reported for luxury and mid-end housing projects, especially those in prime areas. Old ships cost Vinalines dearly Vietnam National Shipping Lines (Vinalines) is racking up daily losses of US$5,000-15,000 from each of the six old ships which it is still waiting for Ministry of Transport approval to sell, Vinalines general director Nguyen Canh Tinh said. The money is spent on the operation and maintenance of the ships, Tinh told the Daily. At the end of last month, Vinalines wrote to the ministry seeking its nod to sell Vinalines Global, Vinalines Trader, Vinalines Fortuna, Vinalines Star, Vinalines Ocean and Vinalines Ruby. Of them, Vinalines Ruby has been in service since 2012 while the rest are more than 20 years old. Vinalines got these ships in the 2006-2010 period while the sea transport industry was faring well and freight charges were running high. However, the global financial crisis and Vinalines’ ineffective investments caused hefty losses. As a result, Vinalines owed huge debts but revenue from its ships was woefully low. High loan interest also made matters worse. Tinh said the operation costs of these ships are too high, especially those of Panamax-size ships with capacity of 50,000-80,000 DWT. When sea freight charges recover is not in sight and the ships will be certainly sold at a loss. For example, Vinalines Star was bought at VND378 billion (US$22.9 million) but its selling price is estimated at only VND34.4 billion (US$1.5 million). Vinalines cannot cut losses by itself as it is a 100% state-owned enterprise. Vinalines leaders will make decisions on selling the six ships only after they secure approval from the ministry. Firms asked to contribute to institutional reform Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry (VCCI), has called on enterprises and business associations to actively take part in the process of reforming institutions in order to create a favorable business environment. Loc was speaking at a conference on institutional reforms, international integration and improvement of corporate competitiveness in HCMC on Wednesday.      Vietnam has set an ambitious target of having one million businesses and becoming one of the three nations with the best business environment in the ASEAN region by 2020. To realize the targets, the Government has boosted institutional reforms in a way that props up startups and firms, and develops a market economy in line with international standards. Loc said policies and laws have been reviewed and amended while red tape will be abolished and regulations will be made clear. This means enterprises must abide by regulations and do not have to ask for licenses. He said the Government will adopt a trust-based approach to company management. Customs officers now check 30% of goods before clearance instead of 100% earlier, and the Government aims to reduce the percentage to 10% in the coming time. According to the Government’s Resolution 35/NQ-CP on backing businesses, management agencies will conduct joint inspections into enterprises just once a year and these inspections aim to help them better observe regulations. Loc said all legal documents would be passed to VCCI and the business community for comment before they are issued. VCCI helped check and proposed the abolishment of 40 out of 267 conditional business sectors.   Regarding business conditions mentioned in draft decrees guiding the implementation of the Investment Law, VCCI suggested lifting more than 100 unnecessary ones. Loc urged enterprises and business associations to study legal documents, point out regulations that are against international ones and together with VCCI propose the Government eliminate them. He said the Government now considers businesses as the pivotal driving force for economic growth and will take proper measures to support them. NFSC: Exchange and lending rates volatile in H2 The National Financial Supervisory Commission (NFSC) has projected that the exchange rate between the Vietnam dong and the U.S. dollar and lending rates would become volatile in the second half of this year due to internal and external factors. NFSC said in a recent report that the factors that would affect the exchange and interest rates include higher company demand for the greenback to settle import payments and a possible interest rate hike by the U.S. Federal Reserve (Fed) at the end of the year. The commission said if interest rates increase in America, the dollar would appreciate on world markets and leave an impact on the dong-dollar exchange rate.    In addition, China’s yuan is predicted to continue weakening against the dollar in the coming six months due to macro-economic uncertainties in the world’s second biggest economy and possible impacts of the Fed’s rate spike and fluctuations of other currencies. NFSC forecast deposit rates, especially those for medium- and long-term tenors, might edge up at small banks which do not meet safety requirements. NFSC said deposit rates for long-tern tenors at small banks rose by 70 basis points from mid-June compared to the end of last year. The commission noted that ample liquidity in the banking system could help meet credit demand at year-end. Pressure on Government bond yields could ease as G-bond sales in the second half must fulfill just 20% of the entire year’s target.     According to the report, G-bond sales had neared VND182.3 trillion (US$8.17 billion) as of June 22, meeting 83% of the full-year target. The average tenor of bonds was 6.8 years, above 6.1 years in 2015 and 5.24 years in 2014, which helps ease pressure on debt payments. Other good notes are that lending rates may be revised down to support enterprises if there is no external shock. Meanwhile, inflation and the dong-dollar exchange rate have been under control. Besides, banks will have to minimize their operation costs to support the Government’s policy to cut lending rates.   However, Vietnam’s gross domestic product (GDP) expanded 5.52% in the first half, much lower than 6.28% in the same period last year, due mainly to declines in the agricultural and mining sectors. Total investments accounted for 32.9% of GDP. Calamities, including drought and saltwater intrusion, dealt a heavy blow to the farming sector. Meanwhile, crude oil output contracted by 6.1% year-on-year in January-June. The country’s export turnover (excluding the price factor) edged up 10.1% in the six-month period, below 13.4% a year ago. NFSC said greater effort should be made to achieve this year’s GDP growth target of 6.7% as set by the National Assembly. MDEC-Hau Giang forum to kick off this month The Mekong Delta Economic Cooperation Forum 2016 (MDEC-Hau Giang 2016) will take place in Hau Giang Province’s Vi Thanh City from July 11 to 15. Dong Van Thanh, vice chairman of the province, told a press conference on June 30 that the forum aims to strengthen cooperation, seek ways to attract domestic and foreign investors, and help the delta expand consumption markets for its products. MDEC-Hau Giang 2016 will be an opportunity to promote application of scientific and technological advances. The forum on the region’s integration and sustainable development will also help mobilize resources for social welfare projects, Thanh said. Nguyen Huu Tinh, head of the ideology and education commission under the Hau Giang Party Committee, said preparations for the forum have virtually been finished. The forum will discuss solutions for the Mekong Delta to be proactive in international integration, cooperation between domestic localities and foreign countries, and export of key products in the delta like rice, seafood, and fruit. There will be a series of events at the forum, including seminars on integration and sustainable development, credit, socio-economic performance, and ways to control drought and salinity and store fresh water for production and daily life in the delta.   Experts will share ways to drive the delta’s integration and development. Ministry sets trial bidding for sugar imports The Ministry of Industry and Trade will establish a council to conduct pilot bidding on the import of 85,000 tonnes of sugar under a tariff rate quota (TRQ) this year. Businesses and traders considered this good news because they can join the bidding, which facilitates fair competition. According to a ministry circular on the principles of managing the import tariff quota for sugar this year, bidders would include traders that supply sugar as an input in food manufacturing or traders that supply raw sugar for the production of refined sugar. The circular is effective from June 29 to December 31. Under Viet Nam's World Trade Organisation Accession Agreement, Viet Nam must establish an annual TRQ for raw and refined sugar (the TRQ covers both products) at a minimum volume. The level is subject to annual increases. The ministry set a minimum allowed TRQ of 81,000 tonnes last year. The Government last month approved the import of 100,000 tonnes of sugar, which was expected to help meet demand in the local market and bring down prices. The prolonged drought has had a great impact on the sugar industry. According to Viet Nam Sugar and Sugar Cane Association, this year's sugar supply would only reach 1.2 million tonnes, a whopping 1.4 million tonnes less than last year, pushing up retail prices. The price of sugar in June was VND16,000-16,600 (US$0.71-0.74) per kilograme in Ha Noi, VND16,000-16,300 in HCM City and VND15,900-16,600 in the central region, down VND200-500 per kilogramme compared with that in May. ATMs' minimum withdrawal limit raised for interbank transactions The minimum cash limit per withdrawal at automated teller machines (ATMs) for banks other than the card issuer will be raised from VND2 million (US$90) to VND3 million. The news was announced in a circular released by the State Bank of Viet Nam on June 30. The increase will help ATM users save on fees, as they are currently charged VND3,300 (value added tax included) per withdrawal at ATM booths belonging to banks other than the one that issued their card. "It will be more convenient for ATM users when withdrawing cash at the ATM booths of different banks," said Nguyen Thi Nga, a teacher in Ha Noi. "A higher cash limit means fewer withdrawal transactions and lower charges," Nga said. "Still, I expected a higher minimum limit." For cash withdrawals conducted at the ATMs of the same bank that issued the card, Circular 20/2016/TT-NHNN, which came into effect at the beginning of July, said credit institutions were not permitted to set an ATM cash limit per withdrawal at less than VND5 million for internal transactions, the same as the current limit. Transaction fees for internal ATM transactions are VND1,100 per cash withdrawal. The circular also said ATM services must be available 24/7 and each ATM booth must provide the contact details of the operating agency, so users can contact them when they encounter problems or have complaints. Tra fish exports to China thriving Viet Nam's tra fish exports to China recorded strong growth in the first five months of the year, hitting nearly US$95 million, a year-on-year surge of nearly 73 per cent. China is one of the three largest importers of Vietnamese tra fish, along with the US and EU, according to Vo Hung Dung, deputy chairman and general secretary of the Viet Nam Pangasius Association. Exports of tra fish to Brazil have also surged, increasing 118.3 per cent to $32.8 million in the first five months of the year. Total exports of tra fish reached 650.3 million in the same period, a rise of 5.5 per cent over the corresponding period last year, according to the Viet Nam Association of Seafood Exporters and Producers (VASEP). The US remains the top importer of tra fish from Viet Nam with $152 million, accounting for 23.4 per cent of total exports, a rise of 12.9 per cent over the same period. In the EU, Vietnamese exports of tra fish continued to fall in the first five months. As of the end of May, exports to the EU reached $109.3 million, a fall of 8.1 per cent compared to the same period last year. The four largest EU importers of tra fish from Viet Nam are the UK, the Netherlands, Spain and Germany. Viet Nam's tra fish exports are expected to reach $1.5 billion by the end of the year, a drop of 5 per cent from last year. The US anti-dumping tax, catfish inspection programme and competition with white-flesh fish have all caused a decline in catfish exports, according to VASEP. Viet Nam's tra fish products are sold in more than 100 countries and territories. Cashew industry to establish fund The Viet Nam Cashew Association has suggested establishing a fund that will make cashew production sustainable. It would also help strengthen linkages between cashew businesses and farmers, Dang Hoang Giang, deputy chairman of the association, known as Vinacas, told its ninth congress held in HCM City last Friday to review the 2013-15 period and make plans for 2016-20. The fund would raise money from four sources – the Government, cashew processors and exporters (US$1-$2 for every tonne of cashew exported), donors and others — he said. He said 50-70 per cent of the fund would be used for programmes to improve cashew fields, research into cashew strains and support farmers. The remaining would be earmarked for research and instalment of processing machinery and equipment, improving product quality, hygiene and food safety, and trade promotion both at home and abroad, he said. The fund would be managed by a trust, he said. Vinacas will continue to focus on four key programmes: "Working together with farmers"; "Cleaner production"; "Viet Nam's cashew value"; and "Export development". Nguyen Duc Thanh, Vinacas chairman, said while exports of many agricultural products faced difficulties in 2013-15, cashew exports increased consistently in terms of both volume and value. The country earned $2.5 billion from the export of 330,000 tonnes of nuts and cashew-based products last year, a year-on-year increase of 15 per cent in value and 10 per cent in volume, accounting for 9 per cent of total agricultural export earnings. Average export price was $7,300 per tonne in 2015, 12 per cent higher than in the previous year. It was also the 10th consecutive year in which Viet Nam remained the largest cashew exporter. Viet Nam in fact accounts for 50 per cent of the global revenue for cashew exports. In the first half of this year it exported 156,000 tonnes for $1.2 billion. Its products are available in more than 80 countries and territories, with the US, EU and China being key markets. At the congress, Nguyen Duc Thanh was elected to continue as chairman of the association for another term. HCM City targets 500,000 firms in 2020 Ho Chi Minh City, one of the country’s largest economic hubs, is targeting to expand the number of enterprises to 500,000 by 2020, stated a draft plan of the city that was announced in a meeting between municipal leaders and local businesses on July 3. The target is feasible to the city which plays a role of the motive force of the country’s economy, said Dinh La Thang, Secretary of the Municipal Party Committee at the meeting, which focused on mapping out a plan to realise the Government’s resolution on business support and development until 2020. Currently, the 12 million-population city has 270,000 registered firms, including 170,000 operating ones. Besides, it also has 250,000 private family businesses with high potential to develop to companies, he noted. As part of efforts to fulfil the goal, the city will strive to create a favourable and equal business environment, he added. The city leader also called for local businesses’ ideas and comments on the draft plan, so that the city’s action programmes will match the need of enterprises, creating a new motivation for their development. The resolution, issued on May 16 this year, comprises five major tasks - reforming the administrative system to create favourable conditions for businesses, making a good environment for startups, ensuring business rights and equal opportunities to access resources and business chances, reducing cost for enterprises, and protecting their legitimate rights and interests. The city draft plan also sets a number of targets, including a contribution of 60-62 percent from the private sector to total social investment and at least 36 percent from total factor productivity. It also targets a social productivity rise of about 65 percent per year, and up to 35 percent of enterprises conducting renovation activities. According to Nguyen Thanh Phong, Chairman of the municipal People’s Committee, the city will speed up measures to form a startup ecosystem and encourage renovation startup, while directly and indirectly supporting 2,000 startup and creativity projects through consultation and training activities. Along with strengthening administrative reform, the city will continue developing the e-government system, installing hotlines to all departments and district People’s Committees, and optimising the online portal to dialogue with people and businesses, he said. Many businesses at the meeting showed support to the plan. However, some asserted that it is also necessary to ensure quality of the enterprises rather than quantity. They also proposed the building of strong national trademark to enhance competitiveness in the regional and global markets. Binh Duong well-positioned to be major logistics centre The southern province of Binh Duong is expected to be a major logistics centre in the region on the back of its location near seaports and infrastructure, as heard at a local seminar held on June 30. The province is currently home to 21 bonded warehouses, two inland container depots and 31 customs agents which provide logistics services for exporters and importers, many of them meet international standards. Ha Thanh Hai from Box Pak Vietnam company based in the Vietnam-Singapore Industrial Park said Binh Duong is well-positioned to be the country’s major logistics hub but its small and medium-sized ports are yet to meet demand. Four out of nine river ports, including Binh Duong, Thanh Phuoc, Ba Lua and An Son, have been put into operation. However, increased transport costs also weaken logistics system’s competitiveness, he said. Vice Chairman of the provincial People’s Committee Tran Thanh Liem said Binh Duong has zoned off 10 river ports sprawling over hundreds of hectares, and nearly 100ha of inland container depots to develop logistics centres in Di An and Thuan An townships, towards establishing a chain of logistics services in the southern economic region, under a master plan with a vision until 2020. Large-scale rice fields booming The southwestern province of Kien Giang has set up 14 large-scale rice fields for growing crops in accordance with the Vietnamese Good Agricultural Practices (VietGAP) standards as part of a four-year programme. The model, first implemented in An Giang province for the 2010-11 winter-spring rice crop, has been expanded to other provinces. More than 70 percent of rice grown in large-scale fields is of high-quality varieties. Under the model, farming households whose fields are located near each other sow the same rice varieties on the same day and tend their fields using advanced farming techniques. All rice paddies harvested on a large-scale field is purchased by companies that participate in the programme. The companies supply the farmers with the seeds, fertiliser and other input materials. Large-scale rice fields have a yield 15-20 percent higher than normal rice fields, according to the Ministry of Agriculture and Rural Development’s Plant Cultivation Department. Large-scale rice fields also create specific rice-growing areas devoted to export, according to the Plant Cultivation Department. Kien Giang, the country’s largest rice producer, produced more than 1.95 million tonnes of paddy for the winter-spring crop and for rice crops grown only once a year in the rainy season. This was down more than 543,000 tonnes compared to the province’s target, according to the province’s Department of Agriculture and Rural Development. Prolonged drought and salt water intrusion in the dry season caused the decline in yield. Kien Giang authorities have supported more than 463 billion VND (21million USD) for affected farmers to grow the summer-autumn and autumn-winter crops. Kien Giang authorities have also told farmers to grow high-quality, short-term rice crops that are resistant to drought and salt water. More than 840 households have taken part in the large-scale rice field programme in Vinh Thuan, U Minh Thuong, An Bien, Tan Hiep, Chau Thanh, Giang Thanh, Giong Rieng, Go Quao and Hon Dat districts. PM supports hi-tech vegetable production in Hai Duong Prime Minister Nguyen Xuan Phuc showed his backing of Hai Duong province’s scheme to build large-scale safe vegetable production models with the application of high technology, during his working session with local authorities on July 2. The northern locality has nearly 30,000 hectares for vegetables cultivation a year. However, it has yet to establish extensive safe production models which are highly productive, competitive and economically efficient. From the fact, the province asked for its joining of the country’s hi-tech agriculture development programme from 2017 so that it would have three to four large-scale safe vegetable production areas by 2020. At the meeting, Prime Minister Nguyen Xuan Phuc pointed out that the province has not yet achieved the agricultural restructuring as required. The province should promptly solve petitions lodged relating to land clearance, as well as environmental pollution, and railway and waterway traffic problems, he said. Hai Duong recorded an economic growth of 7.2 percent in the first half of 2016. It collected over 5 trillion VND (225 million USD) for the State budget, representing a year-on-year increase of 3.6 percent. The province is seeking more markets for lychee – a local staple that has found a firm niches in several major markets in the world. In 2016, the province has carried out 11 lychee production models meeting export standards of the US, Australia, and the EU. Ho Chi Minh City, Mekong Delta seek closer economic ties Ho Chi Minh City pledges to offer all possible support to firms at home and abroad and continue improving its business climate, Chairman of the municipal People’s Committee Nguyen Thanh Phong told a conference promoting trade, investment and tourism between Ho Chi Minh City and the Mekong Delta on July 1. Hailing positive results of a comprehensive economic cooperation scheme between the two sides, Phong said a number of measures have been adopted to boost food production, aquaculture and fruit processing. The linkage between Ho Chi Minh City and the Mekong Delta, which contributes 18.5 percent to the country’s gross domestic product, is a sound and long-term orientation, he said. Over the past years, Ho Chi Minh City and the regional localities have jointly conducted scientific studies and technology transfer in cultivation and breeding, launched training courses and seminars on fruit growing under the VietGAP standard, and built concentrated breeding farms. They have also built farm produce wholesale markets, supermarkets and material zones while offering more tourist products and increasing communications among animal and plant quarantine stations. Son Minh Thang, deputy head of the Steering Committee for the Southwestern Region, lauded significant progress of bilateral connectivity but he said their trade remains modest. He called on 13 Mekong Delta localities to enhance trade and tourism with Ho Chi Minh City as well as review preferential policies across farm produce and seafood processing, and administrative reform. Thang also suggested the Ministry of Planning and Investment issue special policies conducive to investment attraction in the region. Regional localities were also advised to popularise their specialties and connect with Ho Chi Minh City in tourism. At the event, both sides introduced 69 key projects in need of capital, focusing on transport infrastructure, seaports, hi-tech farming areas, international-standard trade and services centres, hotels and resorts. Special consumption taxes for high-powered cars rise The special consumption tax for cars with engines of 2,500 cu.cm – 3,000cu.cm will increase to 55 percent from 50 percent starting from July 1. The move is in line with the Law on amendments and supplements to several articles of the Law on Value-Added Tax, the Law on Special Consumption Tax and the Law on Tax Management that take effect the same day. The highest tax increases are applied for vehicles of 3,000 – 6,000cu.cm and above. Specifically, cars with 3,000-4,000cu.cm, 4,000-5,000cu.cm and 5,000-6,000cu.cm engines will be subject to respective tax rises to 90 percent, 110 percent and 130 percent from 60 percent in the past, while the tax rate for those with engines of more than 6,000cu.cm rises to 150 percent. Meanwhile, cars with engines of 1,500cu.cm and below will enjoy a tax decrease to 40 percent from 45 percent, and to 35 percent from January 1, 2018. The tax stays the same at 50 percent for vehicles with 2,000-2,500 cu.cm engines. According to the Finance Ministry, the tax adjustment is in line with Vietnam’s automobile development strategy, which encourages the production and use of small cars that suit the infrastructural conditions and income level.- Fecon wins new contracts worth VNĐ1 trillion Fecon Corporation (FCN) recorded new construction contracts worth about VND1 trillion (US$44.6 million) in the first half of this year. In June, the Ha Noi-based construction firm won contracts to build the underground facilities for the Samsung and LG displays in the northern province of Hai Phong, building project at No 69B Thuy Khue in Ha Noi and the Lake View Project in HCM City. FCN also announced the establishment of Fecon South Corporation to serve the growing demand for construction in the south of Viet Nam. FCN's projected sales for this year total VND2.6 trillion. Currently, FCN's total assets reached more than VND3 trillion. Yesterday, each share of the corporation rose 0.5 per cent to reach VND20,400 on HoSE. HCM City, Mekong Delta discuss investment, trade, tourism HCM City and Cửu Long (Mekong) Delta provinces should diversify the way they solicit investment from each other and promote trade and tourism, and draft specific plans to improve co-operation, according to the Southwest Steering Committee. Speaking at a conference on investment, trade and tourism between the delta and the city in HCM City yesterday, Son Minh Thang, deputy head of the committee, said the delta plays a very important role in the country's economy by producing a lot of agricultural products consumed domestically and abroad. It accounts for more than 50 per cent of the country's rice output and 90 per cent of exports, besides 70 per cent of fruit and 60 per cent of aquatic produce, he said. But investment there, especially foreign, remains modest, he said. Nguyen Thanh Phong, Chairman of the HCM City People's Committee, said, "The Comprehensive Economic Co-operation between the Mekong Delta and HCM City aims to create attractive investment opportunities for businesses in Viet Nam's largest agricultural region. "Many solutions, especially in food production, agricultural and fisheries processing and fruits, have been deployed in past years, yielding positive economic effects for the region." Having long-term links between HCM City and the delta, which accounts for 18.5 per cent of GDP, is the right way to go, he said. Thang said, "Trade co-operation between the delta and HCM City has increased significantly, but remains modest compared to the potential. "In terms of tourism, there are not many tours combining HCM City and the delta." The conference offered a good chance for the two sides to introduce their potentials and strengths to promote trade, investment and tourism co-operation, he said. "Businesses have a chance to raise the difficulties and obstacles they face with respect to administrative and investment procedures and others when investing in the region, so that central and local authorities could take immediate measures to resolve them." Tran Huu Hiep, member of the steering committee, said since the delta's infrastructure and human resources are still underdeveloped compared with other regions in the country, transport infrastructure, irrigation and human resource training are among the promising sectors for investors. Thang called on the city and delta to promote consumption of agricultural products and share experiences in hi-tech agricultural production. At the conference, the 12 provinces and one city in the delta and HCM City listed 69 key projects requiring investment, mostly in sectors like transport infrastructure, ports, hi-tech agricuture parks, agro-fishery processing, shopping malls, luxury hotels, and tourism and amusement sites. Bac Lieu, Ca Mau, Kien Giang sought investment in maritime projects including ports, and An Giang and Long An in commercial and border gate economic zones. Among the projects for which Hau Giang Province is soliciting investments are a US$50 million fruit preservation and processing plant, a $50 million high-tech agricultural park, and a $150 million market for high-quality agricultural produce. HCM City sought investment in two sections measuring 9.11km in its metro line No2 from Ben Thanh to Tay Ninh, is monorail line No2 from Highway No50 to Binh Quoi, a 89.74ha hi-tech aquaculture park in Can Gio, and others. Incentives will be offered to investors depending on the location and nature of projects. Phong said, "With clear and open policies and a motto of viewing businesses' success as our own success, the city government is committed to continuing to create favourable conditions for domestic and foreign businesses to invest and do business in the city." Besides, the city authorities are committed to working with localities in the delta, ministries, and central agencies to improve the investment environment, create favourable conditions and support enterprises with manufacturing and trading, he said. Business executives at the conference said provinces and cities in the delta should reduce the number of industrial parks and focus instead on improving their quality to attract more investors. In addition, due to the muddy soil in the delta, investors have to spend more on infrastructure there and authorities in the region should reduce or even waive land rents, he said. On the sidelines of the conference, which was organised by the Investment and Trade Promotion Center in HCM City and the Southwest Steering Committee, the delta provinces and city displayed their specialties and provided information about themselves. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR