VIETNAM'S BUSINESS NEWS HEADLINES JULY 1   02:23        Local farming production needs reforms for higher export value Foreign countries tightening import regulations would affect Viet Nam's exports of farming products, especially fruits, forcing the local agricultural industry to reorganise production, according to experts. China is boosting food safety inspection, quarantine and traceability for imported goods, especially on fresh, chilled and processed agricultural products, meat and seafood for prevention of the COVID-19 pandemic, according to the Ministry of Agriculture and Rural Development. Meanwhile, South Korea’s Ministry of Food and Drug Safety has a list of requirements for enterprises exporting food. This is a temporary control solution for this year due to the impacts of the COVID-19 pandemic. If Vietnamese enterprises do not meet those requirements, they will struggle to export local farming and food products to those markets, especially fresh fruits, according to experts. Nguyen Manh Hung, chairman of the Board of Directors of Nafoods Joint Stock Company, a firm that exports processed fruits to 60 markets, said Viet Nam’s enterprises must have a strategy to overcome trade barriers. Hung said Viet Nam wanted to become an agricultural product supplier on the world market and to reach the target, the agricultural sector must build a value chain system to link all stages together, especially the processing stage. The sector also must digitise material regions for efficient traceability. In addition, Hung said the sector should change farmers’ mindset in terms of production. Meanwhile, large enterprises needed to help farmers and co-operatives standardise agricultural production processes. Nguyen Dinh Tung, chairman and CEO of Vina T&T Group, said his company and others were promoting the development of material regions to produce clean farming products, aiming to improve export value and increase their domestic market shares. Agricultural expert Dang Kim Son said there was a high demand for agricultural products at home and abroad. Therefore, during the pandemic, enterprises needed to find solutions to maintain production and to promote links with farmers. This would help them overcome the difficult period at present and be able to restore trading of farm produce once the pandemic ends in the world. He recommended enterprises focus on building links among processing plants and raw material regions to ensure quality by using high technology in production and processing. The Ministry of Agriculture and Rural Development aims to improve the quality of market forecast to help localities and businesses devise suitable production and business plans. As one of the major fruit exporters, Nguyen Thi Thu Hong, director of the Chanh Thu Import Export Co, Ltd in Ben Tre Province, said Chanh Thu exported a small volume of dragon fruits to Australia per year because it was a demanding market. Businesses that export fruits to this market must purchase fruits from GlobalGAP-certified farms to ensure they are free of pesticide residue according to Australian regulations, according to Hong. Therefore, Viet Nam’s fruit production industry needs to expand the material region supplying fruits meeting international standards for quality and food safety. The industry must also implement requirements of plant quarantine and traceability. The best way is to build a production chain from production to consumption. Le Son Ha, head of Plant Quarantine Department under the Plant Protection Department, said Vietnamese fruits had been exported to many strict markets such as the US, South Korea, Australia, Canada and Japan, accounting for more than 30 per cent of national fruit exports. However, local fruit faced competition from other countries. For instance, Cambodia had promoted exports of mango to South Korea while China had expanded dragon fruit production. That had forced the Vietnamese fruit industry to work towards large-scale production and ensuring food hygiene and safety requirements on global markets, Ha said./.  Accommodation in Da Nang bounces back after COVID-19 Many accommodation providers in Da Nang have reopened after being forced to close by the COVID-19 pandemic and business has been good, proving that the local tourism industry is on the road to recovery. There are 550 hotels in Da Nang that have reopened their doors and are actively participating in promotional programmes run by the city’s Tourism Department. Room tariffs at some have been discounted by 30 to 50%. According to the city’s Department of Tourism, occupancy at local 3 to 5-star hotels now stands at 30% and 80-100% on weekends. Guests are primarily from Hanoi and HCM City. In the wake of the “new normal” following COVID-19, efforts by accommodation providers in Da Nang to reopen and resume operations have been tremendous. Thanks to offering discounts and improved service quality, many providers have attracted large numbers of visitors and bolstered Da Nang’s profile among domestic tourists./. Shan tea gives people a means to escape from poverty Grown at an altitude of 800-1,000 metres above sea level, the Shan tea from Na Hang district in Tuyen Quang province boasts a great flavour and has won the hearts of tea lovers far and wide. The trees also give local people a way out of poverty. Pac Cung hamlet in Thuong Nong commune, Na Hang district, Tuyen Quang province is home to 8 ha of shan tea trees, many of which are from 30 to 36 years old. Their leaves are large and thick and have a strong flavour as the trees are grown at an altitude of 800-1,000 metres above sea level. With four harvests each year and a stable sales price of around 14 USD per kilo, tea trees have become key to the San Chi ethnic minority people in Pac Cung hamlet escaping from poverty. Technical barriers and limited traffic infrastructure, however, still hinder local people from taking full advantage of growing tea. Na Hang district has over 1,100 shan tea trees, cared for by 15 local households along with companies and cooperatives. With a view to providing sustainable incomes by improving quality, local authorities have also been encouraging people to produce tea under standardised processing procedures. In order to sustainably develop the Shan tea areas, Na Hang district has adopted a scheme for developing specialty tea trees in the 2021-2025 period and vision to 2030. The scheme focuses on creating jobs for nearly 5,000 workers through tea processing and trading, increasing local incomes and developing the district’s economy while protecting its ecosystem./. AEON promotes consumption of Vietnamese agricultural products The first batch of fresh Vietnamese lychees exported to Japan was sold in AEON's store system, including 250 AEON General Merchandise Stores and Supermarkets and AEON Style stores in Japan. In December 2019, the import restriction on Vietnam’s fruits was lifted. This is the first batch of fresh Vietnamese lychees exported to Japan. AEON is the first retailer to sell this fruit to Japanese consumers. Fresh lychees were shipped by air between the end of May and the end of June without being frozen to ensure the quality and taste of the product. Besides lychees, many other special Vietnamese agricultural products such as mango, dragon fruit and coffee have also been exported and sold in AEON’s supermarkets in Japan since 2015. The successful export and distribution of Vietnamese agricultural products in AEON's retail system in Japan is the result of efforts of companies under the AEON Group in Vietnam. AEON has cooperated with the Vietnamese Ministry of Industry and Trade (MOIT) to organise activities to help Vietnamese suppliers improve the quality of their products, aiming to export to foreign markets, especially Japan. Total export revenue of Vietnamese products through the AEON system has increased strongly over the past years, from nearly 250 million USD in 2017 to 370 million USD last year. The figure is expected to top 450 million USD this year. AEON Vietnam Co., Ltd. also implements activities to support the consumption of agricultural products in the domestic market and organises trade promotion programmes through its General Merchandise Store & Supermarket system nationwide. In February, during the COVID-19 pandemic, AEON Vietnam joined hands with others to support the consumption of more than 18 tonnes of dragon fruits and more than 58 tonnes of watermelon in only four to five days through its store system in HCM City and Hanoi. In addition, AEON Vietnam cooperates with the MOIT, and departments of Industry and Trade of provinces and cities to organise business matching activities, fairs and exhibitions to boost consumption of domestically-made products./. Quality needed to boost agricultural, aquatic exports Vietnamese enterprises need to improve product quality, build their brands, and ensure product traceability to increase the exports of agricultural and aquatic products, experts said at a recent seminar held in HCM City. Exports of agricultural and aquatic products in the first five months of the year were 15.49 billion USD, down by 4.1 percent compared with the same period last year because of the negative impacts of COVID-19 on Vietnam’s key export markets such as China, the US, Japan and EU. In the first months of the year, Vietnam’s agriculture sector faced other challenges in addition to the COVID-19 pandemic, including trade tensions and worse climate change. The recently signed Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA) are expected to help the country increase its agricultural and fisheries output. However, with the technical barriers and strict food safety and hygiene standards, Vietnam’s agricultural production face many challenges because it has still been done mostly on a small scale. However, with commitments under these FTAs, import tariffs will be reduced or eliminated in various markets, creating favourable conditions for Vietnam’s agricultural exports, said Mai Xuan Thanh, deputy director-General of the Vietnam General Department of Customs. The EU market is very demanding, which requires products to be done in compliance with high standards to protect consumers. The EU is the largest importer of Vietnamese agricultural products as compared with other major markets like the US, Canada, New Zealand, Australia and Japan. Its consumers value high-quality products with special characteristics such as organic, fair trade and geographical indications, experts said. To expand to new markets, Vietnamese export products should meet good agricultural practice (GAP) standards such as VietGAP and Global GAP in order to meet the market demand and improve farmers’ incomes. In addition, businesses need to improve the added value of goods by applying technology in processing and preserving products, experts said./. Quang Ninh working hard to revive tourism Quang Ninh provincial authorities have introduced a range of stimulus programmes in order for the local tourism sector to recover from the impact of COVID-19. For just around 9 USD, you can now enjoy a speedboat trip out to Co To, a beautiful island off the coast of Quang Ninh province. Tickets have been discounted 30% compared to before the pandemic. The lower tickets have attracted a host of visitors to the island. It has been welcoming 300 to 800 tourists each day in recent times, according to the Co To District People’s Committee - proving that the local stimulus programmes are having an effect.  Quang Ninh is among the pioneers in introducing stimulus programmes to revive its tourism sector. In addition to discounts and promotions, the province is also focusing on improving infrastructure and diversifying tourism products to attract more visitors. The province remains on high alert even though COVID-19 has been basically contained, which has found favour among tourists. Tourism is a spearhead economic sector in Vietnam, with over 40,000 companies contributing 9.2% to GDP and generating millions of jobs./. Indonesia’s central bank ready to finance more fiscal deficit for COVID-19 fight Indonesia's central bank (BI) is ready to further finance the government's budget deficit and "share the burden" in the fight against the COVID-19 pandemic, BI Governor Perry Warjiyo said on June 27. During an online seminar, Warjiyo said he and Indonesian Finance Minister Sri Mulyani Indrawati had agreed to accelerate budget deficit financing for responding to COVID-19. The BI and the finance ministry are in their final stage of agreement for the deficit financing scheme and they would work with parliament's finance commission and the Audit Board of Indonesia to ensure accountability, Warjiyo said. He reiterated at the seminar that BI has scope to trim its main policy rate further. Since the beginning of this year, BI has so far bought 40 trillion rupiah (2.83 billion USD) of government bonds directly in auctions. It has also purchased 166.2 trillion rupiah of bonds in the secondary market. In total it has injected 614.8 trillion rupiah of liquidity into the financial system, including via bond buying operations, the governor said. Indonesia’s fiscal deficit this year is expected to be 6.3 percent of its GDP, up from an initial plan of 1.8 percent, with the government forecasting a 10 percent drop in revenue and allocating nearly 50 billion USD for the COVID-19 budget. Malaysia: Palm-oil industry urges gov’t to let foreign workers return Owners of palm plantations in Malaysia have urged the government to let foreign workers return. The Malaysian Estate Owners’ Association proposed the government consider the survival and sustainability of the sector, and allow companies that have been unable to recruit locally to hire foreign workers immediately. Malaysia, the world’s second-largest producer and exporter of palm oil, is facing a serious labour shortage. Its palm-oil industry relies on foreigners for 70 percent of the plantation workforce, mainly from Indonesia and Bangladesh. Thousands have left the plantations for home due to border closures during the COVID-19 pandemic./. Toyota Indonesia’s car exports likely to fall 40-50 percent in 2020 Toyota's vehicle exports from its manufacturing facilities in Indonesia are forecast to drop by 40-50 percent in 2020 due to the impact of the COVID-19 pandemic. Speaking at an online workshop in Jakarta this week, President Director of PT Toyota Motor Manufacturing Indonesia (TMMIN) Warih Andang Tjahjono said the COVID-19 pandemic has been affecting the firm’s car production since April when domestic and export demand plummeted. According to the Indonesian automobile manufacturers association (Gaikindo), the domestic consumption has decreased by 40 percent in 2020 to about 600,000 units, compared to 1.03 million units in 2019. Meanwhile, exports have also declined as importing countries in the Middle East, South America and Africa have been also affected by the pandemic. It is estimated that the volume of exported cars will drop by 40 percent compared to 2019, reaching only 208,000 units. TMMIN hoped that the Indonesian government will take measures to encourage its people to buy cars, as well as directly support the automotive industry such as reducing PPh21 tax to 30 percent so that the domestic market can grow in the two remaining quarters of 2020./. Vietnam is Indonesia’s competitor in foreign investment attraction: Minister Vietnam and Bangladesh are considered the most potential competitors of Indonesia in attracting foreign investment after COVID-19, according to Indonesian Minister of Public Works and Public Housing (PUPR) Basuki Hadimuljono. To welcome the wave of foreign investment shifting from China, Indonesia has prepared land areas to draw investors, he said. The minister added that President Joko Widodo has repeatedly expressed concern about Indonesia’s weaker attraction of foreign investment than neighbouring countries. Therefore, Indonesian government agencies have quickly adjusted a number of policies to create the optimal conditions for overseas investors to operate in the Southeast Asian country. The government has pushed the policy of building industrial parks to welcome US and Japanese investors. Indonesia is now home to 103 active industrial parks covering 55,000 hectares./. Malaysia’s tourism, cultural sectors lose 10.5 billion USD due to COVID-19 The COVID-19 pandemic has caused losses of about 45 billion ringgit (around 10.5 billion USD) to Malaysia’s tourism and cultural industries in the first half of 2020, Bernama news agency has reported. Speaking with reporters on June 27, Malaysian Minister of Tourism, Arts and Culture Nancy Shukri said tourism is one of the hardest-hit economic sectors and is expected to be the last to recover. To support the sector, she said the Ministry of Tourism, Arts and Culture would strengthen the domestic tourism initiatives under the Cuti-Cuti Malaysia campaign. The ministry will intensify public relation activities to boost the confidence of tourists to travel again. Notably, small- and medium-sized tourism entrepreneurs (SMEs) will enjoy soft loans with a minimum of 50,000 ringgit and a maximum of 10 million ringgit managed by SME Bank. Last year, Malaysia welcomed a total of 26.1 million tourists, raking in more than 86 billion ringgit./. Philippine economy predicted to face recession The Philippines’ gross domestic product (GDP) will likely shrink by 5.7-6.7 percent in the second quarter of 2020, much higher than the 0.2 percent contraction in the first quarter, according to Governor of the Bangko Sentral ng Pilipnas (BSP) Benjamin Diokno. The two consecutive quarters of GDP contraction due to the full impact of the tight lockdown to prevent the spread of COVID-19 will put the Philippines’ economy in recession, he said. Diokno stressed that the negative impact of the COVID-19 crisis is harsher than what was originally predicted. Economic managers through the Development Budget Coordination Committee (DBCC) have forecasted that the country’s GDP will fall by 2-3.4 percent this year from a growth rate of 6 percent last year. Previously, S&P Global Ratings announced a deeper GDP contraction of 3 percent instead of 0.2 percent this year after the Philippines implemented one of the world’s longest tight lockdowns to combat COVID-19. Meanwhile, the International Monetary Fund (IMF) downgraded the Philippines’ GDP to a 3.6 percent decrease instead of growing by 0.6 percent this year as it sees the global economy shrinking by 4.9 percent instead of 3 percent due to the pandemic./. Vinamilk sees revenue and profit up despite COVID-19 Despite the impact of the COVID-19 pandemic, dairy producer Vinamilk’s total revenue and profit in the first half of 2020 still rose 3-7 percent on-year, CEO Mai Kieu Lien has said. In the first six months of 2020, Vietnam Dairy Products JSC (Vinamilk) earned 14.6 trillion VND (628.7 million USD) worth of total revenue and 2.9 trillion VND (124.9 million USD) worth of profit. Modest earnings growth this year was attributed to the downturn of income brought by the school milk programme as schools were shut to cope with the pandemic, Lien told the firm’s annual shareholder meeting on June 26. "When schools re-opened in May, the situation became better but performance was still below the expectation," she said, adding that "Earnings may improve in the last two quarters of the year." Vinamilk targets 59.6 trillion VND in total revenue this year, up 5.7 percent on-year, and profit is forecast to gain only 1 percent on-year to 10.69 trillion VND. In the first quarter of 2020, Vinamilk reported total revenue rose 7 percent on-year to 14.2 trillion VND and profit was down slightly to 2.78 trillion VND. A 50 percent cash dividend is set for 2020, divided into three separate tranches. Two advance tranches will be made in October 2020 and February 2021, with corresponding pay-out ratios of 20 percent and 10 percent. The schedule and pay-out ratio for the third tranche will be decided in the 2021 annual general meeting of shareholders. The cash dividend pay-out rate for 2019 was 45 percent. The largest dairy producer by market value will also issue 348 million shares to shareholders this year at a five-to-one ratio, meaning every shareholder will receive one new share for every five shares they have. The share issuance will raise Vinamilk’s charter capital by 3.38 trillion VND to 17.4 trillion VND. A new cattle farm in Quang Ngai province will come into operation this year and Vinamilk is planning to build more in Dong Nai province, the centrally-run city of Can Tho, and Laos. New products for dietary customers will also be studied and developed. Vinamilk this year is planning to launch a coffee and dining store chain with the brand “Hi-Café”. A store was opened in 2019 at the firm’s headquarters in District 7, HCM City. The chain will be enlarged this year. The chain would be developed based on Vinamilk’s milk retail system with 430 stores being allocated across the country, Lien said. Vinamilk and consumer staples firm Kido have recently announced a partnership deal that establishes a joint-venture business, in which Vinamilk holds 51 percent of the capital. Revenue of the joint-venture will be accounted by Vinamilk and Kido will enjoy the net profit on its part. The joint-venture is expected to help both firms step in the beverage sector. The two firms were hiring an independent auditor to value their products before the joint-venture begins operating, Lien said./. US provides nearly 56 million USD to support Cambodia’s social-economic growth The US Government has signed an agreement to offer Cambodia about 56 million USD to support its social and economy development programmes across four sectors in 2020. The Royal Government of Cambodia, through the Council for the Development of Cambodia (CDC), and the US Government, through the US Agency for International Development (USAID), signed the pact on June 25. Per the agreement, 38 million USD will be earmarked for health and education programmes and approximately 18 million USD for agriculture and environment programmes. CDC Vice-Chairman Chin Bun Sean said that bilateral development cooperation is an important pillar in promoting and strengthening the cooperation and partnership between the two countries. W. Patrick Murphy, US Ambassador to Cambodia, said the US Government is committed to continuing its support for the Cambodian people towards sustainable, inclusive, and equitable socio-economic development. In March, the US Government provided Cambodia with 11 million USD to support the Southeast Asian country’s COVID-19 response. Since 1994, the US’s assistance for Cambodian people has exceeded over 1 billion USD./. Cà Mau co-operatives see higher incomes, stable prices The number of farmers' co-operatives that have effective operations has increased as a result of support policies from Cà Mau Province in the Mekong Delta.  The province now has 213 co-operatives and 1,085 co-operative groups operating in various sectors, mostly in agricultural production. Nguyễn Trường Đời, a member of the Kinh Dớn Co-operative in Trần Văn Thời District, said he and other farmers have applied advanced farming techniques that "improve yield and reduce production costs". "We no longer worry about price instability." The co-operative has signed contracts with companies that guarantee outlets and buy input materials at good prices for the farmers. With its effective operation, the co-operative now has 65 members, up from 27 in 2014 when it was established. Nguyễn Vũ Trường, director of the co-operative, said the farmers' rice has high quality and is exported to the US and EU. Many agriculture co-operatives' products are sold in supermarkets and wholesale markets, and are also exported. There are 143 agriculture co-operatives in the province with more than 2,700 members whose average income is VNĐ110 million (US$4,740) per year, according to its Department of Agriculture and Rural Development.   In recent years, the province has provided human resource training as well as land, soft loans and advanced technologies for co-operatives. It has also invested in infrastructure and promoted trade for co-operatives' products. In the past 10 years, the province’s Co-operative Support Fund has provided loans of about VNĐ44 billion ($1.9 million) for 300 production projects, according to the province’s Co-operative Alliance.  In addition, about VNĐ7.3 billion ($310,000) was provided by the province to invest in technology infrastructure for 13 co-operatives in the past two years. Last year, the province established 31 new co-operatives. Đỗ Văn Sơ, chairman of the province’s Co-operative Alliance, said only 21 per cent of the province’s co-operatives operate effectively, while 13 per cent of the province’s co-operatives operate ineffectively.  To develop the collective economy, the province plans to review and improve the operational efficiency of co-operatives. It aims to have 60 per cent of co-operatives operating effectively. “Besides support policies to develop the collective economy, we plan to establish farmer clubs on a pilot basis,” Sơ said. This year, nine farmer clubs will be set up that will act as a link between farmers, companies, government authorities, scientists and economists to encourage more farmers to participate in the collective economy. Farmer clubs will invite companies to discuss market information and their requirements for fertiliser, plant protection chemicals, labels, and origin tracing. Co-operatives that meet the requirements will have guaranteed outlets, stable investments for production, lower middleman costs, and improved farmers' incomes./. Benefit sharing model introduced in sustainable organic production A brand new model of cooperation and benefit sharing between farmers, localities and entrepreneurs in organic farming was officially launched on Thursday. The memorandum of understanding signing ceremony took place at the Hà Quảng District People's Committee in Cao Bằng Province, as part of the workshop "Building sustainable cooperation mechanisms between businesses and localities in developing and managing local organic farming models”. This is part of BioTrade project's activities sponsored by the Swiss Federal Department of Economic Affairs (SECO) and implemented by Helvetas Vietnam to sustainably develop international-standard organic fields, bringing equal benefits for all related parties. The district’s Agricultural Service Centre was chosen to represent the local government and act as the coordinator. Their staff are trained by senior experts on organic farming, and then paid by enterprises to deliver training, supervision and ongoing support to farmers as agreed.  As part of this model, all products are fully bought by enterprises, farmers do not have to find the buyers themselves and can easily double or triple their income compared to traditional farming models. Besides, they will receive continuous support and guidance from local officials to solve technical issues during the cultivation process. The first benefit sharing model between businesses, local authorities and farmers in organic production will be deployed in Hà Quảng and Hòa An communes of Cao Bằng Province. They have now been growing organic ginger and chili, which are targeted to be the main economic development tree of the two districts. If successful, this model will soon be replicated across the whole province./. Vietcombank to maintain lending standards Vietnam’s largest bank Vietcombank will not lower lending standards in the post-pandemic stage to keep capital healthy in 2020, chairman Nghiem Xuan Thanh has said. The bank will raise the quality of credit to cope with the country’s economic development after the COVID-19 pandemic is over, he said at the bank’s annual shareholder meeting on June 26. Vietcombank will overhaul business activities to reduce the quantity of lending and increase retail sales, which include service charging and capital investment, the chairman said. The bank will look for new customers, review wholesale credit policy, increase investing in financial bonds and improve its banking investment division, Thanh added. In 2020, Vietcombank eyes total asset rising 7 percent year-on-year to 1.3 quadrillion VND (55.9 billion USD). Raised capital is projected to gain 8 percent year-on-year to 1 quadrillion VND and outstanding loans are forecast to increase by 10 percent year-on-year to 815.5 trillion VND. The bad debt ratio is set to be kept below 1.5 percent in 2020, with the dividend rate 8 per cent for this year and the bonus paid in cash or shares. Vietcombank did not set a specific earnings target for 2020. The performance will be decided upon Vietnam’s economic development in the post-virus stage and the earnings plan will have to be pending for the central bank’s approval, chairman Thanh said. At a meeting in mid-April, deputy governor of the State Bank of Vietnam Dao Minh Tu asked all State-controlled banks to cut at least 40 percent of total profit to help local businesses deal with COVID-19. Vietcombank recorded little annual change in its six-month profit. The figure in the first half of 2019 was 11.3 trillion VND. In 2020, the bank will raise its charter capital by issuing bonus shares and selling shares in a private deal to raise its capital adequacy ratio (CAR) to the minimum 9.24 percent under Basel II standard. Vietcombank will issue dividend shares at an 18 percent ratio to up charter capital by 6.67 trillion VND to 43.76 trillion VND in the third or fourth quarter of the year. In addition, a maximum of 241 million shares or 6.5 percent of the bank’s capital, will be sold in a private deal to raise some 2.41 trillion VND for charter capital. The bank also plans to hire more than 2,200 new employees in 2020./. Enterprises seek ways to boost agricultural and aquatic exports Vietnamese enterprises need to improve product quality, build their brands, and ensure product traceability to increase the exports of agricultural and aquatic products, experts said at a seminar on June 26 in HCM City. Exports of agricultural and aquatic products in the first five months of the year were US$15.49 billion, down by 4.1 per cent compared with the same period last year because of the negative impacts of Covid-19 on Viet Nam's key export markets such as China, the US, Japan and EU. In the first months of the year, Viet Nam’s agriculture sector faced other challenges in addition to the COVID-19 pandemic, including trade tensions and worse climate change. The recently signed Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP) and the EU-Viet Nam Free Trade Agreement (EVFTA) are expected to help the country increase its agricultural and fisheries output. However, with the technical barriers and strict food safety and hygiene standards, Viet Nam’s agricultural production face many challenges because it has still been done mostly on a small scale. However, with commitments under these FTAs, import tariffs will be reduced or eliminated in various markets, creating favourable conditions for Viet Nam’s agricultural exports, said Mai Xuan Thanh, deputy director-General of Viet Nam General Department of Customs. The EU market is very demanding, which requires products to be done in compliance with high standards to protect consumers. The EU is the largest importer of Vietnamese agricultural products as compared with other major markets like the US, Canada, New Zealand, Australia and Japan. Its consumers value high-quality products with special characteristics such as organic, fair trade and geographical indications, experts said. To expand to new markets, Vietnamese export products should meet good agricultural practice (GAP) standards such as VietGAP and Global GAP in order to meet the market demand and improve farmers’ incomes. In addition, businesses need to improve the added value of goods by applying technology in processing and preserving products, experts said./.  Dong Nai gets ready to welcome FDI moving out of coronavirus-hit China The southern province of Dong Nai plans to build industrial parks and expand existing ones to be ready for the shift in foreign direct investment flows from China to Viet Nam because of the COVID-19 pandemic, which has hit that country hard. Thanks to Viet Nam’s efforts to combat the novel coronavirus pandemic, in the first 5 months of this year, Dong Nai attracted a total of US$612 million in FDI, according to its Statistics Office. Nguyen Thi Cam Hong, deputy general director of the Dau Giay Industrial Zone Joint Stock Company, said some South Korean and Japanese investors came to survey the industrial zone last month. To welcome new FDI inflows, the province plans to build industrial parks at Long Thanh, Cam My, Thong Nhat, Trang Bom, and Nhon Trach districts and Long Khanh Town, each between 200ha and 900ha in size. It will also expand existing ones, which are all nearly full, such as Amata, An Phuoc, Long Duc, Tan Phu, Xuan Loc, Ho Nai, Song May, and Long Khanh. Cao Tien Dung, chairman of the province People’s Committee, said he had proposed at a meeting with Prime Minister Nguyen Xuan Phuc last month that priority should be given to inter-regional infrastructure works, especially highways such as Ben Luc-Long Thanh, Dau Giay-Phan Thiet and Dau Giay-Lien Khuong and Ring Roads No 3 and 4 and logistics systems and ports. So far 1,700 companies have invested in Dong Nai, including over 1,200 foreign ones from 43 countries and territories, who have brought in US$24 billion. To attract investment in industry, Dong Nai has established contacts with localities and companies around the world. Besides industrial parks, related services like logistics, construction, healthcare, and housing are also developing rapidly in Dong Nai./. Interest expense deduction limit raised to 30 per cent The interest expense deduction limit was raised to 30 per cent from 20 per cent to support businesses, according to the Government’s Decree No 68/2020/ND-CP, which took effect on Wednesday. Decree No 68/2020/ND-CP amended Decree No 20/2017/ND-CP’s regulation on the interest expense deduction limit on enterprises with related party transactions. Under the new decree, the deductibility of interest payments was limited to 30 per cent of the company’s earnings before interst, taxes, depreciation and amortisation with the excess carried forward indefinitely. The Ministry of Finance said that the previous cap of 20 per cent was within the corridor of 10 per cent to 30 per cent recommended by the Organisation for Economic Cooperation and Development but was not appropriate for Viet Nam, where most firms were thinly-capitalised with the level of debt much greater than equity capital. The new decree would be applied for the 2019 payable corporate income tax and retroactive for 2017 and 2018. The finance ministry estimated that the tax which must be refunded or deducted following the new regulation would total around VND4.8 trillion (US$210.13 million). The ministry’s statistics showed that among nearly 4,000 enterprises with related party transactions and interest expenses, about 700 had the ratio of interest expense on earnings higher than 20 per cent (more than 450 were foreign-invested). The deducted interest expense was estimated at about VND18 trillion (US$775.8 million) each year, VND10 trillion was for domestic companies. Domestic firms which had a ratio of interest expense on earnings higher than 20 per cent were mainly operating in manufacturing and processing, real estate, construction and power production and distribution./. Vietcombank to maintain lending standards Viet Nam’s largest bank Vietcombank will not lower lending standards in the post-pandemic stage to keep capital healthy in 2020, chairman Nghiem Xuan Thanh has said. The bank will raise the quality of credit to cope with the country’s economic development after the COVID-19 pandemic is over, he said at the bank’s annual shareholder meeting on Friday. Vietcombank will overhaul business activities to reduce the quantity of lending and increase retail sales, which include service charging and capital investment, the chairman said. The bank will look for new customers, review wholesale credit policy, increase investing in financial bonds and improve its banking investment division, Thanh added. In 2020, Vietcombank eyes total asset rising 7 per cent year-on-year to VND1.3 quadrillion (US$55.9 billion). Raised capital is projected to gain 8 per cent year-on-year to VND1 quadrillion and outstanding loans are forecast to increase by 10 per cent year-on-year to VND815.5 trillion. The bad debt ratio is set to be kept below 1.5 per cent in 2020, with the dividend rate 8 per cent for this year and the bonus paid in cash or shares. Vietcombank did not set a specific earnings target for 2020. The performance will be decided upon Viet Nam’s economic development in the post-virus stage and the earnings plan will have to be pending for the central bank’s approval, chairman Thanh said. At a meeting in mid-April, deputy governor of the State Bank of Vietnam Dao Minh Tu asked all State-controlled banks to cut at least 40 per cent of total profit to help local businesses deal with COVID-19. Vietcombank recorded little annual change in its six-month profit. The figure in the first half of 2019 was VND11.3 trillion. In 2020, the bank will raise its charter capital by issuing bonus shares and selling shares in a private deal to raise its capital adequacy ratio (CAR) to the minimum 9.24 per cent under Basel II standard. Vietcombank will issue dividend shares at an 18 per cent ratio to up charter capital by VND6.67 trillion to VND43.76 trillion in the third or fourth quarter of the year. In addition, a maximum of 241 million shares or 6.5 per cent of the bank’s capital, will be sold in a private deal to raise some VND2.41 trillion for charter capital. The bank also plans to hire more than 2,200 new employees in 2020. Ba Ria-Vung Tau focuses on making its IPs competitive Numerous suggestions for strengthening the competitiveness of industrial parks and developing model industrial parks in the southern province of Ba Ria-Vung Tau were discussed at a seminar held yesterday in the province. Organised by the Ba Ria-Vung Tau Industrial Zones Authority (BIZA), the seminar, titled “Solutions to improve competitiveness of local industrial parks; developing model industrial parks”, was attended by hundreds of local authorities, experts and investors from the province and neighbouring areas. They included executives, experts and representatives from the Korean Trade-Investment Promotion Agency (KOTRA), Thailand Board of Investment (BOI), Japan International Cooperation Agency (JICA), and The Japan External Trade Organisation (JETRO). The seminar collected ideas from experts and investors for inputs for a draft political report to be submitted to the 7th meeting of the provincial Party Committee for 2020-25. During the seminar, experts discussed a number of issues that require attention when building industrial zones. They also talked about experiences in building standard models of industrial zones and lessons from them and how to go about building standard models. Foreign experts shared lessons in developing industrial parks from their countries. A Ba Ria-Vung Tau representative delivered a report on infrastructure development and drawing investment in local industrial zones. Improving the competitiveness of industrial parks and developing model industrial parks are indispensable trends that provinces and industrial park developers are following because sustainable development is what investors focus on when they begin a project. Experts said it is now difficult to ensure long-term profits without ensuring environment, socials, governance/sustainable development goals (ESG/SDGs), the three central factors in measuring the sustainability and societal impact of an investment in a company or business because these help determine the future financial performance of companies including return and risk. Seeing the trend, industrial park developers and Ba Ria-Vung Taus authorities are investing considerably to improve the quality of parks like adopting the Internet of Things and other advanced technologies and applications and generally upgrading infrastructure. They are also soliciting investments in their parks from sectors with high value-addition. Akira Shimizu, chief representative of JICA Vietnam, said: “In September 2015 the United Nations General Assembly adopted the 2030 Agenda for Sustainable Development, which set the Sustainable Development Goals (SDGs), a collection of 17 global goals designed to be a “blueprint to achieve a better and more sustainable future for all.” “Many international businesses put more awareness on SDGs, and convert their SDGs awareness into concrete business actions. More specifically, companies prioritise the SDGs based on their relevance to their countries and sectors of operation. Companies must strike a balance between business growth and societal and environmental impacts.” Many Japanese businesses, as initiated by Keidanren (the Japan Business Federation), place great emphasis on ESG, which contributes to achieving the SDGs, thereby increase the companies values and create its positive image. In other countries like South Korea, many model industrial zones have been set up including the Korean Free Economic Zone (KFEZ), Incheon Free Economic Zone (IFEZ), Busan-Jinhae Free Economic Zone (BJFEZ), Gwangyang Bay Free Economic Zone, Yellow Sea Free Economic Zone (YESFEZ), and East Coast Free Economic Zone (EFEZ). In Viet Nam, a number of model industrial parks have been developed to attract foreign investors and provide them with the best investment environment. “Viet Nams trend is also eco-industrial development, and relevant legislation is under development.” Shimizu said. The trend is evident in Ba Ria-Vung Tau Province, a member of the Southern Key Economic Zone. Thanks to the efforts of local authorities and investors, Ba Ria-Vung Tau is now among the provinces in the country with the most developed industrial parks. Of its industrial parks, the Phu My 3 Specialised Industrial Park (SIP) is one of model industrial zones in the whole country. Phu My 3 Specialised Industrial Park (Phu My 3 SIP), the only one of its kind in Viet Nam, was established under a Government decision in December 2014. It was built on an area of 999ha in Phuoc Hoa Ward, Phu My Town, Ba Ria-Vung Tau Province by the Thanh Binh Phu My JSC, a 100 per cent Vietnamese private company. Phu My 3 SIP has world-class technical infrastructure and utilities designed and built by professional global contractors to meet the demands of a wide range of sectors like heavy industry, supporting industries, chemical and petrochemical industries, and multi-sectoral industry. The park has been investing to complete the synchronised technical infrastructure, providing services of electricity, water, natural gas and industry, telecommunications information ... to the fence of customers' factories. This is a big difference compared to other industrial zones and is trusted and highly appreciated by investors. Phu My 3 SIP provides comprehensive investment support services in multi languages via a one-stop service that assists customers with all affairs relating to investment procedures, legal issues, recruitment, logistics, and on-site customs services. With a port inside and logistic services available, the park is an ideal destination for companies in all sectors ranging from heavy industry to chemicals and automobile to supporting industries as it helps them cut costs and enjoy comprehensive services. The park has an excellent location with access to key traffic infrastructure such as National Highway 51, National Highway 1A, the HCM – Long Thanh Dau Giay Expressway, Bien Hoa – Vung Tau Expressway, the Trans – Asia Road, inter-regional highways, inter-port roads, and inter-industrial zone roads. Nguyen Thi Thao Nhi, chairwoman of the Thanh Binh Phu My JSC, said her company is strengthening its relationship with international organisations like JETRO, JICA, HCM City Japanese Friendship Club (JCCH), Korea Trade-Investment Promotion Agency (KOTRA), Korean Chamber of Commerce (KOCHAM), American Chamber of Commerce (AMCHAM), and European Chamber of Commerce in Viet Nam (EUROCHAM), Thailand Board of Investment (BOI) to attract more foreign investors to Ba Ria-Vung Tau in general and to Phu My 3 SIP in particular. Phu My 3 SIP recently attracted 20 projects, among that there are 3 Korean investors, 1 joint venture from Switzerland, 12 Japanese investors with a total capital of around VND22.5 trillion. Her company has kept investing in infrastructure and amenities to offer tenants convenience. For instance, it has offices for rent, a conference centre and a restaurant. In future, it plans to build an 18-hole golf course, sports centre and lodging to serve expats working and living in the park. “Our goal is to develop a comprehensive modern industrial park that meets international standards and attracts investors from diverse sectors while ensuring sustainability and environment friendliness,” Nhi said. The development of Phu My 3 SIP is clear proof that the development of industrial parks is an indispensable trend the province has to pursue to reach the goal of becoming an international logistics centre, ensuring sustainability and doubling its economy within 15 years./. Vietnam, Czech Republic step up tourism cooperation The Czech - Vietnam Tourism Forum was held in Prague on June 30, as part of activities to celebrate the 70th founding anniversary of bilateral diplomatic ties and step up tourism cooperation following the COVID-19 pandemic. Speaking at the event, Vietnamese Ambassador to the Czech Republic Ho Minh Tuan said as bilateral tourism cooperation remains modest compared to potential of both sides, the forum will provide a platform to outline measures and offer attractive tour packages. In an interview recently granted to the Vietnam News Agency's reporter in the Czech Republic, Director of Foreign Offices and B2B Relations at the Czech Tourism Authority Frantisek Reismuller said Vietnam is part of the Czech Republic's tourism promotion plan in the near future, and there are a lot of opportunities for bilateral cooperation. Chairman of the Czech-Vietnam Friendship Association Milos Kusy thanked Vietnam for providing medical supplies for the European country during the COVID-19 pandemic, and pledged to do the best to further reinforce bilateral relations, including in tourism. At the event, tourism officials and travel agencies introduced the potential of each country and answered questions by those wishing to take trips in the near future./. Vietnam, Japan discuss boosting trade of consumer goods A teleconference on trading in consumer goods between Vietnam and Japan was held in Tokyo on June 30, with nearly 40 Vietnamese producers and 55 Japanese importers taking part. With one plenary session and eight trade sessions, the event is expected to boost two-way trade as the COVID-19 pandemic has disrupted global supply chains and hurt global trade. Japanese experts updated the latest regulations and procedures related to the import of consumer goods in the country. Participants at the event also discussed business opportunities. Talking with the Vietnam News Agency, Vietnamese Trade Counsellor in Japan Ta Duc Minh expressed his hope that via the event, Vietnamese and Japanese enterprises will learn more about each side’s needs and ability, thereby reaching mutually-beneficial deals. According to the Vietnam Trade Office in Japan, Japan is one of the most important trade partners of Vietnam. In the first five months of this year, two-way trade went up 2.2 percent annually to 15.6 billion USD. Of which, 7.83 billion USD was Vietnam’s exports. Experts forecast that once the pandemic is under control, demand for consumer goods such as agro-forestry-aquatic products and household appliances in Japan will increase. June CPI in Ho Chi Minh City up 0.66 percent The June CPI in Ho Chi Minh City was up 0.66 percent from last month, and up 2.1 percent from the same month last year, the city’s statistics office said on June 30. Transport services prices surged 6.92 percent month-on-month due to petrol prices being adjusted up twice on May 28 and June 12. The prices of food and foodstuff group rose 0.95 percent, driven by high pork prices. The group of restaurants and catering services also saw an increase of 0.53 percent. Meanwhile, the prices of beverage and tobacco was down 0.15 percent, the group of housing, utilities, fuels and construction materials saw a decrease of 0.69 percent. The gold price in June picked up 0.56 percent from May and 31.77 percent from the same month last year. The USD/VND exchange rate dropped 0.61 percent on a monthly basis and down 0.32 percent year on year. The average CPI in the first half of this year was up 3.48 percent from the same period last year. VNN