return icon Vietnamnet.vn

BUSINESS IN BRIEF 10/11

 Jan-Oct export-import tax collections up 14.4%; FPT IS wins US$1.4 million deal in Philippines; Garment sector seeks material suppliers from India; Vietnam economy enjoys steady growth in 2014; FDI firms encouraged to invest in agriculture

Good tidings lift Vietnamese shares

Rumours of the impending arrest of another top company executive made investors cautious early last week.

However, a reduction in petrol prices and the successful sale of Government bonds worth US$1 billion on the international market helped to balance stock market sentiments and boost share prices.

The petrol reduction last November 7 marked the ninth time in a row that the price of the commodity was reduced in the last four months.

Total bids for bonds that the Vietnamese Government recently sold on the international market were nearly 11 times higher than the actual offering.

Numerous companies also provided good news last week. Investment fund Global Emerging Market pledged to invest about $80 million in property developer Hoang Anh Gia Lai (HAG), boosting HAG share prices for three consecutive sessions.

Techno-Agricultural Supplying announced it has increased its charter capital nine times, the highest rate so far, to VND1.3 trillion ($61.9 million).

Meanwhile, Hung Vuong (HVG) and Minh Phu (MPC) are locked in a tight battle for the top ranking among the country's seafood exporters. HVG followed MPC by a single degree in export ranking in the first eight months of 2014, but HVG announced it would grab the top spot by 2016.

Also, Japanese investors have shown increasing interest in the Vietnamese logistics sector. Last week, Shibusawa Warehouse registered for its plan to purchase a third of total shares in Vinafco (VFC). VFC shares hit the ceiling price last Friday, making it necessary for the Japanese logistics company to spend about VND136 billion ($6.4 million) for the purchase.

In addition, several companies reported high growth in revenues and profit such as Vinamilk, PetroVietnam Technical Services and Viet Nam Electricity Construction.

At the HCM City Stock Exchange, the VN-Index rose by 0.28 per cent compared with the previous Friday's close, reaching 602.59 points. Trading value and volume averaged VND2.15 trillion ($101 million) and 121 million shares, a 15-per cent increase over that of the previous week.

The HNX-Index at the Ha Noi Stock Exchange climbed by 1.72 per cent to 89.55 points. Average trading figures per session on the northern bourse reached VND794.8 billion ($37.4 million) and 54.3 million shares, a 10-per cent increase over that of the previous week.

Investment money flowed mainly to real estate shares last week. Listed codes with the highest trading volume were mostly in real estate, including FLC Group, Kinh Bac Urban City, Sacomreal and Hoang Anh Gia Lai, as well as An Duong Thao Dien, Hoang Quan and Tan Tao.

Foreign investors continued to play the role of net buyers with a margin of VND152.8 billion ($7.2 million).

Last week, the share prices of Nam Kim Steel, paper and printing company Dong Hai Ben Tre, Transport and Chartering Corporation and PetroVietnam-Nghe An Investment jumped by 14 to 25 per cent while those of chemical company Sana WMT plunged by more than 21 per cent. These are the top gainers and loser that investors may consider trading. 

Petrol price cut for ninth time

Domestic petrol prices were cut yesterday for the ninth time this year, in the wake of falling global fuel prices.

However, there is no change in the prices of consumer goods and services, including transport fees.

Following a joint decision issued by the ministries of industry and trade, and finance, petrol and oil retailers yesterday reduced the prices of RON 92 and RON 95 gasoline by VND950 to VND21,390 and VND21,990 per litre respectively.

The price of 0.05S and 0.25S diesel varieties was also cut by VND520 to stand at VND19,240 per litre. The kerosene price was slashed by VND360 per litre to VND20,140, while that of mazut was reduced by VND900 to VND16,230 per litre.

The ministries also increased the petroleum stabilisation fund subsidy level by VND300 to touch VND600 per litre.

The domestic petroleum product prices have been adjusted 19 times this year, including five petrol price hikes totalling VND1,430 and nine petrol price reductions totalling VND4,250, as well as seven price adjustments of other petroleum products.

On Thursday, the finance ministry instructed the relevant agencies to inspect the service charges of transport enterprises, as their transport fees have remained unchanged despite the sharp cuts in petrol and oil prices this year.

According to the ministry, the transport costs and consumer goods prices that are directly affected by fuel prices have not been adjusted in accordance with the fuel price fluctuations.

The ministry asked the transport ministry and the People's Committees in all cities and provinces to instruct transport enterprises to strictly follow the regulations on managing and listing transport fares and costs.

The authorities must also direct transport enterprises, especially those which increased their fees during the fuel price hikes this year, to recalculate and reduce them in accordance with the fuel costs. It is estimated that fuel costs account for roughly 40 to 45 per cent of the transport fees.

When petrol prices were raised this year, several transport companies joined the producers and suppliers of consumer goods in increasing their prices to offset the petrol price increase.

Vu Vinh Phu, chairman of the Ha Noi Supermarkets Association, said that the petrol and oil price reductions would immediately impact on transport fees, which would, in turn, impact on the prices of consumer goods.

He noted that consumers were at a disadvantage now as transport fees and the prices of consumer goods remained unchanged.

However, transport companies gave various reasons for not reducing their prices.

Representatives from the Viet Nam Automobile Transportation Association said that while petroleum and oil prices had fallen sharply this year, the cut each time was only a small percentage. So the transport companies were finding it difficult to immediately cut prices.

They said that the transport companies increased their fees when petrol and oil prices rose by five per cent, so the reduction was often the same. However, the reduction in petrol and oil prices this year was only roughly one to two per cent each time.

Besides, the association said, after an increase or decrease in petrol and oil prices, transport companies needed more time to make the calculations that will serve as the basis for transport fee adjustments.

Taxi and passenger transport companies would also find it difficult to make any adjustments as they would have to reprint tickets, adjust taxi metres and seek tax agencies' approval, they pointed out, adding that the companies can adjust prices if the petrol and oil price decrease or increase lasts for a long time.

Since transport companies are maintaining their prices, the producers and suppliers of consumer goods said that they would also maintain theirs.

Meanwhile, according to the current regulations, the relevant ministries cannot intervene, as the market mechanism is managing the prices of consumer goods and services, except for electricity, water and petrol.

Jan-Oct export-import tax collections up 14.4%

Vietnam’s export and import duty collections exceeded VND206 trillion in January-October, rising 14.4% over the same period last year and meeting 92.2% of the year’s target, according to the General Department of Customs.

The department said of the amount collected, VND10.3 trillion was from exports, VND55.1 trillion from imports, VND12.6 trillion from special consumption tax, VND128 trillion from value added tax, VND244 billion from environmental protection fee and VND230 billion from others.

Explaining the strong year-on-year increase, the department said some products registered higher import revenues such as machine, equipment and spare parts (up 20.4%), oil and gas (up 19.4%), steel and iron (10.5%), automobiles (up 93%), auto parts (up 28.6%), coal (up 44%), chemical products (up 16.4%) and wood products (up 55.5%).

The department estimated total export and import value in the first ten months of this year at over US$244 billion, increasing by 12.3% year-on-year. Of which, export stood at US$123 billion, up 13.4%, while imports rose 11.2% to around US$121.2 billion.

The department calculated the nation ran a trade deficit of US$400 million in October but post a trade surplus of US$1.86 billion in the year to October.

FPT IS wins US$1.4 million deal in Philippines

FPT Information System Company (FPT IS), a subsidiary of FPT Group, has won a US$1.4-million contract to install an IT system for the Philippine government to manage complaints of its citizenry.

The bidding package is the first to be won by FPI IS in the Philippines and has raised the total number of contracts the company has secured overseas in the year to date to 14 with a total value of US$26.4 million.

The deal requires FPT IS to provide, install, test and transfer the system to the Philippines government to manage complaints lodged by its citizens.

The project is expected to be carried out in ten months at governmental agencies including the Department of Finance, the Bureau of Internal Revenue, and the Bureau of Customs.

FPT IS will work with those agencies to establish the database system for denunciations and accusations in each year and help improve the process of handling such complaints and accusations.

Filipino authorities can also use the database system to easily find out changes in governmental agencies based on the number of petitions, while the government can manage activities of its agencies more closely.

FPT IS has defeated bidders from the U.S., Germany, Denmark, and Spain as its solutions met the needs of the Philippines and at the same time it was the contractor with the most competitive bid.

The company will open its representative office in the Philippines within this month and work towards establishing its branch there.

Le Anh Tuan, director of the globalization department of FPT IS, said the Philippines is one of the company’s major markets as the country shares cultural similarities to Vietnam’s and in recent years, the Philippines has focused investments on the IT sector.

Leaders of FPT IS expect to win a second contract in the Philippines next year. FPT IS will expand its business to the banking sector, hospitals and enterprises in the market.

Brackish water shrimp farming sees record growth

Brackish water shrimp aquaculture has seen a record growth in 2014, said Minister of Agriculture and Rural Development Cao Duc Phat at a conference on November 4.

This year, the country has an estimated 685,000ha of brackish water shrimp farms which produce a total output of 660,000 tonnes, up 4.4 percent in terms of area and 20.4 percent in production.

In the first nine months, the export of shrimp earned the country 2.93 billion USD, a 17.2 percent rise compared to the same period last year.

At the same time, the industry is facing a number of problems including unstable market prices and seasonal diseases.

Minister Phat urged relevant agencies to timely equip farmers with updated market information and expand certified shrimp cultivation models while actively implementing disease prevention programmes. He also noted that there is a need to continue expanding the market, especially in the US and Japan.

In 2015, the industry aims to expand the farming area to 700,000 ha for an output of 700,000 tonnes, year-on-year increases of 2.2 and 6.6 percent, respectively.

Ha Tinh province invites more Singaporean investment

Minister of Planning and Investment Bui Quang Vinh called for more investment from Singaporean firms in the central province Ha Tinh, pledging to improve the locality’s investment climate.

The Vietnamese Government is committed to ensuring the safety of international enterprises and creating favourable conditions, including for Singaporean firms, Vinh said during a seminar jointly organised by the Singapore Business Federation and the Vietnamese Embassy on November 5, which was attended by representatives from around 100 Singaporean and Asian firms.

Ha Tinh enjoys a strategic location in the East-West Economic Corridor, connecting the northern, central and southern regions of Vietnam , he noted.

Meanwhile, Chairman of Ha Tinh’s People’s Committee Vo Kim Cu highlighted the province’s potential, advantages and investment opportunities, as well as its preferential policies to attract investment to its industrial parks, including Vung Ang and Cau Treo.

Ha Tinh is one of the localities that benefit the most from the Government’s preferential investment policy in terms of tax and land use regulations, especially for projects in Vung Ang industrial park and Cau Treo border gate economic zone, he noted.

In addition, the province vows to support investors with ground clearance, infrastructure construction and human resources development, he stated.

The provincial leader encouraged Singaporean firms to get involved in ship repairs, maintenance and maritime services; industrial park development; logistics; administrative, banking and insurance services; and the construction and management of hospitals and schools.

Phan Toan Thang, Founding Director of Cell Research Corporation Pte Ltd, expressed an interest in investing in healthcare services in the province.

Meanwhile, Lee Yee Hern, Chief Financial Officer of Kinderworld, said he was keen to contribute to Ha Tinh’s education sector and professional capacity development, targeting thousands of workers in local industrial parks.

Following the seminar, a number of cooperation documents were signed, including a memorandum of understanding on the partnership between LC Travel Planner and Ha Tinh’s Department of Planning and Investment on a project to turn Ha Tinh City into a trade centre and hotel and tourism complex; and another between Ruixin Investment Pte and the Management Board of the Ha Tinh Economic Zone on a logistics project in Vung Ang economic zone.

Agribank expands cross-border payment services in Laos

The Vietnam Bank for Agriculture and Rural Development (Agribank) signed an agreement with the Agricultural Promotion Bank (APB) of Laos on cross-border payments via internet banking and launched the services with the Phongsavanh Bank (PSVB) at separate ceremonies on November 4-5.

Agribank has offered cross-border payment services on the Lao market since 2008, with APB and PSVB being its first two partners.

Speaking at the launch ceremony, PSVB Managing Director Sengdao Bouphakonekham spoke highly of the expansion of Agribank’s operations in Laos.

The successful establishment of the cross-border payment system via internet banking with the two Lao banks marks a step forward, helping the parties involved develop their products and provide excellent and diversified services for their customers, which contributes to trade and investment between the two countries.

As of September 30, Agribank’s total assets amounted to approximately 36.6 billion USD. The bank has developed a network with 1,000 financial institutions and banks in nearly 100 countries and territories. International financial institutions entrusted the bank with nearly 7 billion USD.

Vietnam’s support industry eyes European market

A project aiming to help enhance the capacity of Vietnam’s support industry to meet the requirements of the European market was launched at a workshop in Hanoi on November 5.

The project targets Vietnamese small-and-medium-size enterprises and will be implemented in Hanoi, Ho Chi Minh City and several other provinces until June 2017 with a budget of nearly 413,000 EUR, of which the EU funds 371,000 EUR. It is part of the European Trade Policy and Investment Support Project (EU-MUTRAP).

Ho Le Nghia, Deputy Director of Industrial Policy and Strategy Institute, noted that the government has prioritised the development of the support industry with a view to ensuring provision for other domestic industrial sectors and playing a greater role in the global supply chain.

He said not only domestic enterprises but also European and international customers will benefit from the project.

According to Director of Supporting Industry Enterprise Development Centre Truong Thi Chi Binh, the programme entails a series of practical activities such as conducting research on local makers’ capacity; launching training courses on technical knowledge and quality-management skills; and supporting Vietnam’s businesses to attend relevant exhibitions overseas.

ICA helps southern provinces improve business environment

The Japan International Cooperation Agency (JICA) pledged to send its experts to help southern provinces improve business environment from now to September 2015 during a working session with the People’s Committee of the southern province of Binh Duong on November 4.

Kikuchi Tadashi from JICA said this is part of a large-scaled cooperation programme between the agency and Vietnam’s Ministry of Planning and Investment in an effort to deepen the relationship between Japanese enterprises and authorities of southern provinces.

Vice Chairman of the Binh Duong provincial People’s Committee Tran Thanh Liem spoke highly of JICA’s “initiative”, saying that it will open up more opportunities for both sides, and help improve investment climate in the province as well the southern region.

Japan is running 255 projects with a total disbursement of 4.7 billion USD, topping the list of 36 countries and territories investing in Binh Duong.

Most of the projects operate in electronics, medical equipment, food processing and real estates, and trade and services.

Banks pledge continued credit priority for Mekong Delta

The banking sector will continue to give lending priority to rice production, aquaculture and fruit cultivation and processing in the Mekong Delta to help the region fully tap its potential for sustainable development, according to Governor of the State Bank of Vietnam (SBV) Nguyen Van Binh.

The governor made the promise at a workshop on banks’ role in agricultural restructuring and rural development in the Mekong Delta which was held in Soc Trang province on November 5 as part of the Mekong Delta Economic Development (MDEC) forum.

Governor Binh said his bank will continue investing in infrastructure development and carrying out the Government’s credit programmes to for rice production and aquaculture.

Participants focussed their discussion on the impacts of the SBV’s credit policy on agricultural restructuring and new style rural area in the region, the obstacles in credit access for business and household production units, as well as the factors affecting the quality and efficiency of credit activities in agriculture and rural development in the Mekong Delta.

They also proposed solutions to enhancing local credit organisations’ capacity in mobilising capital and lending.

It was noted that difficulties in credit activities in the Mekong Delta include the dominance of small-scale businesses; loose production-processing-consumption chain; and ineffective distribution channels.

Last year, the Mekong Delta’s credit growth reached 12.4 percent. As of September 30 this year, total outstanding loans of credit institutions in the region stood at VND331.5 trillion (US$15.7 billion), up 8.49% from the end of last year and accounting for 9% of the national banking system’s lending. Statistics also showed nearly 70% of the loans were short-term.

Investment in agriculture and rural areas has increased significantly in recent years with outstanding loans totalling VND160 trillion (US$7.6 billion) by September 30. The figure showed a 7.5% rise compared to the end of 2013, accounting for 22% of total loans in this field nationwide

The Mekong Delta, comprising one city and 12 provinces, accounts for 27.2% of the country’s agricultural land.

The region contributes 40.7% of the national agro-forestry output, 53.4% of rice, 70% of fruit and 68.7% of seafood.

Ninety percent of the country’s rice export volume and 70% of seafood export turnover come from the region, according to the Ministry of Agriculture and Rural Development.

Jetstar Pacific receives first Airbus 320 with Sharklet wings

Jetstar Pacific took delivery of its ninth Airbus A320 aircraft on November 5 and the first equipped with Sharklet wings at Tan Son Nhat international airport in HCM City.  

The 180-seat aircraft was registered under VN-A561 and placed in service on November 6 to serve passengers in both domestic and international air routes.

This is the ninth modern aircraft slated for receipt by Jetstar Pacific, which previously announced plans to increase its fleet to ten before the upcoming Lunar New Year Festival.

The Sharklet bent back wing tip was designed to offer a fuel savings option on Airbus A320 aircraft.

Businesses urged to protect their trademarks

Vietnamese enterprises need to take prompt actions to develop and protect their trademarks in overseas markets, especially when intellectual property rights are increasingly important in the global trend, experts said at a workshop in Hanoi on November 5.

The Vietnam Chamber of Commerce and Industry (VCCI) reported that while the number of businesses registering trademarks and innovations in the country is increasing, only about 1,000 brand names were registered abroad – a relatively modest figure in comparison with hundreds of thousands of active Vietnamese firms.

According to the Dean of the Intellectual Property Department of the University of Social Sciences and Humanities, Tran Van Hai, a majority of domestic businesses pay little attention to brand registration, resulting in losing their IP rights in the international market. He cited examples of the Vietnam Industrial and Commercial Bank and coffee from Buon Ma Thuot which lost their trade names to foreign companies.

As trade name and intellectual property are playing a bigger role in the global value chain, a competitive country needs to build and develop highly-competitive trademarks both domestically and internationally, said VCCI Deputy Chairman Doan Duy Khuong.

A report of the National Office of Intellectual Property (NOIP) under the Ministry of Science and Technology said Vietnam recorded 4,125 patent applications, 29,938 applications for industrial design registration, and 333,733 other applications for national design and trademark registration since 1988.

RoK tops Dong Nai’s footwear importers

The Republic of Korea (RoK) is the largest market for footwear exported from the southern province of Dong Nai, with a turnover of 478 million USD during the first ten months of this year.

The ROK was followed by the US with 381 million USD, and Taiwan with 183 million USD in export turnover, according to Director of the provincial Department of Industry and Trade Le Van Danh.

He also said exports to the RoK will continue to increase in the future as the Vietnam- Korea Free Trade Agreement will take effect in 2015.

During the 10-month period, the province generated more than 1.7 billion USD from footwear export, up by 13.3 percent year-on-year.

Currently, businesses from France, New Zealand, Hong Kong, and Taiwan plan to increase their imports number of products from Vietnam, such as garments, construction materials, sanitation equipment, and food, Danh said, adding this is a good chance for local businesses to boost exports to these markets.

Vietnam, foreign donors cooperate to realise development goals

Vietnam’s ministries, sectors and their development partners need to promote cooperation and information sharing so as to swiftly achieve the country’s development targets set forth in 2013, said Victoria Kwakwa, Country Director of the World Bank in Vietnam.

At a conference reviewing the outcomes of the Vietnam Development Partnership Forum 2013 (VDPF 2013) in Hanoi last week, Kwakwa said the local authorities and development partners have exerted efforts in implementing the goals and gained remarkable achievements, especially in poverty reduction and water supply.

She emphasised the need for more collaboration among the sides and the engagement of people and social organisations in clarifying targets that should be achievements during the VDPF 2014.

According to Deputy Minister of Planning and Investment Nguyen Chi Dung, with the support of partners, the four groups of actions adopted at VDPF 2013 have been implemented effectively, reaping positive results. They included poverty reduction, the private sector’s participation in supplying public services, vocational training, and environmental management.

VDPF 2013 marked the first time Vietnamese agencies and their development partners had performed a new policy dialogue mechanism, discussed and built comprehensive action programmes, with a focus on addressing prioritised policy groups.

VDPF was firstly held in 2013, replacing the Consultative Group Meeting of Donors. It reflects the new position of Vietnam, from being a recipient of official development assistance (ODA) to become a development partner of other countries and international organisations.

VDPF 2014, which is scheduled to open in December, will focus on reforming economic institutions and strengthening self-reliance and competitiveness of the Vietnamese economy.

Garment sector seeks material suppliers from India

Many garment businesses are seeking material suppliers from ASEAN countries and India, said Tran Quang Nghi, Chairman of the Vietnam National Textile and Garment Group (Vinatex).

Nghi said it is feasible for the Vietnam and India garment sectors to boost cooperation for mutual benefits. Vietnam currently ranks fifth among the world’s leading garment exporters while India is strong at producing textile and garment materials.

Sharing the same view, Tran Viet, head of the Vinatex market department, said the Indian Consulate General has introduced a ‘Make in India’ campaign initiated by Prime Minister Narendra Modi aimed at developing the country into a production workshop in the world.  

India should become a material production workshop for the Vietnam textile and garment sector, Viet said.

Viet adds a large number of Vietnam firms attended an international exhibition on garment in Ahmedabad, India in October, 2014, showing their special attention to Indian material supply. They also had a chance to make fact-finding tours of workshops and discuss cooperative opportunities with Indian partners.

Pham Ngoc Diep, Vice General Director of Dong Xuan Knitting Company, says Vietnam is weak at dying while India is good at doing the task. Businesses from two countries should cooperate and transfer dye technology.

In addition, Vietnam needs Indian assistance in planting cotton as if having a material zone, businesses should be active in production and take full advantages of Trans-Pacific Partnership (TPP) agreement.

Nghi says in the next 1 to 2 years economic exchanges between Vietnam and India will further develop, helping Vietnam garment firms seek high quality input supplies at reasonable prices.

According to ASEAN-India Free Trade Agreement, garment is one of goods that the two countries wow to cut taxes. This is a good opportunity for Vietnam to diversify material supply in order to restructure the production model and boost exports.

Local handicrafts a hit at Algeria fair

Vietnamese traditional handicrafts are garnering the special attention of fairgoers at the 19th International Craft Industry Fair ongoing in Algiers from November 4-11.

This year’s fair features more than 300 pavilions displaying a wide range of traditional handicrafts that range from ceramics, wood products, embroidery and bags, to foods and beverages from 15 countries around the globe.

Those attending the Vietnam pavilion compliment the high quality, beautiful designs and reasonable prices of the items.

Algerian Minister of Tourism and Craft Industry Yamina Zerhouni says he appreciates the quality of Vietnam products and hopes that the fair will provide a good chance for craftsmen and businesses to exchange experiences and locate cooperation partners.

Huynh Thi Anh Tuyet says this is the eighth year she is attending the fair and fairgoers most favour the Ao Dai (traditional long dress), silk scarf and lacquers.

Vietnam economy enjoys steady growth in 2014

The Vietnamese economy continues its steady growth – for the first nine months of 2014, GDP growth was 5.62%, higher than the inflation rate of 5%, said Professor, Ph.D. Dmitry Mosyakov from the Russian Academy of Sciences.

Prof. Dmitry, Head of the Centre for South-East Asia, Australia and Oceania Studies at the Institute of Oriental Studies in the Russian Academy of Sciences, made his remarks on the online magazine “New Eastern Outlook”.

Here’s Dmitry Mosyakov’s full article posted on New Eastern Outlook website on November 5:

The media publishes a lot of different information about the economic development of China, but in the East there are many countries with which Russia (and others) would be able to interestingly and profitably develop cooperation in the coming years. One of these countries is Vietnam. It is an old friend and trading partner, which has close ties to Russia, especially in the field of military cooperation, oil and gas, nuclear power, and tourism. What is the economic situation in this country?

The key index PMI, which indicates the situation in production over the course of 13 months, is higher than 50 points. Exports are also showing a positive trend. Over the nine-month period export volume climbed to US$109.63 billion, 14.2% higher than the same period in 2013. The trade surplus is US$2.47 billion.

Vietnam’s stock market continues to rank among the top five fastest growing markets in the world. During the first nine months of 2014 the key indices (VN-Index and HNX-Index) rose by 19.9% and 30.4% respectively compared with the same period in 2013. The Vietnamese real estate market is growing as well, the rate of the Vietnamese Dong remains stable, and the country’s currency reserves reached a record level of US$35 billion.

The situation in the economy today is so favourable for investment that the US Chamber of Commerce in Singapore include Vietnam in the list of the most attractive ASEAN countries for American businessmen. The well-known Fitch rating agency recently announced its intention to increase Vietnam’s rating from B + to BB- due to the stable growth of the economy.

It should be noted that, like any growing Asian economy, Vietnam faces a number of relevant problems. Vietnamese economists consider it dangerous that the national economy is highly dependent on foreign-owned enterprises, which account for about 70% of the country’s total exports. Another problem is the low demand in the domestic market, it is 1.5% lower today than a year ago. The number of liquidated companies is also large. In less than nine months in 2014 about 50,000 companies went bankrupt, slightly more than in 2013. The amount of arrears of economic actors is also great, and the process of privatising public sector enterprises is proceeding slowly. During the first eight months of 2014 only 55 out of 432 companies were privatized, all of which must undergo this procedure by 2015.

It should be noted that all these problems, although they create difficulties in the development of the economy, do not in fact have a critical effect on the overall acceleration of development. The key indicators of the Vietnamese economy look very positive, so virtually all the international rating agencies have made forecasts of GDP growth in Vietnam of 5.4-5.6% in 2014 and 6% and 6-7% in 2015 and 2016-2017, respectively.

Vietnam is not the only country in Southeast Asia that is showing such positive results today. Thailand, Malaysia, Singapore, and Indonesia are also demonstrating fairly rapid economic growth in 2014. All are large and emerging markets with modern financial and industrial infrastructure. Partnership with them will not only reduce the negative impact of sanctions on the Russian economy, but also give it new impetus for development.

Nhon Trach 2 power plant supplies 15 billion kWh to national grid

The Nhon Trach 2 power plant in the southern province of Dong Nai had by November 5 supplied 15 billion kWh to the national grid after three years of operation.

Since early this year, it has generated 3.9 billion kWh of electricity, fulfilling 98 percent of its yearly plan.

With the current capacity, the plant will maintain the provision of 5-6 percent of electricity to the national grid annually.

The Nhon Trach 2 thermal power plant began commercial operation in late 2011.

As a national key project in the provincial PetroVietnam Nhon Trach Power Centre, the power plant has a total capacity of 750 MW and is fueled by natural gas which has been registered under the United Nations’ Clean Development Mechanism as main fuel.

With three turbines, it is designed to churn out an average of 4.2 billion kWh each year.

It also plays an important role in supplying electricity to the southern key economic region.

FDI firms encouraged to invest in agriculture

Vietnam has called on foreign direct investment firms to further invest in agricultural product and food processing to balance trade and take full the country’s advantages, said a senior official from the Ministry of Industry and Trade.

At a meeting between the ministry and businesses in the Mekong Delta on November 5 in Can Tho city, Tran Thanh Hai, deputy head of the ministry’s Import-Export Department, said there is large number of investments by FDI enterprises in assembling and services, although farm produce and food are the strength of Vietnam and the Mekong Delta in particular.

He affirmed the Government and the ministry always support foreign investors to operate in Vietnam, adding that administrative procedures will be simplified to facilitate investment.

In the first nine months this year, exports of FDI enterprises reached 67.8 billion USD, accounting for 61.7 percent of the country’s total export value. Main export items were phones, cameras, computers, electronics and spare parts.

Meanwhile, exports of seafood by FDI firms were 472 million USD, accounting for more than 8 percent of the country’s total export value, according to statistics from the Vietnam Customs Office.

The Mekong Delta is Vietnam’s biggest producer of rice, fruit, and aquatic products. It produces more than 90 percent of Vietnamese rice exports, which hold a 20 percent share in the global market.

The region also supplies 70 percent and 60 percent of the country’s respective fruit and aquatic exports.

HCM City plans to relocate apparel factories to other localities

Ho Chi Minh City has just compiled a master plan for developing the city's textile-garment industry to 2020 with a vision to 2030, the Saigon Times Daily reported.

Under the master plan, the local government plans to relocate apparel factories to neighbouring localities while turning the city into a fashion design hub, added the Daily.

The city’s apparel output is estimated to increase by 53 million products by the end of next year, or equal to the combined average output of 17 garment factories.

After 2020, apparel factories will be located in industrial zones and other provinces with sufficient labour supply. Meanwhile, garment companies in the city should be solely responsible for design and export-import operations.

Cu Chi, Hoc Mon, Nha Be, Thu Duc districts in the future will only have small-scale apparel facilities with three to five production lines to provide products for the city’s tourists while textile-garment firms in the inner-city districts will focus on designing and introducing new products without expanding their current manufacturing facilities.

At the same time, Tan Binh, Dai Quang Minh, and Soai Kinh Lam textile markets among others will become wholesalers of textile-garment materials.

The total investment capital for developing the city’s textile-garment industry is estimated at 33 trillion VND by 2025 with investments in the inner city accounting for 8.75 trillion VND.

According to experts, the training of human resources is core to achieving the goal of turning the city into a fashion design hub. The city will also need at least 3,000 more engineers, technicians and designers by 2025.

2014 Northern Delta Agricultural Fair kicks off

As many 300 local businesses and two others from Taiwan and the Republic of Korea are displaying their products at the 2014 Northern Delta Agricultural Fair, which opened in Thai Binh province on November 5.

Co-organnised by the Trade Promotion Department under the Ministry of Industry and Trade and the provincial Department of Industry and Trade, the annual event aims to help enterprises to seek partners, promote trademarks and expand markets.

If also offers an opportunity to introduce the socio-economic development achievements of provinces and cities in the Northern Delta region in general, and Thai Binh province in particular.

On the sidelines of the fair, a number of trade promotion and agricultural consultation seminars will update visitors on advanced technologies and new products in the agricultural sector.

The event will run until November 11.

Can Tho City to solve difficulties for FDI enterprises

The Ministry of Industry and Trade and the People’s Committee in the Mekong Delta city of Can Tho held a talk with Foreign Direct Investment (FDI) enterprises to help them solve difficulties and boost exports, on November 5.

Mr. Do Minh Hien from the Switzerland invested Company Fruit Republic in Can Tho said that some regulations of Vietnam are different from the world’s causing difficulties for them.

For instance Mr. Hien said some substances are prohibited in fruits and vegetables in the Europe but permitted in Vietnam and vice versa.

The company has purchased products from local farmers for exports but they have been returned. It has also imported some fruit preservatives from Europe. However, these substances are not allowed in Vietnam, he added.

Besides, some other enterprises expressed concern over weak traffic and seaport infrastructure systems in the Delta, which has made transportation costly.

Half done projects slow down equitization at real estate companies

Saigon Real Estate Corporation (Resco) on November 5 said that the frozen real estate market has left several projects haft done, making it difficult to determine the value of Resco subsidiaries which are on equitization process.

The company was speaking a meeting with the Economics and Budget Commission of the Ho Chi Minh City People’s Council on its restructuring and equitization in the phase of 2013-1025.

Resco is expected to complete equitization of three member companies by the end of this year and two others by the end of next year.

However the process has been slowed down due to half done projects and difficulties in the real estate market. To deal with this, the company proposed to transfer these projects into the parent company to speed up value determination and equitization.

Agricultural production should base on market demand

Agricultural production should accord with market demand on quantity, quality and types to protect farmers from the repeated refrain of ‘bumper crop, low price', said experts at the Mekong Delta Economic Cooperation Forum opened in Soc Trang Province yesterday.

Farmers have freely grown any kind of plant they like and been vague about consumption sources. Purchase has almost been conducted by traders who usually manage to pay as low as possible, said Professor Vo Tong Xuan.

That is one of reasons for the ‘bumper crop, low price' condition which has kept repeating in the Mekong Detla, he said.

2014 is the third consecutive year that sugarcane prices reduce in the delta. The prices have dropped to only VND750 a kilogram for the last few days. This is because of high inventory level and smuggled sugar, forcing processing plants to lower sugarcane prices to prevent losses.

The problem in agriculture development is market, said Dr. Vo Hung Dung, Chairman of the Vietnam Chamber of Commerce and Industry in Can Tho City.

Market development involves meeting demand of the current market and increasing potential demand for farm production. An increase in demand will cause an increase in agricultural market developmernt, he said.

Agricultural restructuring must change from quantity into value, especially added value, said Minister of Agriculture and Rural Development Cao Duc Phat at the conference.

For a long time, agricultural production has aimed at exports and paid little heed in developing local market, where has been flooded with import products. This is partly due to policies inclining to encourage exports, he pointed out that how the problem is how to increase sustainable income for farmers, not the rank in volume of Vietnamese farm production in the world market.

Agricultural restructuring must begin from developing market, creating conditions for farmers and businesses to apply new varieties as well as technologies in production and improve their product value, said Minister Phat.

Mekong looks to develop fisheries sector

A roundtable on aquaculture held in Can Tho city yesterday, provided a chance to brainstorm ways to sustainably develop the Mekong Delta region's sector.

The Ministry of Agriculture and Rural Development (MARD), the Steering Committee for the Southwestern Region and the German Agency for International Co-operation (GIZ) jointly organised the event as part of the Mekong Delta Economic Cooperation Forum also held this week in Soc Trang Province.

MARD Deputy Minister, Tran Thanh Nam said the Mekong Delta region has huge aquaculture potential, but its growth faces a number of challenges. A low investment rate, lack of coordination between the involved parties, and an increase in the frequency of natural disasters threaten to handicap the sector's growth.

To address these difficulties, Nam said all relevant stakeholders need to actively participate in the implementation of comprehensive measures.

For example, Nguyen Van Trong, deputy head of the Research Institute for Aquaculture, suggested that authorities run public awareness campaigns on the impact of climate change in order to boost the sector's long-term resilience.

Hua Tran Hoang, an aquaculture farmer in An Bien District in Kien Giang Province, said the biggest challenges for local farmers are a lack of technical knowledge and a limited access to disease-resistant breeding stock.

He suggested farmers be trained in new farming techniques and increase their access to disease-resistant breeds to increase productivity.

German enterprises keen to invest in Binh Duong

German businesses wish to do business in the southern province of Binh Duong, said Marko Walde, head of the Germany Chamber for Commerce and Industry in Vietnam.

Walde highly valued the country’s investment climate and policies on investment attraction during a meeting with Tran Thanh Liem, Vice Chairman of the Binh Duong People’s Committee, on November 6.

He expressed his hope that the local authorities will further facilitate German businesses to operate in the province.

Liem briefed the guest on the province’s incentives and investment environment as well as the operations of businesses, including those from Germany.

He said he hopes that the German Chamber will continue to bring more investors to the locality in the time to come.

Binh Duong has so far this year attracted 1.47 billion USD in foreign directed investment (FDI), 47.7 percent higher than its yearly target.

The province is home to 2,344 foreign-invested projects with a total capital of 20,204 billion USD.

It is the fourth localities nationwide after Ho Chi Minh City, Ba Ria-Vung Tau and Hanoi drawing total foreign investment capital that has exceeded 20 billion USD.

Ceramic makers admit need for improvements

The productivity of Viet Nam's ceramic industry is low, with the output of construction tiles at a mere 70 per cent of capacity, according to an industry bigwig.

Pham Van Bach, vice chairman of the Vietnam Building Ceramic Association, said tile output last year was 310 million square metres against a capacity of 450 million square metres.

Production of sanitaryware items was even lower - at 10.8 million items, a mere 60 per cent of capacity - he told a seminar on ceramic manufacturing technology organised by the Italian Trade Commission in HCM City yesterday.

Export of ceramic products last year fetched US$300 million of which sanitaryware represented 20 per cent, while imports, including through informal border trade, totalled $70 million, he said.

Production of ceramic products including tiles and sanitaryware rose by 5 per cent year-on-year in the first half of this year, he said, without providing figures.

Not only productivity but also the quality of ceramic products is low, he admitted.

Italy's trade commissioner in Viet Nam, Bruna Santarelli, told Italian and Vietnamese business executives at the event: "We believe in the strong growth of trade and investment co-operation in the field of ceramics between the two countries."

She expected the seminar to provide an opportunity to develop co-operation in and exchange information about technologies related to processing of raw materials, decoration, and distribution of finished products.

The outstanding feature of Italian ceramic technology is its environmentally-friendly nature that helps save fuel and raw materials while reducing harmful emissions.

Fitch lifts Agribank, Vietinbank ratings on improved stability

Fitch Ratings has upgraded the Long-Term Issuer Default Ratings (IDRs) and Support Rating Floors (SRFs) of Viet Nam Bank for Agriculture and Rural Development (Agribank), and Viet Nam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) from ‘B' to ‘B+'.

This follows an improvement in Viet Nam's sovereign rating. The outlook of the banks has been revised to stable from positive, reflecting a similar revision of the sovereign's outlook, according to its statement on Wednesday.

The Long-Term IDRs of Agribank and Vietinbank are driven by State support. Their Support Ratings (SRs) and SRFs reflect Fitch's expectation of likely extraordinary state support, as both banks are majority-owned by the government and among the most systemically important banks with quasi-policy functions in the domestic economy.

Agribank and Vietinbank are the largest and second-largest banks by asset size in Viet Nam with dominant domestic franchises.

Also according to Fitch, the banks' ratings were knocked down one notch from the sovereign rating to take into consideration the Government's finances, which may limit the timeliness of its support for the banks.

The Stable Outlook of Agribank and Vietinbank reflect the Stable Outlook on Viet Nam's sovereign rating, according to the statement.

Taiwanese firms seek local partners

Taiwanese companies want to further grow their business and investment in Viet Nam, according the Taiwan Trade Centre (Taitra).

Speaking to Viet Nam News on the sidelines of a meeting between 48 Taiwanese companies and their Vietnamese counterparts in HCM City yesterday, John Tang, director of the Taitra office in HCM City, said Taiwanese companies have invested in garment and textile and footwear, and eye investment high-tech industries next.

This is a major reason for holding business meetings every year between Taiwanese and Vietnamese companies, with the hope being that co-operation opportunities would spring up as a result.

The visiting executives this time are mostly from the auto parts, health care, and electronics industries.

Another 39 Taiwanese companies are taking part in the International Plastic and Rubber Industry Exhibition being held in HCM City to showcase their latest products and explore collaboration and development opportunities in the Vietnamese market.

"Taiwan is an indispensable part of the global plastics and rubber industry and Viet Nam is among Taiwan's top 10 trading partners in the world for a wide variety of goods, Hsien Chao Tseng, director of the commercial division at the Taipei Economic and Cultural office in HCM City, said.

"Plastics represent one of the top Taiwanese exports to Viet Nam."

Speaking about the exhibition, Tang said "since Viet Nam aims to develop its own supporting industry and since the rubber and plastic industry is one of the cornerstones of a strong supporting industry, I believe that Taiwan's expertise and experience in production and use of rubber and plastic machinery will help Viet Nam develop its supporting industry."

To increase Viet Nam's exports to Taiwan, Taitra has suggested that Vietnamese companies should improve product quality while reducing prices.

Furthermore, Vietnamese companies should invest in cuisine and restaurants since Taiwanese like cultural diversity, it said.

VN timber exports climb 12.8 per cent

In October, Vietnamese timber exports earned US$528 million, bringing total timber exports in the first 10 months to $4.98 billion, a 12.8-per cent year-on-year increase.

A report from the Ministry of Agriculture and Rural Development said timber exports to three leading markets in the first 10 months of the year continued to increase.

Export turnover from the US market increased by 14.35 per cent and from the Japanese market, by 22.03 per cent. However, export turnover from the Chinese market fell by 10.19 per cent.

The three markets are the leading importers of Vietnamese timber this year, providing 66.35 per cent of the value of the country's total timber exports.

Chairman of the Binh Duong Wood Processing Association, Huynh Quang Thanh, said the rehabilitation of the world economy had opened new prospects for timber processing enterprises.

In recent years, enterprises had produced higher quality products that met the requirements of choosy markets of Europe, the United States and Japan.

The markets have showed interest in Vietnamese wood products because of the diverse designs they produced and sophisticated manufacturing.

Meanwhile, the nation's imports in October reached $177 million, bringing total imports in the first 10 months of the year to $1.9 billion, a 55.2-per cent year-on-year increase.

Timber imports from Laos accounted for 28.4 per cent of Viet Nam's market share. This was followed by Cambodia with 12.7 per cent, the US with 10.8 per cent and China with 9.9 per cent.

It is expected that Vietnamese wood exports will reach $6.3 billion to $6.5 billion by the end of this year.

Vietnamese Talent Awards finalists announced in IT sector

Organisers of the Nhan Tai Dat Viet (Vietnamese Talent Awards) announced a total of 22 Information and Technology (IT) products out of 240 products that were selected for the final round yesterday in Ha Noi.

Nguyen Long, General Secretary of the Viet Nam Informatics Association, said the quality of products was higher than in previous years, making the selection process difficult.

Contestants ranged from students to leading scientists, said Pham Duc Long, deputy director of VNPT Group. Submissions came from Vietnamese residing in France and Singapore as well as Viet Nam. The annual award, organised by VNPT Group, Vietnam Television (VTV) and the Dan Tri online newspaper, has significant influence on IT research and development.

Awards are based on both scientific and practical value. Winners take home VND100 million (US$4,760) while second place nets VND50 million ($2,380) and third place gets VND30 million ($1,430). The award ceremony, to be held in Ha Noi on November 20, will be broadcast live on VTV.

 

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR

MORE NEWS

French Development Agency pledges more support for projects in Vietnam

The French Development Agency (AFD) will increase its support and donations for projects funded by French non-governmental organisations and associations in Vietnam.

Vietnam seeks stronger education partnership with US

Minister of Education Nguyen Kim Son on September 25 concluded his US working trip that aimed to strengthen education partnership between the two countries.

VIETNAM NEWS HEADLINES SEPTEMBER 25

Central localities likely to be hit by typhoon Noru

AI integration the inevitable path ahead

Big Data and AI will be the optimal tools to run factories in the future and digital transition will help firms optimise costs and cut emissions.

Ministry to scrutinise VietGap certifications after fake labels found on vegetables

The Ministry of Agriculture and Rural Development is investigating reports of vegetables sold in supermarkets being marked with fake Vietnamese Good Agricultural Practices (VietGap) labels.

E-commerce sector in dire need of qualified candidates

The tight supply of qualified candidates in the labour market is a glaring issue facing e-commerce firms, according to insiders.

Unique green moss-covered homes of the Tay Con Linh mountain range

It is an ideal environment for plants to flourish and thrive, including thick green moss, which ethnic people use to cover the palm-leaf roofs of their homes.

Farmers save wild birds and the environment

Farmers in different provinces throughout Việt Nam have for years spent time and effort to save wild birds, giving them a home to nest and lay eggs.

Deputy PM highlights significance of int'l solidarity, cooperation at UN session

The strengthening of international solidarity and cooperation is key to addressing interlocking global challenges, affirmed Permanent Deputy PM Pham Binh Minh while addressing the general debate of the 77th Session of the UN General Assembly.

Huge potential for luxury real estate in Vietnam

The branded residence market is gaining a stronger foothold in the Vietnamese market with potential to further develop, shaping the lifestyle of the country’s elite, according to experts.

VIETNAM BUSINESS NEWS SEPTEMBER 25

Action plan to promote green growth in agriculture

Vietnam’s economic growth counts on high-tech FDI

Vietnam’s economic growth has been accelerating in 2022, with experts considering high-tech foreign investments as a driver.

The “seven-star” islands in Quang Ninh

Along with crystal blue sea and beaches, the 7 Sao (seven star) islands also have caves and primeval forests.

Customs you only see in Vietnam

The travel site Culture Trip has listed a number of Vietnamese customs that often surprise foreign tourists:

Investors and buyers play waiting game in credit switch

The State Bank of Vietnam finally created extra credit room for some banks on September 7. However, the extension is deemed low and may not help real estate businesses and homebuyers access feasible capital sources for their projects.
back_to_top