Rolled steel anti-dumping tariff could freeze imports

Vietnam has levied anti-dumping tariffs on imported cold-rolled stainless steel from mainland China, Malaysia, Indonesia and Taiwan, ranging from 6.45 per cent to 30.73 per cent in an effort to protect local producers.

The Ministry of Industry and Trade’s Vietnam Competition Authority (VCA) last week released the preliminary results of a six month-long inspection at the request of petitioners including South Korea’s Posco VST Co. Ltd and local Hoa Binh Joint Stock Company.

Following the inspection, the VCA will levy an anti-dumping duty for 120 days on steel imports from mainland China, Malaysia, Indonesia, and Taiwan. The highest tariff, 30.73 per cent, has been imposed on Taiwan’s Yuan Long Stainless Steel Corporation.

The final result of the dumping investigation is scheduled for July 2014, twelve months since the launch of an anti-dumping investigation on the imports of cold-rolled stainless steel.

The petitioners, which account for 80 per cent of domestic stainless steel production, claim that cold rolled stainless steel imports have been sold in Vietnam at 20 to 40 per cent below domestic makers’ prices, causing damage to the domestic stainless steel manufacturing sector. They also accused foreign firms of importing secondary and low-grade products at as low as half the price of premium-grade products.

The investigation was carried out by the VCA on batches of products imported between April 1, 2012 and March 31, 2013.

However, domestic steel makers were hoping for higher duties, demanding that tariff levels should range from 20 per cent to 39.9 per cent over five years.

A representative of VCA said antidumping tariffs were a measure to rectify the distortions created by under-priced imports and such rates would re-establish fair trade. The use of anti-dumping measures as an instrument of fair competition is permitted by the World Trade Organization.

Business urges the government to bulldoze red-tape

Foreign businesses have continued urging the government to hack away at red tape.

At last week’s Vietnam Business Forum in Hanoi, EuroCham’s chairman Preben Hjortlund told the government that concerns over lengthy and burdensome administrative requirements were raised across a number of sectors.

For example, banking and finance firms noted that in the State Bank’s Circular 40 on licenses and organisations, the operation of commercial banks and foreign bank branches required banks to apply for licenses to include every business activity that might not previously have been explicitly included in the licenses granted by the State Bank, but had been already permitted since they were included in the bank’s relevant regulations.

Meanwhile, enterprises operating in the car and transport and logistics sectors pointed to onerous customs procedures. Despite EuroCham’s Whitebook 2013 recommendation to reduce the number of documents, an additional requirement was introduced in mid-2013 forcing importers to supply a complete copy of their official contract for each ‘complete built unit’ car to be cleared through customs.

“Our members highlighted that simplifying customs procedures, including the introduction of a fully electronic customs clearance would reduce the pressure on government agencies,” Hjortlund said. “Speeding up these procedures would also make Vietnam a more competitive destination for trade and foreign direct investment.”

The Vietnam Chamber of Commerce and Industry conducted a customs survey of over 1,500 local and foreign enterprises this year. The results revealed that more than 70 per cent of respondents thought customs clearance had been too slow. Some 52 per cent of the surveyed businesses said it took far too long to have their goods examined at customs agency headquarters.

Japan Business Association in Vietnam chairman Motonobu Sato also said that Japanese enterprises were not satisfied with the investment climate in Vietnam due to the country’s investment-related obstructions including an inflexible tax system. Meanwhile, the Japanese External Trade Organisation’s newly-appointed chief representative in Vietnam Atsusuke Kawada said that difficulties in obtaining investment certificates were one of many obstacles facing Japanese enterprises wanting to do business in Vietnam.

For instance, it took over six months for Metran, Japan’s top maker of medical equipment and machinery to obtain an investment certificate for a project in the southern province of Binh Duong.

“It takes just six days to get such a certificate in Japan,” said this company’s president Tran Ngoc Phuc.

AmCham chairman Steven Winkelman also expressed frustration. He said, “Our members need to see more evidence of the government’s willingness to reform the inefficient state-owned system, considered by many analysts as a root cause of Vietnam's current economic challenges.”

Hjortlund also stressed that administrative burdens were often accompanied by harassments by state officers.

“Foreign investors are harassed daily. When asked what aspects of official scrutiny were the biggest concerns to our members, 85 per cent of respondents cited the new interpretations of tax laws and auditing. One recent example included a hotel manager that had 11 separate official audits in an 18 month period” he said. “The foreign business community believes they are being unfairly harassed by authorities for tax payments. Our members face far more audits than in the past and authorities are reinterpreting rules in their favour.”

In response to these concerns, Deputy Prime Minister Hoang Trung Hai admitted that the government was still slow in administrative reforms. “But we will continue to make efforts to improve things for businesses and the public. Those involved in harassment will be punished,” he committed.

Denmark rolling out red carpet to Vietnamese firms

The Danish Embassy has rolled out the red carpet for visas from Vietnam easing applications for local employees working with Danish organisations and firms.

Danish Ambassador to Vietnam John Nilesen told VIR that the embassy has since late October adopted the Danish government’s Red Carpet programme aimed to make it more convenient for foreigners that travel regularly to Denmark for business.

“This programme will benefit Vietnamese businesses who will be able to get their customers and partners to Denmark,” he said. “With this programme, Vietnamese companies will be given the possibility of a faster and more flexible visa treatment. Red Carpet will also help further strengthen the bilateral trade and investment cooperation between Vietnam and Denmark.”

Aimed to assist non Danish companies, organisations and non-governmental organisations that have business relations with a Danish company or organisation, the policy introduces simplified procedures for obtaining Danish Schengen visas for applicants that regularly travel to Denmark for business.

Applicants will be able to get their visas with a fast-track procedure without applying in person. Multiple-entry visas valid for a period of up to five years can be offered.

The Red Carpet has been rolled out to private and public companies or organisations abroad provided that they meet the requirements outlined on the Danish Embassy’s website.

Entities which can be offered accreditation include long-established local subsidiaries of Danish companies, local companies with a subsidiary in Denmark, companies that regularly sends employees to Denmark, and local companies with an exclusive partnership with a Danish company.

The entities also include local institutions like non-governmental organisations and travel agencies which cooperate closely with similar Danish institutions.

Each year sees about 2,000 visas granted by the embassy to Vietnamese nationals, two thirds of which are for businesspeople, according to the embassy’s statistics.

It is estimated that the time to obtain a Red Carpet-based visa is equal to 40 per cent of the time needed to obtain a normal visa.

Eurocopter adds Vietnam to Asia itinerary

Two of Eurocopter’s newest members of its twin-engine helicopter family – the next-generation EC175 and evolved EC145 T2 – are in Asia for a three-week demonstration tour this December that will include operators in oil and gas, VIP, corporate, charter, military and law enforcement.

For the December 2-19 tour, Malaysia and Thailand first on the schedule for both helicopters, the EC175 will be showcased in Vietnam.

The Franco-German-Spanish helicopter maker will hold the event on December 11 in coastal Vung Tau, the country’s oil and gas exploration hub.

A source close to the event who asked to not be named told VIR that the State-owned Southern Vietnam Helicopter Company was interested in the EC175, but would not say anything official until after the show.

Eurocopter is a leading service provider in Vietnam with a focus on the oil industry and tourism. It operates chopper bases in Ho Chi Minh City, Ca Mau province, and Con Dao Island just off the coast of Vung Tau.

The European Aviation Safety Agency has not yet issued a certificate for the EC175 but we expect to receive it in early 2014, the final step before its first three deliveries slated for around the same time. The EC145 T2 is also expected to receive its certificate and begin distribution early next year, reported Eurocopter.

During the Asia trip, the company will underscore its strategy of being in close proximity to its global network of customers. Its Malaysian showcase will also include a two-day symposium for the oil and gas sector in Kuala Lumpur.

The EC175 is configured for oil and gas airlifts and can seat 10. It is planned to set the bar for medium-sized twin-engine helicopters with a full range of applications, including oil and gas, search and rescue, emergency medical services, public services, VIP, and executive transport.

Eurocopter was established in 1992 and confirmed its position in 2011 as the world’s number one helicopter manufacturer with a turnover of 5.4 billion Euros, orders for 457 new helicopters and a 43 per cent market share in the civil and para-public sectors.

Foreign investor confidence returns

Registered FDI capital in Vietnam aggregated 20.8 billion USD in the first 11 months of 2013, a year-on-year increase of 54.2 percent, which has been seen by analysts as a positive signal showing the strong recovery of foreign investors’ confidence in both the short and long-term.

Deputy Minister of Planning and Investment Nguyen Van Trung made the remark at a recent conference themed “investment promotion in industrial parks” in Hanoi.

The figure exceeds the modest 2013 target of a 15 billion USD FDI inflow and has been the highest level recorded since 2010.

Eugenia Fabon Victorino, an ANZ Bank analyst for the Asia-Pacific region, said registered FDI capital is still a salient point of the economy.

He stressed that policy changes increasing foreign investors’ asset ownership have helped result in a sharp increase in investment.

Though some insignificant barriers of administrative formalities still remain, the domestic investment climate has been improved this year due to the stability of the Consumer Price Index ( CPI ) and monetary market as well as the Government’s efforts in creating investment incentives, numerous investors declared.

Around 43 percent of foreign firms in a survey on investors’ confidence conducted by Grant Thornton Vietnam reflected positively on the outlook of the Vietnamese market in the time to come.

The survey also says that only 13 percent of surveyed foreign investors held negative thoughts on the market and half of those will still expand their investment next year.

Binh Duong province is an outstanding locality of FDI attraction as 52 overseas investors pledged to implement their registered projects there and 18 foreign enterprises planned to expand current operation.

Chairman of the Association of Foreign Invested Enterprises Nguyen Mai said FDI inflow in Vietnam will continue to soar in the coming time and contribute greatly to national economic growth in 2014.

He added that the quality of FDI has improved thanks to the investment of Samsung, LG and Robert Bosch groups.

The most prominent project is a 3.2 billion USD high-technology complex invested by the Republic of Korea – based Samsung Group.-

Kien Giang to export farmed fish to China

The southern province of Kien Giang will carry out a project in the period 2014-2016 to export farmed fish to China.

Le Gia Fishery Co., Ltd, a partner of China’s Hong Vu Trading Company limited, is assigned to implement the project.

The Chinese partner will use two ships to purchase commercial fish in four island communes of Hon Nghe, Son Hai, Nam Du and An Son.

Le Gia Company will be responsible for implementing trade transactions and paying money for fishermen.

In recent years, the open sea fish farming industry in Kien Giang has developed strongly, especially in the two districts of Kien Hai and Phu Quoc and several other island communes, which have advantageous natural conditions. The output of raised-fish in 2013 is estimated to reach 1,500 tonnes.

From now until 2015, the province will build concentrated areas of fish cultivation for export, thus creating stable employment and improving income for local people.

In addition, the locality will improve open sea fish farming and breeding to build a trademark. Besides the Chinese market, it will also foster export to other markets such as North America, Europe, Russia, Australia and East Asia.-

E-commerce enjoys strong growth

Enterprises are making the shift to online marketing and advertising, according to chairman of the Vietnam Internet Association (VIA), Vu Hoang Lien.

Speaking at a recent conference on the occasion of this year's Internet Day in Hanoi , Lien said that online marketing is having an increasingly significant impact on internet users, adding that advertising on traditional media remains dominant at this time.

"Each Vietnamese customer spends around 120 USD per year on average for online shopping. Compared with other Asian countries, the number is still small but there is tremendous potential to develop e-commerce," he said.

"In Vietnam , 48 percent of e-commerce websites have payment tools but the weak payment tools limit transactions. Domestic e-commerce does not yet have a reputation to attract foreign users."

According to VIA, 36 percent of the population is using the internet. Users can access the internet in various ways, including through fixed broadband, Asymmetric Digital Subscriber Lines (ADSL), fibre optics and TV cables.

Currently, Vietnam ranks 15th among countries with high-speed internet, with the VIA forecasting that Vietnam would have 35 million users by 2017.

Also at the Dec. 4 conference in Hanoi, Le Thi Ngoc Mo, deputy director of the Ministry of Information and Communication's Telecommunications Department, said total revenues of internet service providers (ISP) in Vietnam reached 15 trillion VND (more than 714 million USD) last year, with 5 trillion VND (238 million USD) coming from 3G network services.

Despite dramatic growth occurring in the sector, the number of ISP licences declined by 30 with only 55 licences being granted.

Trinh Quang Chung, business solutions manager at Google Asia Pacific, said that eight out of ten users said they had searched product information on the web before deciding to buy them and 41 percent believed that the search results were useful.

He said that some small-sized and medium enterprises only built their own websites yet did not create their mobile versions. "It is regretful that they cannot approach customers on mobile phones and do not take care of a strategy of turning website visitors into loyal customers," he said.

Le Hong Minh, chief executive officer of VNG Corporation, said his company, which conducts operations across all internet service areas, has noticed businesses in a wide range of fields moving online.

"Between 2009 and 2013, the number of internet users increased by 1.7 times but broadband capacities have climbed 7.5 times compared with the previous period (2005-09). It shows that the growth of service revenue has been on the rise because users have utilised different devices to access the internet," he said.

Minh expects that the number of internet users will reach 60 million and total revenues of internet services and content will be 100 trillion VND (4.7 billion USD) by 2018.-

Dong Nai province welcomes Japanese investors

The southern province of Dong Nai is keen on attracting investment in infrastructure, particularly transport, and will create optimum conditions for construction investors, including those from Japan.

Vice Chairwoman of the provincial People’ Committee Phan Thi My Thanh made the remark at a meeting with a delegation of Japanese businesses led by Takahashi Harumitsu from the business and technology daily newspaper Nikkan Kogyo Shimbun on December 7.

She said that Dong Nai is one of the economic hubs of Vietnam and is in the process of strengthening its cooperation with other localities as well as domestic and foreign businesses.

Some projects funded by Japan’s official development assistance are being implemented in Dong Nai, and the Northeast Asian country is the third largest investor in the province at present, she added.

At the meeting, Deputy Director of the provincial Department of Planning and Investment Cao Tien Dung presented the province’s key projects, including a central road through its Bien Hoa city, worth over 460 billion VND (21.9 million USD), a 1.9 trillion VND (90.5 million USD) road running alongside the city’s Cai River , and a 5.4 trillion VND (257.1 million USD) road connecting 14 ports.

Harumitsu said that their visit to Dong Nai aimed to find opportunities to invest in the form of public–private partnership (PPP) model.

The Japanese guests said they hope to be updated on the locality’s economic situation, incentives and planned projects, adding they will introduce Dong Nai to their fellow investors in Japan .

Following the working session, the delegation paid fact-finding visits to Long Thanh international airport and the Japan-funded Long Duc industrial park in Long Thanh district.

Bank card information at risk

With security threats becoming more sophisticated, banks needed to ensure security of payment card data, delegates told a seminar in HCM City last week.

Bui Quang Tien, director of the State Bank of Viet Nam's Payment Department, said that commercial banks in the past few years had implemented several measures, including investments to modernise their information networks and enhance IT applications, to increase non-cash payments.

Tien spoke at a conference organised by the Viet Nam Banks Association and technology consulting firm Komtek.

With the development of bank cards and internet banking, non-cash payments have become increasingly popular in the country, he said.

"Besides the advantages of convenience and savings, payment-card services also have risks for both banks and customers," he said. "Security issues have become more and more vital."

Ha Huy Tuan, vice chairman of the National Financial Supervisory Committee, said the 2013 information security index of Viet Nam, the VNISA Index 2013, was 37.5 per cent. Last year's index was 26 per cent.

"Despite having a considerable increase, the figure is far below other countries in the region, including South Korea, at 62 per cent. High risks still exist," he said.

According to Tien, more crimes related to payment cards have increased in Viet Nam. Criminals were using more elaborate methods that are hard to detect.

"Criminals have also varried their methods to neutralise security methods used at banks," he said, adding that many card users were not aware of the importance of data security.

Hrishikesh Sivanandhan, head of Consulting Delivery at Paladion, said: "Although fraud varies by geography, there are a number of ways in which fraud is consistent across geographies," including a high level of innovation in online fraud.

Real-time fraud were on the rise as well as insider involvement and collusion, he said.

With mobile devices quickly emerging as the primary computing device, they would become a key attack vector for cyber-criminals, he added.

Delegates at the seminar urged the government to complete a legal framework, and issue regulations on ensuring security, prevention and control of violations related to payment cards, ATMs, POS (point of sale) and other payment methods using hi-technology.

Banks were encouraged to move from magnetic cards to chip technology for higher security, they said.

Delegates also called for closer co-operation between banks and agencies in preventing and detecting threats involved in payment cards.

They said that banks should also map out plans on crime prevention and control, including organising training courses for employees and co-operating closely with authorities to fight theft and fraud.

As of the end of October, the country had about 64 million payment cards issued by 52 card issuers.

There were 14,700 ATMs and 122,000 POS machines nationwide.

Da Nang grapples with FDI challenges

Poor supportive industries and materials, a poorly-trained labour force, high transport fees, limited land locations for industrial parks, complicated procedures for customs and taxes, as well as an ineffective East-West Economic Corridor, remained barriers in luring foreign investors to Da Nang.

This was admitted by chairman of the city's People's Committee, Van Huu Chien, during a meeting with foreign investors last Friday.

Chien said current shortcomings ranked the city at 17th out of 53 cities and provinces nationwide in attracting FDI projects.

"Having attracted 279 FDI projects with capital of US$3.31 billion, the city has yet to promote its capacity in appealing to more investors due to restrictions in procedural reforms and policy flexibility," Chien said.

"The city has seen a sharp increase in foreign investment over the past 11 months, with 36 new FDI projects totaling $291 million, as 15 projects raised their total investment capital, but they are still small-scale investments," he said.

He also said the city would create a strategy to renew foreign investment in the city by designating next year as the Year of Enterprises.

The General Director of Future Technology company, Robert Kramreiter, said that difficulties in import and trade procedures and insufficient legal frameworks were among Da Nang's major disadvantages in luring investments.

"The city should provide preferential duties for consultant or technological investors in the field of renewable energy, and develop exemptions on import taxes for green energy projects," Kramreiter said.

"The city administration should also propose market-based pricing mechanisms for electricity consumption, in order to encourage investors in power generation," he added.

Nguyen Thi Thanh Dung, assistant director of Indochina Capital, said untreated wastewater spoiled the beach environment near resorts and hotels on roads linking Da Nang and Hoi An.

"Seven of 15 discharging gates of wastewater into the sea have yet to be treated. It will soon pollute the environment around resorts and public beaches nearby. I require the city to speed up the wastewater treatment project for coastline roads along Truong Sa and Hoang Sa to create a clean and fresh environment for tourism projects," Dung said.

She also suggested that the city boost long-term tourism promotion and marketing strategies.

"The city only maintains a small budget of US$50,000 for tourism marketing and promotion. Meanwhile, Da Nang airport, which was newly upgraded, has been overloaded with four million passengers per year and 16 international flight routes," she said.

She added that the city should replace visa applications with visa on arrivals to attract tourists.

Alexander Willam Lowther, general manager of Viet Nam Brewery Limited, said stable economic growth, infrastructure upgrade and inflation control would play crucial steps in attracting investment.

He noted that the city should develop strategies to save energy and cope with climate change for long-term sustainable development.

In the latest report, FDI enterprises reached an export turnover of $654 million in the first nine months of the year, a third of the city's total exports, creating over 38,000 jobs with an average monthly income of VND3 million ($143) per capita.

The city hosted 2.7 million tourists this year.

Ha Noi ensures enough supplies for Tet festival

The capital city will see an adequate supply of goods for the 2014 Tet festival, according to the People's Committee of Ha Noi.

Officials said the city would also ensure that the supply of needed goods matches the local demand to stabilise prices of goods during the festival.

The committee asked businesses to sign contracts with partners in other provinces and cities to guarantee adequate supplies were maintained.

They were expected to sell 5,500 tonnes of rice, 900 tonnes of pork, 450 tonnes of chicken, six million eggs and 300 tonnes of frozen seafood during the months before, during and after Tet.

Pork would be transported from Ninh Binh, Nghe An and Bac Ninh provinces, chicken from Vinh Phuc and Bac Giang provinces, and vegetables from Vinh Phuc and Hai Duong provinces and Da Lat City.

Some 13 businesses were joining the city's price stabilisation programme and would sell goods at their 610 shops around the city, including 278 shops in suburban regions.

The city has required trading enterprises in the city to expand their distribution systems, while plans called for opening three new supermarkets in the city by the Tet festival.

The Ha Noi Industry and Trade Department said, in the months before, during and after Tet festival in 2014, consumption demand of the public in Ha Noi was expected to rise 15-18 per cent, compared to the rest of the year, as demand for rice, foods, confectionery and beverages surged.

The department expected prices of essential goods to increase in the months approaching the Tet festival.

Ho Thi Kim Thoa, Deputy Minister of Industry and Trade, said the department maintained enough supplies of essential goods, including rice, food, vegetables and fruits, to provide for the public on the occasion.

She added that these supplies can prevent speculation on essential goods and rising prices, since demand for those products would be high and speculators might hold onto essential goods and sell them at unreasonable prices.

Further, Ha Noi authorities should promote inspections and control of the market to ensure market prices remain stable, she said.

Thoa said that since early January to February of 2014, consumption was expected to be high for the Tet festival, so there would be a good opportunity for producers and traders to promote their production and trading of goods.

Nguyen Thi Nhu Mai, deputy director of the Ha Noi Industry and Trade Department, said so far this year the local economy had faced many challenges and the market displayed complicated fluctuations.

In the first 11 months of this year, total sales of goods and services in Ha Noi recorded a year-on-year increase of 13.5 per cent to VND1.49 trillion (US$70.9 million). —    

Retail sector eyes growth opportunities

Modern retail channels in Viet Nam are anticipating strong and diversified development next year, said Dinh Thi My Loan, chairwoman of the Viet Nam Retailers Association (VRA).

Statistics from the association indicated that modern retailing accounted for only 25 per cent of the country's total, thus offering great potential for retailers. The rates in the Philippines, Thailand, China, Malaysia and Singapore were 33 per cent, 34 per cent, 51 per cent, 60 per cent and 90 per cent, respectively.

Speaking at the forum on the retail industry in Viet Nam last Friday, Loan said the channels had become more important and customer preferred than others.

According to the Ministry of Industry and Trade's plans, the country would need 550 new supermarkets, bringing the total to 1,200-1,300 by 2020, while those in new trade centres would reach 180.

"Online retail channels were expected to boom in the upcoming years because of their huge potential," she added.

However, she noted that online purchases have faced barriers, as customers have preferred cash, rather than other payment methods, and they have not fully trusted the security of online payment methods.

Talking about traditional retail channels, she said retail would continue change, under the pressure of competition with modern sales methods.

"Purchasing at markets and traditional shops will still account for a high percentage by 2015, and even in the future, as retail channels have their own advantages and attractions, in comparison with others," she said.

Retail markets in rural areas would also expect to develop next year.

A survey from the association revealed that 95 per cent of households in rural areas are ready to purchase televisions, 92 per cent could buy electric and gas cookers, 33 per cent will buy radios, 30 per cent anticipate purchasing refrigerators.

The food and foodstuff retail sector was predicted to hold a key position, but there would be opportunities in the non-food and foodstuff retail sectors, she added.

VRA said the retail food and foodstuff sectors made up two-thirds of the total turnover, while that of the non-food and foodstuff retail sector saw a rapid growth rate of 16 per cent in the past few years.

The non-food industry focused on electronics, shoes, clothing, cosmetics and housewares.

Experts also forecast that goods of retailers' brands would see high and sustainable growth rates next year.

Sharing these ideas, Nguyen Thanh Hung, general secretary of the Viet Nam E-commerce Association (VECOM), said the retail industry in the country, which has a population of 90 million, has a huge potential, despite local consumers tightening their spending in recent years due to the economic downturn.

Of note, the population using the internet accounted for 36 per cent, while access for online shopping was 57 per cent.

"Turnover from online retail is expected to reach US$8 billion by 2017, despite the turnover last year being only $700 million," Hung said.

He noted that online shopping has become a vital trend, pointing to a survey that said users in Viet Nam spent the most time online, taking second place after Thailand among ASEAN countries.

In addition, he said local players have been doing well in Viet Nam, as the top 5 retailers were all domestic companies.

He added that barriers prevent online shopping from developing, including poor products and logistic systems, as well as the safety of information.

"Online retailers should have long-term strategies and research to individualise online marketing to overcome these barriers," he said.

Tran Nguyen Nam, head of the ministry's Domestic Market Department, said total retail sales and revenue this year was expected to reach VND2.6 trillion ($123.8 million), posting a 13 per cent increase from last year.

Nam said the Government would create a favourable business environment for organisations and individuals to develop modern retailing and implementing commitments under the World Trade Organisation.

Arn Vogels, Indochina's country manager and chief representative, said worldwide retail sales are expected to reach nearly $1 trillion this year. However, Viet Nam's e-commerce remains small, as the internet has been used primarily for work and leisure.

He said enabling debit cards for domestic and international e-commerce would be a key to Viet Nam's e-commerce growth.

It would also need to address concerns with the reputability of merchants and ease of online transactions, he said.

Meanwhile, retail sales were shifting to smart phones and merchants need to be prepared. Retailers must create shopping experiences optimised for these smaller screens.

Le Hong Minh, public relations director of Kangaroo group, added that retailers should develop communications at supermarkets, trade centres and shopping malls to promote retail distribution channels.

Minh said a survey from Nielsen Viet Nam showed that 23 per cent of customers asked for information from staff at supermarkets. In addition, advertisements at supermarkets caused sales to rise by 28 per cent. —    

Binh Duong’s retail market – a magnet for FDI

The retail market of Binh Duong province has become a magnet for foreign direct investment (FDI), as seen in the boom of supermarket and trade centres invested by overseas firms in the southern province.

In mid-November, Lotte Group, one of the leading retailers in the Republic of Korea, opened a shopping centre at The Seasons Urban Area, Lai Thieu ward, Thuan An town.

Built on a 21,300 sq.m land lot, the 30 million USD Lotte Mart Binh Duong also provides restaurant and entertainment services, an ice skating rink and a cinema besides shops and supermarkets.

Earlier, in late March, the Big C Di An supermarket and the Green Square Trade Centre became operational in Dong Hoa ward, Di An town after one year of construction.

In October last year, the Big C Binh Duong supermarket opened in Hiep Thanh ward, Thu Dau Mot city.

According to statistics from the provincial People’s Committee, 43 percent of newly-registered FDI in Binh Duong (about 500 million USD) this year is not poured into industrial zones but trade centres.

The Japanese retailer Aeon was licensed to build a trade centre near the Vietnam-Singapore Industrial Park I (VSIP I) in Thuan An town in March this year. The project has a total investment of up to 95 million USD and covers an area of six hectares.

The trade centre is expected to open in October next year, offering not only made-in-Vietnam products but also Japanese brands for the first time, said Oyama Nagahisa, Aeon Group’s Vice President and CEO of Southeast Asia business.

In addition, work on the 500 billion VND (23.8 million USD) Prince Town Trade Complex will begin soon, said the project’s investor, adding that this is a multi-function complex comprising restaurants, hotels, banks, supermarkets and recreational centres.

According to Le Viet Dung, Deputy Director of the provincial Department of Planning and Investment, with the appearance of a number of big faces, Binh Duong’s retail market has seen strong growth in recent times.

Experts said Binh Duong’s population of over 1.7 million, more than 17,000 domestic and foreign businesses operating in the province, and its annual revenues from retail sales and services totaling 90 trillion VND (4.3 billion USD) are factors prompting investors to come to the province.

Binh Duong is now home to eight supermarkets and seven trade centres. Under its supermarket and trade centre development plan, the province will have 17 supermarkets and 20 trade centres by 2015 and the respective figures for 2020 will be 24 and 37.

Since Vietnam joined the World Trade Organisation, the local retail sector has seen rapid development.

With 1,500 trillion VND (71.4 billion USD) in revenues from retail sales and services in the first seven months of 2013, a year-on-year increase of 12 percent, the Vietnamese retail market remains an attractive and potential destination for investors.

The country strives to have up to 1,300 supermarkets and 180 trade centres by 2020.-

Drinks market rivalries bubble away

Vietnam’s beverage market remains rich in promise, reflected by the increase in the number of recent investments from major domestic and foreign enterprises.

Tan Hiep Phat, one of Vietnam’s leading beverage groups, will start operations of its $85 million beverage manufacturing plant in the northern province of Ha Nam’s Kien Khe Industrial Park in the second quarter of next year, Mai Tien Dung, Chairman of the Ha Nam Provincial People’s Committee confirmed with VIR last week. In August last year, Tan Hiep Phat received an investment certificate to establish Ha Nam Number 1 Limited Company for the development of the new 600 million litre non-carbonated drinks plant on a 25 hectare site.

The latest figures from the London-based market research and business-intelligence report firm Euromonitor International showed that in 2010 Tan Hiep Phat held a 53 per cent market share in the bottled water and herbal tea drink market.

Vietnam’s beverage market has continued to attract fierce competition. According to Vietnam Competition Administration, Vietnam was home to 134 local and foreign beverage manufacturers last year, with the top ten in terms of revenue including IBC, Tan Hiep Phat, Coca-Cola, PepsiCo, Interfood, Red Bull, La Vie, Chuong Duong Beverages, CKL, and Vinh Hao.

According to Euromonitor’s report on Vietnam’s soft drinks market dated August 2013, multinational players PepsiCo Vietnam, Coca-Cola Beverages Vietnam and URC Vietnam, and domestic firms of Tan Hiep Phat and Vietnam Dairy Products JSC occupied the top five.

“These top five players occupied a major proportion of market share, leaving little space for other players and making it difficult for new companies to penetrate the market,” read the report.

Coca Cola and PepsiCo still hold the largest share of the Vietnamese beverage market, occupying about 60 per cent between them.

Coca Cola also plans to invest an additional $300 million into the Vietnamese soft drink market by 2015. The company entered Vietnam in 2009 with an initial investment of $200 million.

In addition, PepsiCo Vietnam earlier this year formed a joint venture with Japan’s Suntory Holding Ltd in which Suntory would buy a 51 per cent stake in PepsiCo’s Vietnamese beverage business. The deal is an important part of PepsiCo’s long-term strategy in Vietnam. So far, Pepsi has poured $118 million into two beverage plants in Dong Nai and Bac Ninh provinces.

The Philippines’ leading food and beverage manufacturer Universal Robina Corp (URC) has also targeted expansion plans, with the intention to build its third $35 million beverage manufacturing facility in the central province of Quang Ngai late this year. In Vietnam, URC is known for its popular C2 and Rong Do brands.

Since it is near to impossible to compete with foreign giants such as Coca Cola and PepsiCo in the carbonated drink market, domestic beverage companies have chosen to focus on non-carbonated alternatives.

Tan Hiep Phat also is investing in another beverage manufacturing plant worth $86 million in Quang Nam province’s North Chu Lai Industrial Park. The firm plans to build on its strong point of tea products with its extremely successful Dr. Thanh and Number 1 brands.

Euromonitor said that there were more than 10 tea brands in the market, with C2 and Dr. Thanh maintaining a leading position.

Masan Consumer recently acquired a 62 per cent of Vinh Hao Mineral Water Company group, marking its venture into the drink business field. Last month Vinh Hao announced a board resolution to expand into other business fields which implies Masan will broaden Vinh Hao’s product portfolios to other categories, including ready to drink tea, soft drinks, juices and energy drinks.

“Soft drinks will continue to see strong performance, although growth will not be as strong as during the reviewed period. Fruit juice and tea will be the main drivers of growth, due to rising health concerns,” stated Euromonitor’s report.

According to Euromonitor, Vietnam’s $2.5 billion bottled water and bottled beverage market is expected to grow at 20 per cent per year during 2011-2015.

STF hots-up interest in Dung Quat

Italy’s power equipment producer STF Group is considering plans to build a manufacturing plant in the Dung Quat Economic Zone to address Vietnam’s growing demand for thermal power equipment.

An official at the Dung Quat Economic Zone Management Authority, in the central province of Quang Ngai said an STF Group delegation had visited the zone late last month while searching for an investment location.

The official also told VIR that STF wanted to build a factory in Southeast Asia to supply equipment for thermal power plants in the region, adding that the company had also audited the quality of the local workforce and transportation infrastructure in the province.

“STF has not yet given a final decision, but its representatives highly valued the investment climate as a place where the firm could take its first steps into the Southeast Asian region,” he said.

Established in 1937, STF focuses on manufacturing engineering equipment, especially for the power sector. STF produces advanced heat recovery steam generators for combined cycle power plants, fossil fired utility boilers, air pre-heaters and biomass fired boilers.

The official said STF’s plan was an ideal example of the kind of investment the Dung Quat Economic Zone was looking to attract to boost industrial development in the province.

Located in the central region, the Dung Quat Economic Zone is emerging as one of the most attractive destinations for industrial investment in Vietnam. The zone has attracted more than 100 investment projects, with a total committed capital of around $8 billion.

If the STF plan goes ahead, it would become Vietnam’s second thermal power plant equipment manufacturing facility.

South Korea’s Doosan Heavy Industries already has a 110 hectare high-tech industrial complex in the Dung Quat Economic Zone, employing over 2,200 local workers.

This manufacturer produces boilers for thermal power plants, heat recovery steam generators, desalination equipment, material handling systems and chemical processing equipment.

Doosan won the contract for the Mong Duong 2 thermal power plant in the northern province of Quang Ninh, developed by a joint venture between the US’ AES Corporation, Posco Power and China Investment Corporation.

International investors are eyeing Vietnam’s thermal power sector as the country struggles to meet the growing energy demand. The Vietnamese government also recently mapped out a plan to encourage domestic and foreign firms to produce equipment for the sector in the country in order to reduce its reliance on imports.

Phu Yen plants the seeds for hi-tech agri-park

Deputy Prime Minister Vu Duc Dam has approved a hi-tech agricultural park in the central coastal province of Phu Yen.

The decision puts control of the 460 hectare park, in its first phase, in the hands of the provincial people’s committee. It is the second hi-tech agricultural park approved by the Vietnamese government after the first in the Mekong Delta province of Hau Giang.

The park will utilise hi-tech innovations in equipment and technology to develop agriculture for the central southern coastal region, particularly in key areas such as cultivation, animal breeding, forestry, aquaculture, preservation and processing of farm produce, organic produce and animal feed.

The park will conduct research, experiments and field tests of hi-tech agricultural production models that serve the development of agricultural production in the region. It will also aim to produce new hi-tech products, as well as train human resources in hi-tech farming production.

The park targets both foreign and domestic investments and will seek a workforce that can implement the technologies both in the park and throughout the region.

Nguyen Chi Hien, director of the Phu Yen Provincial Department of Planning and Investment said “We are calling on foreign and domestic investors to help us first with the infrastructure of the park and on businesses interested in researching and applying high technologies there. The park is expected to boost agricultural development throughout the region,” he added.

The park is required to set aside 60 per cent of its total area for facilities that will test, apply, and use hi-tech agricultural project models, produce hi-tech agricultural products, provide hi-tech services, and train hi-tech human resources.

The park is required to prioritise land for businesses investing in centres and factories developing or producing high technologies that serve agriculture or apply technology in producing agriculture.

According to Nguyen Tan Hinh, deputy director of the Science, Technology, and Environment Department under the Ministry of Agriculture and Rural Development (MARD), the ministry is planning to establish 12-15 hi-tech agriculture parks across the country by 2020. From now to 2015, the plan is to build three to five nationwide.

“Hi-tech parks make and transfer technologies, creating a driving force to push agriculture businesses toward hi-tech production,” said Hinh.

In June last year, the Vietnamese government approved the Hau Giang hi-tech agriculture park, the first of its kind in Vietnam.

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