Weakened market hurts securities firms' Q1 profits

Securities firms have announced profits for the first quarter compared to last year were less than expected due to a weakened market, stockbiz.vn reported on Wednesday.

The total revenue of the 20 largest securities firms on the market at the end of the quarter rose by 18 per cent to VND1.54 trillion (US$71.4 million), but the total net profit was halved to VND442.7 billion ($20.5 million).

In the total revenue structure, the revenue from brokerage and for-profit trading activity (securities firms make profit from trading shares on the market) fell by 17.5 and 51.6 per cent, respectively, while other revenue rose by 15.2 per cent to VND691.6 billion ($32 million).

The decreasing revenue from brokerage and for-profit trading activity was caused by a downward trend in Viet Nam's stock market. Liquidity was halved to an average of VND2 trillion ($92.6 million) each session during the first quarter.

During the quarter, Saigon Securities Incorporation (SSI) had the highest pre-tax and after-tax profits of VND230 billion ($10.6 million) and VND185.5 billion ($8.6 million).

Its profit was even higher than the total profit of HCM City Securities Company (HSC), ACB Securities Company (ACBS) and Vietnam Direct Securities Company (VNDS).

During the first quarter, SSI took the lead on all three stock markets including HCM Stock Exchange (HoSE), Ha Noi Stock Exchange (HNX) and Unlisted Public Company Market (UPCOM) with market share of 12.24 per cent, 8.58 per cent and 16.88 per cent, respectively. Noticeably, SSI's market share on UPCOM doubled the second one.

Among 20 securities firms, only five had positive profit growth rates, including KIS Vietnam Securities Company (KIS), VP Bank Securities Company (VPBS), May Bank Kim Eng (MBKE), PetroVietnam Securities Incorporation (PSI) and Bao Viet Securities Company (BVS).

KIS recorded an after-tax profit of VND10 billion ($463,000) after the last quarter, 27 times the result for the same period last year. Its revenue rose by 76 per cent to VND23.8 billion ($1.1 million).

In the company's revenue structure, other income tripled to more than VND16.5 billion ($764,000), which resulted from increases in capital, bank interest and customers.

Fifteen of the securities firms had negative profit growth rates, particularly Kim Long Securities Company (KLS), which lost VND39 billion ($1.8 million) after the first quarter compared to a profit of VND91.6 billion ($4.2 million) last year.

KLS said that during the last quarter, the company had to add VND50.8 billion ($2.3 million) to the provision for share value decreases, while during last year's first quarter, the company received more than VND21.8 billion ($1 million) from this provision.

HCM City to host first food industry fair

The first Viet Nam International Food Industry Exhibition (Vietnam Food Expo 2015) will be held in HCM City from May 13 to 16, aiming to boost consumption of Vietnamese food in both domestic and export markets.

It also aims to help domestic firms involved in production, processing and trading of farm produce, food and beverages to source right production technologies in order to raise their productivity and quality, said Ta Hoang Linh, deputy general director of the Viet Nam Trade Promotion Agency (Vietrade) under the Ministry of Industry and Trade.

As a national trade promotion programme, Vietnam Food Expo 2015 is the largest of its kind in the country and will feature more than 500 booths of over 300 exhibitors from Viet Nam's 36 cities and provinces and 19 other countries and territories, including India, Belgium, Cuba, Taiwan, South Korea, Singapore and Thailand.

A wide range of farm produce, seafood products, processed food products, beverages, food processing technologies and machineries, food preservation and packaging technologies, and others will be displayed at the expo.

Held at the Saigon Exhibition and Convention Centre, the event also includes the Viet Nam international conference on the food industry, where participants will discuss solutions to raise the value of Vietnamese food products, improve competitiveness, and enhance the ability of Vietnamese enterprises to join the global value chain.

Many other activities such as the Saigon International Cooking Contest, business meetings, culinary demonstrations, and factory tours will be organised during the show.

Organised by Vietrade and Adpex JS Company, the expo is expected to welcome 30,000 visitors, he said.

Ministry suggests increasing export tariff on in-demand tapioca chips

The Ministry of Finance has proposed to increase export tariffs on tapioca chips and ethanol, considering their high demand in the domestic market.

According to a draft proposal for adjusting tariffs on E5 petrol (ethanol petrol) and materials used for making ethanol petrol, export tariffs should be increased from zero to 5 per cent on tapioca chips used to produce ethanol and 3 per cent on ethanol made domestically.

The ministry said the increase of the export tariffs on tapioca chips and ethanol will ensure enough supply for producing bio petrol.

Meanwhile, the state will encourage the people to use bio petrol, according to a report in the Thoi bao Kinh te Viet Nam (Vietnam Economic Times) newspaper.

Although tapioca chips is a main ingredient for producing ethanol and one of the important materials for processing bio petrol, its exports have increased sharply.

Tapioca exports rose 24 per cent year-on-year in volume to 1.37 million tonnes in the first quarter of this year and 7.91 per cent year-on-year to 3.3 million tonnes in 2014, according to the Ministry of Agriculture and Rural Development.

The increase in the exports of tapioca, the main raw material for bio petrol production, has affected the industries that are manufacturing bio petrol for selling it nationwide from December 2015.

Viet Nam has many high-capacity ethanol factories, including Dong Xanh factory in Quang Nam Province (with an annual capacity of 120 million litres of ethanol), Tung Lam Factory in Dong Nai Province (72 million litres), Binh Phuoc Factory (100 million litres), Dac To Factory (72 million litres), Dac Nong Factory (45 million litres), and Phu Tho Factory (100 million litres).

If those factories run their full capacity, they will be able to produce about 500 million litres of ethanol and process 10 billion litres of E5 petrol and 5 billion litres of E10 petrol.

However, since they lack materials for producing ethanol, they must produce moderate quantities.

The ethanol manufacturing industry, which is already troubled by the high prices of raw materials, has to compete with traders buying tapioca for exporting them to China.

MoF imposes new gold tax

Most domestic jewellery producers have ignored an increased export tax imposed on gold jewelry, as the new duty does not affect their businesses.

Under Decision 36/2015/TT-BTC, the Finance Ministry (MoF) yesterday imposed a new export tax on gold jewellery, in which an export duty on gold jewellery that is more than 95 per cent pure increased from zero to two per cent. The decision, however, maintains zero per cent duty on gold jewellery that is 95 per cent pure or less.

Previously, the Viet Nam Gold Trade Association asked the MoF not to increase the duty, as it was concerned that a new duty would affect local gold businesses. The association said that foreign competitors of Vietnamese jewellery producers, such as China, Thailand, Indonesia and India, not only had better technology, but also were allowed to import gold with no export duty being imposed on gold jewelry.

Representatives from Phu Nhuan Jewelry Co (PNJ) said that PNJ only exported jewellery that is less than 18-karat gold, or 75 per cent pure gold, so the new export tax would have no affect on the company.

In fact, Viet Nam's jewellery exports have steadily decreased in recent years, from nearly US$3 billion in 2011 to only $670 million in 2014.

The country currently has three jewelry exporters of PNJ, SJC and DOJI, however, exports account for a modest part of the firms' total turnover.

The exporters noted that it would be increasingly difficult to compete against other global rivals, as they have to pay a higher price for raw materials for their production since they cannot import gold by themselves to lower input costs. Since May 2012, SBV has been the only gold importer in Viet Nam to improve their management of the local gold market. However, experts said that another reason for Vietnamese jewellery becoming less competitive was due to claims by some jewellery producers who mislead customers about the purity of gold content.

To better manage jewellery trading, the Government instituted stronger measures last year to control the trading. Further, large jewellery producers with trademarks hope this would help them develop targets for export, especially if the central bank allowed them to import gold for use in producing jewellery.

Experts criticize Vietnam’s latest petrol price hike

The Ministry of Finance has said Vietnamese consumers should feel relieved as the petrol price increases on Tuesday were much lower than they could have been, a view strongly blasted by local economic experts.

Retail prices of A92 and A95 petrol in Vietnam gained VND1,950 a liter, or a 12 percent increase, starting late Tuesday, and an official from the Ministry of Finance said a day later that the hikes “should have been much higher.”

Vietnam reviews fuel prices every 15 days, with the imported A92 petrol price from April 20 to May 4 averaging US$77.67 a barrel, up nearly $10 a barrel, or 14 percent, according to the official, who wished not to be named.

The Southeast Asian country imports around 70 percent of its fuel demand, mostly from Singapore. The Dung Quat Oil Refinery, located in the central province of Quang Ngai, covers the remaining 30 percent.

The Ministry of Industry and Trade and its finance counterpart are assigned to manage domestic fuel prices.

The two ministries have said the Tuesday price increases “had been carefully calculated” so that they would not greatly affect local businesses and consumers.

“The price increase slapped on A92 gasoline should have been VND3,387 a liter if we really let [fuel prices] be driven by market forces,” Vo Van Quyen, head of the industry ministry’s domestic market department, told Tuoi Tre (Youth) newspaper on Wednesday.

The ministries thus decided to earmark money from the fuel price stabilization fund to reduce the scale of the increases, Quyen asserted.

But Ngo Tri Long, former head of the Institute for Price and Market Research under the finance ministry, said that the move only reveals the ministries’ inflexible and poor price management.

The economic expert particularly criticized the higher environmental tax imposed on fuel since the beginning of this year.

The Ministry of Finance has repeatedly asserted that the new tax rate would not make fuel prices more expensive as it has also lowered the fuel import duty to 20 percent from 35 percent.

“Even so, the 15 percentage-point decline of the import duty is still lower than the 200 percent increase of the environmental tax,” Long told Phap Luat TPHCM (Ho Chi Minh City Law) newspaper.

Every liter of fuel sold in Vietnam now ‘shoulders’ a VND3,000 tax, threefold the old rate.

Long said increasing Vietnam’s fuel prices is an inevitable move as prices in the world market are also making rapid recovery, but what matters is the “limited prediction ability” of the finance ministry.

“In June 2014, when global oil prices were shrinking, the finance ministry forecast that they would recover slowly so it proposed hiking the environmental tax and hoped that would not increase fuel prices,” Long said.

Reality shows that such a prediction was wrong.

Another economic expert, Dr. Le Dang Doanh, also told Phap Luat TPHCM that the finance ministry should have managed fuel prices in a more flexible way to avoid “leaving consumers in shock” whenever they announce a price hike.

Doanh said the increase in environmental tax should have only been 100 percent, and the import duty should have been slashed further to ease pressure on consumers when global fuel prices fluctuate.

As for the latest petrol price hike, the second this year, Doanh said what the finance ministry should do is make it clear how much the global fuel price and the environmental tax account for the increases.

The finance ministry always denies the link between the higher tax and more expensive fuel price, “but things are still vague,” Doanh said.

The economic expert added that the finance ministry also lacked a compelling reason for increasing the environmental tax by as much as 200 percent.

“It’s logical to hike the tax for the sake of environmental protection, but the ministry has said it is to make up for the loss from the lowered import duty,” he told Phap Luat TPHCM.

“The ministry was under pressure to increase state budget collection when it set the new environmental tax, which is unreasonable.”

The new environmental tax rate will add some VND10.83 trillion ($504.71 million) to the state budget.

A92 and A95 gasoline now sell at VND19,230 and VND19,830 a liter in Vietnam, respectively.

Petrol prices in the country constantly fell from July last year from the record high VND25,640 a liter to the bottom of VND15,670 a liter in January.

Bac Lieu seeks financial backing for 15 projects

The Cuu Long (Mekong) Delta province of Bac Lieu is calling for investment in 15 projects this year, vietnamplus.vn reports.

Construction of a local dyke on the western part of the Ganh Hao sea gate in Bac Lieu Province. VNA/VNS Photo Kim Ha

Three of the projects involve developing residential and urban areas, two are related to culture and tourism development, six involve infrastructure, two are in the health sector - and two will boost agricultural services.

Among the more notable projects are Ganh Hao sea port, which needs an estimated investment of VND600 billion (US$27.7 million); the development of Lang Tram Industrial Zone, which requires VND670 billion ($30.9 million); and another hi-tech agricultural production park, expected to cost more than VND1.3 trillion ($62.9 million).

Ngo Quach Lam, director of Bac Lieu Investment, Trade and Tourism Promotion Centre, said the province had worked hard to create the most favourable investment climate for domestic and foreign investors.

He said top priority had been given to speeding up administrative procedures, especially in investment management and taxation - and accelerating the transparency of related information.

Despite efforts by local authorities, the inflow of investment into Bac Lieu, especially from foreign investors, remained limited, according to the provincial Department of Planning and Investment.

The Foreign Investment Agency's report revealed that the province attracted only one foreign-invested project capitalised at $5 million in 2014.

This brought the total number of foreign-invested projects in the locality last year to 19, worth a total of $94.55 million.

VKPC to invest US$126 million more in paper mill

Vina Kraft Paper Co. Ltd. (VKPC), a joint venture between Thailand’s Siam Kraft Industry Co. Ltd. under SCG Group and Japan’s Rengo Co. Ltd., will spend an additional US$126 million expanding its packaging paper factory in Binh Duong Province.

According to SCG’s report on quarter-one business results, VKPC will invest around VND2.75 trillion, or US$126 million, to double the existing packaging paper capacity of 243,500 tons per year.

VKPC commissioned its factory with an initial investment of VND3.35 trillion (US$171 million) in 2010 and the facility is now the biggest packaging paper factory in Vietnam.

With the additional investment, SCG’s total packaging paper capacity in Southeast Asia will amount to 2.6 million tons per year. The new production line is set for operation in the second quarter of 2017.

SCG said the capacity expansion aims to tap into the growing demand of packaging paper in Vietnam.

“Our investment expansion plan is still on track and we continue to export our products to regional markets as we anticipate growth in the ASEAN region,” Kan Trakulhoon, president and CEO of SCG, said in a statement.

“We are confident that the region’s overall economy will continue to grow…  SCG will expand investments in the region.”

He said SCG in Vietnam is focusing more on the local market and building a strong SCG brand.

According to the report, SCG in Vietnam had total assets of VND14.6 trillion (US$673 million) in the first quarter, up 25% against last year’s same period. Its sales in the quarter picked up 5% to VND2.856 trillion thanks to its ceramic business.

SCG is one of the leading business groups in Thailand and active in the core sectors of chemicals, paper and cement-building materials. The group began business in Vietnam in 1992 and currently has 21 subsidiaries with more than 6,500 local employees.

UBS: Vietnam an exciting market in Asia

Vietnam is potentially one of the most exciting markets in Asia, UBS Bank in a recent report said and suggested the nation address issues such as share supply and foreign ownership limit to attract more foreign investors.

In the report, UBS’s global research team gave a number of advantages for Vietnam’s market. It said the country has a large, young population and almost 50% of Vietnamese are under 30 and its gross domestic product (GDP) per capita is comparable to India and the Philippines, with similar potential for rapid growth.

Competitive wages are attracting significant new foreign direct investment (FDI), notably in electronics. Internet penetration of 40% should support growth in ‘disruptive’ companies, which can boost productivity.

Macroeconomic stability was restored in 2012 and interest rates have fallen proportionately. While restructuring of the banking sector and State-owned enterprises remains a work in progress, banks are lending again and GDP growth in the first quarter of 2015 was above expectations, at 6%.

Looking ahead, UBS said Vietnam is potentially the largest beneficiary of the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP), which are being negotiated. Furthermore, important new legislation taking effect in 2015 regarding foreign ownership of property, bankruptcy and enterprises should help restructuring and support growth.

However, it said risks of Vietnamese equities include rising public debt, a repeat of high inflation and a political transition in the next 12 months.

“The biggest deterrent for foreign investors is not value, but supply, in our view. There are almost 700 listed companies in Vietnam, but 90% have a market capitalization below US$100 million. Of the remaining 10%, we estimate the total available room to be only US$3.2 billion, concentrated in a small number of financials,” the report said.

Beyond the foreign ownership limit, a number of companies have small free floats. In the case of PetroVietnam Gas Corp., the largest publicly-traded company in Vietnam by capitalization, the free float is only 3%. Some banks have also floated a small part of its shares on the market.

In addition, the foreign ownership limit on Vietnamese companies is 49%, and for many popular companies the limit is already full. The absence of a foreign board where companies can trade at a premium the local shares makes finding stocks difficult.

“A proposal by the stock exchanges to raise the foreign ownership limit to 60% was blocked in early 2014. However, a number of investors and securities companies we spoke with believe it is possible Vietnam could adopt a structure similar to Thailand’s Non-Voting Depository Receipts,” UBS said.

“If it were to do so, it could unlock potentially significant additional foreign demand, and lead to a re-rating of Vietnamese equities. However, there is no indication of when, or if, Vietnam will adopt such a structure,” the bank added.

Secondly, Vietnam is currently classified as a ‘frontier’ market, not an ‘emerging’ market. So, it has yet to draw attention from investors like Korea, Japan and Thailand.

As a percentage of GDP, the total market cap of Vietnamese equities is currently 30%. By comparison, Thailand and the Philippines are trading at 116% and 95% of their GDP respectively.

In February, Vu Bang, chairman of the State Securities Commission (SSC), said that SSC was revising Decree 58 guiding the implementation of the Securities Law. Foreign holding increase is the most important issue of the decree.

SSC expected to issue the decree in the second quarter of this year to better foreign capital attraction, Bang said.

Bitexco commissions hydropower plant

Nam Muc Hydropower Company, an arm of Bitexco Group, on May 6 commissioned the first generator of Nam Muc hydropower plant in Dien Bien Province and will connect this facility to the national grid this month.

According to Bitexco, the 44-MW Nam Muc station has two generators able to produce nearly 180 million kWh annually. The VND1.5 trillion facility is the biggest in the northern mountainous province of Dien Bien.

The company will test-run the second generator next month.

A representative of Bitexco told the Daily that the group has invested in 11 hydropower projects having a combined capacity of nearly 700 MW. These projects are mainly in the northern and central regions.

Bitexco plans more hydropower projects in the coming time.

According to Vietnam Electricity Group (EVN), many power projects were hooked up to the national grid in January-March, such as the first generators of Mong Duong 1 and Duyen Hai 1 thermal power plants.

The power load in quarter two will pick up 9.2-10.5% against last year’s same period and can increase to 460-465 million kWh per day this month and next, said EVN.

Local firms invited to attend regional business summit

Organizers of the third annual Medi-Ventures Aesthetic Business Summit Asia 2015 are calling for companies in Vietnam to join the event in Singapore tomorrow to explore opportunities and trends in the sector.

They described the summit as a platform for regional medical aesthetic companies to discuss new cross-border startups and funding transactions between investors and operators, allow fostering of business development and licensing opportunities and put together movers and shakers in rapid fire case studies on emerging markets in Asia and intense networking.

The summit is a chance for professors and developers to exchange information about healthcare services in the Asian region, and understand opportunities and obstacles when penetrating Asian markets such as Vietnam, Singapore, Hong Kong and Thailand.

Dr Tran Quoc Bao, group business and marketing director of TMMC Healthcare, will be one of the keynote speakers of the summit.

According to the organizers, as Asia is flourishing as a rising market for the medical aesthetic industry, there are many great partnering and joint venture opportunities for companies in the sector.

Vietnam’s healthcare sector has emerged as a thriving market for investors. The organizers cited a study of the World Bank as saying that health expenditure per capita in Vietnam rose sharply from US$88 in 2010 to US$111 last year.

First Somerset serviced residence opened in Haiphong

CapitaLand’s wholly-owned serviced residence business unit, The Ascott Limited (Ascott), on May 6 inaugurated its first Somerset serviced residence building in Haiphong City.

The 132-unit Somerset Central TD Haiphong City is the first international branded serviced residence in the northern city and reinforces Ascott’s presence as the largest international serviced residence owner-operator in Vietnam.

Mark Chan, Ascott’s country general manager for Vietnam, said the addition of Somerset Central TD Haiphong City will allow the company to better cater to the needs of guests in the third largest city of Vietnam.

Chan said Vietnam’s economy has been improving since the end of last year and believed its new bilateral and multilateral free trade agreements including the Trans-Pacific Partnership (TPP) would spur growth and attract more foreign investors.

“Our target is to provide 4,000 apartment units in Vietnam in the next five years,” Chan said.

Ascott currently has over 2,000 apartment units at 13 properties in Vietnamese cities.

Besides Somerset Central TD Haiphong City, Ascott operates Somerset Grand Hanoi, Somerset Hoa Binh and Somerset West Lake in Hanoi, and five other properties Somerset Chancellor Court, Somerset HCMC, Somerset Vista, Vista Residences and Diamond Island Luxury Residences.

The company will open more properties in the country, including Somerset West Central Hanoi, Somerset Danang Bay and Ascott Waterfront Saigon in 2016.

More shrimp shipments blocked in major foreign markets

The number of Vietnam’s shrimp shipments denied by the U.S., the EU and Japan due to higher-than-permitted residues of banned substances in January-April was almost equivalent to 40% of last year’s figure, according to the National Agro-Forestry-Fisheries Quality Assurance Department (Nafiqad).

Nguyen Khanh Vinh from Nafiqad told a seminar on the impact of free trade agreements (FTA) on shrimp exports and imports in Can Tho City yesterday that the three major shrimp importers of Vietnam returned 36 shrimp shipments in the first four months. There were 92 shipments returned last year.

In particular, four batches were returned from the EU market while the shipments denied by Japan and the U.S. were seven and 25 respectively.

Explaining the high number of returned shipments, Vinh said controls on veterinary medicine and substances used to improve the farming environment have not been conducted strictly.

A number of shirmp growers have not complied with the basic principles on using veterinary drugs. Therefore, their shrimp still contains higher-than-permitted residues of medicine, according to Vinh.

Meanwhile, corporate representatives said at the seminar that local management agencies’ updates of new requirements applied by import countries are late. This makes life tough for local exporters and might negatively affect Vietnam’s overall exports.

Vinh said competent agencies normally get updated information about new import requirements after a week after they come into force.

The U.S., the EU and Japan were the three biggest shrimp importers of Vietnam in the first three months of this year and made up a combined 57.3% of Vietnam’s shrimp exports.

Vietnam exported over US$116.3 million worth of shrimp products to the U.S. in the first quarter, down 55.8% year-on-year. Shrimp shipments to the EU dropped 3.1% to over US$108.5 million and to Japan 27.6% to US$103.7 million.

HCM City helps Soc Trang farmers sell onions

The HCMC Department of Industry and Trade will arrange a meeting between local supermarkets and wholesale markets, and farmers of Soc Trang Province next week to seek ways to boost consumption of the farm produce.

The department unveiled the meeting plan after Soc Trang Province asked the Ministry of Industry and Trade to help reduce its rising onion stockpiles. The unsold volume of onions in the Mekong Delta province has amounted to 45,000 tons, according to the provincial Department of Industry and Trade.

Therefore, to promote consumption of Soc Trang onions, the HCMC Department of Industry and Trade will organize the gathering for enterprises and onion growers in Soc Trang to introduce their products to distributors and retailers in HCMC like Big C, Lotte Mart, Saigon Co.op, Vinatex and wholesale markets such as Hoc Mon, Thu Duc and Binh Dien.

Le Ngoc Dao, deputy director of the HCMC Department of Industry and Trade, told a meeting with HCMC-based distributors and wholesalers on Tuesday that the meeting aims to assist onion growers in the province.

Both sides will negotiate the price and product quality. Distribution systems and wholesale markets need to register with the HCMC Department of Industry and Trade the volumes of onions they will purchase from farmers.

Nguyen Thanh Ha, deputy director of Thu Duc Farm Products Wholesale Market, said the huge stockpiles of onions in Soc Trang Province have resulted from slow export. She added that the market consumes 50-70 tons of the province’s onions a night with prices ranging from VND10,000 to VND17,000 a kilogram.

A representative of Big C said this supermarket chain signed a deal with Vinh Chau Onion Cooperative on April 26 to buy 30 tons of red onions a week and will buy ten tons every week from Van Thanh Private Enterprise.

On April 22, the Co.opmart supermarket chain struck a deal to buy over 100 tons of Vinh Chau onions to help farmers weather tough times.

According to Soc Trang Province’s Department of Industry and Trade, onion is sold at VND3,500-13,000 per kilogram in the province.

The HCMC Department of Industry and Trade hoped producers and distributors will discuss measures for stable consumption of not only onions but also other farm products.

However, Dao suggested the Ministry of Industry and Trade and localities cooperate in finding long-term solutions to farm produce consumption.

More complaints about consumer goods heard

Consumers complained more about daily consumer goods and sought advice on these products in the first quarter, according to a survey by the Vietnam Competition Authority under the Ministry of Industry and Trade.

Dairy products, confectionery, beverages and home appliances got 28% of the complaints from consumers in the period, followed by the group of cellphones and telecommunication services, which stood at the top a year ago.

The group of home appliances such as fridges, televisions, and watermill machines ranked third with 11%.

The survey found that complaints and requests for advice rose significantly for the groups of health and beauty care products, transport products, and financial, banking and insurance services.

Regarding cities, Hanoi had more complaints with 36.5% of the total, followed by HCMC with 9.65%, Bac Giang with 3.49% and Haiphong City with 2.05%.

The competition authority said it will focus more on those groups of goods and services whose suppliers may infringe consumers’ rights. It will popularize relevant regulations among consumers and businesses and improve channels to receive more complaints from customers to protect their rights.

Huntsman to open bonded warehouse for textile clients

Global firm Huntsman Textile Effects will inaugurate a bonded warehouse at the Long Binh inland container depot (ICD) in Dong Nai Province this month to provide quality dyes and chemicals to the textile and related industries in Vietnam.

Paul G. Hulme, president of Huntsman Textile Effects, told reporters in HCMC yesterday that the multi-user facility would be opened later this month and is expected to operate at its full capacity of 250,000 tons early next month.

The Singapore-based company said in a statement that customers in Vietnam will benefit from shorter order lead times and a quicker response to ad hoc deliveries through the new facility. The warehouse positions Huntsman to support customers’ growth objectives when free trade agreements like the Trans-Pacific Partnership (TPP) are formalized.

“Vietnam’s textile industry continues to face economic and environmental pressures. To help customers stay ahead of the game, Huntsman Textile Effects recognizes that speed and flexibility are top priorities across the textile value chain,” Hulme said.

Hulme said apparel exports contribute remarkably to Vietnam’s gross domestic product and are projected to reach US$40 billion in 2020. This is one of the reasons why the company will open the bonded warehouse here in the country.

“We see opportunities for our products in Vietnam… and the demand for quality dyes and chemicals increasing,” he said.

Chuck Hirsch, vice president of Huntsman Textile Effects, said more Taiwanese and Korean companies have invested in dyeing and textile projects in Vietnam to capitalize on the opportunities from the TPP under negotiation at the moment.

Speaking to the Daily, the leaders of Huntsman Textile Effects said a number of customers in the sector have plans to relocate their operations to Vienam and this is a good opportunity for the company.

According to the Vietnam Textile and Apparel Association (Vitas), Vietnam needed 8.2 billion meters of cloth to turn out apparel for export last year and a mere 1.7 billion meters of it was produced in this country.

The U.S. is one of the key export markets for Vietnamese apparel. It and Vietnam are among the countries actively involved in negotiations over the multilateral trade pact TPP.

Huntsman Textile Effects said in the statement that Vietnam is the second largest garment exporter to the U.S. and Japan. The industry currently makes up 14% of Vietnam’s total exports and the country’s textile value chain has strong growth fundamentals, with production poised to grow by about 13% annually until 2020.

However, the country has challenges include import-dependent sourcing of raw materials and tougher environmental regulations.

As a major supplier of sustainable and innovative dyes and chemicals, Huntsman engages with customers through seminars to work towards a sustainable textile value chain.

Huntsman Textile Effects is supporting the textiles sector in Vietnam through its work with Panko Vina in implementing a Productivity Improvement Program (PIP). The plant has adopted new technologies from Huntsman Textile Effects to save energy and water.

Seafood exporters concerned about material shortages

Many seafood exporters worry about material shortages in the third quarter as farmers have reduced their farming areas due to shrimp diseases and lower prices of unprocessed shrimp and tra fish.

Nguyen Ngoc Hai, head of the Thoi An Tra Fish Cooperative in Can Tho City, said tra fish and shrimp farms have shrunk because farmers have not been able to earn profit in the past time.

Due to export difficulties, processing enterprises have bought shrimp at only VND70,000 (US$3.5) per kilo compared to the previous VND100,000, causing farmers to lose around VND5,000 for each kilo sold. Tra fish prices have also fallen to VND21,500-22,000 per kilo, almost the same as cost.

Farmers have to pay bank loan interest but enterprises settle payments by installment lasting up to 20 months for their seafood materials.

Moreover, diseases have hit shrimp farms in the Mekong Delta.

Speaking to the Daily at a farm produce export seminar in Hanoi City on Monday, Nguyen Hoai Nam, deputy general secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), said tough exports have badly affected aquaculture this year. Some provinces and cities have reported sharp drops in tra fish and shrimp farming acreage, leading to fears of material shortage in the third quarter of this year.

Due to high production cost, local shrimp exporters are coping with rising competition from India.

“In the near term, we cannot have solutions to lower production cost and help local exporters compete with rivals in India and Thailand. Besides, interest rates in the country are still higher than in other countries,” Nam said.

According to the Ministry of Industry and Trade, the nation fetched around US$1.9 billion in seafood export revenue in the first four months of 2015, down 15% year-on-year. Of the total, exports to the U.S. accounted for US$260 million, slumping 33.8% while shipments to Japan dropped by 15% to US$192.7 million, South Korea down 5.2% to US$118.8 million and Australia down 31.3% to US$36.5 million.

Duong Phuong Thao, deputy director of the ministry’s Export Import Department, said the volatile exchange rate between Vietnam dong and the U.S. dollar is hurting local exporters as 90% of export and import contracts are denominated in the greenback.

Since early last year, the U.S. dollar has appreciated against the euro and Japanese yen. Therefore, importers have negotiated to lower prices while production cost and input material prices in the country have stayed unchanged.

Besides, Vietnamese shrimp exporters are still at a disadvantage due to anti-dumping duties, especially in the United States.

NZ to boost food and beverage exports to Vietnam

Foods and beverages have accounted for 60% of New Zealand’s exports to Vietnam over the years and the country will further promote sales of the products in the coming years.

New Zealand Consul General in HCMC Tony Martin told the Food Connection event in Hanoi yesterday that Vietnam was among the key markets for New Zealand’s food and beverage exports in the coming years as exports to Vietnam have jumped.  

The Food Connection attracted eight New Zealand corporations and many local firms in hotel, restaurant and supermarket sectors. Half of the eight firms are active in the wine industry and the others are dairy, vegetable, beef and lamb suppliers.

New Zealand hopes the event will help build a strong bridge between businesses of the two nations and help New Zealand companies sell more products to the local market.

The Food Connection is part of New Zealand’s major program to promote its foods and beverages in ASEAN markets.

New Zealand Ambassador to Vietnam Haike Manning said two-way trade between Vietnam and New Zealand has grown strongly in the past five years and the two nations wanted it to double to US$1.7 billion in 2020.

New Zealanders know about Vietnamese farm products like coffee, pepper, cashew, thanh long (dragon fruit), mango and rambutan.

Vietnam Garment and Textile forum 2015: big opportunities

The Vietnam Garment and Textile Forum 2015 will be held in Hanoi on June 25-27. It expects to attract the participation of world’s leading garment and textile groups such as Puma, Levi Strauss, Li & Fung, Tal Group and the United States Fashion Industry Association (USFIA).

During the event, foreign groups and leading economists will share information on the international garment and textile market, the size of Vietnam’s garment and textile industry and its market, the world trend, and global supply chain of leading trademarks.

During the event, the participants will conduct a fact-finding tour at Rang Dong Industrial Park in the northern province of Nam Dinh to assess the favourable investment climate given to investors.

Vietnam’s garment and textile industry has rapidly developed recently and become a world’s leading garment and textile exporter besides China, India, Turkey and Bangladesh.

Last year, the industry’s export turnover surged nearly 17% to US$24.5 billion and its products have been exported to 180 nations and territories.

With more than 4,000 businesses operational, the country’s garment and textile industry has generated 4.5 million jobs. The industry is expected to enjoy preferential tariffs from the signing of Free Trade Agreements (FTAs).

Le Tien Truong, Vice President of the Vietnam Textile and Apparel Association (Vitas) said local businesses have seized opportunities to expand market and attract foreign investment.

After nine years of joining the World Trade Organization (WTO), Vietnam’s share in the US garment and textile market has increased constantly from 3% to 10%, only after China.

Last year, Vietnam’s garment and textile export revenue achieved an impressive growth in major markets with 17% in Europe, 12.5% in the US, 9% in Japan and 27% in the RoK.

This year, Vietnam aims to earn US$28.5 million from garment and textile exports.

Vietnam needs to ‘up its export game’

Vietnam’s economy faced increased downward pressure – especially in agriculture, forestry and aquatic product exports – in the four months leading up to May, according to officials at the Ministry of Industry and Trade (MoIT).

Governmental agencies and the business community must stand up to the downward pressure and implement far-reaching measures to modernize and improve product quality, the MoIT said to avoid a negative impact on employment and incomes.

In the January-April period, the export markets have hiccupped but are in line with expectations and should rebound in the remaining months of the year an official of the MoIT said, adding that downward pressure will persist unless concerted remedial actions are undertaken.

The official called for speeding up reforms in the nation’s rice industry – a centrepiece to the agricultural industry – to reach its full potential, a market that has been stymied and lagging in growth.

The rice industry continues to suffer from poor transport and infrastructure such as roads, railways, warehouses and handling equipment due to the industry’s inability to attract foreign investment, he said.

Huynh The Nang, general director of the Vietnam Southern Food Company (Vinafood II) in turn noted the African market has a great demand for white and jasmine rice but the industry’s ability to fill that demand has been hampered by a lack of modernized equipment.

If the industry was equipped with state-of-the-art milling systems it could readily meet Africa’s and the international community’s high quality standards Nang said.

Nang called for the timely launch of major infrastructure projects in transport and water conservation with the support of financial institutions and the government to reduce costs and thereby increase profits and develop a sustainable industry.

The country needs a plan that focuses on the whole chain—looking at how much farmers will get, how much millers will benefit, and how much exporters will get, based on top dollar global market prices, Nang stressed

Most importantly, the country must tap new markets and the industry must act in concert to proactively implement effective and targeted marketing campaigns to promote trade and develop a national rice brand to increase competitiveness in the world rice market

In the short-term rice faces an oversupply compounded by fierce price competition from Thailand and India but he added that the long-term solution is for the industry to migrate towards higher quality rice varieties, such as premium jasmine rice, to ensure output that meets the strict requirements of demanding markets.

Deputy Minister of Industry and Trade Tran Tuan Anh said the Government and MoIT should take drastic measures to help businesses speed up exports and create the most favourable conditions to improve the quality of rice exports.

Too many farmers still use chemical pesticides with cheap, poor-quality seeds — practices the government is working to change through education.

Trust within all sectors — from farmers to millers and exporters — is not strong enough yet, he said. We have to figure out ways to make businesses trust each other. This is the main obstacle we are facing. When the industry has quality rice, it receives a good price.

Furthermore, the MoIT should direct trade offices abroad to support the development of market, and establish a working group to timely deal with difficulties for export businesses in all sectors of the economy.

At first, the MoIT should take concrete measures to reduce production costs and control input costs to improve competitiveness and profitability of export products adding that secondary focus should be placed on simplifying tax and customs formalities.

For his part, Vietnam Association of Seafood Exporters and Producers (VASEP) Deputy General Secretary Nguyen Hoai Nam said to promote exports, especially seafood products, trade promotion activities should focus on key markets and major industries.

Nam emphasized the important role of commercial trade councillors to represent Vietnam domestic businesses abroad and provide advice on trade issues related to market.

He added that commercial councillors should serve as an important bridge in speeding up agro-forestry and aquatic exports.

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