Vietnam, RoK sign two ODA loan agreements

Vietnam’s Ministry of Finance and the Export-Import Bank of the Republic of Korea (RoK) signed two ODA loan agreements worth US$162 million through the Economic Development Cooperation Fund (EDCF) in Hanoi on July 9.

The loans with an interest rate of 0.1% per year and payment duration of 40 years (including a grace period of 10 years) aim to implement a US$117 million project to build Hung Ha bridge and a US$45 million project to develop Hanoi University of Pharmacy into a national university of regional standards.

Under the framework agreement worth US$1.2 billion for 2012-2015, these  two loan agreements are part of follow-up seven signed agreements, bringing the Korean Government’s total preferential loans for Vietnam to over US$512 million.

Earlier, in the 2008-2011 period, the RoK provided over US$1 billion in aid to Vietnam to implement projects on transport, health, and vocational training.

Vietnam, Turkey ink double tax avoidance agreement

The Ministry of Finance spearheaded negotiations with the Turkish Government during a recent working visit to the Middle Eastern country from July 6-9, and signing  a double tax avoidance agreement.

They also signed agreements providing for cooperation in customs and financial management.

At a working session with Turkey’s Deputy Finance Minister Abdullah Erden Cantimur, Deputy Minister Do Hoang Anh Tuan highlighted Turkey’s impressive economic accomplishments, especially in the field of financial management.

Tuan underscored the fact that the double taxation of profits will help boost the expansion of cooperation between the two nations and reassured his host that Vietnam is a reliable partner.

After signing the agreement, Tuan expressed hope that Turkey will create favourable conditions for the signing of other economic agreements soon. Deputy Minister Tuan also extended an invitation to visit Vietnam on behalf of Vietnam’s Finance Minister Dinh Tien Dung to Turkish Finance Minister Mehmet Simse.

For his part, Finance Minister Cantimur spoke highly of the recent signing of an investment encouragement and protection agreement and a cooperative document bysmall and medium-sized enterprises (SMEs) of both nations.

He affirmed that the signing of the double tax avoidance agreement is of great significance and will bring benefits to businesses of both nations, especially in the context of the rapid development of information technology.

Later, the host and guest officially signed the double tax avoidance agreement it the witness of Vietnamese ambassador to Turkey Nguyen The Cuong and representatives from Ministries of Finance of both nations.

Industrial production index may surge 6.5%

Despite facing many difficulties, the index of industrial production ticked up in the first six months.

The Ministry of Industry and Trade (MoIT) predicts it may surge 6.0-6.5% in the second half of the year.

To achieve this growth, the focus will be on using effectively investment capital, fully exploring production capacity and market demand.

At the same time, incentive policies should remain the focus to attract foreign investment and boostdomestic production in the fields of support industry, mechanical engineering, agriculture, chemicals, and light industry.

According to the General Statistics Office (GSO), Vietnam’s industrial production index bounced back in 2013 when it was up 5.9% compared to a year earlier.

US$446 million allocated for IT industry

Despite macroeconomic challenges, Vietnam invested US$446 million in its information technology (IT) industry in 2013, up 9.9% from a year earlier, according to the latest report by the International Data Corporation (IDC).

IDC revealed that about 41% of the investment was allocated for developing hardware services, which are facing difficulties due to low demand from other sectors like banking, insurance, production, and retail.

Vietnam’s strong investment in e-government, cloud computing, data centre, and geographic information system (GIS) has increased demand for systematic integration services and driven up the growth rate in these areas to 9.7% compared to 2012’s figure. IDC also predicted that Vietnam’s IT industry will achieve a 12.7%  annual growth this year.

In addition, the US$71.8-million IT and financial sector modernization project undertaken by the State Bank of Vietnam (SBV) is also expected to provide fresh impetus for the IT industry this year.

Vietnam imports 25,000 cars in H1

Vietnam spent nearly US$500 million in the first half of 2014 to import 25,000 completely built units (CBU) cars, an increase of 44.4% in volume and 53.9% in value year-on-year, according to the General Statistics Office (GSO).

The volume of imported cars was highest in May, a total of 5,000 units worth US$106 million. The strong rebound showed that the import value of CBU cars has been on the rise since earlier this year.

The GSO estimated that volume in June would be similar. Value is expected to decline to US$84 million on imports of luxury sedans and sport utility vehicles.

CBU car imports were up 75% in the first five months, while locally assembled automobiles saw only a 23% year-on-year increase, according to the Vietnam Automobile Manufacturers' Association (VAMA).

Vehicle imports are increasing this year due to a tax cut that took effect on January 1. As part of the ASEAN Trade in Goods Agreement (ATIGA), the import tax on cars from ASEAN countries is cut in half. The tax will drop to zero when Vietnam joins the ASEAN Free Trade Area (AFTA) in 2018.

VNPT International opens rep. office in Cambodia

The Vietnam Posts and Telecommunications Group-International (VNPT-I) on July 7 inaugurated its representative office in Phnom Penh, Cambodia.

At the ceremony, VNPT Chairman Pham Long Tran said the opening of the new facility marks a milestone in the group’s business strategy for expanding overseas markets, including Cambodia.

He also confirmed that VNPT will strengthen cooperation with Cambodia telecom companies to supply international telecommunications services.

On the same day, VNPT-I signed major economic contracts to provide IPLC, IPLC transit, IP Port transit services for leading Cambodian telecom companies such as Telecom Cambodia, Telcotech and Mekongnet.

In recent years, VNPT-I has developed business cooperation programmes with its partners in Laos, Cambodia, Thailand and Myanmar.

EU to check quality of bivalve molluscs in Vietnam

The European Commission Food and Veterinary Office (FVO) recently announced it will perform quality control inspections over processing of bivalve molluscs from September 9-18.

Tran Bich Nga, Deputy Head of the National Agro-Forestry-Fisheries Quality Assurance Department (NAFIQAD) in turn has asked all pertinent quality management agencies of agro, forestry, and aquatic products across the county to step up efforts to ensure businesses are in full compliance with EU food and safety regulations.

Key areas under the microscope include programmes on hygiene and safety control at breeding farms, procedures for granting certification of origin for products from controlled areas, and measures to maintain bivalve molluscs inside the controlled areas.

In addition, domestic businesses also need to maintain detailed documentation on shipments of bivalve molluscs, Nga said.

This is a basic requirement for which Vietnam received a warning from the EU in January 2012 and businesses must be able to present to the EU inspectors these documents to continue to export bivalve molluscs to this lucrative market.

NAFIQAD also requested the Centre for Quality of Agricultural Products provide the list of test methods on microorganisms, toxic algae, toxins and environmental pollutants and specific information about proven methods for food safety which were implemented in regional centres.

All of urgent requirements must be completed before July 10.

Newly-established businesses up 19.3%

As many as 37,315 businesses were established in the first half of 2014 with a total registered capital of VND230,924 billion, up 19.3% from the same period in 2013, the Government news portal reported.

Some 33,454 businesses were dissolved or suspended operations in the first half, up 16.5%. The number of enterprises resuming operation reached 8,322.

Regarding business structure, in the first half, those involved agriculture, forestry and aquaculture saw a rise of 27.5%, real estate 38.7%, logistics 62.6% and finance, banking and insurance 14.9%.

Most of the new businesses are located in Ho Chi Minh City (up 14.8%), Hanoi (up 16.2%), Thai Binh province (up 32.3%), Cao Bang province (up 133.3%) and Thanh Hoa province (up 16.6%).

Singaporean investors keen on local real estate market

Singaporean companies are highly confident that the Vietnam real estate market is on the pathway to sustainability, said Linson Lim, Keppel Land Vietnam General Director, one of the nation’s largest real estate investors.

Singapore’s daily newspaper, The Business Times, quoted Lim as saying Vietnam has a young dynamic population with an increasing development of middle-income earners who want to own their own home.

Linson Lim emphasized that the rapid urbanization process, improvements in infrastructure, and decreased interest rates in Ho Chi Minh City are providing a solid underpinning for expansion of the housing market.

Keppel Land Vietnam is part of Keppel Corporation, which is one of the largest multi-national groups in Singapore. The firm recently bumped up its ownership share in a luxury condominium project (Estella) in HCM City from 55% to 98%.

The Estella project is jointly venture by Keppel Land Vietnam and its local partner Tien Phuoc Company Limited. Keppel Land Vietnam paid US$11.46 million for its additional 43% interest in Tien Phuoc Company.

“This demonstrates the company’s long-term commitment to invest in the Vietnamese market,” Linson Lim said.

Its first phase of construction 719 luxury flats have been completed, which have so far sold out. The second phase is expected to finish early next year with an additional 500 flats.

The Estella project is one of 18 projects licensed to construct around 22,000 flats and offices in Vietnam.

The other projects include an International Centre and Sedona Suites Royal Park in Hanoi, and Saigon Centre, and Villa Riviera, Riviera Cove and Riviera Point residential areas in HCM City.

Vietnam’s largest show on manufacturing solutions opens

The 2014 MTA Vietnam Show, the largest on manufacturing solutions in the country, got underway in Ho Chi Minh City on July 8, with the participation of many companies from Germany, Japan, Singapore, Thailand and the Republic of Korea.

Jointly organised by the Singapore Exhibition Services and the Vietnam Chamber of Commerce and Industry’s Exhibition Service Co. Ltd, the four-day exhibition showcases products and machines in metal cutting and shaping, and tools for Vietnam’s thriving manufacturing industry.

It also gathers world-leading brands like Mazak, Trumdf, Makino, Hwacheon and DMG Mori.

This annual event offers a venue for businesses to seek the latest services and technologies of precision engineering, machine tools and metalworking.

Several seminars, including one on how to increase the competitiveness of Vietnam’s manufacturing sector in the globalised economy, will be held within the framework of the show.

Danang and Lao localities boost cooperation

A delegation from the Lao Government Inspection Authority led by Inspector General Bounthong Chitmany on July 8 paid a working visit to the central city of Danang.

At a reception for the Lao delegation, Danang city People’s Committee Chairman Van Huu Chien introduced the city’s geographical location, natural conditions, socio-economic achievements in recent years as well as the result of cooperation between Danang and Lao localities.

The two sides exchanged views on issues related to inspection, settlement of complaints and denunciations, anti-corruption; law-making process, training of inspectors and anti-corruption solutions for Lao localities and Danang.

Danang has so far signed 29 agreements and memoranda of understanding with Lao localities aiming to increase the exchange of visits, facilitate production and business activities and boost agricultural development, health, education and culture.

Danang’s export turnover to Laos in 2013 reached US$39.6 million and municipal enterprises have participated in Lao fairs and signed many contracts with their partners.

Meanwhile, Lao enterprises display their wares at exhibitions in the framework of East-West Economic Corridor (EWEC) Week taking place every year in Danang.  Four Danang firms are investing in Laos with a total capitalization of nearly US$52.3 million.

In terms of education, Danang has also provided scholarships for students in the southern provinces of Laos to help them follow higher education or earn MA degrees from Danang University.

Last year alone, the city granted 43 scholarships to students from southern Lao provinces.

Vietnamese businesses eye northern Lao market

Entrepreneurs in Hanoi are eagerly seeking out cooperation partners from Laos and are particularly keen on entering into business deals with partners from Luang Prabang province.

The statement was made on July 8 by Mai Thi Thuy, Hanoi Women Entrepreneurs Association Chairwoman, at an exchange between Vietnamese and Lao businesses organized by Consulate General of Vietnam in Laos.

“Over the past 19 years Vietnamese businesses have highly penetrated the northern Lao market in all sectors of the economy,” she said.

At the conference, Vietnamese and Lao delegates highly appreciated the importance of promoting trade and investment in all aspects, especially in the fields of production, tourism and services in Laos’ northern provinces. There was general consensus that this was an opportunity for businesses to exchange, and seek ways to boost trade, investment, and mutual assistance for co-development.

Vietnamese businesses have poured approximately US$302 million (equivalent to 5.9% of Vietnam’s total investment in Laos) into 127 investment projects of in northern Laos.

Canada supports Vietnam’s agricultural restructuring

Canada has approved funding of CAD500,000 for Vietnam’s Ministry of Agriculture and Rural Development (MARD) to implement a technical and policy support project to restructure the agricultural sector in the 2013-2020 period.

At the signing ceremony in Hanoi on July 8, Deputy Minister of Agriculture and Rural Development Hoang Van Thang highlighted the Canadian Government’s support for Vietnam’s agricultural sector over the years.

Over the past year, the ministry has resolutely restructured the agricultural sector by supervising planning, applying science and technology, training human resources, building proper policies and adopting new approaches in agricultural development.

Ms. Victoria Sutherland, Chargé d’affaires of Canada in Vietnam said that the Canadian Government’s support for Vietnam has primarily focused on improving mechanisms from the central to grassroots level and the strengthening of competitiveness at the local level.

Canada has been now formulating a new food safety project which will help enhance competitiveness in the agricultural sector and increase income for 15 million of farmer households in Vietnam, Ms Sutherland added.

HCM City hosts US investment seminar

A large number of representatives from the Vietnamese business community attended a seminar in HCM City on July 8 focused on investment opportunities in the US in line with Vietnamese strengths.

Attendees had a chance to meet and hold exchanges with US consultants and legal representatives and learn about the investment environment and specific cooperation opportunities in the US.

In recent years, HCM City has enjoyed fruitful trade ties with the US. By June 2014, the US had 285 projects totalling US$524.65 million in total, ranking 12th among largest foreign investors in the city. Most US-invested projects focused on education, health care, and tourism sectors.

The seminar was the result of a joint effort by the Vietnam General Consulate in San Francisco and Vermont, the US, and the Vietnam Chamber of Commerce and Industry (VCCI)’s HCM City branch.

*** The same day, a business forum between Vietnam and Thailand took place in HCM City as part of a Thai Week 2014.

Delegates to the forum were informed about investment policies in both countries. They also inquired into market information and partnership to boost cooperation in such fields as food, beverage, tourism, beauty and heath care salons, restaurant and hotel management.

Vietnam, Indonesia boost seafood cooperation

A high-level delegation from Vietnam’s Ministry of Industry and Trade paid a working visit to Indonesia’s Ministry of Trade to boost seafood cooperation between the two nations.

The visit aimed to explore business opportunities in Indonesia and prepare for the establishment of an ASEAN Economic Community (AEC) by 2015.

Saut P. Hutagalung, General Director of Fisheries Product Processing and Marketing at the Indonesian Ministry of Marine Affairs and Fisheries (MMAF) said that his nation highlighted Vietnam’s potential for aquatic exports as well as the country’s keen interest in investing in the seafood sector in Indonesia.

Indonesia’s export turnover of shrimp, crab, alga and ornamental fish to Vietnam climbed to US$27.36 million in January, up 32.24% against the same period last year. This year, Indonesia’s aquatic exports to Vietnam are predicted to surpass US$100 million, he added.

From February to June, Indonesia planned to boost aquatic exports to Vietnam –Indonesia’s sole strategic partner in South East Asia.

Saut P.Hutagalung emphasised that this is a proper time for Indonesia to increase shrimp exports as global shrimp price has risen since June due to the shortage of supply source.

Vietnam's gasoline prices reach record high

State-owned Petrolimex, Vietnam's leading fuel importer and distributor, on July 7 increased the price of 92-octane (92 RON) gasoline by VND410 to VND25,640(US$1.2) per litre, prompted by jumping world oil prices.

The highest-ever price of 92 RON in Vietnam is the fifth hike since the beginning of the year and the second increase in the last two weeks.

The price of high-grade 95RON also increased by VND410 to a record high of VND26,410 per litre.

According to Ministry of Finance statistics, the base price of 92 RON, the most commonly used form of gasoline in Vietnam, was now VND918, higher than the per litre selling price.

Its diesel price also went up by VND294 per litre to VND22,820, or US$1.08 per litre, while its kerosene price increased by VND413 per litre to VND22,950, or US$1.09, per litre.

An ambitious target for industrial production

A long-term industrial development strategy recently approved by the Prime Minister targets an industrial production to GDP ratio of over 50% by 2030 and full integration into the global value chain by 2035.

General Director of the Industrial Policy and Research Institute Duong Dinh Giam says the industrial sector has laid out a highly detailed and specific roadmap for achieving its goals for 2030.

The overall framework calls for average annual industrial value added growth of 6.5-7% in the years leading up to 2020 and 7.5-8% by 2030, with average industrial production value growth of 12.5-13% by 2020 and 11-12% by 2030.

Upon successful implementation, Giam says, that the proportion of industry and construction to GDP will be 42-43% by 2020 and 43-45% by 2030.

By 2020 the proportion of the manufacturing and processing sector will make up 85-90% of total industrial production value, and the value of high-tech products will account for 45% of national GDP. The corresponding figures by 2030 will be 90-92% and over 50%.

Minister of Industry and Trade Vu Huy Hoang says the industrial sector aims to have advanced technologies fully installed in all facets of the industry by 2030, elevating its capacity to be fully competitive in the global marketplace in terms of quality, quantity and price.

Hoang underscores the fact that last year Vietnam had 23 products with average export value of more than US$1 billion each, all poised for significant growth in the coming years.

As a case in point, Minister Hoang says the wood processing industry has distinct advantages favouring both industrial production and export growth, The country has relatively untapped plantation forests and high quality wood products that world consumers highly appreciate.

Vietnamese timber products with their high quality and clear country of origin (C/O) are in high demand globally, which creates an incentive for the industry to fulfill its set targets.

This is the first time the national industrial development strategy has incorporated the wood processing industry.

This is a good signal for the industry which faces many opportunities in the global export market, says Huynh Van Hanh, Vice Chairman of the Ho Chi Minh City Handicraft and Wood Industry Association (HAWA).

China is facing face anti-dumping lawsuits in a number of countries which has opened the door for Vietnamese businesses to penetrate the markets.

No country in the world which both develops the wood processing industry and raises forest coverage likes Vietnam, Hanh notes.

To obtain the set goals, Giam suggests that the sector should strictly implement important measures, such as selective investment attraction mechanisms to weed out the weak investment groups in favour of attracting strong and highly reputable multinational groups into key projects.

Procedures to screen technologies so that only projects with proven or technologies that have been thoroughly researched and have a high probability of success are implemented is a key measure.

Clarifying the list of sectors that fully or partly receive investment incentives is of prime importance, he says, adding this will allow for much improved control in developing the support industry and services.

Last but not least, Minister Hoang notes that the strategy does not focus on State-owned groups and corporations but on the non-state sector towards a target for joining the global value chain to supply industrial products to the world market.

Lotte Mart markets Vietnamese goods in RoK

Lotte Mart, one of the leading Korean food and shopping services retailers, is seeking high-quality Vietnamese products for export to its supermarkets in the Republic of Korea.

The group expects first shipments of Vietnamese products will be delivered to the RoK in late 2014 or early 2015, Lotte Mart Vietnam director Roh Kiho told a trade official in Hanoi on July 7.

Roh said this is the group’s strategic step, meeting its commitment to increase sales of Vietnamese goods and promote Vietnamese brands in the RoK.

Deputy Minister of Industry and Trade Ho Thi Kim Thoa, for her part, said her ministry welcomes Lotte Mart’s business strategy and creates favourable conditions for the group to realise its plan.

Lotte Mart has invested approximately US$1 billion in its operations in Vietnam. It has opened six marts in Vietnam, and plans to inaugurate three more in Hanoi, Vung Tau and HCM City in the second half of this year. More than 90% of its products are made in Vietnam.

Shrimp, prawn demand lifts seafood exports

The export value of seafood in the first half of this year grew strongly due to a sharp increase in shrimps and prawns.

The Ministry of Agriculture and Rural Development said the value of seafood exports rose by 24.2% to US$3.45 billion, of which 48% to 49% came from shrimps and prawns.

The Vietnam Association of Seafood Exporters and Producers said shrimps and prawns were strongly sought after by the US, the EU, Japan, the Republic of Korea, and China.

Earlier this year, disease in many shrimps and prawn supplies from other countries led to a boom in the domestic market, which was unaffected.

Tran Van Pham, General Director of Soc Trang Seafood Joint Stock Company, the second largest shrimp exporter in Vietnam, said shrimp exporters were kept busy processing product.

At the end of June, in the Cuu Long (Mekong) Delta provinces, shrimp and prawn prices rose by VND20,000 per kilogram to between VND120,000-125,000kg for white-leg shrimp and from VND255,000 to 260,000kg for prawn. In mid-June, prices rose from VND275,000 to 280,000 per kilo for prawn.

Pham said that high prices for shrimp and prawn had forced some importers to delay buying Vietnamese products.

The total export value of seafood this year is expected to reach US$6.9 billion, which includes US$$3.5 billion from shrimp and prawn exports, similar to that of 2013.

Dollar credit growth safe: SBV

There is no need to worry about credit growth in foreign currencies in the first half of this year as the ratio of dollar loans versus mobilisation is within its safe threshold.

Head of the central bank's money policy department Nguyen Thi Hong made the confirmation to the local press on July 6.

Ministry of Planning and Investment statistics showed that credit in foreign currencies grew by 10.51%, while the growth of dong loans was only 0.68% as of June 20.

Hong listed three factors that are supposed to ensure the liquidity of foreign currencies, in a response to an earlier report of the National Financial Supervisory Council which said that credit in foreign currencies was bearing certain pressure.

Firstly, the dollar loans in May increased by 9.35% against the end of 2013, but increased by 1.34% only, year over year.

Secondly, taking into account all deposits and savings from domestic accounts and other capital sources, the ratio of dollar spending is only between 50% and 60%.

Thirdly, most of the dollar borrowers are companies which have shown proof of having dollar resources to repay the loan. Otherwise, dollar loans are only granted to companies in priority sectors such as exports, agriculture, hi-tech applied agribusiness and auxiliary industry.

"While the overall credit growth is low, the central bank flexibly allows commercial banks to expand credit in foreign currencies," Hong said.

The State Bank of Vietnam (SBV) reported that the overall credit growth in the first six months was 2.3%. The banking system now has six more months to achieve 12% credit growth by the end of the year.

Hong said that credit in foreign currencies significantly contributed to the overall credit growth. In May 2014, Hong said if dollar loans had not increased by 9.35%, the entire credit would not have reached 1.51%.

SBV reports showed that the borrowing costs of dollar loans were 3 to 4 percentage points lower than that of dong loans. This has been blamed for the steady increase of dollar loans.

The annual interest rates charged over privileged loans hover around 7% to 8%. For manufacturing sectors, the rates are 9% to 10% for short-term loans and 10.5% to 12% for mid- and long–term loans per year. For dollar loans, the popular lending rates are between 3% to 7% annually.

Although the recent rise of foreign credit is in line with the State Bank's direction, Hong said that the bolstering by dollar loans was a short-term policy.

The central bank will go ahead with measures for de-dollarisation of Vietnam's economy. In the coming weeks, SBV will closely supervise credit growth, especially dong loans, to make proper adjustment.

Economists have urged the central bank to cut the dong interest rate further, in order to ease the capital cost burden on businesses. The bank said it would take time to consider the issue thoroughly for the sake of the dong position in the long run.

Last week, Pham Xuan Hoe, Deputy Head of the central bank's Monetary Policy Department, said that the total capital supply increased by 6% as of June 25. Roughly 87% to 90% of the capital resources in banks went to Government bonds and State Treasury bills, though they should go towards supporting economic recovery instead.

Samsung seeks local suppliers

The rising demand of foreign direct investment enterprises for raw materials has given local companies the chance to become suppliers, but they must be more active in the race.

According to the Vietnam Association of Foreign-Invested Enterprises, Samsung Vietnam, the electronic giant from the Republic of Korea with an approximately US$6.8 billion investment in the country, is expected to meet with around 100 Vietnamese companies next week to work on raw material supplies, after having recently got approval to develop a US$1 billion plant in the Samsung Bac Ninh Hi-Tech Complex.

The association's vice president Nguyen Van Toan said that Samsung Vietnam will place their demands and requirements for local companies wishing to become its suppliers.

He said that Samsung will also provide support to Vietnamese companies in meeting the standards set by FDI enterprises and engaging in the supply chain.

If successful, local companies will benefit a lot from becoming a link in Samsung's value chain, Toan said.

Contributing US$23.9 billion to Vietnam's total exports, which accounted for 18% of its total exports, the Korean phone producer's active move in increasing the local procurement rate would give a boost to the development of the support industry and Vietnamese small and medium-sized enterprises. The current local procurement of Samsung is 30%.

However, amid the rising FDI inflow in the support industry, whether local companies can grab the opportunity to become raw material suppliers remained a difficult question.

In the garment and textile industry, for example, Vietnam witnessed a rising wave of foreign investment ahead of the Trans-Pacific Partnership Agreement even as local companies were still confused by a series of standards, Tran Huu Huynh, from the Vietnam Chamber of Commerce and Industry said.

A Japan External Trade Organisation (JETRO)’s survey in March showed that the localisation rate of Japanese enterprises in Vietnam was 32.2% in 2013, up 4.3 percentage points over the previous year.

The rate was low compared to 64% in China, 53 in Thailand, 42 in Malaysia and 41 in Indonesia.

SMEs not yet ready for VN-EU FTA: officials

Small and medium-sized enterprises (SMEs) are still not prepared for the Vietnam – EU Free Trade Agreement that is expected to be signed this October, officials warned.

Deputy Director of the Central Institute for Economic Management, Vo Tri Thanh said, though the date is fast approaching, SMEs are not really prepared for the bilateral agreement.

Echoing Thanh’s view, Deputy Director of the Ministry of Industry and Trade (MoIT)'s European Market Department, Tran Ngoc Quan said that big enterprises are well aware of the agreement as they have taken active part in the negotiations. However, that does not hold true with SMEs.

Quan said that currently, MoIT makes public all information about the agreement to business associations, which then introduces these to its members. However, many SMEs are not association members, due to which they do not have updated information about the agreement.

To make it easy for SMEs to access the information, MoIT is trying to publish all the details of the agreement on its website, Quan said.

The SMEs will be caught napping on the EU market unless they actively prepare for the integration right now, Quan warned.

According to MoIT, Vietnamese firms should spend more time studying EU requirements and adjust their product and production processes to comply with such requirements. The reason for that is the EU imposes many trade regulations to protect human health and safety, animal and plant life, and health and the environment.

These include REACH, the European Community Regulation on chemicals and their safe uses, FLEGT or Forest Law Enforcement, Governance and Trade aiming to reduce illegal logging, and IUU, the regulation against illegal fishing.

Many experts believe that the Vietnam-EU FTA is one of Vietnam's most important agreements with other countries as key export staples of footwear, garments and textiles, coffee, along with seafood and wood products are exported mainly to the EU, with billions of dollars of annual turnover each.

When the agreement is approved, Vietnam's export turnover to the EU is expected to increase at an average 4% year as tariffs on most products exported to the EU will gradually drop to zero. Besides, Vietnamese products to the EU will be more competitive as compared to China's that has not signed the FTA with the EU till now.

Hanoi proposes service, tourism cooperation with Kagoshima

Vice Chairwoman of the Hanoi People’s Committee Nguyen Thi Bich Ngoc on July 7 suggested cooperation with Japan’s Kagoshima city in services, tourism and farm produce trading at a reception for Kagoshima Mayor Hiroyuki Mori.

Ngoc said that Hanoi is prioritising services and tourism, and it has strength in agricultural production. Meanwhile, one of Japan’s advantages is maritime services.

Basing on such facts, she suggested the two cities consider cooperation in these spheres.

In response, Mayor Hiroyuki Mori described Hanoi as an active and potential city, and stressed that Kagoshima will facilitate its business circle’s access to Hanoi’s market.

According to the municipal People’s Committee, there are 478 Japanese projects across Hanoi with total capital of some US$4.5 billion, 72.8% of which are poured into manufacturing automobiles and motorcycles, electronic and mechanical products, and building materials.

From now to 2020, the capital plans to step up attraction of foreign investment, especially those from Japan, into high technology.

Hanoi proposes service, tourism cooperation with Kagoshima

Vice Chairwoman of the Hanoi People’s Committee Nguyen Thi Bich Ngoc on July 7 suggested cooperation with Japan’s Kagoshima city in services, tourism and farm produce trading at a reception for Kagoshima Mayor Hiroyuki Mori.

Ngoc said that Hanoi is prioritising services and tourism, and it has strength in agricultural production. Meanwhile, one of Japan’s advantages is maritime services.

Basing on such facts, she suggested the two cities consider cooperation in these spheres.

In response, Mayor Hiroyuki Mori described Hanoi as an active and potential city, and stressed that Kagoshima will facilitate its business circle’s access to Hanoi’s market.

According to the municipal People’s Committee, there are 478 Japanese projects across Hanoi with total capital of some US$4.5 billion, 72.8% of which are poured into manufacturing automobiles and motorcycles, electronic and mechanical products, and building materials.

From now to 2020, the capital plans to step up attraction of foreign investment, especially those from Japan, into high technology.

Dak Lak coffee shipped to 60 countries, territories

Coffee, the key export of the Central Highland province of Dak Lak, is capturing an ever increasing share of the global market as it is now exported to more than 60 countries and territories.

Among the markets, 31 have an export value in excess of US$1 million each while nine have obtained values in excess of US$10 million each including Germany, Japan, Italy, the US, Spain, the Republic of Korea, Switzerland, France and Russia, the provincial People’s Committee reports.

Since early this year, more than 138,000 tonnes of coffee beans have been shipped abroad, representing an increase of 9.2% over the same period last year.

Import-Export 2/9 Dak Lak Company is one of the province’s leading coffee exporters. It directly sells around 85,000 tonnes of processed coffee to 48 countries and territories annually.

To stabilise the market, export businesses have teamed up with farmers to produce pure coffee, meeting the increasing demand for high-quality products of global importers.

Currently, more than 41,000 farmers plant coffee on nearly 61,460 hectares to produce around 271,150 tonnes of high-quality coffee beans annually, in compliance with certificate guidelines, such as the Common Code for the Coffee Community (4C), the Rainforest Alliance (RFA), Fairtrade, and UTZ Certified.

The province has established five sustainable coffee production alliances with the participation of more than 1,087 households. The alliances are creating a solid chain between farmers and businesses in production, trading and related services like processing and exporting.

Contracts to export 4.7 million tonnes of rice reached

Businesses have signed contracts for the export of 4.7 million tonnes of rice, according to the Ministry of Industry and Trade (MoIT).

The Vietnam Food Association (VFA) said that through the end of June, Vietnam has delivered more than 3 million  tonnes of rice worth an estimated US$1.367 billion to foreign partners.

The Ministry of Agriculture and Rural Development  (MARD) said that China remains Vietnam’s largest rice importer with 40.46% of market share.

Notably, the Philippines market has witnessed a sharp increase in importing Vietnamese rice against last year’s same period, ranking second with market shares of 20.66% followed by Ghana (4.39%) and Singapore (3.63%).

The Philippines Government has recently decided to import an additional 200,000 tonnes of rice from Vietnam in the context of the price hike in rice and other commodities in the market.

At present, the price of dried paddy in the Mekong River Delta is hovering around VND5,400-5,500 per kilo while that of long-grain paddy stands at VND5,500-5,600 per kilo.

Villas in world-class Montogomerie golf course listed for sale

Luxury villas at the world-class Montogomerie golf course have been listed for sale by the Central Green Land Joint Stock Company in Danang city at prices starting from VND10 billion each.

Montogomerie has been voted by Forbes magazine as one of the world’s top ten golf courses in Asia.

All 64 villas have views looking to Ngu Hanh Son Mountain and the 18-golf course and are built in accordance with the highest of international standards replete with three bedrooms, living room, kitchen and a swimming pool.

Vietnam-Singapore two-way trade rises 22.4%

Two-way trade between Vietnam and Singapore surged 22.4% to more than US$6.5 billion in the four months leading up to May, according to the Singapore Department of Statistics (DOS).

In the five month period, Singapore imports from Vietnam were valued at US$1.223 billion, up 23.7% over last year’s same period.

Singapore’s key imports were telephones and components, boilers, machinery  and spare parts, coffee, tea, glass products, construction glass, and oil and gas.

Some items with the highest growth include soil with sulphur, limestone, plaster, cement and sand, footwear, animal fat and vegetable oils, and fruit and vegetables.

Meanwhile, Vietnam’s key Singaporean imports reached nearly US$5.3 billion, up 22.1% over last year’s corresponding period

Garment material imports rise 20% in H1

The garment and textile sector’s raw material imports jumped 20.6% in the first six months of the year toUS$7.7 billion, the Vietnam Textile and Apparel Association (Vitas) reports.

Specifically, fabric imports were valued at US$4.63 billion, up 17.5% over last year, followed by accessories (US$1.5 billion, up 30.5%), and fibre (US$749 million, up 3.5%).

The country’s total garment and textile export turnover reached US$10.4 billion in the first half of 2014, 18.4% higher than the previous year.

Vitas statistics also show that import turnover of materials including fabric and fibre for export items hit US$5.9 billion in the reviewed period, an increase of 23.3% from a year ago.

To achieve the export target of US$13-US$13.5 billion in the remaining six months of 2014, the value of material imports is expected to increase sharply to keep pace with export production.

Vietnam corn imports rise to boost animal feed production

The country’s imports of corn in the first six months of the year exploded to 2.33 million tonnes valued at roughly US$600 million, the Ministry of Agriculture and Rural Development (MARD) has reported.

Nguyen Xuan Duong, deputy director of the Animal Husbandry Department of MARD, also said the total demand for corn is forecast at 4.5 million tonnes for the year with an estimated price tag of more than US$1 billion.

“The rising trend experienced by corn imports over recent years is primarily attributable to the increased demand for corn in the production of animal feed,” Duong said.

“Vietnam lacks sufficient agriculture acreage to significantly expand corn production and must rely heavily on imports to meet the increasing demand.”

It is also difficult for domestic farmers to compete with the foreign market price, Duong admitted, adding that corn is currently averaging US$245-248 per tonne, equivalent to VND5,800-5,900 per kilogram, while the domestic price hovers around VND6,200 per kilogram.

Industry experts say to reduce corn imports, the agricultural sector must apply biotechnology to become more competitive and invest heavily in building corn preservation and distribution systems.

Big companies team up for SC VivoCity project

The Vietsin Commercial Complex Development JSC (VCCD) on July 3 signed a memorandum of understanding (MoU) on the development of SC VivoCity project with the Bank for Investment and Development of Vietnam JSC (BIDV) and 13 other domestic and foreign counterparts in Ho Chi Minh City.

VCCD is a joint venture between the Saigon Co.op Investment and Development (SCID) and the Singaporean Mapletree- a leading Asia company specializing in real estate, investment and capital management.

Under the MoU, BIDV pledged a financial package worth US$40 million for the project. Other stakeholders, including CJ CGV – the largest multiplex cinema chain in the Republic of Korea (RoK), agreed to rent 21,270sq.m, accounting for half the total floor acreage of the project.

Saigon Co.op and NTUC Fair Price – the two leading retailers of Vietnam and Singapore - plan to build a megamall named Co.opXtra, while other brands such as renowned Starbuck, MOF, Bread Talk, Thai Express, Pepper Lunch and Shabu Ya will provide diverse food services.

Other partners include Guardian’s health and beauty store, California Fitness&Yoga Center, Playtime-a Korean indoor play centre for children, and Wall Street English Training Center.

The SC VivoCity, to be built on 62,000sq.m at a total investment of US$100 million, will be one of the leading shopping and entertainment centres in Ho Chi Minh City when it opens the door in 2015.

Electricity of Viet Nam (EVN) has completed divestment from its real estate holdings and is hurrying to withdraw capital from financial organisations, according to officials.

The group's recent report on its business operation in the first half of the year showed that it completed divestment at Saigon Vina Real Estate Company (Land Sai Gon) and the Central Power Real Estate Joint Stock Company (Land Mien Trung), as approved by the Ministry of Industry and Trade.

EVN also completed the transfer of its 1 million shares at Global Insurance Corporation (GIC) to International ERGO Company to reduce its stake in the company from 22.5 to 20 per cent.

Further, EVN sold more than 25.2 million shares at An Binh Bank (ABBank) to Ha Noi Import-Export Company (GELEXIMCO).

Statistics from the Finance Ministry, released last week that in the first half of 2014, State-owned enterprises (SOEs) have completed divestments from non-core businesses, valued at VND822 billion (US$39.1 million).

Last year, SOEs' investments reached VND965 billion ($45.9 million), mainly in finance, banking and insurance.

The businesses' total investment in non-core businesses was estimated at VND22 trillion ($1.04 billion).

Its stake at ABBank has now been lowered from 21.27 to 16.02 per cent.

"EVN's capital at ABBank included profits from shares and cash. Its investment at the bank will continue to lessen, based upon the Government's requirements," it said.

The group added that it has withdrawn all capital from EVN Investment and Construction Company, as it sold 500,000 shares at the company to ensure the highest effectiveness of the transfer.

It has also been carrying out procedures to divest investments from An Binh Securities Company (ABS), auctioning off 11.4 million shares.

The ministry approved its divestment plan at EVN Finance Company (EVNFinance) to reduce its stake from the current 40 per cent to 15 per cent.

Under the group's restructuring plan, EVN would withdraw from seven joint stock companies by the end of 2015.

Mekong Delta rice producers to plant more certified seeds

The Cuu Long (Mekong) Delta Rice Research Institute plans to double the area of rice fields using certified seeds in the next two to three years.

The delta is the country's main rice producer with about 1.7 million hectares under the crop.

But certified seeds are only cultivated on around 500,000ha per crop, according to the institute, adding that farmers mostly use paddy from the preceding crop to seed the next crop.

The increase in the use of certified seeds is targeted at improving the quality of the country's rice exports, Deputy Minister of Agriculture and Rural Development Le Quoc Doanh said.

This is allied with the programme of developing large-scale rice fields by enterprises to create their own raw material sources, he said.

Dr Le Van Banh, director of the institute, said to achieve the target, the institute, through the Ministry of Agriculture and Rural Development, is implementing an agricultural extension project for producing certified rice seeds.

It would co-operate with farmers to produce selected purebred varieties on some 10,000ha, he said.

Through the enterprises that have developed large-scale rice fields, the certified seeds would be sold to famers taking part in the programme but also to farmers who are not, he said.

The Viet Nam Southern Food Corporation (Vinafood 2), along with its subsidiaries, wants to tie up with the institute to develop quality seeds and supply them to enterprises for the large-scale rice fields, he said.

Planting certified seeds would yield rice of uniform quality and fetch higher export prices, he said.

But the domestic prices of rice, whether grown using certified or uncertified seeds, are almost the same though farmers have to pay more for buying certified seeds.

This discourages farmers from using certified seeds, Banh admitted, adding that firms therefore need to consider their purchase prices to boost their use.

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