Vietnam should build food branding strategy

Viet Nam should build a specific roadmap on food branding as food has been the sector with huge potential, Do Thang Hai, deputy minister of Industry and Trade said.

"The food sector has been given priority to improve its added value and promote exports in the upcoming time," Hai told a seminar on "Viet Nam's National Strategy on Food Branding" in Ha Noi yesterday.

He said the programme to build a national brand for the food sector was started in 2014 with an aim to help associations, trade promotion agencies and businesses build a common image for the sector in the global market.

In addition, the programme would better position Viet Nam's food sector, as well as build prestige on quality and value for sustainable development. However, the deputy minister said the branding and marketing for the sector had certain shortcomings. With low added value, the sector's exports had not seen high profits, and food products had not gained a firm foothold in both domestic and foreign markets.

Sharing the ideas, Julian Lawson, expert from the centre for the Promotion of Imports from developing countries (CBI) said food branding would bring better prices for farmers, sustainable production and greater economic security.

"Vietnamese food is very different from other cuisine. It has an authentic taste and tastes very good," he said.

However, he said, Viet Nam had a poor reputation with regard to chemicals, low quality food and pesticides that needed to change.

He believed that Vietnamese enterprises should adopt a strategy to build a brand for their products such as clarifying target objectives, consumption trends and demands, as well as rivals and meaning of logos. These could help the country join the big market in the European Union with high value.

He also suggested that businesses should replace their machines and equipment with modern technologies to reduce material waste and ensuring food safety.

"Market research should be expanded while diversifying products to suit customers' tastes in each market," he said, and added that building brands should be linked to complete distribution channels.

Nguyen Thi Anh Hong, vice chairwoman of Viet Nam Tea Association, also mentioned a reality that Vietnamese tea had a special taste. The local tea products had been exported to 70 countries. However, the annual export value was only US$300 million though up to 80 per cent of tea was exported to foreign markets.

"Vietnamese tea does not have a brand and suffers from a bad reputation relating to antibiotic residues," Hong said.

She said Vietnamese rivals such as Sri Lanka, India and Kenya have paid more attention to building brands and improving product quality.

"If Viet Nam does not have a strong strategy for branding, several food products would lose their market share," she added.

Le Thi Bich Thu, deputy head of Processing and Preservation of Agricultural Products Division under the Department of Processing and Trade for Agro-Forestry-Fisheries Products and Salts Production, said several of Viet Nam's agricultural products such as cashew, pepper, rice and coffee have held leading positions in the world market. However, their export value was low due to raw material exports.

Thu said the building of material plantations faced difficulties due to investment shortage in infrastructure, and processing technology.

Nguyen Trung Kien, sales director of Nafoods Group said several Vietnamese businesses were not very clear in their understanding of production, processing and markets though the country had deeply integrated into the world market. 

Sea transport companies battle red tape for crew

Participants at a maritime transport conference held on Monday complained of burdensome and complicated procedures required to obtain legal papers and professional certificates for crew members on cargo ships.

At the conference, transport businesses met to review developments in two new waterways, the sea routes of Quang Ninh- Quang Binh and Quang Binh-Kien Giang. The attendees credited them with a reduction in road traffic, and spoke of the routes effect transport of coal, iron, steel and cement cargo.

However, many transport enterprises complained of unreasonable fees. Some participants from Hai Phong City claimed local navigation companies charged them for services even though navigators were never provided to guide their vessels.

Trang Thi Kim Mai, owner of Phuc Vinh company in Vinh Long Province, said her vessels had to pay capacity fees several times to move around different ports in the province despite regulations that stipulate a one-time fee.

"We had to spend up to VND18 million (US$810) in capacity fees for five vessels to move around local ports each month," she said.

In reply to Mai's complaint, Vice Minister of Transport Nguyen Nhat said that the collection of multiple capacity fees was wrong and that the ministry would set up an inspection team to look into the matter.

Some business representatives suggested that the ministry eliminate requiring certain maritime transport certificates such as various vessel-specific driving licensces required of captains that already have several licences.

Vice minister Nhat agreed, saying that it was unnecessary for a captain to get a certificate to drive low-capacity vessels if the captain already has one to drive large-capacity vessels.

Nhat told the ministry's consultancy unit to quickly eliminate redundancies and unnecessary hardships to attract more investment in waterway transport.

At the conference, a ministry report on the two new waterways was in circulation. The report listed more than six million tonnes of cargo transported in the first nine months of the year, nearly 600 vessels licensed to operate the new routes and 488 of them already equipped with containers.

State budget in deficit

The General Statistics Office has released a report on the State budget situation for the year to October 15.

Contributions from domestic business activities reached VND522.5 trillion ($23.41 billion), or 81.8 per cent of the estimate, from crude oil VND53.8 trillion ($2.41 billion), or 57.9 per cent, and from import and export activities VND129.9 trillion (5.82 billion), or 74.2 per cent.

In the contributions from domestic business activities some were higher than the annual estimate, such as environmental taxes of VND18.2 trillion ($815.72 million), 40.9 per cent higher than estimated, and land use fees and taxes of VND44.8 trillion ($2 billion), 14.9 per cent higher.

Personal income tax payments reached VND45.2 trillion ($2.02 billion), or 88.1 per cent of the annual estimate, while contributions from industry and trade activities (excluding SOEs) were VND95.7 trillion ($4.28 billion), or 80 per cent. Contributions from foreign-invested enterprises (excluding crude oil) reached VND103.3 trillion ($4.62 billion), or 72.5 per cent of annual estimates, and contributions from SOEs were VND158.5 trillion ($7.1 billion), or 71.8 per cent.

Budget spending in the period stood at VND867.7 trillion ($38.89 billion), accounting for 75.6 per cent of annual estimate. Spending on investment and development was VND134.3 trillion ($6.01 billion), or 68.9 per cent, spending on socioeconomic, national defense and security, and administrative management was VND605.1 trillion ($27.12 billion), accounting for 78.9 per cent, and spending on debt repayments and donations reached VND120.8 trillion ($5.41 billion), or 80.6 per cent.

The State budget deficit therefore came in at VND157.9 trillion ($7.07 billion), or 69.8 per cent of the estimate from the National Assembly for 2015, of VND225 trillion ($10.08 billion).

NA Justice Committee: Takeovers of ailing banks lawful

The central bank’s acquisitions of three debt-laden commercial banks at VND0 a share are lawful as this unprecedented move ensures safety for the entire banking system and protects the legitimate interests of depositors, said Le Thi Nga, vice chairwoman of the National Assembly (NA) Justice Committee.

Nga said the central bank has a good legal basis to buy commercial banks at zero Vietnam dong. Several laws and the Government’s bank restructuring scheme and decisions have created a legal groundwork for the central bank’s takeover of ailing banks.

“The legal framework is solid. I myself feel secure about the central bank’s acquisition of three banks at VND0,” Nga told a seminar in Hanoi City on Monday.

The seminar was organized to provide NA deputies with updates on the restructuring of the banking system, especially the central bank’s takeovers of Construction Bank, OceanBank and GPBank.

The solution is necessary and suitable to protect the banking system and the interests of depositors. When the Law on State Bank of Vietnam and Law on Credit Institutions were drawn up, the NA requested that safety in the banking system must be protected and laws allow credit institutions to restructure.

Though the State sympathizes with shareholders of the weak banks, Nga said, they have to bear responsibility for their wrong investment decisions.

In fact, commercial banks did not strictly followed information proclamation rules. Some individual investors were only aware of the real performance of the banks after the central bank had announced to acquire them.

To win public confidence, it is necessary to protect the interests of small shareholders… However, the NA suggests that bank purchase is just a situational solution, and the International Monetary Fund (IMF) shared this point, she added.

Dinh Xuan Thao, head of the NA Steering Committee’s Judicial Research Institute, said purchasing commercial banks at zero dong is suitable for Vietnam’s situation as other countries usually let weak banks go bankrupt.

Economic expert Le Xuan Nghia said buying a bank at VND0 is stipulated at some laws and government decisions, but they are not publicized.

Explaining the process of handling ailing banks, Nghia said the central bank does not spend a penny on the purchase and that these acquired banks continue operating as normal.

Deputy Minister of Justice Dinh Trung Tung said there have been mixed reactions to the takeover of struggling banks at VND0. It is necessary to review and complete the legal system to facilitate the move, he noted.

Besides, shareholders should consider their decisions carefully and have to face consequences, if any, Tung said.

Speaking to reporters after the seminar, lawyer Truong Thanh Duc, chairman of Basico law firm, said such bank purchases do not constitute an act of nationalization.

The central bank’s action has prevented the banking system from a domino collapse. However, it took place at a time when the country does not have enough and clear regulations on dealing deal with these cases, Duc said.

G-bond market recovers

The Government bond market has been steadily recovering, buoyed by some positive macro-economic indicators announced at the ongoing meeting of the 13th National Assembly (NA).

G-bonds with a five-year tenor were snapped up last week, marking the third consecutive week of good debt sales. Twenty investors attended the bond auction held by the State Treasury on the Hanoi Stock Exchange (HNX).  

Closing the auction, they acquired VND3 trillion (US$134.46 million) worth of G-bonds at a coupon of 6.65% per annum. Of an additional five-year bonds issued later and worth VND500 billion, investors bought VND320 billion worth of debt at the same coupon. 

Five-year and three-year bonds issued by the State Treasury have attracted many institutional investors, mainly commercial banks after a long period of sluggish demand. 

Meanwhile, demand for G-bonds with a ten-year tenor remained lackluster though the bond yield was revised up 10 basis points to 7% per year.

According to the northern exchange, the State Treasury has mobilized over VND104.92 trillion (US$4.7 billion) from G-bond sales in the year to date, meeting around 50% of the full-year target.

Banks also grabbed almost all G-bonds of three-year and five-year tenors issued by Vietnam Bank for Social Policies and Vietnam Development Bank. However, it was hard to find buyers for 10-year and 15-year bonds though the two organizations offered higher coupons than the State Treasury did.

Some institutional investors said the primary bond market has turned bustling since the State Treasury increased the five-year bond coupon by 20 basis points to 6.65% per annum a month ago.

The winning ratio has risen to 39% following a record low of 16% last month. The Vietnam dong has strengthened 0.5% against late September as the State Bank of Vietnam issued Circular 15 tightening rules on foreign currency trade to discourage people from hoarding the U.S. dollar.

This has helped spur demand for bonds, said specialists at Viet Capital Securities Company.

Experts credited the recovery of the bond market to the Ministry of Finance’s effort to raise funds from different sources to finance State budget deficit. The ministry borrowed VND30 trillion from the central bank and plans to issue US$1 billion worth of G-bonds for Vietcombank.

The Government is seeking the NA’s nod for a plan to issue US$3 billion worth of sovereign bonds on international capital markets. Though the plan has not been passed, it has left positive impact on the State Treasury’s bond sales.

Therefore, five-year bonds are projected to remain attractive to investors and their coupons may hover around 6.6% per annum.

As G-bond sales have been slow since the beginning of the year, the Government has asked the legislature to permit G-bond issues with tenors of less than five years.

The Government’s plan to issue US$3 billion worth of sovereign bonds and G-bonds with shorter terms has got the green light from the NA’s Financial and Budgetary Committee. If the plan is approved, it is expect to encourage banks to use short-term capital to invest in bonds.

On the secondary bond market, foreign investors last week maintained their net buying for eight weeks in a row, spending VND770 billion mainly on one-year bonds.

They have net bought VND5.95 trillion worth of bonds over the past two months. 

G-bond yields for most tenors have inched up, according to a report of Bao Viet Securities Company.

FDI inflow sees 40% year-on-year increase

Vietnam has attracted over US$19.2 billion worth of foreign direct investment (FDI) since early this year up to October 20, a year-on-year increase of 40.8%, according to the General Statistics Office of Vietnam (GSO).

Of the total amount including both newly-registered and supplemented capital, approximately US$11.8 billion has been disbursed, up 16.3% over the same period last year.

According to the GSO, from the beginning of this year to October 20, more than 1,600 new projects were licensed with a total registered capital of over US$12.4 billion, up 27% in the number of projects and 25% in the volume of capital against the same period in 2014.

In addition, more than 660 existing projects registered to expand capital with supplemented capital of over US$6.8 billion.

In the past ten months, over US$12.4 billion of FDI capital was registered to pour into manufacturing and processing industries, accounting for over 64% of total FDI capital. In the meantime, 13.6% of FDI capital was registered to be invested in electricity, gas, water and air conditioner production and distribution sectors and over 11% of FDI capital was registered to go into the real estate sector.

During the period, 47 provinces and cities nationwide saw newly-licensed FDI projects with over 20% of the capital poured into Tra Vinh province. Ho Chi Minh City came in second, attracting over 18% of FDI capital while Dong Nai province attracted over 10% of total FDI capital.

Malaysia was the largest foreign investor among 59 countries and territories registering new projects in Vietnam in the past ten months with over US$2.4 billion, making up 19.4% of the total newly-registered capital. It was followed by the Republic of Korea (accounting for 16.6%) and the United Kingdom (accounting for 10%), among others.

Government seeks further tax legislation changes to support enterprises

The government has proposed a range of amendments to current tax laws to support domestic enterprises as Vietnam is heading for greater international economic integration.

The proposed changes will cover the laws on value-added tax (VAT), special consumption tax and tax management, although revisions to these pieces of legislation were made not long ago.

The most recent changes to the laws on VAT and special consumption tax took effect January 1 this year, while amendments to the tax management law have yet to come into force.

Minister of Finance Dinh Tien Dung said the changes are necessary as the ASEAN Economic Community, of which Vietnam is a member, will be formally established at the end of 2015 and the country’s negotiations on major trade pacts have concluded.

Specifying that the import duty on many goods will be eliminated in a few years, the government suggested the National Assembly introduce more policies to support agriculture and exports, prevent tax refund fraud, and streamline tax declarations and payment procedures.

Regarding tax management, the government says measures are needed to tackle tax arrears of State-owned enterprises and joint-stock companies as part of the restructuring effort.

The government also put forward a motion to abolish small amounts of low non-agricultural land use tax levied on households and individuals as a way to cut red tape and to help tax agencies focus on the management of higher revenue sources.

The changes are expected to be brought for discussion by the National Assembly on October 29.

PIT revenue equal to crude oil revenue

Revenues from personal income tax in 2015 are estimated at VND55 trillion ($2.4 billion), the highest level to date, Deputy Minister of Finance Do Hoang Anh Tuan told a press conference on October 26. The figure is almost equal to crude oil revenues for the year, which are expected at around VND60 trillion ($2.7 billion).

Mr. Tuan also said that total budget revenues for the year will exceed estimates by VND17.4 trillion ($783 million), with State budget revenues falling VND31 trillion ($1.39 billion) but local budget revenues increasing VND47 trillion ($2.11 billion).

The decline in State budget revenue is due to crude oil prices slipping below $100 per barrel, while Vietnam also adjusted import taxes on many items.

The government has proposed using VND10 trillion ($450 million) from divestment sources to offset the losses and balance the State budget. “Tax liabilities of enterprises reached VND76 trillion ($3.42 billion),” Mr. Tuan said. “The Ministry is focusing on handling outstanding tax liabilities of VND34 trillion ($1.53 billion) from a number of enterprises.

Vietnam currently has 506,000 enterprises paying taxes on time. In the first nine months tax collections stood at VND5 trillion ($225 million).

Not all pay on time, however. Deputy Minister Tuan used Vietsovpetro, the first joint venture between Vietnam and a foreign country (Russia) in the field of oil and gas exploration and production, as an example. Last year its tax bill was $86 million, which is still to be paid to the State budget.

Sun Group and AccorHotels sign strategic agreement

Sun Group signed a strategic cooperation agreement with AccorHotels on October 26 in management consulting at its hotels and resorts.

The agreement targets to establish and elevate service quality at Sun Group’s resorts and hotels in accordance with international standards and to maintain such standards, Vice President and Managing Director of Sun Group, Mr. Dang Minh Truong, said at the signing ceremony.

AccorHotels will provide initial consultancy on services and operational management for Premier Village Phu Quoc Resort, which has more than 100 seaside villas, and The Sebel Phu Quoc, which has over 500 apartments and hotel rooms on Phu Quoc Island.

It will also continue to cooperate with Sun Group in its upcoming MGallery project in the popular hill retreat of Sapa in Vietnam’s northern mountainous area.

AccorHotels earlier participated in managing a number of hotels and resorts developed by Sun Group, such as Premier Village Danang Resort, Novotel Danang Premier Han River, Mercure Danang French Village, Ba Na Hills Mountain Resort, and Pullman Danang Beach Resort.

Sun Group is one of the largest real estate groups in Vietnam and the biggest investor in central Da Nang city, with dozens of notable projects in hotels, resorts, amusement parks, and urban areas such as InterContinental Danang Sun Peninsula Resort, Harnn Heritage Spa, Ba Na Hills Mountain Resort, and Asia Park, etc.

AccorHotels is one of leading hotel managers in the world, with 3,700 hotels in 92 countries. In Vietnam it manages 20 hotels such as Sofitel Legend, Sofitel, MGallery, Pullman, Grand Mercure, The Sebel, and Novotel, etc.

"New" Tran Anh supermarket opens

On October 28 the Tran Anh Digital World JSC will open the Tran Anh AEON Mall Electronic Supermarket in Long Bien district, Hanoi.

This is the 16th supermarket of Tran Anh in the northern region and the eighth in Hanoi. It is the first, however, to follow the Japanese style being adopted under Tran Anh’s cooperative agreement with its strategic partner, the Nojima Corporation from Japan.

The new supermarket covers an area of nearly 1,500 sq m and features a range of significant changes in design and product display. As part of the grand opening it will offer promotional discounts on many items, of up to 50 per cent, with customers also having the opportunity to receive gifts from Japan. It also will present 1,000 DVDs to customers on a seminar about raising and teaching children following Japanese methods.

In the third quarter the company’s sales revenue reached VND801 billion ($35.9 million), an increase of 45 per cent year-on-year. Its profit was VND1.34 billion ($60,090), compared to a loss of VND8.44 billion ($378,500) in the third quarter last year. In the first nine months of the year revenue stood at VND 2.47 trillion ($110.9 million), up 44 per cent year-on-year, with profit after tax of VND11.9 billion ($533,600), compared to a loss of VND3.75 billion ($168,200) in the first nine months of 2014.

By the end of the year Tran Anh expects to open eight electronics supermarkets in the northern and central regions, bringing its total to 24 and the seeing it become the leading retailer in the north. Marketing Director of Tran Anh, Mr. Ngo Thanh Dat, believes that by not focusing solely on profits in 2016 and with support from Nojima, the company can speed up its development in the future.

Impressive 3Q for BIDV

The Bank for Investment and Development of Vietnam (BIDV) has released its business results for the first three quarters of the year.

Its total assets remain the highest in the banking sector, valued at VND786 trillion ($35.22 billion), an increase of more than 20 per cent against 2014. Outstanding credit was over VND570 trillion ($25.54 billion), an increase of over 15 per cent compared to earlier in the year.

Its credit share was 12.9 per cent of the total market, 1.3 per cent higher than in 2014, and capital mobilization reached VND625 trillion ($28.01 billion), an increase of 21 per cent against earlier in the year.

Profit before tax in the first three quarters stood at VND5.53 trillion ($247.85 million), 25 per cent higher than in the same period last year. Its bad debt ratio, meanwhile, was managed at less than 2 per cent.

Over the period BIDV actively cooperated with international partners through several memoranda of understanding, for example with Cathay United Bank and ANZ Vietnam.

In November BIDV will organize a number of events overseas, in Russia, Japan, and Taiwan, as well as forums to boost Vietnam’s tourism in Nghe An and Quang Binh provinces.

Agro-fishery-forestry exports reach 24.6 billion USD in ten months

Vietnam’s agro-fishery-forestry product exports during the first ten months of this year were estimated at 24.61 billion USD, a year-on-year decrease of 3.8 percent, according to Ministry of Agriculture and Rural Development.

Most of the key agricultural products saw a tumble in both quantity and value. Since January, the country has raked in 2.26 billion USD from exporting 5.32 million tonnes of rice, dwindling 4.6 percent in quantity and 11.7 percent in value compared to the same period last year.

The same situation affected coffee and rubber exports, which saw two-digit decreases. Some 1.05 million tonnes of coffee were sold for 2.13 billion USD in the ten-month period, tapering off 29.6 percent in volume and 31.4 percent in value. Meanwhile, rubber exports witnessed a slight surge of 3.5 percent in the amount shipped abroad to 870,000 tonnes but a 15.8-percent fall in revenue to 1.22 billion USD.

In the period, tea shipments of 99,000 tonnes were worth 170 million USD, down 9.1 percent in quantity and 8.4 percent in value.

By stark contrast, pepper and cashew exports saw stellar results. About 272,000 tonnes of cashew consumed in foreign countries brought back 1.97 billion USD, escalating 6.3 percent in volume and 18 percent in value.

Pepper exports in ten months slid 19.6 percent but value went up 0.5 percent. Pepper shipments stood at 117,000 tonnes for an export value of 1.11 billion USD.

Vietnam earned 5.47 billion USD from wood and wood-based product exports, picking up 7.9 percent over the same period last year. China, Japan and the US are three biggest importers of the commodity.

The seafood sector also contributed 5.37 billion USD to the total export revenue, dropping 17.7 percent compared to the same period in 2014. The US continued to be the leading market with 19.43 percent of total seafood export value.

Budget value for 2015 higher than target

The State budget value for 2015 will rise above expectations by 17.4 trillion VND (790.9 million USD) while the budget deficit is estimated at 31 trillion VND (1.4 billion USD), Deputy Finance Minister Do Hoang Anh Tuan told a press conference in Hanoi on October 26. 

The higher budget value is buoyed by a 6.5 percent economic growth and a low 1.5-2 percent consumer price index. 

Explaining the budget deficit, Tuan pointed to low fuel prices and import tariffs stipulated in a series of free trade agreements. To make up for this, the government asked the National Assembly to approve the minimal use of 10 trillion VND (450 million USD) divested by some State-owned enterprises. 

Additionally, up to 34 trillion VND (1.54 billion USD) worth of late corporate taxes will be collected, more than 5 trillion VND (225 million USD) of which was collected in the first nine months of this year. 

Tuan admitted that several companies are purposefully delaying tax payments for their own gains. 

The ministry also established five groups in charge of uncovering transfer pricing behaviours, he said. 

On public debts, Tuan said they account for 63.2 percent of the budget, inclusive of official development assistance for 2016, which is still within its limits.

Garment and textile exports to the US hit US$9.4 bil in ten months

Vietnam’s garment and textile exports to the US are estimated to earn US$9.4 billion in the first ten months and are likely to reach US$11 billion this year. 

According to statistics from the General Department of Vietnam Customs, Vietnam’s garment and textile exports to the US in the first nine months rose 13.6% to US$8.33 billion against the same period last year.

Last year, exports to this market surged 12.6% to US$9.8 billion compared to the previous year’s corresponding period.

Nguyen Thi Tuyet Mai, Chief of HCM City office, Vietnam Textile and Garment Association (VITAS) said Vietnam’s exports to the US market have enjoyed favourable conditions as the number of orders jumped over 13% compared to last year’s corresponding period.

Earnings from exports to the US, a Trans Pacific Partnership (TPP) member nation, made up 45% of Vietnam’s garment and textile export value.  The substantial tariff reduction to zero percent from the current 17%-30% under the TPP will be favourable for businesses to expand their US market in the coming years. 

Vietnam mulls new import tariff on alloy steel after fraud warning

The Ministry of Finance is considering changing a tax regulation following concerns that the rule has been abused by Chinese exporters to ship a large amount of steel to Vietnam without paying duties.

Currently imported steel with at least 0.3% of chrome content will be exempt from tarriffs, but the ministry wants to introduce a 10% tax.

The proposal is now awaiting feedback from the Ministry of Industry and Trade, the Ministry of Planning and Investment, and other relevant agencies.

It came after the Vietnam Steel Association voiced concerns over strong increases in Chinese-imported alloy steel billets recently.

Chinese exporters claim their products contain 0.3%-0.4% chrome content, thus getting import duty exemption under Vietnam's existing laws, the association said. 

But the very small chrome content does not add any value to the steel billets, meaning they cannot be used for making high-quality products, it said, recommending them being taxed at 9%, which is the rate for non-alloy steel used for construction purposes.

Since local products cannot compete with cheap imports, many Vietnamese manufacturers have had to scale down their production, according to the association.

Vietnam imported 62,000 metric tons of steel last month, only slightly lower than the combined figure for July and August, it said.

It estimated that the government lost US$1.89 million in taxes in the past two months due to the dubious nature of the Chinese steel.

More than 1.13 million tons of steel billets, mostly from China, were imported in the first nine months, almost triple the volume imported in the same period last year.

Danish JYSK to open furniture shops in Vietnam

JYSK, a global furniture brand from Denmark, has granted a franchise for a Vietnamese partner – NeatClean – to open JYSK furniture shops in Vietnam.

The first two JYSK shops will make their debut on October 28 and November 27.

Doan Hong Hai, Chairman of NeatClean JSC, said he is positive about the future of their new business with JYSK as Vietnam is a potential retail market, ranking 28th among countries with highest Global Retail Development Index last year.

We will focus on middle-class customers and plan to open 10-20 shops in the next five years, Hai said.

Bo Monsted, Head of Commercial Section of the Embassy of Denmark in Vietnam said after the EU-Vietnam Free Trade Agreement (EVFTA) comes into effect in the coming time, Vietnamese customers will have a chance to access high-quality furniture products from Europe at reasonable prices.

JYSK was set up in 1979. It has more than 2,200 stores in more than 39 countries in the world with an annual revenue of 2.8 billion euro.

Govt income for 2015 rises above target

State revenue for 2015 will likely rise above expectations by VND17.4 trillion (US$790.9 million) while the budget deficit will likely be VND31 trillion ($1.4 billion) smaller than previously expected, Deputy Finance Minister Do Hoang Anh Tuan told a press conference in Ha Noi yesterday.

The higher State income is buoyed by 6.5 per cent economic growth and a low 1.5 per cent to 2 per cent consumer price index increase.

Explaining the budget deficit, Tuan pointed to low fuel prices and import tariffs stipulated in a series of free trade agreements. To make up for this, the Government asked the National Assembly to approve the use of VND10 trillion ($450 million) of proceeds from divestments from some State-owned enterprises.

Additionally, up to VND34 trillion ($1.54 billion) worth of late corporate taxes will be collected, more than VND5 trillion ($225 million) of which was collected in the first nine months of this year.

Tuan admitted that several companies are purposefully delaying tax payments for their own gains.

The ministry also established five groups in charge of uncovering transfer pricing behaviours, he said.

On public debts, Tuan said they account for 63.2 per cent of the budget, inclusive of official development assistance for 2016, which is still within its limits.

HAGL posts $96 million Q3 revenue

Hoang Anh Gia Lai (HAGL) earned VND2.153 trillion (US$96.1 million) in consolidated revenue and VND438 billion ($19.5 million) in after-tax profit in the third quarter of 2015.

According to the company report, the revenue was three times larger than it was in Q3, 2014.

Thus, in the first nine months of 2015, HAGL earned VND5.189 trillion ($231.6 million) in revenue and VND1.341 trillion ($59.86 million) in after-tax profit.

It also earned VND1.511 trillion ($67.45 million) in before-tax profit, achieving 72 per cent of the target for the year.

Besides the property sector, the group's agriculture sector contributed a lot to the result.

In late September, HAGL signed a co-operation agreement with Nutifood, which manufactures soy milk, under which HAGL will grow soybean on 1,000ha, while NutiFood will use the entire soybean crop for its soy milk products.

In 2014, HAGL worked with Nutifood on a VND11-trillion ($488.9 million) project, in which HAGL maintained 120,000 dairy cows to meet NutiFood's need for 500 million litres of milk per year.

HAGL Group shares (HAG) ended at VND14,500 ($0.64) each on the HCM Stock Exchange yesterday. 

Eximbank to sell Sacombank stake

The Viet Nam Export Import Commercial Joint-Stock Bank (Eximbank) withdrew its capital representatives at Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank), taking the first step to divest from Sacombank.

This was announced on Sacombank's website last week.

"After withdrawing the representatives, we will put forward to the State Bank of Viet Nam (SBV) a plan to sell our shares," a leader of Eximbank told online newspaper VnExpress.

Eximbank will co-operate with its partners to sell its stake when they receive SBV's approval. The divestment is expected to be completed next year.

Eximbank's share at Sacombank fell from 9.8 per cent to 6.4 per cent after Sacombank merged with the Southern Bank, increasing the Sacombank charter capital to nearly VND19 trillion (US$850 million).

In the first half of this year, Eximbank reported a profit of VND570 billion ($25.51 million), 57 per cent of the target for the whole year, raising expectations of achieving this year's target. 

VN to be global industrial hub

Viet Nam is likely to become a global manufacturing and processing hub and a destination for multinationals in the next 20 years, an international conference has heard.

Participants at the conference in Ha Noi on Saturday said the shifting of foreign investment flows, the country's potential and its accession to many free trade agreements are among the factors that would cause this.

ANZ's chief economist for the Asia-Pacific, Glenn Maguire, said the capital flows have changed with foreign direct investment pulling out of China since the country is moving away from manufacturing and towards the services and consumer sectors.

Viet Nam, which is a member of a slew of major free trade zones, has a large area and cheap labour and is located between the three big countries in Asia (China, India and Indonesia), possesses huge advantages, he said.

He said he believed Viet Nam would become a large economy in ASEAN and a new processing hub of the world in the next 15-20 years.

Nguyen Kim Anh, deputy governor of the State Bank of Viet Nam, concurred with Maguire, saying foreign investment is shifting from China to Viet Nam and other Southeast Asian nations.

The Government has shown great determination in developing the manufacturing and processing sectors and taken measures to attract more investments into them, he said.

Central bank governor Nguyen Van Binh said the manufacturing sector plays an important role in the country's economic growth, adding that the industry has attracted much attention from foreign investors.

Eighty out of 101 countries and territories investing in Viet Nam have a presence in the sector.

The share of manufacturing and processing in total business investment is increasing every year, rising from 50 per cent in 2011 to 72 per cent last year.

The World Bank's Viet Nam country director, Victoria Kwakwa, said Viet Nam should simultaneously increase investment in infrastructure and logistics and improve its human resources and market economy institutions to become a global processing and manufacturing hub.

She said the local content in Vietnamese products remains low, which shows the limited connectivity between Vietnamese businesses and the global value chain as well as the weakness of domestic private businesses.

Yoshihisa Nishimuro, vice president of the Japanese Business Association in Viet Nam, said the Government should have policies tailored specifically for manufacturing and processing to attract investment and more high-quality human resources from abroad.

Nguyen Thien Nhan, president of the Viet Nam Father Land Front Central Committee, stated Viet Nam should make an accurate assessment of global trends and its resources.

The country can attract foreign companies thanks to its cheaper labour costs, but how long it can utilise this advantage should be studied thoroughly, he said.

He also stressed the need to promote the use of technologies. 

Viet Nam crafts fail demand

Vietnamese fine arts and handicrafts were yet to meet the demand of both international visitors and rich local consumers, a Japanese consultant told a conference in Ha Noi on Tuesday.

Citing major drawbacks, Fumiko Kato, a consultant at the Japan International Cooperation Agency told the conference that handicraft products available in the domestic market still had many flaws, such as their bulky shape, which caused travellers problems in carrying them home and the unattractive designs.

In order to further develop the products, he suggested that craft villages should pay attention to diversifying their designs to fit tastes of tourists while maintaining the typical characteristics of domestically-made handicrafts.

During the event, artisan Nguyen Thi Tam, owner of Mao Silk brand in the capital-based Van Phuc Silk Village said that over past years, her facility has focused on renewing designs of fine arts and handicrafts in an attempt to meeting the demands of customers.

According to Tam, it was difficult for handicraft makers to use traditional manufacturing technologies if they wanted to supply large volumes while ensuring quality. However, advanced production machinery and technology might lose the traditional characteristics of handicraft products.

Nguyen Xuan Ba, chairman of Ha Noi Handicraft Associations called for the government's support to handicraft makers who wished to participate at overseas trade promotions and to advertise their brands. They also needed facilitation in surveying foreign markets and studying the tastes of customers there. That could help them provide suitable products for customers.

The full potential of craft villages are still to be tapped, according to the Viet Nam Handicraft Exporting Association (Vietcraft). Each year, the global crafts market traded in about US$100 billion. However, the Vietnamese market share accounted for only 1.5 per cent.

The export value of Vietnamese handicrafts in 2014 reached $1.6 billion, up 8 per cent year-over-year. Of which, exports of rattans touched $530 million, accounting for 33 per cent of the total exports, while the ceramic industry accounted for $480 million, or 30 per cent, and the weaving industry reached $270 million or 17 per cent.

The export value of household and mosaic wood products was pegged at $130 million or 8 per cent and other groups at $190 million or 12 per cent.

Beside to traditional markets such as the European Union, the United States and Japan, craft firms also focused on exploiting new markets in the BRICS group, whose economies were developing rapidly, including Brazil, Russia, and India, in addition to China and South Africa. These markets were expected to offer great potential to Vietnamese craft exporters. 

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