Clothing and fashion exports to the US on the rise

The latest figures from the US Department of Commerce Office of Textiles and Apparel (OTEXA) show the volume of US clothing and fashion imports from all sources grew 4.8% year-on-year in September 2015.

Though down from the 13.5% increase reported for August 2015, imports continued their upward trajectory reaching 2.69 billion square metre equivalents (SME), up from 2.56 billion SME for September of 2014, which is good news for the Vietnam apparel and textile industries.

Despite rising wages and strong currency, China continues to be the largest exporter to the US, as no country can match China in terms of the size of its supply base, range of skills, quality levels, product variety and the completeness of its supply chain.

However, keeping the potential Trans Pacific Partnership (TPP) benefits in mind, should the trade accord materialize, Vietnam’s clothing and textiles industries are increasingly receiving encouraging responses from the western buyers.

Breaking the OTEXA figures down further, shipments from China – the largest supplier of apparel to the US – were up 1.48% to 1.32 billion SME, while nearest rival Vietnam grew at a much faster rate, jumping 10.6% to 281 million SME, compared to September 2014.

Vietnam is clearly benefiting as transnational and domestic producers alike operating within the country’s borders are diversifying their supply chains in a bid to position themselves to take advantage of the opportunities the TPP might open for them.

China anticipating the after-effect of the TPP has already started moving large volume of its investments to Vietnam to boost its garment sector and take advantage of the TPP, should the trade pact become a reality.

At a recent meeting reviewing the results of operations for 2015, the Thai Binh Group (TBS) unveiled plans to increase exports to the US to a new high of 30 million pairs of shoes and 14 million bags.

The TBS group has also increased the production of handbags it makes under the Coach brand.

Coach is a luxury fashion company headquartered in New York City. The company is principally known for accessories and gifts for women and men, including handbags, men's bags, women's and men's small leather goods, footwear and outerwear as well as other fashion accessories.

Over the past year, TBS’s export growth to the US market has surged 18% higher than the average growth rate of other Vietnamese goods into the market spiking to 23 million pairs of shoes and 11.5 million of handbags in 2015.

Nam Long Co, Ltd, which specializes in producing rubber gloves, reports it has just expanded production to an all-time high of 10 million pairs of gloves annually in anticipation of increased demand from the market.

Meanwhile, Le Quang Hung, general director of the Saigon Production and Trade Joint Stock Company (Garmex Sai Gon) said the rate of garment orders by his company from the US market has spiked by 60%.

The US market has captured renewed attention from transnational and domestic businesses operating in Vietnam as the US economy is generally perceived as having started to bounce back following several years of stagnation.

Many leading economists have predicted the US economy is predicted to grow at between 2.2% and 3% in 2015 and at an average of 3% as of 2016, which if true, bodes well for domestic consumption and imports of clothing and fashion items produced in Vietnam.

Dairy firms may not pay extra taxes for AMF imports

Eight dairy firms would not have to pay extra value-added and import taxes totaling hundreds of billions of Vietnam dong for their Anhydrous Milkfat (AMF) imports if the Government okays a Ministry of Finance proposal.

In a document recently sent to the Prime Minister, the ministry admitted the plan to collect the additional value-added and import taxes from importers, producers and traders of AMF is groundless.

The ministry sent the Prime Minister the document after the dairy firms had submitted a petition to the Government leader and the Minister of Finance in late November to oppose the customs decision to tax AMF imports at 15% and collecting an extra VND700 billion from them in the 2010-2015 period.

According to the dairy firms, AMF and Anhydrous Butterfat (ABF) are actually similar and subject to the same import duty of 5%. They have many times worked with the General Department of Customs, which agreed the 5% rate.

The Ministry of Finance has reported to the Government, proposing the 5% tariff for AMF imports.

The ministry said it had consulted the ministries of industry-trade and health, looked into the case and found the basic ingredients of the two products were identical. The two products are only different in peroxide value, input ingredients and the use of additives in the production process.

The Ministry of Finance said the existing regulation on AMF import tax is irrational and not transparent as products with similar ingredients are subject to different tax rates. Besides, the tariff for AMF, which is a production material, is high compared to the rates of 5-7% on imported milk products and the 10% rate on imported yogurt.

Therefore, the ministry sought the Government’s nod to impose a 5% tariff on AMF import as declared by importers. The final decision will rest with the Prime Minister.

Before the Ministry of Finance wrote to the Government, provincial customs departments had already stopped collecting the extra value-added and import taxes on AMF imports as required by the ministry.

Vietnam may sell stakes in some big state firms in 2016: govt official

The Vietnam government could sell stakes in some large state-owned enterprises this year, including network provider Mobifone and brewer Sabeco, a finance ministry official said.

Vietnam's merger and acquisition (M&A) deals hit a record $4 billion last year, encouraged by a turnaround for the US$186 billion economy which as recently as 2011 was fighting a 20-plus percent inflation rate and a banking sector saddled by bad debt.

Mobifone, Vietnam Rubber Group, shipping firm Vinalines and Power General Corporation 3 could have initial public offerings this year, Dang Quyet Tien, deputy director at the finance ministry's department of corporate finance, told Reuters in reply to questions about M&As in the country in 2016.

The government this year could also divest further from beer firms Habeco and Sabeco, Vietnam's top textiles and garment maker Vinatex, flag carrier Vietnam Airlines and Petrolimex, the nation's top oil product importer and distributor, Tien said.

There has also been talk about the sale of the government's US$3.1 billion worth of shares in profitable dairy products maker Vinamilk, held by government investment arm State Capital Investment Corporation (SCIC).

The finance ministry's Tien said 2016 could mark some "divestment in big portfolios of SCIC".

Steady macro economy bodes well for property market

Economists said the domestic real estate market is benefiting from stable macroeconomics.

The average consumer price index gained 0.63% in 2015, the lowest recorded since 2001. Likewise, home loan interest rates stayed low, encouraging the realty market to thrive.

According to the State Bank of Vietnam, credit growth stood at 18% last year, compared to between 12% and 14% recorded for 2012-2014. Despite a slight rise after the US Federal Reserve (FED) deciding to raise interest rates by 0.25 percentage points in early December 2015, Vietnam’s interest rates are projected to be stable throughout 2016.

These factors have brought realty investors a higher profit than the return made by their peers who invested in foreign currencies, gold or bonds.

Experts from the CBRE Vietnam believe the country will continue this growth based on its international connections. The trend has been reflected in increasing overseas capital being channelled into Vietnam, and with the growing number of free trade agreements between Vietnam and foreign partners.

Meanwhile, the newly formed ASEAN Economic Community will contribute to boosting Vietnam’s competitiveness regionally and internationally.

These positive market occurrences will help local property market gain ground, particularly in the housing segment, noted Tran Ngoc Quang, General Secretary of the Vietnam Real Estate Association.

In 2015, Vietnam recorded US$22.7 billion worth of foreign direct investment (FDI), 10.5% of which was poured into real estate. As such, the realty sector was ranked third in terms of FDI with the funds coming to 34 new and 12 existing projects.

Phu Bai Int’l Airport rolls out red carpet for investors

A series of preferential policies and investment incentives will be given to investors who open new flights to Phu Bai international airport, according to the People’s Committee of central Thua Thien-Hue province.

The applicable time is one year since investors open the first flight to the international airport.

The policy is not applied to flights connecting Hanoi, Tan Son Nhat and Phu Bai.

The policies cover aviation transportation agencies with flight schedules in at least six months and two flights per month.

Specifically, the local authorities would allocate expenditures to broadcast air routes, aviation agencies, tours in connection with the fights.  

Passengers of new flights will enjoy 50% fee discounts when visiting Royal Palace, Minh Mang, Khai Dinh and Tu Duc Imperial Tombs in the province.

In addition, investors will get support  at transaction office at No. 1, Pham Ngu Lao Street or in other appropriate places with a total expenditure of less than VND 120 million per year.

Plan designed to boost SMEs growth

The Ministry of Planning and Investment gathered feedback on its draft strategy for small- and medium-sized enterprises (SMEs) development during 2016-2020 at a workshop on January 6.

The ministry forecast there will be 450,000 more enterprises registering to operate, bringing the total firms nationwide to 750,000 in 2020. SMEs are expected to supply jobs fulfilling half of the workforce demand.

At the function, Deputy Minister Dang Huy Dong stressed, through relevant policy and mechanisms, the Government support will encourage innovation among the business community.

He unveiled approximately 3 trillion VND (133.5 million USD) will be spent on specific assistance programmes.

To Hoai Nam , Deputy Chairman of the Vietnam Small-and Medium-Sized Enterprises Association, lauded policies devised to help expand the number of companies within the next five year.

He stressed support programmes should be practical and based on concerted efforts from all agencies involved.

Participants said measures implemented in the past five years have not covered all expectations from businesses, while SMEs themselves have shown weakness in capital, production space, information and human resources.

According to economic experts, SMEs account for 35 percent of overall business investment and generate more than five million jobs. They contribute nearly 50 percent to the nation’s annual growth.-

Local airlines asked to lower airfares

The Civil Aviation Authority of Vietnam (CAAV) has recently asked domestic carriers including Vietnam Airlines, Jetstar Pacific and VietJet Air to draw up airfare discount plans before January 10, 2016.

According to the CAAV, the request was made as Jet A1 fuel price continued to fall, which creates positive impacts on the transport market in general and the aviation market in particular.

The authority recommended Vietnamese airlines continue providing low-cost tickets and offer additional promotional programmes, making air travel easier for customers.

Earlier, the CAAV lowered airfare ceiling for domestic flights by 4 percent in September 2015 after a drop in input fuel costs.

Develop human resources to raise national competitiveness

Improving human resources and revamping the labour structure are strategic solutions to improving the competitiveness of the economy in the context of deeper and wider international integration.

The decision to shift to the market economy in 1986 has been proved to be a sound move by the Party and State to mobilise all resources and potential to develop the economy. Notably, the country’s membership of the World Trade Organisation (WTO) in 2007 served as an important premise for economic growth.

During the past 30 years, a series of market-oriented reforms have been carried out, especially in the agricultural sector, the private economic sector, export and international economic integration. Vietnam’s economy has undergone a transition from self-sufficiency with low income to a multi-sectoral one.

As a result, the domestic labour market has been formed and developed on the right track. The State no longer played the role of directly creating jobs, instead it now creates the necessary environment for job generation while ensuring labourers’ rights through improving the legal system.

Acknowledging the market economy’s risks and ensuring the unemployed find jobs soon, the policy on unemployment insurance has been enforced.

The country has also focused on the labour export market, with several key markets seeing positive growth including Chinese Taiwan and Japan. The quality of Vietnamese workers abroad and the operations of labour export companies have improved.

Policies related to salaries, social and unemployment insurances, labour safety and hygiene, and management of foreign workers in Vietnam have been implemented well. The regional minimum wage in 2015 increased 2.3-fold compared with 2011, while the average monthly income in 2015 also rose 1.8 million VND (79.2 USD) per capita from 2011.

During that time, labour relations have also improved. As of October 2015, the number of strikes had fallen by 25 percent compared to the same period in 2011.

Thanks to new policies and mechanisms on employment and developing the labour market, more than 7.8 million jobs were created throughout the country from 2011-2015, helping reduce the unemployment rate to below 4 percent in urban areas.

Last year, over 1.6 million people found new jobs, of which approximately 115,000 people went abroad to work.

Vocational training has been linked to the demands of the market and businesses, and international integration requirements. The forms of vocational training have been diversified, with priority given to people in rural areas, ethnic minorities and people with disabilities.

In 2015, vocational training was provided for more than 2.1 million people. As of late 2015, the rate of trained workers reached 51.6 percent, up 11.6 percent from 2010.

However, several targets have yet to meet expectations. The proportion of labourers working in the agricultural sector and the non-official sector remains high, accounting for nearly 65 percent of the total.

The number of workers who have taken out social insurance accounts for only 20 percent of the total, posing a challenge for fulfilling the target of 50 percent by 2020.

Integration into ASEAN is also posing challenges for Vietnam as the newly-formed ASEAN Community will allow the free flow of labour among the bloc’s countries.

The Ministry of Labour, Invalids and Social Affairs forecasts that Vietnam will have 59.13 million labourers by 2020 and around 68 million labourers in 2030. In 2020, the rate of trained workers is expected to reach 70 percent.

To improve labour quality and utilise human resources effectively, the ministry will continue to update the legal system and align the domestic labour market with international integration requirements in order to ensure a modern, effective, competitive and equal labour market, thus contributing to fulfilling development targets in the 2011-2020 Socio-Economic Development Strategy.

It will also expand the labour export market, while intensifying management to protect the interests of Vietnamese workers abroad.

Attention will be paid to vocational training for rural workers, and building a vocational education network that matches the country’s socio-economic development strategy and human resources development plans.

HSBC forecasts State’s growth target of 6.7 pct will be achieved

HSBC maintains its 2016 GDP forecast of 6.7 percent year-on-year for Vietnam as the dual engine of domestic demand and exports are expected to stay strong.

The bank’s report “Vietnam at a glance, Great expectations” released on January 5 said Vietnam’s economy “hit a sweet spot” in 2015 with GDP growing 6.7 percent, the fastest pace in eight years while inflation weakening to 0.6 percent.

GDP of last year’s fourth quarter rose by 7.1 percent, putting full-year growth at 6.7 percent, above the government’s target of 6.2 percent.

Domestic demand was the key driver behind the rise, giving a push to service sector. Full-year consumption expanded 9.1 percent year-on-year, surpassing growth of 6.5 percent in 2014.

In contrast to the significant GDP growth, inflation slowed further to 0.6 percent in 2015 due to falling prices of energy, foods and core commodities.

“The Government has set the 2016 growth target at 6.7 percent, which we think will be achieved”, the report stated.

The inflation is projected to rebound in the second half of 2016, urging the State Bank of Vietnam to shift into a tightening mode. The uncertainty around this forecast is quite high as the path of oil prices is difficult to predict.

“Together with base effects from stabilizing oil prices and a likely pick-up in food inflation”, it warned that headline inflation may move up to 3 percent year-on-year in the first half of this year and hit 5.1 percent year-on-year by the end of the second half.

Port operator in HCM City eyes more cargo in 2016

Port operator Sai Gon Newport Corporation hopes to handle 6.06 million TEUs (equivalent to 80.6 million tonnes) of cargo this year, 13 percent higher than last year.

Cat Lai, Phu Huu, and Hiep Phuoc ports are expected to handle 4.4 million TEUs or 86 percent of all cargo passing through Ho Chi Minh City.

The corporation's revenues are expected to top 15.83 trillion VND (703.5 million USD) this year, up from 14.93 trillion VND (664.05 million USD) last year.

Last year cargo volumes via Cat Lai and Hiep Phuoc ports rose by 9.8 percent to 3.95 million TEUs. At Cai Mep- Thi Vai port complex, they grew 11.3 percent to 1.08 million TEUs.

Last year pre-tax profit was 1.82 trillion VND (80.94 million USD).

Wood exports set to climb this year

Vietnam's wood industry is expected to gain a total export value of wood and wooden products of 7.7 billion USD for this year, higher than 7.1 billion USD in 2015.

According to the Vietnam Wood and Forestry Products Association (Viforest), exports of wood and forestry products from Vietnam will have the advantage of starting operations through the ASEAN Economic Community (AEC) and the Trans Pacific Partnership (TPP) deal.

Local enterprises have done good business with ASEAN partners for many years so the AEC will create favourable conditions for them to develop further business incoming time.

Meanwhile, TPP will also usher in opportunities for the domestic wooden product makers to have more legal wooden material for export processing because the TPP member countries have great potential for high quality wooden materials with legal origins, according to Nguyen Ton Quyen, chairman of Viforest.

That will create more opportunities for Vietnamese manufacturers to export their products to the European Union (EU) and the United States (US) where there is a high demand for licensed wooden products.

In 2015, Vietnam achieved total export value of wooden and forestry products at 7.1 billion USD, 8 percent higher than 2014, according to the Ministry of Agriculture and Rural Development.

The three largest export markets of Vietnamese wooden products are the US, Japan and China, accounting for 67 percent of the total export value.

Last year, there were many export markets of Vietnamese wooden products with high export value such as India with a growth rate at 64.45 percent, Hong Kong with rate at 41.95 percent, the US at 17.8 percent and Germany at 10 percent.

Quyen said the export value increase was due to high demand in the world market in 2015, the Thoi bao Kinh doanh newspaper reported.

For instance, the US market needs to import wooden products worth 27 billion USD per year while Vietnam exported wooden products between 1 billion USD and 2 billion USD per year. The EU market has a demand for wooden products worth 85 billion USD but Vietnam's export value to the EU reaches only between 700 million USD and 800 million USD per year.

Moreover, Vietnam's wooden products had high competitive ability and a reputation on the world market. Therefore, Vietnamese enterprises would have numerous opportunities to export their wooden products to those markets, he said.

Bright prospects for 2016 economic growth

Experts have a positive outlook for the economy in 2016, which is the first year in the five-year socio-economic development plan and also marks the start of a new period in the integration process when a series of free trade agreements take effect.

“From 2016, I believe that are bright prospects for our country’s economy,” economist Tran Du Lich told reporters from Vietnam News Agency.

However, a new push will be needed to realise the economic growth target of 6.5-7 percent in 2016, he said.

Positive outcomes from monetary policies have contributed to stabilising the macro economy, and handling bad debts and bankruptcy, he said, noting that more needs to be done to reduce loan interest rates.

It is essential to press ahead with restructuring and increasing management skills to ensure a stable banking system, he added.

He also suggested restructuring the monetary, stock and insurance markets is significant to improving access to capital and easing the pressure on commercial banks.

Regarding fiscal policy, the primary course of action is to balance budget collection and spending, Lich said, highlighting administrative reforms as an effective measure to reduce regular budget expenditure.

Deputy Director of the University of Economics in Ho Chi Minh City , Tran Hoang Ngan, said Vietnam had devoted its efforts to stabilising macro economy, curbing inflation and guaranteeing social welfare between 2011 and 2015.

The current stable macro economy will help the country grow more rapidly in 2016 and the following years, he said, citing that economic growth in 2015 surpassed the National Assembly’s target of 6.2 percent to reach 6.68 percent.

At this pace, the economic growth target of 6.7 percent in 2016 is completely achievable, he said.

Ngan added that improving growth quality, productivity and efficient use of capital usage are the most important things this year.

According to him, over the past five years, Vietnam has laid a firm foundation for market economic institutions, with the promulgation of the Law on Public Investment, Law on Management of State Investment Capital at Enterprises, Law on Enterprises and Law on Investment.

This will be a booster for economic development in the period ahead, he said.

Province pushes joint ventures

The northern coastal province of Quang Ninh has been promoting the public-private partnership (PPP) investment and management model aiming to become a service-industry oriented locality by 2020. Chairman of the provincial People's Committee Nguyen Duc Long said 2015 was a successful year for the PPP model, especially in infrastructure development, transport and tourism projects.

Local authorities have granted an investment license to the joint venture between Cong Thanh Investment and Construction JSC and Phuong Thanh Investment and Construction JSC to build the Ha Long- Van Don expressway and upgrade the Ha Long – Mong Duong section of National Highway 18 under the build-operate-transfer (BOT) model with a total investment of nearly VND14 trillion (US$616 million).

Once completed by the end of 2017, the project will help reduce traffic on National Highway 18 and shorten the distance from Ha Noi to Ha Long City and the Van Don Special Economic Zone, and from Ha Long to the Mong Cai Border Economic Zone.

The chairman said the projects will help complete the infrastructure network in the province and attract more investment, promoting socio-economic development in Quang Ninh and the key northern economic region.

A series of projects have been implemented under the PPP model since late 2014.

The provincial People's Committee said that 25 PPP projects have been conducted on schedule so far.

Vu Van Khanh, Director of the provincial Department of Transport said the transport sector will co-ordinate with relevant sectors to complete the Ha Long-Hai Phong by late 2016.

Quang Ninh has also applied the PPP model to social and working infrastructure, medical and educational establishments and information technology. Local authorities have also asked for approval from the Government to build the Quang Ninh Airport and Van Don-Tien Yen-Mong Cai expressway under the model.

In 2015, the province attracted total investment of VND51 trillion ($2.24 billion), a year-on-year increase of 12.5 per cent.

During the year, it welcomed a number of major projects worth trillions of dong from both domestic and foreign businesses such as the Vincom Centre Ha Long and Vinpearl Ha Long invested by Vingroup, Ha Long Ocean Park invested by Sun Group, and Ha Long Star Tourism Urban and Entertainment Complex Casino invested by real estate developer Nakheel from the United Arab Emirates.

Tuna firms eye 8% export rise

Tuna exports are expected to increase by 8 per cent this year to US$507 million, according to the Viet Nam Association of Seafood Producers and Exporters (Vasep).

Vasep deputy chairman Nguyen Hoai Nam said tuna exports fetched nearly $470 million last year, with fresh and frozen fish accounting for 54 per cent.

The exports went to 105 markets, with the US being the largest buyers, followed by the EU, ASEAN, and Japan, he said.

Tuna exports to the US were worth an estimated $190 million, a year-on-year increase of 8.6 per cent, making Viet Nam one of the biggest exporters to that market.

Exports to ASEAN member countries increased by 24 per cent last year, but exports to the EU and Japan were down by nearly 20 per cent and 10 per cent, respectively.

In the case of Japan, while fresh and frozen tuna shipments were down, export of processed tuna enjoyed good growth.

The depreciation of the yen affected exports to Japan, though volumes recovered at the end of the year, Vasep said. But tuna export revenues have been dropping relentlessly in the past four years, it said.

This was due to falling global prices and increasing competition from the likes of Indonesia, the Philippines and Ecuador.

Global demand for the fish recovered in the third quarter of last year, and is expected to increase further this year, Nam said.

With the free trade agreements the country has signed, like with the Eurasian Economic Union and South Korea, Vietnamese tuna would attract lower import tariffs in those markets compared to its competitors, he said.

An ongoing trial project for tuna fishing, buying, processing, and consumption is expected to help improve quality and competitiveness, he said.

Like in 2014 tuna processors and exporters were unable to source enough fish locally, forcing them to resort to imports.

They spent nearly $216.4 million to import tuna, mainly fresh and frozen, for export processing, an increase of 14 per cent over 2014, the association said, adding the figure is expected to be higher this year.

Thua Thien Hue backs new airline routes

The People's Committee of Thua Thien Hue Province has announced policies supporting airlines for a year after they launch new routes to Phu Bai International Airport in the province.

The provincial authorities will offer financial support to airlines to advertise on the route to Phu Bai Airport, the airlines and visit or tourism programmes related to the new routes.

The province's support policies include reduction in tickets, free buses to transport passengers from the airport to the centre of Hue City and vice versa, and support in opening an office for one airline company.

The carriers will get VND10 million (US$450) as subsidy in office rentals per month in the city.

The airlines' passengers will receive 50 per cent discount in entrance tickets to royal monuments around Hue.

Nguyen Van Cao, the committee's chairman, said the policies will be applicable for a year from the day the first flight lands at the airport for companies direct trading in air transport services and companies leasing air planes to open new routes to the Phu Bai Airport.

The support applies for the new route from Bangkok, Thailand to Hue starting March 18, 2016, but the policies will not be applicable to routes from Ha Noi and HCM City to Hue because those routes already have investors.

This year, the province expects to receive 3.3 million visitors, which include 45 per cent of foreign visitors, according to the provincial Department of Culture, Sport and Tourism .

The airline companies are scheduled to open new routes between Hue and Nha Trang, Can Tho this year, and the number of visitors to Hue by air will increase by 15 per cent to 20 per cent this year, as against last year, the department said.

SMEs offered help, innovation pushed

Small and medium enterprises (SMEs) would receive support to promote their innovations and enhance competitiveness at home and global markets, Deputy Minister of Planning and Investment Dang Huy Dong said.

At a meeting held by the ministry yesterday to discuss ideas on the draft plan for developing SMEs from 2016 to 2020, Dong said that promoting SMEs was indispensable, given their significant roles in the economy and social security they provide.

The SMEs contributed 31 per cent to the budget collection and roughly 50 per cent to the economic growth of the Southeast Asian nation, creating 5 million jobs and accounting for 35 per cent of the business community's total investment.

The 2016-20 plan was the country's third five-year plan for developing SMEs.

Experts at the conference said that support policies for SMEs in the past five years had still failed to meet the demands of enterprises due to the lack of attention and co-ordination among ministries, sectors and localities. In addition, SMEs themselves had limitations such as capital, human resource shortages and low awareness.

As improved product quality and reduced prices were becoming imperative to enhance competitiveness amid the rapid international integration of Viet Nam, Dong said that the plan would encourage innovations by SMEs to create original and high-added-value products with a focus on expanding exports.

It was estimated that a total of VND3 trillion (US$133.34 million) would be provided to SMEs within SME support programmes.

Policies must be consistent, timely and focussed, Dong stressed.

To Hoai Nam, deputy president of the Viet Nam Association of SMEs, said support should be as per the requirement of the firm, and added that the implementation must be consistent among ministries, agencies and localities to ensure that support policies benefit the firms.

Nam said SMEs expected to see a better business environment, human resource training, credit access, and land, in addition to trade promotion, brand building, and reasonable tax rates.

According to the Enterprise Development Agency, an additional 450,000 firms would be established during the 2016-20 period, bringing the total number of firms in operation by 2020 to 750,000. The SMEs were expected to provide jobs for 50 per cent of the country's labour force.

Minister of Planning and Investment Bui Quang Vinh, in a recent interview to Tin Tuc newspaper, said that Viet Nam had not paid adequate attention to implement a strong legal framework for creating favourable conditions for the development of SMEs.

Current support was still not enough, Vinh was quoted as saying. He said that more incentives were needed to develop SMEs into a core force of the economy.

The formulation of a law supporting SMEs was also underway, Vinh said, and added that the ministry proposed to the government that it launch incubators to promote start-ups.

Bac Ninh attracts foreign investors

The northern province of Bac Ninh has become a magnet for foreign investors thanks to its attractive investment environment and infrastructure system with a series of modern industrial zones (IZs).

In the 2011-15 period, the province attracted more than US$12.1 billion in investment, of which foreign direct investment (FDI) accounted for $10.7 billion. In 2015, Bac Ninh led the nation in investment attraction with a total of over $3.7 billion.

Samsung Display Vietnam Co Ltd decided to increase its investment in the Yen Phong Industrial Zone by $3 billion after pouring $1 billion into the zone a year earlier, raising the total capital Samsung Group has so far invested in the province to $6.5 billion.

After 18 years of development, Bac Ninh's IZs have proven themselves as destinations for global economic giants including Pepsico, Samsung, Canon, ABB and Microsoft.

With 573 businesses, the IZs have made great contributions to increasing local industrial production, exports and competitiveness. From 2011-15, enterprises in the zones created an industrial production value of VND356 trillion ($15.8 billion).

The presence of FDI enterprises in the IZs has turned Bac Ninh into a major manufacturer of mobile phones and electrical products for export. In 2015, the province earned $22.5 billion from exports, ranking second in the country after HCM City.

To support stable and long-term development, Bac Ninh has carried out 12 housing projects for workers, providing accommodation for 59,000 people.

The province plans to prioritise attracting investment in high-tech and environmentally friendly industries, which create added value and help save natural resources towards sustainable development.

International compliance key for crafts

International standard compliance played an important role for enterprises in general and handicraft enterprises in particular in the context of integration, an official said at an exporters association meeting yesterday.

Le Ba Ngoc, deputy chairman of the Viet Nam Handicraft Exporters Association (Vietcraft) said the meeting discussed standard compliance for Vietnamese handicraft sector, aiming to direct enterprises to enhance products' quality as well as production scale to meet international standards.

According to a survey participated in by 100 international importers, most of them confirmed they would work with suppliers complying with standard regulations on quality, society, environment and security in the next five years.

Of these, 100 per cent of the importers said that in the next five years at least 30 per cent of their suppliers have to meet the standards compliance.

Meanwhile, 75 per cent of them required at least 50 per cent of suppliers to meet the standards.

Therefore, this was a strategic change which Vietnamese handicraft exporters needed to satisfy to maintain and enhance their competitive position in the international market, he emphasised.

The meeting is part of a project to support enterprises to operate effectively for the country's dynamic and sustainable development.

After a year of implementing the project, the association has conducted many activities to evaluate the standard compliance needs of Vietnamese firms, as well as of international importers to build guiding materials for businesses.

The association also organised training and consulting programmes to raise awareness and support the implementation of standard compliance at businesses.

The project also supports Vietcraft to build sector standards for three groups of bamboo and rattan, ceramics and lacquer.

About 350 enterprises have known about the standards while 25 enterprises were instructed to apply these standards to meet requirements of importers.

Currently, the project is continued to ensure development of new designs conforming to the standards and connecting Vietnamese firms with international clients before proposing appropriate policies suitable with sector standards.

Michael R Digregorio, the representative of the Asia Foundation in Viet Nam, said the project was a three-year programme managed by the foundation and funded by the Australian Government.

The programme supporting Vietcraft was a part of the project because handicraft played an important role in generating jobs and income for the poor in rural and mountainous area, he added.

Ca Mau lacks disease-free shrimp

The southernmost province of Ca Mau, the country's largest shrimp breeding area, faces a shortage of disease-free shrimp fries as it awaits completion of new zones for shrimp-fry breeding farms located near quality water sources.

The province has 875 shrimp-fry nurseries that produce about 9-10 billion fries a year, meeting only 50 per cent of the demand of the province's shrimp farmers, according to the Ca Mau Province Department of Agriculture and Rural Development.

Local farmers have had to buy shrimp fries from other provinces.

Le Van Su, the department director, said several measures had been taken to manage the quality of shrimp fries, but difficulties had occurred.

Officials, for example, were not able to quarantine shrimp fries at their nurseries in other provinces, he said.

The province's shrimp-fry nurseries are small in scale and scattered, causing difficulties for local officials to inspect quality.

In addition, the awareness of shrimp farmers about the quality of shrimp fries is limited, while shrimp fries without any identifiable origin continue to be bred.

More than 12,000ha of shrimp in Ca Mau were infected with disease last year, including white-spotted disease, with a damage rate of 30 -70 per cent, according to the department.

The poor quality of shrimp fries was the main cause of the disease, experts said.

Phan Thong Minh, an experienced shrimp-fry producer in Ngoc Hien District, said the quality of shrimp fries accounted for 70 per cent of the success of shrimp breeding.

To ensure quality shrimp fries, Ca Mau is implementing a plan to zone shrimp-fry nurseries along large rivers which have good water resources and infrastructure.

The province has built the first phase of a large shrimp fry farm project on 55ha in Ngoc Hien District. It can produce about 7 billion shrimp fries a year.

The farm, invested in by the Viet Nam-Australia Co.Ltd, is now in its second phase, with an additional 66ha, which could produce 8 billion shrimp fries a year.

When the farm's first phase operates at full capacity, the province's shrimp fry supply will meet 75 per cent of demand, and with the second phase, 100 per cent of demand.

While waiting for the second phase to be completed and to improve the quality of shrimp fries, the department has given instruction in increasing quality and production efficiency to small shrimp-fry nurseries.

The department has also worked with shrimp-fry management agencies of neighboring provinces to increase the management of shrimp fries.

It has also offered training in identifying quality shrimp fries and publicised the inspection results of shrimp-fry nurseries on the department's website and in mass media.

Ca Mau is also planning a programme to develop disease-free shrimp fry in the 2016-2020 period, targeting about 20 billion disease-free shrimp fries a year and meeting 80 per cent of the demand of the province's shrimp farmers by 2020.

The province has nearly 300,000ha devoted to aquatic cultivation, mostly for shrimp.

The Civil Aviation Authority of Viet Nam yesterday urged domestic airlines to cut fares and provide more special discount programmes because jet fuel prices have dropped.

In documents sent to Vietnam Airlines, Jetstar Pacific and Vietjet, the authority said the Minister of Transport Dinh La Thang recommended The price of Jet A1 fuel had dropped significantly since late last year, positively affecting the air transport market, it said.

The agency asked the airlines to present the price cut and discount schemes by January 10.

Vietnam Airlines has announced that it will have some 800 more flights on domestic and international routes to meet the demand of passengers during the forthcoming Tet holiday.

The national flag carrier will run the additional flights within a month from January 24 on 22 routes that have the strongest air travel demand, with 136,000 seats to be made available.

The routes include those from Ha Noi to HCM City, Nha Trang, Phu Quoc and Da Nang; from HCM City to Da Nang, Hai Phong, Vinh, Hue and Nha Trang; from Can Tho, HCM City to Taiwan's Taipei and Kaohsiung; and from HCM City to Hong Kong and Japan's Fukuoka and Osaka.

VNR to sell all stakes in 19 subsidiaries

The Viet Nam Railways Corporation (VNR) plans to complete divestment in 19 other subsidiaries during the first quarter of this year, Doan Duy Hoach, VNR's deputy general director said at the company's meeting on Tuesday.

VNR reported that it had divested its entire share in seven companies and was still making divestments in four others of the total 27 non-core companies when 2015 drew to a close. After the divestment, VNR gained VND192 billion (US$8.5 million), 2.4 times higher than the investment.

By the end of 2015, VNR successfully equitised 24 of its enterprises, fitting with the plans given by the Ministry of Transport.

Minister of Transport Dinh La Thang, who also attended the meeting recognised the efforts of the railway sector as well as their transformation of SOEs into joint stock companies. However, he required a faster transfer from SOEs to JSC in the future for better business results, saying that if the railways only relies on state funds, it could not modernise the railway system.

Thang said the profit VNR earned was not equal to the potential of the sector in Viet Nam. More importantly, the railway fares were higher than the roadway and budget airlines.

VNR earned total revenue of VND11.662 trillion ($51.81 million), resulting a profit of VND65 billion ($2.88 million) last year.

Tran Ngoc Thanh, VNR's chairman of the board, also identified that the railway industry will face challenges this year from the road transport sector and budget airlines, even though the VNR's transport companies were new in their operations as joint stock companies.

However, he said, VNR was determined to implement all necessary measures to enhance corporate governance, stability and development of enterprises after equitisation, while ensuring the efficiency of rail transport.

Last month, two of the VNR's companies had their intial public offering (IPO) auctions, which are Ha Noi Railway Transport Company Limited and Sai Gon Railways Company Limited. VNR earned nearly VND74.7 billion ($3.3 million) from these two IPO auctions.

These two auctions were among 17 IPO auctions that were organised in December on the Ha Noi and HCM Stock Exchange, which brought nearly VND1.9 trillion ($84.4 million) for the State.

Prudential Vietnam buys 30-year bonds

Prudential Vietnam, a local branch of the UK-based insurance and financial services company Prudential, on Monday bought investment certificates for the first ever issued 30-year bonds, worth VND500 billion (US$22.21 million).

In addition, Prudential committed to investing another VND5.5 trillion ($224.39 million) in bonds of the same term in 2016, bringing the total value of its investment in government bonds to VND6 trillion ($266.6 million) this year.

Last July, Prudential Vietnam spent VND3.2 trillion ($147.5 million) on Vietnamese sovereign bonds that mature in 20 years.

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