Prime Minister meets with Indochina Capital CEO

PM Nguyen Xuan Phuc told Indochina Capital CEO Peter Raymond Ryder at a reception in Hanoi on September 9 that he wishes the US group will continue to grow and attain business successes in Vietnam. 

The PM said Vietnam’s macro-economy is improving, and his Government is committed to creating the best possible conditions for foreign investors to do business in the country. 

He noted that real estate, especially resort property, is currently an important sphere for investment in Vietnam, as the country hopes to attract twice as many as the current number of foreign tourists in the next five years. Hence, demand for hotels and resorts will rise sharply, he said. 

The PM also expressed the belief that the Trans-Pacific Partnership (TPP) agreement will provide the member countries, including Vietnam and the US, with success opportunities. 

For his part, Ryder wished Vietnam prosperity in the time ahead, adding that the group will work to contribute to the country’s development. 

Indochina Capital will expand investment and form joint ventures with other foreign enterprises to build more hotels in big Vietnamese cities, he noted.-VNA

Vietnamese booths open at 13th China-ASEAN Expo

The Vietnamese booths at the 13th China-ASEAN Expo (CAEXPO 2016) in China’s Guangxi opened on September 10 with the attendance of Prime Minister Nguyen Xuan Phuc. 

CAEXPO, hosted annually by China, will take place from September 11-14 in Nanning city, Guangxi, China. It has contributed significantly to the trade exchanges between China and ASEAN as well as among ASEAN nations over the past years. 

This year, Vietnam, as the rotational honorary country at the CAEXPO 2016, will join host China in chairing various activities marking the 25th founding anniversary of the ASEAN-China dialogue relationship. 

Addressing the opening ceremony, PM Phuc hailed the Ministry of Industry and Trade (MoIT)’s thorough preparations, assisting participating Vietnamese enterprises in showcasing their products and joining trade exchange activities. 

The PM expressed his hope that the firms will expand their markets in ASEAN nations and China, thus contributing to domestic production and promoting exports. 

According to the Vietnam Trade Promotion Agency under the MoIT, this year, Vietnam has the biggest number of businesses to CAEXPO among the 10 ASEAN nations, with 237 booths, covering over 5,000 square metres. 

The firms will display their goods with high competitiveness in ASEAN nations and China, including agro-forestry-fishery products, processed food, electric and electronic devices, wood products, handicrafts and consumer goods. 

During the four-day exhibition, the Vietnamese firms will have meetings with leaders and enterprises from other participating nations. 

According to the organisation board of the event, Vietnamese firms’ booths received around 50,000 visitors, with total contract value exceeding 100 million USD at the event last year.

Nearly 140 Vietnamese enterprises attend 13th China – ASEAN Expo

As many as 137 Vietnamese enterprises will attend the 13 th China-ASEAN Expo (CAEXPO 2016) to be opened on September 11 in China’s Nanning city. 

The firms will display their goods, including agro-forestry-fishery products, processed food, electric and electronic devices, wood products, handicrafts and consumer goods at 237 booths, covering over 5,000 square metres. 

In particular, Vietnam, as the honorary country of the event, will run its national booth with the theme “Beautiful City”, introducing the cradle of Vietnamese coffee, Buon Ma Thuot City in the Central Highlands province of Dak Lak. 

Speaking at the press briefing ahead of the event, Deputy Minister of Industry and Trade Do Thang Hai said Vietnam this year continues to send the biggest number of businesses to CAEXPO among the 10 ASEAN nations. 

Many of the participating firms this year are prestigious ones with the plans to expand their foothold in the giant Chinese market, starting from the border areas such as Yunnan and Guangxi, according to Hai. 

As the honorary country at the 13th China-ASEAN Expo (CAEXPO 2016), Vietnam will also join host China in chairing various activities marking the 25th founding anniversary of the ASEAN-China dialogue relationship.

Hanoi seeks to boost investment, trade ties with Moscow

Officials of Hanoi and Moscow are calling on enterprises from the two cities to seize the opportunities expected to be brought by upcoming enforcement of the free trade agreement between Vietnam and the Eurasian Economic Union (EAEU) to which Russia is a member. 

At an investment and trade promotion event held in Moscow on September 9, Nguyen Ngoc Tu, Deputy Director of the Hanoi People’s Committee’s Investment, Trade and Tourism Promotion Centre, said Hanoi welcomes all Russian enterprises to invest in Hanoi and the city will give its best possible support to Russian enterprises. 

On his part, Suren Vardanyan, Vice Chairman of the Russian Chamber of Commerce and Industry (RCCI), said with a population of nearly 20 million, the concentration of 80 percent of the country’s capital, Moscow is a market full of potential, especially for Vietnam’s high quality goods. 

Vardanyan said Moscow has been implementing many infrastructure facilities such as hi-tech and industrial parks to attract small- and medium-sized enterprises where enterprises can enjoy preferential taxes. 

He added that the city has also passed many laws on protecting foreign investors and foreign investment. 

He encouraged Vietnamese enterprises to build hotels in Moscow as Russia will host the World Cup, the world’s biggest football event, in 2018. 

The RCCI said that it plans to work with the Vietnamese side to hold a conference reviewing exchanges and contacts between businesses from the two countries, and create plans for investment and trade promotion activities in 2017.

Best goods from Hanoi on show in Moscow

The best goods from Hanoi are being showcased in Moscow with a view to benefiting both local consumers and Vietnamese businesses which want to seek partnerships in Russia. 

The Hanoi Expo, opened at Hanoi-Moscow Trade Centre on September 9, is part of a Hanoi goods week in Moscow co-organised by Vietnam’s trade office in Russia, Hanoi’s centre for investment, trade and tourism promotion, and Moscow’s chamber of trade and industry. 

Fifty companies from Vietnam have brought to the event hundreds of tonnes of typical commodities such as bamboo and rattan products, traditional toys, nature-origin cosmetics, farm produce, foods, apparel and leather footwear. 

Organisers said the expo is held on the threshold of the Vietnam-Eurasian Economic Union (EAEU) free trade agreement, which will take effect on October 5. The deal will open up a 175-million-strong market for Vietnamese goods. 

At a press conference on the expo, Vietnamese Trade Counsellor Duong Hoang Minh said Vietnam’s exports to Russia increased by 20 percent while its imports from the country rose by 48 percent in the first seven months of 2016. 

Bilateral trade can reach 10 billion USD, or even 15-20 billion USD, by 2020 thanks to the trade pact, he forecasted. 

After the Hanoi Expo concludes on September 18, a similar event will be held at the same venue from October 6-16 to introduce products from Ho Chi Minh City.-VNA

Standard Chartered: Vietnam - an attractive market to investors

About 40 percent of Chinese investors will select Vietnam as their next location if they plan to move investment out of China, said a survey of the Standard Chartered Bank. 

The bank's chief economist for Asia David Mann said Vietnam's policies which opened the door for more foreign direct investment (FDI) flows to enter its market have made the country an attractive market in Asia.

According to the economist, Vietnam’s administrative reform and tariff removal, and the country’s participation in regional trade agreements, help attract more foreign investors. 

In its recent survey, Grant Thornton Vietnam also said that domestic and foreign investors are keen on the Vietnamese market and have positive outlook about the country’s economy. 

Vietnam is attractive because of its abundant source of labour, low operational cost, diverse population structure and stable political environment.

According to ASEAN statistics, FDI into the region reduced by 8 percent to 120 billion USD in 2015, but the investment flows into Cambodia, Laos, Vietnam and Myanmar rose 38 percent to 17.4 billion USD.

Sai Gon – Hanoi Bank launches subsidiary in Cambodia

The Sai Gon – Hanoi Bank (SHB) opened its wholly-owned subsidiary in the Cambodian capital, Phnom Penh, on September 9. 

The SHB Cambodia Bank has a charter capital of 50 million USD, and is the second subsidiary of SHB in Indochina. The first one locates in Laos.

The bank was named the best foreign bank in Cambodia in 2016 by the International Data Group (IDG) and the National Bank of Cambodia. 

Addressing the inauguration ceremony in Phnom Penh on September 9, Governor of the National Bank of Cambodia Chea Chanto acknowledged the contributions that Cambodia-based Vietnamese enterprises, including SHB, have made to the country. 

On the occasion, the SHB’s management presented 20,000 USD to the Cambodia Fund for the Poor.-

Vietnam seeks to lure more North American tourists

Along with Vietnam’s top tourist markets of Northeast Asia and ASEAN, North America has become an important market of Vietnamese travel companies in recent years with abundant untapped potential. 

About 600,000 out of total 7.9 million foreign tourists to Vietnam in 2015 were from the US and Canada, accounting for 8 percent, noted Ha Van Sieu, deputy head of the Vietnam National Administration of Tourism (VNAT) in Ho Chi Minh City during a conference on North American markets on September 9. 

Despite the modest figure, the North American market has seen a speedy growth at 10 percent annually in recent years, he said, noting that the rise trend will continue in the future. 

Meanwhile Vu Nam, Deputy Head of the VNAT’s Market Department, said that the number of outbound tourists from the US and Canada has soared and is likely keeping to grow. 

At the same time, Vietnam and the two countries have shared growing diplomatic and economic partnership. The joining of the Trans-Pacific Partnership will also help boost the countries’ economic and tourism cooperation, he said. 

Nam also expressed his belief that the Vietnamese community in the US and Canada will also contribute to raising the number of North American tourists to Vietnam in the coming time. 

He held that cultural and historical exploring tours will continue to be favored by North American tourists in Vietnam. 

Oliver Martin, a Canadian tourism expert, said Vietnamese travel agents should promoting the culture of diverse destinations rather than focusing only on famous places to attract tourists from Canada and the US. 

Along with investing in improving services for long-staying tourists, they should also diversify tourism products, especially for young visitors aging between 18-25, he added.

Investment promotion conference held in US

Minister of Planning and Investment Nguyen Chi Dung has co-chaired an investment promotion conference in the US within the framework of his working visit to the country from September 6.

The event, jointly held by the US-ASEAN Business Council, the Vietnamese Embassy in the US and the Ministry of Planning and Investment, attracted the participation of numerous US officials, scholars and policy-makers, representatives from ASEAN countries, and US enterprises, including such renowned groups as Coca-Cola, Caterpillar, Mastercard, ExxonMobil, and United Technologies Corporation. 

Speaking at the event, Minister Dung told participants that Vietnam is building a constructive government which considers the business community a driving force for development. 

The country is also determined to step up economic restructuring in line with the growth model reform in order to increase the productivity, efficiency and competitiveness of the economy, he added. 

The minister affirmed that the pending Trans-Pacific Partnership (TPP) agreement which both Vietnam and the US are members will bring about great opportunities for their enterprises to boost cooperation so as to develop the Vietnam-US relations further. 

Vietnam’s participation in the ASEAN Economic Community, the TPP and other new-generation free trade agreements creates no differences for business and investment in the country. 

This helps connect a 92-million-people market with an over-600-million-people market of the region and the world market, he noted. 

Vietnam’s law system has been also improved, thus helping create favourable conditions for foreign investors, including those from the US, to do long-term business in the country. 

Although the process of ratification and approval of the TPP can face difficulties, Vietnam will be consistent in its renewal and integration and keep its door open to US investors and enterprises, he confirmed. 

Earlier, Minister Dung had a working session with US Trade Representative Michael Froman, during which they gave updates on the ratification process of the TPP in each country. 

Froman said that the Obama Government will continue urging the Parliament’s approval of the agreement in the time ahead.

Most consumers wary about making complaints 

Cumbersome procedures continue to discourage customers from lodging official complaints about poor quality products or services, experts said at a conference in Da Nang on September 8.

Phan The Thang, an official with the Viet Nam Competition Authority under the Ministry of Trade and Industry, said a recent survey found 56 per cent of consumers saying they had bought or used poor quality products and experienced poor service in the medical, healthcare, fashion and hospitality industries.

Of these, 44 per cent said they chose to remain silent, and 22 per cent were wary of complicated procedures while petitioning authorities.

The survey, done in March and April this year, covered 3,000 consumers in 12 provinces and cities across the country.

Thirty-nine per cent of the respondents said they contacted the media for help when their consumer rights were violated, and just 20 per cent approached courts or other arbitrators.

"While 75 per cent of the respondents said they were aware of consumer rights and laws on consumer protection, 43 per cent said State agencies or local agencies tasked with consumer protection provided poor responses to their complaints," Thang said.

Despite improvements over the last several years, 48 per cent still complained of complicated procedures.

Thang said many people complained that the consumer rights protection offices were usually located in cities and people in rural or remote areas had no access to their services.

Dr. Le Khoi, chief of Research and Market Forecast Department with the Viet Nam Institute of Trade, said enforcement mechanisms for the Law on Protection of Consumer Rights were inadequate.

"There are different challenges in supporting and protecting consumers from violations. Most Vietnamese consumers do not take invoices or bills from sellers, and they do not complain to the Consumers Right Protection Office even in risky situations," Khoi told Viet Nam News.

He said unclear address of businesses, unknown brands and the purchase of products without Certificate of Origin (CO) were factors that increased the risk for consumers.

"We can only raise awareness for consumers via media, informing them about legitimate and reliable businesses. All businesses are required to register their brands and products, and to ensure their quality. Consumers are at risk if they buy from open free markets or remote areas…," Khoi said.

He said the Viet Nam Competition Authority (VCA) had handled more than 6,000 complaints in 2010-15, in comparison to an average of 26 complaints before 2010. About 51 per cent of the complaints were dealt with, he added.

The VCA has launched a hotline at 1800 6838 to receive consumer complaint, and plans to establish switchboard services in 15 provinces and cities.

In 2012, the Viet Nam Standards and Consumers' Association (VINASTAS) honoured the Viet Nam Diary Products Company (Vinamilk) as the first company recognised as a "reliable business for consumers."

VINASTAS is also considering recognising other brands like food processor Vissan, Ha Noi Beer, taxi group Mai Linh and consumer goods producer Unilever Viet Nam.

HCMC receives $2.9b in remittance in 8 months

Remittances to HCM City in the first eight months of this year rose nearly 6 per cent year-on-year to reach US$2.9 billion.

State Bank of Viet Nam's HCM City branch Deputy Director Nguyen Hoang Minh said remittances rose 14 per cent compared with last month, adding that the money was mainly received from the United States and the European Union.

Minh said the remittances were mainly used for production and businesses.

With the rising rate, Minh expected the city would receive $5.7 billion-$5.8 billion in remittances this year, up 5.6 per cent against last year.

Remittances to HCM City, among the localities receiving the largest volume of remittances nationwide, have increased some 10 to 12 per cent on average in the past five years.

Remittances to the city last year reached $5.5 billion, exceeding the $5.2 billion received in 2014. More than 70.8 per cent of the remittance value flowed into production and businesses, while some 21.6 per cent went into real estate and seven per cent went to relatives. 

Novaland sets up agency to help customers buy, lease property

Giant housing developer Novaland Group has set up a brokerage service called Novaland Agent to help people sell or lease housing they have bought from the company.

Novaland said the service is aimed at ensuring value and liquidity for their customers' properties and also helping them save time.

Customers can contact www.novalandagent.com.vn and a hotline at 0997 79 79 79 to buy and sell and another at 0914 422 665 to lease.

The company said the brokerage office opens today (Saturday) at 65 Nguyen Du, District 1, HCM City.

Lucky customers stand to win gifts in September and October.

Novaland has built over 35 projects with many kinds of products like apartments, office-tel, houses and villas ranging from the mid- to high-end segments. 

SCIC to sell its entire stake in VSH

State Capital Investment Corporation (SCIC) announced it was selling its entire stake of 49.5 million shares of the Vinh Son-Song Hinh Hydropower plant (VSH).

The shares, equivalent to 24 per cent of the charter capital, were offered at the starting price of VND18,300 (US$0.81) per share.

If the sale is successful, SCIC will earn a minimum of VND905 billion.

Based in central Quy Nhon City, the hydropower plant, with charter capital of over VND2 trillion, produces and trades electricity, provides management, operation and maintenance services to plants, provides consultancy on project management, supervises hydropower project construction and trades material and equipment for the hydropower sector.

Listed since 2006 on the HCM Stock Exchange, its shares rose more than 17 per cent over the past month to settle at VND16,900 per share on September 9 on the HCM Stock Exchange. 

Samsung seek VN firms for supply chain

Samsung Viet Nam Co Ltd on Thursday opened an exhibit at the Viet Nam Supporting Industry Expo 2016 (VSI 2016) held at Sai Gon Exhibition and Conference Centre.

The theme of the exhibit is "Connecting Vietnamese businesses to the global chain of supply." 

Following the supporting industry exhibition, which Samsung joint-hosted with the Ministry of Industry and Trade in June in Ha Noi for its third consecutive year since 2014, this is the first time Samsung has participated in an exhibit in HCM City.

Covering an area of 200sq.m – and having the largest of the 250 booths at the exhibition, Samsung's booth is divided into three main areas, including a display area for parts suppliers with an appearance from 8 first-grade suppliers, an area introducing three of its best suppliers and an area displaying Samsung HCM City CE Complex (SEHC) products, such as televisions, vacumm cleaners, washers and refridgerators.

Samsung Viet Nam hoped to contribute to the country's development of supporting industries, especially in the south of Việt Nam, where the electronics industry has been showing signs of strong growth.

Samsung plans to spend a fair amount of time interacting with and interviewing Vietnamese businesses wishing to integrate themselves into its supply chain. As planned, Samsung will invite some 200 Vietnamese businesses to the expo and expects to interview officials from some 70 businesses. Target businesses participating will be those primarily manufacturing electronics which meet its demands for the SEHC factory. This is an opportunity for businesses to directly share their needs, seek consultation, learn, and create opportunities for themselves.

Samsung will also invite 11 suppliers to visit the SEHC factory to exchange experience in production management and product quality between Samsung and their suppliers. This is a chance for Vietnamese enterprises to improve themselves in learning to meet the standards used in the global supply chain.

With the motto "Samsung Can Only Grow if the Suppliers Grow," Samsung will create an open field of competition for the suppliers, while providing them opportunities to enter Samsung's supply chain. Recently, with the rising competitiveness in supporting industry projects, which Samsung has been doing from September 2015 until today, nine of Viet Nam's supporting industry companies have received Samsung's assistance for 3 months in improving their production process, as well as learning about the standards of supplies for Samsung's factories in Viet Nam.

 "With hopes of long term sustainable growth in Viet Nam, Samsung is always co-operating with the Government in developing local supporting industries to ensure global market competitiveness through practical activities. We hope to continue creating more opportunities for businesses joining in Samsung's supply chain, ultimately helping us to raise our global competitiveness, as well as our long-term development in Viet Nam," said Lee Sang Soo, SEHC's president.

Currently, Vietnamese businesses joining Samsung's supply chain have tripled, compared to 2015. Similarly, Samsung went from having four tier 1 Vietnamese vendors to 12 currently. There are also 178 other Vietnamese enterprises acting as tier 2 vendors. Accordingly, there are now 190 Vietnamese enterprises participating in Samsung's supply chain. Specifically, Vietnamese enterprises in Samsung Electronics Viet Nam in the northern Thai Nguyen Province supply chain, which accounts for six tier 1 suppliers and 155 tier 2 suppliers. The corresponding numbers are six tier 1 suppliers and 23 tier 2 suppliers in SEHC.

Through the activities at this exhibition, Samsung will continue looking for suppliers to add to their supply chain. This effort is a testament to Samsung's hopes of developing, as well as maintaining long-term friendships and partnerships with Viet Nam.

MoT wants to tighten import of road vehicles

The Ministry of Transport (MoT) has distributed a draft circular on examining technology, safety, quality, and environmental protection of import road vehicles to get suggestions from relevant ministries and agencies.

According to the Vietnam Chamber of Commerce and Industry (VCCI), the draft circular's regulations will affect road vehicles, similar to the Ministry of Industry and Trade (MoIT)'s Circular No. 20/2011/TT-BCT on procedures for importers of passenger cars with nine seats or less, which was abrogated last month after it reportedly discouraged many small and medium car importers since coming into effect on June 26, 2011.

In a document in response to the MoT's draft circular, VCCI said it was very concerned about a decree regulation that required car importers to have the original certificate of quality for imported road vehicles or a roll-out quality certification.

VCCI said the regulation would cause difficulties, especially for those who imported cars through distributors, since they would be unable to get the original certificates.

"The regulation creates conditions for businesses who directly import cars from the automakers, but rejects those who import cars through distributors. This regulation is not different from the MoIT's Circular 20 that required import procedures designated or authorised by official carmakers," the VCCI stated in its document.

VCCI said the Circular 20 regulations or the MoT's draft decree regulation had handed over a ‘too large' business right for the foreign automakers but ignored the right and interests of the Vietnamese consumers.

Meanwhile, quality examination of imported cars in Viet Nam is being strictly undertaken. If a vehicle does not have the original certificate of quality or the roll-out quality certification of the automakers, it will be examined for quality by the Vietnam Register (VR). If it passes the VR's examination, it meets the standards of technology, safety and environmental protection in accordance with Vietnamese laws.

There is no reason to stop a quality vehicle from running in the country, VCCI said.

VCCI said the requirement of an original certificate of quality or roll-out quality certification of the automakers meant that one vehicle had to be examined twice, including a VR examination, which was unnecessary and resulted in more expenses for society.

These expenses will be transferred to the selling price and customers will have to bear them, VCCI added.

In a document sent to the MoT and the government, the Small and Medium Automobile Importers' Association shared VCCI's opinion.

The association said the Government's resolutions 19 and 35 aimed at improving the investment environment, trade and support of small and medium enterprises to develop business. Administrative procedures were obstacles that needed to be removed to help businesses develop sustainably.

The association said the MoT's draft circular showed an increase in administrative processes, requiring the completion of many procedures for one vehicle. It asked the ministry to consider their proposals thoroughly before officially issuing the circular, not only to ensure the quality of imported road vehicles, but also to create favourable conditions for small and medium enterprises to join the circle with other businesses.

Meanwhile, the MoT's draft circular received support from the MoIT, which said it was necessary and in accordance with the regulations of the Law on Environmental Protection in 2014.

The MoIT proposed to supplement one more regulation on requiring car importers to obtain a certification of technology, safety, quality and environmental protection or an equivalent paper. It said if there was no such certification, the procedures to certify the quality of imported cars would be similar to the procedures for locally assembled cars, leading to unfair competition with local automakers and assemblers because they had already invested in workshops and facilities.

Cashew nut exports on the rise

Vietnam shipped 34,000 tons of cashew nuts abroad in August to earn US$277 million, bringing the total export volume in eight months to 225,000 tons with a value of US$1.76 billion, up 5% in volume and 12.7% in value against the same period last year.

According to the Ministry of Agriculture and Rural Development (MARD), cashew nuts were exported during the first seven months of this year at an average price of US$7,746 per ton, up 6.5% over the same period last year.

The US, Netherlands and China remained the three largest importers of Vietnam cashew nuts, accounting for 33.4%, 13.5% and 13.1% of the total export value respectively.

Markets with high import growth in the period included Israel (39.3%), the UK (24.2%), China (23.1%), the Netherlands (20.2%), Germany (19.4%) and Italy (19.3%).

MARD also reported that Vietnam imported 156,000 tons of raw cashew nuts worth US$239 million in August. Totally, 725,000 tons of raw cashew nuts were imported in eight months, which cost US$842 million, up 3.7% in volume but down 5.4% in value.

Drought devastates local shrimp industry

This year’s prolonged drought and saltwater intrusion in the Mekong Delta has destroyed more than 81,000 hectares of prime shrimp breeding areas in eight provinces, says the Ministry of Agriculture and Rural Development (Mard).

Shrimp farmers in Ca Mau Province in the very south of the country, where most of the big farms are situated, have suffered the biggest losses, said Minister Nguyen Xuan Cuong of Mard at a recent conference in Hanoi.

Followed by shrimpers in the provinces of Kien Giang, Bac Lieu and Soc Trang in descending order of magnitude of the damages.

Losses in Ca Mau Province alone, he said, have been estimated at a staggering US$11.6 million (VND 260 billion), principally caused by the high salinity brought about by the prolonged drought.

Nguyen Tien Hai, chair of the Ca Mau People’s Committee, in turn reported that he had instructed departments and agencies in the province to focus all their effort on measures to combat the drought and saltwater intrusion.

To date, the province had spent about US$803,000 reconfiguring the irrigation networks to stave off saltwater intrusion, which has been paid for out of funds from a EU project to upgrade shrimp rearing methods in the Mekong Delta.

He said the Project, which has a total budget of US$2.8 million, aims to promote sustainable aquaculture and poverty reduction in the three Mekong Delta provinces of Soc Trang, Bac Lieu and Ca Mau.

It was established by the International Collaborating Centre for Aquaculture and Fisheries Sustainability and Oxfam for the benefit of smallholder processors, shrimp producers and local residents.

Alejandro Montalban, Minister Counsellor of the Delegation of the EU to Vietnam, pointed out that one of the most pressing problems facing shrimpers in the area hardest hit by the drought is access to credit and working capital loans.

The shrimp farmers, he noted, severely need access to short-term financing to have money to tide them over until next harvest and restock as this year’s drought has wiped them out.

Nguyen Le Hoa, deputy country director of Oxfam in Vietnam, estimated that the drought had destroyed the livelihoods of about one million shrimp farmers in Can Tho and three million nationwide.

Ngo Cong Luan, director of an Agriculture and Fisheries Cooperative in Soc Trang Province, ironically noted his members had also suffered increased losses following their implementation of Vietnamese Good Agriculture Practices (VietGAP).

It costs more to produce shrimp in compliance with VietGAP, but due to corruption in the supply chain buyers are unwilling to pay more for quality shrimp.  Dishonest buyers are already pawning off low quality shrimp as high quality.

Consequently, said Mr Luan, they don’t care – as they are already cheating their customers – and paying more for high quality shrimp would only cost them more money and reduce their profits.

As a result of the devastation and losses brought about by the drought, Mard has lowered its forecast for gross export revenue for farm raised shrimp exports by US$300 million to US$3 billion for 2016.

Foreign firms make their mark on Vietnam's printing and packaging industries

Foreign enterprises are showing a growing interest in Vietnam’s printing and packaging companies, shown by recent mergers and acquisitions and direct investments in new plants.

The printing and packagings sectors have posted average annual growth of over 10%, triggering a swarm of foreign investors to scour for investment opportunities in the field, according to the Ministry of Industry and Trade’s newspaper.

The above statement was made by Nguyen Van Dong, chairman of the Vietnam Printing Association (VPA), at the 16th Vietnam International Printing & Packaging and Food Processing Industry Exhibition that opened on September 6 in Ho Chi Minh City.

Dong highlighted that the local printing market is steadily growing with nearly 2,000 printing enterprises nationwide and around 6,000 people working in this sector. Industrial production expansion has also contributed to the growth of industrial packaging and label printing, Dong said.

The industry's revenue reached VND60 trillion (nearly US$2.7 billion) in 2015 and is expected to increase this year.

The latest foreign player to make a move in Vietnam was Korea's Gift by Design, which plans to open a factory in the central province of Quang Nam.

Well-known local printing and packaging companies have also been swallowed by M&As involving foreign investors.

Tin Thanh Packaging JSC is a typical example. The company has been operating for more than 15 years with total revenue of over VND1 trillion (nearly US$45 million), but still chose to sell an 80 percent stake to Thailand’s SCG group.

Others less successful enterprises are looking to find foreign partners to maintain operations and restructure, and Vien Dong Printing JSC and Hoang Ha Printing JSC have already been bought out by European enterprises.

The VPA forecasts that this is just the start of the foreign investment wave in Vietnam's printing and packaging industries.

Hanoi goods on display in Moscow

The Hanoi Goods Week in Moscow - 2016 was promoted at a press conference in the capital city of Russia on September 7 by the Hanoi Investment, Trade and Tourism Promotion Centre (HITTPC).

This is the first time Hanoi introduces its products and services to Russian customers.

Lai Ngoc Doan from the Vietnam Embassy in Russia said the organizers hope that the event will help Russian customers find goods in line with their demands and Russian businesses grasp cooperation opportunities with Vietnamese partners.

The Free Trade Agreement (FTA) between Vietnam and the Eurasian Economic Union (EEU) which comes into effect on October 5 will offer an excellent chance for businesses from both sides to strengthen trade ties, Mr Doan said.

HITTPC Vice Director Nguyen Ngoc Tu highlighted the strength of leading businesses from Hanoi and Vietnam and goods on display at the week like heavy industrial products, processing food, clothes, and garment.

Iuri Morozov from the Moscow Chamber of Commerce and Industry (MCCI) said Russian customers are interested in Vietnam goods.

He added that the MCCI has coordinated with Vietnam businesses in Russia to hold conferences to link businesses between the two countries and between Hanoi and Moscow. Russian businesses showed their special attention to set up ties with Vietnamese partners.

He revealed that many businesses from Moscow and neighbouring provinces like Tver, Yaroslav have registered to attend a trade conference within the framework of the event.

Debated Hoa Sen Group steel project under tighter scrutiny than Formosa’s

Hoa Sen Group (HSG)’s $10.6-billion industrial zone, steel manufacturing and port complex set to be built in the central province of Ninh Thuan will have to comply with more stringent rules than Taiwanese company Formosa’s complex in Ha Tinh.

Le Phuoc Vu, Hoa Sen Group’s CEO, promised to take personal responsibility if the upcoming steel complex pollutes. Photo taken at the Investment Promotion Conference in Ninh Thuan province on August 27.

Speaking to VIR on the side-line of the recent conference organised by the Japan International Cooperation Agency (JICA) on the development of the automotive and auto parts industry in Vietnam, director of the Department of Heavy Industry under the Ministry of Industry and Trade (MoIT) Truong Thanh Hoai said that the government has learned many lessons from the Formosa scandal.

To avoid another potential fiasco, for big projects like that of HSG, instead of only making comments and recommendations, the ministries in charge are going to evaluate the investor’s basic design and the investor will have to make adjustments according to these recommendations.

“Our laws on construction aimed to facilitate investment. The ministries only made comments which the investor was free to follow or ignore, in full knowledge that they could be held responsible before the law for the decision. It was more difficult to supervise that way. 

Now, the regulations on the management of investment and construction as well as on environment protection are tighter, so we are going to be stricter in evaluating the environmental impacts of a project, its pilot operation, or, later on, the official operation,” Hoai said.

Many experts have voiced concerns over HSG’s project. Nguyen Mai, chairman of the Vietnam Association of Foreign Invested Enterprises (VAFIE), said that there is a global surplus of steel already, and Vietnam should instead concentrate on developing other industries that it has a comparative advantage in.

Former advisor to the prime minister, Pham Chi Lan agreed, adding that she was concerned about whether Vietnamese steel can compete with imports from China. She also questioned whether calculations on economic growth relying on a steel-oriented scenario are correct.

The MoIT has approved the project in the master plan on growing the country’s steel industry. “We think that it is necessary to have a large scale steel complex,” said Hoai “because most Vietnamese steel producers nowadays operate on a small scale and it would be difficult for them to lower production costs with an output of a few hundred thousand tonnes per year.

Moreover, they mostly produce construction steel, and Vietnam still has to import a lot of structural steel and steel for manufacturing. Thus, we encourage investment in the production of these product types.”

Central Group pays transfer tax for store chain acquisition

Thailand’s Central Group is required to pay asset transfer tax for a deal to acquire the whole stake of France’s Casino Group in Big C Vietnam, instead of the seller, but experts said this would not leave big negative impact on the Thai firm. 

A lawyer familiar with the matter told the Daily that the acquisition deal was inked outside Vietnam and Big C Vietnam as a legal entity remained unchanged, so the seller does not have to pay corporate income tax for the stake sale. But the buyer and seller can enter into an agreement to share risks and ensure smooth operation of Big C Vietnam after the acquisition. 

Another source told the Daily that Central Group would agree to pay the transfer tax and take risks to win the acquisition deal over its rivals. 

A source from the Ministry of Finance was cited by Tuoi Tre (Youth) newspaper as saying that Big C Vietnam had paid all the capital transfer tax of over VND2.03 trillion for the acquisition deal, which was struck by Central Retail and Casino Group at the end of April.  

Earlier, a representative of the Big C supermarket chain in Vietnam told the Daily that Central Retail under Thailand’s Central Group filed for the tax. The move was made after the General Department of Taxation requested the parties involved in the Big C Vietnam transfer deal to quickly fulfill tax obligations, or the new owner of Big C Vietnam would not be recognized.

The acquisition deal is considered one of the biggest merger and acquisition (M&A) deals in Vietnam.   

Speaking at the M&A Vietnam Forum 2016 on August 18, Nguyen Van Phung of the General Department of Taxation said investors may receive wrongful information about Vietnam’s tax policy from consulting firms in some M&A deals. 

The head of the department’s tax management division for big enterprises said consulting firms rely on ambiguous wording in decrees and circulars to give advice to customers. However, he noted that though acquisition deals are signed outside Vietnam, their incomes generate in Vietnam so they are subject to Vietnam’s taxes.

Experts call for drastic changes to drive growth

Experts and scholars are of the opinion that Vietnam should make bold changes to fuel economic growth and catch up with other regional economies as it is running out of ammo for further growth.

Vietnam is lagging far behind many other countries, Deputy Minister of Planning and Investment Dao Quang Thu said at a workshop held in Hanoi last week to collect comments on a draft scheme to improve the country’s competitiveness.

The ministry has assigned the Central Institute for Economic Management (CIEM) to draw up the scheme, which will be submitted to the Politburo for consideration.

Agriculture, which was a key contributor to gross domestic product (GDP) growth in previous years, is coping with more challenges. Economic expert Pham Chi Lan said the annual flooding season has vanished in the Mekong Delta over the past years because more hydropower dams have been built in the upper reaches of the Mekong River.

The impact of drought and saltwater intrusion has worsened, taking a heavy toll on the agricultural sector, Lan said. Lower-than-usual water levels in the Red River have wreaked havoc on farming in the north.

Lan called for a new approach to agricultural development in the Mekong Delta as the current one has not produced as good results as expected.   

However, it is difficult to adopt new ways to develop the agricultural sector as enterprises cannot find enough land for large-scale farming, said Nguyen Do Anh Tuan, director of the Institute of Policy and Strategy for Agriculture and Rural Development.  

Tuan pointed out many bottlenecks in the agricultural sector are caused by the prevailing regulations, including a rule that requires people to have a permanent residence in a commune so that they are permitted to transfer agricultural land in the commune.

Le Xuan Ba, former president of CIEM, underscored the urgency of reducing State-paid staff to ease financial pressure on the economy.

Meanwhile, expert Vo Dai Luoc said more talented people have left government agencies.

CIEM president Nguyen Dinh Cung warned of slowing growth in the past decade when presenting the draft scheme.“We’re still hesitant to boost reforms and shift to a market economy.”

Cung said institutions for a market economy are not enough while resources are inefficiently allocated, creating fertile ground for corruption.

He attributed the inefficiency of administrative reform and increasing budget spending to slow reform.

Vinatex’s new garment factory to produce quality products for export

Vietnam National Textile and Garment Group (Vinatex) has put into operation a garment factory in Hoang Mai town, Nghe An province.

The Vinatex Hoang Mai garment factory project, approved by the provincial People’s Committee in 2014 was realised on an area of nearly 32,000sq.m with an investment of around US$5.5 million.

In the initial period, the factory will generate around 900 jobs and help the province develop trade services and infrastructure, improve income, accelerate social welfare and reduce poverty sustainably.

It is expected to produce nearly 11 million high quality knitwear products with input materials supplied by Dong Xuan Knitwear Ltd Company and other domestic units. Its key products like underwear for men and women will be exported to Japan.

Retail giant joins forces with local farmers to grow safe vegetables

Vingroup, the leading property developer in Vietnam, has decided to fund 1,000 farmers across the country to supply safe agricultural products for the domestic market.

The real estate conglomerate will support farmers through its agricultural business unit VinEco which was founded last year with total capital of VND2 trillion (US$89.7 million). 

In the first year, Vingroup said it will invest a total VND300 billion (US$13 million) in hands-on training for farmers on how to grow safe crops by using advanced techniques.

The goal is to produce safe vegetables and fruits in compliance with the VietGAP and GlobalGap farming standards to ensure food safety, according to an online statement released by the company.

All farmers who have at least one hectare (2.47 acres) of farm land and are committed to growing clean produce will be eligible to get financial support from Vingroup.

The company has also pledged to help farmers to distribute their products through its Vinmart supermarket and Vinmart+ convenience stores.

Under the program, Vingroup will apply the QR code to trace the origin of its produce which includes the exact location of the land plot where it was planted, nutritional information and the source producers.

This is to reassure consumers about food safety, Vingroup's vice chairman Le Khac Hiep said, and to help Vietnamese farmers get access to technology to increase quality and productivity.

Previously, Vingroup decided to allow local fresh foodstuff suppliers to stack and sell their products at its 700 mini-marts throughout the country without paying a single cent of rebate for a year.

Vingroup has shown ambition to tap into the agriculture business by setting up large-scale farms for fruits, vegetables and other agricultural products.

Imports of fruits, vegetables in 8 months surge 37%

Imports of fruits and vegetables reached US$420.74 million in the first eight months of this year, a year on year increase of 37%, according to the Ministry of Agriculture and Rural Development.

Thailand surpassed China to become the biggest fruit, vegetable exporter to Vietnam, with nearly 38.7 percent of total import value. 

The buying of fruits and vegetables from Thailand in the first seven months hit US$163 million, an increase of more than 70 percent compared to the same period last year. 

Import value of agricultural products from China reached US$102.52 million, up nearly 30 percent, accounting for 24.4 percent of total import value.

The purchase of fruits and vegetables from the US reached US$41.2 million, Australia US$24.6 million, Myanmar US$18.5 million, New Zealand US$13.8 million, and South Africa US$7.6 million.

Vietnam to shut Nam Con Son gas pipeline for maintenance

Vietnam's Nam Con Son gas pipeline will be shut from September 9 for periodic maintenance, cutting natural gas supplies to power plants responsible for 13.5 percent of the country's electricity output, a company official said on September 6.

"The pipeline will undergo the maintenance, which is conducted every five years, so it will be closed totally between September 9 to 14," said an official of the Nam Con Son Pipeline Co, which is 51% owned by Petrovietnam Gas.

Maintenance at gas suppliers' exploration areas in the Nam Con Son basin started on September 5 for completion on September 19, the official said.

As a result, gas supply has been reduced to around 11.5 million cubic metres (cbm) per day, from 21.5 million cbm previously, state utility Vietnam Electricity group said in a separate statement.

Electricity transmission had been increased from the northern region to the southern region, while generation had been maximised from other thermal power plants.

Gas-fired power plants using Nam Con Son gas account for 40% of the electricity capacity in the southern region, home to Vietnam's many major industrial zones.

Vietnam produced an estimated 7.26 billion cbm of natural gas in January-August, up 4.2% from a year ago, while electricity output in the same period rose 11.6% to 116.2 billion kilowatt hours, government data showed.

Maintenance at the Nam Com Son gas supply chain was last carried out in late 2011.

Zero export tax doesn't satisfy gold jewellery makers

Gold jewellery and other gold articles with less than 95 per cent gold content enjoy zero export duty rates from September 1, under Decree No. 122/2016/ND-CP.

Under the circular, enterprises exporting gold jewellery, goldsmiths' wares and other gold articles under subheadings 71.13, 71.14 and 71.15 of the export tax schedule, which have under 95 per cent gold content, can declare export tax at zero per cent if they can show test results confirming the same, issued by organisations in charge of assessing gold content in jewellery and goldsmiths' wares.

The oganisations that can assess gold content are Quality Assurance and Testing Center 1, Quality Assurance and Testing Center 3, Doji Institute & Laboratory for Gemology and Jewellery, A Chau Commercial Bank-Gold Center or an organisation appointed by the Directorate for Standards, Metrology and Quality.

In 2015, the Finance Ministry, under Decision 36/2015/TT-BTC, imposed a new export tax on gold jewellery, following the increase of export duty from zero to two per cent on gold jewellery with purity of over 95 per cent.

While goldsmiths in Viet Nam welcomed the decision, most said it would not lead to much improvement in local jewellery exports, which have declined in recent years. Export value dropped from nearly US$3 billion in 2011 to only $670 million in 2014.

According to representatives from Phu Nhuan Jewelry Co (PNJ), the firm only exported less than 18-karat gold jewellery, or 75 per cent pure gold, therefore the decree would not benefit the firm.

Meanwhile, gold jewellery makers said the free import of gold material would be more helpful for them to compete against global rivals. Currently, they have to pay a higher price for raw material required for production since they cannot import gold on their own to lower input costs.

To control the local gold market, since May 2012, the State Bank of Viet Nam has been the only gold importer in the country. To better manage jewellery trading, the government instituted stronger measures last year to control the trading.

Own price mechanism for BSR

The Government has allowed Binh Son Refining and Petrochemical Co Ltd (BSR) to make its own price mechanism after the company has repeatedly called for support to improve the competitiveness of its products.

This decision was signed by Prime Minister Nguyen Xuan Phuc on September 3.

Accordingly, the Government will abolish collection of regulation revenues for BSR’s oil products, liquefied petroleum gas (LPG) and petrochemical products. However, in return, the Government will take away other tax incentives as well as make Vietnam National Oil and Gas Group (PVN), the parent company of BSR, stopping its tax subsidy for BSR.

This regulation took effect immediately after signing.

From January 1, 2017, the Government will annul collection of regulation revenue for the company’s petroleum products (including for internal consumption) which is currently set at 10 %.

Tran Ngoc Nguyen, BSR general director, said the self-regulated price mechanism would help petrol products of Dung Quat oil refinery plant be able to compete with imported products.

Imported products, especially those from enterprises which benefit from import tariff incentives under free trade agreements (FTAs) Vietnam has signed, have an edge over Dung Quat’s products.

Dung Quat’s current petrol selling prices include import taxes. Its products are subject to import tax of 20 % while under the Vietnam-the Republic of Korea FTA, import tariff on the RoK gasoline was cut from 20 % to 10 % since the end of last year.

With such tariff reductions, the prices of imported fuels are lower than those of Dung Quat oil refinery. For this reason, a number of local businesses have changed to purchase imported products.

PVN provides a tax subsidy of 7 % for Dung Quat under a special financial mechanism.

 “When the company can sell products at the market price, traders will buy Bình Sơn’s products and then Dung Quat oil refinery can run at the maximum 110 % of its capacity,” Nguyên said and noted its advantages such as cheaper transportation and insurance fees, less forex and inventory risks.

Besides, increased sales would also raise the company’s tax contribution to the State budget, he added.

The petrochemical company paid VND22 trillion (US$986.5 million) in tax revenue to the State budget last year. In 2016, it expected to contribute nearly VND16 trillion to the State budget.

“The Government’s decision will also facilitate the company’s investment expansion plan as well as pave a better way for its initial public offering scheduled by the end of 2017,” Nguyen said.

Since the start of its commercial operation in February 2009, Dung Quat Oil Refinery has produced 41.37 tonnes of petrol products. It has earned a total of VND764.63 trillion in revenues and VND6.17 trillion in net profits.

SCIC to sell stake in Cafatex Corp

State Capital Investment Corporation (SCIC) will sell more than 265,000 shares in seafood producer Cafatex Corporation, the HCM Stock Exchange said in a statement on September 5.

SCIC will sell the shares in the form of a package at an auction and the starting price is VND101,100 per share.

SCIC could earn a minimum of VND29 billion (US$1.3 million) from this deal.

That number of shares is equal to 3 per cent of Cafatex Corp's chartered capital after the company is equitised.

The southern seafood producer expects to have chartered capital worth more than VND98.8 billion following the equitisation.

The auction will be organised on October 7 at the HCM Stock Exchange. 

PAN Group to lift foreign ownership bar

The State Securities Commission has approved PAN Group JSC's lifting of the limit of foreign ownership in the company's capital.

With the decision, PAN Group has become the second firm in the food industry after dairy firm Vinamilk to lift the bar for foreign investors.

Foreign investors now hold 46.15 per cent of PAN Group's chartered capital. The two largest shareholders are Singapore-based investment fund Tael Two Partners Ltd with 21 per cent and Finland-based Mutual Fund Elite with 9.52 per cent.

Two other sizeable shareholders of PAN Group are Singaporean sovereign fund GIC with nearly 5 per cent and the World Bank's International Finance Corporation (IFC) with more than 4.8 per cent.

In the first half of the year, PAN recorded revenue of VND1.33 trillion (US$59.37 million) and pre-tax profit of VND225.6 billion, a year-on-year increase of 19.2 per cent and 53 per cent, respectively.

The company has invested more than $150 million in the food and agriculture industry. PAN Group possesses six plant seed companies nationwide, such as Vietnam National Seed JSC (Vinaseed), and is the largest shareholder of a famous food producer in the food industry. 

Turkish firms come looking for business opportunities

A delegation of business executives representing nine companies based in Turkey's Antalya city on September 6 met with their counterparts in HCM City to exchange information and explore business opportunities.

They represent prominent companies that produce fertilisers, plant nutrition products, seeds and biological defence products.

Yonetim Kurulu Uyesi of the board of the Antalya Chamber of Commerce and Industry said Turkish firms want to understand more about Viet Nam's rapidly growing fertiliser market and strengthen their relations with Vietnamese companies.

"Viet Nam market is a promising market for us."

According to the Viet Nam Chamber of Commerce and Industry (VCCI), trade between Viet Nam and Turkey has grown from US$1 billion in 2012 to $1.5 billion last year, with Viet Nam enjoying a surplus.

The two countries have set themselves a target of doubling trade to $3 billion this year.

Việt Nam exports mainly mobile phones and accessories, fibres and yarns, computers, electronic products and accessories, fabric, and rubber and imports machinery and equipment, milk and milk products, medicines, plastic products, and chemicals.

The business-matching event was organised by the VCCI in collaboration with the Antalya Chamber of Commerce and Industry. 

Private equity optimism falls: survey

A survey of the private-equity sector in July by consulting firm Grant Thornton found that 72 percent of respondents (down 14 percentage points from six months ago) anticipated higher level of investment activities in Vietnam in the next 12 months.

The number of respondents participating in the bi-annual survey, all decision makers in the PE sector in and outside Vietnam, was not disclosed.

With respect to sources of transactions, it is notable that private/family-owned entities have come back to be the most significant source of deals, as 33 percent of the participants agreed.

The retail and food and beverages (F&B) sectors continued to be the two most attractive sectors for PE transactions.

But PE investors are increasingly interested in the education sector, with its rating of "very attractive" increasing by 16 percentage points from the previous survey.

The survey emphasised that “economic growth” and “Sector specific opportunities” continued to be critical to deal success.

"Differences in valuation expectations" and “non-disclosure of material items at the appropriate time” topped the list of factors contributing to deal failure.

PE investors seeing Vietnam as “attractive” and “more attractive” accounted for the largest proportion, 69 percent, an increase of 10 percentage points from H2 2015.

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