Assembly okays 54% govt debt cap

Public debt may not exceed 65% of GDP, with government debt less than 54% and foreign debt below 50% of this indicator, according to a resolution on the national financial plan for 2016-2020 passed on November 8 by the National Assembly (NA).

Besides, the country’s external debt obligations must stay below 25% of total exports of goods and services. The direct debt obligations of the Government (excluding on-lending) may not be higher than 25% of total annual budget revenue.

The resolution specifies the State budget deficit for 2016-2020 may not exceed 3.9% of GDP. Efforts should be made to lower the deficit to 3.5% of GDP by the end of this period, for a positive budget balance, with debt secured within the prescribed limit. 

Also, State budget spending should be gradually restructured in a positive direction. Total budget expenditures in 2016-2020 are estimated at slightly more than VND8,000 trillion, with investment and development making up an average of 25-26%.

The proportion of routine expenditures should be brought down below 64%. Spending for debt payments and national reserves should be prioritized.

The total budget for investment and development in 2016-2020 is no more than VND2,000 trillion, or roughly US$90 billion.

The State budget revenue target for this period is some VND6,860 trillion, an increase of 1.65 times from 2011-2015.

Contributions to the central budget should be restrained at 23.5% of GDP, with the proceeds from taxes, fees and charges equal to 21% of GDP. Domestic revenues should account for 84-85% of total budget collections.

The resolution calls for strict financial discipline in budget collection and spending. Inspection and auditing should be strengthened to prevent revenue losses, trade fraud, transfer pricing, tax evasion and profligacy.

Public debt must be tightly controlled within permissible limits, while Government guarantees for new loans should be minimized.

Overspending and local government debt should be closely monitored. Resources may be distributed to ensure full and timely repayments, says the resolution.

Loans should not be used for on-lending. Government guarantees should not be turned into State budget allocations.

Vietnam’s fruit import from China falls sharply

Vietnam imported 120,000 tons of fruit from China in January-October, a sharp fall of nearly 60% year on year, said a source from the Plant Protection Department under Vietnam’s Ministry of Agriculture and Rural Development.

Hoang Trung, deputy director of the Plant Protection Department, said at a regular press conference in Hanoi on November 9 that fruit imports from China this year to date accounted for some 30% of the total volume of more than 400,000 tons of fruit in the period. He said local demand for fruit and vegetable imports from China has tumbled over the past few years, as supplies from the U.S and Australia surged.

Addressing concerns that fruit and vegetable imports from China may not meet food safety criteria, Trung said the ministry’s agencies has strengthened checks of food safety and plant quarantine. Accordingly, fruits and vegetables from other countries will only be allowed for import into Vietnam if they are safe for consumers, Trung said.

As China is listed among the countries with high risk of food quality, relevant agencies have taken samples with higher frequency. However, after inspections, the agencies found that China’s fruits still meet food safety standards.

Tan Nam Chinh, Vinalines cut deal for shipping fee reduction

Tan Nam Chinh Logistics Co. and the Haiphong branch of Vietnam National Shipping Lines (Vinalines) have signed a cooperation agreement to give a 20% shipping charge reduction on transportation of frozen agricultural products and fruits from the south to the north.

The two sides inked the deal early this month to help each other make use of their own advantages and reduce logistics fees, Vu Trong Tue, general director of Tan Nam Chinh, told the Daily on Tuesday.

Before reaching the agreement, the two enterprises had spent months surveying transport routes and comparing with transport charges by road, he said.

Thanks to Vinalines’ fleet operating between Saigon Port in HCMC and Haiphong Port in Haiphong City, Tan Nam Chinh can reach cold storage systems in the agricultural export zone, including Binh Thuan, Long An and Tien Giang provinces.

The company will be able to provide the door-to-door service and help customers in the south save up to 20% of shipping charge to send their frozen products to the north.

In the deal, the logistics company pledged to deliver frozen products to the buyers’ doors and keep the shipping fee the same during bumper crops of agricultural products.

Tan Nam Chinh currently owns the biggest market share of frozen fruit logistics in Vietnam. It also works as a traditional partner of local and foreign shipping lines such as Wan Hai, APL, Maersk Line, and Vinalines to help producers save costs to transport frozen fruits from farms in Binh Thuan, Binh Duong, Dong Nai, Long An, Tien Giang, Ben Tre, Can Tho to China, South Korea, Japan, the Middle East, Europe and North America.

Dong Van IV Industrial Park starts construction     

The Viet Nam Glass and Ceramics for Construction Corporation (Viglacera) today begins construction at the Dong Van IV Industrial Park (IP) in northern Ha Nam Province.

The IP, which has been considered one of the key projects in the province for the 2016-17 period, seeks to attract several large investors in the electronics and hi-tech areas.

At the groundbreaking ceremony, three South Korean investors were granted investment certificates for their official operation in 2017.

Covering an area of 600 hectares, the IP includes two phases. The first phase of 300 hectares is to be carried out in the province’s Kim Bang District. The IP has a favourable location on National Highway 38 to easily connect to National Highway 1 to Ha Noi and Ha Noi – Hai Phong Expressway to Hai Phong Port. Businesses will find it convenient to export goods by both air and road.

In addition, the IP is expected to create jobs for 500 workers in the province, as well as four million people from neighbouring localities.

Viglacera is to build housing for workers and specialists close to the IP to attract human resources.

In recent years, Ha Nam has been one of the country’s leading localities in attracting FDI, with several preferential policies for businesses, such as 24 hour electricity, clean water supplies and waste water treatment systems, favourable customs procedures and simplified administrative procedures.

Viglacera also has completed land clearance, infrastructure and handing over land to businesses for construction.

Plants in the IP are expected to become operational next year. 

Food industry exhibition contributes to building brands for the industry     

The Viet Nam International Food Industry Exhibition (Vietnam Foodexpo 2016), the most outstanding national trade promotion event specialising in agricultural products, seafood, and the food industry, will be held in HCM City from November 16-19.

The Vietnam Foodexpo 2016 will have 550 booths of over 400 exhibitors from Viet Nam’s 30 cities and provinces and 15 other countries and territories, including Egypt, Poland, Cuba, Italy, the Netherlands, the Republic of Korea, Hungary, Malaysia, New Zealand, Japan, Singapore, Thailand and China.

A wide range of farm produce, seafood products, processed food products, beverages, tea and coffee, food ingredients, food processing technologies and machinery will be displayed at the expo.

Ta Hoang Linh, deputy general director of the Trade Promotion Agency (Vietrade) under the Ministry of Industry and Trade, said the expo, with the theme “Better Food, Better Life”, will contribute to the dynamic development of Việt Nam’s food industry, promoting the brands of enterprises, products and services in the industry and creating favourable conditions to expand the market share of Vietnamese food in both domestic and export markets.

The exhibition will also serve as a catalyst for technological innovation, thereby increasing productivity, quality and safety in production, processing and business associated with agricultural products, food and drinks, he said.

As the “National Honoured Exhibitor” at the Vietnam Foodexpo 2016, 30 Italian companies will introduce Viet Nam to some of their finest products and brands at the expo.

In addition, Italian import delegations will come to the expo to find Vietnamese export partners.

Carlotta Colli, Italian Consul General in HCM City, said the expo would create good opportunities for Vietnamese and Italian firms to enhance co-operation and penetrate each other’s market.

Held at the Saigon Exhibition and Convention Centre, the event will also include the Vietnam Foodtech 2016 featuring modern technologies and machines for the food industry, the international conference on Viet Nam food industry and a seminar on investment promotion in the food processing industry, Saigon international cooking contest and other activities.

Organised by Vietrade, the expo is as part of the Government’s activities to build a brand strategy for Viet Nam's food industry, Linh said.

The expo is expected to welcome more than 20,000 visitors, he said, adding that many local and international trade delegations and potential buyers have registered to visit the expo to seek supply sources.

KIDO eyes northern market, opens yoghurt, ice-cream plant     

Food manufacturer KIDO Group on Wednesday opened a frozen food manufacturing unit at the Viet Nam – Singapore Industrial Park in the northern province of Bac Ninh.

Thought to be the biggest plant of its kind in the northern region, it has an annual capacity of 9,000 tonnes of yoghurt and 6,000 tonnes of ice-cream.

Built at a cost of VND400 billion (US$18 million), the plant has advanced technologies imported from Europe and Japan.

It is part of KIDO’s strategy to expand its frozen food business in the north and become the leading food producer in Viet Nam and Southeast Asia.

Frozen foods now contribute around VND1.5 trillion to the group’s annual revenues, and the segment has been growing at an average of 25 per cent in the last 10 years.

Revenues from ice-creams and yoghurt are expected to increase by 35 per cent this year.

According to Euromonitor International, KIDO was the leader in ice-cream market last year with a market share of nearly 37 per cent. 

National carrier Vietnam Airlines and its subsidiary Jetstar Pacific will operate 34 one-way flights per day on the route between Ha Noi and HCM City.

The first flight will begin at 5.45am and the last one of the day will be at 9.30pm. The carrier will focus on exploiting flights at even hours, such as 6am, 7am, 8pm and 9pm, and interposing them with additional flights, each 15-30 minutes apart.

The increase in flights during rush hours is expected to shorten waiting time for passengers, who can depart at the earliest.

Some 65 per cent of flights on the route will be served by wide-body aircraft, such as Boeing 787, Boeing 777, Airbus A350 and Airbus A330. The remainder will be A321.

Viet Nam Property Awards returns for 3rd year     

PropertyGuru, Asia’s leading online property group, and sponsor Kohler have announced that the third annual Vietnam Property Awards will be held in June next year.

Speaking at a press conference in HCM City, Terry Blackburn, Asia Property Awards founder and managing director, said the awards would celebrate best property developers, projects and designs in the country’s top-tier markets of HCM City and Ha Noi, as well as exciting resort destinations of Phu Quuc, Da Nang and Nha Trang.

The awards are given in three categories -- developer, development and design -- covering the residential, commercial and resort segments, with the eligibility period covering current developments with expected completion by December 2019 or earlier.

There will also be awards for Best Green Development, Special Recognition in CSR and Special Recognition in Sustainable Development.

Nominations are currently being accepted, and submissions can be made by developers, consumers and the general public before the deadline of March 24 next year.

Organisers expect to get more than 100 nominations next year, up from 60 in 2016.

The official shortlist, comprising one winner and up to four highly commended companies or projects in each category, will be revealed by an independent jury in late April.

A black-tie gala dinner and awards ceremony will take place on June 2.

The ‘Best of the Best’ round winners from Viet Nam will compete in the regional grand finals at the South East Asia Property Awards held annually in Singapore, opening up their businesses to new audiences around the region.

BDO, one of the world’s largest accounting and auditing firms, continues to be the award’s official judging supervisor to ensure that the entire nomination and judging process is fair and transparent, Blackburn said.

The Vietnam Property Awards has become one of the most-awaited industry events in the country’s real estate calendar.

This year more than 450 guests and VIPs attended the gala dinner that saw Nam Long Investment Corporation crowned as the year’s Best Developer. 

CJ inaugurates animal feed plant in Ba Ria-Vung Tau

The Republic of Korea’s CJ group launched a new CJ Feed Ingredient Vietnam factory in the southern province of Ba Ria-Vung Tau on November 10.

CJ Feed Ingredient Vietnam was built on an area of 45,466sq.m at a cost of US$18.3 million. It specializes in producing feed ingredients, like fermented soybean, with an estimated capacity of 22,000 tons per year for domestic use and exports.

CEO of CJ Vietnam Chang Bok Sang said the factory is equipped with high-tech production technologies and equipment imported from Korea to ensure product quality. It will assist farmers in feeding their livestock and raising profit.

The construction of the plant demonstrates CJ group’s commitment to long-term investment in Vietnam and contributing to domestic industry development, Mr Sang said.

Established in 1953, CJ is a global conglomerate with four business segments, including food and food services, biotechnology and pharmacy, entertainment and communications, and homeshopping and logistics.

CJ has operated in Vietnam since 1998 with popular brands like Tous les Jours, CGV and SCJ TV Homeshopping.

It has also launched many community development programs including the chilly planting project in Ninh Thuan province, bakery courses in Nghe An province, ToTo film making courses and others with a hope of bringing a better life for the Vietnamese people. 

Ca Mau looks at ways to support local fishery

The Department of Agriculture and Rural Development of the southernmost province of Ca Mau has implemented measures to address challenges to local fishermen and ensure targeted output this year.

The Department announced the output of aquatic products of Ca Mau province may only reach 85% of year’s target (285,000 tonnes) while the shrimp productivity will be 82% (142,000 tonnes). 

It is difficult for the province’s fishery output to meet with the goals as unusual weather has affected output with looming typhoons and tropical pressures. Epidemics may also occur as temperatures drop in winter. 

Meanwhile, capital to support the local fishery industry has yet to reach local farmers. 

The Department suggested the provincial People’s Committee provide guidance for local farmers and urged relevant agencies to inform them of unusual weather to minimise the impact of natural disasters. 

According to statistics, due to drought in early months of 2016 and downpour afterward, over 158,000ha of local fishery area was lost and more than 125,000 households were heavily affected. 

In the first four months of 2016, the province earned nearly US$275 million from aquatic exports, mostly shrimp, up three percent from last year.

Fruit-vegetable export surpasses rice export

Vietnam’s fruit-vegetable export value in 2016 is predicted to reach US$2.6 billion, according to the Ministry of Agriculture and Rural Development (MARD).

From the beginning of this year, fruit-vegetable exports recorded a year-on-year increase of 30.8% to nearly US$2 billion, becoming the third largest export commodity after coffee and cashew. 

The MARD predicts that fruit-vegetable exports are likely to hit US$5 billion in 2017.

Cheap Chinese imports threaten local produce industry

Cheap imports of fruit and vegetables from China are a disquieting concern for the produce industry in Vietnam, as local actors find themselves unable to effectively compete with their Chinese rivals.

Locally produced fruit, vegetables and dairy products are agricultural products typical of the country’s wide array of fine cuisine that can be found on supermarket shelves nationwide. 

However, a new governmental decree taking effect later this year, has prompted concerns that an increasing assortment of imported goods from China will find their way into the country’s supermarket and other retail outlets.

Under the decree, import tariffs on 90% of all goods imported from China will be abolished over a three-year phase-out period running through 2018, with the remaining 10% eliminated by the end of 2020.

The lower cost of importing foodstuffs brought about by the new decree such as the reduced import tariffs is an economic boost for local retailers – as they can offer cheap, imported products from China, even in some cases when the produce is not in season locally.

Underselling local producers with cheap imports puts the local industry at risk, says Nguyen Thai Dung a store manager at Big C Thang Long.

For locals involved in the produce supply chain, from truck drivers to farmers, an anticipated explosive growth of imports from China will ruin years of hard work and established businesses.

Foods that come from local sources are a tremendous boon to the local economy, says Mr Dung, noting that more money stays in the local regions, creating significant value and more good paying jobs.

However, money is not the only driving force for Vietnamese producers competing with cheap imports, says Dinh Tuan Anh, a store manager for CP Ladoda. The quality of the end-product which makes its way to the consumer's table is also of great importance,

The value of buying local food is not only about the economy.

For one thing, he says shorter distances from the farm to the table means produce can be harvested closer to peak ripeness, when it is most nutritious, because it does not have to withstand extended transport and storage.

Vietnam is not alone when it comes to importing food which can just as easily be produced on home soil. Increasingly more westernized countries are choosing to import frozen or processed foodstuffs from countries like China because of the markedly cheaper costs.

Mr Anh says this trend is being driven by Vietnamese consumers who are much too often preoccupied with buying at the lowest price irrespective of quality concerns. Food to these consumers must be cheap or they won’t buy it.

A good example is fruit such as strawberries shipped from China, the world's second-largest producer of the bright red juicy sweet fruit. Local farmers will not be able to complete with the cheap operating and labour costs after the new decree comes into effect.

By freezing the strawberries, with the lower import tariffs Chinese producers will be able to make them more compact and less fragile, and easier to transport to Vietnam thus driving local growers out of business, says Mr Anh.

Then there is always the question of food safety with strawberries as there is with all food imports from China— as the government has a long track record of lax enforcement of food safety standards.

This has led to food illnesses outbreaks around the globe from exports such as the EUs largest food-caused incidence of gastroenteritis caused by the import of tainted strawberries from China a couple of years ago.

Nguyen Cong Thua of the Anh Dao Agricultural Service Co-operative in the central highlands province of Lan Dong says it simply comes down to the fact that smallholder farmers in the region cannot compete with producers in China who benefit from economies of scale.

The Chinese producers have a larger production scale that results in lower production costs, he says, noting they therefore they can cut their prices and sell produce at a lower cost than the local farmers in Vietnam.

Vietnam to attend leading international fair on consumer goods

Vietnamese enterprises will attend a leading international fair on consumer goods, handicrafts and interior decorations, the 2017 Ambiente Fair scheduled for February 10-14, 2017 in Frankfurt, Germany.

This information was released by Stephan Kurzawski, Senior Vice President of Messe Frankfurt Exhibition GmbH, which is the organiser of the annual fair, at a press conference in Hanoi on November 9.

The event is expected to attract around 4,700 exhibitors from six continents around the world, including from about 65 Vietnamese companies.

To date, numerous Vietnamese enterprises have registered for the fair, such as Artex Duy Thanh Limited Company, Bac Ninh Manufacture Limited Company and Handicraft Wooden Products Joint Stock Company (Hawpro Company).

Covering an area of 331,000 square metres, the exhibits will be divided into three groups: dining (presenting an unrivalled range of products for the table, kitchen and household); giving (with modern and emotion-provoking gifts, stationery and decorations and authentic and fashionable jewellery and accessories) and living (displaying home accessories and decorations for indoors and outdoors).

Speaking at the press briefing, Stephan Kurzawski emphasised that, “Ambiente is an international market place for the entire sector. Exhibitors from more than 90 countries will introduce their latest products in Frankfurt, creating consumer trends for the year 2017.”

“Ambiente will offer opportunities for exhibitors in the consumer industry around the world, including Vietnam, to meet and update themselves on the latest trends and solutions as well as learn more about the world market, seeking more partners and trading contracts,” he added.

A wide variety of other activities will also be held on the sidelines of the fair, including promotional programmes to assist young designers, companies and design studios to enter the international consumer goods market; an awards ceremony for the Design Plus Award, which honours products with an exquisite combination of formal elegance, design quality, functionality and sustainability; and programmes introducing Ambiente trends.

Notably, visitors will be provided with information on commodities with sustainable innovation and eco-friendly materials through an Ethical Style Guide Handbook.

The partner country for Ambiente 2017 will be the United Kingdom, so numerous special events will take place to introduce products from British businesses and to reflect the multi-faceted culture of the country.

The Ambiente 2016 featured the participation of 4,387 exhibitors from 96 countries, including 57 from Vietnam. It welcomed 137,000 visitors, including 303 Vietnamese people, from 143 countries. It is expected to attract 145,000 this year. The “living” group has more Vietnamese enterprises participating than does either of the other two categories.

Messe Frankfurt Group is known as a global player in the trade fair sector. It has organised 132 trade fairs worldwide so far. It has 29 subsidiaries worldwide and 57 international Sales Partners covering more than 160 countries.

MIC becomes subsidiary of MBBank

The Military Insurance Company (MIC) has become a subsidiary of MBBank after the latter secured a majority holding.

The bank increased its ownership in MIC from 49.77 per cent to 60.08 per cent, according to an announcement from MBBank on November 10.

MIC has total charter capital of VND800 billion ($35.82 million), with MBBank holding VND480.69 billion ($21.52 million) and other shareholders VND319.3 billion ($14.29 million).

MBB also has a majority stake in two companies in construction-related sectors: 45 per cent in the Vietasset Investment Joint Stock Company and 44.39 per cent in the Thuan Loc Joint Stock Company.

The State Bank of Vietnam (SBV) is drafting a new circular to tighten regulations on non-banking investment activities by banks in an attempt to improve the financial sector’s transparency and risk management.

Under the Law on Financial Institutions 2010, banks must invest in non-core business activities via a separate entity.

Banks can own more than 50 per cent of a non-banking financial institution in the subsidiary form, while the joint venture form allows banks to own from 11 to 50 per cent and less than 11 per cent in a commercial investment.

On November 9, MIC and Delloite came together in an end to end process reengineering in the insurance business project, which aims to bolster products to international benchmarks in automation and assets insurance product packages.

As at September 30, MBBank’s total assets stood at VND239.81 trillion ($10.73 billion), an increase of 8.5 per cent since December 31, 2015. Capital mobilization was VND189.1 trillion ($8.46 billion), up 3 per cent, and outstanding credit VND145.5 trillion ($6.51 billion), up 20 per cent, while its bad debt ratio fell to 1.34 per cent from 1.6 per cent.

Revenue from interest reached VND5.69 trillion ($254.79 million), an increase of 4 per cent against December 31. Profit from long-term investments and securities rose 15 per cent to stand at VND103 billion ($4.61 million).

After nine years of operations, MIC saw average revenue increase 30 per cent. Total assets stood at VND2.2 trillion ($98.51 million), with 55 member insurance companies, 400 business points, and over 2,000 agents with 1,400 staff. For 2016 the company set a target of total premium revenue being VND2 trillion ($89.56 million), with VND74 billion ($3.31 million) in net premium income and a dividend payout ratio of 9-10 per cent.

65 consumer goods businesses to attend German trade fair

Sixty-five Vietnamese enterprises will head to Frankfurt in Germany from February 10 to 14, 2017 to attend Ambiente Frankfurt 2017 - the leading international trade fair in the consumer goods sector.

Exhibitors are mostly companies who export goods such as dining tables, kitchen ware, household goods, home décor items and furnishings and are seeking potential customers. Notable names include the Duc Thanh Wood Processing JSC, the Minh Long Ceramic Company, and the Haka International Co., according to the organizer, Messe Frankfurt Exhibition GmbH.

The number of Vietnamese exhibitors attending Ambiente Frankfurt is higher than at any other consumer goods trade fair in the world, according to Mr. Stephan Kurzawski, Senior Vice President of Messe Frankfurt.

Many people question the benefit for Vietnamese enterprises of exhibiting in Germany, given the distance and cost involved. “The most important thing is how much businesses can earn from this investment,” Mr. Kurzawski said. “Meeting potential partners from more than 90 countries and thousands of visitors will involve some travel.”

Ambiente Frankfurt 2017 is expected to attract 4,700 companies from all over the world on an exhibition space of 331,000 sq m, with visitors to total 145,000. This year’s trade fair last February welcomed 4,367 enterprises from 96 countries, including 57 from Vietnam, and 137,000 visitors from 150 countries.

The Ministry of Industry and Trade has forecast that total revenue in the consumer goods-related sectors in Vietnam will hit $140 billion this year and nearly $173 billion by 2020, presenting major opportunities for local businesses to boost production and expand markets. Vietnamese consumer goods, including wooden furniture and ceramic goods, are exported to a host of markets, including the US, Japan and the EU.

Germany is a leading trade partner of Vietnam in the EU, accounting for 19 per cent of exports to the bloc. Two-way trade reached nearly $9 billion last year, an increase of 14 per cent against 2014. In the first five months of this year the figure reached over $4 billion.

VIB increases charter capital, readies for UPCoM listing

Vietnam International Bank (VIB) has recently completed all procedures to increase its charter capital and join the Unlisted Public Company (UPCoM) exchange.

Its charter was increased to VND5.64 trillion ($252.55 million) from VND4.85 trillion ($217.18 million) under a plan approved by the State Securities Commission (SSC) and the State Bank of Vietnam (SBV).

Shareholders passed a resolution at its annual general meeting in April to increase its charter capital and also passed a 16.5 per cent bonus share plan.

In recent years VIB has found favor among shareholders and investors for its high dividend payments: a 9 per cent cash dividend and 14 per cent bonus shares in 2014 and an 8.5 per cent cash dividend and 16.5 per cent bonus shares in 2015.

As required by the banking sector, both the cash dividend and bonus shares were approved by the SBV based on criteria such as non-performing loans being less than 3 per cent, proven transparency in operations, and solid business performance.

VIB’s shares are expected to attract special attention from a range of investors once on UPCoM.

VIB has been consistent in its prudent business development strategies. It has constantly retained a healthy growth rate in assets against increasing charter capital. The bank''s total assets of VND93.07 trillion ($4.16 billion) and a capital adequacy ratio (CAR) of 14.46 per cent, with non-performing loans falling sharply to 1.49 per cent, according to its business report for the first ten months of this year.

VIB now has more than 4,000 employees serving 1.6 million personal customers and 34,000 corporate customers. The Commonwealth Bank of Australia, VIB’s strategic shareholder, is one of the world’s ten largest banks by market capitalization and has more than 100 years of history. It holds 20 per cent of VIB. 

Survey finds Vietnamese SMEs paying higher bribes

Nearly half of Vietnamese small and medium-sized enterprises (SMEs) had to pay bribes to officials when operating their business in 2015, according to a survey.

The report released on November 9 by the Central Institute for Economic Management (CIEM) found that as many as 42.7% surveyed SMEs were forced to pay bribes in order to facilitate their business, with most predicting that the amount of ‘unofficial fees’ they have to pay would continue to rise in the future.

The survey interviewed over 2,600 non-state SMEs in ten cities and provinces, including Hanoi, Hai Phong, and Ho Chi Minh City.

18.75% interviewed enterprises said they paid bribes in order to even access public services; 24.1% paid to deal with tax issues; while 35-38% others to obtain permits and licensing, and handle customs.

58% enterprises who admitted paying bribes in 2013 survey continued to do that in 2015, and 30% who didn't do in 2013 survey did it in 2015, the report said.

As many as 41.2% of respondents said that the amount of unofficial fees would rise in the future due to difficulties in access to credit from formal channels and increasing competition.

Vice chairman of CIEM, Phan Duc Hieu, said that the findings were really worrying.

"Although the business environment in the country has been much improved in recent years, but the survey showed that local enterprises are still facing lots of challenges following the government's regulations and competing with others in their industry," Hieu said.

Developing automobile industry into key economic sector

The government will stand by businesses in working towards the goal of developing the automobile industry into a key economic sector, contributing to boosting economic growth, meeting the need of the people and businesses and moving towards exports.

Deputy Prime Minister Trinh Dinh Dung made the statement at a November 10 meeting in Hanoi discussing the situation of Vietnam’s automobile industry as well as its development directions in the years to come.

As young as it is, Vietnam’s automobile industry has made significant contributions to the economy, including creating jobs, raising the state budget and promoting growth, the deputy PM said.

The implementation of integration commitments will not only bring about new challenges for Vietnam’s automobile industry but also new opportunities as the domestic market is increasingly growing, in addition to the regional market, he noted.

Deputy PM Dung highlighted the goal of developing the automobile industry into Vietnam’s key economic sector in the future, which he said requires high determination, drastic action and consensus between the government and enterprises.

He called on automobile manufacturing and assembling companies to participate in realising that goal in a more active and proactive fashion, through strengthening connection and collaboration among domestic firms and between domestic firms and international ones.

Enterprises also need to restructure their products with a focus on key products, towards reducing production costs, increasing quality and lowering prices, he added.

The deputy PM asked ministries and sectors to promptly review relevant mechanisms and policies, supplement necessary policies as well as adjust inappropriate ones, aiming to create synchronism and consistency.

The Ministry of Industry and Trade (MOIT) was assigned to chair regular meetings to remove difficulties for the automobile industry in a timely fashion.

According to a MOIT report, Vietnam’s automobile industry currently features over 400 businesses, mostly small and medium sized, with a total design assembly capacity of about 460,000 cars per year. The industry has provided jobs for about 100,000 direct workers and contributes more than US$1 billion to the state budget annually regarding taxes alone.

Vietnam sets to export US$6 billion of coffee by 2030

The Vietnam Coffee and Cocoa Association (VICOFA) has set a target to have a total coffee plantation area of approximately 600,000km across the nation, with exports expected at a maximum of US$6 billion by 2030, according to the Ministry of Industry and Trade.

In the past ten years, the coffee industry has accomplished the mission of bringing Vietnam to second position in the world on production and export of coffee beans. In the next stage, the industry aims to double the value of coffee manufacturing and exports, contributing to improving the efficiency of the national economy.

In particular, by 2020, VICOFA sets to have the proportion of processed coffee estimated at 30% compared to 10% as today, while instant and filter coffee will account for 25% of the total yield. Export turnover is set to reach US$3.8-4.2 billion.

In addition, the entire industry will diversify its products in the direction of deep processing with the proportion of processed products reaching 30-40% of total yield and strong brands.

By 2030, it is expected to have a total output value of coffee at 200% compared to the present, with export value reaching US$5-6 billion.

According to the International Coffee Organisation (ICO), in recent years, the world’s coffee production has seen few changes.

The total global coffee output is at around 170 million bags, each weighing about 60kg. Of these, top ten exporters account for more than 90% of total output.

In the 2014-2015 crop, Vietnam’s coffee production reached 27.5 million bags, at about 1.65 million tonnes, ranking second after Brazil, and becoming the largest country in robusta output around world.

In 2015, although Vietnam maintained its 2nd position in export volume, it only ranked third in value, after Brazil and Colombia.

According to the Trade Promotion Department under the Ministry of Industry and Trade, in the 2015-2016 season, due to favourable weather, Vietnam's coffee production increased by 7% over the previous year, at 29.3 million bags. It is estimated that total coffee exports is at 28.07 million bags, up 31% against last year.

Ministry urges thorough Tet preparation

The Ministry of Industry and Trade (MoIT) has promulgated a directive on implementing solutions to ensure supply and demand balance and to stabilise the local market. 

The directive is targeted at the year-end months and the upcoming Tet (Lunar New Year). 

Accordingly, Minister Tran Tuan Anh required the provincial departments of industry and trade to evaluate goods demand and supply, especially essential products, to have active solutions to ensure market stabilisation. This could prevent goods shortage or inventories after the festival. 

The departments were also asked to support and connect producers and distributors with credit institutions for loans with preferential interest rates so that they could produce and reserve more goods during the upcoming Tet. 

The departments would cooperate with the departments of agriculture and rural development and relevant agencies to organise agro-forestry and seafood fairs to provide safe and healthy food. 

In addition, they should promote the "Vietnamese people prioritise Vietnamese products" campaign to support domestically produced goods and stabilise markets, especially in remote and mountainous areas. 

The ministry has urged businesses to implement trade promotion activities while encouraging them to participate in stabilisation programmes to distribute goods to residential areas, industrial parks, outskirt districts, remote areas and islands. These activities could help low-income earners buy goods at reasonable prices. 

The ministry also requested groups, corporations and companies to review supply and demand to provide goods in the market in a timely manner during the Lunar New Year. 

Electricity of Vietnam was required to strictly implement power supply for production and consumption, while having specific plans to ensure enough electricity for the holiday. 

The Vietnam National Oil and Gas Group (PetroVietnam), Vietnam National Petroleum Group (Petrolimex) and petrol wholesalers were asked to ensure supply. The groups should have petroleum import plans with suitable prices to avoid price surge while implementing regulations on fire and explosion prevention. 

Producers should closely supervise sales in their distribution and agent system to prevent goods shortage and artificial price surge. 

They were asked to improve quality, diversify products and control input to reduce production costs and increasing competitiveness with import goods. 

MoIT asked associations to closely cooperate with the ministry to review supply and demand of essential goods to have timely solutions for market stabilisation.

Fruit-vegetable export surpasses rice export

Vietnam’s fruit-vegetable export value in 2016 is predicted to reach 2.6 billion USD, according to the Ministry of Agriculture and Rural Development (MARD). 

From the beginning of this year, fruit-vegetable exports recorded a year-on-year increase of 30.8 percent to nearly 2 billion USD, becoming the third largest export commodity after coffee and cashew. 

The MARD predicts that fruit-vegetable exports are likely to hit five billion USD in 2017.

Ca Mau looks at ways to support local fishery

The Department of Agriculture and Rural Development of the southernmost province of Ca Mau has implemented measures to address challenges to local fishermen and ensure targeted output this year. 

The Department announced the output of aquatic products of Ca Mau province may only reach 85 percent of year’s target (285,000 tonnes) while the shrimp productivity will be 82 percent (142,000 tonnes). 

It is difficult for the province’s fishery output to meet with the goals as unusual weather has affected output with looming typhoons and tropical pressures. Epidemics may also occur as temperatures drop in winter. 

Meanwhile, capital to support the local fishery industry has yet to reach local farmers. 

The Department suggested the provincial People’s Committee provide guidance for local farmers and urged relevant agencies to inform them of unusual weather to minimise the impact of natural disasters. 

According to statistics, due to drought in early months of 2016 and downpour afterward, over 158,000ha of local fishery area was lost and more than 125,000 households were heavily affected. 

In the first four months of 2016, the province earned nearly 275 million USD from aquatic exports, mostly shrimp, up three percent from last year.

High-tech agriculture fair opens in HCM City

The fifth hi-tech agriculture and food industry fair (Hi-Tech Agro 2016) opened on November 10 in HCM City’s Le Van Tam Park, providing opportunities for local farm producers and distributors to enhance cooperation. 

The fair features 300 booths of enterprises from HCM City and 20 from other cities and provinces. On display are hi-tech farming models, bio-technology products, seedlings, orchids, ornamental trees, fresh and processed farm produce and food, post-harvest technologies, and agricultural machines and equipment. 

A special zone designed like an aquarium displaying ornamental fish is expected to be an attractive feature of the fair. 

Seminars will be held to discuss the development plan for the ornamental fish industry in the 2016-20 period, while an investment promotion conference will solicit investment for the city’s hi-tech agricultural park. 

Pham Thiet Hoa, director of the Investment and Trade Promotion Centre of HCM City (ITPC), said the fair would offer stakeholders opportunities to learn about the latest scientific and technological advancements and sharpen the competitiveness of local agricultural products. 

The fair, organised by the centre in collaboration with the HCM City Department of Agriculture and Rural Development and HCM City Hi-Tech Agricultural Park, will close on November 14.

Alumin Nhan Co plant produces first tonne of hydrate

The Alumin Nhan Co plant of the Dak Nong Aluminum Company, an affiliate of the Vietnam Coal and Mineral Industries Group, held a ceremony on November 10 to mark its first tonne of hydrate. 

The company is analysing key elements of hydrate and will sell the product to the market if it meets all standards. The price of hydrate is 200 USD per tonne. 

The Alumin Nhan Co plant is expected to produce alumina by the end of this year. 

Located in Nhan Co commune, Dak R’lap district, the 12 trillion VND (522 million USD) plant has a designed capacity of 650,000 tonnes per year and its main products are hydrate and alumina. 

Construction on the plant commenced in October 2010.

Vietnam seeks to lure Malaysian finance, industry businesses

Vietnam is an attractive destination for Malaysian finance and industry businesses, CK Lim, Director of the ASEAN Business Community said at a function to connect Vietnamese and Malaysian businesses in Ho Chi Minh City on November 10.

He noted that the Vietnamese Government’s investment attraction policies and tax incentives offered to foreign businesses have created the attraction of the Vietnamese market.

With over 90 million people, Vietnam is a potential consumption market that is being eyed by regional countries, CK Lim commented.

Several Malaysian banks have made their presence in Vietnam’s finance–banking sector with efficient operations and possibilities to growing robustly, he said.

Malaysian businesspeople saw Vietnam a top choice in the ASEAN region when they plan to build plants to manufacture industrial goods in the coming time, he told participants.

Assessing Vietnam-Malaysia cooperative ties, Ho Xuan Lam, Deputy Director of the HCM City Investment and Trade Promotion Centre, said Malaysia is always a crucial, promising partner of Vietnam.

Being members of the ASEAN Economic Community, which forms a single market and production centre with free movement of goods, services, skilled labourers, investment and capital flows, will allow the countries to boost bilateral trade and investment, he said.

Ho Chi Minh City has been offering flexible and competitive investment attraction policies and mechanisms, he noted, saying this enables foreign businesses, including Malaysian ones to expand their investment and business scope.

Malaysia is one of Vietnam’s strategic partners in ASEAN. In the past ten months of this year, trade between the two countries hit 6 billion USD and it was targeted to reach 12-15 billion USD by 2020.

Seminar discusses risks in derivative market

A seminar discussing how to manage risks in the derivative market took place in Ho Chi Minh City on November 10.

Over the past decade, the Vietnamese securities market has listed stocks of public companies and government bonds, including general stocks and several fund certificates.

Nguyen Thi Hoang Lan, Vice Chairwoman of the board of directors and Vice General Director of the Hanoi Stock Exchange (HNX), suggested launching financial derivative products first instead of commodities.

Commenting on the prospect of the market, Dang Tai An Trang from the Finance Ministry’s State Securities Commission (SSC) said the market aims to provide a new tool to prevent risks and attract new capital flows, but also poses risks involving liquidity, partners, among others.

He urged for State management and involvement of units concerned to ensure fair and transparent operations in the market

As scheduled, units concerned will report the outcomes of their study to the government in late December. The derivative market is expected to open in the first or second quarter of 2017.

The seminar was co-hosted by the HNX, the SSC and the Vietnam Securities Depository.

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