Vietnam's FDI inflow surges at start of year

During the reviewed period, the manufacturing and processing sector accounted for more than 71 per cent of the total FDI pledged in the country, as it attracted $1.99 billion. — File Photo

Foreign companies registered to invest more than 2.8 billion USD in Vietnam during the first two months of this year, up 135 percent year-on-year.

According the General Statistics Office (GSO), of this sum, over 1.9 billion USD came from 291 newly-licensed projects, surging 96.6 percent in the number of projects and 167.5 percent in the level of capital, while another 137 operating projects, which expanded their investments, contributed 898.3 million USD. GSO noted that disbursements of foreign direct investment (FDI) also recorded a yearly rise of 15.4 percent to an estimated 1.5 billion USD.

During the reviewed period, the manufacturing and processing sector accounted for more than 71 percent of the total FDI pledged in the country, as it attracted 1.99 billion USD. This was followed by the entertainment industry, with 210.6 million USD.

Singapore remained Vietnam's largest source of FDI, with 435.2 million USD and making up 22.8 percent of the nation's total new registered FDI in the past two months. It was followed by Malaysia with 233.2 million USD or 12.2 percent; the Republic of Korea (202.4 million USD or 10.6 percent); and Japan (160.6 million USD or 8.4 percent).

Large foreign investors also included Hong Kong, mainland China, the United Kingdom and Taiwan.

In the first two months, Hanoi retained its position as the most attractive investment destination for foreign investors. The capital city attracted 242.4 million USD in investments, totalling 12.7 percent of FDI pledged in the country.

The northern provinces of Bac Giang and Bac Ninh came in second and third with 206.1 million USD or 10.8 percent, and 200.6 million USD or 10.5 percent, respectively. They were followed by Ba Ria-Vung Tau province with 157.1 million USD; HCM City (156 million USD); Dong Nai province (143 million USD) and Ha Tinh province (139 million USD).

Earlier, Nguyen Mai, Chairman of the Vietnam Association of Foreign Invested Enterprises, told online newspaper bizlive that many multinational groups have scheduled to move their production and businesses from other countries in the region to Vietnam to take advantage of the FTAs. Therefore, the Government should guide authorities of provinces and cities to choose suitable foreign investors and technologies to protect the environment and reduce energy usage, he noted.

New start-ups rise at start of 2016

With 5,584 firms established in February, the country saw 13,904 new companies begin operations in the first two months of 2016, up 1 percent year-on-year, the General Statistics Office (GSO) reported.

The new firms registered a total capital of 113 trillion VND (5.13 billion USD), up 45.8 percent year-on-year. Further, average registered capital of a new firm reached 9.6 billion VND, up 44.9 percent year-on-year.

GSO estimated that these new firms created jobs for 198,500 local residents in this period, up 0.7 percent year-on-year.

During the first two months of the year, 7,416 firms also resumed operations, up 69.5 percent against the same period last year.

However, the number of firms that have either declared a temporary suspension or shut down operations in the first two months was also high.

During these months, companies that declared a temporary suspension numbered 16,471, up 17.3 percent year-on-year.

The number of enterprises that completed disclosure procedures and shut down operations also rose 6.8 percent to 2,195. Most of these firms were small-sized, with registered capital of less than 10 billion VND each.

Last year, more than 94,750 businesses were established, with registered capital of 601.5 trillion VND, up 26.6 percent and 39.1 percent over 2014, respectively. However, last year also saw more than 9,400 firms dissolved and shut down, inching down 0.4 percent year-on-year.

According to a recently released GSO survey, many businesses active in the processing and manufacturing industry have been more optimistic about prospects in 2016 thanks to improvements in the final months of last year. Nearly 41 percent of respondents said they hope for better prospects this year, than seen in the final quarter of last year.

Further, up to 91.1 percent of respondents were hopeful that the number of new orders will rise or remain stable this year.

To conduct more effective business and production this year, GSO Director General Nguyen Bich Lam said the Government should offer incentive policies on credit, funds and market information access to encourage start-up firms.-

Vietnam calls for investment from Indian apparel mills

Vietnamese Ambassador to India Ton Sinh Thanh has called on Indian firms to invest in apparel production and supply in Vietnam during an investment promotion event with northern Indian textile mills in Ludhiana, Punjab State, India.

Thanh underscored opportunities created when Vietnam joined the Trans-Pacific-Partnership (TPP) agreement, which allows Indian apparel firms that invest and run their production in Vietnam to enter leading markets such as the US, the EU, Japan and Canada with a zero tariff.

General Director of the Export-Import Bank of India (Exim Bank) Mukai Sarkar, who conducted a fact-finding trip in Vietnam, highlighted favorable conditions for investment in Vietnam such as a convenient infrastructure, competitive labour costs, central and local incentives to stimulate investment on land leasing, and tariffs.

He also mentioned about Vietnam’s commitments on reform and a friendly social environment in the country.

To bolster bilateral cooperation in the sector, the Indian Government has offered a 300 million USD preferential credit for its businesses’ projects in apparel in Vietnam within a decade.

The event was jointly organised by the Vietnamese Embassy in India and the Export-Import Bank of India (Exim Bank) with participation from more than 30 members of the Northern India Textile Mills’ Association (NITMA), aiming to bolster Indian’s investment in the apparel sector in Vietnam.

The February 25 event also aimed to seek investments for Cambodia, Laos, and Myanmar, which, together with Vietnam form the CLMV region.

Punjab State has strength in cotton growing and apparel production.

Vietnamese goods to be displayed at Myanmar fair

The 2016 Vietnam-Myanmar trade service and tourism fair will be held in Yangon city, Myanmar, from April 1 to 4.

Hosted by the Ho Chi Minh City Investment and Trade Promotion Centre (ITPC), the fair is expected to offer Vietnamese enterprises a good opportunity to explore investment and trade opportunities in the growing market.

ITPC Director Pham Thiet Hoa said the fair would have 120 booths, providing information on trade, services and tourism in HCM City, and separate exhibition areas for hi-tech agriculture and building materials.

Municipal officials and businesses will conduct a market survey in Yangon and Mandalay cities from March 31 to April 5.

In his speech at a recent workshop in HCM City, Hoa said although the low-end consumption segment comprised the major part of the Myanmar market, the middle and high-end segments were being expanded thanks to the country's efforts to open up the market.

Myanmar consumers' taste was also affected by customs and religions, and they gave priority to shopping for goods for daily use and preferred to buy products with discounts or promotions, he said.

Economists say Myanmar is a good potential market for Vietnamese commodities, especially food, consumer goods, beverages and construction materials, besides machinery and products for agricultural production.

Many Vietnamese brands, such as Vissan food, Sa Giang rice products, Trung Nguyen coffee and Vinamilk milk and juice, as well as Dien Quang light bulbs and Dai Dong Tien plastic goods, have successfully made inroads into Myanmar's market.

Statistics from the General Department of Customs show Vietnam exported goods worth more than 378.5 million USD to Myanmar in 2015. Bilateral trade is still modest compared to their trade with other ASEAN countries.

Home shopping channel launched on VTVCab

The VTVCab Hyundai Home Shopping channel officially kicked off on February 26 in Hanoi.

The channel, which broadcasts 24 hours a day, is a joint venture of the local VTVCab, VTVBroadcom, and the Republic of Korea’s Hyundai Home Shopping Network.

The TV home shopping channel showcases a wide range of products, including apparel, cosmetics, household electrical appliances consumer electronics, software and furniture.

Tran Nam Trung, General Director of VTVBroadcom, said the channel will focus exclusively on unique, useful and practical items for their customers.

He said Vietnam’s retail market shows strong development and the home shopping trend is spreading rapidly. The VTVCab Hyundai Home Shopping channel is expected to meet market demand and play a leading role in the country's development.

Domestic exporters urged to restructure to utilise TPP deal

Vietnamese exporters should restructure their production to improve profit and enjoy preferential of the Trans-Pacific Partnership agreement (TPP), Tran Tuan Anh, Deputy Minister of Industry and Trade said.

Anh said agro-forestry and fishery sector has strengthened and has been one of Vietnam's key export products.

However, the products would lose their strengths in the middle- and long-term if businesses do not restructure production, thus bringing in higher added value, he said.

"This was the reason that Vietnam has issued the export strategy by 2020 with a vision to 2025 to take advantage of international integration," he added.

The wood sector has been considered one of the key export staples with an average turnover of 6 billion USD.

However, domestic wood exporters have focussed on products of sawdust, wood plank, ply wood, and fibreboard, in addition to furniture. Apart from furniture, the remaining products have been exported to the Republic of Korea, Malaysia, Taiwan and Japan as input materials for production of paper, medium fibreboard and interior furniture. These input materials will not be given tax reduction in the TPP.

Nguyen Tuan Viet, General Director of Vietgo, one of the companies specialising in import-export consultancy, said the various sectors in the country would have to change their structure as foreign firms with big capital and modern technologies would pour their investment into Vietnam to enjoy tax preferential under the TPP.

"There will be a wave of businesses from China and Sweden, the leading wood exporters in the world, to invest in furniture production in Vietnam," Viet said.

Nguyen Ton Quyen, Chairman of the Timber and Forest Product Association of Vietnam (VIFORES) said several wood producers have to strive to change their technology to produce products with higher quality and added value.

"This is one of the critical solutions needed to take advantage of integration," Quyen said.

In addition, several agricultural products such as coffee, dragon fruit and lychee would be hard to ship in big amounts to the big markets of the US and Japan which have strict food requirements. Vietnam would benefit most from the countries as the TPP comes into effect.

Being one of the key export products, the garment and textile sector has witnessed difficulties as most of the producers have been small- and medium-sized enterprises. With strict regulations on the certificate of origin, garment and textile firms would not enjoy a tax preferential if they still rely on imported materials.

Vietgo's CEO said they received five contracts from China in December to seek cotton and down and feather for jacket production.

"This has been a vital trend as the TPP will take effect soon. If local businesses do not change, they will become employees in their own country," he said.

He recommended that Vietnamese firms should invest in design, and material production to manufacture high quality products that penetrate demanding markets such as the US, Canada and Japan.

Domestic, foreign firms enter into valuable contracts at Vietship

Nineteen contracts and agreements on shipbuilding worth over 500 billion VND (22.4 million USD) were reached at the eighth International Exhibition on Shipbuilding, Shipping and Offshore Technology (Vietship 2016) from February 24 to 26.

Domestic and foreign partners signed the agreements with Vietnamese shipbuilding companies, said Nguyen Ngoc Su, Chairman of the members’ council of the Shipbuilding Industry Corporation (SBIC), which organised Vietship 2016.

They included a Memorandum of Understanding (MoU) between the SBIC and the bank BNP Paribas on shipbuilding funding and guarantees, and an MoU between the SBIC and Russia ’s Berkut company.

Another MoU was signed between A.S Associates Inc., One Asia Group and the Ha Long Shipbuilding Co. Ltd on building ships for US, European and Asian partners.

SeA Bank and Ha Long Company, which are Vietnamese firms, also agreed on the funding for shipbuilding and repairs.

Others agreed to build three chemical tankers, two high-speed patrol boats and two cargo vessels. Four fishing boat contracts were also signed, Su added.

The biennial event presents opportunities for businesses and investors to access the latest information in the field, share cutting-edge technology and seek investment opportunities to develop the shipbuilding industry in Vietnam and the world at large, Deputy Minister of Transport Nguyen Van Cong said at the opening ceremony.

The exhibition drew 220 stands from 130 companies, including 78 foreign firms from Germany, the Netherlands, Turkey, the US, France, the UK, Finland, Denmark, the Republic of Korea, Norway, Russia, Japan, Singapore, Malaysia and China.

Industrial production index expands by nearly 7 percent

The national index of industrial production (IIP) in the first two months of this year posted a year-on-year increase of 6.6 percent, according to the General Statistics Office (GSO).

The IIP in February had grown by nearly 8 percent against the previous year.

Growth was reported in production of automobiles (38.8 percent) and steel (28.3 percent), while that of paint, leather footwear, motorbikes, sugar, and mobile phones reduced by between 0.1 percent and 3.5 percent.

Localities where industrial production surged included Quang Nam (65.6 percent), Thai Nguyen (29.9 percent), Hai Phong (14.7 percent), Can Tho (13.4 percent), Da Nang (9.6 percent), Hai Duong (9.2 percent), Hanoi (8.5 percent), Dong Nai (8.4 percent), Ho Chi Minh City and Binh Duong (5.7 percent).

The inventory level of electronics, computers and optical production posted a modest growth of 1.1 percent while that of beverages, metal and motor vehicles increased sharply by 56.1 percent, 34.8 percent, and 32.2 percent, respectively.

Total workforce in the industrial sector expanded by 6.2 percent year-on-year.

11.3 trillion VND mobilised from Government bonds

A total of 11.3 trillion VND (491 million USD) was mobilised to the State Treasury through an auction of government bonds by the Hanoi Stock Exchange (HNX) on February 24, reported Lao Dong newspaper.

The sale includes 2 trillion VND (87 million USD) in three-year bonds, 8 trillion VND (348 million USD) in five-year bonds and another 1 trillion VND (43.5 million USD) in 15-year bonds with annual interest rates of 5.5 percent, 6.34 percent and 7.65 percent, respectively.

The other 300 billion VND (13 million USD) in 15-year bonds was raised through a secondary auction.

Since the beginning of this year, the State Treasury has generated more than 32.5 trillion VND (1.41 billion USD) from Government bonds via tenders.

Vietnam Airlines offers sales on Hanoi-Bangkok airfares

Flag carrier Vietnam Airlines on February 26 announced a week-long ticket sale for flights from Hanoi to Bangkok, Thailand next week.

Accordingly, round-trip airfare from Hanoi to Bangkok will be only 669,000 VND, or 29 USD, excluding taxes and fees. Terms and conditions are applied.

The promotion will be available between February 29 and March 6 for travel from March 22 to November 30 this year.

Tickets can be purchased through www.vietnamairlines.com and the airline’s booking offices and agencies nationwide.

Agro-forestry-fishery export picks up 5.5 percent

Agro-forestry-fishery exports were estimated to yield 4.2 billion USD in the first two months of the year, rising 5.5 percent from the same period last year, according to the Ministry of Agriculture and Rural Development.

Major farm produce shipped to foreign countries brought home 1.9 billion USD in revenue, a year-on-year increase of 4.2 percent. Meanwhile, aquaculture and forestry exports were calculated at 938 million USD and 1.1 billion USD, up 11.9 percent and 8.2 percent, respectively.

In February alone, the country raked in 1.88 billion USD from agro-forestry-fishery exports.

During the month, some 523,000 tonnes of rice were shipped abroad and brought home 228 million USD. Indonesia became Vietnam’s largest rice importer, accounting for 25.2 percent of the market share, followed by China at 12.51 percent.

Strong growth markets included the Philippines, Malaysia and Taiwan (China) while a sharp fall in rice consumption was seen in Ivory Coast, Hong Kong (China) and the US.

The country exported 125,000 tonnes of coffee in February, generating 210 million USD, bringing total coffee exports in the two-month period to 295,000 tonnes valued at 505 million USD, up 26.7 percent in volume and 2.9 percent in value. Germany and the US remained Vietnam’s biggest coffee importers with 18.68 percent and 13.07 percent of the market share, respectively.

Some 35,000 tonnes of rubber worth 38 million USD were sold to foreign countries in February, lifting total rubber exports in the first two months to 128,000 tonnes valued at 143 million USD, down 3.7 percent in quantity and 24.6 percent in value. The largest rubber consumers were China, India and Malaysia.

The value of aquatic product exports in the month contributed 466 million USD to overall January-February seafood exports of nearly 1.1 billion USD, up 8.2 percent compared to the same period last year.

However, the country also splashed out 1.15 billion USD on agro-forestry-fishery imports. Thus, total imports in the first two months were 3.08 billion USD, dropping 8 percent against the same period last year. Imports of major products were 2.2 billion USD, a year-on-year decline of 7.7 percent.

Vingroup sells $134m of corporate bonds

Real estate developer Vingroup (VIC) announced that it has sold VND3 trillion (US$133.9 million) of corporate bonds under the guarantee of Credit Guarantee and Investment Facility (CGIF), a trust fund of the Asian Development Bank.

The fixed-rate senior unsecured bonds in five-year and ten-year bonds were sold at the coupon rate of 7.75 per cent and 8.5 per cent respectively.

According to the group, it was the first time that CGIF has guaranteed bond issuance by a real estate developer from the ASEAN's member and is also its largest transaction in Viet Nam to date.

With a market capitalisation of $3.7 billion as of 31 January 2016, VIC is the largest listed developer and manager of real estate, hospitality and entertainment properties in Viet Nam. It is also working in consumer retail, healthcare, education and agricultural products.

Kiyoshi Nishimura, Chief Executive Officer of CGIF said, "It is a landmark transaction for CGIF because it debuts our support for the real estate sector in rapidly growing ASEAN economies like Viet Nam to meet their challenges from the increasing rate of urbanisation and demand for real estate." He added that the transaction proves that the local currency bond market could be a vital source of funding that appropriately matches the needs of integrated real estate developers like Vingroup.

Daiwa Securities to increase stake in SSI

Japan-based Daiwa Securities Group will be investing approximately 20 billion yen ($177 million) in Vietnam’s Saigon Securities Inc. (SSI), in a bid to expand its operations in the Southeast Asian region, according to Nikkei Asian Review.

Daiwa will be taking advantage of the recent signed Trans-Pacific Partnership trade pact and the removal of foreign ownership limit in the securities sector in Vietnam, to boost its 10 per cent stakes (48,106,610 shares) in SSI to 15,54 per cent (74,606,601 shares).

When the deal goes through, Vietnam's largest securities firm will become an equity-method subsidiary, giving Daiwa a greater say in management. The two companies entered into a capital and business tie-up back in 2007.

The transaction is estimated to take place between February 25 and March 25, via put-through or order-matching method.

Sapphire divests shareholding with Refico and exits the City Garden JV

Sakkara Asia Pacific Project Holding Investment Real Estate JSC (Sapphire) announced today that it had divested its minority shareholding in both Refico Real Estate Group and in the City Garden joint venture.

“Sapphire has successfully delivered high quality projects in Vietnam both independently and through managing joint venture partnerships,” said Sapphire’s joint managing director David Bedingfield. “As our business grows, we recognise that when we are a meaningful shareholder and are able to manage the project, the outcome is better.”

Sapphire recently topped out the first of its prestigious villas at HOLM, a residential community in Thao Dien in Ho Chi Minh City, and has commenced selling for the second phase of Sanctuary Resort, a luxury beachfront residential community in Ho Tram in the southern province of Ba Ria-Vung Tau.

In addition to existing projects, Sapphire has a strong project pipeline and is actively seeking well-located, medium to large-scale projects for office, industrial, residential apartments and houses and mixed-use developments. The group is willing to acquire land or joint venture with landowners. Together with established investor relationships, Sapphire is supported by Sakkara Group, Australia, whose global experience spans 86 projects valued at more than $2.5 billion since 1997.

“Sapphire is an innovator and we have evolved cutting-edge solutions to answer the needs of an ever more sophisticated customer,” Bedingfield said. “From Centrepoint, which was the country’s first true eco-office building to President Place, which provides a true balance of work and lifestyle in the heart of the city, we feel it is important to continue to add value to our projects, particularly in an increasingly competitive and dynamic marketplace.”

Vietnam 2035 report released

A report was released in Hanoi on February 23, laying out a path for the country to reach upper-middle income status by 2035.

The report “Vietnam 2035: Toward Prosperity, Creativity, Equity and Democracy” was jointly prepared by the World Bank (WB) and the Vietnamese Government.

At the launch ceremony, Minister of Planning and Investment Bui Quang Vinh said the report comprises of seven chapters that deal in-depth with three development pillars and make recommendations for turning Vietnam into an upper-middle income country by 2035.

Accordingly, the Southeast Asian nation must have a high and continuously stable growth rate in the next two decades, with an annual GDP growth of 7 percent (equal to around 8 percent annual growth), reaching $15,000 – $18,000 per capita by 2035.

The report focuses on three areas: improving productivity and private-sector competitiveness, promoting equity and social inclusion, and improving public sector effectiveness.

It proposes strengthening the economy and the financial sector, focusing on more effective regulation, protection of property rights and enforcement of competition policies.

It also recommends Vietnam consider new policies and investments supporting the growth of industries linked to global supply chains, along with smarter use of international trade agreements like the Trans-Pacific Partnership.

Improvements to the agriculture sector – which employs nearly half of the nation’s workforce – as well as stronger environmental protections and better planning for clean energy generation are recommended.

The report also calls upon Vietnam to continue fostering equality and social inclusion by providing greater access to opportunities for minorities, people with disabilities and women, and delivering public services that provide to an aging, urbanised and middle-class society .

The report recommends governance improvements to help boost accountability and transparency, and ensure Vietnam has strong institutions to keep pace with the country’s rapid development. Another recommendation calls for Vietnam to strengthen state accountability by ensuring checks and balances between the three branches of government and creating opportunities for citizen feedback on public service delivery.

At the ceremony, Deputy Prime Minister Vu Duc Dam highlighted achievements during the Doi moi (Reform) process launched in 1986, noting that aspirations for a bright future with an affluent economy, sustainable environment and a free, prosperous and happy life for all people requires more effort from Vietnam.

He said “Vietnam 2035” is an important report on a Vietnam in the next 20 years. The Vietnamese Government will refer to its suggestions while making policies, including the socio-economic development plan for 2016 – 2020 and the socio-economic development strategy for 2020 – 2030.

Meanwhile, World Bank Group President Jim Yong Kim considered the report as important to both Vietnam and the World Bank, adding that their cooperation in preparing the report illustrated the World Bank’s commitment to helping with Vietnam’s development.

Vietnam has a strong aspiration, which is to become a modern industrialised country towards prosperity, creativity, equality and democracy. That aspiration can be realised through institutional reforms and support policies based on the three pillars: economic prosperity with environmental sustainability, equity and social inclusion, and a capable and accountable state, he noted.

 Ben Tre Province steadies faltering coconut industry

Ben Tre Province, the country's main coconut growing area, has decided to offer assistance to coconut growers whose livelihoods have been affected by the difficulty they face in selling their products.

It will provide them with a certain volume of fertilisers per hectare of coconut trees to help them improve productivity and sustain their orchards.

Besides, farmers who plant cacao or breed shrimp in their coconut orchards will be fully subsidised since those are two items the province wants people to farm.

The province encourages and facilitates enterprises to buy coconuts directly from farmers to cut out intermediary costs.

It also encourages them to innovate technologies, improve quality and diversify products, and provides them with financial assistance to promote their coconut-based products abroad.

Ben Tre Import Export Joint Stock Company (Betrimex) ranks among the pioneers in the province in establishing harmonious relations with coconut growers, enabling the latter to continue earning a living from coconut.

The company buys coconuts at a fair price, helping farmers sustain production and feel secure about their livelihood.

Betrimex is also committed to investing in technological innovation to meet the demands of high-end markets, and creating a closed production loop to minimise costs.

Last year, besides making traditional products like desiccated coconut, coconut-shell charcoal, and coconut oil, fibre, net, and others, Betrimex invested US$20 million in setting up the biggest coconut water and coconut milk plant in Viet Nam to supply to export to markets in Asia, Europe, the Americas, and Africa.

They were aimed at creating value addition for coconuts and increasing the value of Viet Nams agricultural produce.

Speaking about the companys Strategic Development Plan for up to 2020, Dang Huynh Uc My, chairwoman of Betrimex, said: "We are focusing on developing products with high added value such as coconut water, coconut milk, and activated carbon.

"In addition to having collection centres in key coconut areas, we are also restructuring the operation model and arranging centralised production."

Coconut plays an important role in Ben Tre's economy and social security since coconut farmers make up nearly 40 per cent of its population.

Around 2,000 processing and trading firms operate in the industry, creating thousands of jobs.

In recent times selling coconuts and coconut-based has faced difficulties following an increase in the area under the nuts as well as processing capacity.

Besides, the prices of dry coconut have fallen sharply because of a decline in global demand and prices.

Trade counselors visit Vietnam’s largest dairy company

The Ministry of Industry and Trade’s mission led by deputy minister Nguyen Cam Tu together with 73 trade counselors and Vietnamese ambassadors visited the super milk plant of Vietnam Dairy Products Joint Stock Company (Vinamilk) in the southern province of Binh Duong on February 23, on occasion of their business trip to the Southern region.

The plant coming into operation in 2014 is one of Vinamilk’s two super plants in Vietnam, said director general Mai Kieu Lien.

It was built at a total capital of VND2.4 trillion (US$107.26 million) with the capacity of 400 million liters of milk a year in the first phase, which will double in the second phase this year.

Vinamilk now has 13 plants in Vietnam and holds a large local market share. Besides, it has expanded exports products including condensed, fresh, formula and soy milk, yoghurt, fruit juice and ice cream to 42 nations in the world.

Last year the company earned the revenue of about VND40.22 trillion (US$1.80 billion), up 15 percent over 2014; submitted VND3.92 trillion (US$175.53 million) to the state budget, up 12 percent; and marketed nearly 6 billion milk products.

Vinamilk hoped that it could catch up with regional and international milk import demand through trade promotion activities under the coming trade counselor conference 2016 by the Ministry of Industry and Trade, Ms. Lien said.

Assistances by trade counselors and Vietnamese ambassadors have significantly contributed in taking Vietnamese milk products to the world market with quality not inferior to products of other nations and competitive prices, she added.

The company has invested in many sides to take advantage of incentives from free trade agreements, she affirmed.

Large number of steel imported in 2015

A large number of steel totally worth US 9 billion was imported in 2015, announced the Vietnam Steel Association (VSA) yesterday.

Of the amount, the rate of made-in- China steel is 52 percent. In 2015, Vietnam bought 19.83 million tons of finished and semi-finished steel products, equivalent to US$9 billion, an increase of 27.24 percent compared to 2014.

Though the country’s export steel value reached US$2.46 billion, the value decreased by 14 percent compared to 2014 and the country’s major steel markets were Asian countries with over 75 percent.

VSA said that nearly 551,000 tons of steels were consumed in the country in January 2016, a surge of 36.6 percent compared to same period last year.

Local steel manufacturers said that prices of steel materials and billets are on upward trend after plummeting for a long time. Compared to December 2015, prices of steel material hiked by US$10-15 per tons and steel billet went up by SU$10 a tons.

Preventing a slowdown in agricultural exports

The downward trend in Vietnam’s agro-forestry and fisheries exports has yet to show signs of stopping. After declining 2.6% last year, export revenues of the agricultural sector continued to see a year-on-year decrease of 3.1% in the first month of 2016, with fisheries export value down 8.8% at US$455 million, and the export value of key wood items estimated at US$520 million, down 15.1%.

A number of reasons have been cited as explanation for these declines. However, it is necessary to review the issue in a serious manner so that the sector and relevant agencies can take drastic action from the beginning of the year in order to prevent the slowdown as well as promote the high growth again.

Looking at the situation, there remains hope for new transformations as alongside several items facing difficulties, some others are enjoying opportunities for greater export growth than last year. For example, despite a fall in export values of forestry and fisheries products, export values of major farming products have been estimated at US$1.6 billion since early this year, up 2.8% year on year. Notably, rice exports hit 495,000 tonnes and US$218 million, up 56.7% in volume and 46% in value compared to the same period of 2015.

The agricultural export market looks strong for 2016 and years ahead, because these items always see stability regarding market demand. Especially in 2016 as Vietnam’s free trade agreements (FTAs) signed with others take effect, the country’s farming products will enjoy big incentives in terms of tax, thereby having their competitiveness strengthened compared to products of the same type from other countries.

In order to turn opportunities into reality, besides expanding export markets and boosting trade promotion, attention should also be paid to supporting entrepreneurs operating in the fields of trade and exports, in terms of essential issues, including providing information on integration so that the business community has better access to integration commitments and frameworks, as well as get a timely and thorough understanding of the government’s macroeconomic policies to devise relevant business strategies.

As FTAs take effect, there will be more technical barriers to trade established by countries, which could possibly get Vietnamese enterprises involved in trade lawsuits. Providing legal support to solve disputes in lawsuits, anti-dumping and trade remedy measures of other countries also works to enhance the competitiveness of Vietnamese enterprises in the international market. It is also necessary to maintain a stable business environment for enterprises through publicising and simplifying administrative procedures and boosting the update of information on markets and partners, as well as create a connection between local enterprises with foreign markets via trade deals to fully tap export opportunities.

If these measures are implemented drastically from the beginning of the year, plus with efforts by each enterprise, Vietnam’s agricultural exports will be able to achieve the envisaged goal (reaching about US$31 billion) and run the opportunity to create breakthroughs.

Report lays out reforms for Vietnam to achieve prosperity in 20 years

A joint report by the Vietnamese government and the World Bank has recommended reforms necessary for Vietnam to become an upper middle income country in the next 20 years.

The report, titled Vietnam 2035, suggests that Vietnam build a more competitive private sector, support smart urbanisation, promote innovation and take advantage of increasing trade opportunities to enact broad structural reforms.

Reaching the upper middle income status is an ambitious goal and requires Vietnam to grow at least 7% in each of the next 20 years to raise per capita income to over US$7,000 or US$18,000 in purchasing power parity terms by 2035.

The report underlines economic growth balanced with environmental sustainability, equity and social inclusion, and a rule-of-law state as the three pillars to realise Vietnam’s aspirations.

Speaking at the launch of the report on February 23, Minister of Planning and Investment Bui Quang Vinh warned that without these reforms, it would be hard for Vietnam to avoid falling into the middle income trap and lag behind.

He considered these reforms a continuation of the historic Doi Moi process and the only choice for Vietnam to reach the goal of becoming a prosperous country.

Minister Vinh said that the achievements of Doi Moi are undeniable but Vietnam remains a poor country in relation to regional countries, citing Japan and the Republic of Korea as success stories of transforming from poor to developed economies.

He emphasised that the need for further reform is more urgent than ever as Vietnam’s golden population period is nearing its end, the motivations of the Doi Moi reform are dwindling and Vietnam is becoming more deeply integrated in the world.

World Bank Group President Jim Yong Kim said Vietnam should build modern and transparent institutions to help the country meet its ambitious goal of becoming a modern industrialised nation within a generation.

He said improvements in productivity, environmental protection and economic innovation can help Vietnam maintain high levels of growth, and that it is critically important to remove barriers that exclude marginalised groups and deliver quality public services to an aging and urbanising middle class.

Vietnam seeks more rice export markets

The Ministry of Industry and Trade (MoIT) held a meeting between trade counsellors and domestic rice enterprises in Ho Chi Minh City on February 22 to discuss measures to expand export markets for Vietnamese rice in 2016.

Vietnam exported nearly 6.6 million tonnes of rice in 2015 worth over US$2.8 billion, up 4% in terms of volume but down 4.5% in terms of value compared to 2014.

It is forecast that Vietnamese rice exports in 2016 will face unpredictable developments due to impacts of the El Nino phenomenon, salt intrusion and the competition from large rice export countries including Thailand, India, and Pakistan among others.

The main rice export market of Vietnam in 2016 will be China which imported around 3.35 million tonnes of Vietnamese rice in 2015, accounting for 54% of China's total rice import.

The large volume of Vietnamese rice exported to China will pose a high risk to Vietnam, requiring Vietnamese rice enterprises to expand into other markets including Europe, the US, Japan, the Republic of Korea and others to reduce the dependence on China.

However, such markets use premium rice products while Vietnam has exported only 27% of high quality rice and Vietnamese rice has yet to build a famous brand in addition to limited trade promotion activities.

Thus, it is important to improve the quality of Vietnamese rice, boost the building of brand and trade promotion.

MoIT Deputy Minister Tran Tuan Anh said that domestic rice exporters still lack information on rice markets, particularly information on new markets, asking for more support and co-operation from trade counsellors in foreign countries and authorised agencies to help domestic rice firms to promote export. The MoIT also needs to renew trade promotion activities in accordance with specific markets, Anh noted.

In the coming time, the MoIT will increase the dissemination of information on free trade agreements to farmers and rice exporters to help raise their competitiveness and take advantage of such agreements, Deputy Minister Anh added.

VN’s businesses ready to welcome cooperative opportunities of TPP

Trade Counselors affirmed that the Trans-Pacific Partnership Agreement will bring huge opportunities for Viet Nam to attract more investment and boost up exports at a meeting in Ho Chi Minh City on February 22.

Trade Counselor to Japan Nguyen Trung Dung revealed that Japan has been one of the largest investors in Viet Nam.

As the two nations are members of the TPP, the connection between localities and sectors will help them take advantages of the TPP, he added.

From the Viet Nam Trade Office in the US, Commercial Counselor Dao Tran Nhan said that when all free trade agreements, including the TPP are inked, new opportunities for enhancing exports in Viet Nam’s industrial and commercial sectors will be created.

When the TPP comes into effect, almost of all tariffs on Viet Nam’s garments and footwear imported in the U.S. will be reduced to 0%.

The market share of Viet Nam’s footwear in the U.S. will be raised from 12% to 22% by 2019.

Currently, a wave of foreign investment are being poured in Viet Nam in the textile, dyeing, garment and footwear sectors to take advantages of the TPP so domestic businesses need to be well-prepared for welcoming cooperative opportunities with foreign partners.

Efforts exerted for NPLs settlement

The close coordination among the Viet Nam Asset Management Company (VAMC), credit organizations, and enforcement agencies led to positive signals in settlement of non-performing loans (NPLs).

The VAMC reported that it bought 24,512 debt deals worth over VND 243 trillion from 41 credit organizations.

Regarding debt withdrawal, VAMC cooperated with credit organization to recover over VND 17 trillion in 2015 and VND 22 trillion in the 2013-2015 period.

VAMC also sold VND 1.1 trillion of debts in 2015 and VND 2.9 trillion in 2013-2015.

VAMC Chairman Nguyen Quoc Hung was quoted as saying that right after the Minister of Justice and the Governor of State Bank of Viet Nam signed a cooperative agreement, law enforcement was more positive.

The General Department of Civil Judgment Enforcement is working with the VAMC and credit organizations to review feasible cases with a view to making breakthroughs in NPLs settlement in 2016, said Mr. Hung./.

Processing & manufacturing see positive signs

Up to 91.1% of processing and manufacturing enterprises were upbeat about economic prospect with higher contracts, according to the General Statistics Office (GSO).

The GSO recently released a report on business trend of processing and manufacturing enterprises.

About 90.8% of respondents forecast that export contracts would rise in 2016.

A majority of surveyed processing and manufacturing enterprises said that the business environment was improved.

Over 80% of enterprises assessed that business trend in Q1, 2016 would get better or more stable.

Meanwhile, 17.7% of enterprises were pessimistic about business prospects in 2016.

The GSO reported that processing and manufacturing was the most attractive FDI sector in Viet Nam by luring over 70% of total FDI inflows./.

Optimistic home appliances retailers plan to expand

Many home appliances retailers are planning to resume their stalled projects to open more stores given the positive market outlook this year.

Tran Tan Hoang Hau, marketing director of Thien Hoa Electronics and Furniture Shopping Center, said the store chain would open a new outlet in mid-May as part of a sales network expansion plan for this year. However, he did not reveal an exact number of new stores.

This project was delayed last year. This long-term investment should be calculated carefully, Hau said.

Tran Dinh Luu Phong, marketing director of De Nhat Phan Khang, another major home appliances retailer, said it would have four more stores on September 2, taking to 17 the total number.

Last year, the electronics chain planned three new stores in districts Thu Duc, 7 and Go Vap but the plan was suspended due to market downside risk. The firm has decided to restart its network expansion project, Phong said.

For Phan Khang, HCMC and neighboring provinces like Tay Ninh, Long An and Dong Nai remain Phan Khang’s key target markets.

However, Phong said, the cost concern has forced the firm to scale down store sizes. The forthcoming stores will cover around 1,200 square meters each, smaller than the current stores and just half the size in the initial plan, Phong noted.

According to appliances retailers, the resumption of those expansion plans results from better-than-expected sales at Tet (Lunar New Year holiday), a continued recovery of the real estate market and an improvement of key macroeconomic indicators.

Another appliances retail chain, Dien May Xanh, is pinning hopes on more market growth this year.

Tran Kinh Doanh, general director of Dien May Xanh, said Dien May Xanh still sees HCMC and Hanoi as key markets while 12 other cities and provinces where Dien May Xanh is not yet present are still on its radar.

The company looks to have at least 15 stores in Hanoi and expand the HCMC store network to the city’s outlying areas, Doanh said. It has 15 stores in HCMC at the moment.

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