SBV sells out gold at latest auction

The State Bank of Viet Nam sold all 15,000 taels of gold offered in the 64th auction to 11 credit institutions at VND37.28-37.29 million (US$1,775-1,775.7) per tael yesterday.

Gold prices declined slightly by VND60,000 (nearly $3) per tael on local markets when the Saigon Jewellery Company (SJC) posted a rate of VND37.25-37.35 million ($1,773-1,778) on its website at 3pm.

Meanwhile the kitco.com trading floor listed the price at $1,289 per ounce, or $1,564 per tael, leaving prices in Viet Nam $214 per tael higher than global rates.

Since March 28, SBV, the only gold importer in Viet Nam, has sold about 1.65 million taels of gold at its auctions.

The Viet Nam Association of Financial Investors (VAFI) called for a special consumption tax on gold, suggesting a rate of 20 per cent for gold and gold jewelry purchasing.

The association said gold and gold jewelry trading should be added to the list of products on which consumption tax is imposed, which includes beverages, beer, cars and automobiles, as gold and gold jewelry are also luxury goods that need to be under control.

The tax would only be applied to the buying side. People were encouraged to sell their gold to the State Bank of Viet Nam with no tax.

VAFI said this was the only way to prevent the "goldisation" of the economy, which refers to people's propensity to use gold instead of money.

VAFI stated that the State Bank of Viet Nam's gold auctions could not solve the problem but would only benefit a few gold trading companies while ordinary buyers suffered losses.

VAFI predicted its solution would save billions, bringing another $30 billion to make the $60 billion forex reserves and improving the Vietnamese economy.

Farm expo opens in HCMC

Agricultural products and state-of-the-art equipment and technology for storage and agro-processing are being showcased at the five-day Viet Nam Farm Expo at the Tan Binh Exhibition and Convention Centre in HCM City.

More than 80 enterprises with 150 booths are displaying key Vietnamese agricultural products for export such as rice, coffee, vegetables, cashews, pepper, seafood and rubber at the event, which opened on Thursday.

The event connects domestic producers and enterprises as well as international importers.

It is expected to attract 5,000 domestic and foreign enterprises, importers and distributors in the agricultural sector from many countries, including Australia, South Korea, Thailand, Malaysia, Singapore, the US and Indonesia.

Seminars on export markets and updated legal regulations for export to the US have been organised by the HCM City Union of Business Associations and Dong Nam Advertising and Commercial Promotion JSC.

Atkins seeks to join infrastructure projects

Atkins is looking for more opportunities to participate in projects in infrastructure and other areas in Vietnam after the global design, engineering and project management firm has involved in a number of hotel and commercial projects in this country.

Alex Winchester, regional business development and commercial director of Atkins for Asia Pacific, said the company expected the chance to plan, design and enable projects in Vietnam, as the country was in dire need to speed up infrastructure development, including metro and urban rail projects in HCMC and Hanoi as well as new airports around the country.

“We will look at all the opportunities that are on for tender… We are exploring, discussing with people how we can assist whether it is a metro or the new airport,” Winchester said.

Winchester told the Daily about the chance for Atkins to join the major infrastructure projects underway in Vietnam, including the big-ticket Long Thanh airport project in Dong Nai, before he left Vietnam on Thursday after a business trip.

Winchester told reporters that Atkins had discussed with HCMC’s relevant authorities about metro development and the feedback was that they were keen on the expertise and others that the company was able to offer. He emphasized the company would continue discussion with the city on this topic.

“We need to learn the best work that the authorities here want. We need to understand what is the best way for us to work in order to realize their expectations,” Winchester said and added that doing something critical for the first time like the metro required much time.

HCMC is making every effort to develop metro lines with combined investment capital of billions of U.S. dollars in order to ease traffic pressure in this economic hub of Vietnam and to increase the transport capacity of public means, which now meet less than 10% of the demand.

Winchester noted it was not easy to build a metro line in a heavily-populated urban area in general, especially where there are historical buildings when having to ensure construction to progress while traffic flow still went. Therefore, the experience and know-how of global companies will help much in this case.

Given Vietnam’s growth and its infrastructure development, Winchester said Atkins had placed Vietnam in its list of three new key markets in Asia Pacific. The others are Malaysia and Singapore.

Atkins is also eyeing other promising markets of the region, including Indonesia, the Philippines, Thailand and Myanmar. “But, that’s later. So, Vietnam is our first selection for our business development,” Winchester said.

Atkins has opened an office in Vietnam. Winchester said Atkins had worked on the concept designs for a number of projects in Vietnam, including Vung Ro Bay master plan and hotels in HCMC and Nha Trang.

“All the projects are at the concept stage. As we spoke earlier that learning how to work in a new country means learning about the time, from one stage to another,” Winchester said.

SBV promotes technology application in management

The State Bank of Vietnam (SBV) on October 8 inaugurated and put into use a system of collecting and processing foreign exchange transaction information in the inter-bank foreign exchange (FX) market via the Reuters Dealing system.

The system was built and provided by Thomson Reuters, which is the world's leading company in providing solutions to gather, manage, store and analyse FX transaction information, under a contract it signed with the SBV in January this year.

Based on the Reuters Dealing electronic transaction system, which is widely used by many banks in Vietnam and the world, the system allows the immediate count of all inter-bank FX transactions conducted via the Reuters Dealing system.

According to a representative from Thomson Reuters, the system will contribute to improving the SBV’s management, while promoting the long-term development of the inter-bank FX market.

The SBV has applied the system in more than 60 financial institutions that have FX transactions with the bank. The system is expected to be used for other credit organisations in the future.

Experts promote sustainable aquaculture practices

Application of good agricultural practices, or GAP, to improve quality and safety will enable sustainable development of aquaculture, a conference heard in HCM City on October 8.

The conference sought to create a platform for stakeholders in aquaculture to share information and seek co-operation in strengthening application of VietGap, the Vietnamese version of GAP, and boosting sales of VietGap-certified products.

Pham Anh Tuan, the Fisheries General Department's deputy general director, said rapid development of the aquaculture industry in the last few years has led to environmental pollution and disease outbreaks, threatening the industry's development.

Consumers nowadays not only demand quality products but are also concerned about how they are produced, he told the conference, organised by the General Department of Fisheries and Metro Cash&Carry Viet Nam.

"Like other aquaculture certificates such as GlobalGap and ASC, VietGap certification also covers environmental protection, food hygiene and safety, social responsibility, and product origin to ensure our aquaculture industry can produce a lot of fish and shrimp, but do not have an adverse impact on the environment and can easily trace product origins."

It would help Vietnamese aquaculture products gain wider acceptance in both domestic and international markets, he said.

Nhu Van Can, deputy director of the Department of Aquaculture, said the country's good agricultural practices focus on inspection of on-farm production and inputs to raise awareness of standards among producers and develop brands for Vietnamese aquaculture products.

When farmers adopt VietGap they can easily upgrade to other certificates required by import countries, he pointed out.

Under the Government's policy on VietGap development in aquaculture, the country would foster its application in breeding of key export items like tra fish, tiger prawn, and white-leg shrimp, he said.

Government agencies are also working to find more markets that accept VietGap-certified products, he stated.

But he admitted that it is not easy to popularise VietGap among aquaculturists.

Many participants said farmers are reluctant to adopt the safe production method because they think it is expensive and makes them uncompetitive.

Tuan said adoption of VietGap standards may cause high production costs in the initial stage, but in the long run it helps reduce costs and improve the quality and competitiveness of Vietnamese goods.

Adopting the standards helps farmers sell their produce more easily and significantly cut costs since fish contract fewer diseases, he explained.

Philippe Bacac, chairman and managing director of Metro in Vietnam , said his supermarket has co-operated with the Ministry of Agriculture and Rural Development to develop the fisheries sector as part of the "Public Private Task Force on Sustainable Agricultural Growth in Vietnam ."

The programme aims to raise productivity and incomes for farmers while securing the sustainability of both the fisheries industry and the environment, he said.

Under the programme, since 2011 Metro has worked with farmers in the Cuu Long ( Mekong ) Delta to ensure the supply of best quality products for its outlets.

Truong Dinh Hoe, general secretary of the Viet Nam Association of Seafood Exporters and Processors, said: "Most seafood processing firms have good food safety control systems. We need to focus more on checking the pre-processing stage to ensure sustainable development ."

APEC urged to build enterprise support centre

The APEC Business Advisory Council (ABAC) has called on APEC to set up a centre supporting small, micro and medium-sized enterprises (SMMEs) in the region to promote economic development.

The recommendation came following ABAC’s two-day meeting in Bali, Indonesia on October 6 and will be submitted to APEC leaders for consideration at their ongoing summit.

The centre will use advanced technology to facilitate trade and ensure the efficiency of e-commerce system.

Vice Chairman for APEC Small Medium Enterprises Entrepreneurs, Erwin Aksa, stressed that SMEs had played an important role in promoting regional and global economic growth in the future.

ABAC will also propose the drafting of a policy that guarantees SMEs access to capital sources, especially Public Business Credit, he added

Meanwhile, Chairman of the ABAC SMME Working Group, Juan Raffo, said it is necessary to facilitate SMMEs’ access to capital resources, while providing them with the requisite consultancy to help promote their business.

Vietnam- Russia Trade and Investment Forum 2013

Vietnamese and Russian businesses have signed 10 cooperative agreements including foodstuff, agricultural processing, medicine and tourism at the Vietnam- Russia Trade and Investment Forum 2013.

The Vietnam- Russia Trade and Investment Forum 2013 opened in Moscow on October 7 to exchange and seek trade and investment opportunities.

The forum, co-organised by the Vietnam Embassy in Russia and provincial Kursk authority, introduced investment opportunity in diverse fields, especially in agriculture, food processing, mining and construction.

Addressing at the forum, Vietnamese ambassador to Russia Pham Xuan Son said the forum had provided a good opportunity for both sides to explore opportunities and find economic-trade and investment partners.

Besides traditional cooperation fields, Russian participants at the forum expressed interests in expanding their cooperation in culture and tourism

Kursk Mayor Alexandr Mikhailove expressed his hope that Russian and Vietnamese businesses will hold similar events in the future. He also affirmed that the provincial authorities will create all favourable conditions for entrepreneurs from Vietnam and Russia to do business.

Two-way trade between Vietnam and Russia was estimated at 1.4 million USD. Vietnam mainly imports sugar, chemical, fertiliser, and machinery, while exporting tea, coffee, and handicraft products to the market.

Wild veggies a new delectable, healthy dish

As many as 126 breeds of wild vegetables specific to Vietnam are being scientifically identified and studied to ensure that the increasingly common addition of such plants to restaurant and family menus is a healthy choice. Tuoi Tre newspaper reports.

Gone is the time when wild vegetables were limited to the daily meals of the ethnic minority people who live near forests.

In the past few years, these plants have become increasingly popular in restaurants of Lam Dong province’s Dalat city. They are a newfound delicacy, popular with tourists and locals alike.

According to Mai Xuan Dung, who owns a small chain of restaurants in Dalat, nothing was known about these wild vegetables until recently, when they suddenly became popular.

A plate of mixed vegetables such as “la bep”, “sam dat”, “mountain mong toi,” and “rau phan”, all popular choices, varies from 40,000-70,000 VND (2-3.3 USD).

“Wild vegetables are now ‘in vogue’ as they are highly nutritional, hygienic and relatively cheap. On a busy night, we often run out of them,” Dung said.

The vegetables are usually prepared into simple but tasty boiled and fried dishes and soups.

Most of the vegetables come from ethnic minority households in such districts as Lac Duong, Da Huoai and Da Teh.

Lien Kim, a farmer in Lac Duong district, said that since orders from restaurants started flooding in, he has begun to grow them himself while continuing to harvest those that grow naturally in nearby forests.

“Wild veggies are very easy to grow and safe for human consumption. They don’t require much care, such as plowing or fertilisers, or processing time before cooking. We’re planning to increase our growing areas to cope with the surging demands,” Kim added.

Attracted by the ease of growth and high profitability, many locals have asked Kim f or seedlings to grow them at home.

The owner of Chau Loan restaurant, located near Lang Biang tourism complex in Lac Duong district, said that most of her customers order dishes with wild vegetables.

She has to place orders with the farmers a long time ahead, and even sends her staff to purchase them directly at the farms in Dalat or neighboring provinces.

The vegetables have recently become her restaurant’s main specialty and are now a fixture on the menu, as her daily revenues drop by half on days when she runs out of them.

“Many diners also ask us for fresh tender shoots to grow them at home. Maybe we’ll build a sapling greenhouse soon,” she smiled.

Few know that behind the increasing popularity of wild vegetables on the menus is a large-scale scientific project to identify and study the vegetation thoroughly.

“I was quite surprised seeing the ethnic minority people cook the vegetation they bring home from the forests. But when offered, I was really amazed at their delicious, exotic taste,” Luong Van Dung, vice dean of Dalat University’s Biology Faculty and the project manager, recalled when asked why he chose to research wild vegetables in the first place.

The research team currently has 252 dried specimens of the 126 breeds, which range from edible vegetables and seasoning herbs to those with medicinal properties and can cure such ailments as hypertension, coughs, toothache, hepatitis and rheumatism. The vegetables all contain proteins and lipids, and a number contain valuable amino acids.

Among the 126 studied breeds, one plant, “dang sam” (codonopsi javanica), has been enlisted in the Vietnam Red Book of Endangered Species. Thirty-two of the plants are both tasty and boast medicinal properties.

According to Dung, cultivation of clean wild vegetables is possible using local farmers’ safe, meticulous farming techniques.

The team has selected nine highly nutritious and best tasting breeds for experimental farming. They are all easy to grow and can be grown alongside industrial plants such as coffee, rubber and cashews year-round.

“The project has mapped out a new direction for wild vegetables regarding their nutritional and economic values, while attending to the conservation of such valuable natural resources. We’re positive that with the proper attention, we can maintain the development of these valuable plants,” said Phan Van Dat, from the provincial Department of Science and Technology.-

Taiwan firms explore distribution opportunities in Vietnam

Executives from 46 Taiwanese companies are in Ho Chi Minh City looking for distributors and franchisees to sell their products in the country.

At an exchange organised on October 4 by the Taiwan Trade Centre (Taitra), they showcased products like cosmetics, home appliances, machinery, automobile parts, many of them technologically advanced.

Food, foodstuff, cosmetics, and other companies looking for franchise partners were introduced to Vietnamese companies, the first time Taiwanese franchise opportunities have come up here, a Taitra official said.

She added that a similar exchange had been organised a few months ago, and it was extremely successful.

Many Vietnamese companies saw the benefit in cooperating with Taiwanese companies and approached Taitra looking for more opportunities, she said.

Trade ties between Vietnam and Taiwan are on the upswing, more than 6 percent year-on-year in the first eight months of this year to 7.5 billion USD.

Vietnam's exports were worth nearly 1.7 billion USD, a 14 percent jump, while its imports rose 4 percent.

Vietnam has a trade deficit of 4.1 billion USD with Taiwan, but the figure is gradually reducing.-

Rubber exports to fetch 4.5 billion USD this year

The rubber industry expects to bring home 4.5 billion USD in export this year, according to Tran Thi Thuy Hoa, Chief of the Office of the Vietnam Rubber Association (VRA).

In an interview granted to Thoi bao Kinh te Vietnam (Vietnam Economic Times), Hoa revealed that last year the sector’s total export value reached 4.26 billion USD. Overall rubber ranked eighth among the country’s export staples after garment and textiles, telephones, crude oil, electronic products, footwear, seafood and machinery.

She said that the increasing global rubber demand in recent years has encouraged Vietnam to expand its rubber farming to increase export value and improve the socio-economic situation in many localities. As a result, Vietnam has become the fifth biggest natural rubber producer in the world with 910,500 ha of land under rubber trees, producing 836,600 tonnes of rubber in 2012, she said.

She added that the country also ranked fourth in terms of the amount of natural rubber for export, which accounted for 10.6 percent of the market share in 2012. The nation’s rubber tree productivity is about 1,707 tonnes of latex per ha, generating 105 million VND, ranking third after India and Thailand.

Market difficulties have arisen this year due to the insufficient recovery of the global economy, the increase of world supply and the growing amount of competition, Hoa noted.

For a sustainable rubber export strategy, Hoa said the VRA is working with the Trade Promotion of the Ministry of Industry and Trade to rebuild a trade promotion programme with more focus.

It is also encouraging companies to exchange information on price, consumption and market situation to create a suitable trading plan.

Rubber companies, for their part, should improve product quality to meet the demand for export, Hoa said, adding that the VRA is planning to establish a rubber trading floor in 2015 to ensure transparent prices for both the buyers and the sellers.-

Thanh Hoa calls for more investment

A senior official from the central province of Thanh Hoa- which was leading the the rest of the country in terms of foreign direct investment attraction as of August 20 - has called for more investment.

Deputy Chairman of the provincial People’s Committee Nguyen Dinh Xung made the call while talking with local businesses in the province on October 5 to mark Vietnamese Entrepreneurs’ Day (Oct. 13).

He stated that the province’s Thanh Hoa city will soon inaugurate Nghi Son oil refinery, which will offer opportunities for local enterprises.

In January-September, Thanh Hoa enjoyed economic growth of 10.1 percent, double the national average. Agriculture-forestry-fisheries earned nearly 5.5 trillion VND (26.1 million USD), up 3.6 percent year on year.

This year’s exports are expected to hit 688 million USD, up 27.1 percent.

On the occasion of Entrepreneurs’ Day, former Minister of Agriculture and Rural Development Le Huy Ngo presented awards to business people who have rendered their services to the nation’s development in 2013.

He also launched a fund raising drive in support of victims of the recent tropical storm Wutip.

During this year, Thanh Hoa’s businesses have raised tens of billions of dong for war heroes and their relatives.-

Vietnam helps Laos develop coffee

The southern Lao province of Champassak and the Vietnam National Coffee Corporation (Vinacafe) have signed an agreement to develop coffee production in the area.

Under the agreement, Vinacafe will lease 1,000 hectares of land to grow coffee with an initial investment of about 5 million USD. The location will be in the Boloven highlands of the province’s Pakson district.

The project will not only boost two-country trade cooperation, but also create thousands of jobs for local people whilst contributing to poverty reduction in the region.

The province exported over 34,000 tonnes of coffee worth 83 million USD in the 2012-2013 period.

European and Japanese customers particularly like the taste of coffee originating from the Boloven highlands.

Indian businessman keeps 30-year friendship with Vietnam

The Vietnam Union of Friendship Organisations (VUFO) hosted a get-together in Hanoi on October 4 in honour of Shantanu Srivastava, Chairman of ASSOCHAM India-ASEAN Business Promotion Council, who has maintained a 30-year friendship with Vietnam.

VUFO Chairman Vu Xuan Hong expressed sincere thanks to the Indian businessman for all what he has done for the friendly and cooperative ties between the two countries.

Shantanu Srivastava first came to Vietnam as a diplomat, and after ending his tenure here, he chose to work in business in order to have more opportunities to stay close to the Southeast Asian country, which he considers his second homeland. The Managing Director and CEO of Ishan International Pvt. Ltd has played an important role in the establishment of the Indian Chamber of Commerce (INCHAM) in Vietnam .

The Indian businessman, who has lived in Vietnam for the past 30 years, is also active in social activities. He has raised funds to build 20 houses for the poor in Ho Chi Minh City ’s Can Gio district and present scholarships to poor local students. In addition, Shantanu Srivastava has assisted the development of Vietnam ’s railway, textile and tea industries through the provision of machineries and the building of a textile dyeing laboratory.

At present, he sponsors the establishment of Vietnam Houses in the Indian capital New Delhi and the west coast city of Mumbai .

Shantanu Srivastava, who was conferred the Friendship Order of Vietnam in 2003 and the insignia For Peace and Friendship among Nations in 2006, said he has some new ideas for the cooperation between the two countries that he plans to discuss with the VUFO.

The businessman suggested a programme to encourage Vietnamese companies to open representative offices in India, joint research on India’s traditional medical treatment, the opening of Hindu training courses in Vietnam and Vietnamese training courses in India, as well as schemes to improve access to education and health care for children of poor workers in Vietnam.-

Law changes fines for tax violators

The revised Law on Tax Management introduced in July has given tax agencies more tools to fight tax fraud, said the vice-head of the Department of Taxation's Tax Policy Division, Vu Van Cuong.

Under the revised law, there are more tax enforcement measures, including measure on customs procedures for importing and exporting goods - and measures to ensure the collection of tax debts when people default.

Fines for taxpayers who delay paying taxes have been increased if the period is longer than 90 days, he said, noting that previously, the daily fine just accounted for 0.05 per cent of the unpaid tax, regardless of time. However, since July, the rate has been 0.07 per cent for debts older than 90 days.

Violators who make tax declarations that reduce the tax payable or to increase tax refunds have to pay a fine equal to 20 per cent of the total tax instead of 10 per cent as previously.

Cuong said that tax agencies now inspected tax-related activities at the offices of companies yearly to set-up a database on them and then classify them into groups based on their conformity to the law - good, average or bad.

The inspections centre on companies where tax frauds are not uncommon, such as traders of farming products; importers or exporters using sales invoices issued by companies not based in the growing areas; companies registering to provide multi services in different sectors but whose registration capital is small; companies whose scale of business is many times higher than their capital.

In efforts to help people fulfill their duty and save time and other resources for both taxpayers and agencies, the Viet Nam General Department of Taxation (GDT) has developed a plan to improve the quality of tax agents by 2020. (The agents prepare tax returns and any declarations necessary.)

Under the plan, the country hopes to have at least 3,000 tax agents by 2015 and about 8,000 by 2020.

However, at present, according to the general department's statistics, there are only 129 tax agents in the country, mostly in Ha Noi and HCM City.

Chairwoman of the Viet Nam Tax Consultancy Association Nguyen Thi Cuc said misunderstandings about the operation of tax agents made companies hesitant about using their services.

Cuc said that to promote tax agency work, the legal framework should be improved and agents come under a special law.

Ready for Japan investment wave

Japan’s economic relationship with Vietnam is now the best it has been in the 40 years since the two countries established diplomatic relations.

In 2012, not only was Japan ranked as Vietnam’s second largest trading partner, but also the top source of foreign direct investment (317 projects approved, worth $4,371 million). Until now, Japan has invested heavily in export-oriented and labour-intensive manufacturing industries. However, recently we have seen a considerable number of investment projects in a wider range of fields such as urban development, pharmaceutical manufacturing and high performance and high value added office automation equipment manufacturing; and there is an increasingly obvious trend among Japanese companies to position Vietnam as an important strategic location to be doing business.

In addition, Vietnam along with its central and local governments has been striving to attract Japanese businesses, which has contributed to an increase in investments from Japanese companies. Many of these Japanese companies possess advanced technology and have received enticing “love calls” from the People’s Committees of many provinces that are candidates for Japanese enterprises’ plans for business expansion.

Although it takes a considerable amount of time for Japanese firms to conduct thorough preliminary surveys and make investment decisions, few companies have pulled out once they have decided to invest, and their investments have taken root. Many enterprises, through the process of training Vietnamese staff with a medium to long-term outlook, have grown close to their employees and regard them as family members.

Obviously Vietnam is an important investment destination for Japanese investors, at a time when Japanese firms are substantially expanding their business in the ASEAN region.

According to a JETRO survey of Japanese companies investing in Vietnam, which was released in December 2012, with regard to business plans for the next 1-2 years, 164 out of 249 companies participating in the survey said they would expand their business (65.9 per cent), meaning two thirds of companies were making specific plans to expand their operations. Furthermore, 80 companies planned to maintain the status quo (32.1 per cent), four companies expected to reduce their business (1.6 per cent), and only one company (0.4 per cent) planned to “move to a third country or withdraw”.

Moreover, Japanese enterprises view the ASEAN bloc as a huge key industrial and consumer market. This is attributed to the fact that the decision to establish the ASEAN Economic Community (AEC) in 2015 will help the implementation of production activities in the region much smoother; and a plan to approach the gigantic consumer market of 600 million people has been realised. At present, it is definitely difficult to say that Vietnam has been fully integrated into the supply chain of multinational corporations in the ASEAN region.

For example, the business operations of many Japanese enterprises that have penetrated Vietnam’s market have remained confined to limited activities specifically related to exports to Japan. However, through the establishment of the AEC and the formation of ASEAN+3 (Japan, China, South Korea) and RCEP (Regional Comprehensive Economic Partnership), it should be easy to recognise Vietnam’s increasingly important role in the structure of the supply chain in the ASEAN region and East Asia. Therefore, Vietnam should concentrate on the following three areas: firstly, developing and upgrading infrastructure, especially the need to improve the business environment in the distribution sector etc.; secondly, industrial development through industrialisation and fostering of support industries; and thirdly, the training of Vietnamese human resources.

At the Japan-Vietnam Economic Forum chaired by the Vietnam Chamber of Commerce and Industry (VCCI), with JETRO and Nikkei BP as co-organisers, held in Hanoi early last month, a panel discussion was held on infrastructure, industrialisation and fostering of supporting industries and training of human resources - three areas in which Japan can contribute to Vietnam’s development.

Regarding the challenges facing Vietnam in these key sectors, the development of infrastructure, the formulation of projects based on co-operation between the public and private sectors (PPT) is essential. In turn, appropriate schemes should be developed so as to be compatible with the characteristics of Vietnam’s market; regarding industrialisation, six sectors should be concentrated on: electronics, seafood processing, agricultural machinery, environment and energy saving, ship building and vehicles and vehicle components; to develop these sectors requires Vietnam’s all-out efforts, which must go beyond the barriers of the presiding ministries. Moreover, in the fostering of support industries, it is important that local enterprises grow; links between local businesses and foreign investors, especially Japanese investors, must be expanded.

Furthermore, I believe that to improve the quality of local products requires the upgrading and expansion of public financial support schemes for machinery purchases, etc. For the development of human resources, the Vietnam-Japan Human Resources Co-operation Centre (VJCC) has put in place programmes directed towards local businesses in Vietnam, for example in business administration, quality control, marketing, human resources management, etc., but it is necessary to implement more programmes that many local businesses can take advantage of.

More concerted efforts should be made towards the introduction of foreign capital and supplementing policies regarding incentives for investment, such as an exemption or reduction of corporate income tax, based on the consideration of the medium and long-term merits and their impact on the country’s economy. In particular, these measures are extremely important when it comes to attracting high-tech firms.

It is necessary to expand the geographical areas that are considered to be candidates for attracting foreign investment through the upgrade of infrastructure related to distribution such as the road network, harbours, etc. To have more supporting industries it is necessary to strengthen financial regulations for medium and small-sized businesses, and the need for the development of human resources should also be considered.

Regarding the measures related to incentives for investment, Vietnam needs to look at and learn from its neighbour Thailand, and it is expected that Vietnam will put in place similar or more attractive incentives than Thailand.

In addition, based on the results of a survey by JETRO in 2012, we know that among 1,783 Japanese enterprises investing in Vietnam, 1,616 invested in eight major cities and provinces, such as Ho Chi Minh, Hanoi, Danang, Binh Duong, Dong Nai, Hai Phong, Hai Duong and Bac Ninh. Investment by more than 90 per cent of Japanese enterprises has focused on these specific locations. This list of eight major cities and provinces does not include provinces with excellent potential to become an investment destination for Japanese enterprises in the future, for example, Quang Ninh province, which has Ha Long city, in northern Vietnam and the famous tourist destination of Ba Ria-Vung Tau in the south etc.

Additionally, there are provinces that could substantially reduce the travel time to major cities like Hanoi and Ho Chi Minh by improving connectivity through, for example, better road networks. However, currently the situation is such that few Japanese enterprises have entered these provinces.

Given the development of infrastructure through Japan’s official development assistance (ODA) and also funding from the Asian Development Bank, the World Bank, western countries, South Korea, China, etc., we can believe that there are still many hidden investment opportunities for foreign investors, especially Japanese firms.

From JETRO’s side, we will put in our best effort to advance investment in Vietnam by Japanese companies and contribute more to its development, such as implementing programmes aimed at promoting investment into Vietnam from Japan.

Trade surplus with EU reach US$17 bln

Viet Nam’s import-export turnover to Europe reached US$28.5 billion in the first nine months of this year, according to the Ministry of Industry and Trade (MoIT).

Of the figure, the nation’s exports earned US$20 billion and its imports were estimated at US$8.5 billion.

The European market also has the fastest export growth among Viet Nam’s export markets, rising by 26% growth over the same period last year.

Viet Nam’s trade turnover with Europe is predicted to achieve about US$40 billion (including US$ 28.6 billion from exports and US$11.5 billion from imports) by the end of this year, showing an annual increase of 21%.

The country’s major European export markets in 2013 will be Germany with estimated export earnings of US$4.6 billion, the UK (US$3.3 billion), the Netherlands (US$2.7billion), France (US$2 billion) and Russia (US$1.8 billion).

HCMC, Long Thanh airport to be connected by railway

A railway of over 37 kilometers will be built in the years to come to transport passengers between HCMC and Long Thanh Airport in Dong Nai Province, said the Vietnam Railway Administration.

According to the Vietnam Railway Administration, there will be some new railways added to the detailed railway planning in HCMC and neighboring provinces until 2020.

The railway connecting HCMC with Long Thanh Airport will start at Thu Thiem station planned in District 2 and run in parallel with HCMC-Long Thanh-Dau Giay Expressway.

With a length of over 37 kilometers, the railway will have 18 stations, with an elevated section of nearly 12 kilometers in HCMC.

Under the planning, a railway leading to Hiep Phuoc port will be built to transport goods. This railway will be 38 kilometers long and divided into two sections.

The first section will start at Long Dinh station in Long An Province’s Can Duoc District while the second one will begin at Hiep Phuoc port station and end at Long An port station in Can Giuoc District.

Besides, the planning also includes eight railways linking HCMC with neighboring provinces like Dong Nai, Binh Duong, Ba Ria-Vung Tau, Long An and Tay Ninh.

These eight railways will need an estimated cost of VND341.3 trillion, equivalent to US$16.5 billion, sourced from official development assistance (ODA) loans, Government bonds, State budget and capital of enterprises.

The Vietnam Railway Administration is calling for investments from the private sector for four railway projects, including upgrade of the north-south railway, the Nam Ho Tay-Ngoc Khanh-Lang-Hoa Lac-Ba Vi railway, the Bien Hoa-Vung Tau railway, and the railway leading to Haiphong international port.

The total investment of these four projects mobilized from the private sector is estimated at VND170.63 trillion.

Number of apartments offered for sale surges

The apartment market in HCMC which has stayed quiet for a long time started to see positive changes when there is a strong increase in number of apartments put up for sale with around 1,700 units recorded in the third quarter.

A market research of CBRE Vietnam indicated that the number of apartments offered for sale increased by nearly 46% from the second quarter, and over 72% of these apartments were low-cost ones.

According to Marc Townsend, managing director of CBRE Vietnam, such an increase has reflected a partial recovery in investors’ confidence.

Home buyers have also reacted well to apartment projects with a higher number of successful transactions in both medium-end and high-end segments.

Some investors used to be cautious about protracted payment duration but they now are more flexible. The most popular payment method is half of the apartment’s value paid in advance and the rest paid in 2-3 years’ time.

WB hails Vietnam’s stability, warns challenges ahead

The World Bank (WB) in an economic report released on Monday praised Vietnam for macroeconomic stability achieved this year, but warned against challenges ahead facing the economy.

In its East Asia Pacific Economic Update, the global lender highlights the sustained stability at the expense of slowing growth, as Vietnam’s “economy enters the third year of relative stability.”

WB explains that “stabilization measures implemented in 2011 and 2012 helped Vietnam reduce inflation, strengthen fiscal and external accounts, and stabilize the exchange rate.”

The report states that the improved trade and current account balances have helped the State Bank of Vietnam to shore up foreign exchange reserves - from 1.6 months of import cover at end 2011 to about 2.8 months in the first quarter of 2013.

Headline inflation, meanwhile has been falling in the last 24 months. In July 2013, headline inflation had fallen to 7.3%, largely attributed to the easing of food price and stabilization measures.

The important achievement is that “greater macroeconomic stability has helped Vietnam to regain confidence among investors.” This is manifested by the strong rise in foreign direct investment in the country in the year to date, exceeding US$15 billion compared to the initial target of US$12 billion for the whole year.

Vietnam’s stock market also rose nearly 18% in 2012 and about 19% in the first seven months of 2013 after declining two consecutive years in 2010 and 2011.

Export performance is in good shape, according to the report.

Total export value is estimated to have grown by 14% during the first seven months of 2013 after achieving a growth rate of 18% in 2012 and 34% in 2011. While earnings from commodity exports are declining due to falling global prices, Vietnam’s traditional labor-intensive manufacturing exports such as garments, footwear, and furniture continue to sustain rapid growth.

A noteworthy addition to the export composition has been the exports of hi-tech and high-value products such as cell phones and parts, computers, and electronics and accessories, which have emerged as the largest and fastest-growing export items in 2013.

The solid export performance is largely attributed to the foreign-invested sector, which now accounts for two third of Vietnam’s total exports.

While macroeconomic performance improved in the last two years, growth slowed in the face of structural problems in the state-owned enterprise (SOE) and banking sectors.

Growth is estimated at 5.2% in 2012, the lowest level since 1999. Growth is likely to remain moderate in the medium term in the absence of visible progress in addressing the problems confronting the financial and SOE sectors.

“Vietnam’s economy is experiencing its longest spell of modest growth since the onset of economic reforms in the late 1980s,” states the report.

The World Bank predicts Vietnam’s economy to grow at a moderate pace of around 5.3% during 2013, having registered a growth rate of 4.9% in the first quarter and 5% in the second quarter.

It also stresses challenges ahead facing Vietnam, saying its macroeconomic achievements are still fragile and face several downside risks.

“First, slower growth may intensify demand for further loosening of monetary and fiscal policies, with the risk of stoking inflationary pressures and reversing the recent gains in macroeconomic stability.

“Second, if the implementation of structural reforms is delayed further, investor confidence would be undermined, further worsening growth prospects.”

The bank further observes that credit activity remains subdued as banks have become more reluctant to lend on account of impaired balance sheets, poor financial health of the SOEs, and general lack of transparency in the policy-making process.

Minh Long launches new product line

Porcelain maker Minh Long I Co. on Monday introduced Ly’s Horeca, a new line of products specially designed for hotels and restaurants.

Ly’s Horeca provides a wide range of products for hotels and restaurants to cater to weddings and buffets with Asian and European styles. Products of the line are hard, durable and reasonably priced.

Ly’s Horeca products can be used in ovens, microwaves and dishwashers. Besides, these products are priced at 10-30% lower than Minh Long’s normal products but their quality is still the same thanks to advanced technology and mass production.

SCG says will acquire more Vietnamese firms

Thailand’s Siam Cement Group (SCG) has pledged to expand investment in Vietnam, focusing on acquiring more firms in the local market in the coming time.

Speaking at the press briefing in HCMC last Friday, Kan Trakulhoon, president and CEO of SCG, said that investment expansion in Vietnam is a step by the company to brace for the ASEAN Economic Community (AEC) in 2015.

SCG has invested over US$2.1 billion in potential markets of Indonesia, Vietnam, the Philippines, Cambodia and Myanmar over the past time. “We have plans to continue investment of US$6-8 billion in regional markets, including Vietnam, in the next five years,” Trakulhoon said.

Vietnam is the key nation in SCG’s strategy to become a leading sustainable enterprise in the ASEAN by 2015. Vietnam will raise its competitiveness when AEC is established in 2015. In addition, growing population and attractive investment environment in Vietnam will also help speed up the market, he said.

“SCG considers Vietnam as one of strategic markets to seek new investment opportunities. We will develop subsidiaries focusing on three core sectors, cement-building materials, chemistry, and paper, to meet increasing demands in Vietnam and other ASEAN countries,” Trakulhoon added.

SCG currently is focusing on acquiring domestic firms to fasten penetration into the local market. If no enterprises with feasible projects are chosen, SCG will invest in new projects in the country.

Vietnamese firms and other enterprises in the region SCG has acquired have brought about profits and operated better. Notably, acquiring an 85% stake of the local building material firm – Prime Group Joint Stock Company – has sent SCG to the leading position in the world’s glazed tile production industry.

Meanwhile, the cement factory of Buu Long Industry & Investment Joint Stock Company in Dong Nai Province suffered losses before SCG acquired most of its stake in 2011. But now, it has brought about profits for SCG.

SCG has invested in 19 enterprises in Vietnam with total asset value of over US$615 million and over 6,500 employees and most of them have operated well. This is why the group wants to further expand investment in the market, including in Long Son petrochemical complex in Ba Ria-Vung Tau Province, Trakulhoon said.

Sustainable development and human resources are the key to success of SCG. The principles have also been applied in member enterprises in Vietnam. SCG has renovated affiliates in Vietnam by applying sustainable development principles and green technologies in products and services.

Last year, SCG reported revenues of over VND6.7 trillion, up 11% against 2011, due to high demand for packaging paper. In the second quarter of 2013, the group generated revenues of over VND3.1 trillion.

SJC resumes jewelry exports

Saigon Jewelry Holding Co. (SJC) has resumed jewelry exports, albeit modest volume, after stopping the business in late 2010.

SJC is the second firm in the jewelry industry that is trying to ship jewelries abroad besides Phu Nhuan Jewelry Company (PNJ).

Do Cong Chinh, general director of SJC, informed that his enterprise was sending small batches to Europe to explore the market before executing larger orders from foreign buyers. SJC will sign processing contracts with foreign partners to make shipments with bigger values in the near future, Chinh said.

Many foreign customers have already signed contracts with SJC after examining the processing technology and prices offered by the local company.

SJC has sought permission from the central bank to import materials temporarily for re-exports to process jewelry for partners. Chinh deems this practice as the best way now as it is very difficult to compete with rivals from Thailand and Hong Kong who enjoy lower gold prices and have more advanced processing technologies.

PNJ is a jewelry exporter with steady exports done over the years. However, Nguyen Thi Cuc, deputy general director of PNJ, reported that jewelry export sales only contributed some 6% to her company’s total revenues while the export profits were low.

After an export tax rate of 10% was slapped on jewelry products having gold content of less than 99.99%, foreign customers have become lukewarm to high-valued home-made jewelry items.

PNJ earns around US$12.5-13 million from jewelry exports annually while its jewelry exports generated up to US$29 million in the first five months of 2010 when jewelry exports by local firms were strong due to softer domestic gold prices then.

According to the Vietnam Gold Business Association, as other Asian countries apply jewelry export duties of 0%, their export values of gold and jewelry products always stay high. Gold jewelry exports by Thailand average out at about US$3 billion annually, the association said.

Three banks sell VND840 billion of bad debts

Vietnam Asset Management Company (VAMC) over the weekend signed contracts to purchase bad debts from three commercial banks with the total special bond value of over VND840 billion.

The lenders were Saigon Commercial Bank, Saigon-Hanoi Bank and PGBank. They are also among the first banks to sell bad debts to VAMC after Agribank.

A source from VAMC said that over VND840 billion worth of special bonds will be issued to buy the debts, which have the total book value of over VND1.1 trillion.

As the total original debt minus risk provisions makes the special bond value, these figures mean that these banks have deducted VND357 billion for risk reserve funds for these loans.

VAMC said that it will sign contracts to buy debts with the total value of over VND1 trillion with one or two banks this week. It will also sign more specific sub-contracts to buy debts of Agribank and the three banks mentioned above.

The enterprise signed the first bad debt purchase contract with Agribank on October 1. VAMC expects to buy around VND10 trillion worth of bad debts by the end of the month.

Agribank, which is said to have the highest bad debt ratio in the banking system, expects to sell at least VND5 trillion worth of book-value bad debts to VAMC before the end of the year. The bank now has to handle around VND21 trillion worth of bad debts.

A leader of VAMC said that the huge debts of troubled shipping group Vinashin at credit institutions have not yet been targeted by the enterprise.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR