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The An Cuong Working JSC, one of Vietnam’s leading wood-working and decorative materials companies, has announced a strategic investment and development partnership with the Sumitomo Forestry Group from Japan, under which both will strengthen their cooperation and aim for business expansion.
“This is an investment that brings benefits to both companies and I am confident that our cooperation will bring great success,” said CEO of the Sumitomo Forestry Group, Mr. Masami Kitahashi.
“We are pleased to welcome the Sumitomo Forestry Group as our strategic shareholder,” said Mr. Le Duc Nghia, CEO of An Cuong. “With Sumitomo Forestry’s 200 years of experience in the industry, annual revenue of $10 billion, modern management technology, and great position in the international market, and our 23 years of operations and strong position in the domestic market, the Group becoming a shareholder will bring advantages to both parties.”
An Cuong’s business will be promoted in foreign markets such as Japan and the US based on the distribution network of Sumitomo Forestry. The Japanese group will send experts from Japan to help An Cuong’s factories producing doors and furniture made of industrial wood meet international standards and be qualified for exports to Japan and the US. The Japanese group’s housing development business in the two markets record revenues of more than $4 billion annually.
Moreover, the cooperation will capture a perfect supply chain in the Vietnam, from the production of raw materials to all types of industrial wood surfaces, meeting international standards and supplying all customers in Vietnam as well as the Japanese group’s customers all over the world.
An Cuong’s foreign strategic shareholders now include the VinaCapital Group, DEG from Germany, and the Sumitomo Forestry Group.
2016 turnover at An Cuong reached $110 million. With an annual growth rate of 30-35 per cent in recent years, the company now dominates the domestic market, with a 50 per cent market share in MFC panels and 70 per cent in Laminate panels, Acrylic panels, and by-products.
The company is currently a provider of products to real estate developers in Vietnam and is cooperating with thousands of interior designers, contractors, and small retailers around the country.
It is the manufacturer and exporter of well-known worldwide brands to Japan, Southeast Asia, the US, and Europe. Wooden products such as MFC, Melamine MDF, Laminates, Acrylic, Veneer and other by-products are widely used in interior design and decoration for offices, homes, condominiums, kitchen cabinets, schools, hospitals, super malls, bathroom partitions, and flooring.
Fierce competition forces firms to innovate
Enterprises must innovate to adapt to the changing business environment and tougher competition or they will find themselves out of the game, said Phan Duc Hieu, Deputy Director of the Central Institute for Economic Management (CIEM).
Hieu made the remarks at the Business Forum 2018 held by the Vietnam Business Forum magazine on December 7.
He noted that enterprises are now facing two great opportunities and a big challenge. The first opportunity is the clear message from the Government on developing the private sector, a motivation for the national economy, and the second opportunity is the Government's efforts and directives to create a facilitating business environment for enterprises, Hieu stated.
However, more favourable business conditions will create fiercer competition which is also the biggest challenge for enterprises, the expert said.
Thus, Hieu advised enterprises to actively improve their competitiveness, to innovate and seize opportunities from the economic restructuring process.
According to Hoang Quang Phong, vice chairman of the Vietnam Chamber of Commerce and Industry (VCCI), statistics show that Vietnam's economic picture in 2017 was bright with almost all of its set targets being fulfilled.
Particularly, the Government has promoted the removal of barriers and the reduction of costs for enterprises, in addition to the issuance of an action programme to develop the private sector, which also signals further prosperity in the near future.
The number of newly established firms also climbed to a record high, at more than 100,000, in 2017.
However, the VCCI Vice Chairman pointed out many challenges in 2018 in relation to internal weaknesses of the economy, including the economic model based on low wage labour, low technology levels, and the exhaustion of natural resources aligned with low efficiency of natural resources use, as well as the limited size and governance capacity of domestic firms, among others.
Phong noted that over 60% of 700,000 active firms in Vietnam report losses, in addition to a large number of firms being dissolved and suspended.
Meanwhile, economist Vu Dinh Anh said that all signals and statistics show that the business environment and opportunities for enterprises in 2018 will be better than in 2017, recommending that the Government sets a higher economic growth rate for 2018, instead of 6.5-6.7%.
FPT starts work on university and software park in Can Tho
FPT Group on December 6 commenced construction on a FPT University campus and a software park inside a complex in the Mekong Delta city of Can Tho with a total investment of VND1.4 trillion (US$61.64 million).
Covering 5.2 hectares in Ninh Kieu and Binh Thuy districts, the FPT University and FPT Can Tho Software Park complex will include an office building and a lecture hall in the first phase. They are designed based on international standards to save energy and protect the environment.
The complex, when in place, will have 3,000 staff and 5,000 students. FPT plans to develop the FPT University campus in Can Tho into a leading institution in the delta with 10,000 students by 2025.
FPT general director Bui Quang Ngoc said the complex demonstrates FPT’s commitment to develop the information technology sector in Can Tho and the Mekong Delta as a whole. FPT expects to help the city restructure its economy and build the city into a smart one with advanced technology and a high-skilled labor force.
The project will also help create thousands of software, telecommunications and information technology jobs. FPT Software plans to recruit an additional 500 employees in Can Tho by 2020.
The complex is the 10th project of FPT in the nation. FPT currently owns nine buildings, namely FPT Cau Giay, a FPT University campus in Hoa Lac and F-Ville software villages 1 and 2 in Hanoi City, FPT Massda and FPT Complex in Danang City, and F-Town 1 and 2 and FPT Tan Thuan in HCMC.
Can Tho to develop IT center
The Mekong Delta city of Can Tho needs to build an information technology (IT) center, said Dao Dinh Kha at the Ministry of Information and Communications.
At a seminar on development of an IT center at the Mekong Delta’s key economic zone with a vision of making it a member of the Quang Trung Software City chain held in Can Tho on December 6, Kha said the Government has plans to develop such centers in large cities including Can Tho to help domestic firms improve their competitiveness.
Following the models of Quang Trung Software City (QTSC) in HCMC and Danang Software Park, Can Tho has drawn up a plan to develop a 20-hectare IT center in Cai Rang District, which will be submitted to the Prime Minister for approval. The center will be connected to the QTSC chain to meet the demand for IT services of enterprises in Can Tho, Kha said.
Nguyen Thi Diep, a representative of German-invested Digi-Texx Vietnam Co Ltd which specializes in data digitization, said the company has been running a branch in Can Tho for seven years and has encountered numerous difficulties due to a lack of IT services.
Lam Nguyen Hai Long, CEO of QTSC, told the seminar that the company returned an upfront investment of VND250 billion (US$11.01 million) to the HCMC government after five years of operation. This year HCMC can collect VND700 billion in taxes from QTSC, mainly personal income tax on staff of QTSC member firms, including six in Can Tho.
Nguyen Hoang Viet, director of Can Tho University Software Center, said at the seminar that 80% of graduates from Can Tho University are now working for the center. However, a centralized IT center is needed to grow the workforce.
Can Tho, which is now home to five universities that have IT programs with 1,200 graduates a year and many large enterprises, holds high potential to develop the IT sector, said Do Hoang Trung, director of the Can Tho Department of Information and Communications.
Tran Van Dung, deputy director of the Danang branch of DTT Technology JSC, the planner of Danang Software Park, said the park has been recognized as the second centralized IT center in the country with 75 enterprises. These firms have 2,400 employees and generate annual revenue of VND974 billion.
DTT is now the planner of the Can Tho centralized IT center which will be a center of services and infrastructure for socio-economic development of Can Tho and the Mekong Delta.
The cost of the project will be VND174.6 billion, Dung added.
Major banks lower deposit rates
A couple of large commercial banks have adjusted down their annual deposit rates after a short time of hiking them, according to An Ninh Thu Do newspaper.
VietinBank has cut interest rates for deposits of six to less than nine months to 5.3% and nine- and ten-month tenors to 5.5%. At BIDV, the interest rate for savings of one and two months are now 4.3% while three- and five-month savings get an interest rate of 4.8%.
The interbank market also saw a plunge of 0.26%-0.71% in interest rates for overnight, one-week and two-week tenors.
According to Bao Viet Securities JSC (BVSC), the State Bank of Vietnam (SBV) has issued VND28.8 trillion (US$1.27 billion) worth of promissory notes while debts falling due this week totaled over VND10.3 trillion. Thus, the central bank has net withdrawn VND18.5 trillion from the system.
The decline in interbank interest rates and the SBV’s net withdrawals show ample liquidity in the banking system, said BVSC.
In previous years, banks had difficulty securing sufficient liquidity due to high demand for capital and a fall in deposits.
Experts explained that credits have increased gradually and call deposits have remained large as funds for public investment projects have not been disbursed. The target to raise capital from Government bond sales has been achieved earlier than in previous years.
In addition, growth on the stock market has helped commercial banks access to medium- and long-term loans, easing the pressure on the banking system.
Other reasons are abundant foreign currency inflows, high trade surplus, steady foreign direct investment (FDI) and official development assistance (ODA) disbursements, strong incoming remittances and good tourism revenue.
VietinBank earlier hiked its interest rates for deposits of six to less than nine months from 5.5-5.7% to 5.8%. The rate for the 12-month tenor also increased 30 basis points to 6.8%.
Meanwhile, BIDV revised up its interest rates for deposits of one and two months to 4.8%. The rates were 5.2% instead of 4.8% for three-month savings.
Canadian firms sound out investment opportunities in Vietnam
A Canadian business delegation comprising 60 firms from Ontario province led by Premier Kathleen Wynne has come in Vietnam to sound out investment opportunities.
Kathleen Wynne said at a business contract signing ceremony in Hanoi on December 6 that Ontario attaches importance to ties with fast growing markets like Vietnam and expects to cooperate with Vietnam in the business, trade and education sectors.
In HCMC, some Ontario businesses earlier clinched contracts with Vietnamese partners in education, construction, innovation and hi-tech. Many cooperation agreements between universities and colleges of the two sides were also concluded in Hanoi.
Can Nguyen, managing CEO and president of Nurture Growth Bio Fertilizer Inc which specializes in bio-organic fertilizers, said its products help improve soil, increase crop output 15-30%, keep the natural sweetness of plants and do not require plant protection chemicals.
Vietnam’s Truong Son Bio Ltd. signed an agreement worth CAD2 million with Ontario’s Nurture Growth Bio Fertilizer Inc to use Nurture Growth brand. In addition, Nurture Growth will allow Truong Son Bio to produce bio-organic fertilizers in Vietnam.
On the sidelines of the signing ceremony, Marty Philippi, president of MAPAgri which provides solutions to cattle-feed and dairy butter producers, said the company has been present in Vietnam since 2010 to seek customers and introduce its technological solutions to Vietnamese firms. The company now has a large number of customers in milk, cheese and cattle-feed production sectors.
Philippi expected to win more contracts with Vietnamese agricultural firms.
Iain McColl, director of Hibar System, a supporting industries company in the fast moving consumer goods (FMCG) sector, said the firm’s products had been sold to Vietnam via a third party. Hibar System, on this occasion, signed a cooperation agreement with a Vietnamese instant noodle producer, enabling the company to penetrate the Vietnamese market.
Two-way trade between Ontario and Vietnam was US$3.1 billion last year, a fourfold increase over 2012. Ontario mainly imports phone parts, burlap, footwear, computers and furniture from Vietnam.
Price of dragon fruit drops drastically
The price of dragonfruit has fetched VND6,000-VND8,000 per kilogram, said Head of the Dragon Fruit Association in the central province of Binh Thuan.
The price shrank twice or three times compared to two months ago.
Farmers said they spent a lot on unseasonal dragon fruit in Binh Thuan province but price is down much; as a result, they suffered enormous losses.
Farmer Nguyen Van Tu in Binh Thuan Province’s Ham Thuan Tan district said lately, my family spent VND30 million on building 600 cement pillars for planting unseasonal dragon fruits. Nevertheless, trader bought the fruit at VND6,500 per kilogram, I had lost over VND15 million ($660.
Some traders blamed for the price drop on difficulties in transportation of the fruit to China for consumption.
Nearly 800 foreign firms learn about Vietnamese market
The Ministry of Industry and Trade yesterday hosted a trade promotion conference with the attendance of nearly 800 foreign businesses, who have come to learn about consumption demand as well as investment opportunities in Vietnam.
The 800 businesses come from 15 nations including South Korea, the US, Italy, the Netherlands, China, Taiwan (China) and Thailand. They mainly operate in fields such as electricity-electronics, tech products, accessories, machines and components, building materials, interior and exterior decorating items, beverage and beauty products.
A representative from Korea Trade-Investment Promotion Agency said that Korean businesses appreciated investment potentials in Vietnam especially when Vietnam Korea Free Trade Agreement has been passed.
Since 2010, investment capital from South Korea to Vietnam has been triple to reach US$50 billion making it the largest foreign investor in Vietnam. Bilateral trade has been double to $42.8 billion. Korean investors have concentrated in processing, manufacturing and real estate fields.
In addition, China is estimated to be one of Vietnam’s five largest investors in the upcoming time.
Mr. Vo Tan Thanh, deputy chairman of the Vietnam Chamber of Commerce and Industry, said that recent study results by Business Monitor International show that Vietnam has become one of five most attractive investment destinations in Southeast Asia.
Electricity and electronics, processing and manufacturing fields have continued posting two digit growth rate this year. HCMC takes the lead in investment attraction potential in the country.
Dong Nai: trade surplus predicted to hit 2 bln USD
The southern province of Dong Nai is forecast to enjoy a trade surplus of 2 billion USD in 2017, according to Chairman of the provincial People’s Committee Dinh Quoc Thai.
Export turnover of the locality is estimated at nearly 17 billion USD this year, up 11.8 percent year-on-year, while the figure for imports is 15 billion USD, up 13.5 percent.
According to the provincial Statistics Office, in November alone, the locality’s export turnover hit 1.54 billion USD, 6.9 percent above October.
Among commodities with high export growth compared to October, footwear ranked first with 34.4 percent, followed by wooden products with 34.1 percent, textiles with 32.1 percent and fiber with 19.2 percent.
The results were attributed to local exporters’ access to new markets and effective exploitation of traditional markets.
Businesses in Dong Nai have taken advantages of free trade agreements signed between Vietnam and other economies, thus expanding export output.
The increased export price of farm produce in 2017 has also contributed to Dong Nai’s export growth, Thai said.
Director of the provincial Department of Industry and Trade Duong Minh Dung said the agency will continue providing support for local exporters in trade promotion, seeking new markets and connecting to foreign direct investment businesses operating in the locality.
It will also do its best to fight fake goods and trade fraud to protect producers and consumers, he added.
State Bank launches data management system
The National Credit Information Centre of Viet Nam (CIC) under the State Bank of Viet Nam (SBV) on Thursday launched a data management system - CG1 contract.
The contract was jointly carried out by Vietnamese FPT IS and Singaporean DP Credit Bureau Pte Ltd.
It is part of the Financial Sector Modernisation and Information Management System (FSMIMS) project sponsored by World Bank.
The project aims to enhance the operational capability for CIC on information technology platforms and professional processes.
With the successful implementation of the CG1 and the FSMIMS projects, CIC has acquired a modern information system to become an important pillar for the country’s financial infrastructure system.
The new system allows CIC to manage closely and decentralise to different groups of users, including SBV departments and agencies, SBV branches in provinces and cities, more than 1,200 financial organisations, 4,000 credit branches and 40,000 user accounts, said Nguyen Kim Anh, SBV deputy governor, at the ceremony.
The system is also expected to allow millions of borrowers to access the system to check their personal information.
Resolution passed establishing Bac Van Phong special unit
The central coastal province of Khanh Hoa on December 7 approved a resolution establishing the Bac Van Phong special administrative economic unit.
Accordingly, the Bac Van Phong special administrative economic unit would cover all the natural areas and the population of the province’s Van Ninh District.
Van Ninh District has a total area of 110,000ha, including 56,000ha of land and 55,000ha of water surfaces, with 12 communes, one town and a population of 128,000 (as of 2011).
The province said that Bac Van Phong had an important and strategic geo-economic position, with a number of advantages to develop it into a gateway to boost socio-economic development along the East-West, North-South economic corridors and facilitate trade cooperation with the Asia-Pacific countries.
Bac Van Phong would focus on four major sectors, namely maritime transport, trade and finance services, tourism, healthcare and education, and hi-tech development.
More than 97 per cent of voters in Van Ninh District agreed with the province’s project of developing the district into Bac Van Phong special administrative economic unit in a survey conducted in October.
This is an important step towards implementing the plan of developing three special administrative economic units, including Bac Van Phong in Khanh Hoa, Van Don in the northern province of Quang Ninh and Phu Quoc in the southern province of Kien Giang.
Viet Nam was also drafting a law on special administrative economic units to create a legal framework for the development of these zones.
Van Phong Economic Zone, founed in 2016 with a total area of 150,000ha, attracted 146 projects worth US$1.47 billion investment so far.
Lazada inks agreement with Vietcombank
Online shopping platform Lazada.vn recently signed an agreement with Vietcombank in which the latter will become a payment service provider and will transfer money to Lazada’s cross-border merchants.
Under the agreement, consumers in Viet Nam are now able to use both cash-on-delivery or a credit card when buying cross-border products from Lazada.vn.
A representative of Vietcombank said the bank had made thorough preparations to offer the best services as well as working processes and staff.
With this agreement, Lazada becomes the first shopping platform permitted to apply this method in Viet Nam.
According to Lazada, the new payment method is available for its “shopping online revolution”. The programme, which began on November 9, sold 1.5 million products in the first three days.
The company has worked with many famous merchants to offer customers discounts of up to 50 per cent.
Lazada’s online shopping revolution will last to December 12.
Agricultural insurance –major policy to support farmers, rural areas
Every year, natural disasters and epidemics have caused great losses for the Vietnamese agricultural sector and farmers, accounting for 1.5% of the national GDP. As a result, agricultural insurance has become an urgent need.
Agricultural insurance will help farmers reduce losses in the wake of natural disasters. Tran Thanh Diep, Director of the Southeast Asia Exports-Imports Company, which specializes in producing qualified farm products in Hai Phong City, said recent storms and floods have pushed her company and many farm households almost to bankruptcy.
“We have invested a lot of money in growing safe vegetables and raising domestic animals. Each model is worth as much as US$44,000. In the absence of insurance, it will be hard for us to recover after a natural disaster,” Diep elaborated.
After 3 pilot years from 2013 to 2016, more than 300,000 households had agricultural insurance worth a total of nearly US$340 million.
Nguyen Quang Huyen, Deputy Director of the Insurance Supervisory Authority of the Finance Ministry, underscored the need for agricultural insurance against unpredictable natural disasters.
“It’s of extreme importance to expand agricultural insurance coverage and outline appropriate mechanisms to harmonize the interests of all parties involved. The insurance will be voluntary, with financial support from the local budget for poor and near-poor households,” Huyen said.
Because most agricultural production in Vietnam is small scale, few farmers have paid much attention to agricultural insurance, which has not been sufficiently promoted.
Hoang Xuan Dieu, former head of the agricultural insurance section of Bao Viet Insurance Corporation, said agricultural insurance covers most major dairy cattle and rubber trees programs.
He added that insurance companies have now begun to introduce insurance services to businesses and households involved in aquaculture.
Dieu said “Credit institutions should attach insurance conditions to loans which will allow a reduction of interest rates. We hope the government will promulgate more specific policies to implement insurance.”
The Finance Ministry is refining a draft decree under which the state will subsidize insurance fees up to 20% for farmers and 90% for poor households. The decree is expected to take effect next year.
Sakura Vietnam introduces new brand identity
The Japanese Sakura Vietnam will change its brand name to Sakuko Vietnam from December 15, the company said at an event in Hà Nội on Saturday.
The company, an affiliate of Sakura Group, will also launch its new brand identity in Việt Nam while opening its 10th convenience store on Đội Cấn Street in the capital city this month.
"With the debut of the new brand name, we hope to contribute to changing the quality of life of Vietnamese people by providing them with quality Japanese products and good services,” Sakuko Vietnam managing director Cao Thị Dung said.
Sakura Vietnam, now Sakuko Vietnam, entered the Vietnamese market in September 2011 with the goal of becoming a leading provider of Japanese goods in Việt Nam. It operates a convenience store chain of the same name.
To date, it has opened nine stores in Hà Nội, six franchised agencies and over 500 distributors nation-wide.
Last week, the company’s convenience chain received the “Trust and Use 2017” award from the Vietnam Economic Times. The title aims to honour enterprises with the top 100 quality products and services that are trusted and used by consumers.
Besides consumer goods, the enterprises will also operate in hotel, construction and logistics industries.
VNA launches special promotion for Tet holiday
The National flag carrier- Vietnam Airlines yesterday launched a promotional program for the upcoming Tet holiday applying for its domestic routes.
Accordingly, the preferential program is applied for all passengers flying routes connecting between Ha Noi/Vinh/Hai Phong/Thanh Hoa and Ho Chi Minh City with its round-trip ticket from VND 999,000; routes from Da Nang/Hue/Quy Nhon to Ho Chi Minh and vice versa would be from VND 599,000, routes from Buon Ma Thuot/Pleiku to Ho Chi Minh City and vice versa with a price from VND 399,000.
Time for sale is opened from December 11 to December 31.
The program is applied for departure ticket from February 2, 2018 to February 16, 2018, and return ticket from February 17, 2018 to March 2, 2018.
Equitization plan for PV Oil passed
Deputy PM Vuong Dinh Hue has recently inked Decision 1979/QD-TTg, dated December 8, 2017 to agree on the equitization plan of the Viet Nam Oil and Gas Corporation (PV Oil) of the Viet Nam Oil and Gas Group (PVN).
The PV Oil will sell a part of State capital to conduct the equitization process.
Under the decision, the PVOIL will have a charter capital of over VND 10,342 trillion of which PVN will hold VND 363,014,555 stocks, accounting for 35.1% of the charter capital. Preferential stocks will be given to workers with 1,864,300 stocks or 0.18% of the charter capital. The others of 206,845,900 stocks will be on sale, making up 20% of the charter capital. Strategic investors will hold 462,504,746 stocks or 44.72% of the charter capital. Every stock will value VND 10,000. Foreign investors are invited to purchase stocks at the PVOIL with a maximum ownership rate of 49% of the charter capital.
The stocks will be on sale in open bidding at the HCM Stock Exchange within one year from the IPO date, labor arrangement plan.
The Ministry of Industry and Trade was asked to keep a close watch on the equtization process and report to the PM for consideration.
National project seeks to improve coffee quality, develop premium brand
The Ministry of Agriculture and Rural Development (MARD) has approved a five-year coffee industry development project, worth 170 billion VND or 7.48 million USD, to improve coffee quality, develop a premium Vietnamese brand and expand export markets.
While Vietnam has been the world’s second largest coffee exporter for two decades, 90 percent of coffee exports were still in the raw form; and when it is sold at the international markets, it mostly comes under foreign names.
In 2016, the country’s exports of coffee hit a record high of 1.78 million tonnes, generating turnover of 3.34 billion USD, year-on-year increases of 32.8 percent in volume and 24.7 percent in value from 2015.
Vietnamese coffee only accounted for one percent of the world’s total output in 1991; 25 years later, its market share reached approximately 20 percent.
However, the value of the Vietnamese coffee has not grown sustainably but suffering ups and downs due to impacts of climate change, land degradation and old-fashioned farming techniques. Last year, the industry went through the most severe drought in the last 30 years.
According to President of the Vietnam Cocoa and Coffee Association (Vicofa) Luong Van Tu, coffee has brought a better life to millions of farmers in Vietnam ten years ago but the crop’s yields and quality have declined sharply in recent years as most of coffee trees have become old and stunted. It resulted in drops in value that underpays the farmers’ hard work.
The old farming practices that include harvesting green and ripe coffee beans at the same time, along with outdated processing and post-harvest quarantine techniques are also reasons behind the decrease in quality, he added.
To change the current situation, the MARD will launch the new scheme, namely “High-quality Vietnamese coffee”, next year with the aim to create linkages for production and distribution and develop large areas of materials for high-quality coffee production with a system of updated drying and storage facilities and suitable processing plants.
The project, running from 2018 through to 2023, with a vision to 2030, will help increase added value of Vietnamese coffee products, particularly those from the Central Highlands, North Central Region and some mountainous northern provinces.
A goal of the programme is to add 5 percent to the country’s total coffee value by 2020 and 7 percent by 2030, compared to that of the 2013-2014 crop.
The coffee industry sets to remain as the second biggest coffee exporter and double the export turnover to 6 billion USD by 2030, Tu unveiled.
HCMC taxman eyes online vendors
The tax authority of HCMC has collected VND21 billion (nearly US$925,000) in tax from online stores while asking nearly 14,000 individuals and organizations selling goods on Facebook to fulfill their tax obligations, heard a meeting of the city government on December 6.
Tran Ngoc Tam, head of the HCMC Department of Taxation, said e-commerce has grown more popular, with the participation of many local and foreign vendors. However, Vietnam is still struggling to tax online stores.
Data of the HCMC Department of Industry and Trade shows that as of September 2017, the city had nearly 300 electronic trading platforms, more than 8,000 e-commerce sites, and 73 social networking sites.
Particularly, there are nearly 14,000 individuals and organizations in the city selling goods on Facebook, one of the most popular social networking sites in the country.
“The HCMC Department of Taxation has collected VND21 billion in tax from online stores and written to nearly 14,000 vendors on Facebook asking them to pay taxes,” Tam said.
This is an encouraging result to continue finding solutions for e-commerce taxation.
According to Tam, tax authorities have cooperated with banks to monitor transactions involving foreign sellers to determine their taxable incomes. However, there have not been sufficient legal grounds to tax them.
For cash transactions, the Ministry of Finance suggested deals worth more than VND10 million (US$440) be paid through a bank account.
Chinese furniture firms to boost investment in Vietnam
Many Chinese furniture producers, especially those from Tianjin City, have plans to step up investment and trade ties with Vietnamese companies, said Gao Xi Zhi, chairwoman of the Tianjin Furniture Association.
On the sidelines of a seminar on promotion of trade and investment cooperation between Vietnam and China’s Beijing, Tianjin and Hebei held in HCMC on December 7, Gao Xi Zhi told the Daily that Chinese furniture firms in general and Tianjin firms in particular are keen on the Vietnamese market due to lower labor costs.
Investing in Vietnam, Chinese furniture producers can enjoy tariff incentives when exporting their products to the countries which have signed free trade agreements with Vietnam.
Tianjin has over 7,000 enterprises trading in the interior furnishing sector including 3,000 furniture producers. Most of Tianjin Furniture Association members that want to sound out investment opportunities in Vietnam are large and present in many foreign markets, said Gao Xiu Zhi.
They want to boost exports to the U.S. via Vietnam to avert high anti-dumping duty the U.S. imposes on Chinese furniture, according to Vietnamese firms.
The U.S. annually spends US$30 billion importing wooden products, including US$10 billion from China and US$2 billion from Vietnam.
Huynh Van Hanh, vice chairman of the HCMC Handicraft and Wood Industry Association (HAWA), told the Daily that Chinese wood processing firms are stepping up investment in Vietnam although the U.S. withdrew from the Trans-Pacific Partnership trade deal.
The U.S. may increase imports of wooden products from ASEAN countries including Vietnam.
Chinese companies also import Vietnamese wooden products for re-export to other countries including the U.S.
The seminar, held at the Saigon Exhibition and Convention Center in HCMC’s District 7 as part of the Vietnam International Trade Fair 2017 (Vietnam Expo 2017), attracted more than 100 Chinese enterprises.
Chinese businesses specializing in the textile, bicycle production and food processing sectors expressed interest in the Vietnamese market as well.
Expert: Businesses cannot survive ad-hoc policy change
Local and foreign businesses have found it hard to survive ad-hoc policy change which has become more frequent, Dan Tri newspaper quoted economic expert Pham Chi Lan as saying.
Speaking at the seminar on challenges prompted by policy change held in Hanoi on December 7, Lan said a good business environment is not one that only accommodates one particular business type like foreign direct investment (FDI). Small and medium enterprises (SMEs) are also facing enormous difficulties and challenges, including policy and market risks, and unhealthy competition, she added.
Enterprises cannot draw up business plans if laws are revised every five or seven years. “What we need to do is to make long-term policies and avoid law revisions,” Lan said.
According to Lan, the legal framework has improved. In the past, Vietnam just had ministerial circulars, government decrees and laws governing economic development and reform but now the Party Central Committee can adopt its own resolutions, including those on private sector development and administrative reform.
In addition to its directives and decisions, the Government has issued Resolutions 19 and 35 on institutional reform, private sector development and SMEs towards 2030. This is an indication the Government is having a long-term vision.
Lan said 2017 was characterized by reform and simplification of business procedures. However, there are a maze of taxes, fees and funds to shoulder besides increasing and unpredictable costs.
While State-owned enterprises and certain FDI and private firms are enjoying privileges, SMEs are facing marginalization.
“Fair competition is a motivation for efficient use of resources and improvement of labor productivity.
Therefore, all solutions concerning institutional reforms and the business environment should be aimed at developing markets and ensuring fair competition,” Lan told the seminar.
Workers in processing and manufacturing sector easily lose jobs
As high as 74% of local workers in the processing and manufacturing sector are at risk of losing their jobs due to automation, according to a report by the Party Central Committee’s Economic Commission on the fourth industrial revolution.
The report is cited by the news website VnEconomy as saying that the revolution will have major effects on Vietnam. Elsewhere in Southeast Asia, 54% of workers in the processing and manufacturing sector in the Philippines are facing the same risk, 58% in Thailand, and 67% in Indonesia.
Many workers in Vietnam do manual work in the stages of production which might be automated in the near future.
The domestic industrial manufacturing sector has undergone a lot of changes, with the mining sector having decline in the past years.
The processing and manufacturing sector has created a large number of jobs. It had 6.6 million workers was in 2010, accounting for 13.5% of the country’s total workforce, and the figure leapt to eight million, 15.3% of the total.
Another report of the Ministry of Science and Technology points out two trends in which the revolution may affect jobs.
First, it may disrupt the structure of the workforce, sending unemployment soaring, due to an increasing presence of robots in manufacturing. New technology may lead to a shift in the nature of work from manual labor to automatic programming and control.
The report says workers on assembly lines would be the first to be affected as they can be easily replaced by robots in almost all stages of production. As such, there would be significant declines in available jobs in the administrative, processing and manufacturing, and construction sectors between 2015 and 2020.
Second, the revolution may create more jobs despite job declines in labor-intensive industries and those requiring low-skilled labor. It may help creative sectors grow and create new jobs.
The Party Central Committee’s Economic Commission said textiles-garments and electronics are labor-intensive industries.
Veggie and fruit exports continue strong growth
The nation’s exports of vegetables and fruits have grown steadily in recent years, with revenue projected at US$3.5 billion this year, according to the Ministry of Agriculture and Rural Development.
Addressing a seminar on fruit production and export promotion held in Tien Giang Province on December 6, Deputy Minister Le Quoc Doanh said the past year had seen rapid growth in vegetable and fruit export.
According to data given by Doanh, export revenue from such products was only US$151 million in 2003, but the figure exceeded US$1 billion 10 years later. Last year, it neared US$2.5 billion.
Nguyen Hong Son, director general of the ministry’s Department of Crop Production, said the country had exported US$3.16 billion worth of vegetables and fruits as of last month, up 43.2% year-on-year.
Growth of vegetable and fruit exports, according to Son, is attributed to the Chinese market, but this has led to a heavier reliance on this northern market.
In particular, while the Chinese market accounted for 28% of Vietnam’s exports of vegetables and fruits in 2013, the proportion rose to 30% in 2014, 65% in 2015 and 70.8% in 2016.
Exports to China have kept surging and made up 75.6% of total exports in January-November, Son said.
Though Vietnam’s vegetable and fruit exporters depend much on the Chinese market, the Department of Crop Production stays optimistic about export prospects of these products, with turnover estimated to climb to US$4.5 billion in 2020 and US$7 billion in 2030.
Explaining the high targets, Son said, world exports of vegetables and fruits are always high. He quoted data of the Food and Agriculture Organization (FAO) as saying that exports grew 12.2% per year on average between 2004 and 2013, from US$110.7 billion to US$232 billion.
In addition, fresh fruits of Vietnam have been shipped to more foreign markets, including both easy and choosy markets like China, ASEAN, the Middle East, Canada, the EU, the U.S., Japan, South Korea, Taiwan and Chile, said Le Van Thiet, deputy head of the Department of Plant Protection.
Vietnam’s dragon fruit, rambutan, longan and star apple are now present in the U.S., South Korea and Taiwan, helping promote fruit exports in the coming time, according to Thiet.
However, China has started tightening plant quarantine and reducing imports via unofficial channels. “Two weeks ago, China requested examinations of our farming and packaging facilities for fear of pests.” Thiet said.
Regarding vegetable and fruit imports into Vietnam, the 2008-2014 period saw an annual value ranging from US$200 million to US$500 million, but the value soared to US$622 million in 2015 and US$925 million last year, according to the Department of Crop Production.
Son said, “Vietnam imported more than US$1.2 billion worth of vegetables and fruits in January-September this year alone, with 59% from Thailand, 17% from China, 6% from the U.S., 4.4% from Australia.”
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