BKAV among 10 top brands in Viet Nam
Internet security BKAV company has been listed among the 10 "Most Well-known Brand names" in the country by the Viet Nam Copyright Association.
Others include Vingroup, Bao Viet, and Traphaco
The listing focuses on brands with outstanding achievements related to international integration to mark the anniversary of Viet Nam's entry into the World Trade Organisation seven years ago.
BKAV, the only one technology company in the list, is well-known for its anti-virus software that sells for VND299,000 (US$14). It has 17 million users in Viet Nam and other countries.
Last year it was described by Gartner, an American information technology research and advisory firm, as one of the "Coolest Vendors in Emerging Markets."
The annual listing is done together with the Viet Nam Union of Science and Technology Associations, and Viet Nam Chamber of Commerce and Industry.Zalo attracts 15 million subscribers
Vietnamese over-the-top (OTT) service Zalo had 15 million subscribers and had handled 185 million messages per day by the end of July.
The service, which allows users to make calls and send messages over the Internet, was launched in August 2012 by VNG Corporation.
The company expects to launch Zalo's English version this year, aimed at foreign users. Besides Viet Nam, the Internet-based service is widely used by Vietnamese communities in other nations such as the United States, South Korea and Japan. Zalo is now available in 190 countries and territories in the world.
Established in September 2004, VNG started as an online games operator in Viet Nam. In March 2010, the company made a mark as a games developer with the launch of the Thuan Thien Kiem online game. VNG expanded its operation by providing services for young people, such as Zing MP3 for listening to music, Zing Me for social networking and the mini games platform Zing Play.
Software for self-designing website gets upgrade
Mat Bao Media has introduced the 2.1 version of its Chili, a website design software for business start-ups.
Since it was first introduced in October 2012 the software has saved costs for start-ups by providing self-designed websites within two minutes and making them easier to manage and flexible. It is available in five languages: English, French, Japanese, Chinese, and Korean.
By the end of last year 10,000 clients had tested it and 1,000 contracts were signed.Clients can see a "demo website" of the new version. Mat Bao Media designs databases focusing on sales, enterprises, and typical websites.
Chef Meat Viet Nam opens plant
The Chef Meat Viet Nam joint stock company has officially opened its first plant in the city's seafood processing zone.
The company, a subsidiary of Chief Meat Chigusa, was established last year with total investment of US$1.3 million. It will produce sausage, smoked meat, salmon, Kobe beef and various fast foods for nationwide distribution.
Parkson invests $5m in Da Nang mall
The Parkson Group will invest US$5 million to build its first high-end shopping mall in the central city, general director of Parkson Viet Nam Tham Tuck Choy said in a meeting with Da Nang administration.
The 12-storey mall, built by Duc Manh Group, will open on Hung Vuong Street in December.
Thailand trade expo planned in capital
The Thailand Trade Exhibition 2014 will take place from August 14 -17 at the Ha Noi Friendship Cultural Palace.
Nearly 150 leading Thai companies will display products including food and beverages, household products, textiles and garments, jewelry, health and beauty products, auto parts, bicycles and accessories, decorative items and electrical appliances.
The exhibition is co-organised by the Department of Export Promotion, Ministry of Commerce of Thailand and the Royal Thai Embassy.
Ha Noi supports price stabilisation
The capital will support enterprises participating in its price stabilisation programme, said participants at a conference on Thursday.
The programme aims to increase consumption of high-quality products by stabilising their prices. Each year, Ha Noi spends hundreds of billions of dong to set up more than 2,200 joint venture price-stabilised selling points under the programme.
The city committed to create a level playing field for enterprises, offering favorable conditions for enterprises in exploiting commodity sources, signing contracts and rotating funds.
Facelift planned for luxury mall
The Trang Tien Plaza is facing another round of renovation, just 16 months after it reopened its doors in April 2013, Dien Dan Doanh Nghiep newspaper has reported.
Up to 70 per cent of the retailers have said they would continue to operate in the mall after the new round of renovation; 25 per cent have agreed to have their their booth's area reduced; and only 5 per cent have said that they would stop operations, the report said.
The newspaper quoted Johnathan Hanh Nguyen, chairman of IPP Group which is an investor-cum-operator of the Trang Tien Plaza, as saying that after the latest changes, the shopping mall would continue to run well with a higher rental revenue.
The Trang Tien Plaza has been a commercial symbol of the capital city over the past 100 years. The shopping mall reopened its doors in 2013 after a long renovation process. It expected to attract high-end customers, especially international tourists, with its luxury brands.
In the long term, the luxury brands will still gain a foothold in Viet Nam, particularly because the country's middle-class is growing fast, Hanh Nguyen told the newspaper.
The Trans-Pacific Partnership (TPP) negotiations between Viet Nam and the participating nations would facilitate the influx of renowned brands to Viet Nam in the years to come.
Int'l forum focuses on Mekong infrastructure
The Greater Mekong Sub-region (GMS) must ensure that economic corridors yield benefits in terms of trade, investment, and jobs, participants at the sixth GMS Economic Corridors Forum (ECF) heard yesterday.
The forum, co-organised by Viet Nam's Ministry of Planning and Investment, and the Asian Development Bank attracted ministers, vice-ministers, senior officials, development partners, and representatives of the private sector from the six GMS countries.
They reviewed achievements during the last six years and took stock of cross-border transport and trade initiatives in the region.
Vice-president at the Asian Development Bank, Bindu Lohani, said that most of the infrastructure required for enhanced connectivity had been put in place, particularly the transport links that formed the base of the envisioned corridors.
"The crucial question now is how to ensure that these infrastructure links will yield their intended benefits in terms of increased trade flows, investment activity, industrial growth, employment, and incomes," he said.
He said the ECF needed to go back to its original focus of finding ways to boost trade and investment, and hasten the development of industries along the economic corridors.
Ways to achieve this included through transport and trade - and the development of special economic zones, such as cross-border economic zones, export processing zones, and industrial parks.
The forum also discussed ways to improve co-ordination and integration in carrying out the proposed measures by sharing experience within and outside the region and promoting involvement of the private sector.
Deputy Minister of Planning and Investment Nguyen Chi Dung said that the development of economic corridors was a complicated and time-consuming process.
"But it is the most effective tool for country members to approach enhanced connectivity, competitiveness, and a greater sense of community," he said.
Sok Chenda Sophea, secretary general of the Cambodia Development Council, said that economic corridors helped the country develop its economy. He added that co-operation with neighbouring countries was crucial for a sustainable economic development.
The GMS countries formed the forum in 2008 to bolster efforts in transforming GMS transport corridors into economic corridors connecting dynamic hubs of economic activity.
The forum focuses on economic corridor development and helps improve interaction between the public and private sectors, and between central and local governments.
The ADB has supported the establishment of the East-West, North-South, and Southern GMS Economic Corridors since 1998 to promote economic growth and integration in the subregion.
SOE equitisation goal reached, but quality still an issue
As the Government urges to streamlines the operation of State-owned enterprises (SOEs), the target can be attained in terms of quantity. However, there are doubts about the quality of most businesses after equitisation.
Prime Minister Nguyen Tan Dung has approved restructuring proposals of 20 corporations as of July; additionally, 55 companies were equitised and 15 others were merged in the first seven months of this year.
The equitisation target of 432 businesses by the end of next year was achievable, said the Enterprise Reform and Development Commission.
The pace of equitisation was positive at the Ministry of Transportation, the Viet Nam National Textile and Garment Group (Vinatex) and Viet Nam National Shipping Lines.
The State divestment reached almost VND3 trillion (US$141.5 million) in the first seven months, increasing by three times compared to last year but still lower than expected.
The Prime Minister asked SOEs to focus on organising their personnel.
"If business leaders cannot fulfill their obligations, they may think of voluntary resignation," he said.
So far this year 21 SOEs have finished their IPOs, yet only seven succeeded in selling all the shares they offered, according to ttvn.vn.
State ownership in ten of the 21 enterprises remained above 90 per cent, including Ha Noi Construction, Viet Nam Water and Environment Investment, Quang Ninh Port and Viet Nam Motors Industry. IPOs at these firms merely satisfied the goal of transferring limited liability status firms into joint stock companies.
Nguyen Hoang Hai, General Secretary of the Viet Nam Association of Financial Investors, said, "Large investors don't want to hold a minor stake in these companies, so they lose interest due to what is currently happening in the IPO process."
Meanwhile, foreign ownership in some large listed firms has reached its limit, so foreign investors are putting their hopes on IPOs of enterprises that are soon to be launched, such as Vietnam Airlines, Mobifone, Vinatex, Airports Corporation of Viet Nam, Viet Nam Railways and Binh Son Refining and Petrochemical Co Ltd, according to a VinaCapital report.
Ha Noi supports enterprises with loan interest assistance
The capital city will support post-investment interest rates for medium and long term loans in Vietnamese dong for Ha Noi-based enterprises, according to the municipal People's Committee.
Accordingly, the city will support 0.2 per cent of the loan interest rate per month, or 2.4 per cent per year, with tenure of 12 months. The support is meant for loans whose interest rate payment is between January 1, 2014 and December 31, 2014.
Those loans must come from credit institutions for investing in new projects, expanding existing projects, and innovating techniques and technology in Ha Noi.
The benefiting enterprises must also operate in manufacturing the city's key industrial products, agriculture, processing farm products and foodstuff, producing alternative products for imported goods, with sales of at least VND100 billion (US$4.69 million) in 2013 and employing over 200 workers.
Application forms for the aid should be sent to the municipal Department of Finance, which will then submit it to the People's Committee for approval.
Statistics from the committee showed that total investment in the city in the first six months of the year was estimated at VND871.1 trillion ($41.4 billion), increasing 10.2 percent against the same period last year.
The capital city has so far done its planning on improving the business environment as well as increasing its provincial competitiveness index (PCI).
In a recent meeting with businesses in the capital, the municipal authorities pledged to continue to resolve difficulties and obstacles faced by enterprises in agriculture, rural areas, export products and support industry.
HCM City eyes 50% hike in preferential loans to firms
HCM City, which has already almost achieved its full-year target for preferential lending to enterprises, is seeking to increase the number by half, a conference heard yesterday .
Deputy chairwoman of the city People's Committee, Nguyen Thi Hong, said the city's programme to connect banks and companies has exceeded the achievements of the whole of 2013 in terms of the number of firms participating and the number of industries they are in and credit value.
Banks have lent almost VND20 trillion (US$947.9 million), the target for the year, compared to VND13.7 trillion ($649.3 million) last year.
At the meeting 10 lenders – Sacombank, Vietcombank, Eximbank, Vietinbank, BIDV, OCB, DongA Bank, Southern Bank, MHB, and MB – signed agreements to provide loans worth VND3.52 trillion ($167.6 million) to 39 companies that have signed up for the city's price-stabilisation programme, small traders, and wholesale markets.
"I propose that the State Bank of Viet Nam, Department of Industry and Trade, HCM City Enterprise Association, district people's committees should co-ordinate closely to provide additional loans worth VND10 trillion ($474 million) in the remaining five moths of this year," Hong said.
She said the loans would focus on supporting industries; six "breakthrough" programmes to improve administration, infrastructure, and human resources; and industries with high value addition like electronics, information technology, pharmaceuticals, rubber, and food processing.
She believed that a target of VND30 trillion ($1.42 billion) could be achieved.
Nguyen Hoang Minh, deputy manager of the HCM City office of the central bank, said the programme helped resolve difficulties faced by enterprises and revive and foster the city's production and business operations.
"Companies have shown signs of recovery. The city's economy grew in the first seven months, prices were up by 1.22 per cent, industrial production is up 6.2 per cent, and retail sales is up 12.8 per cent."
The programme also helped reduce the cost of borrowing for companies, he said.
"Currently, the maximum interest rate for short-term loans to five priority fields – agriculture-rural areas, exports, supporting industries, firms using high-technology, and small and medium-sized enterprises – is 8 per cent."
It is 10-11 per cent for medium-term loans.
Viet Nam's first ETF lures investor interest
Over one month after launching its initial public offering, Viet Nam's first exchange-traded fund (ETF), VFMVN30, has begun attracting investor interest.
Managed by Vietfund Management Company, the fund had a minimum initial capital of VND50 billion (US$2.35 million). However, Pham Khanh Lynh, deputy general director of the company, believed VFMVN30 could raise VND100 billion ($4.7 million) by the time it concluded the IPO on August 20.
The fund's customers are mostly securities firms, though some individual investors are also registered to purchase its certificates for billions of dongs.
Securities companies have shown great interest in the first Vietnamese ETF, based upon the intense competitiveness in the brokerage market. Having the fund certificates in their portfolios means securities firms will possess more services for customers when VFMVN30 is listed.
Notably, ETF is one type of high-transparency investment. Investors can frequently track the fund's portfolio and their investment value. In addition, investing in ETFs is much safer than buying specific shares, Lynh noted. "As a result, the volatility of profits or losses remains lower."
Lynh noted that the fund was expected to list certificates on the HCM City Stock Exchange next month.
Dai-ichi Life reports premiums up 38 per cent
The Dai-ichi Life Insurance Company of Viet Nam (Dai-ichi Life Viet Nam) reported that premiums rose in the first half of this year to VND1.030 trillion ($48.5 million), a year-on-year increase of 38 per cent.
In the first seven months of this year, the company opened ten new general agents.
The company, which now has 130 offices, surpassed one million customers on July 21.
260,000 ha of rice to be transformed into other crops by 2015
About 260,000 ha of rice will be transformed into other crops between now and 2015 under a plan recently adopted by the Ministry of Agriculture and Rural Development.
According to the plan on transformation of crop structure on rice growing areas in the 2014-2020 period, next year, the Mekong Delta will change its cultivation model from growing rice to both rice and other crops in combination with aquatic breeding.
Meanwhile, the Red River Delta, northern mountainous and midland, and northern central regions will shift from rice to other crops such as corn, soybean, sesame, peanut and vegetables.
In the 2014-2020 period, corn and other crops will be grown instead of rice in 105,000 ha in the southern central coastal region and 15,000 ha in the Central Highlands region.
The southeastern region will switch from growing rice to those with high economic values such as flower, ornamental trees and safe vegetables.
The transformation of crop structure must ensure that all factors suitable to rice growing are maintained and transformed crops have higher competitiveness and economic efficiency than rice.
Quang Ninh aquatic output reaches 51,500 tonnes
The northern province of Quang Ninh reported gross aquatic output of 51,500 tonnes in the first seven months of this year, up 2.1 per cent compared to the same period last year and representing about 59 per cent of the annual target.
Aquaculture output reached 17,900 tonnes, up 16.2 per cent year-on-year, while exploitation output reached 33,500 tonnes, down 4.7 per cent, according to the provincial department of agriculture and rural development.
The total fish farming area is 20,100 hectares, meaning the annual target has essentially been reached.
Vissai Ninh Binh ships clinker to Reunion Island
Vissai Ninh Binh exported its first shipment of clinker to Ciment de Bourbon, France, where it will be used for highway construction on Reunion Island.
The shipment, composed of 115,000 containers weighing 1.5 million tonnes each, was Viet Nam's largest-ever cement export contract, said Nguyen Tien Dat, deputy director of the Vissai Group.
Ex WTO head in Ha Noi for trade forum
Ex-chief of the World Trade Organisation Pascal Lamy called on Viet Nam yesterday to eliminate bureaucratic procedures, improve logistics and focus on adding value to the economy to better benefit from international trade.
Speaking at an event organised by the Viet Nam Chamber of Industry and Commerce, Lamy, who officially signed Viet Nam's accession to the WTO in 2006, said patterns of trade in the world had been changing rapidly, requiring countries to take full advantage of its competitive advantages.
Increased trade openness meant countries must pay more attention to non-tariff measures to protect consumers from risks such as those related to health and the environment, he noted.
Lamy said Vietnamese enterprises must realise that their products had to meet stricter technical and safety requirements in the context of global trade, even in the lower-end market segment. Improving the quality of products would allow countries such as Viet Nam to protect domestic consumers and local jobs. Moreover, producers faced increased scrutiny of their products as consumers became more educated.
Viet Nam could consider people its competitive advantage, yet this required more investment and attention to education, he said. For example, in the seafood industry, that meant using the available human resources to improve the quality of fishing and processing and add value to the products.
Lamy is scheduled to attend the first international conference on multilateral foreign policy held in Ha Noi today. The 200 domestic and foreign delegates, including former UN Under-Secretary General Jayantha Dhanapala and former Singaporean Foreign Minister George Yeo, will discuss the implementation of Viet Nam's foreign policy over the past three decades with Prime Minister Nguyen Tan Dung delivering the keynote speech.
Viet Nam's exports to the Netherlands up 21 per cent
Export turnover from Viet Nam to the Netherlands in the first six months reached US$1.68 billion, up 21.3 per cent compared to the same period last year, according to the Ministry of Industry and Trade.
Cell phones and components saw the highest turnover with $297.3 million, accounting for 17.6 per cent of the total.
Computers and electronic products ranked second, accounting for 15 per cent. Footwear products were third, accounting for 13.8 per cent.
Netherlands is Viet Nam's third-largest exporting market in Europe, following Germany and the United Kingdom.
Simpler tax procedures to take effect
Finance Minister Dinh Tien Dung has promised to eliminate unnecessary tax filing procedures in September in order to shorten the process, as well as the clearance time for imports and exports.
In recent years, many administrative procedures have been reformed to accomplish this, Dung said in a People Ask-Ministers Answer programme on Sunday. However, the duration remained too long compared to other regional countries.
Domestic enterprises waited 1,050 hours to have their tax filings done in 2008, according to the World Bank. The time was reduced to 941 hours in 2010 and to 537 in 2012.
The ministry has worked with the Vietnam Chamber of Commerce and Industry and organisations designated by the World Bank to reduce the time it takes to complete tax declarations and payments.
In July, the ministry submitted a draft resolution on reforming administrative procedures and customs that aimed to reduce processing time from 537 to roughly 290 hours.
The ministry planned to make personnel training and rotation changes and vowed to cut one-third of formalities relating to businesses' social insurance payments so that processing time could be cut nearly in half.
The ministry aims to complete its re-examination of unnecessary procedures by this Friday.
Major investors eye Vietnamese footwear industry
The domestic leather and footwear industry is seeing positive signs in the market.
Several leading footwear manufacturers such as Nike, Adidas and Puma have given their orders to Vietnamese firms, instead of the manufacturers in China and Bangladesh.
Deputy Minister of Industry and Trade Do Thang Hai said that most of the large local businesses in the sector have received orders from foreign countries for the first quarter of next year.
Hai said the well-known brands wanted to expand their operations in Vietnam to meet the increasing demand for their products and to reduce risks.
The sector should promote production and trade, and improve their products' competitiveness to satisfy the manufacturers' requirements, he said.
Vietnam is among the top ten global footwear exporters and is the second largest footwear exporter to the demanding market in the US.
Statistics from the ministry showed that in July, the footwear sector was stable as its output of leather shoes was estimated at 21.9 million pairs, representing a 10.4% increase in comparison with July 2013.
In the first seven months of this year, the sector's output was 150.4 million pairs, a 19.5% increase over the same period last year. Its export turnover posted a 22% year-on-year increase to touch US$5.75 billion. The item has been one of the country's staple exports.
Estimates from the Vietnam Leather and Footwear Association (Lefaso) also revealed that the shift of production lines to the industry in the seven-month period was a 25% year-on-year increase.
Speaking about the interest of Japanese small-and-medium sized enterprises in investing in Vietnam's support industries, especially automobile spare parts production, the deputy minister said Vietnamese businesses have not met the investors' requirements.
He added that the ministry in co-operation with other ministries would submit a proposal to Prime Minister Nguyen Tan Dung to promulgate priority policies for the support industries in the period 2011-20.
The proposal would allow specific items, sectors and measures to support the support industries.
In addition, businesses should strive for long-term strategies and investment.
Head of the Light Industry Department Phan Chi Dung said that to take advantage of the opportunities provided by free-trade agreements (FTA), many foreign investors are developing support industries for the footwear sector in Vietnam. This will open up a brighter future for the industry.
Foreign companies are speeding up their projects in Vietnam to take advantage of the incentives that will come with FTAs and to increase profits once these trade pacts are signed, Dung added.
Over 7.5 bil in FDI pumped into Bac Ninh
Bac Ninh led the nation’s 45 provinces and cities in attracting foreign investment for the first seven months of 2014, reports the General Statistics Office (GSO).
The Bac Ninh Provincial People’s Committee in turn announced that cumulatively it has approved investment certificates for 578 foreign invested projects with total investment capital of US$7.567 billion.
According to the Committee, in July alone, the province issued certificates for 9 new foreign invested projects with total investment capital of US$1,004 million.
In the reviewed period, BacNinh took the top spot among 45 provinces and cities in FDI attraction.
Rubber exports set to bounce back
Export prices for rubber are expected to recover to US$2,000 per tonne in the next three years, following sharp reductions due to high international rubber surpluses, according to local experts.
The Viet Nam Rubber Association (VRA) said, at present the export price of rubber has stood at $1,840 per tonne, 40 per cent lower than the same period last year and 60 per cent lower against the record high price in February 2011, reported Viet Nam News Agency last week.
The fall in the export price of rubber was due to high inventories of rubber throughout the world, said the association.
According to the International Rubber Study Organisation (IRSG), inventories of natural rubber on the world market are expected to reach 714,000 tonnes this year.
Vietnamese export rubber prices at the end of June and early July were VND36-41 million ($1,700 - $19,500) per tonne, while production costs were VND38 million ($18,000) per tonne, said Tran Ngoc Thuan, general director of Viet Nam Rubber Group (VRG).
However, the export price of Vietnamese rubber is expected to increase to $2,000 per tonne during the next three years because of higher demand on the period of recovering the world economy, Thuan said.
With this price, rubber growers will still have profits of VND3-5 million per tonne, Thuan noted, though they should seek solutions to cut production costs and further increase their profits.
He said the current export price for Vietnamese rubber is not too low, but it is lower than the record high price of some $3,300 per tonne in 2011-12.
Now, farmers still receive profits from growing rubber trees, though the profits are not as high as in the past, Thuan said, so this period might prove to be a good time for farmers to improve the quality of their rubber trees.
Meanwhile, Minister of Agriculture and Rural Development Cao Duc Phat said demand for rubber on the world market has increased, but oversupply has pushed the export price of rubber down. Also, the high inventory of rubber, at present, will fall in the next few years due to the economic recovery throughout the world.
Therefore, industries and sectors should closely follow developments in the world rubber market in the coming years to learn of support for farmers in the remaining development of rubber trees, said Phat.
Also, the domestic rubber industry should review its plan to develop rubber trees to promote the restructuring of the industry and maintain sustainable development in the industry for improving the quality and value of rubber, he said.
At present, the total area of rubber trees in Viet Nam has stood at 900,000 ha, higher than the plan calling for 800,000 ha of rubber trees by 2015, because farmers had spontaneously increased the planting of rubber trees when the export price jumped to a record high in 2011-12.
Yet, when export prices dropped, farmers rushed to cut trees so they might grow other types of industrial crops.
Regarding the market, Viet Nam has exported its rubber products to 70 countries and territories, including China, its largest export market of local rubber.
For the long term, ministry officials urge, the domestic rubber industry should increase trade promotion activities, expand export markets and find new export markets to reduce dependence upon the Chinese market.
The industry should also diversify export products from the rubber from trees, the ministry said.
Tran Ngoc Thuan, general director of the VRG, said the group has mainly exported latex and developed products related to rubber trees, including processing of rubber wood and products made from rubber, such as tube and tire, shoe soles, gloves and mattresses.
Viet Nam gained a year-on-year increase of 20 per cent in export value of rubber to $1 billion last year.
In the first seven months of this year the country exported 451,000 tonnes of rubber, valued at $828 million, a drop of 10 percent in volume and 32 percent in value.
Ministry tries to manage sugar inventory
The Ministry of Industry and Trade late last week required businesses to cease importing sugar for re-export via auxiliary border gates in the northern province of Lao Cai.
This move was intended to block the illegal sale of this sugar in the domestic market.
Ha Huu Phai, head of the Viet Nam Sugar and Sugarcane Association in the northern region's branch told Dau tu (Viet Nam Investment Review) newspaper that this would help the domestic sugar and sugarcane industry to partly remove difficulties faced by high inventories.
According to the association, on August 4, the industry still had an inventory of 414,000 tonnes of sugar even though the Ministry of Industry and Trade allowed unrestricted sugar exports in small volumes via the neighbouring border gates.
Last year, the quantity of temporarily-imported sugar for re-export from Viet Nam was quite large. However, customs agencies found that thousands of tonnes were not re-exported as regulated after being imported, but instead consumed illegally in the domestic market.
It, together with the sugar smuggled in via South Western border gates, had caused the sugar price produced in the country to become VND3,000 to VND4,000 (15 cent - 19 cent)per kilo higher than that of illegal imported sugar.
According to the Viet Nam Sugar and Sugarcane Association, smuggled sugar, which was priced lower and amounted to hundreds of thousands of tonnes a year harmed local producers amid a huge volume of sugar stockpiles.
Besides the illegally imported sugar, however, experts were also concerned about the rising pressure on domestic sugar and sugarcane production industry when import tax on sugar would be cut to zero from the current 5 per cent by 2015 under the ASEAN Trade in Goods Agreement (ATIGA).
Moreover, the cheap sugar from outside the ASEAN bloc would also flood the country once the Trans-Pacific Partnership Agreement was signed, they said.
Currently, the price of sugar in Viet Nam is roughly US$50 per tonne, almost at par with the world's most expensive sugar. The prices in Brazil and Thailand, for example, are only US$12 and $25 per tonne.
This was because of low productivity of local sugar and sugarcane production. Viet Nam's sugar productivity is only 64 tonnes of sugarcane and 5.4 tonnes of sugar on a hectare while the figures in Thailand and Brazil are 100 and 120 tonnes of sugarcane, and 8 and 12 tonnes, respectively of sugar.
Experts have urged sugar and sugarcane enterprises to quickly undergo comprehensive technological restructuring and introduce a new sugarcane breed into production if they do not want to see the doors shut on them when cheap priced sugar enters the country.
Deputy Minister of Agriculture and Rural Development Vu Van Tam said that sugar processing companies must revamp their production in order to cut costs, which was vital for competition.
He added that the planning of cultivation areas should be revamped to ensure efficiency and productivity.
Australia pledges $2.9m for reform project
Australia will provide up to AU$3.1 million (US$2.9 million) to Viet Nam through an initiative called "Restructuring for a More Competitive Viet Nam (RCV)" meant to help the country in its economic reform efforts.
"Viet Nam urgently needs to restructure its economy and transform its growth models. This project has come at the right time," said deputy minister of Planning and Investment Dang Huy Dong at the project launch workshop yesterday.
The two-year project focuses on enhancing business environment, revamping the rural sector and improving competition policy.
The Central Institute for Economic Management, together with the Institute of Policy and Strategy for Agriculture and Rural Development and Viet Nam Competition Agency, will collaborate in implementing the project.
One major goal is to reduce administrative burdens on private sector investment.
"In terms of ease of starting a business, Viet Nam will be able to improve its current ranking of 109th to 60th on the World Bank's report by cutting four more administrative procedures," said Nguyen Dinh Cung, head of the Central Institute for Economic Management (CIEM).
He also said the project would support legal and regulatory reforms, such as revising the laws on Enterprises and Investment and shortening the list of prohibited and conditional business sectors in order to give private businesses more space to grow.
There will be also steps to remove "market distortions" caused by state-owned enterprises, including a proposal of "a fixed state-budget regime" applied to state enterprises.
CIEM, the government's top think tank, takes the position that efficient competition between public and private business requires stripping state companies of their current privileges and exclusive rights.
The RVC project also aims to identify barriers to restructuring Viet Nam's agriculture sector with a focus on enhancing the value chain for rice.
Viet Nam exported 3.3 million tonnes of rice in the first half of this year, making $1.49 billion in revenue. The country was the world's second-largest rice exporter after India in the 2012 – 2013 period.
"Rice export volume is high, although its revenue has contributed only 10 per cent to the country's total export turnover of key agricultural products," said Dang Kim Son, head of the Institute of Policy and Strategy for Agriculture and Rural Development.
He said the RVC project would address "institutional bottlenecks" to improve the value chain for rice, from planting and processing to marketing.
The pilot programme will run in the Mekong Delta province of Dong Thap, where paddy farmers will be asked to replace some of their rice land with other crops, apply water-saving irrigation and use more machinery.
Viet Nam has laid out a master plan for economic restructuring to 2020 aimed at improving the quality, effectiveness and competitiveness of the economy.
"Australia stands ready to support Viet Nam in this important reform process," Australian Ambassador Hugh Borrowman said.
Vietnamese shrimp exports up more than 50%
The total export value of Vietnamese shrimp and prawns increased by 59 per cent to reach US$1.96 billion between January 1 and July 15 this year.
According to the general department of customs, the export value of shrimp and prawns in the first half of July increased by 31.4 per cent year on year to reach $166.1 million.
Between January and mid-July, the export value of white-leg shrimp accounted for 59.5 per cent of the total export value of $1.165 billion, while the export value of tiger prawns was $660 million, said the customs department.
The three largest export markets for Vietnamese shrimp and prawn were Japan, the US and the EU, with Japan being the largest.
However, in the first half of July, the strongest growth in export value year over year — between 100 per cent and 298 per cent — were in exports to the Netherlands, South Korea and the US.
The total value was expected to exceed $2 billion for the period between January and the end of July, the general department of customs said.
Truong Dinh Hoe, general secretary of the Viet Nam Association of Seafood Exporters and Producers, said the association expects Viet Nam to gain $3.5 billion from exporting shrimp and prawns this year, compared to $3 billion last year, reported the Thoi bao Kinh te Viet Nam (Vietnam Economic Times )newspaper. This is because the export of Vietnamese shrimp and prawns increased in quantity, value and demand in the first half of this year.
Meanwhile, Viet Nam has stable supplies of these products till the end of this year, compared to the low supplies from China and Thailand, two large producers of shrimp in the world.
Supporting industry hoped to drive industrial growth
Ho Chi Minh City , the country’s largest economic hub, has pinpointed the development of supporting industries as top priority to speed up its industrialisation and modernisation process.
The city is now home to 10 industrial zones (IZs) covering an area of over 1,500ha. It plans to use 650ha of its land to build three IZs designed for supporting industry companies, including foreign direct investment firms that will support technology transfer and human resources training for the city.
Head of the management board of the HCM City Export Processing and Industrial Zones Authority (Hepza) suggested selecting Hiep Phuoc and Le Minh Xuan 3 IZs in Nha Be and Binh Chanh districts to draw businesses in the field to serve engineering, electronics, and computing.
Particularly, the Vietnam-Japan technology park in Hiep Phuoc, which is expected to be put into operation in this October, will help promote links between Vietnamese and Japanese small- and medium-sized enterprises (SMEs), contributing to the city’s supporting industry development.
Director of the municipal Department of Industry and Trade Le Van Khoa proposed the city draw up a legal resolution on developing SMEs in the field along with setting up a group of research on the local products that are competitive in the market.
The Ministry of Industry and Trade is now developing a decree focusing on measures to support technology, production management and customer services in the field, which will be submitted to the Government in the fourth quarter of this year.
Bac Ninh focuses on developing support industries
The northern province of Bac Ninh in the coming years will focus on developing support industries in order to increase the competitiveness of local industrial products, attract foreign investment, contributing to the process of industrialisation and modernisation, Director of the provincial Department of Industry and Trade Vu Duc Quyet told the Vietnam Economic News in an interview.
Bac Ninh currently has 15 industrial parks (IPs) including nine in operation with total occupancy rate of 79 percent. The location of many world-renowned multi-national corporations such as Canon and Samsung has spurred Bac Ninh’s industrial growth towards modernisation.
According to the Department of Industry and Trade, the province’s industrial production value in first six months of 2014 was estimated at 317.515 trillion VND, up 13.8 percent compared to the same period last year.
In particular, the state sector reached 1.645 trillion VND, the private sector reached 2.216 trillion VND, and the FDI reached 293.652 trillion VND. The export value also reached 14.874 billion USD, an increase of 26.3 percent over the same period last year. Total retail sales of goods were estimated at 13.648 trillion VND, up 8.7 percent.
It is expected that the provincial industrial production value will hit 707.515 trillion VND and export value will reach 30.874 billion USD this year, said Vu Duc Quyet.
Bac Ninh is expected to further boost local industrial development as the Samsung’s and Nokia’s projects are kicked off.
According to the Department of Industry and Trade, to date, the province has recorded about 200 support industry investment projects, with total registered capital of more than 1.33 trillion USD.
Cheap labour is no longer a competitive advantage in attracting FDI for Bac Ninh. The province needs to be concerned about how to meet the needs of newly-located foreign companies to produce reasonably priced quality products and spare parts being able to compete with the imported alternatives. Therefore, the province is gearing up the development of its support industries.
According to Deputy Director of the Department of Industry and Trade Ta Dang Doan, the development of support industries is aimed to attract small and medium-sized enterprises (SMEs) into supply of products, components and associated services for large corporations such as Samsung, Canon, and Nokia; and gradually acquire the technical know-how.
“Bac Ninh will create favourable conditions for SMEs in terms of land lease and rental, machinery and equipment funding. In addition, it will focus on Japanese investment promotion,” he was quoted as saying.