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BUSINESS IN BRIEF 14/1

Parkson opens first mall in Da Nang; Senior SHB executive arrested; Mobile World receives $2m in shares after bonus payout; State Treasury to issue G-bonds in Q1; Guidelines issued on selling public firms

Parkson opens first mall in Da Nang

Parkson opened its first mall in the central city on Sunday, marking its 10th shopping centre to be opened in Viet Nam

The VND63 billion (US$3 million) project, which covers 10,000sq.m in the Parkson Vinh Trung Plaza B, is expected to report sales of between $12 million and $15 million per year and creating nearly 1,000 jobs.

Previously, Parkson stores, housed in Ha Noi Keangnam Landmark, closed its doors suddenly on January 2. Parkson management unit said the stores' closure was a result of "huge losses" it and its partners had suffered since the shopping mall's opening in 2011.

Senior SHB executive arrested

Sai Gon-Ha Noi Commercial Joint Stock Bank (SHB) senior executive Tran Huy Anh was arrested last week for allegedly misappropriating hundreds of thousands of US dollars, tuoitre.vn reported.

Huy Anh, 32, is the head of the SHB's transaction office located on Thai Thinh Street.

The Director of SHB's Ba Dinh branch and its internal audit department chief had caught Huy Anh red handed on December 12, 2014, when he was found using the bank's official seal to stamp a fake deposit contract worth about VND30 billion (US$1.4 million).

Following the incident, the SHB's branch had reported the case to the police.

A customer in the Dong Da District had deposited $230,000 with a 15-month term at SHB's Thai Thinh's branch on July 16, 2014. However, Huy Anh did not enter the money into the bank's system but kept it for personal use.

In November 2014, the customer wanted to withdraw the money, but Huy Anh failed to pay her. He reportedly then persuaded the customer to sign a fake VND30 billion-deposit contract and used this contract to borrow money from another bank.

Mobile World receives $2m in shares after bonus payout

Nguyen Duc Tai, chairman and CEO of Mobile World Investment Co (MWG), is reported to have received 387,700 shares in the company under its employee stock ownership plan (ESOP), worth around VND42.3 billion (US$2 million).

Tai directly owns 2.67 million MWG shares and has indirect ownership of 15.45 million shares through Retail World Investment Consultant LLC. With the current price of nearly VND110,000 ($5.14) a share, Tai is 7th on the list of the richest people in the Vietnamese stock market.

Mobile World last month issued 5.33 million ESOP shares to nearly 600 employees. The issuance, extracted from its after-tax profit, is a bonus for the company's staff thanks to its positive performance last year.

However, the shares will be restricted from transferring from December 10, 2014 to December 10, 2015. Shareholders can sell 50 per cent of ESOP shares from November 12, 2015 to December 12, 2016. From December 13, 2016 onwards, the shares will be freely transferable.

2014 was a good year for the mobile phone retailer, with estimated revenues of VND15.5 trillion ($752 million) and after-tax profits of VND670 billion ($32 million). The figures mark year-on-year increases of 66 per cent and 159 per cent, respectively.

The company opened 350 new thegioididong.com and dienmay.com outlets last year. Online sales of these two sites were around VND1 trillion ($46.7 million) last year and are expected to double this year. CEO Tai said the company would strive to reach this year's turnover target of $1 billion.

Mobile World debuted shares in July 2014 and its price climbed almost 34 per cent in less than one year from VND81,500 to nearly VND110,000.

New expressway needs funding for completion

Nearly VND1.3 trillion (US$61.5 million) was needed to complete a section from Ha Noi to Thai Nguyen on the new National Highway 3, according to the Ministry of Transport's Project Management Board 2.

The project started in November 2009 and opened to traffic in January 2014, but remains unfinished due to unforeseen work and costs.

The Management Board has asked the ministry for additional investment in the form of the build-operate-transfer model to complete the section, which is 63.8km long .

The section was part of the longer expressway running from Ha Noi through Thai Nguyen to Bac Kan Province, known as the Ha Noi–Thai Nguyen–Cho Moi Expressway, which is 90km long and one of seven expressways under the Viet Nam Expressway Plan to 2020, Deputy General Director Luu Viet Khoa of the Management Board.

Khoa said the expressway, which is divided into two sections from Ha Noi–Thai Nguyen and Thai Nguyen–Cho Moi, would complete a network of expressways in the North, and contribute to the region's socio-economic development plans, especially as the number of accidents on the old National Highway 3 was increasing.

Added investment is needed for an additional layer of asphalt so the road can handle high-speed traffic as wells as the constructions of underpasses and slip lanes.

The installation of an intelligent transportation system for enhanced safety along the road will also be developed using this extra funding.

HCM City surpasses revenue targets

Budget revenue for HCM City last year reached VND164.23 trillion (US$7.7 billion), 8 per cent higher than the year's target and a year-on-year increase of 4.73 per cent.

The figures were released during a conference held last Friday to review tax operations in HCM City.

Le Xuan Duong, deputy head of the HCM City's Tax Department, said last year domestic revenue (excluding budget collections from crude oil) exceeded the target to reach VND129.5 trillion ($6.07 billion), an increase of nearly 9 per cent over the previous year and four per cent higher than the year's target.

The budget collection from the economic sector in the city, for the first time, surpassed the city's target last year to top $92.5 trillion ($4.3 billion), accounting for more than 70 per cent of total domestic revenue.

Le Thanh Hai, secretary of the Party Committee of HCM City, said tax collection from the city's four key industrial sectors had increased significantly over the past years and contributed up to 59 per cent of total domestic revenue last year.

This proved that the city's economic sector was heading in the right development direction, he said, adding that there were 16 businesses in the city with tax payments of up to VND1 trillion ($46.9 million) each.

Nguyen Dinh Tan, head of the city Tax Department, attributed the high budget collection results to the city's policies to help businesses untie difficulties in production, trading and consumption, and programmes to enable them to improve competitiveness and promote trade both within and outside the country.

The department made efforts to strengthen administrative reform last year, he said, noting that there were 9,000 enterprises paying tax online in 2014. In addition, nearly 98 per cent of businesses registered for online tax payments.

Nguyen Thi Hong, deputy chairwoman of the HCM City People's Committee, ordered tax agencies to continue simplifying administrative procedures and hold dialogues with businesses to solve difficulties faced by them and help them understand new policies.

She also ordered the department to improve the reclaimation of tax arrears from businesses in order to reduce total tax arrears to less than five per cent of the total budget revenue by the end of this year.

Do Hoang Anh Tuan, deputy minister of Finance, said the department should strengthen online tax registration and tax payments online to enable every business in the city to register for online tax payment.

He also urged the tax department to promote the use of e-invoices among businesses.

The Ministry of Finance has assigned the city to collect VND265.77 trillion ($12.46 billion) in budget revenue this year, of which VND143.77 trillion ($6.74 billion) would be in domestic revenue, excluding income from crude oil.

Farming sector to ramp up exports in new year



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The agricultural sector will seek strong growth in production and business this year, after recording increases in exports last year, according to the Ministry of Agriculture and Rural Development (MARD).

In 2015, the agricultural sector expects to see an increase of 3-3.3 per cent in gross domestic product (GDP), a year-on-year surge of 3.5-3.7 per cent in the value of production and US$32 billion in the value of farming exports, forestry and seafood products, compared to $30.8 billion in 2014, reported vietnamplus.vn.

Also, the agricultural sector hopes to focus on increasing high added value agricultural products, efficiency and sustainable development.

In 2015 the local economy is expected to further integrate into the global economy, which will cause the agricultural sector to continue reviewing and adjusting plans and structures of production to increase productivity, as well as the quality and efficiency of exports and local markets, said Minister of Agriculture and Rural Development Cao Duc Phat.

To raise the total export value of the sector to $32 billion this year, the ministry will actively work to implement existing multilateral and bilateral agreements, including with the World Trade Organisation and regional free trade commitments.

Officials noted that it will stand side by side with exporters by updating them on foreign markets' latest trade policies and jointly devising feasible market strategies for added-value products.

To extend its commercial reach, the ministry will also promote marketing activities and promptly deal with technical and trade barriers.

According to the MARD, Viet Nam gained a year-on-year increase of 11.2 per cent in the export value of farming, forestry and fisheries products to $30.8 billion for 2014, despite lackluster demand in markets throughout the world.

The farming, forestry and fisheries sector also posted an estimated $9.5 billion in its trade surplus, a rise of 7.7 per cent.

The ministry said, in 2014, that the value of most export products has surged against previous years, though 2014 has not been a promising year for the consumption of farm products at home or abroad.

Demand for farm products on the world market has continued falling since 2012 because key export markets of Vietnamese farm products, such as the European Union (EU), the US, Japan and the Philippines, have seen slow recoveries and low purchasing power to directly affect exports from Viet Nam.

However, seafood and forestry exports had strong growth in export values to push the sector's total export value up last year.

Seafood took in $7.92 billion, marking a yearly growth of 18.4 per cent, with the US making up 21.81 per cent of the total export value and becoming the leading seafood importer for Viet Nam.

Also, wood and wooden products enjoyed an increase of 11.1 per cent in earnings, at $6.2 billion last year. The US, China and Japan are the largest buyers of wood products, accounting for 66 per cent of the total export volume.

VN aims to increase rice exports

Viet Nam will focus on Africa, West and South Asian markets to boost rice exports amidst harsh competition anticipated this year, according to the Ministry of Industry and Trade.

Those markets saw rising demands for rice, the ministry's Department of Africa, Western and Southern Asia Markets said.

The department cited statistics from the Food and Agriculture Organisation of the United Nations, which stated that rice consumption in Africa, with a population of more than 1 billion, was estimated at some 24 million tonnes per year and rising.

Since 2009, Africa has imported 8-10 million tonnes of rice annually, worth between US$3.5-5 billion.

The department pointed out that import demands for rice in West and Southern Asia were also high. However, currently many countries, such as Saudi Arabia, Kuwait and Bangladesh, mainly imported rice from Thailand or India.

Statistics from the Viet Nam General Department of Customs showed that, as of November 2014, Vietnamese rice was exported to 46 of 78 markets in Africa, Western and Southern Asia markets, with a total turnover of about US$410 million.

Rice exports to major markets, including Ivory Coast, Angola, and Cameroon, however, declined sharply last year due to price competition from Thailand, India and Pakistan.

The decline was also attributed to the impact from the Ebola epidemic, which struck several West Africa countries.

The ministry believes there are significant potentials for Viet Nam to expand rice exports into these markets this year.

Among measures being undertaken to boost rice exports, the ministry said, included negotiating memoranda of understanding (MoU) to sell rice to the Ivory Coast, Kenya, Angola, Mozambique and Madagascar.

Also, marketing and promotional efforts would be strengthened, while co-ordination with other governmental agencies involved in agro-forestry-fisheries exports would be improved.

Support to provide market information and opportunities, along with the establishment of warehouses in major markets, such as Cameroon, Angola, and Mozambique, would also be provided to make it easier for Vietnamese exporters to expand into those markets.

2014 was a difficult year for rice exports from Viet Nam due to the impact of oversupply, high inventories and significant pressure from the competition, besides the impact from El Nino, Ebola and political unrest in several regions.

Statistics showed that as of November, rice export from Viet Nam reached 6.062 million tonnes, valued at US2.8 billion, down 2.3 per cent in volume, while up 2.6 per cent in value. Rice exports for the full year were expected to be 6.5 million tonnes.

As difficulties for rice exports were expected to continue this year, the ministry urged keeping a close watch on market fluctuations and expanding exports to new and potential market, while enhancing the quality of Vietnamese rice.

More trade opportunities to be offered at home, abroad

The newly-approved 2015 national trade promotion programme, worth VND100 billion (US$4.65 million), has been highly acclaimed by businesses, bankers and localities across the country, a conference in Ha Noi heard late last week.

The programme covers 212 projects, involving expansion of markets at home and abroad, trade promotion in economic zones and training for businesses, co-operatives and marketing organisations.

It will also focus on the domestic market, including establishing distribution channels in rural, mountainous and border areas, as part of efforts to push the campaign "Vietnamese should prioritise use of Vietnamese goods."

During the review of the 2014 national trade promotion programme and launching of tasks for 2015, Deputy Minister of Industry and Trade Do Thang Hai urged firms to seize the opportunities offered by the upcoming free trade agreements with the European Union, South Korea, the Union of Customs of Russia, Belarus and Kazakhstan, among other deals.

Deputy Director of the Trade Promotion Agency (Vietrade) Ta Hoang Linh said the national trade promotion programme in 2014 made some encouraging achievements in this context even as global and domestic economies continued to encounter many challenges.

The programme supported the domestic firms effectively in not only exploiting the local market but also the traditional outlets such as the US, the EU, Japan and Korea, besides seeking new markets, Linh said.

More than 7,680 domestic enterprises received help to participate in trade promotion activities through the programme in 2014, according to Vietrade's statistics.

Trade fairs held under the scheme attracted more than 2.21 million visitors, with the total value of signed deals, memorandums of understanding and sales revenue reaching above $1.89billion.

Last year, the State distributed VND110.13 billion (approximately $5.12 million) to the programme to implement support activities for domestic enterprises.

State Treasury to issue G-bonds in Q1

The State Treasury of Vietnam plans to issue bonds worth 70 trillion VND (3.28 billion USD) in the first quarter of 2015, said the treasury in January.

The bonds will be mobilised to meet the capital demand of the State Budget and the local development investment in the first quarter.

The State Treasury said that it will mobilise 55 trillion VND (2.58 billion USD) in five-year bonds, 10 trillion VND (469.4 million USD) in ten-year bonds and 5 trillion VND (234.7 million USD) in 15-year bonds.

Last December, the Ministry of Finance announced that Vietnam raised nearly 290 trillion VND (13.5 billion USD) from bond sales in 2014, equivalent to 7.27 percent of the country's gross domestic product (GDP) in the same year.

Of the total, more than 234 trillion VND (11 billion USD) were raised from government bonds (G-bond), an increase of 30 percent compared with 2013, and 3.5 times higher than in 2010.   

Businesses in Binh Duong seek 45,000 unskilled workers

Enterprises in Binh Duong province, one of the southern region’s economic centres, need to recruit over 45,000 unskilled workers in 2015 to meet their production demands in garment, footwear and wood manufacturing fields.

According to the province’s employment centre, more than 21,000 unskilled jobs were available during its first job exchange session on January 11, offering a monthly salary of 4-5 million VND (235 USD).

The businesses looking to hire new employees include Truong Thanh Wood Industry Company, Apex Vietnam Co., Ltd, and Sheico Vietnam Co., Ltd.

Nguyen Thanh Phuong, head of the job introduction office, said that this year the office continues to help local businesses take part in labour linkage programmes with other provinces to attract workers.

Last year, businesses in the province generated jobs for more than 46,000 labourers. Over 4,000 businesses registered to recruit 70,000 labourers at job exchange sessions during 2014, but only 37,000 people were ultimately employed.

Textile, garment firms expect buoyant growth

The upcoming signing of a raft of free trade agreements, both bilateral and multilateral, between Vietnam and other nations and organisations will have a positive impact on the performance of the local textile and garment industry, the Vietnam Investment Review (VIR) says.

Accordingly, since late 2014 the sector’s major players such as Phong Phu, Nha Be, Thai Nguyen and Hung Yen garment companies said they had already signed export orders lasting through most or all of the year.

Chairman of Hung Yen Garment Nguyen Xuan Duong was quoted as saying export orders are not a concern for the company as it had already signed export contracts with major customers through the end of the third quarter.

Last year Hung Yen Garment eyed a 16 percent hike in total export value to 350 million USD, and now expects even better results this year thanks to more favourable export conditions.

Another industry leader, Ho Chi Minh City-based Nha Be Garment Corporation (NBC) revealed that is had signed export orders through the end of the year.

"Our main target this year aims to boost productivity while improving quality to achieve the best possible efficiency," NBC Deputy General Director Nguyen Ngoc Lan was cited as saying.

According to Deputy Chairman of the Vietnam Textile and Apparel Association (Vitas) Le Tien Truong, the sector’s high export value of 24.5 billion USD (up 19 percent on-year) in 2014 was the result of constant endeavours by businesses in the sector, and also from benefits of Vietnam’s free trade agreement (FTA) negotiations with the EU, the Republic of Korea and the Customs Union as well as the Trans-Pacific Partnership (TPP).

Though these FTAs have yet to take effect, they have already motivated positive results with Vietnamese producers focusing their deal-making on countries involved in these agreements.

Consequently, Vietnam witnessed double-digit growth in its textile and garment export value to major markets last year.

Exports to the US were valued at nearly 9.8 billion USD, Japan 2.7 billion USD and the Republic of Korea 2 billion USD.

This also sets a premise for the textile and garment sector to see continued strong growth this year.

Accordingly, the textile and garment sector aims to achieve an export value of 28-28.5 billion USD this year, with exports to the US market hopefully surpassing 10 billion USD.

Handicraft exports surge

In 2014, the export value of Vietnamese handicrafts jumped 8 percent on-year to 1.6 billion USD, accounting for one-fifth of world market share, radio The Voice of Vietnam (VOV) reported.

However, Vietnam’s handicraft exports have just targeted the low-end markets and have not matched their full potential.

This was recently announced by the Department of Processing and Trade for Agro-Forestry-Fisheries Products under the Ministry of Agriculture and Rural Development (MARD).

The MARD had approved a plan to export handicraft products for the period 2010-2015, which set an export target of 1.6 billion USD. However, the sector fulfilled the target a year ahead of schedule, the Ministry reported.

Last year, Vietnam’s bamboo and rattan exports grossed 530 million USD while the turnover for ceramic, weaving, wood sculpture and household products was 480 million USD, 270 million USD, and 130 million USD, respectively.

Other ancillary products in the handicraft industry fetched an export turnover of some 190 million USD.

The US, Europe and Japan have historically been the traditional markets for Vietnam’s handicrafts, making up a huge proportion of the sector’s total exports. However, handicraft exporters have shifted their focus to new markets within BRICS including Brazil, Russia, India, China and South Africa.

Vietnam Handicraft Exporters Association (Vietcraft) General Secretary Le Ba Ngoc said last year, an inflow of handicraft orders from Japan and China dramatically improved the market in Vietnam. The move was primarily attributable to policy changes in China that increased minimum wage for workers and in turn led to higher production costs.

However, Vietnam’s handicraft exports are still far from matching potential, according to Vietcraft. At present, the world market consumes handicraft products estimated at 100 billion USD each year while Vietnam has just 1.5 percent of world market share.

Vietnam’s export value of 1.6 billion USD has been too low compared to the number of 2,790 craft villages.

Vietcraft Vice President Do Van Khoi said due to lack of investment in production technologies and product design, several craft villages and businesses have opted to make low-cost products instead of higher added value items.

Ba Ngoc warned that to promote advantages and increase export turnover, Vietnamese enterprises should focus on mid-end markets in line with their production capacity, material source and working skills and put off targeting higher end markets until later years. Especially, they should also apply for trademark protection.

The MARD has also devised concrete solutions to accelerate the development of craft villages and boost exports. At the same time, the ministry should take measures to build sustainable material zones with a priority given to specialised cultivation areas.

In addition, the Ministry urged enterprises to develop traditional handicrafts with lower investment capital, high job creation and focus on training human resources to speed up the export of highly added value and creative handicrafts and seek highly lucrative markets.-

Guidelines issued on selling public firms

Prime Minister Nguyen Tan Dung has signed Decree128/2014/ND-CP regulating the sale of wholly State-owned enterprises (SOEs).

According to the decree, the price of a sale will be defined in accordance with the method of selling (auction or direct sale), payment method, registered price and the number of employees that the buyer will continue to hire, with the price being no less than the reference price.

In the event that two buyers seek to purchase a SOE, the company will be sold through auction with a commitment to handle labour issues. If there is only one buyer, the method chosen will be direct negotiation.

The proceeds from the sale will be contributed, in part, to the State budget, with the amount being equivalent to the value of the land use rights. The remaining money will pay for the costs of preparations of the sale, resolving debts that the buyers do not inherit and implementing policies for employees.

Other destinations for money received from the sale include corporate arrangement support funds.

The decree will take effect in March and is designed for the purpose of moving forward with the process of restructuring and equitising SOEs based upon Government guidelines.

Can Tho strives for 485 million USD aquatic exports

The Mekong Delta city of Can Tho targets an export value of 485 million USD from aquatic products in 2015, a 23.7 percent rise over 2014, according to the municipal Department of Industry and Trade.

To this end, the city will focus on enhancing product quality to meet food safety requirements and diversifying export products, said Duong Dinh Hiep, deputy head of the department.

Together with expanding the application of international quality standards in aquaculture farms, the city will concentrate on brand-building activities and calling for more businesses to invest in top-to-end production chains, said Hiep.

Farming areas to the VietGAP and Global GAP standards will be expanded to double the current 500 hectares, while quality control will be tightened at 12,000 other hectares, Hiep revealed.

As part of efforts to ease raw material shortage, the locality plans to buy over 100,000 tonnes of shrimp and tra fish from the neighbouring provinces of Ca Mau, Kien Giang, Bac Lieu, Soc Trang, An Giang and Dong Thap, he said.

Hiep added that this solution is expected to raise the proportion of high-quality aquatic products to 22 percent out of total 160,000 tonnes projected to be exported in 2015, meeting the needs of tough customers in Europe, North America, Oceania and Japan .

According to the department, in the first 10 days of 2015, the city shipped abroad 4,400 tonnes of aquatic products for 13.3 million USD, up 1.7 percent over the same time last year.

Data from the city’s Department of Investment and Planning showed that in 2014, despite technical barriers and trade disputes initiated by foreign partners, the city exported 140,000 tonnes of aquatic products worth 420 million USD, an increase of 9 percent year on year.

The results pushed Can Tho’s total export revenue in the year to 1.35 billion USD, the highest recorded by a Mekong Delta locality.

Sugar, poultry egg imports to rise in 2015

The Ministry of Agriculture and Rural Development (MARD) has agreed with the Ministry of Industry and Trade (MoIT)’s 2015 plan on import quota of sugar, salt and poultry egg as part of efforts to realise WTO commitments.

Accordingly, Vietnamese companies will be allowed to import 81,000 tonnes of sugar, 102,000 tonnes of salt and 555,600 poultry eggs this year.

Among 102,000 tonnes of salt, the same volume as last year, 2,000 tonnes and 40,000 tonnes will be imported by firms operating in the medical and chemical sectors, respectively. Chemical businesses are encouraged to use domestically-produced salt for their production activities.

The MARD asked the MoIT to roll out measures to create transparency and justice among importers.

Last year, the country bought 77,200 tonnes of sugar and 529,2 00 poultry eggs from overseas markets.

Phu Quoc island district moves to reel in more investments

Authorities of Phu Quoc island district, the southern province of Kien Giang, plan to employ a wide range of measures to invite more domestic and foreign investors into the locality this year.

Located on the Vietnam-Cambodia-Thailand marine economic corridor, Phu Quoc district covers more than 593sq.km with a population of over 100,000. It comprises 27 islands with Phu Quoc being the largest and dubbed the Pearl Island.

Local administration is making the best use of special mechanisms and policies given by the Government along with stepping up investment promotion programmes and tackling administrative and infrastructural difficulties.

The district is overhauling detailed development plans for functional areas and putting into use critical infrastructural facilities. At the same time, resident relocation and site clearance will be accelerated to ready the ground for licensed projects.

In 2014, the Kien Giang provincial People’s Committee licensed 53 projects in Phu Quoc district, including four FDI ones, with a total capital of nearly 65 trillion VND (3.09 billion USD). The district is currently home to 136 projects worth 140.21 trillion VND (6.67 billion USD) that cover more than 5,000 hectares, according to the Investment and Development Authority of Phu Quoc island.

Key facilities have been operational and proved effective such as Phu Quoc International Airport, An Thoi International Seaport, Bai Vong tourism port, and the 110kV undersea power cable linking mainland Ha Tien town and the island.

Meanwhile, large-scale tourism projects, including luxury hotels, are well underway in the tourist areas of Bai Truong, Bai Dai, Bai Khem, and Bai Sao. Local hotels have been upgraded to cater for over 7,500 visitors a day. Particularly, 300-ha Vinpearl Phu Quoc resort that houses a five-star hotel with 750 rooms, a 27-hole golf course, and a modern entertainment centre was inaugurated in 2014.

Vice Chairman of the Phu Quoc district People’s Committee Huynh Quang Hung attributed such projects to local development, elaborating that last year, local GDP grew by 27 percent from 2013 while per capita income topped 4,000 USD.

The district welcomed 586,000 tourist arrivals in 2014, including over 124,500 foreigners, representing respective increases of 40 and 32 percent from a year earlier. Therefore, it also saw an 84 percent rise in tourism earnings to more than 2.2 trillion VND (104.7 million USD), he added.

However, the Kien Giang People’s Committee also revoked licenses of 23 projects in Phu Quoc, including five FDI ones, due to their sluggish implementation, unconformity with the adjusted planning, and investors’ poor financial capacity, the official noted.

Kien Giang is working on procedures to recognise Phu Quoc Island as a provincially-run city in the time to come, which is a step in turning the island district into a special economic-administrative zone by 2020.

In the long term, the island district is envisioned to become an economic and political hub, a crucial frontier in national defence and security, and a crucial transit point for international travellers.

Forestry industry targets VND25 trillion of production value

Forestry production value increased 7.09% in 2014 while forestry exports earned USD6.3 billion, a 14% rise over a year earlier, reported the Ministry of Agriculture and Rural Development’s Administration of Forestry.

The industry planted nearly 220,000 hectares of forest, 105% of the year’s plan and reached forest coverage of 41.5%.

In 2015, the industry targets a forestry production value of VND25 trillion, raising the production value from 7% to 7.2%. It also strives to earn an export turnover of USD6.7 billion and targets 42% of forest coverage.

Together with the specific goals, the industry will focus on improving the productivity and value of plantation and production forests and closely control violations to natural forest.

Building strategy to attract FDI in agricultural sector

While foreign investors of the whole country tend to increase, the flow of capital into the agricultural sector is too small in the scale of projects and the low proportion of the investment capital compared to total foreign direct investment (FDI) of the whole country. This requires the agricultural sector to have a long-term strategy to attract FDI.

According to Mr. Nguyen Van Toan, Deputy Chairman of the Vietnam’s Association of Foreign Invested Enterprises (VAFIE), the reason why FDI in the agricultural sector is gloomy over the past long-time because the investment in the agricultural sector hasn’t got quick benefit like other sectors. Moreover, the investment in the sector usually meets natural calamities, excluding market risks.

Moreover, attraction of FDI in the agricultural sector is small because the sector still lacks a long-term strategy and orientation in order to determine the role of the capital for development of the agricultural sector; specific projects prioritized to attract potential investors; legal system and mechanism; and policies for foreign investors in the agricultural field, which are not clear and transparent.

In the condition of scattered agricultural and forestry production, it is difficult to create a large material region for investors. Therefore, it is hard to attract FDI in cultivation but it should encourage investment in process because Vietnam still exports many raw agricultural products.

Preferential policies on tax, infrastructure have not enough to lure foreign enterprises to invest in the agricultural sector in Vietnam. Tax reduction is a good thing but it is not a key factor. When foreign investors invests in processing, it seems that they ensure conditions of capital, technique and market. To help manufactory operate well, the enterprises need to ensure stable material sources.

To provide stable materials, it must have a concentrative and stable material region to meet the large-scale production with modern technological application of enterprises. However, foreign investors are not allowed to own a large material region, therefore, it must solve the benefit harmonization between enterprises and farmers.

However, Mr. Toan noted that, it is difficult for enterprises to do it by themselves. It must have the operation of the state by specific policies, planning. In addition, localities and farmers have to work together for better cooperation. Thus, it needs a key model with the support from the state by policies and specific operation manner to lure foreign investors.

Besides the preferential credit policy for investors and materials areas, local authorities are responsible for protection and maintenance of the planned material areas for FDI projects, ensuring adequate supply of materials for them.

More than 30 countries and territories have invested in Vietnam’s agricultural sector, led by Taiwan. However, many investors are mainly from Asia but their technology background is not high such as Thailand, Taiwan, Indonesia. While we have not attracted FDI projects in the agricultural sector from countries with high technology such as the US, Japan, the EU. In addition, the quality of FDI projects in the agricultural sector is not high, mainly small-scale projects. If average investment capital of a FDI project is about USD14.7 million, a FDI project in the agricultural sector only reaches USD6.6 million.

On average, the agricultural sector only attracted about 20 projects and USD130 million among 17,072 FDI projects licensed in Vietnam in 2014 with total capital of USD241.6 billion.

Can Tho aims for increasing seafood exports by 24%

Can Tho province is expected to earn US$485 million from seafood exports this year, a year-on-year increase of 23.4% and accounting for 33.4% of the province’s total export turnover.

Duong Nghia Hiep, Deputy Director of the provincial Department of Industry and Trade (DoIT) said this year seafood exports continue to face certain difficulties. Some countries still impose the highest anti-dumping tariffs on Vietnam’s shrimps and put up more trade barriers to protect their domestic production.

To deal with the difficulties, Can Tho has implemented a series of measures to improve the quality of products, speed up the export of high-grade seafood, ensure food hygiene and safety and diversify export products.

It has bought 100,000 tonnes of prawn shrimp, whiteleg shrimp and tra fish from Ca Mau, Bac Lieu, Soc Trang, Kien Giang, An Giang and Dong Thap provinces to process for exports. This way helps increase the proportion of high-grade export products and meet the needs of fastidious markets in Europe, North America, Oceania and Japan.

According to the DoIT, on the first 10 days of January, the province exported 4,400 tonnes of seafood, earning US$13.3 million, US$1.7 million higher than the same period last year.

Last year, despite technical barriers and trade disputes with many foreign partners, the province still shipped 140,000 tonnes of seafood worth US$420 million, a rise of 9% over a year earlier.

SBV devalues dong to underpin exports, growth

The State Bank of Vietnam (SBV) adjusted the VND/USD exchange rate up by one percent effective January 7 in a move aimed at buttressing exports and economic growth by increasing the purchasing power of the US dollar in the domestic market.

The average interbank exchange rate was adjusted to increase from VND21,246 to VND21,458 per dollar.

In making the announcement the SBV said the devaluation was appropriate given the developments in the global and domestic financial markets, after the exchange rate stayed unchanged for more than six months.

The adjustment is among measures being taken to give effect to the national plan for socio-economic development and State budget operations this year, following Government Resolution 01/NQ-CP issued January 3.

Many of the nation’s leading economists have welcomed the weakened dong as a positive development considering the favourable macroeconomics, monetary market and banking activities over the past year.

They said that a weaker dong reference rate is the appropriate policy to maintain exports as the engine driving the Vietnamese recovery.

They also said the move by the SBV is reasonable and in line with similar movements in other local and international currency markets such as the Republic of Korea’s Won, Japanese Yen, Philippine Peso and Thai Baht.

The adjustment helps increase the competitiveness for Vietnamese exports in the global market by making them less expensive, an economist from HCM City said, adding that on the flip side it will cause a small increase the cost of imports.

Nguyen Tuan Nam, deputy director of Muoi Day Steel Trading Co, Ltd. in turn said the cost of its imports has not been affected much.

At a recent banking conference, SBV Governor Nguyen Van Binh said that exchange rates will rise by two per cent maximum this year.

Tuesday's increase is the first adjustment of the rates in 2015.

Lawmaker emphasises Government’s role as coordinator of economy

The Government should perform well its role as the coordinator and executive director of the economy and limit its direct interference as the owner of businesses to facilitate economic development, Vice Chairman of the National Assembly’s Economic Committee Nguyen Duc Kien said.

In an interview granted to the Vietnam News Agency, the Vice Chairman said the Government’s role is very important for the country to achieve its economic targets this year.

On the part of businesses, he said they should take the initiative in joining the global value chain in order to expand their market and produce more products with high added value.

Kien noted that there are favourable conditions for economic development in 2015 thanks to the promulgation of a series of laws in line with the 2013 Constitution. In addition, the expected signing of many free trade agreements during the year also opens up good prospects for market expansion.

At the same time, the lawmaker explained that the GDP growth target of 6.2 percent for 2015, higher than the 5.9 percent recorded in 2014, was set taking into account the expected positive effects of policies issued in 2014 on removing difficulties for enterprises. In addition, several national key projects will become operational this year, giving a boost to the economy.

Looking back on 2014, the NA Economic Committee Vice Director underlined the fact that it was the first time in several years the country achieved most socio-economic goals, despite the impacts of regional and global situation, particularly China’s illegal placement of its oil rig Haiyan Shiyou 981 inside Vietnam’s exclusive economic zone. He noted that the country also deal with incidents related to Haiyan Shiyou 981 in a timely and appropriate manner, maintaining the trust of both domestic and foreign investors.

The lawmaker pointed to the breakthrough made in the disbursement of public investment and Official Development Assistance (ODA) capital, while exports achieved a growth rate desired by many regional countries.

According to Kien, the 5.9 percent GDP growth in 2014 was at the medium range in ASEAN in terms of overall rate, but the low level in terms of absolute growth. However, the figure should be considered in the context that more than 213,000 domestic enterprises reported no turnover and tax-generated activities during the year, he said, adding that this shows there is still room for a higher growth rate it the country finds suitable solutions to help those enterprises rise out of difficulties.

The lawmaker also hailed the improvement of social security in 2014 despite economic difficulties.

Hong Leong Bank opens fourth transaction office

Hong Leong Bank Viet Nam Limited has opened its fourth transaction office in the Cho Lon of HCM City's District 6.

Le Minh Tam, chief executive officer of Hongleong Bank Viet Nam, said "the opening of the Cho Lon transaction office is a significant milestone in our journey here in Viet Nam."

The transaction office will serve the financial needs of the business community as well as individuals working and living in one of HCM City's fastest-growing area.

Services provided at the office include banking and financial services such as deposit, lending, payment as well as cash services.

The other three outlets are transaction points located in HCM City's District 3, one in Binh Duong Province and a Ha Noi branch in Hoan Kiem District.

Delivery firms urged to tap e-commerce potential

The rapid development of online shopping websites has presented both opportunities and challenges for express delivery businesses, said the Viet Nam E-commerce Association (VECOM).

According to Tran Huu Linh, Head of the Ministry of Industry and Trade's Department of E-commerce, e-commerce is not a requirement, but a tool that creates favourable conditions for delivering goods and setting up logistical capabilities.

Catching up with the trend, several companies in the sector have strengthened their investment to take advantage of the market.

Express delivery services are experiencing a boom nationwide. Online shopping has become a vital trend, creating opportunities for both e-commerce and express delivery enterprises as 35 to 40 per cent of the country's population uses the internet daily.

It is because of this reason that enterprises in the sector are considering developing special services for customers using e-commerce.

For example, DHL-VNPT has invested US$10 million to expand its market and open a 4,900sq m office with modern equipment.

It has 134 transport vehicles and more than 400 staff members for processing the over 10,000 orders received daily.

Viettel Post, which was ranked third in the sector with a 10 per cent market share, has also tapped into the opportunities by investing 3 to 5 per cent of its turnover in technology, thus maximising delivery time and cost.

Nguyen Thanh Hung, VECOM's general secretary said 91 businesses were granted licences by the postal service. However, several enterprises have not implemented the service.

In addition, the poor quality of delivery has not made online shopping cheaper than traditional purchasing methods. This has become a big barrier for the e-commerce sector in Viet Nam.

Hung said delivery companies should improve quality and competitive prices by expanding their scale, enhancing training, as well as the application of information and technology.

He also suggested closer collaboration among online companies and delivery firms to meet customers' demand more effectively.

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

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