Hanoi office rents down slightly in Q3

Hanoi’s office segment has experienced a slight decline in rental prices according to the latest report from Savills on the capital’s real estate market in the third quarter, released on October 12.

The report showed that average rents fell 0.5 per cent quarter-on-quarter due to downward adjustments to both Grade A and C office space but increased 3 per cent year-on-year.

Average occupancy showed an improvement of 2.2 ppts quarter-on-quarter and 2.8 ppts year-on-year, mostly due to Grade B increases of 2.9 ppts quarter-on-quarter and Grade A increases of 2.3 ppts quarter-on-quarter.

Hanoi’s office stock remained stable quarter-on-quarter but increased 9 per cent year-on-year. In the final quarter of the year one project will enter the market, supplying approximately 11,300 sq m.

Total take-up was approximately 23,000 sq m. Grade B led with approximately 18,000 sq m followed by Grade A with 8,400 sq m and Grade C with 4,300 sq m.

It is expected that office supply will increase significantly in the time to come, focusing on Dong Da and Ba Dinh districts and the west of the city as “service office” space becomes more popular.  

The third quarter 2016 saw growth in “service office”, or “co- working space”, which benefits from convenience and flexibility. Customers can have a private working room or use general offices, restaurants, bar, wi-fi and printing areas.

Moreover, companies and groups change from traditional working offices to activity-based workplace solutions. This helps companies chase general development trends in global talent recruitment and retention. New names achieving success in co-working spaces include the Regus Center in Hoan Kiem district, the Elite Business Center in Thanh Xuan district, the THT Center in Cau Giay district, CEO Suite in Ba Dinh district, and Toong in Tay Ho district.

According to CBRE, the openness of the model allows for seating changes depending on the purpose, be it work or meetings.

Vietnam’s office market will see good performance in the time to come, according to Mr. Christopher Marriott, CEO of Savills Southeast Asia. He pointed out that the country’s office market has a lot of growth potential compared with other markets in the region. While commodity and financial markets in countries such as Singapore and Malaysia are slowing down, Vietnam’s manufacturing market is very strong, driven by the appearance of many Japanese companies coming to Vietnam.

1,000 enterprises contribute VND 90trln corporate income tax

The Vietnam Report Corp announced the 2016 top of V1000-1000 Vietnamese enterprises list in terms of paying biggest income tax in Vietnam, aiming to honor and encourage enterprises to contribute to the state's budget collection.

The top 10 enterprises include the Vietnam National Oil and Gas Group, Viettel, Petro Vietnam Gas Joint Stock Corporation...

The total tax paid by the 1,000 largest enterprises was over VND 90trillion, an increase of 11.87 percent compared to last year, accounting for 10.41 percent of total state's budget revenue.

While the top 100 enterprises contributed nearly 75 percent.

The state-run enterprises have always been major source contributing 60 percent of total income tax payments.

Viet Nam to join Bangkok International Gift Fair 2016

Vietnamese companies will come to Thailand to join the 42th Bangkok International Gift Fair 2016 and Bangkok International Houseware Fair 2016.

The exhibition, one of ASEAN's leading international trade fairs for trendy gifts and lifestyle products, will be held at the Bangkok International Trade and Exhibition Centre (BITEC) between October 19 and October 23.

Of these, trade days will be held from October 19 to 21 and public days from October 22 – 23. The organisers expect to welcome nearly 60,000 visitors over the course of the exhibition.

Approximately 600 companies from Thailand, Taiwan, Myanmar, Laos, Cambodia, Japan, Viet Nam, Indonesia, Russia, England and South Korea will participate in the event.

Latest design products from both domestic and overseas firms will be displayed at 1,600 booths over an exhibition area of 40,000 sq.m.

Products displayed at the fairs will include artificial flower and plant, Christmas decorative items, home textile and fabric decorative items, stationery and others.

The event is organised by Department of International Trade Promotion, Ministry of Commerce, Royal Thai Government Office of Fashion and Lifestyle Business Development. 

Overseas remittances must be prioritised as investment source: conference

The Government should offer incentives to projects funded by overseas remittances, a conference on policies related to remittances heard in HCM City on October 11.

Dr Nguyen Van Lich of the Diplomatic Academy of Viet Nam said while it is all very well to get inward remittances, a way must be found to use them effectively rather than merely collecting interest on them or spending them.

Projects funded by remittances must be given greater priority than those by foreign direct investment, he said.

Inward remittances in 2002-15 accounted for 6 per cent of the gross domestic product compared to 7.7 per cent and 3 per for FDI and ODA.

The remittances jumped from $140 million in 1993 to $13.2 billion last year.

Nguyen Kim Anh, deputy governor of the State Bank of Viet Nam, said remittances would keep increasing thanks to labour export and many policies designed to solicit them.

More and more Vietnamese are living and working abroad while improved services are making it easier for them repatriate money home, she said.

To attract more money from overseas Vietnamese and use it more effectively, participants suggested modernising the remittance system.

Le Xuan Sang, deputy director of the Viet Nam Economic Institute, said a system must be developed to monitor remittance sources to ensure everyone benefits and avoid money laundering.

Unofficial channels of money transfer should be stopped, he said.

Investment and tourism policies, including those related to visas for Viet kieu, should be more open, the investment environment should be made more attractive and the banking industry should improve its services and reduce rates, he said.

Some attendees called on the Ministry of Planning and Investment to set up a division that would work to attract overseas remittances and work with the Ministry of Foreign Affairs to comply with policies related to remittances to attract money from overseas Vietnamese. 

Vietnam Finance 2016 to highlight IT in insurance industry

Vietnam Finance 2016, to take place in Ha Noi on Friday, will be a forum in which senior leaders and policy makers discuss solutions and experiences in the insurance sector.

Further, participants will review how to speed up information technology for the use of management, as well as methods to assure a sustainable and stable insurance market.

Vietnam Finance is held annually by the Finance Ministry to link and update IT solutions for the finance sector. The event is expected to attract more than 500 participants and create a promising platform for them to interact with potential customers and partners.

Besides the forum, Vietnam Finance Exhibition 2016 will gather leading insurance information technology solution providers, who will display advanced products and services and demonstrate new technologies.

According to the organising committee, in recent years the Vietnamese insurance market has been thriving, while growing rapidly to meet the rising insurance needs of society and contributing to reducing the burden on State coffers, and stabilising production and business activities of businesses and people through insurance compensation.

The Insurance Supervisory Authority reports that in the first six months of this year, total premiums paid to the insurance market reached VND38.6 trillion (US$1.7 billion), up 25.9 per cent over the same period last year. This is the highest growth rate in the last 10 years. Notably, insurance companies have mobilised long-term capital for the State budget, with more than VND175 trillion to reinvest in the economy.

According to the Authority, IT applications for insurance companies are not inconsistent. Foreign insurers have been applying IT in their business performance and corporate governance. In Viet Nam, however, IT systems used by domestic insurers have generally failed to meet international standards.

The period from 2016 to 2020 is considered the key stage to completing the objectives of the development strategy for Viet Nam's insurance market.

Under the development strategy, IT applications are considered one of the basic solutions for the development of local insurance markets. Accordingly, IT application systems will meet the goal of building a common database for local insurance markets, which are capable of developing, expanding and providing accurately information for authorised companies to manage and supervise insurance businesses. 

Ha Nam seeks Japanese investment in support industry

The northern province of Ha Nam called on Japanese enterprises to invest in its support industry during a conference in Japan’s Osaka city on October 11. 

The conference attracted nearly 40 Japanese firms which are spare parts providers for Japanese Daikin air conditioner maker. 

At the event, representatives from the Vietnamese Consulate General in Osaka provided updates on the socio-economic situation as well as preferential policies and incentives for foreign investors in Vietnam. 

The country’s strategies and plans for the development of industry in general and the support industry in particular were also introduced along with business opportunities in various fields, especially support industry. 

Meanwhile, Pham Sy Loi, Chairman of the Ha Nam People’s Council, introduced the local investment environment and industrial parks as well as the preferential policies that the province is giving to Japanese investors, especially those in support industry. 

He pledged that Ha Nam will create the best favourable conditions for foreign and Japanese investors in policy, infrastructure and human resources. 

Tsugio Takemura, an adviser of the Japan External Trade Organisation (JETRO), shared his assessment on Vietnam’s investment environment and hailed the Vietnamese Government and localities for their resolve to expand cooperation with Japan. 

Representatives from Daikin and Fuji Groups, both of which are operating in Vietnam, held that the support industry is a promising cooperation area of Vietnam and Japan as well as a priority in Japanese firms’ investment strategies. 

The firms also underscored the opportunities in Vietnam, especially in the context of the formation of the ASEAN Community and the country’s joining of regional agreements, including the Trans-Pacific Partnership and the Regional Comprehensive Economic Cooperation. 

They also praised Vietnam’s efforts in adjusting and supplementing laws and regulations to create a more favourable and transparent environment for foreign investors in general and those from Japan in particular. 

They expressed hope that the Vietnamese Government continue backing Japanese investors, especially in administrative procedure for investment licence granting, tax and customs.

FTA expands trade cooperation opportunities for Vietnam, Russia

Vietnamese and Russian businesses discussed cooperation opportunities at a forum held in Russia on October 12 after the free trade agreement (FTA) between Vietnam and the Eurasia Economic Union (EAEU) took effect on October 5, 2016.

The event was held by the Vietnam Trade Promotion Agency (Vietrade) under the Ministry of Industry and Trade, the Vietnamese Embassy in Russia, the Vietnam Business Association in Russia , and the Hanoi-Moscow Complex.

Minister-Counselor Lai Ngoc Doan from the Vietnamese Embassy said the FTA opened up a new chapter in trade cooperation between the two countries.

Vietrade deputy head Bui Thi Thanh An said the FTA will bring opportunities for Vietnam and Russia to increase two-way trade to 10 billion USD by 2020.

The forum also allows businesses to seek partners and investment opportunities, she said, suggesting the two sides take more measures to accelerate joint projects while encouraging businesses to invest in the respective markets.

Vladimir Vovchenko, a representative from Russia’s Ministry of Economic Development, said both nations agreed on several measures to boost bilateral trade at the 19 th session of the Vietnam-Russia Intergovernmental Committee for Economic-Commercial and Scientific-Technological Cooperation held in St. Petersburg in September.

With the FTA, the bilateral trade target of 10 billion USD by 2020 is feasible, he said, adding that the most important thing for businesses is to understand the potential and advantages of the respective countries to create effective investment strategies.

Participants also talked about import-export opportunities, preferential policies of the two governments, and ways to maximise the benefits of the FTA, as well as chances to develop industry in the two sides’ localities.

Resources must be used more efficiently: experts

The next phase of the Vietnamese economy’s restructuring should focus on efficiency of resource allocation to renovate the growth model, experts said at a conference in Hà Nội yesterday.

Việt Nam has underwent the toughest five-year restructuring period since it embarked on the Đổi Mới (Reform) process three decades ago, with overhauls of public investment, banking and State-owned enterprises (SOEs). However, the results were below expectation as with rising public debts, high bad debts and uncompetitive businesses, said Trần Đình Thiên, Director of the Việt Nam Institute of Economics.

“Little improvement is seen in the renovation of the growth model,” Thiên said, adding that 30 years was enough for the Republic of Korea to become a developed industrialised nation while Việt Nam only become a low-middle income country despite huge economic growth from 1990-2015, second only to China’s globally.

“The problem lies in resource allocation which has proved inefficient,” Thiên said.

He said that resources had been poured into inefficient SOEs and labour-intensive and capital-consumed industries, which undermined national competitiveness and discouraged the private sector.

“As Việt Nam is entering the next phase of restructuring, the country needs to find a thorough and radical way to renovate the growth model towards efficiency.”

“Economic restructuring should now shift to the efficiency of resource allocation from the goal of simply raising resources.”

According to Nguyễn Đình Cung, Director of the Central Institute for Economic Management, Việt Nam was close to the limit of raising resources. “The important issue now is not how to raise resources but how to use resources with efficiency,” Cung said.

Breakthroughs in mechanisms and in the restructuring of the financial sector are critical to economic overhaul, experts said, urging bad debts to be tackled.

Cung also said that a committee specialised in economic restructuring should be established.

The difference of 2016-20 restructuring to the previous periods was that Việt Nam was rapidly integrating globally with several free trade deals with demanding requirements.

“Take advantage of the integration process,” Cung said. Although this remained tough, this was a must for the Vietnamese economy to avoid being left behind, he said.

According to Thiên, restructuring processes often made economies more fragile to outside influences, so Việt Nam should pay attention to the Chinese economy.

The project of restructuring the economy in 2016-20 period was proposed to the National Assembly for consideration. 

Local firms still face growth barriers

Local enterprises face barriers in doing business, and they expect the State to improve the domestic business environment in order to encourage the development of enterprises.

Experts said this at a dialogue on abolishing barriers in doing business on the occasion of Business' Day – October 13 held by BizLIVE online magazine on Tuesday.

At the dialogue, Doan Duy Khuong, deputy chairman of the Viet Nam Chamber of Commerce and Industry (VCCI), said over the last few years, Viet Nam had achieved a high growth rate in gross domestic product (GDP) across the region and the world, but now, growth had began trending downwards.

VCCI has combined with the ASEAN Business Council and Lee Kuan Yew School of Public Policy to rank the competitiveness of countries in the region. The result was not optimistic for Viet Nam, Khuong said, as the financial environment and infrastructure in Viet Nam were weaker than in many other ASEAN countries.

Vo Tri Thanh, former deputy director of the Central Institute of Economic Management (CIEM), said Viet Nam's economy had had many achievements and even more challenges.

In recent years, Viet Nam had undertaken administrative reform, especially in regard to enterprises, to become more transparent and friendly, he said. However, the high transaction cost was one of the reasons that local enterprises could not become larger, because the cost involved would affect the revenue of the enterprises.

Lawyer Truong Thanh Duc, chairman of the Basico Law Company, said there were three factors causing difficulties for local enterprises. They are barriers in doing business, technical standards and administrative procedures. For instance, the Ministry of Industry and Trade should be an agency to actively support the businesses, but the regulations of the ministry have created a lot of barriers, such as those on gas and land. These regulations had prevented small-sized enterprises from entering the market, Duc said.

Huong Vu, Deputy General Director of Ernst & Young Viet Nam, said that existing policies were not consistent with reality. Viet Nam has been undergoing a process of international integration, and many multinational companies have come to the country, but accounting books must still be printed on paper. For a company that performs 20,000-30,000 internal transactions a day, it is impossible for them to store all transactions for a year.

The company had proposed sending soft copies of accounting books to the tax office but the office had not accepted this change, she said.

Meanwhile, Pham Thanh Hung, deputy chairman of Cengroup, said enterprises had often been worried about violating existing regulations and circulars due to their complexity. Therefore, Phi Ngoc Trinh, deputy general director of Ho Guom Garment Joint Stock Company, said local enterprises expected Resolution 35 to solve these difficulties and create a more favourable business environment.

Huong Vu said the Government should reform tax collection activities, if not Resolution 35 would be difficult to implement.

Khuong said the State's relevant offices and the local business community had been compiling the Law on Small and Medium Sized Enterprises to reduce barriers on production and business activities, and give more support to small and medium sized enterprises in their future development.

New rules to help securities market grow

The local securities market is expected to further expand in the last months of the year after two trading regulations are put into practice in November.

On November 1, Circular No 115/2016/TT-BTC of the Ministry of Finance on guidance for the initial sale of shares, and the management and use of proceeds from the equitisation of 100 per cent State-owned enterprises transforming into joint stock companies takes effect.

The circular, which will replace Circular No 196/2011/TT-BTC issued in 2011, stipulates share auctions on the stock exchanges will be automatically traded on the Unlisted Public Companies Market (UPCoM) within 20 days of the auction date.

This regulation is forecast to be a "big bang" for the equitisation process of State-owned enterprises as listing on an exchange will now be an obligation rather than being dependent on the willingness of the companies involved.

The new circular specifies that the stock exchange that hosts the auction must send notice of the average sale price and information of winning bidders to the Viet Nam Securities Depository Centre (VSD) and the Ha Noi Stock Exchange (HNX) within five days from the payment due date (the auction date).

Within 10 days from the due date of the sale, the equitised enterprise must report to the State Securities Commission (SSC) and make public the auction results. The SSC will send confirmation of the auction results to the equitised enterprise, HNX and VSD within the next three days.

Within seven working days from receipt of the notification of the SSC, HNX will put the shares up for trading on the UPCoM. The reference price for the first trading day is the average sales price in the auction.

For derivative products, the Ha Noi exchange is completing a regulatory system, including transaction process, member regulation and related working procedures to implement the derivative market. These new regulations are projected to be issued in the next two months.

In November, the exchange will announce the design and specific regulations for the first two initial products, including future contracts based on stock indices and Government bonds.

The exchange will test the trading system with securities companies between November and December 2016. Brokerage companies can apply to become a member on the derivatives market in December.

Nguyen Thanh Long, chairman of the Ha Noi Stock Exchange, said the exchange was now focusing on the development of a derivatives market and price-making mechanisms to boost market liquidity.

The VN-Index on the HCM Stock Exchange has climbed nearly 18 per cent since the beginning of this year, while the HNX-Index on the Ha Noi exchange has increased just 7 per cent. 

AI hotshot takes on Asia-Pacific through Vietnam

Wizeline, a US-based leader in artificial intelligence business applications, has chosen Vietnam as the target of its first international expansion since opening in 2014.

The move is admittedly the first step to aggressively taking the company’s products and services to the Asia-Pacific region.

According to Businesswire.com, on October 12, Wizeline officially opened its office in Ho Chi Minh City. The office will focus on delivering machine learning and artificial intelligence solutions, in addition to full-stack design and engineering services, to a growing number of Wizeline customers in the Asia-Pacific.

"We selected Vietnam because of its stable economy and political system, and most importantly because the country has phenomenal tech talent. Our team in Vietnam will be focused on building sophisticated AI-driven (artificial intelligence-driven) applications and help our customers in the Asia-Pacific get their products to the market faster," said co-founder and CEO Bismarck Lepe.

“Vietnam is an emerging market and the entrepreneur scene is only beginning to flourish. We were a part of Guadalajara's start-up scene when it started a few years ago, and now we want to participate in and contribute to Ho Chi Minh City’s environment while it’s on the rise,” said Lepe.

Wizeline, a leading provider of intelligent product management software and expert development services, recently added new enterprise solutions for artificial intelligence, social media chatbots and machine learning.

Wizeline’s long-time customers include the fastest-growing software companies, as well as many of the world’s most established brands, counting News Australia, Yahoo!, National Rugby League, Tatts Group, and others.

Broward College targets bigger slice of Vietnamese higher education

Broward College, one of the top ten community colleges in the US, is looking to increase its presence on the Vietnamese higher education sector.

The institute’s intentions were revealed at its 10th Eurasia conference held in Ho Chi Minh City, which was organised with the aim of connecting the institutional network of Broward College with other partners.

David D. Moore, dean of international education at Broward College, told VIR, “Over the past decade, Vietnam has climbed from the 30th to the 8th place in terms of the number of Vietnamese students in the US. Thus, various US universities are looking to up their Vietnamese enrolment, including California State University Monterey Bay, State University of New York at Albany, Florida International University, St. Thomas University, and Wayne State University.”

He further noted that the most exciting demand for higher education in Southeast Asia is in Vietnam, making this a great time for Broward College to bring American education to young Vietnamese students.

Set up in 2011, Broward College Vietnam has over 400 Vietnamese graduates to date. The school’s curriculum is accredited by the Southern Association of Colleges and Schools (SASC), one of the six regional accreditation organisations recognized by the US Department of Education and the Council for Higher Education Accreditation.

Under the 2+2 model, students will spend two years completing Broward undergraduate programmes in Vietnam. After these first two years, students are equipped with advanced English, job skills as well as the widely-recognised Broward Associate Degree to enter the international workforce. They can either choose to transfer abroad to the US, Australia or Canada to finish their Bachelor’s degree as a third year student.

Hoang Anh Tuan Kiet, chancellor at Broward College Vietnam, commented that the programme has been maturing rapidly. The school is looking to secure governmental approval to extend this programme to four years, so that Vietnamese students can save cost as well as get exposure to the US learning environment while still in Vietnam.

“Students who enrolled at Broward College Vietnam also automatically enrolled at Broward College in Florida. They will have official student IDs, transcripts, online resources, and degrees issued by Broward College. The school also holds summer camps and international exchange programmes to facilitate students’ access to dynamic international education,” he added.

Filing procedures for intellectual property rights need simplifying

According to the National Office of Intellectual Property, the number of patent applications in Vietnam averages 300 a year, and only one fifth of applications are granted patents.

Many inventors say one of the main reasons they are reluctant to file for intellectual property rights is the complexity of administrative procedures, especially those related to writing patent descriptions.

This process is judged as extremely complicated and has forced many inventors to apply over and over again before they could finalise their applications.

Another obstacle is high filing fees, at about VND2-3 million (US$90-135) for a brand and VND20-30 million (US$900-1,350) for a patent.

Moreover, with a long waiting time averaging two to three years, many enterprises would miss their business opportunities and face unfair competition during that time.

Even though their rights are protected under the law, many companies still have to struggle with fake goods so swamping the market that it is nearly impossible for the competent authorities to deal with them.

The heaviest fine is only VND500 million (US$22,500), while profits from making fake goods can amount to billions of Vietnamese dong; for that reason, many accept being fined if they are found violating intellectual property rights.

The capacity of law enforcement agencies in Vietnam remains weak and they are rather confused about what to do in practice.

Many are aware that their rights are being infringed upon, but they do not want to pursue costly and time-consuming litigation.

As a result, even when a case of intellectual property infringement is uncovered, competent agencies lack a basis on which to deal with them, which means such infringement continues to be rampant.

That is the main reason individuals and enterprises are not very keen on protecting their intellectual property rights.

Such a reality requires the competent agencies to create a legal framework in keeping with reality to facilitate applications for intellectual property rights.

A mechanism is needed to support inventors financially and in writing descriptions for their patents, while it is also necessary to amend the law on intellectual property and related legislation to strengthen sanctions against infringement and make it easier for patent-holders to pursue legal action.

Another measure is spreading knowledge on intellectual property so that scientists and inventors can look up information and avoid patents that have already been registered.

Only when these measures are taken can applications for and the protection of intellectual property rights be promoted, and only then will enterprises and scientists be able to protect themselves once the Trans-Pacific Partnership, to which Vietnam is a member, comes into effect.

Fruit exports soar in Jan-Aug

The Vietnam Fruits and Vegetables Association (Vinafruit) said the country obtained fruit export revenue of US$1.14 billion in January-August.

In particular, dragon ranked first with US$568 million of export revenue, equivalent to 50% of the total export value, followed by lychee with US$103 million (9.1%), and watermelon with approximately US$95 million.

The nation’s area under dragon fruit cultivation has expanded to nearly 37,000 hectares, according to the Ministry of Agriculture and Rural Development.

The association forecast this growth trend would continue in the rest of the year, owing to high consumption of fruits and vegetables.

Statistics by the General Department of Customs showed that Vietnam’s fruits and vegetables import value rose 36.9% year-on-year to US$529 million in January-August, according to vneconomy.vn.

The country imported US$108.4 million worth of fruits and vegetables in August alone, up 55.1% compared to July.

Thailand is the biggest supplier of fruits and vegetables to Vietnam with US$218.8 million, up 62.4% year-on-year, followed by China with US$125.2 million (up 27.5%) and the U.S. with approximately US$50 million (up 13.2%).

Thailand and China accounted for two-thirds of Vietnam’s imports, equivalent to US$344 million.

Vietnam Print Pack Foodtech 2016 opens

The 16th Vietnam International Printing, Packaging and Food Processing Industry Exhibition (Vietnam Print Pack Foodtech) opens on October 12 at the Saigon Exhibition & Convention Center (SECC) in HCMC.

The four-day event features nearly 440 booths of 250 exhibitors from 10 countries and territories such as Vietnam, Singapore, Japan, South Korea, Thailand, India, Indonesia, Hong Kong, Taiwan and China. It serves as an efficient sourcing platform for local manufacturers and exporters in the fields, given the wide-ranging presence of exhibits like machinery equipment, parts and components, materials and supplements. 

Some industry watchers said the packaging sector has reported strong growth in Vietnam thanks to domestic consumption and exports. The industry also offers many business opportunities as Vietnam has signed multiple free trade agreements.

According to the Vietnam Printing Association (VPA), the packaging and labeling sector has posted annual growth of around 10% thanks to high demands of processing firms and exporters. Meanwhile, the Vietnam Packaging Association has predicted annual growth of 15-20% in the coming years given expanding production.

However, VPA chairman Nguyen Van Dong said the production capacity of Vietnamese packaging firms has yet to meet demands of local and foreign markets. “Growth of 10% is appealing to foreign investors. The sector is expected to see stronger foreign direct investment or more M&A activity,” he said.

To obtain more growth, domestic firms should invest in advanced technologies and adopt appropriate strategies. International exhibitions provide them with quick access to modern equipment and technologies of the world, Dong added.

At the Vietnam Print Pack Foodtech 2016, renowned companies such as Trung My A, My Lan, Uchida (Japan), Toan An, Chung Y, CKC, Innopack Vietnam and Nguyen Quang Huy will introduce their latest products and technologies, including printing machinery and accessories, inks, printing materials, cutting disks, scorers, packaging machinery, raw materials and auxiliaries, dosing, coding and marking systems, baking equipment and machinery, food processing technology and machinery, and hotel and kitchen equipment.

The show is jointly organized by Vietnam National Trade Fair & Advertising Company (VINEXAD), Chan Chao International Co. Ltd., Paper Communication Exhibition Service Co. and Yorkers Trade & Marketing Service Co. Ltd., and endorsed by relevant government agencies and industry associations.

Free pick-up service is available for guest delegations.

BIDV to hold extraordinary general meeting

Bank for Investment and Development of Vietnam (BIDV) will organize an extraordinary general meeting at Grand Plaza hotel in Hanoi on October 22.

The bank said earlier that the general meeting is to be held to seek shareholder approval for a number of its business plans.

Meanwhile, shareholders and stock traders are waiting for information about a staff reshuffle plan after BIDV chairman Tran Bac Ha retired in early September.

Tran Anh Tuan, a board member of BIDV, has been named to replace Ha to head the board. 

The bank on Monday inaugurated Bac Ha branch in Hanoi after Hanoi City’s Department of Planning and Investment had awarded a business registration certificate to the branch on October 4.

Expert says Govt should allow farmers to make their own decisions

The Government has set up an agricultural restructuring scheme aimed at raising product value and incomes for farmers, but it should reduce intervention in the program to obtain better results, said an economic expert at a seminar on October 11.

Speaking to the press on the sidelines of a seminar of rice sector restructuring in Can Tho City on October 11, veteran economist Pham Chi Lan said that the Government has added a new idea to the restructuring scheme, stressing the need to use less input materials such as water, soil, plant protection chemicals and labor while raising productivity and product quality. However, to realize this target, the Government should reduce its role in the program.

Guidance is necessary but if the Government gives too specific guidelines, it will become unreasonable intervention in activities of businesses and farmers, Lan said.

For instance, the Government should not tell farmers to raise which plant or animal but help farmers understand market conditions to make their own decisions.

Lan said that the Government must reduce intervention in the agriculture sector via State-owned enterprises since many such firms are more concerned about their own interests instead of farmers’.

She petitioned the Government to develop a favorable business environment and good policies to support farmers and businesses. The Government should adopt appropriate policies to attract scientists in the agricultural restructuring process.   

She said local customers lost confidence in the quality of Vietnamese farm produce. Therefore, the Government has to strengthen its role in setting standards and ensuring consumption to help farmers.   

Lan said the Government should take measures to enhance cooperation among farmers, businesses, scientists and the State to boost agricultural restructuring.

She explained farmers must be trained and get information about things such as market conditions and climate change that affect the rice sector in particular and the agriculture and food sectors in general. 

Nguyen Trung Kien, head of the commodity markets division at the Institute of Policy and Strategy for Agricultural and Rural Development (IPSARD), told the seminar that perception about rice sector restructuring should be changed. Rice farming is not only to ensure food security but also to increase incomes and improve nutrition so rice processing and trade must get due attention.

Kien said the Government approach to the rice sector should be based on market rules. The State should take advantages of the nation’s international integration to support this sector.

Vietnam facing budget trouble

The State budget is in trouble due to high debt repayment obligations and a heavy demand for spending in the context of revenue decline.

Debt repayments in the first nine months of this year amounted to VND117.2 trillion, or 75.6% of the estimate, says the Ministry of Finance in a statement sent to the media on October 11.

Meanwhile, government debt had totaled over VND176.8 trillion as of September 25 (including some VND140.18 trillion owed to creditors at home and VND36.64 trillion to those overseas), the ministry adds.

Thus, repayment obligations are greater than the sum already repaid in the first nine months.

The recurrent expenditure in this period is put at VND609.3 trillion, equivalent to 73.9% of the year’s estimate, says the statement.

Regarding spending for development and investment, disbursements for investment projects by the end of September had reached VND137.4 trillion, or 54.5% of the estimate (versus 64.8% in the same period last year). The volume of funds from government bonds disbursed had met 38.8% of the plan while the figure in the year-ago period was 52.3%.

Thus, the total expenditures in the first three quarters were VND870.5 trillion, or 68.4% of the target for the whole year.

In this period, the total net revenue for the State budget was VND718.3 trillion, accomplishing 70.8% of the year’s estimate versus 74.9% in the same period in 2015.

The Ministry of Finance admits certain sources of revenue have fallen short of expectations (less than 75% of the plan), such as charges and fees (65.1%) and other revenues (63.8%). Notably, revenues from the corporate sector reached only 57.4% of the estimate, 96.7% of the year-ago figure, mainly because of the drop in oil and gas prices and the troubled operations of companies in this industry, leading to their tax payments dropping.

Revenues from crude oil in January-September amounted to VND29.8 trillion, meeting 55% of the estimate, a decline of 42% against the same period last year.

The State budget in the first nine months recorded a deficit of VND152.2 trillion, or 59.9% of the year’s objective.

Regarding the mobilization of foreign funds, 31 loan agreements worth a total of about US$4.88 billion were signed in the first three quarters.

With respect to disbursements, US$2.5 billion, or some VND55.18 trillion, 56% of the plan, had been paid out as of late September.

Meanwhile, GDP is expected to grow 6.3-6.5% only this year, lower than the 6.7% target set out by the National Assembly. This will leave a great impact on budget deficit and public debt that is approaching the threshold of 65% of GDP.

Jan-Sept investment pledged for IPs, EPZs in HCMC dives

Foreign direct investment (FDI) and domestic fund flow into industrial parks (IPs) and export processing zones (EPZs) in HCMC fell by a sharp 53.95% year-on-year in the January-September period, the HCMC Export Processing and Industrial Zones Authority (Hepza) announced at a meeting on October 11.

Fresh and additional investment registered for IPs and EPZs in the city stayed low at US$355 million during the period, equal to 50.68% of the year’s target, Hepza told the news briefing to announce the business results of IPs and EPZs.

Of the sum, pledged FDI capital dropped 67.4% against the same period last year to US$167 million.

In the nine-month period, management boards at IPs and EPZs issued investment certificates to only 14 fresh FDI projects with a combined registered capital of less than US$50 million, a significant decrease of 89% over last year, while 23 operational FDI firms raised their investment by more than US$120 million, a rise by 33.88%.

Hepza said it has seen no sign of upswing for FDI investment in the final months of the year.

The city also saw a decrease in domestic investment poured into IPs and EPZs in January-September, with an equivalent sum of over US$187 million registered, down 26.9% year-on-year.

A combined 50.12 hectares of land in IPs and EPZs were leased to both domestic and FDI enterprises during the period, a decline by 57.71%, while nearly 40 hectares of ready-built workshop were hired, reducing 25.52%.

According to Hepza, however, investment of both domestic and foreign enterprises in the past nine months has been channeled into prioritized sectors of the city, such as electronics, which drew 76.29% of total investment, foodstuff with 5.73%, textile and garment 4.05%, mechanics 2.02%, and plastic and rubber 1.26%.

Despite a fall in investment attraction, enterprises in the city’s IPs and EPZs recorded positive business results in January-September when fetching US$4.32 billion of export revenue, up 6.76% over the same period last year and meeting 70% of target.

By end-September, there were 1,413 valid projects worth a total US$9.32 billion at IPs and EPZs in the city, including 564 FDI projects with registered capital of US$5.47 billion and 849 domestic projects equivalent to US$3.83 billion.

Of the volume, 1,160 projects are operating, 19 projects are under construction, 121 projects are still on the plan, while 23 projects have expired, 63 projects have been suspended, 19 are temporarily halted and 32 are working on procedures for dissolving.

Vietnamese rubber growers plan sell-offs as prices crash

The crisis has delievered a major blow to not only small tappers but even some of the big plantation owners.

Plummeting rubber prices are not only making it hard for smallholder farmers to eke out a living but also push a number of big agricultural businesses out of the business.

Steady declines in prices and production activities have forced many to stop tapping, abandon their plantations, or switch to other cash crops.

A plantation owner, who grows rubber trees in the southern province of Binh Phuoc and in Cambodia, told VnExpress that he has sharply scaled down rubber areas in his agricultural-land portfolio by more than 1,000 hectares.

Despite his willingness to sell his rubber estate at a significant loss, it is difficult to find buyers.

He said prospective buyers prefer strategically located rubber plantations which have access to major roads and are close to waterways.

Potential investors also prefer mature plantations with moderate yields. They can either continue the farming business or acquire the estate as a long-term investment as rubber trees can be felled down for the hardwood timber, he added.

Rubber prices have hit the lowest level since 2009 as significant stockpiles and falling demand in China constantly dragged the rates down.

According to the state-owned giant Vietnam Rubber Group, rubber has become one of the most vulnerable commodities. It said producers have not been able to control their output in recent years.

Prices have dropped to as low as VND26 million (US$1,164) per ton while it costs VND25 million to collect and process the latex, it said.

The group, which also invests in a wide range of sectors including electricity, livestock and hotels, has downsized production by clearing rubber trees on a 3,000 hectare area.

Rubber production only accounted for 4% of the group’s total profit in the first six months, the group said in its financial statement.

Experts forecast rubber prices could fall further in the final months of the year since stocks remain high while the total production by a group of 11 countries that produces around 92% of the world’s natural rubber edged up as of July 31.

Ministries told to revise cement industry strategy

Deputy Prime Minister Trinh Dinh Dung has told the ministries of industry-trade and construction to work with relevant ministries and agencies to review and revise the zoning plan for mineral mining for cement production and the cement industry development strategy to meet actual demand.

There remain many outdated points in the zoning plan for exploration and exploitation of minerals used to make cement until 2020 as approved by the Prime Minister in Decision 1065/QD-TTg in 2010.

The Ministry of Construction was quoted by the Vietnam News Agency as saying that there have been additions to the zoning plan but recent geological surveys of mines showed many changes. Therefore, the revision of the zoning plan is necessary.

The cement industry development strategy has well met demand since 2011, according to the construction ministry. On top of that, the Government has approved removing 14 cement projects with a daily capacity of less than 2,500 tons of clinker each, equivalent to 910,000 tons of cement a year from the strategy.

The construction ministry is working on the cement industry development strategy for the 2017-2035 period with a vision towards 2025 and a revised zoning plan for mineral mining for cement production to replace the current ones.

The new zoning plan and development strategy for the cement sector must match the country’s socio-economic performance, and the market conditions as ordered by the Government. The ministry will propose policy incentives, demand stimulus and market stabilization policies and the addition of viable projects for the Government to consider and approve.

The construction ministry will collaborate with provinces and cities to look into the investment and exploitation of minerals for cement production, supply and demand for linker and cement as well as using heat at cement plants for electricity generation. 
More than 70 operational cement production lines can produce a total of up to 82 million tons a year but consumption is about 10 million tons lower than supply.

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