Extra VND40 trillion for Tet cash withdrawals

The State Bank of Vietnam’s HCMC branch has provided more than VND40 trillion (US$1.87 billion) for banks in the city to meet the cash withdrawal demand of local companies and residents during the Lunar New Year holiday (Tet).

Nguyen Hoang Minh, deputy director of the branch, said the huge amount of money is for companies to withdraw for their production plans and wage and bonus payments as well as for the spending needs of individuals during the biggest annual holiday in the country.

Minh told the Daily that liquidity of the HCMC-based banks is ample and that they have prepared contingency plans to respond to a sudden rise in cash withdrawals ahead of Tet, which begins on February 19.

The central bank has told local banks to guarantee sufficient cash supplies for all their automated teller machines (ATMs) in the city, Minh said. However, he suggested enterprises not transfer Tet bonuses to their employees’ banking accounts in the last minute to prevent possible massive withdrawals.

In the past days, workers have queued up in long lines in front of ATMs at export processing zones (EPZs) and industrial parks (IPs) on the city’s outskirts to withdraw cash.

Le Huynh Ha, head of the ATM service department of the HCMC branch of the Bank for Foreign Trade of Vietnam (Vietcombank), said the demand for cash withdrawals in recent days has doubled on normal days and may triple in the days to come. So, people will have to wait long to get cash.

However, Ha said cash withdrawal pressure at ATMs will be lower this year than last year as many companies at IPs and EPZs have stopped operations for the Tet break.

Ha said banks cannot install more ATMs in the city because the number of active machines is enough for the daily demand on normal days as it is expensive to install new machines.

A source from the central bank’s Banking Supervision and Inspection Agency told the Daily that the agency has sent out eight inspection teams to check banks’ management of their ATM operations but have detected no problems so far. But it is tough to check all the 3,700 ATMs throughout the city.

In some cases, the agency is informed of ATMs out of cash but when it dispatches inspectors to these machines, banks have taken one step ahead to refill them with cash already.

Decree 96/2014/ND-CP with effect from last year regulates banks will be fined VND10-15 million if any of their ATMs runs out of cash. But no banks have been fined so far.

OV help sought to boost farm exports

Vietnam needs help from overseas Vietnamese (OV) entrepreneurs to export more rice, fruit and seafood meeting international standards, Minister of Agriculture and Rural Development Cao Duc Phat said.

Speaking at a meeting with OV business people in HCMC on Monday, Phat said the country could produce international-standard agricultural items but had long exported mainly semi-processed products at low prices due to difficulties in finding markets.

Phat said Vietnam’s annual rice output has jumped by one million tons and the volumes of tra fish, thanh long (dragon fruit) and other farm produce have risen in recent years.

“Farmers can increase their yields if they find good markets. So we expect you to help export agricultural products to more markets,” Phat said.

Vietnamese-Canadian Dinh Kim Nguyet said Vietnamese agricultural product exporters would have many opportunities to tap into this North American market and earn more profit if they meet food safety criteria.

Nguyet said a mango and a hand of bananas cost some C$30 and C$40 respectively, which are much higher than in Vietnam.

Vu Thi Mai, a Vietnamese entrepreneur in Russia, said Russian consumers prefer tropical fruit including from Vietnam, but enterprises find it hard to earn profit when selling to Russia due to high transport cost. The main reason is that Vietnamese fruit must be transported by air with an average charge of around US$6 per kilogram.

Mai proposed Vietnam improve post-harvest technology to lengthen the storage of fruit for export to the markets far from Vietnam.

Phat said the ministry is working with Japanese companies for post-harvest technology transfer to keep fruit and vegetables fresh longer.

“We have been aware of post-harvest shortcomings for years and expect that these will be addressed soon,” Phat said.

The minister pledged simple administrative procedures and favorable conditions for investors in the agricultural sector.

More time sought for Uber partners to complete procedures

Uber has requested the Ministry of Transport to give its partners more time to complete procedures for the car-sharing service in Vietnam in accordance with the current regulations.

The company made the request nearly two weeks after the HCMC Department of Transport announced that it would inspect nine partners of Uber in the coming weeks.

Uber explained its transport partners needed time to complete relevant procedures, including registering for the Uber signboard which requires one to three days. Therefore, the company proposed the ministry allow its partners which are completing procedures to continue providing the service.

The contracts signed between Uber drivers and passengers are a must as clarified in the Government’s Decree 86 and the drivers should show the original copies of the contracts or their scanned copies when they are asked by competent agencies. However, Uber said a paper-based contract is unnecessary because it is struck online between the driver and the passenger.

On February 5, HCMC vice chairman Hua Ngoc Thuan told relevant agencies to inspect and fine individuals and companies failing to meet requirements for the car-sharing service in the city.

Inspectors of the HCMC Department of Transport checked Uber taxi drivers from November 28 last year to January 7 this year, and fined 19 cases a total of over VND79 million (US$3,702).

As of January 16, competent agencies had detected 17 more violators and imposed fines of VND91.3 million as they failed to meet criteria for transport license, signboard, contract and GPS device, among others.

Eximbank gets approval for mPOS service

The Vietnam Export Import Commercial Bank (Eximbank) has been allowed by the State Bank of Vietnam to provide mobile points of sale (mPOS) service and issue electronic receipts for customers of this service.

The central bank told Eximbank to follow regulations on payment and backup services for bank cards and meet conditions for the mPOS device under the central bank’s rules on technical and security requirements for card payment devices.

In addition, Eximbank must keep its clients’ personal information confidential and take measures to prevent and deal with risks as per prevailing regulations.

The bank has to clarify rights and responsibilities of the parties concerned in transactions as well as solve customers’ complaints, if any.

Apart from Eximbank, other banks like VietinBank, TPBank and Sacombank have been cleared to provide the mPOS service.

Textile firms face high turnover

Lunar New Year (Tet) celebrations may again prove disruptive to the textile industry as companies have previously found it difficult to get employees back to work after the holiday.

While having no problem securing contracts from customers, some companies couldn't muster enough manpower to deliver.

Some had gone so far as to hold onto part of workers' year bonus to force them to return. Textile industry unions have since put an end to the practice, however, saying that companies must pay workers full year bonus before Tet.

Tet season also brings with it a surge in demand for temporary workers to meet demanding end-of-year orders. The pay for such temporary jobs can be significantly higher, tempting quite a few workers to leave their regular jobs to make quick money.

After Tet is also a time when workers look for new beginnings and better jobs elsewhere. In recent years, competition amongst textile companies to attract and keep more of their labour force has increased.

Director General of the Viet Nam Textile Group, Le Tien Truong, said in 2015 the textile industry will require more than 3 million workers. Without a sound strategy to maintain a low turn-over rate, Vietnamese textile companies will have a hard time finding enough labour to fulfill their contracts.

Companies must pay more attention to establishing labour policies that improve workers' benefits such as better compensation practices, better working environments and supporting a robust social life outside of work, said the Truong.

Bui Thi Thu, deputy general director of the Phong Phu Corporation, a company that had 100 per cent of their workers return after previous Tet holidays, said the company hosted sports and cultural events on a regular basis as part of a strategy to retain its labour force.

Phong Phu Corporation even started a housing project for their workers. Workers can either purchase apartments for a discounted price or may rent one from the company at a reduced rate.

Months before this year's Tet, the Thang Loi Textile Corporation started planning how to transport the company's 1,200 workers to their distant hometowns and back for the holiday.

For workers who chose not to go home for Tet, the company has planned new-year events and activities to keep the holiday spirit.

Garment 10 Corporation, one of the largest textile companies in Viet Nam with more 10,000 workers in the industry, has started looking for new solutions to the industry's poor turn-over rate.

Deputy Director General of Garment 10, Than Duc Viet, said that besides improving workers' income and living conditions, the company is accepting that turnover is inevitable and looking to reduce the required training time for new employees.

Viet said with new training methods, it can take as little at one to three months to produce a skilled textile worker. Such measures were taken, he said, to insulate the company's production capacity from major shifts in the labour market.

State budget suffered deficit in January due to holiday allocation

With expenditures outweighing revenue for the January State budget, the month recorded a deficit of around VND13.3 trillion (US$625 million), reported Vietstock, an onnline financial newspaper.

A Finance Ministry report cited a few reasons for the deficit, one being the ministry's early allocation of funds to keep Government institutions and organisations running through the holiday season.

Additionally, the Government distributed pensions and other benefits for February early so as to arrive with its beneficiaries in time for the Tet (Lunar New Year) holiday.

In January, the State budget raked in VND81.3 trillion ($3.82 billion), up 9.2 per cent over the revenue recorded last January.

Domestic sources of revenue accounted for VND62.1 trillion ($2.87 billion) of the intake, equal to 9.7 per cent of the yearly domestic revenue. The figure was higher than the target of average 8.3 per cent per month set by the Government.

January revenues collected from production and business saw increases from the levels of the same period last year, registering an 18 per cent rise in the State sector; a 7.2 per cent hike in the sector with foreign investment and a 6.8 per cent climb in the non-State industrial and commercial sector.

The unexpected increase in January's revenue has been attributed to a series of positive economic developments seen in late 2014 and early 2015, according to the report.

The fourth quarter of 2014 registered a growth in GDP by 6.96 per cent, and so far 2015 has also shown some promising macroeconomic growth.

Compared to January of last year, the Index of Industrial Production (IIP) rose by 17.5 per cent, and retail and service revenues increased by 13 per cent. Both numbers are testament to reports of a healthy national economy.

Besides the pre-Tet expenditures, the VND94.6 trillion ($4.44 billion) spent in January went primarily to socio-economic development projects, national defence and security, as well as State administration and debt servicing.

JW Marriott wins International Hotel Awards

The JW Marriott Hotel Hanoi is today celebrating after being named, ‘Best Hotel and Best Convention Hotel in Vietnam’ at the International Hotel Awards – the hospitality industry’s most prestigious awards.

The luxurious 5-star accommodation joined other high profile Vietnamese hotels such as the Vinpearl Luxury Hotel Danang, at a glittering ceremony in London to receive the highly acclaimed accolade.

The 2015 UK Hotel Awards, often referred to as the Oscars of hotel awards, aim to recognise excellence in the hotel and hospitality industry worldwide to promote an international standard.

Attaining one of these coveted awards is irrefutable evidence that both the JW Marriott Hotel Hanoi and the Vinpearl Luxury Hotel Danang are capable of competing against exceedingly strong contenders within the highly competitive international hospitality arena.

“These award wins are attributed to the managers and associates of JW Marriott Hotel Hanoi. If there is one area that I am most proud of it is our team, our managers and associates,” said Bob Fabiano, general manager of JW Marriott Hotel Hanoi.

Fabiano added that it is their skill and dedication to our guests and fellow associates that allows JW Marriott Hotel Hanoi to be recognised as a leading preferred hotel in Vietnam and Asia.

Indian enterprises seek investment opportunities in Quang Binh

The Quang Binh People’s Committee and the Indian Association of MCHI CREDAI Navi Mumbai said that they would jointly organise a conference titled “Quang Binh’s great potential and business opportunities for Indian enterprises from Mumbai” next June.

The announcement came after a meeting between the Quang Binh authorities and representatives from MCHI CREDAI Navi Mumbai led by Satish Sablhok. At least 50 enterprises from India are expected to attend the event.

Quang Binh authorities took the occasion to introduce the province’s potential, advantages, mechanisms, and practical preferential and support policies to Indian investors.

The province also recommended high-performing sectors or projects to Indian investors, such as the Bac Bao Ninh urban area; the Bao Ninh eco-tourism park; the Bao Ninh high-end resort; the Quang Ninh hi-tech electronics park; the Hon La 2 industrial park; and the Le Thuy seaport industrial park.

Nguyen Xuan Quang, Standing Vice Chairman of the Quang Binh People’s Committee, said that the province will work to provide favourable conditions to attract investors from India.

Supermarket sales surge as Tet nears

Supermarkets in HCM City report a sharp increase in sales in recent days and expect a further rise a few days ahead of Tet (Lunar New Year), which falls on February 19 this year.

Co.opmart, for instance, said sales was up by three to four times compared to normal days, especially of confectionery, beverages, cosmetics, and dried food.

Demand for priced-stabilised items like rice, sugar, cooking oil, and eggs and discounted products and processed foods is 60% higher than the supermarket had planned for.

It expects sales to rise further from now through the New Year, especially of fresh food such as pork, beef, poultry meat, fruits and vegetables, pork pies, glutinous rice cakes, and pickled vegetables.

Vo Hoang Anh, marketing director of Saigon Co.op, which owns the supermarket, said Co.opmart, Co.opXtra, and Co.opFood stores have stocked large quantities of fruits like watermelon, custard apple, dragon fruit, Hoa Loc mango, and pomelo to meet demand.

The fruits are cheaper than market prices, he said, adding that their quality is also carefully controlled to ensure there are no chemical residues.

Ho Quoc Nguyen, director of public relations at Big C, said the number of shoppers at the French supermarket chain was up three-fold last week.

In the run-up to Tet, especially during weekend and just before the New Year, the number of shoppers would surely increase further, he said, adding that sales this year would be 15% higher than last year.

Three weeks ahead of Tet, gift baskets, confectionery, jams, beers, beverages, household utensils, and decorative items are among the most popular items. In the next few days buyers would focus on fresh items like fruits and vegetables, livestock and poultry meat, and seafood, he said.

The supermarket has abundant stocks of fresh food, fruits, vegetables, and other items, he said.

Yesterday, it began selling unusual fruits for display during Tet – such as square watermelons, gold bar-shaped watermelons, red pineapples, and wine gourd pomelos. Lotte Mart, sales is up 40% now and is expected to rise to 60% in the coming days, according to Tran Pham Phuc Nguyen, marketing director of the Korean-owned supermarket.

Fruits, vegetables, watermelons, mangoes, glutinous rice cakes, fresh flowers, confectionery, and jams are most in demand, it said, adding that Tet gift baskets also sold very well, with over 1,500 baskets snapped up so far.

Nguyen said the prices of goods have not increased for Tet, and the supermarket also has promotions to enable shoppers to save more.

As part of a promotion programme in the run-up to the Lunar New Year, Co.opmart chain is selling watermelons, scallops, Da Lat potatoes, white cabbages, onions, sausages, biscuits, and detergents at VND5,000 to VND30,000 lower than market prices until February 18.

It is also slashing prices by up to 50% on 4,500 products until the last day of this lunar year.

Big C too is offering discounts of 5-45% on more than 2,000 products until February 18.

Besides, shoppers buying goods worth more than VND500,000 (US$23.4) will enter its lucky draw.

Similarity, Lotte Mart is offering attractive discounts on thousands of items until February 18.

To meet the Tet rush, many supermarkets have extended their opening hours as well as increased the number of cashiers to ensure convenience and safety during the country's grandest festival.

Samsung begins evaluating suppliers

Samsung Electronics has started meeting with potential Vietnamese suppliers in the Hanoi and surrounding region and is running through the checklists evaluating their qualifications.

Samsung’s purchasing manager, Jang Hoyoung said the company is currently meeting with roughly 20 suppliers that have returned completed application forms.

Earlier in September 2014, Samsung organised a seminar in Hanoi to meet with potential suppliers Hoyoung said, adding that the company plans to hold another one before June in hopes of negotiating final contracts and jumpstarting manufacturing as soon as practical.

Binh Duong companies report strong performances

Businesses in the Thuan An and Di An townships of the southern province of Binh Duong reported quick recovery following the incidence in May 2014 during a visit by provincial officials on February 11.

Golf club head maker Vision International Co. Ltd, located in the VSIP 1 Industrial Park in Thuan An, earned 40 million USD in revenue last year, its General Director Sir Jimmy told Vice Chairman of the provincial People’s committee Tran Thanh Liem.

He said thanks to assistance from local authorities, the firm was able to resume and expand its operations after disruptions from worker disturbances protesting China’s placement of an oil rig in Vietnamese waters in mid-May of last year.

The Taiwanese company has raised workers’ wages in line with the State’s policy and granted higher Lunar New Year bonus than last year, the executive said.

Meanwhile, the Dong Hung Industrial Joint Stock Company in the Tan Dong Hiep A Industrial Park was also able to rapidly stabilise its activities following protest disruption, General Director Ha Duy Hung reported.

The firm manufactured 10.73 million pairs of footwear in 2014, a 22.1 percent annual increase, and earned over 1.71 trillion VND (80 million USD) in revenue. The company employed 10,000 workers with an average monthly salary of 7.25 million VND (345 USD), a yearly increase of 12 percent, he noted.

Vice Chairman Liem commended the enterprises’ efforts in developing production and improving employees’ livelihood, which has helped boost Binh Duong’s economic growth.

He assured them that local authorities will work to create favourable conditions for their operations.

Binh Duong, which is located in the southern key economic region, attracted the fourth largest FDI amount in 2014 with 19.98 billion USD, following HCM City, Ba Ria-Vung Tau, and Dong Nai, according to the Ministry of Planning and Investment's Foreign Investment Agency.-

Ha Nam’s trade villages busy for Tet

Trade villages in the northern province of Ha Nam are bustling with activity for the upcoming Lunar New Year (Tet) festival.

The most famous of the craft villages numbering hundreds are Dam village and Phu Van flower village in Phu Ly city, and Dai Hoang village in Ly Nhan district.

Dai Hoang is an ancient village in the Hoa Cau commune of Ly Nhan district. It is known for its famous poached dish served in clay pots, which is highly sought-after during Tet.

The braised fish, which has “solid meat but soft bones”, is a village specialty.

According to villagers, the fish must be cooked in earthenware pots from central Nghe An or Thanh Hoa province to make the dish correctly. The juice added to the pot must be made from ground freshwater crab following a recipe passed down through generations.

Specifications are even made about the cooking fire; the wood should be sourced from longan trees to ensure the unique flavour resulting from a half day of simmering.

The key is to mix the ingredients and adjust the fire just right to allow the fish to simmer for 14 to 16 hours. Experienced cooks can tell how much water is left in the pot just by listening to the sound of it boiling and whether it’s salty enough just by smelling it.

The dish has brought fame to the village, becoming very popular across Vietnam. Today, many of the villagers are involved in this trade, selling their product in domestic and international markets.

In last days of the lunar year, people in Dam village in Phu Ly city are feverishly cooking Chung Cake – a typical savoury cake for the Lunar New Year festival – to meet domestic consumption and export during the largest holiday of the year.

Dam is famous for its traditional Chung Cake, made from sticky rice, green beans, and pork. The trade turns the village into a popular destination for connoisseurs.

Hoang Van Hien, a villager, said Dam village’s Chung makers only use Hai Hau sticky rice and high-quality green beans for the cake, which is then boiled in rainwater.

Locals said the village boils cakes every day from the 15th until the 30th day of the last lunar month. Thousands of cakes are brought to the market each day.

As in other craft villages, the famous Phu Van flower village has an exciting atmosphere as Tet nears.

Traders from different localities nationwide are flocking to the village to find flowers for Tet, while locals busy themselves caring for the flowers.

Phu Van is the flower hub for Ha Nam and the neighbouring provinces of Nam Dinh, Ninh Binh, and Thai Binh.

The village is also well-known for its kumquat trees, valued at millions of VND.

Almost all trade villages in Ha Nam have vibrant atmospheres in anticipation of the New Year. The boost in business contributes to generating stable jobs for a large number of local labourers and improving local income.

Ba Ria-Vung Tau pepper cultivation goes green

Trees producing the quintessential pepper spice cultivated in Ba Ria-Vung Tau have improved both in quality and yield, as announced at a workshop held in the southern province on February 11.

The positive result stemmed from a development project focusing on a sustainable pepper supply chain, jointly organised by the provincial Department for Agriculture and Rural Development and the SNV Netherlands Development Organisation and funded by Olam Vietnam Ltd., the leading exporter of agriculture products, including pepper in Vietnam.

The project, implemented from 2013-2015, aims to assist 100 producers to meet the Sustainable Agriculture Standards; to establish direct links between Olam and producers; and to set a solid foundation for future market expansion.

At the workshop, Head of the provincial Rural Development Sub-Division Nguyen Anh Quoc pointed to a number of measures to expand green farming in the future, such as promoting the trademark of local pepper, broadening relevant training courses across the province, and boosting the performance of the provincial pepper association.

According to Quoc, pepper plantations in Ba Ria-Vung Tau currently cover 9,047 hectares, producing 2 tonnes per hectare annually. By 2020, the province targets to limit plantations to 8,300 hectares, but improve yields and bring them up to 2.3 tonnes per hectare annually.

Administrative units from the local agriculture sector warned farmers not to expand their plantations outside officially planned areas, he added.

Ritutapan Neog, Deputy General Manager at Olam International, said the company has made sustainable cultivation methods available for more than 104 farms in the province to date, 98 of which meet criteria to receive the Rainforest Alliance certification designed to generate ecological, social and economic benefits.

According to the SNV, the global market price of pepper has been on the rise over the past few years due to an increase in global demand of the product and a reduction of pepper.

Vietnamese pepper accounts for around 30 percent and 50 percent of the world’s total production and exports, respectively.-

VASEP: seafood exports to RoK expected to soar

There will be a lot of opportunities for Vietnam to export its seafood products to the Republic of Korea once the free trade agreement between the two countries is signed in 2015, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

The agreement stipulates that Vietnam will enjoy numerous preferential treatments, including tariff reductions for agricultural, seafood, apparel, and mechanical engineering products.

This is the first time the RoK has opened its market to “highly sensitive” products, including shrimp, fish, cuttlefish and octopus from overseas.

The RoK is the fifth biggest importer of Vietnamese shrimp, behind the US, Japan, the European Union, and China.

Shrimp exports to the country brought Vietnam 317.8 million USD in 2014, a 41.3 percent increase from 2013.

The RoK has become one of the three top destinations for Vietnamese cuttlefish and octopus with a substantial 26.5 percent growth in 2014, especially with export revenue in the second quarter soaring by 58 percent from the same period in 2013.

Vietnamese enterprises now consider the RoK a stable market for Vietnamese seafood products.

The expanding number of craft villages nationwide has increased environmental pollution, and addressing the issue requires strong communal engagement.

A majority 70% of the country’s craft villages are concentrated in the north, with the highest density in the Red River Delta region which suffers from substantial pollution concerns.

Low environmental knowledge and bad management lie at the root of the issue. Local officials in charge of monitoring pollution are poorly informed, leading to apathy and rampant violations. Although all localities have a loose agenda for sustainable growth in craft villages by 2020, the non-specific and unenforced plans are unlikely to take effect.

Based on research of the pressing issue, the Institute of Human Geography considers mobilizing public involvement and support to be the most promising initiative.

Accordingly, the centre suggests establishing relevant legal frameworks and mobilization mechanisms for human and financial resources from the communities, outlining detailed sustainable models suitable for each village, and intensifying the implementation of green campaigns.

Vietnam is home to nearly 3,000 craft villages, including 240 traditional villages. The market generates jobs for 11 million people.''

HCM City ATMs run out of money

Office workers were unable to withdraw cash from ATMs following payment and Tet bonuses over the weekend.

Nguyen Thi Ngoc, an office worker in HCM City's District 3, said her local ATM had run out of money, so she had to use an ATM in District 10.

She said that ATMs often ran out of money over the weekend when banks were closed, leading to questions about whether banks should be punished for the problem.

Nguyen Dinh Quy, director of Eximbank's Centre for ATM Cards, said that demand for cash had increased after workers received their salaries and bonuses ahead of the Tet holiday.

He said that his bank planned to double the amount of cash available at each ATM from VND900 million ($42,850) to VND1.8 billion ($85,700).

Dang Cong Hoan, director of Techcombank's Centre for Cards and Individual Finance Services, said the bank and its branches would arrange for staff to be available during Tet to help clients with their problems.

In recent years, the Government and the State Bank of Viet Nam have encouraged people to use cards for payments. Commercial banks have also issued promotions and preferential policies for clients who use cards for purchases and services.

According to the Department of Payment under the State Bank of Viet Nam, during the fourth quarter of last year, ATM transactions reached VND311 trillion ($14.8 billion) and POS transactions hit VND41.3 trillion ($1.96 billion), an increase of 6.2 and 17.9 per cent over the previous quarter. However, 80 per cent of ATM transactions were cash withdrawals.

There are now nearly 80 million bank accounts and 16,000 ATMs in the country, but ATMs will be overloaded if just 10 per cent of users withdraw cash at the same time.

Deputy Governor of the State Bank of Viet Nam Dao Minh Tu said that commercial banks would be fined VND10-15 million ($476-714) if their ATMs did not have sufficient funds over the New Year.

However, customers should remain patient as each ATM could only hold a fixed amount of cash, he said.

State economic groups need ‘vitality'

Vietnamese economic groups must develop brands at regional levels and act as a growth driver for the economy, said experts from the Central Institute for Economic Management (CIEM).

They added that restructuring of State-owned enterprises should focus on key economic sectors.

Bui Van Dung, head of the Enterprises' Reform and Development Department, said at a press conference early this week that the development of economic groups must possess a new "vitality".

Dung stressed that market dominance of economic groups must be placed under better control.

The department brought up three scenarios for the development of Vietnamese economic groups, in terms of two growth indicators: average revenue growth rate and average labour growth rate.

In all the three scenarios, the growth rate for average revenue is projected to reach its peak during the 2018 to 2019 period.

Average revenue is forecast to jump 15.79 per cent, 14.23 per cent and 12.68 per cent during 2014 to 2020 period, for the best, medium and worst development scenarios, respectively.

Regarding labour growth, labour cuts will occur during the 2014 to 2016 period, but gradually improve after that.

Dung said the medium scenario would have the greatest feasibility and will apply to both State-owned and private economic groups, given the economy's competitiveness and existing instabilities.

However, there will be differences in the State and private sectors, Dung said, pointing out that the operation of SOEs have remained dominant due to the modest number of private economic groups.

Data showed that total charter capital for the biggest private economic groups is only equivalent to 15.5 per cent of the eight biggest State-owned economic groups.

State-owned economic groups have been revealed to hold dominant shares in many sectors, such as fertiliser production, coal exploitation, electricity generation and insurance.

However, experts said the private sector has better operational efficiency and financial safety.

The return on equity (ROE) for the 20 biggest private economic groups was 8.45 per cent in 2012 and 12.72 per cent in 2013, in comparison with 5.28 and 7.3 per cent for State-owned firms, respectively.

According to Nguyen Dinh Cung, there is little opportunity for State-owned economic groups to develop further if they remain closed to outside capital sources.

Cung added that State-owned economic groups should attract outside stakeholders to lower risks and costs.

Experts added that economic groups and the domestic market, must develop brands of an international standard to boost development

Int'l investments top $1.7b in 2014

Vietnamese businesses invested more than US$1.78 billion abroad last year, according to the Planning and Investment Ministry's Foreign Investment Agency (FIA).

Of this figure, more than $1 billion came from 109 newly-licensed projects, while the remainder came from 22 operating projects, which ramped up their levels of capital, the FIA said, describing Viet Nam's investments abroad last year as a positive development, even as the domestic economy is still encountering several challenges.

During the reviewed period, the investments were focused on 28 countries and territories.

Among them, Tanzania was the leading investment destination for Vietnamese investors, in terms of registered capital and accounted for 34 per cent of Viet Nam's total overseas investment capital. It was followed by Cambodia at 31.1 per cent and Burundi at 16.2 per cent.

With 23 projects, Cambodia had the largest number, accounting for 21 per cent of Viet Nam's total overseas investment projects. Singapore is next with 16 projects or 14.7 per cent, while Laos and the United States ranked third and fourth with 13 projects or 12 per cent and 12 projects or 11 per cent, respectively.

Among the largest projects are two telecommunications network projects, being invested in by Viettel in Tanzania and Burundi, which involve a combined capital of $525.2 million; a An Dong Mia Co's rubber plantation project in Cambodia, capitalised at $80.4 million and three others in Cambodia with capital totalling $190 million.

As of the end of last year, Vietnamese foreign investment topped $19.78 billion and approximately $6 billion or 30.6 per cent of the total capital has been disbursed.

A maximum disbursement capital of $2.9 billion was invested in the oil and gas sector, followed by over $660 million in agriculture, forestry and the fishing industry; $500 million in the hydroelectric sector; $450.6 million in the ICT industry, as well as $230 million in the finance, banking and insurance areas.

The agency has forecast that Vietnamese businesses will invest an additional $1.5 to 2 billion abroad this year.

Seafood exporters expect benefits from FTA

The signing of a free trade agreement (FTA) between Viet Nam and South Korea will help Vietnamese seafood companies export their products to South Korea, according to the Viet Nam Association for Seafood Export and Processing (VASEP).

Under the FTA, South Korea will reduce taxes and offer additional opportunities for industrial and agricultural products exported from Viet Nam including fruits, textile and garment products and mechanical products. South Korea will also import Viet Nam's fishery products including shrimp, fish, squid and octopus.

Vietnamese seafood producers have many advantages due to their experiences in processing and exporting fishery products to Japan as well as South Korea, according to VASEP, which also said that Vietnamese consumers had similar tastes as South Koreans when it came to these products.

In 2015, Viet Nam foresees problems in exporting fishery products to the US and Japan, so the FTA with South Korea is especially critical.

South Korea is now the fourth-largest importer of Vietnamese seafood and consumes the fifth-largest quantity of Vietnamese shrimp after the US, Japan, EU and China. Viet Nam surpassed China to become the top shrimp supplier for South Korea after its shrimp exports to South Korea reached US$317.8 million in 2014, an increase of 41.3 per cent over 2013.

South Korea was also one of the three largest markets for Vietnamese squid and octopus in 2014, with exports increasing 26.5 per cent over the previous year. Viet Nam's squid and octopus exports in 2014 decreased by only 1.3 per cent on the year in January and rose by 3 to 58 per cent in the next 11 months. Notably in the second quarter last year, squid and octopus exports increased by 45 to 58 per cent over the same period in 2013.

South Korea is now a stable market for Viet Nam's fishery sector, especially as its own fishery business is experiencing a short halt, according to the association.

Banks urged to cut interest rates

It is necessary to further cut interest rates on long- and medium-term loans to enable companies to expand and invest in equipment and technology, the HCM City People's Committee has said.

Its vice chairwoman, Nguyen Thi Hong, said at a recent meeting with local bankers that banks' interest rates are always the focus of the corporate sector's attention especially as they made plans to step up investment and modernise technologies and equipment.

According to the HCM City Enterprises Association, the current interest rates on medium- and long-term loans given to most small and medium-sized businesses in the city are 12-14 per cent.

These are much higher than in other countries in the region. For instance, in Thailand now they are only 5-6 per cent.

In HCM City, interest rates for priority sectors are around 7 per cent for short-term loans, 8-10 per cent for medium-term loans and 9.5-11 per cent for long-term loans.

Analysts said that such rates make it very difficult for domestic firms to compete with their overseas peers, whose products have recently flooded the country thanks to the very low import tariffs as part of free trade agreements.

Inflation this year is forecast to be pretty low at just 3-4 per cent, creating favourable conditions for the banking sector to slash interest rates.

On January 27 the State Bank of Viet Nam announced its monetary policy for this year through a directive, instructing lenders to stabilise interest rates and further cut them for medium- and long-term loans by 1-1.5 per cent.

The directive also includes some policies to help the financial market mobilise funds for investment.

Banks should provide businesses credit for development of production and trading.

Economist Le Xuan Nghia said however that it would be difficult for banks to further cut interest rates since huge quantities of government bonds are being issued.

In fact, if the Government issues bonds at this rate, the interest rates would rise again if inflation exceeds 5 per cent, he warned. —

Hyosung Vietnam to expand business

Fibre producer Hyosung Vietnam Limited Company will spend another US$ 600 million to expand its business in the southern province of Dong Nai.

The company's CEO Sun Hyung Yoo told Dong Nai newspaper on Wednesday that in preparation for the expansion, the firm has signed a lease agreement with the Viet Nam Urban and Industrial Zone Development Investment Corporation (IDICO) to rent another 22.6ha in the Nhon Trach 5 industrial zone, increasing the total area of the company's operations to 90.6ha in the province.

Hyosung Vietnam is a subsidiary of the Korean firm Hyosung Corp.

It produces fibres of all kinds, and has been operating in Dong Nai for more than seven years, with a total registered investment of $995 million, according to the province's People's Committee.

The company says that 90 per cent of its products are exported. In 2014, the firm earned more than $1 billion in revenue, and became an important stronghold of the Hyosung Corporation in the South Korea.

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