The Ministry of Construction said it sets to equitise the nine remaining State-owned enterprises (SOEs) in 2015 in line with its established restructuring roadmap.

To accelerate the process, all the SOEs under the ministry are making every effort to implement their approved restructuring plans, focusing on equitisation and divestment from non-core investment projects.

The ministry has equitised six of the 15 SOEs thus far. In 2014 alone, the four firms, namely Hanoi Construction Corporation, Bach Dang Construction Corporation, Viglacera and Viwaseen, were equitised.

The remaining nine SOEs have divested nearly 2.4 trillion VND (112.8 million USD) from 54 required categories, fulfilling 47.1 percent of the set target.

Over the last two years, construction businesses have worked towards restructuring despite economic difficulties, while still ensuring stable jobs and incomes for their employees.

Along with restructuring efforts, the sector’s firms have also rolled out measures to proactively address potential future obstacles, as well as stabilise and promote their production and business activities.

EVN commits to meeting increased demand in 2015

The electric sector has sets a goal of producing 141.8 billion kWh of commercial electricity in 2015, or up 10.4 percent against last year, in order to meet demand which is expected to rise rapidly this year.

At a conference for implementing the 2015 plan in Hanoi on January 13, the Electricity of Vietnam (EVN) Group said the national power system has a total capacity of 34,000 MW with a standby capacity of 30 percent, with most plants in the northern and central regions.

One of the biggest challenges facing the sector, however, is to reduce electricity losses by at least 8.6 percent in line with the Government’s Decision 854.

According to Duong Quang Thanh, EVN deputy general director, the group is preparing a project on improving the effectiveness and productivity in production and business for the period of 2016-2020, to be submitted to the Prime Minister for approval by the end of the third quarter this year.

Under the project, electricity generation and purchase will be strictly supervised to minimise the costs besides striving to overfulfil goals in conserving electricity.

Along with meeting the demand for electricity and seeking new customers, Thanh said, the group will strictly control the calculation of electricity prices to make sure that the price levels will be applied to right users with right purposes.

The cost of investment and bidding process will be under strict scrutiny to make sure the bidding is fair and projects go according to schedule, he said.

The EVN plans to put the Vung Ang 1 and Mong Duong 2 thermoelectric plants into operation in 2015, while purchasing around 1.8 billion kWh of electricity from China and maintaining electricity sale to Cambodia.

Addressing at the meeting, Minister of Industry and Trade Vu Huy Hoang said that with the GDP growth goal of 6.2 percent in 2015, the electric sector needs to grow by at least 13 percent.

Hoang asked the EVN to ensure sufficient power supply, particularly for the South and operate safely hydroelectric plants as well as ensure the construction speed and quality of new electric projects.

Last year, the EVN expanded its power network to 99.59 percent of all communes nationwide, bringing electricity to 98.22 percent of rural households, already surpassing the goal set by the 11th National Party Congress for 2015 by 0.22 percentage points.

Coal sector urged to ensure sufficient domestic supply

The Vietnam National Coal and Mineral Industries Holding Corporation (Vinacomin) should focus on increasing production to ensure sufficient domestic coal supply and reduce the risks of an energy shortage.

Speaking at the January 13 conference on implementing the 2015 tasks, Deputy Prime Minister Hoang Trung Hai said coal exploration and exploitation should work in tandem with development in other local economic sectors, such as the environment and tourism.

The Deputy PM requested Vinacomin apply advanced technology to increase productivity and efficiency, evaluate coal in reserves in the Red River Delta, while developing projects on aluminium, titanium, and other rare earth minerals.

The sector set a consumption plan of 38 million tonnes of coal, including three million tonnes for export, and an output of at least 8.6 billion kWh in 2015, said Vinacomin General Director Dang Thanh Hai.

The group expanded its production from the outset of this year to meet domestic demand while seeking coal resources for import to fuel power projects and meet domestic demand.

The group also aims to commence operations in two more subordinate factories, the Nhan Co-Dak Nong Alumin Factory and the Cao Bang cast iron and steel production Complex in the second half this year. It also focuses on increasing copper, ferrochrome, zinc, and tin production capacity, among others.

Vietsovpetro targets 5.1 million tonnes of crude oil in 2015

The Vietnam-Russia Oil and Gas Joint Venture (Vietsovpetro) has set a production plan of exploit 5.1 billion tonnes of crude oil in 2015, grossing a total revenue of 3.9 billion USD.

To realise this target, Vietsovpetro will work to drastically curtail costs by limiting the leasing of ships, helicopters and oilrigs and increasing their organisation capacity, said Tu Thanh Nghia, General Director of Vietsovpetro.

The venture will push up the installation of underground cable and transformer stations providing electricity to further reduce costs.

In addition, it will enhance scientific and technological application and encourage technical innovations to improve the efficiency of production activities.

Last year, Vietsovpetro extracted 5.36 million tonnes of crude oil, far exceeding its annual target of 260,000 tonnes and generating 4.34 billion USD in revenue.-

Hanoi aims for 5 percent industrial growth in 2015

Hanoi will work towards industry sector recovery in 2015 with 5 percent growth, stated Vice Director of the municipal Department for Industry and Trade Tran Thi Phuong Lan.

Value added to the sector in 2014 is projected to rise about 8.4 percent, Lan said at a conference to launch the 2015 sector strategy on January 13.

The city plans to enact measures to eliminate industry barriers and enhance production efficiency, while encouraging the support, high technology, and agricultural industries.

Meanwhile, Hanoi will continue to implement a number of effective projects and programmes, including regular meetings with businesses ease their difficulties, development of support industry products in the city for 2011-15 period and support for production of key industrial and high technology products, said Lan.

State management of the industry sector will be increased with the aim of boosting craft industry and trade villages with high added value and enhancing efficiency of industrial clusters to attract more investment, she added.

She also called for businesses to remain proactive in producing and selling their products, cutting costs, applying advanced technology and increasing productivity wherever possible.

Last year, Hanoi ’s industry rose 4.6 percent, below the country average growth rate of 7.6 percent and Ho Chi Minh City ’s 7 percent. However, the sector still recorded added value growth of 8 percent, reaching 107.775 trillion VND and higher than the average national growth at 7.15 percent and Ho Chi Minh City ’s 7.1 percent.-

Ministry of Transport, Bechtel to cooperate on Ca Mau port

Transport Minister Dinh La Thang on January 12 met with the project management team from US based Bechtel Corporation discussing cooperation on the Hon Khoai coal port project in the southernmost province of Ca Mau.

At the meeting, Mark Argar, a project manager of US based Bechtel Group said the port and logistics centre plays a vital role in the national economy.

It is the nation's blood stream to support both export and import, create jobs for workers and is the gateway port to put into service for the coal industry, this factor is very important. This port is located at a strategic level and regional countries.

He also said that his group has a signed a contract with Van Phong company to implement the Hon Khoai port project and it wants to jointly participate in research and feasibility analysis.

For his part, Minister Thang welcomed collaboration from Bechtel and pledged to create the best possible conditions for the ventures success. Within the scope of responsibility of the Ministry of Transport, we will strive to support and facilitate the best possible conditions for the company.

Dong Nai Customs plans to contribute VND14.7 trillion (US$700 million) to the State budget this year, about VND1 trillion ($47.62 million) more than the amount last year.

The head of the agency, Huynh Thanh Binh, said that customs officers of the southern province will speed up administrative reforms and intensify supervisions against smuggling and trade fraud to achieve the target.

He added that the agency has collaborated with 12 banks to collect taxes, while all its branches have implemented electronic customs systems, which serve 97 per cent of the enterprises involved in clearance, and that 98 per cent of the value of goods are declared here.

Dong devalued after increase in inter-bank rate

The State Bank of Viet Nam (SBV) officially raised its buying and selling rate for the US dollar to VND21,350 and VND21,600, respectively, this week.

Compared with the previous rate, which had remained unchanged since July 15, 2014, the new rates marked an increase of VND150 for the buying price and VND200 for the selling price.

The move was intended to slow the exchange rate's decline after the inter-bank rate was raised by 1 per cent on January 7, as well as to support export activities.

On January 7, the SBV increased the inter-bank exchange rate from VND21,246 to VND21,458 per US dollar. With an effective exchange rate with a 1 per cent margin, the ceiling rate was VND21,673 per dollar.

After the new rates were introduced, the foreign currency market in Viet Nam stabilised. However, dollar prices kept dropping at local commercial banks on January 13. Vietcombank reduced its buying and selling rates by VND20 per dollar compared to last week's rate, resulting in a buying price of VND21,320 per dollar and a selling price of VND21,380 per dollar.

Buying and selling rates at BIDV were VND21,320 and VND21,380 per dollar respectively, down VND30 and VND60 compared with last week's rate.

Rates at other commercial banks, such as Eximbank, ACB, Vietinbank and Techcombank, also slipped by VND5-20 to stay at VND21,300-21,315 on the buying side and VND21,365-VND21,375 on the selling side.

The SBV's rate was therefore higher than rates offered by the commercial banks, and it was ready to buy and sell US dollars in a bid to stabilise the foreign exchange market in Viet Nam.

Banking sector reform: M&A boom expected

With the Government's determination to hasten the restructuring of the credit institution system, mergers and acquisitions (M&A) in the banking sector were projected to boom in the coming years.

Deputy Governor of the State Bank of Viet Nam (SBV) Nguyen Thi Hong said at Monday's talk with the Viet Nam Television's BizLive that 2015 was expected to witness some six M&A deals to eliminate weak banks, while enhancing the banking system's health and ensuring the economy remains solvent.

Hong said that the handling of weak banks would be mainly based upon domestic resources, adding that the central bank would provide opportunities to commercial banks to resolve their own difficulties.

Voluntary M&A, in line with established regulations, had been encouraged. The central bank also encouraged the participation of foreign banks during the restructuring of weak banks.

In case it is needed, stronger measures, such as compulsory M&A, would be applied, she added.

According to the roadmap for restructuring credit institutions, the number of commercial banks would be reduced from over 30 to some 15 to 17 by the end of 2017.

Meanwhile, Deputy Governor Nguyen Phuoc Thanh was quoted by Vneconomy newspaper as saying that dissolutions and bankruptcies could be tools in handling weak banks, stressing that the rights of depositors would be prioritised in such cases.

Thanh said that the reorganisation of eight of nine banks which needed to be restructured were on the right track, which helped ensure the safety of the State's assets and depositors, while eliminating risks of the system's collapse.

Also, the central bank said that the restructuring of credit institution systems must be associated with the project to resolve bad debts in order to reduce the bad debt ratio to 3 per cent of the total outstanding loans by the end of 2015 – which was the target set by the Government.

Craft export revenue reaches $1.6b

Vietnamese handicrafts' 2014 export value reached US$1.6 billion, up 8 per cent year-over-year, the Agro-forestry Processing and Salt Industry Department under the Ministry of Agriculture and Rural Development said.

The ministry had approved a scheme for handicraft exports for the 2010 to 2015 period, aiming for an export turnover of $1.6 billion by the end of 2015. The sector has achieved the target a year in advance.

Last year, exports of rattan touched $530 million, accounting for 33 per cent of the total exports; the ceramic industry accounted for $480 million, or 30 per cent and the weaving industry reached $270 million or 17 per cent.

The export value of the household and mosaic wood products was pegged at $130 million or 8 per cent and other groups at $190 million or 12 per cent.

The EU, the US and Japan are still key markets for Vietnamese exports. Craft firms are also focused on exploiting new markets in the BRICS group, whose economies are developing rapidly, including Brazil, Russia, India, China and South Africa. These markets are expected to offer great potential for Vietnamese craft exporters.

According to Viet Nam Handicraft Exporting Association (Vietcraft), the full potential of craft villages is still to be tapped. Each year, the global crafts market trades in about $100 billion. However, the Vietnamese market share accounts for only 1.5 per cent.

The association also thinks that the $1.6 billion in export value is too low for the 2,790 craft villages and the millions of employees operating in the sector in Viet Nam.

Do Van Khoi, deputy chairman of Vietcraft, says Viet Nam still lacks investment in technology and design. Many craft producers choose to make low price products instead of high value-added products.

The fact that domestic producers use old designs or copy each other's designs makes internal competitiveness fiercer, leading to a reduction in the global value chain, he explains.

Le Ba Ngoc, chairman cum general secretary of Vietcraft, recommends that craft firms focus on producing medium-priced products, which are appropriate and in keeping with their production capacity, material source and skills, in order to fully exploit their advantages and boost export revenue going forward.

Moreover, firms should also pay attention to high-end products. While developing medium-priced and high-end products, firms need to register trademark protection to protect economic interests of the products exported overseas, Ngoc adds.

Challenges put Dung Quat refinery in urgent of upgrading

The Prime Minister has approved a project to upgrade and broaden Dung Quat oil refinery in the central province of Quang Ngai that is facing with challenges from material shortage and imminent competitiveness from other refinery projects in the central region.

The project will increase Dung Quat’s capacity from 6.5 million tons to 8.5 million tons of petrol a year.

Technologies for light sweet crude oil refining at Dung Quat are estimated to be the most advanced in the Southeast Asia. However the plant is threatened by material shortage after five years of operation as the material source from Bach Ho field has become depleted.

Chairman of Binh Son Refining and Petrochemical Company (BSR) Nguyen Hoai Giang said that Dung Quat is able to process only light sweet crude from Bach Ho field. The company is a subsidiary of the Vietnam National Oil and Gas Group and operator of Dung Quat refinery.

Mr. Giang said that when building the plant, investors had thought about that scenario. However, it was too costly for equipping the plant with facilities to refine heavy sour oil. It is time now to broaden and upgrade the refinery to improve the refinery's competitiveness.

Beside the material shortage the Dung Quat plant is facing with competitiveness from other refineries which have been built or going to break ground such as Nghi Son in Thanh Hoa, Vung Ro in Phu Yen and Nhon Hoi in Binh Dinh Province.

Nghi Son's foundation is nearly built. The plant might come into operation by mid 2017 and supply petrol for the entire northern market.

Meantime US$4 billion and 8 million ton Vung Ro plant which invested with 100 percent foreign capital is expected to break ground in the second quarter this year and to be completed equipment installation by 2018. Once being done, it will control the southern market--the country’s largest petrol consumption area.

BSR has invested in a sulfur recovery unit (SRU) to refine import sour crude oil. Construction progress has exceeded its plan by 2.4 percent to reach nearly 60 percent. The unit’s pilot operation is expected to start in September this year.

2015 is a challenge year for BSR as it has to operate Dung Quat stably and effectively, and gradually upgrade and broaden the refinery, Mr. Giang said.

Chairman of Quang Ngai People’s Committee Le Viet Chu said that upgrading the Dung Quat oil refinery is the province’s first priority. Local authorities would give BSR with maximum assistances in all fields from site clearance to resettlement to speed up the project progress.

The province will establish a steering board to work with the BSR management board on the project, he added.

Remittances to help thaw the residential market

Real estate projects are expected to attract remittances from overseas Vietnamese, as the market revives and conditions become more favourable.

In a recent survey by Vietnam’s Central Institute for Economic Management it is predicted that money from abroad could reach $12 billion in 2014, peaking in January and February due to Lunar New Year celebrations.  Money from the US accounted for 57 per cent of inbound remittances, followed by Australia and Canada. Recently, money flows have also come from Asia where there are a high number of Vietnamese workers, such as Malaysia and Taiwan.

Phan Huy Khang, CEO of Sacombank revealed the bank transferred $2 billion worth of remittances in 2014, up 15 per cent on 2013.

Dong A Money Transfer CEO Tran Van Trung was also upbeat as the company received 10 per cent more remittances in 2014.

State Bank of Vietnam officials attributed the growth to a better macroeconomic environment, including a slow inflation rate and positive economic growth

Banking expert Nguyen Tri Hieu estimated that 30 per cent of Vietnam-bound overseas money would be funnelled into real estate.

Vu Cuong Quyet, CEO of the Northern Green Land Real Estate and Services Joint Stock Company, told VIR, “the end of the year is always the busiest time for house purchasing. Remittances will certainly be a great source for real estate investment, which has long been a favourite long-term investment channel among Vietnamese.”

Representatives from Dong A Money Transfer echoed this view, telling VIR that with decreasing prices for properties, real estate may regain its attractiveness to remittances holders.

Khang explained the surge, “I believe that the new law easing rights for overseas Vietnamese to buy properties in Vietnam is the main reason. If buying procedures become seamless, more remittances will pour into real estate.”

According to the drastically amended Housing Law, starting from July 2015, foreigners and overseas Vietnamese will be allowed to purchase, lease, transfer or sell houses in Vietnam. They can also use these properties as collateral, but they will only have a maximum 50 year ownership.

In its recent report, Grant Thornton Private Equity Investment Vietnam regarded this move as a much needed boost to the Vietnamese real estate market.

Another reason for this growth are falling bank interest rates, coupled with stable exchange rates between the US dollar and Vietnam dong. This has discouraged deposits. Moreover, according to Trung, the domestic stock market was highly volatile in 2014, losing favour with remittance receivers. As a result, they are looking to invest in real estate instead.

Thaco’s engine-making ambition suffers major hiccups

Truong Hai Auto Corporation’s dream for manufacturing auto engines has come to an end – at least temporarily – with Chu Lai Economic Zone Management Authority revoking the investment certificate for its engine manufacturing project.

According to the Chu Lai Economic Zone Management Authority in Quang Nam province, the investment certificate for this project was revoked late last month, despite the fact that the government has recognised this as a key national engineering project.

When contacted by VIR last week, Nguyen Mot, communication manager with Truong Hai Auto Corporation (Thaco Group), confirmed that the investment certificate had indeed been revoked. He said this had come about because Hyundai had decided to end their technology transfer contract with Thaco.

With no investment certificate to move forward with, the group has had to postpone their ambitious plans even though they are keen to increase the localisation rate for Vietnam-made cars.

Currently, the group is co-operating with foreign car-makers to assemble Kia, Mazda, and Peugeot cars at a low rate of localisation. In other words, the group has not yet gained the advanced technology to produce the most important part of a car – the engine.

Back in 2011, Thaco signed a technology transfer contract with Hyundai Motors to manufacture 20,000 engines a year at Euro 2 and Euro 3 emission standards. However, the investment was delayed while the local car-maker awaited the government’s permission to extend the timeframe for selling Euro 2 and Euro 3 engines. According to government regulations, all new car  engines in Vietnam must meet the Euro 4 standard from 2017.

Late in 2012, the government agreed in-principle to allow the Chu Lai-Truong Hai engine manufacturing plant to build and sell 100,000 diesel engines at the lower-standard of Euro 2 and Euro 3 until the end of 2018. However, the delay in construction had given Hyundai Motors cold feet, and the South Korean firm announced that it was ending its contract with Thaco.

“In 2016, we will resume negotiations with Hyundai Motors for a new contract for Euro 4 technology transfer,” said Mot, implying that Thaco Group still expects to receive the know-how and technology from the Korean car-maker.

However, Mot also admitted that he was not sure if Hyundai Motors still wanted to co-operate with Thaco in terms of engine production in Vietnam.

“I don’t know when this investment can be resumed,” said Mot.

Top firms strive to redress skilled worker shortage

Amid the shortage of skills in the Vietnamese workforce, many foreign companies have invested in training courses in the Vietnamese education system to bring about improved workforce quality and productivity.

Late last year, Mitsubishi Heavy Industries (MHI) held a ceremony at the Electric Power University in Hanoi to mark the fourth year of the Japanese company providing instruction in nuclear engineering at this educational institution.

In August 2010, the university established a department specialising in nuclear power generation. This department’s remit is to produce engineers qualified to work at nuclear power plants to be introduced in Vietnam. Education entails hands-on learning in the operation and maintenance of nuclear power stations. From the outset, MHI has contributed to the development of the department’s basic educational framework, including co-operation in preparing course curricula.

MHI announced that the courses it provides at the university would enable Vietnamese students to master practical expertise directly from engineers with experience in such operations. In addition, MHI is also funding courses on nuclear engineering at the Hanoi University of Science and Technology.

The courses are being  provided on the basis that  MHI is expected to be the second foreign company to build a nuclear power station in Vietnam, as it has presented the ATMEA1 reactor technology to the Vietnamese government. And when the first nuclear engineering students graduate in 2015, MHI believes that the firm will play an active role in the nuclear-related field in Vietnam which is facing severe shortages of well-trained staff to run future nuclear power plants.

Since Vietnam opened its doors to foreign companies, the shortage of skilled workers has been a bottleneck issue. Although the transitions taking place in China – including rising labour costs and the shift towards an economic model that is less reliant on exports – are creating opportunities for Vietnam to capture a greater share of global manufacturing, foreign investors worry that the advantage of low labour costs is undermined by weak output per worker.

Vietnam’s General Statistics Office last month announced that the productivity of a Vietnamese worker is 18 times lower than a Singaporean.

“This productivity challenge, along with slow development of a skilled workforce, could threaten continued growth. One study has reported that curricula are outdated, teachers overstretched and underpaid, and graduates lack the job-ready skills sought by multinationals,” said Gaurav Gupta, chairman of the American Chamber of Commerce in Vietnam.

But while the nation’s education system is slowly developing, the involvement of foreign companies, like MHI, are very supportive in tackling the issue of skills shortage in the workforce. Alongside MHI a number of other companies are investing in the up-skilling of  Vietnamese workers.

Intel Products Vietnam, which currently operates Intel’s largest chipset manufacturing factory in Ho Chi Minh City, co-operated with the United States Agency for International Development and the Arizona State University’s Ira A in 2010 to found a higher engineering education alliance programme – better known by HEEAP.

HEEAP  has attracted many other sponsors including Vietnam’s Ministry of Education and Training, Ho Chi Minh’s Hi-Tech Park, Siemens, Danaher, Cadence, National Instruments and Pearson with an aim of building ready-to-work students and providing high quality human resources with local training for hi-tech industries in Vietnam.

As recently as June 2014, 24 engineering lecturers from the five HEEAP Vietnamese partner universities travelled to the Arizona State University to take part in a HEEAP Faculty Development Training. The group spent six weeks learning about engineering curriculum design, student success, and active learning techniques. During their training, the cohort learned valuable lessons that will not only benefit their own classes, but also serve to transform education at their institutions.

Bosch Vietnam in 2013 also cooperated with LILAMA 2 Technical & Technology College in setting up an apprenticeship programme to provide Technical Industrial Apprenticeships that are in  accordance with German vocational training standards. In this partnership programme, LILAMA 2 will impart theoretical knowledge to the apprentices, who will then undergo practical training at the Bosch automotive pushbelt manufacturing plant in the southern province of Dong Nai. Through the programme, Bosch aims to build up a highly skilled local technical workforce in Vietnam, especially in Dong Nai.

Vo Quang Hue, CEO of Bosch Vietnam, said human resources was the key factor in the business growth of Bosch in Vietnam. “Bosch can only maintain double-digit growth in economically difficult times and increase activities at the software centre in Ho Chi Minh City as well as expand the factory in Dong Nai’s Long Thanh when it has successfully dealt with challenge of workforce quality,” Hue said.

Hanoi expects to attract more foreign direct investment in 2015.

The city’s Department of Planning and Investment has set a target of luring $1.3-$1.5 million in foreign direct investment (FDI) this year, including $450 million for projects in industrial parks and the remaining $900 million for other projects.

In 2014 Hanoi saw 418 FDI projects either licensed or increase their investment capital with the total registered investment capital of nearly $1.4 billion, up 26 per cent compared to 2013 and 7.4 per cent higher than the $1.3 billion target.

Of this, 313 projects were newly licensed with the total registered capital of $651.2 million, up 34 per cent on-year.

By sector, property made up the largest share with 51.3 per cent of total registered capital, followed by the processing and manufacturing sector with 21.3 per cent and then others.

The UK’s Gibraltar was the biggest investor in the city with 46 per cent, followed by Japan with 23.7 per cent, and South Korea with 14.2 per cent.

Some 105 projects in 2014 increased their investment capital to a total $746 million, up 20 per cent on-year.

By sector these followed same trend as new projects with property making up the biggest share at 35.8 per cent followed by processing and manufacturing with 30.7 per cent.

In terms of investors, South Korea led the way with 36 per cent, followed by Singapore with 27 per cent and then Japan and Malaysia.

In 2014 Hanoi saw funds totalling $1.017 billion disbursed, up 17 per cent on-year. Notable projects included Tay Ho Tay with $234 million, Lotte Hotel with $54 million, B.Braun Pharmacy with $40 million, Ogino Vietnam with $50 million, Coca-Cola Vietnam with $170 million and Stanley with $20 million.

In 2014 the city’s FDI sector earned $12.22 billion in revenues, up 16 per cent on-year with export turnover of $5.4 billion, up 9.8 per cent on-year.

It largely exported electronic spare parts and computers, accounting for 48.2 per cent of the city’s total export turnover, while the rate was 33.3 per cent for the state sector and 12.8 per cent for the local private sector.

The FDI sector witnessed total import turnover of $5.17 billion, up 12.1 per cent on-year, representing 21.1 per cent of the city’s total.

The sector contributed $834 million to the state budget, up 4 per cent on-year, accounting for 12.6 per cent of the city’s total budget revenue.

Textile and garment firms expect buoyant growth in 2015

The upcoming signing of a raft of free trade agreements, both bilateral and multilateral, between Vietnam and other nations and organisations is having a positive impact on the performance of the local textile and garment industry.

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 said 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 per cent hike in total export value to $350 million, 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 targets this year are boosting productivity while improving quality to achieve the best possible efficiency,” said NBC deputy general director Nguyen Ngoc Lan.

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 (up 19 per cent 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, South 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, Japan $2.7 billion and South Korea $2 billion.

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 this year, with exports to the US market hopefully surpassing $10 billion.

Kien Giang targets 9 percent growth in shrimp farming

The Mekong Delta province of Kien Giang aims to harvest 56,000 tonnes of shrimp in 2015, a 9 percent increase from 2014, according to the provincial Department of Agriculture and Rural Development.

To achieve the goal, the local aquaculture sector will focus on raising tiger and white-leg shrimp, while providing training on cultivation techniques and disease prevention to farmers.

Additionally, it will also allocate funds for building and upgrading infrastructure, especially saltwater-supply irrigation and power systems, and continue to encourage locals to apply advanced technologies in farming.

Kien Giang plans to enlarge industrial- and semi industrial-oriented aquaculture areas by 3,000 hectares in Long Xuyen Quadrangle in the coming year, while maintaining the existing 66,000 hectares of alternated shrimp and rice farming in U Minh Thuong.

At the same time, the province intends to focus on efforts related to breeding and environmental protection and management.

With over 90,500 hectares dedicated to aquaculture, Kien Giang produced 51,430 tonnes of shrimp in 2014, up 22.52 percent compared to 2013 and equivalent to 98.9 percent of the yearly target.

Indian state hosts workshop on doing business with Vietnam

As many as 60 businesses from the Indian State of Gujarat took part in a workshop themed “Doing business with Vietnam” held by Gurajat EXIM Club in Vadodara city, India, on January 13.

Addressing the event, Vietnamese Ambassador to India Ton Sinh Thanh gave participants an overview of socio-economic situation and business climate in Vietnam.

He also suggested potential fields for business partnership between the two countries, such as textiles, pharmaceutical and chemical products, electronics, machinery, and agricultural products.

Two-way trade between Vietnam and India has expanded by 10-12 percent annually during recent years and reached 6 billion USD in 2014.

The figure will be augmented if the two sides can make full use of the free trade agreement between India and ASEAN as well as preferential credits that the Indian government provides to Vietnam, he added.

For his part, EXIM Club’s President Amitabh Nagori expressed his hope to boost cooperation in trade and investment with Vietnam.

He said a delegation of enterprises from Vadodara city will attend the VietnamExpo slated for April this year in Hanoi to learn about the markets and seek business opportunities.

Representatives from several companies, such as 20 Microns, Rubicon, and Baroda Greases, shared their experience in operating in Vietnam, highlighting a young and self-motivated labour force, growing market and improved infrastructure and administrative procedures as strong points of the country.

However, they pointed to language difference and a lack of business information as difficulties in running a business in Vietnam.

Quang Nam province to boost labour exports

Over 20 businesses gathered at a workshop in Quang Nam province on January 13 to strategise initiatives to boost labour exports.

Apart from assistance from other central ministries and sectors, local authorities should remind employees to follow their commitments as stipulated in the labour contracts and abide by law of the host countries, said Deputy Minister of Labour, War Invalids, and Social Affairs Nguyen Thanh Hoa.

Labour export is a great policy of the country, helping to raise incomes for and sharpen skills of domestic workers.

This has led to positive changes in both the quantity and quality of the national workforce, an essential part of the global integration process, said Vice Chairman of the provincial People’s Committee Le Van Thanh.

Since 2011, Quang Nam has sent 846 workers overseas for employment, including 449 in the Republic of Korea , 227 in Japan and 153 in Malaysia .

Thang Binh and Que Son districts have taken the lead, with 185 and 139 people employed abroad, respectively.

Can Tho targets 12.5 percent increase in industrial production

The Mekong Delta city of Can Tho intends to raise industrial production value to 109.8 trillion VND (5.1 billion USD) in 2015, up 12.5 percent from 2014, thus increasing the proportion of the industry sector in the region’s economic structure to 35.7 percent.

The city will restructure its agro-aquatic product processing industry with the intent to expand the rate of processed products to 22 percent of the industry’s output, from 17 percent in 2014, said Duong Nghia Hiep, Deputy Director of the city’s Department of Industry and Trade (DoIT).

The province also plans to funnel more than 50 trillion VND (2.3 billion USD) into the application of advanced technology in local businesses in an attempt to beef up production in sectors with strong domestic and international demand, such as rice, aquaculture, garments and textiles, footwear, electronics, pharmaceuticals, and consumer goods.

For aquatic product processing and rice export, two of its largest sectors, the city will develop a quality control system in line with international standards to meet increasing high-end international demand.

The city will also work to establish trade connections with regional provinces and Ho Chi Minh City to further expand its wholesale and retail network.

Additionally, Can Tho will devise more incentives and support for private sector and small- and medium-sized enterprises in terms of workers’ skills, transportation, finance, information, and technology, among others.

In 2014, Can Tho enacted numerous measures to address production and operation concerns of local firms while facilitating improved access to financial resources.

The city’s industrial production value alone rose to 97.6 trillion VND (4.6 billion USD) in 2014, up 12 percent from 2013, ranking among the top regional earners in the sector.

In 2014, the Mekong Delta region’s industrial production value reached nearly 185 trillion VND (8.5 billion USD), accounting for 30.6 percent of its overall economy which hit a record 469 trillion VND (21.7 billion USD).

The Delta is comprised of 12 provinces and Can Tho city with a total area of 40,000 square kilometres and a population of 18 million. It is the country’s largest granary and a major aquaculture region.-

Cut fertiliser, animal feed prices: Ministry

The finance ministry has directed the authorities of cities and provinces nationwide to ask enterprises to consider cutting fertiliser and animal feed prices due to a drop in input prices.

The ministry said that since January 1 this year, the value-added tax on fertilisers and animal feed products has been withdrawn.

On the other hand, the ministry has been following the global trend and has found that since the third quarter of 2014, the prices of urea, key ingredients for making animal feed and petroleum products at home and abroad have fallen in the international market. However, its prices have not fallen in the domestic market, said the ministry.

Therefore, to curb inflation and stabilise the macro-economy, the authorities of provinces and cities under the central government will direct the finance departments and relevant state offices to issue official letters, asking firms producing and trading in fertiliser and animal feed products to review their input costs, said the ministry.

Then the enterprises will reduce the prices of these products and list them as per existing regulations.

Meanwhile, the finance departments will guide and inspect the listing of the sale prices under current regulations, said the ministry.

The state offices, including the departments of agriculture and rural development and of industry and trade, have been asked to formulate plans to inspect the quality of the products to limit poor-quality, fake and pirated goods.

Additionally, the people's committees of the provinces and cities should promote the regulations related to the responsibility of organisations, individuals and enterprises involved in the production, business and use of fertilisers and animal feed. They have to improve awareness on implementing price regulations, and fight fake and poor-quality products in the local market.

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