Hopefuls see warming housing market in line to make revival

The housing market has been warming up and has potential for further growth, especially when supportive factors come into full play, according to an expert.

Vo Tri Thanh, deputy head of the Central Institute for Economic Management, told a conference held to discuss investment in the property market on Tuesday that the office and apartment segments were recovering, pointing out almost 8,000 deals were done for apartments in HCM City and Ha Noi in the first quarter.

That led to a 40-odd per cent reduction in inventories from 2014.

As for other factors, the economic recovery has been clearer with 6 per cent growth in the quarter compared to 5.98 per cent in 2014.

"It is anticipated that the (economic growth) rate may exceed the set goal of 6.2 per cent," Thanh said.

Demand was expected to increase as interest had revived among both end-users and investors, he said.

The Government had announced policies enabling overseas Vietnamese and foreigners to buy housing, he said.

Banks had fairly good liquidity, which would promote buying, he said.

Other asset classes like gold and dollars were less attractive with the recovery of the US economy, and bank deposits yielded low returns, causing investors to turn to property, he said.

Policy makers should strike a balance between enabling recovery of the property market and causing a bubble, he said.

"Other segments of the property market like industrial parks and logistics (transportation infrastructure and warehouse) and tourism have great potential for development."

He cited Viet Nam's location in a dynamic region and its deep integration, its growing middle class, and other advantages for its tourism development.

Su Ngoc Khuong, investment head at Savills Vietnam, concurred with Thanh, saying that new policies would kick-start the housing market.

There had been real demand since the third quarter of 2014, and Vietnamese treat houses as saving for the future, he said.

"People are still living in slums in areas like Districts 4, 7, 8 and so I think there is in no oversupply in the three coming years," he said, adding that the challenge was for them to raise money or access credit programmes.

Nguyen Xuan Quang, chairman of Nam Long Investment Company, said despite the slump in the market his company's affordable apartments had been selling well, adding that the issue was whether products suit customers.

Winfield Wong, an expert from HSBC Vietnam, saw the Vietnamese property as being attractive to foreign investors, with many from Korea, Japan, Hong Kong, and the US focusing on infrastructure.

FDI in the first four months was US$3.772 billion, with the property sector attracting $327 million or 8.8 per cent to rank second.

CPI expected to remain unchanged this month

The country's consumer price index (CPI) this month is expected to be stable or slightly increase over the previous month due to balanced demand and supply as well as strengthened price stabilisation.

According to the Ministry of Finance's Price Management Department, in previous years, several factors, including hot weather and high demand, often led to price rise in the month of May.

The department said that the price of rice this month remains stable because of an increase in supply in the world market; however, its demand stays unchanged, and hence, its price continues to decrease both inside and outside the country.

The price of fertilisers will also remain stable as its supply has been abundant.

The price of input material for feeding dropped in the world market thanks to favourable weather conditions in some main cultivation areas.

The price of building material is expected to be stable. However, the retail price of construction steel in the domestic market will be slightly higher.

Milk for babies under two years of age is expected to become slightly cheaper this month.

In the goods basket for CPI calculation, sugar and petroleum prices will be hiked.

The department noted that sugar output in April was lower than the previous month at 200,000 tonnes, while its demand will be higher due to the hot weather.

Quang Binh on look out for investors

The central province of Quang Binh is seeking investments in 34 local tourism projects between 2015 and 2020, at a combined estimated cost of VND20 trillion (US$921.4 million).

The projects, including 12 prepared for Dong Hoi city, are intended to improve infrastructure in the province's tourism sector by 2020.

The projects focus on establishing urban residential areas and building centres for entertainment, restaurants and shopping, in order to meet increasing tourism demands. Several planned projects aim to preserve and develop the local ecosystem.

Highlights on the list are the 300-ha Da Nhay-Ba Trai Resort Complex in Bo Trach District, requiring VND1.5 trillion ($69.1 million) in investment capital, the 200-ha Hai Ninh Golf Course in Quang Ninh District, at a total cost of VND1 trillion ($46 million), and the 500-ha Bao Ninh-Hai Ninh Luxury Resort, with an estimated investment of VND2.5 trillion ($115.2 million).

Quang Binh has created various preferential policies to support investors.

Boasting a long coastline riddled with beaches, historic and spiritual sites and a UNESCO World Heritage Site the Phong Nha-Ke Bang National Park – Quang Binh has many opportunities to develop tourism into one of its economic pillars.

The Phong Nha-Ke Bang National Park, with its world-famous caves, is said to have the potential to become as popular as Ha Long Bay, if it receives adequate investment.

The province has created a number of tours, without overlapping, at cave systems around the province, as well as seaside eco-tourism and spiritual tours to Vung Chua-Dao Yen, General Vo Nguyen Giap's final resting place.

One of the province's weaknesses, however, is its lack of accommodations due to the limited number of hotels and guesthouses.

In 2014, Quang Binh welcomed 2.7 million visitors, up nearly 100 per cent from the previous year, with 60 per cent being international tourists, representing a 26 per cent increase.

Masan Food gets a Cholimex snub

Nearly 70 per cent of Cholimex Food's shareholders voted against seating a representative from Masan Food onto the company's board of directors, Cholimex announced on its website on Tuesday.

After the 2015 general shareholders meeting last month, Chilli sauce manufacturer Cholimex Food Joint Stock Company announced that only 32.91 per cent of the shareholders voted in favor of Masan Foods, while 67.09 per cent voted against allowing a Masan member onto its board.

Last year, Masan Food, a leading food product firm in Viet Nam, announced its intention to purchase a 49 per cent stake in Cholimex Food Joint Stock Company. However, two of Cholimex's largest shareholders declared that they would not sell their shares.

As a result, Masan was only able to purchase 2.66 million shares, or a 32.84 per cent stake in Cholimex Food, which then became one of its associated companies.

While most shareholders did not vote for Masan to take a seat on the Cholimex director board, 100 per cent voted in favour of other plans proposed for future Cholimex business activities, as well as profit distribution, salaries and bonuses for company employees in 2015.

Cholimex Food planned to reach revenues of 1.26 trillion (US$58.3 million) in 2015, an increase of 18.3 per cent over 2014. It also seeks to earn total profits of VND54 billion ($2.5 million), a year-on-year increase of 7.89 per cent over 2014. The company further set a goal of distributing a dividend of 20 per cent to its shareholders.

Established in 1983 in HCM City, Cholimex has total assets of VND408.5 billion ($19.17 million) and is one of the dominant players in the domestic chilli sauce market.

In 2014, Cholimex Food Joint Stock Company reported net revenues of over VND1 trillion ($46.9 million) for 2014, reflecting an increase of 19 per cent from one year ago. It also earned a pre-tax profit of VND50 billion ($2.3 million), indicating a year-on-year jump of 18 per cent, being 7 per cent above its target.

Masan Group is based in HCM City and operates in consumer goods, mineral resources and banking.

As one of the leading food producers, Masan Consumer owns some of the most recognized and trusted consumer brands, such as Chin-Su, Nam Ngu, Tam Thai Tu, Omachi, Kokomi, Vinacafe, Wake Up, Kachi and Vinh Hao.

Before buying stakes from Cholimex Food, Masan attempted to dominate the local food sector by purchasing stakes in beverage companies such as Vinacafe Bien Hoa, Vinh Hao mineral water and Phu Yen Beer.

Most recently, it entered the animal feed and husbandry sectors, seeking to lead and serve the growing $1-billion animal feed sector in Viet Nam.

Shares of Masan were listed at VND80,000 ($3.6) yesterday on the HCM City Stock Exchange. After selling a stake to Masan Food in late 2014, Cholimex left the local stock market since it no longer had 100 shareholders, as required by market rules.

Agricultural products to Saudi Arabia warned for quality, hygiene violations

The Saudi Arabia Embassy in Hanoi has reported that a series of Vietnamese-originated agricultural product and food shipments were returned or given warnings by importers because of quality, hygiene and safety violations.

Many products were contaminated with bacteria and chemicals, and improperly packaged. Certain varieties of rice, black pepper and cashew nuts failed to register information such as colour, length and broken rice percentage and information of the product’s source of origin and quantity in the Arabian language.

Meanwhile, some kinds of noodle and frozen shrimp also broke regulations, such as their net weight was not written in the Arabian language, and contain fat of unknown origin and bacteria.

The Ministry of Industry and Trade has issued several warning to exporters as the Saudi Food and Drug Authority (SFDA) has strictly applied food hygiene, safety and brand name regulations.

A Conformity Assessment Programme has been implemented by Saudi Arabia. All imported products require a Certificate of Conformity to enable them to be cleared through Saudi Customs.

Vietnam shrimp industry has ‘turned the corner’

The demand for Vietnamese shrimp fell sharply in markets around the globe in the three months leading up to April as over production has led to a glut in an already saturated market— causing prices to tumble.

For the first quarter of the year, Vietnam shrimp exports plummeted 28.1% on year to US$798 million with exports to major markets such as the US and Japan falling off by 55.8% and 27.6% respectively.

Shrimp prices in the US market went into a serious free fall, particularly the prices for white-leg shrimp fuelled by an appreciation of the US dollar against the Vietnamese dong making imports less expensive.

Official statistics show that though total worldwide US shrimp imports in January and February jumped 5% in volume they dipped a hefty 11% in value.

From an average price of US$12 kg in the last quarter of 2014, they fell to US$11 kg in January 2015 and dropped further to US$10 kg in February.

Supplies simply far outpaced demand, while imports in 2014 were historically high resulting in a glut of shrimp in the US domestic distribution chain that was already holding large inventories of frozen shrimp.

As of the end of March, Vietnamese shrimp exports to the US declined to US$116.3 million, compared to US$263.3 million for the corresponding period a year earlier.

Peeled frozen shrimp has traditionally accounted for over 50% of the US import market. Vietnam is now the 3rd largest supplier, after Indonesia and India.

Leading market analysts think prices have bottomed out in the market given that US shrimp distributors have worked their way through excess holiday inventories and now predict the US market to rebound and return to normal buying patterns through the remainder of the year.

They also have noted stabilization in Vietnamese, Indonesian, and Indian shrimp prices since the end of April and believe this is a positive sign the industry has begun to bounce back.

One analyst noted that prices from Vietnam have been firming up leading to buyers in the US sensing a bottom in the market— but there still are some uncertainties in the marketplace and buyers like major restaurants and retailers will likely hold off for a few weeks to see what happens.

With deficits starting to appear in US distributor inventories, purchasing has nowhere to go but to start picking up, most likely in May and June, they said.

Vietnam also recently signed a free trade agreement (FTA) with the Republic of Korea, which is expected to be a boon for exports in general and seafood exports in particular to the Korean market and more than double bilateral trade over the next five years.

For shrimp, the FTA provides the RoK will exclude a quota of 10,000 tonnes of product from import duties, which increases to 15,000 tonnes over the next five years.

The agreement with Seoul is among a series of trade deals the Vietnam government has been pursuing as part of its ambition to become a regional manufacturing and agriculture dynamo and attract investment to strengthen its economy.

Vietnam is also expected to sign FTAs soon with Russia, Belarus and Kazakhstan and could conclude talks on an FTA with the European Union in the very near future, which would all positively impact shrimp exports.

At a recent seminar Nguyen Hoai Nam, general secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP) said the best strategy to counter the recent negative developments in the industry is a good offense.

The Vietnam shrimp industry has turned the corner but needs to diversify its customer base and reduce the risk of over dependence on any one or two markets such as the US and Japan if it is to be prosperous and achieve sustainability, Nam stressed.

Transport ministry seeks to sell 35% of state airport operator

The Ministry of Transport has said it plans to allow Vietnam's sole airport manager to offer 35% of shares to private investors, instead of only 25% as previously reported.

Under the ministry's latest plan pending the government's approval, 25% of shares at Airports

Corporation of Vietnam (ACV) will put up for sale at an upcoming initial public offering, news website Dau Tu, a publication of the Ministry of Planning and Investment, reported on Tuesday.

Another 10% of shares will be sold after the IPO, but it's unknown when the additional sale will take place.

At the IPO, which is slated to be held by the end of June, ACV plans to sell up to 77.8 million shares at a minimum of VND11,100 (51 cents) per share.

The ministry estimated that both the sales will generate about $400 million, which will help it fund the construction of Long Thanh Airport in the southern province of Dong Nai, to replace the country's largest airport Tan Son Nhat in Ho Chi Minh City.

The new airport will cost around US$5.6 billion for its first stage of development, set to be completed in 2020.

Around 53% of the  will come from the state budget and official development assistance (ODA) loans.

ACV was valued at nearly VND38 trillion (US$1.75 billion) as of June last year, according to the news report.

Established in 2012, the corporation currently operates 22 airports around the country. It also invests in 10 companies that provide ground services.

The company reported a turnover of more than US$394.56 million last year, a year-on-year increase of 0.86%, and US$57.8 million in pretax profits.

VTrue stamp traces origin of consumer products

Consumers are now able to trace the origin of purchased items through the enclosed VTrue scratch stamp, which contains a 10-digit code for e-verification.

Consumers can enter the code on the website http://xacthuc.chinhphu.vn by sending an SMS to 8137, calling 19006609 toll free or using the Zalo social network platform launched here on Tuesday.

If the system finds any codes have been duplicated, it will alert the consumer that the product is fake.

Firms applying for the VTrue verification system have the option of adding other functions, such as e-warranty, marketing or post-sale services.

Lam Dong, Japan discuss hi-tech agro-development

The authorities of Lam Dong, Central Highlands province, and Japanese Ambassador Hiroshi Fukada discused local hi-tech agricultural development during their working session in Da Lat city on Tuesday.

In a joint project, the provincial People's Committee, Japan International Cooperation Agency, and Viet Nam Academy of Social Sciences will assist Lam Dong in developing multi-sector farming techniques and improving the city's business climate, said Pham S, Vice Chairman of the provincial People's Committee.

It is aimed at establishing an agriculture zone, a post-harvest centre, and a wholesale flower market in Da Lat while modernising vegetable and flower cultivation, marketing and workforce training, as well as increasing studies for mid and long-term development.

Ha Giang firms attend first business-customs dialogue

At the first 2015 customs-business dialogue held in Ha Giang, the northern border province, on Tuesday, local firms discussed several questions and concerns with customs officials.

Since last year, the provincial Customs Department has been streamlining customs bureaucracy in an attempt to stimulate export-import activities, Deputy Head Le Ngoc Hieu said during the dialogue, adding that Ha Giang, which shares a borderline with China, targets US$880 million in annual trade by 2020, representing an average growth of 17 per cent.

It also consulted with the provincial People's Committee matters regarding infrastructure upgrades in border and wholesale markets, especially those in rural areas as well as in the Thanh Thuy, Xin Man, and Pho Bang border economic zones.

Canada to enhance Tra Vinh SME management

Result-based management (RBM) of small and medium enterprises (SME) was the focus of a training course that kicked off on Tuesday in the Cuu Long (Mekong) Delta province of Tra Vinh.

The three-day training course, which is part of the activities of a Canada-funded SME development project, aims to enhance the capability of project management staff in applying the RBM tools.

Ngo Tho Hung from the Asian Institute of Technology in Viet Nam highlighted the application of RBM in international projects and organisations. The project was launched earlier this year with a total investment of $11.7 million, some $11 million of which was sourced from the Canadian Department of Foreign Affairs, Trade and Development.

State capital ownership to be transferred to SCIC

The Prime Minister has instructed that state capital ownership in state-own enterprises (SOEs) should be managed by the State Capital Investment Company (SCIC).

The PM has requested ministries, ministerial bodies and localities to supervise the transfer of capital to the SCIC, ensuring the completion of the process by the end of August.

The SCIC, which was formed under a Government Decision in 2005 as a Government shareholder in SOEs, is responsible for managing and investing State capital in various sectors, including financial services, banking, insurance, energy, manufacturing and telecommunications. Transportation, consumer products and healthcare sectors also fall under its purview.

During the last nine years, the SCIC has successfully sold capital in 746 enterprises, earning 7.202 trillion VND (334.97 million USD), 2.3 times more than the book value.

Its total assets have reached 69 trillion VND (3.2 billion USD), 13 times higher than when it was established. Its equity is estimated to be over 31 trillion VND (1.44 billion USD), nine times more than in 2005.

Red River Delta region promotes supporting industries

Authorised agencies and businesses in the Red River Delta region gathered at a workshop on science and technology to promote supporting industries in the northern city of Hai Phong on May 12.

Co-organised by the Ministry of Science and Technology, the Vietnam Chamber of Commerce and Industry (VCCI) and the Hai Phong Department of Science and Technology, the event opened opportunities for enterprises in the field to seek partners and expand business links.

Participants to the event included authorised promoting agencies, regional departments of science and technology, leading enterprises in the field and over 50 businesses needing supporting products from northern localities.

A showroom displaying supporting products from 15 outstanding enterprises in the provinces of Thai Binh, Bac Ninh, Hai Duong and Quang Ninh, Hai Phong and Hanoi cities was also held at the event.

Deputy Minister Pham Cong Tac said the event aims to map out initiatives for authorised bodies and managers, giving them a clearer understanding of their role and responsibilities to support enterprises in product development.

Delegates at the event also discussed the National Technology Innovation Fund and exchanged information about equipment manufacturing required in the supporting industrial production chain.

Australia to import fresh lychees from Viet Nam

The Australian Department of Agriculture has approved the importation of fresh lychees from Vietnam, reported the Australian press on May 12.

The Australian ABC network said twelve years since it first applied, Vietnam can now export fresh lychees to Australia.

The Department of Agriculture has approved the importation of irradiation treated lychees and will inform Australian importers of the decision.

The announcement comes just in time for Vietnam's 2015 lychee harvest, which will commence in the next few weeks and last until the middle of July.

Consignments of Vietnamese lychees are permitted to be air or sea freighted to Australia and must be inspected on arrival.

The Vietnamese government is hoping this will be the first of many tropical fruit export options, including mangoes and dragon fruits.

Head of Australia's Lychee Growers Association Derek Foley from Electra, Queensland, said he is not worried about Vietnamese imports competing with local fruit.

"We're not against the import of lychees, it won't clash with our season, which is Christmas (time)," Foley was quoted by ABC as saying that "Australian lychee growers would like to see good quality lychees coming into Australia."

Australia's lychee industry is w orth 20 million USD annually; the industry exports irradiated fruit to New Zealand and has recently been granted access to the United States.

Da Nang seeks Japan’s help in urban development

The central city of Da Nang sought urban development experience and assistance from Japan’s Yokohama city during a forum on May 13.

The forum, the second of its kind, is part of a joint project on sustainable development among Da Nang, Japan’s Yokohama city and the Japan International Cooperation Agency (JICA).

According to the Da Nang People’s Committee Deputy Chairman Nguyen Ngoc Tuan, the trilateral collaboration is an opportunity for local authorities to share their experience in building central hubs.

They can also learn from Yokohama’s urban management in terms of development, finance and promoting investments in private-public partnership (PPP) projects, Tuan noted.

At the discussion, a Yokohama representative presented methods to mobilise resources and implement key projects in the city over the past 50 years and how it might be applied to an action plan for Da Nang.

The JICA confirmed its financial and technical support for the Vietnamese locality, which voiced its hope to work with Yokohama to devise a detailed development strategy.

The first forum, held in December 2014, discussed basic issues and some key projects in Da Nang.-

Quang Nam woos textile investment

The central province of Quang Nam is welcoming an investment capital inflow into garment and textile sector.

Seven out of 12 newly licensed projects are from the sector, the Cong Thuong (Industry and Trade) newspaper reported.

The most prominent project was a fiber-weaving-dying and garment complex worth 1.2 trillion VND (55.5 million USD). Developed by the Vietnam National Textile and Garment Group in Que Son district, the complex is slated for completion within two years and expected to earn 2 trillion VND (92.59 million USD) annually.

Other projects include a 30 million USD textile-garment-dyeing factory financed by the Republic of Korea (RoK)-invested Panko Tam Thang company; a Onewoo garment manufacturing plant capitalised at 6 million USD; and a Taiwanese apparel factory valued at 4 million USD in Thuan Yen industrial zone.

Vo Van Hung, head of the provincial Investment Promotion and Enterprises Support Agency, said domestic enterprises and their foreign peers coming from the RoK, China and Taiwan have visited the province to seek relevant investment opportunities.

A dozen investment agreements to develop textile and garment projects were inked between the agency and these foreign investors, Hung said.

According to analysts, the new investment inflow into garment and textile industry is predictable, as Vietnam will potentially reap benefits Vietnam once the Trans-Pacific Partnership Agreement is signed.

Several companies from China, Hong Kong, Taiwan, Japan, the US and the Republic of Korea have poured money in the sector, according to Thoi Bao Tai Chinh (Finance Times) newspaper.

The textile and garment industry in TPP member countries is expected to benefit the most from the trade deal, with products made from domestically sourced materials or imported from TPP member states being exempt from tariff when exported to signatory countries.

Le Tien Truong, Vice Chairman of the Vietnam Textile and Apparel Association, said up to 60 percent of the country's textile and garment exports go to member countries.

Analysts estimate that once Vietnam joins the TPP, the average tax on Vietnamese garments will fall from the current 17 or 18 percent to zero.

Work starts on 100 mln USD telecom equipment factory

The Korean-invested KMW Vina Co Ltd held a ground breaking ceremony for a 100-million USD telecommunications equipment and LED lighting equipment factory in the northern province of Ha Nam on May 13.

Speaking at the event, Deputy Prime Minister Hoang Trung Hai requested KMW Vina coordinate with provincial authorities during construction and operations and prioritise the employment of local labourers.

Secretary of the provincial Party Committee Mai Tien Dung said once completed, the factory will not only meet demand for electrical equipment but also contribute to diversifying the province’s industrial products.

Located at the Dong Van 1 Industrial Park, the factory covers over 30 hectares and expects to produce 220,000 telecommunications and radio engineering devices and 380,0000 pieces of LED lighting equipment each year, creating jobs for 5,000 workers.

The factory is scheduled to go into operation by the end of 2015.

Ha Nam is home to 125 foreign direct investment (FDI) firms from 10 countries and territories. In 2014, the province attracted 35 FDI projects with up to 300 million USD in investment capital.

Foodexpo markets Vietnamese food products, services

The first Vietnam International Food Industry Exhibition (Vietnam Foodexpo 2015) opened in Ho Chi Minh City on May 13, expected to become an effective support channel to advertise Vietnamese products and services.

The expo features around 500 booths of more than 300 companies from 36 Vietnamese localities and 19 other countries and territories.

Themed “At the heart of Asia’s food aspiration”, it popularises trademarks, products, and services related to farm produce, material and processed seafood, and beverages.

Also on display is cutting-edge machinery aiming to improve productivity, quality, and labour safety in the industry.

At the opening ceremony, Deputy Minister of Industry and Trade Do Thang Hai said Vietnam’s food industry holds vast development potential and comprises a considerable proportion of the overall industrial output and gross domestic product.

Vietnam Foodexpo 2015, part of the National Trade Promotion Programme, was organised by the Ministry of Industry and Trade, relevant agencies, and local authorities to assist the sector’s market expansion effort.

Tran Kim Oanh, Director of the ministry’s Industry and Trade Investment Promotion Centre, said the centre’s booth will conduct activities to introduce the local investment climate and encourage foreign companies to join the production and supply chains of Vietnam’s food industry.

An international cooking contest will also be held during Vietnam Foodexpo 2015, which will last until May 16.

Wood processing sector faces market risk: expert

Vietnam, a world wood processing centre, is facing a high market risk as the country’s wood sector remains dependent on imported materials while its export markets are becoming stricter in wood origin and legality, said an expert in the sector.

The growth of wood chip processing and exporting is another threat to the wood processing sector as inputs from both sectors are sourced from Vietnamese wood. Up to 80 percent of domestic input materials are currently used for wood chip processing, according to To Xuan Phuc from the Forest Trends organisation.

However, many wood processors agreed that exporting wood chips brings about modest socio-economic efficiency, he said during a conference in Hanoi on May 13 that focused on the role of imported materials and orientations for the wood chip processing sector.

Meanwhile, wood chip processors at the event argued that the expansion of the wood chip processing has stimulated the planting of forests and improved the livelihoods of millions of households who live on forestry.

Participants at the conference also discussed State policies related to the management and development of forest resources towards reducing dependence on imported materials by limiting exports of wood chips and increasing large tree planting.

Phuc raised his support to the policies, arguing that they help enhance value for exported products and improve incomes of forest planters.

However, he suggested that more support in saplings and capital is needed to encourage farmers to plant big wood trees.

Le Cong Can, Director of Cat Phu Vung Tau Company, held that the policy of planting forests and increasing technology in export products are on the right track and need support.

Nevertheless, wood chip export tax increases will affect forest farmers, he said, adding that new policies should be designed to foster forest planting and productivity.

They also pointed to the need for in-depth research on whether to prioritise the wood processing or wood chip processing sector.

Currently, Vietnamese wood products are available in 120 countries and territories. Last year, the country imported 2 million cubic meters of sawn timber and 1.4 million cubic meters of log timbers from 115 countries and territories.

Total wood imports of the country reached 1.72 billion USD, or 27.5 percent of total exports of wood and wooden products.

The country plans to reduce wood chip exports to 3 million tonnes in 2020, or a drop of 50 percent from 2015.

Canada recommences investigation on OCTG from Vietnam

The Canada Border Service Agency (CBSA) has announced the re-initiation of an anti-dumping investigation into oil country tubular goods (OCTG) imported from Vietnam, according to the Vietnam Competition Authority under the Ministry of Industry and Trade.

Accordingly, the goods to be re-investigated are OCTG classified under the following Harmonized System (HS) numbers 7304.29; 7304.39; 7304.59; 7306.29; 7306.30; 7306.50; and 7306.90.

The CBSA said the secondary investigation is to reinforce the findings of investigation authorities released on April 2.

The CBSA will also be conducting an inquiry pursuant to section 20 of the Special Import Measures Act (SIMA) in respect for the steel industry in Vietnam, including OCTG.

Normal values established during the re-investigation will be effective for related anti-dumping cases in the future, according to the CBSA’s announcement.

It is anticipated the second investigation would be concluded by September 30.

Vietnam issues first electronic certificate to EU-bound seafood exports

The EC Directorate-General for Health and Food Safety (DG SANTE) has received the first electronic certificate for seafood export granted by Vietnam’s National Agro -Forestry- Fisheries Quality Assurance Department (NAFIQAD) via the Trade Control and Expert System (TRACES), announced the NAFIQAD on May 13.

On its official website, TRACES announced that Vietnam has joined the system and suggested European Union (EU) authorities conduct customs procedures to the related Vietnamese seafood batch based on the electronic certificate.

Established in 2003, TRACES is a trans-European web-based network for veterinary health that notifies, certifies and monitors imports, exports and trade in animals and animal products around the world .

Currently, NAFIQAD is piloting the issuance of TRACES certificates with a view of applying the model on wide scale in the time ahead.

Huge opportunities for Vietnam farm produce to penetrate RoK

The farm produce sector is expected to be a major beneficiary from the free trade agreement recently signed between Vietnam and the Republic of Korea (RoK), as heard a workshop held in Ho Chi Minh City on May 13.

Ki Bong Moon, a representative from the ASEAN-Korea Centre (AKC), said the RoK’s imports of farm produce have increased 21 times over the past 14 years, especially vegetable and fruits.

Vietnam now has extensive opportunities to promote exports of its agricultural commodities to the RoK as well as seek investment to develop the domestic food industry, he suggested, saying Korean consumers prefer high-quality and safe products imported from Southeast Asian countries.

Representatives from the RoK’s E Mart Group and Lotte Mart said the companies plan to promote Vietnamese farm produce including vegetables, fruits and seafood to their home market.

Trade between Vietnam and the RoK reached 40 billion USD last year, doubling the figure from 2012. In March 2015, bilateral trade hit 8.6 billion USD or an annual rise of 16 percent, which is forecast to surge thanks to the trade pact.

Though there are huge opportunities for Vietnamese agricultural producers to boost exports to the RoK, experts noted that businesses should proactively update the list of goods allowed to enter the market while thoroughly studying the demand of the target consumers and designing effective marketing strategies.

Vietnamese businesses have also been advised to select goods that are suited to the taste of Korean consumers along with improving the packaging and quality of the products.

The workshop was held by the Trade Promotion Agency under the Ministry of Industry and Trade, the Korea Trade Promotion Corporation and the AKC.

Ships to pay fees for Binh Loi-Ben Suc Port waterway

Big ships will have to pay VND70,000 (US$3.22) per ton per kilometer when cruising on the Saigon River section from Binh Loi Rail Bridge in HCMC to Ben Suc Port in Binh Duong Province after the section has been dredged.

The charge is planned in a draft circular with an aim to help the investor recover the funding for the ongoing project to build a new rail bridge to replace the current Binh Loi Rail Bridge and dredge the 71-kilometer-long river section under the build-operate-transfer (BOT) format.

Under the draft circular, the charge would be applied to vessels of more than 300 DWTs and collected at the ports and piers along the river section by the port authorities.

The port authorities would be allowed to keep 2% of total revenue to cover fee collection costs in accordance with an agreement with the project investor Waterway Projects Management Unit under the Ministry of Transport.

Vessels free from the charge will include those used for military and security purposes and emergencies, and by the customs and traffic management agencies.

The ministry and the investor started work on the project on April 28 this year. The entire project is scheduled for completion within 16 months.

The project costs over VND1.3 trillion (US$60.13 million), including VND172 billion sourced from the investor, VND156.3 billion from HCMC’s budget for site clearance and resettlement facilities for affected households, VND300 billion in interest-free loan from Binh Duong Province’s budget, and the rest from banks.

The new rail bridge will be seven meters above river level and help solve traffic congestion in Binh Loi area as the current 110-year-old bridge is too low for big vessels to pass.

The new bridge is 12 meters from the current bridge and would allow trains to travel at a speed of up to 100 kilometers per hour when it is completed.

VNCA: Export lifeline for cement producers

The Vietnam National Cement Association (VNCA) said growing cement exports have helped domestic cement plants to slash inventories in recent years.

Vietnam turned out around 70.6 million tons of cement last year, 15% higher than a year earlier. Domestic consumption totaled 50.9 million tons while outbound sales reached 21.1 million tons, up 10% and 30% year-on-year respectively.

VNCA credited the strong export growth to the effort of domestic enterprises to boost clinker and cement exports, especially during the months when local demand was low. This helped improve cash flows for cement producers.

Big producers such as Vicem, Nghi Son, Chinfon, Thang Long Vina, Vissai and Thang Long contributed 80% of total cement exports last year. Their major markets were Bangladesh, Singapore, Hong Kong, Malaysia, the Philippines and Indonesia.

Nguyen Quang Cung, chairman of VNCA, told the Daily last week that the supply-and-demand balance would continue in 2015 as demand for construction materials in the country and abroad is forecast to pick up this year.

However, VNCA warned that local cement enterprises will have to cope with fiercer competition at home and abroad.

Cung said Cong Thanh Cement Co. would commission a clinker line with an annual capacity of 3.6 million tons in the north-central province of Thanh Hoa in June. In addition, Dong Lam and Thach My cement factories have run at full capacity this year.

An imbalance between supply and demand might occur if clinker and cement exports decline as Vietnam now faces tough competition from other exporting countries like China, South Korea and Thailand.

VNCA said 74 operational cement production lines have a combined designed capacity of 82 million tons per year.  Total cement consumption is put at 71-73 million tons in 2015, up 4-7% against 2014.

Toyota Vietnam fails to deliver promise after 20 years, asks for more incentives

Japanese carmaker Toyota, which has operated in Vietnam for two decades, began to ask the Vietnamese government for more incentives and support earlier this month, or the firm will consider putting an end to its operations in the country.

The problem is that, according to a senior Vietnamese state official,Toyota has failed to achieve targeted localization rates with the current incentives it has been enjoying before asking for more preferential treatment.

The current localization rate ranges from 20 to 37 percent, depending on what types of vehicles the Japanese carmaker is assembling at its plant in the northern province of Vinh Phuc, Toyota said in a document it sent to a meeting between Japanese and Vietnamese state officials in April to seek further incentives.

The Japanese company requested such incentives as a series of tax breaks and state financial support for locally assembled cars and their manufacturers so that it can increase the localization rate and open new factories in Vietnam.

Without them, the document said, Toyota Vietnam will reduce annual production capacity from the current 40,000 units to just 13,000 units by 2020, and halt all operations completely in the five following years.

Thanh Nien (Young People) newspaper last Thursday quoted Deputy Minister of Industry and Trade Tran Tuan Anh as mentioning Toyota’s demands at a press conference after meeting with Japanese officials in Hanoi, stressing that the automaker has failed to achieve what it pledged when beginning to pour money into Vietnam.

Toyota started investing in Vietnam in 1995.

Though he did not comment directly on the proposal detailed in Toyota’s document as the firm did not send an official document to the ministry, Deputy Minister Anh said the carmaker is a foreign-invested enterprise which joined the national strategic development plan for the Vietnamese automotive industry from the beginning.

In the framework of the firm's investment license, Toyota has enjoyed preferential treatment in many areas including taxation by the government of Vietnam for many years after committing to achieve several development goals when operating in the country, including a 30 percent localization rate after the first 10 years, he said.

News website VnExpress has found out that among the five types of cars Toyota makes in Vietnam, only the Innova line has the localization rate of over 30 percent.

The rate for the remaining four is below 30 percent, the site said.

Toyota has not reached a high rate for local content, and has yet to achieve the objective as set out in the license, Deputy Minister Anh added.

As a foreign automotive business developing in a certain market, Toyota has so far achieved many positive results, including the profits it has earned for the past several years, he added.

In its attempt to ask for more incentives, Toyota wanted a drop in the special consumption tax on vehicles produced domestically.

There will be two scenarios, as proposed by Toyota: a 20 percent discount on the price on which the excise special consumption tax is based, or a reduction from 45 percent to 35 percent.

Toyota also suggested reducing import duties on CKD car components imported from Japan from the current rate of 15-25 percent following World Trade Organization commitments to 0 percent, which is equal to the tax rate for those shipped from ASEAN starting in 2018.

CKD cars are vehicles that are assembled locally, with all of the major parts, components, and technology imported from the country of their origin.

In September last year, the Vietnam Association of Automobile Manufacturers, of which the president of Toyota in Vietnam, Yoshihisa Maruta, is the chairman, began to seek incentives with the proposal for a reduction of about 10 percentage points in the special consumption tax.

But back then the Ministry of Finance said no to the proposition, adding that Vietnam does not have a policy to subsidize car production.

The most noticeable suggestion in Toyota’s latest bid is a request for government subsidies in the form of financial support for locally assembled vehicles equivalent to 50 percent of the price difference between imported cars, or completely built units (CBUs), and CKD cars.

According to calculations by Toyota, CKD cars will be around 20-25 percent more expensive than CBUs in 2018 when import tariffs for cars made within ASEAN are to be fully exempted.

As a result, Toyota recommended that government subsidies should be worth around 10-12.5 percent of the price difference between CKD cars and CBUs.

ASEAN stands for Association of Southeast Asian Nations, including Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Cambodia, Laos, Myanmar, and Vietnam.

The ASEAN bloc aims to establish an EU-style economic community by the end of this year, with tax exemptions for many goods and commodities circulated among the members.

An official of the Department of Heavy Industry under the Ministry of Industry and Trade told Thanh Nien that the number of cars assembled by Toyota in 2014 was 35,000 units.

Given the financial support package Toyota wants, it will be a very big sum of money, and Vietnam does not have supportive policy for such an enterprise, he said.

The subsidy plea also violates the principle of equal treatment in the World Trade Organization, he added.

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