BUSINESS IN BRIEF 1/6
S Korea-Mekong links grow
Viet Nam has been actively co-operating with countries in Greater Mekong Sub-region (GMS) to develop East-West Economic Corridor, Southern Economic Corridor and others.
Deputy Minister of Foreign Affairs of Viet Nam, Bui Thanh Son made the statement at the second Mekong-South Korea Business Forum held in Ha Noi yesterday.
Son hailed the participation of South Korean businesses in promoting Mekong-South Korea economic cooperation and narrowing the development gap in ASEAN.
He stated that the organisation of the forum has not only been an evidence for Vietnamese government's commitments in Mekong-South Korea co-operation but also will create favourable conditions for the effective growth of businesses.
He affirmed that Viet Nam has highly valued the co-operation of the region in its development and international integration strategy and completing 14 bilateral Free Trade Agreements in the period 2015-20.
Speaking at the forum, Cho Tae-yong, vice foreign minister of Foreign Affairs of the Republic of Korea, announced that GMS has played an important role in South-ASEAN co-operation.
He said that South Korea has been impressed with Viet Nam's GDP growth rate and the unlimited potential of Viet Nam's high crude oil reserve.
He said that the South Korean government expected to strengthen co-operation with GSM countries and support the region in narrowing development gap with other countries in ASEAN.
He added that South Korea had implemented Mekong-South Korea Co-operation Fund last year with the aim of establishing a supporting mechanism for GSM in building transport network and resources.
South Korea has planned to increase the fund and its effectiveness.
Assessing on investment and business environment for enhanced connectivity of value-supply chain in the Mekong Region, Bun-Soon Park, visiting professor at College of Economics, Hongkik University in South Korea, saidd that ASEAN including Viet Nam, Indonesia, Singapore and Malaysia has been an important partner for Korea's investment.
He noted that in comparison with China, where investment was concentrating heavily on manufacturing, investment to ASEAN was more diversified.
"In the Mekong sub-region, the largest recipient country is Viet Nam, where manufacturing is the major industry," he noted, adding that investments to Cambodia and Myanmar have recently increased but the average size per projects in terms of amount was still small.
He pointed out that the investment cooperation between South Korea and most of Mekong sub-region countries was in the early stage.
He noted that the greatest advantage in the region was the abundant and cheap labours. Recently, Thailand, Viet Nam and Cambodia raised the minimum wage very rapidly.
However, he said there was a shortage of skilled workers in all countries in the region.
"Insufficient infrastructure in each country is an important bottleneck to connect Mekong sub-region," he pointed out, urging a better and increasing co-operation for infrastructure connectivity in the regional countries.
In addition, a stable wage increase and encouragement of new business establishment for supporting industry development will also contribute to enhance connectivity of value-supply chain in the sub-region.
Oudet Souvannavong, secretary general GMS-BF, vice president Lao National Chamber of Commerce and Industry, stated that the countries in the region should make the GMS economic corridors the easiest place to do business to accelerate association and integration as well as connection in the region.
"Local government and operators should not look at freight, cargo, shipping and other related services as an opportunity to charge for everything," he noted.
He recommended that government officials especially customs officers should facilitate trade and not police it. Road check points should also be removed or should not be strictly monitored because they were adding up costs and reducing the time of commodity transport. Serious effort has to be made on corruption.
Credit growth hits 1.31%, raises doubts
Credit growth of Viet Nam's banking system reached 1.31 per cent from January to May 23, which is creating doubts about the feasibility of 12-14 per cent credit growth by the year-end.
Head of the State Bank of Viet Nam (SBV) ‘s Monetary Policy Department Nguyen Thi Hong announced at the monthly press meeting on Wednesday that: "This situation is partially due to seasonal factors. Credit demand in the first half of the year is normally low."
Hong stated that as the system had an abundant capital source, coupled with lower borrowing costs, credit demand will surge in the latter part of the year.
"The entire target of credit growth [12-14 per cent] will be probably achieved," she added.
In the first five months, the total supply was an estimated 5.28 per cent higher than the end of last year. Meanwhile, the total mobilised capital increased by 4.2 per cent. In May, borrowing costs were trimmed by 0.5 percentage point while deposit interest rates were lowered by 0.5-1.5 percentage points against 2013. Loans for privileged sectors enjoyed 1 per cent cut interest rate.
Responding to questions about the possibility of a lower interest rate towards the year-end, Hong stated that it should depend on the actual movements of the economy and inflation. If inflation continues its downtrend, lenders may cut additional 0.5 percentage point.
Chief Inspector of the SBV Nguyen Huu Nghia stated that in the first five months, Viet Nam Assets Management Company (VAMC) had bought additional VND6.3 trillion (US$ 298.58 million) that raised the total purchased debts to VND45.63 trillion ($2.16 billion).
Earlier this year, VAMC had planned to buy VND10 trillion ($474 million) in the first quarter. Nghia pointed out that this was because of slow policymaking procedures, allowing VAMC to issue special bonds.
To date, credit institutions have submitted applications to sell over VND30 trillion ($1.42 billion) to VAMC. VAMC is planning to raise the total purchased debts to VND70-100 trillion ($3.32-4.74 billion) by the year end.
HCM City motor exhibition grows with int'l presence
The 10th Saigon International Autotech and Accessories show (Saigon Autotech and Accessories) opened yesterday in HCM City with nearly 300 local and foreign firms taking part.
Products on display include spare parts, accessories, car interiors, oil and lubricants, luxury cars, passenger cars, special vehicles, motorcycles, scooters, mopeds, and assembly and maintenance equipment.
The number of companies in the support industry participating in the show this year is much higher than last year's show, with 120 domestic enterprises and nearly 150 firms coming from other countries and territories like Japan, South Korea, Thailand, Malaysia, Taiwan, India, the US and EU, according to the organisers.
Some famous brands such as Subaru, Vinamotor, VEAM and FAW Giai Phong are present at the four-day show, showcasing many popular and favourite commercial vehicles as well as special and family vehicles.
In addition, visitors will have a chance to enjoy car stunt shows in the 7,000sq.m outdoor space performed by British Guinness holder Russ Swift with breathtaking skill as often seen in Hollywood action movies.
Organised by Asia Trade Fair and Business Promotion Holdings and Taiwan's Chan Chao International Co. Ltd, the exhibition at the Saigon Exhibition and Convention Centre is expected to attract 100,000 visitors.
Statistics show decline in FDI
Some 500 foreign projects with a total registered capital of US$3.67 billion have been licensed so far this year, a 17 per cent decline in investment year-on-year, according to the National Statistics Office.
But Minister for Planning and Investment Bui Quang Vinh said it was not a big concern since in the first five months of 2013 the country had attracted a number of multi-billion dollar projects.
FDI this year would not be very low since investors have been applying for licences for a number of "large" projects, Thoi Bao Kinh Te Viet Nam (Viet Nam Economic Times) newspaper quoted him as saying.
Disbursement by FDI projects this year have amounted to $4.6 billion, a 0.4 per cent year-on-year rise, which indicates confidence in Viet Nam's investment environment and the potential of the country's economy, he said.
He said the confidence was based on the Government's efforts to improve the investment environment through amendments to investment and corporate laws and policies to support foreign firms.
The recent efforts taken by the Government to assist companies affected by the protests against China's placement of its oil rig 981 in Viet Nam's territorial waters also indicate its strong commitment to strengthening the investment environment.
According to the MPI's Foreign Investment Department, exports by foreign companies (including crude oil) in the first five months of 2014 is estimated at $39.45 billion, an increase of 17.1 per cent and accounting for 67 per cent of total exports.
Imports by them cost $32.55 billion, a 11.4 per cent rise and accounting for 57 per cent of the country's total imports.
FIEs' trade surplus during the period was worth $4.46 billion.
The Department said 40 provinces and cities have issued licenses for new FDI projects this year. Binh Duong led with $813.6 million, or almost 15 per cent of the total FDI in the first five months.
HCM City ranked second with $775.6 million and Dong Nai was third with $579.7 million.
The Gioi Di Dong files for public offering
HCM City Exchange on Tuesday announced to receive the document filed for the initial public offerings of the The Gioi Di Dong (Mobile World Investment Corporation; MWI Corp).
Accordingly, MWI Corp will have a charter capital of VND627.23 billion or US$29.8 million and has filed to list more than 62.723 million shares on the southern bourse.
Ban Viet Securities is the consultant for the case.
MWI Corp was founded in March 2004 and has since operated in trading and repairing mobile phones, in digital devices and in e-commerce.
The corporation's website thegioididong.com has been developed into one of the largest and busiest e-commerce websites of Viet Nam.
According to the company's 2013 financial report, MWI Corp had a turnover of more than VND9.498 trillion ($452.2 million) and more than VND258 billion ($12.2 million) in after-tax profit last year.
At the end of last year, the company paid dividends at a ratio of 372 per cent, worth VND432.9 billion ($20.6 million).
MWI Corp targeted to reach a turnover of more than VND13 trillion ($619 million) this year, increasing by 37.1 per cent over last year. The after-tax profit this year was expected at VND435 billion ($20.7 million), up 68.3 per cent.
Thegioididong.com yesterday opened its second mega-store in HCM City.
Established in 2004, thegioididong.com has opened more than 230 supermarkets nationwide.
More Vietnamese products sold at Singapore outlets
Some 40 Vietnamese products, including popular favourites such as coffee, Pho, dragon fruit and seafood, have been featured all FairPrice outlets in Singapore during the Viet Nam Fair.
Co-organised by the NTUC FairPrice and the Viet Nam Embassy, the fair is running at more than 120 FairPrice outlets, including Finest and Xtra stores, from May 29 to June 11.
At the launching ceremony, Chairman of NTUC FairPrice Ng Ser Miang said that Viet Nam is "increasing its significance in the global trade. It is known for its exports of commodities like rice, coffee and cashew just to name a few. NTUC FairPrice increased its selection of Vietnamese products by almost 30 percent from last year to include some 400 Vietnamese products across 40 categories.
According to Singapore's statistics, coffee, tea, seafood and rice remained Vietnam's top-ten exports to Singapore. In the first quarter of this year, Vietnam exported S$753 million worth of products to the City-State, increasing 8.8 percent over the same period last year.
Housing project offers special promotion
The central city's food joint-stock company, Danafood, began construction of its first commercial housing project in the downtown area, with a total investment of VND600 billion (US$28.6 million), on Tuesday.
The project, which covers an area of 4,100 square metres, with two 25-storey building constructions in Hai Chau District, is scheduled for completion by 2016.
The apartments will be sold at VND13.5 million ($640) per square metre for a total of 680 apartments.
"Buyers can gain ownership of an apartment with only VND150 million ($6,700) under the government's VND30 trillion ($1.4 billion) package for low-cost housing," Director of Danafood Pham Tan Cung explained at the ground-breaking ceremony yesterday.
""We offer sales promotion programme for buyers with a retirement pension book, savings books," Cung added.
Vietnamese companies receive global recognition
The World Economic Forum has announced its selection of 20 Global Growth Companies (GGCs) in East Asia which includes five Vietnamese companies.
They are AA Corporation, The Gioi Di Dong, VNG Corporation, Thien Minh Group, and Minh Phu Seafood Corp.
GGCs are fast-growing companies with the clear potential to become global economic leaders, the forum said. They are considered trailblazers, shapers and innovators committed to improving the state of the world.
Potential GGCs are evaluated according to their business model, annual revenue, management team and major influence in their industry.
Some other selected companies are Acleda Bank Plc. (Cambodia); WanaArtha Life (Indonesia); LINE Corporation (Japan); Kakaku.com (Japan); Hearts United Group Co., Ltd. (Japan); Cross Company Inc. (Japan); Tokushinkai Group (Japan).
Rising energy consumption no threat to supply
Although electricity usage has increased more than 11 per cent in the southern region this year, there will not be a power shortage for the rest of the year, the Minister of Industry and Trade, Vu Huy Hoang, has said.
Hoang was quoted as saying in Sai Gon Giai Phong (Liberated Sai Gon) newspaper on Tuesday that the power industry was being well-managed and the country's reserve power capacity was 20 per cent of total demand.
The minister said he was confident that there would be no power shortage this year or the next few years. The demand for power in the Southern region will increase between March and June.
However, some areas in the southern region will face a power shortage in 2017 and 2018 since most of the country's power plants are located in northern and central regions.
The government has also told agencies to devise solutions to deal with any imbalance of power supply, Hoang said.
With an increase in capacity of domestically generated power, electricity purchases from China have gradually fallen.
In recent years, Viet Nam has purchased between four and five billion kWh from China.
Last year, the amount of purchased electricity from the country fell to two billion kWh, the minister told the newspaper.
According to the national strategy of energy security until 2030, Viet Nam's renewable energy will contribute to more than 10 per cent of the country's energy use.
Foreign aquatic regulations explained
Seafood exporters in the Mekong Delta region were brought together at a seminar to be updated on the regulations of foreign markets in 2014, which will help them effectively iron out any difficulties.
Chairman of the Vietnam Fisheries Association Nguyen Viet Thang said the seafood sector has reaped growth in both volume and value over the past two decades. In 2013, it brought home 6.7 billion USD from selling 6 million tonnes abroad. Vietnamese aquatic products are being sold in 150 nations and territories, he noted.
However, he cited more technical and trade barriers, and stricter demands from foreign markets as major challenges that require more special attention from State-run management agencies, seafood businesses and associations.
Apart from weather disadvantages, the industry continues to suffer from the illegal, unreported and unregulated fishing (IUU) standards set by the European Commission and the seafood safety barrier in the Customs Union of Russia, Belarus and Kazastan.
The US ’s anti-dumping taxes on imported Vietnamese tra fish and shrimp, and its new regulations in 2014 Farm Bill, have all posed a number of difficulties for the sector.
Therefore, local breeders and businesses need to be fully aware of these challenges and be able to meet the regulations from foreign importers to make inroads into these markets, Thang said.
The association presented in brief the non-tariff barriers and solutions in the field and highlighted the need to increase added value in the tra fish supply chain. It also called for more technology investment, the strengthening of traditional markets and expansion to new ones.
Mekong Delta works to restructure tra fish sector
Restructuring the tra (pangasius) fish industry in Mekong Delta provinces has been defined as a long-term process that requires regional cooperation, especially close coordination between farmers, businesses and banks.
While Vietnam accounts for a major share on global tra fish export market, with its products being sold to 149 countries and territories, the sector in the region has encountered numerous difficulties over the past three years.
A reduction in breeding area and output, the imbalance between supply and demand and fluctuating market prices have all posed challenges, the Steering Committee for the South-West region reported at a May 29 working session in Can Tho city. Also present at the talks were a delegation from the Central Economics Committee.
The restructuring should, therefore, focus on financial issues and the management capacity of local breeders and businesses.
Deputy Head of the Central Economics Committee, Le Vinh Tan, said the restructuring must improve the quality of products, reinforce trust from customers, and increase benefits for those involved.
It also aims to ensure links between the production and distribution stages as well as between farmers and businesses, Tan said.
In the first four months of this year, the Mekong Delta region harvested 253,000 tonnes of tra fish in a farming area of 2,814 ha.
The provinces of An Giang, Dong Thap and Ben Tre and Can Tho city remain the largest producers, accounting for 85 percent of the total area and output of the whole region.-
Vietnam, RoK set sights on increased trade
Vietnam and the Republic of Korea (RoK) have reiterated their strong will to conclude a free trade agreement later this year and lift two-way trade to 70 billion USD by 2020.
The pledge, part of the 2013 Vietnam – RoK joint statement, was made by Deputy Foreign Minister Ho Xuan Son and his Korean counterpart Cho Tae-yong at the third Vietnam-RoK Strategic Dialogue on Diplomacy, Security and National Defence at deputy ministerial level in Hanoi on May 29.
The ministers said that both nations are expecting mutually beneficial cooperation on almost fronts, particularly trade, investment, tourism and science-technology.
Vietnam sees the RoK as one of its top economic partners, Son said, assuring Cho that with improving business conditions, they will be able to enjoy strong growth.
Cho said the Korean business community lauds the Vietnamese Government for its timely interference in anti-China riots in Binh Duong and Ha Tinh, saying that he has strong faith in the stable investment climate in the country.
On the national defence and security front, both sides vowed to maintain existing dialogue and policy exchange channels, while working more closely in personnel training, defence industry, experience sharing and undertaking United Nations peacekeeping missions.
They also agreed to liaise better at regional and global forums, such as the United Nations, the Asia-Pacific Economic Cooperation, ASEAN+ and the East Asia Summit.
Informed about the recent developments in the East Sea, with China illegal stationing its oil rig Haiyang Shiyou – 981 in Vietnam’s continental shelf and exclusive economic zone, Cho called for the parties concerned to settle the dispute through peaceful means in line with international law, especially the 1982 United Nations Convention on the Law of the Sea and the Declaration on the Conduct of Parties in the East Sea.
In regards to the situation in the Korean Peninsula and inter-Korean relations, Son reaffirmed Vietnam’s consistent policy of backing peace, stability and denuclearisation in the region.
Vietnam is willing to contribute to promoting dialogue for peace and trust building between the RoK and the neighbouring Democratic People’s Republic of Korea. The country wishes for both sides to settle disputes through peaceful dialogue, contributing to peace, stability and cooperation in the region, Son said.
On the occasion, Cho also paid courtesy calls to Deputy Prime Minister and Foreign Minister Pham Binh Minh and Deputy Head of the Party Central Committee’s Commission for External Relations, Nguyen Huy Tang.
Land readjustment deemed effective management tool
Experts of the World Bank and various experienced planners from abroad stated that land readjustment is one of the solutions to help Vietnam improve urban infrastructure and increase the value of its land, during a symposium held in the Mekong Delta city of Can Tho on May 29.
Vietnam has reaped socio-economic achievements accompanied by fast urbanisation during the process of realising reform and international integration policies, said a representative from the Urban Development Agency under the Ministry of Construction.
By last December, the country had reached an urbanisation rate of 33.47 percent with 770 urban areas, the official noted.
The annual contribution made by urban areas is very important to the country’s GDP growth, adding momentum to the national economic development.
Participants agreed that there has not been much investment poured into expanding urban areas in Vietnam because most of the funding comes from the State budget and official development assistance (ODA), adding that the community’s involvement in discussing urban development measures is still low.
Meanwhile, many countries around the world have successfully implemented public-private partnerships (PPP) in urban development, they added.
Foreign experts suggested initiatives to help Vietnam prevent rampant urbanisation in suburban areas and heighten the effectiveness of funds for infrastructure development.
Credit growth hits 1.31 percent in five months
Credit growth of Vietnam's banking system reached 1.31 percent from January to May 23.
"This situation is partially due to seasonal factors. Credit demand in the first half of the year is normally low," Head of the Monetary Policy Department under the State Bank of Vietnam (SBV) Nguyen Thi Hong announced at the monthly press meeting on May.
Hong stated that as the system had an abundant capital source, coupled with lower borrowing costs, credit demand will surge in the latter part of the year.
"The entire target of credit growth [12-14 percent] will be probably achieved," she added.
In the first five months, the total supply was an estimated 5.28 percent higher than the end of last year. Meanwhile, the total mobilised capital increased by 4.2 percent.
In May, borrowing costs were trimmed by 0.5 percentage point while deposit interest rates were lowered by 0.5-1.5 percentage points against 2013. Loans for privileged sectors enjoyed 1 percent cut interest rate.
Responding to questions about the possibility of a lower interest rate towards the year-end, Hong stated that it should depend on the actual movements of the economy and inflation. If inflation continues its downtrend, lenders may cut additional 0.5 percentage point.
Chief Inspector of the SBV Nguyen Huu Nghia stated that in the first five months, Vietnam Assets Management Company (VAMC) had bought additional 6.3 trillion VND (298.58 million USD) that raised the total purchased debts to 45.63 trillion VND (2.16 billion USD).
Earlier this year, VAMC had planned to buy 10 trillion VND (474 million USD) in the first quarter. Nghia pointed out that this was because of slow policymaking procedures, allowing VAMC to issue special bonds.
To date, credit institutions have submitted applications to sell over 30 trillion VND (1.42 billion USD) to VAMC. VAMC is planning to raise the total purchased debts to 70-100 trillion VND (3.32-4.74 billion USD) by the year end.
Dong Nai firms to receive State support
The authorities of southern Dong Nai province will meet owners of businesses which suffered damage from recent disturbances to inform them of the State’s support policies.
According to the provincial Labour Federation, the dialogues will take place at the Nhon Trach, Bien Hoa, Tam Phuoc Industrial Zones and others in Trang Bom and Long Thanh districts between May 30 and June 10.
Through the events, the authorised agencies will study the damage incurred by businesses and listen to their feelings and aspirations while helping grassroots-level trade union organisations understand the importance of improving the quality of the investment environment.
Employees will be made better aware of the need to protect businesses and production facilities in order to maintain the stable and sustainable socio-economic development.
Since spontaneous anti-China parades earlier this month, the federation has organised 16 talks to provide information on the sea and island situation and disseminate the laws for more than 55,000 workers, said its Vice Chairman, Tang Quoc Lap.
To prevent similar social disorder from reoccurring, he said his organisation has worked with business leaders to build a core workforce, including workers with high skills and firm political knowledge. They are expected to greatly contribute to encouraging workers to abide by the policies of the Party and the law of the State.
Workers will be encouraged to promote their national pride by ignoring the plots of hostile forces, allowing Vietnam to firmly safeguard its sea and island sovereignty and territorial integrity.
The disturbances erupted during workers’ rallies in protest of China’s illegal placement of its oil rig Haiyang Shiyou – 981 in Vietnam’s continental shelf and exclusive economic zone from early May.
Some extremists incited others to destroy property of foreign firms as well as of the State, businesses and individuals, and acted against law enforcement officials, disrupting social order and business activities.
Thanks to the government’s timely interference, most affected companies have resumed operations and social order and security has been restored.
Dong Nai authorities have so far commenced legal proceedings against 241 arrestees involved in 22 criminal cases of “causing social disturbance”, “destroying property,” “stealing property,” “openly appropriating property,” and “resisting against on-duty officials”.
Singapore values economic bond with Vietnam: official
Singapore highly values its cooperation with Vietnam, according to Minister in the Singaporean Prime Minister's Office Lim Swee Say, who has revealed that local businesses want to invest in the country and bolster trading with Vietnamese partners.
The minister made the comment at a working session with Deputy Secretary of the Ho Chi Minh City Party Committee, Nguyen Thi Thu Ha, and Vice Chairwoman of the municipal People’s Committee, Nguyen Thi Hong, on May 29.
Lim, who is also Secretary-General of the National Trade Union Congress (NTUC), praised the connection between the Vietnam Embassy in Singapore, the Saigon Union of Trading Co-operative and Singapore’s NTUC FairPrice group to co-organise the first Vietnam Fair at more than 120 supermarkets across the island country from May 29-June 11.
He expressed his hope that the fair will become an annual event introducing new made-in-Vietnam products to Singaporean consumers.
For her part, Ha said the fair is part of the activities to further promote trade ties between the two sides’ businesses, and stressed that the Vietnamese city will facilitate foreign enterprises’ investment and business activities in the locality.
Around 40 Vietnamese products of all kinds, especially coffee, dragon fruit and seafood, will be displayed at NTUC FairPrice’s supermarkets during the fair.
Last year, the number of Vietnamese exports to Singapore rose by 30 percent, with supermarkets selling over 400 groups of goods, including garments, machinery, electronic components and farm produce.
VEPR revises down economic growth forecast
The Vietnam Center for Economic and Policy Research (VEPR) has projected a lower-than-expected economic growth rate this year in its Vietnam Annual Economic Report 2014 released at a conference in Hanoi on May 29.
Two scenarios are envisioned in the report for the country’s economic growth this year. The less optimistic scenario puts economic growth at 4.15% while the other projects it at 4.88%. The forecasts are much lower than the target of 5.8% approved by the National Assembly.
In April, the World Bank and the Asia Development Bank (ADB) also predicted the country’s gross domestic product (GDP) growth at 5.5%-5.6% this year.
Speaking at the conference, VEPR director Nguyen Duc Thanh said the GDP contraction was partially attributable to the ongoing political and economic tensions with China.
Thanh said that VEPR had used models to measure direct adverse impacts from China and other foreign direct investment (FDI) firms to build up the scenarios. However, he declined to announce specific calculation methods given fears over negative impacts.
The General Statistics Office reported that the nation’s GDP in the first quarter of this year increased 4.96% over the same period of 2013. The economy has been on track to recovery.
Thanh explained VEPR had seen signs of economic recovery before tensions with China erupted. “This is not because of our policies,” he said.
Vu Viet Ngoan, chairman of the National Financial Supervisory Commission, cast doubt on those scenarios.
Ngoan said the scenarios had yet to present analysis foundations and he himself was not as pessimistic as VEPR’s economists who took part in the report.
Economist Le Dang Doanh said it was necessary to clarify Vietnam’s resilience against impacts of many shocks and that writers of the report must analyze it.
Danish firms keen on oil and gas sector
At least there Danish companies have shown their keen interest in Vietnam’s oil and gas sector, according to Danish Ambassador to Vietnam John Nielsen.
Nielsen told the Daily Wednesday after a signing ceremony of the Vietnam-Denmark action plan for 2014-2015 that Semco, a provider of oilrig building and maintenance services, was one of the Danish enterprises.
Nielsen said tensions in the East Sea and the recent protests at industrial parks in Ha Tinh and Binh Duong provinces had made Danish investors concerned over instability in this country.
In the middle of this month, workers at some industrial parks in Ha Tinh and Binh Duong took the streets in protest against China’s illegal deployment of a huge oil rig in Vietnam’s exclusive economic zone and continental shelf. But the protests turned violent as some ill-intentioned elements incited protestors to storm foreign-invested factories.
However, the ambassador appreciated the Government’s swift actions to put the situation under control and its strong pledges for tax reduction and damage compensation for the affected enterprises.
Nielsen confirmed the tensions in the East Sea would not leave much impact on Danish firms’ investments in Vietnam.
In addition to oil and gas, and green growth, Danish enterprises will also explore opportunities in apparel, information technology and education in the years to come.
Two-way trade between Denmark and Vietnam grew from nearly US$320 million in 2008 to nearly US$470 million in 2012. Companies from the Nordic country have got involved in 106 projects in Vietnam with total registered capital of more than US$674 million.
Denmark ranks 25th among the 100 countries and territories investing in Vietnam.
Nielsen said Denmark was one of the major ODA donors of Vietnam in the past two decades, with over US$1.3 billion disbursed for climate change projects. However, its grants for Vietnam will almost end in 2015 and relations between the two countries will turn to political and trading areas.
Ministries say no to fuel price spike
The ministries of industry-trade and finance have issued a joint statement ordering local fuel wholesale companies to keep their fuel prices unchanged and allowing them to use the nation’s fuel price stabilization fund to cover their losses.
According to Document 7005/BTC-QLG, the current retail prices of RON 92 petrol, diesel oil 0.05S, kerosene and heavy fuel oil on the domestic market are VND228, VND87, VND52 and VND162 respectively lower than the 30-day average levels set by the Ministry of Finance from April 28 to May 27.
However, after discussion with the Ministry of Industry and Trade, the Ministry of Finance has ordered all local fuel trading enterprises to maintain their exisiting retail prices and in return, they are covered with VND200 for each liter of gasoline from the fuel price stabilization fund.
The enterprises are allowed to get VND160 for each liter of heavy fuel oil instead of VND0 as before and VND60 for diesel oil and VND90 for kerosene, down VND100 and VND80 per liter.
HCM City agencies urged to support foreign investors
HCMC Vice Chairman Le Manh Ha has told relevant departments to streamline licensing procedures for foreign investors and consider lowering land rent at industrial parks to woo more foreign firms to come for business.
Ha told a meeting on measures to attract foreign direct investments (FDI) in HCMC on Wednesday that investors had complained much about the time-consuming licensing procedures and that some investors had had to even wait more than one year for an investment certificate while the regulations cap the approval time at 30-45 working days.
In some cases, investors are required to complete additional administrative procedures in the fields of environment, construction and labor.
The HCMC Department of Planning and Investment attributed delays in investment licensing to slow responses and comments from relevant ministries and departments. Some agencies provide vague responses or even avoid responsibilities by asking investors to consult other departments, thus lengthening the time of issuing an investment certificate for foreign investors.
The time-consuming investment approval process has remained for years. The authorities of HCMC and other localities have requested central-level ministries and agencies to find a way out but the problem has been unsolved so far.
However, Ha still insisted local departments make greater efforts in their capacity to simplify administrative procedures to support investment promotion programs of the city.
“Departments should not set new regulatory requirements but should focus on streamlining the licensing process to attract more investors,” Ha said.
Ha added the city would hold more dialogues with investors and representatives of business associations to look into their difficulties and help find solutions to them.
As usual, the investors of property and commerce projects have to wait more time to get licenses as the city needs to consult ministries and central-level agencies. The HCMC government is working out a number of solutions to this.
HCMC leaders had told the HCMC Export Processing and Industrial Zones Authority (Hepza) to reduce land rent in industrial parks in the city to attract more investments.
The city has licensed 120 new projects with total registered capital of more than US$724 million in the year to date, down by 7.7% in number but up over 356% in capital compared to the same period last year. The city now has nearly 5,030 valid FDI projects with combined capital of more than US$34 billion.
Samsung looks to airport, petrochemical projects
Samsung wants to expand its investment operations in Vietnam to petrochemical, shipbuilding, thermal power and airport projects after the South Korean group has built a firm foothold in the cell phones and electronic devices markets.
At a meeting with Deputy Prime Minister Hoang Trung Hai in Hanoi on Tuesday, Samsung’s Global Strategy Office CEO Shin Kim expressed keen interest in big-ticket projects like Long Thanh airport in Dong Nai Province, Long Son petrochemical plant in Ba Ria-Vung Tau Province, Vung Ang 3 thermal power plant in Ha Tinh Province, a shipbuilding project in Khanh Hoa Province and other civil construction projects, Chinhphu.vn reports.
Deputy Prime Minister Hai hailed Samsung’s plans to boost investments in Vietnam and urged the firm to conduct necessary steps and procedures so that authorities would consider and approve based on the conditions of each project.
Among these projects, Long Thanh airport listed as one of the projects entitled to foreign investment towards 2020 has captured the attention of many investors. The first phase of this project will require US$5.62 billion and be implemented under PPP or BOT formats.
Regarding Vung Ang 3 thermal power plant, Samsung has followed the project for a long time. Late last year, a representative of Ha Tinh Province said Samsung was planning to invest in Vung Ang 3.1 and Vung Ang 3.2 power centers with a total capacity of 2,400 MW.
The source added Samsung had surveyed six locations around Vietnam to develop coal-fired thermal power plants and intended to pick Vung Ang for these developments.
According to Vietnam’s Power Development Master Plan 7, Vung Ang 3 consists of four generators having combined capacity of 2,400 MW. However, the project was proposed for being split into two sections for an easy selection of investors and a fast implementation.
Samsung has fastened its moves for the projects since Samsung Construction & Trading (Samsung C&T) signed a memorandum of understanding with the Ministry of Planning and Investment to cooperate on infrastructure development in Vietnam last September.
The MOU opened up opportunities for Samsung to invest in many more sectors in Vietnam in addition to electronics and phones.
Samsung’s two electronic device and cell phone complexes in Bac Ninh and Thai Nguyen have generated jobs for nearly 60,000 workers and tens of billions of U.S. dollars in export revenue for the country every year. Around 35% of Samsung’s mobile phones for global markets are assembled in Vietnam and the proportion is expected to climb to 50% in the years to come.
Scientists urge rice farming reduction to preserve biodiversity
Scientists and experts have emphasized the importance of rice production reduction in the Mekong Delta as one of the measures to preserve biodiversity and better deal with climate change in the region.
Professor Vo Tong Xuan, principal of Nam Can Tho University, told a conference on biodiversity in Can Tho City on Tuesday that rice farming caused negative impacts on the environment and lives of farmers.
Nguyen Van Sanh, director of Mekong Delta Development Research Institute (MDI) under Can Tho University, warned that the current model of growing three paddy crops a year had made inroads into the goals for the Mekong Delta’s economy, society and environment.
Scientists pointed out that extensive rice farming did not give land time to recover.
Jake Brunner, coordinator of Mekong Program of International Union for Conservation of Nature (IUCN), raised an alarm bell that paddy was cultivated for three crops in many areas reserved for dikes, causing more flooding and saltwater intrusion. This has affected the life of locals while the impact of climate change has become unpredictable.
Brunner said that the Plain of Reeds and Long Xuyen Quadrangular were the two biggest natural reservoirs in the Mekong Delta to contain water in rainy season and supply fresh water to residents of the region in dry season, but these reservoirs had lost their natural water regulation functions due to intensive paddy cultivation.
Five years ago, the World Bank conducted a study on blood samples taken from farmers who grew paddy and found a high rate of being infected by pesticide in their blood, Brunner said.
Nguyen Minh Nhi, former chairman of An Giang Province, described intensive paddy farming as a pesticide that farmers were sipping each day.
The conference was part of a project to evaluate the use of land to find options for effective land use and ways to improve the resistant capacity of the Mekong Delta and restore the flood storage and control of the Plain of Reeds and Long Xuyen Quadrangular as well as the ecosystem of coastal areas.
The project is co-conducted by Vietnam’s Southwest Steering Committee and IUCN with a fund of 3 million euros (US$4.1 million) from Germany’s Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMU) and is executed in Vietnam, Colombia, Tanzania and Zambia.
In Vietnam, the project is carried out in the Mekong Delta at an estimated cost of 600,000 euros (US$818,000).
Le Anh Tuan, deputy rector of the Research Institute for Climate Change of Can Tho University, said the project was to make reviews of the Mekong Delta and map out plans to make full use of natural land and water resources in the region.
Foodpanda joins forces with Pizza Hut
Foodpanda and Pizza Hut have announced their strategic partnership for service diversification and business expansion of the two big names in the catering sector in the Vietnamese market.
The cooperation allows customers to order pizzas directly via the website pizzahut.foodpanda.vn or via the Foodpanda’s application for mobile devices anywhere and anytime.
Archibald Keswick, general director of Pizza Hut Vietnam, told a news briefing in HCMC on May 28 that the partnership would consolidate and strengthen the positions of the two sides.
Tauriq Brown, managing director of Foodpanda Vietnam, said joining hands with Pizza Hut would help Foodpanda offer customers in Vietnam a wide selection of dishes via simple orders.
Foodpanda entered the Vietnamese market in mid-2012 and has since expanded in HCMC, Hanoi, Danang, Can Tho and Nha Trang. The supplier of food order services has more than 1,000 partners, including restaurants in the country.
Pizza Hut currently has 36 eateries and six stores in Vietnam offering on-the-spot and takeaway foods as well as home delivery service in eight provinces and cities in Vietnam.