Railway sector targets modernity

Improving the quality of services and the workforce is seen as an urgent and long-term task for Vietnam’s railway sector to maintain sustainable development amid fierce competition from different means of transport.

Tran Ngoc Thanh, Chairman of the Vietnam Railways Corporation, affirmed that raising service quality is the responsibility of the entire staff.

Apart from traditional customers, it is necessary for the sector to take the initiative in seeking new promising demographics, he said.

Thanh called on railway workers, especially key officials, to propose new mechanisms in line with the corporation’s development model to modernise the sector.

Positive changes in railway worker behaviour along with infrastructure upgrades in railway stations have received enthusiastic responses from passengers.

The sector has also implemented a host of solutions to improve the quality of human resources through 2020.

The corporation has maintained cooperative activities to improve staff skills in managing and operating modern railways while sending officials to attend training courses abroad.

Human resources trainings have also focused on raising foreign language skills for its key officials.

Such efforts have been fruitful and over the past five years the corporation has seen continuous growth with total revenue increasing by an average of 8.2 percent each year.

Deputy PM: agricultural restructuring proves effective

Enhancements seen in the added value, export, productivity, and quality of agricultural products are proof of the effectiveness of agricultural restructuring measures implemented across the country over the past two years.

Deputy Prime Minister Hoang Trung Hai, who is also Head of the Steering Committee for Agricultural Restructuring, made the remarks at a recent conference co-organised by the Committee and the Ministry of Agriculture and Rural Development.

The biggest achievement has been the shift in mindsets among farmers, businesses, authorities and scientists, the Deputy PM said.

Farmers have focused more on enhancing product quality and productivity in their agricultural production practices to ensure their products are clean and the origins are verified.

Science and technology application has also been fostered in recent agricultural production.

Deputy PM Hai urged 16 localities to map out specific action plans on agriculture with a focus on strengthening the involvement of enterprises to accelerate the process in the integration context.

Meanwhile, Minister of Agriculture and Rural Development Cao Duc Phat attached significance to the joint efforts made by authorities at all levels, sectors, businesses and farmers in realising the agricultural restructuring plan’s targets.

In 2014, the agricultural sector saw an increase of 3.9 percent in production value with GDP growth rising to 3.49 percent from 2.64 percent in 2013.

The sector earned 30.86 billion USD from export, up 11.2 percent from 2013.

In the first half of this year, the sector’s production value surged 2.41 percent from the same period last year.

Agro-forestry and fishery processing has also been shifted to products with higher added value.

By the end of July this year, 47 out of 63 provinces and cities across the country had developed action plans on agricultural restructuring for their localities.

Workshop promotes trade cooperation with China’s Hubei province

The Vietnam Chamber of Commerce and Industry (VCCI) and the China Council for the Promotion of International Trade – Hubei branch co-organised a workshop on economic and trade affairs between Vietnam and the Chinese province on August 13 in Hanoi.

The event attracted the participation of representatives from the Vietnamese Ministry of Planning and Investment; the northern Vietnamese provinces of Cao Bang, Lang Son and Yen Bai; Hubei province; and more than 60 Chinese businesses operating in agriculture, food, machinery, garment, energy, chemicals and real estate.

VCCI Vice Chairman Doan Duy Khuong said that the workshop was significant to intensify mutual understating between the two countries and offered a chance for Vietnamese enterprises to promote their products and seek investment and cooperation opportunities.

Chinese companies are paying attention to agriculture, manufacturing and infrastructure construction, he noted, suggesting Vietnam focus on attracting Chinese companies in these fields.

According to statistics of the General Department of Vietnam Customs, trade between Vietnam and China had reached 31.9 billion USD as of June, up 17.2 percent against the same period last year, 7.72 billion USD of which came from Vietnam’s exports. In the period, Vietnam’s trade deficit with its neighbour hit 16.49 billion USD, a year-on-year rise of 32.07 percent.

Vietnam mainly sells crude oil, coal, rubber, rice, vegetables and fruits and purchases machines, electronic component parts, steel and fertilizers from China.

As of March, China was running 1,112 projects in Vietnam with total registered investment of 8 billion USD, ranking ninth out of 100 countries and territories investing in the country. China also ranks first in terms of the number of tourists to Vietnam in 2014. Vietnam welcomed with 1.9 million Chinese tourist arrivals last year and 700,000 arrivals in the first five months of this year.

Financial Times reports on Vietnam-EU free trade deal

The Vietnam-European Union (EU) Free Trade Agreement (FTA) was finalised earlier this month, yet textiles remain a sticking point as EU negotiators fear China will use Vietnam as a backdoor for cheap textile imports into the EU, United Kingdom-based Financial Times reported.

The FTA has opened up one of Asia’s fastest-developing economies and a market of more than 90 million consumers to European companies, the newspaper said in an article titled “Brussels seals trade accord with Vietnam” on August 4.

The paper cited the International Monetary Fund (IMF)’s forecast that Vietnam’s economy will continue to grow over the next five years thanks to strong exports, young population and an increasing focus on technology.

More than 31 million jobs in Europe depend on exports, making easier access to Vietnam’s market great news for the EU, particularly European clothing, footwear and sportswear firms who will benefit from the slashed tariffs on goods made in their Vietnamese factories, EU Trade Commissioner Cecilia Malmstrom was quoted as saying.

The deal, which is still pending approval from the EU parliament, will remove 99 percent of tariffs between Europe and Vietnam over the next few decades, the article noted.

Trade between the two sides exceeded 28 billion EUR last year. Of the figure, the EU imported 22 billion EUR worth of commodities from Vietnam and is now Vietnam’s second largest trade partner after China.

Worrying that China will use Vietnam as a conduit to flood EU markets, the EU has introduced strict “rules of origin” safeguards to ensure that raw materials from China will undergo required workmanship in Vietnam before they can be re-exported to Europe.

The EU believed that the FTA would allow its companies to bid for major public contracts such as roads and ports in Vietnam and open doors for service sectors such as banking and insurance.

Thailand Trade Exhibition opens in Hanoi

Thailand’s food, home appliance, garment, decor, auto parts and electronic devices are being exhibited at nearly 165 booths during the Thailand Trade Exhibition-Thai Week 2015, which opened in Hanoi on August 13.

The four-day event, the 15th of its kind, was jointly organised by the Thai Ministry of Commerce’s Department of International Trade Promotion, the Thai Embassy in Hanoi and the Vietnam National Trade Fair and Advertising Company (Vinexad).

Thai traditional dances will be featured at the event, aiming to popularise Thai traditional culture to Vietnamese people.

Thai Ambassador to Vietnam Panyarak Poolthup highlighted that this year’s event marks a significant advance in the trade relations between the two countries, contributing to developing their economic relations.

According to Deputy Minister of Industry and Trade Do Thang Hai, Vietnam and Thailand have seen rapid trade growth after it shot up from 1 billion USD in 2000 to 10.6 billion USD in 2014. He said that the figure stood at 5.4 billion USD in the first half of 2015, up nearly 1 billion USD from the same period last year.

The two sides set up a strategic partnership in 2013 and agreed to increase trade to 20 billion USD by 2020 during Prime Minister Nguyen Tan Dung’s official visit to Thailand last month.

Pakistan – potential market for Vietnamese businesses

Pakistan has huge demands for commodities which are Vietnam’s strength like electrical and household goods, agricultural and forestry products and seafood, a Pakistani trade executive said at a recent workshop on the country’s business with Vietnam in Karachi city.

Acting President of the Federation of Pakistan Chambers of Commerce & Industry Zarar Kaleem said the workshop, which was attended by representatives from 16 Vietnamese enterprises and nearly 100 Pakistani companies, offered a good chance for Pakistani businesses to expand their presence in Vietnam and study experience from the country’s successful enterprises.

Secretary General of the Trade Development Authority of Pakistan Raybia Javeri Agha affirmed that Vietnam is the most important market for Pakistan in Southeast Asia, with bilateral trade recording an average increase of at least 20 percent in recent years.

Pakistani companies are paying much attention to seeking more business opportunities in Vietnam, not only in traditional cooperation fields.

Meanwhile, Vietnamese Ambassador to Pakistan Nguyen Xuan Luu confirmed that the embassy is willing to provide information for and work with both countries’ business communities to turn opportunities into specific results.

Vietnam is willing to act as a bridge for Pakistani businesses and products to find inroad into the ASEAN community, he said, hoping that Pakistan, in turn, will help Vietnam expand its ties with countries in central and southern Asian.

He also suggested the two countries design more agreements to create political-economic motivation and a legal framework to support their businesses.

At the event, a representative from the Vietnamese Ministry of Industry and Trade made clear both advantages and difficulties facing the two countries in promoting and expanding bilateral trade exchange, while proposing several measures to create more favourable conditions for businesses.

Earlier, Ambassador Luu had a working session with Governor of Syndh province Syed Qim Ali Khan, and a meeting with the Chairperson of the Karachi Chamber of Commerce and Industry (KCCI), and chaired an exchange with leaders of more than 50 KCCI member companies.

Last year, two-way trade between Vietnam and Pakistan reached more than 420 million USD, of which 250 million USD came from Vietnam’s exports. The turnover is expected to exceed 500 million USD this year. Pakistan currently runs seven investment projects totaling over 1.5 million USD in Vietnam.

Concerted efforts needed to optimise ODA use

Using official development assistance (ODA) capital as effectively as possible is a major task that requires utmost efforts of each ministry, sector and locality, Deputy Prime Minister Hoang Trung Hai said on August 12.

Hai, who is also head of the National Steering Committee for ODA and preferential loans, cited the fact that as it will be more difficult for Vietnam to attract ODA and concessional loans as the country became a middle-income one.

The committee’s standing agency pointed out that the attraction and disbursement of ODA and concessional loans fell short of expectations despite continuous endeavours.

ODA and preferential loans committed in the first half of 2015 approximated 1.6 billion USD, including over 1.57 billion USD of ODA and concessional loans and 17 million USD of non-refundable assistance, representing 70.54 percent of the same period last year’s figure.

Some large beneficiary projects are phase II of an environmental hygiene in Ho Chi Minh City (450 million USD funded by the World Bank), the construction of Ben Luc – Long Thanh highway (262.79 million USD funded by Japan), and the promotion of the economy’s competitiveness (230 million USD funded by the Asian Development Bank).

Total ODA and concessional loans disbursed during the January – June period was estimated at 1.91 billion USD, including 1.73 billion USD of ODA loans and 181 million USD of non-refundable ODA. The disbursed sum was 38 percent lower than that in a year before, the standing agency said.

It attributed the sluggish attraction and disbursement to problems in professional standards, changes during project implementation, differences in procedures between Vietnam and its sponsors, and the slow allocation of Vietnam’s responding capital.

Deputy PM Hai told ministries, sectors and localities with the low rate of capital disbursement to make drastic moves to ensure the progress and efficiency of beneficiary projects.

Meanwhile, the Ministry of Planning and Investment must make monthly reports on the improvement of project management agencies’ performance and address hindrances to project implementation, he noted.

Tra fish exports to China on sharp rise

Vietnam’s tra fish (pangasius) exports to China jumped 50.7% to US$70.15 million for the first half of this year, according to statistics released by the General Department of Vietnam Customs.

The Vietnam Association of Seafood Exporters and Producers (VASEP) said the rise is attributable to the following reasons:

First, difficulties in exporting seafood to major markets like the US, the EU, ASEAN, Mexico and Brazil forced businesses to shift to a new and huge market – China.

Second, Chinese processing businesses imported raw tra fish to make processed products for the US.

Finally, the Chinese Government has implemented many new policies to develop its seafood industry in a sustainable manner, including incentive policies to encourage importers.

According to VASEP, although China is a potential market for Vietnamese tra fish, most transactions are carried out through unofficial channels. As a result, due attention is not paid to the product quality. This posed a challenge to Vietnamese seafood, particularly tra fish exports to the market.

VASEP said China is a potential export market but might not be sustainable in the future.

However, there are many opportunities for Vietnamese businesses to spur tra fish exports to China from now to the end of this year, VASEP concluded.

HCM City property rebounds

The HCM City housing market is recovering thanks to effective government policies like allowing foreigners and overseas Vietnamese to buy houses, an industry insider has said.

Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association, said the new regulation that housing projects need to be guaranteed by banks would usher in huge changes.

He hailed them as legal provisions that are totally consistent with the trend of international integration and which help build trust among consumers and secondary investors, leading to a sharp increase in property transactions.

In the first six months there were around 7,050 successful transactions in the city, 2.8 times the number in the same period last year, while prices have risen by 3-5%.

The small- and medium-sized segment priced at around VND1 billion (US$46,728) remained steady as always, but the luxury segment saw positive changes, with many projects getting under way or hitting the market.

Chau said M&A activities are strong in the property sector and would help revive stalled projects.

In Ho Chi Minh City 689 projects have been shelved while 85 others lost their licence.

But admittedly there are also problems the industry has to tackle, especially in the social and low-income housing segments in which supply is inadequate. Also, the VND30 trillion (US$1.41 billion) bank housing credit package has been disbursed too slowly.

The association called on authorities to quickly issue detailed guidance, and with open and transparent provisions, for the amendments made to the Housing Law, Real Estate Business Law, Investment Law, and Business Law to create a favourable environment for market activities.

Credit growth on target to hit 15-17%

Credit growth by August 10 reached 8.3% compared to December last year, much higher than during the same period last year, said director of the State Bank of Vietnam's Credit Department, Dang Tien Dong.

The rise was only 3.7% between early January and end July last year.

At this pace, Dong expected the country's credit growth this year to reach 15-17% in keeping with the target fixed by the central bank.

Such fast-paced credit growth was attributed to a sharp rise in lending to infrastructure, consumption and real estate sectors.

However, experts are concerned about a rising loan-to-deposit ratio.

According to the HCM City Securities Co (HSC), the lack of balance between lending and deposit growth rates will lead to an unsustainable banking system in the long term, a situation that will force the central bank to make a tough choice: either increase the money supply or restrict the credit growth in times to come.

The central bank would have to work out ways to achieve lending and deposit growth balance, and while the task may not be very urgent but nevertheless should be undertaken before the end of this year, the HSC said.

According to statistics from the central bank, the dong lending rates in the week ending July 31 continued to be stable.

The average rates were commonly at 6-7% per year for short-term loans for priority fields, and 9-10% for medium- and long-term loans.

For ordinary loans, the rates were commonly 7-9% per year for short-term and 9.3-11% for medium- and long-term loans. During the week, a few banks reduced dong mobil-ising rates by 0.1-0.3 percentage points for several terms.

The rates were commonly 0.8-1% per year for demand and below 1 month terms, 4.5-5.4% for deposits of 1 month to below 6 month terms, 5.4-6.5% for 6 month to below 12 month terms; and 6.4-7.2% for 12 month plus terms.

Vietnam firm completes US$100mn oil rig contract for Total affiliate

A Vietnamese mechanical firm has completed the second part of a US$100 million contract of building an oil and gas platform for export to Brunei

The load-out ceremony for the 1,500 ton topside of the Maharaja Lela Jamalulalam 3 (MLJ3) platform was held by its builder, the PTSC Mechanical and Construction Company (PTSC M&C), in the southern Vietnamese coastal province of Ba Ria - Vung Tau on August 12.

Load-out is the transfer of a system from a storage facility onto an installation or shipping vessel.

The PTSC M&C, an arm of the state-owned Vietnam National Oil and Gas Group (PetroVietnam), beat many capable contractors from China, Malaysia, Indonesia, Thailand and Singapore to win the US$100 million contract with the developer Brunei-based Total E&P Borneo B.V., an affiliate of French oil and gas giant Total.

PTSC M&C engineers walk past the newly built oil platform topside in Ba Ria - Vung Tau Province, located in southern Vietnam, on August 12, 2015.

The Vietnamese firm finished building the 1,200 ton jacket, or base, of the MLJ3 platform in Brunei in March.

PTSC M&C is set to ship the newly built topside to Brunei, where it will be assembled into the jacket to compete the MLJ3, part of the Marahaja Lela South project developed by Total E&P Borneo B.V.

The building of the MLJ3 topside has been done 100% by Vietnamese engineers, according to PTSC M&C director Dong Xuan Thang.

“The ability of PTSC M&C to perform as a contractor is proved by its winning the contract and successfully finishing the topside,” Thang said.

“This will pave the way for the development of high-quality oil and gas service and expansion into overseas markets [for the company].”

In November 2014, PTSC M&C delivered the topside, weighing approximately 8,400 tons, of the Heera Redevelopment Process Platform to India's state-owned Oil & Natural Gas Corporation Ltd.

New-generation free trade agreements: opportunities and challenges

A seminar was held in Hanoi on August 13 emphasizing the importance of free trade agreements and new-generation free trade deals.

Vietnam has so far signed 10 trade agreements and is negotiating 5 other new-generation FTAs which will help many Vietnamese products enjoy preferential tariff rates, be exempted from tax and lure more foreign investment.

Duong Van Dan, director of the Bigsun Company in Vietnam, said that apart from the opportunities, FTAs will also pose challenges and increase the competitive pressure on domestic goods.

He noted, "Vietnamese businesses to make careful preparations to be able to penetrate FTA markets.

Currently we haven’t been strong enough to compete there. What we should do right now is to improve competitiveness, invest more in infrastructure and equipment, and apply new standards and ways of management.”

Vietnam can help traders save US$10 billion every year by simplifying its customs procedures, which are now very time-consuming and complicated, an expert from a think tank has said.

Nguyen Dinh Cung, head of the Central Institute for Economic Management, has told an online conference that customs red tape means unnecessary high costs for businesses.

He cited a recent World Bank report as saying that the import procedures in Vietnam, including customs check and quality tests, requires an average of 21 days, compared to only four days in Singapore, eight in Malaysia and 13 in Thailand.

“When the cost increases, businesses lose a big chunk of their profits and their product becomes less competitive,” Cung said, as quoted by Tien Phong newspaper.

If the whole process can be reduced by 10 days, businesses can save up to US$10 billion a year, according to his estimate.

Vietnam government has announced a plan to reduce the time for customs procedures to 14 days by the end of this year.

But Cung said government agencies are unlikely to reach that goal. He called Vietnam’s plan to cut its customs hours to match those of other ASEAN members “ambitious and unrealistic."

The government has listed nearly 300 regulations that its agencies have to review and amend to shorten customs procedures, but legal changes have been delayed.

“Some amendments should have taken only a week to make, but then it took officials a month. Those that should have taken one month were dragged on for several more,” Cung said.

He also criticized several agencies for adding even more rules that are not necessary.

Cung said for instance a new rule is demanding food importers to apply for a new certificate from the Ministry of Health, even after they have passed all quality tests.

Vietnam, Canada bilateral trade to prosper

Bilateral trade turnover between Vietnam and Canada has prospered, reaching about 1.45 billion USD in the first five months of 2015, according to Statistics Canada.

Vietnam’s export turnover to Canada reached 1.2 billion USD, a 30.5 percent increase from 2014, while import turnover was 235.4 million USD, up 80.9 percent.

In the first quarter of this year, total trade between the two countries hit nearly 830 million USD; Vietnam’s export turnover to the North American country accounted for 679.4 million USD, surging 27.9 percent compared to the same period last year.

Meanwhile, Vietnam’s import value from Canada was 150.3 million USD, a year on year increase of 148.8 percent.

Vietnam’s key exports to Canada include apparel, footwear, seafood, coffee and cashew nuts while importing primarily wheat, spare airplane parts and nickel.

EPC contract signed for rock salt exploitation, processing project in

The Vietnam National Chemical Group (Vinachem) and the Viet Lao Chemical and Rock Salt (Vilachemsalt) company signed an engineering-procurement-construction (EPC) contract under bidding package No. 10 for a project to exploit and process rock salt in Laos.

The project, which will build a rock salt exploitation and processing plant in the Nongbok district of Khammouane province, was signed by the Lao government and Vinachem on February 9, 2012, and have received licences from both governments, according to Vilachemsalt General Director Nguyen Huy Cuong.

According to the results released on April 24, the winner of the bidding package No.10 is the TTCL-K-ETEC CECO venture, which offered to complete the package over the course of 40 months at a total cost of 334.2 million USD.-

Vietnamese, Japanese farming firms seek investment ventures

Vietnamese and Japanese farming enterprises met at a dialogue forum in Hanoi on August 12 to seek opportunities and networks.

Authorities of Lam Dong, Nghe An and Nam Dinh provinces introduced the local potential and strengths as well as investment opportunities to Japanese firms.

They hoped Vietnam would be able to access more Japanese technology and expertise in chain production from manufacturing to harvest to increase added value of farm products. State support for navigating the demanding Japanese market is also needed, they said.

Deputy Minister of Agriculture and Rural Development Le Quoc Doanh announced that the Vietnamese Ministry of Agriculture and Rural Development (MARD) and Japanese Ministry of Agriculture, Forestry and Fisheries have already devised a vision for bilateral farming cooperation over the medium and long term, laying a foundation for developing Vietnam’s farming sector.

Deputy Head of the MARD’s Planning Department Dao Quoc Luan called on domestic firms to improve their competitiveness by forming linkages with their Japanese counterparts, especially in building value chains ranging from manufacturing to processing and consumption.

Priority should be given to breeding, cultivation and post-harvest using Japanese technology, he said, adding that Japanese companies should coordinate with their Vietnamese counterparts in projects using Japan’s official development assistance.

According to him, Vietnam has provided all possible support in procedures and policies for Japanese firms and their joint ventures.

Last year, Japan channelled 230.3 million USD into 34 agricultural projects in Vietnam.

Additional RoK enterprise granted preferential customs treatment

The Republic of Korea’s Chang Shin Vietnam, which manufactures Nike shoes for export in the southern province of Dong Nai’s Thanh Phu industrial park, was granted preferential customs treatment.

Director of Dong Nai Customs Department Le Van Danh said the company will be eligible for the policy benefits for three years from July 20, 2015 as stipulated in regulations of the Ministry of Finance’s circular 72/2015.

The company is eligible for an extension after the three years if it satisfies certain regulations during the three years, he added.

According to the ministry, enterprises can claim preferential customs treatment if they satisfy certain conditions, such as a turnover of at least 100 million USD a year for import-export companies, a turnover of at least 40 million USD for exporters of made-in-Vietnam goods, and a turnover of at least 30 million USD for exporters of Vietnamese farm produce and aquatic products.

Chang Shin Vietnam currently employs more than 23,400 workers, manufactures 93,000 pairs of shoes a day with total export turnover of over 420 million USD. and has an annual sales growth of 35 percent.

The firm is one among of nine RoK enterprises in Vietnam receiving preferential customs treatment.

Work commences on logistics centre in HCM City

Construction on a hi-tech bonded warehouse and logistics centre began in the Saigon Hi - Tech Park (SHTP) in Ho Chi Minh City on August 12.

Covering 10 hectares, the 600 billion VND (27.2 million USD) project will comprise a system of bonded warehouses, container freight stations (CFS) , normal warehouses, cold storages and container yards. It will be equipped with modern technology and management software.

Warehouses to store hi-tech products will be built under ISO, HACCP and CTPAT standards, among others.

According to Bui Tuan Ngoc, CEO of the investor – Transimex-Saigon, the centre will focus on developing logistics services based on developing modern and effective supply chains.

Once operational, the project will meet domestic distribution demands for enterprises operating in and outside the SHTP as well as serve goods circulation within the country and export-import activities, Ngoc said.

This is the first logistics investment in the park, which is leading foreign investment capital attraction in the country.

Retailers should focus on services: experts

Experts have urged Vietnamese retailers to enhance the quality of their retail services, considered a decisive factor to ensure any business' success at a time when the country is moving towards rapid integration with regional and global economy and anticipates increasing competition.

The Director of the Centre for Business and Administration Studies under the Vietnam National University's University of Economics and Business, Phan Chi Anh, said at a conference last week that the Vietnam's retail sector remained attractive for investments, as he reflected upon booming merger and acquisition (M&A) deals during the past year.

Statistics showed that M&A deals' value in the retail sector last year accounted for 36 percent of the total M&As value with notable deals such as Vingroup buying Ocean Mart, Japanese Aeon Group investing in Citimart and Fivimart and a Thai group buying stakes in Nguyen Kim – an electronics supermarket chain - and Metro Supermarket.

Chi Anh said the establishment of ASEAN Economic Community and the impending Trans-Pacific Partnership would result in domestic retailers facing even more competition as new players from foreign countries enter the sector.

He added that the participation of foreign retailers would not be a threat but is, in fact, a good sign as this would act as a stimulus for the domestic firms to enhance their competitiveness, lest they will be eliminated out of the market. Such a catalysing effect would benefit consumers, he added.

In Vietnam, products on the shelves of retail stores and supermarkets were largely the same, Anh said, urging retailers to focus on quality of service to prove themselves different from the competition.

"Service quality in retail business is a premise for sustainable development as quality decides consumers' loyalty," he said, adding that consumers' loyalty is of utmost importance, given the anticipated competition that is likely to get harsh, especially from foreign giants.

Although the retail industry posted rapid growth in recent years, the service quality levels largely failed to meet customers' expectations. Chi Anh said he expected Vietnamese consumers to raise greater feedback as a pressure tactic, thus forcing retailers to enhance their service quality.

According to Nguyen Thu Ha, the centre's deputy director, to enhance service quality, domestic retailers must improve their interaction with customers, diversify customer approaching methods and respond expeditiously to customers' claims together with appealing sale and customer care policies.

She said the policies to encourage the development of modern retail channels were needed.

THACO leads auto sales in July

With 6,827 cars sold, the Truong Hai Auto Corporation (THACO) topped the list of Vietnamese auto traders in July.

Of the figure, THACO business accounted for 38.6 percent of the Vietnam Automobile Manufacturers Association (VAMA) sales in the month.

In the first seven months of 2015, THACO also crowned the domestic market with 41,420 cars sold, equivalent to 37.9 percent of the total VAMA sales figure.

In commercial automobile lines, THACO Frontiers and THACO Ollin trucks were among the most requested in July this year with 1,693 and 766 units, respectively.

Kia – including its Kia Morning, K3, and Kia Rio models – remained the main sales line of the company with 1,550 units, doubling the same month last year, followed by Mazda with 1,716 units.

Based on the positive business results to date, THACO targets to lead the market for the remainder of the year.

Businesses need to take bigger role in drafting legal documents

As many as 80 per cent of Vietnamese businesses have never been asked about drafts for legal documents, Dau Anh Tuan, Head of the Vietnam Chamber of Commerce and Industry (VCCI)'s Legal Department said yesterday.

Speaking at a seminar entitled, "Building Policies in the New Context – Opportunity and Challenge for Businesses," held by the VCCI in Ha Noi, Tuan said more than 1,000 legal documents were issued annually in Viet Nam, and 70 per cent of these were related to businesses. However, there were few businesses that were asked to contribute their ideas to the draft legal documents.

He said the businesses should contribute their opinion when they meet difficulties and encounter shortcomings that originate from any unreasonable regulation, or when the State is preparing to issue a new policy related to their businesses, or when the businesses have certain ideas on policy to make their business more effective.

The participation in policy formulation will help enterprises in improving the ease of doing business as well as reducing operational costs besides having a thorough grasp of legal documents to apply them in the future, said Tuan.

Citing the example of sea transportation businesses, Tuan said they had mobilised opinion to abolish a regulation on archiving transport documents and replacing it with electronic archives. This proposal was approved, and helped reduce the management work from 208 days to below 10 days each year.

However, it's not an opportunity that many small and medium enterprises get.

Dao Cong Duy, General Director of Chau A Joint Stock Company, which specialises in designing and building glass items for buildings nationwide, said he was willing to take part in formulating drafts for legal documents, but never had such an opportunity.

"Not being given a chance leads to the fact that we fail to update new legal documents related to our import and export businesses," said Duy, adding, "Legal documents are always related to administrative procedures. We always lose time and effort to undertake same procedures again when we go in for a new business and have to deal with a new legal document."

Duy told Viet Nam News that although new legal documents had been updated on websites, sometimes also publicised on television programmes, it's not easy for small enterprises to update themselves about these changes in time.

"The Enterprise Law has seen many changes, but I am sure that not every business has caught up with them. As for small enterprises, many of them are not able to set up a legal section to study legal documents related their business, leading to the fact that they fail to avail of new opportunities as well as deal with challenges in the future," said Duy.

However, Tuan said not every enterprise wanted to take part in proposing draft legal documents because of money and time involved.

At the seminar, the VCCI and the Public Participation and Accountability Facilitation Fund introduced a project on establishing a suitable and effective policy for consultants for small businesses.

Import tariff on vegetable oil imports to remain in place

Viet Nam will continue to take protective measures against imported vegetables oil because growing imports are affecting domestic production, the industry and trade ministry (MoIT) said.

Under a recent decision by the MoIT, imported refined soya oil and refined palm oil with the trade codes of 1507.90.90, 1511.90.91, 1511.90.92 and 1511.90.99 would be taxed at three per cent until next May.

The rate will be reduced to two per cent from May 8, 2016, to May 7, 2017, and to zero per cent after May 8, 2017.

Protective measures will be implemented in line with current regulations on such measures against imports and other related regulations.

The MoIT said a rapid increase in vegetable oil imports in Viet Nam had led to sharp falls in domestic enterprises' market share, turnover and profits, negatively affecting the enterprises.

In 2012, Viet Nam imported more than 568,000 tonnes of vegetable oil. The figure increased by 5.3 per cent in 2013.

Last year, the country imported nearly 666,600 tonnes of vegetable oil, a 11.3 per cent increase over 2013.

While imports jumped from 5.3 per cent in 2013 to 11.3 per cent in 2014, the growth of domestic sales plummeted from 42 per cent in 2013 to 11.3 per cent in 2014.

On May 8 last year, the country applied four per cent duty on imported vegetable oil to protect domestic oil producers. The rate took effect through May 6 this year.

Meanwhile, the average amount of cooking oil consumed by the Vietnamese people is expected to touch 16kg per year by 2020, the General Statistics Office said. The figure is expected to reach 18.5kg per person by 2025.

In 2014, the average was 9.55kg per year, lower than the world figure of 13.5 kg, the office said.

It attributed the increase in consumption to the rising demand for export and the development of the food processing industry.

Cai Lan Oils and Fats Industries Company led in terms of cooking oil turnover in 2014, accounting for 37.3 per cent of the country's market share.

The office said an estimated 680,000 tonnes of palm oil and 240,000 tonnes of soybean oil would be consumed during the 2014-15 period.

Metro’s new acquisition seen as sign of no Vietnam exit

Germany’s Metro Group has acquired a food service distribution company with a wide network across Southeast Asia’s big cities, including Ho Chi Minh City, raising speculation it will not leave Vietnam after selling the cash and carry business in the country.

Metro has bought the Classic Fine Foods Group (CFF), a leading premium food service distribution player headquartered in Singapore, from private equity firm EQT under a US$290 million deal, plus an earn-out of up to $38 million, the German retailing firm announced on Thursday last week.

The CFF serves high-end hotels and restaurants, with a presence in 25 cities throughout 14 countries, most of which are in Asia, including Singapore, Dubai, Hong Kong, Bangkok, Kuala Lumpur, London, Jakarta and Ho Chi Minh City.

The acquisition will increase Metro Cash & Carry's presence from 26 to 36 countries, according to Metro.

Metro is slated to transfer its complete wholesale business in Vietnam to Thailand's Berli Jucker Public Company Limited (BJC), according to an agreement they closed in August 2014.

Under the agreement, the BJC will take over the complete operational business of Metro Cash & Carry Vietnam, including all 19 wholesale stores and the related real estate portfolio, for an enterprise value of €655 million, or $725.3 million, Metro said in a separate press release.

The acquisition of the CFF is thus seen as a move for the German firm to remain in Vietnam with a different business, food service distribution, rather than cash and carry.

The CFF's business comprises sourcing and procurement, import and export, storage and handling, marketing and distribution of high-end fine food products such as dairy, meat, pastry, seafood, high quality perishables, condiments, pasta and dry products, according to Metro.

The company’s customers are five-star hotels, high-end restaurants, airlines, supermarket chains and delicatessen stores, with annual sales of more than $200 million.

“The acquisition strengthens Metro Group's wholesale subsidiary Metro Cash & Carry with dedicated food service distribution capabilities,” Metro said.

Metro can take advantage of the CFF’s existing distribution and warehousing network across the cities it serves to “offer highly flexible delivery schedules.”

Even though it has been a year since Metro and the BJC closed an agreement on the transfer of Metro Cash & Carry Vietnam, it is still unclear when that sale will materialize.

BJC shareholders are concerned that the acquisition will put the Thai company at financial risk, they said at a major shareholder meeting early this year, according to the Bangkok Post.

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