Tuna exports to Russia flourish

New figures from the Vietnam Association of Seafood Exporters and Producers (VASEP) show that Russia is now the 9th largest importer of fresh and frozen tuna fish from Vietnam.

Shipments of tuna fish to the leading Eurasian Economic Union (EEU) nation in the four months leading up to May shot up over twofold last year’s same period, a good omen of things to come when Vietnam-EEU trade pact comes into full force.

The EEU is a Russia-led trade bloc established in 2015 on the basis of the Customs Union of Russia, Kazakhstan and Belarus. It currently has four members – Armenia, Belarus, Kazakhstan, and Russia.

Kyrgyzstan is on the verge of joining the group while Tajikistan is a prospective member.

Vietnam and the EEU signed the trade pact on May 29, 2015, which carries with it a commitment to reduce import tariffs to zero, which should open more opportunities for Vietnam’s tuna and other seafood.

Tran Thanh Hai, deputy director of the Import-Export Department, said seafood is a top market that should benefit for the agreement along with the garment and footwear industries.

Hai said the EEU has agreed in principle to remove import tariffs on substantially all tuna and other seafood exports soon after the agreement comes into effect, hopefully later this year or early next year.

The robust 11% expansion in the Russian market for tuna fish in the early months of the year is a good sign for the seafood industry said Hai, adding that it has helped to offset sharp declines for the same period for other major markets.

Most notably, during the period tuna exports to Japan dropped 38% on-year to account for barely 1% of the country’s total export volume. Japan is now the fourth largest importer of tuna following the US, EU and ASEAN.

Tuna exports to the EU also dipped 20% for the first four months, of which the Netherlands saw the largest decline of 61% while the German market fell 5% and the market in Spain doubled.

The US was by far the largest market generating 40% of total Vietnam tuna export revenue in the early months of the year.

Exports to the US for the period rose 3.3% to reach US$58.2 million, to ASEAN by 13.8% to US$0.6 million. Exports to Mexico surged by 91.7% to US$3 million.

The most important thing is for Vietnam tuna processors and exporters to pay meticulous attention to details and improving the quality of seafood to meet with the strict requirements of demanding markets.

BNI Chairman to visit Vietnam

Dr Ivan Misner, founder and chairman of BNI, the world’s largest business networking organization, will be in Hanoi on June 28 for a networking conference with 700 Vietnamese entrepreneurs.

Dr. Misner has been called the ‘Father of Modern Networking’ by CNN and the ‘Networking Guru’ by Entrepreneur Magazine and featured in the US top newspapers – Los Angeles Times, Wall Street Journal and New York Times.

The exchange is held annually by BNI Vietnam aiming to connect BNI entrepreneurs nationwide, offer business opportunities for each member, and help businesses expand their horizons.

This is the first time the event has been held in Hanoi. It is expected to draw the participation of 700 entrepreneurs, local and international guests. Especially, Deputy Prime Minister Vu Duc Dam and key leaders from ministries and agencies will attend the event.

Established in the US in 1985, Business Network International (BNI) is the largest business networking organisation in the world.

At present it has affiliates in 60 nations around the globe with nearly 170,000 members. Each year, BNI is credited with generating business opportunities valued in excess of US$8.6 billion.

BNI Vietnam was established in 2010 by Vietnamese entrepreneur Ho Quang Minh and currently has branches in 11 provinces nationwide with more than 1,700 members.

Central city wins Transformational Business Award 2015

Central Danang city has received the Transformational Business Award 2015 - Excellence in City Transformation at the Transformational Business Conference and Awards 2015 in London, the United Kingdom.

Vice Director of the city's Investment and Planning Department Huynh Van Thanh said the award, which is given by the Financial Times and International Finance Corporation, recognises those cities that, since 2010, have demonstrated tangible progress in citywide, integrated reforms across one or more of the following five parameters: environmental, social, governance, economics, and services.

He noted that Danang surpassed 191 entries from 167 organisations across 140 countries to make it to the final shortlist, together with six other cities from Brazil, India, Liberia, Senegal, South Africa, and Spain. The city beat the other contestants to win the ‘Excellence in City Transformation' award.

Thanh revealed they had submitted the GIZ Nexus project as candidate for the award.

"The GIZ Nexus project promotes Danang as one of the most advanced cities in Nexus's 10 Asian partner countries," Thanh remarked.

He added that the Urban Nexus project, financed by the German Federal Ministry of Economic Cooperation and Development, supports ten cities in six Asian countries to promote ‘nexus-compliant' integrated resource management to fully utilize interaction and synergies among three nexus sectors, namely water, energy, and food security.

Danang's GIZ Nexus project has demonstrated progress in citywide reform in economic development, urban planning, environmental management, and social and governance from 2010.

In 2012, at the 44th APEC energy meeting, Central city was selected as an APEC city for its Low-Carbon Model Town Project.

Domestic coal consumption up 17% in June

The Vietnam National Coal – Mineral Industries (Vinacomin) sold 3.2 million tonnes of coal in June, raising the six-month figure to 17.7 million tonnes.

Of the monthly figure, 100,000 tonnes were for export and the remaining were for domestic consumption, Vinacomin Deputy General Director Nguyen Van Bien told the media in Hanoi on June 15.

The January-June figure was equivalent to 49.2% of the yearly target and 95.8% of the same period of last year, with domestic sales rising 17% rise annually to 17 million tonnes, representing vastly different volumes for domestic consumption and export.

Bien said the declining exports are a result of global oversupply, adding that Vinacomin will strive to keep the 2015 total production equivalent to that recorded in 2014.

In July, Vinacomin expects to sell 3.2 million tonnes of coal, including 3.1 million tonnes in the domestic market.

Qualified SOEs allowed to skip UPCOM

Equitised state-owned enterprises (SOEs) would be able to be listed directly on the stock market and skip the Unlisted Public Company Market (UPCOM) if they were qualified, an official told Securities Investment magazine.

Nguyen Quyet Tien, Deputy Head of the Corporate Finance Agency under the Ministry of Finance, was responding to concerns from many SOEs and their investors that were unsure if they would have to go through UPCOM before they listed on the stock market.

The issue arose after SOEs were required to list on UPCOM prior to the national stock exchanges after they were equitised, according to the Decision 51/2014/QD-TTg issued by the Prime Minister last September.

Tien said that SOEs should regard UPCOM as a benchmark, not a compulsory requirement.

SOEs could skip UPCOM and be listed directly on the stock exchanges if they were financially qualified after being equitised, he said.

If they were not financially strong enough, they would need to enter UPCOM first and try to meet the financial criteria set by the SSC in order to be listed on the stock exchanges, he said.

Tien also said that the financial criteria were stated in Decree 58/2012/ND-CP which was issued in July 2012.

Under the Decree, companies need to have 120 billion VND (5.5 million USD) in charter capital and been operating and profitable for at least two years as a joint stock company.

Those that are qualified to be listed on HOSE, are also eligible to be listed on the Hanoi Stock Exchange.

Tien said the decision aimed to impose sanctions on companies that did not prepare to be listed after being equitised.

He said that the decision would ensure the rights and benefits of shareholders were protected, and that companies operated transparently after they were equitised.

Experts urge speeding up economic restructuring

Economic experts have warned that Vietnam must restructure its economy or the country will be off-track in its development path.

Luu Bich Ho, former Director of the Development Strategy Institute at the Ministry of Planning and Investment, said while the business environment has improved, particularly with the Government’s programme to reform administrative procedures towards catching up with the business environment of the top four ASEAN economies in 2016, the country is just making the first steps of restructuring, with no obvious change in the growth model.

Nguyen Tu Anh, Deputy Head of the macro-economic policy section under the Central Institute for Economic Management (CIEM), highlighted the nation’s significant achievements in curbing inflation, stabilising its macro-economy, increasing the national safety index and improving business environment and labour productivity.

He noted that inflation peaked at 28.32 percent in August 2008 and has gradually returned to normal from July 2012 to the present, while loan interest rates were curbed after measures to restructure the banking system took effect in early 2012.

However, he warned that the risk of macro-economic instability still exists due to slow equitisation of State-run businesses and the handling of bad debts. Public investment restructuring has yet to focus on measures to improve the efficiency of investment and avoid investment waste, he added.

Director of the CIEM Nguyen Dinh Cung said restructuring the economy is to change institutions and mechanisms for the allocation, management and utilisation of national resources, particularly investment capital, towards a more effective and highly competitive economic structure. He added that the re-allocation of national resources should not be done by the State but be prompted by the market.

Le Xuan Ba, former Director of the the CIEM, said restructuring the economy successfully requires a high price, which means to accept a modest growth of 4-5 percent in the short term in order to have higher growth of 8-10 percent in the middle term.

To boost economic restructuring and shift growth models, experts suggested maintaining macro-economic stability with low inflation while establishing and developing institutions for the market economy and creating fair and transparent playing grounds for businesses with low risk levels, high-quality human resources and synchronous infrastructure systems.

Thanh Hoa works to attract investment

The central province of Thanh Hoa is focusing on improving its investment climate, implementing effective socio-economic development policies and promoting economic restructuring in a bid to attract more investment into the locality.

According to Nguyen Dinh Xung, Chairman of the provincial People’s Committee, Thanh Hoa has been implementing a number of measures to tap its potential and boost economic growth and competitiveness.

The locality is paying attention to equitising State-owned enterprises, divesting from non-core businesses and fostering new-style agricultural cooperative models to strengthen connections and form production value chains.

Meanwhile, private and foreign businesses are receiving favourable conditions to develop their production and trade activities.

Thanh Hoa is also paying heed to developing small- and medium-sized enterprises, promoting the application of advanced science and technologies in production and training human resources to serve the locality’s industrialisation and modernisation goals.

It will also strengthen state management of mineral and environmental protection and streamline administrative procedures to make it easier for investors to rapidly carry out projects and effectively operate in the locality.

Covering over 11,000 square kilometres, Thanh Hoa has advantages in transport, infrastructure facilities, geographic position and natural resources.

It boasts five industrial parks and the Nghi Son economic zone (EZ) – one of the five key economic areas of the country which focuses on heavy industry, basic industry and the Nghi Son seaport.

Spanning 18,000 hectares, Nghi Son EZ is now home to 134 projects, including 124 domestic projects. The majority of projects are operating effectively, contributing to local economic development and creating jobs for thousands of local residents.

The zone also houses the Nghi Son Oil Refinery and Petrochemical Complex (NSRP), the largest of its kind in Southeast Asia and the biggest foreign direct investment (FDI) project in Vietnam with a capital investment of more than 9 billion USD.

Thanh Hoa is concentrating on building the Lam Son-Sao Vang Hi-tech Industrial Park with a total area of 6,000 hectares, which is expected to become the province’s major economic area in the future.

The locality has recently ranked among the top ten in the provincial international economic integration index, the provincial competitiveness index, and the Vietnam Provincial Governance and Public Administration Performance Index, evidence of its promising progress towards favourable investment conditions.

In 2014 alone, the province granted licences for 152 new projects, including 10 FDI projects, with a combined registered capital of 27 trillion VND (1.27 million USD), 2.5 times that of the previous year. Seven FDI projects also increased their capital by 107.6 million USD.

Northern Power Corporation reports good growth

The Northern Power Corporation under the Electricity of Vietnam (EVN) group achieved an average annual electricity output rise of 16 percent in the last five years, the highest rate among EVN power distribution companies.

Its yearly revenue grew by more than 8.5 trillion VND (391.7 million USD) with an average annual net profit reaching over 300 billion VND (13.8 million USD).

In the period, electricity prices increased around 123.4 VND per kWh each year, while the loss rate during transmission and distribution reduced from 8.96 percent in 2010 to 7.4 percent in 2014.

The Corporation also launched a number of major projects including the Phu Binh Transformer Station and electricity supply projects for Samsung Vietnam and the Ta Loong industrial park in Lao Cai and Vung Ang industrial park in Ha Tinh.

Contributing to advancing local living standards, the EVN chapter has thus far made electricity available for 4.5 million households living in rural areas.

Vietnamese bananas enter Japanese market

Vietnam recently exported 22 tonnes of bananas to Tokyo, Japan.

This is the first batch shipped under a contract between the U&I Agriculture Corporation (Unifarm) and its Japanese partner.

The bananas were grown at the An Thai hi-tech agricultural park across more than 411 hectares of land in southern Binh Duong province.

The park is expected to become a modern, productive and high-quality agricultural community applying advanced technologies transferred to farmers under contracts with Unifarm. The company intends to replicate the model across Vietnam.-

Fruit, vegetable exports grow in first five months

The country's fruit and vegetable exports reached US$629 million in the first five months of this year, soaring 17.8 per cent in turnover compared to the same period last year.

The country exported nearly 900,000 tonnes of fruit in the past five months, with dragon fruit taking the lead with 350,000 tonnes, followed by watermelons (250,000 tonnes), longans (110,000 tonnes) and bananas (30,000 tonnes).

Vietnamese fruit and vegetables are exported to over 40 countries and territories.

The ten leading markets are mainland China, Japan, the US, Russia, Taiwan, South Korea, Indonesia, Netherlands, Thailand and Singapore.

The country's exports have enjoyed strong growth in the past five years, with an average rate of 26.5 per cent a year, from $439 million in 2009 to $1.49 billion in 2014.

However, fruit exports to high-value markets such as Japan, the EU, the US and Australia remain low.

Exports to China, the country's key market, are mainly through unofficial channels. Chinese partners often have provincial border-gate trade policies along with unstable trading, which leads to unusual risks to Viet Nam's exports.

Dinh Van Huong, chairman of the Viet Nam Fruit and Vegetables Association, told Thoi bao kinh te Viet Nam (Viet Nam Economic Times) that Vietnamese fruit and vegetables met quality standards, but lacked a recognised brand.

It would be difficult for fruit that do not have registered trademarks, brand names and geographic indications to access markets and shopping centres in foreign countries, he explained.

Products are consumed mainly by overseas Vietnamese or bought by foreign partners who import and pack them using advanced technology, Huong said.

There are over 100 fruit and vegetable processing companies operating on an industrial scale nationwide, and their production capacity is up to 300,000 tonnes per year.

However, a small number of them have licences to export to foreign countries. Enterprises mainly buy fruit from farmers and sell to foreign dealers, and have no strategy to access foreign markets.

Nguyen Xuan Hong, head of the Ministry of Agriculture and Rural Development (MARD)'s Plant Protection Department, said the country lacked experience in opening export markets.

To boost fruit and vegetable exports, Viet Nam needed to make big changes from production to commerce, Hong suggested. In production, the country needed to expand plantations that applied the Good Agriculture Practices (GAP) standards to satisfy choosy markets. Trade promotions and marketing should also be adapted, he added.

Ha Noi to sell water company

The Ha Noi People's Committee has decided to equitise Ha Noi Clean Water Ltd Co No2, according to Dau Tu (Investment) online newspaper.

The firm, an affiliate of Ha Noi Clean Water Ltd Co, has a charter capital of VND568 billion (US$26 million).

An estimated 56.8 million shares at an initial price of VND10,000 each are scheduled to be issued during the first initial public offering (IPO).

The State will hold 96.64 per cent of stakes, while 1.86 per cent of stakes will be sold to the company's employees, and 1.5 per cent of stakes will be sold on the market.

According to the People's Committee's report, Ha Noi will approve business value and equitisation plans for 17 businesses by the end of this month.

BIDV predicts forex market uncertainty in the long term

The foreign exchange market might face uncertainty with relatively increased pressure in the medium and long term, according to a research group of the Bank for Investment and Development of Viet Nam.

The research group forecast that the foreign exchange rate might reach VND21,850 against the dollar by the end of the second quarter, VND40 away down from the ceiling rate, reported vneconomy.vn, adding that no huge fluctuations were expected to occur within this month.

The exchange rate would hardly fall dramatically unless supply of foreign currency supply increased, according to researchers.

The news website reported that from the beginning of June the State Bank of Viet Nam started to sell the dollars and issue treasury bills to ease tensions in the forex market after the dollar rates showed a huge increase last month.

On May 7, the central bank raised inter-bank rate by 1 per cent for the second time this year to VND21,673 per dollar, leaving no room for any adjustment this year as it had earlier committed not to weaken the dong by more than 2 per cent in 2015.

On May 27, the central bank's Deputy Governor Nguyen Thi Hong signalled that the central bank could sell the dollars if necessary, which help calm the forex market.

Yesterday, the dollar buying rate of Vietcombank was VND21,780 and the selling rate was VND21,840.

The research group predicted that the exchange rates would fluctuate around VND21,800 and VND21,820 this month and around VND21,700 and VND21,890 in the third quarter of this year.

According to a market report by BIDV Securities, 1 per cent adjustment of VND/US$ rate in May would help boost exports and improve competitiveness of Vietnamese products.

However, the report said that attention should be paid to changes in the world market, especially the possibility of rate rises by Federal Reserve System (Fed).

In Fed raised rates, the greenback would become stronger which would create pressure on the forex market of Viet Nam.

Although Viet Nam ran a trade surplus in the first few months of this year, the central bank forecast that overall balance of payments would post a surplus for the full year.

Draft circular proposes shift to intra-day trade

The State Securities Commission on Thursday introduced a draft circular to replace an older one on the guidelines of securities trading to collect opinions from market participants.

One of the most important proposals in the draft circular is that investors would be allowed to buy and sell shares in a single company on the same trading day, applicable to the continuous order matching session and shares in the VN30 and HNX30 baskets.

VN30 and HNX30 track the top 30 shares by market value and liquidity on the HCM Stock Exchange and Ha Noi Stock Exchange.

The current Circular 74/2011/TT-BTC, dated June 1, 2011, stipulates investors must use one account for buy/sell orders on a single share listing, but these orders must not be made simultaneously in a matching session.

The draft circular would remove the one-account regulation but would require these trades to be made in the continuous matching session. These trades are also not applicable to odd-lot sales and negotiated transactions.

Eligible shares for intra-day trading include stocks in the VN30 and HNX30 baskets and fund certificates on the stock exchanges.

Under the draft regulation, the number of securities placed for sale must not be higher than that of securities bought, including shares available in the investor's account, shares pending arrival in the account and shares purchased on the same day.

The total value of buys or sells on the trading day for each investor must not surpass the amount specified by the securities company.

In addition, the draft circular also stipulates strict conditions for securities brokers who are permitted to provide intra-day trading services.

Following implementation of the circular, the securities company must have equity capital or charter capital of VND800 billion (US$36.7 million); full appropriate reserves to hedge share declines; and a working capital ratio of at least 220 per cent in the last 12 months and must not have incurred losses in the previous two years.

These companies must also not have undergone any process related to mergers, consolidation or dissolution or have been placed under control, special control status or suspension by a competent authority.

Apart from the regulations related to intra-day trading, the draft circular also forbids issuers from disclosing information on transactions related to their share buy-backs or share sales where the shares do not perform within the registered period or have been traded at prices beyond the permitted trading bands.

At the same time, the new regulation prohibits issuers from revealing the expected buying/selling prices when making these trades.

On the same day, the State Securities Commission also posted a new draft regulation that will shorten the payment period from three days (T+3) to two days (T+2) for public opinion collection.

Study to be held on railway management control centre

Cisco and the Management Authority for Urban Railways (MAUR) signed an agreement on Thursday to conduct a feasibility study for an Integrated Telecommunications Control Centre for HCM City Urban Railways.

The study, with funding of US$1.5 million, is being undertaken through a grant from the US Trade and Development Agency.

The study will focus on communications technologies for the control centre for HCM City's metro rail system.

The project starts in June and is expected to be completed in November, and aims to establish a strategic ICT plan, which MAUR will use to build a telecommunications control system.

The plan's aim is to improve operational efficiency and management, and provide seamless operation and connectivity with other public transportation systems such as buses, taxis and waterway transport.

Cisco will provide consultancy services, ICT recommendations and technical standards, and will submit an implementation proposal to help realise MAUR's vision for Ho Chi Minh Urban Railways.

Cyber criminals change tactics to lure unsuspecting companies

Cyber criminals have changed their tactics to deceive companies and digitally extort consumers, according to Symantec's Internet Security Threat Report (ISTR), Volume 20.

"We are seeing a dramatic shift in the mode of attacks. Attackers have tricked companies into infecting themselves through Trojanised software updates, hiding their malware inside software updates of programmes used by target organisations. This enables cyber criminals to gain full access to corporate networks without the need to even make any forced entry," said Ong Jonghan, Country Director for Vietnam Symantec.

"Viet Nam climbed up the global threat rankings from 11 in 2013 to 9 last year among countries globally on internet security threat activities. This is a clear indication that cyber criminals have not slowed down but are constantly innovating and enhancing their modes of attacks. With the growing population of internet users, there is a critical need to increase more awareness around cybersecurity among businesses and consumers in Viet Nam," Ong added.

Tuna value likely to drop in Q2

Viet Nam would continue to decrease tuna's export value in the second quarter of this year, partly due to its falling price on the world market, the Viet Nam Association of Seafood Exporters and Producers (VASEP) forecast.

According to the association, the export value of tuna is expected to see a year-on-year reduction of 5 per cent to US$123 million in the second quarter.

The decline can be partly because of a drop in tuna price on the world market to under $1,000 per tonne, while the global output of tuna is expected to increase, the association said.

The other reasons for the decline include the weak Yen and Euro against the US dollar and a lower demand for tuna in Viet Nam's major export markets, Viet Nam Trade Promotion Agency reported.

In the first four months of this year, Japan, one of the top three tuna export markets of Viet Nam, dropped to the fourth place, after the US, the European Union, and the ASEAN market, because the export value of Vietnamese tuna to Japan dropped 38 per cent compared with the same period of last year.

However, the tuna exports from Viet Nam to the US recorded a year-on-year increase of 3 per cent to $58 million in the first four months, the association said.

The association expects that the tuna exports to the US will continue to increase in coming months to recover the national tuna export value for this whole year. The US market holds 40 per cent of Viet Nam's total tuna export volume, the Thoi bao Kinh te Viet Nam (Viet Nam Economic Times) newspaper reported.

The VASEP also believes that Russia will emerge as one of Viet Nam's potential tuna export markets in future, as the free trade agreement signed between Viet Nam and the Eurasian Economic Union (EEU) on May 29 will create favourable conditions for Vietnamese fisheries exports to Russia, including tuna, to jump sharply.

Over the past few years, Russia has been one of the major export markets of Vietnamese fisheries, the association pointed out.

Tran Thanh Hai, deputy head of the Export Import Department under the Ministry of Industry and Trade, noted that three sectors - fisheries, garment and footwear - can gain many advantages from the free trade agreement with EEU as it has zero import tariffs.

According to the General Department of Customs, the export value of Vietnamese tuna to Russia had a year-on-year surge of 218.4 per cent to $1.65 million in the first four months of this year.

Meanwhile, the World Trade Centre's statistics show that Viet Nam was the third largest tuna exporter to Russia in the first quarter of this year, after Thailand and China.

Viet Nam aims to boost consumption of biofuel

Deputy Prime Minister Hoang Trung Hai ordered preparations to be made to boost the distribution and consumption of biofuel E5 RON 92 nationwide.

The minister was speaking at a meeting on Tuesday to review the results achieved in the first half of this year.

Statistics revealed at the meeting showed that the consumption of biofuel E5 remained modest and far below expectations. It is estimated to account for some 3 per cent of petrol retail sales.

According to the Ministry of Industry and Trade's report, biofuel E5 was put on sale in eight provinces and cities across the country: Quang Ngai, Da Nang, Ha Noi, HCM City, Hai Phong, Ba Ria-Vung Tau, Can Tho and Quang Nam. More than 87,087 tonnes were sold in the first four months of this year.

Deputy Director of Ha Noi Department of Industry and Trade Tran Thi Lan Phuong pointed out that consumers were still hesitant to use biofuel E5 due to the lack of knowledge about its features and benefits.

Meanwhile, low consumption discouraged petrol traders from investing in the distribution of biofuel E5 as the investment and transportation costs could be high.

At the meeting, Hai asked biofuel E5 wholesalers to strictly follow the roadmap for biofuel E5 distribution raised in Decision No 53/2012/QD-TTg.

Hai said raising awareness among consumers about biofuel E5 was also an important job along with raising the appropriate technical standards for biofuel.

Local authorities should closely co-operate with petrol wholesalers in producing and distributing biofuel E5 to prevent a shortage in the retail market.

Central Quang Ngai Province sold biofuel E5 from July last year, becoming the first province in the country to sell biofuel E5, with most of its retail petrol stations participating in selling the fuel.

Some 70 per cent of stations in Da Nang now sell biofuel E5, while percentages in Ba Ria-Vung Tau, Ha Noi, Can Tho and Hai Phong were 24, 20.4, 16.4 and 7, respectively.

Other provinces and cities were gearing up to push E5 RON 92 into the market, and the biofuel was expected to be widely used throughout the country from this December.

Limit eased for farm loans

A new decree has raised the limits for agricultural and rural development loans, excluding mortgages.

Decree No55/2015/ND-CP, issued this week and going into effect on July 25, states that banks can lend up to VND3 billion (US$142,850) to a union of co-operatives dealing in aquaculture or offshore seafood exploitation.

A household involved in a seafood cottage industry can borrow up to VND2 billion ($95,240), while a household or an individual growing industrial crops or perennial fruit trees can seek loans amounting to VND200 million ($9,520).

A household or individual involved in agricultural production and related business activities can secure loans worth VND50 million to VND100 million ($2,380 to $4,760).

An old decree, which has been valid since 2010, stipulated banks' lending caps of VND500 million ($23,800) for agricultural co-operatives and farm owners and VND200 million for households dealing in farming services.

It also fixed a maximum lending amount of VND50 million for individuals or households associated with agriculture, forestry, pisciculture and salt production.

VnExpress online said the changes were based on the State Bank of Viet Nam's (SBV's) suggestions, which were aimed at easing rural credit, and the fact that costs in some of these cottage industries had prompted significant demand for capital.

Reports before the National Assembly stated yesterday that agricultural and rural credit amounted to some VND798 trillion ($38 billion) nationwide at the end of May, an increase of 7.2 per cent over last year-end. The loans for this prioritised sector represented 19.3 per cent of all loans in the country.

According to the SBV, the overall credit growth of the domestic banking system this year reached 4.8 per cent as of May 28, significantly higher than the 1.3 per cent recorded during the same period last year.

HCM City to host support industry expos

Three exhibitions related to the support industry, Metalex Vietnam, Vietnam Electronics Assembly and the Business Alliance for Support Industry in HCM City, will be held at a single venue in HCM City in October, the organisers announced yesterday in HCM City.

Organised by the Japan External Trade Organisation (JETRO) in HCM City and the HCM City Investment and Trade Promotion Centre, "The Business Alliance for Support Industry in HCM City" will enable local parts manufacturers to contact Japanese buyers of parts and components.

Two other exhibitions, Metalex Vietnam, an international exhibition on machine tools and metalworking solution for production upgrade, and Vietnam Electronics Assembly, an international machinery expo for electronic parts and components manufacturing, will be hosted by Thailand's Reed Tradex Co.

Metalex Vietnam, the biggest of its kind in the country, will open doors for Vietnamese industry to enhance product quality and productivity, as well as improve production lines with new machine tools, metalworking technologies, and solutions provided by 500 brands from 25 countries.

To be organised at the Saigon Exhibition and Convention Centre from October 8-10, the three expos will help boost the development of Viet Nam's support industries, said Duangdej Yuaikwarmdee, deputy managing director and general manager of Reed Tradex Co, Ltd in Viet Nam.

Electronic component markers to move to Vietnam in 2-3 years: event organizer

Foreign electronic part manufacturers will head for Vietnam in the next two to three years as a result of a switch made by giant firms from many countries around the globe, an expert said this week on the sidelines of a press conference to introduce coming support industry exhibitions.

Big names like Samsung, LG, Microsoft, and Intel have already picked Vietnam as their production bases for the near future, and relocated their technologies and equipment elsewhere, such as China, Malaysia, Thailand, and Costa Rica, to the Southeast Asian country, according to Duangdej Yuaikwarmdee, deputy managing director of Thailand-based Reed Tradex that specializes in organizing industrial exhibitions and conventions.

The remark was delivered at the press conference in Ho Chi Minh City on Thursday to introduce three international exhibitions on support industries that will be organized in the city this October.

It will need around two to three years for other international electronic component manufacturers to follow the footstep of the big brands and set up their production facilities in Vietnam to supply parts to electronics makers, said Yuaikwarmdee, who is also the general manager of Reed Tradex in the country.

The move will include the establishment of new facilities or the relocation of bases from other regional countries to the Southeast Asian nation, he added.

Many electronics manufacturers may come to Vietnam due to the advantage of low labor costs, but they will only stay if they see that they can buy almost all of what they need locally, he said.

Among the three major regional countries – Vietnam, Thailand, and Malaysia – where many international electronics manufacturers have established their production bases in recent years, Vietnam has relatively cheaper labor costs, the Reed Tradex executive commented.

Another advantage of Vietnam is its position, as the country neighbors China, which is currently the world’s biggest electronic part maker.

LG Electronics Inc., the world's second largest television maker, in March said it would shift its TV production in Thailand to Vietnam this year for efficiency, logistics, and costs, as it would take much shorter time for the firm to import parts from China into Vietnam, instead of into Thailand, for assembling.

Vietnam is now the mobile phone powerhouse of Southeast Asia, Yuaikwarmdee said.

Also at the event, a Japan Foreign Trade Promotion Organization (JETRO) representative said support industries in Vietnam have been lately improved, as reflected by the significantly increased ratio of domestic supply for Japanese firms.

Hirotaka Yasuzumi, managing director of the JETRO office in Ho Chi Minh City, said that the latest survey by his organization showed the domestic supply rate in Vietnam has improved, rising from 22 percent four years ago to 32 percent in 2014.

However, the improvement is mainly based on foreign businesses investing in Vietnam, while the contribution of domestic enterprises is still relatively small, Yasuzumi said.

In the same period, the rate was still higher in Vietnam though other Southeast Asian countries posted insignificant growth or even a slight decline in comparison with that of the previous years, he said.

Second Online Friday to take place in December

The second online shopping day--Online Friday--will be held on December 5 by the Ministry of Industry and Trade and the Vietnam E-Commerce Association.

It is expected to receive 2,500 businesses and reach one million transactions with a total goods and service value of US$25 million.

This year, the program will focus on three main attendee groups including product and service sellers, banks and transport firms.

The first Online Friday took place last year bringing VND154 billion (US$7.07 million) with a total of 160,055 orders.

VAMC wants more power to deal with bad debts

Heads of Vietnam Asset Management Company (VAMC) said they need more power instead of more money to deal with bank bad debt, because the legal framework is inadequate.

"Even if we are given more fund, we would not be able to completely deal with all the bad debts," said Nguyen Quoc Hung, chairman of the VAMC.

Hung said there are legal obstacles were preventing the VMAC from doing its job; even after buying bad debt, there was nowhere to dispose of it because Vietnam does not have the proper markets.

"There are 50 to 60 foreign investors interested in (buying the bad debt), but when they ask how, we we can't give them answers," he said.

Hung said the VAMC needs more power, including to seize collateral assets, enforcement, selling assets, and to go after borrowers who do not repay their loans.

Bad debts at credit facilities amounted to VND309trn as of December, 2014. The VAMC has so far bought more than VND133trn of bad debt, but has resold just VND2trn.

Pham Ngoc Long, head of the Science Institute for Small and Medium Enterprises, said 80 percent of bad debt was held by state enterprises which failed in non-core investments. Long said the bad debt classification method was inadequate and regulations incomplete, leading to conflicting and impractical rules.

The State Bank of Vietnam established the VAMC in 2013 to purchase bad debt from financial institutions, provide debt restructuring and guarantee continued operations of enterprises, organisations and individuals through guaranteed loans.

13 additional investment projects come to Tra Vinh

The Mekong Delta province of Tra Vinh has attracted 13 domestic and foreign projects to Long Duc Industrial Park and other economic zones with registered investment of 25.6 trillion VND (over 1.17 billion USD) so far this year.

According to the Centre for Investment Promotion and Business Support under the provincial Department of Investment and Planning, a highlight is a 120 million USD wind-power plant project by the Republic of Korea (RoK). Other projects will produce clothing, footwear, seafood, agricultural products and automotive electronics for export.

The locality has adopted various investment incentives to improve the local business environment, such as a 30-100 percent reduction in business registration fees, reductions on land rent rates and fees paid for the use of infrastructure, and 2-7 years of corporate income tax exemptions plus a 50 percent reduction of income tax in the next 6-7 years.

Firms with over 500 permanent employees will be financially supported in staff training.

Thanks to its efforts, the province has been home to about 150 investment projects, including 30 foreign ones with a total investment of 303 million USD.

Quang Binh allocates 1.8 mln USD to boost industry

The central province of Quang Binh issued Decision No.1490/QD-UBND on June 10 regarding a programme to stimulate the local industry by 2020 with estimated spending of 40 billion VND (1.83 million USD).

The sum includes 30 billion VND (1.4 million USD) from the provincial budget and the remaining will come from the national industry boosting programme.

The provincial programme focuses on offering vocational training to more than 3,000 local workers and improving vocational and management capability for another 500 workers, alongside building 16 technology demonstration models which introduce advanced technology and new products.

Additionally, it provides financial support for industrial businesses and helps them attend domestic and overseas trade fairs to promote their products.

The locality is also drawing up detailed plans to develop local industrial clusters and economic zones and invest in infrastructure development.

A highlight of the programme is support provided to about 130 industrial businesses in rural areas to expand their business and transfer advanced technology to improve production.

The spending is part of provincial efforts to boost industry and handicrafts sectors towards sustainable development in a bid to enhance competitiveness and contribute to economic restructuring.

Businesses await opportunities to resume operations

The number of businesses halting operations declined 5.3 percent to 22,700 in the first five months of this year, with many waiting for opportunities to return the market, said Deputy Minister of Planning and Investment Dang Huy Dong.

Poorly-performing and less-competitive enterprises are likely to cease operations, dissolve or go bankrupt. This, to some extent, will help constantly restructure the economy, purify the business environment and create a basic foundation to increase national competitiveness and sustainable development, he said.

From January-May, the country had about 36,000 start-up businesses with total registered capital of nearly 220 trillion VND (10.1 billion USD), up 15.5 percent in volume and 26.3 percent in capital over the same period last year. Close to 7,404 enterprises resumed operations in the first five months of this year, a year-on-year increase of 5.9 percent.

Compared to countries in the region and the world, the number of Vietnamese firms withdrawing from the market is within normal range and not concerning, Dong said, adding that looking at the flow of businesses joining and withdrawing from the market will offer a more comprehensive evaluation of the business panorama.

According to 2011 statistics from the European Council, the number of businesses leaving the market exceeded that of start-up businesses and the ratio of active firms after five years was 46 percent. Meanwhile, in Vietnam, about 550,000 or 66 percent of the 830,000 start-up businesses remain active.

The Deputy Minister said the market economy only nurtures healthy and creative initiatives, which is an objective rule.

Business registration and tax agencies have been working together to exchange information and closely monitor business activities and the State management agencies will continue to facilitate business expansion, he added.

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