Online Friday starts Sept. 29 and has 24 hours of deals

It's confirmed: Online Friday will again host a 24 hour sales event on Sept. 29—and the 2017 edition of this autumn major sales event promises to be bigger than ever, says the Ministry of Industry and Trade.

The Ministry says more than 100,000 new deals will be posted as frequently as every five minutes throughout the event, and sales will take place throughout the Southeast Asian country.

The Ministry is keeping a tight lip as to the details regarding specific kinds of deals that will be available during this year's event— but consumers can keep up to date as it unfolds at http://info.onlinefriday.vn/.

To drum up even more interest, the Ministry says name brand companies the likes of Nguyen Kim, Sunhouse, MediaMart, Adayroi, Fahasa, Giovanni, FPT Shop and Sendo will be offering special deals that consumers won’t want to miss.

In Vietnam, Facebook is a marketplace for cheap fakes and endangered wildlife parts

Copycats, ivory and tiger paws are just some of the things you can buy on the country’s most popular social network.

Xuan is pretty honest with her customers, but as a salesperson, she has to sugarcoat it a bit.

“These are super fakes,” she said in a Facebook post advertising bags carrying various luxury brands from Hermes to Louis Vuitton and Prada.

“They are class 1 copycats and thus the material and the sewing are of very high quality,” the post said.

Xuan has been trading these bags for six years and is a supplier for many shops across Vietnam.

She said Facebook has become an important tool for her to connect with partners and customers, thereby increasing her earnings.

A recent survey by Vietnam E-Commerce Association found social networks are the most used advertisement channel and one of the most effective. In Vietnam, Facebook is the most popular social network with around 64 million users, accounting for 3 percent of global Facebookers.

But these places are also where trade authorities have little control.

Tax evasion aside, there are also big problems with legitimacy.

Facebook in Vietnam is where a Vertu-branded phone is available for just a couple hundred dollars, and also where you can find rampant wildlife trade activities.

Ivory, pangolin scales and tiger skin are advertised as if the country has no protection for the endandgered animals.

A Facebook user named Tuan advertises tiger parts on different pages, saying that “I only provide fine and unique products, and I can accommodate large demands as well.”

Although the act of offering to sell fake and banned products is subject to criminal punishment, there have been few reports of these retailers being arrested.

In April, Facebook pledged to cooperate with the Vietnamese government to block “bad” and “toxic” content on the site, to help build a safe and healthy internet environment in Vietnam.

It's not clear what specific intervention the partnership would bring to protect users in Vietnam, against illegal trade for example.

SME development in Vietnam

Small and medium-sized enterprises play a crucial role in Vietnam’s economic growth.

The ongoing 2017 APEC Small and Medium Enterprises Ministering Meeting in Ho Chi Minh City creates an opportunity for Vietnamese SMEs to share experience with their partners in the region and for the Vietnamese government to fine-tune SME support policies.

Small and medium-sized enterprises comprise 98% of Vietnam’s total enterprises, contribute 40% of the GDP and 30% of the state budget, and generate half of all jobs. But SMEs have difficulties modernizing their equipment and facilities, finding new markets, and distributing their products.

At the 2017 APEC Small and Medium Enterprises’ Meeting, managers, economies and speakers from APEC member economies urged SMEs to work out a strategic direction for their development path. 

Tran Van Phat, the CEO of the Robot Company said“Vietnamese enterprises need to participate more in economic forums. We need to prepare for the intrusion of foreign economies and expand economic relations to seize opportunities to enhance our growth.”

Many countries including Vietnam are urging their SMEs to participate in global logistics supply chains because this sector is of great importance to international trade. 

Tran Chi Dung, Director of the Logistics Knowledge Company, says the logistics industry creates learning opportunities for Vietnamese SMEs who are participating in global value chains. Vietnam has launched a National Action Program on Logistics Development to help improve the competitiveness and growth of enterprises and the economy. 

Mr. Dung said “We need to help enterprises understand and approach the program. The State needs to adopt new policies and allocate budgets to carry out promotion activities to attract enterprises.”

The Law on Supporting Small and Medium Enterprises which will take effect next year realizes Vietnam’s policies on promoting the private sector and creating momentum for small and medium enterprises. 

At a recent conference on SME development, Prime Minister Nguyen Xuan Phuc pointed out the barriers to enterprise development.

 “There remain many obstacles to Vietnamese penetrating the market. Regulations for enterprises in high-tech, science, technology, and support industries have not been fully enforced. The government welcomes your contributions to developing mechanisms and policies to ensure fairness for both public and private sectors in line with international norms,” PM Phuc noted. 

The Prime Minister also mentioned the difficulties SMEs have in accessing credit, information, and market support and promised to create a fair, friendly environment to promote investment and ensure regulation enforcement. 

He said “The government will review regulations and take steps to reduce costs in tax procedures, customs, BOT, logistics, and public services. These costs are burdens on enterprises.”

In the near future, the Vietnamese government intends to improve the competitiveness of Vietnamese SMEs by optimizing advances of the 4th industrial revolution, strengthening the digital infrastructure, and developing high-end human resources.

Vietnam, EU work to ratify free trade deal

The EU-Vietnam Free Trade Agreement (EVFTA) is under final legal review to be ratified early next year. Both sides are gearing up to settle differences to effectuate the deal whose negotiations concluded in December, 2015.

Officials and business leaders from Vietnam and the EU at a workshop on bilateral free trade agreement in Brussels, Belgium, on September 7, 2017.

Vietnam and the European Union (EU) signed a statement on the official conclusion of their free trade talks in late 2015. 

Their Framework Agreement on Comprehensive Partnership and Cooperation has already taken effect.

Since the conclusion of EU-Vietnam FTA, the business climate in Vietnam has improved significantly with the reform of investment law and simplified administrative procedures. 

Vietnam has amended its Labor Code to match its FTA commitments. The amendments consulted by international organizations, businesses, and independent experts will be submitted to the National Assembly for approval next year.  

Vietnam is set to ratify 3 conventions of the International Labor Organization (ILO) on eliminating coerced labor and on collective bargaining agreements. 

Minister of Labor, Invalids, and Social Affairs Dao Ngoc Dung said, “Vietnam gives top priority to completing legal ground towards ratifying the free trade agreement with the EU. Vietnam will work closely with EU and flexibly settle arising problems. As a member of the ILO, Vietnam pledges to strictly and effectively implement its commitments. Vietnam has ratified 5 out of the 8 core ILO conventions and plans to ratify the remaining 3 conventions.”

EU chief negotiator Mauro Petriccione said both sides have achieved major progress and that it’s now important to reach the finish line smoothly.

He said, “We are trying to make the EU-Vietnam Free Trade Agreement come into effect next year at the earliest. This is a high-quality deal and one of the pillars of Europe’s trade policy for Asia. We are in the process of preparing legal dossiers with Vietnam and translating them into European languages for the consideration of the European Council and Parliament. We are doing our utmost to have our arguments heard and the process approved as soon as possible.”

Jean Jacques Bouflet, a member of the European Chamber of Commerce (Eurocham)’s Executive Committee in Vietnam said Eurocham supports Vietnam’s goodwill in modernizing administrative procedures to create favorable conditions for investors. 

He added that once coming into force, the EU-Vietnam FTA will become an effective tool to protect businesses’ operation in each other’s country. 

Bernd Lange, Chairman of the European Parliament’s Committee on International Trade, said, “Thanks a lot for this timeline as the first time we get to send. Now the new timeline is brought back to my colleagues. I'm convinced that we will have a continuous dialogue. And thanks a lot also for the explanation of outer content of the provision of Labor Code. Let's stay in contact and hopefully we'll get a successful solution so that our process is not harmed.”

Nguyen Hoang Long, Director of the Department of Foreign Affairs of Localities at the Ministry of Foreign Affairs, said, “We have worked with the European Parliament and Commissioners in charge of cooperation with Vietnam and they have reiterated their support for the deal. They are convinced by the support from European firms and citizens who are living, working, and doing successful business in Vietnam. I hope that with stronger government activities and exchanges, the EU-Vietnam FTA will soon be ratified and implemented, living up to both sides’ expectations.”

Private enterprises a major employer

Private enterprises in Vietnam employ nearly 14 million people, accounting for 64 per cent of salaried workers and more than 35 per cent of employed workers, according to figures from the business community released at a seminar entitled “The Development Trends of Labor in Types of Enterprises in Vietnam” held on September 14 in Hanoi.

Scientists, managers, and trade union experts shared research results in four areas: the development of types of enterprises, labor and wages in types of enterprises, the development of industrial zones and housing for workers, and forecasts in labor supply and demand in types of enterprises to 2030.

Mr. Tran Van Thuat, Deputy President of the Vietnam General Confederation of Labor (VGCL), told the seminar that the importance of private enterprise development in the country is increasingly noted by the government, to constantly improve economic competitiveness, create more jobs, and increase incomes.

According to research from the Institute for Workers and Trade Unions, based on 2,550 questionnaires completed by workers at 64 enterprises in 14 cities and provinces during March and April, actual wages in the first quarter increased 8.1 per cent, higher than the increase in the minimum wage, which averaged 7.3 per cent.

The research also showed that 22.7 per cent are satisfied with their wage, 52.4 per cent are neutral, and 24.9 per cent are not satisfied. “For employees, increases to the minimum wage did not meet their expectations,” said Mr. Vu Quang Tho, Head of the Institute for Workers and Trade Unions.

Dr. Tran Thi Minh Phuong from the University of Labor and Social Affairs (ULSA), said appropriate wage and incentive policies at private enterprises would promote labor productivity. “Low pay that is not based on productivity can lead to conflict between employees and employers, affecting the interests of parties within the economy,” she said.

The Institute proposed that the government direct the implementation of economic development policies, create more jobs, and overcome inadequacies between training and employment. Ms. Phuong said that adjustments to wage policy by the government and enterprises must consider the interests of employees. “This would motivate employees, contributing to productivity growth,” she said.

Traveloka signs MoUs with Da Nang and Hue

Traveloka, one of the leading online tourism platforms in Southeast Asia, announced it will cooperate with the Da Nang Tourism Promotion Center and the Thua Thien Hue Department of Tourism under memoranda of understanding (MoU) signed on September 13 and 14.

The two local authorities will act as a supporting media sponsor for all programs from Traveloka on every promotion channel and advise it on how to promote travel destinations as well as introduce the local travel community to join in promotional videos about the city and province.

Traveloka, meanwhile, will act to enhance the reputation and promote the local image of the city and province through online marketing activities.

The two MoUs will help push the local travel industry to new heights, sharing sources of travel information and suggestions on top locations from Traveloka Vietnam, and enhance the two local travel industries. The moves also express the interest and needs of Traveloka Vietnam in cooperating with local cities and provinces that have great potential in tourism, working together in order to bring the best services to customers.

“Through the agreements with Da Nang and Thua Thien Hue, Traveloka Vietnam agrees to increase links between promotional programs for accommodation in Da Nang and Hue,” Ms. Le Thi Thanh Van, Traveloka Vietnam Country Manager, told the signing ceremonies.

She added that the good relationships with the two tourism authorities will help local businesses to thrive, increasing the number of tourists visiting Da Nang and Thua Thien Hue and booking rates on the Traveloka platform.

Praised as one of the most desirable cities in Vietnam to live, Da Nang is also a major tourist destination. According to a report from the Da Nang Department of Tourism, in the first half of this year the total number of visitors was estimated at 3.3 million, an increase of 33.2 per cent year-on-year and representing 51.3 per cent of the annual target.

Travel services in Thua Thien Hue have improved in terms of quality. It welcomed 1.7 million visitors in the first half of the year, up 1.9 per cent year-on-year, with revenue estimated at $76.3 million.

Traveloka Vietnam is a leading flight and hotel booking platform in Southeast Asia. It is currently working with more than 100 airlines, providing information on more than 200,000 routes across Asia-Pacific and Europe, and 300,000 hotels in 28 countries, to deliver customers the best deals.

It provides more than 40 payment options for customers in Indonesia, Thailand, Vietnam, Malaysia, Singapore and the Philippines, with 24/7 assistance from local customer service centers. Its mobile app has been downloaded more than 20 million times, making it the most popular travel booking app in the region.

Green buildings key in addressing climate change

Ho Chi Minh City is considered Vietnam’s key economic area and its most important real estate market, which is also the field predicted to be most affected by climate change in the country. As a result, green buildings have been mooted as an essential and safe solution for the city’s infrastructure development orientation in particular and for Vietnam in general, the “Green Buildings Development in the Context of Climate Change in Vietnam” workshop held in Ho Chi Minh City a few days ago heard.

The workshop was part of the implementation of the five-year operation plan (2017-2022) for the “Sustainable Green Buildings Development Program”, with the aim of attracting businesses in the real estate sector to develop green buildings nationwide and contribute to establishing a foundation for a green real estate market in the country.

In his opening remarks, Mr. Nguyen Tran Nam, Chairman of the Vietnam Real Estate Association (VNREA), said “according to the latest United Nation’s report, 90 per cent of climate change is caused by humans and the remainder from natural causes, so our actions will play a decisive role in the fight against climate change.”

As a result, “this seminar is an effort to support sound policies from the government on climate change response, green growth, and green building development, together with the desire to promote green building development and raise public awareness about the benefits of green buildings,” he added.

VNREA has set up a Program Coordination Committee with 23 members, including managers, scientists, experts on green buildings, and leaders from major real estate firms. It has also set up an action plan for the next five years with the aim of contributing to the foundation of a green property market in Vietnam.

At its launch in late May, the program received enthusiastic support from and the participation of the real estate community, which featured commitments from dozens of leading developers in Vietnam. At the same time, it received a pledge of more than $1 million and other technical support commitments.

The Green Building Development in the Context of Climate Change in Vietnam workshop was an opportunity to introduce the program and broad communications on “green” criteria to promote the responsibility of people and investors regarding the environment and sustainable development towards a “green” life. At the same time, the program calls for investors to send proposals to the government and relevant agencies to set out criteria and incentives for developers to build green buildings.

Fruit and vegetable imports push Vietnam in deeper trade deficit with Thailand

While Vietnam’s trade deficit with major economies is the result of large imports of inputs for production, the country’s trade gap with Thailand comes mainly from importing fruit and vegetables, many of which Vietnam can produce.

According to the Ministry of Industry and Trade, Vietnam posted a trade deficit of US$2.13 billion in the first eight months of 2017, as a result of rising imports of materials and machinery for production from China, the Republic of Korea and the United States. However, part of the trade deficit was contributed to by the import of fruit and vegetables that Vietnam could produce at home.

Take Thailand for example. For years, Vietnam has always run a trade deficit with its largest trading partner in ASEAN. In the eight months through August, Vietnam exported US$3.06 billion worth of goods to Thailand while importing US$6.5 billion. Thailand has now surpassed Japan to become the fourth largest exporter to Vietnam. Vietnam’s main imports from Thailand are consumer electronics, cars and car parts, petroleum products, chemicals, fruit and vegetables.

What is worrying is the fact that Vietnam is importing a massive amount of fruit and vegetables from Thailand, accounting for about 60% of Vietnam’s total fruit and vegetable imports, of which many could be produced domestically, said Le Quoc Phuong, deputy head of the MOIT’s Industry and Trade Information Centre.

He explained that compared with their Vietnamese counterparts, Thailand’s fruit and vegetables are better in quality and lower in prices. In addition, Thailand’s fruit and vegetables and Thai goods in general are bolstered by a strong retail network in Vietnam such as BigC and Metro, all of which are owned by Thai firms. In addition, Thai enterprises have held numerous trade fairs to promote Thai goods even to traditional markets, making Thai fruit and vegetables present in almost all markets near residential areas in Vietnam, Phuong added.

As Thai fruit and vegetables have quickly won Vietnamese consumers’ favour, Vietnamese enterprises have increased imports from this country with advantages in terms of geographical proximity, quality and prices.

Besides fruit for personal consumption, Vietnam has also increased the importing of Thai fruit to process and then export to other countries, especially the longan and durian, helping to raise overall fruit and vegetable imports from this market.

According to the roadmap of the ASEAN Trade in Goods Agreement, car import tariffs from ASEAN countries will drop to 30% in 2017 and 0% in 2018. Therefore it is projected that Vietnam’s car imports from Thailand will increase and the Southeast Asian country will continue to be the largest provider of completely constructed cars for Vietnam, creating even more pressure on Vietnam’s trade deficit with Thailand.

At the same time, tariff cut pledges within the ASEAN Economic Community will give an advantage to Thailand’s fruit and vegetables. However it is impossible to restrict Thai imports in a short time due to the fact that Vietnam’s fruit and vegetables are not competitive enough. Therefore, Vietnam’s trade deficit with Thailand is forecasted to reach US$6-7 billion, higher than last year’s US$5.2 billion.

Phuong said that in regards to modern trade, the import of fruit and vegetables is nothing unusual, but it would be abnormal if Vietnam imports too much of the goods that could be entirely produced at home and this requires the attention of regulators.

However, restricting imports with a ban is out of the question. The only solution is to enhance the competitiveness of Vietnamese goods in terms of both quality and price. Fruit and vegetables must be produced in a safe and clean process. At the same time, trade promotion strategies need to be changed so that Vietnamese goods become better known in the Thai market, thereby increasing exports and reducing the pressure on the trade deficit.

Vietnam’s car dream re-ignited as Vingroup builds manufacturing plant

The giant Vietnamese property developer Vingroup has announced plans to produce its first cars in the next two years, rekindling the long-cherished dream of a local car industry which has failed to come true following numerous attempts over the past two decades.

As one of the largest private companies in Vietnam, Vingroup began its existence as a property developer and has gradually branched out into other areas, from education and healthcare to entertainment, retail and agriculture. And now the firm wants to make its own cars under the brand name VinFast.

VinFast has set its sights on becoming a major manufacturer in Southeast Asia, with an annual capacity of 500,000 vehicles by 2025 and products ranging from diesel cars to electric cars and bikes. In the initial stage, the company expects to produce approximately 100-200,000 units a year. Its first products will be electric bikes, to be rolled out in the next 12 months and then cars one year later.

Vingroup said that it has signed an agreement with Credit Suisse under which the latter will arrange a loan of up to US$800 million for VinFast to carry out its ambitious project.

The firm also announced that the designs for its cars’ engines and main structures will be purchased from leading European and American companies, while the exterior designs will be undertaken by Italian design houses, which have worked on designs for famous car brands such as Audi, Bentley, Ferrari and Porsche.

Notably, Vingroup stated that it has assembled a team comprising experts in the global automotive industry in order to take part in research and production management. VinFast will also forge links with domestic suppliers to develop and manufacture car parts with an aim of reaching a domestic content of 60% and will export its cars to regional countries.

Since the early 1990s the government has determined car manufacturing as a key sector by introducing various tax incentives with the aim of establishing a strong local automotive industry. But after 25 years, car prices in Vietnam remain prohibitively expensive, while the rate of domestic content remains extremely low.

Last year the Ministry of Industry and Trade admitted that Vietnam has totally failed to meet the target of 60% local content in nine-seaters or smaller cars by 2010, as the average rate is only about 7-10%. The highest rate belongs to the Toyota Innova but is only at 37%, far below the requirements.

Meanwhile in Thailand, the domestic content has reached as high as 90% for pick-up trucks and 70% for passenger cars, according to the Southeast Asian country’s Board of Investment.

Prior to Vingroup, another local firm, Vinaxuki, also nurtured a great ambition and invested heavily in manufacturing workshops, with the aim of producing cars with high local content. But the dream was soon shattered in 2015 when Vinaxuki had to sell a factory to pay off its debt and its unfinished cars are now left covered in dust. The company’s failure is attributed to a lack of funds and tax policies, which made it unable to finish its cars and compete with imported products.

The primary reason for the stagnation of the Vietnamese automotive sector and the wide gap between domestic and foreign prices is an unclear and inconsistent strategy. On the one hand, the government wants to prop up the supporting industry to bring down car prices but, on the other hand, high excise tax is levied to discourage car use due to poor infrastructure and environmental concerns.

From 2018 when tariffs on cars that meet 40% ASEAN regional content will be cut to zero, a torrent of cheap cars from countries in Southeast Asia will certainly flood the Vietnamese market, creating even more pressure on the already languishing local automotive industry. This is good news for Vietnamese consumers but could spell the ultimate demise of the local automotive industry as car-makers will simply import completely built cars instead of investing in manufacturing lines.

In a gloomy picture, Vingroup’s recent commencement of a car manufacturing facility in the northern port city of Hai Phong is a silver lining, helping to keep the dream of made-in-Vietnam cars alive.

But enormous challenges are lying ahead as manufacturing cars is an entirely different area from its traditional businesses in the services sector. It is no easy task to make cars as it requires thousands of different parts and a high level of technology.

Furthermore Vingroup will face the challenge of changing the Vietnamese consumers’ strong preference for foreign goods. Recently, BKAV, a Vietnamese technology firm, launched the second generation of its locally produced Bphone smartphone, to little fanfare from Vietnamese consumers. Very few express any interest in buying a Vietnamese-made smartphone and still prefer iPhones or other devices made by foreign companies, which they believe are better value for money.

Nevertheless there is still room for hope as Vingroup has proved to be a leading contender in every area of business in which it has been involved and has become a major brand in the mind of Vietnamese consumers. With an impressive track record, there are grounds to believe that Vingroup’s endeavour in this new business will bring fruitful results, especially as its effort has received the support of the Vietnamese government leader.

Prime Minister Nguyen Xuan Phuc said at the ground-breaking ceremony on September 2 that Vietnam having its own car brand is highly significant for building an independent economy. He added that it would be a miracle if VinFast could roll out its first cars in the next two years.

Vingroup Vice Chairman Nguyen Viet Quang said that engaging in heavy industries is part of its long-term strategy to gradually reduce the proportion of property development. He is confident that consumers will support its locally made cars given its strengths in capital resources, world-leading experts and particularly consumers’ confidence in the premium quality of its products and services in the past few years.

Furthermore, Vietnam’s car market has great potential for growth as the country’s car ownership remains significantly lower than that of regional countries. The Ministry of Industry and Trade has projected that Vietnam’s annual car demand will reach 450 -500,000 units by 2020, 800-900,000 units by 2025 and 1.5-1.8 million by 2030.

If Vingroup could tap into this market and succeed, it could help Vietnam to save an enormous amount of US dollars spent on car imports and truly revive the domestic automotive industry.

‘Viet’, ‘Vietnam’ used for trademark registration abroad

The Government has assigned the Ministry of Science and Technology to license the use of words ‘Viet’ or ‘Vietnam’ for certification and collective trademark registration of Vietnamese products and services abroad, according to recently issued Decree 91.

At first, the ministry should license the Ministry of Agriculture and Rural Development to conduct collective trademark registration of Vietnamese rice abroad.

In addition, the Government has tasked the Ministry of Science and Technology to adjust and supplement regulations on the use of national name and other marks for registering geographical indication and trademarks of products and services at relevant legal documents to submit to competent authority.

HCM City delegation to open trade promotion in Australia and New Zealand

The Investment & Trade Promotion Centre of Ho Chi Minh City (ITPC) in collaboration with the Ho Chi Minh City Tourism Department will jointly organize a delegation "the HCMC trade and tourism investment promotion" to Australia and New Zealand, led by the city leaders. 

As scheduled, the working delegation in the two countries will start on October 23- 31, 2017 with attractive activities as conference on trade, tourism and investment promotion, investigation programs to connect trading between Vietnamese enterprises and potential enterprises of Australia and New Zealand.

Under its target of investment attraction into the city’s key projects, strengthening export and activities on trade, investment and tourism promotion into Australia and New Zealand, the program will give priorities for enterprises having projects in accordance with the policies of Ho Chi Minh City.

Businesses must spend over $629 million on specialized inspections

Businesses must take about 28.6 million working days and VND14,300 billion (US$629.21 million) to implement specialized inspection procedures, according to a Government working group.

The working group has been established to inspect how ministries have conducted specialized inspections on export import goods.

According to the group, 13 ministries have completed only 64 out of 98 assigned tasks so far. It has spotted a slew of limitations and problems in inspection operations of the ministries such as the high ratio of overlapped and conflict regulations.

One commodity is managed by many documents and must undergo specialized inspection procedures by many ministries. The ratio of one commodity undergoing 2-3 specialized inspection procedures approximates 58 percent now.

Inspection and management methods have not accorded with international standards, lengthening cargo customs clearance time. Nearly 100,000 items must experience specialized inspections right at border gates during customs clearance with the ratio of spotted violation being less than 0.1 percent.

That has raised difficulties, inconveniences and costs for businesses. Annually they must pay VND14,300 (US$629.21 million) to implement regulations and procedures on specialized inspections.

Beverage producers object to special consumption tax on carbonated drinks

Domestic beverage enterprises said their production would be badly affected if carbonated drinks are added to the list of items subject to special consumption tax, heard a conference on impacts of tax law amendments held by the Vietnam Chamber of Commerce and Industry (VCCI) in Hanoi yesterday.

According to a draft amending the tax laws by the Ministry of Finance, carbonated drinks will be subject to a special consumption tax rate of 10%. Besides, value-added tax (VAT) will increase from 10% to 12% for all kinds of beverage and from 5% to 6% for sugar.

In a document sent to the conference, the U.S.-ASEAN Business Council said such amendments will lead to a rise of 12% or more in soft drink prices. As a result, there would be a significant decline in beverage consumption and revenue.

According to the council, beverage companies might narrow production, resulting in lower corporate income tax revenues. Small and medium enterprises will be affected the most by tax law amendments.

The council suggested the Ministry of Finance not impose special consumption tax on soft drinks. Or to lessen the impacts, the ministry should impose a tax of only 1-3% on all kinds of sugary food and beverage, or impose special consumption tax on highly carbonated drinks only.

Nguyen Van Viet, chairman of the Vietnam Beer, Alcohol and Beverage Association (VBA), said the ministry should conduct a thorough assessment report on the impacts of the draft law on the beverage industry, the economy and the society.

According to the Ministry of Finance, it is conducting an assessment report with the help of the World Bank.

“Many populous countries like China have not imposed special consumption tax on carbonated drinks to avoid negative impacts on the beverage industry and the State budget. So there is no reason for Vietnam to do so,” Viet said.

There are currently hundreds of businesses involved in the beer-alcohol-beverage industry in Vietnam. They contribute nearly VND50 trillion (US$2.2 billion) to the State budget annually and create hundreds of thousands of jobs.

U.S. firms look for Vietnamese suppliers

Many U.S. manufacturers and retailers on September 14 joined the Supplier Day 2017 in HCMC to look for Vietnamese suppliers to increase local content of their products and services, and add more Vietnamese products to their distribution systems.

The Supplier Day 2017 held by the American Chamber of Commerce in Vietnam (AmCham Vietnam) was attended by 17 foreign manufacturers, suppliers and distributors, mainly U.S. enterprises operating in Vietnam, and 60 local suppliers. The foreign firms want to directly discuss with local suppliers to learn about the supply capacity of Vietnamese companies and put forth their requirements.

Most of the participating companies are multinationals from the U.S. or members of AmCham Vietnam such as Coca-Cola Beverages Vietnam, Procter and Gamble, Suntory PepsiCo Vietnam Beverage, UPS Vietnam, WAHL Vietnam, BriskHeat Vietnam and Walmart Global Sourcing.

The event, which has been annually held since 2014, is aimed at connecting manufacturers and local suppliers to develop supply chains in Vietnam, thus helping suppliers meet requirements of manufacturers, while U.S. firms can find potential suppliers.

Frank Weiand, co-chairman of the AmCham Vietnam manufacturing committee and general director of Supply Chain Services International (SCSI), said the event would improve local supply chains to satisfy the demand of international manufacturers.

Phan Trong Quan, general director of WAHL Vietnam, a clippers manufacturer in Long Hau Industrial Park in Long An Province which has exported its products to the U.S., the UK, Australia, Canada and New Zealand, said the Supplier Day was a great opportunity for the company to choose potential suppliers to reduce products’ prices and increase its localization rate. This is the fourth time in a row WAHL Vietnam has participated in the event.

After working with five suppliers at the event, the company found four of them suitable for cooperation, Quan added.

Quan said local suppliers are getting better in helping foreign manufacturers lessen reliance on parts imports. The localization rate of WAHL Vietnam has surged to 45% compared to 5% four years ago, and the rate is expected to grow to 95% in 2018.

Le Tu Cam Ly, legal and public affairs executive of Coca-Cola in Indochina, said with its 30-year operation, Coca-Cola pledged to offer business opportunities for Vietnamese small and medium enterprises. The company also shared its experience in promoting business activities and supply chains of both U.S. and Vietnamese companies.

In order to join the global supply chain, local enterprises are required to produce high-quality products with reasonable prices and ensure prompt delivery, thereby having more markets, overcoming challenges and contributing to the development of Vietnamese supply chains, said Weiand.

TMV Vietnam picks rapper Suboi as brand ambassador

Popular rapper Suboi has been chosen as brand ambassador for the “No Quality, No Life” project of Toyota Motor Vietnam (TMV), the leading automaker in Vietnam.

The project puts quality goals first in all activities to cope with changes in consumer trends and lifestyles in Vietnam’s modern society.

Born and brought up in Vietnam, the young artist has emerged as a famous rapper thanks to her talents and stringent efforts. With great passion and strong dedication to music, Suboi has made outstanding achievements in the international music industry and performed at music festivals worldwide.

Dong Nai property market poses high risk

Dong Nai Province's real estate market holds potentially high risks despite the rapid growth being helped by improved traffic connectivity with HCMC, heard a seminar on the provincial property market on September 14.

Among HCMC’s neighboring provinces, Dong Nai has the better advantage as it is home to many important traffic intersections, with many axis routes cutting through it such as National Highway 1A, North-South Railway, HCMC – Long Thanh – Dau Giay, Ben Luc – Long Thanh and Dau Giay – Phan Thiet expressways, Phuoc Khanh Bridge connecting Can Gio to Nhon Trach, and Ben Thanh – Suoi Tien Metro Line which will link to Bien Hoa City.

Especially, Long Thanh International Airport project has made Dong Nai’s real estate market more attractive to HCMC investors as people tend to move to neighboring areas of HCMC.

At the seminar “Dong Nai real estate market: opportunities and risks” held by Dau Tu newspaper, it was announced that the province is home to nearly 300 property projects of domestic and foreign enterprises including those with investments of billions of U.S. dollars.

According to statistics of the market researcher Savills, Dong Nai as of 2016 had 55 housing projects supplying 30,200 apartments and land lots. However, the secondary market accounted for up to 90% with 27,600 products while the primary market provided only 2,600 products.

In general, investors focus on the land segment with long-term investment targets of five to seven years. Land prices remain low with VND4-4.5 million per square meter in Long Thanh and Nhon Trach districts and VND3.5 milion in Trang Bom and Giang Dien districts.

The market has shown signs of uncontrolled development as many local people have divided their farm land into lots to sell. Many areas of farmland of 3,000-4,000 square meters each had already been divided into smaller ones many years ago, said Nguyen Minh Khang, acting general director of LDG Group.

Due to this rampant development, numerous projects in the province without technical and social infrastructure facilities remain unsold. 

Nguyen Thanh Lam, deputy director of Dong Nai Department of Construction cum chairman of the Dong Nai Real Estate Association, said the provincial housing market becomes active thanks to infrastructure development projects, especially Long Thanh International Airport project.

Industrial park and urban area development projects measuring up to 21,000 hectares around the airport have been suspended pending adjustment of zoning plans. The province has also halted the certification of farmland being split into small lots.

Lam categorized real estate projects in Dong Nai into three groups. The first group comprises of land resources in urban areas in Bien Hoa City, Long Thanh, Trang Bom and Long Khanh districts, which have been almost exhausted.

In the second group, projects with an area of 200-300 hectares each are located in localities with poor infrastructure, mainly land plots. These projects are only suitable for investors with medium-term investment targets from five to seven years.

The third group includes projects in areas without essential infrastructure facilities, and are only suitable for investors with over-10-year investment targets, he said.