Interest rates could rise 0.5-1% in 2017: BVSC

Interest rates are likely to rise by 0.5 to 1 per cent in 2017, the Bảo Việt Securities Company (BVSC) has forecast.

In a recently released report on prospects in 2017, the BVSC has given three reasons that will cause interest rates to rise. The first reason, according to BVSC analysts, is that credit growth is anticipated to remain high at 17 to 18 per cent in 2017 so as to support economic growth.

Secondly, inflation will be under rising pressure, which will be the basis for a nominal hike in interest rates.

Finally, the central bank will have to maintain a reasonable gap between interest rates of the đồng and the US dollar, which will put pressure to raise the đồng interest rate.

The BVSC has also predicted that the central bank will face significant challenges in managing the monetary policy in 2017 as a rebound of credit growth in 2016 will lead to a further rise in the next few years, putting pressure on interest rates and inflation.

According to BVSC, the Government has targeted a GDP growth of 6.5 to 7 per cent in the 2016-20 period so that pressure on the monetary market will be high. 

In the report, the BVSC also assessed in contrast to the sharp declining trend in 2015, interest rates in 2016 were relatively stable. After rising 0.2 to 0.3 per cent per year in the first quarter last year, the interest rate steadied from April, with some banks even cutting it by 0.3 to 0.5 per cent per year for deposits and 0.5 to 1 per cent per year for loans for production and business as well as prioritised industries in April and September.

By the end of 2016, the lending interest rate averaged around 6 to 9 per cent per year for short-term loans and 9 to 11 per cent per year for medium- and long-term loans.

Analysts with the BVSC assessed that the rebound in credit growth and a stable interest rate in 2016 significantly supported the country’s economic growth.

Multi-level marketing companies face ministry's wrath

The Ministry of Industry and Trade announced on January 16 a number of wrongdoings at two multi-level marketing companies, Amway Vietnam and Thien Ngoc Minh Uy.

Amway Vietnam couldn't prove that it had informed several departments of industry and trade across the country when it changed its business licence content on multiple occasions.

Meanwhile, the labelling of several functional foods at Thien Ngoc Minh Uy differs from those registered with the Vietnam Food Administration. Many contracts lack the information of the distributors. The company doesn't have training courses or issue member cards as regulated.

Similar to Amway Vietnam, Thien Ngoc Minh Uy also couldn't prove that it had informed local departments of industry and trade when changing the information on their business licence. In addition, Thien Ngoc Minh Uy had offered massage services to customers which could mislead the public that it also offers health care services.

The Ministry of Industry and Trade has transferred the cases to agencies for investigation. The Vietnam Competition Authority was asked to deal with violations of multi-level marketing regulations. The results will be announced publicly.

Minister of Industry and Trade Tran Tuan Anh has tightened control over multi-level marketing companies after several instances of fraud. In March 2016, Anh set up many inspection teams to scrutinise seven companies such as Amway Vietnam, Thien Ngoc Minh Uy and VietNet JSC.

The teams including officials from Ministry of Public Security's Economic Police Unit, Vietnam Competition Authority, and Market Management Department. There are also officials from the Ministry of Industry and Trade's inspectorate, Finance Bureau and Vietnam E-commerce and Information Technology Agency.

Many wrongdoings have been discovered. According to the investigation, tens of thousands of people have been tricked into joining multi-level marketing schemes.

The ministry will continue inspecting and deal with multi-level marketing companies that show signs of violations.

Vietnamese economy urged to be cautious of external shocks

The Vietnamese economy needs to be cautious of external shocks this year due to global economic uncertainties, a scholar has warned.

Director of the Vietnam Institute for Economic and Policy Research at the Vietnam National University’s University of Economics and Business Nguyen Duc Thanh made this comment during a ceremony in Hanoi on January 16 to release the macroeconomic report for the fourth quarter of 2016.

The report warned of the possibility of the US Federal Reserve’s interest rate being hiked three times this year, which could push up the USD rate in Vietnam, thereby hurting Vietnam’s exports and causing its trade deficit to deteriorate.

In order to maintain the value of the Vietnamese dong in the context of a rising USD rate, the State Bank of Vietnam could increase deposit rates, but this could pose risks and cause a ripple effect for the real estate sector, it said.

Another concern is that major oil producers’ production cut since January 2017 could cause oil prices to increase again. On the plus side, it could add more revenues to the State budget, but also potentially put pressure on domestic inflation, which has been higher recently due to the adjustment of public service prices.

Thanh said the 6.7% growth target this year is high and inflation under 4% will not be easy to achieve, suggesting that achieving the growth target must be done with “patience over haste” in order to prevent a relaxation in stabilising the macro-economy.

The report also forecast that the economy could expand by nearly 6.4% while inflation could reach 5.9% this year, with the business sector, especially manufacturing and processing, being a bright spot.

The government’s Resolutions 19 and 35 are also expected to cut down cumbersome administrative procedures and support private businesses.

Conveying Vietnam’s message of comprehensive reform

At the invitation of Klaus Schwab, executive chairman of the World Economic Forum (WEF), Prime Minister Nguyen Xuan Phuc and a high-ranking Vietnamese delegation will attend the WEF’s 2017 annual meeting in Davos, Switzerland.

This is an important event, aiming to strengthen Vietnam’s relationship with the WEF and convey a strong message on Vietnam’s economic outlook, determination to carry out comprehensive reform and commitment to building a facilitative and action-orientated government.

The WEF is one of the world’s most prestigious and effective global forums, drawing the interest and participation of the leaders of most major countries, international organisations and world-leading companies. Each year, the WEF holds many global and regional forums, gathering leaders of governments, enterprises, social organisations and scholars from across the world to discuss economic and development issues, as well as global affairs.

The WEF’s most important event is the annual meeting held at the end of January in Davos, Switzerland. There are also regional forums including the WEF on East Asia, Latin America and the Middle East, where regional development issues are discussed, analysed and evaluated.

Established in 1989, the relationship between Vietnam and the WEF is advancing positively. The fine relationship is marked by high-level bilateral activities. Philipp Rösler, a member of the WEF’s Managing Board, visited Vietnam in 2014, 2015 and 2016. Vietnam’s senior leaders have also frequently attended the WEF’s annual meeting and the WEF on East Asia.

In 2010 the WEF on East Asia was held in Ho Chi Minh City with the attendance of about 450 delegates. As the host of the forum, Vietnam actively participated in its activities, leaving a good impression on government leaders and the global business community.

In October 2016 on the occasion of the Cambodia-Laos-Myanmar-Vietnam Summit and the Ayeyawady–Chao Phraya–Mekong Economic Cooperation Strategy Summit, Vietnam collaborated with the WEF to hold the WEF Mekong to promote the Mekong subregion to the global business community. This was a significant milestone in Vietnam-WEF cooperative relations. In agriculture, Vietnam and the WEF are also cooperating closely with Vietnam being one of the WEF’s key partners in its New Vision for Agriculture initiative. Currently Vietnam has eleven large companies that are members of the WEF.

Under the theme “Responsive and Responsible Leadership,” the WEF’s 2017 annual meeting is expected to draw the participation of 3,000 delegates. So far more than 40 leaders of countries, international organisations, world-leading corporations and renowned scholars have affirmed their attendance.

This year’s annual meeting will include more than 300 sessions on the following groups of issues: enhancing global governance, responding to security instability and crises, promoting inclusive and sustainable growth amid a global economic slowdown, national and regional economic restructuring and social reform and developing new industrial systems and business models amid the fourth industrial revolution. The annual meeting will also discuss implementing the WEF’s initiatives in such areas as consumption, digital economy and society, economic growth and social inclusiveness, energy, the environment, the financial and monetary systems, food security, healthcare, investment and international trade and infrastructure.

The meeting is an opportunity to promote the position and role of Vietnam as the host of the APEC Summit, affirm the country’s responsible contributions to ASEAN through activities towards the 50th anniversary of the establishment of ASEAN held by the WEF.

Attending the WEF’s 2017 annual meeting in Davos, the Vietnamese delegation, headed by Prime Minister Nguyen Xuan Phuc, will convey a strong message about Vietnam’s economic outlook, economic policies and determination to push for comprehensive reform and proactive international integration.

Vietnam’s message of commitment to building a facilitative and action-orientated government comes in line with the meeting’s theme, thereby enhancing the role of the Vietnamese government in comprehensively reforming the country to reinforce the confidence of the international community.

Vietjet Air launches Ho Chi Minh–Taichung route

The budget carrier Vietjet Air launched its fifth route to the Chinese province of Taiwan on January 15, connecting Ho Chi Minh City with Taichung.

The new route aims to better meet increasing the demand for tourism and business travel between the two cities.

The Ho Chi Minh City–Taichung route is to be operated with four round trips per week, on Mondays, Wednesdays, Fridays and Sundays with flight time per leg being 3 hours and 30 minutes. The Ho Chi Minh City–Taichung flight takes off at 10:25 (local time) and lands at 14:45 (local time). The return flight from Taichung departs at 15:45 (local time) and arrives in Ho Chi Minh City at 18:15 (local time).

The new route’s air tickets are now available for booking from 12:00 to 14:00 at www.vietjetair.com (also compatible with smartphones at https://m.vietjetair.com) or at www.facebook.com/vietjetvietnam (just click the “Booking” tab) or via call to the national call center on 19001886 or at Vietjet ticketing offices nationwide.

Payment can be easily made with debit and credit cards from Visa, MasterCard, JCB, KCP and American Express and ATM cards issued by the 29 Vietnamese banks that have been registered with internet banking.

Located in the west of central Taiwan, Taichung is Taiwan’s third largest city and is known as cultural and educational center with many historical sites. Thanks to its serene nature, nice weather and famous local cuisines and cultural events, the city is expected to become a tourism paradise. With the new route to Taichung, Vietjet’s flight network to Taiwan has been increased to five routes, helping travellers, tourists and businessmen fly affordably.

PM approves agreements with foreign countries

The PM has recently approved a number of protocols and agreements with foreign countries.

Specifically, the government leader has ratified a protocol amending the agreement on avoidance of double taxation between India and Viet Nam, which was signed in Ha Noi on September 3, 2016.

He has also approved the content of the agreement on loan, financial mechanisms and loan conversion for the Japanese government’s official development assistance (ODA) loans for the Economic Management and Competitiveness Credit for Viet Nam (EMCC III) and the Support Program to Respond to Climate Change (SP-RCC VII) in the fiscal year 2016.

The PM gave a nod to an investment plan for the non-project nonrefundable aid from the Japanese government to supply equipment to enhance Viet Nam’s waterway security capacity.

Vinachem sees revenue fall last year

The Vietnam National Chemical Group (Vinachem) reported at a conference in Hanoi last week that its revenue contracted 8.4% to VND42 trillion (around US$1.9 billion) last year compared to 2015 and exports fetched US$225 million, down 12% year-on-year, chinhphu.vn reported.

Speaking at the conference over the weekend, Deputy Prime Minister Trinh Dinh Dung said Vinachem unable to achieve sales and production targets for 2016 indicated that the group was in difficulty. He urged the group to quickly seek solutions to improve governance, cost management and the efficiency of its investments so as to get out of the woods.

MWG opens first electronics store on Phu Quoc

Mobile World Group (MWG) last Saturday inaugurated its Dien May Xanh electronics store in Duong Dong Town on Phu Quoc, the first of its kind on the island off mainland Kien Giang Province. The group is preparing to put into operation a small electronic outlet on the island at the end of this month to serve local customers.

The Dien May Xanh chain has expanded its presence to 63 cities and provinces with 286 electronics and home appliances stores. The chain posted revenue of more than VND11.67 trillion as of November last year, up a staggering 207% compared to the same period in the year-earlier period.

Also last week, MWG launched an e-commerce website at vuivui.com in an effort to increase its retail sales. The group targets monthly revenue of VND20 billion for the website at the end of 2017.

Tan Rai alumina plant to run at full steam this year

Tan Rai alumina plant in Lam Dong Province is scheduled to run at full throttle this year, the fourth year of its operation, according to Vietnam National Coal and Mineral Industries Group (Vinacomin).

Vinacomin expected the Tan Rai alumina plant to reach its annual designed capacity of 650,000 tons in 2017, around 50,000 tons higher than last year. The plant has achieved stable production since October 2013 and its products have sold well because of their quality.

Nhan Co alumina plant in the Central Highlands province of Dak Nong has come online, Vinacomin said in a report released last week when Deputy Prime Minister Trinh Dinh Dung led a working group of the Government to check Tan Rai and Nhan Co plants.

Dung said the successful operation of the two alumina plants served as an important foundation for the development of an aluminum industry and the material, mechanical engineering and home appliance sectors in Vietnam.

The alumina plant projects have helped generate large numbers of jobs, improve local people’s lives, and boost economic restructuring and socio-economic growth in the Central Highlands region. 

The Government’s working group found that land reversion after mining activity and environmental protection at the alumina plants meet relevant requirements and their red mud reservoirs are safe.

“These are lessons for other industrial facilities to learn and follow… and environmental protection should be a top priority,” Dung said. “We must strictly control waste, install more monitoring systems and complete land reversion (at mining projects).”

Dung called for overall reviews of the mining projects including those in test operation to detect the possible loss of safety at the projects and identify factors that can affect the competitiveness of their products. It is crucial to improve the efficiency of mining activity and plants in this sector.

Co.opmart opens two more stores before Tet

The Saigon Union of Trading Cooperatives, or Saigon Co. op, has put into operation a new Co.opmart supermarket in Chau Doc City of An Giang Province in the Mekong Delta and another in Duc Pho District of Quang Ngai Province, raising the total number of its Co-opmarts to 87 nationwide.

The two facilities have been developed at total investment capital of more than VND160 billion (nearly US$7.07 million), stocking over 30,000 essential products, including fresh food, processed food, cosmetics, home appliances, fashion items, and other services. 

The opening of the two new stores at this time is aimed at meeting pre-Tet shopping demand of local people in Chau Doc and Duc Pho and surrounding areas.

India seeks to attract Vietnamese tourists

India wants to attract more Vietnamese tourists by introducing its new tourism products, including health and pilgrimage tours.

At an event organized last Friday in HCMC by the Vietnam Chamber of Commerce and Industry in HCMC (VCCI-HCMC) and the Consulate General of India in the city, R K Suman, assistant director of the Indian tourism office in Singapore, said travel conditions for Vietnamese tourists to India should made simpler so that visitors can apply for a visa at home through an online application system, or upon arrival.

Vo Tan Thanh, director of VCCI-HCMC, said Indian tourist arrivals in Vietnam have increased from 16,000 in 2010 to 60,000 last year. Meanwhile, the number of Vietnamese visitors to India last year totaled 12,000.

India is strong in healthcare services as the number of international visitors to the country for medicinal purposes was estimated to reach three million last year, Thanh added.

Bui Ta Hoang Vu, director of the HCMC Department of Tourism, said at the event that the department along with some firms would join a tourism fair in Mumbai, India and organize the HCMC tourism promotion program in New Delhi next month.

Last year, HCMC welcomed 46,000 Indian tourists. The department would focus on developing restaurants for Indian visitors, Vu added.

5% rate applies to social-home loans this year

Credit institutions shall apply an annual interest rate of 5% to social-home loans this year with the lending term of at least 15 years, according to a Government decision.

The Prime Minister has just issued a decision in line with Decree 100/2015/ND-CP on the development and management over budget homes, which states that banks selected by the Government to provide loans to clients to acquire, rent, build or upgrade social houses must offer an annual rate of 5% in 2017, which is 0.2 percentage point higher than last year.

The decree stipulates that house buyers and renters can get loans equivalent to a maximum of 80% of the value in home purchase and rental contracts. In case customers take out loans to build or upgrade social homes, the ceiling is 70% of the estimated cost but the sum shall not exceed 70% of mortgaged assets’ value.     

Beneficiaries of social housing policy are mentioned in clauses 1, 4, 5, 6 and 7, Article 49 of the Housing Law.

The minimum lending term is 15 years starting from the date of the first disbursement. If customers want a shorter lending term, they can negotiate with creditors. 

The VND30-trillion home loan program ended in June last year. The Prime Minister then signed a decision ordering the Vietnam Bank for Social Policies to quote an annual rate of 4.8% for social housing loans in line with Decree 100, with the lending term extended to December 31, 2016. However, no homebuyers had been able to take out such preferential loans until the date. 

The HCMC Real Estate Association (HoREA) has written to the ministries of planning-investment and finance, the State Bank of Vietnam (SBV) and relevant agencies for many times on the capital issue. The planning ministry later said that it did not receive registration documents about capital demand for social housing policy when it drew up the 2016-2020 public investment plan and plans for 2016 and 2017.

The ministry later received a proposal from the Vietnam Bank for Social Policies in December 2015, asking the ministry give refinancing capital, but by then the medium-term pubic investment plan had been already done. Given the tight State budget, the ministry could not allocate capital for the SBV to offset interest rates to implement social housing policy.

According to Clause 2, Article 17 of Decree 100, the central bank must give interest rate subsidies to credit institutions chosen by the State to provide loans to buyers and developers of social homes. Until now, the central bank has yet to announce the preferential rate for social housing loans that shall be applied by credit institutions.

At a teleconference on social homes in December last year, the Ministry of Construction released a report saying that Vietnam had met just 28% of the social housing development target until 2020 due to a lack of capital, slow capital allocations and inadequate attention of many provinces and cities.

The biggest hindrance is a lack of cheap loans to support people and businesses to construct and acquire social homes.

APEC workshop promotes innovation among SMEs

At the workshop organised by the Ministry of Industry and Trade on January 17 and 18, APEC countries shared experiences in promoting market-oriented innovation management practices at SMEs and explored possible ways to foster innovation among SMEs.

According to the APEC’s website, SMEs account for over 97 per cent of all enterprises and employ over half of the workforce across APEC economies. SMEs contribute significantly to economic growth, with their share of GDP ranging from 20 to 50 per cent in the majority of APEC economies. However, they only account for 35 per cent or less of direct exports. The APEC’s Small and Medium Enterprises Working Group (SMEWG) therefore works to encourage the development of SMEs and to build their capacity to engage in international trade.

In September 2016, the SME Ministers endorsed the SMEWG Strategic Plan for 2017-2020 which provides a roadmap to address critical issues pertaining to the growth of SMEs and micro enterprises (MEs) in the APEC in four pillars: a) entrepreneurship, innovation, and the internet and digital economy; b) financing for business expansion and capability development; c) inclusive business ecosystem that supports SME growth; and d) market access for SMEs.

For the first critical issue, namely entrepreneurship, innovation, and the internet and digital economy, the working group is trying to promote an entrepreneurial culture amongst the youth, women, and other individuals, foster innovation in SMEs to strengthen business competitiveness, help SMEs to build capabilities to take advantage of and compete effectively via the internet and digital economy, and support SME development in specific industries based on the economic development needs of individual member economies.

This year’s APEC will be themed “Creating new dynamism, fostering a shared future.” Boosting trade and investment and promoting economic integration, structural reforms, and SME innovation are critical to enabling APEC economies to better harness all opportunities from the fourth industrial revolution and the third wave of globalisation.

No extension for VRG divestment plan: Deputy Minister     

The Vietnam Rubber Group (VRG) cannot delay its plan to divest by June 2017, said Deputy Minister of Agriculture and Rural Development Ha Cong Tuan.

VRG must also ensure it makes available its initial public offering (IPO) during the first quarter of 2017, Tuan said, adding that he would submit a report for the Government to review VRG’s divestment from member companies, to assure the divestment is carried out efficiently.

Most of the VRG’s rubber producers are located in remote and disadvantaged areas where living conditions are poor, therefore, the divestment must assure local people are cared for and the land is managed effectively, according to Tuan.

Tuan was responding to the VRG’s proposal, sent to the Steering Committee for Business Renovation and Development under the Ministry of Agriculture and Rural Development, to extend the deadline for the equitisation of the group by three months.

The proposal is aimed at avoiding the re-evaluation of the group’s value in case the equitisation cannot be completed by the end of June 2017. If the proposal is approved, the VRG would have to complete the equitisation of the parent and member companies by the end of the third quarter this year, instead of the initially approved deadline that is for the end of June 2017.

According to Tran Thoai, Deputy General Director of VRG, the group has completed all necessary parts of the equitisation plan, however, it would take the group more time to resolve unexpected problems that may occur when they try to match its work with the requirements stated in Decree 59/2011/ND-CP on transforming a 100-per cent State-funded business to a joint stock company.

VRG also proposed that the steering committee allow the group to sell the stakes in its member companies after the group completes equitisation so that the divestment could be completed more efficiently, and allow VRG to seek potential buyers for its subsidiaries in Cambodia.

The Law of Business 2014 states that a State-owned group and its member companies cannot share ownership in the same business, so VRG will have to complete divestment before July 1, 2017, Thoai said.

VRG owns most of the capital in its member rubber companies, therefore, the group will sell its stakes in those companies to recover its investment. But if the divestment starts now, it would be difficult for VRG to look for buyers, and the divestment could be handled more efficiently.

Thoai said that most of those companies started in 2007 and their products have just been introduced into the market. In the first three years of operation, rubber producers often have low margins of profit, given that the rubber price remains very low in global trading.

Further, it would become a sensitive topic for the group to divest from member firms in Cambodia, because the group is uncertain about who could be buyers, while the local public and media might misunderstand the purposes of the divestment.

According to the decision of the Prime Minister, VRG will have to equitise the group and 20 member companies. In 2016, the rubber group successfully sold stakes in two subsidiaries, the Tan Bien and Ba Ria limited companies. The group has complete evaluating its own value, as well as that of its member companies, and is preparing reports for the steering committee to approve.

On December 31, 2016, VRG sold its stakes in 24 non-administrative units and collected more than VND2.9 trillion (US$128.9 million).

In 2016, VRG registered a revenue of VND15.4 trillion, an increase of 14.4 per cent from its targeted figure for last year.

That helped increase its pre-tax profit by 51 per cent to VND2.36 trillion, including VND378 billion from rubber production and VND418 billion from wood production.

According to Trần Ngọc Thuận, VRG’s general director, last year was the toughest for the agriculture sector due the impact of the climate change. The rubber industry, in particular, was affected by some factors such as rising global supply and lower rubber trading price.

VRG this year has set a target of VND4.18 trillion in pre-tax profits, a year-on-year increase of 47 per cent, though the rubber industry is forecast to face a lot of challenges, especially the unpredictable impact of climate change. 

Haprosimex to open IPO next week     

Haprosimex Single Member Limited Liability Company will offer 3.8 million shares, or 32 per cent of its stake, at its initial public offering (IPO) on January 24.

The auction will be done on the Ha Noi Stock Exchange at a starting price of VND10,000 (4 US cents) a share, the northern bourse announced.

Haprosimex, formerly known as Ha Noi’s Handicraft Industry Cooperative Union, was established in 1993. In 2009, its trading operations were severely affected by recession and lack of investment capital. In 2010, its HCM City-based branch suffered losses and shut down.

In 2012, the company stopped the production of its agricultural, forestry and aquatic products. Since then it has only been producing knitted products, but even its knitting factory is producing only 20 per cent of its capacity. Its current focus is on maintaining operations at the knitting factory and leasing its office spaces. Its textile products include sportswear, T-shirts and polo shirts.

Haprosimex has one dependent accounting unit, Haprosimex Knitting Factory; two subsidiaries, HAP Capital JSC and Thanh Tri Garment JSC; and two joint ventures.

Before equitisation, the company’s actual value was VND390 billion and the actual value of the state capital was minus VND265 billion.

The company has 42,300 square metres of land-use rights in Hà Nội, including around 350 square metres in Hoan Kiem District’s Hang Luoc Street, and 34,000 square metres in Gia Lam District’s Ninh Hiep Industrial Zone. 

Hannover metalworking expo could benefit VN: organisers     

The world’s leading trade fair in the metalworking sector, EMO Hannover, will be held from September 18 to 23 in Germany.

It is expected to attract 1,700 manufacturers from more than 40 nations and territories.

At the fair, which this year will have the theme “connecting systems for intelligent production,” exhibitors will showcase products, solutions and services for mastering the challenges involved in industrial production operations.

Christoph Miller, trade fair director of the German Machine Tool Builders Association, said manufacturers would bring technologies ranging from simple, sturdy and affordable to high-priced high-tech.

Both stand-alone machines and concatenated systems would be on show, plus transfer lines and large machines, featuring a high degree of automation, he said.

According to the organisers, the fair will offer Vietnamese companies a good opportunity to look for partners as the country has been importing 100 per cent of its metal production technology needs. 

Dairy tech special at VIV Asia expo to track milk from grass to glass     

The 2017 edition of the international feed to food exhibition, VIV Asia, to be held in March in Bangkok, will include a milk-focused package called Dairy Tech Special consisting of conferences, seminars and an expo pavilion.

According to the UN, the Asia-Pacific region is now the world’s largest milk producer, producing around 327 million tonnes last year, or 40 per cent of the global output.

Out of an increase of 140 million tonnes projected globally by 2025, almost 60 per cent is expected to come from Asian countries.

“It is certainly an exciting time to be featuring the Asian dairy sector at VIV Asia,” said VIV’s Dairy Tech Special co-ordinator Anel Ceman said.

“There has to be a good technical level to support the further expansion of milk businesses throughout Asia and this will be the focus of Dairy Tech Special.”

The event starts with an invitation-only Dairy Tech conference in Bangkok on March 14, a day before the 2017 VIV Asia opens.

Then, on March 15, the spotlight moves to the show itself at Bangkok’s BITEC Exhibition Centre, where Dairy Tech would host a pavilion displaying dairy equipment, Ceman said.

“Among them are famous production equipment, processing and packaging systems, genetics, nutrition and cow health brands from around the world.

“In addition, of course, VIV Asia will have many other exhibitors who serve the milk market as part of a wider product range for the animal protein industries.”

Also a series of Dairy Tech commercial seminars would be held during VIV Asia 2017 to present the latest ideas and products for producing milk profitably, he said.

Dairy Tech will also alert visitors to the synergy available from the co-location of VIV Asia’s BITEC on animal proteins and the first Agritechnica Asia on field machinery.

Visitors can enter both shows and will be invited to follow a ‘Dairy Walk’ that takes them to exhibits relating to the complete dairy chain from grass to glass.

There would be an option of a visit to a dairy farm, Ceman said. 

VGG to issue 2.1 million ESOP shares     

Viet Tien Garment Corporation (VGG) will issue 2.1 million shares under the employee stock ownership plan (ESOP) in the first quarter of this year.

The share’s face value will be VND10,000 (45 US cents) per share. After issuing these shares, VGG’s charter capital will rise to VND441 billion.

These ESOP shares cannot be transferred for five years from the date of issuance. In case employees quit jobs or want to transfer ESOP shares before the five-year period is over, they have to sell the shares to the company at VND10,000 per share.

On March 10, 2016, 28 million shares of VGG were listed on the Unlisted Public Company Market (UPCoM) at a reference price of VND40,000 per share. On Tuesday, VGG closed at VND61,000 per share.

The company’s revenue target was VND6.3 trillion and its after-tax profit VND200 billion in 2016. A 20 per cent dividend is expected. 

Gamuda Land to launch high-end projects in 2017     

Malaysian developer Gamuda Land on Tuesday said it would introduce several high-end landed properties and its third apartment building, Zen Residence, to customers this year.

The company will continue to develop Gamuda City project, which is being built on 500 hectares of land in the south of Ha Noi.

Legal procedures are being completed to speed up other integral components within the project, and high-end apartment complexes, office buildings and five-star hotels will be included to make Gamuda City a business and cultural hub at the gate of the capital, the developer said in a statement.

“With a strong commitment for sustainable development, Gamuda Land is in a quest for improvement, and is striving to bring more high-quality and well-rounded services to customers,” said Chow Chee Fan, the company’s general director.

The top priority in 2017 will be to improve customer care services, enhance service quality and ensure a fulfilling life for all customers who choose Gamuda Land’s products, Fan said.

Established in 1995, Gamuda Land is the property development division of Gamuda Berhad, one of the leading construction and infrastructure groups in Malaysia. It has successfully developed iconic and award-winning townships in Malaysia. 

Banking system liquidity under pressure until Tet ends     

Liquidity of the banking system from now until the end of Tet (Lunar New Year) will remain under high pressure due to rising capital demand.

According to Bao Viet Securities Company (BVSC), the State Bank of Viet Nam last week had to pump a net VND3.786 trillion (US$166.78 million) into the system through open market operations (OMO) channel to support liquidity of the banking system.

The few weeks before Tet are often the peak time for the banking system’s liquidity, when capital demands rise sharply due to seasonal reasons.

BVSC also reported that inter-bank interest rates last week rebounded rather sharply within the range of 0.07-1.2 per cent.

Specifically, the average interest rate for overnight term increased 1.2 per cent to 4.6 per cent per year; 0.3 per cent for one-week term to 4.7 per cent per year and 0.07 per cent for two-week term to 4.8 per cent per year.

The inter-bank interest rate rebounded quickly only after a week of cooling down, proving that the system’s liquidity is still suffering from pressure during the weeks close to Tet.

“We maintain our view that from now until Tet, the system’s liquidity will remain under pressure and at some points certain support will be needed from the central bank,” BVSC analysts said.

They also forecast inter-bank interest rates from now until the end of Tet would continue anchoring at a high level, ranging from 4.5-5 per cent per year. 

SMEs urged to build brands     

Brand building must be the core of small-and medium-sized enterprises’ (SMEs) competition strategies going into the fourth industrial revolution, experts said at conference on Monday in Ha Noi.

Nguyen Van Nam, Director of the Institute for Brand and Competition Strategy, stressed that the fourth industrial revolution was rapidly changing the ways of doing business and significantly affecting SME operations.

However, most SMEs were reportedly using outdated technologies, Nam said, citing statistics showing that only 10 per cent of SMEs have applied modern technologies.

“Updating SME’s approaches is essential to their competitiveness,” Nam said.

According to Nguyen Quoc Thinh, National Branding Programme consultant, SMEs should not aim at competing by price but by brand. “When asked, roughly 90 per cent of firms said that improving competitiveness could be achieved through lowering prices and enhancing quality. However, SMEs should note that creating market demand should be the target.”

Economic expert Vo Tri Thanh urged SMEs to link with each others to develop the value chain. “This will be an efficient solution for SMEs to develop their brands.”

“Applying technology in production is also vital, which will create pressure on firms to use resources efficiently and create high-added value products,” Thanh said.

Le Van Anh, Director of the Centre of Law Consultancy and Human Resource Development, said that only 21 per cent of Vietnamese SMEs managed to participate in the global value chain, compared to 30 per cent in Thailand and 46 per cent in Malaysia. Vietnamese SMEs are mainly services firms with a mere 20 per cent operating in manufacturing. About 85 per cent of them have revenue below VND2 billion (US$88,800) per year.

From a different angle, Nguyen Van Toan, Viet Nam Association of Foreign Invested Enterprises’s Deputy President, said that SMEs’ credit access must be improved.

Toan said capital had been among the biggest difficulties for SMEs; they struggled to get credit due to a shortage of mortgaged assets and an ineligibility for trust-based loans.

He said that the Government should raise policies to promote venture capital to create resources for start-ups.

Do Thuy Duong, director of TalentPool, an SME operating in capacity training, said that the dynamics of SMEs were of significant important in competition. “SMEs, themselves, must be active. Competition is for development, not inhibition.”

A survey by the Association of SMEs revealed that SMEs accounted for 98 per cent of the total number of firms in Viet Nam. Just 2.2 per cent of the firms were of medium size, while the rest were of small and super small sizes.

However, SMEs provided jobs for 51 per cent of the country’s workforce and contributed to 40 per cent of the gross domestic product.

The Government is drafting a law on supporting SMEs which is expected to give them a boost. The private sector is recognised as a main driver for Vietnamese growth. 

Vung Ang II plant BOT project agreement inked     

The Vung Ang II thermal power build-operate-transfer (BOT) project agreement was inked on Monday in Ha Noi.

The agreement was finalized between the General Directorate of Energy (GDE) of the Ministry of Industry and Trade and the Vung Ang II thermal power joint stock company.

The 1,200MW plant consists of two 600MW generators, with the first turbine group to be put into operation in 2021, while the other one will become operational one year later.

The US$2.2 billion project will supply electricity for economic development in the northern region, ensuring national electricity security.

The GDE will support the investor in preparing procedures on investment licence and arranging finance.

Apart from the Vung Ang II thermal power BOT plant, the GDE is also involved in 17 other thermal power BOT projects with total capacity of 23,000 MW.

On the same day, Minister of Industry and Trade Tran Tuan Anh handed over the project agreement to the Japanese BOT investor Mitsubishi on the occasion of Japanese Prime Minister Shinzo Abe’s visit to Viet Nam.

Customs sector step up int’l cooperation

The General Department of Viet Nam Customs has recently issued a plan on international cooperation and integration in the 2016-2020 period.

The plan set to maintain and strengthen practical cooperation with customs agencies worldwide in facilitating trade; controlling and combating smuggling, trade frauds, illegal transportation of banned products and drugs across the border.

In addition, the plan targeted to negotiate, implement, and enforce commitments on integration.

The General Department also targeted to boost IT applications and broaden the automatic customs clearance system in accordance with international standards.

The plan figured out six key tasks on (1) strengthening and expanding bilateral cooperation on prevention of smuggling; (2) enforcement of international commitments on customs; (3) perfecting the legal system; (4) strengthening manpower on international cooperation; (5) enhancing dissemination of information; and (6) building and managing technical projects on the field./.

Master plan on thrift practice promulgated

The Government has recently issued an overall program on thrift practice and anti-wastefulness in the 2016-2020 period.

Under Decision 2544/QD-TTg, the program targets to exercise thrift practice in all aspects of the socio-economic sectors; and build programs on anti-wastefulness in 2016-2020.

In the 2016-2020 period, the program looks to implement the master scheme on economic restructuring in combination with transformation of the growth modals; carry out sectoral restructuring projects; restructure State budget; conduct close fiscal policies and flexible monetary policies in favor of macro-economic stability; prevent waste of natural resources; strive for less energy consumption per GDP (down 1-1.5% per year).

The plan also targets to tighten management and effectively optimize loans; gradually reduce Government guaranteed loans; control public debts under 65% and foreign debts below 50% of GDP by 2020.

The program also strives for higher average social investment capital (around 32-34% of GDP) in the period./.

HCM City industry developer sets up science-tech fund of $6 million

The Saigon Industry Corporation (CNS) has set up a fund for science and technology of VND136 billion ($6,025,547) since 2014, said its representative yesterday.

Of the amount, more than VND100 billion has been used for projects of investment expansion  and production renovation.

The company finished has cooperated with institutes, universities, startup groups and small and medium businesses in carrying out researches and development projects for the city’s growth.

Additionally, the company promoted investment in products, applied advanced management systems to monitor its activities and technology.

People’s Committee Deputy Chairman Le Thanh Liem said that the company should continue its activities and participate in the city’s economic development program especially the program to boost supporting industry and IT application.

One more direct flight from Da Nang to Hong Kong

Vietnamese low-cost airline, Jetstar Pacific this morning announced that its new direct flight from Da Nang to Hong Kong (China) will be officially put into operation on March 27th.

This is the third international air route of Jetstar Pacific. The Vietnamese low-cost airline used Airbus A320s aircraft with three flights per week linking Da Nang city and Hong Kong (China), falling on Monday, Tuesday and Saturday.

As plan, the flight will depart from Da Nang at 0:10 am on March 27th, and vice versa will take off from Hong Kong at 2:05 pm (local time). The flight duration is about one hour and 45 minutes.

The airline starts selling cheap tickets for the air route at VND 288,000 at 11am today until January 20.

The new air route is a part of Jetstar Pacific’s plan to expand its operation to the Northeast Asian countries.

In 2016, nearly 1.7 million international arrivals to Da Nang city increased 31.6 percent.

France joins funding for capital railway

Nearly VNĐ7.7 trillion (about US$340.7 million) of French governmental development assistance will be poured into the ongoing Nhổn-Hà Nội Station Urban Railway.

A signing ceremony Tuesday morning celebrated the official contract between the Hà Nội Urban Railway Project Management Unit (PMU) and French contractors.

Accordingly, the money, which covers all taxes and fees, will be used to design, supply and install the railway system with an engine, depot facilities and management systems for stations, signals, communications and electricity.

Head of the Hà Nội Urban Railway PMU, Nguyễn Cao Minh, said contract will help speed up the project as well as solve the project’s critical path method, namely tunnels and stations.

Minh said that the bidding plan for Package 6, as the project is known, was carried out in accordance with existing Vietnamese laws and donor regulations.

“The bidding and evaluation were closely and orderly implemented by investors, consultancy agencies, donors and relevant agencies. The joint-name contractors were evaluated to meet requirements of investors,” he said.

According to Minh, the contractors Alstom Transport S.A-Colar Rail S.A-Thales Communications & Security S.A.S are leading French companies with experience and capacity in urban railway building. In addition, they are eligible to donors’ requirements that devices must have originated from France.

"Upon completion of Package 6, along with other packages of the project, Hà Nội will have a completely new public transport mode with advanced standards that meet travel demands along the East-West corridor from the periphery to the center of the city,” Minh said, adding that the project will improve the capacity of public passenger transport and gradually build a civilised and modern capital.

French Secretary of State for Transport Alain Vidalies--who visited Hà Nội for the ceremony--called the signing an important milestone between the two countries, especially in the transport development strategy.

Hà Nội People’s Committee Chairman, Nguyễn Đức Chung, also stressed the importance of the project to the city, saying that its completion will help ease transport pressure and improve the city’s congestion.

"This project is not only important to Hà Nội but also will be a symbol of the co-operation between the two countries," Chung said.

Chung requested the PMU and contractors to accelerate construction to complete the project on schedule, and he proposed the people’s committee of Đống Đa, Ba Đình and Hoàn Kiếm districts to accelerate site clearance to implement the project properly and ensure absolute safety for workers.

A representative of the contractors committed to carry out the project with quality, with specialised trains designed and manufactured to meet the expectations of people in the capital city.

The Nhổn-Hà Nội Station Urban Railway is a part of the Hà Nội Pilot Light Metro Line Project. It will run 12.5km along the National Highway 32 from Nhổn in Bắc Từ Liêm District to Hồ Tùng Mậu-Cầu Giấy-Kim Mã-Núi Trúc-Cát Linh-Trần Quý Cáp-Hà Nội Station. The railway will include 8.5 km elevated through eight stations and 4 km underground through four stations and a depot in Nhổn. It has nine main packages including five construction and installation packages and four packages on facility systems.

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