Spanish interested in PPP deals

Spanish businesses are seeking to cultivate investment projects in Vietnam.

Last week saw high-level representatives of Acciona, the world’s biggest waste water treatment specialist, and energy and infrastructure development group come to Vietnam to work with the Ministry of Planning and Investment (MPI) and Ho Chi Minh City authorities on the possible construction of two waste water treatment projects.

Acciona’s international director Ortega-Loizaga Jose Maria said over the past months, the group had worked with the city’s authorities about the possibility of working on the World Bank-funded $450 million Nhieu Loc-Thi Nghe and $230 million Western Saigon waste water treatment plants in Ho Chi Minh City, under a public-private partnership (PPP) agreement.

Singapore’s UE Newater Vietnam and locally-owned DPD Investment and Construction companies have also expressed an interest in the Western Saigon project under PPP.

 Maria said Acciona had sought a South Korean investor for jointly implementing the Western Saigon project. The group stood ready to foot the bill for feasibility studies for the projects, and if the municipal authorities agreed to Acciona’s proposals, the projects would be implemented immediately.

“We also want to engage in many other such PPP projects in Vietnam,” Maria stressed.

“If these projects are implemented successfully by Acciona, they will be Vietnam’s first PPP waste water treatment projects, and Acciona will have more opportunities to do many other projects in Vietnam,” MPI Minister Bui Quang Vinh said.

Vinh said Acciona was just among many Spanish investors wanting to do business in Vietnam, after an investment promotion conference held by the MPI in Spain in April. The conference saw the participation of hundreds of Spanish companies.

“Within just three months, sixteen major Spanish firms have come to Vietnam to seek investment opportunities,” he said.

Tran Van Hung, vice president and general director of  BPA Group that specialises in producing trains in Europe, told VIR that BPA was assisting Acciona and other Spanish groups like Sacys, OHL, Navantia, Tango, and Mondragon in placing investments in Vietnam in infrastructure development, agricultural plant cultivation, waste water treatment and building-oriented security solutions.

BPA has successfully invested in Vietnam in car spare parts and rubber exports in recent years. BPA is currently seeking investment opportunities in the northern province of Quang Ninh to make wind turbine blades for power plants, desalination plants and waste treatment.

“Vietnam’s need for infrastructure works is huge and BPA’s investments are quite suitable to the country. Vietnam is currently the world’s third largest producer of natural high-quality rubber and this is very attractive to the global car making industry, among other sectors,” Hung said. “Vietnam is also big producer of essential oil used for making perfumes.”

Hung added that Acciona and Tango’s leaders were set to visit Vietnam in the coming period to discuss their participation in PPP infrastructure projects.

Vietnam currently has 38 Spanish investment projects with the total registered investment capital of $36 million.

Visit boosts Japan agri-business

Scores of Japanese firms are eyeing Vietnam’s agricultural sector as a potential investment goldmine.

Governor Masaru Hashimoto of Japan’s Ibaraki Prefecture who led a delegation to Vietnam last week said that the visit aimed to strengthening co-operation in several sectors, but especially agriculture. The 100-strong delegation of Japanese business representatives included 70 representatives with a particular interest in agriculture and represents part of efforts to realise high-level agricultural co-operation between Vietnam and Japan.

“We recognise that Vietnam has grown rapidly. With growth, we would like to strengthen co-operation in many fields such as food processing, labour sourcing, training and transfers of high technology,” said Hashimoto.

“There will be a new investment wave of Japanese enterprises into Vietnam after the two countries elevated their ties to a new level of extensive strategic partnership,” he added.

Taku Kaitsuka, director of baked sweet potato vendor Potato Kaisuka’s sales division in Ibaraki Prefecture told VIR that “this is the first time we’ve visited and surveyed Vietnam. Our aim is to co-operate with Vietnamese partners to build farms in the Central Highlands province of Lam Dong as well as supply our high quality products to Vietnam.”

Kazunari Sutou, senior assistant director for engineering affairs of Ibaraki Prefecture, said that Ibaraki’s feed sector had also developed and produced top quality soft marbled beef.

“Vietnam wishes to acquire experience in management, processing technology and product supply chains from Ibaraki,” Minister of Agriculture and Rural Development Cao Duc Phat told the Governor of Japan’s Ibaraki Prefecture, Hashimoto Masaru.

The minister hoped that the two sides would focus on technological co-operation, applying new technology to agricultural production, biotechnology, processing, and post-harvest preserving, while collaborating to increase the value of products along the processing chain.

On the occasion of President Truong Tan Sang’s visit to Ibaraki Prefecture in March, he mentioned he signed a memorandum of understanding to boost agricultural co-operation by supporting agricultural engineers training and applying advanced technologies in agricultural production.

In May, Governor Hashimoto said Vietnam’s Ministry of Labour, Invalids and Social Affairs and the Ibaraki Agriculture Association signed an agreement on receiving Vietnamese apprentices to learn agricultural techniques used in Ibaraki.

For the past five consecutive years, Ibaraki’s agricultural production value has ranked second in Japan, just after Hokkaido. Ibaraki has taken the lead in Japan in sales turnover of fruits and vegetates to Tokyo for the past ten years.

Safety, quality key to export growth

Ensuring food safety and security as well as higher-quality products would enhance the sustainable development of Viet Nam's agricultural sector, attendees said yesterday at a EuroCham seminar that discussed the status of the industry.

Thierry Rocaboy, an expert in the agribusiness and agrifood industry, told seminar participants that the country's food production for consumption had expanded greatly, with Viet Nam now playing a major role as a large exporter of farm produce.

However, he noted that export prices had remained low due to the quality of products, and that food safety, especially herbs and seafood products, were still of concern.

The value added to products was also low as materials were not locally processed, he said, adding that less than 10 per cent of coffee and 20 per cent of rubber were processed in Viet Nam.

Marieke Van Der Pijl, vice chairwoman of the Food, Agri and Aqua Business Sector Committee of Eurocham, said food safety was a key issue as demand for higher standards had increased from both export and local markets.

Further steps are needed to achieve efficient and effective food safety control, and co-operation with neighbouring countries should be enhanced to address cross-border food-safety issues.

Improved food-safety management and enforcement would also help export growth, she said.

Also speaking at the seminar, Alain Cany, country chairman of Jardine Matheson Viet Nam, said the sector should develop measures to create brands for Vietnamese farm produce in an effort to increase export value.

Another pressing concern mentioned at the seminar was climate change. Arie Veldhuizen, agricultural counsellor at the Dutch Embassy in Ha Noi, said the world population was forecast to reach nine billion by 2050, with climate change expected to undermine agriculture and food systems in many regions, making it difficult to achieve food security.

Under such a scenario, it is necessary to create a sustainable increase in agricultural productivity and resilient food systems.

"The key for Viet Nam to ensure food security and sustainable development should be based on science and technology," he said.

The country should focus more on restructuring the agricultural sector to improve productivity, quality and efficiency, ensuring sustainable food security while protecting the environment, he said, adding that efficient co-operation among different stakeholders was also needed.

Delegates at the seminar said that costs and post-harvest losses were too high, mainly due to weak logistics services.

Currently, 20 per cent of seafood, 25 per cent of fruit and 30 per cent of vegetables produced in Viet Nam are lost due to deficient logistics.

Nguyen Tien Dinh at the Rural Development Centre under the Institute of Policy for Agriculture and Rural Development said demand for meat and dairy products would continue to increase.

To further develop the animal feed industry, improvement must be made to small-scale and fragmented manufacturing, ineffective supply chains with too many intermediaries, quality of animal feed, and food safety.

Other seminar speakers mentioned the challenges in agricultural mechanisation.

Farmers have not been using advanced mechanical methods for several reasons: financial problems, a lack of understanding and application of advanced technology, a lack of special expertise, and the use of small and split fields, especially in northern and central regions.

Despite robust growth of the agricultural sector and Government incentives, foreign investment in the sector remains low compared to other industries, accounting for about 0.5 per cent of total foreign direct investment in the country.

Since the sector is heavily dependent on natural conditions, it poses higher risks for investors. Inefficient, small-scale dispersed production, and a shortage of infrastructure had contributed to investment problems as well.

Seminar attendees urged the Government to develop clear incentives and transparent policies, reduce licensing and land procedures and costs, apply policies and regulations in a uniform way across regions, and focus on protection of investors' rights.

In addition, authorities should consider ways of promoting more public-private partnerships in the agricultural sector, they said.

Luong Van Tu, chairman of the Viet Nam Coffee and Cocoa Association, suggested that EU investors increase investment in processed coffee and provide loans for replanting old coffee farms.

The seminar was organised by EuroCham, its Food Agri Aqua Sector Committee and the EU Viet Nam Business Network.

Attendees included Government officials, public- and private-sector practitioners, agribusiness leaders and researchers.

Canadian market offers opportunities

Vietnamese companies have yet to exploit the full potential of the Canadian market, which was described as lucrative because of its significant import volume.

At a conference held in the capital city yesterday, Hoang Van Dung, vice chairman of the Viet Nam Chamber of Commerce and Industry, said that ever since the two countries signed a bilateral trade agreement in 1995, trade relations between Viet Nam and Canada experienced a 20-fold increase, reaching US$2.2 billion in 2013.

Last year, Viet Nam enjoyed an export surplus of more than $1 billion using key items such as textiles and garments, agricultural and wood products, as well as footwear, seafoods and computers.

However, Canada has yet to be included in the list of Viet Nam's 20 largest export markets and accounted for less than one per cent of exports, said Zaki Munshi, Project Manager Asia at TFO Canada, a non-profit non-government organisation that facilitates access to the Canadian marketplace.

Viet Nam's main exports to Canada were somewhat different from its global exports, which were focused on crude petroleum and rice, Munshi noted.

To increase trade with Canada, Munshi suggested that Vietnamese companies identify other exportable products and services with potential in Canada while seeking to maintain their competitive advantage.

The companies should also make greater efforts to explore the full potential of the seafood and electronics products segments, Munshi added. He also stressed the importance of registering companies' business profiles and export offers on TFO Canada's website, where less than 30 Vietnamese companies were currently registered.

At the event, participating Vietnamese companies also learned more about Canada's consumer and market trends, legal environment, tariff treatment and modes of transport.

According to the Ministry of Industry and Trade's American Market Department, exchanges of government and business delegations and trade information should be accelerated.

Vinamilk suffers 16% fall in net profit

Vinamilk (VNM) achieved a net profit of nearly VND4.3 trillion (US$202.8 million) in the first nine months of this year, representing a 16-per cent year-on-year decline.

A report from HCM City Securities Company also revealed that Vinamilk's revenues increased by 12 per cent year-on-year, hitting VND25.6 trillion ($1.2 billion), while sales from domestic operations climbed by 8.6 per cent even as export turnover fell by 27 per cent.

However, the company's 70-per cent stake in US-based subsidiary Driftwood Dairy is expected to yield VND1.8 trillion ($84.9 million).

In the third quarter alone, the company's revenue was estimated at VND8.3 trillion ($391.5 million), a 7.8-per cent year-on-year increase but also a 6.3-per cent quarter-on-quarter decrease.

Gross profit margins in the third quarter increased slightly because of lower input costs and in spite of higher selling, general and administrative expenses.

HCM City Securities lowered its revenue forecast but maintained its profit forecast for this year. The brokerage company expects more prospects for Vinamilk next year as domestic demand could improve and gross domestic profit could rise if input prices continued to decline.

HCM City Securities also predicted Vinamilk's revenues to reach VND38.8 trillion ($1.8 billion) and profits to reach VND7.9 trillion ($372.6 million) next year.

Vinamilk is set to reach a deal this month which allows the group to buy material for next year's operation at $3,000 per tonne, or 24 per cent less than this year's cost.

Earnings per share in the fiscal year of 2015 is estimated at VND8,360 ($0.3), a 35.8-per cent increase. VNM share prices dropped by 1.9 per cent yesterday to VND106,000 ($5) per share.

VN to pilot individual e-tax payment next year

The General Department of Taxation will pilot e-tax payment at the beginning of 2015 with a view to making it easier for individual tax payers.

Tax payers will carry out their tax duties at the Portal of the taxation, from tax registration, enumeration, payment to seeking tax-related  answers and searching relevant information.

In the short term, the General Department would pilot in two localities before expanding it to others in coming years.

So far, 63 cities and provinces and over 300 taxation branches have applied e-tax registration services.  

The e-tax registration system provided services for over 397,130 tax payers and handled over 17.6 million dossiers.

E-tax payment services have been implemented in 18 provinces and cities nationwide with nearly 4,000 enterprises and VND 2 trillion of tax collection.

Corporate borrowers still shun bank loans

Local enterprises have still shied away from bank loans although lending rates have dropped to new lows over the past years.

At a meeting between National Assembly deputies in HCMC and bank and business representatives on Monday, most enterprises said they have no demand for new capital given current economic difficulties.

A representative of the HCMC Enterprise Association said he used to deliver thousands of credit application forms to enterprises at seminars but only a few firms had returned the papers to him. This indicated that they were not interested in taking out bank loans.

Do Duy Hung, general director of Viet Capital Bank, said banks now need corporate borrowers more than enterprises do. The lender has still set aside some VND2.45 trillion worth of loans for businesses but few companies have reached the credit package.

Nguyen Quang Triet, deputy general director of Eximbank, said the bank is in the same situation.

Meanwhile, enterprises said lending rates are still high.

According to the association representative, banks only offer low lending rates in the first months. Some banks have launched credit packages with lending rates of 5-6% per annum but the lending rates for enterprises are 10-12% per annum.

Representatives of 11 banks at the meeting said the gap between mobilization and lending rates vary from 2.5 to over four percentage points at banks. Many banks have offered lending rates from 5-6% per annum but applied in the first several months only.

Do Minh Toan, general director of Asia Commercial Bank (ACB), said its mobilization rates average at 5.74% per annum and lending rates at 9.79% per annum. ACB has also launched a credit program for enterprises with an interest rate of 7% per annum in the first three months and 8% in the following three months.

Hung of Viet Capital Bank said the lender has offered lending rates of nearly 8% per annum in the first six months but then it has to revise rates following market levels. The bank has also introduced a credit package with an interest rate of 5% per annum but applicable in three months only.

Borrowers should use bank capital fast to enjoy low lending rates but most firms fail to meet conditions, Hung said.

Le Tung, chairman of Saigon Trading Group (Satra), said Satra’s affiliates are not able to reach unsecured loans and they have no demand for capital. Enterprises find it hard to gain profits due to low buying power if they take out bank loans.

Companies are also facing a host of difficulties in tax and business registration policies.

Moreover, banks only want to extend loans to good enterprises for fear of bad debt. Banks are currently using different ways to handle bad debts, including selling their debts to Vietnam Asset Management Company (VAMC), but the process has yet to bear fruit.

Nguyen Hoang Minh, deputy director of the central bank in HCMC, said mobilization at banks in the city in the first nine months of this year was estimated at VND1,226 trillion, up 11.6% against the same period last year and 4.7% over early this year.

Total lending in the period was more than VND1,010 trillion, rising by 10.6% year-on-year and 6.02% over late last year. The credit growth was backed by manufacturing and trading sectors, which accounted for up to 80% of the outstanding loans.

Demand for senior staff in manufacturing sector jumps

The manufacturing sector had the highest recruitment demand for senior and middle-ranking employees in the third quarter of this year, accounting for 17% of the total demand as indicated in a report released on Monday by Navigos Search.

The result of Navigos Search, a leading executive recruitment firm in Vietnam, is consistent with the Purchasing Managers’ Index (PMI) report of HSBC Bank, which showed that the number of orders of the manufacturing sector increased again in September, reflecting a business pickup in the sector in the coming time.

The information technology sector posted the strongest growth in demand for senior and middle-ranking personnel during the period, making up 15% of the total.

According to economists, the strong growth in the demand for middle- and high-ranking personnel of the information technology industry mainly results from business modernization, policies of the Government to encourage this sector, and the outsourcing development in Vietnam. In addition, the country is on the way to become a key production base for many electronics giants of the world.

Senior and middle-ranking employee demand of the apparel and leather-shoe sectors accounted for 10% of the total, bringing the sectors to the third position in the demand ranking from the fifth position in the previous quarter.

The retail and consumer goods sector made up 9% of the total demand for such employees, falling from the previous share of 14% in the second quarter while demand of the finance-banking-stock-insurance sectors fell to 7% in the third quarter from the previous 10%.

Initial survey of Navigos conducted in the early days of October showed that the apparel and leather-shoe sectors had the highest demand for senior and middle-ranking personnel, accounting for 17% of the total, followed by the information technology and consumer goods and retail sectors with 12% each.

Vinacco raises VND14.7 billion from IPO

Agricultural Construction and Rural Development Corporation, or Vinacco, raised over VND14.7 billion from its initial public offering (IPO) at the Hanoi Stock Exchange (HNX) on October 14.

The firm put up over 2.6 million shares, or 34.75% of its chartered capital, for auction with the starting price of over VND10,000 each.

Four individual investors bought over 1.47 million shares, or 55.7% of the total volume. The biggest bidding volume was 1.1 million shares and the average winning price was equivalent to the starting level.

Foreign retailers grow the fastest

Foreign-invested retailers posted the highest growth rate in the January-September period, though they are holding market share of only 3.4%, said the Association of Vietnam Retailers at a forum in Hanoi on Monday.

Dinh Thi My Loan, president of the association, said foreign retailers obtained a growth rate of over 21% in the nine-month period compared to 8.4% at State-owned enterprises and 11% at private entities.

However, of the total retail value of commodities and services at VND2,100 trillion in January-September, foreign retailers occupied only 3.4% compared to 10.1% held by the State sector and over 85% by the domestic private sector. Overall, Vietnam’s total retail sales of goods and services increased over 11% year-on-year.

Loan, by giving the market share comparison at this seminar about the vision and path to retail success, brushed aside concerns that foreign retailers are gaining an upper hand in the retail sector.

“It looks as if foreign enterprises were taking a larger share of the retail market because they launch effective publicity campaigns when coming into Vietnam. In fact, most of them invested in modern retail channels which account for only some 25% of the sector,” she said.

However, foreign investors paid little attention to other channels like traditional wet markets, small shops and the like, which account for a combined 75% of the sector.

Besides large foreign firms, many domestic enterprises have won the confidence of consumers, such as Coopmart, Fivimart, Intimex, or some electronic firms such as Nguyen Kim, Tran Anh, Pico and so on. Local retailers have advantages in distributing high-quality Vietnamese goods and maintaining close relationships with domestic suppliers.

Alan David Treadgold, member of the Advisory Council of Oxford Retail Management Institute, considered local retailers cannot compete with FDI businesses in terms of technology when customers are changing their shopping habits gradually. More buyers will be in favor of online shopping rather than traditional ways, so Vietnamese retailers need to change to adapt to new trends, he said.

According to him, foreign retail firms only enter Vietnam’s market when they are sure of success. Therefore, local firms have to well-prepare for technology and manpower, review business operations and reduce costs to compete with FDI businesses.

ADB huge source of aid

The Asian Development Bank (ADB) has provided nearly US$13.1 billion in loans, technical assistance and non-refundable grants for Vietnam’s development since it resumed operations in the country in 1993.

The State Bank of Vietnam (SBV) announced the figure in a statement released on October 13 on the occasion of ADB Executive Director Maliamibin Hamad’s visit to Vietnam on October 10-13 as part of the annual activities of the financial institution’s board of directors to exchange socio-economic updates of developing member countries in the region as well as look into the effectiveness of development projects and programs funded by ADB.

Of the nearly US$13.1 billion provided for Vietnam as of last month, ADB lent US$12.7 billion to 157 programs and projects, offered US$253.5 million in technical assistance and US$170 million in non-refundable aid.

ADB has pledged around US$1.3 billion a year for projects in the fields of transport, energy, agriculture, natural resources, water supply, infrastructure, urban services, education and finance in Vietnam.

At the meeting with deputy governor of SBV Nguyen Thi Hong last week, the executives of ADB highly evaluated Vietnam’s achievements in stabilizing the macro-economy and the central bank’s efforts to conduct monetary policy effectively, rein in inflation, stabilize foreign reserves and consolidate commercial banks. Both sides also discussed issues regarding the restructuring of the banking system and bad debt settlements.

The executives of ADB also met the Ministry of Planning and Investment, the Ministry of Finance, and the government of HCMC, and visited a number of ADB-funded projects in the central province of Quang Nam and HCMC.

ADB reaffirmed its commitment to helping Vietnam complete and implement the legal framework for public-private partnership (PPP) at the meeting with the Ministry of Planning and Investment.

This year, ADB has pledged more than US$1.36 billion for 11 programs and projects. Negotiations for seven of these programs and projects with around US$878 million have been completed so far.

Construction project owner must seek planning paper

Owners of construction projects themselves in the near future will have to obtain planning certificates for their works in areas where detailed zoning plans have not been available, a task so far mainly assumed by local State agencies.

Under a draft decree on planning for construction works, which is expected to be issued and take effect next January, provincial governments will consider and issue planning certificates for projects covering over 50 hectares, while smaller-scale projects will be considered by district-level authorities.

This rule applies to projects to develop groups of construction works as well as to those schemes to build separated construction works. However, it does not apply where separated houses are built by individuals.

Owners of projects in those areas where detailed zoning plans are available must also obtain planning certificates if such areas are subject to changes to land boundaries or land-use norms, according to the draft decree due to take effect on January 15.

To receive the certificate, investors have to submit full dossiers to competent agencies, including an application form for the planning certificate, a sketch or diagram showing the location of the project, the expected construction site, the land-use scheme, project scale and cost, reports on the legal status of the project owner and its financial capability.

The competent agencies will have 45 days to collect comments, review, evaluate projects, and grant the certificates.

Contents of the planning certificate will specifically regulate requirements for each project, such as the land-use scheme, public infrastructure, greenery, and design among others.

The Ministry of Finance will provide detailed guidance on fee collection for awarding the certificate, which will be calculated based on the total investment capital of projects.

Unfair competition, absence of standardized products hurt Vietnam fruit in strict markets

Vietnam’s fruit exports to the U.S., South Korea, and Japan remain modest due to a lack of standardized products, plus unhealthy competition among local firms, even though many Vietnamese-grown tropical fruits have been allowed to enter these strict markets, statistics have shown.

Since 2008, the U.S., Japan, South Korea, Chile, Taiwan and New Zealand have opened their doors to Vietnamese dragon fruit. Rambutan has also been accepted by these strict markets.

However, Vietnamese fruit exporters say they lack adequate supplies for the fruits and face fierce competition from Thailand and Taiwan.

Vietnam shipped 1,300 metric tons of dragon fruit to the U.S. in the first nine months of this year, and the full-year figure is projected to reach 2,000 metric tons, according to the Plant Protection Department under the Ministry of Agriculture and Rural Development. Dragon fruit shipments to the U.S. topped 1,300 metric tons last year.

In the meantime, Japan imported 900 metric tons of Vietnamese-grown dragon fruit in the nine-month period, a slight increase from 800 metric tons a year earlier.

Vietnamese fruit export businesses say the volumes shipped are much smaller than demand for the fruit in these markets.

Vietnam sells around 3,000 metric tons of the red-skinned fruit with white flesh to the U.S., Japan, and South Korea every year, which is less than one percent of the total exports of the fruit, according to businesses.

The Southeast Asian country still has to sell 80 percent of its dragon fruit crops to China, mostly via risky cross-border transactions.

Exports of Vietnamese rambutan to the said countries have posted even lower volumes and expanded by almost zero percent thanks to harsh competition, according to industry insiders.

The real volume of Vietnamese dragon fruit exported to the U.S. compared to the potential for development there is “just a drop in the ocean,” said Vuong Dinh Khoat, general director of Hugo Co., a fruit exporter in Ho Chi Minh City.

Khoat said the problem facing fruit exporters is that they cannot source enough standardized products to increase export quantities.

“We have provided tech support for many dragon fruit plantations, but only 10 percent of their yields are qualified for export to the U.S.,” Khoat admitted.

Nguyen Hong Hung, a former deputy director of Yasaka, a food irradiation company based in the southern province of Binh Duong, pointed out another reason behind the poor penetration of Vietnamese dragon fruit into Japan.

There are more exporters who sell dragon fruit to the East Asian country, and some of them have competed by reducing their prices, Hung said.

Yasaka was the first Vietnamese company to export dragon fruit to Japan, in 2009.

“At that time our export price was US$5 a kg, but now some local businesses ask for only $2.5 per kg,” Hung said.

Many Vietnamese catfish and rice exporters have been hurt by this unhealthy competition method, in which export prices are constantly lowered, he added.

While Vietnam used to be the only exporter of dragon fruit to Japan and the U.S., the country now faces challenges from Taiwanese and Thai competitors, according to Nguyen Huu Dat, director of the Post-Entry Plant Quarantine Center, under the Vietnamese Ministry of Agriculture and Rural Development.

Taiwan used to import thousands of metric tons of dragon fruit from Vietnam, but is now able to grow the fruit on home soil and has passed procedures to export to Japan, Dat said.

Thailand is also taking steps to export irradiated dragon fruit to the U.S., he added.

Local firms adopt sustainable practices

The difficulties they faced in production and business during the economic downturn have encouraged domestic enterprises to follow sustainable development practices now and in the future, according to experts.

The Viet Nam Chamber of Commerce and Industry (VCCI) reports that Viet Nam has 485,265 enterprises, but their numbers have increased slowly and their structure has developed well.

The economic difficulties in recent years have had strong impact on the production and business of these enterprises, VCCI says. In the first nine months of this year, the nation had 53,192 newly established enterprises and 11,872 enterprises that resumed work after suspending their operations temporarily.

Meanwhile, 48,330 enterprises which faced difficulties in production and business stopped operations or were dissolved in the first nine months of this year.

The VCCI says the fall in the number of newly registered enterprises and the large number of enterprises that stopped operations or were dissolved show that the local business environment is still facing difficulties, reports the Tin tuc (News) newspaper.

However, the chamber says that the difficulties in production and business have forced the existing enterprises to improve their quality.

Efficiency in production and business has increased and many enterprises have expanded business during the economic downturn.

The percentage of enterprises making pre-tax profit has increased from 29.7 per cent in the first quarter to 32.9 per cent in the second quarter, according to the VCCI's report on enterprises in the first half of this year.

The confidence of the local business environment has improved and is expected to be even better in the second half of this year and later, as against the first half of this year and last year, the report says.

"There was a period when the number of local enterprises exceeded 700,000 units. Now that number has fallen, but the quality of the enterprises has improved sharply," says Cao Sy Kiem, Chairman of the Small and Medium-sized Enterprises Association.

"The enterprises have adjusted business strategies and paid attention to management, especially risk management, to strengthen the foundation of a more sustainable development," he adds.

The state has completed the legal system for enterprises to create transparency and synchronisation in the business environment, Kiem says, adding that it is the key target of the government to resolve the difficulties for the local enterprises.

"Enterprises expect amendment of the laws on Enterprise and on Investment to create breakthroughs in their management and in the opportunities to develop business and reduce costs," says Nguyen Thi Nguyet Huong, Chairwoman of the Viet Nam Investment and Development Group.

The Law on Enterprise will help enterprises expand their business and reduce the cost of setting up businesses and operating them, Kiem says.

Additionally, the state should have specific policies to support enterprises in establishment and development, including giving them preference in credit, provide training for a high-quality workforce and ensure a fairer business environment among economic enterprises, he says.

Nguyen Huu Toan, director of the Toan Thien An Furniture Co Ltd, says that most small and medium-sized enterprises have neither had much knowledge about support policies, nor taken advantage of them or of the state incentive capital.

In the near future, Viet Nam will sign many free-trade agreements, including of TPP and the ASEAN Economic Community. So it will be easier for enterprises to move capital, investment and workers. They will also face several challenges from the foreign companies that will enter the local market following the free-trade agreements, he says.

Therefore, the local enterprises should have specific solutions for long-term and more reasonable and efficient business strategies, says Toan, adding that they should do core business and avoid investment in non-core business to reduce risks.

Banking sector lacks skilled execs

Viet Nam's banking industry will be facing a serious shortage of high-ranking human resources in the next five to 10 years unless it implements timely training strategies.

The online news portal infonet quoted figures from the Institute of Manpower, Banking and Finance (BTCI) showing that 4.84 per cent of the banking system's high-ranking human resources are currently aged more than 50 years and will be retiring in the next five to 10 years.

The resources include risk management experts and senior managers, as well as investment and financial experts. Experts have urged banks to map out long-term strategies for the early training of outstanding candidates for ranking management positions who are capable of leading the banking system in accordance with regional standards.

Besides, the institute said, the ageing workforce possesses invaluable experiences in overcoming financial crisis that banks should capitalise on.

The figures also showed that roughly 60 per cent of the banking industry's workforce was currently aged less than 30 years and would be considered the next leading generation who would decide the banking industry's future competitive capability.

The entire banking industry workforce is also forecast to continuously increase by roughly eight to 10 per cent per year in the coming years, reaching 240,000 by 2015 and 300,000 by 2020.

Fuel price cuts have no impact

The prices of consumer goods and services remained the same in spite of the sharp cut in petrol and oil prices this year.

This week, and for the seventh time this year, the prices of petroleum and oil products were reduced, with petrol falling to VND22,890 per litre, a 10.7-per cent decrease compared with that in July.

When petrol prices were raised this year, numerous transport companies joined producers and suppliers of consumer goods in increasing their prices to offset the petrol price increase.

Vu Vinh Phu, chairman of the Ha Noi Supermarkets Association, said the petrol and oil price reduction would immediately impact on transport fees, which would, in turn, impact on the prices of consumer goods.

Phu noted that consumers were at a disadvantage now as transport fees and the prices of consumer goods remained the same.

However, transport companies gave various reasons for maintaining prices. Nguyen Van Thanh, chairman of the Viet Nam Automobile Transportation Association, said fuel costs accounted for roughly 40 to 50 per cent of transport fees, so the fees would be adjusted in accordance with fuel price fluctuations.

Thanh added that though petroleum and oil prices were reduced seven times this year, the cut each time was only for a small percentage, so transport companies were finding it difficult to immediately cut prices.

He remarked that after an increase or decrease in petrol and oil prices, transport companies needed more time to make the calculations that would serve as the basis for transport fee adjustments.

Taxi and passenger transport companies will also find it difficult to make any adjustments as they have to reprint tickets, adjust taxi metres and seek tax agencies' approval, Thanh added.

The companies can adjust prices if the petrol and oil price decrease or increase lasts for a long time, he noted.

Thai Van Chung, general secretary of the HCM City Transportation Association, said transport companies often increased their fees when petrol and oil prices rise by five per cent, so the reduction was often the same.

However, the reduction in petrol and oil prices this year was only roughly one to two per cent each time, so the decision to cut transport fees would depend on the transport companies, Chung added.

Since transport companies were maintaining their prices, producers and suppliers of consumer goods said they would likewise maintain theirs.

Meanwhile, the Ministry of Industry and Trade said it could not intervene, as the market mechanism was managing the prices of consumer goods and services except for electricity, water and petrol.

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