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BUSINESS IN BRIEF 18/9

 Tax incentives likely for tech-savvy enterprises; Vinh Long courts investors to back $1.1b project plan; Auto sales August surge bodes well for yearly target; Healthy appetite for animal feed raw material imports

Exports to UAE increase by 111% year on year

Vietnamese exports to the United Arab Emirates (UAE) during the first seven months of 2013 totaled US$2.29 billion, an increase of 111% over the same period last year.

Statistics from the Ministry of Industry and Trade’s Department of African, West and South Asian Markets also show that Vietnam imported US$204 million in goods from the UAE during the seven month period.

The country is currently Vietnam’s largest trade partner in Western Asia and its 17th largest export market overall. The UAE has great potential demand for many Vietnamese exports, especially cell phones, electronic products and components, textiles, footwear, seafood and agricultural products, spices, processed foods, building materials, and tropical fruits and vegetables.

Trade relations between the two countries have developed rapidly in recent years. Two-way trade has increased from US$550 million in 2008 to US$2.38 billion in 2012.

In 2012, Vietnam's exports to the UAE exceeded US$2 billion for the first time, while imports from the UAE reached US$303 million.

During the first seven months of this year, exports of cell phones and components surged by 164.5% over the same period in 2012 to hit US$1.92 billion, accounting for 84% of Vietnam’s total export revenue to the country.

The second most valuable export industry was the grouping of computers, electronic products and components, which brought in US$96.97 million, up 3.2% year on year. Textiles surpassed pepper to take third with an export value of US$39.2 million, a year-on-year increase of 25.3%.

Rice exports earned US$5.69 million in revenue (up 102.5%), and wood and wood products increased by 42.3% to reach US$8 million.

In recent years, many prestigious UAE corporations like DP World, Mubadala Petroleum, Dubai Holdings, Limitless, Tamouh and Global Sphere have sought out investment opportunities in Vietnam.

Vietnam Royal Group and UAE Global Sphere are considering the possibility of a lucrative real estate project in Vietnam named ‘Hanoi Wall Street’, with a total investment of up to US$30 billion.

Vietnam’s businesses plan to open a warehouse for Vietnamese export products in the UAE to serve as a hub for Vietnamese products brought into the UAE and surrounding markets.

The Department of African, West and South Asian Markets said that with its advantages in agricultural production, food processing and fisheries, Vietnam can co-operate fully with the UAE to ensure food security.

Vietnam is currently the world’s top exporter of coffee, cashews, and pepper, and it ranks second in global rice exports. Vietnam can certainly act as a reliable supplier of rice, fish, meat, coffee and tea to the UAE.

In addition, the UAE can also serve as an important gateway for Vietnamese goods to reach other markets, such as the GCC countries, the Middle East and North Africa.

Vietnam leads swimming crab exports to Japan

Japan was Vietnam’s leading swimming crab consumer, both in volume and value, in the first seven months of this year.

In the first half of the year alone, it shipped more than 11,000 tonnes of swimming crab to Japan, accounting for over 60% of the country’s total imports.

The Vietnam Association of Seafood Exporters and Producers (VASEP) attributed the rise to the Vietnamese products’ competitive selling price, standing at 1,871 Yen/kg.

China kept the highest crab export price to the Japanese market with 3,815 Yen/kg, followed by Philippines (2,656 Yen) and Bangladesh (2,194 Yen).

China and Bahrain currently rank first and second in frozen crab exports to Japan, with the price of 456 Yen and 409 Yen per kilo, respectively. Vietnam, the Republic of Korea and Indonesia are the countries with the the highest average export price of 1,300-2700 Yen per kilo.

Japan imported nearly 7.5 tonnes of crab worth 4.45 billion Yen in seven months, down 1% in volume and 10% in value compared to the same period last year.

Vietnam-Angola investment cooperation in focus

A roundtable conference was held by the Embassy of Vietnam in Angola on September 15 to promote investment cooperation in the country.

Present were Vietnamese Ambassador Do Ba Khoa and 60 education and healthcare experts, businesses and contractors operating in Angola.

They analyzed the strengths and weaknesses of Vietnamese investors as well as opportunities and challenges facing them in the future.

They agreed that it’s necessary to build a common strategy to exploit every opportunity for businesses of the two countries to improve healthcare and trade cooperation.

Businesses and contractors reached a consensus on cooperating in building a high-quality medical laboratory, Vietnam-Angola general hospital, and Vietnam commercial centre and set up a major construction company. Dozens of Vietnamese and Angolan investors pledged to provide capital for these projects.  

Vietnam-Netherlands trade rises sharply

Two-way trade turnover between Vietnam and the Netherlands reached a staggering US$2.1 billion in the first seven months of this year, up 16% compared to the previous year.

A recent business forum in the Hague was told that Vietnam’s exports alone were US$1.65 billion, up 20.4%.

Vietnamese exports to this European Union nation have risen by 15% annually since 2002. The value exceeded US$2.47 billion in 2012, a year-on-year increase of 15.2%.

The Netherlands is currently the third largest consumer of Vietnamese products in the European Union, after Germany and the UK.

Vietnam predominantly exports computers, electronics and components, equipment and tools, seafood, plastics, pepper, wood and timber products to the Netherlands.

Despite a modest value of more than US$205,000, exports of gemstone and precious metals have grown by 591.4%.  In addition, chemical exports also rose by 528% to over US$5.4 million.

The Netherlands is also the largest importer of Vietnamese fruit and vegetables.

The Netherlands is considered a gateway for Vietnamese products to penetrate the EU.

The forum attracted more than 100 Dutch and 15 Vietnamese businesses operating in the Netherlands, as well as those from Vietnam’s An Giang province.

Speakers introduced potential fields for the two countries to boost cooperation, such as agriculture, water management, trade and logistics.

They reviewed the collaborative results from the past 40 years looking at the business and investment environment and real experiences.

They also examined future cooperative prospects for the two business circles, especially after negotiations of Vietnam-EU Free Trade Agreement and Trans-Pacific Partnership (TPP) end.

In the context of global economic downturn, the forum contributed to expanding export markets, attracting foreign investment and marking the 40th anniversary of diplomatic ties between Vietnam and the Netherlands.

Tra fish shortage grinds production to a halt

The shortage of Tra fish is expected to last until the end of this year and beyond, forcing almost all Tra fish export processing factories to temporarily halt production, according to an official from the Vietnam Association of Seafood Exporters and Producers (VASEP).

Duong Ngoc Minh, VASEP Deputy Chairman said on September 15 that Tra fish was becoming more and more acute because its price had increased to VND23,000 per kilo, but enterprises could only buy Tra fish of a high enough standard for export processing.

Tra fish between 0.8-1 kilo per unit is already sold out in the local market.

Currently, 30 of 70 existing Tra fish processing factories are relying on specific Tra fish farming regions to supply 30% of their factories’ demand, Minh said.

The factories are expected to use their existing stocks within 10-15 days will then be forced to halt production, he added.

According to a VASEP survey, total output of Tra fish to the end of 2013 is estimated at 50,000 tonnes, including 30,000 tonnes farmed by enterprises and 20,000 tonnes raised by farmers. Meanwhile, the factories require 300,000 tonnes to meet demand.

With the Tra fish export season about to start, customers need huge volume but local Tra fish stocks have been exhausted, Minh said.

The impending situation was first flagged at the start of this year, Minh said, adding that many enterprises lacked the investment needed to rear Tra fish because the high production costs of VND21,000 per kilo meant they bought Tra fish for export from farmers at the lower price of VND18,000-19,000 per kilo.

As a result, farmers were required to increase production and were exposed to greater losses, while enterprises had been unable to form contingencies for the inevitable shortage, Minh added.

Minh said the situation would continue into next year because the volume of Tra fish varieties currently being produced is just half of last year’s output.

The 2013-2013 crop would produce 500,000-600,000 tonnes of Tra fish to meet just half of local demand, Minh concluded.

Tax incentives likely for tech-savvy enterprises

Tax incentives would be provided to enterprises operating in the field of high technology and those in agriculture with high-tech application, aiming to encourage enterprises to strive for more added values.

According to the amended Law on Corporate Income Tax, high-tech enterprises would be imposed a tax rate of only 10 per cent in 15 years in comparision with the current normal rate at 25 per cent which would be cut to 22 per cent from January 1, 2014.

They would be provided tax exemption up to four years since having taxable income and 50 per cent tax reductions in the nine following years.

The Ministry of Finance was drafting a decree which would provide detailed instructions for the implementation of the amended Corporate Income Tax law which was passed in June and would take effect from the beginning of this year.

The ministry said that currently, there are enterprises enjoying tax incentives at the highest level for their investments in high-tech and economic zones and in localities with difficult socio-economic condition.

The draft circular will point out how these enterprises – which already enjoy tax incentives – would continue to receive incentives if certified as high-tech.

The ministry was also considering to provide a full package of tax incentives to enterprises that begins on the date that they are certified high-tech companies, regardless of any previous incentives.

This option would encourage them to develop into high-tech ones, however; they could easily take advantage of it to prolong their time for enjoying tax incentives.

The second option was that previous incentives would be accounted.

The amended law would also provide incentives to enterprises' new investments in industrial zones.

Accordingly, enterprises with new investments would enjoy tax exemption for two years and 50 per cent tax reduction in the four following years.

Vinh Long courts investors to back $1.1b project plan

The Cuu Long (Mekong) Delta province of Vinh Long announced a list of 47 key projects to attract investment from now to 2015, according to the provincial People's Committee. In total, the projects will cost an estimated VND23.2 trillion (US$1.1 billion).

Over VND11.15 trillion ($531.2 million) will go to 15 infrastructure construction and industry projects while VND6.76 trillion ($322 million) will be set aside for urban and housing development.

In the trade and service sectors, the province is seeking investment for 15 projects worth VND2.57 trillion ($123 million) with a focus on developing infrastructure for traditional and agricultural wholesale markets and building more modern trade centres.

Sports and tourism, environmental protection and training and education are expected to attract VND2.72 trillion ($129.3 million) in investment.

The province offered investment incentives to domestic and foreign investors, including financial support in drawing up detailed plans and building projects as well as administrative assistance.

Investors can also seek assistance with technology, land compensation and clearance.

The province is reforming administrative procedures in order to implement a one-stop shop mechanism, which would be more convenient for investors, said Le Quang Trung, director of the province's Department of Planning and Investment. If investors ran into difficulty with their projects, provincial authorities would arrange direct meetings with local governments to help them.

The province is also focusing on high-quality human resource training, he said.

According to the Foreign Investment Agency, Vinh Long attracted 23 foreign-invested projects with capital totalling $111 million so far this year.

Auto sales August surge bodes well for yearly target

Automobile sales of the Viet Nam Automobile Manufacturers Association in August saw a growth of 12 per cent year-on-year, showing good signs for the market from now to the end of the year, according to VAMA.

In its report for August, VAMA said that sales in August of its members totalled around 7,900 units, of which nearly 3,100 units were cars and more than 4,800 others were trucks.

"This is the fifth consecutive month that industry volume has been higher than the same period last year," the report said.

Although the number was higher than the corresponding time last year, sales in August fell in July by 22 per cent in cars and 11 per cent in trucks.

Traders explained that in the last month of the lunar calendar, people have a habit of buying very little.

During the month, Toyota, Thaco Kia, Ford and Honda were best-sellers.

According to VAMA, after lunar July, the market will then pick up until the year-end.

Because of this reason, several companies have carried out many promotions and started new series in order to increase their sales.

A report from Thoi Bao Kinh Te Viet Nam (Viet Nam Economic Times) said that Thaco Kia had cut VND40 million (US$2,000) for each Kia Forte and support for 3 per cent of registration fees for Kia Picanto, Kia Carens and Kia Sorento.

GM will present 1,000 litres of petrol and cut prices by up to VND52 million ($2,600).

Meanwhile, Ford Viet Nam has cut the price of all cars by VND10-15 million ($500-$750) each.

Companies said they would continue to apply new promotions and strengthen their after-sale services to attract more customers in the coming months.

"With the current trend of recovery, but with a cautious view of the August results and delay in the registration of tax reductions in HCM City, the industry could reach 109,000 units compared with the original forecast of 100,000 units," VAMA's report said.

Healthy appetite for animal feed raw material imports

Viet Nam has paid US$2.09 billion to import raw materials for animal feed production in the first eight months, up 41.1 per cent year on year.

Key imports are corn (1.34 million tonnes) and soy bean (897,000 tonnes). Materials are mostly sourced from Argentina (25.6 per cent), India (14.6 per cent), US (14.5 per cent), followed by Italy, Thailand and China.

Mai Van Chung, purchasing director of the Japfa Cornfeed Viet Nam Ltd Co, said the firm has signed a contract to import 80,000 tonnes of corn for the production of animal feed by March 2014.

Chung said that Japfa needs at least 16,000-17,000 tonnes of corn every month. The company used to import sufficient volume for a certain period but at the present time, they import a bigger volume to take advantage of the very cheap prices of corn on the South American market.

The director also said that the company preferred imports of superior quality with a much lower humidity rate than locally-processed corn.

The imported corn prices from Argentina and Brazil were about $310-320 per tonne in June but the price has now dropped to $245-250, lower than the local price of $295 per tonne (quoted in Son La province).

In fact, raw material prices for animal feed production are falling on the global market but are at a standstills high in Vietnam, disinteresting domestic animal feed producers.

Vice Chairman of the Vietnam Animal Feed Association Nguyen Duc Binh said that local manufacturers were still processing high-value imported materials and the output prices would bear a certain delay on the way down.

Binh said that the price of local animal feed might fall next month, at a modest space of 5 per cent against the current price.

High hopes for Phu Quoc's future

A special mechanism and policies are needed to turn Phu Quoc into a special administrative - economic zone, a conference held in the island heard yesterday.

Deputy PM Vu Van Ninh, in his opening speech, said PM Nguyen Tan Dung has ordered the Steering Board for the Southwest Region, Kien Giang Province authorities, and other related agencies to carry out a project to establish the Phu Quoc Special Administrative - Economic Zone.

It is aimed at developing and fully utilising the island's massive potential Ninh, who is also head of the steering board, said.

Phu Quoc has a mild climate and natural diversity, which is ideal for the development of marine economic sectors, especially eco-tourism. It could also be a crucial international trade gateway, he said.

He called on participating scientists and other experts to consider every possibility of turning Phu Quoc into a special economic zone.

As long as in 2004 the Government approved a master plan for the development of Phu Quoc for the period until 2010.

The island has achieved significant socio-economic development in the time since, with its GDP growing by 22 per cent annually and the number of visitors tripling.

Its poverty rate fell from 14 per cent in 2004 to 1.86 per cent last year.

The master plan created favourable conditions for development, and will help establish a dynamic administrative model that allows the creation of a special mechanism and incentives for investment in infrastructure, education, and tourism.

Under the plan, Phu Quoc will have administration of Special Economic Zone and ward levels.

It also contains special mechanisms and policies for human resource development, immigration, investment, and land management in the new economic zone.

It also suggests that Phu Quoc can maintain 100 per cent of tax payment (on the island) for its infrastructure development.

Economist and lawmaker Tran Du Lich said a special mechanism governing land use and property ownership should be added to the plan.

Lich made it clear that the Phu Quoc special zone's administration must have the authority to issue normative legal documents and over public finances and organisational and human apparatuses.

Dr Le Xuan Ba, director of the Central Institute of Economic Management, said Phu Quoc has great potential in tourism, so the government and local administration should strive to diversify tourism products to attract visitors and have policies to attract investment.

Nguyen Van Thanh, Director of the Institute of Development Strategies, said it is necessary to allow Phu Quoc to have casino-related business along with other tourist attractions to attract more visitors.

Regarding about Phu Quoc's future governmental organisation Dr Nguyen Minh Phuong from from the Ministry of Home Affairs' Institute of State Organisation Studies said " It is necessary to realise a pilot administrative leadership regime at Phu Quoc to increase the responsibility of leaders, thus helping timely settle problems arising in the locality."

Ninh concurred with the experts on the need to build a special administrative-economic zone for Phu Quoc to enable it to develop strongly, especially in security- and defence-related areas.

But the plan should clearly identify the main products, services, and industries to develop in Phu Quoc to make full use of its competitive advantages.

He stressed the need to review and adopt special policies that can create a stronger impetus than those in the master plan.

Ninh urged planners to continue reviewing long-term plans and tweak projects that were licensed but are no longer workable to reduce possible later wastage.

Mekong Delta seeks investment for major projects

As of the end of last month, the Cuu Long (Mekong) Delta had called for investment in 139 major projects in the region, with a total investment of VND410 trillion (US$19.45 billion) and $1.9 billion.

The announcement came at a press briefing on the 2013 Mekong Delta Economic Cooperation Forum (Vinh Long MDEC 2013) in HCM City yesterday by the Steering Committee for the Southwest Region, the Steering Committee for the MDEC Vinh Long 2013 and the Vinh Long provincial People's Committee.

The seventh annual forum will be organised in Vinh Long Province from November 21-24.

This year's forum with the theme "Mekong Delta towards a Green Economy" aims to seek initiatives and policy suggestions to improve cooperation among 12 regional provinces and Can Tho City. It will be submitted to the Prime Minister for consideration.

The event also intends to strengthen the connectivity between the region and other localities across the nation as well as international organisations, and enhance the region's socio-economic development.

The forum includes a series of events, including the 2013 Conference on Investment Promotion and Social Welfare for the Mekong Delta region and the 2013 Mekong Delta Business Forum.

Speaking at the conference, Bui Ngoc Suong, deputy head of the Steering Board for the Southwest Region, said so far 18 projects with an investment of VND3.294 trillion ($156.23 million) and $61.2 million in the region had been granted investment certificates.

As of the end of last month, commercial banks and businesses have committed to sponsoring nearly VND600 billion ($28.46 million) for the Mekong Delta under the social welfare programme for the region, Suong said.

With this support, Can Tho City, Hau Giang and Bac Lieu provinces, among others, have started construction of kindergartens, elementary schools and many roads in rural areas for a total cost of more than VND100 billion ($4.74 million), he added.

Dao Minh Tu, deputy governor of the State Bank of Viet Nam, said the Mekong Delta was still facing many challenges in food security, production and access to preferential loans, adding that the central bank would continue to ask commercial banks to join in the Mekong Delta social welfare.

To conclude the conference, Deputy Prime Minister Vu Van Ninh said the Mekong Delta had an important role and strategic position in the country's socio-economic development.

Ninh, who is also the chairman of the Steering Committee of Southwest Region, said the region needed to enhance links among the provinces and city and apply scientific and technical advances to production.

"Investment, trade and tourism must be promoted based on each province's or city's strengths and the common interests of the entire Mekong Delta region," he said.

Ninh asked concerned ministries and agencies to propose appropriate policies to assist the region in taking advantage of its potential.

Ninh also urged the promotion of social welfare programmes, saying they were also critically important to the region.

Publishers profit but investors unmoved

Many listed publishing companies have reported positive profit results in H1 but the trading in this stock group was quite soft.

Total after-tax profit in H1of 24 listed publishing firms was 98.6 billion (US$4.66 million), up 40 per cent year on year – a good business performance in the wake of declining earnings in other sectors.

Ha Noi Education Development and Investment JSC, code EID, gained an after-tax profit of VND23 billion ($1.08 million), up 38 per cent year on year. The company's profit was the highest among listed companies in the publishing industry.

About 11 other publishing companies announced profits of under VND10 billion ($476,000).

However, inside industries said that Viet Nam's publishing industry was too seasonable and did not contain stable factors.

For example, a big part of their products were only for the beginning of each academic year.

"Even stock prices in this group are rather low, about VND10,000 each, but I'm not interested in publishing companies' shares anymore," said Pham Thi Dung, a retail investor who used to hold these kinds of shares last year.

"Publishing prices depend too much on input material prices, particularly imports. They keep going frustratingly up and down.

And education policy-makers keep changing direction and contents frequently which make a huge number of compulsory books and lab devices far from consumption," she said.

The expanding market for unauthorised copies was also blamed for the low earnings of publishing companies.

Lam Dong farms reap technology benefits

Adopting agricultural technologies has enabled the Central Highlands province of Lam Dong to attain socio-economic growth and alleviate hunger and poverty, Deputy Prime Minister Nguyen Xuan Phuc has said.

Speaking at a meeting with provincial authorities yesterday, he said the province has taken advantage of its climatic conditions and fertility to benefit farmers and the companies in the agricultural sector.

In the province, advanced farming technologies have been used on 35,000ha of land, 14,850ha of it being under coffee, nearly 12,000ha under vegetables, 2,400ha under flowers, and nearly 2,500ha under high-quality tea.

There are over 50 businesses using invitro technology that can produce 30 million saplings per year of various kinds of plants.

Embracing high technology has helped Lam Dong farmers achieve higher revenues. On average they earn VND400 million (US$19,000) from a hectare of vegetables, VND800 million($38,000) to VND1 billion($47,000) from flowers, and VND250 million ($11,000) from tea.

Around 6.3 per cent of people in Lam Dong are classified as poor compared with 9 per cent for the country as a whole.

Deputy Minister of Agriculture and Rural Development Le Quoc Doanh said Lam Dong should choose the best tea varieties to grow because the province has the largest area under tea in Viet Nam.

It should also expand the area under fruit trees using high-tech farming methods.

Nguyen Xuan Tien, Chairman of the province People's Committee, said the province Party Committee has issued a resolution on boosting high-tech agricultural development that also spells out specific strategies.

Areas have been zoned for vegetables, flowers, and speciality crops in 2011-15, especially for tea, coffee, and rice, as well as for fish farming.

Lax consumer lending causes SBV to issue bank warning

The State Bank of Viet Nam (SBV) has warned commercial banks to closely monitor and inspect consumer loans as many lenders have loosened their lending conditions, causing concerns about rising bad debt.

Recently, many banks have lowering credit standards for consumer loans to boost lending since their credit growth remained low. Some even offered consumer loans without mortgages or collateral. Such consumer loans are expected to grow further with the end of the year approaching. Previously, banks applied strict requirements to their lending conditions for consumer loans in order to limit risks and avoid bad debts.

According to the SBV, total lending in the first eight months of the year increased only 5.4 per cent, much lower than expected. Total lending of the banking industry is targeted at 12 per cent this year.

Many banks are trying to lend individual borrowers with attractive interest rates of 0 per cent in the first month and 10-11 per cent in the next 11 months.

BIDV, for example, has just introduced a VND2 trillion (US$95.2 million) credit programme with an interest rate of 9.9 per cent yearly in the first three months to boost up lending.

Oceanbank has also introduced a lending programme with interest rate of 5.91 per cent yearly in the first six months for individual borrowers who buy houses or vehicles.

In a similar same move, HDBank has offered a credit package of VND1 trillion (47.6 million) with an interest rate of 0 per cent in the first month and 11.86 per cent in the next 11 months for loans of more than VND500 million. The rate of 12.86 per cent will be applied for loans of VND200-500 million.

ACB has also applied an unsecured credit package in which individual borrowers can be lent a maximum of VND500 million.

It is even easier to access unsecured loans at financial companies, even for sums worth tens of millions of dong. Lending interest rates applied at these companies have also reduced significantly from 17-18 per cent yearly earlier in 2013 to roughly 12-15 per cent currently.

However, as the rebound of the economy has remained volatile, experts have warned that both banks and borrowers should be cautious about the application of these kinds of preferential credit programme.

They said that it was clear that lowering the credit standards may put banks at risk, which also significantly affects the credit quality of the entire banking system.

Bad debts are on the rise and if banks try to achieve credit growth at any cost, bad consequences will shake the entire banking system and the economy, the experts warned.

Economist Nguyen Minh Phong said that it was necessary to offer preferential interest rate packages in the current context when credit growth remained low, however, both banks and individual borrowers must be cautious about any ‘interest rate trap' to avoid the interest rate volatility and bad debts.

Before signing borrowing contracts, bank customers should read the terms carefully. They should pay attention not only to low interest rates but also other conditions to ensure their rights, Phong suggested.

To ensure consumer-lending operations comply with applicable regulations and protect the rights of borrowers, the central bank has also required branches, transaction offices and the service introduction points of credit institutions to publish detailed interest rate information applicable to each product group and each loan product.

The central bank has required its branches nationwide, in collaboration with the banking supervisory agency, to strictly handle violations detected through inspecting and monitoring the activities of credit institutions in the respective areas.

Industry insiders forecast that credit growth this year could likely reach 12 per cent as targeted. Banking expert Nguyen Tri Hieu said that the lending growth for the entire year should be kept at roughly 10-12 per cent to ensure the credit quality.

HCM City to host annual ‘Textile and Garment Industry Exhibition’

The 13th Vietnam International Textile and Garment Industry Exhibition will be held at Tan Binh Exhibition and Convention Center in Ho Chi Minh City from October 24-27.

The event will feature more than 300 display booths of around 200 local and international enterprises from 12 countries and territories.

Exhibits will include accessories and machinery for textile and garments, bleaching and washing machines, chemicals and dyes, cloth processing machinery and accessories, embroidery equipment and much more.

The Exhibition will provide a chance for local garment and textile firms to advertise their products to local and foreign markets and seek more business opportunities. It will also highlight export potential of the Vietnamese garment and textile industry to world leaders in the same trade.

The event is being organized by Vinexad, Paper Communication Exhibition Service (Hong Kong-China), Yorkers Trade & Marketing Service Co. Ltd. (Hong Kong-China) and Chan Chao International Co. Ltd. (Taiwan-China) with the assistance of AGTEK and Vietnam Cotton and Spinning Association.

Vietnam strives for $30b border trade by 2020

Vietnam aims to record US$30 billion from border trade by 2020, according to a development plan approved recently by the Prime Minister.

A truck carries goods from Laos to Viet Nam through the Lao Bao International Border Gate in the central province of Quangr Tri.

Under the plan, the country may fetch as much as $14 billion in export earnings, with imports valued at as much as $16 billion.

By 2030, border trade is forecast to reach $50 billion. Approximately $22 billion will come from exports.

A number of selected border economic zones (EZs) will be provided with State assistance to develop in line with the nation's five-year socio-economic development plan.

The country is now home to 28 border EZs, which span a total area of 600,000ha.

These zones have experienced strong growth in the past few years, achieving a trade value of $5.44 billion in 2010, according to the Ministry of Planning and Investment.

Cross-border trade now accounts for 15 per cent, 85 per cent and 75 per cent of the country's total import-export turnover with China, Laos and Cambodia, respectively.

Despite changes in some neighbouring countries' border trading policies, border trade has still increased remarkably and contributes significant amounts to the State budget, said Minister Bui Quang Vinh.

To date, Vietnam's border EZs have attracted 70 foreign-invested projects totally capitalised at over $700 million.

Progress in Vietnam-Customs Union FTA negotiations

Vietnam and the Customs Union of Russia, Kazakhstan and Belarus have agreed on most of the content of a free trade agreement (FTA) during their recent third round of negotiations in Minsk.

The Vietnamese delegation was led by Minister of Industry and Trade Vu Huy Hoang and the Eurasian Economic Commission led by Eurasian Trade Minister Andrei Slepnev.

Ten working groups discussed a wide range of issues relating to commodity trade, product-specific rules of origin, trade services, customs management, trade and investment facilitation, intellectual property, legislation, institutions, and trade safeguarding measures.

Minister Vu Huy Hoang and Minister Andrei Slepnev exchanged the minutes of the meeting

The negotiations took place in a constructive, frank and cooperative spirit with a view to harmonising all standpoints and balancing interests of parties concerned.

Negotiators said progress was made in the third round compared to the previous one in Moscow. They completed in principle several chapters concerning competition, technical barriers, regulations on food hygiene, animal and plant quarantine, customs, and sustainable development.

Both sides agreed to consult and complete other chapters before the fourth round to be held in Vietnam from December 9-14.

They agreed to speed up negotiations between working groups to finalise the content of the agreement by the end of 2013. Negotiations will focus on technical matters in 2014.

Established in 2007, the Customs Union covers a combined area of more than 20 million square kilometres with a total population of 170 million.

The union has an annual GDP value of approximately US$2,000 billion total trade value of US$900 billion.

The FTA, which promotes trade and investment liberalisation, is expected to strengthen political, economic, trade, investment and cultural cooperation between Vietnam and Russia, Belarus and Kazakhstan when it is signed.

Vietnam sees rapid increase in wealthy pool

Vietnam saw its pool of wealthy individuals grow significantly in 2013, up 14.7% from last year, ranking second in Southeast Asia in terms of the growth rate, according to the US’ Wall Street Journal.

The newspaper on September 12 cited the figure from a report from private wealth intelligence firm Wealth-X and the Swiss-based bank UBS.

In the country, there are 195 ultra-high net worth individuals (UHNW - defined as those with assets of US$30 million and up) controlling a combined US$20 billion worth of assets, compared to 170 individuals with a total wealth of US$19 billion the year before.

Every country in the region tracked by the report – Singapore, Indonesia, Malaysia, Thailand, the Philippines and Vietnam - saw the population of UHNW grow over the past year.

Thailand boasted the biggest growth of this specific group of wealthy, with its ultra-high net worth population up 15.2% to 720 individuals this year, compared to 625 in 2012. The wealth pool of these millionaires in Thailand has also grown, and they now control US$110 billion in assets, up from US$95 billion a year ago.

Indonesia has 865 UNHWs holding US$130 billion worth of assets, up from 785 individuals with a total wealth of US$120 billion recorded last year.

The article said frontier markets like Vietnam and Myanmar continue to hold promise for private bankers, too, with a steadily climbing consumer class and thriving rich elites.

Though UBS is not present in either country at present, the bank is watching both countries very closely and would be keen to look into servicing clients once rule of law and rules governing the financial industry become more transparent, the journal quoted Joseph Poon, head of Ultra High Net Worth for UBS Wealth Management in Southeast Asia, as saying.

Workshop discusses draft green growth action plan

The Ministry of Planning and Investment (MPI) hosted a workshop in Hanoi on September 13 to complete a national draft plan of action on green growth in Vietnam.

MPI Deputy Minister Nguyen The Phuong noted that implementing the action plan will help restructure the national growth model, improve natural resource use efficiency, generate jobs, hone the economy’s international competitiveness, and improve citizens’ living conditions.

Participants said Vietnam’s growth model is moving towards prioritizing sustainable development in addition to the standard industrialisation and modernisation goals.

They agreed that incorporating green growth precepts will be vital to the success of this transformation, including reducing pollution and greenhouse gas emissions, ensuring natural resources are used mindfully and with long-term vision, encouraging the business community to embrace clean technology, and cooperating with and learning from the experiences of foreign partners.

They proposed focusing on training and allocating the draft plan’s required human resources in coordination with central and local agencies. They also stressed the importance of raising society’s environmental awareness and orienting financial policy to serve green growth.

The workshop heard support committed by Korean partners will help Vietnam overcome any challenges encountered while pursuing its green growth strategy.

The MPI will gather opinions and complete the draft before submitting it to the government for approval.

Fifth Vietnam-Singapore IP gets off ground

Prime Minister Nguyen Tan Dung and his Singaporean counterpart Lee Hsien Loong attended the ground-breaking ceremony of a Vietnam-Singapore Industrial Park (VSIP) in Quang Ngai province on September 13.

The Integrated Township and Industrial Park, the fifth of its kind in Vietnam, will be built on an area of 600ha in Son Tinh district. It is designed following the successful operations of the previous four VSIPs in Binh Duong, Bac Ninh and Haiphong.

So far these VSIPs have attracted 490 investors from 22 countries and territories with a total capitalisation of more than US$6 billion, and generated steady jobs for 140,000 workers.

At the ceremony, both PMs Dung and Lee noted that since the first park took shape in 1996, VSIPs have symbolised successful economic cooperation between the two countries, significantly contributing to Vietnam’s socio-economic development.

Dung said that the Vietnamese government creates the best possible conditions for foreign investors, including those from Singapore, to operate efficiently in the country.

“We are improving infrastructure, completing legislation, simplifying administrative procedures, and actively taking part in free trade area (FTA) negotiations, including the Trans-Pacific Partnership (TPP), to create the best business environment for foreign investors,” he said.

He revealed that the Danang-Quang Ngai expressway, which is under construction, will run through urban areas and industrial parks along central coastal provinces, facilitating local development.

At the ceremony, Quang Ngai handed over investment licences to three foreign projects totalling US$115 million, which are expected to generate 11,000 jobs.  

Swedish furniture store opens in HCM City

The Swedish ambassador to Viet Nam took part last week in the opening ceremony of the eighth UMA store, a leading furniture and home decor brand in Viet Nam.

Ambassador Camilla Mellander said, "UMA represented a successful cooperation model between Swedish and Vietnamese businesses that is expected to further develop in the future."

The products are a combination of Swedish style and Vietnamese culture, she said, adding, "Customers can access high quality products at reasonable costs."

The new store, located inside the Big C supermarket in HCM City's Phu Nhuan District, is a 50-50 joint venture between Vietnamese and Swedish partners.

Next week, UMA will open another store in southern Binh Duong Province, raising the total number of UMA stores in Viet Nam to nine.

Coca Cola launches new line in central province

Coca-Cola Beverages Viet Nam Ltd (CCBVL) launched a new manufacturing line in central Da Nang City to raise production capacity for the Coca-Cola plant in the city's Lien Chieu District.

The new facility is in line with the company's growth plans and will contribute to long-term economic growth in Viet Nam, said Vamsi Mohan, CEO of the CCBVL.

"Production capacity will increase significantly with the construction of a new line and expansion of the warehouse. This underpins Coca-Cola's ability to deliver a robust portfolio of refreshing and delicious products that meet the needs of its consumers."

In addition to expanding operations in Da Nang City, the CCBVL will continue with new investment projects in its two other factories in Ha Noi and HCM City up to 2015. — VNS

First Sony show to display flagship products

A wide range of the company's flagship products and technologies will be showcased at the Sony Show 2013, held for the first time in Viet Nam on September 27-29 at the Youth Cultural House in HCM City.

The show will present the company's innovative audio, video, communications and information technology products including the BRAVIA TV, Xperia Tablet Z, the Xperia Z Ultra Android smartphone, VAI DUO 13 Ultrabook, and the Alpha A99 camera.

The public can get a first-hand look at Sony's upcoming smartphone.

The same show will be held at the Vincom Mega Mall Royal City in Ha Noi on October 18-20.

Int’l textile expo opens in city next month

This year’s international textile and garment machinery exhibition will take place in HCMC’s Tan Binh District from October 24 to 27, featuring over 360 booths of some 200 companies from 12 countries and territories.

The VTG 2013 event is expected to offer local textile enterprises a good chance of approaching advanced machinery and technology, and finding material suppliers, according to organizers.

At a press briefing on the expo on Thursday, Pham Quynh Giang, head of the organizing committee, said the exhibition would attract many companies from China, Hong Kong, Germany, India and Japan, among others. Most exhibitors will introduce their latest machinery and equipment to local enterprises that are seeking to increase their competitiveness on global markets, he said.

Bui Trong Nguyen, general secretary of the HCMC Association of Garment-Textile-Embroidery-Knitting (AGTEK), said at the briefing that the country’s garment export sector had gained steady growth over the years. This year’s target is more than US$19 billion, up from last year’s US$17 billion.

This requires domestic companies to raise local content in their products and improve manufacturing processes, he said.

Compared to other Asian nations like Bangladesh, Myanmar and India, Vietnamese textile-garment enterprises find it difficult to compete with in terms of labor costs, so they should invest in modern machinery and equipment for higher capacity and energy saving, Nguyen noted. He projected demand for new machinery and equipment of local firms would sharply rise in the future.

The event is being organized by Vinexad, Paper Communication Exhibition Service (Hong Kong), Yorkers Trade & Marketing Service Co. Ltd. (Hong Kong) and Chan Chao International Co. Ltd. (Taiwan) with the assistance of AGTEK and the Vietnam Cotton and Spinning Association.

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

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