Australian state invites Vietnamese investors

The Australia Vietnam Business Council (AVBC) and Canberra University recently held a workshop in Sydney to call on Vietnamese businesses to make investment in Australia’s New South Wales.

Addressing the event on February 16, Suzanne Gilham, a senior official from the NSW Department of Industry, introduced the Australian business visa programme in 2017, which offers many incentives for entrepreneurs and investors from China, Malaysia and Vietnam. 

She said the state’s government regards Vietnam as a potential and promising market to develop this new model in Australia.

Local authorities are coordinating with Vietnamese agencies and organisations to promote this programme in Hanoi and Ho Chi Minh City in June this year, she added.

President and founder of the AVBC Laurence Strano said the programme aims to encourage Vietnamese enterprises to do business in New South Wales.

He cited two-way trade surged from 45 million USD in 1990 to 10 billion USD at present.

Bilateral trade is expected to double in the coming time, he said, adding that he hopes more Vietnamese businesses will make investment in Australia and vice versa.

Work on container factory starts in Nghe An

A ground breaking ceremony for a container factory of the TKV Group from the Republic of Korea was held in the central Nghe An province on February 18.

The project in the Dong Nam Economic Zone has a total registered capital of 550 billion VND (24.2 million USD). It is expected to complete in June 2018 and produce 6,000 containers a year.

At the ceremony, Le Ngoc Hoa, Vice Chairman of the Nghe An People’s Committee, pledged that the province will create favourable conditions on policy and investment environment for investors.

The TKV Group is hoped to continue cooperating with Nghe An to implement several projects in the future, including high technology university, health waste treatment factory, and electronic and soft fields.

14.3-million-USD cattle-feed factory inaugurated in Nghe An

A cattle-feed factory with total investment of 325 billion VND (14.3 million USD) was inaugrated in central Nghe An province on February 18.

The Mavin Austfeed Nghe An factory has a capacity of producing 300,000 tonnes of domestic animal feed per year and generates jobs for 300 local workers. 

It was built since September 2015 on an area of 3.6ha in Block B, at the Nam Cam Industrial Park of the Dong Nam Economic Zone

Speaking at the inaugural ceremony, Nguyen Xuan Duong, Chairman of the provincial People’s Committee, said that the factory will be a driving force for investment in the Dong Nam Economic Zone, contributing to the socio-economic development of Nghe An province.

IP rights experts of APEC opens 44th meeting in Nha Trang

The APEC Intellectual Property Rights Experts’ Group commenced its 44th meeting (IPEG 44) in Nha Trang city, the south central province of Khanh Hoa, on February 18.

The meeting, chaired by the National Office of Intellectual Property of Vietnam (NOIP), drew more than 100 delegates from the 21 APEC member economies. The Vietnamese delegation was led by NOIP Deputy Director Le Ngoc Lam.

The agenda surrounds the common targets of the APEC cooperation in IP, including increasing dialogue about IP policies, and discussing measures to promote the effectiveness of the IP protection system and to implement the WTO’s Agreement on Trade-Related Aspects of IP.

The IPEG 44 looked into efforts to ensure the effective implementation of APEC Collective Action Plan on IP to achieve the Bogor Goals on trade and investment liberalisation by 2020. 

It also discussed the development of IP manpower for developing and underdeveloped economies, the enhancement of communication activities to raise public awareness of IP, and the encouragement of using, exploiting and commercialising IP.

On the sidelines of the event, the Vietnamese delegation had bilateral meetings with some APEC economies like the Republic of Korea and the US to discuss IP cooperation plans.

The IPEG 44 is scheduled to wrap up on February 19.

Also on February 18, seven other meetings and workshops took place in Nha Trang, touching upon such issues as emergency response capacity, illegal logging, policy cooperation in science-technology, and promoting the social commitment to corruption fight.

They were activities on the first day within the framework of the first APEC Senior Officials’ Meeting (SOM 1), which will last until March 3.

APEC Vietnam 2017 takes the theme of “Creating New Dynamism, Fostering A Shared Future”. Vietnam joined APEC in 1998 and hosted APEC events in 2006.

Firms to observe laws when investing abroad     

Experts urged Vietnamese businesses to comply with established laws and attach special attention to environmental protection and corporate social responsibility when investing abroad, considerations that are all said to be vital for sustainable investment.

Speaking at a Friday conference titled “Sustainable agriculture investment of Vietnamese businesses in the Mekong sub-region”, Dau Anh Tuan, head of the Viet Nam Chamber of Commerce and Industry (VCCI)’s Legal Department, said businesses need to have reliable sources of information to make careful preparation for their overseas investment projects.

“Now, firms should not only comply with laws but also focus on CSR and environment protection to shift towards sustainable values,” Tuan said.

According to Doan Thanh Nghi from the Ministry of Planning and Investment’s Foreign Investment Agency, Laos and Cambodia are major destinations for Vietnamese investments.

Nghi cited the ministry’s statistics: as of January, Vietnamese firms poured a total of nearly US$21.4 billion into more than 1,190 projects in 70 countries and territories. Laos ranked first with 270 projects, worth $5.12 billion, followed by Cambodia with 191 projects, worth $2.89 billion.

Nghi said that overseas Vietnamese investments are mainly poured into agriculture, telecommunications and mining, which serve to Viet Nam’s advantage for cooperation with Laos and Cambodia.

In order to promote Vietnamese investments in Laos and Cambodia, Nghi said that information exchanges must be improved together and the transparency and stability of the business climate must be enhanced.

In addition, the negotiation and signing of bilateral and multilateral cooperation agreements must be sped up to create favourable investment conditions.

Pham Quang Tu, a representative from Oxfam Viet Nam said that the organisation’s research found that there were a number of bottlenecks in implementing investment projects in Laos and Cambodia, such as issues related to land ownership, labour, conflicts in compensation and difficulties in contacting local authorities.

Tu said that policies and instructions to encourage Vietnamese firms to pay attention to CSR when investing overseas.

He added that countries which received investments should develop a database with regular updates to provide reliable information to investors.

A research group of PanNature, VCCI and Oxfam was drafting instructions for Vietnamese businesses to invest in agriculture overseas, which aimed to reduce risks in investing and build the image of Vietnamese investors in particular and the national image in general.

The instruction included regulations in investing abroad, foreign investment attraction policies of destination countries as well as social and environmental issues arising from investment. 

VIB deposit certificates a superior investment tool     

Vietnam International Bank (VIB) officially issued certificates of deposit (CD) worth VND18 million and VND24 million for personal and corporate customers to meet customers’ investment demands for deposit on February 17.

“Along with savings account, CD is now one of the investment channels preferred by corporate and personal customers with a large source of finance,” VIB said.

“For investors who look for security and flexibility in the use of capital, CD will adequately meet this criterion as it is an investment channel belonging to a group of investment assets which generates a fixed income and suits medium-and-long-term investors,” it said.

According to the bank, when customers apply for a 18-month CD valued at a minimum of VND1 million, they will enjoy a fixed interest rate of 6.68 per cent; while the a 24-month CD will bring them a fixed interest rate of 6.88 per cent.

CD holders can also resell the CD to VIB after six months from the issue date at the price equivalent to its face value and enjoy an interest rate at the reselling date based on the interest rate listed on the CD, the bank said, adding that the CD’s interest rate will be fixed during the tenor and be paid on the date of maturity or on the reselling date, and customers can apply for as many CDs as they need to invest.

Besides this, customers can also inherit, give and transfer VIB’s CD freely on the secondary market. In urgent cases, customers can use the bank’s CD as collateral for a loan at VIB and enjoy a preferential lending interest rate. Furthermore, it can also be mortgaged for loans at other banks by law.

On the maturity date of the CD, if customers do not contact VIB, the CD will be automatically converted into a regular deposit account with the same tenor or a shorter tenor if the former is not available, the bank noted. 

Increasing the value of Vietnam’s fruit specialties

In 2016, Vietnam, for the first time, earned nearly US$2 billion from exporting vegetables and fruits with the Mekong Delta being the main contributor.

The turning-point opened a new direction for the restructuring of Vietnam’s agriculture whose key export items will include rice and fruit specialties.

During the early days of 2017, mango growing cooperatives in Dong Thap province invited foreign businesses and domestic exporters to come to scout cooperative opportunities.

Huynh Thanh Ba, Deputy Director of the My Xuong Mango Cooperative, said that selling prices are higher and more stable thanks to the production of safe farm produce.

Ba says My Xuong cooperative and many other producers are producing qualified products that meet the standards of demanding import markets. 

“Local farmers have tried to export 70% of their total output, selling the rest to the domestic market. If they hit this target, they will have a stable income and can get rich”, he added. 

Last year, 74% of Vietnam’s total vegetable and fruit export revenue come from the Mekong Delta. The region’s blue dragons, longans, watermelons, and mangoes have conquered demanding markets including Japan, the US, France, the Netherlands, Belgium, Germany, Australia, and the Republic of Korea.

Our fruits fetch high prices. Cat Hoa Loc mangoes, for example, sell for up to US$12 each at the Japanese city of Fukuoka’s fruit auction”, said Professor Vo Tong Xuan, a leading Vietnamese agronomist. 

Le Minh Hoan, Secretary of the Party Committee of Dong Thap, the leading province in agricultural restructuring, said that if the quality of input materials is well controlled, Vietnam’s future revenue from vegetable and fruit exports could double or even triple over 2016.

“It’s not easy to penetrate a market, but it’s even harder to keep it. Vietnamese farmers and cooperatives should keep the trust of customers and think of long-term business and farming targets. Enterprises should guide farmers”, Hoan said.

Affordable cars a wild dream for Vietnamese buyers

High import duties on foreign cars and unfavorable policies on the domestic auto industry are leaving few affordable options for car buyers in Vietnam.

A Hyundai i10 sedan imported from India arrives in Vietnam at the average price of only VND84 million (US$3,750), according to Hyundai-Thanh Cong, the authorized dealer of the Republic of Korean carmaker in Vietnam.

The five-door hatchback is among the best-selling Hyundai models in Vietnam, with Hyundai-Thanh Cong sales topping 20,000 units in 2016, a company representative told Tuoi Tre (Youth) newspaper.

However, despite the car’s cheap import price, its retail price may be as high as VND350 million - 450 million (US$15,625-US$20,090) due to an import tax of 70 percent and other duties and expenses that added to the cost, the representative said.

While taxes imposed on foreign cars are high, the domestic auto industry has been slow to seize the opportunity to gain a foothold in the affordable car market segment.

In fact, the leader of Vinaxuki, once considered a giant in Vietnam’s auto industry, has at one time unveiled his vision to manufacture affordable cars for the Vietnamese people.

The ambitious leader invested in a costly manufacturing complex and hired Japanese experts to take care of the designs, but his risky venture soon plunged into unrecoverable losses that led to the closing of the factory and a huge debt on his part.

Some experts have attributed Vinaxuki’s failure to the fact that the condition in Vietnam is only suitable for car assembly rather than manufacturing from scratch.

One official at the Industrial Policy and Strategy Institute under Vietnam’s Ministry of Industry and Trade has acknowledged that “the safest path for [domestic] auto companies now is to import from foreign manufacturing countries”.

Earlier this week, the chief representative of the Ho Chi Minh City office of the Japan External Trade Organization (JETRO) said that Japanese carmakers might leave Vietnam for other regional markets to improve profit, citing Vietnam’s unsatisfying production capacity compared to its regional peers such as Thailand and Indonesia.

In 2016, Vietnam produced around 400,000 cars, while its neighbors Thailand and Indonesia made 2.3 million and 1.5 million cars, respectively, according to EU-ASEAN Business Council.

Thailand is expected to reach a yearly production of 3.4 million cars in 2023, while the Philippines and Malaysia is forecast to emerge with 800,000 and 700,000 cars respectively by that year.

Meanwhile, Vietnam’s car production is forecast to drop to 300,000 cars in 2020 before bouncing to 500,000 in 2023, according to the same source.

According to a representative of Japanese automotive manufacturer Toyota, which has assembly lines in Vietnam, production numbers of its Vietnam factory is relatively low while the costs to source locally produced components are even higher than to have them imported.

Meanwhile, the trend of companies opting to import cars instead of having them manufactured or assembled in Vietnam is putting government policies on the auto industry under the question.

According to an official at the Ministry of Industry and Trade, there was a sudden high demand for multipurpose SUVs in Vietnam during the 2008-09 period.

But instead of introducing favorable taxes to encourage domestic production, Vietnam’s policymakers at the time decided to raise taxes on the industry, causing foreign brands to relocate their factories to Indonesia.

“Up until now, the Vietnamese government says it is doing its best to facilitate cars production but has yet to introduce any concrete policy on the issue,” the official said.

There will be an estimated 33 million people belonging to the middle class in Vietnam in 2020, according to Dr. Le Anh Tuan, head of the research unit at Dragon Capital asset management foundation.

The expansion of Vietnam’s middle class is expected to improve the country’s cars consumption in the years to come, provided that local policies are relaxed to allow for the growth of affordable auto production.

Brazil to import robusta coffee from Vietnam

Brazilian Ministry of Agriculture’s manager in charge of coffee Silvio Farnesi has said that the government has approved the importation of robusta coffee for the first time in history, including those from Vietnam, in order to meet domestic demand for instant coffee production. 

The approval on February 15 forced imported robusta to be subject to a 2 percent tariff. 

Brazil plans to import one million sacks of coffee, each equivalent to 60kg, by this May with a maximum 250,000 sacks per month. 

As the world’s top green coffee producer and instant coffee exporter, Brazil produced 49.6 million sacks of coffee, up 14.8 percent annually. However, robusta, accounting for 17 percent of the total production, were packed into 8.3 million sacks, down 25 percent from 2015 and hitting a low record in the past 12 years. 

Arabica is mainly used for roasted and ground coffee production while robusta is for instant coffee.

RoK strawberry imports face new rules

Boxes of fresh strawberries exported from the Republic of Korea (RoK) to Vietnam must have “for Vietnam” written on them, according to new rules released on February 16 by Vietnam’s Plant Protection Department.

Under the new regulations, RoK fresh strawberries exported to Vietnam must be produced, packaged, treated and stored at facilities registered with the RoK’s agricultural goods authorities, said the department under the Ministry of Agriculture and Rural Development. The boxes of strawberries must also have the name or registration code of the production and packaging facilities.

The exports must also undergo quarantine checks by the RoK’s plant quarantine agencies and receive quarantine certificates, reported baohaiquan.vn.

The boxes must also not have soil, leaves or any other parts of strawberry trees in them.

Korean strawberries are highly competitive thanks to strict quality management and are exported to 20 countries and territories around the world including Hong Kong, Singapore, Malaysia and Thailand.

Vietnam agreed to import RoK strawberries in 2016 after years of negotiation on quarantine issues between the two sides.

In Vietnam, RoK strawberries sell for 600,000-800,000 VND per kilo.

Korean strawberries are grown on smart farms according to the management good agricultural practice (GAP - good agricultural practice) so they have high quality and reach international food hygiene and safety standards.