Cargill to expand investment in Vietnam

The animal feed market in Vietnam has a relatively high potential, which has prompted Cargill group to invest more in the country, according to the US group’s Chairman David McLennan.

Talking to the press in Ho Chi Minh City on November 18, McLennan said plans for new factories demonstrate the group’s commitment to the country.

Cargill is constructing its 12th animal feed plant in Vietnam with a total investment capital of 30 million USD in the southern province of Binh Duong. The factory, with a capacity of 260,000 tonnes a year, is expected to go into operation in the first quarter of 2017.

The group has invested 180 million USD to develop its animal feed mills system with a total capacity of 1.3 million tonnes a year in the country since 1995.

Additionally, the groups signed a 10 million USD deal with the Sai Gon International Terminals Vietnam (SITV) to build warehouse in Phu My.

Besides expanding its investment in Vietnam, Cargill pledges to support farming households and small farms by providing them with training in animal breeding, thus preparing them for upcoming free trade agreements to which Vietnam is a member, including the Trans-Pacific-Partnership (TPP) agreement.

At the same time, the group also plans to expand its charity work as its commitment to the sustainable development of the group in Vietnam.

To date, Cargill has built more than 70 schools throughout the country and provided assistance to flood-hit victims, scholarships to poor students and rehabilitation equipment to disabled orphans.

PVFCCo wins ASEAN Corporate Governance Awards 2015

PetroVietnam Fertiliser and Chemicals Corporation (PVFCCo) has received the ASEAN Corporate Governance Awards 2015 for its stellar corporate governance at a recent ceremony in Manila, the Philippines.

The company, together with other two listed enterprises - Vietnam Dairy Joint Stock Company and Ho Chi Minh City Securities Corporation, gained the highest assessment from the ASEAN Corporate Governance Scorecard (ACGS) project, carried out by the Asian Development Bank and the ASEAN Capital Markets Forum (ACMF) since 2012.

The ACGS is a series of assessments based on publicly available information and compared with international best practices that encourage listed companies to go beyond national legislative requirements.

The ACGS report can serve as a reference for capital market regulators and other shareholders who want to understand the current corporate governance standards across the region.

According to PVFCCo Chairman Le Cu Tan, the award has helped increase the enterprise’s image and prestige among shareholders, investors in particular and the ASEAN enterprise community in general.

PCFCCo is operating and managing Phu My fertiliser plant, which can produce 800,000 tonnes per year to meet 40 percent of the domestic nitrogenous fertiliser demand for agricultural production. The enterprise has also provided four top-quality sets of fertiliser products, comprising NPK Phu My, Kali Phu My, DAP Phu My and SA Phu My.

It is working to develop the chemical sector, striving to become a leading domestic fertiliser and chemical business.

State-owned farm to export straw to Japan

The State-owned Song Hau Farm will ship straw to Japan under a memorandum of understanding (MoU) inked with the Japan Beef Import-Export Association (J-BIX) on November 18.

The straw will be used to make cattle feed and Japan’s traditional Tatami mats.

Meanwhile, the J-BIX pledges to provide financial aid through the Japanese Government’s official development assistance (ODA) for developing cattle raising at Song Hau farm.

Director of Song Hau Farm Nguyen Thanh Phu said the MoU has opened up a massive opportunity for the farm and other provinces in the Mekong Delta to export straw to Japan.

Most of straw in the region is usually burned or buried as it is considered agricultural residue, thus polluting the environment and farmland, he noted, stressing that the straw export will help increase farmers’ income and clean soil for the next crops.

The Song Hau Farm and neighbouring areas boast abundant sources of straw and are able to supply 250,000 tonnes of straw each year as demanded by the J-BIX. The farm expects to ship the first batches of straw to Japan shortly after the 2015-2016 winter-spring crop is harvested.

The J-BIX said it will support the Song Hau Farm with ODA capital, machinery and experts to ensure quality straw for export.

J-BIX vice chairman Yutaka Aoyama said Japan needs around 250,000 tonnes of straw to process cattle feed and produce Tatami mats a year, which were previously sourced from China.

The country decided to choose Vietnam as a straw supplier after Chinese straw failed to keep up with Japanese requirements, he added.

Vietnam hopes for OECD’s support in inclusive growth

Vietnam needs cooperation, experience sharing and policy consultation from the Organisation for Economic Cooperation and Development (OECD) in various fields for its sustainable and inclusive growth fulfillment, said a Foreign Ministry official during a seminar in Hanoi on November 18.

The Vietnam-OECD partnership potential is huge, especially when the Southeast Asian country is entering a new period of development and international integration, said Vu Quang Minh, Assistant to Foreign Minister and head of the Department of Economic Affairs at the event, which discussed cooperation prospects between the two sides in spurring inclusive growth.

As an active member of the OECD Development Centre and Development Assistance Committee, Vietnam has coordinated with the organisation in completing a report evaluating policies on agriculture, science and technology and investment, he said, adding that the country has also actively responded to the OECD Southeast Asia Programme that was launched from 2014.

Minh affirmed that the country is willing to collaborate closely with the OECD to implement the programme in a practical and effective manner, while integrating projects under the programme with the Vietnam-OECD cooperation.

Vietnam hopes to receive stronger support from the organisation in strengthening its economic reform and improving its international integration efficiency through bilateral, tripartite and regional cooperation frameworks, he added.

Meanwhile, OECD representative Alessandro Goglio said that Southeast Asia is currently one of the most dynamic regions with increasingly important role in the world.

He noted that Vietnam has made significant progresses in national industrialisation and modernisation, maintaining high growth and recording impressive poverty reduction achievements.

He suggested that the country should continue developing infrastructure system, restructuring State-owned enterprises and improving the investment environment as well as completing labour and social policies to enhance productivity towards inclusive growth goals.

Emphasising that Vietnam is one of the prioritised partners of the OECD in the region, Goglio pledged that the organisation stays ready to foster affiliations with Vietnam in the sectors of the country’s priority, especially in designing a socio-economic development plan for 2016-2020.

Participants also evaluated the outcomes of Vietnam-OECD cooperation from 2012-2015 and the prospects of the ties from 2016-2020. They also considered prioritised areas and activities that could help Vietnam reach sustainable and inclusive growth targets by 2020.

The same day, OECD experts also had working sessions with the Ministries of Justice, Industry and Trade and Finance to discuss cooperation orientations in specific areas.

Vietjet offers 20,000 promotional tickets

To meet the travel demand of passengers and welcome its newest routes including Ha Noi – Chu Lai, Hai Phong – Cam Ranh, and Vinh – Buon Ma Thuot, Vietjet is giving away 20,000 promotional tickets just from VND 199,000 for a grab alongside with many other interesting activities.

The Ha Noi – Chu Lai route is operated with a frequency of 4 returned flights per week, on every Monday, Wednesday, Friday and Sunday. Flying time per sector is about 1 hour and 25 minutes. Flights from Hanoi depart at 8:35 and arrive in Chu Lai at 10:00. Return flights depart Chu Lai at 10:35 and arrive in Hanoi at 12:00.

The Hai Phong – Cam Ranh route is operated with a frequency of 05 return flights per week. Fights are on every Tuesday, Thursday, Friday, Saturday and Sunday. Flying time per sector is about 1 hour and 45 minutes. Flights depart Cam Ranh at 9:00 and arrive in Hai Phong at 10:45. Return flights depart Hai Phong at 11:30 and arrive in Cam Ranh at 13:15.

The Vinh – Buon Ma Thuot route is operated with a frequency of 03 return flights per week. Fights are on every Monday, Wednesday, and Friday. Flying time per sector is about 1 hour and 25 minutes. Flights depart Vinh at 8:35 and arrive in Buon Ma Thuot at 10:00. Return flights depart Buon Ma Thuot at 10:45 and arrive in Vinh at 12:10.

Tickets can be booked at www.vietjetair.com (also compatible with smartphones at https://m.vietjetair.com) or at www.facebook.com/vietjetvietnam (just click the “Booking” tab). Payment can be easily made with Visa, MasterCard, JCB, American Express, and ATM cards issued by 24 Vietnam banks that have been registered with internet banking.

Banking awards 2015 announced

The winners of the Vietnam Outstanding Banking Product/Service Awards 2015, organised by the International Data Group (IDG) and the Vietnam Banks Association, were announced at a ceremony in HCM City on November 17.

The Joint Stock Commercial Bank for Foreign Trade of Vietnam ( Vietcombank) was awarded the 2015 Best Retail Bank title, and the Bank for Investment and Development of Vietnam (BIDV), which has 1,813 ATMs, was named the 2015 Best Online Bank.

Vietnam International Bank (VIB) was presented the Most Innovative Products and Services Award for the MyVIB app, which allows customers to transfer money to more than 86 banks and make payments with nearly 400 service companies.

The Saigon Commercial Joint Stock Company (SCB) won the Most Innovative Products and Services Award for its online tax-paying service and online export & import bailouts.

The Best Information Security Bank award was given to the Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) for investments to upgrade and complete its security system.

Vietinbank, the Bac A Joint Stock Commercial Bank (BacA Bank), the Maritime Commercial Joint Stock Bank (Maritime Bank), the Vietnam Bank for Agriculture and Rural Development (AgriBank) and BIDV were awarded the Bank for Community title for their contributions to social charity activities.

Vietnam-Laos trade fair to open in December

The 2015 Vietnam-Laos trade fair will be held in Pakse city, Champasak province, Laos from December 22-27, the Sai Gon Giai Phong (Liberated Saigon) newspaper reported, quoting an announcement of the Defence Ministry’s Economics Department.

According to the announcement, the event is part of Vietnam’s national trade promotion programme in 2015 and one of a series of economic and political activities to celebrate 60 years of the Lao People’s Revolutionary Party (LPRP), and the 40th anniversary of Lao National Day.

Themed “Cooperation, Friendship and Development”, the event is expected to house 144 booths, 35 percent of which are to be manned by military-run businesses.

Vietnam’s 175 Military Hospital will hold free medical check-ups and give away medicines for impoverished people in the framework of the event.

Viet Nam will work harder to contribute to a blue economy and sustainable maritime growth for the seas of East Asia (SEA), said Ho Kim Lan, an official from Viet Nam Seaports Association yesterday.

Lan said on behalf of the country's port association at a session held in the on-going the East Asian Seas Congress in central Da Nang City that the country has a total of 64 seaports, with many high capacity ones in southern localities of HCM City and Ba Ria-Vung Tau and northern Hai Phong City.

"The government gave strong emphasis on the development of qualified deep seaports to make the country an important transit destination," he said.

Lan added that cargo volume going through Vietnamese ports have increased with triple the amount in 2014 compared with those in 1994.

However, in his speech, Lan did not see weak logistics as a big hindrance to the development of the local maritime sector, but road traffic jams would make for more difficulties.

Brian Sullivan from International Petroleum Industry Environmental Conservation Association, who chaired the workshop on targeting a blue economy for SEA urged the countries bordering SEA to develop maritime transport to utilise the huge potential of sea in the region.

Other participants from Thailand, Philippines and Viet Nam expressed their deep concerns for environmental sustainability in the maritime sector. They called for more assistance from experienced organisations for dealing with maritime incidents including oil spills and the sinking of vessels carrying hazardous cargo.

According to Sullivan, the countries in SEA should build a roadmap that highlights the importance of blue growth and maximises the sustainable use of seas for economic development.

The congress is being held from November 16 to 21 by the Partnerships in Environmental Management for the Seas of East Asia, with aims to exchange information, update renewal policies and share experience and innovation.

The first two workshops on climate change risk management and maritime contributions ended yesterday. The congress continues today with focus on coastal and ocean governance and coastal zoning.

Tech park to boost science spending

The Hoa Lac Hi-Tech Park (HHTP) expects to boost science and technology projects by providing preferential treatments on property issues for potential hi-tech companies.

Pham Dai Duong, deputy minister of science and technology and also director of HHTP, told local media on Tuesday that tax exemption is a part of the draft decision that the HHTP has recently submitted to Prime Minister Nguyen Tan Dung and the Ministry of Science and Technology to collect opinions from other ministries on preferential treatments for the park to attract more hi-tech investments.

"The preferential treatments on property issues are aimed at reducing the costs for hi-tech companies when they make investments in the HHTP" Duong said.

At the moment, hi-tech companies have to pay local authorities large amounts as fees for renting land after local authorities buy it from the locals to build infrastructure for hi-tech investments, he said. This actually raises costs for hi-tech companies and discourages them from making investments in the HHTP.

The draft decision also proposed to the government that they reduce taxes for hi-tech companies that have either already invested in the HHTP or are present in the hi-tech park for the first time, Duong added.

"Those that are already present in the hi-tech park will also receive tax exemption to boost their performances and create more value for the country's science and technology development," he said.

The HHTP also proposed that the government approve a one-shop mechanism that allows the hi-tech park to assist companies with administrative procedures to save time and costs, Duong said.

The hi-tech park now has representatives from government agencies such as customs and public security agencies, he said, and added that there will be more government officials representing the hi-tech park.

Moreover, the hi-tech park wanted to receive capital from the State, including the state budget and Japan's Official Development Assistance (ODA), and financial contribution from hi-tech investors in order to create a modern infrastructure and facility for hi-tech projects by 2020, he said.

Duong said that the draft decision is expected to be approved and issued at the end of this year, and HHTP has received positive comments and strong support from some government agencies such as the Ministry of Natural Resources and Environment, the Ministry of Finance and Ha Noi People's Committee.

Hi-tech companies in the park and potential investors have also expressed high expectations in the proposal being approved, he added.

However, the most difficult issue for the HHTP now is how to convince different government agencies to agree with the proposal and how its board can improve the quality of its staff to create the best conditions for hi-tech investors.

Fruit, vegetable exports on target

Fruit and vegetable exports are likely to achieve the Government's target of US$1.65 billion this year, according to the Ministry of Industry and Trade.

More and more countries have opened their door to Vietnamese fruits and vegetables, including selective markets like the US, Australia, the EU and Japan.

Earnings from fruit and vegetable exports have increased strongly in recent years, from $460 million in 2010 to $1.47 billion last year, according to the Viet Nam Fruit and Vegetable Association (Vinafruit).

The figure topped $1.342 billion in the first nine months of this year, a surge of more than 116 per cent over the same period last year.

Viet Nam exports 40 kinds of fruits and vegetables to 40 countries and territories, including major export markets like China, Japan, South Korea, the US, Malaysia and Thailand.

Last year, more than 1.6 million tonnes of fruits and vegetables were exported, of which dragonfruit accounted for more than 997,000 tonnes, watermelon nearly 300,000 tonnes, longan more than 100,000 tonnes, litchi over 70,000 tonnes and rambutan 600 tonnes.

Exports of fresh fruit to demanding markets like the US last year went up by 1.5 times over 2013, with more than 3,000 tonnes of fresh fruits exported.

China is the largest importer of fruits and vegetables from Viet Nam, reaching more than $435 million last year, accounting for 29 per cent of the total exports, according to Vinafruit.

China remained the largest importer in the first eight months of this year with $784.05 million worth of imports, a surge of 139 per cent compared to the corresponding period last year, accounting for 64.2 per cent of Viet Nam's total fruits and vegetables exports.

Major exports to China include mango, banana, dragonfruit and rambutan.

The second largest importer of fruits and vegetables from Viet Nam is Japan with $49.8 million in the period, accounting for 4.1 per cent of Viet Nam's total exports, a rise of 1.3 per cent over the same period last year.

The third position is South Korea with total imports of 47.59 million in the period, an increase of 22 per cent compared to the same period last year, accounting for 3.9 per cent of Viet Nam's total exports.

Exports of fruits and vegetables to Cambodia were only $4.78 million in the period, but it represented an increase of 215.7 per cent compared to the same period last year.

The increase in exports of fruits and vegetables is mainly due to a larger area of fruit and vegetable cultivation that meets VietGap standards, which helped increase the quality of materials.

In September, more than 20 hectares of big longan cultivated in the northern province of Hung Yen met VietGap standards and are now eligible for export to the US, according to the Ministry of Agriculture and Rural Development.

Viet Nam started to export dragonfruit to the US market in 2008, with only 100 tonnes that year.

The export volume has steadily increased, reaching 1,500 tonnes last year and 1,152 tonnes in the first seven months of this year.

Rambutan exports to the market have also increased strongly since late 2011.

Last year, the US market began to accept Vietnamese longan and litchi. Starfruit and mango are both also expected to be shipped to the US by the end of this year.

New Zealand and Australia this year also allowed the import of Vietnamese rambutan and litchi, respectively, and Japan has just opened its market for Vietnamese fresh mango.

At the same time, imports of fruits and vegetables to Viet Nam also rose in the first nine months of the year.

Nguyen Van Ky, general secretary of Vinafruit, said imports of fruits and vegetables were $460 million in the first nine months, or 114.3 per cent over the same period last year ($403 million).

Major exporters of fruits and vegetables of Viet Nam include Thailand, China and the US.

Dong Nai rambutan enters French market

The Binh Loc Co-operative in the southern Dong Nai Province's Binh Loc Commune has shipped two tonnes of dried rambutan to France, bnews.vn reported.

Phung Thanh Tam, chairman of the co-operative, said the fresh Java rambutan, cultivated to meet the VietGap standard, were sold to a French partner at VND5,500 (25 US cents) per kilogram, higher than the maximum domestic price of VND4,000. His co-operative was then responsible for drying the fresh rambutan, while the French partner took care of the delivery, Tam said.

After the first batch, the French side sent a delegation to the province to take samples of the soil and water for testing as part of its plan to support Binh Loc in expanding areas under rambutan cultivation by meeting the GlobalGap standard for the French market from 2016.

Currently, more than 1,200ha of land is under rambutan cultivation in Binh Loc, the largest in Dong Nai. Of the total, 12ha of rambutan are cultivated as per the VietGap standard, including 6ha of Java rambutan.

Once it receives assistance from the French partner, the co-operative will develop Java rambutan fields of high quality and productivity towards meeting the GlobalGap standard.

Construction steel posts record output

The construction steel sector produced a record-high output of 618,000 tonnes in October, about a 30 per cent year-on-year increase, the Viet Nam Steel Association (VSA) said.

The association said steel consumption saw positive changes. Both steel output and sales have been on the rise as several construction projects were implemented together with favourable weather conditions.

Statistics from VSA showed that the steel production of all kinds of its members last month rose 22 per cent year on year to more than 1.3 million tonnes, which was also seven per cent higher than the previous month.

About 1.2 million tonnes of steel were sold in October, a 17 per cent increase over the same period last year and a 13 per cent rise from September.

The total consumption of construction steel reached 627,000 tonnes, representing a 26 per cent year-on-year rise.

The consumption of corrugated iron in October was also relatively high at 212,000 tonnes, increasing 22 per cent from September and 35 per cent from the corresponding period last year.

Exports of plate corrugated iron in October touched 86,400 tonnes or 16 per cent higher than the previous month, posting a 14 per cent year-on-year increase. The Hoa Sen Group took the lead in plate corrugated iron exports with 38 per cent, followed by Nam Kim Steel Joint Stock Company at 13 per cent and Dong A Corporation at 12 per cent.

VSA's Vice-Chairman Nguyen Van Sua said local steel companies had been active in improving their competitiveness, taking advantage of the recovery of the real estate market. However, this has been temporary growth.

Sua said steel producers still faced competition from cheap steel from China, to which chrome was added to make an alloy to enjoy a zero tax rate, instead of the tax rate of nine per cent imposed on steel ingots for construction. The alloy was sold at US$255 to $258 per tonne, a 45 to 50 per cent reduction in comparison with the beginning of 2014.

In addition, the country's steel exports faced difficulties as Vietnamese steel coped with anti-dumping investigations and lawsuits in large markets. Domestic steel exporters were expected to face more pressure from imported steel from ASEAN countries and Russia when free trade agreements (FTAs) take effect, he said.

Sua said the government should take stronger measures to prevent a flood of cheap imported steel and trade fraud. Technical and commercial barriers to steel imports should also be implemented to reduce the difficulties being faced by steel producers.

However, steel businesses should further improve their products' quality, reduce costs to better compete with imported steel, and gain knowledge about trade defence measures.

Finance minister: SCIC performs well

The State Capital Investment Corporation (SCIC) has performed well in taking over State-owned enterprises and making efficient divestment in some enterprises, while making just a few new investments.

This was said by Minister of Finance Dinh Tien Dung in the National Assembly's question-and-answer session late on Tuesday.

"Investment activity made by SCIC has not been plentiful, but its functions of taking over State capital management and divestment have been exercised well," Dung said.

Viet Nam's sovereign investment fund, formed in 2005 to invest in State-owned enterprises (SOEs), has taken over State ownership rights in 980 enterprises with a total book value of nearly VND8.52 trillion (US$380.4 million).

In the past 10 years, it has sold State holdings in 811 enterprises, of which it has unloaded the entire stakes in 733 companies, reduced holdings in 78 firms and sold share purchase rights in nine enterprises.

It has collected over VND9.24 trillion ($412.5 million) during these sales, a rise of 240 per cent over the original cost, and earned a capital surplus of VND5.36 trillion ($239.3 million).

Under the Government's regulation, such capital surplus will be recorded in its business results. After paying tax and allocating a proportion to the designed investment development funds, the remaining profits will deposited into the State budget.

The corporation has also collected over VND76.56 trillion ($3.4 billion) for the Business Arrangement and Development Support Fund in which it represents the Government's management from 2011 to 2015, including VND13.76 trillion ($614.28 million) from SOE equitisation, VND37.7 trillion ($1.7 billion) from profits and dividends in invested enterprises, and VND12.93 trillion ($577.2 million) from interest income from cash deposits and government bonds.

Regarding the SCIC's investment activities, the minister said SCIC has invested around VND5 trillion ($223.2 million) in government bonds.

It has planned to invest VND157 billion ($7 million) in a cancer drug factory which has a total investment capital of VND525 billion ($23.4 million). The project is under investment research and SCIC has contributed VND77 billion ($3.4 million).

It has also pumped nearly VND1.67 trillion ($74.6 million) into the Song Da water plant No 2 project.

In October, the government directed the SCIC to select an appropriate time to sell the entire State capital in 10 big SOEs, including Viet Nam's biggest dairy producer Vinamilk, software giant FPT Corp and Bao Minh Insurance Corp.

This is in line with the government's policy to reduce involvement in economic sectors, where private businesses can operate and earmark resources for fields that require State control like national security, social welfare, and infrastructure and poverty reduction.

South-South Cooperation takes centre stage in HCM City

On November 18, development experts, policy specialists, government officials and business representatives of Africa and Vietnam gathered at a workshop in Ho Chi Minh City to focus on ways to enhance South-South Cooperation (SSC).

“The evolving economies and expertise of all of the countries participating allow for the exchange of advanced knowledge they all agreed, but first there needs to be a common language to facilitate communication.

There was general agreement that the French language would be the best language to use to amplify communication for this purpose as most of the members from African countries speak French with a high degree of fluency.

Representatives of roughly 100 businesses from the Mekong Delta, primarily engaged in agriculture and construction, were in attendance at the forum sponsored by the Vietnam Chamber of Commerce and Industry (VCCI) in collaboration with the International Trade Centre.

Rising demand for Uber cars, cheap loans boost car sales in Vietnam

Many Vietnamese are buying new cars financed by soft loans widely offered by local banks, reflecting demand for serviced cars, especially Uber, as they find joining the U.S-headquartered app-based car service provider will give them a good source of income.

Uber, which connects passengers and drivers via a smartphone app, started offering services in Vietnam on July 31, with rides now available in both Hanoi and Ho Chi Minh City.

Customers use the Uber app on their smartphones to request rides and track their reserved vehicle's location.

Uber riders will be informed of the fare and ETA (estimated time of arrival) before they get in the car, and the complete fare is automatically billed to the customer's credit card at the end of a ride.

The transport firms that own the cars will receive 80% of the payment, while 20% goes to Uber.

Many banks told Tuoi Tre (Youth) newspaper that they are also promoting car loans, as though the lending is not as high as it was in the past, credit for car purchases is still more profitable than that for enterprises.

Many automobile trading companies said the number of cars sold during the first ten months of this year rose sharply against the same period last year, especially in October.

Moreover, the majority of new car purchases were funded by money the buyers borrowed from banks, they told Tuoi Tre.

Phan Duong Cuu Long, general director of Saigon Ford, said the company sold 180 vehicles in October, up 15% month on month and 25% year on year.

Nguyen Thi Quynh Nhu, deputy general manager of the Toyota Ly Thuong Kiet dealership in Ho Chi Minh City, also said it has sold an average of 150 vehicles per day in the year to date, an increase of 20% over the same period last year, and of which about 30% were financed by bank loans.

A leader at local lender Sacombank said the bank's auto loans have risen 40% from early this year.

Having just completed the procedure to buy a 1.5L Ford Fiesta worth nearly VND700 million (US$31,500), Ngo Minh Cuong from District 7, Ho Chi Minh City told Tuoi Tre that in addition to serving individual needs, he will also join the Uber team for evening drives to gain access to potential customers of the bank he is working for.

With a VND450 million (US$20,270) loan in seven years at preferential rates for bank employees, each month Cuong needs to pay about VND8 million in principal and interest, which he considered "reasonable.”

Meanwhile, instead of spending money buying an imported SH 300i scooter priced at VND270 million (US$12,150), N.V.T. from District 11 said he has sought an additional loan to buy a Kia Morning sedan as a serviced car.

According to the automobile trading companies, there was a significant number of customers buying cars for use for both personal needs and leasing it to car service providers like Uber.

According to T., with VND120 million (US$5,400) available and an additional VND240 million (US$10,800) loan, he has to pay VND6 million in principal and interest every month.

He added that he has hired a driver to drive the sedan for a car service provider, earning VND1-1.2 million daily.

After setting aside the money for paying the driver and repaying the bank loans, T. can still earn a good amount of profit, he added.

A salesman for an automobile trading company said he and the other 20 counselors can sell an average of two to three cars each month to customers who buy the cars to lease them out.

Last month he sold five cars to those purchasing them for that specific purpose.

A leader in Truong Hai Auto JSC told Tuoi Tre that 200 out of 1,000 Kia Morning sedans its customers bought in October will be used for leasing to the Uber service, which, according to him, “is a surprising figure.”

A representative of the Kia auto showroom on Nguyen Van Troi Street, Ho Chi Minh City told Tuoi Tre that there were some customers buying 3-5 cars at the same time, and there were even some buying 10 automobiles at once with bank loans to lease to Uber.

Dinh Thi Le, director of a transport cooperative with 500 members in the city’s District 8, said the number of businesses registering for Uber has consecutively increased in recent months, rising 30% month on month in October.

According to the automobile trading companies, the rise in car sales is also triggered by many taxi firms having started a new business cycle to renew their teams, which often takes place once every 7-8 years, and the rising number of car buyers who want to join conventional taxi businesses.

Vietnam may add small airport near Ho Chi Minh City

The airport in Ba Ria-Vung Tau will serve domestic flights with a designed capacity of 100,000 passengers a year.

The Vietnamese government is considering a new airport in the southern province of Ba Ria-Vung Tau, according to a national plan for transport infrastructure development by 2020.

The domestic airport will be located on Go Gang Island, about three kilometers off the beach town of Vung Tau, local media reported, citing the plan.

With a designed capacity of 100,000 passengers and 500 tons of goods a year, the airport will be specific for helicopters and small planes which operate on short routes such as those connecting oil rigs, besides tourist trips.

Under the plan, the government also designates Tan Son Nhat Airport in Ho Chi Minh City to continue to serve as the southern region's hub, even though Long Thanh Airport in the nearby province of Dong Nai will replace it as the country's biggest airport.

Tan Son Nhat will be expanded to serve 25-26 million passengers and 1 million ton of goods a year, according to the plan.

Last month the transport ministry approved VND6.4 trillion (US$283.12 million) project to expand the airport, which has been operating far above its capacity of 20 million passengers a year since 2013.

On the other hand, Long Thanh Airport is slated to serve 25 million passengers and 1.2 million tons of goods a year during its first stage.

According to the latest official estimates, the construction of Long Thanh's first stage will start some time between 2018 and 2019, at a cost of US$15.8 billion.

KPMG leader visit highlights BEPS initiative

Latest developments under the Base Erosion and Profit Shifting (BEPS) initiative of the Organisation for Economic Co-operation and Development (OECD) was one of the key points of a recent four-day visit by KPMG’s global leader for Transfer Pricing Services Sean Foley to Vietnam.

He shared the issue with Vietnam’s General Department of Taxation in a full-day workshop in Hanoi.

The BEPS initiative is an effort to coordinate the taxation of multinational corporations to ensure that they pay the appropriate amount of taxes in each country in which they operate.  

On October 5, the OECD released a series of 15 papers discussing various aspects of international taxation and transfer pricing, including the sharing of relevant tax information among tax authorities entitled Country-by-Country Reporting (CbyC Reporting).  

Foley also shared how CbyC Reporting is to be adopted around the world including the US, China, Japan, the UK, and Australia.  

The Vietnam Tax Authority has indicated particular interest in the new CbyC Reporting regime and participation in the government-to-government sharing of tax information.   

During discussions with the Vietnam Tax Authority and companies, Foley highlighted the practical implications of CbyC Reporting, including the appropriate use of this information, the timing of the reporting and specific accounting issues that may present some interpretation challenges.  

The other part of the workshop with the General Department of Taxation was on Advance Pricing Agreement (APA) programmes, particularly the success lessons.

“Vietnam has been deeply integrated into the global value chain and participated in some of the world’s most important free trade agreements, such as the Trans-Pacific Partnership (TPP).  It is important that tax and transfer pricing regulations are adapted in view of the global environment, particularly the OECD’s BEPS actions”, said Hoang Thuy Duong, Tax Partner of KPMG in Vietnam.

Prior to joining KPMG, Foley worked at the United States Internal Revenue Service (IRS) where he was the director of Advance Pricing Agreement (APA) Programme which provides rulings for taxpayers to establish their transfer pricing for present and future periods, typically five years.  

With a wealth of experience in both commercial and regulatory bodies in relation to the APA process, Foley noted that APA is increasingly sought by governments and taxpayers around the world to resolve complex transfer pricing issues.  

Vietnam has established an APA programme for the last couple of years and is currently working on its first APA.  

“Vietnam is actively promoting APAs to encourage inbound trade and investment.  Success experience learnt from the APA programmes run by some of major trading partners, including the US, the EU, Japan, and the Republic of Korea will be useful for Vietnam’s APA programme,” said Duong.

KPMG is a global network of professional firms providing Audit, Tax and Advisory services that operate in over 155 countries and have more than 155,000 professionals working in member firms around the world.

Vietnam going all out to grow its geographic footprint

Consumers the world over have historically closely associated agricultural products with the territory of the particular country, region, or locality from which they were grown or raised.

The reputation of a specific geographical location has always been essential to the survival of agricultural businesses operating within its boundaries as the trust and confidence of the consumer most often has a profound effect on bottom line profits.

Dat Lat organic vegetables, Dak Lak coffee, Hung Yen lychees are all examples of agricultural products that are readily associated by Vietnamese consumers with their geographical location and have excellent reputations for quality.

If Vietnamese agriculture geographical locations, such as those mentioned, have a good reputation in the marketplace, consumers will most likely have a preference for them even if other businesses offer the same or similar products for lower prices.

The reputation of the geographical location can enable Vietnamese businesses to differentiate their products in highly competitive markets such as the UK, Germany and France and allow them to command premium pricing.

It could also be the determining factor in the decision by discriminating consumers in those countries whether to patronize Vietnamese farm produce or purchase a competitor’s products.

However, geographical names with commercial value are exposed to misuse and counterfeiting. The abuse of geographical indications limits access to certain markets and undermines consumer loyalty.

Fraudulent use of geographical locations or geographical indications (GIs) as they are commonly referred to hurts both producers and consumers and is one of the primary catalysts for the global movement for registration of them.

The EU continues to be one of the principal supporters of negotiations on geographical indications in the World Trade Organization (WTO) Doha Development Agenda.

The recently concluded (but yet to be ratified) EU-Vietnam Free Trade Agreement contains important levels of protection for Vietnamese agriculture products and their geographical indications.

Registering a geographical indicator is relatively simple in concept as it, hypothetically would allow Dat Lat Organic Vegetables to obtain a registered GI, which would mean that only growers in the Dat Lat region could use the label or sign ‘Dat Lat Organic Vegetables’.

Any farmer in the Dat Lat region would then be permitted to use this label provided they comply with the rules for growing as registered. Notably, all businesses from other WTO member nations would be prohibited from using this label.

So in concept it is similar to a brand name, trademark or other intellectual property right— but yet it is distinctively different in most respects, a fact commonly misunderstood by the Vietnam media.

A three-year US$1.3 million project aimed at improving the registration and management of GIs in Vietnam was recently launched by the Vietnam Ministry of Science and Technology (MoST).

The Agence Francaise de Development (AFD) will fund US$1.09 million of the cost of the project, which is a joint undertaking of the Vietnam Rural Development Centre, Centre for Agrarian Systems Research and Development, and the French Agricultural Research Centre for International Development.

Vietnam is going all out to grow its geographic footprint, said Deputy Minister Tran Viet Thanh of the MoST at the unveiling and hopes to learn from the experience of France to make GIs an effective economic tool to stimulate agriculture exports.

Measures discussed to boost Vietnam-Japan trade ties

Financial assistance and proper information are among practical measures needed to maximise profit for enterprises exporting to Japan, according to experts.

Many experts shared the view that domestic products and enterprises have faced huge challenges from renowned, high-quality Japanese brands with low prices, due to preferential import tariffs from the Vietnam-Japan Economic Partnership Agreement (VJEPA).

According to the VJEPA, which came into effect in October 2009, from 2015 to 2019, an additional 150 Japanese product lines will enjoy zero% import tariffs when entering Vietnam, raising the total number of product lines that benefit to 3,234, accounting for 34% of the total import tariffs.

By 2019, roughly 92% of the products are expected to enjoy import tariff exemptions when entering the respective nations. Specifically, Japan committed to free trade for 94.53% of the trade value, while Vietnam aims for 87.66% of the trade value.

Deputy Director of the Central Institute of Economics Management (CIEM) Tran Dinh Thien pointed to the importance of credit incentives and support from authorities, ministries, and sectors in boosting enterprises’ operation and their investment in infrastructure and technologies in the early integration process.

Deputy Director General of the Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) Nguyen Van Du stressed the need for credit incentives, in terms of preferential interest rates, exchange rates or loan policies being devised for export businesses involved in the Vietnam-Japan trade.

Vietinbank, as the intermediary of international financial institutions such as the World Bank (WB), the Japanese Bank of Tokyo Mitsubishi (BTMU) and the Asia Development Bank (ADB), has provided financial support for domestic and Japanese enterprises to boost their operation and foster Vietnam-Japan ties, Du said.

A number of joint credit programmes have also been implemented by the bank, the Japanese Bank for International Cooperation (JBIC) and the Japanese International Cooperation Agency (JICA) to support small- and medium-sized enterprises (SMEs).

In addition, the bank has offered a variety of support packages to the firms trading directly with Japan, such as preferential interest rate loans for those operating in the fields of agro-aquatic products, petroleum and oil, automobile manufacturing, garment-textiles and support industries.

Deputy Minister of Finance Nguyen Tri Dung called for joint efforts from experts, development funds, commercial banks and enterprises to tap the VJEPA’s potential and participate more fully in global market chains.

Meanwhile, Hanoi Support Industries Business Association President Nguyen Hoang said ministries and sectors should enhance their understanding of market developments and relevant trade policies in a bid to better the implementation of the agreement.

Government statistics show that between 2011 and 2013, Japan topped the list of 101 countries and territories investing in Vietnam.

Japan is Vietnam’s third largest trade partner, with trade expected to near US$30 billion this year. Its investment is expected to reach US$38 billion.

50 Korean businesses to seek opportunities in Vietnam

A Republic of Korea’s business delegation representing 50 firms will attend the Korea Vietnam Show in Hanoi on December 2-3, according to the Korea Trade-Investment Promotion Agency.

During the event, they will introduce a wide range of products including cosmetics, food, drink, garment, consumer products, pharmaceuticals, medical equipment, electric and electronic equipment and industrial machines.

All these products will enjoy tax cut after the Vietnam-Korea Free Trade Agreement (VKFTA) comes into effect.

Four hundred Vietnamese businesses will take part in the event with the aim of seeking Korean partners in the fields of agriculture, handicraft, seafood , garment and footwear.

KOTRA Hanoi Director General Lee Kyu Seon said the VKFTA will open more cooperative opportunities for business communities from both countries. This year, KOTRA has organised 7 trade exchange events and three exhibitions in Hanoi.

VKFTA was signed in May 2015 after more than 2 years of negotiations and is expected to come into effect in 2016.

Vietnam, Japan enterprises speed up technology transfer

A programme took place in Ho Chi Minh City on November 17 to promote technology transfer between Vietnamese and Japanese enterprises in the fields of industry and building.

During the event was jointly held by the Energy Conservation Centre in Ho Chi Minh City (ECC) and Japan’s Mitsubishi UF J Morgan Stanley Securities (MUMSS), seven world’s leading technology suppliers of Japan introduced to Vietnamese partners their latest technological solutions and applications in industry and building areas such as construction glass, air-conditioner, solar energy, led bulb and sewage treatment system.

MUMS also introduced financial solutions to support technical investment under the JCM mechanism of Japan’s Ministry of Environment.

According to ECC Director Huynh Kim Tuoc, technological innovation and product renovation to increase productivity and quality are key factors to help enterprises grow during the international economic integration.

Bilateral and multilateral free trade agreements, especially the Trans-Pacific Partnership (TPP), once signed, will result in strong liberation of trade and investment among countries, he said.

It requires Vietnamese businesses to make technological innovations to raise their products’ position in the global supply chain, he noted.

Over the past time, ECC and MUMSS have cooperated in a number of technology transfer and financial aid projects in Vietnam.

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