Petrol up VND275 per litre

The retail prices of petroleum and biofuel E5 RON 92 increased by VND275 per litre to VND20,711 (US$0.95) and VND20,381 ($0.94) per litre, respectively, from 3pm yesterday.

The Ministry of Industry and Trade and Finance Ministry said the prices of other items have reduced, including diesel, by VND287 per litre; oil (VND275 per litre); and mazut (VND423 per litre).

Accordingly, diesel costs VND16,077 ($0.74) per litre; oil comes for VND20,381 ($0.94), and mazut is priced at VND12,730 ($0.58) per litre.

In addition, the two ministries also decided to keep the spending on price stabilisation fund unchanged for petrol at VND1,047 and E5 at VND882 per litre.

The ministries noted that global petrol prices were still at a high level. The average price of petroleum in the world market in the past 15 days was $82,426 a barrel; $74,970 for a diesel barrel; $74,658 per oil barrel, and $364,664 per tonne of mazut.

The latest petrol price adjustment was on June 4. The prices of petrol RON 92, biofuel E5 and mazut remained unchanged in comparison with May 20. The prices of oil and diesel reduced by VND380 and VN20 per litre, respectively.

Gov’t resolution on improving business environment reviewed

Representatives from ministries, business associations and experts gathered at a conference in Hanoi on June 18 to review the implementation of a Government resolution on improving the business environment and national competitiveness, also known as Resolution 19.

Director of the Central Institute for Economic Management (CIEM) Nguyen Dinh Cung said the event aims to evaluate the progress of the resolution and collect recommendations on addressing obstacles during implementation to be submitted to the Prime Minister.

Representatives from the CIEM Department for Business Environment and Competitiveness held that remarkable improvements have been seen in business start-up procedures since last year.

The Law on Enterprise 2014 allowed firms to finish their business registrations in three days instead of six, as set by the Resolution, while the investor protection index was raised by 105 spaces, reaching the average level of ASEAN countries, they noted.

Meanwhile, Vietnam remained slower than other ASEAN countries in terms of power access despite a 12-space rise last year, while a similar situation is occurring in tax and social insurance payments despite a 27-space improvement.

A stagnant point in the implementation of the resolution is the duration of resolving bankruptcy and business dispute procedures, they added.

As scheduled, ministries and localities should have issued a plan of action to realise the resolution by the end of April this year. However, the Ministry of Planning and Investment reported that so far, it has received plans from only 11 ministries and 11 localities. The other 14 ministries and 52 localities have failed to finish their plans on time, including Ho Chi Minh City.

Furthermore, the submitted plans have not clarified specific measures and targets.

During the conference, participants also proposed that relevant ministries promptly review regulations on import and export goods to reduce time and costs for businesses during customs clearance process.

They also asked for guidelines in meeting technical standards from a number of strict markets.

Ha Tinh appeals for Japanese investment

The central province of Ha Tinh called for more Japanese investment inflows during a meeting in Hanoi on June 18.

The meeting, attracting local authorities, agencies and over 50 Japanese enterprises, afforded them an opportunity to learn more about local strengths and incentives if they decide to invest in the province.

In recent years, Ha Tinh has attracted a huge volume of foreign investments due to its dedication to a transparent business environment, with a focus on simplified administrative procedures.

Furthermore, it boasts a contingent of qualified and young workforce and an convenient transport infrastructure. The province currently ranks sixth in terms of foreign investment attraction.

Over 2,000 Japanese businesses are currently operating in Vietnam, mostly in the seven biggest cities and provinces nationwide.

Japan is Vietnam's leading source of foreign direct investment, with 2,029 underway projects worth 33.06 billion USD.

According to the provincial Department of Investment and Planning, the province has licensed 361 projects valued at more than 425 trillion VND (20.2 billion USD), 306 of them worth 3.6 billion USD are registered domestically and the remaining are FDI projects worth 16.5 billion USD.

At present, more than 10 countries and territories operate businesses in Ha Tinh, including Japan, the Republic of Korea, Brunei, Australia and the US.

Banks raise dong deposit rates to improve liquidity

Some mid-sized commercial joint stock banks recently raised interest rates on short-term dong deposits amid rising credit demands.

HDBank has increased its rates by 0.3 percent to 5 percent per year on one-month deposits, 5.7 percent on terms between six and 11 months, and 6.5 percent on deposits above 12 months.

DongA Bank pushed its interest rates by 0.1-0.3 percentage, while deposit rates at Eximbank were revised by 0.2-0.4 percentage.

The rise came a few weeks after some large lenders such as Agribank and ACB announced increases in their interest rates on long-term dong deposits to improve liquidity amid the pressure of a stronger US dollar.

Interest rates on deposits above 12 months are currently one percentage higher than the deposits for other terms.

Attempting to lure depositors, private commercial joint stock banks are currently offering interest rates of roughly 0.8 percent higher than that by State-owned commercial joint stock banks.

According to Tuoi tre (Youth) newspaper, Truong Van Phuoc, Vice Chairman of the National Financial Supervision Commission (NFSC), noted that banks had raised interest rates to improve liquidity and it was a normal practice and not a basis for them to hike lending rates accordingly.

Financial expert Nguyen Tri Hieu observed that although inflation remained stable, with CPI in May rising 0.16 percent over the previous month and up 0.95 percent year-on-year, a stronger US dollar recently affected capital mobilisation as some people withdrew their dong savings to buy the dollar; hence, banks had to raise dong deposit rates to attract capital.

The NFSC last month said that deposit rates were under pressure and set to rise as the growth rate of deposits had been lower than that of credit.

The total deposits rose 0.98 percent in the first quarter, while the total outstanding loans increased 1.7 percent, in which outstanding loans in dong climbed 2.4 percent and outstanding loans in foreign currencies dropped 0.9 percent, NFSC said.

As a result, the loan-to-deposit ratio rose to 84 percent from 83 percent in December 2014, of which LDR in foreign currencies climbed to 87 percent from 83.4 percent at the end of 2014, the NFSC reported.

Experts said that the deposit interest rate rise was a positive signal as it showed that capital demands were recovering.

According to statistics from the State Bank of Vietnam, credit growth in the first five months this year rose 4.8 percent, much higher than the 2.3 percent hike in the same period last year.

Heat wave heats up air-con market in Hanoi

Hanoi has seen a strong demand for air-conditioners and fans over the past month as blistering heat waves have raised temperature in the capital up to 43 degrees Celsius.

Major electric appliance retailers in Hanoi, such as Pico, BigC, Tran Anh and Nguyen Kim, sell a wide selection of cooling devices this summer, ranging from air-conditioners to water misting fans.

According to a salesman at BigC Thang Long, consumers prefer misting fans this year, which suit their need for power saving and cooling without skin drying effect.

The misting fans, mainly by Sunhouse, Kangaroo and Omec, are sold for between 1-3 million VND (46 – 138 USD).

The retailer has also offered various promotional deals to fuel sale.

Store owners along Tran Duy Hung, Le Van Luong and Nguyen Chi Thanh streets said products vary in design and come with additional functions, while price competition among manufactures proves to benefit customers.

Air-conditioner sale at Tran Anh electronics retailer in Giai Phong Street went up by 30-35 percent against the same period last year with Panasonic, Sanyo, Daikin and Samsung brands among the biggest movers while Pico mart also enjoyed a 10 percent growth in sale.

Pico’s Marketing Manager Vu Thi Ngoc Hue noted that air conditioners with inverter technology designed to save up to 50 percent of energy has been on high demand despite its relatively high price.

Because of the strong demand, some stores are finding themselves short of goods as well as technicians and delivery people.

Vietnam joins int’l trade fair in Venezuela

Vietnamese traditional handicrafts and products were showcased at a recent international trade fair in Caracas, Venezuela.

The Gran Bazar Kermesse Benefecico 2015 was co-organised by the diplomatic mission in Venezuela and the Venezuelan ministries of foreign affairs and Cultures.

The event was to introduce the beauty of Vietnam’s landscapes and people to international friends.

It also features economic and trade potential of other member countries of the Association of Southeast Asia Nations (ASEAN).

PVcomBank to sell bad debt to VAMC

The Viet Nam Public Bank plans to sell bad debts worth VND1.5 trillion (US$71.43 million) to the Viet Nam Asset Management Company (VAMC), while handling VND600 billion ($28.57 million) itself.

The bank, also called PVcomBank, has announced the scheme in documents to be released at a shareholders' meeting, which will be held in Ha Noi on June 20.

Last year, the bank sold some VND1.98 trillion ($94.28 million) in debts to the VAMC, recovered VND55.7 billion ($2.65 million) with its provisional funds and transferred some VND114 billion ($5.42 million) to other organisations and individuals.

PVcomBank's bad debt ratio was 2.67 per cent at the end of 2014, falling by 1.75 percentage points from the figure recorded at the end of 2013. The capital adequacy ratio reached 11.35 per cent, higher than the 9 per cent stipulated by the State Bank of Viet Nam.

Last year, the bank obtained VND7 trillion ($333.33 million) in turnover, about 37 per cent higher than the annual target. It gained VND130 billion ($6.19 million) in pre-tax profits, exceeding the targeted figure by VND1 billion ($47,600).

PVcomBank has VND100 trillion ($4.76 billion) in total assets and VND9 trillion ($428.57 million) in charter capital. The Viet Nam Oil and Gas Group owns 52 per cent and strategic shareholder Morgan Stanley holds 6.7 per cent of the bank's equity.

Maize imports rise as rice exports fall

Maize imports in the first five months of 2015 are on the rise but rice exports are on the decline, according to figures from the Ministry of Agriculture and Rural Development.

Viet Nam imported 2.87 million tonnes of maize, worth US$622 million, up by 30.3 per cent in volume, and an increase of 16.8 per cent in value compared with the same period last year.

The country also imported 700,000 tonnes of beans and other materials for processing of animal feed worth nearly $1.4 billion.

Meanwhile, exports of rice from Viet Nam over the same period reached 2.08 million tonnes, worth $875 million, a decline of 255,000 tonnes in volume and $138 million in values over 2014.

In all, the value of imported animal feed and other materials for the food processing industry in the first five months amounted to nearly $2.3 billion, nearly triple the total value of rice exports over the same period.

Authorities have been urged to re-structure the country's planting systems, aiming to reduce material imports while easing the pressure on rice consumption.

The programme to re-structure rice plantation to other crops including maize began in 2013 when the country's rice exports were stagnant.

However, the programme has faced challenges in many localities across the country.

The slump in the world's farm produce prices, including maize prices, has caused local agricultural products to be less competitive than imported goods.

Maize prices have dropped to less than VND5,000 per kg since the end of 2014, making maize growers' profits lower than rice growers'.

It has forced many farmers to return to rice cultivation.

Huynh The Nang, chairman of Vietnamese Food Association, said that global demand for rice had changed greatly compared to five to 10 years ago. Rice growing countries have increasingly raised their output, while rice buyers have also been promoting rice production.

"It's time for Viet Nam to re-consider rice production and exports with an aim to raise the added value of this product and a bigger effort to change rice into more necessary crops," he said.

Unfinished resorts occupy beaches in Da Nang despite ultimatum

What are beaches for but sunbathing and swimming? The answer you get from some resort developers in the central city of Da Nang is that these are places to start building projects and leave them unfinished for ages.

Many developers have tried to obtain land plots along the beautiful beaches in the central tourism hub with promising resort projects, but what they actually do is turn them into construction sites that never seem to be finished.

The 30km-long beach from the Son Tra peninsula in Da Nang to Cua Dai in nearby Hoi An City of Quang Nam Province is considered the best of its kind in central Vietnam, but it is also where the most uncompleted resort projects are located.

In 2005 Hai Duy JSC and Invesco, two companies based in Ho Chi Minh City, were licensed to break ground on their Bai But Bay Resort in Son Tra.

The 30-hectare project, with a registered capital of US$30 million, is expected to become a paradise for tourists. But the best the developers could do in building the “heaven” is a block of houses and an artificial lake behind a dull brick wall.

Da Nang authorities have issued many ‘ultimatums,’ threatening to revoke the investment license for the project, but the developers remain stubborn.

Many other resort projects, including Sontra Travel, Anvie Danang, The Song – Danang Beach Villas, and Non Nuoc Resort, are also occupying dozens of hectares along the Da Nang beaches, while whether or not they will be finished remain a mystery.

In the meantime, these unfinished construction sites are blocking the way to the beaches from locals and tourists. They thus have to flock to a few public beaches, leaving these places overcrowded.

There are currently 18 sluggish resort projects dotting the beaches in Da Nang, according to a report by the city’s administration.

“Da Nang has created favorable conditions for the developers but they have left these seaside projects unfinished for years,” Nguyen Dieu, director of the local Department of Natural Resources and Environment, admitted.

“We have also repeatedly issued ultimatums to them but things remain unchanged.”

Dieu said the developers refuse to complete their seaside projects not only because of the frozen realty market, but also the unstable tourist arrival numbers.

He also admitted that some developers are waiting for the right time to transfer their projects, or the land plots they are allocated.

These developers, however, will be dealt a tougher hand in the future, Tran Tho, secretary of the city’s Party Committee, underlined.

“Whenever we threaten to take tough measures, the companies criticize us for not sharing their hardship, but our tolerance is limited,” he said.

“It is unacceptable that they get the land and wait for the chance to transfer it [to reap profits].”

Da Nang will inspect all of the seaside projects in the city and will strictly punish developers who misuse or do nothing to the land plots they are assigned.

“Legally speaking, Da Nang is totally capable of revoking these land plots,” Dieu, from the natural resources department, said.

“A company will lose the land it is granted if it fails to do what is committed in the investment license.”

Economy minister urges decriminalisation of economic violations

Minister of Planning and Investment Bui Quang Vinh has urged the National Assembly not to criminalise economic and civil relations as the legislature discussed changes to the Penal Code on June 16.

Minister Vinh said he supports the removal of two crimes, doing illegal business and intentionally violating State regulations on economic management, from the current Penal Code, considering them as obstacles to economic development.

He reiterated the spirit of the 2013 Constitution in which citizens are permitted to be involved in any business not banned by law which was concretised in the new Investment Law adopted last year reducing the number of banned trades from 51 to just six.

He said that the inclusion of the two crimes are impeding business innovations and discouraging investors from pouring money into new potential investment opportunities.

The minister added that however open the economic laws are, no one can do business if the criminal law is restrictive and obscure, emphasising that this matter is crucial to the wealth and development of the country.

In other matters, the majority of NA deputies endorsed limiting capital punishment in three areas: reducing offences punishable by death, imposing stricter conditions on death sentences and increasing the number of exemptions for those on death row.

According to draft amendments, seven crimes will be removed from the current list of 22 crimes subject to capital punishment, including undermining peace, provoking conflict and international war; and crimes against humanity as well as war crimes.

However, Deputy Bui Ngoc Chuong from Ca Mau province stated that the above-mentioned crimes should not be removed as they are extremely serious and must be punished in line with the seriousness of the crime.

A number of deputies also asked to retain drug trafficking in the capital punishment list as removing it will encourage immoral acts and open the way for drugs to be trafficked into the country.

January-May auto sales grow strongly

More than 84,800 autos were delivered to customers in Vietnam in the first five months of this year, up a staggering 105% compared to the same period last year, the Vietnam Automobile Manufacturers Association (VAMA) reports.

An updated report of VAMA showed that auto firms sold nearly 18,000 vehicles last month, jumping 47.7% year-on-year.

Sales in all auto segments surged in the period, with passenger cars rising 88% year-on-year, commercial vehicles soaring 103% and special-use vehicles climbing 116%.

The January-May period saw sales of imported completely built-up (CBU) autos soaring 109% and domestically-assembled cars advancing 104% compared to the year-ago period.

VAMA member enterprises reported good sales in the first five months of this year. For instance, Ford Vietnam sold over 7,300 units, jumping 71% year-on-year and that of Toyota Vietnam surged 42% to 18,700 cars.

Truong Hai Auto Corp. (Thaco) sold 27,900 vehicles in the period, rising 94% against the same period last year. With the sales volume, the company led the domestic auto market with a 37.3% share.

Luxury cars also sold well from January to May. Mercedes-Benz Vietnam delivered 1,380 units to customers in the period, up 59%, and Lexus Vietnam sold 483 cars with each priced at VND2.5 billion or above, a 277% year-on-year pickup.

Industry insiders forecast car consumption would reach 200,000 units this year as demand would pick up at year-end if there were no auto consumption tax and fee changes as seen in previous years.

In 2009, Vietnam’s auto sales rose to a record high of 180,000 units before retreating in the following years. Last year, auto consumption bounced back to around 157,800 units.

Minister Hoang: Underground economy does exist

An underground economy does exist in the country, Minister of Industry and Trade Vu Huy Hoang said last Friday after having avoided discussing this matter in previous days.

Hoang beat around the bush when deputy Mai Huu Tin of Binh Duong Province last Friday again asked whether Vietnam has an underground economy or not, a question which went unanswered several days before.

Deputy Ngo Van Minh of Tien Giang Province asked the same question, saying Minister Hoang should make clear why there is a big gap between trade figures of Vietnam and China.

Last year Vietnam put its exports to China at US$14.9 billion and its imports from the northern neighbor at US$43.8 billion. Meanwhile, Chinese statistics put China’s imports from Vietnam at US$19.9 billion and its exports at a staggering US$63.7 billion. This means Vietnam’s trade deficit with China last year should have been US$43.8 billion, well above the US$28.9 billion announced by the General Statistics Office (GSO).

Minister Hoang did not go straight to the point, though. He talked a lot about the existence of different trade data between Vietnam and other countries like South Korea, Japan and Singapore.

And when he began explaining the huge difference between trade data announced by Vietnam and China, NA Chairman Nguyen Sinh Hung requested Hoang to reply to the question.

Hoang admitted, “Certainly, there is smuggling and certainly there is an underground economy.”

That is why Vietnam is maintaining Steering Committee 389 on anti-smuggling and anti-trade fraud and market monitoring forces, he added, but people at these agencies are assigned work on a rotating basis to prevent corrupt practices.

MoIT optimistic on trade with Japan

Vietnam’s combined imports and exports to Japan is forecast to reach US$30 billion in 2015, an increase of US$2 billion when compared against last year, according to Ministry of Industry and Trade (MoIT).

Japan is the third largest importer of Vietnam goods and services, just after China and the US. Key exports to Japan are garments and textiles, footwear, handicrafts, furniture, seafood, crude oil, computers and electronics.

Notably, Vietnam generated US$2.7 billion from exporting garment and textile products to Japan last year, which is expected to grow to US$3 billion this year.

Le An Hai, deputy head of the Asia-Pacific Market Department of the MoIT affirmed Japan is one of the major markets and an important trading partner of Vietnam.

Conference seeks financial support measures for SMEs

Enhancing financial support for small- and medium-sized enterprises (SMEs) businesses was the main focus of a conference held by Ho Chi Minh City’s Association of SMEs and the municipal Department of Industry and Trade on June 17.

During the event, experts said it is increasingly difficult to solve issues related to capital for enterprises, as almost all Vietnamese companies operate at small and medium scales.

Vice Chairman of the Association Pham Ngoc Hung said his agency carried out a survey of business awareness of Vietnam’s integration process, which produced alarming results as almost all interviewed firms stated they are concerned about issues related capital, trade barriers and markets if Vietnam integrates deeply into the global economy.

Assessing Vietnam’s economic development situation in the first months of the year, experts said the country saw signals of recovery in its economy, as its real estate market rebounded, enterprise production and trade was prosperous and the country’s import-export activities reaped good results.

However, Vietnamese businesses, especially SMEs, are meeting with challenges in catching up with the integration process and expanding their markets abroad.

According to Nguyen Manh Tue, a representative from the HCM City Department of Industry and Trade, the municipal authorities have conducted a wide range of activities to assist local businesses to access capital sources, such as organising dialogues between firms and management agencies and connecting enterprises with banks in the locality.

During the last three years, thanks to linking activities, businesses in the city signed loan contracts worth 120 trillion VND (5.5 billion USD) with local banks.

Chinese firms interested in purchasing bulk Vietnamese farm produce

The China Business Association in Ho Chi Minh City has expressed its interest in being a bridge for home firms to import farm produce in bulk from the Mekong Delta city of Can Tho, its President Miao Ren Lai told Can Tho authorities in a working session on June 17.

China consumes a major volume of farm produce from Vietnam and the Mekong Delta in particular, especially fruit. However, most transactions are made cross-border putting Vietnamese farmers at risk, including price loss and contract violations.

For the Chinese side, imported farm produce through cross-border channels have failed to meet Global GAP or origin certifications, leading to hesitant consumers.

To address the problem, Miao urged municipal authorities to facilitate Chinese investment in the locality, making it easier for the two sides to sign high-value trade contracts via formal channels.

Chairman of the municipal People’s Committee Le Hung Dung said there are only three Chinese businesses operating in Can Tho, a modest figure compared to bilateral economic potentials.

Besides farm produce, he also proposed cooperation in garment and transport infrastructure.

Can Tho is building three hi-tech agriculture complexes in Co Do and Thoi Lai districts at a total cost of 44.1 million USD, he added.

Vietnam’s tuna exports to Russia see 218.4% growth in four months

Vietnam’s tuna exports to Russia boasted strong growth in the first four months of 2015 as export value reached US$1.65 million, up 218.4% year-on-year, according to the General Department of Vietnam Customs.

Frozen tuna loins (HS0304) remained the most exported product with a value of US$1.58 million, accounting for 95% of the total turnover.

Vietnam also began exporting fresh chilled tuna to Russia this year achieving a four-month export value of US$66,700

From a small import market in 2014, Russia has become the ninth largest importer of Vietnamese tuna in early 2015.

The free trade agreement (FTA) signed with the Eurasian Economic Union on May 29, with an import tariff pledge of 0% for all imported seafood items, will open up numerous opportunities for Vietnamese seafood to enter this market, including Russia.

Besides Russia, Vietnam also saw growth in its tuna exports to the US (US$58.2 million, up 3.3%), ASEAN (US$10.06 million, up 13.8%) and Mexico (US$3 million, up 91.7%).

As shown in statistics from the International Trade Centre, Vietnam was the third largest tuna exporter to Russia in the first quarter of 2015, behind Thailand and China.

Jobs to be provided as new plant erected in Hau Giang

An apparel-making plant, whose construction began in the Mekong Delta province of Hau Giang on June 17, is expected to create 4,000 jobs for locals once it becomes operational.

Nha Be, a major player of the Vietnamese textile and garment industry and the plant’s owner, revealed the news, adding that this is one of the company’s key projects to enhance its competitiveness.

The plant, built at cost of more than 300 billion VND (13.8 million USD), covers six hectares in Vi Thanh City.

It is designed to turn out 30 million high-quality garments annually catering to domestic and international markets, particularly the US and European countries, with estimated revenue of over 120 million USD each year.

The plant will go into operation in September.

Int’l exhibition on fertiliser, pesticides to be held in HCM City

A variety of fertilizer brands and plant protection products will be showcased in Ho Chi Minh City, the organising board said on June 17.

The two-day Agro Vietnam 2015, which opens on July 16, is expected to see the attendance of more than 60 exhibitors and 2,500 visitors.

The event is co-organized by the Minh Vi Exhibition and Advertisement Services Company (VEAS), the China Crop Protection Industry Association (CCPIA) and the China National Centre for Information on Chemical Substances.

It is expected to serve as a bridge connecting domestic and international enterprises investing in the fertiliser and pesticides sector in the Vietnamese market.

Nguyen Xuan Hong, Director of the Department of Plant Protection under the Ministry of Agricultural and Rural Development (MARD) highlighted the demand for pesticides in Vietnam’s agricultural production.

He urged enterprises to invest in chemicals to make ripen fruits and preserve agricultural products.

Meanwhile, Tran Xuan Dinh, Deputy Director of the Department, said incentives will be offered to fertiliser importers to meet domestic demand.

A number of workshops will be held during the event to provide information on relevant regulations of the sector to potential investors.

According to the MARD, Vietnam has a demand of some 11 million tonnes of fertilisers for agricultural production.

In 2014, the country imported about 4 billion tonnes of fertiliser, worth 1.3 billion USD.

BIDC revenue climbs 27%

The revenue for the Bank for Investment and Development of Cambodia (BIDC) for the five months leading up to June climbed 27% on-year, according to Nguyen Dinh Duong, the bank’s general director.

BIDC, a wholly owned subsidiary of BIDV, managed to achieve pre-tax profits of US$5 million for the January-May period with its total assets climbing to US$670 million as of May 31, Duong said.

Much of the banks success can be attributable to the company’s commitment to community development and its support of social welfare programs to help the Cambodian people improve their living conditions.

Popular consumer goods see Q1 growth

Sales of fast-moving consumer goods (FMCG) grew 3.4 percent in volume and 4 per cent in value in the first quarter of the year compared to the same period last year in six key Vietnamese cities.

The growth was seen in Ha Noi, HCM City, Hai Phong, Can Tho, Nha Trang and Da Nang, according to the latest report from marketing research company Nielsen.

Beverages were the key category driving the growth recovery, but categories such as food and home care also showed signs of recovery in first quarter.

However, retailers interviewed by Nielsen remain cautious about the future, despite recorded growth.

The report also found that more than 80 per cent of FMCG sales in Viet Nam still come from traditional trade channels which include around 1.3 million FMCG stores across the country.

Only 30 per cent of the traditional stores contribute to the top 80 per cent category sales.

Therefore, to win in this traditional-trade dominated market, manufacturers must identify the right stores to target; not an easy feat in such a large, dynamic and ever-changing retail market, according to Nielsen.

In addition to the complexity and number of traditional stores, the power to make or break a brand or product lies with traditional retail store owners.

Just 70 cent of traditional retail stores comply with manufacturers request to stock their products.

Of the brands most supported by Vietnamese retailers, Hao Hao, Vinamilk & Coca-Cola are the top three supported brands by retailers, with more than half of store owners indicating they will stock these products more, and recommend the products to shoppers.

Nguyen Huong Quynh, executive director of Retail Measurement Services of Nielsen Viet Nam, said that "despite growth of FMCG, our own Retailer Confidence Index was only 71, which shows that retailers are still hesitant. Therefore, to win retailers' hearts is not easy at all."

"Retailers are mainly concerned about what directly impacted their business, such as extra stock, margin, and customer services support," he said. "It's critical therefore for manufacturers to completely understand those concerns, identify the right stores to target and ensure that retailer comply and stock their products in-store throughout the year. "

"This requires a combination of different strategies based on retailer and shopper understanding, to build a picture of success for sales to execute in the market," she said.

Faced with the challenge of winning retailers' hearts and loyalty, Nielsen suggests that manufacturers should focus on identifying the target stores and executing in-store (pricing, assortment, trade activity, in-store communication).

Vinatea IPO to reserve 64% for strategic investors, 4.4% for staff

State utility Viet Nam National Tea Corporation will launch an initial public offering (IPO) within three months under an equitisation plan newly adopted by Prime Minister Nguyen Tan Dung.

The company, also known as Vinatea, has a charter capital of VND370 billion (US$17.62 million) and will issue 37 million shares for the IPO. Each share has a face value of VND10,000 (US$0.48).

A stake of 63.74 per cent will be reserved for strategic shareholders, while more than 31.86 per cent of the equity will be sold to general investors, and nearly 4.40 per cent to employees. This will mean that the State will retain no capital in the company.

The Prime Minister has authorised the Ministry of Agriculture and Rural Development to select a stock exchange and a brokerage and set an initial price for the share auction, as well as guide the company to implement the bid.

He also asked this agency to collaborate with the ministries of Finance and Labour – Invalids and Social Affairs to review the company's staff arrangement schemes. The firm currently has some 1,320 employees and will curtail this number to 1,180 when it is privatised.

Vinatea will also issue additional shares to increase its charter capital in the future, according to the equitisation plan.

The Ha Noi-based firm has three subsidiaries: two affiliates in the northern Yen Bai Province and a business in Moscow, Russia.

Vietcombank to pay ten per-cent dividend

According to the Viet Nam Securities Depository, JSC Bank for Foreign Trade of Viet Nam (Vietcombank or VCB) will pay the ten-per-cent dividend for last year on July 30.

VCB decided to pay its dividend for last year in cash, which is VND2.66 trillion (US$123.4 million), equal to 45.35 per cent of last year's after-tax profit of VND5.87 trillion.

After deducting the dividend and increases to its budget, VCB has VND374 billion ($17.3 million) in unreserved capital. The State Bank of Viet Nam (SBV) owns 77.11 per cent of Vietcombank's stakes, which means the SBV will receive VND2.05 trillion ($95 million) in dividends.

This year, VCB plans to make VND9.5 trillion ($440 million) in after-tax profits and pay a ten-per-cent dividend.

HAI to offer 117m shares at VND10,000 per share

HAI Agrochem Joint Stock Company (HAI) plans to organise an unsual shareholders meeting to issue 117 million shares at a low price of VND10,000 per share.

HAI will issue these shares after the company completes raising capital from its equity.

The company will issue 117 million shares at a ratio of 1:1 or a ratio that is determined by the shareholders to make sure the number of issued shares does not exceed 117 million.

The shares will be issued in two phases. In the first phase, HAI will offer 67 million shares to the company's shareholders at a likely ratio of 7:4.

In the second phase, 50 million shares could be issued at a predicted ratio of 11:3.

After the issuance, HAI's chartered capital is expected to jump from VND1.32 trillion (US$61.4 million) to VND2.34 trillion ($108.6 million).

AMD moves to list on HOSE

AMD Investment Group Joint Stock Company (AMD) officially moved to the HCM City Stock Exchange (HOSE) from the Unlisted Public Company Market (UPCOM) on Tuesday.

AMD was originally a consultancy corporation dealing in investment and business administration. Over the years AMD expanded to other sectors such as high-tech, education, commerce and services.

The company also invested in five subsidiaries and two associate companies which have strong and stable positions on the market.

Last year, AMD Group recorded VND477 billion (US$22 million) in total revenue, outstripping last year's plan by 154 per cent.

This year, the company targets a total revenue of VND1 trillion ($46.3 million) and a profit of VND34 billion ($1.57 million), an increase of 52.3 and 47.5 per cent, respectively, over last year.

Nguyen Tien Duc, Director General of AMD Group, said that the company had plans to invest in a complex to develop high technologies and high-quality human resources; connect scientists to the market; and connect technology firms to consumers.

Thermal power plant boiler to be set up

Electricity of Viet Nam and Doosan Viet Nam Heavy Industries have completed installing a heavy girder of the first boiler unit of the Vinh Tn 4 Thermal Power Plant.

Electricity of Viet Nam and Doosan Viet Nam Heavy Industries have completed installing a heavy girder of the first boiler unit of the Vinh Tn 4 Thermal Power Plant. Photo kinhtenongthon

It is a key section of the power plant in the coastal south-central Binh Thuan Province, for speeding up construction to make the first unit operational in 2017, and the second unit in 2018.

The thermal power plant, which is one of the key projects of the government with EVN as an investor, has two units with a total capacity of 1,200 megawatt (MW), annually producing more than seven billion kilowatts per hour (KWh).

According to the plan, the plant will be connected to the national electricity network in 2018.

The Vinh Tan 4 plant located in Tuy Phong district, 300km east of HCM City, has a total investment capital of US$1.4 billion from a consortium of with the Japanese Mitsubishi Corporation, Power Electricity Construction Company No 2 (PECC2) and Pacific Corporation.

This is the first large-scale coal-fired power plant in Viet Nam that will use supercritical steam parameters.

Deputy PM: SOE equitization will depend on stock market

Deputy Prime Minister Nguyen Xuan Phuc said the Government is determined to finish equitization of 289 State-owned enterprises (SOEs) this year but stressed that the equitization pace will depend on the performance of the local stock market.

Phuc made the point at an ask-and-answer session of the National Assembly (NA) in Hanoi over the weekend.

The Government targeted to equitize 432 SOEs in the 2014-2015 period but 289 of them have yet to go public though 2015 has only six months to go.

The Government was striving to realize the target, Phuc said in reply to a query posed by NA deputy Tran Du Lich, who is also an economic expert, at the session.

However, Phuc noted that equitization of the SOEs would depend on the local stock market.

Phuc said it would be easy to sell shares of SOEs to institutional investors, State Capital Investment Corporation (SCIC) and their employees but selling stakes to make SOEs become public companies should follow the market rule and depend on its performance.

Phuc said the Government will not equitize SOEs at any cost and have to prevent State asset losses during the equitization process.  

Vietnam’s stock market is still small in terms of capitalization while the total value of SOEs planned for equitization in the next three years is estimated at US$25 billion.

At the Vietnam Business Forum in Hanoi last week, the Capital Market Working Group said the local stock market has gone retrograde compared to the stock exchanges in other ASEAN countries.

A study of the working group showed that Vietnam had a population of 91 million people but its stock market’s capitalization is just around US$46 billion, equivalent to only 25% of the country’s gross domestic product (GDP).

Meanwhile, the stock market in the Philippines with 99 million people is put at US$184 billion, four times higher than that of Vietnam and accounting for 65% of Philippine GDP.

The stock markets in Thailand with a 69 million population, Malaysia with 30 million, Singapore with five million and Indonesia with 251 million have total capitalization of about US$418 billion (112% of GDP), US$287 billion (88% of GDP), US$415 billion (135% of GDP), and US$397 billion (45% of GDP) respectively.

Nguyen Kien of the working group said Vietnam’s stock market has not been strong enough to facilitate the equitization of SOEs.

The total value of SOEs to undergo equitization in the next three years is estimated at US$25 billion. If the Government plans to sell 15% of their total shares on the local stock market, US$3.75 billion will be needed to buy these shares, according to the group.

Therefore, domestic capital sources will not be enough and Vietnam will need foreign capital to buy stakes in SOEs.  

However, the group noted that only US$118.3 million had flowed into Vietnam’s stock market between January 1 and May 19 this year.

The working group proposed putting SOE equitization on fast track and increasing foreign ownership at Vietnamese enterprises to fuel development of the local stock market.

Vietnam fails in Philippine rice tender

The National Food Authority (NFA) of the Philippines has turned down the bids of Vietnam, Thailand and Cambodia for supplying 100,000 tons of rice, saying they are higher than the price sought by the agency.

The information was confirmed by the director of a major rice exporting firm in the Mekong Delta, who asked not to be named, after the rice bidding ended on June 16.

He told the Daily that Vietnam was unable to win the contract to supply 100,000 tons of 25% broken rice to the Philippines though its bid was lower than those of Thailand and Cambodia but still higher than expected by the NFA.

Vietnam offered a US$417 per ton bid while Thailand and Cambodia offered US$418 and US$464 respectively.

The NFA opened the latest tender to increase rice stocks after it had picked Vietnam to supply 150,000 tons of 25% broken long-grain white rice for delivery between July and August at a tender earlier this month. Vietnam won this contract after cutting its bid to US$410.12 a ton as suggested by the authority.

The Philippines has imported a total of 650,000 tons of rice under government-to-government contracts this year to replenish stocks in the lean season from July to September and prevent commercial price hikes. The volume includes 450,000 supplied by Vietnam and 200,000 by Thailand.

HCM City, RoK bolster economic, cultural cooperation

On June 18, Ho Chi Minh City People’s Committee Vice Chairman Nguyen Huu Tin worked with Korean Consul General in Ho Chi Minh City Park Noh Wan on specific cooperation measures aimed at further stepping up economic cooperation and cultural exchanges between Ho Chi Minh City with Korean localities.

At the meeting, Nguyen Huu Tin informed his host about the results of cooperation between Ho Chi Minh City and the Korean city of Busan over recent years, and the recent signing of a cooperation agreement with Daegu City.

Both sides underscored the need for regular meetings to review bilateral cooperation and alleviate difficulties so as to speed up the implementation of signed agreements.

The municipal People's Committee has directed city leaders to consider and deal with requirements and recommendations made by Korean businesses, Huu tin said, adding that HCMC will facilitate Korean investments in Ho Chi Minh City.

“Municipal leaders have always paid heed to protecting the legitimate interests of the people from the Republic of Korea (RoK) as well as other countries in accordance with the law. Along with the investment by Korean businesses, as many as 70,000-80,000 Koreans are living in Ho Chi Minh City.”, Huu Tin told his host.

Wan Park Noh said the HCM City- RoK cooperation has been elevated to a higher level, noting that with the strength of the support industries, his nation is willing to share development experience with Ho Chi Minh City. Currently, many small and medium sized Korean enterprises in this field are keen to seek investment opportunities in Ho Chi Minh City.

He expressed his hope that HCM City would continue creating the best possible conditions for Korean businesses’ investment process and support Korean citizens living in the city.

Regarding the Metro Line No 5 construction project in Ho Chi Minh City, Park Noh Wan said leaders from Korean ministries and agencies are set to work with the Vietnam Ministry of Planning and Investment later this month to discuss this project.

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