Belgium finances green growth in Vietnam

Vietnam and Belgium have signed an agreement for a six-year project to build a "Green Growth Strategy Facility" worth 5.5 million EUR (7.3 million USD).

The facility will promote green initiatives including energy efficiency, transferring clean technology and managing waste and waste water.

Under the agreement, a fund for green growth initiatives will be set up with the Belgium "seed" money, then the Ministry of Planning and Investment will be responsible for developing the fund by attracting local and international donations.-

FLC buy-out hastens Hanoi’s Alaska Garden City

FLC Group has purchased  Alaska Garden City Urban project on the western outskirts of Hanoi. The project is expected to start construction by the end of 2013.

Doan Van Phuong, general director of Group, confirmed to VIR last week that Alaska Land, the developer of Alaska Garden City urban area project, sold 99 per cent of its stake, worth VND300 billion ($14.3 million) to the FLC Group. Phuong said that the group planned to kick off the project in the fourth quarter and expected to put into operation the VND3.5 trillion ($166.7 million) project covering on an area of 8 hectares in Dai Mo commune, Tu Liem district in 2017.

According to Phuong, the acquisition of the project would create a huge commercial advantage for FLC due to the project’s ideal location on the western edge of the capital, which is undergoing rapid urbanisation with many large-scale projects such as the National Convention Centre, National Sports Centre, shopping centres, supermarkets like Big C and a JW Marriott five-star hotel.

Alaska Garden City will boast 300 villas, featuring a variety of housing options. The apartments are located from the sixth floor of a tower complex that will also include a shopping centre and offices. Besides the commercial houses, the project has lower cost social housing with a 29-storey tower block.

Founded in 2001, FLC’s first property project is FLC Landmark Tower in Le Duc Tho street, Tu Liem district.

Forex rates to remain stable

Vietnam’s dong-dollar exchange rate is to remain largely unchanged over the rest of the year as the country now boasts fruitful currency sources, say analysts.

Vietnam’s foreign currency reserves were reported to have risen to some $30 billion in the early part of this year, up by more than $10 billion on the same period last year.

By the end of 2013’s second quarter, foreign remittances going through Ho Chi Minh City’s banks had surged 3 per cent on-year, reaching $1.9 billion.

The World Bank’s assessment revealed that the country’s foreign currency reserves had doubled and lower inflation during the last two years had underpinned a stable dong during the period.

Economist Dinh The Hien assumed that with an annual inflation rate of 6-6.5 per cent, the pressure on the exchange rate would be insignificant.

“The exchange rate should remain on an even keel until the year’s end and the gap between official and parallel market exchange rates should close,” Hien predicted.

According to international analysts, the State Bank’s devaluation of the dong by 1 per cent against US dollars in late June did not reflect Vietnam’s foreign currency tension.

“From 2011, Vietnam’s exports always surpassed those of their neighbours and the country’s 16 per cent jump in export value in the year to date was quite impressive. Vietnam could have a $5 billion current account surplus this year, helping the dong to remain in a stable position in later part of 2013,” said a source at asset management firm Dragon Capital, who declined to be named.

Similarly, the dong-dollar exchange rate would be pegged at VND21,800 by the year-end, according to a recent HSBC forecast.

The average inter-bank dong-dollar exchange rate was set at VND21,036 on August 16.

“My stance from early 2013 is that the exchange rate hike will be below 3 per cent this year. The rate has risen by 1 per cent so far, so that from now until the year’s end it may increase by another 1 per cent at most. The State Bank is in a position to control the change,” said economist Tran Du Lich, member of the National Financial and Monetary Policy Council.

According to Korea Investment & Securities’ Emerging Markets Department director Yun Hang Jin, the upward pressure on the exchange rate would continue until the year-end, but growth would not exceed 1 per cent, entailing low profitability for foreign exchange investments.

“Foreign currency demand is highly unlikely to rise due to ample sources, and this has led to depreciation in the dollar,” said Jin.

Viettel seeks equal hi-tech incentives

Military-run telecom group Viettel is seeking government approval for incentives for its handset production like those enjoyed by foreign tech giants Samsung and Nokia.

The proposal calls for impartial treatment towards domestic and foreign businesses to spur Vietnam’s handset manufacturing industry.

According to a Viettel source, despite reaping initial outcomes from telecom equipment manufacture to feed the domestic market (like the launching of USB 3G V1000 or V6206 handsets), the group has still grappled with numerous hardships.

For instance, Viettel bore high tariffs when importing materials and components which could not be made in Vietnam.

“Most of components and devices for mobile manufacture in Vietnam must be imported with high import duties. This made local products more costly than similar whole-form imported items which are tax free,” said Viettel group’s general director Hoang Anh Xuan.

The import duty of handset batteries is set at 20 per cent, that of vibration motors 25 per cent and of micros at 15 per cent, for instance.

Tax differences between whole-form imported handsets and imported devices for domestic production have made it hard for Viettel products to compete with similar items in the home market in pricing terms, Viettel claimed.

That is one reason why, company officials said, Vietnam had imported around 17 million handsets last year, surpassing 70 per cent of market’s demand.

Apart from imported handsets, local handset manufacturers also found it less advantageous compared to foreign hi-tech firms on the same footing which are operating in the Vietnamese market.

Top global handset manufacturers South Korea’s Samsung and Finland’s Nokia built assembly facilities in Vietnam with committed investment capital reaching several billion US dollars.

With huge investments and the hi-tech factor, these firms have enjoyed generous investment incentives that local firms producing the same items were not given.

For instance, Samsung Vietnam Electronics has enjoyed bigger tax incentives is tax free when importing materials and accessories for handset manufacture in Vietnam in five years. The company even became an export processing zone business, enjoying bigger incentives, from September 2012.

In this context, Viettel asked the prime minister to entrust the Ministry of Finance for consideration of supportive policies to uphold fledging local mobile manufacture in the initial stage.

Viettel proposed import duty exemption in five years from 2013 to entire materials, accessories and auxiliaries import serving research, design, assembly and manufacture of handsets, irrespective of the fact they could be made in Vietnam or not.

The beneficiaries would be Viettel and its wholly-owned subsidiaries. Besides, distributors shall enjoy preferential 10 per cent corporate income tax for the income derived from selling handsets made or assembled by Viettel in the domestic market.

Viettel joint venture in Mozambique wins award

Movitel, a joint venture between Viet Nam's military-run telecom service provider Viettel and Mozambique's SPI and Invespar companies, has been named the African nation's leader in terms of competitive strength in mobile information.

The award was presented on Thursday by market analyst Frost and Sullivan in Cape Town, South Africa.

Frost and Sullivan experts said Movitel was wise in paying attention to low-income earners in Mozambique through a strategy of popularising telecommunications services.

It has expanded its network to bring services to all people through such programmes as providing free internet connection for schools and reducing fees for phone and internet users.-

HCM City, Vientiane beefs up telecoms partnership

HCM City will help the Lao capital of Vientiane to improve the capacity of its telecoms sector through professional sharing.

A memorandum of understanding on the job in hand was signed by the HCM City Department of Information and Communications and the Vientiane Department of Post and Telecommunications, during an ongoing visit by HCM City officials.

The Vice Chairman of HCM City People's Committee, Le Manh Ha, met on Tuesday with the Secretary of the Vientiane Party Committee, along with Mayor Soukan Mahalath.

Soukan Mahalath praised HCM City's support for Lao's capital city over the past few years, especially in the fields of telecommunications and personnel training.-

SeABank and MobiFone sign co-operative agreement

The Southeast Asia Commercial Joint Stock Bank (SeABank) and Viet Nam Mobile Telecoms Services (MobiFone) have signed a partnership agreement.

It aims to maximise the two sides' potential, enhance efficiency and increase benefits for both their employees and customers.

This agreement will open the way for closer cooperation, commitment and mutual development between both parties.

MobiFone, with many years of experience in the field of mobile communication services, will provide advice and support to SeABank, the staff and customers at SeABank when selecting products and services provided by Mobifone.-

FPT IS promotes electronic tax and customs service

FPT IS is offering free electronic tax and customs declaration services for the first 500 enterprises that register to use the FPT.CA digital signature service from August 12 to 25.

Customers with a one-year package will get the digital signature service for free for three months, as well as having FPT.eTax electronic tax declaration software for free for a year and FPT.eCustoms electronic customs declaration software for free for a year.

Customers with two-year packages will get six months of FPT.CA, and a year of both FPT.eTax and FPT.eCustoms at no extra charge. Customers with three-year packages will be rewarded one Nokia 206 or Samsung C3312 mobile phone, a USB token, nine months use of FPA.CA for free and a year's free use of FPT.eTax and FPT.eCustoms.

Mining, new products boost Masan Q2 profits

Private equity firm Masan (MSN) has announced second quarter profits thanks to the launch of popular new products and its chemical Nui Phao Project.

The group's net revenues surpassed VND2.7 trillion (US$127.3 million), up 8.4 per cent year-on-year, while gross profits reached VND1.1 trillion ($51.8 million), rising 7.1 per cent thanks to growth from its food processing subsidiary Masan Consumer.

Its operating EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was up 3.7 per cent at VND660 billion ($31.1 million).

Masan Consumer continued investing in building its brands, with significant focus on its instant coffee business. It introduced a new formula for its Wake Up Saigon brand and also launched Phinn, a 2-in-1 instant coffee.

It expects to see its instant noodle share surge 30 per cent by the end of this year.

In addition, the Nui Phao project has achieved several key milestones in the second quarter. It commenced production of tungsten and copper concentrate to international specifications, and achieved its first product sales.

More recently, Nui Phao has successfully produced sodium tungstate. Further off-take contracts for tungsten, bismuth and fluorspar are already in place.

However, the performance of one affiliate, Techcombank, was not as good as expected. The challenging economic environment impacted the bank's results, as deposits from customers grew 0.2 per cent while loans rose 2.2 per cent from December 2012 to June 2013.

Lower interest rates and the tougher lending environment resulted in the second quarter's net profit of VND194 billion ($9.1 million), down 57.6 per cent from the corresponding period last year.

Shares of the group, one of the largest blue chips on the HCM City Stock Exchange, shed 0.6 per cent to VND87,500.

Ha Noi stock exchange lists most transparent companies

The Ha Noi Stock Exchange (HNX) yesterday honoured the 30 best listed companies in terms of business transparency in an effort to evaluate corporate governance over the 2012-13 period.

This is the first time the exchange has attempted to assess the performance of its listed members and it intends to carry this out annually to identify businesses that deliver effective corporate governance.

This year's theme was "transparency in the disclosure of information", one of the five assessments that international organisations such as the Organisation for Economic Co-operation and Development (OECD), the International Finance Corporation and the World Bank strongly recommend.

In terms of methodology, the HNX used OECD recommendations on corporate governance to draw up the five criteria, including the rights of shareholders, equal treatment for shareholders, the roles stakeholders play, the disclosure of transparent information and the responsibilities shouldered by managing boards.

Out of these five, the disclosure of transparent information recorded the highest average score. The rights of shareholders and equal treatment for shareholders had the second highest score.

Business efficiency and the liquidity of stocks are closely related to the level of transparency and the ability to manage a listed company, said the HNX.

"Therefore, this year's theme will help businesses to improve their awareness of the importance of providing transparent information, which is a very important component of corporate governance," it stressed.

So far, the exchange has held several seminars on corporate governance, taken listed firms on overseas trips to learn from other businesses and set up a special information management system called the CIMS.

HNX's top 30 listed companies for transparency:

1. Asia Commercial Bank (ACB)

2. Bim Son Cement (BCC)

3. Bao Viet Securities (BVS)

4. Dabaco Group (DBC)

5. Ha Giang Mineral and Mechanics (HGM)

6. Hai Minh Corporation (HMH)

7. Kim Long Securities (KLS)

8. Kon Tum Sugar (KTS)

9. Lam Thao Fertilizers and Chemicals (LAS)

10. Lam Dong Pharmaceuticals (LDP)

11. Tien Phong Plastic (NTP)

12. Ocean Hospitality and Service (OCH)

13. Phuong Dong Petroleum Tourism (PDC)

14. PetroVietnam Southern Gas (PGS)

15. Petrolimex Petrochemical (PLC)

16. Portserco Company (PRC)

17. Post and Telecommunication Insurance (PTI)

18. Drilling Mud Corporation (PVC)

19. PVI Holding (PVI)

20. Petrovietnam Technical Services (PVS)

21. Safoco Foodstuff (SAF)

22. Song Da 6 Construction (SD6)

23. Phuong Nam Education Investment And Development (SED)

24. Sai Gon – Ha Noi Bank (SHB)

25. Saigon Plastic Packaging (SPP)

26. Tran Anh Digital World (TAG)

27. Power Engineering Consulting 4 (TV4)

28. Vietnam Construction and Import - Export (VCG)

29. Vicostone Company (VCS)

30. Vietnam Germany Steel Pipe (VGS)

Steady growth witnessed in VN - S Korea economic ties

South Korea has underlined its status as a key trade and investment partner of Viet Nam with 187 projects worth US$667 million in the first seven months of the year, according to the Ministry of Industry and Trade.

This made it the fourth largest investor in Viet Nam for the period, a Thoi Bao Kinh Te Viet Nam (Viet Nam Economic Times) report quoted the ministry as saying yesterday.

As of July, there were 3,385 South Korean investment projects worth $25.7 billion operating in the country.

The ministry said most of the major corporate groups from South Korea have established a presence in Viet Nam, including Samsung, LG, Hyundai and Kumho Asiana.

Some of these investors plan to expand their investments in the country, it said.

In terms of trade relations, South Korea is Viet Nam's sixth biggest export market.

Since 2007, when the free trade agreement between the two countries took effect, Viet Nam's export turnover to South Korea has increased by more than 100 per cent.

According to the Viet Nam General Department of Customs, Viet Nam exported more than $3 billion worth of goods to South Korea in the first half of this year, a year-on-year rise of over 25 per cent.

Many key exports saw high growth, including crude oil with $432 million, up by more than 150 per cent over the same period last year.

This was followed by computers, electronic products and spare parts with $149 million, up 128 per cent year-on-year.

Next came cassava and cassava products ($45 million, up by 67 per cent), garments ($545 million, up 42 per cent).

Other products like vegetable and fruits, timber, footwear, bags and pepper have also recorded high export growth rates.

Officials and businesses hope the trade between the two countries will further develop as consumption habits in South Korea has changed, creating chances for many Vietnamese products such as coffee.

Last year, South Korea imported $3 billion worth of coffee from 83 nations and territories in the world.

Seafood is also another product with high export potential to South Korea.

The Viet Nam Association of Seafood Exporter and Processors said shipments of tra fish to South Korea has surged steadily in recent years. In the first half of this year, about $3 million of tra fish was exported, up 32 per cent year-on-year.

Viet Nam is now ranked the third biggest seafood exporter in South Korea.

To increase seafood exports to South Korea, domestic firms should strengthen their focus on food safety and quality, experts say.

DIV deal guarantees security for deposits

Prime Minister Nguyen Tan Dung has signed a decision to set up the Deposit Insurance of Viet Nam (DIV) in a bid to provide security to depositors.

The decision will see the implementation of a deposit insurance policy to ensure the stability of Viet Nam's credit system and development of the banking sector.

DIV, a state non-profit financial institution, will have a charter capital of VND5 trillion (US$238 million) funded by the State Budget. DIV's activities will also be tax-exempt under the provisions.

DIV will provide development strategy for deposit insurance and provide submissions to the central bank and the Prime Minister for approval.

The company will also participate in management and disposal of assets and the recovery of insurance payable by institutions.

The PM also approved the charter and operation of DIV, which provides the chairman of the board of directors will act as the company's legal representative.

The board will have up to seven members, including a chairman appointed by the PM. Remaining members will be appointed by the Governor of the State Bank of Viet Nam.

Germany demands top goods

Vietnamese businesses must ensure the health and safety of their products as well as quality if they intend to penetrate the German market and expand throughout the country.

According to Viet Nam's trade counsellor in Germany, products imported into the country must meet European Union standards as well as the market's requirements on packaging being environmentally friendly and recyclable.

German consumers are extremely particularly keen about quality and the safety of food, said the trade counselling organisation.

With a population of 82 million and many high income earners, Germany is a very attractive market for exporters. German consumers are interested in products that are convenient and healthy, such as fruit juices, dried fruit, vegetables and confectionery products.

The counsellor said that taking part in trade fairs also helps Viet Nam's business community to look for opportunities.

Statistics showed that in the first six months of this year, bilateral trade between the two countries hit US$3.695 billion, representing an increase of 29.51 per cent year-on-year.

Of this, $2.352 billion came from Viet Nam's exports to Germany, rising 22.35 per cent and accounting for 18 per cent of Viet Nam's export turnover to the EU.

Computers and electronic products exports to Germany grow 130.3 per cent in the first half of this year, paper products up 85.32 per cent and mobile phones and components up 80.9 per cent over the same period last year.

Garments and textile products, coffee and footwear also experienced strong growth with rates of around 10 per cent.

Last year, bilateral trade was reported at $6.47 billion, an increase of 16.3 per cent over 2011.

The potential for trade between the two countries is expected to reach a much larger figure, however the trade counsellor added that exporters should carefully study tax policies, customs procedures and quotas.

H1 tax arrears surged 32 per cent due to economic hardship

Tax arrears in the first half of the year surged 32 per cent against the end of last year to VND64.63 trillion (US$3 billion), according to the General Department of Taxation.

The department said that the number was high compared with previous years, stressing the economic hardship and restricted inspections were behind the situation.

Some cities and provinces with high tax arrears were Central Highlands Dak Nong (up 152 per cent), southern An Giang (up 132 per cent), Binh Duong (up 116 per cent) and Ba Ria-Vung Tau (up 83 per cent).

Many cities and provinces failed to meet the tax collection plans, of which 22 posted a very low ratio of below 45 per cent.

Due to the economic hardship, many automobile manufacturers asked the Government for tax payment extensions totalling trillions of dong in the first half of the year.

Truong Hai, for example, asked for VND1.2 trillion ($55.81 million) of tax arrear extensions, saying that it owed banks of roughly VND6.5 trillion and had products worth roughly VND3.3 trillion ($153.48 million) unsold.

The department also attributed the low tax collection to the rising number of tax frauds. Tax agencies in H1 met only 25 per cent of the inspection plans set for this year.

During the period, tax agencies conducted examinations and inspections in 18,198 companies, up 6.1 per cent year-on-year and the tax collection increase via examinations and inspections reached nearly VND3.18 trillion ($147.9 million).

To deal with the tax frauds, the department said that it would set up steering committees in several cities and provinces to enhance the supervision and inspection to fight the frauds.

Bank card count reached 60.15m by end of June: SBV

The number of bank cards issued in Viet Nam rose to 60.15 million as of the end of the second quarter this year, up 10.8 per cent against late last year, the State Bank of Viet Nam (SBV)'s Payment and Settlement Department has reported.

The department said that roughly 3.05 million new cards were issued in Q2 alone, up compared with the first quarter when 2.81 million new cards were issued.

Total trading volume via cards in Q2 reached VND27.89 trillion (US$1.297 billion) with 6.57 million transactions, up 17 and 60 per cent against the same period last year.

Of the total, there were 54.89 million domestic cards, accounting for 91.25 per cent of the plastic used in the country.

They included 55.75 million debit cards, 2.09 million credit cards and nearly 2.31 million prepaid cards.

At the end of June, the country had 14,410 ATMs and over 111,000 points of sale. However, millions of bank accounts are mainly used to withdraw cash rather than make payments via cards and banking facilities.

This is due to the fact that most businesses do not encourage the use of cards for payment.

In many supermarkets and shopping centres, customers who use cards for payment are not entitled to discounts and other sales promotions, so they often withdraw cash from ATMs before a trip to the market.

To accelerate non-cash payments, experts emphasised the important role of relevant ministries and agencies. For example, the Ministry of Industry and Trade regulates that all shopping centres and restaurants should have the facility to accept payment via bank cards, and the Ministry of Finance should issue a tax reduction policy to encourage their use.

The central bank is also drafting a decree under which individuals will not be allowed to pay for securities, houses, land and vehicles including cars and motorcycles using cash.

Organisations will not be permitted to use cash for transactions in real estate, securities, aircraft, ships or cars, regardless of the value. There will also be a limit on the amount that individuals and organisations can be paid in cash.

Regulation hampers import firms

Deputy PM Hoang Trung Hai asked relevant agencies to tighten the management of temporary imports for re-export to prevent smuggling and trade fraud at a conference yesterday.

The conference was held in the northern province of Quang Ninh to review the one year implementation of Directive 23/CT-TTg on the State management of temporary imports after it was put into practice.

According to the Ministry of Industry and Trade, shortcomings still remained.

The ministry cited complaints from many enterprises that said the duration of temporarily-imported products for re-export were allowed in the country was too short, just only 45 days.

This short duration posed risks because when customers delayed orders past the 45 days permitted, the goods were confiscated, the ministry said.

Deputy Director of the General Department of Customs Vu Ngoc Anh also said that it was not easy to return temporarily-imported products which were stuck in Viet Nam to their country of origin.

According to Hai, policies should be flexible and create advantageous condition for temporary imports for re-export which was a common international trade practice, while measures to prevent smuggling and trade fraud must be enforced.

He said that an extension to the permitted duration should be considered, but transferring or splitting containers into smaller units would still be banned.

Enterprises which violated the rules should have their licences permanently revoked, Hai said, urging customs departments to enhance supervision.

Construction begins on major Chu Lai seaport

Work started on an international seaport and industrial park in the Chu Lai Open Economic Zone (EZ) on Saturday, the same day the zone received a Labour Order from the State.

The new seaport and industrial park will be located on an area of 350ha with investment capital of US$400 million from Tan Hiep Phat Group.

The project is a major addition to the expansion of the Chu Lai Open Economic Zone, which was developed from a white sand area 10 years ago.

The zone houses a total of 90 investment projects with combined registered capital of $3.1 billion, comprising of five industrial parks, a tourism site and an urban precinct with a total area of 25,500ha.

At a ceremony to present the Third Class Labour Order on Saturday, Deputy Prime Minister Nguyen Xuan Phuc said he highly appreciated the efforts made by the Chu Lai Zone's management board after 10 years of construction and operation.

The development has seen rapid expansion of infrastructure, industry and services and the attraction of major investments, he stressed.

Phuc, however, said the zone has not yet exploited its full potential. He pointed out that the EZ has yet to built up appropriate institutions, hi-tech facilities and high quality services that would make it more competitive with other economic zones across the country and abroad.

He also called on provincial leaders and the zone's management board to ensure infrastructure, sustainable planning and quick procedures for future investors.

He said the EZ should focus on human resources training for local workers to meet the labour demands of investors.

The vice chairman of the provincial People's Committee and head of the Chu Lai EZ management board, Huynh Khanh Toan, said the zone's industrial production value topped VND7 trillion ($333 million) during the 2006-10 period, but average annual production had fallen and was at VND1.9 trillion ($90.4 million) last year.

"We have targeted automobile manufacturing as a core industry as well as boosting the development of support industries and the hi-tech, electronics and energy sectors," Toan said.

"We hope to contribute VND6 trillion ($286 million) to the State budget in 2020, creating 160,000 jobs and earning $340 million from exports."

Toan said the zone's Ky Ha and Tam Hiep ports have been upgraded to allow access to 20,000 DWT (deadweight tonnage) ships.

The central province has also cleared 2,000ha to lure investors and develop Chu Lai Airport into an international cargo terminal.

Chu Lai EZ has been included as one of five coastal economic zones across the country to receive support from the State budget during the 2013-15 period, with VND790 billion ($38 million) set aside for the zone for the period.

The Labour Order was presented to the zone on the occasion of the 10th anniversary of central Quang Nam Province.

US continues anti-dumping investigations into Vietnamese steel

The US International Trade Commission (ITC) has used an August 16 vote to confirm its resolve regarding ongoing anti-dumping duty investigations into Certain Oil Country Tubular Goods imported from Vietnam.

The ITC said that the US steel sector has been damaged by imported Vietnamese steel pipes, prompting the lodging of the initial anti-dumping lawsuit.

Following US Government procedure, the Department of Commerce (DOC) will now continue with preliminary investigations into Certain Oil Country Tubular Goods imported from Vietnam.

The preliminary anti-subsidy duty rate will be unveiled on September 13 with the preliminary anti-dumping duties following later on December 9.

Eight nations—the Republic of Korea, India, Taiwan (China), Turkey, and Ukraine—are facing similar investigations.

Dao Tran Nhan, head of Vietnam’s trade office in the US, said the investigations are themselves anti-competitive and protectionist.

The office noted the majority of Vietnamese Certain Oil Country Tubular Goods are produced by joint ventures or foreign-invested companies.

The DOC launched its largest ever anti-dumping investigation into Asian steel pipes on July 23.

Vietnam’s US trade office said the DOC slashed its preliminary 103.43–111.47 percent anti-dumping duty imposed on Vietnamese steel pipes during the investigation.

Boosting exports to GCC region

The Cooperation Council for the Arab States of the Gulf, also known as the Gulf Cooperation Council (GCC) region, is a market rich in potential for Vietnam’s farm produce, consumer goods, and processed & industrial products.

The GCC is a political and economic alliance comprises of its six member nations Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman.

According to the Ministry of Industry and Trade’s (MoIT) African and Western and Southern Asia Market Department, the country’s trade exchanges with GCC states surged over 2003–2012, rising from approximately US$392 million in 2003 to US$4.87 billion last year.

Vietnam’s exports have increased 28.1 times from their original 2003 level of US$95.6 million to US$2.69 billion in 2012. Imports also boomed, up from US$269.8 million to US$2.18 billion (a 7.3-fold increase) in the reviewed period.

The years following 2008 were even more impressive, with Vietnam’s GCC exports raking in US$546 million in 2008, US$523 million in 2009, US$704 million in 2010, US$1.25 billion in 2011, and 2012’s record high.

Farm produce is one of  Vietnam's key exports to the GCC region

Vietnam’s GCC imports slid back from 2011’s US$2.249 billion to US$2.183 billion in  2012.

The African and Western and Southern Asia Market Department says improved quality and diversity have ensured Vietnamese goods are quickly becoming favourites with GCC consumers.

Vietnam’s 2012 export commodities included lucrative products such as mobile phones, computers, electronics and components, seafood, and pepper.

A recent MoIT survey revealed GCC markets have reliable annual demands for these goods as well as other commodities like garments and textiles, footwear, timber furniture, agricultural products, building materials, and fine art handicrafts.

The GCC region’s own economic advantages range from its population of 48 million to its abundance of oil, gas, iron ore, copper, gold, and aluminium. It is often considered the world’s oil well, with six of its members accounting for up to 40 percent of global petroleum reserves, 25 percent of gas reserves, 19 percent of total petroleum output, and more than 25 percent of traded petroleum and refined petroleum products.

Saudi Arabiai is the world’s leading petroleum exporter, a title claimed by fellow member Qatar for liquefied natural gas.

The GCC region’s GDP is higher than average thanks to those resources. Per capita income in GCC states averages more than US$30,000. In some member states, like Qatar, that average climbs as high as US$106,000. The region as a whole boasts very high purchasing power.

In the first half of this year, Vietnam’s exports to Saudi Arab hit US$176.6 million, to Kuwait US$15.7 million, and to the United Arab Emirates US$1.968 billion.

The African and Western and Southern Asia Market Department is urging businesses to expand their research into the promising market, participate in exhibitions and fairs, and dispatch business delegations to promote trade with their GCC counterparts.

Vietnamese businesses should be careful to verify their partners’ details before conducting any transactions or signing contracts, devise viable pricing strategies, and make an effort to respect the business culture of the majority Muslim region.

Stagnant markets

Local producers have been forced to bring steel prices down with the domestic market remaining stagnant and Chinese steel selling at much lower prices.

Nguyen Tien Nghi, Deputy Chairman of the Viet Nam Steel Association, said the local steel market has been stagnant since last year, impacted by the real estate market situation and the slowdown of construction projects across the country.

Steel prices reached their peak at VND20 million ($945.6) per tonne three years ago before going down to VND17 to VND18 million per tonne last year and VND14 to VND14.5 million ($685.5 million) per tonne in August 2013.

The lower prices, however, have not boosted sales. Steel consumption in the local market this year is estimated at 300,000 tonnes per month compared to 400,000 tonnes per month in 2012.

As a result, inventories have risen to nearly 350,000 tonnes of steel and 450,000 tonnes of steel billet.

Local businesses say they are facing unfair competition from Chinese products that are selling at VND1 million ($47.6) per tonne lower than domestically produced steel.

Many local firms have had to cut production by 50 per cent while others are facing closure.

To make things worse, the recent electricity price hike has forced them to push their prices further up, making their products even less competitive.

In the first seven months of 2013, Viet Nam imported over 1.2 million tonnes of steel alloy, which contains boron and enjoys 0 per cent preferential tax (compared with 5 per cent tax for other kinds of steel).

According to the VSA, boron accounts for just 0.0008 per cent of the steel alloy, which is allowed to be used in construction projects.

Traders believe that steel alloy imported from China has a 10 to 14 per cent market share. In addition to zero per cent tax in Viet Nam, Chinese firms enjoy tax refunds of nine per cent on their exports of this steel product.

Safety net

The Viet Nam Food Association (VFA) has said it will introduce a new contract to prevent cancellations of rice export deals, something that has happened far too frequently in recent months.

According to Pham Van Bay, Deputy Chairman of VFA, both sellers (local firms) and buyers (foreign companies) have cancelled rice export contracts, but buyers have far outnumbered sellers.

Bay said the new VFA contract would give sellers legal grounds for taking buyers to court if it is breached unilaterally.

Most of the contracts that have been cancelled so far are commercial contracts signed by two companies, which are different from government-to-government contracts, said Bay.

Cancellation of rice export contracts on the sellers' side was often done by private companies that have not been allocated a quota to purchase rice for temporary storage or firms that have the quotas but are unable to access bank loans due to poor business performance and losses, Nguyen Tho Tri, deputy general director of the Viet Nam Southern Food Corporation (Vinafood2), told the Thoi Bao Kinh Te Sai Gon (Saigon Economic Times) newspaper.

However, most of the cases so far are a result of contracts signed when prices were low with a dense delivery schedule, creating high demand and pushing up domestic prices. In this situation, if exporters continued to buy rice to fulfill their contracts, they would suffer losses.

According to the association, in the first seven months, contract cancellations affected the export of nearly one million tonnes of rice, or about one-fourth of more than four million tonnes worth $1.8 billion that were shipped.

In July alone, local firms cancelled contracts for export of 180,000 tonnes of rice.

Local firms win famous ASEAN trademark award

Hundreds of Vietnamese and Lao businesses were honoured at an August 17 ceremony in Vientiane in recognition of their ASEAN famous trademark.

Among Vietnamese awardees included the Bank for Investment and Development of Vietnam (BIDV), the Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank), Tran Phu Electric Mechanical Joint Stock Company (Trafuco), Oil and Gas Service Joint Stock Company, Tan Hiep Phat Group, and Thien Long Company.

These businesses’ brand names have been recognized widely in both domestic and regional markets.

The “famous ASEAN trademark” award aims to honour the community of outstanding Southeast Asian businesses, entrepreneurs, organizations and individuals for their great contributions to promoting the regional grouping’s prosperity, socio-economic development and culture.

Can Tho sets record in FDI attraction

Two foreign businesses have been licensed to increase investment capital by nearly US$3.3 million in Can Tho, bringing the total registered capital from 57 FDI projects in the Mekong Delta province to a record high of US$879 million.

The figures were released by Le Duong Cam Thuy, Deputy Director of the Can Tho provincial Planning and Investment Department.

Can Tho has boosted administrative reform and offered many incentives for foreign investors, such as lower tax rates, shorter licensing period, extended land use duration.

The province has established a trade promotion centre to provide businesses with updated information and create a closer link among local firms and relevant agencies.

Geater attention has been given to developing support industry, upgrading infrastructure facilities, providing enough human resources, and improving investment attraction.

The province has also increased cooperation with other Mekong Delta provinces to strengthen connectivity with large economic hubs in the southern region such as Dong Nai and Ho Chi Minh City to lure more FDI projects.

In addition, site clearance projects are underway to facilitate industrial parks (IPs)’ operations.

As planned, the province will expand four IPs-- Hau River, Thot Not, Hung Phu II, and Tra Noc II along with building drainage and sewerage system, waste treatment plants and dealing with environmental pollution in a number of IPs.

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