AmCham forecasts Vietnam - US two-way trade at US$34.9 billion in 2014

The American Chamber of Commerce in Vietnam (AmCham) has raised its forecast of Vietnam - US two-way trade revenue to US$34.9 billion in 2014 in its latest report released on October 27.

The report, which provides an update of the Vietnam - US trade status by August 2014 and provides a forecast on two-way trade revenue up to 2020, seemed optimistic to increase its forecast for Vietnam's export revenue to the US.

AmCham elevated the two-way trade revenue between Vietnam and the US to US$34.9 billion including US$29.4 billion from Vietnam's exports to the US. Earlier in July 2014, AmCham predicted a two-way trade of US$33.6 billion with Vietnam's exports to the US reaching US$28.1 billion.

It also expected that Vietnam will lift its market share in the US to 22% in 2014 instead of 16.5% in 2013 to become the top ASEAN exporter to the US, surpassing Malaysia and Thailand.

In addition, AmCham estimated that Vietnam's trade surplus to the US will reach US$23.9 billion in 2014, US$1.2 billion higher than the previous forecast.

The commerce chamber also said that Vietnam's garment export value will rise to US$9.8 billion instead of US$9.7 billion for the entire 2014.

Value-added services crucial to VN telecom

Developing value-added services is a must for telecom service providers to survive, as voice mail and SMS are no longer reeling in high profits, Le Nam Thang, deputy minister of the Information and Telecommunications, said at a seminar held yesterday in HCM City .

"Vietnamese telecom service providers must focus on value-added services. It is an international trend thanks to significant development of technology and domination of over-the-top content (OTT)," he said.

The seminar on value-added services development was organised by the Viet Nam Mobile Telecom Services (MobiFone).

With more than 40 million mobile telephone subscribers, and a market share of 30 per cent, MoiFone saw the turnover proportion of 61 value-added services increase from 17.1 per cent in 2008 to more than 33 per cent in September.

"Within the next two years, we would like to co-operate with value-added services providers in mobile applications, mobile e-commerce, mobile advertising, mobile entertainment, machine-to-machine (M2M) and enterprises solution," Mai Van Binh, chairman of MobiFone, said.

One-third of the e-commerce transactions in the US were carried out on mobile devices.

Mobile advertising worldwide has nearly doubled, from $10 billion in 2012 up to $19 billion in 2013.

Viet Nam's young population, with 40 per cent under 24 years old, has contributed to the development of e-commerce in the country.

Of the more than 130 million mobile subscribers in the country, 27 million are 3G subscribers. Data usage via tablets and smartphones has increased by 25 per cent in recent years.

"Value-added services cover not only telecommunications and mobile service industry but also many different aspects of life, such as banking, agriculture, healthcare and public administration. This is the big chance to bring technology to people in their daily lives," deputy minister Thang said.

More than 300 local value-added services providers along with international hardware manufacturers took part in the seminar.

Loans boost tra fish farming

Businesses and farmers in the Cuu Long (Mekong) Delta have so far this year received short-term loans worth VND59 trillion (US$2.8 billion) to invest in agricultural export products.

According to the Southwest Steering Committee, thanks to the loans, the total tra fish farming area in the region has expanded to 6,400 ha. The region's output has so far hit 902,325 tonnes, of which 540,000 tonnes were exported, generating $1.4 billion in revenue.

In addition, local enterprises processed and exported 4.3 million tonnes of rice, worth $1.95 billion.

The Viet Nam Tra Fish Association called upon the local banking sector to provide more flexible long-term loans and information to facilitate credit access for local farmers and businesses.

Exhibition to promote retail trade

The three-day Viet Nam International Retail and Franchise Exhibition will open tomorrow, offering franchising opportunities for superrmarkets, restaurants, shopping centres and small shop owners and fashion shops.

Seventeen countries, including Argentina, Australia, New Zealand, Thailand and the US, will participate in the expo, with more than 170 companies attending.

Seminars will be held on the first two days on acquisition of franchised brands, success with franchised start-up businesses, and updates on Viet Nam's retail market.

The franchise event will be held by Vinexad in coordination with local and Korean partners, at the Saigon Exhibition and Convention Center, 799 Nguyen Van Linh Avenue, District. 7, where a concurrent event, the Vietbabyfair, will also open the same day.

The Vietbabyfair will feature products for mothers and children from more than 90 foreign companies.

Dong Nai exports more wood

The southern Dong Nai province generated more than US$760 million in revenue from the export of wood products in the first 10 months of the year.

This represents a 6 per cent increase year over year.

According to the provincial Statistics Department, in October alone, the export revenue increased to more than $89 million, up by $12 million from the previous month.

According to the provincial Industry and Trade department, wood products are one of the four commodities with the highest value, after footwear, garments and textiles. The most popular wood products – furniture and plywood – are exported to large markets such as the European Union, the United States and Japan.

Chairman of the provincial Handicrafts and Wood Industry Association Phan Van Binh said that the association has organised a number of trade promotion programmes with a view to support local businesses in studying markets, taking part in exhibition fairs and providing export and import training. The member firms are also promoting afforestation in a number of provinces in Viet Nam as well as in Laos and Cambodia, aiming to generate raw material for production.

VN filters desalinate Saudi water

Doosan Heavy Industries Viet Nam Company has shipped the last of four massive 4,500-tonne plug-n-play multistage flash desalination evaporators to the Yanbu Phase III seawater desalination project in Saudi Arabia.

This is the eighth desalination plant that Doosan Vina has completed since it started production in 2009.

Ryu Hang Ha, Senior Vice President of Doosan Heavy Industries Korean and CEO of Doosan Vina, said, "The Yanbu Phase III contract for four desalination units was signed in March 2013. We mark the completion and shipment of these ‘Made-in-Viet Nam' products from our Quang Ngai complex."

The four salt water filtering systems are expected to produce a total of 380 million litres of clean water per day, meeting the demand of more than one million Saudi Arabians. Nearly all the workers who implemented the project, with a total capital of US$1.47 billion, were Vietnamese.

Vietnam 100 Best Places To Work Survey 2014 officially kicked off

Following the success of Vietnam 100 Best Places To Work Survey 2013, Anphabe, a pioneer agency in employer brand solutions, continues to partner with international research agency Nielsen to conduct the same survey of 2014 with more advanced methodology and at larger scale.

This is the only professional survey in Vietnam helping companies measure and improve Employer Brand’s Attractiveness effectively.

This year survey applies advanced methodology to measure Employer Brand’s Attractiveness based on AIDA model (Awareness, Interest, Desire and Action).

Accordingly, each Employer Brand will be measured by Anphabe and Nielsen by four phases of its talent attraction process: Awareness (Target talents know/ hear about company as an Employer), Interest (Target talents may consider to work for company in the future), Desire (Target talents perceive company as Ideal workplace), and finally Action (Target talents are willing to apply for relevant openings at company).

Beside Employer Brand Attractiveness Diagnosis using AIDA model, another new point of this year survey is the Employer Brand Love Diagnostic rated by employees of each attending company.

The perception gap between internal employees and external talents will help company understand its Employer Brand from multi perspectives, hence having more realistic improvement steps.

Tentatively in January 2015, all companies taking part in this survey will receive its Employer Brand Health Diagnosis (internal and external) as well as Total Market Employer Brand Report comprising latest career motivations / Employer Branding trends and the list of Vietnam 100 Best Places To Work 2014.

When announcing result of the survey, Anphabe and Nielsen will also share a special report on Talent Segmentation, the first specialised research about typical Vietnam talent archetype (Common traits, Career motivation/ expectation/ priority).

Thanh Nguyen, founder & CEO of Anphabe said, “The key for success in human resource strategy is not recruiting the best talents but the most suitable ones. The specialised research on Vietnam talent segmentation will effectively support companies in evaluating talent market and planning Employer Branding strategy customised for each talent segment to best attract, motivate and retain them”.

According to Hoang Thach Thao, head of Marketing & Communications of Nielsen Vietnam, Vietnam Best Places To Work Survey has been receiving many positive feedbacks and it also draws a good attention from different companies about the importance of employer brand.

In this year survey, in addition to the ranking of Vietnam 100 Best Places to Work, Anphabe and Nielsen will apply more sophisticated Employer Brand Health Index to meet specific information needs from companies as it’s one of the ground factors to build Employer Brand strategy.

VNCB has new general director

Dam Minh Duc has been appointed general director of Vietnam Construction Bank (VNCB).

VNCB announced his appointment at a recent meeting on the bank’s business plan for the fourth quarter of this year.

On July 29, the police detained Pham Cong Danh, former chairman of Thien Thanh Group, Phan Thanh Mai, former general director and board member of Thien Thanh, and another former board member of the group, on alleged charges of intentionally violating State regulations on economic management causing serious consequences.

Danh was serving as chairman of VNCB and Mai as general director of VNCB shortly before their arrests.

After Danh and Mai were removed from their posts at the bank, the then deputy general director Dam Minh Duc was picked to temporarily serve as general director and Vu Bach Yen as chairwoman of VNCB.

On August 1, the Bank for Foreign Trade of Vietnam (Vietcombank) struck a deal to help VNCB refund short-term deposits for clients and manage VNCB’s operations in the long term.

Vietcombank said it will cooperate with VNCB in developing banking services and sharing customer data.

Long Thanh airport necessary but not urgent

Nguyen Duc Kien, vice chairman of the National Assembly Economic Committee, has said the committee recognizes the need to build the multi-billion-dollar Long Thanh International Airport but does not see it as a matter of urgency.

Kien said last week that before talking about how to raise billions of U.S. dollars for the project in the southern province of Dong Nai, around 30km from HCMC, the timing of a decision by the Ministry of Transport to invest in the project should be carefully discussed first.

Such an international airport is needed for the country’s rising role but “what should be discussed here is when to proceed with the project to ensure the use of state capital is most efficient, not how much money to raise,” he said.

The NA has also asked the Government to review the performance of some operational airports such as Tan Son Nhat in HCMC, Can Tho in the Mekong Delta city of the same name and Cam Ranh in Khanh Hoa Province, as well as a master plan on transport development in Vietnam.

In line with Resolution 49 of the NA, investment projects of national importance must go before the NA for approval in two consecutive sessions.

Earlier, a north- south express railway project presented by the Government and the Transport Ministry was turned down by the NA of the previous tenure.

Jetstar kicks off Singapore-HCMC service

Jetstar Pacific Airlines on October 27 launched a daily air service between HCMC and Singapore in a move to expand its international network.

The new flights depart at 7:05 a.m. from HCMC’s Tan Son Nhat International Airport and the return ones will take off at 11:05 a.m. There were 180 passengers on board the maiden flight on October 27.

On the same day, the low-cost carrier opened its 11th domestic service linking Hanoi and the central coast city of Vinh, also on a daily basis.

Speaking at the launching ceremony of the new services, Le Hong Ha, general director of the private carrier, said the new international air route offers more options for travelers to buy low airfares to Singapore, and to other destinations worldwide via flights operated by Jetstar Asia and Jetstar Airways.

Jetstar Pacific Airlines currently operates 11 domestic services to Vietnam’s ten major destinations, namely HCMC, Hanoi, Danang, Vinh, Thanh Hoa, Haiphong, Hue, Nha Trang, Buon Ma Thuot and Phu Quoc.

As planned, the airline will also launch a new international service connecting HCMC and Thai capital Bangkok on December 10.

City retailers boost purchases of Dalat tomatoes

A number of supermarkets in HCMC have increased purchases of tomatoes from Dalat and support farmers to cut losses after the price of this farm produce tumbled due to a bumper crop in the Central Highlands city.

Supermarkets in HCMC have plans to promote tomatoes of Dalat in addition to their efforts to buy the product at higher prices than those offered by local traders.

Saigon Co.op buys a kilo of Dalat tomatoes at around VND6,000 and sells a kilo at VND6,900, higher than the buying price offered by traders and lower than the selling price on the market since the end of September when tomato prices started to fall.

Vo Hoang Anh, marketing director of Saigon Co.op, said the operator of the Co.opMart supermarket chain nationwide, Co.opXtra Plus supermarket in Thu Duc District and Co.op Food store chain in the city consumes an average daily volume of 12 tons on weekdays and 16 tons on weekends.

So far, Saigon Co.op has bought more than 300 tons of Dalat tomatoes.

Sales of tomatoes at Big C total 150 tons, according to Ho Quoc Nguyen, director of external affairs at the supermarket chain.

To help farmers ride out tough times, Big C has decided to sell tomatoes at the prices it offers to farmers at its stores in the south while covering transport costs for the tomatoes sold in the central and northern regions.

Viettel insists on mobile tariff cuts

For the second time in four months, military-run telecom firm Viettel has failed to secure approval from the Ministry of Information and Communications to cut its mobile tariffs.

Through the proposed reductions, the company could apply the same tariffs on calls on the same network and those to other networks. Viettel subscribers who phone those on other networks have to pay a fee that is 13% higher than that for the same network.

At a recent meeting with the ministry, Viettel deputy general director Le Dang Dung suggested the ministry allow the firm to do away with the difference in tariffs between same-network and other-network calls.

Pham Hong Hai, director of the ministry’s Telecommunications Department, said mobile carriers have the right to adjust charges but their reduced fees must not be kept below cost to protect smaller networks.

“The Ministry always requests Viettel and other networks to report on their costs and those reports are used as a basis to approve mobile tariff reduction proposals by carriers,” Hai said.

Viettel is the country’s biggest mobile carrier with more than 40 million subscribers, so subscribers on the Viettel network tend not to make a lot of calls to other networks due to the higher tariff, thus impacting on call connection revenues of smaller networks.

If Viettel was allowed to cut its tariffs, smaller networks would be placed in a more disadvantageous position, according to the ministry.

However, if approval was forthcoming, Viettel’s 40 million-plus subscribers would benefit. And if other carriers followed in Viettel’s footsteps, subscribers in the country would benefit as well.

A report by Vietnam Report Joint Stock Company shows that among the highest corporate income taxpayers this year are three major mobile carriers – Viettel, MobiFone and VinaPhone operator VNPT.

Helicopter tour to UNESCO-recognized Phong Nha park suspended

The helicopter tour which took tourists to UNESCO-recognized Phong Nha- Ke Bang National Park in northern Vietnam’s Quang Binh Province is to be suspended due to a shortage of planes available, the tour provider announced on Saturday.

The tour, which was offered by Oxalis- a local tour operator, took a total of more than 60 passengers to the park during three trips starting April 2014.

Nguyen Chau A, Oxalis’s CEO, which also offers tours to the park’s Son Doong Cave- the world’s current largest, explained that they can’t afford the fees if they use choppers departing from Hanoi.

It’s expected that planes won’t be available on a regular basis for the tour until next year, he added.

The tour was jointly launched by Oxalis, Farmstay- a local tour service provider- and Northern Helicopter Co., which belongs to the Ministry of Defense.

The tour offers tourists a chopper ride around the Phong Nha- Ke Bang Park and bird’s-eye views of the stunning landscapes beneath, including Son Doong’s Dia Dang Garden.

The chopper also landed and dropped tourists around En (Swallow) and Tu Lan Caves.

The one-hour ride costs US$3,400 for 22 tourists at one time.

Recognized as a UNESCO World Heritage site in 2003, Phong Nha-Ke Bang National Park boasts the karst formation which has evolved since the Palaeozoic (some 400 million years ago) and is the oldest major karst area in Asia.

The vast area is home to resplendent formations including 65 km of caves and underground rivers.

Provincial authorities are taking into consideration the construction of a cable car system in and around Son Doong Cave amidst public and expert concerns over the possible damage to the UNESCO World Heritage site surrounding it.

The Son Doong Grotto- the world’s current largest- was discovered in 1991 by Ho Khanh, a local, but only became well-known after a group of scientists from the British Cave Research Association, led by Howard and Deb Limbert, explored it in 2009.

The largest chamber of Son Doong is more than five kilometers long, 200 meters high, and 150 meters wide.

Business shutdowns outnumber startups

The number of firms going bust or temporarily shutting down business in October overtook that of newly-established enterprises, indicating domestic businesses are facing huge challenges, according to the General Statistics Office (GSO).

The office’s latest report showed that 6,830 new businesses were established while over 7,140 firms were suspended or dissolved nationwide this month.

Overall, the country’s number of start-ups was 60,000 in January-October with total registered capital of VND352.5 trillion, down 6.5% and up 9.5% respectively. The new enterprises were estimated to have generated 883,200 jobs in the period, a year-on-year fall of 0.2%.

Domestic enterprises, newly-established and operational ones alike, had additional registered capital of VND827 trillion in the first 10 months of the year, with start-ups accounting for VND352.5 trillion and the rest belonging to operational enterprises.

Meanwhile, around 54,300 businesses went bust and suspended operations in the period, rising 9.3% year-in-year. Some 7,730 of them were dissolved, 9,260 temporarily suspended operations and nearly 37,300 others stopped operations to wait for business code closures.

These ailing enterprises had total registered capital of VND455.9 trillion, including VND61.7 trillion at those enterprises that completed dissolution procedures, VND44.9 trillion of companies that were suspended, and VND349.3 trillion from those ceasing their operations to wait for business code closures.

There were roughly 13,000 enterprises resuming operations in the period, up 10.7% year-on-year.

The statistical report also shows the sectors that fared better in the period in terms of the numbers of new startups and shutdowns.

The accommodation and catering sectors saw the number of new start-ups rise 7.9% and that of shutdowns slide 16.8%.

Wholesale, retail and vehicle repair saw an increase of 58.5% in new start-ups and 25.8% in closures, construction up 28% and 2.7%, and the processing and manufacturing industry up 21.3% and 2.7%.

On the other hand, in certain other industries, the number of shutdowns far outpaced that of new startups.

The healthcare and social support sector as a whole reported a 15.5% drop in new start-ups and an 11.2% rise in closures; mining down 8.5% and up 7.8%; art and entertainment down 3.7% and up 18.7%; and finance, banking and insurance down 2.5% and up 8%.

Malaysia, VN aim for US$10 billion in trade turnover

The two-way trade turnover between Vietnam and Malaysia is projected to climb to a record high of US$10 billion in 2014, according to Malaysian Ambassador to Vietnam Azmil Mohd Zabidi.

Both governments have launched efforts to significantly expand bilateral trade and investment, which has resulted in an uptick that is expected to develop even more rapidly in the future, he said.

Malaysia has invested US$20 billion in Vietnam over the past 20 years with more than 400 Malaysian investors currently operating in the country, mainly in the real estate sector.

Malaysian enterprises are also keen on recruiting Vietnamese guest workers, thanks to their agricultural skills in the areas of cultivation and production, the Ambassador said.

Forum talks hydropower-related issues

Residents in the Central and Central Highlands have asked for hydro-power developers to give top priority to ensuring local livelihoods and protecting the environment while undertaking their projects.

They voiced their request when attending a forum in Thua Thien-Hue province on October 28 to address environmental and social issues with the developers of hydro-power projects since they have left observable damage over recent years.

The participants came from Dak Lak, Dak Nong, Phu Yen, Quang Nam, Thua Thien-Hue and Quang Binh provinces.

A survey showed that the Binh Dien hydropower plant in Thua Thien-Hue has negatively affected residents’ living conditions in upstream and downstream areas and reduced the population of some species of freshwater fish.

Highlighting the regions’ substantial potential of hydro-power production, the Director of the Centre for Social Research and Development (CSRD), Lam Thi Thu Suu, who is also the coordinator of the Vietnam Rivers Network, agreed that the activity had social and environmental impacts and needed to be addressed promptly.

Vietnam now has 815 hydropower projects with a combined capacity of 24,324.3 MW. Of these, 268 projects have been put into operation (14,240.5 MW); 205 projects are under construction (6,198.8 MW) and expected to be operated before 2017.

To ensure sustainable hydropower development and environmental and social protection, the Prime Minister has directed ministries, branches and localities involved to operate hydropower plants as processes approved, ensure power generation efficiency, and regulate sufficient water sources for the downstream.

Local businesses seek ways to penetrate Korean food market

Vietnam takes the lead in the world in rice export. It ranks ninth in exporting high quality seafood, vegetables and tropical fruit, said the Republic of Korea’s Consul General Oh Jae Hack at a seminar in HCM City on October 29.

However, the Consul General emphasised that the export value remains low as a complete supply chain is not established yet.

He said first of all, the two nations should strengthen trade exchange in order to add value to Vietnam’s export items and help it further penetrate the RoK’s market,. Meanwhile, trade promotion agencies and associations should find practical solutions to help the business community cooperate to introducing high quality Vietnamese farm produce while taking full advantage of the RoK’s processing technology.

In the first ten months of the year, two-way trade turnover reached some US$23.3 billion. Especially, the RoK now tops foreign investors in Vietnam with a total investment capitalisation of US$2.5 billion in the reviewed period.

According to Ms Bui Thi Thanh An, deputy director of the Vietnam Trade Promotion Agency (Vietrade), local businesses should exert greater efforts to fully tap the potential market and enhance their capacity to meet the strict requirements of product quality.

In addition, the business community of both nations should always be prepared to seize opportunities of the Vietnam-RoK Free Trade Agreement (FTA) expected to be signed late this year and will give fresh impetus to the development of bilateral trade and investment.

During the seminar, several RoK businesses expressed hope to seek Vietnamese partners to further introduce Vietnamese products to the RoK market.

Mekong Delta, RoK boost economic ties

The ongoing establishment of the Mekong Delta Development Institute is expected to strengthen economic, social and scientific-technological cooperation between the region and the Republic of Korea , Vice Chairman of the municipal People’s Committee Truong Quang Hoai Nam said in a workshop in Can Tho city on October 29.

He said local authorities hoped Korean experts will play an active role in driving the friendship between the two countries forward, pledging to create favourable conditions for partners from the RoK to implement the project with the best results possible.

Suh Kyo II, Rector of the Soon Chunhyang University, a leading medical university in the RoK, said the two countries shared a number of similarities in culture and history. The RoK boasts the largest number of firms investing in Vietnam, with over 2,000 companies and a capital value of more than US$3 billion, he noted.

Can Tho city and the delta in general are among optimal destinations for RoK investors due to the abundance of natural and human resources.

Once operational, the Mekong Delta Development Institute will play a huge role in socio-economic growth and bilateral ties between the two countries, he said.

During the workshop, participants talked about their shared vision and discussed activities for their collaboration.

Representatives from Can Tho and Soon Chunhyang Universities signed the minutes on education cooperation.

Meanwhile, the municipal Centre for Trade, Investment and Tourism Promotion and the RoK Consultation Development KOVI D&C signed a Memorandum of Understanding on encouraging international investors, especially those from RoK, to invest in Can Tho city, including concrete measures to secure more foreign direct investment.

RoK experts later visited the Vietnam-RoK technology nursery located at the Tra Noc Industrial Park and signed a cooperation agreement with Can Tho University.

Vietnam posts trade deficit with Laos

Vietnam suffered a trade shortfall of US$303.8 million with neighbouring Laos during the first nine months of the year, according to the latest statistics from the General Department of Vietnam Customs.

For the nine-month period, bilateral trade value between Vietnam and Laos jumped by 37.3% on-year to US$964 million with Vietnam exports reaching US$330 million, up 6.9% while imports were valued at US$634 million, up 61.8%.

Vietnam mainly exports steel (US$63 million, up 4.7%), petroleum (US$56 million, down 24%) and motorbike spare parts (US$30 million, up 26.8%) to Laos.

Major imported products from Laos include wood and timber products (US$490 million).

Last year, Laos ranked 33rd out of the 200 total export markets of Vietnam with total export reaching US$423 million.

Vietnam-made desalination equipment shipped to Saudi Arabia

Doosan Heavy Industries Vietnam (Doosan Vina) transported the last of four shipments of desalination equipment to its client, the Kingdom of Saudi Arabia, as part of the company’s Yanbu Phase 3 project.

The freshwater generator, which is capable of purifying 95 million litres of seawater per day, is the eighth of its kind made by Doosan Vina’s plant in the Central province of Quang Ngai.

Weighing approximately 4,500 tonnes, the gigantic machine is 34.4m wide and 143m long. The machine is scheduled to arrive in Saudi Arabia within a few weeks.

Doosan Vina General Director Hang Ha Ryu said the successful completion of orders like this demonstrated the high level of technical competence and skills of Vietnamese workers.

Doosan Vina is a joint investment in Vietnam by Doosan Heavy Industry Inc. and Doosan Engineering & Construction from the Republic of Korea.

SMEs receive training to enhance export capacity

Vietnamese small and medium-sized enterprises (SMEs) joined their counterparts from Indonesia, the Philippines and Pakistan in recent training courses in France to enhance their export competitiveness in European market.

According to the Vietnamese Embassy’s Trade Office in France, the courses from October 19-25 were part of the Export Coaching Programme (ECP) – which aims to help exporters make inroads into Europe.

In Vietnam, the programme is implemented by the Vietnam Trade Promotion Agency (Viettrade) and the Netherlands’s Centre for the Promotion of Imports from developing countries (CBI) in the 2014-2016 period.

The trainees were equipped with marketing and management skills to better cater for the demands of European customers.

They also had an opportunity to study the market trends and competitiveness at the Global Food Marketplace (SIAL) – the world’s largest food exhibition, in Paris on October 19-23, as well as visited and studied the operation process of some food ingredient companies in France and Germany.

Next year, Viettrade and the CBI will arrange for more Vietnamese businesses to attend similar training courses and organise a workshop to help Vietnamese food producers outline proper strategies to promote their potential products such as tea and honey in Europe.

The two sides will also help ECP beneficiary businesses to attend the Vietnam FoodExpo in Ho Chi Minh City and the Anuga Food Fair in Germany, which are slated for May and October next year.

Hanoi conference discusses anti-transfer pricing measures

A conference on transfer pricing, including strategies for tax management agencies to tackle the issue, was held in Hanoi on October 29.

Managers and experts said pricing transfer and tax avoidance is a global issue.

Nguyen Van Phung, Deputy Director of the Department for Tax Administration of Major Corporations under the Ministry of Finance’s General Department of Taxation, said enterprises tend to evade tax payments by exploiting loopholes in the legal system. The challenge to management agencies is how to detect law violations in such behaviours.

Director of the Ministry of Planning and Investment’s Foreign Investment Agency Do Nhat Hoang said it is essential to uncover evidence of transfer pricing, which aims to dodge tax duties, and penalise violators according to the legal framework.

Economic expert Nguyen Minh Phong presented his analysis of the issue, saying that transfer pricing is used by enterprises to avoid tax, which distorts the investment climate, reduces the efficiency of state management, creates a high risk of corruption, and causes losses in State revenue.

Successfully combating transfer pricing depends on legal mechanisms and policies, as well as the professional skills of tax officers, participants noted.

In order to maximise State efforts, the Government assigned the Ministry of Planning and Investment to work with relevant agencies and authorities to set up an anti-transfer pricing project.

The Ministry of Finance, which was commissioned to implement the project, has focussed on developing training programmes, running communication campaigns and implementing a number of other measures in an effort to detect and deal with firms that show signs of transfer pricing.

Over the last 26 years, foreign direct investment has played a crucial role in boosting Vietnam’s socio-economic development, generating more funds for the State budget and increasing the country’s integration into the global economy. However, the rise in cases of transfer pricing and tax evasion has harmed the country’s investment environment.

According to the General Department of Taxation, out of the 39,000 firms that were inspected by tax agencies during the first eight months of this year, nearly 2,000 showed signs of transfer pricing. The agencies collected over 1 trillion VND in fines (47 million USD).

Hai Duong authorities help Japanese firms overcome difficulties

Authorities in the northern province Hai Duong will support foreign businesses, including those from Japan, in overcoming difficulties, Chairman of the provincial People’s Committee Nguyen Manh Hien announced at a meeting with Japanese enterprises on October 29.

He said local leaders are doing their utmost to improve the investment climate and reform administrative procedures.

The official took note of the difficulties Japanese businesses are facing, as well as their feedback on labour permits, infrastructure improvements, taxation regulations and services, and business operations.

The entrepreneurs suggested apartment buildings and trade centres be built next to industrial parks; human resources be improved, especially with regard to foreign languages; and the stability of the investment climate be secured.

Local authorities agreed to simplify administrative procedures to issue labour permits and upgrade the electricity infrastructure to provide a reliable supply of power for businesses.

The province also approved a housing development project in urban areas and industrial parks by 2020, and issued an investment licence for the construction of 1,000 apartments and a number of markets for workers at Tan Truong industrial park in Cam Giang district.

The tax, public security, and electricity sectors set up hotlines to be able to respond to businesses’ queries.

Hai Duong is home to 283 investment projects from 24 countries worth 6.3 million USD. Japan ranked second with 66 projects worth 1.1 million USD, with a focus on electrical spare parts, telecommunications equipment, hospitality services, vocational training and trade promotion.

Most Japanese projects apply green technologies and follow the State regulations on environmental protection.

More than 30,000 local workers are employed by Japanese businesses.-

Trade within ASEAN increased faster than trade between ASEAN and non-member states during the 1993-2013 period.

An annual growth rate of 10.5 percent was recorded for trade within ASEAN during the 1993-2013 period, compared to 8.9 percent for trade between ASEAN and non-member states, according to Malaysia’s Bernama News Agency.

Bernama quoted the ASEAN Secretariat’s statistics released in October 2014 as saying that the proportion of intra-ASEAN trade increased from 19.2 percent in 1993 to 22 percent in 2000 and 24.2 percent in 2013, accounting for 25 percent of the region's total GDP in 2013.

Data on foreign direct investment (FDI) inflows in ASEAN showed that between 2000 and 2013, FDI within the bloc grew at an average annual rate of 25 percent, with FDI from non-ASEAN states posting an average annual growth of 13 percent.

Total FDI in ASEAN reached 122 billion USD in 2013, with non-ASEAN states providing 101 billion USD.

In 2013, the majority of FDI comprised 22 percent provided by the EU, 18.7 percent by Japan, 17.4 percent by ASEAN member states, 7.1 percent by China and 3.7 percent by Hong Kong (China).

The services sector benefitted from FDI the most at almost 70 percent, closely followed by manufacturing.-

Quang Nam boosts rural industrial development

The central province of Quang Nam has boosted its rural industrial development, creating jobs for thousands of workers and significantly contributing to the province's new rural area construction programme, the Vietnam Economic News reported.

The industrial production of the province reached 24.96 trillion VND in 2011 and rose to 28.965 trillion VND last year, with an average annual growth rate of 18.17 percent. Private industrial establishments increased by 1,035, from 15,450 in 2011 to 16,485 in 2013.

Local industrial clusters have attracted more investment into rural areas in the central province of Quang Nam with the number of industrial workers rising from 54,725 in 2011 to 62,105 in 2013.

According to the annual plan, the province’s total industry promotion funding is 2.72 billion VND, including 1.38 billion VND from the central budget. Quang Nam has spent 464 million VND on industry promotion activities deployed in 10 districts and cities including pottery training in Hoi An, industrial sewing in Dien Ban and Duy Xuyen, and rattan weaving in Thang Binh and Duy Xuyen; and organised seven Vietnamese goods fairs in the districts of Tay Giang, Dong Giang, Que Son, Thang Binh, Nam Giang, Duy Xuyen and Bac Tra My.

Thanks to improved industrial development activities, rural people, especially for the poor, have gained access to vocational training, been employed, and gradually escaped from poverty.

Quang Nam’s Department of Industry and Trade has provided support for rural industrial establishments in terms of technology innovation and scientific application to improve product quality and competitiveness, especially for craft products.

The local authority has also offered soft loans to rural industrial establishments, helped boost their sales, and encouraged private sector to participate in rural industrial development schemes.

Forum talks hydropower-related issues

Residents in the Central and Central Highlands have asked for hydro-power developers to give top priority to ensuring local livelihoods and protecting the environment while undertaking their projects.

They voiced their request when attending a forum in Thua Thien-Hue province on October 28 to address environmental and social issues with the developers of hydro-power projects since they have left observable damage over recent years.

The participants came from Dak Lak, Dak Nong, Phu Yen, Quang Nam, Thua Thien-Hue and Quang Binh provinces.

A survey showed that the Binh Dien hydropower plant in Thua Thien-Hue has negatively affected residents’ living conditions in upstream and downstream areas and reduced the population of some species of freshwater fish.

Highlighting the regions’ substantial potential of hydro-power production, the Director of the Centre for Social Research and Development (CSRD), Lam Thi Thu Suu, who is also the coordinator of the Vietnam Rivers Network, agreed that the activity had social and environmental impacts and needed to be addressed promptly.

Vietnam now has 815 hydropower projects with a combined capacity of 24,324.3 MW. Of these, 268 projects have been put into operation (14,240.5 MW); 205 projects are under construction (6,198.8 MW) and expected to be operated before 2017.

To ensure sustainable hydropower development and environmental and social protection, the Prime Minister has directed ministries, branches and localities involved to operate hydropower plants as processes approved, ensure power generation efficiency, and regulate sufficient water sources for the downstream.

Customs mechanism in spotlight

Viet Nam should widen the application of its pre-classification customs mechanism, as it could serve as a foundation for the country to promote international trade.

At a press conference on the mechanism which was held here yesterday, Adrian Ball, ASEAN Tax Managing Partner for EY, also said pre-classification customs mechanisms helped businesses to classify the codes, taxation values and origins of imported goods before allowing them into Viet Nam.

Under the mechanism, issued in November 2013, enterprises are required to submit documents on imported goods to customs agencies 90 days before the arrival of the goods.

Under the same mechanism, customs agencies and businesses will have a unification in the number of tax payments. This could also help businesses to avoid risks if goods are stuck at port or the tax payments are higher than initial estimates.

According to current regulations, goods could be cleared and investigated within one to three years. If the customs agencies uncover any tax arrears, businesses could be fined up to 20 per cent of the total value of goods. Sometimes, the fines could reach several millions of dollars.

However, the Vietnamese business community thought the mechanism has not really been effective, and the policy has not been applied to all businesses.

At the press conference, Pham Thi Thu Trang, deputy general director of EY Viet Nam, said responses from businesses showed that none of the applications made under the mechanism were accepted.

Trang attributed this to "several impossible conditions that Viet Nam has stipulated for enterprises to be eligible under the mechanism".

She noted that the first requirement was for importers to submit documents 90 days before the arrival of the goods, along with formal contracts with seals.

Normally, businesses do not decide on import-export transactions 90 days before arrival, making the requirement difficult to meet, Trang explained.

In addition, in terms of taxation value, the mechanism only accepts goods which had not been imported before. Enterprises are required to make payments using letters of credit 90 days in advance.

Ball agreed, saying the United States and European Union have not imposed such conditions in their respective pre-classification customs mechanisms. Most of the countries maximise conditions under the World Trade Organisation.

"The most important thing is to classify based on whether it is a real company with a real transaction," he added.

Textile, garment exports seen hitting $25b in 2014

Garment and textile exports are expected to rise by 15-16 per cent this year to between US$24.5 billion and 25 billion, according to the Viet Nam Textile and Apparel Association.

Shipments in the first nine months were worth nearly $18 billion, an increase of 19 per cent year-on-year, said Nguyen Dinh Truong, deputy chairman of the association, said. With this, the sector is confident of exceeding the year's target by $500 million to $1 billion, he said.

However, in the first nine months import of feedstock by the sector cost $11 billion.

Truong said companies are switching to domestic feedstock from imports while speaking at the opening of the 14th Vietnam International Textile & Garment Industry Exhibition in HCM City yesterday.

As a result of an 18 per cent increase in the sales of feedstock the textile and garment industry saw revenues rise by 12 per cent, he said.

The export market has already seen positive signs for next year with a surge in the number of orders for the first quarter, he said.

Viet Nam's free trade agreements with the EU, South Korea, and the Customs Union of Russia, Belarus and Kazakhstan, and the Trans Pacific Partnership herald huge opportunities for the industry, he said.

But the industry needs to improve its productivity, quality, and competitiveness with investment in new technologies, machinery, and innovation, he said.

At the exhibition more than 200 companies from 10 countries and territories like mainland China, India, Japan, Singapore, Taiwan, Turkey, and the US are displaying the latest machinery, equipment, and technologies.

The products include machinery and equipment and accessories for spinning and weaving, embroidery, steaming, bleaching, and washing besides chemicals and dyes.

The Association of Garments, Textiles, Embroidery and Knitting is set to hold seminars on the sidelines to discuss current trends and the latest techniques and technologies in the industry.

The event at the Tan Binh Exhibition & Convention Centre will go on until November 1.

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