Companies get busy with exports after Tet

Many companies in HCM City have began export shipments immediately after a long Tet (Lunar New Year) holiday, with many of them having enough orders to remain busy for the whole year.

Vo Quoc Hao, general director of Binh Minh Garment Joint Stock Company, said his company exported a consignment of 10,000 shirts to Japan on February 15, the first working day after Tet.

This was part of a contract to export three million pieces worth approximately US$20 million, he said.

His company has a target of 16 per cent export growth this year, with the US and Japan being the biggest customers, and trousers, shirts, t-shirts, and sportswear being the main items, he said.

Do Ha Nam, chairman and general director of Intimex Group, which exports pepper, cashew, coffee and other farm produce, said his company has to work under high pressure after Tet to fulfil its export orders for this month, which are 20 per cent higher than last month.

Nam said export of farm produce would be better this year since global demand for them would continue to increase.

But Vietnamese firms need to focus on improving their products'competitiveness, he said.

In the first week after resumption of work Thang Loi Textile Garment JSC plans to export a container of garments each to Germany and the US for around $30,000.

Nguyen Chi Trung, director of Gia Dinh Shoes Co, Ltd, said his company is preparing to export 13,000-14,000 pairs of fashion shoes to Spain, with a total outsourcing value of $20,000.

There are many outsourcing orders this year, mainly moved from China, but due to fierce competition rates have not increased, he said.

Truong Thanh Furniture Corporation is set to ship a consignment of wooden products worth $150,000 to the US this week.

Vo Truong Thanh, general director of the company, said it has orders for until September and expects to get more from the US and Japan.

Many importers have shifted their orders from China to Viet Nam to take advantage of free trade agreements the country has signed or would sign, he said.

Thanh said his company expects to achieve export growth of 25 per cent this year since its exports to the US and Japan are likely to expand sharply while its exports to the EU are expected to recover.

The wood industry would benefit from FTAs, particularly the TPP, and so his company has taken measures to capitalise on these opportunities, he said. It recently acquired a South Korean company in Binh Duong to expand operations, he said, adding that it plans to strengthen promotion and improve the skills of employees in its sales and international marketing divisions.

Truong Thuy Lien, director of Lien Phat Co, Ltd, said export have expanded in the last two years.

The company has export orders for three quarters, with many new customers from the US joining its clientele base, she said.

Last year many US footwear importers visited her factory to study its production chain, corporate social responsibility and other aspects before signing outsourcing contracts, she said.

"We will begin to export our products to these US new customers in March."

Her company has hired new workers and expanded production, she revealed. Many Japanese and Korean companies in HCM City-based industrial parks, including the Korean firm Yujin Vina, which makes spoons and forks, and Japanese firm Sai Gon Precision Co, Ltd in Linh Trung 1, said they had export orders that would take until the end of this year to execute.

BBC reports better results in 2015

Confectioner Bibica Corporation (BBC) announced revenues of VND1.17 trillion (US$52.2 million), and pre-tax profits of VND107 billion ($4.7 million) in 2015, which was 40 per cent higher than the previous year.

The company reported that its better business results for 2015 were thanks to stronger financial activities, lower cost of management activities and cheaper material for production.

BBC also said that in Q4 it reached revenues of VND463.4 billion ($20.67 million), an increase of 13 per cent over same term last year while the cost of sale only grew 6 per cent.

Thus, the net profit amounted to VND189.3 billion ($8.43 million), resulting in pre-tax profits of VND50.7 billion ($2.26 million), up 70 per cent over last year's Q4.

Based in HCM City, BBC is one of the leading confectionery makers in Viet Nam, with popular brands including Hura, Choco Bella, Orienko, and Zoo, in addition to OneTwoThree.

Its shares ended at VND68,000 ($3) each on the HCM Stock Exchange yesterday.

Most Ha Noi listed firms see Q4 profits

About 86.7 per cent of the listed companies on the Ha Noi Stock Exchange (HNX) made profits in the fourth quarter of last year.

However, their combined profit in Q4 2015 fell 27.7 per cent compared with the same period of 2014.

The number of firms that reported losses in the last quarter of 2015 accounted for 13.3 per cent of the total listed firms, with the combined loss registering a 27.7 per cent increase, when compared with the same period of 2014.

As of February 2, 97.6 per cent, or 207 out of 212 firms that were not parent companies, published their Q4 2015 financial reports, a slight decline of 0.9 per cent year-on-year.

HNX said the listed parent companies had to publish their fourth-quarter financial reports of 2015 on February 15.

Steel imports hit US$9 billion

Vietnam’s steel imports rose 27.24% to US$9 billion last year, while exports dipped 14% to US$2.46, pushing the import surplus to US$6.54 billion, the Vietnam Steel Association (VSA) has officially announced.

Vietnam imported 19.83 million tons of finished and semi-finished steel products, 52% of which were from China. Meanwhile, most of Vietnam’s steel products were shipped to ASEAN, which accounted for 75% of total exports.

VSA said this year steel businesses will face fierce competition at regional markets like Cambodia and Laos where cheap Chinese products are flooding. Meanwhile Indonesia and Malaysia will impose high anti-dumping duties on Vietnamese steel products.

In the domestic market, VSA reported that its members sold around 551,000 tons of construction steel in January, down 6% compared to the previous month but up 36.6% over the same period last year.

However, the prices of steel scraps and steel ingots began rising after a long-time decline, making the selling prices up.

FPT named best company for corporate governance in Vietnam

FPT was recognised on February 17 as the company with the best corporate governance in Vietnam by financial publication Asia Money.

FPT won four out of five important categories including Best for Disclosure and Transparency; Best for Shareholders’ Rights and Equitable Treatment in Vietnam; Best for Responsibilities of Management and the Board of Directors in Vietnam and Best for Investor Relations in Vietnam.

These awards recognised FPT’s efforts in corporate governance in general and investor relations in particular. In nearly 10 years of being listed on the stock exchange, FPT has been named among top publicly listed companies which pay the highest dividend and ensured shareholders’ rights and equitable treatment.

In terms of disclosure, FPT has always been one of the companies that publish the earliest financial statements among the list of VN30 - Top 30 firms in terms of scale and complexity in reporting. In addition to quarterly and annual financial statements, FPT is one of few companies to publish monthly business results.

Besides the minimum lawful requirements, FPT also improved the corporate governance quality in accordance with international standards by appointing the world's leading experts on information technology and business administration as independent members of FPT’s board of directors.

In addition, FPT’s management team has also presented at quarterly investor meetings, and participated in many major investment conferences at home and abroad to better communicate with not only shareholders but also potential investors.

In 2015, FPT’s investor relation department as well as senior leaders has met 131 foreign investment funds in order to introduce FPT and helped make FPT’s name more popular in the investment community.

In 2015, Asia Money published the rankings of nine Asian countries to honor those with the best corporate governance. In particular, in Vietnam, Asia Money selected 18 companies to assess their corporate governance.

The Corporate Government Poll is an annual event organised by Asia Money Magazine – one member of the Euromoney group specializing in financial markets in Asia.

This eighth event was voted by more than 350 CEOs, chief investment officers (CIOs) of investment funds, and research directors and senior analysts of securities firms from 12 countries and territories throughout Asia Pacific, including India, Indonesia, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand, Australia, China, Hong Kong and Vietnam.

Exporters benefit from Vietnam- Korea FTA

Local enterprises have exported more to the Republic of Korea since a bilateral free trade agreement (FTA) between Vietnam and the Northeast Asian country went into force last December.

Pham Xuan Trinh, general director of Phong Phu Corporation, said the company has made good use of the FTA to export denim to the Korean market. Denim is among the products which are not easily exported as it is heavy, costs more to transport and requires short production time.

However, Phong Phu has met the requirements of Korea and its exports are rising, Trinh said.

In addition to garment, seafood exporters will benefit. According to the Vietnam Association of Seafood Exporters and Producers (VASEP), shrimp exports to Korea will enjoy favorable conditions this year as seven tariff lines on shrimp are removed under the FTA. In particular, the country will offer a zero tariff for 10,000 tons of shrimp from Vietnam in the first five years and 15,000 tons in the five following years.

Therefore, Vietnam’s shrimp has an edge over other ASEAN countries like Thailand, Indonesia and Malaysia. Korea provides a preferential tariff for only 5,000 tons from other ASEAN countries.

More Vietnamese seafood is poised to enter the Korean market owing to lower transport cost in comparison to some South American countries which send high seafood volumes to Korea. Besides, with the removal of import tariff, Vietnamese products will be more competitive.

Last year, Vietnam exported almost US$238 million worth of shrimp to Korea, down 25% against 2014, though this market remained the fifth biggest shrimp importer of Vietnam after the United States, Japan, the European Union and China.

According to VASEP, shrimp exports to the Republic of Korea will surge in the future following tax incentives pledged in the trade deal.

Exporters of other seafood products like squid and octopus will have the opportunity to increase shipments to Korea. Vietnam’s squid and octopus exports to that market amounted to VND163 million last year.

VASEP said Korea imports squid and octopus from 22 markets and that Vietnam is the biggest supplier, followed by Chile and Peru. Korea is Vietnam’s biggest importer of these products, accounting for 38% of the total.

Big phone retailers pile pressure on small businesses

Ambitious plans of big mobile phone retailers including The Gioi Di Dong (Mobile World), FPT Shop and Vienthong A to open thousands of outlets have made life difficult for smaller businesses in the sector.

Mobile World Joint Stock Company (Mobile World) has unveiled a plan to have up to 1,000 stores. Other retailers like FPT Shop, VienthongA and Viettel Store are pushing for plans to open many shops though they now operate more than 250, over 200 and 300 facilities respectively.

VienthongA and FPT Shop aim at opening 50-100 new stores this year. Even VinPro, a new player on the phone retail market, looks to have about 100 new stores this year to sell VinPro and VinPro Plus technology products after having 100 shops.

Experts said major retailers open new stores almost every week, piling pressure on small mobile phone retailers in all parts of the country. Small retailers cannot compete with giants due to their limited finances.

Most small phone retail businesses now have to focus on selling top-up cards for mobile phones, accessories and old phones. Some of them sell products such as portable speakers, Wi-Fi transmitters and sports cameras for survival.

Nguyen Bach Diep, general director of  FPT Retail Digital Joint Stock Company, said small mobile phone shops now hold 30-35% of the market and that their share would shrink.

Vietnam's Military Bank seeks double foreign ownership limit this month

Military Commercial Bank (MB), Vietnam's fourth biggest listed lender by market value, expects to offer foreign investors an additional 10% stake this month in a bid to improve liquidity in the stock, a senior executive said.

The stake would double the amount of shares held by foreigners, Vice Chairman Luu Trung Thai said in an email to Reuters, adding that no investors has been pre-selected.

Vietnam allows foreigners to own up to 30% of domestic banks and Thai said the bank would hold on to the remaining 10%, which has been reserved for strategic investors, for now.

Shares in MB are popular with foreign investors largely because of the bank's relatively low bad debt ratio but trading has been capped by the 10 percent ownership limit.

"(The move) seems to be an attempt to improve liquidity in the stock and perhaps enable existing bank holders such as Maritime Bank to reduce their stake below 5 percent," said Fiachra Mac Cana, managing director and head of research at Ho Chi Minh Securities.

Vietnam caps cross ownership at banks at five percent, but Vietnam Maritime Commercial Bank now owns 8.96% in MB and Vietcombank holds 7.16%, Thomson Reuters data showed.

Cultivating sustainable agriculture in Vietnam

Agriculture is poised to drive a new era of economic growth for Vietnam, if the nation focuses on revolutionizing how smallholder farms are operated and implements needed institutional reforms, say experts.

The opportunities for expanded commodity exports including rice, coffee, tea, cassava, rubber, cashew nuts and black pepper presented by recently signed free trade agreements (FTAs) is clear.

However, to tap the potential the experts say, the nation needs to reshape its thinking and realize that smallholder farms are fully capable of modernizing their technologies and becoming profitable businesses.

Associated Professor Ngo Thi Tuyet Mai from Hanoi National Economics University (NEU) points out that commodity exports have steadily increased over recent years from US$25 billion in 2011 to US$30.1 billion in 2015.

In addition, Mai noted that during the fifteen-year period 2001-2015 commodities annually accounted for 20-27% of the country’s total exports— though due to the lack of focus on quality profitability was minimal.

Notably, Mai points out that during this fifteen-year period there was a lack of access to foreign markets as most consignments were shipped to regional countries in Asia as opposed to major markets in the EU or North America.

She said now with the enlarged opportunities to access foreign markets presented by FTAs there is more incentive than ever for the nation to invest in modernizing all phases of pre and post-harvest technologies and boosting production.

In the past most farmers produced only a fraction of their lands maximum potential yield, mainly because they were not using improved seeds or fertilizers, she underscored.

Utilizing new varieties of seed and fertilizers the nations farmers could quadruple their yields and diversify field crops. As well, they can use other sophisticated technologies to improve the soils fertility to reduce costs and maximize profits.

To unlock the potential of the new market access, Mai said the government and development community should, for starters, empower smallholder farmers with more options in seeds, fertilizers and modern farm machinery and equipment.

The government should invest in developing information system on markets, prices and supply and demand to minimize risks for exporters and farmers as well as consider new trade advertising programs to further raise exports.

Director Nguyen Do Tuan Anh from the Institute of Policy and Strategies for Agriculture and Rural Development (IPSARD) agrees and said the answer is all about developing innovative cultivation methods aimed at improving quality.

Luu Duc Khai, head of Director of Agriculture and Rural Development Policy Department, echoes Anh’s views, saying if farmers don’t improve their production and processing methods, they will never thrive.

Deputy Director Nguyen Anh Duong of the Macroeconomic Policies Department said farmers have to transform themselves by further investing in post-harvest and preservation technology to improve the quality of exported products.

Last but not least, economist Pham Chi Lan emphasizes the government must accelerate institutional reforms and reform the legal system in line with development trends in order to cultivate sustainable agriculture.

Italian companies shift production to Vietnam

Several Italian manufacturers have announced plans to relocate their operations from China to Vietnam, as declining economic growth and rising wages there are making it difficult for them to continue doing business.

The revelation was made by Bruna Santarelli, a member of the Italian Trade Commission on February 17 at a press conference at the ProPak International Processing and Packaging Exhibition in Ho Chi Minh City.

"In China, there are many Italian companies invested, but they are facing wage increases and labour strikes,” said Ms Santarelli.

She said they also are desirous of moving to other countries in ASEAN (Association of the Southeast Asian Nations) to take best advantage of trade and investment opportunities presented by the AEC’s formation.

Lastly, she said many of them are suppliers to Samsung and they are relocating to avoid fragmenting the supply chain and because the move makes better economic sense, adding to their overall profitability.

According to official reports, minimum wages in China have almost doubled over the past five years. Labour-management disputes over factory closure have also become commonplace in China.

Japan’s Vanilla Air to fly to Vietnam

Japan’s low-cost airline Vanilla Air under ANA Holdings Inc.has recently revealed its plan to explore air routes to Vietnam in the coming time.

After the launch of Narita- Taipei (Taiwan, China) air route, the airline is set to explore air routes from Taipei to other South East Asian nations, a Vanilla Air representative said.

This is the first time, the carrier has operated routes to major cities outside Japan and Taipei is served as a centre to expand its air routes in the time ahead.

At present, Vanilla Air has discussed possibility of opening more air routes to major cities of Thailand, Vietnam and Singapore.

The airline is expected to rake in US$13 million in profit, after suffering a loss of US$32.5 million in 2015.

VNREA predicts further property price rises in 2016

The Vietnam Real Estate Association (VNREA) has projected a continued recovery of the real estate market this year, with prices seen rising by 5-10% against 2015.

The recent forex policy moves such as U.S. dollar-Vietnam dong exchange rate adjustment, dollar deposit rate reductions and anti-hoarding of foreign currency, as well as economic growth and falling inflation will place certain impact on the property market. Therefore, citizens and enterprises might use their domestic currency funds to invest in the property market, which is considered an attractive investment vehicle at present, VNREA said in a report.

This year, mid-end homes with prices of around VND1 billion a unit or higher remain attractive because they are affordable and meet the demand of many buyers.

Ngo Quang Phuc, deputy general director of Him Lam Land, said apartments priced at VND1.1-1.2 billion a unit would sell well this year. Enterprises will also develop high-class projects to meet demand of foreigners and overseas Vietnamese.

The commercial budget condo segment will continue growing but it would not steal the limelight as it depends on Government support. VNREA said supply would be as stable as in previous years.

Experts and businesses see the housing price increases of 5-10% as rational under the current business circumstances. There have been concerns over speculation, which may lead to stronger price hikes at certain projects.

This year, the property market is expected to draw more foreign investors seeking to capitalize on the revised laws on housing and property trading that came into force last year.

However, despite its recovery, the property market is still facing risks, especially of bad debt. Most realty businesses are sitting on bank loans with interest rates of over 10% per year. Besides, the market has yet to receive significant support in addition to the Government’s VND30-trillion credit package, VNREA said.

Many large real estate companies in HCMC have announced 2016 projects with each launching 1,000 to 3,000 apartment units. For instance, Hung Thinh Land will offer around 7,500 products, including 4,500 mid-end apartment units, 1,200 to 2,000 high-end units, and 1,000 land lots.

Pre-Tet remittances via Vietnam Post surge

Vietnam Post Corporation (Vietnam Post) said around US$130,000 was remitted home a day by overseas Vietnamese and guest workers before the Lunar New Year holiday (Tet), double that on normal days.

Apart from international money transfer services, the firm saw domestic money transfers rising by two times against normal days. Vietnam Post said it conducted nearly 2,000 transactions with senders and recipients every day, with cash flows totaling some VND160 billion (US$7.1 million).

Nearly 15,000 clients conducted transfer transactions a day before Tet with VND450 billion changing hands. Savings at Vietnam Post exceeded VND24.1 trillion days ahead of the week-long holiday in Vietnam.

The corporation reported two-fold growth in the volume of postal products, newspaper and money transfer services in the pre-Tet period.

Vietnam Post’s delivery services by train rose by over 260% and by air by 166% prior to Tet. In addition, 1,900 tons of goods was transported on the north-south road.

Post offices in Hanoi registered 13-15% growth in transactions while the percentage in Danang and HCMC was 30%. Meanwhile, express delivery services grew 30-50%.

Vietnam Post’s mail delivery service resumed on February 10 and its post offices in provinces and cities came back to their daily chores a day later. International delivery services like VNQuickpost and PUD-DHL have resumed since February 13.

Sugar firms seek to compete with imports from Thailand

Domestic sugar companies are mulling a host of measures including turning out products able to better compete with sugar imports from Thailand.

The Vietnam Sugar and Sugarcane Association (VSSA) said a majority of local sugar companies posted low profit or even suffered losses last year since they were forced to sell their products at reduced prices to cope with cheap sugar from Thailand.

VSSA said sugar demand of confectionery and beverage producers has fallen after the Lunar New Year holiday, or Tet. So to maintain market share, domestic sugar firms need to make products able to compete with Thai sugar in terms of price.

According to VSSA, with more than 90 million people, Vietnam is a large market for sugar firms but domestic sugar enterprises have felt the pinch of increasing pressure from imports from Thailand, especially when Thai corporations are stepping up acquisitions of large retail systems in this market.

Therefore, the association called on local sugar mills and traders to get ready for the competition on the home market. They should cooperate in stabilizing rather than undercutting prices if they want to curb sugar import from Thailand.

Another measure suggested by VSSA is that local sugar enterprises should team up with to ensure stable supply for the market to help stabilize prices.

Currently, Vietnam consumes around 100,000 tons of sugar a month.

Apparel export orders abound

Many textile-garment enterprises said they have secured export orders until the end of the second quarter and some have tight production schedules until the end of this year.

Many apparel firms on February 15 resumed operation after a nine-day Lunar New Year holiday (Tet), which ended on Sunday.       

Le Quang Hung, chairman of Saigon Garment Manufacturing Trading JSC (Garmex Saigon), told the Daily that there are plentiful export orders which will keep their factories busy until the end of the year and that the firm looks to raise revenue by 20% to VND1.8 trillion this year over last year.

Garmex Saigon obtained VND1.53 trillion (US$68.3 million) revenue in 2015.

Pham Xuan Hong, vice chairman of the Vietnam Textile and Apparel Association (VITAS), said most of the companies have won export contracts for the first and second quarters and some even prepare goods for export until the year’s end.

He told the Daily on February 15 that orders and export markets are quite stable in the first months of 2016. However, enterprises have just resumed operation and waited for workers to come back to work.

Hong said Vietnam’s apparel export turnover reached US$27 billion last year and is projected to rise by over 10% to some US$30 billion in 2016.

According to statistics of the Ministry of Industry and Trade, the manufacturing index of the textile industry went up 12% in January and the index for the apparel sector up 11.2% year-on-year.

Nearly 30 million square meters of woven fabric made from natural fibers was turned out last month, up about 10% year-on-year, artificial and synthetic fiber products grew 6.5% to 63.3 million square meters, and clothes were up 9.2% with 305.8 million items.

Overall, the textile-garment sector posted US$2 billion in export revenue in January, a rise of 5.8% against the same period of 2015.

However, Hung of Garmex Saigon warned that if companies, especially local ones, do not adjust their way of doing business, they will not benefit much from the country’s deeper international integration.

Hung said last year’s textile-garment export turnover totaled US$27 billion with the apparel sector accounting for 80%. Though foreign direct investment (FDI) enterprises make up 30% of textile firms in Vietnam, they generate 70% of the nation’s export revenue.

He said 85% of domestic companies outsource apparel and earn 25% of prices of products.

Experts said there should be supporting policies in terms of finance, technology, manpower, design and material to help businesses change their production and trading methods.

When enjoying those supporting policies, businesses may shift their production from outsourcing to Free on Board (FOB), Original Design Manufacturer (ODM) and Original Brand Manufacturer (OBM).

Almost all domestic firms said careful preparations are needed to boost exports to key markets including the United States and Japan, which are the two biggest importers of Vietnamese apparel and member states of the Trans-Pacific Partnership (TPP) agreement.

Vietnam will get tariff exemptions for apparel exports to other Pacific Rim nations in the next few years. This is an advantage for the ASEAN country to enhance its competitiveness over other major apparel exporting countries like China and Bangladesh.

Opportunities await Vietnamese exporters

Though Vietnam’s exporters are facing many challenges, the ASEAN Economic Community (AEC) and new free trade agreements (FTAs) Vietnam has signed are opening up opportunities for them to increase outbound sales.

According to the Ministry of Industry and Trade, Vietnamese shipments to the markets involving FTAs to which Vietnam is a signatory account for a fraction of their total imports. This means there is still much room for Vietnam’s goods to enter these markets.

Total import turnover of South Korea in 2014 was US$525 billion while Vietnam exported US$7.14 billion (1.4%) to this Northeast Asian country.

Also in 2014, the Eurasian Economic Union (EEU) imported US$394 billion worth of products, of which Vietnam made up US$1.96 billion, or only 0.5%.

The European Union (EU), the second biggest export market for Vietnam, imported US$27.9 billion worth of goods from Vietnam in 2014. However, goods from Vietnam were equivalent to only 1.25% of the EU’s total imports.

Commitments to market openness under trade deals will open the door wider for Vietnamese goods to enter many foreign markets.

Of US$5,094 billion in combined imports of Trans-Pacific Partnership (TPP) member states in 2014, around US$58 billion (1.16%) was from Vietnam.

Total imports of South Korea, EEU, EU and TPP countries amounted to US$8,245 billion, Vietnam accounted for a small 1.15%.

Vietnamese enterprises need to meet origin requirements and improve their production capacity if they want to ship more goods to foreign markets.

The ministry’s report showed falling export prices and volumes of many major farm produce and minerals in recent years as well as the slump in crude oil prices have greatly impacted the country’s export growth.

Vietnam exported an estimated US$162.4 billion worth of products last year, up 8.1%. Of which, agro-aqua-forestry products contributed 12.7%, down 6.7 percentage points year-on-year.

Declining export prices and volumes resulted in a turnover shortfall of US$4.65 billion, showed statistics of the ministry.

The export falls of major products were caused by abundant supplies and fiercer competition from other export countries including Thailand. In addition, many countries have weakened their currencies against the U.S. dollar to promote exports and taken measures to protect their agro-aqua-forestry sector.

Vietnam did not realize the export growth target last year with a growth rate of only 8.1% but expected growth of 10% this year. In the 2016-2020 period, the country’s average export growth target is 11% a year.

Incentives specified for auto industry

The Government has issued a decision specifying incentives relating to finance, trade promotion, land and taxation for the auto industry, a report on the Government’s portal chinhphu.vn said.

Enterprises can take out loans from Vietnam Development Bank to invest in auto parts production and car assembly projects, according to a decision, which is issued to implement Vietnam’s automotive industry development strategy to 2025 with a vision towards 2035 and the master plan on Vietnam’s automobile industry development by 2020 with a vision up to 2030.

Companies which are part of the global supply chain for production, parts or car exports can enjoy export credit. Meanwhile, manufacturers of priority vehicles will get backing on trade promotion.

Besides, government agencies, organizations and individuals who purchase agricultural multipurpose minivans with loading capacity up to three tons and farm vehicles will be supported in line with the Government’s Decision 68/2013/QD-TTg, which is aimed at mitigating losses in the agriculture sector.

The Government will give financial support for government procurement, development investment credits and projects using priority vehicles.

Furthermore, goods imported to create fixed assets for auto and auto parts production or assembly projects at industrial zones, economic zones and hi-tech parks will enjoy preferential import tariffs. For locally-made auto parts meeting quantity and quality requirements, manufacturers will be subject to the import tax ceiling regulated in the tax commitments Vietnam has made.

The Government will apply Most Favored Nation (MFN) import duties on prioritized and locally made vehicles while the nation will also respect its tax commitments to free trade deals. The Government will decide specific preferential tax rates for prioritized car production projects with the capacity of 50,000 units a year and several auto parts projects.

Investors of auto parts production projects will enjoy land incentives in line with incentive policy for supporting industries. The Government will consider and decide land rent reductions or exemptions for large-scale projects.

Aside from incentives mentioned above, the Government will provide more support for large-scale projects on a case-by-case basis.

Luxury cars sell well last year

A number of luxury auto firms and distributors in Vietnam reported strong sales growth last year when demand was way beyond expectations.

Porsche for the very first time unveiled its sales results in the Vietnamese market. According to Prestige Sports Cars Co Ltd, the official Porsche importer and distributor, 235 Porsche cars were delivered to buyers in Vietnam last year, two times higher than in 2014 and far beyond Porsche’s projection.

The increase was much higher than the year-on-year rise of 15% registered by Porsche for the Asia-Pacific region last year when 5,583 Porsche cars were sold.

The selling prices of Porsche cars range between nearly VND3 billion (US$135,000) and VND10 billion per unit on the domestic market.

Mercedes-Benz Vietnam, which holds the biggest luxury car market share in Vietnam, sold more than 3,600 units last year, surging 50% compared to the previous year.

BMW posted a year-on-year sales rise of 40%, marking the ninth consecutive year of positive growth. BMW’s official importer and distributor in Vietnam, Euro Auto, said it recorded the highest-ever sales volume in this market last year.

Audi also reported two-digit sales growth in 2015 but did not disclose the number of cars it sold. Lexus achieved an impressive result with more than 960 units sold, three times higher than in 2014.

Lexus has been officially distributed in Vietnam for over two years with prices starting from nearly VND2.5 billion per unit.

Priced between VND2.7 billion and VND4.5 billion per unit, Infiniti sold hundreds of units last year and saw sales soaring a staggering 174% year-on-year. The first showroom and service center for this Japanese brand has been opened in HCMC and a facility of this type is planned in Hanoi late this year.

According to auto traders, Vietnam’s premium auto segment almost reached 7,000 units last year compared to the annual average of 4,000-5,500 units in previous years. Most of the luxury cars in Vietnam are imported.

According to the General Statistics Office, Vietnam spent about US$3 billion importing completely built-up (CBU) autos last year, up a hefty 87.7% year-on-year. Luxury autos made up a considerable proportion of the total.

Competition in the luxury auto segment has intensified as more new models have been introduced to local buyers.

Despite many taxes and fees slapped on CBU autos including luxury models, more auto brands have come to Vietnam. Italy’s Maserati made its first public appearance in Vietnam late last month with the first showroom opened at 1-5 Le Duan Boulevard in HCMC.

Authorized by Maserati Asia, Auto Modena sells four car models in Vietnam, namely Ghibli, Quattroporte, GranTurismo and GranCabrio at the Maserati 3S showroom, with prices ranging from VND4 billion to VND10 billion per unit.

In Vietnam, the Italian car brand will compete with other luxury brands from Europe like Bentley, Porsche, Audi, BMW and Mercedes-Benz.

The new calculation of special consumption tax on imported auto applied early this year will push up prices of autos, especially luxury ones. Besides, the tax authority has proposed a high special consumption tax rate on autos whose capacities are over 3.0 liters.

Nevertheless, traders said wealthy customers are willing to pay more to own cars they like.

Porsche remains optimistic about the market though it said 2016 is a year full of challenges.

According to Andreas Klingler, general director of Prestige Sports Cars Co Ltd, the company will strive to offer competitive prices and introduce new products.

Nestlé joins ice cream market

Nestlé has begun a foray into Vietnam’s ice cream market with the launch of Milo and Kit Kat ice cream products imported from Thailand.

Nestlé ice cream products in Vietnam include Milo Chocolate, Milo Magma, Kit Kat Chocolate and Kit Kat Green Tea. These items are now present at FamilyMart and Ministop convenience stores and will be made available at traditional sales channels and supermarkets in HCMC in the coming time.

According to Nestlé Vietnam, Vietnam’s ice cream market achieves an annual growth rate of 10%. The ice cream market in Vietnam holds much growth potential, especially in the upmarket segment, with consumption of five ice creams per person compared to 12 ice creams in Thailand.

Nestlé is one of the major ice cream producers with brands like Milo, Kit Kat, Edy’s, Movenpick and Nestlé Extreme. In Vietnam, it is better known for chocolate and cereal beverages, coffee, tea and seasoning sauce.

Ice cream products of local and foreign brands now available in Vietnam include Vinamilk, Kido, Bud’s, Baskin-Robbins, Fanny, Monte Rosa, Dairy Queen and Swensens.

Passenger transport rises at Tet

The number of passengers travelling by coach, air and train grew by 3-10% during the Lunar New Year holiday (Tet) compared to the same holiday last year, the Ministry of Transport said on February 15.

Trains transported more than 175 million passengers during Vietnam’s longest holiday that took place from February 6 to 14, up 6.35% year-on-year.

To meet surging demand, Vietnam Railway Corporation (VRC) arranged a total of 175 passenger trains on the north-south line, increasing 11%, and 454 for shorter routes, up 10% over the same period last year.

Meanwhile, airlines carried 1.92 million passengers, up a staggering 24.4% during the Tet break against Tet in 2015, with the number of air passengers amounting to 906,100, inching up 21.2% versus last year.

Airports across the country handled more than 14,200 take-offs and landings on the special occasion, rising by 22.1%.

The ministry reported that 408 traffic accidents killed 300 people and injured 380 others during the nine-day holiday.

Of these, some 403 road accidents left 297 dead and 376 injured, falling by 122, 11 and 129 against the same period last year respectively.

In the period, five railway accidents claimed three lives and injured four people, dropping by five accidents and six deaths versus 2015.

Traffic police imposed fines of VND7.7 billion on more than 27,600 violators nationwide during the holiday, as well as detained some 76 autos and more than 7,300 motorcycles.

Cat Linh-Ha Dong railway nears completion

The Cat Linh-Ha Dong elevated railway is scheduled to be put into trial operation in October this year and officially launched on December 31 this year, General Director of Railway Project Management Unit Le Kim Thanh said.

He said that 70 percent of the railway project had been completed since it broke ground in September 2010. Thirty percent of the project was finished in 2015 alone.

The management board of the project was making efforts to finish installing girders by the middle of April while stations and a depot were set to be completed in June to install facilities by the end of September, Thanh added.

To speed up the project's progress, the Ministry of Transport recently asked the Railway Project Management Unit, consultant firms and the contractor to commit to pledges in the contract and meet the project's deadline.

Last October, in preparation for the railway's official launch, a model of the Cat Linh-Ha Dong elevated railway went on display to allow people to give feedback. The feedback will be taken into consideration and serve as a foundation when revising the trains' design.

The Cat Linh-Ha Dong elevated railway, which will stretch over 13km, will have 12 stations and a depot linking Dong Da district's Cat Linh street and Ha Dong district's Yen Nghia bus station.

Once completed, the trains, which are being manufactured by China's Beijing Subway Rolling Stock Equipment Ltd., will be able to serve up to 2,110 passengers with an average speed of 35km per hour and a maximum speed of 80km per hour.

Trains with six to eight carriages each will run every two minutes from 5am to 11pm every day.

Over 900,000 travel by train during Lunar New Year festival

The railway sector served more than 900,000 passengers during the Lunar New Year festival from January 24 to February 14, up 10.3 percent annually.

According to the Vietnam Railway Corporation (VNR), total revenue during the period neared 393 billion VND, a year-on-year rise of 18.35 percent.

From February 6 to 14, the VNR operated 175 north-south trains, up 11.1 percent and 405 trains to certain areas, marking a 10 percent increase over last year’s same period.

Nearly all trains ran on time and offered better services.

Kien Giang: various ways to combat drought, saltwater intrusion

The Mekong Delta province of Kien Giang is working to cope with drought and saltwater intrusion, with a focus on developing and upgrading irrigation works to ensure 2016 crops grow efficiently.

The province has spent over 100 billion VND (4.47 million USD) dredging canals, upgrading key irrigation facilities and hastening construction of other works in major rice cultivation zones.

It has enhanced management of and effectively operated existing anti-salinity dykes while building temporary dykes along canal routes to regulate fresh water for farming.

The Ministry of Agriculture and Rural Development (MARD) directed local authorities to advance over 235 billion VND to over 34,000 farmer households to help them re-invest in production after recent losses caused by natural disasters.

Over 34,000 ha (or 9.4 percent) of the rice farms in the winter-spring crop of 2015-2016 in Kien Giang were damaged, mostly in An Bien, An Minh, Vinh Thuan and U Minh Thuong districts.

Rice farmers were instructed to switch to crash crops that require less water in areas with water insufficiency.

The provincial People’s Committee asked lower-level authorities to keep a close watch on water resources, flood tides, saltwater intrusion, salt concentration, drought and flooding, so they could keep locals up-to-date on related information and help them adapt to the disasters.

Drought and saltwater intrusion have worsened in the Mekong Delta this year, threatening rice crops and residents’ incomes.

MARD said this is the worst saltwater intrusion so far in the region, which is the rice hub of Vietnam .

Salinity in the Vam Co, Tien and Hau rivers and other rivers near the West Sea is higher than usual. Saltwater has intruded upstream 50-60km into the mainland, and even 93km in the Vam Co River’s neighbourhood – about 15-20km deeper than in previous years.

Drought and salinity are likely to last to the end of this year’s dry season, with the fiercest being in late February, said the Vietnam Irrigation Science Institute .

Its chapter in the southern region forecast that many areas in the Mekong Delta region will also experience similar situations, which will seriously affect agricultural production and aquaculture .

In the winter-spring 2015-2016 crop, more than 339,200ha of rice in coastal Mekong Delta provinces has been prone to saltwater intrusion and drought, accounting for 35.5 percent of those localities’ rice cultivation areas and 21.9 percent of the region’s total rice areas. Of these, 104,000ha were seriously affected.

The National Centre for Hydro-meteorological Forecasting said saltwater intrusion has already reached alarming rates in Ca Mau, Kien Giang, Ben Tre and Tra Vinh provinces.

Trees planted to green up Hanoi-Lao Cai highway

A ceremony was held on February 19 in the northern mountainous province of Lao Cai to launch tree-planting activities this year as part of a project to plant perennial trees along the Hanoi-Lao Cai highway.

The project, supported by the UN collaborative initiative on reducing emissions from deforestation and forest degradation in developing countries (UN-REDD), aims to replace former cassava plantations with woodlands on nearly 4,000 ha.

Four districts and towns in Lao Cai have been selected to take part in the green project.

In 2015, with support from UN-REDD, residents in the target localities planted 200ha out of the planned 4,000ha.

Lao Cai authorities set a goal to increase local forest coverage to 56 percent by 2020. As such, 7,000ha of woodlands will be formed in the province this year.

Youth launch Tree Planting Festival in Ha Tinh

More than 1,000 young people and residents joined a Tree Planting Festival in memory of late President Ho Chi Minh on February 19 in the central province of Ha Tinh.

The event was jointly launched by the provincial People’s Committee and the Ho Chi Minh Communist Youth Union (HCMCYU) Central Committee.

Addressing the event, First Secretary of the Committee Nguyen Dac Vinh said in recent years, young people across the nation have actively participated in planting trees and forests.

Between 2013-2015, over 2,000 hectares of forest and 22 million trees of all kinds were planted and taken care of by HCMCYU members and young people nationwide, Vinh said.

Deputy Minister of Natural Resources and Environment Vo Tuan Nhan emphasided the importance of environmental protection, and climate change adaptation and hailed the proactive role of the Youth Union in this work.

On this occasion, some 10,000 trees were planted along the coastal areas in Cam Linh commune, Cam Xuyen district.

The HCMCYU Central Committee also presented 20 scholarships to outstanding students and 20 gifts to needy households in the district.

Previously on February 15, President Truong Tan Sang beat the ceremonial drum to kick off the national Tree Planting Festival 2016 in Hoang Khai commune, Yen Son district, northern Tuyen Quang province.

Last year, Vietnam planted 246,500 hectares of forest and involved local people to participate in the management of about 6.7 million hectares of forest.

Exports of forestry products hit over 7.2 billion USD in 2015, a year-on-year increase of 10.2 percent.

Tra Vinh to continue work on major embankment projects

The third phase of two embankment projects in the Mekong Delta province of Tra Vinh will begin soon, the local Department of Agriculture and Rural Development announced.

Both projects aim to prevent landslides and saline intrusion, which have long caused problems for residents of Tra Cu district’s Dinh An town and Duyen Hai district’s Hiep Thanh commune.

As such, 30 billion VND (1.35 million USD) will be used for the construction of another 300 metres of a 910m riverbank embankment in Dinh An town, whose construction will cost 190 billion VND (8.55 million USD).

Meanwhile, almost 350m of sea dyke in Hiep Thanh will be built for 30 billion VND. The sea dyke, worth more than 225 billion VND (10.12 million USD), is more than 2km long.

Hiep Thanh is most vulnerable to landslides and saltwater intrusion in Duyen Hai, with 250 households residing near the dyke.

Ha Tinh: Mai Hac De’s temple, square under construction

The upgrade and building of Mai Hac De’s temple and square began in Loc Ha district in the central province of Ha Tinh on February 19.

Covering more than 7,000 square metres in Mai Lam village, Mai Phu commune, the temple is currently under renovation. New buildings will occupy nearly 1,000 square metres in the area.

Meanwhile, the building of the 4.58ha square, which contains a 10.8m bronze statue of Mai Hac De, is underway in Nam Son village, Thinh Loc commune.

The construction will cost 105 billion VND (4.7 million USD), with 50 billion VND (2.25 million USD) sponsored by Vingroup.

Hero Mai Thuc Loan, who later became King Mai Hac De, has been honoured for his leadership during the Hoan Chau Uprisings. The historic fight against foreign aggressors for national liberation took place more than 1,300 years ago.

VN works to contain animal foot-mouth disease

The Ministry of Agriculture and Rural Development has approved a national programme to prevent foot-and-mouth disease outbreaks among animals between 2016 and 2020.

The ministry plans to zone off areas to contain the disease, particularly at border and Central Highlands provinces, by providing vaccination to 80 percent of cattle, and expanding disease-free regions such as districts and cities in Nam Dinh and Thai Binh provinces.

Annually, it will review and propose appropriate vaccines based on the situation in separate areas. For regions prone to the disease, the ministry will ensure cattle are vaccinated twice per year.

A database system will be set up to trace the origins of the cattle and examine the transport of animals and animal products at localities in accordance with the Veterinary Law.

It is also essential to raise public awareness about the disease.

The central budget will assist border and Central Highland districts in buying vaccines against foot-and-mouth disease.

Domestic businesses and foreign-invested firms must ensure they have funds for the vaccines.

The growth of three-colour mangoes in Mekong Delta province

Since switching to growing mangoes of three colours, farmer Nguyen Hoang Du in the Mekong Delta province is no longer worried about finding a market for them.

Instead of seeking ways to sell the mangoes, Du now just stays at home, waiting for the businesses or trade dealers that visit his property to order a large quantity of mangoes for export.

The mango skin changes from green to a reddish purple when it ripens, so locals have named it the "mango of three colours."

With seeds being imported from Taiwan, this mango variety has grown popular in the Mekong Delta region over the past five years due to its large size, pretty colours and pleasant taste. The fruit is also known as the "Taiwanese mango."

The trees grow well, flowering easily and bearing fruit 18 months after being planted. Each mango weighs between 450g and 700g on average, with the largest ones reaching nearly 2kg.

Due to flagging demand, Du and many other farmers in Cho Moi district's Binh Phuoc Xuan commune decided to get rid of their traditional plants and switched to growing three-colour mangoes five years ago.

"We should grow what the market needs, not just what we think is good," Du told VTC online television.

"Consumers now favour the mango of three colours due to its large size and colourful appearance, even though it may not be as sweet as other kinds of mangoes," he said.

During peak season, an estimated 100 tonnes of mangoes are exported each day.

They cost some 40,000 VND (USD 1.8) per kilogramme.

Each hectare of mango trees produces some 10 tonnes of fruit, bringing in an average income of 120 million VND per hectare per year.

"The living conditions of my family have greatly improved thanks to growing this plant," Du said.

The mangoes have quickly gained favour amongst consumers for meeting not only their taste preferences but also the national Good Agricultural Practice (VietGap) standards.

Chairman of the communal People's Committee Huynh Van Cuong said local authorities initially provided financial aid worth 50 million VND to help analyse samples of land and water and organise training sessions for the farmers to help them adapt to VietGap's standards.

The province will invest more than 3 billion VND to build refrigerated storehouses to help farmers preserve their fruits better, he said.

Thai Nguyen province targets 27 billion USD earning from export

Thai Nguyen province has targeted a 27 billion USD earning from export by 2020, becoming a leading exporter in the northern mountainous region.

Exports are expected to grow by 9 percent per annum, with export turnover per capita averaging 20,000 USD per year, by 2020.

To that end, the province has come up with a strategy to produce key items for export, including, amongst others, electronic and hi-tech products by Samsung faciliites based in Yen Binh industrial park, and varieties of dried tea.

As the nation’s second largest tea grower, by 2020, Thai Nguyen aims to ship 10,000 tonnes of tea, if it can maintain growth of 13 percent annually.

The locality is also expanding its marketing of mechanical products to Europe and Latin America, hoping to raise its export by 14 percent per year.

Nguyen Ngo Quyet, Director of the provincial Department of Industry and Trade, said the local export revenue per capita neared 14,000 USD last year, a five-fold increase from the country’s average.

Major export markets include the US, the European Union, Taiwan (China), Japan, Russia and Eastern Europe.

To raise exports, the province will continue shipping goods to new markets, such as Latin America, Africa, the Middle East and Western Asia.

More capital will be poured by the province into e-commerce and increasing connectivity with the northern mountainous and Red River Delta regions, particularly Hanoi, in order to supply raw materials from the agro-forestry-fisheries industries and consumer goods for domestic consumption and exports.

Hau Giang records lowest rice production cost in Mekong Delta

Spending 2,802 VND on producing one kilogramme of rice, the Mekong Delta province of Hau Giang recorded the lowest production costs in the region during the 2015-2016 winter-spring crop, according to Ministry of Finance.

The result was spurred by advanced technology transfer, high-quality breeding and input reduction. In addition, the province paid attention to equipping machines and facilities for production while investing in agricultural infrastructure such as sluice gates and irrigation channels.

According to Director of the provincial Department of Agriculture and Rural Development Nguyen Van Dong, production costs for the winter-spring crop were slashed by 25 percent compared to previous seasons, with a 15-percent cost reduction thanks to mechanisation investment, 10 percent as a result of the application of integrated pest management (IPM) and 5 percent due to upagraded irrigational systems.

Thanks to the province’s efforts, local farmers reaped a successful crop despite unfavourable weather.

During the 2015-2016 winter-spring crop, Hau Giang province grew nearly 80,000 hectares of rice. About 5,000 hectares were harvested with an average productivity of seven tonnes per hectare.

With sustainable yield, prices and production costs, farmers earned more than 20 million VND (894.6 USD) in profit per hectare.

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