Footwear sector set to step up a level in 2018

Plenty of favourable factors in 2018 are seen as a boon for the footwear sector to get more orders, increase export market shares, and achieve set targets, according to the Vietnam Leather, Footwear, and Handbag Association (Lefaso).

Footwear has been a consistent presence among the top five key export products of Vietnam in recent years. Last year’s exports in the sector reached US$18 billion, up 10.7% on a year earlier, with numerous products being exported to many countries around the world. The US has always been the largest leather & footwear export market, accounting for 34% of the total export value, trailed by the EU, the Republic of Korea, Japan, and China.

Under the Vietnam-EU Free Trade Agreement (EVFTA), which is set to be signed in mid-2018, Vietnamese footwear products exported to the EU will have a deferential tariff of 3.5-4.2% compared to their strongest rival – China. Once the agreement comes into effect, the tariff will drop to zero. Similarly, handbags will enjoy a zero percent import tax rate.

The National Association of Manufacturers of the US is accelerating the adoption of a tariff bill, which is expected to reduce some import tax lines, covering dozens of footwear and garment products imported from Vietnam.

The US Skechers Group is studying the viability of a big project employing around 20,000 Vietnamese workers. It is hoped the project will create a new wave of investment after a quiet year in the footwear sector.

The group distributed more than 200 million products last year and plans to shift its investment in production from China to Vietnam. It has to date increased investment southern provinces and cities and is destined to invest in the north in future. Hai Duong is a possible destination for its projects, which will be estimated at between US$700,000 and US$1 billion.

A representative of Lefaso says that in addition to the advantages forecast this year, the 4.0 industrial wave and the problem of raising labour productivity are one of major challenges facing the sector. At present, 75% of footwear businesses are in a fix in their investment in automatic machinery only 20% use such equipment on a small scale, while less than 5% of businesses are planning to automatise.

Furthermore, the protectionism policies adopted by some importers also presents challenges to the sector, for instance, Brexit is having a direct impact on domestic footwear production.

To cope with these difficulties, Lefaso warns domestic businesses to act swiftly to remove weaknesses, such as high labour costs, by relocating factories to areas with abundant human resources, expanding investment in developing the support industry to improve added value and production.

Such businesses should focus on producing goods of an average to high value, rather than low grade products, to sharpen their competitive edge.

This year, the association will be actively involved in consulting with the State agencies issuing policies related to business operations to ensure the sector fulfills a target of US$20 billion, a year-on-year rise of 10%. 

Demo Prosound Vietnam 2018 festival to be held in HCM City     

Twenty-nine leading brands of professional audio-visual equipment will join hands in an upcoming event Demo Prosound Vietnam 2018 held in HCM City’s Tan Binh District from March 22-23.

The 2nd Demo Prosound Vietnam 2018 is an annual audio-visual festival for music lovers and distributors of audio-visual equipment.

The two-day festival will open from 9am to 10pm at the Military Zone 7 Stadium on Hoang Van Thu Street.

The festival is a non-profit programme organised by local distributors of professional audio-visual equipment and services.

It aims to create opportunities for businesses to exchange information and promote investment co-operation in audio-visual equipment and services.

During the event, 29 leading brands will display their latest products and offer special deals. Of the figure, 12 world-renowned brands will hold demo shows.

Visitors can enjoy professional light, sound and visual performances, and also buy second-hand and discounted products.

Huynh Huu Tai, head of the event’s oganisation, said: “The event aims to raise people’s awareness about professional sound systems.”

Last year, the festival was held for the first time in the city, attracting more than 2,500 people.

The organisers expect about 7,000 visitors this year.

GoBear, KLOOK seek to attract tourists to East Asia     

Asian insurance and financial metasearch engine GoBear has partnered with travel company KLOOK to launch a mini game series for Vietnamese travelling to East Asia.

To take place this month, it is targeted at travellers who desire to see the picturesque beauty of cherry blossoms in Taiwan, South Korea and Japan.

The mini game is available at www.gobear.com/vn/campaign/hoaanhdao with a total prize pool of over VND130 million (US$5,700).

Participants can win prizes sponsored by KLOOK, including a VND20 million voucher for KLOOK products; 30 travel kits; 30 vouchers for 4G SIM cards for use in Taiwan, South Korea, and Japan; 30 mobile prepaid cards; and over 400 vouchers for three-day WIFI 4G use in those places.

Bao Nguyen, GoBear Vietnam’s country director, said: “With our partnership with KLOOK, we want to offer our users an opportunity to experience convenient travel products for their spring trips to Taiwan, South Korea and Japan during the cherry blossom season.

“This is also a chance for GoBear to share with users the importance of international travel insurance.”

Since it came to the country in December 2016 with products - comparisons of credit cards, personal loans, travel insurance and fixed deposits - as well as educational pages for unsecured loans, GoBear Vietnam has landed over two million visitors.

FPT Telecom plans 80% dividend payout for 2017     

FPT Telecom Joint Stock Company (FPT Telecom) plans to make an 80 per cent dividend payout for its performance in 2017.

The final decision will be made at the company’s upcoming online annual shareholders’ meeting held in both Ha Noi and HCM City, scheduled on March 28.

The dividend payout rate includes 30 per cent in cash (VND3,000 or 13 US cents per share) and 50 per cent in bonus shares.

The payment will be extracted from the company’s undistributed post-tax profit worth VND1.24 trillion ($55.1 million).

FPT Telecom has made an advance of 10 per cent dividend payment for its 2017 performance. For the next cash dividend payout, which will be carried out in March, the company has finalised the list of beneficial shareholders.

FPT Telecom will complete its bonus-share dividend payout in 2018. The bonus shares will be issued at a 2:1 ratio and will raise the firm’s charter capital to VND2.26 trillion from the current VND1.5 trillion.

After making its dividend payment, FPT Telecom’s undistributed post-tax profit will fall to VND185 billion from VND1.24 trillion made in 2017.

In 2018, FPT Telecom targets VND8.67 trillion worth of total revenue, a yearly increase of 13.3 per cent. Major contributions to its revenue may come from telecommunications (VND8.1 trillion) and advertisement (VND570 billion).

The company predicts its pre-tax profit to gain 14.6 per cent year-on-year to VND1.4 trillion in 2018. FPT Telecom will also start constructing its VND1-trillion data centres in Tan Thuan District and District 1 of HCM City and in Cau Giay District of Ha Noi.

FPT Telecom also plans to invest in the marine cable project AAE-1 with the military telecommunications group Viettel and introduce new products to the market. 

Ri-Yaz Group to manage VN’s first luxury hotel     

Ri-Yaz Hotels and Resorts of Malaysia has signed a contract to manage Altara Suites, the first luxury apartment brand of Alphanam Real Estate Joint Stock Company.

This co-operation marks the next step in the rapid development of the Ri-Yaz Group in Viet Nam.

Altara Suites’ apartments are designed in a post-modern style by international designer Salvador Perez Arroyo. The hotel is located adjacent to the beach, right in the heart of Da Nang City. The apartments offer beautiful views of the most famous attractions including My Khe Beach, Son Tra Peninsula and the dynamic city.

Besides hotels and resorts, Ri-Yaz Group now operates a range of hospitality management schools in association with prestigious training institutions in the UK and Switzerland. In future, the group wants to work with Alphanam Group in establishing a hospitality management school in Viet Nam, with the aim of building a better tourism training environment in the country, relieving the “thirst” for skilled professionals in this field.

Ri-Yaz Hotels and Resorts has signed a contract to manage Altara Suites, the first luxury apartment brand of Alphanam Real Estate Joint Stock Company. — VNS Photo

“We are excited on embarking this new journey with Alphanam Real Estate and look forward to building a strong fruitful relationship, overcoming challenges and achieving greater heights together,” said Dato Shaheen Shah, Group MD of Ri-Yaz Group.

With this strategic collaboration, Alphanam Group has shown its commitment to continually develop its service quality to meet regional standards. The partnership is based on the assurance of utmost values of respect and integrity, with the aim of bringing Altara Suites among the top 10 serviced apartment hotels in Da Nang.

“With seven hotels becoming operational in the next five years, we hope to be your preferred leisure and business partner. Altara Suites came about from our devotion to give back the best investment to you, from our wish to bring the most professional working environment to our staff and to bring the guests the most desirable place to stay,” said Nguyen Ngoc My, deputy general director of Alphanam Real Estate Joint Stock Company.

TT Group adds hospitality member     

The industry-real estate-finance conglomerate T&T Group JSC officially launched its hospitality member, T&T Hospitality Management Limited Company, last week.

Through the launch of this hotel management brand, T&T Group is gradually completing the ecosystem in its real estate development chain, aiming to exploit and manage the professional real estate system by international standards.

Carl Johan Lindholm, general director of T&T Hospitality, said T&T Hospitality operates from the perspective of a harmonious unit of interest for the investor and owner, from project formulation to completion of the project to ensure that it meets the international five-star standard.

T&T Hospitality is not merely a consultancy but also a quick strategist in maintaining the viability and profitability of real estate through the promotion of rental properties and the sale of residential properties and real estate resorts, Johan added.

T&T Hospitality aims to provide a diverse range of hotel and resort products, each of which has its own unique character but is connected by a commitment to providing the best experiences for customers.

T&T Hospitality was licensed in early January 2018 with chartered capital of VND100 billion (US$4.4 million). Prior to that, T&T Hospitality prepared its financial capacity as well as set up its professional staff according to international standards to bring maximum benefit to customers. The real estate development model that T&T Hospitality is aiming for is a comprehensive and sustainable model developed by many well-known brands around the world.

Founded in 1993, T&T Group JSC operates in real estate, finance, industry, sports, and import-export trading market segments. Its real estate projects include residential units, trade centres, office buildings, resorts, marine eco-tourism areas, and urban areas and industrial zones. The company currently has total assets of VND20 trillion and chartered capital of VND5 trillion. 

Investors interested in Vietnam’s commercial property

Commercial property is attracting much interest from investors in Vietnam’s property market, which is still an attractive destination for foreign real estate firms.

Real estate services firm Jones Lang Lasalle (JLL) said hundreds of millions of USD is waiting to be poured into almost all segments of Vietnam’s property market, including housing, office, retail, hotels, and industrial zones. Investors are from many countries such as Japan, the Republic of Korea and Singapore.

Country head of JLL Vietnam Stephen Wyatt said housing is usually the most attractive segment, but investors are switching their attention to commercial property, especially grade-A office projects with ideal locations and high growth potential.

Office rents in Vietnam are currently much higher than in other countries in the region, reflecting a shortage of office spaces. Meanwhile, more and more foreign investors have been entering and setting up offices in the country, he noted.

Echoing this view, Tu Thi Hong Anh, Director of the Commercial Leasing at Savills Vietnam, said the vacancy rate in the office-for-lease market of Ho Chi Minh City has declined to a very low level, pushing office rents to the highest point since 2009.

She added office rents could soar by up to 20 percent at some grade-A buildings in 2018 and continue to rise in downtown areas in 2019.

There is very big demand for new high-quality buildings in good locations, General Manager of Cushman & Wakefield Vietnam Alex Crane said, noting that the pressure of hunting for vacant space will last until the end of 2019.

Meanwhile, the retail property segment also boasts huge potential.

Mai Vo, Director of Retail Services of Cushman & Wakefield Vietnam, said eating and drinking, fashion and healthcare services will lead the development of the retail sector in the next two years, so the market needs more retail space. In downtown areas, the demand for shop spaces remains high due to fierce competition among brands, boosting retail space rents, particularly in HCM City and Hanoi.

Investors also pay special attention to hotel and industrial zone projects amidst the sharp increase of tourists to Vietnam and continual industrial growth.

There are opportunities in the Vietnamese market for both existing and new investors to increase their market share, Country head of JLL Vietnam Stephen Wyatt noted.

Van Don int’l airport planning adjustments announced

The Ministry of Transport has announced its decision adjusting the planning scheme of Van Don International Airport by 2020 with a vision towards 2030.

Under Decision No. 497/QD-BGTVT dated March 15, 2018, Van Don in the northern coastal province of Quang Ninh will be an international airport, serving both civil and military flights.

From now till 2020, it will house a level-4E airport and a level-II military airport, and a 3.6km long runway. 

With an annual capacity of 2-2.5 million passengers by 2020, which is expected to hit 5 million by 2030, Van Don International Airport is designed to receive Boeing 777/787/747-400, Airbus A350 and similar aircraft. 

Set to cover more than 326ha as planned by 2020, the airport comprises support facilities, a two-module terminal and functional areas. A cargo terminal is expected to be built by 2030 with a capacity of at least 51,000 tonnes. 

Invested by SunGroup, the project began 2015 with combined capital of about 7.5 billion VND (330,000 USD). This is also the first airport constructed by capital mobilised by a locality.     

The airport is scheduled to be put into service in the second quarter of this year.

In 2017, Quang Ninh accommodated 9.87 million tourist arrivals, including 4.28 million foreigners, up 18 percent and 23 percent year on year, respectively.

The locality, which hosts the National Tourism Year 2018, hopes to welcome 12 million visitors this year, including five million foreigners, and earn 22 trillion VND (968 million USD).

Labor-related laws need amending under CPTPP

here are still some weaknesses in labor laws and institutions concerning labor relations in Vietnam that need to be amended to make them compatible with labor provisions in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), said ILO.

Chang-Hee Lee, director of the International Labor Organization (ILO) Vietnam, said CPTPP, like the EU-Vietnam free trade agreement, is a new-generation FTA which places a great emphasis on labor rights and environmental sustainability to ensure that the free flow of trade will contribute to sustainable development and enable workers and businesses to enjoy a fair share of economic gains.

New-generation FTAs require member countries to adopt and maintain the rights as set out in the 1998 ILO Declaration in their laws, institutions and practices. They are embodied in eight core conventions of the ILO that underpin the freedom of association and the effective recognition of the right to collective bargaining, the elimination of all forms of forced or compulsory labor, the effective abolition of child labor, and the elimination of discrimination in respect of employment and occupation.

Member states of the ILO, including Vietnam, are bound to respect these rights, which are seen as global rights in modern society.

However, Vietnam is yet to ratify three core conventions (Conventions 87, 98 and 105) related to freedom of association, right to collective bargaining and elimination of forced labor.

The labor chapter of CPTPP is based on the 1998 ILO Declaration. “Putting aside the trade implications, I would like to emphasize that Vietnam should use this as an opportunity to modernize its labor laws and industrial relations system in a time-bound manner,” said Lee.

Although Vietnam has taken steps to meet CPTPP requirements, some weaknesses in labor laws and institutions related to industrial relations remain.

There have been more than 6,000 strikes since mid-1990s and all of them were wildcat strikes, not initiated by trade unions. This is a clear sign that workers do not feel their rights and concerns are addressed and that the process established for resolving problems is not working properly.

It is not uncommon to find in Vietnam that trade union leaders at the workplace are senior managers of enterprises, which is unacceptable in almost all countries. Union rights are workers’ rights, and unions are organizations of workers, free from interference of employers.

By channeling workers’ voices through collective bargaining and social dialogue, trade unions and labor relations system contribute to political and social stability, while contributing to shared prosperity.

“I believe the Labor Code revision and further renovation of labor relations system in line with the 1998 ILO Declaration and in full consideration of the national context will definitely help in this respect,” Lee said, adding that Vietnam needs to move towards the ratification of the remaining three core conventions. The country is already committed to doing so under the EU-Vietnam FTA’s sustainability chapter.

Interchange construction to begin in 2020

Work on An Phu interchange in District 2, HCMC will not begin until 2020 due to complicated procedures.

Traffic congestion has become chronic in this area as this is where HCMC-Long Thanh-Dau Giay Expressway, Luong Dinh Cua and Mai Chi Tho streets intersect.

According to Vietnam Expressway Corporation (VEC) in a document sent to the Ministry of Transport early this month, preparations for the project to get off the ground towards December 2019 will need 15 construction procedures, including seven involving loan re-allocation with the Japan International Cooperation Agency (JICA) and relevant ministries.

As VEC explained, if the interchange starts construction in 2020, the central bank’s assistance would be needed to handle procedures for cost allocation.

The HCMC government wrote to the Ministry of Transport twice last year emphasizing the need to build An Phu interchange to ease traffic congestion in the area.

The city government proposed carrying out the project in phases. The first phrase, which will build a four-lane tunnel, will need an estimated VND1 trillion, with construction costs accounting for some VND800 billion.

To quickly ease traffic at this intersection, the city wants the ministry to soon agree on the construction scale and the phase-one investment that uses JICA’s capital surplus in the HCMC-Long Thanh-Dau Giay Expressway project.

Singapore bank DBS urged to stop financing coal-fired power projects in Vietnam

Change, an environmental protection advocacy organization, has called on DBS, Singapore’s largest bank, to suspend its funding of coal-fired power projects in Vietnam, citing concerns over their severe impact on public health and the environment.

The organization told the Daily that the request had been sent to Peter Seah Lim Huat, independent chairman of DBS Group Holdings & DBS Bank, and Piyush Gupta, CEO of DBS. The bank is considering funding some coal-fired power stations in Vietnam such as Nam Dinh 1, Nghi Son 2 and Vung Ang 2.

According to CHANGE, Vinh Tan coal-fired power project which is partly funded by DBS is causing serious environmental pollution, significantly affecting the health of more than one million residents in Binh Thuan Province.

Local people have suffered from diseases resulting from air pollution such as cardiovascular, respiratory and mental diseases and high risks of lung cancer and stroke.

In addition, the construction and operation of the Vinh Tan Power Center have impacted on seafood farming and processing activities and socio-economic development as a whole in the province.

According to a study by Harvard University, Vietnam will annually have some 19,220 fatalities by 2030 due to coal ash pollution.

CHANGE said it is also disappointed by DBS’s recent move to continue lending to coal-fired power projects in developing countries. The bank had announced to stop funding coal-fired power projects in developed countries but not developing countries, meaning that the Vietnamese have no right to enjoy the clean environment like those in North America or Western Europe.

DBS’s financial support may contribute to boosting greenhouse gas emissions.

According to the report “Developing coal-fired power plants in Vietnam: financial insight” by the Green Innovation and Development Center (GreenID), Vietnam has mobilized nearly US$39.8 billion to generate 13,000 MW of coal-fired electricity. The investment includes US$21 billion sourced from foreign investors and banks (52%), US$6.6 billion from domestic firms and banks (17%) and the remaining 31% from undefined resources.

Besides Chinese and Japanese banks, lenders in the UK, France, Switzerland, Italy and Singapore have financed coal-fired power plants in Vietnam.

Nguyen Thi Hang, coordinator of GreenID, said banks have provided financing for coal-fired power projects to introduce equipment and consulting, design and construction services of companies in such countries to Vietnam.

Le Anh Tuan, deputy director of the Research Institute for Climate Change of Can Tho University, said it is necessary to call for local people to refrain from depositing money at those banks making loans for coal-fired power projects.

Binh Phuoc seeks soft loans for cashew development

Binh Phuoc Province authorities have proposed the Ministry of Agriculture and Rural Development help find soft loans for local farmers to invest in cashew farming, saying a lack of capital has hindered the province’s sustainable cashew development, news site Dan Viet reports.

Speaking at a workshop on cashew, fruit and pepper farming on March 13, Binh Phuoc Province’s vice chairwoman Huynh Thi Hang said most of 150,000 hectares under cashew cultivation in the province was old and of low productivity due to poor soil. Moreover, farmers who are mostly ethnic minority people do not have much capital for intensive farming or replanting cashew trees to increase productivity.

Nguyen Thi Anh Tuyet, deputy director of Binh Phuoc’s Department of Agriculture and Rural Development, told the workshop that the province is in dire need of capital to revamp the crop, as up to 80% of the cashew trees there are old.

Previously, cashew planting was considered a way to reduce poverty, and to cover barely-clad hills, so not many farmers gave due care to their farms, resulting in low productivity, Tuyet said. Cashew output last year fell by half compared to the previous year.

Binh Phuoc has plans to replant around 25,000 hectares of cashew at a cost of around VND20 million per hectare, and develop intensive farming on an additional 41,500 hectares at a cost of VND10 million per hectare.

To fulfill this task, Binh Phuoc asked the agriculture ministry to help farmers access soft loans, including ODA capital and other non-refundable sources. Binh Phuoc needs low-interest or interest-free loans, especially three-year loans for cashew replanting and ten-year loans for intensive farming.

Deputy Minister of Agriculture and Rural Development Le Quoc Doanh upon the above proposals said the ministry would seek approval from the Government. In addition, the ministry would consider some other programs for cashew development in the province, such as infrastructure construction, technology support, and cashew farming restructuring among others.

Three agencies to be merged to form competition committee

The Ministry of Industry and Trade will merge three agencies to form a new national competition committee, heard a meeting of the National Assembly (NA) Standing Committee on March 13.

The three agencies are the Vietnam Competition Authority, the Competition Council and the Office of the Competition Council.

Vu Hong Thanh, head of the NA’s Economic Committee, said the National Competition Committee would be responsible for assisting the Ministry of Industry and Trade in dealing with national-level competition matters, news website Vietnamnet reports.

The merger will contribute to downsizing the State apparatus and improving efficiency while ensuring the committee’s independence and objectivity, he said.

At the meeting, Phan Thanh Binh, chairman of the NA’s Committee on Culture, Education, Youth and Children, said the National Competition Committee should also be responsible for managing State monopoly.

Closing the discussion, Vice Chairman of the NA Phung Quoc Hien asked lawmakers to ensure the committee will also cope with State monopoly.

Job satisfaction may help raise labor productivity significantly

Enhancing the work environment and guaranteeing job satisfaction for employees are regarded as significant factors behind labor productivity growth, heard a seminar on workplace improvement and employees’ satisfaction in Hanoi City last week.

The Government and companies often brings up the topic of labor productivity. However, these enterprises seem not well aware of labor productivity indicators, and do not know how to boost productivity in an effective manner, said Kazuteru Kuroda, an expert at the Japan Productivity Center.

Having taken business surveys into account, Kuroda said the majority of managers lack professional skills to motivate their employees at work.

He stressed investing in technology is merely a contributing factor, but improving the working environment and job satisfaction for employees is a more important factor. This is of great significance, as local enterprises are now faced with limited finances, and technology.

According to him, employers should create good working environments and reward their employees for their achievements in a timely manner. Job satisfaction may soon lead to growth in labor productivity, compared with changes in machinery and equipment.

Nguyen Anh Tuan, head of the Vietnam Productivity Institute, said factors contributing to gross domestic product (GDP) growth include increases in investments, employees, and labor productivity, of which the first two factors have less room for growth. Therefore, the upcoming GDP growth may be heavily dependent on labor productivity.

However, he added, enhancing labor productivity is not seen as a major development strategy among local companies. It is not to mention that many enterprises still maintain the ask-and-give mechanism which hampers their productivity growth.

Kazuteru Kuroda of the Japan Productivity Center also told the Daily that corruption is another factor hindering productivity growth. If the issue persists, it may result in a slowdown in the national economy.

HCMC urged to reduce informal expenses for enterprises

The HCMC government should reduce informal costs by making administrative procedures transparent and improving public services to support enterprises doing business in the city, proposed To Thi Bich Chau, a member of the HCMC People’s Council.

At a council meeting last week, Chau suggested State management agencies in the city should review the costs enterprises must pay for administrative procedures, including both formal and informal expenditures, so that the city government can work out solutions to cut fees.

Pham Quoc Bao, another council member, said the improvement of online public services is an effective solution to cut informal fees. Therefore, the municipal authorities should promote such services this year to help enterprises and local residents.

The HCMC People’s Council members also discussed solutions to reform administrative procedures in the city this year onwards.

Last year, the city saw its economic growth accelerate against the previous year’s growth, but the city still needs greater effort to overcome shortcomings to reach growth targets in the years to come including the removal of informal costs.

The municipal government should ensure the transparency of the business environment to gradually cut informal expenses, reduce officialdom, embezzlement, wastefulness, and improve mechanisms for sectors where corruption and harassment are rampant.

In addition, enterprises should get ready to response to fraud in the implementation of administrative procedures.

Local e-commerce on the steep rise

The Vietnamese e-commerce sector has posted strong growth, and the growth momentum is seen continuing, said business insiders at the Vietnam Online Business Forum last Friday in HCMC.

More than 2,000 guests and representatives of e-commerce companies took part in the forum. The event featured four sessions of discussion and interaction about information connection and sharing, and big issues facing enterprises in online business among others.

Nguyen Thanh Hung, chairman of the Vietnam E-commerce Association, said the Vietnamese e-commerce sector is growing strongly, with last year’s rate put at 25%. Some local companies have managed to engage deeper into sharing-economy models and cross-border services.

At the forum, Gijae Seong, head of Singapore-based Department of Global Sales at Amazon, revealed his company’s development strategy in Vietnam in the coming time, including opening a business channel and export of Vietnam goods. Therefore, Amazon is looking for local producers and exporters.

He added the cross-border e-commerce is expected to grow at 20-30% annually in the next few years. The number of international vendors is on the sharp rise on its platform Amazon.

At the forum, other speakers proposed ministries and agencies in charge of e-commerce should come up with more liberal policies and regulations to make life easier for companies. They should throw their support behind business models that are able to improve the social and economic efficiency and bring benefits to consumers.

Meanwhile, Manh Thi Tuyet Mai, head of the Corporate Tax Policy Division at the General Department of Taxation, suggested solutions to tax management in the e-commerce sector.

She said paper receipts are still used for online purchases, so the taxman is having difficulty determining revenues properly. The department intends to encourage traders to use e-receipts during their online transactions.

Phone exports to China soar

Vietnam’s exports of phones and components rose by 56.6% year-on-year to US$7.33 billion in the first two months of the year, with exports to the Chinese market recording an increase of 12 times in the period.

Data of the General Department of Customs showed phones and components are the group of products that posted the highest rise in export turnover. Besides robust exports to China with a value of US$1.22 billion in the year’s first two months, high export growth was also reported in other markets such as the EU with over US$2 billion (up 42%) and South Korea US$797 million (up 73%).

Meanwhile, January-February apparel exports fetched US$4.12 billion, up 17.3%. Major markets of Vietnam’s apparel were the U.S. with US$1.96 billion (up 15%), the EU with US$552 million (up 13.7%), Japan with US$537 million (up 23.3%) and China with US$177 million (up 46.7%).

Regarding computers, electronic devices and components, China’s imports from Vietnam also surged. Of a total export turnover of over US$4.08 billion in the two-month period (up 22.7%), China made up US$1.14 billion (up 37.2%) and South Korea US$420 million (up 83.8%).

The northern neighboring market also increased imports of footwear from Vietnam as well when accounting for US$227 million (up 30%) of Vietnam’s footwear export turnover US$2.25 billion.

In all, total exports in the past two months were US$34.51 billion, climbing 25.8% against last year’s same period.

According to statistics of the customs, Vietnam imported US$34 billion worth of products in January-February, up 20.4% year-on-year. Up to US$6.73 billion of such a value was spent on importing computers, electronic devices and components (up 41.1%).

Imports of equipment and other components wereUS$4.87 billion (up 5.3%), whereas the import turnover of phones and components was US$2.34 billion (up 30.9%).

After the first two months, Vietnam’s trade surplus was recorded at US$504 million. While the foreign direct investment (FDI) business sector put its surplus at US$4.28 billion, the domestic sector continued to suffer from a sharp trade deficit in the past two months.

Mechanical engineering sector to join global value chain

The Vietnamese engineering sector aims to engage deeper in global value chain and specialised industries that use advanced technologies to make quality products, under a strategy to develop the sector by 2025 with vision toward 2035 recently approved by the Prime Minister.

The sector should work thriftily and efficiently as well as build a professional and disciplined workforce, per the strategy.

Exports are expected to account for 35 percent of total production by 2020 and the proportion will increase to 40 percent by 2030 and 45 percent by 2035.

Under the strategy, focus will be given to developing automobile engineering, agricultural machines, industrial products and electronic appliances, while engineering support companies will be established to provide supplies for production units and to join the global value chain.

Relevant authorities must complete mechanisms to support the mechanical engineering sector like giving preferential taxes and simplifying investment procedures. The policies must aid the support industry and production value chain participation as well as increase domestic production.

The PM ordered the development of basic materials and advanced technologies for the sector. 

Attracting powerful multi-national corporations to invest in the country’s big engineering projects should be paid attention as well. Investment promotion should be prioritised for small and medium enterprises, especially those in the support industry.

The State will help enterprises purchase designs and technologies, and renovate production facilities to improve products’ quality and competitiveness.

Vietnamese rubber firms’ contribution to Cambodia appreciated

The governor of the Cambodian province of Kampong Thom appreciated Vietnamese rubber companies’ contributions to local socio-economic development while visiting them on March 19.

Governor Sok Lu and Vietnamese Ambassador to Cambodia Vu Quang Minh made a fact-finding tour of the Ba Ria – Kampong Thom, Phuoc Hoa – Kampong Thom and Tan Bien – Kampong Thom rubber companies.

The official said the Vietnamese rubber companies in Kampong Thom and other Cambodian localities were established under an agreement between the two countries’ governments. 

Since their foundation in 2007, they have maintained good relations with local authorities and people, created jobs and carried out social welfare activities like building schools and clinics for workers and building Buddhist temples.

Ambassador Minh also lauded the businesses’ efforts to invest in Cambodia, adding that those investments have helped boost the socio-economic development of Cambodian localities.

He stressed that the companies investing in Cambodia’s rubber industry have contributed to not only the two countries’ economic growth but also solidarity and friendship.

Phung The Minh, Director General of the Ba Ria – Kampong Thom company, said Vietnamese rubber businesses in the province have planted more than 52,900ha of rubber trees, more than 21,700ha of which is being extracted with a planned output of 23,700 tonnes of latex in 2018.

The three firms the officials visited own nearly 20,300ha of rubber trees, more than 15,200ha of which has been extracted since 2017 with an expected output of 17,000 tonnes this year. They employ 3,100 Cambodian workers whose salary averages 200 USD per month.

He noted the companies have also ensured welfare for their workers by buying health and accident insurance. They have built three primary schools enrolling nearly 300 students who are children of their workers, opened clinics at rubber farms, and built more than 1,700 houses for workers’ families. Notably, they constructed a pagoda for Cambodian labourers at a cost of 180,000 USD.

Vietcombank continues quest to divest OCB

In an effort to reduce its cross-ownership at local banks, Vietcombank is on route to auction over 6.6 million shares of Orient Commercial Bank (OCB) on April 17, at the starting price of VND13,000 ($0.59) per share.

According to the Hanoi Stock Exchange (HNX), 6,672,444 OCB shares will be made available to investors on the given date, following an earlier bid made last year when the state-owned bank also put 18.9 million OCB stakes (equivalent to 4.85 per cent of the lender’s charter capital) on sale.

Nevertheless, merely 70 per cent of the shares were sold at the time at an average bidding price of VND13,005 ($0.591) per share. After the sale, Vietcombank’s ownership at OCB was trimmed to 3.97 from 4.72 per cent.

The share sale brought Vietcombank some VND171.1 billion ($7.77 million) in value then.

On the over-the-counter (OTC) trading platform, OCB was traded at VND18,900-20,900 ($0.859-0.95) during the past week.

Offloading its holdings at OCB is one of Vietcombank’s ways to comply with the central bank’s Circular 36, which allows commercial banks to hold stakes at no more than two credit institutions or to acquire and hold only 5 per cent of the stakes with voting rights in any other credit institution.

Apart from OCB, Vietcombank currently holds 8.19 per cent of the stakes at Eximbank and 6.97 per cent at Military Bank.

Vietcombank adjusts service charges yet again

Recently, Vietcombank adjusted its banking service charges for the second time, effectively from April 15, after the first alteration of the service charge on March 1, raising controversy among the bank’s long-term clients.

Specifically, Vietcombank publicised its extended announcement regarding the adjustment of its mobile banking service charges. Taken into effect from April 15, the commercial bank would pose a new fee schedule for its SMS banking service named Mobile Bankplus.

Regarding transactions among banking accounts within Vietcombank’s system on the Mobile BankPlus platform, the service charge would be VND2,200 ($0.09) per transaction for transfers below VND50 million ($2,195) and VND5,000 ($0.21) per transaction for transfers over VND50 million ($2,195).

Meanwhile, mobile transaction fees between accounts in different banks would be cut down from VND11,000 ($0.48) per transaction to VND7,000 ($0.3) per transaction under VND10 million ($439). For transfers over VND10 million ($439), the bank-to-bank transaction fee would be 0.02 per cent of the total transfer value, ranging from VND10,000 ($0.43) to VND1 million ($43.91) per transaction.

Previously, the transaction fees applied to accounts within the same system at Vietcombank remained free-of-charge since the first effective date of the mobile banking service until the recent fee adjustment.

Additionally, from March 1 onward, the monthly service charge for SMS Banking services, including receiving notifications of the account’s credit/debit activities through text messages, would rise from VND8,800 ($0.38) to VND11,000 ($0.48) per account.

In late February, several clients opening accounts at Vietcombank filed complaints regarding confusion over the SMS Banking service charge, stating that VND11,000 ($0.48) was deducted from their accounts as “monthly fee for the SMS Banking service,” yet the new fee adjustment was not scheduled until March 1.

Vietcombank (ticker VCB on the Ho Chi Minh Stock Exchange), is one of the largest commercial banks in Vietnam, operating more than 50 branches, transaction offices, subsidiaries, and representative offices, as well as affiliates.

On April 17, the Vietnam-based commercial bank was scheduled to auction over 6.6 million shares of Orient Commercial Bank (OCB) at the starting price of $0.59 per share in an attempt to minimise its cross-ownership at local banks.