SMEs need level playing field, experts advise

Small and medium-sized enterprises (SMEs) need a transparent business environment and fair competition rather than too much support that could end up being impractical, experts said.

There was general agreement on this issue at conferences held in Hanoi and HCM City last week respectively by the Vietnam Chamber of Commerce and Industry (VCCI) and the Central Council of Vietnam Business Associations.

The conferences aimed to gather feedback on a draft law on support for SMEs.

Several participants said that no matter what the scale, enterprises need to be treated fairly and protected against legal barriers like relatively limited access to preferential credit.

“SMEs need protection rather than support,” said Phan Dang Tuat of the Ministry of Industry and Trade, even suggesting that the name of the law should be changed to Protecting SMEs.

He also said that using the word “support” could affect businesses in implementing free trade agreements.

Furthermore, the supports mentioned in the draft law were too general and might be impractical given the Government’s budgetary constraints, with 97 percent of the firms in the country classified in the SME category, Tuat said.

“It will be better if the Government creates a transparent business environment and equal access to bank credit, land and other infrastructure,” he said.

Truong Thanh Duc, with the firm Basico, said all incentives should be considered carefully because overdoing it could motivate firms to become slack and dependent.

“It is vital to have appropriate policies to encourage SMEs,” Duc said.

Other experts said the criteria for being an SME must be clarified to ensure policies benefit the right firms.

Nguyen Ngoc Tuan, President of Dong Nai Association of Importers and Exporters, said that administrative procedures must be further simplified, so that household businesses are encouraged to become enterprises.

Lawyer Hoang Van Son also said that studies must be carried out to identify difficulties faced by the SMEs, so that realistic and practical supports can be provided.

He noted that while there are a significant number of new firms established every year, the number of those which are dissolved or go bankrupt is also considerable.

According to the General Statistics Office, there are around 570,000 firms in operation nation-wide. 

The Government has targeted the establishment of a million enterprises by 2020. 

Petrolimex to list PLX share starting at 43,200 VND

The Vietnam National Petroleum Group (Petrolimex) will officially list 1,293,878,081 shares coded PLX at an initial price of 43,200 VND (1.90 USD) per share, according to the Ho Chi Minh Stock Exchange (HOSE).

With a trading band of 20 percent for maiden listings, the price will vary between 34,560-51,840 VND (1.52-2.28 USD).

PLX will be listed before the annual shareholders’ meeting of Petrolimex slated for the morning of April 25. The meeting is to approve business performance outcomes in 2016 and plans for 2017. 

According to Petrolimex General Director Tran Van Thinh, in 2016, Petrolimex, the largest fuel importer and distributor of Vietnam, sold 11.44 million tonnes of fuel, exceeding the plan by 5.3 percent, with a revenue of 123.09 trillion VND (5.42 billion USD), and a coordinated pretax profit of 6.3 trillion VND (297 million USD), surpassing its plan by 58.8 percent.

The initial price values Petrolimex at 67 trillion VND (2.95 billion USD), enabling it to enter the club of the ten biggest companies on the HOSE, together with Vinamilk (VNM), Vietcombank (VCB), Vingroup (VIC), PV Gas (GAS), FLC Faros (ROS), VietinBank (CTG) and BIDV (BID).

HOSE is the exchange that gathers the biggest companies in Vietnam with its VN30 Index, which tracks the performance of the largest 30 firms by market capitalisation.

CEO Group opens Novotel Villas in Phu Quoc

Novotel Villas was officially opened over the weekend on Phu Quoc Island and are part of the CEO Group’s Sonasea Villas & Resort complex, which covers 132 ha at Truong Beach, just a five-minute drive from the new airport.

There are 96 villas in three, four and Presidential five-bedroom configurations on areas of 200, 272, and 435 sq m, respectively. The spacious villas include ensuites in each bedroom and the latest amenities, as well as an open plan layout to maximize shared space for family and friends who wish to spend time together.

All are fully equipped with stunning furnishings, the latest appliances in the kitchen for when culinary inspiration strikes, a great sound system, and a private pool for indoor-outdoor entertaining.

Novotel Villas is an extension of Novotel Phu Quoc Resort, bringing its total area to 13.5 ha and the number of five-star rooms to more than 700. This is the first resort of the Novotel brand that is allowed to sell to customers, affirming the trust and appreciation of Accor Hotels in the CEO Group.

Novotel Phu Quoc Resort opened its doors a year ago and has received rave reviews since for its service, facilities, restaurants and banquet conference offerings at the 366-room property. The resort received its five-star certification from the Vietnam National Administration of Tourism last September, becoming the first internationally-managed property on the island to do so.

All of the facilities at the Novotel Phu Quoc Resort are right on the doorstep. Guests can enjoy poolside BBQ parties with a wide range of delectable dishes prepared by master culinary crew. Its restaurant offering sees international cuisines and local seafood take center stage, with a huge range of local, Asian, and European dishes on offer.

Founded on October 26, 2001 and formerly known as the Vietnam Trade, Construction and Technology Limited Company, the CEO Group is a private sector group with eight member companies covering two main fields: real estate and education and training, in association with the supply of human resources, including labor exports.

Considering Phu Quoc a key investment area, the CEO Group has focused on the investment and development of world-class resort real estate products on the island. In particular, the resort villas at Sonasea Villas & Resort Complex have received great attention from domestic and international customers and investors. During the past year, CEO has continued to select Accor as its partner to manage and operate the resort villas, making the complex the first Novotel Villas Complex to be transferred in the world.

The CEO Group successfully completed its 2016 business plan, creating jobs for thousands of workers and contributing significantly to the State budget. These achievements are further highlighted by CEO Group’s appearance in VNR500; the Top 500 largest enterprises in Vietnam. In 2017, the Group has set higher targets and larger missions for building a sustainable brand, bringing greater satisfaction to customers, shareholders, and partners and delivering more benefits to the community, based on which the Group’s brand will develop into a national brand.

Hòa Phát achieves impressive results in Q1

In the first quarter of this year, Hòa Phát Group (HPG) earned VNĐ10.4 trillion (US$459 million) in revenue and VNĐ1.935 trillion in profit after tax.

The figures marked an increase of 44 per cent and 90 per cent, respectively, compared with the same period last year. Notably, the steel and steel pipe industry contributed mostly to this spectacular growth.

HPG produced some 505,000 tonnes of steel in the first three months of 2017, up 27.9 per cent year-on-year. The group’s market share also expanded to 24.2 per cent during this period, up 2 per cent against the end of 2016

The company exported some 52,000 tonnes of steel, mostly to the US, Canada, Australia and ASEAN countries in Q1, equivalent to its entire export volume in 2016.

The group also manufactured 126,900 tonnes of steel pipes, raising its market share to 26.53 per cent of total steel pipe sales in Việt Nam. HPG is step-by-step improving its production capacity at all plants across the country to reach a capacity of one million tonnes by 2020.

The group’s other industries such as furniture, refrigeration and equipment also continue to maintain steady growth, carrying out research and development of new products.

VNR inks deal with Saigon Newport Corp

The Vietnam Railway Corporation (VNR) will ink a deal with the Saigon Newport Corporation this April to build two inland container depots (ICDs) in Bình Dương Province and Hà Nội.

New VNR chairman Vũ Anh Minh said the two ICDs will be constructed in the Sóng Thần Industrial Park in the southern province of Bình Dương and in Hà Nội’s Đông Anh District.

Saigon Newport accounts for half of the country’s market share of container shipping services, he noted, adding that it has also gained a large percentage of the container market share - 90 per cent and 70 per cent - in HCM City and the southern province of Bà Rịa-Vũng Tàu, respectively.

VNR will also sign an agreement with the Vietnam Tourism Association and the Nha Trang business association in Khánh Hòa to increase the number of rail passengers.

Apparel sector enjoys over 11 percent export growth in Q1

Vietnam earned 6.84 billion USD from garment and textile exports in the first quarter of this year, a rise of 11.2 percent year on year, according to the Vietnam Textile and Apparel Association (VITAS).

Currently, Vietnamese garment and textile products have been available in 40 countries and territories over the world, with major markets including the US, Japan, the Republic of Korea, China and the EU.

The VITAS urged enterprises to optimize the capacity of their equipment to reduce production costs and seek orders for high-quality products.

This year, Vietnam’s textile and apparel sector targets a 7 percent growth over 2016, with total export earnings of over 30 billion USD.

Japan firm to build Quang Ngai power plant

The Japanese J-Power Development Company plans to build a thermal power plant in Dung Quat Economic Zone in the central province of Quang Ngai. 

The director of the International Development Business Department of J-Power Electricity, Jahana Takashi, told provincial officials about the intention at a recent working session.

Takashi said the company would proceed with a pre-feasibility study on investment in the coal-fired plant, which will be built in two stages: the first stage with capacity of 2,400 megawatts (MW) to be commissioned in 2028, and the second stage with a 2,000 MW capacity for operation in 2030.

The plant will use coal from Australia, Russia, Indonesia and Vietnam.

The chairman of Quang Ngai People’s Committee, Dang Ngoc Dung, promised smooth sailing for the project. He said the province has been calling for investment in updated energy technology to achieve green growth and sustainable development.

Sembcorp Development, a partner of the Vietnam-Singapore Industrial Park Group with Becamex IDC, also plans to build a 1,200-megawatt coal-fired plant in the province under a 25-year build-operate-transfer (BOT) arrangement.

PV Oil to expand share in domestic market

Petrovietnam Oil (PV Oil) Corp. aims to expand its share of the domestic oil and petrol retail market from 22 percent to at least 35 percent by 2020 through mergers and acquisitions transactions. 

According to Cao Hoai Duong, General Director of PV Oil, the company, which derives 75 percent of its revenue from oil and petrol retail, is seeking to increase its number of petrol stations nationwide in small cities and rural areas. 

He also noted that there is still room for oil and petrol distributors like PV Oil to expand its market although 50 percent of the market is controlled by the Vietnam National Petroleum Group (Petrolimex).

There are some 13,000 oil and petrol stations across the country, of which PV Oil owns 500 and Petrolimex 2,500. 

PV Oil plans to buy 1,000 more stations to triple the number of its petrol stations to 1,500. 

HCM City: Real estate continues positive path

The real estate market in HCM City has continued its positive growth late 2016 with many new projects launched, particularly in the mid-end segment, in the first quarter of this year.

Notable mid-end projects include D-Vela residence apartment by Dreamhouse, Phu Hoi Urban Area, Him Lam Phu An residence apartment and Moonlight Boulevard and Richmond City by Hung Thinh Corp.

According to CBRE Vietnam, the market welcomed more than 5,000 units from 21 projects in the first quarter of 2017, a decrease of 44 percent quarter-on-quarter. The mid-end segment accounted for 52 percent of total newly launched units.

The average selling price reached 1,595 USD per sqm, up 6 percent from the previous quarter. 

“The average prices were quite flat across the market. While District 2’s average selling price rose by 1.4 percent quarter-on-quarter and District 7’s by 1.9 per cent quarter-on-quarter, other decentralised districts such as Binh Thanh District, Go Vap District and District 12 witnessed their selling prices increasing by 1.5 – 3 percent quarter-on-quarter”, CBRE Vietnam said.

The selling prices of ready-built villas/townhouses picked up 16-40 percent from the fourth quarter of 2016 in Thanh My Loi and Binh Trung Dong wards of District 2 while in Nha Be District, Thu Duc District, Binh Chanh District and District 12, the selling prices rose by as much as 25 percent quarter-on-quarter, it added.

Data from the Housing and Real Estate Market Management Agency shows that real estate inventories in Vietnam hit approximately 29 trillion VND in the first quarter of 2017, an increase of 6.54 percent from the previous quarter.

Of the figure, the inventory of land plots contributed the biggest proportion of over 13.4 trillion VND, or more than 3.4 million sqm, due to a large number of land lots left unsold in areas lacking infrastructure.

It was followed by villas/townhouses with 3,620 units, worth about 7.9 trillion VND and residence apartments with 3,505 units, worth over 5 trillion VND.

Real estate inventories in Hanoi fell by 1.56 percent, or 87 billion VND, lower than HCM City’s reduction of 6.93 percent, or 402 billion VND.

Derivatives interest many investors

With less than a month left until derivatives products will be available for trading in the Vietnam securities market, institutional investors seem highly interested in the new products, according to vtv.vn.

The first two derivatives products that will become tradable in May are the index future contract and future bond contract.

Derivatives products have become popular in other advanced markets and the products are expected to help the country draw more foreign investment.

But in the domestic market, these are new and highly risky products. Therefore, individual investors will need time to get used to them, and institutional investors are expected to create the fundamental foundation for the development of this market in Vietnam.

Those products will reduce the risks in the price of stocks included in their long-term investment portfolios.

Vuong Tuan Duong, executive director at VinaCapital, said that the derivatives products would help attract more foreign investors to Vietnam’s securities market, increase the total market trading liquidity and raise the market valuation.

According to the institutional research and advisory division at Saigon Securities Inc (SSI), foreign investors in other financial centres like Hong Kong and Singapore are highly interested in Vietnam’s derivatives market as they are now able to invest in one index that represents the whole securities market instead of going through the two foreign exchange-traded funds (ETFs).

PV Power set for August IPO

PetroVietnam Power Corporation (PV Power) has decided to make its initial public offering (IPO) this August, the electricity producer announced.

The amount of shares offered for the public sale accounts for just 3-4 percent of its capital.

It also plans to sell a 45 percent stake to long-term strategic investors this year and can up the stake to 60 percent, depending on the approval of the Government.

The sale of 49 percent stake could fetch about 600 million USD for the power producer.

PV Power has met some strategic investors such as VinaCapital Investment Management Ltd., BNP Paribas, Standard Chartered, Deloitte, Indochina Capital Corporation and Dragon Capital.

PV Power is a member company of the Vietnam Oil and Gas Group (PetroVietnam) and is currently the second largest power supplier in Vietnam, behind Electricity of Vietnam (EVN).

The corporation has targeted revenue of 29 trillion VND (1.29 billion USD) in 2017, a year-on-year increase of 9.3 percent. 

Vietnam’s medium-term outlook remains positive: WB

In its East Asia and Pacific Economic Update report, the World bank said large developing economies in Southeast Asia, including Vietnam, will likely expand slightly faster in 2017-18, thanks to robust domestic consumption.

As a whole, the economies of developing East Asia and Pacific are projected to expand at 6.2 percent in 2017 and 6.1 percent in 2018, the report said.  

Vietnam can maintain a stable growth speed over the longer term if the country continues accelerating the restructuring to support its productivity-based growth model, it noted.

Vietnam’s economy was forecast to be stable in the coming time, with GDP growth expected to expand gradually in 2017-2019 due to high domestic demand, and the country’s export-oriented processing and manufacturing activities.

According to World Bank, Vietnam’s medium-term outlook remains positive, but pronounced downside risks remain. Domestically, delayed implementation of structural and fiscal reforms could intensify macroeconomic vulnerabilities and lower potential growth. Externally, intensifying uncertainties of the global economy could dim Vietnam’s growth outlook through trade and investment channels. 

Dealing with vulnerability to shocks – which in recent years are mainly climate and environmental disasters - continues to be a challenge for improving household welfare, particularly in rural areas.

Vietnamese, US associations sign management accounting deal

The US Institute of Management Accountants (IMA) and the Vietnam Association of Accountants and Auditors (VAA) have signed a cooperation agreement on management accounting.

Speaking at the signing ceremony in Hanoi on April 15, VAA President Dang Van Thanh stressed the need to develop management accounting in the growing market economy as it is not really popular in Vietnam.

Therefore, the agreement aims to update knowledge and share experience in management accounting for those working in the field.

The IMA will help VAA members to improve their skills in order to gain the US’s Certified Management Accountant certification (CMA). 

This is the first agreement inked by the VAA with a US accountant association. 

The IMA is a global prestigious association on management accounting and financial management with over 85,000 members recognised in more than 140 countries.

Granite project work begins in Ninh Thuận

A project to exploit and process granite has kicked off in the south-central coastal Ninh Thuận Province’s Phước Dinh Commune, in Thuận Nam District. 

The ground-breaking ceremony was held jointly by the provincial People’s Committee and investor Ninh Thuận Mineral Mining-Construction-Investment Company.

Vũ Xuân Hiểu, a representative of the company’s board of directors, said the Mavieck Ninh Thuận project is a closed production cycle, right from the material exploitation stage to processing granite into different products to meet the demands of local and foreign markets.

The VNĐ300 billion (US$13.3 million) project includes a 7.4-hectare exploitation zone on Mavieck Mountain and a 5,000sqm processing factory, designed to have an annual production capacity of 600,000sqm to one million sqm of granite-facing stone. 

The construction is divided into two phases: the first phase is expected to become operational in April 2018, and the second is scheduled for completion in the first quarter of 2019. 

Speaking at the ground-breaking ceremony on Sunday, Lưu Xuân Vĩnh, chairman of the provincial People’s Committee, told the investor to ensure that the project is completed as per schedule, while ensuring that quality, labour safety and environment protection standards are met. 

Vĩnh also asked local departments and agencies to create conducive conditions in accordance with the law to facilitate the implementation of the project.

Ca Mau targets 280,000 hectares of prawn farming by 2020

The Mekong Delta province of Ca Mau targets to have 280,000 hectares of prawn farming with an output of 280,000 tonnes per year by 2020.

To fulfill the goal, Ca Mau has been developing prawn farming with use of advanced technology and encouraging farmers to increase farm sizes and cooperate with each other.

Local authority has invested in improving infrastructure for prawn production in a bid to make it compatible with the new technology and enhance climate change resilience. Farmers have also been provided with training on the new technology.

According to the provincial Department of Agriculture and Rural Development, prawn has been grown in a smallholder system in the province with different ways of pond preparation and breeding process between farmer households, making the prawn industry more vulnerable to pollution and epidemics.

The local areas of prawn have not increased since 2013 but the province has seen a transformation from traditional prawn farming to an industrial, intensive production.

The area for breeding prawn industrially has increased from few hundreds of hectares to approximately 10,000 hectares while the intensive prawn farming area reached 200,000 hectares.

HCM City’s credit growth rises 3% in Q1     

 Outstanding loans in HCM City totalled around VND1.5 quadrillion (US$65.8 billion) in the first quarter of 2017, a three per cent rise over the end of 2016.

Statistics with the central bank’s southern branch also show that the city’s outstanding loans have risen by 19.15 per cent over the same period last year.

Around 58 per cent are medium- and long-term loans, which rose by 3 per cent over the end of last year.

Deposits grew at one per cent in Q1 to touch VND1.8 quadrillion in the southern city, 87 per cent of which are deposits in Vietnamese dong. Compared to the same quarter last year, deposits have increased by 11.1 per cent.

However, there is a slight change in credit flow, with an increasing proportion being poured into non-production sectors such as real estate and securities sectors.

Statistics show that though the credit flow is still primarily for production and business, its proportion has reduced from 80 to 83 per cent to 75 to 78 per cent.

The central bank’s southern branch has urged credit institutions to pay attention so that credit growth is in line with deposit growth, to ensure that safety requirements are met. Credit institutions must also comply with regulations on interest rates, lending and credit growth targets, it has cautioned. 

Vietnam cooperative to export mangoes to Australia

The Suoi Lon Mango Cooperative in the southern province of Dong Nai will export its first batch of mangoes to Australia soon, said Director Nguyen The Bao.

According to an agreement reached between the cooperative and two Australian businesses, 18 tonnes of mangoes will be exported daily via air and marine routes.

The cooperative will ship two tonnes of mangoes via air each day, with the fruit sold at supermarkets. 

Meanwhile, a container carrying about 16 tonnes of mangoes will be brought to Australia via sea and then distributed to retailers.

The cooperative is also piloting the preservation of mangoes using new technologies to export abroad via sea to reduce transport costs.

Suoi Lon Mango Cooperative was the first agricultural cooperative in Dong Nai to receive the Vietnamese Good Agricultural Practice (VietGap) certificate for mangoes in 2010.

The cooperative has 114 members growing 314 hectares of mangoes, including more than 14.5 hectares meeting VietGap standards and 16 hectares meeting Global Good Agricultural Practice standards.

It has been shipping mangoes to Ukraine and China for years.

Viglacera eyes one billion USD of revenue by 2020

The Vietnam Glass and Ceramics for Construction Corporation (Viglacera) said it will ensure supplies and aims to earn one billion USD in revenue from 2017 – 2020.

To achieve this, Viglacera plans to develop sustainably in the period, with investment focused on hi-tech products and infrastructure in industrial parks.

Funding will be ensured for key projects while accelerating the equitisation process as per Government instructions, divesting at least 51 percent of state-owned capital by 2019.

In 2017, Viglacera will focus investment on infrastructure in industrial parks.

Currently, the company has 10 industrial parks, in Bac Ninh, Ha Nam, Thai Binh, Phu Tho, Quang Ninh, Hue and Hung Yen.

Financial priority will be given to two projects in Yen Phong Industrial Park and Dong Van IV Industrial Park, worth 692 billion VND (30.45 million USD) and 154 billion VND (6.77 million USD), respectively.

Beauty chain Guardian opens 49th store

Guardian Vietnam on April 15 opened a retail store at Royal City, Hanoi, bringing the number of Guardian stores throughout the country to 49.

Located in one of the most popular shopping and entertainment complexes in Southeast Asia, Guardian Royal City promises to be an ideal shopping destination where customers can conveniently find a wide variety of genuine and high-quality health and beauty products from both local and international leading brands, CEO of Guardian Vietnam Pawin Sriusvagool said at the opening ceremony.

Guardian is a health and beauty retail chain operating under the Dairy Farm Group, a leading pan-Asia retailer which operates in 12 countries throughout Asia, consisting of health and beauty stores, convenience stores, supermarkets and hypermarkets

The first store in Vietnam was opened in 2011. Since then, Guardian has rapidly expanded its business in southern Vietnam with a network of 39 outlets in HCM City, two in Bien Hoa and two in Vung Tau.

“Guardian will continue to invest in Vietnam to bring the best products and services to our customers,” Pawin said, adding that the company saw significant potential in the retail market for health and beauty products, as well as in the modern retail industry of Vietnam.

Guardian has also offered thousands of attractive gifts and promotions to its customers to celebrate this occasion.

RCEP brings new hope for Vietnamese businesses

After the failure of the Trans-Pacific Partnership (TPP), the Regional Comprehensive Economic Partnership (RCEP) is expected to benefit Vietnam provided that the country and the domestic business community make good preparations.

RCEP is a free trade agreement between the ten ASEAN member countries and six partners of Australia, China, India, Japan, New Zealand and the Republic of Korea.

Compared to other deals, the RCEP has broader and deeper liberalisation commitments in the trade of goods, services and investment.

RCEP members make up 24 percent of global GDP and 28 percent of global trade, therefore, the deal is hoped to greatly benefit members, especially less developed countries.

According to experts, poor countries will enjoy more benefits from agreements with a high level of integration.

With less developed economies than others in RCEP, Vietnam and Cambodia are likely to benefit the most from the deal.

For Vietnam, RCEP is hoped to positively influence exports, investment attraction and economic growth.

To make full use of the deal, experts advise the Government to take stronger actions to reform institutions and improve the investment environment to ensure equality for all economic sectors.

It is also necessary to strengthen communications to help enterprises overcome challenges and choose good investments.

Meanwhile, they noted that production networks and value chains within the RCEP mostly depend on foreign-invested sectors and economic groups from large countries such as European countries, the US and Japan. Therefore, Vietnamese businesses should thoroughly understand partners dominating the chains to ensure success.

According to the World Trade Organization Centre under the Vietnam Chamber of Commerce and Industry, the 17th negotiation round of the RCEP took place in Kobe, Japan from late February to early March this year. Negotiations on the deal are projected to wrap up in November.

Railway corp. shakes hand with Tan Cang Sai Gon

The Vietnam Railway Corporation (VNR) will ink a deal with the Saigon Newport Corporation this April to build two inland container depots (ICDs) in southern Binh Duong province and Hanoi.

New VNR Chairman Vu Anh Minh said the two ICDs will be constructed in Song Than Industrial Park in Binh Duong and in Dong Anh district, Hanoi.

Saigon Newport is a military-run company which accounts for half of the country’s market share of container shipping services, he noted, adding that it has also gained big proportions of the container market share, 90 percent and 70 percent, in Ho Chi Minh City and Ba Ria - Vung Tau province, respectively.

The VNR will also sign an agreement with the Vietnam Tourism Association and Nha Trang business association in Khanh Hoa to increase the number of rail passengers.

New document facilitates solar-energy generation

Numerous incentives will be offered for solar-power energy projects in Vietnam, according to a recently-issued decision from Prime Minister Nguyen Xuan Phuc that takes effective from June 1, 2017 – June 30, 2019.

Any organisations or individuals involved in solar power projects in Vietnam will be eligible for the incentives.

The solar power output will be bought by the Electricity of Vietnam and its authorised members. Organisations and individuals with licenses for supplying power for the national grid can sell the power, or anyone who wants to sell their unused solar power. 

According to the decision, the buyer is required to buy all the output of solar power projects, with 20-year contract terms.

Solar power generating projects will enjoy tax exemptions for importing goods for their fixed assets.

Solar power projects will also enjoy corporate income tax exemptions and reductions.

For power grid-connected projects, the buyer shall buy all of the projects’ output at 2,086 VND (0.09 USD) per kWh (excluding VAT), and subject to changes according to the VND/USD exchange rate.

The Ministry of Trade and Industry will annually issue the buying and selling prices of solar power produced by roof-based solar power projects based on the VND/USD exchange rate.

350 exhibitors to participate in auto fair     

Around 350 domestic and foreign exhibitors are scheduled to take part in the 13th Saigon Autotech & Accessories International Exhibition in HCM City from May 25 to 28.

Covering an area of 15,000 square metres, the exhibition will have 700 booths set up by domestic as well as foreign firms from the United States, Japan, India, Malaysia, Singapore, Indonesia, Thailand and the European Union (EU), according to the organiser Asia Trade Fair & Business Promotion (ATFA).

The exhibitors will display automobiles, motorcycles, electric and sport bikes, accessories and spare parts, car maintenance services, new-tech engines and smart parking solutions.

Several popular names in the support industry, such as JaanE, Vina AHA, Yabanchain, Okatsune, Van Phuoc and Lotus Viet, will also have stalls at the exhibition.

On the sidelines, the ATFA has planned a business matching conference, to provide a platform for domestic and overseas producers and service providers to share experiences, promote their products and seek partners.

Van Don EZ should stand apart, says Deputy PM     

The special preferential policies for Van Don Special Economic Zone must make it superior to the country’s existing economic zones and on par with similar models in the region and world.

During a meeting with provincial authorities on Thursday, Deputy Prime Minister Truong Hoa Binh asked the northern coastal province of Quang Ninh to map out and propose specific incentive policies at the earliest to develop Van Don quickly into a special economic zone.

Binh said the policies, which will become legal regulations, must be in accordance with international commitments and actual conditions in Viet Nam, besides ensuring consistency, stability and longevity.

The policies, which need to be consistent with current laws, must be superior in terms of infrastructure, tax, credit and finance so as to attract strategic foreign investors with huge projects, cutting-edge technologies and high-quality human resources, Binh said.

The judicial bodies of the special administrative-economic zone must be designed to be able to legally handle economic and commercial disputes as well as high-tech crime and intellectual property issues, he said.

The deputy PM instructed the planning and investment ministry to work with Quang Ninh Province and complete the project.

To develop Van Don Special Economic Zone, the province needs around US$12 billion. The province has so far mobilised approximately VND40 trillion ($1.75 billion) , mainly for infrastructure development.

A VND7 trillion international airport in Van Don district, about 50km from Ha Long City, which is home to the world heritage site of Ha Long Bay, is under construction, and is scheduled to become operational in 2018.

Van Don has a politically and economically important position as it lies on the strategic transit route from East Asia to Southeast Asia and from ASEAN to China; in Viet Nam - China “two corridors, one belt” co-operation area; in Nanning - Singapore economic corridor; and in extended Tonkin Gulf inter-regional co-operation area.

Van Don Special Economic Zone is part of a Government-approved plan to build three such zones in the country; the other two are Van Phong in the central Khanh Hoa Province and Phu Quoc in the southern Kien Giang Province.

The zones are expected to spearhead the country’s growth and exploit local advantages to drive growth in the area. They will pilot key new economic and administrative policies before they are applied nationwide to develop the maritime economy. 

Level playing field for SMEs, experts advise     

Small and medium-sized enterprises (SMEs) need a transparent business environment and fair competition rather than too much support that could end up being impractical, experts say.

There was general agreement on this issue at conferences held in Ha Noi and HCM City on Wednesday and Thursday respectively by the Viet Nam Chamber of Commerce and Industry (VCCI) and the Central Council of Viet Nam Business Associations.

The conferences aimed to gather feedback on a draft law on support for SMEs.

Several conference participants said that no matter what the scale, enterprises need to be treated fairly and protected against legal barriers like relatively limited access to preferential credit.

“SMEs need protection rather than support,” said Phan Dang Tuat of the Ministry of Industry and Trade, even suggesting that the name of the law should be changed to Protecting SMEs.

He also said that using the word “support” could affect businesses in implementing free trade agreements.

Furthermore, the supports mentioned in the draft law were too general and might be impractical given the Government’s budgetary constraints, with 97 per cent of the firms in the country calling under the SME category, Tuat said.

“It will be better if the Government creates a transparent business environment and equal access to bank credit, land and other infrastructure,” he said.

Truong Thanh Duc, with the firm Basico, said all incentives should be considered carefully because overdoing it could motivate firms to become slack and dependent.

“It is vital to have appropriate policies to encourage SMEs,” Duc said.

Other experts said the criteria for being an SMEs must be clarified to ensure policies benefit the right firms.

Nguyen Ngoc Tuan, President of Dong Nai Association of Importers and Exporters, said that administrative procedures must be further simplified, so that household businesses are encouraged to become enterprises.

Lawyer Hoang Van Son also said that studies must be carried out to identify difficulties faced by the SMEs, why they went bankrupt, etc., so that realistic and practical supports can be provided.

He noted that while there were a significant number of new firms established every year, the number that were dissolved or went bankrupt was also considerable.

According to the General Statistics Office, there are around 570,000 firms in operation nation-wide.

The Government has targeted the establishment of a million enterprises by 2020.

Just 3 loans from SME fund so far

Though the Small and Medium Enterprise (SME) Development Fund was established a year ago, so far only three firms have got loans from it, fund director Hoang Thi Hong said.

The SME fund has a registered capital of VND2 trillion (US$88.8 million).

The three companies received loans worth VND15 billion are involved in innovation and the manufacturing industry.

Since its establishment,1,000 enterprises have been advised of its borrowing procedures, and 20 applied for loans worth a total of VND250 billion, according to Hong. However, after the appraisal process, the fund offered loans to only three enterprises.

The result is exceptional considering the fund’s target and its preferential policies.

The fund is expected to provide loans worth VND560 billion by 2017.

As a rule, the fund will provide businesses with a maximum of 70 per cent of a project’s capital at an interest rate of 5 per cent per year for one-year loans and 7 per cent per year for medium- and long-term loans. The maximum loan period is seven years. 

One of the advantages of the fund, compared to bank loans, is that to borrow money, businesses can use assets formed from loans [output of their projects] as collateral. Also, usually, bank requires SMEs to mortgage assets whose value is 100 to 150 per cent of the loan. When borrowing from this fund, the collateral value does not need to exceed 100 per cent of the loan value.

The fund has four programmes for different types of enterprises: innovative businesses; processing and manufacturing enterprises; agriculture, forestry and fisheries; water supply, management and treatment of waste water and waste. The maximum loan for each enterprise is between VND10 billion and VND25 billion, depending on the type of enterprise.

Nguyen Huu Quang, director of Forestry Products Processing for Export Company in the central province of Thanh Hoa, told Tien Phong (the Vanguard) newspaper, that the loan was not easily accessible to businesses. “We are expanding our factory so we need to borrow around VND20 billion to import machinery and equipment, but all applications have to wait for the evaluation of a science and technology committee as well as the trust bank,” Quang said.

Dang Huy Dong, chairman of SME Development Fund and deputy minister of Planning and Investment, was quoted by the newspaper as saying that the biggest obstacle is in the process of project assessment conducted by trust banks, and financial procedures.

Many enterprises don’t have the experience to present projects, so they are unable to convince the appraisal council, according to Dong.

Enterprises also do not proactively provide transparent financial information, and fail to have projects for the purpose that the fund has been set up for.

Another problem is that businesses ask for loans higher than the actual cost of the project. “There are situations when a company sets up many loan projects simultaneously in an effort to get some loan sanctioned, or sometimes an individual represents many companies to apply for a loan,” Hong said.

In addition, the lending limit for some sectors is too low, so it does not motivate businesses to file applications for loans with the fund, a trust bank representative explained, on condition of anonymity.

The SME Development Fund was established under Decision No 601/QD-TTg, dated April 17, 2013, by the then Prime Minister. It is a State-owned financial institution under the Ministry of Planning and Investment, and its chartered capital of VND2 trillion has been allocated from State budget. 

Thai Nguyen ranks second in export in Q1     

The northern province of Thai Nguyen ranks second in the country in terms of export value in the first quarter of 2017, the General Department of Customs said.

It has surpassed Dong Nai, Bac Ninh and Binh Duong provinces with an export value of US$5.16 billion for Q1, up 12 per cent compared to the same period last year.

The first place is held by HCM City, whose export value for the quarter stands at roughly $8 billion.

Thai Nguyen’s key export goods are electronics and hi-tech products such as mobile phones, phone components and tablets.

The spectacular rise in its export performance in recent years is the result of major investments by the Samsung Group, said Nguyen Thi Thanh Hao, head of the import-export division under Thai Nguyen’s industry and trade department.

Under the province’s economic development plan for the 2016-20 period, its target is to achieve US$27 billion in exports by 2020, and become the top exporter in the country’s northern mountainous region.

The province’s export value is expected to grow by nine per cent a year, with export turnover per capita averaging $20,000 a year by 2020.

In order to achieve this goal, Thai Nguyen has put in place a strategy that focuses on production of key export items, such as electronic and hi-tech products at the Samsung facilities based in Yen Binh Industrial Zone, and different varieties of tea.

As one of the largest tea growers in the country, Thai Nguyen aims to ship 10,000 tonnes of tea overseas in the next three years, based on maintaining an annual growth of 13 per cent.

By 2020, the province plans to generate $360 million from the export of apparel, accounting for around 70 per cent of its total export turnover.

Binh Phuoc plans industrial clusters for $260 million     

The southern province of Binh Phuoc plans to establish 35 industrial clusters in its 11 districts and towns by 2030, whose combined capital requirement will be VND5.9 trillion (US$260 million).

Of the 35 clusters, 21 would be constructed on 583 hectares of land in the 2020-25 period, said Huynh Anh Minh, vice-chairman of the People’s Committee.

From 2025 to 2030, another 14 industrial clusters will be set up across another 580 hectares.

Industries that will be developed within these clusters include agro-forestry products processing, manufacture of rubber and plastic products, metal products, electronic products, engine vehicles, textiles and apparel. These clusters are expected to create around 30,000 jobs.

Till now, the province has 12 industrial parks and one economic zone, 11 of which already have infrastructure investors – nine have been built and are calling for investment, according to the provincial department of planning and investment.

Binh Phuoc has, up to now, attracted 159 foreign direct investment (FDI) projects with an investment capital of around US$1.2 billion, which are valid.

The province is promoting industrial development to boost socio-economy growth and to achieve industrialisation and modernisation. Localities are working to create a favourable climate for investors in industry and services. 

Vinamilk foresees 2017 growth     

Viet Nam Dairy Products Joint-Stock Company (Vinamilk) projects a total revenue of VND51 trillion (US$2.26 billion) in 2017, an increase of 8 per cent over last year.

Vinamilk also targets a post-tax profit of VND9.73 trillion, a yearly rise of 4 per cent, general director Mai Kieu Lien said at the company’s annual shareholders’ meeting on Saturday.

The company also plans a post-tax dividend for 2017’s business performance at the lowest rate of 50 per cent (or VND5,000 per share).

There will be two dividend payments for 2017. The first in August or September 2017, and the second in May or June 2018.

The remaining dividend for 2016 will be paid at the rate of 20 per cent (or VND2,000 per share). Shareholders must complete registering for dividend payments by May 5, 2017 and the payment will be made on May 22.

In the first quarter of 2017, Vinamilk recorded a yearly rise of 16.1 per cent in revenue and 34 per cent in post-tax profit compared to the same period in 2016.

Lien also said Vinamilk was ready for its strategic development by 2021. The company would continue to study and develop products to maintain similar growth, cooperate with overseas partners and expand its operation in other markets, such as the US and New Zealand, to ensure a sufficient source of input materials.

In 2021, Vinamilk forecasts a total revenue of VND80 trillion, including VND19 trillion from overseas markets. Vinamilk is also planning to acquire a US dairy factory whose sales reached $13 million.

Its average yearly growth rate in the domestic market is projected at 10 per cent, and the revenue from the domestic market in 2021 is predicted at VND61 trillion.

Vinamilk chairwoman Le Thi Bang Tam said the company would apply a new corporate governance model.

Vinamilk would remove the old supervision board and replace it with a new internal supervision sub-commission, directly managed by the management board.

By setting up the new team, the number of management board members in Vinamilk increased to nine from the current six with the appearance of Nguyen Ba Duong, chairman of the Coteccons Construction Corporation (Coteccons). Duong is also among the three independent members of the management board.

Phan Duc Hieu, deputy director of the Central Institute for Economic Management (CIEM), said at the meeting that the new corporate governance model was widely used in the world.

The new model would help Vinamilk operate its business and protect the rights and benefits of minor shareholders in a way that is more transparent, he said.     

Tracodi targets 5.7 per cent rise in profits     

Transport and Industry Development Investment Joint Stock Company (Tracodi) has told its shareholders that it targets after-tax profit of VND63.7 billion on revenues of VND879.47 billion (US$38.7 million) for 2017, representing growth of 5.7 per cent and 5.5 per cent.

Tracodi, which has interests in stone mining, infrastructure, international trading and labour export, would pay a dividend of 10-12 per cent in cash, Nguyen Thanh Hung, its deputy general director, told the annual shareholders meeting in HCM City on April 14.

It plans to pay 6 per cent in shares as dividend for 2016.

Last year profits had jumped by 20.3 per cent compared to its target, with stone mining, construction and trading being the main contributors, he said.

The company is in the process of listing on the HCM Stock Exchange this quarter.

Nguyen Ho Nam, the company’s deputy chairman and general director, said the company would focus on improving its infrastructure building capacity, expanding export of workers to Japan, production and export of farm produce to achieve this year’s targets.

Tracodi has many group and allied companies such as An Giang Joint Venture of Construction Material Exploitation and Processing (Antraco), Vinataxi and Vinacafe Da Lat JSC. 

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