New rules press VAMC to be more transparent

The Viet Nam Asset Management Company (VAMC) will have to publish information about its activities and become more transparent under a new regulation issued by the State Bank of Viet Nam (SBV).

Circular No04 issued on Wednesday, required the firm to publish information pertaining to its management policies, internal regulations on buying and selling non-performing loans, its processes and methods for calculating loan price and assets, and its processes and methods for selling loans and assets.

VAMC's audited annual reports, its criteria while buying bad debts from financial institutions and its methods of selling bad debts and insured assets will also have to be disclosed.

VAMC must also follow regulations to provide statistics on its activities to SBV's Monetary Statistics and Forecasting Department. When statistics in reports are adjusted or undergo any unusual changes, the company must submit all documents required by the department.

The circular will come into effect on June 1.

Hai Phong thermal power plant 2 to be transferred in Q1

Chinese and Japanese contractors are expected to transfer the Hai Phong Thermal Power Plant 2 to its investor in the first and second quarters of this year.

After three years of construction, the two-turbine plant, with a designed capacity of 600 MW, was fully connected to national grid in February 17.

Located in Tam Hung commune, Thuy Nguyen district, the second plant was constructed by China’s Dongfang Electric Corporation and Japan’s Marubeni, with a total investment capital of 623 million USD.

Earlier, the Hai Phong Thermal Power Plant 1 was put into operation in 2011, with an annual electricity output of 3.6 billion kWh.

The two plants contribute to ensuring power security and stable electricity supplies for local factories’ production.-

Steel production falls in January

The sales of building steel in January this year fell sharply by 36 per cent over the previous month and 42 per cent reduction compared to January 2013.

The statistics of the Viet Nam Steel Association (VSA) showed that the total domestic steel production in January was only 319,975 tonnes, a 30 per cent decrease against the previous month and 5 per cent lower than the corresponding period last year due to slow consumption.

Steel producers have estimated that the production level was appropriate for the inventory.

By the end of January, the inventory of building steel was more than 436,000 tonnes. The association said the output would ensure sales for February, while the raw steel would also meet the demand of the material at rolling steel factories nationwide.

On the bright side, the sales of steel pipes maintained a growth rate of 0.8 per cent over the same period last year, reaching 68,045 tonnes. Its inventory was over 23,700 tonnes by the end of last month.

VSA forecast the steel industry would continue to face difficulties in February and even lower sales than January due to the long Tet holiday.

However, it expected that the market would recover in March as several construction works would begin.

The Ministry of Industry and Trade has said that the steel enterprises had to cut their scale of production by up to 40 per cent.

Ho Nghia Dung, VSA's chairman, added that the demand for steel has sharply reduced. He suggested that the Government should opt for solutions including issuing bonds, investing in infrastructure and improving the property market to help the steel industry gain a growth rate of 5-7 per cent this year. —

Retail sales on upward trend in first two months

The nation's total retail sales and service revenues increased 11.6 per cent year-on-year to VND474.10 trillion (US$22.6 billion) in the first two months, the General Statistics Office (GSO) reported.

Vu Manh Ha, a senior expert at the GSO Trade Department, said that the nation's retail sales during the reviewed period has returned to average growth of 6.2 per cent, if price hikes were excluded.

The growth, however, was far lower than the rate seen in the same period last year. This means that the domestic consumption demand has yet to be improved as the locals have curbed their spending habits and are focused on buying or using only essential goods and services.

Many enterprises in the retail sector, meanwhile, continued to restrict their business expansion programmes as they continued to encounter obstacles including capital shortages, a high volume of stockpiled goods and the increasing prices of raw materials, Ha stated.

The trade sector, which accounted for nearly 80 per cent of total revenues, rose 9.6 per cent over last year's corresponding period.

In the January-February period, the foreign-invested sector experienced the highest revenue growth at 11.4 per cent, reaching $19.63 billion, while the State-owned sector recorded a modest rise of 7 per cent at only $2.11 billion.

The country's retail sector, with a boost from foreign retail distributors, has initially proven it has changed for the better.

At present, there are 650 supermarkets in 59 of the 63 provinces and cities across the country and 117 shopping centres in 32 provinces and cities.    

Draft law proposes new fat tax on carbonated soft drinks

A special consumption tax of 10 per cent is likely to be imposed on carbonated soft drinks due to their potential health risks.

This is mentioned in the revised draft of the Law on Special Consumption Tax released by the Ministry of Finance recently.

The tax rate on the beverage is currently zero per cent.

The ministry said that several studies have pointed out the potentially harmful effects of soft drinks on public health, suggesting that their consumption should be controlled in the same way as that of cigarettes and alcohol.

The ministry cited the harmful effects of preservatives, high sugar content and other additives found in many such beverages, saying that higher taxes would dissuade their consumption.

It also mentioned the UK, France and Denmark as examples of countries which have applied special consumption taxes on soft drinks.

In Asia, Thailand, Laos and Cambodia also have levied extra sales tax on non-alcoholic beverages.

As a side note, the ministry stated that a 10 per cent tax would add VND1.5 trillion, or US$72 million, to the State budget by 2016. The revised law is expected to be passed this year and take effect in July 2015.

However, industry insiders said that more study should be done before imposing the tax, adding that the potential health risks of soft drinks have remained a controversial issue in the world.

Under the draft law, the special consumption tax levied on beer, wine and tobacco will also be hiked by 10 to 15 per cent from 2015, in a bid by the Government to reduce the consumption of these products.

The tax on beer, wine and tobacco products will hit a record high of 75 per cent in 2015, and is likely to go up to 85 per cent in 2018. The taxes are expected to contribute more than VND2.9 trillion, or $131.82 million, to the State budget in 2016 and VND7.7 trillion, or $350 million, in 2018.

The Ministry's statistics showed that beer and wine sales in 2013 were roughly 3 billion litres, equivalent to 32 litres per capita, making Viet Nam top the list of per capita consumption in Southeast Asia and No 3 in Asia, just behind China and Japan.

The excessive consumption of beer and wine has a negative impact on public health and threatens social security due to rising social evils, violence and traffic accidents, especially during festivals and holidays.

It will also be proposed that a 30 per cent tax be imposed on voting games and betting via texting.

Making use of EU regulation to boost exports

Vietnam is one of 88 countries enjoying tariff cuts under the European Union’s revised Generalized Scheme of Preferences (GSP) which came into effect as of January 1, 2014.

However, leading experts say the GSP scheme, in fact, only provides modest benefits to Vietnam, and its incentives are definite.

Under the scheme, GSP is applied to most of Vietnam’s export products, including footwear, hats and umbrellas which have already been listed under the ‘graduation’ mechanism for competitive products.

Tran Ngoc Quan, deputy head of the European Market Department under the Ministry of Industry and Trade, postulates the GSP scheme will no longer be valid when a free trade agreement (FTA) between Vietnam and the EU is signed and comes into effect.

Although graduation thresholds increase from 15% to 17% on products, excluding garments, many of Vietnamese exports are likely to reach these threshold levels and will not enjoy EU preferences.

If the new GSP is applied, the market share of Vietnamese coffee, tea and spices in the EU will increase to 21.68% from the current 12.11%, meaning these products will cross over the graduation threshold and will not receive preferences.

Similarly, Vietnamese seafood and footwear are no exception, as these two groups of products are expected to make up 19% and 34% of the EU’s market share respectively.

Claudio Dordi from the EU Investment and Trade Policy Support Project says EU tariff incentives create a competitive advantage for Vietnamese garment businesses, especially when their major rival, China, is paying Most-Favoured-Nation (MFN) taxes which are 3% higher than GSP levels on average

Customers, therefore, will place orders with Vietnam, in lieu of China to benefit from lower tariffs, he says.

However, Dordi warns the GSP brings a definite competitive advantage as the validity of the GSP is not permanent.

Than Duc Viet, a Garment 10 Corporation representative, says the most difficulty in gaining GSP advantages is to meet Rules of Origin of materials to get certificate of origin (C/O) form A.

Currently, the company cannot apply for incentives for its FOB products as most of its materials are imported from China at the customer request.

Vietnam, an export-driven economy mainly based on outsourcing contracts, has no choice but to meet Rules of Origin to enjoy trade and tariff incentives. With its added value of less than 40%, Dordi suggests the garment sector play by these rules to make the most of preferences.  

Former Trade Minister Truong Dinh Tuyen posits GSP does not exert sufficient pressure on economic restructuring, thus affecting a trade balance. Exports may rise thanks to GSP, but imports may also increase due to low competitiveness in labour productivity, quality and production costs.

As Vietnam is integrating more deeply into the world economy and has signed many free trade agreements, tariffs will be slashed gradually, normally over a period of 10 years, and as a result GSP will no longer be important to businesses.

This means GSP creates an external source of competitive advantage and domestic businesses should not rely on this source, Tuyen says. Instead, he advises businesses to grasp GSP rules to avoid obstacles, even losses when exporting products to these markets.

To this end, the former Trade Minister says business should make full use of GSP incentives by improving product quality, diversifying their exports, and reducing costs and prices to sharpen the competitive edge of Vietnamese products.

In addition, a greater effort is needed to accelerate economic restructuring and growth model shifting, he concludes.

Forestry, seafood exports up in 2014

Export value of agro-forestry and seafood products have increased 9.4 per cent compared to the same period last year, according to the Ministry of Agriculture and Rural Development.

Exports are estimated to reach US$4.33 billion in the first two months of the year.

During this period, exports of key agricultural products were about $1.73 billion, down 20.5 per cent against the same period last year as rice, coffee and rubber exports have declined.

The country exported about 702,000 tonnes of rice worth $330 million, down 12.3 per cent in volume and 8.4 per cent in value.

In January and February, about $919 million was earned from seafood exports, up 23.5 per cent against the same period last year, while exports of key forestry products was $837 million, up 30.2 per cent.

Exports have increased partly due to the VAT exemption on raw products of agro-forestry and fisheries that took effect early this year, experts said.

The global recovery has also led to a higher demand for agro-forestry and fishery products.

Moreover, the decline of the US dollar in February stimulated importers to buy more agro-forestry and fishery products for storage, experts said.

Many exporters said they now have long-term orders.

The ministry has set a target of exporting $28.5 billion of agro-forestry and fisheries products this year, up 3.63 per cent against last year.

If the world economy continues to improve, the export value of agro-forestry and fisheries can reach $30 billion this year, according to the ministry.

HCM City expands access to credit

The programme to establish stronger links between commercial banks and enterprises to facilitate access to preferential credit will expand this year to include small traders, a senior HCM City official said yesterday.

Nguyen Thi Hong, Deputy Chairwoman of the HCM City People's Committee, said at a review meeting that the city had initiated the linkage programme last year after organising meetings between the two sides in all 24 districts.

Under the programme, banks had pledged to provide loans worth VND13.7 trillion (US$648.86 million) to 654 enterprises, small household businesses and co-operatives at annual interest rates of nine per cent for short-term loans and 9-12 per cent per year for medium and long-term loans.

Lat year, the city had also helped connect banks with businesses participating in the city's price stabilisation programme, Hong said.

Unlike in previous years, when companies received interest-free loans from the city, credit institutions last year offered loans at six per cent annual interest, she added.

Van Duc Muoi, general director of Visssan, which participates in the price stabilisation programme, said businesses had felt more secure about accessing capital and the lower interest rate had also helped them reduce production costs and become more competitive.

For 2014, the programme targets loans of VND20 trillion ($947 million), Hong said.

This year, the programme will create conditions for more businesses including small traders and households to gain access to preferential loans, Hong said.

She said it will "continue to focus on providing preferential loans to enterprises involved in priority sectors, with particular preference given to those that want to upgrade production technology and equipment or apply hi-tech advances, or to those working in support industries."

Le Hoang Quan, Chairman of the HCM City People's Committee, asked the municipal Department of Industry and Trade, business associations, HCM City Export Processing Zone Authority and others to collect more information from businesses in their areas to help them solve problems in a timely manner.

Quan said that businesses, for their part, should review their operations and cut unnecessary costs.

Nguyen Van Binh, Governor of the State Bank of Viet Nam, hailed the HCM City linkage programme, saying that the Government would consider expanding it nation-wide, initially in Ha Noi, Da Nang and Hai Phong.

Binh also encouraged all banks to participate in the programme.

At the meeting, four commercial banks -Sacombank, Agribank, Vietcombank and Vietinbank - signed agreements to provide loans of more than VND800 billion ($37.87 million) to 11 businesses, including Nutifood, Ba Huan, ABC Bakery and Pham Ton.

SBV to get support for infrastructure

The State Bank of Viet Nam (SBV) will be supported by NEC Asia Pacific and MITEC Vietnam JSC in boosting its infrastructure and storage capacity.

This follows a contract titled "Procurement of Servers, Middleware and Database for the State Bank of Viet Nam" which was signed in Ha Noi yesterday.

The project, beginning in March, is expected to be completed in the next nine months.

With a total investment of over US$9 million, the project will equip and deploy the setup of a server system, middleware, network equipment, software and advanced databases in SBV's data and backup centre.

Speaking at the signing ceremony, SBV Deputy Governor Nguyen Toan Thang said, "I am very happy that SBV has chosen highly competent and experienced partners such as NEC Asia Pacific Pte Ltd Singapore, and Mitec Vietnam JSC. SBV hopes and believes NEC-MITEC will continue to coordinate to implement the project successfully as planned."

As part of the Financial Sector Modernisation and Information Management System (FSMIMS), a $71.83 million project financed by the World Bank, the project will provide the required infrastructure to upgrade current banking technologies, and to integrate with international banking systems.

It will strengthen the capacity to support the implementation of monetary and foreign exchange policies, as well as to enhance banking inspection processes of the bank.

The project will not only help support the operation of core banking systems but also involve training and knowledge transfer to local staff after the implementation.

Vivian Tay, Deputy Managing Director of Public Security of NEC Asia Pacific, said that the project was another milestone for them in Viet Nam.

"The FSMIMS is a key project and of paramount importance to facilitate linkages between SBV and financial intermediaries, as well as enhance domestic and cross-border exchanges within the financial markets," she said.

Mekong Delta tra fish farms get ASC certification

The first three fish farms raising tra fish for export in the Mekong Delta province of Vinh Long have received certificates from the Aquaculture Stewardship Council (ASC), opening the door to larger markets.

Covering a total area of 36.7 hectares, the facilities are run by the Co Chien, Nam Vang and Nam Song Hau companies in Vung Liem and Tra On district with the support of the Government’s programme to build safe tra fish farming areas meeting GlobalGap/ASC standards.

Founded in 2010 by the World Wide Fund and the Dutch Sustainable Trade Initiative, the ASC is a global organisation working with aquaculture producers, seafood processors, retail and foodservice companies, scientists, conservation groups and the public to promote the best environmental and social choice in seafood.

The ASC's aquaculture certification programme and seafood label recognises and rewards responsible aquaculture.

ASC certified enterprises will be assisted to transform their production practices and apply advanced technology in fish farming, thus minimising the use of chemicals in production.

More importantly, the enterprises will be put under the supervision of the surrounding community, raising their responsibility towards society and their workers.

Currently, Vinh Long counts 239 fish farming facilities operated by 58 firms and 192 households.

This year, the province will work harder to ease difficulties in capital, market, breeding stock and infrastructure for the fish farming sector in a bid to ensure the stable operation of 430 hectares of farming waters, striving for a total output of 100,000 tonnes.-

Ho Chi Minh City leads localities in power saving

Ho Chi Minh City saved 520 million kWh or 2.7 percent of its commercial electricity output with an elasticity coefficient of 0.6 last year, a local newspaper reported.

For three consecutive years (2011-2013), the Ho Chi Minh City Power Corporation (EVN HCMC) took the lead among localities nationwide in the attempt to reduce the elasticity coefficient of electricity consumption, contributing to increasing the efficiency of the use of electricity throughout the city.

The result was attributed to the corporation's efforts such as guidance for power companies in the city to encourage their customers to implement power saving solutions, according to Nguyen Anh Vu, Director of the EVN HCMC’s Community Relations Department.

It coordinated with the city’s steering committee for power supply and conservation and the Ho Chi Minh City Export Processing and Industrial Zones Authority (HEPZA) to inspect the use of electricity at large businesses and those based in export-processing and industrial zones in the city, Vu was quoted by the online Vietnam Economic News as saying.

In addition, the corporation held meetings with businesses to disseminate power saving solutions.

The city has been the first locality nationwide to establish an energy safety and efficiency information office responsible for providing energy saving solutions and basic knowledge about electrical energy. This office also introduced power saving products to all dwellers, especially students.

Vu said i n early 2013, the EVN HCMC launched the Power Saving Family programme for the period from 2013-2015. O ther models include Power Saving Streets programmes implemented in 25 streets, which saved more than 334,500kWh, and another programme that promoted the use of solar water heaters, with 6,335 solar water heaters installed, exceeding the target by 19.5 percent. A power saving programme has been implemented with the participation of over 24,000 students in the city.

In addition, the corporation has provided each power company with five LCD monitors for residential and public areas to promote power safety and efficiency information. It has coordinated with media organisations to produce public information broadcasts on power saving. In association with the municipal Department of Industry and Trade, it organised an international fair and exhibition on power saving technologies, energy efficient products and green energy.

Last year, it trained 700 officials from the Vietnam Fatherland Front Ho Chi Minh City chapter, 300 officials from the city’s Women’s Union and War Veterans’ Union, and 800 members of the Ho Chi Minh Communist Youth Union to advocate power savings. The corporation also opened 32 classes with more than 5,100 attendants to train grassroots-level activists in 24 districts.

In 2014, the EVN HCMC continues to modernise the power grid in the city and build a smart power grid to ensure its flexible and safe operation. This year, the city’s commercial electricity output is expected to reach 19.22 billion kWh and the power loss rate to be less than 5.3 percent, down 0.3 percent compared with 2013.

In 2013, the country saved an estimated 2.62 billion kWh, equal to 2.3 percent of the commercial electricity output, and the elasticity coefficient of electricity consumption with respect to the country’s gross domestic product (GDP) stood at 1.69.-

Ba Ria-Vung Tau withdraws port, warehouse project licences

The southern coastal province of Ba Ria-Vung Tau has withdrawn the investment licences of eight projects since the start of this year, mostly port and warehouse ones, worth 71.5 million USD.

Investors of these projects were urged to start construction but they failed to comply.

According to the provincial Department of Planning and Investment, local authorities will hold meetings with investors to enquire about the difficulties facing businesses as well as their expectations so as to take measures to support them.

However, the province will take back licences from projects that their investors are unable to carry out.

Ba Ria-Vung Tau province has granted investment licences to seven new local projects so far this year. It has set a target of permitting 17 domestic projects to be constructed in 2014.

In 2013, the province attracted 13 FDI projects worth 217 million USD and 29 others invested by local businesses worth 14 trillion VND (666.6 million USD).-

Vietnam attractive to Japanese investors: JETRO

Japanese businesses are looking closely at the investment environment in Vietnam and consider it an attractive market, according to Atsusuke Kawada, Chief Representative of the Japan External Trade Organisation (JETRO) in Vietnam.

According to Kawada, about 2,000 Japanese firms are operating in Vietnam and Japanese direct investment flow into the country in 2013 exceeded 5.7 billion USD.

A recent survey conducted by the JETRO revealed that up to 70 percent of Japanese businesses plan to expand their operations in the Southeast Asian country.

The survey also found that the country surpassed larger competitors like Indonesia, Thailand and the Philippines in the race to lure Japanese investment.

Most of the questioned Japanese businesses highly valued Vietnam’s growth potential, social and political stability, and low-cost labour force.

Many companies plan to build more factories in Vietnam and expand their operations outside major industrial parks, said Kawada.

He said the number of visitors to the page on Vietnam on the JETRO website, which provides information about countries worldwide, is equal to that of Thailand , and only second to China.

Vietnam also ranks second among ASEAN countries, after Thailand , in terms of membership of the Japanese business association, Kawada added.

The country holds an important position in the ten-member group, he said, noting that most of the Japanese businesses operating in Vietnam regard the country as a bridge to further their reach in the bloc.

Notably, low-cost labour is one of Vietnam’s advantages, with each worker receiving 3,000 USD per year on average in 2013, one eighth of what Japanese companies pay their employees in Singapore and half what they pay in Thailand.

Japanese businesses currently focus their investment on the processing and production on small and medium scale, but they also have their eyes on the high-tech sector.

Dr. Nguyen Dang Minh from Vietnam National University – University of Economics and Business, said the strong performance of Japanese businesses reflects Vietnam’s favourable and suitable business climate.

This is an opportunity for Vietnam to compete with others in the region to acquire Japanese investment, he said.

However, Minh also proposed Vietnam create more preferential policies, especially in tax, to raise the country’s competitive edge while improving its infrastructure system.

He underlined the need for the country to establish a national programme on attracting Japanese investment and organise more exchanges for the two countries’ businesses.

Vietnamese labourers should be equipped with not only technical and language skills but also understanding the Japanese business culture, he said.

Kawada also suggested Vietnam places more importance on the support industry, adding that Japanese experts have provided technical support and share experience with Vietnam in this field.

The JETRO has made a list of outstanding Vietnamese businesses operating in the area to introduce to Japanese firms, thus helping them establish connections, he said.

According to statistics released by the Foreign Investment Agency under the Ministry of Planning and Investment, there were 2,103 Japanese-invested projects worth a total of 34.5 billion USD in Vietnam in 2013.

With the amount of added capital climbing from 1.2 billion USD in 2012 to 4.5 billion USD in 2013, Japan maintains its number one position among 100 countries and territories investing in Vietnam.-

Southern hub strives to keep economic recovery in 2014

Overcoming the country’s economic difficulties and the global financial recession, last year Ho Chi Minh City maintained a stable growth, making up one-third of the national GDP. In 2014, the city is doing its utmost to maintain this recovery.

With the current national economic growth, the country's economic hub in the south has targeted a GDP growth rate of between 9.5 and 10 this year. It will continue to implement policies on tax exemption and payment extension to help enterprises recover trading and production.

“Municipal authorities will keep trying to clear inventories, remove obstacles for businesses, and promote trade and expand export markets through trade promotion programs, encouraging people to use Vietnamese products, and practicing thrift. Six breakthrough programs will be implemented with priority given to developing science and technology, stepping up exports, and ensuring social security,” Le Hoang Quan, Chairman of the municipal People’s Committee, was quoted as saying by Radio the Voice of Vietnam (VOV).

This year, the city will focus on the improvement of the business environment and competitiveness on top of supporting enterprises with information sources and simplifying administrative procedures. With advantages over services, it will continue policies to speed up e-commerce, apply modern distribution channels, and provide capital for enterprises.

To reach the GDP and export growth targets, the banking sector should be more active in handling difficulties for businesses in which capital sources should be prioritised to the production of the city’s key items, said Nguyen Hoang Minh, Deputy Director of the State Bank of Vietnam's Ho Chi Minh City branch.

Industry restructure will continue in the direction of reducing mining and increasing processing to turn out products of high added value. More policies will be designed to encourage multi-national economic groups to invest in the city using advanced technologies. The city is boosting investment in the second phase of the high-tech zone, prioritising the development of microelectronics, IT, telecommunications, precise mechanics-automation, and nano- and bio- technologies.

Le Hoai Quoc, head of the Ho Chi Minh City high-tech zone management board, affirmed: “We’ll focus on auxiliary industries for much-sought-after products. To this end, more supportive policies are needed to make these items part of Vietnam’s exports."

The city will develop safe agriculture through the use of high- and bio-tech as it wants to create a favorable environment for the municipal economy to grow sustainably in the future.-

Mekong shrimp farms face power shortfall

While demand for white-leg shrimp is running high, farmers of this crustacean species in the Mekong Delta region’s coastal provinces are struggling with a shortage of electricity for their farms.

Soc Trang Province’s Department of Industry and Trade said at a meeting on Wednesday that around 338 kilometers of power line would need to be upgraded at a total cost of over VND85 billion to serve shrimp farming in the province this year.

However, Nguyen Thanh Duy, chairman and general director of Southern Power Corporation (EVN SPC), said that in recent years the firm had spent big on the 110-kV Ha Tien-Phu Quoc submarine power line in Kien Giang Province, and grid upgrades for shrimp farming in Bac Lieu and Ca Mau provinces and for dragon fruit cultivation in Binh Thuan, Long An and Tien Giang provinces.

“We’ve had to spend a great amount of money, so we are unable to fund new projects,” Duy said.

Duy agreed with Soc Trang Province’s plan to upgrade and improve 52 kilometers of medium-voltage line, nearly 156 kilometers of low-voltage line and 138 transformer stations at a cost of some VND54 billion.

Of this amount, EVN Soc Trang and EVN SPC will provide VND10 billion and VND15 billion respectively and the province’s reciprocal capital will account for the rest, he added.

No matter how the plan will play out in Soc Trang, the electricity shortage is still ongoing.

According to rough estimates of Soc Trang, Bac Lieu, Ca Mau, Tien Giang and Ben Tre provinces, there is over 20,000 hectares of brackish water shrimp farming affected by the electricity shortfall.

In Soc Trang Province alone, around 9,200 hectares in Cu Lao Dung, Long Phu, Tran De, My Xuyen, My Tu and Vinh Chau will be affected.

Tran Thanh Nghiep, vice chairman of Soc Trang Province, said the electricity shortage for brackish water shrimp farming in the past resulted from a shift from prawn to white-leg shrimp. This will lead power consumption to surge 5-6 times due to shorter farming periods and a high density of white-leg shrimp cultivation, he added.

Nghiep said Soc Trang Province’s export revenues last year rose to an all-time high of over US$520 million, mostly contributed by shrimp export. “If the electricity shortage continues, the province’s shrimp farming and exports will face huge difficulties,” he said.

Ministry proposes to raise prices on wind power

The Ministry of Industry and Trade proposes increase on wind power price to attract foreign investment, said Pham Trong Thuc, director of the ministry’s Renewable Energy Department on February 20.

Power corporations currently purchase electricity generated from renewable energy sources at US$7.8 per kilowatt hour, said Thuc during a seminar about wind power development in HCMC.  This rate is lower than the world’s average price for renewable energy.  It has been unable to increase due to social welfare.

Vietnam’s aim is to generate 1,000 megawatts of wind power by 2020.  This will account for 5.6 percent of the country’s total electricity. The country aims to increase this number to 6,200 megawatts by 2030, which will account for 9.4 percent of the country’s total electricity.

The Ministry of Industry and Trade is studying Decision 37 and changes to wind power price in order to reach the target.

The ministry will submit the decisions for approval by the end of 2014.

The ministry will also seek sponsorship for projects estimating Vietnam’s wind potential in the mainland and offshore.

Vietnam’s information technology giant FPT Corporation will make vigorous investment steps abroad this year to expand its business scale rather than focusing on the home market that has become crowded, said the company’s CEO.

General Director Bui Quang Ngoc told the media at a post-Tet meeting in HCMC on Wednesday that making outbound investment will be one of the main paths that FPT would walk in the coming time.

FPT since 2008 has set the target to obtain US$1 billion in annual revenues, and the domestic IT market has become small for the group to realize its ambition.

“It’s time for FPT to enter a bigger, more challenging playground to sustain its high growth like in the past years,” Ngoc told assembled reporters. Last year, the group’s revenues from overseas markets totaled US$130 million, he said.

Ngoc stressed that Japan, the United States, Singapore, Myanmar, and some other emerging markets will be the main focus for FPT’s investment. FPT targets to obtain an annual revenue of between US$350 million and US$400 million from abroad.

Apart from attracting more outsourcing orders from main markets like Japan, Europe and the U.S., FPT will also develop more applications based on social network or mobility platforms, as well as big-data analysis and cloud computing solutions.

Apart from establishing subsidiaries in foreign markets, FPT will also pursue merger and acquisition activity, buying foreign firms to enter overseas markets quicker, especially Japanese firms.

Last year, FPT Software, a subsidiary of the IT group, struck a deal with Japan’s Recruit Technologies, which specializes in providing web-based trade promotion solutions, to help the Vietnamese IT firm to boost supplies of packaged services to the Japanese market.

In the U.S., FPT has launched a research and development center to boost its technology capacity and prepare a springboard for the group to approach international customers stateside. In this market, FPT has won contracts to supply cloud computing services to customers in the areas of aviation and insurance. Asked if FPT is taking risks when marching overseas, Ngoc said there are always challenges, but “this is the strategy FPT has set out and will pursue.”

“We have taken prudent preparations for sailing to the outer sea, with the crucial factor being our workforce with 6,500 programmers and IT experts currently working in 17 countries. In terms of technology, we are now partnering with major technology giants like Microsoft, Cisco, IBM and Oracle,” Ngoc said.

FPT reaped strong business results last year, with some VND28.65 trillion, or roughly US$1.36 billion in revenues, rising 12% year on year, while its pre-tax profit amounted to VND2.5 trillion after-tax profit VND2.06 trillion.  IT and telecom are two key business spheres of the IT group.

Software exports last year brought the group VND2.15 trillion, or over US$100 million, a strong rise of 24% against 2012.

State representatives at firms must speak foreign language

Those chosen to represent the State holdings at enterprises with foreign involvement must be fluent in foreign languages and can work directly with foreign partners, instead of being through interpreters, the Ministry of Finance says in a new circular.

Circular 21/2014 issued by the ministry last Wednesday rules that representatives must have a good command of spoken foreign languages to work directly with foreign partners. This requirement will affect numerous officials as many of them do not speak English or any other foreign language.

Representatives who cannot speak foreign languages as required must be replaced within 60 days after the circular takes effect.

The circular also specifies that representatives of State interests in other enterprises must have obtained tertiary education in the professional fields they work, must have at least three years’ experience in the fields in terms of financial and organizational management.

To prevent conflicts of interest, representatives must not have relationship of kinship or marital relationship with people holding managerial positions in the enterprises where they represent the State holdings.

Representatives must report to the owner of State interests the operational situation of the enterprises or their wrongdoings, if any, according to the circular. Meanwhile, such enterprises are legally bound to provide sufficient information regarding their business operations to the representatives.

Shipping firms not ready for ASEAN single market

Vietnamese shipping firms will have to face tougher competition in the ASEAN single shipping market as they are not ready for the new playground, experts said at a workshop on Thursday.

Speaking at ASEAN single shipping market – Opportunities and Challenges, Do Xuan Quang, chairman of the Vietnam Logistics Association, said that ASEAN nations have agreed to establish a common economic community in 2015. In addition, the nations will reach an agreement for a single shipping market, facilitating free circulation of goods, services, investment capital and manpower.

The market will bring about a lot of opportunities and challenges for the local shipping industry. However, local firms have yet to prepare for the market, Quang said.

Concerning the positive side, Dr. Jose Lelis Tongzon, dean of the logistics faculty of South Korea’s Inha University, said that Vietnamese firms will have opportunities to do business in a larger market.

They will be able to cooperate with each other to exchange technologies and management experiences. Customers will also have more options of low charges and better quality offered by foreign shipping lines.

However, as most Vietnamese firms are small and medium-sized enterprises (SMEs), they will face huge obstacles in the market. Small firms with bad services may be eliminated from the market.

In addition, foreign firms will have more advantages than local enterprises. Vietnamese enterprises still have problems with port infrastructure and human resources.

To help SMEs compete with foreign enterprises, Tongzon said that local enterprises must cut shipping charges and improve service quality.

Shipping enterprises should pay attention to cooperation among ports, transport and logistics enterprises to link up a chain and reduce transport costs, he said.

WGC: Vietnam’s gold demand jumps in 2013

The nation posted up total gold demand of 92.2 tons in 2013 with a value of US$4.16 billion, a 20% rise compared to the previous year, according to the latest report of the World Gold Council (WGC).

Last year, the nation ranked seventh worldwide in terms of gold consumption. Vietnam imported 80.3 tons of gold for gold bar production and 11.9 tons for making jewelry.

Meanwhile, jewelry companies are barred from importing material gold directly given current laws.

Global gold demand, in contrast, dropped 15% to over 3,700 tons worth US$170 billion last year as exchange traded funds sold the precious metal and central banks reduced gold purchases.

China, India, the U.S., Turkey, Thailand and Germany reported higher gold demand than Vietnam.

Earlier, a WGC member told the Daily that gold consumption of local people actually fell last year. But as local banks needed 30 tons of gold to close gold accounts, the nation’s gold demand increased.

Vietnam-UK trade up nearly 20%

Vietnam Customs statistics show two-way trade between Vietnam and UK reached a very promising US$4.27 billion in 2013, a year-on-year increase of 19.48%.

The value even exceeded the US$4 billion target outlined in their 2010 Strategic Partnership Agreement.

Of the total, Vietnamese exports hit US$3.69 billion, up 21.94%, and its imports were US$573.27 million, up 5.7%.

Mobile phone handsets and components topped the list of Vietnamese exports to the UK, raking in US$1.24 billion. They were closely followed by footwear (US$543 million), garments (US$471 million), computers and components (US$400 million), wood and timber products (US$217 million), seafood (US$143 million), plastic products (US$88 million), and coffee (US$86 million)

Meanwhile, the major Vietnamese imports included machinery and equipment (US$194 million), pharmaceuticals (US$79 million), pesticides (US$42 million), chemical products (US$34 million) and iron and steel scraps (US$24 million).

Vietnam often maintains a trade surplus with the UK.

UK Trade Counselor Piers Craven has said the UK wants to balance trade with Vietnam and encourages more Vietnamese businesses to invest in the UK.

The Director of the UK Trade and Investment (UKTI) program in Vietnam, Douglas Barnes, has believed bilateral trade will increase in the future because trade is a key priority in the strategic partnership between the UK and Vietnam.

At the seventh meeting of the Vietnam-UK Joint Economic and Trade Committee (JETCO) held in Hanoi on January 7, the two sides discussed measures to remove difficulties for Vietnamese businesses exporting wine and dragon fruits to the UK, and strategies to strengthen market management.

Japan considers Vietnam a potential market

A Japan External Trade Organization (JETRO) survey shows 70% of Japanese firms investing in Vietnam plan to expand their operations to capitalize on investment preferences.

Most of them explained the reason behind their expansion plans is to increase sales revenues. In particular, non-manufacturing enterprises are attracted by Vietnam’s steady growth and potential market.

The country also has an abundant supply of labour and socio-political stability.

However, the JETRO report points out high risks the Vietnamese investment climate incurs, most concerning legislation, administrative procedures, taxation policy, customs procedures, and labour costs.

On the other hand, the localisation rate in Made-in-Vietnam products is rather low, at 32.2% compared to 64% in China, 53% in Thailand, 42% in Malaysia, and 41% in Indonesia.

Hirotaka Yasuzumi, HCM City-based JETRO Office managing director, said that Vietnam needs to accelerate policy and institutional reforms which concern Japanese businesses most.

He suggested the government assist local and foreign businesses in support industries to improve the competitive capacity, through appropriate interest rate and human resource development policies.

Hirotaka Yasuzumi acknowledged Vietnam’s efforts in holding dialogues with businesses and timely addressing their concerns, considering this an effective solution for investment attraction.

The survey examined 1,000 Japanese companies operating in 20 countries and territories in Asia and Oceania.

Through the survey, JETRO wants to gain a better understanding of Japanese operations in Asia and Oceania, so that it comes up with recommendations to facilitate their operations.

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