Vietnam promotes trade, tourism in Chile

Vietnamese Chargé d'affaires a.i. in Chile Nguyen Minh Anh introduced the potential for cooperation between Vietnam and Chile in trade and tourism at a seminar in Chile on January 19.

Anh highlighted the remarkable growth in bilateral trade exchange recently, with value reaching 1.28 billion USD. He noted that Vietnam is the 10th biggest foreign trade partner and the second largest Southeast Asian market of Chile.

The diplomat underlined the trend among young Chilean entrepreneurs to seek investment opportunities in Southeast Asia, including Vietnam.

A representative of the Chilean Ministry of Foreign Affairs said the Vietnam – Chile free trade agreement, effective in 2014, has made significant contributions to increasing trade exchanges between the two nations.

Vietnam can serve as a gateway for Chilean products to enter ASEAN markets, while Chile as a bridge connecting Vietnam and Latin America.

The seminar, jointly hosted by the Embassy of Vietnam and the Manufactured Product Exporters Association of Chile (ASEXMA) also aimed to announce the cooperation opportunities between the two countries at the 28th Vietnam International Trade Fair (Vietnam Expo 2018) slated for April.

It drew a crowd of local enterprises operating in aquaculture, food processing, agriculture, energy, among others.

Vietnam, South Africa have potential for multifaceted cooperation

Vietnam and South Africa hold huge potential for boosting cooperation in many fields, including bringing bilateral trade turnover to two billion USD a year, said an official of the Vietnam Chamber of Commerce and Industry (VCCI).

Speaking at a seminar promoting South Africa’s trade, investment and tourism held in HCM City on January 19, Deputy General Director of VCCI’s Ho Chi Minh City branch Nguyen The Hung said the most promising field for bilateral partnership is mining and mining technology.

He added that Vietnam also wishes to work with the African country in thermal electricity, automobile manufacturing and assembling and food processing, among others.

Currently, Vietnam’s major exports to South Africa include mobile phones and components, computers, electronic devices, footwear, rice, pepper corns, cashew nuts, coffee and wood furniture. Meanwhile, the country imports plastic, garment-textile materials and leather, chemical products, metals, iron and steel.

Trade Counsellor at the South African Embassy in Vietnam Mat Matiwane said his country has been working to create optimal conditions for businesses of the two countries to seek investment opportunities. He also voiced his hope that Vietnamese firms will enhance investment and trade activities in seafood, shipbuilding and especially tourism.

The major economic sector of South Africa is mining and exporting minerals, according to Matiwane. Besides, the country is striving to develop trade, services and information technology, which could serve as foundation for cooperation of the two countries’ enterprises.

Vietnam – South Africa trade turnover increased five times during the recent 10 years, from 192 million USD in 2007 to 1.03 billion USD in 2016.

Petrol prices increase by over 400 VND per litre

The price of bio-fuel E5 increased by 429 VND while those of diesel 0.05S and kerosene increased slightly by 430 VND and 448 VND per litre, respectively in the latest regular adjustment of petrol and oil prices on January 19.

The Ministry of Industry and Trade and the Ministry of Finance announced that the prices of E5 are not higher than 18,672 VND per litre, and those of diesel 0.05S and kerosene should not be higher than 15,959 VND per litre and 14,560 VND per litre, respectively.

The changes took effect from 15:00 on January 19.

The two ministries also decided to keep using the price stabilisation fund for E5 bio-fuel at 857 VND per litre while the use of the fund for diesel was 400 VND per litre, unchanged from the previous adjustment.

The Ministries of Industry-Trade and Finance conducted a review of fuel prices every 15 days to adjust the prices in accordance with fluctuations on the world market.

The average global price of petrol products during the last 15 days to January 19 was at 76.243 USD per barrel for RON 92 and 80.214 USD for diesel. 

This is the first increase of the petrol and oil prices in 2018. In 2017, petrol and oil prices were adjusted 24 times, including nine hikes and nine drops.

HCM City keen on hi-tech agriculture

HCM City is urging farmers to adopt hi-tech agricultural techniques in an aim to increase productivity, quality and competitiveness, Lê Thanh Liêm, vice chairman of the city’s People’s Committee, said.

The city is striving to become a centre for domestic animal breeding and seedling production in the south, Liêm said at a conference held on Friday in the city on the agriculture and rural development sector.

Last year, agri-forestry-fishery production achieved strong growth, amounting to VNĐ19.48 trillion (US$856.26 million), up 6.3 per cent year-on-year, he said.

The agriculture sector aims for a growth rate of 6.3 per cent this year, he added.

Liêm asked the city’s Department of Agriculture and Rural Development to work with the Agricultural High-tech Park and agencies to support enterprises and farmers so they can access high-quality breeding, investment capital and technology transfer.

Last year, the areas adopting high-tech agriculture increased to 389ha compared to only 101ha in 2016.

Enterprises in the city last year exported a total of 281 tonnes of high-quality plant seeds of various kinds, a year-on-year increase of 25 per cent.

Exports of ornamental fish rose 13.8 per cent year-on-year to reach revenue of $20 million.

The volume of fruits and vegetables exports last year amounted to more than 453,400 tonnes, valued at VNĐ456 billion ($20.04 million).

Seminar hails S Africa, VN trade     

There is enormous potential for investment and trade between South African and Viet Nam, according to political counselor at the South African Embassy in Ha Noi, Mat Matiwane.

Speaking at a seminar on trade, investment and tourism promotion by South Africa in HCM City on Friday, he said the two countries have something to offer each other.

“South Africa is a major exporter of mineral-based commodities, which could assist Viet Nam in its expanding industrialisation.”

Strong growth in domestic consumption fuelled by increasing income levels in both nations is creating demand for their respective products, he said.

“Infrastructure development that took place in Southern Africa has also resulted in joint ventures between service providers such as Viet Nam’s Viettel in our neighbouring country.”

Nguyen The Hung, deputy director of the Viet Nam Chamber of Commerce and Industry’s HCM City office, said trade between Viet Nam and South Africa has increased significantly.

It was worth US$924.5 million in the first 11 months of last year, with Viet Nam’s exports accounting for over $704 million, he said.

“As of November last year South African firms had invested $1.22 million in seven projects in Viet Nam while Vietnamese firms had invested $1.6 billion in two projects in South Africa.

"Despite the great strides in bilateral trade and investment relations, trade between Viet Nam and South Africa remains largely untapped.”

In addition, South Africa, with its many spectacular sights and cool weather around the year, remains an unexplored destination for Vietnamese tourists, he said.

Matiwane said: “It seems there is a lack of information on both sides about each other’s business opportunities as well as social and cultural environments. One cannot seize an opportunity if one does not know that it exists.”

Some attendees pointed out that the difference in payment methods -- with South African firms wanting payment in advance while Vietnamese companies prefer letters of credit -- is another obstruction to trade.

Matiwane listed areas in which the two sides could enhance co-operation, like aquaculture, shipbuilding, advanced manufacturing, infrastructure, metals, mining, furniture, agribusiness, garment and textile, and footwear.

There is huge potential for export of Vietnamese agricultural products to his country, especially fruits it does not have, he said.

South Africa boasts stable economic growth, an abundance of natural resources and modern infrastructure, and offers investment incentives, and could also act as a gateway for Vietnamese products to the rest of the continent, he added.

He also encouraged investors and trade partners to “take a long-term view to co-operation” to ensure that their investment in trade with South Africa is sustainable and profitable.

Viet Nam’s main exports to South Africa are mobile phones and accessories, computers, electronic products, footwear, coffee, rice, pepper, wooden products, and cashew nuts.

It imports iron and steel, raw materials for footwear and garment and textile industries, chemicals and plastic materials.

The meeting was organised by the VCCI in collaboration with the South African embassy in Viet Nam. 

Steel Corporation committed to finish 2017’s leftover projects     

The Vietnam Steel Corporation (VNSTEEL) needs support from the Government to resolve any remaining problems associated with its two key projects, general director Nguyen Dinh Phuc said at a meeting on Friday.

VNSTEEL’s focus this year will be completing the two projects of Viet Trung Metallurgy and Mineral Co Ltd (VTM) and Thai Nguyen Iron and Steel JSC (TISCO), especially in TISCO’s second expansion phase, he said.

Phuc said that the plan is part of the Government’s efforts to improve domestic long rolled steel and plated steel production and in line with the Ministry of Industry and Trade’s efforts to support local steel producers in 2018.

He conceded that VNSTEEL met with difficulties during the expansion in 2017, as well as in VTM’s Lao Cai Iron and Steel Plant Project, so they both fell behind schedule.

VNSTEEL’s negotiations and final settlement with contractors from the China Metallurgy Group were also fraught with difficulties. Due to the dispute’s complexity, legal support from consultancy companies was sought, and VSC also asked the Ministry of Justice for help in the matter.

On another note, the VTM managed to complete its negotiations and amendments with foreign joint venture partners on Quy Sa Iron Mine Project by the end of 2017, and is now looking forward to the official signing, after receiving approval from its board of directors.

Other investment projects from VNSTEEL’s subsidiaries like Phu My Flat Steel Company, Nha Be Steel JSC and Thu Duc Steel JSC, are still undergoing slow appraisal and approval, mainly due to difficulties in owner’s capital and investment certificate procedures.

At the same time, VNSTEEL will work with representatives at TISCO on the latter’s State divestiture, decreasing from 65 per cent to 21.5 per cent of its charter capital, which is expected to be completed in 2018’s first quarter.

According to VNSTEEL’s end-of-year report, in 2017, its total accumulated revenue hit VND18.8 trillion ($837 million), while combined profit reached VND650 billion ($28.9 million).

The report also stated that last year, 22 out of 36 of its member companies completed or exceeded their business goals, at much higher growth rates compared to 2016. 

Fuel prices hiked on increase in global prices     

The retail price of biofuel E5 RON 92 rose VND429 to VND18,672 (US$0.82) per litre from 3pm Friday afternoon, per an announcement by the ministries of industries and trade and finance.

This was the first increase in retail petrol price from the beginning of this year when biofuel E5 RON 92 completely replaced petrol RON 92 in Viet Nam.

Diesel oil increased by VND430 to VND15,959 per litre, kerosene rose VND448 to VND14,560 per litre and mazut oil inched up VND150 to VND12,765 per kilogramme.

According to the Ministry of Industry and Trade, global oil and petrol prices were on an uptrend. The price of RON 92 which was used to produce biofuel E5 was at $77.35 per barrel on January 10 – the highest level since 2016.

Prices of petrol RON 95 have seen significant increase by retailers after the elimination of petrol RON 92.

Petrol RON 95 was sold at up to VND20,990 per litre, according to petrol retailer Petrolimex.

Prices of RON 95 of Euro 3 emission standard and Euro 4 emission standard were now higher than biofuel E5 RON 92 by VND1,850 and VND2,050 per litre, respectively, triggering concerns that this was intended to promote the sale of biofuel.

Recently, Deputy Prime Minister Vuong Dinh Hue asked the two ministries to closely monitor the consumption of biofuel E5 RON 92 and RON 95 – the only two types of petrol in the market - in the first quarter of this year to announce basic prices.

Reviews of fuel prices are set to be announced every 15-days to keep up with swings in the global market. 

Conference highlights strong ties between Viet Nam, India     

Bilateral relations between Viet Nam and India have developed significantly over the past years, especially in trade, agriculture and food processing.

This was revealed at a conference in Uttar Pradesh in India on Thursday. The conference was held as part of the ongoing Global Food & Beverage Show of India.

Two-way trade between the two countries had grown from US$1.53 billion in 2007 to $7.63 billion in 2017. Vietnamese exports to India in particular increased by 21 times from $180 million to $3.76 billion.

Viet Nam exports coffee, pepper, cashew nuts and seafood to India, among others, while it imports meat, aquatic products, fruits, vegetables and animal feed from the Indian market.

In his speech at the conference, Bui Trung Thuong, head of Trade Office at the Vietnamese Embassy in India, said there was scope for the two countries to accelerate bilateral co-operation in three reviewed areas.

Do Huu Huy, deputy head of the Asia-Africa Market Department from Viet Nam’s Ministry of Industry and Trade, who was also present at the conference, agreed. He emphasised the importance of organsing trade promotion programmes in both countries, facilitating participation of the two countries’ business communities in trade fairs and exhibitions, and speeding up the exchange of trade information to expand bilateral trade.

At the event, 30 Vietnamese enterprises in food and food processing, agriculture, forestry and fishery heard about the potential of the Indian food and beverages sector and met directly with Indian traders to explore new business opportunities.

The food and beverages industry is one of the sectors that India gives priority to. The country is now the world’s leading producer of many agricultural commodities such as milk, rice, wheat, tea, cane sugar and spices. India’s food processing industry is valued at $258 billion. The country’s agricultural product and food export is predicted to reach $70 billion by 2020. 

Phu Yen ready for an explosion of tourism: PM     

Investors should turn the potential of central coastal Phu Yen Province into money, Prime Minister Nguyen Xuan Phuc said on Friday.

Speaking at the largest investment promotion conference held in the province, Phuc asked the locality to continue to use tourism as its development momentum.

“The province should attract big and prestigious investors while diversifying and improving tourism quality," he said. "It should also enhance links with other localities inside and outside the country.”

Phu Yen has a north-south road system, railway, airways and seaway. It also has diversified natural resources, including sea economic sectors, hi-tech agriculture, agro-forestry, minerals and renewable energies.

Phuc highlighted the advantages of the province and its dynamic authorities in welcoming “sunrise” development.

The PM said he valued the province’s efforts in developing economic infrastructure and improving the investment environment.

“With its advantages and hard-working people, Phu Yen can surely achieve sustainable and rapid development in the central and Central Highlands regions,” he said.

Phuc urged Phu Yen to ensure stability, transparency and equal competition in accessing resources and business opportunities. It should also pay attention to start-ups, especially by young people in the rural areas.

“Phu Yen was requested to follow the country’s reform flow as well as taking advantages of the Fourth Industrial Revolution in management, building e-governance and removing bureaucracy,” he added.

The province was asked to quickly resolve investment barriers, while improving its provincial competitiveness index (PCI) and public administrative performance index (PAPI) and become known as trustworthy.

He said Phu Yen should enhance regional associations, especially with Binh Dinh, Khanh Hoa, Lam Dong and Dak Lak which could supplement advantages for the province.

It could also mobilise social resources to attract investment of clean and hi-tech industries.

He expected the province to develop seafood and prevent illegal exploitation. Businesses and investors should protect the environment and traditional culture.

Secretary of the provincial Party Committee, Huynh Tan Viet, said the province had strong commitments to helping investors.

Between 2011-17, Phu Yen received 284 investment projects, including 19 foreign direct investments with total registered capital of US$6 billion.

“The province will give priorities to sea eco-tourism, culture and building distinctive tourism products," Viet said.

"Phu Yen will also focus on key sectors of finance, logistics, information and telecommunications; support industries, energy and agro-forestry processing.”

Viet added that the province would seek investment in urban infrastructure, housing and real estate and establish special cultivation areas with post-harvest and processing technologies.“Investors in the province are our citizens. Their success will be ours,” he added.

At the event, the provincial People’s Committee approved 17 investment licences worth a total of VND12.4 trillion ($558 million) and signed memoranda of understanding with others.

These have been big scale projects, contributing to the province’s development and providing jobs for local people.

On the same day, PM Phuc attended the inauguration of the Da Rang- Song Chua Bridges to ease congestion at the south of Tuy Hoa City and expanding Phu Yen Urban Area.

The Ministry of Culture, Sports and Tourism also announced the PM’s decision to approve development planning of Xuan Dai Bay National Tourism Area by 2030.

Accordingly, Phu Yen will develop the area based on its advantages of the Ganh Da Dia (Sea Cliff of Stone Plates) to develop national tourism products.

More than 500 delegates, including those from 260 domestic and international enterprises attended the conference. 

KIDO Food remains ice cream market leader     

KIDO Food continued to lead the ice cream market with growth of 16 per cent last year, the company said on Thursday.

It quoted a report from Euromonitor saying that last year the average growth in the ice cream market was 14.7 per cent.

The strong cash flow in the ice cream segment boosted the company’s revenues last year to nearly VND1.5 trillion (US$65 million), a 7 per cent rise from 2016.

Some new products also contributed to the increase in revenue, the company said.

The new products, including frozen french fries, pushed revenues from frozen foods up by 77 per cent.

KDF reported profit after tax of VND152 billion ($6.6 million), a 6.7 per cent increase.

The company said it would focus on R&D to achieve higher growth and profits.

KIDO Food, a member of the KIDO Group, was established in 2003 after the latter bought the Wall’s ice cream plant from Unilever.

The company has since established some iconic brands like Merino and Celano.

In 2016, the company entered the frozen food industry and has periodically been adding new products to expand its portfolio. 

Securities company SSI sees surging growth     

Saigon Securities Inc. (SSI) reported pre-tax profits of VND380.8 billion (US$ 16.7 million) on revenues of VND1.018 trillion ($44.8 million) in the fourth quarter of last year, up 344.7 per cent and 66.8 per cent year-on-year.

With this the whole year pre-tax profit rose 20.5 per cent to VND1.27 trillion on revenues of VND2.95 trillion, a 19 per cent rise.

The company has assets of VND18.24 trillion, up 34 per cent from a year ago.

Revenues from brokerage in the fourth quarter surged 263.7 per cent year-on-year to VND311.4 billion.

Revenues from lending and receivables (margin lending and advances on securities sales) contributed an important part of revenues, rising 37.4 per cent to VND150.8 billion, accounting for 32 per cent of securities services revenues.

The stock markets ended 2017 with the VNIndex up 48 per cent, the highest increase in 10 years, with average liquidity for each trading section rising to nearly VND5 trillion, a 63 per cent rise.

Last year was a successful year for SSI as it maintained the leading position on both HOSE and HNX, with its brokerage market share 15.26 per cent, up from 13.04 per cent in 2016.

Its HOSE market share was 17.97 per cent in the fourth quarter, its highest ever. 

VinFast to showcase models at Paris Motor Show     

VinFast Manufacturing and Trading Company Limited, a subsidiary of Vingroup, completed the contract of two model sedan and SUV cars with leading designer Pininfarina on Thursday.

The contract was worth US$5 million. The models were developed based on two designs selected by Vietnamese consumers in the contest “Choose the car also,VinFast” in October last year.

VinFast has acquired intellectual property rights from automaker BMW for car production.

With co-operation agreements with reputable partners in the field of automotive design and production, VinFast continues its commitment to roll out quality, modern, safe and aesthetic models in the Vietnamese market, on a par with world-class car models.

Earlier, the company also completed a partnership agreement with Magna Steyr and AVL, two of the world’s leading automobile technology and manufacturing consulting firms.

The model cars developed by VinFast, under the slogan “Vietnamese identity — Italian design — German engineering — International standard,” will be exhibited at the Paris Motor Show 2018 to be held in France in October. VinFast will introduce them in Viet Nam in December.

In addition to this, VinFast will organise a vote to gather ideas from customers for new models after it completes production of the sedan and SUV models. The scope of this referendum will be extended to the international audience, affirming pride in the Vietnamese car.

In October last year, VinFast presented 20 sedan and SUV designs and officially launched a public contest to select the two favourite car models in Viet Nam.

Nguyen Viet Quang, deputy chairman of Vingroup, said the firm would begin accepting orders from early 2019, gradually moving to export.

“Born after other automakers, VinFast is keen to filter the essence of the global automobile industry into its first product. We have a process in place to learn and select partners in order to roll out high-quality, safe and modern products that will have Vietnamese identity but international standards.

VinFast is confident of introducing its first two models at the Paris Motor Show, where most of the producers choose to stage their work. This event will also contribute to marking the Vietnamese automobile brand in the international arena,” said Quang.

VinFast is urgently building a 500,000sq.m factory in northern Hai Phong City’s Dinh Vu-Cat Hai Economic Zone, which is planned to be completed by July this year. Along with that, the company also focuses on improving human resources and product development. It has signed contracts with leading companies in the field of design, supplying solutions for car manufacturing, technology, equipment, components and auto parts and training of technicians, such as Bosch, Siemens, Pininfarina, Ital Design, Torino Design, Zagato, BMW, Magna Steyr, AVL and German Chamber of Commerce and Industry in Viet Nam.

These efforts are aimed at accelerating the process of transforming the car from a piece of drawing to reality, confirming the serious investment and commitment of Vingroup to introduce a Vietnamese car with international standards.

VinFast stands for “Viet Nam — Style — Safety — Innovation — Pioneer.”

The VinFast automobile manufacturing complex, the first of its kind in Viet Nam, started construction on September 2 last year in Hai Phong, with a designed capacity of 500,000 units by 2025 and expectation to become the leading automobile manufacturer in Southeast Asia.

VinFast aims to manufacture cars that are a mix of modern style, comfortable quality, safety and international-class design, and are suitable to Vietnamese taste.

Its first products will be available in the market in the third quarter of next year. 

VN-China trade likely to reach $100 billion

Bilateral trade between Việt Nam and China will touch a record high of US$100 billion this year, after reaching $93.69 billion last year, experts predict.

Last year’s two-way trade was $21.79 billion higher than in 2016 and accounted for 22 per cent of Việt Nam’s total import-export value, according to statistics from the General Department of Customs.

Vietnamese exports to China experienced a significant yearly increase of 61.5 per cent to over $35.46 billion. That helped to reduce Việt Nam’s trade deficit with China to $22.76 billion last year from $28 billion in 2016.

Telephones, a major item of export, recorded the highest turnover of $7.15 billion, up $6.35 billion compared to that of the previous year, according to the latest data.

Last year also saw 13 staple products with export earnings of more than $1 billion, up by six staples against the previous year. The new items include seafood, with nearly $1.1 billion in export earnings, rice ($1.02 billion), rubber ($1.44 billion) and footwear ($1.14 billion).

The Ministry of Industry and Trade says bilateral trade ties between the two countries have been growing in the past few years.

China is one of Việt Nam’s largest trade partners and is also a key export market, the ministry said.

Besides trade, China is currently one of the 10 biggest foreign investors in Việt Nam, with a total registered investment capital of more than $12.1 billion.

During a visit to China last May, President Trần Đại Quang urged Vietnamese and Chinese firms to continue initiating innovative ideas to create a new momentum for bilateral economic partnership.

He suggested Chinese companies invest in infrastructure, logistics and electronics and support industries while protecting the environment and engaging in social activities in Việt Nam.

President Quang asked the two sides to facilitate access to each other’s markets.

RoK’s imports of Vietnamese farm produce soars after 2015 FTA

The Republic of Korea (RoK)’s imports of Vietnamese agricultural and livestock products rose by 34 percent in two years since the two countries’ free trade agreement (FTA) took effect in December 2015.

According to the data compiled by the Korea Rural Economic Institute (KREI), the RoK imported 980 million USD worth of farm and livestock products from Vietnam in 2017, compared with 730 million USD in 2015.

Vietnamese goods accounted for 3.5 percent of the RoK's total farm and livestock imports last year, compared with 2.8 percent in 2015.

Two-way trade between the two countries has risen since the FTA went into effect in December 2015, making Vietnam the fourth largest trading partner of the Republic of Korea.

The KREI predicted that the pace of growth in the RoK’s imports of Vietnamese farm products is expected to quicken over the bilateral trade deal.

Exports to Southeast Asia forecast to keep upward trend

Vietnam’s exports to many Southeast Asian countries like Malaysia, Singapore, Thailand, the Philippines, and Cambodia have grown strongly recently and are predicted to continue the upward trend in 2018.

According to the Ministry of Industry and Trade (MoIT)’s Department of Asian-African Markets, Vietnam shipped 1.2 billion USD worth of telephones and components, 427 million USD worth of crude oil, and 91 million USD worth of fibres to Thailand in 2017. The figures showed respective increases by 69 percent, 170 percent, and 31 percent.

The MoIT said many goods which are Vietnam’s strength still account for a modest market share in Thailand, noting that there are high possibilities to increase market share in Thailand for such commodities as aquatic products, fresh fruit, steel products, electrical wire and cable, and ceramic and wooden items.

There are also opportunities for Vietnam to sell more apparel and footwear to Thailand, which is switching its production to other fields with higher added value. Meanwhile, milk and dairy products, handicrafts, and furniture also hold potential for stronger export if obstacles are removed and businesses are assisted, the ministry noted.

The Asian-African Market Department said the shipment of many goods to Malaysia also posted high growth rates. Last year, Vietnam earned around 1.17 billion USD from exporting computers, electronic products and components (up 36 percent from 2016), 609 million USD from mobile phones and components (up 37 percent), 228 million USD from crude oil (up 20 percent), and 235 million USD from steel (up 105 percent) to Malaysia.

Singapore was also a strong consumer of computers and components, transport vehicles and spare parts, crude oil, and gasoline from Vietnam last year, the department added.

Vietnam capitalizes on FTAs

Vietnam is efficiently implementing many regional and bilateral free trade agreements pursuant to the national policy of global integration. The FTAs have expanded Vietnam’s export markets and improved its export values, economic structure, and competitiveness.

 To date Vietnam has signed and is implementing 10 regional and bilateral FTAs, including a framework agreement on ASEAN - China economic cooperation, an ASEAN - Republic of Korea trade in goods agreement, an ASEAN - Japan comprehensive economic cooperation partnership deal, an agreement on establishing the ASEAN-Australia-New Zealand FTA, a Vietnam-Japan economic partnership agreement, and a Vietnam-Chile free trade deal. 

Among the FTAs to which Vietnam is a signatory, the EU-Vietnam Free Trade Area (EVFTA) is viewed as the most noteworthy, given its comprehensiveness, quality, and balance of benefits to both parties. 

Under the agreement, the EU and Vietnam commit to opening as much as 99% of tariff lines and trade turnover. A 0% tax rate will be applied to export items in which the two sides have strengths. These are garments and textiles, footwear, seafood, tropical agricultural products, and wood furniture from Vietnam and automobiles, machinery, equipment, pharmaceuticals, and temperate farm produce from the EU. 

EU businesses will enjoy incentives when investing and doing business in Vietnam, especially in financial and banking services, distribution, and transportation.

Deputy Prime Minister Vuong Dinh Hue said the EVFTA will ensure that Vietnam is a transparent business environment and will attract qualified EU investment to Vietnam.

He said “The EVFTA and new generation FTAs together with positive outcomes of Vietnam’s reform of its growth, investment, and business models and great potential can help Vietnam improve its relations with Belgium and the EU as a whole in all areas, especially in economics, trade, and investment.”

Prime Minister Nguyen Xuan Phuc, who is also head of the National Steering Committee on International Integration, has ordered FTAs to be implemented efficiently while preparing for the enforcement of the FTAs of new generation. Ministries and sectors have been asked to conduct periodic reviews to ensure strict implementation of the documents, make a timely assessment of arising issues, and propose solutions to improve the efficiency of FTA implementation and carry out more communications programs to help enterprises and people make full use of the agreements.

FTA implementation and further integration into the world economy have helped Vietnam’s economic development and modernization, and helped it expand goods and service export markets, participate more fully in the global value chain and production network, improve the export values of its key export items, and make its business environment more transparent and friendly.  

PM Phuc said at a recent international economic integration conference that the Vietnamese government insists on a comprehensive integration policy with a focus on international economic integration and participation in FTAs.

“The Vietnamese Government considers international economic integration a driving force for economic reforms. It’s true that integration has promoted economic growth and development,” said PM Phuc. 

“It is necessary to focus on restructuring the economy in line with the socialist-oriented market economy mechanism, ranging from rearrangement of production and food safety to brand building and reform of growth models. It’s also essential to promote an enabling government to fine-tune the institutions and create a better business environment”, noted the government leader. 

Eximbank gives up key position in Sacombank

Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank–STB) has just announced that Vietnam Export Import Bank (Eximbank–EIB) is no longer a key shareholder of the bank.

Eximbank has been selling STB’s shares since November 2017. The bank only owns 88.4 million shares now, equaling 4.91 per cent of Sacombank’s total capital.

Thereby, the relationship between Sacombank and Eximbank has faded after six years of engagement. In January 2012, Eximbank bought 103 million STB shares from ANZ and became the most important strategic investor of Sacombank.

Eximbank sent Pham Huu Phu to represent and become chairman of Sacombank. They planned a comprehensive co-operation between the two banks and expected a merger. However, Eximbank faced difficulties due to a high-level personnel crisis.

After two years of being Sacombank’s chairman, Pham Huu Phu resigned and returned as Eximbank’s general director. Sacombank was acquired by new shareholders represented by Tram Be. Tram Be was standing vice chairman of Sacombank’s Board of Management. Several leaders of Southern Bank  were appointed as leaders of Sacombank. During the tenure, Tram Be and Phan Huy Khang, former general director, committed numerous violations and were arrested.

In 2015, Southern Bank officially merged with Sacombank, the two banks became one. At the time, Southern Bank accumulated bad debts, pulled Sacombank's development.

In the middle of 2017, the restructuring plan of Sacombank was approved and Duong Cong Minh was appointed as new chairman of the Board of Management. He has retrieved over VND19 trillion ($837 million) of bad debts and gained VND1 trillion ($44 million) in pre-tax profit for Sacombank.

Thus, STB’s ticker has doubled in value as compared to last year. The divestment of Eximbank is considered a successful deal because STB is now around VND16,000 apiece, the highest in the last four years.

Currently, the two banks have been doing their utmost to complete restructuring via the “New Eximbank” project and to retrieve Sacombank’s bad debts in the next 5-10 years.

VPBank posts $356.6 million pre-tax profit

Việt Nam Prosperity Joint Stock Commercial Bank (VPBank) posted a pre-tax profit of more than VNĐ8.1 trillion (US$356.6 million) in 2017, registering a 65 per cent year-on-year increase.

VPBank Finance Company Ltd (FE Credit) accounted for 51 per cent of the bank’s total profit in 2017.

VPBank on Monday announced its financial report for 2017 showing it had outstanding results in all the basic criteria and sustainable and effective growth, as a result of its strategy to focus on retail banking.

The bank’s total assets last year reached nearly VNĐ278 trillion, increasing 21 per cent from the previous year.

Customer lending rose by 24 per cent to VNĐ196 trillion in 2017, and the deposit was VNĐ200 trillion, up 16 per cent from the previous year.

Its turnover growth rate in 2017 was VNĐ25 trillion, posting a 48 per cent year-on-year rise. Of this, the net profit rose by 36 per cent and net services by 70 per cent. It used more than VNĐ8 trillion for its risk prevention fund.

In recent years, VPBank’s growth rate has been higher than the average level in the market. Its average total assets rose by 22 per cent a year since 2012.

The bank’s leaders said the outstanding loans of FE Credit accounted for 23 per cent of its total integrated assets.

With its listing on HCM City Stock Exchange (HOSE) in 2017, VPBank’s charter capital and ownership capital rose to VNĐ15.7 trillion and VNĐ29.6 trillion, respectively, up 70 per cent from the previous year.

The positive growth has created a firm foundation for the bank, both in mid- and long-term periods, contributing to further development.

The bank’s growth quality was also seen through a return on equity (ROE) of 27.47 per cent and a return on assets (ROA) of 2.54 per cent.

The business results have helped the bank complete its target to become one of the largest joint stock commercial banks in Việt Nam in the 2012-17 period.

Its strategy of focussing on retail banking products and services, which was launched five years ago, brought the achievements to the bank.

The turnover from market segments of individuals, consumption finance and small- and medium-sized enterprises accounted for 80 per cent of its total turnover.

Its most bright point was that it has maintained high quality of growth owing to flexible business strategies and effective risk management system, though it has focused on segments with high risks.

VPBank has applied effective solutions to collect debts totalling VNĐ3 trillion in 2017. Its bad debt was kept at 2.33 per cent.

The bank said it would continue to maintain its retail banking strategy in 2018, specially focusing on digitalisation of financial products and services to better meet with customers’ demand and create a new growth momentum.

It will also enhance association with fintech companies and strategic partners to create a diversified financial ecosystem, which could provide better products to all market segments.