VN Airlines to get its first Airbus A350

Vietnam Airlines will get delivery of its first Airbus A350 XWB by the end of this year and become the first carrier in Asia to acquire the aircraft.

Vietnam Airlines will get delivery of its first Airbus A350 XWB by the end of this year . Photo airbus.com

It plans to acquire 14 A350s, buying 10 from Airbus and leasing the four others, for long-haul flights to the EU.

On Wednesday, Rolls Royce announced it would supply Trent XWB engines for Vietnam Airlines' new A350.

The British company claims the engine's fuel consumption per passenger per kilometre is the same as that of a car.

It has sold more than 1,500 engines so far to 40 customers.

Upgraded facilities of Bac Giang's fertiliser plant inaugurated

The upgraded and expanded facilities of Ha Bac fertiliser plant were inaugurated in the northern province of Bac Giang on June 19.

Deputy Prime Minister Hoang Trung Hai (centre) talks to Hanichemco officials as the company inaugurates new facilities on June 19. Photo chinhphu.vn

The expansion project of the factory, which is run by Ha Bac Nitrogenous Fertiliser and Chemical Company Limited (Hanichemco), a subsidiary of Viet Nam National Chemical Group, cost about US$568.6 million and covers an area of 33.4 hectares across Tho Xuong District and Xuan Huong Commune.

The new facility is expected to produce some 500,000 tonnes of urea fertiliser and 300,000 tonnes of liquid ammonia per year.

Hanichemco had implemented the project in November 2010 in conjunction with Wuhuan, CMC, and CECO contractors. It expects that the new facilities will generate jobs for some 2,000 local workers.

Deputy Prime Minister Hoang Trung Hai said during the inauguration ceremony that the project has been in line with the national master plan for industrial development.

Viet Nam's chemical industry can now meet more than 80 per cent of the domestic demand for fertiliser, actively serving agricultural production and reorganisation.

Hai noted that the slow recovery of the global economy in general, and oil prices in particular, is likely to have significant impacts on fertiliser prices and might result in stiffer competition in the fertiliser market.

He urged the chemical and fertiliser sector to cut costs, improve quality, and promote the trade names of domestic products.

HSG starts work on new steel plant, completes another

Giant steel maker Hoa Sen Group (HSG) on Friday began construction of a giant plant in the Dong Hoi Industrial Zone in the central province of Nghe An.

Located on an area of 35ha, the VND5 trillion (US$238 million) plant will have nine production lines churning out steel sheets starting in March next year.

On the same day the company's new plant at the Nam Cam Industrial Zone, also in Nghe An, began production. Its first phase with six of the proposed 13 production lines is complete and manufacture of steel pipes has begun.

On the same day the company's new plant at the Nam Cam Industrial Zone, also in Nghe An, began production. VNS Photo

The remaining lines will produce steel pipes other specialised products in December 2015 when the company hopes to complete the plant.

The two plants will together provide jobs to 1,000 workers.

Their products will be consumed in the central and northern regions and exported to Laos, Thailand, and Myanmar.

E-payment of import-export duties surpasses 63 percent

The e-payment of import-export duties has increased ten percent to 63 percent after a circular aiming to streamline tariff payment processes was enforced, an official said.

Lo Thi Nhu, Director of the Import-Export Duty Department under the General Department of Vietnam Customs, said Circular 126/2014/TT-BTC has helped saved time and resources of businesses and State managerial agencies.

The Ministry of Finance’s circular, taking effect on October 1, 2014, stipulates procedures for declaration, collection, and payment of taxes as well as overdue interest, fines, and other charges on exports and imports. It focuses on the e-payment of export-import duties with a view to minimise payment processes.

At a meeting reviewing the circular on June 19, participants heard that it only takes five to seven minutes for customs clearance using e-payment systems instead of the prior 30-minute wait time.

It only takes five seconds for goods to be cleared after customs agencies’ e-payment gateways receive a notification that the banks have transferred the tax funds.

Enterprises can also pay duties at various locations, during or outside working times and on days off.

The meeting in Ho Chi Minh City was held by the General Department of Vietnam Customs and the Governance for Inclusive Growth Programme of the US Agency for International Development, which looks to promote customs modernisation and trade in Vietnam.

Impacts of FTAs on state budget collection discussed

A workshop assessing the impacts of free trade agreements (FTAs) on State budget revenues was organised in Hanoi on June 19 by the National Institute for Finance (NIF) and the US Agency for International Development (USAID).

According to NIF Deputy Director Truong Ba Tuan, the USAID and NIF have been working together in the Vietnam Governance for Inclusive Growth (GIG) project to establish a set of assessment tools for FTA impacts on key sectors as well as state budget collection.

The workshop would provide a platform for attendees to discuss methodologies for assessing the potential impacts of FTAs, such as the Trans-Pacific Partnership (TTP), on state budget, he noted.

Prof. Inkyo Cheong from Inha University in the Republic of Korea (RoK) said that the analysis of the TPP impacts on state budget is very complicated, requiring evaluation of all components of the TPP.

NIF Director Nguyen Duc Thanh believed that Vietnam joining FTAs might reduce direct tax collection from import-export activities, however economic growth fueled by the FTAs would benefit state budget in return.

As the private sector, including the SMEs, is the key driver of economic growth, there should be reform of administrative institutions and favourable business climate for them to develop, the director added.

Integration has double-edged effect on domestic production, requiring efforts of not only the government but also the entrepreneurs. Domestic firms need to actively look for information on the FTAs and its impacts on the market.

Vietnam is seeking to conclude the TPP with eleven other countries which is expected to fuel the country’s economy by reducing trade barriers, boosting exports and increasing employment opportunities for its citizens.

EU clean technology firms eye Vietnamese market

A workshop was held in Ho Chi Minh City on June 19 by the Vietnam Chamber of Commerce and Industry and the EU Business Avenues, focusing on potential opportunities for companies from the European Union to invest in clean technology in Vietnam.

The event was attended by representatives from over 30 European firms specialising in air pollution control, energy conservation and management and water and waste treatment. The firms are currently visiting Vietnam to seek business opportunities.

Nicholas Merriman, Marketing Director of the ANDRITZ Group that operates in air pollution control, shared that his firm wants to establish a partnership with Vietnamese businesses and implement long-term projects in the nation.

According to EU Business Avenues, the trip aims to promote the transfer of clean technology and environmentally-friendly measures to developing countries in Southeast Asia .

By accessing clean technologies provided by leading EU companies, Vietnam will be able to create a basic foundation for promoting the country’s sustainable growth in the future.

Vietnam has become an important partner to the EU with trade hitting 28 billion EUR in 2014. EU companies are also major foreign direct investors in Vietnam and are currently operating around 1,810 projects.

Ha Bac fertilizer factory completes upgrades, expansion

The upgrading and expansion of the Ha Bac Nitrogenous Fertiliser Factory in the northern province of Bac Giang, an affiliate of the Vietnam National Chemical Group (Vinachem), was completed on June 19.

The project, which cost 568.6 million USD and began on November 8, 2010, included upgrades to the old factory, construction of a new one and the application of latest technology to increase capacity, improve the competitiveness of products and reduce impact on the environment.

The new factory, which covers 33.4 hectares, has a capacity of 500,000 tonnes of fertiliser and generates jobs for 2,000 local labourers.

Addressing the event, Deputy Prime Minister Hoang Trung Hai asked the Vinachem and the Ha Bac Fertiliser Factory to improve product quality and raise competitiveness.

He noted that the chemical sector has now met more than 80 percent of domestic demand for fertiliser.-

Natural rubber export prices pick up from May

Natural rubber export prices are on a rising trend since the beginning of May following concerted efforts from the Ministry of Agriculture and Rural Development and the Vietnam Rubber Association (VRA), reported the Thoi bao Kinh Te Vietnam (Vietnam Economic Times).

In the first half of May, natural rubber export prices increased to 1,655 USD per tonne, up 73 USD or 4.6 percent, from the average price in April, and the increasing trend continues, reaching 1,790 USD per tonne on June 12.

It is forecast that prices will maintain their momentum throughout June due to boosted imports from Chinese partners for stockpile.

Vietnamese natural rubber export to China has benefited from the " most favoured nation " ( MFN ) status with a 20 percent import tariff, compared to 40 percent for those which do not have the MFN

According to Dr. Tran Thi Thuy Hoa, Head of the VRA Office, rubber prices will be fluctuating between 1,500 and 2,500 USD per tonne and will remain in that range until 2020 due to high stock.

In addition, natural rubber export prices are under pressure as the fall of crude oil prices make synthetic rubber cheaper, Hoa added.

Hoa said the rubber sector needs to increase land use efficiency, reduce both outputs and production costs while replacing aging trees which produce less latex.

Hoa advised the industry to shift according to market demands, ensure the quality of natural rubber, expand markets, build brands, develop the processing industry and manage planning.

The National Agro-Forestry-Fisheries Quality Assurance Department under the Ministry of Agriculture and Rural Development has asked rubber processors to strictly supervise the process of collection, transportation, preservation and quality control to ensure product quality.

The department will coordinate with the VRA to develop and publish quality standards for raw latex and finished products at processing factories.

Vietnam’s rubber exports in the first five months reached 330,000 tonnes with 475 million USD in revenue, up 30.1 percent in volume but down 2.9 percent in value.

China, India and Malaysia continue to be the main markets for Vietnamese rubber, together accounting for 69.03 percent.

Construction of big steel sheet factory begins in Nghe An

Steel maker Hoa Sen group began the construction of a 5 trillion VND (230 million USD) steel sheet factory at the Dong Hoi industrial zone in Hoang Mai town in the central province of Nghe An on June 19.

The factory has one c old rolling line with a designed capacity of 1 million tonnes per year; two coating lines with a combined capacity of 500,000 tonnes per year and one colour coating line with a designated capacity of 120,000 tonnes per year.

It is scheduled to start production in March 2016.

On the same day, the Hoa Sen group inaugurated phase I of its steel sheet factory at the Nam Cam industrial zone in Nghe An’s Nghi Loc district.

On the occasion, the group presented 50 bicycles to impoverished students with good academic achievements in Quynh Lap commune, Hoang Mai town and donated 222 million VND (10,180 USD) to 53 impoverished households and 169 leprosy patients.

LaoVietBank, LVI – models for Vietnam-Laos economic cooperation

A ceremony was organised in Vientiane, Laos on June 18 to mark the 16th founding anniversary of the Laos-Viet Joint Venture Bank (June 22) and the seventh founding anniversary of the Lao-Viet Insurance (LVI) Company (June 21).

Lao Deputy Prime Minister and Chairman of the Laos-Vietnam Cooperation Committee Somsavath Lengsavath and Envoy at the Vietnamese Embassy in Laos Hoang Xuan Hai attended the event.

Established on June 22, 1999 under cooperation between the Bank for Investment and Development of Vietnam (BIDV) and the Banque Pour Le Commerce Exierieur Lao (BCEL), the LaoVietBank has become one of the largest commercial banks in Laos and a model for economic cooperation between the two countries.

The bank’s total assets have reached 800 million USD with an annual average growth rate over 30 percent. Along with serving inter-governmental economic cooperation projects, the bank also provides payment and credit services for businesses and individuals.

Meanwhile, the Lao-Viet Insurance Company (LVI), a joint venture between the BIDV Insurance Corporation and the BCEL, has risen to become the second biggest insurance company in Laos.

Speaking at the ceremony, BIDV General Director Phan Duc Tu thanked the Lao Party, Government, ministries and central bank as well as BIDV partners and consumers for supporting the LaoVietBank and the LVI.

On the occasion, the bank announced a credit package with preferential interest rate worth 800 billion LAK (100 million USD) to support enterprises operating in import-export, trade and services.

The launching of the credit package is also a commitment from the bank and the Lao Government and central bank to reduce interest rates to support production and business and boost the country’s economic growth.

Tourism skills advisory council expected in Vietnam

Vietnam should establish a tourism skill advisory council to seize opportunities brought about by regional and global integration, especially the ASEAN Economic Community, heard a workshop in Hanoi on June 18.

The council is expected to involve businesses, the Government, training institutions and other stakeholders, who would identify ways to improve training and skills development in this promising industry amid the global economic integration and intense competition.

According to the Vietnam National Administration of Tourism, tourism is one of the country’s major earning sources thanks to its stretching coastline of 3,300km and 7.8 million international arrivals each year.

The industry employs 1.7 million workers, including 550,000 direct jobs.

However, Vietnam is lacking standard tourism skills and has failed to meet several needs.

The workshop was co-hosted by the General Department of Vocational Training under the Ministry of Labour, Invalids, and Social Affairs and the International Labour Organisation (ILO).

Science application promotes rural socio-economic development

The science and technology application programme serving socio-economic development in rural and mountainous areas has contributed remarkably to improving local living conditions, said Minister of Science and Technology Nguyen Quan.

Minister Quan made the announcement in his speech at a conference in Hanoi on June 18 to review the implementation of the programme over the last 15 years.

Implemented in 62 provinces and cities across the country, the programme aims to promote production, increase the quality and competitiveness of farm products, assist with poverty reduction efforts and generate jobs for local communities in remote areas.

During the period, as many as 845 projects were carried out under the programme, building 2,501 production models applying scientific and technological advances with the involvement of over 80 science and technology agencies from central to local levels.

The conference revealed that more than 11,000 local-level technicians and 236,000 farmers were provided with training courses on science and technology application, while around 128,500 labourers found employment as a result of the application.

Over 1.7 trillion VND (78.2 million USD), including 700 billion VND from the State budget and 1 trillion VND from businesses and households, was spent running the programme.

Quan said in the next ten years, the programme will focus on the production of key farm products such as high-quality rice, catfish and mushrooms for use as food and medicine.

From 2016-2020, the ministry plans to build another 1,000 production models suitable with rural and mountainous areas.

Ninh Binh improves rural water quality, environmental hygiene

A two-month drive to improve rural water quality and environmental hygiene in northern Ninh Binh province has yielded positive outcomes following a wide range of activities.

Since April 15, about 1,500 leaflets on the benefits of clean water have been handed out to local people who were also encouraged to clean up the environment around three concentrated water supply stations in Quang Son commune; the Quynh Son farm in Quynh Luu commune; and Son Thanh, Thanh Lac, and Thuong Hoa communes.

Local people collected 24.5 tonnes of waste, cleaned up 32 kilometres of roads and dredged 13.2 kilometres of sewers. Meanwhile, about 83 percent of the tested water supply stations met Vietnamese Ministry of Health’s standards, up 8.65 percent from the last test.

More than 15,000 families in 32 communes received concessional loans from a clean water and household hygiene fund to build sanitary toilets. Some 2,000 households were also supported with nearly 1.6 billion VND (about 74,400 USD) from an energy efficiency promotion programme to build biogas tanks.

Households within specific areas have also worked together to ensure their neighbourhoods are green and clean.

Vice Chairman of the Ninh Binh People’s Committee Dinh Chung Phung said the province will communicate the importance of clean water and the environment to residents via the local radio network.

It will also ask the Ministry of Agriculture and Rural Development to allocate finances from the national target programme on rural clean water and environmental hygiene for the construction of water supply facilities, which was previously suspended due to a lack of funding, he added.

Vietnam to resume imports of Australian fruits and vegetables

Vietnam will start importing its first fruit and vegetables from Australia on July 1, in a partial easing of an economic ban maintained due to the earlier detection of the fruit fly.

The Ministry of Agriculture and Rural Development (MARD) has confirmed the restrictions on grapes, oranges and mandarins will be the first lifted and allowed to transit into the country.

We hope this will be a new start that will benefit both farmer and economy, said Nguyen Xuan Hong, director of MARD’s Plantation Protection Department, in making the announcement.

Hong added that other Australian fruit and vegetables will be allowed to access the Vietnam consumer market once they are determined to be free of insect manifestation.

Earlier this year MARD issued no import permits on 38 varieties of Australian fruit and vegetables into Vietnam after it determined the fruit fly could have ‘serious consequences’ for Vietnam’s horticultural industry.

Last year, Vietnam imported US$40 million worth of fruit and vegetables from Australia Hong said— adding that the grape industry made up US$32 million of that amount and was hit the hardest.

Seminar addresses benefits of the TPP

The National Institute for Finance (NIF) in collaboration with the US Agency for International Development (USAID) organized a seminar on June 19 in Hanoi to discuss the impact of the proposed Trans-Pacific Partnership (TPP) on the nation’s tax collections.

According to Dr. Inkyo Cheong, Professor of Economics at Inha University in the Republic of Korea (RoK), the methodology to assess the full impact of the TPP on state revenues is an inherently complex task, but that they could potentially increase 20-30%.   

To maximize the benefits, he suggested the government strive to improve infrastructure and devise policies to support small businesses in developing an appropriate strategy to benefit from the trade pact.

Dr Nguyen Duc Thanh, director of the Vietnam Centre for Economic and Policy Research, in turn underscored the importance of the business community and small businesses, which are the engines driving the country’s economic growth.

Truong Ba Tuan, NIF deputy director, said international integration will boost economic growth and exports but also affect domestic production. Therefore, the government should perfect policies to support businesses.

Vietnam milk prices stay stubbornly high, priciest in ASEAN

The prices of milk for Vietnamese children remain the highest in the Southeast Asian region despite the falling cost of raw milk, which gives a leading local milk producer room to expand and boost supply.

Dinh Tien Dung, Minister of Finance told a recent meeting in Hanoi that milk prices in Vietnam are on average 14%-60% higher than the rates in other ASEAN countries.

ASEAN members include Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Myanmar, Cambodia, Laos, and Vietnam.

The statement was given at the meeting when the minister mentioned petitions showing the concerns of foreign investors and business associations over Vietnam’s milk price management mechanism.

According to Minister Dung, though Vietnam is controlling the price of milk for children under six years old, the country has been committed to letting the rate fluctuate according to the market mechanism and respecting the right of producers to set prices.

In Vietnam, the government decided to apply policy tools to stabilize prices by setting a ceiling price for milk for children under six years old, starting on June 1, 2014 and ending next year.

So far, 686 dairy products for children under six have been registered with the Ministry of Finance in terms of the maximum price, with a maximal reduction of 34% compared to the rates before the program was implemented, partially due to the advertising costs for the average milk price reductions of 18%.

However, Dung also stressed that although the local dairy market is open due to integration, the actual retail prices of milk for children under six years old are too high.

The average price of formula milk products for children under six years old in Vietnam is around US$16 per kilogram, considerably higher than the prices in other areas of Southeast Asia.

Specifically, the average price in Thailand is US$14 per kilogram, the Philippines US$12.9 per kilogram, Malaysia US$10.9 per kilogram, and Indonesia US$9.5 per kilogram.

According to figures from the ministry, on average, the price of one kilogram of this milk in Vietnam is 14% higher than in Thailand, 24% higher than in the Philippines, 46% higher than in Malaysia, and over 60% higher than in Indonesia.

"As the market is open, milk traders should explain this. There should be no such gap given the fact that the average income of Vietnamese people is not high compared to others in the region," Minister Dung said.

What the management agency in Vietnam wants is the harmonization between the interests of enterprises and those of consumers.

Vietnam has over 10 million children under the age of six, and this group is very sensitive, the minister said. Therefore, he asked foreign businesses and associations to find appropriate solutions for ensuring the interests of these consumers.

The prices of milk and dairy ingredients around the world are now 40% lower than the record rate set in February 2014, but those in the Vietnamese market have remained unchanged since then.

In April, the European Union removed milk production quotas which existed for more than 30 years, leading to the worldwide drop in milk prices, a trend which is expected to continue until the end of this year.

In 1984, quotas were applied to limit the over-abundant supply in Europe, and milk farms that produced over their quotas were fined.

Meanwhile, the Food and Agriculture Organization of the United Nations has predicted that prices of some raw materials such as skim milk, milk powder, full cream milk powder, and whey powder will decrease 5.8% on average in 2015.

However, in Vietnam, milk prices do not operate according to the formula that the retail will be calculated based on the cost of production, distribution and other expenses.

The milk prices are set according to groups, as milk traders measure consumer awareness of certain brands to determine their selling price.

The general trend is that the pricier the milk brand, the easier it is to market and sell it, The Gioi Tiep Thi (Marketing World) reported.

As the local milk market still has more room to grow, Vietnam Dairy Products JSC (Vinamilk) pushed on to increase supply by signing a deal on June 15for cooperation with dairy farmers for breeding and raising dairy cows in the Central Highlands province of Lam Dong from now through 2020.

The deal will help Vinamilk, a leading firm, set up an area where the company will obtain fresh milk and build large farms and a new milk-processing factory to develop more products.

Lam Dong authorities have promised to create the best conditions for Vinamilk to build two to three milk cow husbandry farms with as many as 10,000 animals.

The company will set up a model cow farm for local farmers to learn from, as well as build a breeding center which will provide imported purebred Holstein Friesian cows for local farmers and households to increase productivity and quality, according to the Vietnam News Agency.

Vinamilk earned VND1.56 trillion (US$716.7 million) in after-tax profit in the first quarter of 2015, up 12% compared to the same period last year

At the end of quarter 1/2015, Vinamilk had total assets of VND27 trillion (US$1.24 billion) with the balance of cash and cash equivalents being VND1.28 trillion (US$59 million).

VN textiles, garments provide a fourth of S Korean market

Viet Nam is the second largest textile and garment exporter to South Korea, making up one-fourth of South Korea's garment market, after China.

South Korea imported US$627.4 million in textiles and garments from Viet Nam in the first four months of this year, according to the Viet Nam Textile and Apparel Association (Vitas).

The turnover marks an increase of 8.25 per cent over the same period last year.

The growth is part of a larger trend. After the ASEAN – Korea Free Trade Agreement (AKFTA), Viet Nam's textile and garment industry saw significant growth.

In 2011, the sector's export turnover to South Korea was $900 million. A year later it increased to $1.1 billion and in 2013 it reached $1.6 billion. Last year's total of $2.4 billion was a staggering 27 per cent increase over that of 2013.

The growth should only continue with the recently signed AKFTA. According to its open-access commitment, Vietnamese textile and garment products that satisfy certificate of origin norms will enjoy zero tariffs once the agreement takes effect from January 1, 2016. Currently, Vietnamese firms pay a tax of 8 to 13 per cent.

The FTA would be a considerable opportunity for both countries' enterprises, said Vitas. South Korea is Viet Nam's fourth largest importer of textiles and garments, accounting for more than 10 per cent of the market's export turnover, according to the Ministry of Industry and Trade. It is forecast that textile and garment turnover in the South Korean market could reach $16.3 billion for 2015, increasing 11.6 per cent year-on-year.

South Korea currently provides nearly 20 per cent of Viet Nam's textiles and with the large volume of ancillary materials it also exports.

Arbitration could solve disputes fast

Businesses and banks in Viet Nam still resolve disputes through the courts, even though arbitration and mediation remain the most popular methods throughout the world in dealing with banking disputes.

This preference for using courts was discussed by General secretary of the Viet Nam Banking Association Tran Thi Hanh at a workshop on the Use of Arbitration and Mediation (A&M) in the resolution of banking and financial disputes in Da Nang yesterday.

"Viet Nam's economics has been deeply integrated into the world and the regional economic community, so banking and financial disputes have rapidly become more complicated. These needs a quick, easy procedure in solving disputes for businesses and banks," Hanh said.

"Resolving banking disputes by arbitration and mediation could help businesses and banks deal with arguments and risks in a smooth way," she said, adding that the solution would be an effective way to reduce bad debt in the banking system.

Hanh said the use of arbitration and mediation would be a method to reduce bad debt to under 3 per cent in Viet Nam.

The general secretary noted that legal proceedings on banking that go before judges often took a long time to resolve due to complicated legal issues.

Lawyer Vu Anh Duong, general secretary of Viet Nam International Arbitration Centre (VIAC), said arbitration and mediation had additional advantages over courts in resolving financial or banking disputes, including providing flexibility, sincerity, honesty, fairness and transparency.

"In banking and financial disputes, the state encourages the use of arbitration, as it has a preferred legal framework and operates in accordance with international rules. Procedures at arbitrations are not complicated, as in civil court, and it's very comfortable during arbitrations for communities and businesses," Duong said. "However, the use of arbitration and mediation has yet to be used widely in Viet Nam, as people and businesses still are unsure of its legislation and execution," he said.

Pham Chi Dung, deputy head of legal affairs under Bank for Investment and development of Viet Nam (BIDV), said arbitration resolutions in banking and financial disputes offer a less complicated approach for businesses and individuals.

He said arbitration could resolve a dispute within a year, using quick and easy procedures, while civil tribunals often take two years.

Vu Ngoc Lan, deputy head of the Legal Affairs department under the State Bank of Viet Nam (SBV), said the use of arbitration is encouraged by banks in dealing with bad debt.

"SBV creates favourable conditions for banks and credit agencies in the use of arbitration because of its effectiveness and the saving of time. The judgment of arbitration has its prompt validity, while civil courts sometimes have problems with the civil execution law," Lan said.

According to VIAC, arbitration is conducted in 146 countries, while 124 legal proceedings in Viet Nam were resolved by VIAC between 1993 and 2014. However, banking and financial disputes only account for some 1 per cent of the cases resolved, while 64 per cent were commodity trade disputes.

Viet Nam has 288 arbitrators, along with seven centres in HCM City, Ha Noi and Can Tho.

Last month, Viet Nam National Oil and Gas Group (PetroVietnam) announced it had won a major tax incentive dispute regarding a production-sharing contract for a Vietnamese offshore oil concession, and the dispute was resolved through international arbitration.

Transport Ministry to sell SOE share lots

Deputy Prime Minister Vu Van Ninh on Tuesday approved a Ministry of Transport request to sell Government stakes in seven State-owned enterprises (SOEs) in the form of share lots or share packages.

Of the companies, the Deputy PM asked Vietnam Railways Corporation to sell stakes in four companies - the Dong Mo Quarry Company, Railway Equipment Import Export Joint Stock Company (Virasimex), Railway Material Joint Stock Company and Hai Van Nam Hotel.

He also asked the Vietnam Motor Industry Corporation Joint Stock Company (Vinamotor) to sell stakes in the Transportation Investment Joint Stock Company.

In addition, the Deputy PM also gave approval for the transport ministry to sell all Government stakes in Civil Engineering Construction Corporation No 5 Joint Stock Company (Cienco 5) and Cienco 6.

These companies will be privatised after the Prime Minister issues a decision that regulates the sale of SOE stakes in share lots.

In fact, the Government has allowed the State Capital Investment Company (SCIC) to experiment with the sales of Government stakes in SOEs in share lots in recent years.

Government share lots in SOEs are sold to strategic investors who are able to make big investments and commit long-term future to these firms.

SCIC has to auction the share lots in SOEs on the stock exchange if the value of a share lot exceeds VND10 billion (US$463,000) from June to the end of this year.

Firms for sale are required to be unlisted and to have made profits during the last two years.

The SCIC will auction the first share lots on the Ha Noi Stock Exchange next week.

The Ha Noi Stock Exchange said that the auctions were expected to be good experiences for other SOEs in the future.

HOSE holds talks with investors

The HCM City Stock Exchange (HOSE) yesterday started its weekly Friday afternoon talk shows with investors.

The talk show is expected to connect listed companies to their investors over the next three months, providing new information and business strategies.

On the talk show, listed companies, securities companies and investors will speak about business results, financial reports and other topics related to the securities market and listed companies.

In the next three months, 13 companies will talk to investors, including HCM Securities Joint Stock Company (HCM), Vietcombank (VCB), PetroVietnam Gas Corporation (GAS), Vietnam Dairy Products Joint Stock Corporation (VNM) and Vingroup Joint Stock Company (VIC).

The Prime Minister yesterday issued Decision 21/2015/QD-TTg, in which HOSE will raise its chartered capital by 100 per cent to VND2 trillion (US$92.5 million) on August 8.

Under the Decision, HOSE can raise its chartered capital from the State budget, after-tax profits and other sources.

Phu My optimistic of first-half results

PetroVietnam Fertiliser and Chemicals Corporation (PVFCCo), better known as Phu My Fertiliser (DPM), estimated its first-half revenues will reach VND4.945 trillion (US$226.8 million) and pull in profits of VND810 billion ($37.2 million). The prediction would mean 3 per cent more in revenues and 13 per cent more in profits than the target it set at the start of the year.

Other fertiliser companies including Phu My urea, Phu My NPK, Phu My Kali (potassium), Phu My SA and Phu My DAP also did well, surpassing their targets.

According to PVFCCo General Director Cao Hoi Duong, the encouraging results could be attributed to lower oil prices in the global market, which helped reduce gas input costs at the Phu My Fertiliser Plant.

The rising quality and reputation of Phu My fertiliser products in the market and a strong distribution network both contributed to positive sales in the first six months, Duong said.

Phu My fertiliser products currently hold 48 per cent of the domestic market share. According to a 2014 survey conducted by the market research firm Nielsen Vietnam, the Phu My fertiliser brand continued to best other major fertiliser brands in Viet Nam.

On June 7, PVFCCo signed an engineering, procurement, construction and commissioning (EPC) contract with a contractor consortium to expand Phu My's NH3 Unit and build the Phu My NPK Complex.

The complex project, with a total investment capital of VND5 trillion ($229.4 million), will use up to date technology to produce local high-quality NPK fertiliser to take over the import dominated NPK market. The complex is slated to operate from the second quarter of next year.

According to Duong, growing competition, rising input costs due to non-deductible VAT for fertiliser products, as well as volatile foreign exchange rates and globally declining prices are the main challenge to the company's second half of the year.

PVFCCo projects its total sales will reach over VND4.3 trillion ($197.2 million) and bring in a profit of VND720 billion ($33 million) in the last six months of the year, slightly lower than the first half.

DPM shares were traded around VND29,000 ($1.33) on the HCM Stock Exchange in recent sessions.

In March, its subsidiary South-East PetroVietnam Fertiliser & Chemicals Co listed 12.5 million shares on the Ha Noi Stock Exchange under the code of PSE. The company said other subsidiaries including PVFCCo South-West, PVFCCo Central, PVFCCo North and PVFCCo Packaging would debut shares in the next two quarters of the year.

VN improves business environment, surpassing ASEAN level 6 average

Viet Nam has improved some criteria in business environment, exceeding the average level in ASEAN 6, namely Brunei, Indonesia, Malaysia, the Philippines, Singapore, and Thailand.

The latest study conducted by Central Institute for Economic Management (CIEM) on the implementation of Resolution 19 on key tasks and measures to improve the business environment and national competitiveness capacity of Viet Nam during the 2015-16 phase.

Accordingly, measures will be taken to improve the country's business environment, accelerate administrative procedures, ensure the transparency and responsibility of State administrative agencies, as well as reform regulations on business conditions so that commodities, exports and imports satisfy international rules.

The study that was announced on Thursday highlighted that Viet Nam surpassed the target duration for a business registration from six days to three days.

In terms of protecting investors, with the Law on Enterprises 2014, the index improved to the 105th rank and reached the average level of 52.1 in ASEAN 6.

The country reached the 44th place in the access to electricity index. However, despite jumping 12 places, the index did not meet the average level of 37 in ASEAN 6.

Viet Nam's indices of tax payment and social insurance also improved 27 places to reach the 121st position. However, the level was far from the ASEAN 6 average.

The institute noted that some tasks and solutions such as improving the time span of bankruptcy procedures and the redressal of contract disputes were not taken up in 2014

Nguyen Dinh Cung, director of CIEM, said the rankings were based on the World Bank's calculations under the pretense that other countries had no improvement.

But Cung said that Viet Nam would still have improved its ranking even if changes in other countries were taken in to consideration.

Steel firms deplore import deposits

A new regulation, which took effect from the beginning of this week, requiring a deposit for scrap metal import is burdening steel companies, the steel industry's association has said.

Under Decree No 38/2015/ND-CP on the management of wastes and scraps, importers must pay a deposit for importing scrap metal. The deposit ranges between 10 per cent and 20 per cent of the import value, depending on the import volume.

According to Chu Duc Khai, deputy president of the Viet Nam Steel Association, the regulation is aimed at preventing firms from importing low-quality scraps.

However, deposit rates are too high for steel producers who are already facing many difficulties, including high inventories and low competitiveness. Khai added that many steel companies were now operating at just 50 per cent of their capacity and are seeking ways to cut costs.

Kieu Chi Cong, director of Hoa Phat Steel Company, said many firms were on the verge of bankruptcy as the costs of producing steel billets from scrap metals are much higher than imported billets.

Paying deposits would push up production costs, threatening to lower the competitiveness of steel firms, he added.

According to the association, a bank guarantee is more appropriate for importing scrap metal rather than a deposit as security.

Trade liberalisation poses problems for local firms

Vietnamese small- and medium-sized enterprises (SMEs) face increasingly tough challenges because of their weak competitiveness and the government's ineffective support policies, according to economist Nguyen Tri Hieu.

SMEs in the near future would encounter fierce competition from foreign-invested businesses, Hieu was quoted as saying in the Nguoi Lao Dong newspaper.

Viet Nam's policies in the past gave many preferential treatments to FDI enterprises, while the Vietnamese private sector received fewer incentives.

"Although FDI capital is important for socio-economic development, domestic enterprises still need support from the State," Hieu said.

FDI enterprises are given priority in tax, land and administrative procedures.

"Viet Nam needs to create more favourable policies and simplify administrative procedures for local enterprises to create a fair environment," Hieu said.

Mai Lan Joint-Stock Company's KissMe tissue and toilet paper brand, for example, has been making the product for 30 years.

Pham Nhu Bach, chairman and director of Mai Lan Co, said the KissMe brand was no longer sold at supermarkets because of severe competition from FDI enterprises.

The paper brand is now distributed in smaller shops and through sales agents.

"For three to four years, we have just produced a moderate amount in order to pay our workers, because the outlet for the brand has become too narrow," Bach said.

Under Viet Nam's World Trade Organisation (WTO) and Free Trade Agreement (FTA) commitments, the paper sector will be protected for a few years. But the tax on the products would decrease to zero per cent after that time.

Bach said domestic enterprises would then be unable to compete with foreign rivals.

Along with big FDI enterprises, SMEs like Mai Lan Co are now confronted with China and domestic enterprises that do not compete fairly.

Vu Tien Loc, chairman of the Viet Nam Chamber of Commerce and Industry, said nearly 70 per cent of Vietnamese private enterprises did not make profits, although the sector had contributed nearly 50 per cent of GDP.

The private sector must be a key driver for the country's economic growth, but the country lacks a sufficient number of medium-sized enterprises that can join the global value chain or directly engage with the international market, according to Loc.

Domestic businesses that want to increase competitiveness must have a large amount of capital to renovate their technologies, Vietnamese economists have said.

Truong Chi Thien, director of Vinh Thanh Dat Co, said his company wanted to expand instant-egg exports but interest rates on bank loans were too high.

Though the poultry egg sector has great potential, he said interest rates of 10 per cent per year were fixed for the first year of a loan and then fluctuated according to the market.

"When we set up a business plan, we have to calculate input costs, and we do not dare take a risk with the interest rate," he said.

Other countries such as Thailand, Indonesia and Malaysia offer interest rates of only 1 per cent per year for a medium- and long-term loans for local businesses.

Economists have also said that new FTAs would create highly skilled workers who would move to FDI firms for higher salaries and better working environment.

Sales of consumer packaged goods rebound in Vietnam

After seeing a sharp downturn in 2014, sales of fast moving consumer goods (FMCG) such as food and personal care products have recovered, growing 3.4% in volume and 4% in value in the first quarter.    

Beverage is the key category driving the growth recovery, but other categories such as food and home care also have shown signs of recovery in the quarter, said a new report released by Nielsen.

The report also found that more than 80% of FMCG sales in Vietnam still come from the traditional trade channel which includes around 1.3 million FMCG stores across the country.

The sheer number of traditional stores makes Vietnam one of the most complex markets for FMCG manufacturers to build distribution and manage logistics, said the report.

Local instant noodle producer Hao Hao, Vinamilk and Coca-Cola are the top three most supported brands by retailers, Nielsen said.

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