World Bank debars Vietnamese firm for alleged fraud

The World Bank has debarred a Vietnamese waste water treatment company for 10 years for alleged fraudulent and collusive practices in two projects that it has funded.

The Washington-based development lender said in a statement late last week that SFC Vietnam Investment Development for Environment Corporation and its affiliates will be debarred for a minimum of 10 years while its General Director, Nguyen Phuong Quy, and any entity that he directly controls will be debarred for a minimum of 11 years.

According to the bank, the debarment is based on evidence of fraudulent and collusive practices under the Project Preparation Technical Assistance Facility and the Da Nang Priority Infrastructure Investment projects.

The former is aimed to increase the capacity of government entities to plan and prepare public investments efficiently.

Its investigation revealed the company provided "false experience-related documentation to an international bidder while cooperating with an international firm in preparing a fraudulent financial proposal, suppressing a conflict of interest and coordinating bids with an international competitor for a works contract."

Last February, the bank also debarred American architectural and engineering design firm Louis Berger Group, Inc. for one year for allegedly bribing government officials under two projects worth around US$500 million in Vietnam.

Analytical services office helps firms ensure seafood quality

The Centre of Analytical Services and Experimentation Ho Chi Minh City (CASE) opened its representative office in the central region in Nha Trang city, Khanh Hoa province, on December 22 to help businesses ensure seafood quality.

The office is tasked with receiving aquatic products which will be later analysed and tested to ensure the goods satisfy export standards.

CASE Director Chu Van Hai said the central coast, including Khanh Hoa, is one of the major aquaculture hubs of Vietnam which is strong in aquatic product processing and export.

Khanh Hoa alone is home to more than 1,000 establishments buying and processing aquatic products. Among them, 44 companies specialise in export processing and rake in US$350-460 million from shipments abroad every year, she noted.

New website ‘agromart’ debuts

Nguyen Nhu Tiep, head of the National Agro-Forestry Fisheries Quality Assurance (NAFIQAD) has announced the debut of a new website at www.agromart.com.vn to promote the sector.

Dao Van Ho, director of Trade Promotion Centre under the Ministry of Agriculture and Rural Development said Agromart will serve as a bridge for local and foreign businesses to strengthen the exchange of technological products and services in the sector.

Processing tra fish for export (Photo: VNA)

The representative office aims to receive, initially handle and deliver samples of those products to CASE’s technical centres in Ho Chi Minh City and nearby Can Tho city where they will be analysed and tested.

Thanks to the office, companies in the central region won’t have to send samples to other countries or the CASE centres by themselves, Hai added.

CASE was set up in 1985 within the framework of a scientific-technical cooperation programme between the Vietnamese and French Governments. It is equipped with sufficient facilities and personnel that are able to conduct tests in accordance with strict international requirements, including those of Japan, the US and Europe.

Promotional programmes offered during holidays

With Christmas Day and the Tet Holiday just around the corner, a myriad of promotional programmes have been launched by supermarket chains to serve consumer demand.

In addition to the operation of 24 brand new supermarkets nationwide, Vinmart is offering its customers a special discount of up to 49% for all essential products until December 24. Around 300 Christmas gifts will also be presented to children accompanied by their parents who spend more than VND300,000 (US$13.5).

From December 14-27, Co.opmart and Co.opXtra customers have the chance to enjoy special offers, including 50 percent discounts for thousands of essential commodities, one-price programmes and a sparkling Christmas programme. In addition, customers who spend more than VND400,000 (US$18.06) will receive substantial discounts for some commodities.

Meanwhile, shoppers at Lotte Mart are entitled to a discount of 49 percent from December 12-21. However, prices for lucky-money envelopes and Tet decorations are forecast to surge by 5-10 percent.

According to Ho Chi Minh City’s Department of Industry and Trade, prices for Tet commodities will be stabilized and supplies will rise by 15-20% from last year.

Commercial banks in the city have issued VND1.6 trillion (US$72.2 million) in loans for 18 businesses to stock products for the Tet holiday, the Department said.

The Hanoi People’s Committee has also advanced over VND236 billion (US$10.6 million) to 10 enterprises to prepare essential commodities for Tet, including rice, pork, chicken, eggs, frozen seafood, vegetables and confectionary.

Swiss group to manage Mövenpick Resort Cam Ranh Bay

Mövenpick Hotels & Resorts – a leading hotel management group from Switzerland has signed a contract for the management of Mövenpick Resort Cam Ranh Bay in central Khanh Hoa province. The project investor is Eurowindow Nha Trang Tourism Investment Joint Stock Company.

The Mövenpick Resort Cam Ranh Bay covers an area of nearly 24 hectares in the North Cam Ranh peninsula tourist site. The hotel complex includes 121 sea-view luxury villas, 250 five-star hotel rooms, 100 convalescent rooms and 24 shop houses meeting international standards.

At the signing ceremony, Movenpick Hotels & Resorts CEO Jean Gabriel Peres said the tourism market in the central province of Khanh Hoa has seen a strong growth in recent years with an increasing number of domestic and international arrivals. The number of visitors to the province has increased by 14.9% this year. He emphasised that the cooperation will help elevate the group’s status in Asia and contribute to Vietnam’s tourism development.

The North Cam Ranh peninsula tourist site is forecast to welcome one million visitors per year including 30% of international arrivals by 2020. After completion, Mövenpick Rersort Cam Ranh Bay and Radisson Blu Cam Ranh Bay are expected to meet all tourist demands for holidays in accordance with international standards and turn the site into a key national tourism destination.

Yen Bai aims to draw investors

The northern mountainous province of Yen Bai was willing to facilitate investors with top priority given to providing adequate electricity and water in addition to banking, telecommunications and information technology services.

Chairwoman of the provincial People's Committee Pham Thi Thanh Tra delivered this message during an investment promotion conference in Ha Noi on Monday.

Yen Bai planned to open more vocational training centres as a move to improve the quantity and quality of the workforce, she said, adding that the province also offered incentives in terms of land, workforce training and trade promotion.

In his speech at the forum, chairman of the Viet Nam Chamber of Commerce and Industry Vu Tien Loc spoke highly on the province's untapped potential, including those to develop hi-tech, mining, trade and service industries.

Deputy Minister of Industry and Trade Tran Quoc Khanh said foreign investors were mostly concerned about land and environment information as well as the realisation of commitments by the State and local authorities. Thus, if Yen Bai could better meet these demands, the province would then have advantages in attracting foreign investment.

At the conference, the provincial People's Committee licensed Japan-invested Nippon Zoki Viet Nam to develop a 30-ha rabbit farming and processing project, capitalised at US$78.6 million, in Thuong Bang La Commune, Van Chan District.

The province is now home to 21 foreign-invested projects, with a combined investment capital of more than $311 million. Most of these projects are involved in mineral resources mining and processing, and agro-forestry-fishery.

Vietnam, Thailand hold AEC workshop

On December 22, the Vietnam Chamber of Commerce and Industry Can Tho Branch in collaboration with its Thai counterpart organized a workshop to address the impact of the ASEAN Economic Community (AEC) on trade between the two nations.

Speakers at the workshop expressed their optimism that the realization of the trade pact would dramatically broaden cooperation opportunities for trade— and cross border services trade in particular.

According to speakers at the workshop, in 2015 Thailand hosted 103 international trade fairs in the fields of food, agriculture, automatics, healthcare, and infrastructure.

These fairs attracted a large number of visitors and exhibitors from Vietnam and were principally directed at enhancing commercial trade.

Siam Commercial Bank opens branch in HCM City

State Bank of Vietnam (SBV) Governor Nguyen Van Binh has issued a license for the Siam Commercial Bank Public Company Limited (Thailand) to open a branch in Ho Chi Minh City, according to a company spokesperson.

The branch has chartered capital of US$25 million, the spokesperson said and will be located at the Kumho Asiana Plaza Saigon at 39 Le Duan St in District 1.

Seminar promotes VN-Thai trade

A seminar promoting Viet Nam – Thailand trade was held in the Cuu Long (Mekong) Delta city of Can Tho yesterday.

At the event, the Thailand Convention and Exhibition Bureau (TCEB) introduced the Thailand Extra Exhibition "Expand your business opportunities in ASEAN" and the Trade Promoter Reward Programme to participants.

TCEB Director Jaruwan Suwannasat said TCEB would work hard to boost bilateral trade via leading exhibitions in Thailand.

According to the TCEB, Thailand hosted a total of 103 international commercial fairs featuring food industry, agriculture, automation, and health care, in addition to infrastructure last year.

During the period, more than 2,400 Vietnamese visited exhibitions in Thailand, becoming the fourth largest source of arrivals from Southeast Asia.

Nguyen Phuong Lam, deputy director of the Viet Nam Chamber of Commerce and Industry's branch in Can Tho, said Viet Nam was the 11th largest importer of Thailand with goods accounting for 20.4 per cent of the total imports in the country.

Thailand is currently among top 10 investors in Viet Nam with over 300 valid projects. It predominantly sells polymer materials, motorcycles and spare parts, chemicals and steel to Viet Nam, while importing electrical household appliances, iron, steel, and crude oil, apart from fisheries.

The two countries are striving to lift two-way trade to US$15 billion by 2020.

Da Nang: Main streets bustle with Xmas décor shopping

Main streets in central Da Nang city are twinkled with bustling shops selling various festive decorations few days before Christmas.

Stores in Le Duan, Hung Vuong and Dien Bien Phu streets offer a huge selection of eye-catching decorations such as bells, wreath garlands, reindeer figures, snowman and Santa Claus ornaments as well as Santa Claus outfits and accessories.

This year, made-in-Vietnam products are seen more on local shelves as safety fears over Chinese-made toys, which dominated the market previous years, are putting off consumers, a shop owner in Dien Bien Phu Street said.

Pine trees from 1-1.6 metres tall are fetched at 150,000 – 300,000 VND (6.65 – 13.3 USD) per item while those from above 2 metres are priced at 300,000 – 550,000 VND (13.3 – 24.4 USD).

Most of clothing, cosmetics and bedding shops in the city took the occasion to slash their prices down by 50 percent to draw customers.

Several supermarkets and shopping centres launched big promotional deals, including BigC retailer who offers customers discounts of 5-49 percent for more than 1,000 Christmas items.

Shipping services with shippers dressing in Santa Claus outfits also attracted a lot of customers this year. Fees range from 100,000-200,000 VND (4.44- 8.88 USD) per order.

First Lai Chau hydropower turbine’s operation celebrated

The operation of the first turbine of the Lai Chau hydropower plant, a key work of Vietnam, was marked with a celebration in the northern mountainous province of Lai Chau on December 23.

In his speech, Prime Minister Nguyen Tan Dung said the Lai Chau hydropower project, located in Nam Nhun district, is designed to have a total capacity of 1,200 MW and generate an annual turnover of 7 trillion VND (310.45 million USD).

When fully operational, the plant will join the other counterparts on the mainstream Da River – Son La and Hoa Binh – to provide about one-third (25 billion kWh a year) of Vietnam’s total hydroelectricity output.

The three factories will greatly help control the flow of the Da River, contain floods in the lower reach, including Hanoi capital, in the rainy season, and supply water in the dry season, the leader noted.

He appreciated continuous efforts by the investor – the State-owned Electricity of Vietnam (EVN) – and over 8,000 technicians, engineers and workers during almost five years to put the first turbine into operation and make it part of the national grid.

He also highlighted relevant ministries, sectors and agencies’ cooperation with and assistance to the EVN during the project construction, and local authorities’ resettlement of about 8,500 residents to serve the work.

In 2016, the EVN must ensure the safe and effective operation of the first turbine and strive to put into use the two remaining turbines as expected, the PM said.

The first turbine officially generated electricity to the national grid on December 14 this year – three months ahead of schedule. This is a prerequisite for the completion of the entire project in 2016 – one year earlier than the set target.

The plant, the third largest of its kind on the Da River, is also hoped to fuel the socio-economic development and help ensure security-defence in the northwestern region.

On this occasion, PM Nguyen Tan Dung also presented the Labour Order (second and third class) to 10 collectives in recognition of their excellent contributions to the project.

New property businesses increase sharply

The number of newly-established real estate firms has seen a year-on-year increase of 77.8 percent, the highest rate among all sectors, according to the Vietnam Real Estate Association.

The figure shows a positive signal of the property market. Many real estate firms have resumed their operation this year.

Domestic investors have pinned a high hope in the recovery of the market as Vietnam completed negotiations on the Trans-Pacific Partnership (TPP) agreement, which is expected to help increase the liquidity of the estate goods.

Since the beginning of this year, the property market has shown its magnet against other fields such as stocks, gold, foreign currency, or savings.

By the end of the third quarter of 2015, Hanoi saw 5,300 successful transactions, up 70 percent, while Ho Chi Minh City reached 5,100, doubling that of the same period last year.

Tra Vinh calls for investment in wind power

The Mekong Delta province of Tra Vinh is calling for investment in wind power that has a total estimated capacity of 1,600 MW.

Pham Tiet Khoa, Deputy Head of the province’s Economic Zones Management Board, said the province is offering many incentives to enterprises who invest in wind power projects.

The board has granted an investment licence to the Tra Vinh I Wind Power Company to implement the first phase of the Republic of Korea – Tra Vinh Wind Power Plant project with a total investment of 2,400 billion VND (106.6 millionUSD).

Covering more than 1,200 hectares in Truong Long Hoa and Dan Thanh communes in Duyen Hai district, the project is expected to be commenced in early 2016.

According to Tran Quoc Tuan, Director of the provincial Department of Industry and Trade, the department has just announced an already-approved plan on the province’s wind power development through 2020 with a vision to 2030.

Under the plan, the province targets a wind power capacity of 270 MW and an output of 634 million kWh by 2020.

There will be six wind power plants in coastal areas in Duyen Hai district, covering a total area of 7,620 hectares.

Vietnam-Lao Trade Fair 2015 opens in Laos

VNA Wednesday, December 23, 2015 - 11:43:31 Print

Nearly 100 enterprises from Vietnam and Laos are showcasing their products at the Vietnam-Lao Trade Fair 2015, which opened in Parkse city, Champasak province, Laos on December 22.

On the display at 150 booths are high-quality products including garment, footwear, agro-forestry-fishery products, fine-art and crafts, food, electronic and telecommunication products, among others.

Themed “Cooperation, Friendship and Development”, the fair is an economic-politic activity to celebrate 71st anniversary of the Vietnam People’s Army and 40th anniversary of the National Day of Laos.

It also offers opportunity for Lao consumers and visitors to have a closer look on Vietnamese products while serving as a venue for enterprises and investors from two countries to exchange experience and seek partners.

Earlier, Vietnam’s 175 Military Hospital held free medical check-ups and give away medicines to Lao impoverished people.

During the fair, the organising board plans to present 400 gifts, each worth 1 million VND (45.17 USD).

Local fashion fair makes a splash

Crowds of customers flocked to the Vietnam Fashion Fair 2015 opened in Hanoi on December 22 to pick up the best garment-textile products from the local fashion industry.

Jointly held by the Vietnam Expo Centre and the Vietnam Textile and Garment Group (Vinatex), the event features 400 booths from 250 businesses nationwide.

Apart from garments and textiles, visitors could buy cosmetics and use beauty care services.

Popular fashion brands such as NEM, De Charme, Intimate Fashion, and Emma are expected to attract consumers.

Apparel enterprises also take this occasion to introduce their new products as well as promotion programmes.

The organising board enabled young fashion designers from universities across Hanoi to present their ideas and collections to the public.

An online fair is created to help textile companies popularise their latest products.

The event, the 19th of its kind, will run until December 27 at the Giang Vo exhibition and trade center.-

Uber completes one year in Hanoi

Uber, a popular app for personal mobility on-demand, last week celebrated one year of serving the capital city of Hanoi and its residents.

Since the launch a year ago, Uber Hanoi have reportedly provided more than 1.5 million safe, reliable and affordable rides.

Its growth in one year has surpassed all major metropolitan cities such as London , Paris , San Francisco and Singapore.

That has made Vietnam become Uber’s fastest-growing market globally, next to China.

Analytical services office helps firms ensure seafood quality

The Centre of Analytical Services and Experimentation Ho Chi Minh City (CASE) opened its representative office in the central region in Nha Trang city, Khanh Hoa province, on December 22 to help businesses ensure seafood quality.

The office is tasked with receiving aquatic products which will be later analysed and tested to ensure the goods satisfy export standards.

CASE Director Chu Van Hai said the central coast, including Khanh Hoa, is one of the major aquaculture hubs of Vietnam which is strong in aquatic product processing and export.

Khanh Hoa alone is home to more than 1,000 establishments buying and processing aquatic products. Among them, 44 companies specialise in export processing and rake in 350-460 million USD from shipments abroad every year, she noted.

The representative office aims to receive, initially handle and deliver samples of those products to CASE’s technical centres in HCM City and nearby Can Tho city where they will be analysed and tested.

Thanks to the office, companies in the central region won’t have to send samples to other countries or the CASE centres by themselves, Hai added.

CASE was set up in 1985 within the framework of a scientific-technical cooperation programme between the Vietnamese and French Governments. It is equipped with sufficient facilities and personnel that are able to conduct tests in accordance with strict international requirements, including those of Japan, the US and Europe.

The FED’s historic rate hike signals stronger US dollar

The US Federal Reserve hike in interest rates last week has a profound impact on financial markets around the globe, particularly those in emerging economies such as Vietnam, say the experts.

As the Fed sought to slash interest rates over the past decade, portfolio investors seeking higher returns went in search of yield and looked to stocks and other securities in emerging economies to park their investment cash.

As a result, foreign money lifted stocks and currencies and the flood of capital boosted lending and consumption, ensuring emerging markets grew at a faster clip than peers in the developed western world.

In simple terms, this increase –  and those over the next year – will now turn off the faucet and encourage portfolio investors to shift money back from abroad to the US, where their securities can receive higher rates of return on less risky investments.

So far in 2015, the experts say foreign investors have already yanked billions of US dollars from emerging markets and as a result, net capital flows for global emerging markets will be negative in 2015.

This year will be the first year in more than two and one half decades that the net capital flows to emerging markets will have been in the red, the Institute of International Finance (IIF) reported last October.

Deputy Governor Nguyen Thi Hong of the State Bank of Vietnam (SBV) says the Vietnam foreign exchange market is well positioned to weather the adverse impact of the rate hike on cash flows.

Foreign investment in stocks and bonds has not been significant to the national economy in the past, and as such, there is no consequential immediate impact, said Hong during a recent widely reported interview.

However, admittedly the Fed rate dramatically reduces the likelihood that companies operating in Vietnam will be able to attract future capital in the foreign exchange markets.

Deputy Director PhD Nguyen Duc Do of the Academy of Finance’s Institute of Economics and Finance agrees, saying the State Bank has sufficient resources to stabilize the exchange market in the short term.

In addition, Do says the move has not come as a surprise to investors and they have had plenty of time to adjust their securities portfolios, so it is highly unlikely it will manifest in a destabilizing rush to exit the market.

However, the Fed said last week it expects to continue to raise rates at a slow, gradual pace throughout 2016 and experts are near unanimous in their prediction that the higher rates will make the US dollar stronger.

Clearly they say this is problematic for Vietnam’s national economy in terms of profitability of exports and it has far reaching implications on the competition for foreign direct investment, principally in the manufacturing and production industries.

They say a rising US dollar drives down the sales price of exports by companies operating in Vietnam to the US and other markets while simultaneously requiring them to shell out more for imports into Vietnam from other markets.

Southern businesses enhance connection in goods supply

Nearly 280 contracts on goods supply were signed by businesses in the south during a conference to promote supply-demand connection held in Ho Chi Minh City on December 23.

The event was part of trade linking activities among localities in the region towards meeting demand for commodities during the Tet (Lunar New Year) 2016.

Previously, the HCM City Department of Industry and Trade organised five market-finding tours for local merchants, suppliers and enterprises to the Mekong Delta provinces of An Giang, Soc Trang, Ben Tre, Dong Thap and the Central Highlands province of Lam Dong.

According to a representative from the Department of Industry and Trade of Ninh Thuan province, the supply-demand connection between HCM City and localities in the southeastern and southwestern regions has proven effective, helping promoting production and business.

The model will create opportunities for localities to sell their products in modern distribution systems in big provinces and cities.

Thanks to it, Ninh Thuan’s commodities such as grape, apple, and garlic have been sold nationwide, he added.

The HCM City department said that after four years, the connection programme attracted the participation of over 30 localities in the two regions, with nearly 1,000 contracts of good supply and consumption being signed. Of the number, nearly 900 contracts worth 20 trillion VND (889 million USD) were performed.

Deputy Minister of Industry and Trade Do Thang Hai asked industry and trade departments of southern provinces and cities to continue their close coordination and create favourable conditions for enterprises to boost connections.

Producers should focus on improving product quality and designs to meet demands of domestic and foreign markets, he noted.

Southern businesses enhance connection in goods supply

Nearly 280 contracts on goods supply were signed by businesses in the south during a conference to promote supply-demand connection held in Ho Chi Minh City on December 23.

The event was part of trade linking activities among localities in the region towards meeting demand for commodities during the Tet (Lunar New Year) 2016.

Previously, the HCM City Department of Industry and Trade organised five market-finding tours for local merchants, suppliers and enterprises to the Mekong Delta provinces of An Giang, Soc Trang, Ben Tre, Dong Thap and the Central Highlands province of Lam Dong.

According to a representative from the Department of Industry and Trade of Ninh Thuan province, the supply-demand connection between HCM City and localities in the southeastern and southwestern regions has proven effective, helping promoting production and business.

The model will create opportunities for localities to sell their products in modern distribution systems in big provinces and cities.

Thanks to it, Ninh Thuan’s commodities such as grape, apple, and garlic have been sold nationwide, he added.

The HCM City department said that after four years, the connection programme attracted the participation of over 30 localities in the two regions, with nearly 1,000 contracts of good supply and consumption being signed. Of the number, nearly 900 contracts worth VND20 trillion (US$889 million) were performed.

Deputy Minister of Industry and Trade Do Thang Hai asked industry and trade departments of southern provinces and cities to continue their close coordination and create favourable conditions for enterprises to boost connections.

Producers should focus on improving product quality and designs to meet demands of domestic and foreign markets, he noted

Audi opens premium dealership in Danang

On December 23, luxury automaker Audi headquartered in the German city of Ingolstadt, Bavaria inaugurated a premium dealership in Danang, its third such facility in Vietnam.

“In the recent past, we have witnessed an exponential surge in demand for luxury cars coming out of Vietnam,” said a public relations officer of the company at the ribbon cutting ceremony.

Opening a third showroom in the third largest city of the country is the next logical step. This 3S showroom reinstates our commitment and seriousness towards this market.

“Our showrooms in Danang, Ho Chi Minh City and Hanoi will enable us to command a leadership position in the country and also act as a catalyst towards our dominance in the entire Southeast Asian region,” he said.

The facility is conveniently located close to the airport at 86 Duy Tan Street in Hau Chau district and spans 2,500 square metres with the showroom and the service workshop all under one roof.

Based on the global terminal architecture concept with the typical honeycomb facade, the showroom has a display area with a capacity to showcase up to eight cars spreading over an area of 770 square metres.  

Globe’s appetite for Vietnam fruit and vegetables grows

The value of fruit and vegetable exports has climbed 123.7% from a year earlier in the eleven months leading up to December to US$1.673 billion, according to the Vietnam Fruit and Vegetable Association (Vinafruit).  

In a post on its website, Vinafruit attributed the positive results principally to a bountiful harvest and sustained higher outbound shipments to China, Japan and the Republic of Korea (RoK).

China was the largest market for the eleven-month period, accounting for a 65% market share, with exports tallying in at US$989.67 million, a 268.76% spike over last year’s same period.

The major items shipped to Vietnam’s northern neighbour were mangos, bananas, dragon fruit and rambutans.

Meanwhile consignments to Japan, the second largest market, nearly doubled at US$62.32 million, followed by the RoK with gross revenue surging 116% to US$56.53 million.

Vinafruit says Japan has opened the door wider to fruit and vegetables largely as a result of the installation of state-of-the-art machinery and equipment in all phases of production and transport, which has greatly improved product quality.

The Japanese market is a bellwether for the future of exports in the global market says Vinafruit as products meeting the stringent quality and safety standards for entry into it will likely pass muster in most other markets around the world.

However, ongoing structural changes in the industry are needed to drive food supply chains to adopt closer coordination between farmers, producers and exporters to better meet consumer demands.

In an industry driven by consumers’ retail pull, companies will need to continuously reorient themselves to remain competitive, says Vinafruit and respond to market signals to adjust and maintain their positions in the industry.

Additionally, as the fruit and vegetable industry becomes more global, much more effort needs to be placed into performing marketing surveys and studies to cater to specific demands in segments of each market.

Most importantly, the industry should concentrate on boosting the rate of farmers applying VietGap technology, says Vinafruit adding that if it were more widely applied, export revenue of US$2 billion would be well within reach.  

Transporters must cut prices with oil

Transport businesses must adjust transport fees in accordance with changes in fuel prices; otherwise, they may have their business license withdrawn, according to a Ministry of Finance document released yesterday.

The Ministry of Transport (MOT) is required to strengthen the management of transport fees by asking transport businesses to declare transport fees and collaborate with Department of Finance to examine and inspect the businesses' declaration and listing of transport fees. Violators must be subjected to strict punishment.

Previously, the finance ministry sent a document on August asking the MOT to urge businesses to reduce transport fees given that fuel costs had reduced.

By December 18, fuel prices had been adjusted for the 23rd time since early this year, according to the Ministry of Industry and Trade.

There has been a sharp decline in fuel price since mid September this year while transport fees remain unchanged, Head of the Ministry of Finance (MOF)'s Cost Management Sector, Nguyen Anh Tuan told Tuoi Tre (Youth) newspaper.

Diesel 0.05S price in December 18 dropped to VND11,980 (50 US cents) per litre, a reduction of 25.5 per cent compared to that in July 1. The drop in diesel price helped to reduce 8.9 to 11.5 per cent of vehicles' transport costs, according to the MOF.

Based on the drop in fuel price, the MOF asked the MOT to direct localities' transport departments and finance departments to collaborate with related authorities to strengthen management of transport fees to help stabilise costs, said Tuan.

While fuel costs, which account for 30 to 40 per cent of transport fees, dropped sharply, it is unreasonable that transport fees remain unchanged, said Tuan.

The economy and consumers often benefited from a drop in fuel price; however, transport businesses had delayed reducing fees or offering a rate that was not equivalent to the decreasing trend of fuel price for the last two years, said former Deputy Minister of Industry and Trade, Phan The Rue.

Management agencies needed to be more determined and have tighter inspections over price management especially when transport fees have a big impact on goods prices, Rue said.

Due to inappropriate price management mechanisms, the law on price had not yet been fully implemented, said former Deputy Head of the MOF's Market and Price Research Institute, Ngo Tri Long.

Businesses should be authorised to determine fees by themselves and be exempt from reporting to the government when fees are adjusted, said Long.

It is necessary that the authorities follow and inspect businesses' activities. Violators need to be strictly punished and publicised, said Long.

"If businesses delay reducing fees, transport management agencies will not only impose administration fine but also withdraw business licence," said Tuan.

"The Government may need to suspend businesses' operation if delays in price reductions continue," said Rue.

FED interest rate hike not hit VN’s market much

The FED interest rate hike would not cause remarkable effects on the domestic market, affirmed SBV Governor Nguyen Thi Hong.

According to the latest news from the SBV, since December 18, organisations, excluding credit institutions or branches of foreign banks, will also not receive interest for dollar accounts as the State Bank of Viet Nam has decided to reduce USD deposit interest rate to zero percent.

The central bank said the decision was made to continue implementing concerted measures to increase the value of Vietnam dong and ‘avoid dollar hoarding’.

Earlier on December 17, the US Federal Reserve (FED) decided to raise interest rates by 0.25 percentage points, which, however, has not prompted the State Bank of Viet Nam to change its policy on stabilising foreign exchange rates.

As of 8:20 am, Vietcombank quoted the selling price of USD at 22,547 VND and the buying price at 22,517 VND, the same rates as BIDV. Meanwhile, Eximbank kept its buying and selling rates steady at 22,497-22,547 VND per one USD.

The Deputy SBV Governor said that the rising exchange rates in the domestic market over past days are due to the psychological factors following FED interest rate hike to 0.25% and falling yuan.

The demand and supply of foreign currencies are positive, said Ms. Hong.

 Viet Nam ran a trade surplus of US$500 million in October and was projected to enjoy another sum  of around US$260 million in November. FDI disbursement was over 17% higher than the same period last year. The inflow of overseas remittances was on the rise.

The Deputy SBV Governor also underscored that the FED interest rate hike would not strongly affect the domestic market as the foreign indirect investment inflows (in the short term) accounts for a small percentage of total capital inflows into Viet Nam. Thus the interest rate hike would not cause severe impacts on capital inflows. In addition, the move also demonstrated the expectation for higher USD since the beginning of the year.

Draft decree tightens controls on animal feed production

The Ministry of Agriculture and Rural Development has passed around for comment a Government draft decree that provides stricter requirements for animal feed production.

The draft requires animal feed makers to have strong financial capability and set up shop inside industrial parks for the animal feed industry.

Le Van Hoa, the owner of an animal feed factory in the southern province of Dong Nai, has expressed concern over the requirements in the draft decree, saying they would leave impact on his business in the coming time.

In addition to a business license and investment certificate, Article 10 of the draft compels producers to build factories in an industrial park exclusively reserved for the industry.

Hoa said when factories at industrial parks run at full capacity but cannot expand production, they would have to outsource to small plants outside industrial parks. Moreover, it is difficult to relocate production facilities to an industrial park since it is a costly job while finances are limited, Hoa bemoaned.

Commenting on a regulation that each kind of animal feed must be produced by specific machinery, the Vietnam Animal Feed Association said it is unclear because a single production line can be used to make different types of products.

The draft decree also has strict regulations on waste treatment. In addition, technicians of production facilities must hold university degrees in livestock farming, veterinary, food science or aquaculture, or higher degrees.

Nguyen Xuan Duong, deputy head of the Department of Livestock Production at the ministry, said all comments on the draft decree would be taken into account.

He noted favorable conditions would be created for animal feed producers and traders.

According to the livestock production department, Vietnam consumes more than 27 million tons of animal feed annually, including 17-18 million tons of industrial products.

The Vietnam Animal Feed Association has projected the market would continue to thrive in the years to come and an additional one million tons would be needed each year to meet demand.

With 12 animal feed factories in operation, Cargill Vietnam still plans to invest US$30 million in a new facility in the southern province of Binh Duong.

Data of the livestock production department showed only one-fourth of the animal feed factories in the country belong to foreign-invested enterprises but account for nearly two-thirds of the industry’s total output. Combined output of Cargill and C.P Vietnam makes up almost 30% of the total.

TPP seen putting VN agriculture at stake

Vietnam’s agricultural sector must be prepared to confront competition right on the domestic market when the Trans-Pacific Partnership (TPP) trade pact comes into force, experts told a conference in Hanoi last week.

Speaking at the conference on the efficiency of cooperation in the agricultural sector given Vietnam’s accelerated international integration, these experts said the sector is holding strong growth potential but it would face challenges.

Production methods must be improved while farmers and enterprises will have to coordinate. In addition, farm produce must be promoted via modern distribution channels like e-commerce.

Tran Cong Thang, deputy head of the Institute for Policy and Strategy of Agriculture and Rural Development (IPSARD), told the conference that import tariffs on several agricultural products in TPP will fall to zero, thus clearing the way for key Vietnamese farm items like rubber, wood, coffee, cocoa, cashew, pepper, rice and fruit to enter huge foreign markets.

Vietnam can import animal feed and veterinary medicines, among other materials, from Pacific Rim nations at lower prices thanks to import tax exemptions.

Nonetheless, Vietnamese producers of beef, chicken and pork will have to face fierce competition with rivals from other TPP member nations despite a road map for import tariff cuts.

“Imports of these products may not be big as Vietnamese consumers prefer fresh meat. But if food safety and hygiene are not guaranteed, consumers could shift to using frozen meat, which has already become an item of choice for young shoppers at supermarkets,” Thang said.

Although import tax on beef remains high, beef imports into Vietnam have grown swiftly over the past decade, from around US$3 million in 2005 to US$100 million in 2014.

Nguyen Huu Xuan, director of the Dong Thap Department for External Affairs, said Dong Thap is facing a number of hindrances like small-scale production, inconsistent quality, unstable consumption markets and poor technology.

Nagai Katsuro at the Embassy of Japan in Vietnam said Vietnam’s agricultural sector should change production, processing and distribution models apart from ensuring food hygiene and safety.

With some 0.62 hectare allocated for each household, it is extremely hard for farmers to add value to their farm produce, he said, adding intermediaries between farmers and enterprises benefit most.

Björn Koslowski, deputy chief representative of the German Chamber of Industry and Commerce in Vietnam, said Vietnamese exporters of agri-aqua-forestry products should pay attention to e-commerce. They are advised to develop websites with clear and adequate information in English to promote their products.

He said on some occasions, German companies wanted to cooperate with Vietnamese partners but they could not find information about them, so they had to go through intermediaries, which is quite inconvenient. Moreover, Vietnamese enterprises should connect to international trade websites like Alibaba and participate in trade fairs to promote their products.

When orders come, firms must response to customers in a timely manner, he said, adding this is a basic thing which businesses should do to integrate into the global economy efficiently.

Lower fee sought for rice farms converted into residential sites

The HCMC Real Estate Association (HoREA) has proposed the city government reduce the fee for converting rice farms into residential areas to help realty developers cut costs, especially in projects for low-income people.

The HCMC Department of Finance has sent the HCMC government a draft decision on fees for conversion of rice land into non-agricultural sites. It is waiting for approval from the HCMC People’s Council. This fee is new while other taxes and fees for changing land use purposes still exist.

According to the draft, local and foreign organizations, households and individuals that receive land from the State for non-farming purposes are required to pay fees and charges in line with the current regulations plus a sum to protect and develop rice growing land.

This sum depends on how the allocated land is used. If land is used to build houses for sale or rent, and provide services like trade, finance, restaurant, hotel and office, users would have to pay the full price of rice land, which is announced by the HCMC government annually.

HoREA proposed the city government cut the fee for converting rice land into non-agricultural land to half of the price of rice land.

Le Hoang Chau, chairman of HoREA, said prices of apartments for medium- and low-income people are high, making it hard for these people to buy.

According to a real estate development plan for HCMC in 2016-2020, medium-income people must save money for 17 years to have enough money to buy a low-cost apartment worth some VND15 million per square meter.   

“If the conversion fee is kept the same as in the draft, property prices would edge up and home buyers would have to pay the fee,” Chau said.

Heavy bureaucratic apparatus makes resources overstretched

The heavy bureaucratic apparatus has exhausted the State’s resources, according to a study of the Central Institute for Economic Management (CIEM).

The 155-page report on supervision and assessment of economic restructuring says Vietnam has run budget deficits of more than 5% since 2012 due to higher-than-estimated spending.

Since 2013, routine expenditures have risen to more than 70% of total budget spending while development investment has shrunk to below 20%.

Despite a sharp fall in development investment since early 2010, routine expenditures, which mostly go to wage and allowance payments for people in the State apparatus, have surged. Budget allocations are mainly for those working in the State machinery while spending on education, healthcare and scientific research is insignificant.

Rising routine expenses have resulted from a hefty expansion of payrolls. A report of the Ministry of Finance says there are around eight million State employees, civil servants and retirees getting wages and allowances from the State budget.

This report says one in every 8.5 people in the northern province of Quang Ninh is a State employee.

The heavy bureaucratic machinery has led routine expenditures to shoot up and has resulted in corruption.

According to economic expert Le Dang Doanh, the National Assembly has recently expressed concern over the ballooning budget spending, with routine expenses accounting for 70% of the total.

The State apparatus should be downsized from communal to central levels; otherwise, routine spending will keep soaring while the efficiency of State management will remain dismal, the report wrote.

New insurance rule to spell trouble for Vietnam workers abroad

The new regulation that requires Vietnamese workers in foreign countries to buy social insurance at home from early next year will cause troubles for them.

Nguyen Thi Tuyet Mai, deputy general director of Hanoi Investment General Corporation (Hanic), said the company sends more than 1,000 workers abroad a year, with a majority of them living in poverty. If the new rule applies, double social insurance payment might happen as some workers are already socially insured.

There should be meetings to collect comments and workshops for enterprises to learn about the rule, Mai said on the sidelines of a seminar on overseas labor in Hanoi last week.

She asked why Vietnamese workers are forced to buy social insurance locally even though insurance policies in the foreign countries where they are employed are good enough.

The currencies of the countries where a large number of Vietnamese work, such as Japan and Malaysia, have weakened against the U.S. dollar, thus affecting the incomes of these poor workers.

What would happen after they complete their employment contracts abroad which normally last three years. Back home, they often work in informal sectors, so it is unclear how their pensions and benefits would be paid and how they would continue social insurance payment if they want to, she added.

Also on the sidelines of the meeting, labor expert Tran Van Tu said the mandatory social insurance rule aims to ensure benefits for overseas workers but there is a huge gap between theory and reality.

This matter, according to Tu, should be covered by the overseas labor law which is being amended. With the ASEAN Economic Community (AEC) in place early next year, workers in certain sectors can easily move within Southeast Asia and ASEAN might adopt a regulation on avoidance of double insurance payments.

Deputy Minister of Labor, Invalids and Social Affairs Doan Mau Diep told the Daily that upon their return to Vietnam, workers could continue their social insurance policies as wished. Or else, they can make a lump sum insurance claim.

They can also choose to pay after three months, six months, one year or when they have money, Diep said.

Survey: Vietnam has high startup spirit

Vietnam is one of the world’s most entrepreneurial countries, ranking seventh among 44 countries in a recent survey of the startup spirit.

According to the survey conducted by Germany’s Technische Universitat Munchen (TUM), market research firm Gesellschaft fuer Konsumforschung (GfK) and Amway, Vietnam ranks after Denmark, South Africa, Thailand, the UK, China and India in terms of entrepreneurial spirit.

The survey attracted nearly 50,000 participants aged 14 and 99 in the 44 countries. Up to 71% of respondents in Vietnam said they have a positive attitude towards the startup spirit, 89% said they are ready to start up their own business, 75% thought starting up business is viable and 67% said they are undeterred by social forces over whether to launch a business startup.

People in the age group of 34 or below have the strongest desire to become business owners. The older people are, the less they want to start up business. However, the middle-age group is most confident in doing business as they have necessary knowledge, skills and resources.

The survey points out two important factors one needs to become an entrepreneur, which are business opportunities and startup intentions.

Phu Tho to get 98 million USD investment

The Prime Minister Nguyen Tan Dung signed off on a 2.2 trillion VND (97.6 million USD) investment package for infrastructure development of the Cam Khe Industrial Park in northern Phu Tho province, reported baochinhphu.vn.

The Viglacera Corporation, the investor in the industrial park project, will help the park increase efficiency and facilitate its management and operation.

The hope is that the project will stimulate the surrounding areas' socio-economy and further development of industrial parks in the province.

The project will occur in three phases, the first of which will complete developing 137ha by the fourth quarter of 2017. The second phase will add another 138.5ha by the first half of 2020. The third will quickly follow at the end of 2020.

The Prime Minister permitted the provincial people's committee to grant the licence to Viglacera and co-ordinate relevant agencies to assist in land clearance.

The Prime Minister asked the province and investor to attach special importance to devising job solutions for locals whose will be forced to move and for industrial workers in the area.

The Cam Khe industrial park is a multi-industry park utilising advanced technology and producing goods that qualify internationally.

The park will involve several industries: construction materials; electronics and high-end consumer goods; textile equipment; automotive; and agro-forestry machinery and processing.

The park is expected to create 25,000 to 28,000 jobs when it goes into operation.

There are currently seven industrial parks in the province, the biggest being Phu Ha and Cam Khe with 450 ha.-

Vinacomin launches Dong Nai 5 hydropower plant

The Vietnam National Coal and Minerals Industrial Group (Vinacomin) on December 20 inaugurated Dong Nai 5 Hydropower plant in the Central Highlands province of Lam Dong, one of the key projects in the country’s Power Development Plan 7.

Invested by Vinacomin’s Power Holding Corporation with a total capital of 6.11 trillion VND (268.48 million USD) , construction of the plant, which is located in both Lam Dong and Dak Nong provinces, started in late 2012.

The plant’s first turbine was connected to the national grid in September this year, two months ahead of schedule, while the second one operated two months later.

With a combined capacity of 150MW, the two-turbine plant is expected to generate over 600 million kWh to the national grid every year, contributing to ensuring national energy security and promoting socio-economic development in the localities hosting it.

Telephone exports at record high in November

Exports of telephones and components hit a record high of US$2.78 billion in November, up 4.4% from a month earlier, according to the General Department of Vietnam Customs.

January- November exports of the product reached US$28.44 billion, up 29.5% over last year’s corresponding period.

The Vietnam Customs reported that the EU was seen as the largest export market at US$9.48 billion, up 19.2% and accounting for 33.3% of total export revenue.

The European bloc was followed by the UAE at US$4.26 billion (up 29.7%) and the UK at US$1.58 billion (up 51.6%).

50 outstanding businesses praised for social contributions

As many as 50 outstanding enterprises for laborers will be honored on December 26 as announced at a press conference in Hanoi on December 21.

The press briefing was held by the Vietnam General Confederation of Labor, the Ministry of Labor, Invalids and Social Affairs, the Vietnam Chamber of Commerce and Industry and the Labor Newspaper.

These enterprises were selected among 1,000 enterprises nominated for the award. Organized for the second year, the program aims to honor enterprises that have improved the working environment, developed good relationship with their employees and contributed greatly to society.

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