Black pepper price in Central Highlands drops strongly

The price of black pepper in the Central Highlands provinces has continued to plummet, hitting 80,000 – 82,000 VND per kg, a low record in the last seven years.

According to the Steering Committee for the Central Highlands, the price of black pepper once reached 230,000 VND per kg, bringing profits of 3-4 folds higher than those coffee and cashew nuts. Therefore, farmers in the Central Highlands expanded pepper growing areas despite authorities’ warnings, leading to excess supply and falling prices.

According to plans, Dak Lak, Dak Nong, and Gia Lai provinces will have 6,000 ha of pepper growing areas each by 2020. However, the current pepper coverage in the provinces is 28,000 hectares, nearly 25,000 hectares and 15,697 hectares, respectively.

Additionally, farmers grow pepper on poor land, or replace old coffee plants with pepper without treating disease-infected soil. They also use fertiliser and chemicals, and small pepper trees, running the risk of mass pepper plant deaths.

The committee urged localities to review planning and management of pepper growing and production.

According to the committee, localities should also provide technical assistance for local farmers in selecting suitable land, sibling trees, growing, caring, harvesting and drying.

Focus should be put on developing regional or local pepper brand names while forming linkages among farmers, enterprises and scientists to ensure the sector’s sustainable development.

The Central Highlands region has more than 71,000 hectare of pepper, producing at least 120,877 tonnes, mostly in Dak Lak.

M-commerce key to business success     

Businesses who hope for success need to stay abreast of the latest m-commerce trends in order to retain their competitive edge in the business environment, Nguyen Ngoc Dung, vice president of Vietnam E-commerce Association, said at the Vietnam Mobile Day 2017 event.

The event was organised by TopDev with key support from the Vietnam E-commerce Association (VECOM) in HCM City on May 20, with the participation of Facebook, Google and Microsoft.

Three key topics, namely Mobile Commerce, Mobile Business and Mobile Technology, and 120 subtopics were discussed at this year’s event named “The Revolution of Mobile Industry”.

E-commerce and m-commerce are significant trends evident in the Vietnamese market, across multiple business sectors and industries. As a useful retail channel in a digital society, m-commerce is quickly gaining in both reputation and revenue.

According to the Vietnam Digital Landscape 2017 report by We Are Social, as of January 2017, there were 47.19 million active mobile internet users across the country, accounting for half of the total population.

Amongst nearly 95 million Vietnamese people, 39 per cent claimed to have purchased a product or service online and typically 29 per cent claimed to have made at least one online purchase via a mobile device.

It is also worth mentioning the total value of the national e-commerce market in Viet Nam in 2016 amounted to US$1.8 billion. According to the Vietnam Business Index 2017, 45 per cent of businesses claim to have a website but only 19 per cent of these websites are mobile friendly, compared to 26 per cent in 2015.

“Choosing a suitable domain name is the very first step towards building a reliable and successful online presence. It is not simply an Internet address. It is something that goes in line with all business activities and brand development - something that makes the reputation and credibility of the brand. With friendliness to mobile devices, businesses can ensure they reach a larger audience and enhance their competitiveness in the game,” said Dung.

“A strong online presence requires a successful website with the right domain name. Especially for businesses with global vision, “.com” has always been trusted thanks to its availability, credibility and high stability for more than 18 years,” Huynh Ngoc Duy, CEO of Mat Bao added.

Vietnam Mobile Day has been held annually since 2011, aiming to emphasise the importance and benefits of m-commerce and opportunities businesses can leverage through m-commerce.

After seven years, the event has been recognised as the largest and most influential domestic mobile event, an extraordinary “tech-feast” for Vietnamese tech-lovers as well as a special occasion for world-leading tech companies to attend, learn and find new opportunities with Viet Nam’s mobile market.

Cau Tre export goods processing renamed after Korean acquisition     

The annual shareholders meeting of Cau Tre Export Goods Processing JSC on Sunday approved changing the company’s name to CJ Cau Tre Food Joint Stock Company.

The meeting also approved adding to its scope of business a number of industries such as vegetables and fruit processing and preservation, producing cakes and ready-to-eat foods, and food wholesaling.

It doubled the proposed investment in a food processing complex at the Hiep Phuoc Industrial Park in HCM City’s Nha Be District to VND1.2 trillion (US$52.8 million).

CJ CheilJedang Corporation, a subsidiary of South Korean conglomerate CJ Group, earlier became the largest shareholder in Cau Tre, after gradually buying 71.6 per cent of its stakes.

It became a strategic shareholder last December by buying up 47 per cent of the company’s shares from investment funds. At that time the State-owned Saigon Trading Corporation (Satra) held a 45 per cent stake.

By March CJ increased its ownership to 51.6 per cent.

In April Satra auction 20 per cent of Cau Tre shares, which CJ bought up. After this, Satra only holds 25 per cent of the capital, with the remaining 3 per cent being held by other individuals.

Cầu Tre has a chartered capital of VND117 billion.

The company has a long history since 1982, specialising in frozen seafood and meat and other agricultural products, which were distributed locally and exported to many difficult markets like Japan, South Korea, the Netherlands, and the US.

Last April CJ CheilJedang acquired a 64.9 per cent stake in Minh Dat Food, thought to be the biggest Vietnamese private meatball company.

A CJ Vietnam spokesperson said food is one of the company’s core business sectors, and the deals show that this its long-term plan in Viet Nam.

Quang Ngai wants $4.25b of investment     

The central province of Quang Ngai aims to lure total investment capital of US$4.25 billion by 2020, via an investment promotion programme from 2017-20.

Of the sum, $2.5 billion-$3.5 billion is expected to flow into Dung Quat Open Economic Zone and industrial zones (IZs) while the remainder is expected for other locations in the locality, baodautu.vn reported.

Prioritised sectors for investment include processing, supporting industry, urban and IZs infrastructure development, sea ports and maritime services in addition to high-tech agriculture, tourism and services.

As of March 2017, the province had attracted 41 foreign-invested projects, worth more than $1.1 billion, 30th among 64 localities in foreign investment attraction, the Foreign Investment Agency’s revealed.

To attract more investment, the province offers investors minimum land rents, equivalent to 0.5 per cent of land prices in a framework stipulated by the Government, according to the provincial People’s Committee.

The province also assists investors with 20 per cent of site clearance costs for some projects and with 50-90 per cent of infrastructure investments for projects involved in education, healthcare and culture, as well as sport and the environment.

It helps investors deal with administrative procedures via a one-stop shop mechanism, while supporting them in trade, promotion and labour training.

RCEP ministers celebrate progress     

At the third Intersessional Ministerial Meeting of the Regional Comprehensive Economic Partnership (RCEP) held on Monday in Ha Noi, participants discussed issues such as goods, services, investments and rules in RCEP negotiations, in hope of finalising the agreement by the end of the year.

Senior officials and trade representatives from 16 RCEP members voiced their unanimous agreement on the RCEP’s potential of bridging economies, creating favourable conditions for interregional goods and facilitating service trade flows.

Delivering the opening speech at the meeting, Minister of Industry and Trade Tran Tuan Anh affirmed that despite growing trade protectionism, free trade is possible on the basis of the comprehensive balance between the RCEP’s negotiated areas of interest. 

“In the context that protectionism is emerging in a number of major economies in the world, we believe that the conclusion of the RCEP agreement negotiation will convey a clear and consistent message of the opening and economic integration enhancing policy of the countries in the region,” said Tuan Anh.

Ministers attending the meeting considered the RCEP conclusion to be a concrete and defining achievement for open trade policies and economic integration progress of regional countries, which ultimately will help increase the investment attractiveness of RCEP nations.

This trade pact will allow for the construction of a comprehensive, multilevel connectivity mechanism that will bring more tangible benefits to regional enterprises, especially micro, small and medium sized companies that account for more than 90 per cent of firms in the region.

In accordance with Tuan Anh, China’s Minister of Commerce Zhong Shan told Xinhua that his government has proposed to support ASEAN countries’ efforts to expand the RCEP consensus, while working together to conclude the negotiations as soon as possible with respect to the demands of all parties.

However, questions were still raised regarding the difference in level of economic development amongst member countries, which require practical and flexible approaches such as concurrent bilateral trade negotiations between countries. This should help RCEP members to commit to opening their own markets without being compromised by foreign competition.

Officials suggested they all work together, focusing on issues such as tariff reduction, service coverage, the digital economy and freedom of movement, as flexibility and gradualism are the selling points of the RCEP.

After the US announced its withdrawal from the Trans Pacific Partnership (TPP) Agreement, the RCEP talks, which began in 2012, have been given new motivation to push through toward the common goal of regional economies building a powerfully connected Asia Pacific.

It expects to create a free trade area of more than 3.5 billion people, bringing together 10 members of ASEAN and their partners, including Japan, South Korea, China, India, Australia and New Zealand. 

VN vows to boost Pacific trade     

A seminar “The Pacific Alliance (PA) and Viet Nam in the global context” was held in Ha Noi on Monday, aiming to support Viet Nam’s role as the ASEAN co-ordinator with the alliance.

The event also looked to promote co-operation, trade and investment opportunities between the PA and Viet Nam.

The Pacific Alliance, established in 2011, is a trade bloc comprised of Chile, Columbia, Mexico and Peru. It aims to move towards free movement of goods, services, resources and people; driving growth of the members’ economies.

Vu Quang Minh, assistant minister of foreign affairs, said that economic and trade relations between Viet Nam and the PA’s members had increased, with an impressive average annual growth rate of 15-20 per cent.

In 2016, trade turnover of Viet Nam and the PA reached more than US$7 billion, accounting for 50 per cent of the country’s total trade volume with Latin America.

Viet Nam and PA countries also co-operate in fields such as science and technology, climate change, agricultural development, animal husbandry, aquaculture, tourism, public transport and infrastructure.

As a co-ordinator between ASEAN and the Pacific Alliance in 2017, Viet Nam agreed to work with ASEAN and PA members to implement activities listed in a framework document between the two groups, Minh added.

Dinh Xuan Toan, chairman of Rabomark - a Vietnamese quinoa importer, highlighted the benefits working with the PA brings to local enterprises, for example, tariff cuts of 92 per cent in some cases and easy access to information on suppliers.

Viet Nam’s telecommunications firms also have big opportunities in the PA and Peru in particular through working with big local firms.

“Latin America is a potential market for Viettel on the way to reach further, especially in the fierce competition in Peru’s telecommunications industry,” said Nguyen Viet Dung, deputy general director of Viettel Global Investment Joint Stock Company at the event.

Dung said Viettel had 2.5 million subscribers in Peru after two years of operation. In 2016, Viettel accounted for more than 10 per cent of market share in Peru, a year-on-year rise of 7 per cent.

Viettel proposed Peru’s Government and PA authorities support the company’s projects with policies, procedures and provide appropriate payment methods for foreign enterprises, Dung said.

The event was attended by high-ranking officials from Chile, Columbia, Mexico, Peru and Viet Nam, embassies’ representatives and Vietnamese enterprises interested in doing business in Latin America.

The seminar is part of the Pacific Alliance week held in Ha Noi from May 22 to 28. 

Work begins on Ca Mau garment factory     

Construction of a garment factory worth VND153 billion (US$6.8 million) commenced late last week in the southernmost province of Ca Mau.

Covering more than 16,000sq.m in Ly Van Lam Commune, the factory will be the first to produce garment products for export in the province.

The project will be divided into two phases, the first slated to be completed in the first quarter of 2018, providing 2,000 local jobs.

Addressing at the factory’s ground-breaking ceremony, the provincial People’s Committee Vice Chairman Le Van Su spoke highly of the factory’s development, saying it will help increase the province’s export turnover.

In the first quarter of this year, the province’s export value experienced a year-on-year drop of 7.2 per cent to $172.3 million, according to the province’s Department of Industry and Trade. 

ASEAN auto demand predicted to grow in 2017

ASEAN auto demand is forecast to continue rising in the rest of this year, despite the saturation of the market, according to a survey by the Financial Times’ Confidential Research (FTCR) for the region in the first quarter of this year.

In quarter one, the Auto Purchase Index (API), which measures the six-month outlook for auto sales, is positive for Indonesia and Thailand, but negative for Malaysia, the Philippines and Vietnam.

Indonesia enjoyed a 6% rise year on year in auto sales, while Thailand saw a 15.9% increase year on year.

Meanwhile, Vietnam’s API fell slightly, mostly because consumers delayed purchases until 2018 when the ASEAN Free Trade Agreement will eliminate tariffs on imported autos. Sales growth slowed to single digits after soaring by 29.4% in 2016 and 56.7% in 2015. However, experts said that the index will recover in the second half of 2017 and thrive in 2018.

At the same time, Malaysia saw a decrease in API, but enjoyed a 7.3% rise in auto sales from the same period last year. 

In the Philippines, sales rose 23% in the first quarter after a 24.6% increase in 2016. However, auto demand in the country may start declining this year, said the survey.

In the first quarter, the Motorcycle Purchase Index fell in almost all of the above-mentioned Southeast Asian markets except for Malaysia. Experts predicted that sales for the whole region will decline for the year due to the sluggish market in Indonesia, which accounts for half of all sales in the five ASEAN countries in 2016.

FTCR also said that the middle class in the region will help boost auto sales, while the motorcycle market is increasingly saturated.

Vietnam’s 2015 budget overspend tops US$3.88bn: audit

The Vietnamese government’s total expenditure in 2015 was nearly US$4 billion more than budget estimates, a state audit has revealed.

Last year, the lawmaking National Assembly approved a budget spend of VND1,177 trillion (US$51.85 billion), but real government spending actually reached VND1,265 trillion (US$55.73 billion), according to the audit’s report.

The VND88 trillion (US$3.88 billion) overspend was attributed to improper budget allocations, haphazard spending and poor management of state capital, the state’s auditor said.

Ministries, industries and local administrations allocated a combined VND308,853 billion (US$13.61 billion) on investment projects, nearly US$4 billion more than the original approved estimate of only VND225 trillion (US$9.91 billion), according to the report.

The assessment, evaluation and approval of these state-invested projects, however, have been poorly executed, leading to excessive allocations of state capital.

Some projects had even prepared investment estimates that were higher than the approved budget.

For instance, while the project to build new headquarters for the Ministry of Foreign Affairs was initially allocated VND4,022 billion (US$177.18 million), the total estimate for construction alone began as high as VND5,952 billion (US$262.2 million).

After auditing the 1,228 state projects proposed by ministries and central and local agencies, the state’s audit suggested that budget estimates for these plans be cut by VND12,399 billion (US$546.21 million).

A further budget overspend was attributed to profligate spending by local administrations on public assets, such as government cars. For example, the administration of the Central Highlands province of Dak Lak was singled out for its purchase of eight new cars worth a total of VND9 billion (US$396,476).

The government and state agencies have also overspent on ‘regular spending,’ or expenditure allowed for essential activities and operations.

The approved budget for regular spending by the National Assembly in 2015 was VND777 trillion (US$34.23 billion) but the real outgoings were VND788.5 trillion (US$34.74 billion).

Seminar seeks to tighten ASEAN-Pacific Alliance linkages

A seminar was held in Hanoi on May 22 to discuss ways to support Vietnam’s role as coordinator of ASEAN’s relations with the Pacific Alliance (PA), thus strengthening cooperative ties between the two blocs and between Vietnam and the PA.

The event was part of the PA Week in Hanoi from May 22-28, with a range of activities such as gastronomy, a film festival and a photo and product exhibition.

The seminar was attended by senior officials of Vietnam and PA members, including Chile, Colombia, Mexico and Peru, along with representatives of 49 embassies and Vietnamese firms, which are interested in Latin American markets.

In his opening speech, Secretary-General of the Pacific Economic Cooperation Council (PECC) Eduardo Pedrosa highlighted the goals of the PA, including building a deeply integrated region; promoting growth, development and competitiveness of the member economies; and forming a forum on political cooperation as well as economic and trade integration.

Vu Quang Minh, Assistant the Foreign Minister of Vietnam, spoke highly of the PA’s role in the recent outstanding development of the Asian-Pacific region. Established in 2011, the alliance has developed rapidly and impressed the whole world with its regional connectivity process in various fields, he said.

Latin America is always a very important region in Vietnam’s foreign policy and international cooperation, Minh said, adding that the PA countries are critical partners of Vietnam. Their political ties with Vietnam have continually been reinforced through mutual visits and meetings between senior leaders on the fringe of international conferences.

Minh said economic and trade relations between Vietnam and the four PA members have kept growing by 15-20 percent each year, exceeding 7 billion USD in 2016 – accounting for 50 percent of Vietnam’s total trade with the Latin American region. The Southeast Asian nation and the PA countries have also cooperated in many other spheres such as science-technology, response to climate change, social welfares, agriculture, tourism, public transport, urban infrastructure development, culture and education.

At the seminar, participants discussed many issues regarding cooperation areas in order to enhance the friendship, cultural exchanges and trade ties between Vietnam and the PA.

RoK agricultural firm seeks opportunities in Hau Giang

The Republic of Korea’s Hand & Hand Company held a working session with authorities of southern Hau Giang province on May 22 to seek business opportunities in agriculture. 

At the event, Vice Chairman of the provincial People’s Committee Truong Canh Tuyen said with more than 130,000ha of agricultural land, Hau Giang is switching from the cultivation of low-yield rice to high-quality fruits due to climate change and saline intrusion. 

As the province pays special attention to agricultural investment, it offers incentives to firms in terms of land lease and corporate tax, he said. 

Min Kim, General Director of Hand & Hand Company, revealed a plan to pilot banana and pineapple farming on a 50ha site in the province, then expand it if suitable. 

Nguyen Van Dong, Director of the provincial Department of Agriculture and Rural Development, said local soil and weather conditions are suitable for the planned fruits, suggesting that the firm partner with farmers to develop material sources. 

Hand & Hand provides domestic and imported farm produce and runs orchards of banana, pineapple, papaya and dragon fruit in Thailand and the Philippines. 

It signed contracts with the southern provinces of Dong Nai, Binh Duong and Binh Phuoc to grow fruits for export, partner with farmers to build farms and offer technical support in cultivation.

Meeting seeks to finalise RCEP trade pact

The third Inter-sessional Ministerial Meeting of the Regional Comprehensive Economic Partnership (RCEP) opened in Hanoi on May 22, with the aim to speed up negotiations seeking to finalise the regional trade pact.

Attending the event were representatives from the 10 ASEAN nations and their partners of Australia, China, the Republic of Korea, India, Japan and New Zealand.

Minister of Industry and Trade Tran Tuan Anh said that the parties involved have exerted efforts to boost negotiations with a hope to expand economic integration on the basis of the existing positive cooperation between ASEAN and its six partners.

All of them expect the RCEP will create a stable and unified framework and facilitate the circulation of products, services and investment in the region.

The minister believed that for enterprises in the region, especially micro, small and medium ones, the agreement will facilitate their more efficient operations, help them approach new resources, bring their strengths into full play, and intensify their involvement in the regional value chain.

Vietnam supports the finalisation of RCEP negotiations in 2017, he affirmed, stressing the need for the related parties to promote bilateral negotiations to reach commitments on market opening.

At the meeting, participants agreed that concluding RCEP negotiations will deliver a clear and consistent message on door-opening policy and economic integration of regional countries, thus helping increase the attraction of RECP economies.

Discussions at the event contributed to narrowing differences in opinions on important issues and putting forward clear orientations for intensive discussions towards making basic progress in the following negotiation sessions.

Samsung Thái Nguyên to employ 15,000 more workers

Samsung Electronics Thái Nguyên (SEVT) will continue to expand its production scale, creating jobs for some 15,000 people and increasing export turnover and contribution to the State budget.

SEVT’s representative said by the end of 2016, its total investment reached US$7.5 billion and disbursment was up 87 per cent of the total. SEVT contributed 21 per cent to Việt Nam’s export turnover.

He said SEVT has not only invested in mobile phone and tablet production, but has also implemented some research projects on Samsung’s mobile phone software.

The company has built 39 buildings to ensure accommodation for its more than 30,000 workers. It has also organised South Korean and English language training classes and colleges for its employees.

The company came into operation in March 2014 with initial investment capital of $5 billion.

Food Safety Expo opens in Hà Nội

A wide selection of clean food products and specialties from different regions are on display at the Food and Food Safety Expo, which opened in Hà Nội on Monday.

The expo is being held by the Vietnamese Artists and Trademarks Association (VATA) at the Việt Nam Agricultural Exhibition Centre in Hà Nội’s Hoàng Quốc Việt Street till May 28. Themed “Say No to Dirty Food”, the expo has 200 participants who have on display safe food products and safe food processing technology.

The 200-odd stalls offer a variety of items such as cordyceps fungus, honey, forest mushroom, fish sauce, free-range chicken, coffee, gấc oil and black garlic, all from reliable suppliers such as certified companies and clean agricultural co-operatives across the country.

Speaking at the opening ceremony of the fair, Lê Ngọc Dũng, president of VATA, said food safety was a big area of concern for the Party, the Government, and to all Vietnamese citizens.

Through the fair, businesses can showcase what they do to ensure food safety in production, work towards gaining a foothold in honest business, and provide information on food hygiene and safety, he said. It was recommended that businesses apply advanced quality management systems, and follow food safety standards promulgated by Việt Nam and international organisations.

At the expo, Hoàng Hải from HCM City-based Enjoy Life Việt Nam JSC introduced visitors and customers to its Aquaponics system – a model of growing fish and vegetables in the same pond. The company has attended the fair several times, but this is only the second time that it is introducing people to its Aquaponics system, Hải said.

Dien Bien repatriates remains of voluntary soldiers from Laos

A solemn ceremony was held at Tong Khao Martyrs Cemetery in northern Dien Bien province on May 23 to rebury 30 sets of remains of voluntary Vietnamese soldiers who laid down their lives on battlefields in Laos.

Local residents and officers have waited along streets in Dien Bien city since early morning to welcome home the remains of the soldiers, 29 of them have not been identified. 

They were repatriated from the Lao provinces of Oudomxay and Xayabury and are now reburied at the Tong Khao Martyr Cemetery in Thanh Nua commune, Dien Bien district.

Leaders of Dien Bien province and locals laid wreaths and offered incense in tribute to the national heroes who sacrificed their lives for the past international mission.

Speaking at the event, Vice Chairman of the provincial People’s Committee Le Van Quy said Dien Bien province will continue its work to search for and repatriate martyr remains and educate local young people on the bravery and sacrifices of voluntary soldiers for the Vietnam-Laos solidarity.

Workshop promotes VN -Thailand trade, investment cooperation

The Ministry of Industry and Trade (MoIT) and the Thai Ministry of Commerce jointly organised a workshop to promote trade and investment cooperation between Vietnam and Thailand in Hanoi on May 23.

Addressing the event, Deputy Minister of Industry and Trade Do Thang Hai said the event takes place when member nations of the ASEAN Economic Community (AEC) are accelerating the realisation of commitments towards a single market and production base, a competitive economic region, equitable economic development, and integration into the global economy.

Hai suggested the two sides organise more trade and investment promotion activities and encourage more Thai investment in Vietnam while assisting Vietnamese firms in entering the Thai market, thus contributing to the trade balance.

With the determination of the two Governments and proactive involvement of the nations’ enterprises, Vietnam and Thailand will see stronger economic cooperation, with two-way trade to reach 20 billion USD by 2020, Hai said.

For his part, Thai Deputy Minister of Commerce Winichai Chaemchaeng spoke highly of the assistance the MoIT has provided for the two countries’ enterprises to promote trade and investment cooperation.

He underlined the huge trading potential between the two neighbours thanks to their favourable transport conditions and policies on goods exchanges.

The Thai official expressed his belief that the cooperation between Vietnam and Thailand will contribute significantly to the solidarity and cooperation in ASEAN.

During the workshop, the Investment Promotion Centre for Industry and Trade under the MoIT’s Trade Promotion Agency (VIETRADE) and the Thai Kasikorn Bank signed a cooperation agreement to help the two nations’ firms.

Bibo Mart receives strategic investment from ACA Investments

The Bibo Mart Joint Stock Company (JSC) received a strategic investment from Asian Capital Alliance (ACA) Investments on May 23.

ACA Investment is a Japanese fund manager under the Sumitomo Group. The investment will see it acquire a 20 per cent holding in Bibo Mart.

Bibo Mart is retailer selling products for mothers and children and was established in 2006. It now has some 120 stores around Vietnam, which it expects to increase to 180 this year and 500 by the end of next year. Minimum revenue is expected at $300 million with an enterprise value of $500 million.

Mr. Hiroyuki Ono from ACA said the fund is keen to invest in the long-term in Bibo Mart and may increase its holding in the future.

ACA Investments is one of the best-performing fund managers in Asia, with a head office in Singapore and extensive experience in investing in projects in the Asia-Pacific region.

It was established in 2008 and has a focus on growing companies in specific industries as well as investment-related services such as mergers and acquisition advisory.

It aims to bring a high return on investment and currently manages $900 million.

It has invested in Malaysia, Indonesia and Singapore and has experience in Vietnam, with projects including Son Kim Land, Cungmua, and Viet Thanh Technology (under VTV Cab).

Titanic shipping company taking on water

The released annual report of Vinalines subsidiary Vietnam Ocean Shipping Joint Stock Company (Vosco) showed a big loss in 2016 and the company is trying to save itself by restructuring for the second time in ten years.

Vosco’s 2016 annual report shows that the company is deep in loss. In particular, Vosco’s total revenue in 2016 decreased to VND1.316 trillion ($57.8 million), a reduction of nearly 23 per cent compared to last year. This is a record-low since Vosco was turned into a joint stock company ten years ago. The company had a negative after-tax profit of VND359 billion ($15.8 million).

As of the end of 2016, Vosco’s total assets were VND4.238 trillion ($186.5 million), of the total, its liabilities were VND3.609 trillion ($158.8 million) and long-term borrowings were nearly VND2.9 trillion ($127.6 million). The company’s financial expenses, including interest expenses and exchange rate difference, were estimated to be nearly VND180 billion ($7.92 million). This amount contributed to the Vosco’s deep loss.

Vosco’s leaders said that the company has implemented numerous policies to enhance its revenue, however, the increase of the US dollar and fuel prices have significantly affected the company’s business.

There is a growing competition in the marketplace and thus, the shipping fees decreased by 30-50 per cent per shipment on average. The shipping efficiency also declined as ports are becoming increasingly overloaded, which lengthens the time for loading and unloading goods.

To break out of its losing streak, in the annual shareholders’ meeting at the end of April 2017, Vosco agreed on cutting down its shipments to 5.3 million tonnes, earning a revenue of about VND1.3 trillion ($57.2 million) in 2017. Regarding after-tax profit, this is the third year Vosco does not set a particular target, instead focusing on minimising losses.

The most important step for Vosco is to implement the second financial restructuring plan by liquidising its assets to stop losses on each specific project and by negotiating the adjustment and timeline of its debts with lenders. At the same time, Vosco keeps looking for investors to divest 8.75 million shares from Maritime Bank.

Vosco’s leader said that currently, according to government orders, Vosco has temporarily suspended paying the matured principal of over VND840 billion ($36.96 million), which was borrowed from Vietnam Development Bank (VDB) to build new ships. Previously, following the support of Vinalines and the Ministry of Transport (MoT), Vosco has dealt with VDB to forgive the loan’s interest and extend the deadline to pay off the matured principal.

If the second restructuring plan does not bring the expected results, Vosco’s stocks may be delisted due to its three consecutive years of losses, like many previous companies, such as Vitranschart JSC and Seagull Shipping Company.

Vosco was established in 1970 and in its glory days, it was the leading company in the shipping industry. Vosco was the first company in Vietnam to provide shipment services to the US, India, and Australia. After operating as an SOE for 37 years, Vosco has been equitised, after which Vinalines, which represents the state stake, held 51 per cent of its chartered capital.

Vietnam exports tuna products to 140 countries

Vietnam tuna products have been shipped to nearly 140 countries in the world two years after implementing the pilot projects to exploit, purchase, process and consume tuna based on value chains in Binh Dinh, Phu Yen and Khanh Hoa provinces.

These provinces are key tuna production and processing localities. Fishermen joining the chain have got higher income while the price of tuna has increased from VND50,000-VND60,000 per kilo in 2012 to VND95,000-VND100,000 in 2017.

Currently the three provinces have 2,372 ocean tuna fishing vessels with a total output of more than 92,000 tons last year and 15 businesses which process and export tuna products to 138 markets in the world.

Key importers of Vietnam tuna products included the US, EU, Thailand, Israel and Japan.

Vietnam tuna exports hit more than US$500 million last year.

Vietnam enjoys trade surplus with Australia

Trade between Vietnam and Australia hit more than US$1.89 billion in the first four months of this year, of which Vietnam’s exports reached nearly US$1.05 billion (up 21.2%) and imports were US$848 million (up 14.2%) against the same period last year.

According to the Vietnam Trade Office in Australia, Vietnam enjoyed a trade surplus of US$202 million with Australia in the period.

Top export products to Australia was telephones and components with US$252 million (up 9.9%), trailed by computers, electronics and components with US$117 million (up 76.5%) and footwear with US$68.3 million (up 26.3%).

Meanwhile, major import products included metal (up 44.6% to nearly US$182 million) and coal (up 87% to US$167 million). 

Vietnamese lawmaker worries growth obsession will foster mining-dependent economy

The Vietnamese government expects to hit its growth target for the year despite a slow first quarter by excavating more crude oil, but lawmakers said this would go against a bigger plan to build a sustainable economy which relies less on mining.

Deputy Prime Minister Truong Hoa Binh said at the legislative National Assembly's month-long session which started on May 22 that it is determined to hit its GDP growth target of 6.7% this year, despite a three-year low of 5.1% growth in the first quarter.

But Vu Hong Thanh, chairman of the assembly, said that the target will be hard to meet as the economy will have to expand at more than 7% over the next three quarters, while a more realistic rate is 6.3-6.5%.

The government plans to boost growth by increasing crude oil excavation, but Thanh said one reason for the first quarter slowdown was that the economy relied too much on mining and had been unable to identify a fresh growth injection.

He said the government needs to “carefully consider” the crude oil plan.

Vietnam resorted to the same measure in 2015 when it recorded its highest GDP growth in five years at 6.7%.

But oil failed to work its magic in 2016 amid global price drops. The economy expanded an estimated 6.21% last year, its first slowdown in four years, with the mining sector falling 4% on low coal and crude oil prices.

Thanh said that economic growth still depends largely on the FDI sector and a small number of conglomerates, which does not guarantee sustainable growth.

His committee suggested that it’s time the government focuses more on reforming the essence of the economy to ensure stable growth rather than maintaining growth by any means necessary.

He also asked the government to watch out for another property bubble, given an 84 percent increase in the number of new businesses opening in 2016.

France’s Decathlon plans supermarket chain in Vietnam

French firm Decathlon plans to set up 50 supermarkets across Vietnam in the next two or three years, with the first to go up in HCMC, said Lionel Adenot of Decathlon.

At a meeting with HCMC vice chairwoman Nguyen Thi Thu last week, Adenot said Decathlon looks to enter the retail market after over 21 years of manufacturing sports goods in Vietnam.

The planned supermarket in HCMC would go up at Rach Chiec National Sports Complex in District 2, he said.

Covering 5,000 square meters, the three-floor store would house a retail store and a free sport ground for shoppers. The first floor would be for vehicle parking, the second for retail and the third for the firm’s staff.

The company is waiting for approval from Vietnamese authorities.

Decathlon Vietnam is the second largest manufacturer of Decathlon worldwide with 200 million units a year, creating jobs for 75,000 employees and 300 staff, Adenot noted.

Vice chairwoman Thu asked Decathlon to wait until the Rach Chiec National Sports Complex is approved for investment.

She told the Departments of Culture, Sports and Tourism, and Planning and Investment and District 2 where the Rach Chiec Sports Complex will be developed to help Decathlon with its investment plan.

Decathlon, established in 1976, currently has 1,000 stores around the world. Its 2016 revenue was over 10 billion euros.

HCMC to hike management fees at wholesale markets

The Department of Industry and Trade of HCMC is seeking approval from the city government to revise up management fees at three major wholesale markets, namely Binh Dien, Hoc Mon and Thu Duc, from 2017. The average fee would be VND70,000 (about US$3.1) per square meter per month, about three times higher than the current levels.

According to a report of the department, there are currently 265 traders in 345 trading booths in Hoc Mon wholesale market, including 257 vegetable trading booths and 89 pork trading booths.

The management board of the market said most pork traders agreed with the adjustment of the management fee from VND27,500 to VND66,000 per square meter per month. Vegetable and fruit traders also agreed with the increase of the fee from VND22,000 to VND66,000.

Meanwhile, the management board of Thu Duc wholesale market said most traders have agreed with the new fee of VND70,000 per square meter per month (currently VND20,000 per square meter per month). This market has about 949 traders doing business with 1,414 trading booths, including 544 booths of vegetables, 748 booths of fruits, 92 booths of fresh flowers and 30 kiosks serving foods and selling medicines.

Some 68% of traders in Binh Dien wholesale market agreed with the management fees proposed by the management board of the market which range from VND50,000 to VND80,000 per square meter per month. Binh Dien Market has about 1,439 traders with 1,671 stands.

Having collected the opinions of the vendors in these three major wholesale markets, the city’s Department of Industry and Trade suggested the municipal government accept the new management fee in 2017 at an average of VND70,000 per square meter per month.

The department has also requested the management boards of the three wholesale markets to review and adjust the fees for other services such as vehicle parking.

The management boards of major wholesale markets in HCMC earlier complained that low service fees have caused losses for market operators.

Phase one of Vinalines Hau Giang port project completed

Hau Giang Maritime Service Company (Vinalines Hau Giang) last week inaugurated phase one of Hau Giang Vinalines general port project capable of handling ships of 20,000 DWT after more than 10 months of construction.

Speaking at the opening ceremony, Vo Thanh Phong, general director of Vinalines Hau Giang, said the port has a berth of 150 meters, and together with supporting facilities such as warehouses, container yards and other technical infrastructure, phase one allows for maximum throughput of one million tons of cargo a year.

According to Vinalines Hau Giang, phase one of the project is developed at a cost of nearly VND229 billion (about US$10.1 million). The project was designed by the Construction Consultation Joint Stock Company for Maritime Building (CMB), supervised by Thinh Long Corporation and constructed by a consortium comprising An Gia Phat Construction Joint Stock Company and Southern Construction Joint Stock Company.

Vinalines Hau Giang general port project covers an area of 87 hectares and requires total investment capital of nearly VND399 billion, including warehouses, workshops, roads and technical infrastructure.

With the launch of phase one as well as the whole project in the future, Phong expects Vinalines Hau Giang to better facilitate cargo transport in Hau Giang Province, Can Tho City and the Mekong Delta as a whole.

Saigontourist teams up with Korea’s Hanatour

Saigontourist Holding Company, the country’s leading tourism enterprise, last Thursday signed a memorandum of understanding on tourism development cooperation with Hanatour, South Korea’s leading travel agency, at Lottle Seoul Hotel within the framework of a working visit to Korea by a high-level delegation from HCMC from May 15-23.  

The signing ceremony was attended by Nguyen Thanh Phong, chairman of HCMC, Bui Ta Hoang Vu, director of the HCMC Tourism Department, the Vietnamese ambassador to Korea, and senior representatives from tourism enterprises of both Vietnam and Korea.

Under the MoU, both sides agreed on strengthening long-term and mutually beneficial relationship in related fields including travel and accommodation businesses, food and entertainment activities. In addition, the two sides pledged to promote tourism by air and sea between Vietnam and Korea, attract more international tourists to both countries and accelerate the sales and marketing activities of major products and services of Saigontourist.    

Over the past years, Saigontourist and Hanatour have launched some cooperation programs through organizing tours and charter flights taking Vietnamese tourists to Korea and vice versa.

Vo Anh Tai, deputy general director of Saigontourist, said the cooperation agreement will contribute to enhancing the presence of Saigontourist in the Korean market in an effort to lure more Korean tourists to buy products and services of the Vietnamese leading hospitality enterprise, and promote tourism images of Vietnam and HCMC to the Northeast Asian country.

Saigontourist Holding Company, established in August 1975, currently manages over 100 hotels, resorts, restaurants and travel companies and entertainment parks in different locations nationwide. It serves more than two millions of customers each year and works with over 1,000 leading tourism partners around the globe. Saigontourist Travel Service Co. under the umbrella of Saigontourist is the country’s biggest travel firm with fruitful cooperation with the Korean tourism market.

Hanatour is the largest travel agency of South Korea with its global network including 17 domestic subsidiaries, 10 overseas branches and 14 representative offices around the world.

Vinatex forecasts 10% textile export growth

The Vietnam National Textile and Garment Group (Vinatex) has projected this year’s textile and garment exports would grow 10%, or by US$3 billion, against 2016.

According to Vinatex, the industry’s export sales amounted to US$6.75 billion in the first quarter of 2017, up 12.4% over the same period. Shipments to Russia, a new market for the industry, surged 115% in the period while those to Singapore and Cambodia shot up 38% and 36% respectively.

Revenues from other major markets such as the U.S., the EU, Thailand, Indonesia, Laos, Myanmar and South Korea also rose.

Exports of traditional items such as T-shirts and trousers continued positive growth. Some new products with high export growth were swimwear, rainwear and towels.

Vinatex general director Le Tien Truong said Vietnamese textile and garment products are facing growing competition with those from other countries because in addition to quality, price and delivery time, domestic exporters have to meet strict environmental protection requirements.

Therefore, local manufacturers have had to replace old equipment with new one to meet four criteria -- productivity, quality, energy saving and environmental protection.

Vietnam, one of the five largest textile exporters in the world, fetched US$28.3 billion from textile exports in 2016 with a localization rate of over 50%. In 2017, the industry has set an export turnover target of over US$30 billion.

Real estate market reduces fever in HCMC outskirts

Land price has reduced fever in HCMC outskirts after city leaders required police agency to investigate land price fever and tackle brokers for spreading false rumors to rocket the prices and make profit.

According to Sai Gon Giai Phong Newspaper record, land price has reduced by 10-20 percent in parts of outlying 9, 12, Thu Duc, Binh Tan, Nha Be, Binh Chanh, Hoc Mon, Cu Chi and Can Gio districts.

On May 22, the newspaper’s reporters saw that land brokers no longer noisily invited customers to buy land. Banners, leaflets were not delivered as much as before. The reporters spent two hours around an empty land parcel in To Ngoc Van street but did not see any broker.

Returning to Road 659, Phuoc Long B ward, District 9 where has been named the metropolis of real estate brokerage companies and centers, SGGP reporters were surprised with the gloomy and deserted scene there. Many companies closed their doors.

Phu Huu ward’s area near HCMC-Long Thanh-Dau Giay Expressway fell in the same situation. Many residents’ houses and shops removed land brokerage boards of housing land projects.

Owner of a coffee shop in Bung Ong Thoan street, District 9 said that local residents had earned bread by acting as a go-between customers and property companies.

Land prices have mitigated from VND26 million to 24 million a square meter in the area for the last couple of days.

Some plots in the alley of Bung Ong Thoan street has seen the price drop by 20 percent, from VND22 million to VND17-18 million a square meter. The price of plots along large streets have remained unchanged.

After the media published information that rural districts are not qualified to upgrade into urban districts, land price in Binh Chanh has sloped without brake to the level in early 2017.

Mr. Dien from Phong Phu commune said that the district returned to tranquility during the last weekend. Previously, automobiles traveled in great number and customers continuously asked to buy land.

Local no longer saw coaches transporting delegation of customers to the district to buy land, he said. Many land brokers have disappeared while many investors have faced hardships.

Formerly, brokers bought agricultural land at the price of VND2 million a square meter and offered for sale at double price. They pushed housing land price from VND7 million to VND16-22 million a square meter.

Mr. Dien said his family sold two land plots to a customer who has been crying for losing VND2 billion investing in the properties.

Chicken, eggs prices drop

Prices of eggs and chicken meat raised in industrial farms in Ho Chi Minh City fell, said local distributors.

For instance, an egg is sold at VND1,200-VND1,400. With such price, breeders will lose if they have not applied techniques to cut down expenses. 

Meantime, industrial chicken is sold at VND25,000 a kilogram at farms which can bring profits to farmers in the South yet their counterparts in the North suffer loss because industrial chicken is sold at VND 19,000 a kilogram.

Prices of chicken meat dropped because pork prices are down drastically. Moreover, the northern provinces are facing that much imported chicken meat from Korea is cheaper than domestic meat.

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