Why to enter Vietnamese fruit processing market now

The Vietnamese fruit industry has been steadily growing in recent years, however, there remains much place for development by applying new technology in production to enhance added value for processed products, grow the share of sustainable profit, and meet domestic and international demand.

According to data from the Ministry of Agriculture and Rural Development (MARD) released at the seminar on Vietnam's fruit processing market and technology on November 21, 2017 in Hanoi, with growth across various segments, Vietnamese fruit production and export value has been continuously growing in recent years: from several hundred million dollars per year to over $1.07 billion in 2013 and reaching $2.458 billion in 2016, the first time exceeding rice exports ($2 billion), and for the first time accounting for more than 80 per cent of total export value.

In the first ten months of 2017, the export value of fruits reached $2.48 billion, an increase of 47.3 per cent over the same period in 2016. Major fruit export products include dragon fruit (about $900 million in 2016), banana, rambutan, longan, litchi, mango, mangosteen, and durian.

Major fruit and vegetable import markets continued to grow in value: from 13 markets importing over $1 million in 2004 to 10 markets over $20 million in 2016. Aside from China, which is the largest market (accounting for 70.8 per cent of total fruit exports), growing volumes have been exported to high-demand markets, such as the US, Korea, Japan, the Netherlands, Malaysia, Taiwan, Thailand, Singapore, and Australia.

However, with the global import value of vegetables and fruits being in excess of $200 billion per year since 2011, Vietnam’s export value is less than 1 per cent of the world market.

In additional, the main exports of Vietnam are fresh fruit, which has lower value and many technical barriers to trade, such as phytosanitary requirements, quick expiration dates, and short fruit life because of limited technology.

“Fruit production and processing in Vietnam is also facing difficulties and challenges due to the small scale of producers and the decentralised production taking place all over the country with little to no linkeages. The quality and productivity of fruit is low, the application of technical equipment is not synchronised, lost harvest is large, the processing technology is not updated, and a far smaller volume of processed food products are exported than fresh fruits. The high cost of transportation (by air) and no brand in the market lead to low added value and low competitiveness of Vietnamese fruit products,” asserted Nguyen Nhu Cuong, deputy director general of the Department of Crop Production at MARD, at the seminar on Vietnam's fruit processing market and technology on November 21, 2017 in Hanoi.

It is necessary to continue promoting the application of science and technology to fruit production in order to increase productivity, yield, and improve quality, which would ensure food safety and reduce postharvest losses. Additionally the development of preservation and deep-processing technology for fruit products would increase production value as well as expand markets, raising export volume and value on traditional and new markets alike.

There are two pieces of high-technology for fruit processing to help enterprises in Vietnam to develop fruit processing lines and access higher added-value market segments. Bertuzzi’s technology helps to increase product quality and output efficiency through the use of specialised machinery and equipment that are suitable for any type of fruit. Hiperbaric applied high pressure processing (HPP) helps to keep the whole nutritive value as well as the taste of pure fruit juice and increase the expiry date of products.

“Vietnam grows the most diversified types of fruit that I know, especially tropical fruits, so we provide you the solutions to optimise the added value for processed fruits products, increase productivity, and expand the export markets of processed food products,” said Hans-Juergen Wichmann, general director of the Business Unit Machinery at Rieckermann Vietnam.

Rieckermann was established in 1892, is a reliable partner for industrial production and processes, as a full-service solution provider along with the whole value chain of industrial production and processes. It offers complete engineering design, from concept to the last detail, supplies single machines, process lines, integrated systems and technical services.

“According to the 2020 target, the total area of orchards in the country will be 910,000 hectares, with a total output of over 9.5 million tonnes of fruit. Through this, the fruit and vegetable export turnover will increase by an average of 20 per cent per year, striving to achieve the export value of over $4.5 billion in 2020, of which fruit will account for more than 80 per cent,” noted Nguyen Quang Huy from the Department of Crop Production at MARD. 

SCIC to divest from powerful companies next month

Next month, State Capital Investment Corporation (SCIC) will divest the state’s stake in a number of large-scale companies, including FPT, Bao Minh Corporation, and Domesco JSC.

The total state capital value in these firms is VND1.645 trillion ($74.77 million). As planned, detailed information about the divestment will be announced in December.

According to Le Long, manager of SCIC's Strategy and Planning Department, SCIC has so far divested from 975 companies with proceeds of VND27.47 trillion ($1.24 billion), equivalent to three or four times the book value.

During 2017-2020, SCIC plans to divest from 132 companies with expected proceeds of over VND13.5 trillion ($613.6 million). They include the two giants: Vinamilk with 39 per cent and Vietnam Construction Import-Export JSC with 58 per cent.

For 2017, SCIC plans to divest from 115 companies. It has divested over 30 firms and will divest the rest by the end of 2017.

DHL eCommerce launches ServicePoints

DHL eCommerce, a division of the world’s leading logistics company, the Deutsche Post DHL Group, has launched a nationwide network of ServicePoints, enhancing its already successful and rapidly growing domestic delivery network, which was launched in July. The new service offers considerably more choice and convenience for e-tailers and consumers.  

The ServicePoint network allows Vietnam’s e-tailers to easily process domestic parcels at convenient and easy to reach locations and deliver to their online customers the very next day in Ho Chi Minh City, Hanoi, and Tier 1 cities, and between two to seven days in the rest of Vietnam. While the majority of shoppers still receive door-to-door deliveries, they can now choose to pick up their orders from the very same and easily reached retail locations.

“Vietnam’s e-commerce sector is expected to grow seven times its current size and the number of parcels each day is expected to grow 26 per cent by 2020,” said Mr. Thomas Harris, Managing Director of DHL eCommerce. “Since we launched in July, we have seen fantastic growth, which tells us that our customers love our service, and we will continue to launch new services and solutions that exceed our customers’ expectations and ensure we continue to ‘deliver the smile in the last mile’.”

DHL eCommerce has already launched more than 100 ServicePoints and will continue to rapidly expand to more than 1,000 in the coming months.

E-tailers can register with DHL eCommerce and simply deposit shipments at the nearest ServicePoint and have their shipments processed in less than a minute without any paperwork. ServicePoint operators manage the processing and handover of all parcels with a single mobile app, while their shoppers will receive shipment confirmation via SMS and email. Shipment track-and-trace, cash on delivery, and shipment insurance services are also available.

“Vietnam has more than 600,000 SMEs, comprising 97.5 per cent of the country’s total number of companies and contributing more than 40 per cent of GDP,” Mr. Thomas added. “These enterprises need a convenient and effective solution to quickly deliver their products to their customers. Beyond high quality and reliable delivery, we want to offer greater convenience and choice for sellers to help them grow their e-commerce business.”

Expanding the ServicePoint network is a strategic move by DHL eCommerce after its major investment in launching the Domestic Delivery network in Vietnam this year. The investment also includes a fleet of vans, bikes, and electric motorcycles, in line with the Deutsche Post DHL Group’s recent announcement to reduce its logistics-related emissions to zero by 2050.

Conditions in place to develop innovative startup ecosystem

Vietnam is considered to have significant potential for the development of an innovative startup ecosystem, a forum on startup ecosystems held recently by the Vietnam Chamber of Commerce and Industry heard.

The components for eco-innovation in the country are in place and are actively supporting innovative projects and enterprises in the country.

There are now about 21 institutions, seven business promotion organizations, and 22 domestic and foreign investment funds that are key components of a startup ecosystem.

Mr. Tran Van Tung, Deputy Minister of Science and Technology, told the forum that in Vietnam’s startup eco-system there are sufficient components for development, with good quality startups, venture capital funds, and individuals and organizations that support startups or provide certain services.

For many reasons, however, the ecosystem has not been able to bring its potential into full play, mainly due to the fact that startup supporters are active but lack cohesion.

Over the last two years, many specific policies have supported young people wishing to do business, small and medium-sized enterprises (SMEs), startups, innovative businesses, and businesses with growth potential. Decision No. 844 from the Prime Minister approved the scheme on “Supporting the National Innovation System to 2025”.

Ms. Thach Le Anh, Project Manager at Silicon Valley Vietnam, reviewed some of the traditional channels that companies can take advantage of in calling for capital: family and relatives, banks, venture capital funds, the stock exchange, State funds, and non-government organizations.

“Despite these capital mobilization channels, startups are often only able to mobilize capital from angel investors, venture capital funds, and initial investment funds,” she told the gathering. “The amount of fund management is very small and often not enough to scale up the fund management team.”

Mr. Dam Quang Thang, General Director of the Agricare Vietnam Co. and Chairman of the Hanoi Agricultural Chemicals Association - Entrepreneurship Advisor, said the best solution now is to exploit the huge resources of SMEs.

According to Mr. Thang, SMEs have quite a lot of experience from their successes and failures - the experience that starting a business is easy. In addition, they can also advise and help with product development, have good financial resources, and stable businesses.

“At the same time, SMEs are applying technology that is a good example for startups in regards to innovation,” he said.

Digital technology changing accountancy

Digital technology is transforming businesses and economies across the globe and increasingly affecting the accountancy profession, technical sessions organized by the Institute of Chartered Accountants in England and Wales (ICAEW) in Hanoi and Ho Chi Minh City heard.

Mr. David Lyford-Smith, ICAEW’s IT Faculty Technical Manager, emphasized that it is imperative for members of the profession to equip themselves with the necessary skills to deliver higher-value services or risk becoming marginalized by automation and artificial intelligence.

During the technical sessions, he shared the findings of recent research by ICAEW on how current digital technology trends are changing the accounting profession in terms of emerging business opportunities and challenges and also outlined its approach to helping industry professionals stay on top of the game.

Today, digital technology powered by the exponential growth of computing power opens up a whole new world of opportunities. This allows for unprecedented innovations in financial services, resulting in a higher level of operational efficiency and access to entirely new markets. A good example of the technology that is changing today’s global business landscape is “blockchain”, a system of universal entry book-keeping where a transaction or a single input of data can be easily viewed by or shared with many parties on the same network in a systematic and secure manner.

“If a marketplace or system is running on a blockchain, the nature of security assurance that is needed will change,” said Mr. Lyford-Smith. “You don’t need assurance that your asset exists or that your records agree with others’, because that’s certain in a blockchain environment. So instead the focus of assurance turns to the ties between the blockchain record and the physical world, and more generally to the economic reality of the transaction that is seen in the blockchain. For example, a blockchain might give you certainty over the timing and amount of a purchase of some goods, but it can’t assure you of the condition of those goods.”

Another example is the change taking place in the relationship between individuals and taxpayers and national tax authorities and the role of professional advisers, including accountants. A recent study by the ICAEW on the digitization of tax systems in seven countries shows that with greater automation and analytical capacity and based on connected database infrastructure, tax authorities can provide basic tax information based on self-contained data, and then send this to individuals and taxpayers for confirmation.

Electronic tax in Vietnam began to be deployed from 2009 and many agencies and businesses had turned to electronic declarations by 2015. “Electronic tax declarations have been implemented in Vietnam’s 63 cities and provinces,” said Mr. Phan Vu Hoang, Deputy General Director of Tax Consultancy at Deloitte Vietnam. “This new form of tax return brings clarity and reduces paperwork, helping taxpayers save a lot of time. The implementation of electronic tax in Vietnam has seen solid development.”

However, along with new opportunities comes the growing fear that the traditional approach to financial reporting and routine accounting tasks are steadily being taken away by automation and artificial intelligence, and members of the profession are not adapting to the new technological trends quickly enough to take advantage of new platforms and risk becoming marginalized.

According to Ms. Trang Dang, Head of ICAEW Vietnam, technology capabilities need to be applied into the specific business context in a way that provides value. As the pace of change in technology is typically faster than change in human behavior, even where capabilities exist, altering the way accountants perform their daily tasks can be a long process.

“To provide greater leadership in the exploitation of data, accountants may well need stronger technical skills around data and a greater understanding of statistics to challenge the method, assumptions, and output of predictive models,” Ms. Trang added.

Can Tho to host Int’l Agriculture Fair 2017

The festival aims to support agricultural development in the Mekong Delta region through the research and application of science and technology advances in production and building trademarks to increase competitiveness.

Major activities of the event include introducing farm produces, meetings of scientists and enterprises to deal with current issues in researching and applying science and technology in agricultural production to increase productivity and quality.

An exhibition on agricultural products  will be held with the participation of about 200 enterprises, along with a conference on science-technology application in agricultural development.

Domestic businesses and those from the Republic of Korea, Japan, India, the UK, China, Taiwan, Germany, the U.S. and others will showcase their products on 330 stands with a focus on machines, equipment, agricultural mechanics and materials, plant varieties, processed agricultural products and models for safe and clean agriculture.

In addition, diverse activities will be held during the fair to facilitate farming in the Mekong Delta region. They include a production agriculture seminar, a consultation workshop on agricultural equipment and products, a training workshop on farming techniques, art exchanges, trade promotion and introduction of agriculture start-up projects in Can Tho.

The event is part of the national trade promotion program 2017.  

Shipping lines required to use digital signatures for customs declarations

Shipping lines, cargo agents and freight forwarders will have to use digital signatures from January 1, 2018 when they make customs declarations through the single national portal.

According to Document No.7392 issued by the General Department of Vietnam Customs, shipping lines, cargo agents and freight forwarders are required to register and authenticate their digital signatures no later than December 15, 2017.

According to the customs, the use of digital signatures on customs declaration forms will simplify customs procedures and thus help businesses save time and money.

Palm-leaf design sought for Long Thanh airport

Airports Corporation of Vietnam (ACV) has proposed the Ministry of Transport select the palm-leaf design for the Long Thanh International Airport project, citing the consulting firm’s experience and the low suggested cost.

When a decision is made, ACV will proceed to the design stage for the passenger terminal, the local news site VnExpress reports.

According to ACV, the three proposed designs come with the shapes of lotus, bamboo and palm leaf. They all appear to be feasible and can be used for the feasibility study for the terminal.

The cost of the feasibility study as previously estimated by ACV and examined by the Institute of Construction Economics is US$4.52 million.

In the preliminary round, the lotus-shaped design prepared by Heerim Architects & Planners was favored by a board of professionals, but the cost was suggested at around US$6.5 million, 1.44 times higher than estimated.

Meanwhile, the bamboo-shaped design of the Japan Airport Consultants-Adp Ingenierie-Shigeru Ban Architects consortium and the palm-leaf design of the CPG Consultant-Azusa Sekkei-Pae consortium come with lower consulting costs, US$3.88 million and US$3.64 million respectively, equivalent to 86% and 80% of ACV’s estimates.

Heerim then proposed US$3.61 million.

ACV has told the consulting firms to reconsider their costs. The adjusted costs of the three firms are now US$3.4 million, US$3.61 million and US$2.99 million respectively.

The Long Thanh International Airport project is expected to get off the ground in 2019. Of the three investment phases, the first phase will cost around US$8 billion.

Hanoi railway project cost falls after review

The investment cost of the Tran Hung Dao-Thuong Dinh section of the second urban railway in Hanoi has dropped by VND5.8 trillion after a review by the Hanoi Metropolitan Railway Management Board.

Rail Line No. 2 has a total length of 5.9 kilometers which will go underground. The cost for each kilometer of track is estimated at nearly VND6 trillion, or US$259 million per kilometer based on the current exchange rate.

As reported by Tuoi Tre newspaper, after relevant ministries and agencies commented on its high cost, the management board recalculated it and eliminated unnecessary expenses, thus sending the cost down from VND34.74 trillion to VND28.92 trillion, or a reduction of VND1 trillion per kilometer.

The Tran Hung Dao-Thuong Dinh section of the rail line is on the list of the major investment projects that will receive funding from the State budget in the 2016-2020. The section will be expanded to Nam Thang Long in the next phase.

The expenses that were cut include costs for construction, installation, site clearance and compensation, project management, interest payment and backup funds.

Though VND5.8 trillion has been saved, according to the Hanoi government, the investment cost can be further lowered.

Hanoi can get around VND18.65 trillion in official development assistance (ODA) capital and provide some VND5.6 trillion in reciprocal capital for the project.

HoREA voices concern over property tax in HCM City

A pilot scheme to tax land and landed properties in HCMC would help increase budget revenue but leave adverse effects, such as land and apartment price spikes, according to the HCMC Real Estate Association (HoREA).

Many countries apply assets tax, mostly to land and landed properties, to create a source of stable revenue for governments, said HoREA. For example, the U.S. state of California levies a 1.23% annual tax on asset value.

However, according to HoREA, Vietnam’s real estate market is just recovering. Home prices are still high, around 25 times higher than the average income of the Vietnamese.

The middle class in HCMC is expanding rapidly and gross domestic product (GDP) per capita is over US$5,000, which is forecast to exceed US$10,000 by 2020. However, living costs in HCMC are higher than in other provinces.

HoREA proposed the National Assembly delay the pilot scheme in HCMC until after 2020. If approved, the scheme should apply nationwide.

High prices of land and apartments are partly caused by tax and land use fee, said HoREA chairman Le Hoang Chau, adding the land use fee is not a tax but it is a huge source of State revenue.

The land use fee accounts for less than 10% of an apartment’s value, 30% of a townhouse’s and 50% of a villa’s. If property tax is applied, the land use fee should be cut, Chau proposed.

He said the property tax in HCMC would make financial obligations of property owners heavier, driving away investment.

Hokkaido-HCMC direct flights expected next year

Japan’s Hokkaido Prefecture is planning to launch direct air service to HCMC next year to promote tourism and trade cooperation between the two places.

After vice governor of Hokkaido Yasuhiro Tsuji talked about the prefecture’s effort to set up a direct air link with HCMC at his meeting with the city government last Friday, HCMC chairman Nguyen Thanh Phong expressed his hopes that the air service could be launched next year.

Joining Yasuhiro Tsuji were Japanese businesses that want stronger trade and tourism cooperation between Hokkaido and HCMC.

According to the Hokkaido official, around 5,000 Vietnamese are working and living in this northernmost prefecture of Japan. Hokkaido is strong in agriculture and fisheries, and needs human resources in the fields of forestry-seafood processing and agricultural machinery.

Many enterprises of Hokkaido have invested in HCMC, especially in the catering industry, Tsuji said.

Of 93 countries and territories making investments in HCMC, Japan ranks sixth. HCMC gives priority to investment in high-tech agriculture, supporting industries, infrastructure construction, personnel quality improvement and tourism.

Phong said there is growth potential in tourism cooperation between the two localities as well as the two countries.

HCMC welcomed 5.1 million foreign tourists in the January-October period, 292,000 of them from Japan. The number of Japanese arrivals to HCMC last year was 500,000.

SCIC upbeat about forthcoming share sales

The State Capital Investment Corporation (SCIC) has expressed optimism that it could raise around VND8 trillion by selling State-held shares at five enterprises next month.

Nguyen Chi Thanh, deputy general director of SCIC, said SCIC will offer shares owned by the State at five companies as planned early this year.

Given the current market prices of the shares to be offered, their combined value would be VND10 trillion, Thanh said on the sidelines of a roadshow last Friday on investment opportunities at four firms – Tien Phong Plastic Company, Binh Minh Plastic Company, Domesco Medical Import Export Corporation and FPT.

A day earlier SCIC, the Government’s investment arm, held a roadshow to introduce a plan to sell its shares in Vietnam Construction and Import-Export Corporation in Hanoi.

SCIC plans to offload its entire stakes at the five companies, with State ownership at some firms amounting to 30%. Whether Tien Phong Plastic Company will revise up the foreign ownership limit to 100% or not remains unknown as its general meeting will not take place before November 30, so investors may not snap up the volume to be put up for sale, Thanh said.

SCIC’s divestment plan is supported by a couple of factors such as the VN-Index rise to a 10-year high, and Vietnam’s successful hosting of the APEC Economic Leaders’ Week 2017 and high economic growth.

Furthermore, these five enterprises are leaders in their respective sectors, so their shares are attractive, Thanh noted.

SCIC will launch the sale of its shares at Binh Minh Plastic Company on December 8, FPT on December 11, Domesco on December 12 and Tien Phong Plastic on December 13. It will announce their starting prices from late this month.

Unlike the sale of State-owned shares at Vinamilk, investors must deposit and pay in Vietnam dong only if they want to join the share auctions.

SCIC will offer over 24.1 million shares at Binh Minh Plastic, or a 29.5% stake, 31.6 million shares at FPT (5.96%) and 12 million shares at Domesco (34.71%). It will announce sale volume at Tien Phong Plastic on November 30.

Work resumes on long-stalled Happyland project

Construction restarted Saturday on the US$2-billion Happyland entertainment complex in the Mekong Delta province of Long An, which had been delayed for a long time due to financial difficulties.

Developer Phu An Infrastructure Investment and Development JSC, a subsidiary of Khang Thong Group, and its strategic partner Vina Oscar Hotel Limited from Hong Kong will build some key components of the project like a five-star hotel with more than 1,000 rooms, a resort, a leisure park and a commercial center.

Speaking at the groundbreaking ceremony for these components, Austin Currie of Vina Oscar Hotel Limited said his firm had reviewed the project before making an investment decision. According to Khang Thong Group, Phu An has transferred an 88% stake in the project to Vina Oscar Hotel Limited with a total value of US$668 million.

The investor has completed necessary paperwork, fulfilled tax obligations, paid site clearance compensation, paid a 50-year land rent and leveled about 318 hectares of land.

After six years of construction, some facilities have been complete, including a Vietnamese cultural area, a playground for children, a race track, a floating market and a riverside resort.

Addressing the ceremony, Phan Thi Phuong Thao, chairwoman of Khang Thong Group, said the participation of the strategic partner, who has strong finances and management skills, will help turn around the project.

Covering 338 hectares along Vam Co Dong River in Ben Luc District, Long An Province, the Happyland entertainment complex is expected to be the Vietnamese version of Disneyland. It is planned to become one of the biggest entertainment and commercial centers in Southeast Asia with theme park, convention center, hotel, restaurants and other facilities.

Retailers trends to cooperate with small, medium enterprises

Domestic and foreign retailers have trended to cooperate with small and medium enterprises (SMEs) to diversify their products and head toward export. 

In mid-June this year, Lotte Mart exported its first consignment to Myanmar with over 100 products under the supermarket’s Choice L brand, produced by Vietnamese SMEs. According to plan, Lotte Mart will continue exporting to China and Indonesia.

Mr. Yoon Byung Soo, director of Lotte Mart Vietnam’s product strategy division, said that last year Lotte Mart Group imported Vietnamese goods worth VND1.3 trillion to provide supermarkets in some Southeast Asian nations. This year, the value of is expected to approximate VND2 trillion ($57.2 milion).

The group will speed up purchase of banana, mango, dragon fruits and products for daily use with outstanding quality and reasonable prices.

This year, Big C Vietnam has established a division in charge of SMEs assistance and development through program ‘Siding with Vietnamese brand names’ to diversify products on shelves of Central Group Vietnam.

Director general of the group and Big C Vietnam Phillippe Broianigo said that after a period of implementation, the program has been attended by many SMEs and gained positive changes. At present, products of many SMEs have been shelved at Big C supermarkets.

Right after buying Metro Cash&Carry, Thai Berli Jucker Group has applied the priority policy to choose producers who have not had brand names in the market, cooperate with them to develop private brands for the supermarket. Products will be in the two sides’ names.

The supermarket will supervise production phase and provide advices to improve production process and packaging design.

Domestic supermarket system Saigon Co.op has been seeking qualified producers to work with them to develop products under Co.op Mart brands.

For the last recent years, Saigon Co.op has cooperated with Singapore’s leading retailer NTUC FairPrice to choose products to develop Co.op Mart brands for export to Singapore.

At a forum themed ‘the story of brand names’ hosted by Big C recently, Mr. Nguyen Xuan Ton, owner of Long Trieu Coffee Company in Lam Dong province, said that building brand name for SMEs like the company was very difficult. For a long time, customers did not know the company’s products. So he had decided to join hands with Big C to develop Long Trieu brand name.

In fact, not all SMEs attending supply chains can keep their brand names like Long Trieu. Most have produced goods for distributors’ brands.

There are some controversial opinions saying that producers will lose themselves if keeping making goods for distributors. In response, a business making goods for a supermarket said that it was an initial success for it to be chosen by the supermarket to attend in the supply chain. That helped the company learn about operation way of a retailer and the market. They were usually short of these knowledge for just focusing on production.

According to some businesess, producers must thoroughly know about legal conditions when negotiating to cooperate with distributors. For instance, product quality certificates and food hygiene and safety licenses of industrial foodstuffs belong to the producers not retailers.

Ms. Nguyen Phi Van, international franchise consultant, said that amid expanding global integration, the survival of businesses especially SMEs much depend on their visions. They need to broaden visions to international markets to survive, develop sustainably and strongly in the domestic market.

Counterfeits threaten businesses: workshop

The fight against counterfeits and intellectual property infringements has been more difficult and fiercer with increasingly sophisticated tricks, causing risks for both businesses and consumers and considerable damage for the economy. 

That was stated by businesses at a workshop hosted by National Office of Intellectual Property of Vietnam in HCMC yesterday.

One of the risks was the possibility that businesses might be sued back by fake makers, they said. Intellectual property infringement has developed complexly. However, handling has been costly and time consuming.

Mr. Nguyen Ngoc Ty, chief executive of Son Hat Fashion Company, said that counterfeits caused heavy damage for the company while violators had accepted to pay fines which were not deterrent enough.

Similarly, leaders of Spark Plug NGK Vietnam Company, specializing in making spark-plugs told that their products were faked and sold publicly. Therefore they have proposed authorized agencies to take the initiative in assisting the company, tightly supervise spots selling counterfeits to protect genuine businesses and consumers.

Mr. Tran Giang Khue, deputy representative of the National Office of Intellectual Property of Vietnam in HCMC, told that there are businesses operating for a long time with known brand names in the market. Still they have forgot to register intellectual property rights and been sued back by fake producers when proceeding against them. The issue has not only occurred in Vietnam but also abroad.

Many Vietnamese brand names such as Vintaba and Buon Me Thuot coffee have been registered in China, Trung Nguyen Coffee in the US and Duy Loi foldable hammock design in Japan. That is a lesson which businesses should pay attention to, said Mr. Khue.

Businesses have been more and more interested in intellectual property rights with the number of registrations having highly increased in recent years. In 2016, the National Office of Intellectual Property of Vietnam received about 60,000 registrations, up 15 percent over 2015 and triple the number in 2013.

Vietcombank yields over $15 million from divestment

Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) yesterday auctioned 19.8 million shares from Vietnam Cement Finance Company (CFC) and Saigon Bank for Industry and Trade (SaigonBank), yielding over VND342 billion (US$15.06 million). 

At the first auction session, 6.6 million shares of CFC were offered for sale at the starting price of VND11,549 a share. Nine individual investors registered to attend the session and purchased all at the price of VND11,554 a share. The value of the share sale tops VND76 billion ($3.35 million).

The auction session of Saigonbank shares was hosted by Hanoi Stock Exchange (HNX) on the same day. Over 13.2 million shares were offered for sales at the starting price of VND12,550 a share, equivalent to 4.3 percent of Vietcombank’s capital at Saigonbank.

Investors registered to buy up to VND53.8 million shares, quadruple the offered for sale volume. Closing the session, HNX announced the highest ordered volume was 13.2 million and the lowest order was 100 shares with the highest price being VND20,100 and the lowest at VND12,550.

All of 13.2 million shares were sold at the highest price, bringing Vietcombank VND266 billion ($11.71 million).

State capital investor must divest from 85 SOEs

Leaders of State Capital Investment Corporation (SCIC) has said that the company had withdrawn state capital from 30 of 115 state own enterprises according this year plan, so it had to divest from 85 companies in the rest two months this year.

So far, the corporation has conducted state capital withdrawal from 975 enterprises with the total revenue of VND27.5 trillion (US$1.21 billion), nearly 3.4 times cost price.

From now until 2020, the company will continue divestment from 140 enterprises, comprising large ones such as Vinamilk, PetrolVietnam Oil Corporation, Vietnam Military Bank, Bao Viet Group, Bao Minh, Vinaconex, Tien Phong Plastics Company, Hau Giang Pharmaceutical Joint Stock Company, Traphaco and Domesco.

PM approves agricultural restructuring plan in 2017-2020

Prime Minister Nguyen Xuan Phuc has approved a plan to restructure the agriculture sector in 2017-2020, which aims to make the best use of advantages in each region and locality.

The plan targets gross domestic product (GDP) growth of 3 percent per year by 2020. Average labour productivity is expected to expand by 3.5 percent per annum and the proportion of labour in agriculture will fall to below 40 percent. About 22 percent of agricultural workers will receive training. 

Fifty percent of communes are hoped to become new rural areas while 15,000 cooperatives and unions of agricultural cooperatives will operate. The plan also targets most residents in rural areas having access to hygienic water.

In cultivation, the country will shift to grow crops adaptive to climate change and suitable with each region, develop concentrated and large-scale production areas, adopt chain production for national key products, and encourage the development of clean and organic agriculture.

The plan also calls for more applications of science and technology in the sector to create high-quality varieties, adopting intensive farming, reducing the use of pesticides, replacing ineffective rice cultivation land to grow other crops, and promoting aquatic breeding.

The country will also develop household livestock, organic and ecological animal husbandry, and value production chains in addition to building brands, reorganising the slaughtering system to ensure food safety and hygiene and environmental protection, inspecting and controlling diseases effectively, and tightening the examination of the use of veterinary drugs and additives in the field. The livestock industry aims for annual production growth of 4.5-5 percent.

Meanwhile, the seafood sector will promote offshore fishing and invest in modernising processing equipment and storage on board to reduce losses, with growth of 4.5-5 percent per year expected.

Women-led SMEs still struggle with financing

Vietnam’s women entrepreneurs are one of the significant forces within the small and medium-sized enterprise (SME) sector but banks fail to meet their capital needs, according to a study by the International Finance Corporation (IFC).

A workshop held by the IFC entitled “Women-Owned Enterprises in Vietnam: Perceptions and Potential” held on November 16 revealed that investing in women and promoting gender equality helps businesses reach new markets and also enables them to attract and retain skilled employees.

In Vietnam, for instance, the financing gap is estimated at $1.19 billion for women-owned SMEs. Running nearly 45,000 SMEs across sectors, women entrepreneurs bring in similar average annual revenue as men and are growing at a pace of over 20 per cent.

Australian Ambassador to Vietnam, H.E. Craig Chittick, told the workshop that Vietnamese women are great at doing business. “They are more aware of risk than their male counterparts, which allows them to better run their businesses,” he said.

While the common perception is that there are no differences between the challenges facing female and male heads of SMEs, the study reveals biases - conscious or unconscious - that directly impact upon women’s abilities to access formal financing and other desired services necessary to develop and grow their enterprise.

Only 37 per cent of women-owned SMEs have accessed bank loans in the last two years, compared to 47 per cent of those owned by men. Though the country’s investment climate is positive for women, most banks feel no need for a different approach to women entrepreneurs or perceive the segment as less profitable, of higher risk, and lacking in financial management skills.

The IFC report identifies women entrepreneurs as one of the significant forces within the Vietnam’s SME sector and reframes the perceived challenges of serving women entrepreneurs in Vietnam as an opportunity for banks and other service providers, enabling them to capture a growing market of savvy businesswomen and unlock the under-tapped potential of this segment in Vietnam.

Mr. Rubin Japhta, Senior Operations Officer at the IFC’s Banking on Women/SME Banking, said that one of the key difficulties that women-owned businesses find is limited capital access at banks. “They feel they are not taken seriously as a customer segment,” he said. “Banks need to change their services and see women-owned SMEs as a distinct market segment.”

Mr. Kyle Kelhofer, IFC Country Manager, Vietnam, Cambodia, and Laos, said it is an opportune time for banks to recognize women-owned SMEs as a separate and strategic customer segment, with uniquely tailored products and services.

In its commitment to advancing gender equality, the IFC has invested more than $1 billion in private-sector banks via its Banking on Women program and has provided advisory services to banks that want to better serve this market segment. The IFC also works with client firms to identify opportunities and strategies to improve the workplace so that both women and men can perform their jobs well, which makes good sense for business performance and employee morale.

Mr. Dao Gia Hung, Deputy Head of SME Banking at the Vietnam Prosperity JSC Bank (VPB), said the bank initiated a pilot women strategy a year ago and the percentage of businesswomen in its SME portfolio increased from 15 per cent to 25 per cent this year.

Visa study highlights economic benefits of cashless cities

Visa has recently announced the results of an independent study conducted by Roubini ThoughtLab, commissioned by Visa, to examine the economic impact of increasing the use of digital payments in major cities around the world.

The study estimates that relying more on electronic payments, such as cards and mobile payments, could yield a net benefit of up to $470 billion per year across the 100 cities studied; roughly equivalent to 3 per cent of the average GDP for these cities.

Hanoi, one of the subjects of the study, saw some particularly strong potential gains from going cashless. The study found that the city’s economy could see an extra $600 million per year as a result of moving away from physical money and conducting the majority of transactions electronically, while employment could jump an extra 3.5 per cent. Hanoi’s GDP, meanwhile, is predicted to grow by 36.4 basis points.

“Cashless Cities: Realizing the Benefits of Digital Payments” is a unique study that quantifies the potential net benefits experienced by cities that move to an “achievable level of cashlessness”, defined as the entire population of a city moving to digital payment usage equal to the top 10 per cent of users in that city today.

The study does not look at eliminating cash. Rather, it seeks to quantify the potential benefits and costs of significantly increasing the use of digital payments. By reducing reliance on cash, the study estimates the immediate and long-term benefits for three main groups: consumers, businesses, and governments.

“This study demonstrates the substantial upside for consumers, businesses, and governments as cities move toward greater adoption of digital payments,” said Ms. Ellen Richey, Visa’s Vice Chairman and Chief Risk Officer. “Societies that substitute digital payments for cash see benefits from greater economic growth, less crime, more jobs, higher wages, and increased worker productivity.”

“While Vietnam is still a heavily cash-oriented society, we’re seeing very positive moves across the board from consumers, merchants, and the government, with attitudes towards electronic payments now better than ever before,” said Mr. Sean Preston, Visa Country Manager for Vietnam, Cambodia, and Laos.

“Visa fully supports the State Bank of Vietnam’s roadmap for non-cash payments by 2020 and is committed to driving the adoption of electronic payments and expanding acceptance to ensure that the transition to a cashless economy is both efficient and smooth.”

As cities increase the use of digital payments, the positive impacts can extend beyond financial benefits to consumers, businesses, and government. The shift to digital payments may also have a catalytic effect on the city’s overall economic performance, including GDP, employment, wages, and productivity growth.

“The use of digital technologies - from smartphones and wearables to artificial intelligence and driverless cars - is rapidly transforming how city dwellers shop, travel, and live,” said Mr. Lou Celi, Head of Roubini ThoughtLab. “Without a firm foundation in electronic payments, cities will not be able to fully capture their digital future, according to our analysis.”

Visa and Roubini Thoughtlab created an online data visualization tool as a companion to the study. Using the data visualization tool, individuals can increase or decrease the level of digital usage in each of the 100 cities included in the study to better explore the benefits of a world less dependent on cash.

Results of ‘Well-known Trademarks’ project announced

A ceremony was held in Hanoi on November 17 to announce the results of the implementation of the ‘Well-known Trademarks’ Project by Ministry of Science and Technology (MoST), in collaboration with the International Trademark Association (INTA).

This was the last important event as part of the project which was carried out under the Memorandum of Understanding (MoU) on ‘building and developing coordination activities in the field of intellectual property’ signed by the MoST and INTA on March 24, 2015.

The project aimed to research, evaluate, collect and aggregate information and ideas from the relevant State agencies, trademark owners, enterprises and ownership representatives on the difficulties in the implementation of the current Vietnamese law provisions related to the recognition, protection and enforcement of the rights of well-known trademarks.

The project also contributes to formulating a theoretical and practical basis for the proposals of amendments and supplements to the current Vietnamese law provisions on well-known trademarks.

Deputy Chief Inspector of the MoST Nguyen Nhu Quynh said that the result of the project ‘Protecting Famous and Well-Known Trademarks in Vietnam—The Actual Situation and Toward Solutions’ is an intensive research work on well-known trademarks, which was implemented by independent researchers with contributions and consultations from domestic and international experts.

Speaking at the ceremony, Deputy Minister of Science and Technology Tran Van Tung emphasised that the recognition, protection and wide use of well-known trademarks is an urgent requirement for enterprises.

For Vietnamese businesses, this demand is associated with the affirmation of the prestige and quality of Vietnamese brands; meanwhile for foreign enterprises, well-known trademarks are associated with the guarantee of a healthy business environment, he added.

The Deputy Minister also said that the trademarks’ owners need to have specific strategies to develop their trademarks and the relevant agencies should set out drastic and forceful measures to support the owners in protecting their rights to well-known trademarks.

On the occasion, the MoST and INTA signed another MoU on the implementation of coordination activities on ‘protecting intellectual property rights in e-commerce’.

US$54 million solar power project planned for Binh Phuoc

The Binh Phuoc provincial People’s Committee has approved an investment plan for a 49-megawatt solar power project worth US$54 million, with funding from TaTa Power, an Indian power company, as announced on November 17. 

The project will cover an area of 55 hectares in Loc Ninh district’s Loc Tan commune.

Shenbagam Manthiram, TaTa Power’s chief representative in Vietnam, stated that Binh Phuoc has a high number of sunshine hours, which he said is the motivation for his company to choose the province for its project.

The proposed project venue, Loc Tan commune, is relatively convenient in terms of transport infrastructure links and national grid connection, he said, asking the province to create favourable conditions so that the project could be completed by June 2019 aiming to take advantage of the Vietnamese Government’s incentives.

Chairman of the Binh Phuoc provincial People’s Committee, Nguyen Van Tram, welcomed TaTa Power’s investment in solar power development, which is the province’s priority field for investment attraction.

Binh Phuoc will provide the most favourable conditions, concerning the legal aspects, for the implementation of the project, he affirmed.

Tram assigned the Provincial Department of Industry and Trade and functional agencies to provide legal assistances so that TaTa Power could finalise all the necessary procedures as quickly as possible.

Binh Phuoc advocates rezoning over 20,000 hectares of land (forest land and rubber cultivation land with low economic efficiency) in Loc Ninh district into land for solar power development, whilst developing its land fund in order to attract investment in high-tech agriculture. Currently, the province is also calling for investment in the fields of renewable energy and clean power.

Deputy PM agrees with ministry’s proposal to stop beer stamping policy

Deputy Prime Minister Trinh Dinh Dung has agreed with the Ministry of Industry and Trade’s proposal to stop implementation of a project to improve state management ability in beer production and trading, announced the ministry office. 

Previously, the ministry and other ministries studied the project in 2011 to cope with smuggling, counterfeit and low quality goods in beer and wine trading field.

Of these, Vietnam Beer Alcohol Beverage Association (VBA) proposed to stamp beer products to cope with the issue and hike budget revenue.

Finding the solution might increase procedures and costs for businesses, the ministry has not considered that and studied other solutions instead to ensure legitimate rights of consumers and businesses.

The ministry has recently affirmed no beer stamping policy saying it has been halted for a long time after some media agencies published articles that the ministry continued the policy, which might aggravate cost burden on businesses and increase beer product prices.

On October 23, the ministry sent a document to the Government proposing to stop the project including the beer stamping policy.

HCMC inspects Alibaba Tay Bac Cu Chi property project

Director of the HCMC Department of Construction Tran Trong Tuan said that after receiving warning information about Alibaba Tay Bac Cu Chi property project, the agency has inspected the case to handle violations.

Previously, HCMC Real Estate Association (Horea) issued a document warning customers and secondary investors against wrong information about the project, which Alibaba Tay Bac HCMC Joint Stock Company and Alibaba Property Company have claimed themselves investor, sold housing plots and collected deposits.

According to Tay Bac Urban Area Investment and Construction Management Board, the project is among 133 projects announced at the investment promotion conference to HCMC on October 11, locating in Tay Bac urban area, Tan Phu Trung commune, Cu Chi district over 91.45 hectares. It will develop houses and provide urban and health services.

Still, site clearance and compensation have not completed and technical infrastructure has not been built for the land parcel. Traffic infrastructures connecting it with surrounding areas are still waiting for investors.

Without detail plan 1:500, it is impossible for the project’s developers to have a map and divide the land parcel into smaller plots for sale. Moreover, procedures to choose investor have not been done so Alibaba companies has no capacity to claim themselves investor.

The Department of Construction has not issued a document to confirm that the companies are eligible for mobilizing capital for a future housing project according to the Real Estate Trading Law and Urban Planning Law. Therefore, they have no rights to collect deposits, said chairman of Horea Le Hoang Chau.

PM demands measures to tackle shortcomings of public-private partnerships

The Government Office has released a conclusion by Prime Minister Nguyen Xuan Phuc after a regular cabinet meeting on shortcomings, mechanisms and policies of build-operate-transfer (BOT) and build-transfer (BT) projects, equitization, and partnerships.

According to the Government Office’s Notice 535/TB-VPCP released yesterday, economic and social infrastructure is a pillar of the country, of which traffic and urban infrastructure plays a crucial role in ensuring socio-economic growth, the Government news website reports.

To develop infrastructure facilities, private investment has been mobilized over the past years, mainly under BOT and BT formats, besides public investment allocated by the Government from the State budget and official development assistance (ODA) loans.

The Government has created a slew of mechanisms and policies in order to lure private sector investments under the BOT and BT investment models. As a result, the quality of infrastructure works has been improved, creating a favorable environment for investment, and regional and global economic integration.

However, the implementation of infrastructure projects under public-private partnerships (PPP), especially BOT and BT formats, has exposed shortcomings which should be solved to fulfill development goals, ensuring socio-economic effectiveness and enhancing Government management of this kind of investment.

Specifically, State agencies and the public have lately expressed concerns over BOT and BT projects. Many road and bridge projects under the BOT format have incurred cost overruns while many BT projects have also entitled investors to valuable land at low prices.

The State Audit Office of Vietnam has recently decried such investment formats, and has ordered many BOT road projects to have their toll collection durations shortened as their actual costs are lower than registered while toll collection revenues are higher than declared.

Given such a situation, the PM asks the Ministry of Planning and Investment and relevant agencies to streamline and speed up the implementation of policies and regulations on the investment and use of traffic infrastructure under BOT projects.

The Government leader demands the Transport Ministry consider the State Audit Office of Vietnam’s proposals in order to adopt viable solutions for improving State management in developing traffic infrastructure, especially BOT and BT projects.

The Transport Ministry is required to finish strategies and master plans for developing traffic infrastructure, propose priority projects to be developed under the PPP format, and build tollgates in an appropriate manner.

The Transport Ministry will have to cooperate with relevant agencies to map out the contract liquidation process and project assessment in line with prevailing regulations. Besides, the ministry takes toll collection time into account so as to ensure the interests of the State, investors and the public.

Capital for real estate, BOT projects to fall

The State Bank of Vietnam has demanded increased controls on loans for build-operate-transfer (BOT) road and real estate projects despite their high demand for finances, Le Minh Hung, governor of the State Bank of Vietnam, was quoted by local media as saying.

Answering National Assembly deputies’ questions on investment in property and BOT projects, Hung said banks would continue offering loans, mainly medium- and long-term loans, if projects are feasible. However, supervision is being tightened.

Loans for BOT projects have decreased, accounting for only 1.5% of total outstanding loans. Real estate loans have also gone down to 6.5% from over 10% last year.

Hung said credit had expanded 13.6% in the year to end-October, up a mere one percentage point over last year. The target for all of 2017 is 18%.

During the first ten months of the year, capital was mainly poured into small and medium enterprises in the processing and manufacturing sector.

The governor affirmed the central bank would control credit growth, ensure credit quality and curb inflation.

The average interest rate has declined over the past time. The central bank has asked credit institutions to continue reducing interest rates by cutting costs and lowering bad debt to reduce expenditures of enterprises.

Firms advised to hurry up for street snack market

If Vietnamese enterprises are late in developing good street food products and models of their own for franchise, they will give away such opportunities to foreign companies with strong financial capacities, said a franchise expert.

Speaking at a talk on potential street snack franchise in HCMC yesterday, Nguyen Phi Van, board chairwoman of Retail & Franchise Asia, cited statistics of a market research company as saying that of up to 149,000 street food selling points nationwide as of 2016, the number of points under a branded chain in Vietnam accounts for a modest 0.59%.

Such a ratio is 5% in Hong Kong, 21% in the Philippines, 30% in Taiwan, and 10% in Singapore. These places have also franchised their street food chains such as Singapore’s Old Chang Kee and Taiwan’s Shihlin.

In Vietnam, some notable chains of street snacks are Five Star, Banh mi que and 1 phut 30 giay. Of these, Five Star of Thailand’s CP with kiosks selling fried chicken has held the biggest market share, which rose from 26.5% in 2013 to 71.3% in 2016. Meanwhile, the other chains do not seem to expand.

There is enormous potential for the street snack market whose annual growth is 2%. The modest growth rate of the market is in part attributed to Vietnamese consumers’ concerns over food hygiene and safety.

Nevertheless, annual growth of branded street snack chains was recorded at 17.8% in terms of volume and 20% in terms of revenue in 2011-2016.

One major advantage of local enterprises to compete with foreign rivals is the global tendency of using products native to certain regions. As a result, products native to Vietnam and containing ingredients from Vietnam can have a chance.

“Banh mi (bread) is a typical example, but Vietnam still has many other street snacks potential for franchise. The point here is that there must be a story of native-ness to be told,” Van said. 

To be able to franchise Vietnamese street snacks, local enterprises must build solid foundations, for their products, franchise models, technological applications, supply chains and legal matters.

VNA/VNS/VOV/SGT/SGGP/TT/TN/Dantri/VNEVET