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BUSINESS IN BRIEF 25/12

 Paper industry grows 7% in 2013; Rubber exports surpass 1 billion USD; BIDV teams up with Japan’s top bank; US$1.36 billion investment in a new thermal power plant; VietJetAir receives foreign loan for new aircraft
Paper industry grows 7% in 2013

The paper industry has posted sales growth of 7% this year, but this growth rate is not equally shared by companies in the industry, Vu Ngoc Bao, vice chairman and general secretary of the Vietnam Pulp and Paper Association, said at a news briefing in HCMC on Tuesday.

At the news briefing on the exhibition Paper Vietnam 2014, Bao said the 2013 sales growth of the industry was not so bad although it was lower than in previous years.

Total paper sales volume in 2013 is estimated at three million tons, up 3% year-on-year, and domestic output at 1.7 million tons, rising 7% year-on-year, with the balance imported. However, paper imports have increased 10% against last year.

Bao said many companies had constantly made strong investments to meet rising demand while some others had been forced to either stop or scale down production. The struggling enterprises are mainly those with an annual production capacity of less than 10,000 tons, he noted.

This is a natural selection in the paper industry in the context of the current economic difficulties, Bao said. As such, some businesses weak in governance and technology have been eliminated.

Bao forecast the paper industry to grow better next year.

Rubber exports surpass 1 billion USD

Vietnam’s rubber has enjoyed trade surplus after suffering deficit for many years, exceeding 1 billion USD in the export of rubber products this year.

The information was released by Chairman of the Ho Chi Minh City Rubber and Plastic Manufacturers Association Nguyen Quoc Anh at a recent press conference to introduce a rubber and tyre exhibition held in the city.

Domestic rubber exporters can now join the billion USD club, he said, noting that they must pay attention to improve the quality of their products.

Vietnam has become the fifth biggest natural rubber producer in the world with 910,500 ha of land under rubber trees, producing 836,600 tonnes of rubber in 2012, she said.

The country also ranked fourth in terms of the amount of natural rubber for export, which accounted for 10.6 percent of the market share in 2012.

The nation’s rubber tree productivity is about 1,707 tonnes of latex per ha, generating 105 million VND, ranking third after India and Thailand.

BIDV teams up with Japan’s top bank

The Bank of Investment and Development of Vietnam (BIDV) has signed a Memorandum of Understanding (MoU) on strategic partnership with Japan’s giant Sumitomo Mitsui Trust Bank (SuMi TRUST).

The MoU was inked during Prime Minister Nguyen Tan Dung’s official visit to Japan from December 12-15.

The pact aims to build a strategic cooperation mechanism between BIDV and SuMi TRUST, which are among the leading ones in Vietnam and Japan, in the fields of commercial banking, credit and property management, as well as training and experience exchange.

On the occasion, BIDV also signed other memoranda of understanding with the Vietnam- Japan Business Association (VJBA) and the Vietnam Economic Research Institute (VERI) in Japan to boost trade-investment, tourism and research cooperation, contributing to lifting the comprehensive strategic cooperation between the two countries to a new height.

Work starts on Ho Chi Minh Highway section

Construction of an 80km section of the Ho Chi Minh Highway started in central Thua Thien-Hue province on December 22.

The La Son-Tuy Loan section will be built at nearly 12 trillion VND (564 million USD) in the build-transfer (BT) form.

It starts from La Son town, Phu Loc district, Thua Thien-Hua province, and ends at the intersection with the Da Nang-Quang Ngai Highway in Tuy Loan town, Da Nang city.

Once being completed in April 2017, the section is expected to ease transport through the Hai Van tunnel and avoid flooding on National Highway 1A.

US$1.36 billion investment in a new thermal power plant

An EPC (engineering, procurement and construction) contract for Vinh Tan 4 thermal power plant construction in southern Binh Thuan province was signed in Hanoi on December 23.

The new 1,200MW plant, located in an area housing three other thermal plants, will help raise its local capacity to 5,600MW.

This is the biggest thermal power plant in Vietnam to supply power the South Central Coastal and the southern provinces.

This is a joint venture of the Electricity of Vietnam (EVN) Group, the Republic of Korea (RoK) group-Doosan Heavy Industries and Construction, Mitsubishi Corporation of Japan, Pacific Group Cooperation and Power Engineering Consulting Joint Stock Company 2 (PECC 2) to start in the first quarter of 2014.

It first generator will be put into operation in the fourth quarter of 2017 and the second in the third quarter of 2018.

Vinh Tan Thermal Power Plant 4 is annually expected to supply about 7.2 billion kWh to the electricity grid to help reduce Vietnam’s dependence on hydroelectric power.

Exports to Germany rise nearly 16%

Vietnam’s exports to Germany had reached more than US$4.3 billion by the end of November, up 15.8% against the same period last year.

Products experiencing high growth rates include footwear, garments, wood, seafood, computers, electronics, mobile handsets and components.

Mobile handsets and components topped the list of major export items to Germany, ranking in more than US$1.47 billion. They were closely followed by garments (US$571.5 million) and footwear (US$388.9 million).

Notably computers, electronics and components gained the highest growth of 116.6%.

However, several products saw a decline in export value, including machinery, equipment, tools (down 4.2%), wood and timber products (down 16.5%), rubber (down 25.7%) and bamboo products (down 17.5%).

Tra (pangasius) fish exports hit US$1.8 billion

The Vietnam Directorate of Fisheries reports Tra (pangasius) fish exports are expected to hit a staggering US$1.8 billion this year.

The Vietnam Association of Seafood Exporters and Producers (VASEP) predicts 2014’s Tra fish exports will drop by 5% over 2013 due to a decline in domestic materials and the impact of commercial banks’ tight credit policy.

However, the export value is likely to reach US$2.2 billion in 2015 and US$3 billion in 2020, VASEP says.

While Tra fish exports to key markets like the EU and the US have stabilised or even declined in recent years, shipments to Japan have increased considerably.

Vietnam Customs revealed that by the end of October, Tra fish exports to Japan grew by 36% to US$3.5 million.

VietJetAir receives foreign loan for new aircraft

Viet Nam's leading low-cost airline, VietJetAir, has secured a loan agreement with BNP Paribas bank to purchase three new aircraft in 2014.

A VietJetAir spokesperson, did not disclose the value of the contract yesterday, but said the first three Airbus orders to be delivered in 2014 will cost US$258 million.

This is the airline's next step in realising an agreement with Airbus to purchase 100 planes, which was signed on May 9, 2013, he said.

The agreement aims to meet VietJetAir's vision for building the most modern fleet in the region and becoming a multi-national airline. BNP Paribas is one of the leading financial providers for the aviation industry, serving 128 airlines and aircraft leasing companies throughout the world.

Kien Giang targets $670 million in 2014 exports

The southern province of Kien Giang has set a goal of earning US$670 million from exports in 2014, the provincial Industry and Trade Department announced.

Of the total, the export of agricultural products is expected to reach $440 million, while exports of aquatic products should bring in $175 million, as still other goods earn $55 million. The province will also plan to ship abroad 1.1 million tonnes of rice next year.

To meet this goal, Kien Giang will keep a close watch on supply, demand and price developments of some key products, the department said.

Further, Kien Giang will make full use of its advantages and minimise impacts of the economic recession, while increasing trade promotions and expanding export markets, especially those with high demands.

Renovations commence on int'l highway route

The upgrade of sections of National Highway 19 linking central Binh Dinh province's Quy Nhon seaport with the Central Highlands and Laos, Cambodia and Thailand began yesterday.

The Built-Operate-Transfer (BOT) project, which is to cost more than VND2 trillion (US$94 million), is scheduled to be completed in 2015.

The road work is expected to help ensure traffic moves safely on steep sections of the highway, and boost economic development in Binh Dinh and Gia Lai provinces, as well as the Central Highlands.

The sections to be upgraded include 33 km in Binh Dinh province and 22.6 km in Gia Lai province.

Also yesterday, construction of an 80km section of the Ho Chi Minh Highway began in central Thua Thien - Hue province.

The La Son - Tuy Loan section will be built at a cost of nearly VND12 trillion ($564 million).

Construction is to begin in La Son town, Phu Loc district, Thua Thien - Hue province, and end at the intersection with the Da Nang – Quang Ngai Highway in Tuy Loan Town, Da Nang City.

Once completed in April 2017, the section is expected to ease congestion as traffic will flow through the Hai Van tunnel and alleviate flooding on National Highway 1A.

Gov't declares 2013 economic success story

Economically, 2013 was a successful year for Viet Nam, said Bui Quang Vinh, Minister of Planning and Investment, during an online Government meeting yesterday in Ha Noi under the chairmanship of Prime Minister Nguyen Tan Dung.

"With the Government's determination and the great efforts made by leaders from different sectors, Viet Nam has achieved many positive socio-economic changes in 2013, particularly capping the inflation rate, stabilising the macro economy and restoring national economic development.

Difficulties in business production have gradually been solved while bad debts have been tackled and social security and social welfare have been paid due attention," Vinh said.

From the beginning of the year, the government and the Prime Minister started to develop guiding documents to turn the Party Central Committee and National Assembly's resolutions into reality, particularly through government resolutions 1 and 2, which focus on socio-economic development and supporting enterprises and the market.

"These resolutions are the main tools for ministries and sectors to implement the country's 2013 socio-economic programme," Vinh said.

Throughout the year, the government and the Prime Minister have worked hard to ensure the completion of both immediate and long-term targets, such as inflation control, macro-economic stability and a rational growth rate.

The government has also tried hard to link economic development with cultural and social development coupled with environmental protection and sustainable development.

In 2013, the country faced many economic difficulties, including the reduction in national revenue collection. Yet the Government still gave tax exemptions and delays while prioritising social security and the development of rural areas and agriculture. Other tasks that the government paid attention to were linking socio-economic development to national defence and security and promoting the nation's prestige in the international arena.

Minister Vinh also presented the government's draft resolution on tasks and key measures to implement the 2014 socio-economic development plan as well as the State budget. He highlighted nine groups of measures, including macro-economic stability, inflation control, business and production development, economic restructuring, improving the economy's competitiveness and climate change response.

Speaking at the conference, Prime Minister Nguyen Tan Dung asked local government leaders, ministry and sectors to share the lessons they learned in 2013 and provide feedback about the government's performance in 2013, particularly when it came to weaknesses and limitations.

Dung also asked them to reflect on the government's draft resolution on the tasks and measures to implement the 2014 socio-economic plan as well as the State budget proposal.

The two-day conference will close today.

BIDV opens new branch in Phnom Penh

A subsidiary of the Bank for Investment and Development of Viet Nam (BIDV) opened its seventh branch in Mean Chey District, Phnom Penh, on Sunday.

This marks a move by the Bank for Investment and Development of Cambodia (BIDC) to increase its strategy of penetrating and building up a firm position in Cambodia's finance and banking system.

The new branch is also expected to meet local demand and boost the development of trade and investment ties between Viet Nam and Cambodia. In 2013, the Cambodia economy has been forecast to maintain its growth of over 7 per cent. As of September, Viet Nam had 126 projects, valued at $3 billion, in Cambodia. Two-way trade is expected to hit $3.5 billion this year.

China devours local seafood exports

The Viet Nam Seafood Exporters and Producers (VASEP) expects the value of Vietnamese seafood exports to China to increase strongly, touching US$800-900 million annually in the coming years.

Truong Dinh Hoe, VASEP general secretary, said that in the past two to three years, China has promoted the import of Vietnamese seafood due to increasing demand in the Chinese market, especially for shrimp.

In the first 10 months of this year, the export value of Vietnamese seafood to China had a year-on-year increase of 37 per cent, totalling $462 million. It is expected to touch at least $500 million by the end of the year. The major seafood exports to China include shrimp and tra fish.

The value of shrimp exports to China has reached $150-200 million annually, the second highest after exports to Japan, which is the largest market for Vietnamese prawns.

Hoe said China has imported shrimp from Viet Nam every year, but this year, the country has added white-leg shrimp to the imports from Viet Nam.

Tra fish exports to China have great potential too, Hoe said. In October, the value of tra fish exports reached $180 million, 5 per cent of it coming from the Chinese market. One market that accounts for 5 per cent of the total monthly export value is not a small one, said Hoe. He said Viet Nam could export thousands of tonnes of tra fish to China if it continues to account for 5 per cent of the seafood export value every month.

However, the greatest challenge in exporting local seafood products to China is that Vietnamese products are exported through border trade.

Hoe said exports through border trade are not stable, and enterprises face risks in getting their payments. In addition, border trade exports do not reach a large number of customers in China.

Exports to the Chinese market should be through official trade and in accordance with trade quotas, he stated. For better success in the market, the enterprises should conduct market research in China and study how local seafood exports can reach large cities such as Beijing and Shanghai.

Vietnamese exporters should promote the export of processed seafood products to increase the added value because currently, most of the local exports are either raw materials or unprocessed seafood, he explained.

EU market beckons agriculture exports

Viet Nam's exporters have ample opportunities to export farm and food products to the European Union (EU), according to experts.

At a seminar on the export of farm and food products to the EU in HCM City last Friday, the Ministry of Industry and Trade's Trade Promotion Agency noted that the industry for processing farm and food products has continued to develop in the EU even as other industries faced difficulties in production and sales due to an economic downturn.

The agricultural product processing industry is forecast to grow by up to 3.5 per cent each year in the coming years, according to the centre. That growth will increase the opportunities to export farm and food products, such as coffee, cacao, tea, honey, cashew and fruits, from Viet Nam.

Nguyen Manh Dung, the head of the Agro-Forestry, Seafood Processing and Salt Industry Department, noted that the EU is the second-largest export market for Vietnamese products, with exports from Viet Nam to the EU growing by 28 per cent every year, according to the vneconomy newspaper.

This year, the export value of products from Viet Nam to the EU is expected to reach US$25 billion, accounting for 18.4 per cent of the total value of national exports for 2013.

The top exports from Viet Nam to the EU include agricultural products, seafood, textiles and garments. Viet Nam also exports agricultural raw materials to the EU.

However, Vietnamese agricultural exports to the EU also faced some significant challenges, including a lack of storage and processing facilities and the relatively limited scale of production by small-and medium-sized enterprises, Dung added.

Additionally, agricultural exports had to meet the strict quality, hygiene and safety standards of the EU, he said. Dung stated that if Viet Nam wanted to increase its exports to the EU, local firms would have to improve their storage and processing facilities, establish and protect trademarks and build their reputations.

They also need to develop direct exports instead of using the current route of indirect export activities, Dung said at the seminar held by the Centre for the Promotion of Imports from developing countries (CBI), which was jointly organised by the European Union and the Trade Promotion Agency.

The CBI and the Trade Promotion Agency have a joint programme that supports Vietnamese exporters in their exports to the EU.

The programme gives priority to eligible local firms in the coffee, tea, cocoa, honey, cashew, spice and the herbal industries and offers support for market research, accessing information on competitors, improving competitiveness and meeting the EU's standards of quality.

Experts urge more support to bolster fisheries sector

The Government should help improve seafood quality by enabling fishermen to have better storage facilities and setting up fishing hubs, and provide more support for offshore fishing, experts said.

Speaking at a seminar held in the southern province of Phu Yen on Sunday, Nguyen Duy Luong, deputy chairman of the Viet Nam Farmers Association, said fishermen have low incomes and face many risks since most of their boats are outdated and not ideal for offshore fishing.

More than 8 per cent of fishermen are illiterate while only half have even completed primary education, he said.

Most of them learn their fishing skills from older colleagues generations and on the job, he said.

"Therefore, providing them fishing skills is one of the essential tasks."

There were more than 4,700 accidents involving fishing boats between 2007 and 2012, leaving 427 men dead, 213 missing, and 1,400 injured, according to the Directorate of Fisheries.

More than 60 per cent of the accidents were caused by engine failure, it said.

The country has more than 117,000 fishing boats, but more than two thirds have engines of less than 90 horsepower.

Nguyen Ngoc Oai, deputy head of the directorate, said fisheries authorities manage such a large number of boats but do not have enough rescue forces in case of sudden accidents.

Nguyen Quoc Chinh, chairman of the An Hai Commune Fishery Trade Union based in Quang Ngai Province, said the commune's fishermen know that they have to mainly depend on each other in case of accidents.

"The establishment of fishery trade unions is necessary to link up fishermen for catching fish and rescuing each other."

There are few unions in the country's 28 coastal cities and provinces, he added.

Participants said the Government has had in place support polices, including investment in infrastructure and loans for fishermen to buy boats since 1997.

But they remain inadequate and fishermen continue to face difficulties, they said.

Fishermen are provided loans to buy fishing boats but not provided to equipment and facilities.

Under a Government plan, five fishing hubs will be set up in 2020-30 in Hai Phong and Da Nang and the provinces of Khanh Hoa, Ba Ria- Vung Tau, and Kieng Giang.

The hubs would each have a fishing port, logistics services, processing plants, fish trading floors, and training facilities for fishermen, he said.

Tran Du Lich, head of the HCM City National Assembly Delegation, said the Government should soon set up such a hub in the central region.

He also said fishermen face difficulties in getting bank loans.

Deputy Minister of Agriculture and Rural Development Vu Van Tam said many fishermen cannot get bank loans because there are no specific regulations for the fisheries sector.

Fishermen can only borrow general loans and they have to mortgage assets.

The ministry would work with banks to enact regulations that would enable lending to fishermen, he promised.

Last year the country's total catch amounted to 2.63 million tonnes of fish and the fisheries sector provided more than 4 million jobs, according to the directorate.

Preferential policies for agricultural development

The Government has promulgated a series of additional preferential policies to encourage businesses to invest in agriculture and rural development.

Under newly-approved Decree 210/ND-CP, investors shall be exempted from land use fee for carrying out agricultural projects eligible for special preferential treatment.

For projects eligible for preferential treatment, the land use fee shall be reduced to 70%. It shall be cut in half in case of encouraged investment projects.

Investors of large-scale livestock farms will receive around US$140 per project.

Especially, those on production of high yielding dairy cows will get US$235 each. The preferential policy aims to help investors build sewage treatment, electricity and water systems, pastures, and battery cages.

The decree which will take effect from February 10 next year, says the preferential policy is also applicable to centralised aquaculture projects at sea.

Vietnam’s agriculture sector holds strong growth opportunities to speed up its growth in terms of production, exports and retail sales, especially for the country’s traditional products such as rice, coffee, livestock, and dairy sectors, according to the Business Monitor International (BMI).

However, Vietnam is facing growing competition in its key markets, and the fulfillment of its promising potential will only be achieved if the country steps up its competitiveness and improves both product quality and supply chain efficiency.

The results of public-private partnership (PPP) programmes in the cultivation, breeding and seafood sectors has reinforce BMI’s forecasts of Vietnam's agriculture sector in the coming years.

The country's fertile soil and its increasing agricultural productivity will support robust growth in various sectors by more than 10% between 2012 and 2017.

To maintain growth, Vietnam should improve the quality of products and agricultural productivity by applying new technology in cultivation and breeding to ensure strict food hygiene and safety regulations and promote brand names.

Dak Nong: 1 trillion VND for IP infrastructure

The Central Highlands province of Dak Nong has invested over one trillion VND (47 million USD) in building infrastructure systems in industrial zones and clusters in the locality.

Accordingly, the money was poured into Tam Thang and Nhan Co industrial parks (IPs) in the districts of Cu Jut and DakR’lap and industrial clusters in Dak G’ Long, Dak Song, Krong No, Tuy Duc and Dak Mil district as well as Gia Nghia town.

Covering an area of 181 ha with a basically completed-infrastructure system, Tam Thang IP has so far seen an occupancy rate of more than 77 percent, with 20 operational projects along with four projects under construction and six newly-licensed projects.

Nhan Co IP has a total area of 95 ha, mainly serving bauxite ore exploitation and alumina metallurgy industries. The Nhan Co alumina production plant at the IP has a total investment of 16 trillion VND (752 million USD) and an annual capacity of 650,000 tonnes. The factory is scheduled to be completed by the end of 2014.

In the January-December period of this year, the province’s industrial parks and clusters saw 189 investment projects in operation with a total investment of 1.7 billion USD and a disbursed capital of 680 million USD, generating jobs for 5,000-10,000 labourers per year.

According to orientations given by the provincial authority, the industrial parks and clusters must be associated with production, processing and consumption of agro-forestry produce, and focus on industries - craft and small industries in connection with localities’ strength and potential.

In order to promote the development of industrial parks and clusters, the province has mapped out and implemented effectively policies for industry development to attract more investment to the sector, thus fostering economic development, creating jobs and improving the income for local people.

The province gave priority to developing key industries such as coffee, rubber, cashew, pepper and wood processing; construction materials production and exploiting sand and stone. These are expected to boost the province’s economic restructure in the direction of industrialisation and modernisation.

It also encourages enterprises operating in the locality to use advanced technologies and equipment in production to raise output and quality, reduce the price of products and enhance competitiveness in domestic and foreign markets, thus promoting exports and ensuring sustainable development.-

Experts seek measures to lure more foreign resources

An economic expert has stressed the need to propose new policies to lure more foreign resources and investors with great potential and operating in high and source technology, to prioritised areas.

Dr. Bui Van Thach, deputy head of the Party Central Committee’s Economic Commission, told a recent seminar in Ho Chi Minh City that proposing a renovation of the legal framework and policies to create a new breakthrough in this field is very necessary and urgent.

He said that foreign investment has played an important part in Vietnam ’s development and international integration over the past 25 years, driving the country out of difficulties caused by embargo in the past and affirming its current policy of being a reliable friend and partner of the international community.

However, he noted the poor performance of FDI enterprises such as tax evasion, causing environmental pollution and failing to ensure workers’ legitimate rights.

Participants at the event also analysed reasons for limitations in attracting foreign resources in the context of Vietnam ’s deeper integration as well as the country’s FDI attraction goal in the coming time.

Many of them said that Vietnam succeeds in FDI attraction with a number of large-scale projects, including those of Samsung and Canon. As FDI will continue to be poured into Vietnam in the future, the country should have polices to use this source for economic restructuring, they added.

Meanwhile, some others underlined the need to improve the efficiency of investment attraction, given the fact that only 40 percent of the registered capital has been realised in localities.

SBV will stabilise national currency: Governor

The State Bank of Vietnam (SBV) will continue to stabilise the value of the national currency (VND) and improve its position in investment channels, considering this a long-term strategy in steering monetary policy, SBV Governor Nguyen Van Binh has affirmed.

Vietnam has achieved notable success in this task, he said, adding that over the past two years, VND deposits in banks have been profitable and safe.

Binh also advised people to continue to keep their savings in VND in banks because it is a safe and attractive investment channel, that can ensure the benefits of the depositors.

This is also the bank’s target in steering monetary policy, he stressed.

According to the Governor, the SBV has dealt with nine weak banks in a move to implement its project to restructure the banking system from now to 2020, which has been approved by the Prime Minister.

The bank will continue this task to ensure the project’s mid-term 2015 target and the long-term target to 2020, he said.

Binh further said that dealing with bad debts is urgent.

As the State budget has to serve socio-economic development and social security, the establishment of the Vietnam Asset Management Company (VAMC) is a suitable model to settle bad debts, easing the burden on the State budget, he said.

Though the company has not yet solved the problem completely, it still acts as an appropriate instrument for banks, enterprises, investors and the whole economy, he affirmed.

The bank has also issued policies to support agricultural production. To facilitate farmers’ access to loans, the SBV has applied a ceiling interest rate for long-term loans with the current rate being 9 percent.

If farmers or agricultural enterprises prove that their projects will be productive, they will be given access to loans, Binh affirmed.-

Mekong Delta calls for investment in aquaculture

The Mekong Delta region needs over 2. 6 trillion VND (124 billion USD) to develop its aquaculture between now and 2020.

The information was revealed at a recent seminar to promote investment in the sector held in Rach Gia city, Kien Giang province by the Ministry of Agriculture and Rural Development, the Southwestern Steering Committee and the provincial authorities.

Priority fields will be tra fish, shrimp and molluse development and diversification of aquatic products, breeding, infrastructure modernisation, and establishment of fisheries centres in Can Tho city and Kien Giang province.

The region will also pay attention to vocational training and technology development to serve its economic development.

Participants stressed the need to create links among regional localities while encouraging investment in fish catching and farming in the Mekong Delta.

It is necessary to build sustainable and high added value projects for foreign direct investment (FDI) attraction and issue preferential policies to draw FDI and official development assistance (ODA), said Dinh Thi Thanh Huyen, a representative from the agricultural ministry.

Attendees also gave opinions on what must be done to further promote the development of the regional aquaculture on par with the region’s potential and strength.

The Mekong Delta province, with its huge potential for the aquatic development, contributes importantly to the country’s seafood production and export with the two main products of shrimp and tra fish.

The region has a total farming area of over 727,200 ha with an annual output of 2.2 million tonnes, accounting for 70 percent of the country’s total area and 65 percent of the total production, respectively.

Its aquatic exports make up over 35 percent of the agriculture production value and 12.35 percent of the production value of all economic sectors in the Mekong Delta.

The Mekong Delta region comprises 12 provinces and one centrally-run city with a total area of 40,000 square kilometres and a population of 18 million. It is the largest granary and the major aquaculture development region of the country.

Central Highlands harvests 1 mln tonnes of coffee beans

The Central Highland provinces have harvested less than 1 million tonnes of coffee beans in the 2013-14 crop.

Dak Lak province, the country’s the largest coffee producer, yielded 330,000-350,000 tonnes of beans, 100,000 tonnes less than the last crop.

Unfavourable weather, including prolonged drought, is blamed for the decreasing output.

According to Nedcioffee BV, growers in Vietnam, which has the largest robusta growing area in the world, can sell 55 percent of their coffee beans at a price of 35,400 VND (1.66 USD) per kilo before the country starts the largest holiday season, the Lunar New Year festival.

Tuna exports down nine percent against 2012

Vietnam’s tuna exports may reach 520 million USD this year, down 9 percent from last year’s figure, according to the Vietnam Association of Seafood Exporters and Producers.

Exports of tuna to Japan, one of the country’s two main tuna importers decreased continuously. Vietnam earned only 38 million USD from the market in the first ten months of the year due to a shortage of tuna.

During the period, the country saw increasing orders only from the European and Mexican markets out of its ten largest import markets.

The situation led to a fall of 5.5 percent year on year in export earnings of the product to 450 million USD.

Last year, tuna brought home 600 million USD.

Reforms of fossil fuel fiscal policy - not only price

The President of Vietnam has committed to eliminating ineffective fossil fuel subsidies, which is in line with the country’s National Strategy on Green Growth. However, a lot of challenges remain in realising this goal.

Studies by the Central Institute on Economic Management (CIEM) showed that Vietnam’s fossil fuel subsidies, while not a high level on either a regional or global scale, had doubled between 2007 and 2011.

The country has been maintaining fossil fuel subsidies in both direct and indirect forms, with indirect subsidies accounting for a larger part, but difficult to calculate. Subsidies for electricity are the highest, followed by those for petroleum and oil. These policies are believed to be unsustainable, as they contribute to climate change, run counter to the trend of economic development and modernisation, while benefiting better-off people more than the poor.

State-run enterprises still monopolise the power sector, and their ineffective operations are putting pressure on the State budget while reforms in the sector are taking place at a slow pace.

The UNDP in Vietnam has stressed that fossil fuel fiscal policy reform is not all about price. A comprehensive reform of the sector requires the establishment of a competitive power market, reform of State-run enterprises in the sector and proper pricing.

At a recent symposium on this issue, many experts shared the UNDP’s view and emphasised that transparency is the key word in the reform process. Transparency is required in businesses’ financial reports as well as in the mechanism to define power prices and the management of the fund for stabilising petroleum prices.

Vice President of the Vietnam Academy of Social Science Nguyen Quang Thuan said the phasing out of fuel subsidies is an important part of national economic restructuring. It will force enterprises to replace outdated technologies with new energy-saving ones, while encouraging the private sector to invest in the power industry and boosting the shift to green growth.

He added that the adjustment of power prices should be done step by step following a roadmap to allow consumers and enterprises to adapt while preventing inflation and negative impacts on the economy.

In order to control the impact of the reform on vulnerable groups in society, it is recommended that the State continues to improve the social security network and take interference measures to offset the impact on the poor, small- and medium-sized enterprises and household businesses, particularly those operating in the fishery and agricultural sector.

Experts stressed that the reform should be supported by widespread consensus, and that communications campaigns are necessary to popularise the negative impacts of fossil fuel subsidies and raise awareness of effective energy use.-

HCM City: hi-tech zones create momentum for growth

The Ho Chi Minh City hi-tech zone has been identified as the driving force behind the city’s development with its main tasks of reeling in investment and expertise and training human resources.

At a working session with the HCM City hi-tech zone and hi-tech agricultural zone on December 23, Secretary of the municipal Party Committee Le Thanh Hai said the city plans to have 24 industrial and processing zones that focus on developing high technologies to support production.

These zones are required to look towards creating an environment for research and product development.

By the end of 2013, the HCM City hi-tech zone has had 59 valid investment licences with total investment capital of 2.2 billion USD. In 2013 alone, it received an investment of 236.8 million USD.

By 2018, it is expected to lure 60 hi-tech projects worth 3 billion USD and by 2020, it aims to train 10,000 engineers and researchers and make an export value of 20 billion USD.

The city’s hi-tech agriculture zone, covering 88.17 ha, has so far housed 14 projects with total investment of 450 billion VND (21.15 million USD). It is focusing on creating high-yield plant and animal varieties and producing bio-products among others.-

Fishing industry attracts US$310 mil in FDI

The fishing industry has so far attracted more than 70 foreign direct investment (FDI) projects capitalised at over US$310 million, mostly focusing on aquaculture, processing, feed and fries.

Dinh Thi Thanh Huyen, a Ministry of Agriculture and Rural Development official, says these are small projects with an average investment capitalisation of over US$4.4 million each.

Although businesses from 18 countries and territories have invested in this industry, they have yet to cooperate in production and supply chains.

In addition, FDI in the fishing industry remains modest, especially in the Mekong River Delta where localities have not built strategic plans for promoting and managing foreign investment.

Poor infrastructure, low profit and risks have barred investors from investing in the field in Vietnam, said Huyen.

She suggested localities implement a development strategy of the fishing industry until 2020 to attract hi-tech and environmentally friendly FDI projects, as well as perfecting incentive investment policies.

She said businesses need to learn about international investment trends and investor demand, boost trade promotions and attract ODA sources. Especially, it is important to diversify investment methods under the Pubic-Private Partnership (PPP) model.

Huyen reveals the General Department of Fisheries will co-ordinate with Metro Cash & Carry Vietnam and other companies like Cargill, Fresh Studio to develop fishing ponds under a pilot METROGAP model for 2,000 households in the Mekong Delta city of Can Tho.

A seafood development centre in Can Tho and a fishing industry centre in Kien Giang will be established to attract FDI and ODA sources, contributing to developing the seafood sector in the Mekong River Delta, improving export turnover and generating jobs for local people.

UAE – a potential market for Vietnamese goods

Vietnam Customs believes the United Arab Emirates (UAE) could develop into a lucrative export market for Vietnamese goods, with ten-month export turnover totals increasing 136% year-on-year to US$3.5 billion.

The UAE is currently Vietnam’s seventh largest export market and 17th biggest trade partner. While the traditionally important export commodities like mobile phones, garments and textiles, and footwear remain strong, restructures have seen a transition towards emerging export products such as electronics and components, wood and timber products, plastics, and electric cable.

Vietnamese Trade Counsellor to Dubai-UAE Ngo Khai Hoan credits the positive export trends to bilateral agreements, including those on Investment Encouragement and Protection and Double Taxation Avoidance.

The UAE could serve Vietnamese businesses as an export gateway into the Middle East and Africa. Markets in these regions are dependent on imported food, from which they satisfy up to 90% of consumer demand.

Hoan sees an opening for Vietnamese exporters to proactively increase their market shares in agricultural produce, tea, coffee, construction materials, and seafood.

Central provinces win new FDI projects

Vietnam’s central provinces have so far attracted 850 foreign direct investment (FDI) projects capitalised at a total approaching US$25.5 billion.

They lured 66 new FDI projects this year alone, bringing additional registered capital worth US$1.5 billion. Binh Dinh Province’s Bus Industrial Centre Co., Ltd project boasts US$1 billion from Russian investors.

Trinh Minh Van, a Ministry of Planning and Investment official, regards 2013 as a positive year for central provinces’ FDI attraction. Some of the year’s highlights include added capital for Vung Ro Oil Refinery, a Thai group’s feasibility study for a mega oil refinery, and Quang Ngai’s Vietnam-Singapore Industrial Zone (VSIP).

Developing trademark for Vietnamese rice

Vietnam needs to build a brand of its rice, or it will lose out to Thailand and other emerging rice competitors.

The view was shared by experts and businesses at the 2013 Vietnam Trademark Forum in Ho Chi Minh City on December 20.

The forum heard although Vietnam is the world’s third rice exporter, its export value remains low as the country has yet to create a brand globally.

Delegates emphasised the importance of tailoring products to consumer demands. They agreed that to develop a popular brand, businesses need to produce products that cater to diverse customer tastes and make distinctions.

Nguyen Trung Thang, President of the Masso Group Management Board, said he believes the value of rice could be improved by effective marketing strategies.

He suggested the proper deployment of and respect for branding would help bring Vietnamese rice level with Thai rice in the eyes of international consumers.

The forum was part of the government’s Vietnamese Trademark Programme, aimed at encouraging local products and businesses to invest in developing their trademarks and brand profiles.

HCM City addresses Japanese business concerns

HCM City leaders have affirmed their determination to resolve any difficulties and foster a favourable local investment environment.

Their commitment was made at a December 20 roundtable discussion between Japanese Business Association in HCM City (JBAH) and the City’s investment and trade promotion centre (ITPC).

The conference, organised on behalf of HCM City’s Japanese business community, facilitated a direct dialogue with HCM City authorities on issues encountered in tax, customs, and transport.

HCM City People’s Committee Vice President Le Manh Ha, urged the relevant ministries and agencies to focus on any major problems obstructing the production and business activities of the city’s Japanese investors.

JBAH President Yamaguchi Kimio acknowledged HCM City’s recent improvements to its investment environment and the successful implementation of a number of municipal action plans.

JBAH added 72 new members in 2013, bringing its total membership to 678 businesses.

Japan is currently HCM City’s third biggest foreign investor with 112 projects capitalised at over US$101 million.

Ninth Parkson trade centre opens in Vietnam

Parkson officially opened the Parkson Cantavil Premier Trade Centre, part of the Cantavil Premier complex, in HCM City’s District 2 on December 20.

The centre, Parkson’s ninth in Vietnam, has investment capital totalling US$8 million.

Parkson Vietnam Director General Tham Tuck Choy said the Parkson Cantavil is tailored to the shopping and entertainment demands of HCM City residents and represents another step on the path to Parkson becoming synonymous with shopping mall excellence.

He remains optimistic about Vietnamese retail, despite the fluctuating real estate market. Investors are still eagerly seeking retail space.

Parkson aims to open two or three new Vietnamese centres every year, in locations including HCM City, Hai Phong, Da Nang, Nha Trang, Can Tho, and Bien Hoa.

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

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