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BUSINESS IN BRIEF 25/3

Vietnam runs up trade deficit in March; Lao company markets coffee in Vietnam; Japan steps up inspection of shrimp imports; Another Amway factory shaping up in Binh Duong; Vietnam bond issues grow fastest in East Asia

Vietnam runs up trade deficit in March

Vietnam’s trade balance in March showed a deficit of US$0.3 billion, equivalent to 1.2% of the country’s total export- import turnover, according to the General Statistics Office (GSO).

GSO statistics show exports rose 26% to US$12 billion and imports jumped 22% to US$12.3 billion.

Major export items which experienced a sharp increase compared to last month included garment and textiles (US$1.6 billion, up 53%), mobile phones and spare parts, (US$2 billion, up 16%), and  electronic products (US$850 million, up 37%).

Other export products like rubber and chemicals maintained stable growth. Several traditional export commodities, namely rice, seafood, and coffee, saw relative high growth.

The sharp rise testifies to the fact that Vietnam grasped opportunities available from its main export markets, such as the US, Japan, and the European Union that have started recovering from the crisis.

Electronic components and machinery equipment topped the list of import items, with over US$1 billion spent on each group. Fabrics and petroleum imports increased by 24% and up 31% respectively.

The country’s total export earnings were estimated at US$33.346 billion in the first quarter of the year, and imports were US$32.339 billion.

Thus, Vietnam enjoyed a trade surplus of US$1 billion, accounting for 1.53% of the country’s total import-export revenue.

The foreign business sector still plays a pivotal role with a trade surplus of nearly US$4 billion, while domestic enterprises faced a trade deficit of nearly US$3 billion.

Great potential for Vietnamese fruitful exports to Japan

Japan has become Vietnam’s second largest fruit importer, second only to China, confirms the Asia-Pacific Market Department under the Ministry of Industry and Trade (MoIT).

Last year Vietnam’s earned US$61.223 million from fruit exports to the Japanese market, up 12.03% from the previous year. The figure is expected to reach US$77 million in 2015 and US$135 in five years time.

In recent years, Vietnamese exports to Japan have experienced a two-digit growth, hitting an average increase of more than 27%.  Despite impressive export growth, revenue from fruit and vegetable exports remained modest, accounting for only 1% of Japan’s fruit and vegetable import value.

Japan is considered a promising market for Vietnamese fruit exporters as the country imports more than a half of its fruit and vegetable consumption volume (worth US$3.2 billion) annually.

There’s an increasing demand for exotic fruits such as banana, pineapple, pawpaw, mango and avocado on the Japanese market, the MoIT reported, adding that Vietnam possess a huge advantage in producing these tropical fruits.

It’s worth noting that since Japan removed its ban on the import of dragon fruits in November 2009, the export of this farm produce to the Japanese market has enjoyed a sharp increase in both volume and value.

Local fruit exporters are demonstrating a keen interest in shipping fruits to Japan, which they admit, offers more advantages then other foreign importers.

KoshidaRyu, an agricultural expert from the Japanese International Cooperation Agency (JICA), said the Japanese market is opening up for a variety of Vietnamese fruits, especially longan, rambutan, and star apple.

He also suggested local exporters should promote marketing programmes in Japan to help educate Japanese consumers about Vietnamese fruits, which are often favoured by Japanese tourists during visits to Vietnam.

Vietnam Customs statistics show that Vietnam’s fruit exports to Japan were valued at US$31.88 million, contributing to 7.26% of Vietnam’s total revenue from fruit and vegetable exports. The figure reached US$54.65 million in 2012, with a 16.78% annual increase.

The sharp rise of Vietnamese fruit exports to Japan was attributed to preferential tariffs offered by the Vietnam-Japan Economic Partnership Agreement (VJEPA).

A number of Vietnamese fruits have secured a firm foothold in Japan, including Hoa Loc mango, Chin Hoa durian, Nam Roi grapefruit, and pomelo from the Mekong Delta.

However, local fruit exporters are facing tough competition from strong rivals like Thailand and China to corner the Japanese market.

Moreover, Japan is a demanding market with high standards and strict regulations on goods quality. This requires Vietnamese exporters to focus on ensuring excellent food hygiene and safety and adhering to strict Japanese regulations.

It is essential to diversify export items, particularly tropical fruits and vegetable such as banana, pineapple, avocado, orange, lemon, pomelo, onion, ginger, carrot and pepper.

Local businesses should also pay more attention to meeting requirements for environmental protection and food hygiene to make further breakthroughs in export growth of the Japanese market in the future.

Lao company markets coffee in Vietnam

Vietnam’s Blue Star Distribution JSC is set to sign an agreement with Dao-Heuang Group, one of Laos' top companies, to distribute the latter's coffee products in Vietnam.

The deal comes as part of a co-operation programme between HCM City and Champasak province in Laos.

Dao-Heuang exports its Dao Coffee to many countries like Japan, Switzerland, Italy, China, and Singapore.

It will now, in turn, distribute Blue Star's confectionery and other products in Laos.

Leuang Litdang, chairwoman of Dao-Heuang Group, said her company plans to tie up with Vietnamese partners to expand its business and production in Vietnam.

If the plan succeeds, it will be the first Lao company to invest in Vietnam.

Since setting up the co-operation programme in 2001, HCM City and Champasak have achieved solid results, with HCM City investors starting nearly 40 projects in the Lao province, most of them in agro-forestry, industry, and tourism.

This has made Vietnam the biggest investor in Champasak.

Trade and economic ties between Vietnam and Laos have grown strongly this year.

Norway, Dong Thap promote fisheries cooperation

Norwegian businesses expect to increase fisheries cooperation with Dong Thap province and introduce its seafood to the Norwegian and European markets following a March 22 visit.

A delegation from the Norwegian Ministry of Trade, Industry and Fisheries, led by its Deputy Minister Amund Dronen, made a fact-finding trip to Vinh Hoan Corporation, one of Vietnam’s leading Tra fish processors and exporters.

They learned about the company’s processing procedures and technology to ensure its products meet international quality standards for export.

They also had a working session with leaders of the provincial People’s Committee to examine the possibility of bilateral cooperation.

Dong Thap’s Tra fish farming area covers nearly 2,000 hectares and generates an output of 386,000 tonnes per year, taking the national lead for Tra fish processing and production.

Provincial leaders expressed hope that Norway will support the province in the fields of production, farming and processing, market development, and new technology applications to improve productivity and quality of Tra fish.

In response, Amund Dronen spoke highly of cooperation between Vietnam and Norway, and pledged to discuss future cooperation opportunities with relevant Norwegian agencies.

He also affirmed his trust for the long-term commitment between the two sides.

Currently, the Norwegian Agency for Development Cooperation (NORAD) is funding Vietnam’s project on improving the production value chain of Tra fish.

Vietnam’s trade shortfall with India narrows

Vietnam’s trade deficit with India narrowed to US$529 million in 2013, according to Ministry of Industry and Trade statistics.

The change represents a continued and significant deceleration after the deficit peaked at US$1.7 billion in 2008.

Apart from the traditional exports, including pepper, rubber and footwear, more and more Vietnamese products with higher added values were shipped to India in 2013, such as mobile phones, computers, electronics and components.

Leading economists attribute the higher added values as the most important single factor contributing to the much improved trade deficit and expect to see this trend in the future.

In addition, Vietnam’s exports to India have been afforded more favourable treatment since the ASEAN-India Free Trade Agreement came into effect in 2010.

India’s recognition of Vietnam’s full market economy has greatly facilitated Vietnamese products finding easier access to the Indian market which generally imposes trade barriers and protective instruments.

A Vietnam-India Joint Sub-Committee on Trade was established and successfully held its first meeting in New Delhi, India, on November 18, 2013.

European meat producers eye Vietnam market

The European Meat Alliance launched a communications campaign in Hanoi on March 21 to introduce quality meat products in Vietnam.

The campaign, launched in Vietnam, the Republic of Korea, and the US, lasts from July 24, 2013 to July 23, 2016.

It aims to promote the export of European meat and related products, and deepen consumer understanding of the products’ quality, flavours, and production procedures.

It offers meat importers, distributors, traders, and meat producers in Vietnam the chance to learn about the European meat production procedures and food hygiene regulations.

Vietnam imported more than 820 tonnes of fresh and frozen pork and approximately 290 tonnes of frozen beef from Europe in 2012.

HCM City desires for enhanced cooperation with Norway

Ho Chi Minh City and Norway should further enhance cooperation in the areas of economy, trade, investment and culture, said municipal People’s Committee Chairman Le Hoang Quan.

At a March 21 reception for visiting Crown Prince Haakon Magnus and Princess Mette Marit, Quan voiced his confidence that their trip will usher in a new period of development in bilateral ties.

Ho Chi Minh City in its role as Vietnam’s leading economic hub will make every effort to strengthen relations between the two countries, Quan said.

For his part, the Norwegian Crown Prince Magnus told his host that Norway and Vietnam hold great cooperation potential based on their longstanding, sustainable and close ties.

The Norwegian Crown Prince witnessed a cooperation signing ceremony between the MARD and Norway's Pharmaq Company.

He suggested both nations should further push up their cooperation in the maritime industry, hydroelectricity, information technology, communications and industry.

The same day, the Norwegian Crown Prince and Crown Princess along with a business delegation of 130 members joined a meeting between Vietnamese and Norwegian entrepreneurs in HCM City.

Attendees said that the conclusion of Vietnam-Norway and Vietnam-EU Free Trade Agreement (FTA) will create a good opportunity for Vietnamese and Norwegian businesses to increase bilateral cooperation and establish a trade partnership.

Deputy Minister of Industry and Trade Ho Thi Kim Thoa said Vietnam-Norway economic and trade cooperation has seen positive developments over the past years with last year’s two-way trade turnover reaching US$240 million. However, the figure is still far from matching their full potential.

Therefore, businesses should stay active in exploring each other’s market and set up more cooperative relations thus paving the way for both nations to promote economic, trade and investment cooperation, Thoa added.

In his statement, HCM City People’s Committee Vice Chairman Le Manh Ha described the meeting between business representatives as testimony to the two nations’ determination to bolster bilateral economic and trade links in the time ahead.

The Crown Prince also witnessed the signing of a cooperation document between the Vietnam Ministry of Agriculture and Rural Development (MARD)’s Animal Health Department and Norway’s Pharmaq company.

Japan steps up inspection of shrimp imports

Japan is now inspecting virtually all shrimp imported from Vietnam for oxytetracycline (OTC) after the antibiotic was detected in two separate batches of shrimp in February and March 2014.

The Vietnam Association of Seafood Exporters and Producers (VASEP) has sent a letter of inquiry to the Directorate of Fisheries to regarding the issue.

Earlier, Vietnamese shrimp was listed in Japan’s annual supervision program with two prohibited antibiotics namely Chloramphenicol (since February 21, 2014) and Oxytetracycline (since February 27, 2014).

The association has updated the information and asked local shrimp businesses to strengthen self-regulation of antibiotics in shrimp, especially the two mentioned substances.

VASEP has been asked to supervise and strengthen control over input materials and encourage businesses and shrimp breeders to better self-regulate the two substances effectively.

450 firms register for VIETBUILD 2014

As many as 450 businesses have registered to join VIETBUILD 2014 – an international exhibition on real estate, interior and exterior design, and construction materials – to be held in Hanoi on March 26-30.

At a press conference in the capital city on Mach 21 officials said the registrants include 214 from Vietnam and 175 joint ventures and 61 foreign firms from China, the Republic of Korea, Japan, Malaysia, Thailand, Singapore, the Czech Republic, the US, Germany, Indonesia, and Taiwan.

They will showcase their latest products through more than 1,350 pavilions, with a focus on interior equipment and designs.

Several banks will also take this opportunity to introduce credit services for real estate projects.

In the context of the economic downturn, VIETBUILD 2014 is expected to bolster export promotion and construction investment activities.

Another Amway factory shaping up in Binh Duong

Amway Vietnam Co, Ltd under the auspices of US Amway Corporation officially broke ground on construction of its second factory in Vietnam on March 21.

With an initial investment of over US$25 million, the factory located in the Vietnam-Singapore Industrial Park (VSIP) in Tan Uyen district in the southern Binh Duong province, will be built on an area of nearly 55,000 square metres.

The facility is seven times larger than its first one located in Bien Hoa City-based Amata Industrial Park, in the southern province Dong Nai.

The new factory will produce differing types of vitamins and mineral nutrients and dietary supplements with three production assembly lines with an annual capacity of over 23 million products worth US$200 million per year.

In the context of the global economic downturn, the investment in the Vietnamese market through the transfer of advanced knowledge will contribute to the country’s modernization and industrialization process and give a fresh impetus to local economic development.

Amway Vietnam is the only direct selling business which operates from factories in Vietnam, proving the company’s long-term commitments in the country.

Amway CEO Doug DeVos said that since 2008, Amway Vietnam has achieved steady annual growth. That is the reason why the group decided to make a long-term commitment in Vietnam by building the second factory.

Logistics sector urged to improve competitive edge

Roughly 400 leading logistics firms attended - 2014 Logistics Forum – held in HCM City on March 21 to share challenges, trends and devise solutions to improve their competitive edge in the industry.

Famous businesses at the event included DHL Supply Chain, Loscam, Interroll, Schaefer SSI, Ascendas-Protrade, Mapletree, Nestle, Coca-Cola, Big C, Unilever, Metro Cash & Carry, and Geodis Wilson.

The event aims to create a multi-dimensional viewpoint in assessing opportunities and challenges of Vietnam’s logistics sector.

According to a World Bank (WB) report on the logistics sector released in January 2014, Vietnam’s complex and in comprehensive laws and regulations in the industry have posed challenges to the improvement of the competitive edge of Vietnam’s logistics sector.

The report noted that corruption and poor infrastructure have also plagued the development of the sector.

At present, Vietnam’s logistics market has been primarily comprised of financially and technological strong foreign companies.

To sharpen Vietnam’s competitive edge, local businesses should be fully aware of challenges, advantages and keep abreast of the developing trends of the world’s advanced.

Australian cattle exports to Vietnam show drastic upturn

Vietnam plans to import a record 150,000 head of cattle from Australia in 2014, according to the Vietnam office of trade affairs in Australia.

Vietnam currently ranks third among Australia’s largest cattle importers, the office reported and since the beginning of the year, nearly 40,000 head of Australian cattle have been shipped into the country.

This year, Vietnam is expected to become the second largest cattle importer of Australian beef, just after Indonesia. Previously, Vietnam principally purchased live cattle from Thailand.

In March 2014, an Australian delegation of government officials and businesses led by Northern Territory Minister for Primary Industry, Willem Westra van Holthe toured a number of cattle breeding farms and slaughtering houses in Haiphong and HCM City in preparation for the increase in cattle imports.

Chief executive of the Northern Territory Livestock Exporters Association, Ben Hindle, said Vietnamese importers have heavily invested in infrastructure development for cattle breeding farms and slaughtering sites.

Hindle forecast that Vietnam’s increasing demand for cattle imports will help stabilize prices on Australia’s cattle market.

Dragon International awarded US$100 billion projects

Ho Tram Tourism Company of Vietnam on March 23 announced the selection of Dragon Best International – a Hong Kong-based firm – as the contractor for three premier projects.

This was announced by Ho Tram Company Director General Nguyen Quoc Long, saying the projects worth US$100 billion will be implemented following the public private partnership (PPP) model.

The first project aims to construct a trade complex that includes hotels, residential areas, and an international convention hall on 58 ha in Ho Chi Minh City at an estimated cost of US$32 billion.

The second project is to develop an international eco-tourist resort on an area of 1,595 ha in Xuyen Moc district of southern Ba Ria-Vung Tau province, with a total investment of US$18 billion.

In addition, Ho Tram and Dragon Best International have also contracted to construct a US$50 billion project in the Bo Y border economic zone in the Vietnam-Lao-Cambodia development triangle.

The three above projects had previously been given the green light to proceed by the Government.

Local firms to lead drug market

The latest development plan for the pharmaceutical industry sets ambitious targets that can create growth opportunities, but could also prove difficult for local firms to achieve, experts say.

They told Viet Nam News that the plan's feasibility would depend on follow up support policies from the Government.

A prominent target in the plan is to have medicines made in Viet Nam to account for 80 per cent of the nation's consumption by 2020.

The plan also targets having 30 per cent of the locally made drugs use traditional materials.

The "National Strategy for Pharmaceutical Industry Development till 2020 with a vision to 2030" was approved recently by the Prime Minister.

Other targets include ensuring 100 per cent supply of medicines needed to prevent and treat diseases, and meeting 20 per cent of materials demand for locally produced medicine.

The plan also seeks to have locally-made vaccines meet the needs of the National Expanded Programme for Immunisation as also 30 per cent of the demand for paid vaccinations.

Officials say the plan is a positive one for the domestic pharmaceutical industry as also disadvantaged sections of the society, especially the poor and people living in remote and mountainous areas.

"The strategy aims to provide sufficient, safe medicines at reasonable prices to meet the country's demand for disease prevention and treatment," Truong Quoc Cuong, director of the health ministry's Drug Administration of Viet Nam, told Viet Nam News.

"Priority would be given to supply medicines for social welfare policy beneficiaries, ethnic minorities and poor people in mountainous and remote areas," he said.

Cuong also said that the pharmaceutical law will be revised with a focus on encouraging the production and use of locally manufactured medicines through standardisation of trading rules and application of good practice standards.

Policies to promote research, production, import and export of essential medicines will be issued as part of the efforts to provide high-quality medicine at reasonable prices, he said.

Cuong said the country's pharmaceutical industry would be developed with a focus on production of generic medicines. Imported drugs would, step by step, be replaced by locally produced ones, he added.

"Policy priority will be given to the production, supply and use of generic medicines, specific drugs, vaccine and biological products and drugs from traditional medicine materials. Import of pharmaceutical materials and generic medicine would be limited for medicines produced in the country."

The Government will also support the use of locally manufactured medicine with funds from the State Budget and through health insurance schemes, he said.

Le Thuy Linh, a housewife in Ha Noi, said she was happy with what she had heard about the new plan because it would benefit many people, especially those in rural areas.

"I hope that everybody will be provided sufficient medicines at reasonable prices and with good quality instead of imported ones at cut-throat prices," she said.

Several pharmaceutical experts said that some targets mentioned in the plan would be difficult to achieve.

They said an increase of more than 30 per cent in the country's total medicine consumption within the next seven years presents a tall order for local drug companies.

Local firms would find it tough to expand their market share, increase product quality, establish trademarks and compete against imported products, the experts said.

The Health Ministry has acknowledged that the local pharmaceutical industry faces a lot of disadvantages in competing with foreign companies because of modest capital resources at their disposal, a shortage of pharmacists and outdated technology.

Studies have also noted that domestic investment in pharmaceutical research and development is miniscule and medicines are mostly produced using imported materials.

Industry insiders are ambivalent about the strategy, with some skeptical about its feasibility and others optimistic about development opportunities.

Traphaco JSC General Director and Chairwoman Vu Thi Thuan told Viet Nam News that the strategy would boost development of local firms thanks to the Government's support in terms of policy and financial resources.

"International experience shows that there is no country except Switzerland, where locally manufactured medicines dominate imported ones," she said.

Thuan also said that consumers would decide the fate of the strategy through the choices they make.

"Success of the strategy would depend on a change in Vietnamese people's awareness and belief in local medicine which, in turn, would depend on the success or failure of the programme encouraging Vietnamese people to use drugs made in the country."

Chairman and CEO of the Hau Giang Pharmaceutical Company, Pham Thi Viet Nga, said that the strategy was a very good sign for local pharmaceutical firms.

"However, its feasibility would depend much on the government's future policies for supporting local drug firms in competing with foreign companies," she said.

Nga said local pharmaceutical firms have the daunting challenges of the people's lack of confidence in locally manufactured medicine and unfair competition between themselves. The Government also limits local firms' spending on promotion, she said.

Cuong of the Drug Administration of Viet Nam agreed that implementing the strategy effectively would be a challenging task, especially in the perfecting of mechanisms, policies and master plans so that achievements can be sustained and investment in the industry increased.

The country also faced a shortage of human resources and the limited investment and research capabilities of local firms, he said.

Health Ministry statistics show that Viet Nam currently has 121 western medicine manufacture factories and 17 making traditional medicines that have met the World Health Organisation's Good Manufacturing Practice (GMP) standards.

In 2012, the value of locally manufactured medicines made up 46 per cent of the nation's total consumption.

"They (local drug firms) would have to work hard to increase output in order to account for 80 per cent of the country's total medicine consumption and 100 per cent of vaccines for the immunisation programme," Cuong said.

He said planners had made an effort to ensure that the strategy's targets, solutions and measures were realistic, adding that although it would take a lot of effort, they were achievable.

Ben Tre enlarges specialty grapefruit area for export

Foreign demand for green-peel grapefruit hailing from the Mekong Delta province of Ben Tre is growing, and domestic businesses are working with managerial agencies to take advantage.

Dam Van Hung, Vice Chairman of the Ben Tre Green-peel Grapefruit Association, said the product has been exported to Germany, Canada, Ukraine, China, Singapore and the Philippines.

However, the output of grapefruit meeting Global Good Agricultural Practice and Vietnam Good Agricultural Practice (VietGAP) standards remains modest – standing at about 100 hectares of total 4,000.

Satisfying such requirements is compulsory for exports, Hung noted.

To ease the problem, in the short term, the business circle and the provincial Department of Agriculture and Rural Development plan to cultivate 200 hectares of green-peel grapefruit following VietGAP standards.

The harvested products will be bought at prices that are 5-10 percent higher than market prices, Hung said.

Ben Tre ranks first in terms of its green-peel grapefruit area and output in Vietnam. The product is being sold at 35,000 – 40,000 VND (1.7 – 1.9 USD) per kilogramme in the locality.-

An Giang boosts cooperation with Japan

Officials of southern An Giang province and agricultural experts from Japan have shared experience in managing credit systems and input materials for co-operatives.

At a March 21 working session between local officials and a delegation from the Central Union of Agricultural Co-operatives (JA-Zenchu), Vice Chairman of the provincial People’s Committee Huynh The Nang briefed the guests on the local agricultural production.

Particularly, the province has shipped its products to 139 countries around the world, with an annual volume of 500,000 tonnes of rice and 100,000 tonnes of fish.

As many as 83 co-operatives in the locality have helped meet its key importers’ demand for farm produce.

JA-Zenchu President Hitomi Narikiyo said his union is willing to aid An Giang in managing its co-operatives, internal credit systems and farm produce tracking.

Since 1997, the Japan International Cooperation Agency (JICA) has supported the Mekong Delta province implement 20 projects valued at 31 billion VND (1.46 million USD) in the fields of health, education, clean water, environmental sanitation and especially rice export.

Lao Cai aims to drive northwestern development

The mountainous province of Lao Cai continues to prioritise tourism, cross-border trade, and economic integration in its bid to become the hub of the northwestern region.

The locality has been working to perfect facilities developing the Lao Cai Border Gate Economic Zone, which covers nearly 8,000 ha.

A total of 4 trillion VND (188 million USD) has been poured into key infrastructure projects such as Kim Thanh Bridge linking Lao Cai city and the Chinese district of Hekou, and the Kim Thanh Commercial and Industrial Centre.

Cross-border trade growth will be further boosted once the construction of the Noi Bai-Lao Cai Highway and the upgrade of the Hanoi-Lao Cai Railway are completed.

As part of the Kunming -Lao Cai-Hanoi-Hai Phong economic corridor, the province serves as a gateway connecting the domestic market with ASEAN and the southwestern region of China.

Last year, cross-border trade turnover with China reached 2 billion USD, including 1.338 trillion USD from exports, a year-on-year surge of 170 percent.

According to reports released by the management board of Lao Cai’s border gates, 521 businesses registered to fulfil customs formalities there. Key exports included minerals, agro-forestry products, footwear and furniture.

Lao Cai will continue to tap its favourable waterway, rail and road links in order to further enhance cross-border trade, turning it into an important driving force in the development of the northwestern region.

EVN works to meet southern need for power

The Electricity of Vietnam (EVN) is taking all possible measures to ensure a stable power supply for the south with the dry season in the region climbing to its peak.

EVN Southern Power Company (SPC) Deputy General Director Pham Ngoc Le pointed out that only two turbines of the Vinh Tan No. 2 thermal power plant will become operational in the south this year, with a total capacity of 1,200 MW.

Meanwhile, power grids in regional provinces such as Binh Duong, Binh Thuan, Ba Ria-Vung Tau, Dong Nai and Long An are overloaded while the construction of some 220kV substations and lines is lagging behind schedule.

The EVN said to satisfy the south’s power demand in 2014, particularly during the dry season peak in April and May, the group will quicken work on such major thermal power plants as Duyen Hai 1, Duyen Hai 3, Vinh Tan 2 and Vinh Tan 4.

It has also assigned the Southern Grid Company to overhaul the 110kV grid’s operation, and told other subsidiaries to check electricity demand and prioritise anti-drought and disease prevention activities along with political and social events.

They have also been asked to make full use of small-scaled hydropower plants in southern Binh Phuoc, Ba Ria-Vung Tau, Soc Trang and Tay Ninh provinces and the neighbouring central and Central Highlands localities of Ninh Thuan and Lam Dong.

Additionally, Prime Minister Nguyen Tan Dung has ordered the power sector to swiftly complete north-south transmission lines. Those linking Pleiku, My Phuoc and Cau Bong and Vinh Tan, Song May and Tan Dinh are of particular importance to tackle the power problem.-

Phu Yen province calls for investment to agriculture

The central province of Phu Yen has called for investment totalling 5 trillion VND (227 million USD) to four projects in agriculture and fishery in the 2014-2020 period, a leading local official has said.

The projects cover the processing and exporting of tuna, fishery logistic service centres, salt-making zones, and high-tech agricultural facilities, said Pham Dinh Cu, chairman of the provincial People’s Committee.

Valid for 50 years, they will enjoy such incentives as lower land rent and corporate income tax.-

High risks of mobile cyber attacks in Vietnam

The risks of hackers attacking mobile devices in Vietnam are increasing alongside the rising popularity of smart gadgets such as smart phones or tablets being used in the country, said an international security firm.

In a report concerning cyber security released at Security World 2014 held in Hanoi on March 19, Trend Micro said that Vietnam ranks third out of ten countries with the most virus-infected applications downloaded for Android operating system.

The workshop was organized by the Ministry of Public Security’s General Department of Technology, Vietnam Computer Emergency Response Team (VNCERT), the Center for Technology and Cyber-Security Surveillance and International Data Group (IDG).

Trend Micro noted that Android now is available in many smart devices of Samsung, Asus and others.

Vietnam has seen a fast growing number of individuals and institutions using smart phones to access the Internet. As such, they are likely to suffer a lot from online attacks.

Experts from Cisco and Huawei referred to a series of cyber attacks in the world causing heavy damages to call on Vietnam must set out policies to invest more in security.

Statistics by IDG showed that spending on information technology in Vietnam will grow by 15% and is estimated to reach more than US$13 billion this year. Investments in information security are also likely to rise, the group added.

Vietnam bond issues grow fastest in East Asia

Vietnam took the lead in bond issue value growth among emerging markets in East Asia in the fourth quarter of 2013, according to a quarterly report on the Asian bond market released by the Asian Development Bank (ADB) on March 20.

The market set a new record with the highest growth rate of 14.8%, reaching US$29 billion. The government bond market increased 15.4% to US$28 billion while the corporate bond market fell 6.8% to US$700 million, the lowest in four years.

ADB noted the real size of the corporate bond market might be larger than the figure as a volume of bonds was traded privately between enterprises and banks.

However, the amount of bonds of Vietnam was still smaller than regional countries.

According to the report, the government bond value of Thailand had amounted to US$124 billion as of the end of the fourth quarter, Malaysia US$58.5 billion, the Philippines US$88 billion and Singapore US$150 billion.

Northern apparel firms to benefit from Better Work

The Better Work program aiming to boost productivity and competitiveness of the apparel industry will be extended to the northern region after a quarter of southern enterprises have benefited from it.

Deputy Labor Minister Pham Minh Huan told the launch ceremony of Better Work Vietnam office in Hanoi on March 19 that as the country is pushing for international integration, made-in-Vietnam products must meet the requirements of customers in choosy markets such as the U.S., EU, and Canada among others

Accordingly, the program will provide textile and garment firms with three integrated service packages to make their working environment more suitable to demands of importers. These include assessing and setting up database on factory conditions, giving information and advice on improvement and technology, and offering guidelines and training on essential affairs.

In the next five years, the program is also expected to extend its assistance to footwear and leather industry due to fast growing demands from foreign companies and clients.

The Better Work initiative has approached nearly 300,000 workers in 200 plants, mainly in the southern region, equivalent to a quarter of the total number of factories in Vietnam since it first came up in 2009. Additionally, more than 50 international clients have registered for this program.

Chief of International Labor Organization (ILO) in Vietnam Gyorgy Sziraczki noted the program can help Vietnam win more orders in the textile and garment industry from importing countries.

Vietnam can make a difference in international markets because of its low labor costs, respect for workers’ voice, improvement in the work environment and productivity enhancement, he added.

Assessments of Better Work Vietnam indicate the stable growth in participating plants. There were three out of five have increased their workforces while as much as 65% of them have raised their sales and 75% earned more orders.

Viet Tien tops apparel industry

The Ministry of Industry and Trade in collaboration with the Vietnam Textile and Apparel Association (VITAS) on March 20 announced winners of the eighth Typical Enterprises Awards in the textile and garment industry program.

Viet Tien Garment Joint Stock Corporation (Viet Tien) and Dong Xuan Knitting Company topped the list of winners for the 2010-2013 period.

Le Tien Truong, vice chair of VITAS and deputy general director of the Vietnam National Textile and Garment Group (VINATEX), said Viet Tien has met criteria on business efficiency, competitiveness, and export growth.

The company heaps praise for ensuring a good working environment such as eight-hour work per day, average salary at VND6 million in HCMC and VND5.5 million in other areas.

Other top apparel enterprises winning the awards also include Dong Xuan Knitting Company, Phong Phu Home Textile Joint Stock Company, Thanh Cong Textile-Garment Investment Trading Joint Stock Company and Hue Textile Garment Joint Stock Company, and Corporation No. 18.

The award program is an annual event jointly organized by the Ministry of Industry and Trade, Vietnam’s Chamber of Commerce and Industry and VITAS. In order to guarantee continuous and sustainable development, the results are based on three years of operation.

The award ceremony is scheduled for March 24 at Hanoi’s Opera House.

Realty inventory drops nearly 2%

The domestic property market saw its inventory decreasing by VND1.77 trillion, or some 1.87%, in the first two months this year, the Ministry of Construction said in a report just submitted to the Government.

Statistics from the ministry show that the total value of realty inventory reached VND94.5 trillion, or US$4.5 billion, at the end of 2013. Now it has dropped to VND92.69 trillion by February 25, 2014.

The backlog of housing land represented the largest proportion, at VND33.88 trillion worth of over 9.1 million square meters, while land for commercial facilities accounted for VND6.2 trillion worth of over two million square meters. The number of unsold apartments and houses was recorded at 19,210 units worth some VND28.58 trillion, and 13,516 units worth VND24.03 trillion respectively.

By February 25 this year, the total inventory in Hanoi and HCMC reached VND12.6 trillion and VND16.71 trillion, falling by VND369 billion and VND755 billion respectively compared to end-2013.

Concerning the results of the VND30-trillion housing loan program, Minister of Construction Trinh Dinh Dung said banks have pledged to loan 3,048 clients a total of VND2.9 trillion. Outstanding loans of VND1,322 billion have been disbursed to 3,023 of them, a rise of 64% against end-2013.

Even though the property market is in a slight recovery, it is still mired in difficulties such as high inventory, lack of synchronous infrastructure, high costs for the locals’ income, and unfinished projects.

In order to tackle the issues, the ministry has recommended the Prime Minister to amend regulations related to the VND30-trillion package. Payment will be extended to 15 years instead of 10 for individuals.

Those who live in frequently disaster-prone areas in the coastal central region should also get access to loans with interest rates of 4%.

Based on the State Bank of Vietnam’s suggestion, some other commercial banks should be permitted to join the VND30-trillion package apart from the initial five banks chosen and approved by the Government, the ministry added.

Clean vegetables account for little in market

The program to grow clean vegetables has been launched for ten years but the product now accounts for only 7-8% of the total vegetables output in the market due to consumers’ confusion over what products are really clean, said the agriculture ministry.

Nguyen Thi Xuan Thu, deputy minister of agriculture, said at a seminar in Hanoi on Tuesday that after ten years, the area under clean vegetables cultivation accounts for only 1-2% of the total in the country.

Growing clean vegetables now faces many difficulties, especially in the procedure of getting certificates, building brand names, the process of monitoring, testing and distributing the products, Thu said at the seminar on Vietnam’s standards Good Agriculture Practice, or VietGAP.

“It is now hard to distinguish between clean vegetables that are certified with those that are not, and customers have lost their faith and walked away from the product although they are still willing to pay higher for the qualified one,” she said.

Nguyen Thi Kim Oanh, head of business of the Hanoi Safety Food and Vegetable Trading Floor, said due to shortcomings in management, the vegetables market in Hanoi and Vietnam in general is now very confusing.

It is almost out of control to manage the origin and quality of vegetables in the market, even with those sold in supermarkets where quality is usually better assured, said Oanh.

“The situation has caused customers to lose their faith, and when a clean vegetables producer presents their product, even with guarantee for its quality, they still don’t believe it,” she said.

“Demand for clean vegetables which meet VietGAP standards is still large, but the number of VietGAP vegetables produced and sold in the market is small, and farms that grow vegetables following the standards have not developed as being expected,” she said.

The head of the Dai Lan Cooperative in Hanoi City’s Thanh Tri District said his cooperative now has more than 20 hectares of land growing clean vegetables observing VietGAP standards but is facing many difficulties in distribution and consumption.

Dealers signed contracts to buy clean vegetables but just cooperated for 1-2 months and quitted due to low consumption as prices of vegetables produced by his cooperative are 15-20% higher than prices for normal veggies.

HCM City boosts price stabilization

The amount of some major products including milk, education products and essential food items under the city’s price stabilization program will increase by 25-30% this year compared to 2012, according to the city’s Department of Trade and Industry.

In its draft program just submitted to the city government approval, the department says the volume of such products will account for a big market share. The price stabilization program is carried out in the city from April 1, 2014 to March 31, 2015.

For milk, participating enterprises have pledged to keep prices stable unless input costs change sharply by 5% to 10%. They will supply various types of milk amounting to 2,787 tons for this year, up 26.3% over last year and accounting for some 40% of the demand in the city.

Essential food items listed in the program this year include nine groups of products. They are rice and instant noodles, sugar, cooking oil, meat and egg, processed food, vegetables and seafood.

The amount of those food items increases by 30-35% over last year and accounts for 25-30% of the demand.

Normally, prices of those products in the price stabilization program will be lower than market prices by 5-10%. In the month ahead of the Lunar New Year, or Tet, these products should account for 30-40% of the market demand.

Three groups of education products in the price stabilization are notebooks, school bags and uniforms. These products will make up 32.9-65.4% of demand with prices some 10-15% lower than market prices.

As regulated, enterprises selling stable price products are only allowed to raise prices upon approval of the city authorities when there is a surge in input costs.

This year, the city’s stabilization price program continues to use soft loans supplied by participating banks instead of using the city’s budget.

The number of companies and banks joining the program, which is also open to enterprises outside HCMC, is expected to be higher than that of last year.

Enterprises advised to prepare for FTA with EU

Speakers at a seminar in Hanoi on March 20 urged enterprises to quickly prepare themselves for the new opportunities to be ushered in by the free trade agreement (FTA) between Vietnam and the European Union (EU) which will be concluded this year.

When the pact takes effect, there will be over 90% of Vietnam’s products exported to the EU enjoying zero tax and trade flows between the two sides will increase by 30-40%, they said at the seminar on Belgium’s Wallonie region in Hanoi.

Enterprises should proactively learn about benefits and relevant information from the Vietnam Chamber of Commerce and Industry as well as from partners like the Wallonie Delegation and the Belgian Embassy to Vietnam, they said, adding the Belgian region can act as a gateway to the European market for Vietnamese firms.

Le Ky Anh, trade and economic officer at the Delegation of the EU to Vietnam, said Vietnam and the EU have set a target to conclude negotiations on the trade pact in October when Prime Minister Nguyen Tan Dung visits Europe and attends the Asia-Europe Meeting. Nevertheless, it seems that enterprises do not know much about benefits of the FTA.

Anh said that the current tax rates Vietnam is enjoying mainly originate from the Generalized System of Preferences (GSP) the EU unilaterally offers to Vietnam. However, when Vietnam’s economy grows to a certain level and is more competitive, the EU will gradually remove such incentives.

FTA will bring better market access and more incentives compared to GSP with the zero tax rate on at least 90% of the products, Anh stressed.

According to the EU Delegation to Vietnam, trade flows between Vietnam and the EU will rise by 30-40%. Besides, the EU has surpassed the U.S. to become Vietnam’s biggest importer, accounting for an average of 20% of Vietnam’s total exports.

Goods benefiting the most from FTA are Vietnam’s traditional products such as farm produce, apparels, footwear and seafood products.

Once FTA becomes effective, a strong flow of investment from the EU will also run into Vietnam and domestic enterprises can benefit from advanced technology and huge capital sources.

Besides, the EU’s target is not only in the Vietnamese market but also in ASEAN and if the FTA is signed, it means the EU finds a place for boosting production activities.

“If goods made in Vietnam can enjoy incentives when exported to the EU, other investors in ASEAN will think of Vietnam as a new production base,” he added.

According to experts, these are visible and tangible benefits Vietnam can receive from the agreement.

The Belgian government plans to offer many incentives concerning land, capital and equipment to enterprises of ASEAN countries to open offices in the Wallonie region to get access to the EU market.

According to the Foreign Investment Agency, Vietnam has had 815 overseas investment projects with total registered capital of over US$18 billion, but 40 of them are in the EU market with US$110 million (1%).

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

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