Local food showcased in IFEX Philippines

A Vietnamese business delegation is attending the International Food Exhibition (IFEX) Philippines 2015 held in Manila from May 21-24.

Four businesses namely Vinamilk, Trung Nguyen Coffee, Trung Thanh Food and HOGANO are showcasing their products in four pavilions.

ViNa Gourmet Ville – Vietnam’s exclusive distributor of genuine savory food products in the Philippines is also displaying their products in six pavilions.

Vietnamese businesses introduced the Filipino and international visitors to Vietnam’s typical and unique products such as dairy and nutritional products, fruit juice, coffee, processed food including tomato, fish sauce, and supplementary food.

Master Chef Vietnam 2014 Hoang Minh Nhat joined the event and prepared Vietnamese dishes to serve visitors.

After visiting the Vietnamese pavilions, Vietnamese ambassador in the Philippines Truong Trieu Duong affirmed that the Vietnamese embassy in the Philippines will further help Vietnamese businesses survey the Philippine market and taste of local consumers to improve their product quality.

The four-day event was organised by the Philippine Department of Trade and Industry (DTI) to mark APEC 2015 Philippines.

 Ho Chi Minh City fosters trade ties with Japanese region

Ho Chi Minh City hopes to receive more foreign investors in the support industry, said Vice Chairman of the municipal People’s Committee Tat Thanh Cang.

During a reception for Director of the Bureau of Economy, Trade and Industry of Japan’s Kansai region Seki Soichiro in Ho Chi Minh City on May 21, Cang expressed his hope that the cooperative ties between the two localities will be consolidated.

The city has established a mission to implement the localities’ agreements signed in 2014, Cang elaborated.

He praised the Japanese Enterprises Association’s membership expansion, with 100 members more in HCM City in 2014, as a reflection of Japanese investors’ increasing interests in the city.

The city has developed the Vietnam-Japan Technology in the Hiep Phuoc Industrial Zone and plans to expand it to lure more Japanese investment, Cang said.

For his part, Seki Soichiro highly valued the active support the municipal authorities have continuously provided for Japanese enterprises operating in the city.

He also noted possible cooperation between Kansai enterprises and the city in waste treatment.

Earlier on May 20, the Bureau of Economy, Trade and Industry of Japan’s Kansai region signed an economic cooperation framework agreement with southern Dong Nai province, with a focus on links in support industry.

Business operation will be facilitated in Vietnam and Japan through an extended economic cooperation framework agreement between Vietnam’s Ministry of Industry and Trade and the Kansai Bureau of Economy, Trade and Industry, as determined on May 19.

In the first eight months of 2014, Vietnam saw a trade surplus of nearly 1.86 billion USD from exports to Japan. The country’s imports from Japan hit 7.88 billion USD with the majority in machinery equipment, computers, electronics, steel products and plastic.

Bac Ninh, Hai Duong foster dialogue with foreign firms

Authorities in northern Bac Ninh province pledged to create a more transparent and favourable investment environment for international businesses, particularly companies from the Republic of Korea (RoK), to operate in the locality effectively.

This commitment was made during a dialogue held in the locality on May 21 between representatives of the local Department of Taxation, other relevant bodies and more than 60 RoK businesses that are active in the locality.

Nguyen Van Hai, Head of the provincial Department of Taxation, affirmed that his agency will hold regular meetings with international firms, while providing them with up-to-date information on new tax regulations.

Representatives of the RoK enterprises requested easier tax and customs procedures. They also asked questions related to investment incentives and the detailed regulations on value added tax, among others.

According to the Vice Chairman of the Provincial People’s Committee, Nguyen Luong Thanh, Bac Ninh is home to 346 RoK-invested projects with a total capital of US$4.95 billion, concentrated in the industrial parks Yen Phong, Que Vo, VSIP, Tien Son, and Thuan Thanh.

RoK businesses, mainly operating in electronics, the processing and support industry, and manufacturing, boost the locality’s socio-economic development and significantly contribute to the province’s budget.

On the same day as the dialogue in Bac Ninh, a similar event was held in the northern province of Hai Duong, with the participation of 120 domestic and international firms operating in the locality.

Participants discussed policies and issues related to the laws on labour, insurance and the management of international employees.

Hai Duong is currently pursuing administrative reform, simplifying investment procedures and increasing management in a bid to attract an investment capital of US$200 million in 2015.

Close to 300 foreign-invested projects from 24 countries and territories are operating in the province, generating over 140,000 jobs.

Peugeot's Chinese JV to start production in Vietnam

French automaker PSA Peugeot Citroen and its Chinese joint venture partner Dongfeng Motor Group will open an assembly plant in Vietnam and have already begun production in Malaysia, Chinese state media has reported.

Dongfeng Peugeout Citroen Automobile is producing compact cars in cooperation with local firm Naza Group in Malaysia and plans to begin assembling in Vietnam later this year in partnership with THACO Group, according to the official Xinhua news agency.

Employees work at a production line of a Dongfeng Peugeot Citroen Automobile factory in Wuhan, Hubei province, February 13, 2014.

Officials at Peugeot and Dongfeng did not immediately respond to Reuters' requests for comment.

Last year, Peugeot and Dongfeng agreed on a 3 billion euro (US$3.34 billion) capital tie-up, giving the French carmaker much needed funding to turn its business around.

The two firms also agreed that their China JV would aim to sell 1.5 million vehicles a year starting in 2020, as well as consider setting up a new company responsible for sales in the Asia-Pacific region, especially in Southeast Asia.

More loans needed despite rising debt

Vietnam will have to borrow more to fuel growth though public debt has almost reached the safe threshold of 65% of gross domestic product (GDP), according to the Ministry of Finance.

Truong Hung Long, head of the ministry’s Department of Debt Management and External Finance, told a media briefing in Hanoi yesterday that public debt has approached the ceiling approved by the National Assembly (NA).

“Due to limited resources, the country will have to borrow more to prop up growth,” Long said. “Therefore, a higher public debt ratio is unavoidable.”

However, Long did not reveal the current ratio of public debt.

Speaking at a conference on public investment planning for 2016-2020 in Hanoi in February, Minister of Planning and Investment Bui Quang Vinh said public debt could rise to 64.9% of GDP next year and that it would be difficult for the Government to issue more debt.

Therefore, Vinh said the possibility of raising the public debt ceiling was high. The Government will need to review regulations on public debt and suggest adjustments if necessary, he noted.

Vietnam should increase the cap on public debt if its solvency is viable, the minister said. He noted that 65% of GDP or higher is not as important as solvency.

According to the finance ministry’s report, Vietnam mobilized VND627.8 trillion last year, with more than 98% of the total already spent on infrastructure projects.

The Government’s direct debt payments are projected to inch up to 16.1% of total budget collections this year from 13.8% last year. The 2013 percentage was 15.2%.

The ratio is still lower than the 25% limit set in the nation’s public debt strategy, Long said.

However, a recent report of the NA’s Financial and Budgetary Committee showed the debt payment percentage has climbed to 31% of budget revenues this year, higher than the permissible level.

Nguyen Minh Tan, deputy head of the Department of State Budget, said the debt payment ratio is still lower than 25% of budget revenues when asked by the Daily about the matter.

“I will check up the 31% figure,” Tan said.

Long explained the 31% ratio includes the Government’s on-lending loans as 60% of loans go to the State budget and the remaining 40% is lent on.

The State budget does not directly pay for the on-lending deals as this is the duty of beneficiaries of these loans, Long said.

Long added that 80% of government debt is paid in Vietnam dong and the rest in the U.S. dollar.

The State budget is now facing rising pressure.

In 2015 alone, the value of Government bonds that fall due amounts to VND135 trillion, Minister of Finance Dinh Tien Dung told a meeting of the NA’s Standing Committee early this week.

Budget deficit rose to 6.6% of GDP in 2013, much higher than the ceiling of 5.3% of GDP. Last year’s State budget revenue exceeded the target by over VND80 trillion but this surplus amount has been used up.

Billions in bad loans resolved

The banking system has resolved roughly VND311.1 trillion (US$14.33 billion) of non-performing loans (NPLs) in 2012-14, accounting for 67 per cent of total NPLs reported in September 2012.

These results were recently reported by the State Bank of Viet Nam's governor, Nguyen Van Binh, to deputies of the National Assembly.

The ratio of NPLs had been reflected more accurately and transparently since late 2014, Binh said, adding that the NPL ratio had declined from 3.61 per cent in late 2013 to 3.25 per cent in late 2014.

Though the NPL ratio inched up in the first two months of this year to 3.59 per cent, it was still within the range of what was forecast, and had remained under control of the central bank, Binh said, explaining that NPLs often increased in the first months of the year, before declining sharply at the year end.

Binh said that the central bank would continuously instruct commercial banks and credit institutions to handle NPLs strictly through debt classifications and risk provisions in accordance with legal regulations.

The central bank has targeted to resolve at least 60 per cent of the total number of NPLs that they are supposed to handle in 2015 by June 30. Further, they have to transfer at least 75 per cent of the total debts that they assign for sale to the national debt dealer, Viet Nam Asset Management Company (VAMC), this year.

Additionally, the central bank is to take bold measures, including restrictions on profit sharing, to punish credit institutions and commercial banks whose NPLs are large and inactive.

VAMC chairman Nguyen Quoc Hung said that VAMC estimated that it had bought roughly VND40 trillion ($1.84 billion) of NPLs at their book value during the first five months of this year, out of VND80 trillion ($3.68 billion) planned for the entire year. More than 90 per cent of the debts bought by VAMC were mortgaged by real estate assets.

The VAMC's NPL purchase, to date, has been relatively smooth, Hung said, adding that all credit institutions, including State-owned commercial banks, had so far suggested they would sell their NPLs to VAMC.

The Bank for Investment and Development of Viet Nam (BIDV), to date this year, sold roughly VND3 trillion ($138.24 million) of its NPLs to VAMC, out of VND8 trillion ($368.66 million) planned for the entire year.

Vietinbank has also plans to sell roughly VND4 trillion ($184.33 million) of NPLs to VAMC this year, while Vietcombank expected VND1 trillion ($46.08 million) in NPLs to be sold to VAMC in the second quarter of this year.

Rural areas need banks, banks need rural areas

Viet Nam's banking activities are mostly performed in cities, and are largely not available in the countryside, where 70 per cent of the population lives.

Nguyen Toan Thang, deputy governor of the State Bank of Viet Nam (SBV), made this statement at the opening ceremony of the 17th Banking Viet Nam 2015 in Ha Noi yesterday.

He added that banks had not taken advantage of cross-border banking services based upon the growing activities in trade, education, training and tourism.

According to SBV, the proportion of people living in the countryside owning bank accounts reached 22 per cent by the end of 2013, lower than the average rate in neighbouring countries, such as Thailand, Malaysia and China. Some 20 per cent of residents in remote and rural areas own savings accounts, which is much lower than Thailand (70 per cent) and Malaysia (63 per cent).

Attending the event, Kaleem Chaudhry, Oracle's senior director of sales consulting in ASEAN, referred to the need to use large amounts of data in analysing banking.

Chaudhry said that before having such data, decisions were made based upon transaction data, but after the availability of this data, decisions are now based upon reviewing all data, including videos and images, documents, social data and machine-generated data.

Data could also be received by using multi-channel customer interactions and market data, location-based information, news and financial reports, and applying new metrics to pricing models, underwriting, trading strategies and fraud models.

As Chaudhry said, banks should set three priorities: complying with regulatory requirements, providing better customer service experience and increasing operational efficiencies.

The event, which concludes today, is a forum for discussions on information technology applications, and product and service development in the banking sector. Organised by the SBV and International Data Group (IDG), it is also part of a series of activities celebrating Viet Nam's Science and Technology Day (May 18).

Tan Cang - Hiep Phuoc seaport inaugurated in HCM City

Tan Cang - Hiep Phuoc seaport, which is capable of handling 50,000-70,000 DWT ships, was inaugurated in Nha Be district, Ho Chi Minh City on May 19.

Its construction, sprawling over 18.7ha, was divided into two phases at a total cost of 1.5 trillion VND (71.4 million USD).

With a 420-metre-long pier and a 253-metre-long dock for barges to handle 9 million tonnes of cargo per year, Tan Cang – Hiep Phuoc is projected to become a major trans-shipment port for goods from the southern industrial parks in Ho Chi Minh City and Mekong Delta provinces, and serve as a key shipping hub for Asian goods.

It also takes advantage of the Soai Rap channel to save transportation time and cost rather than sailing through Long Tau channel.

Start-up branding vital to success

Branding is one of the things start-ups should plan for before launch, a recent conference heard in Ho Chi Minh City.

Building a brand comprised many steps and start-ups needed to research the market they were about to enter and know their competition to come up with unique and distinctive branding measures, Dang Hoai An, marketing director of Microsoft MDS Vietnam, said.

Startups need to create "interesting story to tell". They need to think about how to make people believe their products better but more reasonable prices than existing products in the market, she said.

Le Trung Nam, General Director of the Hoa Thien Phu Pharmaceutical Joint Stock Company, said in 2009 his group had started operating with a capital of just 200 million VND (9,208 USD) and made a nutritional product to treat anorexia in children.

At that time there had been a myriad of nutritional products for children from large companies, but thanks to his company's awareness of customers' psychology and focus on the correct segment, it had been successful.

Today it was one of the leading pharmaceutical companies in manufacturing and distributing traditional medicines and functional foods.

Branding was an unceasing and long-term process for enterprises, he said.

The role of humans in building brands was extremely important, even more important than capital, he stressed.

To be a successful start-up, "You need to have three things: a unique idea, specific and detailed action plans, and a way to approach investors actively."

Dinh Van Loc, Chairman of Onnet Joint Stock Company, who began his business with an initial capital of less than 100 million VND (4,606 USD) and specialises in internet marketing, said clever usage of internet marketing tools helped promote brands.

Organised by the Business Start-up Support Centre in collaboration with the HCM City Young Businesspeople Association, the conference attracted more than 500 university students from the city.

It is part of a series of activities related to the 2015 Start-up Wheel competition, which aims to be a forum for young people to present innovative business start-up ideas and business strategies and mobilise funds for projects.

New Taiwanese motorbike factory opened in Vietnam

The Taiwanese motorbike producer Kymco Group officially opened its new 20 million USD factory at the Dai Dang Industrial Park in southern Binh Duong province on May 19.

As part of the group’s long-term strategy, the newly built factory is set to become a manufacturing centre supplying motorbikes and components to the entire Southeast Asia region and several European countries, such as Germany, France and Italy .

At the opening ceremony, Vice Chairman of the provincial People’s Committee, Tran Thanh Liem, spoke highly of the hi-tech project, which satisfied all local requirements for an investment.

Three new product lines were introduced to the public the same day, including Many S 50cc bikes suitable for young customers and the K-Pipe 125cc and Xciting 400 models.

Kymco Group has established two factories and a number of showrooms in Vietnam.

Vietnam attends Asia-Pacific Week Berlin 2015

The Asia-Pacific Week (APW) was launched in Berlin on May 18, attracting a number of high-profile officials from Germany and Asian-Pacific countries alongside representatives from German enterprises.

Attendees included Vietnamese Deputy Minister of Industry and Trade Tran Tuan Anh and Vietnamese Ambassador to Germany Nguyen Thi Hoang Anh.

Themed “Smart Cities”, the 10 th APW includes seminars, conferences, exhibitions and music concerts held at the Federal Foreign Office, CityCube Berlin and several local museums and universities.

Smart cities are cities that use digital technologies to enhance performance and well-being, reduce costs and resource consumption, and engage more effectively with its citizens. Key “smart” sectors include transport, energy, healthcare, water and waste.

Highlights will be the Embassy Day and the Business and Technology Conference. Embassy Day will provide a forum for diplomatic missions from the Asia-Pacific region to present their countries and market opportunities to German companies, while the latter event will discuss new business models, partnerships and financing for smart cities as well as propose strategies and technical solutions.

Representatives from embassies of Asia-Pacific nations were invited to tour the EUREF-Campus, one of the first smart cities in Berlin.

Organised since 1997, the APW has provided a forum to discuss important themes in business, politics, research-science, culture and society.

Since then, it has served as a platform for Vietnam to introduce its culture, landscapes and investment opportunities to international participants.

New bridge improves traffic flow in Phu Tho

The Hac Tri Bridge, part of the National Highway 2 which spans across the Lo River in northern Phu Tho province, became open to traffic on May 19.

The operation is expected to reduce traffic congestion in the locality, particularly during the Hung Kings Temple Festival held annually from the eight to the eleventh day of the third lunar month, honouring the legendary founders of the nation.

The six-lane bridge, built at a cost of more than 1.9 trillion VND (88.4 million USD), is 736.5 metres long and 24 metres wide. The construction started in November 2013 and was completed 6 months ahead of schedule.

The same day work began on the Viet Tri-Ba Vi Bridge linking Hanoi and Phu Tho. The bridge, worth 1.5 trillion VND (69.8 million USD), is 1,557 metres in length and 12 metres in width. Once operational, it will shorten the distance between the provincial Viet Tri city and Hanoi by 20 kilometres.

Media, press sign cooperation agreement with financial sector

The Ministry of Finance hoped media and press agencies would continue cooperating with the ministry to enhance communication and public budget management publicity, according to Minister Dinh Tien Dung.

Speaking at a ceremony to sign a media cooperation agreement among the Ministry and the Nhan Dan (People) newspaper, the Vietnam Television, the Vietnam News Agency and Radio The Voice of Vietnam, Dung hailed the effective and active contributions of the media and press, saying they have helped raise public awareness and understanding of relevant legal documents and policies.

He also highlighted four key publicity campaigns to be promoted by the media and press, including comprehensive measures to effectively implement fiscal policies and administrative reform, particularly in taxes, customs, and the state treasury.

Focus will also be dedicated to restructuring public investment and state-owned enterprises and improving management of public debt, energy and consumer-goods prices.

Under the agreement, the media and press are also to cover the financial sector’s activities, including events to mark the 70 th founding anniversary of the sector (August 28, 1945).

On behalf of the four press agencies, editor-in-chief of the Nhan Dan Newspaper Thuan Huu said they have highlighted the role and efforts of the ministry in stabilising the macro-economy, controlling inflation, ensuring social security and boosting production.

He also expressed his hope that the ministry and its bodies would facilitate access to the sector’s information for the media organisations, ultimately contributing to the nation’s reformation and development.

Vietnam leaps 5 steps ahead in travel and tourism competitive index

Vietnam has jumped five steps to claim the 75th seat of 141 countries in the 2014–2015 Travel and Tourism Competitiveness Index (TTCI) rankings, according to the World Economic Forum (WEF) report.

The biennial report is based on four criteria: tourism environment (Vietnam received 4.6/7 points), policies (3.7/7 points), infrastructure (2.9/7 points) and culture and natural resources (3.2/7 points).

The country’s tourism sector ranked 22 nd in price and 132nd in sustainable tourism development.

Although the rankings are relatively low, Vietnam has continuously moved up in the TTCI rankings; the country ranked 89th in 2009 and 80th in 2013.

The TTCI aims to address factors and policies to encourage development in the tourism sector in different countries around the world.

The top ten countries in the WEF’s TTCI rankings are Spain, France, Germany, the US, the UK, Switzerland, Australia, Italy, Japan and Canada.

Vietnam Exhibition Hall in Milan Expo 2015

Vo Trong Nghia Architects have designed and built the Vietnam Pavillion for the Milan Expo 2015, that will run from May 1 till October 31 in Italy.

The Milan Expo 2015 is a universal exposition at which participating countries will display their technology, innovation, culture, traditions, creativity and food, highlighting this year's theme: "Feeding the Planet, Energy for Life".

This year's Milan Expo motto has inspired the design team to bring back the power of living for urban people by providing food for their bodies and a positive outlook for their minds, which are equally important.

"Our proposal is to bring back the trees to the cityscape in order to share the importance of nature and regenerate living in harmony with nature," said architect Vo Trong Nghia.

The design team has set up a two-storey exhibition space at the centre of the pavilion, surrounded on all sides by water and framed by 25 bamboo structures.

Vietnamese cities such as Hanoi and Ho Chi Minh City are losing green areas, with less than one square metre per person.

The team said they wanted to tackle the problem by incorporating trees into their designs and buildings. Bamboo has been used in the construction of the pavillion, because it has a very rich and strong relationship with Vietnamese culture and life.

Hanoi's central business districts bounce back

After three years of grappling with competition from the West, office buildings in Hanoi's central business districts (CBDs) have upgraded, said CB Richard Ellis Vietnam Co. Ltd. (CBRE).

Over the past three years, companies moved "West" in search of better rents, so landlords in Hanoi's CBDs began feeling the pinch for the first time.

This saw fully-integrated commercial areas mushrooming in the West and an increasing office population boosting restaurants and related amenities. This eventually influenced rentals in the West, as buildings filled up and landlords became more bullish, according to CBRE.

To stem and reverse this flow, the market-savvy landlords of CBDs began renovating their aging facilities and started offering new and improved services while also bringing down rents.

Long-standing buildings such as Pacific Place, Hanoi Towers, and Central Building have upgraded their facilities and are providing not just better office space but also improved services with "lifestyle" and "wellness" facilities. These changes have retained as well attracted tenants to keep up with global trends in mobile office environments.

"Wellness is the impact that atmosphere, flexibility and mobility have on one's productivity," Nigel Smith, Managing Director of CBRE Office Agency Services, Asia, noted, adding that it's about not only having a coffee shop in a building's ground floor but also ensuring that the coffee shop provides free power supply for charging mobile phones.

With current CBD rental rates expected to remain stable at least until the end of 2015 and infrastructure development, such as the Metro system, well under way, office tenants are shifting back to town as they thoughtfully consider their real estate strategies for the next 5 to 10 years.

The asking rental of an average Grade A decentralised office building is now approximately 22 USD per square meter per month (it was 15 USD per square meter per month almost 5 years ago).

Meanwhile, the asking rent for offices in prime CBDs has remained considerably flat for the past 5 years; it hovers around 32-35 USD per square metre per month.

"Office tenants are planning to return or are already returning to CBDs as rentals in non-CBD areas have started going up," said Greg Ohan, Director of Office Services for CBRE Vietnam.

"We see office demand strengthening off the back of expected trade agreement ratifications such as the Trans Pacific Partnership and European Union Free Trade Agreement, as well as improved market conditions."

Nigel Smith, Managing Director of CBRE Office Agency Services, Asia, said, "This is a trend that is currently on in many markets such as Hong Kong and Bangkok, where major infrastructure projects have been developed."

International corporate and Vietnamese firms in the market today would use this "urban renaissance" to rethink their operational strategies and not just focus on bottom line as a means of operational efficiency, he said.

Already major international occupiers, including the Danish and Dutch Embassies, JICA, Ernst & Young and Itochu, have shifted from non-CBD areas back to CBDs.-

Seminar promotes German investment in Vietnam

Authorities and businesses from Vietnam and Germany gathered at a seminar on May 19 in Berlin, Germany to seek ways to promote German investment in the southeast Asian country.

Speaking at the opening of the seminar, Vietnamese Ambassador to Germany Nguyen Thi Hoang Anh attached significance to the event amid the 40th founding anniversary of diplomatic relations between the two nations.

She highlighted the space for the two nations to strengthen their cooperation and to fully tap the potential of the strategic partnership established in 2011.

Vietnam and Germany aim to achieve bilateral trade worth EUR10 billion, Anh said.

The Vietnamese Embassy in Germany will ensure its role as a bridge to connect the two nations and actively support bilateral cooperation, Anh affirmed.

Meanwhile, Deputy Minister of Industry and Trade Tran Tuan Anh, who led the Vietnamese delegation to the ongoing “Asia-Pacific Week” in Germany, underscored the two nations’ roles in the economy of the region and the world.

Vietnam has integrated into the global economy by actively playing a role in the World Trade Organisation (WTO), Asian free trade agreement (AFTA), accelerating the signing of other FTAs, and the Trans-Pacific Partnership (TPP), the minister said.

Vietnam will continuously improve its legal framework and administrative procedures opening up opportunities for German investors, particularly in vocational training, technology transference and human resource training and development, Anh added.

He highlighted Vietnam’s business climate with its stable macro economy, young labour force and consistent policies as advantages for international investors while hailing the contributions made by the two nations’ business communities in fostering their multilateral cooperation.

He also expressed his expectation for strong development in cooperation between Vietnam and Germany as well as other partners in the EU in the coming years.

Germany is currently the largest European trade partner of Vietnam with two-way trade reaching nearly 8 billion USD, accounting for over 20% of the total trade between Vietnam and the EU.

More than 300 German businesses have been licensed to operate in Vietnam with Siemens, Daimler, Adidas, Braun and Allianz as long-term operators in the country.

HCM City encourages Japanese investment

Ho Chi Minh City is committed to creating a favourable investment climate for foreign companies, said Tat Thanh Cang, Deputy Chairman of the municipal People’s Committee.

He made the remark during a reception for a Japanese delegation led by the new President of the Japanese Business Association in Ho Chi Minh City (JBAH) Tsutomu Sakagami on May 19.

Cang said HCM City encourages Japanese businesses to invest in services, transportation, high-tech agriculture, as well as the processing and support industries.

The city leader also spoke highly the contribution of JBAH in connecting the two countries’ businesses.

For his part, Tsutomu Sakagami appreciated the city’s efforts to create favorable conditions for operations of JBAH and Japanese businesses.

In the coming time, JBAH will organise a series of activities to further develop the businesses cooperation between the two countries, he added.

JBAH added 105 new members in 2014, bringing its total membership to 770 businesses.

Remittances to HCM City hit US$1.4 billion in four months

Vietnamese living abroad remitted around US$1.4 billion to HCM City in the first four months this year, 19.6% higher than last year’s same period.

Deputy Director of the State Bank of Vietnam's, HCMC branch, Nguyen Hoang Minh attributed the increase to the peak remittance season falling in mid-February. As usual, the Lunar New Year - the peak remittance season – is often in the fourth quarter of the previous year.

Foreign remittances sending to HCM City in recent years saw a growth of 8-10% annually. Minh forecast that this year they are likely to hit around US$5.3 billion – US$5.5 billion.

According to the Central Institute for Economic Management (CIEM), foreign remittances to Vietnam rose constantly over the last 4 years, from US$9 billion in 2011 to US$10 billion in 2012, US$11 billion in 2013 and US$12 billion in 2014.

Seafood growth to bounce back in mid-year

Since early this year, shrimp exports have dipped sharply and just reached nearly US$800 million in the first quarter, a fall of 28% against last year’s same period.

Traditional markets like the US, Japan and the EU all saw a drastic decline. However, it is forecast that export growth is likely to bounce back as from mid-year.

This situation can be attributed to the decreasing in shrimp import demands and fluctuation of exchange rates between the US dollar and other currencies.

The average export price dropped from US$12 to US$10 per kilo in February. In Japan, the economic difficulty and the devaluation of the Yen made shrimp imports from Vietnam fall sharply.

According to Vice President and Secretary General of the Vietnam Association of Seafood Exporters and Producers (VASEP) Nguyen Huu Dung, seafood exports often witness a decline in early months and gradually resume growth as from mid-year, particularly at year end.

Dung added that Vietnamese seafood products are now available in 165 countries and territories. Markets with robust growth for the first quarter included ASEAN and Mexico (more than 30%).

He asked businesses to diversify markets and products to avoid dependence on certain markets.

Vietnam investors ‘bullish’ on Indonesia

Indonesia – a kaleidoscope of culture and lifestyles – is now emerging as Southeast Asia’s largest economy creating many bright spots for Vietnamese investors in the fast moving consumer goods (FMCG) sector.

At a recent seminar held in HCM City addressing Indonesia’s integration into ASEAN, leading economists underscored the fact that its 253 million strong population and rising personal incomes are lifting millions into the middle class every year.

The FMCG sector they said represents the first items consumers in emerging markets spend more money on as their disposable incomes rise.

The sector includes products for which Vietnam businesses have strengths—such as fish, seafood, meat, poultry, rice, fruits, vegetables, dairy products, baked goods, alcohol, pre-packaged foods and soft drinks.

Ho Xuan Lam, deputy director of the International Trade Promotion Centre (ITPC) stressed that currently the Indonesian government has removed the import quota and duties on 38 different fruits and vegetables.

Both nations have been working collaboratively over recent times to enhance trade and investment Lam said and this May 15 the Vietnam Embassy in Indonesia is organizing a forum to promote agricultural exports.

Lam underscored the point that building strong brands is vital for Vietnam businesses seeking to gain a foothold in the market as Indonesian consumers are quite finicky and seem to attach more importance to brands than other nations in the region.

Donna Gultom, director of ASEAN Cooperation under Indonesia’s Ministry of Trade said Vietnamese businesses should thoroughly master the market regulations and insure they prepare export permits and provide a Certificate of Origin (CO) for their products.

She said businesses should also be sure to label their products in the Indonesian language and be cognizant of the fact that strict compliance with labelling on packaged foods and beverages is mandatory.

Nguyen Anh Ngoc, vice president of Vietnam-Indonesia Friendship Association in HCM City, said a local presence or cooperation with Indonesian firms is highly recommended and can help marketing efforts.

In particular Ngoc said it can help the Vietnamese business customize its product and adopt marketing campaigns that resonate with Indonesian shoppers and create a strong brand attachment.

While the Island of Java remains the heartland of commerce and retail, ample potential is waiting to be unlocked across the Indonesian archipelago. Second-tier cities such as Medan in North Sumatra or Makassar in South Sulawesi have witnessed a strong increase in business activity over the past several years.

The urbanization movement in Indonesia has also tended to promote new lifestyles, creating demand for products consumers may previously have considered unnecessary. This is a trend that is buoying sales of personal care products across Indonesia’s diverse consumer market.

The fact that urban families tend to have fewer children leaves more disposable income to be spent on non-essentials such as beauty products or even higher quality foodstuffs and parents normally spend more per child.

This has created a vast array of bright prospects for Vietnamese businesses selling premium-brand baby and childcare products to boost exports to Indonesia, a country with Asia’s second highest birth rate.

One FMCG category set to benefit from changing Indonesian lifestyles is infant formula milk which has seen sales increase by 9% per annum (Reuters). As more women in city environments are formally employed, they are finding it harder to maintain a breast-feeding regime and are therefore more ready to opt for commercial alternatives.

Transnational as well as domestic producers are investing heavily in new dairy plants to meet swelling demand such as Nestle and Fonterra in addition to Indofood Sukses Makmur who have a prominent presence in the market.

The upcoming ASEAN Economic Community (AEC) will see increasingly tight integration of local markets in the 10-nation bloc. The AEC, which is scheduled to be fully implemented by 2016, creates a unified market for goods and services, skilled labour, trade and investment.

For Indonesia’s FMCG sector, it will bring both challenges and opportunities. A market of 600 million people has obvious allure for consumer goods makers. Imports to Indonesia are set to become easier as tariff barriers fall, standards are harmonized and the AEC aims for closer integration with global trade.

Firms told to develop websites for mobiles

Firms are being urged to develop mobile websites, given the enormous potential of mobile e-commerce in Viet Nam, speakers said at a conference on Monday.

According to Le Duc Anh from the E-commerce and Information Technology Agency under the Ministry of Industry and Trade, mobile shopping is expected to grow rapidly, but firms must learn how to exploit the mobile shopping trend.

He cited statistics showing that 90 per cent of smartphone shoppers used their phones to search for information, including prices, and where to buy and look for promotions, while 19 per cent of smartphone shoppers made payments via smartphones, and 50 per cent of smartphone shoppers used their phones for at least 15 minutes per visit to websites.

The Viet Nam E-commerce Index 2014, released recently by the Viet Nam E-commerce Association (Vecom), also revealed that 36 per cent of the country's population owned smartphones.

There has been increasing mobile phone usage, with the percentage of daily internet access via smartphones reaching 76 per cent, which was much higher than the percentage of access through PCs and laptops, which stood at 59 per cent.

Meanwhile, just under 15 per cent of the nation's companies have developed mobile websites.

Those figures suggest the enormous untapped potential of mobile e-commerce in the country, though many firms remain indifferent to developing mobile websites, said deputy president of Vecom Nguyen Thanh Hung.

According to Hoang Anh Viet, a representative from Lingo, an online store, figures indicate that in 2012 90 per cent of the access to the company's website was conducted through desktop computers, but now that percentage has decreased to about 50 per cent, coupled with increasing mobile traffic, rising from 17 per cent in 2013 to 40 per cent.

"Mobile websites will be an indispensable trend," Viet stressed, adding that if firms did not redesign their websites, they would fail to keep pace with customer trends.

However, Viet revealed that only 23 per cent of online orders were conducted via mobile phones, as user experiences with mobile websites remained limited.

Meanwhile, Le Thiet Bao from Deca Company said that the loading speed of mobile websites must be optimised, as smartphone shoppers were becoming increasingly less patient.

Bao stressed the need for the development of mobile websites, as Google now gives a boost in search rankings to mobile-friendly sites.

Of note, the Ministry of Industry and Trade would soon issue a circular about the development of mobile e-commerce, said Anh.

Bridge to connect capital and Northwest

Work on the construction of a bridge connecting Ha Noi and Phu Tho Province over the Red River commenced yesterday morning, promising to boost the development of the region.

The bridge is expected to ease congestion on Highway 30, and spread Ha Noi's development momentum to Phu Tho and the whole Northwest region that the highway runs through, including Yen Bai and Lai Chau.

Construction is expected to take 18 months and cost VND1.46 trillion (US$66.67 million) under the build-operate-transfer (BOT) model.

The Viet Tri – Ba Vi Bridge will start in Ha Noi at Ba Vi District's Phu Cuong Commune and span to Viet Tri City's Tho Son Commune.

When the bridge is completed, the distance from central Ha Noi to Viet Tri City will be reduced by 20 km.

The 12m wide bridge will be 9.46km long and span 1.56km over the river.

A toll station will be set up to collect tolls for more than 21 years.

The builder is the Vietnamese company Phu My Group, based in Ha Noi.

FPT Corporation's profits up 23% in first four months

FPT Corporation (FPT) yesterday announced that the company recorded a net profit of VND585 billion (US$27 million) in the first four months of the year, an increase of 23 per cent over last year.

The company's pre-tax profit in the first four months increased by 14 per cent to VND884 billion ($40.9 million) over last year.

The company's earnings per share (EPS) also rose by 23 per cent to reach VND1,700.

In the first four months, FPT's combined revenue rose by 30 per cent over last year to VND12.6 trillion ($587 million), 107 per cent of this year's plan.

FPT set a total revenue target of VND39.6 trillion ($1.83 billion) for the year, an increase of 13 per cent and a pre-tax profit of VND2.85 trillion ($132 million), an increase of 16 per cent over last year.

FPT said that the growth of sales in the company's technology sector and distribution-retail sector was the major factor that helped FPT achieve such high profit and revenue.

The technology sector, in the last four months, recorded VND2 trillion ($96.5 million) in revenue and VND244 billion ($11.3 million) in pre-tax profit, an increase of 43 per cent and 35 per cent, respectively.

FPT's growing overseas branches was a key factor in FPT's growth. Its overseas business doubled in revenue to VND1.3 trillion ($60 million) in the last four months.

FPT is one of Viet Nam's leading conglomerates, with affiliates active in software outsourcing, telecommunications, property, education and financial services. Its market capitalisation last year was more than VND17.6 trillion, or $838 million.

State to hold 100% capital in MoF units

The State will still hold 100 per cent capital in State Capital Investment Company, Debts and Assets Trading Company, Vietnam Securities Depository Centre, and Vietnam Lottery Company.

This was stated in a recently issued Prime Minister's instruction on the restructuring and renovation of 100 per cent State-owned enterprises (SOEs), which are under the Ministry of Finance, during 2016-20.

The Prime Minister has so far also approved the equitisation plans of 19 out of 23 ministries, agencies, cities, provinces, and State-owned economic groups that have submitted their plans to him.

According to the Ministry of Finance, the country plans to equitise 289 SOEs this year. However, by the end of the first quarter, only 27 SOEs had launched their Initial Public Offerings and had withdrawn capital from non-core businesses.

According to experts, the reason for the slow progress of equitisation is that the period between the end of 2014 and early 2015 was the time that enterprises had to complete production and business plans to ensure income generation and solve other issues after one year of operation.

Besides, they said, the equitised enterprises are large and important corporations and economic groups, so their financial issues are complicated and will require more time to resolve.

The low percentage of the shares sold to investors are has not matched their market demand, they added.

To speed up the SOE equitisation, experts said that the Enterprise Reform and Development Steering Committee and ministries concerned with the equitisation of SOEs should complete mechanisms and policies needed to support and solve difficulties that come up in the equitisation process, besides supervising the enterprises in the process.

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