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BUSINESS IN BRIEF 2/6

Binh Duong remains attractive destination for FDI; BOT highway projects attract investors; Da Nang port to launch IPO in June; King Riches breaks ground on second facility;

Blue chips lead nationwide advances

Stocks extended gains on both exchanges last week with the two main stock indices advancing, led by blue chips.

On the HCM Stock Exchange, the VN-Index grew 3.79 per cent during the week, closing Friday at 562.02 points, while on the Ha Noi Stock Exchange, the HNX-Index climbed 1.64 per cent to end at 75.80 points.

Overall trading was sluggish on both markets, however, with the daily market volume on the HCM City exchange down slightly from the previous week, reaching more than 104 million shares worth nearly VND1.52 trillion (US$72 million) per session.

The figure on the Ha Noi exchange was 64.2 million shares, worth VND601.4 billion ($28.5 million) per day, down 8.3 per cent compared with the daily trading volume of the previous week.

Large-cap shares again supplied momentum. The biggest gainers included Vietcombank (VCB), Masan Group (MSN), Bao Viet Holdings (BVH) and VinGroup (VIC).

The VN30, tracking the top 30 shares by market value and liquidity on the southern market, rose 3.98 per cent to stand at 618 points.

In addition, hot penny stocks such as FLC Group (FLC), Duc Long Gia Lai Group (DLG), Viet Han Corp (VHG), Phu Thinh Metallurgy (PTK), Viet An Corp (AVF) and Huu Lien Asia Corp (HLA) continued to attract inflows of investment. These shares saw trades up to tens of millions of shares per session.

However, profit taking also increased. According to vietstock.vn, securities companies continuously sold shares in the first four sessions of the week, responsible for a net sell value of VND341.6 billion ($16.2 million).

"The selling pressure is getting higher as the market climbs, while smaller profit margins will make buyers more careful when purchasing at high prices," analysts of BIDV Securities Co commented in a note. "The market is likely to adjust down as it approaches a strong resistance level."

According to analysts of FPT Securities Co, many cautious investors are shifting investment to blue chips to avert risks.

"In our opinion, this is a positive move for the market in the short term as it will somewhat reduce the dominance of speculative psychology. However, the lack of supporting information will likely impede the market's growth," they said.

Foreign investors continued to collect shares in big volumes. They spent more than VND500 billion ($23.7 million) to buy shares last week, focusing on Masan Group (MSN), Sacombank (STB), PV Gas (GAS) and Bao Viet Holdings (BVH).

Binh Duong remains attractive destination for FDI

Around US$65 million of foreign direct investment (FDI) was poured into the southern province of Binh Duong in May, raising total FDI capital to the locality in the first five months of this year to US$815 million.

This is a positive sign which shows that investors retained confidence in the investment environment in the locality and Vietnam in general.

Binh Duong has so far lured 2,255 foreign-invested projects with a total value of about US$20 billion.

According to Director of the provincial Department of Planning and Investment, Mai Hung Dung, out of the US$65 million of FDI invested in Binh Duong in May, US$43 million was poured into local industrial parks.

Japan topped the list of foreign investors in Binh Duong during the period, followed by the Republic of Korea, Hong Kong (China) and Taiwan (China).

Dung said the local authorities granted investment licenses for eight new projects, three of which were from China, specialising in producing timber products.

The province was currently considering permission for another 13 projects, he added.

Hang Vay Chi, the owner of Viet Huong 1 and Viet Huong 2 industrial parks, said almost all investors still spoke highly of the province’s investment environment in spite of recent disturbances caused during demonstrations by workers and local people against China’s illegal act of placing its oil rig in Vietnam’s waters.

Following the provincial authorities’ moves to solve difficulties facing enterprises operating there, firms swiftly resumed their production and business, stabilising jobs for hundreds of thousands of employees.

Le Thanh Cung, Chairman of the provincial People’s Committee, said Binh Duong was making every effort to address difficulties facing businesses and would create more favourable conditions for them to operate effectively in the locality.

Green buildings: An architectural strategy to match Vietnam’s climate

A seminar introducing green building strategies in accordance with Vietnam’s different climate zones was opened in Hanoi on May 29 by German consultancy firm Fairventures Worldwide and Xella Baustoffe Vietnam.

At the conference, the issues of technical design were analysed by Vietnamese and foreign experts to derive suitable construction principles in accordance with the climatic conditions in each region of Vietnam and to achieve standards of green buildings to reduce their environmental impacts.

According to experts, green (or energy-efficient) building is innate to basic architectural principles such as building orientation on the site to optimise or diminish solar exposure, amount of natural light, natural ventilation and usage of building materials suited to the climate.

It could be achieved by using constructive sun protection methods, a double shell roof for shading and ventilation, or a better arrangement of windows. Architects may also increase the size of opening areas or use materials suitable for local climatic conditions such as bamboo.

Sebastian Wallenwien, an architect with Fairventures Worldwide, said that a project is considered to be green when it achieves efficient use of energy, water and other resources, while minimising the impacts of buildings on human health and reducing waste, pollution and environmental degradation.

Dr. Pham Ngoc Dang, chairman of the Green Building Council Vietnam and the Vietnam Association of Construction Engineering and Environment, said that green building is an integral part of urban and rural sustainable development.

Dr. Dang also introduced international delegates to Vietnam’s national strategy for developing green buildings by 2020, which covers the major issues of green buildings including environmentally sustainable building site planning and design; efficient use of energy, water, and materials; air quality inside the buildings; and waste minimisation.

Vietnam intends to step up its green building movement; 30% of newly built and renovated buildings using State funding are expected to qualify as green buildings by 2020, as are 10% of those using private funds. Those figures are expected to double by 2030.

BOT highway projects attract investors

Highway projects under a proposed build-operate-transfer model are scoring special attention from domestic and foreign investors.

Two weeks after being listed by the Ministry of Transport (MoT) among the projects to source investment under the build-operate-transfer (BOT) model, the Thai Nguyen-Cho Moi section of the new national highway 3 has come close to signing with investors.

The ‘almost’ is because the MoT has yet to give its final decision, but the consortium (consisting of Cienco 4 and Tuan Loc JSC) interested in the project have already submitted their proposal to the ministry and has shown to be financially capable and experienced in handling BOT transport projects.

As an extension of the Hanoi-Thai Nguyen highway, the Thai Nguyen-Cho Moi section, with a VND3.15 trillion ($150 million) investment, would be a 40.7km two-lane road.

Once completed, it would help shorten travel time from the northernmost areas of the country to Hanoi and vice versa.

With an investment ratio of around $2.5 million per kilometre, the project is affordable and would allow investors a reasonable timeframe to recoup their capital.

“If things go ahead as planned, the procedures to choose investors will be completed before August 3 to ensure building starts that month,” said the head of the MoT’s PPP Project Management Unit Nguyen Danh Huy.

Already, two highway projects – the Hoa Lac-Hoa Binh and Hanoi-Bac Giang – have reached a consensus between authorities and investors

The MoT’s Transport Engineering Design Incorporated (TEDI) is revising the plan for construction of the Ninh Binh-Thanh Hoa-Bai Vot expressway to scale it down from four lanes to two to attract BOT investors.

The MoT has also reportedly scaled down the scope of several other highway projects in the list of key transport infrastructure projects sourcing foreign direct investment to 2020 to shorten the time it takes investors to recoup capital.

“Investors are eager to involve in these highway projects thanks to their much improved feasibility after they were downscaled,” said Huy.

To ensure progress targets are achieved, Minister of Transport Dinh La Thang asked relevant authorities to hasten finalisation of standards for two lane highways to ensure consistency in application.

Authorities have also been asked to properly assess investors’ capacity and finance.

“The MoT must be sure it does not choose underperforming investors who will delay projects,” Thang said.

FDI businesses confident in Vietnam’s investment environment

Foreign enterprises remain confident the Vietnam Government is fully capable and will maintain security and safety for investors. Many have confirmed that they will continue investing in Vietnam.

The view was shared by representatives of FDI businesses in a meeting with the Vietnam Chamber of Commerce and Industry (VCCI) in HCM City on May 30.

The event aimed to exchange information and identify challenges FDI enterprises faces following recent social disturbances in the south, to help them stabilise operation.

Liu Mei Teh, Chairwoman of the Council of the Taiwanese Chambers of Commerce in Vietnam, recommended that the Vietnamese State should urge insurance companies to quickly value damages caused by extremists and compensate businesses because it directly affects their production.

Phua Koon Kee, vice president of the Singapore Business Group, suggested a more rapid response from relevant agencies to such future social disorders, and said the government should take more active steps to restore business confidence.

Other representatives asked the government to share financial burdens FDI businesses are shouldering in paying employees during day-offs. In Dong Nai, some companies required employees to work extra time to make up unpaid day-offs.

Vu Tien Loc, Chairman of the VCCI said that the chamber will cooperate with trade unions and authorities to provide sufficient information and guidance for employees. He assured FDI businesses that they believe in political stability in Vietnam and that they are provided with the best possible conditions to operate in the country.

King Riches breaks ground on second facility

The UK-based King Riches kicked off construction of a second footwear export manufacturing plant in Quang Ngai province on May 29.

The new factory will be erected on nearly 25.39ha at the Vietnam-Singapore Industrial Park (VSIP) in Tinh Phong village, Son Tinh district, at an estimated cost of US$30-50 million.

Under the first phase costing US$20 million, a workshop, and residential areas for workers and experts will be built. They are scheduled to be put into operation in May 2015.

The factory, the second of its kind in Vietnam, manufactures for world’s famous brands, such as Timberland, Clark, New Balance and Nike.

Since its operation at VISP Binh Duong in 1999, the first factory has constantly expanded and is now employing more than 9,000 workers.

King Riches Vietnam Director General, Mickey Chen revealed his trust in the Vietnamese Government, saying that the environmental investment and active support from VSIP management board were the pivotal reasons leading to the group’s decision to build the second factory in Vietnam.

King Riches is a subsidiary of the Hong Kong’s Kingmaker Footwear Group. It is listed on Hong Kong and Taiwan stock exchange.

RoK helps Vietnamese SMEs improve innovativeness

Vietnam and the Republic of Korea (RoK) on May 30 signed a memorandum of understanding to help Vietnamese small and medium enterprises (SMEs) raise competitiveness and productivity through innovation.

At the signing ceremony, representatives from the Vietnamese Ministry of Science and Technology, Korean Nemo Innovation Consulting Group, and Small and medium enterprise (SME) development agency of the RoK agreed that innovation is the driving force behind increased competiveness.

They also discussed the role that science and technology plays in the development of innovativeness along with a host of green environmentally friendly solutions and plans to improve productivity, high-quality services and global competitiveness for SMEs.

According to Deputy Minister of Science and Technology Tran Viet Thanh, a high number of cooperation projects in the field of science and technology between Vietnam and RoK have had positive results.

The event is part of an ASEM Eco-Innovation Consulting (ASEIC) Project for Vietnamese SMEs which aims to strengthen the green competitiveness of SMEs in ASEM member countries, especially in developing countries, by disseminating and utilising green management and technology in their business.

Viet Nam, Egypt need to improve trade links

The bilateral relations between Viet Nam and Egypt, especially in trade, investment and tourism, have failed to match the potential and expectations of the two nations.

Viet Nam's Ambassador to Egypt Dao Thanh Chung said this at a conference in Alexandria on Thursday. Although both sides have signed several cooperation agreements, many of them are yet to be implemented effectively, he said, adding that last year, the two-way trade totalled only US$240 million. The first quarter of this year also saw a modest $86 million-bilateral trade, with much of it coming from Vietnamese exports, he noted.

At the forum, which was attended by 20 Egyptian firms, Chung called on the business communities in the two nations to strengthen the exchange of information and cooperation opportunities for their mutual benefit.

He suggested that the firms should improve mutual trust and work more closely in removing obstacles in an attempt to increase bilateral trade to $500 million in the near future.

The ambassador said Viet Nam is a promising destination for Egyptian enterprises as it has a large and accessible market with a population of nearly 90 million.

He added that Egypt could export cotton, fertilisers, pharmaceuticals and chemicals to Viet Nam, while importing major Vietnamese goods such as agricultural products, seafood and commodities.

During the event, Vietnamese trade counsellor in Egypt Pham The Cuong also answered the questions of local businesses related to various areas, including agro-forestry and fisheries.

Both sides agreed to set up a link on the situation of the Vietnamese market on the website of the Alexandria Chamber of Commerce.

Business difficulties hinder establishment of new firms

Domestic businesses have continuously faced difficulties, resulting in the decrease in the number of newly established firms and a rise in the number of dissolved ones.

Data from the Ministry of Planning and Investment (MPI) showed that nearly 5,500 firms were set up in May, a decrease of more than 25 per cent over the previous month, and 6,713 firms completed the formalities for their dissolution or suspended their operations in the month, up 33 per cent over April.

However, in the first five months, the country saw the establishment of 31,200 new firms, with a total registered capital of more than VND173.6 trillion or US$8.07 billion, a 0.7 per cent increase in the number of businesses and a 11 per cent rise in registered capital year over year.

During the period, 27,800 businesses dissolved their operations, up 20 per cent year over year.

The ministry also reported that there are 1,100 businesses which are facing difficulties or are reviving their operations after suspending them.

To resolve the difficulties and obstacles facing businesses, the government last week asked the relevant agencies to work closely, practically and effectively, and to accelerate administrative reforms to create the most favourable conditions for business.

To help firms mobilise investment, the Ministry of Finance has been asked to improve the regulations on prioritising, exempting and reducing business income tax, while facilitating the streamlining of administrative procedures related to tax and customs.

The Government also asked the State Bank of Viet Nam to continue urging credit institutions to be proactive in meeting businesses and supplying capital to them, while encouraging commercial banks to apply methods of business confidence evaluation to extend opportunities on mortgage loans and adjust the high interest rates which were applied earlier.

It urged the MPI to complete the legal procedures to put in operation a recently established fund for developing small and medium enterprises as soon as possible.

The MPI should also work with the Viet Nam Chamber of Commerce and Industry to continue training human resources for the enterprises, prioritise the fields which use hi-tech, and encourage the enterprises to establish vocational training institutions or coordinate with the institutions in training and job creation, it said.

In addition, the Government also requested the Ministry of Industry and Trade to improve market management and competitive capability and to take drastic measures to address the problem of fake and low-quality goods, while boosting the support extended to local businesses to expand production and trade.

VEPR urges focus on economic reforms

Viet Nam should have strong changes in its economy in future, according to the economic report of the Viet Nam Centre for Economic and Policy Research (VEPR).

At a workshop on releasing the Vietnam Annual Economic Report 2014 on Thursday in Ha Noi, a representative of the VEPR stated that following the success of the previous reports, this year's report, titled "The Constraints to Growth," aims at exploring and reducing the constraints of Viet Nam's long-term economic growth. Those constraints require Viet Nam to have a strong focus on reforming the economy, renovating the economic growth model and figuring out a general socioeconomic model for Viet Nam in the future.

According to experts of the report, the country will continue to face challenges during the reformation process of its economy, including weakness of enterprises and not strong enough policies. Especially, this year, dispute between Viet Nam and China on East Sea will threaten economic relations between the two countries.

The VEPR noted that Viet Nam has imported material, equipment, machine and building services of energy and infrastructure constructions and also has exported various key agricultural products such as rubber, rice and fruits. Therefore, the dispute will have negative effects on their economic relations.

Under the report, experts expect Viet Nam's GDP growth to reduce to 4.15 per cent for low rate and to 4.88 per cent for high rate this year.

Meanwhile, the report estimates the national inflation to reduce to between 4.76 per cent and 5.51 per cent this year.

It pointed out that issues of Viet Nam's short and medium terms include choice of giving priority for policies on recovering economic growth and enterprise or for suitable monetary policies and control of macroeconomic stabilisation.

According to the experts, the government should not prolong the period of using credit package to rescue the domestic property market to avoid wrong expectations from the market.

The state should have a stable policy on foreign exchange rates for long term in the future to have positive effects in domestic production, they noted.

They added that in the current situation, Viet Nam should define economic and strategic partners to build long-term cooperation, including Japan, South Korea, Australia, India and ASEAN countries. Meanwhile, the country should reduce dependency on China in the trade sector.

Additionally, the state should create more favourable conditions for attracting more investment to the agricultural sector and developing sea economy.

The Viet Nam Annual Economic Report has been conducted since 2009. Its research results have been published as a series of annual reports in order to summarise major economic issues in the previous year, provide an economic outlook for the coming year and provide policy recommendations.

The report is a key product of Viet Nam National University's Strategic Research Programme called "Economic Theories and Macroeconomic Policy in the condition of International Economic Integration of Viet Nam."

The report is also part of the package of Independent Economic Assessments funded by the Australian Government's Department of Foreign Affairs and Trade for the period 2014–16.

"Support for the Annual Economic Report is one part of our broader partnership with the Government of Viet Nam and Vietnamese institutions to strengthen the enabling environment for economic growth," stated Ms Nadia Krivetz, Charge D'affaires, Australian Embassy in Ha Noi.

"Australia's support is designed to help the nation manage the challenges associated with the transition to a market economy and to avoid the problems faced by other countries that have fallen into a middle income trap."

Da Nang port to launch IPO in June

The Port of Da Nang , the largest in central Viet Nam, will sell over 8.3 million shares in its initial public offering (IPO) in Ha Noi on June 11.

According to the organiser Ha Noi Stock Exchange, the number of shares to be offered accounts for 12.57 per cent of the charter capital of the port. Each share is being offered at VND11,400 (US$0.54).

According to the port, until September 2013, the actual value of the state capital in the port was VND654.5billion ($31.16 million). According to the equitisation plan, the charter capital after the IPO of the port will be VND660 billion ($31.42 million), equivalent to 66 million shares, of which 75 per cent is expected to be state holdings.

The port's business results are reportedly good. Its revenue and profit after tax have grown in the last three years (2011-13). Accordingly, the revenue increased from VND307.9 billion to VND446.5 billion ($14.6million-21.2million) and the profit after tax rose from VND8.6 billion to VND44.9 billion ($409,000-2.1million), while the rate of return on equity also increased from 3.8 to 12.36 per cent in these last three years.

The port was established in 1976, and it has operated as a limited company under the ownership of the Viet Nam National Shipping Lines (Vinalines) since 2008.

With the two terminals of Tien Sa Port and Han River Port, Da Nang Port has a berth that stretches 1,493 metres, with the capacity to receive vessels of up to 45,000 tonnes. The port also has a convenient transportation system that connects with the airport and railway station.

With the advantage of geographic location, such as staying in the bay, covered by the Hai Van Pass and Son Tra peninsula and protected by the dyke system, Da Nang Port has been a perfect dock for boats and cargo throughout the year.

According to Viet Nam's seaport system development plan through to 2020, Da Nang Port has been confirmed as a major commercial port in the region, making it one of the key gateways to the East Sea from the Sub-Mekong Region. It serves cargo communication and encourages economic development and tourism of the provinces of Central Viet Nam, the Western Highlands of Viet Nam and Southern Laos, Northeast of Thailand, through the East-West Economic Corridor.

The national development plan also ranks Da Nang Port with a grade 1 port that is not only recognised at the national level but also acts as a regional hub and international gateway in the central region of Viet Nam.

Last April, the prime minister pushed for the privatisation of the country's major ports, including Hai Phong, Sai Gon, Quang Ninh, and Da Nang ports, with a directive that 25 per cent of the state's holdings in these ports should be made available to the public through IPOs, adding that it must be implemented within the year 2014. This is aimed at diversifying investment resources for the development of ports.

FLC Group expects profits of VND100 billion

FLC Group (FLC), listed on HCM City Exchange, expected its profit in the second quarter of this year to reach VND100 billion ($4.7 million).

This will push the total profit in the year's first half to VND144 billion ($6.8 million).

According to the Deputy Director of FLC Group Huong Tran Kieu Dung quoted by Dau Tu Chung Khoan (Securities Investment), the group's projects were now hastened in order to meet the deadlines, and coupled with other businesses, the goal of VND350 billion ($16.6 million) profit for the full year was achievable.

Recently, FLC Group planned to increase its charter capital to VND4.55 trillion ($216.6 million) through share issues and converting VND800 billion ($38 million) convertible bonds into shares.

KLF Global plans share issue to raise capital

KLF Global JSC has planned to propose to the shareholders' general assembly about a share issue at ratio 1–1 to double its charter capital to VND1.48 trillion ($70.4 million).

This aims at raising capitals to co-invest in FLC Group's 38-storey complex project on Pham Hung Street, Ha Noi. Besides, KLF was negotiating to acquire a three-star hotel in HCM City's District 1.

In the first quarter of this year, the company had a turnover of VND124.2 billion ($5.9 million) and VND19.6 billion ($933,000) in after-tax profit, increasing 235 per cent and 829 per cent over the same period last year.

Its annual shareholders' meeting is scheduled on June 17.

Tan Tien Plastic receives delisting approval

The delisting plan of Tan Tien Plastic Packaging JSC was passed at its Wednesday annual meeting with the approval vote of 77.64 per cent of small shareholders.

The company, listed on HCM City stock Exchange as TTP, announced that the reason for delisting was to focus on the restructuring to enhance production efficiency.

Treasury share buyback will be implemented to ensure the rights of small shareholders. Shareholders also approved the business plan for this year, with a turnover of VND1.8 trillion ($85.7 million), pre-tax profit of VND60 billion ($2.8 million) and dividend payout ratio of 10 per cent.

Illegal substance found in shrimp paste bound for Australia

The Express Delivery Customs Sub-department, under the Ho Chi Minh City Customs Department, on May 30 detected and seized 9.86 kilograms of drug precursor Pseudoephedrine mixed with shrimp paste contained in two plastic jars.

The jars were registered to be sent as gift to Australia by a resident of District 6. The amount of Pseudoephedrine, used to make methamphetamine, was valued at about 7 billion VND (329,000 USD).

The sub-department is working with the city police to investigate the case.

In the last eight months, the sub-department detected and seized more than 67 kilograms of dug precursors and 4.22 kilograms of heroin, all disguised in food and cosmetics.-

Vietnam: A safe and effective investment destination

For many years, Vietnam has been highly appreciated by foreign investors as a safe and effective investment destination. Speaking to the press, many foreign investors have expressed their desire to make long-term investment in this beloved S-shape of land, according to the Communist Party of Vietnam (CPV) Online Newspaper.

For genuine investors, profits are always important but are not the only consideration. Besides profits, they also need safety for their families, themselves, their assets and a suitable living environment.

Over the past years, with many preferential policies, Vietnam has attracted a large number of foreign investors from different countries and territories worldwide. A series of processing zones and industrial parks have appeared, including areas built specifically for foreign direct investment (FDI) businesses.

Although some shortcomings exist, as a whole FDI businesses have significantly contributed to the process of socio-economic development of the country. Many FDI enterprises also plan to expand, increasing the investment to hundreds of millions, even billions of dollars in Vietnam in the coming time.

On May 13-14, the disturbances erupted during workers' rallies in protest of China's illegal placement of its oil rig Haiyang Shiyou-981 drilling rig in Vietnam’s waters. Some extremists incited others to damage and destroy assets of some companies and factories of foreign enterprises in Dong Nai and Binh Duong provinces. This violation of the law was immediately condemned by society.

Shortly after the incidents took place, the Prime Minister sent an official dispatch to the Ministry of Public Security, ministries, central agencies, leaders of provinces and cities to ensure security and order.

The official dispatch also clearly stated that it must ensure the absolute safety of life and property of everyone, every business; and ensure normal production and business activities of enterprises, especially foreign businesses.

On the following days, many directions were issued. The Vietnam Chamber of Commerce and Industry (VCCI) sent its message to Vietnam’s Association of Foreign Invested Enterprises to reassure investors to resume production and business activities.

The Ministry of Finance also sent a delegation to work in Binh Duong and Ha Tinh provinces to assess the extent and severity of damage to enterprises. The delegation was directed to require insurance businesses to pay compensation promptly under their contracts to help damaged enterprises quickly restore their production.

Particularly, on the afternoon of May 17, President Truong Tan Sang visited and encouraged FDI enterprises in Binh Duong province. Furthermore, leaders of localities, where the incidents occurred, have taken measures to ensure security and order, punish violators, overcome challenges and to gradually resume production.

So far, most enterprises in Binh Duong, where the number of damaged enterprises was largest, have resumed production. This development shows that the drastic directions of the Government over the past days and the efforts of local leaders have restored the confidence of foreign investors.

Speaking at meetings with local leaders and the press, many foreign investors said that they feel secure, more confident and reassured to continue expansion of their long-term investment in Vietnam.

Health campaigners hope tobacco tax hike will reduce consumption

The Ministry of Health on May 30 held a meeting on the implementation of tax and retail price rises for tobacco products, in a bid to reduce consumption, in response to World No-Tobacco Day (May 31).

The World Health Organisation (WHO) says that tobacco smoking annually claims nearly 6 million lives around the world, including 600,000 who are killed by passive smoking, Deputy Minister Nguyen Thi Xuyen stated at the meeting.

She expressed concern that the number is likely to reach 8 million by 2030. It is believed that up to 40,000 people die annually in Vietnam from smoking.

Vietnam ratified the WHO framework convention on tobacco control in 2004 and promulgated the law on prevention and control of tobacco harms in 2012, with a determination to protect local people’s health, Xuyen noted.

She called on ministries, agencies, organisations and individuals to work together to enforce no-smoking regulations at public places. Part of the law making smoking in bars and restaurants illegal has been largely ignored in many places.

The tobacco tax in Vietnam currently accounts for 41.6 percent of the retail price, a low rate compared to other countries, such as France (80 percent), Germany (73 percent) and Australia (60 percent).

Research on tobacco use among Vietnamese youth has shown that the smoking rate has increased. For example 21.6 percent of the nation’s smokers are young men aged from 16-24.

The total economic burden caused by the five main tobacco-related diseases in Vietnam was over 23 trillion VND (1.08 billion USD) in 2011, equivalent to 0.91 percent of the country’s GDP.

Thus, Xuyen declared that an increase in the tobacco tax is an important measure to restrict tobacco consumption among Vietnamese people, particularly youngsters.

To this effect, the ministry has proposed a road map for the increase of taxation on tobacco, the official added.

Under the plan, a special tobacco consumption tax would be imposed at 65 percent in 2015, gradually increase to 105 percent during the 2015-17 period, and reach 145 percent for the next two years. The ministry would also consider tax adjustments in 2020.

As a result, retail prices may rise by 21 percent and 17 percent for the 2015-17 period and the following two years, respectively, higher than the average per-capital income in the periods.

On the occasion, the ministry, in co-ordination with the Ho Chi Minh Communist Youth Union, awarded prizes to nine winners of a competition to make video clips, photos and posters which depict the ill effects caused by smoking and appeal to local people to comply with the law on prevention and control of tobacco harms.

State Bank plays key role in stabilising financial system

The State Bank of Vietnam (SBV)’s key role in stabilising the monetary and financial system topped the agenda of a seminar in Hanoi on May 30.

Participants said in Vietnam , banks and financial companies managed by the SBV hold 90 percent of the total assets of financial organisations. Therefore, the central bank plays an important role in controlling the stability of the system of credit organisations.

Central banks of all countries in the world are aware of the importance of financial stability, which serves as an essential condition for macroeconomic stability, they said.

Affirming the State Bank’s irreplaceable role in stabilising the financial system, Dr. Vu Dinh Ang, an economic expert, stated that it is necessary to create an information coordination mechanism in order to realise this stability.

If all relevant agencies recognise the monetary-financial stability as vital in their countries, they will have good collaborations with each other, he said.

Sharing the same view, Dr. Can Van Luc affirmed that there is no transcendent and ideal financial-monetary stabilisation model but the central bank plays more and more important role.

He emphasised the need to have a policy coordination mechanism between the State Bank and relevant ministries and agencies as well as building an effective and transparent deposit insurance tool in case of crisis.

He also proposed the establishment of an international financial-monetary council with the State Bank being the main actor.

Participants suggested the SBV closely follow the financial system’s developments and put forth suitable monetary policies.

Foreign businesses feel secure in Vietnam

The Government's prompt, determined measures and its commitments after the disturbances at some localities have reassured foreign businesses in Vietnam, according to the Government news portal (VGP).

Chairwoman of the Council of the Taiwanese Chambers of Commerce in Vietnam Liu Mei Teh thanked the Vietnamese Government and appreciated its efforts to stabilise the situation and propose appropriate solutions, which have relieved Taiwanese and Chinese investors’ minds.

She hoped that Taiwanese and Chinese enterprises will be created favourable conditions to overcome consequences and launch long-term operation in Vietnam.

The disturbances erupted during workers’ rallies in protest of China’s illegal placement of its oil rig Haiyang Shiyou – 981 in Vietnam’s continental shelf and exclusive economic zone from early May.

Some extremists incited others to destroy property of foreign firms as well as of the State, businesses and individuals, and acted against law enforcement officials, disrupting social order and business activities.

Thanks to the government’s timely interference, most affected companies have resumed operations and social order and security has been restored.

VGP quoted General Secretary of the Japan Business Association Isao Obayashi as saying the investment environment has been improved year by year, adding that Vietnam is a suitable destination for investment.

Meanwhile, Chairman of the Korean Association of Industry and Trade in Ho Chi Minh City Lee Jong Hoe said the case is a chance for foreign and Vietnamese businesses to increase cooperation and production.

Garment, textile industry promotes cleaner production programme

The garment and textile industry has taken measures to protect the environment such as implementing cleaner production programme, encouraging enterprises to apply environmental management standards and creating a good workplace for labourers, the Vietnam Economic News reported on May 29.

Like many other producers, Vietnam’s garment and textile industry is facing environment pollution as the dyeing wastewater has a great amount of chemical waste disposal.

Being aware of this issue, many Vietnamese textile enterprises have recently not only built complex wastewater treatment systems but also applied a range of cleaner production measures like Nam Dinh Textile Company, Saigon Textile Company, Nhat Tri and Thuan Thien dyeing facilities.

As for cleaner production application, they took a range of measures such as sensibly using the correct levels of material and fuel sources for dyeing and weaving sector, operating wastewater treatment systems for dyeing production lines or moving dyeing facilities into industrial zones where they have had adequate wastewater treatment systems.

Applying cleaner production measures have helped the garment and textile sector meet a range of environmental requirements.

With appropriate cleaner production measures, each tonne of garment and textile products could save about 0.2-0.5kg of dye, 100-200kg of chemicals and additives, 50-100cu.m of water and reduced consumption of 150kg of oil and 50-150 kWh of electricity.

In addition, these measures also aimed to protect consumers' health. Therefore, the proportion of Vietnam’s garment and textile exports have continuously increased (to over 20 billion USD in 2013), especially to deamanding markets such as US and Japan.

To stabilise production and protect the environment, Vietnam’s garment and textile development strategy to 2015 with vision until 2020, the industry plans to move rural labourers to industrial parks and areas specialised in making garment and textile products.

To realise this goal, the application of cleaner production will be the optimal choice. In addition, the garment and textile industry will review the environmental impacts on the garment and textile development strategy and legal regulations on environment.

Other solutions for the garment and textile industry include implementing cleaner production programmes, encouraging enterprises to apply environmental management following ISO 14000 standard and creating a good workplace for labourers following SA 8000 standard.-

Tay Ninh imports sugar cane, cassava from Cambodia

Businesses in southern Tay Ninh province have been allowed to import 40,000 tonnes of cassava from Cambodia in the first five months of this year, serving local processing factories.

For the 2013-14 crop, 45 businesses and individuals in the province have registered to invest or otherwise cooperate in growing over 5,500 hectares of sugar cane and nearly 1,100 hectares of cassava in Cambodian provinces bordering Vietnam.

Cooperation documents have been signed between the authorities of Tay Ninh province and the two Cambodian provinces of Svayrieng and Kampongcham.

To encourage investment in Cambodia and the transport of post-harvest farm produce into Vietnam, Tay Ninh has applied a partial import tariff exemption while intensifying import and quarantine procedures and facilitating the transport of goods.-

Foreign aquatic regulations explained

Seafood exporters in the Mekong Delta region were brought together at a seminar to be updated on the regulations of foreign markets in 2014, which will help them effectively iron out any difficulties.

Chairman of the Vietnam Fisheries Association Nguyen Viet Thang said the seafood sector has reaped growth in both volume and value over the past two decades. In 2013, it brought home 6.7 billion USD from selling 6 million tonnes abroad. Vietnamese aquatic products are being sold in 150 nations and territories, he noted.

However, he cited more technical and trade barriers, and stricter demands from foreign markets as major challenges that require more special attention from State-run management agencies, seafood businesses and associations.

Apart from weather disadvantages, the industry continues to suffer from the illegal, unreported and unregulated fishing (IUU) standards set by the European Commission and the seafood safety barrier in the Customs Union of Russia, Belarus and Kazastan.

The US ’s anti-dumping taxes on imported Vietnamese tra fish and shrimp, and its new regulations in 2014 Farm Bill, have all posed a number of difficulties for the sector.

Therefore, local breeders and businesses need to be fully aware of these challenges and be able to meet the regulations from foreign importers to make inroads into these markets, Thang said.

The association presented in brief the non-tariff barriers and solutions in the field and highlighted the need to increase added value in the tra fish supply chain. It also called for more technology investment, the strengthening of traditional markets and expansion to new ones.

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

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