Value of tuna exports rises dramatically

The value of tuna exports since the beginning of the year has reached 343.4 million USD, a yearly increase of 48.2 percent. In July, the value was 57.4 million USD, up 126.8 percent over the same period last year.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), the US is Vietnam ’s leading tuna importer.

In the first half of July, the US’ imports of Vietnamese tuna soared to 202.5 percent, accounting for 60 percent of the country’s total tuna exports.

It is forecast that tuna exports to the US continue to increase in the remaining months of this year.

The association added that despite the current economic difficulties, tuna exports to the EU market in the seven months of this year increased by 47.6 percent compared to the same period last year.

Vietnamese tuna is also one of the most popular aquatic products in Japan, a top-end market with strict food hygiene and safety regulations.

The value of tuna exports to Japan during this period also rose, reaching 40.781 million USD, a rise of 44 percent.

Meanwhile Israel ranks fourth amongst Middle Eastern importers in the value of seafood imports from Vietnam but takes the lead in the value of Vietnamese tuna imports.

To boost exports, VASEP has advised seafood exporters to learn more about the demand for their products as well as ensuring their quality.

Another notable market for Vietnamese tuna exports is Mexico , which has been one of the top ten importers of Vietnamese tuna since May this year.

In May and June, Vietnam reported a growth of 365.7 percent and 921.5 percent respectively, in tuna exports to this market over the same period last year.

At present, global demand for tuna is larger than the supply. It is forecast that in the remaining months of this year, Vietnam’s tuna exports will keep increasing and the export value this year is likely to double the figure recorded last year, according to VASEP.

Golden opportunity for businesses in Myanmar

Myanmar’s industrial sector meets only around 10 percent of its real domestic demand, which offers a golden chance for small and medium sized Vietnamese enterprises to penetrate this potential market.

Myanmar is considered the final lucrative market in Asia that has yet to be tapped by Vietnamese businesses.

According to the Asia Pacific Department under the Ministry of Industry and Trade (MoIT), despite a population of 60 million and abundant natural resources, the Myanmar economy relies primarily on backward agricultural production.

The production of consumer goods satisfies just 10 percent of domestic demand and 90 percent of goods are imported from China, Thailand, Singapore and Vietnam.

The Vietnamese Trade Office in Myanmar says that over the past three years, Vietnam exported steel, garment materials, medicines, medical equipment, tyres, fertilizers, chemicals and spare parts to Myanmar. However, its market share remains modest compared to the fine long-standing relationship between the two countries.

Two-way trade turnover between Vietnam and Myanmar has increased sharply from US$9.31 million in 2001 to US$167.20 million in 2011.

Vietnam’s current exports account for 1 percent of Myanmar’s turnover while its Vietnamese businesses have failed to achieve greater penetration in this largely untapped market.

Vietnam enjoyed an export surplus with Myanmar in 2001, but it has maintained an import surplus of minerals and raw materials from the country in the following years.

Myanmar is now seen as an attractive investment destination for international businesses, thanks to its new incentive policies for foreign investment.

Myanmar Prime Minister Theinsein, who is said to be in favour of Vietnam, was recently elected President, which hopefully will create favourable conditions for Vietnamese businesses to export products that Myanmar needs, especially consumer goods.

The expanding industrial production of construction materials, consumer goods, and automobiles is opening many opportunities for foreign investors, including Vietnam.

Service sectors like tourism, telecommunications, finance-banking and real estate also hold great potential for Vietnamese investment in Myanmar.

Myanmar has adopted a clear-cut policy aimed to attract Vietnamese businesses investing in forestry, aquaculture, seafood processing, and commercial crops. Vietnamese investment in these fields is showing positive signs as Myanmar has just put 12 of its 23 million hectares of agricultural land under cultivation and exploits only 700,000 tonnes of fish per year.

People in Myanmar also face a dire shortage of essential goods such as medicine, medical equipment, building materials, pesticides, cosmetics and garment materials.

Myanmar’s agriculture, livestock, fishery and forestry sectors make up 50 percent of the national GDP but they are developing slowly. The country’s average rice yield is only 2.5 tonnes per hectare while Vietnam’s is 7 tonnes per hectare. Vietnamese businesses are strong and experienced enough to help the country develop its agriculture and forestry industries.

The Trade Promotion Department under the MoIT says there are a lot of opportunities to invest in Myanmar but many Vietnamese businesses are still hesitant for a number of reasons.

There are no Myanmar businesses investing in Vietnam, while Vietnam has poured US$170.9 million into oil and gas, mineral exploitation and pharmaceuticals in Myanmar.

The main reason for this is Myanmar’s poor macroeconomic policies that have created obstacles for foreign investors.

In Myanmar, foreigners must pay 35 percent income tax and only three banks are able to deal with international payments.

The double exchange rate mechanism makes transferring capital to Myanmar risky due to changing currency rates based on official exchange rates.

Vietnamese businesses also have to face tough competition from China and Thailand, which are Myanmar’s major foreign trading partners.

On the other hand, the poor capacity of Vietnamese businesses and lack of attention to developing long-term investment plans has failed to win the confidence of partners in Myanmar.

 The transport of goods from Vietnam to Myanmar also remains at a distinct disadvantage due to long distances of oversea routes. Having no a common land border lowers the competitiveness of Vietnamese goods compared to those from other regional countries.

Adapting to changing markets

Five years after Vietnam joined the World Trade Organisation (WTO), the garment industry has managed to secure a firm foothold on the domestic and overseas markets despite intense competition.   

Garment exports have increased sharply from US$5.9 billion in 2006 to US$15.8 billion in 2011, an average annual growth of 21.7 percent. In the context of the global shrinking market, the industry earned US$9.24 billion from exports in the past seven months, a year-on-year increase of 7.6 percent.

Vietnam is currently the second largest garment supplier for the US, the third for Japan and the fifth for the EU. The industry generates 15-16 percent of the country’s total export revenues and more than 2.5 million jobs for local people, helping reduce poverty, restructure the rural economy and ensure social welfare. WTO membership has brought a number of opportunities for the Vietnamese garment industry in terms of markets, investment, policies and negotiating capacity during the integration process.

In 2005, the EU and Canada removed quotas for Vietnamese garments and the US followed suit two years later by removing quotas and granting Vietnam "most favoured nation" (MFN) status. The industry has since been able to compete on an equal footing with other rivals in the world.

It attracted 148 FDI projects worth US$689 million in 2007 and 485 projects worth US$2 billion between 2007 and 2012.

WTO accession created a firm foundation for Vietnam to develop global trade policies and negotiate a series of important free trade agreements (FTAs), in which the garment industry is given priority. They include the ASEAN-Republic of Korea, Vietnam-Japan, Vietnam-EU and Vietnam-Russia FTAs, as well as the Trans-Pacific Partnership (TPP).

However, the industry has suffered considerable pressure trying to adhere to international regulations and commitments. Although many quotas have been removed, a monitoring mechanism was imposed on Vietnamese garments and they are likely to face anti-dumping investigations in the US. The industry also encounters many technical barriers, including the CSR, SA 8000, Oketx, Reach and TBT regulations.

In addition, under WTO regulations, Vietnam is required to dissolve some of its support mechanisms for garments.

The current global economic downturn has caused orders and prices to decline sharply. Rising prices of input materials, minimum wages and daily expenses have also pushed production costs up.

In the face of fierce global competition, cheap labour is no longer an advantage of the garment industry and the mounting pressure is likely to make it lag behind in both domestic and international markets.

The industry has also shown a number of weaknesses in developing its support industries, designs, human resources and the ability to understand and follow international regulations.

Over the past five years, the Vietnam Textile & Apparel Association (VITAS) has fulfilled its duty and led the country's garment businesses in overcoming the US monitoring mechanism. It has worked closely with the Government, Ministry of Industry and Trade, Vietnamese embassy in the US, as well as US importers and retailers associations and lawyers to help its businesses avoid anti-dumping and anti-subsidy lawsuits.

VITAS has also made significant contributions to increasing the use of domestic input materials and creating an export surplus.

The use of domestic input materials increased from 46 percent in 2010 to 48 percent in 2011, and the export surplus rose from US$1.4 billion in 2005 to US$6.5 billion in 2011.

In order for the industry to operate successfully during the process of international integration, VITAS has urged the Government to complete policies for transparency and effectiveness and publicize amendments to FTA and WTO commitments.

Vietnam needs to pay more attention to improving its national and business competitive edge, especially in terms of infrastructure, customs procedures and support industries.

The Government also needs to clearly identify the position of the garment industry within the national economy.

Stable interest rates help businesses survive

Interest rates have remained fairly stable since the middle of August and the business community is also increasingly able to access loans, according to the State Bank of Vietnam (SBV).    

The current interest rates quoted are 1-2 percent annually for no-term deposits and 2 percent annually for those of less than a month. That for those from one to fewer than 12 months is 8.8-9 percent annually and for deposits of 12 months or over, it ranges from 10-12 percent annually.

The rate for USD is steady at 2 percent annually for individual deposits and 0.51 percent for commercial interests.

Along with the stable interest rates, that for loans has also remained constant, with some banks applying preferential lending options to different clients.

The Vietnam Bank for Agriculture and Rural Development has also reduced its three-month interest rate on loans, from 11.5 percent down to 11 percent annually, to enable food companies to purchase food for temporary storage.

The Vietnam International Bank (VIB) has also introduced loans for individuals with an interest rate of 9.9 percent for customers buying, building or repairing their house and 11.5 percent for business for the first three months of the loan.

For the fourth month in a row, the banks have adjusted their interest rates on loans in line with market forces. The VIB has reduced its lending interest rate to a maximum of 14.99 percent on more than 20,000 loans that have satisfied the bank’s conditions.

The interest rate on loans for agriculture, exports and small- and medium-size enterprises is currently 10-13 percent annually, while other sectors have to pay 12-15 percent.

The lending rate for USD has generally remained the same across the major banks at 5-7 percent annually for short-term loans and from 6-8 percent for medium- and long-term loans.

According to the figures released by credit institutions, the total turnover of transactions in VND in the inter-bank market reaches approximately 110.5 trillion, equivalent to 22 trillion VND every day. Sales in USD converted into VND have reached 56.8 trillion.

High quality products showcased in Cambodia

The tenth annual Vietnamese Trade Fair for top-quality products and exports was opened on August 23 at the Mondial Centre, in the capital of Phnom Penh, Cambodia.    

The fair, organised by the Top-Quality Vietnamese Products Business Association, displays more than 2,000 commodities, including foodstuffs, pharmaceuticals, office supplies, handicrafts, agricultural products, household appliances and construction materials.

Two-way trade between Vietnam and Cambodia hit US$2.8 billion in 2011 and it is expected to amount to US$3 billion this year.

The fair will last until August 27.

Trade deficit hits US$62 million in eight months

Vietnam has run a moderate deficit of US$62 million in the past eight months despite impressive export growth.
    
Exports rose 17.8 percent year-on-year to US$73.35 billion in eight  months, while imports reached US$73.41 billion, up 6.7 percent, according to the General Statistics Office (GSO).

In August alone, Vietnam earned US$ 9.8 billion from exports, down 3.8 perecnt from the July figure, and slipping into a deficit of US$150 million.

The downward trend in exports reversed gains in the previous two months when Vietnam enjoyed a trade surplus in June and July

The GSO said that Ho Chi Minh City’s export turnover reached US$19.26 billion in the past eight months, representing a trade surplus of US$1.58 billion.

In the reviewed period, Hanoi reaped US$6.65 billion from exports while the capital city’s imports hit US$15.48 billion.

Securities investors urged to stay calm

The State Securities Commission has called on investors to keep a cool head to avoid falling into traps set by opportunists.    

The Commission released the warning after the domestic stock market tumbled sharply for the third consecutive day on August 23.

The VN-Index on the HCM City Stock Exchange lost 17.41 points, or 4.24 percent, to close at 392.82 points. The Hanoi Stock Exchange also saw its HNX-Index dip 5.29 percent to 61.23 percent.

Investors sold off bank shares and the domino effect seems to have spread to other listed shares.

The August 20 arrest of a banking tycoon on fraud charges has cast a cloud over investments, leading to a negative impact on the market.

Investors need to be cautious about misleading information from speculators who take advantage of the situation to corner the market, the Commission warned.

It recommended that investors get information from relevant State management agencies, including the State bank of Vietnam, the State Securities Commission, and stock exchanges, to make rational decisions before spending money.

Vietnam keen to boost economic ties with Germany

Vietnam wants to step up the relations with Germany , especially in economics, said the Vietnamese Ambassador to Germany at a meeting with German Vice Chancellor-cum-Minister of Economics and Technology Philipp Roesler in Berlin on August 22.

Nguyen Thi Hoang Anh further said she hopes Roesler’s visit to Vietnam in September will contribute to further realising the Vietnamese – Germany strategic partnership.

Anh informed her host of the progress of the German-sponsored projects in Vietnam and affirmed that Germany is Vietnam’s largest trade partner in Europe .

She also expressed hope that the German government will sponsor more projects as agreed in the Hanoi Core Statement and create favourable conditions for the Vietnamese community in Germany, presently over 125,000 people, making it easier for them to contribute to German socio-economic development.

Roesler said Vietnam is part of Germany’s economic development strategy and praised the overseas Vietnamese in the country.

He said he hopes Vietnam will expand the teaching of the German language in the country, contributing to developing the two countries’ bilateral relations.

Private investment in healthcare still limited

Described as a potential field for investment, healthcare has yet to prove its appeal as private hospitals still account for a mere 12% of the total number of hospitals nationwide.

Vietnam is currently the thirteenth most populous country in the world with 88 million people, in which the wealthy and the middle-class are on the rise. In 2010, Vietnamese people spent US$7 billion on healthcare, which will surge to US$11.3 billion in 2015 with an average growth rate of 10.3% per year, said Economist Intelligence Unit (EIU).

Meanwhile, the medical service system is still underdeveloped in terms of quantity and quality. Therefore, healthcare is considered a potential market for investors.

However, there are now only 137 private hospitals, both locally-invested and foreign-invested, among a total of 1,063 hospitals across the country.

This ratio is very low in comparison with the regional countries, although the State has introduced many preferential policies for private investors, said Tran Quoc Khoa, head of the non-public healthcare service management division under the Ministry of Health.

Speaking at the seminar “Promoting international cooperation in medical and healthcare investment in Vietnam” held in Hanoi on Thursday, Khoa said most private hospitals were of medium and small scale, mainly located in big cities like Hanoi, HCMC and Danang. Meanwhile, there is no private hospital in remote areas.

Only 28 out of the 63 cities and provinces have private hospitals, he added.

According to Nguyen Ba Cuong, deputy director of the Foreign Investment Agency at the Ministry of Planning and Investment, among the 137 private hospitals, there are only six wholly foreign-invested hospitals, with a total investment of US$94 million. This figure has not changed over the past ten years.

There are also 30 clinics developed by local investors, with total investment of some US$14.3 million, very modest compared to the demand for healthcare of Vietnamese people.

Earlier, the plan for healthcare network development until 2010, with a vision to 2020, passed by the Prime Minister in 2006 was targeted to achieve a ratio of two private inpatient beds to 10,000 people by 2010, but by then the ratio was only 0.7 beds to 10,000 people.

The goal for 2020 is to raise the ratio to five private inpatient beds for 10,000 people, meaning there must be around 40,000 inpatient beds nationwide by 2020, versus 7,500 at present, or 10% of the total inpatient beds in Vietnam.

As such, Khoa deemed the target hard to achieve without changes in policies for luring investment into this sector such as personal training, tax and land incentives, health insurance and social insurance.

Targeted firms face strict tax checks

The HCMC Tax Department will focus its attention on tax inspection and recovery at certain companies in order to prevent State budget revenues being lost until the end of the year, said the department’s deputy director Le Thi Thu Huong.

Huong on Thursday told the Daily her department is mobilizing a team of taxmen from other sections to get the job done. The purpose is to closely monitor tax reclamation of involved entities, especially those with large taxable incomes, to discover any wrongdoings and to reclaim tax debts for the State.

Huong said the department targets to collect over 80% of the total amount recorded during the inspection process. Despite not disclosing the estimated figure of the tax collection, Huong said the target companies are those with a stable operation in recent years.

The tax department also focuses on tax recovery as one of the major solutions to enrich the State budget and complete the target allocated by the General Department of Taxation, Huong noted.

As such, tax agencies will work with companies owing huge tax debts to fix the payment deadline and will take mandatory measures in line with the prevalent laws if needed.

“Every tax officer will be given a specific target to ensure the unpaid amount will not exceed 5% of the total collection from now to the year’s end at the request of the general tax department,” Huong said.

According to Huong, the city tax department this year has achieved positive results in fighting transfer pricing among local enterprises. The department in the year to date has reduced a tax loss of up to VND1.9 trillion at textile and garment companies and has recovered about VND20 billion in taxes from these entities.

Abandoned projects take toll on local communities

Investors may pledge to implement huge projects, but many however remain on paper, ignoring the impact on households who give up their land for the work to commence.

Registered transportation, real estate, tourism or mining projects have increased each year. According to the General Statistic Office, capital in these projects was estimated at VND877.9 trillion (USD43 billion) in 2011, an increase of 5.7% compared to 2010, accounting for 34.6% GDP.

One of the most prominent projects is South East Asia's largest iron ore plant set for location in Thach Khe Commune, Ha Tinh Province that was inaugurated as far back as 2007. Deputy Prime Minister Nguyen Sinh Hung remarked that the project had the potential to change the fates of thousands poor families.

Other projects such as South East Asia’s biggest wind power plant in Binh Thuan, the Nam Dinh Vu non-tariff zone, industrial park and seaport; the 'Las Vegas of Asia' project in Lang Son and a project to construct the biggest tourist resort in the northern region in Phu Tho Province have all remained moribund. These projects all bring with them the promise of thousands of jobs for poor families and a potential boost for the economy.

But in reality, most of the projects have been delayed.

The Minister of Investment and Planning in 2010 announced that of a total 34,607 projects, 3,386 remained stagnant.

For example the VND1.7 trillion project to build the Do Luong Cement Plant in Nghe An Province which started in 2007 and was expected to be completed in 2009, remains unfinished despite the local authorities providing VND100 billion to investors.

The Prime Minister also directly asked the investor in an iron and steel complex and Son Duong deepwater Port in 2009 to quickly assign jobs to locals, but the land still remains abandoned, casing difficulties for local people.

These largely abandoned projects show that the authorities haven't strictly monitored key projects.

As a result, investors have just abandoned the projects, not hired locals and brought other workers from abroad to work on site.

For example, in the Chinese-Japanese invested Haiphong Thermal Power Plant project, the highest number of 2,000 Chinese were transported into Vietnam. Many were found without any documentation. In the Cong Thanh Cement Plant was also found to employ 183 Chinese workers without work permits.

In addition precious little support has been provided to relocated families.

The people that have their land withdrawn for the Thach Khe Iron Works project were supposed to be moved to a resettlement area but nearly 200 households still haven't received any compensation.

In the Son Duong Deepwater Port project, over 1,800 households were relocated.

A number of huge projects that were supposed to bring prosperity have left people without homes or a way to earn money. Meanwhile the projects remain suspended due to a lack of capital, technology or skilled workers.

The government has failed in providing vocational training to former farmers.

The government is being urged to punish irresponsible investors and return fields to the farmers as shown in cases in Long An and Tay Ninh. People also require support to boost incomes and vocational training before investors employ them in new jobs.

Garment firms fear import duties

Garment exporters have expressed their concerns over the approaching end to a grace period on duty payments for raw materials and accessory imports.

Under the current Import and Export Tax Law, enterprises that import raw materials and accessories for production of goods for export receive a 275-day grace period on duty payments for their imports.

A draft for the revised Import and Export Tax Law and Tax Management Law eliminates the tax payment deferment and requires enterprises to pay tax before customs clearance, or provide a guarantee from a credit institution.

The move partly stems from the fact that many exporters are taking advantage of this rule to evade taxes, causing difficulties for tax offices and State budget losses.

However, the removal of this grace period would put pressure on enterprises that operate legally, said businesses.

Pham Xuan Hong, director general of Sai Gon 3 Garment JSC, said: "It feels like we're standing on top of a trapdoor that could open at any time."

For instance, if the rule was applied in the fourth quarter of this year, his firm would have to pay VND26 billion (US$1.24 million) in import taxes, and in the first half of 2013, that figure would reach VND50 billion ($2.4 million), he said.

"The only way we can get that sort of money ready on time is by taking out a loan, but interest rates are still high," he added.

Nhu Hong Hanh, an export official from the Viet Tien Garment Corporation, said: "For FOB (free on board) contracts, raw materials and accessories are classed as temporarily-imported and re-exported goods so it is not necessary to force enterprises to pay taxes immediately, while tax refund procedures are extremely complicated and cumbersome."

Dang Phuong Dung, deputy chairwoman of the Viet Nam Textile and Apparel Association (Vitas), said the association had sent a document to the Ministry of Finance (MoF) asking it to reconsider the proposal.

However, MoF was determined that if enterprises did not want to pay taxes immediately, they should ask commercial banks for a guarantee, but not all of them can satisfy the banks' requirements.

Guarantee procedures also caused difficulties for exporters because they were time-consuming and involved mortgaging assets or temporarily freezing bank accounts, Hanh said.

If it was impossible to collect taxes from illegally operated or bankrupt firms, it would be unfair to punish law-abiding companies by collecting levies from them instead, Dung said.

Fertiliser industry to boost sales in ASEAN

The fertiliser industry expects to boost shipments to Southeast Asian markets in the latter half of the year, according to a leading executive in the industry.

PetroVietnam Fertiliser and Chemicals Corporation (Phu My Fertilisers) deputy director Nguyen Hong Vinh said that Viet Nam had a geographical advantage over major producers in the Middle East and Baltic regions, and he said domestic producers should turn that edge into an opportunity to enlarge their market share in ASEAN countries.

After opening a branch in Cambodia last year, Phu My Fertilisers intended to open a representative office in Myanmar this year to better exploit the potential of that growing market, Vinh said.

The corporation exported 50,000 tonnes of fertiliser to Cambodia, the Philippines and Myanmar in the first half of the year, he noted. It targeted to export roughly 300,000 tonnes annually to ASEAN markets within the next few years, with those markets being expected to ultimately account for 25 per cent of its total sales, he said.

However, Vinh noted that there were obstacles to increasing market share within neighbouring countries. While domestic fertiliser production in Myanmar, for instance, met only 10 per cent of that country's total demand, the domestic industry there was heavily subsidised and there was fierce competition from Chinese products, he said. Myanmar's poor banking system also put exporters at risk for receiving payment, he noted.

Firms struggle in US market

Vietnamese exporters are still having difficulties achieving success in the US market, says Sorin Witzman, adviser of HR Consulting Services from the US.

Witzman spoke on how to successfully penetrate the US market at a seminar held by Amcham Viet Nam on Wednesday in HCM City.

It was aimed to help Vietnamese exporters pursue international contracts, respond to customer demands and increase profits from international trade.

Witzman is an international executive adviser in the field of quality programmes and solutions. He shared his experience in helping companies improve their product and process quality, which can lead to much higher rates of market share growth in tough markets like the US.

Witzman attributed the problems facing Vietnamese exporters to a lack of knowledge regarding customer expectations and behaviour in new markets.

He said Vietnamese companies often lacked a record to show experience and expertise. German companies, meanwhile, kept records weighing up to 15kg to show their business experience to customers.

Most new companies failed to penetrate the US market because of poor customer service, he said. An identification of the quality needs of the end-users was required to ensure improved product quality.

Also, US and EU companies are reluctant to do business with companies that do not show knowledge of local quality regulations, according to Witzman.

To ensure the quality of imported goods, the US had federal and state regulations and quality standards.

Bryan Phan, CEO of HR Consulting Services, said most US companies required exporters to have their representative offices in the US because they did not want to have to call Vietnamese exporters at midnight to ask about a product error or sue someone who was in another country.

The US companies only wanted to do businesses with firms who had an office in the US.

Witzman said that more than 18 years after the reactivation of trade with Viet Nam and almost 11 years after the ratification of the original Bilateral Trade Agreement between the two countries, some firms, both locally owned and foreign invested, were having difficulties getting goods into the USA.

Japanese firm takes 40% stake in Topaco

Japanese firm Taiyu Kensetsu has officially become a strategic partner with a 40 per cent stake in the Construction Joint Stock Corporation, known as Topaco.

Kawanaka Yoshio CEO and general director of Taiyu Kensetsu said his firm chose Viet Nam as the location of its investments due to the country's advantageous transport links with nearby countries Cambodia, Thailand, Malaysia and Myanmar.

The co-operation will help Topaco to apply advanced technology from its partner, said Nguyen Ngoc Vinh, general director of Topaco. Under the co-operation agreement, Topaco has set a target of posting a revenue of US$100 million by 2015, $500 million by 2020 and $1 billion by 2025, said Vinh.

McDonald's eyes Vietnamese market

A high-ranking leader from McDonald's will visit Viet Nam this week to explore opportunities for the fast food giant's expansion into the Vietnamese market, reports Viet Nam Economic Times.

According to the newspaper, the Ministry of Planning and Investment will receive the visiting representatives from McDonald's.

Vietnamese goods fair opens in Phnom Penh

The 10th High Quality Vietnamese Products and Exports trade fair opened yesterday in the Cambodian capital city of Phnom Penh.

It has attracted around 150 firms who have set up 250 booths to display more than 2,000 products, including electronics, consumer goods, stationery, books, construction materials, food, pharmaceuticals, leathers, handicrafts, and cosmetics.

Organised by the Business Association of High-Quality Vietnamese Goods, the fair offers Cambodians a good opportunity to buy high-quality Vietnamese goods at reasonable prices.

Vietnamese businesses also hope to benefit from the feedback they receive from Cambodian buyers, Vu Kim Hanh, the association chairwoman, said.

The fair closes on August 27.

Northern province one-stop shop speeds up investment

The northern province of Quang Ninh is applying a one-stop shop policy to cut off time needed to fulfil administrative procedures for investors who desire to make investments in the province, the provincial People's Committee has said.

The province has attracted over US$390 million in foreign direct investment (FDI) over the past six months, an increase of 15 times over the amount recorded in 2011.

Currently the province has 93 foreign-invested projects with total valid registered investment of $4.1 billion. By 2020, the province would have lured investment for 18 projects in tourism and entertainment services, seaports, borders, logistic systems, trade, infrastructure and high-quality human resources.

French label opens fashion showroom in Ha Noi

Sophie Paris, one of Asia's direct selling fashion brands, yesterday opened its third showroom in Viet Nam in Ha Noi after opening its first two ones in HCM City and Da Nang.

"We have seen monthly sales higher than US$30,000 from Viet Nam's capital, and so we are extremely excited about the potential for growth here now that we are fully operational," said Nick Jonsson, general director of Sophie Paris Viet Nam.

Sophie Paris is a French owned direct selling fashion company operating in Indonesia, Morocco, the Philippines, Viet Nam and Malaysia. The company already has a base of almost 5,000 members in Ha Noi, and over 35,000 nationwide.

Singaporean companies seek business in City

A delegation of business executives from Singapore met with Vietnamese counterparts in HCM City on Wednesday to seek trade and investment opportunities.

The companies specialise in the financial sector, plastic product manufacturing, product testing, certification, logistics services and architectural, civil and structural design.

The meeting was organised by HCM City's Viet Nam Chamber of Industry and Trade and the Singapore Manufacturers' Federation.

The delegation had also met with businesses in Ha Noi and Hai Phong City to explore business opportunities.
 
High-tech wafer plant planned

Aware of the importance of the integrated circuit industry to the country's industrialisation and modernisation efforts, the Government plans to set up a wafer fabrication plant, a symposium heard in HCM City yesterday.

A wafer is thin piece of semiconductor crystal used to make integrated circuits.

The plant will be sufficient to cover domestic demand for integrated circuits (ICs), according to a report from the Viet Nam National University's IC Design Research and Education Centre (ICDREC).

Le My Phuc, vice president of factory automation at Global CyberSoft Inc Viet Nam, said wafer fabrication has huge potential due to strong demand in global electronic and IC manufacturing and Viet Nam's own needs considering its has a population of more than 90 million.

The country had more than 111.5 million mobile-phone and 14.3 million landline subscribers at the end of 2010, while the revenues of the electronics and hardware industries rose from over US$2.5 billion in 2005 to $5.5 billion in 2010, he said quoting the Viet Nam ICT Whitebook.

Potential applications for wafers in Viet Nam include electronic ID/license cards, radio frequency identification, subscriber identity module, phone chips and many others, he added.

Ngo Duc Hoang, director of ICDREC, said to implement the Government's policies on developing the IC industry, HCM City set up a management board for its programme to develop IC products and human resources.

"Development of the IC Industry of HCM City" programme aims at developing human resources, incubating IC businesses, designing and manufacturing prototypes, promoting the semi-conductor and IC industries and building a fabrication and a design centre.

By 2017, the programme targets to achieve a high-value integrated IC industry worth $100-150 million, contribute to technical innovations in defence and security, and attract more than five multinationals semi-conductor corporations to Viet Nam.

It also aims to provide education and training to some 2,000 engineers and technicians, and incubate 30 semi-conductor and electronics businesses by 2017.

The three-day Solid-State Systems Symposium, organised by the National University, HCM City, and Sai Gon Hi-tech Park, closes today.

Smugglers take to the sea
 
Smugglers are increasingly taking to the sea, exploiting its vast spaces to elude law enforcement, according to the General Department of Customs, which warns that the illegal wildlife trade and the importation of substandard and counterfeit goods remain rampant.

According to department statistics, customs officials handled over 9,000 smuggling cases in the first six months of this year, involving about VND180 billion (US$8.6 million) worth of contraband. This represented a 45-per-cent increase over the same period last year.

The most common practice deployed by smugglers was to make incorrect declarations of the quantity or types of goods. For instance, the Hai Phong customs department seized seven containers of goods that were originally declared as frozen chicken feet and wings but turned out to be mixed with animal viscera.

HCM City customs reported a similar case, seizing a container with a declaration that it contained soybeans. Inside the container there were 66 ivory tusks weighing 282kg, 2kg of pangolin scales, and one bundle of animal fur.

Another headache for customs officials has been the illegal export of natural resources, most notably coal. In Quang Ninh Province, the country's leading coal-producing region, smugglers buy coal from small ports or wharves and find ways to export it to neighbouring China.

Customs officials on the ground said that smugglers armed with state-of-the-art equipment had used increasingly ingenious tricks to get around the law. Smugglers often operated in closely-linked networks which made it difficult for customs officials to monitor their operations against the backdrop of an extensive seaport system.

A representative from the Anti-Smuggling Task Force said the proposal to boost the capacity of marine patrols was recently approved, along with a budget to purchase new equipment.

The Ministry of Finance has also received a suggestion to draft new regulations that clarify the responsibilities and co-operative mechanisms between customs and port authorities, ensuring a uniform way of making declarations. Goods kept at ports also needed to be categorised and segregated into specific areas according to their status.

City to target low-income housing investors
 
Ha Noi's Department of Construction would complete a mechanism and policies on social housing management and development to support enterprises investing in social housing in the city by the end of this year.

The department would also work with relevant authorities to find solutions for slow-moving and poor-quality projects.

The move was designed to help enterprises access bank loans to build low-income houses and tackle low competitiveness in the affordable housing market.

Figures from the department showed that Ha Noi has implemented 14 social housing projects, providing 15,410 apartments for 54,300 low-income earners in the city.

Currently, more than 1,500 low-income apartments are being built and will be put into use in Sai Dong Residential Area in Long Bien District and Kien Hung Residential Area in Ha Dong District by the first quarter of next year.

Director of the department Nguyen The Hung said that a shortage of investment capital was among the huge difficulties facing enterprises that wished to invest in this sector.

Last May, the Bank for Investment and Development of Viet Nam (BIDV) committed to provide a line of credit of VND2 trillion (US$96 million) to support the construction of social housing projects over the next two years. However, so far, only a project in Dang Xa Residential Area has managed to take out a loan with slow disbursement, although investors from seven projects have applied for loans.

Hung said the reason was that enterprises needed to have secure property to access the loan while land for social housing projects was not considered as such.

Moreover, the price of low-income housing remains high, as much as other low-price houses in the market, contributing to slow sales.

Most low-income housing located in suburban areas cost from VND13-14 million ($624-627) per square metre, while the price should be VND2-4 million ($96-192) per square metre. Many nearer the city centre are advertised for between VND14-16 million ($660-760) per square metre.

A shortage of specific policies for low-income earners to access loans to purchase houses was also an issue, Hung said.

Nguyen Manh Kim, a resident of CT1 Ngo Thi Nham Residential Area in Ha Dong District, said that he bought a 61-square metre apartment for low-income earners last April at the price of VND610 million ($29,280).

Each month, he and other households spent more VND90,000 ($4.2) for security and cleaning services and VND25,000 ($1.1) or VND60,000 ($2.8) for parking a bike or motorbike respectively.

"The service cost is high for such a low-income house, but I'm generally satisfied with it as we have a parking garage, a pre-school and a mini-supermarket on the ground floor," he said.

However, he was annoyed that the terms and conditions did not allow owners to sell or transfer their houses in the first ten years.

"We have to wait if we want to move. We can't sell it when we need to," Kim said.

According to Hung, the department has announced the social housing criteria as a reference for enterprises to avoid different price levels.

The city also expanded the beneficiaries, which allowed people with permanent and temporary residencies at district-levels to access the houses.

He said the State should help enterprises to access preferential loans to build social housing, with VAT exemption and premises free from site clearance and other procedural difficulties to provide affordable housing for low-income earners.

Currently, low-income houses are not exempt from VAT.

VASEP optimistic about seafood exports

The Vietnam Association of Seafood Exporters and Producers (VASEP) is confident that seafood exports are likely to meet the yearly target of US$6.5 billion.    

VASEP said that despite various difficulties confronting the sector, the situation in the third quarter of this year is expected to improve with an estimated turnover of US$1.84, representing an increase of 17 percent against the second quarter and bringing total export earnings in the first nine months to US$4.7 billion.

The association’s optimistic prediction is based on both changes in the domestic market and positive signals in the foreign markets.

VASEP Secretary General Truong Dinh Hoe said despite certain problems remaining to be dealt with, it seems likely to fetch US$3.5 billion from seafood exports in the second half of this year.

Hoe cited three reasons. First, seafood exports in the first and second quarters reached a high level though many importing countries were not at times of peak demand, especially in summer.

Second, with the process of restructuring, many businesses have identified the pros and cons and decided to earn their spurs.

Third, the State’s macro-policies aimed at increasing capital, lowering interest rates and suspending debt payment have created favourable conditions for businesses to gradually stabilise their operations.

Based on the latest statistics, there is high hope that seafood export earnings will be able to reach the set target of US$6.5 billion, Hoe said.

However, some people are doubtful about VASEP’s prediction as key exports such as shrimp and Tra fish are in a fix.

Since 2010, Japan has strengthened inspection of Trifluralin and Enrofloxacin in Vietnamese shrimp, since its permitted level of residues is 10 times lower than the EU standard.

On May 18 this year, it decided to inspect 30 percent of the shrimp volume imported from Vietnam, to see if it met requirement for only 0.01ppm (10ppb) of Ethoxiquin residue.

Hoe said Japan has recently annulled this decision but its permitted level of residue remains unchanged.

We will have to negotiate with the Japanese side for readjustment of the permitted level to help shrimp exporters through a hard time, Hoe said.

Regarding Tra fish exports, Hoe said despite facing unstable material supplies, it is expected to earn up to US$1.8-2 billion this year.

According to local sources, he added, Tra fish prices have picked up. But whether export businesses can make a good profit depends on the quality of product.