South Korean contractor shows signs of possible violation at road project

A $27 million road in the central province of Thanh Hoa built by a South Korean contractor using fund borrowed from the South Korean government is in disrepair shortly after construction stopped, according to newswire phapluatplus.vn.

The road starts at a junction with Le Lai road and ends at a junction with Nguyen Trai road. It was part of the project for socio-economic development of Thanh Hoa city with the Thanh Hoa People’s Committee as the investor. Construction started in April 2012 and finished in April 2014.  The contractor is Kukdong Sambo, the consortium between two South Korean companies namely Kukdong Engineering & Construction and Sambo Engineering & Construction.

As of now the road is cracked, with parts sinking, and parts unfinished. The quality of the concrete does not meet the standard specified in the design. The amount of cement is lower than designed at some parts. Concrete in some parts is not reinforced. Some manholes do not have lids.

People suspected that the contractor misappropriated funds in order to take some money for themselves. According to phapluatplus.vn the contractor as well as the consulting company were no longer in Vietnam.

Kukdong E&C, established in 1947 as Daeyoung E&C, was the contractor in some major projects in South Korea and internationally such as Seoul-Busan Expressway, Daegu World Cup Stadium, Korea World Trade Tower and the Petronas Twin Towers. Meanwhile, Sambo E&C, established in 1976, has also been involved in many civil engineering projects in South Korea and other countries.

In late 2013, South Korean contractor Posco E&C was involved in a scandal in which they did not build the Ho Chi Minh City-Long Thanh-Dau Giay expressway according to design, specifically the depth of the foundation as well as the road barrier did not meet the requirement. The investor, Vietnam Expressway Corporation (VEC), asked Posco to pay VND240 million ($11,000) to fix the parts and fired some people in charge, who were from Posco as well as VEC and the project management unit.

Keangnam faces fresh controversy over unpaid taxes

South Korean developer Keangnam Enterprise Ltd. is facing difficulties in Vietnam due to a series of tax issues arising from its key construction projects in the country.

Last week, northern Yen Bai province’s Tax Department confirmed with VIR its intent to collect tax arrears of over VND6.7 billion ($307,340) from Keangnam.

The decision came after an investigation found fraudulent behaviour in the declaration of royalties and payment of environment protection fees by the Korean firm.

In addition to fraudulent activities, as the main contractor of the Noi Bai-Lao Cai highway project’s segment stretching through Yen Bai province, Keangnam missed the completion deadline. The firm is also facing claims of poor-quality construction.

In November last year, Keangnam sent two documents to the tax department within a week, asking to halt pending enforcement measures, but the tax department replied with a simple shake of the head.

“Keangnam Enterprise Ltd. is not eligible for any clemency measures,” stated the Yen Bai tax authority in reply to Keangnam’s documents.

The tax agency must wait until the end of January 2016, by which time the debts will be overdue by a period of 90 days, before taking any enforcement measures.

In another project in the Phu Tho province, Keangnam so far has been unable to satisfy its tax obligations. Recently, the Korean firm sought a waiver of late payment fees from the provincial tax agency.

Keangnam won the bid to be the main contractor of a wastewater collection and treatment system project located in Phu Tho, in a deal valued at more than $41 million. The project received the majority of its financing ($32.906 million) as official development assistance from the Korea Economic Development Cooperation Fund.

Unlike the Yen Bai tax authority, Phu Tho Tax Department approved Keangnam’s request, as the tax agency was persuaded by the company’s argument that Phu Tho province’s late payment of the contracted value hindered its completion of tax obligations.

VIR contacted Keangnam’s subsidiary in Vietnam, Keangnam Vina Ltd., to ask about its plan to fulfil its duties in the aforementioned projects, but did not receive any response.

Earlier, its Hanoi-based Landmark Tower project faced tax arrears of VND95.2 billion ($4.37 million) in corporate tax for its apartment sales business. Keangnam was found to have wrongly declared VND1.2 trillion ($55.04 million) in 2013 and was forced to adjust its financial statements. The Landmark Tower, Vietnam’s highest building,  was recently acquired by the South Korea’s AON Holdings at the price of $800 million. The sale was conducted to resolve Keangnam’s liquidity problems.

Tan Hiep Phat hit by fresh fly-in-bottle dispute

Vietnamese beverage maker Tan Hiep Phat Group and its flagship energy drink have grabbed national headlines again as a consumer found an alleged fly inside an unopened bottle of Number 1.

On December 31, Tran Van Hung, of the north-central province of Nghe An, bought a Number 1 bottle from a local store and discovered a strange object inside when he was about to open it.

The object looked like a fly, with such body parts as the head, wings and legs, as observed by a Tuoi Tre (Youth) newspaper correspondent, who brought the story to the media on Thursday.

The energy drink was manufactured on October 9, 2015 and has one-year expiry.

Tan Hiep Phat, headquartered in the southern province of Binh Duong, has commented on the issue, shortly after the case was widely covered by the local press.

The company’s director of public relations, Nguyen Phan Huy Khoi, said it would be impossible for a fly to remain in its full shape after being kept in the bottle for more than three and a half months, from its manufacturing date to the time when it was discovered.

“We do not use any preservatives in our drinks, so it is irrational to say there is an undamaged fly inside,” he said in a media note released Friday.

Khoi said while Tan Hiep Phat has yet to confirm if the bottle was unopened, the company “always feels sorry” when a defective product is sold to consumers.

“We express our sincere apologies to consumers,” he said.

According to the media note, on December 13, Hoang Ngoc Hieu, sales manager in charge of the central region for Tan Hiep Phat, went to meet Hung after receiving his complaint.

Hieu wanted to recall the Number 1 bottle in question for investigation, and suggested giving Hung a cardboard box of the energy drink, worth VND250,000 (US$12), plus an ice tank and a crash helmet.

But Hung rejected both the request and offer.

Instead, Hung insisted that the bottle be sent to the local consumer protection association, according to the minutes of the meeting between the two men.

“I do not want to ask for money from the company,” Hung told Tuoi Treon Friday.

“I just want to know if they would ever buy back that bottle, which is a defective product.”

Hung added that he only seeks a civil agreement with the company, but Tan Hiep Phat said it does not have any policy to buy back defective products.

“I demand a clear answer from the company regarding that strange object found inside its product,” he said.

In 2014, a man named Vo Van Minh also found a fly inside an unopened Number 1 bottle at his eatery in the southern province of Tien Giang, and decided to use it to ask for VND500 million (US$23,300) from Tan Hiep Phat.

The drink maker agreed to pay Minh, but at the same time secretly called for police help. Minh was arrested when he was about to receive cash from Tan Hiep Phat, and was condemned to seven years behind bars on December 17, 2015 for “extorting assets” from the beverage maker.

The court ruled that by demanding money from the drink maker, the man had “mentally intimidated the company and caused harm for the entire society.”

After Tan Hiep Phat won the lawsuit, it was immediately hit by strong protests by consumers, who insisted it was unethical for the firm to treat its customer that way.

A huge wave of people have taken to the Internet to urge one another to ‘boycott’ products made by Tan Hiep Phat, leading to the company admitting to suffering whopping damage worth at least VND2 trillion ($89.29 million).

Pricol to set up auto component plants in Mexico and Vietnam

Coimbatore based automotive components manufacturer Pricol Limited plans to widen its international focus by setting up new plants and making acquisitions across the globe.

According to managing director Vikram Mohan, the company would set up plants in Mexico and Viet Nam and looks forward to making acquisitions in Europe to access the market as part of its vision 2020.

"Mexico is expected to be the largest (automotive component) market by the year 2018. The project in Viet Nam is expected by the next calendar year," said Mohan who was speaking as part of unveiling Pricol's new brand identity. The 40 year old company currently has eight manufacturing locations and seven international offices.

Pricol' Vision 2020 comes following a long episode of labour unrest, low margins and huge debts. Also, in January 2015 as part of its global expansion plans, Pricol had acquired an automotive powertrain manufacturing company in Brazil, Melling do Brasil, a move which put the company on its backfoot.

"Unfortunately the economy went for a toss after that..We are hoping it will take five years to recover our investments," Mohan commented.

However the manufacturer's consolidated annual revenue for FY 2014-15 stood at Rs 1150 Crores. "This year in March we expect to close with a revenue of Rs 1450 Crores, which is almost 20 per cent growth," noted Mohan. "The vision is to attain Rs 3000 Crore revenue by 2020,"Mohan noted, revealing plans to raise around Rs 500 crore for the new plans and projects.

Pricol is also setting up its new plant in Pune which would be functional by May 2016. Currently around 40 per cent of the company's revenue is drawn from two wheeler industry and 30 per cent from the four wheeler segment. Tractors, off-road vehicles, three-wheelers and others contribute to the remaining.

US supersizes investment

US firms are expecting to implement major investment projects in Vietnam in the near future, thanks to the country’s improvements in its business environment.

Nguyen Viet Ha, managing director of the US’ investment consultant BowerGroupAsia Inc, told VIR that some US firms were seeking investment opportunities in Vietnam in the IT and consumer goods sectors, with projects’ total investment capital expected to be over $1 billion.

These firms are selecting locations and waiting for the new leadership of Vietnam to be determined at the on-going 12th National Party Congress before making final decisions regarding their investment projects in the country.

Notably, Coca-Cola is reported to be planning another $300 million investment in Vietnam over the next few years. The company has invested $700 million in the country since 1994, $300 million of which was invested in the last two years alone.

Jabil, the world’s third largest electronic equipment maker, is also expected to begin a $500 million expansion of its existing $200 million factory in Saigon Hi-Tech Park in Ho Chi Minh City this year. A contract for the expansion was signed last July in Silicon Valley.

IBM Vietnam is expecting a double digit growth rate in Vietnam this year, after seeing a very high growth rate last year. In 2016, IBM Vietnam will likely begin major projects on cloud computing and analysis with big partners in Vietnam, including ministries, and partners in the finance, banking, telecommunications, health, and retail sectors.

According to the 2016 ASEAN Business Outlook Survey conducted by AmCham Singapore and the US Chamber of Commerce, over 500 senior business executives representing US firms in all 10 ASEAN markets, 84 per cent of respondents said they would likely see a profit in Vietnam in 2016.

Selected by 37 per cent of the respondents for future investment, Vietnam is also ASEAN’s second most attractive market (after Indonesia, with 41 per cent) in the survey. 76 and 50 per cent  said investment in Vietnam was more favourable than investment in other Asian and Western nations, respectively. 84 per cent of respondents in Vietnam also said ASEAN integration was important to their companies. 65 per cent in Vietnam stated that they had a regional strategy based on the ASEAN Economic Community’s goals.

Praising Vietnam’s business climate improvements, the US Department of State said in its 2015 Investment Climate Statement that Vietnam was serious about attracting foreign investment, especially in sectors that would bring advanced technology and improve Vietnam’s labour productivity.

“Vietnam’s attractiveness as a foreign direct investment (FDI) destination has grown as the country has made key legal reforms related to the business climate,” the statement said. “Other draws are Vietnam’s stable political system, strategic location near global supply chains, and an abundant labour force that is significantly less expensive than that of China.”

According to the statement, the conclusion and signing of any or all of Vietnam’s many active trade agreement negotiations “will open the door for a considerable increase in FDI.”

As of December 2015, the US was Vietnam’s 8th largest FDI source with the total registered capital of $780 million, up from 11th place in December 2014 and 15th place in December 2013.

SBV cash injection spurs credit growth

Through open market operations, the State Bank of Vietnam (SBV) exercises control over the liquidity of the banking system. During 2015, the bank injected a large volume of money to spur credit growth, and facilitate the purchase of government bonds and USD (from the SBV). It also extended the tenor of lending in the fourth quarter  for the first time in 2015.

Normally, before the Tet holiday, the central bank injects a large volume of money to support credit growth, which typically soars during this period, and gradually withdraws money thereafter until the end of the year. In 2015, the SBV injected a huge volume of money, not only during the pre-Tet period, but also over the last five months of the year. The substantial growth of credit was the main reason for the huge injection, to support short-term capital needs. By the end of the year, credit growth had reached 17.17 per cent, significantly higher than in 2014.

During the second half of the year, demand for short-term capital again surged as commercial banks speculated on the dollar after the SBV widened the trading band and raised the exchange rates in August, due to concerns that the Chinese yuan devaluation and the Fed’s interest rate hike would devalue the dong further in the near future. Demand for capital to buy the dollar therefore rose, interbank market rates increased strongly, and commercial banks consequently borrowed money from the central bank via open market operations (OMO). Due to a high demand for capital, interbank market rates in December reached their highest levels of five per cent per annum. Commercial banks therefore chose to borrow money via the OMO instead, with long maturities of up to two months.

More significantly, in December the SBV injected a net amount of VND114,087 billion ($5.1 billion), which was even higher – by 16 per cent – than the net injection volume in February’s pre-Tet period. This was because, in addition to credit growth and USD speculation, there was also a large volume of borrowing via the OMO to meet commercial banks’ need to make bond-purchase payments.

Despite disappointing bond issuance in the first three quarters, government bonds attracted the attention of commercial banks in December as they replaced bonds that had come due, and short-term bonds with less-than-five-year maturities were offered again in the primary market. In December, the total monthly bond issuance reached a four-year high of VND63,149 billion ($2.82 billion).

Trading in the OMO in 2015 was very active. The total amount of T-bills issued and reverse repo transactions conducted via the OMO reached VND1,137 trillion ($50.8 billion), up 10 per cent compared with the previous year, and comprising VND387 trillion ($17.3 billion) of T-bills and VND751 trillion ($33.5 billion) of lending via reverse repos. The strong growth in reverse repo transactions showed increased lending by the SBV to banks to support liquidity.

Instead of offering only one tenor for reverse repo transactions, in the fourth quarter of 2015 commercial banks were able to borrow money from the central bank with due dates of two weeks, three weeks, one month, or two months. T-bills issued were mainly those with short-term tenors of two weeks (contributing 29.8 per cent of total issuance), four weeks (27.9 per cent), and eight weeks (22.4 per cent), according to SBV statistics.

In 2015, the total amount of T-bills that came due was VND871.68 trillion ($38.9 billion), while VND294.46 trillion ($13.2 billion) of reverse repos came due. In total, the central bank net injected VND212.38 trillion ($9.49 billion) via OMO in 2015.

Mobile phone behemoth unveils 5-year diversification plan

Giant mobile phone retailer The Gioi Di Dong Joint Stock Company has announced plans to diversify into other retail segments in the next five years.

The Gioi Di Dong’s CEO Tran Kinh Doanh said to achieve the goal, the company, besides developing its mobile and electronic product chains thegioididong.com and Ði?nmáyXanh, would also focus on its Bach Ho Xanh chain of mini marts.

Mobile World began to develop the minimart chain — which sells vegetables, fresh meat, fish, and others — in the last quarter of 2015, and it has more than 10 outlets in HCM City.

Doanh told the English-language daily Viet Nam News that in 2016 the focus would be on developing the brand and not expansion.

The business is expected to break even in 2017, he said.

In 2016-20, The Gioi Di Dong plans to enter foreign markets by starting operations in neighbouring countries including Laos, Cambodia, and Myanmar.

Human resources have been trained well for this new venture and the company is ready, Doanh emphasised.

Another goal the company has set for itself in the next five years is becoming a leader in e-commerce, but it has not divulged details yet.

On January 20, The Gioi Di Dong reported that its 2015 revenues for the first time exceeded 1 billion USD.

Both revenues and profit overshot the target by 20 percent.

In 2016, the company targets revenues of over 34 trillion VND (1.5 billion USD) and profit after tax of over 1.4 trillion VND (64 million USD).

Ha Nam appeals for technical investment in industrial parks

The northern province of Ha Nam urged industrial park investors to develop their technical infrastructure in order to attract more investors.

Director of the provincial Industrial Zones Authority Tran Xuan Duong said the province prioritises advanced technology and environmentally-friendly projects with minimal energy consumption.

The province will bolster information and delegation exchanges regularly with representatives from investment promotion organisations such as the Foreign Investment Agency, the Investment Promotion Centre-North Viet Nam, JETRO-Japan and KOTRA-the Republic of Korea, he added.

The authorities will keep a close watch on project implementation in order to timely address any arising problems, and administrative procedure reform will also be strengthened in a bid to create the best possible conditions for investors.

In 2015, industrial parks in the province attracted 39 projects, 28 of which were invested in by foreign investors with a combined registered investment of $391 million.

To date, local industrial parks are home to 230 active investment projects. Of this figure, 131 were FDI. They have a total registered investment capital of $1.3 billion.

Meanwhile, 99 domestic direct investment projects have a total registered capital of nearly VND10 trillion ($455 million).

Currently, the province has eight industrial parks that cover an area of 2,000ha. The industrial park Dong Van III, which is under construction and geared towards the supporting industry, will apply its own mechanisms and policies. The locality has approved the plans of 18 industrial clusters, spread across an area of nearly 500ha.

Ministry of Transport divests $89m in January

Transport corporations under the Ministry of Transport have so far divested about VND2 trillion (US$89 million) in January, or 83 per cent of the entire divestment begun in 2015.

The divestment in January so far included VND457 billion ($20.35 million) or 100 per cent stake in the Civil Engineering Construction Corporations No.6 (Cienco6), VND212 billion ($9.4 million) or 23 per cent of stake in Cienco 5, and VND1.25 trillion ($55.6 million) or 98 per cent of stake in the Vietnam Motor Industry Corporation (Vinamotor). In January, MoT also divested from Company No. 623, a subsidiary of Cienco6.

Most of the divestment in 2015 was conducted in the subsidiaries while the divestment this year was mainly from the parent companies. Divesting capital would go to the State Capital Investment Corporation (SCIC), Vu Anh Minh, director of MoT's Business Management Department, said.

He said in the period 2015 to 2016, MoT has divested State capital in eight companies by lot divestment for the first time. The package in 2015 included 100 per cent divestment of Cienco1 and Cienco4, and part divestment from the Waterway Construction Corporation (Vinawaco) and the Transport Engineering Design Inc. (TEDI).

Thus, after the divestment in this period, most of the corporations no longer have any State capital, the director said.

As planned, during the first quarter, MoT will continue to withdraw all the remaining state capital VND100 billion ($4.45 million), or 25.5 per cent of stake from Thang Long Corporation, VND 100 billion ($4.45 million) or 29 per cent of stake from waterway transport corporation, VND200 billion ($8.9 million) or 40 per cent of stake in Cienco5, and VND40 billion ($1.78 million) or 29 per cent from TEDI, in addition to VND100 billion ($4.45 million) or 26 per cent of stake from Vinawaco, and VND100 billion ($4.45 million) or 40 per cent of stake from Cienco8.

It planned to complete the withdrawal of State capital from all 10 corporations which finished their equitisation in 2014. By the end of Q1, it was expected to reach between VND2.5 trillion ($111.3 million) and VND3 trillion ($133.6 million) from the divestment.

MoT said that from 2011 to 2015, 137 businesses in the transport sector went public, 67 more than the target. Domestic experts said the entire divestment by the State and the amended laws have helped create more favourable conditions and transparency about their work, bringing more good stock to the domestic stock market.

HCM City to restructure, equitise 57 SOEs

HCM City will restructure and equitise 57 State-owned enterprises in the 2016-20 period following approval from the Prime Minister.

The companies will be enlarged as part of the city's economic structure transfer programme. They mainly include corporations and parent-subsidiary companies.

Under the plan, 11 enterprises will be restructured, with the State still holding 100 per cent of the State capital.

Forty-six enterprises will be equitised, of which the State will hold above 65 per cent to under 75 per cent of charter capital in three companies, over 50 per cent to less than 65 per cent in 30 firms, and under 50 per cent in 13 companies.

As scheduled, nine SOEs will be equitised in the 2015-16 period, 13 ones in the 2016-17 period, 12 firms in the 2017-18 period and 12 firms in the 2018-19.

The city equitised 32 enterprises last year, meeting its plan. The State capital value increased by more than VND4.59 trillion (US$205 million) due to the re-valuation of enterprises.

Among 32 equitised enterprises, the State-owned shares accounted for more than 51 per cent of the charter capital in six companies, and less than 51 per cent in 26 companies.

Vinh Phuc seeks to export farm products

Vinh Phuc province plans to expand cultivation of its strongest exports in farm produce, such as red-flesh dragon fruit, Hong aromatic bananas and chayote, a type of gourd.

Recently, local authorities signed a memorandum of understanding (MoU) on co-operation in production and export of agricultural products with enterprises from Taiwan, Japan and Malaysia. The province has been accelerating restructuring of its agriculture industry, focusing on developing its strongest products for large-scale production using high-tech methods.

Watermelon prices sharply decrease

Watermelon farmers in Duc Linh District, coastal central province of Binh Thuan, worry about watermelon prices during the Tet festival, which sometimes fall.

The price of Hac My Nhan watermelon in the field are now selling for VND1,800 to VND2,000 per kg, having dropped nearly VND3,000 per kg from the beginning of the season. Last year, Hac My Nhan watermelon was sold at an average price of VND5,000 per kg to VND10,000 per kg.

Duc Linh District has over 200 hectares of watermelons, concentrated mainly in Me Pu, Vo Xu, Sung Nhon communes.

Euro Auto grows consistently in VN market

Euro Auto - the authorised importer of BMW brand – showed consistent growth in 2015, at over 40 per cent compared to 2014, in the Vietnamese market.

In particular, the index of satisfied customers for Euro Auto Vietnam reached over 97 per cent in 2015, according to company officials.

Also, 2015 was a successful year for BMW Group, which continuously maintained its position as number one in the luxury car segment worldwide. It was reported that total revenues grew 6.1 per cent, the equivalent of 2,247,485 cars worldwide.

AMD Group prepares to build factory in Thanh Hoa

The Thanh Hoa People's Committee approved, in principle for AMD Group Investment Joint Stock Company last week, to ask for permission to mine stone for producing construction material at Loang Mountain in Yen Dinh District of Thanh Hoa Province.

The project covers an area of 8.7 hectares.

Currently, AMD group has signed a contract, in principle, with strategic partner FLC Group to supply stone for building materials and non-refined brick for this key project of FLC Group.

Real estate inventory drops in January

The real estate sector reported a reduction of 1.75 trillion VND (78.2 million USD) in inventory in January from last month to an estimated value of 49.1 trillion VND (2.2 billion USD).

The Department of Housing and Real Estate Management under the Ministry of Construction said that vibrant transactions in the real estate market have tapered off property inventories in the month.

The highest inventories were recorded in residential land with over 6 million square metres worth more than 20.8 trillion VND (930.1 million USD), followed by town houses with 7,474 units valued at 13.27 trillion VND (593.5 million USD). Unsold apartments were calculated at 7,520 units worth 10.6 trillion VND (474 million USD) while that of commercial land was at over 1.5 million square metres, equivalent to nearly 4.4 trillion VND (196.8 million USD).

Unsold properties in Ho Chi Minh City were valued at 9.5 trillion VND (424.9 million USD), a decline of 621 billion VND (27.8 million USD) from December 2015. Most of the inventories were seen in apartment segment with 3,952 units (6.7 trillion VND), town house with 399 units (1.1 trillion VND) and residential land with 265,000 square metres (1.2 trillion VND).

Meanwhile, Hanoi saw a total inventory value of 6.56 trillion VND (293.4 million USD), falling 191 billion VND (8.5 million USD) from the previous month, mainly in town house inventory with 2,129 units worth 6.26 trillion VND (279 million USD). However, thanks to good liquidity, low inventory was reported in apartment segment with 268 unsold units worth 299 billion VND (13.4 million USD).-The real estate sector reported a reduction of 1.75 trillion VND (78.2 million USD) in inventory in January from last month to an estimated value of 49.1 trillion VND (2.2 billion USD).

The Department of Housing and Real Estate Management under the Ministry of Construction said that vibrant transactions in the real estate market have tapered off property inventories in the month.

The highest inventories were recorded in residential land with over 6 million square metres worth more than 20.8 trillion VND (930.1 million USD), followed by town houses with 7,474 units valued at 13.27 trillion VND (593.5 million USD). Unsold apartments were calculated at 7,520 units worth 10.6 trillion VND (474 million USD) while that of commercial land was at over 1.5 million square metres, equivalent to nearly 4.4 trillion VND (196.8 million USD).

Unsold properties in Ho Chi Minh City were valued at 9.5 trillion VND (424.9 million USD), a decline of 621 billion VND (27.8 million USD) from December 2015. Most of the inventories were seen in apartment segment with 3,952 units (6.7 trillion VND), town house with 399 units (1.1 trillion VND) and residential land with 265,000 square metres (1.2 trillion VND).

Meanwhile, Hanoi saw a total inventory value of 6.56 trillion VND (293.4 million USD), falling 191 billion VND (8.5 million USD) from the previous month, mainly in town house inventory with 2,129 units worth 6.26 trillion VND (279 million USD). However, thanks to good liquidity, low inventory was reported in apartment segment with 268 unsold units worth 299 billion VND (13.4 million USD).

Shrimp export to US expected to thrive

Vietnam’s shrimp exports to the US in 2016 will rise thanks to positive results from the ninth administrative review (POR9) for anti-dumping duties on Vietnamese frozen shrimp and the signing of the Trans-Pacific Partnership (TPP), according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

The average anti-dumping tariff rate levied on most Vietnamese frozen shrimp sold in the US market plummeted from 6.37 percent in the POR8 to 0.91 percent, as regulated in POR9. This has eased the tax burden on Vietnamese shrimp exporters.

In addition, the US’s growing demand for Vietnamese shrimp, spurred by the dollar’s rise, will increase the shipments. Rising demand has also resulted in vibrant shrimp retail promotion programmes in the US, creating opportunities for Vietnamese shrimp suppliers to boost exports to the country.

According to VASEP, the US remains Vietnam’s largest import market. However, last year Vietnamese shrimp exports to the American market stood at 657 million USD, dropping 38.3 percent from 2014 due to decreasing export prices, weak demand and fierce competition from foreign rivals.

In 2015, Vietnamese shrimp was sold in 92 markets, down from 150 markets the previous year. Key markets included the US, Japan, the EU, China, the Republic of Korea, Canada, Australia, ASEAN and Switzerland.

Dried fish, shrimp producers in Mekong fall short of Tet demand

People making dried fish and shrimp in the Mekong Delta are as usual unable to meet the massive demand that arises for Tet.

In Tra Vinh province, dried shrimp producers in Cau Ngang district's Vinh Kim commune have stopped accepting new orders for Tet because of the scarcity of shrimp.

Vinh Kim dried shrimp is made from tep bac dat, a finger-sized shrimp that lives in rivers and rice fields and has a natural pink colour, delicious meat and a unique favour.

Tran Thi Kham, who has produced dried shrimp for more than 30 years in Vinh Kim, said there is a lot of natural tep bac dat when a strong north-easterly wind blows.

But in the absence of the wind, the creatures do not appear in large quantities, she said.

Since supply is scarce this year, she estimated she would make 200 kilogrammes of dried shrimp for Tet, she said.

"The output is too small compared to the demand."

Vinh Kim now has only a few households making dried shrimp, with their combined daily output being 30-40kg.

The price of their product is 800,000 VND to 1 million VND (36-45 USD) a kilogramme.

The prices of many Tet specialities in Tra Vinh, including dried dua catfish, have not risen since last Tet, according to the province’s Department of Industry and Trade.

The delta, the country's largest fish and shrimp farming area, has an abundance of fish varieties for making dried fish including broadhead catfish, spot pangasius, and snakehead fish.

Many households along the Tien and Hau, two tributaries of the Mekong River, are now busy making dried fish for Tet.

They each have their own family recipes, and so the products are delicious.

Ngo Van Luc, who makes dried snakehead fish in Dong Thap province's Tam Nong district, said though the price of fresh fish has increased by 5,000 VND a kilogramme since last year, the final product remains at 100,000-120,000 VND (4.5–5.4 USD) a kilogramme.

This is because local producers have agreed not to increase the price of dried fish, he said.

Luc said he sells his dried snakehead fish to traders in HCM City.

Dong Thap and An Giang are major habitats of snakehead fish in the delta. Most of the dried fish here are produced traditionally by drying under the sun.

Besides snakehead fish, people in Tam Nong district have also begun to make dried fish from loach, catfish, and snakeskin gourami in recent years.

Dried snakeskin gourami, which is produced between December and May, is in great demand during Tet.

In Ca Mau province, more than 330 households together produce 10-15 tonnes of dried snakeskin gourami each year.

A kilogramme costs 400,000 VND (18 USD) in the market.

Tran Gia Lam, who has been making dried snakeskin gourami in Ca Mau's Tran Van Thoi district for three years, said his family earns a profit of 200 million VND (9,000 USD) every year during Tet.

Producers can make big profits, but they often face a shortage of fresh snakeskin gourami, he said.

The freshwater fish is found mostly in Ca Mau's U Minh Ha forest, he said.-

Myanmar – attractive market for Vietnamese goods: workshop

Myanmar is emerging as an attractive destination for Vietnamese goods, heard a workshop in Ho Chi Minh City on January 25.

The HCM City Investment and Trade Promotion Centre (ITPC) said Myanmar people are currently very interested in Vietnamese products.

A number of Vietnam-origin goods have made inroads into the Myanmar market such as plastic household products, apparel, footwear, electric and electronic devices, construction materials, stationery and food.

Some Vietnamese brands have gained a firm foothold there, including Kangaroo, Happy Cook, Dien Quang, Lioa, Visan, and Trung Nguyen, the centre noted.

ITPC Director Pham Thiet Hoa said although the low-end consumption segment makes up the majority of the Myanmar market, the middle and high-end segments are being expanded thanks to the country’s market opening.

He added that Myanmar consumers’ taste is also affected by customs and religions, and they prioritise shopping for goods for daily use and prefer products with discounts or promotions.

At the workshop, the ITPC announced that the Ho Chi Minh City Expo 2016 will take place in Myanmar’s Yangon city from April 1 – 4. The event will offer information on the trade, services and tourism of HCM City, and will have specific exhibition areas for hi-tech agriculture and building materials.

Meanwhile, municipal officials and businesspersons will conduct a market survey in Yangon and Mandalay cities from March 31 to April 5. The ITPC will also organise a workshop to provide Vietnamese companies with information on investment opportunities and tax and customs policies in Myanmar.

Vietnam exported over 378.5 million USD worth of goods to Myanmar in 2015. Bilateral trade is still modest compared to their trade with other ASEAN countries.

HOSE announces global industry classification standards

The Ho Chi Minh City Stock Exchange (HOSE) formally announced its Global Industry Classification Standards (GICS) on January 25.

GICS is an international standard developed by MSCI (Morgan Stanley Capital Investments) and S&P Dow Jones Indexes to provide an effective, detailed and flexible tool for investors to record rapid changes in separate fields.

It is used by most stock exchanges as well as index research institutions around the world.

Nowadays, more than 43,000 companies and 50,000 stocks worldwide are classified based on GICS, accounting for about 95 percent of international market capitalisation.

In addition, up to 9.6 trillion USD in stocks are benchmarked to the MSCI indexes and all use GICS.

Deputy Director of the HOSE Tran Anh Dao said the application of the GICS will help the Vietnamese stock market become more global.

This will enable investors, especially foreign ones, to enter Vietnam and diversify their investment projects.

Global sustainable rice production criteria applied in Vietnam

The global sustainable rice production criteria are to be applied in Vietnam for the first time, in large-scale fields in the Mekong Delta, which it is hoped to smooth the path for local rice to make its way to choosy markets.

The 46 criteria were launched by the Sustainable Rice Platform (SRP) – an initiative of the United Nations Environmental Programme, said Huynh Van Thon – Chairman of the Board of Directors of Loc Troi Group – at a workshop in An Giang province on January 25.

He noted the SRP’s members are the world’s leading agriculture groups, international quality recognising organisations, agriculture ministries of the top rice farming countries, and rice trading businesses.

When satisfying the 46 SRP standards, Vietnamese rice with its own brand will be able to enter the biggest and most demanding markets in the world, he added.

SRP Chairman James Lomax said this is an opportunity to provide sustainable income for farmers, protect the environment and ensure food security. He expressed his belief that local farmers are capable of applying those requirements well.

Rice cultivation of the Loc Troi Group will follow the 46 standards, which relate to rice field and nutrition management, farming preparations, water use, pest and disease control, harvest and post-harvest, health and safety, and labour rights.

The SRP requirements ensure productivity and cost price while controlling the use of pesticides and reducing greenhouse gas emissions. They also ensure food safety and workers’ health, as well as women’s rights and prohibit child labour.

The Loc Troi Group is a big Vietnamese rice processor with five factories processing 1 million tonnes of rice per year in the Mekong Delta – the rice hub of Vietnam.

Can Tho to become southwestern trade hub by 2020

The Mekong Delta city of Can Tho aims to become a trade and services hub in the southwestern region by 2020, with the sector making up 60.33 percent of its Gross Regional Domestic Product (GRPD), up 2.53 percent from 2015.

To realise the goal, the city has focused on restructuring the economy toward an increase in services – industry and hi-tech agriculture, while diversifying financial, trade and tourism services as well as those with high added value, said Deputy Director of the municipal Department of Planning and Investment Bui Ngoc Vy.

The city will fully tap its potential and advantages for finance and banking, trade, tourism, transportation, science, technology, and information and communication.

It will develop a retail market and encourage investment in trade centres, supermarkets and infrastructure in residential areas.

The city will mobilise its resources to expand traditional open markets, prioritise use of domestically made products, and strengthen trade and services ties with nearby areas.

It will also enhance trade promotion, with focus on large export markets, while increasing products with high competitiveness and values, processed agricultural products and high-tech ones.

A synchronous transport infrastructure system will be developed with a view to make the city a key transportation centre at home and abroad, she said, adding that tourism development will also be a priority.

In 2015, Can Tho earned more than 81 trillion VND (3.6 billion USD) from retail sales and services in 2015, up 14 percent from the previous year, naming it in the top three cities with the highest revenue from the sector in the nation.-

Minh Long I launches new ceramic products for Tet

The Binh Duong-based porcelain manufacturer Minh Long I has launched new ceramic ware aimed at meeting customers' decorative needs during Lunar New Year (Tet).

They include the Sac Xuan (Spring Charm) dinner set, coloured Mini Kirin statues and the Sen Vang tea set.

With its images of peach and apricot blossoms (on bowls and dishes), the dinner set evokes the influence of Earth and Heaven on Spring as well as the reunion and enhancement of close family ties.

Peach and apricot blossoms represent Vietnamese cultural beauty. The southern apricot blossoms symbolise good fortune while the northern peach blossoms are believed to be able to expel demons and usher in safety and happiness.

"Seeing peach and apricot blossoms, one can say that Tet and the reunion are coming," Minh Long I told customers about the Spring Charm dinner set.

One of four supernatural creatures venerated in East Asia, Kirin is believed to drive away evil and bring good. The 20cm, 1.1kg Kirin statues are available in yellow, white, green, blue, red, orange, brown, and black to meet customers' demands.

The coloured Kirins, with a pearl in their mouth and wearing lucky coins, are considered icons of a peaceful and prosperous Viet Nam and safety and happiness for Vietnamese families.

With lotus bulbs stretching into the air beside lotus blossoms, the small-sized Sen Vang (Golden Lotus) tea sets have both traditional and modern beauty at the same time.

One can admire the aesthetics while tasting fine tea and enjoying the pleasure of unions during TET.

Forty five years after its establishment, Minh Long I has a presence throughout Vietnam. Minh Long I products are also exported to many foreign markets like Germany, France, Japan, the Netherlands, the Czech Republic, and the US.

Tran Thanh Liem, Chairman of the Binh Duong Provincial People's Committee, said: "Minh Long I has taken great efforts to develop its brand names and expand markets for its products.

"Its stable and profitable operations have helped contribute significantly to the State coffers and create jobs for nearly 3,000 local workers."

Vietnam's energy sector forecast to see record FDI pledges

Vietnam's energy sector is set to become a new foreign investment magnet this year with at least US$4.5 billion to be committed for two new power plants, a government report said.

That was higher than the total foreign direct investment (FDI) pledges of over US$2.8 billion recorded by gas and power projects last year.

One of the two anticipated projects is a thermal power plant invested by Japanese and Korean energy companies Marubeni and KEPCO at a cost of more than $2.2 billion, the government's website said last week.

The investors are expected to apply for investment licenses for the 1,200-megawatt plant in the central province of Thanh Hoa within the first quarter, it said.

The other is also a 1,200-megawatt thermal power plant located in the northern province of Nam Dinh.

Its investors, Arab Saudi's ACWA Power and South Korea's Taekwang Power Holdings signed an investment agreement with the Ministry of Industry and Trade last week and are expected to receive a license this year, according to the website.

Both the projects will be developed under a built-operate-transfer agreement with Vietnam's government.

The government has planned 86 power plants for the 2011-2020 period and 18 thermal projects have been assigned to foreign investors, it said.

So far, six of the 18 planned projects have been licensed, it said.

Another six projects are still pending for licenses, although their investors, including Japan's Sumitomo, the Republic of Korea's Samsung C&T, Malaysia's Toyo-Ink and India's Tata Power, have signed investment agreements with the government.

Vietnam spends U$9bn on Chinese machinery, equipment in 2015

Vietnam spent over US$9 billion on Chinese machinery and equipment last year, up 15.4% year on year, according to the General Department of Vietnam Customs.

The money the Southeast Asian country spent on Chinese machinery and equipment made up 18.2% of total imports of Chinese goods last year, the largest sector out of 45, the general department said.

In 2015, China continued to be the largest trading partner of Vietnam with the total value of imports amounting to over US$49.5 billion, a 13.8% year-on-year rise.

The 2015 figures have made China the biggest exporter of machinery and equipment to Vietnam, a position the neighboring country has held for many years after surpassing Japan and the Republic of Korea, the customs department said.

The value of this group of Chinese goods accounted for 30% of total imports of machinery and equipment from Vietnam’s trading partners worldwide.

The import value of machinery and equipment in 2015 increased 23% compared with a year ago, a signal that business and production activities of Vietnamese enterprises began to accelerate.

The group of machinery-equipment was followed by telephone-components (US$6.9 billion), computers-electronic products and fabrics (over US$ 5.2 billion).

Moreover, Vietnam also spent more than US$4 billion importing 9.6 million metric tons of iron and steel from China, accounting for over half the money Vietnam paid for imported iron and steel worldwide in 2015.

Regarding automobiles, Vietnam bought 26,742 Chinese vehicles, representing 25 percent of the total number of cars imported into the country last year, the General Department of Vietnam Customs said.

If automotive parts and components were included, the money spent on finished vehicles and parts from China would reach US$1.7 billion.

VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR