FDI inflows drop in first half of the year

The country attracted US$6.85 billion in foreign direct investment (FDI) in the first half of this year, down 35% as compared to same period last year.

According to the latest report of the Foreign Investment Agency, of the total US$6.85 billion, US$4.85 billion came from 656 newly-licenced projects while the remainder was from 219 existing projects, which raised their levels of capital.

In a brighter spot, the period's FDI disbursement saw a modest increase of 0.9% and was estimated to touch US$5.75 billion.

The manufacturing and processing sector absorbed the largest share of FDI, touching US$4.8 billion or 70.2% of the nation's total registered capital. Construction and real estate trading industries ranked second and third, respectively.

Among the 41 countries and territories investing in Vietnam, the Republic of Korea is the leading source of FDI with US$1.55 billion, accounting for 22.6% the total FDI registered in the country. It was followed by Hong Kong (US$1 billion), Japan (US$806 million) and Singapore (US$732.1 million).

The economic hub of HCM City is the most attractive destination for foreign investors with US$886.3 million or 13% of the nation's total FDI, followed by the southern provinces of Binh Duong and Dong Nai, with US$876.1 million and US$688.37 million, respectively.

Other ideal localities preferred by foreign investors include the northern provinces of Quang Ninh and Hai Duong and southern Tay Ninh province, where they registered to invest US$573.5 million, US$382.1 million and US$349.9 million, respectively.

During the January to June period, the foreign-investment sector generated US$47.82 billion from exports, a yearly rise of 17% or equivalent to 67.5% of the country's total export turnover, while its imports reached US$39.29 billion, up 11.4%.

Government pushes domestic rice exports

Ministries and related sectors should closely follow the development of rice markets at home and abroad and expand trade promotion activities for increasing Vietnamese rice exports.

Deputy Prime Minister Hoang Trung Hai said that Government has issued a notice, focusing on the rice export situation in the past and on solutions for increasing rice exports in the future.

The Ministry of Industry and Trade (MoIT) will identify traditional rice export markets as the leading targets of export promotions and continue management of rice exports to markets having Government contracts, Hai said.

He added that the MoIT, the Ministry of Agriculture and Rural Development (MARD) and the Vietnam Food Association (VFA) will jointly follow the development of the world rice market and ensure balance between the domestic market's supply and demand for commercial rice and the real rice export situation in the world market. This will help the ministries and the related sectors to have effective solutions for increasing rice exports.

The MoIT and VFA will report to the Prime Minister the rice export situation of Government contracts to have reasonable management of exports to the markets coming under these contracts.

The ministry, VFA and related sectors will enhance trade promotion activities for rice product exports to traditional and new markets, implement efficiently the memorandum of understanding (MOU) on commercial activities for rice and other farming products and promote the signing of MOUs on trading activities with countries which import large quantities of rice.

The trade offices of Vietnam abroad will support enterprises in rice export promotion activities, Hai said. Meanwhile, the MoIT will give priority to capital for rice export promotion activities under the national commercial promotion programme.

The MARD, MoIT and VFA will build Vietnam's plan on developing trademarks for rice exports and have policies encouraging trademarks for rice product exports.

The VFA must suitably adjust the floor price of export rice as per the supply and demand in the domestic market and forecast rice exports to avoid any disadvantages for Vietnamese products, Hai said.

Vietnam exported 351,650 tonnes of rice in the first 19 days of June, bringing the total volume of rice exports since early this year to 2.68 million tonnes, earning US$1.16 billion.

In the first 19 days of June, Asia continued to be the largest export market for Vietnamese rice with an export volume of 267,500 tonnes, accounting for 76% of the total volume, followed by America with 61,318 tonnes.

Early this year, the association planned to export 6.5 million tonnes of rice in 2014 due to the high competitiveness in the world market.

Last year, Vietnam exported 6.7 million tonnes of rice, 11% lower than the initial export target, as the sector faced many difficulties.

EU a key Vietnamese shrimp consumer

The EU is now the third largest importer of Vietnamese shrimp, trailing behind the US and Japan, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

The EU’s shrimp imports have bounced back for more than a year thanks to the grouping’s economic recovery.

VASEP statistics show Vietnam raked in US$1.2 billion from shipping seafood to the EU last year, of which US$409 million was generated from shrimp products.

In the first two months of this year alone, Vietnamese shrimp exports to the EU also increased by a staggering 49% compared to the same period of 2013.

Thailand, one of the leading suppliers, saw a 50% decline in shrimp exports to the EU last year, opening opportunities for other shrimp producers, including Vietnam.  

Vietnam is currently the third biggest shrimp supplier to the EU after India and Ecuador.

Dong Thap studies Dutch experience in horticulture

A delegation from Dong Thap province recently completed a fact-finding tour of the Netherlands aimed at improving the efficiency, productivity and sustainability of agriculture and horticulture in the locality.

Dong Thap signed a cooperation agreement to construct a hi-tech agriculture centre in Dong Thap with the Dutch Demokwekerij Westland Centre and the Vietnam Business Centre (VBC) in the Netherlands.

The tour comes hot on the heels of the recent Vietnam visit by the Dutch Prime Minister during which a high number of deals were signed related to cooperation in agriculture and horticulture.

Most notably, VBC inked a cooperative agreement with Sa Dec City on the development of a flower city, trade and tourism promotion, and a bonsai and flower logistic distribution centre.

Dutch businesses that accompanied the PM also worked with Dong Thap leaders, discussing a feasibility study of a hi-tech agriculture centre in Dong Thap.

Dong Thap and the Netherlands agreed to set up a board of experts tasked with choosing technologies and varieties and training local engineers.

The Netherlands was committed to help Dong Thap import flower varieties, restore typical varieties in Sa Dec City, and train more than 20 engineers.

Potential for exporting construction materials to Middle East

Most Middle Eastern countries, particularly Saudi Arabia, have a high demand for importing construction materials and furniture, creating plenty of opportunity for Vietnamese businesses to access the market.

Nguyen Quoc Hai from the Vietnam Trade Office in Saudi Arabia made the statement at a seminar discussing the opportunities for exports to Middle Eastern countries, held in Ho Chi Minh City on June 25.

Experts said that Saudi Arabian businesses have tended to drift away from the traditional export markets of the US and European Union (EU) in favour of the emerging markets, including Vietnam, in recent years.

One of the appealing attributes of the Saudi Arabian market is that it is one of countries which impose the lowest tax on imports. All imported products are assessed a conservative low 5% tariff across the board.

In addition, the country does not introduce an income tax or valued added tax (VAT).

Each year the country requires around 60 million tonnes of cement and 25 million tonnes of construction steel to satisfy its construction needs. Given the market is there, Vietnamese businesses need to devise the proper strategy to access and penetrate it.

Tran Quang Huy, head of the Africa, West Africa, South Africa Market Department, said most Middle East countries have a high demand for construction materials, such as the UAE, Iran, Oman and Turkey for cement, the UAE, Turkey and Iran for steel, and Turkey for sanitary ware.

In addition, due to the climate in the region, these markets do not have adequate timber and wood materials and must, of necessity, rely heavily on imports of these products.

Meanwhile, consumers in these markets are keen on wood furniture, products that Vietnamese businesses are fully capable of competitively providing.

However, Vietnamese businesses should be prudent to carry out their market research, and particularly careful about marketing and promotion campaigns as Middle East cultures tend to be sensitive to religion and a number of social issues, Huy warned.

Export products must also comply with rigid quality and packaging standards as well as a host of environmental protection and consumption regulations, he said.

Furthermore, Vietnamese businesses should be proactive in the competitive bidding processes in the Middle East.

They are advised to make contact with agencies inviting bids for construction projects or bid winners to exchange and boost the export of construction materials and timber products to these markets.

Formosa proposes special steel zone in Vung Ang

Taiwan's Hung Nghiep Formosa Ha Tinh Steel Limited Company, a subsidiary of Formosa Plastics Group, has offered its services in setting up the government-managed Vung Ang special steel economic region.

The proposal was submitted to Deputy Prime Minister Hoang Trung Hai through an official letter 1406022/CV-FHS recently, after many requests on exemptions for all kinds of tax, reported cafef.vn.

According to the FHS, establishment of the special region is aimed at building the Son Duong deep-water port, and ensuring investment to the related industrial sectors of steel and electricity to promote industrial investment.

The company has proposed regulation on managing the special region located in Vung Ang, Ha Tinh central coastal province, as well as incentives for investment projects at the region.

It has also suggested a board under the Government's management for the region.

Earlier, the Government agreed to offer import tax incentives to the Formosa Ha Tinh Steel Project to create favourable conditions for the project's implementation. These include exemption of import taxes on a number of machines and equipment, creating fixed assets for the giant steel and port project and exemption of the natural resource tax on its sand sucking to level the project's surface.

The steel project is considered one of Vietnam's biggest foreign funded projects with the registered investment capital of nearly US$10 billion. The project is now under construction and is expected to begin operations in 2015.

The steel project is considered one of Vietnam's biggest foreign funded projects with the registered investment capital of nearly US$10 billion. The project is now under construction and is expected to begin operations in 2015.

Vietnam supports economic ties with Francophone states

Vietnam wants to strengthen economic relations with member states of the Francophone community and creates favourable conditions for Francophone businesses to operate efficiently.

Deputy Prime Minister Vu Van Ninh made the commitment at a June 25 forum in HCM City to boost banking cooperation between African and ASEAN nations of the Francophone community.

Ninh said the organisation of the forum shows the desires of bankers of both sides to establish partnerships, and facilitates trade exchanges between Vietnam and African nations, so as to step up South-South cooperation in the Francophone economic space.

He hailed progress in trade ties between ASEAN and Africa with the Francophone community, noting that two-way trade value between Vietnam and African nations alone hit US$4.29 billion in 2013, up 22% over the previous year.

However, he said the figure is not commensurate with both sides’ potential that requires greater efforts from community members.

Vietnam, an active, responsible and constructive Francophone member, supports an economic development strategy within the dynamic Francophone space, Ninh said, adding that it wants to develop stronger ties with Francophone member states, as well as with African nations and other ASEAN nations.

Vietnam, expecting to complete 14 free trade agreements (FTAs) from 2015 to 2020, will play an important role in fostering the large Asia-Pacific economic connectivity and connecting the ASEAN Economic Community to be formed in 2015, he said.

Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry, said Vietnamese exports to Africa grow by between 30-40% annually, but payment is the biggest obstacle to increasing trade ties.

He pointed out the fact that most African banks have yet apply modern payment methods like deposits or deferred payment, posing risks to Vietnamese businesses.

In addition, high transport costs, a lack of information, and limited trade promotions also affect trade development between the two sides.

Loc suggested completing a cooperation mechanism between Vietnam and African nations and stepping up operations of inter-governmental committees.

Sylvere Bankimbaga, Deputy General Director of the Burundi Commercial bank, echoed Loc’s view, saying a complete mechanism is needed to facilitate the movement of financial flows, by reducing transaction costs through intermediaries.

He also underlined the need to increase the exchange between bankers to promote mutual understanding, making it easier for payment among credit organisations.

Vietnam has developed trade ties with more than 220 countries and territories from across the globe, with total trade value reaching over US$155 billion, an annual increase of nearly 20% during the past 20 years. More than 12,000 FDI projects have operated in Vietnam totalling US$192 billion.

Japanese investors target deals in Vietnam

Japanese investors are eyeing Hanoi’s high-tech and industrial sectors and are actively seeking increased cooperation opportunities with small and medium enterprises (SMEs) in the lucrative market.

The statement was recently made by Duangdej Yuaikwarmdee, Deputy Managing Director of Reed Tradex Company in a discussion regarding Japanese foreign direct investment (FDI) in Vietnam.

Japanese FDI currently is principally concentrated in the high-tech and industrial sectors and accounts for 22% of Hanoi’s total foreign investment, generating roughly 130,000 jobs and contributing US$109 million annually to the City’s budget, he said.

Vietnamese and Japanese SMEs also have great potential and distinct advantages for cooperation in the areas of finance, banking, health and human resources

However, Hanoi needs to accelerate the progress of reforms to streamline the often times complex and confusing paperwork and procedures to gain investment certificates, to strengthen confidence among Japanese investors and attract more investment, he emphasized.

Seiji Masuda, CEO of Sanko Fastem Company, in turn said that Vietnam is one of the destinations Japanese investors find most attractive. Our company is the largest anchor bolt manufacturer in Japan, he said.

With the ever-increasing number of factories sprouting up throughout Vietnam, business is booming for our company, he said, adding that anchor bolts are needed in all phases of construction and production.

The Vietnam Manufacturing Expo 2014 (VME) is an effective marketing tool for our company where we have the opportunity to explain and guide customers to use our products, Masuda said.

To assist the development of support industries in Vietnam, Vietnam Manufacturing Expo 2014 (VME) and Industrial Components and Subcontracting Vietnam 2014 (ICSV) is being staged in Hanoi on August 27-28.

Penetrating Middle East and African markets

African and Middle Eastern countries are potential markets having a high import demand for food, agricultural, seafood and consumer products that are Vietnam’s strengths.

The remark was made by Pham Trung Nghia, Deputy Head of the Africa, West Asia and South Asia Markets Department (AWASAMD) under the Ministry of Industry and Trade at a seminar in Hanoi on June 25.

Nghia said Vietnamese products have initially managed to gain a firm toehold in Africa, enjoying a trade surplus of US$1.023 billion in 2010, US$2.286 billion in 2011, US$1.453 billion in 2012, and US$1.464 billion in 2013.

As an added advantage, many African countries have trade pacts with the US and European Union (EU) providing preferential tariffs on exports, which opens the door wide for Vietnamese goods produced with cooperation partners in these markets to penetrate the US and EU markets.

Similarly, the Middle East has bright prospects for Vietnamese businesses on the horizon. Vietnam’s export surplus to this market mushroomed from US$1.714 billion in 2012 to US$3.740 billion in 2013.

Tran Thi Lan Huong, Deputy Editor-in-Chief of the Africa and Middle Studies Magazine, said that currently a number of Vietnamese products have high competitive and comparative advantages in these markets.

Vietnam exports a highly diverse array of products to Africa and the Middle East. Certain products like garments, coffee, peppers, computers, and electronic components, have laid solid inroads into these markets, earning a solid reputation for quality and price.

Meanwhile, a number of other products such as seafood, vegetables and fruit have yet to gain widespread acceptance, and the African and Middle East markets are largely untapped, leaving Vietnamese businesses substantial opportunities for expanded export growth.

To seize the opportunities and capitalize on the opportunities presented, Vietnam should give priority to key fields and key products, Huong advised.

Specifically, Vietnam should focus on the Egyptian, Algerian, South African and United Arab Emirates (UAE) markets and then branch off from these markets expanding trade into northern Africa through Egypt, to Sub Saharan Africa through South Africa and to the Gulf Cooperation Council (GCC) through the UAE, she said.

However, Vietnamese businesses should be somewhat wary, and require their cooperation partners to place a security deposit at least 30% of the contract’s value in advance through the Vietnamese Trade Office.  This will serve to minimise risks, AWASAMD leader Thu warned.

The MoIT is organizing more fact-finding tours to assess and capitalize on the full potential of key markets in Africa and Middle East for businesses, he said.

Vietnam, Cuba promote bilateral trade ties

Minister of Industry and Trade Tran Tuan Anh led a delegation from the agency on a working visit to Cuba from June 21-24, aiming to strengthen trade and investment cooperation between the two nations.

At a working session with Cuba’s Deputy Minister of Industry Eloy Alvarez, the two ministers put words into action signed a Memorandum of Understanding (MoU) for industrial cooperation.

The agreement concentrates on bolstering short and medium-term industrial cooperation in light industry and the production of consumer goods to serve the domestic markets of both nations.

It provides Vietnamese businesses enhanced opportunities to increase their investments in the garment and textile sector in Cuba as well as in the manufacturing of leather shoes and other consumer goods.

At the meeting with leaders from Cuba’s Ministry of Foreign Trade and Overseas Investment, Deputy Minister Anh highlighted Vietnam’s recent accomplishments in modernising local production and boosting global exports.

Anh suggested that the host country create a Cuba and Mariel Special Development Zoneto provide a preferential mechanism for Vietnamese businesses to invest in Cuba.  Creating such an industrial zone would mark a turning point in cooperation between the two nations, he said.

Representatives from Cuba’s Ministry of Foreign Trade and Overseas Investment agreed to continue to use their best efforts to offer favourable conditions for Vietnamese investment in the nation.

For his part, Deputy Minister Eloy Alvarez, echoed their sentiments pledging that Cuba will strive to make industrial cooperative relations reap fruitful results in the future, for the mutual benefit of both nations.

Petrol prices reach record highs in Vietnam

Petroleum traders in Vietnam have decided to increase petrol prices by VND330 per litre, to VND25,230, the highest they have ever been.

The Ministry of Finance and the Ministry of Industry and Trade said the price hike took effect from 8pm on June 23.

Petrol prices reached record high on June 23.

As a result, prices of gasoline were raised by VND330 per litre, kerosene by VND170 per litre and fuel oil by VND270 per kilo. Prices of diesel were kept unchanged.

The ministries said that the price hike was a result of the recent sharp increase in the world petroleum market.

In addition to the price hike, the Ministry of Finance requested petrol companies to decrease their use of of the petrol price stabilisation fund from VND440 per litre to VND300 per litre for gasoline, and from VND410 to VND300 per litre of fuel oil. They were also asked to halt the use of the fund for diesel and kerosene prices.

The price hike has brought petrol prices in Vietnam to a record high of VND25,230 (USD1.18) per litre of gasoline, VND22,540 (USD1.05) per litre of kerosene and VND18,800 (USD0.88) per kilo of fuel oil, while diesel stayed at VND22,530 (USD1.05) per litre.

This is the second petrol price adjustment within two weeks. On June 12, the price of diesel was lowered by VND150 per litre and kerosene by VND110 per litre.

HCM City revokes licenses for real estate projects

While municipal authorities in HCM City are planning to revoke the licenses of hundreds of real estate projects, investors place blame on cumbersome regulations.

Authorities of HCM City have asked the local Department of Natural Resources and Environment to review all ongoing real estate projects. The result of the review showed that, out of 479 projects, 327 were behind schedule. One example is the Hanh Phuc urban area project, with an estimated capital of VND9 trillion (USD43 million). The area would have covered 42 hectares, including apartments, housing and schools. It was expected to be finished by 2016, but there are doubts about this deadline at the moment.

As of now, the ground clearance rate has only reached 30%. The Government Inspectorate once suggested the revocation of licenses from a number of investors. But authorities of HCM City asked to give investors an extension to complete the project. However, even with the extension for investors of the Hanh Phuc project as well as investors of hundreds of other real estate projects in the city are coming to an end with little to no progress.

On the other hand, investors have said that procedures should be more flexible and comprehensive. This, they say, would allow them the time to complete projects as quickly as possible.

Nguyen Thi Nhu Loan, Chairwoman of Quoc Cuong Gia Lai Group, the investor of the Phuoc Kieng urban area said the scale of the project is about 90 hectares. They cleared 60 hectares, clearance became an issue after the surrounding residents disagreed.

Current regulation stipulates that any investors or enterprises must negotiate terms of clearance before construction presumes, putting the onus on them.

Loan said they were asking authorities to allocate the first 60 hectares for construction or they would run out of time. "The authorities told us the project would be open for bidding again. We had already taken on VND1.5 trillion in loans. If we actually had to go through all the complicated paperwork again, the interest would have increased by VND180 billion, and customers would have suffered from losses as well."

The local Department of Natural Resources and Environment said that in any case in which investors want to stick with those stagnant projects, the department will give administrative consultation and municipal authorities might even decide to give assistance to investors who have completed 80% ground clearance.

Le Hoang Quan, Chairman of HCM City People's Committee, said they would review each project carefully. Investors of several certain projects will be supported, but incapable investors licenses would be revoked.

Efforts made to protect domestic production, customers

The National Steering Committee for anti-smuggling, trade frauds and counterfeit goods (called the Steering Committee 389 in short) on June 24 announced the establishment of its Standing Office to help further protect domestic production.

At the ceremony, Deputy Prime Minister Nguyen Xuan Phuc confirmed that the Government, ministries and localities nationwide have worked very hard to combat trade frauds, smuggling and the trading in counterfeit commodities.

The illegal activities are, however, taking place in a more complex manner on a larger scale, badly affecting consumers’ health as well as social order, he noted.

Dealing with the situation, the Steering Committee 389 Office, which will sit at the headquarters of the Customs Office, is expected to make sizeable contributions to fighting the trading in contraband, counterfeit goods, and trade frauds, stabilizing the macro-economy and safeguarding domestic production, Phuc said.

Earlier, on June 15, the Department of E-commerce under the Ministry of Industry and Trade introduced a system to assess the trustworthiness of e-commerce websites in Vietnam to help local customers stay away from online trade frauds.

The system will evaluate each e-commerce site basing on credibility, payment method, internet environment and quality of traded products. The result will be published on the trade and industry ministry's website at www.moit.gov.vn.

Online trade has experienced growth, thanks to its convenience and diverse offerings of goods. The sector generates revenue of 2 billion USD each year in Vietnam.

However, recent cases of fraud by e-commerce websites have raised serious concerns among consumers over the credibility of this model of trading.

It is expected that the e-commerce website evaluation system will help improve the e-commerce environment and protect consumers from fraudulent websites.

Business confidence still fragile

The business confidence in this year’s first half has improved a little compared to the end of 2013, but the business outlook this year still looks fragile, according to a survey conducted by the Vietnam Chamber of Commerce and Industry (VCCI).

The survey conducted by VCCI’s Enterprise Development Institute in late April and early May among 500 domestic businesses shows that the so-called move index in the first six months stays at minus five points compared to minus 21 points a year earlier.

The move index is the difference between the number of optimistic enterprises and the number of those saying the situation will be worse.

Doan Thi Quyen from the institute said at the survey announcement in Hanoi last week that although the result is not completely positive, it reflects better business confidence among domestic firms.

More enterprises expect growth in output in the second half of this year, according to the survey.

In the first five months, 22% of enterprises achieved their revenue target, 28% met more than 90% of their goal, more than 16% reached 70% of target and 34% had revenue under 70% target.

The VCCI report also warns that some macroeconomic factors, especially import-export, forex and financial market, can pile pressure on economic growth in the last six months this year.

Ministry submits final draft on petrol trading

The Ministry of Industry and Trade, recently submitted its final draft of the amended Decree to the Government on the trading of petrol.

The Decree No 84/2009/ND-CP, issued in 2009, allowed traders to control the retail price of petrol in the local market. Accordingly, traders were able to increase the retail price by 7 per cent if wholesale prices surged by the same percentage.

However, the draft, if approved, will allow traders to increase the retail price by only 3 per cent irrespective of the fluctuation in wholesale prices.

The draft says, additional cost will be calculated and managed by the State Price Management Agency, adding that if the wholesale prices increase more than 7 per cent, the Government will step in to manage fuel prices in the market.

According to Industry and Trade Minister Vu Huy Hoang, the draft will bring local fuel prices more in sync with world prices and boost competitiveness among petroleum firms. It will also end monopoly and serve consumers better.

However, economist Ngo Tri Long told danviet.vn that the draft, which still lets traders control prices, does not help consumers at all. Long said the local fuel market did not have any real competition as over half of the total 21 fuel traders were part of the Viet Nam National Petroleum Group or Petrolimex.

Economist Vu Dinh Anh added that among 11 petroleum importers in Viet Nam, Petrolimex accounts for almost 60 per cent of fuel supply while Viet Nam Oil and Gas Group or PVOil accounts for nearly 20 per cent.

Anh suggested that the State should determine the market price by setting a ceiling price on fuel products so that traders have to strive to reduce the cost of fuel management, lower prices and attract customers.

The ministries of Finance and Industry and Trade announced higher retail prices for petrol, kerosene and mazut from 8pm on Monday.

Petrolimex, the country's largest fuel wholesaler increased the price of fuel. Each litre of petrol cost another VND330 (US$0.015) at VND25,230-25,730 ($1.20-1.22) while an addition of VND170 was put on kerosene, which was now VND22,540 ($1.07). Mazut was also sold at VND18,860 ($0.89), an increase of VND270 ($0.012) per litre. —

Jetstar Pacific to launch HCMC-Hue service

Low-cost carrier Jetstar Pacific will launch a new service connecting HCMC and Hue on July 10 to meet increasing demand for summer travel.

Jetstar Pacific will use Airbus A320 aircraft with 180 economy class seats for its daily service between the two cities.

The flight departs at 10:25 a.m. from HCMC and the return flight takes off at 12:20 p.m. from Hue. The ticket price starts from VND550,000 per one-way trip.

Jetstar Pacific now flies to HCMC, Hanoi, Danang, Vinh, Haiphong, Buon Ma Thuot, Nha Trang and Phu Quoc.

Two other domestic airlines, Vietnam Airlines and VietJetAir, also have flights on the HCMC-Hue route.

Saigon Co.op lends a helping hand to litchi consumption

HCMC-based store chain operator Saigon Co.op is helping farmers in northern provinces ease the litchi glut by selling more than 10 tons of litchi per day at its supermarkets and food stores in the south.

Saigon Co.op said since early this month its Co.opMart supermarket chain and Co.op Food store chain have launched programs aimed at boosting fruit consumption with litchi being put on top of the list.

Saigon Co.op has also conducted surveys at litchi farms to evaluate the production process of the fruit so as to ensure the product’s quality for consumers and good prices for both growers and itself, avoiding the prices being manipulated by traders.

This month, Saigon Co.op has helped growers consume an estimated 200 tons of litchi and it expects to raise the volume to around 500 tons by the end of the month.

From late March to early April, Saigon Co.op in the central region also ran an ad-hoc promotion to increase sales of the fruit to help growers after China suddenly reduced import of the produce.

Transport ministry reports big earnings from SOE sales

The Ministry of Transport has posted VND1.9 trillion-plus revenues from equitization of State-owned enterprises (SOEs) under the ministry in the first half of this year.

A report on SOE restructuring in the first half and tasks for the second half this year says 10 enterprises in the sector have finished equitization as scheduled. For instance, Civil Engineering Construction Corporation 8, or Cienco 8, has completed its scheme to go public earlier than expected.

Of the total VND1.9 trillion, over VND1.12 trillion has gone to the SOE restructuring and development fund while the firms retained nearly VND839 billion.

In addition, enterprises under the ministry have plans to divest their holdings worth over VND228 billion from other entities this year.

Vietnam Airlines has pulled out of Bao Minh Joint Stock Corporation, getting back nearly VND58 billion. The national flag carrier estimates to recover VND7.2 billion from Hoa Binh Securities Company, VND14.8 billion from Air Service Supply Joint Stock Company and VND3.5 billion from Aviation Logistics Services Joint Stock Company.

This year, Vietnam Airlines expects to have over VND83 billion through its divestitures from four companies.

Vietnam National Shipping Lines, or Vinalines, has withdrawn over VND35.6 billion from six firms. Cienco 1 has also taken back over VND110 billion from two businesses.

Meanwhile, Vietnam Motors Industry Corporation has collected VND19.5 billion from two companies while Vietnam Waterway Construction Corporation has fetched VND4.9 billion.

Vietnam Railways Corporation has also hired consulting firms to evaluate 13 enterprises, from which it expects to get back VND53.4 billion.

Concerning bankruptcy, Vinashinlines filed for bankruptcy in Hanoi in March and Falcon Company also began bankruptcy procedures in HCMC in April.

Shipbuilding Industry Corporation (SBIC) reported that it has dissolved 12 units so far. SBIC plans to dissolve another 50 units in the future.

Emirates appoints new country manager for Vietnam

Emirates, one of the fastest growing international airlines, has appointed Mohammad Sarhan as its new country manager for Vietnam.

Graduated as a mechanical engineer, Mohammad Sarhan started his career as a project engineer in Dubai. Then he joined Emirates and has been working in the aviation industry for eight years. Having held the country manager position in Ivory Coast and Greece, Sarhan’s capacity in aviation, combined with his passion and commitment, promises to bring about an innovative element to the Emirates team in Vietnam.

In the role, he takes the mission of growing Emirates business and brand, and making Emirates the ideal airline of choice for both locals and foreigners in Vietnam.

“Emirates’ daily flight from HCMC to our Dubai hub not only offers Vietnamese travelers convenient connections to more than 140 destinations across 80 countries and territories, but also the award-winning cuisine and entertainment services that Emirates prides itself in gratifying any gourmet passengers,” said Mohammad Sarhan in a statement.

Emirates operates daily direct route between HCMC and Dubai using the Boeing 777-200ER, offering Business and Economy Class seats, with world-class cuisine and the award-winning in-flight entertainment system.

Taiwanese firms value Binh Duong’s investment climate

About 1,000 of 5,000 Taiwanese enterprises in Vietnam are operating in Binh Duong province, and they highly value the improved investment climate in the southern province, an executive from Taiwan (China) has said.

Soddy Huang, Vice President of the Association of Taiwan Investment Enterprises on the mainland China, made the remark on June 24, when his Kingtec Group signed a contract renting 16 hectares of land in Binh Duong to build a factory.

When operational, the plant, with its first phase worth 30 million USD, in My Phuoc No.3 Industrial Park will manufacture lighting devices of all kinds for export.

At the signing ceremony, Chairman of the Binh Duong People’s Committee Le Thanh Cung pledged best possible conditions for Kingtec to expand its operation.

In the first half of 2014, Binh Duong attracted 990 million USD of foreign investment from 74 new and 60 existing projects, fulfilling 99 percent of its yearly plan.

Currently, there are 2,305 foreign businesses in the province with a total registered capital of nearly 20 billion USD.

Binh Duong takes measures to attract more foreign investment

The southern province of Binh Duong has pledged to create more favourable investment conditions and ensure that the province remains an ideal destination for foreign investors.

Le Thanh Cung, chairman of the provincial People's Committee on June 24, told Viet Nam News that the province had attracted over US$1 billion in foreign direct investment since the beginning of the year.

The figure for the entire year would be higher than the figure last year, he said.

Cung also said that the volume of new capital was equal to the amount of additional capital, an indication that investors still had confidence in the province.

The chairman added that about 80 per cent of companies affected by protests in May that broke out about China's placement of an oil rig in the East Sea had resumed production and were expected to regain full capacity.

Yesterday, a Taiwanese company, the Kingtec Group, signed a land-lease contract with Becamex IDC Corporation to build a plant on 16 ha at My Phuoc 3 Industrial Zone in two phases (with the first phase worth US$30 million).

Soddy Huang, chairman of the Kingtec Group, said the company had chosen Binh Duong because 1,000 of the 5,000 Taiwanese investors operating in the country were located in the province.

Moreover, he said the local investment environment had improved day by day.

The plant, which will produce lighting products for export to the EU and the US, will begin operations within one to one and a half years. Machinery will be imported from mainland China.

French market holds potential

France's stable, transparent trade and investment policies make it an attractive market for Vietnamese goods, declared head of the Ministry of Industry and Trade's Trade Promotion Agency Bui Thanh Son.

Addressing a meeting in France's Vel-de-Marne Province on Monday, Son also described France as an important gateway for Vietnamese products to penetrate the wider EU market.

There remained untapped opportunities for both business communities after the Viet Nam-EU Free Trade Agreement, which is slated to be completed later this year, Son said.

During the event, representatives from Val-de-Marne Province detailed the local enterprises' financial potential and strength and the province's legal incentives for foreign firms operating in the area and for those that seek to bolster co-operation with local firms.

Jacques Fouvel, a representative from the French giant food retailer Casino Group, headquartered in Val-de-Marne, expressed his delight at the success of the Big C chain in Viet Nam.

Casino planned to expand its presence in Viet Nam, he noted, adding that it also expected to retail high-quality Made-in-Viet Nam products globally through its worldwide supply chain.

France is one of the leading trade partners of the EU. Last year, bilateral trade hit a record high of 3.5 billion euros (approximately US$4.76 billion). Of the total, Viet Nam enjoyed an export surplus of 2 billion euros (about $2.72 billion).

Among the Vietnamese export items recording high value were garments, seafood and electronic machinery and their components.

Earlier this year, the Ministry of Industry and Trade had encouraged businesses to focus on consumer goods customised for the preferences of French low and middle income segments.

According to the ministry's Import-Export Department, these segments remain fertile ground for Vietnamese products, which account for a mere 2 per cent of the markets, excluding footwear, which claimed nearly 10 per cent.

Oil prices push CPI up by 0.3% in June

The country's consumer price index (CPI) inched up 0.3 per cent in June as against May amid a petroleum and gas price hike, according to the General Statistics Office (GSO).

The petroleum price increased 0.15 per cent in June while the rising figure of gas was 1.43 per cent, the office reported.

Deputy Director of the GSO's CPI Department, Do Thi Ngoc, said that the index's rise in June was relatively high, when compared with the 0.05 per cent increase in June 2013 and the 0.26 per cent decline in June 2012.

It was also the highest surge in the past few months. The CPI in May decreased 0.44 per cent before it rose 0.08 per cent in April and 0.2 per cent in May, Ngoc said.

As many as 10 out of the 11 baskets of goods contributing to the calculation of the CPI data saw their prices increase this month. Prices of medicine and health-care reported the highest price hike of 0.74 per cent, in the wake of a sharp hike in health-care service fees in HCM City, from June 1.

According to a decision by the HCM City's People Committee, higher charges will be applied to 2,000 types of medical services, including check-ups, beds for in-patients and technical services as well as surgery costs, in the city's 378 public hospitals.

Prices of housing and construction material (including rent, electricity, water, fuel and construction materials) came second with a rise of 0.61 per cent.

In June, prices of food and foodstuff, which account for the largest slice of the CPI cake, increased by 0.28 per cent.

On the down side, prices of postal services and telecommunication baskets fell by 0.13 per cent this month.

Not included in the CPI components, gold prices in June dropped 0.12 per cent on month and lost 9.79 per cent on year while the US dollar prices this month gained 0.49 per cent on month and 0.57 per cent on year.

In the urban areas, this month's CPI edged up 0.3 per cent on month while the index rose 4.49 per cent on year in rural areas.

Quang Ninh bans sale of rare plants

The northern province of Quang Ninh Province has officially banned all sales of rare and precious plants to foreign traders.

The provincial People's Committee has asked the agricultural and science and technology sectors and local authorities to compile a list of rare and precious plants that would be banned from export, it said.

The move aims to stop the collecting, breeding and gene enrichment of rare plants by foreign traders.

In recent years, foreign traders, mainly from China, had purchased large quantities of Vietnamese crops such as champa rice, black sticky rice and Hoa Vang sticky rice, as well as fruit trees and herbal plants, local authorities said.

These traders have reportedly used different methods to acquire the plants under the guise of tourists and relatives. Some even paid in advance to collect as many plants as possible.

They also hired local people to transport the plants through the border.

Most precious plants were mixed with other ordinary varieties to avoid detection.

In Quang Ninh Province, Chinese traders have been purchasing medicinal plants such as Phong Ba trees (Heliotropium foertherianum), Kim Tuyen orchids (Anoechilus roxburglihayata) and Ba Kich trees (Morinda officinalis How) for high prices since 2010.

For example, Kim Tuyen orchids are sold for VND1.6 million (US$76) per kilogramme, encouraging local people to over-exploit the trees in Binh Lieu District.

Vice chairman of the committee Dang Huy Hau said the purchasing activities of foreign traders was becoming more common and large scale.

Loose management of rare and precious plants, weak co-operation between authorised agencies and low awareness of local people had made the situation worse.

Pham Van Phat, deputy director of the Department of Agriculture and Rural Development, said the province would keep a close watch on the sale of rare plants to keep it under control.

SOEs classified into three groups for equitisation

Enterprises which have over 50 per cent State stakes and are to be equitised will be classified into three groups, Prime Minister Nguyen Tan Dung stipulates in Decision No 37/2014/QD-TTg dated June 18.

Based on the State stake ratios, the groups are: from 50 per cent to below 65 per cent, from 65 per cent to below 75 per cent, and 75 per cent or more.

The first group includes companies dealing in urban water supply and sewerage, urban lighting, environmental sanitation, natural resource exploration, seed plantation and basic chemical production, rubber growing and processing, and railway and international seaway transport.

The second group lists such areas as petroleum and natural gas processing, cigarette production, aviation, electricity distribution, banking and finance. It also consists of businesses stabilising the medicine, food and petroleum markets, as well as those managing forest plantation and improving people's lives in remote areas.

The third group mentions firms involved in the management, exploitation and maintenance of airports and terminals, national seaports, domestic road and waterway systems, telecommunications infrastructure, mineral, petroleum and natural gas.

Dung says the classification is a basis for speeding up the reorganisation and innovation of State-owned enterprises (SOEs).

He urges ministries, Government agencies, provincial people's committees and economic groups to review SOE reorganizing plan for the 2014-15 period and submit to him in the third quarter of this year.

He requests State stakes to be wholly maintained in enterprises for 16 sectors, including businesses involved in national defense and security, explosive material and poisonous chemical supply, national electricity transmission and railway operation.

The sixteen also consists of post services, maritime, lottery, publishing, money printing and casting, irrigational works management, plantation of protective forest, policy lending and business sectors that require strategic know-how.

The new decision replaces Decision No 14/2011/QD-TTg and will take effect on August 6.