Jan-Jun business startups surge in HCMC

The number of business startups in HCMC in the first six months of this year has leapt in both number and capital, according to the city’s statistics office.

The agency said nearly 14,100 enterprises, excluding new foreign-invested firms, had been set up from in the year to June 15, up nearly 26% year-on-year. These new enterprises had registered total capital of over VND95.2 trillion (US$4.36 billion), up a staggering 60%.

Services firms account for almost 76% of the new startups, followed by those in the manufacturing and construction sectors. The average registered capital of businesses in services, manufacturing and construction industries in the period are VND5.6 billion, VND4 billion and VND18.2 billion respectively.

January-May saw more than 5,500 enterprises suspending operations, down over 32% year-on-year.

However, the city’s exports in the first half of this year are forecast to shrink 6.3% year-on-year to nearly US$14.6 billion, due partly to the January-June crude oil export price fall.

Shipments of agro-aqua-forestry products, which account for almost 20% of the city’s exports, have declined nearly 10% year-on-year.

Vo Van Luan, office manager of the HCMC People’s Committee, told the Daily that the fall in agro-aqua-forestry exports is attributable to a strong drop in outbound rice sales. The city has seen rice shipments plummeting 73% to 339,000 tons in the period and 38% in value.

Luan explained the sharp decreases have resulted from weaker demand of regional countries for Vietnamese rice and mounting competition from major competitors including Thailand and India.

January-June incoming remittances are estimated at US$2.16 billion, equivalent to 44% of the same period last year.

But the good news is the city’s economy has been back to the high growth path as its gross domestic product (GDP) in the first half is put over VND417 trillion, rising by 8.55% year-on-year and the highest H1 growth in three years.

Thai Van Re, director of the HCMC Department of Planning and Investment, was cited by Vietnam News Agency as saying at a review meeting on the city’s socio-economic performance yesterday that the city’s key industries including manufacturing and construction have grown 6-9.8% in the first two quarters.   

Services and goods sales in the year to date have increased by 10.9% year-on-year to more than VND323.2 trillion, and the growth is 10.2% if price factors are excluded. Of the total figure, goods sales are estimated at over VND256 trillion, up nearly 12% year-on-year.

By June, banks in the city have reported total deposits of VND1,384 trillion, up 3% against late last year and 14.82% year-on-year. Outstanding loans have totaled VND1,125 trillion, up 5.4% over late 2014 and 14.86% compared to the first half of last year.

Re said the deposit and lending increases showed an improvement in capital flows and that the city has been successful in implementing a lender bank-corporate borrower matching program.

Nineteen participating banks in the program have pledged to lend a total of more than VND65.72 trillion to 1,498 enterprises, with more than VND38 trillion of it disbursed for 783 borrowers.

Companies have registered combined investments of over US$623 million for new and operational projects in industrial and hi-tech parks and export processing zones in HCMC in the first six months, soaring over 87% year-on-year.

Budget collections have expanded over 6% year-on-year to more than VND134.7 trillion, with over VND75.6 trillion from domestic sources, VND47 trillion from imports and exports, and more than VND12 trillion from crude oil.

Dao Thi Huong Lan, director of the HCMC Department of Finance, was quoted by Vietnam News Agency as saying that the budget revenue rise indicated manufacturing and trading firms have performed better this year.

Re said the city government would continue to assist local enterprises in improving their competitiveness and training as well as boost the restructuring of State-owned enterprises.

HCMC chairman Le Hoang Quan said the city government would establish a steering committee to help local enterprises bank on the opportunities from Vietnam’s integration into the global economy.

Next month, the HCMC Department of Industry and Trade and other agencies will have to draw up plans to support enterprises under their management to better prepare for the nation’s intensive integration.

The city government will organize trade and investment promotion trips for local enterprises to find more export markets and at the same time retain customers in traditional markets.

Vietnam goods on show at Lotte Mart Saigon South

Around 60 Vietnamese firms on June 24 started showcasing their wares at an exhibition at Lotte Mart Saigon South in HCMC’s District 7.

The South Korean group Lotte will select the quality Vietnamese products on display at the exhibition, which lasts until this Sunday, for sale at its supermarkets in Korea.

Lotte Vietnam Shopping Co. Ltd. will spend about US$1 million this year buying around 200 more products of Vietnamese firms for export to Korea, according to Tran Thi Nghia, legal and public relations team leader at the company.

Nghia said 114 Lotte supermarkets in Korea have Vietnamese-made products on their shelves.

Nghia said the value of Vietnamese goods to be bought by Lotte at the exhibition would be four times higher than that of last year’s exhibition (101 products and a total value of US$250,000).

Lotte currently has 10 stores in Vietnam with locally-made products accounting for 95% and the remainder Korean goods.

Hoang Thanh Tung, head of export at Duy Tan Plastics Corporation, said the company has not exported products to Korea. However, the company has decided to find Korean importers of its products as trade ties between Vietnam and Korea have grown.

According to the representative at Lotte, the Korean market is quite picky and Korean consumers care much about designs, quality and food hygiene. This is what Vietnamese firms should pay attention to if they want to penetrate the market.

MTA Vietnam 2015 to attract over 340 exhibitors

* Around 342 enterprises from 20 countries and territories have put their names down to join the 13th International Precision Engineering, Machine Tools and Metalworking Exhibition and Conference (MTA Vietnam 2015) scheduled to kick off in HCMC on July 7.

Foreign enterprises will make up 70% of the total exhibitors at the four-day event at Saigon Exhibition and Convention Center (SECC) in District 7. They are from Germany, Japan, the United States, Italy, South Korea, Taiwan and China, among others

VCCI Exhibition Service Co. Ltd. and Singapore Exhibition Services Pte. are organizers of the expo.

Firms confident in talent retention

While many enterprises have expressed concern that their talented employees will go after the ASEAN Economic Community (AEC) comes into being late this year, firms in certain sectors are optimistic that they will be able to retain their key staff.

Ly Ngoc Minh, general director of Minh Long I Co. Ltd, a well-known local producer of ceramic products, told a workshop in HCMC on June 24 that he believed his talented employees will not job-hop after the AEC comes into existence as the company belongs to a particular sector.  

He said the employees of Minh Long have been loyal to the company since its establishment. As they have expertise in ceramic production but little knowledge in other sectors, they would find it hard to find jobs in other industries.

Minh was confident that his company would be able to retain talent by offering high salaries. He said if they left Minh Long, they might become unemployed or land a new job with lower wages and benefits.

Similar to Minh Long, Phu Nhuan Jewelry Company (PNJ) said the AEC would not place much impact on the workforce of PNJ.

Nguyen Thi Ngoc Minh, director of human resources (HR) at PNJ, said that to retain talent PNJ found and supported people when they were university students or craftsmen, so they often devote themselves to the company.

She said talented employees would not job-hop but might go to foreign countries as some are keen to learn new things and face new challenges.

Tran Hung Huy, chairman of Asia Commercial Bank (ACB), said many employees have been working for the bank since they graduated from university but admitted that some want to get new experiences at other enterprises. So, talent retention is not all about the employer’s salary and bonus policy.

Huy said if senior employees leave and come back, they would have more good lessons to share with ACB.

Pham Phu Ngoc Trai, CEO of Global Integration Business Consultants, asked if firms would benefit when their job-hopping rate was 0%, and then asserted this would not be good as the motivation of their employees for the development of businesses were not strong.

Trai said many people worked for multinationals but later left for State agencies or their own businesses as they wanted to create more value and contribute more to society.

Credit growth improves in H1

Local banks have reported a strong improvement in first-half lending, with credit having grown 5.78% by June 15 compared to the end of 2014 and 18.98% versus the same period last year.

Credit growth was around 3.69% at the end of April and 4.26% by end-May but surged by 1.5 percentage points to 5.78% by June 15.

Banks continued to prioritize lending to the agricultural and rural sector as total outstanding loans in this sector were estimated to edge up 7.71% against late 2014.

VPBank Securities Co. (VPBS) said in a report that credit rose around 6.1% as of June 18 and roughly 3.5% year-on-year.

Credit for the real estate sector had grown 10.9% as of May 31.

The brokerage noted some banks such as HDBank, DongABank, Eximbank and PGBank had revised up their short-term deposit rates in Vietnam dong. The rate spikes came a few days after some larger lenders such as BIDV, Vietcombank and Agribank adjusted up their short-term deposit rates by 0.1-0.3 percentage point. This might have resulted from high credit growth, VPBS said.

According to the National Financial Supervisory Commission, deposit rates were poised to inch up as the pickup of deposits had been lower than credit growth last month. Short-term rates on the inter-bank market also moved up by an average of 0.5 to 0.7 percentage point compared to the previous month, indicating a recovery of capital demand.

The second reason might be an imbalance between deposit and lending sources. The ratio of medium to long-term loans to total outstanding loans rose to 52-55% at the end of May compared to 48% last year. Short-term loans accounted for less than 50%.

The dong devaluation against the greenback has stoked speculative capital flow into exchange rate investments instead of bank deposits. Therefore, higher deposit rates would attract depositors back to banks.

“Also, we note that the central bank has net withdrawn over VND50 trillion (US$2.3 billion) from the open market operations (OMO) from early May, resulting in commercial banks lacking in short-term liquidity,” said VPBS.

In theory, raising deposit rates will lead to a rise in lending rates. However, with Directive 01/CT-NHNN issued in January 2015, the central bank requires commercial banks to reduce lending rates for mid to long-term loans.

The rising demand for capital suggests positive signs of the economy, but this situation will possibly squeeze profits of commercial banks, if they keep raising deposit rates while cutting or maintaining lending rates, VPBS added.

Since the end of May, a number of commercial banks have added 0.2-0.5 percentage point to deposit rates for tenors of six months or longer to meet rising demand for medium- and long-term loans.

A banker told the Daily that some banks are offering higher interest rates for deposits to compete with others and retain customers, not just because of stronger capital needs.

A deputy general director of a commercial joint stock bank shared the same view, saying his bank plans to increase deposit rates but not because of higher demand for capital.

“As some banks have revised up their deposit rates, customers have asked us for higher interest rates,” he said.

Ministry rejects iron ore tax reduction proposal

The Ministry of Finance has turned down a proposal of eight member companies of the iron ore mining and processing association to lower taxes and increase export quotas of this mineral.

The eight private mining companies in the northern provinces of Phu Tho, Yen Bai, Lao Cai and Lang Son submitted the proposal to the ministry in the middle of April, saying 90% of the companies had gone bankrupt while the remaining 10% were struggling and unable to pay bank loans and wages for employees.

The mining companies blamed the bankruptcy on the world’s iron ore price fall from US$140 per ton in February 2014 to only US$48 per ton (63% Fe) as currently. Local steel producers even buy iron ore at a price lower than US$42 per ton.

Besides, the enterprises bemoaned high tax rates and many different fees. They calculated a ton of iron ore is subject to six to seven taxes and fees including environment fee, natural resources tax, right tax for mining, environmental restoration fee, value-added tax, corporate income tax and export tax.

The enterprises said such fees and taxes account for more than 50% of their production cost.

Due to the declining price and many taxes and fees, the association proposed the ministry cut the export tax on iron ore to 5%, increase export quotas, and adjust other fees for iron ore mining-processing and steel production.

The ministry said in a reply to the companies that its refusal is in line with the Prime Minister’s directive aimed to enhance State management over exploration, exploitation, processing, use and export of natural resources, including banning iron ore export.

The tax rate cut to 5% as proposed by the companies is impossible as the National Assembly’s resolution on import-export taxes fixes the export tax on iron ore at 15-40%.

Other tax and fee reduction proposals were also denied as, according to the ministry, such taxes and fees are collected in line with the exisiting regulations and have been taken into account the benefits of enterprises and the State.

When the world price of iron ore was high in the 2007-2008 period, local producers had to import iron ore at high prices and the number of mining companies mushroomed, especially in the northern region.

The Government banned iron ore exports in 2012 but illegal exports have since risen.

Jan-Jun fuel import grows 23%

Vietnam’s fuel imports had amounted to 4.7 million tons as of June 15, surging 23% against the same period last year, owing to strong demand on the local market and low prices on global markets.

Interim statistics of the General Department of Customs showed local enterprises had imported over 420 tons of fuels worth US$242 million in the first half of June, up nearly 10% in volume but down 35% in value over the same period last year.

In the year to June 15, local fuel enterprises had imported over 4.7 million tons worth nearly US$2.7 billion, rising by 23% in volume but falling 29.3% in value year-on-year. Diesel, gasoline and jet fuel registered stronger import volume increases.

Prices of all fuel products fell sharply thanks to the crude oil price drop on the world market. Each ton of fuel products averaged US$573, which was much lower than the US$943 in the same period last year.

Speaking to the Daily, Tran Ngoc Nam, deputy general director of Vietnam National Petroleum Group (Petrolimex), credited strong fuel consumption to higher imports and this suggested that the macro economic situation had improved.

Petrolimex is the leading fuel trader in Vietnam with around 2,500 retail stations. Its retail revenue jumped 10-12% in the period.

Nam said many wholesalers had increased and maintained fuel imports this year. In previous years, they imported more fuels when import prices went down and suspended imports when world oil prices went up.

Things have changed this year. Nam said fuel prices have been quite stable since early this year after plunging in 2014. Besides, local agencies have made price adjustments in line with global price developments and the fuel retail price review in every 15 days has helped fuel trading firms earn profit.

A deputy general director of a fuel trading firm in the south said more agents have joined the fuel retail market this year, helping wholesalers boost sales.

However, he said as small fuel trading firms have faced tougher competition this year, they have increased commissions for agents, VND1,000 per liter of fuel, though the distribution cost is regulated at VND1,050 per liter of gasoline and VND950 per liter of diesel oil or kerosene.

According to the Ministry of Industry and Trade, 22 companies have been licensed to import, export and distribute fuels on the local market.

PVFCCo meets half fertilizer demand in summer-autumn crop

The national urea fertilizer demand for this summer-autumn crop is estimated at more than 750,000 tons, of which over 350,000 tons will be supplied by PetroVietnam Fertilizer and Chemicals Corporation (PVFCCo).  

PVFCCo announced a plan to meet the demand for urea fertilizer on the domestic market after it resumed the operation of its fertilizer production factory in the southern province of Ba Ria-Vung Tau.

Following the regular maintenance from May 26 to June 20, the facility now can supply around 2,400 tons of urea fertilizer bearing the brand of Dam Phu My a day.

The fertilizer plant is capable of producing 800,000 tons a year, meeting around 40% of the country’s demand for urea fertilizer. The plant’s output reached eight million tons last February.

After the plant resumed operation, the urea price has come down on the domestic market. Level-one sales agents in the Mekong City of Can Tho sell Dam Phu My fertilizer at VND8,300-8,400 a kilogram while the respective prices of Ca Mau and Ninh Binh urea fertilizer are VND8,000-8,100 and VND8,100-8,200 a kilogram, down VND100-300 a kilogram against early last week.

In Tien Giang Province, a 50-kilogram bag of Phu My fertilizer is sold to consumers via level-two sales agents at VND440,000-445,000, or VND8,800-8,900 a kilogram. Meanwhile, Ca Mau and Ninh Binh fertilizer is priced at VND430,000-435,000 per 50-kilogram bag, equivalent to VND8,600-8,700 per kilogram and down VND500-600 per kilogram over early last week.

However, the current prices of urea fertilizer are still higher than in previous months when a 50-kilogram bag was sold at VND365,000-375,000.

Tran Thi Phuong, director of An Giang Province-based Chinh Phuong Co. Ltd., explained the fertilizer price fall might have resulted from the resumption of Dam Phu My fertilizer plant after the comprehensive maintenance was completed.  

Nguyen Duc Hien, sales director of PVFCCo in the southwestern region, told the Daily earlier that the fertilizer price hikes only happened in certain areas and during the period when Dam Phu My plant underwent maintenance.

As the plant was back to production, urea supply is expected to be stable in the coming time. On global markets, the price of urea stays stable, at US$285-315 per ton.

Ministries mull sea usage fee

Individuals and businesses will have to pay an annual fee of VND7.5 million (US$344.6) per hectare of sea surface allocated to them, according to a circular jointly drafted by the ministries of finance and natural resources-environment.

The draft circular also sets an annual fee of VND3-5 million per hectare for exploiting wind power, tidal power and sea waves, and VND4-7.5 million per hectare for laying undersea pipelines, and electric and telecom cables.

Floating or undersea structures, artificial islands, civil construction projects and other reclamation activities would be subject to fees of VND5 million to VND7.5 million per hectare per year. Annual charges of VND6-7.5 million per hectare would be applied to seaports, petroleum ports, facilities for ship building and repair, fishing and passenger ports, recreational projects, use of minerals and water to cool factories, waste discharge and antique search.

The ministries propose charges of VND3-7.5 million per hectare per year for other activities in the sea in the draft circular.

However, such charges will not be imposed on oil exploration and exploitation, seafood catching and farming, and security and defense purposes.

CII develops infrastructure in Thu Thiem

HCMC Infrastructure Investment Company (CII) plans to start work on infrastructure projects in the northern urban area and complete a north-south road in the Thu Thiem New Urban Area this Saturday.

The road stretches from Thu Thiem 1 Bridge to Mai Chi Tho Street while the northern urban area is in functional sections 3 and 4 in Thu Thiem Peninsula in District 2.

Nguyen The Minh, deputy head of the Investment and Construction Authority of Thu Thiem New Urban Area (Thu Thiem ICA), told the Daily on June 23 that the projects would be implemented under the build-operate (BT) format at a combined cost of VND2.63 trillion (US$120.6 million) in 18 months.

Thu Thiem New Urban Area consists of eight functional sections, with Section No. 1 for financial, banking and exhibition services; Section No. 2 for commercial, residential, sporting and entertaining facilities; sections No. 3 and No. 4 for residences; Section No. 5 for public works; Section No. 6 for software outsourcing and hospitals; Section No. 7 for high-rise buildings and hotels; and Section No. 8 for biodiversity development.

According to Thu Thiem ICA, many investors have shown interest in projects in the urban area and are in negotiations to implement the projects.

Work on the Thu Thiem 2 Bridge project started at the beginning of February and this bridge will link the urban area to HCMC’s District 1 when it is finished in the second quarter of 2018.

The city government is now finalizing procedures to build the central square and riverside park this year. The city is finding a designer for the pedestrian bridge connecting Me Linh Square in District 1 and the urban area.

Fuel wholesalers told to open more E5 bio-fuel stations

Deputy Prime Minister Hoang Trung Hai has urged local fuel wholesale firms to have at least 50% of their filling stations selling E5 nationwide at the end of November to speed up the consumption of the bio-fuel.

Ministries, agencies and fuel trading enterprises should cooperate in implementing a major program to promote sales of and expand the E5 bio-fuel pumping station network to serve more customers, according to the Government Office’s Document No. 200/TB-VPCP. The document is about the Deputy Prime Minister’s instruction at a review meeting for a roadmap to boost bio-fuel consumption in the country.

At the end of November, fuel trading enterprises will have to sell the E5 gasoline at half of their gas stations in the provinces and cities chosen for the roadmap. The Ministry of Industry and Trade is assigned to monitor the expansion of the E5 bio-fuel selling network in the country.   

At present, less-than-expected filling stations sell the bio-fuel which has 95% petrol and 5% ethanol in Hanoi, HCMC and Ba Ria-Vung Tau, Hai Phong, Can Tho, Danang, Quang Ngai and Quang Nam.

A recent survey of the ministry showed ten enterprises are selling the E5 RON 92 gasoline at only 58 out of 500 gas stations in HCMC. Fuel wholesalers said it is difficult to increase the number of E5 RON 92 gasoline stations as customers are hesitant to buy this type of fuel.

E5 bio-fuel sales at Petrolimex, Saigon Petro and Saigon Fuel Co. (SFC) have grown a mere 2-4% compared to those of the RON 92 and 95 gasoline products. In reality, there are not many filling stations selling the bio-fuel in the localities selected for the roadmap.

Danang City and Quang Ngai and Quang Nam provinces have shifted to sell the E5 RON 92 gasoline instead of RON 92 petrol. In Hanoi and HCMC, the number of E5 bio-fuel stations remains modest and fuel trading companies provide both the E5 RON 92 and RON 92 gasoline.

Vietnam, RoK enhance trade relations

Vietnamese enterprises will have more opportunities to promote the export of further high-quality products to the Republic of Korea (RoK), boosted by the Vietnam-RoK Trade Connectivity Conference held on June 25 in Ho Chi Minh City.

Cooperation between Vietnam and the RoK has broadened in various fields after the free trade agreement (FTA) between the two countries was inked on May 5, said Moon Byung Cheol, a representative from the RoK Consulate General in HCM City, adding that two countries are striving to increase trade revenue to 70 billion USD by 2020.

At the event, he highlighted that there will be tax exemptions and improvements in trade and service procedures thanks to the signed free trade deal.

In the past few years, enterprises from the RoK have made great contributions to the city’s economic growth. The RoK is the fourth largest capital investor to the city with key projects in processing, manufacturing, hi-tech complexes, real estate, construction, restaurant service, communications and retail sales.

Ho Xuan Lam, Vice Director of the Investment and Trade Promotion Centre of Ho Chi Minh City, said the free trade deal will create an impetus for RoK enterprises to enhance their investment and operations in Vietnam and Ho Chi Minh City in particular.

He said that Vietnam needs to proactively carry out promotion campaigns in the RoK with the focus on Vietnamese farm produce, forest products and seafood.

According to the FTA, made-in-Vietnam products will have a competitive advantage over regional competitors as the RoK pledges to liberalise 95 percent of its import tariffs, including the ones levied on key Vietnamese agricultural products.

Meanwhile, Vietnam will cut nearly 90 percent of taxes on RoK products, comprising industrial commodities and materials for domestic production. This will help the country limit its material dependence on foreign countries.

Deputy PM urges prompt issuance of SOE restructuring policies

Deputy Prime Minister Vu Van Ninh has asked ministries to promptly issue policies on the reform and restructuring of State-owned enterprises (SOE) as scheduled while rolling out more drastic measures to complete the SOE equitisation plan for 2014-15.

The Deputy PM, who is also Head of the Steering Committee for Enterprise Renovation and Development, made the request while chairing a conference in Hanoi on June 25 to review the progress of SOE restructuring in the first 6 months of this year.

He requested the Ministry of Planning and Investment submit a draft decision to revise Decision 37/2014/QD-TTg on criteria and classification of SOEs to the Prime Minister at an early date.

Meanwhile, ministries, localities and State-owned groups and corporations should finish the approval of restructuring plans for 44 firms whose enterprise values have been announced while completing the evaluation of the values of 127 other enterprises that are in the process of evaluation.

The Deputy PM said stagnation in the issuance of mechanisms and policies for SOE organisation reform and restructuring is delaying the restructuring process, adding that many arising problems, especially those related to equitisation, divestment and share auctions are not addressed quickly.

According to the Steering Committee for Enterprise Renovation and Development, in the first 6 months of this year, relevant ministries submitted only three of 10 planned draft decrees and decisions, reaching only 37 percent of the target.

As of June 23, as many as 289 enterprises subject to equitisation had set up their own steering committee for restructuring, with 127 now in the process of evaluating their corporate value, 44 already announcing their prices and 61 having completed restructuring.

Additionally, two firms have been sold, one dissolved and one merged, raising the total number of reformed and equitised enterprises this year to 68.

Hanoi had the highest number of restructured enterprises with 19 firms, followed by the Vietnam Coal-Mining Industries Corporation with five companies and the Central Province of Nghe An with four.

Total State capital divested in the first 6 months of this year was 7.52 trillion VND (358 million USD), recouping 11.61 trillion VND (552.8 million USD), equivalent to 1.48 times of book value.

Notably, the military-run Viettel Group divested 2.65 trillion VND (126 million USD) and recouped 3.16 trillion VND (150.4 million USD) while the Vietnam National Shipping Lines recouped 1.25 trillion VND (59 million USD) and the Vietnam Post and Telecommunication Group - 783 billion VND (37 million USD).

As of June 17, 46 equitised firms had conducted their initial public offering (IPO) with 557 million shares worth 5.57 trillion VND (265.2 million USD) put on sale. Total shares sold reached 110 million, equivalent to 19.7 percent of the total shares for sale.

At the event, representatives from ministries, localities and enterprises discussed their restructuring difficulties, including complicated finances in large-scale enterprises. They also pointed to unreasonable auction fees through stock exchanges, as well as problems in settling unsolved shares.

They proposed that enterprises be allowed to find investors on their own should no investors register to buy the firms, and to reduce share prices after two unsuccessful auctions.

PM approves investors for Nam Dinh thermal power plant

Prime Minister Nguyen Tan Dung has assigned the Ministry of Industry and Trade to guide investors to build the Nam Dinh thermal power plant.

The investors include the Republic of Korea’s Taekwang Power Holdings Co. Ltd and Saudi Arabia’s International Company for Water and Power Projects. The latter is contributing capital to develop the project in the place of Korea East West Co. Ltd.

The Prime Minister noted that the transfer of the project and capital contribution between the involved parties must be in line with Vietnamese law.

The Ministry of Industry and Trade is responsible for guiding the investors to implement contract negotiations with Vietnamese partners.

The Nam Dinh thermal power plant will be built in Hai Chau and Hai Ninh communes in Hai Hau district under the build-operate-transfer (BOT) form within 25 years.

The plant is designed to have four turbines with a combined capacity of 2,400 megawatts. Two turbines with a dual capacity of 1,200 megawatts will be built in the 2016-2017 phase, while the two others of equal capacity will be built in the 2020-2021 period.

Big C opens fifth store in Hanoi

The hypermarket chain Big C opened a new supercenter Big C Ho Guom in Ha Dong district, Hanoi on June 25, the 31 st Big C store in Vietnam and the fifth in Hanoi.

Big C Ho Guom covers 7,400 square metres, including a 2,500-square-metre supermarket selling a wide range of items from groceries and clothing to home appliance and electronics, 95 percent of which were made in Vietnam.

The centre also comprises a 1,500-square-metre department store featuring 55 top brand name shops such as Adidas Neo, Bata, The Face Shop, Yves Rocher, KFC, Icy Coffee and Mochi Sweet.

The retail chain is offering up to 49 percent discounts on hundreds of items during its launch week.-

Vietnam among world’s top apparel exporters

Vietnam has become one of the biggest garment-textile exporters in the world with apparel products shipped to 180 nations and territories and export turnover reaching 12.18 billion USD in the first half of 2015, a yearly increase of 10.26 percent.

The statistics were released at an international workshop held in Hanoi from June 25-27 by the Vietnam Cotton and Spinning Association (VCOSA) and the China Chamber of Commerce for Import & Export of Textiles (CCCT).

Currently, the garment-textile sector is one of Vietnam’s economic spearheads with over 4,000 active businesses generating jobs for around 4.5 million workers.

In the near future, the sector is expected to benefit from free trade agreements (FTA) such as the Trans-Pacific Partnership (TPP) and trade pacts between Vietnam and the EU as well as Vietnam and the Republic of Korea, which offer tariff reductions.

Nine years after joining the World Trade Organisation (WTO), Vietnam’s garment-textile sector has increased its market shares in the US to 10 percent from 3 percent, second only after China.

Last year, the garment export turnover recorded an impressive growth of 17 percent in Europe, 12.5 percent in the US, 9 percent in Japan and 27 percent in the Republic of Korea.

This year, the sector aims to fetch 28.5 billion USD in revenue.

Vice Chairman of the VCOSA Nguyen Van Tuan said the apparel production scale in Asia will expand 2.4 percent by 2030, accounting for over 60 percent of global outputs.

He added that the TTP and FTAs will turn Vietnam into a primary destination for the global supply chain.

President of the US Fashion Industry Association Julia K. Hughes said many US companies hope to seek supply sources from nations joining the TPP agreement once it takes effect and Vietnam is ranked highest in terms of the ability to draw new businesses.

Mekong Delta to increase transport capacity of waterborne freight

The Mekong Delta should increase its waterborne freight transport capacity to 83 million tonnes by 2020, up 72 percent from the current volume, according to the Ministry of Transport’s plan.

With a coastline of 700 kilometres and 28,000 kilometres of criss-crossed canals, accounting for 70 percent of inland waterways nationwide, the delta boasts great potential to develop its marine transport.

The ministry’s plan aims to develop a system of seaports in the region which are capable of accommodating heavily-loaded containers.

In the foreseeable future, the Can Tho port will be expanded to carry 650,000 tonnes of goods per year and receive 10,000-tonne ships.

The second phase of the Cai Cui port in Can Tho city will be carried out with the construction of four wharves able to accommodate 10,000-20,000 tonne ships and handle a maximum of 2.5 million tonnes of goods annually.

A 34km canal connecting the port to the sea is under construction, and once completed, the project is expected to help reduce transport costs and ease overloading at the waterway and land sections connecting the delta with Ho Chi Minh City .

The plan also envisions the upgrading of several sections of domestic waterways, including corridors from Ho Chi Minh City to Kien Giang and Ca Mau provinces, as well as building freight and passenger ports.

Can Tho city in particular is building an international waterway on the Hau River, upgrading the Can Tho and Tra Noc ports, and building cargo wharves to serve 7,500-tonne ships at Tra Noc port.

To promote economic growth in Ben Tre, Tien Giang, Dong Thap and Vinh Long provinces, routes will be opened on Tien River for sea vessels with loading capacities of 7,000-8,000 tonnes to pass, while waterway routes connecting Ho Chi Minh City with ports in the Mekong Delta as well as sea ports will be upgraded, according to the plan.

Quang Ngai aims to boost socio-economic development

The central province of Quang Ngai has set forth a number of key socio-economic tasks for the second half of this year during the 20th conference of the provincial Party Committee on June 25.

They include adjustments to the socio-economic development plans for a number of districts and cities, and making a master plan for the development of the island district of Ly Son together with reviewing the use of land in the Dung Quat Economic Zone and other industrial zones.

The province will accelerate a project to restructure the agricultural sector towards raising added value and sustainable development and create incentives for developing product brand names.

In the first half of this year, the provincial GDP was estimated at more than 6 trillion VND (284.2 million USD), 49 percent of the yearly target.

The industrial production value reached 11.6 trillion VND (541 million USD), accounting for more than 52 percent of the year’s plan, and the agricultural, forest and aquaculture sectors posted a production value of 1.5 trillion VND (69.4 million USD).

As of the end of June, the province had two communes recognised as new-style rural areas, meeting all requirements of the national building programme.

Budget collections totalled 16.4 trillion VND (49.3 percent of the year’s target), to which the Dung Quat Refinery contributed 14.5 trillion VND.

EU-funded project helps boost Vietnam-EU trade ties

The European Trade Policy and Investment Support Project (EU-MUTRAP), which aims to enhance Vietnam’s international trade integration and boost Vietnam-EU trade ties, recorded positive results, heard a seminar in Hanoi on June 25.

Addressing the event, which was co-hosted by the Ministry of Industry and Trade (MoIT) and the European Union to review the implementation of the project, Director of the Ministry’s Department of Trade Promotion and EU-MUTRAP Director Buy Huy Son said through various activities, the project helped improve the building of trade and investment policies in Vietnam.

It also assisted Vietnam in promoting its trade links with the EU and other partners, thus boosting the country’s global integration.

As many as six sub-projects directly funded by the European Commission (EC) were implemented in the framework of EU-MUTRAP, which begun late 2012.

Fracessco Abbate, a senior expert from the project, suggested measures to reach better results in the next three years, saying the project needs to focus on activities supporting businesses and diversify methods for implementing the project.

Reports presented at the seminar revealed limitations from carrying out the project, including shortcomings in providing assistance and supervising sub-projects, ineffective operations and weakness in sharing information between project units.

Funded by the EU and mainly operated by the MoIT, the 16.5-million EUR project aims to help Vietnam integrate deeply into the global trade system, ASEAN region and sub-regional cooperation mechanisms, while bolstering trade and investment ties between Vietnam and the EU. It is also expected to support comprehensive economic development and poverty reduction.

EU-MUTRAP has mainly concentrated on supporting the MoIT in building capacity for policymaking, policy consulting, negotiation and implementing multilateral, regional and sub-regional trade commitments, especially those serving Vietnam-EU connection promotion.

Policy reform required when Vietnam-EU FTA is signed

Once the Vietnam-EU free trade agreement (FTA) is signed, Vietnam will need to renovate its economic policies and institutions and be prepared for agreement enforcement, noted Danish Ambassador to Vietnam John Nielsen.

Speaking at a workshop on the FTA, jointly held by the Central Institute for Economic Management (CIEM) and the Danish Embassy on June 25, Nielsen pointed out challenges accompanying the agreement, including requirements to improve product quality, competitiveness and the business and investment climate.

CIEM Director Nguyen Dinh Cung stressed that benefits brought by FTAs depend heavily on policy and institution reform to turn challenges into opportunities and opportunities into benefits. Vietnam has to modify its policies, mechanisms and institutions to increase the positive impacts and reduce negative impacts of the agreement on the economy.

Delegates also shared international experience in renovating institutions and adjusting policies as learned by developing countries when enforcing FTAs.

Vietnam and the EU started negotiations on the agreement in June 2012 and have so far undergone 12 rounds of discussions. Along with tariff cuts and trade facilitation, the two sides’ commitments include investment, the environment, competition and sustainable development.

The FTA between Vietnam and the EU, once signed, could help expand Vietnam’s GDP by 7-8 percent by 2025. Vietnam’s exports to the EU are likely to increase by 10 percent.

Seminar on new investment, enterprise laws

New points in the Investment and Enterprise Laws 2014, which go into effect on July 7, caught the attention of business players attending a seminar in Ho Chi Minh City on June 25.

The Investment Law stipulates regulations that mark significant progress in administrative overhaul, including cutting the time to process foreign investment registration applications to 15 working days from the current 45 days as well as raising the responsibility of investors through deposit requirements and equipment quality appraisals, among others.

Based on reviews of 386 business sectors, the new investment law specifically regulates a list of valid business areas and six prohibited others.

It also streamlines the share purchase process and clarifies that any entity with over 51 percent of its assets and charter capital held by foreigners is to be treated as a foreign-invested firm, said Deputy Head of the Ministry of Planning and Investment’s Legal Department Quach Ngoc Tuan.

New points in the Enterprise Law include business registration certificates with information regarding business codes, headquarters addresses and legal representatives. Business areas will be declared in business registration application forms.

The law also abolishes requirements on professional certificates, shortens business registration timelines, adds criteria for State business executives and requests the release of transparent information from firms with State capital up to international standards, among others, said Head of the Central Institute for Economic Management’s Business Environment and Competitiveness Department Phan Duc Hieu.

The Investment and Enterprises Laws were designed to respect and uphold the business freedom of enterprises while simultaneously focusing on equal treatment between domestic and foreign investors to ensure compliance with international treaties Vietnam has committed to.

Vietnam, Mozambique foster enterprise connectivity

Vietnamese small- and medium-sized businesses highlighted the need to further trade cooperation with Mozambique partners during a business forum held in Maputo, the capital city of Mozambique, on June 24.

Speaking at the forum, Vice President of the Confederation of Business Associations of Mozambique (CTA) Prakash Prelhad spoke highly of the initiative to organise the event, and underscored that the two sides need to enhance direct contacts and boost trade exchanges on the back of existing advantages.

Mozambique is willing to welcome Vietnamese enterprises to the African country, he said.

Mac Quoc Anh, Vice Chairman of the Hanoi Small and Medium Enterprise Association (HASMEA), presented an overview of the municipal economic cooperation potentials, adding that it was the first time HASMEA had led a delegation of enterprises to Mozambique to seek venture and networking opportunities.

Vietnamese Ambassador to Mozambique Nguyen Van Trung said the embassy is willing to act as a bridge linking the two business communities together by providing market information and assisting tie-ups.

The business forum was concurrent with the 40th anniversary of Vietnam – Mozambique diplomatic ties and co-hosted by the Vietnamese embassy in Mozambique, the Vietnam Trade Promotion Agency in South Africa and Mozambique, CTA and the Mozambique Investment Promotion Centre.

Friesland Campina opens dairy zone

Friesland Campina Vietnam officially held the inauguration ceremony for their sustainable dairy zone in the northern province of Ha Nam on June 24, following nearly one year of construction.

The 66-ha dairy zone in Moc Bac commune, Duy Tien district, is projected to become a typical model dairy zone in Ha Nam province.

The goals of the project are to establish and develop specialised dairy zones for family farms, contribute to the nation's food security, create jobs and reduce milk imports.

The ceremony marks an important milestone of "The development of sustainable dairy zones in Vietnam" project, which is in partnership with the Ha Nam authorities and the Dutch Government as part of the Facility for Sustainable Entrepreneurship and Food Security for the 2014-18 period.

As planned, eight more dairy farms will be established in this 66-hectare dairy zone through 2017. Each farm will include a dairy herd of 50 to 80 heads and have at least 30 lactating cows.

According to the scope of the project, it is expected that by December, 2018 the specialised dairy zone will be made up of 50 dairy farms and produce at least seven million kilogrammes of fresh milk per year, creating 345 jobs.

As the main partner in the project, Friesland Campina Vietnam undertakes the roles of management, execution and direct investment in building the specialised dairy zone in Ha Nam, with two pilot dairy farms in Moc Bac commune.

The company will carry out specific activities, including developing and implementing training programmes to supply technical advice to farmers; setting up dairy cattle feed producing system; training and connecting technicians to provide artificial insemination services and veterinary treatment.

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