Dung Quat Refinery gets largest-ever shipment

The single-point mooring (SPM) system at Dung Quat refinery in the south central province of Quang Ngai received a 150,000-tonne oil tanker last Saturday, the largest of the 398 cargo vessels the system has served since it opened five years ago.

The tanker brought one million barrels of crude oil imported from Azerbaijan for processing at Dung Quat.

This is also the first oil tanker the SPM system has received after a US$320,000 upgrade several months ago, which allows it to receive oil tankers of up to 150,000 tonnes. Previously it could only accommodate 100,000-tonne tankers.

Boeing, Microsoft boost co-operation with Viet Nam

Boeing and Microsoft expressed plans to boost co-operation with Viet Nam at meetings with Vietnamese Ambassador to the US Nguyen Quoc Cuong in Washington last week.

During the visit, representatives of Boeing said the company would transfer its first Boeing 787 to Vietnam Airlines in 2015 to mark 20 years of normalisation of Viet Nam – US relations. The company also hoped the transfer would accelerate the target of establishing a direct flight to the US on Vietnam Airlines.

In another visit of the Ambassador to Microsoft, the company said it highly appreciated the commitment of the Vietnamese Government in the Trans-Pacific Partnership (TPP) negotiations, adding the corporation considered Viet Nam a key area for business development.

Thanh Cong plans to build new Mekong Delta factory

The Thanh Cong Textile Garment Investment Trading Joint Stock Company is planning to build a new factory in the Mekong Delta province of Vinh Long next month.

The investment capital for the first phase of the garment and textile plant is US$8 million, and the project is expected to bring in a revenue of $10 million next year.

The company reported a revenue of VND1.306 trillion ($61.7 million) in H1, up 8.85 per cent year on year, and a profit of VND83.68 billion ($3.9 million), up 47.6 per cent, representing 50.89 per cent of the company's yearly target..

New incentive aims to lure investors to Van Tuong

The central province of Quang Ngai will offer financial support of VND150 million (US$7,100) per hectare for domestic and foreign investors in Dung Quat Economic Zone's Van Tuong Urban Area.

Under the decision, investors will also get a 1 per cent discount on construction and equipment fees. Total incentives will not exceed VND25 billion ($1.2 million), according to the Dung Quat Economic Zone managing board.

Van Tuong Urban Area, which covers 3,828ha, is one of five planned areas in the economic zone. The first 650ha stage, intended to have a population of 800,000, is scheduled to be built by 2015.

The province has 29 Foreign Direct Investment (FDI) projects in effect with total capital of $4 billion, of which Dung Quat EZ drew 20 projects with $3.9 billion.

VN firms in Europe attend business meet

More than 300 overseas Vietnamese (OV) businesses and diplomatic missions in Europe, and trade counselors from various regional countries attended the eighth Viet Nam Business Forum in Rome last week.

According to Pham Van Hong, head of the organising board of the three-day business forum, which ended on Sunday, the event aimed to draw up an orientation outline for the Vietnamese business community in Europe to overcome the challenges brought by the regional financial and economic crisis.

Through various activities at the event, businesses had opportunities to meet and discuss measures to boost their stable and sustainable development, he said.

At the same time, they also shared experiences in grasping opportunities for expanding their operations in European countries, said Hong.

Meanwhile, Vietnamese Ambassador to Italy Nguyen Hoang Long said supporting the strong connectivity of the Vietnamese business community abroad is one of the country's focus areas.

He said he hoped the development of OV businesses in the region would help promote Viet Nam's trademarks and fuel economic growth at home.

The event took place in the context of a European recession that has dramatically affected the operations of the Vietnamese business community there.

Hoang Manh Hue, a businessman in Poland, pointed out the need for the Vietnamese business community to further consolidate their solidarity in the context of the gloomy global economy.

Participants at the event also voiced the difficulties that they are facing, including the tension in the Russia-Ukraine relations, as well as the poor linkage in the Vietnamese business community abroad.

They also discussed opportunities and challenges generated by the Viet Nam-EU free-trade agreement, which is expected to be concluded this year. The next forum will be held in Bulgaria in 2015.

Trade surplus hits $1.7b as exports see growth

Viet Nam has gained a trade surplus of US$1.7 billion for the first eight months of 2014, figures from the General Statistics Office (GSO) show.

The figures also showed that the nation incurred a trade deficit, worth $100 million, only in January, and began earning a surplus in February, at $244 million.

The surplus reached $1 billion in the first quarter, $683 million in the first four months, $1.6 billion in the first five months and $1.3 billion in the first half. After seven months, the surplus increased to $1.26 billion.

The nation's total exports reached $97 billion in the first eight months, which was 14.1 per cent higher than that of the same period of last year. The nation's total imports reached $95.3 billion, which was 12 per cent higher than that of the same period of last year. It mainly imported materials and sub-materials for production.

The United States was the country's largest export market in the first eight months, accounting for $18.5 billion in exports, or 22.5 per cent more than that of the same period last year.

Other significant export markets include the European Union with $17.9 billion in exports, or a 13.3 per cent rise from that of last year; ASEAN with $12.4 billion, or a 0.5 per cent rise; Japan with $9.9 billion, or a 12.7 per cent rise; and China with $9.8 billion, or a 15.2 per cent rise.

Foreign direct investment (FDI) enterprises exported products worth $65.2 billion, or 15.6 per cent more than in the same period of last year, while domestic enterprises exported products worth $31.8 billion, or 11.1 per cent more than in the same period last year.

A number of key exports achieved high growth in the first eight months of the year, including seafood with $5 billion, a 23.6 per cent rise from that of last year; textiles and garments with $13.65 billion, a 19.7 per cent rise; telephone and telephone components with $15.23 billion, a 13.7 per cent rise; and crude oil with $5.59 billion, a 14.3 per cent rise.

However, a number of agricultural exports suffered a decline, including rice with $2.46 billion, a 3.7 per cent fall from that of last year; rubber with $992 million, a 31.7 per cent fall; and tea with $140 million, a 0.6 per cent fall.

The GSO also reported that the largest import market was China with $27.6 billion, a 17.3 per cent rise from that of the same period last year. Viet Nam achieved a $17.8-billion trade deficit with China in the first eight months, a year-on-year surge of 18.5 per cent.

FDI enterprises imported $53.4 billion worth of equipment and products, or 12 per cent more than in the same period last year, while domestic enterprises imported $41.9 billion worth of equipment and products, or 13.4 per cent more than in the same period last year.

Manufacturing boosts production index

The nation's industrial production saw a 7.1 per cent year-on-year increase from Jan-August 2014, a positive sign of recovering production output at the nation's businesses, noted the General Statistics Office (GSO).

Further, the index of industrial production (IIP) in August registered the highest growth rate this year, reported the GSO, compared to 6.2 per cent last month, 5.8 per cent in the first half of the year and 5.2 in the first quarter.

The office attributed the high IIP growth rate to the 9.1 per cent surge in the processing and manufacturing sector, which accounted for 70 per cent of total industrial output.

Industrial products with the highest growth rate in the period included electronics, computers and optical equipment, with 34.5 per cent; motorised vehicles with 20.2 per cent; leather products with 20.2 per cent; shoes with 13.1 per cent; and electric output with 11.2 per cent.

Two industrial products with the lowest growth rates included cigarette production and transportation equipment.

GSO experts attributed the low consumption to a slow rebound of the world economy, as well as low demand in the domestic market and a high inventory index.

Additionally, the August 1 inventory index of the processing and manufacturing industry posted a month-on-month increase of 1 per cent and a year-on-year surge of 13.4 per cent.

Other sectors reporting higher inventories than the same period last year were electronics, computers, tobacco products, medicines, pharmaceutical products and materials, leather, and paper.

Credit growth slow in Ha Noi

The outstanding loans of credit institutions in Ha Noi totalled about VND918 billion, or US$43.71 million, in August.

According to the municipal Department of Statistics, the amount increased 0.6 per cent over July, but fell 2.9 per cent over last December.

The total deposits in the capital reached nearly VND1.12 trillion, or $53.33 million, in August. This was up 0.6 per cent over the previous month and increased 6.8 per cent over the end of last year.

The lending interest rates have fallen, but stock market reports showed that many enterprises still suffered losses in the first half of this year. It will take more time for the companies and the economy to recover, market observers said.

In HCM City, outstanding loans grew 4.35 per cent in the first seven months of 2014, reported the Viet Nam Television (VTV).

Lending in the southern city increased 1.37 per cent in July alone, driven by prioritised sectors including agriculture and development of rural areas, exports, small- and medium-sized enterprises, high-tech firms and support industries.

Local banks saw redundant liquidity, but faced significant obstacles in finding borrowers earlier this year. However, municipal programmes linking banks and businesses have improved the lending situation in recent months.

Nguyen Hoang Minh, deputy director of the State Bank of Viet Nam's HCM City branch, said the number of dissolved companies was about two-thirds the number of newly established firms, and that the charter capital of enterprises also increased this year.

But Minh warned that bad loans tended to increase in the city. Debts facing risks of capital losses amount to more than 7 per cent of the total outstanding loans in the city, compared with the previous levels of 4.6 to 4.8 per cent.

The head office of Vietcombank slashed the annual interest rates for dong deposits by 0.2 percentage point for almost all terms yesterday, reported news portal VnEconomy.

The new rates are 4.8 per cent for a one-month term, 5 to 5.7 per cent for terms of two to nine months, and 6.8 per cent for terms of 24 to 60 months.

The highest level of 7 per cent no longer appears on the bank's deposit rate listing board.

This is the second time that Vietcombank has proactively lowered dong deposit rates this year, and it currently lists the lowest rates in the domestic banking system.

The adjustments will reportedly help the bank cut operational costs and have better conditions to maintain low lending interest rates, after it achieved significant deposit growth in the first half of this year at 14.2 per cent.

The changes in interest rates provide reference for Vietcombank branches to set new rates based on their own conditions.

Quang Nam pursues Japanese business community

Central Quang Nam province staged a seminar in Tokyo on August 25 to introduce its investment potential to the Japanese business community.

Addressing the seminar, Vietnam Ambassador to Japan Doan Xuan Hung emphasized the relationship between Vietnam and Japan is fundamentally grounded on a solid basis of mutual trust.

He pointed out that Quang Nam province is centrally located in Vietnam.  It is rich in mineral resources and has a young hardworking labour force along with developed infrastructure that makes it an ideal destination for foreigner businesses.

For his part, Japan's former Ambassador to Vietnam Norio Hattori spelled out the strengths of the investment environment in Vietnam. Additionally, the Japanese ambassador said that the investment environment in Vietnam in recent years has improved significantly as a result of the Government’s efforts to streamline investment license procedures and offer tax incentives.

He noted that Vietnam is the top investment destination for Japanese enterprises in the ASEAN region.

At the event, representatives from the provincial People's Committee also provided more detailed information on the province’s potential, investment opportunities, investment procedures, and preferential policies to foreign enterprises investing in industrial and economic zones in Vietnam as well as in Quang Nam province.

Tea exports expected to reach US$245 million

In the first seven months of this year, tea exports have declined both in volume and value compared to the same period last year.

However, the Vietnam Tea Association (VITAS) forecasted that the sector could earn US$245 million from exports this year.

According to the Ministry of Agriculture and Rural Development’s preliminary statistics, in the review period, the country exported about 70,000 tonnes of tea with total value of about US$116 million, a drop of 6.7% in volume and 1.1% in value compared to the same period last year.

VITAS Chief Secretariat Hoang Vinh Long said green tea and OTD black tea remained major tea exports with a volume of about 26,000 tonnes each type. OTD black tea, and green tea were sold at US$1,387 and US$1,802 per tonne respectively. Chinese-Taipei, China and Pakistan ranked top in export markets of Vietnam.

Tea exports to Pakistan continued to thrive with an increase of 56.4% in volume and 89.2% in value in 7 months while its figures to Indonesia reduced by 56.6% in volume and 54.56% in value compared to the same period last year.

Long explained that in the early months of this year, the weather remained complicated with prolonged drought and rain in some tea plantation areas. However, tea prices remained stable. Ha Tinh Tea Company’s products were sold at the highest prices among Vietnamese exporters, added Long.

However, tea exports are experiencing some difficulties when export markets of Vietnam have strictly required safety standards and certificate of origin.

To be able to meet its export target, the tea sector needs to focus on renewing trade promotion activities. Moreover, tea businesses must diversify products, improve product quality and reorganise production towards industry value chain.

During April and May 2014, VITAS delegation took part in the International Tea Expo in Dubai to seek market expansion and promote exports to potential markets such as the UAE, Africa, the Middle East and South Asia.

Farm exports hit US$20.22 billion

Vietnamese exports from agriculture, forestry and fishery in the first eight months of the year jumped 11.9% on-year to US$20.22 billion, according to the Ministry of Agriculture and Rural Development (MARD).

Of the figure, agriculture export gross revenues were US$9.49 billion, up 5.7% on-year. Meanwhile, fishery and forestry product exports surge 25.4% toUS$4.95 billion and 12.5% to US$4.06 billion, respectively.

During the reviewed period, rice exports declined 9% in volume and 5.3% in value on-year.

The coffee sector maintained growth with on-year increases of 26.8% and 22.3%, respectively.

Vietnam exported 126,000 tonnes of pepper valued at US$790 million, up 23.9% in volume and 38.2% in value over last year’s same period. The US remained Vietnam’s largest pepper consumer with growth of 25.7% in volume and 35.19% in value.

Seven-month exports to RoK increase 2.4%

Vietnamese exports to the Republic of Korea (RoK) rose 2.4% to US$3.66 billion in the first seven months of this year, according to Vietnam's General Department of Customs.

Major export products included crude oil, garments, seafood, coal, wood and wood products, and rubber.

Garments took the lead, grossing US$921.7 million in value, representing an increase of 36.7% and accounting for one fourth of Vietnam’s total export earnings to the RoK.

They were closely followed by seafood which raked in US$343.8 million, up 52.8% against the same period last year.

Wood and wood products placed third, earning US$267.8 million, up 47.4%.

Other products that saw steady export growth were mobile phones and spare parts, machinery, tools, electric cables, handbags, suitcases and umbrellas.  

Troublesome tax procedures to be axed

A lot of complicated and time-consuming tax procedures will be removed or revised in line with the Government’s Resolution 19 to improve the business environment of the country.

Speaking at a workshop in HCMC yesterday, Hoang Thi Lan Anh, deputy head of the General Department of Taxation’s Reform and Modernization Department, said the department has reviewed all tax documents in order to propose reform solutions to the Government and the National Assembly.

One of the most notable changes is that enterprises with annual revenues of VND50 billion or lower should be allowed to file for value added tax (VAT) on a quarterly basis, instead of monthly as currently. Earlier, only firms with annual revenues below VND20 billion were allowed to file for taxes quarterly.

In addition, businesses would make the final corporate income tax settlement once a year and calculate taxable amounts on their own.

Currently, enterprises temporarily make quarterly tax payments and make the final settlement at year-end. It is rather time-consuming, Anh said.

The ministry will also ask the National Assembly for approval to cap advertising expenses at 15% of total legitimate input costs while there would be no limits on spending on marketing, promotion, commission, reception, brokerage and others in support of production and trading activities of enterprises.

Besides, the ministry is finalizing a draft circular revising six circulars on tax management, personal income tax, VAT and tax invoice. The new circular is expected to take effect on October 1 if everything goes as planned.

According to the draft circular, all businesses are allowed to voluntarily register for VAT refunds. At present, enterprises with investment under VND1 billion are not eligible for VAT deduction.

Nguyen Thi Cuc, chairwoman of the Vietnam Tax Consultants Association, said if the changes applied, the tax payment time could be reduced by 201 hours a year.

The Government’s Resolution 19 ordered tax authorities to streamline procedures and slash the time for enterprises to prepare and pay taxes to an average of the ASEAN 6 countries (Indonesia, Thailand, Singapore, the Philippines, Malaysia and Brunei) next year versus the current average level of 537 hours per year.

However, Cuc said that tax officials have been found to require unnecessary papers from taxpayers.

Aside from administrative reform, the Government should increase inspection and improve transparency at tax agencies, Anh of the General Department of Taxation said.

Customs clearance time to drop 30%

The Ministry of Finance expects local enterprises to cut 30% of the time required for completing customs procedures for their export and import goods next year as a host of tax and customs reform solutions will apply.

Speaking at a press briefing in Hanoi City on Tuesday, Deputy Minister of Finance Do Hoang Anh Tuan said businesses would spend fewer hours to have import and export goods cleared by the customs in 2015.

It will take goods imports 13 days and exports 14 days to go through all customs procedures next year. Currently, both imports and exports require 21 days for customs clearance, Tuan said.

Tuan was quoted by Tuoi Tre newspaper as saying that reducing customs time is not only the responsibility of customs authorities but also of relevant agencies at seaports and border gates, especially product quality watchdogs.

“Of the current 21-day customs time, businesses only have to work with the customs authorities for around six days and the remaining time is to deal with other agencies. What’s important is to minimize the time for the imports and exports to undergo quality or quarantine tests while still maintaining the accuracy of the tests,” he said.

Last year, 34% of the goods imported into Vietnam had to undergo such tests and the ratio is 2.5 times higher than that of Singapore. A large proportion of the imports are from markets with high risks of product quality, so they must be checked carefully.

Quality and quarantine checks of imported goods should be made in accordance with eight laws, 33 decrees and 134 circulars, Tuan explained.

Since July 20, customs procedures at 34 customs departments and 170 border gates have gone online, thus cutting the time for customs paperwork. On August 21 38,000 out of 48,000 export and import firms in the country process customs declarations online.

However, despite efforts from the customs sector, Tuan said the customs clearance time could not be reduced unless other relevant agencies join hands by reducing paperwork and enhancing quality and quarantine tests.

It is not necessary to test all imports from markets such as the European Union (EU) and Japan while those from high-risk markets must be strictly inspected, he said.

Tuan said on the ministry’s website that a report on the business environment of International Finance Corporation (IFC) and the World Bank showed that Vietnam was ranked 149th among 189 countries and territories in terms of tax convenience. The figure remains very high if compared with other ASEAN countries.

Local businesses spend around 537 hours preparing and paying taxes, with 217 hours involving corporate income tax and 320 hours value added tax (VAT).

Domestic cow herd in decline

The country’s herd of cows has fallen steadily over the years due to unfavorable farming conditions, and to offset a short beef supply, enterprises have been boosting cow imports, especially from Australia.

According to the General Statistics Office (GSO), the cow herd in Vietnam has slipped by 23-25% since 2007, with around 6.7 head in 2007, 6.3 million in 2008, 6.1 million in 2009, 5.9 million in 2010 and less than 5.2 million now.

The domestic beef output has thus tumbled. The supply of beef and buffalo meat reached around 382,000 tons in 2012, with buffalo meat accounting for 97,000 tons, but the volume plunged to some 370,000 tons last year.

The reasons for the declining herd, according to GSO, are rapid mechanization in agriculture and shrinking grazing land.

In the past year, enterprises have boosted cow imports to meet the domestic beef demand.

Nguyen Dang Vang, chairman of the Vietnam Livestock Association, said Australian cow imports have risen fast.

Only 3,000 cows were imported from Australia in 2012 while the number of cows imported from Laos, Cambodia and Thailand totaled 180,000. However, cow imports from Australia surged sharply last year.

Statistics of the General Department of Customs showed that Vietnam imported 67,000 live cows and a large amount of frozen beef from Australia last year. The import volume will be much higher this year as up to 72,000 Australian cows were shipped into Vietnam in the year’s first half alone.

This year’s total number of Australian cows imported is forecast to reach some 150,000 for domestic consumption. Besides, frozen beef imported from Australia is estimated to hit around 14,000 tons this year.

Vang added the huge import volume of Australian cows still meets only one-eighth of the current consumption.

Citing statistics of GSO, he said domestic consumption of beef and buffalo meat made up 6% of the total consumption last year and is forecast to leap to 10% in 2020 by the Ministry of Agriculture and Rural Development.

If so, Vietnam will consume one million tons of live cows and buffalos a year towards 2020. However, with the declining number of buffalos and cows raised domestically, buffalo meat and beef shortages could be more severe.

Van Duc Muoi, general director of Vissan Company, said the current total demand is 3,000 cows nationwide a day, with the HCMC market alone consuming 600. Due to insufficient and instable domestic supply together with high prices, Vissan started to import live cows from Australia last September, he added.

Muoi said the cost of importing and slaughtering cows is around US$5 million. Vissan slaughters 50 cows a day on average to supply beef for supermarkets and fresh food stores across HCMC.

Luu Son Thuy, director of Thuy Ha Private Enterprise, said competitive prices, tenderness and pleasant smell are key factors that make Australian beef sell well on the local market.

According to Meat and Livestock Australia (MLA), Australia’s exports of live cattle to Vietnam have picked up almost 90 times since the 2011-2012 financial year, from 1,500 to 131,000 cows.

However, MLA forecast the export volume to Vietnam could decline from this year.

State groups to buy VND71 trillion worth of products from one another

State-owned business groups and corporations have clinched deals to buy VND71 trillion worth of goods from one another nearly two years after the Ministry of Industry and Trade told them to join forces to support their operations and help boost sales of Vietnamese goods to reduce inventories.

The deals do not cover electricity and petroleum contracts.

Statistics of the ministry showed the State-owned enterprises have spent nearly VND4.2 trillion on electrical equipment, VND5.2 trillion on construction steel and VND55 billion on labor protective clothes.

In 2012 when the ministry issued a directive calling for State-owned groups and corporations to help one another, inventories of various products remained high at most of the enterprises due to poor competitiveness and designs of their products.

For example, the inventories of processing and manufacturing industries jumped by 20.4% against the previous year.

In October 2012, 16 State-owned companies clinched deals and 11 others signed memoranda of understanding to consume one another’s products. So far, their inventories have declined significantly.

When the directive was issued, there were concerns that it would lead to unhealthy competition between State-owned and foreign companies and enterprises of other economic sectors and a lack of transparency in bidding packages, thus distorting the business environment.

Although the directive helped many companies, it is not considered a motivation for them to develop operations. Domestically-made products are not diversified in terms of designs and categories, and are of dismal quality. A number of enterprises have found it difficult to secure quantity and quality as well as delivery schedule.

Sasco to launch IPO next month

Tan Son Nhat Airport Services Company (Sasco), a subsidiary of Airports Corporation of Vietnam, will launch an initial public offering (IPO) on September 18 with over 31 million shares offered at VND10,000 per share.

According to Sasco’s equitization plan approved by the Ministry of Transport, the State owns 67.06 million shares, equivalent to 51% of the company’s chartered capital. The company will sell over 2.3 million (1.75%) shares to its employees.

Sasco plans to put up 31.1 million shares (23.65%) for public auction and sell 31.03 million shares (23.6%) to strategic investors.

The auction will take place on September 18 on the Hochiminh Stock Exchange. Notably, foreign investors are permitted to buy all the shares on offer.

At least three strategic investors have registered to buy shares of Sasco, with Imex Pan Pacific Co., Ltd. proposing 21.04 million shares (16%), Au Chau Fashion and Cosmetics Co., Ltd. about 3.42 million shares (2.6%) and Duy Anh Fashion and Cosmetics Co., Ltd. around 6.58 million shares (5%).

Sasco now has 1,596 employees but the number of employees will drop to 1,586 after its equitization.

Headquartered at Tan Son Nhat Airport in HCMC, Sasco has total chartered capital of VND1.315 trillion. The company sells duty-free goods, handicrafts, gold, silver, precious stones and books, and provides catering and tourist transport services.

Sasco, Noi Bai Airport Services Company (Nasco) and Danang Airport Services Company (Masco) are the three big companies offering services at airports in Vietnam.

15% of conditional business sectors proposed for abolishment

Agencies of the Government agreed on a proposal by the Ministry of Planning and Investment to axe around 15% of conditional business sectors at a meeting held in Hanoi on August 19 to review prohibited and conditional business areas.

The meeting took place more than one week after the National Assembly (NA) Standing Committee urged the Government to complete a list of prohibited and conditional business sectors soon so that the legislative body can consider and approve relevant amendments to the Investment Law at its eighth session later this year.    

To prepare for the amendments, the Ministry of Planning and Investment has been told to coordinate with other ministries and agencies to draw up a list of banned and conditional business sectors and report it to the Government before presenting it to the NA Standing Committee.

The planning ministry reported at the meeting chaired by Prime Minister Nguyen Tan Dung that there are 386 conditional business areas overseen by 16 ministries and sectors and regulated in 391 legal documents, including 56 laws, eight ordinances, 115 decrees, 176 circulars, 26 decisions of ministers and two documents of ministries.

Preliminary reviews indicated that around 56 out of the 386 conditional business areas can be eliminated.

The MPI proposed abolishing the business sectors which no longer need controls; removing or amending unnecessary, unreasonable and unclear conditions; and changing some business conditions from license issuance to self-registration.

Government members at the meeting agreed on removing 15% of unnecessary conditional sectors and ministries and agencies to continue their reviews to ensure a list of conditional business sectors for feasible implementation, business freedom and the efficiency of the State management before presenting it to the NA Standing Committee and the NA.

The planning ministry suggested retaining only eight out of 51 prohibited business sectors at present.

According to Vietnam News Agency, the Prime Minister hailed coordination between ministries and agencies in reviewing banned and conditional business sectors as well as encouraging sectors and localities for investors. But, he insisted limits on the rights of citizens should be made specifically in laws, and people and enterprises can do business in the areas not prohibited by law.

“State management is not for our convenience but aims to create favorable conditions for people and enterprises to do business and to make investments,” the Prime Minister said.

Online tax declaration more popular among enterprises

Online tax declaration has become popular among enterprises, with some major localities reporting the penetration rate of over 90%, according to the General Department of Taxation.

As of the first half of the year, the online tax declaration service provided by the general department is available in all the 63 provinces and cities nationwide with nearly 400,000 businesses and organizations using it.

Over 90% of companies in HCMC, Hanoi, Ba Ria-Vung Tau and Quang Ninh are using electronic tax declaration. However, there are a few localities reporting a rate of less than 10%.

The General Department of Taxation said that by the end of this year, 95-100% of enterprises should have used the online tax declaration service, which is in line with the Government’s target for improving administrative procedures concerning tax payment.

Local tax departments applying the value added tax (VAT) management system have to encourage enterprises to do tax declaration online from October this year, according to the general department.

After the central tax management system is completed, all companies nationwide could use it to fill out tax declaration forms, said the department.

Previously, the Ba Ria-Vung Tau Tax Department ordered its sub-departments to deploy online tax declarations while newly-established or operating organizations must register their online signatures to do the tax declaration service from this year’s second half.

Ties between State groups marred by substandard products

Two years since State-owned groups were directed by the Government to strengthen ties among themselves, especially in consuming one another’s products, the results are still not satisfactory as many products of one group have failed to suit the demand of the other.

Experts and leaders of many corporations at a review meeting on August 19 assessed domestic products in many instances cannot meet high demand for quality and designs, the Vietnam News Agency reports. Local producers need to focus on technical improvement, cost reduction and to operate on the basis of market principles, they said at the meeting held by the Ministry of Industry and Trade in Hanoi.

Nguyen Xuan Son, general director of Vietnam Oil and Gas Corp. (PetroVietnam), said his group prioritized products supplied by other local corporations. However, it is difficult to further bolster this cooperation format because many domestic products are unqualified.

The leader of PetroVietnam stated his company had to import millions of tons of finished steel products because the low-quality steel in local market cannot meet the demand of high-tech projects. Even simple details like screws had to be imported due to the poor corrosion-resistance of Vietnam-made products.

In fact, PetroVietnam has shaken hands with Vietnam Electricity Group (EVN) to construct power plants and use electricity generated by each other. It also worked with Vietnam National Textile and Garment Group (Vinatex) to jointly produce fiber, and purchase petroleum products of Dung Quat Oil Refinery under Vietnam National Petroleum Group (Petrolimex).

Tran Quang Nghi, general director of Vinatex, suggested that the Ministry of Industry and Trade make comparisons of foreign and domestic products so that businesses will feel more secure and reasonable when choosing local products of the same quality and same price.

Two years after the cooperation agreements to prioritize Vietnamese products in manufacturing, many domestic firms have created a supply chain to clear stock and reduce expenses.

In 2012, EVN’s local purchases of materials and equipment accounted for 42%, but the rate increased to over 48% in the first nine months of 2013.

This rate at Vietnam Vegetable Oils Industry Corporation stood at 68% in 2012 and 88% in the first nine months of 2013.

Domestic production satisfied 35% of petroleum needs, 40% of mechanical engineering products, and 100% of building materials. The number is 50% for liquefied petroleum gas, basic chemicals and pulp and 30% for scrap steel and fabric.

According to the Ministry of Industry and Trade, products which are manufactured in the country cannot compete with imports in terms of quality and design. Some are not qualified enough to be used in hi-tech works.

To improve the situation, the ministry is singling out 20 competitive product groups for businesses to choose from instead of importing, said deputy minister Ho Thi Kim Thoa.  At the same time, other measures will be mulled to push up the market and create a connection among local firms.

She also stressed companies under the Ministry of Industry and Trade had to improve their manufacturing, find solutions to cut costs and enhance competitiveness.

Farmers advised to attend more to dragon fruit quality

Despite soaring export revenue of the dragon fruit, many agricultural experts advised farmers to focus more on quality rather than quantity to avoid sluggish consumption that happened to watermelon earlier this year.

The local fruit market has seen strong fluctuations since China illegally placed an oil rig in Vietnam’s exclusive economic zone and continental shelf. However, with the combined efforts of the Government and local enterprises to seek more outlets, export earnings of this fruit still remain fairly high.

Vietnam shipped abroad more than 200,000 tons of dragon fruit worth US$150 million in the year’s first half, rising 40% and 60% year-on-year respectively, said Luong Ngoc Trung Lap, head of the market research department at the Southern Fruit Research Institute (SOFRI).

Export of this fruit to the U.S. fetched US$6 million followed by Japan with US$3.1 million, Hong Kong with US$2.5 million and South Korea with US$1.5 million, showing sharp increases of between 38% and 200%, while shipments to China generated US$110 million despite volatility.

The SOFRI estimated the fruit output at 650,000 tons with the export volume accounting for 420,000-450,000 tons for the whole year, up 20,000-50,000 tons against last year.

However, Lap also expressed his concern over the quality of dragon fruit for export whereas the volume of low-grade dragon fruit still remains high. Therefore, it is crucial to attend more to the quality to meet the export standards.

Le Minh Duc, director of Long An Department of Agriculture and Rural Development, said China is unable to grow dragon fruit successfully due to inclement weather. “Therefore, we have ample room to boost our dragon fruit exports to this market,” Duc noted.

Meanwhile, Lap said local exporters recently have further penetrated a number of choosy markets requiring high quality such as the U.S., Japan, Hong Kong and South Korea. “If we can expand exports to these markets, we can lessen dependence on China and raise the value of dragon fruit exports,” Lap added.

Nguyen Huu Dat, director of Post Entry Quarantine Center 2 under the Plant Protection Department, advised local exporters to classify the fruit thoroughly together with careful and attractive packaging before shipment.

L’Oréal Vietnam has new boss

L’Oréal Group has appointed Brendon Urlich as country managing director of L’Oréal Vietnam. Urlich previously held the position of Executive General Manager of L’Oréal New Zealand.

Since joining the company in 2012, Urlich has spearheaded the strategy to develop Consumer Product Division into a leading supplier in the grocery channels and is on August 20 the No.1 supplier in the Health and Beauty category in New Zealand. Under his management, L’Oréal New Zealand has outperformed the market and took share from competitors.

“L’Oréal Vietnam is now positioned to “ride the wave” of the very promising Vietnam beauty market. The opportunity ahead for L’Oréal Vietnam is vast. To seize it, we must focus, move faster and continue to attract great talent. A key part of my job is to bring more innovative yet affordable products to the discerning Vietnamese consumers quickly,” he said in a statement.

Before joining L’Oréal Group, he had had an international career with British American Tobacco that took him across ASEAN, South Eastern Europe, the Middle East, UK and Brazil in marketing, sales and general management roles.

The Central highland province of Lam Dong has approved two new Japanese and Korean high-tech agricultural projects.

The Agriteck Japan Company has received an investment licence to implement its US$2 million high tech project on vegetable cultivation and livestock farming at Tu Tra commune, Don Duong district.

Hankook Samgon Company from the Republic of Korea got approval to make a US$1.9million investment into a high tech project on fruits, flower and vegetable planting at Da Nhim commune, Lac Duong district.

The People’s Committee of Lam Dong Province has also allowed Taiwan’s DouSheng Co Ltd to set up a US$200,000 project in planting and processing for exports in Tram Hanh village, Da Lat City.

Ho Chi Minh Highway to help Central Highlands Gia Lai thrive

A 600-km section of Ho Chi Minh Highway crossing the Central Highlands, scheduled to complete in 2016, is expected to fuel the comprehensive socio-economic development of the regional province of Gia Lai.

Gia Lai lies in the region’s intersection connecting with the central coastal area where there are six economic zones, 54 industrial parks and 13 seaports.

Contractors have been speeding up construction of the section, which has a total investment of 16 trillion VND (752 million USD).

Once finished, the section will stretch over 97 km through five districts and Pleiku city of Gia Lai . It will connect with National Highway 19, Highway 25, and trans-provincial roads, creating a smooth transport system between the locality and other regions.

To benefit most from the new road will be the province’s processing sector.

Gia Lai holds huge advantages of industrial crop farming as it owns more than 100,000 ha grown with rubber trees, nearly 80,000 ha with coffee plants, and about 10,000 ha producing pepper.

Products from these industrial plants as well as other farm and forestry items will see their values rising because the highway will fix the existing poor transport system, which has for long lowered prices of these products.

The road will become an advantage of Gia Lai in luring more foreign and domestic investments for exploiting its position in the Vietnam-Laos-Cambodia development triangle.

In 2013 and the first half of 2014, the province granted investment licences to and approved 149 projects valued tens of trillion VND. Notably, 52 projects with a total investment of 5.85 trillion VND (274.95 million USD) have become operational, while other 57 projects totalling 12 trillion VND (564 million USD) are carrying out construction work.

The local tourism sector has pinned much hope on the future road to strengthen its connectivity wit neighbouring localities to fully tap a treasure of natural resources and landscape held by the locality and the entire Central Highlands, such as T’nung lake, Phu Cuong waterfall, Kon Ka Kinh National Park, Mang Den, and Yok Don National Park.

Ho Chi Minh Highway is the largest-ever project in Vietnam as it runs across the country with a total length of 3,183 km. As many as 2,000 km of the road were opened to traffic. It is expected to become fully operating before 2020.

Human resource plays a key role in business growth

For a business to be successful, focus should be on developing staff, participants said at a panel discussion on "CEO perspectives on HR management" held in Ho Chi Minh City.

Businesses depend on many factors, including capital, technology and human resources, but of these, HR plays a decisive role in success, said Nguyen Trong Dam, Deputy Minister of the Labour, Invalids and Social Affairs.

If a business has high-quality HR and a good management policy, it could promote their employees' potential, he said.

Nguyen Ngoc Hoa, Chairman of Saigon Co.op, said HR was even more important in the time of economic integration.

HR practitioners must understand the business operations of their companies and their staff in order to develop appropriate HR strategies to maximise the latter's potential.

"Besides training, companies need to develop their business culture, and create a good working environment to retain people," he said.

Delegates at the event agreed that local companies were paying more attention to making their HR management more professional.

Enterprises investing in people and in HR management usually achieved great success, they said.

Edward Foong, assistant honorary secretary of the Singapore Human Resources Institute (SHRI), said Vietnam had grown quickly after entering the World Trade Organisation 2007.

HR managers in Vietnam were becoming more capable, with more Vietnamese people taking leadership positions in HR departments today, he said.

In Vietnam, companies had a more relationship focus and different companies had their own practices.

HR management in Singapore was more standardised across the entire country, and HR practitioners pulled together to share experience and knowledge, he said.

A combination of a relationship focus and standardisation would be better for the HR community in Vietnam, he said.

"The HR community needs to continue to upgrade to be more confident, to earn the seat next to the CEO of an organisation and not see yourself as an administrator only doing transactions," he said.

"I see Vietnam as being in a very similar situation to Singapore many years ago. More and more people enter the HR community because they realize the importance of the HR's contribution to the company.

A few years from now, Vietnam HR community and Singapore HR community could be on par with each other, he said.

To recognise HR people as well as create a platform for HR practitioners to share experience, the Talentnet Corporation and the Labour and Social Affairs newspaper on August 19 launched the Vietnam HR Awards, the first of its kind in the country.

Endorsed by the Ministry of Labour, Invalids and Social Affairs, the awards aim to honour organisations that have achieved overall effectiveness in their HR and people management practices, and have established common codes for measuring HR management, said Tieu Yen Trinh, General Director of Talentnet Corporation.

Based on the professional methods of the Singapore Human Resources Institute (SHRI), the awards also aim to connect enterprise owners and staff through raising awareness about HR's role.

Any business operating in Vietnam for at least three years with a staff of at least 100 people are encouraged to apply for the awards.

Registration is now open until September 19, and awards will be presented in December.

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