Workshop introduces sustainability index

The Asian Institute of Technology in Vietnam (AIT-VN) held a workshop introducing “business sustainability index” in Hanoi on September 25.

The event aimed to promote clean production in enterprises and establish a network of green production–oriented businesses.

Addressing the event, Dr Fredric William Swierczek, AIT-VN director spoke of the basic characteristics of a sustainable enterprise and indices to evaluate business sustainability.

AIT-VN Deputy Director Nguyen Thi Bich Hoa said the sustainability index would be applied to measure enterprises’ sustainability.

In an era of international integration, the index would help enterprises join the global business network, she added.

The workshop is part of a series of eco-innovation workshops for enterprises hosted by AIT-VN to enhance their competitiveness and their business sustainability strategies.

Bright prospects for food and beverage exports in the US

Vietnamese businesses have been urged to learn more about the US Food Safety Modernisation Act (FSMA) to fully capitalise on opportunities to export food and beverage products to the US market.

The announcement was made at a seminar in Hanoi on September 25 discussing opportunities to export food and beverage products to the US and compliance with the US Food and Drug Administration’s (FDA) requirements.

According to the Ministry of Industry and trade (MoIT), Vietnam-US trade ties have developed rapidly in both scale and value. The US has so far become Vietnam’s second largest trade partner and the biggest export market. Last year, total export turnover to the US reached US$29.1 billion, of which Vietnamese exports grossed nearly US$24 billion in revenue.

A representative from the Vietnam Trade Promotion Agency under the MoIT said seafood products to the US have accounted for 22% of Vietnamese total exports, generating US$1.5 billion last year.

Cashew nuts, coffee, and other products also have bright prospects for exports to the market. However, the FDA has set forth strict regulations and technical barriers which businesses need to learn more about to ensure compliance and further increase exports.

Registrar Corp Vice President David Lennarz said to export food and beverages to the demanding market, Vietnamese businesses should comply fully with FDA regulations, especially the Bioterrorism Act, and other strict requirements.

Mr Lennarz noted Vietnamese businesses should register with the FDA in terms of packaging establishment and brands in accordance with FDA regulations as well as making full preparations for FDA inspection over their food production establishments.

The FDA’s future most important regulation, set for release in October, concerns itself with the development of a food and safety system to analyse and prevent risks and limit losses.

At present, the MoIT has disseminated new information on the US’ food and safety regulations to help local businesses avoid risks when exporting to the US.

Binh Duong runs nine-month trade surplus of US$2 billion

The southern province of Binh Duong generated over US$11 billion from exports during the first nine months of this year, moving closer to its annual target of US$16.7 billion, which is up by 16.5% compared to last year.

The export figure, with 83.1% contributed by foreign investors, marked a trade surplus of more than US$2 billion.

Industrial production was valued at more than VND131 trillion (US$6.2 billion), a year-on-year rise of 13.6%, Director of the provincial Department of Industry and Trade Vo Van Cu said.

During this period, 99 foreign-invested firms poured an extra US$727 million into the locality, while 275 local firms registered an increase in capital of VND2 trillion (US$90 million).

In the past, Binh Duong offered tax breaks and exemptions worth close to VND1.3 trillion (US$61 million), and a US$45 million credit package to struggling firms.

Procedures on taxation, customs, land, construction and social insurance have also been improved.

The Mekong Delta provinces have exported more than 120,000 tonnes of rice, bringing total rice export volume in the first nine months of the year to 4 million tonnes valued at US$1.84 billion, according to the Steering Committee for Southwestern Region.

These provinces aim to export an additional 2.3 million tonnes, lifting total rice export volume to 6.3 million tonnes from now to the end of the year.

The Committee's  Deputy Head  Nguyen Phong Quang, said although rice exports face difficulties this year, support measures have been take to help businesses conduct market surveys, develop trademarks and promote trade promotion in Asia, the European Union and the North American.

He added local businesses have invested an additional VND600 billion in installing modern production lines to improve product quality to meet the consumer demands in foreign markets and export hundreds of thousands tonnes of rice to the EU, North America, Japan and Australia.

Can Tho, Kien Giang, An Giang, Dong Thap provinces have directly contacted foreign customers instead of brokers to reduce costs and meet huge orders from partners.

HCM City pledges full support for Singaporean businesses

Ho Chi Minh City’s Party Committee Secretary Le Thanh Hai has affirmed his city’s willingness to create favorable conditions for Singaporean businesses to invest in potential areas- economy, trade, tourism, health care and education.

He made the affirmation at a reception for Former Prime Minister and Emeritus Senior Minister of Singapore, Goh Chok Tong in HCM City on September 25.

Hai highlighted the Singaporean official’s visit as a positive contribution to deepening the sound relations between Vietnam and Singapore and expressed his delight at the flourishing comprehensive cooperation in a multitude of fields- politics, economy, trade, investment, culture and education.

In Vietnam- Singapore relations, HCM City has made a great deal of efforts in carrying out commitments and cooperation programs between the two countries.

Singapore is currently one of the leading investors in HCM City with bilateral trade reaching at a high record. Hai thanked Singapore for supporting and sharing with the city its valuable experiences in planning and urban management, environmental pollution treatment and English training for municipal officials and employees.

“The advantages of geographical position, fine political relations as well as sustainable economic ties will provide leverage for HCM City and Singapore to expand stronger cooperation in various areas.” Hai said.

For his part, former PM Goh Chok Tong said he was impressed by the city’s dynamic and vigorous growth after nearly 7 years of his revisit and believed that the city will continue to grow more steadily in the not so distant future.

Future extensive cooperation should be focused on finance, aviation and infrastructure development. Vietnam can seek influx of capital from Singapore- a regional financial center while HCM City needs to adopt incentive policies, improve skills for young labour force aiming to lure more foreign investors, Goh said.

Former PM Goh Chok Tong and HCMC People's Committee Chairman Le Hoang Quan witnessing the granting of an investment license to Singapore’s Ascendas Pte and Vietnam’s Saigon Bund Capita Partners.

Earlier the same day, Goh Chok Tong met with Municipal People's Committee Chairman Le Hoang Quan discussing ways to promote bilateral cooperation in the time ahead.

Cooperation between HCM City and Singapore has seen constant development in recent years. By nearly the end of September, more than 500 Singaporean firms have poured US$7 billion into 693 projects in the city. Trade turnover between the two sides reached more than US$3 billion during January-August.

“HCM City will do its utmost to realize cooperation agreements as agreed by Vietnamese and Singaporean senior leaders.” Quan said.

The Singaporean Government always encourages enterprises to invest in HCM City and Singaporean banks are keen to expand their branches in Vietnam and are set to open more in the city, Goh assured his host.

On the occasion, former PM Gok Chok Tong witnessed the granting of an investment certificate to Singapore’s Ascendas Pte and Vietnam’s Saigon Bund Capita Partners to carry out the Onehub Saigon complex construction project in HCM City high-tech zone.

The US$130 million project, covering 11.9 ha is considered important for cooperative relations between Vietnam and Singapore and a new model for high-tech zone development.

Hoang Quan said he hopes there will be more Singaporean businesses selecting HCM City as an attractive, stable and environmentally friendly investment destination.

Levelling the global economic playing field

The economic playing field in which Vietnam is a thrust will drastically change upon the realisation of the ASEAN Economic Community (AEC) and regional integration by 2015.

The trade pacts with the EU and US, which are in the offing, will further complicate the economic landscape as Vietnam scrambles to fulfil its commitments by opening markets, scrapping many import tariffs, opening services, and reducing technical trade barriers.

Experts caution that although these milestones bring with them bright prospects for much greater economic prosperity in the long-term, the transition is not going to be a bed of roses, and there are many pitfalls and challenges that lie ahead in the short term.

Businesses need to be circumspect about their approach to and each of them must be well prepared for the opportunities and challenges, they say.

Economic expert Pham Chi Lan is wary of the economic and business capacity of the Vietnamese business community, saying it is not strong enough to quickly weather the storm.

Around 98% of Vietnamese businesses are small and medium sized and are always short of capital. They are easily affected by outside factors. Furthermore, a lack of coordination makes it difficult for them to align themselves and form strong business blocs.

If Vietnamese businesses do not reorient their business plans and find a niche in a production chain, it will be virtually impossible for them to survive in the new competitive market place in the long-term, Lan says.

Local businesses are going to bear the brunt of fierce competition, requiring them to make a greater effort to improve themselves. The best laid business plans and strategies of the past will not suffice in the new economic environment.

Vo Tri Thanh, another prominent economist is also concerned about whether the requisite institutional reforms will be sufficiently in place to effectively cope with the competitive onslaught on the horizon.

Thanh suggests a stronger institutional reform, saying there is a dire need for a carefully though-out and coordinated effort from the Government and businesses to put the reform plan in place.

Compared to other markets in new market space, Vietnam is much weaker in terms of qualifications, development and economic capacity, and will simply be overwhelmed when besieged with foreign competition.

In the new economic playing field brought about by global integration, many countries have made thorough preparations and if Vietnam does not follow their lead, the nation quite simply will never catch up with them, Thanh warns.

Tran Ba Duong, CEO of Truong Hai Automobile Company, says businesses should seize the opportunities and carefully craft a long-term strategy and start preparing immediately.

Duong says he has been working for the past 12 years and expended much effort to accomplish his goals and achieve success.  Success is highly dependent on prudence and carefully laying out business plans, in addition to effort.

The new economic playing field is not for laggards, advises Truong Gia Binh, Chairman of FPT Board of Directors. Businesses should strive their utmost to grasp the opportunities and transform them into reality.

Concrete plans and foresight are the order of the day, Binh says, adding businesses need to devise detailed action plans and be vigilant in their implementation. Plans should encompass both the short and long-terms, he says.

Although businesses have paid great attention to major agreements, such as Trans-Pacific Partnership (TPP) and Vietnam-EU FTA, they have little to vague knowledge of regional agreements.

Beginning in 2015 ASEAN markets will open comprehensively. The competitive risks are imminent, however, many businesses are lackadaisical and ignore or act as they still do not care about it.

This is a very dangerous attitude as it guarantees these businesses will most certainly fail on their home turf when it comes to competing directly with more experienced counterparts from other regional nations.

In addition to the individual effort expended by businesses, success or failure is also highly dependent on Governmental policy and guidelines, says Johnathan Hanh Nguyen, President of the Imex Pan-Pacific Group (IPP).

The Government has listened to the business community’s collective voice, so many issues have been dealt with effectively.

Businesses should get more actively involved in making policy in cohesion with the Government in order to ensure those policies are in alignment with reality, says Tran Ba Duong.

Vo Tri Thanh says a strategic vision by the Government toward reforming institutions is obligatory to the creation of a healthy competitive environment and level global economic playing field for businesses.

China textile firm to expand infrastructure in Hai Ha District

Chinese textile company Texhong will begin implementing two projects worth US$515 million in this northern province on October 30.

Nguyen Van Thanh, the provincial People's Committee vice chairman, made the announcement at a meeting on Wednesday.

According to Thanh, the company will develop the infrastructure of the Texhong Hai Ha Industrial Zone in Hai Ha District. It obtained an investment licence for the park in late April and will spend VND4.52 trillion, or US$215 million, to implement the project's first phase in a 660-ha site in the industrial zone.

Texhong will also build a chain of industrial facilities for garment and textile manufacturing. It obtained an investment license for the chain early this month and will spend $300 million to implement the project on a 62.5-ha site in the industrial zone.

India seeks to focus on tourism, textiles, leather trade with VN

A Make in India campaign launched by Indian Prime Minister Shri Narendra in New Delhi yesterday was immediately felt in Ha Noi with the start of an India-Viet Nam trade and investment programme.

The programme provides information about India's investment environment to national leaders, agencies and enterprises and encourages trade and investment co-operation, said Tran Quang Huy, director general of the African and South-West Asian Markets Department of the Ministry of Trade and Commerce.

Preeti Saran, Indian Ambassador to Viet Nam, said India hoped Viet Nam would look to it not just for trade but also for investment. She said she had noticed the dynamism of Viet Nam's economy and its successful investment in many parts of the world.

The ambassador expressed hope for a renewed focus on key sectors, including tourism, textiles, leather industry, garments and agriculture.

Derivatives market framework in progress

In an effort to run the derivatives market more safely and efficiently, the State Securities Commission (SSC) has started building a legal framework, SCC vice chairman, Nguyen Thanh Long, said yesterday at a seminar in Ha Noi.

Long said Viet Nam's stockmarket was one of the fastest growing in the world, and current developments called for new products to satisfy investor demand. To assist, the Government issued Decision 366/QD-TTg to advance the derivatives market.

The SCC and the Viet Nam News Agency held the seminar to discuss the legal framework for derivatives and the market's development in Viet Nam.

Long said this was because derivatives were complicated and potentially risky, so the State Securities Commission needed to help manage the market to minimise risks.

Director of the SSC's Market Development Department, Nguyen Son, presented an unfinished draft decree on the derivatives market. It has provisions that include listing requirements for participants, trading rules, clearing, disclosure obligations, management, supervision and dispute resolution.

According to the draft decree, derivatives must be standardised, listed, and transacted on and through stock exchanges. They must be paid through a Central Counter Party (CCP) system to avoid risks.

The draft decree allows securities companies and commercial banks that meet certain capital and financial security standards to function as members of the derivatives market.

The public may submit suggestions or ideas regarding the draft decree until October 30 on the SSC's website: ssc.gov.vn.

The SSC expects to submit its decree to the Government by the end of the year.

ADB revises growth estimate

Shares bounced back yesterday even though the economic outlook was revised.

Based on the economic operations during the first eight months of this year, the Asian Development Bank (ADB) trimmed its estimate of Viet Nam's growth by 0.1 per cent to 5.5 per cent this year and 5.7 per cent in 2015.

The VN-Index on the HCM City Stock Exchange halted its eight-day-long decline by adding 0.25 per cent to close at 605.10 points.

The trading value remained almost the same as on Wednesday, at VND2.77 trillion (US$130.6 million), on a volume of 135.8 million shares.

However, the VN30 Index lost 0.27 per cent to end at 653.39 points, dragged down by property developer Vingroup (VIC) which hit the daily loss limit. Meanwhile, more than half of the stocks tracked by the index posted gains. The top gainer was PetroVietnam Transportation (PVT) with a six per cent rise. Da Nang Rubber (DRC) and Casumina Rubber (CSM) came next, adding five and three per cent respectively.

On the Ha Noi Stock Exchange, the HNX Index enjoyed a one per cent increase to reach 88.65 points.

If all other indexes fell in the morning, they bounced back at the close of yesterday's session, with the HNX30 Index rising 1.54 per cent to stand at 182.34 points.

The transaction value totalled VND1 trillion ($47.1 million) as 70.3 million shares changed hands.

Foreign investors pushed up their net-selling value by six times to VND395.4 billion ($18.6 million) in HCM City, while they bought a net VND15.5 billion ($731,000).

According to Ocean Securities, the losses suffered in the previous sessions were mainly caused by some large-cap stocks, namely PetroVietnam Gas (GAS), VIC and Vinamilk (VNM).

Meanwhile, FPT Securities analysts alleged that yesterday's rally was not stable.

Viet Nam achieves $2.5b trade surplus in 9 months

Viet Nam has gained a trade surplus of US$2.5 billion in the first nine months of 2014, a report from the General Statistics Office (GSO) revealed.

This is the eighth consecutive month that the country has achieved a trade surplus. It achieved a $244-million trade surplus in February after incurring a $100-million trade deficit in January.

Its 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 earned $109.63 billion in the first nine months, a 14.2-per cent year-on-year increase, and its total imports reached $107.16 billion, an 11.1-per cent year-on-year increase. The imports mostly consisted of materials and sub-materials for production.

The foreign direct investment (FDI) sector accounted for the largest proportion of export and import value in the first nine months, with exports worth $73 billion, a 14.2-per cent year-on-year increase, and imports worth $60.3 billion, a 9.8-per cent year-on-year increase.

Meanwhile, GSO experts noted signs of recovery in domestic enterprise production, as the enterprises imported more materials and sub-materials.

According to GSO, in the first nine months, domestic enterprises imported $7 billion worth of fabrics, a 15.1-per cent year-on-year increase; $3.5 billion worth of garments and textile accessories, a 25.3-per cent year-on-year increase; and $2.3 billion worth of plastic materials, a 23.1-per cent year-on-year increase.

The United States remained the country's largest export market in the first eight months, accounting for $21 billion in exports, or 22.7 per cent more than that of the same period last year.

Other significant export markets include the European Union with $20.1 billion in exports, or a 13 per cent rise from that of last year, and ASEAN with $14 billion.

A number of key exports achieved high growth in the first eight months of the year, including textiles and garments with $15.5 billion, an 18.9-per cent year-on-year rise; telephone and telephone components with $17 billion, a 10.1-per cent year-on-year rise; and crude oil with $5.78 billion, a 9.7-per cent year-on-year rise.

The GSO also reported that the largest import market was China with $31.1 billion, a 15.6 per cent rise from that of the same period last year.

Recovering cassava industry faces development obstacles

Viet Nam has witnessed a resurgence in its cassava exports since August 2014, but its cassava industry continues to face development challenges, experts said.

The Ministry of Agriculture and Rural Development (MARD) reported that cassava exports last August had tripled the production of previous months to 193,000 tonnes.

According to the MARD, however, in the first eight months of the year, cassava exports experienced a year-on-year reduction of 2.6 per cent in volume to 2.26 million tonnes, and four per cent in value to US$729 million, because of a fall in cassava exports for the first seven months of the year.

In the first eight months of the year, China continued to be the largest export market for Vietnamese cassava, accounting for 85 per cent of total exports. Also, the export price of cassava to China surged by 20 to 25 per cent to $245 per tonne.

Meanwhile, cassava exports to Japan witnessed sudden and dramatic growth, rising by 12 times in volume and seven times in value. Exports to Malaysia likewise increased by 6.65 per cent in volume but fell by 3.7 per cent in value compared with that of the same period last year.

The MARD expected Viet Nam to earn $1 billion from cassava exports for the entire year. However, Nguyen Van Lang, chairman of the Viet Nam Cassava Association, said the cassava industry's development remained unsustainable.

Viet Nam's cassava starch production is in the hands of 100 factories and hundreds of households, and the nation is the world's second largest cassava exporter after Thailand, according to the association.

The country has allotted 560,000 ha of land to cassava trees with a total output of 9.4 million tonnes, of which 30 per cent are for domestic consumption and 70 per cent, or 6.5 million tonnes, are for export.

But Lang said Viet Nam could export only three million tonnes of cassava this year because the global economic crisis has reduced world demand for cassava. He added that China, the largest export market of Vietnamese cassava, has also closed 70 per cent of its ethanol-producing factories as China's ethanol industry continued to stagnate.

Meanwhile, cassava production is expected to increase in Thailand, the world's largest cassava exporter, and Indonesia plans to triple the volume of its cassava exports this year.

Chinese enterprises have also been buying or investing in factories producing cassava starch in Laos and Cambodia to reduce its dependence on Viet Nam.

Therefore, Lang said, the State should continue promotion programmes for exporting cassava to other markets to ensure stability in consumption and avoid dependence on China. Target markets include India, Malaysia, the Philippines, Japan and South Korea, as well Taiwan and the European Union.

The association has also asked the MARD and the Ministry of Science and Technology to do scientific research on new cassava seeds with high levels of productivity, as well as technologies and equipment for increasing efficiency in the preservation and processing of cassava starch.

The State should also issue policies for offering soft loans to cassava-producing regions and regulating the environmental impact of cassava processing factories, added Lang.

Young entrepreneurs seek monetary policy loosening

Young entrepreneurs have asked the State Bank of Viet Nam (SBV) to consider loosening monetary policy to inject more capital into the market and stimulate economic growth.

The proposal was made at the meeting between the Viet Nam Young Entrepreneurs Association (VYEA) and the SBV this week. The online news website baodautu.vn, quoted SBV Governor Nguyen Van Binh's immediate reply: "The current monetary policy is very open. Credit caps for most economic sectors have been lifted and banks have a lot of money. The question is whether companies are competent enough to meet borrowing conditions."

Official figures showed that as of end-August, outstanding loans for agricultural and rural development increased by 6.1 per cent while outstanding loans for other purposes increased as well, including exports by 4.37 per cent, technological application by 12.73 per cent, support industries by 6.12 per cent, small and medium-sized enterprises by 2.57 per cent, and real estate by 9.85 per cent. However, these growth rates remained relatively low.

"Banks will knock at your doors if your companies are good," Binh remarked. While it will be unlikely for the SBV to lower borrowing standards and conditions, it is currently implementing projects that connect banks and enterprises, with support from local authorities.

Entrepreneurs urged the SBV to make it easier for start-up companies to access bank credit, especially trust loans. Binh noted that Viet Nam's policy makers have already issued documents that aim at boosting the provision of trust loans, and commercial banks and credit rating agencies were likely to take their first cautious steps toward providing loans without requiring collateral by evaluating company portfolios and leadership.

Nguyen Thi Hong, the SBV deputy governor, said earlier this month that if assessments of companies' payment capacity and business plans were positive, credit institutions may provide trust loans.

Experts said both banks and companies needed each other to spend capital, but much work remained to be done to develop trust before additional credit would be extended.

Untapped potential in VN-Egypt trade

Economic and trade relations between Viet Nam and Egypt remained modest and failed to match the potentials of both countries.

Youssef K. Hanna, the Egyptian ambassador to Viet Nam, also told a forum on doing business with Egypt in the capital city yesterday that moves to promote bilateral relations should come from the private sector and business communities of both countries.

Egypt was now one of the world's leading food importers while Viet Nam had strong advantages in agriculture and seafood, and these were the untapped areas for potential co-operation between the two countries, said Doan Duy Khuong, vice chairman of the Viet Nam Chamber of Commerce and Industry.

However, inadequate information was the biggest challenge to co-ooperation, Khuong added. He described the forum as a good chance for businesses to update themselves on the business climate in Egypt and Viet Nam and to seek out new opportunities.

Ayman Aly Osman, Head of Economic and Commercial Office in Bejing, stressed the importance of encouraging businesses to participate in economic events and exhibitions in both countries to explore and expand economic co-operation between Viet Nam and Egypt.

Besides calling on Vietnamese enterprises to invest in Egypt, the establishment of the Egyptian-Vietnamese Business Council and the exchange of information and knowledge about experiences in economic development issues were also necessary, Osman said.

Despite significant progress in bilateral trade from 2009 to 2012, Khuong noted that bilateral trade volume decreased sharply by 24 per cent in 2013 following political unrest in Egypt.

However, Vietnamese exports to Egypt have rebounded to US$200 million since the beginning of this year and are expected to exceed more than $300 million by year-end, with key export items including seafood; agricultural products such as pepper, cashew nuts and coffee; automotive spare parts; and cellphones and components.

Earlier, the Voice of Vietnam quoted the Vietnamese Trade Office in Egypt as saying Vietnamese businesses should revise their marketing strategies to attract new business in Egypt, including the boosting of the number of trade promotions.

Although Egypt has not superimposed strict requirements on imports, goods exported to the market must jump through rigorous quality standards which Vietnamese businesses need to be aware of, the office revealed.

CPI rise is lowest in 6 years

Viet Nam's consumer price index (CPI) in September increased by 0.4 per cent month-on-month and by 3.62 per cent year-on-year for its lowest increase in six years.

Nguyen Duc Thang, director of the General Statistics Office (GSO)'s CPI Department, also revealed that the country would meet the target of curbing inflation of more than five per cent this year.

Thang said September was usually the first of the year-end months to witness a price increase, but this month witnessed factors that curbed inflation, including petrol prices, which were reduced three times and helped bring down transport service prices by 0.4 per cent.

The CPI increase was partly attributed to the increase in rice prices in the southern region, as exporters continued to buy, sparking a 0.35-per cent increase that was the highest in the food and restaurant services group.

It was also partly attributed to education services, which posted a 6.38-per cent month-on-month increase. In the first nine months of the year, education services contributed 10.81 per cent to the country's CPI growth.

The cost of education services increased by 8.55 per cent in Ha Noi and 19 per cent in HCM City following tuition fee increases of universities and colleges, in line with the roadmap which the Prime Minister had approved.

In addition, increasing demand for textbooks in the new schoolyear sparked a 7.17-per cent increase in education services group costs.

Goods and services other than saw stable growth with insignificant change. Month-on-month increases were posted by garments, textile and footwear at 0.32-per cent, beverage and cigarettes at 0.08 per cent, household appliances at 0.21 per cent, pharmacy and healthcare services at 0.23 per cent and entertainment at 0.09 per cent.

Month-on-month decreases were posted by the house and building materials group at 0.38 per cent and the transport group at 1.85 per cent.

In September, gold prices declined by 1.66 per cent and US dollar prices fell by 0.15 per cent over those of the previous month.

KLF agreement makes room for more agricultural investments

KLF Joint Venture Investment International JSC (KLF) has signed a strategic co-operation agreement with HAI Agrochem Joint Stock Company, paving the way for KLF to invest in agricultural materials.

Under the agreement, KLF will support HAI in providing capital, enhancing administration quality and increasing the number of partners for its products' supply and consumption.

In addition, KLF has agreed to support HAI in enhancing its financial capacity by issuing or buying shares to become its strategic shareholder in the near future.

Quality improvements could boost exports

Vietnamese companies were urged to carefully study the European Union (EU)'s requirements for imports to maximise opportunities arising from Viet Nam's impending free trade agreement (FTA) with the trade bloc.

The call was made at a conference that the Viet Nam Trade Promotion Agency held yesterday to seek ways for Vietnamese companies to optimise business advantages and expand further into the EU market.

Negotiations for the EU-Viet Nam FTA began in 2012 and are entering the final round. The agreement, which creates opportunities for Viet Nam to boost exports to a market of about 500 million consumers, is to be signed by year-end.

A representative of the European Chamber of Commerce in Viet Nam (Eurocham) said negotiated reductions in tariff barriers alone will increase Vietnamese exports to the EU by 30 to 40 per cent.

The Eurocham official said the EU followed strict sanitary, phyto-sanitary, environmental and technical standards, and that consistency in the quality and safety of Vietnamese products would lead to an increase in exports.

Martin Buckle, an expert of the Centre for the Promotion of Imports from Developing Countries under the Netherlands Ministry of Foreign Affairs, said at the conference that EU importers were keen to develop business relationships with companies that took the time and effort to invest in quality.

He pointed out that increasingly stringent standards were applied to all food products being exported into the EU, including the hazard control system (HACCP), the new food safety management system (ISO 22000) and the European Union's new pesticide residue levels.

According to the Department of Processing and Trade for Agro-Forestry-Fisheries Products and Salt Production, the EU is a large potential market for Vietnamese agricultural products.

To tap the potential, especially after the FTA is signed, Vietnamese companies must carefully study the EU's strict quality requirements for imports, as well as the tastes of each sub-market in the EU, to set up appropriate export strategies.

Vietnamese companies should also pay attention to social and environmental responsibilities, the department added.

Official figures showed that the total value of goods traded between Viet Nam and the EU reached 27.6 billion euro (US$35.48 billion) in 2013, of which 77 per cent were Vietnamese exports.

Viet Nam's exports to the EU accounted for 19 per cent of the country's total export turnover, making the EU the country's second biggest trade partner.

Traders bring stuff home as Vietnam’s Saigon Tax closes 5 days early

Many traders at the Saigon Tax Trade Center have had no choice but to bring their goods home, as even their plans tobargain away the products could not come to fruition because the building is shutting down five days early.

The management board of the Saigon Tax, which is slated for demolition to facilitate the construction of Ho Chi Minh City’s first-ever subway system, has requested that all business activities in the building be halted as of 2:00 pm today, September 25, instead of on September 30, as earlier planned.

The early shutdown is to ensure safety for the metro construction, according to the management board.

But traders only learned of the shocking news on Monday, when they were still mounting a last-ditch effort to empty their stocks at heavily discounted prices.

Traders said they intended to take advantage of the weekends to “boost consumption,” but that plan has been shattered.

On Wednesday, while some traders still lingered in the 134-year-old trade center, located in the heart of Vietnam’s southern metropolis, others were busy packaging their stuff to bring home, or to company warehouses.

“I don’t know where we would relocate to,” a shop attendant of a jewelry store told Tuoi Tre (Youth) newspaper, while putting products into large cardboard boxes with her colleagues.

Piles of clothes, footwear products, and handicrafts were still on sale behind banners reading “70% OFF.”

“As tourists were nowhere to be seen, we had to sell at dirt cheap prices,” Nguyen Thi Thu Hong, who sells handicrafts on the second floor, lamented.

Hong said she will temporarily sell her goods at home in Binh Thanh District, as she has not found a suitable new location yet.

Many other traders at Saigon Tax also asserted that it has not been easy to find a new spot for their business.

While there are numerous spaces available at other trade centers in District 1, the city’s downtown, traders said they are leased at cut-throat prices.

Some traders said they cannot afford the US$50-70 a square meter rate offered by Vincom, a luxury shopping center only five minutes’ walk from Saigon Tax. Lucky Plaza, another deluxe trade center nearby on Nguyen Hue Street, asks for $250 per square meter, according to traders.

Vendors said their products, mostly handicrafts and souvenirs, can only find buyers in downtown Ho Chi Minh City, where foreign tourists are concentrated.

The management board of Saigon Tax has told traders that they could consider relocating to the Satra Mart supermarkets in District 8 and District 10. The two markets, along with Saigon Tax, are all managed by state-run Saigon Trading Group.

“We know we could not find any customers at such locations,” Hoang, now a former souvenir vendor at Saigon Tax, said.

A representative of the Saigon Tax management board told Tuoi Trethat they do not know how many traders would move to the Satra Mart supermarkets.

Built in 1880, the Saigon Tax Trade Center is a long-standing and renowned commercial center with a total floor area of 15,000 square meters.

At the request of the Ho Chi Minh City People's Committee, 500 square meters of the center’s gross floor area will be set aside for the construction of a metro line station.

The committee required the area to be handed over to the Ho Chi Minh City Urban Railway Management Board for building the ventilation structures of the metro station, one of 14 stations on the Ben Thanh-Suoi Tien metro line, by September 30.

The planned subway line, which will be 19.7km long, is the first-ever to be constructed in Vietnam.

It will run from District 1 through Binh Thanh District, District 2, District 9 and Thu Duc District in Ho Chi Minh City before reaching Di An Town in neighboring Binh Duong Province. It is estimated to cost $2.49 billion.

The remaining area of the Saigon Tax Trade Center will be torn down for the development of a 40-story skyscraper. This work will begin next year.

Processors: Tra fish prices unlikely to rise toward year-end

Seafood processing firms and farmers in the Mekong Delta have predicted prices of unprocessed tra fish would not increase towards the end of this year though supply is limited and demand rises, citing a new rule on tra fish exports.

Nguyen Ngoc Hai, chairman of Thoi An Seafood Cooperative based in Can Tho City, said a kilogram of unprocessed tra fish in the region is now sold at around VND23,500, but is not sure that it will go up in the final months of the year, although local farmers are anticipating higher prices as tra fish export often grows strongly in the final months of year.

However, many enterprises and growers are of the opinion that it is hard for the usual trend to turn into reality this year, and some even said prices of unprocessed tra fish may decline further. They shared this concern with the Daily on the sidelines of a recent conference co-held by the Vietnam Pangasius Association and the Directorate of Fisheries in Can Tho City to deploy Circular 23/2014/TT-BNNPTNT guiding the implementation of Decree 36/2014/ND-CP on breeding, processing and exporting tra fish products.

A representative of a tra fish processing enterprise in Tra Vinh Province said Circular 23 regulates that frozen tra fish fillet with ice ratios of over 10% and more than 83% for water content of the product weight will not be allowed for export next year. This means enterprises will have to reduce purchases and will center on processing and clearing their large tra fish inventories before the new rule takes effect.

The representative argued that high ice topping ratios help protect tra fish products during storage and transport processes and will not affect the quality. “The products are decided by both exporters and importers based on their negotiations not by exporters alone,” he said.

As for the water content of tra fish fillet, a leader of a tra fish processing company in Dong Thap Province said only importers wanting low-priced products request exporters to raise it in tra fillet products. Importers from selective markets always demand high-quality products.

Nguyen Huu Nguyen, chairman of Chau Phu Seafood Cooperative in An Giang Province, said Decree 36 will help rearrange and improve farming and processing of tra fish products for export. Growers will be hit directly if exporters have difficulty complying with the decree and exporting their products.

Nguyen said buying prices of unprocessed tra fish are now equivalent to production cost and many farms will suffer losses and go bankrupt if the prices fall further as forecast.

The supply of unprocessed tra fish dropped in almost all provinces in the Mekong Delta and was put at only 685,000 tons in the first eight months of the year, according to the Ministry of Agriculture and Rural Development. The volume in Dong Thap, Vinh Long and Ben Tre provinces alone slid by more than 21,000 tons over the same period last year.

The main reason behind the fall is that tra farm owners have not fed their tra fish well, extended the breeding period in anticipation of higher prices and harvested fish when it has not grown to the weight as wished by processors to avoid losses due to lower-than-expected prices of unprocessed tra fish.

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