Mekong Expo opens in Can Tho

Over 330 domestic and international enterprises are showcasing their products at the 2015 Mekong Expo, which kicked off on April 27 in the Mekong Delta city of Can Tho.

The annual event offers a chance for participating enterprises and economic organisations inside and outside the country to boost trade promotion, and introduce new products in order to intensify connectivity between businesses and consumers and to expand investment in the Mekong Delta and the entire country.

Besides the usual booths introducing industrial, agricultural and handicraft products, the highlight of this year’s event is an exhibition featuring Can Tho city’s socio-economic achievements after 40 years of national reunification.

A seminar outlining policies supporting small-and medium-sized enterprises to develop high-quality industrial products, and another on marketing skills, will also take place.

The event will conclude on April 27.-

Large trade fair promotes local products in Quang Ninh

The first One Commune One Product (OCOP) trade fair opened on April 26 in Ha Long city, northern Quang Ninh province.

The event is promoting local agricultural and tourism products in a bid to fully tap local potential for economic development.

The fair has been joined by more than 100 firms. Half of them are displaying products from 14 localities in the province. The rest are introducing domestic products produced nationwide.

Addressing the event, Vice Chairman of the Quang Ninh People’s Committee Dang Huy Hau said that the trade fair is an important activity in the Ha Long – Quang Ninh Tourism Week.

It offers opportunities for enterprises and individuals to seek potential partners while boosting the connection between producers and consumers, he added.

The trade fair runs until May 2.

Turkey ranks second among foreign investors in Vietnam

Turkey abruptly became the second largest foreign investors in Vietnam for the first four months of this year as a result of its US$660 million investment project in southern Dong Nai province’s Nhon Trach industrial zone.

Turkish-invested firm Hyosung Istanbul Tekstil in Nhon Trach IZ accounted for 17.7% of the total foreign direct investment (FDI) capital.

According to the Foreign Investment Agency under the Ministry of Planning and Investment, the total new and supplementary FDI capital during the January-April period hit US$3.722 billion, down 23% from last year’s same period.

In the reviewed period, the number of newly-registered and additional FDI projects rose by 14.9% and 19.3%, respectively.

Particularly, 76% of the total FDI came from the processing and manufacturing sectors.

Farm exports generate US$9.13 billion in revenue

Vietnam exports from agriculture, forestry and fishery in April hit US$2.61 billion, bringing the sector’s total export value for the first four months to US$9.13 billion.

The Ministry of Agriculture and Rural Development (MARD) reported that agricultural products for the January-April period fetched US$4.47 billion, down 6%. Several products showed strong declines, including rice (9.2%) and coffee (39.3%).

Only cashew nut grew in both volume at 85,000 tonnes, up 14.4% and value at US$635 million, up 36.3%.

From January leading up to April, fisheries exports reached US$1.87 billion, dipping 16.6%.

Meanwhile, exports of forestry products increased year-on-year by 6.7% to US$2.18 billion.

Experts propose flexible forex policy

Economic experts have suggested the State Bank of Vietnam (SBV) adopt a flexible foreign exchange policy and adjust it based on supply and demand, instead of forcing the Vietnam dong-US dollar exchange rate to move within 2% a year.

Dr. Nguyen Thuong Lang from National Economics University said the SBV should stop the scheme to devalue Vietnam dong by only 2% every year as there are no scientific foundations for this. Instead, the central bank should let market forces to decide the price of the greenback on the local market.

Lang acknowledged that the SBV’s forex rate policy has produced positive effects, helping stabilize the value of the domestic currency during the economic slowdown. But he noted that as the balance of payments has run a surplus in three consecutive years, the 2% dong devaluation plan every year is unnecessary.

Besides, implementing the plan is against the basic rules of a market economy.

However, Nguyen Thi Hong, deputy governor of the central bank, told the recent Spring Economic Forum 2015 in Nghe An Province that as the forex rate is a sensitive issue as it is driven by many factors including supply and demand, psychology and expectations, the central bank controls it based on developments of the entire economy.

This year, the central bank will still stick to keeping the forex rate move within a 2% band based on exports and imports, foreign reserves, balance of payments, inflation and public debt influence. However, the agency will closely follow market developments to adopt suitable policies, Hong said.

She said strong forex rate fluctuations in recent days are normal.

Dr. Nguyen Duc Do from the Institute of Economics and Finance cast doubt on dollar speculation given forex rate fluctuations though the central bank said there was strong dollar supply.

Do proposed if Vietnam’s economy grows 6-6.2% this year and deflation is in sight, the central bank should consider devaluing the dong devaluation by 3%, especially when the task of lowering bank interest rates by one to 1.5 percentage points is difficult to realize amid the current context of bad debt, budget deficit and high public debt.

Thai Binh Trading Corp invests US$23 million in Cuba

Thai Binh Trading Corporation would build two factories to manufacture washing powder and paper nappy in Cuba with the total investment capital of US$23 million, according to CEO and Chairman of the corporation, Tran Thanh Tu.

Cuba was a potential market of Vietnamese enterprises, Tu said. Moreover, the Cuban believed to use Vietnamese products, he emphasized.

The two factories were planned to be at Mariel special economic zones which was 43 kilometers from Havana.

The capacity of washing powder factory was 50,000 ton per year, supplying to Cuban market and exporting to countries in American continent.

Investment capital for the washing powder factory was US$18 million from Thai Binh Trading Corp, Vico Limited Company and Suchel Company. The factory is expected to open in the second quarter of 2017 with 40,000 square meters.

Thai Binh Trading Corp and Kywy Joint Stock Company invested US$5 million aiming to produce from 120 million to 180 million products per year. It would be built in 10,000 square meters and operated in first quarter of 2017.

Besides the two projects, Thai Binh Trading Corp planned to build wood manufacturing factory for interior and exterior architecture in Havana, Vice Chairman of the Corp, Nguyen Thi Kim Thao said. On the other hand, the Corp had participated in the merge and acquisition market in Cuba, as well as the supplying chains in Cuba such as convenient shops, Thao said.

Market players race for bigger share in truck market

Competition among car manufacturers is set to heat up as they scramble to compete in the freight-vehicle segment.

German-backed Mercedes Benz Vietnam (MBV) has recently launched an expensive campaign to promote the Mitsubishi Fuso Canter.

Customers buying Canter branded light trucks are entitled to raft of incentives at Fuso Canter service centres, such as free technical checks and a 20% discount on components.

Nguyen Duy Doan, a senior executive of MBV, said customers would be delighted at the best-of-class service standards being offered at affordable prices.

The move mirrors MBV’s growing interest into bolstering their market share in the light truck segment which was previously deemed to be the advantage of local firms.

Before falling into the hand of Germany’s Daimler AG, the parent company of MBV, the Mitsubishi Fuso light truck brand were only available in Vietnam in four versions.

Despite praise for their durability and energy efficiency, MBV only sold 761 Fuso trucks in 2013.

Sales figures for 2014 saw little improvements during a year characterised by transfer of the business from Mitsubishi to Mercedes Benz, but MBV expects a break-through in Fuso truck sales this year, according to Doan.

After 20 years’ experience in the Vietnamese market, MBV’s efforts to boost their sales of light trucks at this point in time is deemed a smart move as many Canter truck customers are looking to modernise their vehicles and grapple with government regulations intended to cut down on overloading.

In the light truck segment, Fuso truck’s main  rivals are imported trucks from the Republic of Korea and China, as well as locally-produced alternatives.

The Truong Hai Auto Corporation (THACO), currently Vietnam’s leading truck supplier, last year sold 20,500 vehicles, with more than 95% of them being light and medium-range trucks, accounting for half of the country’s total light and medium truck market share.

According to THACO sales director Mai Phuoc Nghe, trucks have been selling well because of more stringent vehicle quality checks.

As the government ratchets up check on overloaded vehicles, transport firms need more trucks to serve customers.

This year, THACO aims to sell 35,000 trucks, 90% of which are likely to be less than eight tonnes in weight, Nghe said.

“Our sales expansion plan is rooted on good supply preparations, and our products match current regulations on truck loads, so the products are selling well,” said Nghe.

THACO operates an expensive network of 70 sales dealers nationwide, and its diverse trucks benefit from a 40% localisation rate.

Lower-cost Chinese vehicles, have by contrast reported modest sales due to poor post-sale services on offer and difficulties in finding replacement components.

Thousands of tons of export rice to China stuck at border gate

Around 30,000 tons of Vietnamese rice exports to China have been stuck at border gates amid efforts by Chinese authorities to tighten checks along the border.

The sale and purchase of rice between Vietnamese suppliers and Chinese buyers have taken place in a way like in a market where buyers and sellers exchange goods for money, without any agreement reached before.

In addition, the sale of goods has been made not only at border gates but also at any ‘trail’ linking the two nations along their hundreds of kilometers of land border.

So, those ‘secondary’ border gates can be closed anytime for security issue, which puts a stop to the trading activities along the border.

30,000 tons of rice under sunlight and rain

Hundreds of trucks fully loaded with rice have stayed motionless in areas around different such ‘secondary’ border gates in the northern Vietnamese province of Lao Cai in the last ten days.

According to the Ban Quan border guard unit in Lao Cai’s Bao Thang District, Chinese buyers have stopped importing rice from Vietnam in the last two weeks because their authorities have tightened checks along the border.

The Lao Cai Department of Industry and Trade reported that Chinese buyers need no certificate of quality so Vietnamese traders rush to carry rice toward the border with China for export.

Now, the total amount of rice stuck in Lao Cai reaches some 30,000 tons which face the risk of decay, the department said.

Le Ngoc Hung, deputy chairman of the Lao Cai People’s Committee, said he has reported the problem to the central government.

He added that Lao Cai has signed initial agreements with Chinese authorities to open four more border gates in Lung Po, Ban Quan, Na Loc, and another unidentified site to lift the blockade for Vietnamese rice to enter China.

Large trade fair promotes local products in Quang Ninh

The first One Commune One Product (OCOP) trade fair opened on April 26 in Ha Long city, northern Quang Ninh province.

The event is promoting local agricultural and tourism products in a bid to fully tap local potential for economic development.

The fair has been joined by more than 100 firms. Half of them are displaying products from 14 localities in the province. The rest are introducing domestic products produced nationwide.

Addressing the event, Vice Chairman of the Quang Ninh People’s Committee Dang Huy Hau said that the trade fair is an important activity in the Ha Long – Quang Ninh Tourism Week.

It offers opportunities for enterprises and individuals to seek potential partners while boosting the connection between producers and consumers, he added.

The trade fair runs until May 2.

Military Bank honoured for performance

The Military Bank Joint Stock Company (MB) was recently honoured as one of the top 50 fastest growing enterprises in Vietnam during 2009-2014.

The selection criteria for the accolade are based on revenue growth rate, the contribution to the State’s budget over the five years and performance in profitable efficiency indexes including return on asset (ROA) and return on equity (ROE).

During the period, the bank achieved an impressive annual growth rate from 20-30 percent. Of the figure, the bank’s total assets increased 2.9 times, up 200.5 trillion VND (9.5 billion USD). Profit before tax reached 3.17 trillion VND (151 million USD) and the bad debt ratio was maintained at a marginal rate of 2.73 percent.

The bank projects enjoying a growth rate of 8 percent in 2015, while ownership capital is expected to increases to 16.5 trillion VND (789 million USD). Chapter capital should rise to 11.6 trillion VND (552 million USD).

During the five years, MB was one of the biggest tax payers. In 2014 alone, it contributed 800 billion VND (38 million USD) to the State budget.

The bank also received several awards in recognition of its quality management and outstanding performance, including the Asia Pacific Quality Organisation (APQO) prize in 2014 - the highest award given by the organisation. MIB also received the 2013 National Quality Award.

Northwest provinces seek to enhance tourism promotion

A workshop on how to further enhance connection among eight northwestern provinces to tap their tourism potential and strength took place in Phu Tho province on April 25.

During the event, domestic and foreign experts, managers and representatives from travel agencies said an agreement signed in 2008 among the provinces has brought about positive outcomes, seen in the rising number of tourists and tourism-related revenues every year.

Statistics show the region, which comprises Lao Cai, Yen Bai, Ha Giang, Phu Tho, Hoa Binh, Dien Bien, Son La and Lai Chau provinces, welcomed 14.3 million holiday-makers in 2014, including 988,000 foreign arrivals, earning a total revenue of over 7,8 trillion VND (362.8 million USD), a year-on-year increase of 22.5 percent.

However, participants said the region still lags behind other regions in the country due to limited and unprofessional promotion efforts and weak linkage with other tourist destinations.

Trinh Thi My Nghe, Deputy General Director of ITC Tourism Company stressed that while all provinces in the region have great tourism potential such as unique ethnic culture and customs, ancient relics and beautiful landscape, local tourism fail to attract great number of tourists due to a lack of original and distinctive products and unplanned and small-scale investment in tourism.

Deputy General Director of the Vietnam National Administration of Tourism (VNAT) Nguyen Quoc Hung said his agency will focus on building specific products for each locality, enacting appropriate policies and legal frameworks, intensifying promotion activities, training human resources serving in the field, in a bid to spur the development of the sector in the coming time.

More State-owned corporations to go equitisation

More centrally-run State-owned corporations will go equitisation this year, according to the party committee of the group of centrally-run State-owned corporations.

At a meeting on April 25, the committee said in 2015 it will push the equitisation of 52 member enterprises of centrally-run State-owned corporations and six holding companies – the Vietnam National Shipping Lines, the Shipbuilding Industry Corporation, the Song Da Corporation, the Housing and Urban Development Corporation, the Vietnam Cement Industry Corporation, and the Southern Food Corporation.

The corporations will also have to withdraw all their investment from 549 enterprises, part of their capital at 42 enterprises and merge their 45 enterprises within this year.

The centrally-run State-owned corporations group has 33 members, which together hold over one million billion VND (approximately 46 billion USD) of State capital. Among them, 28 are to undergo equitisation.

As of December 31, 2014, five corporations completed equitisation, which are the Bao Viet Holdings, Vietnam National Petroleum Group, Vietnam Steel Corporation, Vietnam National Textile and Garment Group and the Vietnam Airlines Corporation.

Meanwhile, 42 out of 94 member enterprises subject to equitisation also finished the work.

Centrally-run State-owned corporations withdrew all of their capital from 235 out of 784 enterprises and part of their investment at 13 out of 55 enterprises under Government instructions to divest investment from non-core business operations.

Alongside with their re-arrangement, the corporations continued to carry out their production and business plans, with 90 percent of them reporting profit last year, contributing 276 trillion VND, or 32.4 percent, to the State budget and ensuring stable jobs for more than one million employees.

Da Nang inaugurates road to renowned tourism area

A 10.46km-long road to the west of central Da Nang city was opened for traffic on April 25, expected to foster the travel to the Ba Na-Suoi Mo tourism area, one of the city’s famous interesting places.

The two-way road, Ba Na-Suoi Mo, is 10.5m wide on each side and has two 5m-wide pavements. It was built at a cost of more than 1.07 trillion VND (50.95 million USD).

Ba Na-Suoi Mo road and the conjoined Hoang Van Thai road form an important axis linking inner Lien Chieu district and outlying Hoa Vang district, thus promoting development in the west of the city, said Director of the municipal Department of Transport Le Van Trung.

The new road is a necessary condition for the opening of a bus route to the Ba Na-Suoi Mo tourism area in Hoa Vang, he noted, adding that it will also help attract investments in untapped potential of mountainous and midland communes of this district.

The Ba Na-Suoi Mo tourism area houses Ba Na Mountain, which is 1,487m high above the sea level, and Suoi Mo stream lying at its foot, according to the Da Nang authorities’ portal.

The mountain is home to a nature reserve with a diversity of rare fauna and flora species.

It also accommodates a cable car system that has a length of 5,042km and a height difference of more than 1,291m between its upper and lower stations, setting two Guinness World Records for the longest and highest non-stop cable car.

Vietnam attends int’l business fair in Argentina

Vietnam for the first time participated in the Trade Exchange Forum within the 2015 International Business Fair, which opened on April 25 in Arrecifes district, Buenos Aires province, Argentina.

The annual event saw the participation of about 200 Argentinean and foreign businesses operating in the fields of garments, footwear, building, foods, medical equipment, and transportation.

At the fair, representatives from the Vietnamese Commercial Affairs mission to Argentina introduced the government’s economic policy as well as potential in bilateral trade and investment cooperation to foreign businesses.

Companies in the South American nations expressed their interest in cooperation with Vietnam in the fields of footwear, hand tools and electronics products.

Trade turnover between Vietnam and Argentina hit a record high of 1.92 billion USD in 2014.

Vietnam’s exports to Argentina reached 214.2 million USD while imports stood at 1.7 billion USD.

Vietnam exported footwear, garments, tea, coffee, agricultural machines to Argentina, and imported animal feed, cereals, leather materials and beef from the South American countries.

Plentiful export opportunities seen for exports to EU: expert

Vietnam’s exports to the European Union are to rise by 75 percent by 2020, predicted Dr. Vu Huyen Phuong from Foreign Trade University.

The surge will lead to expanded production activities and increased attraction of foreign investment and job opportunities, said Dr. Phuong at a conference in Ho Chi Minh on April 25 which focused on supporting non-State entities in joining the Vietnam-EU free trade agreement (EVFTA).

Phuong also held that Vietnam’s labour export will also enjoy sharp growth.

Meanwhile, Nguyen Thi Quynh Nga from the Multi-Trade Policy Department under the Ministry of Industry and Trade, said the EVFTA is an ambitious and comprehensive deal on trade, service, investment and government procurement.

Apart from removing non-tariff barriers, the agreement will also settle other matters related to legal procedure, competitiveness, intellectual property including geographical indication.

Some experts at the conference agued that the deal is expected to pave the way for the increase of Vietnam’s exports as factors supporting export growth become saturated.

However, they pointed out a number of challenges facing Vietnam when the deal is signed, especially procedure to prove goods’ origin.

Besides, Vietnamese firms and farmers should try harder to compete against products imported from the EU, requiring stronger market strategies, information and forecast.

According to the Multi-Trade Policy Department, latest negotiations for the agreement concluded in March this year with positive results. The two sides expected to finalise a number of key contents of the deal towards the signing of the deal in the first half of 2015.

Vietnam, EU speed up FTA negotiations

Minister of Industry and Trade Vu Huy Hoang and European Commissioner for Trade Cecilia Malmstrom sought to boost Vietnam-EU Free Trade Agreement (FTA) negotiations during their working session in Kuala Lumpur on April 25.

The meeting was held on the sidelines of the 26th ASEAN Summit in Malaysia.

They touched upon the final package of the negotiations involving market opening alongside management rules and regulations concerning intellectual property rights.

Hoang urged the EU to create favourable conditions for Vietnam’s key export products, for example, textile and garment, footwear, farming goods and seafood, to enter its markets. He also committed to opening doors for European enterprises in Vietnam.

During his visit the Europe in October last year, Prime Minister Nguyen Tan Dung met with President of the European Commission (EC) Manuel Barroso to identify ways for the settlement of unsolved issues in a bid to soon conclude the FTA.

Since then, Vietnam and the EU have achieved significant progress in the FTA negotiations on several key matters.

The EU is one of Vietnam’s largest trade partners with two-way trade hitting 36.8 billion USD last year, a rise of 9 percent from 2013. Vietnam shipped to the partner 28 billion USD worth of commodities while its import reached 9 billion USD.

Some 25 out of the 28 European countries have invested in Vietnam by the end of 2014 with a total registered investment of 37.8 billion USD pouring in 2,100 projects, mainly in the fields of industry, construction and services.

The same day, the Vietnamese Minister, on behalf of ASEAN, also discussed the ASEAN-EU trade and investment work programme for 2015-2016 with the European Commissioner to map out orientations for closer ASEAN-EU cooperation.

Vietnam-Malaysia trade committee’s third meeting convened

The third meeting of the Vietnam-Malaysia trade joint committee took place in Kuala Lumpur on April 25, targeting measures to further intensify economic and trade cooperation.

Vietnamese Minister of Industry and Trade Vu Huy Hoang and Malaysian Minister of International Trade and Industry Mustapa Mohammed chaired the event.

The two sides agreed that economic policies hold great significance to bilateral trade. To create favourable conditions for business and investment, they suggested two countries reduce or eliminate trade barriers and simplify administrative procedures.

The two ministers discussed the signing of a memorandum of understanding on the pharmaceutical field, measures to boost collaboration between the Malaysia External Trade Development Corporation and the Vietnam Trade Promotion Agency, particularly in exchange of trade delegations and participation in fairs and exhibitions.

The meeting also highlighted the importance of the ASEAN Economic Community, which will be formed by the end of this year and create a common market in the ten-state bloc, as well as the need to strengthen cooperation and involvement in regional and multi-lateral forums and mechanisms such as the Trans-Pacific Partnership (TPP) agreement, the Asia-Pacific Economic Cooperation (APEC) and the World Trade Organisation.

According to the Malaysian Ministry of International Trade and Industry, in 2014, Vietnam was the 14th biggest trade partner in the world and the fourth among the ASEAN countries of Malaysia.

Two-way trade reached 9 billion USD last year, of which 4.3 billion USD came from Malaysia’s exports.

The two countries agreed to bring the trade to 15 billion USD or more by 2020.

Vasep warns of price competition with Indian shrimp

The Vietnam Association of Seafood Exporters and Producers (Vasep) has warned that local shrimp exporters may lose in their competition with Indian counterparts in the U.S. market if they do not lower prices.

Vasep cited sources as saying that the price of shrimp shipped to the U.S. averaged US$13 per kilo last year, a 15-year high, and the price differentials of shrimp exported by India, Indonesia and Vietnam were insignificant.

However, Vasep said the price of Indian shrimp stateside has gone down to US$11 per kilo since January this year while that of Vietnamese shrimp has remained unchanged.

Chu Van An, deputy general director of Minh Phu Seafood Corporation, Vietnam’s leading shrimp exporter, said shrimp supply is ample in India and some other countries as they have better controlled the early mortality syndrome (EMS) in their shrimp farms, enabling them to cut unprocessed shrimp prices which account for 60-70% of production cost.

“The price of shrimp on the domestic market stays high, making it difficult for local firms to make their products competitive,” An told the Daily.

The domestic price started dropping by VND20,000-30,000 a kilo of white-leg shrimp to VND76,000-80,000 per kilo and VND25,000-50,000 a kilo of tiger prawn to VND145,000-250,000 a kilo depending on types in the first months of this year.

A source said shrimp exporters were unable to cut their prices as they used juvenile shrimp earlier bought at high prices. But Indian exporters can lower their prices as shrimp has entered peak harvest season.

Meanwhile, juvenile shrimp supply on the domestic market is still limited as now is the low shrimp season in Vietnam. The first months of this year saw some 29,900 tons of shrimp harvested in Ca Mau Province, more than 6,980 tons in Bac Lieu Province and around 1,500 tons in Ben Tre Province, according to the Ministry of Agriculture and Rural Development.

In addition to price cuts, Vasep’s general secretary Truong Dinh Hoe called for exporters to improve their shrimp quality given low demand in importing markets.

Tra fish exports to U.S. down

* Vietnam’s tra fish exports to the U.S. market fell sharply in the first months of this year as local enterprises hesitated to boost shipments stateside before the U.S. Department of Commerce (DOC) announces its final anti-dumping duty results of the tenth period of review (POR10), local news site VnExpress reports.

Vietnam shipped US$62.59 million worth of tra fish to the U.S. market in the year to March 15, down 14.4% compared to the same period last year, according to the General Department of Customs.

The U.S. is now the biggest market for Vietnamese tra fish fillets, accounting for 21.9% of Vietnam’s total tra exports.

The average dumping margin for Agifish and 23 voluntary defendants could be US$0.97 a kilo of frozen tra fillets, higher than the US$0.58 a kilo announced by DOC in its preliminary anti-dumping duty results in July last year. Meanwhile, the common dumping margin for Vietnam would be US$2.39 a kilo.

Veggie and fruit exports grow sharply

Revenue from vegetable and fruit exports increased significantly in the first three months of this year though outbound sales of many farm products declined in the period.

According to the Southern Fruit Research Institute (SOFRI), the country obtained total vegetable and fruit export revenue of US$274 million in January-March, up 13% over the same period of 2014. Notably,

exports to Korea jumped 100%, Singapore 300% and Hong Kong 230%.

Veggie and fruit exports maintained good growth, especially in selective markets, said Luong Ngoc Trung Lap, head of the market research department at SOFRI. “This was a positive sign amidst tumbling exports of other agricultural products,” he said.

Data of the Ministry of Agriculture and Rural Development showed the agro-forestry-aquatic exports totaled US$6.13 billion in the first quarter of this year, dropping 13.2% year-on-year.

Of the amount, rice exports accounted for US$440 million, down 32%; coffee shipments for US$734 million, tumbling 37.3%; and rubber for US$279 million, down 6.6%. Cashew, pepper and seafood exports registered respective declines of 14.8%, 3% and 20.6% in the period.

Lap said a majority proportion of Vietnamese vegetables and fruits went to China with an encouraging growth rate despite the recent huge backlogs of some agricultural products at the northern border gates.

Exporters credited the overall export growth of vegetables and fruits to higher demand in certain markets. For instance, the U.S. has allowed imports of more Vietnamese fruits such as longan, litchi, rambutan and dragon fruit.

Statistics of SOFRI indicated fruit and vegetable imports in the first three months of this year plunged 42% year-on-year to US$53.3 million. As such, the local vegetable and fruit sector enjoyed a trade surplus of over US$220 million in the period.

SOFRI forecast a continuing rise in fruit and vegetable exports in the coming time as farmers in the Mekong Delta are ready for their harvests, meaning that local exporters can meet big orders from importers in the coming months.

The Vietnam Fruits and Vegetables Association (Vinafruit) said the country obtained vegetable and fruit export revenue of US$1.47 billion last year, up US$500 million against the previous year. The figure is expected to rise to US$2 billion this year.

Experts: Vietnam less attractive to foreign investors

Vietnam has turned less attractive to foreign investors than other regional countries due to complicated and time-consuming procedures, corruption and poor service quality.

Experts warned of this worrying situation on the second and final day of the Spring Economic Forum 2015 in Nghe An Province yesterday.

Dau Anh Tuan, head of the Legal Department at the Vietnam Chamber of Commerce and Industry (VCCI), said many foreign-invested enterprises (FIEs) have complained about informal costs, legal burdens, lower quality of public services and poor infrastructure.

These issues have made Vietnam’s business environment less appealing than other regional economies, he noted.

The 2014 Provincial Competitiveness Index Rankings (PCI 2014) survey of nearly 1,500 FIEs from 43 countries and territories revealed a large number of enterprises admitted paying bribes to officials in exchange for licenses for their projects and business plans.

Around 17% of respondents said they bribed officials for investment certificates and 31% for winning Government procurement contracts.

Surprisingly, Tuan said, graft cases concerning contract bidding and signing last year increased three times versus 2013.

Asked whether they would fall into a disadvantageous position if they declined to give bribes, 89% of respondents said they would have a hard time.

Bribery in government procurement contracts makes it impossible to pick the best contractor and cut costs, Tuan noted.

Economic expert Le Dang Doanh said corruption has eroded the competitiveness of local enterprises. “Life will be easy for companies if they give bribes while those refusing to bribe officials can go bust.”

According to the PCI 2014 survey, more than 66% of respondents paid informal fees when completing procedures at ports and over 60% agreed that State employees at local levels took advantage of legal compliance to demand money from enterprises.

Tuan said before deciding to select Vietnam, half of the surveyed FIEs said they eyed China (20.5%), Thailand (18%) and Cambodia (13.9%). These percentages were higher than 2013 and an important indicator to evaluate how much they favor Vietnam.

Vietnam seems to be no longer the top destination for foreign investors as seen in the 2007-2010 period. The country now has to compete with China and Thailand and emerging Laos and Philippines in attracting foreign investors.

Atsusuke Kawada, chief representative of the Office of the Japan External Trade Organization (JETRO) in Hanoi, told the forum that Japanese firms are particularly concerned about a lack of transparency in Vietnam’s legal system.

JETRO’s survey of 458 Japanese businesses in Vietnam showed over 60% of them said the incomplete legal system and a lack of transparency are among their top concerns.

The proportion is lower than in Myanmar and Cambodia but higher than in Indonesia and Bangladesh, Kawada said.

Turkish firm’s US$660-million project approved

The Dong Nai Industrial Zone Authority (DIZA) has allowed Turkey’s Hyosung Istanbul Tekstil Ltd. to carry out an industrial fiber project worth US$660 million.

DIZA told the Daily that Hyosung Istanbul Tekstil Ltd. would establish Hyosung Dong Nai Co. Ltd. to produce and outsource spandex, nylon and polyester fibers, steel tire cord, bead and saw wire products, and shade cloth, carpets, electrical engines and parts at Nhon Trach 5 Industrial Park. Most of its output will be exported.

This is the biggest foreign direct investment project by registered capital in Dong Nai Province this year. The province has approved 27 new FDI projects capitalized at over US$790 million and 23 operational projects to add an additional US$170 million.

With the new industrial fiber project and projects approved outside industrial parks in Dong Nai, the province has already beaten the 2015 target for US$900 million to US$1 billion in fresh FDI approvals.

Most of the new projects are active in supporting industries, according to DIZA.

Bo Ngoc Thu, director of the Dong Nai Department of Planning and Investment, said new investment capital is committed to high technology, environmentally friendly, supporting, services and agricultural sectors in line with the provincial government’s expectations.

Thu credited the higher-than-expected FDI pledges this year to the province’s simplifying administrative procedures, particularly in investment, tax and customs sectors. In addition, the province has reaped positive results from its investment promotion trips in the markets where there are potential investors.  

Dong Nai saw FDI disbursements reaching US$2.3 billion last year, a 2.3-fold increase over 2013 and accounting for nearly 19% of the nation’s FDI disbursements in the same year.

Thu said US$2.3 billion was the highest-ever FDI disbursement in Dong Nai Province thanks to more financially capable enterprises investing in projects in the province. Many investors started implementing their projects immediately after they got approval.

So far, some 1,480 FDI projects have been approved in Dong Nai Province with total registered capital of more than US$27 billion. The number of valid projects is 1,127 with over US$22.5 billion.

In mid-2014, the provincial government decided to suspend the approval of projects using out-of-date technology and harmful to the environment like paper and pulp production, cassava starch processing and unprocessed latex, manufacture of basic chemicals and leather tanning.

BIC to sell 35% stake to foreign investors

Shareholders of BIDV Insurance Corporation (BIC) have approved a plan to sell a 35% stake to foreign strategic investors, or 5 percentage points higher than the firm’s initial plan.

BIC plans to issue some 41 million shares, or 35% of its chartered capital, for foreign partners who would be selected from potential investors from South Korea, Europe, North America and Japan, Vietnam News Agency reports.

The foreign ownership of 35% will not affect the benefits of existing shareholders but help BIC enhance its financial capacity and raise revenue and profit, heard BIC’s annual general meeting for shareholders on Tuesday.

Pham Quang Tung, chairman of BIC, said the corporation is considering the price of shares sold to the investors. But to become strategic investors at BIC, partners must be capable of supporting BIC to improve its competitiveness and achieve high growth.              

BIC expects to scale up its chartered capital to over VND1 trillion (US$46.5 million) after its share sale to foreign investors.

The corporation posted premiums revenue of nearly VND314 billion in the first quarter of this year, rising 48.5% year-on-year and meeting 24% of the whole year’s target.  Its consolidated profit amounted to VND44.28 billion in January-March, up 30% against the same period of 2014 and equivalent to 30% of the full-year target.

BIC targets an increase of 17% in premiums revenue this year against last year, at some VND1.3 trillion and consolidated profit of VND147 billion, up 6.5% year-on-year. The firm plans to pay a 2015 dividend of 10% for shareholders.

Economists concerned about internal weaknesses

Though Deputy Minister of Industry and Trade Tran Quoc Khanh boasts the positive impact of free trade agreements on the Vietnamese economy, economic experts worry that internal weaknesses might make it hard for the country to make the most of those deals.

Khanh told the Spring Economic Forum 2015 held by the National Assembly’s (NA) Economic Committee in Nghe An Province yesterday that he believed the second wave of reform has begun.

Khanh said the Government has started economic restructuring and changing the growth model, and that new efforts for the country’s further integration into the world’s economy would support the reform process.

Regarding the ASEAN Economic Community (AEC), Khanh noted the AEC establishment would not lead to abrupt changes in tax, investment and trade liberalization in 2016.

If the Trans-Pacific Partnership (TPP) and the free trade agreement (FTA) between Vietnam and the EU are signed this June, they would not immediately affect the business environment in Vietnam next year as Vietnam and other signatories need to have the pacts ratified by their parliaments, a process that normally takes 12-18 months.

“There are concerns that local enterprises have not been well prepared for the nation’s stronger integration process, but we should not be too worried as these have been addressed in the TPP and the FTA with the EU,” Khanh said.

Regarding supporting industries, though the TPP has not been signed, many investors have picked Vietnam as their manufacturing base, Khanh said.

Khanh said competition is inevitable in Vietnam and that enterprises might go bust if they fail to compete. But he believed they would not lose the game.

However, many economic experts looked less optimistic than Khanh did.  

Expert Vo Dai Luoc said Vietnam has signed eight FTAs and is in negotiations over six, meaning that local companies would be facing fiercer global competition.

Luoc questioned how local firms could compete with foreign rivals when loan interest rates are 9-10% per year in Vietnam but only 2-3% in other countries. The local currency is 20% higher than its actual value, affecting exports.

Tran Dinh Thien, director of the Vietnam Institute of Economics, said exchange rate risk was cutting into the competitiveness of Vietnamese firms.

Thien pointed out another problem that last year Vietnam’s exports to China picked up 18% but imports from the northern neighbor jumped 31% against 2013.

Experts suggest ways to put VN back on high-growth path

Leading scholars and experts, speaking on day one of the Spring Economic Forum 2015 in the central province of Nghe An yesterday, put forth multiple proposals for getting the country back on the high-growth path.

In his presentation at the two-day forum, former Minister of Trade Truong Dinh Tuyen said the private sector should be regarded as the main driver for the economy, so there should be supporting policy for small and medium enterprises, mainly private ones.

Tuyen said the policy of viewing internal forces as a decisive factor and external forces as a crucial factor has not been applied effectively to fuel economic development.

Contributions of the foreign direct investment (FDI) sector to the country’s gross domestic product (GDP) grew from 15.6% in 2005 to nearly 20% in 2013. The sector has had its industrial production value steadily expanding since 2005, reaching 50% in 2013, and contributed 68% of the country’s total export revenues last year.

Those figures, Tuyen said, show that State-owned enterprises (SOEs) had yet to be the driving force for the economy.

Meanwhile, the president of the Central Institute for Economic Management (CIEM), Nguyen Dinh Cung, suggested changing the perception of the socialist-oriented market economy that Vietnam is pursuing.

The socialist-oriented market economy is a modern market economy in which the State and the market are the two interdependent elements, he said.

However, Cung said the number of SOEs in Vietnam is still high, at around 4,000, including those majority owned by the State. SOEs contribute around 30% of GDP but absorb more than 60% of total credits, and their assets account for nearly 45% of the total held by all enterprises in the country.

“Therefore, unlike modern market economies, the State in Vietnam still does business and competes with the private sector to earn profit,” Cung said.

He stressed the importance of reforming the State apparatus and reallocating authority and functions of some organizations.

Besides, it is important to improve the capacities of the Government and local authorities by amending the laws on organization of the Government and local authorities and State budget.

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