Vietnamese plastic firms that import polypropylene as production material can reduce their production costs as the finance ministry has reduced the tax on polypropylene by 2 per cent.

Under a new circular released in late January, which will come into effect on March 6, the new tax rate on polypropylene is 1 per cent, down 2 per cent from 3 per cent, imposed by the finance ministry in the previous circular released in 2013.

Viet Capital Securities Corporation (VCSC) wrote in a report that the lower tax rate would help plastic firms to reduce their expenditure on importing polypropylene from overseas suppliers for production purposes.

These plastic companies include Sai Gon Plastic Packaging JSC (SPP), PP Pack Marking JSC (HPB), Tan Dai Hung Plastic JSC (TPC) and Binh Duong PP Pack Making JSC (HBD), besides Vinh Plastic and Bag JSC (VBC).

Meanwhile, the largest companies in the plastic sector such as Binh Minh Plastic JSC (BMP), Tien Phong Plastic JSC (NTP), Dong A Plastic JSC (DAG) and Vietnam Electric Cable Corporation (CAV), besides Vinh Khanh Cable Plastic Corporation (VKC) and An Phat Plastic and Green Environment JSC (AAA) will not benefit from the circular as they use polyvinyl chloride as the input material for production.

The BIDV Securities Corporation (BSC) wrote in a forecast for this year that local plastic companies might face business problems as some European countries have abandoned the use of plastic bags and are encouraging their people to use degradable bags, while the United States has also extended the anti-dumping tax on Vietnamese plastic bags.

VN customs ranks eighth in world: ADB

Vietnamese customs has been ranked eighth among 160 nations in terms of customs statistics, according to the calculations made by three professionals of the Asian Development Bank (ADB).

The import and export statistics collected by Viet Nam Customs received 0.9 point, equal to the Korean Republic's customs.

In comparison with other countries in the ASEAN, Viet Nam followed Thailand with a 0.91 point in the ranking.

The result showed the quality of customs and commercial management of Viet Nam.

Chile led the ranking with 0.95 point, followed by Japan and Peru with 0.93 point each.

Handicraft industry must compete

Experts urged for an improvement in creativity to increase the value of handicraft products and develop a Vietnamese brand for the industry.

Le Ba Ngoc, general secretary of the Viet Nam Handicraft Exporters Association, said that poor competitiveness rather than the export market was the bottleneck hindering the industry.

Ngoc said that the Vietnamese handicraft industry mainly produced low value products in large quantities for retail giants like Ikea, Wal Mart and Peer 1 Import. Around 90 per cent of Vietnamese handicraft products were produced following ordered designs and exported under brands of the buyers, according to Ngoc.

He said Viet Nam remained struggling in building its strength in the handicraft market.

A representative from a handicraft exporting firm said that poor designs together with less competitive prices were undermining competitiveness. Developing a firm brand in the global market was still a long way off for the local handicraft industry.

Setsuko Okura, a handicraft and gift exporter from Japan, was quoted by enternews.vn as saying that handicraft products of Viet Nam were diversified with great potential for exports.

She said that consumption of Vietnamese handicraft products in Japan remained modest as they were considered inappropriate for Japanese consumers who preferred smartly designed products.

She used Vietnamese handicraft producers to be active in studying consumer tastes of each markets to develop products with competitiveness.

Experts also pointed out that the small-scale production failed to ensure the uniformity of handicraft products, adding that the link between trade villages and exporters must be enhanced.

Vu Cam Tu, director of An Do Ceramics Company, said that the development of a production chain in the handicraft industry was important to create products with originality and creativity matching consumer tastes.

The association estimated that the handicraft exports reached a revenue of US$1.9 billion last year, up from $1.6 billion in 2014.

SBV offers $268 million of T-bonds

The State Bank of Viet Nam (SBV) launched two sets of treasury bills worth VND6 trillion (US$268 million) yesterday.

The T-bills are government bonds issued by the finance ministry with terms of less than one year to assist in financing of the state budget, and are an important tool for the central bank to operate monetary policies.

The SBV said the bidding on the bills were combined with competitive and non-competitive interest rates, with the bills with non-competitive interest rates not exceeding 30 per cent of the total bid volume.

The central bank offered two types of bills in two sessions yesterday.

Accordingly, the first session had bills worth VND3 trillion, with maturities of 26 weeks. Payment must be completed within the day, while the due date is August 23, 2016.

The second session saw the issue of bills worth VND3 trillion with maturities of 39 weeks. Payment must be completed within the day, with November 22, 2016 being the due date.

The treasury under the finance ministry has issued VND20 trillion in T-bills in eight sessions so far this year. It has also offloaded government bonds worth nearly VND21.3 trillion so far this year through the Ha Noi Stock Exchange (HNX), the bond auction organiser.

EU court rules on anti-dumping law

The Court of Justice of the European Union (CJEU) declared partially invalid an anti-dumping regulation on certain leather footwear imports in the EU from China and Viet Nam.

It said the Council of the EU and EU Commission did not comply with certain procedural rules when the regulation was adopted.

On October 5, 2006, the Council of the EU adopted a regulation imposing an anti-dumping duty on certain leather footwear imported from China and Viet Nam into the EU. The rate of the anti-dumping duty was set at 16.5 per cent for footwear manufactured by companies established in China (with the exception of the company Golden Step, whose anti-dumping duty was set at 9.7 per cent) and at 10 per cent for footwear manufactured by companies established in Viet Nam.

In 2010 and 2012, Puma, a German sports goods company, requested from the Principal Customs Office, Nuremberg in Germany repayment of the anti-dumping duty with respect to importation of the same goods, again on the basis that the regulation was invalid. The sum concerned amounted to approximately 5.1 million euros ($5.6 million). When its request was rejected, Puma brought an action before the Finance Court, Munich.

Both national courts had doubts as to the regulation's validity and therefore decided to seek a ruling from the Court of Justice.

CBRE: Real estate price to peak in 2016

The price growth rate of real estate will hit its peak in 2016, according to the Vietnam Market Outlook released recently by CB Richard Ellis Vietnam Co. Ltd. (CBRE) .

Real estate leasing has enjoyed good growth in both value and across segments. Positive impacts such as signed trade agreements and low-labour costs are showing auspicious influences on foreign investment inflow to the country.

However, the CBRE said in order to protect foreign investors’ benefits, Vietnam should improve transparency in project approval and developers should study market demands in order to effectively attract capital.

Confidence among customers has improved remarkably which has been reflected by the surge in the number of new projects and real estate transactions.

While the growth of real estate value is forecasted to reach a pinnacle in 2016 with abundant supplies, customers’ demands are expected to be higher.

Since January, many luxurious projects have been offered to the market by prestigious investors such as Vingroup. However, experts acknowledged rising prices are seen mostly in “golden” locations and in the central areas of Hanoi and Ho Chi Minh City.

Despite an increase in supply, the number of properties sold in 2016 in all segments is expected to be lower than 2015, and the trend is likely to continue in following years.

But, the rising demand for home ownership in Vietnam from overseas Vietnamese and foreign investors is expected to create some momentum.

The Housing Law 2015 has opened opportunities for foreign investors to buy houses in the country, but the number of property sold so far is modest.

Experts say professionalism, language proficiency and convenience in payment are concerning factors in attracting customers.-

President presents Vietnamese High-Quality Goods awards

President Truong Tan Sang joined other officials in presenting the Vietnamese High-Quality Goods awards 2016 to 500 firms nationwide at a ceremony held in Ho Chi Minh City on February 23.

Of the 500 firms, 41 of them are first-time winners and 42 have received annual recognition for 20 consecutive years, and 356 firms that have won for three consecutive years.

The winners were selected from a list of 678 companies based on surveys of nearly 20,000 households, individuals and retailers at trade promotion programmes in 12 key provinces and cities around the country, held by the Business Association of High Quality Vietnamese Products.

They had to meet criteria related to product quality and origin, and comply with regulations on consumers and workers' rights, environmental protection and corporate social responsibility.

Most of the winners make sauces, spices, confectionery, non-alcoholic beverages, construction materials, electrical and household machines and dried foodstuff and instant food.

Over the past 20 years, 45 provinces and cities have their businesses presented with the Vietnamese High-quality Goods awards.

The awards presentation ceremony also marked the 20th anniversary of the Business Association of High Quality Vietnamese Products.

Prospects for Vietnam-Russia cooperation in shipbuilding

Russia and Vietnam have great potential in further developing the ship-building industry together, said Maxim N. Kochetkov, Director for the Shipbuilding Industry and Marine Facilities Department under the Russian Ministry of Industry and Trade.

In an interview with Vietnam News Agency correspondents in Moscow, Maxim Kochetkov confirmed that the two countries have coordinated in this field for years.

The Klylov State Research Centre and the Shipbuilding and Ship Repair Technology Centre of Russia are considering the possibility of implementing Vietnam’s proposals to help the country’s shipbuilding technology meet international standards.

The two centres are also considering working together in building a deep-sea fleet in Vietnam, and collecting necessary information about Russia’s fishing vessel building projects in order to satisfy Vietnam’s proposals, he said.

He stressed the need to define the kinds of ship that would have an advantage in Vietnam, as well as learning about the country’s infrastructure facilities to serve the building of these ships.

Russia is willing to consider financial plans to carry out joint projects with Vietnam, he stated, adding that Russia’s universities are also willing to help Vietnam train students on shipbuilding, while the Shipbuilding and Ship Repair Technology Centre is to consider the provision of hi-tech equipment for the country.

Efforts to boost exports, reduce trade deficit

The Ministry of Trade and Industry (MoIT) has undertaken numerous measures to boost exports and reduce imports, helping decrease the trade deficit.

The sector’s 2016 goals are to increase export value by 10 percent and keep the trade deficit at no more than five percent of the total import-export value.

To realise the targets, the ministry has actively worked with relevant ministries and sectors to remove difficulties for exporters and expand markets.

The sector also plans to improve goods quality and establish brand names for agricultural products for export.

In January, Vietnam saw a trade surplus of 765 million USD, with exports achieving 13.4 billion USD and imports 12.6 million USD.-

Khanh Hoa focuses on infrastructure development

The central province of Khanh Hoa has increased infrastructural construction in order to boost investment to the locality.

Accordingly, the Management Board of Van Phong Economic Zone in the province announced on February 23 a bidding plan of 20 packages worth nearly one trillion VND (45.4 million USD) for a major transport project, linking National Highway No.1 to Dam Mon, Van Ninh district.

The project is significant to complete infrastructure for the northern part of the zone, designed to create favorable conditions for investment attraction.

The 14km long road will be funded by the State’s budget and is expected to be completed by 2020.

Along with the project, the provincial People’s Council has also approved a road construction plan at the Van Phong international port with an investment of over 292 billion USD (13.3 million USD).

The government has applied several incentive policies for investors operating in the zone, but poor infrastructure has hindered investment progress.

Founded in 2006, the Van Phong Economic Zone covers an area of 150,000 ha. The zone is home to 136 investment projects with a total registered capital of 1.49 billion USD, of which only 623 million USD has so far been disbursed.

Demand for industrial real estate on the rise

Demand for industrial real estate is growing on the back of Vietnam’s entry to international and regional trade agreements, according to the CBRE Vietnam Market Outlook released on February 22.

Ready-built-factory rents in Ho Chi Minh City continue to hike thanks to rising demand from retailers and fast moving consumer goods companies. However, there was no new supply recorded in 2015, mostly due to limited space and stricter project approval from the local administration.

In the southern province of Binh Duong, authorities actively sought for investors to fill excess supply of industrial space. Vacancy rate in this province is expected to fluctuate around 30 percent over the next three years.

Infrastructure improvement is a key supply driver in Dong Nai, with two major projects, including the recently-completed Long Thanh – Dau Giay highway and the upcoming Long Thanh international airport, which will be finished in 2020. As a result, rents will be stable for the next three years as landlords offer competitive prices to improve occupancy rates.

On the other hand, despite its low labour costs and proximity to Ho Chi Minh City, Long An is failing to attract investors because of its unfinished infrastructure and high rents and thus its vacancy rate will remain high at around 60 percent for the next few years.

According to the CBRE experts, the industrial real estate market is expected to be busy, as more multinational corporations expand their operations in Vietnam to tap the Trans-Pacific Partnership and other trade benefits, as well as the emergence of e-commerce.

Report shows way for Vietnam to achieve upper-middle income status

A report was released in Hanoi on February 23, laying out a path for the country to reach upper-middle income status by 2035.

The report “Vietnam 2035: Toward Prosperity, Creativity, Equity and Democracy” was jointly prepared by the World Bank (WB) and the Vietnamese Government.

At the launch ceremony, Minister of Planning and Investment Bui Quang Vinh said the report comprises of seven chapters that deal in-depth with three development pillars and make recommendations for turning Vietnam into an upper-middle income country by 2035.

Accordingly, the Southeast Asian nation must have a high and continuously stable growth rate in the next two decades, with an annual GDP growth of 7 percent (equal to around 8 percent annual growth), reaching 15,000 – 18,000 USD per capita by 2035.

The report focuses on three areas: improving productivity and private-sector competitiveness, promoting equity and social inclusion, and improving public sector effectiveness.

It proposes strengthening the economy and the financial sector, focusing on more effective regulation, protection of property rights and enforcement of competition policies.

It also recommends Vietnam consider new policies and investments supporting the growth of industries linked to global supply chains, along with smarter use of international trade agreements like the Trans-Pacific Partnership.

Improvements to the agriculture sector – which employs nearly half of the nation’s workforce – as well as stronger environmental protections and better planning for clean energy generation are recommended.

The report also calls upon Vietnam to continue fostering equality and social inclusion by providing greater access to opportunities for minorities, people with disabilities and women, and delivering public services that provide to an aging, urbanised and middle-class society .

The report recommends governance improvements to help boost accountability and transparency, and ensure Vietnam has strong institutions to keep pace with the country’s rapid development. Another recommendation calls for Vietnam to strengthen state accountability by ensuring checks and balances between the three branches of government and creating opportunities for citizen feedback on public service delivery.

At the ceremony, Deputy Prime Minister Vu Duc Dam highlighted achievements during the Doi moi (Reform) process launched in 1986, noting that aspirations for a bright future with an affluent economy, sustainable environment and a free, prosperous and happy life for all people requires more effort from Vietnam.

He said “Vietnam 2035” is an important report on a Vietnam in the next 20 years. The Vietnamese Government will refer to its suggestions while making policies, including the socio-economic development plan for 2016 – 2020 and the socio-economic development strategy for 2020 – 2030.

Meanwhile, World Bank Group President Jim Yong Kim considered the report as important to both Vietnam and the World Bank, adding that their cooperation in preparing the report illustrated the World Bank’s commitment to helping with Vietnam’s development.

Vietnam has a strong aspiration, which is to become a modern industrialised country towards prosperity, creativity, equality and democracy. That aspiration can be realised through institutional reforms and support policies based on the three pillars: economic prosperity with environmental sustainability, equity and social inclusion, and a capable and accountable state, he noted.

Apartment buildings to be classified into three categories

In the coming time, apartment buildings put into use from July 1, 2015, would be classified into categories A, B and C.

Such is highlighted in a circular drafted by the Ministry of Construction (MOC) which will serve as a basis for determination of values of condominiums and application of rates of condominium management services.

Under the draft, apartment buildings might be ranked by scoring based on four groups of criteria, including planning and architecture, technical and social infrastructure, quality of apartments, and quality of condominium management services.

High-grade apartment buildings with a score of 90-100 points, condominiums scored from 80 points to below 90 points, and apartment buildings that score below 80 points, would be classified into categories A, B and C, respectively.

The MOC would decide on recognition of category-A condominiums being grade-1 works in Hanoi and Ho Chi Minh City, while Construction Departments of other provinces and cities would do so for other apartment buildings. The recognition would be reviewed every five years.

The draft has received divergent opinions from real estate businesses.

Tran Duc Phuong, Director General of Nam Tien Real Estate Company, said the classification of apartment buildings was necessary as it would help prevent investors from exaggerating the quality of their projects.

Nguyen Xuan Quang, Chairman of the Management Board of Nam Long Real Estate Company, said the criteria for classification of apartment buildings were in line with international practices and would contribute to make the real estate market healthy.

Quang suggested the issuance of a set of criteria and formation of independent organizations to verify such criteria so as to prevent negative practices during the classification of apartment buildings.

Nguyen Tien Dung, Director General of Saigon Vista Corporation, proposed regulations requiring project owners to announce the ranks of apartment buildings before offering them for sale so that customers could make proper decisions.

Meanwhile, other businesses said that the classification is unnecessary. They supported the option of setting sale prices and management service charges of condominiums as agreed by project owners and customers. Some expressed their worry that such classification would create “sub-licenses” and more cumbersome administrative procedures during investment in apartment buildings.

According to the MOC, the draft would be considered for issuance at the beginning of the second quarter of this year.-

No more governmental guarantee for groups with financial difficulties

The Prime Minister has recently nodded the Finance Ministry’s proposal to stop granting the governmental guarantee to groups or corporations that have financial difficulties, owe debts to the Accumulative Fund or are having their foreign loans on-lent by the Government or government-guaranteed loans settled.

Under the proposal, the required debt-to-equity ratio would be maintained when the grant of the governmental guarantee is considered, mainly for domestic loans for urgent projects of which some of foreign loans are guaranteed by the Government; and governmental guarantee for individual projects borrowing domestic loans will be gradually reduced.

The proposal aims to restrict the application of special mechanisms when the grant of governmental guarantee is considered for projects, especially the approval of a project’s equity-to-total investment ratio of under 20 percent.

In particular, any governmental guarantee exceeding USD 500 million per project will not be granted in the 2016-2020 period to one project owner implementing many projects in a planning year.

The Prime Minister has assigned the Finance Ministry to revise or formulate decrees to replace Government Decree No. 15/2011/ND-CP dated February 16, 2011, on the grant and management of governmental guarantee, and Decree No. 01/2011/ND-CP dated January 5, 2011, on the issuance of government bonds, government-guaranteed bonds and municipal bonds, to meet practical requirements.

The Finance Ministry will guide and review three-year (medium-term) investment programs and annually adjusted plans registered by investors that wish to borrow government-guaranteed loans in order to elaborate and report guarantee limits to the Prime Minister.

The Prime Minister assigns ministries and agencies to direct and adopt policies to prioritize or encourage the implementation of construction investment projects, particularly those in infrastructure development in the PPP and BOT forms, in order to attract non-state investment and reduce the pressure of government-guaranteed capital mobilization.

Gov't must give rice exporters necessary market information

Vietnamese rice exporters are in dire need of market information, especially about new markets, and Government agencies, including Vietnamese trade counsellors abroad, should focus more on providing them such information, a seminar heard in HCM City on Monday.

Nguyen Xuan Hong, deputy director of the Long An Department of Industry and Trade, said his province and its rice exporters need information related to export markets.

China had large demand for rice, but its policies change frequently, and businesses needed information about its rice import regulations, quotas, rice inventory policies and others, he said. Changes in these regulations directly affected export prices, he said.

"Therefore, businesses need timely information to help them avoid blunders when signing contracts."

Similarly, Africa too offers a promising market and also poses risks to Vietnamese exporters, with many getting cheated", he said, adding this was due to the lack of information about the market and business partners.

Nguyen Trung Kien, chairman of Gentraco Corporation, one of the country's leading rice exporters, said Vietnamese trade counsellors in Latin America should provide information about rice quality management, hygiene and food safety, plant quarantine, and origin traceability there.

They should also provide information about the main competitors there, and help Vietnamese firms tie up with key distributors, he said.

According to the Ministry of Industry and Trade, rice exports this year are expected to run into difficulties due to fierce competition from other major exporting countries like Thailand, India, and Pakistan and potential exporters like Cambodia and Myanmar.

Asian countries are the main buyers, accounting for 74.5 per cent of Vietnamese exports, followed by Africa (13.7 per cent), and the US (6.7 per cent), it said.

China is the biggest importer, accounting for more than 50 per cent of the country's exports, if border trade is included.

Bui Huy Hoang, Viet Nam's trade counsellor in China, said China's rice imports have risen sharply in recent years, and are expected to continue to increase.

Vietnamese may be the biggest exporter to the market, "But in supermarkets in China, we do not see any rice from Viet Nam or Vietnamese brands.

"Businesses should quickly build a Vietnamese rice brand in the market, otherwise Cambodia will overtake us."

To minimise the risks involved in rice exports, Deputy Minister of Industry and Trade Tran Tuan Anh instructed Vietnamese trade counsellors abroad, the Viet Nam Trade Promotion Agency and other relevant agencies to provide businesses with latest market information.

They have also been told to recommend measures to improve the efficiency and value addition of rice exports based on the competitive advantages Vietnamese rice enjoys.

He ordered agencies under his ministry to co-operate with the association to map out trade promotion strategies in traditional and potential export markets.

The association needs to speed up strategies to develop Vietnamese rice brands, he said.

Huynh Minh Hue, general secretary of the Viet Nam Food Association, said besides traditional markets, companies should also promote rice exports to new markets, especially those that have free trade agreements with Viet Nam to avoid the overwhelming reliance on China.

Viet Nam has opportunities to boost exports to the US, Mexico, Chile, the EU, Australia, and Oceania, but to do so, besides ensuring the quality meets consumers' demands and offering competitive prices, firms also need to strengthen marketing and promotion, according to Hue.

Viet Nam exported over 416,770 tonnes of rice for more than US$169.2 million in January month, up 71 per cent in value year-on-year.

Seafood exports to rise on TPP

Economists forecast that seafood exports from Viet Nam to the United States (US), Japan and other members in the Trans-Pacific Partnership Agreement (TPP) block will rise after February 4, 2016.

February 4 is the date on which the agreement was officially signed.

Currently, the US and Japan are the two largest importers for Viet Nam in term of shrimp and tuna, with a total value of nearly US$1 billion last year. It is predicted that export value to the two markets will reach 15 per cent in 2016.

Ngo Van Ich, president of the Vietnam Association of Seafood Exporters and Producers (VASEP) said that in 2015, the seafood exporters faced with many difficulties and challenges. Total exports reached only $6.7 billion, dropping nearly 15 per cent compared to 2014. This decline was a warning for the association to look back and work together to build a comprehensive strategy.

Ich added that this year, the free trade agreements with the European Union (EU) will officially take effect and the signing of the TPP agreement will facilitate Viet Nam into boosting seafood exports to these markets.

Truong Dinh Hoe, VASEP general secretary, is optimistic that when Viet Nam has not so far joined any the free trade agreements, seafood exporters have already met the rigorous standards of importers. For example, for shrimp exports to the US, exporters must follow Best Aquaculture Practices standards (BAP), Aquaculture Stewardship Council Standards (ASC) and the Marine Stewardship Council's Chain of Custody (CoC) Standard.

Therefore, when TPP was officially signed, Vietnamese seafood exporters were ready to meet the standards set by importers. More so, when the export rate is slashed to 0 per cent, it will create incentives for seafood businesses to further invest in farming and processing, thus bringing them higher economic value.

According to Nguyen Phuoc Buu Huy, deputy general director of Cadovimex II Export Processing and Fisheries JSC, said his company had invested in an export and processing line equipped with BAP standards. His company also invited experts from the US Department of Agriculture (USDA), and the Food and Drug Administration (FDA) to evaluate ponds, breed, feed and processing plants. By doing so, Huy strongly believes that his company is ready to meet the strict requirements of clients from the US, Japan and other markets.

Duong Ngoc Minh, chairman of VASEP Freshwater Fish Committee and Le Van Quang, Chairman of VASEP Shrimp Committee said that the Ministry of Agriculture and Rural Development needed to closely improve development and the support policies to meet with requirements of the global market.

Nguyen Phuoc Buu Huy said that exporters must find more markets instead of exporting their products to only one market to avoid risks in business such as technical barriers and strict hygiene regulations from importers. This solution will also help businesses become more flexible in processing and help farmers to consume their products.

Truong Dinh Hoe emphasised that once the TPP agreement comes into effect, Vietnamese exporters will strengthen their position on par with importers in the TPP block. As a result, they do not need to make concessions as before. In case of a dispute, Vietnamese exporters can also take advantage of the TPP agreement as it is now an official member. All members must comply with the rules under the agreement.

Duong Ngoc Minh, chairman of VASEP Freshwater Fish Committee, said that investment in export and processing technology to meet the local demand was one of the important parts of the TPP agreement. Once domestic products attained high quality, local consumers would choose their products and imported products from member countries would not find it easy to compete with local products on their home turf.

Minister of Agriculture and Rural Development Cao Duc Phat said that the ministry would continue to work closely with seafood exporters to handle difficulties and challenges facing them after joining the free trade and TPP agreements.

Vietcombank aims to boost charter capital

The Joint Stock Commercial Bank for Foreign Trade of Viet Nam (Vietcombank) expects to increase its charter capital this year to become more competitive and prepare for Basel II implementation.

The Ha Noi-based bank said it would submit a plan to increase its capital at its shareholders' meeting for approval due on April 15 this year. However, the bank did not reveal the details of the plan.

The bank will also present its performance results in 2015 as well as plans for 2016 to its shareholders.

Vietcombank currently has charter capital of VND26.650 trillion (US$1.21 billion). Its last capital increase was in the third quarter of 2014.

The bank, with total assets worth VND673.910 trillion as of the end of last year, reported pre-tax profit of more than VND6.6 trillion last year.

It aims to increase its total assets by 13.5 per cent to reach VND765 trillion this year.

To prepare for the capital increase plan, Vietcombank has signed a contract with Credit Suisse and the Viet Nam International Law Firm (VILAF) for a new equity issue, under which Credit Suisse will act as the finance consultant for the bank, while VILAF will be responsible for the legal aspects.

Vietcombank General Director Pham Quang Dung said the equity issue would help the bank increase capital, keep pace with the strong economic growth and maintain its leading position in the banking system.

The equity issue also aims to help the bank prepare for the implementation of Basel II, which is a new and higher level for Vietnamese banks in accordance with Basel Accords standards set by the Basel Committee on Banking Supervision, this year.

Vietcombank is among 10 banks that have been chosen by the State Bank of Viet Nam (SBV) to apply Basel II governance standards.

However, to implement the standards, many banks such as Vietcombank must increase their capital as their capital adequacy ratio (CAR) would fall. Banks that have CAR of about 9 per cent will have to increase their capital to meet the Basel II standards.

Vietnam to reach upper-middle-income status in 20 years

A new report recommending steps to help lift Vietnam to upper-middle-income status in two decades suggests the country build a more competitive private sector, support smart urbanization, promote innovation, and take advantage of increasing trade opportunities to enact broad structural reforms.

The Vietnam 2035 report, prepared jointly by the Government of Vietnam and the World Bank Group, lays out key reforms for the lower-middle income country to grow its economy, become more equitable, and put in place modern governance over the next 20 years.

Reaching the ambitious goal of upper-middle-income status would require Vietnam to grow at least 7% per year, raising the average income level to over US$7,000 – or US$18,000 in purchasing-power parity terms – by 2035, compared with US$2,052 – or US$5,370 in PPP terms– in 2014.

“In the last 30 years, Vietnam has become one of the world’s great development success stories, rising from the ranks of the poorest countries. On the strength of a nearly 7% average growth rate and targeted government policies, tens of millions of people have lifted themselves out of extreme poverty,” said World Bank Group President Jim Yong Kim.

Kim said that the Vietnam 2035 report, with inputs from international and Vietnamese experts, reflects Vietnam’s aspirations of becoming a modern, industrialized nation within a generation.

“Improvements in productivity, environmental protection and economic innovation can help Vietnam maintain high levels of growth. It will be critically important to remove barriers that exclude marginalized groups and deliver quality public services to an aging and urbanizing middle-class,” Kim said.

“The report recommends that Vietnam build modern and more transparent institutions – those steps will help the country meet its ambitious goals,” Kim added.

Handicraft industry must compete

Experts urged for an improvement in creativity to increase the value of handicraft products and develop a Vietnamese brand for the industry.

Le Ba Ngoc, general secretary of the Vietnam Handicraft Exporters Association, said that poor competitiveness rather than the export market was the bottleneck hindering the industry.

Ngoc said that the Vietnamese handicraft industry mainly produced low value products in large quantities for retail giants like Ikea, Wal Mart and Peer 1 Import. Around 90% of Vietnamese handicraft products were produced following ordered designs and exported under brands of the buyers, according to Ngoc.

He said Vietnam remained struggling in building its strength in the handicraft market.

A representative from a handicraft exporting firm said that poor designs together with less competitive prices were undermining competitiveness. Developing a firm brand in the global market was still a long way off for the local handicraft industry.

Setsuko Okura, a handicraft and gift exporter from Japan, was quoted by enternews.vn as saying that handicraft products of Viet Nam were diversified with great potential for exports.

She said that consumption of Vietnamese handicraft products in Japan remained modest as they were considered inappropriate for Japanese consumers who preferred smartly designed products.

She used Vietnamese handicraft producers to be active in studying consumer tastes of each markets to develop products with competitiveness.

Experts also pointed out that the small-scale production failed to ensure the uniformity of handicraft products, adding that the link between trade villages and exporters must be enhanced.

Vu Cam Tu, director of An Do Ceramics Company, said that the development of a production chain in the handicraft industry was important to create products with originality and creativity matching consumer tastes.

The association estimated that the handicraft exports reached a revenue of US$1.9 billion last year, up from US$1.6 billion in 2014.

Japanese retailer to build second mall in Hanoi

Japanese retail giant Aeon on February 22 unveiled plans to start construction of a US$200 million shopping mall in Hanoi at the Nam Thang Long Industrial Park in the near future.

“This will be Aeon’s second mall in the capital city and comes on the heels of the opening of its first mall in the Long Bien District last November,” said Shigeru Furuki, general director of the AEON mall in Long Bien in making the announcement.

“Similar to the first Aeon, the second mall will be a mix of Aeon’s home brands and middle-class to high-end clothing and retail brands, entertainment, and food and beverages outlets.”

Furuki said plans are for the facility to open in early 2019 and also pointed to its rapid expansion plans to construct a total of 20 stores throughout the Southeast Asian nation over the next few years.

Vietnamese firms capitalise on foreign investments

Numerous Vietnamese enterprises’ efforts to expand operations to foreign markets have brought considerable success.

According to the Foreign Investment Agency’s statistics, as of December 20, 2015, Vietnamese enterprises had invested approximately US$20.4 billion in 1,214 projects in the fields of natural mineral exploitation, agriculture, and telecommunications in foreign markets, primarily focusing on Laos, Cambodia, Africa, and the Americas, including US$15.3 billion in 1,049 newly-registered projects and US$5.1 billion in additional capital to 165 existing projects.

In 2015 alone, Vietnamese enterprises poured US$774.8 million in foreign markets, US$476.4 million of which was in 118 newly-registered projects and US$297.4 million in additional capital to 70 existing projects.

Notably, Viettel Group is currently present in 10 countries in Asia, Africa, and the Americas, servicing 13 million subscribers on a market with a combined population of 175 million. According to Viettel’s financial report, the company’s 2015 revenues from foreign markets reached US$1.5 billion, signifying a 25 per cent increase on-year. Looking to further capitalise on its overseas success, Viettel plans to increase its presence to 20 countries by 2020.

Information technology firm FPT Corporation (FPT), one of the first Vietnamese technology enterprises to take its business abroad, has made numerous successful overseas investment projects. According to its financial report, FPT acquired US$221 million in revenues and US$31 million in pre-tax profit from its foreign markets in 2015, an increase amounting to 41 per cent and 17% on-year, respectively. In 2016, the group will focus on implementing its globalisation strategy with a targeted average increase in revenue of 40% annually.

Vietnam Dairy Products Joint Stock Company (Vinamilk) has earned well from its foreign investment endeavours and its thriving exports. In 2015, the company’s revenue from foreign markets increased by 39 per cent to US$358.2 million, adding 20% to the total Vinamilk revenue in 2015.

Another milk producer Nghe An Tate & Lyle Sugarcane and Sugar Limited Company, a subsidiary of TH Milk Food Joint Stock Company of Vietnam (TH Group), was licensed to construct the first phase of its hi-tech concentrated dairy, cattle breeding, and fresh milk production project worth US$500 million in Moscow, Russia.

The first phase forms a part of a US$2.7 billion hi-tech concentrated dairy and fresh milk production project, which is going to be Vietnam’s largest agricultural and food processing project in Russia.

Covering an area of 140,000 hectares, the US$2.7 billion project will be developed in three phases from 2016 to 2025. Construction of the first phase is expected to be kicked off in April 2016.

Four key product groups gain over US$1 billion export value

Four product groups had earned an export revenue of more than US$1 billion each by February 15, according to latest statistics from the General Department of Vietnam Customs.

Top the list were telephones and accessories (US$3.03 billion), trailed by garment (US$2.599 billion), computers, electronics and components (US$1.632 billion) and footwear (US$1.454 billion).

Meanwhile, the export of machines, equipment and tools reached only US$896.7 million, lower than same period last year’s figure of US$1.002 billion.

It’s noteworthy that the total export value of these 4 key export groups also dipped US$1.642 billion against the same period last year.

The Vietnam Customs also reported that by February 15, the country’s total export revenue hit only US$17.032 billion, down US$3.746 billion against the same period last year.

Locally-invested TH Group, which owns the TH true MILK brand, yesterday hit three prestigious awards at the Gulfood 2016, an international food fair in Dubai.

The awards include Gulfood Outstanding Achievement, Best Health Education Initiative, and Best New Frozen or Chilled Product.

These awards are top ones, among 21 award categories, at the fair. TH is Vietnam’s first enterprise to reap them.

The Gulfood Outstanding Achievement Award is for the group’s chairwoman Thai Huong who has laid groundwork for Vietnam’s fresh milk industry. Since the participation of TH in Vietnam’s milk market in 2009, the country’s fresh market soared from 5 per cent in 2009 to 30 per cent in 2015.

Last year, Huong flew to a climax of power while she was named by US’ Forbes magazine as one of Asia’s most powerful businesswomen.

Currently, Huong is asking the government to change regulations on labelling liquid milk into a more transparent manner in terms of input materials. This is for consumers to be able to enjoy veritable fresh milk.

Huong has also ordered the making of high-quality fresh milk suitable to Muslim nations. TH Group has had 42 products that have been granted a Halal certificate in line with Islamic guidelines, for Muslim consumption.

Meanwhile, the Best Health Education Initiative Award is for praising TH’s TH true MILK School Milk product, which has been tested over more than 3,600 pupils and certified by Vietnam’s Ministry of Health for being able to improve kids’ health and malnutrition. Last May, this product also won ASEAN Best Food Award.

TH Group is also the leader in implementing Vietnam’s School Milk Programme, which is aimed to improve kids’ health and mentality.

Best New Frozen or Chilled Product is for the group’s TH true Yogurt Green Tea Matcha product. This product is said by the fair’s organising board to be more competitive than the world’s biggest yogurt brand name Yoplait, because it meets all strictest conditions in production, quality, and food safety.

Last September, TH also won seven international awards at the WorldFood Moscow 2015 in Moscow’s Expocentre Fairgrounds, because the products are produced from fresh milk and fresh herb materials in an integrated production chain.

Gulfood Dubai is the world’s annual biggest fair for farm produce, foodstuffs and beverage. This year it has been taking place in February 21-25, participated in by 4,800 enterprises and 90,000 visitors from 170 nations.

Some 24 Vietnamese big enterprises also join this fair, which is also participated in by 237 milk firms including famous brand names like TH true MILK, Fontera, FriestlandCampina, Nestle, Organic Valley, and Frischli Milchwerke.

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