Reform needed for EU trade deal

Viet Nam must improve the bidding legal framework to ensure consistence with commitments to the EU – Viet Nam Free Trade Agreement in government procurement, a conference heard.

The Wednesday conference was held by the Viet Nam Chamber of Commerce and Industry (VCCI) to seek contributing ideas in its report to raise recommendations after reviewing the Law on Bidding with regard to EVFTA's commitments on government procurement.

According to the WTO Centre, the EVFTA, which concluded negotiations on December 2, was expected to promote institutional reforms in Viet Nam, including improving the legal framework about government procurement.

Government procurement was stipulated in Viet Nam's bidding legal system, but as of the end of 2015, Viet Nam had not been tied in any international commitments (in effect) which regulated government procurement.

"Reviewing the law on bidding to make it consistent with commitments to EVFTA is essential before the trade deal comes into effect," Nguyen Thi Thu Trang, director of WTO Centre, said.

However, as of Tuesday, the full-text of EVFTA' chapter about government procurement had not been published.

There existed differences between EVFTA's commitments and the Law on Bidding 2014 which came into effect on July 1, 2014. Trang estimated that the non-compliant clauses accounted for two thirds of the commitments to the trade deal about government procurement.

Ngo Minh Hai, vice president of the Club of State-owned enterprises, said that there were gaps in the bidding regulations, which might cause loss, waste and corruption.

Hai said that amendments were needed to prevent conflicts of interests, ensure transparency and a fair playground for businesses.

Experts at the conference agreed that it was a priority now that Viet Nam bidding regulations complied with commitments to the trade deal, from which the country would have to find ways to expand export markets for businesses through government procurements.

Delta works to meet Tet food demand

Producers of speciality foods in the Cuu Long (Mekong) Delta are increasing output to meet the burgeoning demand for Tet (Lunar New Year), which falls on February 8 this year.

Nguyen Truong Chinh, chairman of the Tra Vinh Speciality Products Association, said the province is famous for many highly popular Tet specialities like Tra Cuon tet cake (cylinder-shaped glutinous rice cake filled with green bean paste and pork), Vinh Kim dried shrimp, and salted turnip. So producers are busy, he said.

Nguyen Thi Diem Phuc who makes Tra Cuon tet cake in Cau Ngang District's Kim Hoa Commune said many customers have ordered for Tet.

She now makes more than 8,000 cakes a day, 20 times the normal output. The cakes are sold at VND40,000–70,000 (US$1.8 –3.1) each.

Most families in the south, especially in the delta, eat tet cakes during Tet.

Rice paper is also highly in demand during Tet since it is used to make fried as well as fresh spring rolls.

Many traders in the delta have ordered for rice paper from Cu Lao May village in Vinh Long Province's Tra On District.

Nguyen Thi Le Hang, owner of Le Hang rice paper in Cu Lao May, said: "Tet is the time when people in the village get many orders."

Daily her family produces 800-900 pieces of rice paper for making spring rolls and 600 coconut milk crackers a day, double the normal production, she said. "We make rice paper manually."

The village has more than 70 households who have been making rice paper and coconut milk crackers for nearly a century now.

In Soc Trang Province, producers of banh pia (a kind of moon cake) and Chinese-style dried pork sausages are scrambling to meet Tet orders.

Quang Tan Enterprise in Chau Thanh District's An Hiep Commune, which has been making the two products for 65 years, said besides selling domestically, it also exports to other countries.

This year it has also made new kinds of sausages from Chinese-style fresh pork and dried shrimp. Delta villages that produce speciality foods now also work at night to meet the massive Tet orders.

In Dong Thap Province's Lai Vung District, many households are increasing their production of Lai Vung fermented pork rolls to meet orders.

La Ngoc Thang, owner of a production establishment called Nem Ut Tham in the district's Long Hau Commune, said, "My village is entering the peak period of making fermented pork rolls for Tet. Sales of Lai Vung fermented pork rolls now are three or four times that of normal days."

Duong Minh The, head of the Lai Vung District Infrastructure Economy Bureau, said, "We require food producers to ensure food safety and quality and not increase prices."

The fermented pork rolls cost VND25,000 ($1.1) for 10.

Tet shoppers hit local markets on a budget

Wholesale markets and shops in HCM City offering a range of quality local products as the shopping season begins in earnest ahead of Tet, the Lunar New Year.

At Ben Thanh and Tan Binh, two of the city's famous markets, customers can buy products that have high-end styles at reasonable prices.

"My shops offer Vietnamese products at only VND50,000-150,000 (US$2.2-7)," said Nguyen Thi Tham, a shopkeeper at Tan Binh District's Tan Binh market.

Her shop offers accessories and clothing made by small factories in the district and nearby District 5.

Tham said that most shops in Tan Binh market were selling local goods instead of Thai and Chinese goods this year.

"My young customers don't care about where the products come from. They only care about price and quality," she said.

Her shop's clothing sells for only VND150,000 for a dress, VND90,000 ($4) for jeans, and VND50,000 for two T-shirts.

Another shop-owner , Ms Ba, who ran a garment shop on Pham Van Hai Street in Tan Binh District, said her customers preferred Vietnamese designs because they were trendy and the prices were reasonable.

Her mini and long skirts, made by private garment factories in Binh Chanh and Go Vap districts, cost only VND90,000 each and quickly fly off the shelves.

"Two weeks before Tet, my shop's income has tripled compared with previous months," she said.

Her clothing for men under domestic brands like Viet Tien and Thang Loi have also sold well.

In Ben Thanh market, shoes and ao dai (traditional long dress) of locally made fabrics like silk and chiffon are favourite products of both foreign and local visitors.

Clothing made by young designers such as Ngoc Han and Anh Thu are hoping to capitalise on the festive season and are forking out money on advertising to grab the attention of consumers.

Their collections are offered at a discount of 40 per cent, around VND1.5 million ($70) per item after discount, at malls such as Vietnam Designer House and Now Zone, which are attracting more Vietnamese and foreign customers.

Famous designer Nguyen Cong Tri's products under the brand Kin Concept are selling at discounts of up to 80 percent, starting at only VND300,000 ($13)..

Kelly Bui clothes, however, are pricey, starting at over $200 for a dress, but young women with deep pockets are thrilled that sophisticated designs can now be found in Viet Nam.

Dozens of ready-to-wear brand names owned by local fashion houses such as Ivy Moda, Elise and Eva de Eva have expanded their business.

Their products cost as little as VND800,000 ($30) for a skirt and VND2.2 million ($100) for trousers or a coat, while still providing a taste of global fashion trends.

Nguyen Thi Thu Hang, a salesperson at Elise, said: "We opened our shop in Tan Binh District last year and business is looking quite good,"

The shop has a special 30 per cent discount, which began last week and ends on February 5.

The shop has succeeded in part by encouraging young people, particularly women, to wear Vietnamese-made products.

Industrial production index surges nearly 6% in January

Vietnam’s index of industrial production (IIP) in January posted a 5.9% increase year-on-year, according to the General Statistics Office (GSO) under the Ministry of Planning and Investment.

During the month, production of automobiles, steel, animal feed and powdered milk expanded, ranging from 15.7% to 39.9%. Other sectors also achieved high growth in production including beverages, garments and electricity, which enjoyed a surge from 12 to 15.9%.

In stark contrast, tobacco, coal and lignite, electronic products, computers, optical products, crude oil and natural gas faced reduced production, contracting from 1.2 to 6.2%.

The office reported that many provinces and cities showed a substantial surge in industrial production during the month, including Thai Nguyen, Hai Phong, Hanoi, Da Nang, Ho Chi Minh City, Dong Nai, Binh Duong and Vinh Phuc. Especially, Quang Nam province enjoyed a growth of nearly 60%.

The GSO also said that inventory level of industrial production and manufacture as of January 1 this year, hiked up 9.2% from the same period in 2015. High levels of inventory were seen in beverage production (95.7%) and electronics, computer and optical production (89.5%).

WTO trade facilitation agreement introduced

The World Trade Organisation’s Trade Facilitation Agreement (TFA) sets forth a series of specific measures to facilitate trade across borders in line with international standards, creating favourable conditions for Vietnam to implement commitments in the free trade agreements (FTAs) that the country has signed.

Nguyen Toan, Director of the International Cooperation Department under the General Department of Vietnam Customs revealed the information at a press conference held in Hanoi on January 29 to introduce the TFA.

With three sections including 24 provisions, the TFA contains provisions for expediting the movement, release and clearance of goods, including goods in transit.

In addition to special and differential treatment provisions on providing technical assistance for developing and least-developed countries, the agreement also includes articles on establishing a permanent committee on trade facilitation at the WTO as well as national committee to facilitate domestic coordination and implementation of the agreement’s provisions.

The General Department of Vietnam Customs will set up plans and establish a steering committee to carry out the agreement’s commitments, Toan said.

The TFA was adopted by the WTO members at the Bali Ministerial Conference in 2013. The agreement aims to set out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues while enhancing technical support and capacity building in the area.

On the same day, Ministry of Trade and Industry and the government’s negotiation delegation on international economic and trade issues held a conference to popularise information on some inked or negotiated FTAs to branches, sectors and enterprises in the northern provinces of Cao Bang, Ha Giang, Tuyen Quang, Bac Kan and Lang Son.

In addition to providing local authorities and enterprises with an insight into the Trans-Pacific Partnership agreement, the EU-Vietnam Free Trade Agreement and Vietnam- Eurasian Economic Union trade pact, the event will help them to map out effective investment policies in the future.

Nation's retail sales up 11.7 percent in pre-Tet month

Vietnam's retail sales of goods and services were estimated at 297.7 trillion VND (13.4 billion USD) in January, up 11.7 percent from the same period last year, data from the General Statistics Office (GSO) revealed.

The retail sales of goods, which account for 76.1 percent of the total sales, reached 226.6 trillion VND (10.2 billion USD), up 12 percent from last year. Of which, garments and textiles are estimated to have increased 12.9 percent; and food and foodstuffs, 11.5 percent.

Retail sales growth was triggered by the increasing demand in preparation for the Lunar New Year (Tet), the GSO said.

In the reviewed month, Vietnam saw 8,320 new enterprises begin operations, with total capital of 59.3 trillion VND (2.7 billion USD), representing a 21.2 percent year-on-year increase in the number of new businesses, and an 87 percent year-on-year increase in capital.

More than 4,870 firms also resumed operations, up 69.6 percent against the same period last year.

According to the GSO, this January had the highest number of firms resuming operation in the past few years, adding that the numbers in January 2014 and January 2015 were 2,375 and 2,872 firms, respectively.

However, the number of firms that have either suspended or shut down operations in the month was also high.

In January, the number of enterprises which have completed disclosure procedures and shut down operations rose by 34.7 percent to 1,338. Most of the firms were small-sized, with registered capital of less than 10 billion VND (456,600 USD) each.

Further, companies that have declared a temporary suspension of operations numbered 12,456, up 27.5 percent year-on-year.

Vietnamese firms seek to take advantage of FTAs

Active integration will boost corporate competitiveness, said Nguyen Quynh Nga, a member of Vietnam’s delegation negotiating the Trans-Pacific Partnership (TPP) deal, during a seminar concerning corporate knowledge about the pact, which was held in Hanoi on January 29.

According to her, difficulties are inevitable at first, thus enterprises ought to design their integration moves carefully.

This deal and a range of new-generation free trade agreements (FTAs) will have a significant impact on the Vietnamese economy as a whole, stressed Vietnam Chamber of Commerce and Industry (VCCI) Chairman Vu Tien Loc.

He continued by saying that domestic enterprises have capitalised on only a fragment of the benefits brought about by FTAs, while the foreign-invested sector, especially manufacturing for export are earning the most advantages.

Nguyen Thi Thu Trang, Director of the World Trade Organisation and Integration Centre under the VCCI, noted updating information on when these pacts take effect and their road maps is key to whether a company succeeds or fails to integrate.

Businessmen need to ready themselves for relevant trade defence measures as well as quality and copyright regulations, among others, added Trang.

Dang Phuong Dung, Vice Chairwoman of the Vietnam Textile and Garment Association, said firms in her sector face obstacles in terms of materials and capital sources once the TPP agreement officially starts.

Central Institute for Economic Management expert Vo Tri Thanh took note of domestic companies’ confidence in their comparative advantages, which will help them overcome difficulties and gain footholds internationally.

VCCI: Local companies must improve decision making

At a meeting convened by the Vietnam Chamber of Commerce and Industry (VCCI) on January 29 in Hanoi, business leaders elaborated on the importance of local companies improving their decision making skills.

“Most foreign invested companies are adept at unbundling free trade agreements (FTAs) and extracting the parts applicable to their situation and benefiting from them,” said Chairman Vu Tien Loc.

Whereas local companies are much less skilled said Loc, and as a result fail to pounce on opportunities presented and in the final analysis avail themselves of only a relatively small portion of the benefits.

Nguyen Thi Thu Trang, a VCCI official, echoed Loc’s view saying local businesses should be more proactive in analysing and latching on to opportunities and implementing competitive strategies, capitalizing upon their strengths.  

Trang stressed, businesses must better grasp and implement policies to improve the quality of products and comply with complex rules related to certificates of origin (C/O), intellectual property rights, and environmental policies.

Economist Vo Tri Thanh from the Central Institute for Economic Management (CIEM) in turn emphasized local companies should be more assertive and self-confident in their decision making and implementing competitive strategies.

This will enable them to rise up and gain a firm foothold in the regional and global integration process and put them on more of an equal competitive footing with their seasoned peers from other countries.

Plastics import plunges

The plastics sector’s import surplus dipped 17.5% to US$3.54 billion last year, according to the Vietnam Plastics Association (VPA).

Although the sector earned US$2.405 billion from exports last year, a rise of 12.4% compared to the previous year it spent US$5.949 billion on importing 3.82 million tons of plastic materials for domestic production.

Imports of three main plastics – PE, PP and PVC plunged 20%, 25% and 21% respectively compared to 2014 due to sharp oil price drops.

Saudi Arabia, Taiwan, Thailand, China and Singapore are Vietnam’s major plastic suppliers, of which China accounted for 8% of total import value.

The VPA said PE and PP remained two major import materials for the plastics sector and made up 53.45% of total plastics import value.

US – biggest importer of Vietnam footwear

The US has become the biggest importer of Vietnam’s footwear products with an import revenue of nearly US$4.1 billion, accounting for 33.9% of the country’s total footwear export value, according to the Vietnam Leather, Footwear and Handbag Association (LEFASO).

Last year, the US topped among importers of handbags made in Vietnam with an import value of US$1.18 billion, making up 41.1% of Vietnam’s total handbag exports.

The foreign direct investment (FDI) sector took the lead in footwear and handbag exports, earning US$9.54 billion and accounting for 79.1% of total export value.

Developing collective management organisations for copyright

Japanese experts in the field of copyright and related right protection shared experience with their Vietnamese colleagues in how to develop collective management organisations (CMOs) for copyright and related rights at a workshop on January 28.

Director General of the Copyright Office of Vietnam Bui Nguyen Hung said CMOs in Vietnam have operated for a while, but their capacity is limited. At the same time, many individuals and organisations in the country have low awareness about copyright and related rights. That is the reason why violations of copyright and related rights in Vietnam are still rampant, according to Hung.

Participants at the workshop made comparative assessment of the systems of CMOs in Vietnam and Japan and discussed in depth the management of performers’ rights in the digitalized environment.

Opportunities and challenges to the protection of copyrights and related rights in the era of digitalization were also an issue attracting great interest in the debate.

Regarding solutions to develop the system of CMOS in Vietnam, it was agreed that besides more communications campaigns, management agencies should facilitate the establishment of CMOs in fields which so far have no similar organisations. The licencing of copyrights and collecting copyright fees should be expanded, while CMOS also need to improve the transparency of their activities.

Participants urged reforming the distribution system to align with international standards, and boosting cooperation with foreign CMOs.

The CMOS currently operating in Vietnam include the Vietnam Centre for Protection of Music Copyright (established in 2002), the Recording Industry Association (2003) and the Vietnam Literary Copyright Centre (2004), the Vietnam Reproduction Right Organisation (2010) and recently, the Vietnam Association for Protection of Performing Artists

Fishery and farm exporters urged to study EU regulations

Vietnamese firms involved in fishery and agricultural products were urged to study the sanitary and phytosanitary measures (SPS) of the European Union (EU) markets to opimise opportunities for both sides.

This would help them cope with impending free trade deals and expand their exporter base.

According to Nguyen Tu Cuong from the Vietnam Fisheries Society, the compliance to SPS was a prerequisite for exporters of fishery products, vegetables and fruits to penetrate the EU markets smoothly, amid the impending Vietnam-EU free trade agreement (FTA), which promised to be beneficial to Vietnamese firms due to the elimination of a number of tariff lines.

Cuong also said that all opportunities from the trade deal would become meaningless if Vietnam failed to meet sanitary and phytosanitary standards set by the import markets.

He said that local management agencies as well as exporters did not fully understand the EU’s regulations while Vietnam’s regulations remained inconsistent with that of the EU’s.

That is why Vietnam needs a roadmap to harmonise SPS regulations to the EU’s standards to sustainably get access to their markets.

Le Thanh Hoa, deputy director of the SPS office in Vietnam, said that sanitation was of great concern today as Vietnamese firms regularly received warnings from the EU about contents of banned antibiotics, heavy metals, and excess pesticides.

For example, during the past five years, tra fish products from Vietnam have received warnings with regard to hygiene from Spain for 24 batches, and Germany for 14 batches.

Hoa said export firms must closely supervise the process from production to harvest and processing to minimise violations of chemical content. A production chain should be developed based on the connection with farmers to develop areas for raw material to ensure supply of high-quality products, he added.

Regular and timely updates about sanitary regulations for each product were indispensable.

Statistics from the Department of Animal Health revealed that in the first 10 months of 2015, more than 8,000 tonnes of fisheries products were returned due to violations of sanitary regulations.

Tra fish exporters told to register for shipments to U.S.

The National Agro-Forestry-Fisheries Quality Assurance Department (Nafiqad) has asked tra fish exporters to register their shipments to the United States by next Friday.

In a document signed on Tuesday by Nafiqad head Nguyen Nhu Tiep, enterprises will be able to register for tra fish export to the U.S. if they already shipped the fish to the U.S last year and signed export contracts with American partners for this year.

Tra exporters must obtain codes from the U.S. Food and Drug Administration (FDA) under the Food Safety Modernization Act (FSMA) and meet food safety criteria specified in Circular 48/2013/TT-BNNPTNT issued by Vietnam’s Ministry of Agriculture and Rural Development on November 12, 2013.

Exporters are required to make registrations as the U.S. Food Safety and Inspection Service (FSIS) earlier announced its final regulations on a mandatory inspection program for fish of the order Siluriformes and products derived from these fish. These regulations were issued to implement the provisions of the 2014 Farm Bill, which amended the Federal Meat Inspection Act mandating FSIS inspection of Siluriformes including tra fish.

The regulations will take effect in March 2016, 90 days after they were publicized. However, FSIS applies an 18-month transitional period for both domestic and imported products.

Data of the Vietnam Association of Seafood Exporters and Producers (VASEP) showed tra fish exports totaled US$1.58 billion last year, down 10.4% from the previous year. The U.S. remained the biggest consumer of tra fish, accounting for 20% of Vietnam’s total tra exports.

VASEP estimates outbound sales of tra fish at US$1.5 billion this year, down 5% against 2015.

Transport Ministry to issue import licenses for big motorbikes online

The Export-Import Department under the Ministry of Industry and Trade will start the online licensing of import of heavy duty motorcycles and ozone layer-depleting substances via the Internet from early February.

The online licensing comes after the ministry joined hands with the Ministry of Finance to integrate some administrative procedures of the industry-trade ministry into the national One-Stop Shop (OSS) mechanism last December.

On Tuesday, the Ministry of Industry and Trade introduced the online licensing process for categories of goods under its management including the ozone layer-depleting substances and high-capacity motorcycles under the national OSS. Importers will be provided with accounts to access the national portal to receive registration forms and licenses will be issued for applicants meeting all conditions.

Enterprises can access https://vnsw.gov.vn to sign up for accounts. Within one working day after the application is submitted, the portal managing unit will send feedback of rejection, requirement of additional information or acceptance via e-mail to the applicant.

Accounts and passwords will be e-mailed to enterprises after they have met all conditions, and the portal management will forward registration forms to the export-import department for processing and issuing licenses.

Within five working days after valid registration files are submitted online, the department will have to inform the applicant of the results on the national OSS portal. If the application fails, the licensing authority should specify the reasons for disapproval and what the applicant should do next.

Importers will get the license in electronic form after their applications are approved.

Wood processors concerned about loss of skilled labor

Domestic wood processing enterprises worry that their skilled workers could leave for foreign-invested firms to get higher pay after the Trans-Pacific Partnership (TPP) trade pact takes effect.

This concern was shared by exporters of wooden products at a seminar organized by the Handicraft and Wood Industry Association of HCMC (Hawa) on Wednesday for wood processing and exporting firms to discuss the future of the industry.

The high-standard trade agreement, whose member states are Vietnam and 11 other Pacific Rim countries, is expected to help attract many more foreign investors to the wood processing industry in this ASEAN market. Foreign firms having strong finances and offering more attractive wages will become a magnet for skilled workers in the industry.

Vo Truong Thanh, chairman of Truong Thanh Furniture Corporation, said more than a decade ago many wood processing and exporting enterprises requested the Government to establish vocational schools for the wood processing sector to solve the lack of human resources. But their request was not met, so they had to train their employees on their own.

Now, local wood processing and exporting enterprises have expressed concern that their well trained workers might job hop to foreign-invested firms in the sector as seen in the past when FDI enterprises offered higher wages for skilled employees.

Firms thought a battle for retaining skilled workers would intensify when the TPP goes into force since tax incentives offered by other TPP markets will encourage more foreign companies to set up shop in the wood processing sector in Vietnam.

Therefore, domestic companies cannot avoid losing skilled workers, heard the seminar.

The leader of a wood exporting company told the Daily on the sidelines of the seminar that many FDI firms can offer higher salaries than local counterparts to attract skilled workers because their products come with higher prices.

He said many domestic enterprises in the sector have recently spent heavily training their employees but these workers might hop to foreign-invested companies.

Rice exports off to good start

Vietnam shipped abroad 202,000 tons of rice in the first week of January, up a staggering 108% from a year earlier, a source from the Vietnam Food Association (VFA) said.

The source declined to elaborate. However, Nguyen Thanh Phong, director of Van Loi 2 Company in Tien Giang Province, credited the upsurge to more rice shipments to the Philippines and Indonesia under government-to-government contracts signed last year and contracts of local enterprises.  

Vietnam was ranked second after Thailand in terms of rice exports in the first week of this month when the latter reportedly shipped 305,000 tons.  

Vietnam’s rice exports in the first quarter under contracts clinched in 2015 and this year total around 1.2 million tons, doubling the average in previous years.  

VFA looks to export 6.5 million tons of rice in 2016, slightly higher than 6.57 million tons in 2015. The volume does not include rice exports to China via border gates.  

Rice export firms in the Mekong Delta region said a kilo of IR 50404 rice is sold at VND6,650-6,700 per kilogram, down VND50-100 a kilogram against early last week. Meanwhile, fresh IR 50404 paddy harvested in the ongoing winter-spring crop hovers in a range of VND4,400 and VND4,500 per kilogram, down VND100-150 per kilogram from the previous week.      

The export price of rice dropped by US$5 per ton late last week, and now stands at US$350-360, US$340-350 and US$445-455 for 5% broken, 25% broken and jasmine rice respectively.

SHTP touted as export driver

Saigon Hi-Tech Park (SHTP) is seen as a major catalyst for export growth in HCMC, with outbound sales of SHTP tenants accounting for 20% of the city’s total last year, the park’s authority said.

Businesses at the park in District 9 posted total export revenue of nearly US$4.67 billion in 2015, jumping 49.3% from the previous year and beating the target by 16.7%. The figure made up 92% of the city’s total exports of electronic and hi-tech products, said Le Bich Loan, deputy head of the park’s authority.

Last year, per capita labor productivity at SHTP reached US$196,000, or 9.8 times higher than at the city’s export processing zones and industrial zones.

Meanwhile, material imports into SHTP amounted to over US$3.8 billion. The added value of export products made at SHTP went up by around 10% against three years ago but was still below the SHTP authority’s target.

As most projects at SHTP turn out products for export, the park predicted that exports of its tenants would surge in the years to come when more major projects become operational.

The US$2-billion electronics complex of South Korea’s Samsung Group is scheduled to begin production next month, with its annual revenue estimated at US$3.9 billion in the first phase from 2016 to 2018 and US$5.5 billion in the next stage from 2019 onwards.

At a ceremony held late last year to present a revised investment certificate to Samsung, HCMC chairman Nguyen Thanh Phong said the Samsung project’s export revenue would represent around one-fifth of the city’s total.

Loan said 2015 was also a successful year for SHTP in terms of new capital pledges. The park wooed 28 projects worth US$1.5 billion, 3.7 times higher than targeted. Of the figure, there were 19 domestic projects valued at a combined US$521 million and nine foreign-invested projects capitalized at over US$986 million.

Between 2015 and 2020, SHTP looks to become one of the leading hi-tech parks in the region and develop a smart city. At a meeting with deputies of the HCMC People’s Council early this week, SHTP Authority chief Le Hoai Quoc suggested the city government speed up investment in the park.

According to the authority, 92 projects have been approved to set up shop at SHTP with combined investment commitments of US$5.38 billion, with 57 of them domestic projects worth US$1.08 billion and the remainder foreign-invested projects capitalized at US$4.3 billion.

The park has so far posted US$14.74 billion in export revenue and US$13 billion in import spending.

Vissan to launch IPO in March

State-owned Vietnam Meat Industries Company, better known as Vissan, will launch an initial public offering (IPO) on March 7, with over 11.3 million shares up for grabs at the starting price of VND17,000 each.

According to a notice of the Hochiminh Stock Exchange (HOSE), interested investors can place deposits for the auction from early next week. After the IPO, Vissan is expected to have chartered capital of over VND809 billion (US$36 million).

On January 8, Vissan announced to offer over 11.3 million shares, or a 14% stake, to no more than three strategic investors.

To become a strategic investor of Vissan, businesses should have operated in relevant sectors for at least five years and will present a business plan after the IPO. Besides, their equity last year was at least VND1 trillion and they had racked up no losses as of September 30, 2015.

The ratio of total payables over equity should be no more than 1.5 times. In addition, the investor must pledge not to transfer Vissan shares in at least five years.

Vissan said on its website that the IPO will open a new chapter for the company. This year, the enterprise will continue expanding its supply of pork meeting VietGAP (Vietnamese Good Agricultural Practices) standards with VietGAP pork to be available at all meat outlets in HCMC.

In 2015, Vissan sold nearly 19,400 tons of meat and 18,800 tons of processed food, generating over VND4.6 trillion in revenue. In December last year, the enterprise announced to sell VietGAP pork at 221 stores in HCMC and Australian beef with Exporter Supply Chain Assurance System (ESCAS) standards at all its outlets.

Lee Hae Sun, chief executive officer of CJ CheilJadang Corporation (CJ), said at a meeting with HCMC’s authorities in March 2015 that the group was interested in the equitization of State-owned enterprises in HCMC, including Vissan.

Vissan is a leading meat processing company in Vietnam while CJ is strong in food and food service sectors in South Korea and other markets. Cooperation between both sides would help improve Vissan’s performance, Lee said.

If CJ becomes a shareholder of Vissan, it will promote Vissan brand in Vietnam and abroad.

Eximbank demotes deputy general director

Vietnam Export-Import Commercial Bank (Eximbank) announced on January 21 to demote deputy general director Cao Xuan Lanh.

Eximbank did not give a reason for Lanh’s demotion but said its board of directors will assign a suitable job to Lanh at its human resource development department.

Born in 1957, Lanh took up the post of deputy general director at Eximbank in early December 2013 to assist the general director.

The bank’s management board has 13 members after Lanh left and deputy general director Tran Tan Loc now works as caretaker general director at the bank.

In mid-December last year, Eximbank held an extraordinary general meeting to vote for new members of the board of directors and the supervisory board for the 2015-2020 term. According to the results, the board of directors had nine members with Le Minh Quoc serving as chairman.

As of November 30 last year, Eximbank’s assets had totaled about VND127 trillion (around US$5.67 billion), down 21.15% against the year’s beginning and equivalent to 70.6% of the target.

The decline mostly resulted from a fall of VND35.54 trillion in capital mobilization from the interbank market as part of the bank’s plan to restructure loans via this channel.

Eximbank saw capital mobilization in January-November last year dropping by 0.2% against the year’s beginning to VND101.28 trillion, equivalent to 80.4% of the full-year target.

Total outstanding loans and corporate bonds had slid by 1.9% to VND96.05 trillion, 88.3% of the target with total outstanding loans to organizations and individuals nearing VND84.55 trillion, down 3% over the start of the year.

The fall in outstanding loans at Eximbank resulted from the restructuring of its loan portfolio, the reduction in unsecured loans, sales of bad debt to Vietnam Asset Management Company (VAMC) and an increase in retail credit.

By the end of last November, the bank’s bad debt stood at nearly VND1.54 trillion, a 28% drop against early last year and equivalent to 1.82% of total outstanding loans. The bad debt ratio was 2.46% in 2014.

Eximbank reported pre-tax profit of VND552 billion by the end of November, equivalent to 55.2% of the full-year target. The bank had set aside VND1.17 trillion for risk provisions.

Vietnam index posts biggest jump in nearly 4 years

Vietnam's VN Index rose 3.85% on January 25, the strongest single-day jump since March 2012, helped by a rise in oil prices earlier in the day and developments at the ongoing Communist Party congress, analysts said.

Three quarters of the shares on the benchmark index climbed, led by banks with five of the country's six listed lenders rising. Vietcombank advanced 5.56% and VietinBank soared 6.83%.

Vietnam's prime minister was among preliminary nominations for the Communist Party's central committee on January 24, an official said, maintaining the possibility of him being in the party leadership to be decided this week.

"The fact that congress is taking place smoothly boosted the positive sentiment of the market," said Ha Le, analyst at Vietcombank Securities.

Energy stocks soared after crude oil futures extended gains on Monday on short-covering and fuel demand triggered by freezing weather in parts of the northern hemisphere. PetroVietnam Gas jumped 6.88%.

Shares in real-estate company Hoang Anh Gia Lai JSC also rose 6.33%, rebounding from Friday's record low of 7,900 dong, after the central bank rejected market rumour on investigation into HAGL.

As many as 164.3 million shares changed hands, well above their 30-day average of 122.86 million, Thomson Reuters data showed.

The market is uncertain in the coming sessions, with movements heavily depending on global oil prices and developments at the ongoing congress, analysts expected.

The congress will decide who will be Vietnam's key leaders for the next five years.

The index, Southeast Asia's best performer last year, has lost a combined 6.3% so far this year, compared with a 6.1% gain a year earlier. (US$1=22,380 dong)

Vietnam central bank to soon clarify regulations for property loans

The State Bank of Vietnam will issue instructions about loans for property when seeking mortgages, in a bid to clear misunderstandings, a representative said.

Nguyen Tien Dong, Head of the central bank's Credit Department, said that future property was an asset of home buyers, adding that home buyers could use it when seeking mortgages, following established regulations.

This was in response to information that several commercial banks had temporarily ceased accepting future property for approving mortgages for home purchases.

The information concerned both home buyers and property developers because it triggered fears that the capital flow into the property market would stall, even as the realty market has shown sign of recovering.

Dong said that the bottlenecks were caused by misunderstandings or one-sided interpretations by commercial banks.

Detailed instructions are to be soon issued to eliminate misunderstandings and create advantages for loan procedures, Dong said.

Further, BIDV, on its website, said that the bank still accepted loans with future property when issuing mortgages, in line with established laws.

But the bank added that it has encountered difficulties during the implementation due to a lack of detailed instructions about asset ownership rights related to future property.

BIDV noted that on January 5 it sent a document to the central bank, seeking measures to tackle the difficulties for the bank and other credit institutions.

While waiting for instructions from the central bank to minimize risks, the bank temporarily did not accept future property for mortgages, but only as supplementary mortgage assets.

Issuing loans with future property for mortgages was currently allowed in the Law on Housing 2014, Decree 99/2015/ND-CP and Circular 26/2015/TT-NHNN.

Lawyer Nguyen Thanh Ha, in a story published in the Tuoi Tre (Youth) newspaper, urged the early issuance of detailed instructions for loaning money using future property for mortgages, in compliance with existing laws.

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