Ministry requires petrol prices cut on world downward trend

The Finance Ministry has required petrol companies to cut retail petrol prices as from 14:00 on July 28 against the backdrop of declining world prices, with the companies to decide the specific price by themselves.

The reduction will mark the 13th adjustment in the domestic market within this year.

The prices of petroleum should go down at least VND325 per litre, taking into account the gap between the current price and the base price.

Meanwhile, the price of diesel 0.05S and kerosene should not be higher than the base prices of VND22,334 (US$1.063) per litre and VND22,464 (US$1.069) per litre.

Mazut (fuel oil), however, still sees its price unchanged but dealers will no longer receive the price subsidy of 300VND per litre from the Petroleum Price Stabilisation Fund.

On July 18, the Ministries of Finance and Industry and Trade told retailers to draw 670 VND per litre from the Petroleum Price Stabilisation Fund to offset their losses.

Newport Corporation seeks business opportunities in Turkey

A delegation from the Saigon Newport Corporation led by general director Nguyen Dang Nghiem paid a working visit to Istanbul, Turkey from July 23-26, exploring business opportunities with companies from the Middle Eastern country.

The visit, co-organised by the Vietnam embassy in Turkey and the Turkey-Vietnam Business Council, aimed to expand overseas markets, seek business partners to invest in the seaport services industry and serve as a bridge for local businesses to penetrate the South European and West Asian markets.

At a seminar held during the visit on seaport services, general director Nguyen Dang Nghiem stated he was very impressed with his first visit to Turkey and found it large promising market.

He said that Istanbul’s strategic seaport location has facilitated trade exchange and cooperation with many nations including Vietnam. He also expressed his hope Turkish businesses will expand long-term cooperation with Vietnam.

Nghiem emphasised that the Saigon Newport Corporation wants to play an important leading role in providing a full package of seaport services to the Turkish market as well as serve as a driving force promoting cooperation between other businesses of the two nations.

Meanwhile, Turkey’s senior representatives expressed hope that Istanbul and Turkey will be a favourable destination for Vietnamese businesses.

Vietnam enjoys US$1.26 bln Jan-Jul trade surplus

The nation enjoyed a trade surplus of US$1.26 billion in the first seven months of the year, according to the Ministry of Planning and Investment (MoPI) General Statistics Office.

Total export turnover was estimated at US$83.5 billion, representing a year-on-year increase of 14.1%.

Of the figure, the domestic economic sector made up US$27.7 billion, up 12.2%, while foreign invested enterprises (FIEs) accounted for US$55.8 billion, up 15%.

In the reviewed period, Vietnam’s key export products included mobile phones and spare parts, garments and textiles, footwear, seafood, machinery, equipment, tools, wood and timber products, coffee and pepper.

Some products showed decreases in export volume and value such as rice, cassava, rubber, coal, oil and gas.

By July 2014, the US was the largest exporting market of Vietnam followed by the EU, ASEAN, China, Japan and the Republic of Korea.

China was the largest import market of Vietnam which realized a trade deficit of approximately US$14.8 billion, up 14.4%.

Danang endeavours to become major socio-economic hub

Danang city plays the pivotal role in Central Vietnam’s regional socio-economic development strategy.

Le Hong Anh, Politburo member and permanent member of the Party Central Committee’s Secretariat, made the statement at a working session with Danang city’s Party Committee on July 28 regarding the socio-economic situation in the first half of the year and preparations for the upcoming Party Congresses at the grassroots level.

During the first six months of the year, the city’s Gross Domestic Product (GDP) reached VND20,000 billion, up 9% on-year while total state budget collections hit nearly VND7,000 billion. There have been across the board positive developments in fields such as trade, service, import-export and tourism.

During the session, Anh praised the excellent results made by the municipal party committee and local residents in recent times but pointed out some limitations in the city’s management.

He suggested that in the short term, Danang should put forth a concerted effort to disseminate information on the city’s socio-economic development advantages and disadvantages among party members.

The ultimate goal should be to fully identify available resources and opportunities and optimum strategies to fully modernize and industrialize the city and region before 2020.

Promoting the City’s image as a luxury travel destination as well as establishing international and national level tourism centres should also be top priority in as the city’s development strategy.

RoK – a leading foreign investor in Vietnam

Republic of Korea (RoK) businesses have pumped over US$3.13 billion of cash into Vietnam’s economy in the first seven months of the year, accounting for one third of the country’s total foreign direct investment (FDI).

Statistics from the Foreign Investment Agency (FIA) of Vietnam also show RoK businesses have poured more than US$1.5 billion into the Southeast Asian country since June 2014, making the RoK the largest foreign investor in the country.

Lotte-Sea Logistics, Lock& lock, Simone, Vina-Seafoods Pride, Quanon, Young Chemical Vina and Magic Vina were among the many Korean investors that attended a recent dialogue with the managing board of the Long Hau Industrial Zone (IZ) in Long An province, discussing FDI attraction and IZ support policies.

Such dialogues with Korean investors have become increasingly more common in recent times.

RoK businesses consider Vietnam a key partner in Southeast Asia and a prime destination offering excellent business and investment opportunities.

They universally regard Vietnam as a better alternative than China for pursuing business and investment strategies, principally due to the country’s political stability and young highly skilled workforce.

Experts caution, however, it is important that the cash inflows are utilised efficiently and effectively to their greatest advantage to achieve sustainable economic development that benefits the national social welfare.

Vietnam should strive to carve out a niche for technology transfer to successfully carry out the localisation process for the greatest benefit of the national industry.

Without an effective localisation process, the national domestic industry and Vietnam will continue down a path that remains overly dependent on foreign industry and technology, they say.

The country should aim to realise the long-term benefits of developing a self-reliant domestic industry focused on creating high added value products and avoiding at all costs transforming itself into a nation that just does outsourcing, easily exploited for its cheap labour and natural resources.

According to the FIA, not only RoK investors but also those from Hong Kong and Japan are incrementally increasing their investment capital into Vietnam month by month.

For instance, Hong Kong ranks second after the RoK among foreign investors in Vietnam with US$1.15 billion, comprising 12.1% of the country’s total FDI.

Japan is third with US$1.11 billion, making up 11.7%, followed by Singapore with US$804.6 million, accounting for 8.4%.

The FDI sector continued to enjoy an export surplus in July, bringing its total export surplus to US$9.78 billion in 7 months.

The manufacturing and processing industries drew the greatest attention from foreign investors with 448 projects worth US$6.66 billion (making up 69.9%), followed by real estate with US$1.13 billion and construction with US$547.58 million.

Samsung Thai Nguyen rakes in US$2 billion from exports

More than three months since it was put into operation, the Samsung Electronics Vietnam Thai Nguyen (SEVT) earned nearly US$2 billion from exports, mostly smartphones and tablets (June statistics).

The plant had produced 5.4 million products in the reviewed period and the number is likely to rise to 6 million in late July.

It is expected to fetch US$8 billion in revenue this year and create 22,000 jobs for local people.

The SEVT started construction in March 2013 with total registered capital of US$2 billion. The facility was inaugurated on March 10, 2014 and earned US$90 million from exports in its first 20 days.

To date the SEVT and another Samsung plant (SEV) based in Bac Ninh province have made an enormous contribution to the country’s total export earnings.

Vietnam Customs statistics show the country’s total export value from mobile phones and spare parts hit US$12.3 billion in a period from January to July 15, a year-on-year increase of 14.6%. Samsung made up a large proportion of the total.

Vietnam, Egypt taking logistics business to a higher level

The Saigon Newport Corporation (SNP) held a conference on July 27 with representatives from 20 leading Egyptian businesses in Cairo exploring cooperative opportunities in logistics and transport.  

Speaking at the meeting, Vietnamese Charge d' Affaires to Egypt Nguyen Hong Son introduced Vietnam’s achievements in the renewal process underscoring the nation’s exceptional annual average growth rate of 6.76% over the past 10 years amidst the global economic crisis.

Son said Vietnam is a politically stable country in the Southeast Asian region and has an abundance of young highly educated and skilled workers. The country is a particularly lucrative investment destination attracting more than US$230 billion in foreign direct investment (FDI) over the past three decades, including US$22.3 billion last year alone.

Son pointed out the favourable geographic locations of the two countries, saying that Egypt borders Africa, Asia and Europe and owns and maintains the Suez Canal - a lifeline transport route linking the three continents. Vietnam has a similar strategic importance in Southeast Asia.

The two countries have great potential for strengthening cooperation in logistics and transport, especially in the context of carrying deep and wide economic reform, accelerating privatisation, attracting FDI capital and developing export-driven economy, Son concluded.

A SNP representative said the company holds the leading market share among terminal operators in Vietnam. The import-export container throughput of SNP accounts for more than 85% of the market share in the south and nearly 50% nationwide.

SNP currently manages a system of 14 ports and two inland container depots (ICD) in the country with total assets of VND30,000 billion (roughly US$1.4 billion). Last year, it grossed over VND7,901 billion (US$367 million) in revenue.

At the meeting, more than 20 members of the Egyptian International Freight Forwarding Association (EIFFA) expressed their desire to cooperate with SNP to supply all-in services for import-export businesses in the two countries.

A number of EIFFA members said they will visit Vietnam in the near future to learn more about the nation’s infrastructure and relevant services with the aim of establishing a long-term cooperative relationship with SNP.

Apartment prices see slight decline across Ha Noi

The selling prices of apartments in the capital fell by a slight 1 to 2 per cent in the second quarter of the year compared to the previous quarter.

According to a municipal Construction Department report, the prices of middle market segment apartments in Dong Da, Ha Dong, Tay Ho and Hai Ba Trung districts saw a price decrease of 2 per cent. Apartment prices in Cau Giay, Hoang Mai, Thanh Xuan and Nam Tu Liem outer districts had fallen 1 per cent. Long Bien and Ba Dinh districts remain unchanged in the selling prices of apartments during the period.

In the high-end market segment, apartment prices in Thanh Xuan and Tay Ho districts fell by 1 per cent, while those in Cau Giay and Nam Tu Liem stayed the same as the previous quarter.

The department said that prices were based upon figures from the municipal Taxation Department, real estate transaction floors and People's Committee in the city's districts.

However, figures were different from previous reports by property consulting firms, such as CBRE Viet Nam and Savills.

According to CBRE Viet Nam, selling prices of apartments in the market in the April-June period rose 0.2 per cent against the previous quarter.

CBRE said there was additional money paid for property to intermediate agencies at projects which have been built according to schedule or were near operational as the market heated up.

Savills Viet Nam added that Ha Noi saw 1,900 apartments sold in the second quarter, a 54 per cent increase in comparison with the first quarter. Further, the rate of successful transactions in the market rose from 5 to 15 per cent.

Decree No 20, issued by the Ministry of Construction, required the publishing of two indices, including the number and prices of estate transactions in the property market at each locality.

It also proposed pilot implementations in four big cities, including Ha Noi, HCM City, Da Nang and Can Tho.

These indices are to serve as a statistical tool to monitor the market in order to help State management agencies provide suitable policies and strategies in the property sector.

Farming, forestry, fisheries exports reach $17.4b

The value of Viet Nam's farming, forestry and fisheries exports reached US$17.43 billion for the first seven months of 2014, up nearly 12 percent from the same period in 2013.

In July alone, the industry gained $2.38 billion.

Total export values included $8.31 billion from farming products, 5.9 per cent higher than the same period last year; $4.2 billion from seafood products, up 24.5 per cent; and $3.52 billion from forestry products, up 13.2 per cent.

According to the Ministry of Agriculture and Rural Development, pepper crops saw growth, with 119,000 tonnes shipped abroad at a value of $862 million, up about 29 percent in volume and 42 percent in value, Vietnam News Agency reported.

The largest markets for Vietnamese peppers during this period were the US, Singapore, the United Arab Emirates and India, which together made up 46 percent of total pepper exports.

Meanwhile, cashew nuts enjoyed an increase of over 2 percent, with 158,000 tonnes exported in the reviewed period, taking in over $1 billion, nearly 16 percent in volume and 17.5 percent in value higher than the same period's figure.

The seven-month exports of coffee reached $2.31 billion, a year-on-year increase of nearly 22 percent, while wood and wood products enjoyed a 13.4 percent rise in earnings, with $3.35 billion.

Meanwhile, seafood exports brought home $4.2 billion, up 24.5 percent year on year. Vietnamese seafood products mainly were shipped to the US, Japan, the Republic of Korea and China.

Also, a drop in both volume and value was seen in the export of rice, tea, rubber and cassava products.

Rice exports experienced decreases of 8 percent in volume and 4.8 percent in value, at 3.86 million tonnes and $1.75 billion. China remained the largest importer of rice, accounting for 39 percent of Vietnam's export volume, followed by the Philippines, Ghana and Singapore.

The country exported 451,000 tonnes of rubber, valued at $828 million, a drop of 10 percent in volume and 32 percent in value.

At the same time, tea also suffered a 6.7 percent fall in volume and a 1 percent decrease in value, with only 70,000 tonnes shipped, worth $116 million.

Report predicts sweet success for confectionery makers

The future of the domestic confectionery market is positive, reported the Business Monitor International (BMI).

According to the BMI Vietnam Food and Drink report for the second quarter 2014, the local confectionery revenue is expected to gain a year-on-year increase of 10.65 per cent to VND27.27 trillion (US$1.3 billion) for this year.

A year-on-year surge between 9.3 per cent and 10.6 per cent has been forecast for the revenue from 2015 to 2018. That would bring in between VND30.15 trillion ($1.4 billion) and VND39.88 trillion ($1.9 billion).

"The long-term outlook for the Vietnamese confectionery market is positive," said BMI.

Factors such as rising purchasing power, favourable demographics, growing health awareness and continued investments in the sector will support confectionery demand, especially with regard to chocolates, it said.

It said local chocolate revenues are expected to gain a year-on-year increase of 11.88 per cent to VND4.54 trillion ($215.2 million) for this year.

The revenue is forecast to have a year-on-year surge of 12 to 13 per cent for each year from 2015 to 2018, which is VND5 to 7.3 trillion ($237-346 million).

More personal wealth is likely to translate into a greater discretionary appetite for premium confectionery products. As an increasing number of domestic confectioners expand their upmarket product ranges, it is likely to bolster value sales growth over the coming years.

The BMI said 51.9 per cent of the Vietnamese population is estimated to be younger than 30, and the maturing of this demographic group means that there are dynamic opportunities in the mass market. Moreover, this demographic group is generally more receptive to Western cultures and will give an impetus to confectionery products.

Health awareness is prompting shifts of consumption habits towards functional and healthy confectionery products.

Capitalising on the growing trend, domestic confectioners such as Tan Tan Food & Foodstuff and Vina Mit are expanding their functional product offerings.

Regarding investments in the local confectionery sector, BMI said sustained competition levels in the Vietnamese confectionery sector have ensured that dynamism in the market is unlikely to cool off any time soon.

Nabati Indonesia, a leading Indonesian biscuit producer, recently announced plans to start distribution of its biscuit products in Viet Nam - a testament to the attractiveness of the sector. Meanwhile, domestic confectioners such as Kinh Do are expected to continue to invest in broadening their product ranges and expanding their distribution channels.

"Investment in Viet Nam's ingredients sector chimes with our favourable outlook for the country's food and drink market," the BMI said.

Belgian ingredients firm Puratos, which manufactures products for the baking and confectionery sector, announced in autumn 2012 that it will team up with fellow Belgian firm Grand-Place Holding, which produces chocolate ingredients, to set up a joint venture in Viet Nam.

The two firms will hold a respective 70 -30 stake in the new venture and will invest $10 million in the operation over the next five years.

As of now, domestic confectionery firms hold 70 per cent of the local market shares. These include Kinh Do, Hai Ha and Bibica along with North Kinh Do, Huu Nghi, Pham Nguyen, Duc Phat and other small private producers. Meanwhile, imported confectionery products have accounted for 30 per cent of the local market.

Software companies eye business demand

The market for business management software is promising for IT companies thanks to increasing demand for more effective management among local companies.

Many software developers told Viet Nam News that there is a vast untapped market since only a fraction of the thousands of companies in the country has already invested in business management software.

It is an effective tool for companies to strengthen their competitiveness against domestic as well as foreign rivals by allowing them to better manage assets, accounts, human resources, and other aspects, they said.

"There is no study or research available on the exact demand," Nguyen Thanh Tung, director of the Viet Nam Data Communication Information Technology (VDCIT) Centre, told Viet Nam News.

"But it is clear that more and more companies have invested in and focused on developing information technology to improve their management."

VDCIT has come out with solutions for tasks like customer relations management, human resource management, project management, big customer relations management, and assets management and found that "the market is in a fledgling state and has not been explored and the potential is huge."

He explained that only big companies buy expensive and comprehensive management solutions covering all aspects of business.

The smaller ones, based on their specific needs, use individual and specialised software, he said, adding "thus, there is a great opportunity to develop them."

A marketing staff at a software company in HCM City's Binh Thanh District, who asked not to be named, told Viet Nam News that her company also saw a growth in demand for business management software.

"Only large companies buy comprehensive software because the price is expensive at around US$20,000. Small companies buy individual solutions."

"Vietnamese software developers have an edge over their foreign rivals," Tung said.

"Made-in-Viet Nam program-mes will be easy to understand because of the language. Furthermore, Vietnamese solutions will be consistent with the country's laws and regulations."

"VDCIT is setting up a distribution system and plans to invest more in human resources and use cloud from next year," he said.

Sugar industry needs overhaul

Revamping the process from plantation to production to consumption were critical for the sugar industry to overcome the prices that had fallen in three consecutive seasons.

According to Doan Xuan Hoa, Deputy Director of the Department of Processing and Trade for Agro-Forestry-Fisheries Products and Salt Production, the sugar industry was facing oversupply ahead of the 2014 to 2015 season.

In the 2014 to 2015 season, there was a plan to reduce the total sugar-cane plantation area to 300,000 hectares from 309,400 hectares previously, with the total output reaching 1.6 million tonnes.

Hoa said that in order to deal with sugar oversupply, the sugar and sugarcane association needed to join hands with enterprises to raise the consumption plan in 2014 coupled with an export plan to ensure market stability.

He added that planning of sugar and sugarcane development to 2020 with vision to 2030 would be reviewed to ensure compliance with the reality, potential and competitiveness of Viet Nam.

Deputy Minister of Agriculture and Rural Development Vu Van Tam, said at Thursday's conference that sugar processing companies must revamp their production in order to cut costs, which was vital for competition.

He added that the planning of cultivation areas should be revamped to ensure efficiency and productivity.

In the 2013 to 2014 season, sugar plantations signed contracts with farmers to consume the sugarcane of nearly 267,000 hectares, making up for 90 per cent of the total concentrated plantation area.

According to the statistics of the Ministry of Agriculture and Rural Development, sugar stockpiles reached 548,940 tonnes as of June 15, up 56,430 tonnes against the same period last year. By the end of this year, the total sugar inventories were expected to reach 251,240 tonnes.

Sugar prices were seen falling from VND18,000-19,000 (US$0.84-0.89) per kilogramme in 2011 to VND14,500-15,000 ($0.68-0.7) per kilogramme in 2013.

The price of one kilogramme of sugar, including value-added taxes, has dropped to between VND12,400 and 13,000 ($0.59-0.61) since March.

A representative from the Viet Nam Sugar and Sugarcane Association earlier said that smuggled sugar, which amounted to hundreds of thousands of tonnes a year with lower prices, was a big headache and harmed local producers amid a huge volume of sugar stockpiles.

At the end of June, the Ministry of Agriculture and Rural Development proposed to the Ministry of Industry and Trade not to extend sugar export licences granted in the first half of this year but instead granting them for 200,000 tonnes of sugar at the end of this year.

Insurance firms see healthy H1 growth

The insurance market grew 12.6 per cent in the first half of this year compared to the same period last year despite the slow economic recovery, decreased interest rates and low credit growth.

The online portal Viet Nam Economic News quoted Deputy Director of the Insurance Supervisory Authority (ISA) under the Ministry of Finance Pham Dinh Trong as saying that the macroeconomic situation had an impact on the insurance market in the first months of this year. However, insurance businesses still posted good business performances. They earned premiums totaled VND24.129 trillion (US$1.132 billion) in the first half of 2014 (up 12.6 per cent from the same time in 2013), of which non-life premiums reached an estimated VND13.077 trillion or $613.94 million (up 7.3 per cent) and life premiums came to VND11.052 trillion or $518.87 million (up 19.5 per cent).

In the first half of this year, insurance companies paid an estimated VND9.806 trillion ($460.375 million) in compensation, of which life insurance companies paid about VND3.894 trillion ($182.81 million) and non-life insurance businesses paid VND5.912 trillion ($277.558 million).

Insurance businesses invested in the economy an estimated VND116.318 trillion ($5.46 billion), up 12.4 per cent from the same period in 2013, of which life insurance companies invested about VND93.137 trillion or $4.372 billion (up 16 per cent) and non-life insurance companies invested about VND23.181 trillion or $1.088 billion (up 0.05 per cent).

Along with expanding retail services, selling products through the banks and launching new products, insurance businesses focused on business administration to control their risks. In the first half of this year, the insurance industry rapidly and timely assessed and paid in advance compensation to businesses affected by the disruption in Binh Duong, Dong Nai and Ha Tinh provinces.

Deputy Minister of Finance Tran Xuan Ha assessed that the quick claim settlement helped businesses stabilise trading and production activities, contributing significantly to the protection of reputation and image and improving the investment environment of Viet Nam, while at the same time proving the significance of insurance for the economy as well as for each organisation or individual.

Trong said that in the first half of this year, ISA worked with relevant authorities to inspect a number of life and non-life insurance businesses including the AIA, Manulife, Dai-ichi, Hanwha Life, VASS, AAA and BSH.

ISA launched many programmes to maintain the stability and development of the insurance market. ISA Director Phung Ngoc Khanh said that management agencies would step up the inspection and supervision of insurers and insurance brokerage businesses and promote insurance business efficiency assessment.

Tax agencies to audit suspect firms

The tax authorities will audit enterprises which have allegedly made suspicious transactions, according to a list provided by the State Bank of Viet Nam's Anti-Money Laundering Information Centre.

Deputy finance minister Do Hoang Anh Tuan instructed the General Department of Taxation's (GDT) Inspectorate to audit the firms named in the Anti – Money Laundering Information Centre's list this month. The firms can possibly evade paying more than VND50 billion (US$2.347 million) in taxes.

Municipal and provincial taxation departments will be responsible for investigating those who can possibly evade taxes of less than VND50 billion.

Tuan said that the audit results must be submitted to the GDT and the Anti-Money Laundering Information Centre within 45 days of receiving the Anti-Money Laundering Information Centre's list.

According to the GDT, the tax agencies collected an additional VND4.119 trillion or $193.38 million in the first half of 2014, up 80.8 per cent year on year after the audit of 20,983 firms.

During the period, the agencies also investigated 557 firms which had declared losses and showed signs of transfer pricing, and collected an additional VND580 billion or $27.23 million.

The GDT reported that the country's tax collection in the first half of the year was VND335.09 trillion or $15.73 billion, up 14.5 per cent year over year and equal to 53.7 per cent of the annual tax collection target. Forty-six of 63 cities and provinces nationwide met more than half of their tax collection targets in H1.

To increase the tax collection in the second half of the year, finance minister Dinh Tien Dung asked the GDT to intensify the collection of tax arrears and to take bold measures against tax evasion.

The GDT must focus on investigating suspect enterprises, and create favourable conditions for the production and businesses of firms by organising regular dialogues to help them resolve their tax-related problems.

Government to issue instructions on selling State stakes in non-core firms

A decision explaining Decree15/ND-CP, which orders the selling of the State's stakes in non-core businesses at below face value, is expected to be issued this month.

This was announced on the Ministry of Finance's website. The withdrawal of capital at below face value was among the key resolutions which were taken to accelerate the restructuring of State-owned enterprises (SOE). It was also decided that 432 SOEs must be equitised during the 2014-15 period.

Although Decree 15/NQ-CP was issued in March, allowing the sale of the State's stakes at discounted rates, the process has been going slow as many SOEs are stuck, especially because of the withdrawal of outside investments which had incurred losses, and due to the lack of detailed instructions.

From 2013 to June 2014, SOEs managed to withdraw around VND1.85 trillion, or US$87.3 million, from their non-core businesses, comprising only 22 per cent of the total non-core investments of VND22 trillion ($1.04 billion) which need to be withdrawn by 2015. There is a huge load of work that needs to be completed by the end of 2015.

However, Deputy Director of the Corporate Finance Department Dang Quyet Tien said the capital withdrawal process was projected to speed up during the second half of the year, with the Government taking measures to accelerate it.

Deputy Prime Minister Vu Van Ninh recently asked ministries and provincial people's committees to punish leaders of enterprises which failed to implement equitisation or capital withdrawals efficiently.

The Decree 69/2014/ND-CP on the establishment, re-arrangement and operation of State economic groups and corporations, which will come into force on September 1, has banned SOEs from investing in irrelevant sectors.

The State Capital Investment Corporation (SCIC) has studied to buy a stake in 12 groups and corporations in non-core businesses such as banking and insurance, according to the Vietnam News Agency.

SCIC's General Director Lai Van Dao told a press meeting held in Ha Noi on Thursday that the units were big State-owned enterprises including Viet Nam Rubber Industry Group (VRG), Viet Nam National Oil and Gas Group (PVN), the Electricity of Viet Nam (EVN), the Viettel Telecom Group, the Viet Nam National Coal and Minerals Industry Group (Vinacomin) and Viet Nam National Shipping Lines (Vinalines).

Dao said SCIC met with Vinalines and VRG on the issue and would meet with other groups and corporations based on evaluation of the divestment's effectiveness and progress.

He added that in the first half of the year, the corporation had succeeded in divesting its capital in 31 enterprises. Of these, in 26 businesses the corporation sold its non-core investments while in five other firms it sold a part of such capital.

"The selling of capital was higher than in the same period last year, bringing VND863 billion ($41 million) to the corporation and posting 46 per cent year-on-year increase," he said.

SCIC gained VND3.35 trillion ($159.5 million) in turnover in the period, increasing 37 per cent over the corresponding period last year and met with 57 per cent of the year's target. Its after-tax profits reached VND2.6 trillion ($123.8 million), representing 34 per cent year-on-year rise.

By the end of June, its list of businesses included 335 enterprises with total State-owned investment of more than VND15 trillion ($714.2 million) and charter capital of over VND65 trillion ($3.09 million).

According to SCIC's restructuring plan, it would divest from 376 firms by 2015. However, it would hold long-term capital in Viet Nam Dairy Products Joint Stock Company (Vinamilk), Hau Giang Pharmaceutical, FPT, and Viet Nam National Reinsurance Corporation.

In addition, it would have controlling stakes in more than 20 joint stock companies including Bao Minh Insurance Corporation, the Trang Tien Investment and Trade Company.

FDI sinks despite new projects

Total registered capital of foreign direct investment (FDI) projects in the first seven months this year decreased by 20 per cent year-on-year to US$9.53 billion, according to the Ministry of Planning and Investment's Foreign Investment Agency (FIA).

However, total disbursements from FDI firms were estimated at $6.8 billion, increasing 2.3 per cent against the corresponding period last year. FDI businesses generated an export turnover of $55.83 billion and incurred around $46.04 in imports, resulting in a trade surplus of $9.78 billion.

In the reviewed period, as many as 889 new FDI projects were licensed with total registered capital of $6.85 billion, representing 0.9 per cent year-on-year decrease. About 300 projects increased their investment by $2.67 billion, reducing 46 per cent in comparison with the same period last year.

The processing and manufacturing industries took the lead in attracting FDI with 448 newly-licensed projects with new registered and additional capital of $6.66 billion that accounted for 70 per cent of the total FDI. They were followed by the real estate sector with $1.13 billion, accounting for 12 per cent of the total and the construction sector with $547.58 million.

At present, 46 countries and territories have been investing in Viet Nam. South Korea took first place in terms of total registered investment of around $3.13 billion, accounting for 33 per cent of the country's total FDI inflow. Hong Kong ranked second, followed by Japan and Singapore.

The northern Bac Ninh Province led the country in FDI with $1.33 billion, accounting for 14 per cent of the country's total inflow. HCM City was second with total registered and additional capital of $1.07 billion, followed by Binh Duong, Dong Nai, Hai Phong and Ha Noi.

Some big FDI projects that were granted licences in July included South Korean investor's Samsung Display Company in Bac Ninh Province with $1 billion, Thang Long Cement Factory funded by an Indonesian investor in north-eastern Quang Ninh Province with $325.75 million and Dai An Viet Nam – Canada International Hospital Company in northern Hai Duong Province with $225 million.

HCM City sees export turnover rise

HCM City has maintained economic growth in the first seven months of 2014, with increases in wholesale and service turnover, and expansion of industrial production, heard a meeting to review socio-economic development of HCM City yesterday.

According to a report from the city's People's Committee, in the first seven months, total wholesale turnover of the city reached VND336.380 trillion (US$15.85 billion), a year-on-year increase of 12.8 per cent.

Despite difficulties arising due to China's placement of the oil rig in the continental shelf of Viet Nam in May, the city's export turnover rose to nearly $16.4 billion, up by 3.5 per cent over last year.

Major export increases were in pepper (up by 85.5 per cent); vegetables (48.5 per cent); machinery, equipment and spare parts (37 per cent); seafood (14.8 per cent); coffee (14.6 per cent); rice (11 per cent) and garments (8.4 per cent).

Meanwhile, the city's total imports went down by 8 per cent over the same period last year, to $14.1 billion.

The city's industrial production increased by 6.2 per cent over last year, with major increases (7.2 per cent) in mechanics, chemicals, electronics, plastics and rubber.

Foreign direct investment (FDI) totalled $1.1 billion, a year-on-year increase of 80.2 per cent.

In the same period, the city received nearly 2.4 million foreign visitors, up by 9.1 per cent over 2013.

Total revenue of the city's tourism sector in the first seven months reached nearly VND52 trillion ($2.45 billion), an increase of 8.5 per cent over last year.

The chairman of HCM City People's Committee, Le Hoang Quan, said despite difficulties and increases in fuel prices, the city CPI (consumer price index) rose by only 0.12 per cent, the lowest in the past few years, while the city's exports and industrial production were on the rise.

These increases indicate that the city's economy has developed well and has not been too dependent on overseas markets.

Tran Anh Tuan, deputy head of HCM City Institute for Development Study, said despite signals of stable economic growth, the city would face difficulties and challenges and needs to focus on support industries, diversify overseas markets for its imports and exports; and adjust its import and export structure to avoid being dependent on the Chinese market.

To score high growth and fulfill the targets of 2014, Quan asked the city's Government agencies to focus on measures to put prices and inflation under control; to stimulate consumption; and to work with other localities across the country.

Quan asked agencies to increase revenue from taxation but to ensure good business and production for enterprises in the city.

He told agencies to enhance taxation from land resources, saying this is one of the major sources of revenue for the city's infrastructure development.

Ninh Thuan has new shrimp processing plant

The Thong Thuan seafood processing company inaugurated a shrimp processing plant with an annual capacity of 6,500 tonnes of end products in the central province of Ninh Thuan on July 26.

The 13 million USD plant, the second of Thong Thuan company, will employ 2,500 workers to produce high quality products meeting customers’ requirements in such choosy markets as Japan, Germany, France and the US.

In the first six months of this year, shrimp exports generated 1.8 billion USD, more than half the export value of the seafood industry (3.45 billion USD), according to a report by the Ministry of Agriculture and Rural Development.

Shrimp exports are expected to continue increasing in the second half of the year.-

Vietnam, Asia- Pacific trade enjoys sound performance

Trade with the Asia-Pacific region made up 61.8 percent of Vietnam’s total trade value in the first half of 2014.

According to the Ministry of Industry and Trade (MOIT), Vietnam’s export value was 32.26 billion USD, up 12 percent year on year while imports were 53.8 billion USD, up 10.1 percent compared with the first six months of 2013.

The export values to Northeast Asia (excluding China), Southeast Asia and Chinese-speaking markets were 10.2 billion USD, 9.4 billion USD and 10.6 billion USD, respectively.

Meanwhile shipments to the Oceania markets, including Australia and New Zealand, brought in a modest 1.98 billion USD, however, this figure represents a year-on-year rise of 21.3 percent, the highest growth rate among Asia-Pacific sub-regions.

On the import side, Vietnam purchased goods worth 25.4 billion USD from Chinese-speaking markets during the first half of this year, up 16 percent from last year.

Northeast Asia (excluding China) came second with 16.1 billion USD, followed by Southeast Asia, which exported goods worth 11 billion USD to Vietnam in the first half of 2014.

Vietnam’s imports from these two sub-regions increased by 4.5 percent and 4.3 percent, respectively, compared with the first half of 2013.

During that same period, Vietnam’s imports from Oceania markets surged by 28.9 percent to reach 1.2 billion USD.

According to the MOIT, Vietnam’s exports to the ASEAN rose slightly by 3.6 percent as shipments to major markets fell short of expectations.

Exports to Malaysia and Cambodia declined by 21 percent and 15 percent respectively while shipments to Thailand recorded a small increase of 4 percent.

PM approves long-term transportation plan

Prime Minister Nguyen Tan Dung has issued a decision to approve the transport ministry's restructuring project on sustainable development through 2020.

Under the project, the market share for inter-provincial cargo and passenger road transport would increase to 54.4 per cent and 93.2 per cent, respectively, by 2020.

Public transport and key transport infrastructure constructions would receive priority from the State, according to Sai Gon Giai Phong (Liberated Sai Gon) newspaper.

By 2015, 600 km of expressway will be built. Expansion of the National Highway No1A from Ha Noi to Can Tho would be completed by 2016.

The project also targets restructuring railways by transporting large volumes of cargo on medium- and long routes, and passengers on medium-distance journeys and public transport within mega cities.

Railway infrastructure management and railway transport business will be separated in the near future.

The current North - South railway system will be upgraded and modernised. In addition, high-speed railway sections on the North - South system will be built.

There will also be a connection between the Central Highland provinces and seaport system in the central provinces, and a Trans-Asia railway will be studied.

The plan also calls for an increase in market share of national seagoing vessels for import – export commodity from 25 to 30 per cent.

By 2020, the market share for marine cargo shipping would increase to 21.25 per cent, meeting 94.3 per cent of international cargo shipping and 8.55 per cent of domestic inter-provinces cargo transport volume.

The national seaport system and international gateway ports in key economic zones will also receive more investment.

International investors will be encouraged to develop the Van Phong international transit port in the central province of Khanh Hoa.

For aviation, the government wants to increase market share for low-fare airlines, and promote domestic aviation cargo, which is closely linked with international and regional cargo aviation.

In addition, international passenger transport via air is planned to grow up to nearly 46 per cent in traditional markets like Southeast Asia, Northeast Asia, China and Australia.

The aviation sector will promote cargo aviation connections to South Asia region, Eastern Europe and former Soviet Union nations. It will also open more new routes to Europe, North America, America Latin and Africa.

International airports like Noi Bai, Tan Son Nhat, Da Nang, Cam Ranh and Can Tho will receive investments for upgrading.

The plan also calls for a new policy to encourage foreign investment in the Long Thanh International Airport.

Equitisation of national carrier Viet Nam Airlines will take place this year and the Government will keep 75 per cent of registered capital and 65–75 per cent of stocks.

As for local traffic, land for transportation will take up 16 – 26 per cent, and public transport will continue to be developed. Personal vehicles in Ha Noi and HCM City will be restricted.

HCMC needs 17,000 workers in August

Employers in HCMC are predicted to need about 17,000 laborers next month, according to the HCMC Center for Forecasting Manpower Needs and Labor Market Information (FALMI).

The demand for manual workers and workers of intermediate vocational level is the highest with approximately 5,100 in each segment, while the demand for college graduates is estimated at 4,250 people. The demand for skilled workers and those of basic vocational level makes up the balance.

Tran Anh Tuan, deputy director of FALMI, said employers will still focus on recruiting employees with skills and qualifications in the final months of this year. Therefore, new graduates from colleges and universities should equip themselves with useful knowledge and skills to meet enterprises’ demands.

In the third quarter, the city’s labor demand is estimated at 55,000 in a wide range of areas including manufacture, business – retail/wholesale and information technology (IT), the last-named sector needing more skilled workers due to the expansion of the foreign IT companies in Vietnam.

Tuan estimated the city will need 150,000 laborers in July-December, in which the demand for seasonal workers is estimated at 40,000.

The labor demand will continue to rise in the sectors of business, services, textile-garment, leather-footwear, tourism, consulting and real estate.