Customs to reduce clearance time for import and export goods

The General Department of Vietnam Customs has set out specific goals for 2017, including efforts to reduce clearance time by 70 hours for exports and 90 hours for imports, whilst offering 100% public services online at level 3 or above, and 70% of the key sectors’ public services at level 4, the highest of the four online public service levels.

The observance of administrative procedures on the national OSS customs mechanism in recent times has brought about practical results.

The move is part of the customs sector’s efforts to implement Government Resolution No. 19-2017/NQ-CP dated February 6, 2017 on main tasks and measures to improve the country’s business environment and enhance national competitiveness in 2017, with orientations towards 2020.

It is a tough challenge and requires huge efforts to realise the abovementioned targets, aiming to improve Vietnam’s ranking from 93rd position to below-82nd place in terms of clearance time for cross-border trade transactions (as rated by the World Bank) in 2017.

Enhancing the quality of specialised inspection work over import and export goods is an immediate measure with considerable impacts for reducing clearance time, which should be taken into account by the customs sector. This step has received the most “criticism” from businesses due to its inadequacies leading to prolonged cargo clearance time.

First of all, it is of urgent need to design and issue a full list of goods items under specialised inspection in orientation towards narrowing the scale of inspection, reducing the list of goods subject to inspection, detailing codes of dossiers and applying the principle of risk management in inspection work.

The sector should also shift from inspection during the clearance process into post-clearance inspection, whilst issuing national technical regulations and standards for goods subject to specialised inspection, which will be used as a premise to evaluate the quality of products and commodities.

Training needs to be offered to the Customs Inspection Department and its branches so that they are able to proactively engage in analysis, examination and specialised inspection activities conducted over a number of imports and exports, on the basis of legal regulations on quality examination and the authorisation of relevant specialised management ministries.

Encouraging the socialisation of specialised inspection over imports and exports, in order to meet the target of reducing cargo clearance time, is also a feasible solution at present.

The observance of administrative procedures on the National One-Stop-Shop (OSS) mechanism in recent times has brought about practical results. However, in reality, enterprises still want the customs sector to further expand administrative formalities and incorporate tax, cost and fee e-payment services on the national OSS mechanism, thus helping businesses to save time and reduce costs, as the majority of required dossiers have been simplified and electronised.

Mediplast’s injection needle factory starts operation     

The Medical Plastic Joint Stock Company (Mediplast) on Thursday launched the first phase of a medical plastic factory in the northern province of Bac Ninh’s Dai Dong Industrial Park.

The move comes after Mediplast’s merger with Vietnam Medical Equipment Corporation (Vinamed) in May this year.

The factory was built in November 2016, focusing on producing one-time injection needles, single-use K1 syringes, various kinds of insulin syringes, butterfly needles and infusion sets.

General Director of Mediplast Hoang Minh Dung said the factory’s products serve the domestic healthcare sector and foreign countries and territories including Ukraine, Japan, Nigeria, Laos and Taiwan (China).

With an area of 13,000sq.m and more than 200 workers, the factory is expected to help Mediplast enhance its production capacity, develop new products, meet demand for healthcare tools in Viet Nam and become a supplier for international organisations. 

VN, Taiwan discuss renewable energy     

Viet Nam has great potential in renewable energy, but the Government should have suitable mechanisms and policies to encourage investment in the field, a seminar heard in HCM City on July 28.

Dr Nguyen Anh Tuan, director of the Renewable Energy Centre, said theoretically Viet Nam’s has a renewable energy -- biomass, biogas, wind, and solar -- potential of 9.1 million MW through its technical potential is only 385,708 MW.

The Government’s revised power development plan VII approved last year set a target for renewable energy for around 7 per cent of total generation by 2020 and 10 per cent by 2030.

It now accounts for a very small proportion though it is increasing, he told the seminar titled Green Energy Insights: Viet Nam and Taiwan’s Trends and Development.

Talking about challenges, he said the huge initial cost of renewable energy is the key hurdle in Viet Nam.

Besides, tariffs are not very attractive for renewable energy, and there is difficulty and uncertainty in system connections, a shortage of skilled professionals and engineers in the field, lack of information/reliable database for assessing the potential of renewable energy sources and a potential constraint on land resources, he said.

He suggested that the Government should develop suitable mechanisms and policies to promote the renewable energy industry.

A renewable energy fund to support solar, wind and biomass projects and organising training courses in co-operation with universities to train skilled engineers are also needed, he said.

Karen Ma, director of Taiwan’s Green Trade Project Office, said demand for green and renewable energy has increased globally.

There is very good potential for green energy development in ASEAN, including Viet Nam, she said.

Taiwan targets a rate of 20 per cent from renewables by 2025, she said.

Organised by the Viet Nam Chamber of Commerce and Industry and Taiwan External Trade Development Council (TAITRA), the seminar sought to acquaint Vietnamese companies with global trends in green development and renewable energy opportunities in Viet Nam, photovoltaic technology, use of lithium ion batteries in green energy, and other technologies.

According to TAITRA, the Taiwanese green energy industry has been growing steadily, and today the island ranks second globally in the production of solar cells.

Both Viet Nam and Taiwan are working on green energy development, and the seminar is expected to promote co-operation between the two sides in the sector, it added. 

Imexpharm terminates distribution contract with IMGSA Group

Imexpharm Pharmaceutical Joint Stock Company, Vietnam's fourth biggest pharmaceutical firm, will not extend the distribution contract with its foreign partner IMGSA Group in the future.

In Resolution No.32/NQ-HDQT-IMEX released on July 27, the firm said that members of the Board of Directors did not approve to the extension and will then terminate this contract. 

According to a VIR source, under the contract, IMGSA helped distribute Imexpharm's (IMP) products abroad, including the EU and Portugal.

Though the foreign partner wants to extend the contract, it did not reach an agreement with IMP.

IMP made a net revenue of over VND500 billion ($22.7 million) from sales and services during the first half of 2017, up 16.5 per cent on-year, while its gross profit rose 28.84 per cent on-year to VND213.38 billion ($9.69 million).

IMP has three foreign shareholders: Balestrand Limited (6.09 per cent), Franklin Templeton Investment Funds-Templeton Frontier Markets Fund (8.49 per cent), and Kwe Beteiligungen AG (8.23 per cent).

Imexpharm is developing two new factories, the VND370 billion ($16.8 million) Binh Duong high-tech pharmaceutical plant and the VND180 billion ($8.2 million) Vinh Loc high-tech antibiotic plant. Both are scheduled to be put into operation in late 2018.    

The drug maker aims to increase its revenue by 23 per cent and pre-tax profit by 19 per cent in 2017. "We will focus on the on-going construction of the two new plants, returning to the ethical channel market, developing our distribution network, and boosting exports," Nguyen Quoc Dinh, chairman of IMP's Board of Directors, told VIR.

Petrolimex and VNR boost comprehensive cooperation

Vietnam National Petroleum Group (Petrolimex) and Vietnam Railways (VNR) will strengthen cooperation in investment and business activities in the future.

Petrolimex and VNR signed an agreement today to comprehensively boost cooperation and fully exploit their existing advantages.

Under the agreement, VNR will prioritise using Petrolimex's petrol products. Regarding transportation services, the two sides will study the possibilities of connecting railway routes and petroleum storages.

VNR and Petrolimex also agreed to study the former's infrastructure system and select reasonable locations for investment and the development of petroleum stations.

The two companies will also cooperate in banking and financial services, insurance, and the promotion of brand names, among others.

"With specific cooperation projects and support from the Ministry of Transport and the Ministry of Industry and Trade, the cooperation will bring fruitful results," Petrolimex chairman Bui Ngoc Bao said.

"The comprehensive cooperation between VNR and Petrolimex will help the two sides to tap into their own potential and advantages, thus increasing added value and developing each other," added VNR chairman Vu Anh Minh.

At the event, units of VNR and Petrolimex signed cooperation agreements, including one between Petrolimex Paints Company Limited and Railway Transport and Trade Joint Stock Company (Ratraco), and another between Petrolimex Hanoi Co., Ltd. and Ratraco. Additionally, PG Bank also signed agreements with Saigon Railway Transport Company and Hanoi Railway Transport Joint Stock Company.

Petrolimex is Vietnam's biggest petroleum distributor. The petroleum giant currently holds 44 per cent of the domestic oil market, with over 50 per cent of its products directly sold to consumers and around 20 per cent directly sold to industrial customers. This extensive distribution network and over 50 years of experience in petroleum trading secure Petrolimex’ huge market advantage.

In 2016, Petrolimex’s consolidated net revenue was VND123 trillion ($5.46 billion) and pre-tax profit reached VND6.3 trillion ($279.4 million), up 68 per cent compared to 2015. 

The railway industry is undergoing a comprehensive revamp with many major tasks ahead, including upgrading the current railway system to maximise its potential and preparing financial resources for the North-South high-speed railway project, which will be submitted to the National Assembly (NA) in 2018. VNR is eyeing co-operation with domestic and international groups to realise its future development plans.

Templeton Frontier Markets Fund cuts ownership rate in DHG

A group of foreign investors related to Luxembourg-headquartered Templeton Frontier Markets Fund have reduced its ownership rate in Vietnam’s biggest publicly traded drug maker, Hau Giang Pharmaceutical JSC (DHG), by 0.53 per cent to 10.55 per cent.

DHG now has Taisho Pharmaceutical Holdings, one of the five biggest pharma firms in Japan, as a big foreign shareholder with 24.5 per cent, followed by FTIF Templeton Frontier Markets Fund. SCIC is the biggest stakeholder with 43.3 per cent.

As Vietnam’s biggest publicly traded drug maker, DHG pulled in consolidated net revenue of over VND1.8 trillion ($81.8 million) in the first half of 2017, up 7 per cent on year.

According to Viet Capital Securities Joint Stock Company (VCSC), DHG's in-house sales in the first half of 2017 grew a mere 2 per cent year-on-year. Sales did not recover as well as were expected following a weak first quarter 2017, which was partly disrupted by a change in DHG’s delivery model.

Major product lines such as painkiller (Hapacol) and antibiotics (Klamentin) posted low single-digit growth in the first half of 2017 compared to the first half of 2016. Best performers were vitamin supplements, with some products growing double-digits, but this category only contributed less than 10 per cent to total sales.

DHG’s lackluster sales in the first-half of 2017 could be attributed to stiffening competition in the over-the-counter (OTC) channel amid a lack of product differentiation, customers, retailers, are still adapting to DHG’s new delivery model that requires larger but less frequent orders and some production lines were put on pause in the half of 2017 as required by the upgrade of the effervescent line to Pharmaceutical Inspection Co-operation Scheme (PIC/S) standards. 

"Though the effective tax rate should rise going forward, it has trailed our expectation. Apart from a production ramp-up at the new tax-free factories, a deferred tax of VND11 billion ($0.5 million) created a net tax benefit of VND8 billion ($0.4 million) in the first half of 2017. We expect effective tax rate to rebound in the second half of 2017 and 2018 as an upgrade of the effervescent line (Hapacol) to PIC/S requires a relocation of the vitamin supplement line back to its old factory, which has no tax break," said Dao Nguyen, VCSC senior analyst.

UPCoM ignores Ha Bac Fertiliser

Two days after being listed on the Hanoi Stock Exchange (HNX)’s UPCoM trading platform, Ha Bac Nitrogenous Fertiliser & Chemicals JSC (Hanichemco)’s shares still see little to no transactions.

On July 26, Hanichemco (ticker DHB) made 272.2 million shares, representing a registered capital of VND2.71 trillion ($119.2 million), officially available for trading at the initial reference unit price of VND6,800.

The reason investors are turning away from the company’s shares is that it has taken massive losses in recent years. Notably, in 2015 alone, the company suffered losses worth VND700 billion ($31.3 million), while the figure in 2016 was VND1.05 trillion ($46.2 million). As of the first quarter of this year, its accumulated losses reached VND1.94 trillion ($85.3 million).

The company started making losses after expanding its production facility, upgrading its capacity to 500,000 from the initial 180,000 tonnes per year, in June 2015.

A subsidiary of state-run Vietnam National Chemical Group (Vinachem), Hanichemco specialises in manufacturing urea nitrogenous fertiliser, which makes up 80 per cent of its revenue.

However, in recent years, the domestic demand for urea fertiliser fell far short of supply, leading to extremely imbalance. Besides, the domestic fertiliser manufacturing sector also needs to compete with imported products, especially cheaper Chinese ones.

Vinacomin divestment sees avid foreign interest

National Coal and Mineral Industries Group (Vinacomin) plans to decrease its holding in Vinacomin-Power Holding Corporation to 65 per cent from the current 99.68 per cent.

According to Dang Thanh Hai, general director of Vinacomin, investment funds and both foreign and domestic enterprises operating in the power sector may join the purchase. At present, numerous foreign investors from Japan, Thailand, China, and Singapore have expressed interest in Vinacomin-Power Holding Corporation’s shares.

Vinacomin and Vinacomin-Power Holding Corporation will organise meetings with investors in the third quarter of 2017 and expect to conduct the transaction in the fourth quarter.

Vinacomin-Power Holding Corporation currently has the chartered capital of VND6.8 trillion ($298.98 million), equaling 680 million shares with a price of VND10,000 apiece. Thus, the divestment would involve 235.81 million shares worth VND2.36 trillion ($103.75 million).

Operating under the joint stock company form since January 15, 2016, Vinacomin-Power Holding Corporation owns seven power plants with a total capacity of 1,730MW. Besides, Vinacomin-Power Holding Corporation contributes capital to three other power plants, with holdings from 5-10 per cent.

Specifically, the compnay has developed Na Duong 2 thermal power plant in the northern province of Lang Son. Once completed in 2018, the plant, which has a total investment capital sum of $192 million, will have a capacity of 110MW, generating 650 million kWh of electricity each year and helping ensure a stable power supply for Lang Son and other northern border provinces, as well as national energy security.

In 2016, Vinacomin-Power Holding Corporation earned a pre-tax profit of VND244 billion ($10.7 million). The figure of the first half of this year was VND261 billion ($11.5 million).

Hard Rock interested in developing casino at Laguna Lang Co

US-based casino operator and hospitality business Hard Rock International Inc. has confirmed its interest in developing a casino at Laguna Lang Co integrated resort complex in the central province of Thua Thien-Hue, according to newswire GGRAsia.

Daniel Cheng, Hard Rock’s senior vice president for casino business development in Asia, told GGRAsia that Hard Rock has finished all site studies and completed all project financing. All the company is waiting for is the Vietnamese government to issue the casino license after which Hard Rock can put the spade to the ground immediately.

Earlier in July 2014, Singaporean resort developer Banyan Tree Holdings sought the provincial leaders’ approval to build a casino in the complex, claiming the step would play an important role in the development of Laguna Lang Co Resort, the company’s first project in Vietnam.

However, provincial leaders answered that the Ministry of Finance (MoF) was in the middle of drafting the nation’s first legal framework for casino businesses, bidding the developer to wait until the National Assembly ratified the decree.

On March 14, 2016 during the joint work session of the Thua Thien-Hue People’s Committee and MoF, Thua Thien-Hue laid out the plans for Laguna Lang Co Resort’s casino to Minister of Finance Dinh Tien Dung. Dung said he supported Banyan Tree Holdings’ casino proposal because he believed it would benefit both the province and the developer.

Starting operations in March 2013, the $900-million Laguna Lang Co Resort is located near Lang Co Bay, framed by a three-kilometre beach in Chan May region. This development includes Banyan Tree and Angsana hotels and spas, an 18-hole championship golf course designed by Nick Faldo, private villas and residences available for sale, convention facilities, and a plethora of recreational activities for guests of all ages.

In June 2015, Thua Thien-Hue proposed that the prime minister add the province’s Chan May-Lang Co Economic Zone to the list of areas allowed to have casinos in the country.

It said Chan May-Lang Co was one of the country’s key coastal economic zones, having numerous advantages to become an international centre for trade, residential areas, and resorts. Therefore, adding the casino business to the manifold advantages of Chan May-Lang Co would further contribute to its development into a tourism centre.

In January, the government issued Decree No.03/2017/ND-CP on casino business, which took effect in March this year. Accordingly, eligible investors wishing to invest and operate in services, tourism, and entertainment businesses with casinos must invest a minimum capital of $2 billion and submit plans to manage the negative impacts of casino operations.

Such enterprises can provide a casino in only one location and this must be separate from other business areas of entertainment.

According to MoF statistics, Vietnam has licensed eight casinos so far, all of which open to international punters and foreign passport-holders exclusively. They include operating casinos in Haiphong city, and Quang Ninh and Lao Cai provinces in the north, Danang city in the central region, and Ba Ria-Vung Tau province in the south.

Taiwan eyes Vietnamese healthcare sector

Taiwan is increasing its focus on the Vietnamese healthcare sector with a view to promoting quality healthcare services and smart healthcare solutions in the country.

Representatives of the Taiwanese healthcare sector visited Taiwan Expo 2017 to promote cooperation

Angela Chang, manager of the Taiwan External Trade Development Council, said that most state hospitals in Vietnam are overcrowded, which leads to long waiting times, a shortage of beds, and increased risk of cross-infection among patients.

Over the past two years, more than 2,000 Vietnamese patients have travelled to Taiwan to seek treatment. The number of Vietnamese patients, most of whom seek treatment for cancers and rare diseases in Taiwan, has increased dramatically.

Taiwan is an emerging destination for Vietnamese patients besides Singapore and Thailand. Taiwan is known for qualified medical services with affordable costs, going for roughly one-fifth of the cost of healthcare in the US and Europe. There are over 17 JCI-accredited healthcare centres and hospital in Taiwan.

In addition, Taiwan has integrated technology innovations into healthcare systems to reduce patient waiting time and improve treatment quality. Some initiatives include intelligent disaster-prevention information system and remote healthcare model.

“Taiwan wants to export these solutions to overseas markets like Vietnam. Also, we are looking to tighten partnership between Taiwan and Vietnam to improve local healthcare services,” she said.

To facilitate the goal, a delegation of 13 Taiwanese companies in the field of healthcare and medical equipment have visited Vietnam to showcase their state-of-the-art healthcare equipment and solutions at Taiwan Expo 2017. Some notable companies in the event are UNITECH Electronics, Energy On Things, Sofiva Genomics and, Netown.

Taiwan eyes Vietnam's healthcare sector

In addition, the delegation also holds a seminar titled “Miracles in Taiwanese Healthcare” to provide an insight into the Taiwanese healthcare sector. The seminar invited Vietnamese patient Nguyen Thi Loan, who was successfully treated for her rare disease in Taiwan.

Moreover, the delegation also visited Taiwanese hospital Shing Mark in the southern province of Dong Nai. The newly-established hospital has around 180 beds for patients and is slated to reach the full capacity of 2,000 beds by 2020. The hospital is expected to tighten partnership between Vietnam and Taiwan in the healthcare sector. 

On this occasion, UNITECH LIGcare granted a smart healthcare system to Shing Mark hospital to improve the experience of Vietnamese patients.

Chang noted that this is the fourth time they visited Vietnam to explore the market. Most firms are looking for local partners and distributors to supply healthcare solutions and equipment.

FMCG growth slows in Q2

Nationwide growth in fast-moving consumer goods (FMCG) slowed in the second quarter of this year after reaching a record in the first quarter, according to the latest report from Nielsen released on July 28.

FMCG growth reached 5.8 per cent year-on-year in the quarter, mainly driven by an increase of 5 per cent in volume growth.

All six super FMCG categories nationwide saw growth.

Food and milk-based products grew 8.1 per cent, homecare 5.7 per cent, beverages 5.4 per cent, personal care 5 per cent, and cigarettes 4.7 per cent. Compared to the first quarter, however, all grew at slower rates.

Beverages still accounted for a large proportion of total FMCG sales in the second quarter, at 42 per cent. Food, cigarettes, and milk-based products accounted for 16 per cent, 15 per cent, and 14 per cent, respectively.  

“After impressive growth in the previous quarter due to increasing demand in the Lunar New Year period, FMCG growth then slowed,” said Mr. Nguyen Anh Dung, Director, Retail Measurement Services, at Nielsen Vietnam. “It’s thought that this is merely due to the low season after Tet. However, we should keep an eye on growth over the remainder of 2017, as the market in Vietnam has fluctuated noticeably in the last two years.”

He added that manufacturers must get out of their comfort zones and tap into new markets to manage any fluctuations in growth and drive sustainable business.  

The report also revealed that rural areas continue to show great potential for many manufacturers. While urban areas saw 5.1 per cent growth year-on-year in the quarter, rural areas grew 6.5 per cent, mainly led by volume growth, and contributed 57.5 per cent to total FMCG sales.

Mr. Dung emphasized that over 60 per cent of Vietnam’s population live in rural areas and this presents excellent opportunities for companies. Urbanization, internet access, and smartphones have changed the lives of rural consumers and brought them closer to their counterparts in towns and big cities, making them live in a diversified media world.

More surprisingly, rural consumers are willing to pay more for products of higher quality. There is therefore space for new products to step into these far-flung markets. “There’s never been a better time for manufacturers to take advantage of today’s rural reality to expand their business and seize the growth opportunities,” he said.

Leading global solar cell manufacturer opens Vietnam plant

The GCL System Integration Technology Co. (GCL-SI), a leading global solar manufacturer, has announced that its solar cell plant in Vietnam with 600 MW of production capacity began operations on July 27.

The plant will be a powerhouse in GCL-SI’s production for the global market, sharpening the solar energy group’s competitive edge in the world, especially in the US and European markets.

Mr. Shu Hua, President of GCL-SI, said that the plant’s launch is the latest step in the company’s development strategy. It is now working on promoting its global competitiveness and building an international image for its brand. “GCL’s high-efficiency PERC production line in Vietnam, based on localized management, will offer strong support to highly-efficient cell supply and contribute to lowering costs and voiding anti-dumping issues,” he said.

The cooperation between GCL-SI and Vina Cell is considered a customization for GCL-SI, especially its PERC production.

Mr. Dong Shuguang, Executive Director of GCL-SI, said the company has been working on improving the efficiency of its Polysilicon PERC products in recent years. By the beginning of 2017, it had achieved an average efficiency of 20.3 per cent for Black Silicon PERC products. The result is estimated to surpass 20.5 per cent by the end of 2017. The average power output for this model is close to 290W, meeting the latest standards of Top Runner.

In 2016, following the Belt and Road Initiative, Chinese solar companies have established ultramarine factories in more than 20 countries, with over 5 GW of capacity. Exports to India, Turkey, Chile, Pakistan, and other emerging markets have expanded, while falling 30 per cent in Europe and the US, which has further impacted on the anti-dumping issue.

Chairman of GCL, Mr. Zhu Gongshan, has on many occasions encouraged Chinese solar energy companies to “team up to march overseas and to gain a more advantageous position in foreign markets.” This is a strategic move in line with the Belt and Road Initiative and will also make the company better poised for a wider range of opportunities in the global market.

GCL System Integration Technology Co. (Shenzhen stock 002506), is part of the GOLDEN CONCORD Group (GCL). It delivers a one-stop, cutting-edge, integrated energy system and is committed to becoming the world leading solar energy company.

7M trade deficit at $3.1bn

The latest figures from the General Statistics Office (GSO) reveal that Vietnam’s trade deficit in July reached $300 million and nearly $3.1 billion in the first seven months of the year, equal to 2.7 per cent of exports.

During the first seven months, the trade deficit incurred by the domestic sector totaled $14.7 billion while the foreign-invested sector (including crude oil) continued to run a trade surplus of $11.69 billion.

Excluding price factors, export turnover in the first seven months rose 18.7 per cent year-on-year to $115.2 billion, with exports by the domestic sector totaling $32.2 billion, a 14.6 per cent increase, while those of the foreign-invested sector (including crude oil) reached $83.1 billion, an increase of 20.3 per cent.

Excluding crude oil, exports by the foreign-invested sector were $81.26 billion, up 20 per cent year-on-year and accounting for 70.53 per cent of total export turnover.

Import turnover in July was $17.8 billion, down 1.6 per cent year-on-year, with imports by the domestic sector totaling $7.1 billion, down 2.2 per cent, and those by the foreign-invested sector reaching $10.7 billion, down 1.2 per cent.

Excluding price factors, import turnover in the first seven months rose 24 per cent year-on-year to $118.3 billion, with imports by the domestic sector totaling $46.9 billion, an 18.4 per cent increase, while those of the foreign-invested sector were $71.3 billion, an increase of 24 per cent.

During the January - July period, most of Vietnam’s key import items soared, particularly imports of phone and components, which reached $1.7 billion, an increase of 30.6 per cent, crude oil $943 million, up 32.3 per cent, and machinery, equipment, and spare parts $5.8 billion, an increase of 37.4 per cent.

Vietnam anticipates a trade deficit of $5 billion for the year as a whole, equal to 2.5 per cent of exports, which is under the level permitted by the National Assembly, according to the Ministry of Industry and Trade (MoIT). Export turnover is estimated at about $200 billion, an increase of over 13 per cent against 2016 and exceeding the target, while imports are predicted at $205 billion, a 17 per cent increase year-on-year.

During the remaining months of this year, MoIT plans to tighten control over goods whose importation is discouraged and facilitate local manufacturing, to bridge the trade deficit.

Vietnam’s trade deficit estimated at US$3.1 billion in seven months

Vietnam’s merchandise trade deficit widened to an estimated US$3.1 billion in the first seven months of 2017, equivalent to 2.7% of exports, according to the latest data released by the General Statistics Office (GSO).

During the period, exports rose by 18.7% to US$115.2 billion while imports came in at US$118.3 billion, up 24%.

The GSO confirmed that domestic enterprises ran a deficit of US$14.77 billion while the foreign sector, including oil exporters, recorded a surplus of US$11.69 billion.

The first seven months of 2017 continued to see steady growth of Vietnam’s main exports, with phones and components up 15% to US$22.6 billion, garments up 8.1% to US$14.2 billion and footwear up 12.9% to US$8.4 billion.

Other key exports such as machinery, seafood, timber and coffee also posted strong growth.

The United States remained the largest consumer of Vietnamese goods at US$23.4 billion, followed by the EU and China at US$21.5 billion and US$15.5 billion respectively.

Conversely, Vietnam’s major imports in the January-July period were machinery, electronic devices, fabric, steel, plastics and chemicals.

In the first seven months of 2017, China still accounted for the largest share of Vietnam’s imports at US$31.7 billion, up 15.8% year on year. The Republic of Korea and ASEAN came second and third with US$26.7 billion and US$16 billion respectively.

HCMC’s trade deficit reaches billions of US dollar

HCMC’s export value was up 15.1 percent over the same period last year to reach US$20.1 billion while import hiked 18.1 percent to hit $24.2 billion in the first seven months this year, reported director of the Department of Planning and Investment Su Ngoc Anh on Friday.

Chairman of the HCMC People’s Comiittee Nguyen Thanh Phong chairs a meeting on socioeconomic situtation on July 28 (Photo: SGGP)

Chairman of the HCMC People’s Comiittee Nguyen Thanh Phong chairs a meeting on socioeconomic situtation on July 28 (Photo: SGGP)

He was reporting at a meeting on socioeconomic situation presided over by chairman of the city People’s Committee Nguyen Thanh Phong.

The city’s exports strongly increased to Singapore, Malaysia, India, Spain, Thailand and China but slowed down to the Philippines, Indonesia and Italy.

Major import items comprise equipment and materials for local production. Of these, electronic products and comportments increased nearly 36 percent, metals rocketed 40 percent and plastic materials hiked 18 percent.

Total retail sales of goods and services reached VND527,310 billion ($23.21 billion).

Leaders of the Department of Tourism said that the city received 3.2 million international visitors in the first seven months, a year on year increase of 16 percent. Especially, the city reported a raise of tourists from Asia and North Asia during off peak season this year. Still the increase in HCMC was lower than other provinces and cities in the northern and central regions where received a huge number of Chinese visitors.

Director of the Department of Finance Phan Thi Thang said that the city’s budget revenue hit VND201,950 billion in the first seven months, accounting for 58 percent of estimates and surging over 13.6 percent over the same period last year.

During the seven months, the city spent VND25,590 billion ($889 billion) including VND8,570 billion on development investment and over VND16.2 trillion on regular spending. At present, investors are focusing on disbursing capital for works and projects, said Ms. Thang.

Ms. Thang reported some highly rising revenue sources such as personal income tax reaching VND8,280 billion, up 21 percent over the same period last year. Land and water face rent topped VND2,980 billion raising over 18 percent.

According to director of the Department of Industry and Trade Pham Thanh Kien, some industries posted high growth rate. For instance, motor vehicles hiked 29 percent and electric equipment soared 25 percent.

HCMC saw trade deficit during the first seven months because goods were also imported to the city for other provinces and cities. Import items mainly served production not consumption, said Mr. Kien.

In the upcoming time, the industry will rush up goods preparation for the coming new academic year and the Tet holidays. So far, 8,000 businesses have registered to attend 30,000 promotional programs ahead of the holiday. These are expected to contribute in raising service and trade income for the city to get development targets this year.

Commercial banks lower loan rates after SBV’s reduction

After the State Bank of Vietnam (SBV) decided to cut short term loan interest rates by 0.5 percent and management interest rates by 0.25 percent from July 10, commercial banks have started lowering their rates.

VPBank reduces 1% interest rate for businesses in five priority fields (Photo: SGGP)

VPBank reduces 1% interest rate for businesses in five priority fields (Photo: SGGP)

Many banks have announed loan interest rate cut for businesses operating in five priority fields stipulated by SBV including agricultural and rural development, exports, small and medium enterprises, support industry and hi-tech.

Specificially, Vietcombank has slashed short term rates by 0.5 percent for loans in the Vietnamese dong. VPBank has launched a preferential package to help super small and startup enterprises access loans with flexible procedures.

PvcomBank has applied the preferential rate of from 7.5 percent a year.

Meantime, some commercial banks have reduced loan interest rates for businesses in and outside the five priofity fields. Saigon Commercial Bank has cut the rate by 0.5 percent to all types of loans. ACB has provided a VND7 trillion credit packge for production and trading enterpries with lower than before interest rate in the two remaining quarters this year.

Mr. Nguyen Hoang Minh, deputy director of SBV in HCMC said that HCMC’s credit growth approximated 10 percent at the end of June compared to last yearend. Banks’ interest rate cut will boost credit growth in the second quarter so it might reach 18 percent at the end of 2017.

ATM cards can be used to buy gasoline from August 1

Vietnam National Petroleum Group (Petrolimex), National Payment Corporation of Vietnam (NAPAS) and Petrolimex Group Commercial Joint Stock Bank (PG Bank) yesterday signed a cooperation agreement on ATM card payment at Petrolimex filling stations.

From August 1, customers of 41 banks who are members of NAPAS can use their ATM cards to purchase gasoline at point of sale machines at 2,361 filling stations nationwide.

According to the National Traffic Safety Committee, Vietnam now has over 47 million motorbikes and three million automobiles. A huge number of these vehicles are filling Petrolimex gasoline.

Japanese firms seek to penetrate consumer goods market

Many Japanese companies have come to Vietnam to look for local partners to distribute consumer goods such as noodles, dried fruits, confectionery and seafood.

Thirty-five Japanese firms joined a business matching session with local firms as part of the Vietnam-Japan Business Connecting Program in the fields of agriculture and seafood, which was held Wednesday by the Japan External Trade Organization (JETRO) in Vietnam.

Takimoto Koji, head of JETRO in HCMC, told the Daily that the business networking event attracted such a large number of Japanese businesses, indicating that Japanese firms are increasingly interested in the Vietnamese market. 

Hideo Ogata, business development director of Itsuki Foods which produces healthy Japanese noodles, said Vietnam with a large and young population and a fast-growing economy is an ideal place for the company to boost sales.

Some of the company’s products are currently available at AEON supermarkets and FamilyMart convenience stores, Ogata said.

Kota Ishimaru, a representative of Fukuoka Mitsuya Company, a maker of confectionery from peas, said the company has exported its products to regional markets like Hong Kong, Thailand and Singapore but this is the first time the Japan-based company had come to the business matching session to look for Vietnamese distributors.

Some Japanese companies said Vietnam has an increasing demand for clean and safe goods, so this is a great opportunity for them to enter the market.

Many large retailers, convenience store operators and restaurants from Japan are now active in Vietnam, allowing Japanese products to make their way to the Vietnamese market.

Some 78 products of 32 Japanese companies are now on the shelves of around 200 FamilyMart and Mini Stop stores in the country. However, their prices are relatively high.

HCMC tax revenue grows strongly

Production and business activities have recovered in HCMC this year, thereby boosting tax collections, especially from domestic enterprises, said Le Duy Minh, deputy head of the HCMC Tax Department.

Minh said on the sidelines of a meeting on the city’s financial and commercial performance on July 27 that the taxman has collected around VND188 trillion (around US$8.3 billion) in January-July, with domestic tax revenues rising 16% to VND130 trillion over the same period last year.

The city government’s effort to assist local enterprises in their production operations, especially startups, has paid off. Minh said the city has had more than 700 household businesses upgraded into firms, plus 22,000 newly-established companies.

The city, he asserted, is poised to obtain its budget collection target of VND347.8 trillion (US$15.3 billion).

At the meeting, the city’s vice chairman Tran Vinh Tuyen told relevant departments and agencies to continue making production and business conditions favorable, and improving online public services.

The municipal government is taking more measures to prevent tax losses. Notably, the city will find ways to force online retailers, particularly those on social media, to file for taxes.

Nguyen Hoang Minh, deputy director of the HCMC branch of the State Bank of Vietnam, said at a meeting of the HCMC People’s Council early this month that the city looked set to translate its 2017 growth target of around 8.4-8.7% into reality given the stability of the monetary and gold markets, positive capital mobilization and economic restructuring.

Tax collections from online stores make little headway

The HCMC Tax Department began collecting taxes from online stores two months ago but only 10% of store owners have come to the agency to file for taxes.

Speaking to Vietnamnet news website, department vice head Le Thi Thu Huong said as of July 19, among 13,500 vendors active on the social networking site Facebook, 910 had filed and paid taxes while the remainder were nowhere to be found.

The department has sent SMS messages to 11,000 online sellers to remind them of tax obligations while local tax offices have sent 5,300 tax payment requests to individuals and organizations selling goods on Facebook and other social networks. However, only 1,206 have reached the taxman.

According to the department, 643 online stores with annual revenue of VND100 million (about US$4,400) or above each must pay taxes.

In Binh Thanh District, a mere 18 of 677 online sellers invited have dropped by the district’s tax office. The district has collected only VND16 million in taxes from 52 individuals, meaning that each online seller paid over VND300,000 a month. 

Le Thi Thu Huong said initial results are modest but these are positive signs. Some people selling goods on Zalo and Youtube have come to tax offices asking for information and advice although they did not receive invitations.

According to Huong, collecting taxes from online sellers is tough as cash on delivery is a widely preferred method of payment for online transactions. Therefore, she proposed collecting taxes via bank cards.

Prior registrations with FDA required for shipments to U.S.

As Vietnamese exporters are still in the dark about new U.S. food safety requirements, a few of them register with the Food and Drug Administration (FDA) before their goods are shipped to America.

This is why Vietnamese products have been denied entry or confiscated at U.S. ports, according to Tuoi Tre newspaper.

At a conference “Dealing with FDA’s new import requirements” in HCMC on Tuesday, Nestor Scherbey, senior advisor to the Vietnam Trade Facilitation Alliance, said Vietnamese exporters are still struggling to meet the U.S. food safety standards.

In the 2014-2016 period, 896 shipments of Vietnamese agricultural products were denied entry into the U.S. while 718 Thai farm produce shipments were refused. Vietnam’s total food and farm produce exports to the U.S. in this period reached US$5.77 billion while Thailand's totaled US$6.84 billion.

Notably, a 38-ton shipment of frozen Swai fish of Vinh Hoan Corporation was denied entry into the U.S. market after it failed in a Food Safety and Inspection Service (FSIS) inspection.

The FDA Food Safety Modernization Act (FSMA) requires foreign exporters to perform certain risk-based activities to make sure that food imported into the U.S. meets U.S. safety standards.

Scherbey suggested Vietnamese exporters have plans to identify and evaluate hazards for each type of food they export, including biological and chemical hazards, pesticide residues and natural toxins.

There is a list of banned substances released by FDA, so exporters must ensure their products are free from these substances.

Exporters will also have to meet FDA’s rules on Foreign Supplier Verification Programs (FSVP).

FSMA requires exporters to provide names, email addresses and unique facility identifiers (UFI) recognized as acceptable by FDA for each line entry of food product offered for importation into the U.S. FDA will then give exporters a Data Universal Numbering System (DUNS) number as an acceptable UFI for FSVP, but it does not mean that exporters have passed FDA’s inspections.

Goods imports into the U.S. were previously inspected at U.S. ports. But now, according to FSMA, FDA will send its inspectors to exporting countries to carry out pre-inspections at farms and factories.

Registrations must be complete before producers begin to produce, process, package or store products. Documents must be submitted to FDA before shipments arrive at U.S. ports and registrations must be repeated every two years.

Herb Cochran, executive director of AmCham Vietnam in HCMC, said the number of Vietnamese enterprises that have registered to export food to the U.S. has decreased sharply, from 1,845 in December 2016 to 806 in January 2017. The main reason is that Vietnamese exporters have been too slow to meet the U.S.’s new food safety standards.

Over 1,600 enterprises disappear in HCMC

An economic census shows HCMC had had around 196,540 enterprises registered by the end of last year, but 1,620 of them were nowhere to be found traceable.

According to results announced at a conference on July 27 by the steering committee for the 2017 economic census, 160,556 enterprises had remained operational and almost 20,320 had suspended operations. About 14,000 other companies had been waiting for dissolution.

The number of enterprises in the city is determined based on data collected from the HCMC Tax Department, the HCMC Statistics Office, and the HCMC Department of Planning and Investment.

The municipal government had surveyed more than 170,000 companies since mid-March to collect data on the number and qualification of workers, production and business results, levels of information technology application, and structure and allocation of facilities and workforce.

The census did not cover household businesses in agriculture, forestry and fisheries, whose information was already collected in a 2016 rural and agricultural survey, as well as foreign diplomatic missions, embassies, consulates and organizations.

City vice chairman Le Thanh Liem said at the conference that the city had had around 281,000 household businesses by late 2016, but the figure had now risen to over 448,300.

Therefore, Liem said, the local government has plans to transform around 20,000 household businesses, especially those employing more than 10 people each, using receipts, and generating handsome profits, into companies.

Vietnam promotes exports to Australia, New Zealand

Australia and New Zealand have huge potential for Vietnamese products like farm produce, aquatic products, coffee, cashew, computers, telephones and garments, said Nguyen Phuc Nam, deputy director of the Department of Asia-Pacific Market under the Ministry of Industry and Trade at a conference held in Hanoi on July 28.

The ASEAN-Australia- New Zealand Free Trade Agreement (AANZFTA), which took effect from January 1, 2010, plays a key role in enhancing economic relations, trade and investment between ASEAN and Australia and New Zealand, Nam said.

Within the agreement framework, ASEAN countries can enjoy 90 to 100 per cent tariff reductions in Australian and New Zealand markets, and Vietnamese firms should take full advantage of this potential, he said.

He noted that Australia and New Zealand were among the biggest importers in the world since both economies are largely dependent on imported products.

Vietnam’s chief exports to these two markets include agricultural products, seafood, coffee beans, cashews, electronics parts, textiles, footwear and construction material.

If the AANZFTA was utilized well, Vietnamese producers could enjoy all the privileges contained therein, boosting export turnover and earning handsome profits, Nam said.

Statistics from the Ministry of Industry and Trade showed that trade between Vietnam and Australia hit 5.26 billion USD in 2016, up 6.5 percent year-on-year. Particularly, Vietnam enjoyed trade surplus of 480 million USD with Australia in the year.

According to Phan Thi Dieu Linh, expert from the Department of Asia-Pacific Market, although Australian consumers are favoured of locals products, they are still open with imported ones, which have high quality, good looking and rational prices. This factor also facilitates Vietnamese exports, she underlined.

Meanwhile, Trinh Thi Thu Hien from the Foreign Trade Agency under the Ministry of Industry and Trade, stated that there is large room for Vietnamese shipments to Australia as export revenue is still humble, standing at 1.6 percent of total export values in Australia.

Hien said that the AANZFTA is being carried out in the context of deeper regional and global integration which supports the development in Vietnam-Australia and New Zealand relations. Domestic businesses should apply international standards to meet increasing demands of foreign customers and become more competitive with foreign rivals, she highlighted.

Japanese, Vietnamese enterprises seek cooperation opportunities

Japanese and Vietnamese enterprises in the areas of agriculture, fisheries and food gathered at a meeting in Hanoi on July 28, with the aim of seeking partners and business opportunities.

This is the third time the event has been held by Japan External Trade Organisation (JETRO) and the eventattracted the participation of 21 Japanese enterprises including nine that are approaching the Vietnamese market for the first time.

This year’s event focused on products that meet the demands of the Vietnamese people including farm produce, seafood, confectionery, wine, green tea and powdered milk.

At the meeting, Hironobu Kitagawa, chief representative of JETRO Hanoi, said that Vietnam and Japan share many similarities in culinary culture, therefore, the cooperation between the two sides take into account the culture of the two countries.

He noted that Japanese products are well-known for their brands and safety and will offer Vietnamese customers high quality products.

Vietnam is a country with a young population who are eager to enjoy new products thereby providing great potential for the development of Japanese products in Vietnam, Hironobu Kitagawa said.

Meanwhile, Japanese people also wish to purchase agricultural and food products from Vietnam but the Japanese market is demanding with strict requirements, particularly the requirements concerning the quality of products, Hironobu Kitagawa said.

Vietnam ranked seventh among the countries posting high import revenue of agricultural and food products from Japan in 2016.

Last year’s event attracted the participation of 63 enterprises with many large deals being signed in the trading of powdered milk.-

Consistent quality a must for RoK exports

Domestic companies have not taken full advantage of the incentives offered by preferential tariff policies for Vietnamese firms to sell products to the Republic of Korea, according to the deputy director-general of the Asia-Pacific Market Department under the Ministry of Industry and Trade (MoIT). 

Le An Hai said that the RoK could be a great market for Vietnam’s agriculture, forest and fishery exports, but Vietnamese agricultural exports accounted for only a small amount of South Korea’s total agricultural import value, which was around 100 billion USD last year.

Hai spoke at a seminar on promotion of processed Vietnamese food, seafood and agricultural product exports to the RoK held in Ho Chi Minh City on July 28.

Reduced tariffs are available under the Vietnam-RoK Free Trade Agreement, which came into effect in December 2015, and the ASEAN-RoK Free Trade Agreement, offering opportunities for Vietnamese exports.

“Though China is still the most important market for Vietnam’s agricultural products [it imported 16 billion USD worth of Vietnamese agro-forest-fishery products last year], the RoK is one of our top priority markets,” he said.

“Like Japan, Australia and New Zealand, the RoK is a very strict market in terms of required quality for imported products. If we can win over these markets, we can access many other markets more easily,” he added.

According to the General Department of Customs, last year Vietnam imported 32 billion USD of the RoK’s products, up 15.9 percent year-on-year, while exports were worth 11.4 billion USD, up 28 percent year-on-year.

In the first six months of the year, bilateral trade between Vietnam and the RoK reached 29.1 billion USD, up 45.5 percent compared to the same period last year.

The MoIT is launching many efforts to help local firms enhance exports of Vietnamese agro-forest-fishery products to the RoK to achieve bilateral trade value of 70 billion USD by 2020.

Yoon Byung Soo, product strategy director of Korean conglomerate Lotte Mart Vietnam, said that Vietnamese dried mango, dragon fruit, coconut-related products and coffee were favoured by many Korean consumers.

“Since Vietnam has many fruits that the RoK cannot produce, our supermarket chains are very interested in these products,” he said.

Yoon said that bananas were a potential product for the RoK because Vietnamese bananas have good quality and a competitive price similar to the Philippines’, which is a main source of imports for Korea.

“Recently, our team from Korea visited Vietnam and signed a contract to import 100 tonnes of bananas,” he said.

However, he said that Vietnamese banana growers should pay more attention to ensuring consistency in the quality of bananas year-round as well as the hygiene of farms.

Another issue is the hiring of under-aged workers by farmers during harvest season, he said, adding that the owners of the farms could be fined for doing so and the reputation of the buyers could be damaged.

He said that Vietnamese firms should also improve product labels and packaging.

Yoon said that he noticed that some Vietnamese product packaging had colourful labels, but foreign consumers preferred labels with basic colours.

Changing designs of packages could increase sales of products significantly. One example was the new label for Cuc Da tissue, which increased sales by 80 percent in only three months.

Yoon said one of the good points of Vietnamese products was the competitive price. However, to enter a market and win it over, especially through a supermarket chain, the products should be unique.

"If the firms sell the type of products that are very common on the market, they will find it more difficult to compete with others that entered the market before them," he added.

PM sets up economic advisory group

Prime Minister Nguyen Xuan Phuc has established an economic advisory group led by Vu Viet Ngoan, former head of the National Financial Supervisory Commission.

The 14-member team will advise the Prime Minister on mid-term and long-term economic policies and strategies as well as annual socio-economic development plans. 

The advisors will also suggest revisions to current policies and regulations and measures to cope with new domestic and global developments.  

The group includes economists who are working and teaching in France, Japan, Singapore and the US. Vietnam targets an ambitious economic growth of 6.7% this year.

Vietnam catfish exporters worry as US applies tougher inspection procedures

Vietnamese catfish exporters are concerned that the door for their products to enter the US will be narrowed after a new inspection rule takes effect next month.

From August 2, all Vietnamese catfish shipments to the U.S. must be transferred to official import inspection establishments specified by the U.S. Food Safety and Inspection Service (FSIS) for re-inspection before they can be forwarded to importers and sold to American end-consumers.

The requirement is part of a series of new regulations stipulated by the U.S. farm bill, or the Agricultural Act of 2014, that was signed into law on February 7, 2014.

One of the biggest changes in the bill is that Vietnamese seafood entering the U.S. will be required to follow regulations set forth by the FSIS under the U.S. Department of Agriculture, rather than the U.S. Food and Drug Administration (FDA), as was previously the case.

The food safety standard regulated by the FSIS is a big change from the standards applied by the FDA and may take Vietnam many years to adapt to, according to the Vietnam Association of Seafood Exporters and Processors (VASEP).

For instance, according to a 2016 report, the FSIS will require a review of 100 percent of imported products starting September 2017, instead of the only one percent required by the FDA.

Truong Dinh Hoe, VASEP general secretary, told Tuoi Tre (Youth) newspaper earlier this week that the new requirement that catfish exports be re-inspected before delivery to importers to the U.S. will negatively impact Vietnamese exporters.

“It is certain that Vietnamese companies will have to spend more time and money transporting the shipments to the FSIS-specified warehouses and then to their own facilities,” Hoe said.

Duong Ngoc Minh, general director of Hung Vuong, one of Vietnam’s leading catfish exporters to the U.S., concurred with Hoe’s concern, explaining that following the new rule will cost both time and money.

“There are only a little more than 20 warehouses on the FSIS list, which are located across the U.S. and may not be close to seaports where the Vietnamese catfish shipments arrive,” he explained.

Vietnamese seafood businesses are losing sleep over the higher and tougher technical barriers set by the U.S., as the North American country is their largest catfish importer.

However, according to Hoe, the VASEP general secretary, while it cannot be denied that the threat is real, the future is not as gloomy as businesses might think.

“It is unreasonable to say that these new rules will shut the door on Vietnamese catfish entering the U.S.,” Hoe said.

The VASEP official explained that these policy changes were announced well in advance to affected businesses, and Vietnamese exporters did have a window of preparation for the new rules.

Vietnamese businesses and relevant authorities have indeed made moves to embrace the changes, he added.

“Exporters only need to ensure the quality of their products and everything will go on as normal,” he said.

“You have to pass strict inspections no matter which countries you sell your goods to.”

Hoe also rectified allegations that 100 percent of Vietnamese seafood exports to the U.S. will be taken for sample testing.

“The ratio of samples to be taken depends on the inspection history of the exporters,” he said.

“Since the oversight task was transferred to the USDA from the FDA, the ratios were increased to only 20-30 percent, and never 100 percent.

“There will be no such rule as 100 percent of exports must be inspected as Vietnamese businesses fear.”

Minh, the Hung Vuong Co. executive, also said the future is not so bleak.

“Even before the U.S. enacted these new regulations, most Vietnamese seafood exporters still failed to sell their catfish to the market,” Minh said.

There are currently only three Vietnamese companies qualified to export catfish to the U.S. under low anti-dumping duties, while other businesses are slapped with exorbitant tariffs and unable to afford shipping to the U.S.

Vietnam, Japan promote agricultural connectivity

The Japan External Trade Organization (JETRO) on July 28 opened a business matching event in Hanoi to help businesses from both sides seek market opportunity and expansion.

21 Japanese companies participated in the event, the third of its kind, to promote their sales in Vietnam. 

JETRO Chief Representative in Hanoi Hironobu Kitagawa praised close cultural identities between Vietnam and Japan as well as young Vietnamese population in leveraging Japanese latest products. 

He said Japanese people wish to use safe agricultural exports from Vietnam.

State-owned banks’ cash dividends not compulsory     

The Government’s recent decision on the restructuring of credit institutions ensures that State-owned banks listed on the market no longer have to worry about dividend payout in cash, experts said.

Under Decision 1058/QD-TTg issued last week, the Government requires the Ministry of Finance, in conjunction with the State Bank of Viet Nam and the Ministry of Planning and Investment, to help State-owned banks increase their charter capital in the 2016-20 period so that the banks can meet Basel II capital standards by 2020.

Vietcombank, Vietinbank and BIDV are the three listed banks in which the State holds more than 50 per cent of the charter capital. Currently, the banks do not meet the minimum Basel II requirement of 8 per cent for capital adequacy.

However, the three banks have failed to increase their charter capital despite repeated efforts over the past few years. Raising their capital was tough for these banks as they could not use their profits for the purpose; profits would go for cash dividend payout, as required by the finance ministry.

Last year, though at the annual general meetings (AGM) of Vietinbank and BIDV, dividend payout in shares was approved so that money could be used for capital increase, the finance ministry insisted that the banks pay dividend in cash.

The banks had no choice but to follow the ministry’s orders, which helped the State budget earn a revenue of around VND4 trillion (US$175.4 million).

If this continues, as per a proposal circulated during the AGM season in April, the three banks will contribute a total of VND6 trillion to the State budget through dividend payout in cash in 2017.

However, because of the Government’s new regulations, banking expert Phan Minh Ngoc said the finance ministry would not insist on cash dividend payout for the next few years. Of course, the banks could choose to pay dividends in cash if they make profits higher than the approved charter capital increase.

According to the National Assembly resolution on the 2016-20 economic restructuring plan, commercial banks will have equity capital under Basel II standards, in which at least 12 to 15 commercial banks have applied Basel II successfully (above the standard method) by 2020. Meanwhile, a Vietcombank Securities Company report states that the success or failure of the application of these new standards depends primarily on the three State-owned listed banks.

Basel II is a new, higher level for Vietnamese banks in accordance with Basel Accords standards set by the Basel Committee on Banking Supervision (BCBS). The application is flexible to different countries but the overall spirit is tighter regulations on banking operations.

Industry insiders said that the Basel II application in Viet Nam would be a challenge for local banks, however, it was a must as it is believed to be the best solution to make Vietnamese banks healthier. 

International agricultural fertilisers, machinery expo opens in HCM City     

The International Exhibition and Conference on Agricultural Fertilisers, Chemicals and Machinery in Viet Nam opened in HCM City on July 27.

Agro Vietnam 2017 has attracted 80 exhibitors from 10 countries and territories, including Japan, the US, South Korea, Malaysia, China, and Taiwan.

The products on show include a wide range of fertilisers, pesticides, agricultural machinery and chemicals, vegetable and fruit seeds, and other products.

The biennial event will also feature conferences on Viet Nam’s pesticide and fertiliser markets, government regulations on production and export of chemicals and other topics.

Speaking at the opening ceremony, Bui Thị Thanh An, head of the Viet Nam Trade Promotion Agency in HCM City, said the exhibition is a good opportunity for local and foreign enterprises to exchange information and explore business prospects.

It would also help promote investment in the agricultural sector in Viet Nam, she said.

Hoang Trung, deputy director general of the Plant Protection Department, said Viet Nam is a major market for pesticides, with the country importing around 100,000 tonnes of both technical and formulated pesticides a year for the past three years.

Some companies import technical pesticides to formulate products for domestic use and exports, he said.

Organised by Minh Vi Exhibition and Advertisement Services Co Ltd, China National Chemical Information Center and China Crop Protection Industry Association., the exhibition at the White Palace Convention Centre until July 28 is expected to welcome 3,500 visitors. 

VCA to terminate temporary anti-dumping duties on H-shaped Chinese steel     

Viet Nam Competition Authority (VCA), under the Ministry of Industry and Trade (MoIT), has announced the termination of temporary anti-dumping duties on H-shaped steel imported from China.

On October 5, 2016, MoIT issued Decision 3993/QĐ-BCT on conducting an anti-dumping investigation into H-shaped steel products imported from China.

Later on, the temporary anti-dumping duties on H-shaped Chinese steel were imposed at MoIT’s Decree No 957/2017/QĐ-BTC published on March 21, 2017.

Under that decree, the anti-dumping duties ranged from 21.18 per cent to 36.33 per cent and would be in effect between April 5 and August 2, 2017.

Starting August 3, 2017, the temporary anti-dumping duties on H-shaped Chinese steel will expire. The investigation is currently in the final phase and scheduled to complete in August 2017.

VCA advises concerned parties on the possibility of adopting official anti-dumping measure that continues or replaces the current one. Thus, enterprises should actively consider ensuring the efficiency of their own production and business activities.

Viet Nam’s corn imports to continue     

Viet Nam imported 3.53 million tonnes of corn in the first half of this year, up 5.6 per cent over the same period last year, according to the Crop Production Department.

Last year 8.5 million tonnes had been imported, a year-on- year increase of 9.5 per cent, with Argentina, Brazil accounting for 47.2 per cent and 41.2 per cent of the imports.

The imports this year are expected to match last year’s, the department said.

The area under corn in Viet Nam reached 1.15 million hectares last year, with output being 5.24 million tonnes, the department said.

According to the Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD), about eight million tonnes, mostly from imports, are used every year to produce animal feed.

The rest is directly used for food, food processing and producing bio-energy, it said.

IPSARD has forecast that demand for corn used to produce animal feed is expected to increase to 9 million tonnes by 2020, and the country will continue to rely on imports.

With high production cost and low yields, domestic output is unable to compete with imports, it said.

Besides, taxes on corn imports are likely to decline in the future.

The country hopes to have 1.16-1.26 million hectares under corn cultivation by 2020 and 950,000-1.1 million hectares by 2025, and output of 5.4-5.8 million tonnes and 4.8-5.5 million tonnes a year, respectively.

The sector would focus on measures to cut production costs and improve competitiveness, it said.

Based on the national master zoning plan for corn production, cities and provinces need to review their corn zoning plans, and the zoning plans must connect production with purchase, processing, preservation, and consumption, it said.

Hybrid corn varieties with high productivity, quality and protein and resistance to pests, cold, drought and others need to be created to improve value addition, it said.

Localities should co-operate with businesses to produce F1 hybrid strains to meet the demand for seeds, it said.

The sector needs to complete the extensive farming technical package to apply in practice to raise productivity, cut costs and improve competitiveness, it said.

The department also encouraged businesses, especially animal feed production companies, to establish close links with corn farmers and co-operatives to buy fresh corn at main growing areas as well as invest in drying system to help farmers dry their products to improve product quality.

In Viet Nam, corn is an important food crop after rice, especially for people in mountainous areas.