Asia – emerging market for Vietnamese shrimp exports

The Vietnam Association of Seafood Exporters and Producers (VASEP) held a seminar on world shrimp demand and Vietnam’s supply capacity in Ho Chi Minh City on August 29.

At the function, Carson Blake Roper, an expert on the EU market, cited a UN report on global urbanisation prospects as saying most of the world’s densely populated countries will be in Asia, which is expected to see a rapid expansion of the middle class and free trade agreements.

The region will also have higher demand for high-protein food, including shrimp and fish, he added.

Le Van Quang, head of Minh Phu Group boards of directors, forecast shrimp consumption in Asia to surge, particularly in China, despite its shrimp productivity having shrunk.

According to VASEP statistics, in the first seven months of this year, Vietnamese shrimp exports to China, Japan and the Republic of Korea respectively increased 40, 35.2 and 27.4 percent from the same period last year.

Experts said Vietnamese exporters need specific strategies for each market.

Roper advised these firms to build supply chains and refrigeration systems in Asian target markets, adding that improved infrastructure will help boost their competitiveness.-VNA

LG supplier denied import tax refund

On August 18, the Ministry of Finance (MoF) issued Official Dispatch No.11080/BTC-TCHQ to answer a motion by Serveone Vietnam Co., Ltd. (SOVN) on the import tax reimbursement process for the materials the company imports for LG Electronics Vietnam’s (LGE) production of export products.

Article 9(1d) of Law on Export and Import Duties No.107/2016/QH13 states that, “Taxpayers shall have their tax payments reimbursed” after “goods serving as raw materials or supplies imported for the production of export goods for which import tax has been paid.”

Article 36(3) of Government Decree No.134/2016/ND-CP on guidelines on the Law on Export and Import Duties states that the criteria for eligibility for the tax refund are the following:

The manufacturer of exported goods has a factory where the goods in question are manufactured in Vietnam. Additionally, the manufacturer owns or has the right to use machinery and equipment at a factory suitable for the raw materials, supplies, and component products imported for manufacturing;

The value or quantity of imported raw materials, supplies, and components after which import duties are refunded is the actual value or quantity of raw materials, supplies, and components used for the manufacturing of the exported products; The exported products are declared as domestic exports; The manufacturer directly imports goods and exports the products or authorises another entity to do so.

MoF concluded that SOVN does not meet any of the outlined criteria and is therefore not eligible for reimbursement.

SOVN is a 100 per cent South Korean-invested company, a subsidiary of Serveone Co., Ltd. (a member of LG Corporation), which was formed as a satellite company to support LG’s production in the northern port city of Haiphong. SOVN acts as the procurement agency for LGE, importing materials and selling only to LGE at a price that does not include import tax.

Based on this, SOVN saw no difference between its business with LGE and a normal export producer eligible for import tax reimbursement, as stated in Article 19 of the Law on Export and Import Duties. On July 18, SOVN sent Official Dispatch No.18072017/SOVN to the Government Office to request the PM’s consideration and inquire about the reimbursement process, which was later relayed to MoF.

In the dispatch, SOVN cited MoF’s Official Dispatch No.16224/BTC-TCHQ dated November 7, 2014 addressing New Viet Dairy JSC, a supplier of Vinamilk. New Viet Dairy is also a company that imports goods to then sell them to Vinamilk for export production at prices that do not include import tax. In this case, MoF concluded that New Viet Dairy was eligible for the tax reimbursement and instructed the company to finish submitting the tax refund documents.

In 2015, LG Electronics opened an 800,000-square-metre manufacturing complex in Haiphong, with a total investment sum of $1.5 billion to be disbursed between 2015 and 2028. This complex has helped Vietnam to become one of the largest electronics export hubs in the world, with 70 per cent of the complex’s products exported to 35 countries worldwide in the next five years.

However, the partnership with LGE is not all smooth sailing, as earlier this year, the General Department of Vietnam Customs has requested LGE to pay tax arrears and an additional fine of VND8.1 billion ($356,341) in total.

Legion of unexpected bad debts sends Vinawaco reeling

Vietnam Waterway Construction Corporation (Vinawaco) is currently in hot water due to continuous revelations of enormous losses and debts from before its equitisation.

Vinawaco has just sent two urgent dispatches to the Ministry of Transport (MoT) and the Hoan Kiem District (Hanoi) Division of Civil Judgement Enforcement requesting to speed up the valuation of state capital at the moment of its equitisation (May 30, 2014) and delay the forced debt collection for two judgements pronounced by the Haiphong People’s Court in 2016 and the Ho Chi Minh City Peoples’s Court in 2004.

“These two requests are actually linked together, since only when MoT determines the amount of state capital at the time of equitisation will we have a basis to pay the company’s liabilities in accordance with the law,” said Ngo Van Tuan, chairman of the board of Vinawaco.

In particular, regarding the VND560 million ($24,634) debt to Minh Duong Company, according to the judgement of the Haiphong People’s Court in 2016 (Case No.18/KDTM-PT), Tuan said Vinawaco is prepared to pay the amount to a temporary holding account appointed by the court, but asked to wait until the company completes the second valuation of state capital and finishes the handover from state-owned enterprise to joint stock company.

Meanwhile, regarding the VND7 billion ($307,930) debt pronounced by the Ho Cho Minh City People’s Court in 2004 (Case No.284/CNTT-TT), Vinawaco argued that the company is not accountable to pay since this debt was never mentioned when MoT approved the company’s value for equitisation. Furthermore, this debt belonged to No.2 Waterway Dredging Company, a special accounting unit with its own legal status in which Vinawaco is only a shareholder with 20 per cent of the chartered capital.

According to Vinawaco’s leader, the constant revelation of debts and losses from the previous management period is becoming a nightmare. Most recently, a 22-year-old debt of VND53 billion ($2.3 million) from Vietcombank was unearthed in September 2016, after Vinawaco received information on bad debts at Vietcombank amounting to VND12.6 trillion ($554.2 million).

“The revelation that Vinawaco has bad debts at Vietcombank damaged the company’s reputation and business plan, especially in accessing credit and applying for performance and payment guarantees,” Tuan said.

Vinawaco explained that according to documents provided by Vietcombank, this debt is the arrears from when the corporation received handover for three cargo ships in 1995.

However, Vinawaco also affirmed that the company performed debt reduction accounting in 2005 and has not received any debt reconciliation records from its Ho Chi Minh City branch, thus there is no payable to Vietcombank in Vinawaco’s business valuation records for equitisation published by MoT.

Aside from the sudden revelation of the debt to Vietcombank, in just three years since equtisation, Vinawaco has discovered at least 14 losses and debts totalling at VND137 billion ($6 million).

Most of these debts and losses were confirmed by independent accounting firm BDO Audit Services Co., Ltd. for the period between receiving the first business license and business valuation (July 1, 2013 to May 29, 2014).

The most notable of these debts and losses are payable to six clients, including VND66 billion ($2.9 million) in bad debts to banks and unfinished costs totalling at VND38.2 billion ($1.7 million) from 25 construction works prior to 2013 that do not correspond with revenues, which are irrecoverable and were rejected by the tax departments of Hanoi and Haiphong.

“All of these liabilities were either missing in the business valuation record for equitisation or were listed at lower value than the actual payables. Since the state holds 30 per cent of Vinawaco’s charter capital, or VND109.8 billion ($4.8 million), the state capital will actually be negative VND30.3 billion ($1.3 million) after these debts are processed,” Tuan said.

It is worth mentioning that since 2016, Vinawaco has more than once requested MoT to promptly revaluate state capital in the company at the time of equitisation, but so far, three years after equitisation, the revaluation has yet to be completed.

Previously, in November 2016, in the instructions on handling the differences between the statistics of independent auditors and tax agencies, the Ministry of Finance has requested MoT to quickly determine the causes and responsible parties for these unusual differences.

Vinawaco’s leader said that the company is in hot water as the Hoan Kiem District Division of Civil Judgement Enforcement has frozen its assets as well as requested Thanh Hoa Bypass BOT to cease payment for Vinawaco’s construction work in the project for foreclosure.

“Our strategic partners, Infrastructure Development and Construction Co., Ltd. (currently holding 30 per cent of the chartered capital), and other big shareholders (holding 30 per cent of the chartered capital in total) wish MoT would promptly finish dealing with these financial problems before handing the right to represent ownership of state capital to State Capital Investment Corporation,” Tuan said.

Vung Ang attracts investments after Formosa incident

Businesses have successfully resumed operations in the Vung Ang Economic Zone in Ha Tinh Province after the Formosa pollution incident last year.

Vung Ang Economic Zone was established in 2007 as Vietnam's steel and thermal power centre. It also had a deep water port. It attracted 118 out of 182 investment projects to the province’s economic and industrial zones including 69 domestic projects valued at VND48.3trn (USD2.1bn) and 49 foreign projects worth USD11.6bn.

Some of the most notable projects are USD1.6bn Vung Ang 1 Thermal Power Plant and USD10.8bn Son Duong Port and Integrated Steel Mill Complex. These projects were intended to play an important role in the economic development and help ensure the country's steel and energy security. It has also contributed hugely to the provincial budget. In 2010, it contributed VND719bn (USD31.6m) and VND7.5trn five years later.

However, after the Formosa pollution incident in June 2016 that killed tonnes of fish in the four central provinces, it has been difficult to attract investment and the development process of various projects slowed down.

The authorities of Ha Tinh Province have issued orders to resume key projects and held dialogue with potential domestic investors while inviting foreign investors to Vung Ang. Ha Tinh’s authorities have also tried to provide skilled employees for businesses.

In the first six months, Vung Ang Economic Zone management consulted 1,900 people about job opportunities, an increase of 18.75% compared to last year, and introduced 891 people to various projects, an increase of 64.08% on last year.

Since early 2017, many projects resumed and five new projects with an investment of over VND1.6trn (USD70.4m) were given investment permits.

Hundreds of people returned to their jobs as Human City Company continues the VND1.5trn five-star hotel and office building project. Several investors from Germany, South Korea, Japan and the US have visited and have researched harbour investment projects.

Coal development plan announced

Prime Minister Nguyễn Xuân Phúc recently approved the adjustment and supplementation of the Việt Nam coal industry development plan until 2020, with a vision towards 2030.

Accordingly, the coal sector will invest in constructing new coal sorting factories by 2020, namely Vàng Danh 2, Khe Than, Khe Chàm and Lép Mỹ, with annual capacity of two million tonnes, 2.5 million tonnes, seven million tonnes and four million tonnes, respectively.

In addition, a centralised coal processing and warehouse centre will be built in the Hòn Gai region with capacity of some five million tonnes per year. The first module with annual capacity of 2.5 million tonnes in Hà Khánh Commune will be built and operation of the Nam Cầu Trắng coal sorting factory will be maintained until the end of 2018. The factory will then be moved to the location of the centralised coal processing and warehouse centre to be installed as the second module with capacity of 2.5 million tonnes per year.

The categories of some small-scale projects in the mines of Vàng Danh, Năm Mẫu, Suối Lai and Cọc Sáu, as well as Đèo Nai, Lộ Trí and Mông Dưong, will also be amended, alongside the categories of a number of infrastructure investment projects that serve coal industry development.

Earlier, under Decision No 403/QĐ-TTg, dated March 14, 2016, the PM ratified the adjustment of the development plan of Việt Nam’s coal industry until 2020 with a vision towards 2030, with the view to building the coal sector into a developed industry with high competitiveness and advanced technological standards in comparison with regional countries with regard to the steps of coal exploration, mining, sort out, processing and use, sufficiently satisfying domestic coal demand, especially for power generation.

A report from the Việt Nam National Coal and Mineral Industries Group (Vinacomin) revealed that in the first half of this year, coal output was estimated at some 20.6 million tonnes while coal inventory was 9.3 million tonnes.

The inventory is expected to be higher as the PM required Vinacomin to produce additional two million tonnes to contribute to the country’s GDP growth rate this year.

Trúc Lâm Zen Quảng Nam tourism project needs new investors

Quảng Nam Province authorities have called for new investors for the Trúc Lâm Zen Quảng Nam tourism project in Phú Ninh District after the initial investor – Ba Vàng Liability Limited Company – withdrew from the project due to financial difficulties.

Vice chairman of the provincial People’s Committee Lê Văn Thanh said the project owner, which broke ground in the second quarter of 2016, could not allocate funds to continue the project, and they faced difficulties in planning, land clearance, land-use rights, environment protection, and infrastructure investment.

Thanh said the project, which covers 200ha with total registered investment of VNĐ1 trillion (US$44.2 million), was scheduled to finish its first stage in the first quarter of 2017, but the investor failed to complete the progress.

The vice chairman said the project was included in the provincial master plan as a combined eco-tourism centre in the province and central Việt Nam.

Thus far, Quảng Nam has attracted 135 foreign direct investment projects with registered capital of nearly $5.5 billion.

German bank considers loans for projects in HCM City

Chairman of the Ho Chi Minh City People’s Committee Nguyen Thanh Phong has expressed his wish to continue receiving support from the KfW Development Bank of Germany in KfW-funded projects in the city. 

During a working session in Ho Chi Minh City on August 29 with KfW Country Director Christian Haas, Phong said the city agrees with KfW’s proposal regarding an additional loan worth 200 million EUR for key routes of metro line No.2 and pledges to work closely with the Finance Ministry and KfW on the loan. 

About a project on non-refundable aid for the metro line No.2 provided by the European Commission (EC), the municipal railway management board proposed a sum worth 6 million EUR. The EC will decide on the proposal soon. 

Haas said KfW will also provide a 200 million EUR loan for a policy support project in Vietnam, which will be disbursed in 2017 and 2018, adding that the lender offers different incentives to such loan packages, which have been submitted to the Finance Ministry and the municipal Finance Department. 

According to the municipal railway management board, the Prime Minister on August 28 signed a decision to extend the duration for the construction of the metro line No.2 until late 2020. 

Regarding adjustments to the key routes of the metro line No.2, the municipal authorities sent documents to concerned departments and agencies and will report to the PM, it added.

RoK group invests in renewable energy power in Quang Binh

Dohwa Engineering Company Limited from the Republic of Korea (RoK) has began construction of a renewable energy power complex in Le Thuy district of the central coastal province of Quang Binh.

The 55-million-USD project includes sub-projects of generating 550MW of solar power, 100MW of biomass power and building resort areas and water parks.

In the first phase, the Korean group will construct a solar power plant with a capacity of 49.5MW.

The project is expected to be put into operation at the end of 2018.

678.4 million USD registered for solar power projects in Tay Ninh

The People’s Committee of southwestern Tay Ninh province has proposed the Ministry of Industry and Trade add 15 solar power projects to the provincial planning scheme on electricity development from 2011-2015, with a vision through 2020.

According to the committee, since June 2017, enterprises have asked for the province’s permissions to build 15 solar power plants, worth a total of 15.4 trillion VND (678.4 million USD). The projects have a designed combined capacity of 554 MW and will be implemented from 2017-2019.

The Mien Trung Energy Joint Stock Company wants to invest over 1.3 trillion VND (57.2 million USD) in a 50 MW solar power plant on 60 hectares around Dau Tieng lake in Tan Chau district, while the Bien Hoa-Thanh Long One-Member Co. Ltd. plans to build a 30 MW solar power plant, worth 736 billion VND (32.38 million USD) on 37 hectares in Thanh Long commune, Chau Thanh district.

The TTC Green Energy Company registered to use over 110 hectares in An Hoa commune, Trang Bang district, to build two solar power plants, with a combined capacity of 94 MW, worth over 2.43 trillion VND (106.92 million USD).

The Asia Polytechnic Company also wants to use 120 hectares in Dau Tieng lake to build two solar power plants with a combined capacity of 60 MW, worth over 1.5 trillion VND (66 million USD).

Nguyen Thanh Ngoc, Vice Chairman of the provincial People’s Committee, said Tay Ninh has huge potentials for solar power development, with the solar radiation reaching 5.1kWh/square metre per day, and the average sunshine duration of 2,400 hours per year. 

The projects in extremely disadvantaged areas of Suoi Ngo commune in Tan Chau district, and Thanh Long commune in Chau Thanh district are eligible to enjoy investment incentives.

Vietnam Airlines, Vietnam Post sign cooperation deal

The Vietnam Airlines Corporation (Vietnam Airlines) and the Vietnam Post Corporation (Vietnam Post) on August 29 inked a cooperation pact to enhance their operation efficiency and mutual support for further development.

Under the terms of the agreement, Vietnam Post will expand ticket agents of Vietnam Airlines at its transaction points and provide financial postal and deliver services for Vietnam Airlines.

Meanwhile, Vietnam Airlines will serve as a provider of flight tickets and postal deliver services for Vietnam Post. Vietnam Airlines will help Vietnam Post introduce insurance services to its staff. The two sides will also coordinate to promote communications, brands and products on their channels and publications.  

A contract on transporting goods by air was signed at the event, marking the first step to realise the freshly-inked agreement. 

Deputy Minister of Information and Communications Nguyen Minh Hong highly appreciated the cooperation between Vietnam Airlines and Vietnam Post, hoping that the agreement will benefit both sides, contributing to the development of the two companies and the country as a whole. 

Meanwhile, Chairman of the Board of Directors of Vietnam Airlines Pham Ngoc Minh said the deal is hoped to create mutual strengths of major businesses in Vietnam, thus enhancing economic effectiveness of state-run enterprises.

Deputy PM hails EuroCham’s policy recommendations

Deputy Prime Minister Vuong Dinh Hue said that policy recommendations in the EuroCham’s White Book, especially those pertaining to improving competitiveness and legal frameworks, have important value.

The Vietnamese Government is determined to reform comprehensively the business environment and raise the national competitive edge, Hue stressed at his reception for Chairman of the European Chamber of Commerce in Vietnam (EuroCham) Jens Ruebbert in Hanoi on August 29.

He spoke highly of EuroCham’s efforts in boosting the economic cooperation between Vietnam and the European Union (EU), as well as in publishing the White Book 2017 and its enthusiastic involvement in dialogues and policy-making consultancy with the Vietnamese Government.

He showed his delight that the EuroCham’s members are upbeat and have belief in the business and investment environment in Vietnam, suggesting the agency to listen carefully to its members’ voice and promptly convey them to the Vietnamese Government for proper responsive adjustments. 

EuroCham Chairman Jens Ruebbert said apart from publishing the White Book 2017, European businesses are interested in green and sustainable growth and continue building and publishing the Green Book in the coming time.

EuroCham opinioned that the EU and Vietnam should soon finalize the signing work for the EU-Vietnam Free Trade Agreement (EVFTA) to be enforced and it will spare no effort to urge the EU to ratify the agreement “as soon as possible” for the interests of businesses and people, he said.

At their meeting, host and guest discussed matters relating to Vietnam’s animal quarantine, regulations and standards on milk and milky production to be imported into Europe, import and export of pharmaceuticals, and tax levies on alcohols and wines, and more.

HCM City’s CPI rises 0.5 percent in August

The consumer price index (CPI) in the southern largest economic hub of Ho Chi Minh City in August rose 0.5 percent from the previous month and 3.63 percent over the same period last year, reported the municipal Statistics Office on August 29.

According to the office, the prices of six out of 11 surveyed goods groups saw month-on-month increases, with the highest surge of 2.53 percent seen in transport.

The prices of food and catering services went up 0.6 percent, while the prices of culture, entertainment and tourism services increased by 0.3 percent. 

The prices of housing, electricity, water, fuel and construction materials rose 0.28 percent; education up 0.12 percent; other goods and services 0.04 percent from July. 

According to the municipal Statistics Office, the prices of home appliance dropped 0.12 percent, and drinks and cigarettes fell by 0.08 percent. 

The prices of medicine and healthcare services; telecommunication; garments, hats and footwear remained unchanged.

In August, the gold price increased 0.08 percent, while that of US dollar dropped 0.11 percent month-on-month.

Vietnam agricultural opportunities huge: Australian Minister

Agricultural cooperation opportunities, particularly increasing joint-venture investments between Vietnam and Australia are absolutely huge, Assistant Minister for Agriculture and Water Resources Anne Ruston told Fairfax Agricultural Media on August 28.

The Australian Centre for International Agricultural Research has invested nearly 100 million AUD in over 170 collaborative research projects in Vietnam, ranging from livestock production to policy development, food safety, fisheries and forestry, she said.

Vietnam is really open to Australia in agricultural investment, she underscored.

Australian and Vietnamese two-way farm trade is currently worth 2.8 billion AUD with Australian agricultural exports to the growing market valued at about 1.5 billion AUD in 2016-2017, comprising 712 million AUD in grains, oilseeds and pulses and 242 million AUD in feeder and slaughter cattle exports.

She expressed her delight at her trip in coincidence with the agreement between the two nations on shipping Australian cherries to Vietnam and Vietnamese dragon fruits to Australia.

During her Vietnam visit, Ruston also attended the opening of the Thanh Nhan Abattoir in line with Australian standards. She described the facility as a “genuine example” of Australia’s commitment to mutual prosperity and the best possible outcomes, across the entire supply chain.

Vietnam-Laos trade, tourism fair opens in Son La

The Vietnam-Laos trade and tourism fair opened in Moc Chau district, the northern province of Son La on August 29 as part of the Moc Chau ethnic cultural festival in 2017.

The week-long fair is billed as a significant political, economic and social event to promote people-to-people exchange and friendship between Son La province and Laos’s northern localities.

It also creates opportunities for enterprises from both sides to seek business potential and partners as well as enlarge trade relations.

The fair features over 140 booths displaying staples of domestic businesses and those from Houaphanh and Luang Prabang provinces. Particularly, two booths are arranged to popularise Son La’s culture and tourism products.

In a bid to ensure safety for the fair, Moc Chau district has asked relevant authorities to promote security, prevent fires and explosion as well as increase environmental hygiene. 

Moc Chau Plateau is the largest of its kind in the country, with an average altitude of 1,050 metres. The area has a temperate and fresh climate all year round with many beautiful spots and historical relics.

Together with community tourism services, dairy cow farms and high-tech flower farms have been popular tourism hubs. Visitors can enjoy local delicacies like grilled stream fish and sticky rice cooked in bamboo tubes.

Tourism sector focuses on quality development

Tourism development in the coming time must focus on improving quality of products to obtain sustainable development and high competitiveness.

Deputy Minister of Culture, Sports and Tourism Huynh Van Ai made the statement at a workshop in Hanoi on August 29.

He said Vietnam’s tourism has seen strong growth in recent years with the reception of 10 million international tourists and over 62 million domestic holiday makers in 2016. The total revenue was estimated at over 400 trillion VND (17.6 billion USD).

In 2017, Prime Minister Nguyen Xuan Phuc has set the target of attracting 13 million -15 million foreign visitors and posting year-on-year growth of 30-50 percent, he said.

This is an ambitious goal, which requires maximum efforts of all sectors and people to turn the tourism sector into a spearhead economy.

Head of the Vietnam National Administration of Tourism Nguyen Van Tuan said Vietnam served over 8.47 million overseas holidaymakers in the first eight months of 2017. 

According to the evaluation of the World Economic Forum for 2015-2017, Vietnam’s tourism competitive edge increased eight places to rank 67 out of the 136 global economies.

The country is moving to build itself as a safe and environmentally-friendly destination to lure more visitors both at home and abroad in the future.

Strong marketing strategy needed to bolster tra fish exports

A stronger marketing strategy coupled with substantial improvement in tra fish quality is needed to bolster the export of the fish as rough seas are still ahead for this product, experts said.

Incorrect and defamatory information broadcast by foreign media hurt Vietnamese tra fish exports in the second quarter of the year, To Thi Tuong Lan, Deputy General Secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), said.

The smear campaign targeting Vietnamese tra fish resulted in a decrease in the shipments to many European countries in Q2. Exports to Spain experienced the sharpest fall of 67 percent in the period, she added.

However, the situation has improved greatly in the third quarter, after a series of actions taken by domestic tra fish exporters. They set up websites in Spanish, English, Dutch and Italian to provide their target consumers with sufficient information on fish products, from cultivating to packaging processes, as well as nutrition ingredients in each product. Facebook, Twitter and Instagram also served as effective channels to persuade foreigners to choose Vietnamese tra fish.

The moves help Vietnamese tra fish export gain a year-on-year increase of 8.2 percent to over 1 billion USD in the first eight months of the year. Shipments to the EU went up 23 percent, China 43 percent, Brazil 58 percent and the US 8.4 percent.

Along with improving prestige for Vietnamese tra fish through the media, scientific articles and research papers published internationally also play a crucial role, Lan highlighted. 

“There are only 21 articles about Vietnamese tra fish made public on foreign websites and media system while the number of those on the US cod is over 2,000”, she said.

On the other hand, to ensure fish product quality, the Government has also issued Decree 55/2017/ND-CP regulating standards for tra fish farming, processing and exports.

The Ministry of Agriculture and Rural Development also joined hands with the Ministry of Science and Technology to build a national catfish programme and pilot a high value production chain, which proved its success at the Vinh Hoan group in the Mekong Delta province of Dong Thap.-

New collateral rules good for VN banks: Moody’s

The speedy repossession of collateral is a credit-positive step for Vietnamese banks, which continue to grapple with legacy asset-quality issues caused by rapid credit growth and loose underwriting standards of the past decade, Moody’s Investors Services said in a note on August 28.

Previously, because of rules and a cumbersome, lengthy legal process, it took banks and the Vietnam Asset Management Company (VAMC), a State-owned company that specialises in buying non-performing loans (NPLs) from banks, several years to repossess collateral.

Because of lack of clarity in the country’s laws on collateral repossession, the VAMC’s cumulative NPL recovery rate has been low at around 20 percent.

However, on August 15, the National Assembly enacted Resolution 42/2017/QH14 that permits banks and the VAMC to deal with NPLs by rapidly repossessing collateral in the event of borrower default.

“The ability to repossess collateral is a critical next step in resolving NPLs, and we expect Resolution 42, which removes previous legal impediments, to help improve the rate of collateral repossession by banks and the VAMC,” Moody’s noted.

The new regulation also rebalances the bargaining power of banks and the VAMC vis-à-vis borrowers.

The effectiveness of the regulation is apparent in the VAMC’s first repossession of collateral for an NPL, which it completed in just one week after Resolution 42 took effect. On August 21, the VAMC repossessed Saigon One Tower in downtown HCM City.

Investors kicked off the 5 trillion VND (220 million USD) Saigon One Tower project in 2007, and construction was slated to be complete by 2009. However, the project dragged on and construction came to a standstill in 2011 when 80 percent of the work was over. The investors had incurred around 7 trillion VND in debts.

However, Moody’s noted, though banks can reduce their reported NPLs by offloading problem loans to the VAMC, the banks’ asset quality and profitability will improve only if and when the VAMC successfully sells the repossessed assets.

Ratio of short-term funds for long-term loans to be revised

The State Bank of Vietnam (SBV) is adjusting for the second time the roadmap to apply the maximum ratio of short-term funds used for medium- and long-term loans.

According to a new draft circular to revise Circular No 36/2014/TT-NHNN on regulating prudential ratios for credit institutions and foreign bank branches, the maximum ratio of short-term funds used for medium- and long-term loans will be at 45 percent in 2018 and 40 percent in 2019.

This is the second time the roadmap for the ratio is being revised.

The first amendments to the circular were made in May last year with the ratio reduced from 60 percent in 2016 to 50 percent from January 1, 2017 to December 31, 2017. It will drop to 40 percent from the beginning of 2018.

The SBV said the second adjustment is based on its assessment and scrutiny of the country’s economic indicators in the first months of 2017 as well as the Government’s macroeconomic regulation direction in the last months of the year.

The new draft circular has been made public on the SBV’s website for recommendations.

Earlier, during a regular Government meeting in May, Prime Minister Nguyen Xuan Phuc issued a resolution in which he directed the SBV to consider and adjust expansion of the credit limit for medium- and long-term loans of credit institutions.

The Government has also affirmed that the capital adequacy ratios applied for credit institutions and foreign bank branches that participate in programmes and projects under the Government’s instruction will be different from the average ratio. For example, for the lending programme on encouraging development of the hi-tech agriculture industry, Deputy Prime Minister Vuong Dinh Hue has asked the SBV to consider the proposal of commercial banks to not include medium- and long-term loans for the programme in the maximum ratio of short-term funds used for medium- and long-term loans mentioned above.

According to the SBV, the medium and long-term capital source should be supplied via the securities channel, but in Vietnam, this source of capital is still mainly mobilised via the banking channel.

The SBV’s statistics revealed that medium and long-term loans still account for 53-55 percent of the total loans, while medium- and long-term mobilised capital is only 13-15 percent of total mobilised capital.

The SBV is concerned it is a risk for the banking industry if there is an imbalance in the ratio of short-term capital for medium- and long-term loans.

Fish and seafood expo opens in HCM City

A three day expo showcasing primarily fish and fishery products of Vietnam running Aug. 29-31 has opened as planned at the Saigon Exhibition and Convention Centre in Ho Chi Minh City.

The Vietnam Association of Seafood Exporters and Producers – the organizer of the event – said they hope that this year’s annual event will contribute to the growth of fish and fishery exports for businesses in these industries.

On opening day, exhibitors from 15 countries showcased their wares is an estimated 350 pavilions.

The event is where food professionals can source the latest trends and technologies in industries related to wild caught as well as farmed fish and seafood (whether freshwater or saltwater), says the Association.

Moreover, attendees can join many related activities during this event including cooking demonstrations and numerous seminars related to the management of fisheries and aquaculture businesses.

RoK group invests in renewable energy power in Quang Binh

Dohwa Engineering Company Limited from the Republic of Korea (RoK) has began construction of a renewable energy power complex in Le Thuy district of the central coastal province of Quang Binh.

The 55-million-USD project includes sub-projects of generating 550MW of solar power, 100MW of biomass power and building resort areas and water parks.

In the first phase, the Korean group will construct a solar power plant with a capacity of 49.5MW.

The project is expected to be put into operation at the end of 2018.

Bac Ninh: 98 percent of locals access clean water

Up to 98 percent of the population of the northern province of Bac Ninh has accessed clean water thanks to different sources to water supply projects.

In rural areas, 36 water supply projects invested by state budget were put into operation. They have a total capacity of 57,000 cubic metre per day, providing clean water to over 50,480 households.

Major effectively operating water works include those in Dinh Bang ward in Tu Son town, Trung Kien, Tan Lang communes in Luong Tai district, Tri Qua commune in Thuan Thanh, Quan Do village in Van Mon commune, Yen Phong district, and Song Ho commune in Thuan Thanh.

Nguyen Dong Thap, Director of the provincial Centre for Clean Water and Environmental Sanitation, said that the province targets all rural residents to access clean water in 2017. 

In the coming time, the province will continue calling on enterprises to engage in the effort.

Young intellectuals praised for excellent performance in poor communes

The Ministry of Home Affairs (MoHA) held a meeting on August 29 to review a pilot project selecting 600 excellent young intellectuals to work as vice chairs of the communal People’s Committees in 64 poor districts nationwide.

MoHA Deputy Minister Nguyen Trong Thua said in early October 2012, his ministry finished selecting 580 young persons with university diplomas for the project, which has been carried out in 20 provinces.

They have made active contributions to building clean and strong grassroots political systems and directly engaging in local socio-economic development tasks, he noted, adding that the project has also helped fine-tune mechanisms and policies on discovering, selecting and training young officials in Vietnam.

Over the last five years, 351 project members have proactively suggested and directly carried out 834 socio-economic development programmes, plans and projects.

Thua cited a Ngoc Linh ginseng farming model initiated by Vice Chairman of the Tra Linh communal People’s Committee Dinh Hong Thang in Quang Nam province, saying this model has helped local residents escape from poverty. Meanwhile, a plan on building clean water supply system implemented by Vice Chairman of the Ba Dien communal People’s Committee Nguyen Anh Khoa in Quang Ngai province has helped curb skin diseases in the locality.

Those programmes, plans and projects have helped raise local people’s income and awareness of socio-economic development, custom changes and cultural preservation, the official added.

As of June 30 this year, 564 project members had been qualified for continuing the task after the project expires, but four of them did not want to continue working in the localities they used to serve.

Up to 217 project members (or 38.7 percent) have been appointed as communal civil servants while 13 (2.3 percent) have been promoted to chairpersons of the communal People’s Committees. Seventeen members (3 percent) have been elected chairpersons of the communal women’s unions, Vietnam Fatherland Front committees and youth union committees. Sixty-eight others (12.1 percent) continue to serve as vice chairs of the communal People’s Committees. 

Another 148 project members in 26 districts of nine provinces haven’t been appointed to any positions, Thua said.

Addressing the meeting, Deputy Prime Minister Truong Hoa Binh affirmed that the Party has consistently attached importance to the role of the youth. The project of 600 communal vice chairs shows the Party and Government’s trust in the young generation.

He recognised the project members’ excellent performance in fulfilling assigned tasks, adding that the project has also created a chance for young intellectuals to improve themselves.

He also pointed out certain shortcomings, including local administration’s lack of awareness of the project members’ role and long-term preparation of personnel for their localities.

The Deputy PM asked the beneficiary localities to better use the young intellectuals after the project is over while working to encourage young people’s dedication.

At the event, the MoHA presented merit certificates to 16 collectives and 88 persons with eminent performance in the project implementation.

Can Tho, RoK locality boost tourism cooperation

A workshop to promote tourism and health connection between Can Tho and Gyeongbuk-do province of the Republic of Korea (RoK) was held in the Mekong Delta City on August 29.

The event was hosted by the Can Tho Union of Friendship Organisations and representatives from the Korean province.

Enterprises from the two localities discussed cooperation potential, and proposed measures to promote ties in health care and medical tourism.

According to the municipal union, the event opened up exchange opportunities for Can Tho and RoK partners, contributing to relations between the two localities.

VN–Laos trade fair 2017 opens in Son La     

The Viet Nam–Laos trade and tourism fair 2017 has been kicked off in the northern province of Son La on Tuesday.

The event is one of the activities being organised under the framework of the ethnic festival of Son La Province’s Moc Chau District in 2017.

The fair is a significantly political, economic and social event that contributes to the friendship and cooperation between the local people of Son La and the northern provinces of Laos.

It is also an opportunity for enterprises in Son La Province and northern Laos provinces to seek information, opportunities, potentials, customers, as well as business partners, to expand their trade relations.

It features 140 booths set up by exhibitors from Vietnamese firms and Laos’ Houaphanh and Luang Prabang provinces.

At this fair, there are two booths to promote the cultural and tourism products of the ethnic people in Son La Province. They introduce to visitors the potentials, advantages and the cultural beauty of the province.

The event will go on until September 4.  

National CPI hits eight-month high in August     

Viet Nam’s consumer price index (CPI) increased by 0.92 per cent in August, the highest month-on-month increase in the first eight months of this year, the General Statistics Office (GSO) announced on Tuesday.

August’s CPI increase was driven by price rises in foodstuff (1.64 per cent), housing and construction materials (1.27 per cent), transportation (2.13 per cent) and health-care services (3.72 per cent), said Do Thi Ngoc, director general of the GSO’s Price Statistics Department.

Other goods and services that recorded slight price increases included restaurant and catering services, education, equipment and home appliances.

The CPI experienced a year-on-year rise of 3.84 per cent in the eight months. The rate, however, was still lower than respective figures seen in the same period of 2010, 2011 and 2012 at 8.61 per cent, 17.64 per cent and 10.41 per cent, respectively, Ngoc said.

She said core inflation rose 0.1 per cent in August month-on-month and 1.31 per cent year-on-year. Eight-month core inflation increased 1.47 per cent from a year earlier, lower than the planned inflation of 1.6-1.8 per cent.

In August, gold prices surged 1.11 per cent from last month but down 2.35 per cent compared to last year’s corresponding period while price of US dollars saw a slight month-on-month decrease of 0.03 per cent. 

Tra Vinh to build two IPs     

Authorities in Tra Vinh southern province have allowed Dong Do Southern Construction Investment Joint Stock Company to build infrastructure for two industrial parks.

Total investment capital for the two parks is VND2.05 trillion (US$89.99 million).

The Cau Quan Industrial Park is located on more than 130ha in Cau Quan Township, Tieu Can District, with estimated capital of VND850 billion. Meanwhile, the Co Chien Industrial Park will be built on 200ha in Cang Long District, with investment capital of VND1.2 trillion.

The province currently has the Dinh An Economic Zone in Tra Cu and Duyen Hai districts and the Long Duc Industrial Park in Tra Vinh City. The two areas have attracted 60 projects, of which 43 are funded by domestic investors with total registered capital of nearly VND96 trillion and 14 are foreign invested projects with total capital of more than $3 billion.

El Salvador calls for investment from Viet Nam     

With its strategic geographic location and ports and airports, El Salvador can be a gateway for Vietnamese goods to enter American markets, especially Central American, according to the Viet Nam Chamber of Commerce and Industry.

Speaking at a seminar on investment opportunities and trade development with El Salvador in HCM City on August 29, Vo Tan Thanh, director of VCCI’s HCM City branch, said Viet Nam and El Salvador only established diplomatic ties in 2010.

Trade between the two countries increased from US$10 million in 2011 to nearly $30 million last year, with garment and textiles, footwear, electronic products, timber, plastics and automobile components being the key items of trade, he said.

El Salvador is a small country in Central America with an area of 21,000sq.km and a population of nearly seven million, he said.

“The El Salvador market is small but has a lot of potential and can lead to other large markets like the US and other countries that it has free trade agreements with.”

El Salvador’s Deputy Foreign Minister Carlos Castaneda said this is the most cost-competitive country to set up and operate a business.

UK newspaper Financial Times’s investment journal fDi Intelligence has rated El Salvador as the most cost-effective country in Central America.

It also has among the lowest tax rates in the region, Castaneda said.

Besides recognition as a cost-effective location, its infrastructure is among the best in Latin America and Central American, he said.

Its modern infrastructure connects the main cities in the region and enables efficient logistics, he said.

“In terms of trade openness, we offer preferential access to a potential market of 1.2 billion consumers in 43 countries around the world.”

Its strategic geographic location enables quick access to major American cities, with many major freight companies like DHL and UPS setting up operations in the country, he said.

As part of its commitment to attracting investment, El Salvador offers attractive tax incentives and has a legal framework that facilitates and guarantees the protection of investment because the country is interested in developing long-term relationships with investors, he said.

“We invite you to explore El Salvador’s attractive investment opportunities in strategic sectors like aeronautics, agro industry, energy, light manufacturing, offshore business services, specialised textiles and apparel, and tourism.”

Viet Nam’s fruits like dragon fruit have great potential to be exported to El Salvador since it does not have them, he said, adding, “I am striving to create conditions for developing a market for this fruit in El Salvador.”

In addition, El Salvador’s long coastline offers a good opportunity for Vietnamese firms to invest in aquaculture and seafood processing and export to third countries.

The same day, El Salvador opened an honorary consulate in HCM City to promote investment and trade ties between the two countries. 

FE credit launches Fast Cash, Simply Text – Get Cash     

VPBank Finance Company Ltd (FE CREDIT) launched an exclusive feature, Fast Cash, Simply Text – Get Cash last week to provide first-time credit-card users with unprecedented convenience.

Fast Cash allows customers to gain access to cash from their credit card limit by simply sending an SMS from their mobile phone and getting a unique code, which can be presented at designed distribution points of Vietnam Post and Sacombank branches for cash withdrawal.

The customers do not need to pay a withdrawal fee.

Kalidas Ghose, CEO of FE CREDIT, said: “As a market leader, we believe in creating unique Fast and Easy experiences for our customers. Fast Cash, Simply Text – Get Cash is a pioneering initiative which will provide a tangible benefit to our valued cardholders.”

A pioneer in Consumer Finance, FE CREDIT, has established a solid foundation to become the market leader of the unsecured consumer loans market.

FE CREDIT currently provides consumer lending services such as personal loans, two-wheeler loans, consumer durable loans and credit cards. FE CREDIT serves more than six million customers and cooperates with 5,500 partners at 9,000 Points of Sale (POS) nationwide.