Consumer prices stable in Jan

Consumer prices were stable last month, the Ministry of Planning and Investment said at the Government’s monthly meeting last week.

Minister of Planning and Investment Bui Quang Vinh told the January meeting of the Government last Friday that provinces had stocked up on goods to ensure sufficient supplies in the lead up to the Lunar New Year holiday (Tet). This has helped stabilize consumer prices.

Deputy Prime Minister Nguyen Xuan Phuc told relevant agencies to guarantee adequate supplies of goods as consumption always surges before Tet, well manage prices, markets and food hygiene, and get tough on smuggling, production of counterfeit goods and speculation.             

Export sales inched up and trade deficit shrunk considerably. Foreign direct investment (FDI) approvals and disbursements rose against the same period last year and disbursements of official development assistance (ODA) and preferential loans were high as well.

The business startup picture was also bright, with the sizes of newly established firms bigger than the year-ago period.

Government members also discussed solutions to executing an action plan on the implementation of the Government’s Resolution 01/NQ-CP, the socioeconomic development plan and State budget estimates.

In his closing remarks, Prime Minister Nguyen Tan Dung said the Vietnamese economy was feeling all sorts of impacts such as Vietnam’s deeper integration into the global economy, world oil price volatility, global economic woes and the East Sea issue, so relevant agencies should be watchful.

According to the Prime Minister, it is necessary to control consumer prices, enhance macroeconomic stability, boost exports and curb trade deficit.

He also called for measures to assist enterprises in business and production activities and help farmers recover from the recent cold spell that has caused heavy crop damage in northern upland provinces.

Chocolate made in Vietnam wins French people’s favour

The lightly bitter, sweet taste of Vietnamese chocolate bars has won the hearts of many French people in a recent meeting in Foyer Vietnam in Paris.

Imported by Delikats Company, the Vietnamese chocolate brand Marou is now present in France, one of the world’s best-known chocolate makers and processors.

The creation of the Marou brand name is attributed to the passion and creativity of two French chocolate makers, Vincent Mourou and Samuel Maruta, who quit their jobs in finance and advertising in France and traveled to the Central Highlands and Mekong Delta regions of Vietnam. There, they worked with Vietnamese farmers at cocoa farms.

Their ambition was creating a chain of self-contained chocolate production, from processing cocoa seeds to packaging and selling chocolate bars. This production form is called “bean-to-bar” in English, but it had not yet been carried out in Vietnam.

So far, the French company has created six types of chocolate products, with the content of cocoa ranging between 70 percent and 78 percent. The cocoa is chosen from different localities such as Dak Lak, Lam Dong, Ba Ria, Tien Giang, Dong Nai and Ben Tre. Each has its own distinctive flavour notes.

Klervi Mandon, a representative from the company, said the Marou founders have lived in Vietnam since 2011. They hired around a dozen rural families to grow cocoa on various areas, each about two hectares.

Vincent Mourou and Samuel Maruta built a production factory in Thu Duc district, Ho Chi Minh City, with a 20-member staff.

Their handmade chocolate products are more expensive than industrial ones, but the quality and flavour meet the needs of high-end markets in Vietnam and compete with international products.

Foyer Vietnam Manager Nguyen Binh could not hide his pride about the fact that Vietnam has made its name abroad as a chocolate maker.

Domestic market remains a highlight this year: official

The domestic market will continue to thrive in 2016, Director of the Ministry of Industry and Trade’s Domestic Market Department Vo Van Quyen has said.

The prediction has initially been confirmed by the positive retail sales at the outset of this year.

The purchase power in January, prior to the Lunar New Year festival (Tet) which falls on February 8, grew fairly from a year earlier, Quyen said at a meeting of the ministry on February 1.

Meanwhile, the consumer price index stayed flat compared to December, helping stabilise the domestic market.

He said his agency has ordered the departments of industry and trade of 53 of the 63 provinces and centrally-run cities to ensure the supply of goods meets demand and at stable prices during Tet, while surveillance should be stepped up to prevent counterfeit and low-quality goods.

Deputy Minister Tran Tuan Anh said in addition to export, the domestic market has received special attention by the ministry, as well as the Government and National Assembly in recent years.

The domestic market is instrumental to national economic growth, he added.-

Rice exports increase sharply in January

Vietnam exported nearly 315,000 tonnes of rice as of January 28, an increase of 46 percent compared with the same period last year, according to the Vietnam Food Association (VFA).

The rice exports were shipped at 127 million USD in FOB value and 135 million USD in CIF value, up 39 and 42.5 percent, respectively.

According to VFA, the increase in rice exports last month was due to the fact that Vietnam ’s rice exporters had to complete government-to-government deals with the Philippines and Indonesia .

In the first quarter of this year, rice exporters have to hand over up to 1.2 million tonnes, causing rice prices to increase in the last few months.

VFA Chairman Huynh The Nang said that the rising price of domestic rice will make rice exporters stop signing new commercial contracts. The situation may improve after the winter-spring harvest.

According to the Department of Cultivation, the Mekong Delta has farmed about 1.54 million out of 1.56 million planned hectares in the winter-spring crop. Localities have harvested about 120,000 hectares with an average productivity of 6.3-6.4 tonnes per hectare.

Last year, Vietnam exported 6.5 million tonnes for 2.68 billion USD, a decrease of 3.94 percent in value. Asian countries were the main buyers, accounting for 74.5 percent of exports, followed by Africa (13.77 percent), and the US (6.72 percent).

The Vietnam Food Association forecast that rice export volume this year excluding border trade is expected to remain the same as last year's.

HCM City’s businesses invest 68 trillion VND in Central Highlands

Over 200 enterprises from Ho Chi Minh City have poured nearly 68 trillion VND (about 3 billion USD) into 287 projects in the Central Highlands, according to the region’s Steering Committee.

The investment cooperation between HCM City and five provinces in the Central Highlands – Dak Lak, Gia Lai, Kon Tum, Dak Nong, and Lam Dong – has involved a number of fields, including agro-forestry, ecological tourism, mining, and hydropower.

The investment from the city has helped drive socio-economic development in the region, making a great contribution to the State budget and creating thousands of jobs for local workers.

The committee, however, said the cooperation faced limitations, mostly due to the lack of information and a clear development strategy.

In order to boost the effectiveness of socio-economic cooperation programmes, the committee asked the five provinces to build detailed plans to attract more investment, especially in agro-forestry processing and commodity consumption.

Last year, the Central Highlands recorded a population of 5.5 million, 36.85 percent of which were from 53 ethnic minority groups.

The region achieved a GDP growth of 7.06 percent or nearly 140 trillion VND (6.16 billion USD) in the year.

It also attracted 131 investment project totaling 19.3 trillion VND (849.2 million USD, including 13 foreign-invested ones.

Phu Yen to create favourable conditions for FDI projects

The central province of Phu Yen will create favourable conditions for the implementation of foreign direct investment (FDI) projects, according to Hoang Van Tra, Chairman of the provincial People’s Committee.

He made the remark during a meeting with foreign businessmen, experts and volunteers on January 30 on the occasion of the Lunar New Year (Tet).

Tra said the province will focus on meeting investors’ requirements, as well as realising commitments and preferential policies in accordance with regulations.

Foreign investors expressed their wish that Phu Yen will continue developing infrastructure and high-quality workers.

So far, the province has attracted 42 foreign-investment projects with a registered capital of 4.72 billion USD. Of these, 28 projects worth 307 million USD have been put into operation.

The investment sectors are mainly sugar, pharmaceutical products, beverages, mining and tourism.

The province has attracted a number of big investment projects, including a logistics complex for Vung Ro refinery plant, a maize cultivation project under France ’s Invivo NSA group and a Japanese-invested tuna processing plant.

Last year, the province’s FDI projects earned 2.2 trillion VND in revenue (105 million USD), contributing 183 billion VND (about 8.3 million USD) to the State budget and creating stable jobs for 4,300 local workers.

Deputy PM hails Vietnam Cooperative Alliance

Deputy Prime Minister Nguyen Xuan Phuc has praised the contributions made by the Vietnam Cooperative Alliance (VCA), which gathers more than 18,000 cooperatives with tens of millions of labourers, to national socio-economic development, especially agriculture and rural development.

The official made the statement at the 13 th conference of the VCA’s Executive Board in Hanoi on January 30, where he stressed that cooperatives are a democratic economic model that help many households escape from poverty and generate jobs.

Successful cooperatives manifest the sound guidelines of the Party and State in developing a collective economy, he said.

However, the performance has yet to match the country’s potential, the Deputy PM said, adding that local Party Committees and authorities are not focusing enough on the model as well as the role played by the collective economy in national economic development and social stability.

Collective economic development must suit the market mechanism, economic restructuring, growth model reform and new-style rural area development, he said.

The official also called on ministries and agencies to coordinate with the VCA to work as advisers for the Government on issuing mechanisms and policies to encourage the collective economy and facilite the development of cooperatives.

“We must give cooperatives a priority when it comes to agriculture, farming and rural areas, especially new-style rural areas”, he noted.

VN strives to reform customs ahead of FTAs

The World Trade Organisation's Trade Facilitation Agreement (TFA) would boost customs reforms to facilitate trade across borders in line with international standards, an official has said.

This was important as the Southeast Asia economy was striving to hasten customs reforms riding on the hope of increasing exports as a number of free trade agreements (FTAs) were on the horizon.

Nguyen Toan, director of the International Co-operation Department under the General Department of Customs, said that the TFA, which includes provisions for expediting the movement and release and clearance of goods, would also create favourable conditions for Viet Nam to implement commitments in FTAs that the country had signed and was going to sign.

The modernisation of customs management would be hastened to speed up customs clearance and prevent losses for collection of import and export taxes, Toan said.

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

According to Toan, Viet Nam was 54th out of 64 WTO members which approved the TFA. The agreement would come into effect when it was approved by at least two-thirds of WTO members, or 108 member countries.

Still, Toan said the TFA would be a challenge to Viet Nam where 90 per cent of businesses were of small and medium sizes and trade frauds remained a headache.

He also pointed out that the lack of co-ordination among relevant ministries and organisations would also badly impact efforts to facilitate trade.

The General Department of Customs would set up plans to establish a steering committee to carry out the agreement's commitments, he said.

As of 2015, Viet Nam had trade relations with more than 200 countries and territories. With 14 impending FTAs, the country would have liberalised trade with 55 partners, promising prosper exports.

Viet Nam targeted to achieve an export revenue of US$187 billion this year, a rise of 10 per cent over 2015.

Under a project of development of regional markets, Viet Nam's export turnover was expected to touch $300 billion by 2020 with an annual average growth rate of 11 per cent to 12 per cent from 2015 to 2020.

Wood firms focus on home

Wood product firms need to focus more on improving their designs and join hands to develop a strong distribution system, according to the Handicraft and Wood Industry Association of HCM City (Hawa).

Nguyen Quoc Khanh, Hawa chairman, said Viet Nam has been among the world's largest wood products exporters for many years, but the domestic market is not dominated by local firms.

He said the association members, besides focusing on boosting exports, should also work to expand their domestic share.

The Vietnamese market offers a huge opportunity, he said, adding that firms need to develop specific products for it.

Nguyen Van Quy, general director of Ho Nai Co Ltd, said there is high demand for furniture, home dcor and wooden household appliances.

But Vietnamese firms usually copy designs of products from Malaysia, Indonesia and other countries, he said, adding this should change.

"We need to create designs that match customers' tastes.

"If we do not abreast of new designs, we will find it hard to compete with imports."

Vu Tien Thap, CEO of D'Furni, a furniture distributor, said the recovery in the housing market in big cities has boosted sales of furniture.

With the country's deeper integration, more professional international distributors would enter the domestic market, and the small distribution systems and local traditional furniture producers and distributors would lose market share to them, he warned.

Enterprises in the sector should develop closer links and create professional distribution systems for Vietnamese furniture, businesses agreed.

At a recent Hawa meeting in HCM City, they urged the association to set up schools for design and management training to help the industry.

Domestic sales of furniture and home decor topped about US$2 billion last year.

Banks offer money transfer promos

Commercial banks have put on many promotional programmes for their money transfer services leading up to Tet (Lunar New Year) holiday.

According to online newspaper VnExpress, incoming remittances normally grow prior to the traditional Tet holiday, so many banks including DongA Bank, Vietcombank, Vietinbank, SeABank and HDBank have adopted new measures to benefit from this market movement.

DongA Money Transfer Company under the DongA Bank offers a VND300 million (US$13,700) lucky programme for recipients of remittances at the bank.

Recipients of remittances at Vietinbank also have the chance to win many presents such as motorcycles and television sets.

A representative from DongA Money Transfer Company said that remittances at Tet often increase sharply, and this year would be better since the holiday fell near the end of January when overseas Vietnamese and Vietnamese workers abroad often get their salaries and send it to their relatives at home.

Therefore, he was optimistic about the remittances this year, and added that his company has to enhance the number of staff during the occasion to ensure timely payments to recipients.

Le Thanh Trung, deputy director of HDBank, said that the remittances at his bank had increased significantly and had come mainly from the United States (US) and Taiwan.

Money Transfer Co of the Sai Gon Thuong Tin Bank said that the bank's remittances were expected to exceed the $2 billion target set for 2015.

Nguyen Hoang Minh, deputy director of the State Bank of Viet Nam's HCM City branch, estimated that the remittances to HCM City, which is one of the top localities nationwide receiving the largest volume, reached more than $5.5 billion by the end of December last year, up $500 million against the set target.

According to Minh, the achievement was forecast in wake of the recovery of domestic investment channels, especially real estate, which the government has so far allowed foreigners to own houses in Viet Nam.

Statistics from the SBV's HCM City branch showed that remittances flowing into production and business accounted for more than 70.6 per cent of the country's total remittances. Another 20.7 per cent went into real estate investment and 6 per cent to 7 per cent were for Viet kieu's (overseas Vietnamese's) relatives for consumer purposes such as medical treatment or tourism.

According to a recent World Bank report entitled "Migration and remittances fact book 2016", Viet Nam received nearly $12.3 billion in remittances in 2015. The country is the 11th largest recipient of remittances worldwide, and ranks third in the Asia-Pacific region after China and the Philippines, according to the report.

About $7 billion of Viet Nam's remittances last year came from the US, with the nation ranking ninth among those receiving dollar remittances from the North American nation.

January retail sales surge 11%, biggest increase in five years

The domestic market would continue to thrive in 2016, said Director of the Ministry of Industry and Trade's Domestic Market Department, Vo Van Quyen.

This prediction has been confirmed by the initial positive retail sales at the beginning of this year.

Quyen told the online meeting held in Ha Noi yesterday that the purchasing power in January, prior to the Tet (Lunar New Year) holiday which falls on February 8, increased 3.5 per cent from the previous month and posted an 11 per cent year-on-year rise.

The purchasing power in the year-end month saw a record high as compared to the past five years while the consumer price index stayed flat compared in December, helping stabilise the domestic market.

He said his agency has ordered the departments of industry and trade in 53 of the 63 provinces and centrally-run cities to ensure that the supply of goods meets demand and at stable prices during Tet, while surveillance should be stepped up to prevent counterfeit and low-quality goods.

In addition, price stabilisation and promotional programmes at 50 supermarkets nationwide have facilitated people in their purchasing.

All of the price stabilisation points have been selling Vietnamese goods and expected consumption in the holiday to be 10 to 15 per cent higher than previous months.

Deputy Minister Tran Tuan Anh said that in addition to exports, the domestic market has received special attention from the ministry, as well as the government and the National Assembly in recent years.

The domestic market is instrumental to national economic growth, Anh added.

However, he asked the department to have specific plans to ensure supply of necessary goods.

Le Ngoc Dao, deputy director of HCM City's Department of Industry and Trade, said businesses in the city have sufficient supply of necessary products such as vegetables, fruits, seafood and rice for Tet.

The city has also co-operated with neighbouring provinces to provide clean goods to people with 300 booths meeting VietGap standards.

"Abundant goods and stable prices are prepared before and after Tet. The city will have several promotional programmes during the holiday," Dao said.

"Export turnover of processing sector saw low growth of 2.8 per cent in January. The reason was due to the decrease in export of phones and electronics spare parts," Nguyen Thuy Hien, deputy director of the ministry's planning department said.

Hien said export turnover was estimated at US$13.8 billion, increasing 2.2 per cent from the same period last year, while that of imports was $14 billion, making the trade deficit $200 million.

Deputy Minister Anh noted that the sector should make plans to unravel the difficulties facing the processing and manufacturing sector.

Chinese truck sales hit by low quality

The import of made-in-China automobiles to the Vietnamese market were successful in 2015 as their prices were much lower than others in the same segment.

However, according to phaluattp.vn, the sales of vehicles imported from China has recently been slow due to their inferior quality.

Statistics from the General Statistic Office showed that the last half of 2014 and the first half of 2015 was the fastest growth period of made-in-China automobiles in Viet Nam. Even though, sometime in 2015, the volume of imported automobiles was nearly 300 per cent higher than that of previous year.

Many of the imported vehicles during that time were trucks, tractor trucks and various semi-trailers.

According to reports, vehicles from China such as Dongfeng, Sinotruck, FAW, and JAC, in addition to Chenglong, were imported at two-thirds and even half the price as compared with similar locally-assembled units and those imported from South Korea and Japan.

In particular, Chinese businesses had followed up Viet Nam's decision on tighter control over overloaded trucks, which were blamed for damaging roads and threatening the safety of others road users. They had immediately revised the specifications of vehicles to match with the regulations and still met the demand of Vietnamese customers.

A representative of the Truong Hai Auto Corporation (Thaco) told phapluattp.vn that many Vietnamese importers had visited China to ask producers to revise the tonnage of vehicles to make them lighter than and be suitable for use as per regulations in Viet Nam. Chinese automakers grabbed the opportunity to meet the demand.

"Local auto makers and assemblers failed to meet the demand at that time. South Korean and Japanese automakers took about six months to design a suitable model," the Thaco representative said.

After a period of ‘boom' in the Vietnamese market, the sale of made-in-China vehicles has now slowed down drastically.

Phong, an owner of an automobile business in District 12, HCM City, said his company previously sold dozens of made-in-China vehicles in a month, but in the last two months of 2015, he could sell only two units.

"Since early this year, no one has bought these vehicles," Phong said.

Truong Duy, a representative of a Chinese automobile agent on the National Highway 1, said his agent had sold only five units since early December last year.

He said the demand of Chinese vehicles, after a period of rapid increase, had begun to dip.

One of key reasons leading to this situation was the incorrect predictions on auto consumption in the market, Duy said. Misled by those predictions, domestic auto importers increased the import volumes of Chinese trucks as compared to the real demand.

"If poor sales continue, the number of Chinese automobiles in the inventory may increase to hundreds of units each company," Duy said.

Director of a transportation business in HCM City, Vo Van Phung, said Chinese trucks were so cheap that they were suitable for customers who had bought it for the first time to do business because of the rapid capital turnover.

However, Phung told phapluattp.vn that after three or four years in use, Chinese trucks began breaking down. Meanwhile, those imported from Japan and South Korea such as Hino, Suzuki, Isuzu and Kia were more durable, and even ten years later their engines were still smooth and consumed less fuel.

"Many drivers said that steering Chinese vehicles was very tiring. Furthermore, its engine kept breaking down and the safety aspects were not high," Phung said.

According to statistics from the transport ministry's Register Viet Nam, more than 105,150 made-in-China units were imported to Viet Nam in the first 10 months of last year, of which 15,000 were semi-trailers and nearly 10,000 were trucks.

Meanwhile, there were only 33 semi-trailers and 7,400 trucks imported from other countries including Japan and South Korea.

Gas prices continue to fall after import price drop

The Sai Gon Petro Company yesterday reduced the retail price of a 12kg cooking gas canister in HCM City by VND20,500 (US$0.92) to VND257,000 ($11.55).

The other major gas distributors are now selling 12kg cooking gas canisters for VND264,500 ($11.89) to VND268,000 ($12.05).

According to gas companies, the price cut followed a fall in the average imported gas price by $67.5 to $300 per tonne in February 2016.

This is the second time gas prices have fallen this year. On January 1, the gas price was reduced by VND31,000 ($1.39) due to a slump in global gas prices.

More HCMC-based firms established in January

Some 1,410 enterprises in HCM City were established with a total registered capital of VND8.74 trillion (US$387 million), an increase of 26 per cent in the number of firms and double the amount of registered capital over the same period, from January 1 to January 15 this year.

The enterprises included 27 private businesses, 152 joint stock companies, 1,231 liability limited companies, of which, the argo-forestry-fishery sector had 12 enterprises with a total capital of VND114 billion (US$5.1 million); the industrial construction area had 31 enterprises with a total capital of VND2.83 trillion ($126 million); the services sector has 1,087 enterprises with a total capital of VND5.79 trillion ($257 million).

PetroVietnam Gas Corporation (PVGas) will buy more than 15 million shares in natural gas dealer CNG Vietnam JSC (CNG), equal to 56 per cent of the company's capital.

PVGas is now not a shareholder of CNG. The offered price has not been released.

Yesterday, CNG rose 1.9 per cent to trade at VND32,400 (US$1.44) per share. If PVGas offers this price, the value of this deal could reach VND490 billion ($21.8 million).

PVGas will use a part of its investment and development fund to buy CNG's stakes. This fund was worth VND11.27 trillion ($500.7 million), according to PVGas's revised financial report for last year.

This deal could make PVGas the biggest shareholder in CNG. After completing the deal, PVGas will restructure CNG's business segments based on the market region, customer and stage.

Exchange founds new market development council

The HCM Stock Exchange (HOSE) yesterday founded a council to provide consultancy for market development.

The new council will give recommendations and opinions on development trends in regional and international stock markets, and demands of financial firms, investors and brokerage companies.

The new council will also study technological challenges, new products and services in order to help HOSE improve the local markets.

The council will be chaired by Le Hai Tra, HOSE's Deputy Director General. It will also receive assistance from specialists who are working for brokerage firms, listed companies, law firms and banks.

Vietnam, Australia seek trade opportunities in TPP

Vietnamese and Australian businesses explored trade and investment opportunities that will be created by the Trans-Pacific Partnership (TPP) Agreement during a forum held in Sydney on February 1.

Minister of Industry and Trade Vu Huy Hoang said the TPP plays a crucial role in trade relations between Vietnam and Australia as it will supplement the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) and open doors for Vietnamese products to enter the two markets.

Within the TPP framework, Australia has pledged to apply zero percent tariffs for 94 percent of Vietnamese products. In return, Vietnam’s commitments to opening its market for Australian products under the TPP are higher than that of AANZFTA, Hoang said, adding that once the TPP is signed and comes into effect, the investment opportunities in the respective countries will increase, especially in fields of their strengths.

He cited mining, oil and gas, coal and services as Australia’s strengths, while Vietnam has potential in garment-textile, footwear, farm produce and seafood.

The Minister said Vietnam hopes to receive more support from the Australian Government and businesses in the fields of thermal coal and liquid natural gas.

He asked Australian agencies to facilitate exports of Vietnamese products, especially when it comes to agriculture and seafood.

According to CEO of the Australian Trade Commission (Austrade) Bruce Gospe, Vietnam and Australia are forging close economic links and the TPP will create more opportunities for the two countries to increase their relations via realising commitments outlined in the pact.

The two nations will have the opportunity to exchange goods and services as well as support other members of the TPP for effective global economic integration.

Regular delegation exchanges as well as over 28,000 Vietnamese students studtying in Australia are considered important bridges for the two countries to increase their mutual understanding, he said.

He added that Australia is willing to support Vietnam in human resources training so that the Southeast Asian country can make the best use of TPP opportunities.

At the forum, businesses discussed a number of mutual concerns such as the domestic and foreign investment climate along with investment experience and opportunities in their respective societies.

Most Australian firms said they hope the Vietnamese Government will have stable and long-term policy to enable them to do business in the country.

At the forum, the Vietnam Trade Promotion Agency (Vietrade) signed a Memorandum of Understanding on cooperation with the Australia Vietnam Business Council and Vietnam Business Association in Australia .

The Vietnamese delegation is scheduled to visit New Zealand on February 2.

National chemical group vows to speed up equitisation, divestment

The State-run Vietnam National Chemical Group (Vinachem) is to accelerate the equitisation of its affiliates and divestment from non-core businesses in 2016, the firm’s Deputy General Director Bui The Chuyen said.

Vinachem reported that it realised 83 percent of its equitisation plan in 2015, with five of the six target subsidiaries equitised and more than 975 billion VND (43.7 million USD) collected in the move.

Meanwhile, it succeeded in divesting its capital from 13 of the 17 target enterprises, fulfilling 66 percent of the set objective and taking back over 674 billion VND (30.2 million USD).

The group also admitted certain obstacles to the equitisation of and divestment from some companies, adding that it suggested the Government consider some preferential treatment for Vinachem to speed up the work.

Equitisation and divestment are part of the restructuring of State-owned enterprises (SOEs), which constitutes the economic restructuring scheme carried out since 2011. They aim to make SOEs more efficient and profitable.

Public investment and the banking system are also undergoing significant restructuring.

Canadian Solar strikes US$70mn deal over Vietnam facility

Canadian Solar Inc. has closed a deal with a financial company on a financing package of up to US$70 million in loans and equity investment, which will be earmarked for its production facility in Vietnam.

The credit package, to be provided by International Finance Corp. (IFC), includes loans worth up to US$60 million and subscription of up to US$10 million in common shares of the solar company, Canadian Solar said in a press release on January 28.

Proceeds of the investment and financing package will be used to fund Canadian Solar’s module production plant in Vietnam and the expansion of solar cell or module production capacities in other emerging markets, according to the announcement.

Canadian Solar, however, did not give details about its Vietnam project.

The Canadian company said the partnership with IFC underscores its commitment to expanding in Asia and Latin America, as well as operating in compliance with the financial firm’s environmental and social performance standards.

IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector in emerging markets.

Dr. Shawn Qu, chairman and CEO of Canadian Solar, said the partnership is another milestone that enhances the company’s leading position in the global solar power industry, which also enables it to “expand [its] production capacity to meet the increasing demand for solar energy worldwide.”

“We look forward to continuing our cooperation with IFC to accelerate the adoption of solar energy around the world, especially in developing economies, and to mitigate climate change,” he said.

In the meantime, IFC views the transaction as the first step in a long-term partnership with Canadian Solar, at a time when rapid cost declines have made the solar industry a scalable option for emerging markets.

“We look forward to collaborating on business models that will enable low-carbon energy access,” said Alzbeta Klein, director of IFC Manufacturing, Agribusiness and Services.

Founded in 2001 in Canada, Canadian Solar, one of the world’s largest and foremost solar power companies, is a leading manufacturer of solar photovoltaic modules and a provider of solar energy solutions.

The Guelph-based company has a geographically diversified pipeline of utility-scale power projects, with more than 12GW of premium quality modules having been successfully deployed in over 70 countries around the world in the past 14 years.

Orientations to attract and use preferential loans approved

The Prime Minister approved a project on orientations to attract, manage and use official development assistance (ODA) and preferential loans from foreign donors between 2016 and 2020.

The project aims to realise the Party’s and State’s policies on attracting, managing and using the loans to implement the 2011-2020 socio-economic development strategy and the 2016-2020 socio-economic development plan.

It includes strategic orientations and synchronous measures to better mechanisms and increase the management capacity of ODA and preferential loans, which will help the country utilise them effectively and attract more funds after 2020.

The project will act as a foundation for ministries and sectors to mobilise and use the loans, while helping donors build development cooperation programmes with Vietnam at the regional, national, ministerial and local levels.

In the next five years, Vietnam will focus on completing ODA projects and programmes on schedule so it can meet its socio-economic development requirements.

The country prioritises attracting ODA and preferential loans to build synchronous and modern infrastructure; make socio-economic and cultural development policies, improve the quality of State management and human resources, protect the environment, adapt to climate change and implement its green growth strategy.

The 2011-2015 project proved effective, as it contributed to implementing the 2011-2015 socio-economic development plan, as well as enhancing the relationship between Vietnam and donors.

Ecommerce companies paying more attention to smaller cities, provinces

Ecommerce companies are planning to expand their operation to the largely untapped market of cities and provinces outside of Hanoi and Ho Chi Minh City.

According to Vietnam E-Commerce Association (VECOM)’s E-Business Index 2015 (EBI 2015) report released on January 29, there is a big gap among cities and provinces. Ho Chi Minh City and Hanoi continue to lead in business-to-customer (B2C) transactions for the fourth consecutive year, leaving other localities far behind.

The index was calculated based on the use of emails for commercial activities, the set up and operation of company websites, participation in e-marketplaces, the use of non-cash payment methods, and protection of personal information. The fact that Hanoi and Ho Chi Minh City scored around 70 index points, while the average for all 63 cities and provinces is 46.9, shows that even though ecommerce is growing fast in Vietnam, it does so in a regionally uneven pattern.

Statistics from companies show similar trends. According to Nguyen Phuong Hoang, deputy general director of online marketplace sendo.vn, of the 80,000 shops currently listing products on Sendo’s website, only 2-3 per cent are based in cities and provinces outside of Hanoi and Ho Chi Minh City.

Meanwhile, DKT JSC, a leading provider of ecommerce solutions to companies (mostly small and medium-sized businesses), said that among the 15,000 customers of its ecommerce platform bizweb, 75 per cent are based in Hanoi and Ho Chi Minh City.

“Bizweb has customers from all the other 61 cities and provinces as well, but these localities only account for 25 per cent of the total,” said DKT CEO Tran Trong Tuyen.

In this context, companies have started to pay increasing attention to marginalised localities. According to Sendo’s Hoang, ecommerce is not yet popular in these localities due to high shipping costs and time. Knowing this, Sendo plans to roll out programmes to support sellers based in these localities to help them increase service quality, as well as decrease shipping time and cost.

“Sendo is also going to promote sellers of specialty foods and products of localities, such as fish sauce from Phu Quoc or fermented pork from Binh Dinh,” Hoang said.

On its part, DKT is hoping to cooperate with the local departments of Industry and Trade of to help small and medium-sized enterprises take advantage of ecommerce. Specifically, DKT has set aside a budget of VND2 billion ($90,000), and plans to support about 100 enterprises per locality.

On the other side of the equation, customers from localities also expressed interest to buy from Hanoi and Ho Chi Minh City-based sellers but shipping times and costs are generally deemed too high.

“Shipping can be a big burden for companies. If a company in Hanoi gets an order from a customer in Binh Duong, shipping costs might exceed the profit made on the deal. This is what prevents companies from approaching these markets,” said Le Ngoc Anh, shop business director of Lingo, which operates e-retail site lingo.vn.

A transit station in Ho Chi Minh City has helped Lingo cut this cost to a third. Therefore, in the near future Lingo plans to open more transit stations in other cities, if the orders from these locations reach a certain threshold.

The EBI 2015 was compiled by VECOM after surveying about 5,000 companies all over the country. In 2015, ecommerce grew quickly in all fields of business. VECOM assessed that ecommerce in Vietnam has entered the third phase, the fast growth phase, after its formation (1998-2005) and popularisation (2006-2015).

Hindrances to the growth of ecommerce in Vietnam include the unpopularity of card payment, the lack of capable human resources, and the fact that shipping and fulfilment services do not yet meet the requirements of ecommerce.

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