Sacombank saw a business downturn in 2016

Sacombank recorded a total loss of VND18.5 billion ($817,145) during the fourth quarter of 2016. This confirms the pre-tax profit for the whole year 2016 of only VND531 billion ($23.4 million), down 64 per cent year-on-year, the bank’s consolidated financial statement for 2016’s fourth quarter showed.
As of December 31, 2016, the bank’s total assets stood at VND333.3 trillion ($14.7 billion), up 14 per cent from the start of the year. Customers lending was recorded at VND198.8 trillion ($8.8 billion), up 6.9 per cent year-on-year while customer deposits reached VND291 trillion ($12.85 billion), up 11 per cent year-on-year.
During 2016’s fourth quarter, net interest income reached VND1.4 trillion ($61.8 million), up 54 per cent year-on-year but the full year figure went down by 22 per cent year-on-year and stood at VND5.12 trillion ($226.1 million). Most of the bank’s activities during the September-December period were less than satisfactory except services which brought a net income of VND418 billion ($18.5 million), up 19 per cent year-on-year.
Foreign currencies trading saw a heavy loss of VND275.2 billion ($12.1 million) even though loss of this activity in 2015’s fourth quarter was only VND29 billion ($1.3 million). Against a profit of VND16 billion ($706,720) in 2015’s fourth quarter, securities trading recorded a loss of VND2.6 billion ($114,842) in 2016’s fourth quarter. Net loss from investment securities was recorded at VND37.4 billion ($1.6 million) for the quarter.
During the fourth quarter, operating costs surged by 29 per cent to VND1.58 trillion ($69.8 million). But the total loss of the quarter, despite being recorded at VND18.5 billion ($817,145), was only “secured” because Sacombank had cut down its credit risk provision from VND1.13 trillion ($50 million) in 2015’s fourth quarter to VND23.5 billion ($1.04 million) in 2016’s fourth quarter. Its net operating revenue during the period stood as low as VND5 billion ($220,850), down 91 per cent year-on-year.
The bank revealed its full year’s pre-tax profit of VND531 billion ($23.4 million), down 64 per cent year-on-year, and an after-tax profit of VND372 billion ($16.4 million). Its charter capital remained at VND18.85 trillion ($832.6 million) as of December 31, 2016.
Last month, Sacombank was named one of the top five banks to undergo restructuring in 2017, together with the three zero dong banks that the central bank acquired for the price of zero dong in 2015: the VNCB, PG Bank, Ocean Bank and Dong A Bank. It became the fifth-largest lender in the local banking sector in 2015 after the voluntary merger with Southern Bank.
But while the State Bank of Vietnam (SBV) has praised the joint entity, saying it had synergy that brought greater benefits to shareholders and customers, Moody’s confirmed the merger resulted in high solvency and liquidity risks for Sacombank. In its October 2016 report, it changed the bank’s outlook to negative because its problem assets had been increasing substantially since the pre-merger period and its credit provisions were slim by the end of June.
That’s not the only thing working against Sacombank, as related risks include its corporate behavior, opacity and complexity. The corporate behavior risks originate from the situation where the majority of Sacombank’s shares are managed by the SBV, which creates uncertainty around the financial health and future development of the bank.
Opacity risks stem from the fact that the bank has not yet published its audited financial report for 2015, which raises the possibility they may be restated. “The negative outlook for Sacombank reflects the uncertainty around the strategic direction of the bank, its unclear ownership structure, and the true scope of asset quality challenges,” wrote Moody’s.
In its latest response, Sacombank Chairman Mr. Kieu Huu Dung declared that Sacombank is not a weak bank, pointing out that it still leads the commercial group. He also revealed that many potential investors are keen to lend a hand to address the consequences of the Southern Bank merger, and, in the meantime, the bank’s restructuring plan is to be submitted to the central bank. “We are determined to start the process as soon as the plan is approved,” he added.

Three Vietnamese banks on the list of top 500 valuable banking brands in the world

BIDV, Vietinbank and Vietcombank are valued at more than $200 million each and are on the list of the top 500 banking brands according Brand Finance.
BIDV ranked in at 401 with a value of $255 million. Brand Finance assessed that BIDV is currently the brand with the largest value in Vietnam’s banking sector. It’s also in the top 26 in Southeast Asia. This is the second year the bank has made it to Brand Finance’s top 500 list.
VietinBank ranked in at 408 with a brand value of $252 million (ranked 379 in 2016), while Vietcombank ranked in at 461 with $201 million (ranked 450 in 2016).
According to Brand Finance’s top 500 in 2017, Industrial and Commercial Bank of China (ICBC) has replaced Wells Fargo to become the number one bank in the world. This is the first time China has surpassed the US.
The top 500 list is released annually on The Banker magazine in February. This list is used by big enterprises and organizations around the world.
Brand Finance has valued thousands of brands and intangible assets worth billions of dollars.

Vietinbank recorded $378m pre-tax profit in 2016

Vietinbank posted a 2016 pre-tax profit of VND8.53 trillion ($378 million) and an after-tax profit of VND6.825 trillion ($302.4 million) according to the bank’s consolidated financial statement for 2016’s fourth quarter.
As of December 31, 2016, Vietinbank’s total assets stand at VND948.7 trillion ($42 billion), up 22 per cent year-on-year and have a charter capital of VND37.2 trillion ($1.65 billion). During the fourth quarter, customer deposits reached VND654.4 trillion ($29 billion) while customer lending stood at VND662 trillion ($29.3 billion).
During the September-December period, the bank’s after-tax profits reached VND1.63 trillion ($72.2 million), up 30 per cent year-on-year while pre-tax profit stood at VND2.045 trillion ($90.6 million), up 26 per cent year-on-year thanks to significant improvements in some of the bank’s activities.
Net revenue from foreign currencies trading during the fourth quarter was VND210 billion ($9.3 million), up VND286 billion ($12.7 million) 378 per cent year-on-year. Net revenue from capital contribution, equity investments was recorded at VND91 billion ($4 million), up VND103 billion ($4.6 million) or 839 per cent year-on-year. During the fourth quarter, net revenue from services stood as high as VND488 billion ($21.6 million), up VND92 billion ($4.1 million) or 23 per cent year-on-year.
The bad debts rate fell as low as 1 per cent by the end of December 31, 2016. Credit provision cost during the fourth quarter was as low as VND44 billion ($1.95 million), down 95 per cent year-on-year. However, the whole of 2016’s credit provision cost reached VND5 trillion ($221.5 million), up 7 per cent year-on-year.
The bank’s return on equity (ROE) and return on assets (ROA) were 10.9 per cent and 1 per cent respectively in 2016. It continued to be one of the leading banks in State budget contribution, with a total of more than VND2.274 trillion ($100.7 million) contributed to the State budget during the year.
This year, Vietinbank will completely settle bad debts instead of in 2018 as planned earlier and will keep bad debts at only 0.5 per cent of total outstanding loans in 2017. From 2007 to 2010, Vietinbank settled nearly VND10 trillion ($440.52 million) of bad debts through a provision of risk loans and a recoupment and sales of bad debts.
During the bank’s year-end conference that was held last month, Chairman Mr. Nguyen Van Thang revealed that Vietinbank will merge with PG Bank in the times to come. Also, the bank sets to raise its total assets by 15 to 17 per cent and outstanding credit by 18 per cent this year.
On an earlier note, the bank issued non-convertible five-year bonds worth VND2 trillion ($88.6 million) at annual interest rate of 5.8 per cent. Compared with the interest rates of other bonds issued recently, the 5.8 per cent rate is considered to be the lowest rate. It’s even lower than the 7 per cent interest rate per year for deposits that are over three years in Vietinbank. In December of 2016, the bank also issued 10-year bonds worth VND2.9 trillion ($128.5 million) at and interest rate of 7.5 per cent for the first five years.

Eximbank schedules 2017 AGM amid mountain of bad debts

Eximbank will hold its 2017 annual general meeting on April 21 in Ho Chi Minh City, where a vote will be taken for additional Board members for the 2015-2020 term and discussions on other matters expected to be put forward at an extraordinary shareholders meeting last year.
A maximum of three Board members are to be voted in but the specific number will be determined later by the Board itself, according to a bank announcement released on January 20.
The bank will receive nominations from January 21 to March 3 and expects to check nominees’ profiles from March 7 to March 17. It also expects to submit nominees’ documents to the State Bank of Vietnam for approval on March 20.
Last year, the bank held its annual Board meeting twice, but both failed to gain a quorum of 65 per cent of shareholders. An extraordinary shareholders meeting was then scheduled for August 2 but was postponed, as the central bank requested the bank check information regarding shareholder group rights to nominate candidates to the Board.
In 2015, Eximbank postponed its annual Board meeting three times, to the end of July. In December, an extraordinary shareholders meeting was held in order to vote for the Board of Directors and a representative of a main shareholder group was eventually selected. Questions were then raised about the vote’s transparency.
In December last year, the bank asked the Ho Chi Minh City Stock Exchange (HoSE) to extend the deadline for submission of its 2016 financial statements. It said in the request that the preparation of the financial statements had met timing difficulties due its reliance on figures from its subsidiary, the Eximbank Asset Management Company.
Once a leading commercial lender, Eximbank is experiencing the worst difficulties in its history. Its consolidated financial statement for the third quarter of 2016 showed a pre-tax profit of VND202 billion ($8.95 million) for the first nine months of the year, down 70.15 per cent year-on-year and equal to just 20.23 per cent of the annual plan.
The modest figure was due to a decline in lending while at the same time risk provision costs had increased 85.2 per cent since the beginning of 2016. From January to September, lending fell 4.79 per cent to VND80.69 trillion ($3.57 billion) and was the lowest among listed banks. Its loan-to-deposit ratio (LDR) fell from 86.11 per cent to 78.2 per cent at the end of 2015 and stood at 80 per cent as at the end of June 2016.
In a report released in November last year, the Ho Chi Minh City Securities Corporation (HSC) predicted that Eximbank would continue to record heavy losses in the fourth quarter of 2016 and that profit figures were unlikely to turn around in the short term.
Non-performing loans (NPLs) fell from 5.3 per cent as at the end of June to 3.35 per cent as at the end of September, thanks to the conversion of bad debts to bonds from the Vietnam Asset Management Company (VAMC). But its adjusted bad debt rate is the highest among the group of listed commercial lenders, at 8.7 per cent, followed by Sacombank with 7 per cent and Saigon-Hanoi Bank with 4.9 per cent, according to a banking report released in December last year by Vietcombank Securities.

VinaCapital: Banks in sights of foreign investors

One or two large foreign banks will increase their existing stakes or take on new holdings in Vietnamese banks after the relaxation of foreign ownership in domestic lenders, according to VinaCapital’s latest market commentary report.
The banking sector is one of three critical areas in need of restructuring over the 2016-2020 period, in addition to State-owned enterprises (SOEs) and public investment. Still, the banking system is yet to recover from its 2011 crisis, when the State-owned shipping company Vinashin went belly up. A proper solution to combat bad debts is yet to be found, while banks’ financial figures are still unsteady at best, making the sector the hardest to restructure.
“While there has been some progress in strengthening State-owned banks, the pace of reforms has been slow and the consensus is that much more needs to be done in terms of consolidating banks, cleaning up non-performing loans, and otherwise strengthening the system as a whole,” the report’s authors wrote.
But a solution for the sector’s recapitalization needs has appeared, as Vietnam will increase the limits on foreign ownership in banks as early as this year to hasten the overhaul of the country’s banking system and further attract overseas investments to boost economic growth, Prime Minister Nguyen Xuan Phuc told foreign media on January 13.
While the Prime Minister didn’t specify the new ceiling to be introduced, which currently stands at 30 per cent, he indicated that the government may completely sell the more troubled banks. “Right now, if there are any foreign investors interested in buying any of our under-performing banks, we will sell them entirely,” he said.
The opening up of Vietnam’s banks to more foreign investment is expected to speed up the country’s rise to emerging-market status and boost a stock index that’s already near a nine-year high. Still, much will depend on where the ownership limit threshold is set, as strategic investors will only be interested if they can take substantial stakes and influence management, according to Mr. Attila Vajda, Managing Director at Project Asia Research and Consulting Pte in Ho Chi Minh City.
“The relaxation of foreign ownership limit in banks might possibly be decided for each individual case,” Executive Chairman of Dragon Capital, Mr. Dominic Scriven, told VET.
As for bad debt settlement, VinaCapital believes laws will be changed to allow the Vietnam Asset Management Corporation (VAMC) to better fulfil its mandate, as it has been hamstrung in terms of how it can sell the distressed assets it has bought.
This year, the core mission of the banking sector is the restructuring of five commercial banks. That includes the three “zero dong” banks that the State Bank of Vietnam (SBV) acquired in 2015, as well as Dong A Bank and Sacombank. Some senior executives from State-owned banks have now become leaders of these distressed banks, with Vietinbank executives appointed to manage OceanBank and GPBank while Vietcombank Deputy CEO Mr. Nguyen Van Tuan joined VNCB in March 2015.
Regarding the banking sector’s outlook, “healthy economic growth plus a recovery in the real estate market are likely to lead to a slower non-performing loan formation, at least in the short term,” according to Fitch Ratings. Liquidity and funding conditions should continue to be supported by local currency stability and benign inflation.
On the economic front, provided there is no repeat of the drought of 2016 or other disasters, natural or man-made, VinaCapital’s Chief Economist believes that 2017’s GDP growth will come in at 6.5 per cent, inflation 5.5 per cent, and credit growth 16-18 per cent, while the Vietnam dong will stand at VND23,200 per USD.

New coast for Cam Ranh International Seaport

After coming into operation last March, Cam Ranh International Seaport has received tens of large civilian and military vessels from many countries including India, Japan, France, Singapore, Russia, the U.S., China and Australia who have come in visits.   

That is the fruit of a historic decisive policy by the Government to develop the former military port into an international seaport doing the mission of national defense in combination with economic development.
 
Cam Ranh Port is located in Cam Ranh Military Base, Ba Ngoi Ward, Cam Ranh city, the southern province of Khanh Hoa.
 
The military base has a strategic position from that we can see the whole East Sea. It is also the nearest access location of international maritime routes, the Truong Sa (Spratly) and Hoang Sa (Paracel) Islands as well as oil and gas fields on the southeast continental shelf of Vietnam. 
 
The base has seen little influence of storms for positioning in airtight Binh Ba Bay with the defense of hundreds of large and small islands. The advantageous geographical location suits building of quays to receive, maintain and repair big military and civilian vessels.
 
Despite the geographical advantages, Cam Ranh Port had previously served military purposes. Therefore, the policy  issued recently asked the port to exploit its advantages, develop and integrate into the world.
 
Tan Cang-Petro Cam Ranh Company was established with the investment capital of VND2 trillion (US$88.3 million) to implement the policy. Of these, Sai Gon Newport Corporation contributed to 75 percent shares.
 
The Ministry of National Defense approved the first phase of the project to build marine services and seagoing vessels supply complex at the base.
 
On March 8, 2016, the first phase was completed, opening Cam Ranh International Seaport for service, receiving foreign warships to dock at for maintenance, refueling and logistics services.
 
The main function of the port is handling military vessels and international passenger ships, supplying marine services, intensifying relations with international naval forces, contributing in raising the country’s position in the world, ensuring conditions for warships’ operations to fight and protect the East Sea peaceful and stable.
 
The port fully gathers advantages in national defense and economic development.
 
So far, Cam Ranh has become the largest seaport of Vietnam in term of wharf length, been able to accommodate vessels of up to 110,000 DWT and handle 18 vessels at the same time and 185 ships a year.
 
The is the first port in Vietnam designed for vessels to anchor in force 8 gales moving 60-75 kilometers an hour.
 
At the port’s opening ceremony in March, then President Truong Tan Sang required good implementation of each investment phase in order to develop Cam Ranh into a modern prestigious logistics port. 
 
He expected that the port would not only reach out to the world level but also could compare with the most modern ports in the world and not become behind the times even a century later.
 
Colonel Uong Xuan Phuc Son, director of Tan Cang- Petro Cam Ranh Company, said that the port had supplied almost items that a civilian vessel or a warship needs.
 
Opening the port for both domestic and foreign civilian and military vessels was a socioeconomic development policy of Vietnam, showing the country’s open-minded point of view to international friends, he said.
 
Vessels from different nations in the world have arrived at Cam Ranh Port on the spirit of equality and respecting Vietnam’s sovereignty and law.
 
Despite many difficulties, for instance, the procedure of ship arrival has not been fluent, the company will do its best to develop the seaport in all fields, ensuring both national defense and socioeconomic development as per expectations of the whole party and people, he stressed.

Business community and the goal of a startup country

Vietnam is working hard to realize the goal of 1 million startups by 2020. This endeavor requires great efforts by both the Government and business community.

The startup movement is growing strongly in Vietnam, mostly in the IT and service industries. 30% of 200,000 businesses in Hanoi are startups.

The Hanoi Association of Small and Medium Enterprises has established a fund to support businesses and encourage bigger companies to assist startups.

Mac Quoc Anh, the Association’s Vice Chairman and Secretary General, said “Startups should focus on breakthrough products to avoid competition from bigger and more experienced businesses. In addition to advanced technology application, creativity and dynamism are among the most important factors for startups.”

The FPT group is cooperating with foreign foundations and incubators to create 5,000 technology firms in Vietnam by 2020.

Tran Huu Duc, Director of FPT Ventures said that FPT will offer financial support and expertise to help startups create products for both domestic consumption and export.

“We’ve cooperated with Korea’s Hanhwa group, Dragon Capital, and BIDV Securities Company to establish a foundation which supports startups with access to capital, international markets, and training,” he said.

President of the Vietnam Chamber of Commerce and Industry Vu Tien Loc said “The Government’s target of 1 million startups by 2020 is very important to develop Vietnam into a country of startups. A series of policies and measures have been introduced to encourage startups and innovation and build a constructive and business-serving Government.”

Overcoming challenges to create momentum for economic growth

The year of 2016 was considered as a year full of challenges for Vietnam's economy as internal problems remained cumbersome while the international situation witnessed unpredictable developments.

Nevertheless, Vietnam’s macro-economy continues to be maintained and consolidated, creating momentum for economic growth in 2017.

Bright outlook

According to the Ministry of Planning and Investment, GDP growth in 2016 was estimated at around 6.21%, macroeconomic stability was maintained, and inflation was controlled at 4.75%. 

Economic experts said that amidst difficult conditions, Vietnam's economic growth of over 6% showed a remarkable effort. 

More importantly, Vietnam saw steady economic development, macroeconomic objectives related to growth, inflation, employment, money value, foreign exchange reserves, macroeconomic stability, were all on the whole achieved.

Specifically, in 2016, Vietnam's budget collection increased while interest rates were reduced, foreign currency and gold markets also maintained stability. 

Foreign exchange reserves of Vietnam reached a record high of about US$41 billion. In 2016, Vietnam still recorded a trade surplus of US$2.68 billion as exports rose by 8%. 

Meanwhile, total social investments accounted for 32.5% of GDP. Disbursement of foreign direct investment (FDI) capital in 2016 was estimated at US$15.8 billion. 

The stability of the economy recorded positive outcomes in regards to the inflation index. 2016 was a successful year in controlling inflation amidst rebounding prices of some essential goods, as the CPI in December increased by 4.75% from 2015, lower than the 5% target set by the National Assembly.

Another positive signal for the economy is that the number of newly-established firms hit a record high of 110,100 in 2016, up 16.2% from 2015, according to the Business Registration Management Agency under the Ministry of Planning and Investment. 

The new enterprises have a combined registered capital of VND891 trillion (US$39.2 billion), a year-on-year increase of 48.1%. The number of businesses resuming operations in 2016 reached 26,689, up 43.1% from 2015.

Deputy Minister of Planning and Investment Dang Huy Dong said the figures reflect the recent growth of Vietnamese enterprises and improvements in the investment climate, creating an impetus for the country’s economic development in the period of international integration.

The newly-established firms created jobs for nearly 1.3 million workers. Most of them are operating in real estate, health care and social assistance, and education and training.

Exerting efforts to reach 2017 target

Despite the encouraging results achieved in 2016, Vietnam’s economy is still facing many difficulties and challenges in the coming year, notably the slow process of economic restructuring, bad debt, and high public debt, among others. This has put tremendous pressure on the State budget collection, and economic growth.

The National Assembly has adopted a resolution on the socio-economic development plan for 2017, which aims for a gross domestic product (GDP) growth rate of about 6.7%. The plan also targets a 6-7% rise in export-import revenue, and a trade deficit accounting for some 3.5% of the total trade turnover.

While the consumer price index is hoped to increase by around 4%, total social development investment is expected to reach 31.5% of the national GDP. Vietnam is set to have its household poverty rate decline by 1-1.5% under the multidimensional measurement.  

The respective health insurance and forest coverage is hoped to reach 82.2% and 41.45% next year. The plan targets a stable macro-economy, economic restructuring associated with growth model reform, and improvement of the economy’s competitiveness. 

It also looks to encourage sustainable start-ups, ensure social welfare, proactively respond to climate change, increase environmental protection, and step up administrative reforms.

According to Le Quoc Phuong, Deputy Director of the Vietnam Industry and Trade Information Centre, if the regional and global economic situations witness favourable developments, Vietnam could reach 6.5% of GDP growth in 2017.

Meanwhile, the World Bank (WB) and Asia Development Bank (ADB) have forecast that Vietnam’s GDP growth will reach 6.3% this year, while the International Monetary Fund (IMF) have set the figure to 6.2%.

The National Financial Supervisory Commission of Vietnam (NFSC) has predicted that this year Vietnam’s economy will improve due to the reform of institutions and the investment environment, as well as the price recovery of energy and farming products on the world market, creating a new impetus for the private sector.

The National Centre for Socio-economic Information and Forecast (NCIF) under the Ministry of Planning and Investment has two scenarios for domestic economic development this year based on the impact of the Government’s directions and an IMF forecast of global GDP growth of 3.4%.

According to the more likely first scenario, the domestic economy will remain stable and development and local investment will continue to improve. Vietnam will benefit from its global integration to improve exports and investment. That would translate into 6.44% GDP growth and inflation of 5% in 2017.

The second scenario forecasts a 6.72% GDP growth rateand inflation of 6% if it further improves the structure and efficiency of the economy. Policy management as well as legal and investment environment reforms in 2016 have begun to have an effect, the NCIF says. 

The consumption index is increasing slowly and steadily. The State implemented flexible management of monetary and exchange rate policies, in the hope of achieving an average basic interest rate of 6% in 2017. The nation is forecast to achieve its money supply and credit growth goals.

Vietnam welcomes over 1 million foreign visitors in January

Vietnam welcomed more than 1 million foreign visitors in the first month of 2017, representing rises of 12.3 percent compared to the previous month and 26 percent year-on-year.

 According to the Vietnam National Administration of Tourism, the flow of tourists from almost markets witnessed an increase, with China topping the list (up 67.9 percent).

It was followed by Laos (up 41.7 percent), Russia (36.5 percent), Belgium (27.6 percent), Sweden (27.3 percent), Spain (27.2 percent), the Netherlands (24 percent), New Zealand (20.8 percent) and Finland (18 percent).

Meanwhile, the number of domestic holidaymakers reached 5.7 million in January. Total earnings from tourism services hit 38.6 trillion VND (1.7 billion USD), representing an increase of 28.5 percent year-on-year.

Vietnam’s tourism sector expects to welcome 11.5 million international visitors and served 66 million domestic holidaymakers in 2017, raking in 460 trillion VND (20.3 billion USD).

The sector also aims to receive from 17-20 million international tourists and serve 82 million domestic visitors by 2020, contributing 10 percent to the gross domestic product (GDP). Its revenue from tourism is expected to reach 35 billion USD.

Agro-forestry-aquaculture export at 2.54 billion USD in January

The export turnover of agriculture, forestry and aquaculture in January is estimated at 2.54 billion USD, a year-on-year decrease of 1.4 percent, according to the Ministry of Agriculture and Rural Development. 

Of which, aquatic products earned 518 million USD, down 5 percent against the same period last year, while major forestry products brought home 652 million USD, up 2.1 percent year-on-year. 

Vietnam exported about 325 tonnes of rice worth 136 million USD in the review period, a year-on-year decreases of 32 percent in quality and 35.1 percent in value, the ministry said.

Meanwhile, 127,000 tonnes of coffee were shipped abroad in January for 287 million USD, down 25.5 percent in volume and 3.6 percent in value against the same period last year.

Strong tumbles were recorded in the export value of other farm products such as tea, cashew nut, pepper, and cassava.

The country earned 16 million USD from exporting 11,000 tonnes of tea in the period, reducing by 3.6 percent in volume and 8.6 percent in value compared to those in January last year. 

The export of cashew nut saw decreases of 20 percent and 4.4 percent in terms of volume and value, respectively. 

Rubber was the only product maintaining stable export growth, with 193 million USD earned from shipments of 102,000 tonnes, up 84.8 percent in value  and 10.5 percent in volume from the same period last year.

Bach Long Vi island district thrives from sea

Bach Long Vi is the farthest island of Vietnam in the Gulf of Tokin and it is making all-out efforts to implement the national marine strategy by 2020 in a bid to prosper from the sea.

Covering around 2.5 square kilometres when the tide is rising and about 4 square kilometres when the tide is receding, the island became a district of the northern coastal city of Hai Phong under the Government’s Decree 15/CP dated December 9, 1992. 

Despite its small scale, the island with its significant strategic position has long been regarded important in the country’s marine economic development, security and national defence strategy in the Gulf of Tonkin. 

Later in 1994, the Prime Minister issued Decision 397/TTG approving the development of the Bach Long Vi island district into a district-level administrative unit and a fishery logistics centre in the Gulf of Tonkin.

With a harbour that went into operation in 2000, the island district provides storm shelters for about 11,000 fishing boats each year.

Bach Long Vi is home to many species of sea grass, 65 seaweed species, 94 coral species, 110 species of marine zooplankton, 227 species of marine phytoplankton, and 451 species of marine fish. 

It also boasts 17 species of mangroves and 125 benthic or seafloor dwelling species.

The island, housing nearly 1,000 residents, has been built to become a fishery logistics centre, thus receiving average annual arrivals of up to 30,000 boats and 200,000 fishermen.

Do Duc Hoa, Chairman of the Bach Long Vi People’s Committee, said his district has been prioritizing three strategic missions for socio-economic development by 2020, which are protecting the national sovereignty over seas and islands, building infrastructure system and developing the economy based on sea and island.

Bach Long Vi, together with Song Cam, Dinh Vu, Lach Huyen, Nam Do Son, formed the main terminals of Hai Phong seaport.

Endowed with a huge resource of valuable marine creatures, Bach Long Vi has chosen fishery and services as its spearheaded sectors.

From 2017, the locality is aiming to develop a wide range of key services, including logistics, oil & gas, banking, insurance, marine medicine and finance.

Bach Long Vi has all potentials needed to become a hub of eco-tourism as well as high-end marine and convalescence tourism in the future.

The local authorities are also working to make the Bach Long Vi marine reserve set up under the Prime Minister’s Decision No 2630/QD-TTG operate in a more efficient manner.

The Bach Long Vi marine reserve is among the eight biggest fishing grounds in the Gulf of Tonkin. Its fish and squid reserve amount to 78,000 and 5,000 tonnes, of which 38,000 and 2,500 tonnes can be caught on an annual basis. People also found sea cucumbers and abalones gathering in large here in addition to the residency of many rare and endemic species.

The sea-based economic activities have contributed to better the living standards of islanders. 

Recently, the Hai Phong youth association has launched a number of projects in a bid to accelerate the economic growth in the Bach Long Vi island district.

One of these projects is the construction of a clean water reservoir with a capacity of 60,000 cubic metres. Under a total investment of almost 188.2 billion VND (8.3 million USD), the project will soon complete its first phase.

Once become operational, it is expected to supply 500 local residents with drinkable water and contribute to encouraging more people to relocate to the island.

The youth association has also put an abalone breeding centre into operation, which helped create jobs for locals, protect the environment and sustainably develop the economy.

According to Dao Trong Tue, Vice Chairman of the Bach Long Vi district People’s Committee, the district recorded positive outcomes in socio-economic and cultural development in the first half of 2016 that exceeded all quotas set for the period.

Bach Long Vi will steer future development of its economy towards industry & construction, trade & commerce and agro-fishery, with average budget collection growing between 12 and 15 percent per year.-

Da Nang set to achieve robust maritime economic growth

The central coastal city of Da Nang has issued a planning for the economic development of sea and island areas to 2020 with the aim to optimise the locality’s strength and potential to create socio-economic development breakthroughs.

The planning, seen as part of the city’s efforts to realise Vietnam’s sea and island strategy to 2020, also clarifies prioritised areas and projects for both local and foreign investments in sea and island areas.

Da Nang is among the 28 coastal localities of Vietnam and one of the 14 central cities and provinces having the coastline. Six out of its eight districts border the sea. The city has 90km of the coastline and 80 percent of population living in coastal districts and wards.

Thanks to its wide sea area, Da Nang city has high potential in fishery, tourism and sea transportation.

The city’s sea has a fishery reserve of about 1.14 million tonnes, accounting for 43 percent of the country’s total, with more than 670 species, including 110 species with high economic values.

The south Hai Van-Son Tra peninsular area is home to a diverse ecosystem, including coral reefs, sea grass, seaweeds and rare creatures and plants.

With a goal to become a fishery centre of the central region posting a 14-15 percent growth in seafood exports per year, Da Nang has set to focus on offshore fishing and minimize near-shore fishing activities in a bid to restore and preserve fishery resources. The city aims to rapidly expand the fleet of offshore fishing vessels with high capacity and upgrade those with small capacity.

The city has paid much attention to vocational training to provide high quality workforce with skills and knowledge needed to operate modern fishing equipment to serve the fishery sector.

At the same time, Da Nang has invested in a fleet of 10 fishery logistic vessels with a capacity of 800-1,000CV each, thus supplying fuel and at the same time buying fresh seafood at sea. It fishermen are being supported by modern communication information system when operating at sea.

To improve catch output and minimize human and property losses during operations at sea, the city has issued a regulation on fishermen’s teams that laid the foundation for the activity of gathering individuals to an organization in which members help each other in production as well as in search and rescue activities, safeguard the traditional fishing grounds, assist each other in the procurement of fishing tools and equipment, connect vessels, maintain contacts between fishermen at sea and the mainland, and receive weather forecast and guidelines on disaster response and search and rescue from the mainland.

The model has been lauded by local fishermen who found that the groups meet their demands during their production at sea.

Vu Dieu Ngan from the Da Nang Institute for Socio-economic Development Research said that to make the maritime economy play the core role in the city’s economy, Da Nang should focus on strengthening fishing activities, especially offshore fishing, while continuing improving the capacity and effectiveness of the sector.

She also stressed the importance of increasing the application of science and technology as well as quipping modern equipment for fishing vessels.

The city should expand the seafood processing system for exports, while upgrading Da Nang port to ensure its performance as the gateway to the sea for the Central Highlands as well as Laos, Cambodia, Thailand, Myanmar and other northeastern Asian countries, said Ngan.

Meanwhile, Dan Hung from the municipal People’s Committee said that the city has exerted efforts to implement commitments to the development of the maritime economy, while resolutely safeguarding the country’s sovereignty over sea and islands.

The city has built its own strategy to realize the country’s sea and island strategy, with solutions and steps suitable to the country’s conditions while  making the best use of foreign investment and technology to conquer the sea, serving the country’s economic development in a rapid and sustainable manner, said Hung.

Thua Thien – Hue develops Lang Co tourism trademark

The central province of Thua Thien – Hue aims to establish a tourism trademark for Lang Co, which was listed as one of the most beautiful bays of the world by the Worldbays Club in 2009.

Thua Thien – Hue also aims to make Chan May – Lang Co a modern marine urban zone, an ecotourism site and a hi-tech centre, creating impetus for the development of the central key economic region by 2020.

Lang Co, in Phu Loc district, lying between two major central cities, Hue and Da Nang, plans to explore its favourable geographical location and beautiful scenery to become an attractive destination on the Central Vietnam Heritage Road, which includes the world heritages of Phong Nha Ke Bang National Park, Hue ancient city, Hoi An ancient town and My Son sanctuary. 

It is home to Chan May deep-water port, one of the gateways to the sea for the East-West economic corridor.

Over the past years, investment capital has been poured into developing infrastructure in Lang Co, including Chan May port, the Hai Van Pass and Lang Co bridge, laying a foundation for socio-economic development in the locality and enhancing trade in the region.

Effortshave been made to develop infrastructure in the Chan May-Lang Co economic zone in order to make it a large and modern international trade hub in the central region, as well as a tourism centre of regional and international stature.

The province has also built a modern Chan May urban zone with Hue-styled architecture, linked with the urban chain from Hue – Chan May – Lang Co – Da Nang – Chu Lai – Dung Quat – Nhon Hoi – Van Phong, with a view to turning Lang Co into a magnet to investors at home and abroad.

Chan May port, with an upgraded wharf at 12.5 metres deep can now accommodate 30,000 - 50.000 tonne vessels and cruise ships carrying over 3,000 passengers. In 2016, it welcomed 60,000 international tourists to Hue. It is expected to handle between 4.8 – 5.4 million tonnes of cargo by 2020, and 8.9 – 10.2 million tonnes by 2030. 

Director of the Chan May Port JSC Huynh Van Toan said the port is among 46 sea ports selected by the Asia Cruise Association as a stop for pleasure boats in Southeast Asia. Located between the central cities of Hue and Da Nang, and near numerous local tourism landscapes, it connects the central Vietnam with Laos, Thailand and Myanmar. 

Over the past five years, Lang Co has witnessed fast economic and social development.

The Lang Co touristsite has seen an annual increase of 25 percent and 20 percent in tourist number and revenue, respectively. This year, Lang Co aims to draw 700,000 tourists and generate around 1 trillion VND (44 million USD) in revenue.

According to Director of the provincial Department of Culture and Sports Phan Tien Dung, besides offering discounts, coastal resorts should expand sea-based tourism products, such as meetings, incentives, conferences and exhibitions tourism.

The province will continue connecting with regional localities to tap the potential of the Central Vietnam Heritage Road and tourism sites along the East – West economic corridor to promote Lang Co tourism.

The locality also encourages investment in developing infrastructure in Lang Co in order to form a cultural and ecological tourism triangle together with Bach Ma National Park and Chan May port.

The tourism sector aims to focus on human resources training while expanding and improving tourism services to lure more tourists, Dung said.

Lang Co is situated 45km from Hue and 55km from Da Nang. Endowed with blue waters and white sandy beaches and vast forests atop mountains, the bay is a prime tourist destination with many hotels, motels, and resorts. 

Lang Co is Vietnam's third bay to be admitted to the World-Bays after Ha Long and NhaTrang.

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