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BUSINESS IN BRIEF 3/4

 Automated customs system launched; Central bank adds to forex reserves; Industry minister grilled by NA deputies; Russia - Vietnam’s 18th largest foreign investor; Labour demand outstrips supply

Diesel prices to fall, petrol stays unchanged

The ministries of Finance and Industry and Trade have asked the local petrol distributors to reduce the prices of diesel and mazut.

A press release said that the price cuts would be between VND121 and 239, or between US$0.005 and $0.011, per litre from yesterday.

The Viet Nam National Petroleum Group, which has the largest share of the diesel market, now sells the fuel at VND22,600, or $1.076, per litre, which is VND240 lower that the previous price. Kerosene now sells at VND22,480, or $1.070. A kilogram of mazut is selling at VND18,760, or $0.89, which is VND130, or $0.006, lower than the previous price.

Meanwhile, the petrol prices remain unchanged. On April 1 morning, Ron 92 was being sold at VND24,690, or $1.175, and Ron 95 at VND25,190, or $1.199. According to the press release, wholesale petrol enterprises are being allowed to add VND150, or $0.007, to their current profit of VND150, per litre.

The two ministries said the decision to cut fuel prices was based on the global prices and is in accordance with the principles defined in Decree 84 on petrol and oil trading.

Ha Noi exhibition spotlights northern supporting industry

Advanced precision engineering and manufacturing technologies from the Czech Republic, Singapore and Taiwan (China) are on display at an exhibition that opened in Ha Noi yesterday.

Organisers said that the 3rd International Precision Engineering, Machine Tools and Metalworking Exhibition (MTA Ha Noi 2014) is a "leading event" that serves the supporting industry in the north of Viet Nam and surrounding regions.

They said that at this year's event, exhibitors from the previous two exhibitions have expanded their pavilions to showcase more solutions that will help increase productivity and spur development of supporting industries.

MTA Ha Noi 2014 has the latest cutting, moulding and tooling systems, metrology machines and hand tools, among many other engineering advances.

William Lim, Project Director for MTA, said the three-day event was of great value because it would help businesses in the region see and apply latest production technologies.

Oshima Masayu, director general of Japanese firm Kamogawa, said his company had been working in Viet Nam in the last eight years and wished to expand its client network.

His company saw MTA Ha Noi was an ideal venue to access the northern Viet Nam market.

The event includes seminars on several issues pertinent to support industries as well as a welding competition, organisers said.

Automated customs system launched

A new automated customs system which is able to deal with declarations within three seconds became operational on April 1, according to the Customs of Viet Nam under the Ministry of Finance.

Customs departments in Ha Noi and Hai Phong City, began applying the Viet Nam Automated Cargo and Port Consolidated System/Viet Nam Customs Information System (VNACCS/VCIS), with the customs agency in HCM City due to adopt the system from May 15.

Deputy Director General of the Customs of Viet Nam Vu Ngoc Anh said via VNACCS/VCIS that businesses could make customs declarations at anytime and from any location to save time and paper.

The system aims to facilitate trade and investment activities, improve Viet Nam's competitiveness and improve the State's management of customs, he stated.

After a three-month trial that kicked off in November last year, up to 18,196 enterprises have registered to join the system, and 10,154 have run it on a trial basis.

VNACCS/VCIS, worth nearly 2.7 billion JPY (US$21.2 million) was funded by the Japanese Government and is scheduled to be rolled out across Viet Nam from June 1.

Central bank adds to forex reserves

The State Bank of Viet Nam (SBV) purchased roughly US$7.7 billion worth of foreign currency for the national foreign exchange reserve in the first quarter this year thanks to stable foreign exchange rates, SBV Governor Nguyen Van Binh said.

The purchase had enriched the national forex reserve, which was reported to be more than $30 billion at the end of last year, and would help stabilise the forex rate, he said.

However, Binh noted that increasing foreign exchange reserves put a large amount of pressure on the Vietnamese dong, because the goal was to inject money without causing inflation and foreign exchange rate fluctuations.

The exchange rate between the Vietnamese dong and the US dollar quoted at local commercial banks yesterday was stable at VND21,075-21,085 and VND21,115-21,125 to the dollar for bid and ask, respectively.

The interbank rate quoted at SBV transaction offices has remained unchanged at VND21,036 to the dollar from late June last year.

Binh said that in the first quarter of this year, monetary and gold markets were also stable.

He said that the monetary market had shown positive signs after nearly a month of interest rate cuts. Although the deposit interest rate for 1-6 month terms was cut to 6 per cent from 7 per cent last month, bank deposits had risen sharply. Lending rates for corresponding terms were also cut by 0.5-1 per cent, he said.

Binh added that lending in March was up 1 per cent month on month.

With increased lending in March, Binh said he was unconcerned about credit growth this year, adding that he expected the 12-14 per cent annual credit growth target to be achieved.

Exports to Turkey surge 33%

Vietnam’s exports to Turkey shot up 33.49% to US$184.47 million in the first two months of 2014.

Vietnam’s principal exports to the Mid-eastern nation included telephone handsets and components, pepper, steel, tools, means of transport, electronics and components, seafood, and wood and timber products.

Telephone handsets and components topped the list of exported products to Turkey, with gross export revenue of US$85.59 million, up 82.89%.

Other exports with high growth included pepper (194.95%), steel (153.56%), tools (126.57%), means of transport and tools (83.59%), electronics and components (79.17%), seafood (62.81%) and wood and timber products (46.43%).  

Turkey holds an important strategic position, especially in economic and trade development for the world, including Vietnam.

The nation is considered a gateway for Vietnamese products to further penetrate the European, Middle Eastern and North African markets.

Australian wool producers market products in Vietnam

The Australian Wool Innovation (AWI) is introducing Vietnamese businesses to its wool products to expand its exports in the Southeast Asian nation.

AWI is also building up contact with Vietnamese businesses to transfer their modern wool and yarn processing technology.

The move helps Australia reduce its reliance on the Chinese market as 75% of its wool is exported to China.

AWI general manager Jimmy Jackson revealed AWI is discussing the possibility of establishing a wool weaving factory in Vietnam with three Vietnamese and six foreign companies.

Vietnamese producers are currently importing yarn from China, India, Italy and Germany. Experts say domestic yarn processing will help save import costs and time for small orders.

US lowers Tra fish anti-dumping duties

The US Department of Commerce has announced its final decision on the ninth results of its administrative review (POR9) for anti-dumping duties on Tra fish fillets imported from Vietnam.

The Vietnam Association of Seafood Exporters and Producers (VASEP) reported under the March 31 decision, Vietnamese frozen Tra fish filets exported to the US are subjected to anti-dumping taxes.

Accordingly, the anti-dumping duties on products of two mandatory reviewed companies, Vinh Hoan and Hung Vuong, are US$0.03 per kilo and US$1.2 per liko, respectively, and for other companies, US$0.42 per kilo.

Truong Dinh Hoe, VASEP General Secretary, said the new anti-dumping tariffs were much lower than levels announced in the preliminary POR9 issued last September, when the tax imposed on products from Hung Vuong Corporation and Vinh Hoan Corporation was US$2.15 and US$0.42 a kilo, respectively, while other exporters had taxes of US$0.99 a kilo.

Hoe said that  after receiving the preliminary decision of POR9, the association and enterprises had worked to protect them against troublesome tariffs. This brought encouraging results.

However, the new tariffs remained high, Hoe said, adding that Vietnam had sufficient reasons to show that businesses had not dumped Tra fish on the US market.

In addition, choosing Indonesia instead of Bangladesh as previously as the sole benchmark country in calculating the anti-dumping rate of the DOC was unreasonable, Hoe said.

Indonesia is not “economically comparable” to Vietnam and does not share similarities with Vietnam in breeding standards and input costs, thus, choosing it as the sole benchmark country in calculating the anti-dumping rate led to high anti-dumping tax rates, he said.

He suggested the DOC reconsider its investigation involved in imposing anti-dumping duties on Vietnamese Tra fish exported to the US.

With the new anti-dumping tax rates, exports of Vietnamese Tra fish to the US will be affected but not much, he said.

Tra fish export revenue was worth US$275 million in the first two months of the year, a year-on-year increase of 8.5%, with the US and EU being two key importers, said To Thi Tuong Lan, VASEP Deputy General Secretary.

The country is expected to earn around US$1.8 billion from Tra fish exports this year, similar to last year’s figure, she said.

Leading mechanical exhibition underway in Hanoi

Advanced precision engineering and manufacturing technologies from the Czech Republic, Singapore and Taiwan (China) are on display at an exhibition that kicked off in Hanoi on April 1.

The 3rd International Precision Engineering, Machine Tools and Metalworking Exhibition (MTA Hanoi 2014) is deemed as a leading event of its kind that serves support industries in the north of Vietnam and its surrounding regions.

At this year’s event, exhibitors from the previous two fairs expanded their pavilions to showcase more solutions that will help increase productivity and spur the development of support industries.

MTA Hanoi 2014 features manufacturing solutions such as cutting, moulding and tooling systems, metrology machines and hand tools, among many others.

The three-day event will also include seminars giving participants in-depth views into the industry and a welding competition.

Industry minister grilled by NA deputies

Minister of Industry and Trade Vu Huy Hoang on April 1 engaged in a Q & A session with the National Assembly Standing Committee on issues relating to his ministry’s State management responsibility.

Among those were measures to raise the efficiency and effectiveness of market management as well as the responsibility for the State management of electricity and minerals.

Admitting the fact that foreign traders have bought agricultural products in Vietnam in recent years in the absence of designated representatives as required by law, Hoang said his ministry was aware of the situation and reviewed the legal framework, especially the Law on Trade and the Law on Competitiveness, to deal with it.

Under the law, foreign traders with no official representatives in Vietnam can only purchase Vietnamese goods through a local legal entity. However, many continued to violate this regulation.

The ministry has instructed market management forces nationwide to prevent and settle this problem, he said, adding that since the beginning of this year, the phenomenon has not been seen in many localities.

Hoang attributed this situation to weak popularisation work and ineffective inter-sectoral coordination.

In the coming time, the ministry will continue to improve the enforcement capacity of competent forces, especially market watchdogs, in order to promptly prevent the illegal activity, he said.

Regarding the State management of minerals, he said that his ministry was responsible for the illegal export of minerals, which caused losses to the State budget and natural resource depletion.

The Ministry of Industry and Trade will collaborate more closely with other ministries and localities, particularly those in mountainous areas, in the management of businesses involved in extracting minerals.

Responding to NA deputies’ questions on the shortage of power for agro-seafood production in the Mekong Delta region, Minister Hoang said the rapid development of aquaculture areas in the region has resulted in a power supply-demand imbalance.

The power sector will do its best to meet the demand for agricultural production, he noted, asking localities to better their planning work to ensure sufficient power supply.

He suggested the NA allocate budget for a programme to bring electricity to rural areas.

Also at the session, which was broadcast live, the minister reported to the NA Standing Committee the outcomes of the “Vietnamese people use Vietnamese goods” programme.

Russia - Vietnam’s 18th largest foreign investor

Russia currently has 97 initiated foreign investment projects in Vietnam with a combined capitalization of US$1.95 billion, ranking it the 18th largest foreign investor in the country.

Ministry of Planning and Investment statistics show Russian investments are mostly focused on processing and manufacturing with 34 projects totaling US$1.1 billion.

The mining industry has attracted 7 projects valued at US$581.2 million, and the real estate industry has lured 3 projects worth US$72.7 million.

Russian businesses have also invested in construction, wholesales, retails, repairs, agriculture, forestry and seafood processing.

Russia has invested in 23 localities, and Binh Dinh province tops the list with 5 projects worth US$1.531 billion, followed by Hanoi with 23 projects capitalized at US$129 million.

Meanwhile, Vietnam has 19 investment projects totaling US$2.47 billion in Russia. The largest is the US$2.02 billion Rusvietpetro joint venture project invested by the Vietnam Oil and Gas Group (PVN) in Nhenhenxky to explore and exploit oil and gas.

The Hanoi-Moscow Commercial Centre Company, with registered capital of US$190 million, is offering entertainment, hotel and office leasing services in Moscow.

Hanoi to host Francophonie cooperation forum

The Ministry of Foreign Affairs and International Organisation of La Francophonie (OIF) will jointly host a forum on economic cooperation forum in Hanoi on April 3-4.

The event will bring together 150 Vietnamese and foreign delegates, with keynote speakers from the Ministry of Agriculture and Rural Development, the Ministry of Industry and Trade, the Vietnam Chamber of Commerce and Industry, OIF, economic cooperation organisations, businesses and development partners

The forum aims to expand the Francophonie business network by creating a dialogue to stimulate economic exchanges and develop key potential cooperative relationships for the benefit of the economic development.

Topics at the forum will address the Francophonie comprehensive economic strategy for the Asia-Pacific region and its positive impact, along with practical orientations towards sustainable economic growth.

Labour demand outstrips supply

There was a significant imbalance of workers with appropriate qualifications to meet demand for business across a number of sectors in the first quarter of the year, VietnamWorks reported on April 1.

Employment demand grew by 11% in the first three months compared to the same period of last year, while the labour force expanded only 8%, the report said.

VietnamWorks CEO Jonah Levey said those who are lacking in academic credentials or sufficient work experience are entering fierce competition to secure employment.

Meanwhile, employment recruiters are struggling to find qualified job applicants, he said.

The situation remains relatively unchanged from 2013, demonstrating that despite steady growth in quantity of jobs, the phenomenon of lack of quality in the labour market continues to plague the economy.

Underqualified job candidates are in a tough position searching for employment. For instance, in the first quarter of this year, for every “entry level” job (the lowest level in businesses) there were 101 candidates applying for the position, according to VietnamWorks.

The competition is triple or five times greater than that to enter a reputable university in Vietnam, demonstrating just how harsh conditions in the labour market at low levels truly are.

The fields with the highest recruitment demands include import-export, information technology, business administration, industrial production, customer service, sales and marketing and construction.

Import-export tops the list with demand rising 45% against the same period last year.

In terms of labour force supply, the fields experiencing the greatest need for qualified candidates span accounting, production, IT, software, import-export, design and architecture.

Particularly, demand for accounting surged sharply while its supply dropped significantly.

Five localities with the highest demand for employees are Hanoi, Ho Chi Minh City, Binh Duong, Bac Ninh and Danang.

Some emerging localities which have impressive growth in labour demand are Ba Ria-Vung Tau, Ha Nam, Quang Ninh and Ha Tinh.

Among 10 localities seeing the highest number of job applications, Ho Chi Minh City, Danang, Bien Hoa recorded highest competition rate – one applicant has to compete with 60 others on average for every job.

Manufacturing orders pick up

Growth in the Vietnamese manufacturing sector regained momentum at the end of the first quarter with both output and new orders increasing at faster rates than seen in the previous month, and new export orders returned to growth.

According to an HSBC monthly Purchasing Managers Index (PMI) report released on Tuesday , employment decreased for the first time since June 2013.

Meanwhile, the rate of cost inflation slowed and firms lowered their selling prices marginally.

The headline seasonally-adjusted – a composite indicator designed to provide a single-figure snapshot of operating conditions in the manufacturing economy – posted 51.3 in March to signal a modest improvement in overall business conditions.

The reading was up slightly from 51.0 in February and pointed to a seventh consecutive monthly improvement in operating conditions.

Solid new order growth was recorded in March, with the rate of expansion quickening to the strongest in five months. Panelists reported a general improvement in demand across the sector.

New export orders also increased in March, following a marginal reduction in the previous month.

Growth of new orders led manufacturing firms to increase production for the sixth month running.

Moreover, the rate of expansion quickened from that seen in the previous month.

The rise in production helped firms to make inroads into backlogs of work during March.

Outstanding business in the sector fell for the fifth month running, albeit at the slowest pace in this sequence.

Increased output requirements led firms to raise their purchasing activity.

Input buying grew for the seventh successive month and at a solid pace which was only slightly weaker than the series record seen in January.

Despite this, stocks of purchases continued to fall marginally as inputs were consumed in the production process.

Stocks of finished goods also decreased, although the rate of depletion slowed sharply as a number of panelists reported that finished products had been held in stock rather than delivered to customers.

Employment at Vietnamese manufacturing firms decreased in March, ending a seven-month sequence of job creation.

Panelists indicated that the main reason for the fall in staffing levels was that employees had left in order to find jobs elsewhere.

The rate of input cost inflation slowed for the third consecutive month.

Although shortages of some raw materials had led suppliers to raise prices, falls in commodity prices in world markets had reportedly been behind slowing inflation.

In spite of the continued rise in input costs, manufacturers lowered their output prices marginally amid reports of strong competitive pressures.

Suppliers' delivery times were broadly unchanged. Where an improvement in vendor performance was recorded, this was linked to requests from firms for faster deliveries.

On the other hand, material shortages had led to delays in some cases.

Commenting on the Vietnam Manufacturing PMI survey, Trinh Nguyen, Asia Economist at HSBC, said: "The decline of employment and input cost inflation reflect the bottlenecks of the economy: a mismatch between skilled labour demand and skilled labour supply and sluggish pace of financial sector reform, which has dampened consumer demand, dragging down price pressures."

Viet Nam-Brazil trade to reach $3b in 2014

The two-way trade between Viet Nam and Brazil crossed US$490 million in the first two months of this year, up 122 per cent year-on-year, according to the General Department of Custom's statistics.

Of the total, Viet Nam's exports comprised $216 million, a yearly rise of 53 per cent, while its imports saw a significant increase of 244 per cent to reach $275 million.

Experts have forecast that the bilateral trade will likely reach $3 billion by the year end if further trade promotion programmes and business conferences in both countries were conducted.

Dong Nai ranks third in Q1 industrial production

The Index of Industrial Production (IIP) in the southern province of Dong Nai increased by 7.1 per cent in the first quarter of this year, ranking third after Hai Phong (11.3 per cent) and Da Nang (10.5 per cent).

According to the provincial Department of Industry and Trade, the IIP in March was up 9.3 per cent from the previous month and 4.5 per cent against the same period last year.

In the first three months, nine out of 16 sectors enjoyed significant growth, including chemical production (26.7 per cent) and leather and associated products (22.2 per cent).

Meanwhile, declines were seen in food processing, the production of tobacco, paper, rubber and plastic products.

Le Van Danh, the department's director, said that to maintain growth, the province would focus on solving administrative difficulties, increasing the sale of inventories and improving export policies.

It would also provide businesses with information about domestic and foreign markets in order to boost exports.

The department also plans to invite enterprises to participate in several fairs outside the province, including the 2014 Lifestyle Fair in April and the International Vietbuild Exhibition in June in HCM City.

ADB forecasts slight growth in Vietnam's GDP

The Asian Development Bank today forecast that Viet Nam's GDP growth would rise slightly to reach 5.6 per cent in 2014 and 5.8 per cent in 2015.

The bank said that this follows the progress made in addressing the weaknesses of the domestic banking sector, accompanied by the economic recovery in the US and the Euro zone.

In its Asian Development Outlook 2014 report released in Hanoi, the bank officials called upon the Government to create a level-playing field for public-private partnerships in order to engage more private investment in developing public infrastructure and services.

Dominic Mellor, country economist for ADB Vietnam, said the new Public Private Partnership decree needs to put greater emphasis on competition, which means projects must be awarded through competitive bidding and should follow standard international practices.

The outlook also forecasts that the growth patterns in Southeast Asia would be dominated by country factors and would be around 5 per cent in 2014, as the gains made from better export markets are offset by moderate domestic demand.

AWI considers setting up wool factory in Vietnam

Australian Wool Innovation (AWI) has stated that it is in discussions with three Vietnamese companies and six foreign firms about the possibility of establishing a wool weaving factory in the Southeast Asian country.

Vietnamese producers are now importing wool yarn from China , India , Italy and Germany . Experts predict that domestic processing will help save import costs and time.

AWI is making efforts to intensify connections with Vietnamese businesses to help them access its natural wool products as well as Australia ’s wool and yarn processing technologies.

It considers this move as a solution to reduce Australia ’s dependence on the Chinese market as 75 percent of its wool is now exported to China.

Binh Duong works to remain destination for FDI

The southern province of Binh Duong, as a major foreign direct investment (FDI) recipient, plans to attract more FDI by facilitating current investors, Chairman of the provincial People’s Committee Le Thanh Cung has said.

According to the provincial Department of Planning and Investment, since the beginning of 2014, Binh Duong has received over 726 million USD in FDI, more than 70 percent of its annual target and 40 percent of Vietnam’s total FDI attraction over the period.

Of the figure, more than 533 million USD was injected into 28 existing projects.

Director of the department Mai Hung Dung said the flow of more capital into existing projects indicates that the registered money was disbursed effectively.

There are now 2,276 FDI projects in Binh Duong with a total investment of some 20 billion USD. In 2013, the FDI sector contributed about 75 percent of the province’s industrial production value and 80 percent of Binh Duong’s 16 billion USD of export turnover.

Dung said the accomplishment was thanks to regular dialogues between authorities and the business circle to remove all obstacles, better the administrative process, and enhance mutual trust.

Industrial parks that meet investors’ various demands and the newly opened administration centre are also said to be magnets for investment. Additionally, another investment attraction channel is through businesses running in the province that have updated their partners about local conditions.

From now to 2030, Binh Duong will build industrial parks covering thousands of hectares. It will also step up training a quality workforce to satisfy the demand of technology projects.

With 216 projects totalling over 4.6 billion USD, Japan is leading the 39 countries and territories investing in Binh Duong. Each Japanese project has an average investment capital of 21.3 million USD, the highest level among foreign-invested projects in the industrial sector.

The provincial People’s Committee considered Japanese investors as trustworthy partners, whose projects suit Binh Duong’s preferences such as transport, technology and electronics.

CEO of Japan’s Saitama Agata Bank Suzuki Tsutomu attributed Vietnam’s favourable investment environment to a stable political situation and an abundant and capable young workforce, which have encouraged Japanese investors to come to Vietnam and Binh Duong in particular.-

Measures for central coastal seafood growth

A conference was held on March 29 in the central coastal province of Phu Yen to look at measures to promote trade for sustainable aquatic development in the region.

With nine provinces and cities, the region is endowed with a coastline of 1,400 km –making up 43.8 percent of the nation’s total shoreline, and extensive fishing grounds, particularly Hoang Sa and Truong Sa.

Figures from 2012 show the region is home to 46,201 fishing boats and over 200,000 fishermen. The area for aquatic cultivation was estimated at 33,778 ha, producing over 180,000 tonnes of produce worth 27 trillion VND (1.3 billion USD).

Attendees put forth a number of solutions to develop the industry in a sustainable manner, such as restructuring the sector by increasing added value, promoting the links between fishermen and businesses, perfecting the fisheries infrastructure system, and enhancing the quality of human resources.

The application of new cutting-edge technology and bettering policies in the field are two of the measures needed to realise the target, participants said.

Many scientists have also proposed the Government enforces incentives linking high-class tourism and aquatic development with protecting the national sovereignty over seas and islands.

The conference is part of the 2014 Seafood Festival which is underway in Phu Yen province (March 27 - April 2).-

Local spending remains modest

Consumer spending rose 5.1 per cent in the first quarter of this year reaching US$33.4 billion, up 10 per cent on the same period last year, the General Statistics Office (GSO) announced yesterday.

In March alone, consumer spending reached $11 billion, rising 2 per cent on the previous month.

However, not all welcomed the news, with GSO economist Vu Manh Ha describing the 5.1 per cent increase as a modest gain compared with the previous years. Consumer spending was 5.0 per cent and 4.5 per cent recorded in the same period in 2012 and 2013 respectively.

Ha explained that a low consumer price index (CPI) had contributed to the modest rise. In the first quarter of 2014, CPI increased 4.65 per cent, while it rose to 16.4 per cent in the first quarter of 2012 and to 6.64 per cent in the first quarter of last year.

He also noted that purchasing power in March had stayed low due to consumers reigning in spending after the Lunar New Year shopping season. Spending had also slowed with the pace of economic growth.

Meanwhile, many businesses have maintained halts on production in response to low spending and high inventories.

According to the statistics from GSO, in the first quarter of this year, the number of businesses stopping production had risen 10 per cent on the same period last year, while the inventory index stood at 13 per cent.

Low consumer spending is expected to continue for the next few months.

Domestic wood exports surge in Q1 on track to annual target

The country's exports of wood and wooden products in the first quarter surged by 20.1 per cent against the same period last year to US$1.4 billion, according to the Ministry of Agriculture and Rural Development (MARD).

In March alone, wood and wooden product exports hit $490 million.

The US and China were Viet Nam's largest wood and timber product importers in the first three months of this year, accounting for 52.89 per cent of the industry's total export value. Viet Nam's exports to the US and China rose 19.85 per cent and 57.88 per cent year on year in Q1, respectively.

General secretary of the Viet Nam Timber and Forest Product Association, Nguyen Ton Quyen, said Viet Nam aimed to export a total of $6.2 billion worth of wood and timber products this year, up 9 per cent compared to 2013.

Quyen added that the export target was feasible as local exporters had signed a significant number of export contracts.

Bilateral and multilateral agreements, including the European Forest Law Enforcement, Governance and Trade (FLEGT) and Voluntary Partnership Agreement (VPA), expected to be signed this year, would be a good opportunity for Viet Nam.

Viet Nam currently only had access to markets in Germany, France, Britain and Spain. If Viet Nam could export to the 27 EU countries, market potential would grow, Quyen said.

Quyen added that authorities should change current standards to fit new EU regulations. Awareness of partners in the wood and timber industry remained low regarding new trade deals, limiting opportunities provided by the VPA/FLEGT.

However, he noted that if the TPP was signed in 2014, enterprises must be prepared to adapt to large markets such as the US, Japan, Australia and New Zealand and Canada.

He explained if the country bought wood outside the TPP block, wood products exported to TPP countries would incur high taxes and strict legal supervision, but the tariff rate would be zero if wood was bought from the TPP block, he said.

SBV prohibits movement of undeclared gold

Vietnamese and foreign individuals have been banned from carrying gold bars and gold raw materials when leaving or entering Viet Nam from May 15.

This was announced in Circular No. 11/2014/TT-NHNN, issued by the State Bank of Viet Nam (SBV) on March 28.

The circular allows the carrying of gold jewellery and fine art made of gold provided the total weight of these objects is not more than 300 grams (10.5 oz). In case travellers bring more than the permitted amount, they must declare it to customs officials.

The circular further stated that this rule also applies to foreign individuals who are permitted to reside in Viet Nam.

According to the circular, Vietnamese people living abroad can carry gold, including gold bars and gold materials, ranging in weight from 300 grams (10.5 oz) to less than 1 kilogram (35.2 oz), and must declare it to the customs authorities. If the weight of the gold is 1 kilogram or higher, the carriers must present a license from the SBV.

Since May 2012, the SBV has been the only gold importer in Viet Nam. This was done in order to manage the local gold market. Also in 2012, the SJC gold brand, which was originally from the Sai Gon Jewellery Company, became the state brand and the most prestigious gold brand in the local market.

Circular No. 11 replaces Decision No. 1165/2001/QD-NHNN on the carrying of gold across the country's borders.

Transport SOEs drive through successful IPOs

The success of the initial public offerings (IPO) of the State-owned transport enterprises in Q1 is likely to send out positive signals on the long-waited equitisation.

Deputy Prime Minister Vu Van Ninh said that the positive results would remove the hesitant sentiment on the stock market.

From January to March, five out of the nine State corporations under the Ministry of Transport managed to successfully offer shares to the public.

The Transport Engineering Design Inc sold all shares at VND21,848 each, twice the initial price, generating VND56.8 billion, or US$2.7 million, for the State. The Viet Nam Waterway Construction Corporation gained VND91 billion, or $4.3 million; the Civil Engineering Construction Corporation 4 (Cienco 4) got VND226.5 billion, or $10.7 million; Cienco 1 made VND162 billion, or $7.7 million; and the Thang Long Construction Corporation made VND258.5 billion, or $12.2 million.

Four other corporations under the ministry, however, failed to reach the target, including Cienco 5 which sold only 13.4 per cent of the shares, Cienco 6 which sold 4 per cent, the Waterway Construction Corporation which sold 36.3 per cent and Vinamotor which sold 3 per cent of the shares.

The Ministry of Transport is also speeding up the equitisation of units controlled by the Viet Nam National Shipping Lines (Vinalines). The parent company of Vinalines is expected to issue an IPO by Q1 2015.

None of the IPOs issued by the four corporations under the Ministry of Construction succeeded.

Deputy Head of the Steering Committee for Business Renovation and Development Pham Viet Muon said the strategic investor participation did help to make some of the IPOs successful. Those who failed didn't have any strategic investors.

According to economic think-tank Vo Tri Thanh, one of the key things that the State-owned enterprises need to do to attract strategic investors is to improve information transparency and set up a committee for strict supervision of the equitisation process.

Economists suggested that the companies whose IPOs failed should shift to the joint stock model so as to improve administration and supervision, which would help their next IPO.

The Ministry of Finance plans to submit new regulations to boost equitisation and the withdrawal of State capital.

In a draft to amend the Viet Nam Law on Enterprises 2005 on practices of the State-owned enterprises (SOEs), the Ministry of Planning and Investment proposes to regulate periodic and upon-request information disclosure at SOEs. This shows a growing pressure to restructure this driver of the economy.

The Southeast Asian economy plans to get a total of 432 SOEs equitised during the 2014-15 period, or 216 enterprises per year. Viet Nam is well on its way to carrying out a full-scale reform of the bloated state-owned enterprises. Between 1986 and 2013, the number of state-owned enterprises fell from 12,000 to 1,284.

Market recovery paves way for IPOs

The rapidly recovering stock market has created opportunities for enterprises to consider listing on exchanges.

The stock market is appealing more to the investors with the VN-Index advancing nearly 20 per cent, while the HNX-Index soaring 30 per cent in the first three months of this year, coupled with the trading value reaching trillions of dong per session.

Chairman of the State Securities Commission Vu Bang remarked that the stock market will continue to grow along with macroeconomic improvements.

The Government's determination to restructure the stock market has also helped to attract both foreign and domestic investors. He noted that there has been a rise in both foreign direct and indirect investments into Viet Nam, thereby boosting the stock market to show further growth.

In addition, the draft regulation on increasing foreign stakes in listed enterprises was submitted to the Prime Minister for review and will soon be issued. This will bring opportunities for further development of the stock market and will help the enterprises to get access to capital sources and improve their financial condition.

According to Bui Hoang Hai from the Securities Issuance Management Department, it was the right time for public companies to consider listing to raise capital, given the rapid market gains in the first quarter.

He urged the companies to be well prepared for the procedure, as the opportunities could fly away, adding that several companies still did not have a complete understanding of the regulations. According to statistics, violations related to information announcement by public companies accounted for about 20 per cent of the total violations handled.

In September last year, the Decree No. 108/2013/ND-CP was issued, which regulated that companies must be listed on the exchange within a year of their initial public offerings.

Support industry expo takes place

Ha Noi Trade Promotion Centre (HTPC) will co-operate with Thailand's Reed Tradex Co to organise an exhibition on the support industry in the capital city from August 27 to 29.

The event is expected to help provide the Vietnamese industry with access to advanced technology and industrial products in the global chain as well as to management systems and designs so that it can follow new trends.

The Viet Nam Manufacturing Expo 2014, which will see participation by 200 brands from 20 countries, will showcase manufacturing machinery and technologies, Reed Tradex said in its latest press release.

"The expo will also be a good opportunity for industrial part-making factory owners, engineers, production managers and industrialists to source new solutions, new parts, new suppliers, new partners and new knowledge to keep up or lead the change that the promising future of the regional ASEAN Economic Community will bring," it noted, adding that trade programmes and business seminars in which Vietnamese companies can meet domestic and overseas partners will be also included.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR

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