Prime Minister urges faster disbursement of ODA capital, concessional loans

Prime Minister Nguyen Xuan Phuc urged faster disbursement of ODA capital and concessional loans while chairing a meeting with some ministries, sectors and localities in Hanoi on August 1.

The Ministry of Planning and Investment reported that from 1993, when Vietnam recovered its relations with international sponsors, to June 2017, the country inked agreements on non-refundable loans and aid worth some 82.61 billion USD.

As of the end of June 2017, 810 programmes and projects were being implemented with total undisbursed capital of about 21.167 billion USD. The sum will be disbursed from now through 2026 according to the agreements’ schedule, but most of the sum, 17.485 billion USD, is set to be disbursed between 2017 and 2020. 

Total ODA capital and concessional loans able to be disbursed in 2017 are about 4.6 billion USD, of which about 33 percent, or 1.5 billion USD was disbursed in the year’s first half, according to the ministry.

Participants at the meeting pointed out shortcomings in the use and management of ODA capital and sought measures to address those problems.

PM Phuc said ODA capital has significantly contributed to national development, and the majority of it has been used effectively.

All of the signed ODA capital and concessional loans must be disbursed on schedule, he stressed, adding that each project owner must review their capacity and responsibility and  withdraw or seek other funding sources when realising their incompetence.

The Government leader also instructed ministries, sectors and localities to facilitate ODA capital and concessional loans. He told them soon build plans on ODA and concessional loans attraction for 2018 and three-year financial plans.

Nearly 670 million USD raised through G-bond auctions in July

The Hanoi Stock Exchange (HNX) organised 14 auctions of Government bonds in July, raising 15.17 trillion VND (667.48 million USD) which fell by 32 percent from the previous month.

While five-year bonds were sold with annual interest rates of between 4.48 and 4.9 percent, annual interest rates for seven-, 10- and 15-year bonds are 4.95-5.19 percent, 5.38 percent and 5.75-6.25 percent, respectively.

The sold 20- and 30-year bonds bear the respective interest rates of 5.82-6.55 percent and 6.22-6.65 percent per annum.

The interest rates dropped sharply compared to those in June, down 0.42 percent for five-year bonds, 0.25 percent for seven-year bonds, 0.27 percent for 10-year bonds, 0.55 percent for 15-year bonds, 0.85 percent for 20-year bonds, and 0.88 percent for 30-year bonds.

On the secondary market, more than 1.02 billion G-bonds worth some 110 trillion VND (4.84 billion USD) were sold via outright transactions in July, down 1.3 percent in value from June.

Meanwhile, over 988 million G-bonds worth 98.8 trillion VND (4.35 billion USD) were sold via repo transactions, down 0.42 percent in value from June.

Vietnam Motorshow 2017 opens in HCM City

The Vietnam Motorshow 2017, themed “Connected Technology for Smart Moving”, kicked off at the Saigon Exhibition and Convention Centre in Ho Chi Minh City on August 1.

More than 80 models of 12 brands, namely Chevrolet, Ford, Do Thanh, Fuso, Honda, Isuzu, Lexus, Mercedes-Benz, Mitsubishi, Nissan, Suzuki and Toyota, are being displayed at the event.

Outstanding new designs include XM Concept of Mitsubishi; LC500h 2017, LS 2018 and NX300 2018 of Lexus; Avanza 2017, Alphard 2017, Wigo 2017 and Corolla Altis 2017 of Toyota; GLA 2018 of Mercedes-Benz; and Celerio 2017 of Suzuki.

The show also attracts 50 companies specilising in automobile-related products and services. It is a platform for car brands to seek customers and partners.

Meanwhile, visitors will have a chance to test drive and receive advice on various car designs.

The show also features seminars on “women and cars”, “technology and cars”, and “connected technology for smart moving”.

The Vietnam Motorshow 2017, organised by the Vietnam Automobile Manufacturers’ Association, will last through August 5.

Deputy PM Vuong Dinh Hue requests reviewing poor districts

Deputy Prime Minister Vuong Dinh Hue requested the Ministry of Labour, Invalids and Social Affairs to carefully review poor districts in accordance with Resolution 30a while chairing a meeting of the Central Steering Committee on National Target Programmes in 2016-2020 in Hanoi on August 1. 

The meeting was meant to review the progress of the national target programmes on sustainable poverty reduction and new rural development and set the committee’s tasks to accomplish the targets of this year. 

Speaking at the event, Hue said public capital disbursement remained slow, equivalent to over 30 percent in seven months. 

He asked the Ministry of Planning and Investment (MoPI) to review resources allocation in the two national target programmes to devise proposals to add into the Government’s resolution on speeding up the progress and quality of public investment disbursement. 

The MoPI must coordinate with the ministries of Finance and Agriculture and Rural Development to promptly issue a detailed guideline on criteria for basic construction debts in the national target programmes on new rural development. 

Hailing the efficiency of credit for new rural development, Hue required the Vietnam Bank for Social Policies (VBSC) to study resources to increase credit for the campaign. 

The Deputy PM also called for special attention to be paid to “soft criteria” of poverty reduction, like cultural values, living environment, social safety and order, and livelihoods. 

According to Deputy Minister of Planning and Investment Nguyen Van Hieu, the total State funding for the national target programmes this year amounts to over 15.23 trillion VND (662.2 million USD), including 8 trillion VND (347.8 million USD) reserved for the National Target Programme on New Rural Development and the remaining for the National Target Programme on Sustainable Poverty Reduction. 

Deputy Minister of Agriculture and Rural Development Tran Thanh Nam said as of the late July, the country recorded 2,776 communes recognised as new-style rural areas, 223 of them met criteria for 2016-2020, up 416 compared to the late 2016. 

As many as 34 districts have been recognised as new-style rural areas and the figure is estimated at 38 this year. 

The Ministry of Labour, Invalids and Social Affairs reported that the total State funding for social welfares and poverty reduction in the first half hit 4.174 trillion VND. The rate of poor households nationwide is expected to drop to 6.9 percent later this year, down 1.33 percent annually. 

VBSC General Director Duong Quyet Thang said the bank offered loans worth 34.65 trillion VND to 1.32 million poor households in seven months this year, or more than 70 percent of the target set by the Prime Minister. 

Minister of Agriculture and Rural Development Nguyen Xuan Cuong and Minister of Labour, Invalids and Social Affairs Dao Ngoc Dung underscored the need to soon remove difficulties in public investment, encourage firms to invest in agriculture and rural areas, and lay a legal framework to rally social resources on new rural development.

Thua Thien – Hue’s farmed fish, seafood output surges

The total output of farmed and off-shore caught fish of the central province of Thua Thien-Hue reached 30,388 tonnes in the last seven months, showing a year-on-year increase of 18.72 percent.

Of the figure, over 20,286 tonnes were caught from sea, up 28.4 percent.

Seafood export earned the province around 16 million USD, up 2.1 times. 

These figures showed the recovery of the locality’s aquaculture and fishing activities after the marine environmental incident last year.

As many as 1.01 trillion VND (nearly 44.44 million USD) of compensation from the incident’s doer has been handed over to 41,766 locals from 28 affected coastal communes and townships.

In the coming time, the localities will continue assisting those who wish to switch jobs, developing offshore catch and fish farming, towards enabling the locals to secure sustainable livelihoods.

The natural resource and environment sector will strengthen marine environment monitoring work to better serve local aquaculture.

The mass fish deaths were first reported on April 6, 2016 when a large number of fish washed ashore in Ha Tinh province. The incident also occurred in Quang Binh, Quang Tri and Thua Thien-Hue.

About 70 tonnes of dead fish were found in the four provinces and Thua Thien-Hue alone reported 35 tonnes of farm-raised fish had died.

The pollution also affected more than 260,000 people who earn their living from the sea.

In June last year, Formosa Ha Tinh accepted responsibility for the fish deaths and pledged compensation to local fishermen and to help renew the polluted marine environment.

Natural gas distribution businesses form strategic alliance

Tokyo Gas Asia Pte Ltd, a wholly owned subsidiary of Tokyo Gas Co, Ltd, has acquired a 24.9% equity interest in PetroVietnam Low Pressure Gas Distribution JSC, a subsidiary of the PetroVietnam Gas JSC.

Along with the equity interest acquisition, Tokyo Gas Asia and PVGas D have agreed upon a strategic alliance under which the Tokyo Gas Group will utilize its technologies and expertise in such areas as demand development to enhance the business value of PVGas D.

The Tokyo Gas Group announced it would continue to utilize its technologies and expertise in total energy businesses on behalf of customers operating in Southeast Asia and North America, helping them with energy solutions, while engaging in local infrastructure development.

The Tokyo Gas Group is also taking up the challenge of value chain development in each region, including through joint ventures with local energy companies.

SOE restructuring must be more efficient: experts

The restructuring of state-owned enterprises (SOEs) needs to be done more efficiently so that they become engines that boost economic growth, experts said.

The SOE restructuring process is being implemented very slowly and poorly, according to the report on strengthening state-owned enterprises in the 2016-2020 period (facts and effects), released by the Central Institute of Economic Management (CIEM).

From 2016 to May 2017, only five SOEs were equitised, while the assets of 38 SOEs were evaluated but they did not receive approval for equitisation. Another 107 SOEs are in the evaluation process. Till date, equitisation has been slow and the quality of equitisation activities has not improved. 

Selling state-owned shares continues to be difficult, the report says. The reasons are that the policy for selling shares has not changed, and many of the regulations are not grounded in reality. As a result, state-owned shares have not attracted investors outside of enterprises.

The report also pointed out that during the 2011-15 period, eight SOEs were declared bankrupt, but from 2016 till date, only one SOE has been declared bankrupt. This is a low figure when the huge losses incurred by SOEs are taken into account.

"The primary reason for this low bankruptcy rate is that the managers and employees of SOEs facing losses do not want them to be declared bankrupt," said Phạm Đức Trung, head of CIEM’s corporate development and reform department. 

The other reasons for low equitisation rate are poor fiscal discipline and weak corporate management.

Also, SOEs have received a lot of aid when they encountered difficulties, so they have not prioritised their own restructuring. Enterprises that are making losses and have inefficient investment projects have not been dealt with thoroughly and in accordance with prescribed rules.

CIEM director Nguyen Dinh Cung said that if the restructuring of SOEs was accelerated, hundreds of trillions of US dollars in capital would get pumped into the economy, creating a new growth engine that could help even exceed targets. However, if there was no strong will to restructure SOEs, it would be difficult to achieve the GDP growth target of 6-7 per cent for 2017.

State assets, including SOEs, must be used more efficiently, instead of trying to boost the economy by increasing the exploitation of crude oil and coal, and mineral exports, Cung advised.

Vietnam’s restructuring plan for SOEs by 2020 will focus on the restructuring of the industries and management. Around 240 SOEs are scheduled to be restructured by 2020. Of this, 103 state-owned and local state-owned enterprises will remain with the state, while it will continue to hold controlling shares in 31 SOEs. The state will also hold less than 50 per cent of the capital in 106 SOEs.

Cung said currently the biggest problem for SOEs was the lack of a supervision model. 

Many economists have said that it is urgent to restructure state-owned assets to collect the maximum state-owned capital from equitisation and continue improving the efficiency of corporate management and operations.

Tran Tien Cuong, head of the team compiling the report, said the process of equitising SOEs must be more efficient, and especially large enterprises at the risk of collapse must be handled carefully. The government has to strengthen the direction and perfect the mechanisms and regulations related to the rights and obligations of related parties in the restructuring process, focusing on equitisation activities.

Deputy Minister of Planning and Investment Dang Huy Dong said that it was necessary to improve the management and supervision of SOEs, to increase transparency of information on their operations, and to enhance the inspection and supervision of the operations of state-owned economic groups and corporations.

In addition, the heads of ministries, localities, state economic groups and corporations should take more responsibility in implementing the restructuring and equitisation plans, Đông said, adding that the government must take strict action against business leaders who don’t efficiently restructure and manage the SOEs.

Short supply of Euro 4 fuel exacerbates pollution in Vietnam

Due to a shortage in supply of a new eco-friendly fuel, drivers in Vietnam are finding it hard to follow a new rule requiring them to refill their cars with petrol that meets the Euro 4 exhaust emission standard.

While most cars in Vietnam are running on Euro 2 standard fuel, a new law effective January 1 mandates that all new automobiles in Vietnam, both imported and domestically assembled, must use petrol meeting the Euro 4 standard.

Another mandatory upgrade, from Euro 2 to Euro 3, was also approved for motorbikes with the same deadline.

Currently applied in several countries, the Euro emission standards, set by the European Union, stipulate average emission targets for toxic substances like carbon monoxide (CO) or carbon dioxide (CO2).

The Euro 2, introduced in 1997, set the CO emission target at 4g/kWh, and the later Euro 4, effective in 2011, lowered that to 1.5g/kWh.

A petrol product must have a lead content of no more than 0.005 grams per liter to meet the Euro 4 standard, compared to 0.013 g/l of the Euro 2.

Drivers told Tuoi Tre (Youth) newspaper that while they want to follow the law, it is not easy to find Euro 4 petrol, even in Hanoi and Ho Chi Minh City.

Duc Thuan, one Hanoi resident, has recently purchased a new car using the Euro 4 standard. However, “it is a tough job finding a filling station with the Euro 4 petrol,” he told Tuoi Tre.

Petrolimex, Vietnam’s largest fuel wholesaler, is the only supplier of the higher grade petrol, but not all Petrolimex stations have this kind of fuel, Thuan added.

“So I sometimes have to resort to using Euro 2 petrol,” he said.

Similarly, Mai Anh, a Ho Chi Minh City commuter with an imported sedan featuring a Euro 4 engine, said that finding a filling station with the correct petrol remain+s a real challenge.

In February, Vietnam’s Ministry of Transport called on the government to postpone the mandatory European emission standard upgrade, citing unpreparedness, even though it had been given a five-year window to be ready.

The transport ministry said there would be an insufficient domestic supply of petrol meeting the new standard, adding that the country’s sole operational oil refinery had also failed to produce such products.

According to the transport ministry, the Vietnam Automobile Manufacturers' Association cited the lack of proper fuel to call for a delay to the Euro 4 upgrade, saying “car engines will break down easier without suitable fuel.”

However, despite this and experts' claims that the mandatory upgrade would not achieve their goals, the government has rejected pleas to delay and insisted that the new law come into effect as scheduled.

Only applicable to new vehicles, not all owners of Euro 4 cars are willing to use the recommended gasoline for their vehicles, especially when there is effectively no mechanism to check which kind of petrol a car is using.

This significant loophole means that drivers will continue to use Euro 2 fuel in their vehicles, especially given that the Euro 4 product is always more expensive.

According to Petrolimex, Euro 4 petrol costs two to five percent more than its Euro 2 and 3 predecessors, respectively.

Dung Quat Refinery, Vietnam’s only operational oil refinery that currently meets around 30 percent of domestic fuel demand, is unable to churn out such standardized petrol products, its operator BSR has admitted.

“Our facility was designed in 1999 and commissioned in 2009, while the Euro 4 was introduced in 2011,” BSR chairman Nguyen Hoang Giang told Tuoi Tre in a February interview.

The refinery needs to be expanded and upgraded to be able to produce the Euro 4-level fuel, Giang said.

“The upgrade and expansion may only be completed by 2022 or 2023, after which we will be able to produce fuel products that meet up to Euro 5 standards,” Giang claimed, adding that the facility’s products now satisfy the Euro 3 standard only.

Electronic firms urged to comply with regulations

Local electronic firms have been urged to enhance compliance with established regulations, especially international labour standards, in order to improve competitiveness and to engage in the global supply chain, heard a conference on August 1.

The conference was jointly held by the Vietnam Chamber of Commerce and Industry (VCCI) and the International Labour Organisation to promote law compliance across the electronics sector supply chain.

The VCCI said that multinational groups and electronics suppliers must co-operate and exchange experiences to promote application of international labour standards at local firms.

The VCCI promised to develop support programmes with aims to improve productivity, reduce risks which might arise from labour disputes and enhance businesses’ reputations.

Specially, Vietnam must create policies that promote the development of the electronics industry into a spearhead sector of the economy.

Electronics were major export products of Vietnam which earned revenue of 18.96 billion USD in 2016, representing a rise of 21.5 percent over the previous year.

Latest updates from the General Statistics Office show that exports of electronic products reached 13.6 billion USD in the first seven months of this year, rising by 43.3 percent over the same period last year. Major import markets include the US, EU and China.

Experts, however, say that the Vietnamese electronics industry is largely dependent on foreign-invested firms, while the cooperation between local and foreign firms remains loose.

Vietnam is promoting the development of support industries, including electronics components, with an aim to meet 60 percent of the market demand by 2020 and 80 percent by 2030.

Regulations key to electronics growth     

Local electronic firms have been urged to enhance compliance with established regulations, especially international labour standards, in order to improve competitiveness and to engage in the global supply chain, heard a conference on Tuesday.

The conference was jointly held by the Viet Nam Chamber of Commerce and Industry (VCCI) and the International Labour Organisation to promote law compliance across the electronics sector supply chain.

The VCCI said that multinational groups and electronics suppliers must co-operate and exchange experiences to promote application of international labour standards at local firms.

The VCCI promised to develop support programmes with aims to improve productivity, reduce risks which might arise from labour disputes and enhance businesses’ reputations.

Specially, Viet Nam must create policies that promote the development of the electronics industry into a spearhead sector of the economy.

Electronics were major export products of Viet Nam which earned a revenue of US$18.96 billion in 2016, representing a rise of 21.5 per cent over the previous year.

Latest updates from the General Statistics Office show that exports of electronic products reached $13.6 billion in the first seven months of this year, rising by 43.3 per cent over the same period last year. Major import markets include the US, EU and China.

Experts, however, say that the Vietnamese electronics industry is largely dependent on foreign-invested firms, while the cooperation between local and foreign firms remains loose.

Viet Nam is promoting the development of support industries, including electronics components, with an aim to meet 60 per cent of the market demand by 2020 and 80 per cent by 2030. 

Vietcombank joins SWIFT GPI     

SWIFT has announced that Vietcombank is the first bank in Việt Nam to sign up for SWIFT GPI -- its global payments innovation initiative.

The bank joins more than 110 of the world’s major transaction banks that are already committed to the largest change initiative that the world of cross border payments has seen in the last 30 years. SWIFT GPI is also bringing in a new world for corporates, dramatically improving the cross-border payments experience of corporate treasurers by enabling enhanced services from their banks.

SWIFT GPI went live in January 2017, and is already revolutionising cross-border payments by combining real-time payments tracking with the speed and certainty of same-day settlement. The service enables enhanced multi-bank business rules, unique end-to-end identification of payment messages across a transaction and a secure “Tracker” database in the cloud that provides real-time transaction status reporting.

Đào Minh Tuấn, deputy chief executive officer of Vietcombank, said: “SWIFT GPI provides an adequate answer to the evolving needs of corporate treasurers by offering a service that is easy to implement, yet removes the friction that currently exists in correspondent banking, such as the lack of speed, transparency and traceability. We look forward to implementing SWIFT GPI and to keep enhancing the services we offer our clients going forward, as new features get released.” 

Vietcombank launches new promotional Campaign     

On the occasion of National Day on September 2, Vietcombank will offer its card holders free-of-charge services relating to debit cards and credit cards from August 1 to September 30.

The bank will issue or extend debit cards, including newly-issued or reissued, for clients free of charge.

If clients have credit cards that are newly issued or reissued, they do not have to pay annual fee during the first year as long as they conduct payment transaction of minimum value of VNĐ100,000 (US$4.4), excluding cash withdrawal transactions.

Deadline for transaction time is one month from the end of the programme, or October 31.

More detailed information can be found on Vietcombank’s website at vietcombank.com.vn. 

Inter-bank rate hits new record low of 0.5%     

Inter-bank lending interest rates have continuously slipped to hit a new record low, according to the latest monetary report by Saigon Securities Incorporation’s (SSI) Retail Research.

The rates for overnight loans in the inter-bank market on Friday declined to 0.5 per cent from 0.82 per cent on Monday, the lowest level since October last year.

The rates for one-week and one-month loans also dropped by 13 basis points to 1.14 and 2.29 per cent, respectively

Thanks to the good liquidity, the central bank last week issued bills worth more than VND40 trillion (US$1.75 billion) with a yield of 0.3 per cent against 0.5 per cent in the previous week.

During the week, the central bank withdrew VND2.5 trillion from the banking system.

HCM City to host 1st HR Tech Asia Conference and Expo     

The impact of technology on today’s workplace, new challenges in human resource management and leadership, transforming HR through technology, HR standards and workforce analysis and what new HR tech solutions are needed will be among the topics discussed at the first HR Tech Asia Conference and Expo to be held in HCM City on August 18.

It will bring together more than 250 local and foreign business leaders, HR professionals, and technology professionals, who will network, gather ideas, explore contemporary trends and solutions in leveraging technology to drive HR strategy and achieving organisational success.

Breakthroughs in technology in many fields have changed the way people live, work and communicate, Huynh Minh Quan, CEO of HR Media Corporation -- the organiser -- said.

Most business leaders aim to innovate and apply technology in HR management and manufacturing to optimise work and improve their competitiveness.

Today with apps for HR management, time and attendance tracking, payroll integrated with electronic personal information system and others, they can easily manage their workforce.

Therefore, in developed countries, technology is a priority not only in the production process but also in HR management.

How many enterprises in Viet Nam focus on technology for HR management, what HR solutions are suitable for Vietnamese enterprises and what are the benefits of using technology in HR management would also be discussed at the event, Quan said.

The event will be held at Gem Center in District 1. 

HCMC sees state budget eroded in July

The HCMC budget took a hit in July from a plunge in import revenues from key products like automobiles and fuels, according to data by the HCMC Customs Department.

Total spending on cars imports in the month between June 16 and July 15 reached US$5.33 million with 288 units compared to US$26.46 million and nearly 1,600 units in the previous 30 days.

With a sharp fall in auto imports, the city’s budget saw its revenue down by VND700 billion (US$30.85 million). At the Hiep Phuoc Port Customs Office where customs procedures are performed for most imported cars, the revenue plunged by half in the first half of July versus the previous 15 days.

In addition, revenue from fuel products including diesel oil, heavy fuel oil and jet fuel amounted to US$179.3 million this month, down US$20.5 million from last month. The decline has resulted in a revenue contraction of VND90 billion for the State budget.

Imports of iron and steel, and other key products decreased US$7.34 million to US$167.7 million, causing a revenue shortfall of VND40 billion for the city.

Moreover, mobile phones and phone components, textiles, pharmaceutical products, household appliances, machinery and equipment also posted lower import value than last month.

Car imports tumble in July

Vietnam spent US$170 million importing about 6,000 completely-built-up (CBU) automobiles in July, down 2,000 units against the previous month, according to data from the General Statistics Office.

Over US$1.2 billion was spent on 57,000 CBU cars in the January-July period, a respective year-on-year decline of 15% and 5.5%. Thus, car imports decreased in both value and volume.

Auto traders said consumers are waiting until 2018 to buy cars when import duty on CBU autos from ASEAN countries fall to 0% from the current 30%.

However, some auto traders advised consumers to buy cars this year as auto retail prices have moved down and are almost equivalent to prices in regional countries thanks to promotion programs. However, consumers thought that discounts offered by traders cannot match the forthcoming fall in the import duty.

In the first half of the year, more than 134,000 cars were sold, inclusive of locally-assembled vehicles, equivalent to the same period last year.

According to the General Statistics Office, in the first seven months of 2017, total imports of autos and auto parts for local assembly reached over US$3.1 billion, down 9.4% year-on-year.

EC probes hand pallet truck imports from Vietnam

The European Commission (EC) has initiated an investigation into hand pallet truck imports from Vietnam over suspicion that these products might have actually originated in China.

According to the Vietnam Competition Authority, the investigation started on July 19 and a conclusion would be announced within nine months from the date of the investigation being launched. The EC suspected that such products are from China, with parts shipped to Vietnam for final assembly and then exported to the European Union (EU) to evade anti-dumping duty imposed on the Chinese products.

The investigation followed a request filed on June 6 by PR Industrial SRL and Toyota Material Handling Europe, which are manufacturers of hand pallet trucks in the EU.

According to the petitioners, the EU’s imports of hand pallet trucks from Vietnam have increased strongly since such products made in China and Thailand were slapped with anti-dumping duty of 70.8% in 2013. Significant volumes of hand pallet trucks imported from Vietnam appeared to have replaced imports of Chinese products.

The petitioners cited the EU’s statistical office Eurostat as saying that imports of hand pallet trucks from Vietnam to the EU had increased from less than 1,000 units in 2011 to over 73,000 units in 2016.

The petitioners said parts of hand pallet trucks originating in China were shipped to Vietnam for assembly and then finished products were exported to the EU under Vietnamese labels to avoid the EU anti-dumping duty.

The petitioners have provided sufficient evidence that such assembly operations amount to circumvention as Chinese parts account for over 60% of the total value of an assembled product and the value added during the assembly operation is lower than 25 % of the manufacturing cost.

Before the investigation is concluded, the EC has decided to make imports of hand pallet trucks from Vietnam subject to registration.

However, exemptions from registration may be granted to Vietnamese producers that can show that they are not related to any Chinese or Thai producers subject to anti-dumping duty, and that they are found not to be engaged in circumvention practices. Producers wishing to obtain an exemption should submit a request duly supported by evidence within 37 days from the date of the investigation being initiated.

Vision for Asia-Europe railway still dim

The vision to develop an integrated freight railway network across Europe and Asia to link Vietnam with the Eurasian Economic Union has encountered a slew of challenges.

As the free trade agreement between Vietnam and the Eurasian Economic Union came into force last October, Kazakh Ambassador to Vietnam Beketzhan Zhumakhanov proposed developing a freight rail service from Vietnam to the union’s member states via China, and a Kazakhstan-Vietnam shipping route.

The ambassador’s vision is to develop logistics services, thereby promoting goods trade between Vietnam and union members, as 90% of tariffs are cut.

The diplomat had said then that the transport of containers by train from Hanoi via the Lao Cai border gate to Kunming-Nanning of China and then to Kazakhstan will take 18-20 days, compared to 40-45 days by sea. As such, goods via the rail service will see their competitive advantages rising.

However, the limited trade volume between Vietnam and the Eurasian Economic Union can be seen a major hindrance to the development of the rail service.

Data of Russian Railways shows Russia shipped more than 5,500 tons of goods to Vietnam, and imported around 326,000 tons from the Southeast Asian nation last year.

Besides, the volume of goods from Russia to Vietnam was over 1,000 tons while the opposite direction was around 29,000 tons. Meanwhile, the respective figures for rail transit were about 169,000 tons and 770 tons.

Russia is the largest market in the union, but its trade with Vietnam is still insignificant.

There are a slew of other problems to remove if the railway is to be developed. In particular, route connection, fares, and service fee schedules should be clear so as to attract customers. Besides, container transport and logistics services should be developed.

Especially, Vietnam’s railway infrastructure has yet to meet international standards. For instance, China uses 1,435-mm standard tracks while Vietnam’s tracks are currently 1,000 mm wide. This leads to costly interchanges to handle the break of gauge at main connecting points in the railway.

New Zealand to open doors for Vietnam’s rambutan

New Zealand is expected to greenlight the import of rambutan from Vietnam this year after completing risk management procedures. 

According to the Government news website, the information was released after a meeting between Deputy Prime Minister Vuong Dinh Hue and senior officials of New Zealand on the occasion of his visit to New Zealand from July 26 to 28.

The Plant Protection Department under the Ministry of Agriculture and Rural Development told the Daily on the phone that rambutan has been shipped to many countries over the years, including choosy markets like the U.S., Canada and the European Union (EU).

However, the Vietnamese fruit remains in the negotiation process to find ways to enter into countries like Australia and New Zealand.

According to international practices, fresh fruits including rambutan have to meet importers’ quarantine requirements. Currently, each country has its specific quarantine criteria for importing fruit, and therefore, Vietnamese fruits must meet such standards if they are exported to foreign markets, a representative of the department said.

Rambutan this year is expected to be available on the shelves of stores in New Zealand, meaning that the domestic fruit will be present in five continents.

Data of the Department of Crop Production under the ministry showed rambutan is mainly cultivated in southern provinces with a total acreage of more than 50,000 hectares. Some 300,000 tons of rambutan is consumed in the local market a year.

Bao Viet Insurance provides insurance coverage to Vietjet

Three leading Vietnamese insurers have signed a contract to provide aviation insurance worth $2.5 billion to Vietjet Air’s 40 aircraft in the 2017-2018 period, with another 28 aircraft expected to be added during the period.

Bao Viet Insurance, PetroVietnam Insurance (PVI), and the Global Insurance Company (GIC) will provide all forms of aviation insurance, applicable worldwide, to ensure the safety of Vietjet’s aircraft, including hull insurance and war risk insurance, among others.

Bao Viet is now the aviation insurer for all of Vietnam’s carriers, Mr. Nguyen Quang Hung, Deputy CEO of Bao Viet Insurance, said. “This reflects the trust of major enterprises in one of Vietnam’s leading insurers, backed by strong financial capacity and rich experience within the industrial insurance sector and key national projects,” Mr. Hung noted.

The result of the partnership will provide the best financial benefits in terms of insurance premiums to Vietjet and ensure full commitment in emergency compensation and the handling of any flight incidents. One point of note is that this is now the seventh consecutive year Bao Viet has provided insurance services to the first privately-owned airline in Vietnam.

With a long-term goal of sustainable development, Bao Viet Insurance has continued to prove its brand and posted solid business results. It retained its No.1 position within the non-life insurance segment last year, with total revenue of VND6.56 trillion ($289.6 million) and profit of VND301 billion ($13.3 million); the highest of all non-life insurers.

From 2016 to early 2017, it opened another eight subsidiaries, expanding its network to a total of nearly 80, along with more than 300 insurance offices and 30,000 agencies nationwide, shoring up its position as possessing the largest network in the country to serve and interact with customers. Furthermore, its 24/7 customer service center and specialized insurance management software has helped it manage its customer database and ensure transparency in insurance activities.

As at June 30, Vietjet boasted a fleet of 45 aircraft, including 30 A320s and 15 A321s, and was conducting 13 more routes than on December 31, 2016. It has already opened 73 routes in Vietnam and across the region to international destinations.

During the first six months this year, it conducted a total of 49,151 flights with 8.27 million passengers, up 22.4 per cent year-on-year. Its technical reliability stood at 99.55 per cent; the highest obtained by any airline operating A320/A321s in the region. On-time performance for the year stood at 85.7 per cent.

VinaCapital arm makes final divestment

Vietnam Infrastructure Limited (VNI), the AIM-quoted investment vehicle established by VinaCapital to target infrastructure and related investments in Vietnam, has announced it has successfully divested 100 per cent of its stake from its last remaining asset, the in-building cellular enhancement systems (IBS) in Southeast Asia Telecommunications Holding Pte Ltd (SEATH).

The buyers are VIBS Pte. Ltd., a consortium formed by JTOWER Inc. and the South East Asia Growth Fund, and a local investor.

“I am very pleased that with the sale of IBS the company has successfully completed its divestment strategy,” said VNI Managing Director Mr. Tony Hsun. “The aggregate net proceeds received from the sale of private equity assets exceeded the hurdle amount approved by the company’s shareholders.”

The company will receive total cash proceeds of approximately $10.2 million within ten business days from July 31. Sale proceeds are at a slight premium to the unaudited net asset value (NAV) of $9.9 million as at June 30.

Following the divestment, the company will make a distribution to shareholders prior to the commencement of the voluntary solvent liquidation process. Further details of the distribution will be released in a separate announcement shortly.

The company will also convene a general meeting to vote on resolutions regarding the commencement of the voluntary solvent liquidation of the company and cancel the admission of the company’s shares from trading on AIM, all of which the company intends to conclude by the end of 2017.

Vietnam Infrastructure Limited is an investment vehicle managed by the Vietnam-based private equity firm VinaCapital.

VinaCapital divested its shares in SEATH in January, to Malaysian telco the OCK Group for $50 million. It continued to hold SEATH’s 150 or more in-building systems and said at the time it would offload the assets later.

AIA partners with DongA Bank

AIA Vietnam Life Insurance Company (AIA) has announced a partnership with DongA Bank to support Vietnamese customers accessing financial security via AIA’s preeminent financial services through digital technology.

Vietnamese consumers are experiencing tremendous economic development, with social progress and improved living standards, and many households are seeking new and innovative financial protections that fit their needs. Understanding this trend, AIA Vietnam and DongA Bank have come together to provide outstanding financial services.

As a creative and innovative insurance company, AIA Vietnam will assist DongA Bank in enhancing the customer experience, providing quick and professional digitalized services. All AIA Vietnam’s insurance advisors at leading branches of DongA Bank will be equipped with the iPoS interactive business support system on iPad to promptly provide financial services.

When customers need more time to consult with their family, a copy of the proposed benefit statement can be sent by email. If customers are interested in the product, AIA insurance consultants will complete the on-the-spot insurance process by recording customers’ information and signatures on the iPoS app.

In addition to its mission of helping customers live longer, healthier and better lives, AIA will also provide customers with the new value-added AIA Vitality; a special healthcare program that motivates consumers to make healthy choices. Through the app, customers will be given personal training goals based on their information, with daily exercise steps tracked to determine whether they meet their goals.

Through DongA Bank’s network of 212 branches and transaction offices, AIA will bring comprehensive products to customers with a range of options and customizations, to help them choose appropriate options and gain the most comprehensive financial protection.

DongA Bank has also deployed 24/7 autobanking booths, allowing customers to carry out most of their financial transactions, such as instant refill, large margin withdrawals, and inter-banking transfers, etc. Designed to meet customers’ financial needs, the autobanking booths are located at convenient and secure locations.

“We believe that everyone should have opportunities to access financial security solutions,” said Mr. Wayne Besant, CEO of AIA Vietnam. “Together with DongA Bank, we will assist clients in achieving their personal financial goals and establishing a sound financial plan to protect their families.”

“I expect this partnership will help our customers access diversified solutions, from finance to insurance, through the provision of full-package financial solutions,” said Mr. Nguyen Thanh Tung, General Director of DongA Bank. “Taking advantage of the bank’s broad network, customers can access insurance products at 212 branches and transaction offices. They can use their DongA Bank account to pay periodic premiums quickly and conveniently. This is a long-term cooperation agreement that provides high-class financial and insurance products to customers.”

Japanese food companies increase presence in Vietnam

Japanese food businesses are seeking to increase their presence in Vietnam, according to Dau tu (Investment) newspaper.

Early this year, the Japan Best Foods company poured more than 14 million USD into processing and preserving meat products at Long Duc industrial park in the southern province of Dong Nai.

The CLK Cold Storage Company Limited – a joint venture between Cool Japan Fund, Japan Logistics Systems and Kline Group - also recently injected 18 million USD to build a cold storage facility in the southern province of Binh Duong.

Naoki Saka, Director General of CLK Cold Storage, said the establishment of a cold supply chain is essential to meet rising demand for food safety.

A delegation of nearly 20 Japanese businesses, including those active in food processing, recently arrived in Ho Chi Minh City to explore investment opportunities.

According to Tatsuhiro Shindo, Vice President of the Japan External Trade Organisation (JETRO), Japanese companies are interested in Vietnam, especially its southern region, including HCM City, Ba Ria – Vung Tau and Dong Nai.

Meanwhile, Takimoto Koji, Chief Representative of JETRO in HCM City, told Dau tu reporters that Vietnamese products like dried fruits, noodle, processed seafood, beef and wine are popular among Japanese businesses.

Many Japanese food companies have entered Vietnam via supermarkets, convenience stores and restaurants. 

Apart from trade centres such as AEON which is present in HCM City, Hanoi and Binh Duong, the number of FamilyMart and Minishop convenience stores has been increasing.

Statistics showed that there are more than 1,000 Japanese restaurants in Vietnam, including 659 in HCM City.

In 2016, Vietnam was one of the five biggest importers of Japanese farm produce and food. The Southeast Asian country spends nearly 4 trillion VND per year purchasing seafood products from Japan.

New payment mode for G-bonds launched

The new payment mode for transactions of Government bonds through the State Bank of Vietnam (SBV) instead of through a commercial bank was launched in Hanoi on August 1.

According to Duong Van Thanh, General Director of the Vietnam Securities Depository Centre (VSDC), payment via the commercial bank mode, as done previously, is only suitable for a small- or medium-sized G-bond market. It is not preferable now when the market develops to a new high level with fast rising transaction value.

In the first half of this year alone, the listing value of the G-bond market reached 979 trillion VND (42.93 billion USD), equal to 18 percent of Vietnam’s GDP. Average transaction value in a session in H1 was 7.7 trillion VND, 21 times higher than in 2009, while the payment value in the market also rose 586 percent against 2010 to 1.2 quadrillion VND.

With the rising value in the G-bond market, payment for transactions of G-bonds should be made through the central bank to ensure safety and ease in the payment of G-bond transactions, Thanh said.

According to the Ministry of Finance, this is a breakthrough in the modernisation of the bond trading system in accordance with international practices. It also helps accelerate the process of international integration of the market, creating a prerequisite for the development of cross-border bond payment services.

Under the new payment model, payment for transactions of G-bonds listed on stock exchanges is carried out using the mode of payment according on each transaction.

Based on the data provided by the stock exchanges, the VSDC identifies the payment obligation of each relevant party and sends the payment information to the SBV.

The transfer of G-bonds is implemented on VSDC’s system on the basis of transferring G-bonds between depository accounts of organisations and ensuring the principle that the selling side has sufficient bonds to be transferred on the payment date and the purchasing side has enough money to pay for the G-bond transactions.

The cash payment for G-bond transactions between organisations, which perform direct payments via the SBV, is conducted through the inter-bank online payment system.

The State Securities Commission of Vietnam decides the payment date for G-bond transactions after reaching a consensus with the SBV. The VSDC is responsible for guiding payment steps and procedures for G-bond transactions.

Tuna exports continue to rise

Tuna exports increased by 21% to US$271 million in the first half of this year, according to the Vietnam Association of Seafood Exporters and Producers.

Tuna exports to major markets all saw a growth against the same period last year, especially exports of processed and canned tuna products rose sharply, by 33.7%.

Tuna fillets remained the key export product, accounting for over 48% of total tuna export value, with US$129 million in the first six months, trailed by canned tuna products with US$81 million (up 33%) and processed tuna products with US$39 million (up 15%). Exports of fresh, frozen and dried tuna products reached US$21 million.

Tuna products have been shipped to 97 countries worldwide. The top eight export markets remain the US, EU, Israel, ASEAN, Japan, Canada, China and Mexico, making up 88% of the total export value.

With an impressive growth of 125%, Mexico became the sixth largest importer of Vietnamese tuna products.

VPBank’s total assets increase 9 per cent in H1     

Total assets of Viet Nam Prosperity Joint Stock Commercial Bank (VPBank) in the first half of this year reached VND249 trillion (US$10.9 billion), up nine per cent from the end of 2016.

VPBank recently announced business results for the first six months of 2017, which show positive performance and reaffirm its sustainable development.

Its deposits increased from VND172 trillion at the end of 2016 to VND195 trillion, equivalent to a growth rate of 13 per cent. Capital adequacy ratio was 12.17 per cent, remaining significantly above the requirement of the State Bank of Viet Nam.

Total operating income increased from VND7.6 trillion to VND11.3 trillion, up 47 per cent compared with the same period last year. Consolidated pre-tax profit reached VND3.26 trillion, exceeding the six-month plan by 10 per cent and increasing by 107 per cent year-on-year.

Consolidated after-tax profit reached VND2.6 trillion, increasing by 108 per cent thanks to customer expansion and service revenue growth.

Customer lending grew by 12 per cent, from VND144 trillion at the end of 2016 to VND162 trillion at the end of June 2017, while total revenue from services increased by 81 per cent, equivalent to VND30 billion.

Income from risk-treated loans was the highlight in the first half of the year, posting a year-on-year increase of 53 per cent, equivalent to VND404 billion. Non-performing loans fell to 2.65 per cent and consolidated non-performing loans fell sharply to 2.81 per cent in the second quarter of 2017.

With these positive business results, VPBank continues to strengthen its position as one of the most effective joint-stock commercial banks in Viet Nam. A representative of VPBank explained that differentiation between the operations of strategic segments has brought higher efficiency and strengthened VPBank’s position in the banking system.