Woodwork, furniture fair targets home market for domestic products

The annual Viet Nam Furniture and Home Furnishing Fair, to be held in HCM City next week, aims to promote locally made furniture, home decor, and handicraft products in the domestic market.

Huynh Van Hanh, the Handicraft and Wood Industry Association of HCM City (Hawa)'s standing vice chairman, said VIFA Home 2014 has attracted 115 local and foreign firms involved in wood processing, interior decoration, and consulting, an increase of 20 per cent from last year.

On display will be outdoor and indoor furniture, handicrafts and home decor, household appliances, garden decor, support services, gifts, souvenirs, handicraft items, and materials for the wood processing industry.

With the Vietnamese housing market yet to recover, the furniture and home decor industry faces difficulties, and their domestic sales is expected to only increase marginally from last year's US$1.9 billion, Hanh said.

From next year, when the ASEAN Economic Community comes into effect, local producers would face fierce competition even in the domestic market, he said.

To remain competitive, firms need to map out long-term business strategies and improve product quality and customer service among other measures, he said.

The fair would offer them a good chance to study consumer tastes and expand their distribution network in the domestic market, he said.

Exports of wood and wood products were worth $4.44 billion in the first nine months of the year, and are expected to top $6.5 billion this year, he said.

VIFA Home 2014, organised by Hawa, will be held at the Tan Binh Exhibition and Convention Centre from November 6 to 9.

Viet Nam targets Egyptian market

Vietnamese and Egyptian businesses should participate in trade fairs and investment promotion conferences in their respective countries to establish direct partnerships and avoid risks associated with third party go-betweens.

Dao Thanh Chung, the Vietnamese Ambassador to Egypt, delivered this message during a forum on advertising Viet Nam's agro-forestry-fishery goods in the Egyptian market last Thursday.

Chung said untapped co-operation opportunities awaited the business communities of Viet Nam and Egypt, since the former has been a large exporter of agro-forestry-fishery products in the world while the latter has seen a significant rise in demand for these goods.

Adel Aref of the Federation of Egyptian Chambers of Commerce cited a lack of market information as one of the biggest barriers for Egyptian companies who wanted to invest in the Southeast Asian country.

He stressed the importance of frequently organising economic conferences where Egyptian companies could receive the latest information on business opportunities in Viet Nam.

Some Egyptian businesses at the event showed interests in importing frozen seafood products from Viet Nam while others hoped to find domestic counterparts in the production and distribution of animal feed.

In spite of significant progress in bilateral trade from 2009 to 2012, trade volume decreased sharply by 24 per cent in 2013 following political unrest in Egypt, according to the Viet Nam Chamber of Commerce and Industry.

However, Vietnamese exports to Egypt have rebounded to US$200 million since the beginning of this year and are expected to exceed $300 million by year-end, with key export items including seafood; agricultural products such as pepper, cashew nuts and coffee; automotive spare parts; and cellphones and components.

Malaysia-VN trade to reach $10b

Bilateral trade value between Malaysia and Viet Nam is expected to garner more than US$10 billion in 2014.

Malaysian Ambassador to Viet Nam Datuk Azmil Mohammed Zabidi made this statement after attending a dinner with the Malaysian contingent to the ASEAN Skills Competition here last Monday.

Datuk told Bernama that although the trade value seemed small, it was an encouraging figure since Viet Nam was still in the early stages of its development.

The Viet Nam News Agency quoted the ambassador as saying trade ties between the two countries should be further enhanced to enable Kuala Lumpur and Ha Noi to benefit from closer relations.

Datuk revealed that Malaysia's investment in Viet Nam reached $20 billion in the past 20 years and currently, more than 400 Malaysian companies were doing business with Viet Nam, mostly in real estate projects.

Malaysian companies seeking foreign labour should turn to Viet Nam, as it is equipping its youths with skills for the plantation and manufacturing sectors before sending them to work abroad, Azmil said, adding that currently, about 20,000 Vietnamese workers were working in Malaysia.

With a population of about 90 million, Viet Nam provides a significant opportunity in real estate development and Malaysian products, explained Azmil.

"In fact, Malaysian companies are involved in about 450 projects worth $11 billion, either wholly owned or on a joint venture basis," he noted.

He revealed that currently, about 1,500 Malaysian entrepreneurs were registered with the Malaysian Embassy in Viet Nam, with 700 of them doing business in HCM City and the rest in Ha Noi.

Azmil added that apart from enhancing trade and investment between both countries, the embassy was also ironing out constraints faced by Malaysian companies operating in Viet Nam.

Tax talks highlight policy deficiencies

Difficulties in tax and customs policies topped the agenda of the dialogue that the Ministry of Finance (MoF) and Viet Nam Chamber of Commerce and Industry (VCCI) conducted with enterprises yesterday.

The annual event, which aims to provide the business community with latest information on tax and customs issues, drew the participation of a large number of companies and was considered the most frank and open meeting between State officials and enterprises concerning solutions to problems and difficulties facing enterprises.

This was the opportunity for enterprises to have a direct dialogue with the leaders of the MoF, as well as customs and taxation administrators.

At the dialogue, Doan Duy Khuong, VCCI deputy chairman, said the Government was actively promoting economic restructuring and growth to speed up the country's socio-economic development and international integration.

Khuong added that Viet Nam was developing its market economy and delving deeper into international integration.

Besides implementating World Trade Organisation commitments and free trade agreements, Viet Nam is currently negotiating for trade agreements with leading economic giants such as the United States and European Union, as well as Canada, Russia, China and South Korea.

Also, with the establishment of the ASEAN economic community next year, Viet Nam will become a bridge linking Asean economies with regional and the global markets.

Deputy Finance Minister Do Hoang Anh Tuan said the dialogue was one of the annual MoF activities that aimed to help businesses overcome difficulties in tax and customs declarations, as well as assist the MoF in collecting petitions from businesses to effectively reform administrative procedures in the field of taxes and customs.

Tuan told participants that although the economic growth rate increased by 5.8 per cent year-on-year, an estimated 57,000 businesses were either dissolved or suspended operations because of difficulties in business performance. Only 29 per cent of businesses are profitable, he added.

Tuan said the number of exporters remained unchanged, and the foreign direct investment sector remained the largest contributor to export turnover at 66 per cent.

Viet Nam's ongoing trade negotiations are expected to bring advantages as well as challenges, he added, and urged participants to discuss good policies as well as difficulties with current mechanisms and make recommendations that would assist businesses in overcoming challenges.

Cao Anh Tuan, deputy director of the General Department of Taxation (GDT), provided updates on tax policy, tax administration and measures to ease difficulties of corporate and individual taxpayers.

To help taxpayers overcome difficulties, the MoF, GDT and Government have issued circulars, decrees and dispatches. In addition, the MoF has submitted to the Government and the National Assembly a draft law on Special Consumption Tax and supplemented five laws on VAT, as well as corporate income tax, personal income tax, resource tax and tax administration.

The amendments are also related to the limit on expenses for advertising, marketing, trade, promotion and reception, and are expected to cut about 80 hours of administrative tax and customs procedures.

Regarding tax reform implementation, an estimated 416,689 enterprises, accounting for 85.5 per cent of the total number, have so far filed electronic tax declarations, and it is expected that by the end of this year, about 95 per cent of businesses will file electronic tax declarations.

The GDT has worked with Vietcombank and Agribank, as well as BIDV, MB and Vietinbank, to carry out e-tax payment. This model has been carried out in 18 provinces and is expected to be implemented in the remaining provinces soon.

Vu Ngoc Anh, GDT deputy general director, provided updates on the new contents of the Customs Law which the National Assembly passed last June and which will take effect in January.

Pham Thi Loan, chief executive officer of Viet A Group, said customs authorities needed to review their performance after post-clearance inspection to generate incentives for businesses.

Loan revealed that her company imported optical cable for the domestic electronics and telecommunications industry with identification numbers at zero per cent. However, customs authorities applied a three-per cent tax on her company.

She noted that the post-clearance inspection aimed to avoid trade fraud by companies, but authorities' performance has made it more difficult for businesses.

Loan also submitted her petition calling on agencies to effectively improve procedures for handling complaints from businesses and thoroughly review the tariff list to avoid saddling businesses with concerns and losses.

Nguyen Hoai Nam, deputy general secretary of the Viet Nam Association of Seafood Exporters and Producers, said about 90 per cent of businesses always encountered problems in post-clearance inspection and alarming systems of overdue tax on the electronic payment system.

Nam added that businesses now expected the implementation and coordination of customs and tax authorities to be consistent to make it easier for all concerned.

NA urges faster SOE restructuring

Lawmakers are asking the Government to speed up the restructuring of State-owned enterprises, the banking sector and public investment to boost economic growth.

This came out in a report that Nguyen Van Giau, chairman of the National Assembly Committee on Economic Affairs, presented on Saturday.

The report of the NA Standing Committee on the supervision of the economic restructuring process, which is part of NA's Resolution 10/2011/QH13 on the socio-economic development plan for 2011 to 2015, said economic restructuring in the last three years had generated results but were still below expectations.

The NA noted that from 2011 to 2014, the Government cut 1,550 projects and restructured 272 State-owned enterprises. From 2011 to 2013, the Government was also able to divest about VND3.94 trillion (US$185.5 million) from State-owned enterprises.

However, the NA added that the implementation of some reforms was still slower than expected as restructuring policies were not effective enough.

In addition, the Government had not made a comprehensive assessment of the economy and a lack of co-ordination still existed between parties in the restructuring process, it added.

Average economic growth from 2011 to 2015 is expected to reach only 5.78 per cent, which is lower than the Government target of 6.5 to seven per cent. Trade surplus is unsustainable because of domestic companies' struggle in production and consequent reduction of imports.

The economy's competitiveness has yet to be enhanced and labour productivity remains low, according to the NA Standing Committee.

State budget overspending remains high, with total debt under basic construction from the State budget and government bonds as of August 30 estimated to be about VND44,594 billion (about $2.1 billion).

Deputy Nguyen Thi Kha of Tra Vinh Province said State-owned enterprise restructuring had not seen major breakthroughs, as divestment fell short of expectations and the potential strengths of the private sector had not been fully tapped.

He added that those drawbacks came as enterprise leaders were not bold enough in their actions, thus asking the Government to eliminate the negative influence of interest groups and hold State-owned enterprises accountable.

Regarding the banking system, the NA Standing Committee said the rapid rise in the number of commercial banks in recent years had caused instability, as it had not been accompanied by enhanced governance.

Deputy Trinh Ngoc Phuong of Tay Ninh Province said resolving bad debts in the banking system required sorting out the tangle of cross-ownership and cross-investment in the sector.

Public investment also came under the spotlight as a number of deputies noted that the sector was plagued with problems such as over-diversification, inefficiency and inadequate supervision over construction.

Deputies Nguyen Van Hien of Ba Ria-Vung Tau and Do Manh Hung of Thai Nguyen Province remarked that given limited capital, the Government should conduct a review of public investment projects and organise them according to set priorities.

Regarding public investment, lawmaker Y Khut Nie of Dak Lak Province said officials who had approved ineffective investment projects must be held responsible for their actions.

Some NA members revealed that the amount of debt under capital construction could be higher than 44 trillion dong, and a clearer assessment was needed of such debts.

Others wanted the Government to take note of a series of construction projects that cost trillions of dong but have yet to achieve their full potential, causing public uproar and a slowdown in the fight against corruption.

Hien said restructuring companies also meant restructuring staff management at State agencies and their responsibilities.

Investment and Planning Minister Bui Quang Vinh admitted that the process still faced major hurdles, and areas of restructuring could take many years. He suggested that the Government order each ministry and sector to develop their own restructuring plans. The lawmakers observed that the Government needed to intensify its anti-corruption efforts and further reform administrative procedures to enhance the efficiency of public investment projects.

Deposit rate cut has little effect

Le Ngoc Huong of HCM City's Tan Binh District has decided not to pull out her deposit of VND1 billion from a bank though the interest rate has fallen from 5.6 per cent to 5.1 per cent.

She says she dare not invest the money in anything else because of the high risk involved.

Analysts say most of the idle money remains in banks even after the State Bank of Viet Nam decided to lower the interest rate cap on deposits of less than six month from 6 per cent to 5.5 per cent late last month.

After the move, most lenders including small and medium-sized ones, have slashed their deposit interest rates. Asia Commercial Bank for instance reduced its rates for one- and two-month deposits from 5.3 per cent to 4.9 per cent and for three and nine months to 5.1 and 6 per cent.

Orient Commercial Joint Stock Bank has also cut interest rates on short-term deposits, but this has had no impact on mobilization, according to deputy general director Truong Dinh Long.

"[This] year the bank's deposits have increased by 11 per cent," he told Dau Tu Chung Khoan (Securities Investment) newspaper.

He attributed it to the fact that other asset classes like property, stocks, gold, and foreign currencies are not attractive yet.

With inflation being contained at a rather low level (estimated at 3-4 per cent for this year), depositors enjoy a positive real interest rate even after the rate on short-term deposits was cut to 5.5 per cent and on longer term deposits to 6-8 per cent per year, he said.

Trinh Minh Thao, Techcombank's head of retail banking in the south, concurred, adding that many people now preferred long-term deposits on which rates are 1-1.5 per cent higher than for short terms.

Vietcombank has always taken the initiative in cutting interest rates yet its deposits had increased by 17.67 per cent as of late September, according to its general director Nghiem Xuan Thanh.

Its interest rate now stands at 4.3-5 per cent for one- and three-month deposits and at 6.3 per cent for 24 months, he said.

According to the central bank, as of October 24 deposits had grown by 11.88 per cent this year.

After lowering the interest rate cap for short-term deposits, the central bank called on State-owned banks to reduce their lending interest rates for five priority sectors, and lenders have responded positively.

Deputy general director of Vietcombank, Nguyen Danh Luong, said last week his bank had lowered the interest rate on short-term loans to the five priority sectors from 8 per cent to 7 per cent.

"Vietcombank is ready to tweak its profit plans in a way that … also supports businesses."

BIDV general director Tran Xuan Hoang said that in the last three years his bank has always taken the initiative to share businesses' difficulties by cutting loan interest rates though that hit its bottom line.

"In response to the central bank's call, BIDV would continue to adjust lending interest rates."

OCB deputy general director Dinh Duc Quang said he supported the central bank's policy of lowering lending interest rates.

"Though the economy shows signs of recovery, domestic enterprises still face with many difficulties. So, lower lending interest rates would create conditions for the businesses to develop their production and business activities."

Dr. Tran Du Lich, a member of the National Monetary and Financial Policy Advisory Council, said the cut in lending rates, particularly for medium- and long-term loans, would have a positive impact on the economy.

According to HSBC, the cut in the deposit rate cap is part of the central bank's efforts to boost credit growth, which is expected to accelerate by year end.

PetroVietnam told to finish refinery plan

Deputy Prime Minister Hoang Trung Hai has asked the Viet Nam National Oil and Gas Group (PetroVietnam) to complete the Dung Quat Oil Refinery expansion project proposal, reports news portal Vneconomy.

According to the Deputy PM's order, PetroVietnam is responsible for giving full explanation for the urgency of the project, and for evaluating and comparing the efficiency of different measures that can be taken to expand the oil refinery.

Hai also asked PetroVietnam to calculate the efficiency of the expansion if the project is granted investment priority, and in case it is not.

He suggested that PetroVietnam should consider adding a crude oil storage facility to the expansion project.

The project proposal must be submitted to the Ministry of Industries and Trade (MoIT) for further examination before November 11.

The MoIT has been asked to set up a committee with representatives from the relevant branches and the Quang Ngai People's Committee to scrutinise the Dung Quat oil refinery expansion project, and report to the Prime Minister in November.

The People's Committee has also been asked to be ready with its plans for land clearance, resettlement and compensation for local residents, to allow implementation of the project as soon as the proposal is approved.

Once the expansion project is completed, the Dung Quat oil refinery's capacity will be increased to 10 million tonnes of crude oil input per year from the current level of 6.5 million tonnes.

This move is included in the scheme to develop petrochemicals because if the input is maintained at 6.5 million tonnes, the output will be about 6 million tonnes, and hence, there will be almost no raw material for petrochemicals.

The investment for the expansion project is estimated to be US$1.8 million to $2 billion.

PetroVietnam is also discussing the sale of 49 per cent of the shares of the oil refinery to foreign partners, including Gazprom Group of Russia.

Garment sector restyles production model

Viet Nam's garments and textiles sector is exerting efforts to renovate its production methods so it could maintain its status as a top world garments producer.

The move comes in the light of advantages offered by the Trans Pacific Partnership (TPP) and other free trade agreements that the country has entered into with regional trade blocs around the world.

Le Tien Truong, Viet Nam Textiles and Garment Group (Vinatex) general director, said that after years of manufacturing processed products, enterprises had gained much experience in manufacturing, management and labour.

This wealth of experience serves as a foundation for enterprises to shift to FOB (freight on board) and original design manufacturer (ODM) models, according to the general director.

Vinatex is determined to apply as soon as possible the ODM model, which will allow the company to define the chain linkage of dye-textile-garment and improve its business effectiveness index.

The group will review and improve operations to meet production targets for the domestic and international markets.

Nguyen Xuan Duong, management board chairman of Hung Yen Garment Corporation Joint Stock Company, said that to be able to produce with the ODM model, concerned sectors such as textiles, garments and dyes had to develop at the same time.

However, the garments and textiles sector was weak in three areas: product development, marketing and chain linkage. To develop the ODM model, businesses must overcome these weaknesses, especially marketing, as well as clarify targets for the sector and draft a material industry development plan.

Viet Nam's garments exports in the first nine months of the year reached US$18 billion, a 19-per cent year-on-year increase, and its garments imports reached $11 billion, said the Ministry of Industry and Trade (MoIT). As a result, the sector achieved a $6.2-billion trade surplus.

Dang Phuong Dung, general secretary of the Viet Nam Textile and Apparel Association (VITAS), said that in spite of the high export turnover, the added value remained modest.

This was attributed to sectoral dependence on imported materials, as the country could only provide 1 per cent of demand for cotton and 20.2 per cent of demand for textiles.

Although the sector could produce six million fibre bundles each year, only 30 per cent of the fibre bundles could be used because quality remains below standard.

Sectoral participation in the global supply chain is considered passive, according to Dung. The sector is mainly focused on manufacturing processed products and lacks product model designers. Businesses that produce processed products are also passive in seeking and expanding markets.

Ho Thi Kim Thoa, deputy industry and trade minister, said the current world trend in garments included the development of a package supply chain and e-commerce trading, both of which remained a challenge to Viet Nam.

In line with this, the MoIT last April approved a garments and textiles development plan from 2020 to 2030 that aims to make the sector a key export industry and enable it to meet increasing domestic demand, create more jobs, enhance competitiveness and firmly integrate with the regional and international economy.

In the past few years, the sector has been relentless in improving the investment environment, granting preferential policies, expanding co-operation and luring capital.

Separate free trade agreements that Viet Nam has entered into with the European Union and the Customs Union of Russia, Belarus and Kazakhstan, as well as the TPP, would serve as huge opportunities for the sector to further access world markets, added Thoa.

Viet Nam, Slovakia aim to promote trade

A seminar was held in Bratislava, the capital city of Slovakia, to provide Slovakian businesses and financial institutions with information on Viet Nam's investment climate.

The Viet Nam Trade Office in Slovakia and the Czech Republic joined Bratislava's Chamber of Commerce and Industry in organising the mid-week seminar that aimed to promote trade between Viet Nam and Slovakia.

At the event, Nguyen Thang Long, Head of the Viet Nam Trade Office in Slovakia and the Czech Republic, said bilateral trade between the two countries increased six – to seven-fold in the past three years.

The positive outcome laid a solid foundation for the future development of comprehensive co-operation between the two nations, explained Long.

In addition, he stressed the need to offer the Slovakian business community with more up-to-date information on Viet Nam's socio-economic conditions, adding that Vietnamese enterprises in Slovakia and the Czech Republic would play a vital role in promoting bilateral co-operation and investments.

For his part, Juraj Majtan, director of Bratislava's Chamber of Commerce and Industry, spoke highly of the traditional co-operation between the two business communities, indicating that they shared a great potential for collaboration in the fields of machinery manufacturing, information technology and tourism.

Vietnamese products gained a strong foothold in the Slovakian market in recent years, according to Vietnamese Ambassador to Slovakia Ho Dac Minh Nguyet.

Miroslav Lajcak, Slovakian deputy prime minister and concurrent foreign and European affairs minister, will pay an official visit to Viet Nam on November 4 and 5 at the invitation of his Vietnamese counterpart, Pham Binh Minh. He will be accompanied by representatives of big Slovak companies.

Deposit rate cut boosts optimism

Investors were upbeat over news of the State Bank of Viet Nam's interest rate cut last week, but lingering caution over market outlook restrained the rise of Vietnamese stock indices.

Last Wednesday, the SBV decided to lower the ceiling interest rates on Vietnamese dong deposits from six per cent to 5.5 per cent and on US dollar deposits from one per cent to 0.75 per cent.

This is the second time that the SBV has slashed regulatory interest rates this year.

According to Dang Bao Khanh, general director of SeABank, this decision will likely bring investment to other channels, including the securities market.

"The stock market will receive new capital investment flows, though not surging, as the economy is still undergoing difficulties," Khanh said.

Many experts also agree that the SBV decision will have a positive impact on the Vietnamese stock markets because stock prices usually moved in a direction opposite that of interest rates.

At the HCM City Stock Exchange, the benchmark VN-Index once more increased by more than 600 points, adding a cumulative 1.58 per cent during the week to close at 600.84 points.

Blue chips recovered as the VN30, which tracks the top 30 shares by market value and liquidity, improved by 1.47 per cent to finish at 638.78 points.

Ocean Group rebounded late last week after several declining sessions due to the arrest and detention of its former leader.

Other large-cap shares were actively traded, including PV Gas, Masan Group, Bao Viet Holdings and Vietcombank, as well as Sacombank and Vietinbank.

Liquidity improved slightly compared with that of the previous week, with daily market volume increasing by more than eight per cent to an average of 110 million shares worth VND1.874 trillion ($88.8 million) per session.

Foreign investors ended their eight-week selling streak and returned as net buyers in the HCM City market. Their net purchase value was modest but helped ease investor pessimism.

They were responsible for a total net purchase of more than VND375 billion ($17.8 million), focusing on blue chips such as PetroVietnam Drilling and Wells Service, Kinh Do Corp and Hoa Phat Group.

They remained net sellers in the Ha Noi market but with a small value of just VND26 billion ($1.2 million).

Foreign purchases are important to the recovery of the market, which could decline during some sessions this week but is necessary to test the demand and determine the trading trend of foreigners, according to analysts at FPT Securities Company.

At the Ha Noi Stock Exchange, the HNX-Index also climbed by 1.14 per cent to end at 88.03 points, but trading volume decreased by more than 14 per cent from that of the previous week, averaging 51.4 million shares worth more than VND725 billion ($34.4 million).

Mobile World hits yearly target in 9 months

Giant mobile phone retailer Mobile World Investment Corporation announced on Friday that it had achieved the full year profit target in just nine months.

At a media briefing in HCM City, the company reported after-tax profits of VND488 billion (US$23 million) for the first nine months on revenues of over VND10.9 trillion ($519 million), a 66 per cent year-one-year rise.

MWG chairman and CEO Nguyen Duc Tai hailed the contribution made by online sales.

"The revenue from online business in nine months was over VND608 billion ($29 million), double the figure for the whole of 2013. By the end of this year the revenue is expected to be over VND800 billion ($38 million)."

During the period in review the company opened 60 more stores. In October only, 28 stores were opened nation-wide.

Tai said thegioididong.com has a market share of 28-30 per cent and would stop expanding when it reaches 40 per cent.

MWG plans to focus on developing its consumer electronics and home supplies chain dienmay.com next and targets leadership of that market too with a share of 8-10 per cent.

SBV moves to increase VAMC charter capital

The State Bank of Viet Nam (SBV) has asked the Government to increase the charter capital of Viet Nam Asset Management Company (VAMC).

SBV Deputy Governor Nguyen Thi Hong made the announcement, saying the move aims to enhance the company's financial capacity to buy and sell bad debts at prevailing market prices.

VAMC's current charter capital is VND500 billion (US$23.58 million), which is just modest in comparison with the total non-performing debts that the company has to deal with.

SBV figures showed that in the first 10 months of 2014, VAMC bought bad debts worth around VND125 trillion ($5.9 billion) and resold bad debts worth VND4 trillion ($190.4 million) to the public. There was a proposal to increase the VAMC charter capital to VND2 trillion.

The figures also showed that from time the project to resolve bad debts in the Vietnamese banking system was implemented in 2012, the country's bad debt ratio was reduced from 17 per cent, at VND460 trillion, to 5.43 per cent, at VND252 trillion.

Hong said the SBV and credit institutions differed in the way they accounted for bad debts, resulting in conflicting figures.

Reports of credit institutions showed that the bad debt ratio had declined from 4.17 per cent by end-June to 3.88 per cent by end-September.

The SBV said regulations on VAMC operations that restricted the company from using the State budget to resolve bad debts were placed under review to reduce the company's difficulties.

Mastercard looks at local non-cash payment sector

Viet Nam with its 90 million population and large proportion of young people as well as high internet access offers has huge potential for the non-card payment business, a MasterCard executive has said.

Arn Vogels, the card company's Indochina director, said Viet Nam had recently been taking steps towards non-cash payment thanks to a number of factors including the expansion of the card acceptance network.

"With the increasing e-commerce and the popular use of smart phones, non-cash payment will surely become indispensable here," he told the media on Wednesday.

"We consider Viet Nam the most promising market in the region."

There are around 30,000 taxis operated by scores of companies in the country, but only each one in HCM City and Ha Noi accept cards, according to the director.

The country's half million small and medium-sized enterprises and micro businesses and direct sales and insurance companies are also untapped opportunities for non-cash payment.

The number of merchants accepting cards in Viet Nam, at 1.06 per 1,000 persons last year, is low by Southeast Asian standards. The comparable rates are 2.51 in Indonesia, 4.88 in Thailand, and more than 10 in Singapore. In Australia, it goes up to 31.62.

But the network was growing quickly, he said, citing statistics from the Vietnam Bankers Association showing there were more than 132,000 merchants and 15,000 ATMs as of June end.

The State Bank of Vietnam has set a target of 250,000 merchants by the end of next year.

Speaking about the challenges to popularising non-cash payment, he said even government disbursements like unemployment allowance were still in cash, which was discouraging.

The process of promoting non-cash payments and expanding the merchants' network could not be achieved overnight and would take time and joint efforts by the Government, service providers, and consumers, he said.

Nguyen Hoa Binh, chairman of e-commerce solutions provider Peacesoft, whose subsidiary MPOS Tech Vietnam recently began producing mobile card readers — which are now much cheaper than traditional ones — said since the installation and operation of a merchant network was expensive, banks were wary of investing in it. This, in turn, entrenched people's habit of using cash.

With few non-cash transactions, the investments they had made naturally result in losses, making banks wary even more.

Another hurdle to popularising non-cash payments was the fear of theft through hacking and phishing attacks.

Nguyen Minh Khang, who works for a foreign company in HCM City and often travels abroad, said he only used his credit card on these trips.

"When I return home, I get the bank to lock my card until the next trip. My account has been stolen several times," he told Viet Nam News.

"Each time it was a sum of around US$10. So complaining for such a small amount is not worth the effort. But I can't let it go on like that and so I have my account locked when I come back home."

He pointed out that small sums add up to significant amounts especially if stolen from many cards.

HCM City ups regional business links

Links between businesses in HCM City and other cities and provinces in the southern region have improved as a result of a cooperation programme begun in late 2011.

Le Hoang Quan, chairman of the HCM City People's Committee, said under the programme, 520 contracts worth more than VND19 trillion (US$894.7 million) had been signed between city businesses and companies in the southeastern and southwestern regions.

Of the total, HCM City firms purchased goods worth VND13 trillion ($621.1 million) from these regions, and supplied goods worth VND6,000 trillion to the area.

Quan was speaking yesterday at a meeting in HCM City held to review the results of the programme.

Every day, three wholesale markets in the city receive an average of 8,000 tonnes of farm produce and food products transported to localities.

Truong Quang Hoai Nam, deputy chairman of the Can Tho City People's Committee, said the programme had helped businesses gain access to the distribution channel of HCM City.

He said that farmers and animal breeders were now more willing to make investments to supply quality products at reasonable prices to HCM City firms.

Do Thang Hai, deputy minister of Industry and Trade, praised the achievements of the programme but urged HCM City and other cities and provinces to identify potential businesses to improve product quality and brand building.

Other goals include the prevention and control of fake products and trade fraud, as well as the development of hygienic brands, he said.

Nam suggested that HCM City create conditions to help businesses expand outlets for products made in Can Tho and the Mekong Delta, and build logistic centres in the region to cut transport costs.

The meeting also included linkages between producers and distributors. More than 1,100 producers, distributors, wholesale markets, restaurants, hotels, and eateries from 38 areas nationwide have participated.

Le Ngoc Dao, deputy director of the Department of Industry and Trade, said the linkages help provide outlets for companies' products.

Distributors provide businesses and co-operatives with necessary information about quality standards required by the city's distribution system, Dao said.

More and more businesses have joined in the programme, she added.

Last year, 23 provinces and 347 companies attended the second event, with 229 contracts signed. In 2012, 14 provinces and 198 businesses took part.

At the event yesterday, 347 contracts were signed between producers and supermarkets, wholesale markets, and distributors like Co-opmart, Citimart, Maximark and Big C.

Nguyen Thi Hanh, Saigon Co.op general director, said Saigon Co.op had created favourable conditions to help producers sell their products to its retail chain.

Under contracts signed with local producers, the company in the past year helped companies make better, safer, well-packaged products at reasonable prices.

Phan Thanh Binh, general director of Bich Chi Food Company, said distributors who had signed contracts with the company offered instruction in food hygiene and safety processes, and packaging of products. Beginning next year, when the ASEAN Economic Community comes into effect, local producers are expected to face fierce competition in the domestic market.

Developing closer linkages in production and trading would be vital for local companies, Quan said.

Japan organises ICT fair in Ha Noi

Japan ICT Day opened in Ha Noi on Thursday, with a focus on cooperation between Viet Nam and Japan in large-scale information technology (IT) projects and the development of human resources in the IT sector.

Held as part of the 2014 Asian-Oceania Computing Industry Organisation (ASOCIO) ICT Summit, the event, which is now in its eighth year, attracted nearly 100 representatives from 47 Japanese businesses, the largest number since beginning in 2007.

It was also attended by companies from the Republic of Korea, Israel, Malaysia and Singapore.

According to a report by Japan's Information-Technology Promotion Agency, Viet Nam is Japan's second largest ICT partner and the most favored partner among Japanese businesses, said 31.5 per cent of those questioned.

In addition to cultural similarities, abundant and cheap labour also makes Viet Nam attractive to Japanese investors, the report states.

Nguyen Doan Hung, head of the Viet Nam-Japan Information Technology Cooperation Club, said the Japanese Government and IT groups planned to carry out a number of large projects by 2020, requiring a large skilled workforce. This was seen as a favorable opportunity for Viet Nam, he added.

In order to partner with Japan on large projects, Junko Kawauchi, Vice President in charge of Global Affairs of the Japan Information Technology and Services Industry Association (JISA), stressed the need for Vietnamese businesses to increase the quality of personnel and expand their scale of operations.

Further, Japanese businesses visited the central city of Da Nang yesterday to attend a conference on Viet Nam-Japan IT cooperation.

In a separate development on Wednesday, Viet Nam's FPT Corporation and Fujitsu Limited of Japan said they would co-operate in running a trial test of Fujitsu's food and agricultural cloud service, known as the Akisai Cloud.

The companies said that the aim of the partnership was to support restructuring in the agricultural sector to make Viet Nam a world-class agricultural producer, based upon innovative technologies.

Viet Nam, DPRK sign air transport deal

Viet Nam and the Democratic People's Republic of Korea (DPRK) have signed an aviation transport agreement to allow airlines from both countries to penetrate deeper into each countries' aviation markets.

The agreement was signed in Ha Noi on Thursday by Viet Nam 's Deputy Minister of Transport Nguyen Van Cong and DPRK Deputy Minister of Foreign Trade Ri Myong San.

Comprising 23 articles and one appendix, the agreement replaced the one signed on November 14, 1977.

The new agreement is expected to meet the travel demands of both peoples, contributing to the traditional friendship between the two countries.

Earlier, representatives from the Ministry of Transport and DPRK Ministry of Foreign Trade held a meeting to discuss how to further improve bilateral cooperation on aviation issues in the future.

Can Tho to upgrade industrial parks

The Cuu Long (Mekong) Delta city of Can Tho plans to expand and upgrade a number of industrial parks, Head of the Management Board of Can Tho Industrial Park Vo Thanh Hung said on Thursday.

The master plan aims to increase Can Tho's total industrial area to 2.267ha and pave the way for Can Tho to become an industrial hub in the Cuu Long (Mekong) Delta region by 2025.

Thanks to the city's efforts to implement a number of special policies on administrative procedures, preferential credit, and training workers, capital investment in industrial clusters has reached US$1.91 billion so far in 2014, a $50 million increase compared to the same period last year.

To date, Can Tho is home to 214 investment projects, including 191 domestic and 23 foreign-invested projects.

During the first ten months of this year, revenue from enterprises operating in the city's industrial parks totalled $1.1 billion. Notably, foreign invested-companies posted increases of 10 per cent and 13 per cent in turnover and exports, respectively, compared to the same period last year.

Viet Nam attends social entrepreneurship forum

Vietnamese delegation attended the ASEAN Forum on Social Entrepreneurship in Singapore on Thursday to learn lessons offered from Singapore's social enterprise model, as well as other ASEAN member states.

Over 80 policy makers and representatives of non-governmental organisations from the 10 ASEAN member states discussed the role of social entrepreneurship and talked about putting in place best practices and a joint vision for the development of social enterprises.

At the event, the head of the Vietnamese delegation delivered a speech on the current state of social entrepreneurship in Viet Nam, and presented an overview of the proposals for the State management system to organise social enterprises and help them grow further.

Singaporean Minister for Social and Family Development Chan Chun Sing affirmed the increasing recognition of social entrepreneurship as a potential solution to societal needs, along with the efforts undertaken by the Government, the private sector and charitable organisations.

FPT IS wins $1.4m Philippine contract

FPT Information System Company (FPT IS) beat six international contractors to win a US$1.4-million bid to provide a management system for complaints and denunciations for the Philippine government.

The contract was signed on October 27 in Manila.

The tender is part of a financial support package given by the United States to the Philippines. The package aims to raise the personal income of the Filipino people, boost expenditure and public investment, enhance tax revenues and prevent corruption.

The Vietnamese firm will co-operate with the Philippine government to build a database of complaints and denunciations, and speed up their processes. The management system is expected to be implemented in 10 months in the country's government agencies.

This is the first time that FPT IS has won a bid in this market, raising its total number of tenders this year to 14, worth a total of $26.4 million.

In November, the firm will open a representative office in the Philippines.

FPT IS Global General Director Le Anh Tuan said that the Philippines was one of its main markets and the company expected to get more contracts there in 2015.

Earlier, the company announced on September 9 that it would provide an integrated tax administration system for Bangladesh's Income Tax Department.

Viettel builds 3G network in Tanzania

The military telecom group Viettel today started building a third-generation (3G) mobile network in Tanzania.

The network is expected to become operational in July 2015 after its 13,000-km fibre-optic cable broadband system is completed, according to Tanzanian Minister of Communication, Science and Technology January Makamba.

By 2016, Viettel's services are hoped to cover around 4,000 local villages currently without the Internet.

Besides, the firm will offer low-cost smartphones and free Internet access for local schools, hospitals and offices.

Tanzania's mobile telecoms sector has grown rapidly over the past decade. The second largest economy in East Africa now has about 29 million mobile subscribers of several operators including Zantel, Vodacom Tanzania and Tigo Tanzania.

In the neighbouring country of Mozambique, Movitel, a joint venture between Viettel and a local firm, has operated successfully with 5 million subscribers, becoming the leading mobile service provider in the country.