Manufacturing sees sharp growth: HSBC

Manufacturing growth regained momentum in November as output and new orders rose at faster rates and stocks of purchases increased at the sharpest pace in the survey's history, according to HSBC Viet Nam's Purchasing Managers' Index released on Monday.

Falling world commodity prices impacted the sector, with input costs decreasing for the first time since late-2012 and output prices falling at the sharpest rate since June 2013.

The headline seasonally adjusted PMI – a composite indicator designed to provide a single-figure snapshot of operating conditions in the manufacturing economy – rose to 52.1 in November from 51 in October, signalling the most marked improvement in business conditions in five months. Stronger operating conditions have been recorded each month since September 2013.

Manufacturing production increased for the 14th successive month in November, with the rate of growth quickening to the fastest since April.

Panellists linked higher output to improving client demand, and this was borne out by a solid increase in new business. Competitive pricing and good quality products had reportedly been key in securing new work from both domestic and export markets. New export orders rose for a third month running, and at the fastest pace since April.

Higher new orders led backlogs of work to increase in November, ending a six-month sequence of falling outstanding business. Employment also rose, as has been the case in seven of the past eight months. Although easing slightly from October, the rate of job creation remained solid as firms reported having raised employment in response to increases in new orders and production requirements.

Input prices decreased for the first time since December 2012. Prior to November the pace of cost inflation had slowed for three consecutive months. Panellists mainly attributed lower input costs to falling prices in global commodity markets.

Lower input costs were partly behind a second successive monthly fall in output prices as firms passed savings on to clients. Efforts to stimulate demand were also mentioned by some of those companies that lowered prices. The rate of decline was the fastest in nearly 18 months.

Reports from panellists about attempts to build inventory led to a series-record rise in stocks of purchases, following a decrease in the previous month. This was helped by a 15th successive month of rising purchasing activity at manufacturers. Despite higher demand for inputs, suppliers' delivery times shortened again in November amid reports of good availability of materials and spare capacity at suppliers.

Stocks of finished goods also increased, albeit only marginally. Some panellists reported that completed products were awaiting delivery to clients. Post-production inventories have now risen in each of the past five months.

Commenting on the Vietnam Manufacturing PMI survey, Trinh Nguyen, Asia Economist at HSBC, said: "The sharp rise of the PMI index in November reflects our view that the Viet Nam manufacturing sector is competitive. Thanks to lower labour costs than China, Vietnamese manufacturing is gaining global market share.

"The contraction of input prices mirrors the drop of headline CPI to 2.6 per cent year-on-year in November. We expect output to continue to rise, in contrast to the rest of the region."

The HSBC Vietnam Manufacturing PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives in around 400 manufacturing companies.

Shareholders approve 80% sale of KDC snack division

Shareholders of confectionery giant Kinh Do Corporation (KDC) have approved the sale of 80 per cent stake in its snack business to US-based Mondelez, maker of Oreo biscuits, for US$370 million.

At an extraordinary shareholders meeting in HCM City on Monday, company deputy director Tran Quoc Viet said the confectionary business had slowed down in the last three years and the leadership wanted to enter new business segments.

KDC announced that $33 million would be used to buy more shares in the National Company for Vegetable Oils, Aromas and Cosmetics of Viet Nam (Vocarimex).

Another $15 million will be invested in building noodle brands and infrastructure, $12 million in the coffee business and $14 million in expanding the cold chain distribution.

The company will keep a war chest of $176-210 million for possible acquisitions and partnerships and $190-224 million for a share buyback programme.

An overwhelming 93 per cent of shareholders said yes for buying back 30 per cent of the company's shares.

Viet said the first noodle products had been introduced in the market and the early feedback had been good.

The company has appointed distributors and sellers in 54 out of the country's 63 provinces and cities.

Premium noodle products would hit the market next June, and Kinh Do hopes to grab a 10 per cent noodle market share by 2017.

An Giang wants more farm produce shipped to Japan

Nguyen Thanh Binh, vice chairman of An Giang province's People's Committee, said on Monday that the province should export more farm produce to Japan. He was speaking at a meeting with Japanese Consul General Nakajima Satoshi.

Satoshi said he would serve as a bridge connecting An Giang and Japan, especially in agriculture and health care.

An Giang and Japan have co-operated since 1997 through the Japan International Cooperation Agency, creating more than 20 Japanese projects worth more than VND31 billion (US$1.4 million) that focus on health care, education, energy, clean water, agricultural training and rice production.

Dong Nai trade surplus reaches $330m

The southern province of Dong Nai recorded a trade surplus of US$330 million in the first 11 months of 2014, according to the provincial Department of Industry and Trade.

The province's total external trade turnover for the period stood at $22.77 billion, including $11.55 billion in export earnings, a 16.8 percent increase on the year.

Phan Van Dan, head of the department's Planning Office, said the key earners - footwear, garments and wooden products - enjoyed substantial growth. The three industries accounted for 40 per cent of the province's total export value. The US, EU and Latin America remain the biggest markets for Dong Nai's products.

Nguyen Ngoc Tuan, vice chairman of the Dong Nai Import-Export Association, said the province was aiming for $1 billion in export turnover by December.

Bac Lieu seafood sells well in export markets

The Mekong Delta province of Bac Lieu grossed more than US$355 million from January to November selling about 40,000 tonnes of aquatic food overseas.

The provincial Department of Agriculture and Rural Development attributed the high sales to efforts to secure markets and stabilise production.

Businesses have invested more in modernising shrimp production lines and using processing technology, as shrimp accounts for 98 per cent of local export value.

To win trust from customers, enterprises have concentrated on improving the quality of the products, ensuring food safety and hygiene. They are also working on expanding sales to South Korea, Japan and some Middle Eastern countries.

Local exporters are striving to earn $400 million by the year's end, with about $357 million coming from the aquatic product sector.

Steel firms steel themselves for challenges

Global integration serves as a good opportunity for domestic steel makers to expand their market.

However, they still face an increasing number of trade defence instruments, such as anti-dumping or anti-subsidy duties from importers.

Viet Nam is negotiating free trade agreements with the European Free Trade Association and the Customs Union of Russia, Belarus and Kazakhstan, as well as the Trans-Pacific Partnership with the Asia-Pacific Economic Co-operation Forum and the ASEAN Economic Community, notes industry insiders.

The Viet Nam Steel Association (VSA) reports that steel consumption this year is expected to grow between 10 to 12 per cent because of the large volume of steel sheet product exports and galvanised steel pipes. In spite of this, cheap steel from China makes up a significant portion of domestic steel consumption.

According to Nguyen Van Sua, VSA vice chairman, anti-dumping and anti-subsidy suits will lead to financial losses for domestic businesses and a decline in export revenues, resulting in the loss of markets for domestic businesses.

From 1994 to 2013, Viet Nam had to face 52 anti-dumping suits from 15 different countries around the world. Vietnamese steel exports accounted for 15 of these suits.

Sua reveals that many businesses had not really paid much attention to trade defence measures and fail to consider them as part of their business strategy.

Pham Chau Giang of the Vietnam Competitive Authority says a lack of skilled employees in the investigating agency, the language barrier and lack of finances have led to poor results in the handling of suits.

Giang also notes that domestic businesses had failed to prepare well for the suits.

Sua observes that domestic businesses are not fully aware of trade defence measures and had failed to work and co-ordinate closely with the investigating agency to provide information that will make the investigation more accurate and favourable.

Sua attributes this to the lack of knowledge on international law. He warns that steel producers must be fully prepared with documents and information and work with the investigating agency to make the ruling favourable to them.

In addition, concerned agencies need to enhance their professional capacity to help businesses deal with commercial litigation.

Nguyen Ngoc Quan, general director of Kansai Steel, reveals that many countries use trade defence measures to effectively counter anti-dumping and anti-subsidy effects, but some countries have yet to fully exploit trade defence measures' advantages.

If the steel industry knows how to use trade defence measures to deal with the mass importation of cheap steel from China, this will create opportunities and markets for domestic steel makers to further develop.

To bring into full play the efficiency of trade defence measures, the role of an ad hoc agency and concerned agencies are crucial. In addition, businesses must also deepen their understanding and strengthen their co-operation with authorities to effectively deal with problems arising from suits.

State-owned enterprises pay most corporate taxes

State-owned enterprises (SOEs) continued to lead corporate taxpayers on the list of Viet Nam's top 1,000 corporations by accounting for 65.5 per cent of total corporate income tax payments in the country.

This is so even if the SOEs made up only 29 per cent of the total number of businesses in Viet Nam, according to information that the Viet Nam Report Company, General Department of Taxation and online newspaper Vietnamnet online newspaper released in the V1000 here yesterday.

Specifically, enterprises' total corporate tax reached VND80.4 trillion (US$3.8 billion) or 10.2 per cent of the country's total State budget collection. The top 100 businesses alone made up 57per cent of total corporate tax payments in the list.

Ha Noi had the highest number of companies in the list with 38 per cent of the total, followed by HCM City with 34 per cent.

Notably, businesses in the minerals and petroleum sector led in tax payments with 36 per cent of the total, followed by telecommunications and information with 15.3 per cent and finance with 10.5 per cent.

About 70 per cent of surveyed companies expressed the belief that corporate income tax, still at a high level, had been their biggest hindrance, along with unspecific decrees and guiding documents.

More than 86 per cent of businesses expect a tax decrease in the future while about 81 per cent expressed hopes that administrative procedures will be further simplified, and 76 per cent are looking forward to training and astuteness in the application of tax laws and regulations.

Nearly 81 per cent of surveyed companies said tax officials followed due process and the required time for receiving tax documents while 76 per cent gave good comments on tax official's attitudes. However, around one-third of enterprises were not pleased with the Government's administrative reform.

Ho Manh Tuan, deputy general director of Honda Viet Nam Company, one of the top five corporate taxpayers, said tax payment was a measure of production and business effectivity, and the recognition would be an honour and a boost to the company's prestige.

The corporate tax payment rankings were released for the fifth consecutive year to encourage and honour businesses that contribute to the country's development by paying the correct taxes.

VND30trillion credit package remains inaccessible for many

After two years of implementation, the disbursement of the VND30 trillion (US$1.4 billion) credit package for social housing project has merely reached 12 percent due to administrative procedures and loan requirements.

That is opinions of delegates at a talk hosted in Ho Chi Minh City on December 1 by Infonet Newspaper under the Ministry of Communications and Information.

HCMC Real Estate Association Chairman Le Hoang Chau said that two most complicated procedures are interfered in collateral and borrowers’ income.

A joint circular by the Ministry of Justice, the Ministry of Construction, the Ministry of Natural Resources and Environment, and the State Bank of Vietnam has permitted buyers to use their future houses as a mortgage to get bank loans.

Buyers have to pay 20 percent of an apartment value in advance to get loans for the rest 80 percent value. However some banks still require borrowers to put up other properties for mortgage, he said.

Mr. Le Trong Khuong, deputy director general of Hung Thinh Company, said many customers have been in need of loans but none of them have been accessible because the company is a secondary investor.

Hung Thinh Company purchased the project from other investors, who were unaffordable for implementation, and completed it for sale. Banks have refused to loan the company’s customers saying they are not eligible. 

The limited supply of social housing has also caused the slow disbursement of the credit package. Meantime the progress of converting commercial into social housing and large into smaller apartments has been very slow.

Therefore banks have focused on loaning commercial housing projects, whose apartments are smaller than 70 square meters each with a price of below VND15 million a square meter or VND1.05 billion an apartment.  However the number of these apartments is very limited.

Mr. Phan Truong Son, head of the Housing Development and Real Estate Market Division under the HCMC Department of Construction, said that the city has approved to convert eight out of 11 commercial housing projects into social housing and split apartments of only nine out of 24 projects.

Explaining for this slowness, Mr. Son said that many projects have failed to meet requirements in population and technical infrastructures when their apartments are changed smaller.

The Ministry of Construction has recently extended the deadline to shift commercial into social housing and large apartments into smaller ones until the end of 2015 instead of this yearend, he said.

The move is expected to increase the supply of social housing and create conditions to speed up the credit package disbursement, adding more that the Government has issued a resolution targeting at least 40 percent cut of time spent on administrative procedures for construction projects. The HCMC Department of Construction has studied to further simplify the procedures aiming at reducing it by another 10 percent.

Minister confident of 5.8% GDP growth for 2014

In a keynote address at the Vietnam Business Forum (VBF) in Hanoi on December 2 Minister of Planning and Investment Bui Quang Vinh revealed with confidence that economic growth for the year will reach 5.8%.

There is consensus in the government that most targets approved by the National Assembly have been fulfilled for the year Vinh said, adding that achieving these goals is an important milestone.

Inflation has been constrained and the nation’s consumer price index (CPI) in November increased only slightly more than 2%, business failures are down and the number of new business registrations is on the upswing.

All of these statistics provide assurance the economy is solid with more robust economic times in the offing and the country can move forward with plans for further development, Vinh concluded.

The VBF has served as a structured dialogue between the government and the business community targeting an improved economic environment in Vietnam.

This year’s business forum takes place against the backdrop of the economy showing optimistic signs of growth on the back of successful implementation by the government of several key resolutions and reforms.

Key among them were the government’s Resolution 19 focused on key solutions and tasks to improve business environment and national competitiveness, Resolution 15 on State-owned enterprise reform and Circular 119 on tax reform.

In addition, the National Assembly adopted a revised Enterprise Law and Investment Law, which aims to create an environment more conducive to increased transparency.

This presents a very encouraging signal to the business community that it can have full confidence in the government’s commitment to take further action in order to take full advantage of new free trade agreements (FTAs) that Vietnam currently and will engage in.

It also definitely has a very positive impact to restore business confidence in doing business and to realize the achievable goal of more favourable investment climate for Vietnam.

The two-day forum has six main issues on the agenda – public debts and bad debts, measures to boost the development of the private sector (including small-and medium-sized enterprises and State-owned enterprises), labour, acceleration of SOEs’ equitisation, administration reform, and arising issues when joining free trade agreements.

At the event, Virginia Foote, co-chair of the VBF, in turn said FTAs would bring about huge opportunities for Vietnam and a number challenges.  Therefore it is critical for the country to thoroughly prepare.

Foote said businesses at the forum should not hesitate to put forth their suggestions on measures they believe would help the country grasp opportunities brought about by FTAs.

Especially those focusing on reforming investment environment, financial and banking system, administration procedures, and SOEs, and raising productivity, Foote said.

Earlier, the General Statistics Office of Vietnam (GSO) reported that GDP rose by 5.62% in the first quarter, 5.09% in the second and 6.19% in the third quarter.

Leading economists have forecast that  if the GDP for the fourth quarter is higher than the previous three quarters, Vietnam would have fulfilled its growth target for the year.

That would make it the third consecutive year in a row, the country has done so, they said.

For her part, Wendy Werner, International Finance Corporation (IFC) Regional Business Line Manager, spoke about Vietnam’s success in stabilising the macro-economy.

This is clearly evidenced by the nation’s rising credit rating and the government’s recent successful issuance of US$1 billion international bonds in the international bond market, Werner said.

Werner further opined that although local businesses have shown their great effort to overcome difficulties in recent times, many local enterprises are simply too small to compete at international market.

Low productivity and underdevelopment of the support industry are other obstacles that must be overcome, Werner said noting Resolution 19 is an important step in the right direction.

Echoing Werner’s views, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc said the Resolution 19 is a refreshing breath of fresh air for stimulating reform, ironing out snags and creating trust in the government.

He hoped that the government continues to remove obstacles in public reform.

Vietnam spends nearly US$3 million on animal imports

Vietnam spent nearly US$3 million on import of cattle and poultry breeds in the eight months leading to September, announced the Ministry of Agriculture and Rural Development (MARD)’s Department of Livestock Production.

The latest report by the Department of Livestock Production showed that in the eight-month period, Vietnam imported more than 1,600 piglets worth US$1.52 million in total, up 89% from a year earlier, mostly from Canada, Thailand, Denmark, and the US.

Nearly 1 million fowl were shipped to the Vietnamese market at a total value of US$3.29 million, mostly from New Zealand and the US.

In recent years, Vietnam bought around 14 poultry breeds from overseas markets for State-owned farms, and a number of foreign direct investment projects, such as CP. Group, Japta Comfeed and Topmill.

Imported animal breeds have generated high profits, therefore, there’s an increasing demand in the domestic market that is forecast to see strong growth in the future.

HCM City remittances hit $4.4b

Overseas Vietnamese's remittances via commercial banks and economic organisations in HCM City in the first 11 months of the year was estimated at US$4.4 billion, according to the HCM City branch of the State bank of Viet Nam (SBV).

Total overseas Vietnamese's remittances in 2014 will exceed $5 billion, compared with $4.8 billion last year.

An official at SBV's HCM City branch said the ratio of remittances invested in business and the real estate sector was higher than of the previous years.

Vietinbank said this year Viet Nam would remain one of the top 10 remittance countries worldwide.

Between 1993 and 2014, Viet Nam received total remittances of about $96.66 billion, with an average remittance of $4.4 billion per year, accounting for 6.8 per cent of the country's gross domestic product (GDP) over the period.

Remittances into Viet Nam have increased about 22.4 per cent annually in the past two decades, with an exception in 1997 and 2009 when economies in the world faced financial crisis.

Ha Noi economy picks up steam

The Ha Noi economy is picking up steam in most areas. Gross domestic product this year is estimated at 8.8 per cent, within the target for the year of 8.5-9 per cent.

Vice-chairman of the municipal People's Committee, Vu Hong Khanh, told the 11th session of the Ha Noi People's Council here yesterday that revenue to the State budget was forecast to reach more than VND128.9 trillion (US$ 6.1 billion) this year, or 102.1 per cent of the original goal.

Expenditure is expected to cost more than VND51.1 trillion ($2.4 billion).

Participants also reflected on the city's 2014 socio-economic performance, national defence-security and development orientations for 2015.

Nguyen Thi Kim Ngan, National Assembly Vice-chairwoman, said Ha Noi should step up the pace of administrative reform and listen to thoughts and aspirations of its local community.

Japanese investment in Vietnam reaches 36.5 billion USD

Direct investment from Japan to Vietnam hit 36.5 billion USD by October 2014, according to statistics of the Japanese Business Association (JBA).

Shimon Tokuyama, a JBA representative, said at the Vietnam Business Forum 2014 in Hanoi on December 2 that the number of Japanese-invested projects in Vietnam has increased over the last three consecutive years.

According to him, the JBA has 1,388 members in Vietnam, second only to Thailand in the Southeast Asian region.

Shimon Tokuyama said the revision of the laws on Enterprises and Investment has improved the business environment and businesses’ competitiveness, but some issues still need more amendments.

He also suggested Vietnam should focus on further developing the support industry and small and medium-sized enterprises.

The expert said the formation of ASEAN Economic Community (AEC) by the end of 2015 will create a regional large market with over 600 million consumers but Vietnam will also have to cope with fiercer competitions from regional countries.

Therefore, Vietnam should develop production through attracting foreign investment, thus improving its competitiveness, he said.

Official government statistics show that between 2011 and 2013, Japan topped the list of 101 countries and territories investing in Vietnam. Especially in 2012, Japanese investments accounted for half of the total foreign direct investment in the country.

Cashew industry aims to boost local consumption

The cashew industry needs to boost consumption in the lucrative domestic market, a forum on the nut's nutritional value heard in Ho Chi Minh City on December 1.

Vietnam's cashew exports have surged in recent years, but consumption at home remains very modest compared to levels in India, the US, or Australia, Nguyen Duc Thanh, Chairman of the Vietnam Cashew Association, said.

Dinh Thi My Loan, Chairwoman of the Vietnam Retailers Association, blamed the low sales at home to high prices, poor marketing, and lack of diverse products.

Besides, processors are not interested in the local market, she said, adding that cashew products are mainly sold during the Lunar New Year, making it hard to create a consumption habit among consumers.

Nguyen Tan Thanh, Deputy Director of cashew processing firm Thao Nguyen Co, said many people do not eat the nut in Vietnam despite its high nutritional value because of high prices.

As a result, local consumption accounts for just around 5 percent of output while in India 30-40 percent is sold domestically, he said.

To promote consumption in the domestic market, Loan said the industry needs to strengthen advertising and marketing and develop more cashew-based products.

Besides trying to take their products to supermarkets and traditional retail channels like markets and shops, businesses should also make more effort to sell online, she said.

Educating people about the nutritional benefits of cashew is also key, she said.

Do Thi Ngoc Diep, Director of the HCM City Nutrition Centre, said cashew nuts are high in calories, with 100g providing 550-600 kcal compared to 300-350 kcal for cereals and 150-200kcal for meat.

They are also an abundant source of essential minerals, especially manganese, potassium, copper, iron, magnesium, zinc, and selenium, she said.

About 80 percent of the fatty acids contained in the nuts are monounsaturated fatty acids, mainly oleic, which are good for people with heart diseases or diabetes who also have high triglyceride levels, she said.

It is a low blood sugar food, largely because it contains a high amount of fibre, she said.

By replacing animal-based foods, cashew can help prevent non-contagious diseases and malnutrition, she added.

Bac Lieu enjoys 12 percent growth in 2014

The Mekong Delta province of Bac Lieu has seen good results in the implementation of its socio-economic goals for this year, with its economic growth likely to reach 12 percent, said a senior provincial leader.

The province’s economic structure has been transformed with higher proportions of industry and service sector, said Chairman of the provincial Party Committee Vo Van Dung during the committee’s meeting on December 2.

Currently, industry-construction contributes 24.71 percent to the province’s total GDP, while services make up 25.59 percent and agriculture, 49.70 percent, he noted.

Meanwhile, important economic indices of the locality also exceed the set targets, with food production surpassing 1 million tonnes, 3 percent higher than expected, seafood output hitting 208,000 tonnes, equivalent to 101 percent of the plan, and export turnover reaching 430 million USD or 107 percent of the plan, said Dung.

Per capita GDP was raised to 39.33 million VND per year, while 97 percent of local households have access to the electricity grid.

Besides, four communes of Bac Lieu completed all 19 criteria of the new-style rural area building programme, while other 6 communes fulfilling 15-18 criteria, he added.

In particular, the investment environment of the locality has been improved, attracting many investors.

During the meeting, participants agreed to make tourism a key economic sector of the locality in the time to come.

Forum connects Vietnamese entrepreneurs in Australia

A forum was held in Melbourne city, Victoria State of Australia on December 1 to connect Vietnamese businesspeople in the country.

During the event, the participants shared experience in doing business and invest in Vietnam and discussed measures to boost Vietnamese exports to Australia. They agreed that Vietnam needs to have clearer and more consistent policies to attract the overseas Vietnamese business community.

Addressing the forum, Hoang Minh Son, Vietnamese Consul General to Sydney, praised the efforts and contributions of entrepreneurs in Australia to fostering bilateral economic-trade relations between the two countries.

The diplomat expressed his wish that they will enhance solidarity and contribute more to the homeland’s socio-economic development.

President of the Vietnam Business Association in Australia (VBAA) Tran Ba Phuc said the forum helped Vietnamese businesspeople aboard update information on the country’s situation as well as new polices in the international economic integration.

The event, firstly held in 2009, serves as an important bridge between entrepreneurs in Australia and domestic relevant agencies and businesses.

Set up in 2010, VBAA has seen incessant growth with more than 200 members. This year, it established a branch in Sydney, New South Wales State and is targeting two others in the States of Queensland and Victoria.

Hanoi economy sees comprehensive development

The Hanoi economy is picking up steam in almost areas with its gross domestic product for this year estimated at 8.8 percent, still within the target of 8.5-9 percent.

Vice Chairman of the municipal People’s Committee Vu Hong Khanh told the 11th session of the Hanoi People’s Council in the capital city on December 2 that revenue to the State budget is forecast to reach over 128.9 trillion VND (6.1 billion USD) this year, or 102.1 percent of the original goal while expenditure is expected to cost more than 51.1 trillion VND (2.4 billion USD).

Addressing the event, Secretary of the municipal Party Committee Pham Quang Nghi pointed out shortcomings in personnel and environment management, and asked for clearing obstacles facing enterprises and dealing with complaints at the grass-root level.

Participants also reflected on the city’s 2014 socio-economic performance, national defence-security and development orientations for 2015.

Concluding the session, Nguyen Thi Kim Ngan, National Assembly Vice Chairwoman, asked Hanoi to step up the pace of administrative reform and listen to thoughts and aspirations of its local community.

Top corporate tax payers honoured

The Vietnam Report Joint Stock Company announced a list of the largest 1,000 corporate income tax payers in 2013 in Hanoi on December 2.

The honoured businesses contributed nearly 81 trillion VND (3.8 billion USD) or 10.2 percent of the total State budget revenue.

Accounting for just 29 percent of the total businesses in the V1,000 list, State-owned enterprises contributed around 66 percent of all the tax amount paid by the 1,000 listed.

Hanoi-based firms made up 38 percent of the V1,000’s total tax amount, followed by those in Ho Chi Minh City with 34 percent.

In terms of sector, firms in the mining-oil and gas industry led the V1,000 with about 37 percent of the total tax amount, followed by those in the field of telecoms-information technology with 15.3 percent, and finance, 10.5 percent.

Vietnam Report’s annual survey revealed that 67 percent of the businesses took note of improvements in taxation procedures, but nearly one third were not satisfied with the progress.

At the same time, 70 percent of surveyed firms thought the current corporate income tax is still high, and 86 percent expressed hope that the tax rates will be reduced in the coming time while the administrative formalities will be further simplified.

This is the fifth consecutive year the V1,000 has been compiled with the aim of honouring and encouraging enterprises to make more contributions to the State coffer.-

Foreign retailers rush to open shops across Vietnam

Vietnam’s retail market continues to attract foreign investors, the Vietnam Investment Review (VIR) reported.

Central Group, Thailand’s leading retailer, will open its second Robins department store at Crescent Mall, District 7, just 15 minutes from the centre of Ho Chi Minh City later in the week. It will occupy 10,000 square metres over four floors at Crescent Mall.

According to Central Group, the company will continue to expand Robins department stores in Vietnam in the coming time. The Thai retailer officially set foot in Vietnam in March with its 10,000 square-metre Robins store at Royal City in Hanoi, its first overseas.

According to VIR, Central Group confirmed that the company is looking for local partners in Vietnam and is seeking an European fashion and luxury-goods brand franchise worth about 50 million USD.

In July this year, under a franchise operated by the Central Group, Iconic British retailer Marks & Spencer entered the Vietnamese market with a new flagship store in Ho Chi Minh City. The store offers an extensive range of women’s wear, men’s wear and lingerie as well as accessories, shoes and sleepwear.

Tos Chirativat, CEO of Central Group, was quoted as saying that with 90 million residents and growing middle class, Vietnam was an exciting market with high potential for growth and an excellent destination for investors in the retail sector.

In a similar move, last week, the Republic of Korea’s retailer Lotte Mart continued its assertive push into Vietnam with a 29 million USD at a shopping centre in the southern province of Ba Ria-Vung Tau.

Lotte currently operates eight shopping centres – two in Ho Chi Minh City and Hanoi respectively, and one in Dong Nai, Da Nang, Binh Duong and Binh Thuan. By 2020, Lotte Mart aims to have expanded its chain here to 60 supermarkets.

By entering the market early, the company believes that it will be able to select the best strategic locations in Vietnam’s marketplace, Hong Won Sik, General Director of Lotte Mart Vietnam told VIR.-

Garment and textile export likely to hit 24.5 billion USD

Vietnam’s garment and textile export turnover is likely to hit 24.5 million USD this year, a year-on-year rise of 19 percent - the largest increase in the past three years, according to Le Tien Truong, General Director of the Vietnam National Textile and Garment Group (Vinatex).

Truong said in recent years, Vietnam’s garment and textile sector has focused on diversifying the sources of supply of materials to ease the dependence on foreign source and increase the flexible competition capacity.

To date, the sector has raised the localisation rate to more than 50 percent.

Vietnam's upcoming free trade agreements with the EU, the Republic of Korea, and the Customs Union of Russia, Belarus and Kazakhstan, and the Trans-Pacific Partnership are expected to open up huge opportunities for the sector.

However, it needs to improve its productivity, quality, and competitiveness with investment in new technologies, machinery and innovation.

ADB loan to aid push for economic reforms

The Asian Development Bank (ADB) has approved loans totalling 230 million USD to support Vietnam's ongoing reforms to overhaul public finances, boost private investment, and revive its economic competitiveness.

"Vietnam is falling behind neighbours in terms of competitiveness and ease of doing business, and this is hurting its ability to attract private investment and grow the economy," Tomoyuki Kimura, ADB's Country Director for Vietnam, said.

"Structural obstacles are holding the country back and this loan assistance from ADB, along with support from other donors, will allow the government to press ahead with measures to resolve these issues."

After the country's shift away from a centrally planned economy in 1986, growth averaged over 7 percent a year from 1990 to 2007 while per capita income almost quintupled.

Vietnam has seen more muted economic activity in recent years with domestic private investment as a ratio of gross domestic product declining from around 15 percent a year in 2007-10 to 11.5 percent in 2013.

Skills gaps in the workforce, a relatively unsophisticated financial sector, a hefty fiscal deficit, unequal conditions for state enterprises compared with the private sector, and an opaque business regulatory environment have held back competition, investment, and growth.

The programme will help the Government push ahead with measures to boost banking sector stability, improve public administration, strengthen State-owned enterprise management and develop a clearer and more transparent regulatory environment for business. Specific actions supported by the programme include implementation of the Government's credit institution restructuring plan, legislation to regulate and guide the rollout of an anti-corruption law, steps for the restructuring of State-owned enterprises, and amending the Law on Public Procurement.

The programme's outcomes will include simplified value-added tax procedures and a reduction in income tax for small- and medium-sized enterprises and transaction costs for small businesses, all of which will help boost productivity and support employment and poverty reduction.

The programme targets boosting private investment as a percentage of GDP to 15 percent by 2020.

ADB's assistance is complemented by 250 million USD from the World Bank and 150 million USD from the Japan International Cooperation Agency.

The programme's estimated completion date is June next year.

Binh Duong works to support Taiwanese firms

Leaders of the southern province of Binh Duong on December 1 had a working session with a mission from the Taiwan Ministry of Economic Affairs led by Lien Yu Ping, head of the Department for Investment Services, on measures to aid Taiwanese enterprises in the locality.

The two sides agreed that the province has taken prompt actions to assist Taiwanese firms in resuming their production after the incident on May 13 this year, during which some extremists took advantage of local workers’ protest against China ’s illegal deployment of an oil rig to Vietnam ’s exclusive economic zone to incite acts of riot and public disorder.

They concurred that insurance companies should announce the losses of affected firms as soon as possible in order to issue appropriate support policies.

Lien Yu Ping proposed that Binh Duong provide details of compensations to Taiwanese investors in two weeks to make it easier for them to make their production plan, as the 2014 fiscal year is ending.

During the session, provincial leaders and officials also gave specific explanations on the Government’s policies to support affected firms in terms of tax, travel costs, and wage for workers during the interruption of production caused by the incident.

According to Tran Van Nam, Standing Vice Chairman of the provincial People’s Committee, so far, the province has rolled out measures to assist affected enterprises in line with the direction of the Prime Minister.

The locality has also given additional support to help the firms to resume their operations, including a loan package of 1 trillion VND (47 million USD) with 50 percent of interest subsidy from the provincial budget, he noted.

He said the delayed announcement of losses of affected firms and compensation amounts was partly due to the fact that some firms do not want to make public the damages out of concern that it would affect their business or insurance payment. In addition, some companies were found to have violated regulations on environmental protection, social insurance and taxation.

Italy to increase ODA for Vietnam

Italy will increase Official Development Assistance (ODA) for Vietnam to 30 million EUR (37.2 million USD), Italian Deputy Minister of Foreign Affairs and International Cooperation Benedetto Della Vedova said.

The assistance will target the private sector in the coming time, the official was quoted by Thoi Bao Kinh Te Vietnam (Vietnam Economic Times) as saying.

In addition, an additional 10 million EUR (12.4 million USD) will be injected in projects on water supply under an agreement reached by the two governments.

Deputy Minister Benedetto Della Vedova led an Italian economic delegation to a forum for Italian-Vietnamese Businesses held in November with a view to seeking more cooperation opportunities in Vietnam in various fields.

At the event, he remarked that Vietnam’s favourable business climate represents a potential market for Italian enterprises.

According to the Vietnam Chamber for Commerce and Industry, trade between Vietnam and Italy has increased by 15-20 percent in recent years.

Between January and October this year, bilateral trade reached almost 3.4 billion USD, with Vietnam’s exports valued at 2.3 billion USD.

The two countries share a substantial potential in energy generation, construction material, tourism, pharmaceuticals and advanced technology, which should be utilised in order to meet the target of 5 billion USD in trade.

Taiwanese group opens second factory in Dong Nai

Kim Bao Son Vietnam, a subsidiary of the Taiwanese group Kinh Crystal International Incorporated, broke ground for its second factory producing medical gloves in the southern province of Dong Nai on December 2.

The facility, which covers 12 ha of land in Giang Dien Industrial Zone in Trang Bom district, has a total investment of 14 million USD.

Once fully operational in late 2015, it will be capable of manufacturing 7,500 tonnes of products per year for both the domestic and regional markets.

Entering the country in 2004, the Taiwanese group set up its first factory worth 12 million USD also in Dong Nai province.

So far, Taiwan is the largest foreign investor in Dong Nai with 285 projects still valid with a total registered capital of 4.8 billion USD.