Sugar inventories up over 56,000 tonnes

Sugar inventories in the first half of this year rose 56,430 tonnes over last year to 548,940 tonnes, according to the Ministry of Agriculture and Rural Development.

Statistics from the ministry indicated that as of the middle of June, the sugar sector produced 1.58 million tonnes of sugar, about 55,000 tonnes more than during the same period last year.

Further, the country's total sugar consumption during the six month period was 958,330 tonnes, 58,490 tonnes higher than the corresponding period last year. Of this, domestic consumption was more than 777,000 tonnes, while total exports were 184,320 tonnes.

Additionally, the ministry forecast total sugar supplies in the second half of the year would reach some 926,000 tonnes, including inventory of 548,940 tonnes, local production output of 300,000 and imports of 77,300 tonnes.

Sugar consumption in the second half of the year was estimated at 675,000 tonnes.

By the end of 2014, total sugar inventories are expected to reach 251,240 tonnes.

Also, the ministry has asked the Ministry of Industry and Trade not to extend sugar export licences granted in the first half of the year, as well as new licences.

It also proposed to the Government to only allow temporary imports and exports of sugar at main border crossings to facilitate domestic sugar production and trading.

Sugar prices in June rose VND300-500 (US$0.014-0.023) per kilo, in comparison to the previous month. The price of one kilo of sugar, including value-added taxes for stocks in the north was VND12,500-13,000 ($0.6-0.62), while those in the central region and the south were VND12,400-13,000 and VND13,000, respectively.

State-run firm becomes joint-stock company

Viglacera Corporation, a State-run building material manufacturer and real estate investor, became a joint-stock company yesterday.

The change, expected to create more advantageous conditions for company development, was announced at its shareholder meeting in Ha Noi on the same day. The privatisation plan was approved by Prime Minister Nguyen Tan Dung last December.

According to the Ministry of Construction's Decision No 716/QD-BXD, dated June 24, 2014, on the equitisation, Viglacera has a charter capital of VND2.645 trillion, or US$125.95 million. The firm will make an initial public offering of 264.5 million shares, with a face value of VND10,000, or $0.48, per share.

The State will hold 91.48 per cent of the total equity, while 0.55 per cent will be offered to the company's employees, and 7.97 per cent will be reserved for other shareholders.

HCM City to host annual automobile show

The Viet Nam Motor Show 2014 will be held at HCM City's Sai Gon Exhibition and Convention Centre from November 20 to 23.

Nine big names from the Viet Nam Automobile Manufacturers Association – Ford, GM, Hino, Honda, Mercedes-Benz, Suzuki, Toyota, Vinastar and Daimler Trucks – will participate.

Seven other brands that will be featured at the exhibition are Audi, BMW, MINI, Land Rover, Porsche, Nissan and Lexus.

MINI distributed by Euro Auto and Daimler Trucks managed by Mercedes-Benz Viet Nam, are the new arrivals. Nissan's Infiniti has withdrawn from the show this year.

This is the second consecutive year that the show will be held in HCM City. Organisers said the event will give managers and manufacturers an opportunity to discuss and seek outlets for the domestic automobile industry and meet industry leaders in the region.

Investors keen on Vinatex’s shares

Portfolio investors at a conference in Hanoi on July 2 displayed considerable interest in purchasing shares of Vietnam National Textile and Garment Group (Vinatex).

At the seminar, Vinatex officials answered queries from delegates regarding the company’s short-term and long-term development strategy and their views for the overall prospects of the garment and textile industry in Vietnam.

Vinatex has made remarkable achievements in its business and production activities, earning US$2.9 billion in export turnover in 2013.The company is targeting to hit an export turnover of US$5 billion by 2020.

At present, the group has fully mobilised its resources to create a niche in the manufacturing supply chain fully expecting the market to explode upon the signing of free trade pacts with the EU and most especially the upcoming Trans Pacific Partnership (TPP).

In addition, Vinatex is devising a plan to import raw materials from other nations in the region to eliminate the current over dependence on China. Industry and Trade Deputy Minister Ho Thi Kim Thoa announced at the conference that the garment and textile sector has achieved an annual 10% growth rate over the past ten years.

Economist Le Dang Doanh spoke about the bright prospects on the horizon for the garment and textile sector contingent upon the signing of free trade pacts with the European Union, the TPP and the Custom Union of Russia-Belarus-Kazakhstan.

Hai Phong enhances trade, investment with Norwegian businesses

A delegation from the northern port city of Hai Phong is paying a working visit to Oslo city, Norway, with the aim of finding ways for Hai Phong’s goods to enter this market while promoting business chances in Hai Phong.

The delegation, led by head of the Hai Phong Economic Zone Management Board Pham Thuyen, had working sessions with the Enterprise Federation of Norway (VIRKE) and the Oslo Chamber of Commerce.

During the meetings, Hai Phong officials introduced in details the city’s trade and investment environment as well as projects that it is calling for investment. They expressed their hope that the Norwegian business organisations will encourage Norwegian enterprises to set up their trade and investment ties with the northern port city and Vietnam as a whole.

Representatives from the VIRKE and the Oslo Chamber of Commerce said that they believe new business opportunities will be opened up in the time ahead, especially when a free trade agreement between Vietnam and the European Union, including Norway, is signed.

The chamber’s officials also pledged to coordinate with the Hai Phong side in introducing the Vietnamese northern city to Norwegian investors via business seminars and other channels.

Meanwhile, VIRKE Director Thomas Angell shared his view on key points that Hai Phong needs to pay attention to when approaching the Norwegian market.

The Hai Phong delegation also visited the Vietnamese Embassy and met representatives of the Vietnamese community in Norway.

State bank toughens stance on capital issues

The State Bank of Viet Nam (SBV) has instructed banks to clearly detail their plans for the capital withdrawal of parties whose stakes have exceeded caps.

The central bank has noted that the withdrawal must be completed no later than the first quarter of next year.

"The specific amount of time for handling the capital withdrawal depends on the process of restructuring at each bank; however, they must meet the deadline," remarked Nguyen Hoang Minh, deputy head of the central bank's HCM City branch, as quoted by Phap Luat TP HCM (The HCM City Law) newspaper.

The HCM City Law newspaper reported, while citing SBV's sources, that there are five commercial banks where individual shareholders own more than 5 per cent of the charter capital each and five commercial banks where institutional investors hold more than 15 per cent of the charter capital.

As many as eight commercial banks have shareholder groups and related parties that own over 20 per cent of the charter capital.

Industry experts have pointed out that the loss of control over ownership has led to the manipulation of these banks in ways that conflict with group interests.

The central bank has claimed it will undertake strict supervision of stake-related activities, such as transferring or increasing shareholdings. If anyone is found contravening the law, heavy penalties will be imposed.

Economic think-tank agent Vu Dinh Anh said the real question was whether the central bank could control the issue across the board.

"Penalties will depend on the complex nature of each case, the suspects, and the related parties," Anh noted.

In an attempt to hinder bank manipulation efforts, the SBV has released the draft of a new circular to suppress the increasingly sophisticated "familisation" seen at credit institutions, which is ultimately intended to tackle bad debt and improve the security of the system.

The draft, which is pending public feedback, declares that the total credit limit granted to founding shareholders, major shareholders, family members and related parties must not exceed 5 per cent of the charter capital of a credit institution.

Credit limits for major shareholders and their family members must also not exceed their face-value-based capital contribution to the banks.

The draft restricts credit institutions from granting privileged loans without collateral to auditing companies, auditors, chief accountants, major shareholders, founding shareholders, subsidiaries, companies or those who have established certain relationships with the bank.

Credit institutions must report such lending plans to the shareholders, owners and the central bank.

In another attempt to soften the illusion of bank capital and improve the transparency of capital flows, the draft requires credit institutions to report actual charter capital every six months.

The actual charter capital is determined after taking out risk provision funds and calculating all income and expenditure.

If the value of the actual charter capital is lower than the legislative capital, banks must draw up solutions and report these to the central bank. If the actual charter capital falls below 80 per cent of the legislative capital, the SBV will apply measures to restrict the operations of the banks.

In fact, cross-shareholding issues have complicated the process of restructuring the vulnerable banking system. The entire system was recently on the verge of a crisis following many years of excessive credit growth and easy lending to State corporations, along with cross-shareholding issues.

Financial reform is one of the three pillars in a programme of economic restructuring that Viet Nam unveiled in late 2012. If the deep-seated problems in the banking system cannot be resolved effectively, the progress of the entire economic reform programme might face long delays.

Tuna exports to Netherlands surge

Vietnam’s tuna exports to the Netherlands hit nearly 8.9 million USD in the first four months of this year, representing a year-on-year surge of 123 percent, in spite of an overall decrease in the European Union.

Therefore, the Netherlands exceeded Spain to become the third largest importer of Vietnamese tuna in the bloc.

The General Department of Vietnam Customs attributed the surge to an impressive rise of as high as 396 percent in the export of tuna fillet in the context of dropping shipment of other tuna products.

Statistics from the Netherland-based International Trade Centre showed that over the past five years, the European country recorded an increase of 143 percent in tuna imports, becoming the world’s 11 th biggest importer of this product.

Vietnam now ranks ninth among the nations selling tuna to the Netherlands.

Vietnam’s business environment introduced in New Zealand

Cooperation opportunities in trade and investment in Vietnam were the main focus of a seminar recently held in Christchurch city, New Zealand.

At the event, Vietnamese Ambassador to New Zealand Nguyen Hong Cuong briefed participants on Vietnam’s overall situation as well as prospects for cooperation in different fields between the two countries.

Meanwhile, Commercial Counsellor at the Vietnamese Embassy Nguyen Kim Phuong made a detailed introduction about Vietnam’s business environment, including preferential policies to attract investment, priorities to develop Vietnamese farm produce and other main products, as well as chances for economic cooperation between the two countries’ enterprises.

Participants were provided with documents on a list of projects calling for investment by 2020, and fairs and exhibitions held in Vietnam annually.

During the seminar, New Zealand enterprises, which are running business in Vietnam, shared their experience in how to work with Vietnamese partners, and to get support from the New Zealand Trade and Enterprise (NZTE) agency.

Vietnam is now New Zealand’s 20th largest trade partner, with two-way trade hitting 785 million USD in 2013. The figure is set to reach 1 billion USD by 2015.

Hai Phong enhances trade, investment with Norwegian businesses

A delegation from the northern port city of Hai Phong is paying a working visit to Oslo city, Norway, with the aim of finding ways for Hai Phong’s goods to enter this market while promoting business chances in Hai Phong.

The delegation, led by head of the Hai Phong Economic Zone Management Board Pham Thuyen, had working sessions with the Enterprise Federation of Norway (VIRKE) and the Oslo Chamber of Commerce.

During the meetings, Hai Phong officials introduced in details the city’s trade and investment environment as well as projects that it is calling for investment. They expressed their hope that the Norwegian business organisations will encourage Norwegian enterprises to set up their trade and investment ties with the northern port city and Vietnam as a whole.

Representatives from the VIRKE and the Oslo Chamber of Commerce said that they believe new business opportunities will be opened up in the time ahead, especially when a free trade agreement between Vietnam and the European Union, including Norway, is signed.

The chamber’s officials also pledged to coordinate with the Hai Phong side in introducing the Vietnamese northern city to Norwegian investors via business seminars and other channels.

Meanwhile, VIRKE Director Thomas Angell shared his view on key points that Hai Phong needs to pay attention to when approaching the Norwegian market.

The Hai Phong delegation also visited the Vietnamese Embassy and met representatives of the Vietnamese community in Norway.

Over 2.37 trillion VND for developing high-tech agriculture

Five commercial banks will provide more than 2.37 trillion VND (111.22 million USD) in loans for five agricultural producers to expand their activities in the time ahead, especially the application of advanced technologies in agricultural production.

To this effect, loan contracts were signed in Hanoi on July 2 as the second part of a pilot credit programme launched by the Government which aims to encourage domestic agricultural producers to apply modern technologies in their production.

Under the programme, the maximum interest rate for short-term loans is 7 percent a year, while those for medium-and long-term loans are 10 percent and 10.5 percent, respectively.

Among the beneficiaries, Hung Ca Co., Ltd, one of the tra fish exporters in the Mekong Delta, will receive the largest bank loan of 1.407 trillion VND (66.03 million USD). It is followed by Agrimex Nghe An Joint Stock Company, with 494.49 billion VND (23.2 million USD) and Can Tho city’s Trung An rice producer, with 284 billion VND (13.32 million USD).

Truong Hoang Trade and Service Co., Ltd in the Central Highland province of Lam Dong will be provided with 80 billion VND (3.75 million USD), and Cuong Tan rice producer based in northern Nam Dinh province, 75 billion VND (3.51 million USD).

In addition, the Bac A Commercial Joint Stock Bank will sign a contract to serve as an investment consultant for the Nghe An-based TH Milk Joint Stock Company.

On June 29, the programme’s first four enterprises, all based in southern An Giang province, reached loans totaling 350 billion VND (16.42 million USD).-

Yaroslav – bright spot in Vietnam-Russia cooperation

The central Russian city of Yaroslav, one of the three cities hosting the just-concluded “Vietnamese Cultural Days” in Russia, has maintained a close relationship with Vietnam’s central city of Da Nang over the past 25 years.

The bond was started with a visit to Da Nang of a Yaroslav delegation in 1989, the time when Vietnam just began its door-opening policy. Immediately after the visit, a joint venture named Xovitcom was established between the two sides.

In July 1999, a delegation of Da Nang People’s Council visited Yaroslav, during which the two cities signed a Memorandum of Understanding (MoU) lining out directions for their cooperation.

In the following years, the two sides exchanged many delegations at different levels.

In particular, several important bilateral economic agreements were signed during a visit in 2002 by the then Vice Chairman of the Da Nang People’s Council Hoang Tuan Anh, who is now Minister of Culture, Sports and Tourism.

Russian agencies saw the ties between Da Nang and Yaroslav as a model for cooperation between the two countries’ localities.

Southern province aims at 10 percent GRDP growth

The southern province of Dong Nai has been formulating a wide range of measures to realise the gross regional domestic product (GRDP) target of between 10.8 and 11.8 percent this year, Chairman of the provincial People’s Committee Dinh Quoc Thai said.

The committee has ordered relevant agencies to restructure investment, focusing on reducing the public sector’s participation in projects.

They have also been asked to promptly deal with bad debt of credit institutions, practice thrift when using the State budget, and work harder to streamline administrative procedures and improve the local business climate.

Statistics show that Dong Nai’s GRDP topped 24 trillion VND (1.14 billion USD) in the first half of 2014, reaching 42.1 percent of its yearly target and rising by 10.8 percent from a year earlier.

Of that sum, 15 trillion VND (714.28 million USD) came from the industry – construction sector.

Director of the provincial Department of Planning and Investment Bo Ngoc Thu attributed this to the stable operation of foreign invested enterprises and a number of new firms becoming operational.

Over the period, Dong Nai collected more than 16.2 trillion VND (771.4 million USD) for the State budget, up 16 percent from a year before, the official added.

The province is one of the biggest destinations for foreign investors in the south.-

Exchange rate adjustment aims to boost exports

The State Bank of Vietnam (SBV) has recently adjusted the VND/USD exchange rate up by one percent. The adjustment has received a positive response and boosted confidence, the Vietnam Economic News reported.

The average interbank exchange rate was adjusted to increase from 21,036 VND to 21,246 VND per USD. Together with exchange rate adjustment, ceiling and floor levels reach 21,458 VND and 21,034 VND per USD, respectively.

SBV decided to adjust exchange rate after carefully considering macroeconomic factors. According to SBV’s Monetary Policy Department Director Nguyen Thi Hong, since the beginning of this year, macroeconomics, monetary market and banking activities have made positive developments.

Inflation has been curbed at a low level, while the consumer price index (CPI) just increased by 0.2 percent in May compared to April or an increase of 1.08 percent compared to December 2013. In particular, foreign exchange market has been guaranteed.

“In the context of controlled CPI at a low level in the first five months of this year and stable exchange rate for nearly a year, exchange rate adjustment will contribute to promoting exports and supporting economic growth,” Hong was quoted as saying.

In addition to macroeconomic factors, the stable situation in the monetary and foreign exchange market has made an adjustment. According to SBV, in the first five months of this year, trade surplus totaled 1.6 billion USD and overall balance of payment surplus reached more than 10 billion USD. In particular, foreign exchange reserves reached a record of 35 billion USD.

Central Institute for Economic Management (CIEM) Deputy Director, Dr. Vo Tri Thanh said that the transparency of information on the overall balance of payments and foreign exchange reserves had helped create a trust for the market, contributing to reinforcing the value of the VND.

He also added that signs of stress on the foreign exchange market were often expressed by the difference between the exchange rate on the free market and banks. However, by tracking actual transactions after exchange rate adjustment, there were no signs of stress on the foreign exchange market.

SBV will implement measures and tools to stabilise the exchange rate and the foreign exchange market. While inflation is controlled at a low level, decision on exchange rate adjustment will contribute to promoting exports and supporting economic growth in the second half of this year.

SBV Governor Nguyen Van Binh said that exchange rate adjustment would not exceed two percent. Many suggestions showed that the exchange rate would continue to be adjusted in the remaining months of this year. However, Vo Tri Thanh said that if exports face to difficulties, SBV will continue to adjust the exchange rate and the possibility of exchange rate adjustment to two percent will reach about 40 percent.

SBV will continue to flexibly operate monetary policy and closely coordinate with fiscal policy to control inflation, stabilise macroeconomics and support economic growth at a reasonable level, contributing to ensuring safety for credit institutions. Nguyen Thi Hong said that SBV will adopt appropriate measures, policies and tools to achieve set goals.-

VPBank get nods to acquire Vinacomin finance firm

The State Bank of Vietnam has allowed Vietnam Prosperity Bank (VPBank) to acquire Vietnam National Coal - Mineral Finance Company (CMF), the Saigon Times Daily reported on July 2.

VPBank will have responsibility to take over all assets, rights and obligations of the finance firm.

Within 15 working days since the decision took effect on June 30, VPBank will have to complete procedures to change all licences of the finance firm under current laws and regulations.

With total registered capital of 1 trillion VND, CMF will be renamed as VPBank Finance Company Limited after being acquired by the unlisted lender.

Early last month, the Government gave ‘in principle’ approval to Vietnam National Coal and Mineral Industries Holding Corporation Limited (Vinacomin) to sell all its chartered capital at CMF to VPBank.

Viet Capital Securities Company (VCSC) in a recent daily report said this move is part of the bank’s plan to become a leading retail bank in Vietnam by 2017.

VPBank also is seeking foreign strategic partners, with a maximum expected share sale of 30 percent of its registered capital. Last year Singapore-based Oversea-Chinese Banking Corporation (OCBC) sold their stake in VPBank, VCSC said.

The restructuring process of the nation's financial system is considered one of three pillars of the economic reform unveiled in late 2012. The two other pillars are public investment and state-owned enterprises.-

Lam Dong records high economic growth

The Central Highland province of Lam Dong recorded a gross regional domestic growth (GRDP) of 17.9 percent in the first six months of this year over the same period last year, reaching 17.055 trillion VND (801.585 million USD), the provincial People’s Committee reported.

Of the total, agro-forestry-fisheries sector contributed 4.6 trillion VND (216.529 million USD), up 10 percent, while industry-construction sector made up 5.3 trillion VND (250.651 million VND), a rise of 26.8 percent, and service 7.11 trillion VND (334.452 million USD), an increase of 17.3 percent.

In the six months, the province welcomed about 2.3 million visitors, including more than 130,000 foreign arrivals, up 9 percent year-on-year. It also earned 248 million USD from export, a surge of 67.4 percent, while importing an amount of goods worth 24.2 million USD.

At the same time, it paid 2.37 trillion VND to the state budget and 5.45 trillion VND to the provincial coffer.

In the January-June period, the province attracted 12 new projects totalling 285 billion USD, including three foreign-invested ones with a combined capital of 13.85 million USD.

Thanks to the application of high technology, its agricultural outputs stayed high, especially the production of vegetable and flower. Currently, the province has 35,000 hectares of high technology farming areas and 9,000 dairy cows.

According to the Lam Dong People’s Committee, the province will work harder to support local business, expand markets and promote trade and tourism in order to fulfil its yearly socio-economic goals with 14 percent GRDP growth for the whole year and a total state budget collection of 6 trillion VND.-

Coal exploitation in Vietnam

Vietnam backs stronger cooperation efforts in the mining industry with regard to trade exchange and investment cooperation, to realise the Bogor goals and the goals of APEC member states.

Vietnamese Deputy Minister of Industry and Trade Cao Quoc Hung made the statement at the fifth APEC Ministers Responsible for Mining (MRM) Meeting, which opened in Beijing, China, on June 27.

In line with the 2013 Bali Declaration, Vietnam supports and promotes this cooperation mechanism on the basis of mutual benefit and respect for international law, to ensure peace, stability, and prosperity in the Asia – Pacific region, Hung said.

Vietnam strengthens mining cooperation with other APEC member states, he said, adding that the country has developed joint projects with Russia, China, Japan and the Republic of Korea.

An APEC member, Vietnam wants to learn about regional economies’ experiences and observe advanced technology towards ‘green exploitation’, environmental protection, and energy conservation, Hung said.

At the meeting, representatives from 20 APEC member states said exploiting mineral resources helps maintain regional development and prosperity.  

They said the development, trading and use of minerals and ores plays an important role in boosting socio-economic development, generating jobs, reducing poverty, improving infrastructure, and narrowing the development gap in the region.

Romania promotes investment opportunity in Vietnam

The Chamber of Commerce, Industry and Agriculture of Galati city, East Romania, and the Vietnamese embassy in Romania jointly held a June 24 seminar on investment and business opportunities in Vietnam.

Ambassador Tran Xuan Thuy briefed participants on Vietnam – a peaceful country which has political stability, en emerging economy, a potential market for trade exchanges, and an attractive destination for foreign investors and visitors.

Trade counsellor Le Ngoc Thi introduced participants to economic and trade ties between Vietnam and Romania, as well as potential for economic cooperation.

A representative of the Vietnamese business association on Romania talked about experience and investment opportunities between the two business communities.

Romanian officials and businesses expressed their admiration for Vietnam’s recent Renewal achievements and said they want stronger economic ties with Vietnam.

D. Otrocol, a Government representative in Galati, proposed increasing information exchange and establishing twin cities with several Vietnamese localities.

Vietnam, Laos share experience in budget management

Financial experts of Vietnam and Laos met in capital Vientiane of Laos on June 27 to examine ways to strengthen State budget management.

Addressing the seminar, Vietnamese Minister of Finance Dinh Tien Dung shed light on difficulties and advantages in state budget collection and management in Vietnam, as well as measures to meet the target.

He shared experience in finance and budget management, saying management agencies should make accurate estimates based on good forecasts.

Dung also suggested that the Lao ministry implement feasible measures to ease difficulties for enterprises – a great source of budget collection.

The Vietnamese Minister expressed his pleasure at the fruitful cooperation between the two finance ministries, and said Laos has learned from recent Vietnamese experiences to better manage its budget and finance.

Vietnamese financial experts introduced ways to deal with debts in capital construction, boost management decentralisation, and prevent tax evasion.

Savannakhet-Lao Bao railway construction due in December

The first phase of a 220km high-speed railway project, connecting Laos’ Savannakhet province with Lao Bao Border Gate on the Laos-Vietnam border will get off the ground in December.

The information was released at a press conference by the Laos Ministry of Planning and Investment on June 27.

The US$5 billion project, financed by a Malaysian company, Giant Consolidated Ltd, will provide a non-stop connection to Singapore, through Thailand and Malaysia, into Kunming province of China, and then Vietnam.

Once completed, the railway line will help Laos facilitate trade exchanges, support East-West Economic Corridor (EWEC) integration, and promote economic growth in the Mekong Sub-region.

Philippines purchases additional 200 tonnes of Vietnamese rice

Vietnam has clinched a deal for the sale of 200 tonnes of rice to the Philippines to increase the National Food Authority’s stockpile of emergency rice reserves, official sources report.

Presidential assistant Francis Pangilinan noted the decision was made following a working session on June 26 between Philippine President Benigno Aquino and cabinet officials, discussing increasing prices of essential commodities, including rice.  

The Philippine Government reportedly plans to import a cumulative 800,000 tonnes of rice to add to the national stockpile.

Exchange rate adjustment should be more flexible

While saying the dong-US dollar exchange rate should not be floated during the next two years, experts suggested that the rate should become more flexible, within allowed limits.

In a report concerning the 2014 macro economy, released this week, members of the National Assembly's Economics Committee said the central bank should avoid raising the forex rate unexpectedly and then keeping it unchanged for a long period, as is currently being done. Instead, it said, the central bank should adjust the rate up and down in small increments, but more regularly.

The committee explained that, in fact, though the official dong-dollar rate has been maintained at VND20.828 for the past year, prior to an increase of 1 per cent decided by the central bank on June 19, the forex market saw strong movement this year due to the psychology among investors of waiting for the expected adjustment.

Further, there is a controversial requirement to devalue the dong to support exports amidst a decreasing inflation trend, and the committee said that the devaluation of the dong against the US dollar would not contribute significantly to improving Viet Nam's balance of trade, as the country's exports mainly depend upon imported materials.

However, the report says, if keeping the dong overvalued will cause difficulties in developing the country's supporting industries, then the dong overvaluing policy encourages imports, rather than domestic production. Also, this policy will not motivate foreign direct investment firms to increase their technological content and domestic value-added assistance.

The report also recommends that the exchange rate policy should be based upon a basket of various strong currencies, instead of only the US dollar.

Viet Nam currently anchors its exchange rate only to the US dollar, while the country's exports and borrowing do not only depend upon the US currency, the report says, reporting statistics that bilateral trade between Viet Nam and the US was 11 per cent last year, while the figures with China, Japan and the EU were 19 per cent, 9.5 per cent and 12.8 per cent, respectively.

Besides the US dollar, most of Viet Nam's foreign loans are in yen, Singapore dollar and euro, it noted.

The large dependence on the US dollar, while trade and loans depend upon other currencies, causes negative impacts on trade and investment ties between Viet Nam and large trading partners.

The policy to base its exchange rate on many currencies will help Viet Nam minimise negative impacts and risks caused by strong volatility in the world's monetary market and the global commodity market, the report says.

In the report, the committee has also suggested that in the mid-term of 2016-18, when the country's macro economy and financial markets are much improved, a policy to float the forex rate with State management will be a suitable option.

However, before that, the country must improve the restructuring of the economy and the financial and banking sector to successfully build a healthy financial market.

Capital control should be considered a temporary measure in the restructuring period, before the opening of financial markets occurs in 2018, according to the report.

Big C gives suppliers access to new trade

Many small and medium-sized enterprises have received support from the Centre for Support and Development of Small and Medium sized Enterprises, which was set up by French supermarket chain Big C to help local producers bring their products into the modern trade channel.

Nguyen Phu Tia, a producer of plum wine in Can Tho, said thanks to the centre's support with completing paperwork such as the food safety certificate, printing bar codes on the label, improving product design, and others, his products are now available in many supermarkets, restaurants, and shops in the city.

Pham Thi Thu Cuc, director of Rung Hoa Bach Cuc Co, Ltd, which grows organic tomato, said after working with the centre her products are now sold at many outlets nationwide.

Since being set up last October the centre has helped 22 local suppliers put their products on its shelves.

Speaking at a press conference held to officially launch the centre yesterday, Le Thanh Trung, its SME coordination and development manager, said the centre would also help create stable, long-term outlets for local firms, thus helping boost local production as well as diversify his supermarket's local sourcing.

SMEs face difficulties in expanding their markets, especially in the modern trade channel, because of a lack of understanding of legal procedures, market information, and capital, and unstable product quality and supply, he said.

The centre would help businesses complete legal procedures, improve their production capacity and management, and control product quality to ensure their products meet the requirements of modern retailers, he said.

It would also help them develop new products, he said.

By organising seminars in many provinces and cities like Hue, Nghe An, Nam Dinh, Viet Tri, and Quy Nhon since 2009 to bring together producers and distributors, Big C has signed deals worth more than VND100 billion (US$4.68 million) with over 110 small and medium-sized producers.

The supermarket has 28 outlets in the country while 90 per cent of its suppliers are local SMEs.

French programme nurtures entrepreneurs

Looking at the thriving business Juice "n" joy, a small beverage shop in HCM City's District 6, seems to have it is hard to believe that its owner, Pho Duc Khiem, failed in his previous business.

Earlier he had another small shop at the same spot selling mobile phones, but, despite his best efforts, the business was struggling and made very little profit though he did not even have to pay rent since he owned the building.

He said, "After two years I decided to close the shop."

He switched to selling beverages.

But his fortune did not seem to change until one day when he got an invitation from local authorities to attend a free training programme for small entrepreneurs like him.

"Micro Small Entrepreneurs Support Programme" began in 2013 with the main aim of building capacity for micro small entrepreneurs through basic management training to make them able to grow their business.

Organised by France's European Institute for Co-operation and Development (IECD) and Ton Duc Thang University's Social Development Training Centre, the programme had been run in Districts 6 and Thu Duc with both basic and specialised training courses.

"The objective of the programme is to help micro small entrepreneurs have better piloting skills in their business, consequently moving them from a logic of survival to sustainable and income-generating growth," Thai Huu Tuan, vice principal of Ton Duc Thang, said.

This would gradually help eliminate poverty, the living conditions of each family would improve, and society would become wealthier, he said.

The trainees are taught by people who have graduated in business administration and have at least two years of experience.

After more than a year of running the programme on a trial basis until the end of May, organisers held a formal inaugural ceremony in HCM City in the middle of June.

They said the expenditure during the trial period amounted to around US$85,000.

The programme targets micro small entrepreneurs like those selling sugarcane juice, soup, and coffee and washing vehicles and hairdressers.

"They teach us how to manage, calculate the investment, how to identify suitable strategies, and how to compete with rivals so that we can improve our business," Khiem said.

The teaching includes theory and practical training, he said.

He told Viet Nam News that he is now so confident that he plans to open more shops soon.

Because of that, despite being very busy, he spends several hours a week attending all the classes.

Nguyen Thi Cuc, a soup seller in District 6, said she was taught useful business theory.

"In just three days I found that the programme was very effective. So I introduced it to many friends."

According to the organisers, the programme has so far seen nine courses, which were attended by 110 micro entrepreneurs.

Thuy Blais, the programme project manager, said they made a painfully slow start. After going from house to house to persuade people to attend, they got all of three people to attend the first session.

But it has now become very popular and there are plans to take the programme to Districts 8, Binh Tan, and Tan Phu.

Blais told Viet Nam News that the organisers are looking for more sponsors to expand the programme.

Vinashin successor sees restructuring stuck

Shipbuilding Industry Corporation (SBIC), the successor of the debt-laden Vinashin, is facing a great challenge for implementing its restructuring scheme as its affiliates have found it hard to find investors.

SBIC has sent 73 sets of corporate files to the State Capital Investment Corporation (SCIC) hoping that SCIC would take over some of the companies, thus reducing the debt burden on the shipbuilder.

However, SCIC has not taken over any firms so far, citing that it does not have enough conditions.

SCIC is interested in only one firm, Ship Industry Investment & Export-Import Company, but the financial investment firm is still not satisfied with the documents related to its land, investment projects and obligations.

Given the hefty hardship, SBIC has set up plans to dissolve 50 member units in the coming time after SBIC has disbanded 12 units.

The enterprise is making bankruptcy procedures for 11 enterprises who have fulfilled chartered capital contributions and 10 others who have yet to get the job done.

Among 105 enterprises belonging to the now-defunct Vinashin that have to withdraw their capital contributions made through the use of brand equities as required by the Government, only 45 companies have finished the requirement.

For the remaining firms, 39 will have their licenses revoked, be dissolved or enter court receivership.

SBIC has set up a steering committee to carry out the equitization scheme of the parent firm.

The central bank has considered many solutions to reschedule loans while the General Department of Taxation has been told to review debt of SBIC’s affiliates.

The moves suggest that SBIC is still facing many difficulties in its restructuring.

Vinashin during its heyday set up an affiliate each day. All the enterprises are now mired in hardship.

Earlier, some officials had promised at the National Assembly that Vinashin would be profitable in 2013 or 2014. However, this has not come true although SBIC has got a lot of land and credit incentives.

Vietnam helps spur ASEAN-Africa ties

Vietnam is striving to support expanding cooperative ties between ASEAN and African countries in the International Organization of La Francophonie (IOF), said Deputy Prime Minister Vu Van Ninh.

Speaking at a forum to promote linkages among African and ASEAN banks in the IOF in HCMC on June 25, Ninh said Vietnam as a member of the IOF always commits to following the orientation on building an economic strategy of the IOF and has strengthened ties with every member state, according to the Government portal at

Trade ties between ASEAN and African countries in the IOF have grown significantly over the years, with trade between Vietnam and Africa totaling US$4.29 billion last year, a year-on-year increase of 22%.

However, the figures are still modest in comparison with respective potentials, requiring more efforts from the banking and business circles.

The Vietnamese Government will create favorable conditions for further cooperation with African countries in general and IOF member states in particular, open the door to businesses and encourage cooperation among banks, Ninh said.

He also expected the forum would open up a new chapter of commercial and investment links among banks and businesses.

Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry (VCCI), said Vietnam’s trade ties with Africa have grown 30-40% a year on average. However, the biggest challenge is payment as few African banks have adopted modern payment methods.

So, there remain hindrances when it comes to doing business with African companies as making payments through international banks is subject to high fees.

Moreover, high transport costs, a lack of information and limited efforts from trade promotion agencies have affected cooperation between the two sides.

To fix the problems, Loc suggested that a cooperative framework between Vietnam and African countries should be completed soon while the inter-governmental committee needs to expand its operations in Africa.

Sylvere Bankimbaga, vice president of the Club of Banks and Credit Institutions in Africa, said an initiative to promote South-South trade cooperation was launched three years ago and the recent permission granted to Vietnam’s telecom company Viettel to provide mobile services in Burundi was an example of the club’s effort to promote cooperation between the two sides.

French agency helps with raising farm produce value

The French Development Agency (AFD) has supported Vietnam to register geographical indications for three agricultural products including Shan Tuyet tea, Tam Xoan rice and Van Yen cinnamon so as to raise their export value in Asian markets.

At a ceremony to launch the project on enhancing rural development through development of geographical indications held on June 25 in Hanoi, Ta Quang Minh, head of the National Office of Intellectual Property of Vietnam, said the three products chosen for the project will serve as models for other agricultural products of Vietnam.

The project, implemented by the United Nations Food and Agriculture Organization (FAO) and AFD, will be carried out over three years in four Southeast Asian countries including Laos, Cambodia, Thailand and Vietnam with total funding of more than US$2 million from the French government.

It is aimed at enhancing the protection and promotion of geographical indications (GI) for agricultural products in these countries and raising awareness of GI in the region.

Michel Drobniak, economic and commercial counselor of the French Embassy in Vietnam, said the core purpose of the project is to raise income of farming households, help Vietnamese agricultural products easily enter overseas markets and increase consumer awareness of GI.

He said the project will create advantages for information exchange and connectivity between State authorities and private enterprises to boost the protection and promotion of Vietnam’s agricultural products on regional and global markets.

Vinatex enjoys special mechanism in valuation

The Government Office has issued a document giving Vietnam National Textile and Garment Group, or Vinatex, a special mechanism in corporate valuation, marking a significant change in the nation’s State-owned enterprise (SOE) equitization process.

With the decision in place, the country’s largest producer and exporter of garment and textile products will not take into account extra profits from relocation of Garment Company 8-3. Vinatex will maintain the book value instead of having to reevaluate its subsidiary Dong Xuan Knitting Company.

Notably, the group’s over VND1.3 trillion in irrecoverable debt will be eliminated from its corporate value. Investment in non-business units will be not calculated in the value.

Vinatex is set to launch its initial public offering (IPO) for the parent company via auction on July 22. With chartered capital of VND5 trillion, the group after going public will be 51% owned by the State while 24% will be offered to strategic investors, 24.4% put up for public tenders and 0.6% sold to employees.

Vinatex has also asked for a special mechanism in selecting strategic investors. It will choose three organizations – one financial investor and two in production and distribution.

Vinatex expects its revenues and profits to double when becoming a shareholder-owned company. According to its prospectus, Vinatex expects to fetch over VND3.9 trillion in revenues and VND355.7 billion in after-tax profits this year. The respective figures for 2015 would be VND6.4 trillion and VND506.6 billion.

Commenting on Vinatex shares, Saigon Securities Inc. (SSI) in a report said that Vietnam’s textile and garment industry in general and Vinatex in particular will continue to benefit from expanding export markets.

Growth opportunities will abound when Vietnam joins free trade agreements (FTAs) and multilateral trade deals, particularly the European Union-Vietnam FTA and the Trans-Pacific Partnership (TPP) pact.

The group holds large export market share coupled with a rising local market share. Vinatex has an extensive domestic distribution network with 82 Vinatexmart supermarkets in 26 provinces and more than 4,000 retail outlets.

Moreover, Vinatex is one of the few SOEs with limited exposure to non-core investments. Furthermore, it has already divested VND916 billion from VND1,083 billion in its non-core business operations, SSI said.

However, SSI pointed out some downsides such as the group’s unattractive profitability as most of Vinatex’s sources of revenues come from outsourcing business with a paper-thin margin.

Moreover, Vinatex is highly dependent on material imports, which adversely affects its profitability due to volatility in global prices of cotton and the fluctuating foreign exchange rate.

Between 2014 and 2017, Vinatex expects to invest VND11.5 trillion in expanding production and developing domestic material sources to reduce dependence on imports. This is a chance for large investors to become contractors and partners of Vinatex.

Viet Dragon Securities Company said in a recent report said that Vinatex could take out loans from the Asian Development Bank (ADB) to fund its investments at very low rates.

However, SSI said Vinatex investments in cotton planting, spinning, weaving and dyeing will require a long pay-back period and in-depth expertise, and that it might face stiff competition from existing foreign direct investment (FDI) producers.