Vietnam Airlines offers cheap flights to Seoul

The national carrier, Vietnam Airlines on January 4 has announced to offer a promotional program on an international route from Vietnam to South Korea. 

Under the program, a return economy class ticket from Hanoi to Seoul will cost VND8,1999,000 (US$350); and a return airfare from Ho Chi Minh City to Seoul will be VND3,899,000 (US$170), excluding taxes and fees.

The special price will be applied for flights departing from the announcement day to March 31.

Seoul is one of the international routes departing in Hanoi and HCM City to destinations, including London (the UK), Frankfurt (Germany), Narita (Japan) and Beijing (China) served by Vietnam Airlines’ fleet of new-generation airplanes.

Vietnam Airlines (VNA) was voted as having the Best Business-Class Seat Design on their widebody planes used for long haul flights, Airbus A350-900 and Boeing 787-9 Dreamliner, by travelers who are readers of the Chinese Global Traveler Magazine in December.

Housing land prices increase 20-40 percent in HCMC

Housing land offer price last year jumped up 20-40 percent over the previous year in many districts of HCMC especially Thu Duc, Binh Tan, District 9 and 12, said Commercial Real Estate Services Company on January 4.

According to the company’s report, the price increase was because many infrastructure projects have been built and implemented and better connected these areas with downtown area.

Last year, the city received 3,062 apartments from 13 projects, up 40 percent over 2015. Over 37,000 apartments were opened for sale from 28 projects including 18 new projects.

With the up momentum, investors are planning to continue developing many new projects in potential districts such as Cu Chi and Binh Tan where traffic system has been upgrading and broadening.

Price of glutinous rice soars

Vietnam’s rice exports last year sharply fell but shipments of glutinous rice to the Chinese market registered spectacular growth, contributing to the rising price of this type of grain. 

Vietnam last year exported 4.88 million tons of rice worth US$2.2 billion, down 25.8% in volume and 21.2% in value compared to 2015, according to data of the Ministry of Agriculture and Rural Development.

However, Vietnam’s glutinous rice export in January-November totaled more than 930,000 tons, with 820,000 tons of it to China, the source said. Meanwhile, in all of 2015, the nation’s glutinous rice export volume was just 400,000 tons.

The price of sticky rice at some provinces of the Mekong Delta region remains high owing to the increasing export of this type of rice to China in 2016.

Speaking to the Daily, farmers in Long An Province where the 2016-2017 winter-spring rice crop harvest would start in only a few days said many traders have come to place deposits for glutinous rice at a price of VND6,000-6,100 a kilo.

This price would give local farmers a profit of VND40-45 million per hectare.

Vietnam Airlines boasts hefty profit, debuts on UpCoM

Vietnam Airlines Corporation reported a 140% year-on-year pickup in last year’s pre-tax profit at around VND2.5 trillion (US$110 million), or 7% higher than the full-year target. The company officially traded shares on the Market for Unlisted Public Companies (UPCoM) on January 3.

A representative of Vietnam Airlines said the aviation market posted high growth, backing the airline’s outstanding business performance last year.

In particular, the corporation and its subsidiaries obtained consolidated revenue of VND76 trillion (US$3.3 billion), up over 10% year on year, and pre-tax profit of nearly VND2.5 trillion, a 140% year-on-year increase.

Of this, the firm earned around VND59.1 trillion in revenue and VND1.6 trillion in pre-tax profit which is 5.6 times higher than in 2015. It paid around VND4.9 trillion to the State budget, an 11% rise from the previous year.

The airline operated over 133,000 safe flights carrying 20.6 million passengers in 2016, up 18.7% over 2015. It transported 264,000 tons of cargo, beating its annual target by nearly 10%.

The corporation has focused on offering four-star quality service on its major domestic and international routes to southeast and northeast Asian countries, Europe and Australia.

Jetstar Pacific, majority-held by Vietnam Airlines Corporation, operates mainly on domestic routes, and offers highly competitive prices, as well as on short-haul international routes, while another offshoot of the corporation, Vietnam Air Services Company (VASCO), offers general aviation services.

Upon equitization, Vietnam Airlines Corporation inked a cooperation agreement with its Japanese strategic airline corporation ANA Holdings Inc. to develop products, expand flight networks, and enhance competitiveness.

The corporation traded its 1.227 billion VNA shares on the UPCoM on January 3 at the starting price of VND28,000 (US$1.24) per share, according to the Hanoi Stock Exchange (HNX).

Budget home buyers enjoy interest rate of 5% in 2017

The State Bank of Vietnam (SBV) has issued Decision 2544/QD-NHNN ordering commercial banks to offer an annual interest rate of 5% for outstanding loans for buyers of budget homes under the VND30-trillion home credit package.

According to the decision, the 5% rate is equal to the preferential rate under this program last year and applicable to loans disbursed before December 31.

The decision came into force on January 1, replacing Decision 2645/QD-NHNN dated December 30, 2015 on the 2016 interest rate for the home loan program. 

Regarding loans disbursed after December 31, 2016, clients will have to negotiate with commercial banks over interest rates.

The home loan program has benefited around 56,000 people after three years of execution. By end-November last year, banks had disbursed VND29.24 trillion with outstanding loans totaling VND24.17 trillion.

According to regulations, the central bank announces the lending rate for this program every year in December. The preferential rate usually equals to 50% of the average rate on the market and must not exceed 6% per year.

Agricultural enterprises to be supervised on financial issues

The Ministry of Agriculture and Rural Development will this year launch financial inspections into agricultural enterprises, the ministry said on its website on January 3. 

The ministry issued Decision 5457/QD-BNN-QLDN on financial supervision at State-owned enterprises and enterprises with State holdings represented by the ministry. The decision became effective on December 28, 2016.

State-owned enterprises with 100% chartered capital held by the ministry, single-member limited liability companies established by the ministry, and holding enterprises have to submit their annual financial plans and their production and business plans to the ministry no later than July. Based on the real situation, the ministry will map out plans for financial supervision of enterprises, and send it to relevant ministries and agencies by the end of December 31.

Under the agriculture ministry’s administration, there are currently ten enterprises wholly-owned by the State, mainly in the fields of irrigation and forestry, and ten others with a majority of shares held by the ministry.

Japanese consumer goods trade fair opens in Hanoi

A trade fair showcasing the simple designs, classic forms and practical uses of Japanese consumer goods has opened in Hanoi at the Friendship Palace at 91 Tran Hung Dao Street.

The fair is one of the country’s most important events in this segment, said Le An Hai from the Ministry of Industry and Trade at the opening ceremony. It presents products surrounding dining, the kitchen and household, gifts and decorative items as well as home living concepts and furnishing accessories.

More than 100 Japanese exhibitors are at the event including top brands such as the Kyocera printer company, the knife producer Miyabi and the porcelain tableware manufacturer Noritake.

 japanese consumer goods trade fair opens in hanoi hinh 1 Japan is an important export nation and strongly influences style in contemporary design around the globe, noted Hai, adding that an interesting aspect of their consumer goods is how they weave traditional designs into their products.

The show also includes everyday art, such as origami paper folding and demonstrations of the technique for wrapping gifts in Japanese furoshiki cloth.  

Bảo Việt sells Sabeco shares, earns VNĐ95 billion

Insurer Bảo Việt Holdings (BVH) on Tuesday sold its entire stake in the Saigon Beer-Alcohol-Beverage Corporation (Sabeco) for VNĐ95 billion (US$4.2 million).

The insurer sold 500,000 shares at VNĐ190,000 per share. On the same day, Sabeco was being traded at around VNĐ197,000 per share.

Sabeco made its debut of 641.28 million shares on the HCM Stock Exchange at a reference price of VNĐ110,000 per share, under the code of SAB, on December 6.

On Thursday morning, Sabeco closed at VNĐ197,200 per share.

BIDV first among banks in terms of assets     

Bank for Investment and Development of Viet Nam (BIDV) has overtaken Bank for Agriculture and Rural Development (Agribank) as the country’s largest commercial bank in terms of assets.

According to BIDV’s report, the bank’s total assets rose 17.5 per cent year-on-year in 2016 to reach more than VND1 quadrillion (US$44 billion). The bank’s total assets currently account for 14 per cent of the total assets of the whole banking industry, bringing it to the top in terms of operational scale in the banking system.

BIDV’s total outstanding loans and investments by the end of 2016 reached more than VND935 trillion, of which outstanding loans to economic organisations and individual customers were estimated at nearly VND760 trillion, up 17.9 per cent compared with 2015.

The bank’s capital mobilisation rose 20.5 per cent to touch nearly VND940 trillion, of which the capital mobilisation from economic organisations and citizens was estimated at over VND790 trillion.

BIDV’s credit structure is changing in a positive direction, with more focus on commercial and retail clients as well as small and medium enterprises (SME). Retail loans reached VND185.2 trillion, an increase of nearly 32 per cent year-on-year, capital mobilisation from retail clients segment increased 22.6 per cent, while SME loans touched over VND161.7 trillion.

Thanks to the credit growth, BIDV’s pre-tax profits last year reached VND7.5 trillion, up 7 per cent year-on-year.

The bank controlled its total bad debts at only 1.47 per cent, under the 2 per cent required by the central bank, which also stood at a low level in comparison with the entire banking system.

In 2016, BIDV implemented 28 credit packages and credit products with preferential interest rates for proritised customers. By the end of 2016, loans to exports segment, component suppliers industries and agriculture increased by 15 to 18 per cent.

Besides this, the bank actively reduced the lending rate by two times to support enterprises under the government’s policy. 

TPBank’s pre-tax profit rises by 13%     

Tien Phong Commercial Joint Stock Bank (TPBank) reported pre-tax profit of VND707 billion (US$31.1 million) in 2016, posting an increase of 13 per cent year-on-year.

Its total assets reached more than VND105.8 trillion last year, increasing 39 per cent from the previous year and surpassing 16 per cent of the set target.

With the positive result, the bank’s return on equity reached 12 per cent. It posted total mobilised capital of VND97.5 trillion, 41.5 per cent higher in comparison with 2015 and 15 per cent higher than the set target.

TPBank said its credit witnessed high growth to reach VND47 trillion. It continued to focus on individuals and small-and-medium-sized enterprises. Its bad debts were only 0.51 per cent, which was much lower than the target of less than two per cent.

In August, TPBank announced that International Financial Corporation (IFC) was its new shareholder after making a quasi-equity investment of VND403.1 billion in dividend preferred shares. With the deal, IFC acquired nearly 5 per cent stake in the bank, bringing TPBank’s total chartered capital to VND5.84 trillion.

For the first time, the bank received the B2 rating from Moody’s Investors Service – the highest level among joint stock commercial banks in Viet Nam. It was also awarded the Best Auto Loan in Viet Nam 2016 from Asian Bankers.

The bank has set a target to become one of the country’s leading digital banks while improving transparency and professionalism.

Nearly 135 trillion VND invested in power projects in 2016

The state electric utility Electricity of Vietnam (EVN) announced it channelled more than VND134.85 trillion (US$5.93 billion) into boosting national grid capacity last year.

The figure was 1.8% higher than the investment sum the group planned for 2016 and was equal to 9% of the total of the entire national social investment.

As a result, EVN put into operation five turbines at Lai Chau and Huoi Quang hydropower plants as well as Duyen Hai thermo-power plant, with a combined capacity reaching 2,305 MW.

The pace at most other key generation projects is on schedule.

In 2016, EVN completed 297 projects on upgrading and expanding the national grid, including transformer stations and transmission lines which are key to power security in the south, electricity transmission capacity between the north and the south, and electricity supply for Hanoi and key northern economic zones.

As part of EVN projects last year, Cai Chien island in the northern province of Quang Ninh, Cu Lao Cham island in the central province of Quang Nam, as well as Lai Son and Hon Nghe islands in the southern province of Kien Giang have joined the national grid.

Projects to expand electricity access in Lao Cai’s Muong Khuong district and for 2,800 households in Son La have been underway since 2016 and are expected to finish prior to the upcoming Lunar New Year, which is due to fall on January 27.

According to EVN Director Dang Hoang An, the group mobilised some US$2.96 billion worth of official development assistance and preferential loans from international financial institutions, such as the World Bank, Asian Development Bank and Japan International Cooperation Agency.

Spanish firm to develop mega park in Thua Thien-Hue

PSH Group from Spain has received approval in principle from the People’s Committee of Thua Thien-Hue province to develop the Hue Amusement and Beach Park at Vinh Thanh and Vinh An communes, Phu Vang district.

The 49.5ha project, worth 1.06 trillion VND (46.7 million USD) will comprise 1,000 four-star and five-star hotel rooms, 93 villas and various other facilities, a committee source told baodautu.vn.

The construction is slated to kick off in the second quarter of 2017 and finish two years later, the provincial Department of Planning and Investment said, adding that the project will make the province more attractive to tourists by providing a wide range of entertainment options.

The central province welcomed 3.25 million tourists in 2016, including over 1 million foreigners, up 4 percent year on year.

Gov’t to own half of Vinafood II stake after equitisation

The Government will own 51 percent of stake in the Vietnam Southern Food Corporation (Vinafood II) after its equitisation. 

The direction was made by Deputy Prime Minister Vuong Dinh Hue regarding the equitisation of the corporation in line with the Government’s Decision 58/2016/QD-TTg issued on December 28 last year.

The Ministry of Agriculture is tasked with overseeing Vinafood II’s business valuation and other financial processes.

The ministry is responsible for instructing the corporation to make its equitisation plan to be submitted for the Prime Minister’s approval.

Established in 2010, Vinafood II is considered the biggest rice exporter in Vietnam.

Petrol prices remain unchanged in regular price adjustment

The prices of RON 92 petrol and bio-fuel E5 remained unchanged while diesel price 0.05S increased slightly in the first regular adjustment of petrol prices in 2017 as from 4:00 pm on January 4.

Following a joint decision by the Ministry of Industry and Trade and the Ministry of Finance, the prices of diesel 0.05S and kerosene increased 324 VND and 310 VND per litre, respectively. 

The prices of petrol and oil are adjusted every 15 days depending on changes in the world market. In 2016, petrol price was raised 13 times, bringing the prices up by a total 6,000 VND (0.264 USD) per litre, and reduced nine times with a total amount of 4,463 VND (0.196 USD) per litre. 

As a result, the current petrol price is 1,000 VND higher than that at the beginning of 2016.

RON 92 and E5 petrol is now sold at no more than 17,594 VND (0.774 USD) and 17,322 VND (0.762 USD) per litre respectively, while current ceiling prices of diesel 0.05S and kerosene are 13,757 VND (0.605 USD) and 12,253 VND (0.539 USD) per litre. 

According to the ministries, the average global prices of RON 92 during the last 15 days to January 4 went up 3 USD per barrel  to 66.537 USD per barrel, whilst that of diesel 0.05S rose by 2 USD per barrel to 64.493 USD per barrel.

Banking sector ensures safety, efficiency

The State Bank of Vietnam has reviewed its last year’s performance and mapped out plan for this year.

During a press conference in Hanoi on January 4, the State Bank of Vietnam (SBV) announced its major achievements last year, including appropriate supply of cash to stabilize interest rates, control of inflation below 5% and safe expansion of credit. 

In her remarks, SBV Deputy Governor Nguyen Thi Hong said the bank will keep a close watch on the developments of the domestic and global economies to devise proper measures to ensure stable exchange rate management in 2017.

The exchange rate and foreign exchange market in 2016 stayed stable despite pressure from unpredictable fluctuations in the global market. The bank also asked credit organisations to balance capitals, stablise deposit interest rates, reduce costs and improve operational efficiency, she added.

This year, the bank will pursue its active and flexible monetary policy to reflect world market situation.

Statistics and forecast quality will be improved to stabilize the market, ensure affluent liquidity and appropriate foreign exchange policy.

The bank sector aims for a credit growth of 18% and total payment instruments of 16-18%.

Banking sector in dire need of more employees

Many banks have plans to expand employment this year as around 25.6% of banks said they had fallen short of staff by the end of last year, the Monetary Statistics and Forecasting Department of the State Bank of Vietnam revealed in a survey.

According to the survey, which gathers responses from 89% of commercial banks and central bank branches, the demand for financial and banking services had increased quarter after quarter in 2016, with the strongest increase in demand for loans, followed by payment, card and deposit services. As such, the demand for more employees will be running high this year, Thanh Nien newspaper reports. 

In its business plan survey conducted among all credit institutions and central bank branches nationwide between November 25 and December 13 last year, the department found that most banks are optimistic about their businesses this year and expect higher profits than last year.

Banks predict that the customer demand will keep rising in the first quarter this year and the entire year.

Customers line up for Tet hampers     

With just three weeks to go for Tet (the Lunar New Year), the market for gift hampers has heated up with supermarkets, markets and shops offering a range of them to cater to both business and individual customers.

Saigon Co.op, which owns the Co.opmart supermarket chain, is offering more than 40 kinds at prices ranging from VND99,000 (US$4.36) to VND1.999 million ($88).

The hampers usually have confectionery, tea, coffee, cashew nut, jam, wine and beverages made by prestigious brands, both domestic and foreign.

From now until January 17, Co.opmart and Co.opXtra supermarkets nationwide will offer free delivery of gift baskets in provinces and cities where they have outlets.

Big C supermarket is selling more than 100,000 gift hampers of 17 different kinds at VND79,000-1.5 million.

South Korean supermarket chain Lotte Mart also has many kinds of hampers based on various themes to cater to clients’ diverse tastes and demands.

Many shops at traditional markets like Tan Dinh, Thi Nghe and Ba Chieu are also displaying various kinds of hampers.

Tran Thanh Lan, a trader at Thi Nghe Market, told Viet Nam News: “Apart from these already-wrapped hampers, customers want to buy gifts and my shop packs the gifts for them.”

Her shop also takes orders on the phone and delivers gifts, she said.

“Sales are expected to increase sharply from the middle of the lunar month.”

Tet is on January 28. Offers for Tet hampers are also inundating shopping websites these days, but buyers are advised vigilance when shopping on these sites.

Nguyen Huynh Trang, deputy director of the city Department of Industry and Trade, said his department has kept a close eye on prices by getting regular updates from the market.

Companies and distributors can meet the demand for goods during the nation’s biggest festival, supply is abundant and prices are under the closest supervision ever, she said.

There will be no shortage of goods or sudden price surges during Tet, while quality would be strictly controlled, she said.

A Big C spokesperson said the supermarket has enough stocks for Tet and they are 20-30 per cent higher than last year.

The supermarket has pledged not to increase prices between December 13 and January 27, except those of fruits and vegetables, fresh and frozen foods, beers, milk and other dairy products.

Big C, Co.opmart, Lotte Mart and many other supermarkets have launched Tet promotions.

According to the department, the total value of goods to be stocked in HCM City during the one month to Tet (December 29 to January 27) will be VND9.7 trillion ($427.3 million), with goods under the city’s price stabilisation programme accounting for VND3.7 trillion.

The city administration has instructed the Department of Agriculture and Rural Development to intensify checks of food production and trading establishments as well as the transport of foods to the city to safeguard public health during the Lunar New Year. 

Rice producers, exporters aim to increase consumption

An Giang Import Export Company (Angimex), one of the large rice export companies in Viet Nam, plans to focus on improving its rice quality and better controlling plant-protection residues to promote rice exports, especially to the US and EU markets.

Vo Truong Giang, director of Angimex’s raw material development centre, said that Angimex exported about 120,000 tonnes of rice last year to many markets, including Asia, Australia, Japan and the US.

Exports fell by 20 per cent over 2015 due to drastic competition with Thai rice and an increase in rice production in Viet Nam’s traditional rice-importing countries, he said.

 “It will be hard to compete with Thailand in exporting white rice. Therefore, our orientation for this year is to focus on controlling residues and expand production of specialty fragrant rice to boost export to the US and EU.”

“The US has a huge demand for fragrant rice. But to export to the market, our rice must meet hygiene and food safety standards.”

The company has decided to rent 100ha of land to cultivate rice for export to the US, he said.

Giang said the company has more than 3,000ha of rice material zones in which it has developed close linkages with farmers and co-operatives in An Giang, Kien Giang and Dong Thap to grow Japonica (a Japanese rice variety) and Jasmine fragrant rice, he said.

“Asian countries, especially China, have high demand for Japonica rice,” he said.

With a forecast that rice export would continue to face difficulties this year, not only Angimex but also other rice exporters and producers have mapped out measures to boost consumption of their products this year.

Duong Van Hung, director of Tan Cuong Agricultural Services Co-operative in Dong Thap Province, which has more than 1,200ha under rice cultivation, mainly fragrant rice, said the co-operative would focus on improving quality to ensure that its rice meets hygiene and food safety standards set by importing countries.

“Currently, we have 200ha for growing organic rice and 100ha for safe rice,” he said. “We collaborated with a rice export company to market our organic rice in the US market and to be accepted by the market.”

Rice productivity following organic cultivation is in general 20-30 per cent lower than traditionally planted rice, but selling prices are 30-40 per cent higher than traditionally planted rice, he said.

“We will expand the area to cultivate safe rice in the coming time. I think if our products meet hygiene and food safety standards, there will be nothing to worry about in terms of consumption,” he said.

According to the Ministry of Agriculture and Rural Development, Viet Nam exported an estimated 4.88 million tonnes of rice last year, earning US$2.2 billion, a year-on-year decrease of 25.8 per cent in volume and 21.2 per cent in value.

Deputy Minister Tran Thanh Nam said free trade agreements would open opportunities for Viet Nam to enter markets like the US, the EU and Japan, but it would bring challenges due to lack of competitiveness, especially in terms of quality and branding positioning, compared to competitors.

Nam said that rice exports last year did not meet expectations, especially because of market difficulties.

“But I think it was a lesson for enterprises. Previously, we mainly focused on quantity. This should be changed now. Enterprises must establish their own material zones and focus on improving quality of their rice to international standards,” he said.

Pham Thai Binh, director of Can Tho-based Trung An Hi-Tech Farming JSC, a large rice exporter, said consumers both at home and abroad were becoming more and more aware of what they eat and were willing to pay more for safe products.

To improve the competitiveness of Vietnamese rice, farmers and businesses must join hands to create large-scale rice fields, apply modern farming techniques and mechanise production, he said.

“Businesses must play a main role in the connection chain, providing farmers with input materials and strictly supervise the production process of farmers as well as ensure outlets for their products,” he said.

The company has established a close link with farmers to grow fragrant Jasmine rice, Japonica and other rice following GlobalGap and organic standards, he said.

Its rice products are available in many countries, including the US, the EU and Southeast Asia, with exports accounting for 65 per cent of its total production output, he said.

According to experts, the variety of rice is an important factor to improve rice quality.

Huynh The Nang, chairman of the Viet Nam Food Association, said there are hundreds of rice varieties but many have similar quality.

Researches to create new high-quality rice varieties that are fragrant, soft and different from other varieties should be encouraged, he said, adding that this would improve Viet Nam’s rice quality and competitiveness.

Le Van Banh, head of the ministry’s Department of Processing and Trade for Agro-Forestry-Fisheries Products and Salt Production, said that developing brands for rice products was important to help raise the competitiveness of Vietnamese rice at home and abroad. 

Bad debts continue to squeeze banks’ profits

In the third quarter of 2016, Kienlongbank’s gross profit decreased by nearly 12%.

As a result, in the first nine months of the year Kienlongbank’s pre-tax profits were worth only VND19.8 billion.

The bank management attributed the profit drop to increasing operation costs and risk provision for bad debts.

The lender’s bad debts ratio increased from 1.12% at the beginning of the year to 1.46%. Significantly, irrecoverable debts increased by 54% to VND187 billion (US$8.3 million).

Kienlongbank will thus find it difficult to achieve the year’s pre-tax profit target of VND300 billion (US$13.3 million).

Eximbank, quickly recognising the difficult business situation, has tweaked its business plans.

By late second quarter the bank’s bad debts had increased sharply to 5.3% despite the fact its credit growth rate was minus 4.62%.

Consequently, its first half pre-tax profit was only VND80 billion.

In the first nine months of the year Eximbank had a pre-tax profit of VND202 billion but an after-tax loss of VND43 billion.

Its bad debts were 3.35% of total outstanding loans.

In the face of the downbeat situation, Eximbank’s executive board slashed the full-year profit target by 44% to VND400 billion.

State giant BIDV had to make risk provision of nearly VND7 trillion in the first nine months of 2016, an 80% rise over the same period last year.

According to the HCM City Banking University, in 2016 the banking sector had to set aside VND91.374 trillion as bad debts provisions, much higher than the VND74.828 trillion in 2015 and VND59.287 trillion in 2014.

Of this figure, provision for bad debts amounted to VND53.098 trillion, and bonds issued by the Vietnam Asset Management Company against bad debts were worth VND38.276 trillion.

These ate into the profits of banks, including major ones, and as a result shareholders did not get dividends.

Clothiers and fabric makers ‘approaching stagnation’ in 2017

Clothiers and fabric makers in Vietnam are 'approaching stagnation' as sales and orders in the international markets continue to dwindle in the aftermath of the demise of the Trans Pacific Partnership.

Overall foreign and domestic sector exports for the segment slowed to a 4.8% growth rate – the lowest in more than a decade – tallying in at US$22.58 billion for 2016, reports the General Department of Vietnam Customs.

Shoemakers didn’t fare much better, said Vietnam Customs, with a growth rate for 2016 of 8.1%, roughly one-half of the 16.3% growth rate experienced during 2015 and nearly one-third the rate for 2014.

Local businesses are left stinging after losing out on the opportunity for investment and exports resulting from the death of the Trans Pacific Partnership (TPP) many industry leaders have said.  It has left a void that clearly needs to be filled.

Vu Duc Giang, chair of Vietnam Textile and Garment Association, is one of those who has acknowledged the investment drop is creating a drag on the industry segments, but also notes that higher labour and material prices are a contributing factor.

Clothing and fabric exports are 'approaching stagnation' and sales and orders for the international markets show no sign of making a comeback any time soon, Giang warns.

With the overall global clothing and fabric demand having decelerated in 2016 and competition with China, India, Indonesia and Bangladesh increasing, the slowdown couldn’t have come at a worse time.

The real concern is that the longer-term decline in growth has become the norm rather than a blip and it requires the industry to make 2017 a year of action and not just sit idly by twiddling their thumbs.

In the upcoming year, action must be taken on infrastructure, skills, and access to non-equity finance for local businesses in the industry segments— or the Vietnam economy could suffer negative consequences.

Phan Thi Thanh Xuan, general secretary of the Vietnam Leather, Footwear and Handbag Association, reportedly averred that the slowdown is the result of a shift away from globalization.

Xuan pointed to Brexit and the failure of the TTP as evidence that though globalization has been a powerful economic force for the past two decades, its continuation is not a given.

He said clothiers and fabric makers in Vietnam had started to see a significant drop in orders following the vote by Britain to exit from the EU, which has been further exasperated by the now defunct TPP.

Many in the industry are keen to invest more money in plant and machinery, which holds great potential to increase productivity, Xuan suggests. 

The investment would also improve the quality and variety of our products and help build brand strength in international markets.

Both Giang and Xuan point to a Vietnam-EU free trade agreement on the horizon that could be the impetus needed to turn the industry segments around. 

The trade pact is expected to come into force in 2018, make market entry in the EU less costly and provide the domestic sector a competitive edge.

However, to take advantage of the opportunity the trade pact affords requires a considerable retooling and revamp of the industry. 

The industry segments are currently heavily dependent on Chinese imports for intermediary goods and raw materials.

Those imports currently from China would most likely need to be shifted to the Republic of Korea or significant investment made in the supply chain in Vietnam and those products produced in country due to the complex yarn forward rules of the pact.

Clearly, the sharp decline in clothing and textile exports, to levels approaching stagnation, is disturbing and is causing some to become pessimistic about prospects, but what is needed now is proactive action and dynamic industry leadership, they emphasized.

Thua Thien-Hue to spend VND40bn on rattan development

Thua Thien-Hue Province People's Committee has announced it will invest over VND40bn (USD1.7m) in the rattan craft on January 2.

For the second phase of rattan craft development for the 2017-2020 period, it's expected that at least 1,500 hectares of rattan and 500 hectares of bamboos would be planted. The province will also preserve and expand the craft to promote its economic, cultural and environmental values. 

It is hoped that a stable market for rattan products can be formed and production would help boost local tourism and the export industry which, in turn, will create jobs and increase local people's revenues. It also contributes to the economic restructuring and new rural development.

The programme will be carried in two mountainous districts Nam Dong and A Luoi, Huong Tra and Huong Thuy communes along with some communes in Phong Dien, Phu Loc districts.

Local authorities have encouraged the people to participate in the rattan development.

It's estimated that the province needs VND40.4bn (USD1.7m) for the second phase.

Thua Thien-Hue Province has also announced its forest development and protection plan for 2017-2020 period with an estimated cost of VND243bn. It expects to grow 9,000 hectares of industrial plantations and 4,000 hectares of protective forests.

Emirates airline offers discount tickets

Dubai’s Emirates airline has announced a promotional program with discount tickets on flights running through November 2017.

Accordingly, the discounts will be applied to tickets bought on January 3 -7 for departures from January 9 to November 30.

Economy class airfares will be about US$600 (VND13.6 million) flights from Ho Chi Minh City to Europe, HCM City- Middle East (US$760), and HCM City- North America (US$830), HCM City-Africa (US$952) and HCM City-South America (US$1,417).

For business class, airfares will be US$1,713 for flights from HCM City to Europe, and HCM City-Middle East (US$2,200), HCM City-North America (US$2,900), HCM City-Africa (US$2,600) and HCM City-South America (US$4,850).

Meanwhile, economic class airfares for flights from Hanoi will be US$126 to Yangon, US$490 to Europe, US$690 to Middle East, US$835 to North America, and US$4,856 to South America.

Business class airfares will be US$491 for flights from Hanoi to Yangon, Myanmar, US$1,717 to Europe, US$1,847 to Middle East, US$2,969 to North America, US$2,521 to Africa and US$4,856 to South America.

Emirates Airline currently conducts everyday flights departing from Hanoi and Ho Chi Minh City. Flights depart from HCM City at 11.55pm and arrive in Dubai at 4.25am the following morning while the others leave Hanoi at 22.45pm for Yangon at 00.20am the following morning, and leave Yangon at 1.50am to arrive in Dubai at 5.45am.

Purchasing power increases 20 percent in supermarkets during holiday

Supermarkets in Ho Chi Minh City have reported a 20 percent year on year increase of purchasing power during the last three day New Year holiday. 

Director of Big C’s PR division Ho Quoc Nguyen said that buying power was up in all commodities with some outweighing such as food, confectionary, beverage, sugar, cooking oil, rice and msg regular crystal.

The supermarket chain has pledged not to hike prices from now until the lunar New Year (Tet) which falls on January 28-30. At present, Tet goods have been shelved at Big C supermarkets with the volume up 20-30 percent over the same period last year.

Saigon Co.op supermarket chain saw the number of customers double to triple over normal. The most purchased items comprise fresh and processed food, cosmetics and clothes.

Large trade centers namely Vincom, Parkson, Aeon, Crescent-mall, SC VivoCity and Mega Mall were packed with customers during the holiday.

Businesses said that the high purchasing power was partly thanks to promotional programs with the discount of up to 50 percent on thousands of items.

Traditional markets have recorded good consumption of food, clothes and footwear items with prices having been relatively stable.

Businesses forecast that the purchasing power will continue surging from now until the lunar New Year and skyrocket in two weeks before Tet.

VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR