VNPT provides e-invoice for telecommunication services in Ha Noi

The Viet Nam Post and Telecommunication Group (VNPT) starts to officially provide e-invoice for postpaid mobile phone and Internet subscribers across Ha Noi from May 4.

VNPT provides e-invoice for telecommunication services in Ha Noi from May 4.

Accordingly, when using e-invoice, subscribers just need to access to http://hanoi.vnpt.vn, log in and follow the instruction to download telecommunication invoice easily.

The application of e-invoice is valued as a payment method that brings in many utilities to customers. Using this utility, customers will also avoid the risk of loss, damage or time consuming in searching invoice.

With corporate customers, this e-invoice is also fully valid in accordance with legal regulations, so it would be used for accounting and tax statement.

The use of the e-billing system also helps businesses save costs on printing, delivering and storing paper invoices, which in turn helps to simplify accounting procedures.

The e-invoices were issued on a trial basis in Cau Giay District last November with more than 300,000 invoices. Four more districts started to use this system from March this year, including Ba Dinh, Tay Ho and North Tu Liem and South Tu Liem Districts.

Gov't to fine more listed firms for failing to register

The State Securities Committee (SSC) has fined several companies which had failed to register themselves with the SSC and the Viet Nam Securities Depository (VSD) in time for trading, further action will also follow, stockbiz.vn reported last Thursday.

On April 4, the Ha Noi Construction Corporation (HANCORP) was fined VND7.5 million (US$347) when it was found guilty of delay in registering itself as a public limited company within a year of its initial public offering (IPO) for 203 individual investors last March. Currently, the company has VND1.41 trillion (US$65.3 million) of chartered capital.

Last month also, the SSC had fined five other companies, including Nha Trang Post Hotel JSC and Thai Trung Steel Rolling JSC which had to pay the highest charge of VND340 million ($15,740) for delaying for more than a year to register with the VSD and the SSC after privatisation.

Between 2011 and 2014, these two companies had organised the IPO to increase their chartered capital from VND306 billion to VND508 billion and from VND10.2 billion to VND21.3 billion, respectively, but neither of them registered with the SSC.

The problem arises since companies that go in for public equity have some time before registering their stocks with the SSC and the VSD for trading. It means that investors cannot protect their rights and benefits, and their shares cannot be traded on the market until the companies finished registering.

Under the Decision 51/2014 issued by the Prime Minister last September, state-owned companies that were equitised after November 1, 2014 would have only 90 days to register with VSD and SSC for trading. Companies that were equitised before that date would have one year to register for trading.

However, investors think the fines are only warnings, and want protecting of their investments by reducing the time span during which companies must register their stocks with the VSD and the SSC after issues an IPO.

Viet Nam takes part in trade forum in Argentina

Viet Nam participated in the Trade Exchange Forum at the 2015 International Business Fair, which opened last Saturday in Buenos Aires, Argentina, for the first time.

Representatives from the Vietnamese Commercial Affairs mission to Argentina introduced the Government's economic policy as well as potential markets for bilateral trade and investment partnerships.

Trade turnover between Viet Nam and Argentina hit a record high of US$1.92 billion in 2014.

Viet Nam's exports to Argentina reached $214.2 million, exporting footwear, garments, tea, coffee and agricultural machines to Argentina. Viet Nam, in turn, imported animal feed, cereals, leather materials and beef from the South American country.

New enterprises surge in first four months 2015

In the first four months of the year, 28,235 new enterprises were recorded nationwide, likely generating jobs for 427,900 labourers, the General Statistics Office has said.

The new businesses’ total registered capital accounted for 162.5 trillion VND (7.74 billion USD), up 13.3 percent compared to the same period last year.

Notably, 9,186 new enterprises with a total registered capital of 51.3 trillion VND (2.4 billion USD) were registered in April alone, up 73.9 percent in the volume of new enterprises and 52.2 percent of registered capital compared to March.

Meanwhile, another 6,834 businesses adjusted their registered capital to a combined 223 trillion VND (10.6 billion USD). The average registered capital density of an enterprise accounted for 5.7 billion VND (271,000 USD), up 1.8 percent against the same period last year.

The number of enterprises returning to their operations in the period stood at 6,316, an increase of 7.7 percent compared to the same period last year.

These upward trends suggest positive economic prospects, with more investment and business opportunities being created for enterprises.

Building materials set for rapid growth

The Ministry of Construction has set a 10-15 percent annual growth target for exports of building materials so that they can reach 2-2.5 billion USD by 2020 under a plan to develop the industry it has submitted to the Government for approval.

In envisages that by 2020 the country will export 20-28 million tonnes of cement, 100-130 million tonnes of ceramic tiles and 6-7.5 million tonnes of granite tiles, 6-8 million sanitary products and 100-110 million square metres of glass.

To achieve them the ministry will help the industry's exports become competitive, consolidate traditional overseas markets and seek new outlets for products like cement, granite tiles, porcelain tiles, and sanitary ware.

A ministry official, who asked not to be named, said the targets were predicated on the recent recovery in both the domestic building materials and construction industries.

In 2014 the building materials industry registered growth of 10.2 percent and is expected to grow by at least 10 percent this year.

Insiders said conditions are very favourable for the building materials industry to achieve its growth plans this year.

They referred to the fact that many large construction projects are due this year in HCM City — like Vinhomes Central Park Tan Cang, The Landmark, Masteri Thao Dien, the R6 Vinhomes Royal City, Vinhomes Riverside, and Imperia Garden.

A total of 169 transport projects are also scheduled to get underway this year, including some key projects like the Ninh Binh-Thanh Hoa-Vung Ang Expressway and Trung Luong-My Thuan Expressway.

Several factories and warehouses are set to be built across the country in anticipation of an economic recovery and increase in foreign direct investment flows.

Cement producers will have the opportunity to pare inventories and get decent prices because demand has tended to rise in recent times and new supply is limited.

As of the end of last year the country had 74 cement plants with a combined capacity of 77.35 million tonnes a year. Domestic market was 70.6 million tonnes after rising by 15 percent, helping significantly narrow the gap between supply and demand.

This year demand is expected to rise by 3 million tonnes, helping reduce inventories.

In the construction plastics sector, competition is fierce. There are four major producers of construction plastics, all of them listed, namely Binh Minh Plastics (BMP), Tien Phong Plastics (NTP), Da Nang Plastics, and Dong Nai Plastics.

BMP and NTP, among them, account for 50 percent of the market share.

To compete with them, smaller companies have had to increase commissions for agents and reduce prices if they want to bid for projects, affecting both their profits and the industry's growth.

The 40 percent drop in fuel prices has been a boon for building materials producers, especially those that make plastic pipes and stones for construction since they are based in areas far away from the market.

Analysts said major building materials producers with wide distribution networks, good management and the ability to expand production could develop further and expand their market share since demand was rising again.

Nghe An licenses 49 new FDI projects in four months

Central Nghe An province has granted licences to 49 new foreign-invested projects with a total investment of over 6.8 trillion VND (315.7 million USD) during the first four months of 2015, said the provincial Department of Planning and Investment.

Eight other projects also received the local authority’s nod to add a combined 237.1 billion VND (11 million USD) to their investment capital.

Nghe An province has increased its effort to lure more foreign investments by not only preferential policies but also timely support to help investors solve difficulties, notably in public administration, land clearance and planning.

From 2015 onwards, the locality will focus on land clearance for key projects, including the Vietnam-Singapore Industrial Park 6 (VSIP6), Vinh - Cua Lo Avenue, General Hospital and Tuan Loc Industrial Park.

The province has enhanced coordination with the Foreign Investment Agency and foreign investment promotion bodies, for example the Korea Trade-Investment Promotion Agency (KOTRA) and Japan External Trade Organisation (JETRO) in order to improve efficiency of its investment promotion efforts.

Japan's Nitori Holdings to build factory in VN

Nitori Holdings, the owner of the Japan's biggest chain of furniture supermarkets, will build a furniture factory in Viet Nam in 2017.

Nitori Holdings plans to expand its furniture production in Viet Nam. Its products will be exported. Photo Bloomberg.com

As planned, the factory will assemble and produce materials and parts of furniture products. Most of the products will be exported and sold in the Japanese market.

The factory will be located on a 400,000sq.m plot in the southern province of Ba Ria–Vung Tau. Its production capacity has not been decided yet, but it will target manufacturing the corporation's key products, such as kitchen cupboards, sofas and buffers.

The construction work involving an estimated investment capital of billions of Japanese yen, will be operational by February 2018. Its production will be expanded in the future.

The factory will be the second of its kind in Viet Nam. The first one is in Ha Noi. Nitori Holdings owns a chain of 346 furniture supermarkets in Japan, and 27 supermarkets in the United States, China and Taiwan.

During the fiscal year of 2015, the corporation plans to open an additional 40 supermarkets in Japan and 14 others abroad. It is aiming to boost the total store count to 1,000 by 2022.

Operator of Vietnam's sole refinery seeks for further tax cut for imported diesel oil

Binh Son Refining and Petrochemical JSC (BSR), the operator of Vietnam's sole operational oil refinery of Dung Quat, has sought for further reduction in import tax levied on diesel oil because without the tax cut, diesel oil churned out by the facility cannot compete with that imported from ASEAN countries.

In a document submitted to the Ministry of Finance earlier this week, Dinh Van Ngoc, general director of the company, proposed a reduction of diesel import duties to below 10 percent.

Currently, diesel oil produced by the US$3 billion refienry is subject to a 20 percent import tax, a 10-percent drop from the previous rate, though it is domestically made following a special financial mechanism applied to the refinery, which was commissioned in 2010.

Meanwhile, the import duties imposed on the similar petroleum product imported from ASEAN countries has dropped to 15 percent since this year following the integration roadmap in ASEAN Economic Community of Vietnam.

ASEAN members include Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Myanmar, Cambodia, Laos, and Vietnam

Thus, the price of diesel made by Dung Quat will be around US$10 per barrel more expensive than its regionally produced rivals, Ngoc said in the document.

With the current tax regime, diesel oil refined by Dung Quat cannot compete with that imported from other ASEAN countries, he added.

Diesel oil is the main product of the Dung Quat oil refinery, as it accounts for about 50 percent of the total output of the plant. As a result, if it is not sold well, the revenue of the plant will be affected, thus badly influencing state revenue.

Earlier this month, BRS also sent a document with the same import tax cut proposal for many kinds of petroleum products, stressing that the plant will shut down if there is no change in tax policies for those products.

BSR said in the document that many of its customers may switch to buying from other ASEAN countries, whose products are now cheaper thanks to the tax cut taking effect since the beginning of this year.

BSR’s parent company, state-run oil and gas giant PetroVietnam, has also lodged a similar complaint to the finance ministry, saying the ASEAN preferential tax treatment has caused Dung Quat fuel to be more expensive than imported products, thus reducing its competitiveness right on home soil.

On April 13, the Ministry of Finance issued a circular reducing the import taxes levied on gasoline and kerosene (from 35 percent to 20 percent), diesel oil (from 30 percent to 20 percent), fuel oil (from 35 percent to 25 percent) and jet fuel (from 25 percent to 10 percent).

Dung Quat currently produces 140,000 barrels of oil a day, or 6.5 million tons a year. Once it produces 10 million tons of oil per year, Dung Quat will account for 50 percent of Vietnam’s fuel supply. BSR reported VND150.41 trillion ($7.08 billion) in revenue in 2013.

Can Tho looks to revive IZs allure

A comprehensive suite of measures are urgently needed to help ramp up the appeal of Can Tho’s export processing and industrial zones in the eyes of investors.

Compared to other cities and provinces across the country, the Mekong Delta’s Can Tho city established its export processing and industrial zones (IZs) very early. Less than a year after the Council of Ministers (now the government) enacted Decree 322/HDBT dated October 18, 1991 governing  export processing zones’(EPZ) operations, Can Tho received approval to establish  the Tra Noc EPZ, one of the first four EPZs in the country.

Can Tho is now home to eight IZs with construction planned along the Hau River and the National Highway 91. These IPs - Tra Noc 1, Tra Noc 2, Hung Phu 1, Hung Phu 2A, Hung Phu 2B, Thot Not, O Mon and Bac O Mon, now occupy 2,371 hectares in the total area.

The IZs are well-situated in the Mekong Delta region with easy access to seaports and the Mekong Delta region’s international airport and they sit in the centre of huge agricultural and seafood material sources. Thanks to these favourable conditions, from late 1999, Tra Noc 1 IZ reported an occupancy rate reaching 90 per cent, one of the highest rates among the country’s IZs. Its success at that time was regarded as ‘the bright spot in the Mekong Delta’s investment landscape’.

According to the Can Tho Export Processing and Industrial Zones Management Authority (CEPIZA), Can Tho’s EPZs and IZs are now home to 218 projects leasing 588ha of industrial land with the total committed investment capital of $1.92 billion.

The realised capital came to $866 million, tantamount to 46 per cent of the total committed capital fund. Domestic investment projects now number 188 and are worth $1.69 billion in the total committed capital while 23 foreign invested projects have been registered $203 million.

Can Tho’s IZs have provided jobs to 31,382 workers from the city and surrounding provinces. Of the IZs, only Tra Noc 1 and 2, with the combined area of 300ha, have reported almost full land occupancy rate whereas Hung Phu 1 IP, covering 262ha, has filled just 12.5 per cent of its land for industrial production and Hung Phu 2A, with 134ha area, has only leased out 13 per cent of the land to investors.

Thot Not IZ, covering 600ha, has reported a better leased rate of 54 per cent in its first-phase development which occupies 150ha.

The 67ha Hung Phu 2B is in the stage of revising its planning scheme and working on compensation so it can progress with infrastructure construction.

The 600ha O Mon IZ is working on planning at 1/2,000 scale while Bac O Mon IZ, covering 400ha, is to revise its planning scheme as it needs to relocate to a new location in light of Can Tho city’s revised planning.

Investment flows into Can Tho city’s IZs, however, has slowed in recent years.

Last year, the local IZs attracted less than $50 million whereas in the first quarter this year, only four new projects were registered and three projects revised their investment certificates with the total committed investment capital of slightly more than $5.3 million.

Apart from some objective factors such as ongoing difficulties facing the world and the local economy, some following factors have badly influenced the local IZs’ competitiveness.

Specifically, as Can Tho  has grown into a centrally-governed first-class city, corporate tenants inside the city’s IZs now enjoy fewer investment incentives than those located in other neighbouring provinces. Businesses specifically no longer benefit from the incentives based on investment location and IZ infrastructure investors no longer enjoy the preferable corporate income tax policy.

The administrative procedures, such as the one-stop shop mechanism, for IZ businesses seems to be increasingly complicated whereas the transport infrastructure is characterised by uneven development between localities in the city and the surrounding areas.

In addition, though there are big ports in Can Tho city at Cai Cui and Can Tho, they are unable to receive large tonnage ships due to the shallow channels, therefore goods in the region must be transported to ports in Ho Chi Minh City and other eastern locations, driving up transportation costs.

It is also a waste that Can Tho international airport, launched in January 2011 with the designed capacity of serving three to five million passengers per year, only serves domestic flights.

In order for Can Tho to encourage greater investment inflows, improvements are needed to the region’s infrastructure, particularly transport infrastructure, while simultaneously introducing specific mechanisms and policies to fully tap the city’s advantages as the Mekong Delta’s economic hub.

In respect to administrative procedures, efforts must be made to boost efficiency of the one-stop shop mechanism at the CEPIZA to facilitate operations of local investors and businesses.

The authority needs to act as a supporting arm to the city’s management authorities in overseeing the operations of city-based IZs and take the initiative in co-operating with relevant state agencies in tackling issues facing IZ businesses, to ensure they feel comfortable investing in the region.

According to the CEPIZA, businesses based in Can Tho IZs reported $128.6 million in the total revenue in March 2015, increasing their total revenue in this year’s first quarter to $401.6 million, similar to the same period last year.

Of this, industrial production values have reached $312.7 million, trade and services revenue came to $88.8 million and export value amounted to $156.8 million.

Foreign invested businesses in Can Tho IZs saw a 4 per cent on-year decline in their first quarter revenue which fell to $80 million. Their export value during the period also sank 5 per cent on-year to $36.5 million.

New decree to resolve barriers to FIE operations

A decree that the Ministry of Planning and Investment is drafting to guide the implementation of the 2014 Law on Investment includes a separate chapter on how the rules will be applied specifically to foreign investors.

The ministry’s drafting committee hopes to abolish conditions that do not fit the current context, and remove policies issued by government agencies that are not within their authority to issue, as well as amend and add conditions in order to ensure the freedom for foreign investors to do business in sectors they are entitled to operate in.

Besides conditions that are common for both domestic and foreign-invested enterprises (FIEs), FIEs have to satisfy a range of other conditions. According to Deputy Minister of Planning and investment Nguyen Van Trung, that’s because before setting up an economic entity the foreign investor also has to have an investment project and secure an investment certificate and in order to do so they have to meet a list of other requirements such as providing capital and being able to meet the requirements of specific investment projects.

“These requirements are very necessary, not only to formalise the application of conditions to do business for foreign investors but to also contribute to raising the transparency of the legal system concerning investment and business,” Trung said.

Of the 267 sectors and fields subject to conditions stipulated in the new Law on Investment, there are 72 for which Vietnamese laws already stipulated conditions to do business and invest, 46 for which Vietnam’s international agreements have stipulated conditions to invest applying to FIEs, 128 for which no law has stipulated conditions for investment for FIEs and 21 for which no law has stipulated conditions to invest and to do business for FIEs.

In addition, there are 35 sectors which international agreements stipulate limited participation by FIEs but Vietnamese laws still do not.

As a result, there has been much confusion over the current list of conditions. For example, one of the many conditions for the insurance and reinsurance sector requires foreign non-life insurers wishing to set up a branch in Vietnam to have the total asset of at least $2 billion and have operated in the non-life insurance business for at least 10 years. But these conditions do not meet Vietnam’s commitments in free trade agreements and the Trans-Pacific Partnership. Will these conditions be changed?

Plastic surgery is one of the 21 sectors and fields that have yet to have any conditions to invest and do business. According to Vietnam’s WTO commitments, foreign plastic surgery service providers are allowed to provide this service by establishing a 100 per cent foreign-owned hospital, a joint-venture hospital with a Vietnamese partner or by entering a co-operation contract with a Vietnamese partner. The minimum investment for a hospital is $20 million, while that for a clinic is $2 million. But as of now Vietnam has yet to have any conditions on business in this field. What will regulate plastic surgery and the remaining 20 sectors and fields?

Casinos are on the list of 128 sectors and fields for which no law has stipulated conditions for investment for FIEs. As of now, the decree on casinos is still being drafted.

Investment strategy in May: Sell and go away?

"Sell in May and go away" is a well-known trading adage that warns investors to sell their stock holdings in May to avoid a seasonal decline in the equity market, while returning to trade in autumn. Although this is not always true in the Vietnamese market, it still causes investors to be cautious each May.

According to market statistics, May is not a lucky month for Viet Nam's stock market, as the benchmark VN-Index plummeted over nine years and increased just four out of its 15 years of trading. VNS Photo Nguyen Manh Ha

According to market statistics, May is not a lucky month for Viet Nam's stock market, as the benchmark VN-Index plummeted over nine years and increased just four out of its 15 years of trading.

Stock analysts believe such declines could be the result of a lack of information each May. Most important macroeconomic news is released during the first quarter, while corporate earnings of listed companies are often reported in April.

Apart from this, foreign trading is also a significant factor that has affected the market in May. Traders often buy robustly in the early stage and in the end of the year, while unloading stocks at mid-year. This caused negative impacts in the psychology of domestic investors in previous years.

However, trading by this sector is going against the common trend this year, as foreigners have been collecting shares since the beginning of April. One of the main reasons could be the possible delay in interest rate hikes by the US Federal Reserve (Fed), expected in the third quarter, in order to support the growing momentum of the US economy.

"Market developments in the last week before the holiday season clearly reflected this concern. It's rare to see investors who were so lethargic, despite strong buys by foreign investors," said Nguyen Trung Du, director of the business development section at VNDirect Securities Co.

In the past five years, stocks only rose in May of 2013, while declining during the other four years. With the absence of current support information, Trung predicted the market would continue to experience another downtrend in May this year.

However, many analysts have more optimistic views about the market in May, based on positive developments in the economy, as well as encouraging reports of business revenues released so far.

The economic expansion reached 6.03 per cent in the first quarter of this year, which is a good result compared with often slow growth in the same period during previous years. Thanks to this, the planned growth of 6-6.2 per cent for 2015, as set by the Government, will likely be achieved by year-end.

In addition, the nation's inflation remained at a relatively low level, with the average consumer price index (CPI) during the first four months of the year rising only 0.8 per cent against the same period last year. This will likely help reduce lending rates in the near future.

"In my opinion, trading in May will not be so bad and the market can increase or accumulate value," said Phan Dung Khanh, head of Investment Strategy Division at KimEng Securities Co.

In the past, the decline in May fell in those years that the market saw strong growth during the first four months, creating room for profit-taking and downward adjustments in the coming month. However, in 2015 the market advanced strongly in January and February, but plunged steeply in March and was flat in April.

"The current stock values are rather low and the profit-taking pressure will not be too strong, compared with that of recent years. I think the market will continue to accumulate and rise in May," Khanh said.

He added that strong net buys by foreign investors, good economic growth and drastic restructuring in the financial system, as well as investors' expectations to buy superior stocks at cheap prices in May, were optimistic factors that would support the market.

According to Ngo The Hien, deputy head of the analysis department at SHB Securities Co, the price-earnings (P/E) ratio of Vietnamese stocks is the lowest among markets in the region (about 12x compared with the average of 17-18x in the region), which could attract additional foreign inflows.

"Along with low deposit interest rates, healthy economic growth and strong indirect investment inflows (FII), I believe we're having a big opportunity this year," Hien said.

FLC Group invests US$162 million in Binh Dinh complex

The southern Binh Dinh Province has awarded an investment licence to the FLC Group to build the Nhon Ly resort, villas and high-end entertainment complex in the province's Quy Nhon City.

A view of the sea in Quy Nhon City. The FLC's US$162 million project would have golf courses, six-star villas, hotels, five-star restaurants, an international convention centre and high-class entertainment area.  Photo vnexpress

Covering an area of around 300ha, the VND3.5 trillion (US$162 million) project would have golf courses, six-star villas, hotels, five-star restaurants, an international convention centre and high-class entertainment area.

The complex is scheduled to become operational during the first quarter of 2016.

Speaking at the hand-over ceremony on April 25, Doan Van Phuong, FLC's general director said the group highly valued the tourism potential of the locality and had decided to choose it as an investment location.

"The project will not only contribute to changing the province's tourism situation, but also the local State budget, thus promoting socio-economic development. In will also create a foundation for attracting foreign investment to the province," Phuong added.

Ho Quoc Dung, chairman of the provincial People's Committee, said they would help the group invest in the province.

Dung said the province had adequate conditions for tourism development with its natural landscape and intangible cultural forms.

He urged the local residents to support and create favourable conditions for the investors.

Sharing the same ideas, Le Kim Toan, deputy general secretary of the People's Committee, said FLC had committed to the investment with experiences from several projects nationwide.

In April, FLC Group, the provincial People's Committee and the Bank for Investment and Development of Viet Nam (BIDV) also signed a co-operation agreement.

Accordingly, the project would be given the maximum tax preferential as it is located in the Nhon Hoi Economic Zone and also a poor area.

BIDV also committed to finance the project up to 70 per cent of the total investment.

In recent years, FLC Group's turnover, profits and assets have seen rapid growth. In the 2014 financial year, its aggregate profit reached VND3 trillion ($139 million) and annual profit of VND454 billion ($21 million). The group's charter capital was VND4 trillion ($185 million).

FLC has invested in property projects nationwide, such as FLC Samson Beach and Golf Resort and the FLC Complex in Thanh Hoa.

Life insurance profitable but tough to penetrate

Vietnam has been estimated to be an emerging market with a lot of potentials for life insurance companies. However they have been able to exploit a small part of this market because most residents have not paid attention to life insurance.

According to data from the Insurance Supervisory Department, total premium turnover reached VND52,680 billion (US$2.44 billion) last year, up 14.2 percent over the previous year. Of these, life insurance premium grew nearly 18 percent.

The life insurance market continued positive growth trend with a year on year increase of 25 percent touching VND3,075 billion (US$142.23 million) in the first two months this year. Of these, the number of new contracts reached nearly 180,000, up 44.39 percent over the same period last year.

Businesses said that they have got more and more customers. However the number is still modest compared to Vietnam’s population now.

Head of the Insurance Supervisory Department Phung Ngoc Khanh forecast stable development in the insurance market this year. The total premium turnover would grow 12 percent over last year.

Statistics by the Vietnam Insurance Association showed that life insurance companies are competing in the segment of 30 percent population in urban areas. However it has not been easy to convince this group to buy insurance.

Companies have noticed fruit or seafood farm owners but faced challenge in taking take up this segment.

A report by Ernst & Young Company on the insurance market in emerging countries, Vietnam is one of quickly growing markets with many prospects. The country is among top two attracting markets to foreign underwriters.

Still, even experienced giants have also been embarrassed to penetrate this market.

Director General of AIA Stephen Clark said that the number of life insurance buyers was very low in Vietnam. Besides issues in payment ability, another reason is that residents have been unaware of the importance and necessity of insurance.

This challenge has made the race to gain the insurance market share fierce, he added.

The life insurance market has been developed in Vietnam for 20 years. However it has been estimated to be young. Businesses have continuously launched new products but the number of buyers is still modest.

That is a chance but also a challenge for businesses that have to make residents understand real benefits from insurance purchase.

Insurance companies have broadened their agencies and consultant group to ram up the market share.

Many agencies and consultants have not clearly explained contract terms to buyers aiming to attract customers as many as possible for more percentage. This has caused losses for the buyers when accidents occur and created a barrier in many people’ thought of insurance.

The Insurance Supervisory Department said that they would intensify inspecting and handling violations at insurance companies this year and encouraged them to purify their staff to recover customers’ belief.

23 provinces have no new FDI projects in first quarter

There were no new Foreign Direct Investment (FDI) projects being licensed in the first four months this year in 23 provinces and cities, reported the Foreign Investment Agency under the Ministry of Planning and Investment.

Provinces failing to attract more FDI concentrate in the northern mountainous region such as Lang Son, Tuyen Quang, Dien Bien, Lao Cai, Cao Bang and Bac Kan.

Of the rest 40 provinces and cities, 15 attracted only one FDI project and many just lured 2-3 projects.

The southern province of Dong Nai received most FDI capital with US$916.75 million, accounting for 24.6 percent of the country’s total.

It was followed by Ho Chi Minh City with US$784.93 million accounting for 21.1 percent.

Four-month budget revenue meets 34.5% of year's estimate

The State budget revenue in the first four months of 2015 was posted at VND314.1 trillion (US$14.4 billion), equivalent to 34.5% of estimated figures for the whole year and up 9.4% against the same period in 2014, according to the Ministry of Finance.

Of the total figure, four-month domestic collection recorded at VND238.7 trillion (US$10.98 billion), equal to 37.4% of the year's estimate and up 17% over the same period last year.

According to the Finance Ministry, the high figures from domestic revenue were mainly driven by the positive development of the domestic economy, the stability of domestic production and business activities, higher corporate tax collection and the recovery of the real estate market.

Revenue from crude oil was estimated at VND23 trillion (US$1.1 billion), a year-on-year decrease of 32.6% while revenue from import-export activities was reported at VND51.5 trillion (US$2.4 billion), a year-on-year increase of 7.3%.

In the meantime, the budget spending in four months was VND362.7 trillion (US$16.7 billion), resulting in the budget overspending of over VND48 trillion (US$2.2 billion), equivalent to 21.5% of the year's estimate.

Statistics from the Finance Ministry also showed that 55 of 63 provinces and cities nationwide recorded higher budget revenues than that of the same period in 2014 while 49 provinces reported revenues equivalent to or higher than 33% of the year's estimate.

Coffee processing industry developed

The Ministry of Agriculture and Rural Development (MARD) is carrying out its master plan to develop the coffee processing system by 2020 in a bid to increase the added value of domestic coffee products, said a senior official.

Vo Thanh Do, Deputy Head of the ministry’s Agro- Forestry, Seafood Processing and Salt Industry Department, said that although Vietnam is the leading country in robusta coffee production and exports, the processing industry still has numerous restrictions limiting the added value in the coffee sector.

According to the master plan, the coffee sector targets an export capacity of 1 million tonnes of coffee beans annually through upgrading and modernising current production lines to improve product quality.

The ministry is also focused on improving the quality and food security of the existing roasted and ground coffee products consumed domestically while increasing the total yearly productivity to 50,000 tonnes (90 percent of the designed capacity) in 2020 from the current 26,000 tonnes (50 percent of the designed capacity).

Another priority is elevating instant coffee to become a high value-added product for exports and domestic consumption with total output of 55,000 tonnes in 2020 and 120,000 tonnes in 2030. Mixed coffee products like three-in-ones and two-in-ones are expected to reach over 200,000 tonnes by 2020 and 230,000 tonnes by 2030.

Over the next 15 years, processed coffee commodities for export and domestic consumption are targeted to generate 1 billion USD, accounting for 25 percent of the production value.

The ministry is especially encouraging instant coffee processing in the Central Highlands, Southeast and Mekong Delta regions as well as developing mixed instant coffee in the southern central coastal and northern mountainous areas along with the three above-mentioned regions.

Do said domestic market development is of special importance, particularly in northern localities, to increase the consumption rate to 25 percent by 2030 from the current rate below 10 percent.

Furthermore, trade promotion activities have been fostered to enhance coffee penetration in international markets with the focus on Northeast Asia, Eastern Europe and ASEAN nations.

The coffee sector aims to increase the rate of coffee beans process at industrial scale to 40 percent this year, 70 percent by 2020 and 80 percent by 2030.

The ministry has set its sights on yearly revenues of 3.8 million to 4.2 billion USD from coffee exports by 2020 and 4.5 billion USD by 2030.

Vietnam agriculture benefits from Australian trade deals

Vietnam domestic agribusinesses have new opportunities to boost exports and break into key Australian markets with the implementation of landmark trade agreements in 2015.

The Australian Department of Agriculture has agreed in principle to allow Vietnam fresh litchi to enter the market effective this June and will announce the specifics of the agreement later this month.

This agreement comes into force on the heels of other trade agreements under which the Australian government has authorized a variety of agriculture products to flow into the market.

This is a huge opportunity for the Vietnam agribusinesses as Australia is Vietnam’s eighth largest export market valued at US$3.99 billion for 2014, according to the Vietnam Trade Office in Australia

In the three months leading up to April of this year alone, Vietnam’s exports to the Australian market hit an all-time record high of US$742.8 million, the trade office reported.

These trade agreements will deliver new jobs and expansion opportunities across the Vietnam economy with major openings for not only agriculture but aquaculture and the seafood industries as well.

However, Australia is a demanding market the trade office reported and the government imposes strict requirements on quality, origin along with food hygiene and safety.

If domestic businesses face up to the challenges and innovate, adapt and grasp the new opportunities presented in the Australian market they have a bright future to prosper and make further inroads.

If businesses pay more effort to advertise products on the market, exports to the market will further increase in the future, according to the Vietnam Trade Office in Australia.

 Agro-fishery sector seeks to overcome challenges

The Ministry of Industry and Trade held a conference in Hanoi on May 4 to discuss a number of possible solutions for difficulties faced by the agro-fishery sector.

According to a report from the Ministry, the sector’s export revenue totalled US$8.5 billion within the first four months, a 5.1% reduction from 2014.

During the conference, agro-fishery associations complained about the inadequate market information feedback from overseas representative offices which negatively affected the operation of domestic enterprises.

Vice General Secretary of the Vietnam Association of Seafood Exporters and Producers Nguyen Hoai Nam proposed that trade promotion, whose public budget has shrunk, receive a boost through improved methods.

The sector needs to become a national priority during negotiation rounds for trade pacts between Vietnam and other countries across the world, he said.

Agreeing with Nam, General Secretary of the Vietnam Coffee and Cocoa Association Nguyen Viet Vinh suggested increasing international visits and market research surveys of business delegations supported by the Ministry of Industry and Trade.

Taking the participants’ comments into account, Deputy Minister Tran Tuan Anh confirmed his agency will focus on seeking new markets and consolidating the consultation role of domestic businesses in several trade negotiations.

The Ministry will assess the competitiveness of local firms and consider adjusting production costs, he noted, saying the agency will work with the Ministry of Finance to devise related incentives.

Suitable incentives needed for automotive support industry

Suitable incentives are essential to enhance the competitiveness of enterprises in the support industry to develop the domestic automotive sector, according to Chairman of the Vietnam Federation of Civil Engineering Association Do Huu Hao.

Hao, who is also former Deputy Minister of Industry and Trade, highlighted the potential to expand the domestic automotive market with its 90 million people.

He stressed the need for the domestic automobile industry to enhance its competitiveness as integration encourages importing assembled vehicles in the regional countries with zero percent tariffs.

The most efficient way for local businesses to join the global production chain is to connect with renowned international brands in the support industry, Hao said.

President of the Xuan Kien Automobile Joint Stock Company (Vinaxuki) Bui Ngoc Huyen called for more specific tax and financial incentives. He confidently stated that with right tax incentives and credit from the State, Vinaxuki can raise the domestic manufacturing rate to 50 percent and build “Made-in-Vietnam” passenger cars and trucks for export.

The company has invested more than VND600 billion (US$28 million) in a number of projects to produce automobile spare parts, Huyen said.

They are expected to enhance the competitiveness of Vinaxuki products in a number of product lines by 2018, including pick-up trucks, cars, taxis and up to 28-seat public vehicles, he added.

Huyen also expressed his hope that incentives would be provided to domestic manufacturers targeting low-income consumers.

In August last year, the Ministry of Industry and Trade introduced a new strategy and plan for the automotive industry, but many of the relevant policies and mechanism are still pending.

At the same time, foreign-invested enterprises in the automobile industry are concerned about their future operation once import tariffs in Southeast Asia reduce to zero percent in 2018.

Toyota has said it may stop manufacturing and assembling in Vietnam and instead import finished products from regional countries.

Many FDI businesses may withdraw from the industry if Vietnam cannot issue suitable and specific assistance.

According to Vietnam Customs, more than 71,000 vehicles were imported in 2014, up 102% year on year and the highest ever.

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