Gemadept to form two subsidiaries for water transport

Gemadept Corporation has announced the establishment of two subsidiary companies that will specialise in sea, inland water and land transport, for a total chartered capital of VNĐ204.1 billion (US$9 million).

The announcement was made after the resolution was approved at Gemadept’s annual shareholders’ meeting.

The corporation will now set up Gemadept Shipping Holding Company Limited and GMD Shipping One Member Company Limited, whose focus will be coastal and ocean freight, inland waterway transport and other related activities that support the transport sector. 

While Gemadept Shipping Holding has a chartered capital of VNĐ140.8 billion, GMD Shipping has a chartered capital of VNĐ63.3 billion. Both companies are located in District 1, HCM City.

Recently, Gemadept successfully issued 108.8 million shares for debt swaps worth roughly $51 million to Việt Nam Investment Fund II, L.P.

After the issuance, Gemadept raised its chartered capital to VNĐ2.882 trillion.

Workshop on credit investment in hi-tech farming held

The Vietnam Farmers' Association (VFA), the State Bank of Vietnam (SBV) and the Ministry of Agriculture and Rural Development (MARD) jointly held a workshop in Hanoi on July 4, discussing solutions to improve the credit investment efficiency in hi-tech farming.

The event featured the participation of managers, economists and representatives of enterprises, which have invested in hi-tech agriculture.

Hi-tech farming is considered one of the driving factors for sustainable agricultural development in line with the government's policy. Since the beginning of 2017, Prime Minister Nguyen Xuan Phuc has signed a resolution providing a credit package worth VND100 trillion (US$4.4 billion) to invest in the development of high-tech agriculture at lower than market rates. The resolution aims to encourage, support and promote the development of hi-tech farming applications.

Following the Prime Minister’s instruction on supporting high-tech agriculture development late last year, SBV has instructed banks to apply preferential loans to high-tech and clean agricultural projects.

Interest rates of the loans will be 0.5-1.5% per year lower than other average lending rates. Meanwhile, lending interest rate for short-term loans averages at 6-9% per year and 9-11% for medium- and long-term loans.

Speaking at the seminar, Chairman of VFA Lai Xuan Mon affirmed that the government resolution has brought about opportunities for businesses as well as farmers working in hi-tech agriculture to develop modern and sustainable agriculture in Vietnam.

According to the SBV, total outstanding loans for hi-tech agriculture have reached nearly VND 32.34 trillion. The loans have been granted to 4,125 customers, 3,957 individuals and 168 enterprises.

Nearly VND 27.74 trillion (about 86 percent) of these loans were granted to high-tech agricultural projects and the remaining VND 4.602 trillion to clean agriculture projects. There was no bad debt, the central bank said. A number of large-scale high-tech projects have commenced operations, involving the breeding of cows, horticulture and fruit and vegetable exports.

However, the reality is that encouraging high-tech and clean agriculture is fraught with a number of risks, especially without stable consumption markets, the experts said. They added that there were not enough policies to distinguish and protect high-tech and clean agriculture projects from normal ones. There was also a lack of guidance on the granting of ownership certificates to assets on agricultural land, including greenhouses and other facilities, the seminar heard.

In addition, hi-tech agriculture was often associated with high production costs and there was not enough consumer confidence in clean farming products.

According to economists, the market would eventually promote high-tech agricultural production, but the initial development phases would carry risks and instability.

Cargo at Noi Bai airport to be managed electronically in October

Cargo at the Noi Bai International Airport will be electronically managed and supervised from October this year, announced at a workshop on the implementation of the project on management and supervision of cargo at airports held by the General Department of Customs on July 4.

According to Deputy General Director of Customs Nguyen Cong Binh, the implementation of the project is one of several new solutions to be implemented by the customs sector in order to apply modern methods in line with international practice in customs activities facilitating trade and import-export activities.

The project is also expected to simplify and harmonise customs procedures with the procedures of warehousing, seaports and airports.

The application of information technology in exchanging and updating information with port and warehouse businesses will help to closely monitor the movement, location and status of cargo from arrival to departure subject to customs supervision.

Binh noted that the project will also help to shorten the time and cost for customs declarers while enhancing the management capacity of the customs sector and improving the compliance of enterprises, contributing to preventing trade fraud and smuggling.

Nguyen Manh Tung, Director of the Customs Information Technology and Statistics Department, said that implementation of the project would be in line with the implementation of the one-stop-shop airline service.

All commercial documents via airline will be transferred by shipping companies to customs and other related agencies via the one-stop-shop mechanism.

After Hanoi, the project is scheduled to be implemented at other airports next year.

1H textile & garment exports up 10.6%

Textiles and garments continued to see positive export growth in the first half of this year, increasing 10.6 per cent year-on-year to $14.2 billion, according to figures from the Ministry of Industry and Trade (MoIT).

The first-half figure, however, is a touch below what’s needed for the annual target of $30 billion to be reached.

Significant contributors to growth included fiber, with export turnover of $1.69 billion, up 27.4 per cent year-on-year, and garments, up 9.1 per cent to $11.84 billion.

The figures are remarkable given the unstable global economic conditions and Vietnam’s main textile importers, the US, the EU and Japan, seeing a slowdown in such imports in the first half, Mr. Le Tien Truong, CEO of the Vietnam National Textile and Garment Group (Vinatex), was quoted as saying.

Total textile and garment imports by the US fell 1 per cent, by the EU 2 per cent, and by Japan 0.6 per cent.

Vietnam’s export to those markets, however, grew handsomely in the first half. Exports to the US totaled $6 billion, up nearly 9 per cent, to the EU $2.3 billion, up 8 per cent, and to Japan $1.5 billion, up 12 per cent.

Despite the positive growth in the first half, the burden of reaching the annual target will increase over the course of the second half, according to insiders.

Vietnam earned $6.84 billion from garment and textile exports in the first quarter of this year, an 11.2 per cent increase year-on-year, according to the Vietnam Textile and Apparel Association (Vitas).

Vietnamese garment and textile products are now available in 40 countries and territories around the world, with major markets being the US, Japan, South Korea, China, and the EU. Vitas has urged enterprises to optimize capacity to reduce production costs and seek orders for high-quality products.

Many enterprises invested in building textile and dying factories on an extensive and intensive scale to boost their access to the opportunities that were to be presented by the Trans Pacific Partnership (TPP), according to the association.

But now that the future of the TPP is uncertain, with the US withdrawing, experts say these facilities can help the industry complete production processes and actively source material, focusing on opportunities offered by other FTAs such as those with the EU and with South Korea.

Vietnam, key trade partner of China’s Guangzhou in ASEAN

Vietnam is a leading trade partner of China’s Guangzhou city, Guangdong province, in ASEAN, said Luo Zheng, director of the Comprehensive Division of the Commission of Commerce of the municipal government, on July 4.

In a press conference on the development of Guangzhou, Zheng said two-way trade between Vietnam and Guangzhou rose by 10.2 percent to 2.8 billion USD in 2016. 

Guangzhou shipped to Vietnam 1.83 billion USD worth of commodities last year, a year-on-year increase of 12.3 percent, doubling Vietnam’s exports to the city which was estimated at 970 million USD, up 6.5 percent.

It made Vietnam the second largest trade partner of Guangzhou in ASEAN, after Malaysia who reported 3.48 billion USD in trade with the Chinese city. 

The future is even brighter for the two sides when the bilateral trade hit 1.83 billion USD in the first five months of 2017, up 82.2 percent year-on-year, surpassing Malaysia. Guangzhou continued to enjoy a trade surplus of 970 million USD, with exports to Vietnam worth 1.4 billion USD, during the period.

According to Zheng, Guangzhou established four new enterprises in Vietnam last year; and by May 2017, the city has had 21 new businesses, bringing its total investment in the country up to approximately 50 million USD.

Meanwhile, as of May, Vietnam has established nine companies in Guangzhou, raising the total investment in the city to 6.48 million USD.

Guangzhou and Guangdong have closely coordinated with Vietnam’s localities, businesses and business associations to build foundation for the bilateral trade and cooperation between the two sides, Zheng affirmed.

MSB transfers 81.3m shares to Ha Nam Development JSC     

The Vietnam Maritime Commercial Joint Stock Bank (MSB) transferred more than 81.3 million shares of the Military Commercial Joint Stock Bank (MBB) to Ha Nam Development JSC.

The number of shares is equivalent to 4.75 per cent of MBB’s capital. The bank’s chartered capital in the first quater of this year is estimated at VND17.127 trillion (US$751.2 million), according to data from news site CafeF.

With the completion of the transfer, the MSB will hold only about 0.1 per cent of MBB’s capital.

By the end of last year, MBB had six major shareholders, namely, Viettel Group with ownership of 14.75 per cent, the State Capital Investment Corporation (9.38 per cent), Vietnam Helicopter Corporation (7.84 per cent), Saigon Newport Corporation (7.52 per cent), Joint Stock Commercial Bank for Foreign Trade of Viet Nam (7.04 per cent) and foreign shareholders (41 per cent). 

Firms urged to focus on brand     

Local firms need to pay due attention to their brand, including brand building, brand valuation and brand governance, said an official.

Dang Quyet Tien, deputy head of the Ministry of Finance (MoF)’s Enterprise Finance Department made the statement at a conference held in Ha Noi yesterday.

“Internationally, brand is considered the core value of the business, with some brands’ value accounting for 70 per cent of the total value of business assets. But in Viet Nam, brand matters have not received the due consideration they deserve from local companies,” Tien said.

In fact, some foreign organisations had recognised the value of several Vietnamese companies’ intangible assets, Tien said, adding that Viet Nam had quite a lot of brands appearing in various prestigious rankings in the world.

As announced by Brand Finance, an UK-based brand consultation and valuation company, Vietinbank was recognised as one of the Top 100 Largest Banks in ASEAN and the only Vietnamese bank included in the 2016 list of top 400 most valuable banking brands in the world, with the brand value amounting to US$249 million, Tien said.

Also according to Brand Finance, the Viettel brand last year was valued at US$2.6 billion. The Vinaphone brand was valued at $1.04 billion and Mobifone at $391 million.

“Some enterprises even had spent a large amount of money to build their own brands, but were confused when determining the value of the brands, which are intangible but precious assets for businesses,” Tien said.

Vietnamese enterprises’ brands were facing many challenges such as the infringement of intellectual property (IP), Le Ngoc Lam, Deputy Director of the National Office of Intellectual Property of Viet Nam of the Ministry of Science and Technology said at the conference.

The Viet Nam National Tobacco Corporation (Vinataba), coffee producer Trung Nguyen Group, Phu Quoc fish sauce and Ben Tre coconut candy were particular examples of Vietnamese firms being victims of IP infringement when they were circulating their products in the global market, Lam said.

Also having hired professional consultants in value branding, Tien said, some State-owned enterprises when conducting equitisation processes had been provided with different values for their brands, causing big losses to the State budget.

Tien added that there were also still some limitations and overlaps in the content of legal documents stipulating the brand valuation methods.

Samir Dixit, Managing Director of Brand Finance Asia Pacific said brand equity was an intangible asset because the value of the brand was not a physical asset and was instead determined by consumer perception.

When building and developing a brand, firms needed to focus strongly on Brand Strength indices (BSI) and Governance Strength indices (GSI), which were the two essential indicators measuring the efficiency of brand valuation, Dixit said.

The workshop was co-organised by the Ministry of Finance, Ministry of Science and Technology and the Ministry of Industry and Trade. 

National IIP up 6.2 per cent in H1     

The national index for industrial production (IIP) increased 6.2 per cent year-on-year in the first half of this year, the General Statistics Office (GSO) reported.

The metric was lower than the growth of 7.2 per cent recorded in the first half of 2016, GSO’s economic experts said.

The low growth rate was due to the reduction of 8.2 per cent in production in the mining industry, which was the lowest since 2011. This created big impact on the growth of national gross domestic product (GDP), GSO director Nguyen Bich Lam said.

However, industrial production recorded positive changes in the first half this year, because the growth in the industrial production at 6.2 per cent in this period was higher than the 5.8 per cent growth in the first five months, he said.

The national IIP in the second quarter this year was estimated to rise 7.8 per cent, higher than the growth at 4.3 per cent in the first quarter.

Other industrial products having drop in production included crude oil (12.5 per cent), gas (8.7 per cent) and liquid petroleum gas – LPG (11.2 per cent).

Meanwhile, many products enjoyed a surge in IIP, such as electric production (7.2 per cent), raw steel (25.6 per cent), rolled steel (26.1 per cent), cement (8.2 per cent), fertilizer (19.4 per cent) and food for seafood products (5.5 per cent).

The processing and manufacturing sector’s IIP rose 10.5 per cent year-on-year.

However, the GSO’s experts said the growth of industrial production in the first half this year was not steady, because the consumption index rose 8.2 per cent year-on-year, lower than the growth of 8.8 per cent year-on-year in the first half of 2016.

Some products had low consumption, including electronic, computer, optical, processed food, furniture, medicine and chemical products.

The inventory index increased 10.2 per cent year-on-year in the first half this year, higher than the 9 per cent year-on-year growth in the first half of 2016.

Products having high inventory rate between 17 per cent and 90 per cent involved drinking products, metal products and electric equipment.

GSO experts said that by the year-end, the processing and manufacturing sector would have more opportunities to develop some projects that would be made operational, while other sectors would also develop further, including pharmaceutical sector and electronic production sector. 

Duong quits Coteccons CEO post     

Nguyen Ba Duong will quit his position as CEO of the Cotec Construction Joint Stock Company (Coteccons) in the 2017-20 term.

However, he will continue to be the company’s chairman.

According to an announcement by the company’s executive board, Nguyen Sy Cong, general director of Unicons, a subsidiary of Coteccons, will replace Duong to lead the company.

The board also approved the establishment of four sub-departments in the fields of strategy, investment, risk management, and salary, bonus and human resource.

“The company has a scale of more than US$1 billion in revenue and more than 2,000 employees and workers. Therefore, Coteccons need to restructure its management following international rules to meet the development demand,” Duong said.

Over the past years, Duong was seen as the chief architect of Coteccons, listed as CTD on the stock market. He became the company’s CEO when it was established in August 2004.

He was recently selected to be a member of giant dairy producer Vinamilk (code VNM) and the head of the company’s salary and bonus sub-department.

Clarifying inquiries from Vinamilk shareholders about the new appointment, company CEO Mai Kieu Lien said the change was in accordance with international administration rules, according to which the company needed an independent member to be in charge of important sub-departments.

AirAsia opens NhaTrang-Kuala Lumpur direct flights

Budget airline AirAsia has announced the opening of direct flights from Nha Trang to Kuala Lumpur, Malaysia to facilitate passengers’ travel demand as from September 14.

The air route will help Vietnamese visitors discover the beauty of Malaysia and Malaysian people visit the most beautiful beaches in south-central coastal province of Vietnam.

On the occasion, AirAsia offers discount tickets of US$35.9 (VND790,000), which are booked on July 4-9 for NhaTrang-Kuala Lumpur flights from September 14 to August 28. Customers can buy tickets at airasia.com.

Spencer Lee, Commercial Director at AirAsia Berhad, said “As the Asean airline partner for the Visit Asean@50 campaign, we hope to promote the region as a single yet diverse destination to as many people as possible.”

AirAsia is the sole airlines having direct flights between Nha Trang and Malaysia.

Passengers can also fly from Nha Trang to other cities in Asia and Australia using its Fly-Thru service via Kuala Lumpur, said Mr Lee.

KVFTA has Korean firms targeting fresh sectors

The Korea-Vietnam Free Trade Agreement has been the key driver in Korea’s soaring exports and investment into Vietnam, especially in the foodstuffs and consumer foods sector.

Hong Sun, vice chairman of the Korea Chamber of Business in Vietnam, said that since taking effect in late 2015, the reduced tariffs of the Korea-Vietnam Free Trade Agreement (KVFTA) have been among major propellants in the skyrocketing rise of Korean investment and exports into Vietnam.

“Thanks to KVFTA, Korea’s investments and exports to Vietnam have and will continue rising because many Korean firms are seeking to invest and expand their business so as to meet conglomerates’ demands in Vietnam, like Samsung, and LG,” Sun said.

The General Statistics Office last week reported that in this year’s first six months, Korea was Vietnam’s second-largest import market (after China), with turnover of $22.5 billion, up 51.2 per cent year-on-year. Vietnam suffered from a trade deficit of $15.9 billion from Korea.

Meanwhile, in last year’s corresponding period, Korea was also Vietnam’s second-largest import market (after China), with turnover of $14.9 billion, up 8 per cent year-on-year. Vietnam suffered from a trade deficit of $9.8 billion from Korea.

According to statistics from the Ministry of Planning and Investment, Korea is Vietnam’s largest foreign investor. As of June 2016, the number of Korean investment projects in Vietnam was  5,364, registered at $48.5 billion. By May 20, 2017, the number had increased to nearly 6,100 projects, clocking in at $54.54 billion.

Over the 15-year period following the implementation of KVFTA, Vietnam will completely remove import duties on 89.9 per cent of all products from Korea.

For example, Vietnam will remove its 30 and 20 per cent tariffs imposed on Korean air conditioners and rice cookers, respectively, over the next 10 years. The average tariffs for foodstuffs and consumer goods will gradually be reduced from the existing 16-17 per cent to 0 per cent over the next five years.

In this year’s first six months, Vietnam has removed tariffs on 16 lines of products shipped from Korea. Items subject to the next round of tariff cuts include two-litre and larger engines for vehicles, auto parts, steel, and petrochemical products.

Over the past few years, Korean investments in Vietnam have been largely focused on the property, industrial, and textile and garment sectors.

But Sun also stressed an increase in Korean investment in Vietnam’s foodstuff and consumer goods sector, thanks to KVFTA.

“Not only Korean firms but also foreign ones in general are seeing Vietnam’s foodstuff and consumer foods sector as a new investment attractor,” Sun said.

“This has strongly spurred the development of the foodstuff and consumer foods sector. Then Korean firms will benefit from this via their growing investment.”

In a specific case, Chang Bok Sang, president and CEO of CJ Group Vietnam under the listed Korean conglomerate CJ Group, told VIR that CJ will continue expanding its operations in Vietnam, a country which is “very important” to the group.

“We are trying to create a new culture by [combining] what we have done best in Korea and what we see best for the Vietnamese people. CJ’s vision in Vietnam is making the food industry a basic business to create a new culture, [one] which would serve best for Vietnamese people’s lives,” Sang said.

“We are finding the best ways to connect with Vietnamese consumers and the market in long-term investment. Mergers and acquisitions are a way to reach it.”

Having been in Vietnam for over 20 years, CJ is acquiring a 65 per cent stake in Vietnam-based Minh Dat Food for VND294.8 billion ($13.4 million). Prior to Minh Dat, CJ acquired a 47.3 per cent stake in Cau Tre, another Ho Chi Minh City-based food producer.

Last month, Lotte Duty Free established a joint venture in Vietnam with a local partner. The first duty-free store has been opened on a pilot basis – a 1,000 square metres at Danang International Airport. The official opening is expected for August.

It is expected that Lotte Duty Free will continue opening more stores in major cities throughout Vietnam.              

In another case, Ourhome, one of the top food catering service firms in Korea, last month expanded its business operations in Vietnam, where it provides meals for workers at LG Innotek’s production facility. Ourhome, owned by LG Group, serves an average of 500 meals per day, and expects to expand the number to 1,000 by the end of 2017.

Other top food catering companies, such as Samsung Welstory, Hyundai Green Food, CJ Freshway, and Shinsegae Food, and retailers like Emart are also expanding into Vietnam.

Lee Hyuk,  Korean Ambassador  to Vietnam, told VIR that there are already many companies in Korea well-equipped with capital, state-of-the art technology, and strong management abilities that are paying special attention to Vietnam in their search for new markets.

“Therefore, with KVFTA in full swing, I am certain that Korean companies’ investments will grow both in quantity and quality in the years ahead,” Hyuk said.

According to him, KVFTA is also having a positive effect on investment. Compared to the Korea-ASEAN FTA or the Korea-Vietnam Bilateral Investment Treaty, KVFTA provides a higher level of investment liberalisation and investor protection.

“This creates a favourable business environment for Korean companies, thereby making Vietnam an even more attractive investment destination,” Hyuk said.

Phu Quoc exports nearly 1 million m3 of saline sand

According to statistics, the Phu Quoc Customs Office has conducted customs clearance of 1.3 million sqm of salty sand exported to Singapore since 2015. 

Over the past time, the local customs office has served 6 local enterprises specializing in importing and exporting goods. Imported items mainly include animals of all kinds for the Phu Quoc Safari; machines and equipment for investment projects of Phu Quoc Solar Co., Ltd while exports are mainly fuel for aircraft and saline sand, Mr. Nguyen Minh Trong, Director of Phu Quoc Customs Office under Kien Giang Customs Department said.

The total import-export turnover reached $ 12.2 million, including $ 695,000 of exports and $ 11.5 million of imports. According to Trong, 100% of the export tax that Phu Quoc Customs collected from the export of saline sand.

VNPT’s Internet services poised to improve

The quality of Internet services of Vietnam Posts and Telecommunications Group (VNPT) will improve a lot when the Asia-Africa-Europe-1 (AAE-1) submarine optic cable network is in service this month.

Internet services have in recent years been choppy as Vietnam’s international Internet traffic has been much affected by a series of breakdowns of international subsea optic cable systems, most recently the Asia-Pacific Gateway (APG).

AAE-1 is the fifth international optic cable system VNPT has joined as co-developer. The new cable line will help the country’s Internet bandwidth.

The 25,000-km cable from Southeast Asia to Europe across Egypt connects Hong Kong, Vietnam, Cambodia, Malaysia, Singapore, Thailand, India, Pakistan, Oman, the United Arab Emirates, Qatar, Yemen, Djibouti, Saudi Arabia, Egypt, Greece, Italy and France.

The line uses 100 Gbps transmission technology with a minimum capacity of 40 Tbps. Global service providers, including British Telecom (UK), China Unicom (China), Chuan Wei (Cambodia), Omantel (Oman), PCCW Global (Hong Kong), VNPT and Viettel (Vietnam), began work on AAE-1 in 2014.

The AAE-1 consortium signed a construction and maintenance agreement in Hong Kong on January 27, 2014. 

Vietnam is now connected to the rest of the world via three optic cable lines: SMW-3 which lands in Danang City on the central coast, AAG which lands in Vung Tau City on the southern coast and APG which lands in Danang.

But the APG submarine optic cable system is under repair and it will not be back to normal prior to July 14, so international Internet traffic might be repeatedly on and off until then. It broke on June 20. Meanwhile, AAG often breaks, hitting Internet connections in the country.

Four Vietnamese Internet service providers – VNPT, Viettel, FPT Telecom and CMC Telecom – are using APG for international Internet services. The four firms account for 80% of Internet subscribers in Vietnam.

Deputy PM wants more agriculture co-operatives formed

More co-operatives and cooperative unions should be established as they play a crucial role in the development of agriculture in Vietnam and the Mekong Delta in particular, said Deputy Prime Minister Vuong Dinh Hue.

At a conference “Implementation of the 2012 law on agriculture co-operatives in the Mekong Delta and Southeastern Vietnam” in Can Tho City last week, Hue urged the two regions to establish 15,000 new co-operatives by 2020.

The number of co-operatives in these regions remains modest, 1,642 in 2016, representing 15.16% of the nation’s total, Hue added. However, these co-operatives are more efficient than those in other parts of the country.

In addition, 19 provinces in the two regions have a total population of 32.9 million people, accounting for 36% of the country’s total. They post annual export turnover of US$10 billion, one-third of the nation’s total agriculture exports.

The regions have 22,000 cooperative unions as well, accounting for 35% of the total in the country.

Hue noted the two regions should not be complacent but they should work harder to achieve higher results.

Prior notices required for milk price hikes

Milk processors, traders and importers must inform authorities of price hikes by 5% or less for dairy products for children aged below six, according to a new Ministry of Industry and Trade circular.

The circular, with effect from August 10, comes out six months the ministry took over the dairy product price management job from the Ministry of Finance.

The circular forces processors, traders and importers to re-register their prices if their price hikes are more than 5%, instead of merely informing authorities.

In normal market conditions, milk producers, traders and importers can decide their suggested retail prices and then inform authorities.

In the price registration form, they are required to explain in detail reasons for price adjustment.

Distributors must publicize their retail prices and if the prices are higher than earlier registered, they will have to inform relevant authorities.

Registered prices will be posted on the website of the ministry.

The Ministry of Health is going to issue a list of dairy products and functional food for under-six-year-old children subject to price registration and notification.

Milk enterprises have found it bothersome to inform authorities of their price adjustments.

They said they had encountered a lot of difficulties during 2-1/2 years of the price ceilings on dairy goods. Danone, the owner of the popular Dumex brand, has pulled out of the Vietnam market.

Tighter environment standards for cement makers

As more cement plants are up and running in Vietnam while the cement oversupply is far from over, the nation should set out rigorous standards for the industry to choose those projects saving energy and protecting the environment.

Deputy Prime Minister Trinh Dinh Dung said at a recent inauguration ceremony of a cement factory in the northern province of Ha Nam that the Ministry of Construction would have to review the master plan for the cement industry in the 2017-2025 period with a vision towards 2035, and the master plan for exploration, exploitation and use of minerals for cement production by 2025.

He urged domestic cement manufacturers to strictly comply with environmental protection requirements, and invest in new technology to improve the quality of their products and protect the environment.

Pham Van Bac, head of the Building Materials Department under the Construction Ministry, told the Daily on July 3 that the ministry has been reviewing the master plans for the industry. More stringent standards for quality and environmental protection will be set out, he added.

Nguyen Quang Cung, chairman of the Vietnam Cement Association, said 60 cement manufacturers in the country have around 80 production lines with a combined capacity of 88 million tons a year, which is forecast to surge to more than 100 million tons by 2020.

According to the association, domestic cement consumption is projected to reach about 82 million tons by 2020.

Vietnam became one of the largest cement and clinker exporters worldwide with 20 million tons shipped abroad in 2014. However, 2015 cement exports dropped 18% versus the previous year to 16.2 million tons and slid a further 2% last year.

Data of the General Statistics Office shows indexes for non-metallic mineral products, mainly cement, in the first half of this year rocketed to 31.1%. Besides, the industry produced about 40.1 million tons, a year-on-year rise of 8.2%.

Last year saw the nation’s cement and clinker exports totaling 14.7 million tons worth US$561 million, down 7.1% and 16% respectively against 2015.

Exports of cement products are forecast to be tougher due to fierce competition at home and abroad.

VFA members seen exporting 5.7 million tons of rice this year

Buoyed by favorable market conditions, the Vietnam Food Association (VFA) has set a rice export target of around 5.7 million tons this year for its member firms, a year-on-year rise of 800,000 tons.

Huynh The Nang, chairman of VFA and general director of Vietnam Southern Food Corporation (Vinafood 2), said Vietnam had secured contracts to export about 880,000 tons of rice under government-to-government contracts since May. Around 770,000 tons is expected to be shipped overseas by next month.

Chances are that Vietnam can win a tender to export 250,000 tons of rice to the Philippines this month, Nang noted.

The Philippines’ National Food Authority is considering whether to purchase 544,000 tons of rice from late this month to early September, as its rice stocks have dropped to a three-year low, and the NFA will have to replenish the falling rice stocks within 30 days in the July-September period.

According to the VFA, rice exports of its members are forecast to total nearly three million tons in the second half of the year. The figure is expected to amount to 5.7 million in all of 2017, up from 4.89 million tons in the previous year.

VFA members registered to ship more than 3.5 million tons abroad in January-May, 0.2% lower than in the year-ago period. The volume of rice in the contracts that had not been fulfilled by early June is about 1.25 million tons while their inventories total 1.15 million tons, so they will need 100,000 tons to fulfill their contracts.

A VFA report shows the average export price in the first five months was US$427.17 a ton, a year-on-year rise of US$6.06.

Samsung Vietnam aims for US$50-billion exports

Samsung Vietnam and its affiliates in the country look to obtain export revenue of US$50 billion this year, said Shim Won Hwan, general director of Samsung Vietnam.

Speaking at a meeting with HCMC chairman Nguyen Thanh Phong last week, Shim said the manufacturing facilities of Samsung Vietnam and its member enterprises are employing 165,000 workers.

With around 7,000 employees, the Samsung Electronics HCMC CE Complex exports over 90% of its output. This year, it expects to generate around US$3.5 billion in export value this year.

Samsung is a large investor with significant contributions to Vietnam’s export sector. Shim, who was recently re-appointed general director of Samsung Vietnam after his 2010-2014 stint, is responsible for bolstering business operations in the country.

According to a report of Samsung Vietnam, the group obtained US$46.3 billion in revenue last year despite the stop of Galaxy Note 7 phone production. Its export value hit US$39.9 billion, accounting for 22.7% of Vietnam’s export turnover and rising 9.9% compared to the previous year.

To develop supporting industries to help Samsung increase local content in its products, he said, the group has sent experts to Vietnam to give advice on production improvement, technology and governance to local enterprises. In the coming time, Samsung will join hands with the Government and Vietnam’s authorities to carry out more plans.

Bumpy road ahead - PM

Prime Minister Nguyen Xuan Phuc has pointed out a rough road ahead for the Government, ministries and localities to achieve the gross domestic product (GDP) target of 6.7% in 2017 despite some encouraging economic indicators in the first half.

Phuc told the Government’s teleconference with provinces and cities on July 3 that as GDP growth in January-June was 5.73%, the growth rate in the second half should be 7.42% so that the full-year target can be realized.

The Government leader said it is tough for the economy to expand 7.42% in the second half as downpours and floods often occur in this period, leaving impacts on various sectors.

Phuc mentioned tough farm produce consumption, lower-than-expected industrial growth, especially in the mining sector, difficult business conditions, slow investment disbursements and delayed equitization and capital divestments of State-owned enterprises.

The problems would put a damper on growth towards the end of the year, making the growth target for the year hard to materialize, according to Phuc. 

To facilitate business, Phuc urged ministries, agencies and localities to further streamline administrative procedures that are still obstructing business. He pinpointed a number of Government officials involved in corruption and interest groups.

Despite the woes, Phuc pinned high hopes that the 6.7% growth target is still attainable as there is room for higher growth. If ministries, agencies and provinces exert greater effort in the July-December period, the goal could still be within reach.

Speaking at the teleconference on socio-economic performance in the first half and measures for the second half, he described the major economic indicators in the first six months of this year as “fundamentally good.”

Phuc took as example the macro-economic stability, low inflation, strong recovery of agriculture and services, and 61,000 business startups in the first six months of 2017. GDP growth of 6.17% in quarter two, way above 5.15% in quarter one, created momentum to obtain 5.73% growth in the first half.

On top of that, foreign companies registered more than US$19 billion for projects in Vietnam in the January-June period, up a staggering 55% over the same period last year.

Phuc said the good economic indicators would give an impetus to ministries, agencies and localities to work harder towards achieving higher growth in the second half.

A Ministry of Planning and Investment report prepared for the teleconference showed budget collections and spending in the first half matched estimates.

As of end-June, budget collections were estimated at VND563.5 trillion, up 13.9% year-on-year. Of the total, domestic sources contributed some VND451.2 trillion, increasing 12.4% against the same period last year.     

Meanwhile, total budget spending in the first six months of this year was put at VND583 trillion, inching up 8.3% over the year-earlier period. 

The ministry estimated VND674.8 trillion was spent on development investment in the January-June period, equivalent to 32.8% of GDP and up 10.5% year-on-year. Compared to the same period of previous years, the increase was above 5.2% in 2013, 9% in 2014, 9.3% in 2015 and 10.3% in 2016.

However, disbursements of State capital for projects were lower than planned. A report by the Ministry of Finance showed disbursements for development investment projects by the end of June met 29.6% of the PM-approved plan. If proceeds from Government bond sales carried forward from last year were included, the percentage of disbursements in the six-month period was 29.3%, below 32.2% in the same period last year.

Slow disbursements were attributable to the fact that ministries, agencies and provinces had not followed the required investment procedures. Time-consuming appraisal and approval processes as well as slow site clearance were also to blame.

H1 auto exports put at US$3.3 billion

Exports of autos and auto parts grew strongly in the first haft of 2017, reaching US$3.32 billion, but imports of autos and auto parts fell, according to the General Statistics Office.

Vietnam imported about 8,000 completely-built-up (CBU) autos worth US$176 million in June, raising the total in January-June to 51,000 units worth US$1.05 billion.

Compared to the same period last year, CBU auto imports in the first six months edged up 3.5% in volume but dipped by 14.2% in value, an indication that most of the imported autos were of lower value than the same period last year. Besides, import tariffs on CBU autos from ASEAN countries were down from 40% to 30%, prompting vehicle imports from regional markets.

Since mid-2016, the country has imposed higher special consumption tax rates on high-capacity autos, leading to lower import demand for such autos.

According to the General Statistics Office, imports of autos and auto components in the first half reached nearly US$2.7 billion, down 7.5% year-on-year.

Meanwhile, exports of autos and auto components in January-June rose 15.2% year-on-year to US$3.32 billion.

There are no specific statistics on the items which the auto industry exports and on its markets, but according to experts, the industry mainly ships autos and auto parts to other countries in the global supply chain.

A report of the General Statistics Office said that in the first six months, the country exported US$8 billion worth of goods to Japan, with vehicles and vehicle exports increasing 15.2% year-on-year.

Experts said most of the country’s auto and auto components exports came from foreign-invested firms.

Israeli cosmetics delegation visits Vietnam

A delegation of 12 Israeli companies in the cosmetics and toiletries industry visited Vietnam recently to meet with the local business community and explore and analyze the market for potential cooperation opportunities.

The Israeli Economic and Trade Mission at the Embassy of Israel in Vietnam together with the Israeli Export and International Cooperation Institute organized two professional seminars and relevant activities in Ho Chi Minh City and Hanoi.

The delegation introduced the best cosmetics and toiletries products from Israel and sought ongoing cooperation.

Ms. Liron Schneider, CEO of the Israel-based Lavido Ltd., said the company began exporting natural face and body products two years ago. Following its success in China, Lavido has begun to operate in South Korea and Japan and plans to enter Vietnam in the future. “We are seeking local distributers and importers to tap into the growing market,” she said.

Israel has a wide variety of plants and herbs as it is perched between the Mediterranean Sea to the west and the desert to the east. The Dead Sea is the lowest point on the face of the earth and is rich in unique minerals, salts and black mud, which are renowned throughout the world for their therapeutic qualities.

Israeli cosmetics and toiletries companies have exploited these properties to manufacture skin care and health and beauty products with major investments in research and development, advanced production methods, modern labs, strict quality control, and compliance with international standards.

The Israeli industry offers a wide range of products for skin care with esthetical devices sold to markets such as Europe, North America, and Asia.

Last month, global exhibition organizer Informa joined forces with the Korea International Exhibition and Convention Center (Kintex), the newest and largest expo organizer in South Korea, to hold the first Mekong Beauty Show at the Saigon Exhibition and Convention Center (SECC) in Ho Chi Minh City’s District 7.

“This is the first year the event has been held and we brought together 200 international exhibitors, which reflects demand in the regional cosmetics market,” Ms. Claudia Bonfiglioli, General Manager of Informa Beauty, told the opening ceremony.