Petrol prices down 816 VND per litre

Retail petrol prices were revised down 816 VND per litre as of 3 pm on August 4, marking the 13 th price adjustment this year.

According to the Ministries of Industry & Trade and Finance, RON 92 petrol will cost no more than 19.304 VND per litre and bio-petrol E5 is set at a maximum of 18.809 VND per litre.

Prices of diesel and kerosene went down 819 VND and 638 VND per litre, respectively, while mazut was reduced by 582 VND per kilogram.

With the revisions, gasoline prices rose by 1,400 VND per litre and diesel costs fell by 3,120 VND per litre compared to the start of this year.

As of August 3, each barrel of RON 92 and diesel 0.05S cost a respective 69.891 USD and 61.465 USD on the global market, down 8 USD from a month earlier.

Thua Thien-Hue effectively uses ODA sources

Official development assistance (ODA) sources provided for the central province of Thua Thien-Hue have been used effectively, especially in developing local infrastructure facilities.

Since 2014, the locality has implemented 16 ODA projects worth over 3 trillion VND (138 million USD), about 60.6 percent of which has been disbursed.

A technical assistance project to improve the planning of Hue city through 2030 funded by the Korea International Cooperation Agency (KOICA) is currently a provincial highlight.

The municipal authorities also have approved a number of projects related to medical service improvement, disaster adaptation and sustainable tourism development, which received financial aid from the International Organisation for Migration (IOM), the Asia Development Bank (ADB), the Italian Government, the Japan International Cooperation Agency (JICA), the International Labour Organisation and KOICA.

Japan is one of the locality’s largest ODA providers, focusing on water supply, electricity, transport, irrigation and forestation. Meanwhile, the country’s non-refundable capital to the province is concentrated mainly on improving healthcare service and management capacity of authorities in areas suffering from disasters.

Thua Thien-Hue is also one of the localities benefitting from a JICA-funded project to enhance the capacity of ODA management. JICA additionally offered scholarships to local leaders and officials from departments and sectors to study in Japan.

ODA projects are performed in line with current regulations on investment and construction management, significantly contributing to promoting the locality’s economic growth and social development.

Moving forward, Thua Thien-Hue will give priority to calling for ODA sources in urban development; expanding transport and communication networks; preserving cultural values; managing urban environments and conserving the natural environment; and implementing projects concerning climate change adaptation, public administration reform, human resource development and training.

Farming sector urged to restructure as competition grows

Vietnam’s farming sector has been urged to drastically and effectively restructure itself amid concern over more intense competition once the Trans-Pacific Partnership deal takes effect.

Attendees to a seminar in Hanoi on August 3 expressed concern that the sector relies heavily on imported breeds, seedlings and animal feed.

While suffering from frequent epidemic diseases, farmers still have limited awareness of food hygiene and environmental protection, leading to low productivity and reliance on imports from TPP member countries, especially the US, Australia, New Zealand, Canada and several ASEAN Economic Community nations like Thailand.

If the trend continues, farmers will continue losing outputs and profitability.

Nguyen Duc Thanh, Director of the Vietnam Institute for Economic and Policy Research, frankly conceded that agriculture is not Vietnam’s strength.

Restructuring should be geared towards improving food hygiene rather than spreading operations on a massive scale, he argued.

Deputy Head of the Animal Livestock Department Tong Xuan Chinh suggesting setting up technical barriers aside from existing tax barriers to bring quality and clean poultry products into Vietnam, adding that vague market information and trade fraud are among hindrances.

In this regard, Thanh proposed issuing guidelines to track the sources of origin of products throughout their manufacturing, processing and distribution process.

The seminar was hosted by the Vietnam Institute for Economic and Policy Research under the Vietnam National University – Hanoi’s University of Economic and Businesses.

Plastic exports rise by 10.3 percent in first 6 months

Vietnam’s export turnover of plastic products reached 4.2 billion USD in the first half of 2015, up 10.3 percent year-on-year, according to the Vietnam Plastic Association (VPA).

The growth rate is expected to expand once several trade agreements—including the Trans-Pacific Partnership (TPP), the EU-Vietnam Free Trade Agreement (EVFTA) and the Regional Comprehensive Economic Partnership (RCEP) which are under final negotiations—are signed.

According to VPA President Ho Duc Lam, the biggest difficulty facing the plastics sector is that up to 80 percent of plastic materials are imported. In 2014, Vietnam purchased 3.45 million tonnes of materials worth 6.32 billion USD from other countries.

Vietnamese plastic products only enjoy preferential export tax rates from 0-5 percent in the Japanese and Republic of Korea (RoK) markets, regardless of the origin of materials, as a benefit of Vietnam’s FTAs signed with these nations.

For other countries, the products need certificates of origin for the materials to receive the preferential tax rates.

Therefore, once the RCEP is inked, materials imported from the 10 ASEAN member countries and China, Australia, New Zealand, India, the RoK and Japan will meet origin standards.

Additionally, the export tax rates of Vietnamese plastic products will be also reduced to 0-5 percent once the TPP and EVFTA are signed.

57 FDI projects land in Dong Nai province

The southern province of Dong Nai attracted 57 foreign direct investment (FDI) projects with registered capital of over 1.1 billion USD in the first seven months of this year, said the provincial Department of Planning and Investment.

Among the projects, 54 were in industrial zones and three others were invested outside the zones.

There were also 47 FDI projects requesting for additional capital worth a combined 139.96 million USD.

Hyosung Corporation, a conglomerate from the Republic of Korea (RoK), owns the largest new project with 660 million USD invested in a textile-garment plant in Nhon Trach district. Thai Amata Corporation followed Hyosung with a 282-million USD project in Long Thanh hi-tech park.

A number of enterprises from the United Arab Emirates, Singapore, Taiwan (China) and the US have come to the province to study the local policies and potential sectors for investment.

According to the provincial department, by the end of July the province was home to 1,153 projects worth over 22.7 billion USD invested by 43 countries and territories worldwide.

Taiwan is currently the biggest investor in the locality with 278 projects valued at nearly 4.9 billion USD, followed by the RoK with projects worth 4.7 billion USD, Japan with 3.5 billion USD, Singapore with 2 billion USD and the British Virgin Islands with 1.2 billion USD.

Industrial parks in the province currently house some 843 FDI projects, which raked in a combined 6.75 billion USD in revenue in the first two quarters of the year, rising nearly 9 percent against the same period in 2014. Of the total, export vale reached 3.8 billion USD (up 293 million USD) while domestic sales stood at 2.95 billion USD (up 246 million USD).

Mass inspections launched in garment and textile

Labour inspections are set to be carried out in 150 garment enterprises in 12 provinces and cities nationwide, heard a conference in Ho Chi Minh City on August 3.

The inspections will focus on working time, salaries, labour safety and sanitation, and other working conditions.

According to Phan Dang Tho, Deputy Chief Inspector from the Ministry of Labour, Invalids and Social Affairs, the national inspections aim to boost legal knowledge and law-abiding behaviours as well as to improve working conditions within the garment and textile sector.

It also mobilises the greater involvement of employers and trade unions in the inspection campaign.

After reviewing the 2015 outcomes, the ministry intends to expand the campaign scope to other business sectors, Tho said.

Garment and textile is Vietnam’s key export sector, accounting for 13.6 percent of the country’s overall export turnover and 10.5 percent of gross domestic product (GDP).

Currently, 6,000 facilities are producing apparel across the nation, creating jobs for 2.5 million workers or 25 percent of the Vietnamese industrial workforce.

HoSE aims for exponential market capitalisation increase

 The Chi Minh Stock Exchange (HoSE) will strive to have its market capitalisation equal to the country’s gross domestic product (GDP) by 2020, said Tran Dac Sinh, Chairman of the exchange’s Board of Directors.

Sinh said it is a major but feasible goal, adding that HoSE now accounts for 88 percent of the market capitalisation of the country’s entire stock market, with its daily traded stock value reaching 2.1 trillion VND (97 million USD), or 70 percent of the country’s total traded value.

“Government Decree 60, which opens rooms for foreign investors, is a good legal framework for us to develop the capital and stock markets,” he noted.

The HOSE has strengthened investment promotion in Japan and the US , where many investors showed their interest in the Vietnamese stock market, he added.

It has cooperated with stock exchanges and financial organisations in 20 markets around the world, including four G7 markets while being a member of the ASEAN stock market, the Asian and Oceanian Stock Exchange Federation and the Wesfarmers Insurance (WFI).

According to Sinh, the exchange is focusing on renovating technology with its aim of becoming the largest and most modern system in Southeast Asia .

Set up in 2000, Vietnam ’s stock market is currently home to nearly 700 listed shares, with a market capitalisation of 1.2 quadrillion VND (roughly 60 billion USD), equal to 32 percent of the country’s GDP.

The country has more than 80 securities companies and close to 1.5 million accounts, including 20,000 held by foreign investors.-

Thanh Hoa targets 403 million USD from tourism by 2020

The north central province of Thanh Hoa has set its sights on earning 403 million USD from tourism by 2020.

Pham Dang Quyen, Vice Chairman of the provincial People’s Committee, said the province’s goal is to attract from 200,000-250,000 international tourists and 8-9 million local visitors by 2020 with combined revenues of 403 million USD.

The province, however, will face an uphill battle in improving infrastructures, diversifying tourist products and developing a civilised tourism environment.

By the end of June 2015, Thanh Hoa had welcomed 3.3 million holidaymakers, up 16.2 percent against the same period last year, 57,700 of whom are international tourists, up 26 percent.

Tourism revenue reached 3.36 trillion VND (154 million USD), up 22.7 percent, 37.9 million USD of which was from international visitors.

Thanh Hoa currently has 672 accommodation establishments with 15,000 rooms, 85 of which are one to four-star hotels.

The Sam Son Beach alone has over 400 accommodation facilities with 12,000 rooms. The FLC Sam Son Beach and Golf Resort has more than 600 five-star rooms.

US-dollar loan demand rises

Demands for loans in US dollars have again increased in recent months, thanks to low interest rates and a stable exchange rate.

According to industry insiders, domestic exporters have preferred dollar loans, since the interest rate is currently some 50 per cent lower than that of the dong.

Today, the average rates for dong loans are commonly 6 to 7 per cent per year for short-term loans to priority fields, including exports. The rates of 9 to 10 per cent per year are set for medium and long-term loans for priority fields.

Meanwhile, many banks are offering short-term dollar loans with interest rates of roughly 3 per cent for priority fields, including exports. The dollar lending rates are roughly 5.5-6.7 per cent per year for medium and long terms.

Banking expert Nguyen Tri Hieu said that interest rates for dollar loans had been reduced at most banks and rates currently remained reasonable for exporters.

Director of Duc Hoang Co Phan Duc Chien said that firms were taking advantage of low interest rates to borrow dollars for buying import materials and equipment for production.

Thanks to the loans, firms would not miss export contracts in the final months of the year, Chien said. Banks are also offering many dollar lending packages to attract exporters.

HDBank, for example, has just introduced a dollar lending package worth US$10 million, with interest rates of 3 to 3.25 per cent per year. Vietinbank and Sacombank are also introducing many credit packages with preferential interest rates to ease exporters' access to dollar loans.

Pham Quoc Thanh, deputy general director of HDBank, said most banks had reduced dollar lending interest rates to attract borrowers.

Besides, Thanh said, the stability of the exchange rate also helped firms secure dollar lending loans, as the central bank said that this year it would devalue the dong by no more than 2 per cent.

Pham Linh, deputy general director of VietABank, also said that sometimes firms preferred loans issued in dong due to concerns of instability in exchange rates.

Currently, besides the exchange rate stability, dollar loans at interest rates of roughly 3 per cent were attracting borrowers, Linh said.

Markets receiving goods despite floods

Local authorities have ensured adequate supplies of essential commodities to guard against any undue price rise in the local markets on account of floods, an official of the Ministry of Industry and Trade (MOIT) said on August 3 in Hanoi at the ministry's online meeting.

Vo Van Quyen, head of the MOIT's Domestic Market Department, said since early this year, the ministry's Steering Committee for Flood and Storm Prevention and Control had made it obligatory upon the local authorities to keep goods in stock as part of the preparations to meet any disaster outfall.

By the end of July, 43 out of 64 cities and provinces had reported having adequate quantities of essential commodities in stock, including rice, meat and building material.

Quyen said the ministry also organised price stabilisation programmes, ensuring that many enterprises sell their products at stable prices so that the supply of essential goods remains stable.

Additionally, market management forces in cities and provinces closely followed the pattern of consumption of goods as well as prices in the local market, he said.

Therefore, with floods raging in Quang Ninh Province, timely supply of essential commodities ensured there was not any significant change in prices, he said.

BigC, a foreign invested retailer in Vietnam, also backed sale of goods to people in the flood affected regions and thus partly contributed to keeping prices stabilised.

"Northern provinces have had plans to keep essential commodities for rainy seasons and storms. Basically, the provinces ensured they had goods in stock and, therefore, the market did not see speculation about goods and price rise," Quyen said.

Nguyen Van Tuong, director of the Dien Bien Industry and Trade Department, said the province spent VND13 billion (US$596,330) to keep essential goods in stock during the rainy season for people in the remote areas, including iodized salt, instant noodles, fuel and other goods.

The volume of goods was sufficient to meet the demand of the people in the remote areas and regions of ethnic minorities during the period of rains and floods, he said.

Earlier, Nguyen Anh Tuan, director of Price Management Department under the Ministry of Finance, said this month will witness continuing rains and floods. Therefore, natural disasters would continue to affect life and production and also supply lines, leading to increase in prices in some places, reported online Nguoi dong hanh newspaper.

The department expected the global export prices of some fuel products, including petrol, liquefied petroleum gas (LPG) and rice to come down or stay below usual. That could give an advantage to those managing prices in the domestic market, Tuan said.

At home, supply of goods continues as authorities prepare for the new school year 2015-16 as demand will rise for clothes, shoes, books and office stationery.

The stability in prices was due to efficient price stabilisation programmes to prepare for new school year in some cities and provinces and stability in exchange rate between Vietnamese dong and US dollar at commercial banks, he said.

The State authorities continue to exercise control on the market and prices and ensuring that the macro economy stays stable, thus curbing the consumption price index at a low rate this month.

The Quy Nhon General Port in central Binh Dinh Province has been overloaded in recent years, having to handle nearly 2.5 times its designed capacity annually.

Despite temporary measures being taken, the port faced numerous obstacles in handling the increasing amount of goods it had to service.

Chairman of the board and the port's director general, Nguyen Quy Ha, said there was an increase of 15 per cent in the amount of goods the port had to service in the first half of the year, compared to the same period last year, up to nearly 4.6 million tonnes of goods.

Ha noted that this figure well exceeded the designed capacity for a general port, such as Quy Nhon Port. During the last three months, the port experienced numerous bottlenecks, even with all of its available facilities being operated on a 24/7 basis.

The chairman said the port operated five harbours, which were only designed to service ships with DWT capacities of up to 30,000.

Even after the port carried out various make-shift modifications to allow it to service ships with 50,000DWT, a large number of even larger ships had to wait up to 12 days before their cargoes could be loaded or unloaded.

He noted that the situation would only get worse, as the province has become a livestock feed manufacturing centre and the number of shipments, as well as the size of the ships, would continue to grow bigger.

Dam Huu Hanh, a Quy Nhon-based company specialising in agriculture products, said all of his company's supplies were delivered through the port. The often clogged port resulted in delays of cargo and financial losses, not only for his company but many others who had to rely on the port's service to move their goods.

According to a report made by the province's authority and the Viet Nam Marine Administration, the Quy Nhon General Port would have to service up to 15 million tonnes of goods due to increased import/export activities in the Central Highland and the South Central Coast by 2020.

However, many experts pointed out that raising the port capacity from its current 3.5 million tonnes to 15 million tonnes in just five years will prove to be a very challenging task if it was at all possible, given the province's financial and management capacity.

A number of projects were implemented to improve the port's capacity, as well as its infrastructure, including the construction of two new harbours for 50,000 DWT ships and various storage and service facilities designed to handle large container ships.

The Quy Nhon Port is under the management of Viet Nam National Shipping Lines (VINALINES). The State-owned group, however, has been undergoing a transformation period and plans to withdraw 49 per cent of its capital from the port. The much needed investment to improve its infrastructure and capacity, therefore, are likely to be even further delayed.

Budget to meet 2015 estimates

A continuous improvement in domestic revenue collection (excluding collection from crude oil) in the last months of the year will help the country meet the State budget estimates for 2015.

According to the National Financial Supervisory Commission, budget collection in the first seven months of the year met 52.3 per cent of the annual estimate due to a sharp reduction of 32.5 per cent from crude oil export revenue. In the first seven months, the export price of crude oil, which contributes roughly 10 per cent to the total State budget revenue, averaged only US$60 per barrel while the State budget estimates were approved on the basis of the projected crude oil price of $100 per barrel.

However, the commission said, the domestic revenue collection for the period had surged sharply by 15.1 per cent year-on-year. It forecast that the domestic collection would rise further in the last months of the year, helping the country meet the State budget collection estimates targeted by the National Assembly (NA).

This year, the total revenue for the State budget is estimated at VND921.1 trillion ($42.44 billion), which will be used for the minimum pay rise of 8 per cent for pensioners and low-income earners from the beginning of this year. Meanwhile, the total expenditure is projected to reach VND1,147 trillion ($52.85 billion). Therefore, the calculated overspending rate is equivalent to 5 per cent of the GDP, or VND226 trillion ($10.41 billion).

Domestic revenue collection last year grew by more than 13 per cent.

Deputy Finance Minister Huynh Quang Hai has so far also affirmed that the finance ministry will implement comprehensive measures to meet the budget estimates targeted by the NA.

The finance ministry will do its utmost to have the domestic revenue collection surpass the preset target to offset the reduction in revenue from crude oil exports, Hai said.

Besides this, he said the ministry would strengthen budget collection to avoid tax avoidance and fraud as well as tax arrears.

Hai also affirmed that with measures to tighten government spending, budget overspending this year would be equivalent to 5 per cent of the GDP, as targeted by the NA.

Retail sales growth higher than four-year average

Retail sales grew significantly in the first seven months of 2015 and exhibited seven notable points.

Firstly, growth was high again. Excluding the 0.86 per cent increase in prices, total sales rose nearly 9 per cent, higher than the average over the last four years.

Secondly, such growth indicates that future growth may exceed 9.5 per cent, more than one and a half times the average annual rate in the 2011-2014 period.

Thirdly, the ratio between the growth rate of total retail sales and the growth of GDP has continued to increase over the years, from 0.74 times in 2011 to 1.5 times in the first seven months of 2015.

Fourthly, total retail sales in the non-State sector accounted for the largest proportion, with 85.6 per cent, and increased significantly, while the State sector accounted for just 11.1 per cent.

The foreign-invested sector accounted for a low proportion of total retail sales, with 3.3 per cent, but recorded handsome growth and is trending upwards.

Fifthly, the goods retail sector accounted for 75.9 per cent and grew the most, at 10.6 per cent. Accommodation and restaurants began to gain a higher proportion, with 11.7 per cent, but growth was only 7.2 per cent.

Sixthly, the growth in final consumption in first six months was 8.7 per cent, contributing 7.74 percentage points to the growth of GDP.

Finally, the increase in total retail sales contributed to improving consumers’ lives, reduced inventories, and increased consumption, production growth and economic growth. Despite the increase in total retail sales, aggregate demand remains weak, leading to a low inflation rate.

$253 million loan for deepwater port

Four State-owned commercial banks have signed a credit agreement to finance the Coastal Power Center Seaport project of the Power Generation Corporation 1 (EVN Genco 1).

Vietcombank, Vietinbank, BIDV and Agribank are to lend VND5.5 trillion ($253 million) for the project’s first phase.

At the signing ceremony, Vietcombank also expressed a desire to continue to finance the project’s next stage.

The project is part of national electricity development planning in the 2011-2020 period and vision to 2030, under the government’s Decision No. 1208, with total investment of over VND10.7 trillion ($492.2 million).

The deepwater port, in Dan Thanh commune, Duyen Hai district, in the Mekong Delta’s Tra Vinh province, will used for the Coastal Power Center, consisting of a wharf that can berth coal vessels of 30,000 DWT and oil vessels of 1,000 DWT annually, to serve the operation of power plants within the center.

Established in June 2012, EVN Genco 1 is 100 per cent owned by Electricity of Vietnam (EVN). The Coastal Power Center Seaport is the first project of EVN Genco 1 to be co-sponsored by four State-owned commercial banks.

Foody to expand into Southeast Asia

Vietnamese start-up Foody has announced that it has received further investment from Tiger Global Management, a US investment fund and will expand its operations into Indonesia, Thailand, and Malaysia.

According to Mr. Dang Hoang Minh, co-founder of Foody, this is the fourth investment by Tiger Global Management in the company. “On August 10 Foody’s Indonesian website will be introduced,” he said. “The next goal for expansion will be Malaysia, Thailand, Laos, and Cambodia.”

The investment is believed to be in the millions of US dollars.

Foody’s success encourages other start-ups in Vietnam and is a sign that Vietnam’s start-up market is becoming increasingly well known among investors around the world.

Established in 2012 in Ho Chi Minh City, Foody now has 275,000 dining venue reviews, 1.5 million images, and 1.9 million food collections, with page views numbering 8 million a month. The company earlier received investment from Japanese and Singapore investors.

Mobile World releases first half results

Mobile World’s revenue in the first six months stood at VND10.86 trillion ($497.82 million), an increase of 157 per cent against the same period last year and achieving 46 per cent of the annual plan.

Profit after tax of the electronics retailer was VND456 billion ($20.9 million), an increase of 146 per cent year-on-year and representing 51 per cent of the annual plan.

Revenue from online sales reached VND676 billion ($30.98 million), 35 per cent of the annual target of VND2 trillion ($91.68 million) and increasing 171 per cent against the first half of 2014.

In the first half its Thegioididong.com electronics supermarket chain opened 87 stores and DienmayXanh.com opened eleven, bringing the total number of Mobile World outlets to 461.

Song Hong targets revenue of $841.1 million

The Song Hong Joint Stock Corporation aims to record revenue of VND2.6 trillion ($120.9 million) this year and profit of VND22.2 billion ($1.04 million), its annual shareholders meeting was told. It will continue to promote its restructuring, divesting all State capital and simplifying its management to increase workplace productivity and production efficiency.

The corporation also approved the basic development targets for the 2015- 2020 period at the meeting. Total equity is to increase from VND270 billion ($12.7 million) to VND350 billion ($16.4 million) this year. From 2016 to 2017 it will reach VND500 billion ($23.5 million) and, in 2020, VND800 billion ($37.2 million). After 2020 it aims for VND1 trillion ($47 million).

Total production value from 2016 to 2020 is targeted at VND29.2 trillion ($1.4 billion), an increase of 62 per cent compared to the 2010- 2015 period. Total revenue is to see growth of 66 per cent, to VND18 trillion ($841.1 million), while profit is to reach VND384.87 billion ($18.1 million).

In 2014 its total production value was VND3.3 trillion ($153.5 million), with total revenue of VND2 trillion ($95.3 million) and profit of VND11.67 billion ($542,790). Average monthly incomes were VND4.8 million ($223.3).

MB offers motor vehcile loans

Military Bank (MB) has introduced loans for the purchase of motor vehicles to customers who need them for business activities.

It will lend up to 100 per of the price for the purchase of motor cars, buses, trucks, specialized vehicles, and tractors, etc., with loan terms of up to seven years. Besides the usual types assets as collateral, customers can use other types such as valuable papers.

Customers who borrow to purchase automobiles serving their business activities can apply for preferential policies under the medium-term credit package for SMEs in 2015.

SCIC releases first half results

The State Capital Investment Corporation (SCIC) has announced its business results for the first half of the year.

Total revenue was VND4.93 trillion ($226.04 million), an increase of 62 per cent against the same period last year and representing 63 per cent of the annual plan.

Profit after tax was VND3.58 trillion ($164.14), 54 per cent higher than in the first half of last year.

Mr. Hoang Nguyen Hoc, Deputy General Director, said the SCIC achieved 79 per cent of the targeted revenue from selling capital, an increase of 2.7-fold year-on-year. The SCIC has re-invested in enterprises and sectors that are important for the development of Vietnam’s economy, he added, focusing on large-scale projects with long-term potential.

Vingroup divests from Anh Sao Real Estate

Vingroup JSC has recently announced the transfer of its entire stake in the Anh Sao Real Estate Corporation.

It previously owned 94 per cent of charter capital, which it purchased from shareholders on April 14.

Other details relating to the deal, such as the purchaser and the value, have not been revealed as yet.

Through its subsidiaries Vingroup invested more than VND10 trillion ($458.5 million) in merger and acquisition (M&A) deals in 2014. Most were to consolidate its core function of real estate and some of the largest were carried out to facilitate the company’s diversification into other sectors such as retail and ports.

Vietnam exports 150,000 tons cashew nut in first half of 2015

Vietnam has processed 1.3 million out of 2.74 million tons of raw cashew over the world’s total number for the 2014-2015 period, according to the Vietnam Cashew Association (Vinacas).

Besides, Vietnam has exported over 300,000 tons of cashew nuts, accounting for 50 percent of the global trade value.

The countries in the world have imported Vietnam’s cashew nuts including the U.S to 30 percent market share; EU to 25 percent, China 20 percent.

In the first six months of 2015, Vietnam exported 150,000 tons of many kinds of nuts worth US $ 1.1billion, an increase of 14 percent in volume and 28 percent in value compared to the same period last year.

China’s cheap steel ingots pile pressure on local makers

Most local steel manufactures are struggling with mounting competition with finished steel products made of cheap steel ingots imported from China since the middle of this year.

The flooding of low-priced ingot imports from China since mid-June have made life tough for many steel makers using local steel ingots to turn out products, said Vo Thi Hanh, director of Viet Phap Steel Co. Ltd. based in the central province of Quang Nam.

Viet Phap Steel buys local steel ingots at VND7,700-7,800 per kilogram while a kilogram of Chinese steel ingots is sold at VND7,000 on the domestic market. Therefore, the company is unable to compete with rolled steel made of such cheap materials, Hanh told the Daily over the weekend.

The biggest concern of Viet Phap Steel is how to reduce inventories. The company has not accelerated production despite declining material prices.

Speaking to the Daily on the issue, Nguyen Van Sua, vice chairman of the Vietnam Steel Association (VSA), said the association has got many complaints about China’s dirt-cheap steel ingot imports.

Sua said some local producers have shifted to steel ingot imports from China to produce products instead of importing steel scrap to produce ingots to enjoy higher profit margins.

However, the association is concerned that the products made of cheap material imports might be of lower quality than those made of local materials.

Data of the General Statistics Office showed steel imports in the January-July period amounted to US$4.7 billion, rising by 15.1% year-on-year.

In addition to massive imports of steel ingots and finished steel products from China, local makers will have to deal with increasing competition from steel imports from Russia and other markets when more trade agreements between Vietnam and partners come into force.

Farm products still hard to enter supermarkets

Farmers still find it difficult to sell their products direct to supermarkets and other modern retail channels as they have not participated in production-distribution chains, heard a seminar in Hanoi City last week.

Speaking at the seminar, experts said many distributors and retailers want to buy farm produce, particularly local specialties, for distribution at their facilities but these products fail to meet requirements for quality and food safety, among others.

Pham Ngoc Thanh, director of Phuc Lam Development and Trading Consulting Joint Stock Co., was cited by VietnamPlus as saying that supermarkets are looking to buy more products from farmers but their seasonal goods do not meet criteria for quality, origin, brand registration and food safety.

“It is hard for farmers to meet such criteria although their products have been recognized in their localities in terms of quality and brand,” Thanh.

Vu Vinh Phu, chairman of the Hanoi Supermarkets Association, shared Thanh’s view, saying that many local products have not been sold at supermarkets as they are not well packaged and do not have brands.

Phu said farmers and small producers are forced to sell their products via other channels than supermarkets and other modern retail outlets as retailers and distributors ask them to offer high discounts.

Experts at the seminar called for the Government to help farmers turn out items in line with the Vietnamese Good Agriculture Practice (VietGAP) standards and have their products certified as well as create a legal framework facilitating cooperation between farmers and retailers.

“As cooperation between producers and supermarkets remains weak, there should be an efficient mechanism to cement linkages between producers and distributors,” Phu said.  

Nguyen Mai, chairman of the Vietnam Association of Foreign Invested Enterprises (VAFIE), said products are sold to customers at prices much higher than those offered by farmers due to the absence of a good supply chain and a weak logistics system in the country.

Mai warned that local enterprises would have to cope with many more challenges after the ASEAN Economic Community is launched at the end of this year and duties on products imported from ASEAN markets would be cut to 0% in 2018.

However, Vo Van Quyen, head of the Domestic Market Department of the Ministry of Industry and Trade, told the seminar that more Vietnamese consumers preferred locally-made products as reflected in a recent survey.

Some 63% of respondents said they opted to buy domestic goods while 54% advised relatives and friends to buy Vietnamese items, according to findings of the survey released at the seminar on the local supply chain organized by VAFIE and Samsung Electronics Vietnam.

“Vietnamese products have gained a firm foothold at distribution channels of local and foreign-invested companies. Vietnamese items account for some 90% of goods available at supermarkets,” Quyen said.

Nguyen Thai Dung, deputy general director of Big C Thang Long, said up to 95% of the products on the shelves of Big C supermarkets are made in Vietnam.

Hanoi Trade Corporation (Hapro) reported that around 80% of 20,000 products available at the enterprise’s supermarket chain originate in the capital city.

Dang Xuan Quang, deputy head of the Foreign Investment Agency under the Ministry of Planning and Investment, said Vietnamese products are those produced by both local and foreign-invested enterprises in the nation.

Meanwhile, Han Myoung Sup, general director of Samsung Vietnam, said Samsung phones made in Vietnam are exported to more than 52 markets across the globe.

Vietnam Air, Vietcombank ink partnership deal

Vietnam Airlines Corporation and the Bank for Foreign Trade of Vietnam (Vietcombank) have clinched a comprehensive partnership in multiple fields including using each other’s services and products.

Vietcombank will extend priorities to Vietnam Airlines when the latter uses its financial services and products such as loans, cash management, international payments, loan guarantees, investment, cards for employees, and corporate finance, among others to support the carrier to expand business.

Meanwhile, Vietnam Airlines will provide priority services and products for Vietcombank, including passenger and cargo transportation for the lender.

The two sides agreed on creating favorable conditions for each other to use services and contribute capital to subsidiaries and affiliates.

Nghiem Xuan Thanh, chairman of Vietcombank, said the bank is the biggest domestic bank partner of Vietnam Airlines in terms of payments and loans for aircraft fleet expansion projects. The lender has financially backed the airline to acquire 26 Airbus A321, 10 Airbus A350-XWB 900 and eight Boeing B787-9 Dreamliner aircraft.

Soc Trang turns sea-borne economy into major pillar

The Mekong Delta province of Soc Trang said that it would step up the implementation of the Ministry of Natural Resources and Environment’s (MoNRE) strategy for the general management of Vietnam’s coastal areas through 2020 to shift the sea-borne economy into focus.

The strategy was launched by the MoNRE in early July in Soc Trang to properly exploit and use natural resources and protect the environment in Vietnam’s coastal areas.

As one of 28 provinces and cities with coastlines and with a fishing ground of 30,000 square kilometres and three coastal districts – Cu Lao Dung, Tran De and Vinh Chau town – Soc Trang has developed its coastal tourism, services, agriculture, forestry and seafood economy for years .

The province targets to make sea-borne and coastal economy account for 37-40 percent of its Gross Domestic Product (GDP) by 2020.

Le Thanh Tri, Vice Chairman of the provincial People’s Committee, said the province has always considered sustainable development as a high priority and taking climate change and rising sea level into account while developing infrastructures.

Soc Trang currently has 340 offshore and 800 near-shore fishing boats. The province has enacted measures to properly manage fishing activities.

With a 70-kilometre coastline, Soc Trang also has a large area of seaside buffer forest, ideal for reproducing natural seafood and creating oyster and arca fields.

Tran Hoang Dung, Deputy Head of Soc Trang’s Department of Seafood Resources Exploitation and Protection said the agency has implemented a number of measures to ensure sustainable fishing activities and seafood resources.

PM approves import management project

The Prime Minister has given the “green light” for a project on management of imports in compliance with international commitments until 2020.

Accordingly, Vietnam will maintain and optimise tariff and non-tariff measures in line with its commitments to the World Trade Organisation (WTO) as well as bilateral and multilateral free trade agreements (FTAs).

The country will increase the use of non-tariff measures, regulations on technical barriers to trade (TBT), and apply sanitary and phytosanitary (SPS) measures, whilst building a Law on foreign trade management to facilitate business activities.

At the same time, Vietnam will often review, supplement and remove unnecessary administrative procedures to guarantee national order and security, food and transport safety, environmental protection and public health.

The project includes concrete measures to improve import management, such as utilising import and environmental protection taxes to support domestic production and improve competitiveness.

A roadmap for the removal of import taxes on commodities originating from FTA member states should also be applied.

UAE businesses seek investment opportunities in HCM City

Deputy Chairman of the Ho Chi Minh City People Committee Le Thanh Liem on July 31 received a United Arab Emirates (UAE) business group seeking investment cooperation opportunities in the southern city.

Sultan Rashed Ahmad Lootah, General Director of Vault Investment and Management Fund and head of the business group, lauded the city’s development potential and presented a smart city project and an underground car park initiative in the city.

The two projects would fall in line with HCM City’s priorities of advanced technology, a friendly environment and meeting the interests of citizens, he said.

Deputy Chairman Le Thanh Liem stressed that the city wishes to attract resources for development investment, particularly from foreign entities. The city also pledges to create favourable conditions for UAE enterprises.

He said he will instruct relevant agencies to work with the UAE side on the proposed projects.

Binh Duong leaders meet with businesses

Key officials of the southern province of Binh Duong met on July 31 to discuss and exchange views with over 100 representatives from business associations and enterprises operating in the locality.

At the event, participants raised opinions on issues related to investment promotion focusing on support industries, business establishment procedures, extra working time and minimum wages for employees.

They also petitioned authorities to solve problems with transport activities and ease access to loans.

Trade fraud prevention as well as social order and traffic safety maintenance in industrial areas were also mentioned.

At the meeting, Deputy Chairman of the provincial People’s Committee Tran Thanh Liem answered questions related to the responsibility of authorities.

Provincial leaders pledged to direct relevant departments to solve enterprise difficulties and other issues will be presented to the Government for appropriate solutions.

JICA helps enhance E- customs efficiency

The Japan International Cooperation Agency (JICA) said on July 31 that it will continue to fund a technical assistance project to enhance the efficiency of the Vietnam Automated Cargo and Port Consolidated System and the Vietnam Customs Information System (VNACCS/VCIS).

Accordingly, the support will be carried out over three years from August 2015 to June 2018, aiming to define future orientations for enhancing the applicable capacity of VNACCS/VCIS.

It is also to simplify and improve post-customs clearance inspection and improve customs officers’ skills in managing risk.

The current technical assistance project began in April 2012 and operates parallel to the Japan-funded non-refundable aid project “National electronic customs and one-stop-shop customs mechanism in modernising customs sector” (March 2012-March 2014).

JICA said as part of the non-refundable aid project, the technical assistance project helped build necessary legal systems and improve the capacity of VNACCS and VCIS users, including over 10,000 public customs officers and more than 15,000 others from private enterprises.

Since becoming operational in April last year, VNACCS and VCIS have functioned in a stable fashion, contributing to facilitating trade activities in Vietnam. The systems have processed nearly 99 percent of customs declarations so far.

A survey conducted by the General Department of Customs and the Vietnam Chamber of Commerce and Industry in Ho Chi Minh City in October last year proved that with the application of VNACCS and VCIS, the time required for import and export customs clearance reduced 18 percent and 58 percent, respectively, from the previous year.

JICA said the systems’ efficiency can be improved by apply risk management and post-customs clearance inspection methods, thus preventing tax loss.

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