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BUSINESS IN BRIEF 6/11

 Japanese firm buys $9 million stake in Vinatex; Top 50 business leaders honoured; Vietnamese exporters expand US market share; Industrial production goes up in 10 months; Business climate for Vietnam’s manufacturing sector improved: HSBC

VASEP predicts seafood exports to climb this year

The Viet Nam Seafood Exporters and Producers (VASEP) expects Viet Nam to export seafood worth about US$7.7 billion in 2014, due to high demand by the end of the year.

Nguyen Hoai Nam, deputy general secretary of VASEP, said that since the beginning of this year, the nation has exported seafood worth an average of $644 million per month. This is based on the General Department of Customs' statistics of $5.8 billion of seafood exports during the first nine months of this year, reported the Hai Quan newspaper.

Based on the average monthly export value, the nation expects to gain around $1.9 billion in the last quarter of this year, he pointed out.

Last year, the total export value of seafood reached $6.7 billion for the whole year, higher than the target of $6.5 billion. VASEP hopes for success again this year, he said, adding that it will be primarily due to the high export value of shrimp.

So far, the total shrimp export value has accounted for 50 per cent of the total export value of seafood products. In the first nine months, shrimp exports to key markets such as the United States, the European Union and South Korea increased sharply.

Tra fish came second, accounting for 22 per cent of the total seafood export value, even though it faced several challenges in the export markets, Nam said.

According to some experts, tra fish exporters will get a chance to promote their products at the end of the year, because they will get more orders from export markets for Christmas and New Year holidays.

VASEP expects shrimp and tra fish export values to reach $3.5 billion and 1.8 billion respectively, for the whole year.

The Agriculture and Rural Development Ministry reported that in the first 10 months of this year, the total export value of seafood gained a year-on-year increase of 19.9 per cent to touch $6.48 billion.

The United States continues to be the largest export market for Vietnamese seafood products, accounting for 22.25 per cent of the total national seafood export value.

Vietnam participates in textile fair in Venezuela

Vietnamese artisans are attending the Artextil Fair Venzuela 2014 held in Caracas on November 1-9 as at the invitation of the host country’s Ministry of Culture.

Besides presenting textile products, the Vietnamese delegation also shared experiences in the field of textile manufacturing with other participants.

The Venezuelan side highly appreciates Vietnamese handicraft and textile techniques. They also showed interest in the Asian country’s experiences in the preservation and promotion of craft villages.

Venezuelan Culture Minister Reinaldo Iturriza said at the fair opening that the presence of the Vietnamese delegation at the fair will help strengthen the friendly relations between the two countries, especially in culture.

Vietnamese, Slovakian businesses strive to boost partnership

Vietnamese and Slovakian enterprises explored partnership opportunities during a business forum in Hanoi on November 4, which was jointly organised by the Slovakian Embassy in Hanoi and the Vietnam Chamber for Commerce and Industry (VCCI).

According to VCCI Vice President Doan Duy Khuong, there is room for Vietnam and Slovakia , two highly dynamic markets, to deepen and broaden their trade ties, including closer business connections.

Vietnam can serve as a gateway for Slovakian products to enter the ASEAN market, while Slovakia , a member of the European Union can bridge Vietnam and EU member states, as well as other countries in the region, he said.

Currently, VCCI is promoting trade and investment between the two countries, with a market research trip to Slovakia planned for Vietnamese enterprises later this month, aiming to explore the country’s business environment and seek partners, Khuong announced.

On his part, Miroslav Lajcak , Slovakia ’s Deputy Prime Minister and Minister for Foreign and European Affairs, said his country is attractive for investors in mechanics, energy, industry, advanced technology, and the creative industries.

Slovakia always supports small and medium-sized enterprises that play an important role in boosting trade and investment relations between the two countries, he said, pledging favourable conditions for Vietnamese investors.

Slovakia is a leading automobile manufacturer with the highest per capita output of automobiles in the world. The country also has strengths in information and technology, defence industry, electronics, environmental protection and healthcare services.

VCCI data shows that bilateral trade between Vietnam and Slovakia exceeded 407 million USD in 2013. Vietnamese exports, mainly electronic products and spare parts, footwear and apparel, accounted for 391 million USD.

At the end of 2013, Slovakia was operating five investment projects worth 235 million USD in Vietnam, making it the 31 st largest investor in Vietnam, out of a total 101 countries and territories.

BIDV MetLife opens in Ha Noi

A MetLife Life Insurance office opened yesterday in Ha Noi.

This follows the issue of a business licence by the Ministry of Finance on July 21.

The joint venture has charter capital of VND1 trillion (US$48 million), of which 60 per cent comes from MetLife and the rest from the Bank for Investment and Development of Viet Nam, and the Bank for Investment and Development of Viet Nam Insurance (BIC).

The partnership involves an agreement whereby BIDV MetLife's products will be made available through BIDV's national bank network.

Quality goods on show in Mekong Delta

An exhibition to promote high quality Vietnamese products opened today in Cao Lanh City in the Mekong Delta, with 120 firms displaying their goods.

Art performances and game shows are also being held, as well as a cooking contest for local teachers and students and amusement programmes for children.

A seminar to be held on the sidelines will discuss measures to strengthen the competitiveness of domestic firms and boost consumption of their products.

Organised by the Business Association of High-Quality Vietnamese Goods, the fair will run until November 9 in My Phu Ward.

Seafood exports bring US$6.48 billion

Seafood export value reached US$6.48 billion since early this year, a year on year increase of 19.9 percent, said the Ministry of Agriculture and Rural Development on November 2.

The time from now until the end of the year is advantageous for businesses to boost seafood exports because consumption demand has highly increased in the world.

At present, export price of tra fish fillets to the Asian market has inched up US$2.5-2.6 a kilogram. Therefore, tra fish price has also increased from VND23,500-24,000 in the Mekong Delta, a profitable rate for farmers.

Tiger prawn prices have gone up in Ca Mau, Bac Lieu and Soc Trang Provinces. A kilogram (20 shrimps) is paid VND285,000-290,000 and VND220,000 to 30 ones.

Provincial departments of aquiculture and rural development in the delta said that tra fish and shrimp prices have rebounded back after a long fall and farmers have resumed tra fish breeding.

Binh Dinh kicks off 2014 Vietnam- Lao economic cooperation seminar

The 2nd economic cooperation seminar between Vietnam’s south – central provinces and Lao’s south – central provinces was opened in Binh Dinh province’s Quy Nhon city on November 2.

Attending the seminar was nearly 200 delegates from ministries, agencies, enterprises and leaders of two countries.

According to the Ministry of Planning and Investment, Lao authorities have licensed to 413 Vietnamese projects with the total investment capital of US$ five billion. Currently, Vietnam is ranked the second position among countries invested in Laos market. Most of Vietnamese projects have focused on the fields of energy, infrastructure service, agriculture and silviculture, and mine ores.

After the first seminar, 40 Vietnamese projects were granted the license totaling the investment capital of US$ 1, 6 billion.

Ministry suggests adding $22bn Thai oil complex to Vietnam’s oil sector planning

The Ministry of Industry and Trade has called on the Prime Minister to add a Thai company's megaproject to build an oil complex in a south-central province to the planned development of Vietnam’s oil and gas sector.

The Nhon Hoi oil complex, to be located in the eponymous industrial park in Binh Dinh Province, should be part of the oil and gas projects zoned for development between 2015 and 2025, the ministry said in a document submitted last week to the Prime Minister.

Thai energy firm PTT Pcl is the developer of the complex, consisting of an oil refinery, an olefin manufacturing plant, and an ethylene steam cracking component.

The proposed megaproject is worth US$22 billion and will have a total capacity of up to 20 million tons of products per year during its first phase, the industry and trade ministry said in its document.

The planned 20 million ton per year capacity of the Nhon Hoi complex is three times that of Dung Quat, the Southeast Asian country’s sole operating refinery.

PTT will only hold a stake of 40 to 45 percent in the project, while Saudi Arabian national petroleum and natural gas company Saudi Aramco will also own a similar share in the complex, according to the ministry.

The remaining 15 to 20 percent stake must be held by a Vietnamese entity, which the Binh Dinh administration suggested in mid-October to be Petrolimex, Vietnam’s largest fuel wholesaler.

The Ministry of Industry and Trade said Vietnam should encourage and support a foreign investor if it wants to build an oil refinery that satisfies legal requirements, while the interests for both parties are ensured, according to Hai Quan (Customs) newswire.

The ministry rejected claims that the Nhon Hoi oil complex would affect the operations of other government-backed refineries in Vietnam, the newswire said in a Friday article.

Dung Quat refinery, located in the Dung Quat Economic Zone in the central province of Quang Ngai, is the only operating refinery in Vietnam, while the second such facility, the Nghi Son Refinery, is slated to be commissioned in 2017 in the north-central province of Thanh Hoa.

The industry ministry said the proposed Nhon Hoi plant, as well as other projects besides Dung Quat and Nghi Son, would not receive as much preferential treatment as their predecessors.

The presence of Nhon Hoi will act as motivation for Dung Quat and Nghi Son to increase their competitiveness and reduce production costs, it added.

The ministry said not all of the requests for incentives to develop the project by PTT will be accepted.

PTT has asked to enjoy zero taxes on crude oil imports and transfer of profits abroad, and be allowed to distribute the complex’s products domestically, to which the ministry agrees.

But the request to have its corporate income tax exempted for the first 13 years of the project has been turned down, according to the ministry.

“This is against all current laws and regulations,” the ministry said, adding it agrees with the proposal by the Binh Dinh administration to levy a 10 percent corporate income tax on the complex for 17 out of 30 years from its opening.

“The project will enjoy zero tax for the first four years, 5 percent in the next nine years, and 10 percent in the remaining 17 years,” the ministry said.

PTT has said in the project’s feasibility report that if everything proceeds as planned, the oil complex could break ground in 2016 and begin production in 2021.

Japanese firm buys $9 million stake in Vinatex

Itochu Corporation, a multi-industry Japanese firm, has bought a 5 per cent stake of Vinatex, Vietnam’s largest textile company, for $9.25 million, reported Japanese newspaper Nikkei.

Vinatex’s IPO consultant shared with Vnexpress that Itochu has long planned to make an investment into a Vietnamese textile company. Initially they planned to become a strategic partner of Vinatex, but finally decided to purchase a stake via the share auction.

The deal has been finalised, but it is unlikely to be reflected in Vinatex’s business results for this year. The IPO consultant said that “With such a large-scale company, it will take time to see the outcome.”

Vinatex held its IPO on September 22 at the Ho Chi Minh Stock Exchange. 90 per cent of the company’s shares on offer were sold, of which foreign investors purchased nearly half.

Itochu is the first non-financial Japanese company to invest in a Vietnamese state-owned enterprise. Itochu is the largest company operating in Japan’s textile sector. Its products range from raw materials, machinery and chemicals to food and fashion items. It currently works in some capacity with around 100 Vietnamese textile firms.

Hanoi shakes hands with Vietnam-Korea Business Centre

The Hanoi Investment Promotion Centre last week signed a co-operation agreement with the Vietnam - Korea Business Centre and Hanoi Small and Medium-Sized  Enterprises Association to promote investment in the capital city.

Under this agreement, the sides will exchange information, find out opportunities, support and consult administrative procedures and legal investment procedures for investors.

Those parties will also organise investment promotion activities in South Korea and create access for South Korean business associations and their members to find investors and projects in Hanoi.

According to Tran Duc Hoat, deputy director of the Hanoi Municipal Authority for Planning and Investment, the agreement means Hanoi would continue being one of the most attractive destinations for South Korean investors.

Park Jung Hwan, co-chairman of the Vietnam - Korea Business Centre (VKBC) said that Vietnam was considered one of the most important, reliable and potential partners to South Korea.

“Leading companies from Korea such as Samsung, LG and Posco have operated in Vietnam successfully for years and they are also continuing to expand their activities here,” Hwan said.

The Samsung complexes in the northern provinces of Bac Ninh and Thai Nguyen are attracting a range of part suppliers and logistics companies in different fields of construction, ports and home appliances.

Park Jae Hyung, VKBC’s general director agreed that it was high time for South Korean companies to come to the Vietnamese market.

“Vietnam has been improving its position in the global economic map. After the Second World War, the global economy marked the development of giant economic developers such as South Korea, China, Singapore and many others. I think that stepping into the 21st century, Vietnam will upgrade its position, thanks to its dynamism and co-operation with South Korean companies through their investments in Vietnam,” Hyung said.

VKBC is connecting with Korean investors and bringing them to Vietnam, among those are investors in fields such as engineering equipment and appliances, energy and high-level technical sectors.

Mac Quoc Anh, vice chairman cum general secretary of the Hanoi Small and Medium-Sized Enterprises Association said that co-ordinating with the Hanoi Investment Promotion Centre and VKBC would be good opportunity for the association’s members to have more information and access to the business contact with foreign companies.

“After this signing ceremony we will encourage our members to be more active in the Hanoi Investment Promotion Centre’s promotion activities in order to achieve the targets which we have mapped out,” said Anh.

Hanoi has an average income per capita of $2,490 in 2013, compared to the nation-wide average of $1,899. The success of Hanoi’s socio-economic growth was contributed by domestic enterprises, foreign investors, especially investors from South Korea, according to Hoat.

By the end of September, South Korea topped the number of foreign invested projects and registered foreign direct investment capital in Hanoi, with 812 projects and $4.69 billion, occupying 28.9 per cent of the foreign invested projects’ number and 22.1 per cent of the registered foreign direct investment capital.

Hanoi planned to reach $1.3 billion of registered foreign direct investment capital for the whole year of 2014, an increase of 17 per cent compared to the previous year.

South Korea has been one of the leading foreign investors in Vietnam. At present, South Korea has 4,020 projects in Vietnam with the total registered investment capital of $33.4 billion, accounting for 23 per cent of the total number of foreign invested projects and 13.7 per cent of the total registered foreign direct investment capital.

Top 50 business leaders honoured

Nhip cau dau tu (Investment Bridge) magazine and Royal Salute yesterday announced the "Top 50 Business Leaders: Mark of Respect 2014" rankings in honour of Vietnamese business leaders' efforts.

Leaders of small-and-medium enterprises and Vietnamese chief executive officers of foreign companies were eligible for this year's awards, unlike last year, when only leaders of large companies qualified.

The awards were divided into categories, including the top 10 leaders with excellent business results, the top 10 leaders with excellent human resources, the 10 most creative leaders, the top 10 excellent female leaders and the top 10 young and prosperous leaders.

German retailer gets farmers to raise

Over 20 aquaculturists in the Cuu Long (Mekong) Delta have benefited from a programme meant to teach them about VietGap standards.

Organised by the Department of Fisheries and German retailer Metro Cash & Carry Viet Nam, the programme has helped farmers raise the quality of their produce from the current Metro Requirement to VietGap standards.

To begin with the programme is assisting farmers raising frog, fish, and eel in Can Tho city and Vinh Long Province.

A Metro spokesperson said demand from canteens and restaurants for fish, eel, frog, and shrimp has increased and VietGap is their first priority when choosing a supplier.

The training programme, which ends in December, also hope to help farmers find more partners.

Vietnam beefs up European tourism marketing plan

A conference on Vietnam’s tourism promotion measures from the European market was held in London, the UK on November 2.

Those in attendance included representatives of Vietnam’s diplomatic missions in Europe, Vietnam Airlines, British travel agencies and Vietnamese tour operators who were participating at the World Travel Market (WTM) in London.

At the event, Deputy Minister of Culture, Sports and Tourism Ho Anh Tuan introduced the country’s marketing strategy for the period from 2015 to 2017, saying that Vietnam targets 9 million foreign tourist arrivals by 2020.

Le Dung, head of the Vietnam Airlines representative office in the EU said co-ordination between Vietnam Airlines, the embassies of Vietnam in the EU and travel agencies is very important if the country is to reach the lofty targets.

Huong Pidduck, Director of Vietnam2uk Co. Ltd, suggested that the tourism industry should come up with a simple marketing slogan to attract foreign tourists and organize more promotional events in Europe.

Within the conference, Quang Ninh provincial People’s Committee and the Vietnam Embassy in the UK and Northern Ireland signed a Memorandum of Understanding (MoU) on tourism promotion cooperation and investment attraction.

Int’l Jewellery Fair to sparkle in HCM City

The 23rd edition of the Vietnam International Jewellery Fair (VIJF) to take place from November 5 to 9, is readying to kick off at the Phu Tho Exhibition Centre in Ho Chi Minh City.

At the event, more than 150 dealers will exhibit the finest and most fashionable jewellery from all over the world including household brand names such as SJC, DOJI, PNJ, and SBJ.

Within the event expected to attract as many as 50,000 visitors, many interesting and exciting activities are planned, including buyer and seller meetings, jewellery shows and promotional programmes.

Vietnamese exporters expand US market share

Vietnam registered positive growth of exports to the US in the first 10 months, with country's exports to the US reached US$23.69 billion, a 21.8% year-on-year increase, the Ministry of Industry and Trade reported on November 3.

At a press conference held in the capital city, the ministry said in October alone, Vietnam's export turnover to the US rose by 17.4% over the previous month, reaching US$2.84 billion.

Meanwhile, garments and textiles, shoes, computers and accessories and wood products saw growth rates of more than 10% over the same period last year.

Vietnam has been the second largest exporter to the US after China, accounting for 7% of the country's total imports.

In the first eight months of the year, Vietnam's garment and textile exports to the US increased by 14%. However, aquaculture product exports to the market will be reduced because of hindrances in Vietnamese product quality.

The retail selling price of petroleum will likely be reduced in the next few days, Deputy Industry and Trade Minister Do Thang Hai announced at the press conference.

The domestic petrol price was previously reduced eight times this year by a cumulative amount of VND3,300 (15US cents) per litre. The latest decrease which took place on October 23 brought down the price to VND22,340 (US$1.1) per litre.

Fuel traders are allowed to unilaterally raise prices if the rate of increase is below 3% of current prices, but they must report the increase to the ministries of Finance and Industry and Trade.

If the increase is between three to 7%, petrol wholesalers are required to submit documents on price fluctuations of elements which make up petrol prices, as well as anticipated increases, to the two ministries for review and approval.

Fuel price increases exceeding 7%, or increases with a significant impact on national socio-economic development and the people's living standards, must be reported to the Prime Minister for review and approval.

The Ministry of Industry and Trade (MoIT) is responsible for providing updates on world fuel prices, including base and retail prices, and the use of the fuel price valorisation fund on its website.

"Based on the world petrol market, the two ministries will reduce the retail price as soon as possible to ensure benefits to people and businesses, " the deputy minister said.

Petroleum traders said they made profits of VND1,087 per liter from the downward trend in the world market.

The country so far has 19 petrol traders, and the number will be increased to supplement petrol supply and increase competitiveness.

Also, Duong Quang Thanh, deputy general director of the Electricity of Vietnam (EVN), said his company would ensure sufficient power supply for the entire country during the dry season as well as the entire year of 2015.

Thanh revealed that EVN has put the second turbine of Bung River Hydropower Plant into operation, adding 1,170MW to the national power grid, and has completed 33 power line constructions to the South to ensure power supply for the region.

EVN has asked the MoIT to assign other power suppliers to mobilise electricity, he added.

MoIT figures showed that the country's total power production in the first 10 months of the year increased by 12% to 115.67 billion kWh.

During that period, Vietnam imported from China 1.7 billion kWh of electricity, a 41% year-on-year reduction.

For the entire 2014, the country aims to import from China 2.4 billion kWh of electricity, a 26% year-on-year reduction.

Industrial production goes up in 10 months

Vietnam’s index of industrial production (IIP) for January-October increased by 6.9% over the same period last year, fuelled by growth in almost areas, reported the Ministry of Industry and Trade at a televised conference in Hanoi on November 3.

The October IIP growth rate was up 4.6% and 7.9% on a monthly and yearly basis, respectively.

The ministry’s report also showed that during the ten-month period, the mining, processing-engineering and water and sewage treatment sectors expanded by 0.7%, 8.4% and 6.4%.

Meanwhile, higher growth was also seen in electricity production and distribution, fisheries processing and preservation, textile and footwear sectors, ranging from 11.5% to 20.8%.

Deputy General Director of the Vietnam National Oil and Gas Group (PVN), Nguyen Hung Dung, said the sector generated VND626 trillion (US$29 billion), meeting 90 percent of its annual target so far.

Coal productivity reached 28.6 million tonnes, accounting for 84% of the annual target, General Director of the Vietnam National Coal and Mineral Industries Group Dang Thanh Hai reported.

He added that coal consumption hit 29.2 million tonnes, up by 8% in the reviewed period, with domestic consumption accounting for 24.3 million tonnes, up by 29%.

The chemical fertiliser sector also saw a slight increase in production and a decline in imports, both in quantity and value.

Deputy Minister Nguyen Cam Tu urged the sectors to balance supply and demand, and increase exports while also developing the domestic market.

Korean city showcases export products in Vietnam

About 17 businesses from Bucheon city, the Republic of Korea (RoK) are presenting their prominent export products at an exhibition which opened at Vincom Mega Mall Royal City in Hanoi on November 3.

The 126 square-metre exhibition features a wide range of items including lighting systems, medical endoscope cameras, home appliances, printers, electrical equipment, oil refineries, cosmetics, and Korean ginsengs.

General Director of Vinexad company Nguyen Khac Luan said the event aims to promote the city’s business in Vietnam.

Since Vietnam and the RoK set up diplomatic ties in 1992 and upgraded it to a strategic cooperative partnership five years ago, their relations have developed in a strong, comprehensive and intensive manner, he added.

The RoK is now the second biggest investor, the third largest trade partner, and the second largest donor of official development assistance (ODA) to Vietnam.

Trade turnover between the two countries hit US$25.7 billion in 2013, and is expected to reach US$70 billion in 2020, he noted.

The exhibition will last until November 5.

Business climate for Vietnam’s manufacturing sector improved: HSBC

Business conditions in the Vietnamese manufacturing sector improved slightly in October as output and new orders increased and firms took on extra staff at the fastest rate since January, according to the Purchasing Managers’ Index (PMI) report by the Hong Kong and Shanghai Banking Corporation (HSBC) and Markit Economics.

The report, released on November 3, pointed out that the rate of inflation slowed for the third month in a row, and enterprises were able to pass on cost reductions to their clients by lowering output prices.

Meanwhile, manufacturers in Vietnam saw the amount of new orders increase for the second month running, following a marginal decline in August, although the latest increase was weaker than in September, the report said.

According to experts involved in the report, the number of orders was boosted by export sales that increased rapidly over the last six months.

The report attributes the increase in productivity for the 13 th month running to the increase in orders in October, even though the growth rate in production was minimal.

Increased output requirements were the main driver behind a consecutive monthly rise in employment, the report said, adding that the job creation rate was the fastest so far this year.

This added capacity enabled manufacturers to work through outstanding business, with backlogs of work decreasing for the sixth month in a row, the report said.

Trinh Nguyen, Asia Economist at HSBC, said Vietnam was on a gradual path to economic recovery.

The October PMI shows that the manufacturing sector continues to expand thanks to higher export orders, highlighting the country’s competitiveness in labour-intensive manufacturing, he said.

The employment index grew sharply, a positive sign of manufacturers’ outlook for future demand, he assured.

Untapped potential for recycling industry development

Vietnam has great potential to develop its recycling industry as the current volume of solid waste reaches 30 million tonnes with an annual growth of 7 percent, a recent survey conducted by the Ministry of Industry and Trade concluded.

The survey on the demand for and capacity of environmental services in 20 provinces and cities indicated that the sector required investments of 2.34 trillion VND per year (111.4 million USD) to effectively treat solid waste.

According to the World Bank, there is high potential for recycling industrial solid waste, with 80 percent of waste in some industries being recyclable. As much as 54 billion VND (2.57 million USD) could be saved per year if each production facility in six industries recycled 50 percent of its waste.

There are also promising prospects for other fields, such as pollution prevention and control, technical support services, technological advice, and environmentally friendly equipment and material production, the bank said.

However, the limited capacity and experience of environmental service providers in Vietnam are hindering the development of the industry, together with the lack of preferential policies on investment, tax and interest rates.

At present, the majority of industrial-scale recycling is conducted by small- and medium-sized facilities with out-dated technologies and equipment.

Scientific research on waste recycling in Vietnam remains patchy as most studies focus on daily and rural waste.

In order to stimulate the industry, the country needs to develop suitable mechanisms and policies that increase the involvement of businesses and individuals in environmental waste management, experts said.

It is necessary to create an equal business environment for State-owned and private enterprises, and domestic and foreign enterprises, they added.

Workshop focusses on application of technology in Vietnamese firms

The Central Institute for Economic Management (CIEM) and the University of Copenhagen jointly organised a workshop entitled “Company-level competitiveness and technology in Vietnam : Evidence from a 2013 survey” in Hanoi on November 3.

The survey is part of the 2013-2014 “Research on the business sector” project funded by the Danish International Development Agency.

Addressing the workshop, CIEM deputy director Nguyen Thi Tue Anh highlighted the importance of including measures to increase businesses’ technological capabilities in long-term operational strategies.

On his part, Danish Deputy Ambassador to Vietnam Christian Brix Moller stated that the application of new technologies would help improve the quality of export products, thus enhancing businesses’ global competitiveness.

Participants pointed out the need to enhance cooperation with international partners on technology transfer, such as the Republic of Korea and Japan.

In the meantime, Japanese companies are transferring tuna catching and semi-processing technology to Vietnamese fishermen.

Seminar promotes Vietnam as tourism destination in UK

A seminar to promote Vietnam’s tourism on the European market was organised by the Ministry of Culture, Sports and Tourism and the Vietnamese Embassy in the United Kingdom (UK) on November 2.

The event attracted the participation of representatives of the national flag carrier Vietnam Airlines in the European Union (EU), travel agencies in the UK, and Vietnamese tourism companies participating in the World Travel Market (WTM) expo in the UK.

Representatives from the Ministry introduced their plan for 2015-2017 to promote Vietnam as a tourism destination in Europe, with a focus on organising annual programmes to introduce European holiday-makers to Vietnamese destinations and tourism services.

Embassy representatives said it was essential to make the most of the WTM to promote Vietnam’s sector and establish new partnerships.

Overseas Vietnamese studying in the UK said they would do their utmost to introduce Vietnam’s tourism to international friends by organising cultural and arts events at their universities.

Deputy Minister of Culture, Sports and Tourism Ho Anh Tuan highlighted the role of cooperation between the Ministry, Vietnamese diplomatic agencies, Vietnam Airlines and travel agencies in boosting the sector.

He said the Ministry would soon establish a coordination board to implement the plan with a view to realising the country’s objective of welcoming 9 million international tourists by 2020.

As part of the event, a memorandum of understanding was signed between the People’s Committee of the northern province of Quang Ninh and the Embassy, which aims to support the province’s efforts to promote tourism and attract investments.

648 million USD mobilised through government bonds in October

The Hanoi Stock Exchange (HNX) sold a total of 13.8 trillion VND (648.9 million USD) worth of government bonds during October an 8 percent increase compared to September.

Of the amount, some 12.7 trillion VND (597.2 million USD) was raised for the State Treasury and 1.1 trillion VND (51.7 million USD) for the central city of Da Nang’s People’s Committee.

The annual interest rates ranged from 4.8 – 5.6 percent for 5-year bonds, from 6.19 – 6.34 percent for 10-year bonds, and from 6.96 – 7.05 percent for 15-year bonds. The rates declined by between 0.8 to 1 percent in all terms compared to the figures recorded last month.

In the secondary market, the number of government bonds in outright transactions amounted to 551 million units, which were equivalent to 61.2 trillion VND (2.88 billion USD). Meanwhile, 249 million units worth 26.1 trillion VND (1.23 billion USD) were traded in repurchase transactions.

On November 1, the government issued a resolution exempting corporate and personal income taxes on incomes generated by Vietnamese government bonds issued on foreign markets in 2014.

Mekong Delta: bad debt at 3 percent a year

The bad debt ratio in the Mekong Delta region has been kept at around three percent a year during the last three year, according to the Credit Department of the State Bank (SBV).

The department’s Deputy Chief Vo Minh Tuan said the Mekong Delta region also saw a credit growth higher than the average level of the whole system.

As of September 30 this year, total outstanding loans of credit institutions in the region stood at 331.5 trillion VND (15.7 billion USD), up 8.49 percent from the end of last year and accounting for 9 percent of the national banking system’s lending. Statistics also showed nearly 70 percent of the loans were short-term.

In the same period, capital mobilization in the region amounted to 268 trillion VND (12.7 billion USD), a 13.88 percent increase compared to the level at the end of 2013.

The Credit Department said locally-mobilised capital could meet 81.82 percent of the total demand for the region’s social economic development, as against 66.4 percent in 2011.

Investment in agriculture and rural areas has increased significantly in recent years with outstanding loans totalling 160 trillion VND (7.6 billion USD) by September 30. The figure showed a 7.5 percent rise compared to the end of 2013, accounting for 22 percent of total loans in this field nationwide.

Supply-demand connectivity programme bears fruit

Enterprises in Ho Chi Minh City and other provinces have clinched more than 430 contracts with a total value of over 19 trillion VND since the city launched a supply-demand connectivity programme nearly three years ago, the Saigon Times Daily reported.

Le Ngoc Dao, Deputy Director of the HCM City Department of Industry and Trade, unveiled the impressive numbers at a recent meeting with industry and trade leaders.

The third conference of the programme took place on October 31 with the participation of more than 1,100 enterprises from 38 cities and provinces nationwide.

To effectively implement the trade cooperation programme between HCM City and other localities in the southeastern and southwestern regions in 2011-2015, the HCM City Department of Industry and Trade kicked off the first connectivity programme in December 2012 to help localities sell farm produce, processed food, and specialties to distributors and retailers in HCM City.

The meeting that year attracted 198 enterprises from 14 provinces and cities and 43 deals were struck. As a result, many special products like pia cake of Tan Hue Vien in Soc Trang province, gourd-shaped pomelo, gold bullion-shaped watermelon, Cao Lanh mango in Dong Thap province entered the distribution systems of Co.opmart, Citimart, Big C and Lotte Mart, among others in the city.

One year later, the programme was expanded and the number of participating businesses rose to 347. Not only enterprises of 20 southern provinces but also those of Bac Giang, Bac Kan and Quang Ninh provinces in the north joined the programme and inked 394 trade deals with supermarket and restaurant chains in HCM City.

The programme enabled enterprises from other provinces to find outlets for their products in HCM City while partners here in the city were able to expand their distribution networks to other parts of the country to increase sales.

In addition, enterprises in HCM City joined the price stabilisation programmes in other provinces like Vinatexmart and Co.opmart.

Talking about the fruit of the supply-demand connectivity programme, Ta Minh Son, Director of Tu Son Supermarket in An Giang province, said his supermarket has benefited much from the programme.

Son added that of 100,000 products at the supermarket, 70 percent are supplied by partners in HCM City and annual growth at the supermarket is 30-35 percent.

With good results in previous years, the scale of this year’s programme is bigger with enterprises coming from 38 localities nationwide, including HCM City, 20 in the southern region and 17 in the northern, central and Central Highlands regions.

Thua Thien-Hue adopts 1.3 billion USD plan on industry development

The central province of Thua Thien Hue has adopted a revised industrial development plan to 2020 with a total investment of almost 28 trillion VND (approximately 1.3 billion USD), focusing on sectors with competitive edges such as food processing, textile and paper making.

The province aims to source the investment mainly from foreign investment and joint-venture capital (three quarters of the amount). Around 23 percent of the capital will be raised from local enterprises and bank loans and only 2 percent will come from the State budget.

The Director of the provincial Department of Industry and Trade, Vo Phi Hung, said Thua Thien-Hue is targeting an annual growth rate of 14 – 14.5 percent for its key industries, including agro-fishery-forestry product processing, food and drinks, electrics and electronics, construction materials and handicrafts and small industries.

At the same time, the province will strive to become a regional and national hub for the garment- textile and textile’s support industries, which currently make up 42.78 percent of its industrial output and 78 percent of total export value, he added.

The new industrial development plan has added weaving and dyeing plants with the aim of establishing a complete production chain in the industry from fibre making to weaving and dyeing, thus enhancing manufacturing efficiency and cutting costs for the textile-garment sector.

Besides, paper and paper pulp plants will be built to reduce the export of raw materials like wood and foster forest plantations.

Dong Nai enjoys 300 mln USD trade surplus in 10 months

The southern province of Dong Nai recorded a trade surplus of nearly 300 million USD during the first ten months of 2014, according to the provincial Industry and Trade Department.

The province earned 10.3 billion USD from exports in the period, while spending over 10 billion USD on imports.

Director of the department Le Van Danh said the locality mainly shipped garment, footwear, fibre, chemicals, handicrafts, coffee, pepper, cashew nuts and woodwork to the US, Japan, the Republic of Korea, Thailand, Taiwan, Hong Kong, Canada and the UK.

Meanwhile, it bought garment and footwear materials, machines and equipment from Asian, African and American nations.

Danh also said that the trade surplus will increase in the future thanks to investment in support industries which helps ease dependence on imports.

Dong Nai aims for 1 billion USD in trade surplus in 2015, with its total export of 14.4 billion USD, up 14 percent, and import of 13.2 billion USD, a 9 percent rise.

Vietnam recorded consecutive trade surpluses in the first 10 months of 2014, with the total now standing at 1.87 billion USD, according to the General Statistics Office (GSO).

The nation's exports earned 123.75 billion USD, a 13.4-percent year-on-year increase, and its imports reached more than 121.2 billion USD, up 11.2 percent.-

EVN vows sufficient power supply in dry season

Deputy General Director of the Electricity of Vietnam (EVN) Duong Quang Thanh said his company would ensure sufficient power supply for the entire country during the dry season as well as the entire year of 2015.

Thanh revealed that EVN has put the second turbine of Bung River Hydropower Plant into operation, adding 1,170MW to the national power grid, and has completed 33 power line constructions to the South to ensure power supply for the region.

EVN has asked the MoIT to assign other power suppliers to mobilise electricity, he added.

MoIT figures showed that the country's total power production in the first 10 months of the year increased by 12 percent to 115.67 billion kWh.

During that period, Vietnam imported from China 1.7 billion kWh of electricity, a 41-percent year-on-year reduction.

For the entire 2014, the country aims to import from China 2.4 billion kWh of electricity, a 26-percent year-on-year reduction.

Minister pushes Long Thanh Airport project

In the most recent report to the government, the minister of transport explained the need for a new airport for Vietnam's largest city.

According to the minister, Tan Son Nhat is a joint civilian and military airport and area for civilian flights only covers a total of 590ha. In addition, he said, the distance between runways does not meet ICAO's requirements for the operation of two aircraft at the same time.

The airport was designed to have a maximum capacity of 25 million passengers per year, but statistics show that demand is growing. In the first nine months of this year alone, the number of passengers increased by 11%, compared to the same period last year, and the airport may reach its full capacity by 2016. The ministry predicts that by 2050, Tan Son Nhat would have to serve 40.4 million passengers.

If the expansion proposal were to be realised, government would have to clear ground, compensating 140,000 households in the process. The expansion would cost an USD9.1 billion, much higher than the amount of the first phase of Long Thanh Airport. Any expansion of Tan Son Nhat would also require synchronization of systems and equipment.

Tan Son Nhat is also located somewhat near the city centre, and is surrounded by residential districts.

Some other experts have suggested that a nearby military airport, Bien Hoa, could be expanded to serve HCM City's growing demand. However, the minister disagrees, saying that Bien Hoa is a key military facility. He also pointed out that, if Bien Hoa were expanded, it would cost an estimated USD7.5 billion and the clearance of 6,000 households as a result of the dioxin-contaminated areas.

The minister also seemed to rule out the option of other regional airports taking on the overload, such as Can Tho, Lien Khuong and Cam Ranh. He said that each airport should serve its particular market.

The report underlined the urgency of construction on Long Thanh Airport because the project would take 10 years to complete.

Vietnam’s FDI attraction policies may harm state budget

A proposal from the Ministry of Finance to attract large FDI projects could result in a loss of VND2 trillion to the state budget.

According to the recent announcement from the Ministry of Science and Technology, Vietnam now has only 80 recognised high-tech firms. As a result, the ministry has proposed tax incentives to high-tech companies that may result in less for the state budget.

High-tech companies are commonly offered a preferential corporate tax rate of 10% for 15 years, tax exemption for four years and a 50% reduction of taxes for for the following nine years.

Large-scale companies, with registered capital of over VND6 trillion, can benefit from a 10% corporate tax policies for 30 years.

However, studies by the Ministry of Finance showed that these regulations may not be working, as rapidly-changing technology outpaces the tax code, which recognises companies using outdated technology as high-tech.

In order to be recognised as high-tech, a company's labour force must also consist of at least 5% university graduates, along with various revenue requirements, which disqualify many firms.

The Ministry of Finance has stated that these requirements are too strict and unfeasible for enterprises in Vietnam. So, the ministry proposed that they should only be applied to large companies that have a registered capital of at least VND12 trillion.

Enterprises that use pioneering technologies, have an annual revenue of over VND20 trillion or employ more than 6,000 workers would benefit from a corporate tax rate of 10% for 30 years instead of 15, the ministry proposed.

According to the latest estimates, Vietnam now has 123 FDI projects with a combined registered capital of over VND6 trillion and 63 FDI projects with a registered capital of VND12 trillion.

It is also estimated that, if the Ministry of Finance’s proposal is approved, it would mean that the state budget would lose around VND18 trillion in tax revenues.

 

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

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