Cassava exports to Japan up 26%

The country exported 3.05 million tonnes of cassava, worth US$951 million, in the first eight months of the year.

This amounts to 26% and 29% year-on-year increases in terms of quantity and value, respectively.

Statistics from the agriculture and rural development ministry showed that China was still the largest cassava importer, accounting for 89% of the total exports, posting a year-on-year increase of 53% and 46% in quantity and value, respectively.

However, the volume of exports to Japan and Taiwan grew 10 times and 64 times, respectively, posting the highest level of growth.

Nghiem Minh Tien, vice-chairman of the Vietnam Cassava Association, told Hai Quan (Customs) newspaper that the average export price of cassava remained about US$420 to US$430 per tonne and was relatively stable.

In the past few years, Vietnam's cassava exports faced fierce competition from Thailand as that country provided subsidies to the product. However, that policy was scrapped as Thailand's baht was devalued against US dollar, making Vietnam's cassava again competitive.

He said 80% of the country's total cassava exports this year would be shipped to China, adding that too much dependence on the market has been the shortcoming of the sector.

In addition, low productivity will also make the sector less competitive. The cassava sector has an average productivity of 17.6 tonnes per hectares, which needs to be increased to 25 tonnes per hectares.

Businesses should link the areas cultivating the raw material to production to increase productivity, Tien said.

Vietnamese cassava is exported to several markets such as Japan, the Republic of Korea, the Middle East and Malaysia.

In the future, Vietnam plans to head to the United States and the European Union.

The vice-chairman said the export potential of cassava was large and the sector aimed for an export turnover of US$2 billion by 2020.

The association has co-operated with the science and technology ministry to build quality standards for cassava cultivation. The standards will follow the criteria of the Food and Agriculture Organisation (FAO) to penetrate strict and demanding markets.

He said the economy has integrated deeply with the world market through free trade agreements that could help the sector as tariffs would not be a barrier.

The association has implemented trade promotion activities to reduce dependence on the Chinese market.

They will co-operate with the Vietnam Chamber of Commerce and Industry to organise an international conference in October to introduce Vietnamese cassava products.

Free trade to bolster Vietnam-France business

Trade and investment between Vietnam and France will benefit from the Vietnam-EU Free Trade Agreement (VEFTA), thanks to the market that will open up and the cuts in most taxes, according to Nguyen Canh Cuong, Trade Consellor at the Vietnamese Embassy in France.

Cuong said over the past years, the value of Vietnam's exports to France registered an average annual growth of 5-7% to 2-2.5 billion euros (US$2.26-2.825 billion) a year, while its imports from the European country reached about one billion euros (US$1.13 billion).

Key products exported from Vietnam included footwear, garments, wood products, handicrafts and seafood products. Vietnam's exports of cell phones shipped to France added a particularly big component to this figure.

However, most of the key export products garner one to two percent of France's market, excluding local footwear products that have accounted for 10% of the French market.

Therefore, the market share of Vietnamese traditional export products in France had the potential to expand further once the FTA was signed, Cuong said.

The VEFTA was expected to help reduce many taxes that the EU imposes on Vietnam's products to zero, leading to improvement in the competitive ability of Vietnamese exports in French markets as well as other EU countries, the official said.

He said France's demand for seafood and agricultural products was big. Exports of such products are expected to increase further in future because Vietnamese seafood products' exports are already as per strict standards when it comes to quality and food safety norms of European markets.

However, many good quality Vietnamese products now face a fierce competition from similar products made by several countries enjoying the EU's trade incentives.

For instance, Vietnam is the world's second largest rice exporter, but its rice cannot compete with Thai rice in terms of price in France as taxes imposed on Thai rice are much lower than those levied on Vietnamese rice.

The FTA would create favourable conditions for importing more goods from France as well as other EU countries that Vietnam's market needs, including beef and apples from France.

Cuong said the VEFTA would provide a good opportunity for Vietnam to speed up its economic restructuring efficiently, focusing on advantageous products and reducing high production costs.

MPI honours Japan Trade Counsellor

Planning and Investment Deputy Minister Nguyen Chi Dung on September 4 awarded outgoing Japan Embassy Counsellor Michio Daito the department’s highest medal at a farewell ceremony.

“Japan is Vietnam's top trade and investment partner and the contribution of Trade Counsellor Daito was instrumental to this success,” Deputy Minister Dung said in presenting the award.

Trade Counsellor Daito was emotional in his acceptance speech saying, "I will always cherish my four-year tenure in Vietnam, it was a great time and extremely important to me."

Daito was presented the medal with the insignia ‘For the Cause of the Planning and Investment’ to honour his dedicated service and contributions to the special friendship between Vietnam and Japan.

Smart cities to shape Vietnam’s future

Our cities and the way we work are changing as the rural-urban migration becomes a fact of life, said Vietnam Fatherland Front (VFF) Central Committee President Nguyen Thien Nhan.

He made the comment at a recent conference in Hanoi assessing the future of cities in Vietnam utilizing smart city or alternative information technology (IT) solutions for monitoring and managing municipality resources.

He said he fully realizes the phrase ‘smart city’ has become a buzzword as the smart label has been attached to all sorts of technology such as ’smart phones’  ‘smart homes’ and ‘smart classrooms’.

Though many believe the smart city label is merely empty hype, it should be understood within the proper context.

Governmental agencies throughout Vietnam have in the past been relatively successful in using IT applications in a wide variety of areas and there is no reason to believe they would not be just as effective utilizing smart city IT solutions.

Nhan said he is also well aware that most critics say smart city projects have been conceived top down, with the application as a starting point so they don’t really assess and address the specific problems of any particular municipality.

Urban problems clearly aren’t caused by technology nor will they be resolved by technology and no one in the government is confused by the sales pitch of IT company sales personnel, said Nhan.

Ultimately political will, administrative skill and participation of citizens are the necessary ingredients to solving the ailments of urban Vietnam and building prosperous cities.

But that is not to say IT technology can’t be beneficial.

Before – smart cities technology – can be developed the country first needs to resolve a few issues related to population growth and environmental issues along with health, traffic and housing hurdles, Nhan underscored.

Factors working in the nation’s favour are the fact that the percentage of people using the internet was 43.8% last year, 9% higher than the Asian average and 1.6% higher than the world's level.

It’s a somewhat nebulous point but it does show that people in the country are relatively computer literate and receptive to the use of advanced technologies in their everyday lives.

The country has also used IT to manage governmental and social affairs rather extensively, without any significant problems, so though smart cities is no panacea he feel’s comfortable it would be a step in the right direction.

Many other countries around the globe have made their cities ‘smart’ including the Republic of Korea (RoK) and many of the European Union (EU) countries so the technology does have a proven track record.

Most notably, last year Singapore and India unveiled they would utilize the smart cities solutions and representatives from both nations have said they stand ready to share their experiences.

As well representatives from Japan and the US have pledged their support to Vietnam— so it appears to be the inevitable path that we as a nation will take.

CityLand CEO becomes fourth largest Vinatex shareholder

Bui Manh Hung, CEO of CityLand Limited Company, has become the fourth largest shareholder of the Vietnam National Textile and Garment Group (Vinatex).

The group announced on September 1 that Hung was holding 30 million Vinatex shares, or a six per cent of stake in the group.

The Hanoi-based Vinatex is the country's largest textile company, which accounts for 18 per cent of Viet Nam's textile production.

Currently, the Ministry of Industry and Trade, representing the state, holds 53.49 per cent, the Viet Nam Investment Development Group holds 14 per cent and local property developer Vingroup holds 10 per cent.

In 2014, Vinatex sold 24 per cent of its stake to the public during its IPO auction. The Vietnam Investment Development Group and Vingroup were picked as the state textile major's strategic investors.

Some local media reported that it was likely that Hung bought the shares in the company's IPO last year when the average price of the share was VND11,000 ($0.45) each.

For the first half of 2015, Vinatex reached a net revenue of VND7.212 trillion ($320.3 million), an increase of 34 per cent over the same term last year. The profit after tax reached VND229 billion ($10.1 million), 20 per cent higher than the same term last year.

The CityLand Ltd Company has a charter capital of over VND350 billion ($15.54 million). It owns real estate projects in HCM City and in Ha Noi.

These include CityLand Park Hills, CityLand Centre Hills in Go Vap District, and Binh Trung Dong Residential Centre in District No2 in HCM City, in addition to CityLand Luxury Land and CityLand Son Dong in Ha Noi.

GE turbines selected for PetroVietnam’s new coal-fired power plant

US industrial giant General Electric (GE) just announces it will supply two sets of high-efficiency steam turbines and generators to the EPC consortium consisted of Russia-based OJSC Power Machines and PetroVietnam Technical Services Corporation for the new Long Phu 1 coal-fired thermal power plant in Soc Trang, a province in the Mekong Delta known for its Khmer culture and community.

PetroVietnam is the owner of the new plant.

“Long Phu 1 power plant will serve the growing demand in southern Vietnam and help improve transmission efficiencies for the whole of Vietnam by locating much needed power closer to the demand,” said Nguyen Tien Vinh, head of Power Division, PetroVietnam.

“Working with GE, we look forward to the implementation of this project and ongoing success,” Vinh added.

With energy demands rising in Vietnam, coal remains a critical part of the country’s current and future energy mix.

Long Phu 1 is one of the first coal-fired power plants in Vietnam to use supercritical technology for higher efficiency, more environmentally friendly power generation as compared to conventional subcritical boiler technology.

The plant is one of three power stations planned for the Long Phu Power Centre which will use two GE D850 steam turbines, configured to enhance the construction timeline with pre-assembled sections and installation features that shorten erection time while maintaining GE-tested quality standards.

Once online, the plant can generate 1,200 megawatts (MW), the equivalent power needed to supply approximately four million Vietnamese homes.

“Power development in Vietnam remains highly dependent on coal. By using GE’s supercritical steam turbine technology, Long Phu 1 will demonstrate how efficiently coal can be used as part of an environmentally sound energy mix,” said Vic Abate, president & CEO, Power Generation Products at GE Power & Water.

GE is expected to start delivery of the first set of steam turbines and generators to the site in late 2016. The plant is scheduled to be fully online toward the end of 2018.

The Vietnam Oil and Gas Group (PetroVietnam) is a leading economic group in Vietnam today, making an annual growth rate averaging 15 – 20 per cent, and contributing 25 – 30 per cent to the state budget revenue.

Power Machines OJSC is the largest power plant engineering company in Russia with an international experience in the field of design, manufacture and complete delivery of the equipment for thermal, nuclear, hydraulic and gas-turbine power plants.

Ford Viet Nam recalls Fiesta to repair faults

Ford Viet Nam is recalling 1,189 Fiesta vehicles for the inspection and repair of faults in the cars' power system.

The US automaker said the fault occurred as a result of direct, continuous friction between the wires of the power system and a bowl hanging from the gearbox.

Over a significant length of time, this friction can result in a short circuit of the power cables, damaging the electrical system of the vehicle. This failure would turn on the warning lights on the dashboard.

The free replacement under the recall programme will be applied for Ford Fiesta units produced from July 24, 2013, to August 30, 2014. Imported vehicles will also be eligible for the free replacement of parts under the programme.

According to the Vietnam Automobile Manufacturers' Association, the US firm sold 438 Fiesta units in the first seven months of this year in Viet Nam.

Nagasaki, Quang Nam to boost co-operation, investment

The central Quang Nam Province and Nagasaki, Japan, have signed a Memorandum of Understanding on co-operation, education and investment, the provincial secretariat announced on Monday.

Governor of Nagasaki Houdou Nakamura said he anticipates further co-operation in the fields of human resource education, investment and heritage preservation and more exchanges on culture and visits between the two sides.

The two sides also discussed the recruitment of workers from Quang Nam for the medical sector in Nagasaki in the coming years.

A delegation of 80 businesses from Nagasaki also took part in the visit to the province, seeking investment opportunities.

Last year, the central province also organised an investment promotion programme in Nagasaki, aimed at increasing Japanese investment in the province in the coming years.

The central province has attracted six investment projects from Japan worth US$52 million, of which $36.6 million came from Vina-Mazda automobile maker.

Japan has provided $366 million of the Official Development Assistance funds for the province's development projects.

Can Tho's IZs register investment of $1.96 billion

Industrial zones (IZs) in the Mekong Delta city of Can Tho have 220 projects in operation, with total registered investment capital of some US$1.96 billion.

The management board of the local export processing and industrial zones reported the figures, adding that the disbursed capital amounts to nearly 45 per cent of the registered value, reaching $866.16 million.

During the first eight months of this year, enterprises in Can Tho's IZs posted a combined industrial production value of $824.6 million and a total trade and service revenue of $209.7 million.

The companies obtained $1.03 billion in total revenue, with some $385 million coming from exports during the period.

The management board said the city was speeding up site clearance, administrative reforms and infrastructure and human resource development to attract further investment.

Can Tho hosts eight IZs: Tra Noc 1, Tra Noc 2, Hung Phu 1 and Hung Phu 2A, as well as Hung Phu 2B, Thot Not, O Mon and Bac O Mon. The IZs are located along the Hau river, and the projects here employ more than 30,700 workers.

Can Tho is nationally considered a motivating force for the development of the Mekong Delta. The country has located key projects here, such as the Can Tho international airport, the Cai Cui port and the O Mon thermo-electricity centre.

Telephone exports hit $20 billion

Viet Nam's exports of telephones and their components hit nearly US$20 billion, a year-on-year increase of 31.1 per cent, in the first eight months this year.

Viet Nam's exports of telephones and their components hit nearly US$20 billion, a year-on-year increase of 31.1 per cent, in the first eight months this year.

Exports of electronics and computers and their components reached $9.9 billion, increasing by 51.8 per cent from a year ago, according to the General Statistics Office under the Ministry of Planning and Investment.

Samsung remains the largest telephone exporter.

Viet Nam's largest telephone and related components importers include China and South Korea.

In terms of import revenue for the last eight months, the import revenue of electronics and computers and related components was $15.1 billion, up 35.3 per cent.

Meanwhile, that of telephones and related components was $7.1 billion, up 36.6 per cent.

Vietnam ministry introduces draft decree to cut time limits for land paperwork

People in Vietnam may take less time to carry out many land-related administrative procedures in the coming time, as a draft government decree on land use right paperwork is under consideration now.

The Ministry of Natural Resources and Environment is collecting feedback from other agencies and the public about a draft decree that aims to save time in completing formalities when it comes to land use rights.

The time cap for granting land use right certificates or documents certifying the ownership of houses and other assets attached to land would be 15 working days, which is five days less than the current duration.

The draft decree sets a time limit of 10 working days – five days sooner than the current process – for each of the following formalities: registration of changes to land and property associated with it in case of winning an auction of land use rights; settlement of land-related disputes, complaints or accusations; distrainment for auctioning land use rights and property attached to land to enforce court verdicts; and some other circumstances.

A time limit of 15 business days, or a reduction of five days, is proposed for procedures to consolidate or separate land plots, and for formalities to register land assigned by the state for management.

In respect of the extension of land use terms, the duration for procedures thereof will decrease from the current 15 days to 10 days at most, the draft decree says.  

A time cap of five business days, or a reduction of five days, is set for changing land use right certificates or documents certifying the ownership of assets attached to land in the name of a spouse (husband or wife) into other certificates in the name of both the husband and wife.

As for the procedures for shifting from leasing a land plot with annual rental payment to leasing the same land with one-time lump sum payment, the time limit would be 15 days, or a reduction of 15 days compared to the current duration.

Regarding making changes to house ownership certificates or certificates of the ownership of construction works, the new time limit is set to be seven business days, three days shorter than the current process.

Notably, the process of re-granting certificates of house ownership or certificates of the ownership of construction works would be cut by as many as 20 days to no more than 10 days.

The draft decree also specifies many other cuts in time limits related to other land administrative procedures.

The Ministry of Natural Resources and Environment said it will pool opinions about the draft decree until October 19 before making improvements to it and submitting the document to the central government for approval.

Heesung signs deal for Hai Phong factory

South Korea’s Heesung Electronics has recently signed an in-principle agreement with the KinhBac City Development Holding Corporation (KBC) and the Saigon - Hai Phong Industrial Park Corporation (SHP) to sublease and build a factory in northern Hai Phong city.

Under the VND250 billion ($11.1 million) contract, Heesung Electronics will lease 13.86 ha of land at the Trang Due Industrial Park to develop its LED light and electronics production factory.

With total investment of $150 million, the factory, which is scheduled to begin operations in May next year, is expected to earn annual revenue of $3 billion and create 3,700 jobs.

Heesung was granted an investment license for the factory in June. It also has a number of factories elsewhere around the world, including three in South Korea, three in China, and one in both Poland and Egypt.

Since the beginning of this year the Trang Due IP has attracted about $297 million in investment, including the Heesung Electronics project.

VietnamWorks' Tech Insider Expo for Sept 5

More than 3,000 professionals in IT, 40 technology companies, and key speakers in the industry will gather together at the Tech Insider Expo at Forever Mark, 614 Lac Long Quan in Hanoi’s Tay Ho district on September 5.

Organized by online recruitment company VietnamWorks, the expo will feature seminars led by international experts on technology topics of current interest.

Vietnamese techies will have the opportunity to learn from experts such as Mr. Dan Toma, Innovator, Professional Coach & Mentor at VietnamWorks, about the continuous deployment of mobile applications, as well as Mr. Chris Shayan, Head of Engineering at VietnamWorks, about the greatest challenges for new product development in Vietnam and how to overcome them with clear focus and vision.

Mr. Nguyen Ho Phi Long, an expert at Microsoft and VMWare, and Mr. Nguyen Duy Son, CEO of HorusGlass, will discuss virtual reality technology and the future of the technology in Vietnam. HorusGlass is the first virtual reality product developed entirely by a Vietnamese team.

Participants can interact directly with the speakers to learn more about these latest hot tech trends.

The expo will also feature product exhibitions and employment opportunities with famous technology companies in Vietnam.

Interflour picks up Da Nang mill

The Interflour Group, owned by Indonesian billionaire Anthony Salim, has purchased a flour mill in Da Nang with the aim of expanding its network of mills in Southeast Asia.

According to Mr. Greg Harvey, CEO of the Interflour Group, the Da Nang facility is relatively small with a production capacity of 220 tons a day but is an important part of the Group’s plans to become one of the world’s five largest flour millers by 2018.

There was also capacity to expand on the 3 ha site, he added, which is close to a port. Interflour will use barges to transport wheat to Da Nang from its port facilities at Cai Mep near Ho Chi Minh City, which include the largest mill in Vietnam and a malt plant set to start production early in 2017.

Although the value of the buy was not officially disclosed, industry rivals believe Foodinco may have sold the mill for a bargain $4 million.

Interflour ranks about 15th on the list of the world’s largest flour millers. Its aim is to crash into the Top 5 by boosting production to 10,000 tons a day.

Prudential kicks off customer call center

On August 31 Prudential Vietnam officially opened a free 24/7 customer service call center, at 1800 1247, to serve increasing demand from customers.

Callers can resolve all matters relating to insurance services with the call center or, alternatively, call (08) 3948 1388 between 9am and 8pm.

“We pay great attention to continuing to improve customer satisfaction and their experience in using our services,” said Mr. Wilf Blackburn, General Director of Prudential Vietnam. “The call center makes Prudential even closer and friendlier to customers, where they can receive the information they need immediately and resolve any problems in making their future financial plans. Prudential accompanies Vietnamese people on the way to a better life and prosperity.”

The call center has been operating a trial basis since July 9 and has received around 30,000 calls to date.  

NFSC notes pros and cons for stock market

The National Financial Supervisory Commission (NFSC) has issued its economic review for the first eight months of the year.

While the report identifies some difficulties facing Vietnam’s stock market it also notes reasons for believing it will recover.

The VN-Index closed on August 27 at 545.89 points, 12 per cent lower than at the end of July, while the HNX fell around 10 per cent. Foreign investors sold some $11.7 million worth of shares since the beginning of August.

The NFSC said the decline in the stock market is due to both internal and external factors. Internal factors include foreign investors selling petroleum company stocks such as PVD and GAS due to crude oil prices tumbling to $32-$35 a barrel. The VND/USD exchange rate also increased almost 3 per cent in August. The market decline makes many investors sell, especially those using margin calls, which only exacerbates the situation.

External factors include the Dow Jones and S&P 500 in the US falling 10 per cent from their peak in May. The MSCI, which gauges global stock market activity, also fell 17 per cent since the beginning of the year and 27 per cent against the same period last year. Moreover, the withdrawal of capital from emerging markets saw Exchange-Traded Funds (ETFs) be short of capital, with ETF Vietnam Market Vector seeing $18 million withdrawn since the beginning of August.

There are also factors indicating recovery in the stock market, however, with basic economic and market factors being in good stead. Vietnam has balanced trade with most significant partners and is not overly influenced by movements in the way other emerging economies may be. Revenue of listed companies in the first half was positive, with the average P/E ratio staying at around 10.6. Policies to encourage the stock market are being issued as planned.

The NFSC estimates the Renminbi fluctuating by + 6.3 per cent/ -6.5 per cent will not have too much of a direct effect on Vietnam’s money market or economy.

Monthly government bond trading down 50%

Auctions of government bonds in the primary market proceeded as planned in August but results were down significantly against July.

The Hanoi Stock Exchange held 30 sessions that mobilized over VND7.83 trillion ($348.2 million), a decline of 49.9 per cent compared with July. The State Treasury mobilized VND4.2 trillion ($186.77 million), the Vietnam Bank for Social Policies (VBSP) VND1.3 trillion ($57.81 million), the Vietnam Development Bank (VDB) VND329 billion ($14.63 million), and Hanoi People’s Committee VND2 trillion ($88.94 million).

The winning rate on three-year bonds was from 6.25 to 6.30 per cent per annum, 6.4 to 7.20 per cent per annum on five-year bonds, and 7.65 to 8 per cent per annum on 15-year bonds. Compared to July the three-year bond rate increased around 0.3 per cent per annum while the five-year and 15-year rate remained the same.

In the secondary market, total trading during August reached 430 million bonds worth VND46.2 trillion ($2.05 billion), an increase of 34.3 per cent against July. Total repos trading stood at 208 billion bonds worth VND20.8 trillion ($924.97 million), a decline of 29.3 per cent against July.

In the secondary market for Treasury bills in August, total trading reached 7.5 million worth VND737 billion ($32.77 million). There was no repos trading for Treasury bills during the month.

HBC wins $17 million HCMC villa project

The Hoa Binh Construction and Real Estate Corporation (HBC) announced on September 3 that it had won the contract to build all 29 villas at the Holm Residences project in Ho Chi Minh City’s District 2. The Sapphire Joint Stock Company is the project investor.

Total capital is VND382 billion ($16.9 million) and the project is expected to be completed in 12 months. The villas are located on an area of 2.7 ha, with 200 meters fronting the Saigon River. They are designed in three types: riverside villa, pool villa, and garden villa.

HBC is responsible for building the villas and the M&E Group will complete the décor and infrastructure.

Founded in 1987, HBC has 6,000 employees and has contributed to completing 80 high-rise projects and is currently carrying out approximately 50 projects around the country. It recently won the tender for construction and equipment installation at the International Terminal 2 - Tan Son Nhat International Airport Expansion Project and the tender for the construction of the entire structure, architecture and M&E packages for the Office Building Project - Saigon South Office 1 in District 1, Ho Chi Minh City.

The Sapphire Joint Stock Company is the investor of luxurious housing projects in commercial centers in Ho Chi Minh City, such as City Garden, Center Point, and President Place.

US$284 mln proposed for Cai Mep-Thi Vai passage dredging project

The Vietnam Marine Administration has proposed the Ministry of Transport to invest VND6,387 billion (US$284 million) in a project to dredge Cai Mep-Thi Vai passage in the southern provinces of Ba Ria-Vung Tau, Dong Nai and Ho Chi Minh City.

The capital will be mobilized from the state budget and some other sources, it suggested.

According to the administration, studies for the last 30 years have showed that the 49 kilometer passage in Cai Mep-Thi Vai River is located in an area advantageous for the development of seaports.

The project will conduct an overall study on marine safety measures and effective exploitation of the passage’s potentials, and map out a development plan and upgrading route for it.

According to the proposal, the passage would be dredged to permit vessels with over 100,000 DWT to enter Cai Mep-Thi Vai seaport, 60,000 DWT ships to land at ports in My Xuan-Phuoc An area, and 30,000 DWT to reach ports in Go Dau area.

Cai Mep-Thi Vai Passage is located in Tan Thanh district of Ba Ria-Vung Tau, Long Thanh and Phuoc An in Dong Nai, and Can Gio in Ho Chi Minh City.

If the Ministry of Transport passes the proposal, the project will be implemented before 2018, the administration says.

Singaporean investor interested in Vietnam's seaport projects

Singapore's Sebrina Holdings Ltd is looking for investment opportunities in seaport infrastructure projects in Vietnam, said Sebrina Holdings CEO Nasrat Muzayyin.

He made the statement at a meeting between Sebrina Holdings Ltd and Vietnam's Ministry of Transport in Hanoi on September 3.

CEO Nasrat Muzayyin said the group has experience in the energy sector, and is interested in transport projects related to energy and seaports in Vietnam.

Vietnamese Minister of Transport Dinh La Thang said transport infrastructure is key to facilitating further development in a range of areas in Vietnam. He pledged to create favourable conditions for investors to access necessary information on transport projects to invest in.

Minister Thang noted that larger seaport projects have already found investors and he suggested the group invest in the Van Phong port in Khanh Hoa central province and other smaller ports.

Sebrina Holdings Ltd is one of the potential strategic investors for Vietnam's Hanel Company Ltd in implementing infrastructure, technology and finance projects in Vietnam.

Businesses find it hard to access support policies

Private enterprises (PEs) have made great contributions to economic growth, job creation and social stability. However, PEs’ contributions are still low compared with their inherent ability, as their strengths have not been fully supported.

It is important to seek ways to support the strong growth of PEs in both quantity and quality, for sustained growth and the endogenous strength of the economy.

While many companies in the same industry only have perfunctory operations, from the beginning of the year, the more than 400 employees of Cosmos Technology Co., Ltd. (Khai Quang Industrial Zone, Vinh Yen city, Vinh Phuc province), a unit specialising in production and processing of precision mechanical components, still work two shifts a day. The company recorded total revenue of VND250 billion in the first quarter, up 10% year-on-year. In 2014, its total revenue reached VND1.15 trillion. It is also among the largest private firms in both production scale and taxation contributing to the State budget in industrial zones in Vinh Phuc province.

Not only does Cosmos have a persistent ‘vitality’ in difficult economic conditions, in Thanh Hoa, with charter capital increasing from VND120 billion at its inception to nearly VND500 billion in 2012, Delta Sport JSC is among the largest domestically funded private firms in the province, recording hundreds of billions in revenue every year. In 2013, Delta expanded production with construction of a new factory, creating jobs for nearly 4,000 workers with an average salary of over VND5 million per month.

On the financial and securities markets, many private firms have outperformed SOEs in investment performance, including Vingroup, the first 100% private capital company on the list of the top ten taxpayers in Vietnam in 2014, alongside major State-run corporations like PetroVietnam, Viettel, and PV Gas. In 2013, Vingroup grossed more than VND18 trillion (up 132%), and after tax profit reached VND7.15 trillion, up 378% compared to 2012. Along with this growth, its contribution to the State budget also increased strongly, with corporate income tax reaching nearly VND2.6 trillion, up 308% compared to 2012. In 2014, Vingroup recorded a high growth rate with consolidated net sales reaching nearly VND28 trillion, up 51% compared with 2013.

Comparing the use of resources and contribution to the economy of SOEs and private firms during the 2006-2010 period, statistics show that SOEs represent 45% of total investments but only generate 28% of GDP. Meanwhile, private firms, accounting for only 28% of total investment, generate 46% of GDP. The effective performance of PEs cannot be denied, however overall, the number of successful private firms as mentioned above is not large.

According to Chairman of Vietnam Chamber of Commerce and Industry Vu Tien Loc, among operating private firms, large and medium-sized enterprises account for only about 4%; 96% of the remaining are micro and small enterprises, of which nearly 70% of PEs still operate unprofitably.

On the other side, according to the statistics of the Ministry of Planning and Investment, troubled firms forced to shut down in the first seven months this year amounted to more than 32,000, up 1.2% YoY, including 4,330 private firms (13.4%), while 1,200 others have completed dissolution procedures or termination of operations.

In the context of a difficult economic situation, support from the State has a very important practical role for enterprises, especially PEs. The implementation of various policies and measures on capital, technologies, land use, and manpower has helped many revive, survive and continue to rise. However, many support policies are not yet being accessed by PEs.

Commenting on the inadequacies in policies towards private firms, Head of HR Manager Department of Thai Binh Textile JSC Nguyen Chi Hieu said that there must be financial ability, technology, access to market information, legal knowledge, and so on for businesses to achieve sustainable development. It is not really effective for enterprises to do them all without support from the State. Although every year the government allocates resources to support businesses, many PEs are still not able to access such policies. Moreover, a number of policies and aid programmes have not met the actual needs of enterprises, with complex procedures and no specific guidance. Even information support and human resource training programmes are fairly outdated and lack in-depth content, thereby reducing the interest and participation of PEs.

On the aspect of policy-making, Director General of Enterprise Development Department under the Ministry of Planning and Investment Ho Sy Hung admitted the variance in the design of policies and programmes, as well as inappropriate actual implementation of such policies and programmes, are the reasons for unbalanced competition between PEs and other types of businesses. Currently, six of the total eight support policies specified for PEs are being incorporated into other support programmes for industries and sectors, not dedicated to private enterprises. In addition, inappropriate policy content and lack of specialised staff in support of PEs has led to reduced opportunities for PEs while many new policies do not come to life.

Chairman of the Vietnam Association of Small and Medium-sized Enterprises, Dr Cao Si Kiem, said that currently only about 30% of PEs have access to capital from banks, the other 70%, due to insufficient conditions - especially tax debts, overdue debts, bad debt and operating without interests - face difficulties in borrowing more loans. The result makes the banks’ interest rate reductions ineffective for many businesses.

Moreover, slow implementation of enterprise support policies also limit their access to support from the State for human resource development. "We mostly carry out training ourselves for our company, although our firm has fulfilled all obligations towards the State", Director Do Quet of Tu Thanh Company in Dak Lak said. Director of Hanoi-based Binh Nguyen Company Nguyen Huu Lam also expressed his view that instead of free support, most training and company consultancy programmes require businesses to pay higher fees.

Meanwhile, local authorities are still not actively developing support policies and programmes for local enterprises, mostly just participating at a modest level in programmes hosted by relevant ministries and agencies on trade promotion, intellectual property, and quality management. The Ministry of Planning and Investment reveled that around 30% of localities have not approved or implemented plans to develop the province's businesses, as well as having no report on the implementation plan to submit to the ministry for review and to remove difficulties for enterprises.

Commenting on this fact, General Director of Vietnam Debt and Asset Trading Corporation Le Hoang Hai said that incomplete information, particularly financial information of partners, made it more difficult for private firms. Lack of long-term development strategy also leads to PEs’ limited awareness on assistance programmes from the State for improving innovation, creativity, and competitiveness.

PEs are particularly vulnerable to negative effects from economic difficulties. Over the years, to support developing PEs, the Party and State have promulgated guidelines and policies, from financial assistance and land for production to technological support and qualification, promoting market expansion and participating in public service procurement. Such programmes and policies have helped enterprises overcome difficulties and increase production, yet are still not strong enough to meet the actual needs of enterprises.

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