Trade surplus $683m despite April deficit

Viet Nam posted a trade surplus of US$683 million in the first four months of the year, said Nguyen Tien Vy, head of the Planning Department, in the Ministry of Industry and Trade (MOIT).

Speaking at a press conference in Ha Noi yesterday, Vy said, in April alone, the country fetched $12.2 billion from overseas shipments, down 0.6 per cent from a month earlier. Of the figure, an estimated $7.5 billion was earned by foreign-invested firms, dropping 0.1 per cent year-on-year. This generated a trade deficit of $400 million.

During the month, the industrial goods sector sustained a growth of nearly 19 per cent, lower than 23 per cent recorded in the past three months.

In the four months, farm produce, including rice, saw a fall in exports due to intense competition, said Phan Thi Dieu Ha, Deputy Director of the Export-Import Department.

Ha said that over 1.7 million tonnes of rice brought home $765 million, down 18.2 per cent in volume and around 17 per cent in value.

Deputy Minister of Industry and Trade Le Duong Quang directed the ministry's departments and agencies to clear business bottlenecks, particularly in capital access, administrative procedures and market entry to reach the goal of $132 billion from this year's exports.

Figures from the ministry showed that electricity output last month was estimated at 11.42 billion kWh, increasing 13 per cent over last April. In the first four months of the year, electricity output would reach 41.94 billion kWh, posting 10 per cent year-on-year increase.

Pham Manh Thang, Director of the ministry's General Department of Energy said power generation would be 30,000MW, making a surplus of 10,000MW.

There would be enough power supply for the country in the peak months of the upcoming dry season, Thang assured.

He estimated that power capacity this month would be 12 billion kWh, posting 5.6 per cent increase over the previous month.

Duong Quang Thanh, Deputy General Director of the Electricity of Viet Nam said the group is preparing to ensure power for the season.

Thanh said the Pleiku-My Phuoc – Cau Bong 550kV transmission line which was integrated into the national power grid yesterday would ease the power shortage for the southern cities and provinces in the upcoming time.

The 437.5 km long line run by the Viet Nam National Power Transmission Corporation passes through five provinces including Gia Lai, Dak Lak and Dak Nong in the Central Highlands, and Binh Phuoc and Binh Duong in the south.

The VND9.2 trillion ($432.4 million) project was funded by the World Bank, the Asian Development Bank and the German Reconstruction Bank, along with the Viet Nam Bank of Industry and Trade, and the Viet Nam Development Bank.

The line has linked the power system of the south-eastern and south-western regions, ensuring a safe and smooth network that is ready to cope with the exchange of power among regions in the country.

As many as 4,787 households along the project site have been relocated.

Bac Lieu seafood exports surge to $115 million

The Cuu Long (Mekong) Delta province of Bac Lieu exported 14,800 tonnes of aquatic products in the first four months this year and earned US$115 million, representing a year-on-year increase of 42 per cent. In April alone, the locality shipped abroad 4,690 tonnes of frozen shrimp, with a revenue of $38 million.

The result was attributed to the efforts of the enterprises in improving their processing and manufacturing process to improve the quality of products and reduce the production cost.

Bac Lieu's aquatic products maintain a firm foothold in international markets, fulfilling importers' regulations on food security and technical requirements.

In April, the locality enjoyed an aquatic farming and catching output of nearly 23,000 tonnes. The figure pushed the total output of Bac Lieu in this year's January-April period to 73,000 tonnes, a 3 per cent rise over the same period in 2013, helping the province complete nearly 27 per cent of its yearly target.

Can Tho wants investment for hi-tech agri-zone

The Cuu Long (Mekong) Delta city of Can Tho is offering optimal conditions to attract a US$26 million investment into the building of a high-tech agricultural zone, according to the city's Investment, Trade and Tourism Promotion Centre.

The Thoi Hung High-Tech Agricultural Zone will cover up to 500 ha of land in Co Do District.

This zone will be used to produce plant varieties and breed livestock under international standards and apply cutting-edge technology in processing agricultural and aquatic products.

Its operation is set to help expand the application of advanced agricultural technology in Viet Nam, as a network of satellite farms and businesses will be linked with the zone.

The promotion centre stated that once investors operate in the zone, they will have to pay only half of the land-use fee. They will also be permitted to acquire land without charge for the purpose of constructing residential buildings for workers and public facilities.

They will also receive financial support covering between 70 and 100 per cent of the training expenses for Vietnamese staff.

Wood product firms need to look closer to home

Firms which manufacture wood products for export should focus on the domestic market, which is being dominated by foreign products or those made by small-and medium-sized firms and trade villages.

This was stated by Nguyen Ton Quyen, General Secretary of the Viet Nam Wood and Forest Product Association (Vifores). He added that Viet Nam is placed sixth in the world market in terms of the value of its wood and wood product exports, second in Asia and the first in Southeast Asia, reported the Thoi bao Kinh te Viet Nam (Vietnam Economic Times) newspaper.

Last year, Viet Nam earned an export value of US$5.7 billion for its wood and wood products, according to the wood processing industry. In the first four months of this year, the industry also reported a year-on-year increase of 21 per cent in the total export value to reach $479 million.

Meanwhile, the value of the domestic consumption of wood products for home and outdoor decorations reached $2.7 billion in 2012 and surged to $3 billion in 2013, Quyen said.

However, few of the 2,500 local companies which process wood products for export have invested in developing the business for the home market, according to Quyen. Therefore, it could be said that these enterprises have ignored the domestic market for wood products.

The domestic market is dominated by imported wood products. Small and medium-sized companies and trade villages have provided their fine art, interior and wood products for the domestic market, but these are of non-uniform quality and poor design.

At present, a few Thai manufacturers and distribution companies of wood products were planning to buy the facilities of small wood product manufacturers in Viet Nam to expand their business here, he said.

The local wood product exporters could meet international quality standards and had many quality designs, but the domestic customers did not have access to such products.

Quyen said these exporters had the ability to produce on a large scale but did not have the ability to trade.

Almost all of them focused on exporting products and shipping them to their partners abroad under large export orders. They had not paid attention to distributing their products in foreign markets.

In recent years, the exporters had returned to the domestic market, together with an increase in exports, Quyen said. However, they had faced many challenges in developing their business in the domestic market.

The state did not have any policies to encourage the development of wood products for the domestic market. For example, the state exempted wood product exports from tax, but imposed value-added tax on wood products sold in the domestic market.

The companies must build a distribution system and a production system while developing the domestic business.

Additionally, the domestic customers were not familiar with the trademarks of domestic wood product manufacturers, he said.

To enter the domestic market, these companies should set up design, marketing, market research and consulting teams and then build a distribution system in the home market, he said.

The enterprises should also have strategies to increase the volume and quality of wood products for the local market as well as to advertise their trademarks, he said.

Capital raising measures $4b in Q1

The capital raised through the stock market in the first quarter of this year reached VND85.3 trillion, or US$4.06 billion, representing an increase of 31.51 per cent year over year.

According to the Ministry of Finance, the stock market of Viet Nam made good recoveries in the first three months.

With the VN-Index on the HCM City Exchange soaring by nearly 18 per cent during Q1, following a 22 per cent rise last year, the stock market became the world's second-fastest-growing equity market, according to the financial website Zerohedge, based on Bloomberg's data.

The stock market rebound boosted the market capitalisation to reach VND1,207 trillion, or $57.4 billion, as of the end of March, adding VND258 trillion, or $12.2 billion, in comparison with the end of last year and equivalent to 33 per cent of the nation's gross domestic product.

Statistics showed that the trading value also increased strongly in Q1, averaging VND5.2 trillion, or $247.6 million, per session; 89.7 per cent higher year over year and 92.1 per cent higher than the average figure last year.

According to the finance ministry, the Vietnamese stock market was going through restructuring for a more sustainable development with focus on foreign indirect investment.

Securities firms report bumper earnings despite challenges

A number of securities firms posted huge profits in the first quarter of this year, but many were in difficulty although the market is recovering.

According to the statistics of Dau Tu Chung Khoan (Securities Investment) newspaper, to date, 78 securities firms have reported their first quarter's business results, with total pre-tax profit reaching nearly VND1.4 trillion ($67.3 million), more than doubling the figure of the same period last year.

Notably, the gain was mostly registered by 30 companies, which each earned upwards of VND2 billion ($95,000), including FPT Securities (FPTS), Vietcombank Securities and VNDirect Securities.

FPTS reported the first quarter's profit at VND38.6 billion (US$1.8 million) and nearly VND70 billion (US$3.3 million), which is 68 per cent and 43 per cent higher, respectively, than the same period last year. FPTS attributed its soaring profit to the recovery in the stock market, which helped to boost the revenue from brokerage.

VNDirect Securities also gained VND59.3 billion (US$2.8 million) in pre-tax profits, or equivalent to a 110 per cent growth rate over the same period last year.

The turnover from brokerage activities constituted 46 per cent of VNDirect's VND104.5 billion (US$4.9 million) total revenue.

The revenue from the brokerage of Vietcombank Securities also soared by nearly 100 per cent to reach nearly VND30 billion (US$1.42 million) out of the net revenue of VND109.4 billion (US$5.2 million).

The Vietcombank Securities' after-tax profits jumped 315.4 per cent over the same period last year to reach VND40 billion (US$1.9 million) in this year's first quarter.

Sai Gon Securities, one of the securities firms with the largest brokerage market share, also gained VND303 billion (US$14.4 million) in after-tax profits. Other securities firms that posted profits were Hai Phong Securities, Kim Long Securities, Sai Gon–Ha Noi Securities, and Agribank Securities.

The growth of many securities firms in the first quarter of this year mainly came from the soaring brokerage revenue, which analysts attributed to the recovery in the stock market.

Statistics revealed that the VN-Index on the HCM City Exchange soared 17.23 per cent during the first quarter. The southern bourse's total trading volume and value reached 7.69 billion shares and VND130.6 trillion (US$6.2 billion), rising by more than 40 per cent and 69 per cent over the figures reported during the previous quarter.

On the northern bourse, the trading volume and value also strongly increased, with 4.7 billion shares traded during the first quarter of this year, increasing by 70 per cent, with the total value reaching VND47.5 trillion (US$2.2 billion), more than doubling the figures recorded in the previous quarter.

Although the market rebounded, 18 companies incurred losses in the first quarter, totalling VND15.6 billion ($743,000). In addition, 30 companies had a turnover from brokerage — their core business — of less than VND1 billion ($47,000), modest in comparison with their total charter capital of VND5.44 trillion ($259 million).

Securities firms could continue to encounter difficulty this year, after more than 60 per cent (58 out of 94 companies) posted aggregated losses last year, the finance ministry's statistics showed, as a result of the market decline in the past few years.

The restructuring of securities firms is underway, and the State Securities Commission had previously said that it would create favourable conditions for the companies to hasten the process through mergers and acquisitions.

Future FTAs draw foreign investment

Foreign companies are starting to pour money into Vietnam to take advantage of potential economic opportunities from future free trade agreements (FTA).

Viet Nam is negotiating important FTAs, including the Trans-Pacific Partnership (TPP), the Viet Nam-EU FTA, the Vietnam-Korea FTA and the ASEAN+6. Once these agreements are signed, companies will have the chance to offer products and services to more consumers and businesses.

Among the many sectors, garments and textiles, food, livestock and energy have received the most attention.

According to Tran Quang Nghi, general director of the Vietnam National Textile and Garment Group (Vinatex), more than a dozen foreign companies from mainland China, Japan, South Korea, Austria and Taiwan are planning to build fabric and dye factories in the country.

Nghi said foreign businesses were seeking investment opportunities in the garment industry to stay ahead of the TPP, which once signed would mean local companies would enjoy tax free exports to member countries.

China's Texhong Textile Group is expanding its presence in Viet Nam with a US$300 million fabric plant that will open in the northern province of Quang Ninh in May.

Yulun Jiangsu Textile and Garment has also received an investment certificate for a $680 million fibre production textile and dye factory in Bao Minh Industrial Zone in Nam Dinh Province.

In HCM City, Taiwanese Forever Glorious has committed to invest $50 million in a project to make high-end underwater sportswear, and China's Gain Lucky Ltd also plans to invest $140 million in a project to design and produce luxury garments.

The agricultural sector is also attracting foreign capital.

Last month, nearly 20 French companies visited Viet Nam to seek investment opportunities in the fields of machinery and technical skills in animal husbandry.

According to Nguyen Dang Vang, chairman of the Viet Nam Livestock Association, French businesses wanted to cash in on untapped potential markets as future FTAs would open bigger markets for livestock products along with the development of this sector.

Meanwhile, Japanese firms are keen on high-tech sector, with CEO of Sojitz Corporation Hideaki Kato revealing plans to invest in 3-4 industrial zones in Viet Nam in the areas of food, energy and electronics.

Vo Tri Thanh, deputy director of the Central Institute for Economic Management, said Viet Nam would benefit from foreign capital accompanied by cutting-edged technology and management skills.

However, he said domestic businesses remained the backbone of the economy and local companies should have rational development strategies to sharpen their competitiveness while being able to collaborate with foreign partners.

However, the Viet Nam Chamber of Commerce and Industry warned that Vietnam could become a "backyard" production target for foreign investors to outsource if local companies failed to up their game.

Oil firms carry out first gas price hike of 2014

The retail gas prices were raised by VND3,300 to VND8,000, or between US$0.15 and $0.38, per 12-kilogramme canister, depending on the type of gas, from May 1.

Do Trung Thanh from the Sai Gon Petro Company, Ltd said that the retail price for SP gas would increase by VND8,000 to VND391,000, or $18.6, for a 12-kilogram canister, compared with the price at the beginning of April.

Meanwhile, Pham Anh Tu from the Ha Noi Branch of Gas Petrolimex said that the retail price would increase by VND3,300 to VND407,000, or $19.3, for a 12-kilogram canister.

This is the first time that domestic gas prices have been increased after being reduced four times since the beginning of 2014. According to the gas companies, the prices have been raised because the global gas prices in May have increased by $10 per tonne to reach $817.5 per tonne, compared with the April prices.

Dong Nai exports reach nearly $4b, up 17%

The southern province of Dong Nai earned over US$3.94 billion from its exports in the first four months of this year, up 17 per cent from the same period last year, local authorities have said.

Aquatic products topped the list with an increase of more than 81 per cent, followed by steel (78 per cent), coffee (73 per cent), and cashew nuts (53 per cent).

The export of garments, wooden products, computer and electronic components, machinery and footwear increased from 12-31 per cent.

In addition to maintaining trading activities with large partners from the US, Japan, and the EU, local enterprises stepped up penetrating into Eastern Europe, South America and Middle East markets, said Nguyen Tien Chuong, Chairman of the Dong Nai Import-Export Association.

The Viet Nam Rubber Group registered with the Ha Noi Stock Exchange, to sell more than 4.1 million shares of its stake at SHS Securities, from May 6 to June 4.

This was aimed at restructuring the investment list of the Viet Nam Rubber Group.

Once the transaction is complete, the Viet Nam Rubber Group will no longer be a stakeholder at SHS Securities.

SHS posted after-tax profit of VND72.4 billion ($3.4 million) in the first quarter of this year.

Treasury plans VND70 trillion government bond issue

The State Treasury of Viet Nam has announced plans to issue Government bonds in the second quarter of this year, worth around VND70 trillion (US$3.34 billion).

Of these, bonds with three-year maturity would make up for 25.7 per cent, or VND18 trillion ($857 million), followed by five-year bonds with 24.3 per cent and two-year bonds with 21.4 per cent value. The rest were bonds with maturity values of below one year, and 10-year and 17-year bonds.

According to the Ministry of Finance, the State Treasury raised government bonds worth VND83 trillion ($3.95 billion) in the first quarter of this year, making up for 35.8 per cent of the year's target.

DongA Bank gets shareholder approval to explore acquisitions

Shareholders of the joint stock DongA Bank have given the green light for its board to explore mergers with or acquisition of other lenders as part of its restructure plans.

Tran Phuong Binh, its general director, said on the sidelines of the meeting that some banks are interested in integrating with his bank.

At the annual general meeting last Saturday shareholders also approved a plan to increase chartered capital by VND1 trillion to VND6 trillion ($285 million).

Existing shareholders will be entitled to buy one new share for every five they own at the face value of VND10,000.

They approved the appointment of former central bank governor Cao Sy Kiem as the new chairman.

This year the bank hopes to increase its assets by 18 per cent to VND89 trillion, deposits by 20 per cent to VND78.5 trillion($3.7 billion), and outstanding loans by 10 per cent to VND 63.6 trillion($3.02 billion).

Eximbank sets profit targets high for 2014

The Eximbank shareholders meeting this week approved the bank's pre-tax-profit target of VND1.8 trillion ($85.7 billion) for this year, up from VND828 billion.

It also target deposits of VND100 trillion($4.7 billion) and outstanding loans of VND97.3 trillion ($4.63 billion), respectively up 21 per cent and 10 per cent.

This year the bank plans to open five branches and four transaction offices to take its network to 217.

The meeting also voted to retain Le Hung Dung, representing a group of four shareholders who own almost 10.5 per cent of the bank's shares, as chairman.

Until now he was chairman representing the State on the board, but his tenure came to a close following retirement from the Government.

FPT deploys e-bill system in Ha Noi

Starting from April 30, FPT Telecom will deploy the e-bill for its clients who are using its telecom services in Ha Noi.

According to FPT Telecom, the utilisation of the e-bill aims to implement the State policy on encouraging businesses to deploy the e-bill in accordance with Circular 32/2011/TT-BTC.

The application of the e-bill also aims to enhance customer services and make bill payments more convenient for clients.

State proposes price ceiling for milk products

The Prime Minister approved the Ministry of Finance's proposal on applying a price ceiling on milk products for children.

This is being seen as one way of controlling the prices of these products in the coming time, the ministry said, after it completed a month-long investigation of milk prices and the local milk market.

Following a directive by the Prime Minister, the ministry and the Ministry of Industry and Trade investigated the price regulations and taxes at five milk producers and traders from March 10 to April 10. These firms were the Viet Nam Dairy Joint Stock Company (Vinamilk), 3A Nutrition (Viet Nam) Ltd Company, Nestle Viet Nam Ltd Company, Friesland Campina Viet Nam Ltd Company and Mead Johnson Nutrition (Viet Nam) Ltd Company.

According to the investigation report released on Tuesday, last year and during the first three months of this year, these companies increased the prices of milk products for children less than 6 years old.

All five increased the prices by 2.4 per cent to 30.66 per cent last year, while two of them, Vinamilk and Nestle Viet Nam, raised the prices by 5 per cent to 14 per cent.

Therefore, the finance ministry has asked these firms to seriously implement regulations on listing prices for milk products for children less than six years of age.

The companies must review and save business costs because spending on advertising, discounts and marketing, which are part of the business costs, at the four firms, excluding Vinamilk, exceeded the regulated level under the Law on Corporate Income Tax for milk products for children in the said age group.

The high spending on these activities forced the prices of milk products up by 2.18 per cent to 16.39 per cent, the ministry said.

They must also review the prices of the said products to ensure that they are commensurate with the spending and profit made on the products, it said.

The ministry said at the Government's monthly meeting on Tuesday that the Government agrees with the finance ministry's proposal on applying a price ceiling on the said milk products. Additionally, these firms must register the prices of these products with the state offices, as per the existing regulations.

These solutions, which would be applied for the first time, are expected to stabilise the prices of milk products for the time being, the ministry said.

If the proposals are approved by the Government, the prices of these products could be reduced by VND50,000 to VND70,000 per box, Nguyen Van Nen, the government spokesman, said at the meeting.

The finance ministry also said the investigators had found that Nestle had not informed the authorities about some new prices which had brought in an extra VND5.2 billion, or nearly US$247,000, by the end of March, while the other four firms had not made any tax declarations.

Vice minister Vu Thi Mai said Nestle was fined VND45 million, while inspectors have collected more than VND10 billion in further taxes from the rest of the firms.

Japan may stop Vietnamese shrimp imports

Japanese businesses are planning to import shrimp from India and Indonesia instead of Viet Nam, due to the excessively high levels of oxytetracycline (OTC) in Vietnamese shrimp.

According to the Viet Nam Association of Seafood Exporters and Producers (VASEP), the decision was made due to the excessively high levels of OTC that were continuing to be detected in Vietnamese shrimp shipments, despite prior warnings and the public knowledge that virtually all Vietnamese shrimp exports were being tested for the antibiotic.

VASEP asked the Ministry of Agriculture and Rural Development's Directorate of Fisheries to strictly control shrimp cultivating areas to prevent such a situation.

VASEP's figure showed that 11 shrimp shipments to the EU and Japan were returned in the first four months of the year because of high OTC levels.

It said the number of shrimp shipments being returned by Japan had risen since it started testing for OTC in all Vietnamese shrimps.

The association also warned that Japanese importers are planning to import shrimp from the two above-mentioned countries as they have taken measures to reduce the OTC level.

Japanese importers have also guided shrimp processing factories in India to process shrimps to switch the orders from Viet Nam.

Two weeks ago, VASEP said the EU discovered OTC levels in some shrimp shipments from Viet Nam to be higher than the allowed level of 0.1ppm.

It warned that the EU would consider applying stricter measures on Vietnamese shrimp if Viet Nam did not improve the situation.

Earlier this year, the association forecast that shrimp exports could reach US$3 billion this year if the issues of breed and presence of chemicals were paid due attention.

It also warned that unless the local shrimp businesses strengthened self-regulation of OTC, they would fail to penetrate the Japanese market as well as to meet the target of making Viet Nam one of the top three shrimp exporters in the world.

Vietnamese manufacturing sector reaches 3-year high

The Vietnamese manufacturing sector continued its recent run of improvement in April as the Purchasing Managers' Index (PMI) hit a new high, surpassing the previous best achieved in April 2011, according to an HSBC monthly report.

The headline, seasonally adjusted PMI – a composite indicator designed to provide a single-figure snapshot of operating conditions in the manufacturing economy – rose to 53.1 in April from 51.3 in the previous month.

Business conditions have now strengthened in each of the past eight months, with the latest improvement being the strongest in the history of the survey which began in April 2011.

The rate of growth in new orders received by manufacturers accelerated for the second month running in April and was the fastest in the series history.

Improved client demand and broadly stable output prices had reportedly contributed to higher new orders. New business from abroad also rose at a record pace during the month.

Higher new orders and improved productivity led to a seventh successive monthly increase in output in the manufacturing sector. The rate of growth quickened and was second only to that recorded in April 2011.

Rising new orders led manufacturing firms to increase their purchasing activity in April. Furthermore, input buying expanded at a survey-record pace.

This contributed to a first rise in stocks of purchases since October 2013 as some panellists reported having increased inventories in response to expectations of further growth of new business in coming months.

Manufacturers also took on extra staff during the month, following a marginal reduction in employment in March. Job creation has now been recorded in eight of the past nine months.

Rising new business contributed to an increase in the backlog of work, ending a five-month sequence of depletion. Stocks of finished goods also accumulated in April, albeit only marginally. Some panellists indicated that delays in the delivery of goods to clients had contributed to the rise in inventories.

The rate of input cost inflation quickened for the first time in four months. Respondents mainly attributed the increase in input prices to higher shipping costs as a result of new government rules.

This also reportedly had an impact on supplier lead times during the month, with vendors lowering the amount of goods they shipped.

Meanwhile, manufacturing firms lowered their output prices for the second month running

Commenting on the Vietnam Manufacturing PMI survey, Trinh Nguyen, Asia Economist at HSBC, said: "The manufacturing sector is doing the heavy lifting in Viet Nam and its improvement will help bolster beleaguered domestic demand.

"The strong bounce of output, new orders, new export orders, and employment are much needed to counterbalance the domestic slump.

"We expect exports to have another stellar year, in contrast to the rest of the region, due to increased investment into the country in manufacturing and trade negotiations to expand market access.

"We expect growth to accelerate slightly to 5.6 per cent this year from 5.4 per cent in 2013. Most of this will come from the manufacturing and service sectors as construction and agriculture sectors lag behind."

Taiwan group to invest US$150 mln in Ha Nam

Tai Yuen Co., Ltd, a subsidiary company of the Taiwan-based Yunlon Group, will invest in a project to build a textile mill worth US$150 million in the northern province of Ha Nam.

Chi Wei Kung, General Director of Tai Yuen, revealed the news at a working session with provincial leaders on May 5.

The project, covering around 24 ha in Dong Van II Industrial Park, Duy Tien district, needs some 5,000 workers for its operation.

Construction will begin in August and is expected to be completed in 12 months.

Once operational, the mill will require around 1,500 cubic metres of water for its daily operation in the first phase,  and 2,500 cubic metres in the second phase, said the business executive while expressing his wish that the province will ensure a stable water supply for the factory.

He also pledged to treat waste produced by the plant in accordance with Vietnam’s environmental standards.

Yunlon is one of Taiwan’s largest multidisciplinary groups, specialising in automobile manufacturing and textile industries. The Hanam-bassed is the first project invested by the Taiwanese group in Vietnam.

FDI sector helps maintain national trade surplus

Foreign direct investment (FDI) have delivered an impressive performance in the past four months, helping Vietnam enjoy a trade surplus of US$683 million, equal to 1.5% of the country’s total export value.

The Ministry of Industry and Trade (MoIT) announced on May 5 that Vietnam earned an estimated US$45.74 billion from exports in four months, a year-on-year increase of 16.9%.

The country has shifted its focus on exporting processed industrial and farm products rather than fuels and minerals.

Export earnings from agro-forestry and fisheries products grew by 14% to US$7 billion, and those from processed industrial products rose by 19.4% to US$33 billion. Meanwhile, fuels and minerals dropped by 10.5% to US$2.9 billion in export value.

Ten products with export earnings of more than US$1 billion each were telephone handsets and components (US$7.7 billion), garments (US$5.9 billion), footwear (US$2.8 billion), seafood (US$2.2 billion), machinery, equipment and tools (US$2.1 billion), means of transport and tools (US$2.1 billion), wood and timber products (US$1.9 billion), coffee (US$1.6 billion), and crude oil (US$2.1 billion).

Most key export markets achieved high growth, for example Asia (13.6%), West Asia (12.3%), Europe (12.1%), America (27.8%), and Africa (14.1%).

MoIT statistics also show four-month imports surged 13.7% to nearly US$45.1 billion. Asia ranked first among Vietnam’s import markets, purchasing US$35.96 billion worth of goods. Imports from China alone hit approximately US$13 billion, accounting for nearly 27.5% of Vietnam’s total import value.

It’s worth noting that while FDI businesses enjoyed a trade surplus of nearly US$4.1 billion, domestic businesses produced an import surplus of more than US$3.4 billion.

The MoIT said difficulties in garment and agricultural product exports, especially in e-customs procedure clearance and price competition, are barring Vietnam from meeting its US$132 billion export value target this year.

To fulfill the target, the MoIT has asked relevant agencies to hold regular meetings with businesses to remove difficulties relating to capital and market access, and administration procedures.

The MoIT will accelerate supplying information about export markets and anti-dumping price to help businesses establish proper business strategies.

The ministry will provide businesses with up-to-date information about world market fluctuation so that they can avoid risks and promote exports.

Indonesia probes into steel imports from Vietnam

The Indonesia Anti-Dumping Committee (KADI) has initiated a preliminary investigation into cold rolled steel imported from Vietnam, according to the Vietnam Competition Authority.

The similar product from Taiwan, China, Japan and the Republic of Korea is also under the microscope at the request of Krakatau Steel – Indonesia’s biggest steel maker.

KADI has placed anti-dumping tax margins of between 13.5-36.6% on the Vietnamese steel product since December 2012 pending Indonesia’s final determination.

Vietnam, Malta boost economic cooperation

Vietnam considers Malta a gateway to the European Union, East and South Europe, and North Africa, especially after a free trade agreement (FTA) is signed between Vietnam and the EU in the coming months.

Vietnamese Ambassador to Italy and Malta Nguyen Hoang Long made the statement at a Vietnam-Malta economic cooperation roundtable in capital La Valletta on May 5.

He expressed hope with its complete legal and tax systems, Malta will create favourable conditions for Vietnam to establish banking and financial institutions in the country and then expand to the EU and North Africa.

The diplomat noted the growing friendship between Vietnam and Malta has developed well over the past 40 years, laying a firm foundation for the two countries to boost bilateral cooperation in various realms, especially economics, trade, investment, tourism, and education-tourism.

At the meeting, Vietnamese Trade Counselor Bui Vuong Anh  provided detailed information about exports, imports and investment between the two sides and evaluated the potential for cooperation in maritime, trade, finance and banking, and tourism services.

The event, first of its kind, was co-organised by the Vietnamese Embassy in Italy and a number of Malta ministries.

New Zealand: opportunity for Vietnamese products

New Zealand’s Ministry for Primary Industries (MPI) has given the go ahead for the importation of Vietnamese dragon fruits into the country, potentially opening a door of opportunity for other imports.

The MPI says a review of the importation has found that the risks associated with diseases can be managed to achieve New Zealand’s appropriate level of quarantine protection and is effective as from April 24.

In addition to the common requirements for fresh fruits imported to New Zealand, dragon fruits must obtain a certificate from the National Plant Protection Organisations (NPPO) to be shipped to the country.

On May 1, the MPI also modified regulations concerning the importation of Vietnamese mango – another tropical fruit which has been a favourite with NZ consumers since December 2011.

Experts hope the two types of fruits will help Vietnam get its foot in the door, opening opportunities for other Vietnamese fruits to be allowed into the market.

Vietnam and New Zealand have signed a number of agreements aimed at creating a legal framework for increased trade and cooperation. They also established a joint committee in 2005 in hopes of spurring trade.

However, bilateral trade remains modest, but bright spots on the horizon are beginning to appear. Thanks to trade promotions over the years, two-way trade turnover rose from US$187 million in 2001 to US$750 million in 2012 and US$723 million in 2013.

In the first four months of this year, Vietnam’s exports to New Zealand hit a record high of US$90 million, spawning optimism that bilateral trade could reach US$1 billion by the end of 2015.

Vietnam is currently the 21st largest exporter of New Zealand with its main export products including footwear, wood and timber products, seafood, garment and cashew nuts. The country primarily imports milk and dairy products from New Zealand.

Since the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) took effect in January 2010, Vietnamese products have received significant incentives in the New Zealand market.

However, many domestic businesses have not carefully studied the trade pact to take full advantage of the incentives it offers, including highly reduced tariffs among other things.

The New Zealand economy depends highly on processing farm products, minerals and fisheries, which are quite similar to Vietnam. Thus, it is difficult for Vietnamese products to penetrate the market, but not impossible.

New Zealand applies open-door and flexible trade policies highly conducive to Vietnamese exports with high diversity sufficient to bolster robust trade and economic relations.

In the reverse, AANZFTA also provides ample opportunity for New Zealand businesses to penetrate the Vietnamese marketplace. For example, Vietnam pledges to eliminate 54% of tariffs on New Zealand imports in 2016, 85% in 2018 and 90% in 2020.

Specifically, pursuant to the agreement, beef, lamp, dairy products and small plank will enjoy significant tariff cuts in 2016. It is highly likely that imports from New Zealand into Vietnam will rise considerably in 2016 and the years beyond.

Economists forecast Vietnam’s annual import growth from the New Zealand market will grow by around 5% to NZD12.5 billion over the next few years.

This underscores the need of Vietnamese businesses to study New Zealand’s market trends, and trade pacts, and seek to capitalise on the importation of Vietnamese dragon fruits and mangos, using them as a springboard to launch the importation of other high quality Made in Vietnam products to New Zealand.      

Mekong Delta to receive investment boost

Ho Chi Minh City will host a conference on May 22 to introducing the investment environment in the Mekong Delta.

The event, co-organised by the Vietnam Chamber of Commerce and Industry (VCCI) in Can Tho and Mekong Promotion Club (Mekong PC), will focus on the region’s advantages, including raw materials for agricultural development, diverse terrain for eco-tourism, and the huge demand for infrastructure investment.

Experts will share experience in making the regional investment climate attractive to domestic and foreign businesses.

Nguyen Huu De, Deputy Director of VCCI Can Tho, said the conference will provide necessary information for businesses wishing to invest in the Mekong Delta, contributing to developing an effective supply chain in the region.

Pham Thanh Khon, Vice Director of the local Department of Planning and Development, noted that the Mekong Delta is becoming an attractive destination for businesses due to its improved investment environment.

He added that Kien Giang, Dong Thap, Ben Tre and Can Tho in the region are among the top 10 localities having the highest Provincial Competitiveness Index (PCI) in 2013.

Tra Vinh exports dragon fruits to US

Duc My Cooperative in the Mekong Delta province of Tra Vinh will export 1 tonne of red flesh dragon fruits to the US at a price of VND24,000 per kilo.

Vu Cong Bang, director of the Viet Seafood and Agricultural Products Company that helped My Duc send the offer to US importers, said the product branded My Duc-Tra Vinh is a favourite with American consumers.

The US side has planned to purchase an additional two tonnes of the fruits due to be shipped in May.

Tra Vinh province’s red flesh fruits are permitted by the Ministry of Science and Technology to go abroad.

The provincial Department of Science and Technology is assisting Duc My Cooperative members in getting the VietGap certificate for their products.

Tra Vinh has more than 65ha of red flesh dragon fruits mainly cultivated in Chau Thanh, Cau Ke, and Cau Ngang districts with an annual output of more than 1,000 tonnes.

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