Clothing discounts fail to lure buyers

Fashion shops offered enticing discounts as the year ended, but they failed to attract customers, showing that consumers are keeping their wallets zipped during the economic recession despite big discounts.

Nguyen Nhu Mai, owner of online shop Maccy Fashion, slashed prices by 30-50 per cent with the hope that people would buy new outfits to welcome the Lunar New Year next month. But even prices of VND100,000-200,000 (US$4.7-9.5) were not enough to lure new customers.

On the capital's "fashion streets", the situation is similar. Mai Thi Hue, owner of a shop on Chua Boc Street in Ha Noi's Dong Da District, said that she and her neighbours hung discount signs in front of their stores. However, her felt coats and skirts, marked as made-in-Viet Nam high-quality goods for export and costing only VND180,000-250,000 ($8.5-12), attracted only window shoppers.

"I earned less from selling clothes than I paid to rent the shop," she said.

Office worker Nguyen Thu Hien, 35, said she went to a shop on Chua Boc Street planning to buy some clothes after hearing about the 10-50 per cent sale there.

"However, the clothes with a 10 per cent discount were still too expensive for me, whereas the ones that were 50 per cent off were out of date and even too old and dirty to buy," she complained.

Branded goods in Viet Nam were always more expensive than in other countries, for instance in Thailand, Hien added.

"I think that to attract customers with discount campaigns, sellers should not mix low-quality and old clothes with normal ones and then advertise it as a sale. If customers don't see quality goods, they won't come back to the shop."

Customers would do better to order online from foreign websites during their year-end sale campaigns, she suggested. "That way, you can get products at high quality for reasonable prices."

Abbott Laboratories appears to monopolise distribution in Vietnam

US-based Abbott Laboratories and its exclusive Vietnamese distributor 3A Nutrition Vietnam Co., Ltd.  appear to be monopolising the distribution of the vanilla-flavored Ensure original shake in Vietnam, according to the National Steering Committee on the Prevention and Control of Smuggling, Trade Fraud and Fake Commodities (Steering Committee 389).

At the beginning of 2013, Abbott Laboratories started printing on the label of the vanilla-flavored Ensure original shake this line, “Not to be sold in Vietnam or Mexico.” After Vietnamese authorities stopped allowing this product in Vietnam, the import of a similar product by Abbott’s exclusive Vietnamese distributor 3A Nutrition Vietnam Co., Ltd. rose 63 per cent.

Meanwhile, the vanilla-flavored Ensure original shake continued to be imported into Vietnam. In 2013 the import value was VND700 billion ($33 million), of which 3A Nutrition imported VND300 billion ($14 million) worth of the product. The price of the original shake is almost twice as much as that of the similar product mentioned above.

The steering committee then asked Abbott to clarify about the quality of the vanilla-flavored Ensure original shake with the line “Not to be sold in Vietnam or Mexico” and asked that, if this product is safe for consumption of Vietnamese, Abbott use other ways and cooperate with responsible agencies to prevent its smuggling instead of using this discriminative line.

The steering committee also asked the Ministry of Health to allow other firms to import the original shake in order to prevent monopoly to protect the right of consumers.

Hiway opens first Sapomart, offers discounts

The Hiway Vietnam Joint Stock Company (Hiway) opened its first Sapomart supermarket in Quang Trung Road, Ha Dong District, in the capital city on January 6.

Customers shop in Hiway's first Sapomart supermarket in Ha Dong district. Close to 95 per cent of Sapomart's goods are made-in-Viet-Nam items. - Photo hiway.com.vn

On the occasion, the company announced discounts on thousands of items in the supermarket and free delivery within a 10km radius. In addition, they will accept payments made with all kinds of bank cards.

Hiway's Chairman of board of directors Le Hoang Ha said that the company plans to construct 10 Sapomart outlets between 2015 and 2016. He said that two Sapomarts will be opened in Ba Dinh and Tay Ho districts of Ha Noi towards the end of January.

On the same day, Hiway announced that the company has changed its SuperCenter supermarket brand name to Sapomart, with an aim to provide better services to customers.

"The change of our brand identity is expected to help customers recall it more easily. We hope that the brand's new colour and design will seem friendlier to customers of all ages," Ha added.

Close to 95 per cent of Sapomart's goods are made-in-Viet-Nam items, including food, household utensils, electronics and garments.

Luxury Parkson shopping centres in HCMC deserted

Even though many stores have hung up the 50% sale off signs, the Parkson shopping centres in HCM City still failed to attract customers.

Parkson has six commercial centres in HCM City with hundreds of high-class brands. The centres also provide restaurants and entertainment areas but only receive few visitors.

"Business has become sluggish in the late two months. We only sold two pairs of shoes last week. If this continues, we may have to end the rent here to find another place," said a shop owner at Parkson Flemington Centre.

Many other shop owners at the centre confirmed that usually, they cannot even sell a single product.

Other centres such as Parkson C.T. Plaza or Parkson Paragon also face the same problem. If visitors come, they would mostly go to the cinema or restaurant instead of the shops.

Meanwhile, store owners at Parkson Le Thanh Ton complained that the rental fees are too high. The store owners' incomes went down by 20-30% compared to the same period last year.

"Our income this year is down by 20-30% than last year but the monthly rental fee for a 16-square-metre store stays at USD1,300. The fee for similar store on the street is only USD1,000 and it's easier to sell there," a store owner said.

Parkson is the retail arm of Malaysian Lion Group. On January 2, the Parkson Landmark in Hanoi had to shut down because of lacklustre business.

Banks increase foreign exchange rate

In response to the State Bank’s decision to increase the inter-bank average exchange rate by one percent on January 7, numerous banks have increased the US dollar exchange rate.

The selling prices ranged from 21,420 VND to 21,450 VND and purchasing prices were set at between 21,510 VND and 21,520 VND to one US dollar at commercial banks including Vietcombank, Vietinbank, Eximbank and Techcombank.

This is the first time this year the State Bank has adjusted the exchange rate, a move aimed at actively leading the market in line with the international and domestic financial market climate, and stabilising the foreign exchange market.

The central bank will work to simultaneously carry out measures and policy instruments to stabilise the exchange rate and foreign currency market on the new rate platform.

During a conference on banking sector responsibility in 2015, Governor of the State Bank Nguyen Van Binh stressed that one of the sector’s targets this year is to continue to maintain the stability of the foreign exchange market and to keep rate fluctuation below 2 percent, though he added it is not an easy target.

Hanoi’s apartment sales gains momentum

Hanoi’s condominium market witnessed a great growth during the last quarter of 2014 with 7,200 apartments from 16 projects offered, reported CBRE Viet Nam Company Ltd., a foreign property service provider.

Accordingly, total condominiums for sale amounted to 16,200 in the full year, more than doubling that of 2013.

In the fourth quarter of 2014 alone, 3,990 condominium transactions were successful, 48 percent of which came from the mid-end segment and 37 percent from the low-end segment. With this, a total of 10,700 apartments were sold during the year, rising 60 percent year on year.

Nguyen Hoai An, senior manager of CBRE Vietnam's Hanoi branch, said residential projects in urban districts continued to reel in buyers over the last three months in 2014 with highest price increase recorded in the high-end segment.

CBRE experts forecast the capital’s property market, including the condominium market, will maintain its momentum in 2015, particularly in the high- and mid-end segments.

The growth is expected to be contributed by the amended Law on Housing which will take effect on July 1, 2015, with regulations allowing foreigners and Vietnamese people residing abroad to hire and own real estate in Vietnam.

Oil import tax raised as global prices fall

The Finance Ministry has issued a circular guiding the increase of preferential import duty on oil and petrol by 7 to 11 percent.

Under the Circular 03/2015/TT-BTC, which took effect on January 7, 2015, the import duty will be raised to 35 percent on petrol, kerosene and mazut, and 30 percent on diesel.

The adjustment was in line with the maximum preferential import duty speculated in the directive 17728/BTC-CST of the Ministry, under the World Trade Organisation’s commitments in 2015, among other regulations.

According to the General Statistics Office, last year Vietnam experienced an annual increase of 3.2 percent in crude oil export value, totalling 6.86 billion USD, as well as a 13.9 percent increase in the import value of petrol, totalling 7.2 billion USD, as compared to 2013.

Vietnam is a crude oil exporter, with 1.3 million tonnes of export volume in 2013.

The global market oil price has recently sunk to below 50 USD for the first time since 2009.-

Garment firm targets 115 mln USD revenue in 2015

The Garment 10 Corporation has set its annual revenue of 2.45 trillion VND (over 115 million USD) for 2015, 12 percent higher than that of the last year, said Director Nguyen Thi Thanh Huyen.

During the first days of this year, all employees working at the firm’s headquarters in Long Bien district, Hanoi, have worked hard to complete batches of goods for export to Japan, the US and the European Union.

Le Tien Truong, General Director of the Vietnam Textile and Garment Corporation noted that in order to take advantage of the Free Trade Agreements with the Republic of Korea and the Russia-Belarus-Kazakhstan Customs Union that will be signed in early 2015, officials and workers of the company need to further promote their creativeness so as to improve labour productivity and competitiveness of goods, which will help win major orders.

In 2014, the corporation enjoyed 2.18 trillion VND in revenue. It earmarked a lot of money for improving its productivity, bringing a sustainable growth to the firm.

Aquatic exports face substantial challenges in 2015

Vietnam’s aquatic exports will experience significant challenges in 2015, although the sector’s export revenue has recorded an annual increase of 18 percent, reaching 7.9 billion USD in 2014, said the Ministry of Agriculture and Rural Development.

Nguyen Huu Dung, Vice Chairman of the Vietnam Association of Seafood Exporters and Producers (VASEP) said that last year’s significant increase in seafood export revenue stemmed from the acquisition of over 1 billion USD of imported aquatic raw materials, noting that this led to the reliance on imported materials from foreign markets as well as expanded the imbalance of aquatic rearing and processing.

Vietnam’s aquaculture sector has been warned of batches of products which did not meet food safety standards in some key markets, including the US, Japan and the EU, due to the overuse of residues of antibiotics.

Vice Chairman Dung also confirmed that Vietnamese exporters, especially those specialising in shrimp and tra fish, will be hampered by food security and anti-dumping tariffs imposed by the US.

He added that in a bid to prevent diseases which threaten aquatic product productivity, it is necessary to control breeding animal quality and build a natural environment for aquaculture.

Aquatic exports in 2015 will be hugely affected by current market factors generating an increase in import prices, including the plunge in oil prices and currency depreciation. As such, the Ministry of Agriculture and Rural Development and VASEP recommend the affected enterprises prepare measures to counteract these challenges to accessing import markets, especially Japan, the EU and the US.

Despite these challenges, aquatic export revenue is expected to reach 8 billion USD in 2015, a 1.5 percent increase from 2014.

Government adopts Vinamotor’s state capital sale

Deputy Prime Minister Vu Van Ninh decided to sell the all state capital at the Vietnam Motors Industry Corporation ( Vinamotor ), which accounts for 97.7 percent of the firm’s chartered capital.

At present, the corporation’s total chartered capital is over 876 billion VND (41.17 million USD).

The number of shares owned by Vinamotor’s employees and its trade unions makes up 0.51 percent of the chartered capital. Other investors hold 15,702 million VND or 1.79 percent of the total.

Vinamotor specialises in manufacturing coaches, city buses, trucks with Transinco and Vinamotor brands. The firm also pays attention to developing other fields for transportation.

Vietnam’s rubber firm exports tyres to US

The Southern Rubber Industry JSC (Casumina) on January 5 reached an agreement with its US partner to export tyres to the US market in 2015, according to the Sai Gon Giai phong (Liberated Sai Gon) newspaper.

Accordingly, Casumina will ship 200,000 tyres worth US$57 million to the US from now to the end of the year.

Representative from the rubber company said in an attempt to obtain the order, the company has invested in technology and equipment to produce all-steel radial tyres.

Casumina is one of the leading domestic makers of car tyres in Vietnam. The company put into operation an all-steel radial truck tyre factory in the southern province of Binh Duong last April.

The VND3.38 trillion (US$161 million) factory, the most modern of its kind in Vietnam, was co-invested by the Vietnam National Chemical Group (Vinachem) and Casumina, and is capable of producing 1 million units per year.

HSBC: Vietnam manufacturing PMI peaks for eight months

The Purchasing Managers’ Index™ (PMI™) of Vietnam showed signs of strengthening during December, 2014, recording 52.7, up from 52.1 in November and the highest reading since April.

Growth has now been registered for 16 months in a row. The upturn in operating conditions stemmed primarily from strengthened growth in output and new orders.

Trinh Nguyen, Asia Economist at HSBC said that the demand for Vietnamese goods rose, both externally and domestically.

December’s survey showed a second successive monthly increase in inventories of input purchases, while there was also an increase in stocks of finished goods.

Companies reported that delays in the delivery of completed goods led to a build-up of stock in warehouses.

The survey data also indicated that average input costs paid by Vietnamese manufacturers continued to fall.

Companies reported that supplier prices, shipping costs and the price of fuel had all fallen when compared to November. Latest data showed that average input prices declined to the greatest degree since July 2012.

Faced with a reduction in their input costs, manufacturers chose to lower their average prices charged in December.

Competitive pressures and efforts to stimulate demand also led to the sharpest fall in output charges for a year -and-a-half.

Commenting on the Vietnam Manufacturing PMI™ survey, Nguyen said Vietnam's acceleration of manufacturing activity stands in sharp contrast to decelerating momentum elsewhere.

She also believed that the manufacturing sector will benefit from both wage cost competitiveness and lower input prices, thanks to declining global brent costs.

Major sales growth for e-commerce in 2014

As the TET holidays and the busiest selling period of the year approaches, Vietnam’s e-commerce looks well set to capitalise and perform exceptionally well predicts BIZWEB (www.bizweb.vn).

A recent study of e-commerce by Bizweb found that sales orders in Vietnam spiked 270% on-year reaching 1.6 million in 2014, with an average online order amounting to US$45, up 150% compared against US$30 in 2013.

A typical business posts some 300 items for sale on their website with the largest website offering more than 1,000 items.

The first online shopping Black Friday in Vietnam was highly successful with retailers reporting on average from 50 to 100 orders per day. One life insurance company reported the hits on its website increased tenfold and the company signed more than 200 contracts for the day.

Tran Trong Tuyen, CEO of Bizweb, said if enterprises are not actively participating in the hectic market, they will find it difficult to be competitive with the others that do in the coming time.

Government resolution on this year’s development plans

The Vietnamese government has issued a resolution on socio-economic development plans for this year which include stabilizing the macro-economy and removing obstacles to business production.

Other plans include implementing strategic breakthroughs, restructuring the economy, changing the growth model, improving competitiveness, and achieving a growth rate higher than in 2014.

The plans will also focus on boosting administrative and judicial reform, protecting the environment, combating corruption and wastefulness, strengthening national defense, political security and public order, protecting national sovereignty, and accelerating international cooperation and integration.

The government asked the State Bank of Vietnam (SBV) to coordinate with ministries and localities to adjust monetary and fiscal policies to control inflation, boost economic growth, and mobilize capital for development investment.

The Ministry of Industry and Trade was asked to expand the export market by focusing on high growth export items, removing market barriers, and negotiating more free trade agreements to make it easier to export Vietnamese agricultural, forestry and fishery products.

The government directed ministries and People’s Committees to tighten market and price controls toward reducing the bad debt ratio to less than 3% in 2015, speeding the equitization of state-owned enterprises (SoEs), reforming self-managed public agencies, and reducing hospital overloading.

Aussie wool producers eye Vietnamese market

Australian wool producers have set their sights on the Vietnam market for 2015, hoping to significantly expand exports, investment and supply chains in the Southeast Asian country.

Vietnamese producers have in the past traditionally imported wool yarn from China, India, Italy, and Germany. Experts forecast that domestic processing will help to save import costs and time.

The manufacturers are making efforts to increase ties with Vietnamese businesses to help them access their natural wool products as well as Australia's wool and yarn processing technologies.

Andrew Patridge, an expert from Techwool Trading said the expansion of new outlets in Asia is a decisive orientation for the Australian wool industry to reduce its dependence on China which now consumes some 70% of Australia’s wool export volume.

Central Highlands region sees high growth in 2014

The Tay Nguyen Central Highlands posted a GDP growth rate of 12.2% in 2014, while per capita income in regional localities ranged from VND31.4 million to VND44.8 million (US$2,105) per year, according to the Steering Committee for the Central Highlands.

The national programme on building new-style rural areas contributed greatly to lifting socio-economic conditions in the region, particularly the adoption of new production models in agriculture, which can be seen most clearly in the formation of animal breeding farms instead of the old household-based practice. The building of rural infrastructure including roads, irrigation systems, power supply network, schools and markets in line with criteria for new rural areas also surpassed the national average level.

Central Highlands provinces also focused resources on addressing the lack of housing and farming land for poor ethnic minority households. They have to date allocated 57,748 hectares of land to poor households and assigned 140,915 hectares of forest to 7,320 households for care and protection. At the same time, thousands of ethnic workers have been given jobs in agro-forestry companies.

Ethnic groups in the region also benefited from many preferential credit policies of the State and local authorities. They are provided with loans to invest in production or build clean water and sanitation facilities.

As a result, 117,360 households escaped from poverty in 2014, bringing the poverty rate in the region down by 2.7% against that of the previous year.

At the same time, educational and health care services in the region saw remarkable progress in terms of both quantity and quality. The number of ethnic students leaving school has decreased dramatically and more boarding schools have been built. The region now has 82 provincial- and district-level hospitals, while 704 out of the 722 wards and communes have medical facilities, with 66% of which meeting national standards for grassroots clinics.

In a bid to further reduce the rate of poor households by at least 3% in this year, the region will focus on speeding up vocational training and generating more jobs, while continuing with production investment and preferential credit policies for disadvantaged groups.

This year, the region continues to consolidate the great national unity and make full use of its advantages in order to maintain political stability, promote growth and improve the lives of ethnic minorities.

The Tay Nguyen Central Highlands region comprises five provinces, which are Dak Lak, Dak Nong, Gia Lai, Kon Tum and Lam Dong provinces.

Viet Nam's cement exports could face challenges this year as most producers are operating on a small scale, thus forcing them to sell their products through middlemen.

Le Van Toi, Director of the Department of Building Materials under the Ministry of Construction was quoted as saying by online newspaper vov.vn that Vietnamese cement enterprises have been unable to sign long-term contracts, even though their value is higher than short-term contracts.

Toi added that local producers had thought that exporting cement was seasonal work or a temporary solution for the problem of low consumption in the domestic market.

Data from the ministry showed that last year, Viet Nam shipped 19.5 million tonnes of cement and clinker, about four million tonnes exceeding the target set for 2014. Of this, the exported clinker was pegged at 15.24 million tonnes and cement at 4.44 million tonnes. The country earned US$800 million from the exports. The export price for cement and clinker currently stands at $43.155 per tonne, up $2 compared with previous years.

Cement consumption in the domestic market has touched 50.9 million tonnes, posting a 10 per cent year-on-year increase.

After four years of exporting cement, local producers have learnt their lessons by exploiting markets, indulging in contract negotiations, and especially by connecting with each other.

Toi said cement consumption this year will depend on the extent of construction, which has been heavily impacted by the current economic situation.

He also predicted that demand for Vietnamese cement consumption in both the domestic and foreign markets will hit between 71 and 73 million tonnes and rise from 4 per cent to 7 per cent, compared with 2014.

Exports will remain at the same level as last year. In 2013, cement and clinker exports had touched 15 million tonnes.

Indonesia is the largest importer of Vietnamese cement and clinker, followed by Malaysia, Bangladesh, Taiwan (China), the Philippines, as well as Cambodia.

Flamboyant apparel sector looks to higher export revenue

The apparel sector, buoyed by its strong export performance last year and the country’s upcoming signing of free trade agreements with other countries, has set an ambitious target of obtaining US$28-28.5 billion in outbound sales this year.

The sector’s 2014 exports amounted to nearly US$24.5 billion, a year-on-year improvement of 16%. Its major markets were the U.S. with a 12.6% rise, Europe with a 16.9% pickup, Japan with an 8.8% increase and South Korea with a 26.6% surge.

The U.S. remained Vietnam’s biggest garments importer with a total bill of US$9.8 billion.

According to the Vietnam National Textile and Garment Group (Vinatex), the industry will continue stepping up shipments to those key markets this year, with exports to the U.S. and Europe forecast to edge up to US$11 billion and US$4 billion respectively.

Last year, Vietnam was the largest clothing exporter to the U.S. with two-digit growth. Meanwhile, apparel shipments to America by China and India grew a slight 1% and 6% respectively.

For the European market, when a free trade agreement (FTA) between Vietnam and the European Union (EU) is signed, the nation’s apparel exports to the EU could significantly pick up, especially jacket, trousers and suits.

Nguyen Dinh Truong, vice chairman of the Vietnam Textile and Apparel Association (VITAS), said at a recent textile and apparel industry exhibition in HCMC that Vietnam’s signing of FTAs with South Korea, the EU, and Eurasian Customs Union, and the Trans-Pacific Partnership (TPP) agreement, probably early this year, could result in the sector doubling its production in the next 10 years.

However, those deals will require local firms to quickly integrate and make good preparations such as improving product quality; otherwise, they may be left behind, he said, suggesting the industry should increase output, product quality, production and price competitiveness.

Foreign investors have been scaling up investments in the domestic textile and apparel sector since early last year in anticipation of grasping the business opportunities which the FTAs will certainly bring. Most of them are from China, Hong Kong, Taiwan, Japan, the U.S. and South Korea.

VCCI: Growth in Mekong Delta high but unsustainable

The Mekong Delta’s economic growth last year, as estimated by the General Statistics Office (GSO), was 9%, three percentage points higher than the nation’s level, but the Vietnam Chamber of Commerce and Industry (VCCI) said its growth is not sustainable.

The GSO-calculated growth rate is lower than the figure that is based on data of the delta’s provinces but it is still questionable as the national economy achieved growth of a mere 5.98%, said Vo Hung Dung, director of VCCI in Can Tho City.

To prove his point, Dung said VCCI had reviewed data of the GSO about incomes, standards of living, labor productivity and agricultural output but had found no economic breakthroughs that helped the delta grow higher than the country did.

“Data between 2004 and 2014 revealed the average income per capita in the delta was 10-15% lower than the national average,” Dung said, adding the delta’s trade surplus is not what the region should be happy with.

The delta’s exports are estimated to amount to US$11.5 billion while its import bill was a slight US$5.4 billion.

In major cities, strong import activities can bring hefty import tariff revenues and lead the services sector to develop, thus fueling their economic growth, Dung said.

The number of firms active in the delta is 38,000-40,000, only 8% of the nation’s total, well below the 23% recorded shortly after the introduction in 2000 of the historic Enterprise Law.

He said this explained why the Mekong Delta provinces’ budget revenues had been running low.

The Mekong Delta has attracted the least foreign direct investment capital (FDI) in the country with around US$1.2 billion of FDI approved annually, less than 5% of the country’s total.

He noted poor infrastructure, low-quality human resources and financial constraints had been and would continue to be three major impediments to economic development in the delta.

My Thuan and Can Tho bridges are among the major achievements in the delta’s infrastructure development drive but the delta still has a long way to go to complete its infrastructure networks.

For instance, work on two sections of an expressway linking HCMC and the delta’s Can Tho City has dragged on. The 51-kilometer section between Trung Luong of Tien Giang Province and My Thuan and another of 32 kilometers connecting My Thuan and Can Tho broke ground long ago.

The delta is facing a labor oversupply due to the limited number of enterprises, so many youngsters have left their hometowns for HCMC, Binh Duong, and Dong Nai, which are home to a lot of industrial parks, to look for jobs.

Another issue involving labor is its low quality. A research project undertaken by VCCI Can Tho shows the delta seriously lacks skilled workers, even those having a mid-level skills set.

The delta has long relied on rice, seafood and fruit as major revenue generators. But, Dung said, the export of these items has contributed little to the delta’s economic growth as rice export brings US$3 billion and seafood around US$4 billion a year.

Vietnam expects to manufacture 200,000 automobiles in 2015

Vietnam is expected to manufacture 200,000 automobiles and 4 million motorbikes in 2015, marking respective yearly rises of 4.4 percent and 2 percent during the 2011-2015 period, according to the Heavy Industry Department of the Ministry of Industry and Trade.

Though the sales of motorbikes slowed down, the automobile market saw signs of rebound, especially during the late 2014 compared to the same period of 2012 and 2013, Deputy Minister of Industry and Trade Nguyen Cam Tu told a conference to review the ministry’s 2014 performance and launch its tasks for 2015.

Truong Thanh Hoai, head of the Heavy Industry Department attributed the significant car sales to a 2 percent cut in registration fee from 12 percent, adding that trucks assembled at home are gaining popularity, especially light-weight category.

Last year, 3.3 million cars and 128,000 motorbikes were manufactured, the ministry reported.

About two million cars and 37 million motorcycles are on the roads of Vietnam, which has a population of more than 90 million.

Restructuring crucial to 2015 economic development

Restructuring State-owned enterprises (SOEs), credit institutions, securities market, and the farming sector is part of socio-economic development measures for 2015, as stipulated in Resolution 01/NQ-CP recently issued by the Government.

Ministries, agencies and localities are requested to keep carrying out an overall plan on economic restructuring and submit their own well thought out restructuring schemes to authorities concerned no later than the end of the second quarter.

SOEs will focus on equitising and withdrawing capital from non-core businesses, while working on additional plans for the post-2015.

In the meantime, credit institutions are tasked with improving their governance, risk management, auditing and technology capabilities while keeping up to international practices, towards embracing Basel II capital standards step-by-step.

The restructuring of the securities market will continue in line with a government’s blueprint set previously, making it easier to lure investment in and outside the country and deal with bad debts.

The farming sector’s rearrangement covers across cultivation, animal husbandry, aquaculture, forestry, processing, and services. The new rural area construction programme is required to be stepped up towards set goals. Investors are encouraged to involve in agriculture and rural development.

Industries having a high level of technology, added value, and localisation rate will be boosted, especially the support industry, renewable energy, electronics, engineering, information and bio-technology, oil and gas exploration and processing, and environment, among others.

Exchange rate increases by one percent

The State Bank of Vietnam (SBV) has decided to raise the VND/USD exchange rate by one percent from 21,246 VND to 21,458 VND per USD from January 7.

Under the adjustment, the exchange rate at banks will range from 21,243 VND per USD to 21,673 VND per USD.

The move aims to realise Resolution No.1/NQ-CP issued on January 3 stipulating tasks and solutions to fulfil the country’s socio-economic development plan and the State budget estimates in 2015, the bank said in its website.

The central bank will continue to flexibly manage the monetary policy in a close relation with the fiscal policy to control inflation, ensure macro-economic stability and boost economic growth.

Despite fluctuations in the global financial market in 2014, the SBV guaranteed a stable exchange rate with the only one increase of 1 percent in June.

The outcome was attributed to the bank’s effective management of the monetary and remittance policies in addition to its commitment to further stabilising the exchange rate to enhance confidence in Vietnam dong.

Tien Giang targets 1.6 billion USD in export turnover

The Mekong Delta province of Tien Giang strives to earn 1.6 billion USD from exports in 2015, a year-on-year increase of 8.1 percent.

The locality also aims for an average annual export growth of 23 percent in the 2011-2015 period, surpassing the set target by 5-7 percent.

To realise the goal, Tien Giang will continue to lure investment in industrial parks and clusters as well as help investors address difficulties and complete procedures for the scheduled implementation of their projects.

It also plans to encourage businesses to diversify their exports and take measures to improve product quality and competitiveness while providing them with updated information on export markets.

Last year, the province’s export value hit a record of 1.48 billion USD, exceeding the set target by 26.5 percent and up 23.8 percent against 2013. Major exports were garments, processed seafood and plastic products.

According to a report by the provincial industrial zone management board, in 2014, local industrial parks attracted five new projects and saw four others added investment with a total capital of over 71.6 million USD.

The four industrial clusters of An Thanh, Song Thuan, Trung An and Tan My Chanh were fully filled with 83 projects, creating 12,000 jobs.

During the year, businesses operating at the industrial parks exported more than 1 billion USD worth of commodities, almost doubling the 2013 figure.

Dong Nai, together with Binh Duong, Tay Ninh, Ba Ria-Vung Tau, Binh Phuoc, Long An and Tien Giang provinces and Ho Chi Minh City, form Vietnam’s southern key economic region.

Vietcombank posts impressive results by reducing NPLs

The Bank for Foreign Trade of Vietnam's (Vietcombank's) non-performing loans (NPLs) fell to 2.3 percent at the end of last year, from 3.09 percent in Q2 of 2014.

Online newspaper VnEconomy quoted a report from the bank, saying that Vietcombank successfully handled more than 1.8 trillion VND (84.5 million USD) in NPLs last year, doubling the amount seen in the previous year.

Vietcombank's risk provision fund also reached 4.535 trillion VND (212.91 million USD) by the end of last year, which nearly equivalent to the bank's total NPLs. The fund expanded by 29.2 percent, compared with 2013.

The bank attributed its success in handling NPLs to economic recovery, an improvement in firms' businesses, production performance, effective policies, as well as timely support lent to for customers in terms of access to credit.

Additionally, the bank's measures for handling NPLs included direct participation of leaders and staff at the bank's headquarters that also helped it report a high record for activity. Earlier, only the bank's branches had taken part in handling NPLs.

The experience of handling NPLs contributed to the bank's significant post-tax profits last year, which reached 5.68 trillion VND (266.66 million USD), higher than the previous year and exceeding the bank's target set in early 2014.

Return on equity (ROE), return on assets (ROA) and the capital adequacy ratio (CAR) of the bank also improved, touching roughly 10.5 percent, 0.9 percent and 12 percent, respectively.

Last year, Vietcombank also reported a good result in credit growth, which was 18 percent, higher than the 15 percent targeted in early 2014.

The bank's deposits also surged by about 26 percent last year, despite an interest rate cut. The bank consecutively reduced deposit interest rates and implemented the lowest rate in the banking system last year.

Shares of Vietcombank (VCB) jumped 37 percent last year, closing at 31,900 VND (1.497 USD) per share, the highest price level among banks listed on the stock exchange.

Dong Nai province looks towards green production

The southern province of Dong Nai will realise its green production target from now to 2020 with special focus on support industries and hi-tech projects that are environmentally friendly.

To pursue sustainable development, the province will boost economic growth in combination with ensuring social security and environmental protection, said Director of the provincial Department of Planning and Investment Bo Ngoc Thu.

Therefore, the locality aims to attract only 1 billion USD in foreign direct investment (FDI) this year, she said, adding that it will continue to help businesses overcome difficulties as well as streamline administrative formalities and create a favourable investment climate to lure foreign investors.

In 2014, Dong Nai attracted over 1.6 billion USD in FDI, half of which went to hi-tech and support industry projects.

The outcome was attributed to local efforts in supporting enterprises through regular meetings and accelerating administrative reform via the application of the one-stop-shop mechanism, Thu said.-

Vietnam targets 6.2 percent economic expansion for 2015

Vietnam targets a gross domestic product (GDP) growth of 6.2 percent and a 10 percent rise in export value in 2015, according to recently-issued Government Resolution 01/NQ-CP on key tasks and measures to realise the 2015 socio-economic development.

The consumer price index is expected to increase by 5 percent while total investment for socio-economic development will make up 30-32 percent of GDP.

The nation-wide rate of poor households is forecast to fall 1.7-2 percent and roughly 1.6 million jobs will be created.

These targets were approved by the National Assembly, according to the resolution.

To do that, the resolution asks for strengthening macro-economic stability by clearing business hurdles, going forward with strategic breakthroughs and economic restructuring in tandem with shifting to a new growth model and improving the national economy’s competitiveness.

More attention is to be paid to the development of socio-cultural life, education, science-technology, environment protection and public well-being, the acceleration of administrative and judicial reforms, especially the fight against corruption and wastefulness.

The government has set to strengthen defence-security, firmly safeguard national sovereignty, and ensure political security and social order.

It will also improve external relations work and continue the path of international integration and cooperation.-

Rice sector restructuring to be prioritised in 2015

The restructuring of the rice sector will be accelerated this year in an attempt to increase production efficiency and farmers’ income.

Under the restructuring plan, 104,000 hectares of rice farming area will be covered by other crops, mainly maize, pushing the year’s total rice cultivation area down to 7.68 million hectares with an estimated output of 43.85 million tonnes.

In addition, the plan will create favourable conditions for farmers to shift from growing rice to some fruit trees such as orange and banana.

The country’s rice production was estimated at 45 million tonnes in 2014, up almost 800,000 tonnes over the previous year, according to the Ministry of Agriculture and Rural Development.

Vietnam, Algeria target 470 mln USD in two-way trade in 2015

Vietnam and Algeria are aiming for 470 million USD in two-way trade in 2015, up 20 percent against last year, Commercial Counsellor Nguyen Van Mui said.

To achieve the target, Vietnam should hold more trade and investment promotion activities in the country, Mui said.

He also called for bettering connection between the two sides’ businesses via exhibitions and trade fairs in both countries, in a bid to help them find partners and opportunities.

According to the official, there are great potentials for bilateral cooperation in the fields of construction, agro-fishery product processing, consumer goods, pharmaceuticals and tourism, as Vietnam has strong businesses and good experience while Algeria also wants to attract investment in these fields.

An oil and gas joint venture between PetroVietnam and Algerian partners is expected to start exploitation in the first quarter this year, with daily output of about 20,000 barrels.

In addition, Vietnam hopes to send 1,000 workers to the African country this year.

The two countries have set the target of 1 billion USD in two-way trade by 2020, and increase the number of Vietnamese skilled workers and technicians working in Algeria to 1,500-2,000.

Bilateral trade turnover reached a record 370 million USD in 2014, up 30 percent against 2013. Most of the trade value came from Vietnam’s exports, including 135 million USD worth of coffee, 95 million USD worth of phones and parts and 28 million USD worth of rice. Algeria’ exports to Vietnam stood at only 800,000 USD.

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