PwC launches tool measuring DI     

PricewaterhouseCoopers launched a new tool to help companies around the world measure the maturity of their Diversity and Inclusion (D&I) programmes on Wednesday.

By taking an online survey, firms can compare programmes to others in their industry and region and analyse responses to understand how mature the components of their D&I programme are (emerging, basic, progressing or differentiated).

“Diversity is all about including and involving and thus invigorating the workplace. This helps drive innovation. Decades of research have shown that diversity is good for business. Many organisations are focusing on creating a more inclusive work environment, but these efforts are not always successful. Our new online tool will help organisations find out why and what they can do to improve their D&I programmes,” said Sharmila Karve, PwC’s newly appointed Global Diversity and Inclusion leader.

The global, cross-industry PwC survey of 500 business, D&I, and HR leaders who develop and execute their organisation’s D&I strategies is aimed at understanding what programmes they have in place, and the impact these are having.

While 91 per cent of respondents agreed that D&I is a priority for their organisation, 48 per cent said that from an employee perspective, diversity is a barrier to progression at their organisation.

This is in part because their D&I programme has not effectively achieved its objectives. Respondents from local companies were significantly less likely to see diversity as a barrier (25 per cent) than their peers at companies with a global footprint (43 per cent).

PwC is a network of firms in 157 countries with more than 223,000 employees delivering advisory and tax services. PwC Vietnam established offices in Ha Noi and HCM City in 1994, and it now has over 750 local and expatriate staff. 

Southern co-operatives eye global integration   

Co-operatives in southern provinces are ready for greater integration into the international market by increasing their prestige and improving product quality, according to the Southern Centre for Support and Development of Co-operatives, Small and Medium Enterprises (Socencoop).

According to Socencoop, in recent time 4,000 co-operatives in the southern region have made efforts to grow clean agricultural products to meet the high demand in domestic and global markets as well as the high quality standards of the latter.

The results of these efforts are evident at an event organised in HCM City where 100 co-operatives from 17 southern cities and provinces are showcasing their organic vegetables, fruits and foods as well as handicrafts.

The products include Tân Triều pomelo from Đồng Nai Province, cashew from Bình Phước, dragon fruit from Bình Thuận, mango from Đồng Tháp, Lò Rèn milk fruit from Tiền Giang, Hoà Lộc mango from Vĩnh Long and lemon from Long An.

Socencoop said at the two-day event, which is being organised to popularise co-operatives’ produce, the co-operatives would sign many contracts with retailers to increase their sales, especially with the Lunar New Year approaching.

Many contracts will also be signed with foreign partners to improve their technologies and skills.

Lê Binh Hùng, director of Seconcoop, said through the event and agreements, co-operatives want to show that they are ready to co-operate with companies and retailers to create a competitive value chain so that Vietnamese companies can successfully integrate into the world and regional markets.

Such exhibitions have been organised thrice responding the Ministry of Agriculture and Rural Development’s programme to develop clean agriculture.

Last year the event had attracted 60 co-operatives and 400 of their partners, and dozens of contracts were signed.

This year, to achieve even better results, co-operatives will go around visiting HCM City’s markets to explore tie-up opportunities on January 7. 

Industry told to rely less on fleeting strengths     

Prime Minister Nguyen Xuan Phuc has called for reduced dependence on “unsustainable advantages and natural resources” and greater reliance on creativity, science and technology to boost industrial growth.

His comments came at a 2016 review meeting held in Ha Noi yesterday, during which he praised the Ministry of Industry and Trade (MoIT) for its successes in restructuring via reducing the number of units and staff while improving its effectiveness.

“It has stumbled, but not fallen. It has shown strong improvement,” he said at a conference yesterday.

Phuc said that while the ministry removed several superfluous administrative procedures to resolve difficulties faced by people and businesses, it experienced limitations including decreasing output and crude oil prices, exerting pressure on the State budget.

Many projects had been tardy and suffered prolonged losses. Some planning strategies had not been effective, and failed to create the needed momentum to attract investment from the private sector, including into industries and sectors like automobile, mechanics, steel and electricity.

The PM said the market watch and trade border management agencies had also not been fully effective against smuggling and multi-level marketing activities. In addition, the restructuring of State-owned enterprises had been slow.

Some issues relating to the hiring of staff had dented the Ministry’s image, he noted.

“The Ministry should strive to develop the country’s industrial sector by reducing dependence on unsustainable advantages and natural resources such as crude oil, coal and minerals. The sector should base itself on science and technology and creativity to generate its development momentum,” he said.

He asked the ministry to formulate specific policies for development of key industrial products like automobiles, electronics and mechanics.

It should also develop industry to serve hi-tech agriculture, he added.

He also asked the ministry to build a national brand for key Vietnamese products.

The PM urged the industrial sector to quickly and actively integrate with and exploit ASEAN and China markets. The country should take advantage of trade pacts, improving market management and reducing counterfeit goods.

The mechanisms for e-commerce development and border trade should strive to break new ground, he said.

“The issue is also how to better exploit the local market with a population of around 100 million. The ministry should encourage Vietnamese people to use Vietnamese goods of high quality and reasonable prices,” he said.

Industry and Trade Minister Tran Tuan Anh said the ministry had set four targets to help the country’s gross domestic product (GDP) grow by 6.7 per cent in 2017: increase industrial production index by 8-9 per cent; exports by more than 6-7 per cent; keep trade deficit to under 3.5 per cent of export revenues; and increase retail goods sales and service revenues by 10-11 per cent.

The ministry would step up restructuring of the industrial sector by stepping up development of processing and manufacturing sectors while reducing outwork and assembly of industrial products, he said.

Apart from removing a number of complicated administrative procedures, the ministry would strive to create the best conditions for enterprises to develop, the minister said.

He also said the ministry would take full advantage of free trade agreements (FTA) to actively support domestic enterprises participate in global supply chains.

It would also put forth policies to provide more assistance for support industries, while working with the involved parties to simplify customs procedures and supply businesses with useful information to prevent and handle trade disputes, he affirmed.

Anh proposed that the PM approves a particular mechanism to implement urgent power projects, a plan to restructure businesses under the Electricity of Viet Nam Group (EVN) in the 2016-20 period, and a strategic scheme to develop the power sector through 2025 with a vision towards 2040.

He also recommended that the Government approves a framework for average retail electricity prices between 2017 and 2018, and a decision to increase the EVN’s chartered capital.

The Minister asked the government to direct the Ministry of Finance to support the Viet Nam National Oil and Gas Group (PetroVietnam) in implementing the government guaranteed undertaking (GGU) commitments on preferential tariffs for the Nghi Son Refinery and Petrochemical Complex for 10 years of commercial operations.

He also suggested the government consider ways to support the oil and gas, coal, and fertilizer sectors and amend Decree No 203/2013/ND-CP on calculating and collecting money from minerals mining.

Thua Thien-Hue province targets 12% rise in exports

The central province of Thua Thien-Hue aims to earn US$800 million from exports in 2017, a year-on-year increase of 11.58 per cent.

The locality will diversify export commodities and seek new markets to attain the target, according to Nguyen Thanh, Director of the provincial Department of Industry and Trade.

The province, which is part of the central key economic region, will also press ahead with solutions to remove obstacles to business growth and boost exports of processed and hi-tech products, while gradually reducing the proportion of unprocessed goods in the export structure.

It will also facilitate local exporters’ access to credit sources and encourage them to manufacture products that are Thua Thien-Hue’s strength.

In the textile and apparel field, which is a big foreign currency earner, the province is going to call on businesses to gradually switch to free-on-board manufacturing instead of cut-make-trim, thereby improving export value and workers’ income, Thanh noted. Thua Thien-Hue raked in $717 million from exports in 2016, up 7.74 per cent from the previous year, which consisted of overseas shipments worth $292 million by domestic companies and $424 million made by foreign invested firms, respectively, rising by 4.91 per cent and 9.78 per cent from a year earlier.

Up to 65 per cent of the total shipment was contributed by garment exports, which hit a record of over $465 million last year, up 8.98 per cent from 2015. Meanwhile, fibre and textile exports brought home $117 million, climbing 18.89 per cent and making up 16.32 per cent of the province’s total shipments.

Aquatic exports approximated $47 million last year, a year-on-year increase of 26.62 per cent, data revealed. 

Promoting sustainable timber trade in Việt Nam

Việt Nam will be assisted with carrying out legal and responsible timber trade by the "Responsible Asia Forestry & Trade Partnership" programme that it signed yesterday with the World Wide Fund for Nature (WWF), TRAFFIC and RECOFTC.

The project, which will help achieve sustainable afforestation and forest management and improve officials’ capacity and is funded by the Australian Government through The Nature Conservancy organisation (TNC), will run through March next year.

It is divided into two main components focused on promoting sustainable plantation management based on international standards and strengthening implementation of responsible and legal timber trade.

With most people thought to be unaware of the definition of sustainable and responsible timber products, the project will seek to create basic awareness among the public, manufacturers and businesses to create a market for responsible timber products in Việt Nam.

This approach will not only bring permanent benefits to the environment and society, but also help combat illegal trade in timber, boost investment in environmental protection and generally enhance the reputation of the Vietnamese market.

Talking about the specific goals of the project, Lê Thiện Đức, forest programme coordinator of WWF-Việt Nam, said: "The Việt Nam Ministry of Agriculture and Rural Development has set a target that by 2020 at least 500,000 hectares of forests should be certified, but only 219,245 ha have been certified so far.”

To help achieve the target, the project aims to get at least 3,000ha of forests certified as sustainable.

In addition, at least one significant policy for promoting sustainable forest management will be developed or modified, legal timber trade and transparency will be enhanced, and a domestic market for certified forest products will be created.

To achieve this ambition, the project will identify forest areas that have the potential for certification for other programmes or the Government to get them certified, build capacity of forest owners by creating a manual for forest certification and sustainable forest management, and support a review and modification of policies to promote sustainable forest management.

These activities are expected to bring social and environmental benefits to people living near forests and forestry workers by reducing illegal logging and helping conserve forests.

The EU developed the FLEGT action plan (Forest Law Enforcement, Governance and Trade Forest Products) in 2003 requiring timber-producing countries to prove the legal origin of their timber and timber products.

As the EU is one of the main import markets for Vietnamese wood products, Việt Nam is forced to comply with this.                 

There is a need to build capacity among Vietnamese wood enterprises to classify and identify legal timber.

Though there is CITES and the Decree on Management of Endangered, Precious and Rare Forest Plants and Animals, there is no definitive list of timber species that cannot be traded.

This causes difficulties in managing timber trade.

The Responsible Asia Forestry & Trade partnership brings together the skills and knowledge of seven leading nature conservation organisations.

The partnership assists governments, businesses and communities to achieve higher standards in natural forest and plantation management and commodity trade.

Jetstar starts 2017 out with ridiculously cheap flights

Jetstar Pacific has unveiled it will operate a new route connecting the capital city of Hanoi to the city of Pleiku in the Central Highland province of Gia Lai as part of the airline's new 2017 plan.

The low-cost airline announced the new route has begun operating immediately, with the first flight having lifted off on January 6 at 6:10am from the Noi Bai International Airport carrying 369 passengers.

The new route will run on Wednesdays, Fridays and Sundays. Flight time is 1 hour 40 minutes each way.

In connection with the opening of the new route, the airline is offering specially priced tickets at ridiculously low prices starting at just US$1.68 (VND37,000) each way.

Tickets can be purchased at the airline’s website www.jetstar.com.

Vietnam to export processed chicken to Japan, EU

This year Vietnam expects to ship processed chicken to demanding markets like Japan and the EU, said Hoang Thanh Van, head of the Animal Husbandry Department under the Ministry of Agriculture and Rural Development.

Mr Van said Dong Nai province has proposed a safe pig-breeding model incorporating bio-safety measures to ensure the quality of processed chicken exported to Japan.

A number of businesses has made promotion tours of Japan to introduce their products. After the Japanese businesses reach an agreement with their Vietnamese partners, they will come to Dong Nai for inspection and signing deals, Mr Van said.

Van also revealed that businesses in Binh Phuoc province are conducting trade promotion activities in Japan, EU and some Asian countries.

To infiltrate these demanding markets, Vietnam businesses should meet their strict requirements on food hygiene and safety, origin of products and a series of technical barriers.

Lam Dong puts into operation hydropower plant

The Krong No 2 hydropower plant began operation in the Central Highlands province of Lam Dong’s Lac Duong district on January 7.

The 30MW plant is capable of producing nearly 106 million kWh of electricity annually.

The facility’s associated reservoir has a full storage capacity of 9,356 million cubic metres of water.

Built at a cost of more than 1.4 trillion VND (62.1 million USD), the project is the second of its kind on the Krong No River. 

The two Krong No hydropower plants generate a total of 170 million kWh of electricity on a yearly basis.

Solar panel-producing factory inaugurated in Bac Giang

The 100 million USD factory manufacturing solar panels Trina Solar (Vietnam) was put into operation on January 6 in the Quang Chau Industrial Park in Viet Yen district, northern Bac Giang province.

The factory, which has a capacity of 800 MW per year, is the seventh one going into operation in Bac Giang province.

A total of eight projects on solar panels with a total capital of 635 million USD have been registered in Bac Giang. These projects have a total capacity of 5,200MW per year.

Speaking at the ceremony, Nguyen Van Linh, Chairman of the Bac Giang People’s Committee, asked relevant agencies to implement all tasks assigned to create most favourable conditions for enterprises.

Ceiling power prices unchanged

The Ministry of Industry and Trade has decided to keep thermal and hydroelectric power price ceilings unchanged in 2017.

According to a decision stipulating new electricity tariffs, the ceiling price for power generation of thermal electricity plants excluding value-added tax (VAT) will be 1,568 VND per kWh (about 7 US cent).

The power price for the thermal electricity plants was calculated based on the coal price (including losses, management cost, insurance and excluding transport cost) of 1.3 million VND per tonne.

The hydroelectricity plant price ceiling will be 1,070 VND per kWh, excluding tax on water resources, environment fee and VAT.

The decision took effect January 1st, 2017. The ministry required the Electricity of Vietnam (EVN) to report difficulties to the Electricity Regulatory Authority of Vietnam during the decision implementation.

Based on electricity tariff ceilings, EVN and power generation units negotiate selling prices to follow the current legal regulations.

In 2015, the ceiling prices for power generation of thermal electricity and hydroelectricity were 1,060 VND and 1,383 VND per kWh.

During a recent conference to review EVN’s 2017 business operation plans, Dang Hoang An, the group’s general director, said its electricity production costs this year will increase by 5 trillion VND (225 million USD), as coal prices sold to electricity rose by 7 percent from the end of last year.

Leather, footwear sector forecasts 18 bln USD of export earnings

The leather and footwear sector forecasts that its export earnings can reach 18 billion USD this year, up more than 10 percent from 2016, while manufacturing index would grow by 5 percent. 

According to experts, orders for footwear and bag processing may be diverted from factories in China to those in Vietnam. The shift is attributable to China’s cut back on incentives for investment in garment and footwear sector to focus on high technology. 

Another factor is the Vietnam-European Union free trade agreement which will take effect in 2018 and afford Vietnamese footwear makers more chances to boost export. 

The Vietnam Leather, Footwear and Handbag Association reported that the sector raked in 16.2 billion USD from export last year, up 8.8 percent from 2015. Of which, 13 billion USD was from footwear and the remaining was from handbags and leather items, marking respective annual increases of 8.2 percent and 11.1 percent. 

Footwear currently ranks fourth and suitcase-bag-briefcase ranks tenth among Vietnam’s top 10 foreign currency earners. 

The sector’s manufacturing index in 2016 rose a modest 3.7 percent year-on-year, much lower than the 17.4 percent and 22 percent growth in 2015 and 2014, respectively, due to fluctuations in the world economic situation and falling demand, especially from the EU.

Vietnam to suspend tamarind imports from Indonesia

Vietnam is to suspend the import of tamarind (tamarindus indica) from Indonesia as the product is contaminated with insects subject to Vietnam’s plant quarantine. 

The decision was made by the Ministry of Agriculture and Rural Development on January 6. The suspension will take effect after 60 days from the signing of the decision.

The Ministry assigned the Plant Protection Department to closely supervise the import of the product during the pending enforcement of the decision.

It will also notify Indonesia’s authorised agencies about the issue for thorough remedies.

Jetstar Pacific launches Hanoi-Pleiku route

Low-cost carrier Jetstar Pacific on January 6 officially launched an air route linking the capital city of Hanoi with Pleiku city in the Central Highlands province of Gia Lai.

This is Jetstar’s second service to the city after the Ho Chi Minh City-Pleiku route with one flight per week.

The first Hanoi-Pleiku flight with 369 passengers aboard took off from Hanoi’s Noi Bai International Airport at 6:10 and landed in the Pleiku airport after one hour and 40 minutes. The return flight took off at 8:25. 

Initially, Jetstar Pacific will run three return flights each week in the route on Wednesday, Friday and Sunday. A representative from the airline revealed that the carrier has so far sold nearly 5,000 tickets for the flights.

Jetstar Pacific is operating eight air routes to the Central Highlands region out of its total 35 international and domestic routes.

The carrier plans to launch flights between Hanoi and Guangzhou (China) on January 15.

On the occasion, Jetstar offers special promotion on all routes at a price from only 37,000 VND (1.68 USD) from January 6-8.

Vietnam produces 17.5 million tonnes of steel in 2016

The steel sector turned out 17.5 million tonnes of products last year, up 16.8 percent from 2015, according to the Vietnam Steel Association (VSA).

Meanwhile, more than 15.3 million tonnes were sold, representing an annual increasing of 23.7 percent.

VSA Chairman Ho Nghia Dung said the growth of construction steel, which makes up about 50 percent of the total steel products, was a highlight in 2016.

Production of construction steel last year was over 8.5 million tonnes, an increase of 18.3 percent year on year and the sales of the product also jumped 20.6 percent to 8.4 million tonnes.

In 2016, the sector exported 2.4 billion USD worth of goods, but posted total import costs of 9.1 billion USD.

Due to uneven development within the sector, Vietnam has to import large volumes of materials and semi-processed products to serve production. The country imported more than 1.8 million tonnes of pre-painted galvanised iron as well as 8.1 million tonnes of alloy steel.

Despite spare production capacity in steel billets manufacturing, the country still bought more than 1.1 million tonnes of the products or 12.6 percent of the total billets available in the market last year.

Overall, the sector grew 18.1 percent in 2016. The VSA projected a 12-percent growth for it this year. 

The VSA said it will continue working with relevant agencies to promote domestic production and conduct anti-dumping investigations on imported steel products.

Yen Bai calls for investments from RoK

The People’s Committee of the northern mountainous province of Yen Bai organised a conference in Seoul, the Republic of Korea (RoK), on January 6 to introduce its development potentials and investment opportunities.

The event was attended by Pham Thi Thanh Tra, Secretary of the province Party Committee and Chairwoman of the provincial People’s Committee, Vietnamese Ambassador to the RoK Pham Huu Chi and representatives from relevant sectors and around 150 RoK businesses.

Addressing the event, Tra praised RoK enterprises’ contributions to Yen Bai’s socio-economic development as well as the relationship between the two nations.

She pledged that the local authorities will create optimal conditions for foreign investors, including those from the RoK, to do business in the province.

Yen Bai has a crucial political and economic geographical location in the north of Vietnam with advantageous traffic networks, including land, waterway and railway routes, Tra said.

The province also has huge potentials for the development of processing, trade and agro-forestry-mineral exports, renewable energy and tourism.

Having underlined human resources as Yen Bai’s most important potential, the official added that the province has continuously created a favourable and safe investment environment, offered incentives for investors and ensured human resources for businesses.

Meanwhile, Ambassador Chi highlighted the event as one of the first investment promotion activities of a Vietnamese locality in the RoK in 2017, marking the upcoming 25th anniversary of diplomatic ties between the two nations.

He also spoke highly of the efforts made by Yen Bai authorities to lure foreign investments, particularly from the RoK on the basic of mutual benefits.

Within the framework of the conference, the Yen Bai People’s Committee and Solkiss Company of the RoK signed a memorandum of understanding to build a renewable energy plant in the province.

Industry-trade ministry to focus on four targets

The Ministry of Industry and Trade has set four targets to help the country’s gross domestic product (GDP) expand by 6.7 percent in 2017, Minister Tran Tuan Anh said at a conference in Hanoi on January 6.

The industrial production index is expected to increase by 8-9 percent while the export growth is hoped to surpass 6-7 percent, and trade deficit is kept under 3.5 percent of the export revenue. The total retail goods sales and service revenue are projected to grow by around 10-11 percent this year, Anh noted.

In the foreseeable future, the ministry will step up the restructuring of the industry towards enhancing the development of the processing and manufacturing sectors while reducing the outwork and assembly of made-in-Vietnam industrial products, he said.

Apart from removing a number of complicated administrative procedures, the ministry will improve the business environment to create the best conditions for enterprises to develop, the minister added.

The ministry will take full advantage of free trade agreements (FTA) to actively support domestic enterprises to participate in the global supply chains.

Additionally, the ministry will put forth policies to provide more assistance for the supporting industry, while working with the involved parties to simplify customs procedures and supply businesses with useful information to prevent and handle trade disputes, he affirmed.

At the conference, Anh proposed the Prime Minister approve a particular mechanism to implement urgent power projects, a plan for the restructuring of businesses under the Electricity of Vietnam Group (EVN) in the 2016-2020 period, and a strategic scheme to develop the power sector through 2025 and with a vision towards 2040.

He also recommended the government approve a framework for the average retail electricity prices between 2017 and 2018, and a decision to increase the EVN chartered capital.

The Minister asked the government to direct the Ministry of Finance to support the Vietnam National Oil and Gas Group (PetroVietnam) to implement the government guarantee undertaking (GGU) commitments on preferential tariff for the Nghi Son Refinery and Petrochemical Complex within 10 years after its commercial operation.

He also suggested the government mull over solutions to support the oil and gas, coal, and fertilizer sectors and adjust the Government Decree No.203/2013/ND-CP on the method of calculation and collection of money from mineral mining.

Deputy PM asks for better urban management

Infrastructure development cannot meet demand if management capacity is poor, stated Deputy Prime Minister Trinh Dinh Dung at a Ministry of Construction’s conference on January 6 to launch its 2017 tasks.

The Deputy PM pointed to Hanoi and Ho Chi Minh as two major cities failing to ensure construction is made in line with urban planning, holding that the traffic congestion in the two cities cannot be dealt with by increasing investment in infrastructure.

Pouring more investment in developing infrastructure and transportation systems in Hanoi and Ho Chi Minh City will attract more people from other localities to the cities, therefore, infrastructure will never keep pace with demand, Deputy PM Dung analysed.

He asked for closer monitoring of the implementation of urban planning, stressing that to thoroughly address traffic congestion in the country’s two largest cities, it is necessary to carry out an overall national planning of urban areas, including investment in satellite urban areas and public transportation.

Minister of Construction Pham Hong Ha acknowledged the poor management in realising urban planning, pledging that the ministry will take drastic solutions right from early this year.

In 2017, the sector will continue completing institution, preventing loss and corruption, said the minister, adding that it will also work hard to create an equal and fair business environment for all organisations, businesses and individuals.

Last year, investment in construction accounted for nearly 80 percent of total 1.4 quadrillion VND social investment. The sector recorded a growth of 10 percent and made up 6.19 percent of the country’s GDP.

HCM City ensures sufficient Tet goods

Ho Chi Minh City is preparing a large quantity of goods, thereby meeting half of market demands during Tet (Lunar New Year festival).

At a meeting organized by the municipal People’s Committee on January 8, the local leaders said businesses will distribute goods worth more than US$400 million.

Nguyen Huynh Trang, Vice Director of the Department of Industry and Trade said 10,000 shops are selling Tet goods, mostly food, at lower prices. In addition, there are 198 food vans this month.

The municipal authorities asked banks which are running 4,200 ATMs to supply enough cash to customers during Tet holidays.

Vietnam’s exports overcome difficulties in 2016

2016 has seen many milestones with Vietnam signing free trade deals which have benefited its economy.

Although export revenues in key industries like garments and textiles, leather footwear, and farm produce have fallen short of set targets, businesses have generally fared well despite global economic difficulties.

Vietnam’s total import-export revenue is estimated to grow up to 7.5% in 2016 reaching approximately US$170 billion. Though export growth has been steady, it remains 10% below the set target, mainly because of a sharp decline in prices for crude oil, processed products, and other exports.

Garments and textiles, one of Vietnam’s key export sectors, has not been spared.

Phan Thi Thanh Xuan, Secretary General of Vietnam’s Leather, Footwear, and Handbag Association, said “The sector’s turnover has been hurt by the sharp decline of key import markets like the EU, particularly the UK. We have targeted a growth of 10% and a revenue of more than US$16 billion for 2016, but it’s likely to achieve only 8%.”

Although the export target for this year hasn’t been reached, several new products have seen high growth rates, including fruits and vegetables, up 30% from last year; confectionary, 17%; and cattle-feed, 17%. Coffee, cashew nuts, pepper, and seafood. For instance, Vietnam’s tra fish is now available in 140 markets, four markets more than last year. Exports to the US, the biggest market for Vietnamese tra fish, has reached US$360 million, 20% of the total export value.

“Our solutions to boost growth are linked to improving quality and productivity. The government has put forth many measures, especially for agriculture, to promote start-ups and high-tech application in the agricultural sector. Other sectors like industry and service have also made great efforts to restructure and improve their institutions,” said economist Luu Bich Ho.

Tran Thanh Hai, Deputy Director of the Exports-Imports Department of the Ministry of Industry and Trade, said Vietnam’s 7% growth rate is an achievement.

“On top of market expansion, we should focus on taking up the products in which we have an advantage on the world map. 5 years ago Vietnam had no known name in technology or the cell phone assembly industry. But now we are becoming widely recognized. As a result, we should identify which export items are suitable for development,” said Hai.

Vietnam eyes cashless market with card payment scheme

A scheme to promote cashless payment in Vietnam in the 2016-20 period has been approved by Prime Minister Nguyen Xuan Phuc.

The plan is intended to have over 300,000 card readers installed at points of sale (POS) across the country by the end of 2020, which are expected to process around 200 million transactions a year.

All supermarkets, malls and modern distributors will be required to have card readers installed by that time to spur cashless payment, according to the scheme.

Seventy percent of suppliers of water, electricity, network and Internet services are to accept card or online payment, which is meant to encourage half of the households in major cities to switch to these paying methods.

The scheme also looks to introduce modern payment services to rural and remote areas.

By the end of 2020, at least 70% of Vietnamese citizens from 15 years of age will have had a bank account, reducing the proportion of cash in all means of payment to below ten percent.

The efforts will include low fees for online payers of tax and administrative procedures and reduced charges for interbank transactions, while additional fees will be imposed on cash transactions.

There had been 106 million bank cards in use in Vietnam as of the second quarter of 2016, 3.5 times higher than the figure in 2010, according to statistics by the Payment Department under the State Bank of Vietnam.

Nationwide, there are over 17,330 ATM booths and more than 240,660 POS devices installed, according to the same source.

President meets 115 outstanding businesspeople

President Tran Dai Quang has urged businesspeople to strengthen their foothold in the domestic market and promote Vietnamese trademarks internationally.

At a meeting with 115 outstanding businesspeople in Hanoi on January 7, President Quang said the 12th National Party Congress was determined to push ahead with a comprehensive national reform and businesspeople were considered a vanguard force in the process.

“I expect Vietnamese entrepreneurs to develop specific action programs for production, trade, and market expansion, promote internal strength, attract foreign resources, acquire advanced technology and managerial knowledge, and improve product and service quality to strengthen Vietnam’s trademarks internationally," he said.

The State leader asked businesses to train competent staff and update their knowledge on international culture and laws.

Local retailers have big advantages over transnational chains

The current generation of Vietnamese are struggling with the most profound demographic transition ever and nowhere is this more evident than in the world of small retailers, speakers at a recent seminar in Hanoi have said.

Population growth, urbanization and the transition from small to larger businesses go together, they have said, averring that the large urban centres set the stage for enhanced innovation, efficiencies and competition.

In turn these factors provide the synergy for the country to move from low to middle-income status. No country in history has ever reached high income levels with low urbanization.

Whether this higher level of competition relates to retail, agriculture, manufacturing, services – or any other sector of the economy – it has and will continue to change the face of small business in Vietnam forever.

However, far too many people constantly complain that heightened competition is hard on the country’s generally small local retailers because they can’t compete with their larger transnational counterparts, said Nguyen Van Than, chair of Vietnam Association of Small Companies, at the event.

But that assertion is not true to any meaningful extent.

Mr Than said, with respect to transnational retailers, the complaints that he hears most is that they hire disinterested employees, are always out-of-stock for products customers want, have awkward return processes and always play music in the store far too loud.

They also charge unnecessary high restocking fees, have messy shelves and in general, customers struggle to find the products that they want in the store because they are not consistent in product placement or items stocked.

On the other hand, the small retailers in Vietnam, said Mr Than, can ensure that every employee in each of their stores is passionate about customer service and the products they sell— and easily outperform the larger transnational companies on customer service and inventory matters.

More importantly, small entrepreneurs willing to take a chance now have unlimited opportunity to source innovative products from all corners of the globe and bring their own unique tastes to the Vietnamese retail market.

Enterprising retailers can now search the globe for the unique dress, hat, handbag, necklace or other product that doesn’t look like the one everybody else is wearing that came off the discount rack at a Big C, Lotte, AEON or other transnational retail establishment.

There is a definite tectonic shift in Vietnamese consumers shopping habits away from visits to brick-and-mortar stores that offers another colossal advantage to Vietnamese small retailers.

Today’s consumers lead busy lives. Shopping takes time and more and more they view it as an unfavourable task. Notably, young consumers find researching and shopping on the internet far more convenient than brick-and-mortar visits.

They would rather shop online and then go directly and pick it up in-store.

The advantage to local retailers is that these shoppers would rather pick up at a storefront on the streets in Hanoi or Ho Chi Minh City anytime rather than fight the parking maze at the large malls.

If you've ever found yourself hopelessly lost in a mall in Hanoi you’re not alone, said Mr Than.

Just the thought of having to navigate the parking entrances, the motorbike exhaust fumes, and then zig-zag a trail through the parking garages and to a store and then back is disorienting.

What is stopping local Vietnamese retailers from success certainly is not the competition from transnational companies. If anything, local retailers should embellish the competition.

If they want to find a good location for a store, place it on the right side and within two blocks of any large transnational retail establishment. Make sure they have a big sign with quick and easy in and out access.

Entrepreneurs who succeed turn their smartphones off and spend time with personal development. They learn how to communicate in a clear, concise and compelling manner with associates and customers.

The simple truth is that there has never been more opportunity for a small retailer with the will and drive to succeed than there is in Vietnam today— if they reach out and seize the opportunities presented to them.

Cement overcapacity from 2017 predicted

The nation is expected to see cement overcapacity from 2017 as production has increased strongly in recent times while Vietnamese cement has turned less competitive on the world market.

cement overcapacity from 2017 predicted hinh 0 According to the Vietnam Cement Association, the industry’s total designed capacity amounted to nearly 88 million tons a year in 2016. With projects underway and finished in 2018 taken into account, the figure would shoot up to 108 million tons.

Furthermore, local enterprises have invested in technology upgrades, with the production capacity of the industry estimated to surge to 120-130 million tons in 2020.

Nguyen Quang Cung, chairman of the association, said domestic cement consumption is estimated at around 82 million tons a year before 2020, which means an annual oversupply of 36 to 47 million tons.

The nation consumed around 60 million tons of cement in 2016. If consumption rises by five to six million tons a year, the market demand is predicted to grow to 80-82 million tons in 2020. Therefore, the local market is expected to see a cement glut from this year, Cung said.

Starting cement exports in 2010, Vietnam became one of the biggest cement and clinker exporters in the world in 2014 with an export volume of 20 million tons. However, cement exports dropped 18% versus the previous year to 16.2 million tons in 2015 and slid a further 2% last year.

Export value also declined due to tough competition from China, India and other countries. Since 2014, China has actively launched low-priced cement onto regional and global markets given its overcapacity.

Meanwhile, Vietnamese exporters are concerned about more challenges when new policies become effective.

The Government issued Decree 100/2016/ND-CP on July 1, 2016 stipulating that exported goods processed from natural resources or minerals with a total value plus the cost of energy accounting for 51% of the final price or more will not get value added tax (VAT) refunds. 

Meanwhile, as per Decree 122/2016/ ND-CP on September 1, 2016, if the value of natural resources and minerals plus energy costs account for 51 % of the goods, they will be subject to an export tax rate of 5%.

When the regulations take effect, Vietnamese cement products will turn less competitive because export costs will increase. Some enterprises will have to stop production or go bankrupt, Cung said.

Therefore, the association suggested the Government and ministries put the implementation of the two decrees on hold. At a recent annual conference in Indonesia, the Cement Association of Southeast Asian Nations expressed concern over the Vietnam’s tax policies, saying that they may drag down the development of the cement industry.

In related news, Prime Minister Nguyen Xuan Phuc on January 2 attended a ground-breaking ceremony of Minh Tam cement factory in the southern Binh Phuoc Province. 

Covering 400 hectares, the project has total capital of VND12 trillion and production capacity of 4.5 million tons a year. Xuan Thanh Group, the investor of the cement factory, expects to finish construction within 24 months, Nguoi Lao Dong newspaper reports.

Vietsopetro targets higher increase in revenues, profits

The Vietnam – Russia oil and gas exploration joint venture Vietsovpetro has set its production targets for 2017.

It aims to fetch US$1.9 billion in revenues, a year-on-year increase of 11.7%, and gross nearly US$142 million in profits (for Vietnam) and US$136 million (for Russia), representing a yearly rise of 12.6% and 12.3% respectively.

The joint venture is expected to contribute US$775 million to the Vietnamese State budget, up 13.4%.

General Director of Vietnam National Oil and Gas Group Nguyen Vu Truong Son said Vietsovpetro will maintain search and exploration activities to fulfill this year’s target of exploiting 5 million tonnes of oil.

To reduce production costs, the venture will seek to optimise technologies and improve financial, risk and business management.

Another task is to train high-qualified engineers and experts to improve competitiveness, he noted.

General Director of Vietsovpetro Tu Thanh Nghia pointed to challenges that Vietsovpetro faced in 2016, including decreasing natural resources in oil fields, the quickly degrading technological system, and lower global oil prices.

However, with the efforts of Vietnamese and Russian businesses, Vietsovpetro overcame these challenges to fulfill and surpass most of its targets, he said.

Last year, Vietsovpetro realised the goal of exploiting 5.04 million tonnes of oil and bringing ashore about 1.68 billion cu.m. of gas (exceeding the yearly target by 30%).

Total revenue reached nearly US$1.7 billion, and State budget collection was estimated at more than US$683 million.

The Russian side earned profits of US$121 million, and Vietnam nearly US$126 million.

ROK businesses in Vietnam look to boost profitability

Transnational companies from the Republic of Korea (ROK) operating in Vietnam have yet to yield the profit levels they anticipated from investments in the emerging Southeast Asian country’s market, according to trade reports.

ROK companies had invested an aggregate total of US$15 billion in Vietnam as of the end of 2015, the third-largest amount of investment in any foreign country, according to the Korea Trade-investment Promotion Agency (KOTRA).

The rate of gross earnings was 2.3% (1.1% less than the 3.4% expected) and net earnings was 0.6% (2.0% below the anticipated 2.6% originally forecast) for Asian companies doing business in Vietnam.

The report said the profit performance might improve once a mega free trade agreement currently in the final stages of negotiation is concluded.

The 10 member states of the Association of Southeast Asian Nations plus the ROK, China, Japan, Australia, New Zealand and India are working on a Regional Comprehensive Economic Partnership that would create an economic bloc accounting for half of the globe’s population and nearly 30% of global gross domestic product.

The KOTRA report said the benefit of the new partnership for the ROK is that it can import raw materials and intermediary goods at a lower cost from among the participating countries and export finished products to countries like Vietnam.

Such process would bolster added value for ROK exporters, the report said, and elevate profits from sales in Vietnam.

Profitability of our companies should improve if they utilize the new partnership, Choi Yoon-jeong at KOTRA's global market strategy office has said. We need to set up a high-core strategy in advancing into Vietnam with a global value chain and the new partnership in mind.

Meanwhile, KOTRA reported that the expected profit boost from the first year of a free trade agreement between the ROK and Vietnam that came into force in December 2015 has yet failed to materialize.

As outlined in the agreement, Vietnam had agreed to phase in the elimination of import duties for 89.9% of ROK exports over a 15-year period and similarly the ROK in turn would remove tariffs for 95.4% of total import line items from Vietnam.

However, KOTRA said that a recent survey of ROK businesses operating in Vietnam showed that only an inconsequential 42% of the 60-surveyed said their sales went up because of the agreement and the effect on earnings remains unclear.

Roughly 6 out of 10 (63%) had a more favourable outlook on prospects for enhanced profits in 2017.

Tran Minh Trang, deputy head of the Ministry of Industry and Trade Export-Import Department, has said that Vietnamese businesses also have failed to gain in earnings from the new free trade agreement in its first year.

During the initial year, local businesses have neglected to pay attention to product quality considerations and in many instances agricultural exports were flatly rejected by the ROK government for import.

In addition, they did not pay proper heed to the ROK consumer and to simple things like utilizing attractive and eye-appealing packaging with interesting designs— all signs that local businesses are not capitalizing on the opportunities the new trade agreement offers.

Clearly local businesses are failing in the ROK market, she underscored, and if they hope to move to the top of the pyramid they need to rethink their strategies and institute structural changes and a strong commitment to win.

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