Deal to revive coffee industry

A strategic agreement to develop the Buôn Ma Thuột coffee brand is expected to revive the country’s coffee industry, which needs to replace thousands of old, unproductive trees on farms in the Central Highlands province of Đắk Lắk.

The agreement between Bình Điền Fertilizer Joint-Stock Company and Vinacafé Biên Hòa Joint-Stock Company, a member of the Masan Group Corp, was signed on Monday in the province in the run-up to the 6th Coffee Festival that will kick off in Buôn Ma Thuột City this weekend.

It is expected to help local authorities create a high-quality, productive coffee-growing area in the province’s Êa Tu Commune.

Under the programme, cutting-edge technologies will be used in pilot production models, while small farming households will be consolidated into a centralised farming area to improve coffee productivity in six villages and six hamlets in Êa Tu Commune.

Huỳnh Quốc Thích, deputy director of the province’s Department of Agriculture and Rural Development, said that coffee trees had been cultivated in Đắk Lắk Province for the last 100 years. 

Most of the trees are more than 20 years old and produce low yields. The average life span for coffee trees is between 20 and 30 years.

Between 140,000ha and 160,000ha of trees need to be replaced in the next five to 10 years, a big challenge for the industry, Thích said.

The industry is also facing other problems, including small-scale production, poor quality control, and outdated processing technologies.

Ten years ago, coffee brought a prosperous life to millions of farmers in the province, but in recent years the productivity and quality of coffee beans have declined.

Y Drăn Byă, 51, of Ko Tam Hamlet in Êa Tu Commune, who owns 0.9ha of coffee trees, told Việt Nam News that most of his coffee trees were planted in 1972.

The yields have dropped to only 1.3-1.5 tonnes a year, compared to five to seven tonnes a year a decade ago, he said.

Coffee trees more than 20 years old account for 23 per cent of the area, and trees 15-20 years old for nearly 35 per cent, according to the Department of Agriculture and Rural Development.

More than 92 per cent of the coffee trees have not adapted well to disease or to climate changes.

In addition, intensive farming and improper use of fertilisers as well as pesticides have seriously affected soil quality in the province. Many farmers often water trees excessively, washing away nutrients needed for the plants.

The two companies that signed the agreement said they planned to work with the province’s Department of Agriculture and Rural Development and Agriculture Extension Centre.

The two firms have been cooperating with the Central Highlands’ Agro-Forestry Scientific and Technical Institute to create linkages among farmers, scientists, businesses and the state in an aim to improve the Buôn Ma Thuột coffee brand.

Phạm Quang Vũ, chairman of the board of directors of Vinacafé BH JSC, said, “This programme will improve the value of Buôn Ma Thuột coffee beans, known as the “pearl of Ban Mê”.

The deputy general director of Bình Điền Fertiliser JSC, Võ Văn Phu, said the companies were committed to placing “farmer benefits” as their top priority.

“We’re willing to work with farmers on the challenging path ahead,” he added.

Over the past 10 years, the country has exported an annual 1.2-1.5 million tonnes of coffee.

Việt Nam ranks second in the world for coffee exports, following Brazil.

The Vinacafé Biên Hòa Joint-Stock Company manufactures and distributes a range of beverage products, including instant coffee, instant cereal and bottled beverages.

The signing ceremony was part of a press conference to announce the 6th Coffee Festival in Buôn Ma Thuột City in the province this weekend.

The biennial festival, with the theme “Quintessence Convergence – Identity Promotion – Connecting for Development”, hopes to attract record attendance and showcase the area’s economic potential.

This year, the event will host more activities, including a gong festival and conference on investment promotion for the Central Highlands region.

HCM City eyes more investment from Japan

Ho Chi Minh City’s authorities always create favourable conditions for foreign enterprises, especially those from Japan, to invest in the city, said Secretary of the municipal Party’s Committee Dinh La Thang.

The secretary made the affirmation during a reception for newly-appointed Japanese Consul General Kawaue Junichi in the city on March 7. 

He spoke highly of growing relations between Japan and Vietnam and between Japanese localities with HCM City recently, hoping that the Japanese side will expand investment in the city in infrastructure development, hi-tech agriculture, and food safety. 

For his part, Kawaue Junichi affirmed that he hopes to enhance ties between his country with Vietnam and HCM City.

UN high-level meeting continues trade facilitation discussion

Delegates to the UN high-level meeting for the Euro-Asia region on improving cooperation on transit, trade facilitation and the 2030 agenda for sustainable development will seek how to work together to facilitate international trade on their second day in Hanoi on March 8.

The three-day UN meeting, opened on March 7, was jointly held by Vietnam’s Foreign Ministry and the UN Office for the high representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (UN-OHRLLS).

On the day, the delegates will seek measures to step up cooperation between landlocked and transit countries to promote trade and facilitate international commerce as well as share success stories.

They will also discuss enhancing legal cooperation bilaterally, regionally and globally for landlocked and transit countries as well as find solutions to using existing related agreements in a more efficient manner to make it easier for transit activities.

On this occasion, the delegates will share national strategies and experience in customs cooperation.

At the opening session on March 7, Deputy Prime Minister and Foreign Minister Pham Binh Minh said Vietnam believes that strengthening international collaboration with the engagement of various parties is crucial to help countries, including transit and landlocked nations, to overcome challenges and achieve sustainable development goals.

He affirmed that Vietnam always attaches much importance to fostering relations, including economic connectivity, with its neighbouring countries, adding that their success and prosperity will create positive impacts on Vietnam’s growth and ensure sustainability for the whole region.

Authorities covered up, protected illegal sand miners: Deputy PM

Deputy Prime Minister Trương Hòa Bình yesterday admitted that some local authorities covered up for or even offered immunity to illegal sand miners.

During a Governmental meeting yesterday evening, Bình believed that the prolonged illegal sand mining on the national scale – even right in front of the eyes of the authorities – was mainly due to the fact that the local administrations “loosened their management, covered up and offered protection” to those miners.

The Deputy PM’s statement came a few days after an investigative series by the Tuổi trẻ (Youth) newspaper revealed how sand in Việt Nam was illegally exploited, transported and sold to Singapore.

A report by the Government Office showed that there were up to thousands of miners on hundreds of ships every night illegally exploiting sand along several river routes including the Hồng (Red), Đà, Lô and Cầu rivers in the north and Sài Gòn and Đồng Nai rivers down in the south.

The sand lost per night could reach up to tens of thousands of cubic metres.

To tackle the prolonged issue, Bình said that local authorities and its leaders should be subject to strict penalties if violations in sand mining management were detected.

“In case officials are found to have covered up for or offered protection to the miners, they will be handled strictly by the law”, he said.

The Deputy PM also asked for more intense inspections over sand mining in the future, with a police campaign against illegal mining taking place from March 15 to June 1. –  

BMW declares Euro Auto paperwork not from them

A representative from the BMW Group in Germany has denied that some of the evidence used by the Euro Auto Company, the Ho Chi Minh City-based importer of BMW automobiles, for customs clearance is from them.

According to a document sent by the Ministry of Finance to the Vietnamese Embassy in Germany on February 21, a representative from BMW met with finance and customs officials in Hanoi on January 11 and 12.

The representative confirmed that some of the evidence used by Euro Auto for customs clearance was not issued by BMW, and said that the General Department of Vietnam Customs has done the right thing and there was no discriminatory treatment by the finance ministry in BMW’s business in Vietnam and that the group had in fact been receiving favorable conditions.

During the investigation, BMW committed to cooperate with Vietnam Customs and report to the government, foreign affairs agencies, press agencies, and the European Automobile Manufacturers’ Association (ACEA) about the incident.

On December 20, Vietnam’s Anti-Smuggling and Investigation Department launched a criminal probe into Euro Auto. The decision followed an internal probe at the customs agency and consultations with the Supreme People’s Procuracy (the highest prosecuting agency in Vietnam). The Anti-Smuggling and Investigation Department transferred the case to the Economic and Corruption Crimes’ Police Investigation Department (C46).

Vietnam Customs also suspended Mr. Duong Phu Dong, Director of the Post-Clearance Inspection Department, for 15 days pending a review of import activities at Euro Auto.

In late November, the Ministry of Finance directed customs agencies to suspend clearance procedures for imported BMW motor cars in order to investigate alleged violations at Euro Auto. BMWs imported under diplomatic privilege were exempt from the suspension.

Ministry officials claim the importer falsified purchase contracts and receipts while importing the cars and failed to provide certificates of origin and other required documents. Euro Auto has submitted a report to address the ministry’s accusations.

In a press release on November 30, Euro Auto responded to the finance ministry’s accusations and said it answered all questions and was legally compliant and transparent in its financial report and tax requirements.

“We reaffirmed that Euro Auto Corporation has always complied with the laws of the State of Vietnam and acted in its customers’ interests,” the carmaker wrote. “In case our explanations are not accepted by the finance ministry, we require assistance and intervention from other competent authorities in order to protect the rights and legitimate interests of businesses and customers.”

In a letter sent to the central government, Ho Chi Minh City authorities, and a number of embassies in Vietnam, Euro Auto urged finance and customs officials not to criminalize economic relations.

Euro Auto said representatives from the BMW Group in Germany have emailed the Ministry of Finance to say they did not provide Euro Auto certificates of origin for imported cars because Vietnamese customs officials did not require such documents.

In September, Deputy Prime Minister Vuong Dinh Hue directed the Ministry of Finance to look into media reports that a number of companies had allegedly imported luxury cars as gifts and donations to evade taxes.

This is not the first time Euro Auto has been involved in such an incident. In 2015, tax officials in Ho Chi Minh City discovered that it declared lower revenues in 2013 by changing car prices in sales records in an attempt to pay less tax. As a result, the General Department of Taxation ordered its offices around the country to investigate automobile importers and distributors for possible tax fraud.

Lottery Company of HCMC lowers profit target

The Lottery Company of Ho Chi Minh City has set a target of pre-tax profits coming in at VND770 billion ($33.76 million) this year, which is lower than the target it set in 2016 and less than its business results for the first nine months of last year.

Revenue is targeted at VND5.9 trillion ($258.71 million), while tax payments are estimated at about VND2 trillion ($87.7 million).

The company is concerned that the new type of lottery run by Vietlott will affect its revenue, though it remains the largest lottery company in Vietnam.

Revenue from Vietlott’s Mega 6/45 lottery boomed when it was first introduced last July. In the closing months of the year its revenue stood at VND1.6 trillion ($70.16 million), the same as the Lottery Company of Ho Chi Minh City.

Its revenue, however, has fallen sharply since those early days. Revenue was VND14.1 billion ($618.28 million) for the year to February 14, as many people bought a Mega 6/45 lottery ticket for the Tet holiday but after seeing that the number of winners was quite low, are no longer interested.

Vietlott is now considering changing its rules to attract more players.

BVIF buys nearly 6.5mn Vinare shares

The Bao Viet Value Investment Fund (BVIF) has reported the results of its purchase of Vinare (Vietnam National Reinsurance Corporation, stock code VNR) shares.

It bought nearly 6.48 million shares, or 4.94 per cent of charter capital, after registering to buy 8 million from January 18 to February 16. The lower holding is due to unsuitable market conditions.

During the registration period, the price of VNR shares fell from VND25,600 ($1.12) to VND22,500 ($0.98).

Meanwhile, the Post and Telecommunication Joint Stock Insurance Corporation (PTI) has registered to sell 1.95 million VNR shares to restructure its investment portfolio. The trade is expected to be carried out from February 20 to March 20.

Last August, the Vietnamese Government directed the State Capital Investment Corporation (SCIC) to prepare plans for divestment from ten large enterprises where the State has a major shareholding, including Vinare. The SCIC currently holds 52.9 million VNR shares, or 40.46 per cent.

BVIF also purchased nearly 5 million Saigonship shares (stock code SGC) and became a major shareholder, increasing its ownership from 0.69 per cent to 35.01 per cent.

BVIF was established in November 2015 with initial capital of VND1 trillion ($43.79 million).

2M budget surplus at $438.5mn

Total State budget revenue and spending in February were estimated at VND79.4 trillion ($3.48 billion) and VND82.5 trillion ($3.62 billion), respectively, figures from the Ministry of Finance reveal.

In the January-February period, total State budget revenue was estimated at VND185.8 trillion ($8.15 billion), equal to 15.3 per cent of the annual plan and an increase of 15.8 per cent year-on-year.

Revenue from the foreign investment sector reached 16.9 per cent of the annual plan, from the non-State sector 18.2 per cent, from personal income tax 18.8 per cent, from licenses and registration fees 17.4 per cent, and from housing and land use fees 20.1 per cent. A number of revenue sources remain low, however, including revenue from State-owned enterprises, which only accounted for 11.5 per cent of the annual plan, and from environmental tax, which accounted for 14.4 per cent.

In the first two months, revenue from crude oil was estimated at VND6.6 trillion ($289.4 million), or 17.4 per cent of the annual plan and up 8.9 per cent year-on-year. Revenue from import-export activities was VND41 trillion ($1.8 billion), or 14.4 per cent of the annual plan and 22.1 per cent higher year-on-year.

Total State budget spending, meanwhile, was estimated at VND175.8 trillion ($7.7 billion) in January and February, equal to 12.6 per cent of the annual plan and an increase of 8.4 per cent year-on-year. The budget surplus for the first two months was therefore VND10 trillion ($438.5 million).

Investment and development spending stood at VND17.5 trillion ($767.4 million), or 4.9 per cent of the annual plan and up 30.3 per cent year-on-year. Debt repayments totaled VND19 trillion ($833 million), equal to 19.2 per cent of the annual plan and 3.3 per cent higher year-on-year. Regular expenditures were VND139.1 trillion ($6.1 billion), 15.5 per cent of the annul plan and an increase of 6.7 per cent year-on-year.

Regarding capital disbursement, including both construction investment and government bonds, progress was slow due to the Tet holiday. At the same time, sectors and provinces have been tardy in allocating public investment spending for 2017. Only 32 out of 45 sectors and 56 out of 63 cities and provinces have allocated investment capital to projects this year.

Vietnam also signed four borrowing agreements in the first two months of the year, totaling $203.2 million. Foreign repayments were VND5.82 trillion ($262.8 million), including re-borrowing payments of VND3.1 trillion ($136 million). As at February 22, total disbursement stood at VND5.8 trillion ($260.5 million). A total of VND26.9 trillion ($1.2 billion) in government bonds had been issued as at February 28.

For 2017, the budget deficit ceiling has been set at 3.5 per cent of GDP, equal to VND178.3 billion ($8 billion). Total budget collections are to be VND1,212 trillion ($54.2 billion) and total budget expenditure VND1,390 trillion ($62.2 billion). The deficit target is quite low, as in recent years the 5 per cent GDP ceiling has been retained but the actual results in 2014 and 2015 were 6.33 per cent and 6.11 per cent, respectively.

Total State budget loans, including loans to cover the budget deficit and loan repayments, are to be VND340 trillion ($15.2 billion) this year.

Vietnam sees three more exports each exceed US$1 billion in revenue

Three more Vietnamese exports saw their revenues surpass US$1 billion after the first two months of 2017, according to data released by the Ministry of Industry and Trade.

They include machinery, transport vehicles and timber products which generated a combined revenue of US$3.986 billion, raising Vietnam’s total export revenues to US$27.3 billion in the January-February period.

Of the US$27.3 billion, domestic enterprises contributed US$7.6 billion, up 12.2% while the foreign sector brought in US$19.7 billion (including oil revenues), up 16.8% over the same period last year.

The above-mentioned goods complement a list of US$1 billion-plus exports which includes mobile phones, garments, footwear items and electronic products whose aggregate revenues hit US$13.6 billion in the first two months of 2017.

Mobile phones were the top-performing export, bringing in approximately US$4.83 billion, a year-on-year increase of 2.6%, while the garment industry came second with US$3.657 billion, up 12.2%.

According to the Vietnam Textile and Apparel Association, the sector’s export revenues in the first quarter of the year are usually boosted by large orders.

In the first two months of January and February, revenues of electronic exports rose 34.4% to hit US$3.1 billion while footwear products also earned more than US$2 billion, up 10.7% year on year.

HCM City’s top leaders listen to opinions from over 400 businesses

The Party Committee, People’s Council and People’s Committee of HCMC yesterday hosted a conference to meet over 400 enterprises and listen to their opinions about ways and proposals to solve difficulties and develop businesses.

Director general of Binh Minh Plastic Company Nguyen Hoang Ngan says that most Vietnamese businesses are small and medium sized with limited competitiveness. Firms in the plastic industry are under the pressure of being usurped by foreign giants.

Meantime, domestic companies have met with difficulties in capital access and the amount of assistant funds from the government has been short of their investment demand. Therefore, Mr. Ngan proposed the city to have a clearer capital investment strategy for businesses and develop large companies with market guiding ability to create supply chain systems.

He suggested building national standards for plastic items in particular and other products in the market in accordance with international standards, saying that a basic factor to estimate product quality. At present, the plastic tube making industry alone has two different sets of standards for the northern and southern region. Therefore, products from the two regions are unable to joint together.

In addition, the Government should establish technical barriers to protect high quality local products. Domestic firms can produce safe and eye catching plastic toys but they have to compete with much cheaper but toxic import products flooding the market because Vietnam has no technical barriers to examine toxins in toys.

Businesses have experienced policy inconsistence risks. Formerly, tax inspectors decided to collect the arrears of up to VND70 billion from Binh Minh Company. After many years of appealing against the irrational decision, tax agency ultimately agreed to return the collected amount to the company.

Mr. Diep Dung, chairman of HCMC Commercial Cooperative Union (Saigon Co.op), said that foreign supermarket systems have strongly invested in Vietnam for the recent past. Many domestic supermarkets have changed into foreign ownership, raising difficulties for local businesses in keeping and developing their market shares.

Going with foreign supermarkets is overseas production. Their goods have quickly penetrated and commanded the market. Domestic firms wanting to attend their supply chains must standardize product quality, production process and management system.  However, they have been unable to do so themselves and needed the Government’s assistance in all aspects.

At first, the Government should quickly build a set of norms to standardize product quality, he proposed.

Ms. Le Thanh Lam, director general of Saigon Food, stressed that the state should facilitate local supermarkets’ network development. Production companies should more tightly connect together to create an advantage while negotiating for percentage with foreign supermarkets. They usually require high percentage while local suppliers have just managed to sell their goods in their own ways and even accepted high percentage instead of linking up together to create strength in the market.

Support industry growth in HCMC has been lower than other provinces in the country. Small and super small production firms have located out from industrial parks so there has no foundation to form connectivity chains from material suppliers to manufacturers, build market and do procedures to get demand stimulation loans.

HCMC should have assistant policies to develop small industrial zones over 3-5 hectares suiting the needs of businesses in the same field, she suggested.

Deputy chairman of the city People’s Committee Le Thanh Liem said that the committee would instruct relevant districts and investors to review land area used in industrial parks including particular area suiting types of support industry.

Mr. Kieu Huynh Son from the HCMC Association of Mechanical-Electrical Enterprises, proposed the city to give rent and loan assistance to develop infrastructures, attract businesses to industrial parks and boost support industry development.

Concluding the conference, secretary of the HCMC Party Committee Dinh La Thang said that the city committed to reforming to create advantageous conditions for businesses to develop. He required authorized agencies to receive and immediately solve or respond to opinions and proposals at the conference.

Minh Long I replaces 95% of workforce with robots

Minh Long I Co Ltd has brought down its head count from 400 to a mere 20 thanks to the use of robots.

Ly Huy Sang, deputy general director of the company, said at a high-quality Vietnamese goods and startups forum last week that this was the outcome of an innovative idea which came up in 2002.

Automation is a long and different process as it requires high-skilled personnel to operate advanced equipment, he said, adding staff were sent abroad for professional training and foreign experts invited to Vietnam to give instructions.

In the ceramics industry, shaping a product is vital as only high-skilled craftsmen can do it. Customers always expect perfect products, he said. Robots can help solve this problem, so Minh Long I has imported seven robots costing at least 40,000 euros each.

Pham Minh Thien, director of Co May Company, said technology in some sectors is not at all expensive. As for clean mushroom production at Co May, he said, scientists developed technology that allows Co May to grow mushrooms using straw, a cheap material which can be found everywhere.

The forum was organized by the Business Association of High-Quality Vietnamese Products to find solutions to effective integration.

Foreign property investors club together

A club of international property investors in Vietnam made its first public appearance in HCMC last week.

Than Thanh Vu, vice president of the Vietnam Tourism Property Association (VnTPA), said foreign property investors in the country have got involved in a big number of large-scale projects and that they have contributed significantly to the development of the local property sector.

However, investors have faced many difficulties in the investment process, so VnTPA has established the club to facilitate communication and cooperation between member enterprises and authorities.

The club now has more than 40 members who lead major real estate corporations from Japan, Singapore, South Korea, Malaysia, the EU, the U.S., China, Hong Kong and Taiwan. These firms can contribute at least 50% of resources to the Vietnamese real estate sector, Vu noted.

The club will hold meetings to provide updates for domestic and foreign investors.

Vu said many foreign investors are interested in the local property market, so the club will be able to help them sound out business opportunities here in the country.

VN will do utmost to support AIIB: PM

Việt Nam will strongly support the activities of Asian Infrastructure Investment Bank (AIIB), Prime Minister Nguyễn Xuân Phúc said as he welcomed its president Jin Liqun in Hà Nội.

The co-operation with AIIB "is important to Việt Nam, and it will continue collaborating with the bank as a trustworthy and responsible partner", Phúc said on Tuesday.

The State Bank of Việt Nam, the country’s representative at international financial and monetary organisations such as the World Bank, Asian Development Bank and International Monetary Fund, will also take charge of the country’s obligations to and activities with AIIB.

Việt Nam is opting for both Official Development Assistance (ODA) and commercial loans to develop infrastructure, while keeping public debt within limits. "In this situation, AIIB’s low-interest loans, which don’t require government guarantee, are valuable to the country", the PM said.

The state hoped that apart from aiding the public sector, AIIB would also support the private sector in infrastructure projects, Phúc said, adding that with mutual understanding and common effort, AIIB would be able to benefit the course of development in Việt Nam.

"The bank not only offers loans but also brings modern, environment-friendly technology and jobs to the country", he said.

At the meeting, AIIB president Jin said his bank was keen to enable local development.

AIIB could give the country loans at concessional terms, which were good for economic development, he said.

The bank "will offer loans without government guarantee for the private sector too as the country has the trust of the international community", he said, suggesting that the government support AIIB’s loans to the private sector with macro-economic stability and a stable legal system.

"If Việt Nam pays attention to infrastructure development, it will see greater socio-economic achievements in the coming years", he said.

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