Dire need for trade defense measures

Vietnamese enterprises have almost no trade defense measures in place and technical barriers are weak, Deputy General Director of the Hoa Sen Group, Mr. Vu Van Thanh, told a conference on December 16 on effectively utilizing trade defense measures to protect domestic manufacturing.

Knowledge among Vietnamese enterprises about trade defense measures is a major concern, according to Mr. To Thai Ninh from the Market Surveillance Agency under the Ministry of Industry and Trade. A 2014 survey by the Vietnam Chamber of Commerce and Industry showed that 64 per cent of local enterprises had heard of trade defense measures but were not fully aware of what they may be.

Meanwhile, 16 per cent of respondents knew nothing about trade defense and only 1.8 per cent had researched such measures after becoming embroiled in related lawsuits.

“They are disappointing numbers that show the poor knowledge among Vietnamese enterprises,” Mr. Ninh said. He pointed out that enterprises not only find it difficult to conduct lawsuits due to lacking finances but also find it difficult to fight lawsuits instigated against them. Due to conflicts of interest, he explained, gathering enterprises together to conduct joint lawsuits has proven difficult.

In the first nine months of this year Vietnam faced 13 lawsuits regarding trade defense. Among them were eight cases from Southeast Asian countries. Since joining the WTO, meanwhile, Vietnam has used trade defense only twice, whereas Indonesia and Malaysia use it often.

Mr. Thanh said that the difficulties for Vietnamese enterprises in using trade defense stem from ineffective stipulations on technical barriers. Neighboring countries, however, have adopted strict stipulations on technical barriers for Vietnamese exports. Moreover, it often takes a long time to adjust existing technical barriers, he complained. Domestic enterprises have therefore not considered trade defense as a useful measure to protect the manufacturing industry.

The accounts of Vietnamese enterprises cannot prove the damage done by imported goods, he added, and if enterprises don’t get together the damage to their market share cannot be known.

The general sentiment at the conference was that Vietnamese enterprises must understand the investigation process and procedures to protect domestic manufacturing from foreign goods.

Deputy Director of the Market Surveillance Agency, Mr. Nguyen Phuong Nam, said that free trade agreements help Vietnamese enterprises have more investment but they will face more trade defense measures from foreign enterprises.

As the market opens up foreign products will come to Vietnam, and due to their poor competitive capacity the smaller domestic enterprises will die and then the larger enterprises. The community spirit among Vietnamese enterprises is poor, but they need to come together to use trade defense measures.

Mr. Nam added that the role of associations in Vietnam and the knowledge of Vietnamese lawyers on trade defense are also poor.

According to lawyer Dinh Anh Tuyet from IDVN, a legal organization, when conducting a lawsuit the enterprises involved not only need to represent 25 per cent of the market share but also require government support.

Enterprises grappling with tax and customs offices

Fifty-five per cent and 64 per cent of enterprises remain concerned that they will be discriminated against if they do not pay informal fees in taxation and customs matters, respectively, according to a recent survey of 180 enterprises on the implementation of Resolution No. 19 from the government in taxation and customs.

The objective of the survey was to assess the implementation of administrative procedures and the degree of support to businesses in production and business activities. The survey was conducted by six different agencies: the Vietnam Fatherland Front, the Ministry of Finance, the Vietnam Chamber of Commerce and Industry (VCCI), the Vietnam Cooperative Alliance, the Vietnam Association of Small and Medium Enterprises, and the Vietnam Young Entrepreneurs Association.

The survey also revealed that although it is necessary for the two sectors to provide support and receive and share feedback, these factors have received inadequate attention. Only 28 per cent of respondents rated tax office staff as adopting a polite and respectful attitude while 26.3 per cent were dissatisfied with these offices. “The business community wants to receive careful concern, not just fulfill their responsibilities,” Chairman of VCCI Vu Tien Loc said.

There were some positive sentiments evident from the survey, with 66 per cent of respondents saying that information on administrative procedures in customs is now easier to find. Only 39 per cent, however, believe that customs authorities provide information quickly while 47 per cent said such information was simple and easy to understand.

Business associations also still have trouble regarding tax refunds and exemptions, such as long handling times (68 per cent), and the requirement to provide additional unnecessary information (54 per cent).

Similar problems were found in complaints and administrative violations in customs, with long handling times at 69 per cent and the requirement of to provide additional unnecessary information at 62 per cent.

President of the Central Institute for Economic Management, Dr. Nguyen Dinh Cung, said that reductions in clearance time could save $1 billion per year. Times for clearing both exports and imports now stand at over 20 days.

Electronic tax payments open to individuals

Mr. Nguyen Dai Tri, Deputy General Director of the General Department of Taxation, told the Vietnam E-Payment Forum 2015 (VEPF 2015), held by the State Bank of Vietnam and Vnexpresss e-newspaper on December 16, that the Department is to introduce electronic tax payments for business households and individuals and also for payments of registration fees for motorcycles, motor cars, and real estate, etc.

Business households and individuals account for a large proportion of the taxpayer base and introducing electronic tax payments for them is a major task for the Department.

Payments will be able to be made electronically during a pilot period via the Bankplus service, payment cards, or internet banking. Starting from July next year electronic payments will be able to be made for registration fees on motorcycles, motor cars, and real estate.

In 2017, after the pilot has finished, electronic tax payments will be available nationwide for business households and individuals paying registration fees for assets and asset rentals.

Mr. Tri also said that as at the end of November there were more than 478,000 companies (92.5 per cent of those active) registered to make electronic tax payments via the Department’s portal, of which 438,000 have registered at commercial banks. Around VND122.7 trillion ($5.46 billion) has already been forwarded to the State Budget.

The Department has been offering electronic payments to companies since February 2014, with 43 banks providing the service.

Besides the advantages Mr. Tri added that there are still problems. For example, 10 per cent of companies are starting or ending at any given time so the Department must work to encourage them to register their current status. “Many companies are also not used to making payment electronically and prefer paying by cash,” he told the conference. The coordination between tax agencies, banks, and State Treasury are also still in its early stages, he said.

Car imports to be hit by tax hike

The price of imported completely-built-unit (CBU) motor vehicles will increase by 15 to 30 per cent from January 1 due to the new special consumption tax regime.

Sales by VAMA members in November increased 33 per cent compared to October and 86 per cent compared to November last year. Many therefore predicted an explosion in the motor vehicle market.

The reality, however, may be somewhat different. In three week’s time the new special consumption tax regime will take effect, pursuant to Decree No. 108/2015/ND-CP, with retail prices of CBU vehicles rising 15 to 30 per cent as a result. The new tax will be calculated based on the wholesale price of the importer instead of being based on the CIF (Cost, Insurance, Freight) price and import tariff, as previously.

The new Ford Everest, for example, which was first promoted in the market six months ago, was expected to be priced at between VND900 million ($39,940) and VND1.2 billion ($53,250) when it becomes available in the new year. The actual price, however, will be VND1.249 billion ($55,430) for the Trend AT 2.2L 4x2 and VND1.629 billion ($72,295) for the Titanium AT 3.2L 4x4, as announced by Ford Vietnam. The additional 15 per cent special consumption tax makes a huge difference in price compared to its competitors such as the Toyota Fortuner, Hyundai SantaFe, and Mazda CX-9.

The response from customers to the impending price rise has been clear, with sales of CBU vehicles in November rising 95 per cent compared to October.

Vingroup to sell 31% of Emigo Vietnam

Vingroup has decided to sell 3.1 million shares worth VND31 billion ($1.36 million) and representing 31 per cent of charter capital in the Emigo Vietnam fashion brand.

A representative from Vingroup told VET that the sale of a portion of its shareholding in Emigo was part of its restructuring plan. The buyer has yet to be revealed.

After completing the sale Vingroup will reduce its holding to 39 per cent.

Emigo Vietnam was licensed in June 2014 and has showrooms in Hanoi, Ho Chi Minh City, and Quang Ninh province and ten stores, mostly located in Vincom Trade Centers, selling fashion clothing and accessories for both men and women.

In 2014 Vingroup decided to dominate the fashion industry, owning VinFashion (manufacturing fashion) and operating BFF (distributing international fashion).

Vingroup has also acquired 100 per cent of Vinatexmart, which owned 39 supermarkets selling garments in more than 19 cities and provinces nationwide.

South Dinh Vu IZ II breaks ground

A breaking ground ceremony was held on December 14 for the South Dinh Vu Industrial Zone II - Deep C II and the Gateway Commercial and Logistics Business Centre - CDC Hai Phong, in northern Hai Phong city.

The ceremony was attended by H.E. Jehanne Roccass, Ambassador of Belgium to Vietnam, and representatives from the Ministry of Planning and Investment, the Hai Phong People’s Committee, local authorities, and investment promotion agencies.

The Dinh Vu Industrial Zone has more than 55 multinational projects, attracting almost 30 per cent of the total foreign direct investment (FDI) in the city. Deep C II covers a total area of nearly 650 ha and infrastructure is to be quickly completed and land of more than 40 ha handed over to tenants in 2017.

The remaining two components of the Deep C cluster are the Gateway Industrial Zone (Deep C III) of nearly 500 ha on Cat Hai Island and the Tien Phong Industrial Zone (Deep C IV) in Dam Nha Mac, Quang Ninh province.

Together these industrial zones make up a cluster of over 2,000 ha, nearby Lach Huyen Deep Sea Port, Dinh Vu Port, and Cat Bi International Airport, and directly connected to the new Hanoi - Hai Phong Expressway and the Tan Vu - Lach Huyen Bridge.

The same utilities at the Dinh Vu Industrial Zone will be executed in the Deep C cluster, with underground power networks connected to the national grid, certified waste water treatment services, and reliable water supplies and drainage systems.

With the success of the Dinh Vu Industrial Zone the Belgian investor, Rent-A-Port, decided to expand in the city by developing the South Dinh Vu Industrial Zone II - Deep C II, creating the Deep C industrial cluster in the area.

Deep C II is proud that though still in its early development stages it has welcomed the CDC International Corporation, one of the leading companies in Qatar in coastal industrial and urban area development, as its first FDI tenant.

The Gateway Commercial and Logistics Business Center in Deep C II, with total investment of approximately $2.2 million, will develop office buildings and open storage space for lease. After receiving an investment license in June this year the project is now scheduled to begin commercial operations in January 2017.

As highlighted by a representative of the Hai Phong People’s Committee, the ceremony marks an important milestone and affirms the commitment of the Belgian investor to Hai Phong. City authorities have committed to providing the most favorable conditions possible for the development of the Deep C industrial cluster and its investors.

Mr. Marc Stordiau, Chairman of South Dinh Vu II/Deep C II, said that the corporation will continue to deliver the same quality and reliability in infrastructure development, utilities, and services provision as those enjoyed by existing tenants at the Dinh Vu Industrial Zone. Putting all these elements together, tenants at the Deep C industrial zones will be in one of the best locations in Vietnam, just a short distance away from infrastructure and utilities of international standard.

IFC provides trade finance package to TPBank

The International Finance Corporation (IFC) granted a $10 million trade finance package to the TienPhong Commercial Joint Stock Bank (TPBank) on December 17 to assist it in supporting local enterprises and boosting international trade opportunities.

“The IFC’s trade grant will enable small and medium-sized enterprises (SMEs) to increase their share of global trade,” said Mr. Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia and Laos. “Expanding trade flows are essential for SME growth and will help boost the economy, generate foreign exchange, and create jobs. It is also testament to IFC’s continued commitment to support the strengthening of Vietnam’s banking sector.”

The package is part of the IFC’s Global Trade Finance Program (GTFP) and will help TPBank avoid risk in providing loans to domestic companies and give it access to global networks to promote its lending activities.

The networks help promote transactions in challenging markets, boost competitive financing, and build relationships between banks and new institutions.

“The trade line not only helps TPBank meet trade finance demand from SMEs, which is one of its target client groups, but also supports the bank’s shareholders and management in consolidating and expanding its business operations as well as serving more SMEs, households and individuals,” said Mr. Nguyen Hung, CEO of TPBank. “Furthermore, being a part of IFC’s GTFP will open up opportunities for TPBank to extend its relationship with a wider range of correspondent banks globally and make it easier for us and our clients to complete international transactions.”

The IFC has issued more than 950 guarantees in Vietnam, supporting $4.2 billion worth of trade finance, makingReleased at: 16:55, 16/12/2015

Eximbank holds extraordinary general meeting

Meeting held to discuss changes to BoM and business performance.

The Vietnam Export Import Commercial Joint Stock Bank (Eximbank) held an extraordinary general meeting on December 15 regarding the recovery of the bank over the next few years as it needs to improve its business performance and its Board of Management needs to be changed.  

As at November 30 Eximbank had recorded profit of VND552 billion ($24.49 million) this year, accounting for 55.2 per cent of the annual plan. In the third quarter financial report its profit before tax was stated as VND667 billion ($29.60 million), but the figures in the report for this general meeting put profit before tax in the first eleven months at only VND552 billion ($24.49 million), meaning it lost some VND125 billion ($5.54 million) in October and November.

Total operating income was VND1.72 trillion ($76.33 million) and provisions and allowances for credit losses was set at VND1.17 trillion ($51.92 million). The bank is expected to increase its provisions before the end of the year.

Total assets as at November 11 were VND127.07 trillion ($5.63 billion), a decline of 21.15 per cent since January 1 and representing 70.6 per cent of the annual plan. Capital mobilization from the interbank market reached VND35.54 trillion ($1.57 billion) while capital mobilized from customers totaled VND101.28 trillion ($4.49 billion), a decline of 0.2 per cent since January 1 and accounting for 80.4 per cent of the annual plan.

Total credit granted was VND96.05 trillion ($4.26 billion), a decline of 1.9 per cent since January 1 and 88.3 per cent of the annual plan.

In the first eleven months of the year non-performing loans were VND1.53 trillion ($67.9 million), a fall of 28 per cent since January 1 and accounting for 1.82 per cent of total loans. The bank also sold some VND2 trillion ($88.76 million) of non-performing loans this year to the Vietnam Asset Management Company (VAMC).

Ms. Van Thai Bao Nhi, Deputy General Director of Eximbank, was quote as telling the meeting that the Banking Supervision Agency of the State Bank of Vietnam has conducted an inspection at the bank. Certain shareholders were found to have exceeded the cross-ownership ceiling of 5 per cent between Eximbank and Sacombank. In the future Eximbank will therefore divest from Sacombank.

The inspection also identified fraud regarding the business activities of Eximland. Eximbank lent funds to Eximland and Eximland then used the loan to buy real estate from Eximbank. Eximbank’s closing account increased its income as at December 31, 2013 by VND1.11 trillion ($49.26 million), on which it paid tax, set risk provisions, and paid dividends to shareholders from 2010 to 2013.

The inspection team said that the closing of the booking account for that income while Eximbank is still managing and using the real estate does not follow the current accounting regime and it directed the Board of Management to ask shareholders at this meeting to produce a solution for handling it.

Bank leaders committed to handling these problems from 2016 to 2018.

New Board of Management and Independent Supervision Team

Eximbank has formed a new Board of Management with eight members and one independent member for the 2015-2020 period.

The eight members include Mr. Cao Xuan Ninh, Mr. Le Van Quyet, Mr. Ngo Thanh Tung, Mr. Dang Anh Mai, Mr. Nguyen Quang Thong, Mr. Hoang Tuan Khai, Mr. Naoki Nishizawa, and Mr. Yasuhiro Saitoh. Mr. Quyet and Mr. Anh were nominated by the Board of Management.

Mr. Le Minh Quoc was nominated by the Board of Management as the independent member of the board.

The Supervisory Board includes Mr. Tran Le Quyet, Ms. Pham Thi Mai Phuong, Ms. Tran Ngoc Dung, Mr. Trinh Bao Quoc, and Mr. Dang Huu Tien.

Becamex IDC & VNPT cooperate to develop 4,000 ha industrial area

The Binh Duong Investment and Industrial Development Corporation (Becamex IDC) signed a cooperative agreement with the Vietnam Post & Telecommunications Group (VNPT) for the 2015-2020 period on December 14 in Binh Duong province.

Under the agreement, VNPT will continue carrying out the projects such as developing industrial zone, transport, urban services, social houses, schools, hospitals and promoting to the project to develop the 4000 ha industrial area in Binh Duong Province. In addition, VNPT will supply telecom -IT services to enhance logistic center.

Becamex will work together VNPT in supplying high-quality services to link as well as cooperate with international region to cities and provinces in the country, focusing on build smart urban, centralized administrative center in Binh Duong and high-end industrial areas in the new period.

Long Thanh Airport scheduled to invite bids before Tet holidays

Authorized agencies have completed documents in preparations for bid invitation of the feasibility report of Long Thanh International Airport project before the Lunar New Year festival, announced the Ministry of Transport at meeting on December 15.

Many powerful consultant groups from the U.S., EU and Japan have expressed attention to this bid package, it said.

According to plan, the ministry will submit the feasibility report to the National Assembly by June, 2017.

Ministry leaders have instructed related side to comprehensively study traffic and residential planning in areas around the airport.

Experts said that about 70 percent of passengers from HCMC will use Long Thanh-Dau Giay expressway to reach the airport. The rest number will come from Ba Ria-Vung Tau and Highway 21.

Vietnam determined to produce organic dairy products

Vietnam is working on the plan to produce organic dairy products as it is popular trend in the world.

Nguyen Dang Vang, President of the Vietnam Livestock Association, said that to produce organic dairy product, livestock must be allowed to graze on pasture, be fed organic certified feed (which may not include by products of animal slaughter), and that the animals will not be treated with drugs (although it is also illegal to withhold necessary drugs from a sick animal in order to maintain that animal's organic status).

Currently, some enterprises such as TH True Milk, Moc Chau, Vinamilk are able to breed organic livestock like mentioned above.  Imported powdered dairy products dominate 70 percent of the country’s market share. However, customers have worried about the quality of powdered dairy products.

Accordingly, Deputy Minister of Agriculture and Rural Development Vu Van Tam said that  to increase quality of milky products in Vietnam, the country should have around 500,000 milk cow to produce 1 million tons of milk per year.

Speaking at a conference of safe organic agricultural products held  by the Ministry of Agriculture and Rural Development and the Ministry of Science and Technology lately, Thai Huong, chairwoman of TH Corporation said that Vietnam authority has not had standard of organic milk as well as organic agriculture produces, yet.

Nguyen Thanh Phong, head of the Food Administration of Vietnam under the Ministry of Health admitted that his administration has not worked on the matter, yet.

Nguyen Xuan Duong, deputy head of the Department of Husbandry, said that the country will have to encounter challenges in producing organic dairy and agricultural products because it is unavoidable trend in the globe.

Competition to develop electricity market

In recent seminars on the competitive electricity market (CEM), both domestic and foreign economic experts emphasised that the implementation of the CEM has brought enormous practical benefits to the Vietnamese economy.

The competition among reduce the price of electricity, benefiting consumers as well as create favourable conditions for the development of industrial production.

Implementing the Prime Minister’s Decision 63/2013/QĐ-TTg, the Electricity Regulatory Authority of Vietnam (ERAV), Electricity of Vietnam (EVN) and relevant agencies have stably operated the competitive electricity generation market (CEGM) since July 2012.

Currently, as many as 59 power plants are directly participating in the CEGM, with a total capacity of 9,300 MW, accounting for 41.63% of the total electricity generation system.

The market has created equal and transparent competition among power plants in mobilising resources. The plants have shortened time spent on repair and maintenance, reduced operating costs and have been initiative in offering price in order to improve production efficiency.

Their power system has been operated safely and reliably, ensuring adequate supply of electricity for socio-economic development.

According to the Ministry of Industry and Trade, the CEGM has revealed some shortcomings due to weak infrastructure; imbalance between electricity sources and transmission-distribution networks; local electric overloads in some localities and the high ratio of power plants not joining electricity market.

The year 2015 marked a new development step of the CEM with the formation of a competitive electricity wholesale market (CEWM). However, it is very necessary for managers to issue mechanisms that are strong enough to protect the consumers’ interests as well as attract more investments.

There are still around 50 power plants not offering price, and not creating a balance of supply and demand in the electricity market. In addition, the legal frameworks should continue to be timely added and modified.

The MoIT has issued a Decision approving detailed design of the CEWM. Accordingly, its first step will be put into trial implementation in 2016.

The ministry will continue to complete and submit the project restructuring the electricity industry to serve the CEWM to the PM; meanwhile, EVN must complete the project developing information technology infrastructure for operating and monitoring the market as well as build and promulgate the training content outline to improve capacity of electricity market members.

The ERAV has announced the list of power plants joining the CEGM in 2016, 79 of which will directly offer price in the market, bringing the total capacity to over 21,151 MW, accounting for 54% of the total electricity generation system.

According to ERAV’s experts, the power sector should be more aggressive in urging new electricity plants to prepare conditions for joining CEM as well as continue to study projects on participating in the competitive market of multi-purpose hydroelectric and BOT power plants.

Notably, the management system of the CEWM will be invested in and developed to meet the design requirements of the competitive electricity market.

Flexible policy urged for social housing projects

Economic and realty experts at a seminar in HCMC on December 17 agreed that Government policy for social housing projects should be made flexible to boost the development of this housing segment.

Huge demand for social houses in big cities has not been met due to a lot of policy shortcomings, heard a seminar held by Thoi bao Kinh Te Sai Gon, a Vietnamese-language weekly of Saigon Times Group.

Dr. Huynh The Du of the Fulbright Economics Teaching Program said local residents can set aside 30-40% of their total incomes to buy homes and prices of affordable homes should be set appropriately.

Despite different policies for housing development, countries in the world target almost all citizens can afford to buy houses.  

Du said a number of State policies support Vietnam’s housing market. For instance, land can be divided into smaller lots so that residents can buy. In addition, the floor space of buildings is allowed for expansion to meet homebuyer demand while land use area is unchanged.

But Du said owning a home is still a dream of many people, especially low-income earners. He cited a report conducted by him and his colleagues as showing that apartments usually cost VND9.7 million per square meter, so it is almost impossible for people with monthly incomes of VND5-7.7 million to buy.

Meanwhile, residents with monthly incomes of VND10.2-14.3 million can acquire small apartments of 39-55 square meters each.

Du said only people who earn nearly VND32 million a month can purchase spacious apartments.

Nguyen Xuan Quang, chairman of Nam Long Investment Corporation, said social housing projects are usually developed by governments in foreign countries. However, it is hard for the Vietnamese Government to invest in such projects at present.

Therefore, the Government should issue more policy incentives to attract private businesses to social housing projects.     

Architect Nguyen Hong Hai from Becamex IDC Corporation said policy for social housing development is inappropriate. For instance, realty firms cannot sell social homes at low prices if they meet all standards for commercial houses like living room, bedroom and kitchen.

Becamex has constructed and sold thousands of apartments costing around VND100 million each to workers.

“Demand of low-income buyers should be analyzed before companies map out plans to develop social housing,” Hai suggested.

Meanwhile, property investors complained about the regulation that requires them to use 20% of total land allocated to a project to build low-cost apartments. They said this regulation is unworkable.

Le Hoang Chau, chairman of the HCMC Real Estate Association (HoREA), said the regulation is not meaningful to social housing development. He said localities, especially HCMC, should develop residential areas for low-income people in the outlying districts where vacant land abounds.   

Chau noted that social homes can be low-priced commercial units developed by firms with the support of the Government.

Experts call for Gov’t to boost economic restructuring

Economic experts have urged the Government to speed up economic restructuring and institutional reforms in the coming years if it is to keep the economy on its high growth path.

Expert Pham Chi Lan told a seminar on comprehensive economic restructuring held by the Central Institute for Economic Management (CIEM) in Hanoi on December 17 that Vietnam will have to solve a lot of challenges posed by increased international integration if it wants to bank on the integration process.

“A new phase (of integration) has more requirements. Vietnam will not benefit much from new opportunities unless it presses on with institutional reforms and economic restructuring,” Lan warned.

President of CIEM Nguyen Dinh Cung threw his weight behind Lan’s view, saying the present institutions discourage enterprises from growing into large corporations due to a lack of State protection of their assets.

Cung noted Vietnam cannot integrate into the world economy successfully if enterprises cannot grow strong. “If our economic restructuring is not bold enough, Vietnam’s economy will continue to expand but most business opportunities will go to foreign-invested companies. As such, private Vietnamese firms and laborers will be affected,” he stressed.

Cung said Vietnam lacks a comprehensive legal framework for competition and there remains too much Government intervention into the market.   

“Integration brings about opportunities for the diversification of production and trading activities but flexible institutions are needed to support good business initiatives and ideas,” Cung said.

CIEM released a review report on an overall economic restructuring program the Government has implemented over the past years. The report pointed out limited results of reforms in public investment, State-owned enterprises and commercial banks.

Cung attributed the lower-than-expected results to the unfinished restructuring of State ownership at enterprises and many assets do not have clear owners as they have not been recognized as assets.

The property market is not functioning as what it should and land transactions are still influenced by administrative decisions rather than market forces. “Land is treated like a gift of the State to people and the State can take it back anytime,” Cung noted.

Meanwhile, Lan said public investment and other resources have not been allocated effectively and the low performance of the administrative body has led to higher business costs and made life expensive.

Nguyen Xuan Thanh of the Fulbright Economics Teaching Program said State assets were less than 50% of total assets in the banking sector before it was restructured but the percentage has risen to date.

Banks will continue to focus on ensuring liquidity and avoiding bankruptcy in the 2016-2020 period before a modern banking system can take shape in Vietnam.

Two more Samsung suppliers enter SHTP

Two South Korean suppliers of Samsung on December 17 got investment certificates to build factories worth a total of US$112 million to produce parts for the  Samsung electronics complex at the Saigon Hi-Tech Park (SHTP).

According to the investment certificate presented by the SHTP management, Intops will spend US$80 million on a 40,000-square-meters plant to make electronic and information technology components. The facility is scheduled to go into operation in late 2016.

The investor said the plant will initially focus on home appliance parts for Samsung Electronics and later expand into other areas including research and manufacture of devices for the Internet of things. When in place, the plant can turn out 6.5 million products per year.

Intops currently has four factories in South Korea, two in China and one in Hanoi supplying home appliance and mobile phone parts for Samsung.

CEO of Intops Kuen-Ha Kim said the company’s Hanoi facility was picked as one of the top 10 science-technology firms in Vietnam last year.

Meanwhile, Daihan Climate Control Co. Ltd. will build a plant to make heat exchangers, the main part used in freezers and refrigerators, for the Samsung complex project now under construction at SHTP in District 9. The US$32 million project will cover 2.1 hectares.

As scheduled, the company will provide the Samsung complex with gas exchangers for use in refrigerators in the second half of next year and air exchangers for air-conditioners in 2017, with annual total output of about two million pieces.

Daihan will employ about 400 workers for the project and plans to train high-quality human resources in Vietnam through its factory in Thailand and its headquarters in South Korea to localize materials and manpower for the project in the coming time.

Le Hoai Quoc, head of the SHTP Authority, said many Samsung suppliers want to invest in the park. However, SHTP only selects firms having high technology and value-added products. So far, SHTP has approved five supporting industries projects for Samsung including four developed by foreign firms and one by a local business.

SHTP requires investors to develop a roadmap and have plans to conduct research and development (R&D) in order to promote the domestic supply chain. As for investment projects in supporting industries, local content must account for at least 35% of a product’s value after three to five years of operation.

JICA pinpoints challenges for Vietnam farm products

Despite Vietnam’s greater effort to bolster the safety and hygiene standards of agricultural products, challenges will remain, said the chief representative of the Japan International Cooperation Agency (JICA) in Vietnam.

Mori Mutsuya said Vietnam has strived to improve breeds, build irrigation works, and apply VietGAP standards, thus fostering exports. Nevertheless, challenges for Vietnam’s agricultural sector still lie in food safety and a low proportion of processed products.

He told a media meeting on Vietnam-Japan agricultural cooperation in Hanoi on December 16 that over 90% of products on sale are unprocessed and have little added value.

Problems have been found in the post-harvest handling of produce. Vegetables are not preserved in good conditions when on sale, and farm products are not categorized properly.

Amid doubts over food safety, it is not easy for safe vegetables to find consumers who are willing to pay higher prices.

Goods consumption is still complicated. Traders often make payments late and farmers cannot estimate their profit, discouraging them from the farming job.

Mutsuya said Vietnam’s agricultural products are not competitive on global markets due to high input costs for land and fertilizer.

According to Mutsuya, JICA has coordinated with the Ministry of Agriculture and Rural Development, provinces like Nghe An and Lam Dong, and private partners for medium- and long-term cooperation programs.

In particular,  JICA and Nghe An Province have joined hands for a pilot project to set up an agricultural production chain for livestock, breeds, farming, harvest, transport, processing and export based on the market’s needs. The project also builds a platform to share and update information about farm produce, livestock farming and producers.

Meanwhile, in Lam Dong, JICA conducted a survey between September 2014 and November 2015 and found that farmers and enterprises have difficulty getting access to sources of capital and lack technologies and information about consumer needs. Besides, it is difficult for foreign firms to find big land lots and partners who strictly observe contract terms.

JICA also plans to apply a hi-tech agricultural model in Ha Nam Province in the country’s north. It is surveying the application of information technology in the agricultural sector.

Rule-abiding firms to get preferential customs treatment

The General Department of Customs has called for enterprises to strictly abide by regulations to avoid customs checks of their export and import goods.

The preferential customs treatment includes less inter-disciplinary inspections and even exemptions of cargo checks, the department told European firms at a seminar in HCMC on December 15 on compliance with regulations.

The agency has plans to launch a program early next year to encourage enterprises to comply with export-import regulations to benefit from such preferential treatment while working with the customs.

Nguyen Thi An Giang, head of customs compliance management at the customs authority’s risk management division, said the program aims to promote mutual trust and assistance between the authority and the businesses strictly observing customs and tax regulations. Law-abiding enterprises will be given priorities.

To join the program, firms must be recognized as complying with law and prove their ability to manage and supervise legal compliance by themselves. The customs will back them to improve their compliance.

Preferential treatment in tax management is another benefit for corporate members of the program.

The application of compliance management based on risk management has benefited enterprises, increased the number of enterprises rated as complying with customs regulations and restricted direct interference of the customs in goods circulation.

Bui Thai Quang, deputy head of the risk management division, said compliance management is one of the primary tools of risk management.

Quang said compliance management helps categorize enterprises into groups with different compliance levels. It then applies favorable measures to compliant enterprises and imposes checking and monitoring measures on other businesses to enhance State management in the field and facilitate export-import activities.

He noted most export-import companies want to be recognized as abiding by law. If so, they should be well aware of the benefits and take steps under a specific program with the support of the customs.

Customs risk management will be connected with tax management. Therefore, enterprises must meet customs and tax regulations to benefit, helping shorten time for goods clearance and reduce contact between customs officers and enterprises.

Since 2011, only 48 out of around 60,000 export-import enterprises have been granted a priority enterprise status.

Toyo Ink to invest in thermal power plant

Malaysia’s Toyo Ink has initialed a deal with the government of Hau Giang Province to implement Song Hau 2 thermal power plant project after 15 weeks of negotiations.

The signing ceremony took place on Tuesday afternoon after the two sides agreed on terms of the deal for the BOT (build-operate-transfer) thermal power project, according to the news site Hau Giang Online.

Speaking at the signing ceremony, the province’s vice chairman Trinh Xuan Thanh requested the team responsible for supporting the multi-billion-dollar project to work closely with the investor and relevant agencies to complete the required procedures.

Vo Van Thang, deputy director of the Hau Giang Department of Industry and Trade, told the Daily on December 16 that at a meeting with the provincial government on Tuesday, the investor pledged to advance some VND900 billion for the locality next year to clear land for the project. The plant will go up on 100 hectares.

With a designed capacity of 2,000MW, Song Hau 2 is one of the three thermal power projects at Song Hau Power Center in Phu Huu A Commune, Chau Thanh District. It is the biggest thermal power project by capacity with foreign involvement.

The coal-fueled plant has an estimated investment cost of more than US$3 billion and will help ensure national energy security in Vietnam in general and the Mekong Delta in particular when it is put into operation.

Song Hau 1 thermal power plant got off the ground on 115 hectares in Chau Thanh District in May this year.

Thang said Vietnam National Oil and Gas Group (PVN) has accelerated construction of important components of the project such as a port for coal import and infrastructure facilities.

The 1,200MW Song Hau 1 costs VND43 trillion. When in place in 2019, the plant will supply some 7.8 billion kWh for the national grid a year.

Three thermal power plants at Song Hau Power Center will have a combined capacity of 5,200MW and consume a total volume of around three million tons of coal a year.  

In September this year, another Malaysia firm, Janakuasa Sdn. Bhd, got an investment certificate to develop Duyen Hai 2 thermal power plant at a cost of US$2.4 billion and under the BOT form in Tra Vinh Province.

According the Foreign Investment Agency, Duyen Hai 2 plant has two generators with a total capacity of 1,200MW. The project belongs to Duyen Hai Power Center in the Mekong Delta province.   

Duyen Hai 2 is considered one of the key projects to ensure stable power supply for the southern region. France’s Alstom will be the main equipment supplier of the project whose first generator is scheduled to come online in 2020.

Besides Duyen Hai 2, the Duyen Hai Power Center comprises Duyen Hai 1, Duyen Hai 3 and Duyen Hai 3 add-on thermal power plants invested by Vietnam Electricity Group (EVN). With a total capacity of 4,200MW these facilities will generate around 30 billion kWh for the national grid a year when they are operational.

Vietnam is looking to have an additional 30,000MW by 2020. Annual investment is put at US$8 billion with 47.5% of the total expected to come from the private sector.

PV Gas beats 2015 output target

PetroVietnam Gas Corporation (PV Gas) said that its gas production and supply have surpassed the full-year targets though the year is not yet out.

The corporation said in a statement released on December 16 that its gas output had already reached the 2015 target of more than 9.77 billion cubic meters as of December 3. The figure is projected to exceed 10.42 billion cubic meters this year, 7% higher than the target.

This year, PV Gas has seen the highest volume of gas consumed in 25 years, with accumulated sales amounting to more than 100 billion cubic meters in the period.

PV Gas said the liquefied petroleum gas (LPG) output of Dinh Co gas processing plant in Ba Ria-Vung Tau Province had reached 233,000 tons as targeted for all of 2015 by November 9 and is forecast to stand at 282,000 tons this year.

LPG sales had hit the full-year target of 960,000 tons as of October and are forecast to rise to 1.32 million tons this year.

At an annual general meeting held earlier this year, shareholders of PV Gas passed a plan to supply 9.77 billion cubic meters of gas, as well as produce and sell 960,000 tons of LPG. Together with its member companies, the corporation hopes to meet over 70% of total LPG demand in the country.

In addition, PV Gas looks to after-tax profit of VND11.339 trillion and pledged a dividend of 30% of chartered capital.

The profit target was made on the crude oil reference price of US$100 per barrel. However, the world oil price has plunged below that projected price.

New Eximbank chairman emerges

Le Minh Quoc will take up the post of chairman at Vietnam Export-Import Commercial Joint Stock Bank (Eximbank), a source close to the matter has confirmed.

The source told the Daily about Quoc’s election after shareholders at Eximbank’s extraordinary general meeting on Tuesday voted for new members of the bank’s board of directors and supervisory board for a new term.

Quoc, 64, used to work as deputy general director and deputy head of the supervisory board at Orient Commercial Bank (OCB) and vice chairman of Au Lac JSC before joining Eximbank’s board of directors, whose members were elected at an extraordinary general meeting on Tuesday.

He used to be deputy general director of BNP Canada and regional manager for Asia, Australia and India of BNP Paribas in Singapore and Taiwan, and was general manager of BNP Paribas in Vietnam.

Quoc is Eximbank’s independent board member in the 2015-2020 term. He neither holds shares nor represents capital holding by any institution at Eximbank.

Eximbank’s board of directors held a meeting on December 16 morning but has yet to announce any key positions at the bank.

The source told the Daily that Tran Le Quyet would become head of Eximbank’s supervisory board. He was nominated by a group of shareholders owning 11.287% of the lender’s total shares.

Quyet is the representative of Vietcombank’s stake in Eximbank, at 8.19%.

Born in 1981, he was deputy head of the supervisory board at Eximbank in the 2010-2015 term, and used to serve as deputy director of Vietcombank’s Tien Giang branch.

Le Van Quyet may become Eximbank’s general director. However, the appointment of a general director must be approved by the central bank.

Quyet, 54, went through different positions at Vietcombank’s Bien Hoa branch and the central bank’s Dong Nai branch. He was nominated by new Eximbank board members and neither holds shares nor represents capital holding by any organization at Eximbank.

Earlier, there was information that a representative of the central bank would become new Eximbank chairman and requested a Vietcombank representative to join Eximbank’s board of directors.

The bank’s board of directors has 11 members in the 2015-2020 term, up from nine in the previous term and the supervisory board has five members for the sixth term.

However, there are nine board members now so shareholders can propose two more persons for the board of directors.

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