Vietnam Foodexpo 2018 opens in HCM City

The Vietnam Foodexpo 2018, the biggest of its kind serving the agro-fishery and food industry in Vietnam, kicked off in Ho Chi Minh City on November 14. 

Hosted by the Ministry of Industry and Trade, the expo features 600 booths operated by 450 enterprises from 31 Vietnamese localities and 23 counties and territories around the world. 

Exhibitors are introducing fruit-based products, beverages, food materials, processed foods, and food processing machines. 

Vietnam Foodexpo 2018 has attracted the participation of many notable national and international brands in the food industry, such as Phu Thinh Food, Sa Giang, Ben Tre Coconut, Satra, Vissan, Thien Huong Food, and PAN Group. 

Addressing the opening ceremony, Deputy Minister of Industry and Trade Do Thang Hai highlighted the strong development of Vietnam’s food industry over the last two decades, saying that it has recorded great changes in production, business, and exports. 

Many Vietnamese products have gradually shifted from raw exports to deep processing, while their brands have also been developed, thus conquering many export markets in the world, he said. 

Vietnam Foodexpo 2018 is an international trade promotion event for the local food industry, with agricultural and seafood products in particular, and is the largest of its kind in the country, Hai noted.

The organisation board has focused on arranging many practical activities to share the trend of production, business, and global market, towards helping businesses orient their activities to meet consumer demands, he added.

Hai said the ministry highly appreciates exhibitors of foreign countries like the Netherlands and Italy for their active participation in the event, and expects these units will bring attractive products as one of the expo’s highlights. 

The event  also welcomes a great number of visitors, especially those from Vietnam’s  key export markets such as the Republic of Korea, Japan, China, the US, France, Singapore, Malaysia, India, and Thailand. 

Elsbeth Akkerman, the Netherlands’ Ambassador to Vietnam said experts from her respective nation’s Food and Consumer Product Safety Authority will share their experience in applying information technology in agro-food trade, in developing and improving food supply chains, and in managing food safety.

During the four-day event, there will also be the Vietnam Food Forum 2018, a seminar promoting investment in the food processing industry, and an international cooking event, among others.

The expo will open for commercial guests during the first three days and for all visitors on the final day. 

Mai Linh launches cooperative to attract idle cars

Mai Linh Group on November 15 will officially introduce and start the operation of Hoa Binh Xanh Taxi Cooperative in HCMC, which will call for the participation of owners of idle cars.

According to the group’s press release, the cooperative is expected to offer more choices to the group’s customers.

Early joiners of Hoa Binh Xanh Cooperative will be exempt from the management fee until December 31. They will also receive a uniform, free training courses and practicing certificates.

After that, they will have to pay the management fee of only 13.9% of revenues for the duration of their contracts.

Hoa Binh Xanh Cooperative will share Mai Linh’s taxi booking app and use call center 1055.

The cooperative’s taxicabs will not be forced to have bright colors or be repainted in green, the traditional color of Mai Linh. However, they will have a lightbox highlighting the word “Taxi,” the Hoa Binh Xanh logo and the call center number 1055.

The installation of taxi signs will help State management agencies exercise control over the taxis, according to Mai Linh’s press release.

Ho Huy, chairman and general director of Mai Linh Group, said Hoa Binh Xanh Taxi Cooperative, which will operate in line with the 2012 Cooperative Law, will create jobs for members and fulfill its tax obligations to the State.

Mai Linh attaches great importance to both technology and human resources, so the group will provide comprehensive training to taxi drivers to enhance their skills and behavior, Huy added.

The group will expand this model to other cities and provinces nationwide.

Housing fair to open in HCMC

The ninth Vietnam Furniture and Home Furnishing Fair (VIFA HOME 2018) will take place at Phu Tho Indoor Sport Stadium in Ho Chi Minh City on November 16- 19.

Around 95 businesses with 410 booths have registered to attend in the event, including booths from timber products accounting for 63 percent, interiors accounting for 26 percent, handicrafts, sanitary equipment and support services ... accounting for 11 percent.

Through the fair, customers will have opportunity to approach advices from interior decoration companies and architecture consultants.

According to the organizers, the consumption of furniture in the country in 2017 reached over US$ 3 billion, an average annual growth rate of 8 percent in the past seven years.

The Handicraft and Wood Industry Association of HCM (HAWA) forecasted the domestic market to continue growing in the mid- range and luxury segments in the coming time.

Singaporean investment fund lifts holding in Vietnam’s Masan Group

The deal is reportedly worth VND2.27 trillion (US$101 million), for which Arnolis Investment will hold an 8.87% stake of Masan Group, or an equivalent of 103.15 million shares, according to the Ho Chi Minh Stock Exchange (HoSE).

Arnolis Investment Pte, a Singaporean government-run investment fund, has bought an additional of 27.41 million shares of Masan Group, one of Vietnam’s largest privately-run conglomerates, thus becoming its second largest foreign shareholder after South Korea’s SK Group.

The deal is reportedly worth VND2.27 trillion (US$101 million), for which Arnolis Investment will hold an 8.87% stake of Masan Group, or equivalent to 103.15 million shares. 

In October, Singapore’s sovereign wealth fund bought roughly half of US-based KKR & Co.’s 4.7% stake in Masan worth VND2.18 trillion (US$95 million). 

It purchased the stock as part of a placement by KKR, which offloaded its entire holding in a US$209 million deal, Bloomberg reported.

KKR was exiting its Masan investment after shares of the Vietnamese conglomerate more than doubled. The private equity firm sold 54.8 million Masan shares at VND89,200 (US$3.84) apiece, the midpoint of a marketed range. 

On October 2, South Korean’s third largest conglomerate SK Group purchased 110 million Masan treasury shares in a deal worth US$470 million. The group now holds 9.5% stake of the Vietnamese conglomerate and becomes its largest foreign shareholder. 

In the stock market, Masan’s share was valued at VND84,300 (US$3.6) apiece at the close on November 9. 

With a strong balance sheet, Masan said it ould add up to US$50 million of net earnings for full year 2019. Management expected core net profit after tax to jump by at least 50% for the fiscal year of 2018 and forecast similar base case earnings growth momentum for 2019 as each of its core business continues to deliver on its growth plans.

Masan plans to consolidate cash at the group level by up-streaming free cash flows from its subsidiaries to build a strategic investment war chest and/or return capital to shareholders. The company does not intend to issue additional shares to investors over the next three years.

Vietnam’s Sabeco removes cap on foreign ownership

The move would open up the company to further investments from foreign investors.
Vietnam’s largest brewer Saigon Beer Alcohol Beverage Corp. (Sabeco) on November 12 announced that it has removed the limit on foreign ownership. 

On October 30, Sabeco’s board of directors adopted a resolution approving the unrestricted foreign ownership percentage in the brewer. The move would open up the company to further investments from foreign investors. 

Last December, the Vietnamese government sold nearly 54% stake in Sabeco to ThaiBev through its local unit Vietnam Beverage for US$4.89 billion. ThaiBev, controlled by tycoon Charoen Sirivadhanabhakdi, purchased 343.42 million shares at the starting price of US$14.05.

Six months since ThaiBev acquired the major stake in Sabeco, the brewer has brought in VND20.32 trillion (US$875.19 million) in revenue and net profit of VND2.36 trillion (US$101.64 million) to Thailand’s beverage producer. 

The amount did not include the 35% of prepayment of 2018 dividends or VND2.24 trillion (US$96.49 million) that ThaiBev is expected to receive in the remaining months of 2018.
Thanks to positive business performance of Sabeco and its affiliates, ThaiBev posted net revenue from sales of goods in the January – June period at VND122.37 trillion (US$5.27 billion), up 22% year-on-year.

Vietnam’s Ministry of Industry and Trade currently stands as the second largest shareholder, holding a 36% stake in Sabeco, while fund manager Dragon Capital owns a minority stake in the beer producer.

Sabeco posted a net profit of VND3.31 trillion (US$141.73 million) during the first nine months of 2018, down 6.5% year-on-year, according to the company’s quarterly consolidated financial statement. 

As of September 30, Sabeco's total assets were worth VND23 trillion (US$985.78 million), of which short-term assets stood at VND15.2 trillion (US$651.38 million) and long-term assets VND7.79 trillion (US$333.83 million).

Sabeco has set its pre-tax profit target in 2018 at VND4 trillion (US$173.2 million), down 19% year-on-year, following a decline in Vietnam's beer consumption. This would be the third consecutive year that Sabeco will experience a decline in profit.

Nevertheless, the company targeted its market share to increase by five percentage points from the current 40%.

In 2017, Sabeco alone produced 1.77 billion liters of beer, an increase of 6.6% year-on-year, while the second largest domestic brewer, Habeco (18% market share), brewed 657.6 million liters, down 6.5%.

Vietnam trade promotion area launched in Shanghai

A Vietnam trade promotion area was inaugurated at the Greenland Global Commodity Trading Hub in Shanghai, China on November 13. 

Speaking at the event on behalf of the organiser, Chairman of the Board of Directors and General Director of Sunny World Investment and Development Corp., Truong Vincent said the display aims to realise the agreement reached by Prime Minister Nguyen Xuan Phuc and Chinese Party General Secretary and President Xi Jinping on increasing imports from Vietnam to China at the 2018 China International Import Expo. 

Truong said besides promoting trade, the display area also serves as a venue to connect with Chinese investors and popularise the imagery of Vietnam and its people to Chinese and international friends, contributing to fully tapping the potential for bilateral cooperation between Vietnam and various countries worldwide. 

Vietnamese Consul General in Shanghai Ninh Thanh Cong committed all possible support to Vietnamese firms to seek prestigious partners in trade, investment, and tourism, contributing to the balanced and sustainable development of bilateral economic and trade ties.

The Vietnam Trade Promotion Area is located on the second floor of the hub, covering an area of over 300 sq.m with four stalls showcasing Vietnamese fruit, processed foods, handicrafts, and lacquer paintings. 

Traditional Vietnamese ao dai (long dress) and palm-leaf conical hats were also introduced. 

On the inauguration day, hundreds of Chinese and foreign firms and partners visited the area to seek potential business opportunities.

Workshop discusses int’l experience of transfer pricing

The opposing viewpoints of domestic and foreign experts on transfer pricing – a hot topic attracting much public interest in recent times – were the focus of a workshop held by the American Chamber of Commerce in Vietnam (AMCHAM) in Hanoi on November 9. 

Experts pointed out popular misconceptions about transfer pricing in Vietnam due to the lack of knowledge on international standards and business practices.

In his opening speech, Adam Sitkoff, CEO of AMCHAM in Hanoi, expressed his concerns regarding the widespread perception of transfer pricing as a tool for tax evasion and a violation of laws. 

He said that in the context of Vietnam’s increasing integration into the global economy, transnational transactions will start to become more and more frequent.

The misconceptions about these types of transactions will create challenges and barriers for transnational investors when they decide to invest in Vietnam, Adam said. 

He stressed that measures should be taken to determine appropriate prices for these transactions, including tangible and intangible transactions, services, financial or cost/share distribution.

Wayne Barford – senior advisor of the International Tax and Investment Center (ITIC) and an expert with extensive international experience in taxation and transfer pricing – said that transfer pricing is defined as the rules and methods of valuation for internal transactions or between enterprises of the same ownership or control system. 

As cross-border transactions can alter taxable income, tax authorities in many countries may apply different pricing methods to conventional methods based on market prices among independent enterprises, he said. 

Transfer pricing is not an illegal activity, he affirmed, noting that it is only fraudulent pricing or the abuse of transfer pricing for tax evasion that is illegal.

Nguyen Van Toan, Vice Chairman of the Vietnam Foreign Investment Business Association, highlighted the role and contributions of foreign enterprises in promoting the country’s economic development. 

He expressed his wish that the Government and business community could concede on a more comprehensive and objective view of foreign firms’ business, especially in terms of legal internal transactions between enterprises in multinational corporations, in order to avoid creating negative effects on the investment climate in Vietnam. 

Experts make policy recommendations to foster Agriculture 4.0

Experts outlined challenges and made policy recommendations to enhance the use of advanced technology in agriculture during a seminar on approaching Agriculture 4.0 held by the Central Institute for Economic Management (CIEM) in Hanoi on November 9.

Addressing the event, CIEM Deputy Director Phan Duc Hieu said that the Fourth Industrial Revolution (Industry 4.0) has increased efficiency in agriculture for many countries. In Vietnam, several agribusinesses have applied digital technologies in their production stages, from seedling and cultivation to harvest and distribution, he said. 

Though Industry 4.0 helps reduce labour intensity and improve productivity for the sector, few companies have made proper use of the technology, he noted, emphasising the need to formulate policies to foster better high-tech approaches amongst agribusinesses.

Nguyen Thi Luyen, head of the CIEM’s Department of Economic Institution, mentioned the significance of agriculture in the country’s economic growth, saying the sector has enjoyed an increasing trade surplus, which has exceeded 8 billion USD so far this year, not to mention providing 40 percent of the nation’s total employment. 

Vietnam will see stronger waves of technological innovation in agriculture as it works towards further international integration and trade liberalisation, yet competition will also become stiffer, Luyen noted.

To satisfy the growing demand of consumers, companies should be striving to apply the latest Industry 4.0 advancements, like smart agriculture sensors, Internet of Things, drones, farming robots, or smart financial management in farms, she suggested. 

She moved on to cite Israel’s experience in taking advantage of the Fourth Industrial Revolution. Though Israel is a small country, lacking labourers in its farming sector, and has suffered chronic water shortages for years (with two-thirds of its total area as arid or semi-arid land), it is one of the world’s leaders in agriculture. Israeli agriculture has been built on technological innovation and advancement, rather than competitive edges in natural conditions. There are firms providing comprehensive technological solutions for precision agriculture, so all farms and net houses in Israel are installed with a digital control system, using sensors and automated technologies.

In Vietnam, some firms, cooperatives and farmers have started using smart technologies in farming in recent years. For example, VIFARM JSC based in Ba Ria-Vung Tau has developed a computer-operated hydroponic system for growing vegetables, while Cau Dat Farm has invested in an automated agricultural production from farm to fork, she noted.

However, the number of such companies is relatively small and more advanced technologies have been applied only in a few stages of production, she added.

There is plenty of room for agriculture to expand in Vietnam, but if the sector cannot seize opportunities from Industry 4.0 wave to increase productivity and product quality, it will be left behind, Assoc. Prof., PhD. Dinh Dung Sy from the Government Office said.

Sy further noted that agricultural investment towards sustainability should be a focus of the country’s socio-economic development in the next decade. It is vital to connect agribusinesses, investors, and farmers and, at the same time, extend land use permits and facilitate the more flexible conversion of farming land that allows shifts from growing rice to other crops, aquaculture, or animal husbandry that have higher added value, he recommended.

The Government should also encourage the establishment of agribusinesses, he added. 

CIEM’s Hieu highlighted the importance of selecting appropriate technology in agriculture and developing signature farming products for each province and region that fit market needs. Furthermore, the Government must adopt business-centred policies that support the transfer of agricultural technology and the formation of a sustainable farming supply chain, he said. 

KBC fined for nearly VND6 billion

Kinh Bac City Development Holding Corporation (code: KBC) will have to pay around VND6 billion ($243,500) after tax inspections between 2015 and 2017.

The General Department of Taxation has just issued the decision to penalise KBC after a tax inspection of the years 2015, 2016, and 2017.

Accordingly, KBC owes a total of VND4.1 billion ($178,300) in tax arrears, and more than VND800 million ($34,800) in fines for violations of administrative procedures and invoices usage.

Additionally, a late payment fee of VND600 million ($26,100) was issued as of October 30, 2018. KBC will also have to calculate and pay further charges for delayed payment after this date.

As a result, a total of VND5.6 billion ($243,500) will be collected from KBC in retrospectively collected tax and fines for administrative violations and late payment fees.

Kinh Bac City Development Share Holding Corporation (KBC’s previous name) was established on March 27, 2002 and officially began operations in April 2003. Its primary activities are investing, engineering, and doing business in infrastructure for urban areas, commercial centres, industrial parks, and multi-functional projects.

In the first nine months of 2018, KBC’s revenue was nearly VND1.66 trillion ($72.2 million), increased by 60 per cent, while after-tax profit was VND528.5 billion ($23 million), including VND489 billion ($21.3 million) from the parent company, down 10 per cent on-year.

On the stock exchange, after a sharp increase at the beginning of the year, KBC share has been on a steady downward path. At the end of November 7, the ticker stood at VND12,300 ($0.5), so the corporation’s capitalisation was around VND5.8 trillion ($252.2 million).

Dinh Vu polyester to double capacity

The co-operation between An Phat Holdings and PVTex plays an important role in doubling the capacity of the Dinh Vu polyester plant compared to its capacity at the time when its first workshop resumed operations.

On November 5, Deputy Minister of Industry and Trade Dang Hoang An paid a working visit to Dinh Vu polyester plant, which is operated by An Phat Holdings JSC (APH), An Son Textile Fiber JSC, and PVTex.

On November 1, four months after the first facility resumed its operations, the factory officially doubled the capacity of its drawn textured yarn (DTY) workshop to a total of six manufacturing lines and a capacity of 400 tonnes of DTY per month.

The parties plan to increase the number of manufacturing lines to 10 and capacity to 700-750 tonnes per month by the end of this quarter. Furthermore, the operators plan to resume the remaining workshops and start manufacturing polyester staple fibre (PSF) by the end of 2019.

Pham Anh Duong, chairman of An Phat Holdings, said, “We spent two years studying the feasibility of the project before deciding to co-operate with PVTex to resume the factory. An Phat Holdings saw that for successful co-operation, we have to build comprehensive solutions and mobilise a large volume of both human resources and capital. We will continue to strive to ensure the smooth operation of Dinh Vu polyester factory.”

On July 24, 2018, PVTex with An Phat Holdings and An Son Textile Fiber JSC signed a contract to process DTY made by Dinh Vu polyester fibre plant.

Water industry needs smart tech     

Viet Nam needs to work on implementing modern IT systems and high quality workforce training in the water supply and drainage industries in preparation for the Fourth Industrial Revolution, experts said at a conference in HCM City on Thursday.

Mai Thi Lien Huong of the Ministry of Construction said Viet Nam’s water supply and drainage industry had been applying hi-tech methods and IT. However, it was facing problems such as limited funding, climate change and pollution.

Investing into smart systems for managing water distribution is crucial for sustainable development of water industries.

Nguyen Viet Anh, director of the Institute of Environment Science and Engineering, said that Industry 4.0 technologies like cloud computing, 3D printing, AI and the Internet of Things can be used alongside data collection and processing in water supply and drainage systems. Smart equipment such as smart valves, digital data loggers and equipment to detect leakage can also be implemented.

Viet Nam’s production capability for smart water management products is still limited. Smart systems require a large amount of data, which can be difficult to gather and manage.

Supervisory control and data acquisition systems need to be upgraded for better data gathering and water network management. Databases and customer service should move away from manual paperwork and be more digitised.

Viet Nam should work towards smart water supply and drainage systems to enable efficient management of water quality and volume, weather forecasts and problem detection.

Ung Quoc Dung, deputy chairman of the Viet Nam Water Supply and Sewerage Association, said that, despite the fact that many firms in Viet Nam were still using low-tech systems, the implementation of 4.0 technology would impose massive changes on the Vietnamese job market. Low skilled jobs would be replaced by high skilled employees needed to run smart systems.

Firms will also have to train and hire more suitable workers and invest more in modern IT systems.

“In the future, the intelligence and talent of the workers will be the most important factor for production, so preparing a high quality workforce is essential,” Dung said.

The education system and human resource training have to be revamped to produce workers that have the skills and creativity needed for Industry 4.0.

Many skilled workers are grouped in HCM City and Ha Noi, while more are needed in the Central Highlands and Mekong Delta.

Dung said that to prepare for Industry 4.0, the workforce – especially in the drainage and wastewater industries, which are relatively new in Viet Nam – needs to improve on foreign languages, IT capability, teamwork, communication and other skills.

The conference was a part of VIETWATER 2018, an international exhibition for technologies and systems in water industries. 

VN firms need to act on sustainability: experts     

Few local enterprises consider corporate sustainability a key factor in their development, according to experts.

They made the claim at a workshop on sustainability reports and corporate sustainability held in Ha Noi on Thursday by the Ministry of Planning and Investment’s Economy and Forecast Review.

At the workshop, Pham Quang Vinh, deputy general secretary of Viet Nam Chamber of Commerce and Industry (VCCI) said according to a survey conducted by an agency under the UN, 80 per cent of surveyed enterprises in Viet Nam know 17 goals of Viet Nam’s sustainable development goals (SDGs) so they have put the goals at their business and competitive strategies. Meanwhile, 63 per cent of the enterprises have implemented programmes of sustainable development, such as responding to climate change.

Vinh also said in previous years, enterprises participating in the survey on sustainable development were mainly foreign-invested enterprises while now, there are more local enterprises joining this survey.

Since 2015, Viet Nam has had a corporate sustainability index (CSI), with 131 indicators to assess economic, social and environmental aspects. The indicators have become an important tool for enterprises to set up corporate governance strategies.

There are now indicators for seafood processing enterprises and by the end of this year, there will be more for footwear and leather bags. Indicators for other sectors are still being established, Vinh said.

Le Xuan Dinh, Editor-in-Chief of the Economy and Forecast Review, said sustainability reports under the CSI are a tool for enterprises to publish sustainability information like financial statements.

The use of corporate sustainability indicators and sustainability report are essential and effective tools to help businesses re-evaluate their overall strategy in the short-, medium- and long-terms, he said, and then they could take new opportunities from sustainable development.

However, Dinh said, many businesses are not fully aware of sustainable development and some of them neglect sustainable development reports.

The Government has issued a national action plan to implement the 2030 Agenda for Sustainable Development, he said. According to the agenda, all parties related with the agenda have responsibilities in implementing the SDGs from the centrally-run to local authorities, including the National Assembly, the Government, ministries, agencies, social organisations, business community and the people.

To reach SDGs, Viet Nam has also set up tasks to be implemented in 2017-20. They include completing a system of institutions on sustainable development and improve the effectiveness of State management on sustainable development.

Vinh said to achieve sustainable growth, Viet Nam will implement the national action plan to promote sustainable economic growth together with implementing social justice and protection of the ecological environment, to effectively manage and use natural resources and respond to climate change.

Doosan Vina, Samsung sign manufacturing deal     

 Korean Heavy Industries Doosan Viet Nam (Doosan Vina) and Samsung Engineering Company (SECL) have signed a framework agreement for a major project in the Middle East.

Doosan Vina said it will commence work on the design, fabrication, assembly, testing, and inspection of refinery equipment for the Crude Flexibility Project (CFP) in Ruwais in the United Arab Emirates for the Abu Dhabi National Oil Company, and delivery is scheduled for early 2020.

The two parties signed a Memorandum of Understanding (MOU) in May, before signing the Framework Agreement in June of 2018, and the latest agreement details of the production of equipment by Doosan Vina was officially signed in Quảng Ngãi Province on November 8.

Last year, Doosan Vina also signed a Memorandum of Understanding (MoU) with five partners from Korea to help them enter the Vietnamese market.

Doosan Vina, situated in the Dung Quat Economic Zone in Binh Son District of the central province, is a high-tech industrial complex with nearly 2,500 employees, supplying mega infrastructure products for thermal power plants, desalination plants, cranes and chemical processing equipment for export.

Doosan Vina is a high tech industrial complex in the Dung Quat Economic Zone of Quang Ngai Province employing 2,000 workers. It manufactures products including boilers for thermal power plants, desalination plants for sea water, cranes, and structural steel for buildings and infrastructure developments.

To date the company has exported products valued at US$2.4 billion.

Vietnam faces challenges in promoting trade facilitation

Vietnam is facing numerous difficulties and challenges in promoting trade facilitation, said experts at a forum in Ho Chi Minh City on November 8.

Trade facilitation is not only a commitment of Vietnam when joining free trade agreements (FTAs) but also a measure to raise businesses’ competitiveness and efficiency of their import-export activities, they said.

FTAs may have significantly reduced import tariffs in many markets for Vietnamese goods, but administrative reform, reduction of trading costs and improving the business environment are key to improving national competitiveness, they added.

Nguyen Anh Duong, head of the Central Institute for Economic Management’s macroeconomics policy department, said Vietnam’s trade facilitation rankings are middling in the world and in ASEAN, and far behind neighbouring nations like Thailand, Malaysia and Singapore. 

In the World Bank’s trading across borders rankings, Vietnam is 94th out of 190 countries, in the World Economic Forum’s enabling trade index, it is 73rd out of 136 nations and in the World Bank’s logistics performance index, it ranks 64th out of 160.

“The Government aims to transform progressively specialised inspection from largely ex-ante inspection to largely ex-post inspection in line with risk management principles and regulatory compliance of individuals and entities,” he said.

It is hoped basically to eliminate the incidence of one goods being subject to management and specialised inspection by more than one agency, reduce the number of goods subject to specialised inspections by at least 50 percent and reduce the import batches subject to specialised inspections for custom clearance from the current 25 – 27 percent to below 10 percent.

It plans to fully electronise administrative procedures via the National Single Window and ASEAN Single Window.

According to Ngo Chung Khanh, deputy head of the Ministry of Industry and Trade’s multilateral trade policy department, said FTAs have enhanced the competitiveness of enterprises through market access and increased exports.

He cited the example of the textile industry where non-WTO import duties were 150 percent, but when a nation joined the WTO, it went down to around 25 percent. Under FTAs, the figure fell to 0 -5 percent, he said.

Export turnover has sharply increased from 5.4 billion USD in 2006 to 213.8 billion USD this year.

“FTAs have promoted administrative reform by the Government, improved infrastructure, ensured equality in accessing resources, removed barriers to accessing markets, and simplified conditions for business,” he said.

They also provide assured market access since the WTO is facing many challenges. Vietnam’s FTAs are in all five continents and that would help limit risks.

FTAs have reminded enterprises about the potential of the domestic market of over 90 million people and created opportunities for Vietnamese firms to participate in global supply chains, he said, citing that right now there are 200 domestic companies supplying accessories to Samsung.

Such deals have brought opportunities to Vietnamese enterprises in the context of increasing international protectionism, but Vietnam must overcome challenges by speeding up administrative reform and improving its business and investment environment, said Khanh.

At the forum, the Vietnam information trade portal at http://vietnamtradeportal.gov.vn was launched, covering information and regulations related to export/import/transit.

The event was co-organised by the HCM City Institute for Development Studies and the HCM City International Integration Support Centre in collaboration with the Central Institute for Economic Management, who plan to make it an annual event.

It attracted 300 attendees, including officials from HCM City, related ministries and departments, international organisations, business groups, universities, and research institutes from HCM City and neighbouring provinces.

Viettel Post to list on UPCoM     

Viettel Post has submitted a request to the Viet Nam Securities Depository Centre to stop accepting securities ownership transfer applications of the corporation from November 16 to list its shares on the Unlisted Public Company Market (UPCoM).

The corporation would use the list of shareholders on October 10 to submit registration documents for trading shares on the Hanoi Stock Exchange.

According to securities registration information, Viettel Post (VTP) has charter capital of nearly VND414 billion.

In July, Viettel Post paid dividends at a rate of 15 per cent in cash (shareholders owning one share received VND1,500), for a total value of VND44.5 billion.

The company also issued nearly 11.7 million new shares to pay dividends to shareholders at the rate of 1,000:394 (shareholders holding 1,000 shares received 394 new shares).

In the first half of the year, the corporation posted net revenue of VND1.9 trillion, up 1 per cent from the same period last year.

Its revenue from providing services (mainly express delivery) surged by 46 per cent to VND1.7 trillion, accounting for 90 per cent of its total revenue.

In recent years, Viettel Post has promoted its express delivery service, which it considers a strategic business sector.

The change has contributed to the corporation’s profit. In the first six months of the year, its gross profit reached VND223 billion.

Its after-tax profit was VND117 billion, posting a 60 per cent year-on-year rise. Earning-per-share income in the same period reached VND3,940.

Viettel Group is the largest shareholder of Viettel Post with 68.08 per cent of charter capital, following by Japan Asia MB Capital with 5.08 per cent and others.

Its shares are priced at more than VND90,000 each in the Over-The-Counter (OTC) market. 

Global contest for social entrepreneurs comes to VN

Blue Venture Award, a contest for social entrepreneurs, was launched in HCM City last week to promote development of social enterprises and help solve social and environmental problem in the community.

Organised by Pernod Ricard Vietnam and TV Hub, the competition also seeks to create a platform for young entrepreneurs, enabling them to reach out internationally to learn from start-ups around the world.

The contest will select a representative for the country to participate in an international competition called The Venture to be held next May.

The contestants, start-ups from fields that bring practical value to the community, will go through a selection process.

Blue Venture Award is part of a global entrepreneurial award, The Venture, founded by Chivas Brothers, to support social entrepreneurs who aspire to promote positive change in the world and spread the message that a company can both do business well and create a social impact.

It was first held in 2014, and has since spread to more than 40 countries including Argentina, Belgium, Brazil, China, Greece, Japan, Israel, the UK, and the US. 

In the last three years, it received over 6,000 applications, with 73 entering the global finals and start-up businesses receiving investments of 4 million USD.

They have undertaken community projects that provide 24 million litres of clean water, help children and women attend school, reduce CO2 emissions by 60 million tonnes, recycle 1,300 tonnes of waste, and save eight million trees.

Vietnamese businesses upbeat about trade

Vietnamese enterprises are among the world’s most optimistic about international trade prospects and most confident when it comes to succeeding in the current environment, according to an HSBC report. 

Ninety-one percent of Vietnamese respondents, compared with 75 percent globally, believe the outlook for trade is favourable despite geopolitical factors which are curbing enthusiasm elsewhere. 

They cited “a favourable economic environment, decreasing costs of shipping, logistics and storage, and an increasing demand for their products as the top three drivers of trade growth”. 

In addition, 91 percent believe they will succeed in the current environment, compared to 81per cent of businesses globally. 

Consumer confidence, commodity prices and global economic growth are the top factors for their positive outlook, according to the report. 

On a global level, respondents are upbeat about their prospects, encouraged by customer demand and favourable economic conditions. 

However, many Vietnamese firms are revising their strategies for fear that protectionist policies will have a negative impact on international trade. 

Winfield Wong, head of Wholesale Banking of HSBC Vietnam, said: “Vietnamese businesses’ optimism reflects an economy that’s been one of Asia’s star performers, which has been growing fast.”

“They are optimistic as they consider themselves well-positioned thanks to a strong domestic economy, confidence in the global economy, as well as far-reaching trade deals and burgeoning trade relations with major markets.”

The majority of Vietnamese respondents are positive about partnerships established with key trading partners, with 69 percent believing ASEAN membership will help their business in the next three years. 

Similarly, 65 percent of Vietnamese firms believe the forthcoming EU-Vietnam Free Trade Agreement will have a positive impact on their business.

The two sides agreed on a final text for the trade agreement in June. 

Local firms are also looking beyond these agreements for growth. Over a quarter of businesses are eyeing opportunities in Japan, while 23 percent are looking to expand into China, and a fifth are considering the Republic of Korea for expansion. 

In an effort to raise standards and boost competitiveness, 45 percent of Vietnamese respondents said that up-skilling their workforce was a key focus for investment while 43 per cent enterprises said they were focusing more on productivity and skills development. 

Meanwhile, around eight out of 10 companies in the country are using data to optimise their performance, compared with 75 percent globally. 

Despite the overall optimistic outlook on trade opportunities, four out of five Vietnamese firms (78 percent) said that foreign governments were becoming more protectionist, considerably higher than the global benchmark (63 percent). 

The Navigator survey shows more than half of companies (51 percent) globally expect that FTAs, where they apply to their country and industry, will benefit them over the next three years. 

FTAs are particularly popular in emerging markets, with 60 percent of firms saying they will have a positive impact, compared to 45 percent of firms in developed markets. 

The Navigator: Now, Next and How for Business report, which polled over 8,500 businesses, was based on a global survey gauging business sentiment and expectations on trade activity and business growth from 8,650 decision-makers in 34 markets.

Vietnam to chair 4th asset management company forum

The Vietnam Debt Asset Trading Corporation (VDATC), in collaboration with the Asian Development Bank, will organise the 4th International Public Asset Management Company Forum (IPAF) from November 14-15.

VDATC deputy general director Pham Manh Thuong told the press on November 13 that the forum aims to improve capacity of the IPAF members, policy-makers and experts, contributing to stability of the regional economy. The IPAF will work to fortify its mechanism in response to economic crisis, thus promoting the recovery ability of the economy.

Thuong said that the annual summit meeting slated for November 14 will look to finalise the agenda of the international conferences and issue joint statement which defines IPAF activities in its new term.

The meeting will officially ratify the admission of the Vietnam Asset Management Company (VAMC) as a new IPAF member.

An international conference on November 15 will gather foreign and domestic experts who will discuss Asia’s economy-finance, finance security and mechanisms to handle bad debts.

They will conduct analysis on influential factors as well as market trend of bad debt settlement, which serves as a base for member states to build effective public asset management mechanisms. Also, they will recommend policies on bad debt and bad asset settlement, as well as finance security improvement to the governments as part of efforts to ensure stability of regional and national economies, he added.

Conceptualized at the conclusion of the Hanoi Conference on April 23, 2012, co-hosted by ADB, the Finance Ministry, and the Korea Asset Management Cooperation (KAMCO), the International Public Asset Management Company Forum (IPAF) was formally launched on May 27, 2013 through the initiative of seven public asset management companies (AMCs) from China, Kazakhstan, the Republic of Korea, Thailand, and Vietnam as founding members.

IPAF was established to provide opportunities for collective actions to address regional economic issues through knowledge sharing and partnership development among its members. To date, IPAF has 13 member institutions.

Enhanced capacity of govt, enterprises needed to translate CPTPP into success

Mechanisms must be established to enhance the capacity of both the Government and local enterprises so that the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) can be a resounding success, said Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc.

His statement was made after the 14th National Assembly approved a resolution ratifying the CPTPP and related documents with 96.7 percent of the vote on November 12.

Loc shared the view of many NA deputies in that it is vital to develop an action programme that can outline an effective roadmap and implement the trade deal.

The action programme must develop all possible scenarios to take the initiative in the fulfillment of CPTPP commitments and, at the same time, consult stakeholders to assess the impact of each scenario and what Vietnam will lose if it fails to meet commitments, he said.

The programme should take into account plans for each stage of CPTPP enforcement, keeping in mind not only compliance with the pact, but also maintaining attainable goals for the economy and business community, he noted.

He added further that it should also include actions to support businesses affected by the CPTPP, particularly micro-, small-, and medium-sized enterprises, as well as those vulnerable in rural and agricultural sectors. If these businesses are not beneficial, the enforcement of the deal could be a failure, he said.

Echoing Loc’s view, NA deputy Le Thu Ha from Lao Cai suggested that the Government develop a mechanism to deal with issues that may arise when the CPTPP enters into force, such as commercial disputes. She also emphasised the need to raise awareness among local firms of new CPTPP commitments.

The effective implementation of the CPTPP requires not only local firms but governmental agencies as well to thoroughly understand the related domestic regulations and international practices that will put the trade deal to work, said NA deputy Nguyen Chien from Hanoi.

In addition, enterprises must pay more heed to improving the competence of their workers and learning about copyright and trade protection policies of CPTPP member countries so as to sustain their business development, he noted.

The CPTPP was signed by 11 member states, namely Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam in March 2018. 

It is one of the most comprehensive trade deals ever concluded, stripping 98 percent of tariffs for the 11 countries, who have a combined GDP of more than 13.8 trillion USD and close to 500 million consumers.

The pact will be enacted provisionally 60 days after it has been ratified by six countries.

As such, the CPTPP is hoped to take effect in December 2018 as, thus far, Mexico, Japan, Singapore, New Zealand, Australia, and Canada have all already ratified the deal.

Turbines installed at Song Hau 1 thermal power project

The high and intermediate pressure turbines of the first generating unit at the Song Hau 1 thermal power project were installed successfully on November 12, according to the project’s management board.

The turbines, with a combined capacity of 630,000 kVA and 230 tonnes in weight, were created by the Republic of Korea’s Doosan Group.

The installation of these turbines is one of the most significant phases in the completion of the first generating unit, as well as the Song Hau 1 thermal power project more generally.

Previously, the low pressure turbine and generator of the first generating unit had been successfully installed.

With more than 3,000 workers, the Song Hau 1 thermal power project is set to be completed and connected to the national grid by the end of 2020. 

Transfer pricing is normal in business: AmCham

Vietnamese authorities consider transfer pricing a form of tax evasion, but the American Chamber of Commerce in Vietnam (AmCham) insists that transfer pricing is a normal activity of multinational companies.

Speaking at a November 9 seminar entitled “Gaining Clarity on the Changing World of Transfer Pricing,” Adam Sitkoff, executive director of Amcham Vietnam in Hanoi, voiced his concern over the popular understanding of transfer pricing as a tax evasion tool and a violation of the law.

As Vietnam is in the process of integrating into the global economy, and while intra-firm and cross-border transactions are on the rise throughout the country, such subjective points of view and misconceptions about transfer pricing will prevent international investors from entering Vietnam, Sitkoff said.

Adam asserted that transfer pricing is a normal transaction among multinationals.

Moreover, Senior Advisor of International Tax and Investment Center Wayne Barford said that transfer pricing refers to the rules and methods for pricing transactions within and between firms under common ownership or control.

Due to the potential for cross-border controlled transactions to alter taxable income, tax authorities in many countries can adjust intragroup transfer prices with different methods. One of the methods is based on an arm’s-length principle.

“Transfer pricing is basically not illegal,” Barford said, adding that cheating at prices or the abuse of transfer pricing to avoid paying taxes is illegal.

A report recently released by the General Statistics Office shows that State-owned firms’ tax payments amounted to a maximum of VND104 billion each in 2016, VND18 billion higher than the amount paid by each foreign direct investment (FDI) enterprise.

Meanwhile, the FDI sector put in the best performance, with its business effectiveness towering over the State and private sector at 6.9% in 2016.

Despite its high profits, the FDI sector’s limited contribution to the State budget stoked concern that transfer pricing exists among FDI firms.

Addressing the seminar, Nguyen Van Toan, vice chairman of the Vietnam Association of Foreign-Invested Enterprises, said that the concept of transfer pricing had been interpreted differently.

Transfer pricing is considered an act of tax evasion and an illegal practice in Vietnam, but it should be understood that the associated transactions are a normal activity among firms. The type of transactions related to supplying materials, selling products and providing services and technologies can smooth the path for the operations of enterprises.

However, behind associated transactions, transfer pricing can exist. In addition to FDI firms, domestic enterprises can also transfer prices, Toan noted.

Sitkoff said that it is necessary to look for a solution to tighten controls on spending, instead of increasing tax collections and preventing transfer pricing. Also, a system of efficient and fair tax collections is needed to be put in place.