AEON wants to invest in Vietnam’s financial sector

Deputy Prime Minister Vuong Dinh Hue (R) and AFS Chairman Masaki Suzuki 

The AEON Financial Service (AFS) Co. Ltd., the owner of Japan’s AEON retail chain, wants to expand its financial services in Vietnam through merge and acquisition activities, said AFS Chairman Masaki Suzuki.

In a meeting with Deputy Prime Minister Vuong Dinh Hue in Hanoi on February 25, the AFS leader pledged long-term investment in Vietnam to contribute to the country’s consumer finance market.

He said that AEON considers Vietnam a key investment destination in the region with the group planning to pour some 5 billion USD into shopping malls around the country, raising the total to 30 malls and creating jobs for 50,000 local labourers.

The host, for his part, applauded the firm’s strategy to expand investment in Vietnam, saying that besides bolstering exports, the Vietnamese Government is also interested in developing the domestic retail market.

The total retail sales of goods and services in Vietnam in 2018 rose 12 percent year-on-year, he said, adding that the AEON shopping mall model has been widely preferred by Vietnamese consumers thanks to its integration of business activities and many other services.

He also lauded AEON for bringing Vietnamese products to its shelves and shipping local goods to AEON chains worldwide, and described it as a sustainable development strategy that AEON should pay more attention to.

Hue voiced his support for AEON’s plans to expand investment in the financial sector in line with market regulations, helping to improve the capacity and business efficiency of both AEON itself and payment methods in Vietnam.

Event reviews Vietnam-Japan economic cooperation

At the event (Photo: vccinews.vn)

An event to review economic cooperation between Vietnam and Japan over the years and towards effective development in the future was held by the Vietnam Chamber of Commerce and Industry (VCCI) on February 25.

The Vietnam-Japan economic dialogue is part of a working visit to Vietnam by a Japanese business delegation led by Yoichi Kobayashi, Chairman of the Japan-Mekong Business Cooperation Committee, from February 24-27.

The dialogue offered a chance for businesses from the two countries to meet, exchange information, and seek future partners; while exploring the potential for bilateral economic, trade, and investment cooperation.

Opening the event, VCCI Chairman Vu Tien Loc stressed the significant contributions of multifaceted cooperation between the two countries towards Vietnam’s socio-economic development over the years.

Potential for cooperation will be accelerated further in some fields, such as high-tech agriculture, the supporting industry, tourism, and science-technology, he added.

Japan is currently Vietnam’s second largest foreign investor, third major partner in tourism, and fourth leading trade partner, while two-way trade values hit nearly 40 billion USD in 2018.

Meanwhile, Vietnam is among countries with huge potential for attracting foreign investment and there are many chances for the supporting technology development in the country for Japanese small- and medium-sized enterprises, Loc said.

In the previous year, Vietnam exported various products to Japan, including garment-textile, devices and accessories, aquatic products, and timber and wooden products. The country imported from Japan machinery and devices, tools and accessories, computers, electronic products and spare parts, and iron and steel, among others.

For his part, Kobayashi said that exchanges and dialogues have helped to strengthen the Japan-Vietnam friendship, adding that with a population of nearly 100 million people, Vietnam is becoming an attractive consumer market for foreign investors, including those from Japan.

Director of Japan Airlines Shinichiro Shimizu said that as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has come into force, the Vietnam-Japan relations look likely to be enhanced in the time to come. 

He said that Japanese firms expect to tighten cooperation and share experiences with Vietnamese counterparts to support each other in raising business efficiency. The two sides also need to pay attention to and address problems during the implementation of the CPTPP, especially in logistics, he noted. 

Improving productivity to boost economy

Thanks to noticeable improvements in recent times, Vietnam has been considered a high labour productivity growth country in ASEAN. However, the country’s labour productivity still remains low. Experts said Vietnam should focus on improving productivity to boost the economy and overcome the middle income trap.

During 2016-2018, Vietnam’s labour productivity climbed an average of 5.75 percent a year. The high growth has helped the country become a nation which has the highest labour productivity growth in ASEAN. However, experts said the growth is unsustainable.

Over the past years, labour density in agriculture, forestry and fishing dropped from 55.1 percent to 44 percent. This is a high figure compared to other countries in the region.

Increased productivity is vital to Vietnam’s GDP growth. It contributes 89 per cent of GDP this year, up from 66 per cent in the 1990-2000 period, and 61.9 per cent in the 2000-2012 period.

Experts have said improving productivity is a crucial requirement for Vietnam. Boosting labour productivity is an essential condition for the country to achieve its target to become a middle income country in 2035.

Cement, clinker demand to edge up this year

A cement factory in the northern province of Hai Duong. 

Demand for cement and clinker is expected to increase marginally to 98-99 million tonnes, according to the Ministry of Construction.

This would include domestic consumption of 70 million tonnes and exports of 28-29 million tonnes, it said.

Demand grew by 19 percent last year to 96.7 million tonnes, with exports accounting for 31.6 million tonnes after rising 55 percent.

Export prices too shot up last year to 44 USD per tonne from 38-38.5 USD at the end of 2017.

Export of clinker (the main raw material to make cement) was higher than that of cement since many large cement companies abroad lacked raw materials.

China’s shutting down of polluting cement plants and forcing some others to cut production had created an opportunity for Vietnamese firms to increase exports.

Last year, Vietnam shipped 9.8 million tonnes of cement and clinker to China, accounting for 31 percent of its total exports. 

The ministry said two cement production lines are scheduled to go on stream this year, increasing the country’s output of 101.74 million tonnes.

Nguyen Quang Cung, Chairman of the Vietnam Cement Association, said cement exports are expected to remain positive this year.

The main export markets in 2019 would be the Philippines, Bangladesh, China, Taiwan (China), and Peru, he said. 

China would continue with its policy of shutting down polluting plants, reducing supply, and prices were higher there than in many other markets, thus offering Vietnam a good opportunity to boost exports to it, he said.

But he and experts have warned there would be challenges facing Vietnamese cement exporters this year.

For instance, the Philippines has decided to impose provisional safeguard measures on cement imported from various countries, including Vietnam, to protect the local industry, which is being hurt by rising imports.

The provisional safeguard measures will be in the form of a cash bond of 210 pesos (4 USD) per tonne for a period of 200 days.

Besides, its production capacity has increased, and so its cement imports would drop in future, experts said.

Cung said Vietnamese cement enterprises should keep a close eye on Chinese and global market developments.

Over 2 billion USD raised via G-bond auctions so far this year

The State Treasury of Vietnam has so far this year raised more than 51.24 trillion VND (2.19 billion USD) via Government bond (G-bond) auctions on the Hanoi Stock Exchange (HNX).

In the latest auction held on February 20, the State Treasury offered a total of 10 trillion VND worth of G-bonds with different maturities, including five-year bonds valued at 1.5 trillion VND, and 15-year bonds valued at 3 trillion VND and 20-year bonds valued at 500 billion VND. 

At the auction, 3.95 trillion VND was raised, of which 12 investors spent 650 billion VND for five-year bonds at the average yield rate of 3.63 percent per year, down 0.17 percentage points against the previous auction on January 30, 2019; nine investors spent 2.9 trillion VND for 15-year bonds at the average yield rate of 5 percent per year, down 0.03 percentage points against the previous auction on February 13, 2019.

The State Treasury plans to issue five-year to 30-year G-bonds worth 260 trillion VND via auctions in 2019 at an average maturity of some 13 years. 

According to Tran Van Dung, Chairman of the State Securities Commission, there were 573 listed bonds with total value of 1.12 quadrillion VND in 2018, up 10.4 percent year-on-year. Of the figure, the value of G-bonds accounted for 98 percent of the total and the remainder were corporate bonds. 

The market is forecast to have growth potential as its size was equal to 35.2 percent of Vietnam’s total GDP last year, which remained modest compared to other regional and international bond markets such as Malaysia (97.7 percent), Singapore (86 percent), the Republic of Korea (125.7 percent) and Japan (211.4 percent).

The Government has also approved the roadmap for the development of the bonds market by 2020 with a vision for 2030, in which the outstanding debt in the Vietnamese bond market is targeted at 45 percent of the total GDP in 2020 and some 65 percent of GDP in 2030.

Vietnam asked to enhance quality offarm produce to enter choosy markets

Although export revenue of agricultural products has grown in recent years to more than 40 billion USD, experts have said the figure may rise higher if Vietnamese farm produce can meet the technical standards of import markets, especially developed ones.

After nearly 10 years of negotiation, in February 2019, Vietnamese mango was officially accepted into the US market, becoming the sixth fruit eligible to be sent to the market along with dragon fruit, litchee, longan, rambutan and star apple.

The US is the second biggest importer of Vietnam, after China, with a revenue of 126 million USD in 2018. More importantly, this is a choosy market with the strictest technical requirements in the world. Therefore, conquering this market would mean Vietnamese agricultural products could more easily enter other high-end markets.

Vietnam is now the 15th biggest exporter of agricultural products, but many experts have said the growth of the sector remains unsustainable.

On average, only 5 percent of Vietnamese farm produce are exported to picky markets such as the US, Europe, Japan and the Republic of Korea. Therefore, when cross-border export faces stagnant, Vietnam will fall into high stock and drop in price of agricultural products.

Experts said that Vietnamese farmers and exporters have yet to actively approach GlobalGAP standards at the beginning, or failed in realizing commitments after receiving the certificates.

They advised Vietnam to standardise and improve the quality of agricultural products through strictly following VietGAP, HACCP and GlobalGAP standards from sewing to harvesting.

At the same time, it is necessary to invest more in packaging, design and trademark registration and implement origin regulations, thus improving the value of Vietnamese farm produce.

Experts also stressed the need to support trade promotion activities by giving more market information and connecting domestic firms with foreign partners, and introducing Vietnamese products in the global market.

They said that if comprehensive measures are deployed, the target of 43 billion USD in exports of farm produce is reachable.

Tien Giang rice market faces glut as exports stalled

Farmers harvest rice in the Mekong Delta 

The Mekong Delta province of Tien Giang, alongside some neighboring localities, is looking for solutions to ease the glut in the local rice market as export deals, especially for China-bound shipments, have almost come to a halt, heard a meeting in the province yesterday, February 22.

At the meeting  on the consumption of rice from the 2018-2019 winter-spring crop for farmers in Tien Giang Province, Doan Van Phuong, director of the provincial Department of Industry and Trade, said the province had exported some 6,800 tons of rice at US$3.5 million in the year to date, plunging 80.56% in volume and 72.58% in value over the same period last year.

According to Nguyen Van Don, director of Viet Hung Co., Ltd as a local rice exporter, the company faced many difficulties with exports in the first two months of the year. In the same period last year, his company signed a contract to ship 20,000 tons of rice to China, but no contracts have been signed in recent months, Don said.

Chinese importers have consigned the Plant Protection Department, under the Vietnamese Ministry of Agriculture and Rural Development, to inspect 20 local enterprises entitled to export rice to China over quality requirements. The department has completed the inspection, but its results have yet to be announced.

Phuong stated that only two companies in the province were allowed to export rice to China: Viet Hung Co., Ltd, and Tien Giang Food Company. Enterprises exporting rice to the northern neighbor must meet certain requirements on product quality and safety and material origins, he said.

At the meeting, Tien Giang Vice Chairman Pham Anh Tuan advised enterprises to purchase rice for storage while waiting for the Government’s directions.

On February 26, the Ministry of Agriculture and Rural Development will hold another meeting with the relevant ministries and agencies and Dong Thap Province to find solutions for boosting rice consumption from the 2018-2019 winter-spring crop.

Prime Minister Nguyen Xuan Phuc on February 19 approved a proposal to purchase 80,000 tons of unhusked rice and 200,000 tons of rice from farmers for storage to cope with the sharp drop in the price of rice in the Mekong Delta region.

Masan targets double digit growth

An animal feed production line of Masan Nutri-Science, an affiliate of Masan Group Corporation. MSN targets double digit growth this year. — Photo Courtesy of Masan

 Masan Group Corporation targets net revenues of VND45.2-50 trillion (US$1.9 - $2.15 billion) this year, an increase of 18-31 per cent from last year.

Its net profit after tax post-minority interest (NPAT Post - MI) is expected to reach VND5-5.5 trillion this year, up 44-58 per cent from last year and taking the profit margin to over 10 per cent.

Net revenues and NPAT Post - MI of Masan Consumer Holdings, a subsidiary, are expected to grow by 20-35 per cent and 30-35 per cent, respectively.

It plans to speed up premiumisation of seasoning products, convenience foods and beverages this year, but has said that a key risk is slower consumer off-take and continued slow momentum in beer.

Masan Nutri-Science targets an increase in net revenues of 20-30 per cent, with revenues from fresh meat expected to contribute nearly 10 per cent. The feed business is expected to grow by 10-15 per cent.

It plans to invest VND30-70 billion ($1.29- 3.01 million) from internal resources to scale up meat distribution.

But a key potential risk is a pig disease outbreak, which would impact feed sales growth and slower consumer adaptation to chilled fresh meat.

Masan Resource’s net revenues are expected to grow by 12-22 per cent driven by increased sales volumes. Its profit is expected to go up by VND700 billion to VND1 trillion.

MSN Group’s net profit after tax post-minority interest was VND4.9 trillion last year, including VND3.47 trillion ($151.2 million) from its core business sectors, a year-on-year increase of 57.1 per cent.

It successfully launched its fresh meat brand “MEATDeli” last year as it seeks to gradually make over Masan Nutri-Science into an FMCG business.

MSN Group chairman and CEO Nguyen Dang Quang said: “We have completed the first year of the five-year growth plan and this is just the beginning. Masan Consumer will continue its strategy of maximising product portfolio through new products that bring added value to achieve revenue growth of 20 per cent plus each year.

“With the launch of MEATDeli, Masan Nutri-Science will become a branded FMCG business by converting the $10.2 billion pork market through setting the new standard for safe fresh and processed meat products.”

Viet Nam raises over $2b via G-bond channel in first months of 2019

Staff at the Ha Noi Stock Exchange (HNX) organise a G-bond auction. 

 The State Treasury of Viet Nam has so far this year raised more than VND51.24 trillion (US$2.19 billion) via Government bond (G-bond) auctions on the Ha Noi Stock Exchange (HNX).

In the latest auction held on February 20, the State Treasury offered a total of VND10 trillion worth of G-bonds with different maturities, including five-year bonds valued at VND1.5 trillion, and 15-year bonds valued at VND3 trillion and 20-year bonds valued at VND500 billion.

At the auction, VND3.95 trillion was raised, of which 12 investors spent VND650 billion for five-year bonds at the average yield rate of 3.63 per cent per year, down 0.17 percentage points against the previous auction on January 30, 2019; nine investors spent VND2.9 trillion for 15-year bonds at the average yield rate of 5 per cent per year, down 0.03 percentage points against the previous auction on February 13, 2019.

The State Treasury plans to issue five-year to 30-year G-bonds worth VND260 trillion via auctions in 2019 at an average maturity of some 13 years.

According to Tran Van Dung, chairman of the State Securities Commission, there were 573 listed bonds with total value of VND1.12 quadrillion in 2018, up 10.4 per cent year-on-year. Of the figure, the value of G-bonds accounted for 98 per cent of the total and the remainder were corporate bonds.

The market is forecast to have growth potential as its size was equal to 35.2 per cent of Viet Nam’s total GDP last year, which remained modest compared to other regional and international bond markets such as Malaysia (97.7 per cent), Singapore (86 per cent), the Republic of Korea (125.7 per cent) and Japan (211.4 per cent).

The Government has so far also approved the roadmap for the development of the bonds market by 2020 with a vision for 2030, in which the outstanding debt in the Vietnamese bond market is targeted at 45 per cent of the total GDP in 2020 and some 65 per cent of GDP in 2030.

Non-fired bricks to be promoted

Increasing the use of non-fired building materials is a trend in many countries, including Viet Nam.

Preferential mechanisms and policies have opened new directions for this type of material in market access.

Speaking with reporters from Cong Thuong (Industry and Trade) newspaper, Nguyen Quang Hiep, deputy director of the Construction Materials Department under the Ministry of Construction, said that the encouragement of production and use of non-fired building materials has been stipulated in mechanisms and policies.

As per the programme of developing non-fired building materials under Decision No. 567/QD-TTg, the annual target is to use 15 to 20 million tonnes of industrial waste such as ash or thermal slag to produce non-fired building materials.

If the Government wants to increase the use of non-fired bricks, the price must be attractive and full information must be given to users, said Hiep.

Non-fired brick producers needed encouraging policies to lower costs, he said.

Enterprises had actively applied technology and invested in production to supply the market with many quality construction material products, gradually diversifying products, Hiep said.

At the same time, Bach Dinh Thien from the National University of Civil Engineering said that it was necessary to boost communications so that non-fired bricks were more widely used.

Currently, there are many production lines of non-fired bricks with advanced technology and large capacity, including factories of Tan Thanh 9 in Thanh Hoa Province; Tran Chau in Ha Tinh Province; and Dai Dung Xanh in HCM City.

"With the use of modern production lines with high productivity, non-fired bricks will be cheaper and competitive in comparison to fired clay bricks," Thien said.

Ha Noi wants Asia Foundation to help boost urban agriculture

Farmers tend to their vegetables in Hoai Duc, a suburban district of Ha Noi. 

 Ha Noi is willing to co-operate with Asia Foundation to promote urban agricultural production, said Chairman of Ha Noi Nguyen Duc Chung at his meeting with Asia Foundation’s Country Representative in Viet Nam Michael DiGregorio.

Speaking at the meeting in the capital city on Thursday, Chung said he appreciated the operational efficiency of the Asia Foundation’s projects in Ha Noi. He said its urban agricultural development projects had contributed to improving people’s living standards.

Chung emphasised the importance of the group’s projects and the need for them to be expanded.

“We are willing to receive investors in the fields of production and social security,” Chung said.

He said the capital city was always looking for new expertise and advanced technologies that would aid its efforts to develop into a smart city and improve the lives of residents.

“In the past three years, Ha Noi has made progress in food safety, clean vegetable growing and husbandry, helping to meet the consumption demand of local residents,” Chung said. “We are boosting tree planting programmes to minimise air pollution.”

“The city has also been installing air and water pollution monitoring stations, applying advanced waste treatment technologies,” he added.

Michael DiGregorio introduced his foundation’s strengths and interest in financial support for low-income earners, air quality assessment, urban agricultural development and supplying clean vegetables.

The US-based Asia Foundation is a non-profit international development organisation committed to improving lives across Asia. It has operated in Viet Nam for 20 years and has carried out 23 programmes in various fields. 

Power generation prices set to be higher

A new price scheme for power generation was issued. — Photo cafef.vn

 The Ministry of Industry and Trade has issued Decision No 281 which increases the prices for power generation in 2019.

These prices are used to negotiate power purchase agreements between the State-run Vietnam Electricity and power plants.

Accordingly, the prices for power generation in coal-fired power plants are set to range between VND1,677 and VND1,896 (US$0.07-0.08) per kWh during 2019, excluding some taxes, sea port fees and infrastructure. The prices are VNDD359 and VND76 per kWh higher than those of 2018.

The ceiling prices for power generation in hydropower plants this year would be increased by VND20 per kWh than last year to reach VND1,100 per kWh excluding taxes.

The ministry’s calculation showed that the price of imported coal this year is VND1.74 million per tonne excluding taxes and transport costs, increasing VND0.14 million from the previous year. The rise in the price scheme for power generation was partly due to the increase of imported coal prices.

The 2019 power generation prices have been calculated on the basis of net fuel consumption rates of 0.478 kilo per kWh applied to the net capacity of 1x600 MW and 0.474 kilo per kWh for the capacity of 2x600 MW.

Another indicator was the reference exchange rate of VND23,350 per US dollar.

Last year, the electricity generation prices fixed for coal-fueled power plants reportedly fell from VND1,597.22 to VND1,600.04 per kWh while the price for hydropower plants was VND1,090 per kWh.

The decision took effect on February 12, 2019. 

Int’l accounting rules can help Vietnam attract investment

The Japan International Co-operation Agency in collaboration with the Ministry of Finance organised a seminar held in Ha Noi on Friday on the application of international accounting systems. — Photo congluan.vn

 The adoption of International Financial Reporting Standards (IFRS) would help Viet Nam create a more transparent business environment to attract foreign direct investment.

The statement was made by Deputy Minister of Finance Do Hoang Anh Tuan at a seminar held in Ha Noi on Friday, themed “Experience in Applying IFRS Internationally and Roadmap for Adoption in Viet Nam”, co-organised by the Japan International Co-operation Agency (JICA) and the Ministry of Finance (MoF).

“Viet Nam has a high and growing degree of economic openness. The free trade agreements the country has signed all encourage free trade and investment capital flows, especially from the private sector. Therefore, the application of international accounting systems is crucial and inevitable,” Tuan said.

Konaka Tetsuo, chief representative of JICA in Viet Nam, said the IFRS was an important financial tool, supporting investors with accurate financial information when making investment decisions, as well as helping mobilise global financial resources.

In Viet Nam, JICA had provided financial and technical support, facilitating the exchange of experiences on applying IFRS in Japan and other Asian countries, and helping strike a balance between the application of IFRS and the national accounting system.

According to a representative of the Accounting and Auditing Policies Department under the Ministry of Finance, the application of IFRS would bring practical benefits to enterprises as the quality of their financial statements would be significantly improved, while transparency, accountability and comparability would also be enhanced.

IFRS is widely accepted and applied internationally, so it would make it easier to compare the situation and financial results of businesses between different countries. By applying these new financial reporting norms, Vietnamese businesses would have a better chance of raising capital in the international market.

The representative also said the application of IFRS would create favourable conditions for attracting foreign direct investment into Viet Nam. As a result, the number of multinational companies operating in Viet Nam would increase as they would no longer need to convert from national accounting standards to IFRS.

However, participants at the seminar said the application of IFRS in Viet Nam still faced many challenges. The country’s capital and financial markets were not strong enough. Some financial instruments such as convertible bonds, derivatives and preferred stocks were not widely traded so most businesses had little experience in conducting transactions. This meant it was not always possible to provide accurate and valuable financial information.

The language barrier was also a difficulty since IFRS was drafted in English. To disseminate and promote IFRS, it needed to be translated from English into Vietnamese.

However, it would be very difficult to translate technical terms accurately. On the other hand, when a dispute occurred between a business, auditing and inspection agencies, the language barrier made it more complex for both sides. 

Ca Mau builds brands for agro-forestry-fishery staples

Shrimp harvesting in Ca Mau province 

The southernmost province of Ca Mau is building brands for local key products in the fields of agriculture, forestry and fishery.

The province has over 300,000 hectares of aquaculture, including 280,000 hectares of shrimp farms, making up about 40 percent of the country’s shrimp breeding area.

At present, the locality is working to expand the shrimp breeding area meeting international standards such as those set by the Aquaculture Stewardship Council (ASC) and Best Aquaculture Practices (BAP), as well as the Vietnamese Good Agricultural Practices (VietGAP).

Statistics showed that in 2016-2018, the local shrimp output reached nearly 520,000 tonnes.

The provincial People’s Committee has directed relevant agencies to speed up the building of geographical indications for shrimp. 

Besides shrimp, priority will be given to building brands for two key products which are Thoi Binh rice and Ca Mau banana.

Over the past time, Ca Mau has successfully built nine collective brand names for local specialties including U Minh honey, Rach Goc dried shrimp, and Nam Can crab.

Quality, tech help Vietnamese products go global

Nguyen Manh Dung, CEO of Namilux, one of the leading gas stove manufacturers in Vietnam, said his company tied up with a Japanese partner and has adopted Japanese standards in its production for nearly 20 years.

Now it exports mini gas stoves, heating stoves, grills, and lamps to more than 20 countries, and has consolidated its position and brand name not only in the domestic market but also in fastidious markets, he said.

“Firms cannot stand firm if they do not attach importance to standards and technology.”

In addition to following international standards, “we have pursued solutions to improve technology and automate gas stove production.

“Technology plays an important role in helping NaMilux get such a position in the domestic and export markets.” The company has automated over 70 percent of its production stages, he said.

“We are automating the rest [too]. We will also apply enterprise resource planning (ERP) system to unify the management of the entire NaMilux factory.”

Nguyen Phuoc Hoa, an expert who is compiling the Vietnamese High Quality Products-Global Integration Standards for the non-food sector, said: “Standard certificates are considered the passport for Vietnamese products to be exported. Each market has its own requirements in terms of standards, requiring firms to study the market carefully and achieve the standards required by their target markets.”

Speaking at a conference titled “Which wings to enable Vietnamese goods to enter the world market” in HCM City on February 20, Nguyen Hoang Linh, deputy general director of the Directorate for Standards, Metrology and Quality, said: “According to statistics, in recent years more than 80 percent of the value/volume of international trade transactions has been affected by standards, 84 percent of trade organisations use standards in their export strategies/activities.”

There are more than one million standards (at the international, regional, national, grass-root levels) published and adopted around the world, he said.

“Standards, technical regulations, conformity assessment/procedures may become technical barriers to trade in certain cases.”

Hoa said most international standards target consumer safety, and having standard certification would make buyers to trust product quality.

Besides having good product quality, enterprises also need to have good factory management systems and focus on corporate social responsibility, he said.

“Buyers sometimes come to see how you produce the products, even how you treat garbage.”

According to businesses, Vietnamese goods require standard certification to reach store shelves in foreign markets, and at the same time Vietnamese producers must increase investment in technology to improve their competitiveness.

Vu Kim Hanh, Chairwoman of the High Quality Vietnamese Product Business Association, said: “Depending on the needs of each enterprise and each industry, businesses determine what areas and phases to digitise first.

“The most important thing is enterprises must understand the role and impact of technology.”

Most ASEAN member countries have strategies and policies for practical training and support for small and medium enterprises in digitisation to bolster their competitiveness, she said.

Many Vietnamese firms such as Phu Nhuan Jewelry JSC, Dien Quang Lamp JSC, Pomina Steel, Co May Company, Minh Long I, Vinamit, ABC Bakery and Namilux have invested in digitising their production and trading, and enjoyed fruitful results. But many others, especially small ones, do not have the capacity to do that.

Nguyen Phi Van, Chairwoman of Retail and Franchise Asia and franchise advisor to the Malaysian government, said discussions on how to improve the competitiveness of local firms so that they can compete with foreign players have been going on for a long time.

“But actions by government agencies and enterprises themselves are very slow compared to changes in the market,” she said.

“Integration offers a golden opportunity for businesses to develop but also massacres those who don’t have sufficient capacity to integrate.”

Consumer demand is changing in the global market, with an increase in demand for green products and products that are good for health, she said.

With the boom in technology, interaction between businesses and consumers is quite different compared to the past, and customers nowadays prefer to spend their money on “experiences rather than products,” she said.

“Therefore, if you do not adopt technologies to rebuild your business model for the 21st century, you will find it hard to succeed even in the Vietnamese market, let alone the global market.”

Vietnamese duck meat to be shipped abroad

Mavin Group has imported high-quality duck breeds from the UK and France to Vietnam and applied modern cross-breeding technologies to create breeds suitable to the local climate. (Source: mavin-group.com)

Mavin Group, a food joint venture between Australia and Vietnam, is aiming to export Vietnamese duck meat in the future, given the increasing demand for this product.

The group said it has imported high-quality duck breeds from the UK and France to Vietnam and applied modern cross-breeding technologies to create breeds suitable to the local climate.

Mavin has also applied flexible and advanced breeding models, and produced antibiotic-free animal feed.

The group has set up duck breed production centres in the northern provinces of Hung Yen, Phu Tho and Thai Binh, and Hau Giang and Dong Thap provinces in the southern region, with total annual capacity of 12 million ducklings. 

With new duck breeds and farming technologies, the group hopes to account for 40 percent of Vietnam’s duck meat market in the next five years. 

Founded in 2004, Mavin Group is one of few Vietnamese enterprises that have successfully implemented the “From Farm to Table” supply chain, and was also one of the first food firms in Vietnam to implement a highly automated system in all the production processes.

Mavin became the first business in Vietnam to export fresh pork to a foreign market when the first batch was shipped to Myanmar in May 2018.

Product quality a prerequisite to win RoK consumers’ taste

Vietnamese dragon fruit has been allowed to enter RoK market. (Photo: congthuong.vn)

Vietnamese exporters should improve quality of their products if they want to increase their shipments to the Republic of Korea (RoK), the market that is enforcing more stringent control on imported products, experts have said.

The Positive List System (PLS) has been carried out in the East Asian country to strengthen safety management of all the imported agricultural products, including those from Vietnam, since January 1. This means Vietnamese enterprises need to pay close attention to the fact that only those products with safe standards of residue level are allowed to break into this market.

Local firms are urged to study and comply with the RoK’s residue regulations to ensure their foothold in this important market.

Besides, they should pay attention to bettering their packaging as RoK shoppers prefer products with eye-catching wrapping.

According to the General Department of Vietnam Customs, Vietnam exported 19.6 billion USD worth of products to the RoK in 2018, up 21.4 percent against the previous year. In January this year alone, Vietnam earned 1.83 billion USD from exporting products to the East Asian country.

The RoK is currently an important market of Vietnamese agricultural products. Exports of seafood, vegetable and fruits to the RoK have been on the rise, particularly after the Vietnam-Korea Free Trade Agreement took effect in late 2015.

Japan provides aid for organic agriculture, teaching projects

Japanese Consul General Kawaue Jun-Ichi (second from right) at the signing ceremony for two projects that will help farmers and teachers in three provinces. (Photo courtesy of Japanese Consulate in HCM City)

The Japanese government on February 25 organised a signing ceremony to provide non-refundable aid worth a total of more than 300,000 USD for two ongoing projects in Vietnam.

One of the projects, which has received more than 193,000 USD for its year-long third phase, will be implemented by Japanese non-profit organisation Seed to Table to develop organic agriculture in the Cuu Long (Mekong) Delta province of Ben Tre.

The third phase, which will be carried out in Binh Dai and five other districts, will provide equipment and training on organic farming for farmers in an aim to increase their income. 

Farmers will receive assistance to build fertiliser composing houses and processing and packaging facilities for post-harvest organic products.

The project, which has been operating in Ben Tre province for more than 10 years, has received praise for its support activities for farmers and local authorities. 

The other project’s year-long third phase, worth 111,851 USD, will be implemented by Japanese non-profit organisation Asia Rainbow. It aims to help localities develop an integrated education system at primary schools for children with disabilities in Binh Thuan and An Giang provinces.

In previous years, Asia Rainbow supported Dong Nai and Lâm Dong provinces, and it continues to support An Giang and Binh Thuan provinces. 

The third phase will include a two-week training course on psychological counseling methods for local teachers and general teacher training for children with disabilities in the provinces. 

The project will also focus on psychological counseling for parents of children with disabilities.

Speaking at the signing ceremony, Japanese Consul General Kawaue Jun-Ichi, said: “Although Vietnam has had significant economic developments, there are many areas that need to be improved.”

“The two projects are about health and food safety, as well as support for children with disabilities, in which Vietnam needs support. We consider these as very effective projects,” he added.

Dong Nai records three-fold surge in FDI

Foreign direct investment (FDI) to the southern province of Dong Nai hit 186.4 million USD in the first two months of this year, surging three times against the same period last year, according to the provincial Department of Planning and Investment.

In the reviewed period, Dong Nai issued licences to 15 new projects with a total registered worth 149 million USD, and granted permission to add another 37.36 million USD into nine existing ones.

The department said that those projects are in the fields of high technology and supporting industries, which are environmentally-friendly.

Some notable projects include the Chang Shin Vietnam manufacturing factory at the Thanh Phu Industrial Park with a registered capital worth 100 million USD, projects of the SYF Vietnam at the Giang Dien IP and Semba Tohka Vietnam at the Long Duc IP with 10 million USD and 9.2 million USD in capital, respectively.

Dong Nai province is home to nearly 1,900 FDI projects totalling 33.9 billion USD in capital. Of the number, there are about 1,400 valid projects worth 28.7 billion USD.

The projects belong to investors from 45 countries and territories worldwide, mostly from the Republic of Korea, Taiwan (China) and Japan.