BUSINESS NEWS 11/6

Dual benefits of investing in luxury apartments in District 1

BUSINESS NEWS 11/6

According to a report by CBRE Vietnam, the entire Ho Chi Minh City only has around 400 luxury apartments priced from $3,500-7,000 per square metre, mainly concentrated in the heart of District 1, accounting for a humble rate of only 0.3 per cent of the total apartment supply (nearly 160,000 units).

The luxury segment is heated up with new projects like The Grand Manhattan, which was launched by Novaland at the beginning of this year. The complex comprises of three 39-storey apartment buildings with four underground floors. It is being built on an area of 1.4 hectares, supplying 1,000 luxury apartments with long-term ownership for homebuyers.

As land is scarce in District 1, the primary and secondary prices of luxury apartment have been pushed up in the past few years. Bloomberg cited data from CBRE showing that prices for luxury condominiums in Ho Chi Minh City climbed 17 per cent in 2018 to an average of $5,518 per sq.m. The firm forecasts that prices will nearly 10 per cent by early 2020 to $6,000 per sq.m.

However, the price for a typical high-end apartment in Ho Chi Minh City is modest compared to other cosmopolitan cities in the region. It is only half of the average price of $15,800 per sq.m in Tokyo, only one-third of the $25,600 charged in Singapore, and much lower than the $45,000 in Hong Kong.

Thus, the price of high-end apartments in District 1 will continue to rise, opening up more room for long-term investment.

Tran Quang Hai Long, an investor of The Grand Manhattan project analysed its prime location, developer, as well as future supply for the segment. He is upbeat that the project will generate a high yield of 25-30 per cent.

In addition to the potential of rising prices, the high-end projects in District 1 also hold the prospect of generating high rental yields given that District 1 is an ideal living place for luxury tourists, senior managers of multinational corporations, as well as overseas Vietnamese people.

Elena Goh, a property investor from Singapore, is one of the first homeowners at The Grand Manhattan. She said that the price of high-end apartments in Ho Chi Minh City is much lower than in other markets like Hong Kong. Meanwhile, rental yields in the city can reach 4-5 per cent, compared with the 1-2 per cent in Hong Kong.

It is clear that luxury apartments for leasing in District 1 will be a sure-fire investment for long-term investors when compared with other investment channels. According to experts, other attractive investment channels are undergoing a slowdown. Condotel projects have legal problems while investing in securities involves risks and uncertainty so not all investors can afford to invest in these fields. Meanwhile, bank deposit interest rates are not so attractive to investors.

With the prospect of rising prices and high rental yields, luxury apartments in the downtown like The Grand Manhattan have become the first option of sophisticated investors, especially foreign investors who place more emphasis on sustainability.

Deputy PM Hue receives Nike Vice Chairman

Deputy Prime Minister Vuong Dinh Hue hosted a reception for Nike Vice President Chris Helzer in Ha Noi on June 10.

Speaking highly of Nike’s contributions to Viet Nam’s exports and growth, he stressed that besides successful business operation, Nike has made an incredible job improving social welfare and human resources training in the country.

As Viet Nam will have more favourable policies for enterprises that apply high and environmentally friendly technologies as well as build R&D centres in the country, Deputy PM Hue hopes Nike will invest heavily in advanced technologies in the leather shoe sector.

The country will announce a new strategy to lure and use foreign direct investment (FDI) in the future. In addition, it is legalising its commitments to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and revising the Labour Code to make it more compatible with international commitments and to cultivate more harmonious industrial relations within enterprises, he stressed.

Regarding Nike’s recommendations, Deputy PM Hue said that the Government has asked Viet Nam Electricity (EVN) and the southern province of Dong Nai to ensure stable power supply for Nike’s production.

A wide range of wind and solar power projects will be put into use soon, helping ensure adequate electricity for local production.

As for corporate tax, the Government has directed competent ministries and agencies to settle the issue to harmonise benefits of both enterprises and the State, he said.

Chris Helzer affirmed that Viet Nam is the most important market of Nike’s production for export products as half of the corporation’s goods are produced in Viet Nam.

He lauded Viet Nam’s workforce who are industrious and willing to study to improve labour productivity and product quality, and thanked the Vietnamese Government, ministries and localities for supporting the firm over the past 24 years.

Support industry grows with HCM City's help

HCM City's preferential policies for the support industry in recent years has helped companies expand and secure contracts as suppliers with foreign-invested companies.

Nguyen Truong Bao, general director of Hiep Phuoc Industrial Park in Nha Be District, said that many support enterprises have begun new projects in the park.

In March, the Le Tran Joint Stock Company started construction of a new factory to produce ceiling and wall frames, and Schindler Vietnam Co Ltd signed a land lease contract for 10,000sq.m to build a elevator frames manufacturing factory.

Nguyen Phuong Dong, deputy director of the city’s Department of Industry and Trade, said the city has provided capital and technologies to support companies, and helped them look for partners and markets.

The city has also issued a resolution on an investment stimulus programme for support industries in the 2018-20 period.

Support businesses can receive a loan of up to VND200 billion (US$8.5 million) per project to invest in factories and new technologies.

Thanks to the investment stimulus programme, many enterprises have become level 1 and level 2 suppliers for foreign direct invested (FDI) manufacturers of electronic and automobiles.

The city has also helped enterprises connect with foreign enterprises so they can become more competitive and participate in global supply chains.

At the “Conference to Find Suppliers for FDI Enterprises in High-Tech Parks”, 20 qualified support enterprises were chosen to become suppliers for Samsung, Nidec and Sonion.

The city's training and consulting programme on productivity and quality has also helped businesses change their production process and business management.

The city will continue to help businesses use new management systems to meet the requirements of global production chains.

It will also offer training to improve the quality of human resources and create an online database of support industry enterprises in the city.

To meet demand, three support industry zones are expected to open by 2025 in the city.

By August 2018, HCM City had 1,200 businesses involved in the support industry.

Grab surpasses Vinasun in tax contribution in 2018

Grab has paid VND441 billion ($19.17 million) in taxes to the Vietnamese state budget in 2018, more than three times as much as traditional taxi firm Vinasun.

Although Grab has been accused of tax evasion by its rival Vinasun and traditional taxi associations, the ride-hailing firm has been making growing contributions to the Vietnamese state budget. The company paid VND441 billion ($19.17 million) in taxes in 2018, according to Document No.195/TB-CCT-KK, KTT&TH issued by Ho Chi Minh City’s District 10 Tax Department on January 7, 2019.

According to Vinsaun's consolidated financial report for the fourth quarter of 2018, the company paid VND144 billion ($6.26 million) to the Vietnamese state budget, which is only one-third of Grab’s tax payment.

With regards to tax management and the supervision of ride-hailing firms, Minister of Transport Nguyen Van The said that the companies are less likely to engage in tax evasion as the tax authorities have very broad oversight. “The state agencies ensure a fair playground for both local and foreign companies, ride-hailing and tradition taxi firms alike,” he added.

Clarifying this issue, Minister of Finance Dinh Tien Dung said that the ministry has researched and applied the current tax policies to collect tax from electronic contract-based vehicles. Currently, the Law on Tax Administration has been uniformly applied to different types of enterprises in terms of tax rates, preferential conditions, as well as tax exemption and reduction. Accordingly, enterprises which can determine their turnover, expenses, and corporate income like Grab, Mai Linh, or Vinasun need to submit a tax declaration on their own.

For foreign contractors like Uber, the tax authorities can determine their revenue but not expenses. Thus, foreign contractors must pay a fixed rate of value-added tax (VAT) and corporate income tax based on their turnover and expenses. These methods ensure a balance of tax payment among businesses.

“According to the statistics of nine ride-hailing firms including the likes of Grab and FastGo, the companies have to pay VND437 billion ($19 million) in taxes in 2018 and in the first four months of 2019. So far, they have paid VND415 billion ($18.04 million) in taxes,” he added.

According to Minister Dung, the Ministry of Finance has requested the Ho Chi Minh City Department of Taxation to examine Uber’s taxes during 2014-2016 to collect VND66.68 billion ($2.9 million) in taxes. As of August 31, 2018, Uber had already completed the payment of tax arrears.

In the coming time, Minister Dung said that the ministry will add these issues to the Law on Tax Administration and relevant policies. The tax authorities will proactively examine the tax affairs of these businesses to avoid tax evasion, in addition to providing information and implementing electronic invoices for passenger transportation activities under electronic contracts.

Czech Republic resumes work visas for Vietnamese citizens

The Czech Republic has resumed issuing long-term visas for Vietnamese workers after suspending it for almost one year.

From June 6, Vietnamese citizens can apply for long-term residential visas or visas to engage in business activities in the Czech Republic.

The country suspended the acceptance of work visa applications from Vietnam in July last year, citing "overloading" and security concerns.

The Czech Embassy in Vietnam has now received the first batch of 200 visa applications submitted by Vietnamese citizens who are planning to work in the Czech Republic from this August onwards.

Last April, Prime Minister Nguyen Xuan Phuc paid an official visit to the Czech Republic where he and his Czech counterpart Andrej Babiš agreed to promote labor cooperation.

The Eastern European country is now in need of 200,000 workers and, given its thriving economy, the figure is expected to soar up to 600,000 in the coming years.

According to the Ministry of Labor, Invalid and Social Affairs, around 500,000 Vietnamese citizens are living and working overseas. On average, more than 90,000 Vietnamese workers leave the country each year, mainly for labor-intensive and low-skilled jobs. Vietnam's total workforce is around 50 million.

Allow major state-owned firms to set wages independently: ministry

State-owned corporations, including Vietnam Airlines, should be allowed to set staff remuneration on their own, the labor ministry proposes.

The Ministry of Labor, Invalids and Social Affairs' proposal would mean that top executives of Vietnam Airlines, telecommunications firm VNPT, and Vietnam Air Traffic Management Corporation will be responsible for employee recruitment, and they might see their salaries or bonuses reduced if they recruit more staff than needed.

Their salaries range between VND40-70 million ($1,700-3,000) a month at present.

Both employees and employers could earn bonuses worth up to two-months’ pay if the company reports an increase in profits at the end of the year.

These companies can increase their salary funds to pay highly skilled workers who have been receiving low wages in the 2016-2018 period, the proposal says.

Several state-owned companies have been asking for a new mechanism to pay staff competitive wages as they are losing talents to private firms offering higher salaries.

Vietnam Airlines have been paying its Vietnamese pilots wages which are 60 percent that of foreigners, while VNPT pays its skilled labors 70 percent of the market rate, according to the ministry.

Duong Tri Thanh, general director of Vietnam Airlines, said last month that the airline was facing a brain drain as new companies entered the commercial aviation market.

Indian-invested sugar company workers call for help

More than 300 workers of Binh Dinh Sugar Joint Stock Company (Bisuco) have been left unemployed as the firm has suspended operations for months.

The Indian-invested company has owed a total VND19 billion (USD826,086) worth of salary, social and unemployment insurances to the workers who have been working there for at least 22 years.

Bisuco located at Tay Son District used to have a daily capacity of 2,000 tonnes of sugarcane.

According to Bisuco trade union chairman Tran Van Dong, in July last year, the Indian director of the company whose name has not yet been disclosed suddenly announced that the company’s operation halt from the 9th of the month.

Since then, the workers have not yet been paid their salaries and unemployment insurance.

The company facilities are now covered with wild grass.

The workers submitted a petition to the local court calling for the company’s bankruptcy and sue the firm director who has fled.

Vice chairman of Binh Dinh Province People’s Committee, Tran Chau, said that local authorities have found out the place where the Indian director is living. The court will send a document to him to request his participation in the legal process. If he is absent, the trial will still be organised.

Provincial authorities will try to ensure the workers’ social insurance and help them find new jobs.

Indian company brings truck range to VN

Indian automobile giant Tata Motors launched its Tata Ultra 814 range of ultra business utility vehicles in HCM City on Thursday.

The company said it is targeted at meeting the changing customer needs in the light commercial vehicle segment, and claimed it offers "SUV-like comfort with truck-like performance and the profitability of a light commercial vehicle."

Girish Wagh, president of the company's commercial vehicles, division, said: “Tata Motors is committed to shaping the industry here in Viet Nam, with the latest global technologies, giving the Vietnamese customer competitive business advantages with the trusted credentials of the Tata Motors brand.”

Tata said the range comes with heavy-duty aggregates and multiple load-body configurations, and could handle payloads ranging from four to 11 tonnes.

It claimed it offers offers the lowest overall cost of ownership.

The trucks come with a three-year or 200,000km warranty.

They will soon be marketed with the price starting at around VND500 million (US$22,000).

The $45 billion Tata Motors Limited manufactures cars, utility vehicles, buses, trucks, and defence vehicles. It has operations in the UK, South Korea, Thailand, South Africa, and Indonesia through 109 subsidiary and associate companies including Jaguar Land Rover in the UK and Tata Daewoo in South Korea.

Covered warrants expected to attract many investors

Covered warrants, which will be traded on the Ho Chi Minh Stock Exchange from this month, are expected to attract a large number of investors since they have lower investment costs and can be leveraged more than conventional financial products, a seminar heard in HCM City on Thursday.

Covered warrants are similar to derivatives. Investors have the right to resell the warrants on the market or hold them until maturity date, and they are always associated with underlying stocks.

Speaking at the seminar on Covered Warrants – Anticipating New Opportunity, Nguyen Duc Thong, securities derivative transaction director at SSI Securities Corporation, said covered warrants are a popular security on many developed markets.

Markets that have developed covered warrants such as Taiwan, Thailand, Hong Kong, and South Korea and Viet Nam's securities market have many similarities, including having high rate of individual investors, short-term trading accounting for a majority and large demand for using leverage.

Bringing such premium-structured products to Viet Nam was a correct and necessary step, he said.

Covered warrants would help diversify asset classes and help hedge risks in the context of market volatility, he said.

To issue them, securities companies must meet certain financial norms and obtain a permit from the State Securities Commission of Viet Nam, delegates said, adding that fewer than 12 securities companies are qualified to issue them.

SSI, the largest brokerage in the country, would issue six CW codes based on four underlying shares of FPT Corporation (FPT), Mobile World Investment Corporation (MWG), Military Commercial Joint Stock Bank (MBB), and Hoa phat Group Joint Stock Company (HPG), Thong said.

The company had instructed its brokers to provide investors with proper consultation before they trade the new product, he added.

Saigon Water to sell 37 million shares to raise charter capital

Saigon Water Infrastructure Corporation (SII) has approved a plan to issue 37.42 million shares to existing shareholders to increase its charter capital.

The offering price is expected to be VND16,900 (US$0.73) per share, higher than the current market price that stood at VND15,000 on Friday. The shares are scheduled to be issued in 2019. SII is expected to collect more than VND632 billion (more than $27 million) from the issuance.

The rate of issuance will be 58 per cent, which means with every holding of 100 shares, an investor can buy 58 new shares.

After the issues, SII's charter capital is expected to increase from the current VND645 billion to more than VND1 trillion.

All proceeds from the offering will be used for merger and acquisition (M&A) activities. Specifically, SII will spend VND308.7 billion from the proceeds to buy 30.87 million shares in Cu Chi Water Supply and Sewerage JSC. It will also spend VND286.4 billion on interest payments for bank loans.

OCB is first bank in VN to use IBM Integrated Analytics System

The Orient Commercial Joint-Stock Bank (OCB) on Thursday in HCM City said that their investments in technology had grown strongly since 2016.

Du Xuan Vu, IT Director of OCB, said the growth rate was 40 per cent per year, even higher than the bank's growth.

Pouring money into technology is the most effective way to attract individual customers, especially in the digital era, he said.

The bank's aim is to provide better services to customers.

OCB has announced many partnerships in technology development since the beginning of this year.

Bank officials noted on Thursday that it has successfully deployed the IBM Integrated Analytics System (IIAS), the first bank in Viet Nam to do so.

The deployment marks the close co-operation between OCB and IBM in setting up a modern technology system that is safe and convenient for customers.

IIAS is is a unified hybrid data-management analytics solution providing massive parallel processing.

It comprises a high-performance hardware platform and optimised database query engine software that work together to support various data analysis and business-reporting capabilities.

It also permits OCB to send databases between different clouds, including public, private and hybrid clouds.

Eleven weeks after deploying the IIAS solution, the bank has been able to cut operation costs and reduce the time to report to only 30 minutes from the previous 180 minutes.

"OCB will continue to invest and develop digital products. We will keep studying and deploying new application,” Vu said, adding that the investment in technology will help OCB reach its goal of becoming the best commercial bank in Viet Nam and the region.

Established in 1996, OCB is the first bank in Viet Nam to successfully reach international standards such as Basel II and OCB OMNI, a digital banking platform, for individuals and companies.

Conference highlights opportunities for Viet Nam, Argentina

Trade and investment opportunities in Viet Nam were highlighted at a workshop co-organised by the Vietnamese Embassy in Argentina and the Argentine Chamber of Commerce for Asia on Thursday.

During the event, Vietnamese Ambassador Dang Xuan Dung said after more than 30 years of reform, Viet Nam had made remarkable development achievements, with national gross domestic product (GDP) in 2018 growing 7.08 per cent, the highest rate in the past decade.

Last year, the country’s trade turnover also saw a positive increase of 12 per cent to US$482 billion while its inflation rate was controlled at 3.54 per cent, Dung said.

In his speech, the diplomat also praised bilateral trade with Argentina which hit nearly $3 billion in 2018. However, he said, the result still lagged behind the potential of the two countries.

He encouraged the two business communities to increase connectivity by exchanging delegations and participating in commercial events and trade fairs in each country. That would help them better understand business opportunities and find new partners.

At the event, representatives of the Argentine Chamber of Commerce for Asia and Argentine businesses shared their experience of trade activities with Vietnamese partners.

Argentina is now Viet Nam’s second biggest importer on the American continent while the Southeast Asian nation is Argentina’s fifth largest trading partner on a global scale.

The two nations are making efforts to lift bilateral trade turnover to $3.5 billion by 2020.

In order to reach the goal, analysts suggested both countries step up administrative reforms, remove trade barriers and facilitate businesses’ access to market information.

Enterprises themselves should stay proactive in grasping business opportunities, defining potential fields for broader co-operation, and seeking support from the two Governments to deal with challenges, they said.

State auditors need power to fight violations

The State audit must be given more power to improve the management of State assets, National Assembly deputies said on Friday.

According to NA deputy Do Ngoc Thinh, only administrative wrongdoings regulated in the Law on handling administrative violations released in 2012 can be handled.

However, the law does not include violations and solutions for those violations in the State audit activities as well as the authorisation of the State Audit of Vietnam (SAV).

 

The missing piece of regulation clearly narrowed the power that the State audit agency should have when dealing with violations in the management of State assets, he said.

The State audit agency should be allowed to penalise violations revealed by audit activities within its power, Thinh added.

However, there should be additional items regarding the State audit’s authorisation in the Law on handling administrative violations, he said.

Many cases involving economic violations and corruption had been revealed but the process of handling those cases was slow, deputy Nguyen Quang Dung said.

Dealing with those cases had mostly involved the Ministry of Finance (MoF) and the State Bank of Vietnam (SBV), he said.

But in fact, those cases were quite complicated, so an independent unit should get involved and assist them in handling the cases, Dung added.

The State audit, as an independent unit beside the SBV and MoF, should be empowered to assess the violations revealed in those cases, he said.

According to SAV auditor general Ho Duc Phoc, the SAV staff are fully capable of handling the assessment of violations.

“If the SAV is allowed to conduct its own assessment, the agency will send officials for training before taking part in handling violations,” he said.

Regarding administrative violations that NA deputies raised at the discussion, the State audit was only eligible to penalise individuals and organisations that do not provide necessary documents for auditors and prevent auditors from doing their job, he said.

NA deputies on Friday also agreed the Law of Audit must be changed to make SAV more jurisdictional.

Deputy Dang Thi Mi Huong said that if the reports and results finalised by the State audit were executed strictly, the fight against corruption would improve.

When the SAV published audit reports, the agency must provide additional penalties to make individuals and organisations accept its decisions, she said.

Huong’s ideas basically comply with existing regulations saying that the State audit agencies’ decisions are mandatory to the targeted subjects.

There are some obstacles in the relationship between the State audit and the audited that the Law of Audit must resolve, according to deputy Le Thanh Van.

Firstly, tax payers are unable to appeal auditors’ decisions, bringing the cases to the supervisors and resolving them completely.

Secondly, the decision of the State audit may contradict the decision of the court about the result of a case. While the SAV is not authorised to issue legal and administrative documents, it has remained difficult for the State audit to handle appeals of audit reports.

Van suggested any individuals or organisations who want to appeal the State audit’s decisions, must appeal to the audit agency first, then the general auditor of SAV and the Audit Council, and finally the court.

SAV provides valuable oversight on public resources

The State Audit of Vietnam (SAV) had revealed financial issues at SOEs worth VND414 trillion (US$17.6 billion) since its establishment in 1997, according to Dao Xuan Tien, deputy auditor general of the SAV.

It had also asked the Government to amend 1,200 legal documents in order to plug policy loopholes during that time.

Tien made the statement at a workshop entitled “The Role of the State Audit in the Country’s Development” held in Ha Noi on Thursday.

According to Bui Dang Dung, deputy head of the National Assembly’s Committee on Finance and Budgetary Affairs, the SAV played an important role in supervising the management and use of State assets as well as detecting violations in public projects.

Data provided by the SAV was a reliable source of evidence for the National Assembly to undertake the task of supervising ministries and agencies.

Dung cited the auditing of Build-Operate-Transfer (BOT) projects as example. SAV inspections of 61 BOT projects had reduced the time it would take for those projects to be transferred to the Government by 222 years, he said.

Challenges

While the SAV had made certain achievements in helping the Government effectively manage national resources, preventing corruption and contributing to the transparency of the financial sector, Tien said there were still shortcomings in the organisation and operation that needed to be dealt with.

The scale of auditing had been expanded, but it had still not kept up with the requirements, he said, adding that a legal framework for auditing activities had yet to be completed.

Synchronising the expansion while improving the quality of auditing and staff remained a big challenge, he said.

Dung asked the SAV to complete the legal framework focusing on the settlement of overlaps between the inspectorate and auditing agencies and the application of information technology.

“All agencies that use the State budget and financial resources should be audited,” he said.

Regarding the management of financial resource at public universities, Huynh Thanh Dat, president of the Vietnam National University (HCM City), said supervision was a must to prevent resources from being wrongfully exploited.

Participants at the workshop exchanged views to find solutions to build the legal framework and restructure personnel to enhance the role of the SAV in the management and use of public finance and assets.

Hà Nội’s farmers grow high-quality rice for export

Farmers in suburban districts of Hà Nội have switched from growing rice varieties with low productivity to high-quality rice to meet both local and export demand.

An 800ha area owned by 16 co-operatives has received investment in the districts of Ứng Hòa, Sóc Sơn, Chương Mỹ, Ba Vì, Phú Xuyên, Mỹ Đức, Thanh Oai and Thường Tín since the start of the spring season this year.

Farmers of Đồng Phú Commune in Chương Mỹ District used to grow traditional, low-yield varieties of rice. Since the farmers switched to organic rice farming techniques in 2012 with the support of the Japan International Co-operation Agency, farmers have reaped more profits.

“Chemical fertiliser–free rice (variety BT7) has a productivity of more than 4,200kg per ha and brings profits which are 2.5 times higher,” said Lê Thị Hồng Lan, secretary of the Party Committee of Đồng Phú Commune.

Đồng Phú Commune is now well known across the northern region for its organic rice brand.

Many other areas in Hà Nội have succeeded in growing high-quality rice varieties and creating recognisable brands such as Bối Khê rice, Bồ Nâu rice, Đông Anh glutinous rice and Sóc Sơn glutinous rice.

Hoàng Thị Hòa, director of Hà Nội’s agricultural development centre, said rice varieties such as Kim Cương 111, Lam Sơn 116, Hương Cốm, Thuần Việt and ĐB18 can yield more than 6,000kg per ha.

Profit from these varieties is estimated to be VNĐ9 million (US$383) more per ha compared to traditional rice varieties.

Aiming to produce rice not only for domestic consumption but also for export, farmers in Mỹ Đức and Ứng Hòa districts are growing Japonica rice in a manner that meets Việt Nam Good Agricultural Practices (VietGAP) standards.

One hectare of land can produce 6,000kg of Japonica rice. This variety is known for its round, thick and hard grains. Thanks to its resistance to pesticides and high quality, it is bought by traders at high prices.

According to Nguyễn Chí Viễn, vice chairman of Ứng Hòa District’s People’s Committee, the district now has more than 2,000ha of land planted with Japonica rice, and local authorities will continue to work to attract businesses to join the production chain.

According to Professor Đỗ Năng Vịnh, president of the scientific council of Agricultural Genetics Institute, Japonica has great potential on domestic and global markets. Each tonne of Japonica is sold for between $800 to 1,500, almost twice the price of Vietnamese varieties.

Director of the city’s Department of Agriculture and Rural Development Chu Phú Mỹ told Hà Nội Mới (New Hà Nội) newspaper that the city aimed to change the planting practices of farmers so their crops are most suitable for export.

It aimed to have 20,000ha planted with Japonica rice (20 per cent of the city’s total rice area) by 2020 and 30,000 ha by 2025. About 50 to 60 Japonica rice planting areas would be formed to produce high-quality rice meeting export standards, he said.

The city's Japonica cultivation project is worth more than VNĐ368 billion during the 2019-20 period. It offers farmers drying, processing and preservation technologies to increase the value of their products.

Moc Chau strives to export up to 500 tonnes of mango to China

Moc Chau district in the northwestern mountainous province of Son La is striving to export 400 – 500 tonnes of mango to China, after its specialty fruit was licenced to enter the market this year.

Moc Chau’s total mango plantation spans 940 hectares, ranking third among fruit plantations of the district. The district produces an annual average of nearly 2,600 tonnes.

According to Tran Xuan Thanh, head of the district’s agriculture and rural development office, authorities last year supported the Thanh Dat fruit cooperative in Chieng Hac commune in obtaining its area code for mango export.

Vietnamese mangoes have been exported to 40 countries and territories worldwide.

Vina Japan logistics centre opens in Ba Ria – Vung Tau

The Vina Japan Shirogane Logistics Centre was inaugurated at Phu My 3 Industrial Park, the central province of Ba Ria – Vung Tau, on June 7.

Speaking at the event, Vice Chairman of the provincial People’s Committee Nguyen Thanh Long said the project is expected to contribute to developing local logistics services, seaport-based economy, trade and investment, as well as facilitating the flow of goods between countries in the region and the world.

The centre will also meet demand for cargo distribution, transportation and storage at Phu My 3 Industrial Park, as well as elsewhere in the province and adjacent localities.

General Director of Shirogane Transport Ltd Kaihoto Tetsuya said the project is a joint effort between the company and Thanh Binh Phu My JSC with a respective stake of 51 percent and 49 percent.

Construction on the centre began in July 2018 at a total cost of 5.4 million USD

Covering an area of 2.25ha, it will offer integrated logistics services, including transportation, warehouse, customs clearance and others once operational.

Vietnam joins economic discussions at St. Petersburg forum

Politburo member and head of the Party Central Committee’s Economic Commission Nguyen Van Binh joined other countries’ senior officials in discussing major international economic issues at a forum opened in St. Petersburg city, Russia, on June 6.

At the opening session of the 23rd St. Petersburg International Economic Forum (SPIEF), the Vietnamese official delivered a speech on sustainable development and international trade.

He also took part in a high-level dialogue which gathered United Nations Secretary General Antonio Guterres, Chairman of the Board of the Eurasian Economic Commission Tigran Sargsyan, Moldovan President Igor Dodon, First Deputy Prime Minister of Russia Anton Siluanov and Deputy Prime Minister of Mongolia Ulziisaikhan Enkhtuvshin.

Replying to a question about the results of Vietnam’s poverty reduction and realisation of the Sustainable Development Goals, Binh emphasised that poverty elimination is a top priority of the Vietnamese Party and State during the implementation of the UN Agenda for Sustainable Development and the Sustainable Development Goals.

After 30 years of reforms, the country has made great strides in socio-economic development, bringing the household poverty rate down to 5 percent, compared to over 60 percent in the late 1980s, and becoming a middle-income country in 2008, he noted.

Talking about the US-China trade friction, Binh analysed impacts of trade tensions among countries and the protectionism trend on the Vietnamese economy in short and long terms.

He also called on the whole global community to coordinate in solving such tensions so as to sustain trade liberalisation, integration and globalisation in the future.

Apart from the opening session, the Vietnamese delegation participated in a session themed “Strategy for the Future of the Eurasian Economic Union”.

On the SPIEF’s sidelines, the delegation had meetings with Adviser to the Russian President and head of the forum’s organising board Anton Kobyakov, along with executives of Russia’s Zarubezhneft and Gazprom groups.

The SPIEF, first held in 1997, has become a leading regional and international forum for discussing trends, challenges and prospects of the world’s economic development. It is also a platform for global enterprises to meet and seek investment and business chances.

Themed “Creating a Sustainable Development Agenda”, the 23rd forum from June 6 to 8 features more than 170 activities, drawing over 17,000 delegates from around the world.

Binh Duong earns 10.4 billion USD exports in 5 months

Exports of the southern province of Binh Duong hit nearly 10.4 billion USD in the first five months of 2019, a year-on-year rise of 12.2 percent, said Director of the provincial Department of Industry and Trade Nguyen Van Danh.

The province’s staples recorded positive export growth in the period. Notably, wooden products, garment-textile, footwear and pottery to the US, European nations, and the Republic of Korea jumped between 20 and 30 percent in the period.

Danh noted that the province’s export growth was attributable to synchronous efforts in production, investment and trade promotion at international level.

Some trade agreements that recently took effect have created more opportunities for local firms to bolster their export activities, he added.

Local authorities and relevant agencies were asked to draw more investment projects into the province’s accessories industries so to ensure stable production and export activity in the coming time.

Government bond futures contracts to be launched

Government bond futures contract, a new product in the derivatives market, will be traded on the Hanoi Stock Exchange on July 4, the State Securities Commission (SSC) has said.

Preparations for the launch of five-year Government bond futures contract have been completed, SSC said.

Building a derivatives market aims to improve Vietnam's ability to monitor and manage market risks.

According to the SSC, at the time of the launch of the derivative market in August 2017, the Ministry of Finance submitted a plan to Prime Minister Nguyen Xuan Phuc to launch both products, VN30-Index futures and five-year Government bond futures.

The VN30-Index futures were launched first, traded from August 10, 2017.

The five-year Government bonds were expected to be launched within two years.

Therefore, the legal framework and technological system for the trading Government bond futures contracts has been ready since the launch of the derivatives market.

The SSC has also disseminated information about the new securities product to investors so they are ready for the launch.

Vietnamese products introduced to Japanese customers

A Vietnam fair was launched on June 7 at 46 supermarkets and malls of AEON group in Kanto region, including AEON Lake Town Mori in Saitama prefecture – one of three largest AEON malls.

At the fair, AEON introduced Vietnam’s high-quality agricultural products and goods, including fruits, basa fish, shrimp and ingredients for pho and bun cooking, coffee, shirts and suitcases, that have drawn attention from customers to AEON supermarkets.

The Vietnam fair is held to bring more Vietnamese products to Japanese customers Hiroshi Yamasaki, AEON communications staff, told Vietnam News Agency reporters.

Yoshiaki Doi, Director of AEONStyle Lake Town, said Japanese customers have good assessments of the Vietnamese products.

This is the third year Vietnam’s dragon fruits have been introduced at the fair and received warm response from customers, said Yoshiaki Doi.

Within the fair’s framework, events will be held to connect Vietnamese firms and AEON importers and update Vietnamese businesses on regulations and standards for imported goods to the AEON distribution system.

The Vietnam fair will last until June 9.

Vietnam a rising destination for Italian companies in Industry 4.0

Italian businesses are flocking to Vietnam to find opportunities as it is embracing Industry 4.0 to become a technology hub in Southeast Asia and break with its image of a low-cost, export-orientated manufacturing destination.

Carlo Ferro, president of the Italian Trade Agency (ITA), said at the Italian Technologies for Vietnam's Smart & Circular Economy workshop hosted by ITA in co-operation with the Embassy of Italy in Hanoi on June 5: “At the moment, Vietnam is also aiming to lower manufacturing costs by using more high technology and digitalisation in the context of Industry 4.0. Italy has 800 technology research institutes, all capable of supporting Vietnam to reach this goal.”

He added that innovation has always been part of the Italian mindset, helping firms get by or even lead the way in times of uncertainty. Indeed, thanks to an open approach to challenges, knowledge, and the sharing of best practices, many Italian firms have become champions of innovation, giving them an important edge in the market.

The workshop aims to promote and develop new opportunities of trade, investment, and technological collaboration between Italy and Vietnam as a partnership towards innovation and sustainability. Italy has great strengths in these areas, which aligns with the Vietnamese government’s current focus on high technology and environmentally friendly investment projects such as renewable energy, smart infrastructure, and machinery.

When asked about potential collaboration between Italy and Vietnam, Italian Prime Minister Giuseppe Conte emphasised: “We admire Vietnam’s GDP, and I have agreed with Prime Minister Nguyen Xuan Phuc that we can improve our bilateral trade to reach $10 billion. Vietnam has a double advantage: it can be both a consumption market for, and a manufacturing partner of Italian companies in the era of Industry 4.0.”

Technological Training Center for technology transfer, consultancy, and the training of trainers in the footwear industry. Italy is now well-positioned to enhance business ties with Vietnam, particularly in technology innovation as the latter is gearing towards a smart industry and circular economy which is presented as a system of resource utilisation where reduction, reuse, and recycling prevail.

Diep Thanh Kiet, vice chairman of the Vietnam Leather, Footwear and Handbags Association, said that Italy-Vietnam Footwear Technological Training Center is equipped with modern machinery and equipment – the latest technology imported directly from Italy and other European countries that bring small- and medium-sized enterprises in the leather-footwear industry the opportunity to approach, research, and develop new products.

“The project aims to improve the capacity and contribute to the development of Vietnam’s industry,” said Kiet.

Meanwhile, Dao Phan Long, chairman of the Vietnam Association of Mechanical Industry, told VIR that the words “Made in Italy” will have a new meaning as the country’s Industria 4.0 initiative gains traction and attention for bringing advanced technologies and educational resources to manufacturing.

"There is huge potential between the two countries, especially in mechanical engineering, infrastructure, and 4.0 Industry," said Long.

“The Vietnamese business community is very keen and is leading the way to achieving sustainable development goals. Currently, Vietnam is being selective in attracting foreign direct investment, directing foreign-invested projects to the fields of advanced technology, especially eco-friendly technology. Each year, Vietnam would need $25 billion in infrastructure development alone, but cannot use ODA investment like before. This means the public-private-partnership model is now a highly-viable option,” said Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry (VCCI).

2nd edition of Vietnam Wind Power to kick off on June 11

Following the successful first edition in June 2018, the Global Wind Energy Council will hold the second Vietnam Wind Power Conference in Hanoi on June 11-12, 2019, in partnership with GIZ and the Danish and Irish embassies.

The event combines two main contents. The first one is the workshop on accelerating wind project financing in Vietnam to be held on June 11. This one-day workshop is targeted at international and local finance institutions, development banks, and government officials, and will address the burning issues facing the financing of wind projects.

Besides, there will be an offshore roundtable, which will take place on the afternoon of June 11, discussing the recent take off of the offshore sector with a cratering in prices and the growing availability of offshore technologies.

The Vietnam Wind Power Conference on June 12 will feature a range of plenary and parallel sessions including regulatory, market, policy, technology updates, offshore, as well as other pressing issues related to the development of a sustainable wind and renewables industry.

Previously, on June 7, 2018, the Global Wind Energy Council held its first-ever Vietnam Wind Power conference in Hanoi, in partnership with the Ministry of Industry and Trade (MoIT), GIZ, and the Embassy of Denmark. The conference attracted the participation of 200 delegates.

The programme included presentations and debates on the latest policy developments, financing mechanisms, methods to grow the supply chain (both on- and offshore), as well as grid challenges, and included both domestic and international experiences.

There were ample opportunities for networking, including a themed post-conference reception where officials from the Mekong Delta and other provinces outlined their plans for wind development in these areas.

Vietnam’s new feed-in tariff announced in September 2018 has renewed momentum for the country’s wind market and attracted a rush of projects. There is already 228MW of installed wind capacity in the country, and the Vietnamese government has set the target of 800MW wind power capacity by 2020, 2,000MW by 2025, and at 6,000MW by 2030.

 
 
 
 
 
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