BUSINESS NEWS 26/6

Deputy PM urged ministries and localities to fight against IUU fishing

BUSINESS NEWS 26/6



Deputy Prime Minister Trinh Dinh Dung wants answers to stop illegal fishing in Viet Nam’s waters.

Dung has called on ministries and sectors to give practical solutions to the management and investment of material and human resources to stop illegal, unreported and unregulated (IUU) fishing.

It is hoped that by acting quickly, the European Commission’s yellow card warning hanging over the industry will be removed.

Speaking at the first meeting the National Steering Committee on IUU in Ha Noi on Friday, Dung said if exploitation problems could not be resolved, Viet Nam would be identified as a non-cooperative country and may be subject to 'red card' measure.

“That means all Vietnamese seafood products will be banned from export to the EU,” Dung warned.

He asked the committee to focus on evaluating results so far and point out shortcomings countrywide.

Dung wanted all relevant sectors to seriously assess and use their experience to better manage the industry.

“We need to focus on discussing and defining each specific task associated with the responsibilities of each ministry, committee, branch and People's Committee of 28 provinces and major cities,” Dung said.

He said the sector had made great progress in the past, becoming one of the key economic sectors of Viet Nam.

“In addition to the achieved results, there are still many shortcomings and weaknesses, which are slow to overcome and fail to meet the integration trend,” he added.

This is reflected by the decision in 2017 to issue Viet Nam with a warning from the EC for failing to comply with regulations on combating IUU fishing.

After the warning, all of seafood shipments originating from Viet Nam to European markets were scrutinised.

If the level reached red card status, Viet Nam will be banned from selling to the EU, a major market for seafood exports.

According to Nguyen Xuan Cuong, Minister of Agriculture and Rural Development (MARD), the sector had made efforts to implement the EC's recommendations, especially handling violations in foreign waters in the Pacific island countries. Meanwhile, localities have also implemented digital regulations on declaration, recording and administration of fishing activities.

However, he said these activities had not yet seen a breakthrough. “We have to restructure moving to sustainable fisheries. This is a long-term operation, including synchronous tasks and solutions, not just to hasten only the EC’s "yellow card”.

MARD’s Director General of the Directorate of Fisheries, Nguyen Ngoc Oai said his ministry and the Ministry of National Defence had signed regulations to enhance law enforcement at sea.

He said: “It will strengthen the presence of law enforcement forces such as fisheries, navy and coast guard in adjacent coastal areas and dispute areas between Viet Nam and other countries in the region to solve fishing vessels violation and timely support ships which were illegally arrested and handled by foreign ships.”

From last year, there were no violations by fishing vessels or fishermen in the waters of Pacific island countries.

Currently, Viet Nam has implemented a system to monitor and control 31,500 vessels with a length of 15 metres or more, with a satellite surveillance system.

According to Oai, since the yellow card warning, the system found 110 fishing vessels in foreign waters. These violations had been sent to localities and fines issued.

HCM City eyes boost to collective sector

Local co-operatives need to mobilise capital from their members or co-operate with enterprise members to improve their production and trading, the HCM City Cooperative Alliance has said.

Speaking at a seminar on developing the collective economic model in agricultural in HCM City yesterday, Bui Tran Huy Vinh of the HCM City Cooperative Alliance, said: “The Capital Aid Fund for Cooperative Members of HCM City (CCM Fund) provided loans worth VND1.52 trillion (US$65.4 million) to 60,849 applicants last year and VND332.3 billion ($14.2 million) to 11,510 applicants in the first half of this year.

“The money has helped co-operatives and their members, thereby contributing to economic development and building rural areas and reducing usury.”

"But many co-operatives are unable to borrow from banks or the CCM Fund since they lack assets to mortgage or feasible business plans," he said.

Nguyen Van Luong of the HCM City Farmers Association said in addition to the difficulty in getting loans on easy terms, co-operatives and co-operative groups also faced other difficulties such as low productivity, lack of steady outlets for their products and lack of qualified human resources.

Vinh said co-operatives needed to be more active in raising capital from members.

“Co-operatives themselves need to make the effort and should not depend on the Government‘s support.”

A representative of the city Department of Agriculture and Rural Development said agro-forestry and fisheries production was worth VND21.4 trillion last year, a year-on-year increase of 6.2 per cent.

To enable the collective agricultural sector to develop more efficiently, the department had proposed many measures, including providing loans for hi-tech agriculture, organising trade promotion activities to boost consumption of co-operatives’ products and organising programmes to enhance transfer of farming and animal breeding technologies and models that can adapt to climate change and saltwater intrusion, he said.

The city sought to achieve rural per capita income of VND100 million by 2025 and ensure 20 per cent of the population joins co-operatives compared to 11.9 per cent now, he said.

"The collective economic sector, especially co-operatives, plays an important role in achieving the targets," he said.

Nguyen Thi Bach Mai, chairwoman of the HCM City Farmers Association, said the association had drafted a plan on “One District, One Cooperative model on hi-tech agricultural material supply, and hi-tech agricultural production and consumption in 2019-23” to enable restructure of the agricultural sector.

The city has 85 co-operatives and one union of co-operative in the agricultural sector, with most of them growing vegetables, orchids or mushroom or raising dairy cattle, pigs, crocodiles, shrimp, or fish.

Co-operatives have gradually established their brands and their product quality has steadily improved, enough to be sold by large supermarket chains such as Co.opmart, Big C, Aeon, and VinMart.

At the seminar, the association signed agreements with retailers, including Saigon Co.op and VinMart, to sell products.

HCM City eyes boost to collective sector

Local co-operatives need to mobilise capital from their members or co-operate with enterprise members to improve their production and trading, the HCM City Cooperative Alliance has said.

Speaking at a seminar on developing the collective economic model in agricultural in HCM City yesterday, Bui Tran Huy Vinh of the HCM City Cooperative Alliance, said: “The Capital Aid Fund for Cooperative Members of HCM City (CCM Fund) provided loans worth VND1.52 trillion (US$65.4 million) to 60,849 applicants last year and VND332.3 billion ($14.2 million) to 11,510 applicants in the first half of this year.

“The money has helped co-operatives and their members, thereby contributing to economic development and building rural areas and reducing usury.”

"But many co-operatives are unable to borrow from banks or the CCM Fund since they lack assets to mortgage or feasible business plans," he said.

Nguyen Van Luong of the HCM City Farmers Association said in addition to the difficulty in getting loans on easy terms, co-operatives and co-operative groups also faced other difficulties such as low productivity, lack of steady outlets for their products and lack of qualified human resources.

Vinh said co-operatives needed to be more active in raising capital from members.

“Co-operatives themselves need to make the effort and should not depend on the Government‘s support.”

A representative of the city Department of Agriculture and Rural Development said agro-forestry and fisheries production was worth VND21.4 trillion last year, a year-on-year increase of 6.2 per cent.

To enable the collective agricultural sector to develop more efficiently, the department had proposed many measures, including providing loans for hi-tech agriculture, organising trade promotion activities to boost consumption of co-operatives’ products and organising programmes to enhance transfer of farming and animal breeding technologies and models that can adapt to climate change and saltwater intrusion, he said.

The city sought to achieve rural per capita income of VND100 million by 2025 and ensure 20 per cent of the population joins co-operatives compared to 11.9 per cent now, he said.

"The collective economic sector, especially co-operatives, plays an important role in achieving the targets," he said.

Nguyen Thi Bach Mai, chairwoman of the HCM City Farmers Association, said the association had drafted a plan on “One District, One Cooperative model on hi-tech agricultural material supply, and hi-tech agricultural production and consumption in 2019-23” to enable restructure of the agricultural sector.

The city has 85 co-operatives and one union of co-operative in the agricultural sector, with most of them growing vegetables, orchids or mushroom or raising dairy cattle, pigs, crocodiles, shrimp, or fish.

Co-operatives have gradually established their brands and their product quality has steadily improved, enough to be sold by large supermarket chains such as Co.opmart, Big C, Aeon, and VinMart.

At the seminar, the association signed agreements with retailers, including Saigon Co.op and VinMart, to sell products.

VN exports should target West Asia: conference

West Asia offers Vietnamese businesses a huge export opportunity, experts told a conference in HCM City yesterday.

Pham Hoai Linh of the Asia and Africa Market Agency said the region is rich in oil and gas and affluent and has enormous demand for foodstuff and agriculture products due to its unfavourable climate.

It imports around US$40 billion worth of food, or 80 per cent of its needs, annually, according to Linh.

Its imports and exports match Viet Nam's strengths and need.

Ten out of 15 countries in the region are members of the World Trade Organisation, and six are part of the Gulf Cooperation Council and have 0-5 per cent import taxes.

Viet Nam’s trade with the region last year was worth nearly US$14 billion, with cashew and seafood being among Viet Nam’s biggest exports, and the country also has good political relations with West Asian countries.

But the region is beset by conflicts while geographical distance, lack of information about each other, cultural differences, technical barriers, protectionist policies also pose challenges.

Many importers do not make use of letters of credit, making trade sometimes risky.

Linh urged Vietnamese businesses to take part in trade facilitation events and exhibitions, conduct thorough market research and stay in touch with Vietnamese embassies.

Nguyen Thi Ngoc Hang of the Halal Certification Agency said getting halal certification was important for exporting, and businesses should not contain haram, or forbidden, materials such as pork and alcohol.

Businesses also must separate the production and storage of halal and non-halal products, and the contents on the packaging should be in Arabic and not have haram elements, she said.

West Asia had a combined GDP of nearly US$3.5 trillion in 2018.

Formosa addresses environment disaster violations

Formosa Company has addressed all the violations as committed with the Vietnamese government after the environmental disasters that caused mass fish deaths the along the country’s central coast.

Party Secretary of Ha Tinh Province Le Dinh Son announced on June 19 that the steel plant of Taiwan’s Formosa Plastics Group in Ha Tinh Province had addressed all the violations and would change the technology transformation process from coke wet quenching to coke dry quenching.

Nippon Steel and Sumikin Engineering Co. from Japan would provide the new equipment to Formosa Ha Tinh.

After the disaster, Formosa Ha Tinh quickly started compensating fishing communities and fixing violations as orders by the Vietnamese government. The technology transformation process was carried out in three years with the approval of the government.

The coke dry quenching system was built in April 2017 and completed in March.

Formosa Ha Tinh admitted that untreated water that was dumped directly into the sea from its steel plant in Ha Tinh was the main cause of the deaths of hundreds of tonnes of fish in waters off four central provinces in 2016. The environmental disaster affected some 100,000 fishermen and locals in the fishing, seafood and tourism industries, according to a government report.

Formosa paid USD500m in compensation to people that had their livelihoods affected by the disaster.

Vietnam Electricity Group sees after-tax rise

Vietnam Electricity Group (EVN) recorded VND6.817 trillion (USD293.13 million) in post-tax profits last year, a slight rise of 3.4% on-year.

According to EVN’s 2018 financial report, EVN earned VND338.5 trillion (USD14.55 billion) in net revenues during the year, up nearly 15% on-year.

In the year, the group made pre-tax profits of VND9.076 trillion (USD390.26 million), posting an annual rise of 11.4%.

By late December last year, the group’s total assets were estimated at VND706.5 trillion, an increase of VND4.92 trillion (USD211.732) against the beginning of the year.

This year, EVN plans to spend VND1.23 trillion to pay salary for 4,855 staff, equal to VND21.2 million a person per month on average.

Vingroup builds theme park, resort in Tuyen Quang

A groundbreaking ceremony was held in Yen Son district of the northern province of Tuyen Quang on June 22 for a theme park and resort project of the Vingroup private conglomerate.

Covering nearly 30 ha in the My Lam mineral spring tourism site, the luxurious resort project is hoped to be a tourist attraction of the province.

The resort will include a theme park, a health care centre, a golf course and various types of villas.

The construction is expected to complete in 2021 and the facilities will be put into operation the same year.

Speaking at the ceremony, Vice Chairman of the provincial People’s Committee Tran Ngoc Thuc pledged that Tuyen Quang will join hands with the firm to ensure the efficiency of the project, thereby helping with the province’s development.

He also asked relevant branches and local authorities to closely work with the investor for completion of the project.

Asian rice market: demand remains low in Vietnam, Thailand, India

Export prices for Indian and Thai rice increased this week on the back of an appreciation in their domestic currencies, while that of Vietnam went down over quiet demand.

According to Reuters, prices for India’s 5 percent broken parboiled variety were quoted around 367-370 USD per tonne, up from last week’s 365-367 USD.

Export demand is weak and unlikely to bounce back in the next few weeks unless prices correct, said one exporter based at Kakinada in India’s southern state of Andhra Pradesh.

Meanwhile, in Thailand, the world’s second largest rice exporter, the prices widened to 390-407 USD a tonne, from 393-404 USD a tonne last week. Traders say the price increase can be attributed to a seasonal decline in rice supply.

Thailand’s baht, which reached its highest in nearly six years against the US dollar on June 20, also boosted prices for the staple.

Demand was uninspiring in Vietnam, where rates for the 5 percent broken rice variety fell to 340-345 USD a tonne on June 20 from 345-350 last week.

Trading activities are quiet this week over low demand, though supplies from the ongoing summer-autumn harvest are abundant, a trader based in Ho Chi Minh City said.

Trade fraud risks in wood industry warned

The impact of the US-China trade war on Vietnam’s wood industry, including trade fraud risks, was highlighted at a workshop in Hanoi on June 21.

Participants noted that China is the biggest supplier of wood products for the US, with an export revenue of over 30 billion USD in 2018. However, the trade tension between these two economies is an important cause of the shift of production and business activities from China to other countries to avoid the US’s new tariffs imposed on goods originating from China shipped to this country.

Tran Thi Thu Huong, Director of the centre for commercial document certification of the Vietnam Chamber of Commerce and Industry (VCCI), said foreign businesses’ investment in Vietnam is a chance for local firms to improve the competitiveness of their exports to the US.

However, there will be problems if Vietnamese firms do not have a good grasp of regulations or meet rules of origin, she noted, adding that when the US discovers any businesses that have products with fake origin, not only those products will be banned from entering this market but other companies may also be affected.

She said the VCCI is working closely with the agencies that grant certificates of origin (C/O) nationwide so as to enhance examination.

To prevent trade fraud, it is necessary to have strong coordination among management agencies, especially customs offices, Huong said.

To Xuan Phuc, a representative of non-profit organisation Forest Trends, said trade fraud could lead to enormous losses to Vietnam’s wood industry, and specifying and minimising new risks are urgent issues of the sector.

 

He added management agencies should comprehensively assess risks of FDI projects as well as their export products. They should coordinate with local authorities to review FDI companies’ activities, along with products exported from Vietnam to the US as well as those from China to Vietnam, to clarify trade fraud risks.

He recommended the C/O granting process be strictly examined to ensure that these certificates are provided only for eligible companies and products, adding that business associations also need to update information from partners and authorised agencies to notify its members and help them avoid risks.

Quang Tri looks to become power hub in north-central region

The north-central province of Quang Tri set the goal of generating about 5,000 MW of electricity from thermal, gas, wind, solar and hydro power plants by 2025, making the province a power hub in the region.

A number of power projects will be launched in Quang Tri between 2019 and 2025.

As many as 58 wind power projects will go into operation by June.

Apart from 10 existing solar power projects, the province will have a total capacity of about 500 MW in the near future.

By 2025, 5,000 MW of electricity will help contribute 5 trillion VND (217.3 million USD) to the local State budget.

In order to lure more capital into the energy field, the province has built e-government and offered consultancy across taxation, insurance, land and environment to enterprises.

Quang Binh benefits from sustainable rural development project

A conference was held in the central province of Quang Binh on June 21 to review the Sustainable Rural Development Project (SPRD) for the poor during the 2014-2018 period.

Launched in January 2014, the International Fund for Agricultural Development (IFAD)-funded project was carried out in 40 communes of seven districts and towns in Quang Binh.

It contributed to ensuring local food security, significantly reducing child malnutrition and the rate of poor and near-poor households by 43 percent.

The project helped 17 businesses and cooperatives connect with 245 working groups comprising about 4,500 farmers to develop value chain, laying foundation for the implementation of the “One Commune, One Product” programme.

Up to eight value chains in support of poor residents were set up, 10 others at the district level and 141 at the communal level, 230 working groups and new cooperatives with more than 3,100 farmers receiving funds to invest in smart agricultural models in adaptation to climate change. Household income rose by 12 - 200 percent.

Participants suggested that departments and agencies make it easier for households and cooperatives to access preferential loans and call on firms to invest in production and consumption.

Vice Chairman of the provincial People’s Committee Tran Tien Dung hoped that ministries and agencies will create favourable conditions for Quang Binh to continue joining IFAD-funded projects and partner with the province in agriculture and rural development.

On the occasion, the provincial People’s Committee and the SRDP management board presented certificates of merit to five individuals and organisations in the project.

Workshop suggests ways to tap into Middle Eastern, African markets

A workshop in Ho Chi Minh City on June 21 gave several recommendations to Vietnamese firms to help them capitalise on Middle Eastern and African markets, which are believed to be greatly potential destinations for Vietnamese goods.

Pham Hoai Linh, an official from the Asia-Africa Market Department of the Ministry of Industry and Trade, said the Middle East consists of 15 countries with the total population of about 320 million. This region has fast economic development and very high per capita income, even more than 66,000 USD per year in some countries. Therefore, the purchasing power and paying capacity of clients in this region are also high.

Notably, due to the climate unfavourable for agriculture, the countries’ demand for agricultural products and food is huge. The Middle East imports up to 80 percent of its food demand, equivalent to around 40 billion USD each year – a figure forecast to hit 70 billion USD by 2035.

Linh noted that Vietnam and Middle Eastern countries boast long-standing diplomatic ties, cooperation and friendship. They also have complementary export structures in which what the Middle East needs are those of Vietnam’s strength like aquatic products, cashew nuts, peppercorn, coffee, textile-garment and building materials, while this region’s exports are also in demand in Vietnam, including oil and gas products, chemicals and plastics.

However, bilateral trade has yet to match both sides’ demand and capacity, approximating 14 billion USD in 2018, including 8.7 billion USD of Vietnam’s exports.

She said with strong purchasing power and financial capacity, the Middle East also has high requirements for product quality. Therefore, Vietnamese businesses should further improve it and adapt product designs and packaging to suit local consumers’ tastes, particularly the Halal food standards of Muslims.

On the other hand, she also warned security and political uncertainties, different business customs, and trade frauds in this region, recommending businesses to carefully learn about their target markets and partners before carrying out cooperation and transactions.

Regarding the African market, Nguyen Minh Phuong, head of the Western Asia – Africa division of the Ministry of Industry and Trade, said Africa, comprising 55 countries with a combined population of about 1.3 billion, is home to abundant natural resources but local production remains underdeveloped. Therefore, these countries’ demand for consumer goods and food is considerable. This region also supplies natural materials and raw farm produce for Vietnam’s manufacturing and processing industries.

Vietnam exports rice, telephones, electronic components, aquatic products, coffee, apparel and footwear to Africa, which in turn ships raw cashew nuts, cotton, timber, and animal food to the Southeast Asian nation.

Notably, despite this region’s growing import demand and not high goods standards, Vietnam still records a trade deficit of almost 1 billion USD with Africa.

Phuong also noted certain risks relating to different cultures, business customs and payment habits in African markets. Additionally, market information shortage, geographical distance and some trade protection barriers have also caused difficulties in tapping into the regional markets.

The official suggested Vietnamese companies update themselves about this region via trade promotion programmes and devise appropriate strategies to access the markets. They can also open representative offices or build bonded warehouses in African countries to facilitate export to the region.

German firm develops bioactives for cosmetics from Vietnam’s rambutan

German group BASF has launched new rambutan-derived bioactives from by-products, offering a host of opportunities for cosmetics firms in Vietnam and benefiting the local rural community.

These first materials have produced through the programme “rambutan plant development” of BASF - an initiative on socially and environmentally responsible supply chain, towards producing bioactives from raw materials in Vietnam.

The company has been working with its Vietnamese partners since 2015 to harness the cosmetic potential of the tropical fruit as part of its rambutan programme.

The initiative connects BASF, local farmers, scientists and non-governmental organisations, aiming to form a responsible supply chain.

The ramburan fruit itself is rich in iron, Vitamin C, fibres and antioxidants. The company also found that by-products such as rinds and seeds are just as valuable.

The project in Vietnam helps ensure safer working conditions, fair income, health insurance and gender equality for local rambutan growers.

BASF also established a team, which is supported by the Centre for Rural Economic Development (CRED) - a nonprofit organisation specialising in developing livelihoods for poor and disadvantaged groups in Vietnam. The team works to maintain rambutan gardens, harvest raw materials and prepare them for extraction of bioactive ingredients.

According to global cosmetics market analysts, the demand of consumers in developed countries for natural cosmetic products increases 20 percent, even 50 percent annually. In Vietnam, each people can spend about 4 USD for cosmetics a year.

Vietnam becomes a potential market for foreign cosmetics firms. The project opens up opportunities for Vietnamese cosmetics brands to learn experience from international firms, thus promoting their development.

Conference discusses ensuring legal timber in public procurement

Experts have discussed promoting legal timber products in public procurement in Vietnam at a conference in Hanoi on June 19.

Attendees talked about practices and challenges in implementing the Voluntary partnership agreement between the European Union (EU) and Vietnam on Forest law enforcement, governance and trade (VPA/FLEGT).

Director of the WTO Centre and Integration under the Chamber of Commerce and Industry Nguyen Thi Thu Trang said the Government has paid special attention to the wood sector in recent years.

After six months of negotiations, the Government and the EU signed the VPA/FLEGT, which took effect on June 1, 2019.

The agreement focuses on eliminating illegal wood from the supply chains, including timber products for export and domestic consumption.

According to Trang, annual expenditure for government procurement accounts for about 20-30 percent of the State budget, of which a large amount is spent on timber products. However, there are no statistics available at present on timber-related public procurement.

Ensuring only legal timber is bought under government procurement is important to promote the enforcement of the VPA/FLEGT in the country, she said.

She proposed adding the condition on the legality of goods and services in public procurement.

To Xuan Phuc, Southeast Asia analyst for the Forest Trade and Finance Programme, said the signing of the VPA/FLEFG marked the dual role of the Government as both the promulgator of regulations to ensure the legality of timber products, and the beneficiary of wood products within the framework of public procurement activities.

Vietnam exports timber products to 120 countries and territories, including the EU, the US, Japan, China, the Republic of Korea and Australia. In 2018, Vietnam’s exports of wood and timber products reached a record value of 9.3 billion USD, 900 million USD of which was to EU markets.

Thai Solar Energy eyes joint-ventures in Vietnam and Taiwan

The Bangkok-based renewable energy solutions firm Thai Solar Energy Pcl. is aiming to expand its international footprint by forming joint ventures in Vietnam and Taiwan.

In March 2019, the firm signed a co-operation agreement with China’s Huawei for the 150MW Onikoube solar project in Japan, according to a press release. Huawei's offering uses an artificial intelligence (AI) algorithm to improve operation and maintenance efficiency and reduce the operating costs of the plant, the company noted.

Its upcoming plans of penetrating the Vietnamese and Taiwanese solar energy segments also follows suit, as it targets improving utility-scale photovoltaic (PV) plants in the Asia-Pacific region.

In its latest report, Thai Solar Energy Pcl.’s CEO Cathleen Maleenont said that the company was preparing the groundwork and discussing with two or three partners in Taiwan. Its neighbour, Vietnam, is also a target country into which the firm would pour investment.

Currently, there are two projects in Vietnam that have appeared on the company's radar. Vietnam enjoys the advantages of a sunshine-rich country and expects to take further steps towards utilising green energy efficiently.

Thailand’s accumulated direct investment in Vietnam reached more than $10.4 billion so far, as previously reported by VIR. As the bilateral strategic relation between the two countries thrives, Thailand is among the top ten biggest foreign direct investors in Vietnam. By 2020, the expected investment and trade turnover is expected to reach $20 billion.

VKFTA gives boost to shrimp exports to RoK

With the Vietnam-Korea Free Trade Agreement coming into effect in late 2015, the nation’s shrimp exports to the Republic of Korea have increased from US$285 million to US$386 million from 2016 to 2018, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

At present, the Republic of Korea (RoK) is the fifth largest importer of Vietnamese shrimp. Between 2008 and 2013, shrimp exports to the RoK enjoyed an increase from US$85 million to US$225 million.
The Vietnam-Korea Free Trade Agreement (VKFTA) was officially signed on May 5, 2015 and took effect as of December 20, 2015.

Under the RoK’s commitments to the VKFTA, the nation’s seven shrimp products that are exported to the RoK market will enjoy a zero per cent import tariff as opposed to the previous 20 per cent.

The RoK pledged to grant a tariff free quota of 10,000 tonnes of shrimp to Vietnam during the first year of the enforcement of VKFTA. This offers a huge opportunity for the country to make inroads into the RoK market as there is only a quota of 5,000 tons in place for Thailand, Indonesia, and Malaysia, each.

Over the course of the next five years, the RoK will increase this tariff quota to 15,000 tonnes to Vietnam with this level being maintained as of the seventh year.

The country is now the leading shrimp provider for the RoK, accounting for a 50.5 per cent of the overall market share while other competitors such as Thailand, Ecuador, and China make up only 9.6 per cent, 13.5 per cent, and 5.2 per cent, respectively. Vietnam has to face tough competition from these countries in terms of the prices of their shrimp products.

In order to take full advantage of the VKFTA, the VASEP has urged Vietnamese businesses to raise awareness about getting access to information on the VKFTA, applying advanced technologies, and outlining development orientations to meet importers' demands.

HCM City shames customs tax evaders

The Customs Department in HCM City has publicly named over 1,000 firms who owned customs taxes.

As of May 15, the total tax debt at the HCM City Customs Department reached VND2.4trn (USD102.2m), of which over VND1.4trn were bad debts. The department has used many measures to collect the debts but many firms have no longer operated at their registered addresses.

In an attempt to deal with the debts, they released a list of up to 1,047 firms who owed VND996bn (USD42.4m) of bad debts to the public.

Most of the tax evaders are FDI firms and the majority of the firms are exporters in the fashion, textiles and manufacturing industries.

Leading the list if NIVL Company in Ben Luc District, Long An Province. By the end of April, it owned over VND150bn (USD4.5m) of taxes. NIVL went into operation in 2007 and is an FDI company. The company specialised in sugar manufacturing and food trading. It has ceased to operate and the director, A Nanda Kumar, already left Vietnam.

The Silver Star Vietnam Company owed over VND47bn (USD2m) of taxes. It stopped all operation in 2011 and didn't pay taxes. Neocase Vietnam with Jeon Jeong Jae as the legal representative owed VND30bn. It opened in 2007 and shut down in 2014.

Other firms are Kwang Nam Footwear Manufacturing Co., Ltd with a VND36bn (USD1.5m) of tax debts, Hong Better Garment Company Limited with VND22.4bn and Sepplus Vietnam Fashion Co., Ltd with VND19bn.

According to the HCM City Customs Department, those debts accumulated since many years ago and the many investors already fled the registered addressed or the country.

Standard Chartered offers insights on growth strategies for mid-corporates

Standard Chartered Bank, in cooperation with the Malaysia Business Chamber in Vietnam, organized the “Growth Strategies for Mid-Corporates” seminar in Ho Chi Minh City on June 12, drawing over 100 senior executives from Asian and Vietnamese businesses.

The seminar was co-hosted by the Singapore Business Group in Vietnam, the Thai Business Association in Vietnam, and the Indonesia Chamber of Commerce in Vietnam. This was the third Standard Chartered sponsored “Bridging ASEAN” seminar series, which is part of the bank’s commitment to supporting its clients to realize their growth ambitions both in their domestic markets and overseas.

Mr. Chidu Narayanan, Economist for Asia at Standard Chartered Bank, kicked off the seminar by sharing the bank’s views on the latest global, regional, and local economic outlook. He discussed the growing uncertainty around the trade war and its likely evolution and impact on global and regional growth. Persistent uncertainty around trade negotiations has weighed on global sentiment and growth, and ASEAN stands to potentially benefit from diverted demand. He noted that the outlook for the region remains steady, supported by strong domestic demand.

Mr. Jiten Arora, Global Head of Commercial Banking at Standard Chartered Bank, discussed the key findings from the bank’s recently released “ASEAN - A Region Facing Disruption: Positioning Mid-Corporates for Growth in Southeast Asia” report, and outlined the strategies ASEAN mid-corporates need to devise to build growth against major shifts in their respective sectors of operation. These strategies include Smart Operations, Digital go-to-market, and Cross-border expansion.

“ASEAN remains a positive growth story, but the extent of this depends on the adoption of new growth strategies by the private sector, the maintenance of policy reforms by national governments, and a renewed focus on infrastructure investments,” said Mr. Nirukt Sapru, CEO Vietnam, ASEAN and South Asia Cluster Markets at Standard Chartered Bank.

“The private sector will play a major role in driving ASEAN’s growth. In our long history in the region, we have developed unrivalled knowledge of each market and grown our network to be the only international bank operating in all ten ASEAN markets. We have had the privilege of supporting and growing with the region, while constantly striving to have a positive socioeconomic impact with our footprint. Leveraging on our vast experience, extensive network, and in-depth knowledge, we are committed to helping companies do business and realize their growth ambitions in the region.”

“ASEAN’s economy is projected to reach $4 trillion by 2023 and become the world’s fourth largest economy by 2030, but internal and external challenges can impact the region’s competitiveness and long-term growth,” said Mr. Arora.

“Mid-corporate businesses will have a more critical role to play in enabling future growth in the coming years, through transforming global supply chains and driving regionalized business models. Adopting digital solutions across the value chain and embracing regional expansion are two key growth themes that mid-corporates should focus on to ensure sustainable growth.”

“Today, ASEAN countries play an important role in global trade,” said Mr. Theng Bee Han, President of the Malaysia Business Chamber in Vietnam. “A lot of global production has moved to ASEAN and the region is also becoming an important market for the world. The increase in trade activities in the region is clear. Hence, business and trade-related information becomes important to fellow entrepreneurs.”

Iconic Hanoi ice cream feels the heat from milk tea

The Trang Tien ice cream is threatened by the rising popularity of milk tea and foreign confectionery.

According to the latest financial report of the ice cream brand's owner Ocean Hospitality and Service JSC (stock code: OCH), its revenue from food in 2018 registered at VND633.7 billion ($27 million), up 14 percent over the previous year.

The company currently operates in three main areas: food, hotels, and real estate. In the food setor, OCH owns Givral, a confectionary business, and Trang Tien ice cream, a familiar name for generations of Hanoians.

Despite rising revenue last year, OCH claims that the biggest threats to its future food revenue are foreign brands of confectionery, ice-cream, and milk tea.

"Milk tea is attracting young people in big cities across the country and affecting the consumption of OCH’s consumer products, including cakes," the report said.

OCH also sees tougher competition from confectionary sellers. Although it predicts its total revenues from the Vietnam confectionary market will rise by 8 percent in 2019, OCH said it will be affected by the rise of domestic and foreign brands like Dai Phat, Sweethome, ABC Bakery, TousLes Jours, and Paris Baguettes.

These brands have strong financial capabilities to invest in outlets in prime locations, offer a diverse range of confectionery, and are able to accept losses to gain market share, the report says.

OCH achieved consolidated revenues of VND1.16 trillion ($49.63 million) up 6.4 percent, and after-tax profits of VND44 billion ($1.88 million) in 2018, up from a VND3.7 billion loss a year prior.

However, the company has lowered its revenue targets and pre-tax profit targets to VND1.15 trillion ($49.19 million) and VND17 billion ($727,200) for 2019 as it foresees rising competition in its food business, according to the report.

VN, Italy boost economic co-operation

Viet Nam’s Ministry of Industry and Trade (MoIT) and Italy’s Ministry of Economic Development on Thursday signed a Memorandum of Understanding (MoU) on co-operation in the energy sector.

The MoU was signed during the MoIT’s business trip to Italy to promote bilateral and regional economic co-operation.

Outlining the structure of imports and exports between Viet Nam and the European Union, the EU-Viet Nam Free Trade Agreement (EVFTA) and EU-Viet Nam Investment Promotion Agreement (EVIPA) are expected to have positive effects on both sides.

During the visit, Italy and Viet Nam agreed to improve trade and economic co-operation in bilateral, regional and multilateral frameworks, especially the signing and approval of the EVFTA and EVIPA.

The two sides also agreed to immediately implement the MoU as well as study co-operation in other fields, deploying the results agreed by leaders of the two countries when the Prime Minister of Italy visited Viet Nam.

 
 
 
 
 
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