BUSINESS NEWS 30/4

Vietnam - Japan Business Matching Symposium 2019

On January 23rd, 2019, at the headquarters of the Ministry of Planning and Investment, the Vietnam-Japan Business Matching Symposium 2019 was held by the Organization for Small & Medium Enterprises and Regional Innovation (SMRJ) and the Foreign Investment Agency, Ministry of Planning and Investment.

Speaking at the Symposium, Director General of the Foreign Investment Agency Do Nhat Hoang said that 2018 marked a tremendously significant milestone - 30 years of attracting foreign direct investment (FDI) in Vietnam and 45 years of establishing Vietnam-Japan friendship. The relationship between the two countries has been constantly developing, becoming strategic partners in all fields, especially in economy, trade and investment. Japan is the country with the largest official development assistance (ODA) for Vietnam, the second largest foreign investor, the third largest partner in tourism and the fourth largest trading partner of Vietnam.

Director General Do Nhat Hoang said that, for three consecutive years (2016-2018), SMRJ has collaborated with the Ministry of Planning and Investment to successfully organize business delegations to visit and attend exhibitions in fields of information technology, transportation, electronics, auxiliary industries which were held in Japan.

According to the Foreign Investment Agency’s statistics, by the end of 2018, Japan is the second-largest investor over 130 countries and territories investing in Vietnam with 3,996 projects and a total investment of 57 billion USD that mainly concentrated in fields of manufacturing and processing industries, real estate and services, etc. It can be said that the investment capital flow from Japan into Vietnam has contributed significantly to the socio-economic development of Vietnam in a sustainable way. Many Japanese corporations have been present in Vietnam with reputable products with high technology and skill, contributing to the replacement of imported goods, enhancing exports, boosting growth and Vietnam’s position in the world.

Speaking at the Symposium, Head of SME Support Department, SMRJ, Mr. Higuchi, said that this is a meaningful event for sharing information about the need to find partners of some Japanese enterprises and introducing J-Goodtech - an online business matching platform. This is an effective connection channel, saving time, cost as well as human resources between the foreign small and medium enterprises in general and those of Vietnam in particular, from that, we will boost the connectivity between Japanese and Vietnamese enterprises, the two sides will become partners of each other.

At the Symposium, a number of discussion sessions took place, such as: sharing some information, business sectors that are currently trading, operating, the targets when cooperating with Japanese enterprises, the achievements of successful connection and cooperation with Japanese enterprises through participating in connection activities, advantageous and disadvantageous points in the process of cooperation and connection, etc.

Grab accompanies Ministry of Health to improve food safety awareness

Co-operating with the Vietnam Food Administration (VFA) under the Ministry of Health will open up an effective channel for Grab to contribute to improving food safety awareness in the Vietnamese community.

On April 25, Grab, through GrabFood, signed a co-operation agreement with VFA to implement its food safety promotion campaign targeting restaurants, food stalls, driver-partners, as well as customers who show increasing demand for safe food.

Tran Viet Nga, deputy director of the VFA, said that in recent years, improving the awareness about food safety is one of VFA’s priorities and it hopes to co-operate more with enterprises like Grab.

Jerry Lim, director of Grab in Vietnam, said that GrabFood is ready to do its part in spreading the message about food safety to millions of customers as well as its partner restaurants in order to create a heathy life for the Vietnamese community.

According to the agreement, in the next three years, the two parties will organise training courses for restaurants to supply knowledge about food safety. Then, Grab, through GrabFood, will co-operate with the VFA to distribute 6,000 documents about food safety in six cities and provinces, including Hanoi, Ho Chi Minh City, and Haiphong.

Besides, GrabFood will use its available technology base to continue spreading the food safety message among customers.

Just nine months after its official launch, GrabFood has been continuously expanding to 15 cities and provinces by now. The number of merchant-partners has increased ten-fold and the average delivery time reduced to 20 minutes per order. At the moment, almost no player in the market can boast similar successes, which made Vietnam GrabFood’s second fastest-growing market in Southeast Asia, outside of Indonesia.

While established competitors are developing multiple services from food delivery, GrabFood draws on the advantages from its mother company Grab – the biggest on-demand ride-hailing service in Vietnam. This helped GrabFood access a wide driver-partner and customer network.

Thanks to these two factors, besides the rapid expansion, GrabFood also received secondary advantages such as fast delivery time as well as a significant increase in incremental revenue from joining the platform.

With the strategy of satisfying Vietnamese consumes’ taste, GrabFood partnered up with popular local restaurants to add delicious dishes to its menu, as well as deliver consumers the best quality at the highest speed. At present, GrabFood offers a whole range of exclusive items on its menu from well-known restaurants under the “GrabFood Signatures” tag.

Binh Minh Plastic face difficulties despite Nawaplastic backing

After one year of holding the largest stake in Binh Minh Plastic JSC (BMP), Nawaplastic Industries has yet to join the company management and BMP still reports bleak business due to the fierce competition in the plastics sector.

Previously, in July 2018, Nawaplastic spent VND600 billion ($26.08 million) on buying an 1.17 million shares in BMP, lifting its stake in the Vietnamese plastic producer to 54.39 from 52.96 per cent.

According to Nguyen Hoang Ngan, vice chairman of the board of directors cum general director of BMP, during the past year, Nawaplastic has yet to provide BMP with solutions to increase its market share, it only shared information and experience about management, logistics, and dealing with unsold products.

The total capacity of the largest five plastic companies were 543,000 tonnes of plastic pipe per year, while the demand in 2018 was 63 per cent of the supply.
Ngan added that new members also need more time to achieve a deep understanding of the operation principles of BMP because at the 2018-2023 period, four of the five members of the board of directors are in their position for the first time.

In 2018, BMP acquired a consolidated net revenue of VND4.31 trillion ($187.39 million) and pre-tax profit of VND530 billion ($23.04 million), 4 per cent and 11.7 per cent less than the initial plans.

According to the evaluation of KIS Vietnam Securities Corporation (KIS Vietnam), the entry of Hoa Sen, Tan A Dai Thanh, and Phuc Ha companies to the plastic market may impact the leading position of BMP and Tien Phong Plastic (which have built themselves empires in the northern and the southern regions).

KIS Vietnam released that the total capacity of the largest five plastic companies were 543,000 tonnes of plastic pipe per year, while the demand in 2018 was only 63 per cent of the supply. It is also necessary to add that the maximum capacity of these manufacturers is up to 766,000 tonnes of plastic pipe per year, thus the competition will continue to be stricter in next years.

BMP manufactures and trades civil and industrial products made of plastics and rubber. The company also designs, manufactures, and trades in plastic moulds for the casting industry; produces and trades machinery, materials, and sanitation equipment for the construction industry; provides interior decoration and water supply and drainage services; and offers appraisal, among others.

In 2012, Nawaplastic spent VND352 billion ($15.4 million) on purchasing 7.13 million ordinary BMP shares, representing 20.4 per cent of the firm’s charter capital. Then the Thai manufacturer increased its holding in BMP via numerous purchases.

Vinatex targets 12 percent growth in profit in 2019

The Vietnam National Garment and Textile Group (Vinatex) eyed a 12 percent increase in profit this year despite various challenges arising from the US-China trade war, Vinatex General Director Le Tien Truong said.

At the corporation’s annual shareholders’ meeting recently held in Hanoi, Truong stated that Vinatex is striving to earn more than 22.18 trillion VND (954.8 million USD) in total revenue, and 839 billion VND (36.12 million USD) in pre-tax profit.

Besides, Vinatex expected the export turnover to expand 6-8 percent, and industrial production value to increase 5 percent from the previous year, he added.

Laying stress on the fluctuations of the global economy in 2018 due to trade tension, fierce competition and increasing protectionism, Truong said that the Vietnamese garment and textile sector had overcome challenges to become the world’s second largest exporter by shipping 36 billion USD worth of products overseas.

Vinatex also had a successful year 2018 as its revenue totalled nearly 20.24 trillion VND (871.32 million USD) while pre-tax profit was estimated at 761.4 billion VND (32.77 million USD), he highlighted.

In the year, the corporation’s dividend payout ratio was 6 percent, which means it paid total 300 billion VND (12.9 million USD) in dividends for its shareholders.

Binh Duong province moves to attract more investments

Improving investment climate via building a transparent administrative regime will be the focus of the southern province of Binh Duong to maintain its attractiveness to investors.

Thanks to a line-up of favourable policies drawn by local authorities, Binh Duong becomes the third most attractive destination for foreign investments, securing more than 31 billion USD in more than 3,400 projects, just following Hanoi and Ho Chi Minh City.

Last year, the province rose to the sixth place in the Provincial Competitiveness Index (PCI) from the 14th in 2017. It surpassed Ho Chi Minh City to gain the top position in the southeastern region.

Information and technology has been applied to handle administrative procedures, facilitating investment registration, shortening time for tax and customs procedure settlement. Particularly, the “one-door” mechanism was set up to handle investment procedures as well as promotes both domestic and foreign investments.

The local leaders have committed to simplifying and shortening time for enterprises to start their business. Accordingly, local authority processes companies’ application for business certificates in a maximum of two working days, and reduce by half the time for settling an administrative procedure.

According to Chairman of the provincial People’s Committee Tran Thanh Liem, the province will further its efforts to improve investment climate and put forth administrative reform to improve its competitiveness.

The Department of Planning and Investment is responsible for building, updating and announcing favourable policies while the Department of Industry and Trade is in charge of supporting enterprises to build infrastructure at local industrial parks. The Departments of Natural Resources and Environment and Construction should work together on land use planning measures.

In addition, dialogues with local enterprises will be organised regularly to remove their bottlenecks in a timely manner, Liem said.

Hà Nội’s farming products enter supermarkets

BUSINESS NEWS 30/4

People select vegetables in Big C Thăng Long supermarket in Hà Nội. Farmers and farming co-operatives in Hà Nội have reaped success from getting their products onto supermarket shelves. —
Farmers and farming co-operatives in Hà Nội have reaped success from getting their products onto supermarket shelves, thanks to meeting the retailers’ strict requirements.

Chúc Sơn Fruits and Vegetable Co-operatives in Chúc Sơn Town, Hà Nội’s Chương Mỹ District started applying Vietnamese Good Agricultural Practices (VietGap) on its 15ha of fruit and vegetable in 2017.

The co-operatives’ director Hoàng Văn Khảm said using GAP methods to produce products, especially fresh fruit and vegetables, helped the co-operatives access a modern retail system consisting of supermarkets and canteens at schools or hospitals.

Khảm said that last year, the co-operatives produced 779 tonnes of fruits and vegetable, up 46 per cent compared to the output of 2017, generating revenue of VNĐ 11.2 billion (US$483,000).

He added that nearly 40 per cent of the co-operatives’ products went to hospitals while 43 per cent to major supermarkets like Big C or Vinmart and the remaining products were sold to schools or at traditional markets.

“When linking with modern retailing system, the co-operatives must make detailed production schemes for every cultivation area so they can have enough fruits and vegetable to supply,” Khảm said.

The co-operatives also built net houses and a water-saving system to ensure proper conditions for fruits and vegetable to grow, Khảm said, adding that stable production helped ensure and increase the income of co-operative members.

“When our products are at supermarkets, we gain more confidence from consumers and our branding improves,” Khảm said.

Hoà Bình Co-operatives in Hà Đông District also applied VietGap on its 10ha of vegetables so it could supply schools and stores in the district.

Director of the co-operatives Trịnh Văn Vĩnh said that previously, it had to called on farmers to join the co-operatives but in the last few years, farmers were asking to join so they could learn proper farming technique such as how to make fertiliser or how to use plant protection products properly.

The co-operatives helped its members with input materials and farming skills and further, the co-operatives found buyers for the products, Vĩnh said.

Phùng Văn Hà, director of Núi Bé Co-operatives in Chương Mỹ District, said as soon as the co-operatives applied VietGap to its 15.5 ha grapefruit farm, the fruit could enter supermarkets and food stores in the city.

“Our grapefruit is sweet and tasty, with no chemical residue and we also provide origin-tracing stamps,” Hà said.

Đinh Thị Mỹ Loan, president of Việt Nam Retailers’ Association, said the modern retailing system had more advantages than traditional ones in terms of diversification, reliable quality and traceable origins of products.

However, according to the association’s survey, in the domestic market, more than 85 per cent of Vietnamese farming products are sold at traditional retail channels including wet markets, wholesale markets or street markets, while only 15 per cent is sold at supermarkets and convenience stores.

Loan said that farming products of households and co-operatives struggled to access supermarkets because their origins were not certificated and producers did not much attention to branding.

“Farmers and co-operatives usually have modest production sizes, resulting in unstable supply to supermarkets,” Loan said.

Meanwhile, Loan added that the development of supermarkets and convenience stores in Việt Nam was slow as on average, there was one convenience store for 69,000 people while in Korea, there is one store for about 1,800 people.

According to Hà Nội’s Sub-department of Cultivation and Plant Protection, about 1.5 per cent of vegetables grown in Hà Nội are sold to supermarkets, 1.5 per cent to stores, 1.8 per cent to collective canteens, 12.6 per cent to wholesalers, 26.8 per cent sold at wet markets by growers and about 56 per cent sold at wholesale markets.

Deputy Director of Hà Nội’s Department of Agriculture and Rural Development Tạ Văn Tường said few of Hà Nội’s farming products entered supermarkets and convenience stores as local farmers and co-operatives had yet to connect with distributors while distributors lacked information about the products.

Tường said support policies were needed to develop a better supermarket and convenience store network.

In addition, policies were needed to help farmers and co-operatives develop branding and origin-tracing codes for their products.

Petrolimex focus on divestments and restructuring in 2019

Việt Nam National Petroleum Group (Petrolimex) will focus on divestments and restructuring in 2019, implementing unfinished tasks from last year, the company’s management board announced at its annual shareholders’ meeting on Friday.

The main issues include the reduction of State holding in the group to 51 per cent and cutting its stake in Petrolimex Insurance (Pjico) to 35 per cent, as well as completing the merger between PGBank and HDBank.

Petrolimex last year proposed to extend the divestment schedule to 2019-20, with a plan to reduce the State capital rate by issuing shares to raise charter capital. Additional capital is essential to implement its key development projects in the coming years.

The group was developing the specific divestment plan and would submit it to the Government for approval, Petrolimex chairman Phạm Văn Thanh told the meeting.

In addition, Petrolimex has also proposed to the Government to raise the cap on foreign ownership in the group from 20 per cent to 49 per cent, but has yet to receive approval.

A representative of JX Nippon Oil & Energy, which owns 8 per cent of Petrolimex’s capital, showed their long-term investment plan at the meeting and said they wanted to own 20 per cent of the group’s capital. The Japanese investor will develop plans and consider investment in the future.

Regarding the plan to sell 103 million treasury shares, Thanh said the group was planning and met many investors, including foreign funds and large organisations such as Temasek and JPMorgan, through roadshows. With four consecutive years exceeding business targets, many foreign investors are keen on Petrolimex’s shares, he said.

Petrolimex CEO Phạm Đức Thắng pointed out some challenges facing the group in 2019, specifically the rapid increase in the number of petroleum traders which has caused steeper competition in prices, affecting the intermediary system and retail channels.

In addition, world oil and gas prices are volatile and unpredictable. In the first nine months of 2018, oil prices increased by 26-38 per cent compared to 2017 and from the middle of October, the price quickly decreased, losing 42 per cent compared to the year’s peak.

Oil volatility has greatly affected the business results of the group in the fourth quarter as well as the whole of 2018, Thắng said.

Despite that, Petrolimex fulfilled its 2018 targets with consolidated net revenue of nearly VNĐ192 trillion (US$8.24 billion), exceeding the yearly target by 24 per cent. Pre-tax profit reached VNĐ5.1 trillion ($216.4 million), up 2 per cent over the plan.

This year, the group has targeted total revenue of VNĐ195 trillion and pre-tax profit of VNĐ5.25 trillion, up 2-3 per cent year-on-year. The volume of petroleum products sold is predicted at 12.3 million metric tonnes, equivalent to 95 per cent of the previous year due to the impact of Nghi Sơn refinery.

Thắng said Petrolimex would continue to keep a close watch on world oil prices to flexibly balance sources from domestic refineries and imports.

The company will pay a dividend rate of 26 per cent for last year’s performance, which cost it more than VNĐ2.55 trillion. The dividend rate this year is expected to be at least 12 per cent.

HoREA offers proposals to help real estate firms access long-term bank loans

BUSINESS NEWS 30/4

The HCM Real Estate Association (HoREA) has suggested the State Bank of Viet Nam (SBV) extend the application of regulations on banks’ maximum ratio of short-term funds used for medium- and long-term loans until the end of 2020.

The HoREA also proposed the rate should be reduced to 37 per cent starting from January 1, 2021; 34 per cent from July 1, 2021; and 30 per cent from July 1, 2022.

The moves were announced after the SBV released a draft circular stipulating that the maximum ratio of short-term funds used for medium- and long-term loans at banks would be reduced from the current 45 per cent to 40 per cent from 2019 to June 30, 2020.

Under the SBV’s draft circular, the rates of 37 per cent and 30 per cent will be applied from July 1, 2020 and July 1, 2021, respectively.

According to the HoREA, the amendments will damage the real estate market as property enterprises are in dire need of medium- and long-term loans. It explained that due to the large proportion of short-term capital in banks’ total mobilised capital, banks will find it difficult to meet the demands of the real estate market.

The HoREA said real estate firms in developed countries have raised capital from investment funds and stock markets. Bank loans are mainly provided to homebuyers. However, in Viet Nam, property companies are dependent on bank loans and capital mobilised in advance from homebuyers, while most homebuyers also take loans from banks.

The local stock market has yet to become a major channel of capital access for real estate enterprises as the number of listed property firms is small. Only some 65 out of more than 1,000 real estate firms are listed on the stock market, the HoREA said.

Real estate investment funds and the stock market are unable to meet the high demand for capital in the property sector. Viet Nam currently has only one investment fund for the sector, Techcom Vietnam Real Estate Investment Trust, an arm of Vietnam Technological and Commercial Joint Stock Bank, with charter capital of only VND50 billion (US$2.14 million).

The foreign direct investment (FDI) inflow to the local real estate market is also limited and does not meet capital demands, though it accounts for some 21 per cent of the country’s total FDI value, the HoREA said.

It expects the application of the amended Law on Securities this year to create favourable conditions for the establishment of real estate investment funds and trusts to provide capital for the local market.

According to the Law on Real Estate Business, investors in property projects must provide at least 15 per cent of the equity or 20 per cent of the investment capital. The remaining 80-85 per cent of capital can be mobilised from banks or customers.

PM urges property laws to be finalised

BUSINESS NEWS 30/4

The Prime Minister has asked the Ministry of Construction (MoC) and relevant ministries to complete the legal system regarding the local property market to ensure sustainable development, according to the Prime Minister’s direction issued on April 23.

According to the Directive No 11/CT-TTg on solutions promoting stable and healthy development of the real estate market, the MoC needs to complete adjustments and supplements to the Construction Law, the Housing Law and the Real Estate Business Law in the third quarter of this year. Those include amendments and supplements to construction standards for condominiums, condotels, resort villas, officetels and rooms for rent.

The ministry is asked to complete and issue in the third quarter regulations on management and operation of officetels.

It must coordinate with other ministries, branches and localities to strengthen inspections and require investors of projects developing urban areas and apartments to ensure synchronous building of all infrastructure, including technical infrastructure, social infrastructure and fire protection systems in the projects. In addition, the investors must also connect the projects’ infrastructure works with the infrastructure systems of the regions before handing over property products to customers in accordance with the law on construction, law on housing and relevant laws.

Moreover, the MoC would continue following the development of the local property market to report to the Government and the Prime Minister when needed, aiming to develop measures on stabilising the market when there are big fluctuations.

Meanwhile, the Ministry of Natural Resources and Environment (M0NRE) issues in the third quarter of this year specific guidelines on issues relating to land use rights for condotels, resort villa and officetels in accordance with existing regulations.

The ministry will strengthen comprehensive inspection of implementing planning, land use plans, land allocation, land lease and issuance of certificates on land use rights, house ownership and other landed assets.

It will also monitor management and land use in industrial zones and industrial complexes, projects developing urban, residential and resorts and projects having signs of violation in land use and management.

 

The Prime Minister has assigned the Ministry of Finance (MoF) to complete in the third quarter of this year proposals on amendment, supplement and issuance of regulations for using all resources, especially land, in development and anti-speculation on the real estate market.

The MoF will work with relevant ministries and sectors to study some financial institutions, such as housing savings fund, real estate investment funds and real estate trust funds, to mobilise financial sources for the real estate market and to gradually reduce dependence on capital from credit institutions.

The State Bank of Viet Nam continues to have flexible monetary policies and to control credit scale in accordance with macroeconomic developments as well as credit for the real estate business sector. Credit institutions are encouraged to give capital to projects developing social houses, low-price commercial houses and rental houses.

To avoid a real estate bubble, the Prime Minister has required the people's committees of centrally-run cities and provinces to strictly implement laws and regulations relating to the real estate market and follow development of the property market for measures on stabilising the market and preventing the market from price fevers and bubbles.

At the same time, they must complete amendments of planning in the third quarter to have land fund for social housing development in urban planning, industrial zone planning and land use plans, ensuring adequate land funds for social housing development.

They will approve planning of new urban areas, new industrial parks and education facilities when the planning must have land for social houses, workers' houses, student houses and functional areas for education, health, culture and sports services.

These cities and provinces also arrange investment to essential infrastructure in and out of social housing projects, especially in areas with large numbers of workers.

The State will withdraw investment licences from property projects that are not implemented, especially luxury housing projects.

Forestry exports on the rise

BUSINESS NEWS 30/4



The forestry industry showed a strong increase in export value in the first four months of the year, according to the Viet Nam Forestry Administration.

Forestry exports were estimated to have hit US$3.3 billion in the period, a year-on-year increase of 17.8 per cent, including $875 million in April alone.

Key markets for Vietnamese forestry products included the US, Japan, the EU, China and the Republic of Korea, accounting for 87 per cent of the exports, it said.

Viet Nam imported $790 million of forestry products in the first four months, up about 15.1 per cent year on year, including $210 million in April.

About 60 per cent of imported timber and furniture came from China, the US, Cambodia, Thailand, Malaysia, Chile, Germany, New Zealand and France.

The national export value of farming, forestry and fishery products in the first four months of the year reached $12.4 billion, similar to the figure recorded in the same period last year, reported the Ministry of Agriculture and Rural Development.

Of which, the export value of farming produce for the period is likely to hit $6.6 billion, a light surge against $6.5 billion in the same period of 2018.

Impressive export revenues were seen in fruits and vegetables ($1.4 billion), cashew nuts ($922 million), rubber ($559 million) and pepper ($288 million).

The export value of aquatic products reached $2.5 billion, up 2.4 per cent, including $635 million from tra fish and $913 million from shrimp.

On the contrary, decreases in both export volume and value look set to be recorded for rice, coffee, cassava and cassava products. The export volume of rice dropped 8 per cent and value was down 19 per cent, while the respective falls of coffee were 13 per cent and 19 per cent. Cassava and cassava products were down 14 per cent and 3.3 per cent.

In the four-month period, Viet Nam imported $9.7 billion worth of farming, forestry and fishery products and agricultural materials, up 3.2 per cent year on year, including $2.7 billion in April.

Gia Lai encourages farmers to intercrop plants in gardens

BUSINESS NEWS 30/4

Farmer Ngô Văn Tiên intercrops pepper, passion fruit, jackfruit and other plants in his 1ha garden in Gia Lai Province’s Đăk Đoa District.

The Tây Nguyên (Central Highlands) province of Gia Lai has encouraged farmers to intercrop plants in pepper and coffee gardens to improve income and reduces risks of losses.

The current shortage of irrigation water in the dry season and disease outbreaks in industrial trees, especially pepper and coffee trees, have caused risks and affected the income of farmers in the province, according to the province’s Plant Cultivation and Protection Sub-department.

Pepper and coffee are the province’s two major industrial crops.

Hà Ngọc Uyển, head of the province’s Plant Cultivation and Protection Sub-department, said the sub-department recently inspected industrial tree gardens and found that such gardens that planted only one kind of tree were limited in efficiency.

The sub-department has encouraged more farmers to intercrop other plants in their gardens to reduce risks and improve the efficiency of farmland, he said.

After many pepper and coffee trees died because of disease outbreaks and old age in recent years, many farmers in the province began intercropping short-term and long-term crops in their gardens.

The intercropping has helped farmers increase income as they waited for harvest of the main crops of coffee and pepper. It also reduced risk of losses when coffee and pepper prices fell, according to farmers.

Ngô Văn Tiên, who has a 1ha mixed garden in Đăk Đoa District’s Nam Yang Commune, said he intercropped pepper, passion fruit, jackfruit, areca trees and soft bollygum early last year.

It takes about three years for pepper to be ready for harvest so he grew passion fruit to have income while waiting for the pepper harvest. He also grew jackfruit, areca trees and soft bollygum to provide shade for pepper plants.

Passion fruit plants began to have a harvest after eight months of planting, providing him an income of nearly VNĐ150 million (US$6,450) so far, he said.

The intercropping also saves irrigation water and fertiliser since it is used for multiple crops in the same area.

Nguyễn Văn Lập has intercropped coffee, pepper and durian in his 5ha garden in Mang Yang District’s Đak Djrăng Commune since 2006.

Last year, he earned an income of VNĐ3.5 billion ($151,000) from harvesting 34 tonnes of durians, eight tonnes of pepper and four tonnes of coffee.

The province’s Department of Agriculture and Rural Development chose his garden as a site for other farmers to visit and learn about intercropping.

Trịnh Quốc Việt, director of the province’s Agriculture Extension Centre, said the model of intercropping fruits in coffee and pepper gardens offers 3-4 times higher profit than the planting of only one crop.

The model also provides a wind shield for main crops such as coffee and prevents water evaporation in the soil, he said.

It helps develop coffee trees sustainably and adapt to climate change, he said.

Gia Lai, which is one of the largest coffee producers in the country, had around 94,000ha of coffee trees last year.

Construction ministry proposes stricter regulations on apartment maintenance fund

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The Ministry of Construction (MoC) has called for the prosecution of individuals and organisations that misappropriate apartment maintenance funds.

The ministry said disputes and complaints about apartment maintenance funds have been a hot button issue in recent years.

Minister Phạm Hồng Hà said that by the end of last month, 11 of 40 localities reporting disputes and complaints were related to the fund. Of which, most of them were in Hà Nội and HCM City with 458 disputes and complaints.

The disputes were related to management and the use of the fund as investors delayed the hand-over of cash or provided only part to the management board.

Hà said the problem was some investors did not have sufficient financial capacity to implement property projects. They only focused on profit from selling their apartments but did not pay attention to after-sale duties. They did not open a bank account to manage funds but used the money for their business or building of other projects.

“Many real estate investors delayed establishing a management board representing apartments’ owners or did not hand over the fund to the board,” he said.

He added that collecting 2 per cent for apartment maintenance fees from each apartment was not a small amount. This was why the Government should strictly control the use of the fund to avoid problems.

Nguyễn Trọng Ninh, head of the ministry’s Department of Housing Management and Real Estate Market, said the MoC proposed the National Assembly complete policies relating to apartment maintenance fund management.

The ministry proposed three plans relating to the fund.

The first is to maintain the current collection of 2 per cent from each apartment and pay after buying an apartment.

The second is to remove the contribution and investors would collect money from apartment owners to repair damage.

The last is to collect the fee five years after an apartment building comes into operation, as apartment buildings often have five years of guarantee and did not need the funds.

“The ministry is inclined to the third plan because the collection of maintenance fees in this way is the most reasonable,” Ninh added.

Trần Trọng Tuấn, director of HCM City’s Department of Construction, said they proposed a model that having a third party to collect and keep the funds such as a bank or a business. Home buyers would pay the fee to a third party.

The third party would disburse the funds if apartment management board follows procedures and regulations.

Lê Hoàng Châu, chairman of HCM City Real Estate Association proposed another plan by dividing the collection of 2 per cent of maintenance fees into 60 months to reduce the financial burden for home buyers.

The management board of each apartment building would collect the fees and propose to the ministry a mechanism for disbursement.

Vietnam, China to enhance trade on farm produce

BUSINESS NEWS 30/4

Minister of Industry and Trade Tran Tuan Anh has held a working session with head of China’s General Administration of Customs Ni Yuefeng to seek ways to boost bilateral trade ties in a more balanced and sustainable manner.

The two sides agreed that thanks to the attention and direction of senior leaders of both countries, economic and trade cooperation between Vietnam and China has grown rapidly and seen fruitful outcomes over the years.

They noted that Vietnam’s trade deficit with China has been decreasing, but has yet to be sustainable, thus requiring more effective measures to narrow it down.

They affirmed the significant role of cooperation in farm produce trading, and agreed to continue to further facilitate the trade of the products in the coming time.

Alongside, the two sides agreed to closely work together in implementing the protocol on opening the Chinese market for Vietnamese dairy products and mangosteen, which has been signed recently.

The Chinese General Administration of Customs will work closely with the Vietnamese side to continue conducting procedures to evaluate risks for durians, passion fruit, avocados, grapefruit, coconuts, custard apples, and Java apples and other products such as sweet potatoes and bird nests from Vietnam.

Recognising that China is an important export market for Vietnamese rice, the two sides agreed to continue applying suitable measures to manage rice quality and ensure the stable and sustainable development of rice export activities to China.

Minister Tran Tuan Anh and head of China’s General Administration of Customs Ni Yuefeng promised to assign relevant agencies of the two sides to draft a memorandum of understanding on building mechanisms to foster Vietnam-China trade ties.

Statistics from the customs of Vietnam showed that in 2018, Vietnam-China trade reached 106.7 billion USD, up 13.5 percent year on year. Vietnam exported 41.26 billion USD worth of goods to China and imported 65.43 billion USD worth of goods from the market.

During his stay in Beijing, Minister Anh, who accompanied Prime Minister Nguyen Xuan Phuc to the second Belt and Road Forum (BRF) for International Cooperation on April 25-27, attended a thematic forum on trade connectivity at the second BRF.

Garment firm to seek opportunities in Canadian market

BUSINESS NEWS 30/4

The Garment 10 Corporation and a number of member enterprises of the Vietnam Textile and Garment Group (Vinatex) will visit Canada to seek opportunities to export garment and textile products to the market.

According to General Director of the Garment 10 Corporation Than Duc Viet, Canada is a promising market of Vietnam with import turnover of garment and textile products reaching 13.3 billion USD per year.

However, exports of Vietnamese garment and textile to the market is just about 550 million USD per year, he noted, adding that Vietnam and Canada have yet to sign a bilateral free trade agreement, therefore the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) will help open up opportunities for Vietnam to increase exports to the market in the future.

Once penetrating the market, Vietnamese garment and textile products will enjoy zero tariffs from the CPTPP, he said.

Viet stressed Canada has high demand for garment and textile products made of natural fabric, which is in line with Vietnam’s products.

Logistics staff needed to meet automation demand

BUSINESS NEWS 30/4

Tan Cang-Cat Lai Port in HCM City’s District 2. The logistics sector needs qualified human resources to meet automation and ecommerce requirements

The current logistics labour force needs to adapt to fast-changing automation and ecommerce requirements, experts said at a dialogue organised by the Vietnam Chamber of Commerce and Industry (VCCI) and Australia Aid on April 26 in Ho Chi Minh City.

Speaking at the event, Nguyen Ngoc Tu, chief innovation officer at SmartLog Logistics Solution Corporation, said the logistics industry is the backbone of trade. Good logistics can lower trade costs and help countries compete globally.

For developing countries, getting logistics right means improving their infrastructure, customs procedures and regulations, he added.

Vietnam’s position in the Logistics Performance Index (LPI) in 2018 jumped to 39th among 160 surveyed countries, according to the latest report from the World Bank (WB).

Logistics costs in Vietnam account for nearly 21 per cent of the country’s Gross Domestic Product (GDP), twice as much as some developed economies.

“Using modern technological solutions is necessary to reduce logistics costs and make the local logistics industry more globally competitive,” Tu said.

Strengthening training and developing logistics human resources are also key to developing the country’s logistics sector.

“Students and job seekers in logistics should improve their knowledge and skills to meet the requirements of digitisation and the Fourth Industrial Revolution, especially analytical skills,” Tu said.

Nguyen Vu Dan Khuyen, business solution manager at Gemadept Logistics Corporation, said during nearly 30 years of operation, her company’s recruitment demand had changed significantly because of technology advances.

“Businesses and workers in the logistics industry should keep up with modern trends and meet the demands of the logistics market,” she said.

With ongoing automation and e-commerce trends, logistics jobs are not only for male workers, she said.

“Both male and female workers have to know how to promote their strength and limit their weaknesses if they want to keep their jobs,” Khuyen said.

Students in logistics should also keep up to date about businesses’ recruitment demand so they can meet their requirements.

Problem-solving skills and systems thinking are important factors that will help workers adapt to the rapid changes in the logistics industry, she said.

Hanoi’s CPI rises 0.24 percent in April

BUSINESS NEWS 30/4

Hanoi’s consumer price index (CPI) in April rose 0.24 percent from the previous month and 4.35 percent against the same time last year, reported the city Statistics Office.

Compared to March, the price of food and catering services was down 0.82 percent, while that of beverages and cigarette decreased 0.23 percent.

A respective drop of 0.2 percent and 0.29 percent was seen in the prices of culture-entertainment-tourism and post-telecommunication services.

Meanwhile, upturn was seen in the prices of garments, headgear, footwear at 0.05 percent; housing, construction materials, power and water supply at 0.63 percent; equipment and household appliances at 0.23 percent; and medicine and health care services at 0.02 percent.

Particularly, a sharp rise of 4 percent was recorded in the price of transportation due to the two recent adjustments of petrol prices.

At the same time, gold price was down 0.68 percent, while the price of USD fell 0.01 percent over the previous month.

 
 
 
 
 
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