BUSINESS NEWS 30/6

Conference to help UK investors understand Vietnam

The Ministry of Finance (MoF) in cooperation with UK partners will organize an Investment Promotion Conference in the UK on July 4.

The conference aims to create a practical dialogue to help British enterprises and investors better understand the performance of Vietnam’s economy and policies and the determination of the Vietnamese Government in innovation, as well as strengthen the trust of British investors in Vietnam’s development potential.

The UK is Vietnam’s second-largest foreign investor in Europe, with total registered capital of $3.75 billion, and has the 15th-largest FDI in Vietnam among 122 countries and territories. It is Vietnam’s third-largest trade partner overall, with trade turnover between the two standing at $6.77 billion in 2018, up 10 per cent against 2017.

“Most British and EU investors have quite a bit information about Vietnam,” said Mr. Pham Hong Hai, General Director of HSBC Vietnam. “However, as a member of ASEAN, which has the fifth-largest economy and the third-largest population in the world, Vietnam is becoming an important investment destination. Thus, the conference is expected to help European and British investors look more closely at Vietnam.”

British companies have been present in Vietnam since 1988-1989 and have invested in key industries such as oil and gas, mining, manufacturing and processing, real estate, banking and finance, and insurance. Enterprises include BP, BHP Billiton, Rolls-Royce, Vodafone, P&Q, GlaxoSmithKline, Standard Chartered, HSBC, and Prudential.

Foreign investors in general have had an interest in Vietnam’s financial market, but the country doesn’t have many major businesses listed on the stock market, according to Mr. Hai. “Speeding up the process of equitizing State-owned enterprises and encouraging large-scale private enterprises to list would create more stocks and attract investment from foreign investors,” he said. HSBC has been cooperating with the MoF and the State Securities Commission of Vietnam (SSC) to upgrade the country’s stock market to an emerging market on the MSCI Index (Morgan Stanley Capital International).

Mr. Mike Lynch, Managing Director and Co-Head Institutional Brokerage at SSI Securities Corporation, said the Vietnamese Government and particularly MoF and SSC have made efforts and undertaken action programs to lure foreign investment flows into Vietnam, especially enhancing market transparency, diversifying products, and completing the draft Law on Securities in order to ensure safety, efficiency and sustainability. “With such efforts, Vietnam will become a profitable market for investors,” he said.

According to MoF, the direct investment value of nearly $4 billion from British investors in Vietnam does not yet reflect potential.

British indirect investment in Vietnam is also still quite modest, at approximately $1 billion. Thus, the financial market segment still has a lot of new opportunities for cooperation between the two countries and there is much potential for British investors.

The UK and Vietnam have signed many framework agreements, such as the Double Taxation Avoidance Agreement and the Agreement on the Protection and Promotion of Investment. It is expected that the two countries will promote the signing of a free trade agreement based on inheriting FTAs that the EU will sign with Vietnam. Once this bilateral FTA is signed, trade flows are expected to move more strongly.

Germans taking interest in Vietnam

In the wake of the United States-China trade tensions, German investors are rushing to pour money into industry, construction, trade, and services in Vietnam to benefit from growth potential following the country’s landmark free trade agreements.

At last week’s meeting to announce the AHK World Business Outlook 2019 (AHK WBO), Marko Walde, chief representative of the German Industry and Commerce in Vietnam (AHK Vietnam), said that German businesses consider Vietnam as a focus of their investment plans.

“Vietnam is a target, as it is one of the four countries in the ASEAN that are members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Vietnam will also sign a bilateral free trade agreement with the EU,” said Walde. “In Vietnam, Germans do not focus on huge investment, but on long-term investment, bringing in state-of-the-art equipment, machines, and advanced technologies to the country.”

As shown in the AHK WBO, which studied over 3,500 German companies worldwide, German businesses operating in Vietnam assess both their current and future business situations significantly better than they did in 2018. Some 77 per cent rate their current business situation in Vietnam as good, up from 56 per cent in 2018, and higher than the ASEAN average of 61 per cent. The positive news does not stop there. From 2018 to 2019, the percentage of German business who rated their current business situation in Vietnam as negative fell from 4 per cent to zero.

What is more, 55 per cent of German companies in Vietnam intend to expand their activities within the country, while 59 per cent predict an increase in employment in 2019-2020.

“German investment in the country will increase in industry, construction, trade, and services, as well as in other economic sectors. German investment in Vietnam has tended to shift from basic projects into high-quality ones in line with Vietnam’s strategy to attract high-quality foreign direct investment,” the leader of AHK Vietnam told VIR.

The on-going US-China trade tensions have also impacted German investment in Vietnam, prompting companies to view investment in Vietnam as a safer, more reliable alternative to Chinese investments.

“German companies have tended to extend investments to a third country, including Vietnam, to ease risks in China. Hella is a typical example. As a leading developer and manufacturer of lighting technology and electronic products for the automobile industry, the company decided to establish a software centre in Ho Chi Minh City a few years ago, in addition to a similar centre in China,” explained Walde.

While the outlook for business in Vietnam has been increasingly positive, more than half of German companies (51 per cent) claim that economic policy framework is the greatest risk to their businesses in Vietnam. Some 28 per cent are worried about the potential for disadvantageous trade barriers, 44 per cent are concerned about a lack of qualified labour, and 31 per cent are worried about an increase in labour cost.

The concern regarding economic policy framework is increasing. Last year, 44 per cent of German business cited economic policy as the greatest factor of uncertainty for their business in Vietnam. In 2019, 51 per cent of German businesses share that concern. Despite these concerns, higher growth potential has increased German investment. According to statistics from the Ministry of Planning and Investment, as of May 20, German ­businesses invested in a total of 328 projects in Vietnam with the total investment capital of nearly $2 billion.

New logistics complex marches towards sustainability

The domestic logistics industry has been enjoying exceptional growth driven by key industry players with ambitious global expansion plans, striving to mark Vietnam on the global logistics map.

According to the Vietnam Logistics Business Association, the domestic logistics industry has annually grown by 14-16 per cent, with a scale of $40-42 billion per year, which is equivalent to 17-18 per cent of the country’s GDP. Meanwhile in 2018, as reported by the World Bank, Vietnam was ranked 39th out of 160 spectated countries on the logistics performance index, up by 25 positions compared to two years earlier. Thus, Vietnam has emerged as a lucrative destination leveraging its strengths in experience, operational management, and technical infrastructure. The strong presence of over 3,000 local logistics firms have fuelled the sector’s buoyant performance. The potential of this industry has been driven not only by state-owned logistics but also by private enterprises boasting big experience, knowledge, and high technologies.

Leading in the state-owned business sector is Saigon Newport Corporation (SNP), Vietnam’s largest modern and professional container port operator with a diverse port operation and multimodal transport. SNP is currently the primary container terminal operator in Vietnam, responsible for more than 90 per cent of the southern region’s export-import container market share, and nearly 50 per cent of the whole country’s market share.

Besides, private logistics firms are playing an increasingly important role in Vietnam’s international economic integration. A typical example is Indo Trans Logistics Corporation (ITL Corp.) established when Vietnam initiated its open-door policy. They have expanded their business network nationwide and in six Southeast Asian countries, with major business ventures and a connection to global logistics giants such as Keppel Telecommunications and Transportation (ITL Keppel), Ceva Logistics, Mitsubishi Logistics, and UPS Supply Chain.

Last year, ITL Corp. grew by a record rate of 50 per cent on-year, three times higher than the national logistics sector’s average growth.

The year 2019 is a milestone in the development for both ICD Tan Cang Song Than, which is a member of SNP, and ITL Corp. as the two enterprises decided on signing a business co-operation contract.

With the establishment of the integrated logistics complex in Binh Duong province, which is supposed to be the biggest scale operation in Southeast Asia, this event marks significant co-operation between a leading state-owned enterprise (SOE) and a Vietnamese private enterprise, as it will help strengthen the capacity of both sides, therefore providing added value for both domestic and regional supply chains.

With more than 60,000 square metres of storage area positioned in a strategic location in the southern logistics centre, the ITL-ICD Tan Cang Song Than Integrated Logistics Complex provides end-to-end logistics services including warehouse rental and management, railway transportation from Song Than Station, road transportation, courier services, customs brokerage services, and international freight forwarding services. This can help save time and cost as well as reduce enterprise workload.

Amanda Rasmussen, chief operating officer of ITL Corp said, “ITL’s strengths are commercial and partnership integration, processes, operation models, and technology platforms executed at international and global standards of excellence. Meanwhile, SNP is very strategically positioned in infrastructure development and ports systems. Together, SNP and ITL create a special competitive advantage that helps both businesses together bring a unique, optimised and tightly connected offering to the market.”

The establishment of the ITL-ICD Tan Cang Song Than Integrated Logistics Complex is a remarkable highlight in the industry, contributing to boosting international trade and economic growth. Efforts in co-operation between ITL and an SOE has proved ITL’s strong determination to become a leading logistics firm in Vietnam, contributing to the development of the domestic logistics sector in particular and of the Vietnamese economy in general.

North-South expy project attracts more bidders from S.Korea than China

More investors from South Korea than those from China have submitted bids for eight sections of the North-South Expressway, according to the Ministry of Planning and Investment (MPI) at a press briefing in Hanoi on June 27.

Nguyen Dang Truong, head of the Public Procurement Agency under the MPI, told the local media that the Ministry of Transport (MOT) is directly involved in the execution of the North-South Expressway project, reported Nguoi Lao Dong newspaper.

Currently, the MOT is sending out prequalification documents to those bidders who are keen on the eight subprojects, as part of the big-ticket project, under public-private partnerships (PPP).

“Some 25 domestic investors have so far sent in their requests. The large number of the local investors indicates their strong interest in the project,” said Truong.

With regard to foreign investors, he stressed that any investor, whether at home or abroad, can participate in the bidding process if they meet the requirements of the Bidding Law and have the capacity, experience and feasible solutions.

He said that this is a vital project, and the expressway is an arterial route, so the investors must be truly competent and experienced when chosen.

Regarding the requirements for international investors, he explained that they have to prove their experience with similar projects in a nation that is not their home country. It must be shown that during the execution of these projects, there was no litigation or dispute.

Deputy Minister of Planning and Investment Vu Dai Thang said that many foreign investors from Japan, South Korea and China have submitted bids. “As we know, the number of investors from South Korea is larger than that of China,” he said.

Earlier, the MOT’s PPP Department, told the local media that project management units have sent 120 sets of bidding documents to the interested investors. The deadline for sending in bidding requests is July 10.

Bidders will be put on the shortlist if they meet at least 60% of the requirements. Financial capacity accounts for 60% of the overall score, while experience and methods of execution make up 30% and 10%, respectively.

In the first phase, some 654 kilometers of the 2,100-kilometer cross-country expressway will be split into eight components financed through PPP, while three others will be funded by the Government.

The 11 sections are expected to cost more than VND118.7 trillion (roughly US$5.5 billion), with VND55 trillion coming from the State budget.

Vietnam Silicon Valley Accelerator to invest $40,000 in startups

Vietnam Silicon Valley Accelerator (VSVA) continues to invest in startups this year, with capital of $40,000, double that in 2018, through the “VSV Bootcamp Program Batch 7”.

The VSV Bootcamp Program Batch will be held in July and give startups the opportunity to develop their ideas and models with initial investment and training programs over four months, working directly with expert advisors in the field.

VSVA is committed to working with startups throughout their development and will support the resolution of the operational or strategic problems startups often encounter. Startups to already receive support in their development include Lozi, Schoolbus, Ship60, Hachi, True Juice, Minet, and others.

Startups participating in the program not only utilize VSVA’s available resources such as advisors and co-working space but also receive other support from VSVA’s partner and expert network.

This network includes more than 75 invested startups, more than 60 organizations, and large multidisciplinary corporations ranging from agriculture, finance, education, and communications to artificial intelligence and blockchain, such as VIB International Bank, Lotte Group, Samsung, Microsoft, VTC Mobile, Baker McKenzie, and CocCoc.

VSVA will support startups by building a network of suitable strategic partners, creating a platform to accelerate the growth process.

Programs and activities to connect investors such as FeedBack Day and Demo Day in countries with a growing venture capital industry, such as South Korea and Singapore, have become regular activities to create opportunities for startups to reach out directly to investors and investment funds.

In Vietnam, Demo Day 2018 attracted ten startups and about 100 investors, including professional investors. Startups included Canets, Fresh Deli, Hue Packaging, True Juice, 689Cloud, Turline by Cores, Roborzoid, Handfree, Winme, and Peko Peko. The goal is to provide an opportunity for startups to present their business results and growth potential to investors, thereby establishing a relationship with potential investors and beginning to raise funds. It is also an opportunity for startups to receive feedback from investors and experts to improve their business models.

VSVA is the first business promotion organization established in Vietnam based on valuable research from the Vietnam Silicon Valley Scheme, the first Vietnamese Government project to directly support startups.

Foreign arrivals to Ho Chi Minh City up 10.1% in first half of 2019

Ho Chi Minh City welcomed around 4.2 million foreign visitors in the first half of this year, up 10.1% year-on-year, according to the city’s Tourism Department.

The city received 17 million travellers in the January-June period, including 12.8 million domestic tourists, reaching 40% of its set target for 2019.


In the same period, the city’s hospitality sector earned approximately VND73 trillion (US$3.15 billion) in tourism revenue, an increase of 16.6% against the same period last year.

The city’s Tourism Department will foster and encourage marketing and promotion campaigns and develop more tourist products and services to make the city a magnet for holiday makers.

Accordingly, the department will develop agricultural tourism products in Cu Chi district too, and the ecotourism model in Thanh An commune, Can Gio district.

Ho Chi Minh City is targeted to receive 8.5 million international visitors and 32.77 million domestic visitors in 2019, up 14% and 13% year on year, respectively.

Tourism revenue this year is expected to rise by 14.5% year-on-year to reach VND150 trillion (US$6.46 billion).

Stronger int’l cooperation needed to enhance auditing efficiency

The State Audit Office of Vietnam (SAV) has actively applied international knowledge and experience to better ability of auditors and improve efficiency of its operation in new auditing fields, said Auditor General Ho Duc Phoc.

Speaking at a roundtable conference with development partners jointly held by the SAV and the World Bank (WB) in Vietnam in Hanoi on June 25, Phoc highlighted the role played by the SAV in enhancing the accountability and transparency of the Government in managing public finance and fighting corruption.

According to the Auditor General, the SAV has received strong support, great resources and technical assistance from development partners through technical assistance projects and ODA capital auditing programmes in Vietnam. Its development partners include the WB, the European Union (EU), the Asian Development Bank (ADB), the Canadian Audit and Accountability Foundation (CAAF).

The SAV is focusing resources to complete the goals of the SAV development strategy until 2020 and orientations for the sector in the time to come, he said.

Phoc affirmed the SAV’s commitment and top priority for the above-mentioned activities to develop it into a modern and professional State audit agency.

The SAV appreciated experience from audit agencies in developed countries as well as recent support provided by international organisations, he stressed.

Fily Sissoko, Manager, Governance Global Practice for the East Asia Region at the WB, said the conference offers a good chance for the SAV and its partners to discuss and seek measures to enhance cooperation in a more practical and effective manner in the future.

The WB has two important priorities related to breakthrough technology and environmental auditing, which are in line with Vietnam’s national partnership strategy.

Tran Kim Loc, Director of the SAV’s Department of International Cooperation, said the sector will give priority to establishing new auditing fields which will focus on land, natural resources, minerals and environment-related auditing.

It will also pay due attention to promoting the application of high-technology and information technology in managing and supporting auditing activities.

Unlisted Public Company Market promises investors better performance

The Unlisted Public Company Market (UPCoM) has grown over the last 10 years and become more transparent, attracting increased interest from investors.

UPCoM began operation on June 24, 2009 after the Government and market regulators realised the free-trading stock market had been highly risky for investors.

The launch of UPCoM aimed to tighten the free market and expand the size of the Government-controlled market to gather unlisted companies and make their stocks more transparent, secure and safer for investors.

Since then, many policies have been issued to improve the market's operation.

For example, Decree 60/2015/ND-CP eyes better protection of investors’ benefits by requiring public companies to trade shares on UPCoM, while Circular 115/2016/TT-BTC requires State-owned enterprises to both sell State capital and trade their shares on UPCoM.

The improvement of the legal framework has been a boost to the market's performance. In the first six years of operation, there were only 169 companies on UPCoM with average daily trading value of VND15 billion (US$544,300).

In the last four years, the number of UPCoM-traded firms has increased five-fold to 833 and average trading value has increased 18 times to VND250 billion.

Market capitalisation also rocketed to VND945.8 trillion in the same period. Foreign trading rose to VND16.9 trillion in 2018 from VND157 billion six years before.

According to a Stock Exchange of Thailand official, the development of UPCoM was a lesson for many regional markets.

UPCoM helped public companies test their stocks before moving to the main listed markets (the Ho Chi Minh and Ha Noi stock exchanges) and was a place for SOEs to offload State capital in the most efficient way, he said.

However, UPCoM has encountered some incidents that have raised public concern about the market’s transparency and ability to protect investors.

The worst case involved the Central Mining Joint Stock Company, which used to trade shares on UPCoM under code MTM.

The former leaders of the company falsified its trading portfolio and earned dozens of billions of dong by selling company shares to investors.

That case forced the market regulator to release a list of good-quality stocks and those that were at risk to protect investors.

According to Nguyen Thanh Long, chairman of the management board at the Ha Noi Stock Exchange, UPCoM requirements on companies’ stock trading were not that strict, so about half of UPCoM-traded firms had low levels of transparency.

There were still many small companies recording poor business results and lacking transparency in terms of information disclosure, he told tinnhanhchungkhoan.vn.

The northern market regulator, besides drawing up a warning list on low-quality stocks, has implemented a scoring mechanism to highlight companies with high quality of information disclosure and transparency, he added.

The Ha Noi Stock Exchange plans to ask the State Securities Commission to allow investors and securities companies to do marginal trading on good-quality UPCoM-traded firms to increase the market’s liquidity and prove the market's transparency to investors.

Viet Nam to perfect its legal systems in compliance with new era's demand

Prime Minister Nguyen Xuan Phuc on Sunday attended a national science conference to explore ways of improving the Vietnamese legal system.

His visit was arranged to keep up with the demand of the fourth industrial revolution.

Organised by the Ministry of Justice, leaders of the National Assembly, the Government, relevant ministries, representatives of the start-up community, scientists and law experts were in attendance.

Deputy Minister of Justice Phan Chi Hieu told the conference given the new developments of the technology revolution, the current legal system had revealed many shortcomings, especially in areas related to property rights, intellectual property rights, venture capital, encrypted assets, tax administration, personal data protection, digital signatures and online dispute resolution.

The conference is an opportunity to discuss adjustments needed so Viet Nam can take full advantage of the technology revolution and cope with the challenges it brings.

Three sessions focused on civil and economic laws, the construction of e-government and smart cities and access to justice and assurance of network security.

Speaking in the first session on the need to make improvement on civil and economic laws, Thach Le Anh, Director of Vietnam Silicon Valley said start-ups would face many risks in registration procedures and calling for investment, since currently there is no specific guidance on attracting private capital.

 

“Start-ups spend a lot of their time calling for funding and 90 per cent of their cases fail,” she said.

“In many cases, their failures can be considered as fraud because debts are huge.”

Tackling the problem of legal instructions for raising capital would be great support for start-ups, she added, and would give firm assurances to foreign investors.

She also said "the current law on small-and-medium-sized enterprises is no longer appropriate because of the lack of business models". This resulted in many start-ups having their registration returned or pending.

Le Minh Khiem from the Ministry of Finance said the current tax management model had not caught up with the fourth industrial revolution.

The legal system on tax management had not been synchronised, creating risks for both State management agencies and enterprises, Khiem said.

He added that the ministry was working on new tax policies that are more suitable for new business models, with focus on start-ups, and would submit the proposal to the Government and the National Assembly in the future.

The conference had received many valuable comments from departments, ministries, central agencies, research and training institutions, business community, experts and scientists.

Clean production gets fruity in export

Vietnamese firms can expand exports and reap “sweet fruits” in picky markets by investing in clean production technology, a leading businessman has said.

General director of Aeon Topvalu Vietnam Limited Company Yuichiro Shiotani recently called on local firms to do more to meet strict standards in some export markets.

In the coming year, the value of Vietnamese goods sold into modern retail system Aeon Group (Japan) will likely reach US$0.5 billion and is expected to reach $1 billion in the next five years, according to thoibaokinhdoanh.vn.

However, Shiotani cautioned that Vietnamese suppliers have to invest more in equipment.

Investment needed

Shiotani said once Vietnamese suppliers invest in equipment, they will receive more orders.

As a distributor, Aeon understands the risks businesses face, so he has sent advisers to help businesses invest appropriately in order to receive orders.

Aeon hopes to sign up 2,000-3,000 Vietnamese suppliers which can export products to Aeon’s supermarkets in Japan, Shiotani told thoibaokinhdoanh.vn.

It’s important that Vietnamese manufacturers' production processes meet clean standards, which will require investment, according to Shiotani.

Vo Quan Huy, director of Huy Long An – My Binh Co., Ltd., said that to stabilise exports to picky markets, the State needs to build standards for companies in production development to help them meet criteria set by the purchaser or the standards of the importing country.

Consistency key

According to Huy, firms should be consistent and think for the long-term in meeting standards of importing countries to develop sustainably.

For example, pomelo can be exported to the EU, but some firms have had problems with pesticide residue. To deal with this issue, Huy called for the establishment of a clean growing area to attract enterprises to invest in exports.

Meanwhile, exports of lychees into fastidious markets have improved after firms adopted a clean process. This year, the US Department of Agriculture has granted codes to 18 lychee growing areas in seven communes in Luc Ngan District (Bac Giang Province) with a total area of 217.89ha.

On exports to Japan, with many years experience exporting bananas to the country, Huy said this market consumed a lot but his enterprise was stuck with the problem that workers could not afford to pack bananas in line with Japanese standards.

To conquer a difficult market like Japan, many businesses have decided they must persevere with a clean production process.

In May, Vietnamese firm Seagull Agricultural Development Corporation became the first Vietnamese enterprise granted JAS organic certification by Japan’s Ministry of Agriculture - a very strict certification.

To achieve this certification, the company had to spend three years practicing JAS standards with clean agricultural production process and had to avoid the overuse of chemicals in farming.

Entering global distribution networks good for VN businesses: conference

Entering global distribution networks is something Vietnamese businesses should strive for to take advantage of their highly competitive products, experts told a conference held on April 23 to discuss how they can be a part of AEON Group’s supply chain.

The conference was held by the Japanese company and the Ministry of Industry and Trade's Department of European – American Markets and attended by around 150 businesses that do or aim to do business with AEON.

Yuichiro Shiotani, general director of AEON Topvalu Viet Nam, said while Viet Nam’s exports to Japan are growing, 70 per cent of them are made by foreign-invested businesses.

He hoped to help more Vietnamese businesses become AEON’s suppliers in Viet Nam and export to Japan.

He invited Vietnamese companies to do business with AEON, pointing out that Japan has high import needs and any item that appears on AEON’s shelves in Japan would be considered highly competitive in the global market.

It imported 1,000 tonnes of high-quality basa fish last year from a Vietnamese supplier whose exports greatly increased after making new investments to comply with AEON’s quality standards, he said.

The company is interested in importing more foodstuff, textile and garment and healthcare and household goods.

Nguyen Thao Hien, deputy head of the department, said: “Vietnamese goods do have a competitive edge in the global market, but they face difficulties with branding and consistency in quality.”

There should be enough domestic businesses that can consistently supply goods to global distribution systems, she said.

The ministry aims to help businesses become a part of global distribution systems by improving their competitiveness and product quality and working with banks to improve their finance.

Companies also need to carefully research the quality standards that their foreign markets and distributors require, she added.

Ngo Viet Trung of Phu Bao Company, one of AEON Group’s suppliers, said companies need to be willing to replace their existing production equipment and have tighter management at all stages of production, seek out customer feedback and be socially responsible in order to supply to AEON.

Successfully becoming AEON’s in Japan is a great recognition of brand and quality and would help businesses enter global distribution networks, he said.

AEON Group and the ministry signed a memorandum of understanding last year to support Vietnamese businesses.

By 2020 Viet Nam aims to export US$500 million worth of goods through the company, and $1 billion by 2025.

Forest industry posts trade surplus of more than $4b in H1

The forest industry gained a trade surplus of more than US$4 billion in the first six months of this year, according to the Viet Nam Administration of Forestry under the Ministry of Agriculture and Rural Development.

The export value of forest products in the period reached nearly $5.3 billion, up nearly 20 per cent year on year and reaching 50 per cent of the industry's plan for 2019.

Export value increased steadily in the first six months of the year, said the General Department of Forestry. About 87 per cent of Viet Nam's wood and wood product exports by value went to highly demanding traditional markets such as the US, Japan, the EU, China and South Korea.

Nguyen Quoc Tri, head of the Viet Nam Administration of Forestry, said the nation has maintained its leading position in Southeast Asia in terms of forestry exports. It sits second in Asia and fifth in the world. The country has exported wood products to 120 countries and businesses have returned to the domestic market, providing a push to develop production.

During the first half of the year, Viet Nam planted 108,456 hectares of forest, equal to 51 per cent of the plan for the year. 85 per cent of the planted area has certified origins for its seedlings. The area with origin certificates has produced about 9.7 million cu.m of timber, up 4.86 per cent year on year.

The quality of domestic production continues to be improved to meet export requirements, according to the administration.

Tri said that so far this year, the agriculture and forestry sectors have faced many difficulties due to weather, deforestation and low awareness of the economic value of forest development.

The administration expected export performance to improve in the second half of the year as many businesses already have export orders. Tri said the administration is anticipating the industry will have a total export value of $11 billion for the whole year.

For the rest of this year, the administration will urge localities to complete targets on sustainable forest development, management and protection to provide quality timber for export and the domestic market. It will also focus on implementing the restructuring plan for the sector.

The Ministry of Industry and Trade and the Ministry of Finance will work to stop trade fraud by export firms and closely control timber imported from countries with high rates of illegal logging.

According to the administration, the Voluntary Partnership Agreement on Forest Law Enforcement, Forest Governance and Trade (FLEGT), in effect from June 1, will support co-operation between Viet Nam and the EU in resolving illegal logging and trade promoting trade, and developing the local forestry industry. So far, 237,386ha of forest land in Viet Nam have gained the sustainable management certification.

Contracts inked to step up gas, power projects in southern region

The PetroVietnam Gas Joint Stock Corporation (PV Gas) on June 24 signed contracts on the building of a liquefied natural gas (LNG) warehouse and the provision of the product for two thermal power plants.

At the signing ceremony in Hanoi, PV Gas inked an engineering, procurement and construction contract for the Thi Vai LNG warehouse, located in the southern province of Ba Ria-Vung Tau, with Samsung C&T and the PetroVietnam Technical Services Corporation.

Meanwhile, PV Gas and the PetroVietnam Power Corporation (PV Power) signed a framework contract on the LNG supply and consumption for the Nhon Trach 3 and 4 power plants, based in the southern province of Dong Nai.

PV Gas Director General Duong Manh Son said a shortage of the product is forecast for the coming years, especially in the southeast – a major economic region. Therefore, to ensure gas supply for existing and new power projects, PetroVietnam and its members are implementing chains of gas-power projects using imported LNG.

Among them, the chain of Thi Vai LNG – Nhon Trach projects consists of the Thi Vai LNG warehouse and the Nhon Trach 3 and 4 gas-fired power plants.

The Thi Vai LNG warehouse is set to handle 1 million tonnes of LNG each year after the first phase, invested with some 286 million USD, is completed in 2022. Its capacity will be raised to deal with 3 million tonnes of LNG annually in the second phase, which is expected to finish in 2023.

Deputy Director General of PetroVietnam Le Manh Hung said the group is also directing its PV Power to implement the Nhon Trach 3 and 4 thermal power plants. Each of these plants will have a capacity of around 750 MW and be fuelled mainly with LNG provided by the Thi Vai LNG warehouse.

Covering about 34.5ha of land, the two factories are invested with over 1.4 billion USD. While Nhon Trach 3 will become operational in the fourth quarter of 2022, Nhon Trach 4 is hoped to be put into use in the fourth quarter of 2023.

The operations of the Thi Vai LNG warehouse and the two Nhon Trach power plants will help meet the growing gas and electricity demand in the southeastern region, Hung said.

EVFTA, EVIPA deepen Vietnam-EU trade ties: seminar

The EU-Vietnam Free Trade Agreement (EVFTA) and the EU-Vietnam Investment Promotion Agreement (EVIPA) will help promote the comprehensive partnership and trade relations between Vietnam and the EU, as heard a seminar held in Brussels on June 24.

The event, organised by the EGMONT- the Royal Institute for International Relations in collaboration with the EU-Vietnam Business Network, took place in the context that both sides are accelerating the signing of the two trade pacts, hoping that they will be inked by the end of this month.

In his remarks, Vietnamese Ambassador to Belgium and head of the Vietnamese mission to the EU Vu Anh Quang stressed that Vietnam has worked to meet commitments related to labour standards stipulated in the EVFTA.

The EVFTA and the EVIPA are ambitious trade deals between the EU and a developing nation based on legal regulations, he said, adding that under the EVFTA, 99 percent of tariff lines will be removed, and many other non-tariff barriers will be reduced for both sides, while the EVIPA helps protect and enhance EU investments in Vietnam, making the Southeast Asian country become a proactive trade and investment hub of the EU firms in the region.

Scholars at the event said that commitments under the two deals are important to improve the market mechanism and investment climate with a view to facilitating business of EU enterprises. Thus, they agreed that the two pacts are considered as important legal frameworks to bolster trade and investment relations between the two sides.

Some EU firms who have run successful business in Vietnam shared their investment experience, and discussed attractive trade opportunities in the market.

As one of the fastest growing economies in Southeast Asia, Vietnam has become a promising destination for European businesses. Both Vietnam and the EU have seen huge potential in trade exchange across the field of automobile, industrial machine, sewage treatment, food & beverage, pharmaceuticals, garment and textiles, among others.

Vietnam, UK seek to foster trade, investment links

A memorandum of understanding (MoU) to promote relations between Vietnamese localities with UK partners, towards strengthening trade and investment cooperation between the two countries was signed in London on June 24.

The signatories were representatives of the Ministry of Foreign Affairs and the UK Asia House - the independent organization advising governments, public academies and private organizations to promote political, economic and trade ties between Europe and Asia.

The signing was witnessed by Vietnamese Ambassador to the UK and Northern Ireland Tran Ngoc An, and representatives from Yen Bai, Lang Son and Dak Lak provinces , and a number of Vietnamese enterprises.

The two sides agreed to cooperate in organising events, roundtable conferences, and forums on economic and business development of the two countries, helping UK and Vietnamese enterprises to seek ways for expanding business and investment cooperation in both nations.

Speaking at the signing ceremony, Asia House CEO Michael Lawrence said the organisation’s top priority is to enhance economic cooperation with Asia, expressing his hope that Vietnam, as the Chairman of ASEAN in 2020, will work closely with Asia House to promote cooperation between the UK and ASEAN countries.

Vietnam, with an annual average economic growth of over 6 percent in the past few years, has attracted increasing attention from UK firms, he noted.

The same day, the Vietnamese Embassy and the British University Vietnam (BUV) signed a MoU on coordination to promote scholarships funded by the BUV for Vietnamese students in the UK to pursue financial and banking sectors at the BUV in the 2019-2020 academic year.

MARD plans to develop more quality plant and animal breeds

The Ministry of Agriculture and Rural Development (MARD) will continue to develop breeding sources for the agriculture sector according to the needs of the market, said Minister of Agriculture and Rural Development Nguyen Xuan Cuong at a workshop held on June 24 to review the seed production plan.

Breeding and seed stocks are very important to farmers, and Vietnam has gained many achievements in breed development as well as the application of scientific advances in agriculture sector, according to the minister.

He said that while Vietnam was integrating into the international economy, the transfer of breeds needed to be encouraged. He said agriculture units needed to have plans to export breeds.

The minister said there was still an imbalance between State-owned firms and the private sector in this area.

“The State-owned agriculture institutes and schools have a lot of professors and doctors, with relatively adequate facilities while the private sector has a shortage of these," he said. "But coordination among the parties in breed development is ineffective."

Market adaptation had not been high, he said, and had focused too much on rice varieties, while many other crops such as vegetables, potatoes and flowers were still imported in large quantities. The Government and agriculture businesses should do a better job of integrating into international systems in this area, he added.

According to Nguyen Van Viet, Director of the MARD’s Planning Department, many new breeds have been created and applied on a large scale, helping to increase productivity, quality, efficiency and incomes for farmers.

Nearly 10 years after the development scheme began nearly 1,000 varieties of plants and animals have been put into production.

Productivity of many crops and livestock has been increased beyond the scheme's target of 15 percent. Over the course of the scheme, maize productivity increased by 16 percent, oranges by 25 percent, longan by 26 percent, tea by 22 percent, coffee by 20.5 percent, tra fish by 22 percent, and pork by 32 percent.

The agriculture minister said that while progress had been impressive, there was more work to do.

In order to improve the nation's capacity for research, production and management of plant and animal breeds and encourage investment in this area, MARD had asked the Prime Minister for permission to develop another development scheme for the 2021-30 period, Cuong said.

The aim of the project was to increase the use rate of advanced technical varieties in agricultural production to improve productivity and quality and allow the industry to continue to grow.

The plan was expected to help put 500-700 new breeds of plants and animals into production.

The ministry would also increase investment in research institutes, enterprises, agencies, organisations and individuals to produce seeds with high productivity, quality and adaptation to climate change.

Oil & petrol exports exceed 311,000 tonnes in May

Vietnam shipped more than 311,000 tonnes of oil and other petrol products in May for 191 million USD, up 1.9 percent in quantity and 2.3 percent in value compared to April.

According to the General Department of Vietnam Customs, the figures had risen consecutively from March.

In the first five months of 2019, the exports amounted to 1.45 million tonnes, reeling in about 901 million USD, marking annual increases of 14 percent in both amount and revenue.

During the period, Singapore, the 5th biggest importers of the products, bought 71,124 tonnes worth 29.98 million USD. As such, it recorded the highest growth among key export markets of Vietnam against last year, at 861 percent in quantity and 865 percent in value.

 
 
 
 
 
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