BUSINESS NEWS SEPTEMBER 19

PM Phuc to deliver keynote address at Vietnam Reform and Development Forum 2019

The Viet Nam Reform and Development Forum themed “Viet Nam: Aspiration for Prosperity – Priority and Action” is scheduled to take place in Ha Noi on September 19.

The forum will be held by the Ministry of Planning and Investment in collaboration with the World Bank, AusAID and Viet Nam’s development partners.

Prime Minister Nguyen Xuan Phuc is expected to deliver his keynote address at the plenary session of the forum with three sessions: Heading towards modern and integrated market economy institutions; Innovation to overcome middle-income trap; and Action for a prosperous Viet Nam.

This year’s agenda will be more inclusive than the previous forums, ranging from institutional reforms to innovation in order to figure out priorities and actions for Viet Nam to achieve future prosperity, according to Nguyen Chi Dung, Minister of Planning and Investment.

Dung said leading experts have shared with Viet Nam about new approach to improve national competitiveness through transparent tax and monetary policy, transparent institutions as well as social harmonization.

They recommended that Viet Nam should pursue innovation-based economy with a focus on human and infrastructure development, improvement of productivity, and building a resilient economy in which all people could benefit from development process, he added.

According to the United Nations Development Program, Viet Nam’s research and development expenditure only accounts for 0.19 GDP compared to 2% of China and 3% of Japan, generating direct impact on productivity.

Besides, Viet Nam is one of the most vulnerable countries to climate change and it is forecasted that climate change will result in economic loss for at least 2.5% to 4% of the national GDP.

In term of education, foreign experts recommended Viet Nam should step up investment in training innovation skills, Dung said.

Dung expressed his belief that the above examples shows Viet Nam needs to seriously take into account recommendations from the forum in order to fix legal loopholes and related matters.

The outcomes of the forum will serve as input for the Government to design socio-economic development strategy for the next decade, he added.

Asanzo resumes operation, opens another factory
 

BUSINESS NEWS SEPTEMBER 19

CEO of Asanzo Pham Van Tam (centre) and the firm's officials host a press conference in Ha Noi on September 17.

CEO of Asanzo Vietnam Electronics JSC, Pham Van Tam announced in Ha Noi yesterday that his business was "vindicated" and would return to operations from September 17.

At a press conference held by television maker Asanzo, lawyer Tran Duc Hoang said the media accused Asanzo of origin fraud and cheating customers but the General Department of Market Management reported it had found no evidence of fraud in the company’s origin of goods after their investigation.

In addition, Hoang added that the Vietnam Chamber of Commerce and Industry (VCCI) concluded that Asanzo did nothing wrong with the labelling “Made in Vietnam".

According to VCCI, it is legal to label a product "made in Vietnam", "manufactured in Vietnam", "country of manufacture of Vietnam", "origin of Vietnam" or "manufactured by Vietnam" if the product is assembled from components which are purchased in Viet Nam or imported from other countries.

Hoang continued: “The General Department of Customs has granted their Post-Clearance Inspection for Asanzo products, showing that Asanzo has done nothing wrong in its import and export activities."

Answering the accusation of false advertising for Asanzo’s slogan of "Japanese technology", Asanzo said it got permission from the Department of Culture, Sports and Tourism of HCM City for the ad. In addition, Sharp Roxy Hongkong, a subsidiary of Japanese Sharp Group declared to have a business contract with Asanzo, including the sale of electronic components, software transfer, technology and know-how, along with their services.

CEO of Asanzo Tam said: “As of today, we resume our normal operations and will open another factory in the high-tech industrial zone on HMC City’s district 9 soon.” Tam revealed that the fifth factory with a capacity of 2 million - 2.5 million televisions per year will be 4 times bigger than the others.

When asked why the company announced the conclusion of other authorities who had not revealed the results to the public, Tam said: “We cannot wait any more, we want to come back to the market.”

In the 89 days since the case occurred, Tam’s company lost more than VND1 trillion (US$43 million) excluding the cost of brand building over the last 5 years. According to the CEO, it would take another VND1 trillion ($43 million) or more to rebuild the trademark of Asanzo in the market.

Local media in June reported Asanzo had set up operations to import parts from China for assembly in Viet Nam. Their workers then allegedly removed the 'Made in China' stamps, assembled them into finished products and labelled them 'Made in Vietnam'.

CEO Pham Van Tam denied the accusation on June 23, saying 70 per cent of the products’ parts came from China and other countries as Viet Nam was unable to produce them. It is a common practice employed by many other companies.

The market backlash has been devastating for the company with major retailers taking their goods off the shelves and consumers calling for a boycott of the brand.

Established in 2013 to serve the low-income segment in Viet Nam, Asanzo sells mobile phones and home appliances such as air conditioners, microwaves, cookers and blenders, with TVs its key product line.

Gaming firm VNG loses entire investment in Tiki

E-commerce platform Tiki’s losses have wiped out a total of VND506 billion ($22 million) gaming firm VNG had invested in it.

As of June 2019, VNG had suffered a cumulative loss of $22 million of its 24.6 percent shareholding in Tiki, according to the gaming firm’s recently released audited semi-annual financial statement.
In accordance with current accounting practices, the value of VNG’s investment in Tiki is now effectively zero.

Tiki JSC started off as an online bookstore in 2010 before venturing into e-commerce. Just six years later, the firm was valued at $45 million, following domestic tech firm VNG injecting some $17 million in a 38 percent stake acquisition deal, which was then the largest shareholding in Tiki.

However, by June 30 this year, VNG’s stake in Tiki had fallen to 24.4 percent after JD.com, China’s second-biggest e-commerce firm behind Alibaba, made a series of investments for undisclosed sums to raise its ownership to 25.65 percent.

Tiki, like other e-commerce giants in the Vietnamese market, has been struggling to make profit for years due to high operational costs in a competitive market.

Tiki has reported losses totaling VND380 billion ($16.4 million) in 2016 and 2017. Tiki made a record loss of VND757 billion ($32.75 million) last year, of which VND254 billion ($11 million) was attributed to VNG.

Founded in 2004, VNG provides online games, music streaming and messaging applications.

Lang Son aims to attract $3.43b in investment

The northern border province of Lang Son plans to sign memorandums of understanding on more than 100 projects worth nearly VND80 trillion (US$3.43 billion) at the upcoming investment promotion conference to be held here later this month.

The announcement was made by the Provincial Committee vice chairman Nguyen Cong Truong during a press conference in the capital on Monday.

The province will also introduce a list of 37 projects in need of investment capital for the 2019-25 period to domestic and foreign investors during the upcoming conference, according to Truong.

Among these projects, eight are related to transport and urban infrastructure, nine to trade, tourism and services and nine to agro-forestry-fisheries.

He added his province was committed to facilitating investors, offering them a number of incentives, towards creating a transparent, healthy and stable business environment.

The locality was adjusting the provincial socio-economic development master plan, the Dong Dang Border Economic Zone master plan, and stepping up administrative reform.

The locality would also focus on three prioritised sectors including infrastructure construction, trade, services for import-export and tourism, as well as agriculture, the vice chairman noted.

Director of the provincial Department of Planning and Investment Nguyen Huu Chien said Lang Son offered tax reductions and exemptions as well as preferential land rent as regulated by the Government.

It also provided water, electricity and road infrastructure worth no more than VND10 billion for each project, and focused on administrative reform and site clearance, he said.

The local economy grew by 8-9 per cent for the 2011-18 period, with agro-forestry accounting for 20.3 per cent, industry-construction 19.7 per cent and services 49.78 per cent.

The province set the goal of achieving 8-9 per cent growth in gross regional domestic product (GRDP) by 2020, with agro-forestry making up 19-20 per cent, industry-construction 20-21 per cent, and services 60-61 per cent, and per capita GRDP of $2,600-$2,700.

As of August 2019, Lang Son had 42 valid foreign-invested projects, worth $238 million, ranking 48th among 64 localities receiving foreign investment, statistics from the Foreign Investment Agency revealed.

Vietnamese produce struggle to enter China

Agriculture exports to China dropped 9.2 percent year-on-year in January-July as exporters failed to meet tightened quality standards.

The agriculture export value has fallen to $3.8 billion, with rice falling 67.5 percent to $159.4 million and vegetables and fruits dropping by over 8 percent to $1.6 billion, said Tran Thanh Hai, deputy head of the export-import department under the Ministry of Industry and Trade.

The decline has happened after China began tightening its quality and safety standards for imports since earlier this year, he said at a recent forum.

For example, bananas need to be boxed with Chinese labels, or watermelons need to have codes to trace origins, he said, adding that some fruits are only allowed to be imported through specific border gates.

China had announced these regulations in mid-2018 but many businesses did not pay attention, Hai added.

"The new standard is an inevitable global trend. Many other countries are also tightening their import regulations."

However, Vietnamese businesses still operate in small scale and are unable to meet higher quality standards.

Minister of Industry and Trade Tran Tuan Anh said many Vietnamese agriculture exporters to China were unprofessional and depended on unofficial channels.

Many of them are small businesses who are not up to date with the latest information and do not have a stable source of supply, leading to produce being stuck in the country, he added.

Le Hoang Oanh, head of the Asia-Africa market department under the trade ministry, said that it was necessary to make plan to produce each type of agricultural produce for certain export markets on the basis of studies done on the market size, consumer tastes and global trends.

"Exporters need to abandon the mentality of considering China as an easy market, shifting unofficial exports to official, improve fruits quality and facilitate origin traceability."

There are nine Vietnamese fruits allowed to enter China through official channels: dragon fruit, mango, logan, litchi, rambutan, banana, watermelon, jackfruit and mangosteen.

Between January-July, the U.S. replaced China as the top buyer of Vietnamese agriculture produce, according to Ministry of Agriculture and Rural Development data.

Luxury cellphone Vertu returns to Vietnam

After a two-year hiatus, British luxury phone maker Vertu has announced resumption of sales at its Ho Chi Minh City store next month.

Vertu Vietnam, a local unit of the phone maker, said genuine Vertu phones will once again be sold in Vietnam, first from an District 1 outlet in Ho Chi Minh City in October, then a Hanoi outlet the following month.

Vertu luxury cell phones had been sold in Vietnam since 2006 by electronics distributor FPT Trading, formerly known as FPT Telecom Products Distribution Co., Ltd., through three outlets in Vietnam. In late 2017, the stores closed after Vertu ceased production in the U.K.

The company had filed for bankruptcy in its home country, having racked up debts of some £138 million, but its business was still thriving in Vietnam.

A representative of FPT Trading said that when Vertu’s U.K. factory was shut down, customers in Vietnam were still ordering its super-luxury phones.

Vertu will now distribute its phones through Vertu Vietnam, a Hanoi headquartered company established in May 2019.

Before Vertu announced its return to Vietnam, traders had observed that demand for Vertu handsets in the country had never died down.

"Normally, we rarely see Vertu phones, but in events or places with lots of rich people, you can find 80-90 percent of them using them. For them, the latest technology is not a top priority. They use Vertu because of the phone’s anti-tapping protection features, the brand name and the fact it is crafted from luxury materials," said Nguyen Phi Dung, a dealer in luxury hand-carried Vertu phones.

Models that cost between VND100–150 million ($4,300 - $6,450) used to be the most popular, but customers have even bought handsets costing VND500 million to over VND1 billion ($21,500 - $43,000), Dung added.

Vertu was founded by Finnish phone-maker Nokia in 1998, but changed hands several times later. In 2012, it was sold to Swedish investment corporation EQT; and in 2015 to Hong-Kong based investment fund Godin Holdings.

In March 2017, Vertu was sold to Baferton Ltd., owned by Turkish businessman Hakan Uzan. However, just four months later, Uzan had to close Vertu’s U.K. factories, having failed to save it from bankruptcy.

However, in October last year, Vertu made an unexpected return to China with a new Aster P, priced at $5,167 for black and white models, and $14,146 for its yellow model.

Russian firms come looking for business in Viet Nam

A delegation of executives from 20 Russian companies in the agricultural and technology sectors met with executives from 60 Vietnamese companies in HCM City on Tuesday to explore business opportunities.

The Russian companies are mainly in sectors like processing and trading of agricultural products such as natural fruit juices, wines, confectionery, fast moving consumer products, sunflower oil and seeds, legumes, grains, sugar, wheat flour, barley flour, data solutions for accounting and business operation, automated production, and high-tech equipment for aviation.

Semernya Nikolay, project director of Belyov Pastila LLC, said his company wanted to introduce pastila made from sourish Russian apples and other products to the Vietnamese market.

They are available in some 40 markets but not Viet Nam, and he has come to study the Vietnamese market and seek customers.

Vadim Gvozdkov, product manager of IT-Trader-Soft LLC, said his company wanted to introduce its Pirogov interactive anatomy table, which is a fusion of medicine and the latest computer technologies such as anatomy in 3D format, which allows one to visually examine human organs in colour and do differential diagnostics.

It is an innovative educational product with unique human anatomy data content, and using the software in education at medical universities would help reduce costs compared to using mummified bodies, he said.

He said six medical schools and hospitals in Viet Nam were interested in the technology.

Andrey Naryshkin, director for international network development at the Russian Export Centre, said Viet Nam and Russia had a close traditional friendship and co-operation in many fields.

The Viet Nam-Eurasian Economic Union Free Trade Agreement, which took effect in 2016, had sharply increased bilateral trade, with the figure reaching US$6 billion last year, he said.

But the figure was low compared to the potential, and such business-matching events could boost trade, he said.

“Russian agricultural products are safe and healthy. Consumers in many countries prefer its agricultural as well as technological products. Therefore, I believe Russian products will have a foothold in the Vietnamese market.

“In addition to supporting Russian firms export to the Vietnamese market, we also support Vietnamese companies who want to invest in production in Russia and export their products to third countries.”

Russian fair offers opportunities for Vietnamese garment, textile products

Eight Vietnamese garment and textile firms are joining more than 2,00 foreign peers at the 53rd Federal Wholesale Fair of Goods and Equipment for Textile and Consumer Goods Industries (Textillegprom 2019) which is taking place at the All-Russian Exhibition Centre on September 17-20.

Vietnamese booths, which are showcasing jackets, jean clothes and sleepwear, attracted many Russian entrepreneurs who came to seek cooperative opportunities on the opening day.

According to Vice Chairman of the Vietnam Textile and Apparel Association (VITAS) Truong Van Cam, this is the third time Vietnamese firms have attended the fair, and it has helped the enterprises get access to potential markets and customers.

Trade promotion programmes have brought back efficiency as many garment and textile firms have secured contracts to export their products through similar fairs, he said, expressing his hope Vietnamese firms will be successful at the Textillegprom 2019.

Responding to Vietnam News Agency’s correspondent, Trade Counsellor of Vietnam in Russia Duong Hoang Minh affirmed the country’s shipments to Russia have enjoyed robust growth since the free trade deal between Vietnam and the Eurasian Economic Union (EAEU), of which Russia is an important signatory, came into force in 2016.

Particularly, export revenue of garment and textile rose 7 percent year-on-year to 179.9 million USD last year. In the first seven months of this year, the value reached 154.2 million USD, surging 60 percent year on year.

Minh stressed Vietnam gained some 180 million USD from garment and textile shipments to Russia, accounting for only 3 percent of the latter’s import revenue. Therefore, Vietnamese firms need to study Russian market and seek customers.

Textillegprom is the biggest exhibition of goods and equipment for textile and consumer goods industries Russia and the Commonwealth of Independent States (CIS). This year’s event is expected to welcome over 37,000 visitors, who are whole sale buyers and industry experts, and features research and training conferences, workshops and roundtable discussion.

After attending the Textillegprom 2019, the Vietnamese firms will continue to look for partners in Moskva and St.Peterburg until September 25.

Russian fair offers opportunities for Vietnamese garment, textile products

Eight Vietnamese garment and textile firms are joining more than 2,000 foreign peers at the 53rd Federal Wholesale Fair of Goods and Equipment for Textile and Consumer Goods Industries (Textillegprom 2019) which is taking place at the All-Russian Exhibition Centre on September 17-20.

Vietnamese booths, which are showcasing jackets, jean clothes and sleepwear, attracted many Russian entrepreneurs who came to seek cooperative opportunities on the opening day.

According to Vice Chairman of the Vietnam Textile and Apparel Association (VITAS) Truong Van Cam, this is the third time Vietnamese firms have attended the fair, and it has helped the enterprises get
access to potential markets and customers.

Trade promotion programmes have brought back efficiency as many garment and textile firms have secured contracts to export their products through similar fairs, he said, expressing his hope Vietnamese firms will be successful at the Textillegprom 2019.

Responding to Vietnam News Agency’s correspondent, Trade Counsellor of Vietnam in Russia Duong Hoang Minh affirmed the country’s shipments to Russia have enjoyed robust growth since the free trade deal between Vietnam and the Eurasian Economic Union (EAEU), of which Russia is an important signatory, came into force in 2016.

Particularly, export revenue of garment and textile rose 7 percent year-on-year to 179.9 million USD last year. In the first seven months of this year, the value reached 154.2 million USD, surging 60 percent year on year.

Minh stressed Vietnam gained some 180 million USD from garment and textile shipments to Russia, accounting for only 3 percent of the latter’s import revenue. Therefore, Vietnamese firms need to study
Russian market and seek customers.

 

Textillegprom is the biggest exhibition of goods and equipment for textile and consumer goods industries Russia and the Commonwealth of Independent States (CIS). This year’s event is expected to
welcome over 37,000 visitors, who are whole sale buyers and industry experts, and features research and training conferences, workshops and roundtable discussion.

After attending the Textillegprom 2019, the Vietnamese firms will continue to look for partners in Moskva and St.Peterburg until September 25.

Dong Nai proposes 8 solar power projects on Tri An lake

Authorities in the southern province of Dong Nai have proposed the Ministry of Industry and Trade consider adding eight local solar power projects on Tri An lake to the national power development plan by 2025.

Spanning over 7,100 ha of water surface across different districts, these projects are estimated to have total capacity of generating 5,400 MWp.

Vo Tan Nhan, director of the Tri An hydropower company, said the new facilities will help tap the area’s potential for renewable energy, cut electricity losses and ease power shortages during peak times,
particularly in dry season.

However, the environmental impact of the projects must be considered, as Tri An lake supplies 70 percent of water demand in Vietnam’s southeast region.

Tri An, a man-made lake that stores water for the Tri An Power Plant in Dong Nai, has a total area of 323sq.km.

By the end of June 2019, Vietnam had 89 wind and solar power plants with combined capacity of 5,038MW, accounting for 9.5 percent of the country’s total power capacity.

Renewable energy experts said the country’s central and southern regions have potential to develop rooftop solar systems with solar radiation of 4.2 to 4.8kWh per sq.m per day.

Korean firms up instant noodles investment in Vietnam

Korean instant noodle firms Nongshim and Ottogi are increasing their Vietnam investments with an eye on Southeast Asia as a whole.

"Vietnam will be positioned as a base for advancing into Southeast Asia," Korea Times quoted a Nongshim official as saying. Nongshim, a leading Korean instant noodle maker, established its first subsidiary in Vietnam last October.

Nongshim Vietnam reported $2.53 million in sales and around $135,000 net income in the first six months of this year.

The Nongshim source said that even though instant noodle sales in Vietnam is weaker in comparison to China, the US, Japan and Australia, the country with a population of nearly 100 million was "growing fast."

A report by market research firm Kantar Worldpanel also said that this year, as of June 16, a Vietnamese person in rural areas consumed 56 packs of instant noodles on average, up 5 percent year-on-year. The corresponding figure in urban areas was 36 packs, up 4 percent.

Around 90 percent of Vietnamese households bought instant noodles in that period, it said.

Ottogi is also on the same path. The company, which specializes in condiments, already has one production facility in Hanoi, is considering a second plant near the capital, depending on the sales of their ramen products in Vietnam.

An Ottogi official said strained bilateral ties with China is prompting the company to shift its focus to Vietnam to "make inroads into Southeast Asia."

"Vietnam meets the company’s requirements of having a large consumer base, rapidly rising incomes and a love for spicy food," the official said. It now aims to improve local distribution and expand sales to supermarkets and convenience stores.

It plans to partner with South Korean retailers like E-mart and Lotte Mart to boost sales and brand awareness.

Both brands believe Vietnam is a promising and potential market.

Vietnam was the world’s fifth largest instant noodles consumer last year with 5.2 billion servings, a 2.8 percent increase from 2017, according to the World Instant Noodles Association.

EY Vietnam: Enterprises should actively manage tax risk

More than 400 representatives from different businesses in Vietnam participated in the 2019 Tax Symposium on “How to better accommodate an increasingly stringent tax administration system driven by digitalisation” organised by EY Vietnam and Vietnam CFO Club.

Vietnam’s tax agency has just made remarkable changes in policies, especially in tax administration reforms. The recent tax regulatory amendments aim at reducing tax compliance costs and increasing the information technology application for businesses to better comply with tax regulations.
The revised Tax Administration Law, passed by the National Assembly on June 13, 2019, will take effect from July 1, 2020. The Law introduces some new regimes on the implementation and management of taxes on the internet platform (e-tax). Accordingly, for the first time, the law sets regulations on e-invoices will be effective from July 1, 2022. It requires goods sellers and service providers to issue e-invoices to buyers. Sellers’ computers for invoice calculation and e-invoices issuing, if used, must be registered and connected with the tax authorities’ data system.

The Law, for the first time, introduces tax administration rules for e-commerce activities. Foreign suppliers running e-commerce businesses, but having no permanent establishment in Vietnam, are obliged to register, declare and pay taxes in the country. In addition, commercial banks are responsible for withholding and making tax payments on behalf of overseas businesses and individuals conducting e-commerce activities and deriving income from Vietnam.

Beside the tax policy changes and administration reforms, tax inspection and examination activities are expected more effective, gradually. The focuses of the State Inspectorate in the coming time are inspecting businesses whose tax contribution is potentially significant, and enhancing after-tax-returns examinations, especially at businesses that have inter-company transactions and signal of transfer pricing issues.

“The inspection activities will be more effective given the aid of advanced technology,” said Huong Vu, general director, EY Consulting Vietnam. “As the tax authorities’ management have become more effective, businesses must be better compliant to avoid tax penalties and back taxes."

According to Huong, being affected by trade wars, political instability, the world economy’s volatility and rapid technology advancement, countries are using tariffs as major weapons to reestablish trade fairness. However, they also create direct pressure on businesses and require them to restructure their global value chain and supply chain.

Changes in the global business environment, together with newly issued regulations and guidance on corporate tax obligations, have been substantially affecting many business activities in Vietnam. Companies should properly invest the right resources in order to meet and comply with new regulations, as well as to avoid tax risks,” she said.

At the Tax Symposium 2019, concerns about new regulatory compliance, especially e-invoicing, transfer pricing and personal income tax were answered by experts from EY Vietnam with practical experience in dealing with corporate tax, tax risk management, plus the preparation for tax inspections.

Vietnam to start importing natural gas in 2021

Vietnam has to import 1-4 billion cubic meters of liquefied natural gas a year in 2021-25 to meet the growing power demand.

Phung Van Sy, an official of the Ministry of Industry and Trade's coal and oil department, announcing this at a conference Thursday, said the imports would rise to 6-10 billion cubic meters from 2026.
The reason is Vietnam’s current gas production capacity of 8 billion cubic meters a year would start declining from 2023, he added.

Doan Hong Hai, an official of the ministry’s department of electricity and renewable energy, said Vietnam plans to triple its gas-fired power generation capacity from 7,200 MW now to 19,000 MW by 2030, which means it would need 22 billion cubic meters a year by then, with 50 percent imported.

Vietnam is set to follow other countries in Southeast Asia in importing LNG. Thailand was the first to import in 2011, while Indonesia, a former exporter, will start importing after 2020.

The country’s rapidly growing economy makes it hungry for power as its hydropower potential has almost been fully exploited and oil and gas and coal reserves are running low.

It is set to face power shortages as early as next year since many projects are being delayed, the trade ministry said in June.

Vietnam would need to raise $150 billion by 2030 to develop its energy sector as demand is set to grow by 8 percent a year for the next decade, the World Bank said last year.

Opportunities for HCM City’s supporting industries discussed

A conference was held in Ho Chi Minh City recently to discuss the growing market opportunities for the city’s supporting industries.

Pham Lien Anh, a senior expert of the International Finance Corporation (IFC), said the IFC has been sponsoring a Vietnam Supplier Development Programme, which is helping businesses improve their capability, move up the value chain and work with more foreign and multinational companies.

The programme was launched to keep existing FDI and attract new investors who have modern technology, and provides a comprehensive evaluation of participating businesses' operation and consultancy, she said.

Ngo Bao Anh, a representative of Panasonic Vietnam, said the company exports components from Vietnamese suppliers to its factories abroad, adding that it focuses on competitive suppliers who meet corporate responsibility requirements.

Jun Choi, country director of Coex, a Korean exhibition organiser, said there are numerous business groups and centres that provide information which could enable Vietnamese companies to network with businesses in Korea and elsewhere.

Nguyen Phuong Dong, Deputy Director of the city’s Department of Industry and Trade, said amid the benefits and challenges brought by free trade agreements, the city has also been organising training sessions and networking opportunities for industries, including supporting industries sector.

It is also seeking permission from the Government to build a new 300ha industrial park.

It needs to develop the industrial sector to attract investment and its businesses need to be part of the supply chains of global companies.

Electric wire and cable exports hit over US$1 billion over eight months

Vietnam's electric wire and cable exports brought in US$1.173 billion during the first eight months of the year, representing an annual increase of 5.8 per cent, according to statistics released by the Ministry of Industry and Trade.

During July alone, US$164 million was made from the export of the items.

In August, electric wire and cable exports reached US$185 million and high growth could be seen in the export of the products to China.

Furthermore, Japan and other Southeast Asian countries were also the country’s largest buyers of electric wires and cables.

In addition to these markets, the first half of the year saw Australia spend US$5.05 million on importing electric wires and cables from Vietnam.

The country is now home to more than 200 FDI and domestic firms which specialise in producing and exporting electric wires and cables.

Hanoi develops craft village tourism

BUSINESS NEWS SEPTEMBER 19

Chuon Ngo village in Phu Xuyen district is famous for sets of wooden furniture which are exquisitely inlaid with mother of pearl and worth up to billions of VND.

Hanoi is home to 1,350 craft villages, which is favourable condition for the capital city to develop tourism.

The most popular ones among both domestic and foreign tourists are Bat Trang pottery village in Gia Lam district, Van Phuc silk village in Ha Dong district, and Chuon Ngo mother-of-pearl inlay village in Phu Xuyen district.

Located in an area rich in clay, Bat Trang village enjoys advantages of ingredients to create fine ceramics.

Moreover, lying on a bank of the Red River between Thang Long and Pho Hien, two ancient trade centers in the north of Vietnam during 15th-17th century, Bat Trang’s ceramics were favourite products not only in domestic but also foreign markets thanks to Japan, Chinese and Western merchant boats.

In the 18th and 19th century, due to the foreign trade restricting policy of the administration of Trinh lords who ruled the north of the country, it was difficult for pottery products in Vietnam to be exported to foreign countries, and some famous pottery-making villages like Bat Trang and Chu Dau (Hai Duong province) experienced a hard time.

Since 1986, thanks to economic reforms and development, more attention has been vested in the village and the world gets a chance to know more about Vietnamese porcelain through the import of many high quality Bat Trang’s ceramic products.

Bat Trang ceramics are produced for daily household use such as bowls, cups, plates, pots, and bottles as well as for worshipping or decoration purposes.

Nowadays, artists bring into ceramics many innovations in production techniques, and creativity in products’ features, giving birth to many new products, and even daily household items may have the beauty like decoration ones.

Meanwhile, Van Phuc silk village is located about 10km west of downtown Hanoi on the Nhue River. It is known far and wide as the cradle of the finest silk in Vietnam.

Van Phuc silk products were particularly popular during the Nguyen Dynasty (1802-1945) which used them to dress the royal family and aristocrats.

Not only prominent in the domestic market, the traditionally hand-woven and hand-dyed silk has captured the loyalty of customers outside the country.

Between 1931 and 1932, Van Phuc silk was displayed at international exhibitions for the first time in Marseille and then Paris. At the Paris Fair in 1932, the Vietnamese silk was praised by the French as the most sophisticated product to come out of Indochina. From 1958 to 1988, the silk was mostly exported to East European markets.

Based on traditional designs, locals in Van Phuc silk village are creating more modern products to meet the increasing demands of domestic and foreign markets.

Touring Chuon Ngo village in the suburban district of Phu Xuyen, visitors will have an opportunity to admire picturesque images with high artistic values created from mother of pearl, demonstrating the high craftsmanship of artisans.

This place is famous for sets of wooden furniture which are exquisitely inlaid with mother of pearl and worth up to billions of VND.

Mother-of-pearl inlaid products of Chuon Ngo village are better than those of other places thanks to the sophisticated lines and vivid decorative details.

The village’s products are increasingly diverse and rich in designs, meeting domestic demand and even reaching out to international markets such as the UK, Russia, the US, the Netherlands, and Japan.

Furthermore, Chuon Ngo village still retains the traditional scenes of the northern region with millennia-old pagodas and houses.

To develop tourism in craft villages, Hanoi will select those recognised as traditional craft villages thanks to rich cultural identities, attractive surrounding, and favourable transport system to build them into sample models, then expanding to other villages.

The Hanoi craft village association has selected potential ones such as Thach Xa bamboo dragonfly-making village in Thach That district, Chuon Ngo village in Phu Xuyen district, Du Du wood sculpture village and Chuong conical hat making village in Thanh Oai district./.

KB Asset Management launches representative office in Vietnam

Launching the representative office in Vietnam is expected to help KB Asset Management (KBAM) – a member of KB Financial Group (KBFG) – expand its markets and develop investment in Asia.

On September 3, KBAM launched its representative office in Ho Chi Minh City, marking its third overseas location established as part of KBAM's global scale and network development plan, after representative offices in Singapore and China.

The KBAM Vietnam office will focus on conducting research of the local financial market as well as developing new products and services tailored to the specific needs of Vietnam and Southeast Asia.

Accordingly, with total assets in Vietnam of more than $150 million and plans to continue to increase this in the coming time, KBAM Vietnam will focus on promoting the asset portfolio including equity, fixed income, real estate, infrastructure, and alternatives.

KBAM Vietnam’s CEO is Justin Suh, a finance expert with 22 years of experience working at leading financial companies such as Goldman Sachs Asset Management and AllianceBernstein, said, “Having identified Vietnam as a potential development market, we are planning to build a professional investment team.

The establishment of KBAM Vietnam clearly shows the orientation as well as affirms KB Group's commitment to contributing to the Vietnamese market. We hope KBAM will have many opportunities to co-operate with financial institutions in Vietnam.”

KBAM is also promoting co-operation with members of KB Financial Group such as KB Vietnam Securities (KBSV), KB Kookmin Bank, KB Card, and KB Insurance in expanding its customer base, diversification, and cross-selling products. In particular, KBAM is planning to co-operate with KBSV in seeking investment opportunities as well as launching new and unique products in the near future.

As a member of KB Financial Group, KBAM is one of the oldest and most prestigious asset management firms in Korea. With strong support from the parent group and other members, with optimistic market assessments, KBAM is confident and shows great determination in expanding investment activities in Vietnam – the long-term investment market of many Korean investors.

E-commerce, e-logistics – the key to success for exporters

Vietnamese exporters are urged to give priority to e-commerce and e-logistics platforms to increase opportunities to join major value chains while preventing possible loss risks amid changing global trade rules and the wide influence of Industry 4.0.

At a conference held on September 13 by the Ministry of Industry and Trade (MoIT) and the Ministry of Agriculture and Rural Development, leaders of government agencies and experts discussed ways to help Vietnamese exporters of agricultural produce and seafood adapt to new requirements by China and other international markets.

Challenges have been growing more serious as Vietnam’s agro-fisheries exports to China shrank 9.2 per cent on-year, reaching over $3.8 billion in the first seven months of 2019. Of the export items, rice saw the highest drop with a decrease of 67.5 per cent, hitting over $159.4 million. The runners-up were fruits and vegetables with $1.6 billion in export turnover, down more than 8 per cent and cassava which dropped 10 per cent to $466 million, according to statistics from the Ministry of Industry and Trade (MoIT).

US-China trade tensions are partly to blame, along with China’s stricter regulations on the import of agricultural and aquatic products through its land borders which include stricter measures to supervise traceability, packaging, and food safety and hygiene. In fact, China had announced the requirements in mid-2018, however, few Vietnamese companies were aware of the coming changes.

"This is an inevitable trend and aligns with international practices. Not only China, many other countries are applying stricter requirements for imported products," said Tran Thanh Hai, deputy director of the Agency of Foreign Trade under the MoIT.

According to Minister of Agriculture and Rural Development Nguyen Xuan Cuong, if businesses do not catch up and transform in time, they will end up in an embarrassing situation.

Sharing his views, many logistics firms and technology companies have introduced new solutions to help Vietnamese exporters ease possible risks and benefit from a global boom in cross-border e-commerce. This is adopting emerging technology into their business.

IMG Group is one such example. IMG has been working closely with the Foreign Trade Agency since the 1990s, particularly in the early days of foreign trade, and brought in billions of dollars in foreign direct investment (FDI). Addressing the conference, Nguyen Thi Thu Hien, chairwoman of IMG Group, IMG Alliance, and IMG Club, highlighted the efficiencies of e-trade and e-logistics that IMG have planned to serve as global trade-logistics linkages.

“This time with an ‘Offline-to-Online’ strategy, the group promises to provide great support for Vietnamese businesses of all sizes who want to enter the Chinese market faster and cheaper. This is one of the important activities among IMG’s global initiative to support local companies and enable them to join major value chains effectively,” she told VIR.

To this end, IMG Logistics has signed a co-operation agreement with Singapore’s V-Cargo Cloud, which is one of the leading Singaporean in e-commerce logistics platforms and has had great success in over 40 countries including the key regions of the Asia-Pacific, China, the Middle East, Central Asia, Latin America, and the African continent. With this agreement, the two sides will co-operate for the digitalisation of logistics and cross-border e-commerce (CBE) in Vietnam.

“We plan to develop the e-commerce logistics platform step by step, with the first moves to be made within the year. The platform will work as an information and database hub, enabling international logistics firms to enter the Vietnamese market, and helping Vietnamese firms venture further into international markets in order to benefit from a boom in e-commerce driven by growing regional and international trade,” Hien said.

The platform, which will be based in Vietnam, will support firms in administrative procedures, management of the flow of goods, insurance, financing, and shipping services. This will help them to reach higher service standards while also saving time and reducing costs, thus increasing their competitiveness.

Vietnam has signed a lot of free trade agreements with countries worldwide. If local exporters have the proper approach, they can gain huge benefits from these agreements, otherwise they will lose out.

CBE is now a key trend globally and is forecast to continue its growth momentum in the years to come. DHL’s recent report showed that CBE globally will maintain average growth at 25 per cent in the next three years. Accordingly, the total transaction value is projected to rise from $300 billion in 2015 to $900 billion next year. In Southeast Asia, even though CBE is still in the early stages of development in some areas, it is nonetheless reporting positive growth.

 
 
 
 
 
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