Thai Nguyen approves incentives for Samsung

The People’s Council of northern Thai Nguyen province on December 11 officially approved a resolution on investment incentives for Samsung Electronics Vientam Thai Nguyen’s second phase hi-tech production complex (SEVT2) located in Yen Binh Industrial Park (IP).

Accordingly, the investors receive incentives and investment assistance so that they can fulfill their commitment to meeting the criteria required for a hi-tech enterprise. These criteria have been approved by the Ministry of Science and Technology.

While the SEVT2 project is being set up, investors are offered 50 percent exemption in their corporate income tax payments for the three years, once their tax exemption limit expires under the Law on Corporate Income Tax.

The investor will have to pay only 50 percent land rental fee in Yen Binh IP, for 70ha of area or its equivalent.

Annually, the land rental fee will be lesser or equivalent to the tax figure paid by the company to the State.

According to Thai Nguyen province, the SEVT2 project aims to lead research and development in mobile devices, electronics, telecommunications and high-end technology.

It also intends to spearhead the manufacture and assembly of mobile phones, laptops, digital cameras and smart televisions.

The 3 billion USD project will be located near the company’s first factory which came into operation in March this year with the total investment capital of 2 billion USD in Yen Binh IP.

The 70ha plant is expected to initially recruit 20,000 workers, a number that will be later increased to 30,000. The two factories are expected to create jobs for around 100,000 local residents.

The first plant of Samsung in Vietnam is situated in the northern province of Bac Ninh. It has a total capital of approximately 1.5 billion USD. It launched its first products in April 2009. Samsung Bac Ninh manufactures 13 to 15 million tonnes of products monthly and over 90 percent of them are meant to be exported.-

HCM City seminar helps boost trade, investment in Russia

A seminar was held in Ho Chi Minh City on December 11 to help businesses effectively tap the Russian market and increase import-export activities in the Customs Union of Russia, Belarus and Kazakhstan.

According to Deputy Director of the HCM City Investment and Trade Promotion Centre (ITPC) Ho Xuan Lam, Vietnam has become Russia ’s top priority partner in the path of entering the ASEAN market while Russia serves as a key market for Vietnam to expand business and investment in the Customs Union.

The two countries should map out their own strategies to exploit each other’s markets, especially after a Free Trade Agreement (FTA) between Vietnam and the union is concluded in early 2015, he said.

Kapustkinh Nikolay A, Deputy Chief Representative of the Russian Trade Office in Vietnam, said it is the best time for Vietnamese enterprises to invest and start up business in Russia since the FTA will bring big opportunities to them.

On the occasion, ITPC informed that it will send a delegation to study the market and promote trade in Russia from January 17-24, 2015.

Two-way trade between Vietnam and Russia surpassed 2 billion USD in the first nine months of 2014, of which the former’s exports were worth nearly 1.44 billion USD, down 10 percent compared to the same period last year.

Trade between HCM City and the European country hit over 250 million USD during the period and the city is now home to 20 Russian-invested projects with a total capital of over 44 million USD.

Cutting-edge technologies in food industry on display

More than 100 up-to-date equipment and products in the food industry are being on show at a two-day mart that kicked off in Ho Chi Minh City on December 11.

Techmart 2014, held by the city’s Centre for Science and Technology Information, is meant to introduce and transfer scientific and technological achievements in nutritional and functional food so as to help southern businesses update their production lines and raise products’ values.

Some outstanding exhibits include technologies producing crocodile bone glue, cordyceps roberti, and herbal tea, as well as machines using nano technology to make pills and ointment.

Vietnam is rich of food and medicinal resources, yet its processing technologies in the field are lagging behind other countries in the world, said Nguyen Ky Phung, Deputy Director of the HCM City Department of Science and Technology.

He added that businesses need to procure advanced equipment so that their products can compete with imports.

Within the framework of Techmart 2014, experts from research institutes and universities will also advise companies about technological innovation and product development.

Crafting industry turns to designing for tough markets

Vietnam’s crafting industry is turning to a new approach in designing and developing sustainable brands to tap into tough markets around the world.

The move is supported by a project, entitled “Developing designs of sustainable brands for the crafting industry in Vietnam”, which is funded by the European Trade Policy and Investment Support Project (Mutrap) via the Vietnam Handicraft Exporters Association (Vietcraft).

The 554,883 EUR project is considered as the first step in setting up a new trend of designing sustainable eco-brands, which has just taken root in Vietnam.

It aims to enhance the designing capability of small and medium-sized enterprises towards meeting standards of tough markets such as the EU.

Around 200 enterprises will be selected for the project, which also assists at least 50 companies with the development of their own sustainable product groups.

The Vietcraft said it offers assistance to enterprises in training and developing new designs, updating new consumption trends as well as holding classes on the latest designing and product trends.

According to Le Ba Ngoc, Vietcraft General Secretary, many Vietnamese companies have yet acknowledged the importance of developing sustainable designs as well as the need of regularly innovating products.

Only 5 percent of the total 1,600 industry enterprises comply with international standards on quality, society, and environment such as ISO, SA8000, BSCI, failing to gain a strong identity for Vietnamese craft products internationally, Ngoc said.-

Unlocking the Russian export potential

The Kremlin is bent on turning the Customs Union of Russia into a throbbing financial centre and they need Vietnam’s help to accomplish the task.

That was the message from speakers at a seminar in HCM City on December 11, which aimed to help Vietnamese businesses fully gauge the opportunities for expanded exports to the Customs Union of Russia, Belarus and Kazakhstan markets.

Speaking at the seminar, Deputy Director Ho Xuan Lam of the Investment and Trade Promotion Centre (ITPC) said Vietnam and Russia have been working cohesively to promote cooperation in economics, trade, culture and education.

The relationship has been highly beneficial for both countries Lam said, adding that Russia views Vietnam as a bridge to the ASEAN region and conversely Vietnam has looked to Russia as the key to piercing and making inroads into the entire Custom Union region.

Lam underscored the point that the two sides have been putting the final touches on a Free Trade Agreement (FTA), which should be signed by late 2014. The FTA should provide the foundation for devising a concrete strategy to explore each other’s markets more fully.

Kapustkinh Nikolay, a Russian commercial representative in Vietnam, in turn said the time has long past for Vietnamese business enterprises to seize the initiative and invest in doing business in Russia.

The government has been actively improving the business climate and when the FTA comes into effect Vietnamese businesses would have ample opportunity to enjoy import tariffs of zero percent, he said.

In the first nine months of the year, the two-way trade turnover between Vietnam and Russia hit more than US$2 billion with Vietnamese exports to Russia reaching nearly US$1.44 billion and its imports from the market tallying in at US$768.4 million.

In particular, the trade turnover between HCM City and Russia reached more than US$250 million during the period. At present, Russian businesses have invested in 20 projects with a capital investment of roughly US$44 million.

At the event, the ITPC also unveiled a plan to send a delegation of local businesses this coming January 17-24 to conduct a market survey with an eye to boosting boost trade.

Beefing up agro-industry in the Mekong Delta

A seminar on the means and methods of broadening agricultural exports of the Mekong River Delta took place in Can Tho city on December 11 within the framework of the 2014 Vietnam International Agriculture Fair.

Speakers at the event analyzed the current situation of agricultural exports of the Mekong River Delta region and gave their insights into how best to maximize production and profits.

Those in attendance also hotly debated issues related to the effectiveness of agricultural production in the Tam Nong district in the Mekong River province of Dong Thap.

Notably, they said the locality has been successful in elevating its trade name for having high quality agricultural exports.

Luu Hong Man, deputy director of the Mekong River Delta Rice Research Institute, said the cooperation between businesses and farmers should be further pushed up to help farmers increase revenue and improve their livelihoods.

Vietnam on course to become largest rice exporter

In the fiercely competitive rice industry, leading economists at a seminar in Can Tho City on December 11 say Vietnam is right on track to become the world’s largest exporter by 2020, providing the Southeast Asian nation can overcome its shortcomings.

They added that at present, some nations – India, Pakistan and the US – have pursued rather aggressive policies to boost rice production and exports and as a result have become tough competitors for Vietnam.

In recent years, the Mekong River Delta region has spared no efforts to attract investment in the field of rice production. Many international organisations and foreign investors have also been upsizing the production model.

However, to date these have just been pilot programmes and have had no real world impact on rice production in Vietnam.

Although Vietnam currently ranks second in the world in exporting rice, its export value has remained low and the country has yet to develop a solid supply chain with the major international brands in the industry.

Duong Quoc Xuan, deputy head of the Steering Committee for the Southwest region stressed the need to devise a zoning plan for rice production, organise a purchasing and reserve system and focus on building national brand names.

On a more positive note, the Vietnam Southern Food Corporation and Mekong Delta Rice Research Institute signed a cooperative agreement to research rice varieties, which would lay a solid foundation for producing quality rice in vast quantities.

Garment export to hit $24.5 billion in 2014

Vietnam’s garment and textile export turnover is likely to reach 24.5 billion USD this year, a 19 percent rise against 2013 and the largest increase in the past three years.

With this result, the sector will bring in a trade surplus of 12 billion USD this year, according to the Vietnam Textile and Apparel Association (VITAS).

The association also mentioned a shift of orders from other countries to Vietnam thanks to bilateral and multilateral free trade agreements the country has signed and will sign with its partners.

In recent years, the sector has focused on diversifying material supply sources to ease the dependence on foreign source and increase competitiveness. To date, it has raised the localisation rate to more than 50 percent.

Le Tien Truong, General Director of the Vietnam National Textile and Garment Group (Vinatex), said the group’s subsidiaries have increased investment in material production, adding that their textile fabric output can meet 60 percent of domestic demand.

He emphasised the need to build a trademark for Vietnam’s garment and textile products. The sector also needs to improve its competitiveness in the global garment supply chain, he added.

Vietnam proposes ideas for India-CLMV economic ties

Vietnam has introduced a six-point proposal aiming to boost economic and trade ties between Cambodia, Laos, Myanmar, and Vietnam and India, suggesting all parties minimise trade and investment barriers to each other’s businesses.

The countries should encourage their enterprises to make full use of their respective market access preferences, said Deputy Minister of Industry and Trade Do Thang Hai.

Hai led a delegation of 130 Vietnamese businesses and officials at a business forum between India and Cambodia, Laos and Myanmar and Vietnam (CLMV) held in New Delhi on December 11.

He also proposed that India assist CLMV in developing their infrastructure and cross-border transport systems that include land, railway, waterway and airway routes.

Hai stressed the need for these countries to simplify administrative procedures and make them highly transparent by developing modern customs system, and to strengthen collaboration within the ASEAN-India cooperation framework.

The officials underlined the necessity to speed up negotiations for the ASEAN-India free trade agreement, aiming to set up a comprehensive and full free trade area between the bloc and India, thus making it easier for both sides and other partners in talks for a Regional Comprehensive Economic Partnership (RCEP).

He also pointed to the need for the countries to share state management experience as well as strengthening expertise exchange and education affiliation.

Vietnam is aware that the enhancement of regional and sub-regional partnership is significant to economic growth of both Vietnam and the region, he stated, adding that the country always supports India’s initiatives and proposals to beef up ASEAN-India ties.

The country is working hard with other ASEAN members for the establishment of an ASEAN Economic Community in 2015, making it a 600 million-strong single market that has a total GDP of nearly 2.5 trillion USD, he affirmed.

Chandrajit Banerjee, Director General of the Confederation of Indian Industry, said he hopes the event serves as a chance for policy-makers from CLMV to meet and talk with Indian businesses on opportunities to foster Indian-CLMV partnership.

Foreign firms win HR awards

Thirteen businesses received the Vietnam HR Awards for best human resource practices given away by the Talentnet Corporation and Labour and Social Affairs newspaper at a ceremony in Ho Chi Minh City on December 10.

Endorsed by the Ministry of Labour, Invalids and Social Affairs, the newly instituted awards are aimed at recognising and honouring businesses with excellent HR policies, promoting effective HR strategies, and creating a forum to share HR policies and practices.

They are given to outstanding enterprises in five human resources categories: manpower planning and resourcing, compensation and rewards management, performance management, training and human capital management, and best workplace environment.

A sixth prize recognises the efforts of companies that went through transition periods but remained focused on HR and achieved encouraging results.

Only four of the winners were Vietnamese - The Gioi Di Dong, FPT, Tan Cuong Minh, and Thanh Cong Textile Garment, Investment and Trading Joint Stock Company.

The rest were multinational firms — Intel Products Vietnam, Unilever Vietnam, Abbott Vietnam, DHL, and Samsung Vina Electronics.

Intel won in three categories: manpower planning and resourcing, compensation and reward management, and best workplace environment.

This also fetched it the Best Enterprise of the Vietnam HR Awards 2014 award.

Arnold Chan, Managing Director of Grow Talent Pte Ltd. and a member of the jury, said Vietnamese companies are acknowledged for their flexibility, creativity, and adaptability.

Multinational companies are best known for their professionalism and standard measurement methods, which help develop a HR strategy that is closely connected with the business strategy, he added.

RoK desires to develop business clusters in Vietnam

Enterprises from the Republic of Korea (RoK) are seeking locations in Vietnam to establish clusters of businesses operating in the same sector or related areas, General Manager of VNNH Co., Ltd Noh Kyeong Yong has said.

Noh Kyeong Yong, who headed a RoK business delegation to visit the northern province of Ha Nam , made the statement in a meeting with provincial leaders on December 11.

The cluster establishment aims to create a favourable environment for RoK enterprises to cooperate with each other, promote their strengths and increase their competitiveness, he underscored, adding that a cluster of around 100 enterprises needs about 150-300 hectares of land.

Mai Tien Dung, Secretary of the provincial Party Committee and Chairman of the provincial People’s Council, affirmed that Ha Nam always welcomes foreign investors, including those from the RoK and has applied a number of policies to attract them.

The province supports the RoK’s cluster investment, he said, adding that it has cleared a site of 100ha in the Dong Van III Industrial Park in Duy Tien district for a RoK cluster and can expand the area by 300-400ha.

As many as 55 RoK enterprises are successfully operating in the locality.

Mekong Delta seeks to boost farm produce export value

Enhancing regional links in production and consumption stages is urgently needed to increase the value of farm produce in the Mekong Delta – the largest rice granary in Vietnam.

Speaking at a workshop in Can Tho City on December 11, Vice Chairman of the municipal People’s Committee Truong Quang Hoai Nam said while the delta supplies over 90 percent of rice destined for foreign markets and contributes around 27 percent of the nation’s GDP, the region still exports mainly unprocessed farm products with low commercial value.

He urged research institutes and universities to get involved in the production chain and technological transfer through developing and supplying high-yield, quality plant and animal strains as well as advanced cultivating and breeding techniques.

At the same time, exporters need to share information to prevent unfair competition and popularise the brand names of farm produce in the global market, experts said.

The Departments of Agriculture and Rural Development in 13 cities and provinces in the delta are collaborating to expand the application of environmentally-friendly production models in accordance with the V ietnam Good Agricultural Practice (VietGAP) and GlobalGAP standards.

This aims to increase prices for export farm produce, particularly such staples as rice, shrimp, tra fish and fruit, according to Pham Van Quynh, Director of the Can Tho Department of Agriculture and Rural Development.

Saigon VRG to build Industrial Park in HCM City

The HCM City People's Committee has decided to establish the Le Minh Xuan 3 industrial park in Binh Chanh District.

Under the decision, the Saigon VRG Investment Holding Corporation (Sai Gon VRG) will invest 1.2 trillion VND (56.3 million USD ) in the construction of the park.

Spread over more than 231ha in Le Minh Xuan Commune, the park will be home to clean and high-tech industries such as electronics, IT, food and medical processing.

The park will also serve the ancillary services of the medical equipment, garment and textile and footwear industries. Sai Gon VRG said that the park will be near the city centre where there are several supporting industries and a substantial skilled workforce. In addition, there will also be an 80ha residential area, comprising living space and entertainment centres for the park's experts and workers.

The park is the third of its kind in the commune. The first two industrial parks, Le Minh Xuan and Le Minh Xuan II, were built over more than 437ha and are in operation.

As a member of the Viet Nam Rubber Group, Sai Gon VRG, set up in 2007, specialises in investment, industrial park infrastructure development and real estate, besides residential areas having essential social infrastructure such as houses, apartments and offices, as well as restaurants and commercial centres.

Corporatise all public service units: officials

The plan to convert non-business units of State-owned corporations into joint-stock companies should be expanded to cover those under ministries and provincial administrations, officials said yesterday.

Representatives of many ministries and sectors made this suggestion at a conference held to discuss a draft Governmental Decision on the conversion process.

At present, the plan is to pilot the conversion at State-owned companies that are to be equitised, but delegates at yesterday's conference said that it should also include non-business units under ministries, People's Committees of cities and provinces nationwide.

They said that over many years of equitising State-owned corporations, many public non-business units, especially in the healthcare, education and training sectors, had been given autonomy and responsibility for performing their tasks and managing their organisational apparatus, payrolls and finances.

This has had a positive impact by improving the quality of public services, they added.

According to the Ministry of Finance, the main drafter of the Government Decision, the conversion aims to reform the work of public non-business units and enhance their capacity to provide high-quality services to society as a whole, contributing to national socio-economic development.

The ministry said that the conversion can be done in three ways: keeping unchanged the existing State investment capital in the enterprises and issuing shares to attract more capital where needed; selling part of the State's stake or doing it in combination with issuing shares; and selling the entire stake of the State in the enterprises or doing it in tandem with issuing shares.

Under the draft decision, after becoming joint-stock companies, the units will operate under the Law on Enterprises and other relevant regulations.

They will continue providing public services but can decide on the prices of the services based on a reasonable calculation of their expenses.

The decision also says that employees of the non-business units who are experts will be given priority in buying shares in the new joint-stock company.

Deputy Prime Minister Vu Van Ninh agreed with the proposal to expand the process, but added that units under State-owned corporations might enjoy some preferential policies.

Ninh, who is also the head of the Steering Committee for Enterprises Innovation and Development, said that in terms of financial management, units like hospitals, schools and research institutes should be allowed to self-evaluate their human resources and the State would cover the expenses of this process as well as subsequent training provided.

He explained the purchasing priority given to expert employees by saying the success of the new companies depends on both financial and "grey matter capital.

Ninh also said that based on the characteristics and functions of the units, the State would have some involvement in the conversion process when national defence and security issues come into play.

The Finance Ministry should draw up a list of those non-business units that require such involvement, he said.

Half-done property projects hard to find buyers

Selling half-done property projects is one of the few solutions for investors to ride out financial difficulties, but this has turned out to be a tough task for them.

Nguyen Ngoc Thang, director of Saigon Real Estate Joint Stock Company in HCMC’s District 3, said his firm is helping partners sell more than 40 housing projects whose main components have been completed on its website but these projects have not attracted buyers.

Among the projects put up for sale are an 18-story serviced apartment and hotel complex on an area of 1,700 square meters on Nguyen Van Troi Street, Phu Nhuan District. The project is priced at VND300 billion.

A project of 21 stories and two basements on Ta Quang Buu Street in District 8 consists of 334 apartments and is being sold at VND200 billion. The property brokerage is also finding investors for another project with 12 stories and 154 apartments at Thu Duc Intersection in Thu Duc District at VND225 billion.

Thang said Saigon Real Estate has not found buyers for the projects though the detailed plans of these projects have been approved. The main reason is that they are not situated in good sites while their prices are high.

Property investors have to sell their half-done projects as they are in dire need of capital to pay debt and continue investment plans.

Pacific Property and Infrastructure Development Joint Stock Company (PPI) is looking for partners to invest in or buy its office and apartment project on Pham Van Dong Street in the outlying district of Thu Duc.

A representative of PPI acknowledged the company does not have sufficient capital to continue developing the project whose 1/500-scale zoning plan has been approved.

Nguyen Van Duc, vice chairman of the HCMC Real Estate Association, said mergers and acquisitions (M&A) in the property sector started 3-5 years ago when banks acquired half-done projects from the investors unable to repay their loans. The banks set up subsidiaries to sell these projects to capable investors.

The M&A activity in the sector has turned active since early this year and there have been a number of win-win transactions for both buyers and sellers. The successful deals with big investors including Novaland, Hung Thinh, Dat Xanh and Thanh Yen Land involve Galaxy 9, Icon 56 and other property projects around the city.

Duc said those firms have purchased housing projects and change them into the products for medium and low-income earners. “In reality, property inventories remain high but the demand for budget apartments is huge,” he said.

One investor specializing in buying half-done property projects said it is not easy to successfully invest in such projects. As some buyers do not have strong financial capacity, they pour lower-than-needed investments in the projects they have acquired and this affects the development progress of the projects.

The investor said firms which want to capitalize in the segment of half-done property projects should work out strategies suitable for the current market situation and have strong financial capacity.

Saigon Co.op launches its biggest store in HCM City

Saigon Co.op and the Food Company of HCM City yesterday opened their Co.opmart Foodcosa supermarket in HCM City's Go Vap District.

The six-storey, VND300 billion (US$14.06 million) store measures nearly 17,000sq.m, making it Saigon Co.op's biggest in the city.

It sells more than 30,000 items, of which 90 per cent are locally made. There is also a Galaxy cinema in the third floor.

Like Co.opmart's other outlets, the new one would also sell price-stabilised goods under the city's programme, Nguyen Thanh Nhan, Saigon Co.op's deputy general director, said.

Sai Gon Trading Group opens 47th Satra supermarket

Sai Gon Trading Group today opens its 47th Satrafoods supermarket outlet in HCM City's District 7.

The store on Phu Thuan Street will sell more than 2,00 items, 80 per cent of them fresh and processed foods, vegetables, and household appliances.

It also sells nine essential items like rice, sugar and cooking oil under the city's price stabilisation programme.

The new outlet has a foodcourt.

On the opening day the supermarket is offering a discount of 30 per cent on many items and 49 per cent at Satra Foodcourt.

HCM City targets VND266 tril. budget revenue in 2015

The government of HCMC looks to achieve VND265.77 trillion in budget revenue next year, up 8.08% against this year, and gross domestic product (GDP) growth of 9.5-10%, heard the 16th meeting of the HCMC People’s Council that opened on December 9.

According to HCMC vice chairman Hua Ngoc Thuan, the city has attained strong GDP growth this year, at 9.5%, and per capita GDP of US$5,131. Besides, the city’s budget revenue this year is VND245.9 trillion, rising 8.61% year-on-year.

Talking about budget collection and spending this year, Pham Van Dong, head of the council’s budgetary and economic committee, said the city had obtained the highest growth of budget revenue in four years.

The foreign-invested sector contributes a bigger proportion than other economic sectors. Therefore, Dong suggested that the city government consider more support to domestic enterprises.

Speaking at the opening session on December 9, Chairwoman of the HCMC People’s Council Nguyen Thi Quyet Tam said the city’s economy is still in difficulty, the economic recovery remains slow, growth quality has not improved much, and operations of small and medium enterprises encounter a lot of woes.

According to Tam, the city has failed to realize many targets of the year; for instance, exports have grown only 8.8%, well below the targeted 10%.

Regarding the land price framework, Tam said the People’s Council will hold an extraordinary meeting on the issue on December 30 to ensure investment attraction, benefits of residents and budget collections. She added the land price framework will no longer be announced on a yearly basis but every five years and the new price framework will be issued on January 1, 2015.

VN not ready to join global value chains

Viet Nam needs to create medium-sized and large businesses capable of supplying foreign firms and supporting smaller businesses, the Viet Nam Development Partnership Forum heard in Ha Noi last week.

Forum discussions focused on ways to promote the development of the local private sector, especially small and medium-sized enterprise (SMEs), and help firms increase their competitiveness and participate more effectively in global value chains. They will also cover the development of supporting industries in a move to reduce imports.

The participation of the Vietnamese private sector in the global production network through closer connections with multinationals and direct export was a good way to step up technology transfer and promote economic development, speakers said.

However, while Viet Nam focused on increasing new business registrations, the country missed the opportunity to improve firms' capacity to take full advantage of global value chains.

About 2 per cent of active firms in Viet Nam are large companies and the figure is similar for medium-sized enterprises, according to the Viet Nam Chamber of Commerce and Industry (VCCI). Micro businesses (those with less than 10 staff members) account for as much as 66-67 per cent of total enterprises. If active household businesses are taken into account, micro businesses may account for as much as 99.9 per cent of firms. Their small size makes most local firms not competitive enough to export to other countries or participate in the global production network.

The lack of a Vietnamese private sector capable of joining global value chains has resulted in the breakdown and segmentation of local supply chains. Having more medium-sized enterprises would help Viet Nam's performance export markets, participants said.

The risk involved is that potential investors may not come to Viet Nam. This will be a more serious problem when labour costs – the key factor for foreign investment attraction to Viet Nam – increase. Unlike China or India, Viet Nam is not large enough to lure FDI enterprises looking for a potential venue for production covering the whole region. Therefore, Viet Nam needs strong supporting businesses to draw investment.

The representation of Vietnamese enterprises in global value chain production networks is low relative to other similar-sized ASEAN economies. Only 36 per cent of Vietnamese firms participate in the production network, while that number is closer to 60 per cent in more developed economies like Malaysia and Thailand. Only 21 per cent of local SMEs participate in global value chains compared to 30 per cent in Thailand and 46 per cent in Malaysia.

SMEs cannot compare to larger firms in participating in production networks. The importance of business size can be demonstrated in the contribution of SMEs to export turnover, which is consistently lower than larger firms. In Viet Nam, SMEs contribute 16.8 per cent – lower than other Southeast Asian countries, except Indonesia – while larger companies contribute 83.2 per cent.

As of January 1, there were 764,374 registered businesses under the Enterprise Law of which 391,547 were active.

In the first ten months of 2014, 60,023 companies with registered capital of VND352.5 trillion (US$16.57 billion) were registered as start-ups, a 6.5 per cent decline of the number of registered firms and a 9.5 per cent increase in registered capital year-on-year.

The private sector accounted for about 96 per cent of active businesses.

Foreign investors get new guidelines

Foreign investors must be committed to a long-term attachment in terms of interest in domestic credit institutions, if they want to buy stakes and become strategic investors of these organisations.

This is stated in the State Bank of Viet Nam's (SBV) Circular No 38/2014/TT-NHNN, which was issued on Monday, and takes effect on February 1, 2015.

The circular requires foreign investors' pledges to own stakes of 10 per cent or more in the credit institutions, as well as their involvement in helping the institutions to apply modern technology, develop products and services, and enhance management capacity.

The regulation related to technology, products and services, as well as management support will also be applied in case the foreigners acquire stakes in fragile credit institutions, which are defined or put under special supervision by the SBV.

The circular also stipulates procedures for specific cases where foreigners buy shares to hold at least five per cent or 10 per cent of the credit institutions' equity.

Providing guidelines for Decree 01/2014/ND-CP, issued last March, on foreign investors buying stakes in Vietnamese lending institutions, the new document replaces Circular No 07/2007/TT-NHNN that the central bank issued seven years ago.

Vingroup sets up second Vinhomes real estate company

Vingroup (VIC) established another Vinhomes real estate company with a charter capital of VND6 billion (US$282,000) in early December, the group announced on the HCM City Stock Exchange (HSX) recently.

In the Vinhomes 2 real estate company, Vingroup has contributed 94 per cent of the capital. The headquarters of Vinhomes 2 is located at No 7, No 1 Bang Lang Road in Vinhomes Riverside, in the capital's Long Bien District. It has not yet been disclosed as to who has contributed the rest six per cent of the company's capital.

Listed on HSX as of November 3, 2014, Vingroup has VND14.53 trillion ($682 million) in charter capital and has 51 subsidiaries.

Credit Suisse named Best Foreign Investment Bank in Vietnam

Credit Suisse has been named Best Foreign Investment Bank in Vietnam in The Asset magazine’s Triple A Country Awards for 2014.

This is the third consecutive year Credit Suisse has received the Best Foreign Investment Bank in Vietnam accolade from The Asset, a leading industry business publication in Asia Pacific. This marks a continuation of the excellent track record the bank has in Vietnam and across Southeast Asia.

Le Hoai Anh, Vietnam Country Head, said: “As a bank that has demonstrated a consistent commitment to Vietnam, we are delighted that this has been recognised. Today’s announcement reflects the excellent reputation we have maintained in Vietnam as a leading bank in this promising market.”

Credit Suisse was the first investment bank to start covering Vietnam in 2001 and it has the most comprehensive Vietnam coverage team among its international peers. Since the start of its coverage, the bank has raised over US$6 billion of capital for the Vietnamese Government, domestic and foreign enterprises with Vietnamese assets.

In the period under review, Credit Suisse executed a broad range of market defining transactions that solidified its leadership position including an international bond offering, a share placement, an international syndicated loan, a loan restructuring and an equity swap.

Credit Suisse was sole global co-ordinator on the US$200 million senior notes offering for Vingroup in October 2013, which was the first ever benchmark US dollar denominated bond offering for a Vietnamese corporate and successfully re-opened the offshore US dollar bond market for Vietnamese issuers. The bank also handled a leadership role in the US$150 million international syndicated loan for Vingroup, the first ever real estate company in Vietnam to have successfully tapped the international syndicated loan market. Other deals included the US$630 million restructuring of an international syndicated loan for Vinashin, and a US$70 million treasury shares placement.

Credit Suisse is a leading player in Southeast Asia as the region forms a critical part of the bank’s Asia-Pacific business strategy. Apart from The Asset, in July, the bank has also won Best Investment Bank in Vietnam for the sixth time in Euromoney’s Awards for Excellence and no less than seven times in the last decade as Best Foreign Investment Bank in Vietnam in FinanceAsia’s Country Awards Achievements.

HCM City company eyes wind power project in Mekong Delta

HCMC-based Phu Cuong Corporation has plans to invest US$436 million in a wind power project with total capacity of 170MW in Soc Trang Province, said the company’s board chairman.

As scheduled, the project should be deployed in 2016 and put into operation in 2017, Nguyen Viet Cuong said on the sidelines of a wind power conference held by the Swedish Embassy in HCMC on December 9.

Initially, 15 turbines with a capacity of 30MW will be constructed in the coastal town of Vinh Chau in Soc Trang Province. The investment cost of the first phase is estimated at US$75 million.

Vestas Wind Systems, a Danish company producing wind power equipment and parts, has signed a cooperation agreement to supply equipment for Phu Cuong’s project.

The corporation expects to recoup the total investment within 10 years with the price of wind power at 9.8 U.S. cents per kWh sold to Vietnam Electricity Group.

Chris Beaufait, president of Vestas in Asia Pacific and China, told the Daily his company may consider construction of a manufacturing factory in Vietnam if the wind power industry grows strong in accordance with the Government’s schedule.

Vietnam – prioritised market of Canada

Vietnam is a prioritised market in the Canada’s global market development plan, said Canadian Trade Counsellor Marcel R.Laneville at a trade conference in Ho Chi Minh City on December 10.

He stated that Canadian firms are paying great attention to developing trade and education cooperation projects in Vietnam.

Canadian businesses which visit Vietnam this time with the aim of seeking cooperative and investment opportunities belong to 12 big craft associations in the fields of manufacturing, engineering, agricultural and healthcare technology, Laneville revealed.

He added that more than 220,000 overseas Vietnamese people who are living and working in Canada, are a firm foundation for promoting cooperation between people and businesses of the two countries.

A representative from the HCM City Small and Medium-Sized Enterprises Support Centre said the centre has helped 57 local businesses establish ties with Canadian partners. As a result, many Vietnamese firms have found Canadian supermarkets as an outlet for their products and many Canadian businesses have set up their branches in Vietnam.

Next year, the HCM City Business Association will coordinate with the Vietnamese Consulate in Canada to organise visits to Canada for Vietnam’s trade promoters and welcome Canadian business delegations to Vietnam to seek market opportunities.

In addition, Vietnamese firms will hold an exhibition in Canada to introduce their products.

Taiwanese firms strike agriculture deals with Quang Ninh province

Businesses from China’s Taiwan signed five Memoranda of Understanding on agriculture cooperation with their partners from northern Quang Ninh province, in Ha Long city, on December 10.

The cooperation covers orchid planting; tea cultivation and processing; mushroom growing; aquatic product preservation; and abalone breeding.

Vice Chairman of the provincial People’s Committee Dang Huy Hau said Quang Ninh has favourable conditions for developing agriculture and boasts stable consumption market.

However, the province is encountering difficulties in manufacturing and applying science-technology due to financial resource shortage.

He hoped the partnership between local and Taiwanese businesses can produce products not only for the domestic market but also for exports.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR