Radical proposals for special administrative-economic zones

The abolition of people’s councils, permitting casinos to be set up and allowing foreign investors to lease land for 99 years are among the main provisions of a proposed new law to govern the three special administrative-economic zones in Vietnam.

Speaking at the 2017 M&A Forum organised in HCM City on August 10 by the Vietnam Investment Review, Minister of Planning and Investment Nguyen Chi Dung said the Special Administrative Economic Zone Law is expected to create a proper legal framework for the three zones in Van Don (Quang Ninh Province), Van Phong (Khanh Hoa Province) and Phu Quoc (Kien Giang).

It aims to create a new development model with breakthrough policies and mechanisms meant to improve the investment environment and make Vietnam competitive in attracting investment.

The zones will only have an administrative committee and no people’s council, and the people’s council’s role related to legislation and inspection would be taken over by provincial authorities, he said.

“To effectively operate these special zones, we should remove unnecessary and inappropriate levels of special economic zones,” the minister said.

The ministry has also proposed increasing the maximum land lease tenure to 99 years from the current 50-75, and allowing the zones to have casinos.

Dung said the zones have been established to develop certain strategic industries based on their geographic conditions.

For instance, Van Phong is the best place to develop a transit port in Vietnam and can develop logistics while Van Don has great potential in healthcare, education and biology, he said.

All three would welcome industries with high value-addition, which would be identified for investment and announced soon, he said.

The bill would be tabled in the National Assembly for approval, according to Dung.

The house will consider their provisions related to preferential treatment for investors in terms of currency, land, manpower, tax and others.

Businesses are proposed to be given a tax waiver for four years, tax cuts for 30 more years, low land rents and flexible labour policies.

Van Phong covers an area of 66,000 hectares and is expected to become an international hub for marine transport, finance, tourism, medicine and education.

The three zones are expected to contribute billions of dollars to the economy from 2020, and enjoy average per capita income of 12,000-13,000 USD by 2030.

The ministry said building the zones has become an urgent task since in the last 25 years, other models like industrial zones, processing zones, economic zones and hi-tech parks have not been sufficiently flexible.

Besides, the current models are not attractive enough for foreign investors and face shortcomings related to administrative procedures and poor human resources.

Since 1942, many countries have successfully developed special economic zones, special administrative zones, freedom cities and smart, industrial and hi-tech cities.

Vietnam’s special administrative and economic zones would have positive effects on neighbouring countries too, the ministry said.

Equitisation plans of seven more SOEs receive approval in July

Seven State-owned enterprises (SOEs) had their equitisation plans approved in July, bringing the number for the first seven months of this year to 26, according to the Corporate Finance Department under the Finance Ministry. 

The department said the total real value of the 26 enterprises is 71.88 trillion VND (3.16 billion USD), of which over 18.3 trillion VND (808.2 million USD) belongs to the State. 

Under the approved equitisation plans, the SOEs will have a combined charter capital of over 22.63 trillion VND (995.72 million USD), of which the State will hold more than 11 trillion VND (495 million USD). 

Meanwhile, around 6.5 trillion VND (286 million USD) worth of shares will be sold to strategic investors, 156 billion VND (6.86 million USD) to the enterprises’ workers, 16 billion VND (704,000 USD) to trade unions, and nearly 4.87 trillion VND (214.28 million USD) will be put up for auction. 

According to the department, the equitisation process of SOEs has yet to meet expectations.

In order to speed up equitisation in the remaining time of the year, the Ministry of Industry and Trade needs to accelerate the sale of State-owned capital at the Hanoi Beer Alcohol and Beverage Joint Stock Corporation (Habeco) and the Saigon Beer-Alcohol-Beverage Joint Stock Corporation (Sabeco) in order to complete by December 1.

During the period, SOEs divested almost 3.7 trillion VND (162.5 million USD) of investment from operations outside their core business and brought in over 15.77 trillion VND (693.88 million USD) in the process.

Thua Thien-Hue, Vietnam Airlines cooperate in tourism promotion

The Thua Thien-Hue provincial People’s Committee and national flag carrier Vietnam Airlines signed on August 11 a cooperation agreement on promoting tourism development in the Hue ancient imperial city.

Accordingly, the provincial administration and Vietnam Airlines will increase promotion activities for Hue on their respective communication channels and collaborate to organise national and international tourism, cultural and sports events in Hue city.

They are set to work together to support Hue’s investment and tourism promotion activities at travel fairs in Vietnam and other countries. They will also consider raising the frequency of flights, opening new air routes to Hue, and creating mechanisms to support new air routes in their initial stage to increase the number of passengers.

Thua Thien-Hue and Vietnam Airlines are going to organise trips for reporters and travel companies from Europe, Northeast Asia and Oceania to learn about local tourism potential and investment climate.

Chairman of the provincial People’s Committee Nguyen Van Cao said aviation helps shorten distance and make destinations closer, thus helping to attract more tourists to the former imperial city of Hue. 

This cooperation programme will help foster tourism and investment attraction activities as well as cultural exchange between Thua Thien-Hue and other regions of Vietnam and countries around the world, he added.

Vietnam Airlines is operating several direct flights linking Hue with Hanoi and Ho Chi Minh City a day.

The two sides have also cooperated in tourism promotion activities, especially Hue Festival, for many years.

Citi Viet Nam named best corporate digital bank

Citi swept the country awards in the Corporate Digital Bank category, winning accolades for its performance in 15 countries and territories recognised by Global Finance.

The countries and territories include Viet Nam, Australia, Bangladesh, Hong Kong, India, Indonesia, Kazakhstan, Malaysia, New Zealand, Pakistan, Singapore, South Korea, Sri Lanka, the Philippines and Thailand.

In the World’s Best Corporate/Institutional Digital Banks in Asia Pacific category, Citi won five regional sub-category awards, including Most Innovative Digital Bank, Best Online Cash Management, Best Online Treasury Services, Best in Mobile Banking and Best Mobile Banking App.

“Being truly digital is fundamental to our strategy. We continuously invest in the next generation of technology, intuitive user interfaces and advanced online analytics, and are early adopters in exciting areas such as robotics, predictive analytics, blockchain distributed ledger technologies, and digital identity solutions,” said Rajesh Mehta, Citi’s Asia Pacific head of Treasury and Trade Solutions (TTS).

Citi’s TTS business has been at the forefront of innovation, with the introduction of a wide range of leading solutions.

“Citi’s goal is to be the world’s leading digital bank and deliver remarkable banking experiences to our clients, wherever they are. We have accelerated efforts to transform our model to be simpler, more nimble, highly relevant, scalable and far more digital,” said Natasha Ansell, managing director, Citi’s country officer for Viet Nam. 

Vietjet honored as “The IPO Deal of the Year 2017”

Vietjet was recently honoured as “The IPO Deal of the Year 2017” and “The Company with Best M&A Information Disclosure” at the M&A Awards 2016-17.

As part of Vietnam M&A Forum 2017, which was held in HCM City on Thursday, the awards were judged by M&A experts through the nominations of consultation organisations and researchers.

Vietjet’s IPO was professionally conducted with consultations from renowned law firms and financial institutions, following international IPO standards.

The judges also lauded the airline for its information disclosure. Vietjet has done a good job on building investor relations, attracting investment funds and the public, providing transparent, detailed and internationally-standardised information to investors and the public.

Earlier, Vietjet’s 2016 annual report was also honoured with a Platinum Award, ranked fourth among the Asia Pacific region’s awardees and eleventh out of 100 worldwide at the Vision Awards 2016 by League of American Communications Professionals.

The Vision Awards honours outstanding annual reports globally.

Lilama to trade on UPCoM from Aug 16

Vietnam Machinery Erection Corporation (Lilama) will start trading 79.7 million shares on the Unlisted Public Company Market (UPCoM) from August 16, two years after its initial public offering in 2015.

The shares, to be traded under the code LLM, will have a reference price of VND15,000 (66 US cents) per share on the first trading day, the Ha Noi Stock Exchange announced.

Of the 79.7 million shares registered for trading, 20,800 ESOP shares (stocks offered to employees in an employee stock ownership plan) are subject to transfer restrictions.

Founded in 1960, Lilama used to be wholly owned by the construction ministry. The corporation was equitised in 2015, with 35.55 million shares being put up for sale, but only around one million shares were sold at VND10,362 per share.

Since April 2016, Lilama has been operating as a joint stock company. The construction ministry remains its biggest stakeholder, holding 97.88 per cent of its charter capital of VND887.2 billion as of April 26, 2017.

The heavy engineering company and its subsidiaries design, engineer, construct and install industrial plants in Viet Nam. They are also engaged in equipment, technology, tank, steel structure manufacturing, and undertake projects in the areas of thermal power, cement, ship-building and engineering.

Lilama’s main business is Engineering, Procurement and Construction (EPC) contract activities, which account for 80 per cent of its total turnover. It has 14 subsidiaries and six affiliate companies.

The company posted an after-tax profit of VND90 billion between April 6, 2016, and December 31, 2016. 

Hue, Vietnam Airlines to co-operate     

The central province of Thua Thien-Hue and national flag carrier Vietnam Airlines will join hands in promoting tourism development in the ancient imperial city of Hue.

Under the co-operation agreement inked between the two sides last week, the provincial administration and Vietnam Airlines will increase promotion activities for Hue on their respective communications channels and collaborate on national and international tourism and cultural events in Hue city.

They will work together on facilitating Hue’s investment and tourism promotion at travel fairs in Viet Nam and other countries. They will also also consider raising the frequency of flights to the city and opening new air routes.

Chairman of the provincial People’s Committee, Nguyen Van Cao, said the agreement will help foster tourism and investment, as well as cultural exchange, between his province and other regions of Viet Nam and countries around the world.

Vietnam Airlines operates several daily direct flights linking Hue with Ha Noi and HCM City.

VN’s exports of gems and precious metals drops     

Viet Nam’s exports of gems and precious metals reached US$252.2 million in revenue in H1, a year-on-year decrease of 53 per cent, financial news website ndh.vn reported.

The country’s gems and precious metals are exported to 14 countries and territories, including Switzerland, the United States, United Arab Emirates and Japan, as well as the Republic of Korea and France.

The United States has overtaken Switzerland to be the largest consumer of Vietnamese gems and precious metals with turnover of $126.54 million. However, this represented a decline of 27.7 per cent over the same period last year.

The country was followed by Belgium and Japan. Switzerland, the largest importer in the first six months last year, lost its top position, slipping to the fourth position with import value of $19.35 million.

Hong Kong climbed from ninth position last year to fifth this year, importing gems and precious metals worth $18.48 million, a year-on-year surge of 247 per cent.

The United Arab Emirates dropped from third to sixth place, importing gems and precious metals worth $2.86 million, down 89 per cent year-on-year.

Although Taiwan’s import turnover during the period reached just $460,000, it represented an increase of 95 per cent. 

Mekong Delta set to focus on three national seafood products

High-quality tra fish fillets, tiger prawn and organic white-legged shrimp will be three national products which will be developed in the Mekong Delta.

At a press conference held yesterday to introduce Aquaculture Vietnam 2017, Vu Duyen Hai, deputy head of the Science-Technology and International Cooperation Department at the Vietnam Directorate of Fisheries, said tra fish and brackish water shrimp have been added to the list of national products. The two products are developed in the Mekong Delta to convert agriculture based on rice and fruits to seafood.

The Directorate of Fisheries of the Ministry of Agriculture and Rural Development plans to focus on developing high-quality tra fish fillets.

The Science-Technology and International Cooperation Department has been assigned to map out a project to develop brackish water shrimp including tiger shrimp farmed in mangrove forests and organic white-legged shrimp.

However, development projects for these products are facing challenges such as underdeveloped infrastructure, climate change-triggered diseases and international competition.

Hai told the Daily that the brackish water shrimp development project would be passed to agencies at higher level this month. The Government will issue policy to support the project while the Science-Technology and International Cooperation Department will collect information about market demand to build a feasible project.

Hai said tiger shrimps of 70 to 80 grams each have been exported at US$30 a kilo. The authorities should build a mechanism for connecting farmers and bolstering prices.

Besides, trade promotion and branding programs are important in national product development projects.

Aquaculture Vietnam 2017 will take place at the Can Tho International Exhibition Fair Center (EFC) in Can Tho City from October 25 to 27. There will be conferences on breed quality, diseases, science and technology application, processing, markets, services and sustainable development.

The event will be jointly organized by UBM Group, the Vietnam Directorate of Fisheries, the Vietnam Fisheries Society, the International Collaborating Center for Aquaculture and Fisheries Sustainability (ICAFIS), the Vietnam Chamber of Commerce and Industry (VCCI) in Can Tho City and the Vietnam Pangasius Association.

High-tech agriculture lacks high-skilled labor

High-tech agriculture in HCMC is facing numerous obstacles, including the lack of high-quality human resources and the slow pace of technology transfer, although the city is the nation’s economic hub with many famous universities and research institutes.

The Ministry of Agriculture and Rural Development has plans to organize a conference on hi-tech agriculture development in the Central Highlands province of Lam Dong next week. At the conference, cities and provinces having successfully built hi-tech agricultural areas will share experiences and solutions to boost the development of this sector nationwide.

In a recent report, the management of the Agricultural Hi-Tech Park of HCMC pointed out a number of shortcomings and difficulties in developing hi-tech agriculture in the city.

Firstly, the management board’s functions and responsibilities are unclear, making it hard for the board to work with related departments and agencies to manage enterprises active in the park.

The investment mechanism and procedures of the HCMC Agricultural Hi-Tech Park are complicated, overlapping and time-consuming.

The park currently covers a total of 88 hectares in the city’s outlying district of Cu Chi. With investments of VND152 billion (US$6.69 million), the park has spent an average of VND1.7 billion on each hectare of technical infrastructure.

The park has attracted 14 projects occupying a total of 57 hectares. Four projects covering nearly 11 hectares and having total registered capital of VND141 billion have not been kicked off.

Transfers of technologies and advanced methods of cultivation to farmers are moving at a snail's pace due to huge costs and farmers’ slow adaptation to new technologies.

There is a paradox that the Agricultural Hi-Tech Park of HCMC is lacking high-skilled labor although it is located in the nation’s economic hub that has numerous large universities and research institutes.

Experts urge prudence in property taxation

Experts have called for careful consideration of a property tax law proposed by the Ministry of Finance to generate a new revenue stream for the State budget.

The proposed tax would be imposed on assets such as land and housing but experts have asked for caution.

The Ministry of Finance said Vietnam has no property tax as in other countries. The property-related tax policy has yet to create a stable source of revenue for the State budget since current land use tax revenue accounts for 0.03% of GDP and 0.15% of the nation’s total budget revenues. Elsewhere in the world, property tax is a main source of budget revenue.

Vietnam's per capita income has grown in recent years, from US$1,400 in 2013 to US$2,200 in 2016. The figure is forecast to climb to US$3,400 by 2020. Therefore, real estate ownership and investment would rise as a result.

The ministry has proposed three tax options for housing. In option 1, the owner of a home measuring over 200 square meters is subject to a tax of VND1,000-4,000 per square meter per year depending on the type of house. In option 2, the tax would be collected based on the value of the house but if the value is more than VND1 billion, the tax would be 0.03% of that value.

For option 3, the property tax would be levied from the second home onwards with an annual rate of VND1,000-4,000 per square meter per year. But those homes having less than two floors would be spared.

“This tax would lead secondary investors to set up real estate trading businesses, instead of operating as business individuals," said Le Hoang Chau, chairman of the HCMC Real Estate Association ( HoREA).

But he urged prudence in applying this tax. The tax should not be levied on social, resettlement and commercial homes worth less than VND1 billion, he said.

He called for an appropriate tax rate in the initial time. Those owning a second house or more should be taxed depending on quantity and value.

Stephen Wyatt, country head of Jones Lang LaSalle Vietnam, said it would be hard to determine a second home since people can circumvent the tax by allowing their relatives to register home ownership.

However, Vietnam might not apply this tax before 2020, Wyatt said, since there are no enough data and the application of information technology in management is still haphazard.

VIISA launches second portfolio of startups

The Vietnam Innovative Startup Accelerator  (VIISA) has continued its investment into Vietnam with12 startups admitted to the second batch of its accelerator program since Thursday.

The program’s director, Adrian Tan, told the Daily that in addition to Vietnamese startups, there are two from South Korea, one from Indonesia, and one from Ukraine.

Vietnamese enterprises have a chance to draw on the expertise of their foreign counterparts, and develop working relationships with them, he added.

VIISA invests US$15,000 in cash and US$15,000 worth of training, technical resources, office accommodation and access to more than 100 world-class mentors and investors. Promising teams will also get up to US$200,000 in follow-on funding.

The first batch of the program attracted the participation of eight Vietnamese startups in January. Meanwhile, the second batch started in April and got more than 160 applications from over 28 countries. The chosen startups are from diverse industries, ranging from media, artificial intelligence, agritech, edtech, on-demand platforms and sharing economy.

VIISA is a partnership between Dragon Capital, FPT Corporation and Hanwha Investment.

In related news, Start Jerusalem, a global competition organized by the Ministry of Foreign Affairs and the Jerusalem Development Authority, will bring together startups from various countries to compete for the opportunity to take part in a five-day innovation experience in Jerusalem, Israel, one of the world’s leading tech ecosystems.

This is a unique opportunity for entrepreneurs to connect and benefit from interactions with prominent local tech leaders from around the world, interactive fireside chats and panels, specially designed how-to workshops, site visits to some cutting edge technology companies, and exclusive networking meet-ups with the city’s startup community.

Following the success of Startup Israel in previous years, this year the Embassy of Israel in Vietnam, in collaboration with the National Agency for Technology Entrepreneurship and Commercialization Development under the Ministry of Science and Technology and Business Studies and Assistance Center will organize the startup competition to find who will win the ticket to Start Jerusalem 2017, which will take place in November.

Ring Road 3 in the offing

The Ministry of Transport is still working on a major project to build a ring road connecting HCMC and two neighboring provinces, Binh Duong and Long An, with a mid-term report on the project to come out in late October and a final one late this year.

The ministry met on Wednesday to discuss preparations for the Ring Road 3 project.

According to a report by the project’s consultant, the ministry approved the route of the project on January 13 and design work has been implemented since June. The consultant will send the ministry a mid-term report in October and a final report in December.

To ensure the project will be carried out on schedule, Deputy Minister of Transport Nguyen Ngoc Dong has asked the consultant to make clear scale, design and investment solutions in the final report.

Ring Road No. 3 is designed as an expressway with a total length of 90 kilometers, which will allow a maximum speed of 100 kilometers an hour.

The road will start at Ben Luc-Long Thanh Expressway in Dong Nai’s Nhon Trach, run through HCMC, Binh Duong and Long An, and end in Ben Luc.

The project would be divided into four sections. The first, which connects Nhon Trach and Tan Van in Dong Nai Province and is 34.3 kilometers long, has been approved by the ministry. Work was originally planned to begin last year but has been delayed.

The second section, Tan Van-Binh Chuan, is 16.7 kilometers long and has been opened to traffic.

The third section stretching from Binh Chuan to National Highway 22 in HCMC has a length of 19 kilometers. The last section, 28 kilometers, will connect National Highway 22 and Ben Luc.

The cost of the project, implemented by Cuu Long Corporation for Investment, Development and Project Management of Infrastructure, was put at VND55.8 trillion (US$2.44 billion) when the planning for the road was announced in 2011, with the cost for overpasses excluded. The capital would be sourced from the State budget, Government bond sales and official development assistance (ODA) loans.

Vietnam tops ASEAN in animal feed production

Vietnam is currently ASEAN’s biggest animal feed producer and the tenth biggest in the world, according to the Husbandry Department, Ministry of Agriculture and Rural Development. 

The country has more than 300 animal feed factories and over 200 facilities producing supplementary food, with total capacity of 31 million tonnes per year. 

Vietnam’s animal feed output increased from 400,000 tonnes in 1993 to 23.15 million tonnes in 2016, the world’s fastest growth in scale and production over the last 20 years. 

The Husbandry Department asked localities to limit the expansion of animal feed factories, especially in the Red River Delta, the southeast and the Mekong Delta.

Vietnam back in trade surplus in second half of July

Vietnam posted a trade surplus of US$429 million in the second half of July after falling into deficit for several months before, said the General Department of Vietnam Customs. This improvement helped push down the trade deficit in all of July.

According to the department’s data on import and export operations from July 16 to 31, the export sector brought in over US$9.41 billion, increasing by 14.1% compared to the first half of July. Import spending in the last two weeks of last month was over US$8.98 billion, up 6.5% against the first two weeks.

This led to a trade surplus of nearly US$430 million in the second half of July.

According to the General Department of Vietnam Customs, the country had a trade deficit of US$2.53 billion in the first seven months of this year, representing 2.2% of total export revenue.

January-July exports totaled over US$115.3 billion, up 18.8% over the same period last year. Meanwhile, imports in the period amounted to US$117.83 billion, up 23.6%.

At the Export Forum 2017 in HCMC on August 8, Nguyen Phu Hoa, deputy head of the Import-Export Department under the Ministry of Industry and Trade, forecast Vietnam’s trade deficit could reach about US$5 billion in all of 2017, 2.5% of total export turnover.

Hoa said the country could obtain US$200 billion from exports this year, up 13% year-on-year, while its imports would reach an estimated US$205 billion, a 17% increase.

In 2016, the nation’s trade deficit was US$2.7 billion.

Data of the General Department of Vietnam Customs shows the trade surplus in the second half of July was helped by higher export sales of some items. In particular, exports of machines, equipment, tools and other accessories surged 34.7%, or US$158 million, against July’s first half. Exports of phones and phone parts, footwear, iron and steel grew 7.5% (or US$110 million), 18.4% (or US$110 million) and 139.3% (or US$108 million) respectively.

The sectors that reported strong declines in export value included shipping with a drop of 77.3% (US$42 million), and oil with a 36.1% fall (US$13 million).

In the final two weeks of July, imports of phones and phone parts shot up 30.7%, or US$159 million, against the month’s first two weeks. Other commodities whose import rose included fuels with a 29.6% rise (or US$75 million), iron and steel with a 21% increase (or US$60 million), fertilizer with 113.6% (or US$54 million) and computers and electronic products with 3.8% (or US$54 million).

But imports of ordinary metals fell 20%, or US$50 million, and feedstuffs dipped 31.2%, or US$40 million. Imports of coal and minerals decreased 29.3% (or US$25 million) and 32.8% (or US$17 million) respectively.

Lending interest rates dropped in July

The State Bank of Vietnam revised down its prime interest rates in July and those of short-term loans for priority fields. 

As of June 20, interest rates of one-month, six-month, 12-month and 12-36 month deposits stood at 4.7 percent, 5.68 percent, 6.8 percent, 7.07 percent, respectively, said the National Financial Supervisory Commission. 

Lending rates for five priority fields have dropped to 6.5-6 percent per year. 

As of late July, credit growth hit 9.3 percent from late 2016 and 8.8 percent from the same period last year. Mid and long-term credit fell to nearly 53.9 percent of the total compared to 55.1 percent from late 2016. 

Short-term credit accounted for 46.1 percent of the total, higher than 44.9 percent recorded in late 2016.

According to the National Financial Supervisory Commission, interest rates are likely to fall later this year due to domestic and foreign factors. Specifically, the US dollar has dropped 7 percent from early this year while the US’s Federal Reserve is not expected to raise interest rates this year.

Citi Việt Nam named best corporate digital bank

Citi swept the country awards in the Corporate Digital Bank category, winning accolades for its performance in 15 countries and territories recognised by Global Finance.

The countries and territories include Việt Nam, Australia, Bangladesh, Hong Kong, India, Indonesia, Kazakhstan, Malaysia, New Zealand, Pakistan, Singapore, South Korea, Sri Lanka, the Philippines and Thailand.

In the World’s Best Corporate/Institutional Digital Banks in Asia Pacific category, Citi won five regional sub-category awards, including Most Innovative Digital Bank, Best Online Cash Management, Best Online Treasury Services, Best in Mobile Banking and Best Mobile Banking App.

“Being truly digital is fundamental to our strategy. We continuously invest in the next generation of technology, intuitive user interfaces and advanced online analytics, and are early adopters in exciting areas such as robotics, predictive analytics, blockchain distributed ledger technologies, and digital identity solutions,” said Rajesh Mehta, Citi’s Asia Pacific head of Treasury and Trade Solutions (TTS).

Citi’s TTS business has been at the forefront of innovation, with the introduction of a wide range of leading solutions.

“Citi’s goal is to be the world’s leading digital bank and deliver remarkable banking experiences to our clients, wherever they are. We have accelerated efforts to transform our model to be simpler, more nimble, highly relevant, scalable and far more digital,” said Natasha Ansell, managing director, Citi’s country officer for Việt Nam.

Tra Vinh sees strong increase in newly registered firms

Newly registered businesses in the Mekong Delta province of Tra Vinh have sharply increased since the start of the year, said the provincial People’s Committee.

Of the newly registered businesses, 35 were granted approval, tripling last year’s figure. Meanwhile, 52 billion VND (2.29 million USD) was added to 60 existing businesses.

Dong Van Lam, Chairman of the provincial People’s Committee, said to create a favourable investment climate, Tra Vinh province has implemented synchronous measures to improve its provincial competitiveness index. Local authorities hold monthly meetings with businesses to address their troubles.

The province has promoted the implementation of government’s resolution on developing businesses by 2020 and mulled over a project providing support for local start-ups in 2017-2020. In addition, it has enhanced investment promotion activities and administrative reform.

Tra Vinh is currently home to 1,948 businesses and 1,100 affiliates, with total registered capital of over 25.13 trillion VND (1.1 billion USD), generating jobs for more than 86,000 labourers. It aims to lure 4,000 new investors by 2020 and 7,500 ones by 2025.-

Forum promotes vegetables, fruits trade to China

A forum promoting trade in Vietnamese and Chinese vegetables and fruits took place in the northern border province of Lang Son on August 11. 

Speaking at the event, Vice Chairman of the provincial People’s Committee Ly Vinh Quang said Lang Son has an important geographical location in the Nanning – Lang Son – Hanoi – Hai Phong economic corridor, and has been a gateway for Vietnamese farm produce to access the Chinese market via Tan Thanh, Coc Nam and Huu Nghi border gates. 

In 2016, Lang Son’s border gates allowed the export of nearly 478,514 tonnes of dragon fruit; 223,455 tonnes of watermelon; 240,345 tonnes of longan fruit; 81,198 tonnes of litchi; 8,135 tonnes of rambutan; and 17,837 tonnes of dried cashew nuts to China. 

Over the past years, the province has opened additional auxiliary border gates such as Na Hinh, Co Sau, Binh Nghi, expanded roads leading to border gates, built infrastructure in border gates, and improved the capacity of goods transit and customs clearance. 

Quang took the occasion to commit all possible support to enterprises. 

Vice Mayor of Guangxi’s Chongzuo city said Chongzuo borders Lang Son province and shares similar customs and climate, adding that there remains room for bilateral cooperation in cultivation and farm produce processing. 

Each year, Vietnam exports 1,866,000 tonnes of farm produce worth 6.89 billion CNY to China via Chongzuo’s border gates. Vietnamese fruits such as litchi, mango and dragon fruits are popular in China. 

The Ministry of Industry and Trade’s Border and Mountainous Trade Department said farm produce, including fresh fruits are mostly exported to China via border gates, accounting for more than half of the total. Several commodities saw export growth such as rubber, cassava powder, fisheries, confectionary, coffee and tea. 

According to the Ministry of Agriculture and Rural Development’s Plant Protection Agency, Vietnam shipped more than 2 million tonnes of fruits and vegetables worth 1.6 billion USD to China last year. In the past seven months of this year, the country earned over 1.3 billion USD from exporting roughly 1.2 million tonnes of fruits and vegetables to the neighbour.

VN to improve competitiveness of major export products by 2020     

Viet Nam will improve the competitiveness of major export products to boost export value in line with the country’s economic restructuring and renovation of the growth model, according to a decision recently issued by the Prime Minister.

Under Decision 1137/QD-TTg to approve the project of improving competitiveness of Vietnamese export products by 2020 with a vision to 2030, Viet Nam plans to increase export value in 2020 to triple that of 2010, gain a trade balance in 2020 and achieve trade surplus in the 2021-30 period.

Accordingly, by 2020, the project would focus on increasing the quality and value of productsthat are advantageous for export to reach an average export revenue growth of 8 per cent per year during the 2016-20 period.

Exports of major agriculture and fishery products are planned to increase on average by 20 per cent and would be promoted in developed countries such as the European Union, Japan and Korea.

The project also targets to enable Vietnamese firms to participate in the global supply chain in several stages of high added value.

From 2021 to 2030, export growth is expected to reach 9-10 per cent per year. In addition, Viet Nam will have highly-competitive firms in each export product category.

The project will focus on two product categories with advantages for export, including agriculture and fishery, and processing industry products.

Products which will be in focus by 2020 include rice, coffee, rubber and fishery, as well as pepper, cashew, cassava, fruits and vegetables, along with garment and textile, footwear, wood products and handbags, in addition to umbrella, phones and components, computers and parts, cameras, transportation means, machinery and electric wires.

During the 2021-30 period, products to be improved in terms of competitiveness include tea, honey, raw materials of the garment and footwear sector, and plastics, as well as fertilisers and chemicals.

To achieve the goals, transforming production methods towards increasing the proportion of high value-added products is critical.

In addition, the export markets must be expanded together with developing national brands, products brands and business brands, while enhancing national competitiveness to create favourable conditions for firms.

Vietnam Airlines launches year’s biggest promotion

The national leading flag carrier Vietnam Airlines yesterday launched a big promotional program for domestic and international flights.

A one- way ticket for domestic flights will cost from VND 299,000, and a round trip ticket for international flights will be sold from VND 669,000.

Particularly, a one-way ticket of domestic flights departing from HCMC to other provinces will cost from VND 299,000 to 699,000 and a one-way ticket for flights from HCMC to Hanoi and vice verse will be offered at VND799,000.

Tickets on international flights to the Southeast and the Northeast Asian countries will be from US$ 29, US$ 49/ one wayticket and US$ 119, US$ 349 /return ticket. 

Air tickets to several destinations in Europe and Australia will be from US$ 249 to US$ 519.

The promotion program will officially run from August 15- 31 for passengers who plan to travel from August 15, 2017 to March 31, 2018.

The cheap price will also apply for passengers buying VNA Holidays package of Vietnam Airlines. 

The above prices exclude taxes and other additional fees.

UK tops importers of Vietnam’s prawn in EU in 2016

The United Kingdom was the largest importer of Vietnam’s prawns in the European Union (EU) in 2016, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

After strong growth throughout 2015 and the first three quarters of 2016, shrimp exports to the UK in the last quarter of 2016 fell by 3.9 percent. Despite that, exports rose by 4.2 percent for the entire year. 

In early 2017, Vietnamese shrimp shipments to this market grew well in January and February before declining in March. However, they rebounded in the next two months with year-on-year jumps of 62 percent and 150 percent, respectively. 

Total prawn exports to the UK hit nearly 59 million USD in the first five months of 2017, an increase of 34 percent from the same period last year.

The growth was largely due to the UK’s high demand for warm-water shrimp thanks to reasonable prices and a drop in supplies of cold-water shrimp, VASEP said, predicting the continued expansion of shrimp exports to the UK in the rest of this year.

Vietjet offers 200,000 zero-fare tickets for int’l routes

To welcome the most exciting travel season of the year, Vietjet Air will launch a five-day promotion from August 9-13, 2017 within 12:00–14:00 offering 200,000 super-promotional air tickets priced only from 0 USD.

The promotion is applied for all Vietjet’s international routes from Ho Chi Minh City, Hanoi, Da Nang, Hai Phong (Vietnam) to Seoul, Busan (the Republic of Korea) / Hong Kong / Kaohsiung, Taipei, Tainan, Taichung (Taiwan) / Singapore / Bangkok (Thailand) / Kuala Lumpur (Malaysia) / Yangon (Myanmar) / Siem Reap (Cambodia) with flight time being from September 1, 2017 to May 31, 2018.

The promotional tickets are available for booking within the golden hours from 12:00 to 14:00 (GMT 7) at www.vietjetair.com (also compatible with smartphones at https://m.vietjetair.com) or at www.facebook.com/vietjetvietnam (just click the “Booking” tab). 

Payment can be easily made with debit and credit cards of Visa, MasterCard, JCB, KCP and American Express and ATM cards issued by 29 Vietnamese banks that have been registered with internet banking.

Besides, Vietjet continues to increase flight frequency for many international routes. Accordingly, the Ho Chi Minh City-Seoul route will have 14 return flights a week from October 29, 2017, increasing from previous 7 return flights/week. The Da Nang-Seoul route will be also increased from the 7 return flights to 14 ones per week from November 6, 2017.

The Ho Chi Minh City-Seoul route will be operated with 2 return flights/day from October 29, 2017. The Ho Chi Minh City-Seoul flights depart from Ho Chi Minh City at 2:40 and 22:15 (local time) and arrive in Seoul at 9:50 and 5:25 (local time) respectively. The return flights take off from Seoul at 10:50 and 6:45 (local time) and land in Ho Chi Minh City at 14:20 and 10:15 respectively.

The Da Nang-Seoul route will be operated with 2 return flights/day from November 6, 2017. The Da Nang-Seoul flights depart from Da Nang at 22:55 and 23:55 (local time) and arrive in Seoul at 5:00 and 6:00 (local time) respectively. The return flights take off from Seoul at 6:15 and 6:45 (local time) and land in Da Nang at 9:20 and 9:50 respectively.

The transitioning weather is always favored by tourists to travel. This is also the best time for everyone to show care to their beloved ones by traveling to international destinations thanks to its cool weather.

With its high-quality services, special low-fare tickets and diverse ticket classes, Vietjet offers its passengers enjoyable flights with dynamic and friendly flight crew, comfy seats, amazing hot meals, special surprises from the airline’s inflight activities and amazing ticket fares through “12pm, It’s time to Vietjet” promotion.

Currently, the airline operates a fleet of 45 aircraft, including A320s and A321s, and operates over 350 flights per day. It currently operates 73 routes in Vietnam and across the region to international destinations such as Hong Kong, Thailand, Singapore, the Republic of Korea, Taiwan, Malaysia, Cambodia, China and Myanmar. Vietjet has flown nearly 40 million passengers so far.

Central Group threats the survival of Big C’s own-label brand manufacturers

At the end of 2016, Big C planned to stop distributing its own labelled products. This decision derives from Central Group’s acquisition of Big C in 2016. Accordingly, Central Group can use the Big C brand for ten years only. After this period, Central Group will have to change the brand name. It is expected that Big C Vietnam will be renamed in 2017.

The preparations for renaming this chain took place quickly, so most Big C-label providers were shocked.

Six years ago, the general director of Hung Thai Commerce One Member Company Limited (Hung Thai), one of the leading companies in tea manufacturing and processing in Thai Nguyen province, struck a partnership with Big C to produce the supermarket’s own tea products. As the deal was signed, Hung Thai borrowed VND5 billion ($220,000) from commercial banks to invest in a production line, a tea plantation area, and packaging facilities complying to Big C requirements.

Since then, Hung Thai provides the Big C brand of tea products. Its annual revenue was about VND3 billion ($132,000), but in early 2017, it decreased by a half, shocking Hung Thai.

“The Big C labels we had ordered before are left unused in the warehouse. We have signed contracts to collect raw material from farmers. If Central Group and Big C Vietnam cannot come to a mutual agreement, we may lose billions of VND and our enterprise may go bankrupt,” Hung Thai worried.

Currently the Big C-label products are still being sold, but Hung Thai grows worried as Big C has stopped promotion programmes to promote the sales of these products.

Hung Thai has focused on manufacturing Big C-label products for six years, with the hope that one day his products would be distributed in the global Big C system. The company's leader agreed to sell at the lowest price to meet Big C’s target of cheap price for everyone. During these six years, he tried to stabilise prices for Big C.

“It is my fault that I put all of my eggs in one basket. I could not even imagine such a big brand like Big C being acquired by another firm,” Hung said.

While waiting for the final decision of Central Group, Hung is trying to save himself. At present, he is cooperating with Vingroup to distribute his products in Vingroup’s retail system (Vinmart, Vinmart+) and he is negotiating with Lotte, Aeon, and Co-opmart to find new distribution channels.

Businesses in southern Vietnam slow in innovation

Enterprises in 20 cities and provinces in southern Vietnam have remained slow in technology innovation though the Index of Industrial Production (IIP) is higher  than the average of the country.

At the fourth Southern Industry and Trade Conference held in HCMC last Friday by the Ministry of Industry and Trade and the HCMC Department of Industry and Trade, enterprises in the south have medium or low production technologies and low competitiveness. 

The southern region encompasses HCMC, Can Tho, An Giang, Bac Lieu, Ba Ria-Vung Tau, Ben Tre, Binh Duong, Binh Phuoc, Binh Thuan, Ca Mau, Dong Nai, Dong Thap, Hau Giang, Kien Giang, Long An, Soc Trang, Tay Ninh, Tien Giang, Tra Vinh and Vinh Long.

Many small and medium enterprises in the region which make up a majority have been closed down due to limited finances and outdated technologies, among others.

HCMC vice chairman Le Thanh Liem said that if the southern cities and provinces make full use of their strengths, promote investment activity and expand markets, they could gain stronger growth, contribute to the economic development of the country and improve their competitiveness on domestic and international markets.

According to a report delivered at the conference, the 2016 IIP of the region surged 9.28% versus 2015, well above 7.5% nationwide. In particular, Tay Ninh, Ben Tre, Tien Giang, Long An, Soc Trang, Vinh Long, Binh Duong, Binh Phuoc and Kien Giang provinces posted high IIP.

At the conference, the 20 cities and provinces in the south set targets for 2017 including maintaining a higher IIP than the country’s average, increasing revenues from retail sales and services by 12% compared to last year to VND2,000 trillion and obtaining export growth of 11.6% year-on-year to nearly US$15 billion.

Lack of coordination affects industrial development plans in southern Vietnam

A lack of coordination, plus limited finances and low feasibility, has rendered industrial development plans ineffective in southern Vietnam, heard a conference in HCMC last week.

The conference on industrial development in southern cities and provinces was organized by the Agency for Regional Industry Development under the Ministry of Industry and Trade, and the HCMC Department of Industry and Trade.

Deputy head of the agency Do Thi Minh Tram said a slew of industrial promotion programs focus on conventional activities.

She said certain industrial growth stimulus schemes are not realistic in rural areas, so some have been adjusted or even halted.

Shortages of facilities, equipment, manpower and finances are major setbacks for industrial  promotion activities in southern localities. As a result, representatives of industrial promotion centers expressed concern that their plans cannot be accomplished this year.

Disbursement of State capital in the first six months of this year met a mere 18.9% of the full-year target, she noted. Ba Ria-Vung Tau and Soc Trang provinces have yet to start their disbursement process while others like Tay Ninh, Tien Giang and Hau Giang have achieved 1-6% of their all-year goals.

Although industrial promotion activities were first carried out more than 10 years ago, there is no complete legal framework.

Tran Quoc Tuan, director of Tra Vinh Province’s Department of Industry and Trade, said trade promotion plans should pay special attention to facilitation of agricultural and aquatic product consumption in the Mekong Delta.

He said this can be done by improving factories, cold storage facilities, water treatment, and input supply, and upgrading production chains. In addition, startups should be encouraged to translate new business ideas into reality.

Meanwhile, Phan Thi Khanh Duyen, director of an industry promotion and consultation center in Binh Duong Province, said local governments should come up with major schemes for tapping their potential and promoting their unique products.

Just five months left to switch to ‘Single Window’ system

Ministries and ministerial-level agencies have five more months to put another 108 administrative procedures on the national “Single Window” system, allowing businesses to benefit from the one-stop shop mechanism.

They have registered to get 130 procedures on the Single Window system, said Deputy Prime Minister Vuong Dinh Hue, but only 22 of them are ready.

He was speaking at the recent second meeting of the National Steering Committee for the ASEAN Single Window, National Single Window and trade facilitation.

According to an announcement the Government Office issued on August 1, it has taken seven months to make 22 procedures ready on the system.

One of the reasons is that five ministries and agencies have not issued specific action plans to carry out the Prime Minister’s decision on the implementation of the National Single Window and the ASEAN Single Window in the 2016-2020 period.

In addition, incompatible information technology facilities of ministries and agencies, time-consuming investment procedures and insufficient capital for information technology investment have led to delays.

The National Steering Committee required five ministries and agencies to make known their action plans for implementation of the decision of the PM this month.

The Ministry of Finance would coordinate with relevant ministries and agencies to draft a decree on procedures for investment in information technology.

VNA/VNS/VOV/SGT/SGGP/TT/TN/Dantri/VNEVET