Exporters look to US retailers

The fastest and shortest route to the US market was through retail channels, an official said at a seminar on exporting to the US held in HCM City yesterday.

"By doing this, they can get updated market information and keep up with consumer trends and tastes," said Nguyen Hong Duong, deputy director of the Ministry of Industry and Trade's American Market Department.

"They will also be able to follow the US's strict regulations on food safety and hygiene, as well as technical and quality standards," he added.

Exporters must improve the quality of their goods and trademarks to increase their competitiveness in the demanding US market, he said.

Duong also pointed out that the Government should develop new policies to help exporters access American retail channels.

Speaking at the conference, Nguyen Thang Vuong, commercial attache at the Embassy of Viet Nam's trade office in US, said exporters should identify the US market's demands and requirements, as they could vary substantially from other regions.

Moreover, they should be aware of the US's sophisticated technical trade barriers for a wide range of imported products, he added.

Still, exporters should give priority to choosing proper distribution channels such as retail supermarkets like the Kroger Group, the US's second-largest retail chain.

Tim Kelbel, vice president of corporate brands and global sourcing at Kroger, said his company was seeking "a wide range of products, especially in sectors that are strong in Viet Nam".

"Our interests are coffee, cashew nuts, fruit, vegetables, seafood, coconut products, spices, rice and wood products," he said.

In recent years, Kroger had imported only US$200-300 million worth of goods from Viet Nam, but the potential for export growth was high, he said.

To increase the export growth, Kelbel urged Vietnamese exporters to meet food safety standards such as Global GAP, Food Safety System Certification 22000, International Featured Standards, HACCP and BRC Global Standards.

Kroger has 786 convenience stores, 2,424 supermarkets and multi-department stores in 31 states in the US.

Bui Thi Thanh An, head of the Viet Nam Trade Promotion Agency (Vietrade) in HCM City branch, said exports to the US had reached $20 billion last year, an increase of 17 per cent compared to 2011.

In the first quarter of this year, export turnover to the US rose by 16.7 per cent over the same period of last year.

Viet Nam's exports to the US were expected to reach a total of $27 billion this year, she said.

The seminar was organised by Vietrade in collaboration with Kroger and the Embassy of Viet Nam's trade office in the US.

Can Tho solves difficulties for real estate sector

The People's Committee of Can Tho held a meeting with the city's real estate enterprises last Friday in a bid to remove obstacles facing their business operations.

Firms presenting at the meeting complained about the city's regulation which call for them to deposit 3 per cent of the investment for each real estate project, saying that the rate was too high and was hindering businesses which are already struggling with capital shortages.

The time and cost needed for businesses to fulfil administrative procedures was also problematic, the firms said. They called for more support from local authorities to help them secure investment, clear land and develop affordable housing projects.-

HCM City steps up support for struggling firms

The municipal administration plans to step up efforts to help local enterprises surmount difficulties and stabilise production and other business activities, a Vietnam Economic Times report said.

It cited a report by the HCM City Party Committee as saying that City's authorities would continue co-operating with the local State Bank of Viet Nam's branch to strengthen control over activities of local credit institutions.

It would also ensure flexible management and operation of local gold and foreign exchange markets, the report said.

The City will continue acting as a bridge to connect commercial banks with local enterprises, and direct authorised agencies to seriously implement policies related to tax extensions, reductions and refunds.

"The Vietnamese give priority to Vietnamese goods" campaign will be promoted further and enterprises encouraged to invest in advanced production technology and equipment, improve product quality and sharpen their competitiveness.

The City will pay more attention to expanding the distribution network for Vietnamese goods with diversified sales approaches, and to balancing commodity supply and demand.

It will also initiate measures and mechanisms to support enterprises in reducing their inventories through greater consumption, encouraging them to sell products at industrial parks and rural and remote areas with attractive promotion programmes.

Reviewing the City's first-quarter performance, the report noted that the city had set up five working teams to implement Resolution No 02/NQ-CP issued by the Government in January on removing difficulties in production and trade, dealing with non-performing loans and supporting the market.

Several support programmes for local enterprises had already been carried out and achieved positive results, the report said.

In its role as a go-between, the City has created opportunities for many enterprises to access cheap bank loans. As of April 18, local banks had signed loans worth VND102.5 trillion (US$4.88 billion) at interest rates of between 9 and 11 per cent per year with local enterprises and household businesses involved in the five prioritised sectors.

Several trade promotion activities designed to help enterprises to sell their products, enhance brand recognition and find new partners had been implemented, the report said.

It said City officials had organised meetings with enterprises to understand their practical situation and offer timely help.

As a result, production and trade have showed encouraging signs of recovery in the first four months of the year.

Safe vegetables lack stable outlets

As people becoming increasingly concerned about food safety, authorities, professional agencies, and farmers are paying more attention to producing safe vegetables.

But, delegates told an agricultural extension forum on producing vegetables following Vietnamese Good Agricultural Practices (VietGap) in HCM City last week that the lack of stable outlets and high prices deter farmers from growing them.

Le Thanh Tung of the Cultivation Department said the country had a total of around 823,700ha under vegetables, with safe techniques practised on 16,800ha.

"Only 491ha have VietGap and other GAP certificates, small compared to the total vegetable production area," he said.

But with the increasing demand for safe foods, many co-operatives and farmers are focusing on safe production methods like VietGAP in growing vegetables, according to Tung.

The small scale of production and lack of co-operation among farmers, co-operatives, and businesses, however, cause difficulties in applying GAP.

Besides, the outlets for GAP products are not stable and there is not much difference between prices of normal and GAP-certified vegetables, discouraging farmers.

Dr Vo Mai, deputy chairwoman of the Viet Nam Gardening Association, said: "Consumers find it hard to identify GAP-certified vegetables due to a lack of logo."

Prof Dr Nguyen Tho blamed authorities for their inefficiency, saying while growers of safe vegetable have difficulty in finding outlets for their produce, many consumers want safe vegetables but do not know where to find them.

Dr Duong Hoa Xo, director of the HCM City Biotechnology Centre, said GAP ensured the health of both producers and consumers, reduced environmental pollution, and resulted in production of safe and healthy foods with easily traceable origins.

It had been applied in Viet Nam for five to seven years, but the results had not met expectations.

In HCM City, only 132.7ha of vegetable farms had received VietGap certification by the end of last year with the result that VietGap vegetables met only 1 per cent of the city's vegetable needs.

Though supermarkets and distributors had tied up with co-operatives growing safe vegetables, this had somehow not been effective, he said.

Delegates suggested many measures to increase output of safe vegetables.

Tung of the Cultivation Department called on local authorities to zone safe vegetable production areas, upgrade infrastructure, and subsidise farmers' expenses for obtaining GAP certificates and marketing their produce.

Mai said: "The Government should quickly come up with a logo for VietGap so that consumers can distinguish it from normal [vegetables]."

Agricultural extension centres should organise training courses to raise awareness among farmers about GAP and instruct them in GAP production techniques, delegates said.

They called for establishing close links between enterprises and farmers, with the former ensuring there are outlets for all GAP-standard produce.

More than 500 delegates, including scientists, provincial agricultural officials, and farmers from 21 provinces and cities in the south attended the forum.

Rice exports need to be streamlined

Deputy Minister of Finance Hoang Anh Tuan has asked relevant agencies to speed up a draft decree on rice exports so that suggestions from relevant ministries can be submitted to the Government for approval.

One of the key tenets of this draft decree is to re-organise rice exporting activities, so that market competitiveness can be assured.

To deal with difficulties in rice exports, Tuan urged the Import-Export Department of the Ministry of Industry and Trade and Viet Nam Food Association (VFA) to focus on assessing and analysing market issues, according to the news website Chinhphu.vn.

According to VFA, in April alone, the country's rice exports are estimated to reach 807,000 tonnes, worth approximately US$340 million. In the first four months of this year, rice exports were estimated to have reached 2.38 million tonnes (an increase of 7.6 per cent) with an export turnover of more than $1 billion. Many rice export contracts were signed in the first four months of 2013, but the export value had remained low.

During the first four months, rice exporters were contracted to ship 4,231 million tonnes of rice, an increase of 9.92 per cent over the same period last year, but they failed to deliver on time.

Director of the Import-Export Department Phan Van Chinh said the rice export price fell for most countries due to excess global supply, as Thailand sought to clear its stockpiles of at least 12 million tonnes. In addition, India and Pakistan had bumper crops which helped them to improve on previously poor rice export figures. Myanmar has also entered the export market, adding further to the supply chain and thus lowering rice export prices.

Chinh pointed out that Vietnamese rice export prices had never been higher than Thai rice. Furthermore, Vietnamese rice was less competitive in Africa compared to Pakistan and India, due to higher transport costs.

He added that weaker Vietnamese rice exporters often offered low rice prices for export to quickly return their capital and being hit by high lending rates. Meanwhile, the winter-spring crop this year is expected to harvest between 3.7 million to 3.8 million tonnes of rice.

To handle difficulties for farm produce and seafood products in Cuu Long (Mekong) Delta, the Ministry of Industry and Trade and the Ministry of Agriculture and Rural Development will meet with local authorities to review the difficulties and seek solutions to eradicate them.

Google Display Network launched in Vietnam

The Google Display Network was launched in Vietnam on May 13.

The Google Display Network offers a collection of websites, from small niche blogs to major sites, for advertisers to place their ads on.

It will be supported with an online and offline marketing campaign and a series of introductory.

According to James McClure, Google’s Emerging Market Development Manager for Southeast and South Asia, display advertising is a type of multimedia advertising that helps advertisers create better ads.

He expressed his hope that Vietnamese brands will make their adverts that attract potential customers at first sight.

According to Google, seven of the 10 most visited websites in Vietnam are partners of the Google Display Network.-

Over 5 trillion VND mobilised from Gov’s bonds

The Hanoi Stock Exchange (HNX) sold 5.35 trillion VND (254.7 million USD) worth of Government bonds issued by the State Treasury at an auction on May 13.

The sum included 2 trillion VND in two-year bonds with an annual interest rate of 7.13 percent, 2 trillion VND in three-year bonds with an annual interest rate of 7.5 percent and 1.35 trillion VND in five-year bonds with an annual interest rate of 8.45 percent.

A total of 7 trillion VND worth of Government bonds were put out for tender on the day.

The State Treasury has so far this year mobilised more than 73 trillion VND (3.47 billion USD) worth of Government bonds via tenders.

State asset management firm handed tax bread boost

The National Assembly’s Finance and Budget Committee has ratified a Government proposal to make the planned Vietnam Asset Management Company (VAMC) exempt from value added tax (VAT) and corporate income tax (CIT).

The move was made after receiving reports on amendments and supplements to the laws on VAT and CIT, which will be presented to the Assembly for approval at its next meeting starting on May 20.

Accordingly, debt or loan security sold by the VAMC would not be subject to VAT while the VAMC would not have to pay corporate taxes.

However, the committee noted that the Government should clarify functions, organisation and expected incomes of the VAMC as a basis of considering tax exemption for the firm.

The planned VAMC, a 100-percent State-owned organisation established by the Government to handle bad debts of credit institutions in Vietnam , has been approved in principle by the Politburo.

Last month, Minister and chairman of the Government Office Vu Duc Dam said the proposed VAMC was only one of the measures to deal with bad debts.

The State Bank of Vietnam and commercial banks had made efforts to settle their bad debts, the minister said, however, each bank had to form their own hedge funds under the State Bank’s instructions.-

Hai Duong IZs lured 3 bln USD in investment

The northern Hai Duong province’s industrial parks have attracted 163 investment projects from 30 countries and territories worldwide, with total registered capital of 3 billion USD since 2003, according to the provincial Industrial Park (IP) Management Board.

The board, which marked its 10th year in operation at a ceremony on May 13, said most of the projects were invested by foreign investors, focusing on electric, electronic and garment and textile industries.

Foreign-invested projects mostly apply advanced and environmentally-friendly technology to their production. Currently, procedures are underway for two pending projects in Dai An IP, including a 200 million USD Canada International Hospital and a 65 million USD project to build workshops for lease.

Hai Duong IP Management Board said it will continue to build and develop infrastructure facilities in the IPs, particularly waste water treatment factories, and improve investment environment to lure more projects with large scales, high technology values.

At the same time, the board will monitor the operations of enterprises in the IP to ensure they comply with the law and take measures to care for material and spiritual life of workers.

Speaking on the occasion, Deputy Minister of Planning and Investment Nguyen Van Hieu affirmed that Hai Duong province and the provincial IPs Management Board have been able to make use of local advantages in terms of geological location and human resources to attract investment.

The ministry will work closely with the province to create more favourable conditions for businesses and projects in the locality to develop, contribute to the national industrialisation and modernisation process, he said.-

Russia ups its stake in Vietnam

The economic ties between Vietnam and Russia are on the upswing, including more than $1 billion worth of rubles registered into seven major projects in Vietnam since the outset of 2013.

Those investments moved Russian direct investment capital to Vietnam to more than $2 billion, covering 93 separate projects by the end of April this year.

In the first four months of 2013, Russia ranked the third position among countries and territories investing in Vietnam. Meanwhile, it ranked 18th among foreign investors in Vietnam based on accumulated registered investment capital.

Meanwhile, the total accumulated investment capital of Vietnamese businesses in Russia came to $4.6 billion committed into 17 projects of which more than $2.36 billion was from the Vietnamese side. The recent Russian surge includes the ramped-up joint venture Rusvietpetro, a partnership involving state-run PetroVietnam. Rusvietpetro scaled up its investment to $1.4 billion, turning Russia into the leading outbound investment market by Vietnamese investors thus far.

Those investment figures are expected to go up further since it was reported that during the four-day visit to Russia from May 12-15, Vietnamese Prime Minister Nguyen Tan Dung will witness the signing of an investment cooperative agreement between PetroVietnam and Russian counterpart Zarubezhneft. Accordingly, the two parties envisage a new joint venture setup in Russia to spur offshore oil and gas extraction.

In parallel to the deal with Zarubezhneft, PetroVietnam has also reached cooperative agreements with Russian partners Gazprom and Rosneft for tapping oil and gas potential both in Russia and Vietnam, as well as building petro-chemical refinery plants and promoting product distribution in Vietnam.

In Vietnam, the Vietsovpetro joint venture, after setting the record of extracting the 200 millionth tonne of oil last August, plans to build a modern drilling platform at Gau Trang (White Bear) field and two other facilities BK16 and BK27, striving to offset for output shortfall at Bach Ho (White Tiger) field.

In mid-April this year, the Binh Dinh Provincial Economic Zone Management Authority gave the nod for Russia’s Bus Centre Met Company Limited to develop a $1 billion facility to manufacture and assemble buses, auto parts and agricultural machineries in the central Binh Dinh province. Construction is slated to start by the end of 2013.

Also in April, Micran, a Russian leading group on research and manufacture of liaison and communication, microwave, information privacy, measuring, positioning and control equipment had made a foray to Vietnam hunting for investment opportunities.

Another Russian business mission consisted of seven companies like Sermesstroy, Oliva and Faradey also came to Vietnam last month, seeking cooperative opportunities.

“Besides cooperative deals on technology transfer and training, Russian companies want to tie out with Vietnamese counterparts in forming business joint-ventures,” said Strozaeva Lubov Viktorovna, the head of the Russian business group to Vietnam.

Triple Eye’s good health Hai Duong

Triple Eye Infrastructure Corporation is getting closer to developing an international standard hospital in northern Hai Duong province.

Mai Duc Chon, head of Hai Duong Industrial Parks Management Authority, told VIR the Canada-based firm was close to getting an investment licence for the project.

“The investor is eager to cooperate with us to complete documents. Currently all documents are being handled,” said Chon.

Triple Eye Infrastructure Corporation in association with Vietnam’s Dai An, plans to build a 200-bed international hospital in Hai Duong, worth $160 million for the first phase.

Triple Eye’s first investment project in Vietnam and the first international hospital in Hai Duong as well, was expected to come online in 2015 to serve 20,000 labourers in Dai An Industrial Park as well as residents in Hai Duong province, said Chon.

Vietnam has 20.5 hospital beds for every 10,000 citizens. This ratio is low compared to the 33 beds considered to be the minimum level set by the World Health Organization.

A $400 million healthcare complex developed by Hoa Lam-Shangri-La is expected to be operational this year, in Ho Chi Minh City.

However, Vietnamese American International Hospital with 100 beds in Hanoi stayed in nail space after starting its construction in 2007.

Vingroup last year put a 600-bed hospital in Hanoi into operation that also contributes to easing the overloading situation of existing ones and offer hi-quality healthcare services for locals and foreigners in Hanoi and surrounding provinces.

Mega refinery project gains momentum

Phu Yen Provincial People’s Committee is approaching the final step to grant an amended investment certificate for a $3.1 billion oil refinery and petrochemical project.

Tran Quang Nhat, vice chairman of the committee, said the authorities “are determined” to hand over 450 hectares to UK-headquartered Technostar Management this year for the construction of the oil refinery and petrochemical project. The site is located in Hoa Tam industrial park, South Phu Yen Economic Zone.

Technostar Management, through its wholly-owned subsidiary Vung Ro Petroleum, in 2007 obtained an investment certificate for building a $1.7 billion oil refinery in Vung Ro area, Phu Yen province, which will have annual capacity of four million tonnes. But due to the change of business strategy, the firm proposed the government expand annual capacity to eight million tonnes, with total investment cost of more than $3 billion.

Because of the capacity expansion, Technostar asked for relocating its project to Hoa Tam industrial park because the current site in Vung Ro area was too small for the expanded refinery.

“This is a very important project. We cannot miss this opportunity to boost the economic development of the province,” said Nhat. He added that the provincial committee would reduce the scale of Hoa Tam industrial park to provide land to Vung Ro Petroleum.

Three years ago the province granted an investment certificate to Hiep Hoa Phat Company for developing Hoa Tam industrial park, which covers around 2,300ha. However, the developer has not started construction and is still in steps of making master plan for the industrial park. The provincial committee has also not handed over land to Hiep Hoa Phat because of the firm’s slow progress.

“If we wait for Hiep Hoa Phat to complete the master plan and build the infrastructure system, we cannot ensure timeline for the construction of the oil refinery and petrochemical project,” said Nhat, explaining why the provincial committee decided to scale down site of Hiep Hoa Phat’s project.

The Government Office, in an announcement released in February, also stated that Prime Minister Nguyen Tan Dung also approved the expansion proposal of Vung Ro Petroleum, and he also allowed the investor to relocated the project.

Meanwhile, the Ministry of Planning and Investment, in an earlier document sent to the prime minister, stated that Phu Yen People’s Committee should hand over land directly to Vung Ro Petroleum for ensuring construction timeline of the project, because Hiep Hoa Phat had not yet developed infrastructure in this site.

Nhat said the provincial committee would compensate Hiep Hoa Phat for the cost of researching and making master plan for its project.

“We will try our best to help Vung Ro Petroleum start construction of the project within the third quarter this year,” said Nhat.

In August 2012, Vung Ro Petroleum reached a technology transfer agreement with Honeywell’s UOP, a leading international supplier and licensor for the petroleum refining and petrochemical production. This agreement aims to ensure that Vung Ro Petroleum owns the latest petroleum refining technology.

Nguyen Chi Hien, director of Phu Yen Department of Planning and Investment revealed that Vung Ro Petroleum had spent $42 million preparing the project and would sign a construction contract worth $287 million following the granting of the amended investment certificate. The company has deposited $5 million to local authorities to show its commitment in pursuing the project.

The refinery will not only contribute to the improvement of investment climate, but is expected to also notably contribute to State budget as Hien estimates this oil project will generate around $111 million of taxes each year while creating 1,000 jobs for residents.

Can Tho seeks bids for port complex

Can Tho People’s Committee is calling on investors to help develop an international port complex and logistics  project on 110 hectares at the Hung Phu I Industrial Park.

Vo Thanh Hung, head of Can Tho Export Processing and Industrial Parks Management Authority, said that according to the newly adjusted decision approved by the government last month, the province would enlarge the existing Cai Cui port, adding this new port and logistics development.

Hung said that top priority would be given to Saigon- Can Tho Industrial Park Joint Stock Company under Saigon Invest Group (SIG). It is one of the leading domestic private groups that obtained an investment certificate to develop 262 hectares Hung Phu I IP 10 years ago. So far, the investor has not yet finished site clearance.

“In case, Saigon-Can Tho Industrial Park Joint Stock Company refuses to pursue the international port complex and logistic area project, this company will only develop 152 hectares out of the 262ha Hung Phu I IP and the province will call other investor to deploy the port project,” added Hung.

As of last week, Saigon-Can Tho Industrial Park Joint Stock Company had not responded to the new development plan.

Hung said the 110ha port project would be similar to Cai Mep Thi Vai international port complex’s model. When entirely completed, the development could meet the needs of marine transportation and international trade in the future, he said. It would also make a positive contribution to speeding up the socio-economic development of the Mekong River Delta area and the province.

According to the latest figure from Can Tho Export Processing and Industrial Parks Management Authority, at present, only two out of eight industrial parks namely Tra Noc I and Tra Noc II with total area of 292ha have leased all of their space. In the first four months of this years, the two industrial parks granted investment certificate for four projects including two foreign direct investment projects.

UK player eyes power

Graham Bell and Associates Limited is eager to invest in  Kien Luong thermal power and port complex, one of the largest energy projects in Vietnam.

The UK firm recently sent a document to Kien Giang Provincial People’s Committee to express its interest in the complex, which is now mainly developed by the domestic private Tan Tao Group.

Tan Tao is facing the possible withdrawal of its investment certificate because the construction has been delayed for two years amid the group’s financial trouble. The complex is considered vital as the demand for electricity in the southern province and Vietnam outpaces the supply.

Kien Luong power and port complex was licenced in January 2008. Located in southern Kien Luong province, approximately 300 kilometres south of Ho Chi Minh City, the complex with the estimated investment capital of $7 billion, would have the total generation capacity of up to 4,400-5,200 megawatts. It also features the deepwater seaport Nam Du.

Huynh Van Gianh, director of Kien Giang Provincial Department of Industry and Trade, told VIR that Graham Bell and Associates Limited could ask for being a new developer of the complex instead of setting up a joint venture with Tan Tao Group.

“Currently, we are waiting for the governmental guidelines and those from the ministries of Industry and Trade and Planning and Investment,” said Giang, adding that Tan Tao Group had poured about VND800 billion ($40 million) into site clearance of the project.

“The end of this June is the deadline for Tan Tao Group to give us the answer if it could continue carrying out the project. We already sent the documents to the investor requesting it to explain the delay. However, there has been no feedback since last year,” he said

Under Vietnam’s power development strategy until 2020, Kien Luong power complex would start commercial operation in 2018.

Minister of Industry and Trade Vu Huy Hoang also gave a warning to the domestic investor in his working visit to Kien Giang province late last month.

Previously, Tan Tao Group general director Thai Van Men said the firm had disbursed $250 million into Kien Luong complex and explained that the firm was stalling the construction because it had not yet received the governmental guarantee and undertaking agreement (GGU) for this giant project. Tan Tao Group’s equity in this project is equal to 20 per cent of the total investment capital, or $1.4 billion.

AIA makes strong gains in Q1

Life insurer AIA Vietnam in the first quarter of the year saw the value of new business up 65% versus the same period of 2012 while its annualized new premiums increased 40%.

In a statement released last Friday, Stephen Clark, CEO of AIA Vietnam, ascribed these results to an improvement of AIA Vietnam sales agents.

Concerning the insurer’s development strategies in 2013 and following years, Clark said the company remains committed to developing a more professional agency, and continually improving customer services and insurance products.

“AIA’s goals are long-term and to this end, we continue to focus on building up strong momentum and help AIA become a benchmark for insurance professionalism in this country, rather than just short-term, incremental improvements,” he noted.

LED lamps not yet popular in Vietnam

Light-emitting diode (LED) lamps have an edge over conventional sources of lighting, but this technology has not become popular in Vietnam because of its prohibitively high cost, heard a workshop in HCMC.

The workshop was held last Friday by the HCMC Sub-Directorate for Standards, Metrology and Quality in collaboration with Rang Dong Light Source and Vacuum Flask Company.

According to the HCMC Energy Conservation Center, LED lamps have high luminescence efficiency, currently two times higher than fluorescent lamps.

Each LED bulb can be used for 100,000 hours, 8-10 times longer than the lifespan of fluorescent lamps. In addition, LED lamps are environmentally friendly.

Professor Phan Hong Khoi, director of the high-efficiency public lighting project, said the current cost of a LED lamp is far higher than other sources of lighting.

What is more, Vietnam does not have any policy to encourage production and use of LED lamps.

With large-scale production and cost reduction, LED lamps can replace the traditional lighting products, he said.

Dr. Le Dinh Phuong at the HCMC University of Technology suggested the Government offer preferential tariffs for import of components to mass produce LED lamps. Tax incentives will encourage large-scale production and thus bring down production costs.

Trinh Minh Tam, deputy director of the HCMC Department of Science and Technology, said that due to climate change, hydropower reservoirs would face a severe water shortage, leading to a power undersupply next year. Therefore, it is urgent to find ways to save power.

Exporters urged to take advantage of Russia tariff cuts

Local companies should make full use of preferential tariffs offered by Russia under its WTO commitments to boost exports to this market, said an expert.

Vietnamese agro-products now enjoy 30-50% tariff cuts in Russia. Under Russia’s WTO commitments on tariffs and quotas, the average tariff for goods imported into Russia has been brought down to 7.8% from 9.5%, and the average duty for agro-products has been cut to 10.8% from 13.2%.

Such commitments are favorable for the major items Vietnam exports to Russia, including seafood, computers, electronic products, textile-garment, leather-footwear and farm produce.

In the past two years, local exporters have effectively benefited from the tax incentives provided by Russia, with exports to this market growing 30% per year.

By the end of the first quarter, Vietnam had exported US$417.95 million worth of products to Russia, up 34.31% over the same period last year. The major export items were rice, textile-garment, leather-shoe, rubber, seafood, vegetables, cashew and tea, according to the Ministry of Industry and Trade.

Cell phones and components brought in the largest export turnover, US$197.88 million, up 55.59% year-on-year, accounting for 47% of the total turnover of the products exported to Russia.

Goods for export to Russia should be carefully packed, with labels showing the names of exporters and contracts.

In addition, local firms should pay attention to the nature of their products, delivery means and weather conditions, said the trade ministry.

Economy remains weak: IMF

The economy will continue to be as bleak this year as in 2012, said Sanjay Kalra, resident representative of the International Monetary Fund (IMF) in Vietnam.

Speaking at a seminar on financial and budgetary issues held by the Finance and Budget Committee of the National Assembly (NA) in Hanoi last Saturday, Kalra remarked the economy was barely growing and domestic demand was shrinking.

The economic outlook for Vietnam in 2013 is similar to that in 2012, the year with the lowest economic growth in ten years, he said.

Such a comment was given after IMF had revised its growth forecast for Vietnam to 5.2% from 5.8%, the largest reduction, after Singapore, among ASEAN countries.

The economy is making adjustments and can hardly obtain high growth. Not all cities can build airports and seaports now, and each project must be considered more carefully, said the IMF representative.

He stated economic recovery greatly depends on economic restructuring, but this process is moving at a very slow pace.

NA Deputy Tran Du Lich asked Kalra whether public investment, banking or State-owned enterprises (SOEs) should be the priority for restructuring. He replied the banking system should be reformed in order to lower interest rates.

“I think it is a must to reduce bad debt in the banking system. Banks must accurately report on their bad debt,” he said.

He complained there was not much information about SOEs. Up-to-date information about SOEs is a prerequisite for reliable assessment, he said.

Learning by experience of the last two rounds of inflation, the Government should focus on stabilizing the macro-economy rather than rushing to do something, for example, stimulating economic growth, which is not a sustainable way, he said.

Dr. Pham Hong Son, rector of the University of Economics, said reforms in Vietnam would be costly, but such costs had not been carefully calculated.

Dinh Van Nha, vice chairman of the NA Finance and Budget Committee, said the State had not allocated any budget for reform.

He emphasized the need to restore confidence among the people and the business community, which had been severely undermined.

According to IMF, inflation is in decline. Inflation in April rose 6.5% over the same period last year.

Meanwhile, the Vietnamese dong/ U.S. dollar exchange rate tends to be stable this year. The budget deficit is estimated at 4% of GDP, versus 4.8% approved by the NA.

Gov’t permits oil refinery in Binh Dinh Province

Deputy Prime Minister Hoang Trung Hai has permitted the implementation of the US$27 billion oil refinery project in Nhon Hoi Economic Zone in the central province of Binh Dinh, said Ho Quoc Dung, deputy chairman of the provincial People’s Committee on May 12.

The Government tasked the provincial People’s Committee to guide the project investor--Petroleum Corporation of Thailand, to submit an environment feasibility report to submit to the Ministry of Industry and Trade and the Ministry of Natural Resources and Environment for approval.

The investor will spend the next two years to bid for and choose contractors. They will then continue to set up a viability report and other investment procedures.

According to Mr. Dung, the oil refinery project in Nhon Hoi Economic Zone will be the largest in Vietnam. Binh Dinh Province has worked with the Thai investor on the project for three years prior to submitting the first feasibility report to the Government.

The Nhon Hoi oil refinery is expected to be built over an area of 2,000 hectares at a total capital cost of $27 billion. The plant will have capacity to process 660,000 barrels of crude oil a day or 30 million tons a year.

Crude oil source for the plant will be imported from the Middle East, Africa, southern and central America.

Hanoi stimulates tourism demand in summer

The number of customers booking tours to popular destinations in the central and southern regions increased by 20-25 percent against the same period last year.

Hanoians’ demand for domestic and foreign tours usually climbs as summer approaches, but this year, the demand is expected to rise due to numerous tourism promotion programmes launched by travel agencies.

The Vietravel Company, which has close links with a network of prestigious domestic and international airlines, has provided May tours at discount prices between VND2 and 5 million (US$95 – 238) from Hanoi to central and southern destinations like Danang , Can Tho and Phu Quoc Island.

In coordination with Vietnam Airlines, it has launched tour promotion programmes to regional countries during this year’s summer.

The Hanoi Red Tours Joint Stock Company is also offering a 20 – 50 percent discount on package tours.

The low-cost airline VietJetAir, in response to the tourism promotion programmes, is offering VND200,000 (US$10) tickets to passengers travelling from Hanoi and HCM City to Bangkok, Thailand this June.

Recently, the Vietnam National Administration of Tourism and the Hanoi Department of Culture, Sports, and Tourism have worked together to promote the city’s development of tourism-related activities.

Tourism cooperation programmes are vital to create quality tourism products at reasonable prices, and promote tourism in Vietnam and Hanoi in particular, said Mai Tien Dung, Deputy Director of the Hanoi Department of Culture, Sports, and Tourism.

ASEAN seminar focuses on geology, mineral resources

More than 300 delegates are gathering for the first ASEAN international conference on geology and natural resources (GeoASEAN 1) in Vietnam’s Ba Ria-Vung Tau province on May 13-14.

The participants come from ASEAN members and a number of countries with strong mining industries such as China, Japan, the Republic of Korea, Australia, India, Switzerland and South Africa.

They will share experiences and discuss ways to explore mineral resources to boost sustainable socio-economic development and reduce negative environmental impacts.

Representatives from the Vietnamese Ministry of Natural Resources and Environment (MONRE) and Ministry of Industry and Trade (MoIT) introduced the nation’s polices and laws, as well as its development strategy for the mining industry.

Foreign delegates presented reports outlining opportunities and challenges for Vietnam’s titanium industry.

They also introduced modern technology for titanium exploration and processing that can be applied in Southeast Asian countries.

GeoASEAN 1 was held within the framework of the ASEAN Mineral Cooperation Action Plan (AMCAP) for the 2011- 2015 period, which was approved at the third ASEAN Ministerial Meeting on Minerals (AMMin3) that took place in Hanoi in December 2011.

The event aims to promote international cooperation and development, and create investment opportunities in the ASEAN community mining sector.

Mekong Delta investment conference planned for August

The 2013 Conference for Investment Promotion and Social Welfare for the Mekong Delta region is scheduled to take place in Vinh Long province on August 30.

The information was announced during a working session between the Southwestern Region Steering Committee and the Can Tho provincial People’s Committee on May 13.

The conference, expected to draw more than 500 participants, will be a base for the Mekong Delta Economic Cooperation Forum, which will also be held in the province in November.

This year’s conference aims to introduce and popularise the region’s potential and advantages, create favourable conditions for investors to access key projects and learn about investment policies and preferential mechanisms.

At the conference, the committee will announce and present a social welfare fund to the Mekong Delta region and call upon domestic and foreign businesses and organisations to join hands in realising social welfare activities.

From now until the conference, the committee will mobilise more than VND500 billion (US$24 million) for social welfare issues and over VND147 trillion (US$7 billion) for investment promotion in the region.

Expert urges focusing on agriculture for sustainable development

The government should pay proper attention to agriculture and rural development instead of only concentrating on industrial and urban development, one expert has said.  

Dr. Dang Kim Son, Director of the Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD), made the proposal at a recent seminar “Iphone or Irice – Options for Vietnam’s sustainable development” in Hanoi.

According to him, the country’s investment in agriculture has been inefficient due to backward ideas and improper policies. Over the past years, more attention has been paid to industrialisation and urbanisation at the expense of agriculture and rural areas.

Such direction, he said, has been blamed for low agricultural labour productivity, reaching only approx USD800 per person per year in 2008, compared to nearly USD1,600 in China, USD1,800 in Indonesia, USD2,000 in the Philippines and nearly USD2,200 in Thailand.

GDP growth rate in the country’s agriculture had fallen to around 4% per year in 2012, down from nearly 7% per year in early 1990s.

He said industrialisation, urbanisation and globalisation have put people in Vietnam’s rural areas at risk, while threatening natural resources, increasing waste, worsening natural disasters as a result of climate change, soil erosion, as well as resulting in unequal competition.

Millions of workers from rural areas have migrated to urban areas to find job. Over 70% of such people work in unofficial sectors as domestic help, builders and motorbike drivers.

Such development trend has driven Vietnam to a medium-income trap. This would result in urban overcrowding, underdeveloped rural areas, inefficient industry and services, uncompetitive agriculture, social and political contradiction, natural resources losses and environmental pollution.

Despite the risks and challenges, Vietnam’s agriculture has recorded magical gains as it always reports trade surpluses despite national consecutive trade deficits, especially in industrial production.

Dr. Son said that the new trend for the country’s industrialisation is to invest in agriculture and rural development as well as empower farmers from the beginning of the process.

“The process of empowering farmers in Vietnam is rather slow. It would be a good idea if we do it right now but would be too late if it takes from five to ten years more,” he assessed.

He suggested that the country learn from experience of some countries like Taiwan and South Korea that have focused on agricultural and rural investment, combining industry with agriculture, urban with rural development.

“In the future, Vietnam may not become the world’s factory like China but may become something like a kitchen, a flower garden, a vegetable garden and a herbal medicine garden of the world if it pays enough attention to agricultural and rural development,” Son emphasised.

The country should adopt measures to encourage foreign investment in agriculture as recently around 15 trans-national groups were seeking opportunities to invest in the industry.

The government should pay more attention to science and technology as well as industrial development to serve agriculture. Market research, product quality management, food safety and control over input materials should be taken into account to support farmers, he said.

He suggested that the government directly grant funding to farmers to foster their business instead of indirect support via banks and exporters as currently.

At a seminar on Vietnam’s economic 2013 and challenges in late April, several experts agreed that amid low economic growth rate, the country should pay more attention to agricultural investment as such industry may help save the national economy.

An official from the World Bank said at a seminar on potential for public-private partnership (PPP) in Vietnam’s agriculture that it’s right time for Vietnam to change the way to attract more domestic and foreign investment in agriculture.

“In order to increase labour productivity for Vietnam’s agricultural sector, PPP programmes are of great significance in all national agricultural development strategies,” he added.

Economist Pham Chi Lan said government-funded agriculture projects have proven to be inefficient as the government has acted as policymaker, law maker and conductor.

In order to attract investment in agriculture, the government should work out new and more suitable policies so as to increase agricultural export values, she added.

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