Mexico issues new regulations on rice and tra fish imports

The Mexican government has enacted new regulations that are applicable to all plant and animal-based, seafood and fisheries imports as from July 29, according to the Vietnam embassy trade office in Mexico.

Under the new regulations, all packaged goods imports must be in containers and secured on export pallets. The new regulations also aim to reduce hygiene risks and ensure safety for imported goods into Mexico.

At present, a number of Vietnamese businesses are exporting rice and tra fish to Mexico, which have been placed in containers without pallets.

The Vietnam embassy trade office in Mexico requested the Ministry of Agriculture and Rural Development to inform local businesses about Mexico’s new regulations so that they can adjust their procedures and factor in the cost of pallets.

Grand opening of Cuckoo Electronics in Vietnam

Cuckoo Electronics, Republic of Korea’s premiere home appliance retailer, opened its first “Cuckoo Brand Shop” in Vietnam located in the Phu My Hung area of HCM City on July 15.

The shop will sell Cuckoo brand products such as premium electric pressure rice cookers, electric grills, and water purifiers. After the first shop in Phu My Hung, the company plans to open other Cuckoo brand shops in other larger cities and metropolitan areas including Hanoi.

A spokesperson for Cuckoo Electronics expressed optimism that the first shop in Vietnam will the first of many successes in the country.

During the grand opening, which lasts until August 11, popular products such as "Shining Black 2.0" (model name CRP-HXXB1020FB), Induction Heating (IH) rice cookers and an electric grill, are specially priced with huge discounts.

A spokesperson for Cuckoo Electronics’ overseas branch said, the company aims to become the No 1 home appliance retailer in Vietnam.

Binh Duong sees strong surge in H1 steel export

Steel producers operating in the southern province of Binh Duong exported over 228,000 tonnes of steel products in the first half of this year, a year- on-year rise of over 63 percent.

In June alone, local steel exporters’ turnover increased four times compared to the same period last year.

Le Phuoc Vu, Chairman of the Directors Board of the Hoa Sen Group, which accounts for 40 percent of the market share, said his firm’s products are shipped to 40 countries and territories over the world and the group’s turnover is hoped to hit 14 trillion VND (658 million USD) this year.

Vietnamese steel businesses will have many opportunities to promote export to potential foreign markets in the coming time, especially when the Trans-Pacific Partnership (TPP) agreement is signed, Vu said.

However, they should also pay attention to innovating production technologies to improve the quality of their products, and reduce the cost price so as to enhance their competitiveness.

Thai Nguyen actively betters investment climate

The northern province of Thai Nguyen has directed its departments, agencies and authorities at grassroots levels to step up implementing an array of measures to improve its investment climate.

Duong Ngoc Long, Chairman of the provincial People’s Committee, said his province always creates the most favourable conditions possible for investors in terms of investment permits and ground clearance.

Having welcomed a high-tech complex project invested by Samsung Group from the Republic of Korea, Thai Nguyen continues to call on affiliates of the business to promote their support industry projects.

The province has also hastened ground clearance in Yen Binh, Diem Thuy, Song Cong and Nam Pho Yen industrial parks, enabling investors to kick-start the construction there at an early date.

Regarding administrative reform, it has promulgated 20 mechanisms and policies to facilitate investment, notably the application of the “one-stop-shop” mechanism in dealing with administrative formalities.

Regular dialogues between businesspersons, provincial officials and bankers to ease difficulties for local businesses have also been maintained.

As a result, many investors have accessed preferential loans from commercial banks and benefited from some tax policies.

In the first half of this year, Thai Nguyen attracted 19 foreign-invested projects valued at 134 million USD, bringing the total to 66 with a combined investment of around 3.8 billion USD.

Phu Tho reaps success in building new-style rural areas

As many as 75 agricultural cooperatives in the northern province of Phu Tho have benefited from a programme on building new-style rural areas, which has been implemented in the locality since 2011.

Under the programme, the local authorities spent nearly 20 billion VND to assist local cooperatives in improving agricultural services for its members.

With the financial assistance, many cooperatives have helped members apply new production models and farming techniques.

Phu Tho is now home to nearly 300 agricultural cooperatives, which serve as a reliable source of assistance to farmers and play a core role in promoting the sustainable development of rural economy in the province.

In 2014, Phu Tho has allocated more than 280 billion VND to its new-style rural area building programme with the goal of raising the number of communes meeting all or most criteria to 31.

Mekong Delta targets 1.6 million tonnes of tra fish by 2020

Localities in the Mekong Delta are striving to reach a total tra (pangasius) fish output of 1.6 million tonnes and a revenue of 2.5-3 billion USD from exporting this product by 2020.

Under a plan on tra fish production and consumption in the region, the Ministry of Agriculture and Rural Development requires the localities to expand the total farming area to 7,260 hectares of the Vietnam Good Agricultural Practices (VietGAP) standards by 2020.

Head of the Directorate of Fisheries Pham Anh Tuan said at a meeting in Can Tho city on July 10 that to introduce the plan by 2015, the region will farm 5,270 hectares of tra fish each year, striving for 1.2 million tonnes in total output and 650,000-700,000 tonnes of processed products, and 2-2.3 billion USD in export value.

According to Tuan, to achieve the targets, the localities have worked out plans to invest in infrastructure at farming areas, choose higher-quality strains, and improve the chain of farming, purchasing, processing and consuming.

The region is now home to 94 tra fish processing factories with a total capacity of nearly 1 million tonnes per year.

During the 2014-15 period, local factories will focus on renovating their production chains in order to improve the quality of products and, at the same time, reduce production cost.

Meanwhile, in the 2016-20 period, they will apply new technologies to the production of tra fish by-products to meet the demand of both domestic and foreign costumers.

To expand foreign markets for tra fish, ministries, authorities and Mekong Delta localities will work out trade protection measures adaptable to commercial disputes and international technical barriers, especially in the US and European Union markets, while promoting the image of tra fish in EU countries, China, Russia, Mexico, Middle East and India.

The localities will also change the mode of export by boosting direct export to distribution systems, and major shopping centres and supermarkets in order to reduce intermediary stages.

Corn cultivation promotion helps reduce imported animal feed

Vietnam ’s livestock industry is overly dependent on imported animal feed. At present, 50-60 percent of the raw materials for processing animal feed like maize and soybeans are imports, Deputy Director of the Department of Crops Production under the Ministry of Agriculture and Rural Development (MARD) Tran Xuan Dinh was quoted by the Vietnam Economic News as saying.

Last year, the country spent 3 billion USD on imported animal feed and another 1 billion USD on raw materials including maize, soybeans and wheat for animal feed. In 2013, the country imported 1.4 million tonnes of soybeans, worth 834 million USD; 2.26 million tonnes of maize, worth 690 million USD ; and 1.7 million tonnes of wheat, worth 584 million USD, which was a significant increase from 2012.

In the first five months of this year, Vietnam imported more than two million tonnes of maize, worth 500 million USD. Tran Xuan Dinh pointed out the opportunity in cultivating maize crop to meet the domestic animal feed material market, a move which would also bring higher incomes to farmers.

Over the last 10 years, maize cultivation areas, yield and output in maize production both have continuously increased. About 1.2 million ha is currently used for the crop with productivity of 445 kilos per ha and an annual output increase on average by 170,000 tonnes. Northern provinces have shifted 75,500 ha of rice cultivation areas to maize cultivation areas. According to MARD’s plans, by 2015, 120,000 out of the 418,000ha of rice growing areas all over the country will be shifted to grow corn.

Minister of Agriculture and Rural Development Cao Duc Phat urged relevant agencies to implement appropriate solutions so that corn growers could earn higher incomes than other crops and reduce the corn productivity gap between Vietnam and other ASEAN countries.

Coal sales on upward trend

The Vietnam National Coal and Mineral Industries Corporation (Vinacomin) has reported that it sold 18.95 million tonnes of coal in the first half of 2014, equivalent to 54.1 percent of its yearly plan and up 2 percent from a year earlier.

Increasing coal sales pushed the group’s six-month revenue from the resource up by 13 percent year on year, said Vinacomin Deputy General Director Nguyen Van Bien at a meeting in Hanoi on July 10.

Notably, coal consumption by fertiliser makers climbed 29 percent compared to the same period last year, followed by that of power plants (up 27 percent), he added.

Bien also reported that Vinacomin turned out 19.6 million tonnes of crude coal over the period, representing 52 percent of the yearly plan.

He attributed such outcomes to the corporation’s efforts in improving the quality of processed coal and bettering operation regulations.

Vinacomin targets 35 million tonnes of coal to be sold this year, including 27-28 million tonnes for the domestic market and 7-8 million tonnes for export.-

HOSE sees busy year for securities trading

Hochiminh Stock Exchange expects securities trading to thrive till this year-end, riding on initial public offerings by State-owned enterprises and the operation of the first domestic exchange-traded fund.

According to Tran Anh Dao, the bourse's Deputy Director, Vietnam National Textile and Garment Group (Vinatex) and Vietnam Vegetable Oils Industry Corporation (Vocarimex) would implement IPOs this month. These were expected to attract the attention of both foreign and local investors.

The first domestic exchange-traded fund (VietFund Management VN30 ETF), which recently received the licence for its IPO, would also help boost the market liquidity, she said.

The bourse statistics showed that the total market capitalisation on the southern bourse reached 46.9 billion USD as of the end of the second quarter, 2.2 percent lower than the end of the first quarter, but up 21 percent over the end of last year.

Notably, the second quarter saw foreign investment in the HCM Stock Exchange increase from not only the first quarter but also last year's same period.

Between April and June they bought securities worth more than 16.3 trillion VND (777.6 million USD) and sold 11.2 trillion VND worth for net purchases of 5.1 trillion VND.

This compared to 15.9 trillion VND and nearly 15 trillion VND in the first quarter, and 10.8 trillion VND and 11 trillion VND a year earlier.

Their trading represented 22 percent of the transactions on the exchange.

SSI, HSC, and ACBS were the top brokerages, accounting for 13.22, 13.13, and 6.23 percent of the market.

According to VietstockFinance, with expectations of a recovery in the realty market, stocks of property sectors were the most heavily traded on the southern bourse in the first half of the year.

FLC Group (FLC), Tan Tao Group (ITA) and Hoang Quan Corporation (HQC) were the top three with respectively 8.4 million shares, 8.1 million shares and 4.1 million shares averagely traded per session.

Brighter economic outlook accelerates car sales

Low interest rates and a brighter economic outlook in Vietnam sent new-vehicle sales soaring in the first half of the year.

This allayed worries of a market slowdown and set the industry up for a strong second half.

Sales in the first six months of 2014 rose 27 percent over the same period last year to 54,986 units, according to the Vietnam Automobile Manufacturers Association (VAMA).

Of the figure, cars were up 36 percent and trucks up 24 percent.

The association, which comprises country's 21 leading auto makers, said in its monthly report on July 10 that this was the 15th consecutive month that sales had been higher.

VAMA's Chairman Jesus Arias said with this momentum, the full year total industry forecast for 2014 was adjusted up to 130,000 units, a 18 percent growth from 2013.

Nguyen Van Dung, General Director of Northern Automobile Corporation, a prominent auto dealer in Vietnam, said incoming indicators were consistent with a rebound in the economy.

"We've seen good improvement in manufacturing activity. Consumer sentiment has been good, and incomes are gaining ground." he added.

Vietnam's economy has been stable for the first half of the year with a GDP growth rate of 5.18 percent and inflation at 1.38 percent against December last year – the lowest rise in the past 13 years.

In addition, the latest forecast from the World Bank shows that Vietnam's economic growth will be around 5.5 percent this year, better than expected.

Of the VAMA's list, Vietnamese manufacturer Truong Hai Auto Corp, which assembles trucks, buses and sedans, extends its leading position, which it gained from Toyota in May. The company, based in the central province of Quang Nam, sold 17,851 vehicles in the first half, registering a year-on-year increase of 40 percent.

Japanese invested Toyota ranked second with 16,653 units sold, up 12 per cent, followed by Ford with 5,264 units, up 54 percent.

Meanwhile, the country imported 25,000 completely built units (CBU) cars worth 500 million USD in the first half, an increase of 44.4 percent in volume and 53.9 percent in value year-on-year. About 25 percent of the imports were luxury sedans and sports utility vehicles (SUV), according to the Customs Office.-

Cassava processors get green light in southern province

The southern province of Tay Ninh has approved a proposal from three local companies to build three new cassava processing plants, the first of their kind in the province.

Truong Hung Co,Ltd, Truong Thinh Co,Ltd and Viet Ma Co,Ltd will be allowed to invest in plants that can produce up to 150 tonnes of flour each day. The investment capital for each plant is estimated at 80 billion VND (3.8 million USD).

The plants will produce modified cassava starch, a special kind of flour used in the production of different foods, animal feed, drugs and industrial applications in Vietnam such as pulp production and weaving. Many Vietnamese enterprises still have to import modified cassava starch for production purposes.

Figures from the provincial People's Committee showed that there are 74 cassava processing businesses that produce nearly 800,000 tonnes of normal cassava starch per year.

Cassava plantations in the province cover approximately 45,500 hectares and produce 1.3 millions of tonnes of cassava per year.

Deputy chief of the secretariat of the provincial People's Committee, Pham Trung Chanh, said cassava starch was one of the province's key exports. Normal cassava starch was exported to mainland China, the Republic of Korea, the Phillipines and Taiwan, of which, 85 percent went to China.

However, in recent years, Chinese traders have cut imports of cassava, and large quantities have gone to waste in storage, causing losses for farmers.

According to the committee, in 2012, Vietnam exported 4.2 million tonnes of cassava to mainland China and earned 1.35 billion USD. In 2013, only 3.1 million tones of cassava was exported, worth 1.1 billion USD.

Chanh said the three factories would use normal cassava starch to produce modified cassava flour to solve the surplus and supply modified flour to the domestic market at cheaper prices.

PPP investment form helps develop agriculture

Given the current serious climate change, public - private partnership (PPP) investment form is expected to lure more investment in the agriculture sector as prices of agricultural products will increase and stay high in the years to come, the Vietnam Business Forum Magazine (VBF) reported.

Minister of Agriculture and Rural Development Cao Duc Phat also said that the results of PPP projects made him expect a sharp rise in PPP in agriculture in the near future.

According to the minister, Vietnam is one out of 11 countries in the world to pilot PPP in agriculture. As many as 20 leading foreign corporations have invested in agriculture in Vietnam in the form of PPP. Vietnam has established six PPP groups of agriculture: vegetables, fruits, coffee, tea, seafood - the general merchandise, and microfinance groups. All groups are very effectively operated.

Tran Vu Hoai, Vice President of External Relations at Unilever Vietnam, a representative of PPP in tea group, said with the PPP model, tea growers and tea processors have received farming sustainability training. Each year, Unilever buys 30,000-35,000 tonnes of international Rainforest Alliance-certified tea for export. This helps promoting " made in Vietnam" tea brand in the world tea market.

Up to now, businesses joining the PPP in tea group reportedly have invested 440,000 EUR in training programmes and in production cooperation with over 23,000 farmers in six provinces.

As head of the seafood PPP group, Philippe Bacac, Managing Director of Metro Cash & Carry Vietnam, said promising results have also been reported in the PPP in seafood group. Metro Cash & Carry Vietnam together with other companies of the group like Cargill and Fresh Studio have successfully built up qualified production chains, which helps Vietnamese seafood products easily penetrate supermarket chains. Each year, more than 4,000 tonnes of seafood products from the PPP projects are provided to supermarkets nationwide.

The PPP in seafood group trained more than 2,000 fishermen and 400 merchants in farming techniques, safe medicine and chemical use, packaging and transportation in accordance with certified standards.

Dang Kim Son, Director of the Institute for Policies and Strategies on Agriculture and Rural Development, said Vietnam has great opportunities to attract FDI into agriculture through PPP projects. This is a door to attract FDI capital into agriculture. Besides, the Government of Vietnam’s determination on agricultural restructuring will create a significant source of motivation for investors.

Son said PPP projects have boosted agricultural output by 2-3 times and farmers’ incomes have thus increased 10-15 percent. This model has successfully connected businesses and farmers. Management agencies have timely fixed problems arised from production activities.

Tran Kim Long, Deputy Director of International Cooperation Department under the Ministry of Agriculture and Rural Development, said to continue promoting PPP advantages, good results from PPP projects in big businesses should be thoroughly studied to apply in different levels and various sectors.

Ha Noi real estate prices increase in second quarter

With rising sales, the prices of villas/townhouse and apartments in Ha Noi are also escalating in the second quarter of this year.

According to a quarterly report released yesterday by Savills Viet Nam Ltd Company, on the Ha Noi property market in Q2, the average primary price was approximately VND41.7 million (US$1,966) per square metre for villas and VND41.5 million ($1,958) per square metre for townhouses.

The highest price was in Tay Ho District at approximately VND105 million ($4,950) per square metre and the lowest was in Quoc Oai, at VND18 million ($850) per square metre.

The average secondary asking price decreased slightly by 0.4 per cent quarter-on-quarter (q-o-q) for villas and 0.3 per cent q-o-q for townhouses.

Meanwhile, the price increased slightly between 1 and 6 per cent in districts where a number of projects were nearly completed, including Cau Giay, Tu Liem, Ha Dong and Hoai Duc.

"Villas/townhouse have faced competition from private, landed houses and apartments that are selling more as they cost less," said Ngo Thi Huong Giang, Senior Manager of Research and Consultancy.

In Q2/2014, the total stock is approximately 29,400 units from 105 projects. The primary stock comprises 16 projects with approximately 1,100 units, with approximately 28,300 units in secondary stock. One new project in Hoang Mai District launched this quarter is providing 35 villas.

Giang said that taking effect June 16th 2014, a Joint Circular No 01/2014/TTLT-NHNN-BXD-BTP-BTNMT was issued to guide the mortgage procedures for future homes. This circular may increase market demand in the future.

Also in the report, Savills said the average primary price was approximately VND28 million ($1,320) per square metre, increasing 15 per cent q-o-q. The prices increased significantly by 8 per cent for Grade B apartments and by 3 per cent for Grade A apartments, but reduced by 7 per cent q-o-q for Grade C.

The average secondary asking price increased in all districts, up 4 per cent q-o-q to approximately VND29 million ($1,368) per square metre. Ba Dinh showed the most significant increase of 5 per cent to VND38 million ($1,792) per square metre.

In Q2/2014, approximately 1,900 units were sold, up 54 per cent q-o-q due to strong sales in Grade B projects. The absorption rate was 14 per cent, increasing by 5 percentage points, q-o-q.

"Projects which were progressing smoothly and had strong developer creditability generated good sales this quarter. Most buyers are end-users who expect real products," Giang said.

In Q2/2014, Ha Noi's total apartment supply was approximately 95,800 units from 162 sold projects and 67 active projects.

The total primary stock decreased by 8 per cent q-o-q to over 13,400 units. Only one new project was launched. However, four Grade C projects were sold and removed from the primary market. The total secondary stock increased by 15 per cent q-o-q to approximately 82,400 units.

First domestic ETF gets listing licence

Viet Nam's first domestic exchange-traded fund, the VFMVN30 ETF, attracted major interest right yesterday, the day it received the licence for its initial public offering.

The fund will have a passive investing strategy to carry out its investment objectives, simply tracking the performance of the VN30 Index.

HCM City Securities and Bao Viet Securities entered into agreements to buy units worth VND30 billion (US$1.4 million) and VND20 billion respectively. They will also be fund authorised participants.

Tran Thanh Tan, CEO of VietFund Management, which set up and manages the fund, said he has received commitments of more than VND50 billion from other institutional and high net-worth individual investors.

The IPO has to be for a minimum of VND50 billion, but Tan hopes to scale up to VND500 billion over the next six months.

The units are priced at VND10,000 each and purchases are in lots of 100,000 units.

Registering for the IPO can be done between July 21 and August 8 with HSC and BVSC.

After the IPO the VFWVN30 ETF will be listed on the HCM City Stock Exchange and its units will be traded in both the primary and the secondary markets.

During trading hours the fund's indicative net asset value (iNAV) and iVN30 will be calculated and made available every 15 seconds and every minute respectively. The fund's NAV will be announced daily.

Standard Chartered Bank Vietnam will provide custodial, supervisory, and administrative services for the fund.

Industrial production – bright spot in economic picture

Vietnam’s industrial production has shown a growing trend through the first six months of the year, posting a growth of 5.8 percent year on year for the entire period, a positive signal that the industry and the economy are on the road to recovery.

Specifically, the processing and manufacturing industry expanded by 7.8 percent compared to 6.1 percent recorded in last year’s same period and contributing up to 5.5 percent of the whole industrial sector’s growth.

Production of electronic components, garment, leather-footwear, automobiles and shipbuilding posted two digit growth rates thanks to stable orders from traditional markets.

Added to the bounce is falling inventories, especially electronics, leather products and electrical appliances that recorded increases of 62.2, 18.4 and 16.5 percent in consumption.

Deputy Minister of Industry and Trade Le Duong Quang urged enterprises, especially garment, footwear and electronic firms to seek new sources of material supply and ease their reliance on Chinese imports against the backdrop of ongoing tension in the East Sea.

Head of the Planning Department under the Ministry of Industry and Trade Nguyen Tien Vy forecast that the 2014 industrial production index will rise by between 6-6.5 percent.

Minister of Industry and Trade Vu Huy Hoang vowed to fine tune policies and incentives meant for agro-forestry-fisheries and rural development in order to achieve the yearly goal.

He said more initiatives to lure foreign investment will be crafted to ramp up support, mechanical, chemical and processing industries.

The Electricity of Vietnam, the PetroVietnam National Oil and Gas Group, and the Vietnam National Coal and Mining Industries Group will work at full capacity to ensure power supply for industrial production, he assured.

State governor: credit growth target achievable

Governor of the State Bank of Vietnam Nguyen Van Binh has stated that the goal of 12-14 percent credit growth for this year is achievable if the banking sector does its best, even when the rate recorded in the first half of the year is a modest 3.52 percent.

At the banking sector’s conference in Hanoi on July 9, Binh called attention to the fact that credit growth in the second half of the year usually rises fast, even doubles the rate in the first half, which is the reason why he believes the rate can reach 10 percent by the end of the year.

However, the banking sector itself must make all-out efforts to ensure the goal be fulfilled, he said, adding that the State Bank will not revise down the credit growth target. The Governor said the State Bank will continue to implement macro-economic measures to remove bottlenecks for the credit flow, such as bad debts and sluggish demand.

Regarding other pressing issues in the time ahead, he said with the budget deficit was allowed to increase to 5.3 percent of GDP and the rising amount of Government bonds, there is the need to watch out for inflation.

On the settlement of bad debts, he underscored the need to restructure the purchased debts. According to Binh, the Vietnam Asset Management Company has bought 50 trillion VND (2.4 billion USD) worth of bad debts so far and plans to buy 70-100 trillion VND (3.4 – 4.7 billion USD) this year.

In addition, the governor said several major commercial banks will also undergo reshuffling in the second half of this year.-

Vietnam seeks broader markets for farm produce

Trade promotion activities from now to the end of this year will prioritise exploring more foreign markets for local farm produce, the Ministry of Industry and Trade has confirmed.

This year, the ministry has approved 19 trade promotion projects for the agro-forestry-fisheries sector, with a total budget of 25.64 billion VND (1.2 million USD), or 36.6 percent of the budget allocated for the national programme.

Several of the projects were successfully realised over the past five months, bringing local enterprises to the Seafood Expo North America, the Seafood Expo Global, the International Japan Food and Beverage Exhibition, and the International Coffee and Tea Festival in Dubai, where they won deals worth tens of millions USD.

The southern province of Dong Nai is one of the localities that have proactively sought to sell its agricultural products, like cocoa, coffee, and cashew nuts globally.

The new markets, including Dubai, the Republic of Korea and Africa, look very promising for the province.

In the first half of this year, Dong Nai exported nearly 130,000 tonnes of coffee for 276 million USD, up 33 percent in volume and 30.3 percent in value against the same period last year.

Deputy Minister Do Thang Hai said over the past time, the national trade promotion programme has enabled businesses to extend their reach into the new markets in the Latin America and Africa while widening their presence in traditional ones like the US, the European Union, Japan, China, and Russia.

The programme has also supported the businesses in investment attraction, as well as technology and production renovation.

Southern province’s GDP growth rate doubles national figure

Gross domestic product (GDP) of the southern province of Dong Nai grew by 10.8 percent in the first half of 2014, doubling the national figure (5.18 percent), to stand at 24 trillion VND (1.14 billion USD), reports said.

The statistics were released at a session of the provincial People’s Council, which was opened on July 9.

Of the overall sum, nearly 15.4 trillion VND (733.3 million USD) came from industry – construction, rising by 11 percent year on year.

Another 7.36 trillion VND (350.48 million USD) was contributed by the service sector, up 11.6 percent, while the rest 1.3 trillion VND (61.9 million USD) was generated by agro-forestry-fishery activities, up 3.3 percent.

Over the period, Dong Nai’s export revenue topped 6 trillion VND (285.71 million USD), rising by 15.8 percent yearly. Exports by foreign invested companies saw the fastest pace at 17.3 percent.

Vice Chairman of the provincial People’s Committee Tran Minh Phuc attributed the surge in the production and export of garments, footwear, chemicals, processed food and building materials to stable demand from foreign markets.

He pointed out an array of difficulties in real estate though many measures have been taken, and said a fall in prices of export farm produce also posed a problem due to fierce competition from other countries.

For the rest of the year, Dong Nai will strive to achieve a GDP growth rate of between 10.8 and 11.8 percent and realise all socio-economic targets.

To that end, the province will step up streamlining administrative procedures, particularly those relating to tax, customs, credit and land use, restructuring its economy, and improving business climate.

It will also issue a list of industries in need of more investment, in which high technology, environmentally friendly and support projects are expected to be included.

Dong Nai, together with neighbouring Ho Chi Minh City, and Ba Ria – Vung Tau, Binh Duong, Tay Ninh, Binh Phuoc and Long An provinces, forms the southern key economic region.

Six-month footwear exports see strong surge

Vietnam earned 4.8 billion USD from exporting footwear in the first haft of this year, a year-on-year increase of 21.9 percent.

This is mainly thanks to the Generalise System of Preferences (GSP) tax offered by the European Union (EU) from January 2014 to Vietnamese exporters, experts said.

Besides, with the political stability, the abundant workforce and the high quality of the products, Vietnam has won many contracts from foreign importers.

The earnings from footwear export to the traditional markets of the US, Japan, Belgium, and Germany saw a stable soar in the reviewed period, while those from a number of other markets such as Chile, Greece and Poland also surged drastically.

The positive signs along with new business opportunities are expected to help the sector complete its export turnover target of about 11 billion USD in 2014.

Some large Vietnamese enterprises have increased investment in upgrading technology, modernising production chain, and developing their own brand name for export. Thanks to these, the sector’s labour productivity has increased up to 30 percent.

Macadamia – farmers’ new hope of getting rich

Macadamia plant can be a good choice for farmers in the northwestern and Central Highland regions seeking to improve their income, said experts at a recent seminar in Hanoi.

Macadamia nut is dubbed as “the Queen of Nuts” for its outstanding nutrition value. Experts said that compared to other common edible seeds such as almonds and cashews, macadamias are high in fat and low in protein. They have the highest amount of monounsaturated fats of any known seed.

The plant, indigenous to Australia, was introduced to Vietnam in 2002 for trial cultivation. Local scientists have tested and found that the northwestern and Central Highland regions have conditions best suited to the plant.

In particular, macadamia grown in Vietnam have produced the same and even higher yield than those grown in Australia – the world top grower of the plant.

According to Nguyen Tri Ngoc, Director of the Thanh Tay Institute for Agro-Forestry Technology Research and Development, Vietnam has all necessary conditions for the development of macadamia cultivation.

Meanwhile, Bui Xuan Trinh from the Government Office, cautioned that as macadamia is a new plant, it is necessary to make careful steps in this direction. He said there needs to be a specific plan to connect farmers and enterprises to ensure stable markets for the product.

Participants discussed measures to introduce the plant as a new option of good profitability to farmers, thus expanding its cultivation, as well as investment in processing.

It was reported at the seminar that Vietnam currently has about 2,000 hectares of macadamia with average output of 3 tonnes per hectare.

Vinh Phuc aims to boost support industry

Vinh Phuc has been one of top spots in attracting foreign direct investment (FDI) in the north of Vietnam. The province is an attractive destination for leading investors such as Japan, the Republic of Korea, US and the EU, the Vietnam Business Forum Magazine (VBF) reported.

Despite the difficult economic situation, in the 1st quarter of 2014, Vinh Phuc’s investment attraction achieved positive results. Total newly invested capital and added capital reached 115.7 million USD with 6 newly invested projects and 1 added capital project. The number of projects increased by 3 times and total capital increased by 7 times against the same period last year.

The projects of Toyota, Honda, Yamaha, Piaggio and others have brought great social and economic value to the locality. In the 1st quarter 2014, FDI enterprises contributed 4,000 billion VND (200 million USD) to the state budget, up 23 percent compared to the same period in 2013, attracting over 45,000 local workers.

Aiming to attract investments in the industrial sector, with the priorities to automobile, motorcycle and electronic manufacturing sectors, Vinh Phuc aimed to become a centre of industrial production in Vietnam.

Supporting Industry (SI) has accounted for over 50 percent of Vinh Phuc's GDP. Vinh Phuc’s SI primarily focuses on three major sectors: mechanics, electronics and computing and automotive and motorcycle, accounting for over 10 percent of the industry.

However, besides industrial products for the automobile and motorcycle industry, the fields of mechanical engineering, automotive, electronics-computer are limited in manufacturing simple components. Many sectors of FDI enterprises such as automobiles, motorcycles and electronics have high export value, but depend entirely on imported sources, so their added value is low.

The industrial growth of Vinh Phuc has received great contribution from Toyota and Honda Vietnam. However, at present, the two companies mainly operate in assembling imported spare parts so that the localisation rate of some of the main products is not high.

A decision of Vinh Phuc People’s Committee on development planning for SI by 2020, with a vision towards 2030, identified the SI planning as closely linked with industrial development planning.

In particular, SI development will become the foundation for the industry towards the use of advanced technologies, with high competitiveness, first to increase the localisation rate of major industrial products. The SI sector of the province strives to provide SI products for industries in the province and neighbouring provinces, as well as participate in global supply chains of multinational corporations in the world.

Binh Duong fulfils yearly FDI goal in first half

The southern province of Binh Duong attracted 1.014 billion USD in foreign direct investment (FDI) in the first half of this year, exceeding its yearly target of luring 1 billion USD.

According to Chairman of the provincial People’s Committee Le Thanh Cung, by the end of June, 400 million USD were poured in 83 new projects, while 614 million USD were added to the 69 underway ones.

So far, the province has hosted 2,317 FDI projects with a combined investment of over 19.8 billion USD, he said.

The official spoke of the locality’s efforts to provide investors with cleared land equipped with complete infrastructure systems, together with effective investment promotion programmes.

He referred to the drastic reform of administrative procedures and one-stop-shop services, saying these moves have enabled investors to operate stably and expand their business.

Binh Duong is focusing on completing the planning of areas dedicated to the support industries, aimed to become a regional supplier of raw material and make it ready for the upcoming Trans-Pacific Partnership deal, Cung said.

The locality has seen a strong flow of FDI from big foreign groups since late May. On June 24, the Taiwanese Kingtec Group signed a contract with the My Phuoc III industrial park to rent land for its electronics factory whose first phase will have an investment of 30 million USD.

Local firms missing out on supporting industry opportunities

Local supporting industries are looking to hike their localisation rates, but doubts remain over whether local businesses are prepared to take advantage of the opportunity.

According to the Vietnam Association of Foreign Invested Enterprises (VAFIE), Samsung Vietnam will meet with local businesses producing materials and accessories for the electronics industry next week. Around 100 local companies are expected to join the event.

“Samsung will explain what they need and how Vietnamese companies can engage in their global supply chain,” said VAFIE deputy chairman Nguyen Van Toan.

“If they take this networking opportunity seriously, local firms can get a range of benefits from joining the Samsung value chain, and this could significantly change the face of investment into local supporting industries and the development of Vietnam’s small and medium-sized enterprises,” Toan added.

In fact, this is not the first time a foreign-invested enterprise has taken the initiative in sourcing local suppliers.

For several years now, Japanese companies have held annual fairs to display the products they want to source from Vietnamese suppliers. But the results have been only modest.

The latest survey from the Japan External Trade Organisation (JETRO) shows that Japanese firms buy very few input materials and accessories for their Vietnam production.

The rate was 27.9 per cent in 2012 with a slight increase to 32.3 per cent in 2013, far lower than other regional countries. The rate in Indonesia is 43 per cent, Thailand 53 per cent, and 61 per cent in China.

Moreover, of that supply, most came from foreign enterprises operating in Vietnam. Vietnamese firms only contributed 13.2 per cent of total input materials and accessories sold to Japanese firms.

Foreign firms have also been proactive in preparing for Vietnam’s likely ratification of number of free trade agreements (FTAs) in the coming time.

“To prepare for the Trans-Pacific Partnership (TPP), more than $1.2 billion in foreign investment was poured into Vietnam’s textile and garment sector in the first half of this year. Meanwhile, Vietnam’s leading player in this field, Vinatex, is still frustrated by a series of environmental standards in terms of textile dyeing,” said Tran Huu Huynh, an expert under the Vietnam Chamber of Commerce and Industry (VCCI).

Many developers of foreign fibre, dyeing and export production projects have revealed their interest in investing in Vietnam which came from the opportunities they expect from the TPP.

These factors pose a real threat to Vietnamese firms’ efforts to bolster local supporting industry development.

Cassava processors get green light in southern province

The southern province of Tay Ninh has approved a proposal from three local companies to build three new cassava processing plants, the first of their kind in the province.

Truong Hung Co,Ltd, Truong Thinh Co,Ltd and Viet Ma Co,Ltd will be allowed to invest in plants that can produce up to 150 tonnes of flour each day. The investment capital for each plant is estimated at VND80 billion (US$3.8 million).

The plants will produce modified cassava starch, a special kind of flour used in the production of different foods, animal feed, drugs and industrial applications in Viet Nam such as pulp production and weaving. Many Vietnamese enterprises still have to import modified cassava starch for production purposes.

Figures from the provincial People's Committee showed that there are 74 cassava processing businesses that produce nearly 800,000 tonnes of normal cassava starch per year.

Cassava plantations in the province cover approximately 45,500 hectares and produce 1.3 millions of tonnes of cassava per year.

Deputy chief of the secretariat of the provincial People's Committee, Pham Trung Chanh, said cassava starch was one of the province's key exports. Normal cassava starch was exported to mainland China, South Korea, the Phillipines and Taiwan, of which, 85 per cent went to China.

However, in recent years, Chinese traders have cut imports of cassava, and large quantities have gone to waste in storage, causing losses for farmers.

According to the committee, in 2012, Viet Nam exported 4.2 millions of cassava to mainland China and earned $1.35 billions. In 2013, only 3.1 millions of cassava was exported, worth $1.1 billion.

Chanh said the three factories would use normal cassava starch to produce modified cassava flour to solve the surplus and supply modified flour to the domestic market at cheaper prices.

Attracting FDI remains a major challenge

State agencies are doing their best to bolster foreign investors' confidence, yet difficulties remain in attracting foreign direct investment (FDI), especially in key sectors, said Foreign Investment Agency director Do Nhat Hoang.

Registered FDI in the country totaled approximately US$6.6 billion in the first half of 2014, representing 64.7 per cent of last year's figure. Implemented FDI rose by 0.9 percent annually to $5.75 billion.

But Dang Xuan Quang, the agency's deputy director, pointed out that incentives have done little to alter FDI distribution. Scant capital goes to rural areas and key sectors such as agriculture, which are in urgent need of investment; real estate draws significant investment despite the lack of incentives.

Brian Portelli, an expert from the United Nations Industrial Development Organisation, said that financial incentives should only play a supplementary role in FDI attraction.

Other strategies to boost FDI included publicising information for investors on the Internet and streamlining the project verification process so that investors could begin their projects faster, said Nguyen Mai, chairman of the Viet Nam Association of FDI Enterprises.

Selecting the right projects and investors was also key, economist Le Dang Doanh said, noting that authorities should not make commitments before thoroughly understanding investors' intentions and potential.

Instead of offering too many incentives, he recommended that localities work harder to improve their investment climate, infrastructure and manpower quality.

At the end of 2013, there were 9,093 FDI businesses in Viet Nam, 83 per cent of which were completely owned by foreigners, according to the General Statistics Office. These accounted for 30.5 per cent of enterprises' contributions to the State budget and 45.4 per cent of total profits.

This year 31.7 per cent of FDI firms plan to increase their capital, 79 per cent expect higher revenues and 81.1 per cent hope to gain better yields, said Pham Dinh Thuy, director of the office's Industrial Statistics Department.

Binh Duong surpasses annual FDI goal in H1

The southern province of Binh Duong attracted US$1.014 billion in foreign direct investment (FDI) in the first half of this year, exceeding its yearly target of luring $1 billion.

According to Chairman of the provincial People's Committee Le Thanh Cung, by the end of June, $400 million had been poured into 83 new projects, while $614 million was added to 69 projects already being carried out.

So far, the province has attracted 2,317 FDI projects with a combined investment of more than $19.8 billion, Cung said.

The locality's official spokesperson said investors had been provided with cleared land equipped with infrastructure and invited to participate in programmes promoting investment.

He referred to the drastic reform of administrative procedures and one-stop-shop services, saying the moves had enabled investors to streamline operations and expand their businesses.

Binh Duong had also focused on completing the planning of areas dedicated to support industries, and was aiming to become a regional supplier of raw materials and in the lead up to the Trans-Pacific Partnership deal, he said.

The locality has seen a strong flow of FDI from big foreign groups since late May. On June 24, the Taiwanese Kingtec Group signed a contract with the My Phuoc III industrial park to rent land for its electronics factory comprising an initial investment of $30 million.

Industrial production improves

The country's industrial production is likely to increase from 6 to 6.5 per cent by the year-end despite the numerous challenges, says a Ministry of Industry and Trade (MoIT) forecast.

To achieve this figure, top priority would be given to mobilising and utilising investment capital effectively as well as fully exploring local production capacity and market demand, MoIT said,

The ministry laid emphasis on a policy on incentives to attract more foreign investment and boost domestic production in the areas of support industry, mechanical engineering, agriculture, chemicals, and light industry.

Balancing the supply and demand of essential goods such as electricity, coal and petroleum would be also essential, it said.

According to MoIT, the nation's industrial production was witnessing improvement, with a growth of 5.8 per cent seen in the first half of this year, higher than last year's 5 per cent rise.

During this period, the electricity production and distribution sector posted the highest growth at 10.9 per cent. It was followed by the processing and manufacturing industry at 7.8 per cent and water supply, sewage, waste management at 5.9 per cent. However, the mining and quarrying sector fell by 2.5 per cent.

Among industries recording high growth rates in the period were rolled electronic components, textiles and garments along with leather production, footwear, machines and equipment. Shipbuilding also recorded high growth.

Thanks to the rise in consumption, the number of workers recruited in industrial production firms, as of June 1, saw an increase of 0.8 per cent against the previous month. The rise was 2.7 per cent as compared with the same period last year.

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