ABC Bakery to build $4m factory

The Asia Bakery and Confectionery Pte, known as ABC Bakery, plans to build a factory by the year-end with total investment cost of US$4 million.

Speaking at a press conference in HCM City yesterday, Kao Sieu Luc, ABC Bakery's general director, said that $2 million of the total cost would be used to import equipment and technologies from the US.

The new factory will make more new products for the domestic and international markets.

"Our products are available in Japan, the UK and Australia, with an average of four bakery containers exported a month to Japan," Luc said.

He said their existing bakery factories were stretched to capacity, and that the company was applying for a permit to build its third factory.

At the event, the company also unveiled 10 new sandwich products for the domestic market.

Using a new production method, these new products have softer texture, better taste and longer-lasting aroma. They also have no preservatives, he said.

ABC Bakery currently has 34 bakery shops, of which five are located Phnom Penh, Cambodia.

Speaking to Viet Nam News, Luc said that the company planned to open five more stores in Phnom Penh, and then will expand its distribution system to Siem Reap, a major tourism hub in Cambodia.

Apart from focusing on improving and creating new products, the company has been upgrading its hygiene standards. It recently received an HACCP certificate for food-safety management.

Binh Duong plans land-use up to 2020

The southern province of Binh Duong has published a land-use plan that increases the supply of land for urban areas, industrial parks and tourism.

Under a provincial People's Committee plan to 2020 and a more detailed plan for the next three years, land for urban areas will increase from 25,800 to 73,980 hectares.

Land for industrial parks will increase from 9,250ha to 12,160ha and land for tourism will rise from 993 hectares to 3,157 hectares.

However, at the same time, agricultural land will decrease from 208,403 hectares to 189,921 hectare.

PM orders agencies to tighten their belts

Prime Minister Nguyen Tan Dung yesterday told ministries, State agencies, provinces and cities to tighten management of State expenses, adding that thrift was needed to prevent wastefulness.

The PM suggested that this could be done by cutting expenses, especially on overseas visits and buying equipment and vehicles.

He also ordered the authorities not to issue policies that might reduce the State's budget collection or increase State spending.

Speaking at an online conference in the capital yesterday, Dung said although the nation had achieved important results in curbing inflation, stabilising the macro-economy and ensuring social insurance, it was still facing many difficulties.

He asked the Ministry of Finance to take measures to collect all funds meant for the State budget.

In the remaining six months of 2013, Dung urged the ministry to work with localities and enterprises, especially those producing large amounts of State budget money, to fulfill their tasks.

The ministry was also ordered to seriously supervise tax collection and returns, prevent the phenomenon of price-transferring to avoid taxes, deal with bad debts and focus on ways of reforming the tax and customs sectors.

The Prime Minister said local agencies must help tackle any difficulties facing businesses and boost production and trade by creating favourable conditions for increase in State funds.

He told ministries, agencies and localities to tighten management of State expenses, ensure the need for spending; practice thrift and prevent wastefulness by cutting expenses, citing overseas visits and buying (unnecessary) equipment and vehicles.

He assigned the Ministry of Planning and Investment to tell local agencies to re-assess investment projects and national target programmes that use State money and Government bonds.

Dung said the Ministry of Finance must pay attention to strengthening market management and the control of prices of essential commodities, such as petrol, coal and electricity to prevent inflation taking off.

It had to keep close watch on and respond to abnormal market, prices and strictly punish those who violated price laws.

Minister of Finance Dinh Tien Dung said that he would focus on implementing ways of boosting exports and reducing imports to curb the trade deficit,

He also promised to speed up the equitisation of State enterprises, strengthen supervision of the financial market and operation of financial institutes, and enhance the fight against corruption and wastefulness.

Drop in profits revealed by BVS

Bao Viet Securities Co (BVS) yesterday published its financial performance report, with revenue for the first six months of this year reaching VND101.8 billion (US$4.8 million), 55 per cent of the year's target.

However the profits recorded during this period were only VND56.3 billion ($2.6 million), or 73 per cent of the year plan.

The figures reveal that revenue and profits have fallen by 12 and 14 per cent respectively, compared to the same period last year.

In the second quarter, the company held on to its top 10 ranking of securities firms that hold the highest market share in terms of shares and fund certificates on the Ha Noi Stock Exchange.-

Steel firm fails to buy target shares

Thep Viet Manufacturing and Trading Company failed to buy the 6.29 million shares in steelmaker Pomina (POM) it had registered for and could only buy 103,570 shares during the period lasting from June 10 to July 9.

The company will however continue to buy the remaining 6.19 million POM shares from July 17 to August 15, increasing its ownership in Pomina to 65.5 per cent. Currently, Thep Viet holds 62.17 per cent.

Thep Viet had planned to increase its stake in February last year and many financial commen-tators will remember that this is not the first time the company has failed to buy shares in POM.

Work starts on new Cuu Long cherry processing plant

Construction of a VND90 billion (US$4.3 million) plant to process cherries began yesterday in the Cuu Long (Mekong) Delta Province of Tien Giang.

Financed by the Japanese MTV Nichirei Suco Viet Nam Co, the factory should be ready to operate in March next year and will have the capacity to process 4,000 tonnes of cherries annually.

More information neccessary to boost product sales: Experts

Providing consumers with proper information about the products they buy could help raise the competitiveness of Vietnamese farming products, experts have suggested.

Speaking at a conference yesterday about strengthening the competitiveness of Vietnamese agricultural and aquaculture products, Nguyen Huu Dung, deputy chairman of the Viet Nam Association of Seafood Exporter and Producers, said that most Vietnamese companies lack awareness when it comes to transparency and the importance of providing their product information to customers.

"Taking advantages of information technology to provide customers with clear information about their products' origin is an effective means of raising their competitiveness," he said, noting that nowadays, consumers, especially foreign importers, care more and more about the origin of products.

However, many Vietnamese companies still hesitate in providing the public with detailed information because they think the move could make them weaker competitively.

Ha Cong Tuan, Deputy Minister of Agriculture and Rural Development, said that although Viet Nam has prestigious manufacturers with production chains and products gaining certifications of Good Agriculture Practice or Best Aquaculture Practices, such information hardly reaches consumers at the right time or by the right means.

He gave an example, saying that in economic slowdown when consumers tended to tighten their spending, Vietnamese farming products, which are usually cheap, should have sold better. "However, in fact, our sales were dropping in some markets, Tra fish, for example, in EU markets," he said, blaming it on improper communication.

Dang Kim Son, head of the Institute of Policy and Strategy for Agriculture and Rural Development, said that with about 14 million small farming households, a synchronic problem of Viet Nam's agriculture lied with the complicated chains of agricultural material supply and product distribution.

He said farming materials such as fertiliser or animal feed had to go through many layers of agents to retailers and then to farmers. Similarly, finished products also have to pass through many wholesalers before reaching consumers.

"This makes farmers, exporters and consumers very confused about where a product originates from," he said, urging that a tracking process could benefit both producers and consumers.

Huynh Le Tam, a representative from the Global Competitiveness Facility for Vietnamese Enterprises (GCF), said that tracking the origin of products was an important step in food production in many countries, such as the EU and US, where verification of a product's origin was compulsory.

"If Vietnamese companies desire to have their products enter the global market, they need to facilitate a means for verifying the origin of products," she said.

Last year, the GCF, with support by the Danish International Development Agency (DID), funded a project to develop the electronic traceability and testing system called "Traceverified".

The system enables quick and simple access to product information at any point in the supply chain, from the production facility to the distribution system, the border inspection point, reception bays and outlets.

Even before product arrival, buyers can get information via PCs and determine whether the shipped goods comply with their requirements. It can produce a "TraceReport", accessible through any smart phone by scanning the barcode squares printed on the cartons.

Ly Hoang Hai, the project deputy director, explained that unlike conventional paper-based system, the electronic system provides data quickly and clearly, which helps consumers correctly understand what they have bought.

Presently, 12 Vietnamese companies involved in the export of fruit, shrimp and Tra fish to the EU and US have applied for the system.

Banking sector remains tainted by widespread corruption

The State Bank of Viet Nam has unearthed 21 cases of corruption in the country's banking sector over the last six months.

According to a Government Inspectorate half-yearly report published on its website last week, SBV's inspectors discovered 21 cases of fraud involving VND682 billion (US$32.4 million), 561.2 taels of gold and $50,000.

The authorities have detained 14 people, sacked seven, moved four, demoted two and are considering two other cases in more detail.

According to the report, in the first six months of this year, inspectors carried out more than 94,000 checks on ministries and departments, organisations, businesses and individuals nationwide.

They also found that VND12.225 trillion ($582million) and 452ha of land had been misappropriated during land acquisitions.

FPT IS customs software ready for business use in Viet Nam

FPT IS on Tuesday announced its plan to upgrade its current FPT.eCustoms electronic customs declaration software to be compatible with Viet Nam's Automated Cargo Clearance System (VNACCS) for businesses.

The new software will be officially rolled out nationwide in the second quarter of 2014.

FPT IS plans to upgrade its electronic customs declaration software in three phases. In phase one, from now until August 31, 2013, FPT IS will focus on ensuring that the beta (trial) version of FPT.VNACCS is compatible with the new system at the Viet Nam General Department of Customs.

In phase two, from September 1, 2013 to October 30, 2013, FPT.VNACCS software will be connected to the VNACCS system at Vietnamese customs to test its operational quality. In phase 3, from November 1, 2013 to March 30, 2014, FPT IS will refine and fine tune the final version of FPT.VNACCS so it can be used by enterprises across the country.

VN, Belarus look to enhance trade relations with new agreement

The INFO Commodity Exchange (INFO COMEX) run by Ocean Group, and the Belarus Commodity Exchange have agreed to share information on the commodity markets and step up business co-operation.

Both parties signed an agreement in Ha Noi on Tuesday and also vowed to focus on areas of trade exchange that show potential.

First set up on April 22, 2013, with a charter capital of VND150 billion (US$7.14 million), INFO COMEX is now allowed to trade in steel, coffee, rubber and other products according to Vietnamese law.

Construction ministry outlines housing strategy

The Ministry of Construction has proposed several measures to ensure 75 per cent of houses in the country are built of brick and mortar by 2020, Thoi Bao Kinh Te Viet Nam (Viet Nam Economic Times) newspaper reported.

In Viet Nam, 20 per cent of urban families are in need of housing while around 7 million low-income earners want to buy or lease public housing.

Besides, 1 million workers in industrial parks and 1.2 million students want to rent proper homes.

This means that the country needs to add 60 million square metres of housing each year to ensure living space of 25 square metres per capita by 2020.

To achieve these objectives, the ministry has proposed a number of measures related to every aspect of the housing industry.

One of them is to create a legal framework to ensure transparency and sustainable development of the housing market.

This would require tweaking the Land Law, Construction Law, Housing Law, and Real Estate Business Law.

The Land Law and relevant decrees and decisions would be amended to simplify leasing and allotment of land for housing projects.

The Housing Law would encourage the construction of apartments, social housing, houses for lease, and make it mandatory to invite competitive bids for all housing projects.

Besides, there would be public debates on housing projects.

Foreign organisations and individuals are likely to be allowed to invest in these projects and also to buy and own housing.

All housing-related transactions would have to go through banking channels to plug tax loopholes.

The ministry has proposed that housing construction licences for domestic organisations and individuals should be scrapped, while the licensing procedures for foreign developers should be simplified.

It wants to improve financial and credit support for housing development.

It plans to create a robust financial and legal framework to enable the establishment of a secondary mortgage market, and set up a housing development fund for people to upgrade their homes, and for social-housing developers.

The ministry will also address technical aspects with clear regulations and standards for construction design and incentives for developers who use modern technologies and build environmentally friendly houses.

It plans to help low-income people and beneficiaries of Government policies acquire homes by getting banks to lend to them and supporting businesses and social organisations that build charity houses.

The ministry plans to use public and other funds to build housing for workers and dormitories and upgrade old students' dormitories.

It will encourage companies to invest in students' dormitories and houses for workers in industrial parks.

The proposals have been submitted to the Government for approval.

Metro pulls sturgeon from its shelves

Metro Thang Long, a branch of wholesaler Metro Cash&Carry Viet Nam, has suspended sale of sturgeon, pending a decision on its official origin from Ha Noi's Market Watch, according to an official from the supermarket.

Khuat Quang Hung, head of general affairs and corporate communications of the giant wholesale supermarket, said the suspension "was not really about the origin" but was done "to ensure that our customers are confident that all of our sturgeon is from Viet Nam."

"We also want to wait for the final decision from the market-watch team," he added.

Hung told Viet Nam News that the wholesaler sold between three and four tonnes of sturgeon monthly.

"We sell around 100kg of sturgeon daily. On average, each of our 19 branches nationwide sells only two sturgeon per day. We haven't seen any change in sales," he told.

Viet Nam News also contacted Nguyen Cong San, deputy head of Ha Noi's Market Watch, to ask about the origin of Metro's sturgeon.

San, however, declined to answer, only saying that "there is a lot of information that we need to clarify and examine."

However, a report in Tuoi Tre (Youth) newspaper yesterday quoted San as saying that Metro provided documents to the market-watch team that showed the sturgeon originated from Viet Nam.

The market-watch team, however, said it could not ensure it was Vietnamese sturgeon because the wholesaler had purchased fish from other suppliers.

San was quoted in the newspaper as saying that the market-watch team would examine Metro's suppliers before issuing a final decision.

An environmental police official of the Ministry of Public Security, who spoke on the condition of anonymity, told Viet Nam News that it was easy to check the origin of the sturgeon in Viet Nam by measuring the total amount sold nationwide and comparing it to the total supply.

Metro said it was willing to supply all of the necessary information to the department's market-watch team to prove that its sturgeon was from Viet Nam.

The controversy rose one week ago when a director of a company said that sturgeon sold at Metro was not from Viet Nam.

Metro, however, denied that accusation, saying all of its sturgeon was from Viet Nam.

HCM City's market-watch has checked several branches of Metro, all of which had possession of documents proving the origin of the fish

Ha Noi Giftshow set for October

The 2013 Ha Noi Giftshow will be held in the capital from October 26-29, reported the municipal Department of Industry and Trade, the event's organiser, yesterday.

The event will showcase fine art and handicrafts, wooden goods, pottery and jewellery from 550 stands, its said, adding that over 500-600 importers from overseas were expected to visit the show.

Vietnam, Japan cooperate in developing rare earth

Vietnam and Japan have determined to speed up the implementation of a cooperative agreement on developing rare earth between the two nations.

Deputy Minister of Industry and Trade, Le Duong Quang and Japan’s Deputy Minister of Economy, Trade and Industry, Akaba Kazuyoshi affirmed their determination at a recent working session to review the implementation of a co-operative agreement between the two governments.

Both sides stressed the need to outline a mid-term and long-term vision for the strategy to develop rare earth resources and also agreed to facilitate progress on the Ninh Thuan nuclear power plant project.

Quang Ninh, Luang Prabang boost tourism cooperation

Vietnam’s northern Quang Ninh province and Lao’s Luang Prabang province have agreed to promote bilateral cooperation with a view to creating a healthy tourism environment and effectively fostering tourism.

The agreement was signed on July 17 by the Quang Ninh Department of Culture, Sports and Tourism and the Luang Prabang Department of Information, Culture and Tourism.

The localities also joined hands to facilitate tourism business operations and ensure visitors’ rights and enterprises’ benefits.

They will work together to launch tours connecting their centres and tourist sites,and support the training of human resources, as well as exchanging information on tourism management.

Luang Prabang is home to many relic sites and landscapes that offer huge tourism potential, such as Phou Si mountain, Kuang Si falls and the Royal Palace Museum.

The province was recognised by UNESCO as a World Cultural Heritage in 1995 and earned more than US$61 million from tourism in six months of this year.

Conference discusses development of Phu Quoc island

The Southwest Region Steering Committee on July 17 hosted a conference adopting mechanisms and policies to develop Phu Quoc island into a tourism area of international standard.

Participants discussed mechanisms and policies related to organizational structure, human resources and services, planning work, infrastructure development and investment capital.

Deputy head of the committee, Bui Ngoc Suong said the development of Phu Quoc island was still far from matching its full potential, and required incentive policies to accelerate the development process.

In his speech, Deputy Prime Minister, Nguyen Van Ninh who is also head of the committee, underlined the need to devise a long-term vision for planning work and infrastructure facilities, to fully tap the Island’s potential and to carefully consider implementing a project to establish Phu Quoc city.

In future, the Government’s Party Organisation will report to the Politburo on a master plan to develop Phu Quoc island.

Wood exports to hit annual target

Vietnam's wood industry is expecting to meet this year's export target of US$5.5 billion, thanks to a market recovery, experts have said.

The Ministry of Industry and Trade says that wood exports gained a year-on-year increase of 12.5% in the first half of this year to US$2.46 billion.

Traditional markets such as the US, Japan and China also had a strong surge in export value.

Dang Quoc Hung, deputy chairman of the Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA), says the recovery of the US market is expected to fuel Vietnamese wood exports to this market to US$1.7 billion by the year’s end.

In the second half of this year, Chinese demand for wood will surge due to competitive price, and hopefully the mainland will import US$800 million of woodchips from Vietnam this year.

The ministry says that the export value of wood products is expected to increase by 10-15% to reach US$5.5 billion this year.

However, Hung says, almost all of the wood processing businesses have faced higher import prices for their materials, yet they could not increase their selling price, so they must have huge losses or might be even forced to stop production.

On the other hand, large businesses have managed to keep up production because they have modern equipment which reduces labour costs.

Companies have said that the Government should support them with low interest rate loans so that they can upgrade their equipment and technology and overcome production difficulties.

The Government should also not increase land rent to allow businesses to focus on their capital and to make investment in equipment and technology.

Vietnam joins new TPP negotiations in Malaysia

Vietnam is joining 11 other countries at the 18th round of Trans-Pacific Partnership (TPP) negotiations in Malaysia from July 15–25.

The parties involved are Japan, the US, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.

Relevant agencies will present their opinions and concerns regarding the negotiations at a special forum on July 20.

Participating delegation representatives have scheduled a press briefing for July 25 to update the TPP negotiations’ progress. All 12 countries are striving to finalise negotiations later this year.

Encompassing more than 792 million people, TPP member countries contribute nearly 40% of global GDP and one-third of total trade value.

The TPP seeks to promote deeper economic integration towards eventually establishing an Asia-Pacific Free Trade Area.

Phu Quoc Fish Sauce receives EU recognition

Phu Quoc Fish Sauce has officially earned a Protected Designation of Origin (PDO) certification from the European Union.

Representatives of the Directorate General for Agriculture and Rural Development of the European Commission presented the certificate to Vietnamese representatives at their meeting in Brussels, Belgium, from July 14–16.

Phu Quoc Fish Sauce was granted its EU designation of origin certification in late October 2012 after nearly four years maintaining stringent food hygiene and safety requirements.

The recognition will raise the product’s prestige, prevent the proliferation of EU market counterfeits, and spotlight its domestic and foreign profile.

At the meeting, delegates examined ways to strengthen trade promotion and cooperation between Vietnam and the EU.

EU representatives updated Vietnamese trade counselors and officials on new regulations and the status of the EU-Vietnam Free Trade Agreement (EVFTA) and the Vietnam-EU Partnership and Cooperation Agreement (PCA) negotiations.

Participants discussed EU recognition of Vietnam’s market economy status, the draft EU anti-dumping and anti-subsidy regulations, and expanding Vietnam’s participation in international events.

Vietnamese Deputy Industry and Trade Minister Ho Thi Kim Thoa said the meeting helps Vietnamese trade officials deepen their understanding of the EU’s new import-export policies and regulations. It also helps the two sides address stumbling blocks in ongoing negotiations and streamline coordination.

Thoa added her ministry is intending to work with the European Trade Policy and Investment Support Project (EU-MUTRAP) to assist businesses to develop protected geographic indication (GI) profiles for major agricultural products like Buon Ma Thuot Coffee, San Tuyet Moc Chau Tea, and Hoa Loc Mango.

This fourth meeting follows the success of the three previous in 2009, 2010, and 2011. The meetings are co-organised by the Vietnam Ministry of Industry and Trade and the European Commission under sponsorship from the European Trade Policy and Investment Support Project.

Vietnam, Belarus strengthen trade ties

The INFO Commodity Exchange (INFO COMEX) belonging to Ocean Group and the Belarus Commodity Exchange signed a cooperative agreement in Hanoi on July 16 to promote trade exchange.

The two sides pledged to share information about commodity markets and strengthen ties of cooperation in wholesale business.

They agreed to focus on potential areas of trade exchange.

Set up on April 22 2013 with its charter capital of VND150 billion, INFO COMEX is eligible to trade steel, coffee, rubber and other products within Vietnamese law.

It will start operation in early 2014.

Bac Ninh helps Samsung carry out new project

The northern province of Bac Ninh will provide over VND346 billion (US$16 million) to help Samsung Electronics Vietnam (SEV) build a production factory and social welfare establishments in Yen Phong Industrial Zone.

The construction is part of the company’s Samsung Electronic Vietnam 3 (SEV3) project, which was licenced by the Industrial Parks Authority last month.

The money will be used by the company in five years to lease nearly 559,365 sq.m land for the US$1billion project.

The SEV3 will focus on the research and development of high-tech electronic products such as mobile phones, telecom devices and spare parts.

Besides, the project will build a kindergarten, cultural and sports centres, a vocational school, a medical clinic, a park and houses for workers.

Once completed in 2017, the project is expected to contribute about US$27.5 million to the State budget each year.

The SEV has so far poured US$2.5 billion into Bac Ninh province with its technology complex here becoming the largest of Samsung Group in the world.

The company employs around 27,000 workers and its industrial production makes up 75.2 percent of the FDI sector and 70.5 percent of the province’s total figure.

Online corporate banking solution launched in Vietnam

ANZ Vietnam, an affiliate of the Australia and New Zealand Banking Group (ANZ), on July 17 launched an online corporate banking platform in Vietnam, offering clients fast, convenient and secure cash management services.

Vietnam is the third market where ANZ introduces its Asia Pacific regional form - ANZ Transactive.

The newly launched solution significantly reduces transaction processing time, and multichannel functionality allows access either through ipad, laptops or desktops, helping clients act on their business decisions on a timely basis.

Tared Muhmood, ANZ CEO Vietnam said the advanced solution further strengthens the bank’s capacity to support clients with increasing straight-through processing and cross-border transaction needs. “This new tool will help our clients better manage their liquidity and cashflow, save time and management costs, enhance risk management, optimise return on funds and make informed business decisions,” he said.

Muhmood said: “Vietnam is an important and high-growth market for ANZ and our continued investment in technology and improved platforms demonstrates our strong commitment to this market”.

In Asia, transaction volumes have multiplied by 100 since ANZ Transactive was first launched in Hong Kong and Singapore in December, 2011 and the number of clients using the platform has increase 50-fold. In Vietnam, transaction volumes show a 37% growth year on year in the first six months of 2013.

ANZ was one of the first international banks to operate in Vietnam, establishing a Vietnamese office in 1993. It has expanded to its 10 current Vietnamese branches and transaction points that offer a full range of services including retail banking, institutional banking, and commercial banking catering to small, medium, and emerging businesses.

In 2013, ANZ won the Visa Vietnam “Leadership in Card Activation” Bank Award. Trade Finance Magazine voted ANZ Vietnam the “Best International Trade Bank in Vietnam” last year.

Improving competitive edge for agricultural and aquatic products

Strengthening competitive capacity for Vietnam’s agricultural and seafood products was discussed at a seminar in Hanoi on July 17.

Deputy Minister of Agriculture and Rural Development, Ha Cong Tuan and Danish ambassador, John Nielsen said that the aim of the seminar was to improve transparency of information and ensure sustainable development for Vietnam’s agricultural and seafood products.

In addition, it also aimed to raise export business awareness about electronic tracing of product origin and its impact on improving the competitive edge of businesses in the international market.

Dr. Dang Kim Son, Director of the Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD) highlighted requirements for transparency of information, price, tastes, demand and policies in exporting farm produce.

Dr Son emphasized that although Vietnam’s coffee exports ranked second and its seafood exports came fifth in the world, the country’s exports of unprocessed farm produce make up to 90 percent of the total agricultural sector.

Delegates delivered reports on regulations about origin traceability for agricultural products imposed by Vietnam, EU, the US, Canada and Japan and emphasized the need to put an electronic traceability system into widespread use, while persuading businesses and management agencies to raise their awareness about the issue.

They also recommended that State management agencies such as the Ministry of Industry and Trade, Vietnam Customs and the Department of Food and Hygiene Safety issue regulations to apply an electronic traceability system and promote cooperation with independent international standards organisations.

Loan agreement for coastal corridor project to be approved

The Government on July 16 asked the State President to approve a loan and grant agreements for the Greater Mekong Subregion Southern Coastal Corridor Project (GMS-SCC) with additional financing between the State Bank of Vietnam (SBV) and the Asian Development Bank (ADB).

The agreement was signed between the SBV and ADB on May 23, 2013.

Under the loan agreement, ADB committed to granting a US$25 million preferential loan to Vietnam with a maturity of 32 years, and an interest rate of 1 percent per year during the grace period of eight years and 1.5 percent per year in the following years.

Meanwhile, under the grant agreement, the Australian Government pledged to provide US$12.4 million in non-refundable aid through the Australian Agency for International Development (AusAID) to implement the project which will run from 2013 to 2019.

The implementation of the loan and grant agreements will help to diversify and develop the economy in the GMS.

HCM City hosts 2013 Vietnam Plas exhibition

More than 260 domestic and international businesses from Thailand, Japan, the US, the Republic of Korea, India, Russia and China will attend the International Plastic and Rubber Industry Exhibition (Vietnam Plas) in Ho Chi Minh City from August 3-6.

The event will jointly be held by the Vietnam National Trade Fair and Advertising Company (Vinaxad), Vietnam Plastics Association (VPA), Vietnam Rubber Association (VRA), the Chan Chao International Enterprise Group, the Yorkers Trade and Marketing Service Company and Paper Communication Exhibition Services.

Vinaxad Deputy Director General, Pham Quynh Giang said the event provides a perfect chance for local plastic producers to access international markets, seek partners, exchange cutting-edge technology and improve the competitiveness of domestic products.

A series of other exhibitions, namely Vietnam Pack, Vietnam Print, Vietnam Foodtech & Pharmatech and Linkage Metalworking Vietnam, will also be held alongside the event.

How to settle bad debts?

Experts agree that settling bad debts in the banking system is the key to its restructuring, but it is still anyone’s guess to find the best solutions.

Le Xuan Nghia, Director of the Business Development Institute and member of the Government’s Monetary Policy Consultancy Council, says the use of money sourced from the State budget, the State Bank of Vietnam (SBV), and the Vietnam Asset Management Company (VAMC) is expected to solve bad debts and make it possible for businesses to access credit for development.

In fact, Nghia explains the headlong rush to borrow money for the profit driven development of real estate and stock markets during the 2007–2010 period only led to a decline in the accumulative level of the national economy.

Commercial banks were then forced to increase their chartered capital from hundreds of billions of Vietnam dong to thousands of billions of Vietnam dong to expand the scale of operation, even beyond their capacity of management and supervision.

Subsequently, bad debts arising from real estate and securities bubbles have placed a heavy burden on many small and medium-sized businesses.

Nghia cites some main reasons such as low aggregate demand, excessive stocks and inventories, and a depressed consumer market that have made them less and less competitive.

In 2009, for instance, there were attempts to exploit the discrepancy between 6.5 percent lending interest rates and 20 percent investment interest rates, but they all came a cropper.

A recent SBV survey shows bad debts account for 6.6 percent of total accounts outstanding (around VND2,400 trillion).

Nghia argues that the use of money from the SBV alone will be like foot dragging as the institution is still concerned about the possibility of inflation rearing its ugly head again.

If Vietnam decides to undertake domestic and foreign loans, and sell State-owned enterprises, bad debts can be dealt with in 2–3 years and real estate and credit growth will be back on track, Nghia says.

Such a combined solution can be applied to handle bad debts in 4–5 years to help maintain an annual growth rate of 5.5–6 percent.

The Republic of Korea was known as the only country to have successfully applied the State budget model since 1997 to bring businesses back to banks.

The Government and the SBV have established the VAMC to transform bad debts into business-contributed capital and act as a loan guarantor for businesses in their interactions with banks.

Many businesses—especially those involved in garments, leather, and packaging—are operating effectively. Only some, which have won export contracts for 2014, are facing certain bad debts from ill-advised real estate investment and are unable to accept bank interest rates with VAMC’s guarantee.

To cut to the chase, Nghia insists on modernising the banking system in line with international standards to avoid bad debts in future.    

New Zealand supports high yield fruit project

The New Zealand Institute for Plant and Food Research (PFR) is implementing a project to develop high yielding varieties of dragon fruit in Tien Giang province.

The project will be carried out from 2013 to 2017 in collaboration with the Southern Fruit Research Institute (SOFRI).

It will help develop a sustainable dragon fruit farming model and apply advanced post-harvest technology to expand the export markets for this kind of fruit.

In 2013, the PFR has disbursed NZD113,350 for SOFRI to run training courses for farmers, upgrade laboratories, complete a quality evaluation system, and conduct research regarding cold endurance and disease prevention for dragon fruit.

Tien Giang is currently cultivating dragon fruit on approximately 3,000 hectares. Many local farmers become well off thank to the high export value of the fruit.

The province plans to increase this farming acreage to 4,500ha by 2015 along with increasing trade promotion and expanding overseas outlets.

The SOFRI plays an important role in providing and transferring agricultural technology to Tien Giang’s farmers to grow high yielding dragon fruit.

The institute has successfully crossbred two new varieties of dragon fruit with red and purple flesh which have high economic values.   

Exports to the Netherlands up 15%

Vietnam’s exports to the Netherlands have increased 15 % annually since 2002, according to the Vietnam Industry and Trade Information Centre (VITIC).

Last year, its exports to this European nation reached more than US$2.47 billion, a year-on-year increase of 15.2%.

The Vietnam Customs reports that the Netherlands consumed US$1.137 billion worth of Vietnamese goods in the first five months of 2013, up 23.7 % compared to the same period last year, making it the third biggest Vietnamese importer within the European Union after Germany and Britain.

Phone handsets and components took the lead among Vietnamese exports to this market, earning more than US$262 million, up 157.2%.

They were followed by computers and electronics and spare parts (32.1%), footwear (14.3%), and garments and textiles (6.3%).

Experts say Vietnamese businesses have a great chance to penetrate the larger European Union market as the Netherlands is considered a gateway to the EU.

In 2013, Vietnam’s exports to the European market are estimated to reach US$24.8 billion, with US$2.7 billion coming from the Netherlands market.

Sea-based economy aims for stronger growth

Vietnam has called on more investors from other ASEAN countries to get involved in maritime shipping, sea port and logistics services.

At the 11th ASEAN Ports and Shipping conference held recently in Ho Chi Minh City, Head of the Transport Ministry’s Maritime Administration Nguyen Nhat said Vietnam is ramping up seaport infrastructure and logistics services with the goal of turning maritime shipping into one of the top sea-based economic sectors after 2020, contributing 53-55% of the country’s gross domestic product (GDP).

A World Bank report last year ranked Vietnam 53rd among 155 countries and territories in terms of logistics performance. Foreign firms dominate the market, holding 70% of market share.

With a high annual growth rate of 20-25%, Vietnam’s logistics market is still attractive to investors.

The country now has 42 seaports with 401 wharves which are able to accommodate container ships of up to 80,000-100,000 DWT. Notably, the Cai Mep-Thi Vai seaport in southern Ba Ria-Vung Tau province is working on a pilot project with the aim of receiving 150,000 DWT ships.

At the same time, Vietnam will also quicken administrative reforms in related fields and devise legal documents and strategies in line with Vietnam’s law and international conventions to which the country is a member.

Vietnam has joined 22 international conventions, treaties and protocols, and signed 22 bilateral maritime pacts with many countries.

Cooperative economy promoted in Mekong Delta

A seminar was held in Can Tho city on July 15 to consider building new-style cooperatives in the Mekong Delta.

The event was co-organised by the Ministry of Planning and Investment (MPI) and the Southwestern Region Steering Committee (SRSC).

In his opening speech, MPI Deputy Minister Dang Huy Dong emphasised the significance of the project to develop the collective economy.

The aim is to promote the sustainable development of the collective economic sector in the region, especially agricultural cooperatives to help improve farmers’ economic, cultural and social lives, he said.

According to Dong, the Mekong Delta region has developed the individual economic model for years. However, the model has not yet proved its effectiveness and people’s living conditions are still low with unstable incomes. The failure of the model is due to lack of cooperation, management and guidance.

The cooperative model is designed to deal with the problems facing farmers. By joining cooperatives, they will be provided with low-cost input materials and technical support as well as assistance in selling their products in the most effective way, Dong said.

The initial step will see the formation of three cooperative models in rice cultivation, tra fish breeding and fruit growing, Dong added.

Duong Quoc Xuan, Deputy Head of the SRSC said there are more than 1,300 cooperatives and 45,000 agricultural and seafood cooperative groups in 13 Mekong Delta localities, accounting for 14 percent of the country’s total number.

Uncertain US future for Tra fish

The recent US House of Representatives decision to repeal a catfish inspection programme is a relief for Vietnamese Tra and Basa fish exporters, but major challenges remain ahead.

The House voted down the programme after a July 12 debate with 218 votes in favour of the repeal and 206 votes against.

The programme was first included in the 2008 Farm Bill. If approved, it would have reallocated the responsibility for catfish import inspections from the US Food and Drug Administration (FDA) to the US Department of Agriculture (USDA).

Supporters insisted the USDA is better at screening for toxic chemicals and other contaminants.

Tra fish is one of Vietnam's major seafood exports

Opponents argued the programme not only wastes money but also creates de facto trade barriers protecting the domestic catfish industry from Southeast Asian exporters, including Vietnam.

Many organisations, including the Government Accountability Office and the National Fisheries Institute (NFI), claimed the programme has already cost the USDA millions of US dollars despite no consignments undergoing inspection to date.

US Representative Vicky Hartzler, one of the many congressmen opposed to the programme, said repealing it will save American taxpayers more than US$170 million over the next 10 years.

However, the programme has received support from many Senators, meaning it still poses considerable risks to Vietnamese Tra and Basa fish exporters.

The Senate is going to consider the programme in another debate. If common ground cannot be reached, the US could be forced to close its doors to Vietnamese Tra and Basa, seriously damaging Vietnamese exporters and hundreds of thousands of farmers.

It would take Vietnam 5 to 7 years to upgrade its production and processing processes in line with USDA standards, enabling the resumption of seafood exports to the US.

Vietnam earns US$400 million from Tra and Basa fish exports to the US every year. The Vietnamese Association of Seafood Exporters and Producers reported the US became Vietnam’s leading Tra fish importer in the first five months of 2013, consuming US$170 million.

Seminar discusses Myanmar’s investment potential

Hanoi hosted a July 15 seminar discussing Myanmar’s emerging opportunities and potential for investment opportunities.

It reviewed the status of economic cooperation between both nations’ business communities and sought to promote trade activities in the future.

Tran Bac Ha—President of the Bank for Investment and Development of Vietnam (BIDV) as well as the Association of Vietnamese Business Investors in Myanmar (AVIM)—said AVIM has already dispatched 50 delegations and nearly 1,500 business representatives to Myanmar for market survey and collaboration missions. BIDV leaders said the bank is eager to become the institutional pioneer for investment in Myanmar and support Vietnamese businesses bold enough to perceive the country’s opportunities. BIDV is currently preparing for establishing a joint banking venture in Myanmar.

Vu Van Trung, Deputy Head of the Ministry of Planning and Investment’s Foreign Investment Agency, highlighted the chance to capitalise on Myanmar’s emerging consumer goods, agriculture, and processing technology markets. Vietnam has invested nearly US$600 million in Myanmar.

Myanmar’s representatives thanked Vietnamese businesses for their contributions to investment and trade activities, affirming the Government of Myanmar is intent on continually improving its business and investment environment for all foreign partners.

The Vietnamese business community told the Government of Myanmar that issuing a regulation guiding the implementation of new investment laws would be a boon to their trade and investment activities.

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