LG Electronics to build $1.5b factory

LG Electronics Viet Nam has announced plans to build a US$1.5 billion factory complex in Trang Due Industrial Park in the northern city of Hai Phong.

Spanning more than 400,000 square metres, the complex will be built in two phases from 2013-17 and 2017-23 and is expected to produce annual revenues of $1 billion by 2016.

LG will use the factory to manufacture various equipment, including electronic products for cars, smart TVs, washing machines, vacuum cleaners, and smart phones for export to some 50 countries.

Exports to Italy estimated at $2.2b

Viet Nam's exports to Italy are likely to reach US$2.2 billion by year's end, according to the Vietnamese Trade Office in Italy.

Among Viet Nam's key export products are mobile phones and components, footwear, coffee, seafood and apparel.

The trade office also predicted that two-way trade would hit $3.3 billion this year and $3.5 billion in 2014.

Paper expo to boost quality

A pulp and paper exhibition, to be held in HCM City next May, is expected to improve product quality in the country by enabling local manufacturers to find partners, according to the Minh Vi Exhibition and Advertisment Services Co (VEAS).

At least 100 domestic and foreign companies would participate in the three-day event, bringing together officials from companies involved in advanced technologies, machinery, and chemicals used in the industry, as well as pulp and paper products.

Vu Ngoc Bao, vice chairman of the Viet Nam Pulp and Paper Association, said the country's consumption of paper products this year was about 3 million tonnes, of which almost half were imported.

VEAS will also organise two other exhibitions, for the rubber and tyres and coating industries, alongside co-operation with partners in Viet Nam, China, and India.

New steel plant opens in HCM City

SMC Trading Investment JSC inaugurated its new steel manufacturing plant, worth VND175 billion (US$8.33 million), in HCM City on Wednesday.

Covering 12,500 sq.m in the city's Tan Tao Industrial Zone, the plant will manufacture 80,000 tonnes of steel annually.

HCM City allows internet registration

The HCM City Department of Planning and Investment will begin allowing businesses to register through the internet.

Internet registrations will begin on January 2, 2014 for joint stock companies and limited liability enterprises with more than two members.

Further, after January 15, one-member limited companies and private firms will be allowed to register via the internet.

The department will provide instructions on the internet to help firms complete their documents in 48 hours (except weekends and national holidays), and it is expected to handle the processing of the online forms within four days.

Also, companies can use a delivery service from HCM City Posts to have government registration approval documents delivered to their offices.

Bank loans $152m for power cables

Vietcombank and the National Power Transmission Corporation (NPT) signed a contract worth VND3.2 trillion (US$152.3 million) yesterday to finance a 500kV power line linking two northern provinces, Lai Chau and Son La.

The VND4 trillion ($188 million) project, to be built over 158.5 kilometres, crosses the districts of Muong La, Thuan Chua, Tuan Giao, Muong Cha and Muong Lay.

The new line will connect the Son La Hydro-power plant with the national power grid, while linking small hydro-power plants in the north-western region to the national power network.

The project would ensure a power supply from the plants to stations in the north and enable the national power system to operate without interruption.

This key national project is scheduled to become operational by 2015 and begin transmitting electricity from the Son La Hydro-power plant.

The construction of the $3.2 billion plant was begun on December 2, 2005 and is expected to be completed by 2015.

The 1,200MW project would supply 4.67 billion kWh of electricity annually to the national power grid.

Speaking at the signing ceremony, Nguyen Manh Hung, NPT's general director, said the country needed some $1 billion each year to invest in power transmission lines, since line construction has been slower than electricity production.

Vietcombank has provided credit for 17 important power projects in the fields of power generation, transmission and distribution, with total capital of VND23 trillion ($1.09 billion).

Vietcombank and EVN also signed a bilateral co-operation agreement in 2010 to develop comprehensive relationships in several areas.

Vietcombank has been one of the country's largest commercial banks, with a network of more than 400 branches. Officials anticipate opening an additional 15 branches nationwide within the next year.

Cashew growth belies problems

The strong growth in recent years notwithstanding, the cashew industry encounters many challenges, including a fall in area, threatening its development.

This requires a development strategy to enable the industry to develop in a sustainable manner in the coming years, according to the Department of Crop Production.

The department along with other agencies and the Viet Nam Cashew Association (Vinacas) has drawn up one for the period until 2020, Nguyen Van Hoa, the department's deputy general director, said.

It held a seminar in HCM City yesterday to discuss the strategy with scientists, businesses, farmers, and other stakeholders before submitting it to the Government for approval.

The industry has achieved impressive growth, making Viet Nam one of the world's largest cashew exporters since 2006.

Exports were worth US$1.47 billion last year, the country's fourth largest agricultural exports after rice, coffee, and rubber. They are expected to top $1.8 billion this year, he said.

But it now faces several challenges, including a shrinking of cultivation area and unstable output, Hoa said.

Nguyen Nhu Hieu, deputy head of the department's industrial crop division, said ageing trees and abnormal weather patterns have decreased yields, and many growers prefer other crops for higher profits, which has reduced the area under the nut.

"Area under cashew shrank by 107,392ha in the last seven years to 326,037ha last year.

"Domestic production feeds only 30 per cent of processing capacity and is reducing."

He said the development strategy envisages the area remaining at 300,000-320,000ha, producing 400,000 tonnes of raw cashew nuts a year, meeting 40 per cent of processing demand.

The industry plans to increase the rate of fully processed nuts to satisfy the requirements of customers, add more value, and boost domestic consumption, he said.

The strategy also calls for reviewing and tweaking cashew zoning plans, replacing aged cashew trees, developing inter-cropping models, and developing high-quality seedlings and advanced farming techniques.

Modern technologies and equipment will be used, products diversified to meet increasing demand from customers, companies will focus on building brands and promoting their products.

Nguyen Duc Thanh, Vinacas chairman, urged the Government to support farmers in planting cashew trees to replace old ones, adopt policies to encourage firms investing in deep processing, and strengthen inspection of exports.

Nguyen Thi Kim Nga, chairwoman of the Binh Phuoc Cashew Association, said the strategy should help improve communications to enable farmers to understand the Government's new policies, embrace new technologies, and obtain other benefits.

Nguyen Van Rung, a cashew grower in southern Dong Nai Province, said the industry should consider transplanting cashew seedlings, adding their productivity is very high.

At the seminar, 51 outstanding cashew farmers from 10 provinces received a Certificate of Merit from the Ministry of Agriculture and Rural Development.

Vinacas was conferred the Labour Medal, Second Class, for its contribution to socio-economic development.

Border trade needs nurturing

The Government needs to come up with flexible policies to exploit the significant potential that exists for developing border trade in the country, experts say.

According to the Central Border Trade Steering Committee, Viet Nam shares long borders with China, Laos and Cambodia with dozens of international border crossings.

Border trade has grown at around 10 per cent each year reaching a total of US$72 billion during the 2008-13 period, accounting for an increasing portion of bilateral trade that the country enjoys with its three neighours.

For instance, the border trade has accounted for 30 per cent of the total bilateral trade between Viet Nam and China every year.

One of the busiest trading outposts is the Mong Cai border gate in northern Quang Ninh Province, the committee said. At $28.17 billion, this gate accounted for 45.3 per cent of total trade value at border gates and seaports in the province.

Such high numbers have shown that border trade between the province and China has played an important role in trade policies and also the province's socio-economic development policies.

Hoang Minh Tuan, head of the Border and Mountainous Trade Department under the Ministry of Industry and Trade, said the borders have 285 border markets, border gate markets and markets in border gate economic zones. These markets have seen high growth in business activities and border gate economic zones have become dynamic trade centres.

However, management of border trade activities has been implemented under general trade policies, so they have not helped promote the potential of border trading, Tuan told the Vietnam News Agency.

Trade policies for the three countries have had to change many times and trade at the border gates between Viet Nam and those countries have been affected by these changes, he said.

Nguyen Van Binh, deputy chairman of the People's Committee of northern Lang Son Province, said the Government should have flexible management policies to assist the economic management of provinces. The provinces, meanwhile, should have more power in managing border trade activities to flexibly deal with changes in trade policies of neighbouring countries and ensure increased border trade values, Binh said.

Also, a representative from the Ministry of Defence said the Governemtn should provide direction from the centre to the provinces in management of border trade activities, due to demands on developing markets and enterprises. Therefore, the steering committee should be directed to quickly collect information about market demands, including goods, prices and challenges for making market forecasts.

Analysts upbeat on securities outlook

While investment channels, such as gold, real estate and banking, seem not particularly upbeat, securities companies in Viet Nam predict a better scenario for the stock market in 2014.

Saigon Securities Inc (SSI) said that with stable currency and inflation, expansionary fiscal policy, and active participation from foreign investors, VN-Index might close higher in 2014 than it did this year.

The local market would benefit from local factors, such as the Government's greater emphasis on sustainable growth, the comprehensive restructuring of State-owned enterprises, the growing banking sector and the further integration into the global economy.

SSI assessed the Government policy of expanding room for foreign investors' ownership as an impetus for the entire market, as it would attract additional investment inflows.

Le Duc Khanh, investment strategy director at Maritime Bank Securities, told the local press that investors should continue to spend on shares of infrastructure, shipping, electricity, textiles, garments and consumer goods, because they pay better attention to basic characteristics, than to risky shares.

Reforms needed to exploit trade pacts

Viet Nam needs to enact reforms so it might take advantage of economic integration agreements, said Le Dang Doanh, former head of the Central Institute for Economic Management.

Speaking at a conference to review Viet Nam's economy this year, and discuss the outlook for next year, Doanh highlighted opportunities that Viet Nam could take advantage of in the near future thanks to economic integration agreements.

The conference was held yesterday by the Foreign Trade University's Institute of Economics and International Trade.

For example, by 2015 when the ASEAN Economic Community is expected to form, the country can expand its markets, at least to Cambodia and Myanmar.

Furthermore, if it is successful in signing the Trans-Pacific Partnership Agreement, it can attract more investment in agriculture from Japan since, at that time, Japan would open its agriculture market. Also, public procurement would be opened to State-owned enterprises, and equally with private businesses.

Doanh made note of the World Trade Organisation's Bali Agreement and its US$1 trillion trade pact covering customs, agriculture and assistance for the world's impoverished populations and least developed nations, which was reached early this month on December 7.

Doanh said that thanks to the agreement, Viet Nam could increase agriculture exports and put in place customs reforms.

However, he emphasised that Vietnamese enterprises must prepare for tougher competition when joining the global and regional stage, especially in service industries.

Enterprises in Viet Nam were facing many difficulties, including a gloomy real estate market, bad debt caused by ineffective public investment, and ailing State-owned enterprises, he said.

"We identified causes for the ailment of the country's economy, prescribed medicine, including the restructuring of credit institutions and State-owned enterprises," he said, "but the implementation is not strong enough."

Doanh cited a reduction in investment from the private sector, which was at 15 per cent of total social investment from 2007-10, and is now down to 11.5 per cent last year. Also, the credit growth rate reduced from 53.89 per cent in 2007, to 23.38 per cent in 2008, to only 7 per cent last year.

Moreover, he said that he saw few preparations being made among enterprises for expanding the country's market opening, even while Government was speeding up negotiations.

Vice Rector of the Foreign Trade University Dao Thu Giang said that one of the major weakness of Vietnamese enterprises was their poor connections among enterprises operating in the same industry, since they now sought information and were collecting data on markets and integration by themselves and rarely sharing information with each other.

"In regional and global economic integration, domestic enterprises should unite and boost their linkage to create larger strengths," she said.

Further, university lecturer and international trade expert Dao Ngoc Tien said that the world economy, and the nation's domestic economy, were expected to recover next year.

Also, Viet Nam was negotiating economic integration agreements, including a Trans-Pacific Partnership Agreement, Regional Comprehensive Economic Partnership (RCEP), and EU - Viet Nam Free Trade Area (EFTA), which offered opportunities for Vietnamese enterprises.

However, enterprises still knew little about the agreements, which resulted in poor preparations.

"Enterprises should not expect the agreements would bring them all opportunities," he said.

Japan leading firm to expand investment in Vietnam

Japanese leading motor manufacturer NIDEC Corporation plans to expand its business in Vietnam and raise its investment to over 1 billion USD from 600 million USD currently.

According to NIDEC Chairman Shigenobu Nagamori, the firm will set up five additional subsidiaries in Vietnam with the goal to turn the country into not only a manufacturing hub but also a leading technology research centre in the region.

Within its business strategy with a vision for as far as the next 50-100 years, the firm will bring the latest technology in the field to Vietnam, while extending it operation beyond production to research and development (R&D) activities as well as building a distribution network and enhancing human resources training, he said.

NIDEC also plans to establish a Southeast Asian network with Vietnam playing the central, he said, adding that the corporation will send Vietnamese workers to Japan for training to meet the demand of its R&D centres.

Established in 1973, NIDEC Corporation has presented in Vietnam since 1990. The corporation’s 69 year-old Chairman of the board, President and CEO has been ranked 23rd among the 50 richest people in Japan in 2013 by Forbes magazine.

Quang Nam enhances external relations to boost development

Leaders of the central province of Quang Nam affirmed that they will continue efforts to facilitate operations of foreign organisations and enterprises in the province next year.

At a New Year get-together on December 19, Chairman of the provincial People’s Committee Le Phuoc Thanh told representatives from foreign organisations and enterprises operating in the locality that the province has always attached importance to external relations.

According to Thanh, Quang Nam has established cooperative ties with Osan and Yongin cities of the Republic of Korea, Battambang and Siem Reap provinces of Cambodia, Cotes d’ Armor of France and Laos’ Attapu and Champasak provinces.

He particularly noted that the partnership between Quang Nam and the Korean International Cooperation Agency (KOICA ), the Japanese International Cooperation Agency (JICA), the World Bank, the Asia Development Bank has seen in-depth development through effective joint projects.

In the first 11 months of this year, Quang Nam granted investment licences for five new foreign direct investment (FDI) projects worth 37.5 million USD, while FDI disbursement in the January-October period stood at 57.8 million USD. In the same period, foreign-invested enterprises in the province contributed 400 billion VND (18.8 million USD) to the provincial budget and generated jobs for about 20,000 labourers.

The province also approved 82 foreign non-governmental projects with a total value of 200 billion VND (9.4 million USD), while 42 million USD from official development assistance (ODA) sources has been disbursed in 2013.

Speaking at the get-together, Director of Groz Beckert Vietnam Gerd Josef Tevfel said his company’s revenues totalled 20 million USD this year and employed more than 700 local workers. He affirmed that the company plans to expand business next year, contributing to economic growth of the host province.

Vietnam invests 15.5 billion USD in projects overseas

Vietnamese enterprises have so far committed a total of 15.5 billion USD in 742 projects abroad.

According to the Ministry of Industry and Trade, mining industry tops the list with 99 projects totalling 4.6 billion USD, equivalent to 13.3 percent of overall projects and 46 percent of total investment capital.

Agro-forestry and food processing comes to second with 80 projects worth of 1.9 billion USD, accounting for 10.8 percent of all projects and 23.6 percent of total investment capital, while power projects also attracted 1.8 billion USD, accounting for 12.1 percent.

Vietnamese has expanded their investment to 59 countries and territories across the world.

HCM City called to assist Polish businesses

Visiting Deputy Speaker of the Polish Parliament Jerzy Wenderlich has suggested Ho Chi Minh City increases its ties with Poland to make it easier for both sides’ businesses to expand partnerships.

At a working session with the city’s Investment and Trade Promotion Centre (ITPC) on December 19, the Deputy Speaker commented that Ho Chi Minh City is a big economic centre and it should work to connect Vietnamese and Polish businesses.

ITPC Director Pho Nam Phuong said her centre can launch trade promotion trips for both Vietnamese and Polish businesspeople who wish to explore respective investment opportunities.

She assured that the ITPC will support Polish investors coming to the city in processing all necessary procedures to establish long-term business.

At present, HCM City sees the presence of only one Polish company called COMARCH, which specialises in software solutions and computers.

According to Jerzy Wenderlich, the Polish Businesspeople Association has a number of members who are interested in investing in Vietnam.

In the meantime, Polish investors have mostly pumped money into Vietnam’s northern provinces, he said.

He added that the Polish authorities will pay attention to and provide assistance for their businesses seeking investment partnerships in the southern region, in particular Ho Chi Minh City.

HCM City is home to Tan Son Nhat airport, which handles about 17 million passengers a year. It also houses representative offices and bank branches of 60 countries and territories worldwide.

The city plans to have 24 industrial, export processing zones by 2020.

The Polish Deputy Speaker visited Vietnam from December 17 to seek to further enhance bilateral legislative ties.

Vietnam launches 124 social housing projects

Across the country 124 social housing projects have been implemented with a total investment of more than 30.672 trillion VND (1.442 billion USD), including 85 projects for low-income earners and 39 projects for industrial zone workers.

The Ministry of Construction in coordination with the authorities of big cities such as Hanoi , Ho Chi Minh City and Da Nang have established working groups to implement the Government Resolution 02/NQ-CP on social housing.

According to the resolution, 25 out of 30 commercial housing projects in Hanoi were converted to social housing projects, contributing a total of 14,300 social homes.

HCM City has also licensed four out of 26 housing projects that requested to be turned into social housing projects.

The implementation of social housing projects has so far shown that the supply of such houses has been limited, restricted by obstacles to complete a variety of procedures which involve many different agencies.

However, the Government has issued Decree 188/2013/ND-CP on the development and management of social housing with stronger support and clearer procedures, which aim to increase social housing supply as well as regulating the property market.

OCB lends VND180 bil. to EHome 5 project

Orient Commercial Bank (OCB) has pledged to provide a VND180-billion loan for Nam Long Investment Joint Stock Company to develop EHome 5 project in HCMC’s District 7.

Having cooperated with Nam Long Company to develop EHome 3 project, OCB expected that the credit contract will facilitate construction of the new property project, said OCB deputy general director Pham Linh.

The new project, known as EHome 5 The Bridgeview, is located in a highly developed and crowded urban area. The project will also benefit from infrastructures and public facilities of Nam Long-Tan Thuan Dong urban area project including schools, parks, medical centers, entertainment areas and supermarkets.

The investor expects to launch the sale of the project apartments in January, 2014, giving a 4% discount for the 60 first homebuyers.

On December 13, OCB and Suoi Tien Culture and Tourism Joint Stock Company clinched a comprehensive cooperation agreement, under which the bank would provide a VND60-billion credit for the enterprise, said Huynh Le Mai, deputy general director of OCB.

Eastspring Investments launches first open-ended fund

Eastspring Investments Fund Management Company announced on Tuesday to start selling fund certificates of its first open-ended and multi-asset investment fund, Eastspring Investments Fund (ENF), from December 24.

Under the current regulations, 90 days or less after the initial public offering (IPO), if ENF manages to mobilize at least VND50 billion and attract at least 100 investors excluding professional ones, it can get a license from the State Securities Commission for official operation.

“We aim at raising investment capital in a stable and sustainable manner by diversifying assets in the portfolio including shares, bonds and bank deposits,” said Nguyen Minh Tung, business development director of the fund manager, said at the launching ceremony on Tuesday.

ENF expects to invest in shares listed on the two local exchanges, government bonds, government-guaranteed bonds, treasury bills, corporate bonds, convertible bonds and deposits at large commercial banks.

“We think that now is the right time for open-ended funds and the recent launch of some funds is a good sign for the market,” said Ngo The Trieu, director of stock and bond investment at the company.

The economic slump has shown signs of bottoming out. The Vietnamese dong currency has been fairly stable although poor consumer demand remains a worry, Trieu said.

For corporate bonds are still seen a risky asset, Trieu said the weak point of this kind of debt paper is that information is not fully updated while there seem to be no ways for evaluating their creditworthiness. However, corporate bonds in Vietnam and regional countries are still attractive to investors as their coupons are two to four percentage points higher than those for government bonds.

Corporate bonds are attractive but risky and of low liquidity. So, maintaining corporate bonds at a reasonable level and lower than other assets in the portfolio is highly recommended, Trieu said.

HSBC Vietnam Bank is the supervising bank of the ENF while nine securities firms will distribute fund certificates. The fund manger managed US$1.4 billion as of the end of June with over 4,000 investors.

Debt trading firm wants status upgrade

Debt and Asset Trading Company (DATC) is seeking approval for upgrade to a corporation under the Government to facilitate its settling of bad debt, said a DATC official.

Speaking at a seminar on China’s bad debt settlement experiences in Hanoi on Tuesday, Pham Manh Thuong, deputy general director of DATC, said DATC leaders wanted the firm to be upgraded in terms of operation, capital and corporate model, and become a debt settlement arm of the Government.

Thuong also sought approval for DATC to add chartered capital and issue government-backed bonds to buy bad debts at banks.

Thuong suggested establishing some joint stock firms with chartered capital of around VND2 trillion each, in which DATC would hold stakes of 36-49%, and said these companies could raise funds for bad debt settlement.

Given DATC’s calculations, foreign banks reported bad debts of over VND6.7 trillion by mid-2012, or 3.56% of the total of the entire banking system.

Meanwhile, local lenders, including State-run banks, commercial joint stock banks, finance firms, finance leasing companies and central people’s credit funds, reported bad debts of over VND182 trillion, making up 9% of total outstanding loans and 96.4% of bad debt in the banking system.

Bad debts of State-owned commercial banks accounted for 48.6% of total bad debt. As the real estate sector is still gloomy, the high ratio of debts related to the sector would increase risk of losses for credit institutions, Thuong said.

As of the end of 2012, total outstanding loans at local banks had reached over VND3,000 trillion, around 115% of gross domestic product (GDP). Total assets of banks amounted to nearly VND5,200 trillion, of which chartered capital was around VND394 trillion.

By late 2012, there had been 48 commercial banks in the country – five State-owned commercial banks, 34 commercial joint stock banks, four joint venture banks and five 100% foreign-owned banks.

Profitability of the local banking system is low in the region and elsewhere in the world. In 2011, the return on equity (ROE) of State-owned commercial banks was 4.23%, commercial joint stocks banks 1.95%, and joint venture and foreign banks 1.9%. Meanwhile, banks in Indonesia had 25.9% ROE, Malaysia 18.9%, the Philippines 13.3% and Thailand 13.6%.

Capital still stuck at banks

Many credit institutions have seen capital for credits surge as capital demand remains low while mobilization has risen fast, prompting banks to join a lending rate competition to speed up credit growth.

Le Hung Dung, chairman of Eximbank, said that one bank has offered enterprises low interest rates and advance money for them to pay debts at Eximbank so that the firm could become one of its clients.

The branch director of a large commercial bank said that the branch has seen no new or big-name customers since the start of the year. The branch has mainly lent to old customers.

Currently, a number of banks are focusing on trying to keep customers by repeatedly lowering lending rates and turning some short-term loans into medium-term loans so the businesses will have more time to pay debts.

The bank has strong capital flow and the head office is ready to inject capital if branches find borrowers. The lender has also launched many incentives to lure new customers, the banker said.

Nguyen Mien Tuan, vice chairman of Sacombank, said that a number of banks have offered valued corporate customers rates at only 7% per annum, the same as the mobilization rate ceiling for terms of six months or less.

Low lending rates may be offered by State-owned commercial banks that enjoy low capital expenses. When inter-bank deposit rates are low, they will boost lending, especially to valued clients, Tuan said.

Nguyen Hoang Minh, deputy director of the central bank’s HCMC branch, said that local enterprises have registered to borrow around VND7.5 trillion to prepare for Tet sales but banks have registered to lend up to VND45 trillion.

Meanwhile, it is not easy for the city to reach a credit growth rate of 9% at the year-end, meaning that VND27 trillion worth of loans must be extended this month.

Banks now have profuse capital while demand from enterprises has not increased, Minh said.

Major banks Vietcombank and VietinBank had reported credit growth at 3.1% and 3.7% by the end of September compared to late 2012 respectively.

Nguyen Phuoc Thanh, deputy governor of the central bank, told the Daily that capital surplus has caused competition among banks. For the positive side, enterprises will enjoy low interest rates. However, capital may flow back into banks as firms will deposit back the money to get high mobilization rates.

When loans are extended, banks will calculate them as credit growth and when money runs back into banks, it will be considered as deposit growth. As a result, the real growth rates could be distorted.

Meanwhile, banks will also face liquidity risks for racing to lower interest rates, Thanh said.

Haiphong port overloaded with abandoned containers

Nearly 5,000 containers with several types of goods, including many illegal imports, are stuck in Haiphong Port.

Haiphong Customs Department said, of the total, the Vietnam Shipbuilding Industry Group (Vinashin) and the Vietnam National Shipping Lines (Vinalines) abandoned nearly 200 over the past five years.

An anonymous official from the department said all the owners of the containers have yet to make any statement for refusing to retrieve the goods, and the time limit to do so has expired.

“Too many goods stuck at the port have been posing increasing difficulties for one of the most important ports in the northern region,” an anonymous leader of the department commented.

Goods stuck at the port range from frozen food that is banned to industrial waste and second-hand products.

Upon the request by the prime minister, the Ministry of Industry and Trade (MoIT) ceased licensing the import and export of several goods, including used rubber and automobile tires, waste plastic, waste paper and waste iron beginning from January 1, 2013.

Local authorities find it hard find the owners of the containers, much less fine them.

The General Department of Vietnam Customs’ Department of Anti-Smuggling Investigation is classifying goods at the port to find the best solution.

For used consumer goods that arrived at the port before April 4, when the Ministry of Public Security issued a circular on banning temporary imports for exports, they would seek approval from the MoIT to grant export licenses.

In 2013, the Haiphong Customs Department forced owners of dozens of containers to export their goods at the port and destroyed several containers of chicken, beef, and animal organs.

In several cases, authorities detected tonnes of ivory illegally imported into Vietnam under the name of “processed sea snail shells”.

Vietnam refuses to accept new registration document of Indian Company

Truong Quoc Cuong, Head of the Drug Administration of Vietnam under the Ministry of Health, decided on  December 18 to revoke registered number and not accept new registration document of XL Laboratories Pvt Company of India.

Vietnamese health authorities decided to withdraw and refuse new registration document from Idian- XL Laboratories Pvt as Indian company that has been recently found to have violated Vietnamese medicine regulations.

The Drug Administration of Vietnam recently received documents from testing units reported that Indian company produces medicine with poor quality. For instance, some drugs of the Indian company that do not meet the contents of registration dossiers already approved by the MoH include Tifaxcin-100 with registered number VN-3448-07; Tinidazole 500 mg with its registered number VN-7891-09; Kalflam with its registered number VN-1672-06; Diclofokai with its registered number VN-5689-10.

ASEAN – a lucrative market for Vietnamese exporters

A trade promotion seminar in Hanoi on December 19 heard Vietnam-ASEAN trade is expected to reach US$75 billion this year, including US$35 billion worth of Vietnamese exports.

However, Le Hoang Oanh, Deputy Head of the Ministry of Industry and Trade (MoIT)’s Trade Promotion Department, said the total figure is not in commensurate with both sides’ potential.

MoIT Asia-Pacific Market Department Head Pham Thi Hong Thanh concurred, noting Vietnam’s trade agreements with ASEAN members—including the ASEAN Trade in Goods Agreement (ATIGA) and the Protocol of Common Effective Preferential Tariffs—offer local exporters numerous opportunities.

These opportunities are only broadened by ASEAN’s network of trade partnerships with China, the Republic of Korea, Japan, India, Australia, and New Zealand.

Seminar delegates urged Vietnamese businesses to upgrade their technology, diversify products, and monitor and respond to market trends. Competitiveness needs improvement ahead of the imminent establishment of the ASEAN Community.

Nguyen Manh Dung, a representative from the Department of Processing and Trade for Agro-Forestry-Fisheries and Salt, said local producers and exporters should ensure their post-harvest and processing technologies and methodologies meet international food hygiene and safety standards.

ASEAN is Vietnam’s third largest export market behind the US and the European Union (EU). Vietnam has committed itself to trade liberalisation via free trade agreements in ASEAN and ASEAN Plus. The removal of tariffs and the imposition of quality and product origin regulations have proved mixed blessings for local businesses.

Trade agreements obligate approximately 90% of existing tariffs must drop to 0% by 2015. Most of the remainder will disappear in the following three years. Vietnamese small and medium-sized businesses will find it especially important to update their market information and identify advantageous footholds before tariff reductions take effect.

Farm produce’s future export prospects

Vietnam’s agricultural products exported in 2013 have increased by 1.5% to US$25.25 billion, defying a fall in global market demand.

According to the latest report by the Ministry of Agriculture and Rural Development (MARD), November’s agricultural exports were estimated at US$2.42 billion in revenue.

Dr. Dang Kim Son, Head of the Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD), is optimistic about future prospects of Vietnam’s agricultural products, both locally and internationally. He says the successful performance will depend on the possibility of ensuring food hygiene and safety and increasing the added value of products in the farming sector.

Metro Cash & Carry Vietnam Director General Philippe Bacac who has ten years of experience in developing trade infrastructure facilities and supply chains, says domestic farmers have huge potential for seafood, fruit, and vegetable production.

He recommends that they focus on improving the quality and competitiveness of products, and establishing closer links with exporters.

In mid-November, Vietnam had its first Shanghai-bound shipment of 23 tonnes of dragon fruit, paving the way for agricultural products to corner the Chinese market through the Metro distribution network. Metro operates in 32 countries and territories around the world.

Metro Singapore Office Representative Do Kim Dung said the first dragon fruit shipment was part of a contract signed by Rong Do Company and there will be more orders in the near future.

Dung says Metro is seeking potential partners to ensure a steady supply of high-quality garlic, ginger, lemons, rambutan, and strawberries from Vietnam.

She emphasizes the importance of strictly adhering to origin and quality regulations. Local exporters have to meet the British Retail Consortium (BRC) standards, International Food Standard (IFS), and Good Agricultural Practice (GAP), with strong commitments to providing an annual volume of 8,000 tonnes of farm produce for Asian and European markets.

Since early this year, Metro has purchased more than US$6 million worth of Vietnamese fruit, vegetables, and seafood for its 747 retail centres in the world. It plans to sign more contracts worth US$12 million with Vietnam next year.

Vietnam enjoys US$650 million trade surplus

Vietnam achieved an export revenue of nearly US$125.79 billion by December 15, up 15.4% from a year earlier, according to the latest statistics released by the Vietnam General Department of Customs (VGDC).

Its trade exchange reached US$250.93 billion, up 15.2% compared to the same period last year. Its trade balance showed a deficit of over US$90 million. Since the beginning of this year, the country has produced a trade surplus of US$650 million.

Vietnam’s imports in the first two weeks of December were valued at US$10.59 billion, bringing the total import turnover in the past 11months and a half to US$125.14 billion, a year-on-year increase of 15.1%.

For its part, the foreign direct investment (FDI) sector earned US$77.32 billion from its exports (excluding crude oil), making up 61.5% of the country’s total export earnings at an annual growth rate of 27.2%.

It accounting for 56.7% of Vietnam’s total import turnover hit US$71.01 billion by December 15, or 24.2% higher than the previous year’s figure.

Hanoi hosts Vietnam Fashion Fair 2013

As many as 200 Vietnamese enterprises have joined Vietnam Fashion Fair 2013 which being held at the Giang Vo Exhibition Centre in Hanoi from December 19-25.

There are more than 400 stalls showcasing different kinds of garment and textiles, footwear, jewelry, and other luxury products.

Covering 7.000 meter squares, the fair also displays the latest collections of fashion designs for 2014.

Visitors will have the chance to select items of famous brands including Nha Be, Duc Giang, May 10, Viettien, Hanoisimex, Hoa Tho, and TNG.

The fair, co-organised by the Vietnam Expo Centre in coordination with the Vietnam Textile and Garment Group (Vinatex) and the Vietnam Leather, Footwear and Handbag Association (LEFASO), and Vietnam Gold Business Association, is part of their efforts to contribute to developing the fashion industry and responding to the “Vietnamese give using Vietnamese goods” campaign.

Greater Mekong Sub-region nations work on tourism

The number of tourists to the Greater Mekong Sub-region (GMS) has been on the rise for some time, bringing sizable economic and social benefits, and proving the tourism sector’s important role in the area’s socio-economic development.

Tran Phu Cuong, Deputy Head of the Department for International Cooperation of the National Tourism Administration, made the remarks at a Mekong forum to promote tourism in the GMS in Hanoi on December 19.

The event, co-hosted by the Ministry of Planning and Investment and the Association of Vietnam, Laos and Cambodia Economic Cooperation and Development, is part of efforts to facilitate win-win economic cooperation among Cambodia, Laos, Myanmar, Thailand and Vietnam, and China’s Yunnan and Guangxi provinces.

Cuong said to maintain a growth rate in the smokeless industry, the GMS nations should be aware of the importance of benefits brought by the sector.

They should work together to turn the region into a unique tourism destination where attractions are shaped by rich natural resources, an untouched tourism environment and cultural diversity, he said.

In 2012, nearly 44 million people visited the region, according to the official.

Participants assessed tourism partnerships in the region and the Greater Mekong Sub-region and presented opportunities for tourism investment in the GMS countries.

They also touched upon solutions to boost connectivity and partnerships for travel companies while suggesting the GMS countries’ Governments develop complete policies to step up tourism development cooperation in the region.

Vietnam, Poland boost trade ties

There is plenty of opportunity for expanding bilateral trade and investment cooperation between Poland and Vietnam, said a senior Polish legislator.

Vice Speaker of the Polish parliament Jerzy Wenderlich was speaking at December 19 meeting with HCM City’s Investment Trade and Promotion Centre (ITPC).

He noted Polish investment is currently concentrated in northern Vietnam. The Polish Government intends to support Polish enterprises seeking to establish themselves in Ho Chi Minh City.

ITPC Director Pho Nam Phuong said the centre will promote trade by sponsoring Vietnamese business delegation visits to Poland and facilitating reciprocal opportunities.

 ITPC will also help Polish enterprises apply for investment licenses and open representative offices for their HCM City investments.

ITPC representatives briefed their Polish guests on HCM City’s advantages as Vietnam’s largest economic centre.

Tan Son Nhat International Airport processes approximately 17 million passengers per year. The city itself is home to offices and banks representing 60 countries and territories.

HCM City also plans to encompass 24 industrial parks and processing zones by 2020.

Nghe An eyes VND12 trillion investment target

Nghe An Province is aiming to welcome a minimum of 75 investment projects in 2014, with registered capitalisation totalling VND12 trillion.

The goal will reinvigorate the province’s efforts to improve its investment environment, actively support licensed projects, and become more responsive to investor opinions.

Nghe An has acknowledged the need to raise its provincial competitiveness index (PCI) rating and will work to minimise bureaucratic delays, ease land access, and help with human resource hiring.

The province licensed 72 projects, including 67 locally-invested, in 2013 with total registered capital amounting to VND12.1 trillion.

The investment projects created nearly 12,000 jobs for local workers. The province also cancelled and withdrew the certificates of five failed investment projects with total registered capital of VND2.840 billion.

General assessments indicate the province has yet to achieve a level of investment commensurate with its potential. Both the number of investment projects and the value of that investment are below national averages.

Vinacomin, Czech businesses ink monorail conveyor contract

Vinacomin Motor Industry (VMI), under the Vietnam Coal and Mineral Industries Group (Vinacomin), signed a contract with several Czech companies to manufacture a monorail conveyor system on December 19.

Under the contract, the Czech companies will help VMI produce and install the monorail conveyor’s components and synchronous devices following European standards that are suitable for Vietnam’s working conditions.

The monorail system is hoped to help reduce accidents and improve efficiency in the underground coal mining process.

The contract marked a significant step for Vinacomin and its increasing use of machinery and industrial equipment produced in the country to mine coal, said Vinacomin Director General Le Minh Chuan.

In addition, the group has also focused on technological innovation, especially research and production of machinery and equipment for mining to improve working conditions for its workers and reduce costs.

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