Date set for opening of first McDonald’s restaurant

McDonald’s first restaurant in Vietnam called McDonald’s Da Kao will open on February 8 at 2-6 Bis Dien Bien Phu Street, Da Kao Ward, HCMC’s District 1.

According to Le Ha My Tram representing McDonald’s Vietnam, all preparations for the opening have been completed and the kitchen will go into operation on January 29.

Nearly 50 supervisors and waiters of McDonald’s Vietnam returned to Vietnam on January 18 after over seven months of training in the Philippines. The managerial team trained in Australia will return in one more week’s time.

According to Tram, to have a smooth operation, the restaurant needs around 150 employees, not to mention office workers. After the first restaurant opens, employees for the second one will be recruited.

The second McDonald’s restaurant is still under construction and its opening date has not been announced.

FPT wins financial management system project in Cambodia

A subsidiary of Vietnam’s software giant FPT has defeated its rivals from the US, Canada, Singapore and Europe to secure a contract worth nearly 10 million USD on supplying financial management information system (FMIS) for Cambodia.

The FPT IS and the Cambodian Ministry of Economy and Finance on January 23 kick-started work of the project, which is expected to help Cambodia further enhance its financial and budget management capacity.

As the main contractor, the Vietnamese company will get involved in launching the system in 31 central and local units of the Cambodian Treasury within 26 months, starting from January 2014.

FPT IS General Director Duong Dung Trieu said before FMIS, his company was undertaking similar projects for the Vietnam Tax General Department and the State Bank of Vietnam (SBV).

FPI IS has aimed to earn 200 million USD in revenue from foreign markets by 2018, focusing on those in the US, Japan, Europe, Singapore, Laos, and Cambodia.

Dong Nai targets infrastructure

The southern province of Dong Nai will set aside VND3 trillion (US$143 million) this year to develop key infrastructure projects to attract foreign investors.

The statement was made by provincial People's Committee chairman, Dinh Quoc Thai.

In spite of the province's encouraging results in attracting foreign investment in recent years, the lack of adequate infrastructure remains a problem, local authorities said, adding that a paucity of investment is to blame for the poor infrastructure.

The Dau tu (Vietnam Investment Review) newspaper quoted the vice chairwoman of the French-owned Scavi Group, Tran Thi Moc Lan, as saying that Dong Nai's infrastructure, particularly transport, has lagged demand.

"It often takes four hours to reach HCM City from our factory in the province, even though the distance in kilometres is not that long. That has influenced not only our delivery schedules for partners but also our business plans," she told the newspaper.

Yamaguchi Kimio, chairman of the Japanese Business Association in HCM City, agreed. He told Dau tu that several of the association's 600 members had ongoing projects in the province and that they are also concerned about the difficulties in transportation.

In order to deal with the problem, Dong Nai is undertaking efforts to attract investment for infrastructure development, besides receiving funds from the provincial budget, the Department of Planning and Investment director, Bo Ngoc Thu, said.

Dong Nai has set a goal of attracting $700-$900 million in foreign direct investment (FDI) this year, with a focus on infrastructure construction, high technology products, ancillary industries and the services sector, she added.

Last year, the province attracted $1.35 billion in FDI, 35 per cent higher than the annual target and 20 per cent higher from 2012, according to the department.

It licensed 67 new projects with a total registered capital of $651.3 million, while 68 existing projects were allowed to increase investment by a cumulative $700 million.

The FDI disbursement in 2013 increased to $970 million, 7.8 per cent higher than the annual target, and raised the province's cumulative disbursements to over $13 billion, or 67.6 per cent of the total registered investment.

Increased investment promotion activities in Japan turned the country into the leading investor in the province, with newly registered additional investment of $465.7 million.

By December, the province had 1,059 approved projects worth $19.5 billion, it said.

Binh Dinh plans to attract $400m in foreign investment

The central province of Binh Dinh expects to attract 45-60 domestic and foreign investors this year, local media reported yesterday.

The Binh Dinh online newspaper said the province hopes to attract a total direct investment of VND8 trillion (about US$400 million).

The province implemented several investment promotion schemes last year, particularly in Japan, with the aim of enhancing its image among investors.

Binh Dinh's investment promotion activities have focused on attracting high technology and environmentally friendly projects.

The province has also expressed interest in attracting small and medium investors possessing high and clean technology to its industrial zones, as well as for the development of local ancillary industries.

MoIT launches index to monitor co-operation trends

The Ministry of Industry and Trade announced the launch of the Viet Nam International Linkages index 1995-2012 (VInterLink) to review the trends in co-operation with nine strategic partners.

The co-operation trends will be monitored in the fields of trade, investment, education, tourism and official development assistance.

Thai Son of the National Committee for the International Economic Co-operation Office (NIDEC) said that between 1995 and 2012, the partnership with China experienced the largest increase, up 33 times.

That was followed by the partnership with New Zealand, which rose 30 times. The country's partnerships with the ASEAN, Japan, the US, South Korea, Australia, Canada and the EU also witnessed increases.

The new index is the outcome of a project aimed at enhancing capacity building and co-ordinating global economic integration implemented by NIDEC and the ministry.

HCM City to host annual packaging exhibition

The annual ProPak Viet Nam and Plastics & Rubber Viet Nam exhibitions will be held simultaneously from March 4 to 6 in HCM City.

ProPak is a processing, filling and packaging exhibition in which processing machinery and technologies for food packaging, beverage bottling, printing and labelling, making paper and corrugated box, bagging and storage, and post-harvest activities will be on display.

The exhibition will also feature seminars titled "Improving packaging design with New Product Development techniques", and "3D Printing & Reverse Engineering Applications for Agile Development in Plastic Industry".

The Viet Nam Association of Food Science and Technology will organise a conference titled "Food Engineering– Innovations & Advanced Processing Techniques" and the Viet Nam Association of Testing Laboratories, one on "Food Testing for Quality Assurance". —

SMEs need stronger legal skills

Small and medium enterprises (SME) in Viet Nam need to improve their legal understanding so that they can improve their response to problems, an industry insider says.

Le Anh Van, deputy director of the Centre for Legal Assistance and Human Resource Development under the Viet Nam SMEs Association, said at a recent conference that this would increase the competitiveness of Vietnamese enterprises.

Van said that the number of enterprises in the country surged sharply after the introduction of the Enterprises Law in 2005 but their quality and competitiveness were still poor, partly because of insufficient legal understanding and low management skills.

At present, small and medium enterprises (SMEs) account for over 95 per cent of total enterprises in Viet Nam. Most of them are family run and over 97 per cent of SMEs don't have staff specialising in legal matters or take lawyers' advice regularly.

They usually ask for legal advice only when they get involved in lawsuits or conflicts, Van said, adding that in such cases, the enterprise owners were very worried and confused.

He said that because of limited legal understanding, Vietnamese enterprises usually felt less confident in negotiating international trade contracts and this sometimes ended up in accepting unfavourable conditions for themselves.

There were also cases where Vietnamese enterprises suffered losses or breached contracts because they did not know the basic principles of who can sign contracts to make them legal.

"It's time to add more conditions for people who want to become a company director or legal representative of a company," Van said, adding that such candidates must be required to undergo a company management training course or a course on the Enterprise Law.

Lecturer Phan Thi Thanh Thuy of the Ha Noi National University's Law Department said many enterprises did not pay proper attention to legal advice and legal information. This exposed them to higher risks, especially as Viet Nam integrates deeper with the international economy, she said.

For example, a company that creates a new model of its product but does not register its intellectual property with authorised agencies faced the risk of having it stolen by other companies, she said.

Lawyer Pham Hong Hai, who is also an assistant professor, said that although Viet Nam had policies encouraging co-operation between lawyers and entrepreneurs, this was yet to happen.

Meanwhile, in many countries, most enterprises consulted regularly with lawyers or law firms, as did foreign companies operating in Viet Nam, he noted.

He said that it was necessary to raise awareness of enterprises about the role of lawyers and the value of their advice.

Moreover, the bar should more actively join legal aid programmes for enterprises and advocate for the establishment of legal aid funds in cities and provinces to strengthen connections between entrepreneurs and lawyers, he said.

Mekong Delta aims for stronger foreign investment

Mekong Delta provinces have been creating all favourable conditions to lure as many investment projects as possible from both foreign and domestic sectors, said an official from the Steering Committee for the Southwest Region.

According to Nguyen Quang Phong, the Committee’s deputy head, the regional provinces have been speeding up administrative reform to shorten the process of licensing projects, setting up information centres that provide investors with data on the market, procedures and trade promotion policies in parallel with paying heed to train high-quality human resources.

In addition, the infrastructure system and urbanisation have been propelled along with the connectivity of regional provinces to Ho Chi Minh City to be hastened in efforts to expand trade exchange with foreign partners.

Presently, a string of major works have been brought into operation, such as Cai Cui seaport (Ca Mau province), Tra Noc airport (Can Tho city) and Phu Quoc airport (Kien Giang).

Three power centres in O Mon, Ca Mau and Kien Luong with a total capacity of around 9,000 MW to 9,400 MW, and the road network linking the region with the whole country such as National Highway 1A are also being prioritised.

The committee is proposing a particular policy to attract investment in the region, with priority given to the upgrade of seaports and airports.

Mekong Delta provinces now have 802 foreign investment projects with a total registered capital of 11 billion USD. Long An gets the most with 3.5 billion USD in capital, followed by Kien Giang with 3.1 billion USD and Tien Giang, 1.1 billion USD, according to statistics from the Ministry of Planning and Investment.

However, the ministry said the above mentioned outcome is still far from the region’s potential, blaming asynchronous infrastructure, an unqualified workforce and an unattractive investment environment.-

Big tuna catch for Phu Yen fishermen

First offshore fishing vessels of this year’s fishing season anchored at Ward 6 port, Tuy Hoa city of the central Phu Yen province on January 22, bringing back tunas weighing 30-50 kilograms each for export and domestic use.

By noon on January 23, eight vessels had returned, five of which had 1.7-3 million tonnes of tuna.

Chairman of the Ward 6 fishing trade union Phan Thuan said despite the decreased price this year, ships with output of at least 1.7 tonnes will enjoy a profit.

Thuan said although tuna price and output was lower this year, fishermen still felt encouraged with prompt support from the State, adding that most of the ships are now preparing to return to the sea after the joyful Tet holiday.

Tariff exempted for central bank's material gold

PM Nguyen Tan Dung has signed a Decision to exempt tariff for material gold imported and exported by the State Bank of Viet Nam (SBV) as from March 15, 2014.

The Decision was made to meet the demand for exporting gold bar overseas and importing material gold at international standard of the SBV.

It is expected to make it easier for the SBV in material gold import and export to produce gold bar to stabilize the domestic gold market.

Earlier, Decree No. 24/2012/NĐ-CP on the management of gold trading stipulates that there will be a government monopoly of bullion production and of the import and export of raw materials for gold bar production.

Flashy fashion discounts with high price tags

As Tet shopping picks up, several clothing stores in Hanoi have launched sales to reel in customers, who might be better served shopping at a local market.

Many shops along Chua Boc, Pham Ngoc Thach, Cau Giay and Nguyen Luong Bang streets put "sell-off" sales signs outside their doors, advertising discounts of as much as 70%

The sales person of one shop on Cau Giai Street said, "Our prices are the lowest this time of year because we want to get rid of our inventory before buying a new stock after Tet."

The shop slashed the price on one sweater from VND260,000 (USD12.3) to VND170,000 (USD8.04) . The sales person said it was imported from China.

But the same sweater was found selling for only VND140,000 (USD6.62) at Dong Xuan Market in Hoan Kiem.

Nguyen Thi Hoa, owner of a space at the market said, “I’ve sold clothes at market prices for a decade. Small traders often buy clothes from wholesalers to sell at their shops citywide. It’s obvious that prices at the market would lower than that at the shops.”

Another sales person at a shop on Chua Boc Street confirmed this. “We have to pay VND20 million (USD946.3) a month for rent as well as paying our employees. Promotion programmes are another way of advertise so as to attract more customers. Most of our customers are students who are relatively easy-going and come only once.”

Nguyen Manh Hung, Vice Chairman of the Vietnam Standardization and Consumers Association, said that many Vietnamese consumers are no longer interested in Chinese products, so retailers sometimes change labels to make goods appear Vietnamese."

Petrol firms anticipate strong year

The Viet Nam National Petroleum Group (Petrolimex) will hasten its process of restructuring in 2014, with 80 per cent of planned reform completed last year.

With some 6,200 outlets nationwide, the group operates in various areas ranging from petroleum and gas to insurance, transportation and services.

According to Petrolimex General Director Tran Van Thinh, the group contributed VND31.3 trillion (roughly US$1.4 billion) to the State budget last year, representing a year-on-year rise of 14 percent.

Holding about 52 per cent of the market share, the group mainly focuses in mountainous and midland areas, especially those where the socio-economic situation remains unstable, he said.

The Petrolimex leader added that the group accounts for up to 90 per cent of the market share in the poor localities. Meanwhile, the figure stands at only 30-40 per cent in HCM City and Mekong Delta provinces.

The Russia-Viet Nam oil and gas joint venture, Vietsovpetro, has set a target of pumping up 5.1 million tonnes of crude oil, raking in more than $3.8 billion in 2014.

Tu Thanh Nghia, Vietsovpetro General Director, said at 2014 task conference yesterday that the joint venture earned $4.75 billion in 2013, $1.05 billion higher than the set target.

The joint venture contributed $2.89 billion to the State budget, he said, adding that its performance in drilling, exploitation and reserve increase exceeded from 3 per cent to 40 per cent compared with the targets.

Thanks to an array of solutions, the joint venture exploited nearly 5,600 tonnes of oil, 156,000 tonnes higher than the yearly target, Nghia said.

Along with $187 million earned from other services, the joint venture had, for the first time, seen its spending on production drop compared with the previous year with a year-on-year decrease of over $60 million, he said.

Banks brace for ATM withdrawal surge surge

Banks in HCM City are ensuring that all ATMs will operate smoothly during the Tet (Lunar New Year) holidays to meet demand for cash withdrawals.

Most ATMs in the city are often crowded with scores of workers gathering to withdraw wages and bonuses.

According to the Commercial Joint Stock Company for Foreign Trade of Viet Nam (Vietcombank), withdrawal demand increases two- or threefold during the holiday, especially in industrial parks and export processing zones.

A representative of the HCM City Export Processing Zones and Industry Parks Authority said that long queues had been spotted in front of ATM booths in industrial parks, as many companies have already paid holiday wages and bonuses.

To ease ATM congestion seen in previous years, local banks have carried out timely repairs on ATMs and have opened new ATMs at busy spots.

Local banks said there would be a sufficient supply of cash for their ATMs before, during and after the Tet holidays.

Vietcombank, for example, has moved several ATMs where cash withdrawal demand is low to areas including IPs that have high demand.

Vu Thi Quynh Anh, deputy director of HDBank's Card Centre, said the bank had foreseen increased cash withdrawals at this time of year so it had prepared several measures to cope with it.

"In particular, the bank has increased the amount of cash in each ATM and set up a team ready to quickly address any breakdown in its network," Anh said.

Chu Hong Minh, director of Dong A Bank's Card Centre, also revealed that his bank had begun a general inspection of its ATMs, data transmission networks and power resources to ensure that all its ATMs will operate well during the Tet season.

"The machines are supplied three or four times per day with cash on the days approaching the Tet compared with only one or two times on normal days. Meanwhile, the bank is also preparing spare cash drawers to be ready to supply to ATMs," Minh said.

Dong A Bank also has a system to watch over transaction volumes as well as technical operations at its ATM system to ensure stable operations and any breakdown can be addressed quickly, he added.

Because the amount of cash in ATMs have increased significantly on those days, most banks in the city have paid more attention to ensuring security for their customers by deploying guards at several "risky" locations and installing cameras in all booths.

They have also cooperated with the local police to intensify patrols at ATM locations adjudged more vulnerable to theft and robbery.

"It is not only on Tet holidays that we keep close watch over our ATM system to ensure stable operations," a representative of ABBank said.

According to the State Bank of Viet Nam, the banking sector's ATM system now is able to meet people's cash demand on normal days only, so overloading often hits those machines on festivals or holidays when firms and agencies pay salaries and bonuses at the same time.

Since December the central bank has sent several documents asking commercial banks to ensure cash supply for their ATMs, and to open new ATMs at places where cash withdrawal demand is high. The bank has also required local banks to work with enterprises to pay workers' salaries and bonuses at different times to reduce the pressure on the ATM system.

Thaco ranks second nationally in vehicle sales

The Truong Hai Automobile company (Thaco) sold 28,284 vehicles last year, earning revenues of VND13.3 trillion ($633 million), which represented a 14 per cent growth.

Thaco ranks second in vehicle sales in Viet Nam, based upon these sales figures, of which 15,000 vehicles were trucks and buses.

Further, Thaco cornered a market share of 29.2 per cent in 2013, according to Thaco's executive chairman Tran Ba Duong.

The company also contributed VND3.6 trillion ($171 million) to the State budget last year.

Thaco has produced and distributed three brands: Kia of South Korea, Mazda of Japan and France's Peugeot. Kia posted the best sales figures in 2013 with 8,870 cars sold for the year.

PVFCCo to build NPK manufacturing facility

The Petroleum Fertiliser and Chemicals Company (PVFCCo) plans to build a factory capable of manufacturing approximately 250,000 tonnes of NPK fertiliser per year.

The project requires a total investment of about US$200 million, of which $120 million will be borrowed from credit institutions.

The factory is expected to begin operations in 2016, and will help in ridding the domestic market of fertilisers sold under falsified brand names.

Viet Nam imports 400,000 tonnes of NPK fertiliser every year.

HCM City FDI soars over $2b on new projects

Foreign direct investment in HCM City was up 52 per cent last year, reaching over $2 billion, according to the Department of Planning and Investment.

Of this, $1.05 billion was invested in 477 new projects, an increase of 76.7 per cent from the previous year. Some $305 million of this went to 102 science and technology projects.

Despite the many challenges facing the sector, $147 million was directed to 10 property projects. Also last year, 67 foreign projects, with a total registered capital of $436.7 million, were relocated to other provinces and cities or shut down.

There are 4,924 operational FDI projects in the city now, with a total registered capital of $33.5 billion. Singapore accounted for the largest amount of investment last year, followed by Malaysia and South Korea.

BIDV prepares to launch IPO on City stock market

Shares of the Bank for Investment and Development of Viet Nam (BIDV), under the code BID, are expected to be listed on the HCM City Stock Exchange (HOSE) on Friday.

After HOSE's approval last Thursday of the bank's registration for listing, there will be 2.8 billion shares on offer for VND18,700 (US$0.89) each. The shares account for 5 per cent of the total capital in the stock market, making the shares of the banking industry total 27 per cent, leading the stock market in term of capital.

BIDV is the country's second largest bank by assets and networks, after Agribank. As of September 30, 2013, the bank's total assets were worth VND535.8 trillion ($25.5 billion) with 127 branches and nearly 700 outlets in 63 cities and provinces.

The bank, more than 95 per cent of which is owned by the State, held an IPO in late December 2011 at a price of VND18,600 ($0.88). The planned debut price is to be not less than 1.5 times that of the IPO price of VND27,800 ($1.32).

According to Tran Phuong, BIDV's deputy director, the stock market is witnessing signs of recovery because of an improvement in the economy. One of the most visible signs is the VN-Index jumping 8 per cent to a four-year high, which suggests that it is a good time for stock listings.

In 2012, BIDV's pre-tax profit was estimated at more than VND5.2 trillion ($247.62 million). The expectation is that it earned at least VND6 trillion ($285.7 million) in pre-tax profit this year.

Phuong said that BIDV plans to seek two foreign partners, who will have a total shareholding of 25-30 per cent after listing. A recent regulation, Government Decree No 1, allowing foreign strategic partners to own up to 20 per cent in a local bank's total shareholdings, is likely to make any investment in the financial markets more attractive to investors.

Experts said BIDV's listing will help increase the size and liquidity of the stock market, as well as the transparency of the banking sector, which is undergoing significant restructuring currently.

Central EZ seeks investment

The Chan May-Lang Co Economic Zone (EZ) in the central province of Thua Thien - Hue aims to attract a total investment of over VND1.5 trillion (US$71.4 million) this year.

In order to reach this goal, local authorities said investments of up to VND1.95 trillion ($93 million) have been made in upgrading the infrastructure for transport, electricity, water and telecommunications in the province.

The authorities also plan to continue simplifying administrative procedures to encourage new investors, while creating a more favourable environment for investors already permitted to implement licensed projects.

The EZ has, so far, attracted 32 projects with a total registered capital of over VND35.47 trillion (more than $1.68 billion), including 10 projects with a total investment of $1 billion by foreign investors. Of these projects, 12 are already underway.

One of the largest projects is an $875 million tourism complex, being financed by the Banyan Tree Group of Singapore.

According to the provincial People's Committee, the EZ's location, near the national road 1A and the Lang Co Bay, make it highly attractive to investors, as the port is extremely convenient for transporting goods on both land and sea.

In addition, several financial incentives have been provided to attract investors, such as tax exemptions for the first four years of operation, a 50 per cent tax reduction for the next nine years, and a 50 per cent tax rate for high-income employees.

In an attempt to improve the province's investment climate, the EZ's management board has also revoked the licenses of five slow-moving projects that had a combined investment of VND4.56 trillion ($217.2 million).

Another four projects, valued at a total of VND2.68 trillion ($128 million), are under consideration.

Initiative aims to reform tra fish industry

Viet Nam's tra fish industry aims to develop a sustainable supply chain by 2020, experts said at a conference yesterday.

Toward that end, the Viet Nam Association of Seafood Exporters and Producers (VASEP) and the Viet Nam Cleaner Production Centre launched the US$3.2 million project on Establishing a Sustainable Pangasius Supply Chain.

Pham Anh Tuan. deputy director general of VASEP, said the project would help the industry meet international quality standards. Over 48 months, Viet Nam will establish a model farm and training centre and start developing a legal framework to clarify the origin of tra fish products.

Viet Nam currently provides over 90 per cent of the world supply of tra fish. Hundreds of thousands of farmers in the Cuu Long (Mekong) Delta earn a living from tra fish farming and processing for export. Annually, exports bring in $1.8 billion.

However, the industry faces several quality problems, such as antibiotic residue, which negatively affect the image of Vietnamese products around the world.

The project aims to help at least 70 per cent of processors and 30 per cent of animal feed producers to participate in a cleaner production programme.

The goal is for at least 50 per cent of target businesses to provide tra fish that meet the standards of the Aquaculture Stewardship Council, which are highly regarded in international markets.

The project will be implemented by the Viet Nam Cleaner Production Centre, VASEP, World Wildlife Fund (WWF)-Viet Nam and WWF-Austria.

Viet Nam-South Korea trade surges

The two-way trade between Viet Nam and South Korea hit a record level of US$27.3 billion in 2013, a 29.5 per cent increase over the previous year.

The figures released by the General Department of Customs showed that the bilateral trade has experienced a continuous rise since 2010, especially after Viet Nam's admission to the World Trade Organisation and the signing of the ASEAN-Korea Free Trade Agreement.

Viet Nam's trade deficit of $4.9 billion in 2009 grew to $14.1 billion last year with Viet Nam's imports from South Korea posting a 33.3 per cent increase to $20.7 billion, and accounted for 15.7 per cent of the country's total imports.

The main imports by Viet Nam were computers, electric gadgets and spare parts at a total value of $5.1 billion, which is 54.7 per cent higher from the previous year and accounted for 24.6 per cent of the total imports of these goods.

In addition, Viet Nam's imports of machinery and equipment, spare parts and telephones from South Korea have been high, accounting for half of the total imports of these goods.

Vietnamese exporters earned $6.6 billion from the South Korean market, up 18.9 per cent against the previous year, and accounting for 24.3 per cent of the country's total exports by value.

Major Vietnamese exports to South Korea included garments and textiles ($1.6 billion, up 53.5 per cent), crude oil ($724 million, down 9.3 per cent), and seafood ($512 million).

Viet Nam has sustained an import surplus with South Korea for several years. Several Vietnamese businesses, in particular, importers, have been eager to invest in or explore opportunities in the South Korean market.

Around 9,800 local businesses had trade relations with South Korea in 2012, which increased to 1,100 last year.

Oh Jea Hack, South Korean Consul General, was quoted as saying by the Viet Nam Economics Times newspaper that bilateral trade between the two nations in 1992 was valued at $500 million.

After 20 years of relations, that value has jumped to $21 billion in 2012, representing a forty-fold increase from 1992.

The two countries aim to raise the value of bilateral trade to $70 billion by 2020.

Positive year forecast for industrial production

The industry and trade sector of Viet Nam expects the index of industrial production (IIP) to grow to 6.3 per cent this year as the world economy recovers, helping boost exports.

Restructuring will continue to be a priority this year, according to the Ministry of Industry and Trade.

Industrial production showed signs of recovery in 2013, with the IIP growing by 5.9 per cent and inventories decreasing. However, the macro-economy did not fully stabilise, consumers continued to budget carefully and free trade agreement negotiations remained unfinished. In addition, natural disasters and diseases presented a continued threat.

Deputy Minister Le Duong Quang said that the industrial production of Viet Nam was still dependent on the world economy and thus vulnerable to global fluctuations.

He added that technology remained low-level and the support industries did not receive adequate investment, meaning the country depended on imports for many raw materials.

Nguyen Tien Vy, director of the ministry's Planning Department, said that the industry and trade sector would hasten restructuring, especially of State-owned enterprises, to enhance efficiency and competitiveness.

He added that technology should play a bigger role in production and the localisation rate should be increased.

According to the Viet Nam Chamber of Commerce, 42.5 per cent of companies planned to expand business in 2014 while 50.7 per cent maintained the size of their businesses.

This suggested that enterprises felt a better business year was coming in 2014, said Pham Thi Thu Hang, the VCCI's general secretary.

Hang suggested enterprises improve their risk management capacity in order to take advantage of the Government's support policies.

Chairman of the Viet Nam Mechanics Association, Nguyen Van Thu, said that preferential capital sources should be made accessible to enterprises to help them boost production.

Auto industry’s focus now shifted to pickups, buses

The national automobile industry development strategy until 2020 and visions towards 2030 will focus on developing small multi-purpose vans and buses, while the development of vehicles of four to seven seats needs reconsideration, the Government said.

In Correspondence No.455/TB-VPCP as minutes of the Government meeting on the nation’s automobile development strategy, the Prime Minister asked competent agencies to draw up the strategy with a focus on developing small multi-purpose vans to replace self-made tractors and other rudimentary vehicles for use in rural areas.

Meanwhile, the development of four-to-seven seats is not mentioned as the core of the strategy as seen in previous automobile development master plans. The Research Institute for Industrial Strategy and Policy under the Ministry of Industry and Trade had earlier drafted the master plan targeting the manufacture of personal vehicles rather than that of vans.

In fact, in terms of small vans and buses, the local industry has achieved certain successes with the local content ratio in these vehicles amounting to over 40%.

Over the past time, many have ascribed the auto industry’s failure to the weak production of the personal vehicle segment. Many foreign-invested automakers despite enjoying numerous incentives have made little contribution to the industry, which is attributable to fast-changing tax policies that caused difficulties for those automakers wanting to make long-term investments.

Local experts now believe that time is running out for the auto industry although it has been classified as one of the prioritized industries. That is because the tax rate imposed on cars in the ASEAN region has been cut to 50% this year compared to 60% in 2013 and 70% in 2012, which will be slashed to 0% only in 2018, they said.

Automakers forecast automobiles would become widely popular in Vietnam’s economy in 2020-2025 given the huge demand at home. Because of this, Japan has suggested the auto industry as a key bilateral cooperation sphere.

In fact, several foreign-invested automakers stated that they could still invest in auto production for further development if there are suitable policies and clear and stable strategies.

With the Prime Minister’s conclusion, the development strategy for the auto industry will be changed accordingly. The Prime Minister also requested the industry-trade ministry to cooperate with other ministries and agencies to review mechanisms and policies, especially tax policies besides specific criteria and conditions to ensure the feasibility, stability and suitability with international commitments.

It is expected that the market will see huge demands for autos after 2020, at some 400,000 units annually, which will soar to roughly two million annually in 2030, with sedans under nine seats accounting for around 70% of the total.

If local production fails to meet such vigorous demand, the country will have to spend billions of U.S. dollars on auto imports annually.

Retail space in HCMC desperately awaits vendors

Developers of retail commercial space in HCMC has undergone a dreary year with operators of trade centers desperately awaiting space lessees, according to a survey conducted by the realty market researcher CBRE Vietnam.

The total area of retail space that found vendors last year was only 26,700 square meters, equivalent to just one-third of that in the previous year when 79,500 square meters was leased out to retailers. Last year saw few successful transactions, and the vacancy rate at trade centers remained high at 12% of the total available space of 625,000 square meters.

Classy trace centers faced tougher competition from street-front houses that were put up for lease to retailers, who took flight from such centers and sought cheaper space outside. The offered monthly rate at retail space at trade centers averaged some US$50 a square meter, while the rate at street-front houses at prime sites was only some US$20, according to the market researcher.

Despite the dreary picture, the market of retail space got more bustling at the end of last year, with several projects put into operation. These included the Parkson Cantavil Premier in HCMC’s District 2 and the Aeon shopping mall in Tan Phu District.

In addition, many well-known retailers, such as McDonald’s, Dunkin’ Donuts, Super Sport and Dairy Queen, are also looking for good site to set up shop.

CBRE Vietnam noted that retail space rents have been sliding since 2009, although the decline rate has slowed down lately. It however reported that it was difficult to say whether rents have bottomed out, but operators pinned high hopes on the New Year as macro-economic signals have shown signs of improvement.

Marc Townsend, managing director of CBRE Vietnam, predicted that supermarkets and food stores would not be much impacted by the economic cycle spiraling downward, so such facilities would continue to fare better in the coming time.

Data from the General Statistics Office (GSO), however, point out that retail fared poorly last year. The total retail revenue of services and commodities in 2013 was some VND2,618 trillion, or some US$125 billion, a year-on-year rise of 12.6%. This was the lowest rise since 2009, and if inflation was deducted, the growth was a mere 5.6% compared to 6.5% in 2012.

The breakdown supplied by GSO shows that merchandise retail revenue totaled VND2,009 trillion, accounting for 76.7% and rising 12.2% on year, while hotel-restaurant service revenue made up VND315.8 trillion, accounting for 12.1% and rising 15.2% on year, while other service revenues totaled VND268.6 trillion.

GSO remarked that retail sales have slowed down since 2011 at all channels, traditional as well as modern shopping ones.

Tra fish industry looks more sustainable this year: Vasep

Tra fish farming and processing in Vietnam this year will be more sustainable as cash-strapped farmers and enterprises have left the playground to more capable ones, said a senior leader of the Vietnam Association of Seafood Exporters and Producers (Vasep).

Duong Ngoc Minh, vice chair of the association, told the Daily that the local tra fish industry has undergone overheated expansion since several years ago, and 2013 was seen as a climax with numerous farmers and processors being pushed to the verge of bankruptcy.

The glut of local supply last year dragged down fish prices, resulting in huge losses for bother farmers and processors. Many therefore have now shied themselves away from the business, said Minh, who is also board chairman of the big tra fish processor Hung Vuong Joint-stock Company.

“The market is now the playground for those enterprises that are really capable, with ample capital, good outlets and good farming practices. They will be the main players to help the tra fish business to develop in a sustainable manner,” he told the Daily in an interview.

Last year, Vietnam earned US$1.7 billion from tra fish exports, a slight fall of 3% from 2012. Minh predicted output this year would fall by some 10% year on year, but the export revenue would rise by 5% owing to better prices.

The global demand will likely stay stable, and potential markets for Vietnam’s tra fish will be China and Japan, according to Minh.

Vasep in a report estimates total seafood exports to China and Hong Kong this year will rise 55% to around US$650 million.

Tra fish exports to the U.S. remain unclear this year, as all eyes are on the outcome of the ninth administrative review by the U.S. Department of Commerce to see whether a high tariff will be slapped on Vietnam’s Tra fish products. The results will be announced in March, Minh said.

Commenting on the tra fish business last year, Minh of Vasep said many suffered setbacks, including farmers, cash-strapped processors and traders, and especially suppliers of feed and young fish.

“Many people think that farmers and processors bore the brunt of losses last year, but in fact, it is those young fish and feed manufacturers who incurred the most losses,” Minh said.

Between 2011 and 2012, those supplying young fish were the poorest among partakers in the production chain, Minh said. Last August, for example, a kilo of commercial-size tra fish sold for VND24,000, but a kilo of young fish was priced at only VND15,000, he said.

Developers of retail commercial space in HCMC has undergone a dreary year with operators of trade centers desperately awaiting space lessees, according to a survey conducted by the realty market researcher CBRE Vietnam.

The total area of retail space that found vendors last year was only 26,700 square meters, equivalent to just one-third of that in the previous year when 79,500 square meters was leased out to retailers. Last year saw few successful transactions, and the vacancy rate at trade centers remained high at 12% of the total available space of 625,000 square meters.

Classy trace centers faced tougher competition from street-front houses that were put up for lease to retailers, who took flight from such centers and sought cheaper space outside. The offered monthly rate at retail space at trade centers averaged some US$50 a square meter, while the rate at street-front houses at prime sites was only some US$20, according to the market researcher.

Despite the dreary picture, the market of retail space got more bustling at the end of last year, with several projects put into operation. These included the Parkson Cantavil Premier in HCMC’s District 2 and the Aeon shopping mall in Tan Phu District.

In addition, many well-known retailers, such as McDonald’s, Dunkin’ Donuts, Super Sport and Dairy Queen, are also looking for good site to set up shop.

CBRE Vietnam noted that retail space rents have been sliding since 2009, although the decline rate has slowed down lately. It however reported that it was difficult to say whether rents have bottomed out, but operators pinned high hopes on the New Year as macro-economic signals have shown signs of improvement.

Marc Townsend, managing director of CBRE Vietnam, predicted that supermarkets and food stores would not be much impacted by the economic cycle spiraling downward, so such facilities would continue to fare better in the coming time.

Data from the General Statistics Office (GSO), however, point out that retail fared poorly last year. The total retail revenue of services and commodities in 2013 was some VND2,618 trillion, or some US$125 billion, a year-on-year rise of 12.6%. This was the lowest rise since 2009, and if inflation was deducted, the growth was a mere 5.6% compared to 6.5% in 2012.

The breakdown supplied by GSO shows that merchandise retail revenue totaled VND2,009 trillion, accounting for 76.7% and rising 12.2% on year, while hotel-restaurant service revenue made up VND315.8 trillion, accounting for 12.1% and rising 15.2% on year, while other service revenues totaled VND268.6 trillion.

GSO remarked that retail sales have slowed down since 2011 at all channels, traditional as well as modern shopping ones.

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