Thirteen car brands on show at VMS

Thirteen car manufacturers with the latest models and technologies of various categories, from private cars to commercial vehicles, will be showcased at the Vietnam Motor Show (VMS) 2016.

The annual exhibition, whose theme is "Accelerate to Celebrate,” is expected to welcome 150,000 visitors to the Culture Palace on 91 Tran Hung Dao Street, Hanoi between October 5 and 9.

Spread over a total display area of 15,000sq.m., visitors will have the opportunity to not only enjoy the experience, but also purchase high quality products at reasonable prices.
The well-known car brands include Chevrolet, Ford, Fuso and Honda, as well as Hyundai, Isuzu, Kamaz and Kia, along with Lexus, Mazda, Mitsubishi, Peugeot and Toyota, which will display the latest market trends, from the sporty to elegant.

They will also showcase their impressive practical knowledge of modern automobile technologies, such as auto driving, fuel efficiency, environmental friendly system and in-car multi-entertainment integrated system.

VMS 2016 will also introduce an overwhelming number of small-size and medium-size cars, which most consumers will be able to afford.

 “In this 12th show, we are focusing on medium-class models to satisfy the increasing demands of the Vietnamese in this range. Our expectation is to enable consumers to live a more convenient and comfortable life through all the brilliant, yet affordable options”, a representative from Vietnam Automobile Manufacturers’ Association (VAMA), said.

Besides this, a wide range of models will be introduced, such as SUV, sedan, family, and commercial, as well as luxury or specialised cars and pickup trucks. Fuso, Hyundai and Kazma are expected to bring more choices to trading partners in the transportation business using truck lines and specialised vehicles.

At VMS 2016, visitors will also find several car accessories, auto spare parts, insurance companies and banks in the large display area.

VAMA, the exhibition’s organiser, said promotions and interactive activities are being held during the event. All visitors can avail GrabCar’s services with two rides back and forth to the event.
The Vietnamese automobile industry sold 28,004 units in July, marking a 16 per cent increase over the previous month, according to VAMA.

Among them, 17,514 units were passenger cars, up 36 per cent over June. Meanwhile, 9,334 units were commercial vehicles and 1,156 units were special-purpose vehicles, down 10 per cent and two per cent, respectively.

With this strong growth of the Vietnamese automobile market in recent months, it’s projected to achieve total sales of about 300,000 units this year, including imported ones, because the prices of many models with low engine displacement have fallen since July 1 and the demand for vehicles usually increases towards the end of the year.

VN urged to up competitiveness

Vietnam has become a big importer for goods from ASEAN countries seven months after joining in ASEAN Economic Community (AEC), Deputy Prime Minister Vuong Dinh Hue has said.

Huệ told a conference on the country’s international integration in Hanoi last week that Vietnam saw big trade deficits with Malaysia, Singapore and Thailand. The country reported a small trade surplus with Laos, Cambodia and Myanmar.

He said Thailand surpassed South Korea to become the biggest automobile exporter to Vietnam though the tax on the product has not reduced to zero under AEC’s commitments. India has also been a potential rival.

Statistics from General Statistics Office showed that in the first seven months of the year, the total import-export turnover among Vietnam and ASEAN countries was US$22.8 billion, posting 8.3 per cent year-on-year decrease. Of this, Vietnam’s exports to the countries reduced 12.3 per cent to $9.6 billion while its imports was 13.2 billion, making a trade deficit of $3.6 billion.

Huệ wondered whether the risk could be prolonged or not. He also asked the government to conduct studies and analyses on the risks for solutions to resolve the situation.

Deputy Minister of Industry and Trade Tran Quoc Khanh said ASEAN or ASEAN+ markets have not brought clear benefits to Vietnam as most of the partners have similar and competitive economic structures in their countries.

In addition, local businesses have not been known to exploit opportunities from signed trade agreements. Several Vietnamese firms have not themselves sought partners. They have also not paid attention to tax reduction and removal as they still depended on middlemen, Khanh said.

He suggested that the government should encourage and facilitate businesses such as Vinamilk, TH True Milk, Minh Phu and Vinh Hoan, which have good investments in foreign markets.

He added that Vietnam should choose markets which have a supplemental economic structure.

In reality, some markets such as Japan and South Korea which have a supplemental economic structure, have helped Vietnam’s narrow trade gap with the countries.

Nguyen The Phuong, Deputy Minister of Planning and Investment shared the ideas, adding that the government should have solutions to improve competitiveness in each product and sector to help Vietnam have enough capacity in international integration.

“We could be lost in the ASEAN market if we do not enhance our competitiveness,” Phuong said.

Vietnam has to date established trade ties with over 200 countries and territories. More than 100 countries and territories are running investment projects in Vietnam, while domestic firms are also investing in projects in more than 70 nations and territories.

"Ngoc Linh" ginseng gets geographic branding

The Geographical Indication (GI) of "Ngoc Linh" for ginseng root products was officially announced in Quang Nam and Kon Tum provinces last week.

The central province of Quang Nam had made the announcement in collaboration with the ministry of science and technology and the Intellectual Property Agency of Vietnam.

The Ngoc Linh ginseng (Panaxvietnamensis, or Vietnamese ginseng) was found on Ngoc Linh Mount at 2.598m on the border between Kon Tum and Quang Nam provinces in the late 1960s. However, Quang Nam Province had established the Tra Linh drug materials farm on the mount, with low productivity, in 1979, while Kon Tum Province had also set up a conservation centre for ginseng in 2004.

Currently, Nam Tra My District in Quang Nam and TuMoRong and Dak Glei districts in Kon Tum have been appropriated for the mass development of ginseng because of their cool natural conditions on mountains reaching 1,400m to 2,600m above sea level.

Chairman of Nam Tra My district Ho Quang Buu said the announcement of the GI for ginseng would create a smooth transition for the two provinces in developing a long-term strategy and procuring investment for larger quantities of ginseng products with better productivity as well as ensure the conservation of the herb.

“We’re a long way from building up the trademark of Vietnamese ginseng. We have called on investors to pour money into boosting production and farming in the mountainous areas of Quang Nam and Kon Tum Provinces,” Buu said.

“We expect to build a famous brand for Vietnamese ginseng in the Central and Central Highlands Provinces – a basic requirement for future socio-economic development,” he said, adding that the GI had paved the way for the sustainable development of Vietnamese ginseng.

Last year, Quang Nam Province approved a plan to build the Ngoc Linh Ginseng Centre in Nam Tra My District, which covered seven projects with a total investment of VND9 trillion (US$429 million), including the development of infrastructure and the production of drugs, essential oils, cosmetics, tonic drinks and capsules from ginseng.

As scheduled, a 200ha farm will be built to conserve 2 million ginseng plants in 15 communes of two provinces during the first stage from 2016-25, along with afforestation and tourism activities.

Nam Tra My District alone developed 27 farms, with over 800,000 natural ginseng plants and other plants used for making drugs, with an estimated production capacity of 1,000 tonnes by 2025. 

Currently, Panaxvietnamensis is sold for VND40 million (US$1,900) per kilo, but poor investment in processing technology has resulted in only locals producing pharmaceutical materials and energy drinks.

The Vietnamese ginseng was one of eight precious and endangered flora genes covered in Quang Nam Province’s conservation programme in 2014-20, including Ba Kich (poor ginseng or codonopsis), pepper, cinnamon, large rattan and white corn.

Last year, Nam Tra My District and Hamyang County in South Korea signed a Memorandum of Understanding on tourism, agriculture, conservation and the development of Ngoc Linh ginseng.

According to the Intellectual Property Agency of Vietnam, under the ministry of science and technology, few domestic companies have applied for patents, and 39 per cent of Vietnamese enterprises did not even know where and how to register for IP rights.

Several products from Vietnam have been registered under GI recognition, including Buon Ma Thuot coffee in Dak Lak Province, Phu Quoc fish sauce in Kien Giang, grape and wine products in Ninh Thuan, and Long Khanh rambutan in Dong Nai Province.

Government-backed loans to be temporarily halted

Vietnam will temporarily halt the granting of Government guarantees for loans to new projects from 2017 to ensure a safe level of public debt following Prime Minister Nguyen Xuan Phuc’s directive.

Government-backed loans will be gradually tightened from 2016.

Financing from the State budget-backed debt payment funds would be limited if firms could seek other funding sources. In addition, firms must be proactive in arranging funds to ensure repayment and negotiate with lenders to restructure loans.

The Prime Minister called for the enhanced supervision of Government-backed loans to ensure efficiency.

Government-backed loans for State-owned enterprises were estimated at around US$26 billion as of the end of 2015, more than 84 per cent of which came from foreign creditors, according to the finance ministry.

Government-backed loans accounted for 17.8 per cent of the total outstanding public debts and were equivalent to 11.1 per cent of the country’s gross domestic product.

The loans were mainly in sectors such as the power industry with the Electricity of Vietnam getting Government’s backing for $9.7 billion of loans, and the oil and gas industry with PetroVietnam getting $2.4 billion of Government-backed loans.

Ministry of Finance statistics in June showed that as of the end of 2014, total public debt reached $106 billion, including Government debt and Government-backed debt.

Regarding foreign loans, the Prime Minister recently asked the State Bank of Vietnam to closely watch loan limits for the repayment of foreign debts.

The finance ministry was asked to work with the Ministry of Planning and Investment and the Ministry of Justice on developing requirements for foreign loans to ensure the nation’s foreign loans lie within safe levels.

The Prime Minister also asked authorities to report about the capital structures of foreign direct investment (FDI) companies as a base for the evaluation of risks arising from the dependence on foreign loans of the FDI sector and measures to deal with multinational companies’ thin capitalisation.

Thin capitalisation, in which assets of firms are made up of a much greater proportion of debt than equity, can be used as a financial strategy to reduce tax obligations.

Purchasing power decreases 0.3% in August

The total national retail value of goods and services in August reached nearly VND292.8 trillion (US$13 billion), with purchasing power declining 0.3 per cent against July.

This was reported by the General Statistics Office (GSO).

GSO expert Vu Manh Ha said the decrease in purchasing power in August was unusual when compared with the previous years. Ha attributed the decrease to the busy month, when school supplies were bought for the new school year, along with the heavy rainfall and the storms, due to which locals were forced to purchase more home appliances and construction material to repair their homes.

In addition, the inclement weather also hit travel and tourism activities. The total revenue from transportation and restaurant service sales declined to between 4 and 5.4 per cent.

Ha also attributed the decrease in purchasing power to the "wandering ghost month" in Vietnam. The Vietnamese widely believe that July is the month when ghosts roam and create trouble for the people.

The decrease in August lowered the total national retail value of goods and services compared with the same period last year – an increase of 9.3 per cent compared with the increase of 10.5 per cent in August 2015.

The increase is estimated at 7.3 per cent if the price factor is excluded, lower than the 9.2 per cent growth in the first eight months of 2015.

The revenue from retail goods, which accounts for three-quarters of the total revenue, hit $78.2 billion, up 9.7 per cent.

Food and foodstuff retail increased 14 per cent, garment retail was up 11.9 per cent, home appliances increased 11.1 per cent and transportation services were up 7.5 per cent. The retail of cultural and educational products saw the lowest growth at 3.5 per cent.

The total revenue from accommodation and restaurant service sales, which account for 11.4 per cent of the total revenue of $11.72 billion, witnessed the lowest increase at 6.8 per cent.

Localities which witnessed low growth included Ha Noi (4.7 per cent), HCM City (5.3 per cent), Thai Nguyen (4.9 per cent), Thai Binh (0.4 per cent) and Hung Yen (0.5 per cent).

HCM City’s annual promotion ‘month’ set to begin

HCM City’s annual sales promotion “month” from August 30 until the end of the year is expected to boost retail sales and attract a large number of local and foreign visitors.

According to the Department of Industry and Trade, this year the event has attracted more than 2,300 businesses and 5,000 business households, 15 per cent and 25 per cent higher than last year.

There will be more than 7,000 establishments selling goods at a discount this year, besides offering freebies, compared to 6,200 last year.

They will sell among others consumer products, electronics, fashion, foodstuff, cosmetics, pharmaceuticals, telecom services, interior decoration items, tourism services, hotels and others at discounts of 5-49 per cent.

It begins with a “Promotional Month” fair at the Phu Tho Indoor Stadium in District 11 from August 30 to September 4, in which 300 businesses will take part. 

Many other fairs intended to boost consumption will be held at many places across the city.

Supermarkets and traditional markets that took part in the promotion month last year reported an increase in sales of 3-20 per cent.

Retailers, electronics stores and supermarkets have announced a slew of promotions in response to the city programme and to celebrate National Day (September 2).

Supermarket chain Big C is offering discounts of up to 49 per cent on more than 1,600 products, including fresh and processed foods, spices, cosmetics, clothes, footwear, interior decoration items, and kitchen and bathroom accessories  until September 5.

It has also set aside VND500 million (US$22,420) for a programme called “Loving Vietnam so much” to gift hats and T-shirts with the country’s red flag with yellow star to customers with Big C cards who buy for VND1 million ($44.8) or more.

Saigon Co.op has tied up with 600 suppliers and spent VND200 billion ($8.96 million) on its “Proud of Vietnamese Goods 2016” promotion programme at its Co.opmart and Co.opXtra outlets, which offers discounts on thousands of local products between August 27 to September 18.

Lotte Mart has launched promotion programmes offering discounts of 5-49 per cent on more than 1,000 items until August 6.

It has also lined up a “Meat Festival” with discounts of 10-30 per cent on various kinds of local and imported meats.

Many other supermarkets and electronics shops like Nguyen Kim, Thien Hoa, and Cho Lon are offering attractive discounts.

Hoa Sen to build giant steel plant

Hoa Sen Group will build a steel plant with a capacity of 16 million tonnes a year in the south-central province of Ninh Thuan at a cost of US$10.6 billion.

Construction will be done in five stages between 2017 and 2031.

The steel giant said the first stage would be built in 2017-18 on an area of 240ha, begin operation in 2019 and produce 1.5 million tonnes of steel a year.

Simultaneously, infrastructure will be developed for the Hoa Sen Ca Na Industrial Zone and the Hoa Sen Ca Na port will be built.

The company revealed that in the future many other facilities would be built to recycle waste from the steel plant, including a cement company.

Five companies have been set up to carry out the projects -- the Hoa Sen Ca Na Zone Infrastructure Development One-member Joint Stock Company, the Hoa Sen Ca Na – Ninh Thuan Steel-making Complex Investment One-member Joint Stock Company, the Hoa Sen Ca Na – Ninh Thuan Port One-member Joint Stock Company, and the Hoa Sen Ca Na – Ninh Thuan Cement One-member Joint Stock Company.

When completed, the complex is expected to create 45,000 jobs and boost the local economy by attracting restaurants, hotels, transport services and others.

The construction of the Hoa Sen Ca Na steel plant is highly welcome since the country faces a chronic steel deficit and demand for steel is increasing.

The company’s chairman, Le Phuoc Vu, has promised to use modern, eco-friendly technologies for the plant.

The company would invested in waste treatment systems, he said, adding that technologies would also be used to recycle waste from the complex.

HoaSen is a leading steel maker not just in Vietnam but in the Southeast Asian region. In Vietnam, it has a 40 per cent share of the sheet steel market and 20 per cent of the steel pipe market.

The 15-year-old company exports its products to 65 countries and territories.

SBV urges lending supervision

The State Bank of Vietnam has directed its supervisors and credit institutions to enhance control on lending to borrowers with large outstanding loans.

Under Document 6373/NHNN-TTGSNH, the central bank also requires credit institutions to increase supervision on credit granting that is higher than allowed limits.

According to the current legal regulations, the aggregate debt balance of one single customer cannot exceed 15 per cent of the capital of a bank and 25 per cent of the capital of a non-bank institution.

The central bank allows credit institutions to increase lending limits to some customers, but requires the institutions to ensure the credit growth quota allocated by the central bank is maintained.

This year, the entire banking system targets a credit growth of 18-20 per cent and the central bank has allocated lending limits to each institution to ensure the target is achieved.

Besides customers in prioritised industries of agriculture, exports, supporting industries, small- and medium-sized enterprises (SMEs) and hi-tech businesses, the increase of lending limits must also focus on production and business, the central bank said.

Lending to risky industries must be restricted, the central bank said.

The central bank also asked credit institutions to ensure safety ratios in lending and to take responsibility when granting lending limits higher than regulated.

Besides this, the central bank also directed banking supervisory agencies to closely supervise post-lending to increase the lending quality and avoid risks.

“Banking supervisory agencies must closely inspect, supervise and assess the use of the loans and solvency possibility of the borrowers, especially those that are either State-owned enterprises or firms with large outstanding loans, to avoid new bad debts from arising,” the central bank noted.

The agencies must disclose violation cases early, make timely warnings and ensure strict penalty for the violation, the central bank stated.

Vietnam farm raised seafood face recalls over food safety

Shortly after the EU detected excess levels of antibiotics in shipments of farmed seafood from Vietnam, the government acknowledged that some of the country’s aquaculture exports may be unfit for human consumption.

The Ministry of Agriculture and Rural Development (Mard) issued a stern warning to the aquaculture industry, that flagrant disregard of the nation’s food safety laws and regulations will not be tolerated.

Specifically, the Ministry revoked the export permits for Can Tho Export-Import Seafood JSC, Southern Fishery Industries Co. Ltd and Khang Thong JSC on the grounds exports to the EU contained excessive levels of banned substances that have been determined to be harmful to people’s health.

The Ministry rescinded the aforementioned companies permits pending a full inspection by the National Agriculture-Forestry-Fisheries Quality Assurance Department to evaluate the full extent of the food safety violations they have committed.

Presumably this investigation could lead to a full recall of domestic products sold by these companies from supermarket and retail shelves nationwide, if the farmed seafood is determined to be a serious health threat.

In the future, the Ministry announced it will revoke export permits for any companies that have shipments refused by the EU and will only reinstate those permits after a thorough investigation has been conducted.

Meanwhile a US seafood company has recently issued a recall of 25,760 pounds of frozen fish fillets from Vietnam that were distributed without first meeting food safety requirements.  

The US Department of Agriculture said California-based US Cado Holdings Inc. is recalling a batch of skinless, boneless Swai fish fillets, also known as Vietnamese catfish, that was produced and packaged earlier this year in Vietnam.

The Sea Queen-branded fish were shipped to grocer Aldi's distribution centres in Connecticut, Georgia, Maryland, Pennsylvania, and Tennessee.

USDA said the product entered the US market without first passing required residue sampling and testing. The agency said there have been no reports of adverse reactions from consuming the fish.

In a statement regarding the recall of the 25,760 pounds of frozen fish fillets from Vietnam, a member of the US Congress, Representative Rosa DeLauro (D-Conn.) urged congressmen not to pass the Trans Pacific Partnership (TPP).

Rep DeLauro said the US Congress should standing up to foreign companies that do not have any regard for the health and safety of Americans, such as those in the Vietnam aquaculture industry.

Nguyen Ngo Vi Tam, CEO of VinhHoan Joint Stock Company, one of the leading catfish exporters in Vietnam has acknowledged the tarnished reputation of Vietnam aquaculture around the globe, which he politely describes as quite negative.

General economic census to be conducted from March 2017