Fuel, material prices on upward trend

Fuel, power and material prices have been on upward trend this month because of goods management policies, according to the Domestic Market Management Agency.

In addition, drought and salt intrusion has increased production costs of some farm produce, which might affect goods prices in the upcoming time.

The agency has proposed the Ministry of Agriculture and Rural Development to keep a close eye on the drought and salt intrusion in the southern region, estimate their influences to agricultural output and supply and have suitable management measures.

It also proposed to extend the deadline to replace gasoline Ron 92 with ethanol gasoline E5 to stabilize the market.

The total retailed revenue of goods and services reached VND859,560 billion (US$38.56 billion) in the first quarter this year, up 9.07 percent over the same period last year.

Acecook & Fujitsu to build Logistic information system in VN

The Acecook Vietnam (ACV) and Fujitsu Co.Ltd have cooperated to build Logistic information system, aiming to improve the quality of the goods distribution system in Vietnam.

Under the project, ACV has set its target to tranfer goods through system quickly and effectively to keep them fresh; ensure food safety to consumers.

It is expected this system will help Japanese enterprises in Vietnam integrate with high-end distribution system in Vietnam.

The project is scheduled to be put into trial operation from June 2016 by Fujitsu Vietnam Co.Ltd under Fujitsu and it will be put into service from March 2017.

Electronic, refrigeration retail market expected to magnetize investment

Many foreign investors said that electronics and refrigeration retail market in Vietnam has not been exploited yet and the country’s consumption of electronic and refrigeration appliances will rise from 7.3 percent to 11.9 percent by 2020.

Market research results from GFK Retail and Technology Market Research Vietnam Limited show that improvement in average earnings has greatly affected household final consumption expenditure, especially household electric and electronic appliances. Particularly, Vietnam’s GDP per capita topped US$2,109 last year. In addition, unemployment rate has dropped to 2.31 percent and consumer price index was at 0.63 percent while economic growth is estimated at 6.68 percent this year. Accordingly, household final consumption expenditure will increase to around $3,737 per household per annum.

Expenditure on electronic and refrigeration appliances alone is estimated at around VND157 trillion, of which, electronic products accounts for VND60 trillion, led by mobile phone, notebook, and tablet. Meanwhile household refrigeration products accounts for VND97 trillion with flat-screen television dominating and the rest is distributed to air conditioner, fridge, and washing machine products.

Consumption of electronic and refrigeration products is expected to surge from 7.3 percent in 2016 to 11.9 percent in 2020. Mr. Dang Tran Hai Dang, deputy director of VietinbankSc Research Center, explained that Vietnam has become official member of free trade agreements, including EU - Vietnam, Vietnam – South Korea, Trans Pacific Partnership, and recently ASEAN Economic Community. High-quality electronic and refrigeration products from Japan, South Korea, and Thailand are flowing into Vietnam with competitive prices. This will boost domestic consumption in the future.

Although domestic demand for electronic and refrigeration products increases rapidly, retail distribution network is merely in hands of a few enterprises and at big cities. Market survey by VietinbankSc says that as for genuine mobile phone market, The Gioi Di Dong accounts for 30 percent of market share, FPT 10 percent, provincial stores and electronics supermarkets 20 percent, and small mobile phone stores 40 percent. As for electronics market, there are fewer distributors but in larger scale, including Home Center, Nguyen Kim, Dien May Xanh, Dien May Cho Lon, Pico, and Tran Anh.

Generally, modern retail chains in Vietnam currently hold a market share of 25 percent and are expected to reach 45 percent by 2020, compared to that of 33-60 percent of other countries in the region. This sector is expected to strongly attract foreign investment capital.

According to Mr. Huynh Phuoc Cuong, retail director of GFK, foreign investors opt for buying well-known and prestigious distribution networks and stores instead of building a new risky distribution network. At present, legal factors allow them to carry out this objective easily.

Power Buy Company Limited, an arm of Thailand’s Central Group, acquired 49 percent stake of Nguyen Kim Trading Joint Stock Company, one of the biggest home appliances store chains in Vietnam. Moreover, Central Group also bought 49 percent stake of Pico. Japanese corporations owned 49 percent stake, 91 percent stake, and 30 percent stake of Citimart, Tran Anh, and Fivimart respectively. A few shopping centers have been bought by investors from South Korean and Hong Kong.

The market is changing rapidly. It raised concern that whether Vietnamese businesses are able to withstand the intrusion of experienced and rich competitors from other countries. Industry and Trade deputy minister Tran Quoc Khanh said that there will still be a stand for small businesses as long as they take action and learn to adapt the situation.

Electronic, refrigeration retail market expected to magnetize investment

Many foreign investors said that electronics and refrigeration retail market in Vietnam has not been exploited yet and the country’s consumption of electronic and refrigeration appliances will rise from 7.3 percent to 11.9 percent by 2020.

Market research results from GFK Retail and Technology Market Research Vietnam Limited show that improvement in average earnings has greatly affected household final consumption expenditure, especially household electric and electronic appliances. Particularly, Vietnam’s GDP per capita topped US$2,109 last year. In addition, unemployment rate has dropped to 2.31 percent and consumer price index was at 0.63 percent while economic growth is estimated at 6.68 percent this year. Accordingly, household final consumption expenditure will increase to around $3,737 per household per annum.

Expenditure on electronic and refrigeration appliances alone is estimated at around VND157 trillion, of which, electronic products accounts for VND60 trillion, led by mobile phone, notebook, and tablet. Meanwhile household refrigeration products accounts for VND97 trillion with flat-screen television dominating and the rest is distributed to air conditioner, fridge, and washing machine products.

Consumption of electronic and refrigeration products is expected to surge from 7.3 percent in 2016 to 11.9 percent in 2020. Mr. Dang Tran Hai Dang, deputy director of VietinbankSc Research Center, explained that Vietnam has become official member of free trade agreements, including EU - Vietnam, Vietnam – South Korea, Trans Pacific Partnership, and recently ASEAN Economic Community. High-quality electronic and refrigeration products from Japan, South Korea, and Thailand are flowing into Vietnam with competitive prices. This will boost domestic consumption in the future.

Although domestic demand for electronic and refrigeration products increases rapidly, retail distribution network is merely in hands of a few enterprises and at big cities. Market survey by VietinbankSc says that as for genuine mobile phone market, The Gioi Di Dong accounts for 30 percent of market share, FPT 10 percent, provincial stores and electronics supermarkets 20 percent, and small mobile phone stores 40 percent. As for electronics market, there are fewer distributors but in larger scale, including Home Center, Nguyen Kim, Dien May Xanh, Dien May Cho Lon, Pico, and Tran Anh.

Generally, modern retail chains in Vietnam currently hold a market share of 25 percent and are expected to reach 45 percent by 2020, compared to that of 33-60 percent of other countries in the region. This sector is expected to strongly attract foreign investment capital.

According to Mr. Huynh Phuoc Cuong, retail director of GFK, foreign investors opt for buying well-known and prestigious distribution networks and stores instead of building a new risky distribution network. At present, legal factors allow them to carry out this objective easily.

Power Buy Company Limited, an arm of Thailand’s Central Group, acquired 49 percent stake of Nguyen Kim Trading Joint Stock Company, one of the biggest home appliances store chains in Vietnam. Moreover, Central Group also bought 49 percent stake of Pico. Japanese corporations owned 49 percent stake, 91 percent stake, and 30 percent stake of Citimart, Tran Anh, and Fivimart respectively. A few shopping centers have been bought by investors from South Korean and Hong Kong.

The market is changing rapidly. It raised concern that whether Vietnamese businesses are able to withstand the intrusion of experienced and rich competitors from other countries. Industry and Trade deputy minister Tran Quoc Khanh said that there will still be a stand for small businesses as long as they take action and learn to adapt the situation.

Krong No 3 hydropower plant inaugurated in Lam Dong

The Trung Nam Hydroelectric Corp on April 2 inaugurated the Krong No 3 hydropower plant in Da Tong commune, Dam Rong district, Lam Dong province.

Located on a branch of the Dak Rrong No River, the plant has a total investment of VND 685 billion (US$ 30.7 million) with a capacity of 18 MW.

It is designed to provide 63.51 million kWh of energy a year, contributing to ensuring the power supply to Lam Dong and Dak Lak province.

The new facility is part of the Krong No hydropower project and includes two hydropower plants: Krong No 2 and Krong No 3. The Krong No 2 plant is scheduled to be put into operation this year.

The Krong No hydropower project has a combined capacity of 48 MW, with a total investment of VND1,850 billion (US$ 83 million). When fully operational, it is expected to provide 176 million kWh of energy a year.

Also in Da Tong commune, the Trung Nam Krong No Corp held a ground-breaking ceremony for the Dak Kgui hydropower the same day.

With a total investment of VND 119 billion (US$ 5.3 million), the plant will supply a total of 14.28 million kWh once completed after 15 months of construction.

Top 50 best green brands for 2015 honoured

A ceremony was held in Hanoi on April 1 to present Green Brand Award to 50 enterprises around the country that reached green growth in 2015.

The honourees are prestigious enterprises that have significantly contributed to socio-economic development, in association with environmental protection.

The Green Brand Award was launched to respond to the national strategy on green growth, as well as communication of the national strategy on climate change.

At the ceremony, Deputy Minister of Natural Resources and Environment Nguyen Linh Ngoc said that green growth towards a green economy is a new path for development, seeking to minimise impacts of climate change.

He also emphasised that Vietnam has promoted the green economy through various specific programmes, affirming the Government’s determination in reaching the goals of restructuring the economy towards sustainable development and mitigating the effects of climate change.

Under the national strategy on socio-economic development for the 2011-2020 period, newly-established enterprises must apply clean and environmentally friendly technologies as well as equipment reducing pollution and treating waste by 2020.

The environment was identified as one of three pillars of the development in addition to economy and society, noted Deputy Minister Ngoc. Vietnam’s green growth strategy in the 2011-2020 period, with a vision to 2050, focuses on three main goals including reducing greenhouse gas emissions, and greening of production and consumption.

The Green Brand Award is expected to encourage and call on Vietnamese brands to implement green growth strategies in order to create a green economy for the country.

HCM City supports SMEs joining export market

A conference on promoting linkage among the business community in the Trans Pacific Partnership (TPP) zone was held in the southern city of Ho Chi Minh on April 1.

Participating experts at the event stressed that besides tariff exemption, enterprises should focus on market penetration opportunities, particularly SMEs.

According to economic expert Minh Pham from the Managing Board of Nocndeal e-commerce transaction website, many Vietnamese enterprises are incapable of expanding into new markets due to a lack of understanding of other countries’ laws and administrative procedures.

However, once the TPP agreement becomes effective, it will create more favourable conditions for enterprises to enter such markets as the trade deal will have specific supporting regulations for small and medium firms, he added.

Deputy Chairman of the city’s Business Association Pham Ngoc Hung said enterprises should increase quality management capacity and ensure goods standards as well as stable supply.

According to Hung, the TPP not only deals with trade and investment but also affects policies and laws. Member governments have to develop and adjust suitable political mechanisms in order to attract more investment, utilise their competitive advantages and protect their domestic markets through technical barriers.

He said the association will assist local businesses in making use of TPP and other free trade agreements by introduce their quality products to e-commerce transaction sites, both domestically and internationally, so that they can reach potential customers while cutting down on market survey costs.

JICA lends over 95 billion JPY for projects in Vietnam

The Japan International Cooperation Agency (JICA) has signed official development assistance (ODA) loan agreements with the Vietnamese Government to provide 95.167 billion JPY (over 846 million USD) for implementing several projects in Vietnam.

The ODA loans aim to help the Southeast Asian country build essential infrastructure to improve its economic competitiveness, environment and overcome vulnerabilities.

The third phase of the Da Nang – Quang Ngai section of the North-South expressway construction project is intended to address the rapid increase of transportation volumes in Da Nang city – a centre of manufacturing and goods distribution in the central part of Vietnam.

The Lach Huyen port infrastructure project will feature an international deep-water mega-port and related facilities in the northern port city of Hai Phong, making it possible to meet the rising volume of cargo and to accommodate the larger size of vessels used in maritime transportation, as well as promote economic development and international competitiveness of the northern region, and Vietnam overall.

Meanwhile, the sixth phase of the support programme to respond to climate change means to help the Vietnamese Government implement relevant policies through financial assistance and policy dialogue. It is expected to enhance the national capacity to cope with the negative impacts on climate change and mitigate greenhouse gas emissions, contributing to local sustainable economic development.

Vietnam among RoK export spotlights in March

Vietnam continues to be the Republic of Korea (RoK)’s export market with the highest growth rate, according to a report released by the RoK Ministry of Trade, Industry and Energy (MOTIE) on April 1.

In March, exports from the RoK to Vietnam enjoyed an increase of 13.5 percent compared to the same period last year. The figure was followed by the European Union with 12.7 percent, and India with 11.7 percent.

The report showed that the RoK’s overall export turnover reached 42.9 billion USD last month, a drop of 8.2 percent from a year earlier. It was the 15th consecutive month the RoK’s exports fell.

Exports to China, the world's single-largest market for RoK products, dwindled for nine consecutive months, plunging 12.2 percent on-year in March; but the rate of decline is slowing, from a 21.5 percent cut in January to a 12.9 percent drop in the following month, it said.

Vietnam and the RoK signed a free trade agreement in May last year, under which Vietnam will remove its import duties on 89.9 percent of all products from the RoK over a 15-year period, following its implementation.

The RoK will do the same on 95.4 percent, or 11,668 out of the total 12,232 products imported from Vietnam.

Trade between the two countries exceeded 26 billion USD in 2014, the highest value since the two established diplomatic ties in 1992.

Number of tourists to Can Tho soars in Q1

The Mekong Delta city of Can Tho welcomed 418,827 tourists in the first three months of this year, up 22 percent against the same period last year and equivalent to 29 percent of its goal for the year.

In the period, 65,110 foreigners visited – an increase of 6 percent.

Revenue from the tourism sector reached 441 billion VND (19.1 million USD), up 24 percent and accounting for 31.5 percent of the yearly plan.

The sharp rise in the number of tourists to Can Tho was due to the fact that the city had invested in transport infrastructure and a number of new cultural facilities, including Ninh Kieu Pedestrian Bridge and light decorations on Hoa Binh avenue .

In addition, the city has numerous interesting tourism sites, such as Southern Truc Lam Monastery, Cai Rang floating market, Bang Lang stork garden and Binh Thuy ancient house.

The city will host the fifth Southern Traditional Cake Festival in the mid-April this year and the Vietnam-France cooperation conference in September.

The events are expected to contribute to popularising local landscape and people, attracting more tourists to the city.

TV programme says no to unsafe food

The VTV24 News Centre of the Vietnam Television launched the programme “Say no to dirty food” on April 1, a move to join efforts being made to eradicate unsafe food – a pressing issue in the country in recent years.

The programme will reveal unsafe food and violating producers, while receiving information from the public via its hotline and social network page.

It will also provide the results of testing of popular foods and others suggested by viewers, and give a guide on how to differentiate between safe and unsafe food.

Deputy Minister of Industry and Trade Tran Tuan Anh said preventing unsafe food is the mission of not only a TV programme but the entire society. It’s high time more drastic action was taken to fight such corruption, which is threatening the health of Vietnamese people.

Authorities from central to grassroots levels must unanimously “say no to dirty food”, he added.

The programme will broadcast live at 7:25 a.m and 8:40 p.m from Monday to Friday on VTV1 channel. It is also repeated on VTV8 and VTV9, according to the VTV24 News Centre.

Suppliers increase gas price

Gas suppliers in HCM City and other southern regions increased the retail price of a 12kg cooking gas canister by VND9,500 (US$0.42) or VND 791.67 per kg on April 1.

A 12kg gas canister is sold from about VND268,000 to VND270,000.

The HCM City One Member Limited Liability Oil and Gas Company (Saigon Petro) said the gas price was hiked after the world gas price rose by $30 to touch $335 per tonne in April 1.

This is the second times gas price increased this year.

In March, the gas price was increased by VND1,500 to touch about VND258,000 per 12kg cooking gas canister.

VPD to list nearly 100m shares on UPCOM

The Ha Noi Stock Exchange on March 30 approved the Viet Nam Power Development JSC's (VPD) move to list 99.996 million shares on the Unlisted Public Company Market (UPCOM).

The company is responsible for disclosing information as prescribed.

VPD, established in 2002, operates in major fields, such as electricity production and distribution, as well as construction electricity projects.

The company has registered charter capital of VND1 trillion (US$44.79 million). However, its actual contributed charter capital is VND999.996 billion. VPD plans to increase the charter capital to more than VND1 trillion through its equity this year.

VPD earned VND440.6 billion in revenue and VND45.1 billion in after-tax profit in 2015. The company's total assets as of December 31, 2015 were worth VND2.87 trillion.

VN SOEs mobilised $170m via IPOs this year

Viet Nam is leading the pack in Southeast Asia this year when it comes to raising funds from initial public offerings (IPOs), Bloomberg reported.

According to Bloomberg, Vietnamese state-owned enterprises (SOEs) have mobilised more than US$170 million from IPOs so far this year. Thus, Viet Nam is the leading ASEAN nation in this indicator, compared with Malaysia's nearly $160 million, Thailand's nearly $40 million and Indonesia's $10 million.

Bloomberg said several Vietnamese SOEs were planning to launch IPOs, with 177 expected to do so by 2020, including Viet Nam Mobile Telecom Services Co. and Việt Nam National Shipping Lines, according to Saigon Securities Inc.

The Ha Noi Stock Exchange has been grooming companies that aren't ready for listing on its regulated over-the-counter market and was planning to speed up the process, Nguyen Anh Phong, the bourse's deputy CEO, told Bloomberg.

In an interview with Viet Nam News Agency, Tran Hoang Ngan, a member of the National Assembly's (NA) Economic Committee, said the government planned to divest $1.8 billion in a series of SOEs under lot auctions in 2016.

Hai Duong to hand over land to VSIP despite protests from residents

In the face of protests from local residents, the Hai Duong People’s Committee committed they would try the best to complete site clearance to enable VSIP Hai Duong Co., Ltd. to start construction of Cam Dien-Luong Dien industrial park (IP) in April.

Speaking at a press conference for the local authorities to announce the long-delayed investment project’s construction progress on March 31, Deputy Chairman of the Hai Duong People’s Committee Vuong Duc Sang said if some households still refused to relocate, the committee would use coercive measures.

The plan for Cam Dien-Luong Dien IP in Hai Duong was ratified by Prime Minister Nguyen Tan Dung in 2008, with the area of 205.28 hectares and the investor being Phuc Hung Ltd. In 2009 and 2010 Phuc Hung started construction of the infrastructure but was stopped by some households.

In 2014, the prime minister allowed the province to transfer the project to Vietnam Singapore Industrial Park and Township Development Joint Stock Company (VSIP JSC) from Phuc Hung Ltd. In April 2015 Phuc Hung finished the transfer to VSIP Hai Duong, a subsidiary of VSIP JSC. VSIP Hai Duong then planned to carry out the first phase of the project with the area of 150ha and the plan was ratified by the Hai Duong People’s Committee in October 2015.

Since then VSIP Hai Duong still hasn’t been able to start construction due to protests from residents.

According to Nguyen Huu Loc, deputy director of the Hai Duong Department of Natural Resources and Environment, as of now, 70 of the approximately 1,300 households have yet to receive site clearance compensation and refuse to relocate to new locations because they asked for a much higher site clearance compensation than what is outlined in Vietnamese regulations. These households often gathered in front of the work yard, obstructing the process of site clearance.

Loc said that the compensation asked by these households was unreasonably high and fell completely out of line with Vietnamese regulations.

The people’s committee has for many times held dialogues with residents but failed to persuade them to receive the offered compensation and relocate to new locations.

As of now, the Hai Duong Industrial Zones Management Authority has licensed two projects with the total capital of $152 million in Cam Dien-Luong Dien IP. These projects have yet to start. At the same time, numerous investors are completing procedures to receive investment certificates.

A flagship cooperation initiated by the governments of Vietnam and Singapore, VSIP currently has seven projects across Vietnam, in Binh Duong, Bac Ninh, Haiphong, Quang Ngai, Hai Duong, and Nghe An provinces. VSIP has attracted $7.9 billion in the total investment capital from over 583 companies and employs about 160,000 workers.

Nippon Sheet Glass to suspend production of display in Vietnam starting May

Japanese glass producer Nippon Sheet Glass (NSG) will suspend production of thin flat glass for display in Vietnam temporarily starting in May, according to a press release posted on the company’s website.

According to the release, this is an exit from loss-making businesses, “thus minimising losses, aiming to swiftly eliminate obstacles to a further recovery in [NSG]’s performance.” The timing for restarting this line will be decided, assessing the market situation, inventory levels, and other relevant factors.

The group currently operates two thin glass float lines: one in Japan and the other in Vietnam. Of these, the line in Vietnam is operated by wholly-owned subsidiary NSG Vietnam Glass Industries Limited (VGI) in the southern province of Ba Ria-Vung Tau’s My Xuan A industrial park. The company started operation of the $123 million production line in June 2014.

Alongside the thin float glass line, VGI also operates another float glass line for thin film solar products. The line will continue to operate, with no impact on production or sales.

NSG operates in architectural, automotive and technical glass. As part of the technical glass business, NSG supplies ultra thin glass for small LCD applications. Its ultra-fine flat glass products are used in touch panel, computers and mobile devices. For the fiscal year 2016, which started on April 1, 2015 and ended on March 31, 2016, NSG expects a group net loss of ¥50 billion ($445 million), far deeper than its previously projected ¥7.5 billion ($67.2 million) loss.

Last August, Samsung announced an additional $3 billion investment in its display business in Vietnam, bringing its total investment in this business to $4 billion.

COMA to sell 30% to strategic investors

The equitization management team at the Ministry of Transport has announced bidding documents for the initial public offering (IPO) of the Construction Machinery Corporation (COMA).

There will be 5.34 million shares (15.26 per cent of charter capital) sold by bidding. Another 10.5 million shares (30 per cent) will be offered to strategic shareholders and 1.3 million shares (3.74 per cent) for COMA employees, while the State will retain 17.8 million shares (51 per cent).

COMA expects to have charter capital of VND350 billion ($17.5 million) post-IPO.

The offering to strategic investors will be conducted via direct put through. COMA is permitted to have a maximum of three strategic investors and the sales price must not be lower than the minimum successful bidding price.

By 2018 the State’s holding is to fall to 40 per cent under the equitization plan approved by the Prime Minister.

Fisheries in for gloomy time

Increased competition in exports and saline intrusion in Mekong Delta among issues casting a cloud over industry.

Despite figures from the Ministry of Agriculture and Rural Development (MARD) putting Vietnam’s fisheries export value in the first quarter of this year at $1.36 billion, up 1.7 per cent year-on-year, enterprises in the sector are not at all confident about their future.

Many see that Vietnam will face numerous difficulties and challenges due to saline intrusion in farming areas and increased competitiveness in key export markets.

The Directorate of Fisheries at MARD said the ongoing saltwater encroachment in the Mekong Delta seriously impacts on aquaculture, especially freshwater prawn breeding. Around 2,000 ha of intensive shrimp farming has already been damaged.

In the first two months of the year the area for shrimp breeding in the region totaled just 386,000 ha, including 358,000 ha for giant tiger prawns and 9,700 ha for white leg prawn, equivalent to 86.6 per cent and 72.5 per cent of the area in the same period of last year.

Many fisheries enterprises said they have had to decline contracts due to a shortage of prawns.

According to the Secretary-General of the Vietnam Association of Seafood Exporters and Producers (VASEP), Mr. Truong Dinh Hoe, farmers have narrowed their cultivation area because of concerns over disease and water shortages but he also noted that increasing export prices at present will motivate them to expand cultivation once again.

Vietnamese fisheries producers and processors hope for stronger growth over the next few months as international seafood products fairs are held, offering them the chance to study market demand, seek partners, and expand markets.

Demand for prawns in the global market in 2016 is forecast to increase by between 3.5 and 5 per cent compared to 2015 and this represents an opportunity for Vietnam to bolster its exports.

Vietnam aims for $4 billion worth of shrimp exports this year, Mr. Hoe said.

50 enterprises receive Green Brand Awards 2015

An award ceremony of the 2015 Green Brand title was opened in Hanoi on April 1, aiming to honor the best Vietnamese fresh products.

The 2015 Vietnamese Green Brand awards were given to 50 outstanding companies across the country.

Speaking at the ceremony, deputy minister of Natural Resource and Environment Nguyen Linh Ngoc said: “Vietnam's green growth strategy in the period of 2011 - 2020 and towards 2050 has focused on three main targets, including reducing greenhouse gas emissions, promoting greening food production and consumption”.

New air route from Guangzhou to Da Nang & Phu Quoc to be opened soon

The Ho Chi Minh City Tourism Department has just worked with China Southern Airlines on promoting tourism and aviation cooperation projects in 2016 to 2017.

Under the cooperation, in July, 2016, the Chinese airlines will put into service two direct air routes from Guangzhou (China) to Da Nang and Phu Quoc after opening three air routes from Guangzhou to HCMC/ Hanoi/ Cam Ranh (Khanh Hoa).

Representative of the Chinese airlines suggested both sides foster cooperation in fields such as exchanging experience to bring more and more tourists to the beautiful destinations in two countries.

National’s IIP increases slightly

The Planning Division under Ministry of Trade & Industry said the national index of industrial production (IIP) in the first quarter of 2016 increased slightly 6.3 percent compared to the same period of last year.

The increase was due to the exploit of crude oil in the world reduced sharply in last month.

The sector in production of electronics, computer & optical products reported continue growing slowly.

Besdies, the power supplying for industrial and building sector rise 9.12 percent, a decrease of 17.9 percent over last year, showing difficulties in production.

However, the ministry forcastes in upcoming times, the oil price in the world will continue to fall.

Real estate startups soar

The real estate sector had nearly 600 firms newly established in the first quarter this year, up a staggering 146.3% year-on-year, according to the Business Registration Agency under the Ministry of Planning and Investment.

The agency said the rise in property startups was much stronger than in other sectors in the period.

The number of new firms in the health and social support sector came second with 115, up 113% year-on-year. The increases in new firms in science and technology and consulting services as well as education and training were 41.2% and 37.7% respectively.

However, there were only 329 enterprises set up in the arts, entertainment and recreation sector in the first three months, down 23% from the same period last year.

Registered capital of real estate startups in quarter one totaled VND45.6 trillion (US$2.04 billion), surging 406.9% from a year ago, higher than the growth rates recorded by other sectors.

The sectors with startups having high registered capital in the period included information and communication technology with VND4.54 trillion (US$203.7 million), up 253.1% year-on-year. The respective figures were VND4.38 trillion (US$196.5 million) and 168.5% for the financial, banking and insurance sector; VND12.96 trillion (US$581.5 million) and 151.4% for production and distribution of electricity, water and gas; VND6.76 trillion (US$303.3 million) and 136.4% for agro-aqua-forestry; and VND1.44 trillion (US$64.6 million) and 133% for the healthcare sector and social support.

A number of sectors saw lower registered capital at new businesses in the January-March than the same period last year. The average registered capital of new enterprises in the mining sector was VND1.41 trillion (US$63.3 million) each, down 37.4%, and the construction sector VND25.77 trillion (US$1.15 billion), falling 21.3% year-on-year.

In all, 23,767 enterprises were established in the first three months of this year with total registered capital of VND186 trillion (US$8.35 billion), up 24.8% and 67.2% over the same period last year respectively.

The average registered capital of new firms reached VND7.8 billion (US$350,000) each, up 34% year-on-year.

Startups planned to recruit a total of 322,200 employees, up 21.5% over the same period last year. The sectors attractive to laborers included processing and manufacturing with more than 169,600 workers; wholesale, retail and repair of automobiles and motorcycles with over 52,280; construction with 26,345; and transport and storage with 16,548.

Mekong Delta sees economic growth cooling

The economy of the Mekong Delta has lost its robust growth momentum in recent years due to its heavy reliance on agriculture, heard a meeting of the Vietnam Chamber of Commerce and Industry (VCCI) in Can Tho City on March 30.

Data released at the meeting showed the delta’s economy grew 7.8% last year, down from 8.9% in 2014, marking the fourth consecutive year the region had experienced an economic slowdown.

The region’s annual economic growth stood at 10% in the 2001-2010 period but fell to 8.8% in the 2011-2014 period, according to statistics provided at the meeting on impacts of the ASEAN Economic Community (AEC) and the Trans-Pacific Partnership (TPP) on the economy and enterprises in the delta.

While the Mekong Delta saw its economic growth slowing, Vietnam recorded higher year-on-year economic growth with 5.3% in 2012, 5.4% in 2013, 6% in 2014 and 6.68% in 2015.

Vo Hung Dung, director of VCCI in Can Tho City, told the Daily on the sidelines of the meeting that this development gap resulted from the region’s heavy dependence on agriculture.

“The agriculture sector now has little chance of improving after the difficult years,” Dung said.

The agriculture sector in the Mekong Delta mainly relies on fish, shrimp, paddy and fruit farming. After a period of strong growth backed by the expansion of farming acreage and output, farmers and enterprises in the region have run out of resources for further investment.

The service sector in the Mekong delta is still weak and the processing sector also depends on agriculture, Dung added.

In the past, there were suggestions for economic restructuring in the region. Between 2000 and 2005, the region was asked to focus on industrial development and huge investment poured into industrial parks, but the results were not as good as hoped.

Since industrial parks did not perform as well as expected and the country’s economy was in distress in 2009-2010, the delta picked agriculture as a main driver for economic growth, Dung recalled.

However, the region cannot rely heavily on agriculture, he said. In order to gradually restructure its economy towards services and industry, the Mekong Delta needs drastic change, particularly in infrastructure development.

The region has to improve traffic infrastructure, water and power supply, ports, and logistic services to build better links with other parts of the country.

“The Mekong Delta should invest more in infrastructure to lure investors and cut the labor force in agriculture,” Dung suggested.

Saigon Tex 2016 draws many Chinese firms

China has 750 companies taking part in the Vietnam International Textile and Garment Industry Exhibition 2016 (Saigon Tex 2016) in HCMC, according to organizers.

The four-day exhibition is taking place at the Saigon Exhibition and Convention Center (SECC) in District 7 until April 2, and organized by the Vietnam Textile and Apparel Association (VITAS), VCCI Exhibition Organization Services Co, and Hong Kong CP Exhibition Co. (Exhibition Hong Kong).

Andrew Kay, general director of the Exhibition Hong Kong, said around 1,066 companies from 25 countries and territories are showcasing their products at Saigon Tex 2016, up from 655 firms at last year’s exhibition. Notably, the event has the highest-ever number of Chinese firms.

Kay told the Daily that most of the Chinese firms are fabric producers and that they come in droves to sound out opportunities to set up shop in Vietnam to capitalize on opportunities from the Trans-Pacific Partnership (TPP) agreement.

Pham Minh Huong, managing director of the Vietnam National Textile and Garment Group (Vinatex), said domestic apparel enterprises import more than 70% of material, with a majority of it from China.

Under the Vietnam-EU free trade agreement (FTA) and the TPP, Vietnam’s textile and garment products made of material imported from China will not enjoy tax incentives. Therefore, it is likely that Chinese firms are joining the exhibition to gauge the Vietnamese market.

Vinatex and other domestic firms have invested more in the production of yarn and fabrics over the past years but their capacities cannot meet increasing demand of the textile and garment industry.

Finances, labor, and worker training are the main concerns of domestic enterprises. Huong said local firms need huge funding to invest in technologies.

According to the General Department of Customs, Vietnam spent more than US$10.1 billion importing fabrics last year, rising by 8% over the previous year. Imports from China accounted for US$5.22 billion of the total.

Expert: Green goods still strange to consumers

A majority of consumers in HCMC have not had a habit of buying green products as they are not fully aware of the benefits of such products, Dr. Le Van Khoa from the HCMC University of Technology said at a seminar in the city on Wednesday.

Income, education, and age can decide consumer behaviors. Consumers having high education and incomes, and living in urban areas are aware of green products, Khoa said at the seminar organized for experts to discuss sustainable production and consumption towards green growth.

Khoa said the results can be found in his recent survey on sustainable consumption in HCMC towards 2025. The survey was conducted with 60 enterprises and 1,400 consumers in the city, including 400 consumers in urban areas, 200 in suburban areas, and 800 at supermarkets and shopping malls.

The survey found that single young people with high education are willing to pay more for green products to protect their health and the environment though their prices are higher than other items.

Green products are made from environmentally-friendly materials, healthy, and have little impact on the environment when they are consumed, heard the seminar organized by the HCMC Department of Natural Resources and Environment.

SCIC manages State stake in construction firm Thang Long

The Ministry of Transport has handed over its management of 10.5 million shares worth VND105 billion (US$4.7 million) at Thang Long Construction Corporation to State Capital Investment Corporation (SCIC).

SCIC now holds 35% of chartered capital of Thang Long, which is active in the fields of transport infrastructure development and investment, equipment supply, steel structure production and installation.

According to an equalization plan approved by the Government for Thang Long, the enterprise’s chartered capital stood at VND300 billion (US$13.5 million) with the State holding 35%. However, the corporation adjusted up its chartered capital to VND419 billion (US$19 million) after a recent share auction.

The auction of 12.3 million shares drew many investors with the average winning price of VND21,600 a share, 2.16 times higher than the starting price. The corporation raised VND258.5 billion (US$11.6 million) from the auction.

Speaking at the handover ceremony on March 28, Deputy Minister of Transport Nguyen Hong Truong told Thang Long to continue selling the remaining State shares to have more funds to participate in projects financed by official development assistance (ODA) loans.

The enterprise will have to increase its chartered capital so as to meet conditions for the investor of big-ticket transport infrastructure projects.

HCM City to establish startup investment fund

The HCMC Startup Investment Fund (HSIF) will be established in May with initial capital of VND30 billion (US$1.3 million) and have the capital revised up to VND100 billion (US$4.5 million) by 2020.

Tat Thanh Cang, deputy secretary of HCMC’s Party Committee, unveiled the fund at the launch ceremony of a startup program for youths here in the city last week.

Cang said HCMC will strive to become a leading start-up center.

HCMC Finance and Investment Company is asked to help mobilize funds from investors, enterprises and individuals for the establishment of HSIF. Saigon-Hanoi Bank has pledged to contribute VND3 billion (US$135,000) to the fund.

Cang said HCMC now has the Business Startup Support Center, which has provided more than VND60 billion for over 700 startup projects of youths in the city. The center also operates the Youth Business Incubator and implements a project to train 10,000 young people in the startup field.

Also last week, the Business Startup Support Center and the HCMC Young Business Association launched the fourth contest for startup ideas themed Startup Wheel.

This year’s contest is expected to attract 600 startup projects and the deadline for entry submission is April 15. The organizers said 10 best entries would be picked for the final round scheduled to take place in August and prizes would total VND1 billion (US$45,000)

Truong Ly Hoang Phi, director of BSSC and head of the organizing board for the contest, said when joining the contest, young people will be equipped with skills such as drawing up business and product promotion plans as well as assisted to learn lessons from business people and find funds to move on with their startup projects.

KIDO pays VND600 billion tax for stake transfer

KIDO Corporation has paid VND600 billion (US$27 million) in tax for its brand and stake transfer to a foreign partner.

Le Thi Thu Huong, deputy head of the HCMC Tax Department, told the Daily that KIDO completed the tax payment early this year and that the amount was added to the firm’s corporate income tax payment of 22% last year.

Kinh Do Corporation changed its name into KIDO Corporation last year after selling 80% of its snack business to Mondelez International for around US$370 million.

In July last year, Mondelez  and KIDO announced to complete the acquisition and introduced Mondelez Kinh Do with a combined portfolio of snack brands, including Kinh Do mooncakes and biscuits, Cosy biscuits, Solite soft cakes, AFC crackers, Oreo cookies, Ritz crackers and Cadbury chocolate.

Earlier, Kinh Do Binh Duong Joint Stock Company was renamed as Vietnam Mondelez Kinh Do Joint Stock Co., shortly known as Mondelez Kinh Do, but other details about the company like address, phone number, bank account number, and tax code remained unchanged.

The department said the tax payment by KIDO had helped increase the city’s domestic tax revenue to nearly VND37 trillion (US$1.7 billion), excluding crude oil, as of March 15.  

The department expects to collect much from major mergers and acquisitions (M&A), including French retailer Casino’s forthcoming sale of Big C Vietnam operations, if deals are completed.

The tax authority got more than VND1.9 trillion (US$85.4 million) from Metro Group’s successful sale of its wholesale firm Metro Cash & Carry Vietnam to Thailand’s TCC Holding.

The department said more enterprises are voluntary to fulfill tax obligations after M&A deals.

People central to smart city development

Binh Duong Province should consider human resources as a vital part of a major project to develop a smart city besides the application of smart technologies, experts said at the Smart City Summit Binh Duong on Monday.

The summit in Binh Duong New City was jointly organized by the government of Binh Duong and the embassy of the Netherlands in Vietnam to introduce lessons from the city of Eindhoven for developing a smart city model and create a forum for local and international scientists to share experiences in smart city development.

Tran Thanh Liem, chairman of Binh Duong Province, said the province is facing challenges as strong population growth has impacted on public security, traffic safety, the environment, healthcare, education, housing and employment.

Tran Van Nam, secretary of Binh Duong Province’s Party Committee, said a smart technology system is one of the coping solutions for social and environmental issues in cities.

Dutch partners and speakers at the summit said smart cities utilize technology and advanced equipment to improve the quality of life of people and improve the way the public and State agencies interact.

Smart solutions will help Binh Duong reduce costs and resource consumption, effectively manage energy, reduce pollution and traffic congestion, enhance security, improve service quality and create opportunities for investors.

Peter Portheine, director of Brainport Development, said the use of new technology is an important element of a smart city. However, Binh Duong needs to focus on human resources to develop a smart city as people are central to any smart city.

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