Indian businesses eye Vietnam market

Vietnam is an untapped market in Southeast Asia and Indian businesses are keen to penetrate and fully exploit this lucrative market, says an Indian executive.

Ajay Sahai, Director General & CEO of the Federation of Indian Export Organisations (FIEO) was speaking at an investment promotion seminar of Vietnam’s Vinh Phuc province in New Dehli on September 5.

Ajay Sahai highlighted the growing ties between India and Vietnam as an advantage for the two countries to strengthen comprehensive cooperation, especially in economics and trade.

He said that two-way trade turnover has increased dramatically in recent years, from US$2.36 billion in 2009-2010 to US$8.03 billion in 2012-2013.

India’s export turnover to Vietnam reached US$5.44 billion in the 2013-2014 fiscal year, up 37.17% compared to the same previous year.

However, with a population of more than 90 million Vietnam is still a huge potential market which is awaiting Indian exporters to break into, he said.

For his part, Pham Van Vong, Secretary of the Vinh Phuc Provincial Party Committee, introduced the locality’s development potential and incentives to attract investors.

Over the past years Vinh Phuc province has boosted economic development and paid due attention to the overall zoning plan in accordance with regional and national planning for long-term development.

Currently, the province has completed a zoning plan for 20 industrial parks till 2020 and another urban zoning plan till 2030 with a vision for 2050, which has approved by the Prime Minister.

During the past 17 consecutive years, Vinh Phuc has recorded many important socio-economic development achievements, with an annual growth rate of 16%.

As of late August 2014, the province has attracted 167 foreign direct investment (FDI) projects from 14 countries and territories with a total registered investment capitalisation of nearly US$3 billion.

Among large foreign groups and enterprises investing in Vinh Phuc include Honda, Toyota (Japan), Piaggo (Italy), De Hus (the Netherlands), Foxconn, Compal (Taiwan), Sindoh (the Republic of Korea), and Minda (India).

Vong said Vinh Phuc strives to become an industrial locality in Vietnam in 2015. To meet the target, the province is pooling all resources for development, with a focus on FDI capital, including Indian capital and technology.

Besides State incentives, Vinh Phuc introduces its own preferential policies to foreign investors, and it welcomes Indian businesses, he said.

Since 1988, Vietnam has attracted more than 80 Indian invested projects with total registered capitalisation of US$ 2.1 billion. Currently, India is the 12th foreign largest investor in Vietnam.

Canned quail eggs exported to Japan

The Nguyen Ho quail breeding farm and a fruit exporter in the Mekong Delta province of Tien Giang have joined hands to export 12 million canned quail eggs to Japan from late 2013 to date.

Currently, the Nguyen Ho Farm and Tien Giang Food Corp exports 2 million canned quail eggs a month to Japan.

 This is a result of four-year effort to meet all requirements of the strict market, said Tran Nguyen Ho, the owner of the farm.

There is a huge demand for canned quail eggs in Japan, and his farm is the only Vietnamese facility that meets the Japanese partner’s strict requirements, he added.

One of the requirements is that the yolk should be exactly in the middle of the egg rather than on the side, Ho noted.

With over 60,000 quails, the Nguyen Ho farm can produce over 100,000 eggs per day to provide for the domestic market, earning VND1.2 billion (US$57,000) per month.

Investors confident in southern business climate

Foreign entrepreneurs still regard Binh Duong province as a profitable and advantageous investment opportunity despite the disturbances in May, proven by the US$350 million in foreign direct investment (FDI) in the southern locality since then.

Huang Ping Fu, an executive for the Taiwanese-owned Kaiser Vietnam Wood Industries Limited Company located in My Phuoc 1 Industrial Park, said he highly valued the local authorities’ efforts to help businesses resume their operations.

Hang Vay Chi, General Director of the Viet Huong Industrial Park, said foreign companies located in Binh Duong appreciated the timely support offered by the province to help them overcome the consequences of the disturbances triggered by the East Sea tensions in May, thus increasing their confidence in the locality and Vietnam in general.

He added that his industrial park will receive US$120 million in FDI from two US and Hong Kong (China) investors next week.

Chairman of the Provincial People’s Committee Le Thanh Cung said investors’ confidence in the local investment environment had been maintained thanks to the province implementing effective measures at the right time.

In a meeting with the executives of 100 companies in August, he revealed that Binh Duong plans to earmark VND1 trillion (US$47.6 million) to be made available to businesses facing financial difficulties.

He informed the business leaders that the province had provided support to companies in 11 different locations, refunding taxes worth VND525 billion (US$25 million) to 203 enterprises, and waiving taxes and property rental fees worth VND155 billion (US$7.3 million) for 594 enterprises.

To date, Binh Duong has attracted more than US$1.2 billion in FDI, 20% higher than the target for 2014, with 53% of investments coming from Japan and the Republic of Korea - the largest investors in the province, Cung noted.

He reported that to facilitate smooth operations, the locality is accelerating and streamlining its administrative procedures, implementing the Government and province’s assistance measures, and ensuring security and order.

The province is also running a new campaign to promote investment in advanced technologies and its support industries, as well as in services and trade, the official said.

Exchange enhances Vietnamese, Korean trade links

As many as 20 Korean and Vietnamese small and medium enterprises (SMEs) held a trade exchange at the New World Hotel in Ho Chi Minh City on September 4.

The event provided a good opportunity for representatives of the two countries business communities to locate business partners and negotiate investment and trade deals.

The friendship and cooperative relations between Vietnam and the Republic of Korea (RoK) have continually developed in all fields since the two countries established diplomatic ties in December 1992.

Most notably ties were bolstered by the visit of RoK President Lee Myung-Bakto Vietnam in October 2009, during which the bilateral relationship was elevated to an equal strategic partnership.

Additionally, President Park Geun-hye’s official visit in September 2013 was a milestone in trade and investment cooperation between the two nations.

Currently, the RoK is one of largest foreign investors in Vietnam, investing heavily in the fields of information technology and garments and textiles.

Bilateral trade turnover is expected to hit a record high US$20 billion in 2015.

Pham Hai Tung, Chairman of Small and Medium Enterprises Association in the Southern Region said Vietnam wants to attract Korean investors in the areas of its strengths such as processing industry, manufacturing, infrastructure, energy, and services.

Huge potential for expanded trade with Russia

Vietnamese Russian trade has been sluggish in recent years, but is expected to rebound strongly when a Free Trade Agreement (FTA) between Vietnam and the Customs Union (VCUFTA) comes into effect later this year.

Speaking of the VCUFTA, Deputy Minister of Industry and Trade Do Thang Hai says final negotiations are underway and he expects Vietnamese exports to Russia to experience exponential growth once the trade pact is signed later this year.

Two-way trade turnover between the two nations, though far below its potential, did manage to hit US$2.76 billion last year, a year-on-year increase of 13.6%. Of the figure, Vietnamese exports to Russia were US$1.91 billion, up nearly 18% while imports were US$853 million, up 2.7%.

In the first seven months of this year, Vietnamese exports to the market declined slightly to US$960.4 million due to the political stability in the country. However, the downturn is expected to only be temporary, with the value expected to bounce back when Russia’s economy regains its stability.

Tran Bac Ha, President of Board of Directors of the Bank for Investment and Development of Vietnam (BIDV), says Russia has high and stable demand for light industrial products. Currently, some Vietnamese products exported to Russia enjoy lower taxes by 30-50%.

Furthermore, goods exported to the country should also benefit from an additional 25% tariff reduction when the VCUFTA comes into effect, Ha said adding another incentive of the trade agreement is that Russia represents a gateway for Vietnamese products to penetrate other countries in Northern America and Europe.

In addition to trade, Russia offers a huge investment opportunity for Vietnamese businesses. Vietnamese businesses have invested US$2.4 billion in 17 Russian projects, principally in oil and gas exploitation, food processing, garment and footwear.

BIDV and the Vietnam National Textile and Garment Group (Vinatex) plan to develop a light industrial complex on 1,000ha in Moscow. In the first phase, Vinatex plans to construct a garment factory at the complex.

Moscow is also offering incentives in terms of tax abatements and reduction along with reduced land rent and visa exemptions for Vietnamese workers. While BIDV has also agreed to issue loans worth of 75% of investment project’s value with preferential interest rates of 1.5-2% lower than the normal rate.

Russia has high demand for products of Vietnam’s strength like garment, footwear, handicrafts, processed food, agricultural products, seafood and construction materials.

The two countries are expanding cooperation in agricultural product processing and automobile assembling. In recent times, some businesses have invested in setting up goods distribution centres in Russia, providing a foundation for long-term operation in the lucrative market.

The Russian Government has offer incentives aimed at stimulating the light industry’s growth such as reducing import tax and giving preferential taxes for investors, including Vietnamese.

Experts warn that to conquer the market, Vietnamese businesses must overcome a number of formidable challenges, such as poor payment methods, fierce competition, fake and contraband goods and legal risks.

Deputy Minister Hai says to accelerate trade and investment in Russia, the two governments should devise a better mechanism for businesses to make payment by local currencies and support the establishment of the Vietnamese Investors Association in Russia.

Banks move toward non-collateral lending

Commercial banks and credit rating agencies are likely to take their first cautious steps toward providing loans without requiring collateral by evaluating company's portfolios and their leadership.

"If assessments of payment capacity and business plans come up with proper results, credit institutions may provide trust loans," said Nguyen Thi Hong, the State Bank of Viet Nam's deputy governor.

Do Hoang Phong, General Director of Credit Information Centre (CIC), a unit under the central bank, told baodautu.vn that many banks were building internal credit rating systems, but the number of companies involved in the process remained small.

CIC rates 25,000 companies (compared to 400,000 companies in Viet Nam) and 10,000 business executives every year.

PCB Viet Nam Credit Information JSC, the nation's first private credit rating agency, has partnered with CRIF – a global company specializing in credit ratings, to build a sound system for the Vietnamese market.

According to PCB, credit scores assist banks in managing risks and reducing costs, but also make it easier for individuals to receive bank loans.

Nguyen Van Huong, director of Minh Tam Co Ltd said that banks should thoroughly consider loans for companies that are performing well.

"We are running a good input-output trajectory, but we can't receive bank loans because we have no collateral," he said.

Chairman of Ha Noi Supporting Industry Business Association (Hansiba) Nguyen Hoang said that although support industries were targeted as top priorities for bank loans, many companies were still not approved for trust loans.

Regarding the concern, Tran Dao Vu, deputy general director of DongA Bank, said that lending without collateral was a decision that could only be made following the completion of many successful transactions, and it was impossible to grant loans following a first meeting.

Further, enterprises might gain a bank's confidence if they improved transparency in their financial reports, Vu said.

In July, the State Bank of Viet Nam told credit institutions and rating agencies to improve their ability to evaluate the credit worthiness of companies to allow for an increase in granting non-collateral loans. The move was made in a bid to assist Viet Nam in achieving a 12 per cent credit growth in 2014, which is likely to rest on loans granted in the second half of the year.

Observers note that there have been rumours that companies might prepare two financial reports, a true copy for themselves and polished reports for banks when they wish to apply for loans.

Officials have said that only 1 to 2 per cent of enterprises provide banks with audited financial reports.

Under current regulations, only credit institutions, finance, securities and insurance companies, foreign-invested companies, and public companies must have reports audited.

There are only 1,200 public companies, out of 400,000 companies in Viet Nam.

In the situation of mounting bad debts, banks are more likely to insist on collateral, preferably property.

In the document No 5342/NHNN-TTGSNH dated July 24, the central bank urged commercial banks to develop solutions to help enterprises access more capital to finance production.

Experts said that both banks and companies need the other to spend capital, but there might be much work to be done to develop trust before extending additional credit.

Power production up by 10.4% this year

Electricity output and imports reported by Electricity of Vietnam (EVN) in August were estimated at 12.41 billion kWh.

At the same time, electricity generated in the first eight months of the year posted a 10.4 per cent year-on-year increase to 93.66 billion kWh.

Figures released by EVN yesterday showed that electricity supplies for agriculture in the period accounted for 1.5 per cent of the total, increasing 1.6 per cent over the same period last year. At the same time, electricity provided to industry rose 13 per cent and accounting for 53 per cent, while that for commerce, hotels and restaurants reached 4.7 per cent, rising 10 per cent.

Power generation from hydroelectricity plants made up 55 per cent of the total, along with 21 per cent from gas, 17 per cent from thermopower plants and the remaining from other sources.

Further, EVN said it spent VND70.5 trillion (US$3.35 billion) for power production from January through August to ensure sufficient electricity supplies for production and consumption. Its disbursement in the period reached VND65.4 trillion ($3.1 billion).

The group has also completed 25 power grid construction projects, including eight 500kV and 17 220kV operating plants. It also began construction of 22 power grids to transmit voltage of 500-220kV.

Officials added that power supplies for Ly Son Island would be finished by the end of this month, as it has buried underground cables.

EVN is also working to connect the second turbine in the Vinh Tan 2 Thermopower plant to the national power grid this month. The plant's first turbine generated power was supplied to the national grid in January, providing a considerable power supply for southern provinces during the dry season.

According to the EVN, the Vinh Tan 2 thermal power plant consists of two generators, with each having a capacity of 622 MW.

The project, which began construction in August 2010, was developed by EVN based upon an engineering, procurement and construction (EPC) contract signed with Chinese contractor Shanghai Electric Group. Costing VND23 trillion, the plant is set to begin operating in June.

The plant, fuelled by coal dust from northeastern Quang Ninh Province, is expected to supply some 2.7 billion kWh of power annually, helping to significantly reduce power shortages in southern provinces during the dry season.

Russia allows more VN seafood

Russia has lifted a ban on seafood products from three more Vietnamese companies, raising the number of Vietnamese companies allowed to export seafood products to the European country to 10.

According to the National Agro-Forestry-Fisheries Quality Assurance Department (NAFIQAD), Russia's Federal Veterinary and Phytosanitary Surveilance Service has lifted its ban on the products of Anh Long Company, Seajoco Tan Phu Trung's Seafood Joint Stock Company No.1 and Frozen Factory AGF 9.

NAFIQAD officials said the ban was lifted after Russia confirmed that the companies' seafood products met its standards on food safety and hygiene.

Russia enforced the ban on the Vietnamese companies at the beginning of this year. Last month, it lifted the ban on seven of these companies, including five engaged in frozen tra fish and basa fish processing and two engaged in frozen shrimp processing.

Experts said the lifting of the ban would enable these companies to boost the country's seafood exports , as Russia was a large potential market for Viet Nam's fisheries products.

Russia's market potential increased after it imposed an embargo on imports from other European countries and turned to other trade partners to ensure an adequate food supply for its population of more than 140 million.

Truong Dinh Hoe, general secretary of the Viet Nam Association of Seafood Exporters and Producers, said Vietnamese companies should be proactive about taking advantage of opportunities to boost seafood exports while paying attention to product quality to meet the safety standards of the Customs Union of Belarus, Kazakhstan and Russia.

In the first seven months of this year, Viet Nam's export of seafood products to Russia reached US$36.2 million, representing an increase of 5.4 per cent over the same period last year.

The seafood export turnover is expected to increase rapidly in the remaining months of this year partly because of Russia's lifting of the ban on imports from the Vietnamese seafood companies. Last year, Viet Nam exported $103.3 million in fisheries products to Russia.

Fuel hike intervals extended to 15 days

The Government has increased the interval between two consecutive fuel price increases from at least 10 to at least 15 days.

The new decree on the petrol business, which contains the regulation and regulates fuel prices in line with State-managed market mechanisms, replaces Decree 84/2009/ND-CP and takes effect on November 11.

The decree also states that fuel traders will be allowed to unilaterally raise fuel prices if the rate of increase is below three per cent of current retail prices, but they must report the increase to the Ministries of Finance and Industry and Trade. The rate allowed for a unilateral increase in Decree 84 is 7 per cent.

If the increase in rates is between 3 and 7 per cent, petrol wholesalers must submit documents on the price fluctuations of elements which make up petrol prices, as well as the anticipated increases, to the two ministries for review and approval.

The rate increase that requires the ministries' review and approval in Decree 84 is 7 to 12 per cent.

The two ministries must reply about the increases and use of the fuel price stabilisation fund, if necessary, to petrol wholesalers within three working days from receipt of the required documents. If they fail to do so within three working days, the wholesalers may raise fuel prices but not exceeding seven per cent.

Fuel price increases exceeding 7 per cent, or increases with significant impact on the country's socio-economic development and the people's standard of living, must be reported to the Prime Minister for review and approval. The rate increase that requires the Prime Minister's review and approval in Decree 84 is 12 per cent.

The new decree also sets no limits on the number and rate of fuel price cuts, as well as intervals between consecutive price cuts.

The decree states that the Ministry of Industry and Trade is reponsible for providing updates on world fuel prices, including base and retail prices, and the use of the fuel price stabilisation fund on its website.

The decree also says the Ministry of Finance will supervise petrol and oil pricing, as well as the extraction and use of the fuel price stabilisation fund of wholesalers.

Petrol wholesalers must publicise on their websites or on mass media the current petrol retail prices, extraction and use of the fuel price stabilisation fund and audited financial reports.

HCM City urges farmers, firms to boost links

The HCM City Food and Foodstuff Association (FFA) should focus more on developing links between enterprises and farmers, the deputy chairwoman of the HCM City People's Committee has said.

Nguyen Thi Hong said this would enable farmers to find more outlets for their products.

She also noted that firms could place orders with farmers for products that are in demand both in domestic and foreign markets.

Speaking at a meeting held in HCM City late August, Hong also called on FFA members to develop close links with each other and join forces to boost the development of the industry.

The association's deputy chairman, Nguyen Ngoc An, said the FFA had carried out activities to help member companies stay afloat in recent years.

VietinBank to implement mobile ATM machines

Governor of the State Bank of Viet Nam Nguyen Van Binh has authorised the Viet Nam Joint Stock Commercial Bank for Industry and Trade (VietinBank) to implement a mobile ATM service.

The service will be implemented at the Thang Long Industrial Park in Dong Anh District, Ha Noi, and the Binh Chieu Industrial Park in Thu Duc, HCM City.

Five mobile facilities will be equipped with two ATMs each.

To gain approval for the service, Vietinbank had to register documents with branches of the SBV in relevant cities and provinces.

State budget collection up by 17% from last year

State budget collections reached an estimated VND576 trillion (US$27.1 billion) in the first eight months, completing 73.7 per cent of the year's budget forecast.

The figure increased by 17 per cent compared to the same period last year, according to a report by the Ministry of Finance.

Budget expenditure in the first eight months was estimated at VND681 trillion ($32 billion), or 67.7 per cent of the annual forecast, a year-on-year increase of 11.9 per cent.

Seminar to discuss investment opportunities in VN

Foreign institutional and individual investors and businesses will get a chance to explore opportunities to make new investments in Viet Nam at a two-day event to be held in HCM City next week.

"The Gateway to Vietnam: Looking for new investment opportunities," organised by the Saigon Securities Inc. on September 11-12 will feature 18 experts speaking about equitisation of State-owned enterprises, restructure of banks, and the fast moving consumer goods sector.

There will be discussions on how to speed up SOE equitisation, what industries will benefit from Viet Nam's integration with the global economy and economic restructure, advantages and difficulties for foreign institutions investing in the country, policy support, handling of bad debts and plans to sell them by the Vietnam Asset Management Company, and others.

HCM City to host export market forum for local businesses

The advantages and challenges in exporting to Japan, the US, India, France, Indonesia, and other markets will be among the issues discussed at Export Forum 2014 to be held in HCM City next week at the White Palace Convention Centre on September 12

Officials from the Ministry of Industry and Trade, foreign envoys, and Vietnamese and foreign commercial counsellors will apprise local businesses about changes in regulations, market access requirements, import and export trends, and buyer behaviours and products in demand in foreign countries.

The forum hopes to enable Vietnamese businesses to identify promising export markets and adopt right strategies to increase exports of goods and services, Ho Xuan Lam, deputy director of the Investment and Trade Promotion Centre of HCM City (ITPC), said.

Viglacera seeks foreign investors

Ceramic building material producer Viglacera is seeking foreign strategic partners to assist in transforming the company to comply with equitisation plans, according to its chairman, Luyen Cong Minh.

Following Viglacera's initial public offering earlier this year, the State was holding more than 90 per cent of the shares in the corporation, but plans to reduce its ownership to 51 per cent in two phases, Minh said. In the first phase, shares would be sold to foreign investors, leaving the State with 75 per cent.

"Currently, investors from Japan, Singapore and Hong Kong, in the finance, construction material and real estate sectors, are interested in Viglacera shares," Minh told the Dau tu chung khoan.

Viglacera expects to increase its export turnover from its current 5 per cent to 20 per cent, noting that joining with foreign investors is crucial to the corporation. "Foreign shareholders will help us increase the quality of products, paving the way for improving exports," he added.

If the shares are bought at the average price of the IPO, it is estimated that the purchase will cost investors some VND500 billion (US$22.7 million).

Apart from Viglacera, Viet Nam's national carrier, Vietnam Airlines, also hopes to sell a 20 per cent stake to foreign investors.

With the expected IPO price of VND22,300 (about $1), Vietnam Airlines' capitalisation is estimated at some $1.4 billion.

Seafood firm profits from acquisition

Seafood processor Hung Vuong (HVG) is enjoying a lucrative business one-and-a-half years after it bought the shares of rival company Sao Ta Foods (FMC).

This is because FMC's stock has increased by more than 150 per cent since the time of the purchase. At the end of 2012, FMC was offering five million shares for sale at a minimum price of VND10,000. Five months later, Hung Vuong spent VND52.5 billion (US$2.4 million) to buy the shares at VND10,500 each and ended up owning 41.8 per cent of the rival company. FMC's share price at that time stood at VND9,400.

Last year, the seafood processing industry faced a number of challenges, with shrimp prices increasing by 50 per cent. However, some companies, including FMC, managed to save their respective businesses.

FMC's revenue grew by more than 40 per cent to almost VND2.2 trillion ($103.7 million), leading to a net profit of VND32.7 billion ($1.5 million), or 5.4 times more than that of 2012.

According to an FPT Securities Company report, by 2020, FMC is expecting an annual growth of 7.65 per cent in shrimp output and 6.7 per cent in revenue, as well as a four per cent share of shrimp exports.

Data from the Viet Nam Association of Seafood Exporters and Producers shows that FMC ranked seventh nationwide in shrimp export value in the first five months this year, reaching $48.3 million.

In mid-July, the company announced that its second quarter profits surged by 340 per cent over that of the same period last year, with its shares repeatedly hitting the ceiling price and reaching VND28,900 ($1.3).

Meanwhile, HVG is reportedly aiming to buy a 10 per cent stake in Viet Thang Feed (VTF) at VND22,000 ($1) per share, to increase its total stake in the company to 75.96 per cent. VTF's share price increased by 4.7 per cent yesterday and closed at VND22,500.

Ministry data shows factories consume less steel in August

The steel consumption of Vietnamese factories has remained low in the first eight months of 2014 and was mainly for buildings under construction, said the Ministry of Industry and Trade.

Figures from the Ministry showed that raw steel output in August was 280,500 tonnes, a nine-per cent increase over that of the previous month, while rolled steel output posted a 16 per cent year-on-year increase to 291,100 tonnes, and bar steel output was 294,600 tonnes.

In the first eight months of the year, raw steel output was estimated to be 1.9 million tonnes, a 0.01-per cent reduction compared with that of the same period last year. Rolled steel output was estimated at 2.3 million tonnes, a 23 per cent year-on-year increase, while bar steel output was 2.28 million.

In August, steel imports increased by 43 per cent in terms of quantity and 39 per cent in terms of value compared with that of the previous month. From January to August, steel imports increased by 14 per cent in terms of quantity and seven per cent in terms of value compared with that of the same period last year.

The Ministry attributed the low consumption to economic difficulties and the fall in construction demand among households during the rainy season.

It added that some steel factories in the north had to stop production because of low consumption and high inventories while others had to reduce their selling prices by supporting transport fees and increasing discounts, in order to compete with steel imports.

Vietnam-Russia economic cooperation improved

Cooperation between Vietnam and Russia is greatly benefitting the two countries with regard to economics, trade and investment, Vietnamese Trade Counsellor to Russia Pham Quang Niem said.

Bilateral trade reached 4 billion USD in 2013 and 1.76 billion USD during the first half of this year.

Russia currently ranks 18 th amongst the countries and territories investing in Vietnam, with a total of 97 investment projects worth close to 2 billion USD.

Meanwhile, Vietnam has invested 2.4 billion USD in 17 projects in Russia.

A meeting between Vietnamese and Russian businesses, chaired by Minister of Industry and Trade Vu Huy Hoang, on September 16 is expected to help the firms to learn about the respective markets and enhance investors’ confidence, boosting cooperation between Vietnam and Russia, Niem added.

A free trade agreement between Vietnam and the Customs Union of Russia, Belarus and Kazakhstan is expected to be signed next January on the occasion of the 65 th anniversary of Vietnamese-Russian diplomatic ties.

Dong Nai moves to expand export markets

The southern province of Dong Nai has enjoyed an annual average export growth of 17.2 percent over the last few years, which can be attributed to the catalogue of measures implemented by the locality to support businesses.

Businesses have been provided with financial assistance for production and import-export activities, and were offered tax incentives.

In addition, local authorities have organised numerous activities to promote trade and investment with the aim of helping enterprises find new markets and expand traditional ones.

Thanks to these efforts, local businesses, particularly in the textile and shoe industries, have established stable partnerships and signed long-term order contracts to sell their products abroad.

Dong Nai’s products are now available in 140 countries and territories worldwide. The province ranks amongst Vietnam’s top five localities in terms of export, with its turnover so far this year estimated at over 8.1 billion USD, a year-on-year increase of 14.5 percent.

The province’s export stables reported positive growth on all its traditional markets, such as the US, Japan, the Republic of Korea, China, the UK and Germany.

Its export value for all of 2014 is likely to reach 12 billion USD, representing a 9.8 percent rise compared to last year’s figure.

In order to achieve this, Le Van Danh, Head of the provincial Department of Industry and Trade, said local authorities needs to continue promoting trade and investment, and creating conditions for businesses to expand into the new markets in Africa, the Middle East and South America.

Until the end of this year, Dong Nai will focus on the markets of Cambodia, Japan, the Republic of Korea, India, Australia, Chile, Myanmar, Sri Lanka and the United Arab Emirates (UAE), where the locality’s products are in high demand.

The department will focus on improving market forecasts, updating businesses on all domestic and foreign policies relating to import-export, and providing them with the latest information on free trade agreements, either those already ratified or those still in the pipeline, he said.

Representatives of the department will also hold regular meetings with firms to address any export issues they may have in a timely manner, he added.

Dak Lak invests in rubber tree conservation

Rubber tree plantation owners and businesses are protecting rubber trees rather than cutting them down to cultivate other crops, despite falling latex prices, the Central Highlands Steering Committee reported.

Apart from calling for increased protection of rubber trees, local authorities proposed plantations apply intercropping to increase incomes and enrich the soil.

The Central Highlands province of Dak Lak has the third largest area of rubber tree coverage with 39,600ha, following Gia Lai and Kon Tum with over 120,000ha and 75,500ha, respectively.

The locality has made plans to plant rubber tree on an additional 27,000ha, increasing the total area of rubber tree coverage in the province to 66,800ha by 2020.

The province is also trialling new rubber tree varieties and is applying advanced technologies in planting and nurturing rubber trees, as well as in processing latex, in a bid to improve quality and productivity, and expand consumer markets.

The Central Highlands comprise the five provinces of Lam Dong, Gia Lai, Dak Lak, Dak Nong and Kon Tum, with a total rubber tree coverage of 278,564ha.

Vinh Phuc looks for investment from India

A delegation from the northern province of Vinh Phuc, together with the Vietnamese Embassy in India and the Federation of Indian Export Organizations (FIEO), held a meeting with Indian enterprises in New Dehli on September 5 to call for investment in the Vietnamese province.

FIEO’s CEO Ajay Sahai said Vietnam is a potential market for Indian exporters particularly when the comprehensive partnership between two countries is growing strongly on the back of the close traditional ties.

Introducing the strength and potentials of Vinh Phuc, Secretary of the provincial Party Committee Pham Van Vong stated that the province’s biodiversity, convenient transport and a hardworking and creative workforce are just some of the many features that make Vinh Phuc the ideal location for foreign investors.

Currently, Vinh Phuc has attracted 167 foreign direct investment (FDI) projects from 14 countries and territories, worth close to 3 billion USD.

Vong emphasized that many foreign corporations have established their presence in the province, for example Honda and Toyota (Japan); Piaggio (Italy); De Hus (Netherlands); Foxconn, Compal (Taiwan, China); Daewoo, Sindoh (the Republic of Korea), adding that Minda company of India has invested in two projects in Vinh Phuc.

He announced that foreign investors in the province will be entitled to several local incentives besides those stipulated in government’s regulations, such as vocational training and project’s documentation fee support and assistance in labour recruitment.

Minister Counsellor of the Embassy of Vietnam in India Tran Quang Tuyen also affirmed that Vietnam and India’s trade and economic relations are expanding rapidly.

Since 1988, Indian investors have invested in 80 FDI projects in Vietnam, valued at a total of 2.1 billion USD, putting the country at the 12th position among 100 countries and territories investing in the country.

The first half of 2014 saw three Indian investment projects worth 750,000 USD licensed in Vietnam.

Bilateral trade between two states rose to 8.03 billion USD in 2013 from just 2.36 billion USD back in 2010.

EIU forecasts strong growth for Vietnam’s exports

Vietnam’s exports are likely to keep a strong growth in the time ahead, according to the Economist Intelligence Unit (EIU), which is one of the reasons behind the EIU’s positive forecast on the country’s economic outlook in 2014 and 2015.

The research and division of The Economist Group quoted statistics showing Vietnam posted an annual export growth rate of 24.1 percent for the period 2010 – 2013; and a year-on-year increase of 13 percent for the first eight months of 2014.

In addition, the EIU said Vietnam is on its way to realise the goal of trade surplus in 2014, the third year in a row.

The US maintains its place as the top market for Vietnamese exports, buying 18.5 billion USD worth of Vietnam’s goods in first eight months of this year, a 22-percent year-on-year increase. It is followed by the EU with 17.5 billion USD, the Association of South East Asian Nations (ASEAN) with 12.4 billion USD) and China with 9.8 billion USD.

In the same period, China continues to be the largest exporter to Vietnam with 27.6 billion USD. The EIU said Vietnam is making efforts to reduce its dependence on Chinese supply of materials, noting that imports from China in the 8-month period grew by only 17 percent, a remarkable drop from the 23 percent rise in the same period last year.

Jetstar inaugurates Thanh Hoa- Ho Chi Minh City route

Budget airline Jetstar Pacific inaugurated a new service between the north central province of Thanh Hoa and Ho Chi Minh City on September 5 to meet increasing demand on this route.

The service using Airbus A320 aircraft operates one return flight every day, which departs from Ho Chi Minh City at 10 am and from Thanh Hoa’s Tho Xuan airport at 12:45 pm.

To welcome the new route, Jetstar offers 3,000 tickets priced at only 3,000 VND (0.14 USD) each.

By Sept. 5, nearly 10,000 passengers have registered for tickets on this route at prices ranging from 690,000 VND (32.5 USD) to 3 million VND (141.6 USD) per ticket.

Besides Thanh Hoa, Jetstar Pacific is currently operating flights from 9 provinces and cities in Vietnam, which are Hanoi and Hai Phong City in the north, Vinh City in Nghe An province, Da Nang City, Thua Thien-Hue province and Nha Trang City in Khanh Hoa province in the central region, Buon Ma Thuot in the Central Highlands province of Dak Lak, and Ho Chi Minh City and Kien Giang province’s Phu Quoc Island in the south.

Investors confident in southern business climate

Foreign entrepreneurs still regard Binh Duong province as a profitable and advantageous investment opportunity despite the disturbances in May, proven by the 350 million USD in foreign direct investment (FDI) in the southern locality since then.

Huang Ping Fu, an executive for the Taiwanese-owned Kaiser Vietnam Wood Industries Limited Company located in My Phuoc 1 Industrial Park, said he highly valued the local authorities’ efforts to help businesses resume their operations.

Hang Vay Chi, General Director of the Viet Huong Industrial Park, said foreign companies located in Binh Duong appreciated the timely support offered by the province to help them overcome the consequences of the disturbances triggered by the East Sea tensions in May, thus increasing their confidence in the locality and Vietnam in general.

He added that his industrial park will receive 120 million USD in FDI from two US and Hong Kong (China) investors next week.

Chairman of the Provincial People’s Committee Le Thanh Cung said investors’ confidence in the local investment environment had been maintained thanks to the province implementing effective measures at the right time.

In a meeting with the executives of 100 companies in August, he revealed that Binh Duong plans to earmark 1 trillion VND (47.6 million USD) to be made available to businesses facing financial difficulties.

He informed the business leaders that the province had provided support to companies in 11 different locations, refunding taxes worth 525 billion VND (25 million USD) to 203 enterprises, and waiving taxes and property rental fees worth 155 billion VND (7.3 million USD) for 594 enterprises.

To date, Binh Duong has attracted more than 1.2 billion USD in FDI, 20 percent higher than the target for 2014, with 53 percent of investments coming from Japan and the Republic of Korea - the largest investors in the province, Cung noted.

He reported that to facilitate smooth operations, the locality is accelerating and streamlining its administrative procedures, implementing the Government and province’s assistance measures, and ensuring security and order.

The province is also running a new campaign to promote investment in advanced technologies and its support industries, as well as in services and trade, the official said.-

HCM City urges farmers, firms to boost links

The Ho Chi Minh City Food and Foodstuff Association (FFA) should focus more on developing linkages between its member enterprises and farmers, the deputy chairwoman of the HCM City People's Committee has said.

Nguyen Thi Hong said such cooperation would enable farmers to find more outlets for their products.

She also noted that firms could place orders with farmers for products that are in demand both in domestic and foreign markets.

Speaking at a meeting held in HCM City late last month, Hong also called on FFA members to develop close linkages with each other and to join forces to boost the development of the industry.

The association's deputy chairman, Nguyen Ngoc An, said the FFA had carried out activities to help member companies stay afloat in recent years.

It had organised seminars, fairs, training courses and trade promotions to help members improve competitiveness and expand to other markets, he said.

Despite having fewer difficulties this year compared to 2013, firms active in the food and foodstuff industry still faced challenges, including declining demand and high input costs, he said.

The association planned to take action to help its members overcome difficulties in the coming time, he said.

At the meeting which was held late last week to review the FFA's performance over the years, the FFA was awarded the Labour Order Third Class for its contribution to economic development in the last 16 years.

Vinamarine mulls over two new shipping routes

The Vietnam Maritime Administration (Vinamarine) is considering opening two more coastal shipping routes with the first linking the south-central province of Binh Thuan and Kien Giang in the Mekong Delta, and the other from Quang Binh to Da Nang city on the central coast, the Saigon Times Daily reported.

The new routes will meet the rising demand for cargo transport between these places as overland transport has become overloaded.

According to Vinamarine, the need for goods transport to and from the Mekong Delta is increasing rapidly and is estimated at around 51.5 million tonnes a year. In the immediate future, 2.1 million tonnes of construction materials will be transported from Ba Ria-Vung Tau province to the Mekong Delta for a project to dredge a navigational channel leading to the Hau River and other supporting works.

Vinh Tan Power Center and its supporting works in Binh Thuan province also require large quantities of construction materials and equipment that should be transported by water.

Therefore, the shipping route is essential to ease pressure on roads.

Meanwhile, the new sea route linking ports between Quang Binh and Da Nang is also being considered by Vinamarine. Enterprises based in Da Nang city need to ship over 400,000 tonnes of cargo such as fertilizer, clinker, timber, oil and steel a year, according to a recent survey conducted by the administration.

These cargo loads are currently taken overland from Quang Ninh, Hai Phong, and Thanh Hoa to Quang Tri, Hue and Da Nang and vice versa.

Therefore, once completed, the new waterways would help transfer cargo between these localities.

On July 6, the Ministry of Transport opened a new sea route linking provinces from Quang Ninh to Quang Binh with around 50,000 tonnes of goods transported during its first month of operation.

Compared to the costs of transport by road, the coastal shipping route is much more competitive, prompting enterprises to choose the latter.

For instance, the freight for a 20-feet container transported overland is 10-12 million VND from Hai Phong to Thanh Hoa and is 18-20 million VND from Nghe An to Ha Tinh while the figures shrunk to 2.4 million VND and 3-3.2 million VND respectively if goods is transported by sea.

However, road transport is faster, taking six hours to send goods from Hai Phong to Thanh Hoa while it takes ten hours to transport goods over the same distance by sea.

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