BUSINESS IN BRIEF 6/6

HCM City hosts Vietnam- Singapore Biz Forum

The annual Vietnam-Singapore Business Forum 2014 (VSBF) opened in HCM City on June 4, attracting more than a hundred representatives from the two countries’ leading businesses.

The three-day event aims to offer a platform to exchange business ideas, tackle current challenges and develop a bilateral strategic partnership.

Among participants were Singaporean giants AscendasProtrade, Mapletree, Victoria Hotels Resorts, Keppel Land, Gold Roast, and Sagiko. Vietnam was represented by famous trademarks–Vietcombank, Thien Minh, and Dream House.

In the framework of the forum, delegates will visit a number of businesses, including Mapletree Business City, Ascendas-Protrade Singapore Tech Park, and Vietnam Singapore Industrial Park No.1 (VSIP I).

Many businesses showed their keen interest in priotized areas in the two countries’ strategic partnership – financial services, agro-forestry and fishery sectors, tourism, real estate, and the environment. Vietnam Chamber of Commerce and Industry (VCCI) Vice Chairman Doan Duy Khuong said both Vietnamese and Singaporean businesses are looking towards the establishment of an ASEAN Economic Community (AEC) in 2015.

“We hope that VSBF 2014 will help create bilateral business links and boost regional economic integration process,” he noted.

Tan Soon Kim, a senior official from International Enterprises Singapore (IE Singapore), highlighted that successful bilateral ties have offered many business cooperation opportunities for both countries.

In Asia, he said, Vietnam boasts an abundant labour force and mineral resources while Singapore’s services and expertise will help Vietnam capitalize on its advantages. Singaporean businesses will continue to play an integral part in Vietnam’s development process in the long run, he added.

By May 2014, Singapore ranked third among 101 foreign investors in Vietnam, with a total registered capital of US$30.32 billion, mostly focusing on processing and manufacturing industries, and real estate sector.

In May alone, Singapore invested in 29 projects worth more than US$363 million

in Vietnam.By April 2014, Vietnam poured US$196.4 million in 53 Singapore-based projects.

Vietnam looks to sharpen competitive edge

The government should help home enterprises enact a strategy on improving business climate and national competitive edge, first introduced in March, economic experts suggested at a workshop in Hanoi on June 4.

The event came as a mere one-third of localities nationwide have come up with plans to realise the strategy, known as Resolution 19, which lists a set of measures meant to enhance administrative reforms, helping firms save processing time and costs.

Director of the US Agency for International Development, Joakim Parker, said his agency is willing to assist Vietnam in implementing the strategy.

If successful, Vietnam will be able to strengthen its global trade commitments, including those made within ASEAN, the World Trade Organisation and the Trans-Asia Pacific deal, Parker said.

Under the strategy, the country sets the goal of meeting the standards of the ASEAN-6 group in terms of business licensing and insolvency, tax payment, customs formalities, access to electricity supply and credit, and investment protection by 2015.

The event was hosted by the Central Institute for Economic Management.

Haiphong guarantees safety for foreign investors

Leaders of the northern port city of Haiphong have pledged to continue ensuring safety to foreign invested enterprises in the locality.

During a meeting with representatives from local firms in Vinh Bao district and the Taiwan Business Association in Haiphong on June 4, Secretary of the municipal Party Committee Nguyen Van Thanh said the enterprises can put their worries at rest while operating in the city.

He vowed that the city will directly settle all obstacles arising during their operations.

According to Chairman of the municipal People’s Committee Duong Anh Dien, the situation in the city has remained stable thanks to joint efforts of the local authorities and residents, as well as the cooperation of foreign investors, including those from Taiwan.

Currently Haiphong is hosting 111 Taiwanese and Chinese enterprises, he noted, adding that the firms have made great contributions to the development of the city through boosting exports, creating jobs and conducting charitable activities.

Dien suggested that the Taiwan Business Association will further their cooperation with Haiphong authority, while helping the city attract more investors.

Representatives from the participating firms and the association thanked the city’ leaders for their close support, expressing their desire to expand their operations in the locality.

Binh Duong dishes out licenses for FDI projects

On June 4, the southern province of Binh Duong granted investment licenses to 41 projects totally capitalized at nearly US$155 million, mostly from foreign direct investment (FDI).

Nine of the newly-licensed projects are funded by Japan (US$35 million), nine by the Republic of Korea (US$28 million), and several from China and Singapore.

Chairman of the Binh Duong provincial People’s Committee granting investment license to Chinese businesses

Binh Duong provincial leader welcomed investors and encouraged them to expand operation in the province for mutual benefit.

Chief investors highly valued the favourable conditions and efforts by the Binh Duong provincial People’s Committee and relevant agencies to facilitate business operations in the province.

They pledged to disburse investment capital as soon as possible to enjoy fresh growth of the local economy in the coming time.

Over the past five months, Binh Duong attracted more than VND4,200 billion from domestic investors and US$978 million in FDI, fulfilling approximately 98% of its yearly target and 15% higher than the previous year.

Vietnam makes break-through in global energy sector

Doosan Vina announced that the eighth and final shipment of the first “Made in Vietnam” Supercritical-Once-thru power plant boiler has been loaded and shipped to Kudgi, India after fifteen months of manufacture.  

The two 800 MW super-critical coal-fired boilers weighing over 13,000 tons, represent a giant leap in Vietnam’s industrial development. It is the first power plant boiler of its type ever to be manufactured in Vietnam.

The two 800 MW Kudgi “Supercritical Once-Thru Boilers” will deliver 2,550 tons of high pressure steam per hour and operate under extreme temperatures of up to 569 degrees celcius and pressure levels of 271 kilograms per square centimeter.

Doosan Vina is one of only a handful of companies worldwide that are certified by ASME to manufacture these high tech power plant boilers.

The project required eight shipments in total and the 13,102 tons of coils, panels, headers and links will be assembled on site in India and then begin producing power to fuel India’s development.

“We’ve worked hard on this history making project and are proud that another Vietnamese made power plant boiler is out there generating power for our neighbors in India; each time we complete a boiler Vietnam’s reputation as a global player in the energy sector increases, bringing us more and more customers from around the world,” said To Lan Phuong, Manufacturing Engineering Section Manager.

Businesses urged to expand markets overseas

Diversifying markets overseas is an effective way to sustain Vietnam’s export growth and strike its trade balance with China, experts said in Hanoi on June 3.

Experts made the recommendation at a conference to address a fall in farm produce exports to China following tensions in the East Sea between Vietnam and China.

They agreed that the pressure from the territorial dispute has now directly spilled over into trade relations between Vietnam and China resulting in a sharp drop-off of Vietnamese exports and imports with China.

Agriculture ministry statistics show farm produce exports to China dropped more than 7% in May compared to April due to declining volumes of rubber and cassava.

The Ministry of Industry and Trade (MoIT) said that despite East Sea tensions, the trade exchange between Vietnam and China is returning to normal, but underlined the need to map out a new strategy for future trade relations with China.

MoIT Vu Huy Hoang said China is an important trade partner of Vietnam, and Vietnam needs to maintain and develop trade with this big neighbour.

However, he emphasised the need to diversify markets to reduce reliance on China as Vietnam’s trade deficit with China remains high.

The MoIT is currently working with Laos and Cambodia to prepare for the signing of agreements on border trade, significantly increasing Vietnamese exports to these markets, he said.

Vietnam and China signed a border trade agreement in 1999, and they agreed to renew it in late 2013. Yet, tensions in the East Sea are affecting the signing of the document.

The MoIT pledged to complete the signing process in the coming time.

RoK, Vietnam energy firms ink deals

Energy technology firms from Vietnam and the Republic of Korea (RoK) signed contracts totalling US$32 million at the 6th International Exhibition on Environment and Energy Technology (Entech) recently held in Hanoi.

Many State and private businesses of Vietnam showed their special interest in the RoK’s advanced technology in the energy sector and its competitive prices.  

During the May 21-23 event, big Korean companies such as Korea Western Power Co. Ltd, Taekwang Power Holdings Co. Ltd, and Korea Hydro and Nuclear Power Company organized workshops, introducing advanced technology to Vietnamese firms and their plan to penetrate the Vietnamese market.

About 90 stalls of at least 70 Korean companies operating in the fields of power production, energy saving, water supply and waste treatment drew thousands of visitors to the exhibition.

More domestic consumers put purchases on credit

Consumer habits of Vietnamese are changing, with an increasing number looking to purchase their desired products through affordable loans.

Igor Prerovsky, General Director of Home Credit Vietnam, invested by PPF, said at June 3 conference on consumer finance that consumer credit, which helps consumers buy their desired items and pay later, is expanding in Vietnam.

Statistics released by Home Credit showed that around 20% of consumers in the country’s southern part make purchases on credit while it accounts for around 10% in the north. These figures are showing signs of increasing.

Prerovsky pointed out that consumer finance is another way to contribute to economic development through boosting purchasing capacity and demand, while enhancing living standards of consumers.

This also helps consumers to form a habit of saving, he added.

In addition, financial companies targeted low-income earners rather than the middle-class, in comparison with retail banks.

Home Credit, with more than 5,000 points of sale in all 63 provinces and cities in Vietnam, said fast, simple and professional services are the core basis for competition in the consumer lending sector but credit safety must be ensured.

Small and big firms meet to sound out business prospects

Large companies worked with small and medium enterprises (SMEs) in Vietnam at a speed meeting in HCMC last week to explore ways to boost business links.

The event attracted 17 big corporations in varied fields, most of them from Europe such as Big C, GameLoft, Bel, Schneider and Piaggio, and 27 local and foreign SMEs.

The meeting was organized by the EU-Vietnam Business Network (EVBN), the French Chamber of Commerce and Industry (CCIFV) and the European Chamber of Commerce in Vietnam (EuroCham) to help the participating businesses to look for suppliers and customers.

According to EVBN, CCIFV held a similar event last year and many participants said they had not known the products they were looking for were available on the Vietnamese market until that event took place.

The five-year project EVBN was initiated late last year with a budget of around three million euros by the European Union to facilitate operations of EU companies in Vietnam.

Mekong Delta grapples with slow agriculture modernization

The Mekong Delta, the country’s key rice growing area, is still struggling with the sluggish modernization of the agriculture sector, which experts said is due to inconsistent policies for agriculture and rural development.

Professor Bui Chi Buu, former director of the Institute of Agricultural Science for Southern Vietnam under the Ministry of Agriculture and Rural Development, told a recent seminar that post-harvest losses stayed high, at 12-14% of total output.

This is one of the reasons behind local farmers’ low incomes compared to the nation’s average.

The nation has concentrated much on food security but social welfare for those working in the field has been paid little attention, Bui said. Farmers have made great efforts to grow higher-yield crops and embrace intensive farming methods, their living standards have not improved correspondingly.

Ho Viet Hiep, vice chairman of An Giang Province, said farmers in the province are now able to harvest four tons of paddy a hectare and exported US$200 million worth of rice last year.

An Giang has made certain farming breakthroughs like the successful large-scale rice field and a stronger link between farmers and enterprises. But local farmers earn just over US$1,000 a year on average each.

Therefore, the sector needs comprehensive restructuring, Professor Buu said, urging more investments in the sector with a focus on adding value to farm produce and lowering exports of semi-processed products.

The agriculture sector in the Mekong Delta in general and in An Giang in particular has achieved lower-than-expected growth due to the absence of feasible strategies for modernization.

The average growth was 5.5% in 1986-2003 but dropped to 4% in 2011 and 2.67% last year.

Buu also proposed incentives for large-scale farming to turn out higher quality products at lower costs and for establishment of strong business-and-farmer cooperation.

Last year, the Mekong Delta region expanded large-scale rice production to 76,000 hectares.

Investors sought for Tay Bac Urban Area

The management of the Tay Bac Urban Area in HCMC’s outlying districts in collaboration with the HCMC Investment and Trade Promotion Center (ITPC) held a conference over the weekend to call for investments with a focus on infrastructure development and other important sectors.

Previously, many foreign and domestic investors had shown keen interest in Tay Bac Urban Area but the management was unable to accept their proposals as the 1/2000 scale plan of the area had not been approved.

Now the plan has been approved by the city government, paving the way for the urban area in Cu Chi and Hoc Mon districts to attract investors to infrastructure development as well as housing, residential, hospital and schools projects.

Among the major components in need of investors are Tam Tan Street stretching from An Ha Bridge to Provincial Road No.8, the streets by canals No.5, No.8 and No.7, the roads connecting canals No.5 and No.7, an intersection at An Ha Bridge, Diamond residential village, education and administrative-trade-service centers, and a resettlement area.

Investors will be provided with incentives in line with the city’s investment policy. For the prioritized projects, the management will ask the city government for special treatment for the investors.

Tay Bac covering more than 9,000 hectares and 30 kilometers away from the downtown area of HCMC is expected to be home to around 450,000 residents. It will be developed into an eco-area and connected to trans-Asia National 22 linking HCMC to Long An and Tay Ninh provinces.

The components under construction in Tay Bac are Kinh Dong Water Treatment Facility, Tan Phu Trung Industrial Zone and Cu Chi Golf Course.

Tay Bac is one the three major urban areas to be developed in HCMC. The other two are Thu Thiem and South Saigon.

PM approves 15 new golf courses in zoning plan

Prime Minister Nguyen Tan Dung has signed a decision approving 15 more golf courses in a zoning plan for development until 2020.

According to the decision signed last week, there will be nine golf courses and the second phase of one course will be removed from the country’s zoning plan for this field until 2020.

With the adjustments, Vietnam will have 96 golf courses planned for development towards 2020. The number includes 14 golf courses in the northern midlands and mountainous region, 19 in the Red River Delta, 30 in central Vietnam, seven in the Central Highlands, 22 in the southeastern region and four in the Mekong Delta region.

The Ministry of Planning and Investment has been to adjust and supplement the requirements for development of golf courses compared to those clarified in Decision 1946/QD-TTg issued in 2009 based on the actual situations in regions. The ministry will have to submit the new criteria to the Prime Minister next year.

The 15 new golf courses in the zoning plan until 2020 are Phuc Tien and Ky Son in Hoa Binh Province, Thanh Xuyen in Phu Tho Province, Yen Binh and Phu Binh in Thai Nguyen Province, Halong Star in Quang Ninh Province, Dam Hau Lake in

Yen Bai Province, Cat Ba in Haiphong City, Phoenix Hill in Ha Nam Province, Quang Cu in Thanh Hoa Province, Lang Co in Thua Thien-Hue Province, Ho Na-Van Phong in Khanh Hoa Province, Son My and Hon Rom in Binh Thuan Province, Vietsovpetro in Ba Ria-Vung Tau Province, Phuoc Dong in Tay Ninh Province and Hoan Cau in Long An Province.

Farming imports up 20% this year

Viet Nam’s agriculture, forestry and fisheries sector had a year-on-year increase of 20.1 per cent in imports in the first five months of this year.

This announcement was made by the Ministry of Agriculture and Rural Development, adding that the increase was a total US$8.56 billion in imports of material and products for production.

During the first five months, Viet Nam imported pesticide worth a total of $337 million, 5.6 per cent higher than the same period last year.

Almost all the pesticide products used in the domestic market were imported, with an annual volume of 70,000 tonnes, stated Bui Si Doanh, deputy head of the Plant Protection Department.

Imports of animal feed products material for producing animal feed had a light surge of 0.1 per cent to $1.2 billion against the same period last year. Of which, imports had a year-on-year increase of 49 per cent in volume to 809,000 tonnes and also the same percentage in value to $474 million for soybean.

Imports of corn surged by 3 times in volume to 2.24 million tonnes and 2 times in value to $576 million compared with the same period last year.

Viet Nam must pay $200 million each year to import varieties of plants, including fruit, vegetable and rice, the ministry said.

Meanwhile, in the first five months of this year, imports of fertiliser had a reduction of 14.9 per cent in volume to 1.31 million tonnes and 35.8 per cent in value to $405 million against the same period last year because the domestic supply increased to meet the demand at home market.

Experts reported that the agricultural sector should reduce imports of products and materials for production to gain sustainable development of the sector in the future. To achieve the target, the sector should promote attraction of investment from both domestic and foreign enterprises with modern technology for increased output and quality of farming products to avoid dependence on imports.

PM approves Vinacomin capital sale to VPBank

Prime Minister Nguyen Tan Dung has approved in principles to allow the Viet Nam National Coal and Minerals Industries Group (Vinacomin) to sell all of its charter capital at Vinacomin Finance Company (CMF) to Viet Nam Prosperity Bank (VPBank).

The State Bank of Viet Nam also agreed in principles on document No 3707/NHNN-TTGSNH dated on May 30 for the deal.

Deputy PM Vu Van Ninh asked Vinacomin and VPBank to follow laws on merger and acquisition while ensuring State-owned capital.

The two sides have been implementing further steps to complete the deal.

A representative from VPBank revealed that the bank will shift all credit activities at CMF to a new company with the aim of making the operation more professional and bringing better benefits to customers.

He said that the sale of share at CMF was to implement the divestment of state-owned enterprises from non-core businesses and restructuring credit system. In addition, it will also realise the bank’s plan to focus on consumption credit services as part of its retail strategy to become one of the three leading retail commercial banks by the beginning of 2017.

Nguyen Van Bien, Vinacomin’s deputy general director, announced at the press meeting in Ha Noi on Monday that the group would complete its divestment from non-core businesses by 2015.

Accordingly, Vinacomin will withdraw capital of more than VND400 billion (US$19.05 million) from four companies, including Sai Gon–Ha Noi Commercial Bank (SHB), SHB Securities Company (SHS), Sai Gon-Ha Noi Fund Management Joint Stock Company (SHF) and Hai Ha Industrial Zone.

Bien said that Vinacomin had also completed equitisation of two out of eight corporations.

Value clarification of three out of the six remaining companies has been completed and submitted to the Ministry of Industry and Trade. The equitisation plans will be submitted to the PM for approval. The companies include Minerals Holding Corporation, Power Holding Corporation and Viet Bac Mining Industry Holding Corporation, with a charter capital of VND500 billion ($23.80 million) each.

“Some strategic investors both inside and outside the country have expressed their interest in the corporations,” he added.

Vinacomin expected to sell around 10 million tonnes of its products in the April–June period and export at least 1.5 million tonnes. To realise the goal, the corporation has taken various measures to promote the production of high-quality coal, satisfying customer demand and ensuring good income for workers.

In the first five months of 2014, Vinacomin sold 16 million tonnes, down nearly 11 per cent year-on-year, and shipped over 3.7 million tonnes abroad, only 62.6 per cent of the same period last year.

Despite an array of economic difficulties in 2013, the group earned more than VND97 trillion (over US$4.6 billion) from selling 39 million tonnes of products, including 11.6 million tonnes for export.

Commercial banks lift US dollar rates

The US dollar prices climbed in the domestic commercial banks and in the flea market on June 3, while the gold prices dipped slightly in Viet Nam.

While the State Bank of Viet Nam (SBV), which recently made a commitment to stabilise the gold and forex markets, has kept the rate of VND21,036 for US$1 unchanged for the last 11 months, most commercial banks increased the dollar’s buying and selling rates between VND30 and VND50 yesterday.

Vietcombank yesterday added another VND40 to the dollar’s selling rate, raising it to VND21,220 and was buying it for VND21,160, which was VND30 higher over Monday’s last rate. According to Vietcombank, the US dollar rate increased between 0.28 per cent and 0.33 per cent during the last two weeks in the bank.

The same buying and selling rates of VND21,160 and VND21,220 respectively were applied by EximBank and VietinBank. The rates were VND21,180 and VND21,200 at the Bank for Investment and Development of Viet Nam, and VND21,170 and VND21,230 respectively at the Asia Commercial Bank.

According to SBV, commercial banks were allowed to apply an effective exchange rate + or -1 per cent from the official exchange rate set by SBV. Accordingly, the ceiling price for a dollar was VND21,246.

In the flea market, traders also raised their US dollar rate compared to June 2. At the Quoc Trinh Jewellery Company in Ha Trung Street, the most popular forex spot in Ha Noi, a dollar was listed between VND21,330 and VND21,350.

On the same day, the gold price fell by VND100,000 or $4.7 for one tael from the previous day. One tael of the State-owned SJC gold was selling at VND36.28 million, or $1,727, at the Saigon Jewellery Company. On the gold trading floor, Kitco.com, the gold price dropped by $4.4 per ounce and was listed at $1,242.9 per ounce or $1,497.6 per tael. Thus, each tael of gold in Viet Nam was nearly $230 higher than in the world market.

Vinamilk plans Polish subsidiary

The Ministry of Planning and Investment on Monday granted the Viet Nam Dairy Products Joint Stock Company (Vinamilk) a licence to open a subsidiary company in Poland.

With a registered capital of US$3 million, Vinamilk Europe Sp z.o.o will focus on the wholesale trade of animals, raw materials for making milk and milk products and food and beverages, according to NDHmoney.vn.

The company will be Vinamilk’s seventh subsidiary, including one each in the US and Cambodia.

In the last one month, the stock price of Vinamilk, or VNM on the stock exchange, closed in the margin between VND120,000, or $5.7, and VND137,000, or $6.5, per share. The average volume of exchange was 410,748 units at an average price of VND53.5 billion, or $2.54 million, per section.

HCM City, Kansai ink co-op pact

HCM City People’s Committee and Kansai region’s Economy, Trade and Industry Department on Monday signed a framework agreement on cooperation, under which they will enhance connections in support industry.

The two sides will also speed up the establishment of a business environment that can facilitate the investment of Japan’s Kansai enterprises in the support industry in HCM City.

The city has assigned its management board of industrial and export processing zones to set up a division in charge of connecting ties with Kansai and providing consultations for its enterprises.

At a meeting with the Japanese guests earlier, Chairman of the Municipal People’s Committee Le Hoang Quan announced that Viet Nam in general and HCM City in particular commits to creating all favourable conditions for foreign investors, considering them part of the country’s economy.

Toshinori Kobayashi, head of the Kansai department, and the region’s businesses, especially those operating in the support industry, are paying much attention to boosting investment in HCM City and its surrounding areas.

$9.4b earmarked for HCM City works

The Sai Gon – Ha Noi Commercial Bank will provide a credit line for the Phu My Construction Development Joint Stock Company (PMC) to develop 14 infrastructure projects in HCM City by 2020.

According to Nguyen Thanh Thai, general director of PMC, the company has plans to invest an estimated VND200.1 trillion (US$9.4 billion).

They include over VND6 trillion for a Southern Ring Road (through Districts 8, Binh Tan, and Binh Chanh), VND168 trillion for five elevated highways, and VND815 billion for the Rach Chiec Bridge.

Thai said the projects would be undertaken in several forms like build-transfer, private – public partnership, and build – operate – transfer.

The two signed a contract on Monday for a loan of nearly VND4 trillion for a road to link the Eastern Ring Road with the Ha Noi Expressway (from District 2 to District 9) and widening Luong Dinh Cua Street in District 2.

Nguyen Huu Tin, deputy chairman of the HCM City People’s Committee, confirmed that the 14 projects would have to be completed by 2020.

Central region growth in focus

Deputy Prime Minister Nguyen Xuan Phuc yesterday stressed the importance of the central coastal region in the country’s socio-economic development process, saying its potentials should be exploited in a sustainable manner.

Addressing a forum on sustainable development held by the Ministry of Planning and Investment in collaboration with the World Bank, Phuc said the region has great potential in tourism, mineral resource exploitation and deep water ports.

He advised localities in the region to combine economic development with environmental protection.

Victoria Kwakwa, the World Bank’s Viet Nam Country Director, also told the forum that localities should closely co-ordinate with each other to take full advantage of their potentials to develop infrastructure and diversify tourism products.

Other speakers shared their views on how to intensify socio-economic development while still protecting the environment, including strengthening transport infrastructure connectivity, using water resources in a sustainable manner and managing and mitigating the risks of natural disasters.

The central coastal region stretches from Ha Tinh to Phu Yen with a total population of about 9.9 million.

Phuc also met yesterday afternoon with leaders of Quang Ngai as well as several districts to talk about progress made in the project to expand and upgrade the National Highway 1 section that runs through the central province.

He asked the provincial People’s Committee to strengthen its focus on supervising land clearance to ensure the process is completed by June 30.

He also asked the officials in charge to work responsibly in supporting residents who have to be relocated because of the project. The residents should be able to enjoy stable lives after resettlement, he said, adding that for this to happen, other work related to the construction of resettlement areas, such as electricity and telecom connections, water supply and provision of other utilities, should be done well and in time.

Phuc said the Government would give a temporary loan of VND50 billion (US$2.38 million) so that the province is able to expedite the land clearance process.

He also said the Transport Ministry would propose to the Prime Minister a 19-kilometre extension of the National Highway 1.

According to Le Quang Thich, acting chairman of Quang Ngai People’s Committee, of the 197ha of land required for the project, 176ha have been cleared, which means 90 per cent of the land clearance target has been met.

Of the total of over 6,270 relocating households that need to be compensated, nearly 2,890, or 46 per cent, have already received their compensation.

He said the province was constructing 23 resettlement areas for the relocating families.

The National Highway 1 section running through Quang Ngai Province is more than 91 km long.

Thich said his administration would focus on removing obstacles to ensure that the land clearance is completed by June 30, as ordered by the Deputy Prime Minister.

Exports post 15.4 percent increase in five months

Vietnam raked in some 58.51 billion USD from its exports in the first five months of this year, a year-on-year hike of 15.4 percent, making this year’s export target feasible, said Phan Van Chinh, Director of the Import-Export Department under the Ministry of Industry and Trade on June 2.

Domestic firms brought home 19.05 billion USD from their exports, while 36.39 billion USD was contributed by foreign-invested enterprises, a surge of 18.6 percent from the same period last year.

In May alone, the export turnover rose by 3.5 percent from the same month last year to 12 billion USD. The proportion of fossil fuels and minerals in the total exports reduced, while industrially-processed and agro-aquatic exports climbed. This trend is closely aligned to the national export strategy.

Notably, two-way trade between Vietnam and China soared in the reviewed period. Vietnamese products shipped to the market totalled about 6.1 billion USD in value, or 10.5 percent of the total export figure, while the country spent around 16.1 billion USD purchasing imports from China.

In addition to boosting exports to its traditional markets, including ASEAN, the EU, Japan and the US, Vietnam continues to diversify its exports and is maintaining effort in seeking new importers in Africa and the Middle East, said Deputy Minister Do Thang Hai.

This week, the ministry will discuss measures to further boost agro-aquatic exports through expanding markets for these products and reduce the fluctuation in prices for farmers.

New gold jewelry management regulations effective

Although many gold traders have suggested extending the effective date of a new circular on jewelry quality management, the Ministry of Science and Technology still insists on applying the circular from early this month to protect the interests of consumers, a local newspaper has said.

According to the Saigon Times Daily, Circular 22/2013/TT-BKHCN, which was issued by the ministry last September and took effect on June 1, regulates management and measurement policies for the gold trading business.

Under the document, the standards of quality and measurement of the gold jewelry items traded on the local market must be written in a code with the correct gold content.

The circular aims to help reduce substandard gold products on the market and serve as a more effective legal tool for management agencies to tackle violations.

However, local traders claimed that they had been on tenterhooks as the time from the circular’s date of issuance to that of coming into force was too short for them to make necessary preparations and manage their inventory.

Nguyen Hoang Linh, head of the ministry’s Directorate for Standards, Metrology and Quality, said Circular 22 did not mention the concept of ‘inventory’ and that all jewelry items available on the market must meet quality requirements set by the circular early this month.

In the past nine months, gold traders should have finished preparations to meet requirements by the circular and solved all substandard jewelry items. Consumers had the right to choose the items with various gold contents and prices and to buy those with the correct gold content announced by producers, Linh said.

In fact, most jewelry products on the market have been made without codes indicating clear gold contents. As a result, many people pay for the gold jewelry items they believe to have sufficient gold content but when they sell the products, they receive far less money than they expect because the gold content is announced much lower.

For instance, most 18-carat jewelry whose at least 75 percent of the content should be pure gold but the real content is only 66 percent gold on the domestic market.

Therefore, Nguyen Van Dung, Chairman of the Saigon Jewelry Association, said the circular was a legal foundation to restore order on the gold jewelry and fine arts market and to protect the interests of customers.

Pilot programme helps increase agriculture connectivity

The State Bank of Vietnam, the Ministry of Agriculture and Rural Development and the Ministry of Science and Technology are considering cooperation on a pilot programme for financing connectivity models between businesses and farmers in order to promote high technology application in agricultural production and exports, the Vietnam Economic News reported on June 3.

Director of the Credit Department under the central bank Nguyen Viet Manh said that there have been many agricultural production models promoting connectivity between businesses and farmers nationwide.

A number of those have proved successful, including the large-scale rice field model in An Giang province and other localities, the hi-tech vegetable and flower cultivation one in Lam Dong province, and the dairy farming and milk product production one in Nghia Dan in Nghe An province, among others.

With those models, businesses not only created large scale rice fields and mechanised agricultural production but also had stable raw material production areas and constructed trademarks and geographical indications for their products in both domestic and foreign markets. The models benefited both farmers and businesses.

At a Government’s regular meeting in February 2014, SBV Governor Nguyen Van Binh suggested the construction of a credit programme for connectivity models and high technology application and farm export promotion projects.

Through its Resolution 14/NQ-CP, the Government assigned the central bank to work with the Ministry of Science and Technology and the Ministry of Agriculture and Rural Development to implement a pilot credit programme for connectivity models. These three institutions are working together to survey, research and construct experimental policies for a large scale application.

Manh said the pilot credit programme will reduce the input costs for the connectivity models’ products through offering preferential credit for the models. The programme could provide unsecured loans for businesses and farmers as members of a connectivity model.

With this pilot programme, the banking sector can not only increase credit growth related to agricultural production but also promote large-scale, competitive agricultural production, contributing to gradually improving farmers’ living standards and constructing and developing new rural areas.

Manh said the bank, the Ministry of Science and Technology, the Ministry of Agriculture and Rural Development and credit institutions were expected to select about 20 connectivity models as the pilot credit programme’s beneficiaries.

These include the large-scale rice field model, the product value chain-based connectivity model and the high technology applying business model, among others, with priority given to rice, seafood, livestock breeding, vegetable and fruit.

About two years after the pilot credit programme finishes, the SBV will consider policy improvements and multiplication of the models.

Manh added that agricultural insurance policies, farm produce planning and its management, farm export promotion and law-based assistance and market information are important for the pilot credit programme’s success.

HSBC: Vietnam’s PMI drops in May

Vietnam’s Purchasing Managers’ Index (PMI) was 52.5 in May compared to 53.1 in the previous month, but still signaled operation improvements at Vietnamese manufacturing firms, according to a report released by HSBC Bank and Markit Economics on June 2.

HSBC said in the report that overall business conditions in the Vietnamese manufacturing sector strengthened in May amid ongoing improvements in client demand.

Output increased for the eighth consecutive month amid another solid expansion in new business. Some panelists reported that purchasing of materials in recent months had enabled them to raise their output.

Meanwhile, production growth helped firms work through outstanding business. Backlogs decreased modestly following a rise in the previous month.

However, HSBC said the recent changes in transportation rules again impacted on the manufacturing sector in May. Suppliers’ delivery times lengthened to the greatest extent in the survey’s history as new tonnage rules meant that suppliers had to make more journeys in order to deliver the same amount of goods.

The rules also affected the cost of shipping, in turn pushing the rate of input cost inflation up for the second month running to the fastest since March 2012.

Despite a sharp rise in input costs, manufacturers left their output prices largely unchanged during the month. While some panelists reported having passed on higher cost burdens to their clients, others indicated that efforts to stimulate demand had led them to reduce their charges, the report said.

Employment also increased for the second month running in May although the rate of job creation slowed and was only slight. Higher production requirements led some panelists to raise staffing levels.

Increased output requirements also led to a rise in purchasing activity during the month. Input buying has now increased in each of the past nine months, with the rate of growth remaining solid despite easing from that seen in April.

Stocks of purchases decreased modestly as inputs were used in the production process. Stocks of finished goods were also depleted following a rise in the previous month. The rate of decline was only marginal.

Trinh Nguyen, Asia Economist at HSBC, said the latest PMI showed that the manufacturing sector in Vietnam was competitive, with activity still expanding albeit at a slower pace. The concern really is the added costs to manufacturers, which come at a time when exporters already incur high logistics costs.

“Profit margins are being squeezed, as weak domestic demand makes it hard for manufacturers to raise output prices despite rising production costs. We expect the State Bank of Vietnam to keep rates steady to support domestic demand,” she said.

HCM City announces urban design along major roads

The HCMC Department of Planning and Architecture has publicized a detailed urban architecture and landscape plan for the major streets in the city, including Pham Van Dong, Hanoi Highway and Mai Chi Tho-Vo Van Kiet.

The scale 1/2000 plan contains criteria for individuals and organizations when they plan constructions along the roads. The plan is considered an important basis for issuing the licenses for construction works along the roads in terms of height, color and architecture.

Under the plan, Pham Van Dong Street, which is also known as the Tan Son Nhat-Binh Loi-outer ring road route, stretches 15.33 kilometers and crosses Tan Binh, Go Vap, Phu Nhuan, Binh Thanh and Thu Duc districts. The design area covers 527.3 hectares.

The design plan for Mai Chi Tho-Vo Van Kiet route covers 650.96 hectares along a 13.54-kilometer section from Thu Ngu Flagpole near Khanh Hoi Bridge to the intersection between National Highway 1A and HCMC-Trung Luong Expressway. The route goes through districts 1, 4, 5, 6, 8 and Binh Tan.

The plan comprises 577.08 hectares along 14.83 kilometers of Hanoi Highway section from Saigon Bridge in District 2 to Cultural and Historical Park in District 9.

Nguyen Thanh Toan, deputy director of the department, told the Daily last week that the urban design plan would be on display at the offices of the districts where these roads go through from this month for local residents to view. Construction indexes and the level number of buildings along the roads are also available in the plan.

Toan expected the urban design plan was introduced to help reduce the number of houses which have been built in different sizes and shapes along the streets in the past years.

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

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