Vietnam steps up Aussie beef imports
Vietnam has become the second largest importer of Australian cattle, behind Indonesia, according to BeefCentral.com, a free news website and market intelligence service dedicated to the Australian beef industry.
The website said that from June 2013 to April 2014, Vietnam imported 112,982 heads of cattle. Last year, the country ranked 11th, importing 8,900 heads of cattle.
Meanwhile, Research Assistant Tess Marslen revealed in futuredirections.org.au, that demand for imported beef has increased exponentially in Vietnam due to the expansion of the Vietnamese middle class.
Marslen also said that the growing number of supermarkets and the development of meat-oriented chain restaurants have created a huge opportunity for Australia in the live-beef export market. Live buffalo exports to Vietnam are also flourishing.
The research assistant also said Vietnamese importers are currently investing in infrastructure to support the influx of Australian cattle, which are considered to be superior in quality.
Nguyen Dang Vang, president of the Vietnam Husbandry Association told local media that the increasing import of Australian beef was because beef providers in Laos and Cambodia did not have enough for exports.
In addition, Australian beef has also received better and more convenient procedures when exporting to Vietnam.
Vang said there were 72,000 Australian heads of cattle imported since the beginning of this year, predicting it would reach 150,000 by the year-end.
Khanh Hoa, Japan cooperate in tuna fishing
A modernized fishing boat made of composite materials was inaugurated at a shipyard in the coastal city of Nha Trang on August 2 in central Khanh Hoa province.
The composite VND6 billion boat is the result of a cooperation project between Japanese Yanmar Company and the University of Nha Trang Ship Institute (UNINSHIP) aimed at raising fishermen’s income and developing the tuna industry in the region.
Yanmar Company will use the 350cv boat as a model in its training courses, instructing fishermen on how to exploit tuna following advanced Japanese technology.
The Japanese company is planning to cooperate with Vietnamese partners to build 180 composite fishing boats for Binh Dinh, Phu Yen and Khanh Hoa provinces.
Online bill payment garners popularity
Vietnam is a potential market for internet banking services, as only 22% of its population possesses bank accounts.
The Vietnam Business Forum magazine quoted a source from the State Bank of Vietnam as saying that more than 20 banks in Vietnam are offering services like paying electricity and phone bills and taxes on behalf of enterprises and individuals to save time and costs.
The number of internet-banking users by the end of 2013 increased 45% as compared to three years ago, according to Vietnam Banks Association (VNBA). About 90% of banks are offering internet banking services and half of them are providing mobile banking.
The number of enterprises paying through the Internet has increased sharply in the last few years. HCM City branch of Vietnam Electricity, for example, in cooperation with 24 banks, has developed the service of collecting electricity bills, thus raising the rate of payment through banks in 2013 to 44.9% of total revenues, up 12.8 times over the pilot year of 2007.
EVN plans to offer discounts on electricity bills to any person paying bills electronically five days before it is due to encourage individuals and enterprises to use the service.
At the beginning of 2014, General Department of Taxation informed that there were 366,000 enterprises declaring taxes via the Internet. They have cooperated with banks to pay taxes electronically to 15,000 enterprises by the end of this year.
Besides electricity and tax payments, many enterprises in other fields accept transactions through internet banking. Remarkably, there are projects where the collection and managing of tuition fees is done through “SSC school card” and the e-banking service of HCM City Education and Training Department.
Seeing great potential in the market, many large banks like Vietcombank, Techcombank, VPBank, ACB and Tienphongbank have diversified their services. VPBank has concentrated on developing internet banking since 2009 and chosen it as their major business.
The bank has completed a range of functions for “VPBank online” service and coordinated with enterprises in fields of electricity, water and insurance along with aviation and consumption.
At the same time, it has also developed high class facilities like giving deposits online to enjoy attractive interest rates and collecting iCash to obtain gifts.
VPBank has also participated in a system of the first nine banks to provide inter-bank super-express money transfer of Smartlink that helps customers transfer money immediately with high limit and at low costs.
For enterprises alone, VPBank has signed up with customs, taxation and treasury bodies to implement services for collecting money for the State budget, and guaranteeing taxes for import-export goods electronically.
HCM City to host support industry mega-expo
A mega support industry event with three exhibitions is slated to be held in Ho Chi Minh City in October, promising to offer opportunities for local producers to update technologies as well as their management capacities.
Two exhibitions, Metalex Vietnam and Nepcon Vietnam, hosted by the Thailand-based Reed Tradex Company, will feature the latest machine tools and metalworking technologies and assembly, as well as measurement and testing technologies for electronics manufacturing.
The number of registered exhibitors is expected to increase by 20 percent over last year’s shows, with many national pavilions including Japan, Singapore, Taiwan, Korea, Malaysia, Germany, the UK and Thailand, the company said.
The other exhibition “Business Alliance for Supporting Industry 2014″, organised by the Japan External Trade Organisation (JETRO) in HCM City and the HCM City Investment and Trade Promotion Centre, will enable Vietnamese parts producers to meet with Japanese producers to seek business opportunities.
To take place at the Saigon Exhibition and Convention Centre from October 9-11, visitors will also be able to gain new knowledge and networking opportunities through seminars and other activities during the three shows.
The ASEAN Economic Community, which is set to come into existence next year, brings both opportunities and challenges for Vietnamese producers, said Duangdej Yuaikwarmdee, Deputy Managing Director of Reed Tradex.
To remain competitive, local companies must invest in modern technologies, he said.
Prospects for boosting seafood exports
Over the past seven months, the nation’s seafood export turnover has skyrocketed 24.5% to US$4.2 billion on-year with the US, EU, Japan, Republic of Korea and China remaining the leading import markets of Vietnamese seafood.
Not only carving out a niche in key export markets, Vietnamese seafood has established a solid foothold in the global export market, further evidenced by higher average annual growth rates than most other markets.
In recent years, the seafood industry has made every effort to improve the quality of aquatic products towards gradually shifting from price competition to compete in quality.
According to the Vietnam Association of Seafood Exporters and Processors (VASEP), shrimp product has a dominant role to play in stimulating seafood exports Especially white-leg shrimp exports to the US and the RoK have posted double even treble digit growth.
In the first half of this year alone, white-leg shrimp exports rose 133% to US$1.06 billion, bringing total shrimp export revenues to nearly US$1.8 billion (up 62%), accounting for 49.5% of seafood export value. Meanwhile, shrimp output doubled from last year’s same period in which white leg shrimp output soared by 400%.
Ministry of Agriculture and Rural Development (MARD) Directorate of Fisheries Deputy Head Nguyen Huy Dien has attributed the good performance of shrimp exports to stable raw material sources and efforts to keep epidemics under control.
Prawns are still a dominant export item of Vietnam compared to other products as the country is now seen as the largest producer of black tiger shrimp in the world with stable output. High prices of tiger shrimp in the global market, particularly in Japan have helped tiger shrimp exports maintain strong growth and the Japanese market as the top market for this product with a high growth rate of 3%.
In addition to shrimp, squid, octopus, crabs and other crustaceans also are experiencing relatively high growth (14-21%) thanks to growing import demand.
On the market structure, the US remains the top export market of Vietnamese seafood, accounting for 23% of total exports and this market tends to import more Vietnamese shrimp products. Seafood exports to this lucrative market are forecast to rise 37% over the same period in 2013.
Besides, the EU continues to be the second largest market for Vietnamese seafood imports, constituting nearly 18% of total export turnover. According to VASEP, Vietnam is fully able to expand EU markets because of high shrimp export growth.
Along with black tiger shrimp, white leg shrimp exports have increased dramatically in the EU market, making Vietnam become the third largest shrimp supplier after India and Ecuador.
The Republic of Korea, ASEAN and Australia are also considered potential markets for Vietnamese seafood exports. Typically, the Korean market has regained fourth place among individual seafood importers from Vietnam with a high growth rate (51%) after being relegated in 2013.
The RoK is also Vietnam’s largest squid octopus import market, making up 40% of total octopus export value.
With the higher growth of Vietnamese seafood products in tandem with growing global market demand, VASEP predicts that seafood exports will pick up in the third quarter to meet demand for year-end festive months.
Seafood export turnover is set to reach US$2.1 billion including US$1.2 billion from shrimp, 25% higher than the comparable period last year.
According to Hai Vuong Company Ltd Quality Control Director Nguyen Cong Bay, post-harvest tuna quality is still the thorny problem for the tuna industry.
Despite high tuna catching output, the quality is not up to export standards set by demanding markets such as the EU, Japan, resulting in an increase in canned tuna exports increase and a drop in fresh and frozen tuna.
To deal with this issue, the MARD will launch pilot projects to exploit, purchase, process and consume tuna based on value chains in three key tuna production localities- Binh Dinh, Phu Yen and Khanh Hoa to ensure the quality of tuna products.
In terms of shrimp breeding, Vietnam has effectively controlled epidemics evidenced by its efforts to quickly control early mortality syndrome (EMS) in shrimp.
However, Vietnamese shrimp exports are facing challenges in the Japanese market after Japan decided to closely inspect the quality of 100% of shrimp batches imported from Vietnam for Oxytetracyline which will affect shrimp exports to this market this year.
The Directorate of Fisheries has worked hand in hand with local inspection agencies to check the use and trading of substances that are banned for limited by import markets and provide farmers with recommendations and guidance on how to ensure the best quality in the breeding process.
Not only the Japanese market but also many other seafood export markets are imposing new non-tariff barriers targeting product quality management, particularly in the breeding, exploiting and processing process.
With strict regulations on the breeding and processing process stipulated in Decree 36, Tra fish export products are required to best meet all requirements of the global marketplaces including the US and EU which account for the lion’s share of Vietnamese catfish exports. Under the Decree, commercial fish production will be certified by good aquaculture practice VietGAP or have international certifications.
Accordingly, all Vietnamese seafood frozen processing facilities must subject to standards and conditions on food hygiene and safety and have advanced quality management systems HACCP eligible for exports to all countries from around the world.
Vietnam now has 415 seafood processing plants, accounting for over 73% of the total number of seafood processing plants on an industrial scale capable to export to Europe.
In order to better meet export market demand, the fishery industry has promoted trade promotion activities and trademarks to achieve greater market penetration for higher consumption.
From early this year, VASEP has facilitated business participation in a host of seafood fairs abroad such as Japan Foodex Fair, Seafood Expo North America (SENA), and Busan International Seafood Fisheries Expo with the aiming of promoting Vietnamese seafood to the global market.
In addition, the fishery sector has negotiated with foreign partners on the signing of memorandums of understanding on cooperation between agencies to settle commercial disputes or remove trade barriers and facilitate export promotion activities.
PM proposes reviewing Vinalines’ case
The Prime Minister has asked the Chief Judge of the Supreme Court to deal with a proposal from State-run shipping corporation Vinalines in accordance with applicable legal and regulatory requirements.
In a recent document sent to the Government Office, Vinaline said the ruling made by the Vietnam International Arbitration Centre (VIAC) on December 28 was unlawful, violating the Law on Arbitration and causing serious damage to Vinalines’ legitimate rights.
Earlier, in another document sent to the Prime Minister and relevant ministries, Vinalines expressed a desire for early consideration from the Hanoi Court to cancel VIAC decision.
In its ruling early this year, the VIAC declared that Vinalines had to pay US$3 million for a lot of 544 piles of the International Van Phong transhipment port project contracted by a Korean investor before the project was stopped at the request of the Government.
However, Vinalines insisted import price of this lot is about VND50 billion. If calculating the value of 244 piles after verification, they are priced at only VND22 billion not VND115 billion as the contractor estimated and the arbitrator recognized.
The actual amount is equivalent to 25% compared to more than VND87 billion the corporation had advanced to the contractor, it said.
The corporation affirmed that the VIAC ruling forcing it to pay the contractor the above amount when the project has not yet been finalized without payment records is contrary to Vietnam’s legal regulations.
A Vinalines representative on August 2 said that the court has yet to announce a specific schedule to consider this case while a VIAC source said the case is expected to be put for trial right this month.
Vietnam ascending to world’s largest coffee exporter
In the staunchly competitive coffee industry, leading economists forecast Vietnam is set to become the world’s largest coffee exporter, providing the Southeast Asian nation can surmount its shortcomings.
The Ministry of Agriculture and Rural Development (MARD) reports Vietnamese coffee exports in the seven months leading up to August jumped 26.9% in volume and 21.9% in value on-year.
The country shipped a total of 1.12 million tonnes of coffee beans to foreign markets during the period grossing US$2.31 billion in revenue at an average sales price of US$2,043/tonne, 4.84% lower than the previous year’s figure.
Key coffee importers included Germany and the US with Belgium doubling its coffee imports over last year’s figures.
In recent years, coffee has been one of Vietnam’s key export items achieving high revenue. The local coffee industry aims to record higher export growth in the future, with about 95% of its output being shipped abroad.
Currently, Vietnam is the world’s largest exporter of Robusta coffee. It ranks second in coffee export volume and third in value. Economists say Vietnam is on a path to becoming the world’s largest coffee exporter within the next few years.
According to a recent report on exports by the Ministry of Industry and Trade (MoIT), Vietnamese coffee has sharpened its competitive edge thanks to favourable climate conditions, lower-cost production and a bumper coffee crop. However, product quality remains low due to out-dated harvest technology and poor processing facilities.
Additionally, Vietnamese coffee suffers from lack of brand name recognition as local exporters’ marketing skills are still limited and over 90% of coffee products are essentially raw unprocessed materials with low added value, MARD reports.
With such disadvantages, Vietnamese coffee’s export price is lower than the world’s average. Nevertheless, thanks to its firm foothold in the global market, Vietnam holds great potential for improving its coffee quality and recording higher export turnover.
Economists suggest Vietnam improve its production chain and distribution networks, from producing, processing to marketing processes, in order to increase export value for Vietnamese coffee.
Nguyen Thi Thu Hang, a senior advisor in export evaluation and capacity building for small-and-medium-sized enterprises, raises her concern over the shrinking coffee cultivation area as aging coffee trees are becoming prevalent and irrigation networks stay outdated, she says.
the local coffee industry should increase product quality by investing more in research, post-harvest technology, and processing facility. It is also equally essential to apply sustainable standards for coffee production and supply high-quality products on request despite low consumption, she says.
Other experts recommend the industry more effectively control coffee growing areas to avoid an imbalance between supply and demand. Coffee farmers should also be required to follow a strict protocol to meet rising requirements of consumers.
The general consensus of industry experts is sustainable coffee export growth will only be achieved if domestic coffee producers, processors and exporters, increase product quality in line with international standards.
Action plans to realize industrialization strategy adopted
Prime Minister Nguyen Tan Dung has approved four action plans to implement Vietnam’s industrialization strategy within the Vietnam-Japan cooperation framework by 2020 with a vision for 2030.
These four plans include developing the electronics industry, developing the agricultural machinery industry, developing the agricultural product processing industry, and developing the environment and energy saving industry.
The country has set a target of developing the electronics industry with advanced technology, high labour productivity by 2020 to be able to compete in the regional and global markets, making major contributions to the national economy and national industrialization and modernization.
It aims to produce high added value electronic products of advanced quality standards for exports and domestic consumption.
By 2020, the production value of the electronics industry is projected to increase at least by 20% annually and contribute a minimum of 10% to the total production value of the industry, being included in the list of the top ten industries recording the highest growth rate.
Vietnam is striving to become a major producer of electronic equipment with smart and environmentally friendly technologies.
To reach this goal, six strategic issues should be focussed, namely developing support industries, developing human resources, expanding the domestic market, attracting investment from the world’s leading electronics businesses, developing key products and establishing electronics industry clusters.
To encourage farmers to use agricultural machinery, manufacturers should supply agricultural machines based on the real needs of farmers. Ministries and agencies will carry out agricultural machinery support programmes to meet farmers’ requirements for quality and ensure a healthy agricultural machinery business environment.
This action plan is designed to modernize Vietnam’s agriculture by 2020 by increasing total agricultural output from US$220 billion in 2010 to US$430 billion in 2020 and per capita income to US$3,000.
Agriculture will constitute 15% of GDP; labour productivity will rise from US$740/person in 2010 to US$2,000/ person in 2020; the rate of workers in the agro-forestry-fishery sectors will reduce from 49% in 2010 to 30-35% in 2020.
The country will target towards becoming a high quality agricultural product producer for exports and domestic consumption and define 3-5 agricultural and fishery products that can promote the image of Vietnamese trademark. Accordingly, typical items-rubber, coffee, tea, shrimp and fruit vegetables-will be targeted.
The role of businesses will be enhanced in strengthening production-market connectivity and insuring their products are certified by VietGap, GlobalGap, and Rainforest.
The environmental and saving energy industries are expected to become major industries by 2020 which can meet requirements for environmental pollution treatment and sustainable energy.
The goal of the plan will be pivoted on improving incentive mechanisms and policies, intensifying inspection and supervision to raise awareness and law enforcement capacity, applying advanced technologies in environmental remediation and energy saving and encouraging all economic sectors to attract foreign investment in this field.
Exports to Russia nearly double
Russia is an attractive Vietnamese export market thanks to incentive policies on tariffs and strong consumer demand.
In the first half of the year, Vietnam’s exports to Russia skyrocketed 92.72% year-on-year to US$797.2 million, according to the General Office of Statistics (GSO).
Vietnam exported mainly mobile phones and spare parts, garments and textiles, coffee, footwear, computers and electronics.
Exports of machinery, tools and spare parts experienced high growth rates.
To boost exports to Russia, Vietnamese businesses need to adapt themselves to standards this market requires, grasp market information and have access to tax and financial agencies, and banks in the country of residence to learn more about their support policies.
Japanese firms eager to invest in Binh Duong
A delegation from Japan’s Akita prefecture led by its Vice Mayor Iwasawa Michitaka arrived in Binh Duong southern province on August 1.
Provincial People’s Committee Chairman Le Thanh Cung said the province had decided to solicit the assistance of Japanese foreign investors to improve technology and product quality and sharpen competition in the domestic market.
Cung added the provincial leaders have always strived to timely remove difficulties for foreign investors, and create the most favourable conditions for them to develop production effectively and efficiently.
Professor Umehara Katsuhiko from the Akita International University Centre for East Asia said he was impressed with the rapid development of Binh Duong province over the past few years.
“Binh Duong has made tremendous progress and is on the path to becoming a modern and industrialized city in the near future, he said adding, “Japan is delighted for the opportunity to play a pivotal role in the city’s development.”
Professor Katsuhiko said he will introduce Vietnam, especially Binh Duong province to Akita prefecture’s business community with the aim of strengthening cooperation between the two localities in the near future.
For his part, Vice Chairman Cung said Binh Duong has 2,317 foreign-invested projects capitalised at US$19.834 million from 39 nations and territories around the globe. Japan leads the pact with 220 projects with investment at US$4.7 billion.
In addition, the province has received support from Japan’s ODA source to effectively implement infrastructure projects on drainage and environment.
Mekong Delta provinces seek new outlets
Can Tho will take the leadership role in coordinating a drive by Mekong Delta provinces to forge new overseas export markets, laying a productive foundation for future thriving economic expansion.
Can Tho Investment, Trade and Tourism Promotion Centre Director Nguyen Khanh Tung made the comment at a seminar on August 1, discussing plans for economic development of the Mekong Delta region.
The provinces of Ben Tre, Can Tho and Kien Giang are making final preparations to attend an international trade fair entitled Accenta in Flanders, Belgium from September 6-14. Approximately, 46 businesses from Can Tho city have signed up to display their products on a 1,000 sq.m area at the fair.
The provinces are also finalising plans to participate in conducting a market survey in the cosmopolitan metropolis of Dubai and in the Middle East’s largest building and construction exhibition, Big 5 Dubai 2014.
Meanwhile, southernmost Ca Mau province will join Seafood Japan and the Fine Food fairs in Japan, promote investment and tourism in Australia and take part in Worldfood Moscow 2014, Russia.
Kien Giang province is attending an international autumn tourism exhibition in Russia and a number of events in Singapore and China.
The region’s export turnover in the first seven months of the year reached US$6.4 billion, up significantly, 233 million over the same period last year.
Meanwhile, the Vietnam embassy’s overseas trade offices are keeping Mekong Delta provincial authorities and businesses updated with the latest information on economics, trade and market developments in the resident countries to assist in their efforts to develop new outlets.
Local exporters keen on Chilean market
A seminar was held in southern Dong Nai province on August 1 to shed light on specific aspects of the Vietnam-Chile free trade agreement (FTA) and discuss opportunities to boost exports in the Chilean market.
Speaking at the seminar, Chilean Vice Ambassador to Vietnam Alvaro Guzmán said his country is seeking opportunities for partnering with Vietnamese businesses in agriculture, garment and textiles, footwear, food, tropical fruits, handicrafts, and consumer products.
He emphasised that Chile is a gateway for Vietnamese exporters to access and expand operation in the South American market.
The Vietnam-Chile FTA, which took effect as of January 2014, has created a wealth of opportunity for local businesses to promote exports to the Chilean market and tariffs have gradually been reduced to 0% on most Vietnamese exports.
Ngo Van Phong, a senior official from the Ministry of Industry and Trade, in turn said tax reduction and exemption after the two countries’ FTA came into effect have helped Vietnamese goods raise their competitiveness.
This is also an excellent opportunity to attract foreign investors to Vietnam, he added.
Phong suggested local exporters study contents of the bilateral FTA carefully before attempting to penetrate the Chilean market. It is also essential to increase exchange with Chilean businesses and those from third countries to thoroughly grasp market information, he said.
According to the Vietnam-Chile FTA, both sides will remove tariff barriers for more than 9,000 products subject to different roadmaps, and offer many investment incentives to service areas over the next three years.
The agreement, however, has many important regulations on market access, rules of origin, quarantine, technical barriers, cooperation, and technical defence that must be complied with and carefully studied.
Vietnam, Brazil see booming trade
Two-way trade between Vietnam and Brazil jumped 18% on-year for the first six months of 2014 tallying in at US$1.275 billion, according to the Brazilian Ministry of Development, Industry and Foreign Trade.
For the first-half of the year, Vietnamese export revenues from Brazil surged 33.3% to hit a record US$732.6 million, while its imports from the country edged up slightly by 2.2% to US$542.5 million.
Vietnam’s major exports to Brazil were telephone accessories , footwear, frozen fish fillets,synthetic fibre, and integrated circuits. Brazil mainly shipped corn, soybeans, soy products, cotton and tobacco materials to the Vietnamese market.
Bilateral trade surged despite the fact that overall trade exchange between Brazil and foreign countries saw a sharp decline of 3.6% to US$223.6 billion during the period, the Brazilian Ministry reported.
Statistics from the ministry also showed that last year’s two-way trade hit US$2.33 billion in 2013, solidifying the South American country’s position as Vietnam’s largest trade partner in Latin America.
Outstanding livestock businesses to be honoured
The forthcoming International Feed, Livestock and Meat Processing Show (Vietstock 2014) will honour outstanding businesses for actively taking part in the development of husbandry industry, particularly the livestock value chain in Vietnam.
The information was announced by Hoang Thanh Van, head of the husbandry department under the Ministry of Agriculture and Rural Development, at a press conference in Hanoi in early August.
Fourteen awards will be presented to the best-performing livestock enterprises in cattle and poultry farming, animal feed production and milk processing according to M.Gandhi, Managing Director of UBM ASEAN Company, the event’s organiser.
Themed “Restructuring the Livestock Industry for Sustainable Development”, the expo expects to draw over 250 domestic and foreign businesses showcasing the latest products, technologies and equipment in the field.
A number of workshops highlighting opportunities and challenges for the husbandry sector when the Trans-Pacific Partnership (TPP) agreement is signed as well as cattle health and nutrition will shape part of the event.
The expo, the 7th of its kind, will take place on October 15-17 in Ho Chi Minh City in conjunction with the Vietnam International Feed Industry Show (VietFeed) and Vietnam’s Meat Processing and Packaging Industry Event (VietMeat).
Rice export price stands high
In late July, 5% broken rice was selling at a record high of US$460-470 per tonne while 25% broken rice hit US$405-410 per tonne.
According to the Vietnam Food Association (VFA), Vietnam exported more than 615,000 tonnes of rice in July, fetching US$264.6 million, bringing the cumulative rice export volume this year to 3.6 million tonnes, grossing US$1.56 billion in revenue.
VFA attributed the uptick in the sales price of rice directly to increased demand in the Philippines and Malaysia.
To cope with the new movement, the VFA decided to raise the ceiling export price to US$410 per tonne for 25% broken rice as from July 28, US$45 higher than previous level applied as from July 2013.
RoK-invested mobile phone equipment plant inaugurated
The Republic of Korea’s Power Logics Vina company has inaugurated a factory manufacturing mobile phone spare parts in the northern province of Vinh Phuc after over six months of construction.
Covering 2.3 ha in Vinh Yen city’s Khai Quang industrial zone, the factory is designed to produce around 4.8 million tonnes of pieces per month.
At present, the company is providing stable jobs for 500 workers.
In the first half of this year, Vinh Phuc was among top localities nationwide in attracting foreign direct investment (FDI), with 18 projects worth 182.1 million USD.
Most FDI projects in the province are in support and hi-tech industries.
Dak Nong: aluminum plant asked to be complete by year end
Investors and contractors of the Nhan Co Aluminum project in the Central Highlands of Dak Nong have been asked to put the plant into trial operation by the end of 2014.
The request was made on July 31 by a working mission of the steering committee for the implementation of bauxite plants in Central Highlands under the Ministry of Industry and Trade while inspecting the project’s progress.
According to the project management board, to date over 12 trillion VND (564 million USD) has been poured into facilities, accounting for 73 percent of the total investment (16.8 trillion VND). However, the progress is one and a half years slower than schedule.
All imported equipment and over 80 percent of locally-made ones have been transported to the project site for installation.
Head of the ministry’s Heavy Industries Department Nguyen Manh Quan acknowledged efforts of the Vietnam National Coal and Mineral Industries Group (Vinacomin) – the project’s investor – as well as the local authorities in the implementation of the project. He asked investors and contractors to mobilise all resources to complete the project on time.
Nhan Co Aluminum Plant is the largest bauxite project in the Central Highland region. It is designed to produce 650,000 tonnes of aluminum a year in the initial period, using advanced and environmentally-friendly technology.
The plant is expected to boost economic restructuring and socio-economic development of Dak Nong and the whole region.
Rising rice prices thrill Mekong Delta farmers
The recent rice export contracts won by some companies forced rice prices up in late July and made the market in the Cuu Long (Mekong) Delta very busy to farmers’ delight.
Tran Van Het, a farmer in Vinh Long Province’s Tam Binh District, said paddy sold for VND5,300 per kilogramme at the field on July 28, compared with VND4,300-4,500 a month ago. He added that many farmers would like to sell part of their harvest (of the summer-autumn crop) to pay off for inputs they had bought for the last crop and to shop ahead of their children’s new school year.
Paddy/rice markets are reportedly bustling in areas near towns and cities like Can Tho, Dong Thap, Tien Giang, and Long An. A trader said the recent rice export deals signed by traders and their purchase of large volumes of paddy/rice also for border trade with China are the main reasons for this.
But experts reject the latter claim, saying the border trade is not large enough to have much impact on rice prices in the Mekong market.
They attribute the rising prices solely to the many rice export contracts signed recently.
According to figures from the Viet Nam Food Association (VFA), in 2014 exports have been over 3.34 million tonnes for around US$1.5 billion.
In the delta, dried normal paddy on July 28 sold at VND5,750-5,850 per kilogramme, up VND300 from early July, and long-grain varieties for VND6,000-6,100, up VND700 from two months ago.
This is in contrast with past years when prices of summer-autumn paddy dropped during harvest, enabling exporters to buy paddy/rice to execute their export contracts.
The VFA said some local companies have signed contracts to export to the Philippines at $370 per tonne, but now prices of 5 per cent broken rice have reached $460.
Exporters who have to buy rice now are set for major losses.
Experts forecast Viet Nam’s rice exports to reach 7 million tonnes this year. As a result, domestic prices are likely to rise further later this year. But farmers will not benefit much since many of them sold out their stocks in the first half of the year when prices were low.
Now a number of farmers in An Giang, Long An, and Dong Thap say they are “storing up paddy to wait for higher prices.”
Dong Nai pulls plug on 8 delayed foreign projects
In the first seven months of the year, Dong Nai Province authorities have revoked licences issued for eight foreign projects with a combined registered capital of US$86 million.
Mai Van Nhon, deputy head of the province’s industrial parks management, said despite favourable conditions and support from authorities, the projects had been delayed for 12 months.
Work on many of them never started while official agencies were unable to contact the investors of some others, he said.
Due to financial problems, the joint-venture NippoVina failed to begin construction in Bien Hoa IP No 1. The land allotted to it was being used as a parking lot and workshop and tax authorities had not been informed about it.
Kyung Rim Vina in Dinh Quan IP faced a similar situation. In May 2014 the investor returned the land to the authorities and informed them about the suspension of plans, Nhon said.
Last year Dong Nai had cancelled 17 FDI licences.
Authorities are also considering revocation of licences issued to more delayed projects. “We have a list of 47 delayed projects,” Nhon told weekly newspaper Vietnam Iinvestment Review.
Many of them had failed to contribute to the province’s socio-economic development and pay employees’ salaries and social insurance premiums, he said.
“Dong Nai aims to attract FDI projects that can contribute to its coffers and create jobs.”
Provincial authorities were determined to scrap the delayed projects and created a more liberal investment environment and more favourable conditions for foreign investors, he said.
Da Nang tourist visits rise despite East Sea tensions
Da Nang has felt the impact of the East Sea tensions, with the number of Chinese tourists plummeting to 50,000 in the first six months from 68,226 in the same period last year, a decrease of 26.7 per cent.
In the second quarter, the central city welcomed 177,616 foreigners, representing a slight fall of 2 per cent.
However, compared to the first half of last year foreign arrivals were up by 17 per cent as was the number of domestic tourists, according to a report from CBRE Viet Nam.
The East Sea tension caused the cancellation of 14 out of 15 charter flights between China and Da Nang, but the number of visitors coming from other countries has been steadily improving.
Korean Air has increased its frequency from four flights a week last year to seven now, and a direct service between Tokyo and Da Nang began on July 16 with four flights a week.
Direct flights from Kuala Lumpur will also resume at the end of August.
Duong Thuy Dung, associate director, head of research and consulting department at CBRE Viet Nam, said positive signals in international flight routes promised a rise in international arrivals that could make up for the loss of Chinese visitors.
“To some extent, losing Chinese guests in recent months will be an opportunity for the Da Nang hospitality market to refocus on other tourist markets in the region and strengthen links with traditional markets such as the EU, US, and Australia to [become] more diversified,” she said.
In terms of supply, since 2011 four-star hotels has seen the fastest growth rate of all segments. By the second quarter of this year four-star room supply had increased by four times since 2011 to surpass the five-star segment.
The rapid development of the city in recent years has helped this segment dominate the market. However, in the near future beachfront hotels will come to lead the market.
In 2014 and 2015, an expected 1,698 new beachfront hotel rooms will hit the market compared to 652 city hotel rooms. Most of these will be in three- and four-star hotels. There will also be new rooms in five-star hotels, but due to the longer construction process these will not be ready until 2016 or 2017.
Fund offers housing loans to needy
The municipal Housing Development Fund yesterday said that it had disbursed VND610 billion ($29 million) to over 1,900 low and middle income earners after 10 years of operation.
In addition, the fund has also provided loans for nine housing projects in the city. More than 4,800 households were given loans to repair and upgrade their houses with total of VND71 billion ($3.3 million).
The fund was asked to increase the lending level from the current VND400 million to each household to make it easier for people to access loans.
Cat Lai Port to divert ships as congestion hinders trade
Transport Minister Dinh La Thang has met Cat Lai Port operators in Ho Chi Minh City to seek solutions to a pile-up of inward and outward container cargo.
Congestion at the port is already said to be hindering export and import business.
At the meeting, it was decided to reduce the long line-up of goods containers by diverting some of the container ships to alternative destinations in the vicinity of Cat Lai.
One operator, Nguyen Ngoc Quynh, deputy general of Sai Gon Premier Container Terminal, said her company could handle an additional of eight or 10 shipping vessels per week.
Deputy general of Sai Gon Port, Vo Hoang Giang, recommended using Cai Mep-Thi Vai International Port in the southern province of Ba Ria-Vung Tau.
The port, now running under capacity, has appeared less attractive to shippers since it costs an extra VND2-3 million (up to $US140) to ship a 40ft container through the port.
Sai Gon Newport Corporation, which operates Cat Lai Port, will request shippers to load containers within a certain time.
Inbound traffic using the port for transit will be blocked until any congestion subsides.
The port will stop taking containers from surrounding ports in Ho Chi Minh City and Ba Ria-Vung Tau Province from early this month, but still accept containers from other ports under Sai Gon Newport Corporation’s management.
The meeting was told that the delay of goods and extra storage payments at Cat Lai Port had pushed up the price of imports and exports in Ho Chi Minh City.
Cat Lai Port normally handles more than 80 per cent of goods going in and out of Ho Chi Minh City and neighboring provinces.
According to Sai Gon Newport Corporation, the severe congestion at the port was caused by container vessels arriving and leaving later than expected.
Customs authorities have also begun applying new e-customs clearance procedures and the Government has tightened control over the loading of trucks nationwide.
The Ministry of Transport will work with the Ministry of Industry and Trade, the Ministry of Finance, and local authorities in southern provinces early this month to ensure congestion is relieved.
Land rights office to launch soon
The Ministry of Natural Resources and Environment is rushing to complete the legal framework for the launch of the one-shop registration office for land use rights nationwide by the end of 2015.
According to the ministry, the office would be an important step in land management. The model would be necessary and needed to be implemented in all provinces.
The pilot project was carried out in four provinces including Dong Nai, Hai Phong, Da Nang and Ha Nam in 2012.
Banks hold more risk funds
Some commercial banks had more risk provision funds than before to secure the banking system and fight bad debts, State Bank of Viet Nam’s Governor Nguyen Van Binh said.
According to Thoi Bao Kinh Doanh (Business Times), An Binh Bank’s Q2 financial report showed that the bank raised the sum for risk funds in H1 this year by 10 times to VND107.64 billion (US$5.1 million) from VND11.54 billion ($540,340) in H1 last year.
The larger risk funds trimmed An Binh’s pre-tax profit in H1 by 80 per cent to VND170.35 billion ($7.997 million) from VND214.36 billion ($10.06 million) in the same period last year.
Vietcombank, one of the country’s largest four banks by assets, spent merely half of pre-tax profit, equivalent to VND2.4 trillion ($108.6 million), to build risk provision funds in the first six months of this year.
VIB transferred 75 per cent of pre-tax profit, or VND447 billion ($21 million), to risk funds in H1.
“If banks insist on credit growth by any means without proper risk provisioning, they will have both bigger profit figures and higher risks at the same time,” said VIB’s general director Han Ngoc Vu.
Market observers said that although several banks spent more on risk provisioning, they could not precisely describe the system. However, these moves indicated an increasing attention of credit institutions to ongoing bad debt problems.
The bad debt ratio in Vietnamese commercial banks rose in the first half of the year to 4.84 per cent by late June 2014 from 3.61 per cent by late 2013. The SBV reported last week that total bad debts stood at VND240 trillion ($11.3 billion).
Experts said that the motivation behind the banks moving toward risk provisioning was to get themselves more prepared ahead the official implementation of new debt regulations in Circular No 09/2014/TT-NHNN by the central bank.
The circular on the classification of bank assets, setting up of risk provisions, and use of provisions against credit risks forces an increase in risk provisioning. The document allowed banks to continue restructuring existing loans and keep them in the same debt group until April 1, 2015 instead of reclassifying them using more rigorous standards by June 1, 2014 as planned previously.
In Viet Nam, debts are classified in five groups based on their risk status: Standard Debt, Debt Needing Special Attention, Subprime Debt, Doubtful Debt, and Potentially Irrecoverable Debt.
While the Government, the State Bank of Viet Nam and commercial banks are attempting to fight bad debt problems through new regulations on debt classification, they are also seeking ways to boost lending without assets as collaterals. The efforts to boost non-collateral loans leave bad debts in question.
The central bank in the document No 5342/NHNN-TTGSNH dated July 24 urged the Credit Information Centre (CIC), corporate rating agencies, and internal creditworthiness bodies at credit institutions to build up a comprehensive and consistent creditworthiness assessment system.
The SBV said that a better creditworthiness rating system will simplify paperwork of loan applications and improve the capacity of lending enterprises without assets as collaterals. The move was made keeping in mind Viet Nam’s 12 per cent credit growth in 2014 which is likely to rest on the second half. Banks are struggling to increase lending, which is indicated through a low credit growth of only 2.3 per cent in the first six months.
Investor caution keeps trades low
Shares ended lower with sluggish trading on both national stock exchanges last week as investors displayed a cautious psychology due to their receiving mixed information.
The VN-Index on the HCM City Stock Exchange lost an accumulative 1.04 per cent to end Friday’s session at 593.9 points, while the HNX-Index on the capital city’s bourse dropped 0.52 per cent to 79.01 points.
Both bourses witnessed falling liquidity reaching alarmingly low levels, according to VietstockFinance, with trading volume by matching having declined 17.4 per cent over the previous week, to 361.2 million shares on the southern bourse and 15.1 per cent, to a modest 174.7 million shares on the northern exchange.
An average 76.9 million shares were traded per session, at an average trading value of VND1.39 trillion (US$65.5 million) on the HCM City Stock Exchange, respectively 17 per cent and 12 per cent lower than the previous week.
The average trading value on the Ha Noi Stock Exchange fell by 25 per cent to VND421 billion ($19.8 million) on the exchange, at an average 36.3 million shares per day.
Also, large-cap stocks largely affected the benchmark indices’ gains or losses last week.
The market showed little reaction to recent petrol price cuts, opening last week with losses after a sell-off occurred on a large scale before rebounding on Tuesday.
Stock analysts said the gains on Tuesday were only a technical rebound, as the benchmark indices were mainly reliant on blue chip stocks to post gains and trading remained sluggish during the session.
Additionally, the news that Moody’s raised Viet Nam’s credit rating did not have a large impact on the market, as trading remained sluggish with low liquidity through Friday. Even Thursday’s news that the benchmark indices, fuelled by blue chips, had ended higher did not have an impact on the market.
Also, foreign investors finished as net buyers of VND92 billion ($4.4 million) on both bourses last week, if the net selling of VND475 billion ($22.4 million) of Vingroup (VIC) was excluded.
On the HCM City Stock Exchange, foreign investors bought into Hoa Phat Group (HPG), Sacom Investment and Development Corporation (SAM), World Mobile Investment Corporation (MWG), PetroVietnam Drilling Corporation (PVD), Bao Viet Holdings (BVH) and PetroVietnam Gas Corporation (GAS), while selling VIC and Masan Group (MSN).
Many stock analysts provided negative technical views of the market this week, saying that the benchmark indices might continue to fall.
Ban Viet Securities noted that both benchmark indices would challenge 580 points and 77.5 points this week, warning investors to reduce buying activities while lowering the holdings of stocks in their portfolios.
According to Bao Viet Securities, technically, the market rebound was of a low possibility, saying that the market might encounter losses or end flat this week, regardless of gains from blue chips.
Stocks would continue to be divided by corporate earnings to be released during this week. However, the impacts would not be huge, according to Tran Duc Anh, a stock analyst from Bao Viet Securities.
BUSINESS IN BRIEF 5/8