New boost given to support industry
A number of incentives to boost the development of the support industry have been introduced, under a recently approved decree.
According to Decree No. 111/2015/ND-CP, organisations and individuals who study and work to develop prioritised support industry products under the Support Industry Development Programme will be eligible for financial and land incentives.
Those involved in technology transfer in the prioritised support sectors will also get incentives.
In addition, individuals who participate in the Support Industry Development Programme will be trained at home or abroad to enhance their abilities.
The prioritised support industry products will be introduced in a national trade promotion programme, receive financial support for brand name registration, and participate in international and domestic trade fairs.
The decree will take effect from January 1, 2016.
Mekong River Delta enterprises prepare for TPP
Joining the TPP presents opportunities for enterprises in the Mekong River Delta to expand their markets and enhance their competitiveness, but it also means they will face tougher competition.
The region’s more than 50,000 enterprises work in a wide range of fields. They account for roughly 10 percent of the country’s total enterprises.
A majority of them export rice, aquatic products and seafood – key export products of Vietnam in markets involved in the TPP agreement.
According to Vo Hung Dung, director of the Vietnam Chamber for Commerce and Industry’s branch in Can Tho, the TPP deal could allow the region’s agro-fishery products to enter big markets in the bloc, thanks to preferential tariff policies.
Besides, the partnership also facilitates their access to modern, advanced technologies in agricultural production through cooperation with international partners from TPP countries – especially Japan, Dung said.
However, they will also be subject to a number of negative impacts, the expert said, pointing to disadvantages for domestic firms, who often have out-of-date technologies, weak management capability and low competitiveness compared with big foreign investors in Vietnam and the region.
Besides, a majority of the local workforce are rural workers with limited occupational skills and foreign language competency, he said, adding that the local retail market has also been seriously affected by the domination of import products from TPP nations.
Vice Chairwoman of the Association of Enterprises in Soc Trang province Ma Thi Thanh called on local enterprises to restructure their operations to develop sustainably and actively.
They should also reorganise their production process, building their human resource capabilities and reduce production costs to enhance competitiveness, she said.
With the same point of view as Thanh, An Giang Fruit Vegetables Foodstuff Joint Stock Company (ANTESCO) Chairman Huynh Quang Dau stressed the need for domestic enterprises to prepare for strict competition in the integration period.
His company focused on training employees – especially managerial staff – by enrolling them in training courses at home or study abroad programmes in a bid to meet requirements for integration.
Meanwhile, Central Institute of Economic Management (CIEM) Director Le Dang Doanh attached significance to links among enterprises, farmers, exporters and importers, banks and research institutes to ensure effective competition in TPP markets.
Additionally, enterprises in the region should invest more in human resource development, technology application and product quality improvement to meet international label, food and labour safety standards, Doanh said.
The Mekong Delta has been endowed with a diversity of waterway systems, which transport a majority of the region’s cargo. However, most sea port in the region are of small scale and fail to meet the local demand.
According to the Vietnam Association of Sea Ports, the delta has seen an annual average increase of 6.1 percent for cargo transported through local ports, but total cargo throughput of the region’s sea ports accounts for just 3.71 percent of the national sea port system. In addition, a large amount of transit goods from Cambodia have to go through the region to Ho Chi Minh City or Ba Ria- Vung Tau province for export, as local facilities are not able to handle the volume.
So investment should focus more on developing comprehensive sea port infrastructure facilities to fully tap the region’s potential.
The TPP bloc has more than 800 million people, with gross domestic product (GDP) reaching some 27 trillion USD and accounting for 30 percent of global trade value.
Binh Duong lures 1.6 billion USD in foreign investment
The southern province of Binh Duong attracted 1.6 billion USD in foreign direct investment (FDI) so far this year, exceeding the yearly target by 60 percent.
According to Nguyen Thanh Truc, Director of the provincial Department of Planning and Investment, the locality is currently hosting 2,548 valid FDI projects totalling more than 22 billion USD.
In the 2010-2015 period, the province drew 7.9 billion USD of investment, 2.5 billion USD higher than the set goal, he added.
Truc said in the next five years, Binh Duong plans to attract at least 7 billion USD, raising its total FDI to 30 billion USD.
In the coming time, the province will continue expanding investment resources from economic sectors, especially foreign investment that is considered a driving force for the local socio-economic growth.
It will also speed up its economic structure transfer towards developing services and industry in association with urbanisation while prioritising hi-tech, labour-saving and environmentally friendly projects, stated Truc.
Foreign developers make beeline for Vietnam’s property market
Under an agreement with local property developer Phuc Khang earlier this month, Singapore-based investor Genesis Global Capital will bring in the contracted money over six years.
Phuc Khang will receive US$50 million a year to build international standard apartments. The fund targets foreign businesspeople, investors and overseas Vietnamese who want to buy or rent housing in the country.
Ng Chuan Kai, the managing director of Genesis Global Capital, said Vietnam is on the fund’s radar after the US, Germany, and Brazil.
With its large population, policy changes allowing greater foreign ownership of property, and deeper international integration that would encourage more foreign investors and experts to come for business, demand for housing in Vietnam is set to increase, and it is a good opportunity for investment, Ng said.
Genesis Global Capital is one of many foreign companies to invest in the residential property market, which is recovering from a multiple-year slump.
In July Japan’s Creed Group signed a deal to invest US$200 million in Vietnamese property firm An Gia Investment. The investment is aimed at offering Japan-quality housing products in Ho Chi Minh City.
After booming in 2007-08 the real estate market froze amid the economic downturn.
Buyers and developers defaulted on loans, leaving banks crippled with bad debts and unable to provide credit to tens of thousands of businesses. Many half-built residential buildings and office blocks could be seen strewn around cities.
Now Vietnam seems set for another boom, with new residential projects starting in Hanoi and Ho Chi Minh City and buyers snapping them up quickly.
Ho Chi Minh City recently licensed the US$1.2 billion Empire City, the country’s tallest tower with 86 stories.
People drive past the new urban area Trung Hoa Nhan Chinh in Hanoi. Vietnam is riding into a property boom, with construction of new residential projects starting in Hanoi and Ho Chi Minh City. Photo: Reuters
The complex, which will include a shopping mall, a five-star hotel, offices and apartments, will be developed by a joint venture between several local firms and Denver Power Ltd. of the UK.
A long-awaited and unprecedented change to Vietnam’s foreign ownership regulations, which came into force on July 1, is a reason for foreign investors to increasingly enter the sector, Marc Townsend, managing director of property consultancy CBRE Vietnam, said.
Foreigners with a valid visa and foreign companies and international organizations operating in Vietnam are now permitted to buy houses and apartments.
Before the law was amended, only foreigners married to Vietnamese and those deemed to make significant contributions to the nation’s development were allowed to buy houses.
The new rules allow maximum foreign ownership of 30% in an apartment block and 250 houses in a ward.
“The relaxation of foreign ownership restrictions is more significant than previously anticipated and marks a strong step towards the opening up of the Vietnam real estate market to overseas investment,” Townsend said.
The potential offered by 4.2 million overseas Vietnamese and 30,000 foreign executives working here long-term greatly excites realtors.
Vietnam’s participation in the Trans-Pacific Partnership agreement, which is expected to draw more investment into the country, especially from major importers of Vietnamese products like the US and Japan, has also attracted housing investors.
Korean giant Lotte, Hong Kong’s Sun Wah Group and Singapore property developer Keppel Land have all entered the property market, which is also spurred by a young population and growing middle-class with strong aspirations for home ownership and the high urbanization rate.
The increasing housing demand should also come from one of Asia’s fastest rates of middle-class expansion, with the economy growing 6.28% in the first half of this year – the fastest pace since 2008.
Huynh Phuoc Nghia, consulting expert at the Global Integration Business Consultants Company (GIBC), said foreign capital flows would stimulate the residential property market and increase its prestige.
However, there are not many attractive property developers or projects in the country to attract such flows, and the complicated legal procedures are also barriers, he said.
“To attract more foreign investors into the sector, bad debts should be cut, administrative procedures streamlined, and transparency of market information improved.”
The property sector ranks third this year behind manufacturing and electricity generation in attracting FDI. By October it had attracted US$2.14 billion, accounting for 11.1% of total investments, according to the Foreign Investment Agency.
After the government’s efforts to clear up bad debts, a lot of it stemming from real estate, and ease restrictions on housing buyers, the residential property market has grown rapidly. An estimated 6,880 apartments were sold in Hanoi in the third quarter, 154% up over the same period last year, according to CBRE Vietnam.
Unsold inventory of apartments fell 56.21% from nearly US$6 billion worth at the start of 2013.
The number of units launched in the third quarter doubled from a year earlier, CBRE said.
Rudolf Hever, executive director of the Ho Chi Minh City-based Alternaty Real Estate Service Company, said Vietnam is expected to be the best performing market in Southeast Asia in 2016.
The drivers of Vietnam’s latest emergence include a stable and recovering economy, rising confidence among buyers and developers, and the positive effects of the AEC (ASEAN Economic Community) and TPP, of which the country would be a key beneficiary, he said.
“Currently Vietnam is offering the most exciting opportunity in the region, while at the same time the regional real estate markets are suffering.”
Singapore is feeling the effects of the heavy-handed cooling measures, Indonesia and Malaysia have seen rapid currency depreciation, Thailand continues to grapple with internal issues and Myanmar is seeing significant supply coming on to the market, putting downward pressure on rentals and pricing, he said.
“Meanwhile Vietnam has come through an extended period of consolidation, and looks poised to lead the regional real estate markets over the next two to three years”.
Shrimp exports to the US grow
Vietnam shrimp exports for the third quarter of 2015 registered growth compared to the two previous quarters, according to the latest figures from the Vietnam Association of Seafood Exporters and Producers (VASEP).
Shrimp exports reached US$840.8 million in third quarter, up from US$573.9 million in first quarter and US$716.2 million in second quarter of the year but still far short when compared to the corresponding period of 2014.
From July to September, overseas shrimp consignments registered in at US$2.1 billion said VASEP in its report, down 27.4% from the corresponding nine-month period in 2014.
VASEP said in the major import markets of the EU, Republic of Korea (RoK) and Japan, an economic downturn and sharp devaluation of their respective currencies caused weaker demand, which manifest in lower imports.
Meanwhile, the significant depreciation of the currencies of India, Indonesia, Ecuador and China along with a surge in shrimp supply from Southeast Asia created a glut in the market driving sales prices lower during the third quarter.
In the first nine months of 2015, white legged shrimp, the main species exported, decreased 27.5% year-on-year to US$1.2 billion. All told white leg accounted for 58.2% of the nation’s total shrimp exports.
Black tiger shrimp exports dropped by 31.7% to US$711.4 million, occupying 33.4% of Vietnam’s total shrimp exports.
Frozen raw black tiger shrimp and white legged shrimp made up the largest proportion of the nation’s total shrimp exports. Processed marine shrimp exports were inconsequential.
Through September 2015, the proportion of white legged shrimp was equal to the same period of 2014; the proportion of black tiger shrimp was down 2.1%, while that of marine shrimp inched up 2.1%.
From January to September, inclusive, shrimp exporters made a concerted effort to expand their markets resulting in a jump to 92 markets, up six from September 30 of 2014.
The top 10 markets- the US, Japan, EU, China, Republic of Korea (RoK), Canada, Australia, Taiwan, ASEAN and Switzerland- accounted for 95% of total shrimp exports.
VASEP said a drastic decline was experienced in shrimp exports to main markets such as the US, Japan and EU for the nine month period.
On the flip side, some single markets witnessed a year-on-year rise. Exports to Malaysia surged 40.4%, exports to the U.K climbed 16%, while those to Hong Kong and Singapore picked up 2.6% and 0.7%, respectively.
VASEP said it is remarkable that demand for warm water shrimp from the UK, the largest market of Vietnam shrimp in EU inexplicably surged dramatically.
Shrimp sales to the US in September 2015 touched US$77.6 million, up nearly 29% compared to August 2015 and up 3.5% year-on-year.
Total sales in the third quarter of 2015 reached US$188.8 million, up 62.3% from the first quarter of they year and up 29% from the second quarter but down 35.6% when compared to the corresponding period last year.
Shrimp exports to the US in September 2015 reported the highest growth compared to all other months so far in the year as US importers increased their inventories in anticipation of the upcoming year-end holidays.
VASEP said the final results of the ninth anti-dumping duty administrative reviews on frozen shrimp imported from Vietnam resulting in lower import duties might also help boost shrimp sales to the market in the remaining months of the year.
In the first 9 months of 2015, shrimp sales to the US reached US$451.5 million, down 45% year-on-year. Sharp appreciation of US dollar against other currencies encouraged global shrimp exporters to stimulate exports to the US, which putting high downward pressure on the prices of shrimp in Vietnam.
Shrimp exports to the EU in September 2015 reached US$55.9 million, up 13.3% from August 2015. However, overall exports for the third quarter dropped 24.7% year-on-year to US$157 million.
The cumulative figure through September 2015 struck US$403.3 million, down 18.7% year-on-year.
According to VASEP, demand from main markets reduced while global shrimp prices for the year to date fell 30%.
Vietnam shrimp’s competitiveness and its sales for the January-September period was significantly affected by fluctuations in exchange rate of US dollar against the dong and other currencies.
For the fourth quarter of the year, Vietnam shrimp exports are expected to come in at a bearish US$800 million— dropping down by as much as 25% compared to the corresponding period a year ago.
VASEP is currently guiding for US$2.9 billion in gross export sales this year, over US$1 billion lower than 2014 and a full US$300 million lower than the full-year estimate it made last July.
HDBank comes together with Saigonres
HDBank has signed a comprehensive cooperation contract with Saigonres Nam Do for its Saigonres Plaza project in Binh Thanh district, Ho Chi Minh City, lending VND1.09 trillion ($48.63 million) at a preferential interest rate of 6.8 per cent per annum.
HDBank is the only credit provider for the project.
The signing marks the continued long-term cooperation in the business strategies of the two parties, based on equality, mutual benefit, and trust. The two pledged to create favorable conditions for the further development of the strategic cooperation.
HDBank expects the provision of financial services to the real estate sector will not only bring benefits to the parties involved and diversify property products but also help Vietnam’s real estate market.
Mr. Pham Quoc Thanh, Deputy General Director of HDBank, said it offers comprehensive financial packages for customers and its cooperation with Saigonres aims to support the development of property projects.
10M TMV sales up 27%
Toyota Motor Vietnam (TMV) has announced its sale performance in October, with 4,372 units sold for an increase of 5.5 per cent compared to October last year. The northern region saw sales of 1,909 units, the central region 573 units, and the southern region 1,890 units. In the first ten months of the year its sales therefore stood at 40,516 units, an increase of 27 per cent (8,553 units) compared with the same period in 2014.
Passenger car sales totaled 2,154 units in the month, a slight decline compared to October last year. The best seller was the all-new Vios, with 1,177 units, 55 per cent higher year-on-year, followed by the Camry 2015 with 401 units and the Corolla Altis with 344.
Sales of commercial vehicles (CV) stood at 2,218 units in the month, with the Innova leading the way with 965 units sold and the Fortuner with 811, accounting for 43 per cent and 36 per cent, respectively, of the total CV segment.
The result for completely-built-units (CBUs) imported and distributed by TMV included impressive sales of the all new Hilux 2015, which was introduced in early October. A month after its launch there were 203 units delivered to customers. Sales of the Land Cruiser Prado, meanwhile, totaled 171 units, the Hiace 27, and the Land Cruiser 41. The new generation Yaris 2014 continued to win favor among customers, with 231 delivered in October.
Forty-five Lexus’s were delivered to customers during the month, bringing year-to-date sales to 818 (up 294 per cent year-on-year).
Surplus for BOG fund in Q3
The Ministry of Finance has recently released figures on the petrol price stabilization fund (BOG Fund) in the third quarter of 2015 based on data collected from petrol trading units all over the country.
The balance of the BOG fund on September 30 was VND2.77 trillion ($123.59 million), significantly higher than the VND1.79 trillion ($79.86 million) in the second quarter.
The total amount in the BOG for the third quarter was VND1.81 trillion ($80.76 million), with VND335.31 billion ($14.96 million) having been used.
Some units recorded a surplus in the BOG fund, such as the Vietnam National Petroleum Group (Petrolimex) with VND1.18 trillion ($52.65 million), the PetroVietnam Oil Corporation (PV Oil) with VND146.84 million ($6,552), and the Military Petroleum Company (MPC) with VND336.98 million ($15,036).
Ten out of 19 petrol enterprises recorded a deficit, however, including S.T.S Petroleum and Logistic Services JSC with VND27.71 million ($1,236) and the Nam Song Hau Trading Investing Petroleum JSC with VND33.04 million ($1,474).
Profit from the surplus in the third quarter stood at VND2.82 billion ($125,828).
In the third quarter the BOG fund of Petec Trading & Investment Corporation was included with the figure for PV Oil.
Agreement on BIDhomes Golden South signed
The Building and Infrastructure Development of Vietnam JSC (BID) and the HANHUD LAND JSC (HANHUD) have recently signed an agreement to develop the BIDHomes Golden South project in Hanoi’s Hoang Mai district.
Speaking at the signing ceremony, BID Chairman and General Director Tran Van Manh said the cooperation between the two prestigious property companies will result in the quick completion of the project, thus meeting the needs of the investors and homebuyers.
The 9,760 sq m complex sits in the expanded North Dai Kim Urban Area in the southern suburbs of the capital.
It comprises three 28-storey buildings, including a shopping mall, office space for lease, and 874 apartments for sale with areas ranging from 70 to 88 sq m.
Construction is expected to begin in the second quarter of 2016 and be completed in the second quarter of 2018.
The project is only a 10-minute drive away from the center of the city and is also close to the large residential areas of Linh Dam, Dinh Cong, Dai Kim, and Gamuda Gardens, as well as major universities and hospitals.
HCMC eyes public transport system completion by 2030
Ho Chi Minh City has set an ambitious target to complete its modern public transport system by 2030 in a bid to ease chronic traffic congestion and related issues, including environmental pollution caused by the rising number of personal vehicles, according to the head of the municipal Department of Transport.
In the next 15 years the modern public transport system will be connected with eight metro routes, two tramways, one monorail and six bus rapid transit lines, Bui Xuan Cuong, director of the department, said at the “Vietnam – France Trail and Urban Transport” seminar on Friday.
Urban transport plays an important role in modern society, especially in reducing traffic congestion in big cities, amid the context that the number of personal vehicles is on the increase each year in Vietnam, he added.
In particular, urban railway and metro systems are often regarded as a symbol of a modern metropolis, Cuong remarked.
An adverse impact of economic development is the risk of serious traffic gridlock, which is a challenge to urban transport, so the important task of Ho Chi Minh City, which is Vietnam’s biggest hub, is to modernize its urban transport system to cope with it, he said.
“France is a country with an advanced urban transport system, so Ho Chi Minh City invites French investors and companies to join hands with local authorities in developing future transport projects,” Cuong said.
Vietnam is facing a big challenge in many issues, with an annual population rise of about 800,000 people and a fast urbanization rate that enables around one million people to become urban dwellers per annum, said Emmanuel Ly-Batallan, French Consul General in Ho Chi Minh City.
According to forecasts, by 2050 there will have been over 60 percent of Vietnam’s population living in urban areas, compared with 33 percent in 2013, Ly-Batallan said.
Upon completion, Ho Chi Minh City’s urban railway system will surpass that of Singapore, which reached the total length of 160km in 2013, and become one of the largest urban railway systems in Southeast Asia, on a par with that in Shanghai (538km in 2013) and Beijing (465km in 2013), he added.
The Vietnamese city has plans to build eight subway lines, with the first covering 19.7km from Ben Thanh Station in District 1 to Suoi Tien Station in District 9, to be completed in 2019.
Remi Genevy, national director of the French Development Agency (AFD), said the Vietnamese Ministry of Transport has decided to invest US$45 billion in upgrading and building new transport networks, which are largely reserved for rail, while the rest is earmarked for road construction.
As a result, the AFD wishes to help Vietnam improve financial efficiency in implementing those projects, Genevy said.
France wishes to promote cooperative relations with Vietnamese partners in urban transport, as the European country’s railway industry is of numerous leading and world-class standards in many aspects: design, engineering, locomotives and compartments, signaling systems, equipment, service and maintenance, Genevy added.
Ten world-renowned French companies partaking in the seminar, including Alstom, Colas Rail, Consolis, Thales and Vossloh Cogifer, also introduced the latest equipment, technology, and technical assistance for the development of railways.
In particular, many referred to the development of intelligent transport systems, one of the most important things to be considered for improving and upgrading existing transport facilities.
2015 exports difficult to finish
Export turnover reached only US$134.6 billion during the last ten months, making it difficult to attain this year’s target of US$165 billion, reported the Ministry of Industry and Trade.
The export turnover must average US$15.2 billion a month in the rest of this year to obtain the target, which deputy minister Tran Anh Tuan said a very difficult mission to the ministry. It has urged authorized agencies to implement more drastic measures to boost exports in the rest two months.
For the last ten months, manufacturing and processing exports grew 17.6 percent over the same period last year, significantly contributing to common turnover growth.
Foreign direct investment sector posted high growth rate and continued to be the main contributor to Vietnam’s export growth.
Coffee bean exports down in Jan-Oct
The export volume of raw coffee inched down in the first ten months this year as growers switched to exporting processed coffee, according to the Vietnam Coffee and Cocoa Association (Vicofa).
The Ministry of Agriculture and Rural Development said the country’s coffee exports in January-October slid by 30% to over one million tons compared to the 1.4-million-ton target for this crop.
Explaining this dramatic fall, Vicofa said that instead of exporting raw beans as before, farmers have recently exported roasted and ground coffee products, thereby leading to a decline in exports. Overall, aggregate coffee exports did not fall sharply.
In particular, roasted and ground coffee shipments neared 54,000 tons last year with total turnover amounting to US$274 million, accounting for 7.7% of the total. The export of processed beans over the past nine months this year has reached 52,000 tons worth US$226 million, equivalent to the figure in all of 2014.
Vicofa forecast roasted and ground coffee exports this year would improve by 25% against last year. Coffee exports will be low this year as domestic demand for processed products has been on the rise.
According to Vicofa, domestic consumption of coffee just accounted for 5-7% of total output in the past, but now make up 10% and is projected to reach 15% in 2020.
A kilogram of coffee was sold at VND35,800-36,400 in the Central Highlands on November 5, up VND400-500 per kilo compared to the previous day.
Gov’t provides more incentives for supporting industries
The Government will offer a wide range of policy incentives for investors committed to supporting industries.
The incentives will cover research, development, application, technology transfer and production, according to a decree on development of supporting industries issued by the Government last week.
The decree left out a provision on an investment fund of VND30 trillion proposed in the draft, though.
Individuals using their own money to research and develop products of high applicability can get up to 50% financial aid from the supporting industries development program.
Those projects building research and development facilities to make goods for supporting industries can enjoy land use incentives and get funding up to 50% from the program.
Besides, costs for technology transfer and application can be also 50% subsidized.
The State will cover up to 75% of technology transfer costs in projects where over 85% of materials are domestically refined minerals.
The decree says projects on the priority list will be funded by the development program for personnel training.
Priority products can join a national trade promotion program and get partial funding for brand registration and participation in domestic and international exhibitions.
There are currently nearly 1,400 local producers of components and parts for fields like electricity, electronics, metal and plastics beside more than 600 businesses making materials for the textile-garment industry.
Supporting industries have been unattractive to investors in the past time as it normally takes a long time to recoup capital and it is risky to invest in them. Capacities of enterprises in supporting industries are still limited partly because of their financial constraints.
As a result, manufacturers have had to seek external supplies, which is one of the reasons for trade deficit in the industrial manufacturing sector over the years.
Along with the decree, the Government issued a list of priority products for supporting industries including textile-garment, footwear, electronics, automotive, engineering and hi-tech.
Boards of Vietnam PLCs score below average
Responsibilities of boards of directors at Vietnamese publicly listed companies (PLCs) rank below the average of the ASEAN region, said Tran Anh Dao, deputy general director of the Hochiminh Stock Exchange (HOSE).
Dao told a conference on enhancing leadership’s capacity for sustainable development last week that she has received results of the 2015 ASEAN Corporate Governance Balanced Scorecard project which was conducted in six ASEAN nations.
This year, fifty-five Vietnamese PLCs, with 50 of them listed on the HOSE and the remainder on the Hanoi Stock Exchange, were chosen for assessment.
Results and figures will be announced at an ASEAN Corporate Governance Conference and Awards in Manila, the Philippines on November 14.
However, responsibilities of boards of directors at Vietnamese PLCs are assessed as below the average of the ASEAN six, namely Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.
The ASEAN Capital Markets Forum (ACMF) and the Asian Development Bank (ADB) have done annual reports for the ASEAN Corporate Governance Balanced Scorecard since 2011 to assess corporate governance at PLCs across the region.
Vietnam took part in 2012 but corporate governance at domestic businesses has made little headway while other regional firms have made significant improvements.
Dao of HOSE said Vietnam has the same regulations as the other participating nations in the scorecard but Vietnam has not kept pace with other countries in terms of execution of regulations, and supervisory and improvement mechanisms.
The current regulations stipulate that at least one-third of the board of directors of a firm must be independent members but due to some reasons, many Vietnamese firms fail to meet this requirement and accept penalties. This information was given by Ha Thu Thanh, chairwoman of Deloitte Vietnam, which co-held the conference with the HOSE in HCMC last week.
The general director of a securities company said the State holds a 30% stake in the firm and foreign investment funds own a 49% stake. Therefore, some of the firm’s board members come from State-owned enterprises and foreign businesses. Other members are founders of the brokerage. Therefore, no board member is an independent one.
Speakers at the conference said independent board members should be trained to have necessary knowledge and skills.
Donna Hamlin, chairwoman and CEO of Intrabond Capital U.S., Inc., said many enterprises in the world require independent board members to hold certain certificates to prove that they are qualified for their positions. In Europe, they have to attend training courses.
There are few training courses for board members in Vietnam. Some courses provide new State regulations rather than essential knowledge and skills for board members.
On the other hand, their awareness of improving knowledge of corporate governance is not good.
Listed firms usually assign normal employees to attend training courses for board members held by the HOSE. According to Dao, the State Securities Commission of Vietnam plans to establish an institute to train board members.
With the ASEAN Corporate Governance Balanced Scorecard, PLCs in the six ASEAN nations are assessed in terms of corporate governance based on the criteria set by the Organization of Economic Co-operation and Development (OECD), including rights of shareholders, equitable treatment of shareholders, role of stakeholders, disclosure and transparency and responsibilities of the board. Of them, responsibilities of the board account for 40% of the criteria.
Customs procedures improve but complete goods clearance still lengthy
Eighteen months after the automated customs clearance system came on stream, the total number of hours required for export-import procedures has yet to fall as earlier expected.
At a review meeting on the VNACCS/VCIS system held in HCMC last week, Nguyen Quang Binh, who is in charge of customs clearance procedures at local dairy processor Vinamilk, said the electronic customs system had improved significantly.
Over the past one year and a half, the time needed for customs clearance has been reduced to one day only. But the complete clearance process still takes a lot of time due to inspections by non-customs agencies.
Procedures for veterinary quarantine and quality inspections have not improved, thus affecting the clearance of goods for owners, Binh said at an event organized by the General Department of Customs and the GIG project of the U.S. Agency for International Cooperation (USAID).
According to Binh, relevant procedures should also be quickened. Vietnam should recognize the quarantine results of exporting countries or take random samples for testing.
Michael A. Trueblood, director of the Economic Development Office at USAID, backed Binh’s view, saying the GIG project had carried out a straw poll on the VNACCS/VCIS system. The poll showed document requirements have been simplified, procedures have moved faster, waiting time has been reduced, and information has become more accurate.
However, according to Trueblood, there remain many issues to solve. Coordination among relevant agencies should be improved to streamline administrative paperwork for export and import activities. Specialized inspections of export-import goods now make up 72% of total time.
According to a representative of the Customs Control and Supervision Department, the VNACCS/VCIS system has many functions but only half are being used due to the absence of a legal basis, a lack of coordination among agencies and a lack of connectivity with international shippers and logistic services providers.
Many management stages cannot be performed directly on the VNACCS/VCIS system but via satellite systems such as providing barcodes, goods confirmations and documentation inspections.
There are some problems arising in the application process. For instance, though enterprises have paid tax arrears, the system has not updated information immediately, so these corporate taxpayers are still listed as tax debtors.
Vietnam can use fabrics of non-TPP members in five years
Vietnam will have a five-year window to implement the yarn-forward rule after the Trans-Pacific Partnership (TPP) agreement comes into force.
This means local textile and apparel products could enjoy tariff incentives even though they are made from materials produced by non-TPP members.
According to the full text of TPP which was released last week, TPP members account for 65% of Vietnam’s textile and apparel exports, with the U.S. making up nearly 75%.
Textile-garment is regarded as the biggest beneficiary when the TPP becomes effective thanks to tax reductions and exemptions by the U.S. Vietnam’s exports of such products to the U.S. are currently subject to an average tax of 17.5%.
With textile and apparel products, the U.S. pledged to eliminate tariffs on many products from 11 other TPP states, including Vietnam.
However, for some products shipped to the U.S., there will be a road map for tariff cuts and such tariffs will be lowered to zero in 6-10 years’ time after the trade deal is in force.
In particular, the U.S. will halve the base tax rate, maintain the new rate in ten years and abolish it from the 11th year. Or the base rate will be reduced by 35% at first, kept unchanged in the following five years, cut by an additional 15% in the sixth year and eliminated from the 11th year.
But to get such tax incentives, garment products of Vietnam as well as other TPP members must meet the rule of origin.
If textiles and garments comtain less than 10% materials from non-TPP countries, the preferential treatment will not be affected.
For products containing elastomeric yarn, producing member countries must guarantee yarn is completely sourced from one or more TPP members.
However, the short-supply list allows textile and apparel products to enjoy duty preferences despite being produced from some fabrics and yarns of non-TPP countries.
Vietnam’s textile and garment exports in January-September were close to US$17 billion, with exports to TPP states accounting for US$11.1 billion (65%).
As for the TPP states, the U.S. is the biggest market for Vietnam’s garment products (US$8.3 billion), followed by Japan (over US$2 billion), Canada, Australia and Chile.
Ca Mau aims for US$7.5 billion export revenue
Southern Ca Mau province aims to increase its export revenue from US$5.6 billion in 2014 to US$7.5 billion by 2020, said a provincial People’s Committee official.
Currently, Ca Mau seafood products are sold in 30 countries including markets like the US, Japan, EU and Republic of Korea (RoK).
Electricity output up nearly 13 percent in first 10 months
The total power output of the electricity sector in the first ten months of this year reached 136.25 billion kWh, up 12.95 percent compared to the same period last year, according to a report released by the Electricity of Vietnam (EVN).
The group’s power output alone in the period was 132.64 billion kWh, up 11.69 percent year-on-year. Of the figure, power generation from hydroelectricity plants made up 37.6 percent of the total while, those from from thermal power and gas-fuelled plants were 31.69 and 29 percent, respectively.
EVN completed four 500-220kV transmission line projects and began construction on seven 220kV projects.
According to the EVN, the group is accelerating to put into operation the first turbines of the Lai Chau Hydropower Plant and the Huoi Quang Hydropower Plant by late December this year.
Drastic actions in multiple aspects needed amid strong integration
Both the Government and businesses must incessantly update their knowledge, be creative and take drastic action in multiple aspects amid intensive integration and volatile global economies, experts said.
Associate Professor Nguyen Anh Tuan, editor-in-chief of the International Studies Magazine of the Foreign Ministry’s Diplomatic Academy of Vietnam, said State agencies needed to evaluate possible impacts of the Trans-Pacific Partnership (TPP) agreement, negotiations on which just concluded in early October this year, on such fields as goods, investment and services to design and overhaul long-term policies.
Vietnam should make development policies for the industries that could benefit from the TPP, which currently includes 12 countries, along with policies to increase added value in all economic sectors.
He added that the Government should give more loans to businesses, especially small- and medium-sized ones, while reforming the financial sector, since it would be a major risk if enterprises couldn’t access credit, mostly sourced from people’s deposits or buying of bonds and treasury bills.
To help companies improve their competitiveness and optimise advantages, relevant agencies need to continue bettering the business climate, and regularly update firms on macro-economic policies and trade agreements, according to Vo Hung Dung, director of the Vietnam Chamber of Commerce and Industry’s chapter in Can Tho.
They should also make information transparent and pay heed to administrative reforms, particularly at the local level, he added.
In-depth information and dialogues between the Government and businesses was important, Deputy Director of the Central Institute for Economic Management Vo Tri Thanh said.
He underlined the necessity for not only general information about free trade agreements or integration, but also details about existing policies, reforms and essential changes.
Meanwhile, enterprises should work to learn about the TPP agreement to have a thorough understanding in their specific production and business areas and take action to tap opportunities offered by the trade deal.
They should also enhance their personnel capacity and co-operate with foreign companies to make the best use of their peers’ capital, personnel and technological advantages, Thanh noted.
It is critical to take appropriate actions, particularly promoting the competitiveness of the economy and businesses, to grasp opportunities and deal with challenges in the integration period, Vo Hung Dung said.
Contractor selected to build Germany House tower in HCM City
The Hoa Binh Construction & Real Estate Corporation (HBC) said that it has been chosen to build the above-ground part of the Germany House (Deutsches Haus) in Ho Chi Minh City.
The contract is worth 480 billion VND (21.3 million USD) in total with the deadline slated for June 2017. HBC has just completed the building’s basement component.
The Germany House has four floors underground and 26 storeys above the ground with a total floor area of 40,000 sq.m. It will house real estate offices, a retail area, an exhibition area, and a multifunctional convention centre.
The building will also be the workplace of Germany’s Consulate General in HCM City and German companies as well as high-class apartments.
Considered a symbol of the cooperation between Vietnam and Germany, the building is expected to be a model of innovation and energy saving and will be the first in Vietnam to meet LEED standards of the United States Green Building Council.
Vietnam high quality goods fair in Moscow
The first Vietnam high quality goods fair will be held in Moscow from November 12 to December 12 with the aim of promoting trade and investment relations between Vietnam and Russia.
At a press briefing in Moscow on November 10, Vietnam Ambassador to Russia, Nguyen Thanh Son underscored that the fair will introduce Vietnam’s strength and help spur relations between the two countries.
Le Truong Son, President of the Vietnam Business Association in Russia and general director of INCENTRA company which hosts the fair, said more than 160 businesses from Vietnam will showcase 12,000 products and services.
Vietnam businesses operating in Russia and Russian businesses will also attend the event.
In addition to a Vietnam Business Forum organised on November 11, a series of trade promotion activities between Vietnam and Russia and other regions in the world will also be held.
Canada promotes premium food products in HCM City
The 2015 Canadian Food Festival was launched by the Canadian Embassy in Vietnam in Ho Chi Minh City on November 10 to promote Canada’s premium food products.
The annual event introduced dozens of signature Canadian foods and beverages, including beef, pork, wine, beer, maple syrup and a wide range of seafood – lobster, oyster, black cod, snow crab, salmon and mussels.
Canadian chef Nathan Fong and Executive Chef of Le Meridien Saigon Hotel are featured at the event, which runs through December 9.
In his opening remarks, Canadian Ambassador to Vietnam David Devine said Canadian-made food products are loved by more and more Vietnamese people, fueling trade growth between the two countries.
Canada’s farm product and seafood exports to Vietnam have shot up four- to five-fold over the past five years, making up more than half of the total Canadian export revenue to its partner, he noted.
Devine vowed to bring the finest and safest products from Canada to local consumers. He said he believed that the newly-concluded Trans Pacific Partnership (TPP) agreement would pave the way for greater trade opportunities.
Trade between the two countries hit 4.4 billion CAD (3.32 billion USD) between September 2014 and August 2015, making Vietnam Canada’s biggest trade partner in ASEAN.
Canada mainly ships wheat, soybeans, green peas, lobsters, snow crabs, oysters, black cod, pork, apples and peaches to Vietnam.
Central Highlands agriculture, trade fair 2015 opens
The 2015 Central Highlands Agriculture and Trade Fair kicked off in Gia Nghia town in the Central Highlands province of Dak Nong on November 10.
The Vietnam Farmers’ Union (VFU) and the provincial People’s Committee organised the event under the theme “Agriculture, farmers and rural areas towards sustainable development” in response to the governmental campaign “Vietnamese use Vietnamese goods”.
It serves as a trade promotion event to bridge the gap between businesses and consumers and give firms the opportunity to seek out partnerships.
This year’s fair features nearly 380 pavilions from 250 businesses and organisations that display a wide range of farming products, plants and livestock for breeding, agricultural equipment, the latest technology and products from craft villages.
In addition, a cuisine fair, beer festival, and workshops and discussion on agricultural technique consultancy are also being held as part of the event, which runs through November 16.
The Central Highlands comprises five provinces – Lam Dong, Gia Lai, Dak Lak, Dak Nong and Kon Tum – that are home to more than 5.5 million people. Nearly half of the population are from ethnic minority groups, including the Bahnar, Jrai, Ede and Sedang.
Agriculture is the main pillar of the region’s economy, accounting for 46.33 percent of its Gross Domestic Product (GDP) in 2012.
The region is renowned for its large areas of industrial crops, including coffee, cashews, pepper and rubber.
Vietnam, Japan work to solve e-commerce disputes
Measures to address e-commerce related disputes between Vietnamese and Japanese firms were sought at a workshop held in Ho Chi Minh City on November 12.
Themed “Cross-border e-commerce: Trend and opportunities”, the event was co-organised by the Vietnam E – Commerce and Information Technology Agency (VECITA) under the Ministry of Industry and Trade and the Commerce and Information Policy Bureau under Japan’s Ministry of Economy, Trade and Industry.
The boom of e-commerce sees violations in online transactions are unavoidable, especially when Vietnam-Japan trade and investment links are being strengthened, said Bui Thanh Hang from the Ministry of Industry and Trade.
Any disputes or complaints arising in online purchase between Vietnamese and Japanese businesses should be sent to the websites of the E – commerce Development Centre (EcomViet) under VECITA and Japan’s Cross-Border Consumer Center Japan (CCJ), Hang noted.
These matters will be dealt with by experts from the two countries and then shared with their counterparts in other countries through their websites to benefit a larger number of customers, she said.
Tsuneo Matsumoto, President of the National Consumer Affairs Centre of Japan highlighted the advantage of solving disputes online, saying that the websites designed for the work help save expenses and time and solve problems stemming from geographical distances.
Authorised agencies of Vietnam and Japan agreed to working closely on settling quickly and effectively e-commerce disputes between the two sides’ enterprises in the coming time.
Tokushima seeks investment opportunities in Ha Nam
A group of Japanese businesses from Tokushima prefecture visited the Red River Delta province of Ha Nam on November 12 to seek investment opportunities.
They were informed that the province is calling for foreign investments in the support industry and hi-tech agriculture during a working session with Mai Tien Dung, Secretary of the province’s Party Committee.
Ha Nam has favourable transport linking with neighbouring provinces and an abundant, quality workforce, said the host.
He also noted that investors will be allocated with land free of charge to build houses for workers and get one-year land rent tax exemption for high-technology agriculture projects using breeds and line production from Japan.
The province also encouraged the enterprises to build centres producing breeds for farmers and provide them with technique and consumption guidance.
Delegation head Ueda Shigeru said the feedback from the Japanese enterprises operating in Ha Nam said the province has a good investment environment.
The locality’s assistance for small- and medium-sized enterprises makes it an ideal investment destination for Tokushima businesses, he said.
Visiting Tokushima businesses are engaging in agriculture, transportation, import-export, finance and banking, he told the host.
Currently, 59 Japanese enterprises are operating in Ha Nam and all of them are said to be profitable.
Economic recovery slow and unsustainable: economists
The country’s economy is continuing to recover but at a slow and unsustainable pace, with no remarkable changes in growth model, economists said at a conference held in Ho Chi Minh City on November 11.
Despite a growth rate of 6.8 percent in Quarter 3, the growth of key sectors is slowing down, trade deficit has returned and public debt increases, Dr. Nguyen Dinh Cung, President of the Central Institute for Economic Management (CIEM) highlighted.
He added that the economy is vulnerable to regional and global economic fluctuations.
Regarding banking operation management, Nguyen Thi Hong, Deputy Governor of the State Bank of Vietnam (SBV) said the banking system faces challenges in ensuring sufficient capital for enterprises whose operations mainly rely on loans from banks.
She underscored that credit policies in 2016 will give priority to agriculture and high-technology industries while ensuring effective use of capital and addressing difficulties for enterprises and localities.
In addition, the SBV will implement comprehensive monetary tools, control inflation rates and protect the value of domestic currency to create trust among enterprises and local people, Hong said.
At the conference, participants agreed that foreign investment into Vietnam will continue to increase in 2016 in anticipation of free trade agreements (FTAs), but without suitable policy adjustment, foreign-invested enterprises, not domestic ones, will benefit from the FTAs.
They agreed that Vietnam not only needs strong reforms but also should accelerate the pace of reform in order to meet the requirements of international economic integration.
Da Lat lifts ban on Chinese potato imports after ten days
The ban on imports of Chinese potatoes into a wholesale market in the Central Highlands city of Da Lat did not last as long as consumers hoped.
Vendors at the wholesale Da Lat produce market were prohibited from buying Chinese potatoes on November 1, but the ban was overturned on November 10, according to local authorities.
The administration of Da Lat, the capital city of Lam Dong Province, decided to lift the ban on Chinese potatoes on the heels of a recent meeting with traders of the market.
Local traders are now allowed to source Chinese potatoes if they have all the required receipts and papers for the products, according to the Da Lat administration.
They must also commit themselves to not covering the Chinese potatoes with the typical red dirt of the Central Highlands in order to make them look like Da Lat-grown products, a trick usually employed to dupe consumers, which led to the original ban.
The disguised Chinese potatoes have been sold at the price of real Da Lat products despite being of poorer quality, ruining the reputation of Da Lat potatoes.
Traders are now only allowed to wash and clean their potatoes but they are not permitted to use red dirt, according to the city’s administration.
They are also required to place correct labels on products to avoid misleading consumers. Those imported from China must be sold under labels that say they are “of Chinese origin,” according to the regulation.
The Da Lat administration has apparently made the about-face under pressure from potato sellers in the market.
The move came less than a week after the city set up a special team to act as ‘gatekeepers’ to the wholesale market, which was then seen as a determined move to stop Chinese products disguised as local ones from entering there.
The gatekeepers had been expected to be on duty 24/7 at the entrance to the wholesale market until the end of this year.
On November 5, the watchdog team caught and seized a batch of Chinese potatoes from a vendor, which led to a wave of protest from other traders, who threatened to stop doing business there.
An official from the city’s administration, however, admitted that the ban had been imposed “quite hastily,” despite its necessity.
“If vendors have all the necessary papers for the Chinese potatoes, it is not right to fine them or seize their products,” he said on condition of anonymity.
The removal of the ban is therefore “a necessary move” of the municipal administration to “fix its regulations,” the official said.
Da Lat is known as Vietnam’s hub of fresh, clean vegetables which are distributed countrywide.
New $80 million project for Ho Tram
Tanzanite International has recently revealed plans to develop a hospitality real estate project in Ho Tram, Xuyen Moc district in Ba Ria Vung Tau province.
The Hamptons Ho Tram will comprises 300 condotel apartments and 24 beach villas with investment of $80 million in the first phase, according to Mr. Ho Vinh Tuan, General Director of Tanzanite International. Construction is expected to begin in the second quarter of 2016.
“Tanzanite also plans to develop two more projects in Ho Tram over the next ten years with investment of $400-500 million,” Mr. Tuan told VET.
Tanzanite International owns a land plot of 37 ha in Ho Tram with a 1.7 km beachfront to develop three projects.
This site is in a strategic location, just 90 minutes away from Ho Chi Minh City by car, said Mr. Nguyen Nam Son, Chairman of Tanzanite International. Ho Tram is accessed via the new Long Thanh – Dau Giay Highway, which opened in 2014. It also boast a beautiful landscape, with the beach, a river, and mountains and is unaffected by natural disasters, unlike other coastal locations in the country.
Tanzanite International is a real estate developer established and managed by real estate and finance experts from the US, Hong Kong, and Singapore. Headquartered in Singapore, it has recently come to Vietnam with a long-term commitment to developing seaside hospitality and resort real estate in the country.