The Vietnam Assets Management Company (VAMC) plans to issue VND35 trillion (US$1.67 billion) worth of bonds to buy bad debts from credit institutions this year, said the company's vice chairman Le Quoc Hung.
The company will soon submit its plan to the State Bank of Vietnam (SBV) for approval.
A group of VAMC staff will work with several joint stock banks in the country's southern region this week. The banks are expected to be the VAMC's first customers this year, according to Hung.
A VAMC bond will be equivalent to a contract buying and selling the debt. In cases where the bad debt is a syndicated loan, VAMC will issue a bond for every credit institution taking part in the loan. The value of bonds will be equivalent to the bad debt's buying price at book value.
With the refinancing rate to credit institutions as much as 70% of the price of bonds issued by VAMC during the bad debt resolution process and an annual provision of 20% for the bonds made by the credit institutions, VAMC is expected to attract and encourage many banks to sell their bad debt.
The bonds can be deposited at SBV free of charge.
Blue chips lead mixed results on VN markets
On the HCM City Stock Exchange last week, the VN-Index rallied 0.16 per cent over the previous Friday's close to 477.19 points.
Meanwhile, the HNX-Index on the Ha Noi Stock Exchange fell 1.7 per cent to 59.17 points. Large-cap stocks tracked by the website vietstock.vn's VS-Large Cap index were the only group of stocks to add value.
The average trading volume in HCM City jumped around 37 per cent compared to the previous week, reaching VND776.6 billion (US$36.98 million) per session, thanks to activities of foreign investors, who were net buyers for the week by VND355 billion ($16.9 million).
Trading averaged VND248.3 billion ($11.7 million) and 37.6 million shares in Ha Noi.
Cash flows focused on shares of exchange-traded funds' plans to revise their portfolios, such as Da Nang Rubber (DRC), Sai Gon-Ha Noi Bank (SHB), Pha Lai Thermalpower (PPC), PetroVietnam Finance (PVF) and construction giant Vinaconex (VCG).
Notably, over 36.6 million SHB shares changed hands last Friday, accounting for 51 per cent of the northern bourse's transactions, in which foreign investors bought more than 35.4 million shares.
On the HCM City Stock Exchange, more than 24 million PVF shares were traded, representing eight per cent of the exchange's total transaction value. PVF will be delisted tomorrow to merge with Western Bank. The bank can only list shares after the merger if the bank has been operating for at least one year, among other conditions.
The rally last week was modest and did not form any significant technical signals, said ACB Securities Co analysts, adding that the market might "slightly recover" but "soon decline".
They predicted the VN-Index could decrease further to the support level of 460-465 points, while the HNX-Index struggled around 58-59 points.
US rejects anti-subsidy tax on Vietnamese shrimp
The US International Trade Commission (ITC) has announced Vietnamese shrimp products exported to the country will not face any anti-subsidy taxes.
In a decision announced on September 21, the ITC said shrimp products from Vietnam and four other countries cause no property losses or threats to domestic American production, concluding the anti-subsidy lawsuit initiated by the Coalition of Gulf Shrimp Industries (COGSI).
Vietnamese shrimp are now freed from the higher Department of Commerce (DOC) taxes imposed under its August ruling and will be subjected to lower rates between 1.15–7.88 percent.
The DOC decision was prompted by COGSI’s accusation of the Vietnamese shrimp sector received unreasonable government subsidies.
US seafood importers strongly opposed COGSI’s lawsuit. Retail groups such as Sysco, Publix Supermarkets, Censea, and Costco said the DOC’s proposed tax rates were especially unreasonable considering the majority of imported shrimp is farmed stock. The US wild shrimp industry does not service the same market.
The ITC’s decision means any taxes collected from businesses at the previously imposed rates will now be refunded.
On September 10, the DOC acknowledged Vietnamese frozen shrimp does not indulge in US market price dumping and extended a zero percent tax rate to all 33 Vietnamese businesses serving US importers.
According to the Vietnamese Trade Office in the US, the decision affirms all Vietnamese shrimp exporters operate following the laws of the market and have not received any Government subsidies.
They should be treated fairly and equally in a manner reflecting the forward progress Vietnamese and US economic and trade relations have demonstrated in other spheres.
Japanese investment projects in Ba Ria-Vung Tau
Ba Ria-Vung Tau province is now home to 18 Japanese investment projects worth US$1.7 billion, which are generating thousands of jobs for local workers.
Provincial People’s Committee Chairman Tran Minh Sanh says Japan was one of the first foreign investors in the locality soon after the introduction of open-door policy, and many Japanese firms have been operating successfully.
He cites Vina Kyoei Steel Company and Hikosen Cara Garment Company as the first getting off to a good start in the first wave of Japanese investment.
Hikosen Cara founder Sachiko Okyuyama decided to invest in the Vung Tau-Con Dao special zone (now Ba Ria-Vung Tau province) in 1990 after negotiating a joint venture with Vung Tau import-export company. With its licence renewed in 2000, Hikosen Cara set up a garment company under its 100 percent ownership.
Vina Kyoei’s factory began operation in Phu My 1 Industrial Zone in 1995, serving as a foundation for the country to set up a steel production centre later.
It has recently built an additional steel billet production factory with an annual capacity of 450,000 tonnes, offering stable employment to 250 labourers in 20 years.
Vina Kyoei General Director Mitsuhiro Mori says he is enthusiastic about the investment environment in Vietnam, particularly in Ba Ria-Vung Tau province.
Despite the impact of global economic slowdown, his company has poured US$220 million into the steel billet production plant to raise its annual capacity to 500,000 tonnes.
Mori hopes the new plant create more employment opportunities for local people.
Nippon Steel & Sumitomo Metal is another case in point. It established Nippon Steel & Sumikin Vietnam Company in 2010 and built a steel pipe production factory for transport infrastructure construction in Phu My 2 Industrial Zone in June the same year.
Nippon Steel Vietnam Company General Director Kenichi Kanezaki says the factory is the group’s first steel production project outside Japan. He says he was attracted to Ba Ria-Vung Tau by its open investment environment, attentive provincial authorities, abundant human resources, and friendly and industrious workers.
Twelve of 18 Japanese investment projects in Ba Ria-Vung Tau are concentrated in steel and PV pipe production, mechanics, fungi, seaport construction, garments, and seafood.
FDI exceeds annual national target
The volume of registered foreign direct investment (FDI) in Vietnam has exceeded the year’s target, but the country’s FDI mobilisation still faces problems ahead.
The Ministry of Planning and Investment (MPI) estimated this year’s registered FDI capital to be US$13-14 billion, compared t last year’s US$13.01 billion.
However, figures released by MPI’s Foreign Investment Agency revealed that FDI poured into Vietnam between January 1 and August 20 amounted to US$12.63 billion, a year-on-year increase of 19.5 percent.
The Saigon Economic Times reported newly licensed FDI projects across the country have brought total registered FDI capital to over US$14.4 billion, higher than the year’s target set by the ministry.
In addition, new projects licensed in other provinces in September have yet to be included.
There are still more than three months to go and FDI is forecast to increase more strongly, meaning the year’s total FDI amount will be much higher than the target.
Despite high FDI, the domestic investment environment is not as competitive as countries in the region,
MPI Minister Bui Quang Vinh has said Vietnam is becoming selective about FDI as the country now prefers to have environmentally friendly projects with high technology and high added value.
Attracting FDI has become more problematic as infrastructure in Vietnam is still not good enough and administrative procedures have not improved much, according to Vinh.
Government incentives to support Central Highlands
The Government will spend at least VND1.5 trillion (US$71.43 million) from the State budget annually to support investment in the Central Highlands, where investors are to receive special incentives, according to a government draft document.
The Ministry of Planning and Investment consulted authorities and experts about the draft, which works out preferential policies for the region's socio-economic development until 2020, at a seminar in Hanoi on September 20.
The document says building hydropower plants with capacities lower than 30MW to directly serve the needs of people living in remote areas is encouraged.
Other areas of stimulus include producing and processing products from vegetables, fruits, eggs, milk and artificial forest wood; afforestation; eco-tourism development; and developing breeding farms that are linked with processing facilities and consumption markets.
Preferential policies will be applied for organisations, enterprises, communities, cooperatives, households and individuals that meet authorities' requirements and environmental standards when investing or doing business in Dak Lak, Dak Nong, Kon Tum, Gia Lai and Lam Dong provinces.
Power developers will receive subsidies amounting to half of bank loan interest for 6% of the borrowing sums within the first seven years of borrowing contracts. This assistance will run through 2020.
For every hectare of forest, growers and managers will be granted money amounts equaling 30% of the minimum wages every year.
Those allocated with forest for production will enjoy all products on the assigned areas and will be subsidized for all seedling costs amounting up to VND15 million (US$714) per hectare.
An official from the Ministry of Industry and Trade said it is necessary to increase support levels for loans as well as the terms of loans to make the programmes attractive enough for households to take part in.
Deputy Minister of Planning and Investment Nguyen The Phuong said the policies are based on the specific potential of the Central Highlands and it is important to ensure policy feasibility.
At the seminar, most provincial representatives said that proper policies should be studied for the development of material plants for processing industries such as paper, coffee, rubber and cashew nuts. They suggested that hi-tech production zones should be expanded.
An official from Dak Nong proposed that the Government should cover all infrastructure investment in industrial zones and clusters to better lure investors to the region.
Representatives from Binh Dinh and Khanh Hoa provinces said that preferential policies should also be given to central coastal localities as they are closely connected with the Central Highlands.
The Vietnam Trade Promotion Agency (Vietrade) said early this year that fostering co-operation programmes for the Vietnam – Laos – Cambodia triangle is important for the Central Highlands' economic development in the coming years.
HCM City’s GDP higher than Hanoi
Hanoi and Ho Chi Minh City’s GDP grew at 7.88% and 8.7%, respectively in the first nine months of this year.
According to the statistics office, the service sector made the biggest contribution to the figure, followed by industry, agriculture and forestry and seafood sectors.
Despite achieving relatively high growth in the first half of this year, GDP growth in Hanoi seemed to slow down in the third quarter. Meanwhile HCM City’s GDP reached 10.3% in the third quarter, driving its nine month rate up to 8.7%.
Thus, the two major economic hubs nearly fulfilled their set targets (8-8.5% for Hanoi and 9.5%-10% for HCM City).
According to HCM City’s Statistics Office, in the first half of this year, the city faced a number of challenges due to stagnant real estate market, price hikes for input materials, businesses still feeling hesitant to borrow capital in spite of falling interest rates. However, all these issues have been dealt with in the third quarter of this year.
Industrial production shows positive signs. Hanoi’s industrial production value in September increased by 8.3% from a month earlier and by 7.6%on last year’s same period. . Meanwhile the HCM City’s figure stood at 6%.
In the reviewed period, around 11,410 businesses in Hanoi applied for investment licences with registered capital of VND63,000 billion, down 8.8% in volume and up 8.2% in capital against last year. HCM City’ figure was 18,795 new businesses with registered capital of VND85,243 billion, up 7% in volume and down nearly 50% in capital.
For foreign trade and foreign direct investment (FDI) attraction, the southern city’s trade surplus hit more than US$1 billion while the capital’s trade deficit reached more than US$9.8 billion. HCM City attracted more than US$1.2 billion in FDI capital while that of Hanoi was US$770 million.
Opportunity for local businesses to promote products
A Hanoi technology and equipment fair, Techmart, is due to take place from September 26-29, providing a fantastic platform for Vietnamese innovators and entrepreneurs to promote their products.
Around 248 businesses have registered to showcase their products and services on 303 stands featuring a license plate recognition software, smart house systems, gas leakage detectors via telephone, electronic scale barcode, and audio visual conferencing equipment.
The municipal Department of Science and Technology said 14 business stands from countries with advanced science and technology such as the UK, Finland and China will showcase energy saving equipment, and new and renewable energy equipment to protect human health.
During the fair, young businesses and outstanding farmers will introduce their initiatives in technology, biotechnology and agriculture, giving them the opportunity to enrich their lives and improve their future.
Hanoi CPI up 0.57% in September
Hanoi’s consumer price index (CPI) went up 0.57% in September against the previous month, or 6.68% from a year earlier, according to the municipal Statistics Office.
The city’s monthly average CPI rose 6.17% after the nine months of this year, 5.79% higher than last December’s level.
Most items in the commodity basket used to calculate the CPI (10/11) grew slightly. The sharpest price hike was recorded in education sector (2.02%) due to an increasing demand at the beginning of a new school year and higher tuition fees of vocational training colleges.
The gold price in September soared by 2.24%, while the local currency (VND) dropped by 0.11% against the US dollar.
Hanoi to host 2013 Korean Food Fair
Hanoi’s Thong Nhat Park will host the 2013 Korean Food Fair from September 26–29, featuring 15 Korean businesses and expecting to attract an estimated 50,000 visitors.
The event not only introduces Korean food and kitchenware but also holds consultations and market research discussions with Vietnamese consumers.
This fair is loosely themed around "K-food = High Quality and Healthy" and its slogan "Fun K-Food, Your Friend."
It encompasses Korean and Vietnamese cooking contests, folk games from both countries, Taekwondo demonstrations, and traditional percussion and Kpop dance performances.
Korean Agriculture, Food, and Rural Affairs Minister Lee Dong Phil explained the Hanoi fair connects ASEAN member nation importers and distributors and reinforces cooperation between Vietnam and the Republic of Korea.
French businesses seek Vietnamese opportunities
Four French businesses are planning a September 25–29 fact-finding tour of Vietnam to explore opportunities for developing cloud computing and the open source code movement in the country.
The French Trade Office in Vietnam (Ubifrance Vietnam) announced Linagora, Mandriva, Siveo, and Ubiqube—open source and cloud computing specialists—will meet with local partners and attend a September 25 cloud computing seminar in Hanoi.
Ubifrance organised the tour with the aim of consolidating relations between the two countries’ information, communication, and technology (ICT) businesses.
Ubifrance said the event is part of the 2013 French Year in Vietnam, the framework for a variety of activities marking the 40th anniversary of diplomatic ties.
Trade deficit hits US$374 million in early September
Vietnam’s import surplus crept up to US$374 million over the first half of September, bringing the yearly import surplus so far to US$226 million.
According to the latest Vietnam Customs statistics, total import-export turnover reached US$10.26 billion in the first half of this month, down 16.1% compared to the last half of August.
Vietnam’s trade value totalled US$180.35 billion by September 15, a year-on-year increase of 14.5%, with exports contributing US$90.06 billion (up 14.7%) and imports US$90.29 billion (up 14.4%).
Half-monthly exports fell 23.8% to US$4.92 billion from the second half of August.
Telephones and components, garments, footwear, computers, electronics, and components,, seafood, transportation and tools, and rice all suffered declines.
The foreign direct investment (FDI) sector’s export earnings were US$3.06 billion in the reviewed period, down 23.3% on August’s latter half. The sector’s export value for the year thus far is US$54.6 billion, up 26.5% and accounting for 60.6% of the country’s total exports.
Imports decreased 7.3% to US$5.32 billion compared to the second half of August. Commodities seeing sharp falls include petroleum, computer, electronics, and components, chemicals, and soya bean.
The FDI sector spent US$3.17 billion on imports, down 4.1% from August’s levels. By September 15, its import value totalled US$51.16 billion, up 24.4% against the same period last year and equal to 56.7% of the country’s total import value.
Vietnam makes first trade policy review
Vietnam conducted the first trade policy review (TPR) in accordance with regulations of the World Trade Organisation (WTO) from September 17-19 in Geneva.
According to Deputy Minister of Industry and Trade Tran Quoc Khanh, this is a good chance for Vietnam to confirm with the world that the country has seriously implemented its WTO entry commitments and is exerting every effort to improve its business environment despite the global financial crisis.
The independent report by the WTO Secretariat said that political and economic reforms in Vietnam have helped the country’s economy thrive, integrating more deeply into the global trade and investment system.
Vietnam has taken great steps in upgrading telecommunication system, the access to and solvency of telecommunications services, it said.
The country’s FDI inflows surged five times in the 2007-2011 period, proving that Vietnam is an attractive destination for foreign investors and has potential of long-term growth, it added.
The report pointed out that Vietnam’s annual growth averaged at 6.3 percent in the 2007-2012 period, yet the international competitiveness seems to be reducing.
Meanwhile, the report by the Vietnamese Government defines that entering the WTO is not the conclusion of a process, but the foundation for the continuous domestic reforms.
Many Asian and European countries have recognised Vietnam as a full market economy in line with the WTO’s regulations.
In 2012, inflation was kept at 6.81 percent, a sharp reduction compared with 11.75 percent in 2010 and 18.13 percent in 2011, it cited.
Vietnam’s economic growth in 2012 reached 5.03 percent, it said, adding that the Vietnamese Government plans to continue reforms in three major areas, including State-owned enterprises, financial-banking system and public investment.
Cashew exports likely to pick up
The Vietnam Cashew Association believes cashew exports will pick up in the remaining months of this year.
Dong Nai Cashew Association President Nguyen Thai Hoc says the export price of cashew which averaged less than US$6,300 per tonne in the first two quarters rose to US$7,600 per tonne by early August. But the export volume was equal to 70 percent of 2012’s levels due to capital shortage and insufficient supply.
In the first eight months of 2013, Vietnam exported 168,000 tonnes of cashew nuts and earned US$1.07 billion, 18% and 10% higher in volume and value than the same period last year.
Donafoods General Director Nguyen Thai Hoc says the company has actively negotiated the import and processing of 70,000–80,000 tonnes of raw cashew nuts ordered by African nations on behalf of Dong Nai Cashew Association members. The deal demands around US$70 million worth of funding.
Talk highlights EU-Vietnam Free Trade Agreement
The American Chamber of Commerce to the European Union (AmCham EU) has organised a talk on recent progress made in EU-Vietnam Free Trade Agreement (EVFTA) negotiations.
A Vietnamese delegation led by Ambassador to Brussels Pham Sanh Chau joined representatives from 20 US businesses including Caterpillar, Procter&Gamble, GE, Microsoft, UPS, DOW Chemical, and Amway.
Ambassador Chau briefed the representatives on the principles and positive developments made towards concluding negotiations late next year.
The US business spokespeople highlighted differences between the Trans-Pacific Partnership (TPP) and EVFTA, analysing the Vietnamese Government’s priorities during the respective negotiations and comparing the challenges encountered.
Ambassador Chau answered the representatives’ inquiries and reiterated Vietnam’s intentions to conclude the process soon. He called on AmCham EU members to lend their support to the ongoing negotiations.
AmCham EU leaders will collect positive opinions on the EVFTA and include them in the AmCham EU report scheduled for submission to the European Commission and European Parliament.
Importers favour Vietnamese fragrant rice
Vietnamese fragrant rice has become a firm favourite with many importers thanks to its high quality and competitive pricing compared to Thai jasmine rice.
Last year’s almost 600,000 tonnes of exported fragrant was a record high. Export volumes in 2013 were already at 605,000 tonnes by the end of August, a 78 percent surge beyond the comparable period in 2012.
Fragrant rice export prices hover around a stable US$540–550 per tonne. Fragrant rice varieties incorporating jasmine, such as ST5 and ST20, have even sold at US$900 per tonne, three times the average price of normal white rice with five percent broken grains.
Vietnam Food Association (VFA) Vice Chairman Pham Van Bay said that unlike white rice exports, Vietnamese fragrant rice has managed to secure majority market shares in many Asian nations and is expanding its reach into emerging African and European markets.
Local firm wins US$2.5 million Laos contract
Information Systems (FPT IS) announced its successful negotiation of a US$2.5 million telecommunications contract with a Lao trade partner on September 19.
Under the contract, FPT IS and the Lao Telecom Company will cooperate on developing payment calculation, customer management, and service distribution systems.
FPT IS has secured a firm foothold in the Lao market. In April 2013, the firm won another contract with the Lao Telecom Company worth more than US$1 billion.
FPT IS’s systems and solutions, first created in 1999, have generated total revenues approaching US$35 million, including almost US$14 million from overseas markets.
Their approach is ubiquitous in Vietnam and is used by 12 foreign telecommunications service providers. It is capable of handling payment-related issues for providers with as many as 30–50 million subscribers.
FPT IS Director General Duong Trieu Dung affirmed his company’s Vietnamese solutions are now focused on expanding into new emerging international markets.
HCM City continues to attract Japanese investors
Many Japanese investors are keen to invest in Vietnam in the time to come, said the visiting Japanese Senior Vice Minister of Foreign Affairs Matsuyama Masaji in Ho Chi Minh city on September 18.
Chairman of the Ho Chi Minh City People’s Committee Le Hoang Quan welcomed the guest by saying that despite the global economic turmoil and natural disasters in recent years, Japan has continued to provide Vietnam with a significant amount of ODA.
Japan tops other Official Development Assistance (ODA) providers for Vietnam as its annual amount has hit US$1.8 billion. The assistance has reflected its fine relation and warm feelings for Vietnam, Mayor Quan added.
The Japanese guest also said on the basis of mutual trust between the two Governments and peoples as well as bilateral strategic partnership, Japan wishes to step up wide-ranging cooperation with Vietnam.
The Japan’s ODA has assisted HCM city to implement many huge projects including Ben Thanh- Suoi Tien metro line, water project and Tan Son Nhat International Airport, Quan noted.
For his part, Masaji expressed his pleasure at the sound development between the two countries in general, HCM city and its Japanese partners in particular.
He also thanked the municipal authorities for favourable conditions given to Japanese investors. He hoped Vietnam would continue to improve investment environment for Japanese investors.
Japan currently has 670 investment projects worth over US$3 billion in HCM City. The two-way trade between HCM city and Japan made an increase in 2012.
The city exported US$2.5 billion worth of goods to Japan while spending US$1.34 billion on imports from the country.
Vietnam runs record trade surplus with US
Vietnam has boosted its exports to the US in the first eight months of this year, producing a trade surplus of US$11.68 billion, according to Vietnam Customs.
Its eight-month exports rose slightly by 4% to US$15.14 billion compared to the same period last year, while its imports fell 5% to US$3.46 billion.
Two-way trade has increased sharply over the years, especially after Vietnam joined the World Trade Organisation in January 2007, from just US$6.77 billion in 2005 to US$11.79 billion in 2007 and US$24.49 billion in 2012, despite the negative impact of the global economic recession.
Vietnam has achieved a big trade surplus with the US, surpassing the US$10 billion benchmark in 2010, up 26.5% over the previous year.
The trade surplus rose to US$14.8 billion in 2012 thank to Vietnam’s four-fold increase in its exports to the US.
The US is now Vietnam’s second biggest trade partner after China, and the biggest in America.
However, according to the United Nations Commodity Trade Statistics Database (UN Comtrade), the trade value between the two countries just accounts for nearly 1% of the US’s total import-export value. Vietnam ranks 23rd among exporters to the US and 40th among importers of US goods.
Garments have maintained their leading export position over the years, earning US$7.4 billion in 2012, accounting for 38% of Vietnam’s total export value to the market and nearly 50% of the country’s garment export value globally.
Other key export items are timber products, seafood, and footwear.
Vietnam mainly imports machinery, equipment, tools, computers, electronics and components, cotton, plastic material, animal food, and soya bean from the US.
Switzerland increases development aid to Vietnam
Switzerland announced on September 18 that it will increase development aid to Vietnam in the next four-year period to 123 million Swiss francs (US$132.8 million).
This represents an increase of about 50% compared with the budget for the previous four-year period, according to Swiss Ambassador to Vietnam Andrej Motyl.
In line with Vietnam’s aim to become an industrialized country by 2020 and its middle-income status, Motyl said the focus will shift from poverty reduction to economic development cooperation.
The new development framework stresses supporting Vietnamese small-and-medium enterprises to increase their productivity and competitiveness through better access to credit. “If the small-and-medium enterprises wither away, the whole future of the economy will be at stake,” he said.
Since 1992, Switzerland has contributed about US$360 million to Vietnam’s socio-economic development and reform agenda.
At the launching ceremony of the new development framework, Deputy Minister of Planning and Investment Nguyen The Phuong applauded the Swiss help and said that Vietnam will improve the progress of Switzerland’s investment projects in the country, which totaled about US$2 billion in 2012.
Korean ODA to build business incubator in Can Tho
The Republic of Korea will contribute US$18 million in ODA to a US$21 million project to build an industrial technology incubation centre in Can Tho city.
The centre will be built on a 4.5ha area of land at Tra Noc 2 Industrial Zone in O Mon district.
The project will be divided into three phases from September 2013 to December 2015, ranging from preparations and trial run to business cooperation. From January 2016, Vietnam will directly manage, operate and develop the incubation without assistance from the RoK.
The centre aims to form and develop industrial technology for small and medium sized enterprises. It will also be a suitable tool for promoting the development of high-tech businesses, creating a technological environment and generating new jobs for people in the Mekong Delta region.
Dong Nai attracts over US$321 million in FDI
The southern province of Dong Nai has attracted 55 foreign direct investment (FDI) projects, worth more than US$312 million, by mid-September.
It has also licensed eight new domestic projects with a total registered capitalisation of VND1.44 trillion and 55 operational projects registering an additional capital worth US$450 million.
According to the provincial Management Board of Industrial Zones, the total FDI investment in industrial parks remained the same, but the number of newly-licensed projects doubled compared to the same period last year.
Despite the current difficult economic slowdown, Dong Nai is optimistic about foreign direct investment (FDI) inflows. Japan is one of the major foreign investors in the province with a number of newly-licensed projects accounting for 50% of the total.
The Japanese enterprises have prioritised environmentally friendly projects in high technology and support industry, which are energy efficient and have high added value..
To attract more investors, Dong Nai pays attention to accelerating administrative reform, promoting infrastructure and training to improve the quality of its labour force.
So far, Dong Nai has attracted nearly 1,250 projects of which 900 are foreign invested with a combined capital of US$15 billion.
WTO values Vietnam’s policy reform
The World Trade Organisation (WTO) has acknowledged Vietnam’s efforts in introducing trade policies, in line with WTO rules and regulations, since it joined the organisation in January 2007.
All 27 members of the Trade Policy Review Body (TPRB) on September 17 spoke highly of the achievements Vietnam has made since its accession, considering Vietnam a success story.
In an interview granted to Vietnam News Agency, Deputy Minister of Industry and Trade Tran Quoc Khanh, who is leading a Vietnamese delegation to the Trade Policy Review in Geneva, said the TPRB delegates were impressed by Vietnam’s trade policy developments.
They proposed Vietnam continue finalising its legal system, accelerating administrative reform, especially investment and export procedures, strengthening the enforcement of intellectual property rights, and speeding up the restructuring of State-owned enterprises.
Some asked Vietnam to further open up its market for a number of services and timely inform the WTO of changes in its trade policies.
The review is initiated by the WTO to assess trade policies of its members, helping them perfect their policies in conformity with WTO rules and regulations.
This is the first time Vietnam has presented its report to the WTO after it joined the world’s largest trade body six years ago.
If its trade value in proportion to global trade remains stable, the second review will take place in another six years time. If the proportion increases, the timing for review will be shortened to four or even two years.
Vietnam worked closely with the WTO Secretariat to complete a 183-page report on the country’s trade policies. It also answered more than 500 questions after the report was transferred to WTO members.
According to Khanh, Vietnam hopes to learn from experts’ recommendations to finalise its legal system and improve its business environment.
“This is also a chance for Vietnam to promote its image globally, showing how we are serious about fulfilling WTO commitments,” said Khanh.
Local businesses seek opportunities in Indonesia, Myanmar
Economists have suggested Vietnamese businesses target trade with Indonesia and Myanmar in order to benefit from the soaring customer demand and rapid growth of the retail sector in these countries.
At a seminar held in Ho Chi Minh City on September 17 they said Vietnamese businesses need to compose suitable strategies to effectively exploit the two potential markets.
When an ASEAN Community is formed in 2015, Vietnam will fully implement many regional free trade agreements, offering both opportunities and challenges for its businesses.
Local businesses should build more distributors and communication agencies to raise public awareness about new products, the economists added.
Truong Cung Nghia, Managing Director of Truong Doan Company, described Indonesia as one of the most attractive markets of the ASEAN Community due to its large population, rapid urbanisation and huge levels of consumption.
Participants at the seminar claimed that Vietnamese businesses have favourable conditions for operating in the two markets, which prioritise high-quality products with clear origins.
They added that both Indonesia and Myanmar have rolled out a range of incentives for the private sector as they are on a path towards market-orientated economies.
Le Duc Duy, Sales Manager of Vinamit JSC, mentioned Myanmar’s strengths in agriculture and education as decisive factors allowing Vietnamese businesses to achieve there.
Meanwhile, Vo Tan Thanh, Director of the Vietnam Chamber of Commerce and Industry (VCCI)’s Ho Chi Minh City branch suggested Vietnamese businesses improve the country’s image in Myanmar by introducing quality products to the market and concentrating on packaging, design and publicity work.
Pakistan – a key market for local exporters
Vietnam earned US$99.5 million from exports to the Pakistani market in the first seven months of 2013, up 4% year on year, according to the Vietnam Customs.
Its key export items included tea, coffee, seafood, pepper, rubber, machineries, and garment and textiles.
Meanwhile, Vietnam’s imports from Pakistan in the reviewed period were valued at US$79.1 million, a year-on-year decrease of 40.9%. Its key import items were materials for the garment industry and pharmaceutical products.
The Department for Africa, West Asia and South Asia Market under the Ministry of Industry and Trade (MoIT), said Pakistan is one of Vietnam’s largest export markets in South Asia, second only to India.
The trade turnover between Vietnam and Pakistan has grown considerably in recent years, hitting US$390.6 million, with Vietnam’s exports to Pakistan rising 3.8% on the previous year.
Since the two countries established diplomatic ties in November 1972, they have signed many agreements to create a better legal framework for bilateral trade exchange. Among them are the agreement on double tax avoidance, the framework agreement on science and technology cooperation, the agreement on annual consultancy between the two Foreign Ministries, the agreement on aquatic environment development and aquaculture cooperation, the agreement on visa exemption for diplomatic and official passport holders, the memorandum of understanding (MoU) on the establishment of Vietnam-Pakistan Joint Committee, and another MoU on cooperation between the central banks of Vietnam and Pakistan.
Vietnam’s food processing sector seeks outlets to European market
A program was launched in Hanoi on September 18 to promote the export of products from the food processing sector to the European market.
Do Thang Hai, Director of the Trade Promotion Department, said that the department is cooperating with the Netherlands’ Centre for the Promotion of Imports for developing countries (CBI) to help businesses nationwide improve their designing skills and market research
Hai said the new agreement will lay a legal foundation for both sides to cooperate and promote the export of products, especially high-valued products from the food processing sector to the European market.
Dutch Ambassador to Vietnam Joop Scheffers said Vietnam’s traditional products such as rice, coffee and pepper have already penetrated the international market. But many other export items are yet to overcome trade barriers.
The export promotion support program is estimated at EUR1.5 million including EUR1 million from CBI and the remainder from Vietnam.
The program will run from 2013 to 2016 for potential export businesses and the CBI will provide consultancy advice for them to organise an international fair on food processing in Vietnam next year.
Local businesses explore milk market potential
Recent market surveys show liquid milk products are destined to stand firm on home turf. The consumption of sterilised fresh milk is on the increase when Vietnamese people are better off and aware of the need for adequate nutrition.
Nguyen Phuong Dung, a resident of HCM City, says her family drinks fresh milk produced by local companies.
Brands such as Vinamilk, Dutch Lady, TH True Milk, Nutifood, Hanoi Milk, Ba Vi Milk, Moc Chau Milk, and Long Thanh Milk are gaining a bigger share of the domestic market.
Nielsen Vietnam reports that by July 2013, the milk market was dominated by Vinamilk (48.7%), FrieslandCampina Vietnam (25.7%), and TH True Milk (7.7%). Its research concurs with other expert forecasts of a promising project for production in Vietnam.
FireslandCampina Vietnam’s Legal and Corporate Affairs Manager Truong Van Toan says per capita consumption in Vietnam is still relatively low, just at 15 litres a year, compared to 21 litres in Thailand and 25–27 litres in China.
Against this backdrop, several local businesses are focused on building and expanding milk factories to meet quality control, food safety and hygiene, and environmental protection standards.
Vinamilk’s (Vietnam Dairy Products Joint Stock Company) My Phuoc 2 Industrial Park “super factory” in the southern province of Binh Duong, has just got off the ground, with an initial capitalization of VND2.4 billion. In the first phase of operation, it has an annual capacity of 400 million litres of milk, equal to Vinamilk’s existing nine factories combined. Production capacity is expected to grow to around 800 million litres per year in the second phase.
Vinamilk Chairman and CEO Mai Kieu Lien says the factory will help Vinamilk increase its annual milk output by 10% and raise its domestic market share from 47.8% to 60%.
Vinamilk has a plan afoot to develop a “material supplying zone” up to international standards that encompasses grass cultivation, bovine food processing, veterinary monitoring, and environment protection.
Lien says her company began investing in fresh milk production by cooperating with farmers in 1990. It currently purchases almost 500 tonnes of fresh milk from farmers per day, but only meets half of the new factory’s requirement. Land shortage is a major stumbling block. “If there is enough grass land, we can raise cows ourselves, in the interests of quality control,” she says.
Her company has set up five farms, with another taking shape in Tay Ninh province and two more in Thanh Hoa province.
A representative of FrieslandCampina Vietnam says from now until the end of the year, the company will re-launch its 100 percent fresh milk products which mere suspended in 2011 due to material shortages.
TH True Milk Joint Stock Company has joined the market since 2008. It is not directly involved in raising cows and building farms, but works closely with farmers on improving grass cultivation, cow breeding, and technical facilities.
FrieslandCampina Vietnam has as many as 35,000 head of cattle raised in the northern, central, southern, and central highland regions, boasting its daily milk output of around 240 tonnes.
FrieslandCampina Vietnam, TH True Milk, and Moc Chau are set to develop their own “material supplying zones” in line with modern farming techniques. There is high hope that local businesses will soon secure a firm foothold on the domestic market.
Vietnam attends seminar on Indian handicrafts
Vietnamese hand embroidered products and sculpture paintings have been displayed at an international seminar which opened in New Delhi on September 17.
The event aimed at promoting the export of Indian handicrafts, involved many experts and artisans from Vietnam, China, Thailand, the Philippines, Japan, Ireland and India,
The Vietnamese delegation was led by Vice Chairman of the Vietnam Handicraft Exporters Association (Vietcraft), Le Ba Ngoc. He said that this is the first time Vietnam has attended the seminar in India. Two Vietnamese artisans specializing in embroidery and sculpture have made impressive demonstration at the seminar.
Ngoc expressed hope that Vietnam will share its own experiences with other nations in the context of international integration.
India’s Development Commissioner (Handicrafts), Shri S.S. Gupta emphasized that the export of handicrafts has grown at an average annual rate of 15% for several decades. However, he said, India has yet to exploit the international market as its handicraft products account for less than 2% of the world’s market shares.
Vietnam, Russia promote effective economic cooperation
Deputy Prime Minister Nguyen Thien Nhan and his Russian counterpart Olga Golodets have agreed on the need to take robust measures to boost bilateral economic cooperation effectively.
The two Deputy PMs made the consensus at their meeting in Moscow, Russia, on September 17, which includes the early signing of a free trade agreement between Vietnam and the Customs Union of Russia, Kazakhstan and Belarus, and the speeding-up of cooperation in the field of energy.
They were unanimous in measures to further their strategic cooperation in science – technology and education – training and agreed to accelerate the signing of a framework agreement on this area.
Deputy PM Nhan and his Russian host concurred in increasing Russian scholarships for Vietnam, stepping up the establishment of a Vietnam – Russia Technology University, building a nuclear science and technology centre in Vietnam, and promoting the teaching of Russian language and literature in Vietnamese educational institutions.
They affirmed to create all possible conditions for the two countries’ ministries, sectors, academies and research institutes to establish and expand cooperation.
The two sides hailed the contribution of the Vietnamese community in Russia and the Russian community in Vietnam to both countries’ traditional relations and cooperation while pledging favourable conditions for their living, studying and working in line with each country’s laws.
Earlier on the same day, Deputy PM Nhan met with First Vice Chairman of the Russian State Duma Ivan Melnikov.
Deputy PM Nguyen Thien Nhan (left) and First Vice Chairman of the Russian State Duma Ivan Melnikov
He said that besides traditional fields, Vietnam and Russia can broaden their cooperation in economics, banking, agriculture, transport, energy, sea-based economy and others.
Particularly, the construction of joint universities and research centres are opening up good prospects, bringing education – training into a field of their strategic cooperation.
The Vietnamese guest also asked the First Vice Chairman of the Russian State Duma in his capacity to support the cooperative ties between the two legislative bodies.
For his part, Melnikov reiterated that the Russia parliament will back Vietnam’s proposals to further cooperation in education – training, the establishment of joint research and education – training institutes, while considering an agreement on the travel of individuals as well as military technical cooperation.
He also asked the two legislative bodies to increase exchanges, and enhance cooperation between localities and young generations, as well as that in tourism and culture.
August’s export surplus hits US$600 million
Vietnam’s export surplus crept up to US$600 million in August, bringing the eight month trade surplus total to US$176 million.
According to the latest Vietnam Customs statistics, August’s import-export turnover was estimated at US$23.24 billion—up 1.9 percent on July.
Vietnam’s trade revenue hit US$85.16 billion by month’s end, a year-on-year increase of 15.1 percent.
Key export commodities included telephones, computers, electronics, transport vehicles, garments and textiles, and a number of agricultural products.
Foreign direct investment (FDI) business export earnings reached US$51.55 billion (excluding crude oil export), rising 26.7 percent from a year earlier and accounting for over 60 percent of Vietnam’s total export revenue.
From January to August 2013, Vietnam recorded US$84.99 billion worth of imports, up 14.4 percent in annual terms.
FDI businesses spent US$48 billion on imports, 24.3 percent higher than the same period in 2012 and equal to 56.5 percent of the country’s total import value.
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