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BUSINESS IN BRIEF 25/6
Legal
documents on business operations lack transparency
Legal
normative documents (LND) governing business activities still lack
transparency, according to a survey by the Vietnam Chamber of Commerce and
Industry (VCCI).
Ministries
and other Government agencies often ignored business associations' and
enterprises' opinions and feedback, despite the Government's responsibility
to create the legal documents that govern them, the survey found.
VCCI
questioned 288 business associations representing more than 409,000
businesses across the country. The results were presented during the
Ministerial Efficiency Index (MEI 2014) Conference VCCI held on June 22.
Attendees evaluated and reviewed the development of business laws by
ministries and the State Bank of
"The
majority of business associations said they were not consulted about, not
aware of and not allowed to participate in the making of legal documents,
which were designed to govern their business activities," said Nguyen Thu
Trang, deputy head of VCCI's Committee of Legal Affairs.
VCCI's
MEI Report uses the business associations' survey results to rank ministries'
efficiency in five categories, including the quality of LND, law
dissemination and law implementation. This year's showed that six out of 14
ministries scored below average in LND transparency. The leading Ministry of
Planning and Investment's score was just above average, while the scores for
quite a few others were even lower than the previous ranking in 2012.
"It
would seem Government ministries felt quite reluctant to publicise drafts of
their legal documents, for fear of pressure from the public and added
responsibility if they were not well-received," Trang said.
Pham Tat
Thang, an economic expert, said asking businesses and residents for feedback
was a crucial part of building policies and regulations. On top of collecting
opinions from citizens of all walks of life, Government ministries needed to
really listen to them to create practical, effective laws that reflect
reality.
The MEI
2014 report says other than LND transparency, ministries scored higher than
on the MEI 2012 in four out of five categories, with an average increase of
10.07 percent.
VCCI
Director Vu Tien Loc said the MEI 2014 was an encouraging sign that
ministries were continuing to reforms. The rankings would urge them to
improve LND transparency, Loc said.
Exports
to
Major
export products included mobile phones and components, computers, electronic
products, means of transport, machines and equipment, footwear, garment and
construction materials.
Exports
to
Meanwhile
Vietnam
attends Int’l Trade Show in South Africa
Vietnamese
businesses joined more than 1,000 others from 39 countries worldwide in the
22nd Southern African International Trade Exhibition (SAITEX) in
The
Hanoi Association of Small-and Medium-sized Enterprises displayed
agricultural products, textiles and garments, construction materials,
computers, software, home appliances and handicrafts made in Hanoi and other
localities at 3 stands.
The
stands attracted more than 200 importers from
Vietnamese
businesses also had a chance to welcome Connie Bapela, Speaker of Council,
the City of
Bapela
affirmed that
Domestic
businesses should improve the quality and diversify products, actively study
The
Government will also create a niche for businesses to boost export, Hoang
asserted.
On the
occasion, a visiting delegation from
This
year’s SAITEX attracted around 15,000 visitors.
AEC
integration – no ‘magic bullet’ for
The
Ministry of Agriculture and Rural Development (MARD) recently said the
realization of the ASEAN Economic Community (AEC) by the end of 2015 is not a
panacea for agriculture’s sustainability.
Though
the establishment will see tariffs on agriculture exports shipped to ASEAN
member states progressively eliminated— a significant number of challenges
will remain, particularly those related to overuse of chemicals and post
harvest loss.
Officials
at MARD revealed that during the first six months of the year, an alarming
number of agriculture, forestry and aquatic products were unable to pass
quality assessment tests.
They
said 6.8% of meat randomly sampled tested positive for excess antibiotic
residual. Meanwhile 1.24% of the samples for seafood and 5.4% for vegetables
were substandard.
“This is
a big red flag signalling violations of food hygiene and safety standards are
at an alarming level,” they said adding that it poses a serious threat to the
health and welfare of the nation’s residents.
Just as
importantly these shortcomings are a forewarning the products won’t pass the
strict standards for import set by other AEC member nations and therefore
In
addition, if products do not comply with the requisite quality standards of
the importing nations, those products will be denied entry and importing
nations allowed to impose high tariffs as a penalty.
The
fundamental problem, according to MARD, is that businesses have failed to put
internal control systems in place to insure products are consistently
produced on a timely, economical and quality basis.
The
problems associated with this haphazard and unorthodox approach to
agriculture must be overcome if
Nguyen
Minh Phong, a leading economist, in turn said he agrees with MARD’s
assessment but also notes post harvest loss is another issue that must be
resolved if Vietnam agriculture is to be competitive in the AEC.
Post-harvest
loss (PHL) resulting from harvesting, drying and storage happens at all
stages and results in substantial losses – both quantitative (physical losses
caused by rodents, insects or infestations) and qualitative (loss of quality
and value).
“Farmers
and businesses in the agriculture, forestry and aquatic sector must devise
better post-harvest and transport plans to improve the freshness of their
products for shipment to foreign markets.”
Products
in these industries are quite naturally highly perishable and preservation
methods need to be substantially revised to incorporate the latest
technologies Phong said.
According
to MARD officials, the abusive use of chemicals and antibiotics is the most
alarming issue as it badly damages the reputation of agricultural products
and serves as a low benchmark by which the Made-in-Vietnam label will be
judged.
It’s a
flagrant disregard for food hygiene and safety standards and with such an
attitude businesses will find it difficult to establish themselves in any
market, regardless of the tariff structure, they said.
Nguyen
Phuong
“Most
businesses in the agriculture and seafood industries need to completely
revamp their production methods to ensure compliance with food hygiene and
safety standards.”
Weak
post-harvest preservation technology and capacity is not just a problem for
the export market as it spills over and negatively impacts the domestic
market due to spoilage and lost sales.
For his
part, Hoang Trung, deputy head of the Plantation Protection Department (PPD),
said substantial investment in upgrading the infrastructure with such items
as new silos for storage and the latest technologies is the solution.
To deal
with the current weakness in post harvest losses, the government must devise
comprehensive specific policies and guidelines for agricultural businesses
and raise the required investment needed, Trung said.
Currently,
some businesses are experimenting with technologies such as GAP and some
preservation technologies from
Hanoi
to host Int’l Techmart Vietnam
A
technology, equipment and trade fair, known as International Techmart
On
display will be 600 stalls with 3,000 equipments.
Within
the Techmart, customers will be introduced to new technology and software
solutions, and provided with free consultancy to use technology effectively.
Besides,
seminars and exchanges among businesses will be held.
The
event, co-organized by Ministry of Science and Technology and Hanoi municipal
People’s Committee, aims to boost technology transfer and research
cooperation among Vietnam and ASEAN+3, and EU, Russia and the US.
China
companies want farm trade centre in Vietnam
The
China Business Association in
The idea
to set up an agriculture trade centre in the Mekong Delta was discussed with
the authorities of Can Tho City on June 17. The centre will be a place for
all agriculture, aqua products and agriculture supplies, such as fertilizer
and farm equipment.
Professor
Vo Tong Xuan, director of Nam Can Tho University, said the centre is a good
idea because
"An
outlet for agriculture products of the Mekong Delta will be ensured," he
said, "If the centre goes ahead, trade will be more transparent and
prices can be kept more stable."
Son Van
Luan, president of Binh Tan Sweet Potatoes Cooperative in
Luan
said an official trade centre would help farmers better understand buyers and
markets, so they can adjust production to match demand.
Some
farmers remain skeptical and worry about their legal standing. They said more
details are needed, such as who would act as their representative in
negotiations, and who would manage the operation.
Tran Huu
Hiep, head of the Economic Department, said domestic firms needed to become
involved to help connect and coordinate provinces and cities of the Mekong
Delta.
Chan
May port in Thua Thien-Hue to be upgraded
The
Royal Caribbean International Group of the
The
agreement was recently signed between the group and the Vietnam Shipbuilding
Industry Corporation.
According
to Phan Tien Dung, Director of the Thua Thien-Hue Department of Culture,
Sports and Tourism, the province predicts it will welcome approximately
70,000 visitors by sea in 2015.
The
Celebrity Royal has committed to bring around 25,000-30,000 tourists to the
province this year, he added.
Non-life
insurance firms lack qualified actuaries
Non-life
insurance companies in the country are faced with a shortage of actuaries who
meet national standards, according to the deputy general secretary of Vietnam
Insurance Association.
Beginning
in January next year, non-life insurance companies are required to use
actuaries who meet national standards, including being a fellow of
international actuary societies, having at least five years of work
experience and at least two certificates in the field issued by international
actuary societies.
Only one
actuary in the country meets these standards, according to Ngo Trung Dung,
Deputy General Secretary of Vietnam Insurance Association.
Speaking
at a recent workshop at the International University-HCM City, Dung said the
country has 30 non-life insurance companies, 17 life insurance companies and
two re-insurance companies.
No
university in the country offers training in actuary, he said, adding that
the International University-HCM City should be a pioneer in training.
It
should cooperate with other international universities to offer training, he
said, adding that incomes of actuaries are high.
The
country's insurance market has seen rapid development. Within the last five
years, the market's growth rate reached 16 percent, including 11.9 percent
for non-life insurance.
Last
year, the total revenue from insurance was around 2.6 billion USD. The total
assets of insurance companies were 7.7 billion USD.
The
workshop, held by the association in cooperation with the International
University-HCM City and Vietnam Insurance Association, provided information
about a relatively new statistical method called chain ladder. This method is
used to estimate outstanding claims, whereby the weighted average of past
claim development is projected into the future.
Move
to help insurance brokers
The
legal framework for the operation of insurance brokerage companies will be
improved to enhance their competitiveness, according to the Insurance
Supervisory Authority under the Ministry of Finance.
The
department's director Phung Ngoc Khanh said at a conference on June 17 that
insurance brokerage was becoming an important factor for the development of
the insurance market as well as the country's socio-economic development.
At the
conference, brokerage firms spoke about the difficulties they face and
proposed various improvement measures to the insurance watchdog.
Firms
said that detailed regulations for operations and insurance brokerage fees
are needed.
They
pointed out that in
According
to the statistics of the Ministry of Finance, total insurance premiums
through the brokerage channel increased rapidly by 22 percent last year.
During
the 2011-14 period, total insurance premiums through brokerage reached 21.165
trillion VND (979.8 million USD), or equivalent to 22.7 percent of the total
non-life insurance premiums during the period, and contributed nearly 300
billion VND (13.88 million USD) to the State budget.
Commissions
from insurance brokerage last year reached 492 billion VND (22.7 million
USD), rising by around 10 percent.
A
representative of the department said that studies on the development of
insurance brokerage in foreign countries are being carried out to seek
measures that can be applicable to boost the development of this sector in
Currently,
there are major gaps between foreign insurance brokerage firms and domestic
firms in management capacity and market shares. Last year, five foreign
brokers dominated the market, holding a combined share of more than 92
percent.
In
addition, insurance premiums collected through brokerage remained modest,
just 12 percent of the total premium of the insurance market, while the
percentage of
The
department revealed that a regulation to allow insurance brokerage firms to
offer consultancy services will be taken up for consideration in line with
international practices.
Meanwhile,
firms have urged the foundation of an association of insurance brokers to
enhance their operation capacity and standards.
Can
Tho strives to enhance local capacity
The
Mekong Delta City of Can Tho has taken drastic measures to enhance the
competitive capacity of local businesses since early this year in a bid to
boost the industry sector, said the municipal Department of Investment and
Planning.
The
city’s authorities have provided local firms with legal consultations on
preparing terms and documentation of business contracts alongside advice on
diversifying their products.
Furthermore,
firms have been updated on anti-dumping regulations and import procedures of
a number of countries and trained to ensure they complete accounting and
auditing forms correctly.
They
have also been offered guidance on overseas technical regulations, standards
and quarantine treatment which, should they fail to satisfy, will create
unnecessary obstacles to trade.
The city
recommended companies establish business cooperation with other firms in the
Mekong Delta region in order to address trade barriers.
Other
recommendations included intensifying market research and trade promotion in
line with renewing production technology to improve product quality.
Thanks
to the efforts, numerous businesses in Can Tho city have adopted
international standards of quality management systems to ensure workplace
safety and focused on expanding distribution networks and improving personnel
training quality.
Additionally,
the locality has amended its policies in accordance with
During
the first half of the year, the city’s consumption of industrial products
exceeded 40 trillion VND (1.84 billion USD) and imports reached 487 million
USD, up 12.8 percent and 2 percent, respectively, compared to the same period
last year.
European
businesses encourage
From now
to 2020,
The country
has vast potential in the field but has been focusing solely on low-cost
energy, such as hydroelectricity and coal, without proper investment policies
to develop clean energy, he said.
Developing
clean energy will help the Southeast Asian country take advantage of its
natural conditions and ensure energy security moving forward.
Energy
price hikes do not affect investment from foreign firms, according to the
latest survey conducted on 150 foreign businesses in
Most
respondents said the price of energy was the least important factor among 10
contributing reasons for their decision to invest in
More
crucial factors are the availability of skilled workers, costs, domestic
market conditions and Government policies, they said.
A
majority of companies revealed that they could bear nominal power tariff
increases of 15 percent or more before planning future investments and over
65 percent could accept a price hike of 10 percent per year.
Foreign
companies are more concerned about the quality of electricity supply than
prices. Up to 65 percent of respondents said they were not satisfied with the
power supply infrastructure and two-thirds utilise back-up power sources.
Some 73 percent said unstable power supply, rather than power price hikes,
had affected the country’s competitiveness in attracting investors.
Experts
said
Europe
is one of the biggest trade partners of
The Cha
Lo International Border Gate Economic Zone (EZ) of central Quang Binh
province has seen vigorous growth of commercial activities in recent years
and is expected to become a goods and services trading hub for
The zone
is located in a province that shares roads No. 8 and No. 12 with eight other
provinces of
Goods
trading via the Cha Lo border gate so far this year have amounted to 929.5
million USD, surging by 34 percent from a year earlier, while 75 billion VND
(nearly 3.49 million USD) in taxes have been collected here.
More
than 33,000 vehicles have travelled and almost 250,000 people have passed
through this port of entry, representing 96 percent and 101 percent of the
respective figures during the same period last year.
In order
to improve trading activities and services at the border gate, the Quang Binh
People’s Committee has urged close coordination among administrative units,
including the provincial Economic Zone Authority, border guards, customs,
migration police, health quarantine, animal and plant quarantine and the
State Treasury, said Pham Huu Loi – Deputy Head of the Economic Zone
Authority.
On
February 21, 2014, Prime Minister Nguyen Tan Dung approved a master plan on
developing the Cha Lo International Border Gate Economic Zone before 2030.
The zone
has now received a substantial facelift with basic infrastructure like roads
and water supply facilities under construction at a quick pace.
As many
as 17 tonnes of Vietnamese fresh lychee have been exported to
Sending
Vietnamese lychee to
According
to
Vietnamese
lychee was lauded by Australian consumers for its quality, fragrance and
taste. It was sold for about 22 AUD per kilogramme in super markets.
Nguyen
Hoang Thuy from
The
office has cooperated with individuals and organisations to conduct a number
of promotion campaigns to support Vietnamese agricultural products in the
host market.
ASC,
MARD cooperate to promote responsible aquaculture in Vietnam
The
Directorate of Fisheries under the Ministry of Agriculture and Rural
Development (MARD) and the Aquaculture Stewardship Council (ASC) signed a
Memorandum of Understanding (MoU) on June 22.
Under
the MoU, both sides pledged to work together to promote responsible
aquaculture in
According
to Pham Anh Tuan, Deputy Head of the Directorate of Fisheries, aquaculture is
one of four key sectors in
In order
to promote sustainable aquaculture, Tuan said the MARD issued the Vietnamese
Good Agricultural Practices (VietGAP).
Both
sides reviewed the differences between VietGAP and ASC and agreed to
implement a joint project to create guidance for VietGAP certified farmers to
help them progress to the ASC certification.
Chris
Ninnes, Managing Director of the ASC, said his group is engaging with a tier
of farmers through this project that are not currently able to meet ASC
requirements, including smallholders, who will benefit from greater support
in improving their practices.
This
approach will also enable the ASC to become a more efficient service provider
by reducing costs for producers who wish to gain ASC certification, he said,
adding that the ASC has granted quality certifications to around 3,000 labels
on the market and over 500,000 tonnes of products.
In 2014,
the Vietnamese Government issued Decree No 36/2014/ND-CP on growing,
processing and exporting catfish, stipulating that farms must receive VietGAP
or equivalent certifications by the end of 2015, evidence of the Vietnamese
Government’s commitment to developing sustainable aquaculture.
The
Ministry of Culture, Sports and Tourism has been asked to map out a strategy
for developing Vietnamese cultural industries through 2020.
Under
Deputy Prime Minister Vu Duc Dam’s conclusion on a draft of the strategy for
developing Vietnamese cultural industries through 2020, the ministry is asked
to review, formulate and issue mechanisms and policies to promote the
development of cultural industries in Vietnam.
He noted
that it is necessary to define the scope of the strategy to make it suitable
with factual contexts in Vietnam and maximise Vietnam’s advantages.
The
completed strategy is expected to be submitted to the Prime Minister at the
end of the third quarter this year.
HCM
City: CPI rises 0.62 percent in June
The June
consumer price index (CPI) in Ho Chi Minh City increased 0.62 percent over
May and 0.78 percent against the same period last year, the municipal
Statistics Office said on June 22.
The
average CPI in the first six months increased 0.65 percent compared to the
same period last year.
Seven of
11 main commodity groups in the CPI brackets showed price increases, led by
pharmaceutical products and medical services, which jumped 3.98 percent since
last month. It was followed by transport (3.94 percent),
culture-entertainment (0.39 percent), food and restaurant services (0.32
percent), garment and footwear (0.03 percent), and home appliances (0.01
percent).
The CPI
for food and restaurant services increased due to hikes in the price of food
by 0.62 percent.
Price
decreases were seen in goods and other services by 0.05 percent and in
housing, electricity, water, fuel and construction materials by 0.1 percent.
Telecommunications
and education prices remained stable in June.
The
price of gold decreased by 0.51 percent while the US dollar exchange rate
rose 0.71 percent.
Hanoi’s
CPI picks up in June over petrol price adjustment
Hanoi’s
consumer price index (CPI), an indicator of inflation growth in the city,
grew by 0.13 percent in June from the previous month and 0.98 percent against
the same month last year, buoyed by the increase in petrol prices.
Triggered
by the petrol price adjustment on May 20, the price bracket saw the sharpest
rise in transportation, soaring 3.58 percent from May.
Meanwhile,
price decreases were seen in food and restaurants (0.43 percent), thanks to
the abundant supply of food and farm produce.
Slight
surges were seen in garments, footwear and hats (0.14 percent); housing,
electricity, water, fuel, and building materials (0.06 percent); home
appliances (0.1 percent); beverages and tobacco (0.49 percent); medicine and
healthcare services (0.05 percent); culture, entertainment and tourism (0.17
percent); and other commodities (0.1 percent).
Prices
in post-communication and education sectors remained unchanged.
Last
month, the Hanoi Statistics Office announced that the capital city's CPI
showed a month-on-month increase of 0.12 percent from April and a
year-on-year surge of 0.93 percent.
The
office said the increase was mainly due to a surge in petrol prices since May
5 that pushed a number of commodity prices up, especially transport prices,
which jumped 1.06 percent from April.
Does
integration threaten Vietnam’s economic autonomy?
Transnational
companies are rushing into Vietnam in search of opportunities for growth and
their entry into the market is a boon for consumers who benefit from wider
choices of products lining retailers’ shelves.
However,
many prominent business leaders are saying the influx appears to be a death
sentence for domestic companies— many of whom have had a dominant position in
the marketplace for decades.
Pham Nhu
Bach, CEO of the Mai Lan Joint Stock Company, specializing in producing
Kissme paper products, says competition with the large foreign invested
businesses is proving to be the greatest challenge his company has faced
since it was founded.
After a
steady ascent in the rankings over the past 30 years of operations for which
it has been recognized as a top Vietnam brand for 14 consecutive years, today
the company is facing insurmountable problems.
Bach
says transnational companies have substantially more financial resources
along with a wide array of other advantages such as state-of-the-art
technology, superior products, and well seasoned marketing and management
skills.
He says
over the past three to four years we have cut back production because we
can’t compete in the major supermarkets and retail establishments with the
global brands. Today the Kissme brand can only be found in Vietnam’s traditional
markets stores.
We
simply don’t have sufficient resources to invest in the requisite updated
equipment and technologies required to compete on a level playing field with
the large transnational companies.
Echoing
these sentiments, Nguyen Dac Son, director of Hai Son Mechanical Engineering
Co Ltd underscores the point that it’s not easy to obtain the long term
financing the company needs to modernize.
Some
short-term limited working capital type loans are available with preferential
short term interest rates for up to two years but longer term financing
packages are either not available or much too costly, Son stresses.
The fact
is Son added that most transnational companies also pay higher salaries and
wages leaving domestic companies struggling to pay competing remuneration in
a fruitless effort to retain key employees.
Domestic
enterprises are not only losing out on the home front, says Vietnam
Association of Seafood Exporters and Producers (VASEP) General
Secretary.Truong Dinh Hoe.
The
quality of many Made-in-Vietnam products lack competitiveness because they
are not on conformance with international standards and therefore are not
permitted entry into foreign markets.
Domestic
companies are simply at a complete disadvantage entering foreign markets when
compared to the foreign invested companies that can draw on a rich body of
knowledge and experience on how to approach them.
The
management of domestic export businesses most often lack even a rudimentary
understanding of the foreign market on attributes of consumer demand, market
trends and distribution channels or even who their rivals in the foreign
markets are says Hoe.
As a
specific example, Hoe cites the case of the European Union (EU) for which out
of a total of 400 domestic businesses just over 30 are up to par and
accredited to export to the vast market.
Notably,
the Republic of Korea (RoK) recently imposed higher quality requirements on
import products, especially singling out Vietnamese shrimp after a shipment
tested positive for excess ethoxyquin residue.
The
situation was embarrassing for Vietnam because it highlighted the simple fact
that Vietnamese businesses collectively have yet to devise simple business
plans and marketing strategies to successfully enter a foreign market.
In the
face of the high competitiveness businesses are facing in the domestic market
the government should re-evaluate its policies with respect to transnational
businesses says leading economist Dr Nguyen Tri Hieu.
In far
too many instances the government has implemented policies and procedures
that unfairly benefit the large transnational businesses at the expense of
domestic businesses, Hieu suggests.
Last but
not least, Vietnam Chamber of Commerce and Industry (VCCI) Chairman Vu Tien
Loc,
also
stresses the government should pay more attention to the plight of domestic
businesses to ensure economic autonomy.
Norwegian
business eyes gas power investment in Con Dao
The Ba
Ria-Vung Tau provincial People’s Committee has allowed Gravi Float AS Company
of Norway to make a feasible study on building a 45 million liquefied natural
gas (LNG) power plant in Con Dao.
Accordingly,
the project will include a LNG warehouse, a wharf and a 18MW-capacity LNG
power plant.
Earlier,
the province agreed with Norway LMG Marin Company on developing a LNG using
ocean liner project to transport passengers and goods from Vung Tau to Con
Dao and vice versa.
The
liner will have a capacity of carrying around 350 passengers and 400 tonnes
of cargo and its anchorage will be located at Cau Da port, PTSC port (Vung
Tau) and Bem Dam port (Con Dao).
With the
operation of the liner, the travel time from Vung Tau to Con Dao will reduce
to five hours from current 13 hours.
Domestic
investors request international passenger terminal
A joint
venture between Viet Xuan Moi and Duc Binh Group joint stock companies has
submitted to the transport ministry an investment proposal for Cam Ranh
Airport's international passenger terminal.
The
project, to be managed as a BOT (built-operate-transfer) operation, is
estimated to have investment capital of nearly VND2 trillion (US$90.9
million).
The
proposal was made to address the rapidly increasing number of passengers seen
in recent years at the airport. Research showed that the current 13,995sq.m
terminal had the capacity to serve 1.6 million passengers per year.
In 2013,
the airport received more than 1.5 million passengers. Passenger numbers have
greatly exceeded the airport's capacity since 2014.
If the
proposal is approved, the airport will have two terminals. One will serve
domestic passengers, while the other will be exclusively used by foreign
visitors. The investors will also produce a feasibility report, complete
construction and put the terminal into operation by 2018.
General
Director of Viet Xuan Moi JSC Nguyen Thi Quyen said the construction of the
international passenger terminal was essential and urgent for the airport's
operations and to manage the increasing flow of passengers in the future.
To
mobilise capital, the joint venture has suggested two methods: mobilising
capital from domestic private companies through a BOT scheme or establishing
a project management body or a joint venture company which will have capital
contribution from the Airports Corporation of Viet Nam.
Competition
from abroad heats up for animal husbandry sector
Viet
Nam's animal husbandry industry is expected to face serious challenges under
new and future Free Trade Agreements (FTAs) because of low productivity, high
production costs and small scale of production.
Speaking
at a conference held in HCM City yesterday, Doan Xuan Phuc, deputy chairman
cum general secretary of the Animal Husbandry Association of Viet Nam, said
that FTAs would adversely affect the industry more than any other
agricultural industry.
But he
noted that FTAs would also help the industry access new technology, products,
and animal breeds as well as production methods.
Ho Xuan
Hung, chairman of the General Association of Agriculture and Rural
Development, said that lower import tariffs under new FTAs would lead to
fierce competition with foreign producers.
The
domestic industry is plagued with small-scale breeding, poor animal breed
quality, poor breeding technology, low labour productivity, regular threats
of disease and poor linkages in the production chain.
Phuc
said that high bank loan interest rates had increased breeding costs,
reducing the sector's competitiveness.
Production
costs have also gone up because of dependence on imports for raw materials
used to produce animal feed and vaccines.
In
addition, technologies for processing and preservation are not advanced,
limiting management of food quality.
Phuc
said the domestic animal husbandry sector had been able to meet demand for
100 per cent of pork meat, 95 per cent of poultry meat and 75-80 per cent for
beef.
"If
the sector does not lower production costs, cheaper imported meat will enter
the market," he said.
Le Ba
Lich, chairman of the Viet Nam Animal Feed Association, said to compete with
imported meat, locally made meat must be competitive in price, quality, and
hygiene and food safety.
He said
the sector should develop a closed production chain to reduce costs and
improve quality. In addition, the government should offer support to
enterprises that want to invest in concentrated breeding areas and modern
slaughterhouses.
Training
of human resources should also be promoted, as well as investment in
environmental treatment and modern processing and preservation facilities.
Nguyen
Xuan Duong, deputy head of the Animal Husbandry Department, said in 2013 pork
accounted for 74.2 per cent of total meat output, poultry 17.3 per cent,
cattle 8.5 per cent.
The
country targets raising the ratio of poultry and cattle meat to 28 per cent
and 10 per cent, respectively, while reducing the ratio of pork meat to 62
per cent, Duong said.
The
conference was organised by the General Association of Agriculture and Rural
Development and the Animal Husbandry Association of Viet Nam.
Despite
FMCG sales growth, retailers remain cautious
Fast Moving
Consumer Goods (FMCG) sales have shown signs of recovery in the first quarter
of 2015, but retailers remain cautious about the future, according to the
latest report released by international research agency Nielsen.
The
first quarter witnessed a 3.4 per cent volume growth in the six key cities of
Hanoi, Ho Chi Minh City , Haiphong, Cantho, Nha Trang and Danang, following a
sharp downturn in 2014. Beverage is the key factor behind growth recovery,
but other categories such as food and home care are also picking up.
The
report also found that more than 80 per cent of FMCG sales in Vietnam still
comes from traditional trade channels which include around 1.3 ,million FMCG
stores across the country. The sheer number of traditional stores makes
Vietnam one of the most complex markets for FMCG manufacturers to build
distribution chains and manage logistics.
Furthermore,
only 30 per cent of these traditional stores contribute to the top 80 per
cent of sales. Therefore, to win in this traditional-trade dominated market,
manufacturers must identify the right stores to target, which is not an easy
feat in such a large, dynamic and ever-changing retail market.
In
addition to the complexity and a large number of traditional stores, the
power to make or break a brand or product lies with traditional retail store
owners. The report shows that only 70 per cent of traditional retail stores
comply with manufacturers’ request to stock their products, highlighting the
importance of winning over a retailer.
Among
the brands most supported by Vietnamese retailers, Hao Hao, Vinamilk and
Coca-Cola stand at the top, with more than half of store owners indicating
willingness to stock their products more and recommend them to shoppers.
Nielsen’s
executive director of retail measurement services Nguyen Huong Quynh
addressed the issue, stating: “Despite the growth of FMCG, the Retailer
Confidence Index reached the score of only 71, which shows significant levels
of hesitation. The main reason is that retailers are mainly concerned about
what directly impacted their businesses, such as extra stock, margin and
customer services support.”
“Therefore,
it is critical for manufacturers to completely understand these concerns,
identify the right stores to target and ensure that retailers comply and
stock their products in-store throughout the year. This requires a
combination of different strategies based on retailer and shopper
understanding in order to build a picture of success for sales and to execute
in the market,” she added.
With
such a complex retail market, it is essential for manufacturers to identify
the right stores to target their priority investment. Only when this stage is
completed can manufacturers focus on launching a logical attack plan for
market penetration, sales force deployment, direct vs. in-direct store
strategy and stock availability.
A
picture of success is normally comprised of a combination of pricing,
assortment, trade activity and in-store communication. However, the big
challenge for manufacturers is to find a way to ensure that these component
parts are executed in store and complied by retailers.
Doosan
Vina successfully lifts heavy girder for unit 1 of Vinh Tan 4
After
nearly 15 months of construction by Doosan Heavy Industries Vietnam, the
consortium of Electricity of Vietnam, Power Generation Corporation 3, Doosan
Heavy Industries & Construction, Mitsubishi Corporation, Pacific
Corporation, and Power Engineering Consulting JSC 2, held a ceremony to lift
and place the "Heavy Girder" for Unit 1 of Vinh Tan 4, signalling
the completion of phase I.
The
plant is part of a larger thermal power centre complex in Vinh Tan commune,
located in Binh Thuan’s Tuy Phong district. With this milestone, Vinh Tan 4
is now 30 per cent complete.
Starting
construction on March 9, 2014, Vinh Tan 4 was the second power plant in the
Vinh Tan thermal power centre to break ground.
The
project consists of two 600MW units, with the total generating capacity of
1,200 MW. Once completed, it will provide 7.3 billion kWh per year for southern
Vietnam. The total investment for the plant is over VND36 trillion ($1.7
billion).
Source : VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Năm, 25 tháng 6, 2015
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