Thứ Năm, 17 tháng 9, 2015

BUSINESS IN BRIEF 17/9


2016-20 State budget released for 20 fields
The Prime Minister has signed a decision on the criteria and distribution of the Stage budget for the 2016-20 period.
According to the decision, the State budget's development and investment fund will be distributed to socio-economic infrastructure projects in 20 fields.
These include agriculture-forestry-irrigation and aqua-culture, industry, trading and traffic, as well as waste treatment, museums, culture and sports. Also on the list are tourism, science, information services and technology, as well as communications, education, health and food hygiene and society. Rounding up the list are the environment and natural resources, State management, national defence and the national reserve.
The State budget's distribution must serve the implementation of development plans for the 2011-20 socio-economic development strategy and the 2016-20 National Development Plan. The budget will also fund government-approved long-term projects.
The 2016-20 State budget will give top priority to developing the mountainous bordering island and ethnic minority areas as well as poor regions.
This move aims to narrow the gap in income, living standards and economic development amongst regions across the country.
The PM has urged provinces and cities to allocate funds for expediting key projects.
The PM's decision highlights the criteria for development and the distribution of investment funds.
The distribution takes five issues into consideration for each province or city. These are population; development level; land acreage; the number of districts; and other miscellaneous criteria, such as being a former base for the war resistance effort or being a border region.
Vietnam-Japan agricultural cooperation to thrive
Besides new official development assistance (ODA) commitments, Vietnam and Japan expect to sign a number of important cooperation deals in agriculture during Party General Secretary Nguyen Phu Trong’s visit to Japan on September 15-18, reported a newspaper.
The thriving Vietnam-Japan relations have reached a Strategic Partnership for Peace and Prosperity in Asia as from March 2014.
Japan is Vietnam’s leading economic partner with a total investment of nearly 38 billion USD and a bilateral trade value of nearly 28 billion USD. It is also Vietnam’s largest ODA donor country.
The number of Japanese investment projects into Vietnam has increased despite a decline in investment capital, Thoi bao Kinh te Viet Nam (Vietnam Economic Times) quoted Atsusuke Kawada, chief representative of the Japan External Trade Organisation (JETRO) as saying.
According to the Foreign Investment Agency under the Ministry of Planning and Investment, Japan is the second biggest foreign investor in Vietnam with 2,661 valid projects worth 37.7 billion USD.
Japanese investors and local government leaders have held many meetings in recent times. It’s noteworthy that more Japanese investors are keen on investing in agriculture, especially hi-tech agriculture.
Yasuzumi Hirotaka, JETRO managing director in HCM City , stressed the special attention paid by Japanese businesses to Vietnam ’s agriculture, saying that Japanese firms have carefully moved towards comprehensive cooperation with Vietnamese partners.
A representative from Fujitsu Group, which supplies Akisai Cloud services in agricultural management, told the newspaper that there is a huge potential for agricultural cooperation between Japanese and Vietnamese businesses such as management technology, processing, packing and distribution.
However, to turn the opportunity into reality requires strong reform in investment environment, particularly administration procedures, customs, tax, and human resources, he said.
Vietnam should give out clear messages in agricultural investment policy, particularly incentives for investors in the sector, he added.
Bilateral agricultural cooperation has witnessed significant breakthroughs in recent times. Vietnam ’s Ministry of Agriculture and Rural Development (MARD) signed a cooperation agreement with Japan ’s Ministry of Agriculture, Forestry and Fisheries and Ibaraki Prefecture in March 2014. The two countries are developing a medium-and long-term vision on agricultural cooperation to further enhance bilateral ties.
Shrimp sector hopes to recover exports to US
Shrimp exports to the US are expected to recover in the remaining months of this year thanks to anti-dumping tariff reductions.
The US Department of Commerce (DOC) has released the final results of the 9th period of review (POR 9) on anti-dumping tariffs imposed on Vietnamese frozen shrimp products from February 1, 2013 to January 31, 2014.
Accordingly, the average tariff dropped slightly to 0.91 percent from 0.93 percent as announced in the preliminary results in March 2015 but sharply from the 6.37 percent imposed in the POR 8.
According to the Vietnam Association of Seafood Exporters and Producers (VASEP), the Minh Phu Seafood Corp bears the highest rate at 1.39 percent (this figure has been cut from the preliminary outcomes of 1.5 percent), Thuan Phuoc Corp at 1.16 percent (higher than the preliminary outcomes of 1.06 percent) and Sao Ta Foods JSC at zero percent.
Secretary-General of the VASEP Truong Dinh Hoe said the reduction in tariffs is partly due to the DOC calculation of the tariff rates based on appropriate data from three countries: Bangladesh, India and Indonesia.
With the new rate, Vietnamese shrimp exports to the US are expected to thrive after a remarkable 50 percent fall in the first eight months of this year.
Furthermore, contending with similar products, the reduction will help the shrimp industry to increase its competitiveness in the US market as many Vietnamese rivals such as India and Thailand are bearing higher tariff rates at 2.96 percent and 1.1 percent, respectively.
However, it is difficult to forecast the exact shrimp export outcomes in the remaining months of this year due to complicated consumption trends and exchange rates, Hoe said.
He added that the shrimp sector is facing competition from several countries, such as Indonesia and Ecuador, which do not have any anti-dumping tariffs.
The US is the biggest importer of Vietnam shrimp, spending 370 million USD from January-August 2015.
France pledges to support Vietnamese firms in Paris
Representatives from the Paris Chamber of Commerce and Industry and French businesses pledged to facilitate Vietnamese enterprises’ operations in France during a workshop on September 14 in Paris.
The event was jointly hosted by the Trade Office under the Vietnamese Embassy in France and the Vietnam Chamber of Commerce and Industry (VCCI).
In his speech to open the workshop, Trade Consellor at the Vietnamese Embassy Nguyen Canh Cuong highlighted the potential for Vietnamese enterprises in the local market thanks to the Vietnam-European Union (EU) Free Trade Agreement (VEFTA).
He also underlined the contributions of the traditional practice and customs to facilitating access to investment opportunities in the host country.
The Vietnamese diplomat suggested that Vietnamese firms actively participate in France-based trade promotion events to connect with potential partners.
The host affirmed that the EU attached significance to the trade relationship with Vietnam via the VEFTA and considered the country the foundation to promote its relations with the Southeast Asian region.
French experts noted that Vietnamese enterprises need to improve their product quality to enhance their competitiveness.
Representatives of the Vietnam-Cambodia-Laos-France (VCL – France Business Club), with nearly 2,000 members from 42 countries, also expressed their willingness to support Vietnamese firms in the country.
Vietnam has enjoyed trade surplus with France in five consecutive years, with its average annual export turnover of 2-2.5 billion EUR or an annual growth of 5-7 percent.-
Vietnam emerges as big RoK export market
Exports from the Republic of Korea (RoK) to Vietnam have rocketed this year, despite declines in other major export markets like China and Japan, prompting local firms to seek business partners in the Southeast Asian country.
According to statistics announced by the RoK government on September 15, exports to Vietnam increased by 29.9 percent in the first seven months of this year compared to the same period last year.
Vietnam leapt two steps to rank as the RoK’s fourth largest export market, accounting for 5.2 percent of its outgoing shipments.
On September 14, the Korea Trade and Investment Promotion Agency (KOTRA) invited 17 major state-owned and private businesses to business sessions in Seoul, during which cooperation projects worth more than 1 billion USD are expected to be promoted.
The two countries also signed a free trade agreement in May, under which Vietnam will remove its import duties on 89.9 percent of all products from the RoK over a 15-year period following its implementation.
The RoK will do the same on 95.4 percent, or 11,668 out of the total 12,232 products, imported from Vietnam.
Trade between the two countries exceeded 26 billion USD last year, the highest value since the two established diplomatic ties in 1992.
Vietnamese food, beverages on show at WorldFood Moscow
Fourteen Vietnamese enterprises are showcasing the best of their agricultural products at the international food exhibition WorldFood Moscow, which kicked off in the Russian capital city on September 14.
The event has attracted hundreds of businesses working in the food and beverage industry from 36 countries and the host, Russia.
It features 11 exhibition sections, including meat and poultry; fish and seafood; fruits and vegetables; confectionery; oils, fats and sauces; dairy products; and tea and coffee.
Canned vegetables, frozen seafood, milk and beverages are among the Vietnamese products being introduced at WorldFood Moscow.
A notable exhibitor is TH Group, which is at the event to promote its dairy products and seek partners to export its goods to Russia as well as other European and Asian markets.
TH Group Chairwoman Thai Huong said her company’s participation also aims to improve the standing of Vietnam’s dairy industry in the world.
Last July, the group disclosed its plan to invest over 1 billion USD in a dairy cow farming and milk processing project in Russia.
Nguyen Thu Thuy, Deputy Director of the Export Supporting Centre under the Vietnamese Ministry of Industry and Trade’s Trade Promotion Agency, said Vietnam’s signing of a free trade agreement with the Eurasian Economic Union, of which Russia is a member, presents numerous opportunities for Vietnamese firms, especially amidst uncertain difficulties facing the Russian economy.
WorldFood Moscow, held annually since 1992, will run through September 17.
Vietnam boosts cooperation with global economic organisations
Deputy Prime Minister Vu Van Ninh had bilateral meetings with global economic leaders in Geneva, Switzerland on September 14 as part of his working visit to Europe to expand multi-faceted collaboration between Vietnam and economic organisations in the region and beyond.
While meeting with Secretary-General of the UN Conference on Trade and Development (UNCTAD) Mukhisa Kituyi, Deputy PM Ninh, who is also Head of the Inter-sector Steering Committee for Economic International Integration, hailed the UNCTAD for promoting economics in developing countries, including Vietnam.
He also extolled its assistance to Vietnam over the years and suggested the two sides enhance cooperation in research activities, policymaking, trade and investment while actively supporting each other in World Trade Organisation (WTO) negotiations, financial management and personnel training.
Secretary-General Mukhisa Kituyi congratulated Vietnam on its significant achievements in the “doi moi” (reform) process and expressed his delight at the positive developments in bilateral cooperation in debt management, the environment, transport and supporting small- and medium-sized enterprises.
He said the UNCTAD will continue to coordinate with Vietnam to tap its potential for development, adding that he is willing to send additional experts to support Vietnam in priority development fields and hoped to visit Vietnam in the near future.
The Deputy PM later met with WTO Director-General Roberto Azevedo, who recognised the role of Vietnam in the international community, and pledged to support Vietnam in its international integration for the sake of member countries and the global economy.
In recent years, Vietnam has worked to shift to a market economy with deeper and wider engagement in the global economy, Azevedo said, adding that trade activities have helped the country reduce poverty and improve local living standards.
While meeting with Deputy Director at the Advisory Centre on WTO Law (ACWL) Cherise M. Valles and senior lawyer Leo Palma, Deputy PM Ninh highly valued the cooperation spirit and goodwill of ACWL lawyers in supporting personnel training in Vietnam in the short and long term.
He said he hopes the ACWL will continue assisting Vietnam in supplying legal services and consultations to mitigate encountered disputes in handling lawsuits, as well as help Vietnamese legal officials better understand and more effectively deal with international trade issues.
The same day, Deputy PM Ninh participated in the 62nd session of the UNCTAD’s Trade and Development Commission, which focused on the global development strategy trend and foreign debt management.
Speaking at the opening session, the Deputy PM said in 1990, Vietnam was considered one of the most impoverished countries with foreign debt amounting to 146 percent of the local gross domestic product (GDP).
In 1993, Vietnam carried out negotiations on restructuring foreign debt. After a decade of active implementation, the country has nearly cancelled its debts, Ninh noted, citing it as one of the reasons overseas sponsors continually supply development capital to Vietnam.
He said he hopes through similar sessions of the UNCTAD, the Vietnamese Government will have opportunities to learn about the debt management efforts of other countries and the interests of foreign sponsors.-
Slow localization rate troubles RoK manufacturers
The Republic of Korea (RoK) companies Samsung and LG Electronics have expressed concern with the low localization rate of the supply chain for their operations in Vietnam, according to BusinessKorea.
The Korean news service recently reported that though Samsung Electronics has been operating in Vietnam for seven years, the local component procurement stands at a low 36%.
In addition, most of the companies making up the 36% are Korean-Vietnamese joint ventures doing business in the country as opposed to businesses that are owned and operated independently by Vietnamese.
At present, 32 domestic companies are in the supply chain of Samsung Electronics, four (out of a total of 90) are primary partners and 28 are secondary subcontractors supplying parts via Korean invested companies.
The concern by Samsung, and in particular its stockholders, is that the lower levels of local firms in the supply chain has resulted in substantially higher costs than anticipated due to increased costs associated with importing.
For calendar years 2013 and 2014 Samsung imported components costing US$15 billion and US$20 billion respectively and given the thin profit margins in the industry the effect on bottom line profits is huge.
LG Electronics has the same trouble Business Insider reported as it had originally stated in its investment plan for the Haiphong Complex that it expected its local component procurement would be at least 50%.
However, only one Vietnamese company is supplying components to LG Electronics as of now.
Under the circumstances, the Vietnam government has devised a long-term plan to develop the supply chain and the Ministry of Industry and Trade of Vietnam is working hand in hand with Samsung and LG Electronics to that end.
"We always welcome Vietnam companies”, said Deputy Manager of Procurement Jang Ho Young with Samsung, however all companies must meet with our standards and be able to produce a quality product on a consistent, timely and economical basis.
Currently Samsung is looking for local manufacturers to produce 200 different kinds of components, irrespective of whether they are owned and operated by Vietnamese owners or are foreign invested.
Deputy General Director Nguyen Van Dao of Samsung Vina shared Young’s sentiments explaining that Samsung is a global manufacturer and accordingly all companies in its supply chain have to meet with international standards.
General Director Han Myoung of Samsung Vietnam Sup in turn suggested prospective Vietnamese companies that want to join the supply chain should continue to work hard to meet the grade.
With strong perseverance and determination they will succeed Myoung said, after which it will be no big deal to become part of the Samsung production chain.
Wood products rank second among exports to China
The situation and trends of trading wood products between Vietnam and China were reviewed at a seminar hosted by the Vietnam Timber and Forest Production Association (Vietforest) in Hanoi on September 15.
Despite Vietnam running a trade deficit with China for almost all goods, it witnessed a trade surplus of over US$600 million with China from exporting wood products each year.
For  the first half of the year, Vietnamese wood products fetched more than US$425 million from the Chinese market, ranking second among all Vietnam’s export items to China.
Participants argued that trade of wood products between Vietnam and China will be greatly affected by free trade agreements (FTAs) regulations including China-ASEAN agreements on the trade in goods and services.
To Xuan Phuc from Forest Trends said that participation in FTAs will help the government and business sector  rearrange production models of the wood industry and encourage more businesses to devise a sustainable production strategy.
Vietnam unlikely to loosen lending
Despite low inflation this year, the Government should remain cautious when offering support to boost economic growth, said director of the State Bank of Vietnam's Credit Department, Nguyen Tien Dong.
Some experts have recently suggested that the Government introduce monetary loosening packages to boost economic growth, noting that the current consumer price index (CPI) remained low. They were concerned that a further decline of CPI could cause negative affects on the nation's economic growth.
According to the General Statistics Office, for nearly the past decade, CPI in August fell 0.07% against the previous month and rose only 0.61% against December last year.
August was also the third month this year, after January and February, which saw the CPI reduced, compared with the previous month, the office reported.
According to experts, if the index continues a downward trend it will not be suitable for supporting growth in an emerging economy like Vietnam, adding that emerging economies need a certain inflation rate in order to develop.
Admitting that the inflation rate is currently low, Dong said that the main task of the central bank was to stabilise inflation and the value of the Vietnamese dong, and creating trust among the public, as well as domestic and foreign investors.
Therefore, Dong said the central bank needed to remain very cautious about offering support packages, adding that a premature decision might only not help, but could harm the Government's past success in controlling inflation.
Not denying that a move to support economic growth at the moment was necessary, Dong said support should come not only from the banking industry, but also from other sources, such from the State budget or the capital market.
In fact, Dong said, no country, anywhere in the world, required that only their banking industry provide money for the purpose of economic growth. In other countries, the main task of a central bank was to stabilise the macro economy and inflation, Dong said, adding that the mobilisation of capital resources for investment mainly came from other sources, such as the capital market.
The banking industry should act only as a supplementary capital source for the economy during a certain period, Dong said.
However, currently in Vietnam the banking industry provides up to 80% of investment capital sources for the entire economy.
The ratio of medium- and long-term loans also remains high, accounting for up to 40% of the total loans.
These ratios were high because Vietnam's capital market was less developed, so the economy must still be based primarily on bank loans, Dong explained.
Vietnamese brand to compete in powdered milk market
Vietnam’s domestic private ese Nova Group, which has been operating for 23 years in the agriculture and real estate sectors, now targets a growing share in the highly competitive market of children’s powdered milk.
Late last month, Nova has set foot in the powdered milk market with the launch of the Anka Milk brand in cooperation with Ireland’s Kerry Group. The milk, produced at Kerry Group’s Anka farm in Ireland, is imported then distributed at supermarkets and Nova’s 36 agents. The company has promised to keep the price of their products unchanged for two years.
According to Nguyen Huu Liem, deputy chairman of Nova Group and chairman of Anova Milk, the group’s subsidiary in charge of its milk operations, their primary target is to raise the market share to 5% within the first three years. Powdered milk is only the first step and will be followed by liquid milk and milk-based dietary supplements.
Liem is confident that Anova will be able to expand its distribution network as Novaland, the real estate arm of Nova Group, is an investor in many large real estate projects with tens of millions of residents in the future.
Nova Group started the powdered milk project three years ago. In Vietnam, the price of powdered milk is rather volatile but has shown an upward trend over the years. The market is abundant with foreign brands.
“We picked the children’s powdered milk segment because it is sensitive and prices tend to fluctuate the most here. We want to create the most suitable product to Vietnamese children,” Liem said.
Anova Milk chose not to build a production and packaging plant in Vietnam because the investment and production costs are high, which would have resulted in a high price for the product. Moreover, Vietnamese people have a preference for foreign brands. Therefore, Nova has invested over US$50 million in the production line of the Anka Ireland farm, to produce the Anka-branded milk formula in Europe.
The cans that the milk comes in have traceability codes that enable consumers to look up all information on each Anka product, from the origin of fresh milk material to the quality verification process, manufacturing, the nutrition formula, the manufacturing packaging date, as well as nutrition verification and transport.
A recent survey by Ipsos Vietnam on customers with children more than two years of age in Ho Chi Minh City and Hanoi showed that 80% of them are at a loss the first time they buy milk for their children, 66% do not know what the criteria for good powdered milk are, 74% say the information on the label is not enough to determine the quality of the milk, 78% say they will be more confident if the product has a traceability code.
Competition is tough on the powdered milk market with foreign brands making up 75% of the more than 300 brands. Abbott has 120 products in Vietnam, holding a 30% market share. Vinamilk ranks second with a 24.6% market share. In the children’s powdered milk segment, Vinamilk ranks first with a 25.8% share.
Nova Group, formerly Thanh Nhon Ltd, was established in 1992 and has been producing and trading veterinary medicine, aquaculture chemicals, and pharmaceutical materials as well as building villas for rent. In 2007, the company changed its name to Nova Group with two major fields of operation, namely agriculture, with Anova Corporation, and real estate, with Novaland.
Dien Bien Airport to have redesign, larger aircraft
The Civil Aviation Administration of Viet Nam (CAAV) has asked the Ministry of Transport to redesign Dien Bien Airport by 2020-2030.
The new layout aims at increasing the frequency of flights and to allow the airport to handle larger aircraft, such as the Airbus A320/A321.
Explaining the need for redesigning the airport, the CAAV's head, Lai Xuan Thanh, said the airport currently only handles smaller aircraft traveling to Ha Noi – Dien Bien or Hai Phong – Dien Bien, as opposed to mid-level flights to Da Nang-Dien Bien and HCM City –Dien Bien.
Further, the airport only sees four arrivals and departures per day, said Thanh.
Flights are affected by local weather conditions and outdated navigational equipment.
Additionally, the airport's runway is close to National Highway 12, causing safety concerns, said Thanh.
According to Thanh, at present many airlines, such as Vietnam Airlines, Vietjet Air and Jetstar Pacific, plan to purchase Airbus A320/321 and larger aircraft from 2020 to 2030.
"However, the current infrastructure of the Dien Bien Airport does not meet the requirement for developing the airlines, as well as the demands of passengers and goods being transported in the future", he said.
As planned, the redesign will include a new runway and extending the current runway, said Thanh.
The Dien Bien Airport plays an important role in the economic development for Dien Bien Province and the northwestern region of the country.
VN, French firms eye freer trade
Vietnamese and French enterprises can join hands in utilising business opportunities to be brought by the Viet Nam-European Union Free Trade Agreement (VEFTA), instead of competing for them, an official said.
During a conference in Paris on Monday, Nguyen Canh Cuong, Trade Counsellor at the Vietnamese Embassy in France, suggested that domestic firms should learn French business culture while actively participating in large fairs and exhibitions in France such as those in garment, food and beverage, as well as in the support industry and agricultural machinery.
These events would help firms establish new partnerships and devise suitable business strategies to catch up with opportunities that the VEFTA would offer, he said.
French experts at the event agreed that both Viet Nam and France would benefit from the VEFTA thanks to cuts in the most taxes. However, they noted that Vietnamese enterprises needed to invest more in improving quality of their products as a move to sharpening their competition.
Nguyen Thi Sinh from the VCL- France Business Club, which has about 2,000 members from 42 countries, said that her club was willing to support Vietnamese firms in doing business in France and co-operate with the country's enterprises.
Over the past years, the value of Viet Nam's exports to France registered an average annual growth of 5 to 7 per cent to 2 billion euros to 2.5 billion euros (US$2.26 to $2.825 billion) a year, while its imports from the European nation reached about one billion euros ($1.13 billion).
Key products exported from Viet Nam included footwear, garments, and wood, in addition to handicrafts and seafood. Viet Nam's exports of cell phones shipped to France added a particularly big component to this figure.
In term of investments, French businesses have pumped $28 million into 14 projects in Viet Nam in the first eight months of this year, ranking 23rd among countries and territories investing in the country.
State agricultural firms planning share offerings
State-owned agribusinesses are going down the equitisation path, with several already completing their initial public offerings or close to doing so.
Vietnam National Tea Corporation (Vinatea) will make an IPO of almost 11.8 million shares today at the Hanoi Stock Exchange at a reference price of VND10,000 (US$0.44).
Nine parties, including an institutional investor, have registered to buy slightly more than the total number of shares on offer, according to HSX.
Another 1.6 million shares have been earmarked for employees and nearly 23.6 million will be sold to strategic shareholders.
After the equitisation, the company's chartered capital will be worth VND370 billion ($16.3 billion).
Earlier this month the Vietnam National Vegetable, Fruit and Agricultural Product Corporation (Vegetexco) sold 27.67 million shares to the public, raising more than VND278 billion.
Vegetexco will sell 60 per cent to strategic investors.
The Ministry of Agriculture and Rural Development (MARD) has so far turned 10 of its corporations into joint stock companies.
Valuation of the Vietnam Forest Corporation and Vietnam General Corporation of Agricultural Materials is underway, and their equitisation plans are expected to get approval next quarter.
The remaining three corporations earmarked for equitisation by the ministry will complete the process next year.
According to Deputy Minister of Agriculture and Rural Development Ha Cong Tuan, equitisation of farming and forestry businesses face various difficulties, and any solution that does not safeguard the interests of land-owning households, the Government and the businesses would result in complaints and even law suits.
Another obstacle was that the agricultural sector did not make high profits, he said.
But one encouraging sign was that large corporations like Vinamilk, TH Milk and Vingroup were showing interest in the sector, he said.
Businesses want to acquire entire companies that are equitised with one condition – the companies should possess large areas of land for them to make major investments and deploy new technologies.
Thai Huong, chairwoman of dairy firm TH Corporation, said there were large areas of idle farmlands but they were fractured into tiny lots, and acquiring them one by one would take time and involve tortuous procedures, which put potential investors off.
MARD has established a working group to attract investment in the agricultural sector, with the participation of tens of major companies.
One of the group's targets is to work with local authorities on large land funds on which investors could develop large projects, and this is expected to help speed up equitisation of companies in the farm sector.
Power prices stable for 2015
The Electricity of Viet Nam (EVN) and the Viet Nam Coal and Mineral Industries Group (Vinacomin) have assured electricity prices will remain unchanged until the end of the year.
The commitment was made following public concern about the possible electricity price hike after these groups reported a loss caused by fluctuations in foreign exchange rates.
Earlier this month, three large conglomerates of the Ministry of Trade and Industry, including EVN, Vinacomin and the Viet Nam Oil and Gas Group (PVN) reported losses of trillions of dong as a result of changes in foreign exchange rates.
EVN reported losses of around VND12 trillion (US$53.2 million) while Vinacomin reported losses of around VND1.6 trillion ($71 million).
These groups said they had borrowed large amounts of foreign exchange to invest in big projects.
EVN supplies 50 per cent of total power required in the country while Vinacomin was the third largest power supplier in Viet Nam, accounting for six per cent of total output.
However, Deputy Director General of EVN Dinh Quang Tri told Viet Nam Television (VTV) yesterday that the electricity price would be kept unchanged from now until the end of the year.
The group earlier proposed that the government put in place measures such as tax reductions and relaxations to support businesses, as well as policies to help them tackle the problems arising out of foreign exchange fluctuations.
Nam Dinh learns about free trade
The Ministry of Industry and Trade, at a conference yesterday discussed opportunities and challenges arising from free trade agreements (FTAs) to garment and textile firms in northern Nam Dinh Province.
According to Deputy Director of the ministry's Department of Export-Import Tran Thanh Hai, cuts on duties for garment products from Viet Nam exported to countries with signed FTAs would help enhance product competitiveness.
However, the ministry pointed out that the support industry for the garment and textile sector had not met the demand as Viet Nam remained dependent on the import of raw materials. The ministry cited statistics showing that Viet Nam currently must import around 50 per cent of raw material for garment sector, mainly from China.
If the situation did not improve, it would be hard for Vietnamese businesses to take advantages of the FTAs, according to the ministry.
Experts also urged businesses to pay attention to the rule of origin to take advantages of FTAs. Hai said that this, in turn, would create the impetus to promote the development of support industries.
Dang Phuong Dung, deputy president of the Viet Nam Garment and Apparel Association, urged garment firms to apply technology in production to boost the added value of products while promoting brand building.
Dung also stressed the importance of information dissemination to enhance the awareness of businesses about FTAs and be prepared.
The garment and textile industry of Viet Nam had great opportunities amid a rapid integration process with many FTAs signed or under negotiation, such as Trans-Pacific Partnership and FTAs with the European Union and Korea.
Customs statistics showed that the total export value of the garment and textile sector in Viet Nam totalled more than $15 billion in the first eight months of this year, up nearly 11 per cent over the same period last year.
Tra Vinh invests $640 million
The Cuu Long (Mekong) Delta province of Tra Vinh plans to invest VND13.4 trillion (US$640 million) to implement 72 projects in the province's restructuring of agricultural production between 2015 and 2020.
The province's Department of Agriculture and Rural Development said the projects would include the building of dykes, bridges, sluice gates, irrigation works, clean water supply systems and resident-relocation areas.
The project also includes forest cultivation to respond to climate change, and production of animal and aquatic breeding stocks and crop seedlings.
Fishing ports and shelter areas for fishing boats will also be built.
After two years of restructuring agricultural production, Tra Vinh has invested VND588 billion ($28 million) to build 10 irrigation works for aquatic cultivation and five dykes and embankments, among other projects.
Private investors and local residents have also dredged and built 500 small irrigation canals in fields with a total length of 350km.
Last year, the province's agricultural production value reached VND8.7 trillion ($410 million), a record increase, and up 6.7 per cent against 2013.
Over the past two years, farmers have converted more than 3,100 ha of rice fields to other crop cultivation areas.
In the 2015-16 sugarcane season, Tra Vinh has developed the first two sugarcane large-scale fields with a total area of 46.5ha and the participation of 67 households in Tra Cu District.
To encourage farmers participating in large-scale sugarcane fields, the Tra Vinh Sugar Company has provided sugarcane seedlings and loans and guaranteed outlets for participating farmers.
The company's agriculture officials have also offered instruction to farmers in sugarcane cultivation methods.
Huynh Van Thao, head of the Tra Cu Agriculture and Rural Development Bureau, said sugarcane in large-scale fields had developed well with fewer diseases, promising a high-yield harvest.
Tra Vinh has been growing rice on a large scale since 2011.
The province now has 27 large-scale rice fields with a total area of 4,236ha in the districts of Tra Cu, Chau Thanh, Cau Ngang, Tieu Can, Cau Ke and Cang Long.
Farmers who participate in large-scale rice fields are given 40 per cent of support for rice seed costs and farming techniques, reducing production costs by VND1.3-2.5 million ($60 - $120) per ha.
The Tra Vinh Food Company has also guaranteed to buy paddy from participating farmers.
Tran Van Quan, a farmer who participates in a large–scale rice field in Tieu Can District's Phu Can Commune, said his family had harvested 0.7ha of summer-autumn rice with a yield of 5.25 tonnes.
At the beginning of the crop, the Tra Vinh Food Company signed a contract to buy Quan's rice at a price of VND4,600 (20 cents) a kilo. After deducting all production costs, Quan earned a profit of VND14 million ($630) from the summer-autumn rice crop.
Tra Vinh plans to increase the area of large-scale rice fields to 9,281 ha by 2020. All large scale-rice fields will be planted under Vietnamese Good Agriculture Practices (VietGAP).
The province has targeted that half of large scale-rice fields will be operated by co-operatives by 2020.
The province has also called on investors to develop areas to cultivate high-quality rice for export, and corn, sweet potato and other cash crops, as well as sugarcane and speciality fruits, in the 2015-20 period.
It is also seeking investors to produce plant seedlings and seeds for cultivation.
The provincial People's Committee will use VND62 billion ($2.9 million) to support co-operatives to develop linkages in production, processing and sales on a large scale.
Tran Trung Hien, director of the province's Department of Agriculture and Rural Development, said some companies inside and outside Tra Vinh wanted to invest in large fields in agricultural production to have stable material areas for production and trade.
However, cooperation between farmers and processing companies continued to be problematic as farmers often violated their contracts with these companies by selling produce to traders at prices higher than those agreed to in contracts.
Therefore, companies had been reluctant to sign contracts directly with farmers, he said.
Nguyen Phu Si, deputy director of the Tra Vinh Food Company, said the province's Cooperative Alliance and the agricultural sector should support farmers to set up co-operatives and co-operative groups, and produce rice on a large scale.
This would help avoid the situation of small-scale, scattered production, he said.
Ministry discusses customs, taxes with S Korean firms
The Ministry of Finance spoke with Korean firms late last week to provide latest updates in tax and customs policies and heard complaints faced by businesses during the implementation.
Deputy Minister of Finance Do Hoang Anh Tuan said that the conference, organised annually, aimed to tighten the connection between the Government's tax and customs department and Korean firms in Viet Nam.
Tuan said the Korean business community was the largest FDI business community in Viet Nam with considerable contribution to the country's socio-economic development.
He pledged that the Government of Viet Nam would strive to create favourable conditions for the business community in general and for Korean firms in particular.
According to Jun Dae Joo, Ambassador of the Republic of Korea to Viet Nam, quoted by the Ministry of Finance's e-portal, the government listening to difficulties encountered by firms was of great importance as the business climate was one among the major factors to be considered when businesses chose destinations for their investments.
Joo believed that the two-way trade between Korea and Viet Nam would hit US$70 billion by 2020. Last year, the bilateral trade reached a record value of $30 billion.
At the conference, the General Department of Customs answered queries of Korean firms about corporation income tax, individual income tax, and value added tax, apart from tax refunds and tax reductions.
Viet Nam strove to cut tax filing times by 410 hours, with online-tax fillings applied in all 63 provinces, to date.
The rumour that Samsung is redirecting its investments to Thai Nguyen Province to evade tax in Bac Ninh Province is totally untrue, said Samsung Electronics Viet Nam (SEV).
In a document sent to Viet Nam News from SEV yesterday, the company said the reason for the decrease of first quarter sales of SEV was that SEV introduced lots of the CNC equipment to produce a Galaxy S6 and S6 edge with a metal case. Therefore, there were some special circumstances in the first quarter, but the full year sales of SEV would maintain last year's level, or were expected to decrease slightly.
"In addition, Samsung Display has decided to invest an additional $3 billion in Bac Ninh. If Samsung Display's Bac Ninh plant gets fully operational, industrial production in the Bac Ninh Province is expected to increase significantly," it added.
Earlier, the province's report on its international integration showed that the localisation rate of Canon was 65 per cent while that of Samsung was 36 per cent.
It said the FDI into the province last year saw a decrease, staying at VND23 trillion ($1.02 billion).
One of the reasons for the decline was due to a decrease in Samsung's production and exports.
Statistics from the provincial Department of Customs showed that in the first quarter of the year, total import and export value of Samsung Bac Ninh were $3.1 billion and $3.6 billion respectively. Those in the same period last year were $5.1 billion and $5.6 billion respectively.
Samsung Thai Nguyen posted a surge in import and export value of $3.7 billion and $3.6 billion in the first quarter of the year. The figures in the corresponding period last year were only $246 million and $77 million.
The department said Samsung Thai Nguyen was a large scale company and enjoying 100 per cent corporate income tax waiver.
This was the reason why it chose a low-cost production area in Thai Nguyen Province, which would benefit the group, the department added.
Viet Nam car sales down 10% in Aug
Vietnamese automobile sales in August decreased 10 per cent to 18,236 units compared to July, reported the Viet Nam Automobile Manufacturers' Association (VAMA).
This is seen as a sudden reduction in the domestic automobile market, which had witnessed strong and continuous growth in sales since early last year. However, part of the decrease was predictably reported, since August, or lunar July, is known as Thang Co hon (month of lonely spirits) and believed to be particularly unlucky – when people traditionally minimise their purchases, especially vehicles.
Anticipating slow sales, a number of automakers launched sales promotions in order to maintain their sales or prevent a sharp decrease. For instance, Truong Hai Automobile JSC (Thaco) had promoted Peugeot and many Kia brands, providing increased insurance and offering service vouchers. In fact, customers of Kia's New Sorento, Kia K3 and Kia Rondo could receive incentives worth VND65 million (US$2,888), VND30 million ($1,333) and VND24 million ($1,066), respectively.
Thanks to the promotion programme, the sales of Kia and Peugeot brands increased by 11 per cent and 28 per cent, respectively, in comparison with the previous month. Meanwhile, almost all other VAMA firms saw reductions in sales.
However, the sales growth in August was still 45 per cent higher than in the same period last year.
Also, VAMA reported that the growth rate in sales between imported completely built units (CBUs) and complete knock down (CKD) units, which were locally-assembled, continued to see a significant gap.
In the first eight months of this year, the sale of CKD reached 105,267 units, an increase of 54 per cent year-on-year. Meanwhile, CBUs saw 36,810 in sales, 67 per cent higher than the same period last year.
Imex Pan-Pacific Trading eyes greater stakes in Sasco
President of the Imex Pan-Pacific Trading Group Jonathan Hanh Nguyen has asked the transport ministry's permission to purchase more stakes in Southern Airports Services Company Ltd. (SASCO).
Imex Pan-Pacific Trading Group plans to buy more stakes at Sasco, which deals in air port services, including the supply of duty free shops. Photo www.tinnongdulich.com
SASCO is an affiliate of Airports Corporation of Viet Nam (ACV) and is among the largest airport service providers in the country, operating airport duty-free shops, restaurants, guest rooms and transport services.
Jonathan proposed that the ministry allow his group to purchase more stakes in SASCO when ACV, the largest shareholder in the company, withdraws its total investment capital worth 51 per cent. The amount of shares sold by SASCO will be decided by the ministry and ACV.
He further pledged not to transfer the stakes bought from Sasco within a minimum period of five years and to provide human resources training and management technology transfers to help Sasco expand its market and improve the efficiency of its business operation.
Imex Pan-Pacific Group is currently a strategic shareholder of SASCO, with 16 per cent ownership.
SASCO's shares are being traded on the Upcom at a price of VND30,000 (US$1.3) per share.
SASCO has a charter capital of nearly VND1.32 trillion ($58.5 million). It reported a year-on-year increase of 27 per cent in pre-tax profits in the first six months of this year.
Last year, the company earned more than VND2 trillion ($88 million) in turnover, and VND92 billion ($4.08 million) in after-tax profits.
The Imex Pan-Pacific Group has been working with the aviation sector for more than 30 years, and has 25 years of experience in investing in and supplying tax-free goods to several airports in Viet Nam.
Vinachem signs deal for salt mine project
Three Vietnamese banks have signed a US$417 million agreement for the Viet Nam Chemical Group that is developing a salt mine project in Laos.
The Viet Nam Chemical Group signs a US$417 million credit deal to start construction of salt mine in Laos. VNS Photo
The three banks are the Viet Nam Development Bank (VDB), the Viet Nam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) and the Bank for Investment and Development (BIDV).
The loan deal will secure funding amounting to 80 per cent of the project investment, in which BIDV will provide $161 million, Vietinbank $143 million and VDB $113 million.
The $522-million project, to be built over five years in Khammouan Province, is expected to become operational in 2020.
Vinachem will also raise its own funds amounting to $105 million.
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR

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