BUSINESS IN BRIEF 26/11 Japanese food companies eye cooperation in HCM City A delegation of nearly 40 businesses from Japan’s Setouchi and Oita prefectures took part in a programme promoting food exporters’ connectivity in Ho Chi Minh City on November 24. They marketed more than 70 local commodities, aiming to seek market shares in the southern metropolis and Vietnam at large. Through the activity, the enterprises also wanted to seek Vietnamese partners and distributors for long-term cooperation in the food industry. Hirotaka Yasuzumi, Chief Representative of the Japan External Trade Organisation (JETRO) in HCM City, said that the products introduced at the programme all have high quality, and meet Japan’s strict food hygiene and safety standards, so they can satisfy the taste of consumers in numerous countries, including Vietnam. On the same day, a seminar was also organised in the city for Vietnamese and Japanese entrepreneurs to share experience. Participating Vietnamese entrepreneurs also learnt about leadership training methods provided by Japan’s Matsushita University.- RoK enterprise invests in high-tech agricultural project Vietnam Moc Bai Joint Stock Company under the Republic of Korea’s Taekwang Group will splash out over 261 billion VND (11.6 million USD) on a high-tech agricultural project in the southeastern province of Tay Ninh. From 2015-2018, the company will develop a fruit and vegetable cultivating area in line with VietGap standards, which can produce 25-28 tonnes per crop. In addition, bio cattle and poultry farming models will also be built. The project is expected to create jobs for 100 local labourers. Products will be consumed in both domestic and foreign markets. Vietnam Moc Bai Joint Stock Company is a large enterprise in Tay Ninh. It started a footwear production plant, which has provided jobs for 15,000 workers, in 2007. In 2014, the company gave a support worth 20 billion VND (889,200 USD) to farmers in An Thanh commune, Ben Cau district to form a 200-hectare area producing high-quality rice. Early 2015, it launched construction work on infrastructure of a 100-hectare garment and textile industrial zone, also in An Thanh commune.- November sees 10-year low CPI rise November’s Consumer Price Index (CPI) picked up 0.07 percent from previous month and 0.34 percent from the same period last year, the lowest level of rise recorded in the past decade, according to statistic from the General Statistics Office (GSO). Slight rises were seen in nine out of 11 groups of goods and services, used to calculate monthly CPI, in November. The housing and building materials group posted a 0.32 percent price increase, while beverage and tobacco prices went up 0.16 percent. Deputy Director of the GSO’s Price Statistics Department Do Bich Ngoc said that food prices rose by 0.31 percent as traders rushed to buy rice for export to Indonesia and the Philippines. High demands for beef and seafood during wedding season also resulted in the surge in fresh food prices, Ngoc stated. A 0.14 percent increase in the prices of clothing and footwear due to the approach of winter also contributed to the CPI rise. Growing demands for antibiotic and vitamin in the month due to seasonal weather change also pushed the medicine prices up by 0.16 percent while medical service cost remains stable. The GSO’s figures also pointed out some factors helping to curb the rise of November’s CPI, including the reduction of petrol and diesel prices on October 19 and November 3, and dropping steel price and public transport cost. According to the GSO, November’s core inflation rate, the CPI excluding fresh food, energy and State-controlled commodities like medical and educational services, expanded 0.05 percent from last month and 2.08 percent against the same month last year. Next month’s CPI is expected to rise from 0.8 to 0.9 percent from last December. However, if adjustments are made to medical service cost, the rise can be higher, at 2.1-2.3 percent.- Vietnamese, Chinese farm produce traders meet in Hanoi Vietnamese and Chinese businesses met at a conference in Hanoi on November 24 to discuss how to promote investment and trade in agricultural products. Deputy Director of the Hanoi Centre for Investment, Trade and Tourism Promotion Truong Viet Dung pledged all possible support for Vietnamese and Chinese firms and business associations to conduct market surveys. He said the centre would increase liaison with Chinese relevant agencies, especially the two embassies’ commercial sections, to provide businesses with the latest economic and trade information. Rong Wei Dong, Vice Chairman of the Chinese Association of Food and Farm Produce, said Vietnam and China have supplementary farm produce. China exports apples, mandarins, grapes to Vietnam while importing tropical fruits such as longans, bananas and rice from the country. Le Ba Lich, Chairman of the Vietnam Animal Feed Association, hoped that China would make it easier for Vietnamese food and farm produce to enter its market. In January-September, two-way trade between Vietnam and China topped 64 billion USD, up 12 percent annually. In investment, China signed contracts worth more than 35 billion USD with their Vietnamese partners. ASEAN Community forces domestic airlines to raise game Vietnamese airlines will have to raise their games to seize opportunities as well as counter challenges as the formation of the ASEAN Community will open up the regional air transport market to players from all ASEAN member countries. According to Lai Xuan Thanh, Head of the Civil Aviation Authority of Vietnam (CAAV), said the ASEAN Community, which will be officially realised at the end of this year, will form a unified air transport market, which allows airlines from all countries in the region to operate air routes from one country to the remaining countries, which means competition will increase among ASEAN members. The unified air transport market will also require all member countries to bring their air safety and security regulations up to common ASEAN standards, he said, adding that this, however, is not a big problem since Vietnam’s aviation sector has met ICAO standards. The official stressed that in order to capture opportunities offered by a unified air transport market, Vietnamese airlines will have to raise their competitiveness and managerial capability. The ASEAN comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. PV Gas named in list of ASEAN 100 companies PetroVietnam Gas (PV Gas) has been named in the list of ASEAN 100 companies by Asia’s leading business magazine Nikkei Asian Review. With a market capitalisation of 9.43 billion USD and a net profit of 584 million USD in the latest fiscal year, PV Gas was placed in the 48th position and is the only Vietnamese company on the list. PV Gas is the third largest company in the region’s oil and gas sector, behind only Thailand’s PTT and its affiliate PTT Exploration and Production. Singapore Telecommunications tops the list with a market capitalisation of 47 billion USD. Israel-Vietnam economic cooperation forum set to take place An Israel-Vietnam economic cooperation forum will be held in Israel during Deputy Prime Minister Hoang Trung Hai’s visit to the country on December 1-2. The forum is expected to draw around 200 businesses from the two countries. They will focus discussion on agriculture, hi-tech, energy, telecommunications, support industry, healthcare, and real estate, share experiences and seek cooperation opportunities. Vietnam-Israel economic ties have developed significantly in recent years. Two-way trade turnover increased from US$200 million in 2009 to more than US$1 billion in 2014. Vietnam mainly exports mobile phones and accessories, computers and accessories, footwear, seafood, garment, coffee, pepper, cashew nuts, and machines to Israel while imports electronic equipments, machines, tools and fertilisers from the country. The two countries are preparing to negotiate a free trade agreement (FTA) in the coming time. Trade deficit hits 3.86 billion USD Vietnam recorded a trade deficit of 270 million USD in the first half of November, bringing the total number since the beginning of this year to 3.86 billion USD. Statistics released by the General Department of Customs show that in the reviewed period, exports brought home nearly 6.49 billion USD, while imports were valued at 6.77 billion USD. As of November 15, the country’s total export value hit 140.87 billion USD. Import value reached 144.73 billion USD. In the first 11 months of the year, the foreign-invested sector achieved a trade surplus of 10.71 billion USD, with its export value at 96.27 billion USD and its import value at 85.56 billion USD. Last month, the country recorded a trade surplus of 500 million USD.- Groundbreaking for Vinpearl Paradise Villas Vinpearl Hotel Management LLC., a subsidiary of Vingroup held a groundbreaking ceremony on November 23 for Vinpearl Paradise Villas, as the fourth phase of the Vinpearl Phu Quoc Resort Complex project. The five-star Vinpearl Paradise Villas includes multi-bedroom villas, a entertainment site called Vinpearl Land, and a 27-hole golf course on an area of 100 hectares. In addition, a Vinmec International Hospital inaugurated in July and a Vinpearl Safari zoo to be operational on December 24 are expected to further meet residents and visitors’ demands. Vinpearl Paradise Villas is part of the five-star Vinpearl Resort & Villa system which is located on Vietnam’s beautiful beaches in Da Nang, Phu Quoc and Nha Trang. ASEAN can boost agri-industry through empowerment of women: FAO ASEAN countries could boost productivity of their agribusinesses simply by improving opportunities for women to participate in the sector on an equal footing with men, a senior official of the UN’s Food and Agriculture Organization (FAO) said. “Women account for half of the world’s population and about a quarter of its agricultural labour force, yet many rural women remain marginalized and their productive potential in many countries of the Asia-Pacific region is woefully underutilized,” FAO’s news release on November 23 quoted Kundhavi Kadiresan , Assistant Director-General and Regional Representative of the UN agency, as saying during the Voices of Women, a side event at the 27th Association of Southeast Asian Nations (ASEAN) leaders’ summit in Kuala Lumpur, Malaysia. Kadiresan noted that women are the backbone of rural economies, especially in developing countries, yet they often have unequal access to credit or decision making processes, when compared to men in similar agricultural occupations. Another issue holding agribusinesses back from achieving their full potential is the ‘feminization of agriculture,’ a situation often occurring when men who traditionally worked in agriculture migrate, and the work they’ve left behind shifts to women who do not possess the same skills, access to credit, technologies or resources. According to the FAO official, steps must be taken to ensure that women in agriculture have the tools and support they need to become more productive, participate in the decision-making processes and enjoy an equal share of the rewards. She reported that FAO, in collaboration with member countries and other partners, are empowering women through work in ASEAN countries. In Myanmar, Laos and Cambodia, employment for women has been generated in processing and packing facilities of organic agricultural products. Empowerment and leadership skills have been fostered through participation in cooperatives. Kadiresan pointed out that ASEAN’s inherent policy leadership and coordinating role make it well placed to create a sustainable environment in which women in rural areas could become more productive in agriculture. Through carefully implemented gender-responsive and pro-poor policy development, a win-win-win situation could emerge for women and their families, through enhancing livelihoods and nutritional well-being, improvements and increases in food production, and ultimately economic gains for ASEAN’s member countries. Tet holiday boost for retailers Premium packaging plays a crucial role during the run-up to the Tet (Lunar New Year) period, according to a Consumer Study report on Tet 2015 from market research firm Nielsen Vietnam. Many fast-moving consumer goods enjoy significant sales peak during this time. Nielsen's report indicates that brands that "bring a feeling of sharing" experience better sales during Tet. The seasonal behaviour establishes a need-driven demand for many categories. Typical Tet categories are confectionaries, carbonated soft drinks and beer. The sales over the three month period of Tet contribute 28 per cent of annual carbonated soft drink sales. Average beer sales in one Tet month is 1.5 times higher than a regular month. Biscuits are also popular during Tet, as they are distributed to visitors to family homes. More than 401 options are available for them to choose. Nielsen said that advertising for non-Tet categories, such as coffee, cooking oil, teabags and even laundry are also popular. Last year, coffee saw a jaw-dropping 17 per cent growth during the three months of Tet this year compared to the same Tet period in 2014. Manufacturers are driving stock for Tet earlier than ever to be on shelves at the peak time. As a consequence, consumers are adapting to this new trend and buying products as alternative gift options. At the other end of the spectrum, emerging behavior of retailers has also been seen. According to Nielsen's Retailer Sentiment study, the Retailer Confidence Index is on an uptrend, increasing four points from 72 in Q2 to 76 in Q3, in line with the government's forecast of strong economic growth. At least 24 per cent of retailers also intend to increase their stock level higher than 2015, reflecting their confidence level. In addition, among those intending to increase their stock, 87 per cent plan to increase to a significant level of more than 10 per cent. Retailers expect support for Tet sales by ensuring product quality, payment methods, assistance in displays, and strong promotions. These expectations are varied in different regions. Gift hampers contribute important sales and are more preferable in the North and South East regions. Retailers expect manufacturers of top selling-products to have more eye-catching and Tet-related packaging. One size fits all is not applicable to the market nationwide, according to Nielsen. Bag, hat, wallet exports at $2.8b Exports of handbags, wallets, suitcases, hats and umbrellas have so far been steadily optimistic, helping the industry meet the export target of US$2.8 billion this year. The Viet Nam Leather, Footwear and Handbag Association (Lefaso) noted that the target was feasible, based on export value to date, and signed export contracts that last until year-end. According to Lefaso vice chairman Diep Thanh Kiet, the industry earned $2.5 billion from exports by mid November, up 14.3 per cent against the same period last year. Exports of these items have maintained a high increasing rate this year, with October alone seeing a turnover of $230 million. The US led Viet Nam's major export markets for handbags, wallets, suitcases, hats and umbrellas in January-October, with the purchase of $1 billion worth of goods, a year-on-year increase of 15.8 per cent. The EU and Japan followed, with export values of $616 million and $253 million, up 12.8 per cent and 9.8 per cent, respectively. The export acceleration of the industry started in 2013, when it contributed more than $1.8 billion to the country's export value. Last year, the industry fetched $2.5 billion, up 31.21 per cent against the previous year. Exports of these products have remained high this year as several manufacturing factories moved from China and Indonesia to Viet Nam to gain access to lower tariffs and a relatively better-skilled workforce. To benefit from preferential tariffs under various free trade agreements and the Trans Pacific Partnership Agreement, many foreign companies in ancillary industries have made investments in Viet Nam. However, local firms will have to strive to increase investment, expand production scales and improve the quality of their products to compete with foreign direct investment (FDI) firms. Most of the country's exports of handbags, wallets, suitcases, hats and umbrellas currently belong to FDI firms, of which South Korean firms account for the largest number. Vietnamese firms, meanwhile, mainly perform outsourced tasks for foreign firms. Farming sector must reform to attract FDI Viet Nam's agriculture sector must reform its production and business structure to attract more foreign direct investment (FDI) and develop further when the Trans-Pacific Partnership (TPP) deal comes into effect. The period from 1990 to 2000 was considered the most successful for attracting FDI in the domestic agriculture sector as it accounted for 15 per cent of the total national FDI volume at that moment, Vu Thi Minh, lecturer of the National Economic University said at a business forum on investment in agriculture after the TPP comes into effect, held in HCM City on Saturday. However, the FDI to the sector dropped from 2001 and reached US$3.72 billion, accounting for only 2.17 per cent of the total national FDI volume. The sector's FDI volume occupied 1.6 per cent of the total national FDI in the first 10 months of this year. According to the Viet Nam Association of Foreign Invested Enterprises, by 2013, 50 countries and territories and invested in Viet Nam's agricultural, forest and fishery sector, including one third from Taiwan and Hong Kong, and a small volume from some developed countries. Minh said the agricultural sector is more at risk than any other production and service sectors. Foreign investors do not want to invest in sectors such as the farming sector, which are fraught with risks. Therefore, foreign investors would think twice about the investment incentives offered by countries seeking FDI in the agricultural sector, she said. The country would receive more FDI in its farming sector if its incentives were more attractive. In addition, a small production scale, risks of diseases and old infrastructure in the rural areas of Viet Nam are factors that prevent foreigners from investing, she said. At the forum, Vu Van Tam, deputy minister of agriculture and rural development, said the domestic agricultural sector needs to restructure production and business, including solutions on attracting investment from home and abroad. The investment activities would create breakthroughs in restructuring the sector and guide Viet Nam's small- and medium-sized farming enterprises during the integration process, he said. Truong Dinh Tuyen, former industry and trade minister, said that with integration into the TPP, the domestic agricultural sector, especially the livestock industry, would face numerous challenges. Viet Nam's TPP negotiators have protected the livestock industry, but the protection would be limited for several years and that would be enough for the industry to restructure itself to develop further and improve its competitive ability, he said. In the long-term, the protection would not create any pressure on the industry to reform. The greatest challenge for the domestic agricultural sector is to ensure food hygiene and safety, Tuyen said. If enterprises cannot ensure that, countries would not ask for Vietnamese farming products even though tax rates were reduced to zero. The local farming sector should convert to multi-functional farming sectors, he said. So the sector must restructure itself strongly with the latest technologies, and in producing, preserving, and processing, apart from distributing and selling farming products. The sector should develop large production regions, nurture close co-operation in processes, ensure reasonable distribution and close connectivity between quality, price, supply and demand, he said. Meanwhile, the state should play a role in organising and planning development, and developing incentive systems for agricultural and veterinary sectors, he said. Minh said the Government should pay more attention to building strategy on attracting FDI and provide information on the agricultural, forestry and fishery sectors to foreign investors. Also at the forum, Tran Hai Yen, economic expert from Bao Viet Securities Company, said there was a wave of investments in the banking sector from 2008 to 2010, while now there is a surge of investments in the agricultural sector. More SBV policies to help SMEs State Bank of Viet Nam would further formulate policies to support efficient small- and medium-sized enterprises and those manufacturing and exporting products, Director of SBV's credit department Nguyen Tien Dong said. Seeing the significant role being played by small- and medium-sized enterprises (SMEs) in the economy, which account for 97 per cent of the existing enterprises, Viet Nam has already issued policies offering preferential loans to SMEs. Lending to SMEs accounts for roughly 25 per cent of the economy's total outstanding loans. Still, SMEs found it difficult to access credit from banks. A recent survey by the Viet Nam Chamber of Commerce and Industry found that high interest rates, no assets available for mortgage, complicated procedures and bad debts, besides unfeasible business plans were among the reasons that caused difficulties in accessing credit. Dong said policies would be issued to direct capital flow to SMEs that are run efficiently and those directly producing or exporting goods. Preferential policies would especially be offered to businesses in support industries, agricultural and rural sectors, those applying hi-tech and those in remote areas. Experts said more credit for SMEs would not only ensure efficiency, safety and sustainable development of credit institutions' operations, but also help SMEs to exploit resources for development. At a recent interpellation, Minister of Planning and Investment Bui Quang Vinh said together with the amended laws on investment and enterprise, the ministry had proposed to the Government a new law on supporting SMEs to be put into consideration. The legalisation of support to SMEs is expected to ensure stronger development of SMEs, which contribute 40 per cent of the country's gross domestic product and employ 51 per cent of labour. Credit demands of businesses often rise towards the end of the year, offering opportunities to the banking sector to maintain the credit growth rate, and a target credit growth of 13 to 15 per cent for the whole year is now at hand. Le Duc Tho, general director of Vietinbank, in a report published on Nhan Dan (the People) online newspaper said it was important to ensure the quality of credit. Several analysts said the central bank might aim for higher credit growth for 2016, given the transparent economic recovery. Tho cited National Assembly Deputy Tran Du Lich as saying that credit growth should be three times higher than the gross domestic product (GDP), or about 20 per cent next year. The latest figures of the Ha Noi Statistics Department reveal that outstanding loans in the capital city total VND1.193 quadrillion (US$53.02 billion) in November, rising 1 per cent over the previous month and 18 per cent over last December. FDI farming, mining projects reach $213m Vietnamese companies invested over US$213 million in mining and farming projects abroad in the first 10 months of 2015, according to figures released by the Foreign Investment Agency under the Ministry of Planning and Investment. The overseas mining and farming projects accounted for nearly half of total registered capital of the Vietnamese investors' new overseas FDI projects licensed by the Vietnamese authority over the same period. The department licensed 102 new foreign direct investment (FDI) projects capitalised at $441.9 million, plus capital expansion of $192.8 million for 53 operational FDI projects, in the first 10 months of the year. In all, agencies licensed a total capital of $625.4 million invested by Vietnamese firms outside Viet Nam in the first 10 months of 2015. Major investments were channeled into traditional markets such as Cambodia (with $194 million for 23 projects); Laos (with total investments of $126 million for 18 projects); and the US (with $102 million for 22 projects). In addition, Vietnamese investors were also licensed for FDI projects in Russia, Singapore and Germany. The mining sector attracted the biggest investments from local firms, up to $107 million, accounting for 16.8 per cent of total investments, followed by the farming, fishery and forestry sector with investment of $106 million. In the past few years, investments have also been poured into sectors such as information technology, communications, power generation, real estate, financial services, insurance and banking. This indicates the diversity of FDI sources from Vietnamese investors, according to the Foreign Investment Agency. HCM introduces new sector indexes The HCM Stock Exchange is developing new sector indexes based on the Global Industry Classification Standard (GICS) and will introduce them in the first quarter of next year. This is being done to provide investors with efficient investment tools. "Investors have a higher demand for investment information by sector. Keeping that in mind, the HCM Stock Exchange continues to develop sector indexes to support their investment decisions," the exchange (HOSE) said in a statement yesterday. The sector indexes will help investors capture the breadth, depth and evolution of businesses in the same sector through which they can see capital movement and growth potential of each sector in general and of individual stocks in particular. In addition, sector indexes would help the exchange build a specific data system for each sector which supports its management and supervision of listed companies in each sector, it said. Along with the benchmark VN-Index, HOSE has developed five indexes (VN30, VNMidcap, VNSmallcap, and VN100, in addition to VNAllshare), and their corresponding total return indexes (TRI). The HCM City's exchange has been using Viet Nam Standard Industrial Classification 2007 (VSIC 2007) based on the United Nation's International Industrial Classification of All Economic Activities since 2010. This month, the exchange signed a contract with MSCI, the US-based provider of stock market indexes, to apply the GICS to all listed companies on the HCM Stock Exchange. GICS, developed by MSCI and credit rating agency Standard&Poor's, is a four-tired, hierarchical industry classification system. This standard is widely used in the global financial community which consists of 10 sectors, 24 industry groups, 67 industries and 156 sub-industries. More than 43,000 companies ranging from asset managers, brokers, custodians, and consultants, to research teams and stock exchanges in over 120 countries and territories are using GICS, accounting for 90 per cent of global traders and 95 per cent of the world's market capitalisation. Under the agreement with MSCI, the HCM City's exchange will provide free information of companies assigned to the first two tiers (sectors and industry groups). Depending on the market development, the exchange will consider extending the provision of more detailed information of industries and sub industries. According to the new classification standard, some shortcomings of the current classification system will be resolved. For example, Masan Group (MSN), one of Viet Nam's 10 biggest stocks by market capitalisation, will be moved from the financial and insurance sector to consumer staples which make up the majority of the company's total revenues. Three sectors occupy the biggest market capitalisation on the HCM Stock Exchange are financial sector at 46.95 per cent, consumer staples at 23.91 percent, and industrials at 8.57 per cent, according to the VNAllshare data by the end of June, 2015. Vietnam-Japan ties promote impetus for integration process Vietnam has brought into full play its cooperation with Japan to generate new momentum for the country’s integration and development process, a Vietnamese economic expert said. Deputy Head of the Vietnam Trade Promotion Agency Do Kim Lang made the statement at a conference to promote trade links in IT and software between the two countries held in Hanoi on November 23, during which he highlighted efforts made by the Vietnamese Government to fine-tune the business and investment climate. Vietnam has paid attention to simplifying administrative procedures while improving its financial and banking system, and infrastructure facilities, which are expected to help attract more foreign investments, especially those from Japan, he said. Kobayashi Tatsuo, CEO of Kansai Information System Industry Association in Osaka prefecture, said IT firms from the Kansai region are interested in Vietnam markets. He added that representatives from 12 companies in Kansai are on taking a fact-finding tour to Vietnam to seek business opportunities. IT connections between Vietnam and Japan have reaped successes in recent times. There are more and more Japanese businesses selecting Vietnam as an attractive destination for investment. Meanwhile, Japan is one of the three largest markets for Vietnamese IT firms. According to Nguyen Doan Hung , Chairman of the Vietnam - Japan IT Cooperation Club (VJC), Vietnam has a great opportunity to expand its market and promote cooperation in the IT field with Japan. He advised Vietnamese businesses to focus on improving the quality of their products in order to meet requirements from their Japanese counterparts. Government statistics show that between 2011 and 2013, Japan topped the list of 101 countries and territories investing in Vietnam. By October 2015, Japan poured 1.48 billion USD into new and existing projects in Vietnam, raising its total investment in the Southeast Asian nation to nearly 39 billion USD. Japan is Vietnam’s third largest trade partner and second biggest importer. Two-way trade has witnessed stable growth every year, reaching nearly 19 billion USD in the first eight months of the year. Vietnam’s key exports to Japan include textiles, crude oil and aquatic products. Thailand organises caravan to promote attractions The Thai Ministry of Tourism and Sports and private companies have co-organised a caravan to promote tourist attractions across the country. Minister Kobkarn Wattanavrangkul explained that the caravan is meant to promote roadtrips to various tourist attractions, thereby stimulating local economy. The tourism caravan will travel from Bangkok to Chiang Rai province, with scenic detours and possible side trips to neighbouring countries. The ministry also expressed confidence that it would achieve its annual target of 7 million visitors from the ASEAN region, up from 6 million last year. In 2016, the ministry will focus on developing Thailand's relatively obscure destinations into viable tourist attractions. Cashew exports to reach 2.5 billion USD in 2015 The Vietnamese cashew sector expects to pocket 2.5 billion USD from exports in 2015. At the seventh International Cashew Conference - Vietnam 2015 held in Ho Chi Minh City on November 23, Vietnam Cashew Association (Vinacas) Chairman Nguyen Duc Thanh said that most major agricultural products are seeing declines, but this sector has enjoyed high growth. Vietnam will continue to maintain its market share of over 50 percent of the globe’s cashew nuts. It is also the 10th consecutive year the country has topped the world’s cashew exporters list, Thanh added. In the first 10 months of the year, the sector shipped 272,000 tonnes of cashew nuts, earning an export turnover of 1.97 billion USD, up six percent in volume and 18 percent in value compared with the same period last year. Despite achieving significant progress on the international market, the sector has continued facing big challenges such as the dependence on imported materials. Vietnam produces about 1.3 million tonnes of cashew nuts a year, but the country can only supply 500,000 tonnes of raw materials and imports the rest from Africa and Cambodia. Vinacas has introduced several programmes to support the sector, organised meetings with foreign material suppliers, and coordinated with the US’s Food and Drug Administration (FDA) to examine cashew processing factories to ensure nut quality for export. HCMC November CPI inches up 0.1 percent monthly Ho Chi Minh City’s November consumer price index (CPI) increased 0.1 percent over the previous month and even declined by 0.45 percent from the same period last year, the local statistics office revealed on November 23. Prices of seven out of the 11 reviewed categories hiked from October, the office said, adding that the biggest pace, 0.64 percent, was recorded in household appliances. They were followed by beverages and cigarettes (0.48 percent); accommodation, electricity, water, fuel and construction materials (0.26 percent); medicine and medical services (0.06 percent); education (0.04 percent); catering services (0.03 percent); culture and entertainment (0.01 percent). Meanwhile, categories that saw their prices drop in November included transport (down 0.36 percent), post and telecommunication (0.14 percent), other goods and services (0.12 percent). Costs for apparel, hats and footwear remained almost unchanged, the statistics office noted. Experts said this month’s fall in CPI was also attributed to five gasoline price cuts between October 15 and November 16, along with lower costs of gas and steel products. Gold and US dollar prices decreased by 0.79 percent and 0.49 percent from last month, respectively. The office added that the average CPI for the 11 months rose 0.27 percent from a year earlier. Farmers look for stable markets for their products While Vinh orange, a speciality of central province of Nghe An, is promising a bumper crop this year, farmers are worried about consumption, local authorities said. Hoang Van Thai, head of Quy Hop district's Agriculture and Rural Development Department, said the district was one of the localities with the largest area of orange growing in the province and also owned the Vinh Orange brand. "Although local residents were encouraged to expand the growing area as Nghe An province has great potential for orange cultivation, it was difficult to find a stable market for the fruit," he said. Truong Thi Van, an agricultural authorities official from Minh Hop commune said this year the commune had over 1,000 ha of orange, an increase of 100ha compared to last year. Despite the fact that the harvest season has just begun, orange productivity this year was predicted to be lower than last year, she said. Due to the effects of prolonged hot weather, the oranges this year were not as fresh and attractive as usual, Van said. Pham Thi Dung, who resides in Minh Hop commune, said she had hoped the yield would be higher than that of last year. But her family harvested about 1.5 tonnes of orange per 1 sao (equal to 360 sq.m). She attributed the low productivity to abnormal weather. Her family earned 450 million VND (20,000 USD) for 10 sao of orange with the price of 30,000 VND (0.8 USD) per kg. According to Vo Thuy Hang, a salesperson from Vo Gia Farm, Vinh orange was favoured due to the fruit's wonderfully sweet taste and fragrance. The price of orange in her farm ranged between 35,000 VND and 55,000 VND (1.5 -2.4 USD) per kg depending on the quality of orange. Vinh orange's main consumption market was Vinh City and some high quality products were transported to Hanoi and other provinces, she said. Hang said despite the fact that farmers received assistance on cultivation techniques they had struggled to find an outlet for their products. Tran Trong Hoa, another grower in Minh Hop commune, agreed. The consumption of oranges in the locality depended on small traders in the district or nearby districts who purchase and then sell to street vendors or at markets, he said. He hoped that there would be an enterprise who were responsible for product's consumption. "At that time, we only have to take care of orange and we will no longer suffer from the situation that private traders put pressure on farmers to sell their products at a very low price", Hoa said. Nguyen Van Dung, chairman of Minh Hop Commune's People's Committee said it was impossible to compare the price of oranges this year with last year because the harvest season had just started. However, experience from past years had shown that orange was a profitable product. Farmers had to find an output for their products by themselves but consumption mostly relied on small traders, he said. Dung emphasised the need for the establishment of a unit who would take care of consumption for farmers' products. Government eyes diversified exports Vietnam will reform the structure of export goods and increase quality of export products to strive for sustainable exports and increase its value by this year-end and beyond. The Ministry of Industry and Trade (MoIT) said that Vietnam could achieve its export value target of 165 billion USD for this year, an increase of 10 percent against last year, but the ministry has recognised that the nation has unreasonable structure of export products. For example, the export value of mobile phones of Samsung Vietnam alone occupied up to 20 percent of the total national export value, Tin tuc (News) newspaper quoted Deputy Head of MoIT's Export Import Department Tran Thanh Hai as saying. In fact, Vietnam's structure of export products lacked balance because they are mainly manufactured by foreign direct investment (FDI) enterprises which account for two-thirds of the total export volume. Therefore, Hai said, besides improving the export of local enterprises, Vietnam should diversify its export products, and seek out other goods with a potential to increase export value in a bid to avoid dependence on some key products. The ministry said local enterprises focused on exporting some key products such as textiles, garments, leather, and footwear, in addition to processed seafood and wooden products, which are heavily dependent on increasing volumes, leading to unsustainable export growth. Hai said the industry and trade sector should have solutions in place to create more reasonable changes in the structure of export goods, and usher in more investment for the creation of brands. This would increase their value. MoIT Deputy Minister Tran Tuan Anh said the important factors were the ability and long term strategies of local enterprises in building brands based on production cost and quality, and the ability to meet the standards in export markets. The local enterprises must enhance their competitive edge while approaching export markets and build a reasonable market strategy based on their ability in production and business, Anh said. Vietnam should also seek new export markets and not just new products. The nation has signed many bilateral and multilateral free trade agreements so it would have more favourable opportunities to expand its export markets, according to the ministry. Even though the ministry's relevant bodies have so far reduced administrative procedures to ease enterprises, the ministry admitted that local enterprises still needed more policies to solve their problems with regard to production and business. Do Ha Nam, General Director of Intimex Joint Stock Company specialising in farming exports, said the Government should offer incentives for FDI enterprises with high-tech facilities and limit FDI enterprises to specialising in trade and processing of raw farming and seafood products to increase the value of Vietnamese products. Nguyen Duc Hong, Deputy General Director of Thong Nhat Rubber Ltd Company, said the Government should offer tax exemptions for components used for producing export goods. German wind energy firms explore partnerships A one-week visit to HCM City from November 23 by executives from eight German wind energy companies will offer the opportunity for wind-power companies in the two countries to build partnerships and boost implementation of projects in the sector. The visiting delegation will meet with local business executives as well as government authorities to forge partnerships. The German companies will present their products and services to around 100 Vietnamese participants at a one-day conference titled "New chances with the new Feed-in Tariff" on November 23. It references the planned revision to the current feed-in tariff of 7.8 cents per kWh. Meetings during the conference will enable German and local companies to discuss opportunities for doing business. A visit to CS Wind Tower in the Phu My Industrial Park I in Ba Ria-Vung Tau province will round off the visit. The potential for developing wind energy in Vietnam is huge with its more than 3,000km of coastline, a monsoon climate and average wind speed of around 6 m/s, according to the Delegate of German Industry and Commerce in Vietnam, the organiser of the trip. The Vietnamese Government recognises this potential and aims to significantly increase production of renewables, including wind power. There are supplementary incentives such as import tax exemption, low land rents, and corporate income tax breaks on offer to enable development of the sector. The visiting executives are from companies that comprise all aspects of the wind power value chain, including ABO Wind AG, Ammonit Measurement GmbH, Anemos GmbH, Enercon GmbH, leXsolar, Nordex Energy GmbH, SETEC Wind-Power GmbH, and WKA Beton Service. Eximbank to deploy new banking software The Vietnam Export-Import Commercial Joint Stock Bank (Eximbank) will use India- based Infosys’ new software Finacle Core Banking for its banking products and services and internal management. The agreement was made at a signing ceremony held in HCM City last week. The software has a modern architecture and technology foundation that can help banks easily develop products, services and expand branches in the future; provide the ability to handle online transactions in multiple languages and currencies; and shorten time to solve problems. “Customer demand for modern banking technology is increasing. It requires Eximbank to choose proper technology solutions”, said Dang Phuoc Dua, Eximbank Vice Chairman. “The software will provide wholesale and retail banking services, capital management and assistance for online transactions,” he added. First Vietnam-Thailand energy forum opens Deputy Minister of Industry and Trade Cao Quoc Hung has stressed the need to set up a dialogue mechanism in the energy sector between Vietnam and Thailand. At the first Vietnam-Thailand Energy Forum, which opened in the central coastal province of Binh Dinh on November 23, Hung said that the event is to concretise the joint statement on energy bilateral cooperation signed in 2012. The two-day forum will provide a valuable opportunity for Vietnamese and Thai policymakers and enterprises to discuss solutions and plans to promote collaboration in the field, Hung said. He expected to receive positive information on specific activities and cooperation projects between the two countries, thus helping deepen the effective cooperation relations. Inspector General of the Thai Ministry of Energy Athipat Bamroong said he believes that the forum will put forth measures to remove headwinds and enhance energy investment. Participants heard presentations and discussions on important issues, including overview of Vietnam and Thailand’s energy, oil and gas cooperation, efficiency of implemented energy projects and orientations for the two countries’ energy development in the future. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR