An announcement to this effect by the Vietnam Association of Seafood Exporters and Producers (VASEP) on Thursday has belied fears and reports that exports of the fish could be rejected or cancelled in the coming time.

Reports of rejection or cancellation of Vietnamese tra fish exports “has no basis,” VASEP said in a note.

It said that tra fish exports to the US had declined in the first quarter due to a shortage of raw materials, but recovered in the second quarter with an 8.4 per cent increase, thanks to rising demand and increase in supply of raw material.

VASEP General Secretary Truong Dinh Hoe said while the equivalence process was not yet completed, it was prudent not to assume any possibility of Vietnam not passing such determination or speculate on suspension of ongoing exports. 

“During the 18-month transitional period, both sides have worked out co-operative approaches to common issues in question and US Food Safety and Inspection Service (FSIS) has also given close guidance on how to comply with its requirements,” Hòe said.

He also said that while Vietnam’s tra industry is well developed with substantial and stringent food safety controls, he is concerned that an import discrimination policy by the US government may cause unfavorable and unfair decisions against Vietnam. 

“VASEP hopes that there will be solutions reached by the two governments not to disrupt free trade between the two countries,” the note said.

In early July, the FSIS had announced that it would apply new import regulations for Siluriformes fish from August 2, instead of September 1 as stated earlier.

Under the regulations, authorised agencies in the exporting country must submit to the FSIS documents to prove that its food safety control system is equivalent to that of the US.

Following this, the Vietnam National Agro-Forestry-Fisheries Quality Assurance Department (NAFIQAD) has provided guidance on inspection requirements regarding labelling, detailed inspection content, testing parameters for chemicals residues and speciation to establishments eligible for exports to the US (as listed in https://www.fsis.usda.gov/wps/wcm/connect/eb3720e3-221c-4928-a018-028df5cc28b5/Vietnam_establishments.pdf?MOD=AJPERES)

On August 15, the Ministry of Agriculture and Rural Development (MARD) launched Siluriformes Controlling Programme designed for Siluriformes fish and related products exported to the US market.

The programme aims to demonstrate equivalence and minimise rejection of fish batches exported to the US, thus reducing costs for enterprises.

Starting from September 1, 2017, the programme will apply strict supervision on all stages of fish farming, processing and exporting. Qualified products must satisfy 85 criteria of the US regarding veterinary medicine, 106 criteria on pesticides, four on dyeing chemicals, 17 on metals and eight in biochemistry.

In case a fish batch attracts warnings from an authorised US agency, NAFIQAD will request the seafood processor to trace its origins and investigate why it failed to meet food safety requirements. The department will also halt the concerned facility’s Siluriformes fish export to the US, while handling its violations.

NAFIQAD is also preparing a complete equivalence package to be submitted to FSIS on August 20, 2017. After that, FSIS will initiate the review process of the submitted documentation, and if the submission provides an initial basis for believing the country to be equivalent, FSIS will do an in-country audit.

VNS

Viet Nam imported more than 6,900 cars worth US$171 million in July, recording a drop of 11.2 per cent in volume and 2.6 per cent in value compared with the previous month.

The Viet Nam’s localisation rate is still low, causing the price of local cars to be higher than those imported from Thailand and Indonesia. 

According to a report from the General Department of Vietnam Customs, the volume of cars imported from Thailand, which is the largest exporter of cars to Viet Nam, was sharply down to 2,688 units worth $46.7 million, compared with June’s 3,270 units worth $59 million.

The number of cars imported from South Korea was 519 units, down 123 units. The import of Indian cars was 64 units, down 36 units.

Meanwhile, there was an increase in the volume of cars imported from Indonesia last month, with 2,108 units imported to Viet Nam, more than 300 units higher than the previous month.

In the January-July period, the country spent more than $1.2 billion to import more than 57,800 units from foreign countries, a year-on-year decrease of 28,000 units.

In another development, the increasing import of cars and methods to enhance the capacity of the local auto manufacturing industry was highlighted at a seminar on the global automobile industry and lessons for Viet Nam, which was held in Ha Noi on August 10.

Deputy Director of the Central Institute for Economic Management (CIEM) Nguyen Thi Tue Anh said the country had been issuing targets to the automobile industry for a long time; however, it was currently underdeveloped and not as efficient as expected.

“There are many reasons — objective and subjective — but the key factor is that the market capacity is still small with low purchasing power, and it lacks proper policies and mechanism to inspire development,” Tue Anh said.

The Ministry of Industry and Trade is building a package of policies to support the automobile industry’s development, in which it targets to minimise costs for businesses to raise production efficiency and competition.

Learning from the experiences of other countries, experts said Viet Nam needed to take the initiative in mobilising human resources, especially grey matter, capital and technology, to set up concentrated automobile industry complexes, where part suppliers are a key force. With that it can establish a production chain supplying auto parts and components.

Pham Anh Tuan, head of the Vietnam Automobile Manufacturers’ Association’s Policy Subcommittee, said a car had more than 30,000 devices. However, automakers focused only on the key parts, therefore they needed contribution from part suppliers.

“The establishment of concentrated automobile industry complexes is very important as it will create conditions for the industry’s development in Viet Nam,” Tuan said.

Nguyen Thi Xuan Thuy from the MoIT’s Policy and Strategy Institute said Viet Nam’s automobile market was a potential market, thanks to its population and high GDP growth rate. However, it would face fierce competition from regional countries from January 1, 2018, when the tariff for car imports within ASEAN nations would become zero.

Meanwhile, the localisation rate is still low, as the locally-assembled auto businesses and domestic automakers are still suffering from import tax on parts and components, causing the price of local cars to be higher than those imported from Thailand and Indonesia. This has reduced the industry’s competition capacity and threatened its development in the context of an open market, where the customers have the right to buy cars from various suppliers. 

VNS

Since the establishment of the ASEAN Economic Community (AEC), Vietnam has become a potential market for regional retailers, which promotes the development of the domestic retail sector, but also alerts domestic enterprises to watch out and continuously improve to not fall behind in this fierce competition. 

Vietnam after AEC

Before 2015, the Vietnamese retail sector largely slipped under the notice of the mass media and there were only a handful of investors, such as Big C, a brand of Groupe Casino from France, a mass retailer with operations around the world. 

Additionally Metro Cash & Carry, an international self-service wholesaler from Germany, and some big retailers from Asia, such as Aeon Group from Japan and Lotte Group from South Korea were present.

The situation had changed after the establishment of the AEC in 2015, after most trade barriers among different member states were eliminated and a market of more than 600 million consumers was created. 

Vietnam has become a target for regional countries, such as Thailand, Indonesia, Malaysia, and Singapore. Among all these countries, Thailand can be considered the biggest and most noticeable partner in the retail sector.

Within a year, the three biggest M&A deals in the retail sector were implemented by billionaires from Thailand. 

The first one was major Thai multi-sector corporation Central Group. In 2015, it had spent more than $100 million on acquiring the number one electronics retailer at the time, Nguyen Kim, and one year later spent $1.05 billion acquiring the Big C chain which comprised of 33 supermarkets and shopping malls in Vietnam.

Recently, this group has spent more than $10 million acquiring Zalora’s business in Vietnam and Thailand. Zalora is a brand of Global Fashion Group, the umbrella group that holds Rocket Internet-backed online fashion businesses worldwide.

Up till now, Central Group has been operating four famous brands in Vietnam with more than 100 outlets, including four Robins shopping centres, 27 SuperSports stores, 30 Crocs and New Balance fashion stores, one hotel, 21 Nguyen Kim electronics stores, one e-commerce channel, and 13 Lan Chi supermarkets.

Meanwhile, the second biggest M&A deal took place in January 2016 by TCC Group, a Thai enterprise operated by the second richest billionaire in Thailand, Charoen Sirivadhanabhakdi.

The entire wholesale system of Metro Cash & Carry was acquired, consisting of 19 shopping centres and other real estate items, which were priced at about $848 million. It is estimated that Metro Cash & Carry accounted for 22 per cent of the market share in the Vietnamese distribution sector.

Before the acquisition of Metro Cash & Carry, in the middle of 2013, Berli Jucker PCL (BJC), a subsidiary of TCC Group, bought the Family Mart convenience store chain, which had belonged to Phu Thai Group and Japanese company Family Mart, and changed its name to B’s Mart. BJC now has around 95 B’s Marts in Vietnam. BJC plans to spend an additional $31.2 million to add 205 stores in 2018. 

Some experts explained that domestic room to develop in the Thailand retail sector has become narrow and saturated, so Thai retailers are forced to look for other potential markets. Thus, the establishment of AEC is a chance for Thai retailers to gain success outside their home turf.

High expectations for Vietnam 

In the last three years, Pham Hong Hai, general director of HSBC Bank (Vietnam) Ltd. (HSBC Vietnam), along with other partners, has been visiting ASEAN countries to call for investment.

According to Hai, in the next five years, there will be a strong wave of investment from ASEAN countries into Vietnam.

“The Vietnamese market has huge advantages in terms of stabile politics and macro-economy, low labour costs, and many preferential policies to attract investment,” Hai said.

Nearly two years ago, Pico electronics market chain revealed its plans to expand in Laos, Cambodia, and Myanmar, with especially high expectations for Myanmar, as Pico expected it to grow into a potential market with good chances for future development. However, due to some barriers in terms of politics and unclear open-door policies in Myanmar, this plan has not been implemented yet. Now Pico is continuing this plan with another partner, but it will be scheduled more carefully.

“The domestic market is still the dominant market of Pico. In our development plan, we will give top priority to domestic expansion, which may create a foundation for future sustainable development if Pico decides to invest in other markets,” Trinh Duc Tuan, deputy general director of Pico, said.

Another electronics retailer Mobile World Investment Corporation (MWG) also plans to expand its business in the ASEAN. However, MWG has only one mobile device store in Cambodia. This year, MWG has scheduled to launch some more outlets overseas, but this step is considered a trial only.

“The markets in Laos and Myanmar have not really opened up for foreign businesses, so the mobile device store in Cambodia is our first step to expand overseas. However, the market environment here is not completely transparent and favourable, so all our business plans are trials only until the business environment improves,” Tran Kinh Doanh, general director of MWG, said.

The increasing competition from foreign enterprises cannot discourage this retailer. Doanh said that in the retail sector, electronics is still a playground mostly for Vietnamese enterprises. For example, the Nguyen Kim electronics chain has the giant Central Group behind to support, but it cannot win significant market share from its rivals.

At the end of June 2017, there have been 1,527 MWG outlets. Of the total, the Dien may XANH chain had 404 stores and the Bach hoa XANH chain had 110 stores. With the large number of outlets all over Vietnam, MWG is still on the hunt for attractive M&A deals.

Currently, it is rumoured that MWG is planning to acquire Tran Anh Digital World JSC (Tran Anh), one of the biggest competitors of MWG in Northern Vietnam. Detailed information has not been released yet, Tran Anh did not confirm rumours, but Doanh did not answer to the negative when asked. Besides, he revealed that negotiations on MWG’s M&A deal has almost been finished.

“We do not mind competing with foreign rivals. We want to hold a strong position in the market, and the best way is to focus on qualified services and products for more than 93 million Vietnamese nationals,” Doanh said.

VIR