BUSINESS IN BRIEF 30/9

The Saigon Thuong Tin Commercial Joint Stock Bank in Laos (Sacombank Laos) inaugurated a branch in the Lao central province of Savannakhet on September 29.

Director General of Sacombank Laos Pham Quang Phu said the inauguration of the branch reaffirms the bank’s determination to do long-term business in the country and bring its modern products and services to Lao customers.

He said with an initial chartered capital of 12 million USD, Sacombank Laos has expanded its network to key areas in Laos such as Vientiane capital, Pakse city, and Champasak and Savannakhet provinces over the past nine years.

As of August 31, 2017, the total assets of Sacombank Laos stood at 157 million USD and its pre-tax profit in the first eight months of this year reached 1 million USD, fulfilling 68 percent of the annual target, he noted.

Vice Governor of Savannakhet province Thonkeo Phoutthakaiyalard said the launch of Sacombank Laos’ branch in the province not only generates jobs for locals but also contributes to the local social-economic development in the coming years.

He said local authorities will create the best conditions for the branch to operate efficiently.

On this occasion, Sacombank Laos donated 6,000 USD to the province’s disaster mitigation fund.

US$660 million needed to finance ring road project in HCMC

The HCMC Department of Transport says around VND15 trillion (US$660 million) is needed to cover the three remaining sections of Ring Road No. 2 in HCMC.

The first section spans from An Lac Intersection on National Highway 1 to Nguyen Van Linh Parkway in Binh Chanh District while the second stretches from Phu Huu Bridge to Binh Thai Intersection both in District 9, and the last spreads from Binh Thai Intersection to Go Dua Intersection in Thu Duc District.

The department says the first section has yet to attract any investors. Meanwhile, an investor has expressed interest in developing the second section of 3.82 kilometers in length which requires more than VND5.7 trillion, with around VND4.1 trillion for site clearance. The investor is about to complete a feasibility study for the project.

Part of the third section from Pham Van Dong Street to Go Dua Intersection which stretches 2.7 kilometers long got off the ground in end-2015.

Besides, its remaining section from Pham Van Dong Street to Binh Thai Intersection had its investment plan approved in end-2016. This road, 1.9 kilometers long and 67 meters wide, needs about VND1.05 trillion, with VND842 billion of it going to site clearance. Its investor has sent an investment report to the department for approval.

According to the department, the remaining sections of the ring road are estimated to require VND15 trillion in total. They are among the projects designed to help reduce traffic congestion in the 2016-2020 period.

Therefore, HCMC has petitioned the central Government to give it the green light to offer no-bid contracts to investors to develop the three sections on schedule.

The department says in phase one, the ring road is just 10 meters wide instead of 67 meters in order to meet the demand for travel (in the short run).

The entire ring road is about 70 kilometers long from Nguyen Van Linh Parkway to Phu My Bridge, Binh Thai Intersection on Hanoi Highway, Go Dua Intersection, Tan Tao Intersection, Ho Hoc Lam and Ba To streets, and Nguyen Van Linh Parkway. But some sections of the road have not been built.

Once in place, the road will help ease chronic traffic congestion in the city center as trucks will no longer cut through the inner-city areas when transporting cargo to and from ports in HCMC and between the southeast and the Mekong Delta.

Ministry relaxes requirements for strategic investors in equitized SOEs

The Ministry of Finance is about to finish an amended Government decree replacing Decree 59/2011/ND-CP on equitization of State-owned enterprises (SOEs) in which the ministry seeks to relax a slew of requirements for strategic investors.

According to the draft decree, strategic investors must meet requirements on financial capacity, and their businesses must be profitable for the last two years.

Besides, strategic investors must have written pledges to be active in the same sectors of equitized SOEs, and maintain their brands for at least three years.

Notably, strategic investors must not transfer the State stakes they purchase in three years instead of the current five years, and must have plans to support equitized SOEs such as technology transfer and personnel training.

As such, they will be obliged to pay compensation if they breach their written commitments.

The draft stipulates the sale of State stakes shall be executed upon a certain auction in which the selling price is not lower than the average bid price in the initial public offering.

In comparison with the current regulations prescribed in Decree 59, the ministry has relaxed regulations for strategic investors in equitized SOEs in the draft decree whose aim is to attract potential investors.

For example, the draft decree requires strategic investor to be profitable for two consecutive years instead of the current three years.

In addition, the current decree requires them to maintain the business sector of equitized SOEs without stating a particular length of time, while the draft rule puts it at three years, after which the investors can change the business fields of equitized SOEs.

Consumer finance market underdeveloped

The local consumer credit market remains underdeveloped despite high consumer demand while the black market still attracts a large number of people in need.

At a seminar on consumer lending held by the Institute of Business Administration under the University of Economics and Business in Hanoi City on Wednesday, Hoang Van Hai, head of institute, said consumer loans account for a mere 5-10% of total outstanding loans, compared to 40-50% in developed nations. In addition, the number of credit institutions catering to consumers is small.

According to a survey of the institute with 2,000 respondents in 12 provinces and cities, 62% of them have never taken out consumer loans as they worry about indebtedness and stringent lending requirements. Some 53% of them will ask for consumer loans in case of absolute necessity.

However, 48% of respondents, mainly young people who have never taken out consumer loans before, are willing to borrow if necessary.

The survey shows that there are currently more than ten consumer loan lenders with minimum chartered capital of VND500 billion (US$21.81 million) each, in which, FE Credit is the leader with the largest capital of VND2.79 trillion.

At present, FE Credit holds a market share of more than 48%, followed by Home Credit with nearly 16%, HD Saison with 12%, JACCS with 2% and Mirae Asset Finance with 1%.

Most clients are satisfied with lending services and procedures but they are displeased with the high lending rates.

A representative of the State Bank of Vietnam admitted that the consumer lending market still faces numerous obstacles despite huge demand.

The central bank wants the market to develop safely and moderately so that local people will be not affected by potential risks.

Truong Thanh Duc, chairman of Basico law firm, said the legal system has not facilitated the development of the service.

Finance firms may face higher risks than commercial banks in recovering debts as this kind of loan does not require collateral. Besides, the legal system is insufficient to deal with violations.

However, the sector holds high growth potential as consumer loans are suitable to modern life and help ease concerns of consumers.

The survey also shows that consumers ask for loans for a vast range of purposes. Household businesses tend to get consumer loans to increase investments, farmers to pay for healthcare services and household appliances, students to buy personal appliances or to travel, and officials to pay for healthcare, entertainment, tourism, beauty care and education.

Le Xuan Sang, deputy director of the Vietnam Institute of Economics, said Vietnam has huge demand for consumer credit thanks to the young population whose consumer spending makes up 75% of gross domestic product (GDP).

Saigontourist launches new river tours

Saigontourist Holding Company, the country’s leading tourism services provider, on September 28 put into operation five new tourist boats and launched seven new river tours at Tan Cang tourist site in Binh Thanh District, HCMC, offering a new option for visitors to discover popular destinations in the city and neighboring areas.

With a luxurious design the five new modern motor boats can accommodate 25 passengers each and travel at a maximum speed of 50 km per hour. 

Tran Hung Viet, general director of Saigontourist, said in a statement that river tourism has been an integral part of Saigontourist’s development strategy in recent years and that the city government has assigned Saigontourist to find ways to boost river tourism services in the city.

Three member companies under Saigontourist – Saigontourist Travel Service Co., Binh Quoi Tourist Village and Vam Sat Tourist Site – have joined forces to develop these river tours, Viet noted.

Apart from the new boats and tours, Saigontourist is investing in modern wharfs at Tan Cang and Binh Quoi 2 tourist sites, and Saigon South tourism wharf in District 7 will also go up later.

Saigontourist will focus on promoting these new river tourism services by distributing multilingual brochures to tourists and travel agencies in the city. Tourist information booths can also be found at travel firms, hotels and restaurants under Saigontourist, Viet noted. 

Especially, the company will present its river tours at international travel fairs including Top Resa in France in September, ITB in Singapore in October and WTM in the UK in November, he added.

Following are the seven newly-launched river tours.

Tan Cang-Binh Duong-Ben Dinh tour

The tour departs at Tan Cang tourist site at 7 a.m. and ends at 3:20 p.m. every weekday, taking in some popular destinations such as Ba Son, Thanh Da Canal Bridge, Binh Loi Bridge, Lai Thieu Bridge, Tran Van Ho’s ancient house in the southern province of Binh Duong, Thien Hau Lady Pagoda, Thu Dau Mot Market, Phu Cuong Church, Ben Cat Intersection, Ben Dinh Tunnel and Hai Thanh Koi Garden ecotourism site.

Tickets are priced at VND2.1 million per adult and VND1.58 million per child, including tax and service fee. These prices are applicable to tours for at least six passengers.

Tan Cang-Binh Duong-Hai Thanh Koi Garden ecotourism site tour

Departing at 7 a.m. at Tan Cang tourist site, the tour will allow tourists to explore Thanh Da Bridge, Binh Loi Bridge, Lai Thieu Bridge, Tran Van Ho’s ancient house in the southern province of Binh Duong, Thien Hau Lady Pagoda, Thu Dau Mot Market and Phu Cuong Church. Upon arrival at Hai Thanh Koi Garden ecotourism site, visitors will have the opportunity to visit Koi fish stream, crocodile farm and seasonal fruit farm, and enjoy other services.

The ticket costs VND1.66 million per adult and VND1.245 million per child, including tax and service fee. The prices are applicable to tours with six passengers or above.

The tour ends at 3.30 p.m.

Mangrove Forest-Tan Cang-Can Thanh tour

The boat will pick up tourists at 7 a.m. at Tan Cang tourist site. The tour is available on weekdays and scheduled to finish at 4.40 p.m., giving visitors enough time to see Phu My Bridge, Den Do (Red Light) Intersection, Nha Be Intersection, Yen Quan House, Tam Thon Hiep Village, Nga Bay River, Thieng Lieng Islet and Ha Thanh River.
The boat will stop at Hoa Hiep Port in Can Thanh Town, Can Gio District. From there, tourists can take a bus tour around Can Thanh Town to inspect local residents’ daily activities.

Then, the boat will sail to Monkey Island, Dan Xay Bridge, Binh Khanh Ferry, Phu Xuan, Rach Dia, Rach Ong, Te Canal, Tan Thuan, and Khanh Hoi.  

The ticket price is VND2.04 million per adult and VND1.53 million per child, including tax and service fee. The price is only for tours with at least six passengers taking part.

Tan Cang- Thanh Da Binh Quoi Peninsula tour

The tour is available on Saturdays, Sundays and holidays with the departure time at 4 p.m. Tourists can admire the landscapes along the Saigon River and Thanh Da Binh Quoi Peninsula.

The boat will depart from Tan Cang tourist site, taking in some tourist spots including Binh Quoi 1 and Binh Quoi 2 tourist sites and Rach Chiec Intersection.

Tickets are priced at VND750,000 per adult and VND560,000 per child, inclusive of tax and service fee. The prices are for tours with at least six passengers attending.

Tan Cang-Ben Dinh Tunnel tour

The tour departing at 7:30 a.m. and ending at 2 p.m. is available every weekday. Tourists will be brought to Thanh Da Binh Quoi Peninsula, Binh Loi Bridge, Lai Thieu pottery craft village in Binh Duong and Ben Dinh Tunnel in Cu Chi. The tour price is VND1.899 million per adult and VND1.424 million per child, including tax and service fee, and applicable to tours with at least six passengers joining.

Tan Cang-Long Phuoc tour

The departure time is 8 a.m. from Tuesday to Sunday. The itinerary includes the upstream of the Dong Nai River, the Saigon River, Den Do (Red Light) intersection, Cat Lai Port, Coconut Garden, Long Thanh Bridge, Buu Long Pagoda, Long Phuoc garden and Sy Hoang’s ao dai museum. Tickets cost VND1.52 million per adult and VND1.14 million per child, with tax and service fee included. The prices are for tours with six passengers or more participating.

Tan Cang-Vam Sat tour

The tour departs at 7 a.m. and finishes at 3:30 p.m. on weekdays. Guests can get a glimpse of sites such as the Saigon River, Te Canal, the Rach Dia River, Phu My Hung urban town, Phu Xuan Market, An Thoi Dong, Ly Nhon and Vam Sat ecotourism site. Tickets are priced at VND2.145 million per adult and VND1.61 million per child, including tax and service fee. The prices are applicable to tours with six passengers or more attending.

Tour prices also include boat ticket, snack, lunch, fruit, beverage, admission fee and shuttle bus transfer.  

For booking, contact the River Tourism Center at A100 Ung Van Khiem Street, Binh Thanh District, HCMC. Tel: 028 35125139. Hotline: 0908611138 or 0909284554. Email: [email protected].

Saigontourist to build more boat stops for waterway tourism

Saigontourist Holding Company, Vietnam’s leading tour operator, on September 28 introduced seven new waterway routes and five motor boats taking tourists to destinations in HCMC and neighboring areas and announced to build more boat stops to develop waterway tourism in the city.

Seven tours are from Tan Cang to Binh Duong-Ben Dinh, Binh Duong-Hai Thanh Koi farm, mangrove forests and Can Thanh in Can Gio District, Thanh Da Island, Ben Dinh, Long Phuoc in District 9 and Vam Sat.

Saigontourist general director Tran Hung Viet said many members of the company, including Binh Quoi Tourist Village, Saigontourist Travel Service and Vam Sat Tourist Site, have operated waterway routes. In addition to boats and tourist attractions, the company has invested in wharfs, piers and stations for boats at Tan Cang and Binh Quoi 2 tourist sites and will develop a wharf at Saigon South tourist site in District 7.

The company has added more tourist attractions and services to make these tours more attractive, Viet noted.
Vo Anh Tai, deputy general director of Saigontourist, said the firm will focus on both international and domestic visitors, especially urban people and students.

Tours to Can Gio District are suitable for students and the company will set attractive prices to lure such customers.

Saigontourist sells waterway tours at its travel agents, hotels and restaurants, and promotes them on social and mass media. The products have been also introduced at overseas fairs such as Top Resa exhibition in France this month, ITB travel trade show in Singapore and World Travel Market (WTM) in the UK at the end of this year.

In June, the HCMC government approved a waterway tourism development plan in the 2017-2020 which focuses on waterway tourism. At least seven waterway tourism routes were expected to be developed on the Saigon, Dong Nai, Nha Be, Soai Rap and Long Tau rivers by 2020.

The city targets to attract 450,000 tourists using waterway services next year and the number will increase 15% annually.

Vietnam enjoys US$400 million trade surplus in September

The country enjoys a trade surplus at US$400 million in September, but the trade deficit was estimated at US$442 million during the first nine months in 2017, the General Statistics Office announced on September 29.

Accordingly, the export turnover in September was estimated at US$19 billion, down 3.9% over the previous month yet nonetheless has continued to increase strongly at 23.6% over the same period in 2016. Meanwhile, import turnover for September was estimated at US$18.6 billion, up 2.3% over the previous month and up 27.3% over the same period last year.

Previously in August, the trade surplus reached US$400 million and the figure for July was at US$266 million.

For the nine month period of this year, exports were estimated at US$154 billion, up 19.8% over the same period last year, of which the domestic economic sector gained US$43.2 billion, up 16.8% and the FDI sector (including crude oil) reached US$110.8 billion, an increase of 21%.

Remarkably, several key export items still maintained their upward trend in the first nine months of 2017, including telephone & components valued at US$30.99 billion, up 21.4%; textiles and garments at US$19.26 billion, up 8.6%; and computers, electronic products and components valued at US$18.46 billion, up 40.8% over the same period of 2016.

In the other sense, the import turnover in nine months reached US$154.5 billion, up over 23% over the same period last year, of which the domestic economic sector contributed US$61.3 billion, up 18, 7%; while FDI sector reached US$93.2 billion, an increase of more than 26%.

In overall, in the first nine months of this year, the trade deficit was at US$442 million, of which the domestic economic sector made up a trade deficit of over US$18 billion, while FDI enjoyed trade surplus of US$17.64 billion.

It is noteworthy that the trade deficit from the Republic of Korea in nine months amounted to US$23.3 billion, an increase of 57.7% over the same period of 2016, the largest trade deficit market of Vietnam; followed by trade deficit from China at US$19.7 billion, down 5.6% and trade deficit from ASEAN bloc at US$4.6 billion.

Service exports in this period were estimated at US$9.74 billion, which was up 7.3% over the same period last year, of which tourism services exports reached US$6.58 billion, accounting for 67.6% of the total export turnover and increase by 7.3%.

Imports of nine-month services were estimated at US$12.55 billion, up 2.9%, of which imports of transport services reached US$5.97 billion, accounting for 47.5% of total imports and increased 0.9%. Trade deficit in services of nine months was at US$2.81 billion, equivalent to 28.9% of service export turnover.

According to the General Department of Vietnam Customs, in September 2017, estimated budget collection was at VND22 trillion (US$968 million).

Lotte eyes Vietnamese credit card firm

South Korean conglomerate the Lotte Group is seeking to expand its presence in Vietnam with the acquisition of a Vietnamese finance company, in the hope of offsetting its snowballing losses in China amid an ongoing diplomatic spat between China and South Korea over Seoul’s installation of a US anti-missile shield.

It was reported on September 27 that the Lotte Card Co., the credit card unit of the Lotte Group, is in the final stages of talks to buy out TechcomFinance, a subsidiary of Vietnam’s fifth-largest bank, Techcombank.

“Lotte Card is expected to buy 100 per cent of TechcomFinance from Techcombank,” a source close to the acquisition deal, who declined to be named because the talks are still ongoing, was quoted as telling Pulse News. 

Techcombank hadn’t responded to a request for comment at the time of publishing.
Once the deal is clinched, Lotte Card will be the first South Korean credit card company to hold a credit card license in Vietnam. Via TechcomFinance, it will be able to offer card issuing, installment finance, and consumer loans in the country. 

This is the first acquisition the Lotte Group has made this year. Its decision to venture into Vietnam’s credit card market comes after its retail unit, Lotte Mart, closed its outlets in China after receiving business suspension orders from Chinese authorities.

To offset the growing business risk in China, the Lotte Group is believed to have shifted its focus away from China to Vietnam, which has been on a solid growth path, with many South Korean companies eager to expand their presence. 

The credit card market in Vietnam is still in the early stages of development, with only 3.3 per cent of the population owning credit cards, but the South Korean giant seems to be optimistic about the growth potential, as the Vietnamese Government has been actively encouraging its people to use plastic. 

The Lotte Group, which first entered Vietnam with its fast-food chain Lotteria in 1998, is currently operating several businesses under its ten units, including department stores, large retail stores, hotels, cinemas and home shopping. In July, Chairman Mr. Shin Dong-bin made a visit to Vietnam to look at its businesses in the country.

ADB applauds Vietnam on reducing deficit

The Vietnamese government’s efforts to reduce the state budget deficit accumulated by fiscal imbalances have been applauded by the Asian Development Bank.

In its update on the Vietnamese economy released a few days ago, the Asian Development Bank (ADB) stated that the government has achieved “good results in reducing state budget deficit,” and that “the state budget revenue has been strongly increasing.”

“Like in 2016, total budget revenue rose 18.2 per cent in this year’s first half, thanks to a hike in revenue from value-added tax, corporate income tax, personal income tax, and non-tax sources,” said the report.

ADB also stated that amidst rising budget revenue, the government has done a very good job in tightening spending, which increased by less then 10 per cent in this year’s first half.

The General Statistics Office (GSO) reported that between January and September 15, 2017, state revenue hit $33.5 billion—higher than the $30.2 billion last year—while expenditure stood at $38.7 billion, slightly higher than the $37.2 billion in the same period last year.

Thus between January-September 15, 2017, Vietnam’s budget deficit totalled at $5.2 billion, lower than the $7 billion in the corresponding period last year.

“As revenue growth exceeds expectations, the government’s target of trimming the budget deficit to the equivalent of 3.5 per cent of the GDP in 2017 and 4 per cent in 2018 looks broadly attainable,” said Eric Sidgwick, ADB country director for Vietnam.

However, he also stressed, “This will depend on further efforts to enhance revenue collection and stricter control of spending on wages and salaries and other recurrent expenditures. After three years of lower infrastructure spending, redirecting the 2017 budget toward capital outlays should help achieve this badly needed adjustment to public expenditure.”

Statistics from the Ministry of Finance showed that nominal capital spending has been flat for the last five years. As a result, the share of capital spending in the total budget has fallen to 16 per cent in this year’s first half from the nearly 30 per cent in 2011.

However, since 2010, Vietnam’s nominal recurrent spending has more than doubled, driven by rising wage and salary costs, along with health and education spending.

Currently, Vietnam has about 11 million people on the state’s payroll.

Recently, the World Bank and the International Monetary Fund also commended Vietnam for its efforts to control rising public debt. The World Bank said in its update on Vietnam’s economic situation that Vietnam has been showing “early signs of fiscal consolidation.”

“The government has reinforced its commitment to rein in the fiscal deficit over the medium term in order to contain further increases in the public debt-to-GDP ratio. Fiscal consolidation is crucial to contain the fiscal deficit and stabilise public debt over the medium term,” said Sebastian Eckardt, lead economist and acting country director for the World Bank in Vietnam.

Vietnam’s medium-term financing plan for 2016-2020, adopted by the National Assembly in November 2016, envisages a gradual fiscal adjustment over the next four years. The plan aims to reduce the fiscal deficit to 3.5 per cent of the GDP by 2020.

According to a document produced by the International Monetary Fund (IMF) on Vietnam’s economic situation released two months ago, the IMF executive board “considered the tightening of the fiscal stance as appropriate and welcomed the authorities’ intentions to ensure that consolidation is growth-friendly. They also concurred with the intention to reduce the deficit to 3.5 per cent of GDP by 2020 and to maintain public debt below the legal limit of 65 per cent of GDP.”

According to the National Assembly Economic Committee, by late March 2017, Vietnam’s public debts hit 61.5 per cent of the GDP. It is expected that by late 2017, the rate may reach about 64.6 per cent ($141 billion) of the GDP, almost hitting the 65 per cent limit set by the National Assembly.

Details of Toyota recall programme announced

Viet Nam’s Ministry of Industry and Trade has announced a recall programme to check and replace airbag inflator modules in the front passenger airbag of Toyota Vios models produced and assembled by Toyota Viet Nam (TMV) and Toyota Yaris models imported and distributed by TMV.

Earlier, TMV said it would recall more than 20,000 Vios and Yaris sedans to check and replace the airbag inflator module of the front passenger airbag.

The recall programme covers 18,138 locally-assembled Vios cars produced between January 5, 2009 and December 29, 2012, and 1,877 imported Yaris cars produced from September 1, 2009 to August 31, 2012.

The Toyota Viet Nam dealership network nationwide will offer free checks and replacements for all relevant airbag inflator modules on Toyota Vios cars produced and assembled domestically and those imported.

The programme will last from now until August 21 next year. Total time for checking and replacement is estimated at around 2 hours per vehicle.

For Yaris models which were not imported and officially distributed by TMV, if the request is received from customers, TMV will contact the global Recall Programme of Toyota Motor Corporation (TMC) to confirm information.

Once getting official approval from TMC, Toyota Viet Nam will check and replace the airbag inflator module of the front passenger airbag of affected vehicles at no cost.

Customers should contact TMV dealership, hotline 18001524 and 0916001524 or visit website toyotavn.com.vn and toyota.com.vn.
     
September CPI rises due to impact of floods

September’s consumer price index (CPI) has increased by 0.59% against last month, which is attributed to the impacts of floods and higher prices of petroleum products.

According to the General Statistics Office, price increases were seen in up to nine out of the 11 goods and service groups in the price basket, with the highest levels reported in educational equipment and transport group at 5% and 1.51% respectively. 

They were followed by housing and construction materials with 0.69%; medicines and health services with 0.25%; food and catering services with 0.08%; household appliances with 0.06%; footwear and garment products with 0.05%; drink and tobacco with 0.02% and other services.

Meanwhile, culture, entertainment and tourism services saw the price fall of 0.08% and the rate is 0.04% for telecommunications group.

The office attributed to higher CPI mainly heavy rains, storms and floods which happened in many localities in the month, causing the price hike of fresh flood in these localities. Floods and storms also damaged many houses, schools and infrastructure in many localities, particularly in the central region.

The price increase of housing and construction materials is due to the steel prices which have been raised by 5-10% following more expensive input materials.

Increased petrol prices on September 5 and September 20 were also blamed.

The office also mentioned the increase of 0.31% of health service prices for people who do not own health insurance.

September’s CPI increased 3.4% on-year and 1.83% against December 2016. CPI in the first ninth months of this year increased 3.79% against the same period of last year.
     
US approves star apple fruit imports from Vietnam

Vietnam will be the first country globally allowed to export star apple fruits to the US.

The Animal and Plant Health Inspection Service under the US Department of Agriculture on September 27 sent a document to the Ministry of Agriculture and Rural Development (MARD) officially approving the import of the Vietnamese fruits, after a notice to the same effect was published by the US Federal Registrar in April. 

Star apple joins litchi, longan, rambutan and dragon fruits to enter the US from Vietnam, thanks to the country’s efforts over the last 10 years to meet plant quarantine standards. 

Hoang Trung, head of the MARD’s Plant Protection Department, said similar to other fruits which have been approved for export to the US, star apple must be planted in coded areas and treated with irradiation and checked for eight kinds of insects.

After receiving the US notice, several Vietnamese businesses in the southern region registered for star apple export, he said, noting that shipments may be conducted in 2017. 

Vietnam has about 5,000 ha of star apple fruits, mostly in the Mekong Delta, especially Tien Giang and Can Tho, which yield about 60,000 tonnes annually. 

Vietnamese star apple has been exported to China and other ASEAN nations. Vietnam is also waiting for authorisation from the Republic of Korea to ship the fruit to the market.    

Hanoi retail sector rising with real estate

The upward trend of investment into the Vietnamese retail sector is raising the number of retail stores in the country’s big cities, which results in higher demand for prime locations in attractive real estate projects.

In the first eight months of 2017, it is estimated that the Vietnamese retail sector generated nearly VND2.6 trillion ($114.4 million) in revenue, an increase of 8.9 per cent compared to the same period last year, after inflation-adjustment.

Along with the rising investment into the retail sector and the continuous expansion of convenience stores and new retail models, the number of retail stores in Vietnam has been rapidly increasing, which leads to the growth of demand for prime locations.

CBRE Vietnam, one of the leading commercial real estate services providers in the country, estimated that during the first three quarters of 2017, there were 36,000 square metres of gross floor area to open new retail stores in Hanoi. It is forecasted that the number of retail units in Hanoi will witness a growth of 8 per cent in the last three months of 2017, adding 44,000sq.m of gross floor area.

In 2017, the supply of retail store locations in Hanoi remains pretty much stagnant. 35 per cent of retail projects are located in south-western Hanoi. 21.5 per cent of retail stores, including big shopping malls like AEON Mall Long Bien, Vincom Center Long Bien, and Savico Mall, are located in eastern Hanoi. 13 per cent of retail stores are located in the west, mainly in Cau Giay and Tu Liem districts.

In the next few years, the retail sector in Hanoi is expected to develop along with the expansion of real estate and traffic infrastructure projects. Along with constructions stretching down Ring Road No.3 and the two urban railway metro lines, the projects on AEON Mall Hadong, as well as the shopping mall projects of Vincom and FLC Group, are forecasted to make the western, south-western, and southern regions of Hanoi more attractive in real estate investors’ eyes.

Also, the city’s northern areas are expecting revival with Lotte Group’s Ciputra Mall, which Lotte confirmed in early 2017 would be started soon.

According to a survey of Nielsen, Vietnam’s consumer confidence index reached a record peak during the past five years, which helped the country become the fifth most optimistic country on the globe. This demonstrates the prospects of the retail sector as well as optimism for personal finance and immediate spending of Vietnamese consumers.

Nguyen Hoai An, head of Market Research and Consultancy at CBRE Vietnam, said that 2017 has witnessed the boom of fast fashion, which is a favourable condition for the growth of the Vietnamese real estate market, especially in big cities like Hanoi.

“Everyone is has seen pictures of long queues in front of newly opened international fashion stores, such as Zara or H&M. They have debuted in Ho Chi Minh City, the most populous and active city of Vietnam. After getting acquainted with the Vietnamese market, they will expand their store systems to Hanoi,” An said. 
 
Startup businesses still thirsty for capital

Access to sufficient capital resources is crucial to the successful operations of businesses in addition to good ideas, proper business models and strategies, and qualified personnel.

The favourable business environment of Vietnam along with numerous incentive polices have offered optimal conditions for more and more enterprises to launch startups with their feasible ideals for new products.

However, the fact shows that many are still managing themselves to look for capital inflow, which is seen as a key factor behind their smooth operations.

Nguyen Sac Phong, Project Director of the Green Farm Import Export Joint Stock Company in HCM City, says his company began operations in the field of organic agriculture in 2016 and since then its key products and services have been sold well in the domestic market.

Phong says initially he plans to expand this business model but failed on the back of capital shortage despite his best efforts to seek funding from multiple sources.

Vu Thien Hoang also faced the same situation when he came up with a business ideal for cosmetics and imported food. Hoang had to get along with capital mobilization from his friends and relatives and seek reputable suppliers during the startup process.

“If you do not have money in your hands, all ideas will get stuck,” he shares.
Actually, startup businesses usually only have in-depth knowledge about projects, products, areas of production and business but lack the skills to call for investment and basic knowledge about various related fields such as finance and administration.

In addition, many businesses are often impatient in persuading investment funds to lend them money and most banks set a series of rigid loan conditions that startups find difficult to meet.

Phan Dinh Tue, Deputy General Director of Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) says his bank is still in the process of building exclusive regulations for startup businesses.

According to some economic experts, the capital for startup businesses can still be found from banks and investment funds. The question is to have the knowledge and skills to call capital inflows from commercial banks and investment support funds.

There are many investors and private equity funds that startups can ask for help if their projects are proved to have great potential for development.

Ho Trong Lai from US financial advisory firm Waterstone Capital Partners LLC in Asia says if a start-up business wants to call for investment capital it is required to outline a specific project on personnel and capital using plans.

Many policies on streaming administrative procedures have been adopted, making it easier for businesses to embark on startups. The crux of the matter is how to ensure sufficient capital. It is now time for commercial banks to give a helping hand to startup businesses by setting appropriate lending criteria.

The Ministry of Planning and Investment (MPI) has set up the Startup Assistance Fund with a chartered capital of VND2,000 billion with a view to supporting startups but it is essential to define the right target and how much stakeholders will be involved in and how much will be provided by the fund.

Additionally, startups should stay more active in looking for investment funds or adventurous investors as the better way to help them get rid of capital shortage.

New roads, bridges help southern real estate

Improved transport infrastructure has helped to increase real estate activity in HCM City and neighbouring southern provinces, including Long An, Đồng Nai and Bình Dương.

Transport development has been one of the strong points of the property market this year, according to CBRE Việt Nam.  

In the past few years, several road projects have opened, including the Phạm Văn Đồng Highway linking Tân Sơn Nhất Airport with National Highway No 1A, running through Bình Dương Province’s Dĩ An District to Biên Hoà City in Đồng Nai Province.

From 2000 to 2010, when the eight-lane Phạm Văn Đồng Highway had yet to open, no real estate projects existed along the route.

But after 2010, a number of big projects, such as Đất Xanh, Him Lam Land and Thủ Đức House, were built along the new highway in HCM City and Bình Dương Province.

Previously, real estate projects were built before infrastructure development occurred, but now transport infrastructure is a pre-condition for new property projects.

Before 2007, few property projects were seen along Nguyễn Văn Linh Highway, which connects districts 2, 7, 8 and Bình Chánh with Long An Province.

However, the new 10km highway has triggered a construction boom of apartment buildings along the road.

The 10-km Võ Văn Kiệt Avenue which links the city’s District 1 with National Highway No 1A to Long An Province and the Mekong Delta has paved the way for a number of property projects, including Novaland, 577, Nam Long and Vietcomreal.

The new Võ Văn Kiệt Avenue has also spurred development of apartment buildings near the road after a couple of years of stagnancy.

The newly upgraded and enlarged Mai Chí Thọ Street and Hà Nội Highway, which connect HCM City with Đồng Nai Province, have also jump-started a construction boom of apartment building projects in the area.

Figures from the HCM City Department of Transport show that over 50 property projects, with more than a total of 30,000 apartments, have been built along these two roads.

In addition, construction of the Metro Line No 1 in HCM City has helped promote the property market, despite financial challenges faced by the metro project.

Since 2007, when construction of the Metro Line No 1 began, at least 20 real estate projects with a total of 20,000 apartments have been built along the route.

Bùi Xuân Cường, director of the city’s Department of Transport, said the city would develop more roads and bridges in suburban areas as more residents move from the inner city to suburbs.

“It’s easy to see the rapid growth of property in areas where transport infrastructure has developed. This is a sign of equal growth of the city’s main property areas,” Cường said.

Nguyễn Thành Phong, chairman of the city People’s Committee, said the city had given priority to investment in transport projects, and had given red-carpet invitations to potential investors.

The city has called for investments in 100 projects under the PPP (Public-Private-Partnership) form, mainly investment in transport infrastructure, which also benefits neighboring southern provinces.

Sử Ngọc Khương from Savills Việt Nam said HCM City’s policy on transport projects has been on the right track, with shifts from inner to suburban districts.

More property projects when the Cát Lái Bridge opened, linking the city with Đồng Nai Province’s Nhơn Trạch District, and after the HCM City–Long Thành–Dầu Giây–Phan Thiết Expressway was built in 2009.

When the property market in Bình Dương Province faced stagnant growth, the property market in Dĩ An, a district bordering HCM City, showed signs of revival, with apartments in 10 property projects on sale since 2013.

Similarly, with the extension of Lê Trọng Tấn and Trường Chinh streets, and National Highway No 22 linking western areas of HCM City with Đức Hoà District in Long An Province, the property market of Đức Hoà District expanded, with  nearly 20 apartment building projects on sale since 2010.

The developers of these property projects told customers that it would take only a half hour to travel by motorbike from HCM City’s inner district to the apartments in Đức Hoà District, according to Khương.

“The region’s transport infrastructure development has paved the way for the sustainable development of the real estate market in HCM City and neighbouring provinces,” Khương said.

Water, energy exhibitions to be held in HCM City
     
Two leading exhibitions, by the water and energy industries, will take place in HCM City next November with hundreds of companies from 38 countries and territories taking part.

Organised by UBM Asia, Viet Nam’s leading international water supply, sanitation, water resources and purification event, Vietwater 2017, and most important renewable energy and energy efficiency exhibition, RE & EE Viet Nam 2017, will take place at the Sai Gon Exhibition and Convention Centre in District 7.

The latest innovations and products like pumps, wastewater treatment technologies, water filters and solar and other renewable energy technologies and equipment will be showcased at the exhibitions.

There will be 14 pavilions put up by the UK, EU, France, Germany, Australia, Finland, Belgium, Japan, China, Singapore, South Korea, Hungary, Thailand, and Taiwan.

“This is the third year that the two exhibitions have been organised at the same time,” Eliane Van Doorn, marketing development director, Southeast Asia, UBM Asia, said.

“The exhibition hopes to bring more co-operation opportunities to Vietnamese and foreign companies in the water and energy sectors.

“We hope that technology transfer between Viet Nam and foreign countries will also get a boost.”

There will be several conferences on the sidelines with experts from Viet Nam and other countries taking part.

The organisers told a press conference that Viet Nam has a total of 800 urban areas that provide 8 million cubic metres of water daily to their inhabitants, a 1.6-fold increase in the last 10 years.

The rate of urban water loss is also high at 24 per cent, they said.

The country only has 37 urban sewage treatment plants with a capacity of 890,000cu.m per day, and this means only 12-13 per cent of waste-water is collected and processed, they said.

Viet Nam’s renewable energy market has great potential, they said.

The Government’s renewable energy development strategy aims to reduce greenhouse gas emissions by 25 per cent by 2030 and provide most households access to modern, sustainable and reliable energy at reasonable tariffs.

The exhibitions are important events in encouraging the transfer of innovation and technologies, strengthening business co-operation and attracting investment in the water and energy industries.

VN Index falls after late selling
     
Shares fell slightly on the HCM Stock Exchange on Friday as large-cap stocks lost steam and declined on investors’ late selling.

Viet Nam’s benchmark VN Index on the southern market closed down 0.05 per cent at 804.42 points after having risen as much as 0.5 per cent during the morning session.

It also reversed from a 0.13 per cent drop on Thursday. Friday’s fall also marked a weekly loss of 0.3 per cent for the VN Index.

More than 139.4 million shares were traded on the HCM City market, worth VND3.1 trillion (US$137.6 million).

Friday’s trading figures dropped 27.6 per cent in volume and 20 per cent in value from the previous session’s numbers.

Large-cap stocks were unable to maintain their prolonged growth rates as investors increased selling to earn profits when the market was coming to a close.

Half of the 30 largest stocks by market capitalisation and trading liquidity in the VN30 Index declined while 12 others advanced and three stayed unchanged.

BIDV Securities Company (BSC) said in its daily report that low investor confidence must be blamed for the decline of the stock market as it pulled down market trading liquidity and created strong selling pressure on local shares.

According to Vietnam Investment Securities Company (IVS), after tapping the intraday high of 808.77 points, the benchmark VN Index weakened and finished lower than Thursday’s ending level as investors increased their selling in two stocks – brewer Sabeco (SAB) and PetroVietnam Gas (GAS).

SAB fell 2.3 per cent after having reached its intraday highest growth rate of 2.4 per cent. Shares of the largest brewer jumped 4.3 per cent on Thursday.

GAS dropped more than 2.2 per cent after it had gained total 4.3 per cent in the previous six sessions.

Other large-cap stocks that also weighed down the southern market index included gas station operator Petrolimex (PLX), consumer goods producer Masan (MSN) and Sacombank (STB).

Among the three stocks, MSN was down 1.1 per cent after having risen as much as 2 per cent during the session. MSN gained 1.5 per cent on Thursday.

On the Ha Noi Stock Exchange, the HNX Index inched up 0.21 per cent to end at 107.66 points. The northern market index had dropped total 0.4 per cent in the previous two sessions.

Nearly 62.5 million shares were traded on the northern bourse, worth VND528.8 billion. 

Ethnic women to access formal banking services
     
LienVietPostBank signed a memorandum of understanding (MoU) with CARE International in Viet Nam to launch a pilot programme aimed at helping ethnic minority women access formal banking services.

The women will be able to access these services via a mobile application called Vi-Viet e-wallet.

Under the MoU signed on September 28, the two sides will select six self-managed financial groups in Thanh Nua and Hua Thanh communes of the northern mountainous province of Dien Bien and train them to use Vi-Viet e-wallet for the following purposes — selling group shares, transferring money, lending and other services.

There are more than 30 self-managed financial groups comprising 900 members in the two communes, who are Thai ethnic minority people with low and unstable income ranging from VND1-3 million (US$44-133) per month.

The self-regulatory finance group is a collection of 15 to 30 members (mostly women) who make regular savings through the purchase of shares at regular meetings. These savings are used to lend with interest to members, who agree to develop their livelihood, promote business investment and spend on other purposes.

In Viet Nam, there are 1,500 self-managed financial groups of some 28,000 members, of which 111 groups are in Dien Bien Province, with about 3,000 members. This is a micro-finance model that CARE International has successfully researched and tested in many countries around the world, bringing significant benefits to its members through savings products, by profiting from the savings and gaining access to larger and longer term loans and facing low risk due to discipline of the self-governing group.

With LienVietPostBank, this programme will help increase the number of customers using the e-wallet in remote areas and support the development of this type of banking service.

The partnership programme between LienVietPostBank and CARE International in Viet Nam is expected to be piloted from September to December 2017 in the province, and will then be expanded if it really brings social benefits, such as increase in access to formal financial services, capacity of savings and ability of ethnic minority women to do business.

This pilot programme is part of the project Comprehensive Financing for Ethnic Minority Women (FinLINK) currently funded by CARE in Viet Nam with support from Visa Inc. The main objective of the project is to help ethnic minority women access formal banking services through mobile platforms.

HDBank wins Asiamoney award
     
The Housing Development Bank (HDBank) received Asiamoney’s award for best bank in Viet Nam as chosen by corporate clients at a ceremony in Beijing this week.

The magazine said for its Corporate Client Choice Awards it asked corporate treasury officials to rank their banking partners for quality of execution capabilities and quality of relationship in six key business areas – capital markets, cash management, credit, rates, foreign exchange and trade finance.

Other lenders in Viet Nam to win awards included ANZ, HSBC, Citibank and Vietcombank.

HDBank reported solid results in the first half of the year, with its assets increasing by 31.4 per cent year-on-year to VND169.5 trillion (US$7.46 billion).

Deposits were up 34 per cent to VND152.3 trillion and loans outstanding were up 29.8 per cent to VND105.5 trillion.

Bad debts accounted for 1.6 per cent of loans, much lower than the limit stipulated by the State Bank of Viet Nam of 3 per cent. 

Cai Mep-Thi Vai Port needs changes
     
The Cai Mep-Thi Vai Port Complex has obtained significant investment for its expansion, however, it has still not fully maximised efficiency and capacity, causing wastage of potential and national resources.

The statement was made by Nguyen Van Trinh, chairman of Ba Ria-Vung Tau People’s Committee, at a conference held in the province on Thursday.

The event was designed to find solutions to improve the management and exploitation of this port cluster.

Trinh recommended that enterprises, functional agencies and associations highlight problems and inadequacies and contribute ideas and solutions to help the province improve the performance of the port cluster.

Nguyen Duy Minh, secretary general of the Association of Logistics Services companies in Viet Nam, raised the question as to why people tend to use HCM City’s Cat Lai Port instead of Cai Mep-Thi Vai, despite the former being frequently overloaded.

He said the reason was that the Cat Lai Port had formed an “ecosystem” that included ports, customs (procedures) and fleet transportation, which were synchronised and had optimal cost. Therefore, Ba Ria-Vung Tau Province needed to build an “ecosystem” for the Cai Mep-Thi Vai Port like the Cat Lai Port, besides organising conferences to introduce the port to customers in the region.

In addition, the province should also coordinate with Dong Nai Province to form depots (dry docks) along Highway 51 and have mechanisms to attract transportation companies to this port, Minh added.

Meanwhile, Ngo Minh Thuan, deputy general director of Sai Gon Newport Corporation, suggested incentives on tax and policies should be prioritised and inspection procedures for goods to be shipped directly to the United State and Europe should be simplified.

Besides this, it is necessary to install a customs scanner at the port cluster for quick inspection work and deploy the port management scheme.

Under the project “Improving management efficiency for seaports of port group No 5 and ports in Cai Mep-Thi Vai area”, over the past four years, the Ministry of Transport has been actively coordinating with HCM City, Dong Nai and Ba Ria-Vung Tau provinces and other related ministries and agencies to enhance the efficiency of the Cai Mep-Thi Vai Port Complex, according to Nguyen Dinh Viet, deputy director of the Viet Nam National Maritime Administration.

In recent years, total cargo and container cargo passing through the Cai Mep-Thi Vai Port Cluster has increased positively. Specifically, in 2013, total cargo reached 35 million tonnes, accounting for 5 per cent of the growth rate, and in 2016, the figure increased to 62 million tonnes, achieving a growth rate of more than 30 per cent.

The conference drew the participation of the Viet Nam National Maritime Administration, the General Department of Viet Nam Customs, the Association of Logistics Services companies in Viet Nam, and goods owners and ship owners in the area of the Cai Mep-Thi Vai Port Complex.

Vietnamese, Thai firms seek to promote trade at business-matching event
     
Vietnamese and Thai businesses have enhanced trade promotion activities in the other country to achieve bilateral trade of US$20 billion by 2020 as targeted by the two governments, a Viet Nam-Thailand Business Matching event heard in HCM City on September 29.

Pham Thanh Kien, director of the HCM City Department of Industry and Trade, said the trade has been grown rapidly in the last few years, topping $12.54 billion last year.

Viet Nam’s exports were worth $3.69 billion, an increase of 15.9 per cent over 2015, while Thailand’s exports grew by 6.9 per cent, he said.

He told the Thais, who included executives from 13 major Thai companies in the food and beverages, cosmetics, and personal care industries, to meet and explore the possibility of collaboration with more than 30 Vietnamese companies taking part in the event.

The event was organised by the Thai consulate in HCM City and Kasikorn Bank (KBank) together with the Việt Nam Chamber of Commerce and Industry and VietinBank.

This two-day programme, which ended yesterday, also included site visits on Thursday to MM Mega Market and Saigon Co-op, the leading supermarket operators in Viet Nam, to get an inkling into consumer behaviours in Viet Nam.

Ureerat Ratanaprukse, the Thai consul in HCM City, said with its large population, of whom more than 50 per cent are of working age and increasing affluence, Viet Nam offers a promising market for Thai products, which are of high quality and reasonable priced.

Many Vietnamese love Thai products, another reason for Thai firms to promote their products here, she said.

The consulate and Kasikorn Bank plan to take a Vietnamese business delegation to Thailand to explore business opportunities, she said.

“Building upon the already cordial and close relations between the two countries and Viet Nam being Thailand’s only strategic partner in ASEAN, the Royal Thai Consulate-General in HCM City is fully committed to continue working in close and sustainable partnership with authorities and leaders in HCM City as well as our business partners in promoting two-way trade and investment between two countries towards our leaders’ commitment to achieve bilateral trade of $20 billions by 2020.”

Nguyen Hoang Dung, deputy general manager of VietinBank, said business matching is a value-added service where the bank provides its clients with opportunities to expand their business, diversify distribution channels and develop new markets.

According to Thawee Teerasoontornwong, executive vice president of KBank, the event is part of the bank’s World Business Matching programme, which aims to deepen its client’s understanding of the Vietnamese market and connect them with their counterparts across the region.

“By leveraging the strong network of local partners, we can provide services to the clients which go beyond financial support.

“Viet Nam has always been our key focus, given the current economic performance and favourable policy to support business and investment. More importantly, Viet Nam has become one of the major export markets for Thai products and several Thai companies are now looking to expand their business to Viet Nam.

“I hope that this event can serve as a bridge to help deliver high-quality Thai products to Vietnamese consumers. I can also foresee more products from Viet Nam entering the Thai market, given the increasing awareness of Vietnamese products among Thai consumers, which in turn will help boost the trade between the two countries.” 

Agriculture research results remain on paper

The provinces of Long An and Đồng Nai have been unable to use high-quality research findings to boost agricultural development because they lack funds and are unable to match what farmers want, officials say.

Đinh Thị Phương Khanh, deputy director of the Long An Department of Agriculture and Rural Development, said farmers needed technical support obtained from scientific research that they can apply in production.

Many scientific projects have produced approved, high-quality results that can help farmers, but few have been applied in practice, she said.

By last year, her office had received 16 scientific research results from the Department of Science and Technology for application on the field.

Khanh said her office has asked district and commune authorities to apply the research findings to boost agricultural development, and 14 projects have been registered to do so. However, only one project has received financial support.

“A project to commercially breed catfish in Thanh Hoá District was the only one that received VNĐ190 million (US$8,360). The remaining projects are still on the waiting list, because the Department of Science and Technology has not been able to allocate funds,” Khanh said.

Lê Quốc Dũng, director of the province’s Department of Science and Technology, agreed that funding shortage was a big challenge. Without funding, scientific researches would remain theories, he said.

Dũng said the department has been allocated just VNĐ10 billion ($440,000) for all scientific and technological activities, so the maximum it could offer a project was VNĐ 200 million ($8,800).

There are as many as 32 projects that have not yet been implemented, he added. 

Scientific projects in Đồng Nai Province have faced another problem: selling the produce once the findings have been applied by farmers.

According to the provincial Department of Agriculture and Rural Development, the local Centre for Biotechnology Application has received the results of 30 scientific research, but 16 of them remain on paper.

A project to expand Mokara orchid gardens was carried out as a collaboration between the Đồng Nai Centre for Biotechnology Application and HCM City’s Biotechnology Centre in 2013.

Trial results were good. Mokara orchid growers could earn more than VNĐ1.2 billion ($52,800) per hectare from the second year onwards. However, the total area of orchid gardens four years after the project began implementation was only four hectares or so.

Trần Vũ, farmer in Long Khánh Township, said he had visited the model of orchid planting at the centre and decided not to invest in it.

Vũ said the centre asked farmers to invest more than VNĐ 1 billion ($44,000) for each hectare of orchids, but did not promise stable outlets.

Other projects, one to raise buffaloes in Đồng Tháp Mười and another to grow dragon fruits in Châu Thành District, have showed promise. However, the high cost of production and uncertain markets were major barriers to implementing them on a larger scale.

Highlighting yet another problem, Lương Thành Trung, director of Đồng Nai Province’s Agriculture Extension Centre, said farmers only wanted to plant crops with low production cost and high selling prices. But most of the scientific research projects focused on high-quality products, which increased production costs. This, combined with the inability of authorized agencies to guarantee stable outlets, made farmers reluctant to apply them.

Trung said among the projects applied in practice over the past five years, the project with the highest total area covered just a few dozen hectares.

Khanh of the Long An agriculture department suggested scientific researches should be based on specific requests.

For example, the department would use its budget to ask the Department of Science and Technology to study or research a certain project, and later, use agricultural extension funds for applying them practice through training courses for officials and farmers in districts and communes.

She said businesses could also ask the Department of Science and Technology to conduct research projects, the results of which could be bought for application in production.

This could help ensure that scientific and technological research for agricultural development is practical and efficient, she added.

Vietnam, China seek measures to balance trade

Deputy Minister of Industry and Trade Tran Quoc Khanh and his Chinese counterpart Gao Yan co-chaired the 10th meeting of the Vietnam-China Committee for Economic and Trade Cooperation in Hanoi, focusing on measures to reduce Vietnam’s trade deficit with China.

They were delighted that Vietnam-China trade is growing towards a balanced manner. 

Vietnam’s statistics showed that two-way trade reached 71.9 billion USD in 2016, a rise of 7.9 percent over the previous year, while trade deficit reduced 13.67 percent year on year.

By the end of August this year, trade between the two countries hit 55.2 billion USD, up 23.59 percent over the same period last year, with Vietnam running a deficit of 17.7 billion USD, down 5.76 percent.

China continued to be Vietnam’s top trade partner, while Vietnam was China’s biggest partner in ASEAN and ninth biggest in the world.

The Chinese side agreed to speed up the evaluation of Vietnamese milk and dairy products, while stepping up the quarantine of Vietnamese fruits before allowing the import of these products to China.

At the same time, the two sides discussed a wide range of issues to manage the quality of Vietnamese rice in the Chinese market, while concurring to increase the exchange of information to facilitate the export of rice and alive pigs to China.

Both countries will encourage businesses and relevant trade associations to foster connections to increase the export of Vietnamese farm produce, aquatic products and fruits to China.

They also recognised the effective operation of Vietnam’s Trade Promotion Office in China’s Chongqing city in bolstering bilateral economic and trade cooperation and supporting businesses of both sides. The Chinese side is finalizing procedures to approve the formation of a similar office in Hangzhou on the occasion of the Chinese leaders’ visit to Vietnam and attend the APEC Summit in November this year.

They will work together to deal with problems in joint projects, such as the Cat Linh – Ha Dong urban railway project, while discussing the signing of an agreement on cooperation in some additional projects in the future.

Both sides will also negotiate for the early signing of a protocol replacing the 1992 Vietnam-China border railway protocol, and launch a feasibility study for the use of China’s aid package worth 1 billion CNY (nearly 150 million USD) to build a traditional medicine academy in Vietnam in 2017.

Conference seeks ways to build sustainable rice production chains

Measures to build linkages towards sustainable rice production chains in the context of climate change were the focus of a workshop in the framework of the recent investment promotion conference held in the Mekong Delta province of Hau Giang.

Tran Huu Hiep from the Southwest Steering Committee said that investing in production chains will prevent imbalanced investment. He also recommended that Hau Giang should pay due attention to selecting suitable key products based on local comparative advantages to prevent stretching investment.   

Meanwhile, Doan Manh Truong from the Mekong Delta Rice Research Institute suggested that Mekong Delta localities need to promote linkages through restructuring the rice market from purchasing, processing to consumption markets.

Transparent mechanisms for purchasing activities must be set up to prevent unhealthy competition and contract breakdown, he said, adding that priority should be given to facilitating businesses’ investment in advanced rice preserving and processing systems.

Truong highlighted that connections in rice production and consumption can also be established through cooperation in mechanization, the transfer of technology and scientific advances and development of services and product sale.

Hau Giang has over 200,000 hectares of rice with average rice productivity of 6.2 tonnes per hectare per year. The province has built over 3,300 hectares of large scale fields, drawing the participation of 3,200 local households.

BIM vital to construction sector in Industry 4.0

The Building Information Modeling (BIM) will be a vital solution for the construction sector to approach the fourth industrial revolution (Industry 4.0), said Tran Hong Mai, deputy head of the Ministry of Construction’s BIM Steering Committee.

He made the remarks at the September 28 conference on “BIM Implementation in Constructing and Facility Management Activities” held in Hanoi by the committee and Autodesk, an American multinational corporation that makes software for architecture, engineering and construction.

In Vietnam, BIM used to be applied mostly in projects involving foreign investors, consultants or designers in the past, but now the method has become more familiar to local firms thanks to benefits it brings to their projects, Mai said.

BIM enables shorter project duration and lower costs as it helps operators see where problems could occur during the planning phase and closely manage the construction process, he explained.

It not only is a virtual design but also contains lots of information of the project, said Asia-Pacific and the Caribbean director of Government Affairs of Autodesk Daniel Green, adding that the information will continue to be updated after the planning and designing phases by the contractor.

The operator could take advantages of the information archived in BIM to effectively operate the project, he noted.

The Prime Minister has approved a plan to apply BIM in construction and operation management, aiming to encourage and provide better environment for relevant parties to apply BIM and undertake measures to improve productivity and quality as well as save human resources.

The plan, between 2017 and 2019, will focus on encouraging organisations and companies to apply BIM, developing legal framework and technical standards for the model, and building guidelines and training courses.

HCM City credit growth reaches 13.5 percent in 9 months

Outstanding loans of commercial banks in HCM City in the first nine months of 2017 rose 13.5 percent against December last year to more than 1.67 quadrillion VND (73.57 billion USD), the city People’s Committee report stated.

Of the total, loans in Vietnamese dong accounted for 90.4 percent, equal to more than 1.5 quadrillion VND, up 13.2 percent against December last year. Loans in foreign currencies made up 160 billion VND, up 15.4 percent.

Non-performing loans accounted for 4 per cent of the city’s total outstanding loans, down 0.04 percentage points against December last year.

HCM City-based commercial banks during the period lent 152.77 trillion VND to 37,920 customers in the Government’s five prioritised industries of agricultural production, export business, production of small and medium-sized enterprises (SMEs), supporting industry and high-tech production, of which loans to SMEs made up the highest proportion of 64.4 percent, or 98.44 trillion VND.

The committee also reported that the banks mobilised 1.94 quadrillion VND in the first nine months, up 9.2 percent against December last year.

Of the total capital, deposits in dong reached over 1.7 quadrillion VND, accounting for 87.9 percent and rising 9.6 percent against December last year.-

HCM City’s CPI rises 0.9 percent in September

The consumer price index (CPI) in the southern economic hub of Ho Chi Minh City in September increased 0.9 percent from the previous month and 4.12 percent over the same period last year, reported the municipal Statistics Office on September 29.

According to the office, out of 11 surveyed commodity groups, education saw the highest price hike of 11.2 percent due to high demand in the beginning of the school year.

Meanwhile, transport services rose 0.99 percent as a result of petroleum price adjustment in September, the fifth consecutive increase in the year.

Other groups which experienced price hikes against August included housing, electricity, water, fuel and construction materials (0.3 percent); garments, hats, footwear (0.15 percent); other goods and services (0.02 percent); and drinks and cigarettes (0.01 percent).

The prices of of culture, entertainment and tourism services dropped 0.29 percent; home appliance and drinks, down 0.19 percent; posts and telecommunication, down 0.05 percent; and restaurants and catering services, down 0.02 percent.

In September, the gold price increased 0.93 percent, while that of US dollar dropped 0.01 percent month-on-month.

Vietnam – Thailand trade to hit 20 billion USD in 2020

Vietnam and Thailand are striving to increase bilateral trade to 20 billion USD in 2020, as heard a business connectivity conference in Ho Chi Minh City on September 29.

Thai Consul General in HCM City Ureerat Ratanaprukse stated Vietnam and Thailand are key economic partners, with leaders of both sides agreeing to boost comprehensive trade ties.

The agreement lays the basis for Vietnamese and Thai firms to work together and involve in global and regional supply chains.

Pham Thanh Kien, head of the HCM City Department of Industry and Trade, said the southern city is a potential destination for Thai products, which have gained favour with local consumers for their quality and competitive prices.

Since the beginning of 2017, seven Thai goods fairs have taken place in HCM City, with three more expected to run toward the year’s end.

Vietnam is currently Thailand’s second biggest partner in ASEAN, while Thailand is top trade partner of Vietnam in the bloc.

In 2016, bilateral trade reached 12.54 billion USD, which accounted for 3.6 percent of Vietnam’s total import-export value.

4G quality of Vietnam’s mobile carriers put to test

The official results of quality checks on the stability and speed of 4G mobile Internet services offered by two major carriers in Vietnam have been released.

The results, announced on September 27, showed that MobiFone and Viettel lived up to benchmarks issued by the Authority of Telecommunications, the agency responsible for conducting the tests.

The 4G services were tested on five indicators: the availability of the wireless network, access success rates, average latency time, data transfer drop rates, and data upload/download speeds as recorded in Hanoi.

Military-run telecom giant Viettel had their 4G service tested between June 8 and 16, scoring 100 percent in network availability and 0.65 percent in drop rates.

The average download speed using Viettel’s 4G Internet was 34.9 megabits per second, while the average upload speed was 16.88 Mbit/s.

MobiFone’s 4G service, which was tested between July 19 and 26, demonstrated 99.98 percent network availability in Hanoi and a drop rate of 0.74 percent.

The provider’s average 4G download and upload speeds were 36.91 Mbit/s and 19.28 Mbit/s, respectively.

The report by the Authority of Telecommunications, published on its website on Wednesday, did not include Vinaphone, the country’s third major mobile service provider.

In the State of the Internet Report issued by American content delivery network Akamai Technologies earlier this year, Vietnam’s average mobile Internet speed in the first quarter of 2017 was recorded at 5.3 Mbit/s.

The performance was much slower than the regional average of 9.69 Mbit/s, according to the same report.

WB, Vietnam discuss national priorities

Senior Vice President and World Bank Group General Counsel Ms. Sandie Okoro, has discussed with high-ranking Vietnamese officials on national priorities and support the Bank’s global experience could offer in meeting these goals.

During her first two-day visit to Vietnam September 26-27, Okoro held technical meetings with the Governor of the State Bank of Vietnam, the Minister of Finance, and the Minister of Justice. 

The discussions showcased the strong partnership between Vietnam and the World Bank and explored opportunities for continued Bank support.  Issues discussed included areas where the Bank has been providing technical advice, the fiscal constraints faced by Vietnam, and the importance of capacity building for institutional strengthening.

“Vietnam has made significant achievements in poverty reduction and economic growth, and it needs to tell its development story out loud. I would like to reaffirm the longstanding partnership between Vietnam and the World Bank Group,”said Sandie Okoro, Senior Vice President and World Bank Group General Counsel.

She had a fruitful discussion with women representatives of the private sector where she learnt how Vietnamese women are drivers of growth and contribute to all aspects of Vietnamese economy and other areas, such as climate change.  She also learnt about the constraints facing Vietnamese women in the public and private sector.

During her meeting and inspirational talks with hundreds of students of Hanoi Law University, Ms. Okoro shared her own life experience starting as a law student like them and stressed the importance of being humble, resilient, kind and helpful to all, especially embedding integrity in anything they do. 

During her visit to the Medium Cities Development Project financed by the World Bank in Phu Ly City, Ms. Okoro met with provincial leaders and officials as well as beneficiaries including students and teachers from kindergarten and schools financed by the project.  She also saw firsthand how project helps to improve basic infrastructure and services including water supply and environmental sanitation and rehabilitation of urban roads and bridges.    

The World Bank provides analytical and technical support in a wide range of development areas in Vietnam and is currently financing 51 IDA and IBRD projects, totaling US$10.5 billion. 
Areas of strategic focus include enabling inclusive growth and private sector participation, ensuring environmental sustainability and resilience, and investing in people and knowledge. 
     
Animal feed, corn imports from Argentina account for large share
 
Argentina is the largest exporter of animal feed and corn for Vietnam from South America with a value of US$1.6 billion in the first eight months of this year, according to the General Department of Vietnam Customs.

In the period, animal feed and corn accounted for 86% of total import value. Vietnam imported more than US$1 billion of animal feed and materials from Argentina (up 4.92%) and 2.7 million tons of corn valued at US$525.7 million (up 54.66% in volume and 59.83% in value against the same period last year).

Garment and footwear materials were also major import products with US$29.3 million in eight months, up 57.05%.

In general, 87.5% of import products from Argentina saw a growth in eight months, particularly cotton (up 357.07% to US$6 million).

Coffee markets stay muted in Vietnam, Indonesia on low supply

Asian coffee markets remained subdued this week due to low supplies at the end the crop season in Vietnam and the harvest period in Indonesia, traders said on September 28.

In line with a drop in London prices, domestic coffee prices in Vietnam’s Daklak province fell to 42,000-43,000 dong (US$1.85-US$1.89) per kg from 44,000-44,500 dong last week, discouraging farmers to sell beans, traders said.

London ICE January futures fell 2.23% on September 27 to US$1,931 a tonne, in their sharpest fall in three weeks.

Exporters in Vietnam hardly clinched any deal as they offered the 5 percent black and broken grade 2 robusta on par with the January contract, while importers sought a discount of US$30-US$40 amid low demand.

Meanwhile, local farmers also refused to lower their prices amid a thin stockpile at the end of the 2016/2017 crop season after unfavourable weather at end-2016 hurt output.

Vietnam’s coffee exports volume in the 2016/2017 crop year as of August was 1.4 billion tonnes, down 13  from the same period last year, but exports value during the same period rose 9% to $3.16 billion as prices were higher this year, customs data showed.

The coffee crop season in Vietnam starts in October and ends in September of the following year.

In Indonesia, prices of the grade 4 defect 80 robusta beans in the province of Lampung stood at a premium of US$10 to the November contract, unchanged from last week.

A trader in Lampung, Indonesia’s main coffee growing area, said trade remained light as sellers ran out of beans.

Administrative reforms help firms in Hau Giang

Alongside the application of a multitude of regulated investment incentives, Hau Giang province in the Mekong Delta is pushing administrative reforms to support businesses.

Hau Giang has taken the state focus on investment climate seriously, and the results seem to be paying off

Despite being a ‘young’ location still facing many difficulties in socio-economic development, Hau Giang currently ranks among the top five locations in the Mekong Delta region for attracting foreign direct investment (FDI), according to the Hau Giang Department of Planning and Investment.

Currently, the province is home to 29 FDI projects valued at $808.5 million in total committed capital, including 16 wholly foreign-owned enterprises valued at $642.6 million and 13 joint ventures worth $165.8 million in total registered capital.

Each investment project averages $28 million in terms of committed capital, higher than the Mekong Delta region’s average of more than $14 million. FDI projects in the province come from 10 different countries and territories, such as the US, Canada, Japan, South Korea, China, and Australia, providing jobs for more than 10,000 labourers.

The province expects to see breakthroughs in FDI attraction in the near future, as it has recently received two large-scale FDI projects in the energy sector, with combined investment capital surpassing $3.6 billion.

The first is Jinko Solar Vietnam, a solar energy plant invested by Hong Kong’s Jinko Solar Co., Ltd. in Phung Hieu district’s Hoa An commune. According to Jinko Solar’s project director James Gia Co, the group is set to expedite the project in Hau Giang later this year on an area of roughly 50 hectares with a designed capacity of 40 megawatts (MW). With total estimated capital of $70 million, the project is expected to come online next year.

The second project is the Song Hau 3 thermal power plant by Viet Lao Energy Investment Development JSC, which is a consortium consisting of Deo Ca Investment JSC, Viet Lao Energy Investment Development JSC, and Laos-based Phongsubthavy Road and Bridge Construction Co., Ltd.

The investor wants to deploy the project on a site belonging to Song Hau Power Centre in Chau Thanh district’s Phu Huu A commune. The plan entails building a large-scale thermal power plant to connect to the national power grid, thus meeting the ever-increasing electricity demands of the region.

The plant’s designed capacity comes to around 2,000MW (consisting of three 660MW turbines), with a total annual power production output of 13 billion kilowatt-hours. With an estimated VND81 trillion ($3.68 billion) in total investment capital, the project is to cover an area of 117ha.

As for domestic investment, Hau Giang is now home to 490 projects valued at VND123 trillion ($5.6 billion) in total registered capital. A number of leading players have made forays into the province.

Local consumer goods giant Masan Group operates Masan Brewery HG in the province under the White Lion brand. The brewery reported an initial designed capacity of 100 million litres per year, and is valued at more than VND1.6 trillion ($72.7 million).

Major beverage firm Tan Hiep Phat Group is racing to complete the project Number One Hau Giang, which is expected to be the largest beverage plant in the southwestern region, worth VND4 trillion ($181 million) in total investment capital.

AquaOne Hau Giang JSC is set to build a water refinery in the province to serve Song Hau Industrial Park and neighbouring locations, with first-phase production capacity reaching 100,000 cubic metres per day – valued at VND1.9 trillion ($86.3 million).

Businesses in the province have been consistently growing in number, strength, and professionalism. The province is currently home to 4,200 businesses, valued at over VND45 trillion ($2.04 billion) in total committed capital.

In the first half of this year, the registered capital amount rose 2.4-fold compared to one year ago, with the average capital size of each business reaching VND6.13 billion ($278,600) – compared to VND2.07 billion ($94,000) last year.

In the past, Hau Giang has focused on improving the local investment climate, with priority given to accelerating the pace of administrative reform and business support.

The single-window, one-stop shop mechanism has been applied across business fields, aiming to build an effective interface between businesses and the public administration. The licensing process can now be done online, and is constantly modernised to boost state management efficiency in diverse fields such as taxation, land-use rights registration, and business administration.

According to director of the Hau Giang Department of Planning and Investment Nguyen Huu Nghia, the procedural administrative processing time in the province has been significantly shortened.

For instance, the time to obtain a business registration certificate now averages only 1.5 days, and changing the content of a business registration can be done in half a day.

The time to review an investment proposal now averages 15 days – against a regulated 32 days – while investment certificates will be granted after two days on average (compared to the regulated five days).

In industry and trade, certificates for food safety and petrol businesses require an average of three days against a regulated 15 days.

“Hau Giang is concentrating efforts into pushing administrative reforms, investment promotion, and planning activities in an attempt to attract effective investment projects to the province. Investors will enjoy a multitude of investment incentives and support activities when doing business in the province, such as tax reductions and exemptions as well as post-licensing support,” said Dong Van Thanh, Deputy Chairman of the Hau Giang People’s Committee.

New milestone in Vietnam’s enterprise-oriented economic reform

The Ministry of Industry and Trade (MOIT) recently made a historic decision to scrap 675 business conditions in a significant move to remove the obstacles facing enterprises and improve the business climate in Vietnam.

The abolition came just after two weeks of reviewing the business regulations in the sectors under the MOIT’s jurisdiction.

The 675 removed conditions were 63 higher than the original plan and accounted for 55.5% of the total regulations under review.

Dau Anh Tuan, head of the Vietnam Chamber of Industry and Commerce’s Legal Department said that the MOIT’s move is a positive signal, adding that if other ministries follow suit, the business climate in Vietnam will improve significantly and the business community will gain more confidence in the government’s commitment to reform.

Echoing Tuan’s comment, Director of the Central Institute of Economic Management (CIEM) Nguyen Dinh Cung stated that, except for the MOIT, no other ministry has yet taken steps to discard unnecessary business conditions.

MOIT Minister Tran Tuan Anh emphasised that removing the obstacles to businesses will be his ministry’s foremost undertaking as part of a wider administrative reform that seeks to re-organise the ministry and improve the business climate in Vietnam.

He stated that the MOIT’s efforts are bringing about positive effects and the frequent complaints of businesses, such as those concerning checks on energy efficiency, formaldehyde content and steel quality, energy labelling and declaration of chemicals have been or will be resolved completely.

For example, abolishing checks on formaldehyde content in textile materials and sample products has helped garment enterprises to save VND1.5 million for each check and has reduced the customs clearance time by up to nearly four days.

Meanwhile for steel products, the MOIT has scaled down its audits on enterprises fully complying with quality control regulations, helping to reduce the customs clearance time by three to four days and is saving enterprises roughly VND2 million for auditing each shipment. The customs clearance time is expected to be cut further, as of October 1, when post-clearance audits come into effect.

Most enterprises stated that the MOIT’s bold administrative reforms have helped them to cut costs and possess more resources to enhance their competitiveness and grow larger.

CIEM Director Nguyen Dinh Cung stated that abolishing the unnecessary business conditions will boost Vietnam’s industrial production, trade and exports.

In the time ahead, the MOIT will continue listening to voices from the business community in order to promptly deal with any arising issues, seeking to reduce the types of goods that require audits and simplify the administrative procedures and business conditions within the scope of the ministry.

Sacombank sells VND2,580 billion deep debt to VAMC

Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) has also signed contracts to sell three debts worth VND2,580 billion (US$114 billion) to Vietnam Asset Management Company (VAMC).
 
These bad debts will be purchased according to market value. Their mortgages are real estates, machines and equipment in Da Nang and HCMC.

The two sides yesterday signed a cooperation agreement on handling bad debts and asset backlog. According to the agreement, Sacombank and VAMC will work together to build a roadmap to handle debts every year.

Sacombank will propose the list of bad debts which will be sold to VAMC through special bonds and those which will be traded according to market value.

This year, they have set a target of tackling VND15-20 trillion of deep debts. Of these, at least VND1 trillion will be traded according to market value.     

Toyota recalls 20,000 Vios, Yaris cars for airbag problem

The Competition and Consumer Protection Agency has received a report from Toyota Vietnam Company about the recall of 20,000 Vios and Yaris cars to examine and repair the inflator modules of front passenger airbags. 

According to an announcement from the Ministry of Industry and Trade yesterday, 18,138 Vios cars locally assembled and 1,877 imported Yaris cars will be recalled.
The inflator modules of front passenger airbags will be replaced free of charge to ensure safety for passengers.
 
GDP growth rate strongly increases in third quarter

Gross Domestic Product (GDP) growth rate has been up quarter by quarter this year and reached 7.46 percent in the third quarter, a strong increase compared to 5.15 percent the first and 6.28 percent in the second quarter.
 
That was announced at a meeting presided over by deputy Prime Minister Vuong Dinh Hue, chairman of the Advisory Council on National Financial and Monetary Policies, yesterday afternoon.

The meeting was organized to estimate macroeconomic norms in the third quarter and the first nine months of 2017, aiming at providing the Government with estimations and advises in macroeconomic management at the regular cabinet meeting in September which will take place next week.

At the event, council members estimated that monetary and fiscal policies have been run stably in a harmonious way contributing in positive changes of macroeconomic norms.
Inflation rate continued being curbed below 4 percent. It increased 0.59 percent in September mainly because of petrol price adjustments. Core inflation averaged 1.45 percent in nine months, forecast to approximate 1.5-1.8 percent this year, below the assigned norm of the National Assembly.

In addition, capital mobilization for the economy via Government bonds during the nine months reached VND147 trillion (US$6.47 billion), accounting for 80 percent of plan, thanks to stable interest rates.

Foreign direct investment (FDI) attraction hit a record high. As of September 20, there was $14.6 billion newly registered capital and $6.8 billion additional capital. Total new and additional funds rebounded 21.7 percent over the same period last year.

Although the Government has permitted the State Bank of Vietnam to increase the credit growth rate from 18 to 21 percent this year, council members said it is still needed to keep a close eye on the market to prevent fluctuations and pay attention to credit quality to ensure the progress and quality of projects.

They proposed the Government and the Prime Minister to continue administrative reform, reduce business and investment procedures to create advantageous conditions for enterprises, quickly amend and issue policies to lure investment in agriculture and rural development, require authorized agencies to further cut interest rates and lower costs for production and trading activities.

VNA/VNS/VOV/SGT/SGGP/TT/TN/Dantri/VNE