BUSINESS IN BRIEF 19/1
Predicted positive outlook for HCMC’s retail sector

Following the relatively good figures in the fourth quarter of 2014, the retail market in Ho Chi Minh City is forecast to become better this year.

According to CBRE Vietnam, Ho Chi Minh City welcomed five new retail properties in the beginning of 2015, providing more than 100,000 square metres gross floor area (GFA) to the market.   

Positioned in District 7, SC VivoCity offering 62,000 square metres of retail space will be completed in the first quarter this year. Another shopping centre opened in January is Vincom Thu Duc, comprising 27,860 square metres of retail space.

Saigon Square 3 and Hung Vuong Square are two new bazaars that have been launched recently, with retail spaces of 3,100 square metres and 9,500 square metres respectively. A supermarket in Go vap district known as Aeon Citimart, a joint venture between Aeon and Citimart, was officially opened last week.

“From 2015 onward, there will be approximately 1.3 million square metresfrom 62 future projects. However,only 25 per cent of future projects is currently under construction and completing,” said Savills Vietnam.

In the latest report released by Savills, it is expected that 362,000 square metres will be brought to the retail market in next two year, increasing mainly in Ho Chi Minh City’s new urban areas. Especially, District 7 will account for 65 per cent of the market share.

In the fourth quarter of 2014, Ho Chi Minh City’s total retail stock was nearly 900,000 square metres. This slight increase drives the average occupancy rate of 92 per cent, making it the highest level in the past five years. Meanwhile, all segments’ rent was stable compared to last quarter.

The retail market fared well because most of mid and low-end products brought to the market have met the demands of the purchasers. More importantly, the city has a total population of eight million with the highest rate of income per capita, so it has enormous potential for retail market.

“Another factor driving the retail sector is the daily changes in consumer shopping preferences,” said Nguyen Khanh Toan, research manager at Savills Vietnam.

Ho Chi Minh City will also have more opportunity for growth as the country is committed to the World Trade Organization (WTO) to open its retail market this year.

“In 2015, Vietnam will have to accede to its WTO’s obligation to permit the opening of wholly foreign-owned retail businesses, which will generate the demand for retail space from foreign retailers entering the market in Vietnam,” said Duong Thuy Dung, deputy director and head of research and consulting services at CBRE Viet Nam.

However, CBRE pointed out that the Economic Needs Test was still a technical hindrance to trade. In the short term, the impact is not so enormous because foreign retailers have been involved in the market for a while, including Big C, Central Group, Metro Cash & Carry, Lotte Group, Aeon Group, CJ Group and so on.

CBRE also noted that the country’s retail and services turnover has always maintained an average growth rate above 10 per cent despite the economic downturn. Solid economic growth and a rising middle class population are expected to continue to drive this retail market in 2015.

Huawei eyes Vietnam

Information, communication and technology giant Huawei is hoping to strengthen its smartphone market share in Vietnam.

Huawei, which is the world’s third largest smartphone maker, last week said Vietnam was a strategic market for Huawei’s consumer business group, as an engine of rapid growth in the next five years.

Huawei Device Vietnam will develop three strategic transformations from business-to-business to business-to-customer, from hardware to user experience centric, and from off line to online-to-offline, including organisation, resource, distribution model, and marketing.

The firm is going to heavily invest $5 million into marketing in Vietnam’s smartphone market with a view to boosting its brand awareness from 13 to 35 per cent in 2015.

The firm is also planning to deliver over 500,000 high-quality smartphones for the Vietnamese domestic market this year.

Over the past few years, Huawei has been co-operating with local operators in supplying telecommunications equipment. This firm has also introduced some smartphone lines including the Ascend G700 and G610s and the Huawei Y320.

Last week, Huawei officially launched its new-generation smartphones including its flagship Mate7 and P7 Arsenal and G7 and Holly Honor.

While Mate7 offers consumer experience innovations, P7 Arsenal provides a limited edition, with the G7 proving the latest innovation of the successful Huawei G series and the Honor Holly which is the best choice for entry users, Huawei said.

“Huawei has always considered Vietnam one of its most important markets, as the country boasts a big population of almost 100 million, predominanntly younger people who are more savvy in the use of new technologies. Vietnam is also witnessing high growth in the usage of telephones in general and smartphones in particular,” said Huawei Device Vietnam general manager Shawn Shu.

Huawei will focus on expanding store coverage in Hanoi, Haiphong, Danang, Ho Chi Minh City and Can Tho this year. It aims to build over 200 stores with Huawei branding, and a distribution network of over 700 stores, while strengthening its retail team structure.

“In addition to boosting activities to develop our brand name, Huawei will continue investing more strongly on expanding co-operation with partners and distribution channels, and online sales as well. We will also swell and develop our service and customer care centres,” Shu said.

Experts forecast garment, textile export target accessible this year

Negotiations of Trans-Pacific Partnership (TPP) and other free trade agreements (FTA) have been done and they are going to be signed this year, which experts say are an opportunity for the garment and textile industry to maintain its export growth momentum last year and obtain a turnover target of US$28-28.5 billion this year.

Last year the garment and textile export turnover reached nearly US$24.5 billion, an increase of 16 percent over 2013. Garment items brought US$21 billion up 17 percent while fibre products yielded US$3 billion.

The export turnover grew 12.5 percent to U.S. market, 17 percent to the EU and remained unchanged at 9 percent to Japan.

Vietnam has been the second largest exporter of garment and textile products to the U.S. for the last several years. The annual export turnover from Vietnam to U.S. market has grown 12-13 percent in recent years while the North American nation’s import value has grown only 3 percent.

These achievements were partly due to influences from free trade agreements.

Experts believed that these agreements will make the garment and textile industry’s export target accessible this year because they are directly related to the main export markets of Vietnam, for instance TPP with the U.S. and Japan and FTAs with the EU, South Korea, and the Customs Union of Russia, Belarus and Kazakhstan.

When the Vietnam-EU FTA is signed, the tariff rate will fall from 12 percent to 0 percent. Similarly, the TPP agreement will abolish U.S. tariff rates of 17-18 percent.

Despite of the above advantages, experts have said that Vietnam would face difficulties in getting the export turnover target as the material source of garment and textile industry is largely dependent on import.

Ms. Raffaella Carabelli, chairwoman of the Association of Italian Textile Machinery Manufacturers, said that besides diversifying the export markets businesses should reduce the reliance on import material sources for successful integration.

Sharing the same view deputy chairman of the Vietnam Association of Garment and Textile Le Tien Truong said that localization rate increase is one of factors helping businesses improve their competitiveness and products’ added value.

From now until the agreements are signed and take effect, businesses should invest in material production, link fibre production with cloth production and garment making to improve the supply chain, he added.

They should quickly change from processing with high material import ratio into all-in production to meet customers’ demand and increase the added value of their products, he said.

Thaco leads local auto market last year

Truong Hai Auto Joint Stock Co. (Thaco) overtook Toyota Vietnam as the biggest auto seller last year with total volume of more than 42,300 units.

The figure beat the target of over 35,100 units Thaco set last May. Last year also saw Thaco’s sales reach a 10-year high.

With sales of 42,338 autos in 2014, Thaco accounted for 32% of the total units sold by members of the Vietnam Automobile Manufacturers Association (VAMA), which dominates the country’s automobile market.

Toyota Vietnam used to be a leader on Vietnam’s automobile market for years but Thaco’s sales last year were nearly 1,100 units higher than those of the Japan-invested company.

Thaco is the only company in the country that manufactures and assembles cars, trucks and buses with local content of 16-46%.

The company attributed its success to the stable growth of certain brands whose vehicles are distributed by Thaco such as Kia (South Korea) and Mazda (Japan), the re-launch of Peugeot (France) and the development of commercial vehicles manufactured and distributed by the company.

Particularly, Thaco sold as many as 21,000 commercial vehicles last year, a year-on-year rise of 41%, with a shift from heavy-duty trucks to mid-duty ones and tractors. Some commercial vehicles with good business results were from South Korea such as Frontier, Ollion and Hyundai HD34/65/72 as well as buses and sleeper coaches.

As for cars, Kia was the most successful brand with sales of over 11,200 units last year, rising by 26% against 2013 while the sales of Mazda nearly doubled those recorded in 2013 to reach 9,438.

Regarding high-class autos, Thaco delivered 100 Peugeot units to customers.

Thaco has a manufacturing and assembly complex located in Quang Nam Province and 136 showrooms and dealerships nationwide.

Thaco looks to sales of around 51,000 units this year, including 26,800 cars and 24,700 commercial vehicles.

FDI disbursements higher than new approvals in Dong Nai

Foreign direct investment (FDI) disbursements stood at US$2.3 billion in Dong Nai Province last year, much higher than the fresh FDI pledges for new and operational projects.

Bo Ngoc Thu, director of the Dong Nai Department of Planning and Investment, told a meeting last week on the province’s socio-economic performance last year and this that FDI disbursements were 2.3 times over 2013 and accounted for nearly 19% of the nation’s total.

That was the highest FDI disbursement level in Dong Nai. Thu credited the outstanding achievement to the southern province’s effort to attract investors with financial capacity, prestigious brands and good markets.

The achievement was of great significance because the province worried the worker protests against China’s illegal placement of a giant oil rig well in Vietnam’s waters in May last year would leave negative impact. This proved foreign investors are confident in the province, the department said.

Last year, foreign investors registered over US$1.73 billion for fresh and operational projects in Dong Nai Province, nearly doubling the province’s target.

Thu said most of the new projects were licensed in high technology, friendly-environment, supporting, agriculture and services industries in line with the province’s policy.

Thu said the strong increase in new FDI pledges also resulted from the province’s streamlined investment, tax and customs procedures and its investment promotions in such potential markets as Japan and South Korea.

Despite this success, Dong Nai aims for US$900 million to US$1 billion in registered FDI and disbursements of US$1 billion this year. Thu said the province would continue attracting investments in high technology, friendly-environment and supporting industries, among others.

So far, the province has licensed 1,457 FDI projects with combined capital of nearly US$26 billion. Of them, the valid projects number 1,131 with total capital of US$21.49 billion.

Farming sector to ramp up exports in 2015

The agricultural sector will seek strong growth in production and business this year, after recording increases in exports last year, according to the Ministry of Agriculture and Rural Development (MARD).

In 2015, the agricultural sector expects to see an increase of 3-3.3 percent in gross domestic product (GDP), a year-on-year surge of 3.5-3.7 percent in the value of production and 32 billion USD in the value of farming exports, forestry and seafood products, compared to 30.8 billion USD in 2014, reported vietnamplus.vn.

Also, the agricultural sector hopes to focus on increasing high added value agricultural products, efficiency and sustainable development.

In 2015 the local economy is expected to further integrate into the global economy, which will cause the agricultural sector to continue reviewing and adjusting plans and structures of production to increase productivity, as well as the quality and efficiency of exports and local markets, said Minister of Agriculture and Rural Development Cao Duc Phat.

To raise the total export value of the sector to 32 billion USD this year, the ministry will actively work to implement existing multilateral and bilateral agreements, including with the World Trade Organisation and regional free trade commitments.

Officials noted that it will stand side by side with exporters by updating them on foreign markets' latest trade policies and jointly devising feasible market strategies for added-value products.

To extend its commercial reach, the ministry will also promote marketing activities and promptly deal with technical and trade barriers.

According to the MARD, Vietnam gained a year-on-year increase of 11.2 percent in the export value of farming, forestry and fisheries products to 30.8 billion USD for 2014, despite lackluster demand in markets throughout the world.

The farming, forestry and fisheries sector also posted an estimated 9.5 billion USD in its trade surplus, a rise of 7.7 percent.

The ministry said, in 2014, that the value of most export products has surged against previous years, though 2014 has not been a bright year for the consumption of farm products at home or abroad.

Demand for farm products on the world market has continued falling since 2012 because key export markets of Vietnamese farm products, such as the European Union (EU), the US, Japan and the Philippines, have seen slow recoveries and low purchasing power to directly affect exports from Vietnam.

However, seafood and forestry exports had strong growth in export values to push the sector's total export value up last year.

Seafood took in 7.92 billion USD, marking a yearly growth of 18.4 percent, with the US making up 21.81 percent of the total export value and becoming the leading seafood importer for Vietnam.

Also, wood and wooden products enjoyed an increase of 11.1 percent in earnings, at 6.2 billion USD last year. The US, China and Japan are the largest buyers of wood products, accounting for 66 percent of the total export volume.

Nearly 322 bln VND for rice farming development

The Prime Minister has decided to spend additional 321.6 billion VND (15.1 million USD) from the State budget on rice field development and protection.

The money will be allocated to 18 localities across the country, including Ha Giang (7.4 billion VND), Hai Phong (16.4 billion VND), Nam Dinh (38.6 billion VND), Ha Tinh (29.4 billion VND) and Ca Mau (24 billion VND).

Vietnam ’s 2014 rice production was estimated at 28 million tonnes, equivalent to 45 million tonnes of paddy, up almost 800,000 tonnes over 2013, according to the Ministry of Agriculture and Rural Development.

The country exported 6.5 million tonnes of rice worth about 3 billion USD last year. Major export markets for Vietnamese rice include Singapore, mainland China, Hong Kong, Cote d'Ivoire, Algeria and Indonesia.

Vietnam sees bright prospects for labour exports in 2015

The number of guest workers working abroad is predicted to increase in 2015, especially as an ASEAN Economic Community is established within the year, said Tong Hai Nam, Deputy Head of the Overseas Labour Management Department (OLMD).

The Ministry of Labour, Invalids, and Social Affairs (MOLISA) is launching a project to support the conveyance of Vietnamese labourers to foreign markets in accordance with national agreements and labourer supply contracts between domestic companies with foreign partners, Nam revealed.

According to MoLISA Deputy Minister Pham Minh Huan, the ministry will continue to seek out new markets with good working conditions and high wages, while simultaneously maintaining traditional markets in 2015.

Emphasis will be also placed on intensifying training for qualified labourer sources, as well as promoting the signing of skilled-labourer contracts, Huan said.

Vietnam sent a record-high 105,840 guest workers abroad in 2014, 110 percent of the year's target, according to statistics from the OLMD.

Compared to 2013, the number of Vietnamese guest workers sent to Taiwan increased to 62,000 from 46,000, while those working in Japan rose from 9,600 to nearly 20,000.

Nearly 7,000 guest workers were sent to the Republic of Korea (RoK), 5,000 to Malaysia, 4,000 to Saudi Arabia and 1,000 to Qatar, all below previous rates. Compared to 2013, the number of workers in these four markets dropped by about 5,000.

According to Nam, the record numbers of guest workers sent to Taiwan can be attributed to the improved management of labour export companies and the fee reduction policies for workers in Taiwan, while the territory’s economic development policies have created greater demand for guest workers.

In addition to key traditional markets, several newly emerging markets with high incomes will open more opportunities for guest workers, including Africa, the Middle East, and Japan, according to the MoLISA.

Vietnam will also sign agreements in several fields with Angola and Saudi Arabia this year, which will facilitate greater labour export to these countries, said the ministry.

There is also potential to send Vietnamese guest workers to Japan to work in construction, mechanics and manufacturing, agriculture, and food processing between now and 2020.

Many highly skilled Vietnamese guest workers will also have more opportunities to work abroad under ASEAN agreements to allow freer movement of workers with the formation of the ASEAN Economic Community, Nam noted.-

Businesses in Binh Duong seek 45,000 unskilled workers

Enterprises in Binh Duong province, one of the southern region’s economic centres, need to recruit over 45,000 unskilled workers in 2015 to meet their production demands in garment, footwear and wood manufacturing fields.

According to the province’s employment centre, more than 21,000 unskilled jobs were available during its first job exchange session on January 11, offering a monthly salary of 4-5 million VND (235 USD).

The businesses looking to hire new employees include Truong Thanh Wood Industry Company, Apex Vietnam Co., Ltd, and Sheico Vietnam Co., Ltd.

Nguyen Thanh Phuong, head of the job introduction office, said that this year the office continues to help local businesses take part in labour linkage programmes with other provinces to attract workers.

Last year, businesses in the province generated jobs for more than 46,000 labourers. Over 4,000 businesses registered to recruit 70,000 labourers at job exchange sessions during 2014, but only 37,000 people were ultimately employed.

Ornamental trees causing headaches for growers

Early blossoms, a late Tet and bad weather are creating a headache for orchardists growing ornamental trees to mark the festive holiday, with growers in HCM City fearing big losses.

“My family grew nearly 1,000 peach trees this year," said Nguyen Thi Xuan, a grower from Tay Hoa’s Nhat Tan area.

"As this year’s festival will come one month later than usual, we’ve seen many early peach blossoms and have decided to sell peach branches to earn some money from now on at between VND50,000 and VND100,000 each,” Xuan said.

Nguyen Quang Vu, an owner of a peach orchard in Nhat Tan, said his family grew nearly 1,000 curved peach trees this year. Hundreds of regular clients have placed orders to buy or rent peach trees for the Tet holiday.

Normal peach trees are priced at from VND2m to VND3m each, while prices of nicely curved peach trees reach between VND30m and VND40m each. Rental fees range from VND10m to VND15m per well-shaped peach tree.

But kumquat growers in Tu Lien and Quang An areas of Hanoi say trees have been dying due prolonged rain.

“Half of our total 150 kumquat trees have died and most of those survive are stunted," said Nguyen Vu Khanh, owner of a kumquat orchard in Tu Lien area said.

Prices of kumquat trees start from VND500,000 to more than VND10m.

Orchardists in Hanoi are complaining up to between 20 and 30 percent of their kumquat trees have died due to bad weather.

Meanwhile apricot growers in HCM City are worrying about big losses as apricots have blossomed too early.

“More than 80 out of total 300 apricot trees in my garden have blossoms. I'm worried we may not have good trees for sale when Tet really comes,” said Tran Thien An, owner of an apricot orchard in Thu Duc District.

The same situation is recorded at many other orchards in Cu Chi and Nha Be Districts and District 12, meaning big losses for them. Many growers have invested billions of VND on apricot trees this year.

Prices of apricot trees range from VND500,000 to VND50m each.

“Early apricot blossoms mean big losses for us as if we can’t sell and we’ll have to wait for the next festival and invest more on the caring of the trees,” said Vo Dong Hau, who has a decade experience in apricot growing.

Amata to invest in three more projects in Dong Nai

Thailand’s industrial estate developer Amata Corporation will invest in three hi-tech and urban area projects in Dong Nai Province following the success of a large-scale industrial park in the southern province.

Bo Ngoc Thu, director of the Dong Nai Department of Planning and Investments, told the Daily at a media briefing last week that the province had agreed on the locations for the projects to be developed by Amata Vietnam JSC and Amata VN Public Limited Co.

Amata VN Public Limited Co. will be the investor of an urban area covering 753 hectares in Tam An Commune in Long Thanh District, while the two remaining projects – a hi-tech park and an urban area – will be developed by both affiliates of the corporation on 410 hectares and 122.3 hectares respectively in Long Thanh District.

The provincial government has set up a task force to support the Amata companies to boost site clearance and compensation. The investors are now in the process of measuring land and hiring consultants for the projects.

The cost of the three projects remains unknown. The authorities of Dong Nai Province have not revealed when they award the investment certificates for the projects.

Previously, Amata Corporation signed an agreement with the provincial government to develop a hi-tech and an urban area in Long Thanh District at a first-phase cost of US$530 million.

The corporation also plans to invest in a large-scale hi-tech industrial park in the northern province of Quang Ninh and a big industrial complex in the central province of Binh Dinh.

VASEP describes ice-to-fish ratio rule as unreasonable

The Vietnam Association of Seafood Exporters and Producers (VASEP) has described the regulations on tra (Pangasius) fish fillet moisture content and ice-to-fish ratio as unreasonable, saying they could hurt the seafood processing sector.

In response to the industry’s complaints, the Ministry of Agriculture and Rural Development recently delayed implementing the provisions in Decree 36/2014/ND-CP that force seafood processors to ensure moisture content of 83% and a 10% ratio of ice to fish.

Speaking to the Daily, VASEP vice chairman Nguyen Huu Dung said the new regulations could not work. He stressed the postponement just eased concerns of enterprises but did not completely solve the issue.

The rules are too strict, according to Dung. The Government should regulate food safety issues rather than imposing criteria on product quality.

“Fish are a product of national significance,” Dung said.    

According to VASEP, there is a misperception of Vietnam’s monopoly on the tra fish market, which leads the country to set its own rules. In reality, tra fish was an alternative product for the world’s whitefish market when the UN Food and Agriculture Organization (FAO) tightened controls on whitefish caught in the cold sea regions in 2002-2008. But FAO has relaxed the controls, resulting in the volume of fish catches increasing and thus affecting the demand for tra fish.

VASEP is also concerned that the new regulations will push up the price of Vietnamese tra fish fillets, making it hard for local exporters to compete.

Local tra fish exporters have also voiced outcry over the regulation that requires exporters to register their export contracts with the Vietnam Pangasius Association (VN Pangasius) and the latter will check whether exporters can meet relevant requirements or not before certifying them for shipment. The association’s certification is one of the conditions for customs clearance.

The decree also forces seafood enterprises to have tra fish farms in the regions which have been zoned and approved by the agriculture ministry and relevant agencies.

“Such rules do not help enterprises as the National Agro-Forestry-Fisheries Quality Assurance Department (Nafiquad) all knows about enterprises and their tra farms. There is no legal basis for an association to certify contracts between enterprises,” Dung said.

In addition to a fee of VND100,000 (US$4.67), exporters must pay VN Pangasius for each 20 tons of tra fish certified, and exporters will have to spend more time completing paperwork required by the association.

Vietnam exports 650,000 tons of tra fish a year, according to Dung.

“Why does the agriculture ministry require new procedures for enterprises while the Prime Minister has ordered agencies to streamline administrative procedures?” Dung said.

Therefore, VASEP called for the ministry to require exporters to provide clear information about product quality instead of applying the regulations on the moisture content and ice-to-fish ratio, and abolish the association’s certification of tra fish export contracts.

Office rents drop in Hanoi

Falling office rents in Hanoi are offering tenants more choices to lease space with lower rents but better services and facilities, according to property service provider Savills Vietnam.

Do Thu Hang, head of research and consultancy at Savills Vietnam, said office tenants in the capital city now have more opportunities to lease offices at reasonable prices as the landlords of high-end and low-end segments have adjusted down rents.

According to Hang, it was tough for companies to find offices of Grade A in Hoan Kiem District at US$25 per square meter in the past but it is possible these days despite limited supply.

According to Savills Vietnam, there was only one new office project coming into operation in Hanoi in the final quarter of last year, bringing the total supply of office space for lease in the city to around 1.49 million square meters. Average occupancy in the period rose 4% quarter-on-quarter to 77%.

Rents of Grade A office space in the fourth quarter of last year edged down 3% against the previous quarter while those of Grade B and Grade C offices fell by 1%. The current average rents of Grade A, Grade B and Grade C offices are US$26.6, US$16.7 and US$11.7 per square meter respectively.

Savills Vietnam estimated Hanoi will have 240,000 square meters of offices from new projects this year and an additional 300,000 square meters in 2016-2017.

Hang said office rent declines between the first quarter of 2013 and the end of last year pushed up occupancy in all segments, especially offices of Grade C. Occupancy in the downtown area of Hanoi improved after the landlords of many buildings slashed rents and relaxed leasing terms.

Occupancy at some office buildings of Grade A in the fourth quarter of last year picked up nearly 30% over the previous quarter while the occupancy rates at office buildings of grades B and C jumped 21%. The occupancy at office buildings in the downtown area bounced back after five consecutive quarters of declines.

The improvements in office occupancy in Hanoi downtown, according to Savills, also resulted from promotions such as free rents when offices are being decorated or free space for car parking in addition to lower rents.

A number of Grade A office buildings in the downtown area of Hanoi like Hanoi Tower, Pacific Palace and 63 Ly Thai To Building have upgraded their facilities and offered flexible leasing terms to retain tenants and attract new customers.

Savills Vietnam forecast future supply of offices for lease in Hoan Kiem District will be limited with only around 5,000 new square meters in service between and 2017. However, office rents in Hanoi will continue the downward trend due to ample supply in other parts of the city, especially in the segment of Grade A buildings.

Local producers frown on sugar import proposal

The Ministry of Industry and Trade’s proposal to allow importing 50,000 tons of sugar from Laos at an import tax rate of 0% has triggered concerns among local sugar refineries.

Local sugar firms fear that sugar imports, if approved, would cause the already-abundant sugar supply to swell on the domestic market. The country will face a sugar oversupply of around 700,000 tons this year.

According to local sugar firms, a Laos sugar refinery owned by Vietnam’s Hoang Anh Gia Lai Joint Stock Company (HAGL) would export sugar to Vietnam in accordance with the ministry’s proposal.

The director of a sugar mill, who asked not to be named, said the ministry’s proposal for allowing the sugar import at a tariff of 0% is unfair to domestic sugar producers.

“Due to the steady price declines in the past time, domestic sugar refineries have lowered the sugarcane buying prices in the 2014-2015 crop and they have been criticized for making life hard for farmers,” the director said.

According to Nguyen Hai, general secretary of the Vietnam Sugarcane and Sugar Association (VSSA), HAGL was permitted to ship over 30,000 tons of raw sugar from Laos to Vietnam and the importer was Bien Hoa Sugar Company, which then refined and re-exported the sugar.

As explained by Hai, domestic enterprises were in trouble last year when exporting sugar to China as there were periods when the sugar price in China was lower than the selling prices of sugar plants in Vietnam.

Statistics of VSSA showed that only 181,000 tons of sugar had been sold to China as of last November, well below the 325,000 tons in 2013.

Nguyen Van Loc, vice chairman of the company, explained that transporting unrefined sugar from Laos to Vietnam for refining and exporting to China pushed up sugar prices in Vietnam.

According to Hai, to ensure a level playing field for domestic sugar firms, the Government should include the 50,000 tons into the import quota in 2015 and the volume must be subject to an import tax of 5% in line with the existing regulations.

In a document sent to the trade ministry early this month, the Ministry of Agriculture and Rural Development agreed on importing 81,000 tons of sugar this year.

HAGL said in 2013 that the company’s sugar production cost in Laos was around VND4.4 million per ton while the average cost in Vietnam was VND12 million per ton.

Therefore, chairman of HAGL Doan Nguyen Duc has many times reassured domestic enterprises that HAGL sugar could be sold to anywhere and that domestic enterprises should not worry about the volume of sugar which HAGL sends back to Vietnam.

Nonetheless, local enterprises asked why the company did not choose to export sugar directly to China but shipped it to Vietnam for refining before it is exported elsewhere.

The unnamed director said the low production cost as claimed by HAGL may be an exaggeration.

The Government will make a final decision on the trade ministry’s proposal based on comments of relevant agencies like the Ministry of Finance and the Ministry of Agriculture and Rural Development.

Steel oversupply sparks competition

Competition among construction steel producers has turned fiercer on the domestic market as supplies have far surpassed demands.

The local demand for construction steel this year is estimated at six million tons but the combined output of steel mills nationwide could be 11 million tons, the Ministry of Industry and Trade forecast in a recent report on the sector.

Not only construction steel, there is an oversupply of other steel products such as ingots, galvanized sheets and color-coated sheets as their supplies are 1.5-2 times higher than needed.

For example, steel ingot output is calculated at 10 million tons a year while domestic demand for the product is only 5.5 million tons. The annual output of galvanized and color-coated steel sheets is 2.5 million tons but demand is only 1.3 million tons a year.

Pham Chi Cuong, former chairman of the Vietnam Steel Association (VSA), told the Daily on January 12 that previously local authorities were competing with one another in licensing steel projects without caring about the master development plan for the steel sector.

“Back to the time when I was chairman of VSA, the association asked relevant agencies and local authorities not to license so many steel projects as this could result in an oversupply,” Cuong said. “Overcapacity is a waste of investment.”

Cuong pointed out that many investors have pulled out of their licensed steel projects in recent years due to oversupply and weak financial positions as they could not afford advanced technologies to make good products at competitive prices.

Only investors with deep pockets can survive troubled times as they can apply high technologies to produce quality products for domestic consumption and export, Cuong said.

“Although the steel sector last year posted a year-on-year growth rate of 10%, many enterprises in the sector have incurred losses and gone bust. As competition grows stronger in the north, the number of dissolved firms there is higher than in other parts of the country.”

In a document sent to the industry ministry late last year, VSA vice chairman Nguyen Van Sua proposed the ministry enhance its management and review steel projects to remove unviable ones.

VSA also suggested relevant ministries and departments set up technical barriers to curb steel imports.

Fake cookies target Tet in La Phu Commune

Popular cookie brands, including imports, are being counterfeited at La Phu Village, La Phu Commune in Hanoi's Hoai Duc District to take advantage of high demand for the upcoming Tet festivities, though local authorities have yet to act in any concerted manner.

Tan Hoang Gia Company is promoting cookies in packaging similar to several well-known brands, but using slightly different names to dupe buyers. The Danish butter cookies, Danisa, is being faked and sold as "Damisa", while the King Henry cookies from Poland are being faked as "Henry".

The phoney cookies are also being sold at significantly lower prices. A box of Danisa normally costs about VND107,000 (USD5) but Tan Hoang Gia is selling 16 boxes of Damisa at VND218,000. "If you buy a whole 1.25-tonne truck, it's only VND10,000 per box," said a representative of Tan Hoang Gia Company.

Even some well known Vietnamese brands are being faked. The cheap Chinese cookies are imported and repacked with false names, labels and expiration dates.

At Hoang Hiep Factory, tools to make cookies and package labelling were found, with he edible contents left opened to mosquitoes and bugs. Some equipment appeared not to have been cleaned for some time.

Employees at Khoi Nguyen Phu Factory do not wear masks or gloves when making cookies. "At this time of the year, the machines run through the night. We can't make enough to export to other provinces," said an employee.

Since such famous brands can be easily detected in big cities, most of the cookies are being sold in rural and mountainous provinces such as Lai Chau, Son La and Dien Bien. Traders say that while they are making big profit, consumers are also getting access to cheaper products.

Local authorities maintain everything is in order.

In January 2014, police arrested Nguyen Van Ban and seized 1,136 boxes of fake jams for Tet. Du Quoc Bao, vice chairman of La Phu People's Committee said all production facilities have licenses and met hygiene standards.

"About whether they fake famous brands of cookies and beverages or not ... we don't have authority to deal with this issue," he said.

Seafood exporters depend much on farmed fish

Vietnam’s seafood exporters will continue to rely on suppliers of cultivated fish as a majority of local fishing boats can operate along the coast where fisheries resources are being depleted.

The Ministry of Agriculture and Rural Development estimated last year’s fish catches at over 2.7 million tons, up 4% against 2013, while the volume of cultivated fish picked up 5.5% to 3.4 million tons.

Between 2010 and 2014, the volume of netted fish jumped by only 250,000 tons while the output of farmed fish went up 700,000 tons.

This year, the ministry targets to farm and catch 6.65 million tons of fish, up 5.5% against last year. Of this volume, fish catches are put at 2.7 million tons, up a mere 0.7%, and cultivation takes the remainder, up 9.7%.

The figures showed there remain hurdles to increasing fish catches though the potential of Vietnam’s marine resources is high.

A study of the Research Institute for Marine Fisheries on marine resources in the 2011-2013 period indicated fisheries reserves in Vietnam’s seas were around 4.25 million tons.

The sea of the southeast region accounts for the highest percentage of Vietnam’s fisheries reserves with over 1.1 million tons. The East Sea’s middle part has over one million tons while fish reserves in the waters of the northern, central and southwest regions range from 610,000 to 750,000 tons.

However, 68% of Vietnam’s fisheries reserves are mainly offshore while coastal reserves take only 12%.

Therefore, the lower-than-expected capacity of the local fishing boat fleet is one of the major reasons why the volume of fish catches has increased insignificantly in the past year.

According to the agriculture ministry, boats of over 90 horse power make up less than 28,300 out of 130,000 fishing boats in operation in the country.

Analysts: Potential growth in Southeast Asian capital markets in 2015

2015 is expected to be an important year for many Asian countries, particularly when the ASEAN Economic Community (AEC) is slated to be formed by the end of the year, promising to drive economic expansion in Southeast Asia, according to economists.

Stephen Grundlingh, co-CEO for Singapore and regional head for Southeast Asia at asset manager Franklin Templeton Investments, said that emerging markets are forecast to grow at 5 percent this year, as compared to 2.3 to 2.5 percent in developed markets.

There is a massive opportunity over the long term for investors, he said, citing major reforms underway in many Asian countries, from China, India, the Republic of Korea to Indonesia, and Japan’s huge economic stimulation package.

According to Grundlingh, Franklin Templeton Investments expects massive inflows of capital into Asia along with the upcoming free trade agreement introduced by the AEC will drive the economies over the region quite significantly.

To tap the growth prospects, Franklin Templeton Investments has launched the Templeton ASEAN Fund and planned to set up more equity-funds focused on Asia and ASEAN in particular.

Franklin Templeton Investments has 899.5 billion USD in assets under management and is one of the top cross-border mutual fund companies in the world, according to Lipper FMI-Thompson Reuters as of Dec 31, 2013.

Freshwater fish output in Ca Mau to drop dramatically

Freshwater fish output of the southernmost province of Ca Mau is forecast to stand between 20,000-22,000 tonnes in 2015, falling by 10,000 tonnes from last year, a local official said.

Such a decline is attributable to fewer rainfall and storms that triggered a lack of sufficient water for the growth of freshwater fish stocks, a shortage of fries supply, and the pre-season fishing.

Nguyen Van Tranh, Deputy Director of the provincial Department of Agriculture and Rural Development, said the sharp fall will affect the income of thousands of local farmers and drive up fish prices, especially in the prior Tet (Lunar New Year Holiday) period when purchasing power usually soars.

Freshwater fish prices have hiked up, said Nguyen Thi Phuoc, a fish trader at Ca Mau market. Prices of snakehead fish rose from 80,000 VND to 120,000 VND per kg while that of tilapia also increased to 150,000 VND per kg from 120,000 VND.

Being surrounded by sea on three sides, fishing is an important industry in Ca Mau province. However, fish farming has also been thriving in the locality. The southernmost province is part of the Mekong Delta key economic region, which also comprises Kien Giang and An Giang provinces and Can Tho City.

Hoa Binh seeks to boost tourism by 2020

The northern province of Hoa Binh is hoping to receive more than 3.32 million visitors by 2020, generating a revenue of nearly 2.5 trillion VND (118.5 million USD), which they intend to double by 2030, ultimately bringing 11 trillion VND (520.3 million USD) into the province.

The figures were released in the recently-launched tourism development plan for the province through 2020, including a vision for 2030.

Under the plan, the tourism sector, which is expected to create nearly 47,000 jobs for local workers, will need an investment of more than 23 trillion VND (1.1 billion USD) by 2030, of which 85 percent is expected to come from foreign investors.

In order to achieve these targets, the sector aims to improve infrastructure facilities, and expand high-quality services to enhance its competitiveness.

Director of the provincial Department of Culture, Sport and Tourism Bui Ngoc Lam said the province has made targeted investments to develop infrastructure facilities surrounding the Hoa Binh reservoir, one of the national key tourist sites.

The promotion project has involved a number of businesses, including Hoa Binh Tourist JSC, which has invested more than 100 billion VND (5.1 million USD) in building high-end hotels and yachts to attract more international tourists.

With the advantage of its proximity of Hanoi, Hoa Binh has recently attracted several investment projects, the most remarkable of which were a complex of recreational park, ecotourism and hot spring resort in Kim Boi district and the Dau Rong (Dragon Head) cave system in Cao Phong district.

Additionally, more attractions have been developed in Mai Chau district, a popular destination for foreign visitors, including the Dua (Coconut) island in Da river in Chieng Chau commune, Vit co xanh (Mallard) ecotourism site, a museum on Muong ethnic minority culture in Luong Son district, and the Hoa Binh Hydro power plant, among others.

In 2014, the province welcomed more than two million visitors, including 180,000 international tourists, generating more than 700 billion VND (33.3 million USD).

Vietnam attends Berlin Agriculture Ministers’ Summit

A Vietnamese delegation led by Minister of Agriculture and Rural Development Cao Duc Phat participated in the seventh Berlin Agriculture Ministers’ Summit in Germany on January 17 as part of the Global Forum for Food and Agriculture (GFFA).

In an interview with a Vietnam News Agency reporter in Berlin, Minister Phat said the event focused on the role of agricultural development to ensure food security for people all over the world.

Delegates at the event stressed that taking advantage of new opportunities to develop eco-economy should be combined with sustainable development and food security, he noted.

The event also addressed the future opportunities, potential and challenges that bio-based agriculture brings about, Phat added.

The GFFA is an international forum on central issues of global agriculture and the food sector, which takes place annually during the International Green Week from January 15 to 17. This year it draws the participation of 70 countries, including representatives of Food and Agriculture Organization (FAO) and the World Bank (WB).

Seminar highlights agricultural restructuring

Agricultural restructuring was the main theme of a seminar in Hanoi on January 17 co-organised by the Ministry of Development and Rural Development (MARD) and the Vietnam National University of Agriculture (VNUA).

Delegates at the seminar confidently affirmed the agricultural sector has benefited tremendously from the past 30 years of the renovation process and Vietnam is now reaping the benefits from the long and arduous work.

In 2014, the turnover for the sector was over US$30 billion and it has become an important anchor for the nation’s economy, particularly given the global economic downturn over the past several years.

Prof. Dr. Do Kim Chung from the VNUA said Vietnam’s agricultural restructuring process should now turn to focusing on restructuring public investment and services to develop the sector in accordance with the market requirements.

Delegates agreed that one of the top priorities of agricultural restructuring should be to ensure nutrition and food security for the nation. It needs to be implemented in such a manner to balance the farmers’ demand for food while maintaining competitiveness in the marketplace. Science and Technology Minister Nguyen Quan in turn said agricultural restructuring should now focus on installing the latest and most modern machinery and equipment with an eye to developing higher added value agriculture products.

Minister Quan said the State is urging farmers and producers in the sector to concentrate on developing the national products of rice, fish and mushrooms for both food and medical use.

If as a nation, we accomplish this task Quan said, he was confident Vietnam’s agricultural sector would make breakthroughs, become sustainable and remain a solid anchor for the national economy.

VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR

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