BUSINESS IN BRIEF 21/1

Game developers establish federation

The Vietnam Game Developers Federation (VGDF) was recently established by the Vietnam Digital Communication Association and five local game companies.

The local companies are eMobi Game, Digital Fish, DigiWave, GrepGame and Tofu.

VGDF aims to support and boost sustainable and creative development of the Vietnamese game industry, increasing its competitiveness in the world. It will act as a community of Vietnamese game developers to raise game-related issues such as taxes, preferential policies and issuance management.

The federation will represent the Vietnamese game community in organising and participating in national and international game fairs and conferences. It will also act as a bridge between local game studios and international game publishers.

Globaltrans Air seeks to operate aviation services

Transport Minister Dinh La Thang has received a proposal, requesting him to grant permission to Globaltrans Air SJC, to operate as a general aviation service provider.

The proposal has been submitted by the Civil Aviation Authority of Viet Nam (CAAV), the Dien Dan Doanh Nghiep (Business Forum) newspaper reported.

If approved, Globaltrans Air will become the fourth business to operate in the general aviation sector in the country, apart from the Viet Nam Helicopter Corporation, the Viet Nam Air Service Company (VASCO) and Hai Au Aviation JSC.

General aviation is defined as civil aviation operations other than traditional scheduled air services. It covers a large number of aviation activities, for both commercial and non-commercial purposes, including flying clubs, rescue, leisure and agricultural aviation.

January CPI seen edging down

The Consumer Price Index (CPI) in January will fluctuate slightly and see a minor reduction, the Price Management Department under the Ministry of Finance, forecast.

January is the month before the Tet holiday, so prices in the local market are affected by some factors, including production demand, processing and consumption of goods for the Tet festival, while purchasing power experiences solvency at the end of the year, which pressures prices, the department pointed out.

However, there will be some positive factors supporting the stability of the local market and price increases will be controlled, including a slight decrease in prices of essential goods and materials in the global market, the department said.

In the domestic market, ministries, provinces/cities and enterprises will collaborate in preparation for Tet, and implement price stabilisation and market inspection, in accordance with the Prime Minister's directions.

These enterprises will also launch trade promotions and discount programmes during the last month of the lunar year to reduce the chances of price increases in the market, the department stated.

Additionally, the reduction in petrol and gas prices and transportation fee, will stabilise the prices of sugar and milk for younger children (below six years), as well as steel and medicines, reported chinhphu.vn.

Vietcombank Securities Company also said CPI in January is expected to slip by 0.35 to 0.45 per cent against December, but increase by 0.6 to 0.7 per cent, compared with the same period last year, the Thoi bao Kinh te Viet Nam (Viet Nam Economic Times) newspaper reported.

Purchasing power has not seen strong recovery, while the reduction in petrol and energy prices, will help enterprises cut input costs, resulting in the prices of goods and services dropping.

According to the department, rice and food prices could increase and benefit production and consumption during the Tet festival, but the price appreciation will not be much due to stable supply.

HCM City exports topped $30b last year

HCM City became the first locality to top exports of US$30 billion in a year last year.

According to the Customs Bureau, HCM City's exports were worth $31.35 billion in 2014 and imports were marginally lower.

The export figure was $1.87 billion higher than in 2013 and accounted for 21 per cent of the country's total exports.

The main items shipped from the city were rice, seafood, pepper, vegetables and fruits, textiles and garments, furniture, and wooden products, according to the People's Committee.

Manufactured and processed goods accounted for nearly 70 per cent of the shipments, and forest and farm produce and seafood accounted for 22 per cent.

Last year, 23 of the country's 63 cities and provinces achieved exports of over $1 billion, five more than in 2013.

Bac Ninh remained the second largest exporter at $21.07 billion, though down by nearly $4 billion.

With Samsung shifting its production facilities from Bac Ninh to Thai Nguyen, the latter's exports shot up to $7.83 billion from only $246 million in 2013.

Vinatex to make more materials in bid to reduce use of imports

The Viet Nam National Textile and Garment Group (Vinatex) will invest most of its capital in material production projects in a move to reduce dependence on imports.

Vinatex General Director Le Tien Truong said yesterday that Vinatex is investing in 51 projects, 29 of which are of yarn and knitting production.

This year, Vinatex is set to produce more than 100 million metres of clothing, which is expected to increase to 300 million metres in 2016, when a number of new yarn and knitting production projects will become operational.

Earlier, Vinatex had to import roughly 37 per cent of its materials required for production.

Truong said after equitisation, Vinatex will operate as a joint-stock company from February 1, and the firm will offer shares in 2017.

Viet Nam's textile and garment industry witnessed good growth in exports last year, reaching US$24.5 billion, up nearly 16 per cent compared to 2013.

The textile and garment sector is expected to benefit from several free-trade agreements (FTAs) that are likely to take effect, and it aims to export goods worth $28 billion to $28.5 billion in 2015.

Owing to the advantages accruing from the FTAs, the textile industry could double production in 10 years. However, textile enterprises need to be well-prepared to seize the opportunity, especially to increase the domestic material production.

Besides the 12-nation Trans-Pacific Partnership (TPP) agreement, which includes the United States and Japan, Viet Nam has either signed or in the final stages of negotiations for the FTA with the European Union, South Korea and the Customs Union of Belarus, Kazakhstan and Russia.

Denmark firms see potential in VN

Danish businesses are eager to collaborate with Vietnamese companies in the food, climate and energy sectors, Mogens Jensen, the Danish Minister for Trade and Development Cooperation, said yesterday.

The minister made the statement while speaking at the Danish–Vietnamese Business Seminar in Ha Noi.

A delegation of 40 businessmen from the aforementioned sectors is accompanying the Danish minister and is interested in stepping up cooperation with Vietnamese companies during the working visit that will last from Monday to Thursday this week.

The main purpose of the visit is to build a positive partnership and strong commercial relations between Denmark and Viet Nam. The visit's focus is political consultations, which will be followed by meetings on commercial opportunities.

The bilateral trade between Viet Nam and Denmark in 2014 rose by 6.5 per cent year-on-year from US$445 million of 2013, Tran Tuan Anh, deputy minister of Industry and Trade, pointed out.

Out of that figure, Viet Nam's exports to Denmark touched $303 million, surging by 13 per cent.

Viet Nam's main exports to the European Union (EU) country include garments and textiles, shoes, wood, as well as metal and electric products.

Meanwhile, Denmark is currently the third largest exporting country to Viet Nam among the EU countries (measured per capita).

Currently, more than 130 Danish companies are doing business in the country. Their main focus is the following sectors: furniture and textiles, energy efficiency and environment (clean technology), information, communication and technology (ICT), along with electronics and software, transport and logistics (maritime), food and food safety, and health.

During the 2014 to 2015 period, Denmark disbursed up to $90 million in Official Development Assistance (ODA) to Viet Nam. The main recipients of Danish support to Viet Nam were green growth, climate change, private sector development, along with water and sanitation, culture and governance activities.

Thomas Bustrup, Deputy Director General of the Confederation of Danish Industry, spoke highly of his country's close cooperation with Viet Nam, saying that the impending Viet Nam-EU Free Trade Agreement (FTA) will mark a new milestone in bilateral relations between the two countries.

The export turnover of Denmark to Viet Nam is higher than the average turnover of 15 countries in the EU block. Therefore, Bustrup expressed the hope that the current working visit will go a long way to support trade activities and boost bilateral trade.

Three contracts were also signed during the seminar, including a memorandum of understanding (MoU) on further cooperation in the field of oil and gas processing between Danish Haldor Topsoe and Petro Vietnam (PVN).

A contract for the sale of pig housing equipment between Danish Vissing AgroA/S and Vietnamese Sun Group and another for the sale of breeding pigs between Danish Danbred and Vietnamese Dabaco Group were also signed.

Restructuring programme lags behind schedule at State firms

The restructuring of State-owned enterprises (SOEs) has progressed slowly since it began in 2011, leaving significant tasks to complete by the end of 2015.

According to the Steering Committee for Business Renovation and Development, 143 SOEs were equitised in 2014, well below the set target of 200, and 432 were subjected to restructuring in the 2014-15 period.

The Government raised the total number of SOEs requiring equitisation to 532 in Decision 37/2014/QD-TTg on June 18.

While restructuring was initially rapid, the pace has since slowed dramatically, said Tran Dinh Thien, director of the Vietnam Institute of Economics.

Deputy Head of the Finance Ministry's Department of Entrepreneurial Finance Dang Quyet Tien blamed the slowdown on out-of-date policies and hesitation on the part of ministry leaders and business executives, as well as impacts on Viet Nam's securities and capital markets from the economic crisis in 2011.

However, Finance Minister Dinh Tien Dung emphasised that the programme needed to be implemented differently to make a real breakthrough.

It was necessary to raise awareness of the role of State-run businesses in Viet Nam's socialist-oriented market economy, according to director Thien. He also considered the most critical component of the restructuring process to be enhancing the operational efficiency of the enterprises, which would in turn improve the quality of their products and services and increase their competitiveness.

The Finance Ministry plans to expand SOE restructuring across sectors and business areas as part of efforts to generate a fair playing ground for all businesses.

The ministry has also asked other ministries, localities and businesses to continue reviewing and supplementing the list of enterprises needing restructuring in accordance with the Government's Decision 37/2014/QD-TTg, while developing specific measures to complete restructuring by 2015.

Trade with Brazil surged 36% in 2014

Bilateral trade between Viet Nam and Brazil topped over US$3.17 billion in 2014, a 36 per cent year-on-year increase and exceeded the $3 billion mark for the first time, vietnamplus.vn reported.

The online newspaper quoted data from the Brazilian Ministry of Development, Industry and Foreign Trade as saying that during the period Viet Nam exported $1.58 billion worth of goods to Brazil, up 38.5 per cent year-on-year, with key exports including electronics, footwear, frozen fish fillets, and man-made fibre.

Meanwhile, its imports from the South American country recorded an annual surge of 33.6 per cent to more than $1.6 billion, including agricultural goods, raw material for footwear production and spices.

The surge in Viet Nam-Brazil bilateral trade was recorded despite the fact that Brazil experienced a year-on-year drop of 5.7 per cent to about $454.2 billion in foreign trade last year, the newspaper noted.

The Vietnamese Trade Office in Brazil predicts that bilateral trade between the two nations is likely to touch approximately $4 billion this year and exceed $5 billion in the next two or three years.

The office urged Vietnamese enterprises to immediately take full advantage of opportunities in Brazil, the world's seventh largest economy, with a population of more than 200 million.

According to them, top priority should be given to growing trade promotion and showcasing products at international trade fairs and exhibitions, especially at the Sao Paulo Economic Centre.

This will enable the companies to penetrate further into this lucrative market, establish partnerships and gain access to other markets in South America.

In 2013, two-way trade jumped 42.3 per cent year-on-year to a record $2.33 billion. This enabled Brazil to maintain its position as Viet Nam's largest Latin American trade partner.

Steel giant reports 27% revenue growth

Giant steel maker Hoa Sen Group has reported a 27 per cent jump in revenue in 2013-14.

At its annual shareholders' meeting in HCM City on yesterday, the company reported revenues of VND15 trillion (US$714 million) and after-tax profit of VND410 billion ($19.5 million).

Though the profit figure was just 71 per cent of the previous year's, HSG chairman Le Phuoc Vu called it a "very successful" result because the company had faced many difficulties like falling steel prices, devaluation of some importers' currencies, fake steel products, and anti-dumping issues.

In 2014-15 – which started on October 1 — HSG is targeting the domestic market by strengthening its distribution system, opening 50 more branches across the country.

It targets net profit of VND450 billion on sales of VND16.5 trillion.

Maybank Kim Eng Securities hikes capital

Maybank Kim Eng Securities Limited Company has increased its chartered capital to VND829.1 billion (US$38.84 million) from VND615 billion to fund expansion and improvement of its services.

This is the third capital hike by the Malaysian company, which is fully owned by Maybank, since it came to Viet Nam in April 2008.

Nguyen Hoang Thien, its CEO, said the increase in capital is an important step for the company to achieve its vision of becoming the leading securities company in Viet Nam as well as a regional financial powerhouse.

Minister urges nation to ramp up construction

Minister of Transport Dinh La Thang said yesterday that his sector would strive to complete 115 infrastructure projects and start 54 new projects this year.

Speaking at an online conference with 63 provinces and cities nationwide to review work of 2014 and set targets for 2015, Thang urged all sectors and localities to speed up disbursement and construction for key projects so that 46 projects could be started or completed within the first quarter.

These projects include the upgrading and expansion of the National Highway 1A section that runs from Vung Ang in the central province of Ha Tinh to the Mekong province of Can Tho and the Ho Chi Minh Highway section running through the Tay Nguyen (Central Highlands) area.

Regarding development investment projects, Thang said that the sector would strive to finish all plans and disburse all the assigned capital of over VND86.6 trillion (US$4.1 billion), of which more than VND37.7 trillion (nearly $1.8 billion) come from State bonds while the remainder is from outside the State budget.

"First of all, we will focus on the management of transport fees and vehicle weight to ensure a healthy environment for transport enterprises to operate their business," Thang stressed.

He asked transport enterprises to make plans to serve passengers during Tet and co-operate with other sectors to prevent accidents, stressing that enterprises must prepare enough buses for people to travel before, during and after Tet.

The transport sector will also speed up equitisation for its State-owned companies, of which 14 will be completed this year and 29 others will start the process.

Shipbuilding Corporation speeds up restructuring subsidiaries

The State-run Shipbuilding Industry Corporation (SBIC) is to restructure 152 subsidiaries in 2015, General Director Vu Anh Tuan revealed at a conference setting the year’s tasks on January 16.

The corporation will sell stakes in 28 companies and dissolve 43 others while another 39 will be filed for bankruptcy in the year, he noted.

Last year, SBIC completed the restructuring of 42 subsidiaries, bringing the total number of its restructured firms to 100 so far.

As much as 135 million USD of foreign debt and 16.61 trillion VND (790.95 million USD) of domestic debt was also restructured, and SBIC is still working on it.

The corporation generated nearly 5.72 trillion VND (272.38 million USD) in production value in 2014, about 4.74 trillion VND (225.71 million USD) of which coming from shipbuilding and repair services.

Its total revenue from both core and non-core activities was estimated at 7.64 trillion VND (363.8 million USD) last year, representing 128.96 percent of the set target.

SBIC expects to earn nearly 7.22 trillion VND (343.8 million USD) in 2015, accounting for 94.46 percent of the 2014 figure, with 4.72 trillion VND from shipbuilding and 375 billion VND from repair activities.

State-owned enterprise restructuring is part of the economic restructuring scheme stated in the National Assembly’s Resolution No.10/2011/QH13 on the socio-economic development plan for 2011 to 2015. Public investment and the banking system are also being restructured.

Among 479 SOEs subject to the reorganisation in 2014 and 2015, 143 had been equitised by December 25, 2014, while 14 others were merged, three dissolved, three sold, and three filed for bankruptcy, according to the Steering Committee for Business Renovation and Development.-

Vietnam Food Association pledges to purchase all farmers’ rice

The Vietnam Food Association (VFA) has promised that it will buy all commodity rice from farmers this year regardless of gloomy export prospects.

According to VFA Chairman Nguyen Hung Linh, Vietnam ’s rice export will face more difficulties this year as China , the largest importer of Vietnamese rice that accounts for 30 percent of total exports, tightens imports via border gates and puts quotas on its companies.

He cited stiff competition from major rice exporters such as Thailand , India and Pakistan in terms of both quality and price as a big challenge in 2015.

Thailand , the world’s No. 1 rice exporter, is likely to sell out its huge volume of stockpiled rice this year, putting Vietnamese businesses under the pressure of falling rice prices, he added.

In addition, local companies have been hindered by financial difficulties, poor cultivation planning, and out-dated technology.

Linh predicted that the world rice demand is likely to rise or at least remain the same as 2014 so Vietnamese exporters should actively seek ways to win contracts and set up their firm footholds in foreign markets.

Vietnam earned nearly 2.8 billion USD from exporting more than 6.3 million tonnes of rice last year.

Vietnam-Argentina trade records 1.92 billion USD in 2014

Trade turnover between Vietnam and Argentina was estimated at a record high of 1.92 billion USD in 2014, an increase of 20.6 percent from 2013, according to the Argentine Customs initial statistics.

Vietnam’s exports to Argentina reached 214.2 million USD, up 5 percent while its imports stood at 1.706 billion USD, an increase of 22.6 percent compared to 2013.

Vietnam mainly sold footwear, electronic products, garments, plastic products, mechanical devices, iron and steel while purchased materials used for making animal feed, cereals, leather materials, seafood, and cotton.

Argentina has regarded Vietnam as one of the world’s 15 emerging dynamic economies and chosen the country as a priority export market for 2014 and 2015.

Trade turnover between the two nations continues its rising trend despite Argentina’s foreign trade declined in the first 11 months of 2014.

New law drafted to prop up private sector

The Ministry of Planning and Investment is drafting a new law intended to guarantee breakthrough development in the private sector, said Minister Bui Quang Vinh.

Vinh told reporters in Hanoi on January 13 that he expected the draft of the law on small and medium enterprises (SMEs) to be completed and put on the table for comment this year.

“The purpose of the proposed law is to create the best environment for the private sector in Vietnam to thrive,” Vinh told reporters at the ministry’s office.

According to Vinh, though the enterprise and investment laws passed by the National Assembly last year have helped create a favorable business environment, they are not supportive enough for the struggling private sector.

Vinh said the proposed law would build the most favorable playing field for business start-ups and people to translate their business ideas into reality. Besides, the forthcoming law is expected to include regulations prioritizing the establishment of funds designed to give soft long-term loans to private enterprises.

In addition, the Government will provide mechanisms help young enterprises seek markets, build brands and apply modern technology.

The ministry is running a business incubator and a SME supporting fund but all are still in their infancy, Vinh said. “We want to build such a foundation in the draft law to support private enterprises.”

The private sector is still grappling with challenges as 67,823 enterprises were dissolved or suspended last year, according to the General Statistics Office. Over 230,000 enterprises have been shut down in the past four years.

This is a big concern for Vinh. “I think we haven’t done a good job to develop the private sector,” he said.

“We need to care more about the development of the domestic business community, especially private enterprises. I want to repeat that private firms must be the key driving force for the country’s development.”

He asked, “Why can’t private firms get the same privileged treatment as State-owned enterprises?”

Therefore, according to Vinh, the Government needs to offer more policy incentives for enterprises to help them ride out difficulties and develop, especially SMEs and private companies.

Petroleum giants mull pumping cuts

Vietnam National Oil and Gas Group (PVN) and Vietnam-Russia petroleum joint venture Vietsovpetro are pondering plans to reduce their pumping at a number of oil fields with high production cost to avoid losses if crude oil prices slide further on global markets.

PVN chairman Nguyen Xuan Son said the group is keeping a close eye on the world’s crude oil prices and market developments, and calculating the production cost and business efficiency of crude extractions in every block of the fields.

Currently, the average exploitation cost of PVN is US$30-37 per barrel depending on oil fields.

Previously, when the world’s crude oil prices fell to under US$60 per barrel, PVN had plans to reduce output at several fields with high production cost.

The group now has around four fields with high production cost but low output, Son told a recent media briefing.

Most of the high-cost oil fields previously belonged to foreign investors, who had left after having extracted almost all crude, and PVN had jumped in to pump the remainder, he said.

However, PVN does not plan sharp crude and gas output cuts in 2015. The group plans to extract 16.8 million tons of oil and 9.8 billion cubic meters of gas, year-on-year falls of 500,000 tons and 400 million cubic meters respectively.

In its report on last year’s business performance and the plan for this year, PVN expected revenue of more than VND515 trillion (over US$24 billion) if the global crude oil price is US$60 per barrel, well below the VND745.5 trillion it earned last year, when the export price of crude averaged US$113 per barrel.

The shrinking revenue of PVN will also affect the State budget collections. Given the crude oil price of US$60 per barrel this year, the group could contribute VND104.2 trillion to the State budget, falling by VND74 trillion against last year.

Tu Thanh Nghia, general director of Vietsovpetro, was quoted by Thanh Nien as saying that the joint venture would consider halting operations of several oilrigs and suspend exploration projects if the global crude oil prices keep falling to the levels where it cannot break even.

Firm warns against imposters in home sale

Dai Quang Minh Real Estate Investment Company warned on January 13 that many websites have been found to be imposters as they have claimed themselves as sales agents of the company to sell apartments in HCMC’s District 2.

Some of the fraudulent agents have asked customers to place deposits for units at the Sala urban area which Dai Quang Minh is developing in Thu Thiem New Urban Area.

Dai Quang Minh’s general director Tran Ba Duong said visitors were welcomed in at the gate at 10 Mai Chi Tho Street in District 2 from 8 a.m. to 9 p.m. every day to inspect the Sala project.

The company is completing model apartments, townhouses and villas in the first phase of the project, Duong said. He stressed the company has neither announced housing prices nor sold any products at Sala, and has picked no individuals and organizations as sales agents for the project.

However, many websites have used the name of Dai Quang Minh to put Sala homes on sale and have provided false information about the project and fake hotline numbers. Some websites have even called themselves official distributors of Dai Quang Minh and are ready to take deposits for apartments.

Dai Quang Minh has only posted information about itself and Sala on www.khudothisala.vn and www.dqmcorp.vn. The sites at skyreal.com.vn, khudothisala.org, khudothisalathuthiem.net, salaquan2.com, salathuthiem.org and khudothisala.info illegally use photos and information related to Sala, thus affecting the prestige of Dai Quang Minh, the company said.

Dai Quang Minh is involved in major infrastructure projects in the Thu Thiem New Urban Area, including four main roads, the central square and riverside park, and Thu Thiem 2 Bridge.

The company has four founding shareholders, with Truong Hai Auto Corporation (Thaco) holding a 45% stake, Mai Linh Investment Joint Stock Company 37.5%, and the company’s chairman Tran Dang Khoa and Invencon Investment Advice and International Trading Joint Stock Company the remaining 17.5%.

Vietnam eyes increased cassava production

The Vietnam Cassava Association (VCA) organised a conference in southern Tay Ninh province to seek to reap higher output for cassava, which is viewed as one of the staples helping eliminate hunger in the country.

Jointly hosted by the Tay Ninh provincial People’s Committee, the January 15 event brought together representatives from China and Thailand’s cassava associations, ASEAN business partners, local experts and enterprises across the country in the field.

Mainly shipped to China, Taiwan, the Philippines, and Malaysia, cassava and cassava products are currently the fourth largest hard currency earner of Vietnam’s agriculture sector, following coffee, rice and cashew nut.

Around 3 million tonnes of the products are exported every year, bringing home more than 1.3 billion USD.

According to VCA, Vietnam plants nearly 600,000 hectares of cassava annually at an average yield of 17.63 tonnes per hectare.

Tay Ninh province ranks first in terms of average yield and second in cultivation area.

It has over 50,000 hectares grown with cassava with per-ha yield of 31.7 tonnes.

It is now home to 45 out of 88 cassava starch factories across the country. These plants boast a combined capacity of 750,000 tonnes of starch per year.

Bui Cong Ngoc, a local farmer, said after years of growing low yield crops, his family gave cassava a try and soon discovered its economic efficiency. He has been growing cassava since then and 10 years after, he owns 10 hectares of cassava with an average output of 50 tonnes per hectare.

Chairman of the VCA Nguyen Van Lang expressed his belief that cassava will become one of the staples helping reduce poverty in Vietnam in the long run.

There is an urgent need to apply advanced technology and adopt improved varieties into cultivation in order to boost the crop output and increase competitiveness, he added.

HCM City agricultural restructuring a success story

The shift from cultivating rice to higher-value crops and livestock has significantly increased HCM City's agriculture value in recent years.

The GDP of agriculture, forestry and fisheries increased an average of 5.8 per cent a year between 2011 and 2014, compared to the national rate of about 3 per cent, said Le Thanh Liem, deputy chairman of the municipal People's Committee.

The increase was due to the restructuring of the city's agricultural sector, which began in the 2000s, he said.

In the 1990s, due to rapid urbanisation, GDP of agriculture increased by about 1 per cent a year.

In 2004, the municipal People's Committee approved a programme of developing flowers, ornamental trees and livestock to increase agricultural value.

Under the programme, farmers whose rice fields had a yield of less than two tonnes per ha a rice crop were encouraged to switch to other higher-value crops like safe vegetables, orchids, milk cows and ornamental fish.

The city farmers had an average annual profit of VND325 million (US$15,400) per ha last year, up 15.2 per cent against 2013, according to the municipal People's Committee.

Last year, farmers who grew safe vegetables had an annual profit of VND400 million ($19,000) per ha and those who bred milk cows had an annual profit of VND100 million ($4,700) for raising 20 milk cows.

The city has exported plant seeds for cultivating, vegetables, flowers, ornamental fish and crocodiles to many countries and territories, including the Netherlands, Italy, Dubai, Japan, mainland China, South Korea and Taiwan.

It exported 415 tonnes of plant seeds for cultivating, 1,000 tonnes of vegetables, 11 million ornamental fish, nearly 16,000 crocodiles and 1,500 crocodile skins last year. The seed exports include corn, vegetables, flowers and fruit.

To encourage farmers switching to urban agriculture, the city has decided to provide soft loans for farmers.

Nguyen Thi Tien, 45, who lives in Cu Chi District's An Phu Commune, said in 2008 she received a soft bank loan worth VND90 million ($4,200) to buy four milk cows for breeding.

In 2013, she was provided another soft bank loan worth VND300 million ($14,280) under a city Decision 13 to buy more cows. She now has 30 cows, including 15 milk cows which are producing about 200 litres of milk a day.

"My family earns a profit of about VND48 million ($2,280) a month," she said.

Before 2005, Tien's family made a living by breeding ducks but she had to destroy more than 1,000 ducks of bird flu in 2005.

She began working in a garment company but her income as a sewer was too low to support her family.

The city's Decision 13 issued in 2013 to encourage urban agriculture in 2013-15 helped provided soft loans to more than 6,500 farmers.

Because of Decision 13, many farmers in Can Gio District, one of the city's key districts in developing safe vegetables, flowers and ornamental fish, received loans to shift from planting rice to cultivating shrimp, fish and other crops.

Besides being a large consumer of flowers, HCM City also receives a large quantities of flowers and ornamental fish from other provinces and cities nationwide, and exports flowers and ornamental fish as well.

While the city's safe vegetables, fresh milk and black tiger shrimp have had stable domestic outlets, local outlets for the city's orchids have not been stable because many ornamental creature shops are small and owned by individuals.

In 2010, the HCM City Ornamental Creature Association asked the municipal People's Committee to develop a trade and services network for ornamental plants and fish.

In the initial phase, the city would set up three ornamental creature centres in suitable areas and an ornamental creature retail system in districts where there is a large population, according to the association.

The municipal People's Committee has recently assigned Saigon Trading Group (SATRA) to work with the Centre for the Promotion of Imports from developing countries (an agency of the Netherlands Ministry of Foreign Affairs), and FloraHolland, which specialises in organising flower exchange floors in the Netherlands, to set up a transaction floor for flowers and ornamental fish at the Binh Dien wholesale agriculture market in District 8.

The city has had about 2,130ha of flowers and ornamental trees last year, up 4.9 per cent against 2013.

HCM City reviews semi-conductor growth

The head of the HCM City Department of Information and Communications has hailed the city's semi-conductor industry development programme for its accomplishments since being begun two years ago.

Speaking at a conference held to mark its second anniversary in HCM City yesterday, Le Thai Hy said it has enabled major achievements in training, chip design, developing integrated circuits (ICs) and establishing relations with international organisations.

The programme, entrusted to the Viet Nam National University-HCM City's Integrated Circuit Design Research and Education Centre (ICDREC), comprises of seven components including human resource training; incubating IC businesses; and building and running a design centre and a chip manufacturing plant.

Director of ICDREC, Ngo Duc Hoang, said products based on Vietnamese chips that have been commercialised include SG-8V1 and KIT DE-8V1 chips, container electric locks, itinerary surveillance devices, electronic meters, DCM (data collection modems), and RFID (radio frequency identification) management systems.

The conference also mapped out plans for the immediate future, especially for the development of programmes related to chip-based products and Lab-to-Fab and development of micro-electro-mechanical systems.

"These projects aim to create an ‘ecosystem' for the HCM City semi-conductor industry and strengthen the city's efforts to develop the industry," Hoang said.

According to the ICDREC, over 20 billion chips were consumed in Viet Nam every year.

Hy said the programme, to run until 2020, was ratified by the city People's Committee in 2012.

The conference was held by the HCM City Steering Committee for Semi-conductor Industry Development and the Department of Information and Telecommunications.

Forestry augments household earnings

Engaging in forestry has helped hundreds of thousands of poor farmer families in mountainous areas boos their annual incomes by 25 per cent, an official says.

"Each household could earn an average of VND15 -17 million (US$720-810) a year from selling forestry products harvested from the land lent to them by the government or the State-owned forestry corporations, " Pham Van Hanh, an official with the Foresty Production Management Department under the Viet Nam Administration of Forestry, said on Thursday.

He was speaking at a four-day meeting on successful forestry business models held in Ha Noi.

The meeting, organised by the Viet Nam Farmers' Association Central Committee (VNFACC), has attracted the participation of 17 member countries of the Forest Connect Programme including Canada, Finland and Brazil.

According to a report on national land usage prepared by the General Department of Land Administration in 2010, forest land allotted to households and individuals totalled 4.2 million hectares, accounting for about 35.5 per cent of the nation's forest coverage.

The policy of lending forest land to promote household business in recent years played a major role in increasing the forestry sector's productivity and contributed to economic growth, Hanh said.

Statistics compiled by the Ministry of Agriculture and Rural Development show that the output of plantations doubled from 6 cu m in 2009 to 16 cu m last year while wood and forestry product exports reached US$6.3 billion, an increase of 14 per cent over 2013.

"Forestry household has become an effective means to fight poverty by establishing a closer connection between farmers and forests; and, at the same time, promoting environmental protection and climate change adaptation," said Vu Le Y Voan, Deputy Head of the VNFACC's International Co-operation Department.

Though forestry households had proven successful, farmers still faced many hurdles, the meeting heard.

Their small-scale production and lack of skills in negotiating product prices with dealers prevented them from earning higher profits.

And though productivity in the forestry sector had improved, it was considerably lower than that of neighbouring countries, Hanh said.

The country's productivity was about half of the Phillipines, 40 percent of China and merely 20 per cent of European Union members.

"Many farmers are not able to wait for the trees to reach their full growth in ten years. In order to support their families, they chose to harvest when the trees are just five or six years old," Hanh explained.

"Consequently, the wood quality is not high, leading to much lower prices, and the farmers end up hurting themselves," he said.

The Forest Connect Programme, which started in 2007, has supported enterprises in15 countries. It has also established online links between more than 1,000 individuals and organisations in 94 countries.

The programme is jointly organised by the International Institute for Environment and Development (IIED), the Forest and Farm Facility under the Food and Agriculture Organisation (FAO) and the Centre for People and Forests (RECOFTC).

Banks ramp up capital in competitive push

Many banks are trying to boost their charter capital to consolidate their competitiveness, reported Dau tu (Viet Nam Investment Review).

Nam A Bank General Director Tran Ngo Phuc Vu had said earlier this month that the State Bank of Viet Nam (SBV) permitted his bank to ramp up its charter capital from VND3 trillion to VND4 trillion (from US$142.86 million to $190.48 million).

Vu added that the bank would have implemented the capital increase during the fourth quarter of last year, in accordance with a plan adopted at its 2014 shareholder meeting, but it had just received official permission for dealing with procedures and waiting for licences from relevant agencies "took time."

He further said the bank would issue shares to raise capital and that this process was expected to be completed in the first quarter of this year. It would also list shares on the stock market to enhance its financial capacity to catch up with market developments.

Sai Gon Commercial Bank's (SCB's) bid to raise equity by VND2 trillion ($95.24 million) to more than VND14.29 trillion ($680.48 million) is also underway, after the SBV approved the scheme late last year. The bank will increase capital by offering investors 200 million shares through put-through transactions.

SCB General Director Vo Tan Hoang Van said the bank was finalising a plan that would help it improve its financial capacity in the context of its restructuring process.

Of the total amount to be added, the bank would use VND250 billion for investments and capital contribution and VND255 billion for information technology upgrades. It would also spend VND45 billion on office upgrades, and reserve VND1.45 trillion as additional business capital.

The Orient Commercial Bank has also issued about 31.3 million additional shares, with funds extracted from undistributed profits and equity supplement reserves, to begin a capital increase plan approved by the SBV late last year.

This bank will raise its charter capital from VND3.23 trillion to VND4 trillion (from $153.81 million to $190.48 million), as per a decision taken at its shareholder meeting in 2014.

However, many other banks are yet to implement their capital increase plans, due to obstacles resulting from stock declines and investors' shrinking interest in the face of an on-going banking restructuring process. These include the VietABank, SaigonBank, BaoViet Bank and DongA Bank.

In April 2014, the DongA Bank had to cancel a plan to raise capital from VND5 trillion to VND6 trillion (from $238.10 million to $285.71 million) as investors had failed to contribute as much money as they had committed before.

Business Development Institute Director Le Xuan Nghia said continuing banking reforms would narrow the spectrum of banks operating in the banking system, where only institutions that are healthy enough and have a solid financial capacity will be able to exist.

Banks raising capital are among measures that would help them ensure competitiveness in the coming months in this era of "fierce competition," he said, noting that it was not easy for small banks to do so, considering that market conditions remain tough.

Many banks would have to choose mergers and acquisitions to survive, he added.

HCM City to host Viet Nam-India Business Forum

The industry and trade ministry and the Indian Embassy in Viet Nam will jointly organise the Viet Nam-India Business Forum in HCM City's Gem Centre on January 21.

The forum will attract 25 Indian businesses from different sectors, including garment and textiles, leather and shoes, machinery and pharmacy, besides banking.

The forum is part of the framework of the second conference of the Viet Nam-India Commerce Sub-committee.

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

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