BUSINESS IN BRIEF 12/6

Vietnam’s rubber exports rise in volume

Vietnam’s natural rubber exports in the first five months of this year reached a volume of 330,000 tonnes worth 475 million USD, according to the Ministry of Agriculture and Rural Development.

The figure increased 30.1 percent in volume and decreased 2.9 percent in value compared to the same period last year.

In May alone, Vietnam exported 78,000 tonnes of rubber worth about 114 million USD.

In the first four months, China continued to be the largest importer of Vietnam’s rubber, accounting for 44.39 percent of the total export volume, followed by Malaysia and India.

Vietnam imported about 160,000 tonnes of rubber worth 273 million USD in the first five months, up 29.6 percent in volume and 9.8 percent in value compared to the same period of 2014.

In 2014, Vietnam exported more than 1 million tonnes of natural rubber, valued at 1.78 billion USD, down 0.7 percent in volume and 28.4 percent in value from 2013 due primarily to plunging prices.

The country maintained the third and fourth positions in the world in terms of natural rubber output and export value, respectively.-

NA deputies make recommendations on socio-economic development

National Assembly (NA) deputies made a number of proposals regarding measures for socio-economic development at the 13th NA’s ninth session on June 8 under the chair of Vice Chairwoman Nguyen Thi Kim Ngan.

Many agreed with the Government’s supplementary report on socio-economic development in 2014 and the implementation of socio-economic development tasks in the first months of 2015.

GDP growth saw obvious recovery in the first quarter, reaching 6.03 percent, the highest rate compared with the same period of the previous years, while inflation has been kept at a low level. Bilateral and multilateral diplomacy has been promoted, and the successful organisation of the 132nd Inter-Parliamentary Union Assembly has contributed importantly to boosting parliamentary diplomacy and increasing Vietnam’s position and prestige in the international arena.

Deputy Huynh Nghia from central Da Nang city attributed the positive development to joint efforts of the Government, ministries, sectors, the business community and people and the supervision of the NA and all-level People’s Councils.

Central Nghe An province’s Phan Van Quy affirmed that the business community has made great contributions to the country’s development over the past years, however, it is not enough.

He suggested fostering administrative reform, building an investment environment with healthy competition, and designing mechanisms suitable for each business type, adding that it is important that the State should help enterprises access information about trade agreements and markets.

Meanwhile, Deputy Le Thi Yen from northern Phu Tho province urged further boosting comprehensive reform of market economy institutions, and bettering policies to develop support industries.

She also emphasised the need to continue with the restructuring of credit organisations with bad performance, and speed up bad debt settlement in order to bring the rate of bad debts to below 3 percent by the end of this year.

Regarding difficulties in agricultural production, Deputy Nguyen Cao Phuc of central Quang Ngai province proposed accelerating agricultural restructuring with the focus on production planning.

Deputy Tran Duong Tuan from the Mekong Delta province of Ben Tre said that agricultural restructuring is not merely changing production modes, but it is more important to diversify products and increasing the quality of products to meet market demands.

Southern Ba Ria-Vung Tau province’s Le Thi Cong stressed the importance of thorough study and better implementation of policies involving agriculture and rural development.

Several deputies suggested the Government carry out policies and measures to boost inter-regional connectivity so as to bring into full play each region’s advantages, and ensure the efficient utilisation of invested infrastructure facilities like highways and seaports.

Quang Ngai promotes investment potential

A conference was held on June 7 in central Quang Ngai province to introduce the region’s brimming potential to investors.

The event was co-organised by the province and the Ministry of Natural Resources and Environment.

Addressing the event, Vice Chairman of the provincial People’s Committee, Pham Nhu So, highlighted the local comprehensive road system as an advantage for socio-economic development.

The Dung Quat Economic Zone, covering an area of 45,000 hectares, is one of the five key national marine economic zones, So said.

Quang Ngai is home to nearly 20 industrial zones, clusters and trade villages with developed infrastructure facilities, according to So.

It also boasts the Dung Quat seaport, which is capable of handling 100,000 DWT ships; and the Vietnam-Singapore (VSIP) Quang Ngai Industrial-Urban-Service Complex with numerous incentives for investors, he added.

During the event, an agreement was signed between the Vietnam Chamber of Commerce and Industry (VCCI) and the Quang Ngai People’s Committee to strengthen support for local businesses.

Under the agreement, the two sides will facilitate access to financial sources for small- and medium-size enterprises, and improve the local investment climate to raise business competitiveness.

Trade promotion campaigns, staff training and domestic and international connections are also given priority among their joint efforts.

The same day, a number of investment licences were granted to key local projects, including the first phase of the VSIP Quang Ngai urban-service zone, with total investment of 1,200 billion VND (56 million USD); the Muong Thanh five star hotel and trade centre, 450 billion VND (21 million USD); and the Muong Thanh Ly Son hotel project, 250 billion VND (11.7 million USD), among others.

Quang Ngai, by the second quarter this year, had housed 300 domestic and foreign projects with total registered capital of 144 trillion VND (6.7 billion USD). Of these, 36 are foreign investment projects, worth more than 4 billion USD.

The province’s GDP recorded an increase of 2.9 percent from 2013, with the average per capita income reaching 2,215 USD.

The locality also contributed more than 26 trillion VND (1.2 billion USD) to the state budget in 2014.

Binh Dinh works to develop tourism

Linking sea and island tourism is a key priority in the central coastal province of Binh Dinh towards realising the goal of welcoming 8-10 million travellers in 2020, said Chairman of the provincial People’s Committee Ho Quoc Dung.

In a bid to promote tourism in the locality, the province will focus on building its tourism trademark while introducing local potential far and wide. It will also open its doors for investors to develop technical infrastructure and work to tackle barriers in land clearance.

Together with support from the central Government, trillions of VND have been spent on land clearance, resettlement and infrastructure such as the Quy Nhon- Nhon Hoi Bridge, as well as other traffic systems in the coastal and mountainous areas, facilitating the implementation of tourism projects in the locality. Developing infrastructure will lure more investment and enlarge the tourism-service sector.

Investors with insufficient capital and experience will have their investment certificates revoked to make room for other potential investors. The province also recommended relevant ministries and agencies to ask for Government approval for additional golf course projects in the Nhon Hoi Economic Zone, which is slated to become a major tourism centre.

According to the Prime Minister’s Decision 142/2005 on the general planning of Nhon Hoi Economic Zone by 2020, space for coastal tourism development has been adjusted to 2,570 hectares from 1,585 hectares to include the Vinpearl Hai Giang and Nhon Hoi- Cat Tien coastal tourism sites and Thi Nai lagoon eco-tourism site.

In recent years, Binh Dinh has developed infrastructure for various kinds of tourism, from cruises, resorts to sports and exploration tours. To date, the province has drawn 11 coastal tourism-service projects with total registered capital of 17.9 trillion VND (833 million USD).

Over 1.7 million travellers visited the province in the first five months of the year. Of the figure, 85,600 were foreigners, surging 22 percent from the same period in 2014.

Binh Dinh is also working to submit a request for UNESCO-recognition of its traditional martial arts as part of the intangible cultural heritage of humanity.

The local Bai choi singing, unique to the coastal central region and often seen at local spring festivals, resembling a game using playing cards and village huts, has also received attention. Restoration efforts have additionally focused on traditional festivals and trade villages as well as historical and cultural relic sites.

Binh Dinh has carried out support policies for human resources training, intensified domestic and international cooperation and accelerated communications to raise local awareness of tourism.

Fertiliser plants set for revamp

PetroVietnam Fertiliser and Chemicals Corporation (PVFCCo) on June 7 signed the EPC Contract with an international contractor consortium to revamp the Phu My NH3 and NPK complex.

The project, covering an area of over 15 hectares on the land housing Phu My Fertiliser Plant at Phu My 1 Industrial Zone in southern Ba Ria-Vung Tau province, consists of two parts: revamping the NH3 Unit and build Phu My NPK Plant.

The complex project has a total investment capital of nearly 5 trillion VND, some 37 million USD, 70 percent of which will be financed by bank loans and another 30 percent by the owner's equity.

After completion, the upgrading of the NH3 Unit will increase the current ammonia output at Phu My Fertilizer Plant by 90,000 tonnes per year, from the current 450,000 tonnes per year to 540,000 tonnes. Plans call for adopting Denmark's Haldor Topsoe A/S technology.

The EPC (Engineering, Procurement, Construction and Commissioning) contractors include Italy's Technip Group, previously the contractor for Phu My Fertiliser Plant, and PetroVietnam Technical Services Corporation (PTSC). The products from the plant will be used as direct feedstock for Phu My NPK Plant, as well as to supply the domestic market, which still suffers from a shortage of NH3.

Meanwhile, the projected Phu My NPK Plant, with a manufacturing capacity of 250,000 tonnes per year, will put in place Spain's Incro SA chemical technology, the most advanced technology in the world, to manufacture high-quality NPK fertiliser, which will guarantee all necessary nutrients for crops at different growth periods and under different soil conditions.

The contractor consortium for the complex is Germany's ThyssenKrupp Industrial Solutions and PetroVietnam Technical Services Corporation.

According to the Ministry of Industry and Trade, demand for NPK fertiliser increased from 2.1 million tonnes in 2005 to some 4 million tonnes in 2014, with an annual average growth of 7 percent. Yet, domestic production can currently only meet 5 to 10 percent of high quality NPK.

"Total capital investment of the complex project is not large, in comparison with other oil and gas projects, but it has great importance to the national economy that helps ensure the country's agricultural sector," PetroVietnam's chairman, Nguyen Xuan Son, said during the signing ceremony.

Son noted that Vietnam was still importing around 300,000 tonnes of high-quality NPK fertiliser per year, and the output from Phu My NPK Plant were expected to replace most of the currently imported NPK fertiliser.

The complex will be brought into operation during the second quarter of 2017.

Work begins on a 25-million USD measurement instrument company

Japanese Aichi Tokei Denki Co., Ltd, has begun the construction of a 25 million USD plant making measuring instruments at Trang Due Industrial Park in the northern port city of Hai Phong.

The plant, the second project invested by the company in Trang Due IP, will specialise in manufacturing and assembling electronic gas and water meters.

The plant will become operational in June, 2016 and is expected to provide jobs for more than 200 local labourers.

Aichi Tokei Denki is providing electromagnetic products, sensors and central control systems used for management and observation in large-scale complexes and building. The company also develops measuring equipment to monitor water supplies, sewerage systems as well as agricultural and industrial water treatment facilities.

The investment in Vietnam is part of the company’s strategy to expand its global share.

PetroVietnam overcomes price decline to post positive results

Despite sharp declines in crude oil prices, the Viet Nam Oil and Gas Group (PetroVietnam) achieved satisfactory production and business results during the first five months of this year.

This was announced by PetroVietnam Deputy General Director Do Chi Thanh during a meeting at the Ministry of Industry and Trade last week.

Thanh also noted that some 7.6 million tonnes of crude oil was exploited during the five months, representing 108 per cent of the firm's target for the period.

The volume of gas exploited was 4.5 billion cubic metres, or 104 per cent of the targeted figure, and the yield of oil products rolled out was 12.1 million tonnes, or 107 per cent of the planned volume.

The company recorded a total turnover of VND122 trillion (US$5.81 billion), or 83 per cent of the five-month quota, and earned an after-tax profit of VND17.1 trillion ($814.28 million), equivalent to 87 per cent of the plan.

Thanh said that in the face of declining oil prices, the company had tried to cut costs to achieve these results.

In May, crude oil prices averaged $67 per barrel, rising by $5 from the April level. However, the average price during the five months was $60 per barrel, down 46.7 per cent over the same period last year.

Techcom Securities to issue millions of bonds

Techcom Securities Company Limited announced it has arranged the issuance of VND2 trillion (US$91.74 million) corporate bonds for Vingroup in June.

The Ha Noi-based securities company said its investors included commercial banks and securities companies, adding that the bonds were non-convertible and unsecured and were backed by a guarantee of Royal City Real Estate Development and Investment Joint Stock Company – a subsidiary of Vingroup.

Techcom Securities noted that the bond's annual coupon payment will be made on a fixed rate for the first coupon payment and on a floating rate for the remaining coupon payment.

The two year bonds, each with a par value of VND100,000 ($4.5), were issued on June 2, 2015, and will be listed on the HCM City Stock Exchange within two to three months and, upon listing, will be settled via Viet Nam Securities Depository. —

IFC launches EDGE green building certification system in Vietnam

Vietnam became the first market in East Asia IFC has introduced EDGE (Excellence in Design for Greater Efficiencies), which empowers developers to reduce their buildings’ energy and water consumption by 20 per cent while lowering greenhouse-gas emissions.

The launch took place in Ho Chi Minh City last week.

IFC, a member of the World Bank Group, is partnering with SGS Vietnam Limited to offer EDGE, a programme that proves the business case for building green in emerging markets.

EDGE offers a free software that allows designers to choose technical solutions while showing the extra costs to build green and the payback period. Better design reduces energy and water use, which in turn lowers the monthly utility bills for owners and tenants.

“We encourage investors, developers, and practitioners to construct more environmentally friendly buildings that reduce energy consumption and mitigate climate change,” said Le Hoa Binh, deputy director of the Ho Chi Minh City Construction Authority.

“EDGE is an innovative, voluntary building-certification system that will help us improve the environment for our people,” Binh added.

Buildings account for more than 30 per cent of the total energy use in fast-growing economies like Vietnam, hence improving energy efficiency in new buildings is critical.

“Precise and strategic changes can make a big difference in improving the efficiency of buildings, which make up about a third of Vietnam’s total energy consumption,” said Vivek Pathak, IFC regional director for East Asia and the Pacific. “Resource efficiency will significantly reduce the operating costs of buildings and put Vietnam on a low-carbon economic growth path.”

Vietnam is a focus of IFC’s EDGE programme along with a few other priority countries, which include Costa Rica, India, Indonesia, and South Africa.

Speaking at the conference, Prashant Kapoor, IFC’s Principal Green Building specialist emphasised the need to adopt green building tools like EDGE in Vietnam. “The more and more developers start to use easy and affordable green ideas, market will change fundamentally.”

SGS Vietnam, a subsidiary of SGS S.A., a leading inspection, testing, and certification company headquartered in Switzerland, will serve as a third-party certifier of EDGE in Vietnam.

Over the next six years, SGS Vietnam expects to award EDGE certifications to 20 per cent of new construction projects in the country, equivalent to about 70,000 housing units. This level of penetration will help cut 19,000 metric tonnes of greenhouse-gas emissions per year, avoid 43,500 megawatt-hours of energy use, and save $8 million per year by 2021.

“We are seeing strong interest from investors and developers in fulfilling the increasing demand for eco-friendly and resource-efficient buildings in Vietnam,” said Steven Du, managing director at SGS Vietnam.

“As EDGE offers the most cost-efficient ways of bringing green features into building design, we believe it will be effective for a wide range of properties, including office, residential, and commercial buildings in Vietnam,” Du noted.

Developer Nam Long Investment Corp. is among the first to receive an EDGE certification in Vietnam for its Bridge View Apartments. The design will cut energy use by 20 per cent, water use by 22 per cent, and construction materials by 27 per cent, but adds only 2 per cent to the construction costs.

Three developers were awarded with EDGE certification at the event. They are the National Housing Organisation (NHO) for its First Home Premium apartment building in Binh Duong province; Novaland Group for Orchard Garden Apartments in Ho Chi Minh City, and The Ascent REIC Ltd for The Ascent – Thao Dien Condominiums in Ho Chi Minh City.

PetroVietnam signed EPC contract to expand Phu My NH3

PetroVietnam Fertilizer and Chemicals Corporation, the producer and trader of Phu My fertilisers together with the contractor consortium of Technip Group, ThyssenKrupp Industrial Solutions and Petrovietnam Technical Services Corporation (PTSC) last weekend signed the Engineering, Procurement, Construction and Commissioning (EPC) contract for Phu My NH3 (revamping) – NPK Complex.

The PetroVietnam Fertiliser and Chemicals Corporation signed in Ha Noi yesterday an EPC Contract to revamp the Phu My NH3 and NPK complex.

According to Cao Hoai Duong, PetroVietnam Fertilizer and Chemicals Corporation (PVFCCo) president and CEO, the fact that PVFCCo selects the world’s most advanced technologies, the equipment of European origins and the contractor consortium including the reputable group and companies experienced in large global projects will ensure timely and safe project completion with high-quality products of international standard.

“After 26 months of implementation, the project is expected to be brought into operation in the second quarter of 2017, raising PVFCCo to a new height of development,” said Duong.

He added that in addition, this project was a typical demonstration for the use of internal resources within the oil and gas industry to support the agriculture of our country with high quality fertilizers.

Phu My NH3 (revamping) - NPK Complex covers an area of over 15 hectares, on the land of Phu My Fertilizer Plant at Phu My 1 Industrial Zone, Ba Ria - Vung Tau Province.

The total invested capital of this complex project is nearly VND5,000 billion ($237 million), with 70 per cent financed by bank loan and 30 per cent by the owner’s equity.

It will consist of two parts: NH3 Unit (revamping) and Phu My NPK Plant.

The NH3 Unit (revamping) will increase the current NH3 output at Phu My Fertilizer Plant to 540,000 tonnes per year from the current 450,000 tonnes per year.

It will use the technology from Haldor Topsoe A/S (Denmark).

The EPC contractor consortium consists of Technip Group (previously also the contractor for Phu My Fertilizer Plant) and Petrovietnam Technical Services Corporation (PTSC).

According to PetroVietnam Fertilizer and Chemicals Corporation, a part of NH3 produced will be used as direct feedstock for Phu My NPK Plant, the other part will satisfy the domestic demand for NH3, which is still in great shortage.

The projected Phu My NPK Plant with capacity of 250,000 tonnes per year, is the first in Vietnam to apply the chemical technology of Incro SA (Spain), the most advanced technology in the world to produce high-quality NPK fertilizer with guaranteed content of all necessary elements that are suitable to crops at different growth periods and under different soil conditions.

The contractor consortium is ThyssenKrupp Industrial Solutions and Petrovietnam Technical Services Corporation (PTSC).

Vietnam demands around four million tonnes of NPK every year, of which high quality NPK fertilizer can only meet from 5 to 10 per cent.

The products of Phu My NPK Plant will replace most of currently imported NPK.

Sun Group to sell Hoa Xuan land plots

Real estate developer Sun Group will launch the sale of 500 land plots in the Hoa Xuan urban ecological zone in the central city of Da Nang on June 18.

The Hoa  Xuan project is expected to be one of the most worthwhile living spaces in central Viet Nam, the group's representative said.

The group said the luxurious and modern zone has a beautiful location and favorable feng shui as it is located at the confluence of the Rivers Han, Co Co and Cam Le, and is also close to Ngu Hanh Son Mountain.

Just 2km from Da Nang International Airport, the urban ecological zone is located adjacent to the 2-9 and Cach Mang Thang 8 main roads and next to a Metro supermarket. It is also just 2km away from My Khe beach, 1km from a 600-bed hospital and 700m from Chi Lang Stadium.

Sun Group said the 450ha Hoa Xuan eco-urban project will have five-star green and ecological architecture with fully functional townhouses, ecological villas, marina and amusement park, besides commercial centres, hospital, international school and an international-standard, 36ha mud bath and spa zone.

Sun Group said each plot costs upwards of VND437 million (US$20,045), and offered seven per cent discount to buyers who completed their purchase before June 30.

The group has also organised a lucky draw, with attractive prizes amounting to several billion dong for customers, on June 18. The prizes include a Camry 2.5G car worth VND1.3 billion ($59,633),  two plots of 100sq.m worth VND500 million ($22,935) each, three land-purchasing vouchers of VND200 million ($9,174) each, and 20 SH Moze motorbikes worth 50 million ($2,293) each, besides 50 vouchers, worth VND3 million ($137) each, for stay at the French Village

Experts urge Vietnam to invest more in renewable energy

Foreign experts have called on Vietnam to invest more in renewable energy and draw up proper policies to fuel economic growth of 6% towards 2020 and meet the demand of foreign companies to relocate manufacturing facilities to Vietnam.

Speaking at a seminar held in HCMC last week to release the Southeast Asia Economic Insight report for quarter two of 2015, Scott Corfe, economic advisor at the Institute of Chartered Accountants in England and Wales (ICAEW), said the world is working towards green growth and Vietnam should follow this trend.

According to Corfe, countries need to restructure their economies with a gradual shift from manufacturing to services, develop manufacturing industries using less energy, invest more in renewable energy and work out viable plans to protect the environment.

While the first two targets require certain development stages of the economy, Vietnam has an opportunity to realize the third target as the country holds much potential for renewable energy. However, the renewable energy output in Vietnam remains modest while the country still opts for development of coal-fueled thermal power plants due to low costs.

Christoph Schill from the Green Growth Sector Committee at the European Chamber of Commerce in Vietnam (EuroCham) shared Corfe’s view, saying thermal power plants are still preferred in Vietnam’s power development plans. In particular, under the Power Master Plan VII, coal-fired thermal power facilities are designed to generate around 36,000 MW, accounting for 46.8% of total electricity output in 2020. The capacity of thermal power will rise to 75,000 MW in 2030, or 56.4% of the total.

The bigger share of thermal power is unreasonable as this will place bigger impact on the environment. A study of the World Bank showed Vietnam is capable of producing wind power of around 513,000 MW while the wind power capacity is a mere 48.2 MW now and is expected to increase to 1,000 MW in 2020.

To ease environmental pollution, Vietnam needs to seriously consider more investments in renewable energy.

Schill said Vietnam has huge potential for solar and wind energy development and foreign investors have technologies and capital. However, they prefer renewable energy projects in other Southeast Asia countries.

Schill explained the buying price of wind power in Vietnam is only 7.8 U.S. cents per kWh, which is much lower than 19 U.S. cents in Thailand and 21.8 cents in the Philippines.

Besides, investors are required to sell electricity to Vietnam Electricity Group (EVN) and it is time-consuming for them to negotiate power purchase deals with the country’s sole electricity buyer.

According to experts, Vietnam will find it difficult to woo more investors to renewable energy projects until the nation adjusts up the buying price of renewable energy to the same levels of regional countries and EVN’s electricity purchase negotiation process is transparent.

Study shows investors care about costs, human resources in Vietnam

* Foreign companies rank the availability of skilled labor, costs, domestic market conditions and policies of the Government more important than energy when they decide to invest in Vietnam, according to a recent study released by EuroCham’s the Green Growth Sector Committee and the International Institute for Sustainable Development (IISD).

The study indicated that foreign companies considered energy as the least important among the ten factors for their decisions to invest in Vietnam.

According to the committee, a majority proportion of respondents said they could bear nominal power tariff increases of 15% or more a year before planning future investments and more than 65% could cope with price rises of over 10% per year.

Companies are concerned more about stable electricity supply than prices. Up to 65% of respondents said they are not satisfied with power supply and two-thirds have invested in back-up power sources. Some 73% said unstable power supply rather than power price increases had affected the country’s competitiveness in attracting investors over time.

The committee said Vietnam should ensure stable power supply and long-term plans for green power sources. However, this can only be achieved in case of higher power buying prices to attract more private investments and improve a legal framework for investments in this sector.

The study was conducted with the foreign business community and 150 companies in collaboration with organizations in Vietnam.

Business forum discusses ways to improve competitiveness

The mid-term Vietnam Business Forum 2015 will focus on solutions and measures to grow private enterprises and make them be more competitive and be big enough to join the global supply chain.

Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry and Virginia B. Foote, Chairwoman of the United States-Vietnam Commerce Council, told reporters at the press conference held in Hanoi on June 8.

They mentioned a number of issues concerning the agenda of the forum on improving the competitive capacity of enterprises to integrate internationally.

Prime Minister Nguyen Tan Dung is expected to attend the event, which will open on June 9.

According to Loc, the present problem of Vietnamese economy is the capability of the private economy, which has failed to grow over the past years.

Although the private economy’s role and contribution to the economy is growing and reached 49 percent last year but 33 percent comes from the household economy, Loc said, emphasising the need to be addressed.

On her part, Virginia Foote said that the forum would provide an opportunity for enterprises to voice their difficulties and obstacles in the present business environment in Vietnam.

Enterprises could submit recommendations and suggestions to improve the relationship between the Government, State agencies and enterprises or among enterprises in order to raise competitiveness for not only the business community but also the whole economy, Foote said.

Tourism to become spearhead sector of South Central Coast

A recently unveiled plan has established tourism as an important industry in the South Central Coast of Vietnam by 2020 and a spearhead sector of this region by 2030 which will help to assert the country’s sea and island sovereignty.

The region consists of Da Nang city and the seven provinces of Quang Nam, Quang Ngai, Binh Dinh, Phu Yen, Khanh Hoa, Ninh Thuan and Binh Thuan.

Under the plan, issued by the Vietnam National Administration of Tourism, the South Central Coast will attract about 14 million visitors, including 4.5 million foreigners, by 2020. The figures are expected to reach 25 million and 7.5 million by 2030.

The Institute for Tourism Development Research said to fully tap into local advantages, the regional localities need to develop marine, cultural and ecological tourism simultaneously. It added that Da Nang, Nha Trang (of Khanh Hoa province) and Phan Thiet (of Binh Thuan) should be developed into modern tourism cities.

To realise the plan, the localities should accelerate traffic infrastructure upgrades, especially on inter-provincial roads and tourism ports in Da Nang, Nha Trang and Binh Dinh’s Quy Nhon city.

While international airports like Da Nang and Cam Ranh need to be expanded, more air routes should be opened to connect the region with other localities nationwide as well as global destinations, the institute said.

It also suggested the South Central Coast offer more tours to faraway islands, support traditional craft activities, and develop specific products for each village to make the region more appealing to holiday makers.

The South Central Coast boasts prominent advantages in marine tourism, biodiversity and culture. It was home to the ancient Champa civilization, and the world cultural heritage site of My Son Sanctuary highlights this rich history. In the past, the region was also an intersection of the Dong Son civilisation to the north and the Sa Huynh civilisation to the south of Vietnam.

Tax revenues up despite hit to crude oil revenues

The country's tax revenues in the first five months of this year continued to grow despite reduction in tax collection from crude oil, according to the General Department of Taxation.

During this period, domestic tax collections were estimated to total VND283.2 trillion (US$13 billion), representing an increase of 16.3 per cent over the same period last year, including VND42.4 trillion ($1.94 billion) in May.

Taxes from crude oil, however, dropped by 34 per cent against the same period to VND30.3 trillion ($1.39 billion), reaching only 32.6 per cent of the target for the full year.

Meanwhile, in the first five months, tax collection from other export and import activities gained a year-on-year surge of 6.5 per cent to VND66 trillion ($3.03 billion).

According to the Ministry of Finance, the domestic economy has reacted positively recently, but the economy is still faced with difficulties that could affect tax collections.

Therefore, the ministry would track the economic development in the near future to manage tax collection activities for reaching the yearly target.

The ministry would also implement solutions to increase tax revenues and prevent individuals and corporates from evading taxes.

The General Department of Taxation is also required in June to implement measures to collect more tax revenues and promote inspection of tax payment and after customs clearance.

The department will implement solutions against pricing transfers and tax arrears.

The tax revenues are expected to reach VND167.6 trillion ($7.7 billion) in the second quarter and VND345.9 trillion in the first half of this year, the ministry said.

The tax sector planned to collect VND731.6 trillion ($33.56 billion) this year, of which VND93 trillion ($4.27 billion) would be from crude oil.

VN produce losing their edge

The competitiveness of Vietnamese agricultural products, including seafood, is decreasing in the global market, leading to a sharp fall in exports, experts warn.

Agriculture contributed just 0.28 per cent to the gross domestic product (GDP) growth in the first quarter of this year, the lowest since 2011, it was reported at a workshop held by the Institute of Policy and Strategy for Agriculture and Rural Development under the Ministry of Agriculture and Rural Development last Saturday.

Institute Director Nguyen Do Anh Tuan said the fall in shipment was not being rectified, and noted that the dropping demand had been compounded by the emergence of strong rivals that left local products struggling to compete.

Unlike Viet Nam, other countries float their currencies, which makes foreign products cheaper, as is evident with coffee, shrimp and tra fish, according to Tuan.

Cambodian and Myanmar rice now are deemed of high quality, and they can easily outperform Viet Nam in the Chinese market.

Coffee exports, another currency earner for Viet Nam, has been affected by Colombia's success in a re-cultivating programme that has made its coffee more competitive than the Vietnamese product in both price and quality, he said, adding that Brazil has also cut down prices to reduce its inventory.

Vietnamese tra fish now has to compete with white-fleshed fish, which has strongly developed in other countries, while more shrimp products from India, Thailand, Indonesia and Mexico are hitting supermarket shelves in the US.

Local fruits that are traditionally prominent in China, like lychees, plums, dragon fruit and watermelons, are also facing challenges, as the northern neighbour is rapidly expanding fruit cultivation, enabling it to export its fruits to Viet Nam, instead of the other way around.

Other workshop participants expressed concern about the quality of Vietnamese produce and "misguided" strategies that inhibit the nation's ability to meet global demand. For example, Viet Nam has mostly shipped Robusta coffee while foreign markets prefer Arabica.

They also pointed out a lack of market information, especially relating to China, which further dulls Vietnamese edge in this critical market.

It would be hard for Viet Nam to supply higher quality goods at lower prices unless it makes scientific and technological breakthroughs in agriculture, Tuan said.

Director of the Centre for Agricultural Policy, Dang Kim Khoi, stressed the need to promote production of quality goods, saying Viet Nam should step up coffee re-cultivation and the planting of first-rate rice varieties, control the expansion of rubber plantations and the supply of tra fish.

He also called for developing a support industry and processing technology.

Other experts suggested the country provide aid to exporters to counter exchange rate impacts. The aid can be in the form of reduced value added tax and enterprise income tax, widening credit limits and making interest rate adjustments.

Clear rules needed for digital economy

In order to develop a digital economy, Viet Nam needs to create an ecosystem and raise awareness among non-internet companies, while improving the skills among employees.

It also should create regulations that are more clear and increasingly transparent.

John Ure, Director of consulting and research firm TRPC made the recommendation at a conference entitled Powering the Digital Economy in Viet Nam held in Ha Noi yesterday.

"Viet Nam's internet economy has been growing based upon its infrastructure, especially the use of smartphones. It is currently making the transition to a digital economy. The digital economy is very weak in Viet Nam, but today there are examples of companies making good progress. They are paving the way to the future," Ure said.

In three months, TRPC conducted a study on current situations and the potential of doing businesses on the internet in five Asian countries, including Indonesia, India, South Korea and Japan. In Viet Nam, it performed research on nganluong.vn, an online payment platform from Peacesoft Solutions Corporation and GiapSchool, the first massive open online course (MOOC) platform in Viet Nam, which was founded by Dr Giap Van Duong.

The statistics in the report indicate the ongoing growth of the two platforms and their potentials. Based on the results, the company recommended Vietnamese authorities work with government agencies to ensure transparency and develop regulations on e-commerce that are more clear. It also suggested Viet Nam improve close partnerships between universities, research institutions and industries.

"Compared with Indonesia, Viet Nam has a stronger infrastructure, especially in the use of smartphones, though they have been seeing growing in both countries. This is also true with India. Viet Nam is more compact, making it easier for people to access the internet, while India and Indonesia are very large countries," Ure said.

"One similarity among the three countries are their rules and regulations. Sometimes they are not as clear as they should be. This puts investment at risk because people don't like uncertainty."

Attending to the conference, Peacesoft Deputy General Director Nguyen Huu Tuat highlighted online car-sharing service Uber and Airbnb, which allows travelers to rent rooms, apartments or houses, as examples of the development of the worldwide digital economy.

He further said that internet-based e-commerce only accounted for a small share of revenues in Viet Nam, while businesses needed to become increasingly digitised. He also said that Peacesoft had digitised its e-commerce services, from moving products into warehouses to payment and shipping.

GiapSchool founder and primary lecturer Giap Van Duong said that the rise of the digital economy was an inevitable trend. His model had been carried out in many countries and online courses had seen much support from professors and growing participation by students.

However, Duong admitted that the implementation of the model in Viet Nam faced many difficulties, such as teacher shortages. "There are only a small number of talents in Viet Nam who have excellent e-teaching methods," he said.

The conference is one of activities that are part of the "Support programme for businesses and handicraft villages to apply e-commerce to boost sales and exports" project carried out by the Viet Nam Chamber of Commerce and Industry (VCCI).

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

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