BUSINESS IN BRIEF 11/2

Manufacturers in Vinh Phuc face critical manpower shortage

Foreign sector manufacturers at the Vinh Phuc Industrial Park in northern Vietnam report they are facing a chronic shortage of highly skilled apprentices and unskilled production workers.

Whether it be production linemen, machine operators, warehouse personnel or in the front office— the manufacturing segment is facing a critical worker shortage and struggling to meet its needs, said Nguyen Tien Hanh.

Mr. Hanh, who serves as the director of Investment Promotion and Support Department for the province of Vinh Phuc, noted many parks in the province urgently need industrial workers, particularly skilled machinists.

He said, at the Khai Quang Industrial Zone in Vinh Yen City there is an immediate need for 5,000 workers to assemble electronic components with average monthly earnings ranging US$260-US$350 (VND6million-8 million).

At another park, AMOVINA, needs roughly 500 unskilled workers with initial starting wages of US$180 per month.

Mr. Hanh, added that in total another 25,000 jobs will open once construction of the facilities for the Japan-based Sumitomo Group at the Thang Long Vinh Phuc Industrial Park is finished.

The biggest problem, said Mr. Hanh, is in finding workers with the proper training and the worker shortage crisis isn’t going away until the government resolves the question of who should fund the cost of it.

Vietnam’s dragon fruits introduced at Berlin international fair




Vietnam’s dragon fruits were introduced at the international fresh produce trade show - Fruit Logistica 2017 - held in Berlin, Germany, from February 8-10.

Dragon fruits were the only product displayed at the Vietnamese stall, but it was still a big draw to visitors. The fruits are grown under an EU support programme, which helps ensure the cultivation process and the final products to meet GlobalGAP standards.   

During the show, Vietnamese exporters signed cooperation pacts with Germany’s leading fruit and vegetable distributor Landgard, paving the way for dragon fruits and other fruits of Vietnam to penetrate this demanding market. 

Fruit Logistica is one of the world’s largest events in the field. Last year, the event attracted 2,884 exhibitors from 70 countries worldwide and over 70,000 visitors.

According to figures from Vietnam’s Ministry of Agriculture and Rural Development (MARD), dragon fruits are grown on 37,000ha across the country, with annual output reaching some 630,000 tonnes.

The fruits have been exported to the European Union, the United States, Japan, and the Republic of Korea.

Reference exchange rate revised up 10 VND

The State Bank of Vietnam revised the reference VND/USD exchange rate up 10 VND from the end of last week to 22,234 VND per USD on February 13.

With the current /- 3 percent VND/USD trading band, the ceiling exchange rate is 22,900 VND per USD and the floor rate is 21,567 VND per USD. 

In the opening hours, major commercial banks made no change to their rates. 

Vietcombank offered the buying rate at 22,600 VND and the selling rate at 22,670 VND, for one USD, unchanged from the end of last week.  

BIDV listed the buying rate at 22,610 VND per USD, and the selling rate at 22,680 VND per USD, while Techcombank set the buying rate at 22,600 VND per USD, and the selling rate at 22,700 VND per USD.

Dong Nai, HCM City struggle to meet labour demand

Companies in the southern province of Dong Nai need to find more than 30,000 new employees by the end of next month to make up for the shortage caused by the post-Tet staff turnover, according to the local Department of Labour, Invalids and Social Affairs.

Firms in labour-intensive industries such as footwear, electronics, textile and garment are in need of a large number of workers, it said.

For instance, TaeKwang Vina Industrial JSC needs 2,000 and Olympus Vietnam, 1,500.

According to a spokesperson for the Dong Nai Garment Corporation, the company urgently needs 2,500 workers, but labour demand constantly outstrips supply in the province.

The company has to improve wages and the working environment to retain and attract workers.

Most companies require female manual workers with monthly salaries of 6 million VND (265 USD) per person.

Over the course of the whole year the province needs to recruit nearly 79,000 workers, more than 60,600 of them unskilled, the department reports.

Companies in Bien Hoa city alone will hire nearly 30,000 workers, with those in Nhon Trach and Trang Bom districts adding 11,000 each.

Dong Nai province is home to 30 industrial parks and export processing zones with tens of thousands of companies.

In HCM City, companies in industrial parks and export processing zones alone need 3,000 manual workers and 300 trained engineers this month, according to the Employment Service Centre of the HCM City Export Processing and Industrial Zones Authority.

The hiring will be done by both existing companies to expand production and new companies.

Tran Anh Tuan, deputy director of the HCM City Centre for Forecasting Manpower Needs and Labour Market Information, said that post-Tet labour demand in the city was estimated at 20,000.

Of that figure, workers with college degrees or higher qualifications accounted for 27 percent, semi-skilled and skilled workers for 38 percent and manual workers for the remaining 35 percent. 

Navigos Search, a senior and mid-level manager recruitment service provider, has forecast that besides key industries such as manufacturing, banking, retail, and IT, which always have demands for workers, some new industries like advertising and communications are likely to grow rapidly this year after a series of M&A deals done last year.

Government updates energy testing law

A new government circular took effect on February 10, allowing businesses to announce their level of energy efficiency and self-label their goods. 

They will also be able to use the results of pilot testing for all locally-made and imported energy products with the same model and manufacturer.

The Ministry of Industry and Trade has recently issued Circular No 36/2016/TT-BCT to replace Circular 07/2012/TT-BCT on energy labeling for vehicles and equipment. The new circular aims to remove regulations and terms which caused difficulties to businesses.

Accordingly, businesses will take responsibilities for their announcements and energy self-labeling products’ quality.

The circular also allows pilot testing for energy self-labeling by independent testing organisations and laboratories of both domestic and foreign producers; not limited to testing on energy labeling in independent testing organisations.

The move aims to abolish regulations stipulating pilot testing of energy self-labeling are required to be implemented at laboratories assigned by the ministry.

Companies asking for energy self-labeling will be able to send their applications and documents to prove that their chosen laboratories meet the ministry’s conditions.

Enterprises which register energy self-labeling have the right to submit records online, with public services at the level 4 through the online service portal “online.moit.gov.vn”  or to submit their records by mail..

The circular also provides additional provisions on electronic energy labeling. Accordingly, enterprises have the right to choose electronic energy labels for vehicles and equipment in accordance with the purpose of the electronic energy label.

However, the ministry said that State authorities should strengthen post-check-ups after enterprises conduct energy self-labeling for market consumption.

The old circular was said to cause difficulties and troubles for businesses. Enterprises complained that they had to test several times for the same product to meet the requirements for certification of energy self-labeling,  because the labeling validity only lasted six months. Besides, the infrastructure for energy testing laboratories in Vietnam is still limited.

Nguyen Minh Thao, head of the Business Environment and Competitiveness Ability Division under the Central Institute for Economic Management, said the new regulations changed thoughts and process of labeling.

Businesses had to wait for more than 10 days with the old circular and wasted costs on travel and transport goods samples to apply for energy labeling.

Thảo said the long waiting time caused warehouse costs to increase as the energy labeling was one of the required documents for customs clearance.

Implementation of energy labeling for electronics products was an obsession for businesses. It was also one of the barriers on special check-ups in import-export activities.

Long An invests 600 billion VND in hi-tech agricultural area

Almost 600 billion VND (some 27 million USD) will be invested in a hi-tech agricultural area in Can Giuoc district, the Mekong Delta province of Long An, to create favourable conditions for enterprises, farms, households.

The area, which spans 244 hectares in Phuoc Lam, Thuan Thanh and Truong Binh communes, is a multipurpose agricultural area used for hi-tech agricultural production, technological transfer and seedling cultivation, among others.

Le Van Hoang, Director of the Long An Department of Agriculture and Rural Development, said in the hi-tech agricultural area planning, the agricultural sector will also apply hi-tech to growing dragon fruit trees and rice, and breeding beef.

Accordingly, 2,000 hectares will be zoned off for dragon fruit production and 20,000 hectares will be earmarked for rice production, mostly in districts in Dong Thap Muoi region.

Meanwhile, breeding beef cattle using hi-tech will be carried out in Duc Hoa and Duc Hue districts.

Binh Dinh expects to attract 514 million USD of investment in 2017

The south central province of Binh Dinh expects to attract 47 investment projects in 2017 with a total capital of 514 million USD, including seven foreign-invested ones worth 70 million USD, said a provincial official.

Huynh Thi Thanh Thuy, Vice Director of the provincial Department of Planning and Investment , said that in order to create optimal conditions for investors, the province has sped up construction of infrastructure at the Nhon Hoi Economic Zone and other industrial parks and clusters as well as at seaport and transport projects.

The Department of Planning and Investment has coordinated with the provincial Economic Zone Management Board to provide the Government and province’s updated policies related to investment promotion and attraction for investors, especially those from Japan, the Republic of Korea and the US.

The department has also asked to pay more attention to big investors and those using advanced and environmental-friendly technologies, said Thuy.

According to Ho Quoc Dung, Chairman of the Binh Dinh People’s Committee, it is necessary for the province to change methods of calling investment by focusing on potential foreign and domestic investors.

Last year, Binh Dinh lured 40 projects with a total investment of 9.7 trillion VND (431 million USD), up 857 billion VND over the figure in 2015.

So far, the province has attracted 63 foreign-invested projects worth 738 million USD, including 10 projects worth 84.58 million USD in 2016.  

Cashew farming area in Central Highlands shrinks

Cashew growing area in the Central Highlands provinces of Dak Lak, Gia Lai, Kon Tum, Dak Nong and Lam Dong has decreased sharply after local farmers replaced cashews by other crops due to degenerate old trees, pestilent insects and low production.

According to the Steering Committee for Central Highland Region, the area has shrunk by 16,000 hectares to nearly 73,000 hectares as compared to that in 2015.

The sharpest fall of more than 14,700 hectares was seen in Dak Lak province which now has 18,597 hectares. It was followed by Dak Nong whose cashew farming area has dropped from 20,000 hectares to 14,812 hectares.

The committee also attributed the drop to low and unstable prices of cashew nuts, urging farmers to cultivate other crops with higher economic value such as coffee, pepper, maize and bean. 

Amidst the situation, the committee asked the regional provinces to review the current cashew area, while re-zoning off the areas for cashew growing in each locality.  

It has also proposed the Government to support farmers in improving cashew varieties to increase production, while requesting regional localities to provide local farmers with cultivation and care techniques, thus increasing their income and ensuring stable supplies for processing facilities in the region.-

Thai Nguyen spends big to promote tea trade mark

The northern province of Thai Nguyen plans to invest over 220 billion VND (9.7 million USD) in developing sustainable tea production.

Of which, about 150 billion VND (6.6 million USD) is sourced from the province’s budget, while the rest is mobilised from enterprises, organisations and individuals, among others.

The amount will be used to help improve the productivity and quality of tea, thus enhancing the value and competitiveness of Thai Nguyen tea products whose production value is estimated at 3.75 trillion VND (165 million USD) by 2020.

Under the programme, 3,900 hectares will be zoned off for producing tea materials in Thai Nguyen city, Dai Tu, Dong Hy, Phu Luong, Dinh Hoa and Vo Nhai districts and Pho Yen town.

Infrastructure facilities will be built to serve hi-tech tea production while investing in planting and replacing 4,400 hectares of high-yield and high-quality tea trees.

Funding will be disbursed to certify over 300 hectares of clean tea trees in line with such standards as VietGAP, and 50 tea production facilities meeting food safety requirements each year.

A focus will be placed on developing and managing Thai Nguyen’s tea trade mark while establishing cooperatives in tandem building chain values based on the connection between production and consumption.

According to Director of the provincial Department of Agriculture and Rural Development, Ngo Xuan Hai, the province has over 21,100 hectares of tea trees, with 80 percent of the area have applied safe production methods and good agricultural practices.

There are 43 cooperatives with the involvement of over 60,000 households from 140 trade villages. They earn over 100 million VND (4,400 USD) per hectares of tea trees per year.

The programme is expected to create jobs and stable income for over 300,000 labourers while contributing to ecotourism development and environmental protection, Hai said.

Thai Nguyen has shipped its tea products to Pakistan, Taiwan (China), Russia, China, Japan, and the Republic of Korea.-

Vietnamese firms eye co-branding goal

Co-branding is now a growing international trend and offers Vietnamese businesses the easiest way to join the global market.

Shoe maker Biti’s and jewellery manufacturer PNJ are among the first domestic firms to embrace the trend.

Biti’s has obtained permission to use images from Disney’s famous film Frozen on its products, and PNJ has tied up with France’s Swarovski to make its products in Vietnam.

“Buying the rights to use global brands has both improved Vietnamese enterprises and helped customers get the best products,” Vuu Le Quyen, deputy general director of Biti’s, was quoted as saying by Phu Nu (Women) newspaper.

Disney is also hoping that its tie-up with Biti’s will enable its products to enter Vietnam through the latter’s 1,500 stores.

Dr Doan Dinh Hoang, a branding expert, said “Local enterprises have started to work with foreign brand names and the cooperation will benefit from both party’s strengths.”

Through co-branding, international brands can exploit new markets at low cost while local companies get access to new financial sources, modern technologies and, especially, their partners’ customers and markets.

Economist Le Ba Chi Nhan said the value of a brand would increase significantly if it can establish a joint venture with a famous brand and develop together.

Pham Ngoc Hung, deputy chairman of the HCM City Enterprises Association, said “The famous Disney choosing a Vietnamese company to do business with proves that the latter has met Disney’s strict requirements and that Vietnamese enterprises are growing enough to collaborate with big foreign companies.”

He agreed that co-branding is the way for local companies to become bigger and develop in the context of the growing global integration.

But some economists said Vietnamese firms should be careful because this is a new development in this country.

“Local brands will be weaker or fully dependent on their foreign partners,” Nhan pointed out.

Draft decree on State monopoly in trade submitted to Gov’t     

The Ministry of Industry and Trade has submitted to the Government a draft decree declaring a State trade monopoly in 16 goods and services.

On Saturday, the Government website published the draft submitted by the Ministry of Industry and Trade, which mentioned the State would hold a monopoly in trading 20 goods and services, such as goods and services for the purpose of national defense; production, sale, import and export of industrial explosives; gold bar production; export and import of gold materials to produce gold bars; issuing lottery.

In addition, the State’s monopoly would also extend to the fields of tobacco imports; lottery ticket issuance; activity of the national reserve; money printing and minting; issuing Viet Nam’s postage stamps; and production, sale, import-export, transport, storage of fireworks and related services; besides operation of lighthouses and public navigable systems.

According to the ministry, the draft decree is aimed at implementing the 2005 Commercial Law which permits State monopolies with no timelines on commercial operations for a number of goods and services, especially in areas of national interests. The Government will specify the categories of goods and services, and the geographical areas of the State monopoly.

The draft mentioned that the State monopoly in trade implied commercial activities in which only State agencies or State-owned firms would be authorised to trade.

The draft also stated: “The State monopoly in trade is only in essential goods and services, such as the defence and security to which the State would have exclusive rights.”

The enacted decree will contribute to improving the transparency, consistency and accuracy of the legal system on the State monopoly in commercial activities, the ministry said.

The ministry said it would promote a healthy competitive environment, while classifying the scope of the State monopoly, as well as the rights and obligations of related businesses, thereby instilling confidence and trust in the public, besides allowing other economic sectors to monitor State intervention through legislation.

The firms that implement the State monopoly will have to be under strict inspection and supervision, according to the laws on enterprises, competition, pricing and management and use of State funds, the ministry said. 

Outstanding consumer loans capped at VND100m per person     

A consumer can have a maximum outstanding loan of VND100 million (US$4,400) at financial firms, as per the State Bank of Viet Nam’s Decree No 43/2016.

This cap, however, will not apply to car loans, wherein the car is a mortgaged asset.

Experts said the cap will encourage financial firms to focus on lending small loans to promote consumption.

The decree, which comes into effect on March 15, has created the legal framework for growth in consumer lending, which is expected to see a boom in the next several years, driven by economic growth and a young population with high consumer needs.

Regarding interest rates, which remain a matter of concern in consumer lending, the decree said that financial firms will have to draw up regulations on interest rates, such as the highest and lowest rates for each product.

Consumer lending interest rates have always been higher than banking rates as the risks are higher.

Experts said the decree would improve market transparency, and sub-standard customers could get access to credit.

Consumer lending currently accounts for around 10 per cent of the total outstanding loans in Viet Nam, as compared to 25 to 30 per cent in the region.

Ba Ria-Vung Tau: An emerging investment Mecca

The southern province of Ba Ria-Vung Tau has emerged as an investment hotspot, attracting multi-million dollar investment projects in the first month of 2017.

On the early days of the Lunar New Year, the provincial People’s Committee held a meeting with businesses and investors, where the leaders granted investment certificates and approved the investment proposals of eight domestic and foreign-invested projects worth more than $474 million in total registered capital. 

Nine businesses and investors were also praised by the provincial leaders for their active contributions to local development and philanthropic activities last year.

At the meeting, businesses also contributed more than VND3.69 billion ($168,000) to provincial funds for social well-being.

More than 150 investors, businesses, and foreign embassy representatives attended the meeting.

Provincial Party Secretary Nguyen Hong Linh recognised and lauded the contributions businesses and the investor community made to the province’s development.

Linh affirmed the province’s continued efforts to develop the local economy sustainably, attract investment on a selective basis, and effectively exploit its advantages in line with approved planning while ensuring no harm is done to the environment. The infrastructure system serving production-business activities and people’s lives will be further upgraded, striving to turn Ba Ria-Vung Tau into one of most livable cities with the best living standards in Vietnam in the near future.

Linh said that this success is due to the province giving priority to capable and experienced investors with technology and capital intensive projects that are environmentally friendly and use less land, labour, and energy. At the same time, the province deals swiftly and effectively with delayed and inefficient projects.

“The provincial leaders commit to the consistent implementation of new measures to bolster the efficiency of administrative procedure reforms, creating a more enabling business environment and acting as a companion to investors and businesses to help them address obstacles in a timely fashion. These all aim to turn Ba Ria-Vung Tau into a perfect destination for investors,” said Linh.

Chairman of the Ba Ria-Vung People’s Committee Nguyen Van Trinh called upon investors who received investment certificates during the meeting, to concentrate resources into ensuring their projects progress and comply with commitments. Concerns over the mistakes of past projects still loom, and adverse effects on the livelihood of the citizenry are to be avoided at all costs.

Trinh asked businesses and investors in the province to do their utmost to enhance production and trade efficiency; improve product quality, services, and competitiveness; strive to accomplish their business plans; and contribute to the province’s successful implementation of socio-economic development targets for 2017.

Mekong Delta’s agriculture ahead of integration challenges

The Mekong Delta’s agriculture plays a key role in national economic development but the sustainability of its production remains low and hasn’t met the requirements of a modern agriculture.

The industry’s restructuring is vital and should focus on regional linking and building qualified and branded products.  

Although the Mekong Delta’s economy grows every year, its sustainability is still low, with unstable agricultural production, outdated processing technologies, and high costs. 

The region faces other difficulties, including farm land that is shrinking because of climate change, saline intrusion, and pollution.

Le Quang Tri, Director of the Institute for Climate Change Research at Can Tho University, said adaptation is currently conducted individually by households due to inadequate policies.

He called on provinces to promulgate policies that combine regional linking and trade diversification to fully exploit the strengths of each locality, focusing on “policies and people as the decisive factors.”

Tri noted “Climate change and its effect on water resources require us to adjust our production in two possible directions. First, we must adapt by designing corresponding measures. Second, we must prepare in advance to respond to climate change by designing appropriate policies for the agricultural sector.”

Le Thanh Tung, an official of the Ministry of Agriculture and Rural Development, said the delta’s farm produce still hasn’t met certain international standards and that a growing frequency of epidemics is raising production costs. 

So stronger links are needed between localities, businesses, and farmers to drive development, according to Tung, adding “We also need determination by the entire agriculture sector to adopt a common viewpoint, a common way of evaluating advantages and obstacles, and a common method of implementation so that farm land will be used more efficiently.”

An agriculture restructuring project was launched in Dong Thap province three years ago where climate change has received much attention. 

Le Minh Hoan, Secretary of the provincial People’s Committee, said Dong Thap has reached positive milestones in farm connectivity, modernizing production, and expanding cooperation, links, and markets. Much attention has been given to cost reductions and safer production. 

Hoan explained “small-scale production makes it hard to develop brands and raise input costs. In the face of stiff competition, we must reduce production costs and still turn out qualified farm produce. Dong Thap and other provinces are trying to determine which models can reduce costs and help farmers adopt smarter production models to create more qualified products.”

Tran Huu Hiep, a full-time member of the Steering Committee for the Southwest Region, called on the region to strengthen management and quality oversight of local agricultural products.

“To restructure agriculture, we need to build value chains and products with a competitive edge in production input and post-harvest processing on a large enough scale to compete internationally. We should connect regions, sub-regions, and specialized farming areas toward setting up large-scale production models and economic cooperation,” said Hiep.

Vietnam banks to slam doors on home-based business owners

The central bank has tightened lending criteria for household and other unregistered businesses, meaning they will not be eligible for bank loans.

With the change coming into effect from March 15, a housewife who wants to earn some extra money by selling handmade soap will have to apply for a consumer loan rather than a commercial loan from the bank.

A consumer loan is more expensive than a business loan, which will later reflect in the costs of operating her business, limiting revenue growth and profitability.

Vietnam currently has 5 million unregistered home-based businesses, said Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry (VCCI). However, the country plans to relax the business environment so that by 2020 it will have one million private businesses, most of which will be home-based businesses that have converted to legal entities.

Loc said because some regulatory requirements, mostly involving administrative procedures and tax policies, are expensive and time-consuming, the vast majority of local businesses choose to remain as home-based micro businesses.

Also according to the VCCI, about 70% of small business owners, including home-based ones, that apply for a bank loan get rejected, even though they are critical to job creation in Vietnam, employing 52% of the private sector workforce.

Cassava ‘smart farming’ taking root in Vietnam

Cassava, a popular raw material and the third largest source of starch (after corn and wheat) is grown in around 90 countries around the globe, says the Vietnam Cassava Association.

Whether an entrepreneur decides to get into growing cassava tuber or manufacture starch from the root, both are simple processes that require limited capital, said Nghiem Minh Tien, deputy chair of the Association at a recent industry conference in Hanoi. 

Tien added that this low capital threshold make it highly attractive to business owners around the globe and the rigorous competition that results is one of the reasons it is vitally important for Vietnamese in the industry to implement ‘smart farming’ techniques.

He noted that cassava starch has numerous applications in a wide variety of industries and is used in sweeteners, MSG, food, paper, cardboard, plywood, leather goods, glue, paste and cement.

In the food industry, he pointed out that it is also used in the processing of many bakery products and in noodles, soups, yogurt, ice cream, and soft drinks among others.

According to a new report by Expert Market Research, the total global cassava starch market reached a volume of 6.8 million tons last year and it is further expected to grow to 7.5 million tons by 2022.

The reason for the optimistic outlook for the industry is that there has been a continuous development of new products using cassava starch that has and is expected to continue to result in heightened demand.

The Asia-Pacific region dominated the global market in 2016 with Indonesia and Thailand the largest producers followed by the North American, Middle Eastern and African, and South American regions.

In total, there are currently roughly 551,000 hectares under cassava cultivation in Vietnam, primarily in the central, the Central Highlands, south-eastern and northern mountainous regions.

Pursuant to a Vietnam government development plan for agriculture through 2020, the number of hectares would be cut back to 450,000 producing 11 million tons of cassava tuber annually.

The starch content of cassava tuber varies from as low as 15% up to 29% depending on a variety of factors, he noted. If it all were used to produce starch, 11 million tons of cassava tuber could easily equate to 1.65 million tons of starch (or roughly 22% of total projected global demand by 2020).

However, both cassava roots and leaves (young plant tops) have multiple end-uses in addition to being converted to starch. Fresh roots and leaves (after boiling) are used for direct human consumption, on-farm animal feed, commercial production of animal feed, and more recently, for ethanol for use in liquor or as an automotive fuel.

For 2016, on a cassava growing area of 551,000 hectares, farmers in Vietnam produced 10.64 million tons of tuber (a 2.3% increase over 2015), with cassava tuber productivity of 19 tons per hectare.

Out of the estimated 10.64 million tons, 3.66 million were exported through official channels (a 12% year-on-year decrease) generating revenues of US$994 million (a 25% year-on-year drop), with the balance either used domestically or transported in the informal market across the border to China.

The challenges for cassava farmers in 2017 are to rebound from the significant crop failure of 2016 that was caused principally by the drought and flooding natural disasters.

In addition, they are looking to cut back the number of hectares in production in line with the government’s plan and begin laying down roots for instituting ‘smart farming’ in 2017, Tien added.

Implementing smart farming will begin a new season of good things to come for the industry, Tien underscored, that will improve yields, novel farming initiatives, better environmental conditions and higher profits among many other benefits. 

Danang approves logistics project

The first logistics project in the high technology park of the central city of Danang has been approved with total registered capital of VND316 billion (US$14 million).

The U&I Logistics Centre – Danang, funded by the CP Logistic U&I company in southern Binh Duong province, will cover more than 5ha in the Danang Hi-tech Park.

The first phase of the project will be implemented in the third quarter of 2017 and the second phase will start in Q1 of 2021.

Once completed, the project will provide logistics services such as delivery of import-export products, customs procedures and transport of goods by road and inland waterways for businesses in Danang Hi-tech Park.

It is hoped to aid transport and trading activities in the park and Danang’s plan to turn Lien Chieu Port into the city’s logistics centre.

EVN ensures electricity supply for IPs

The Electricity of Vietnam’s Northern Power Corporation (EVNNPC) has devised measures to ensure a stable electricity supply for industrial parks (IPs), according to EVNNPC Chairman Thieu Kim Quynh.

The corporation is responsible for ensuring electricity supply for all IPs in 27 northern provinces, including the dozens of IPs in the northern province of Bac Ninh.

Quynh said the NPC held a working session with Samsung Vietnam group recently on electricity supply for its two affiliations - Samsung Electronics Vietnam (SEV) and Samsung Display Vietnam (SDV), which are under construction in Bac Ninh’s Yen Phong IP. 

The two Samsung facilities have strict requirements on non-stop power supply to ensure their operation, so the NPC is working on upgrading transformer stations and grids to meet the requirements.  

In January, the EVNNPC sent working teams to review the implementation of several power supply projects in Nam Dinh and Bac Ninh provinces.

In Bac Ninh, the team reviewed the construction of the 110kV Yen Phong 5 transformer station and extension lines, and the project to enhance the transmission capability of the Bac Ninh – Dong Anh line.

These projects were carried out in 2016 and are set to be completed in 2017 to meet the power demand of local IPs.

According to the EVNNPC, the Yen Phong 5 transformer station will be put into operation on February 28. 

The facility is expected to provide stable power for Samsung Display, Samsung Electronics and other investors in the industrial park, while easing the load on other transformer stations in summer.

Consultancy firm asked to refine plan upgrading Tan Son Nhat airport

Deputy Prime Minister Trinh Dinh Dung has urged the Airport Design and Construction Company (ADCC) under the Ministry of National Defence to finalise plans to upgrade Tan Son Nhat International Airport in Ho Chi Minh City.

The plan will be sent to the Prime Minister before February 25, Dung said at a working session in Hanoi on February 9.

He said the investment must be carried out as soon as possible in 2017 to put the project into operation in 2018.

The use of State funding should be kept to the lowest level, while social investment and capital from businesses should be encouraged, contributing to improving investment efficiency and reducing losses, he added.

He stressed the need for a quality project, especially regarding landscape and environmental protection, as well as safety during the process of upgrading and using the airport, and aviation safety and security.

At another meeting with the ADCC on January 20, 2017, the Deputy PM asked the firm to supplement measures to build rapid-exit taxiways and parallel taxiways between two runways, in addition to building a new terminal, north of the airport.

“All upgrading measures must be devised in a scientific manner with clear comparison to pick out the optimal one”, he stressed.

Tan Son Nhat airport has a designed capacity of 25 million passengers but handled 32.5 million in 2016. The expansion plan will enable the airport to serve 40-45 million passengers per year.

Life insurance firms bought most long-term Government bonds     

Life insurance companies were the major investors in Government bonds in 2016.

Statistics from the Insurance Supervisory Authority Department under the Ministry of Finance showed that life insurance firms poured more than VND29 trillion (US$1.28 billion) in long-term Government bonds of 15-year, 20-year and 30-year maturity terms.

Life insurance firms bought nearly 90 per cent of the 30-year Government bonds, worth more than VND21 trillion. They were also the buyers of more than 41 per cent of the 20-year bonds and 19 per cent of the 15-year bonds.

The State Treasury has raised VND16.8 trillion by auctioning Government bonds this year, while raising more than VND6.8 trillion on Wednesday alone.

The finance ministry has planned to raise a total of VND250 trillion for the State budget in 2017 by auctioning Government bonds.

In 2016, a record VND281.75 trillion was collected through bonds. 

VCCI leader believes in government’s reform determination

Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc has expressed his confidence in the government’s resolve to push reforms spreading to grassroots levels. 

The reforms are in line with government resolution No.19 on improving the business climate and national competitiveness in 2017 with a vision to 2020. 

According to Loc, confidence should be fostered by the actions of civil servants while communicating with citizens and businesses. 

It is time to create stronger impetus to improve the competitiveness of the country and each enterprise, thereby tapping opportunities brought about by global economic integration, he said. 

He called for clearing barriers for businesses, reducing overlapping inspections and simplifying administrative procedures, adding that high administrative and capital costs are posing remarkable difficulties to firms. 

Loc said the government should not only create a level playing field but also direct development via planning. 

The VCCI reported that 2016 marked a record year with more than 110,000 newly-established enterprises registering total capital of nearly 900 trillion VND (39.1 billion USD). 

Last year, the government changed laws on investment and businesses and revoked thousands of business conditions via circulars, decrees and legal regulations. 

Numerous localities and authorities at all levels improved their provincial competitiveness indexes by rating departments, agencies, districts, communes and civil servants based on public feedback. 

Several localities established public administrative centres, reshuffled investment promotion agencies and connected with e-government services while improving professionalism and integrity of officials.

Meeting reviews government’s resolution on business development

Deputy Prime Minister Vuong Dinh Hue has suggested making an assessment of both quantity and quality of enterprises after one year of implementing the government’s resolution on business development.

Addressing a meeting in Hanoi on February 9 to review the government’s Resolution No.35/NQ-CP, the Deputy PM said besides looking into the number of businesses, it is essential to review their operational efficiency.

It is also important to point out current difficulties and challenges that businesspeople are facing and promptly tackle them in 2017, he added.

The Deputy PM requested creating the optimal conditions for entrepreneurs to do business and make an assessment of capital; goods-services; real estate; science-technology, and the labour market.

He asked localities to conduct dialogues with the business community to address their petitions and prepare for the upcoming meeting between the Prime Minister and businesses.

The Ministry of Finances was urged to inspect the operational efficiency of businesses as well as the outcomes in trade facilitation; implementation of the National Single Window system; simplification of administrative procedures relating to production; and development of the stock market and banking activities.

The Deputy PM entrusted the Ministry of Agriculture and Rural Development to seek better measures to lure investment in the field, while the Ministry of Science and Technology is responsible for building a start-up ecosystem and pave the way for the development of the sci-tech market.

According to the Ministry of Planning and Investment, all 63 cities and provinces across the country signed the commitments to creating favourable business environment for businesses.

Positive outcomes were recorded in major cities of Ho Chi Minh City, Hanoi, and Da Nang.

In 2016, a record high of over 110,100 businesses registered to establish with a total investment of more than 891 trillion VND, a year-on-year surge of 49 percent. Also in this year, 26,600 businesses resumed operation, up about 43.1 percent.

The first month of 2017 saw nearly 9,000 newly-established firms with a total registered capital of 90.3 trillion VND, a respective increase of 8.1 percent in number of 52.3 percent in capital.

Quang Ninh must draw investors, PM says     

Quang Ninh must become a major investment magnet for both domestic and foreign industry and services, Prime Minister Nguyen Xuan Phuc wrote in a report recently issued, following his last visit to the northeastern province.

During his visit, the PM discussed the development of the Van Don economic zone and solutions to improve Quang Ninh’s provincial competitiveness index and business environment in 2017.

In the report, the PM urged the provincial authority to strive to become a global hub like Ha Noi, HCM City or Da Nang, serving as a hot spot for investors, tourists, traders and innovators and lead the region in terms of economic development.

He also stressed that the province should create the most favourable conditions possible for small and medium enterprises and local handicraft villages to generate more employment. In 2016, 1,600 new businesses were established in the province, bringing the total number of local firms to a record 12,000. The objective is to double that number to at least 25,000 businesses by 2020.

In particular, Phuc urged, the province must focus on completing key projects and construction, utilising its advantage as a border economy to encourage trade with China and other countries in the region.

The province must also emphasise tourism development, focusing on building eco tourism and controlling the quality of services and price transparency. The goal is to attract 15 to 16 million visitors by 2020, 7 million of them foreign tourists.

Quang Ninh’s economic structure consists mainly of 52 per cent industry construction and 41.2 per cent services. The province ranks sixth in the administrative reform index, and is also one of the busiest tourism destinations in the country with 8.4 million visitors in 2016, up by 19.9 per cent from 2015. 

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

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