BUSINESS IN BRIEF 27/1
Brackish water shrimp farming faces severe damage


Brackish water shrimp farming faces severe damage, Vietnam’s exports to US fall sharply in January, Wholesale markets seek HCM City’s approval to raise fees, SCAVI aims for top global position in lingerie production


Vietnam’s brackish water shrimp farming acreage damaged by weather anomaly and diseases last year was estimated at around 68,000 hectares, a sharp increase of 26% against 2015, according to a report of the Department of Animal Health under the Ministry of Agriculture and Rural Development.

The damaged area accounted for nearly 10% of the area under shrimp farming in the country. Of which, around 18,000 hectares under intensive and semi-intensive farming was damaged while the figure was put at 35,921 hectares of extensive farming, and the remainder for other types of rearing.

The department cited prolonged drought and increasing salinity intrusion as the main reasons for damage of the brackish water shrimp farming area.

While the farming area damaged by all causes increased strongly, the shrimp farming area hit by diseases last year dropped by 36% year-on-year to 11,305 hectares.

Over 6,330 hectares under shrimp farming in 25 provinces nationwide was hit by an emerging disease known as the acute hepatopancreatic necrosis syndrome, making up more than 50% of total farming acreage damaged by diseases.

Tra Vinh aims for 10,000 ha of large-scale rice fields in 2020

The Mekong Delta province of Tra Vinh is striving for 1,550 hectares of large-scale rice fields each year, thus expanding the model to 10,000 hectares in 2020.

Currently, the province is focusing on developing large-scale paddy fields in 17 communes in the five districts of Cau Ke, Tieu Can, Cang Long, Chau Thanh and Tra Cu.

In order to encourage farmers to join the model, the provincial People’s Committee has financially supported cooperatives togive plant protection services to their members with 450,000 VND per hectare each crop in the first year and 300,000 VND per hectare in the second year.

The province has also assisted farmers with 540,000 VND per hectare to buy high quality rice varieties.

According to Tran Trung Hien, Director of the provincial Department of Agriculture and Rural Development, the development of the large-scale rice field model aims to form concentrated production areas for easier application of advanced science and technology, thus producing a large amount of goods in a stable manner and fostering the connectivity between production and consumption.

In recent crops, Tra Vinh has maintained this model in 27 areas totaling 4,330 hectares with the involvement of more than 4,240 local households who have been supported in input materials and rice selling.

Notably, the Tra Vinh Food Company and An Giang Plant Protection JSC have supported rice production on 2,000 hectares and vowed to buy 10,000 tonnes of rice each year.

Thai Nguyen boosts organic farming

The People’s Committee of Thai Nguyen province and Que Lam Group on February 15 signed a cooperation agreement on producing, processing and selling organic farm produce in the locality between 2017 and 2021. 

 Under the agreement, the northern province and the company will set up an organic farming process that is suitable to local natural conditions.

They will also jointly organise training courses on organic agriculture for businesses, cooperatives and farmers.

Based on planned areas for agricultural production, the two sides will cooperate in growing 5,000 ha of tea, 250 ha of rice and 500 ha of vegetables.

They will establish organic farm produce processing and consumption chains and promote their products in other provinces across the country and foreign markets.

The NETA Vietnam Joint Stock Company has run the only organic tea producing model in Hoa Thuong commune, Dong Hy district of Thai Nguyen province since 2012. 

According to the initial assessment, the company’s tea products are of high quality and win the favour of many domestic and overseas customers.

At present, organic agriculture is developing in Vietnam. The area for organic farming has increased from 21,000 ha in 2015 to 43,000 ha, mainly in Hanoi, Hoa Binh, Lao Cai, Ha Giang, Ha Nam and Lam Dong. 

Vietnam has shipped its organic farm produce to big markets such as Japan, Germany, the UK, the US and the Republic of Korea.

Hai Duong province calls for more investment

Leaders from the northern province of Hai Duong have called on domestic and foreign businesses based in Ho Chi Minh City to promote investment in the fields of infrastructure, hi-tech industry, tourism and agriculture in the locality.

Secretary of the provincial Party Committee Nguyen Manh Hien along with other leaders from the provincial People’s Council and People’s Committee made the appeal at a meeting with Hai Duong entrepreneurs in the southern economic hub on February 15.

Deputy Director of the Nguyen Kim Group, Pham Van Ngoan, spoke highly of the province’s efforts to create a favourable business environment and affirmed to build a hi-end trade and service centre in Hai Duong city with a total investment of over 600 billion VND (26.3 million USD).

Located at the heart of the Red River Delta, Hai Duong has all necessary conditions to develop tourism, trade, industry and real estate, said Vice Chairwoman of the CT Group Ngo Thi Thu Thuy.

Meanwhile, Director of La Tia To Restaurant Private Enterprise in HCM City Le Thi Ngan suggested Hai Duong adopt measures to encourage firms to invest in producing, preserving and processing agricultural products.

At the end of the meeting, representatives of the Hai Duong People’s Committee and investors signed six memoranda of understanding on implementing projects in trade, services, agriculture, and industry.

In 2016, Hai Duong registered an economic growth rate of 7.9 percent. The province collected over 11 trillion VND (500 million USD) for the state budget and fetched 4.5 billion USD from exports. 

The locality is now home to around 11,000 businesses and 339 foreign investment projects from 24 countries and territories.

It has established 18 industrial parks on a total area of over 3,000 hectares and devised a plan to develop 45 industrial clusters on more than 2,000 hectares.

Gia Lai province rolls out red carpet for investors

The Central Highlands province of Gia Lai has rolled out the red carpet for investors by offering financial assistance and administrative reforms, said Vo Ngoc Thanh, Chairman of the provincial People’s Committee.

The locality has issued policies to facilitate investment and financial assistance worth up to one billion VND (44,000 USD) per project.

Administrative reform has been enhanced to improve the business climate, with measures such as shortening the time required to register assets attached to land to no longer than 14 days, and 10 days by 2020; as well as time consumed to approve environmental impact reports.

Dialogues between authorities and enterprises have been increased to get business’ input on policies.

The province has instructed relevant authorities and localities to strictly obey relevant policies to support local investment projects.

The province has approved a list of 61 projects calling for investment from 2016-2018 in different sectors, worth a total of more than 25 trillion VND (1.1 billion USD).

During the investment promotion conference in December 2016, the provincial People’s Committee granted investment licenses to 10 projects.

Investors have registered to invest in 12 projects, worth a total of more than 20 trillion VND (880 million USD), of which four are in hi-tech agriculture, with combined investment exceeding 2.6 trillion VND (114.4 million USD).

DEPOCEN pinpoints challenges for Vietnam economy

Major challenges for Vietnam’s economy are related to how the Government can attract private investment in programs that back socio-economic growth and inflation control, according to the Development and Policies Research Center (DEPOCEN).

DEPOCEN said in a February report on Vietnam’s macroeconomic issues that the private sector is of paramount importance to the country’s socio-economic growth given State budget constraints and the fact that Vietnam can no longer get official development assistance loans from international donors from July this year.

The report said Vietnam is expected to attain economic growth of 6.3% in 2017 thanks to the Government’s endeavor to ensure macroeconomic stability and further improve the business environment. Inflation is projected at 4.3-4.5% this year.

Earlier, the National Assembly approved this year’s economic growth of 6.7%, export expansion of 6-7%, inflation rate of 4%, and total development investment accounting for 31.5% of gross domestic product (GDP). 

Dinh Tuan Minh, one of the report’s authors, said the Government is expected to give priority to macroeconomic stability, inflation control and improvement of the business environment in 2017 in the face of rising global uncertainty. Therefore, the Government will unlikely realize the growth target at any cost if it cannot obtain the inflation target of under 4%.

The report said Vietnam’s economy could grow 6.3% this year owing to strong consumption and positive growth of industrial manufacturing. In addition, the Government can find effective measures to step up capital disbursements from the State budget and administrative reform to attract more private capital.

On top of that, the agricultural sector, which contributes much to the country’s GDP growth, is predicted to fare better this year.  

Regarding inflation in 2017, the report said the consumer price index in the first quarter of this year could exceed 5% year-on-year due to a monetary loosening policy launched in early 2016 coupled with increasing prices of goods on the world market, especially fuels. A possible power tariff hike would also be factored into the CPI increase.

Inflation could go higher than the target if the State Bank of Vietnam is not resolved to control money supply this year, according to DEPOCEN.

Interest rates are projected to go down in the first months of this year thanks to ample liquidity at banks. However, the average interest rates for the whole year could be equal to those of last year and credit growth is estimated at 17-18% in 2017.

The report said the U.S. dollar could strengthen by 1.5-2% against the Vietnamese currency this year as a result of better growth prospects for the U.S. economy and the Fed’s interest rate increases.

Therefore, DEPOCEN said how to encourage private investment to back the country’s socio-economic growth is one of the major challenges this year.

Another challenge in 2017 is to rein in inflation below 4% due to wage hikes and higher food prices caused by unfavorable weather conditions at the end of 2016. Recovering world oil price will pile pressure on fuel prices on the domestic market.   

The export sector could face tough times ahead as the UK’s vote to leave the European Union, also known as Brexit, would weigh on the EU, Vietnam’s second biggest export market, DEPOCEN said. U.S. President Donald Trump’s new trade policy could also affect exports of the developing economies that benefit from globalization and trade liberalization.

A positive note, according to DEPOCEN, is that Vietnam still has the opportunity to attract more foreign investors in 2017 since more investors are relocating factories from China. However, this investment trend will be impacted if America’s better economic performance draws back investors.

HFIC mobilizes capital for seven breakthrough programs

The HCMC Finance and Investment Company (HFIC) has been joining hands with relevant departments to mobilize capital for infrastructure projects under the city’s seven breakthrough programs. The company is currently working on 31 projects with total capital of VND107.2 trillion (US$4.7 billion).

Its strategic partners in capital mobilization include the World Bank, the French Development Agency, the Asian Development Bank, the German Development Bank, and the Italian Agency for Development Cooperation, HFIC said on Monday.

HFIC aims to obtain over VND7.15 trillion in revenue, VND1.34 trillion in pre-tax profit and pay around VND2.76 trillion in taxes this year.

The enterprise had given loans to 152 projects worth a total of around VND25 trillion in the 2010-2016 period, notably a resettlement program with 12,500 condo units in Thu Thiem New Urban Area.

Earlier, the city’s 10th Party Congress approved seven breakthrough programs for the 2015-2020 tenure: human resource quality improvement; administrative reform; improvement of growth quality and competitiveness; traffic congestion and accident reduction; anti-flood and response to climate change and rising sea levels; environmental pollution reduction; and urban refurbishment and development.

The programs will benefit local residents and businesses as they will deal with pressing issues like flooding, traffic congestion, seawater intrusion, air and water pollution, and bureaucracy.

The seven breakthrough programs for 2016-2020 may cost hundreds of thousands of billions of Vietnam dong, but the city’s State budget can only cover 60%, according to the Department of Planning and Investment.

Vietjet offers cheap tickets at VND5,000 on int’ routes

The low-cost airline Vietjet is offering 500,000 promotional tickets, starting at VND5, 000 on international routes from February 14-16.
 
The special price will be applied for flights from Vietnam to Seoul and Busan of Korea; Hong Kong, Taiwan’s Kaohsiung/Taipei/Taoyuan/Taichung (China); Singapore, Bangkok of Thailand; Kuala Lumpur of Malaysia; Yangon of Myanmar; Siem Reap of Cambodia, departing from March 1-December 31.

Passengers can buy cheap tickets at the website: www.vietjetair.com , https://m.vietjetair.com or atwww.facebook.com/vietjetvietnam . Payment can be easily made with debit and credit cards of Visa, MasterCard, JCB, KCP, and American Express and ATM cards issued by 29 Vietnam’s banks that have been registered with internet banking. 

Many agricultural giants to list on stock exchanges

The Ministry of Agriculture and Rural Development yesterday revealed a plan to equitize and launch Initial Public Offering (IPO) to some big agricultural companies including Vietnam Rubber Group (VRG) and Vietnam Southern Food Corporation (Vinafood 2).

At a conference on the implementation of the Prime Minister’s last December made decision on state owned enterprises restructuring in Hanoi, the ministry said that the equitization and IPO at VRG will take place in the third quarter while it will be in the second quarter at Vinafood 2.
 
According to plan, the ministry will complete business value determination to carry out equitization at Vietnam National Coffee Corporation (Vinacafe), Vietnam Northern Food Corporation (Vinafood 1) and Ha Long Seafood Company this year.

Uber Vietnam commits to comply with Vietnam regulations

The Ministry of Transport has approved Uber Vietnam’s pilot project on science and technology application to assist management and passenger transport connection by contracts after the company’s representative committed to comply with Vietnam’s regulations in trading operations.
 
At a working session with the ministry yesterday afternoon, Uber Vietnam committed to supplement short contents into the project as per requirements by the ministry. In addition, it will work with ministries and agencies to complete operation registration as per the law.
 
The Hanoi Department of Transport required Uber to soon report its operations in the capital city and the list of organizations and individuals who the company has supplied service.  The agency’s inspectors said that handling of Uber Vietnam violations had been difficult because there had no signs to recognize the company’s operations.
 
For the recent past, authorized agencies have panelized 22 illegal passenger transport trading cases VND120 million (US$5,274) while unregularized operations by the company in Hanoi might be much higher than that in practice, the Transport Department said.
 
Early this month, Uber submitted the project to the Ministry of Transport but it was rejected for a lack of authorization and validation from it Holland based Uber BV.
 
Talking to Sai Gon Giai Phong recently, deputy Minister of Transport Nguyen Hong Truong said that Uber Vietnam has got business registration certificate in three fields including management consultancy, market research and public probes without relation to supplying or coordinating with private owners of means of transport and firms to trade transport services.
 
The pilot project has not pointed out Uber’s rights and responsibilities as a science and technology supplier and transport service provider to passengers as well as had no coordination mechanism to solve customers’ complaints. It has yet to register electronic trade service supply application with the Ministry of Industry and Trade.
 
Therefore, the Ministry of Transport did not approve the project and proposed Uber to supplement licenses to expand its operation fields as per regulations.
 
Mr. Truong said that Uber Vietnam had to get licenses and establish transport firms for authorized agencies to manage in all aspects, ensure healthy and fair competitiveness environment for businesses and protect rights for the network’s participants as well as service users to continue supplying transport service.
 
The ministry did not ban Uber Vietnam from operating in Vietnam but required it to operate in accordance with registered licenses. If the company wanted to expand operation fields, it must register to supplement that with authorized agencies unless the ministry would handle violations within its jurisdiction, he stressed.
 
The ministry would intensify inspection over transport activities to tackle Uber violations and businesses attending the ridesharing service, he added, warning vehicle owners, transport firms and passengers against the unlicensed field to prevent damage.
 
Meantime, the Government has approved pilot implementation of a similar project by Uber’s rival Grab in HCMC, Hanoi and Quang Ninh province. The Transport Ministry will give estimations after the pilot time.

Vietnam attends audit meeting in Indonesia

Vietnam, along with other audit agencies in Asia, attended the 51st Governing Board Meeting of the Asian Organisation of Supreme Audit Institutions (ASOSAI) in Bali on February 13-14, to discuss ASOSAI operations in 2016 and activities in the coming years.

Addressing the opening ceremony, ASOSAI Chairman Khalid Khan Abdulah Khan said that ASOSAI had a singular objective of enhancing the responsibility and management capacity of members in the region.

He said that ASOSAI has to face challenges of ensuring transparency and efficiency in the public sector through the improvements to audit activities and the settlement of fraud and corruption cases which can be resolved by strengthening the partnership between regional and international institutions.

Chairman of the Audit Board of Indonesia, Harry Azhar Azis said Vietnam is an active member of ASOSAI and will take over as chairman of ASOSAI in 2018, adding that Indonesia is ready to share its experience with Vietnam to help it successfully organise the 14th Assembly of ASOSAI in Hanoi in 2018.

Vietnamese State Auditor General Ho Duc Phoc said that at this meeting Vietnam will present its plans on the organisation of the 14th Assembly of ASOSAI, which will contribute to enhancing the capacity of Vietnam’s State Audit.

During the two-day meeting, delegates discussed ASOSAI’s financial report for 2016, budgets for the 2018-2020 period and plans for the 2016-2021 period, among other things.

ASOSAI was established in 1979 and now has 46 members. Vietnam State Audit became a member of ASOSAI in 1997.

Vietnam’s exports to US fall sharply in January

Vietnam’s export value to the US saw a considerable fall in January, which is partially blamed on US protectionist policies and restrictions on imports from many markets.

According to the General Department of Customs, in January Vietnam’s export value to the US was estimated at USD3 billion, down USD600 million from December 2016. The decline was reported in many staple Vietnamese products such as seafood, cashew nuts, wood, garments and textiles and footwear products. 
 
Vietnam’s monthly average export value in 2016 reached USD3.3 billion.

The US is among Vietnam’s biggest export markets, recording a decade high trade surplus. So, the fall in Vietnam’s US export value in January is partially attributed to the US President Donald Trump’s policies to curb imports.

Economist Pham Chi Lan said that the changes in President Donald Trump’s trade policies, enhancing the protectionism, while reducing US overseas investment will affect many developing countries, including Vietnam, which still much depend on foreign investment and exports. 

Vietnam needs better mechanisms to handle shocks that may come from the US under Donald Trump's presidency. The country should diversify export markets to mitigate the dependence on the US market, Lan highlighted.

Thai Binh to have over 9,000 firms by 2020

The northern province of Thai Binh hopes to have more than 9,000 enterprises by 2020, or 850-900 new ones per year between 2016 and 2020, under a scheme to develop the private sector and small and medium-sized enterprises. 

The private sector is expected to contribute 65 percent of total social investment, nearly 60 percent of provincial gross regional domestic product and half of provincial State budget collection by 2020. 

To achieve this, the province will encourage businesses to join value chains in manufacturing and distribution, and encourage support industry, agro-fisheries processing, and traditional craft firms to tap the potential in farming and the local workforce. 

It will also offer business incentives such as loans, preferential land tax, improved infrastructure and administrative reform. 

According to the provincial Department of Industry and Trade, Thai Binh recorded 2,300 newly-established firms from 2011-2015, including 2,281 small and medium-sized ones with average registered capital of about 3.8 billion VND (165,000 USD), below the country’s average of 6 billion VND (260,000 USD). 

In January 2017, it granted business licenses to 44 firms and five branches and representative offices, bringing the total number of enterprises to 5,014 with total registered capital of more than 44.685 trillion VND (1.94 billion USD).

Wholesale markets seek HCM City’s approval to raise fees

The management companies of Binh Dien, Thu Duc and Hoc Mon wholesale markets have asked HCM City authorities to adjust their “very outdated” management fees as they have had to compensate for losses.

Speaking at a meeting with city leaders on February 13, Nguyen Van Huan, director of Thu Duc Wholesale Market Management and Trade Company, said that many kinds of costs such as salaries, garbage collection and electricity had risen by 10 times, but management fees had remained unchanged since 2003 when the market was established.

His company has collected only 280 million VND (13,334 USD) a month from more than 1,400 traders at the market, which was insufficient to cover garbage treatment of 300 million VND and electricity costs of nearly 250 million VND a month and salaries for guardians.

“We have petitioned to hike the service fee by four to five times from the existing rates, specifically from 20,000 VND per sq.m to 80,000-100,000 VND per sq.m. Parking fees in the market also need adjustment in line with the market price,” he said.

Tran Thuy Lien, director of Binh Dien Wholesale Market Management and Trade Company, said under the current regulation the management fee at the market was just 22,000 VND per square metre.

Such fees are used to pay for many items, such as garbage collection and transport, wastewater treatment, security fees, water and electricity.

As these costs are high, the company has to compensate for big losses every year, she said.

The companies have also asked the city government to resolve problems related to land rentals and to improve transport infrastructure in the markets to make it easy for vehicles to enter and leave the markets.

They have also urged the People’s Committee to speed up relocation of other inner-city wholesale markets to outlying districts, and clear illegal markets near wholesale markets to ensure the legitimate interests of traders at wholesale markets.

Speaking at the meeting, Tran Vinh Tuyen, Vice Chairman of the People’s Committee, said the city’s general plan was to develop modern and civilised wholesale markets that will not only be destinations for product buyers but also for tourists.

He said that building brands for wholesale markets and stalls were important, and that brand building began with selling goods with a clear origin and good quality. Ensuring hygiene and food safety was also critical, he added.

In the case of Ho Thi Ky Flower Market in District 10, Tuyen asked the People’s Committee of District 10 to quickly implement measures to relocate the market to ease traffic congestion in the inner-city district.

He said that districts must review zoning plans for traditional markets and make plans to relocate temporary markets.

The Binh Dien, Thu Duc and Hoc Mon wholesale markets should develop measures to attract more traders from inner-city wholesale markets, he added.

As for the petition to hike management fees, Tuyen told the city’s Department of Finance to submit new management fees for the three wholesale markets to the municipal administration for approval by mid-March.

SCAVI aims for top global position in lingerie production

The largest foreign-invested company in the fashion sector, SCAVI has fought its way onto the list of 500 biggest companies in Vietnam in 2016, announced by Vietnam Report in February 2017.

SCAVI, which has been growing at an average of 25 per cent a year, currently ranks tenth globally in lingerie production outsourcing, in terms of revenue. It targets a growth of 40 per cent a year from now to 2021 and seizing the worldwide leading position.

A member of French group Corèle International, SCAVI was established in 1988 right after the Law on Foreign Investment became effective. SCAVI specialises in luxury intimates, core intimates, including big sizes, underwear, nightwear, home wear, and swimwear. 

The company is in charge of outsourcing the design, technical fitting, materials sourcing, and production organisation to delivery for about 30 international brand customers from Europe, North America, and parts of Asia. 

SCAVI has a service management headquarters in Orleans and an Asian service management headquarter in Ho Chi Minh City, as well as five factories in Dong Nai, Danang, Hue, Lam Dong, and Laos, with a combined workforce of 11,000. It has 28 years of experience in the field and a multinational work force hailing from France, Vietnam, the US, the UK, the Philippines, and more.

From its establishment, the company has been led by Tran Van Phu, chairman-founder-CEO, who had held many key positions at French companies before founding the company. 

SCAVI is among the first companies in Vietnam that was linked to the international supply chain. 60 per cent of its materials come from Vietnam, and it targets to grow this rate to 100 per cent by the end of 2020. 

SCAVI has also been participating in many corporate social responsibility initiatives, including cooperating with local schools to train workers, building a kindergarten for children of employees that uses the Montessori Method, and giving free schooling to children of low-income workers.

Vietnam’s tech firms yet to overcome domestic challenges

Several local tech startups have followed the phenomenal success of mobile game Flappy Bird, winning over millions of users worldwide, but industry insiders have conceded that there remains a tough road ahead for firms based in Vietnam to really thrive internationally.

Hanoi developer Rubycell has had some early success in 2017, with two of its mobile apps for Android featured in the Editors’ Choice list on Google Play.

Both of the apps, Piano+ and Violin, have generated millions of downloads and won positive comments from users.

“Piano+ and Violin are not only entertainment apps, but give users tutorials to help them learn these two musical instruments,” Rubycell deputy chairman Dinh Van Hung told Tuoi Tre (Youth) newspaper.

“With these apps, users can practice playing the guitar or piano anytime and anywhere on their smartphones.”

Piano+ has been downloaded more than 10 million times on Google Play, and Violin over 5 million times, according to Hung.

Rubycell has another app with more than 10 million downloads on Google Play called Guitar+, which is also a musical tutorial app.

Hung said Rubycell makes money from in-app purchases of these apps, while refusing to disclose their specific revenue.

“We target users worldwide for these apps, with a focus on countries where users are willing to pay for in-app purchases such as in the U.S.,” he elaborated.

Dong Nguyen, another Hanoi-based app developer, shot to international fame in 2014 with his addictive Flappy Bird game, providing a shot-in-the-arm to the local mobile app development sector.

Two years later, other Vietnamese tech startups started making waves on the international market, including names like GotIt! and DesignBold.

GotIt!, developed by the Silicon Valley-based firm founded by Vietnamese national Tran Viet Hung, is an app that connects learners with study experts who offer them step-by-step help through their homework. The app climbed to the top ten most downloaded education apps on Apple’s App Store in the U.S. as of early 2016.

DesignBold, winner of the Vietnam Creative Business Cup 2016, provides a web- and app-based design tool to “empower everyone from everywhere to create visual content limited only by their own imagination.”

While GotIt! earned fame on App Store, DesignBold has generated huge revenue internationally, even during its beta launch.

Besides startups, many established Vietnamese tech firms reported encouraging performances in 2016.

Tech giant FPT Group is now present in 20 countries, with more than 400 customers on its portfolio, 50 of which hold a place on the Fortune 500 list.

Another company, VNG, is currently listed as a top developer on Google Play with five apps available in 15 languages used by 70 million people worldwide.

Despite the potential, some investors and startup experts say there are a myriad of challenges facing Vietnamese tech firms.

Less than 5 percent of Vietnamese tech startups succeed in attracting capital investment, and of those funded, less than 10 percent survive, according to industry insiders.

Nguyen Nhat Tuyen, director of game development with VNG, said winning over global users is a painstaking task requiring extensive effort.

VNG is the developer of “Sky Garden: Farm in Paradise,” a mobile farming game that won the People's Choice prize at the 1stInternational Mobile Gaming Awards for Southeast Asia in 2016.

Tuyen said that game developers have to listen to all feedback, even the smallest suggestions or complaints, from users and constantly update and improve their product in order to achieve success.

Besides challenges posed by users, Vietnamese tech firms also face obstacles at home, with a lack of policy support or incentives from regulatory bodies, according to insiders.

One game company, which wished not to be named, said developers still have to obtain multiple minor licenses to be able to launch new games, which is time- and money-intensive.

“This is not to mention the fact that we have to follow a number of different circulars and regulations,” he added.

One VNG representative said that the Vietnamese government still lacks policies that really encourage local companies to develop digital content and increase their competitiveness in the global arena.

Foreign companies cry out over new fees at Vietnamese port

Hai Phong Port, the country's second largest, has started collecting money for infrastructure upgrade, a move many call unfair.

Japanese companies have complained that new infrastructure fees imposed on containers moving through Hai Phong Port are too high and confusing.

According to the Japan External Trade Organization, or Jetro, the fees at the country's second biggest sea port could increase the cost of doing business. Hai Phong Port now accounts for more than a third of Vietnam’s total cargo throughput, second to Saigon New Port.

The new fees range from around US$11 per 20-cubic-foot container for regular goods, to up to US$100 per container for goods temporarily imported for re-export, a Jetro representative told a meeting in Hanoi on February 13.

The surcharges, which cannot be found anywhere else in the country, will be used for the upgrade of the port’s infrastructure, according to Jetro.

“As far as international norms go, they must invest in the infrastructure first, and then they can increase their fees," the representative said. “Many Japanese companies are confused about what is going on."

Businesses have warned that higher port fees could drive away shipping companies to Thailand’s sea ports, urging transport authorities to review the new fees in Hai Phong.

Pham Thi Ngoc Thuy, senior official at the Vietnam Private Sector Forum (VPSF), said apart from higher costs, the new fees also result in more paperwork that can require an extra two to three hours to finish.

"This has made customs clearance half a day longer than it was before. It’s going against the efforts to improve business environment,” said Thuy.

Vietnam spends a third of green tax on environment

The government is considering another environmental fuel tax hike even though spending on the environment has barely kept pace.

Vietnam may almost triple an environmental protection duty imposed on fuel products from the current VND3,000 (US$0.13) to VND8,000 per liter, according to a proposed amendment to the Environmental Protection Law prepared by the Ministry of Finance.

Fuel already accounts for 90% of the environmental protection tax.

The ministry claims the tax increase aims to improve awareness of environmental protection, resulting in less consumption of goods that cause pollution.

However, while revenue from environmental tax has nearly quadrupled over the past five years, spending on environmental protection has only risen around 1.4 times. 

In comparison with other countries in Southeast Asia, Vietnam’s gasoline prices are not very high. When it comes to affordability, meaning the percentage of a day’s minumum wages needed to buy gas, Vietnam stands among the most affordable.

The draft proposes a significant increase to the cost of gasoline and other refined oil products.

Vietnam adjusted its environmental protection tax in 2010 and in 2015, and this most recent hike, if approved, would take effect in 2018.

Get Japan to remove tuna import duty: exporters
     
The Viet Nam Association of Seafood Exporters and Producers (VASEP) on Monday submitted a proposal to the Government to renegotiate the high import duty on Vietnamese tuna products in Japan.

The association has proposed to the Ministry of Industry and Trade (MoIT) that it negotiate to remove Japan’s import tariff on Vietnamese tuna, as has been done in the case of Thailand and the Philippines, so that Vietnamese tuna products can be sold at more competitive rates in the Japanese market.

Japan is one of Viet Nam’s eight major tuna export markets, VASEP said. However, since 2013, Vietnamese tuna exports to Japan have reduced mainly because of higher import tariffs on Vietnamese tuna products against those imported from countries such as Thailand and the Philippines.

As per data with Japan’s customs office and VASEP’s partners in Japan, for canned skipjack (code 1604.14.010) exported to Japan, Thailand has enjoyed a preferential tariff of 3.2 per cent from April 2009 and 1.1 per cent from April 2011. In April 2012, the import tariff was removed completely under the Japan-Thailand Economic Partnership Agreement (JTEPA), reported vietnamplus.vn.

In comparison, Viet Nam’s canned skipjack gets charged an import tariff of 6.4 per cent though the Viet Nam-Japan Economic Partnership Agreement (VJEPA) came into effect in October 2009.

As a result, Vietnamese canned tuna products cannot compete with Thai tuna products in the Japanese market, the VASEP said.

The situation is similar for other products such as canned yellowfin tuna (code 1604.14.092) and frozen tuna loin (code 1604.14.099) imported to Japan. The import duty for those products shipped from Thailand to Japan was 4.8 per cent from April 2009, reduced to 1.6 per cent in April 2011 and removed in April 2012.

Under the Generalised Systems of Preferences (GSP), the Philippines paid an import duty of 4.8 per cent, which was cut to 2.4 per cent in April 2011 and to 1.2 per cent in April 2012. The duty was finally removed in April 2013.

These products imported from Viet Nam are charged a duty of 9.6 per cent despite the VJEPA. Viet Nam and Japan have not drawn up a schedule to remove import duty on tuna products, the association said.

The tuna market plays an important role in the performance of Viet Nam’s fishery industry and the economy in general, VASEP said. The total export value of tuna is $450 to $550 million a year.

The association said it hopes the MoIT renegotiates the terms as soon as possible and creates favourable conditions to improve the competitiveness of Vietnamese seafood products in the global market. 

Textile firms optimistic in the beginning of the year
     
Textile enterprises have a more positive production outlook compared to last year, as many enterprises reported that they have stable orders from now until the end of the first and second quarters, Truong Van Cam, vice chairman of the Viet Nam Textile and Apparel Association, told Vietnam Plus.

Right after the end of the Tet holiday, textile industry labourers have come back to work with a energetic impetus to work and determination to complete targets set for the year.

At the Garment 10 Corporation, more than 12,000 members have immediately started work.

The company’s number of employees has not changed much compared to previous years, which shows that this year will continue to be a year of stability and efficiency, according to the corporation.

The corporation aims to earn a revenue of VND3.1 trillion with a profit of VND62.5 billion and an average income of over VND7.3 million a person per month this year. Also, at the Nam Dinh Garment JSC (Nagaco), Pham Minh Duc, director of the company said that although the textile industry faced many difficulties last year, the company remained stable and completed set goals.

The company has orders till June and many factories have orders for all of the year, he said.

Last year, the world’s garment and textile market had many difficulties that affected exports, but with the efforts of the officials and employees in the whole system, Duc Giang Corporation said they completed set goals with a revenue of VND2.8 trillion, a year-on-year increase of 10 per cent.

The corporation strives to keep the 10 per cent growth target this year. To accomplish the goal, Hoang Ve Dung, chairman of the corporation board of directors, said that the corporation set solutions including market expansion, trade promotion, core product focus, domestic market expansion and development of distribution systems. 

Textile firms optimistic in the beginning of the year
     
Textile enterprises have a more positive production outlook compared to last year, as many enterprises reported that they have stable orders from now until the end of the first and second quarters, Truong Van Cam, vice chairman of the Viet Nam Textile and Apparel Association, told Vietnam Plus.

Right after the end of the Tet holiday, textile industry labourers have come back to work with a energetic impetus to work and determination to complete targets set for the year.

At the Garment 10 Corporation, more than 12,000 members have immediately started work.

The company’s number of employees has not changed much compared to previous years, which shows that this year will continue to be a year of stability and efficiency, according to the corporation.

The corporation aims to earn a revenue of VND3.1 trillion with a profit of VND62.5 billion and an average income of over VND7.3 million a person per month this year. Also, at the Nam Dinh Garment JSC (Nagaco), Pham Minh Duc, director of the company said that although the textile industry faced many difficulties last year, the company remained stable and completed set goals.

The company has orders till June and many factories have orders for all of the year, he said.

Last year, the world’s garment and textile market had many difficulties that affected exports, but with the efforts of the officials and employees in the whole system, Duc Giang Corporation said they completed set goals with a revenue of VND2.8 trillion, a year-on-year increase of 10 per cent.

The corporation strives to keep the 10 per cent growth target this year. To accomplish the goal, Hoang Ve Dung, chairman of the corporation board of directors, said that the corporation set solutions including market expansion, trade promotion, core product focus, domestic market expansion and development of distribution systems. 

SOEs get an equitisation warning
     
The Ministry of Agriculture and Rural Development (MARD) will tighten control over company equitisation and impose strict penalties on irresponsible leaders who delay this process, Deputy Minister Ha Cong Tuan said at a conference in Ha Noi on February 14.

Deputy Minister Tuan said inefficient equitisation that creates losses of State capital and properties at fully-funded or partly-funded State enterprises would be subjected to compensation payment and held responsible under the law.

According to the deputy minister restructuring of several firms has been implemented slowly. Some equitised companies are unable to sell out their shares on schedule and have not made major changes in terms of production efficiency, while their structure, operations and management have shown shortcomings.

Nguyen Nam Hai, general director of Viet Nam Coffee Corporation, said that during the 2012-2015 period, three fourths of the company’s units were equitised. One unit went into liquidation while two units conducted divestment. Four more units have not divested their capital.

Viet Nam Southern Food Corporation and Viet Nam Rubber Group also faced divestment difficulties, especially in searching for competitive investors to purchase capital.

A representative of the Finance Ministry said at the conference that in 2017, units must take active roles in restructuring and equitisation. The ministry will mobilise officials to help enterprises address problems that arise.

Deputy Minister Ha Cong Tuan said MARD leaders attached importance to strategies attracting investors to agriculture. However, implementation of investment policies faced difficulties and the ministry was determined to work out measures to address them.

Minister of Agriculture and Rural Development, Nguyen Xuan Cuong, said that renewal in enterprise management is a chance to revive State-owned firms.

“The ministry’s plan in the 2017-2020 period is to seriously implement equitisation, capital transfer and divestment. The process will be carried out with respect of the law and transparency to avoid losses. Enterprise restructuring must be conducted along with production,” Cuong said.

Representatives of enterprises at the conference agreed that 51 per cent of stock of efficiently run companies should be kept, while 100 per cent of capital at ineffectively-run enterprises must be withdrawn.

According to MARD, 12 State-owned companies under the ministry have so far equitised successfully. Three, namely Viet Nam Southern Food Corporation, Viet Nam Rubber Group and Viet Nam Agricultural Materials Corporation, are setting up equitisation plans. In 2016, the total divestment grew to VND1.53 trillion (US$68.1 million). 

Infrastructure boosts Dong Nai property market
     
The property market is booming in the southern province of Dong Nai of thanks to its excellent infrastructure.

The local Department of Construction said 250 property projects were developed recently, 15 by foreign investors and involving a minimum investment of US$10 million.

Some that had stalled in 2008 have been revived, it said.

Land and ‘ecological’ villas are the most popular developments, especially near the proposed Long Thanh International Airport.

The projects here include Thac Giang Dien (Giang Dien Fall) Resort, Sakura ecological urban area targeted at expats and The ViVa, another urban area.

Tri Thuc Tre newspaper reported that LDG company plans to develop several projects on a combined area of 150ha, including Premium Eco Village, Diamond Valley, EcoLife Village, and expand Suoi Mo Tourism Area.

This year the company will also begin construction of The Viva Square, a shopping mall.

Other developers like Kim Oanh and EximRS plan to continue investing in the province. Last year Kim Oanh developed RichLand City and EximRS Company was a seller of the Long Hung urban area project.

Amata Group is completing procedures for two projects in Long Thanh District.

In Long Hung District, an urban area called Waterfront will be developed jointly by Vietnamese and Singaporean investors at a cost of $750 million.

VinaCapital Group and DIC have resumed the 200ha, $400 million Hoa Sen Dai Phuoc project in Nhon Trach District.

The booming market has also sparked off M&A deals. Thanh Thanh Cong Group for instance has bought a 35 per cent stake in Tin Nghia Company, one of the biggest real estate players in the province.

With the market gathering momentum, prices are rising.

Brokers said the prices of land and houses in Bien Hoa city and the districts of Long Thanh, Nhon Trach and Vinh Cuu have risen by 10-20 per cent depends depending on how close they are to the developing infrastructure.

Developers expect prices in places close to infrastructure construction to keep increasing.

Furthermore, the economy has been recovering for the last two years and bank interest rates are steady, meaning demand for property is rising quickly, they said.

Nguyen Thanh Lam, chairman of the Dong Nai Property Association, said the market in Bien Hoa, Trang Bom, Long Thanh, Nhon Trach would continue to boom through this year.

The Dong Nai property market got a boost with the construction of the HCM City – Long Thanh – Dau Giay Highway, which has cut the distance to the south-eastern provinces.

Besides, National Highway 1A connecting Dong Nai with HCM City has been widened.

In 2015 the market began to react to the information that Long Thanh International Airport will be developed, and it was approved last year.

Last July the HCM City People’s Committee petitioned the Government to build the Cat Lai Bridge 2 between District 2 and Nhon Trach in Dong Nai, which will help reduce the distance by 10km. 

Large sum of money withdrawn via OMO
     
The State Bank of Viet Nam has withdrawn VND177 trillion (US$7.79 billion) via open market operations and the issue of treasury bills in the past week.

The central bank issued 14-day treasury bills worth VND50 trillion, shows a report from Saigon Securities Incorporation (SSI).

According to SSI, the withdrawals were made as the central bank had to pump a large amount of money into the banking system to support liquidity before Tet (Lunar New Year), when capital demands surged sharply.

In the past week, interest rates for Vietnamese dong loans of different tenors have also dropped sharply in the inter-bank market. The overnight rate was quoted at 1.6 per cent against 4.45 per cent at the end of previous week.

The rates for one-week, two-week and three-week loans also stood low at 2 per cent, 2.9 per cent and 3.8 per cent, against 4.67 per cent, 4.73 per cent and 4.8 per cent, respectively, at the end of last week.

SSI has forecast that the interest rate in the inter-bank market will decline further. 

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


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