BUSINESS IN BRIEF 15/9

Startup models get 28,000 USD in Swiss Innovation Challenge






Three startup models were awarded cash prizes totalling 28,000 USD at the final pitch of the Swiss Innovation Challenge (SIC) Vietnam 2017 competition in Ho Chi Minh City on September 13.

The “Share Car For Ads” initiative won the first prize worth 15,000 USD. It will also represent Vietnam in the final international competition to be held in Switzerland next month.

DropDeck, a platform designed to rank firms calling for investment and help investors find and assess potential startups in a fast and accurate manner, won the second prize worth 5,000 USD. 

The third prize of 3,000 USD went to “Smart assembling parking lot” initiative, using the Internet of Things (IoT) technology, which helps increase parking space.

The organisers also awarded another 5,000 USD prize to the DropDeck project with the most convincing internationalisation strategy.

SIC Vietnam, funded by the Government of Switzerland, was co-organised by the HCM City University of Technology and University of Applied Sciences and Arts Northwestern Switzerland. It was first held in Vietnam in 2015.

Nguyen Thi Anh Phuong, Director of the Executive Master of Business Administration-Management Consulting International (EMBA-MCI) of the HCM City University of Technology, said the competition aims to seek initiatives and innovation models and outstanding startups for both Vietnam and ASEAN.

It also connects the startup community and inspires all people and economic sectors to make Vietnam a startup nation, Phuong said.

Currently, it is a unique programme in Vietnam and Southeast Asia that comprehensively approaches and realises business and technology initiatives.

The University of Applied Sciences and Arts Northwestern Switzerland in partnership with leading local universities have held similar competitions in Indonesia, Malaysia, and Thailand.-

Coconut farming remains languishing

Exports of coconut-based products are sluggish due to challenges and difficulties facing the coconut processing industry and coconut cultivation, according to the Agricultural Promotion Centre of the Mekong Delta province of Ben Tre.

A study by the centre found that coconut farmers earn on average 60-70 million VND per hectare annually, but this could increase to 100-110 million VND if coconut is intercropped with cocoa, pomelo or shrimp farming.

The central province of Binh Dinh is the third largest coconut growing area in the country behind the Mekong provinces of Ben Tre and Tra Vinh.

Here, coconut farmers have benefitted from a steady rise in prices since 2015. Now dried coconuts sell for 9,000-10,000 VND each while fresh coconut milk is sold for 13,000-14,000 VND at groves.

Nguyen An Diem, a former chairman and CEO of the Binh Dinh-headquartered firm Pisico, said in Asian countries with developed coconut processing industries such as Sri Lanka and the Philippines, the trees offer high economic value because all segments of the industry, from farming to processing, have been modernised.

Diem said coconut meat is exported from Vietnam to European countries where it is processed into ice cream, milk and chocolate, the fibre is sold to Japan for making automobile seat cushions, and shell dippers can be used to make activated carbon, which fetches millions of VND per kilogramme.

The timber is used for making handicraft products, he said.

Though coconut yields are high, the processing industry has not developed much, and thus Vietnam exports raw materials, which do not fetch high prices.

Nguyen Dang Phu, deputy head of the Ministry of Industry and Trade-run Research Institute for Oil and Oil Plants, said one hectare in Vietnam produces 9,863 coconuts or 1.9 tonnes of copra per year, the highest in Asia.

But its coconut export turnover is only worth a third to a fifth of other countries’, he said.

A coconut fetches 8,000 VND, but products made from it are valued at up to 40,000 VND, he said.

No investment has been made in building coconut processing plants to manufacture high-value products, he added.

To enhance the value of coconut-based products, authorities should have policies to mobilise investments in plants, Diem said.

He said many enterprises want to invest in such plants, but hesitate because of the realisation they would face raw material shortages since coconut groves are small in size and scattered around the country. 

More investment is required for research into coconut strains and processing and agricultural promotion activities.

The Government should provide financial support to farmers for acquiring new strains and technologies, he said, suggesting that coconut co-operatives must be strengthened and alliances must be established in the farming and processing sectors.

Brand names must be developed for Vietnamese coconut and promoted, he added.

Direct flight connects Vietnam’s Cam Ranh, Malaysia’s Kuala Lumpur

A direct flight route between Vietnam’s central Khanh Hoa province and Malaysia’s capital city Kuala Lumpur was launched on September 14.

Close to 380 passengers were on board the September 14 A320 flights, which took off from Kuala Lumpur at 10:30 and landed Cam Ranh International Airport in Khanh Hoa at 11:35; and left Cam Ranh airport at 12:00 and arrived in Kuala Lumpur at 15:15.

At a press conference introducing the route in Nha Trang city the same day, AirAsia representatives said the carrier operates two flights a day on the route, aiming to draw more Malaysians to Nha Trang while enabling local people and Nha Trang’s foreign visitors to fly to over 120 destinations in Asia using its services.   

This is AirAsia’s 54th exclusive route from Malaysia in Asia, according to Spencer Lee, the carrier’s commercial director.

Khanh Hoa catered for nearly 1 million foreign visitors in the first half of this year, expanding by 80 percent from the same period last year. 

AirAsia is the largest and leading budget carrier in Asia. It has transported over 400 million passengers by a fleet of over 200 planes since 2001 when it launched the first service.

APEC: Role of Vietnamese MSMEs highlighted

Micro, small and medium sized enterprises (MSMEs) hold important role for the economic development of Vietnam, said participants to meetings within the framework of the ongoing 24th Small and Medium Enterprises Ministerial Meeting (SMEMM) held in Ho Chi Minh City.

Many innovative goods and many services for SMEs and startups bring great added value, high efficiency, change a lot of traditional ways by that life has been going on, said Dang Huy Dong, Vietnamese Deputy Minister of Planning and Investment. 

Meanwhile, Aslam Perwaiz, Head of Disaster Risk Management System, Asian Disaster Preparedness Centre, said SMEs are the “backbone” of Vietnam’s economy. SMEs companies do not have a lot financial liquidity, so if Vietnam gives them more encouragement incentives, they will really make the country greater, he noted.

There have been more than 600,000 registered SMEs in Vietnam, employing over 50 percent of total workforce and accounting for over 40 percent of the GDP. The number of newly-established MSMEs has been rising, with about 100,000 new firms per year. 

Tran Quang Thang, General Director of HCM City Institute of Economy and Management, said Vietnamese MSMEs operating in traditional sectors such as garment-textile and footwear hold tremendous potential in the coming time because of e-commerce, creating more jobs and higher productivity.

“APEC meetings put forward many action plans in finance, technology, output, business ethics and gender issues, helping Vietnamese MSMEs unleash their potential and seek more opportunities”, Thang said.

He said three years ago, a project to enhance Vietnamese SMEs’ competitiveness, supported by the European Union, was a success. The project helped MSMEs realise the importance of strengthening cooperation and self-reliance in the supply chain finance.

He also stressed the importance of building regional and international MSMEs networks, where each member could foster close cooperation and obtain more information of other products. The harmonious operation of the MSMEs networks is expected to create significant achievements and breakthroughs.

Binh Dinh province awakes tourism potential

Officials of the south central province of Binh Dinh are hoping to persuade tourists to add the province to their Vietnam itineraries.

Prior to 2015, the tourism industry in Binh Dinh was still nascent. Most tourists coming to the central region of Vietnam opted for ‘established’ spots like Khanh Hoa province or the region’s economic centre city of Da Nang.

But over time, with political commitment and measures to promote investment in tourism, the ‘tourist paradise’ of Binh Dinh has finally ‘awakened’ after years of slumber.

In 2016, Binh Dinh received some 3.2 million tourists including 265,000 foreign arrivals, up 23 percent over 2015, earning total revenue of 1.45 trillion VND (63.8 million USD). In the province’s tourism master plan, by 2020, the province will try to achieve 5.5 million arrivals.

Contrary to the majority of tourist destinations in Vietnam which have suffered from overdevelopment, many of the landscapes in the central province for now remain untouched and still retain their natural characteristics – translating to a huge draw for tourists. Visitors to Binh Dinh mostly seek to enjoy the peacefulness, the majestic landscapes and a diverse culinary experience at a reasonable cost.

Not far from the province’s capital city of Quy Nhon, some of the locations that have gained popularity amongst the young Vietnamese are Ky Co beach – considered the Maldives of Vietnam – Trung Luong beach, Hon Kho or Cu Lao Xanh isles, among others.

Cu Lao Xanh isle, roughly translated to Green Island, lives up to its name as the natural verdant forest covering the island remains mostly intact, save for the settlement area home to a local population of less than 2,000 people. Its tourism industry is still mostly small-scale household-based. But according to Phan Van Binh, vice chairman of Nhon Chau People's Commune, the situation has seen some development.

“In recent years, tourists from HCM City, Hanoi, even Central Highlands, have started to notice the isle. So far this year, the isle welcomed some 1,500 tourists,” he said.

The authorities are urging local residents to adopt the homestay model, by borrowing loans to renovate their houses.

“In addition, we also are calling for investment so tourists may enjoy diverse forms of tourism, as well as creating jobs for locals,” Binh added.

Aside from natural charm, Binh Dinh is also a land of rich culture and history as the province is simultaneously the centre of Buddhism in the central region as well as one of the main areas of the ancient Champa kingdom, whose presence can still be felt by the numerous Cham towers standing today. Historical researchers say the Cham towers in the province, some as old as a thousand years, are the largest in all of Southeast Asia.

Despite the province’s advantages, the quick growth of tourist arrivals is posing a number of problems for local authorities.

This year, right when the tourism season began, most hotels and lodgings (3-star and above) in Quy Nhon City had run out of vacancies.

Nguyen Thi Thu Giang, a tourist from Hanoi, said, her company with 40 people called for reservations a month ago but most known hotels were already full, and “the company had to book rooms in a 2-star hotel whose services leave much to be desired.”

Another downside of the tourism industry here is the lack of diverse forms of entertainment. During daytime, tourists can choose to go on island-sea journeys, or visit museums or historical sites, but come night, there’s not many activities.

Tourists frequently complain that most restaurants and coffee shops here close up shop quite early, while they’d like to wander around the city until late at night.

Duong Tien Dong, another tourist from Hanoi, said that during the three nights he and his family stayed in Quy Nhon, they “could only go to the beach and drink coconut juice, since there’s nothing else to do.”

Infrastructure also still leaves much room for improvement. The entire length of Quy Nhon beach only features a handful of public toilets, and they are severely run-down.

In addition, unlike in Da Nang city, there is a total lack of public showers. After swimming in the sea, tourists have to come all the way back to their hotels for showers. The absence of signboards or location guides also causes difficulties for tourists in finding their way around.

Duong Trung Quoc, a noted historian and also a National Assembly deputy, has said Binh Dinh must create “touristically viable” products combining its natural landscapes of seas and islands with culture and history.

Quoc also suggested Binh Dinh “connect” with other localities in the region that share similar culture and heritages, for example, with Da Nang and Ninh Thuan province in promoting ancient Champa culture.

Regarding the recently emerged issues of vendors soliciting or overcharging tourists, Huynh Cao Nhat, deputy head of the provincial tourism department, said “it’s important to build a community who knows how to do tourism.” That means everyone from the people, to businesses, and authorities of all levels must “exercise professional conducts in receiving tourists.” The department also said it would heavily sanction those who do wrong, “negatively impacting the province’s tourism.”

The province is building a “science complex,” complete with science museums and a planetarium, with the intention of bringing a new flavour of tourism.

Homestay tourism and traditional sports and cultural activities will also be the focus in the future.

In order for all these attractions to maximise their use, Chairman of the provincial People's Committee Ho Quoc Dung said the authorities are trying to complete numerous infrastructure projects, including the airport Phu Cat, expanding and upgrading roads – especially ones connecting popular attractions—and building quality public showers and toilets along the Quy Nhon beach.

The budding tourism in Binh Dinh is a good indication for the locality’s economy, but if management and proper oversight in the long term is not done, a plethora of problems could derail the development of this ‘smokeless industry.’

Northern Power Corp’s output up 13 percent in August

The Electricity of Vietnam Group’s Northern Power Corporation (EVNNPC) generated 5.41 billion kWh of electricity in August, up 13.4 percent from the same period last year.

The August figure brought the company’s total electricity output in the first eight months of the year to 37.14 billion kWh.

During the month, the company put into operation 110kV Yen Dinh transformer station in the central province of Thanh Hoa, and 12 projects to upgrade capacity of transformers and transmission lines, among other works.

Its customer service targets saw improvements, including cutting time for administrative procedures for 139 clients to an average of 5.36 days per person, 1.64 days less than the regulations.

The EVNNPC also took advantage of the media, including radios, newspapers, and televisions, to promote efficient use of energy.

The power supply for 27 northern provinces was ensured, with prompt actions done to resume electricity access to flood-hit localities such as Muong La district in Son La province and Mu Cang Chai district in Yen Bai provinces.

Hanoi’s localities struggle to ensure food safety

In recent years, Hanoi has relegated aspects of food safety oversight to local-level administrations. The implementation, however, has not always gone according to plan.

Within the local administrations, including communes, wards and towns, the lack of qualified officials and adequate budget for inspection activities are hampering food safety management. Though the decentralisation of food safety management responsibilities from the city-level administration to lower levels – communes and townships – is clearly defined in the laws, localities are not always able to fulfill their responsibilities.

Nguyen Thi Thu Hien, vice chairwoman of Chi Dong town People’s Committee (Me Linh district, Hanoi), said after two years’ work on implementing its new food safety management system, the town has managed to establish a committee to oversee food safety in the locality.

However, Hien admitted that food safety inspection has not been as professional as it should be.

“Determination of whether a business has complied with certain trade requirements is still arbitrary,” she said.

She added that when a product is suspected of violating regulations, the inspectorate body struggles with collecting samples and sending them for lab tests. In turn, this hinders the town’s handling of violations.

According to Nguyen Thi Ngoc Ha, head of Me Linh district’s economic department, there are 730 agro-forestry-fisheries producers in the locality under the direct management of the commune-level government. The majority of these producers, however, are small-scale ones without fixed locations, making it difficult for the authorities to keep track of their operations, as well as complete investigation and check-ups.

Le Linh Duy, General Director of Dong Bac A Co Ltd, said this has led to a situation where the “authorities mostly set sights on properly licenced and law-abiding businesses,” which are easier to keep track of. Meanwhile, inspection of unregistered small-scaled businesses that are the main sources of questionable food falls by the wayside.

In addition, some communes fail to take stock of food traders and producers properly, leading to a failure to deliver full reports to the higher-level government. Ha said the commune officials are often unable to correctly assess food safety conditions according to their assigned level of management.

Commune-level food safety authorities are severely lacking in number and in capacity. They also rarely get access to food safety inspection instruments and equipment. Another problem is the lack of budget for local-level governments to investigate food safety compliance, making it difficult for them to carry out the most basic activities like collecting food samples for lab tests.

Director of the Hanoi Department of Agricultural, Forestry, and Fisheries Quality Control, Tran Manh Quang, said food safety has always been a major issue. He also reaffirmed the need for local authorities to shoulder the lion’s share of oversight in this matter.

Quang said he understood local governments’ difficulties with performing these new duties, and has called on the city to craft policies to encourage businesses to invest in transparent production methods, and to continue building centralised slaughterhouses in districts and communes.

Regarding businesses that fail to meet criteria for receiving food safety approval licences, local government ought to help them address their shortcomings, he said. On the other hand, those guilty of repeated violations need to be punished strictly.

Slow ODA disbursement challenges HCM City metro project

More delays are expected for the construction of Ho Chi Minh City’s first metro line due to the insufficient provision of capital.

Le Nguyen Minh Quang, head of the city’s Management Authority for Urban Railways, told Tuoi Tre (Youth) newspaper that the city’s Metro Line No.1 project continues to face mounting challenges related to investment.

Stretching 19.7 kilometers across the city, Metro Line No.1 connects Ben Thanh Terminal in District 1 with Suoi Tien in District 9, with stops in District 2, Binh Thanh District, and Thu Duc District.

The goal of inaugurating the metro line in 2020 could be seriously affected by some contractors opting to put construction progress on hold and others considering terminating their contracts, all due to insufficient investment from the project’s developers.

If construction progress is stalled, contractors will be unable to keep their workers and experts, the official said, adding that human resources will have to be rehired when construction resumes, at additional costs for the companies involved.

Several contractors are concerned over the rationale behind such an issue, particularly in light of the financial support from the Japanese government.

The slow disbursement of official development assistance (ODA) provided by Japan has hurt the trust of the project’s contractors, Quang elaborated.

Vietnam has signed three ODA deals worth over VND31.2 trillion (US$47.4 billion) with the East Asian country, of which only VND10.8 trillion (US$1.37 billion), about 34 percent, had been disbursed since April.

The amount is expected to rise a meager four percent by September.

While the investment needed for the project in 2017 is estimated at VND5.42 trillion ($238 million), the Ministry of Planning and Investment has only allocated VND2.1 trillion ($92.2 million), Quang said.

To aid the process, the Ho Chi Minh City People’s Committee has been forced to advance VND500 billion ($21.9 million) to the project management.

The original estimate in 2006 stated that the metro line project would cost about $1.4 billion, Quang said, adding that experts from Japan later recalculated estimations to $2.491 billion in 2008.

Following several reports by the Ho Chi Minh City administration, the new investment budget was approved by the central government in 2011.

The prime minister then requested the Ministry of Planning and Investment coordinate with relevant agencies to report the adjusted plan to the lawmaking National Assembly.

However, the repot has yet to be submitted to the National Assembly and the planning ministry said it cannot do anything without a decision from the lawmaking body.

In order to eliminate the problem, Quang suggested the Ministry of Planning and Investment follow the direction of the prime minister, and approve the provision of investment for Ho Chi Minh City within the 2016-20 period.

For a permanent solution, Quang says the amount of ODA loans that have been agreed between Vietnam and Japan should be disbursed in accordance with necessity and the progress of the project.

The measure has been proposed by Japanese authorities and supported by the Ho Chi Minh City People’s Committee.

If the disbursement requires a decision from the National Assembly, the premier should have such authority and competent authorities will have to comply with his direction, Quang said.

“We cannot fail to keep our promises with international partners just because of problems with internal procedures,” the official asserted.

SBV demands strict compliance with credit rate regulations

The latest instructions from Le Minh Hung, Governor of the State Bank of Vietnam (SBV), require credit institutions in Vietnam to strictly comply with the SBV’s regulations on mobilising capital in foreign currencies and not offer interest rates exceeding the ceiling levels.

The SBV’s intention is to ensure a balance between mobilised capital and lending capital, which is a way to minimise systematic risks in providing foreign currency credit.

Issued on September 13, an official document numbered 7295/NHNN-TTGSNH from the SBV demands credit institutions keep a close watch on foreign currency credit growth rates, while monitoring the ratio between credit and capital mobilisation in foreign currencies so that an equilibrium is maintained.

In particular, the SBV requested their local offices and other inspection authorities to monitor commercial banks’ other practices to ensure that official regulations on foreign currency interest rates are respected and implemented.

Document 7295 stated that any infringement of the SBV’s regulations would lead to a number of penalties, depending on the level of violation. These range from denial of granting permits for opening new banking branches, representative offices or ATMs, to prohibition of issuing new services.

Competition among credit institutions by offering foreign currency interest rates exceeding the regulated ceiling levels would also result in penalisation from the SBV.

The SBV also asked credit institutions to take the initiative in monitoring and exposing interest rate violations in foreign currency lending, mobilising and liquidating activities within their branch offices, and to implement the appropriate disciplinary actions.

On the other hand, the Governor requested that banks and other credit institutions conduct promotional programmes to encourage borrowing, while tending to customer services, especially businesses, to ensure productivity.

Previously, the SBV had issued Circular 06/2014/TT-NHNN and Decision 2589/QĐ-NHNN, requiring credit institutions to apply regulated interest rates, avoid using technical methods to bypass the SBV’s control, or participating in illicit competition by raising interest rates above the SBV’s designated maximum rates.

At the moment, the SBV’s regulated maximum deposit interest rate for US dollar is zero per cent for both individuals and organisations.

According to reports from the National Financial Supervisory Commission (NFSC), by the end of August 2017, total credit growth rate in the banking sector has reached 11.5 from the start of the year, as compared to 10.2% in the same period of 2016.

Credit growth rate for lending in foreign currencies in the first eight months of 2017 is now 11.5%, a staggering increase of 6.7 times from the same period last year at 1.7%, while credit growth rate for loans in Vietnamese dong is 11%.

Nonetheless, foreign currency credit only accounts for 8.5 of total national outstanding debt.

Artels to be treated as normal businesses

The Ministry of Planning and Investment (MPI) is in the process of constructing a new resolution on artels, a kind of economic co-operative, nationwide, in which these units would receive their own registration number and be treated as normal businesses.

An artel is a co-operative economic entity with at least three members of equal business rights, needs and propositions working together to produce goods and services based on a contract from their local government. 

They are often rurally-based, sharing the work and spoils of rice fields.

The Department of Co-operatives (DoC) under the MPI reported that at present there are about 98,000 artels, with more than 1.2 million members, yet only 36,104 are officially documented and registered for operation, with the rest either bankrupt or in a different line of work as they usually go unsupervised and unsupported.

The MPI has proposed each artel be required to register according to their occupation to ensure they are properly supported and managed, despite being miniscule economic units.

With each artel having a registration number, the MPI hopes to clarify their function and better manage them as part of the national co-operative system. By giving them business and legal status, the MPI believes these artels will be better equipped for production and growth.

To ease financial burdens on these units, the MPI has agreed to keep the registration fee at a mere US$1.3 per artel, and will not issue any further business operation requirements on them.

Ultimately, the MPI expects to see artels’ weak points be improved through supporting policies previously applied to businesses only, which would give them more funding, production materials, technology and information to improve productivity while cutting costs.

The DoC commented that at present, artels in rural and remote areas face many difficulties and competition from foreign goods. As these economic units are minute and separated, they struggle to participate in large production chains.

The average artel’s annual income in 2016 is VND229 million (US$10,200), and each participant gets VND26 million (US$1,158) per year on average.

Considered the junior version of the well known co-operative, artels function based on the principles of willingness, equality and self responsibility among members.

Optimizing manufacturing supply chain development in Vietnam

Huge investments by Samsung Electronics in principally the manufacture of smartphones has driven an increase in exports from Vietnam over the past couple of years, says Ph.D. Nguyen Thang.

Mr Thang, who is the director of the Centre of Analysis and Forecast at the Vietnam Academy of Social Sciences, readily acknowledges that Samsung has generated substantial employment in the country.

This employment has come both in the form of direct employment in the smartphone manufacturing segment and indirectly in parts of the economy only tangently related to the production of phones.

He points out that the employment generated by Samsung has largely been confined to the northern provinces of Bac Ninh and Thai Nguyen, where the company has erected its manufacturing facilities, and is not as some might assume, widespread throughout the country.

Recently, there have been many conferences and workshops where speakers have expressed reservations about the concessions the government gave up in striking its partnership with Samsung in the form of preferential tax treatment on the earnings it generates, among other preferences.

Many so-called experts criticize the agreement struck saying that it unduly gives Samsung an advantage over local manufacturers, says Mr Thang, in a recently published article.

The agreement between the government and Samsung has also come under fire because there are many other experts who are dissatisfied with the localization rate of domestic manufacturers in the supply chain.

However, Mr Thang, cautions that the expectations of these experts are not realistic and the theory that there is somehow an automatic connection between foreign direct investment from Samsung (or any foreign multinational) and local development of the supply chain is erroneous.

Currently, local companies’ participation in the supply chain of Samsung has been limited to ancillary activities such as wrapping and packaging of products. The transition to becoming a supplier of materials or intermediate goods is a process that realistically could take decades.

Thang advises local governments to be mindful that the commonly referred to benefits of technology transfer is not an overnight process but one that will take many years to be fully realized.

However, there are things that can be done in negotiations with foreign multinationals that can help speed up the process and bring more immediate benefits to the local economy.

First, he says, the approval of foreign manufacturers locating in high tech parks throughout the country should be made provisional upon a guaranteed gradual increase in investment in worker training.

Consideration should also be given to mandating targeted increases in localization rates.

Second, he says that governments should be mindful of the need for local companies to actively strive to produce a higher quality product than they have customarily made in the past.

Companies such as Samsung are successful because of their dedication to provide the highest quality of service to their customers.

Neither local governments nor companies should expect Samsung to lower its standards just to accommodate a higher localization rate. If companies want to participate in the supply chain they should be held accountable to the highest of standards.

Third, he suggests that governments at all levels should effectively work with the domestic private sector to find ways to incentivize innovation and to create more favourable conditions for start-ups to emerge.

Clearly, Samsung (as well as other foreign multinationals) have intellectual property rights that local companies have no legal authority to access, steal and use to compete against the company in the same or virtually the same industry.

But there are spill over technologies, as Mr Thang describes, where knowledge obtained can be used in alternative economic segments that do not violate intellectual property rights and this type of use should be encouraged by the governments at all levels.

Some experts and other commentators put forth the argument that domestic companies in the smartphone segment have not benefited sufficiently from the agreement struck with Samsung.

However, Mr Thang, argues this proposition is blatantly false.

Those parties who criticize the agreement have unrealistic expectations and are not sufficiently cognizant of the fact that technology transfer does not take place at a couple of meeting over a week-long period.

The benefits brought about by technology transfer take a long time for the structural economic transformation to be realized— it is a gradual process that takes years if not decades to unfold.

To build momentum, says Mr Thang, much more can be done to facilitate the process such as revamping the education system to teach relevant managerial and technical skills and improving collaboration between universities and other post-secondary educational institutions.

Most importantly, Mr Thang concludes, the government, business community and academia must begin laying the foundation for an innovative and thriving start-up culture that extend its reach far beyond the assembly line.

VN-Index steady in upward trend

Shares rose on the Ho Chi Minh Stock Exchange on September 14 but declined on the Hanoi Stock Exchange.

The benchmark VN-Index edged up 0.44 percent to close at 806.32 points, the highest point since February 15, 2008.

The southern market has been on a steady upswing, with growth of 5.9 percent in the last three weeks and nearly 21.3 percent since the beginning of this year.

Large-cap stocks, especially banks, pushed up the market.

Eighteen of the top 30 largest shares by market value and liquidity on the HCM City bourse (VN30) advanced and only nine declined.

Banks recovered after a bearish session on September 13. Five of seven listed lenders gained value and only one (Vietnam Prosperity Bank) slumped.

The four largest banks by market value and assets, Vietcombank (VCB), Vietinbank (CTG), BIDV (BID) and Military Bank (MBB), increased by less than 1 percent. Sacombank (STB) picked up 1.74 percent.

Besides banks, other blue chips which pulled up the VN-Index were PV Gas (GAS), up 3.6 percent; VinGroup (VIC), up 2.2 percent; Saigon Securities Inc (SSI), up 1.6 percent; FLC Faros Construction (ROS), up 1 percent; and Masan Group (MSN), up 0.5 percent. 

According to Vietnam Investment Securities Co, the VN-Index reaching new heights eased concerns that the market would soon undergo a downward correction after hitting a 10-year peak on September 8.

“The uptrend will continue. It may stop but not now,” analysts at Vietnam Investment Securities Co wrote in a note. Since the VN-Index has been rising from 761 points on August 22, there have only been two losing sessions, demonstrating the market’s strength.

However, on the smaller Hanoi Stock Exchange, the HNX-Index inched down 0.05 percent to end at 104.38 points. It rose 1.5 percent in the last two sessions.

The northern market has climbed more than 30 percent compared to the last trading day of 2016.

Investors’ concern now is market liquidity, which barely improved in recent sessions.

A total of 233 million shares worth more than 4.5 trillion VND (198.2 million USD) were traded in the two markets, up 23 percent in volume but almost unchanged in value compared to the previous session.

ADB again names BIDV as Vietnam’s leading partner bank

The Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) has been once again named the “Leading Partner Bank in Vietnam” by the Asian Development Bank (ADB).

This is the second year in a row BIDV has won the ADB’s Trade Finance Programme (TFP) Awards.

The awards recognise the TFP’s most active partner banks measured by the number of transactions conducted from July 1, 2016 to June 30, 2017.

The “Leading Partner Bank in Vietnam” title honours BIDV’s endeavors in strengthening capacity in trade finance and information transparency.

The TFP provides guarantees and loans to more than 200 partner banks. Since 2009, the programme has supported more than 10,900 small and medium-sized enterprises across Asia-Pacific, with about 16,000 transactions valued at a total of some 28.5 billion USD.

In August 2009, BIDV was one of the first Vietnamese partners to be selected by ADB for a credit limit and trade finance contracts, allowing BIDV to conduct more trade finance transactions with customers.

At present, BIDV is the largest bank in Vietnam with total assets exceeding 1.1 quadrillion VND (approximately 49 billion USD) at the end of June.

WWF certifies Bao Chau Enterprise as GFTN member     

The World Wildlife Fund (WWF) certified Bao Chau Private Enterprise as its official member of the Global Forest and Trade Network (GFTN) on Thursday.

GFTN is one of WWF’s initiatives to combat illegal logging and to drive improvements in forest management while transforming the global marketplace into a force for saving the world’s forests. It links more than 200 companies, communities and governments in over 30 countries to create market incentives for responsible forestry and trade practices. GFTN was established in 1991 and is the world’s longest-running and largest forest and trade programme of its kind.

Bao Chau Enterprise manages more than 2,000 hectares of plantation forest in the central coastal province of Phu Yen. With the participation of this network, Bao Chau will strive to expand its sustainable forest area to some 5,000 hectares by 2020 according to the provincial forest development plan.

Le Thien Duc, GFTN Vietnam Coordinator, said Bao Chau was the tenth Vietnamese wood enterprise to take part in this network. In joining this network, Vietnamese businesses will be supported through new programmes for market regulation, such as EU Timber Regulations, Forest Law Enforcement, Governance and Trade (for the European market) and the LACEY ACT (for the US market); connections to buying and selling markets; and consulting services for technical issues in finding certified materials.

Deputy Chairman of Phu Yen People’s Committee Tran Huu The said efforts to participate in sustainable forest management and the timber plantation business in accordance with the world’s standards is necessary for enterprises.

There is also a major social responsibility in indirectly generating income for growers, said The.

He said the province would create favourable conditions for enterprises involved in afforestation, including Bao Chau Enterprise, to achieve the goal of managing its entire plantation forest area in a sustainable manner. In turn, these enterprises should be qualified to export forest products to strict markets such as the US, Europe, Asia, Japan and South Korea in the future.

According to Huynh Van Hanh, deputy chairman of the HCM City Handicraft and Wood Industry Association, Viet Nam’s wood export turnover still accounts for a small proportion in comparison with the total wooden furniture consumption value in the world, which is some US$467.7 billion per year.

The important thing is that high-value products are always geared towards demanding markets and require strict processes in documenting the wood’s origin, while local firms have not built a reputation in these markets. By possessing a Forest Stewardship Council certificate and Chain of Custody documents or by joining organisations like GFTN Vietnamese enterprises gain prestige, said Hanh.

Viet Nam has the fifth largest wood processing industry in the world, with a turnover of $7.3 billion in 2016. It is predicted that the country’s wood and wood products export turnover will reach some $8 billion this year.

GFTN Viet Nam was established in 2005, with members such as Vinh Long Import Export Joint Stock Company and Thuy Son Investment JSC.

To reach the target, Vietnamese businesses will need to change products continuously and to seek new export markets. However, to reach potential and demanding markets, enterprises will need stricter control over the origin of their wood and raw materials. If there are no certificates or checks recognised by international organisations, enterprises will not be able to reach markets such as the US or Europe. 

Thua Thien Hue attracts $87 million investment     

 The central province of Thua Thien-Hue has attracted eight more projects with total registered capital of over VND2 trillion (US$87 million) since the beginning of this year.

At present, industrial parks (IPs) in the province have attracted 150 projects with total registered capital of VND65.7 trillion. This includes 34 foreign-invested projects with total registered capital of $1.74 billion.

Of the total registered capital poured into the province, realised capital reached VND20.4 trillion, accounting for 31.24 per cent of the registered capital.

Licensed projects include Chan May Port 2 backed by Chan May Port Joint Stock Company with registered capital of VND849 billion, spanning an area of 14 hectares.

Another is the Suoi Voi ecological tourist project, invested in by Hoa Lu-Hue Investment, Trading and Service Co., Ltd, with registered capital of VND218.2 billion, spanning an area of 51.1 hectares. The Frit tank production plant project financed by Hue Frit JSC was also licensed, with a capacity of 65,000 tonnes per year and registered capital of VND175.5 billion.

Two other examples are the VND160-billion spinning mill project of Phu Quang Spinning JSC and the granite tile factory owned by Vitto Phu Loc Company, with a capacity of 7.2 million square metres per year and registered capital of VND610.9 billion, spanning an area of 10 hectares.

The management boards of Thua Thien-Hue’s industrial parks have focused on implementing key tasks to attract investment, such as completing the review of the master plan for the construction of Chan May-Lang Co economic zone.

The province has also completed the construction plans for the Lang Co-Canh Duong eco-tourism project, Tu Ha IP and Phong Dien IP.

Thua Thien-Hue has paid a great deal of attention to promoting co-operation with large corporations and secondary investors with strong capacity and financial potential to increase motivation for the development of industrial parks, such as FLC Group, Vingroup, Bitexco and Viglacera, as well as BRG Group and Japanese Kaiokai Group, in addition to foreign organisations such as JICA, KOICA and JETRO.

Currently, the occupancy rate of Thua Thien-Hue IPs is 39.6 per cent. The occupancy rate of Phu Bai IP for phases I and II is 98 per cent; Phong Dien A IP, 33 per cent; Phu Da IP, 41.1 per cent; and La Son IP, 20.9 per cent.

In 2017, Thua Thien Hue Province aims to attract 20 investment projects to its economic zone as well as IPs with total registered capital of VND6 trillion, of which realised capital will be VND3.5 trillion, an increase of 43 per cent compared to 2016. 

VN’s exports to Algeria surge     

Viet Nam exported US$228 billion worth of goods to Algeria this year as of early September, up 26 per cent year-on-year, according to the Vietnamese Trade Office in Algeria.

Among the major staples exported are coffee beans, with a turnover of $84.31 million, phones and phone parts at $58.8 million and rice at $11.53 million.

Other key export items are pepper, steel products, seafood and computers, as well as electronics and their components, machinery and other equipment and tools. Algeria is now the fourth-largest consumer of Vietnamese goods in Africa, behind South Africa, Ghana and Egypt.

Bilateral economic co-operation has room to develop, with Algerian consumers becoming increasingly familiar with Vietnamese goods, while Algerian animal feed, medicine and natural minerals are sold in Viet Nam, trade experts said.

The office said it has organised a range of trade promotion activities including business seminars and fairs in a move to celebrate the 55th year of diplomatic relations between the two countries.

Viet Nam’s shipments to Algeria reached $271.42 million in 2016, a year-on-year increase of 37 per cent, with most of the revenue coming from coffee and rice. 

VNA/VNS/VOV/SGT/SGGP/TT/TN/Dantri/VNEVET

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