Sacombank offers free mobile banking on 1st two Saturdays     

Sacombank has waived fees for all transactions done by individual customers on its Sacombank mBanking app on the first two Saturdays of July.

There is no limit to the number of transactions or the amount of fees waived.

Sacombank mbanking app is available on the App Store and Google Play.

The bank has recently launched a new version of its e-banking services for both internet banking and mobile banking.

The mobile banking app comes with a QR payment function and the latest promotions.

More Middle East, Africa trade urged     

Viet Nam should have policies and more support for local businesses in trade activities with partners in the Middle East and Africa.

Experts made the suggestion at a conference on foreign affairs with export activities of local agricultural and seafood products to the Middle East – Africa market held by the Ministry of Foreign Affairs in Ha Noi on July 5.

At the conference, Do Quoc Hung, deputy director of the Ministry of Industry and Trade’s Asia–Africa Market Department, said the Middle East –Africa market includes 70 countries with a population of over 1.6 billion, with great demand for the import of goods, especially agricultural and seafood products. The region has harsh natural conditions and is unable to produce agro and seafood products for domestic consumption. This is considered an important market for Vietnamese exporters.

Hung said that among Vietnamese agricultural exports to the Middle East-Africa market, rice, a traditional commodity, would continue to be a major product for this market in the future.

Entering the Middle East-Africa market is a good solution to boost exportation of agricultural and seafood products, avoiding dependence on traditional markets, Hung said.

During the conference, Deputy Director of the Ministry of Agriculture and Rural Development’s Agro Processing and Market Development Authority, Tran Van Cong, spoke of advantages and disadvantages in exporting Vietnamese agricultural products to markets in the Middle East and Africa.

The markets do not have high food safety standards but local firms must enforce tax policies and technical barriers because Viet Nam and countries in the Middle East and Africa have not signed free trade agreements.

In addition, local firms have also faced high risks in receiving payment because many importers in the Middle East and Africa do not pay immediately. Especially, in Africa, Vietnamese companies face fierce competition with rivals that have accepted deferred payments from African partners. Vietnamese businesses have often asked their African partners to pay immediately, causing many of them to seek other suppliers that accept deferred payments.

To promote exports of farming and seafood products to the Middle East and Africa markets, Hung said Viet Nam should continue to improve its legal framework, mechanisms and policies for creating favourable conditions for local enterprises to do business in this market.

Viet Nam and countries in the Middle East and Africa need to study and speed up the signing of cooperation agreements to enhance further trading activities for agricultural and seafood products, he said.

They should actively promote bilateral cooperation via the joint commissions between Viet Nam and countries in the Middle East and Africa. Viet Nam needs to step up its trade promotion activities and support enterprises in attending trade fairs and exhibitions. Those activities would help them seek partners and advertise local products in the Middle East and Africa markets.

The Ministry of Industry and Trade, the Ministry of Agriculture and Rural Development, the Viet Nam Food Association and exporters should establish a cooperative mechanism to promote agricultural and seafood exports to such markets.

Deputy Minister of Foreign Affairs Vu Hong Nam said that support and cooperation with Middle Eastern and African countries is increasing. With more than one billion people, the market has high purchasing power but Viet Nam’s enterprises have yet to fully tap this market.

The conference created opportunities in promoting economic and trade cooperation in the future, Nam said. 

Accounting active in applying new tech     

Accounting is one of the leading fields in the application of information technology, said Dang Van Thanh, chairman of the Viet Nam Association of Accountants and Auditors (VAA).

The Department of Accounting and Auditing Regulations, under the Ministry of Finance, and the Association of Chartered Certified Accountants (ACCA) co-organised a conference on opportunities and challenges of the fourth industrial revolution to the accounting and auditing sector in Ha Noi on Friday.

The accounting process has changed as most accounting practices now incorporate information technology, said Thanh. Big data technology enables fast and simple processing, allowing quick access to data in a short time, he said. Pham Sy Danh, chairman of the Viet Nam Association of Certified Public Accountants (VACPA), said according to VACPA’s survey, accounting and auditing firms agreed that the 4.0 technology revolution will have a large influence on the sector.

The technology would be a tool for accounting and auditing firms to not only improve quality and services but also expand markets to other countries thanks to the internet, he said.

New technology also facilitates data exploitation and improves the reliability of reporting through automated on-demand auditing and accounting systems. In the next three to 10 years, smart software and systems will replace manual work, automate complex processes, support outsourced services and internally re-use some services.

Sharing experiences of other countries, Narayanan Vaidyanathan, head of ACCA’s business insights, said that the use of cloud computing in accounting was already developed in other countries due to the ability to access information everywhere.

However, the fourth industrial revolution poses major challenges on security, firstly in the security of accounting information management and payment and investment activities.

This requires financial systems which can ensure security and privacy in financial and accounting information. To actively utilise the advantages as well as limit the impacts of the revolution, VAA chairman Dang Van Thanh said that it was necessary to innovate and set up accounting processes to collect, process and import accounting documents, as well as processing and exporting information. The chairman also noted the necessity of enhancing the usefulness of accounting information through the application of information technology in analysing and evaluating accounting information.

At the same time, it is necessary to identify and evaluate the risks of information and accounting data when connecting to the internet, he said.

Earlier this week, The Ministry of Finance also organised a workshop on the integration journey of Industry 4.0 and transformation of digital Government in finance sector.

The industrial revolution 4.0 brings many opportunities and challenges to countries, especially developing countries like Viet Nam, in applying digital technology, with new production and business models to promote economic development.

To take advantage of opportunities and limit the challenges brought about by Industry 4.0, the synchronous promulgation of mechanisms and policies on the development of Industry 4.0- related agencies and sectors is important.

The tax and financial policy system plays an important role in mobilising, allocating resources and supporting enterprises, organisations and individuals to participate in Industry 4.0.

At the workshop, Dang Duc Mai, director of the Department of Financial Informatics and Statistics (Ministry of Finance), said that the financial sector was in the process of approaching the initial phase of e-government, which is the building of e-Government and e-Finance.

The financial sector has been focusing on researching and studying models and solutions of digital government transformation of countries, including determining suitable objectives and roadmaps for the sector, Mai said. The Ministry of Finance is concentrating resources to carry out tasks of building e-Government architecture at the Ministry of Finance, with the orientation of the digital transformation and implementation of the national database on finance.

In March, the Ministry of Finance issued a resolution on the application of technology in the fourth industrial revolution in the field of finance with the objective of actively applying the achievements of the industrial revolution, building smart governance platforms, providing smart financial services and actively participating in the development of a digital economy. The ministry plans to complete the building of e-finance and the establishment of a modern, sustainable, open and transparent digital finance platform based on big data, open financial data and digital finance ecosystems by 2025.

The financial sector will play the role of creating, connecting, sharing data and digitalised platforms, meeting the needs of public financial transactions, the need to exploit and use digital information of the Government and people, businesses and organisations. 

Thanh Hoa eyes $14-million poultry processing plant     

Work started on the country’s most modern poultry processing plant costing an estimated VND300 billion (nearly US$14 million) in the central province of Thanh Hoa on Friday.

Financed by the Master Good Group of Hungary and the province-based Phu Gia JSC, the Viet Avis plant will cover 60,000sq.m in Hoang Quy Commune, Hoang Hoa District. It will be able to process 2,500 chickens per hour in the first phase for sale on the local market as well as export to the EU, Japan, South Korea, Hong Kong and Singapore.

During his speech at the event, Minister of Agriculture and Rural Development Nguyen Xuan Cuong urged the two enterprises to complete the construction of the plant on schedule while ensuring social security, environmental protection and job creation.

According to Thanh Hoa’s Department of Agriculture and Rural Development, the livestock sector has developed strongly in recent years in both scale and quality. Regarding poultry, the province currently supplies more than 36,300 tonnes of meat per year.

The province is restructuring its livestock sector to create value chains with large-scale and hi-tech farms. It aims to have 23 million head of poultry by 2020, producing 47,000 tonnes of meat in live weight and over 160 billion eggs. 

Viet Nam poultry, animal products exports increase     

More and more businesses are exporting livestock and poultry meat, opening up great prospects for the livestock sector.

Mavin Group, a joint venture between Australia and Viet Nam, became the first business in Viet Nam to export frozen fresh pork to a foreign market when in late May its first batch went to Myanmar.

Mavin and Japanese-invested Sojitz Viet Nam announced late last month they were tying up to export about 26 tonnes of frozen fresh pork to Myanmar every month.

Koyu & Unitek Co Ltd based in the southern province of Dong Nai exports poultry meat and processed poultry products to Japan.

Koyu & Unitek said it exports nearly 100 tonnes of processed chicken products to Japan every month.

All consignments are quarantined before export and checked when they enter the Japanese market, and so far all have met Japanese requirements, it said.

Khuu Nhon Hieu, the company’s director, said last year a chicken processing line was set up in the Dòng Nai Province with a capacity of 110 tonnes per month.

It produces fried chicken products.

Demand for grilled and boiled chicken products is also growing in Japan.

So the company installed two more production lines and got Japan’s veterinary agency to inspect and issue eligibility certificates to export to that country from June

The three lines have a total capacity of 330 tonnes a month, and the company plans to invest in more new plants to increase its capacity to more than 1,000 tonnes per month to meet demand from Japan, Hieu said.

Other animal and poultry processing enterprises are also preparing to export products soon.

C.P. Vietnam Corporation is building a modern factory in Binh Phuoc Province to make chicken products for export to Japan.

It is a closed-chain production line from producing chicken feed to breeding chickens and slaughtering and processing them.

In the US$250 million first phase, the company will raise 50 million chickens a year.

The company said it had signed export deals with many foreign customers for animal and poultry products even before building the plant.

Pham Thanh Hung, deputy director of Ba Huan Joint Stock Company, said the company is seeking to export processed chicken products to Japan. It would be done quickly since the company’s quality standards meet export requirements, he said.

The demand for pork and chicken products in many markets such as Korea, Japan, and the EU is large, but only foreign-invested enterprises in Viet Nam have so far exported to them.

The director of a poultry breeding company in Dong Nai Province said his company only supplies live chickens to export companies to get experience. In order to export directly, it needs to invest in a closed production chain and market research, and so remains apprehensive, he said.

Dr Nguyen Van Ngai, head of the economics faculty at Nong Lam University in HCM City, told Nguoi Lao Dong (Labourers) newspaper: "Initially Vietnamese companies could outsource to FDI enterprises, but they then could learn [from these FDI firms] and export directly.”

Quang Binh looks to expand links with Singaporean partners     

The central province of Quang Binh held an investment promotion workshop for Singaporean investors last week.

Addressing the event, Chairman of the provincial People’s Committee Nguyen Huu Hoai outlined the province’s advantages and investment incentives in the fields of tourism, renewable energy, communications and transport.

The province is now home to over 440 investment projects, including 23 foreign-invested, with total registered capital of US$763 million, he said.

The province would facilitate investment in the above-mentioned fields, Hoai said, adding that it would also provide support for enterprises working on land clearance, labour training and infrastructure.

President of the Singapore Manufacturing Federation (SMF) Douglas Foo spoke highly of Viet Nam’s socio-economic development.

He said the SMF would to conduct more surveys and organise forums to promote exchanges of information between the two business communities to help Singaporean firms expand their investments in the province.

He expressed his belief that a memorandum of understanding between the SMF and Quang Bình Province would encourage Singaporean businesses to increase their investments in the locality.

Quang Binh officials also inked MoUs on co-operation with SOFOS Capital Management Pte Ltd and Kinder World Education Group of Singapore. 

Deal inked to boost tech transfer     

The HCM City Union of Business Associations (HUBA) has signed an agreement with the American Chamber of Commerce in Viet Nam (AmCham Vietnam) to promote technology transfer and expand investment opportunities.

Speaking at the signing ceremony on Saturday, HUBA Chairman Chu Tien Dung said boosting connectivity and technology transfer between foreign-invested and domestic businesses is a goal for the union.

Viet Nam has been attracting a big flow of foreign investment, but foreign-invested firms’ transfer and domestic companies’ absorption of technology remain modest, he noted.

He attributed the problem to Vietnamese enterprises’ lack of preparations for receiving new technologies. Meanwhile, the country’s foreign direct investment attraction policy hasn’t forced foreign businesses to transfer technology to or support the development of domestic ones.

As a result, many foreign-invested businesses only focus on capitalising on natural resources and low labour costs while not making use of the business development ecosystem or intelligence resources to boost the Vietnamese contribution to their products.

He noted that the agreement between HUBA and AmCham is one of the first steps to improve bilateral co-operation to support member entrepreneurs and businesses in transferring technology, expanding investment chances and developing markets.

Executive Director of AmCham Vietnam John Rockhold said trade and investment ties between Viet Nam and the US are developing well. To boost ties between US and Vietnamese firms, AmCham will regularly organise meetings and exchanges between enterprises to share experience and discuss investment opportunities.

AmCham will also encourage US companies to assist and transfer new technologies and introduce development resources to Vietnamese firms to build a basis for co-operation and mutual support for sustainable development, he added. 

Port handles over 774,000 tonnes of cargo     

Da Nang Port handled more than 774,000 tonnes of cargo in June, the highest amount so far, according to Viet Nam National Shipping Lines (Vinalines).

The volume of cargo transported through the port in the central coastal city on container ships reached a record of 32,406 TEUs (20-foot equivalent unit) over the month, up nearly 4 per cent compared to the 31,280 TEUs in December 2017.

The port received more than four million tonnes of cargo in the first six months of 2018, a year-on-year rise of 6.14 per cent.

It welcomed 912 ships, including 551 container ships, up 3.3 per cent year-on-year.

Commodities with high growth included clinker (up 141 per cent), wood chips (up 80 per cent), coal (up 40 per cent), cement (up 88 per cent) and equipment (up 64 per cent).

The important seaport also welcomed a large number of cruise ships.

In January-June, the port received 71 cruise liners, up 36 per cent from the previous year’s same period, while serving 107,381 tourists and crew members, up 7.6 per cent.

The increased presence of high-end cruise ships, such as Costa Atlantica and World Dream, showed the port’s brand value in regional and global tourism maps.

Located within Da Nang Bay and shielded by Hai Van Mountain and Son Tra Peninsula, Da Nang Port is capable of receiving vessels of up to 50,000 DWT.

It is a gateway to the east-west economic corridor and is connected with an extensive road network, as well as aviation and railway routes.

The port serves containers, cruises and high-capacity vessels, while also providing logistics services.

According to the Ministry of Transport, Da Nang City’s port system will handle 29 million tonnes of cargo by 2030. 

Vietnamese business club makes debut in RoK     

The Vietnamese Business Club in the Republic of Korea (VBCK) made its debut at a ceremony in Seoul on July 7, drawing the attendance of hundreds of Vietnamese and Korean businessmen.

Speaking at the ceremony, VBCK President Tran Hai Linh said the club is an organisation of enterprises, product-service suppliers, and those want to do business to mobilise individuals and community’s capacity for mutual benefits.

Linh, who is also a member of the Vietnam Fatherland Front Central Committee, said the establishment of the club aims at creating an environment of cooperation and information exchange among firms, boosting their collaboration with associations, public agencies and organisations in the RoK, Viet Nam, and other countries.

As a result, win-win ties in the fields of economy, trade, science-technology, and culture-education will be enhanced, he added.

The club functions as a representative of Vietnamese businesses and entrepreneurs in the RoK, protecting their legal rights and interests, and increasing trade-investment promotion, technology transfer and culture-education cooperation.

Vietnamese Ambassador to the RoK Nguyen Vu Tu expressed his hope that VBCK will become a forum for Vietnamese businessmen in the RoK to connect and support each other in seizing opportunities and developing their companies. 

Ben Tre Province supports start-ups

 Many small, new businesses in the Cuu Long (Mekong Delta) province of Ben Tre have grown big and started to build value chains for local products thanks to the local government’s efforts to promote entrepreneurship.

Phu Hung Thinh company for instance, established under the province’s start-up initiative in 2016, has now emerged as a producer of farming products made from coconut and cow manure.

“I want to turn waste into valuable products and sell to other provinces and even abroad,” Phan Gia Thinh, the founder and owner of the company, said.

The company now sells potting mixture made from coconut coir and vermicompost (worm composting) to around 10 cities and provinces.

Explaining the reason for choosing coconut coir as the main ingredient to produce clean potting mixture, the 24-year-old said simply: “Because it can be found easily in my hometown, Ben Tre Province.”

Besides adding value to local coconuts, Thinh is also now making fertilisers from cow manure to create a value chain from cows.

He has tied up with co-operatives in Ba Tri District, where there are more than 77,000 cows, to buy manure from 150 small farmers and composts it.

Nguyen Van Lai, 60, a farmer in the district’s An Hiep Commune, said earlier he had to compost cow manure by himself and sell it often for VND6,000 (26 US cent) per sack, but now Thinh buys manure from him and other farmers at VND8,000 (35 US cent).

So joining the programme was a no-brainer, he said.

Phu Hung Thinh’s success could not have come so quickly without the support of the province government, which is very keen on its start-up programme.

It launched the Dong Khoi Start-ups and Develop Enterprises programme in 2016 to promote entrepreneurship as an effective means to boost economic growth and eliminate poverty.

It established a fund under the programme with funds mobilised from the private sector. It now has around VND12 billion ($523,000).

Le Xuan Vinh, director of the province’s investment promotion and start-up centre, said the non-profit fund is operated by enterprises, and the province’s role is limited to helping promising businesses access money from it.

“There are various types of financial aid such as non-refundable grants worth millions of dong to help entrepreneurs make prototypes and low- and zero-per cent-interest loans.”

Besides, the province is also looking at bigger donors to fund start-ups. For instance, it has connected Phu Hung Thinh company with the Adaptation in Mekong Delta (AMD) project in Ben Tre since it has a public-private partnership (PPP) fund that gives financial aid to local businesses.

Vinh said: “Right after the province’s start-up programme began, we connected with AMD. If we see a business that meets AMD’s criteria, such as adapting to climate change and generating jobs for locals, we will help it access the PPP fund.”

Funding is only one part, with the province also organising training courses in financial management, writing business plans and marketing to improve the capacity of local entrepreneurs, he said.

“We make it easy for young people who have business ideas to consult entrepreneurs from big companies and learn from their success.”

Admitting that the start-up scenario in Ben Tre City is more vibrant than in other districts, especially in remote areas, he said the province has been working with districts to organise district-level start-up competitions.

From these competitions, good ideas would be selected, improved and sent to the province’s annual start-up competition, he said.

“But the main purpose of the competition is not to choose winners but to help nurture good business ideas and build them into businesses.”

Notably, many university graduates working earlier in big cities have returned home to set up companies and some even started businesses when still in college, he said.

“These young people have helped commercialise local products, and they are changing the start-up landscape of the province.” 

Kien Giang province to expand export markets

Kien Giang wants to ship more of its products around the world.

The Mekong Delta province will work to remove bottlenecks for local businesses and enhance trade promotion as part of efforts to expand export markets, according to the provincial Department of Industry and Trade.

Local firms will receive assistance to attend domestic and foreign events to popularise their products and seek new partners. Businesses will also get help improving the quality of their products via the building of material cultivation zones.

Additionally, the province will promote the farming of shrimp to VietGAP and international standards to ensure top-quality materials for processing. It will also work to prevent illegal, unreported and unregulated fishing among local fishermen.

The department said many firms have expanded ties with US partners to ship canned seafood products, and connected with Korean companies to export pineapples and fish sauce.

In the first half of this year, the province earned 269 million USD from exports, accounting for 51.7 percent of the yearly plan, and up more than 45 percent from the same time last year.

Of the total, shipments of farm produce brought home more than 117 million USD, while exports of seafood products totalled 81.5 million USD.

Among the province’s key exports, rice shipments oversea surged 34 percent in quantity and 51.6 percent in value. Kien Giang’s rice has been sold in 11 countries and territories worldwide.

Furthermore, exports of local leather shoes during January-June also quadrupled the amount recorded in the same time last year.

Ba Ria – Vung Tau attracts investors in IPs

The southern province of Ba Ria – Vung Tau is taking measures to attract investors to local industrial parks (IPs). 

The locality is home to 15 IPs, including nine operational parks with an average occupancy of over 47 percent. 

In Chau Duc industrial zone in Chau Duc district, technical infrastructure has been upgraded with a four-lane road and a clean water supply plant with a daily capacity of 75,000 cu. m in the first stage and nearly 150,000 cu.m in the second stage. Construction on three concentrated wastewater treatment plants is also underway.

Pham Xuan Bach, Chairman of the Board of Directors of Sonadezi Chau Duc JSC, investor of the zone, said the zone has so far attracted 16 investors and is expected to raise occupancy to about 50 percent by 2020. 

General Director of Tin Nghia – Phuong Dong Industrial Park Jsc, investor of Dat Do 1 industrial zone, Nguyen Khac Thanh said Dongjin Global Ltd company, a fully Korean invested firm, has put a plant into operation to manufacture cable and power lines and automobile spare parts, creating jobs for 400 workers. 

Seven other investors have also received investment certificates in the zone. The investor hoped that the total lease area will reach 50ha this year, accounting for 25 percent of the total. 

According to the provincial IPs management board, the total number of projects in local IPs hit 339 as of the beginning of this year, including 177 domestic and 162 foreign projects. 

The total lease area in IPs has hit 2,701ha, raising occupancy to 47.25 percent, up 11 percent year-on-year.

Nguyen Anh Triet, head of the management board, said it has asked the provincial People’s Committee to cut licensing procedures and allow the board to license seven types of projects in the fields of technology, support industry, information technology, hardware and software production, workforce training in support and logistics industries which are not subject to approval of the Prime Minister or the provincial People’s Committee.

Top Vietnamese tourism firms honoured

A ceremony was held in Hanoi on July 9 to honour the top Vietnamese travel businesses and to present the Vietnam Tourism Awards 2018 to enterprises that significantly contributed to the growth of Vietnamese tourism.

The event, which celebrated the 58th founding anniversary of the Vietnamese tourism sector, was attended by Deputy Prime Minister Vu Duc Dam and representatives from various ministries, sectors, the Vietnam Travel Association and many travel firms.

Addressing the ceremony, Minister of Culture, Sports and Tourism Nguyen Ngoc Thien said that over the past 58 years, tourism activities have grown, attracting an increasing number of foreign tourists.

In the recent three years, the number of international visitors has grown 30 percent, reaching nearly 13 million in 2017 from 8 million in 2015. Its revenue in the year exceeded 510 trillion VND (21.93 billion USD), accounting for nearly 8 percent of the country’s GDP, he noted.

In 2018, the sector aims to serve 16 million foreign and 82 million domestic tourists, said the minister, adding that Vietnam had the world’s sixth fastest growing tourism sector and Asia’s fastest last year.

The minister highlighted the contributions by the business community to making Vietnam an attractive and competitive tourist destination.

This year, the Vietnam Tourism Awards were presented to 10 leading travel firms, 15 top five-star hotels, 15 top four-star hotels, 15 passenger automobile carriers, 10 top restaurants for tourists, 10 shops, five tourism areas, 10 leading golf courses and five top tourism investors.

At the ceremony, the organizing board also announced 12 winners of a writing contest on Vietnamese tourism, which was launched from October 2017.

“I Love Vietnam” - a special prize for foreigners with best writing work on Vietnamese tourism – was presented to Lana O’Sullivan from the US.

Can Tho: SMEs gain knowledge about engaging in global value chains

More than 240 business leaders and senior executives of multi-industry small- and medium-sized enterprises (SMEs) are gathering at a workshop in the Mekong Delta city of Can Tho to gain knowledge and practical training on becoming an integral part of global value chains and regional e-commerce.

The workshop titled “Trade Facilitation: Integrating SMEs into Inclusive Global Value Chains” is co-held by the municipal People’s Committee, the US-ASEAN Business Council (US-ABC), and the Vietnam Chamber of Commerce and Industry (VCCI) on July 9-10.

The event is also attended by experts from the Ministry of Industry and Trade (MoIT) and General Department of Customs.

The workshop will discuss several topics including how free trade agreements (FTAs) can facilitate trade; reform solutions for trade facilitation in customs procedures; linking SMEs into an inclusive Global Value Chain; and the role of logistics and digital technology in trade facilitation.

Addressing the event, US-ABC Deputy Regional Managing Director Vu Tu Thanh said although Vietnam is viewed as one of the world’s top economies in terms of potential for manufacturers, only 21 percent of local SMEs are engaged in the global value chain compared to the average 46 percent among their ASEAN peers.

Furthermore, connectivity between SMEs involved in the value chain is not close enough, meaning the benefits they have gained from the expansion of FDI enterprises in terms of technological and know-how transfer as well as improved productivity are limited, Thanh noted.

Echoing Thanh’s view, Director of the VCCI in Can Tho Vo Hung Dung outlined some of the other problems for local SMEs that hamper their path to joining the global value chain, including their lack of advanced technology, funding, and skilled workforce (particularly those capable of performing in such high value added stages as processing, retailing, and marketing).

To tackle these issues, experts suggested that the Government accelerate institutional reforms and continue improving the business climate. At the same time, the SMEs were urged to play an active role in studying markets and learning about international rules in order to develop a long-term business plan and raise capital from banks and investment funds from partners.

As Vietnam is now a magnet for FDI, the SMEs should also be active in getting access to large FDI corporations and seeking partnerships with them, thereby making steps towards gaining a foothold in global value chains. 

Nearly 90 percent of manufacturing-processing firms see growth in Q3

Some 89.6 percent of enterprises in the manufacturing-processing industry expect expanded or stable production in the third quarter of 2018, over the previous quarter when only 52.6 percent hoped for growth.

According to a survey by the General Statistics Office (GSO), only 10.4 percent of the asked firms forecast a drop in their production.

Meanwhile, 91.7 percent of enterprises with foreign direct investment (FDI) said their production is likely to increase or remain stable, while the ratio among the non-State firms is 88.9 percent, and that of the State-owned sector is 87.8 percent.

The brightest production prediction in the rest of the year was from the garment sector where 66 percent of firms see expansion, followed by electronic, computer and optical product producers, and paper and paper product producers with 65.1 percent, beverage producers at 62.7 percent and rubber and plastic product producers at 61.9 percent.

The GSO also forecast export orders, with growth and stability predicted in 90 percent of businesses.

Compared to the second quarter of 2018, 92.7 percent of FDI enterprises predicted that their orders will increase or stay stable in the third quarter, while the ratio among State-owned firms is 90.3 percent and non-State firms 87.6 percent.

The highest amount of orders in the rest of the year belongs to cigarette production at 56.3 percent, followed by transportation at 55.6 percent, garment at 55.4 percent, electronics, computer and optical product production at 53.6 percent and metal production at 50 percent.

Pham Dinh Thuy, Director of the GSO’s Industrial Statistics, said economic growth is still dependent on the FDI sector, as the sector has contributed largely to the creation of jobs, export revenue and State budget collection.

Power sector to meet difficulties in meeting rising demand

The power sector will meet difficulties in meeting demand from next year or 2020 considering the high growth at more than 10 percent a year in electricity consumption, according to the Electricity of Vietnam (EVN) group. 

At a review conference of the Ministry of Industry and Trade on July 9, EVN Chairman Duong Quang Thanh said the increase in electricity output over the past years did not catch up with the growth of demand.  

According to Thanh, electricity generation capacity was raised by 3,000 MW in the past period while demand grew by 4,000-5,000 MW.

The group has reported the problem to the Ministry of Industry and Trade and suggested several solutions, including raising oil-fuelled electricity output to ensure supply in 2019 and 2020, he said, adding that it will put high pressure on the group’s financial capacity but there is no other more feasible choice.  

As from 2020 and beyond, the group is negotiating the purchase of electricity from regional countries, especially from Laos, and investors of solar power plants. 

The EVN urged the Ministry of Industry and Trade to early issue a price framework to facilitate power purchase negotiations with Laos. 

The group also proposed buying more electricity from China, at about 3-4 billion kWh from the present level of 1.2-1.5 billion kWh. 

Minister of Industry and Trade Tran Tuan Anh said the ministry will accelerate the development of the price framework for electricity purchase from Laos. 

He also acknowledged the difficulties facing the power sector. At the same time, he urged the sector to continue working on its outstanding issues such as completing the competitive electricity market, the electricity generation market and restructuring enterprises in the sector. 

The minister said the power sector should work to diversify sources of energy supply, ensure the energy system safety and improve energy use efficiency towards the overall goal of meeting energy demand for national socio-economic development. 

According to reports at the conference, the electricity sector posted a 10.4 percent growth in the first half of this year, generating an estimated 99.68 billion kWh of electricity, up 10.3 percent year on year, while commercial electricity was estimated at 91.48 billion kWh.

Forestry posts highest trade surplus among agricultural sectors

Forestry posted the highest trade surplus, at 3.23 billion USD, amongst agricultural sectors in the first half of 2018, according to the Vietnam Administration of Forestry (VNForest).

VNForest also reported that more than 4.33 billion USD worth of forestry products were shipped abroad between January and June, up 12.7 percent year-on-year.

Deputy Minister of Agriculture and Rural Development Ha Cong Tuan said the forestry sector has sustained the growth achievements set in previous years, adding that VNForest looks likely to maintain this trend to obtain this year’s targets.

The country has set targets of 9 billion USD in forestry exports this year, an increase of 6-6.5 percent in forestry production value, and the forest coverage rate of 41.65 percent in 2018.

Tuan said the wood and forestry processing industry is developing strongly. Vietnamese wood products have been exported to over 100 countries and territories with major markets being the US, Europe, Japan, the Republic of Korea, and China.

He noted how the forestry sector has played an active role in negotiating with other countries, especially on timber origin, to remove obstacles from the trading of wood and wood products with such markets as Laos, Cambodia, the EU, China, the Republic of Korea, and Australia. 

It has also actively updated businesses about legal changes regarding legal timber exploitation and trading, as well as wood and forestry markets around the globe, the official said.

He added from now to the end of 2018, VNForest will continue to promote the official signing of the EU-Vietnam Voluntary Partnership Agreement on Forest Law Enforcement, Governance, and Trade. 

It will also be more active in cooperation activities with foreign partners and fulfil all obligations as a member country of both the Convention on International Trade in Endangered Species of Wild Fauna and Flora and the ASEAN Wildlife Enforcement Network. 

European firms optimistic about Vietnam’s business environment

European firms continued to be optimistic about the business environment in Vietnam, according to the EuroCham’s latest Business Climate Index (BCI).

Accordingly, the BCI for the first quarter of 2018 is 78 points, up 1 point from the previous quarterly survey.

However, the percentage of respondents rating the business situation as excellent dropped by nearly 10 percent, with an increase of 7 percent in respondents describing the situation as good. Negative responses were at almost the same level as in Q4 of 2017.

More respondents showed their confidence of a stable and continuously improving macroeconomic scenario in Vietnam with a 9 percent increase, while those expecting no change in the next quarter increased by nearly 10 percent.

The survey showed that inflation was not a major concern for EuroCham members, with 84 percent believing it will have either no or minor impact.

Regarding headcount, the number of businesses expecting to maintain the current size of their workforce remained at 40 percent, while 12 percent will significantly increase their workforce. Responses indicating intention to reduce headcount a little bit accounted for 5 percent compared to 10 percent in the previous quarter.

Meanwhile, 45 percent of the respondents said they intend to maintain their level of investment, a 9 percent rise.

EuroCham Co-Chairman Nicolas Audier said that the BCI survey results for Q1, 2018 continued to show positive expectations from EuroCham members toward Vietnam, albeit not at the same levels of optimism as in 2016.

“EuroCham hopes that this interest inspires the Vietnamese Government to improve the business environment further, particularly regarding the changes to the legal framework that will enable Vietnam to fulfil its commitments under the EU-Vietnam Free Trade Agreement, expected to come into force later this year,” he said.

Audier noted that even though the BCI score is very positive (78 out of 100), there is still quite some legal and regulatory work to do in Vietnam.

He added that EuroCham is confident that current hurdles to liberalisation will be surpassed and the next survey will again reflect an excellent outlook from the perspective of the European and Europe-related business community in Vietnam.

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