BUSINESS IN BRIEF 28/2

Central bank governor pledges to cut rates to boost business

State Bank of Vietnam (SBV) Governor Nguyen Van Binh has said the central bank will cut rates on medium and long-term loans by 1-1.5% as a measure to help businesses.

The governor made the pledge during a meeting on February 26 with the Association of Young Vietnamese Entrepreneurs, adding that the SBV would implement a range of credit policies to remove obstacles to business activities.

Binh hailed young business people for their pioneering role in economic development and their efforts to overcome difficulties to enhance competitiveness and expand markets.

The governor said that the private sector played an increasingly important role and urged them to continue innovating so that the Vietnamese economy would not lag behind.

He added that with feasible business plans, enterprises will get easier access to bank loans.

President of the Association of Vietnamese Young Entrepreneurs Bui Van Quan said he was impressed with the central bank’s monetary policy which helped stabilise the economy and create a favourable environment for business activities.

Banks pay strong salaries in good year

Many bank workers have done well after a relatively good year for Vietnam's banks, with employee incomes remaining strong for 2014, financial reports show.

Vietnam Bank for Industry and Trade (VietinBank) tops the list for average monthly payment for its staff, at VND20m in 2014, a slight decline of 0.3 percent on the previous year. VietinBank's total payroll of 19,787 staff was VND4.5 trn.

Individual incomes vary, with senior management earning hundreds of millions of VND a month, while lower staff earn far less, depending on their duties and responsibilities.

The Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) spent over VND3trn on payroll for its 13,643 staff last year, for an average of VND18.9m a month.

The Military Commercial Joint- Stock Bank (MB) paid staff a monthly average of VND17.73m, for a total of VND1.28trn on 6,507 staff.

Vietnam Export Import Commercial Joint Stock Bank (Eximbank) paid its staff an average VND17.5m, while Saigon-Hanoi Commercial Joint Stock Bank (SHB) paid its staff VND17.39m. Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) paid VND17.2m and Asia Commercial Bank (ACB) paid a monthly average of VND15.5m last year.

The Vietnam banking sector reported lower bad debts and higher profit.

Saigon Hi-Tech Park aims to ramp up localization rate

The management board of Saigon Hi-Tech Park yesterday said that they would improve localization rate to 25 percent in products made by Foreign Direct Investment (FDI) enterprises in the park this year.

The park has also set a target to increase the rate to 40 percent by 2020.

At present, the park’s export turnover by FDI companies reaches billions of U.S. dollars every year. However the localization rate in their products accounts for only 20 percent, the rest 80 percent materials have been imported.

Of these, mechanical engineering field has to import most components with the annually total import value approximating US$30 billion.

Electricity and electronics field has a bit higher localization rate of 20-30 percent. Still, local businesses have just supplied low value materials such as packing, machine frames and shells.

The localization rate is very low in hi-tech products. Most materials and components have been imported resulting in low added value of the products--about 15-17 percent.

The park’s management board said they would promote activities to supply high quality human resources, assist businesses in technology transfer, create stable business environment and policies, and help bring together Vietnamese and FDI firms.

For higher localization rate, the Government should give businesses with assistances in taxes, land rent and technical infrastructures, and credit incentives. Local businesses should take the initiative in raising the rate.

Garment, textile exports grow 1.2 percent in Jan

Vietnam Textile and Apparel Association yesterday said that January garment and textile export turnover grew 1.2 percent over the same month last year to reach US$1.9 billion.

Many businesses have got orders to produce until the end of the first quarter this year and even the second quarter to some, it said. The production output of garment and textile products such as fabric and clothes have been on the rise compared to the same period last year.

However, 60 percent of the export turnover has been undertaken by Foreign Direct Investment (FDI) companies, Vietnamese firms have occupied only 40 percent.

Mr. Le Quang Hung, chairman of Saigon Garment Manufacturing Trading Joint Stock Company, said that FDI companies held US$14 billion of the US$21 billion export turnover in 2014.

Only US$6 billion went to Vietnamese firms. Of these 80 percent came from processed goods, 20 percent was fully made by local companies and exported under FOB (Free on Board) term, meaning Vietnam just earned only US$1.2 billion.

Similarly FDI firms have also been the main exporters of leather and footwear products. This field posted an export turnover of US$1.05 billion in January, up 23.2 percent over a previous year.

Leather shoes output has reached 24 million pairs so far, an increase of 19.8 percent over the same period last year.

Most domestic companies have mainly done outwork in this field.

Tet purchasing power highly increases

According to a report by the Ministry of Finance, purchasing power during Tet holidays increased 15-20 percent in urban and 15-18 percent in rural areas over normal.

Prices have been kept stable thanks to the market stabilization program implemented in 38 provinces and cities nationwide. Goods supply was sufficient to meet the growing demand during the holidays and Vietnamese goods predominated over import items in the market.

After Tet will be festive time, possibly accelerating travel and food consumption demand. Therefore the ministry said that authorized agencies should keep a close eye on supply and demand to prevent goods shortage and price surge.

They should step up inspection over price law conformation especially to tourist and parking fees. Train and bus ticket speculation will be strictly handled.

85 percent of businesses back to work after Tet

Eighty five percent of businesses have resumed operation after Tet holiday break and 93 percent of holidaymakers have returned to work, reported Ho Chi Minh City Export Processing and Industrial Zones Authority at a meeting to review the city’s socioeconomic conditions this year on Thursday.

Director of the Department of Planning and Investment Thai Van Re reported that total retail sales of goods and services were estimated at VND52,623 billion (US$2.46 billion) in February, down 4.2 percent over January but up 31 percent from a year ago.

Insufficient statistics showed that over 3,000 local businesses have been licensed to establish as of February 15 with a total registered capital of nearly VND18.3 trillion. It was an increase of 58 percent in quantity and 34.7 percent in capital over the same period last year.

Over 6,600 enterprises supplemented an extra of VND21,700 billion investment capital, taking total registered and additional capital to VND40 trillion (US$1.87 billion), up 50 percent over the same period last year.

HCMC has licensed 41 Foreign Direct Investment (FDI) projects with a total registered capital of US$421.7 million as of February 15, a year on year increase 5.1 percent in volume and 180 percent in capital. In addition, 20 projects added investment capital by US$84.6 million.

After assessing socioeconomic conditions in the first two months this year, representative from the HCMC Institute for Development Studies proposed the city People’s Committee to start resolving difficulties in capital, spaces and technology innovation for businesses.

The committee should also guide businesses to access mechanisms and policies from programs such as supply-demand and businesses-banks connectivity, demand stimulation and price subsidization, the institute said.

Chairman Quan instructed authorized agencies to start boosting production and trading and not to use working time and company cars for ceremonial offerings and festivals.

These agencies have also been ordered to create best conditions for FDI attraction and focus on solving issues from FDI procedures, striving to obtain the target for US$3.2 billion set for this year.

Viglacera begins construction on industrial park in Phu Tho

The State-owned glass and construction ceramic corporation (Viglacera) on February 26 began work on the construction of the Phu Ha Industrial Park in the northern province of Phu Tho.

Covering an area of 350 ha, the industrial park has a total investment of VND1,730 billion ($82 million).

Major industries at the industrial park include electronic devices, high-quality building materials, food and beverage, and mechanical products.

It is expected to attract a number of domestic and foreign investors thanks to its advantageous location and lower rents compared to other industrial parks in the region.

Also on the occasion, two manufacturers were awarded licences to build plants in the complex. The two plants will create some 3,300 jobs.

Ministries monitor local fuel prices

The ministries of industry and trade, and finance on Tuesday released a document requiring key fuel dealers to keep retail prices of fuel stable.

The ministries decided the maximum retail prices at VND15,686 (US$0.75) per litre for RON 92 gasoline, VND15,356 ($0.73) per litre for biofuel E5 gasoline, VND15,183 (72 cents) per litre for diesel 0.05S, VND15,623 (74 cents) per litre for kerosene - and VND11,861 (56 cents) per kilogramme for 180CST 3.5S mazut.

The maximum price was released in order to stabilise the country's macro-economy and basic goods in the market, as well customer's comsumption demand after the Lunar New Year (Tet) holiday.

The price of E5 biofuel, which is VND320 per litre lower than RON 92 petrol, is expected to boost consumption of the biofuel.

Prime Minister Nguyen Tan Dung, at a recent meeting on fuel prices, agreed to apply a petrol-price stabilisation mechanism to E5, pushing its price lower by VND300-500 compared with RON 92.

The move is also aimed at encouraging the consumption of the biofuel.

The Ministry of Finance will also report to the Government, National Assembly and the National Assembly Standing Committee on the environment protection tax imposed on mineral fuel and biofuels, which is expected to boost consumption of the E5 biofuel.

Since the end of 2014, the E5 biofuel has been sold in seven cities and provinces, including Ha Noi, HCM City, Hai Phong, Da Nang, Can Tho, Quang Ngai and Ba Ria-Vung Tau.

The biofuel is expected to be used widely nationwide by the end of this year. Studies show that the E5 produced in Viet Nam can improve motor power and also lessen the emission of hydrocarbons and carbon monoxide.

According to some fuel enterprises, the application of the gasoline stability mechanism to E5 is far less than that of RON 92 and will make the biofuel more competitive, boosting its consumption in the future.

Tran Dac Xuan, director of Petrolimex Ha Noi, said the output of E5 sold at its 12 stores in Ha Noi is stable, about 25,000 to 26,000 litres per day on average. However, its market share is still lower than others, he stated.

Lower prices of the biofuel will also garner more interest among consumers, thereby stimulating consumption.

However, preferential policies from the State are needed to support enterprises producing the biofuel, Xuan added.

Tolls collected on wrong road

It may seem self-evident that a toll station should collect money on the road it's financing. But that isn't what's happening on the highway to Noi Bai Airport.

Tien Phong (Vanguard) newspaper revealed yesterday in an article that at least one company is incorrectly collecting tolls on a Government-funded road, instead of where it should be – on the privately funded road the fees are financing.

In response to complaints from the public about having to pay fees on the wrong roads, the Ministry of Finance is working on amending a circular to ensure that toll stations are constructed in the correct areas. It would also move toll stations that are too close together further apart and mandate the installation of stations that haven't been set up yet.

Tien Phong mentioned an example in Ha Noi: The toll station on the road running from the southern end of Thang Long Bridge to Noi Bai Airport is collecting fees for a by-pass 30 km away in Vinh Yen in Vinh Phuc Province.

The Ministry of Transport urged the Government several times to remove the Thang Long Bridge-Noi Bai Airport toll station, but the company always objected.

The VND616 billion (US$28.8 million) bypass was constructed by Vietracimex 8 under a contract with the Directorate for Roads of Viet Nam.  

Vietracimex 8 is entitled to collect tolls for nearly 17 years. It has done so for four years so far, meaning that it will continue for another 12 years.

Nguyen Danh Huy, director of the Ministry of Transport's Board for Public-Private Partnership Projects, said only one station is incorrectly collecting tolls: The Thang Long Bridge-Noi Bai Airport one.

Huy said that in 2011, considering the State budget's constraints, his ministry and other concerned agencies decided to use private investments to build the Vinh Yen bypass. The newly-built road didn't get much use, so the ministry decided to set up the roll station somewhere more profitable. He said the Government hadn't stipulated that toll stations needed to be built on the same road – or that they couldn't be built on Government-funded roads.

"Because the Thang Long Bridge-Noi Bai Airport road is Government-funded, this means the toll station was placed there wrongly and should be removed now," Huy said. "Toll stations on other Government-financed roads have been eliminated. Keeping this toll station intact will make people feel cheated."

He also said that his ministry has more recently stuck to the policy of imposing tolls on the correct road.

"The Minister of Transport has said that collecting tolls outside the project area satisfies businesses, but disappoints people," Huy said.

Construction material market grows

With a wide range of models, good quality and reasonable prices, locally made construction materials like tiles and ashlar bricks are increasingly capturing the domestic market, according to traders.

Nguyen Thi Hai Yen, owner of a construction materials shop in HCM City's Binh Tan District, said instead of preferring cheap Chinese goods like they used to, customers now choose to buy local tiles and ashlar bricks.

Tiles at moderate prices supplied by Dong Tam Group, Thanh Thanh Joint Stock Company, and Vitaly Joint Stock Company are selling very well, she said.

Many other shop owners in Districts 11, Tan Binh, and Thu Duc said bricks and ashlar paving stones have been bestsellers in recent months as people renovate their houses for Tet (the Lunar New Year), adding that the majority of customers opt for local products.

Many local brick producers have reasonable sales policies in addition to supplying quality products in a range of models.

Their prices are comparable to that of Chinese products, and this helps boost sales of Vietnamese products, traders said.

Demand for paints has also shop up in recent times, but customers tend to choose products they need and can afford, whether locally made or foreign, the traders said.

Ho Duy, owner of a paint store in Go Vap District, said Maxilite and Jotun brands are the most popular, followed by Nippon, Expo, and Dulux.

Paints made by local companies at cheaper prices are also in demand, he said.

Thanh Xuan, a resident of District 11, said she used locally made ashlar tiles for her two apartments due to their good quality and reasonable prices. Chinese tiles look good but fade very quickly, she said.

As for paint, she chose Nippon for the apartment she lives in and a local paint for the leased one.

Since the leased apartment needs to be repainted every time there is a new tenant, it makes no sense to use expensive paints, she explained, adding that her house just needs to be painted every four or five years because she uses expensive paints.

According to cement manufacturers, consumption of cement, especially white cement, has shop up since the last quarter.

Besides the main construction materials, all kinds of products used for house repair, such as resin, flooring, plaster ceiling, wallboard, and mosquito nets, also are in demand.

Traders said demand for construction materials usually spikes two months before Tet when developers speed up construction of housing projects and people renovate their houses to welcome the New Year.

Banks pocket profits from personal loans

Hoang Ngoc Hoa in HCM City's Tan Binh District needed money to buy a new house so she used the overdraft service of a commercial bank near her home, using her bank card to access a loan.

Hoa, however, was surprised to discover that she was required to pay an interest rate of up to 25 per cent for the loan.

Like Hoa, many other bank customers in HCM City have experienced the same sticker shock.

Many commercial banks such as Sacombank and DongABank are applying an interest rate of 24-25 per cent to credit card users who are unable to pay back loans within 45 days.

The lenders said that they had to hike the rates for such loans because of the high risks incurred by offering this consumer credit service.

But commercial banks have benefited a great deal from these small business loans, which are mainly personal loans.

Independent market observers have acknowledged this, saying that most local banks now were offering loans with interest rates of between 6 and 7 per cent per year to enterprises.

But they were applying interest rates of between 12 and 14 per cent to consumer credit, most of them small business loans, which are often called microloans.

People who use credit cards have to pay interest rates of up to 20 or 25 per cent if they use the banks' overdraft service.

An overdraft occurs when money is withdrawn from a bank account and the available balance has gone below zero.

In addition, some banks are ready to offer personal loans with low interest rates, but those rates are applied for only the first few months of the credit contracts.

For instance, TPBank is offering loans with an interest rate of 6 per cent per year for the first six months to people who want to buy autos after the fund is disbursed.

OCB offers an interest rate of only 5.5 or 6 per cent for personal loans, but only for the first three months after disbursement.

Some financial companies have also offered non-collateral personal loans with simple procedures, but their interest rates are very high.

Meanwhile, lenders have decreased deposit interest rates, to only 7 or 5.5 per cent per year.

As a result, lenders have made big profits because of this wide gap between the interest rate of small loans and deposit interest rates.

Nguyen Hoang Minh, deputy director of the State Bank of Viet Nam's branch in HCM City, admitted that the lending interest rate of 13 per cent and upwards was applied mostly to personal or small loans.

Because of this, the banks' profit margin from small loans had significantly contributed to their total outstanding credit.

At Sacombank, for instance, the bank's pre-tax profit in 2014 was VND3 trillion (US$141.2 million), of which 50 per cent was contributed by personal-loan customers, including small traders.

Other credit organisations have also benefited. OCB's profit from personal loans, for example, made up 40 or 45 per cent of the bank's total profit.

A leader of Sacombank said the difference in the bank's lending and deposit interest rates was 4 per cent on average, but the profit margin from personal loans was much higher than this rate.

Farmers profit from mai tree service

Services to take care of mai (ochna) trees after Tet have increased in HCM City, particularly among families that have little time to look after the valuable plants.

Most ochna gardens in HCM City's districts 12, Hoc Mon and Thu Duc are now offering ochna care services.

Ut Cao, an owner of an ochna garden in Hiep Binh Chanh Ward in Thu Duc District said demand for the service had risen each year, and the fee had also increased.

This year, the fee jumped by 15-20 per cent compared to last year.

The gardeners said the fee increase was due to high labour costs and expenses for fertiliser and pesticides.

Gardeners who take care of trees valued at VND500,000 (US$23.8) take 10-30 per cent of the tree value for their services. An ochna tree worth  

VND40-50 million ($1,904 - 2,380) will have a fee of VND15-20 million ($714-952).

According to gardeners, house owners should send ochna trees soon, and not wait until the end of the first month of the lunar calendar. The trees could get weak and die or contract disease.

The gardeners said house owners should water the trees and then after three to four days check the soil. It is important not to overwater the plants, they said.

The gardeners said owners should not pour tea water or ice water on the plant because this could kill them or prevent the tree from blossoming next year.

In southern Viet Nam, the ochna tree is the traditional symbol of Tet, while in the north the peach blossom tree represents these traditional Tet holidays.

VEFAC to sell 16 million shares in IPO

The Vietnam Exhibition Fair Centre Co Ltd (VEFAC) will auction nearly 16.27 million shares during its initial public offering (IPO) on March 20, the Ha Noi Stock Exchange has announced.

According to the local press, Prime Minister Nguyen Tan Dung has directed the company to retain the current State equity and issue more shares to increase its charter capital, as part of a plan to privatise the firm.

VEFAC's total equity is expected to surge from VND166.6 billion (US$7.93 million) to nearly VND1.67 trillion ($79.52 million) after the equitisation.

Of the total equity, 90 per cent will be offered to the public, with 80 per cent reserved for a strategic investor, possibly a leading property developer in Viet Nam.

Within three years of its equitisation, the company will spend the current equity on business activities related to exhibitions and fairs. It also plans to use the additional amount for new property investments.

The new investments are being projected by the Government as part of a national exhibition and fair centre. They include building an "exhibition city" Nhat Tan–Noi Bai in Ha Noi's Dong Anh District, and a 68,380-square-metre trade, services and cultural complex, named Giang Vo, in Ba Dinh District.

Me Tri, a trade, tourism and culture park will also be constructed in the south-west of the capital and will cover an area of about 126ha.

VEFAC Deputy General Director Nguyen Danh Thuan stated on the company's website that the firm is recruiting more employees to facilitate the implementation of these projects.

Dong Nai exports $900m worth of pepper

Pepper exports from Dong Nai Province had record-high earnings of US$12,200 per tonne in the first two months of the year, according to the provincial Statistics Office.

Pepper exports reached nearly 900 tonnes with total turnover of over $11 million in the first two months.

The province saw an increase of 54 per cent in volume and 150 per cent in value compared to the same period last year.

The province's biggest pepper export markets are India, the US and several Latin American countries.

This year, pepper farmers in Dong Nai had a bumper crop with average productivity of at least five to six tonnes per ha.

Many local farmers in Thanh Binh commune in Trang Bom District said that productivity levels had doubled compared to the last crop.

Small traders bought pepper at gardens for VND200,000 ($9.5) per kilo. With such prices, farmers can earn a profit of VND600-700 million ($28,500-33,300) per ha.

VN properties purchased by hotel firm Centara

Centara Beach Resort and Spa Phu Quoc is the latest Vietnamese property to be acquired by Thailand's Centara Hotels and Resorts.

The hotel group signed a management contract with Centara Beach Resort's owners, Binh Le Xuan Ltd Companies and Commercial Services.

The four-star resort is Centara's second property on the idyllic Phu Quoc Island, and is seen as a desirable complement to the other properties in Centara's Vietnamese portfolio.

Centara Beach Resort and Spa Phu Quoc is located on the main coast of Phu Quoc Island, in Viet Nam's Kien Giang Province, and is just a 10-minute drive from Phu Quoc International Airport, which receives flights from Tan Son Nhat Airport and Noi Bai Airport.

Local firm to ship cars to other SE Asian countries

The Truong Hai Automobile Company (Thaco) plans to export locally manufactured vehicles to Myanmar, Cambodia and Laos as part of its strategy this year.

Director of Thaco's sales department Mai Phuoc Nghe told Biz Hub that buses, dump trucks and light trucks are major products for the new export markets.

"The sale of locally manufactured automobiles in the future is a possibility following a market survey over the past few years. We shipped the first batch of Mazda cars to Laos in 2013 to assess the market," Nghe said.

He pointed out that the new market will boost the sales of bus models from 1,300 units in 2014 to 1,800 buses this year.

Trans-Pacific trade deal close to sign-off

When the leaders of 12 nations involved in the Trans-Pacific Partnership (TPP) regional trade talks met on the sidelines of the Asia Pacific  

Economic Cooperation summit in Beijing late last year they released a statement saying the conclusion of the negotiations is near.

“With the end coming into focus, we have instructed our ministers and negotiators to make concluding this agreement a top priority.”

The Trans-Pacific Partnership will create one market of more than 792 million people. The countries involved are the United States, Vietnam,  

Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, and Peru, Singapore.

In order to best position themselves for the revolutionary changes that the TPP will bring to Vietnam, local businesses should be proactive and lay out a dynamic business strategy for penetrating foreign markets, said Dr. Vo Tri Thanh, deputy director of Central Institute for Economic Management (CIEM).

Dr. Thanh added that businesses will face stiff international competition in both the global and domestic markets for the goods and services they sell in terms of quality, timeliness and price – therefore it is important to devise a comprehensive plan to increase competitiveness in these three areas.

Those businesses that think competition is all about price and fail to address the quality and timeliness issues will quickly find themselves closing their doors or filing for bankruptcy protection. Another aspect that the strategy should encompass is compliance with technical regulations set by governments in foreign markets.

Moreover, both the business community and government should stand side by side in facing the challenges of integration brought about by the TPP. Dr. Thanh said adding that a coordinated effort of working together will allow for improved access to foreign markets.

In 2015, apart from the establishment of the ASEAN Economic Community (AEC), Vietnam is expected to sign six free trade agreements – the TPP, Regional Comprehensive Economic Partnership (RCEP), Vietnam-EU, Vietnam-RoK, Vietnam-Custom Union of Russia, Belarus and Kazakhstan.

The AEC will create a market of 600 million consumers and Vietnam will enjoy export tariff reductions on substantially all of its exports to other member nations. However, to secure a firm foothold in the market, businesses, especially big enterprises should cooperate and strengthen connectivity.

However, leading economists have cautioned that both Vietnamese citizens and the business community in general do not have a clear and sufficient understanding of exactly what integration is and how it will affect them or the nation.

They estimate that as many as 60% to 65% of the business community do not fully comprehend ASEAN and are not adequately preparing, which creates a national dilemma as far too many businesses fail to appreciate the importance and impact of what is set to transpire later this year.

LPG exports to Cambodia soar

Liquefied Petroleum Gas (LPG) exports to Cambodia have nearly doubled in the first months of 2015, according to PetroVietnam Gas Corporation (PVGas).

From 2010 to 2013, LPG exports to Cambodia ran between 6,000 and 8,000 tonnes per month. With exports during the first two months of 2015 around 10,000-12,000 tonnes per month, Cambodia has become a highly promising market for LPG exports.

PVGas Trading, a subsidiary of PVGas, is the biggest LPG supplier to Cambodia with over 50 percent market share.

Local wood exports projected to grow

Vietnam expects the export value for its wooden products to jump to 7 billion USD this year, according to the Vietnam Wood and Forestry Product Association.

The association said the export value will be higher than the 6.23 billion USD reported last year, because global demand for timber and wooden products is predicted to jump this year, while trade agreements that are expected to be signed this year will improve the export prospects for the domestic wooden industry, the Voice of Vietnam reported.

However, the industry will face challenges from trade agreements due to the high demand in the origin certificates for wood, while Vietnam must buy wood from many countries and not all countries possess the origin certificates, the association stated.

Nguyen Ton Quyen, the association's Chairman, said wooden product exporters have invested in new products that have high demand in the world market, such as wooden planks and artificial board, to promote exports this year.

According to the Ministry of Agriculture and Rural Development (MARD), Vietnam saw a decline of 8.3 percent during the first month of this year to 494 million USD, against the same period of last year.

Last year, the country reported a year-on-year surge of 11.1 percent in export value of wood and forest products to 6.23 billion USD.

The United States, Japan and China were the three largest markets for Vietnamese timber last year, accounting for 65.13 percent of the national total export value of timber and forest products.

With exports pegged at 6.23 billion USD last year, Vietnam was counted among the 10 largest exporters in the world, but accounted for a mere 2.68 percent of the total global exports, and can therefore still increase its market share, the association pointed out.

Kuwait looks to increase investments in Vietnam

With its existing “Look East” policy, Kuwait will pour more investments into Vietnam in the coming years, said Omar Al-Qenaei, Kuwaiti Consul General in Ho Chi Minh City.

At the February 26 ceremony marking the 54th National Day and the 24th anniversary of the Liberation Day of Kuwait, Omar Al-Qenael reviewed the bilateral ties between Vietnam and his country in recent years, saying that this sees increased developments in all fields.

Vice Chairman of the municipal People’s Committee Le Thanh Liem, in his speech, congratulated the State of Kuwait and its people on their achievements, affirming that the municipal authority is willing to assist Kuwaiti businesses in their operations in Vietnam.

He said the successful organisation of a workshop in the city last December to provide Vietnamese firms with necessary information on market opportunities in Kuwait helped Vietnamese firms and investors make deeper inroads into the potential market.

The launch of an Arabic training programme in University of Social Sciences and Humanities – Vietnam National University, Ho Chi Minh City with the support of the Kuwaiti Consulate General has promoted cultural exchange between Vietnam and the Arab world, Liem added.

Kuwait and Vietnam established diplomatic relations in 1976.

Two-way trade between the two nations hit around 691 million USD in 2014, with Vietnam’s exports to Kuwait doubling that of 2013.

Vietnam mainly shipped farm and aquatic products, vegetables and fruits, green tea, products from grains to Kuwait while importing fuel and industrial products from this market.

Marketing in Vietnam - It’s changing

The government has a long-term economic plan for Vietnam – and an improved international and domestic marketing campaign is at the centre of it, Deputy Minister of Industry and Trade Do Thang Hai recently affirmed.

At the conference, Hai added that the economic success the country has had over the past few years has largely been due to the support the government has provided Vietnamese businesses as they trade around the globe.

It has also been the result of the welcome the government has extended to those who invest in the nation’s future.

However it is time to pick up the pace of support for small and medium sized companies looking to export and to more broadly implement a marketing campaign aimed at increasing both international and domestic demand, Hai concluded.

Deputy Director of the Trade Promotion Department under the Ministry of Industry and Trade (MoIT) Ta Hoang Linh echoed Hai’s views underscoring the point that it is time for a refreshed advertising campaign.

The time for complacency is over and there needs to be a unified and strengthened determination to deliver Vietnamese goods to both foreign and domestic markets along with stricter oversight of relevant governmental agencies activities.

Too many agencies have not followed the guidance from the MoIT and this has hampered the efficiency and effectiveness of implementing the programme.

Recently, a large-scale campaign kicked off in rural areas to encourage Vietnamese to consume Made-in-Vietnam products. However, the

campaign has not achieved remarkable success due to poor organizational work, Linh said.

He pointed out a number of shortcomings the programme has faced, such as an overreliance on supply sources, ineffective dissemination of information and to many companies producing the same products.

“Four markets in the same region sell the same products. And there’s no innovation or difference between the product last year and this year,” Linh elaborated.

Moreover, most businesses participating in the programme only focused on price competition for their products rather than developing a marketing campaign to differentiate their product from the others or brand it.

A few officials from the central region provincial Departments for Industry and Trade in turn raised concern over a lack of a close link between local government, producers and consumers to successfully organize trade fairs, which are often in small scale (around 300 pavilions each).

They also shared their opinions on capacity building for local producers, especially in marketing skills. Most businesses in the central region are in small and medium sizes, so they need State subsidies to take part in trade fairs and implement marketing programme.

Bui Huy Son, head of the MoIT’s Trade Promotion Department, said the Finance Ministry’s Circular 88 provides more open and practical mechanisms and regulations on the organization of the trade programme.

For example, businesses receive more support from the government to launch a ‘Vietnamese people purchasing Vietnamese goods’ campaign in island and coastal areas, but this fact has not been fully disseminated.

This year’s trade marketing programme will receive VND100 billion in aid, which is VND30 billion higher than last year’s figure, Son revealed.

He laid emphasis on creating a closer link between businesses, trade counsellors and managers of trade centres in foreign countries to help made-in-Vietnam products penetrate overseas markets.

HCM City Metro invites comment on proposed rail-car design

Investors in HCM City's metro project have put on show one of the rail cars they propose will serve the line connecting Ben Thanh Market and Suoi Tien.

Bui Xuan Cuong, head of the HCM City Urban Railway Management Board, said it wanted to attract comment from the public over the next three months before making any final decision on the rail car system to be adopted for the line.

During the first phase, the train will have three cars, with capacity of 300 passengers each, and it will travel at 110km/h on elevated railway sections, and 80km/h underground.

The metro line is 19.7 km long, 17.1 km of that above ground with 11 stations and a 2.6 km underground with three stations. The project is estimated to cost USD2.4bn and is due to go into operation in 2020.

The proposed car design features four doors to ease boarding congestion during rush hours, and fibre–reinforced plastic seats along the sides of the car will allow more standing room, with features to assist disabled passengers.

 

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

pepper export, IPO, Vinatex
 
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