BUSNESS IN BRIEF 2/5

Vietnam strives to improve SOE equitisation efficiency

Vietnam is grappling with inefficiencies as it works towards the equitisation of State-owned enterprises (SOEs).

Vietnam has carried out continual reforms over the past two decades, reducing the number of SOEs from more than 12,000 in the 1990’s to the current 5,600, only 800 of which are completely owned by the State.

However, the proportion of equitised funds at privatised firms is still limited, even less than 5 percent at some major groups.

Minister of Planning and Investment Bui Quang Vinh said since 95 percent of the stake in those instances are owned by the State, their operations and administration remain unchanged despite their privatisation.

Director of the Central Institute for Economic Management Nguyen Dinh Cung said the critical question is not the number of equitised SOEs but rather how to improve the management and use of the State capital at those firms as well as the efficiency of their administration, production, and business activities, he added.

Minister Vinh said the SOE privatisation will not be efficient unless the presence of shareholders is increased and they are capable of changing the business administration.

Many economists pointed to an excess of objectives set for SOEs as an obstacle to their performance. Meanwhile, almost all SOEs are operating in various fields and have complicated finances, demanding too much time to prepare and call for major investors.

To enhance equitisation, the Ministry of Finance plans to deploy an array of measures such as pushing SOE equitisation according to sectors regardless of their management agencies and turning enterprises unqualified for independent business into subsidiaries of economic groups or corporations.

Director of the Vietnam Institute for Economics Tran Dinh Thien underscored the necessity of adjusting equitisation targets and pace to focus on the ultimate goal of improving business performance, thus promoting the economy’s competitiveness and restructuring.

SOEs currently contribute 85 percent of Vietnam’s electricity and oil and gas output, 90 percent of telecommunication services, and 56 percent of financial and credit services.

The SOE equitisation is part of efforts of SOE restructuring under the economic restructuring scheme stated in the National Assembly’s Resolution No.10/2011/QH13 on the socio-economic development plan for 2011 to 2015. Public investment and the banking system are also undergoing restructuring.

Positive signs for Vietnam litchi farmers

The Plant Protection Department (PPD),under the Ministry of Agriculture and Rural Development (MARD) has announced that Australia has become the newest market for Vietnam’s fresh litchi fruit.

This is good news and a welcomed  opportunity for farmers in the northern provinces this year.

Under the provisions of the Australian Department of Agriculture, Vietnam must satisfy requirements such as safe growing areas, good packaging facilities, as well as irradiated parasiticides and quarantine process before exporting Vietnam’s fresh litchi to Australia.

PPD Deputy Head Hoang Trung said that the PPD has requested localities, enterprises and farmers to comply with technical requirements to bring litchi fruit into Australia market.

HCM City shows off high-quality products

Around 200 local enterprises are taking part in the Vietnamese High-Quality Products Fair that opened on April 28 at the Phu Tho Indoor Stadium in Ho Chi Minh City's District 11.

The annual fair features more than 700 booths of high-quality garments and textiles, footwear, handicrafts, food, household products and electrical goods.

The fair also showcases new innovative technologies and products, and new distribution and marketing solutions.

Organised by the Business Association of High-Quality Vietnamese Goods, the fair will host a conference on the ASEAN Economic Community, a culinary competition deigned for small traders in traditional markets and a ceremony to honour 10 outstanding firms for their efforts in the ASEAN market.

The fair, which will end on May 3, is expected to welcome 300,000 to 350,000 visitors.

Low CPI spurs retail trade growth

The total revenue from retail trade and services reached approximately 48.5 billion USD during the first four months of this year, the General Statistics Office (GSO) said.

The figure represents a year-on-year rise of 8.8 percent, GSO said, adding that the increase would be 8 percent if inflation was excluded.

The total retail sales growth (inflation excluded) during the period was fairly higher than what was recorded during the four months of 2014 at 5.5 percent, four months of 2013 at 4.6 percent and four months of 2012 at 6.6 percent, GSO noted.

GSO statistician Vu Manh Ha attributed such encouraging growth to a slumping consumer price index (CPI). The average CPI growth for the first four months was 0.13 percent, compared to 0.22 percent; 0.60 percent and 0.64 percent seen during the same periods of 2014, 2013 and 2012, respectively.

From January to April, the non-State owned sector accounted for the largest share of the nation's total retail sales revenue at 85.7 percent or more than 41.57 billion USD.

Ha also predicted that the total revenue for retail trade and services was likely to increase in the coming time, owing to several upcoming and long holidays, which were expected to improve revenue earned from tourism and services.

Retailers roll out holiday deals

Supermarkets and shopping malls around the country have announced a slew of promotions to attract shoppers during the six-day holiday on the occasion of the Hung Kings anniversary, Liberation Day (April 30) and May Day (May 1).

With the long holiday this year, supermarket chain Co.opmart has stocked two times the normal quantity of products and launched promotions as it expects sales to be double that of normal days, Vo Hoang Anh, marketing director of Saigon Co.op, said.

From now until May 3 Co.opmart supermarkets and Co.opXtra hypermarkets will offer discounts of up to 50 percent on over 4,000 items and gift vouchers to 1,600 newly registered loyal customers, and organise a lucky draw with prizes of 19 free tours.

It was one of the supermarket's biggest promotions during the year since the holiday also coincided with its 19th anniversary, Anh said.

French supermarket Big C has announced two promotions until May 4 with discounts of 5-49 percent on more than 1,500 items like fresh and processed foods, foodstuffs, beverages, household appliances, clothes, and cosmetics besides attractive gifts.

Big C said it expected sales to rise sharply during the holiday and has doubled stocks compared to normal days, especially of ready-to-eat foods, fresh and processed foods, bread, vegetables, fruits and beverages, meat, and seafood.

Lotte Mart has organised a fruit festival featuring more than 30 varieties of tropical fruits, including mango, papaya, Phan Rang grapes, Long Khanh guava, Dak Lak avocado, durian, and watermelon.

Expecting demand to increase sharply before and during the holiday, the Korean supermarket has increased stocks to Lunar New Year levels and announced attractive discounts on several items like processed foods and beverages.

Many major electronics stores like Thien Hoa, Cho Lon, and Nguyen Kim are also offering big discounts on a range of products.

Tran Tan Hoang Hau, marketing director of Thien Hoa Electronics Centre, said there would be discounts of up to 50 percent on many products and interest-free hire purchase schemes.

It would be the year's biggest promotion, he added.

Vietnam’s April trade deficit down 57 percent

Vietnam spent a total 14.4 billion USD on imports in April, driving down the monthly trade deficit by 57 percent to 600 million USD.

The April import figure brings the four-month trade deficit to 2.99 billion USD, equivalent to 6 percent of exports, which was described as “alarming” by deputy head of the Ministry of Industry and Trade’s Import and Export Department, Tran Thanh Hai, during a monthly meeting in Hanoi on April 27.

Of the 13.8 billion USD worth of goods exported during the month, 9.3 billion USD (excluding crude oil) was from foreign-invested firms, up a slight 2.2 percent from March and 12.9 percent year-on-year.

During the first four months of this year, domestic businesses brought home 15 billion USD, or 30 percent of the total. The total export earnings rose 8.2 percent, lower than the 10 percent forecast, with shipments of agro-fisheries, fuels and minerals falling.

Deputy Minister of Industry and Trade Nguyen Cam Tu asked the department to ensure that the trade deficit remains within limits and told them to stimulate exports, especially rice.

On the occasion, the Vietnam Coffee – Cocoa Association asked for more preferential loans to farmers and exporters, citing that coffee output tumbled 25 percent due to an ongoing drought in the Central Highlands.

Hai also called on local authorities to offer all possible support to farmers and businesses, making it easier to boost farm produce consumption.

Vietnam accelerates efforts to reach TPP agreement

The Vietnam government is racing to conclude its coveted Trans-Pacific Partnership (TPP) trade deal by mid-summer Deputy Minister of Trade and Industry Tran Quoc Khanh recently revealed.

After five years of negotiations, the TPP is nearing conclusion, Khanh said, adding the trade deal would cover everything from reducing barriers on goods and services to strengthening intellectual property rights to introducing investor-state arbitration procedures.

Mr Khanh sees the trade deal, along with the Vietnam-EU FTA trade pact, as the economic cornerstone of the nation’s strategic global integration strategy of expanding the nation’s diplomatic and economic capabilities.

The 12-country TPP pact, which includes Canada, covers 40% of the global economy, with the US leaving the door open for China to join at a later date. It targets phasing in tariff reductions on Vietnam’s exports over an as yet undetermined number of years

If the parties to the TPP can get on the same page they will have an agreement this summer, the Deputy Minister said, providing huge opportunities for the country to immediately begin to boost exports and restructure export markets.

Cashew nut exporters bullish on US market

Cashew nut exporters in Vietnam are facing a tough time due to multiple factors that include higher input costs, shrinking sources and trade barriers exporting to foreign countries around the globe.

However, Nguyen Duc Thanh, president of the Vietnam Cashew Nut Association (Vinacas) coming off a recent fact-finding tour to the US recently announced he sees light on the horizon for the industry.

During the visit, April 14-23, Thanh said a delegation headed by Vinacas met with US businesses in New York, New Jersey, Washington and Los Angeles along with trade associations and the US Food and Drug Administration.

Much to our surprise, we discovered there are a plethora of opportunities for elevated levels of trade once the Trans-Pacific Partnership (TPP) Agreement comes into effect, Thanh stressed.

“Exporters operating Vietnam will be able to offer cashew nuts at a profitable yet more competitive price compared than India and other leading export nations due to lower wages, lower power charges and better trade policies,” he said.

Vietnam is not only a leading grower of cashew nuts but also one of largest processing centres in the world. Last year, it processes around 1.3 million tonnes of nuts, equal to 40% of the global volume.

It also supplied around 80,000 tonnes out of total 170,000 tonnes that the US consumed, so there is ample opportunity to increase exports to the US market by more than twofold to the US and other 10 nations that are a party to the pact.

Crooked bosses steal workers' wages

Hundreds of workers have lost months of wages and insurance protection after their employers disappeared, leaving them without pay or jobs, with authorities struggling to curb what is perceived to be a growing problem.

On April 17, 300 workers at Outdoor Co. in HCM City discovered their bosses had closed operations without informing them, disappeared with their wages and not paid their insurance.

The workers approached authorities to intercede, after which the owners promised to make good with unpaid wages.

But at Bach Hop Co., workers discovered the owners had disappeared owing them three-month wages, and had not paid more than VND500million worth of insurance. of insurance. Authorities had been unable to find the owners.

Nguyen Van Khai, vice chairman of the HCM City Labour Union, said the problem was growing in frequency, but the union was limited in its response because it was not a government management agency.

"With the Bach Hop Company case, we decided to pay the insurance for pregnant women so they did not lose maternity benefits. But other cases have not been solved," Khai said.

The Deputy Minister of Labour, Invalids and Social Affairs, Pham Minh Huan, said lack of clear regulations prevented agencies from protecting workers and urged local authorities help workers maintain their insurance.

The National Assembly asked authorities at all levels to protect workers left unemployed by sudden closures. Unpaid insurance amounts to VND700 billion due to dissolution and bankruptcy.

Pepper export prices soar

Vietnam has exported 56,000 tonnes of pepper during the first four months of this year, fetching US$513 million, a fall of 25% in volume but a rise of 0.5% in value against last year’s same period.

The Ministry of Agriculture and Rural Development (MARD) reported that average export prices jumped 34.6% to US$9,134 per tonne. Pepper exports to the three largest markets in the US, Singapore and India during the first quarter, accounted for 44.28% of the total volume.

Nguyen Mai Oanh, Vice President of the Vietnam Pepper Association (VPA) said pepper prices tends to surge high.

However, businesses said that decline in export volume was due to returned products, as they did not meet quality standards.

To handle the problem, the VPA asked the MARD to send groups to evaluate the current production situation at key production zones, including cultivation, harvesting and preservation, in order to devise proper solutions.

Oanh added that the MARD should provide assistance for pepper production, example developing production connectivity models or producing pepper according to GAP standards and transferring techniques, as well as technology for farmers.

MoIT pledges to address difficulties facing businesses

The Ministry of Industry and Trade will focus on resolving the difficulties of enterprises to promote production and businesses, Deputy Minister Nguyen Cam Tu, said.

"In addition, the ministry would also review reducing administrative procedures and enhancing industrial development, especially processing and manufacturing," Tu said at a press meet held in Ha Noi yesterday.

This year, the ministry was targeting an industrial index of production (IIP) of 7.8 to 7.9 per cent, along with a total export turnover of US$165 billion and trade deficit of less than 5 per cent.

Data from the ministry showed that during the first four months of the year, the country saw a deficit of $3.1 billion. The country's total export and import turnover had reached $88.4 billion by April 15, reflecting a year-on-year increase of 13.9 per cent, the General Department of Viet Nam Customs said.

Its total export turnover was $42.65 billion by April 15, up 9 per cent year-over-year, and total import turnover reached $45.76 billion, up 18.9 per cent.

It was because of this reason that the ministry asked the Import-Export Department to carefully consider the market changes to promote exports while curbing the trade deficit to less than 5 per cent. The department was especially asked to find markets for agricultural products and pay attention to potential exported items to improve its competitive ability.

Tran Minh Nhung, the deputy director of the HCM City Department of Industry and Trade, said the new regulation required businesses to export rice through middlemen, thus making them difficult to export.

Nhung also proposed easing the regulations by allowing rice exporters to associate through the Viet Nam Food and Foodstuff Association. Businesses, which have their own markets and partners, should be allowed to export without middlemen.

Hoang Ve Dung, the deputy general director of the Viet Nam Garment and Textile Group (Vinatex), suggested that the ministry should co-operate with the customs sector to facilitate e-customs clearance, and reduce the time taken for exports.

Responding to a question on whether the ministry was allowing favourable conditions for the operation of Electricity of Viet Nam (EVN), especially after the power tariff hike, which resulted in electricity bills surging last month, Deputy Minister, Tran Tuan Anh, said the decision to raise tariffs was approved by the Government and was not based on any bias towards EVN.

Dinh The Phuc, the deputy head of the Electricity Regulatory Authority of Viet Nam, said the new calculation on power tariffs had six levels.

In addition, last month had several hot days in comparison with the previous months, resulting in higher power consumption.

Deputy Minister Anh added that power output last month was estimated at 12.87 billion kilowatt-hour (kWh), showing an increase of 11 per cent over the same period last year.

Out of this, power supply to the building industry rose by 2.2 per cent; it rose 14.6 per cent for commercial activities and hotels; 13.1 per cent for household consumption and 27.4 per cent for agro-forestry and fisheries.

Exports to EU set to rise 75%

Viet Nam's exports to the European Union will rise by 75 per cent by 2020, Dr Vu Huyen Phuong from the Foreign Trade University predicted.

The surge will lead to expanded production activities, increased attraction of foreign investment and job opportunities, Phuong said at a conference in HCM City on Saturday that focused on supporting non-state entities to join the Viet Nam-EU Free Trade Agreement (EVFTA).

Phuong also held that Viet Nam's export of labour will enjoy a sharp growth, as well. Moreover, Nguyen Thi Quynh Nga from the Multi-Trade Policy Department of the Ministry of Industry and Trade noted that the EVFTA was an ambitious and comprehensive agreement on trade, services, investment and government procurement.

Apart from removing non-tariff barriers, the agreement would also settle other matters related to legal procedures, competitiveness, and intellectual property, including geographical indications. Furthermore, some experts at the conference argued that the agreement was expected to pave the way for the increase of Viet Nam's exports, as factors supporting export growth had been saturated.

However, they pointed out a number of challenges that Viet Nam might face when the agreement is signed, especially with regard to procedures to prove the origin of goods.

In addition, Vietnamese firms and farmers should work harder to compete against products imported from the EU, which require stronger market strategies, information and predictions.

Major markets import more fruit

Viet Nam shipped 1,179 tonnes of fresh fruit to the United States, Japan, South Korea and New Zealand in the first quarter of this year.

The exports consisted of 952 tonnes of dragon fruit, 147 tonnes of rambutans, 22 tonnes of longans and 57 tonnes of mangoes.

Dragon fruit was highly sought. The US bought 532 tonnes; Japan 227 tonnes; South Korea 189 tonnes; and New Zealand around 3 tonnes.

Last year, Viet Nam exported 3,662 tonnes of fruits.

Vinamilk to explore further investments abroad in 2015

Viet Nam Dairy Joint Stock Co. (Vinamilk) will continue to explore markets abroad and boost M&A activities after buying a 70 per cent stake in the U.S.-based Driftwood dairy factory.

This was revealed by Mai Kieu Lien, chairman of the management board at Vinamilk Co., during the April 27 annual general meeting of shareholders for 2015.

Accordingly, Vinamilk revealed to shareholders, its plan to spend VND4 trillion (US$187.79 million) for M&A activities, investment cooperation to expand markets and developing material sources for production during this year.

Vinamilk is currently negotiating with two partners to buy a dairy factory in Europe. However, the deal is yet to materialise so Vinamilk has not submitted it before shareholders for approval, according to Lien.

Currently, Vinamilk has invested capital in four companies, including buying a 70 per cent stake in the U.S. dairy firm, a 51 per cent stake in Cambodia's Angkor Dairy Products, a 19.3 per cent stake in New Zealand's Miraka Limited and a 15 per cent stake in Viet Nam's Asia Sai Gon Food Ingredients JS Co.

Lien said, "Vinamilk will explore multiple ways to grow, including M&A deals in foreign markets and exports. However, whatever the company does, the important thing is maintaining market share and capturing greater market share from rivals."

The company also plans on spending a lot of money on advertising and sales promotion this year, owing to new competitors that are entering the market and intend to invest a lot of money to boost market share. If Vinamilk does not invest in advertising and sale promotions, it will be unable to compete with them.

In addition, the costs for advertising and marketing must correspond with the market share that the company holds. For instance, Vinamilk's yogurt products occupy 84 per cent of market share, and the cost for advertising will be at the same rate.

Lien added the expenses for advertising and marketing were still dependent on the market situation at a certain point in time.

Le Anh Minh, a member of the management board at Vinamilk Co. said that although the company had failed to meet its revenue target to the fullest, there were still promising business signs ahead.

For instance, revenue and profit from the U.S.-based Driftwood had already fulfilled 123 per cent of the revenue target for the year.

Besides, the company's farm in Nghe An had become the first cow milk husbandry farm in Southeast Asia and the third in Asia to meet the Global G.A.P Standard. Currently, Vinamilk has strengthened investment in the cow milk farm project, which has 11,000 cows.

Although the business plan in 2014 did not meet expectations, Lien was optimistic about the business plan this year, as the company is targeting a revenue of VND38.424 trillion, aiming for a 9.9 per cent growth over last year, and an after tax profit of VND6.83 trillion, which would reflect an increase of 12.6 per cent and cash dividends of minimum 50 per cent of after tax profit.

The target is achievable, considering that during the first quarter of this year, sales at Vinamilk jumped by 13 per cent and exports increased by 70 per cent.

At the meeting, shareholders also approved a plan to issue 200 million shares to increase capital.

CIENCO subsidiaries cause severe environmental damage

The operation of three asphalt and concrete mixing stations belonging to CIENCO has been causing serious noise and air pollution to people in Van Nhan commune and Phu Minh town in Phu Xuyen district, Hanoi.

Two of the three stations, namely 116 JSC and 123 Construction JSC, are subsidiaries of Civil Engineering Construction Corporation No.1-Joint Stock Company (CIENCO 1) while 471 JSC is CIENCO 4’s subsidiary.

Local people petitioned the Phu Xuyen District People’s Committee to put a stop to the three companies’ operations but as of now no action has been done to that effect.

Dang Quoc Tuan, a local person, said, “We are suffering from the noise and the smell of burning day and night. Especially on rainy days, the smell is compressed on the village by air pressure and pervades our homes, making a lot of people unable to breathe. Some were even forced to migrate”.

The Phu Xuyen District People’s Committee organised an interdisciplinary working group to deal with this problem, according to the Natural Resources and Environment newswire.

In the course of the investigation, the authorities found that CIENCO 1 had not presented its licence for operation. The authorities asked them to vacate the premises by clearing away the machinery, equipment as well as materials before February 13, 2015.

However, the three asphalt concrete stations are still operating. Nguyen Van Canh, a land registry staff stated: “We requested them to stop their operation on multiple occassions. At present, there is no change”.

VIR attempted to get in touch with CIENCO 1 at the phone number available on its website, but there was no reply.

ALSTOM, EVN start operation of gas turbine reconditioning workshop

Alstom and state-owned Vietnam Electricity (EVN) last week officially inaugurated a gas turbine reconditioning workshop in Phu My district in the southern province of Ba Ria-Vung Tau, the first reconditioning workshop in Vietnam and the first for Alstom’s network in Asia.

The €22 million ($24 million) facility, which is part of the joint venture formed in 2012 between Alstom and EVN, employs 150 and has area of 5,500 square metres. At full capacity, it can refurbish several hundred sets of gas turbine components per year.

“Establishing this reconditioning workshop is part of a major long term investment in Vietnam and shows our commitment bringing local capabilities to this fast growing region. Having a reconditioning workshop located in the heart of Asia is instrumental for Alstom’s continued growth in the region,” said Michael Rechsteiner, senior vice president of Thermal Services at Alstom.

The joint venture was established by and between three parties: Phu My Thermal Power Company, a subsidiary of Electricity of Vietnam (EVN), Alstom Asia Pacific and Alstom Vietnam. Located in Phu My, it aims to provide reconditioning services locally to EVN customers and for export under Alstom network.

Alstom operates in power generation, power transmission and rail infrastructure. The group employs 93,000 people in around 100 countries. It had sales of over €20 billion in 2013/14.

EVN, formed in 2006, operates in electricity generation, transmission, distribution and sales. Among other partnerships between Alstom and EVN are thermal power plants, such as the Phu My gas-fired power plant, and major hydro projects such as the 2,400 MW Son La, the largest hydropower plant in Southest Asia, the 1,200 MW Lai Chau and the 520 MW Huoi Quang.

Dong Nai ranks first in FDI attraction

In the first four months of 2015, the southern province of Dong Nai dethroned Ho Chi Minh City in the amount of foreign direct investment attracted, with 48 projects and $916.75 million in the registered investment capital, according to the monthly report released by the Ministry of Planning and Investment’s Foreign Investment Agency (FIA).

Making up 24.6 per cent of the total $3.72 billion FDI pouring into Vietnam, Dong Nai saw $797.45 million invested in 31 new projects as well as $119.3 million in added capital to existing ones during the first four months of the year.

The Dong Nai Provincial People’s Committee has granted 1,479 investment certificates to date, worth the total value of $27.03 billion. Out of these 1,127 are currently effective, representing $22.54 billion in the registered investment capital.

On April 21, Turkey’s Hyosung Istanbul Tekstil Ltd started construction of a $600 million fibre production project named Hyosung Dong Nai Company. The installation will specialise in the processing of materials such as spandex, nylon, polyester and steel fibres used for the production of tyres.

However, within the first four months of 2015, Dong Nai withdrawn 23 projects worth $30 million. Most of these fell outside of the province’s industrial zones or were delayed projects.

Dong Nai currently has 31 industrial zones, 28 of which are operating with an average filling rate of 67 per cent. In 2015, the province is expected to attract between $900 million and $1 billion in FDI.

South Korean tops FDI list in Vietnam

In the first four months of 2015 South Korea became the biggest foreign investor in Vietnam with 197 projects and $908.88 million in capital, making up 24.4 per cent of the total $3.72 billion in terms of foreign direct investment flowing into the country, according to a recent report by the Foreign Investment Agency (FIA).

As of March, South Korean enterprises are present in 51 of the 63 provinces nationwide, with 4,279 projects and $38.1 billion in the registered investment capital. Hanoi ranks first in attracting South Korean capital with 855 projects and the total capital of $5.3 billion. The runners-up are the northern province of Thai Nguyen and the southern province of Dong Nai  with the total capital of $4.72 and $4.56 billion, respectively.

In April alone, South Korea invested an aggregate $417.82 million in 75 projects, including 54 new ones worth $360.51 million and added $57.31 million to 21 existing projects.

South Korean investors are involved in all sectors of the Vietnamese economy. The majority of them focus on the processing and manufacturing sector with 2,566 projects worth $24.03 billion. Another preferred sector is property with 82 projects and the total capital of $6.99 billion.

In the first quarter of 2015 alone, South Korea invested $445.57 million in 78 processing and manufacturing projects and $29.69 million in the wholesale-retail sector.

On April 21, the Thanh Hoa Provincial People’s Committee authorised In Kyung Apparel Co.Kr to construct a plant with the total capital of $5.1 million located in Dong Son district of the central province of Thanh Hoa.

In April, a South Korean enterprise invested $100 million in KMW Co., Ltd, located in the northern province of Ha Nam, which specialises in producing telecommunications and LED lighting equipment.

The world’s largest smartphone maker and the leading hi-tech investor in Vietnam, Samsung, will deploy a $1.4 billion Samsung CE Complex project in Saigon Hi-Tech Park, specialising in producing household appliances and hi-tech electronics.

Earlier, Samsung invested the total of $7.5 billion in two manufacturing complexes in Bac Ninh and Thai Nguyen provinces.

HCM City's German-owned building to be country's greenest

Deutsches Haus on HCM City's Le Duan Street will become the most energy-efficient office building in Viet Nam when it is completed in 2017, German company Deutsches Haus Ho Chi Minh Stadt Ltd., the building owner, has said in a press release.

The 25-storey building will consist of around 30,000sq.m of office space and is expected to be completed in the third quarter.

Improving the energy efficiency of office buildings can result in energy savings of more than 50 percent for the nation. HCM City plans to reduce its carbon emissions by nearly 300 metric tonnes by 2016 and plans to become a green city, but office buildings remain far from being in any way energy-efficient.

Survey findings raise fear of 3G fee increase in Vietnam

A survey on consumer satisfaction in 3G service quality in Vietnam is allegedly intended to pave the way for a subscription fee increase in the near future.

Subscribers of the third generation mobile telecommunications technology in the Southeast Asian country have almost no complaint about its service quality, according to a survey conducted by German research firm GfK and Buu Dien Vietnam (Vietnam Post) newspaper.

Fifty-five percent of the surveyed subscribers said the 3G fee, currently set at VND70,000 a month for the unlimited data plan, is acceptable, whereas 84 percent believed service quality lives up to its price, the survey reveals.

Eighty-two percent of the respondents said they will continue using 3G services when the fee is increased by less than five percent, whereas only eight percent said any price hike is unacceptable.

Fifty-nine percent said they will switch to cheaper data plan if the increase is between five and ten percent.

In case of an over ten percent hike, 47 percent of those surveyed said they would change to another service provider.

The survey also finds that 16 percent of subscribers want to have larger connection coverage, while 15 percent suggest lowering the subscription fee.

The survey result is under question as it is drawn from only 576 subscribers from three major Vietnamese cities, including Hanoi in the north, Da Nang in the central region, and Ho Chi Minh City in the south.

Many people doubt that a sample set of 576 people does not represent dozens of millions of 3G users, and more than 100 million of mobile phone subscribers countrywide.

However, Dinh Ngoc Bao Tran, a Vietnamese representative of GfK, assured that the survey findings are objective.

GfK has its own standards in carrying out the survey, whose results also meet sociological requirements, Tran confirmed.

Le Nam Thang, Deputy Minister of Information and Communications, said the survey should only be considered as an information channel about Vietnam’s 3G market, as its result does not represent situation in the country’s remote areas.

The 3G fee in Vietnam is among the cheapest in the world, Information and Communications Minister Nguyen Bac Son told a government meeting on Saturday, when asked about the accuracy of the survey result, and the possibility of a 3G fee increase.

“We have invested heavily for the 3G infrastructure but have yet to raise the fee,” he said, adding increasing the fee is “obviously necessary” for better infrastructure investment.

The minister said if the increase complies with the law, it is necessary and thus should be supported.

Quality issues hurting rice exports

Some rice traders are mixing low quality rice into export shipments of fragrant rice, threatening the integrity of Vietnam's rice export industry.

The Agriculture and Rural Development Ministry said that in the first three months of 2015, exports of fragrant rice rose 47 percent on a year earlier.

Vietnam Food Association said fragrant rice was fetching USD500-600 a tonne.

But a representative of a rice processing and exporting company in Can Tho said, "Some firms buy low quality fragrant rice and mix it with export quality rice. They sell it at low prices, but still advertise it as high quality fragrant rice to attract customers."

Vietnam lacks a testing system for monitoring the consistency of rice being sold for export.

Tran Ngoc Trung, the director of Vinh Phat JSC, said Japanese and US markets have more than 600 rules relating to imported rice and Vietnam is only able to meet a third of those on its own. Rice has to be sent to Thailand, Japan or the US for testing.

Vietnam is facing growing new competition from the likes of Cambodia for market share.

The director of Vietnam Southern Food Corp, Huynh The Nang, said better infrastructure and more testing equipment was needed to monitor quality.  

National Highway 20 opens to traffic after upgrade

The 110-kilometre section of National Highway 20 connecting Dong Nai and Lam Dong provinces has opened to traffic after four years of upgrade.

The road, which runs from the Dau Giay T-junction to Bao Loc city, was severely damaged after 40 years of use.

Upgrades on this important route started in November 2011 at a total cost of VND5.2 trillion, most of which was funded by foreign financial institutions represented by Goldman Sachs.

Completion of the National Highway 20 upgrade will facilitate trade between Ho Chi Minh City and Central Highlands provinces and cut the travel time between HCMC and the resort town of Da Lat to eight hours from the current five hours.

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

Low CPI spurs retail trade growth, Vietnam’s April trade deficit down 57 percent, Vietnam accelerates efforts to reach TPP agreement, Cashew nut exporters bullish on US market, Major markets import more fruit
 
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