BUSINESS IN BRIEF 23/5

Farmers need firms to help them gain competitiveness

Minister of Agriculture and Rural Development Cao Duc Phat urged businesses to help farmers boost their competitive capacity as part of the agricultural restructuring process.

Phat said at a workshop held yesterday in Ha Noi that the ministry encouraged enterprises to work more closely with farmers to improve their operations.

"Of course enterprises could not work on their own with tens of thousands of farmers across the country, so there should be associations to act as bridges, connecting the two groups," he said.

Phat gave his suggestions at the workshop on the role of co-operatives and other agro-trade organisations organised yesterday by the Ministry of Agriculture and Rural Development (MARD) in co-ordination with the Viet Nam Co-operative Alliance and the World Bank.

Phan Quoc An, a representative from the Qui Hien Co-operative in the northern province of Lao Cai, said farmers were facing increasing obstacles in competition.

A lack of co-operation with relevant agencies in defining product values made farmers' competition problems worse, he added.

An said that in most farmer-business co-operation businesses take on less risk than farmers do.

"Farmers should join co-operatives if they want to get a fairer share of the profit," he suggested.

However, a lack of information makes establishing new co-operatives a slow process, An said.

Nguyen Van Thinh, vice chairman of the Viet Nam Co-operative Alliance, said co-operatives were also facing hardships, so they might not be able to help farmers as much as expected. Most of them were operating on a small scale without effective management.

Minister Phat said appropriate measures must be worked out immediately to improve the overall performance of agriculture co-operatives, which could improve the competitiveness of agro-products by connecting farmers and businesses.

In a separate meeting on Tuesday, Deputy Prime Minister Hoang Trung Hai also urged ministries, agencies and localities to accelerate the restructuring of the agricultural sector. This was an urgent task, he said.

He also asked for stronger communication campaigns at all levels, mainly targeting farmers. He reported that 17 national and seven regional plans had been established to help restructure the sector.

VINACOMIN asked to divest non-core firms

Deputy PM Hoang Trung Hai has asked the Viet Nam National Coal and Minerals Industries Group (VINACOMIN) to accelerate the restructuring and divestment of non-core businesses, including banks and ports.

At the group's meeting in Ha Noi on Monday, Hai also asked them to concentrate on core businesses.

In addition, he urged VINACOMIN to mobilise other resources to attract capital for basic investments and improve coal exploitation with approved planning.

He also told the group to give priority to labour safety.

The group said it divested six out of eight units during the first quarter of the year for a total of VND1.79 trillion (US$82.4 million).

It is planning to withdraw its investments in the two remaining units this year.

The group has set a target of 6.5-7 per cent annual growth rate for 2016-20.

To meet the target, the group will enhance its investments in constructions, developing science and technology, and modernising production units. At the same time, it will improve labour safety, take environmental protection measures, and balance resources to ensure the progress of projects.

It will strive to improve workers' salary as well as working conditions.

VINACOMIN has renewed its administration to increase competitiveness, saving costs by 3-5 per cent.

Cargo transport industry sets goals for rapid development

The Ministry of Transport has approved restructure of the air freight market by 2020 to develop the cargo transport market and increase the role of airfreight, especially in key economic zones and remote areas.

The project sets a goal of transporting 0.04 per cent of all goods by air by 2020 as well as 3.23 per cent of all travellers.

By then the Vietnamese airfreight market will be the fifth largest in the ASEAN bloc of nations.

By 2020 international flights will arrive at all international airports and all domestic sectors will have at least seven flights a week while every domestic destination with an airport will be covered.

Viet Nam will have a fleet of 190 – 210 aircraft then, Viet Nam Airlines will be a 4-5-star carrier, and low-cost airlines will match the quality of regional budget carriers.

The rate of delayed and cancelled flights will be reduced year by year.

To implement these goals, the project has set up missions and envisioned solutions like renovating institutions and policies and speeding up administrative reform, increasing the efficiency of airfreight and international connections, developing multiform-transport and logistics, efficiently exploiting existing infrastructure, improving management efficiency and public investment, and encouraging and attracting private investment in airfreight.

Equitisation and restructure of transport companies will be accelerated together with introduction of modern technology.

International co-operation and human resource development are two other key tasks.

The project also calls for expanding the airfreight market based on it strengths as the safest, fastest and most convenient mode of transport.

It eyes closely linking the local market with its international and regional counterparts, focusing on the market share of low-cost airfreight, and reducing airlines' expenditure and bolstering their efficiency.

Pilot digital TV transmissions held in Ha Noi

The Red River Delta Transmission Broadcasting Company (RTB JSC) launched a pilot broadcast digital terrestrial television (DTT) service in the capital city of Ha Noi on May 19.

Deputy Minister of Information and Communications Le Nam Thang (middle) and leaders of the Red River Delta Transmission Broadcasting Company launch a pilot broadcast digital terrestrial television service in Ha Noi on May 19. Photo tapchibcvt.gov.vn

The service will initially provide 14 standard definition (SD) and high definition (HD) channels in Ha Noi, as well as in five northern cities and provinces on one frequency. The frequency will increase to two by September. By the end of 2016 the company's transmission network will cover all areas in the Red River Delta.

According to a TV digitalisation plan approved by the Prime Minister in December 2011, five cities under the central authority will switch from analog to DTT by the end of this year.

At the moment, there are five companies offering DTT services in the country. Vietnam Television (VTV), Vietnam Television Corporation (VTC) and An Vien Television (AVG) provide digital service throughout the country, and RTB JSC and Southern Digital Television (SDTV) Company offers service in the north and the south of Viet Nam, respectively.

RTB, founded on March 27, 2014, had a charter capital of VND30 billion (more than US$1.36 million) contributed by four major shareholders, including Hanoi Television, Hanel Company Limited, Hanoi Television Development Investment JSC, and Hanoi Cable Television.

Sacombank's bad debts decline

The bad debt ratio of Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank) fell from 1.46 per cent to 1.19 per cent during the first quarter of this year.

Further, according to the bank's Q1 report, its after-tax profit reached VND637 billion (US$30.33 million), up 3 per cent over the same period last year. Also, net revenues expanded 24 per cent year-on-year at VND1.94 trillion ($92.38 million).

The bank's total asset value reached VND198.74 trillion ($9.46 billion) on March 31, an increase of 5 per cent from the 2014 year-end figure. Also, deposits at the bank grew 5 per cent to VND171.1 trillion ($8.15 billion) and outstanding loans increased 4.7 per cent to nearly VND134 trillion ($6.38 billion).

However, operational costs rose by 11 per cent year-on-year to VND1.10 trillion ($52.38 million), and the provisional value extracted by the bank to support risks was 3.5 times higher in Q1/2015 than that recorded in Q1/2014, reaching VND332 billion ($15.81 million).

Quang Ninh licenses road projects worth $667 million

The northern province of Quang Ninh licensed two road projects to be developed on a build-operate-transfer basis with a combined investment capital of nearly VND14 trillion (US$666.67 million).

A view of the Cai Rong warf in Quang Ninh's Van Don district in 2013. Quang Ninh Province has licenced road projects worth $667 million to facilitate local development, particularly in the Van Don special economic zone. Photo baoquangninh.com.vn

The provincial People's Committee granted the licences to Cong Thanh and Phuong Thanh traffic construction and investment companies on May 18.

The firms will jointly build a 60-km four-lane expressway connecting Ha Long City and Van Don district, and upgrade a 33-km part of National Highway 18, which links Ha Long and Cam Pha City. Work on the projects is expected to begin in June this year and completed by 2017.

Committee Chairman Nguyen Duc Long said the new infrastructure will shorten the travel time between Ha Noi capital and Van Don special economic zone. This will also boost the socio-economic development of the province as well as the country's key northern economic region.

The investors will contribute more than VND10 trillion ($476.19 million) from their own funds and loans, while the remaining amount will come from the State budget and other sources, he added.

Animal feed material importers bemoan quarantine procedures

Animal feed material importers have complained that complicated procedures for quarantine and quality checks have cost them dearly as they have to spend big on containerized goods storage at ports before customs clearance.

Enterprises said they could have saved tens of billions of dong a year if such procedures had been streamlined.

Tran Thanh Quang, chairman and chief executive officer of Quang Minh Group, told a seminar in Hanoi last week that imported materials for animal feed processing are now subject to plant quarantine and quality checks at ports and the process is time-consuming, sometimes taking importers more than 10 days to have these goods cleared.

“Enterprises will have to send samples of the imported animal feed materials to Hanoi for tests and wait for the results to be sent to Haiphong Port. They have to pay for the tests and goods storage at the port,” Quang said.

Aprocimex chairman and general director Doan Trong Ly said the input cost of animal feed materials in Vietnam is higher than other countries due to the charges for the checks and goods storage at ports.

Quang said local enterprises import powdered corn from the United States at US$3-5 a ton higher than other countries as the Plant Protection Department has told local importers to have it fumigated before being containerized for export to Vietnam. Other countries do not require this.

“Even U.S. exporters do not understand why only Vietnam requires powdered corn to be fumigated,” Ly said and proposed abolishing the rule to make life easy for local enterprises.

Bui Si Doanh, deputy head of the department under the Ministry of Agriculture and Rural Development, said more harmful insects have been discovered in the powdered corn imported from the United States in the past two years. Therefore, this material has been listed in a group of materials whose imports must be all checked and fumigated before being shipped to Vietnam.

Doanh said samples of all the containers at ports should be taken for tests in accordance with international practices. He noted that fewer quarantine checks will apply to import companies with fewer containers found with insects.

Luong Minh Tung, general director of Phuc Loc Group, proposed post-checks for imported animal feed materials to help enterprises save costs, especially the charge for goods storage at ports.

Minister of Agriculture and Rural Development Cao Duc Phat said it is not necessary to check all the containers of animal feed materials. He told the department to work with the U.S. and consider suspending imports if certain harmful insects are detected.

The plant protection and husbandry departments should dialogue with importers to find the best solutions to quarantine checks for animal feed materials to help them save costs and time.

“I want the fee and time for quarantine checks for animal feed materials to be halved this year,” Phat said.     

Sugar mills urged to improve competitiveness

Agriculture officials have called on local sugar refineries to swiftly invest in high processing technology to turn out competitive products in order to deal with increasing pressure from regional competition.

Minister of Agriculture and Rural development Cao Duc Phat told a seminar in Hanoi on Monday that Vietnam has committed to abolishing annual quotas for sugar imports from other ASEAN countries and slashing import duty on sugar to 5% in 2018. In that year, Thailand’s sugar will pile pressure on locally-made products.

Phat said this year Vietnam imposes the tariffs of 25% on raw sugar and 40% on refined sugar imported for the quota of 81,000 tons of sugar, or a mere 6% of the nation’s total demand. The tax on sugar imports beyond the quota is much higher, at 80-100%.

Technical barriers are also erected to protect the local sugar industry. Phat explained sugar is one of the sectors getting more protectionism when Vienam joins negotiations over free trade agreements.

However, the minister questioned whether the local sugar would continue taking shelter from protectionist measures or it would have to compete with sugar imports and increase exports.

Pham Dong Quang, deputy head of the Cultivation Department under the ministry, warned that it would not be easy for local sugar enterprises to compete with rivals from Thailand.

Quang told the seminar that sugarcane accounts for 70-80% of sugar production cost but it is VND200,000-300,000 a ton higher in Vietnam than in Thailand.

On top of that, up to two-thirds of sugar mills in Vietnam are reliant on outdated processing technology.

Low sugarcane yields are also a big problem faced by the local sugar industry. Nguyen Quang Hop of Hung Thinh Ltd. Co. said as sugarcane saplings have not been invested properly for years, one hectare of sugarcane can produce only 47.6 tons while the world’s average yield is 65.3 tons.

Hop noted sugarcane farms in Vietnam are too small to use machines for cultivation and harvest to reduce costs.

Pham Hong Duong, chairman of the local sugar company Thanh Thanh Cong Tay Ninh, said if the Government does not have effective measures to develop the sugar industry, local enterprises would lose the home market to foreign competitors, particularly those from Thailand.

Duong said supermarkets and groceries are the two main distribution channels for local sugar enterprises but foreign retailers have acquired more of these channels to sell products of their countries. Moreover, local supermarkets demand a profit share of as high as 10-20% while the best profit margin of sugar firms is just 10%.

“Local sugar products would not be able to compete with sugar imported from Thailand. Perhaps, local sugar enterprises would have to outsource products for foreign firms,” Duong said.

As for the matter of protection, Do Thanh Liem, vice chairman of the Vietnam Sugar and Sugarcane Association, said the sugar industry has not been well protected.

“We impose high tariffs on legal sugar imports but allow hundreds of thousands of tons of sugar to be smuggled into the local market a year (due to a lack of preventive measures),” Liem said.

Smuggled sugar and the Ministry of Industry and Trade’s approval for major local sugar firms to import raw sugar for export processing have dealt a heavy blow to the industry.

“Ailing sugar companies should go bust,” Liem said. “We are not afraid of competition but by management policy.”

Duong of Thanh Thanh Cong Tay Ninh stressed the sugar industry does need appropriate policy to thrive and better compete with sugar imports when the market is further opened to foreign competition.

Duong suggested a mechanism to cement cooperation between sugar firms and farmers in planting sugarcane to reduce costs and enterprises and relevant agencies in producing high-yielding saplings to increase productivity.

He estimated at least VND30 billion would be needed a year to create high-yielding sugarcane saplings.

Minister Phat said the ministry wanted to create breakthroughs in sugarcane saplings and cultivation and sugar processing. He called for sugar enterprises to help import high-yielding saplings for planting in the country.

SBV: Bad debt to fall to 3% at year-end

Bad debt of the banking sector is the biggest bottleneck of the economy and the State Bank of Vietnam (SBV) will continue taking drastic measures to slash bad debt to 3% at the end of this year, said SBV governor Nguyen Van Binh.

Binh said over VND311 trillion (US$14.2 billion) worth of bad debt in the local banking network was settled in the 2012-2014 period, or equivalent to 67% of the total bad debt at the end of September 2012.

In the first two months of this year, extra bad debt totaling some VND7.9 trillion was settled, Binh said in a report sent to National Assembly (NA) deputies before the legislature opens its session in Hanoi today.

Of the total figure, Vietnam Asset Management Company (VAMC) had purchased over VND137 trillion of bad debts at prices of more than VND111 trillion as of the end of December 2014. In the year to April 17, VAMC had bought an additional VND13.7 trillion debt for VND13.4 trillion.

Since its debut, VAMC has bought bad debts totaling VND147.3 trillion for only VND122 trillion.

According to reports of credit institutions, the bad debt ratio stood at 3.25% at the end of December 2014, slightly lower than the 3.61% a year earlier.

Binh said bad debt has edged down gradually since late last year, indicating local banks have improved credit quality.

The ratio bounced back to 3.59% in the first two months of this year. But this is normal as bad debt usually picks up in the first months of year before declining at year-end. The situation is still under the central bank’s control.

Binh pledged to strengthen bad debt settlement this year, targeting that at least 60% of the total bad debt must be settled by June 30. Of which, debt sales to VAMC should reach at least 75% of this year’s target.

The ultimate goal is to cut the bad debt ratio in the banking system to 3% at the end of this year, the governor said.

The report said the VAMC model has proved to be effective in settling bad debts at banks and support customers. Credit institutions have attempted to reduce bad debts although there is no financial support from the central budget and the economy is still mired in difficulty.

However, the effort of the banking industry alone is not enough as this is a problem of the economy. Therefore, authorities, agencies and businesses should take part in the bad debt settlement process, Binh stressed.

Korean firm’s tech project approved in Ha Nam

South Korea’s Ace Technologies yesterday received an investment certificate from the government of Ha Nam Province to develop a project producing wireless aerials and radio frequency filters at Dong Van II Industrial Park.

The project covering more than 120,000 square meters has a total investment of US$60 million and is scheduled to come online nine months after it was approved. The facility is designed to turn out 300,000 products a year.

Gwang Young Koo, president of Ace Technologies, was quoted by VietnamPlus as saying that the project is expected to generate annual revenue of US$70 million, pay some US$1 million in corporate income tax and provide jobs for nearly 500 laborers.

Gwang said Ace Technologies would develop the project into one of the major facilities of the group. The factory will transfer technology and train skilled workers for the northern province.

Mai Tien Dung, Party chief of Ha Nam Province, said the project of Ace Technologies is in line with the province’s policy to attract foreign-invested projects with high technology and engineering enterprises.

He pledged favorable conditions for the project and hoped that Ace Technologies would help bring more Korean investors to the province.

Vietnam willing to work for early TPP negotiation completion

Vietnam is ready to work with other countries involved in Trans-Pacific Partnership (TPP) negotiation towards its early conclusion, Spokesman for the Foreign Ministry Le Hai Binh said in a regular press conference on May 21.

Replying a query on the possibility of wrapping up the negotiations and signing the agreement within this year, Binh said Vietnam will follow the principle of fairness with regard to mutual benefits and respect to interests of the TPP member countries.

TPP negotiations were launched in 2005 between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam.

It is one of the world’s biggest Free-Trade Agreement (FTA) with the combined gross domestic product (GDP) of all 12 participant countries accounting for 40 percent of the global GDP.

It is a treaty of a very high standard, perhaps even an unprecedented standard, and this causes difficulties for most of the countries involved, especially in some key fields such as protecting intellectual property rights or opening up the goods market.

Binh Duong toasts arrival of new Budweiser brewery

A 26-million USD Budweiser beer plant operated by Anheuser-Busch Inbev Vietnam Brewery Co., Ltd (AB Inbev) commenced its operations in the Vietnam Singapore Industrial Park II in the southern province of Binh Duong on May 21.

The factory, which can produce 100 million litres of beer per year, aims to meet domestic consumption demand as well as exports to Southeast Asian market.

Ricardo Vasques, General Director of AB Inbev Vietnam, said the new brewery represents the company’s commitment to creating a strong presence in Vietnam.

Meanwhile, Tran Thanh Liem, Vice Chairman of the provincial People’s Committee said that the brewery will contribute greatly to the local industrial structure and help develop the provincial economy.

The 139 year-old Budweiser beer is one of the world’s top five consumer products and is the leading beer brand in the US. It generates a yearly revenue of over 47 billion USD.

Central Highlands aims to draw foreign investment

The Steering Committee for the Central Highlands has instructed the regional localities to develop strategies in a bid to draw more foreign direct investment (FDI).

The efforts will be focused on implementing key projects, training high-quality human resources and reforming administrative procedures towards the “one-stop” model.

Promotion activities are also being expanded to lure more investment, ultimately contributing to socio-economic development and improving local living conditions.

The region is now home to 148 FDI projects, with total registered capital exceeding 819 million USD.

Since 2011, as many as 38 projects worth 122 million USD have been licensed, mostly in Lam Dong.

According to the committee, the Republic of Korea leads the 10 countries and territories which have invested in the region, with 14 projects worth 38.6 million USD. It is followed by the Netherlands, with three projects worth 26.2 million USD.

A majority of the projects operate in the processing industry, agriculture and wholesale and retail business.

Dong Nai: stable market leads export turnover rise

Export turnover in the southern province of Dong Nai has performed well due to market stability and export market expansion, according to the provincial department of Industry and Trade.

The province’s export turnover in May 2015 is estimated to reach 1.1 billion USD, up 7.3 percent compared to the same period last year.

Some products are expected to have particularly high export turnover, such as computer spare parts and transport vehicles (34 percent), electrical products (25 percent) and cashew nuts (40 percent).

Major markets including the US, China and Japan are continuing to enjoy high growth of 13.5 percent, 9.5 percent and 2 percent, respectively. Other markets seeing positive growth include the UK, Singapore, Canada, India and Australia.

According to the department’s director, Le Van Danh, the province aims to bring home up to 14.6 billion USD, an increase of 10-12 percent against the previous year, from exporting local products.

He added the US is the province’s biggest export market and new link ups with American industrial associations and big enterprises such as Walmart should cement this further. Currently over 80 percent of export turnover in the province comes from Foreign Direct Investment (FDI) enterprises.

Over the last two years, FDI enterprises have shifted factories to Vietnam, hoping to enjoy preferential treatment when several trade deals, including the Trans-Pacific-Partnership Agreement (TPP), come into play by 2016.

Dong Nai is one of Vietnam’s most attractive destinations for FDI investors.-

Vietnam, Iran bolster investment and trade cooperation

Vietnamese Ambassador to Iran Nguyen Hong Thach has paid a working visit to the country’s Esfahan province to bolster investment and trade cooperation between the two countries.

The ambassador held a working session with mayor of Mohammadabad city, Mehdi Nasr Esfahani, and the two sides agreed to sign a deal on promoting tourism cooperation and cultural exchange.

Several activities were also held during the two day working trip, including a meeting with local enterprises, field research and visits to a petrochemical industrial park, an asphalt manufacturing factory and the Hyper Esfahan commerce centre.

During talks with local businesses, the diplomat proposed suitable methods to intensify trade cooperation between the two countries’ enterprises.

In return, local firms promised to sponsor Vietnamese businesses to come to Iran to seek cooperative opportunities.

Vietnamese firms updated about Vietnam-RoK free trade pact

Vietnamese business owners gathered at a workshop in Hanoi on May 21 to learn more details of the recently-signed Vietnam–Republic of Korea Free Trade Agreement (VKFTA), making it easier for them to reshape their business strategies in anticipation of opportunities ahead.

Nguyen Thi Thu Trang, Director of the World Trade Organisation Centre under the Vietnam Chamber of Commerce and Industry (VCCI), said a VKFTA guidebook for the Vietnamese business community will be released in the foreseeable future, covering investment policies and preferential tax.

Pham Khac Tuyen, VKFTA coordinator from the Ministry of Industry and Trade’s Asia-Pacific Market Department, said domestic firms could refer to a VFKTA guidebook written in English while waiting for the publication of a Vietnamese version.

The ministry is currently responsible for providing information regarding VFKTA to interested parties, he said.

The VKFTA is the first completed free trade pact among seven others that are still under discussion between Vietnam and its partners.

The RoK offers preferential tariffs to Vietnamese agro-fisheries, including shrimp, crab, fish and tropical fruit, as well as apparel, wooden furniture and mechanical products.

Vietnam, meanwhile, provides incentives for Korean cosmetics, pharmaceuticals, automobiles, spare parts, garments and footwear raw materials.

Hong Sun, General Secretary of the Korea Chamber of Commerce in Vietnam, suggested opening a modern wholesale centre where Vietnamese agro-fisheries will be classified and packaged for export.

Dong Nai: stable market leads export turnover rise

Export turnover in the southern province of Dong Nai has performed well due to market stability and export market expansion, according to the provincial department of Industry and Trade.

The province’s export turnover in May 2015 is estimated to reach 1.1 billion USD, up 7.3 percent compared to the same period last year.

Some products are expected to have particularly high export turnover, such as computer spare parts and transport vehicles (34 percent), electrical products (25 percent) and cashew nuts (40 percent).

Major markets including the US, China and Japan are continuing to enjoy high growth of 13.5 percent, 9.5 percent and 2 percent, respectively. Other markets seeing positive growth include the UK, Singapore, Canada, India and Australia.

According to the department’s director, Le Van Danh, the province aims to bring home up to 14.6 billion USD, an increase of 10-12 percent against the previous year, from exporting local products.

He added the US is the province’s biggest export market and new link ups with American industrial associations and big enterprises such as Walmart should cement this further. Currently over 80 percent of export turnover in the province comes from Foreign Direct Investment (FDI) enterprises.

Over the last two years, FDI enterprises have shifted factories to Vietnam, hoping to enjoy preferential treatment when several trade deals, including the Trans-Pacific-Partnership Agreement (TPP), come into play by 2016.

Dong Nai is one of Vietnam’s most attractive destinations for FDI investors.

Agriculture cooperatives failing to impress

The performance of agricultural cooperatives is still far behind expectations, although they support tens of millions of farming households, heard a workshop in Hanoi on May 21.

Data collected by the Vietnam Cooperative Alliance shows that by the end of 2014, the country had 142,800 cooperative groups and 18,638 cooperatives, attracting 12 million households. Of these, there were more than 10,000 providing agricultural and aquacultural services.

Attendees said the development of a cooperative economy has failed to live up to expectations due to an array of lingering weaknesses such as small-scale operations, low productivity, unqualified products and unstable consuming markets.

They blamed this on the shortage of capital, poor administration capacity, outdated technology and the neglect of trade promotion.

Hoang Xuan Truong, an expert from the Vietnam Science Association of Rural Development, said cooperatives are encountering a number of difficulties, especially those based in remote areas and ethnic minority communities where they lack the necessary conditions for development; like infrastructure, funding and skilled personnel.

The activeness of cooperative leaders is critical to the development of these organisations, said Nguyen Thi Luyen from the Moc Chau safe vegetable cooperative in northern Son La province, adding that farmers will join cooperatives only when they see economic benefits.

She said her cooperative, generating 500-600 million VND (23,800-28,500 USD) per hectare in revenue for 38 member households, hopes to receive technical assistance from relevant agencies and local authorities to increase vegetable quality and ensure product preservation and transportation.

At the workshop, other representatives and economists suggested Government agencies and local administrations assist cooperatives and cooperative groups in technological transfer and application, trade promotion, infrastructure building and personnel training, ultimately helping them develop in an increasingly fierce competition climate.

Phu Tho: Underperforming officials to be dismissed from their posts in crackdown

Northern Phu Tho province will dismiss any civil servant or government official whose performance receives a high number of complaints from individuals and businesses in a bid to promote its Provincial Competitiveness Index (PCI).

Phu Tho jumped 15 places to reach the 39 th position in the 2014 PCI rankings of the 63 provinces and cities in Vietnam.

Despite these fair improvements, Phu Tho saw its scores in three out of the 10 PCI sub-indexes decline - namely proactivity, land access and tenure, and informal financial charges.

By dismissing irresponsible individuals, the province hopes civil servants’ sense of responsibility will be raised while leaders of local State agencies will conduct regular examinations to check their competence.

The provincial People’s Committee has ordered agencies to remove overlapping and expired legal documents and quickly update legal regulations on their websites and at their offices.

Notably, the provincial Department of Planning and Investment has been assigned as the sole agency implementing the “one-stop shop” mechanism. Accordingly, the department will process all investment procedures for province-wide projects, and investors only have to file dossiers and receive outcomes at the agency’s “one-stop shop” section.

The time to process investment-related procedures will be minimised to provide the best possible conditions for investors. For example, investment registration procedures must be completed within three days, or provincial authorities must grant investment licenses within 17 days.

To facilitate land access, provincial agencies will publicise its land use planning and land prices along with investment policies and incentives on their online portals.

Phu Tho-based banks have been asked to make it easier for companies to get loans. Meanwhile, provincial officials have also pledged to have regular meetings with business representatives so as to promptly eliminate bottlenecks facing firms.

The PCI, administered by the Vietnam Chamber of Commerce and Industry, measures economic governance for business development.

The 2014 PCI report was based on the feedback of 9,859 domestic non-State enterprises and 1,491 foreign-invested firms from across Vietnam.

It considered ten sub-indexes: land access and tenure, informal charges, proactivity, entry cost, transparency, time cost, policy bias, business support services, labour training, and legal institutions.

Last year, central Da Nang city topped the rankings, followed by southern Dong Thap province, northern Lao Cai province and Ho Chi Minh City.

Lam Dong attracts investment in hi-tech agriculture

The Central Highlands province of Lam Dong holds great advantages of climate, land and proximity to the southern economic region to attract foreign investment in hi-tech agriculture.

In an interview granted to Vietnam News Agency, Deputy Director of the provincial Department of Planning and Investment Phan Van Dung said the locality boasts strength in developing agro-forestry and farm produce processing industry.

The favourable weather enables the province to grow industrial trees such as tea and coffee as well as vegetable and fruits, he said.

He noted that the province counts 106 valid investment projects worth 482 million USD. Most of the projects (61.3 percent) focus on agriculture and farm produce, while the remaining concentrates to trade and services (21.8 percent) and industry (16.9 percent).

Projects combing agricultural production with processing industry have increased the value of farm produce - the already strength of the province like vegetable, flowers, and tea and popularised their brand names in domestic and foreign markets.

Scores of businesses and farmers are expanding hi-tech agriculture production models to increase the value of farm produce, he said, adding that some foreign enterprises have helped the province to enhance its labour organisation and management.

However, he also noted that, the ineffective operation of some businesses due to domestic and global economic crisis, has resulted in slow implementation of projects in the 2011-2015 period.

To date, no projects in the province are delayed for too long or transferred to other businesses, he confirmed, saying local authorities have issued a document on the extension or withdrawal of projects that received investment licences ahead July 1, 2014.

He added that the province will continue improving the investment climate, increasing administrative reform towards the one-stop-shop model, and supporting small-and medium-sized enterprises.

Authorities pledged to implement effectively socio-economic development programmes with vicinities and Ho Chi Minh City , and provide interest rate policy to support businesses in hi-tech agriculture and farm produce processing as well as focus on land utilisation plan and rural modernisation.

The province also expects FDI in other fields such as tourism, services, and post-harvest preservation and processing, he added.

Three dealers in Vietnam named GM international grandmasters

Three dealers from Vietnam officially became 2015 General Motors’ international grandmasters in San Francisco, California, this weekend.

They were among the 167 dealers in the region that received GM’s highest honour for its dealerships. This is the first time that dealers from Vietnam are awarded with this prestigious title.

Now in its 12th year, the GM International Grandmasters programme was created to reward GM’s best of the best dealers in the region for their excellence. Winners are selected based on vehicle and parts sales, service, customer satisfaction and facility standards. They are judged on both the quantity and the quality of their operations.

“We appreciate the outstanding work that our dealers and their teams are doing every day selling and servicing our Chevrolet vehicles,” said GM executive vice president and president of GM International Stefan Jacoby.

“As the interface between our company and our customers, they are contributing to GM’s record global sales,” Jacoby added.

“Our dealers are key members of our team in Vietnam,” said Gaurav Gupta, GM Vietnam managing director. “Like GM, our dealers are putting the customer at the centre of everything they do to create customers for life. They have truly earned the right to be called grandmasters by qualifying multiple parameters.”

During this year’s four-day Grandmasters programme, which began on May 8, participants received an update on GM’s business, brands and product plans. They also had the opportunity to get behind the wheel of several GM vehicles to experience their excellence.

General Motors and its partners produce vehicles in 30 countries, and the company has leadership positions in the world's largest and fastest-growing automotive markets. GM, its subsidiaries and joint venture entities sell vehicles under the Chevrolet, Cadillac, Baojun, Buick, GMC, Holden, Jiefang, Opel, Vauxhall and Wuling brands.

Relocation woes haunt healthcare complex

Despite initial plans to begin operations in 2016, the $198 million Phuong Dong Health Care Complex is still facing difficulties in land clearance and compensation, as well as a lack of a sound infrastructure system.

According to a representative from Phuong Dong Health Care Complex (Phuong Dong) the company could not clear the remaining 4 per cent of the land (equal to 4,000 square metres) for the last two years.

The reason for this delay, the source from the company said, was that the relocation housing for local residents was not fixed yet. The company, therefore, requested that Hanoi’s People’s Committee assign it as the investor for the relocation housing, in order to quicken the resettlement of residents and enable the rest of land to be cleared successfully.

The second obstacle, the source said, was the troublesome infrastructure system of the area where the complex is due to be located. This has caused difficulties for the company in moving equipment and materials to the site, as well as connecting the infrastructure system of the complex to the local system.

Moreover, she cautioned that transport systems around the project will make it very hard for the easy transport of patients.

The Phuong Dong modern health care complex, developed by the Infrastructure Investment and Transportation Construction JSC (Intracom), is to be built under the format of a hotel-hospital complex with the most up-to-date and advanced healthcare technologies and services ever seen in Vietnam.

In its first stage, the first 250 beds will be put into operation, built in a total area of 30,000 square metres. The following phases will see a centre for training, sports, surgery, rehabilitation, and a rest home.

Intracom has taken the project over from Korean investors Yukjin since 2010 under the name of Kwang Myung General Hospital, who also had difficulties mobilising resources during the economic crisis, aiming to build the biggest modern hospital complex in Asia.

The source from the company also added that in addition to high-end healthcare services, the complex will reserve 30 per cent of its capacity for serving non-benefit functions for people in vulnerable conditions.

Located in north Tu Liem district’s Co Nhue commune of Hanoi, in a densely populated area, next to many urban development areas such as Ciputra and Co Nhue -Chem, the complex is billed as a destination to supply high-end healthcare services to the local population which number in the region to about 200,000.

It is 25 kilometres away from Noi Bai airport and 15 kilometres from Hanoi’s centre. Apart from serving the local population, investors are aiming to attract foreigners working and living in Vietnam who would normally fly to neighbouring countries for treatment. It also aims to lure high-income Vietnamese who currently opt for Hong Kong or Singapore for their medical treatment.

Lam Dong opens Dong Nai 2 hydropower plant

The central highlands province has put into operation the Dong Nai 2 hydropower plant, which provides 263.8 million kilowatts of electricity per hour to the National Power Grid.

The plant, which took eight years to build, is a project of Trung Nam Power company under the Trung Nam Group. The VND3.5 trillion (US$167 million) plant was built with two turbines and has a total capacity of 70 Megawatt (MW).

The power plant can provide electricity for 250,000 homes, along with power for socio-economic development in the Central Highlands region, and is one of the largest private hydro-power plants in Viet Nam.

Local partner at PMH yet to get enough share of profit

Phu My Hung (PMH) Development Corporation was reportedly profitable between 2010 and 2014 but the Vietnamese partner of this property development joint venture has not got a sufficient share of profit estimated at VND1.444 trillion (over US$66 million).

This was one of the typical cases involving State-owned enterprises that have set up joint ventures with foreign companies but have not got adequate profit sharing despite hefty profit earned by their joint ventures, the HCMC government said.

The main reason is the local partners do not hold controlling stakes at the joint ventures, disallowing it to decide how or whether profit is shared, the city government said in a recent document sent to the Ministry of Planning and Investment.

Phu My Hung Development Corporation is a joint venture between Taiwan’s Central Trading & Development Corporation and HCMC-based State-owned Tan Thuan Industrial Promotion Co. Ltd. It has legal capital of US$60 million, with the local partner holding a 30% stake or US$18 million, and the foreign firm the remainder.

According to the city government, the Vietnamese company has many times asked for profit sharing but its request has not been met.

Discussing this issue with the Daily on May 20, Mai Van Duong, chairman of Tan Thuan Industrial Promotion Co. Ltd., said Phu My Hung paid land tax amounting to VND6-7 trillion before sharing profit based on the proportions of the partners’ capital contributions to the joint venture.

According to Duong, of the VND1.444 trillion profit the company should have had, it received only VND600 billion last year.

Vo Minh Thanh, deputy general director at Phu My Hung Development Corporation, told the Daily that Tan Thuan’s capital contribution to Phu My Hung was 600 hectares of land but only over 300 hectares had been allocated to the joint venture so far.

Thanh did not elaborate the profit sharing issue but stressed that if profit is not shared now, the joint venture would do it later.

According to Le Ngoc Thuy Trang, head of the city’s corporate finance bureau at the HCMC Department of Finance, profit sharing at Phu My Hung is decided by its board of directors. However, due to the overwhelming ownership of the foreign partner, some profit might be retained for expansion before it is shared.

The city government has asked the Ministry of Planning and Investment propose amending the regulation on profit sharing at joint ventures and requiring them to share profit annually after fulfilling tax and financial obligations.

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

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