BUSINESS IN BRIEF 26/6

Ha Tinh’s potential woos Japanese

The central province of Ha Tinh is focused on attracting Japanese investors.

Provincial Party Secretary Vo Kim Cu told 30 Japanese enterprises at last week’s meeting in Hanoi that all the best conditions would be given to Japanese investors in various sectors like infrastructure, logistics, ports, urban development, healthcare, education, agriculture, supporting industries, and oil refinery in the province.

“We call upon all of you, as well as other Japanese investors, to invest in Ha Tinh,” Cu said. “I can say for sure that all of you will be treated the same as local enterprises and Ha Tinh citizens. We will speed-up site clearances and will halve the time for processing all administrative procedures for you.”

The meeting was attended by major Japanese enterprises like JFE Shoji, Mitsubishi, Sojitz, Vijachip, Jicem, Tamada, Takagi, J-Power, Sumitomo Mitsui Banking Corporation, TK Chemical, and NNA.

“We will build a large industrial park for Japanese investors in the time to come. We have also established an office, known as Japan Desk, in charge of supporting Japanese doing business and living in Vietnam,” Cu said.

The Japan External Trade Organisation in Hanoi’s chief representative Atsusuke Kawada said many Japanese enterprises who were operating in Vietnam wanted to open more factories in the country.

“Ha Tinh is a good destination for them, because it has large power plants and Son Duong deep-water seaport,” Kawada said. “Japanese enterprises want to invest in many sectors including manufacturing, retail, restaurant, education, healthcare, IT, and agriculture.”

Kyoshiro Ichikawa, director of I.B.C Vietnam specialised in supporting Japanese investors in doing business in Vietnam, said Taiwan’ s Formosa Group which was developing a $10 billion steel and port complex in Ha Tinh’s Vung Ang Economic Zone would help attract many Japanese investors involved in machinery maintenance and logistics to the province.

Truong Quoc Trung, chairman of Ha Tinh Minerals & Trading Joint Stock Corporation (Mitraco) said at the meeting that Mitraco wanted to co-operate with Japanese partners in a $100 million project to process titanium residues and another project worth $50 million to produce gypsum planks, and agricultural projects.

Currently, foreign investors have been investing over $17 billion in Ha Tinh. with Formosa’s steel and port complex in  the top list. The complex, which will be able to produce 7.5 million tonnes of steel in the first phase, will become operational by 2017, before entering the second phase with the total investment capital of $16 billion to produce 22 million tonnes of steel per year.

Japan’s Mitsubishi planned to invest over $2.4 billion in building the second 1,200 megawatt thermal power plant in the 7,000MW Vung Ang power centre. Meanwhile, South Korea’s Samsung proposed to invest $5 billion in building the third and fourth plants in the power centre.

Landville awaits take off

The central province of Ninh Thuan has proposed that the Ministry of Industry and Trade add the LandVille wind-to-power project to the province’s wind power development master plan by 2020, with a vision towards 2030.

LandVille Energy, a subsidiary of South Korea’s LandVille Inc., is the project’s investor. In December 2011, this company proposed a hybrid project of wind and solar power in Ninh Thuan, with the total investment of about $500 million.     

Vo Dai, Deputy Chairman of the Ninh Thuan Provincial People’s Committee, said that the project had met all the requirements of the Ministry of Industry and Trade’s (MoIT) Circular 32/2012/TT-BTC on wind energy development and power selling contracts.

If included in the master plan, Landville will move forward in the process, Dai added, noting that the project will have the total capacity of 140 megawatts. Other details about the project have not yet been announced.

Ninh Thuan is already home to 12 wind farms listed in the province’s development master plan. However, the majority are moving at a slow pace. For example, the Belgium-invested Phuoc Nam-Enfinity project was licensed in March 2011, with the total investment capital of $266 million. The investor has not yet completed the necessary procedures to kick off construction, despite the fact that the project was due to be put into operation in December 2012. Others including Impsa (Argentina) and Timur (Malaysia) have also failed to start work on schedule.

Other provinces nationwide that boast huge potential for wind power development are also in the same situation. A lack of specific incentive policies on the development of renewable energy is one of the main reasons for the sluggish implementation of these projects.

At the 2015 mid-term Vietnam Business Forum (VBF), VBF’s power and energy sub-group stressed that renewable energy is an optimal choice for Vietnam to meet the rising energy demand in the near future. As such, the country should create favourable conditions to attract investment capital in this field.

“We support the proposals by consulting units for the MoIT on increasing feed-in-tariff (FIT) for wind power, and simplifying procedures for registration and development of wind power projects,” said a representative of the sub-group.

Sigmud Stromme, chairman of NorCham, which represents Northern European businesses, also suggested that the country should increase FIT for wind power and simplify investment procedures, while applying the same policies on power purchasing contracts for biomass power and waste-to-power plants.

Bank guarantees for property meant to safeguard buyers

A regulation ordering bank guarantees to become mandatory for property purchases, which was to be completed in the future, has caused mixed concerns among property developers and buyers.

Following Article 56 of the Law on Real Estate Business, to take effect on July 1, property developers, before selling or leasing unfinished or future property, must obtain guarantees from eligible commercial banks as assurances of their financial obligations to buyers.

Accordingly, in case property developers fail to hand over apartments to buyers following commitments, banks would be responsible for returning the buyers' money, in line with signed contracts.

The regulation was expected to protect the rights of home buyers, as well as contributing towards cleaning up the realty market.

According to Nguyen Manh Ha, Director of Housing and Real Estate Market Management Department, this would eliminate risks for home buyers, as their money would be guaranteed by banks, which would strengthen overall buyers' confidence.

Further economic expert Nguyen Tri Hieu said the regulation would stimulate home purchases and improve liquidity in the real estate market. Financial disputes arising when property developers failed to complete their obligations were also expected to be reduced.

Huynh Trung Minh from HDBank was quoted by Tri Thuc Tre (Young Intellectual) online newspaper as saying that bank guarantees reflected that the project met certain standards and development potentials. Therefore, home buyers could feel secure when spending money on guaranteed projects.

However, there were concerns that the regulation would increase property prices and cause disadvantages to small developers.

According to Le Hoang Chau, president of HCM City Real Estate Association, guarantee fees might be a factor to be calculated in property prices, which would push up selling prices.

Thus, it would be unreasonable to apply the regulation to all property developers, as guarantees for projects of prestige developers were, in fact, not necessary, Chau said. He added that, instead, buyers should be allowed to request a guarantee if they found it necessary.

While the regulation was expected to eliminate incompetent property developers and enhance market transparency, Nguyen Van Duc, the association's deputy president, worried that this regulation might burden small developers who could need to purchase less favourable guarantee fees, in comparison to large firms, or might face difficulties in negotiating with banks for guarantees.

Further, some voiced concerns that this would undermine their competitiveness and even force them to leave the market.

However, no guarantee fees have been disclosed, as the fees should be competitive, several banks said.

While several developers were taking pioneering steps in signing agreements with commercial banks to guarantee their property projects, others remained confused with the regulation, claiming detailed instructions about guarantee procedures were urgently needed.

To date, no decree or circular outlining the implementation of the regulation have been issued.

Most recently, Sacomreal signed agreements with OCB, ACB and HDBank to guarantee all of its projects. Previously, Novaland signed with VPBank to provide guarantees for its four projects and Thao Dien Company signed with Techcombank to guarantee its Masteri Thao Dien project in HCM City.

Meanwhile, a representative from a property company said he remained unclear about guarantee procedures due to the lack of instructions.

Doan Chi Thanh, general director of Hoang Anh Sai Gon Company, said detailed instructions were urgently needed, as there were only two weeks left before the regulation was to be enacted.

CapitaLand’s premium apartments up for grabs

CapitaLand–Hoang Thanh, a joint venture between Singapore’s CapitaLand and domestic Hoang Thanh company, on June 18th introduced the first mock-up units for viewing and opened the sale of its latest apartment project, The Crown.

Located at the heart of Mulberry Lane in Hadong district of Hanoi, The Crown will be an impressive 35 floor building, boasting with five parking floors and high-qualify facilities.

According to Lim Hua Tiong, general manager of the joint venture, following the Mulberry Lane success in 2014, CapitaLand set up The Crown as its premium product which meets the highest standards of quality and service in the midst of abundant greenery.

“We believe that the cooperation for The Crown at Mulberry Lane between CapitaLand and Hoang Thanh will bring a perfect and unique home to our valued customers, a home that they have always been looking for,” Lim said.

The developer also provides special payment schemes to purchasers, those who would like to move in immediately and need financial support, or need a longer-term payment schedule. With this programme, purchasers only need to pay 50 per cent of the apartment value up front and can pay the remainder one year after moving in.

Attractive prices start from VND28million ($1,330) per square metre (excluding VAT).

In June this year, Mulberry Lane residents also enjoy two new facilities, the mini-golf simulators and karaoke rooms, on top of the more than 50 existing facilities, such as the 50 metre swimming pool and multipurpose court (among others).

The Crown is jointly developed by CapitaLand, one of Asia’s largest real estate companies, and Hoang Thanh, one of Vietnam’s renowned developers, and is intelligently designed and styled with a Singaporean touch. Mulberry Lane is the first project of CapitaLand in Hanoi, providing a total of 1,500 residential units.

Lim confirmed that more than 70 per cent of the Mulberry Lane has been sold and more than 600 pink books have been handed over to Mulberry Lane residents.

Apart from the BCA Green Mark awarded by the Singaporean Ministry of Construction, Mulberry Lane also received several other architecture awards, such as the Green Building Architecture prize in 2014 and the National Architecture Award 2015.

CapitaLand is currently present in the four major cities of Vietnam – Ho Chi Minh City, Hanoi, Haiphong and Danang, mainly focusing on the residential and serviced residences sectors.

In the residential sector, CapitaLand has a portfolio of close to 6,000 quality homes across six residential projects in Ho Chi Minh City and Hanoi.

US$5 million for Chan May port upgrading project

Royal Caribbean International Group (RCI) and Vietnam Shipbuilding Industry Corporation on Sunday signed an agreement to upgrade Chan May Port in the central province of Thua Thien-Hue.

RCI will invest US$5 million in upgrading the port’s infrastructure system so that it can receive large vessels carrying up to 4,000-5,000 passengers each. At present, the port serves vessels with 3,000 passengers.

Chan May is among 46 seaports, which are chosen by the Asia Cruise Association to be a destination for pleasure boats in the Southeast Asia region.

Chan May port has so far received 23,581 visitors from Hong Kong (China), Italia, Spain, England, the U.S., Canada and Australia this year.

The number is expected to rocket up by the yearend, reaching 68,113 visitors, up 193 percent over 2014.

Irrational fees, rules render companies uncompetitive

Companies are caught in a maze of thousands of rules and irrational fees which are hindering their development and competitiveness.

The Ministry of Industry and Trade wants 3,299 rules imposed by ministries removed.

Under the Law on Investment 2014, only the National Assembly, the Assembly's Standing Committee and the government, and not ministries, can set rules for business.

“When the Law on Investment 2014 takes effect on July 1, 3,299 irrational business conditions will be removed,” said the Ministry of Planning and Investment.

The ministry said the ministries of Finance, Industry and Trade, Agriculture and Rural Development, and Transport, have the highest number of irrational procedures and fees.

Nguyen Dinh Cung, director of the Central Institute for Economic Management (CIEM), said fees and procedures are a burden on companies and create barriers for exporters.

Pham Thanh Binh, a specialist from the USAID Governance for Inclusive Growth (GIG) Program, said many exporters complain about irrational fees, which eat up their profits.

Lack of interest thwarts Vietnam in high-tech farming

Vietnam is striving for more mechanisation in agriculture and high-technology farming, but qualified graduates are unable to find jobs in the sector because companies are switching to more profitable businesses.

While the rice-bowl Mekong Delta has achieved 75 percent mechanization, the average rate in the northern region is 20 percent, many farmers still planting and harvesting by hand. In cattle, apart from a few big companies, farmers cannot afford to use more machinery.

Le Minh Lu, a lecturer from Vietnam National University of Agriculture, said that in the past each district and province had agriculture engineers and factories making machinery. But this is no longer part of local development plans.

Graduates have a hard time finding work and many are either joining export labour programmes or participating in competing for the few positions available at FDI companies in Vietnam.

Institutes specialising in the sector say there is little funding for research and development.

"Many factories have stopped making agricultural machinery and have switched to spare parts for motorbikes, because they are cheaper to import (from South Korea and Japan)," said Nguyen Van Lang, former head of Institute of Engineering and Technology.

Only two universities still offer courses in agricultural engineering, and few students choose the field, said Le Minh Lu, a lecturer from Vietnam National University of Agriculture. Even those are struggling meet enrollment quota.

Lu said Vietnam should have an agriculture engineering department to plan sustainable domestic strategies to support farmers and improve the agriculture sector.

Draft circular allows firms to pay export, import taxes online

Enterprises would not need to send staff to banks to pay export-import taxes and fees because online payments could be made possible, according to a draft circular sent to enterprises in HCMC for comment.

At a meeting held last week to seek comment on the draft of the revised circular, Lo Thi Nhu, director of the Import-Export Duty Department under the General Department of Customs, said enterprises and individuals now have to go to banks to pay taxes and take paper receipts.

However, with amendments to the draft circular replacing Circular 126, businesses can use the Internet to pay taxes.

To implement Circular 126, the General Department of Customs signed deals with 22 banks where enterprises pay taxes, fines and fees. Tax payers prepare, file and pay taxes in cash or by transfer. The tax paid will be transferred to the State Treasury, which will then send payment updates to the customs to clear the goods of tax payers.

However, under the draft circular, tax payers would pay taxes via the Internet banking service. In addition to tax payments, they would be permitted to pay customs and other fees via an integrated electronic customs payment tool.

An employee in charge of export and import at an auto firm told the Daily that his company was quite interested in paying import tax for components via the Internet.

A representative of Vietcombank told the meeting held by the U.S. Agency for International Development (USAID) and the General Department of Customs that it is necessary to help enterprises understand that electronic receipts can be used to prove tax payments and for goods clearance. The reason is that many enterprises still want to wait long to get paper bank receipts for their tax payments.

According to the General Department of Customs, both Circular 126 and the draft circular aim to facilitate tax payments by enterprises and enhance the customs authority’s management of budget collections.

After Circular 126 became effective on October 1, 2014, the ratio of export and import taxes and fees collected online had increased from 53% last year to 63% by May.

Automated banking service makes a difference

The Auto Banking model that Dong A Joint Stock Commercial Bank (DongABank) has recently introduced in HCMC has helped the bank stand out. DongABank is expanding this banking service across the country.

“What makes Auto Banking at DongABank special is all Auto Banking booths are 100% automated, open 24/7, more spacious than the regular automated teller machine (ATM) booths, more secure thanks to the presence of security guards, and equipped with smart finance equipment like ATMs, touch screens and phones to support cash deposits, cash withdrawals, inter-bank transfers, card registrations and bill payments. They function the same as a normal transaction office and customers can carry out transactions quickly, safely and conveniently on their own,” said Dao Trung Kien, head of the Auto Banking project at DongABank.

“This marks a breakthrough in the banking sector in Vietnam and helps customers save time and be active when conducting all transactions in modern life.”

Auto Banking really makes a difference as it offers customers comfort and flexibility. With Auto Banking, the customer is boss, he added.

Automated banking transactions are popular and favored in developed countries as they offer customers flexibility during banking transactions. In Vietnam, Auto Banking was introduced for the first time at the Banking Vietnam 2010 conference. Many banks started to launch it in 2012 but on a small scale and with few products. Therefore, it has yet to draw much attention of customers. Some banks have had to either close Auto Banking booths or convert them into regular ATM booths.

Therefore, to create a difference and a new appearance for Auto Banking, DongABank has tried to make it the most modern with many functions to reflect the nature of Auto Banking. DongABank has put 42 Auto Banking booths into operation nationwide.

Auto Banking at DongABank comprises spacious and well-equipped booths. An Auto Banking booth has two to three new-generation ATMs and a larger one has four to five ATMs. ATMs at DongA Bank’s Auto Banking booths are among the most modern in Vietnam and can notify instant money reception as well as capture serial numbers of every processed banknote.

Besides, Auto Banking booths of DongA Bank are equipped with touch screens for Internet Banking transactions, phones for customers to directly contact the free-of-charge customer care center, and boxes to receive financial requests of customers. Such boxes are a quite simple service of Auto Banking but in the trial period, a number of customers said it was their favorite part about Auto Banking. It is because customers just need to write down their basic personal information on the form available at the booths and put it in the boxes, DongABank’s staff will then contact customers at their convenience.

In addition, every Auto Banking booth has security guards to ensure safety for customers’ and the bank’s assets. In the first phase, there is an employee of DongABank at each booth to offer advice for customers and help them use the service.

Under the development road map of DongABank, Auto Banking will be present not only in downtown areas in major cities but also in suburban areas, districts and towns where  DongABank has branches so that all of its customers can use this convenient banking service. DongABank targets to have 150 Auto Banking booths nationwide towards the year-end.

DongABank is one of the banks that pioneer and apply new technologies to banking transactions. The bank is in the top five in Vietnam in terms of card holders with more than eight million ATM cards issued.

“DongABank’s decision to implement Auto Banking, a new banking service in Vietnam, is a clear indication of its commitment to cost saving and manpower investment. We hope this user-friendly, convenient, safe and quick service will help customers get access to banking services easily and accelerate the process to achieve the Government’s goal for non-cash payment market development,” said CEO of DongABank Tran Phuong Binh.

Fuel wholesalers told to open more E5 bio-fuel stations

Deputy Prime Minister Hoang Trung Hai has urged local fuel wholesale firms to have at least 50% of their filling stations selling E5 nationwide at the end of November to speed up the consumption of the bio-fuel.

Ministries, agencies and fuel trading enterprises should cooperate in implementing a major program to promote sales of and expand the E5 bio-fuel pumping station network to serve more customers, according to the Government Office’s Document No. 200/TB-VPCP. The document is about the Deputy Prime Minister’s instruction at a review meeting for a roadmap to boost bio-fuel consumption in the country.

At the end of November, fuel trading enterprises will have to sell the E5 gasoline at half of their gas stations in the provinces and cities chosen for the roadmap. The Ministry of Industry and Trade is assigned to monitor the expansion of the E5 bio-fuel selling network in the country.   

At present, less-than-expected filling stations sell the bio-fuel which has 95% petrol and 5% ethanol in Hanoi, HCMC and Ba Ria-Vung Tau, Hai Phong, Can Tho, Danang, Quang Ngai and Quang Nam.

A recent survey of the ministry showed ten enterprises are selling the E5 RON 92 gasoline at only 58 out of 500 gas stations in HCMC. Fuel wholesalers said it is difficult to increase the number of E5 RON 92 gasoline stations as customers are hesitant to buy this type of fuel.

E5 bio-fuel sales at Petrolimex, Saigon Petro and Saigon Fuel Co. (SFC) have grown a mere 2-4% compared to those of the RON 92 and 95 gasoline products. In reality, there are not many filling stations selling the bio-fuel in the localities selected for the roadmap.

Danang City and Quang Ngai and Quang Nam provinces have shifted to sell the E5 RON 92 gasoline instead of RON 92 petrol. In Hanoi and HCMC, the number of E5 bio-fuel stations remains modest and fuel trading companies provide both the E5 RON 92 and RON 92 gasoline.

Apparel sector looks to US$27.5 billion exports this year

Vietnam’s apparel exports have slowed this year compared to last year but the Vietnam National Textile and Garment Group (Vinatex) is pinning high hopes that the industry can achieve export revenue of around US$27.5 billion this year.

The target was unveiled by Vinatex’s general director Nguyen Tien Truong at a review meeting in Hanoi last week, VietnamPlus reports.

According to Vinatex, Vietnam’s apparel shipments this year have increased 10.26% year-on-year to US$12.8 billion. The growth is lower than the 19% recorded last year.

The United States is the biggest export market for Vietnamese apparel as it has imported apparel worth US$5.18 billion this year, up more than 11% over a year ago and accounting for 42% of Vietnam’s total apparel exports.

Apparel revenue from the European Union has gone up by 8.2% year-on-year to US$1.45 billion. Apparel exports to Japan and South Korea have reached US$1.3 billion and US$948 million in the January-June respectively.

Vietnam is the second largest apparel exporter to Japan and Korea in the January-June period after China, according to Vinatex.

Commenting on the opportunity from the free trade agreement with the Eurasia Economic Union (EEU), Truong said Vietnam’s apparel export to the bloc are forecast to soar 50% in the first year after the trade pact takes effect and 20% in the following years.

Vietnam is currently the eighth largest apparel exporter of the EEU with outbound sales of over US$300 million.

“Vietnam will be able to become the fifth apparel exporter of the EEU and reach export revenue as competitors Bangladesh and India in the next three to five years,” Truong said.   

Vietnam signed the FTA with the EEU in Kazakhstan in late May with an aim to speed up cooperation in various sectors like trade, services, investment, finance, banking and e-commerce.

Vietnam’s exports to the EEU are projected to expand 18-20% per year. With the FTA with the EEU, Vietnam and Russia expect their bilateral trade to surge to US$10 billion by 2020 from some US$4 billion per year.

EAEU FTA opens big door for Vietnamese exports

The free trade agreement between Vietnam and the Eurasian Economic Union (EAEU) comprising Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan was officially signed on May 29 after many years of negotiations, opening a big opportunity to the country’s exports.

Vietnam has become the first nation outside the Commonwealth of Independent States that signs free trade agreement with the union.

The agreement will abolish 90 percent of tax lines, equivalent to 90 percent of bilateral trade turnover.

Nearly 100 percent of Vietnamese seafood products and 80 percent of garment and textile and leather and footwear items will enjoy 0 percent tariff rates.

Other tax lines would be abolished in accordance with a committed route. Many farm produce and wooden items would be imposed low tax rates.

Vietnam will follow a route to open its market to some breeding and industrial products such as machines, equipment, transport means, steel and petrol.

The union’s farming production has mainly served their demand not exports. Therefore, it is forecast that the FTA will not much affect Vietnam’s agricultural industry in the first five years of implementation.

Initial estimations from the union show that bilateral export import turnover will hit US$10-12 billion in 2020 from US$4 billion last year. Meantime, Vietnam expects its export turnover to the union to grow 18-20 percent annually.

Many Vietnamese businesses said that the union’s members especially Russia have been long-term trading partners of Vietnam but high tariff rates have hindered annual trade growth.

According to Vietnam National Textile and Garment Group, the union’s annual import turnover of garment and textile products approximates US$17 billion. Of these, Vietnam holds only 2 percent with US$700 million due to tariff barriers. The turnover is expected to increase 50 percent thanks to tax cut.

Challenges seen from the FTA to Vietnam comprise long geographical distance, causing difficulties in goods transportation and preservation, and hindrances in payment with foreign currencies such as the U.S. dollar and euro.

EAEU locates over 20 million kilometers accounting for 15 percent of the world area with a total population of 175 million. The union’s Gross Domestic Product reached US$2.5 trillion. It takes the lead in the world’s gas output, and is ranked the third and forth in electricity and coal outputs.

Bank loans rise 5.8% in first half of 2015

Vietnam’s credit growth as of June 15 is estimated at 5.8% against the end of 2014, a State Bank of Vietnam (SBV) official has announced.

According to head of the central bank’s monetary policy department Bui Quoc Dung, loans rose by 18.98% over the last twelve months, with credit to agriculture, one of five priority sectors, up 7.71% against December last year.

As of March 3, loans to the remaining four priority sectors - exports, small and medium-sized enterprises, priority industries and high-tech enterprises - rose by 3.9%, 1.88%, 0.2% and 24.02%, respectively.

The SBV set a credit growth target of between 13% and 15% for the whole year, which Dung said is very much within reach.

Vietnam’s M2 money supply as of June 15 rose 4.88% while deposits were up by 4.37% during the same period, the central bank’s official added.

According to the central bank, deposit interest rates in the first half of 2014 have dropped by 0.2-0.5%, mainly deposits with terms of more than six months.

Lending rates have also gone down by 0.2-0.3%, averaging at 6-9% per year for short-term loans and 9-11% for medium and long-term loans.

To date, the SBV has devalued the Vietnamese dong twice, by 1% each time, in a bid to boost exports and drive economic growth, which means that there will be no more exchange rate adjustments for the rest of the year if the central bank keeps its pledge.

Conference reviews Vietnam Development Partnership Forum

Vietnam has focused on poverty reduction in ethnic minority groups, enhancing the involvement of the private sector in providing public services, environmental protection and improving the competitiveness of the labour force through training and skills development.

The information was released at a meeting in Hanoi on June 23 to review the implementation of the results of the Vietnam Development Partnership Forum (VDPF).

During the meeting, the Vietnamese government and development partners discussed four major issues that Vietnam committed to dealing with at the VDPF 2013 - clean water in rural areas, environment management, vocational training and capacity building, and poverty reduction in ethnic minorities.

Ministry of Planning and Investment, relevant agencies and localities have been co-ordinating closely to implement consistent policies, including developing, reviewing and amending related programmes, regulations and legal documents, as well as building and implementing action plans for poverty reduction in ethnic minority groups, and improving the skills and qualifications of the participants in implementing the VDPF commitments.

As a result, the poverty rate in the country fell from 58% in 1993 to 5.975% in 2014. Most notably, the poverty rate in ethnic minority groups has been reduced by 3-4% per year over the past years.

Currently, 84.5% of households in rural areas use potable water and 62% have standard latrines.

Additionally, Vietnam has now 1,456 vocational training establishments, an increase of 100 over the same period last year, meeting the demands of the country's economic development.

At the meeting, experts also discussed and made proposals to further enhance provisions of services to ethnic minority groups, as well as mobilise all resources to solve poverty.

Addressing the meeting, World Bank Country Director for Vietnam Victoria Kwakwa emphasised that the development partners praised the great results of Vietnam in the work of poverty reduction.

She also noted that Vietnam should encourage measures to improve the quality of human resources, an important factor in the country’s economic development in the context of international integration, as well as encourage private enterprises to construct and operate water supply and wastewater treatment systems.

Forum discusses recommendations for ASEAN’s sustainable food and agriculture

Nearly 350 global leaders from ASEAN countries, international enterprises, financial institutions and agricultural associations have gathered at the 2nd Responsible Business Forum on Food and Agriculture which opened in Hanoi on June 23.  

Under the theme ‘ASEAN Beyond 2015: Collaboration for Equitable Growth’, working groups will make recommendations aiming to form a more sustainable future for food and agriculture in the ASEAN bloc.

In his opening remarks, Deputy Minister of Agriculture and Rural Development Le Quoc Doanh emphasised the need to boost co-operation and investment among ASEAN countries in building sustainable agriculture aiming to meet an increasing demand for sustainably produced commodities.

Vietnam has been utilising the public-private partnership (PPP) model in many agricultural commodities, which has brought about positive outcomes including raising productivity and incomes, and reducing water consumption and waste, Doanh said. About 500,000 Vietnamese farmers will participate in PPP projects by 2017, he added.

Doanh also expressed his hope that via the forum, enterprises would intensified their co-operation through the PPP model, which he said would significantly increase agricultural productivity, ensure food security and enhance the competitiveness of ASEAN’s farming products in the world market.

According to Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), agricultural development is being threatened by urbanisation, pollution, environmental degradation, climate change and increasing population, requiring innovative approaches to farming.

He highlighted the key role played by enterprises in connecting and promoting sustainable agricultural development through hi-tech and quality production models and close ties with farmers in key value chains.

During the two-day forum, deputies will produce actionable recommendations to increase the global supply of sustainably produced commodities such as tea, rice, coffee, dairy and aquaculture, while improving farmer livelihoods and reducing environmental impacts.

Aquaculture eyes international standards

Vietnam's Directorate of Fisheries (D-Fish) and the Aquaculture Stewardship Council (ASC) will work together on promoting responsible aquaculture in the country.

A Memorandum of Understanding to this effect was signed by the two sides at a workshop held on June 22, the first day of the Responsible Business Forum in Hanoi.

Under the MoU, the two sides will cooperate on upgrading aquaculture practices with a step-by-step approach, moving from VietGap standards to ASC certification.

Pham Anh Tuan, Deputy Head of D-Fish, said that aquaculture was one of four key components of Vietnam's fisheries industry, accounting for 60 percent of its total output, which is expected to rise to 70 percent by 2020.

The introduction of national Good Agricultural Practices (VietGAP) by the Agriculture Ministry was aimed at promoting sustainable aquaculture, and the latest initiative would take the process further ahead, Tuan said.

The workshop reviewed differences between VietGAP and ASC standards, and reached agreement on implementing a joint project that will guide VietGAP certified farmers to reach ASC certification.

Tuan said the Vietnamese Government had been committed to reducing the negative impacts of fish farming in the country, and building on the mandate that farms must meet VietGap standards, the new project would help them move towards an internationally recognised standard.

This in turn, would provide firms with greater access to international markets and ensure a more responsible aquaculture sector, he added.

In 2014, the Government issued a decree on breeding, processing and exporting catfish, stipulating that farms must acquire VietGAP or equivalent certification by the end of 2015.

ASC Managing Director Chris Ninnes said that through this project, his agency was engaging with farmers not currently able to meet ASC requirements, including smallholders.

They would benefit from greater support in improving their practices, he said, adding that this approach would also enable the ASC to become a more efficient service provider by reducing costs for producers who wish to gain ASC certification.

The ASC has so far granted quality certifications to around 3,000 labels and over 500,000 tonnes of products in the world market.

Workshop participants said aquaculture certification played an important role in promoting and assuring responsible practices that protect the environment and communities.

The new project, led by an external consultant, had the potential to lead to greater collaboration between the two organisations by adopting an area-based management approach, they added.

Free quarantine service for lychee exported by air

Fresh lychee for export by air will undergo quarantine procedures for free, a move meant to boost its export, especially to newly-opened markets.

At the request of the Department of Plant Protection under the Ministry of Agriculture and Rural Development, relevant agencies must arrange sufficient manpower and equipment to accelerate the process.

Vietnam has shipped nearly 20 tonnes of lychee to Australia and four tonnes to the US, not to mention other markets like Japan, Singapore, Malaysia, UK and Germany, said deputy head of the department Hoang Trung,

Lychee prices are stable and likely to rise, he added.

Vietnamese goods catch interest of South African partners

Vietnamese goods caught the interest of South African partners at the 22nd Southern African International Trade Exhibition, which took place in Johannesburg city from June 21-23.

The Hanoi Association of Small and Medium-Sized Enterprises (HASME) opened three booths to introduce products from over 20 enterprises in Hanoi and other localities.

Products on display include agro-products, garments and textiles, construction materials, computers and software, appliances and handicrafts.

Chairwoman of Johannesburg City Council Connie Bapela and around 200 importers from South Africa and countries in the region visited Vietnamese booths.

Bapela said that Johannesburg authorities and enterprises are willing to help Vietnamese products deeply penetrate their domestic market and that of other countries in the region.

Vice Chairman of HASME Mac Quoc Anh said that providing information to the organisers about products on display at the fair in advance helped foreign partners reduce fact-finding time and advance to signing contracts.

Le Huy Hoang, Vietnamese Ambassador to South Africa, expressed his delight at the attention Vietnamese goods received at the fair, especially from South African partners.

Hoang asked enterprises to continue improving the quality and diversification of their products, conduct research into South African consumer demands and tastes and establish linkages.

On the occasion, a working group from the Export Department under the Ministry of Industry and Trade had a meeting with representatives from the South African Department of Trade and Industry to discuss measures to lift trade to 1.5 billion USD in 2016.

SAITEX is the largest annual multi-sector fair in Africa; this year it drew more than 15,000 visitors.

Khanh Hoa to expand salangane nest farming

The central province of Khanh Hoa plans to designate 10,000 hectares to the establishment of five salangane nest villages by 2020, thus further promoting its bird nest brand at home and abroad.

According to the plan, the number of salangane nesting in Khanh Hoa will be increased from 58,000 to just over 1.3 million in 2020.

The province aims to develop the villages in combination with environmental protection and the sustainable development of wild salangane population.

The locality will apply a number of techniques that have already been applied successfully by the Khanh Hoa Salanganes Nest Company, including different incubation and chick rearing methods.

Khanh Hoa has the largest population of wild swallows in Vietnam, with surveys counting more than 3,380 nests in 2014, which were collected in 169 caves on 32 islands.

The province has also erected 500 slangane nesting houses throughout Vietnam and transfers its expertise and technology to more than 700 nesting houses all over the country.

Phu My optimistic of first-half results

The PetroVietnam Fertiliser and Chemicals Corporation (PVFC Co), better known as the Phu My Fertiliser (DPM), estimated its first-half revenues will reach 4.945 trillion VND (226.8 million USD) and pull in profits of 810 billion VND (37.2 million USD).

The prediction would mean 3 percent more in revenues and 13 percent more in profits than the target it set at the start of the year.

Other fertiliser companies including Phu My urea, Phu My NPK, Phu My Kali (potassium), Phu My SA and Phu My DAP also did well, surpassing their targets.

According to PVFC Co General Director Cao Hoi Duong, the encouraging results could be attributed to lower oil prices in the global market, which helped reduce gas input costs at the Phu My Fertiliser Plant.

The rising quality and reputation of Phu My fertiliser products in the market and a strong distribution network both contributed to positive sales in the first six months, Duong said.

Phu My fertiliser products currently hold 48 percent of the domestic market share. According to a 2014 survey conducted by the market research firm Nielsen Vietnam, the Phu My fertiliser brand continued to best other major fertiliser brands in Vietnam.

On June 7, PVFC Co signed an engineering, procurement, construction and commissioning (EPC) contract with a contractor consortium to expand Phu My's NH3 Unit and build the Phu My NPK Complex.

The complex project, with a total investment capital of 5 trillion VND (229.4 million USD), will use up to date technology to produce local high-quality NPK fertiliser to take over the import dominated NPK market. The complex is slated to operate from the second quarter of next year.

According to Duong, growing competition, rising input costs due to non-deductible VAT for fertiliser products, as well as volatile foreign exchange rates and globally declining prices are the main challenge to the company's second half of the year.

PVFC Co projects its total sales will reach over 4.3 trillion VND (197.2 million USD) and bring in a profit of 720 billion VND (33 million USD) in the last six months of the year, slightly lower than the first half.

DPM shares were traded around 29,000 VND (1.33 USD) on the Hochiminh Stock Exchange in recent sessions.

In March, its subsidiary the Southeast PetroVietnam Fertiliser& Chemicals Co listed 12.5 million shares on the Hanoi Stock Exchange under the code of PSE.

The company said other subsidiaries including PVFC Co Southwest, PVFC Co Central, PVFC Co North and PVFC Co Packaging would debut shares in the next two quarters of the year.

3.5 bln USD for power transmission expansion over past 5 years

The National Power Transmission Corporation (EVNNPT) has completed investments worth nearly 75.3 trillion VND (3.45 billion USD), including 56.8 trillion VND of net investment (2.6 billion USD) between 2010 and 2015.

The figure represented a 2.9-fold increase from 2008-2010 and 1.5-2 times higher than its set targets.

The investment has allowed EVNNPT ensure a sufficient power supply to economic hubs in northern and southern Vietnam.

Over the past five years, the corporation put 242 transmission projects into operation with more than 8,500 kilometres of power lines and substation transformers with a total power rating of 39,349 MVA.

It has developed reliable networks of 500-kilovolt power lines in a number of locations, such as the system running from Son La through Hoa Binh, Nho Quan, Thuong Tin and Quang Ninh in the north and the system connecting Phu Lam, Cau Bong, Tan Dinh and Song May, Phu My and Nha Be in the south.

In addition, 220-kilovolt transmission stations in Van Tri and Thanh Cong together with 220-kilovolt power lines connecting Van Tri–Soc Son, Van Tri–Chem and Ha Dong–Thanh Cong commenced operations to supply electricity for Hanoi.

The company also constructed and renovated several other 220-kilovolt transmission stations across the country to prevent electrical overloads.

Credit grows by 6.09 percent in first half of 2015

Vietnam recorded a credit growth rate of 6.09 percent by June 18 compared to the end of 2014 and 18.98 percent from the same period last year, according to Deputy Governor of the State Bank of Vietnam (SBV) Nguyen Thi Hong.

Banks offered a substantial amount of credit to agriculture and rural development with outstanding loans by June 30 increasing by 7.71 percent from December 31 last year.

Credit growth was also seen by the end of March in the four other prioritised fields, namely export (3.9 percent), small- and medium-sized enterprises (1.88 percent), prioritised industries (0.2 percent), and businesses applying hi-tech (24.02 percent), Hong said at a press conference reviewing the sector’s six-month performance on June 23.

Regarding recent interest rate increases for under-six-month deposits, she said the move has been sporadic.

She explained that when the interest rate cap was set for under-six-month deposits, banks with abundant capital sources offered interest rates lower than those of other institutions. Now these banks are raising their short-term deposit interest rates to fall in line with those of their counterparts.

Interest rates for over-six-month deposits are still stable, she added, noting that overall deposit and lending interest rates were cut by 0.2-0.5 percent and 0.2-0.3 percent a year, respectively.

At the press conference, the Deputy Governor reiterated that the SBV will keep the fluctuations of the VND/USD exchange rate below 2 percent in 2015, as set in its policy for the year, though the rate has already been adjusted by 1 percent twice this year.

Conference evaluates Vietnam’s economy over the past 30 years

Economic reforms aim to broaden choices for residents, said Vo Tri Thanh, Vice Director of the Central Institute for Economic Management (CIEM) at a conference evaluating achievements and challenges for the Vietnamese economy held in Hanoi on June 23.

After 30 years of Doi Moi (reform), Vietnam has become a middle-income country with an economy shifting toward industrialisation and a high level of global integration in addition to realising a raft of millennium development goals. However, the economy suffers from low quality of growth and the workforce, high transaction costs and inefficiency in state-owned enterprises and public investment.

Thanh underscored that mindset shifts and resolve of the whole political system play crucial roles in effective reform while the liberalisation of trade, investment and integration will help enhance Vietnam’s comparative advantage.

Macro-economic stabilisation, institutional reform and private sector development also contribute to effective reform, he added.

At the conference, participants discussed visions for economic reform and development progress through 2035 and sought solutions to address financial instability, including striving for a balanced financial systems, improving the capacity of financial supervision, stabilising the macro-economy, maintaining flexible exchange rates and boosting the capacity and independence of the central bank.

Meanwhile, economist Cao Viet Sinh recommended improvements in public investment efficiency and completing a legal framework for Government purchase and public-private partnerships.

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

US$5 million for Chan May port upgrading project, VietJet Air adds more flights between Hanoi and Da Nang, Irrational fees, rules render companies uncompetitive, Lack of interest thwarts Vietnam in high-tech farming
 
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