BUSINESS IN BRIEF 28/10
Branding remains problematic for SMEs

Small and medium-sized enterprises (SMEs) still bear many shortcomings, such as a lack of capital, limited management skills, and poor human resources, which lead to low productivity, while branding isn’t given sufficient attention, according to the Association of Vietnamese Retailers (AVR).

Deputy Minister of Industry and Trade Do Thang Hai said that the construction, development and protection of Vietnamese brand have made remarkable progress since 2003, when the Prime Minister approved a decision to deploy the National Brand Vietnam Program.

Despite changing mindsets about brand building and development, the 98 per cent of Vietnamese enterprises that are SMEs still find it difficult to develop and effectively use their brands.

Most SMEs do not usually research competitive strategies and branding strategies. They are only interested in appearance and forget the foundation value, which is important for brands.

“This is a barrier for Vietnamese brands to advertise and gain a profile among customers in the domestic market, where they compete with imported products and those of multinational corporations,” Mr. Hai assessed.

In addition to specific actions to protect brands, infringements of intellectual property rights remain an issue.

Vietnamese enterprises still face a situation where foreign companies register their famous brands, leading to a loss of some Vietnamese brands on the international market.

In contrast, many enterprises have achieved success with private strategies. The Petrosetco Asset Management Joint Stock Company (PSA) is an example. With the slogan of “Active in Every Case”, PSA has grown steadily over the past ten years, overcoming many ups and downs in the market and recording rapid growth, from VND78 billion ($3.4 million) in 2008 to an estimated VND300 billion ($13.2 million) this year.

Mr. Nguyen Dang Quang, Chairman of PSA, said that from its initial establishment, it began to build brands on a foundation of a corporate culture that includes discipline, self-awareness, and complying with processes. “This creates high quality and prestige,” he said.

Mr. Dinh Hong Ky, Chairman of Secoin, emphasized that the world is changing very fast, with global integration, and tariff barriers are being eliminated completely. In order to integrate, enterprises need to think globally.

“Vietnamese enterprises should have product strategies and make private brands,” he said. “They should also create what the world has not seen already, creating niche markets."

HPL Group co-organizes indoor air quality conference

The HPL Group cooperated with the AICA KOGYO Group from Japan, the JOWAT Group and the HOMAG Group from Germany, and the MAKOR Group from Italy to hold a conference on “Trends in the Production and Use of Industrial Wooden Furniture and the impact on IAQ” (indoor air quality) on October 24.

The conference heard that formaldehyde, used in some wooden furniture production, is harmful to human health and that almost all developed countries use green materials to build apartments and protect health.

The World Health Organization (WHO) lists formaldehyde as a toxic chemical. Exposure affects the skin and respiratory system and can cause cancer, especially leukemia. It can also be harmful to the development of the fetus during pregnancy.

“The quality of the outside air has often been discussed but never the quality of indoor air, where we work,” said Mr. Pham Van Luong, Chairman of the HPL Group. “A study by the Environmental Protection Agency (EPA) in the US found that indoor air pollution is a serious problem and causes high mortality, as 80-90 per cent of human activity takes place in the home.”

One of the largest sources of indoor air pollution, he said, is furniture, especially furniture made from poor quality industrial wood.

Vietnam has nearly 7,000 enterprises in the wooden furniture industry, he went on, of which nearly 3,000 are exporters. Production value in the furniture industry last year was estimated at $770 million and is expected to exceed $1.1 billion by 2020. 

“However, more than 80 per cent of furniture in the market is made from industrial wood,” he noted. “It’s difficult to control formaldehyde in furniture products and most products are produced by workshops and households in handicraft villages.”

He optimistically announced that his group has cooperated with the AICA Group on importing green products and that many international groups are interested in Vietnam’s furniture market because of its potential.

Mr. Tagawa Daichi, Regional Manager of the AICA Group said that at concentrations above 0.1mg per kg in the air, formaldehyde inhalation causes irritation of the eyes and mucous membranes, headaches, throat heat, and dyspnea.

“The formaldehyde solution converts to formic acid in the body, and increases cardiac activity, rapid breathing, vomiting, and hypothermia, and leads to coma and death,” he said. “There is strict control over formaldehyde emission levels in Japan.”

The HPL Group aims to construct green living spaces that are safe for users, so it has imported laminated products from the AICA Group, a product leader in Japan.

HPL expects to bring new products and build safe environments for customers as the rate of urbanization increases.

Japanese products must be compatible with the environment, ensuring safety for consumers, and AICA uses green technology in production. The products of AICA are always of F **** standard, an international standard certifying the level of formaldehyde emissions from products is 0 ~ 0.001ppm, and does not include factors harmful to the environment or customers.

The AICA Group is the supplier of interior surface panels, the JOWAT Group is the leading adhesives manufacturer in the world, the HOMAG Group supplies machinery and equipment for the wooden processing industry, and the MAKOR Group provides state-of-the-art machinery and automation equipment that minimize overload, improve production rates, and enhance environmental protection.

Japanese investors pour fund in Da Nang manufacturing and hotel projects
     
Yamato Sewing Machine Manufacturing company from Japan plans to build a factory in Da Nang Hi-Tech Park providing sewing machines, spare parts and accessories as well as automotive equipment in sewing industry.

The city’s investment promotion agency (IPA) confirmed to Viet Nam News that the firm is the third Japanese investor at the park.

It said Yamato will soon commence construction of the project on 2.85ha with total investment of US$28 million.

Yamato has had representative offices in Ha Noi and HCM City from 2007.

The 1,010-ha park in Hoa Vang District, 20km west of the city, attracted six projects valued at $180 million from two Japanese and four domestic investors between 2012-16.

According to the IPA, two Japanese companies – Mikazuki and Katsuura – will start construction of a complex of hotel, entertainment and beach resort on 24.5ha in Lien Chieu District with total capital of $110 million next year.

Japan is the second largest investor in Da Nang with 134 projects worth $598 million. 

Concrete and Cement Expo Viet Nam 2017
     
The Concrete and Cement Expo Viet Nam 2017 opened at the National Exhibition Construction Centre (NECC) in Ha Noi on Wednesday.

The exhibition, which is organised by Fireworks Viet Nam, covers an area of 2,500 square metres both in and outdoors.

Up to 2,000 visitors are expected to attend the two-day event.

The event attracted many foreign enterprises from Singapore, Indonesia, Malaysia, China, South Korea, India, Australia, the United States, Italy and Taiwan (China) along with Vietnamese enterprises such as Xuan Mai Investment and Construction Corporation and Song Day Construction Materials Joint Stock Company.

The expo will be an ideal opportunity for domestic enterprises to promote their products, enhance reputations and expand markets for international integration.

Specialised workshops are also being held alongside the exhibition period with the participation of experienced experts in the industry such as Siam City Cement Viet Nam, Viet Nam Cement Association, Penetron Viet Nam and Fuzhou University (China), which will bring new technology trends and concerned topics in order to help enterprises judge the context of the concrete and cement market to determine their production and business development.

Japan invests big in Binh Duong
     
Japan remains the second-biggest investor in the southern province of Binh Duong with a total of 249 projects, worth US$5.2 billion, according to the provincial People’s Committee.

Nguyen Thanh Truc, director of the province’s Department of Planning and Investment, said during a meeting on Wednesday with Japanese investors that investment from Japanese enterprises accounted for nearly 19 per cent of total foreign direct investment in the province.

Following Taiwan, Japan remains the second biggest investor in the province, he said.

Japanese companies have invested in the Tokyu Binh Duong property project with capital of $1.2 billion and Wonderful Saigon Electrics has received $450 million investment from the Sun-S group at the Viet Nam – Singapore Industrial Park. Aeon Mall, a trade centre project, has received investment of $95 million.

“The Japanese have continued to invest in Binh Duong, which is a positive sign proving that Binh Duong remains attractive to foreign investors in general and Japanese investors in particular,” Truc said.

Kawaue Junichi, General Consul of Japan in HCM City, said that along with relations between Viet Nam and Japan, relations between Japan and Binh Duong Province had developed strongly.

With a high development growth rate, Binh Duong has attracted many foreign investors, he said, adding that Japan is also investing in many infrastructure and transportation projects in HCM City.

Binh Duong is expected to become an important hub for Japanese enterprises in the coming time, he added.

On Wednesday, the provincial authorities met with Japanese investors who have projects in the province to help them overcome obstacles they are facing.

This is the second time this year that the province has organised this kind of meeting with Japanese investors.

At the meeting, investors spoke about difficulties, including social insurance for foreign labourers, customs issues, provisional stays, transportation, machine imports, human resources training, kindergartens for kids of labourers, time needed to grant investment certificates, and wages.

All of the questions were answered at the meeting by local officials.

The People’s Committee of the province holds regular meetings with enterprises. It aims to solve difficulties that companies face and to create an advantageous investment environment for investors.

At the meetings, representatives from sectors answer questions and give guidance to companies about legal issues relating to their operation and investment in the province.

Two high-tech farm projects approved in Da Nang
     
Da Nang City has approved two high-tech farming projects in suburban Hoa Vang District as part of the city’s agricultural development master plan.

The city said the two projects, which received investment licenses last week, will be built on 25ha in Hoa Ninh and Hoa Khuong communes with total investment of US$5 million.

It said two local investors – Green Tech construction investment joint-stock company and Hapras Viet Nam joint-stock company – will build a hydroponic garden and high-tech farm, respectively.

The two projects aim to provide safe farm produce, organic fertiliser and high-tech farming solutions for the central and Central Highlands region and for export.

Last year, Da Nang assigned seven suburban communes in Hoa Vang District for high-tech farms on a total area of 540ha as part of a strategy to develop the city as a centre of nano-industry and world-class high-tech farms. The city has recognised 12 farms with certifications of safety and quality, as well as brand names in La Huong and Tuy Loan villages.

VN aquaculture trade show opens new doors
     
The 2017 Aquaculture Vietnam Exhibition and Conference (Aquaculture Vietnam) opened on Wednesday in Can Tho City, in response to increasing aquaculture production and rising demand worldwide for safe and high-quality seafood products.

Dao Anh Dung, vice chairman of Can Tho City’s People’s Committee, stated at the conference yesterday that despite immense growth opportunities, the nation’s aquaculture industry still suffers from some setbacks in terms of diseases, regressions and climate change.

Therefore, the need for technological transfers, scientific breakthroughs and high-tech innovations in aqua-farming is urgent and evident for Viet Nam’s seafood production to improve its value addition and integrated production chain towards international standards, he concluded.

This year’s conference hopes to provide an international business and education platform, focusing on technologies, innovations and solutions for aquaculture farming in Viet Nam, covering key exports such as shrimps and catfish, especially in the Mekong Delta region.

The conference continues until October 27, featuring concurrent speeches and panel discussions by aquaculture experts from research institutions and companies in Viet Nam and other countries.

Some notable topics of discussion during this year’s Aquaculture Vietnam expo include the development of a seafood value chain, export potential for Vietnamese catfish and addressing corporate social responsibility within the domestic aquaculture industry.

Vo Hung Dung, vice president of the Vietnam Pangasius Association, said at the conference he believed it was a crucial promotion opportunity to introduce new practical technologies to farmers and showcase a thriving domestic aquaculture market.

Agreeing with Dung, Sylvain Paul Lacladere, Bayer Vietnam Ltd.’s country head of animal health, expressed his hope to provide the best solutions for disease control in aqua-farming, as well as to discuss possible cooperation with Vietnamese aquaculture industry professionals at 2017 Aquaculture Vietnam.

Hosted by the Directorate of Fisheries (DoF) under the Ministry of Agriculture and Rural Development (MARD), 2017 Aquaculture Vietnam is being held at the Can Tho International Exhibition Fair Centre. It is one of the country’s most important trade shows and an international meeting place for 70 exhibitors and hundreds of representatives from the aquaculture industry in the region and across the globe.

Aquaculture is considered a spearhead industry for Viet Nam’s economy, with annual export turnover reaching billions of US dollars, generating millions of employment opportunities and contributing to stabilising the national socio-economic scene.

Tran Dinh Luan, deputy director of DoF, commented that the country should invest more heavily in technological development, advanced production and management methods to improve productivity, quality and sanitation in the aqua-farming process.

According to Luan, the aquaculture industry is clearly important in establishing the country’s name and image in the world market.

Data from MARD shows that in 2016, Vietnamese seafood export turnover increased by 7.4 per cent from 2015, reaching US$7.05 billion and accounting for 24 per cent of national agricultural related exports.

By the third quarter of 2017 alone, total output for the aquaculture industry was four million tonnes, increasing four per cent from the same period last year.

The Mekong Delta region is home to 52 per cent of total seafood and 67 per cent of total farmed aquaculture products, clocking in at 65 per cent total exported value. Can Tho, in particular, is the chief producer of seafood with total output of 199,817 tonnes in 2016. 

Hanoi promotes hi-tech agricultural development

A workshop was held in Hanoi on October 25 to introduce businesses to the city’s preferential policies for the agricultural sector, especially hi-tech agriculture, in order to promote investment in hi-tech agriculture in the capital.

Nguyen Thi Thoa, head of the Plantation Division under the municipal Department of Agriculture and Rural Development, said that Hanoi has no zones dedicated to hi-tech agricultural production.

The value of hi-tech agricultural products accounts for only 25 percent of the total value of agricultural products.

The city aims to raise the proportion to 35 percent in the future, Thoa stated, adding that it is building a 96.6ha hi-tech agricultural zone in Dong Anh district and is taking measures to increase the application of advanced technologies in agricultural production.

Director of the Information Center for Agriculture and Rural Development Nguyen Anh Phong introduced participants to preferential policies which encourage enterprises to invest in hi-tech agriculture, as well as criteria to define hi-tech agricultural products.

At the workshop, participating businesses proposed the State provide land support policies as there is a lack of large land lots for them to develop concentrated production areas.

They also said they hope to receive assistance in infrastructure, taxation and credit.

Firms ’overly-optimistic’ on EVFTA

Vietnamese firms are “overly-optimistic” about labour conditions regulated in the EU-Việt Nam trade agreement, a Vietnam Chamber of Commerce and Industry (VCCI) official said.

High international standards for labour, including a demand for independent unions, were what set apart the European Union-Việt Nam Free Trade Agreement (EVFTA) with other FTAs Việt Nam has signed.

During a workshop on the Vietnamese workforce in Hà Nội yesterday in preparation for the EVFTA which is expected to come into effect next year after being ratified by both sides, the VCCI’s World Trade Organisation Centre Director Nguyễn Thu Trang said that she feared Vietnamese firms were being too optimistic in perceiving changes the EVFTA would bring to their workforce.

She cited a survey by the VCCI on some 250 businesses across all sectors nationwide last year, of which more than 90 per cent believed that the EVFTA would improve workforce quality.

“The (survey) result was quite astonishing. Higher labour standards of the EVFTA are supposed to make it more difficult for the businesses, yet they had little worries about it,” Trang said.

The reason for such optimism, she added, might lie in the ignorance of the business community about the trade agreement.

The same survey shows that up to 83 per cent of the surveyed businesses had heard about the EVFTA, but only about 8.5 per cent knew it well, she said.

While a lack of knowledge might leave enterprises unprepared for the deal, others who were trying to get prepared were faced with a crippled labour training system, Trang added.

The Institute of Labour Science and Social Affairs head Đào Quang Vinh said that the labour structure in Việt Nam was going in the opposite direction from the rest of the world.

“Normally those with higher education would be less in number than skilled workers in a labour pool,” Vinh said.

“But Việt Nam has the opposite situation.”

Worse still, the number of labourers without any training is only decreasing at a very slow pace.

Việt Nam had about 82.6 per cent of its workforce untrained in 2007, and only managed to bring the number to 79 per cent in 2016, according to Vinh. This was equivalent to around 42.9 million of people in the labour pool without any working skills.

HCM City promotes trade, investment in Australia

Ho Chi Minh City’s business climate and business development strategies were introduced at an Investment-Trade-Tourism Promotion conference in Sydney, Australia on October 25.
The event, held by the city’s Investment and Trade Promotion Centre (ITPC), was attended by Vietnamese Consul General to Sydney Hoang Minh Son, representatives from the Australia-Vietnam Business Council and Vietnamese and Australian investors in services, tourism, accommodation and real estate.

In his opening remarks, Son said that Vietnam and Australia have become important trade partners, with bilateral trade doubling to 6 billion USD in 2017 from 3 billion USD in 2007.

Both sides boast huge potential for bilateral cooperation, he said, stressing that Ho Chi Minh City will become an attractive destination for Australian investors.

He noted that the Vietnamese Government and diplomatic agencies in Australia create favourable conditions for ties between businesses and authorities of the two countries. The conference served as a venue for enterprises from both sides to seek cooperation opportunities, he stated.

For his part, ITPC Director Pham Thiet Hoa said that the city was the most attractive destination in the country for foreign investment in 2016 with 836 new projects worth 3.42 billion USD, 14 percent of the nation’s total investment. In the first nine months of 2017, the city continued to lead cities and provinces nationwide in foreign direct investment with total registered capital of 3.74 billion USD, he said.

The southern hub is working to improve administrative procedures, issue new laws, give out initiatives and improve infrastructure to lure foreign investment, he emphasised, adding that the city is prioritising investment in mechanics, information and technology, pharmaceutical chemistry and food processing.

Australian businesses’ queries on investment procedures, preferential policies and measures to promote tourism were responded at the conference.

Similar promotion conferences will be held in Melbourne and New Zealand.

Japan’s big investment proves Binh Duong’s attractiveness: Consul General

Many Japanese companies have continued to choose Binh Duong to make investment, proving the attractiveness of this southern province’s investment climate to foreign investors, said Kawaue Junichi, Consul General of Japan in HCM City.

He made the remark at a meeting between Binh Duong authorities and Japanese investors on October 25.

He said that along with relations between Vietnam and Japan, relations between his country and Binh Duong have developed strongly.

With a high development growth rate, Binh Duong has attracted many foreign investors, he said, noting that Japan is also investing in many infrastructure and transportation projects in HCM City.

Binh Duong is expected to become an important hub for Japanese enterprises in the coming time, he added.

Director of the provincial Department of Planning and Investment Nguyen Thanh Truc said Japan remains the second biggest investor in Binh Duong with a total of 249 projects worth 5.2 billion USD. Investment from Japanese enterprises accounts for nearly 19 percent of total FDI here, according to the provincial People’s Committee.

Japanese companies have invested in the Tokyu Binh Duong property project with capital of 1.2 billion USD, and Wonderful Saigon Electrics has received 450 million USD investment from the Sun-S group at the Vietnam – Singapore Industrial Park. Aeon Mall, a trade centre project, has received investment of 95 million USD from Japan.

“The Japanese have continued to invest in Binh Duong, which is a positive sign proving that Binh Duong remains attractive to foreign investors in general and Japanese investors in particular,” the local official said.

The provincial authorities met with Japanese investors who have projects in the province to help them overcome obstacles they are facing.

This is the second time this year that the province has organised this kind of meeting with Japanese investors.

More Vietnamese dragon fruits shipped to Australia

The first batch of Vietnamese dragon fruit was sold at Perth Market City in Western Australia by the Empro Company, a Western Australian Fruit & Vegetables wholesaler, on October 24.

Empro Director, Phan Son, who is an overseas Vietnamese in Perth, said Vietnamese dragon fruits were sold quickly in Asian super markets and IGA grocery stores in Perth city.

The company has signed an agreement to bring more Vietnamese dragon fruits to the Coles super market network in Australia, he said.

It plans to have more Vietnamese dragon fruits shipped via seaways to Australia to ensure competitive prices while introducing sweeter red-pulp dragon fruits to the market.

He expressed his hope that seasonal ietnamese fruits and vegetables will soon be present at Australian super markets.

This is the third batch of dragon fruits Vietnam has shipped to Australia, following the batches to Sydney and Melbourne in September.

Vietnam aquaculture export and forum opens in Can Tho

The international Vietnam Aquaculture Expo and Forum 2017 kicked off in the Mekong Delta city of Can Tho on October 25, attracting over 70 domestic and foreign exhibitors. 

The event, themed “Aquaculture – profitable and sustainable trade”, featured eight important contents, including manufacturing and supply of aquatic varieties, nutrition and feed technology in aquaculture, epidemic diseases control and environment in aquaculture, among others. 

Tran Thi Thu Ha, Vice Chairwoman of the Vietnam Fisheries Association, said among the total water surface area of more than 1.7 million ha, over 1 million ha is used for aquaculture. 

However, the sector is facing challenges such as epidemic diseases, climate change, shortage of skilled workers, technology and trademark. 

Vietnam is expected to earn 11 billion USD from fisheries export by 2020 with an average growth of 7-8 percent for the 2011-2020 period. The total fisheries volume will near 7 million tonnes. 

Vice Chairman of the municipal People’s Committee Dao Anh Dung said the event affords agriculture and rural development sectors of cities and provinces and Can Tho in particular a chance to introduce technological advances in aquaculture exploitation and preservation. 

The three-day event is expected to attract over 4,000 people from businesses and farms in 13 Mekong Delta cities and provinces and other localities.-

New-generation FTA critical to Vietnam-EU economic ties: workshop

Vietnam hasn’t had any free trade agreements (FTAs) with EU member countries, but with the importance of Vietnam-EU relations, a bilateral new-generation FTA is critical to promoting their economic ties.

The remark was made by President of the Vietnam Academy of Social Sciences Nguyen Quang Thuan at an international workshop in Hanoi on October 25. The event aimed to assess the country’s labour quality and suggest policies to improve local workforce once the EU-Vietnam Free Trade Agreement (EVFTA) takes effect.

Thuan noted the EU is the second biggest trade partner of Vietnam with bilateral trade estimated at over 45 billion USD in 2016. Meanwhile, they have few commodities that directly compete with each other.

The negotiation on the EVFTA officially finished on February 1, 2015. The deal is expected to take effect in 2018.

Analysing its impacts, economists at the workshop said amidst Vietnam’s strong economic integration, the EVFTA and other FTAs have great influence as they will contribute to Vietnamese firms’ development and reform and help both foreign and domestic investors to grow in markets with FTAs.

Trade in goods will be the most promising field for Vietnam and the EU since tariff cuts will fuel export and import activities which have already been thriving. To the EU, some service sectors that it is strong in such as finance-banking, distribution and transportation will benefit immediately when the EVFTA comes into effect.

Participants noted that the commitments and regulations in the trade pact will create a more favourable business climate, helping Vietnam to perfect relevant policy system and create a solid foundation for both sides’ businesses to capitalise on the EVFTA.

During the deal negotiation, Vietnam and the EU also agreed on a framework for cooperation and capacity building programmes in the areas of mutual concern. This framework will also help Vietnam build legal system and implement its commitments in the FTA, thereby enhancing bilateral win-win trade and investment activities.

Egg Summit takes place in Vietnam for first time

The Egg Summit 2017 is taking place in Hanoi for the first time from October 23-25, gathering 120 businesses in the poultry farming industry from 30 countries and territories.

The summit, the second of its kind in the world, was organised by the Japanese ISE Foods Company with support from the Embassy of Japan and the Japan International Cooperation Agency (JICA). ISE Foods is one of Japanese largest breeding enterprises, which began expanding its brand name to the US in 1980.

At the summit, the businesses discussed and shared experiences over efficient egg production systems, epidemic disease control and quality management. ISE also introduced its egg production chain to the businesses, aimed at providing more high-quality eggs to consumers.  

In Vietnam, ISE Foods hopes to cooperate with Vietnamese partners to produce clean and safe eggs. 

The first Egg Summit was held in 2015 in Tokyo with representation from Japanese Prime Minister Shinzo Abe, the Foreign Minister, Agriculture Minister and other high-level officials of the Japanese Government.

New Auchan supermarket opens in Hanoi

Auchan Retail Vietnam opened a new supermarket in Hanoi on October 24.

The store, the fourth in the capital and the 16th in the country, is located in Tower C, Kim Van Kim Lu new urban area, Hoang Mai district.

The site spans 1,600sq.m and stocks 10,000 kinds of goods including food, cosmetics, furniture, clothing and electrical goods and household appliances.

“We want to fight for fresh, clean food products, and for people’s health,” said Jorge Fernandez Asensio, General Director of Auchan Retail Vietnam. “With a commitment to ‘low cost everyday’ we want to contribute to develop the local economy and meet the demand of the local people.”

The Auchan group was founded in 1961 and is France’s second largest retail distribution network. The group’s stores are present in 16 countries.

Thanh Hoa: Nearly 20 billion VND for winter crop restoration after floods

The People’s Committee of central Thanh Hoa province has approved funds of nearly 20 billion VND (869,000 USD) for 2017-2018 winter crop restoration in the wake of recent floods. 

Farming households, cooperatives and businesses that buy corn for animal feed will receive 900,000 VND per ha. Those purchasing chilli and potato varieties will get 1.3 million VND and 12 million VND per ha, respectively. 

Others with at least 5ha of corn and 3ha of chilli, potato, vegetable and bean cultivation will receive a grant worth 3 million VND per ha each. 

In the first stage, 12.8 billion VND will be paid in advance. 

During the recent floods, up to 1,912 ha of rice and 12,043 ha of vegetables were destroyed.

Kuehne + Nagel promote seamless digital supply chains
     
Global transport and logistics company Kuehne + Nagel on Wednesday held a conference on “logistics transformation and infinite digital opportunities” in HCM City to discuss the importance of a seamless digital supply chain.

Global and regional trends in digitalisation in the supply chain and understanding big data were among the main issues discussed.

Alexander Cohrs, head of Kuehne + Nagel AG’s Digital Communication, said the company aimed to become a fully technology-enabled and data-driven value chain provider.

He stressed the importance of a seamless digital supply chain comprising core elements such as automation, connectivity, big data, and new digital solutions.

Director of Sales and Marketing at LogIndex AG Hans Peter Arnold said the Kuehne + Nagel’s blockchain technology can predict the risk of unexpected events, ensuring smooth delivery of clients’cargo.

Blockchain technology allows companies to efficiently build business ecosystems between supply chain parties, accelerate flow of data distributed between parties, and enhance trade security, among other benefits, Cohrs said.

Arnold said the logistics industry in general was facing increased complexity, regulations and infrastructure; cybersecurity issues; disruptions; threats to free trade; volatile markets; and higher expectations from clients.

“I’m glad to see that Viet Nam is ranked fourth in potential for logistics industry investment, following India, China, and Brazil,” he added.

While Viet Nam mostly imports goods from Asian countries like China, South Korea and Japan, its largest export market is the US, he said.

Arnold said that logistics transformation trends include visibility across the supply chain, lean and agile hybrid supply chain strategies, better risk control, automated processes and dashboards with alerts. 
     
Tertiary training offered to bankers
     
The United Overseas Bank (UOB) has partnered with the Foreign Trade University (FTU) in Viet Nam to launch the finance industry’s first tertiary education programme designed for bankers that serve small businesses.

Speaking at a press conference held yesterday in the city, Harry Loh, country manager of UOB’s HCM City branch, said that small- and medium-sized enterprises (SMEs) formed the backbone of Viet Nam’s economy, accounting for 97 per cent of the country’s businesses.

“SMEs are among the most optimistic about their growth prospects within Asia Pacific,” he added.

In addition, four out of five of SMEs sought external finance last year to help them take advantage of business opportunities, according to the CPA Australia Asia-Pacific Small Business Survey 2016 – Market Summary: Viet Nam.

As SMEs manage and grow their business, they need to navigate complex areas such as business planning, cash-flow management and international trade risks.

The UOB-FTU Banker’s Executive Certificate Programme combines classroom-based study in credit and risk management, trade financing and regional regulatory frameworks, with practical skills training such as best practices for customer onboarding.

Upon completion of the programme, UOB bankers will be better equipped to help SMEs with their business needs and to overcome the challenges they may face.

Loh also said that UOB was committed to ensuring its bankers have in-depth knowledge and skills required to support the business growth ambitions of its customers.

“We expect that more Vietnamese SMEs will pursue business opportunities within the region as they tap the economic benefits arising from the ASEAN Economic Community,” he said.

“As such, their needs will have to be supported by bankers who possess specialist skills and who understand what it takes to succeed in doing business across borders, whether it is in managing foreign exchange risks or navigating the regulatory landscape in different markets,” he added.

Associate Prof. Nguyen Xuan Minh, director of the FTU HCM City Campus, said the joint training programme would address the increasing demand for skilled professionals in the banking sector.

The programme is specifically designed to improve the skills of bankers as they support Viet Nam’s SMEs to seize regional growth opportunities, he said.

Headquartered in Singapore, UOB has a global network of more than 500 offices in 19 countries and territories in Asia Pacific, Europe and North America. 

BIDV’s pre-tax profit touches $266 million
     
Bank for Investment and Development of Viet Nam (BIDV)’s total assets reported pre-tax profit of VND6 trillion (US$266 million) in 2017’s first nine months, posting a year-on-year increase of 6.7 per cent.

The bank on Wednesday announced that its total assets reached some VND1.12 quadrillion until the end of September, up 12 per cent from the beginning of this year and representing an increase of 8.42 per cent from the same period last year.

The report also said capital mobilised was relatively high at VND1.05 quadrillion in the nine-month period, increasing 12.1 per cent from the beginning of the year and meeting its credit growth requirement.

Its loans have focused on the production and trading sector with emphasis on short-term lending. Its total credit and investment was VND1.08 quadrillion, up 13.7 per cent from the beginning of the year.

The bank’s credit growth has been higher than the banking sector’s average level of 12.16 per cent, of which loans to companies and residents amounted to VND828 trillion, BIDV said.

Its outstanding loans in the period in prioritised sectors -- agriculture, rural development, exports, small-and-medium sized enterprises, support industry and companies applying hi-tech industries -- rose 19.2 per cent from the beginning of the year, accounting for 50 per cent of the total outstanding loans.

BIDV’s leaders said results in the January-September period were positive, creating momentum for it to complete targets this year. High credit growth in the beginning months of the year resulted in increased profit. In addition, the bank’s services and foreign exchange activities also contributed to growth.

In the last quarter of the year, BIDV will continue to enhance management of credit in each sector to ensure capital demand. It will focus its resources on implementing the restructure plan and resolving bad debts in the 2017-20 period, while accelerating capital increase under its roadmap. 

Việt Nam International Motorshow opens in HCM City
     
The annual Viet Nam International Motorshow opened on Wednesday in HCM City with 13 leading automakers taking part.

The third edition of the event not only showcases carmakers’ flagship models but also, for the first time, motorbikes and yachts.

Spread over an area of over 10,000sq.m at Sai Gon Exhibition and Convention Centre in District 7, the exhibition displays over 100 of the latest models of cars from Audi, Dongfeng, Jaguar, Land Rover, Mercedes-Benz, SsangYong, Subaru, Volkswagen, and Volvo; motorbikes from Harley-Davidson, Triumph, and Royal Enfield; and yachts from Tam Son Yachting.

Besides new models there are also special editions and limited offers.

Audi showcases its latest sporty and luxury models such as TT Coupe, A4, A6, A8L and Q series, and has launched its new A3 Sportback 1.4 TFSI.

At the Dongfeng Motor booth, car lovers can get a look at S50, a sports car the Chinese company launched recently.

Jaguar has brought its XE, XF, XJL, F-Type, and F-Pace while Land Rover has Discovery Sport, Range Rover Evoque, Range Rover Sport AB and Range Rover AVAutobiography.

Mercedes-Benz is showing its sedan collection from the A-Class to S-Class, SUVs and the Maybach S400.

Tran Vinh Tuyen, vice chairman of the HCM City People’s Committee, said: “I am confident that events such as VIMS not only meet the demands of consumers better but also promise to be a reputable forum for Viet Nam automobile importers and manufacturers to hold exchanges and seek opportunities for co-operation and development.”

This year the event also showcases vintage cars. A vintage car corner features a collection of iconic automobiles from last century such as the 1967 Mini Cooper, 1949 Audi, 1967 Karmannn Ghia Cabriolet and 1942 Citroen Traction.

Visitors can also enjoy outdoor performances such as a stunt show by Subaru and test drives offered by Jaguar Land Rover.

The five-day auto show also features supporting industry brands like GMD – Dcar, Motul, Anglomoil, and SunTek.

The event is open to the public from 9am to 8pm from Wednesday until Sunday, October 29. 

HN hosts VN Medi Pharm Expo in December
     
The Viet Nam Medi Pharm Expo 2017 will return to the capital city from December 7 to 9 with the participation of 150 enterprises from 18 countries and territories.

Among these exhibitors are those from Viet Nam, South Korea, mainland China and Taiwan, as well as India, Malaysia, Australia and Canada, along with the Czech Republic, Germany and the United States.

According to the event’s organiser – Viet Nam National Trade Fair and Advertising Co – the number of international and domestic firms participating in this year’s expo has increased by 15 per cent and 10 per cent, respectively, compared with the previous event.

The upcoming exhibition will focus on presenting medical and laboratory equipment, healthcare products, pharmaceuticals and functional foods, as well as cosmetics, cosmetic equipment, processing machinery and pharmaceutical packaging products, along with dental and ophthalmic equipment.

The expo is designed to promote trade activities in pharmacy and medical equipment. The exhibition is a platform for advanced medical technologies and equipment companies from around the world to access local private and public hospitals as well as local pharmacy companies, in which Viet Nam has the advantage to initiate exchange.

The event will be held at the Ha Noi International Exhibition Centre on Tran Hung Dao Street. 

Creating momentum for Vietnam’s automobile industry

Due to the underperformance of Vietnam's auto supporting industry and the import of 75-80% of auto parts and components, the production costs of automobiles have been pushed up, making it difficult to compete with other countries in the region. Therefore, the removal of bottlenecks for the development of the auto supporting industry will not only give the impetus for the automobile industry but also for the whole economy.

By the end of 2016, Vietnam had approximately 173 enterprises manufacturing and assembling automobiles, including 56 enterprises producing automobiles from spare parts and components and 117 others assembling automobiles from completely knocked-down (CKD) automobiles with a total capacity of approximately 500,000 units per year, meeting around 70% of the domestic demand for automobiles below nine seats and passenger automobiles.

However, Vietnam’s automobile industry has yet to develop in a methodical and stable manner or meet the domestic consumption and export demand.

The shortcomings may be due to the lack of links and specialisation between automobile manufacturers and part suppliers, in addition to the lack of a system of suppliers of raw materials and components on a large scale. The high selling prices of automobiles, compared with other countries in the region, and low domestic content also causes difficulties for the automobile industry in its attempts to increase the market size in order to reduce the selling prices and compete with imported vehicles.

Chairman of the Vietnam Automobile Manufacturers’ Association (VAMA) Yoshihisa Maruta said that these inadequacies are due to the underdevelopment of Vietnam's auto supporting industry. He noted that 90% of auto part suppliers in Vietnam are foreign direct investment (FDI) enterprises and only a small number of domestic firms have participated in the supply network for automobile assembly and production.

Meanwhile, the production costs of spare parts and components in Vietnam remains higher than those imported from other countries in the region, such as Thailand and Indonesia, due to the modest market size. As a result, 75-80% of spare parts and components for domestic automotive production are currently being imported.

In addition, due to using imported components, automobile manufacturers in Vietnam have to pay additional costs such as packaging, transportation and import taxes that also contribute to raising the production costs.

Meanwhile, as of 2018, the import tax on complete-built-in (CBU) units on automobiles imported from ASEAN nations will be cut down to 0% but the import tax on components and spare parts remains higher than 0%. Therefore, the representative from VAMA said that the domestic automobile industry will find it very difficult to compete and survive, leading to the development of the auto supporting industry being impeded.

Economists have stated that if the government has determined automobile and part manufacturing as an important industry, the existing bottlenecks must be removed with the development of specific solutions and actions so that the auto supporting industry will escape from the current sluggishness.

A representative from the Truong Hai Auto Corporation proposed that the policies on the automobile and auto supporting industries should be synchronous and stable for at least 10 years in order to attract investors.

There should be a mechanism in place providing exemption from special consumption tax for the percentage of components produced domestically to contribute to reducing the prices of automobiles produced in Vietnam and increasing output for domestic consumers.

Meanwhile, the government should implement a policy to train hi-tech human resources for the automobile and auto supporting industries, particularly the personnel in the area of research and development towards the trend of Industry 4.0.

Furthermore, the government need to promote the role in connecting international corporations with domestic suppliers as domestic suppliers are often small and encounter difficulties in gaining direct access to large enterprises.

Other economists said that it is necessary to promote the development of the auto supporting industry aligned with increasing the domestic content of automobile production in order to boost the development of the automobile industry. Therefore, it is advisable to put forth policies to encourage automobile manufacturers to use domestic components and to reduce the corporate income tax based on the localisation rate of vehicles.

On the other hand, associations, automobile manufacturing and assembling companies and part suppliers also need to promote links and cooperation to make effective use of the available resources and consume products produced by each other for mutual development. 

The Ministry of Industry and Trade has established a working group including many related sectors to make a full evaluation of the automobile market in relation to the regional and global markets. The working group has collected recommendations and opinions from auto manufacturers and has proposed solutions to support enterprises, including adjusting the policies on tax and the market, while forming a system of part suppliers along with supporting domestic automobile manufacturers to cut down on production costs, lower prices, and improve product quality.

Deputy Director of Industry Pham Tuan Anh said that one of the key solutions to develop the auto supporting industry in the future is to increase the cooperation between domestic enterprises and large foreign enterprises in the area of part supply, with the focus on increasing hi-tech content to serve the domestic demand and gradually replace imported components.

Despite facing many difficulties, statistics show that there is room for Vietnam to become one of the potential auto markets in 10 to 15 years. With the anticipated average income per capita standing at US$3000 by 2020, Vietnam is expected to enter the stage of motorisation in the 2020-2025 period, with the total demand up to 600,000 units per year by 2025. With this scale, the market will have the capacity to attract resources to develop in a stable manner.

It can be seen that Vietnam still has opportunities to develop its auto and auto supporting industries based on market pull, the driving force of technology and the support of policies which will contribute to increasing the competitiveness of the automobile industry, meeting the domestic demand and remaining prepared to integrate into the world market.

HCM City ready to cooperate with Airbus in smart urban transport development

Ho Chi Minh City stands ready to cooperate with Airbus Group, including its subsidiary Dornier Consulting International GmbH (Dornier GmbH), in developing smart urban transport in the city, said Secretary of the municipal Party Committee Nguyen Thien Nhan.

He made the remarks at a reception for a delegation of leaders from Airbus-Dornier and Komtek, a consulting company, led by Michael Holzschneider, Business Director Airports of Dornier GmbH, on October 25.

Nhan said that HCM City is facing various difficulties that are hindering development, such as urban transport, ground depression and climate change impacts. What it needs to solve now is how to make the best use of Tan Son Nhat International Airport without having to upgrade a lot of the airport or the urban transportation system, especially around the airport.

Public-Private Partnerships (PPPs) play an important role in the development of Vietnam in general and HCM City in particular, he said, stressing that Vietnam has adjusted its legal regulations on PPPs towards national construction and development.

The southern metropolis wishes to enhance PPPs with international investors and welcomes Dornier GmbH to participate in an international conference on PPPs to be held by the city in the future, Nhan said.

For his part, Michael Holzschneider said that with their experience in consulting on airport upgrades, Dornier GmbH wants to expand its cooperation with Vietnam and HCM City in aviation, seaports and transportation systems connecting airports and residential areas.

The company wishes to work with HCM City in PPP investment, with priority given to public interests, he said.

He suggested that HCM City deal with traffic jams, especially around Tan Son Nhat airport, stating that Dornier GmbH is willing to work with the city to study and address the problem.


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