Cardholder declines compensation from DongA Bank

DongA Bank offered VND58 million ($2,555) as advance compensation for the cardholder who lost VND116 million ($5,110).

Doan Thi Ngoc Duyen of Ho Chi Minh City’s District 12 told that she received feedback from DongA Bank on July 12. The bank stated that it was inspecting the customer’s case to try and ascertain why VND116 million ($5,110) disappeared from her ATM account on the night of June 27.

A camera system used by DongA Bank was checked and it was found that transactions had been carried out by another person, whom Duyen could not identify. Criminal activity is suspected so the case has been handed to an investigation agency.

DongA Bank noted that before losing the money, Duyen gave her card to her husband to withdraw money. She did not comply with regulations of the bank and Circular No.19/2016/TT-NHNN of the State Bank of Vietnam in keeping her card information secret.

DongA Bank has offered VND58 million ($2,555) as advance compensation, equivalent to half of the total money lost, while waiting for the report from the investigation agency.

However, the customer has not agreed to the compensation and wishes to be repaid in full for the lost amount. She claims not to violate the regulations of the bank because she has authorised her husband to withdraw money from her account on previous occasions.

“Losing money from the bank account is not my fault, so the bank should not make me wait for the conclusion of the investigation. I don’t know when I will receive my money,” said Duyen.

Duyen has hired a lawyer who has sent a response document to DongA Bank. The lawyer has asked DongA Bank to repay in full or compensate all the lost money within the next seven days.

At around 4am of June 27, DongA Bank sent five messages to Doan Thi Ngoc Duyen announcing that VND96 million ($4,230) in her account had been transferred to another account, followed by two messages announcing that VND20 million ($880) had been withdrawn in cash. As a result, Duyen lost VND116 million ($5,110) while the card was still in her wallet.

Workshop on transfer pricing held in Hanoi

An international workshop on “Transfer pricing – Critical issues of current state management” was held in Hanoi on July 19, drawing 200 delegates from the National Assembly, ministries, central and local agencies, professional associations, universities, research institutes, international organisations as well as domestic and foreign businesses.

Opening the event, held by the State Audit of Vietnam (SAV) and the Association of Chartered Certified Accountants (ACCA), Ho Duc Phoc, Auditor General of the SAV, said in today’s globalised world, transfer pricing among affiliates that fall under different countries’ jurisdictions has become common practice. It has become a serious issue in every country in the world.

Transfer pricing was new in Vietnam 10 years ago, but today it is a common practice of not only foreign direct investment (FDI) enterprises but also Vietnamese enterprises (domestic transfer pricing), he said.

Transfer pricing, which has created unfair competition among economic actors, is pricing transactions of goods, services and intangibles between related parties such as a parent company and its affiliates.

Transfer pricing aims to minimise the obligation of enterprises to pay taxes so they can maximise their profits. Apart from tax avoidance, this practice has been used to charge high prices for certain goods in markets without intense competition.

The most common forms include the practice of transfer pricing to the value of investment assets, meaning that businesses will declare a much higher value (above the market price) in order to reduce future tax obligations.

Vietnam has made great efforts to create a legal framework for the tax sector to fight transfer pricing of enterprises, he said.

However, the legal framework remains inconsistent with many loopholes, and is not effective.

Phan Vu Hoang, Chairman of the Association of Chartered Certified Accountants (ACCA) in Vietnam, said that the action plan on Base Erosion and Profit Shifting (BEPS), which refers to tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no tax, is being implemented in many countries, including Vietnam.

Multinational corporations, including Vietnamese enterprises wishing to invest abroad and foreign firms wishing to invest in Vietnam, will need to ensure compliance with countries’ transfer pricing regulations for their investment projects.

At the workshop, participants focused their discussions on price transferring in Vietnam and its impact on the economy; assessing the management in the field as well as shortcomings in management; and the role of the SAV, while proposing some solutions.

Vietnam now a prospective hub for Italian businesses

Italian businesses are flocking to Vietnam to find opportunities in a wide range of fields, from footwear to interior design products.

Paolo Lemma, Italian trade commissioner to Vietnam, said that Vietnam is becoming a prospective hub for Italian companies to set up business and capitalise on the country’s young population and rising disposable income. Italian companies have expressed interest in various sectors including footwear, plastics, fashion, food and beverage, as well as high-end interior furniture.
He is also upbeat about the positive prospect as Vietnam and the EU are likely to sign the EU-Vietnam Free Trade Agreement (EVFTA) soon. The FTA will allow Vietnamese companies to access the European market while opening up opportunities for Italian companies.

He elaborated that Vietnamese exporters need to be compliant with the EU's strict import regulations, such as healthy and environmentally friendly products. To meet the requirements, Vietnamese companies should upgrade equipment and technology to meet European standards, which is likely to increase the sales of Italian machinery in Vietnam.

Comelz Italia, specialising in providing CNC cutting machines for the bag and shoes industry, has recorded an annual growth rate of 40 per cent in Vietnam. Fabrizio Bellagamba, Far East area manager of Comelz Italia, said that Vietnam is the company’s fastest growing market in the world. The company has established a representative office in Ho Chi Minh City in 2012 to tap into the market’s growth.

He said the majority of its clients in Vietnam are foreign manufacturers from Taiwan and the Republic of Korea. The company has sold 100 machines in the country in 2017 and another 140 machines in 2018. It is also expected to increase sales to Vietnamese footwear makers who are looking to climb up the value chain and penetrate in the overseas market.

Comelz Italia was among the 26 Italian enterprises showcasing machinery and equipment for the footwear and leather-related industries at Shoes & Leather Vietnam 2018. Most of the companies participating in the expo already had suppliers, agents or representative offices in Vietnam. However, they are looking for further opportunities in the emerging market, fostering cooperation with Vietnamese enterprises and searching for new partners.

According to the Italian Trade Agency, the export turnover of the Italian leather and footwear sector reached EUR440 million ($516.19 million) in 2017, up more than 10 per cent on-year. In Vietnam, the export value is even more remarkable. The sales of machinery and equipment in the sector were over EUR30 million ($35.19 million) in Vietnam, doubling on-year.

Last month, seven Italian companies specialising in furniture and interior design also paid a working visit to Vietnam to explore the market. Well-known Italian brands include Badari Lighting, Cantori, Diemme Cucine, Formitalia, Officina Luce, Sicis, and Versace.

The Italian businesses agree that there is immense potential for partnership between the two countries in the field. Vietnam’s furniture imports over the last three years grew at an average annual rate of 33 per cent. Meanwhile, Italy leads in the EU and is third in the world as a source market, accounting for almost seven per cent of Vietnam’s furniture imports.

Vietnam’s urbanisation rate grows by 3.4 per cent each year, making it the fastest in Southeast Asia. The supply of residential buildings, hotels, and resorts is increasing at an annual average of 20 per cent, especially in Hanoi, Ho Chi Minh City, and main tourist destinations. The development of the real estate market is expected to continue to have a major impact on high-end furniture demand. These positive indicators have enhanced the interests of the Italian furniture and interior design products in Vietnam.

​Vietnam to ask ride-hailing cars to put on ‘Electronic taxi’ roof signs

Vietnam’s Ministry of Transport is considering requesting Grab or other ride-hailing cars to put on top signs, publicly declaring that they are ‘electronic contract-based’ vehicles, just like conventional taxicabs are required to carry their taxi roof lights.

The proposal, which the transport ministry is seeking feedback from relevant agencies, is included in a draft amendment to a government decree that regulates automobile transportation services.

According to the proposal, app-based cars are allowed to join conventional taxicabs to offer automobile transportation services.

Traditional taxi operators are also allowed to use technology to calculate fares, instead of only by the taximeters.

This means there will be two types of tech-based taxi services: conventional taxi firms with a fare-calculating app, and private cars of ride-hailing apps such as Grab.

The transport ministry therefore suggests that ride-hailing cars put on roof lights to let customers know what types of services they provide.

Conventional taxis that allow booking via apps or software should put on the “Electronic taxi” roof sign, whereas vehicles driving for Grab or other apps should use signs that say they are “Electronic-contract based cars”.

The draft decree, if passed, is expected to contribute to transportation business’ security and transparency.

Apart from Grab, there are several other car-hailing applications in Vietnam, such as Emddi and Vato.

In addition, eight traditional taxi companies also launched their own software such as V.Car, Thanh Cong Car, Vic.Car, HomeCar, Mai Linh Car, LB.Car, Emddi-Phuc Xuyen.

Vietnam’s automobile market expects a boom in second half of 2018

New vehicle sales in Vietnam declined 5% to approximately 22,000 units in June, according to the Vietnam Automotive Manufacturers Association (VAMA).

vietnam’s automobile market expects a boom in second half of 2018 hinh 0 While the government has cut import tariffs to zero for vehicles originating from neighboring ASEAN countries and adopted incentive policies for domestically-built cars, Vietnamese consumers are waiting for newer models at lower prices.
June has always been a slow month for the automobile market, which should pick up again in the rest of the year, particularly after September. Vehicle importers and distributors are still adjusting to regulatory changes introduced by the Vietnamese government at the beginning of the year, including new minimum standards for emissions, warranties, and aftermarket services.

Total vehicle sales in the first half of this year were 125,000 units, a decrease of 6% from the same period last year. Sales of pickup trucks were almost 49% lower at 5,900 units, while passenger vehicle sales increased almost 11% to 82,900 units.

Truong Hai (Thaco) group, the local assembler and distributor of brands such as Kia, Mazda, Peugeot, and Hyundai and a significant player in the commercial vehicle sector, reported a 5.3% rise in group sales. Toyota remained the leading vehicle brand in the first half of the year, while Honda's sales more than doubled to 11,000 units.

The General Department of Customs reported 3,300 units were imported in June, worth 82 million USD, of which 3,000 units were from Thailand and the rest from the US, Japan, and Germany.

Vietnam can gain from the US-China trade war: Economist

The trade war between the US and China is causing widespread concern over possible risks posed to the global economy, including that in Vietnam. However, the conflict can bring about indirect opportunities for Vietnam if the country knows how to grab hold of the situation, according to a local economist.

For Professor Pham Tat Thang, senior researcher at the Trade Research Institute at the Ministry of Industry and Trade, it seems as though no one will win in the US-China trade war, neither the two nations involved nor the world’s economy.

First of all, this war is threatening the global economy as it goes against the global trend towards trade liberalisation and triggers the rise of protectionism. It could result in a global economic slowdown and impact Vietnam’s economy in a bad way, Thang explained.

Chinese products and projects will not be allowed to make their way into the US like before so Chinese government and enterprises are likely to find alternatives for them in neighbouring markets like Vietnam, he noted.

Once Chinese exports scale down, reducing its liquidity, demand for imports in China will also decline. This, together with China’s escalation of trade barriers, could hurt Vietnam’s exports to the neighbouring country, which have experienced upturn in recent years, according to the researcher.

However, Chinese products hit by high tariffs will lose their competitive edge in the US, opening the doors for similar goods from Vietnam. Hence, if Vietnam can make the most of the situation, it could turn challenges into opportunities.

On the other hand, Thang warned that Chinese exporters are likely to try to find a way around to disguise their origin of goods to avoid the US tariffs. They could fake that their products are originating in Vietnam, he said.

“If we don’t stay on watch and this happens, it will harm the Vietnam-US trade relations as well as national interests in the long run,” he added.

The economist urged Vietnamese enterprises to be aware of technical trade barriers in each foreign market as well as to stay up to date in related regulations in order to survive the turmoil of protectionism in the global trade.

As foreign countries are raising trade barriers, domestic firms must be updated on the changes to be able to satisfy new requirements, he suggested. They should also cooperate with each other to protect themselves and prevent violations occuring, he noted.

The trade war between the US and China officially commenced on July 6 after the US pulled the trigger on 25% duties on approximately US$34 billion worth of Chinese machinery, electronics, and high-tech equipment imports.

This is only Washington’s first step in a trade confrontation that is likely to hurt not only the economies of the US and China, but also threaten global economic instability. Vietnam is also set to become embroiled in the conflict as both the US and China are important trade partners for the country.

Last year, China was the largest trade partner of Vietnam. The bilateral trade between the two sides was estimated at US$93.8 billion, of which exports to China reached US$35.3 billion, up 60.6% year-on-year, and imports from China totalled US$58.5 billion, up 16.9% year-on-year.

Vietnam’s trade deficit with China was US$23.3 billion, down 17.4%.

The US ranked third in bilateral trade with Vietnam with US$50.7 billion, of which export values hit the highest level of US$41.5 billion, a year-on-year increase of 8%, and import values stood at US$9.1 billion, up 4.9%. 

Festivals and promotions set to boost sales of Hung Yen, Son La longans

The Agro Processing and Market Development Authority (AgroTrade) will coordinate with the northern provinces of Son La and Hung Yen in organizing different activities to promote longan sales and exports.

A longan export promotion conference and a longan week will be held in Hanoi, while a series of activities will be held in Hung Yen such as a Hung Yen longan festival, a conference to connect the sale of longans with other agricultural products and a trade promotion conference for longans and other farm produce of Hung Yen.
Meanwhile, Son La will host a Song Ma longan festival, an export promotion conference and a Son La trade and export fair for safe agricultural products.

According to the AgroTrade, the 2018 longan crop in the northern provinces will begin to be harvested from late July to late September. It is forecast that this year’s harvest will yield a bumper crop.

At present, Son La has 60 cooperatives which plant longans on an area covering more than 950ha, including 12 cooperatives which have been awarded the VietGAP certificate, with an estimated output of 1,594 tons. Around 61.3ha have been granted area codes to grow longans for export to the US, Australia, the Republic of Korea and ASEAN with an output of around 500 tons.

Son La is maintaining 27 chains of safe fruit, including 13 chains of safe longans on an area of 457ha with an output of 4,012 tons, 2,000 tons of which are certified by VietGap.

Hung Yen province also has three longan plantation zones covering 62ha which meet VietGap standards. 70ha have been granted area codes to grow longans for export to the US.

Massive spike in imports of Japanese coal

There was an increase in imports of most products from Japan during the first five months of this year, with coal skyrocketing to US$3.24 million, 134 times higher than its previous level.

Vietnam imported US$7.32 billion worth of products from Japan during the first five months of this year, a year-on-year rise of 15.1%, according to the General Department of Vietnam Customs.
The country bought a wide range of products from the Japanese market, mainly machinery, industrial products and materials.

Machinery, equipment and tools accounted for the highest value of imported items at nearly US$1.8 billion, up 3.1% against the same period last year, and making up 24.5% of the total imports. They were followed by computers, electronics and components with US$1.49 billion (up 30.8%), steel with US$630.35 million (up 9.8%) and plastic products with US$332.34 million (up 10.5%).

On the other end of the scale, Vietnam reduced its imports of some products such as Complete Built-Up (CBU) automobiles (down 69.6% to US$17.18 million), animal feed and materials (down 48.6% to US$1.18 million), means of transport and spare parts (down 29.5% to US$71.76 million) and electric household appliances and components (down 26% to US$6.43 million).

Cars from Thailand zoom into Vietnam

The number of cars imported last month marked a 45.6% increase over May this year, according to the General Department of Vietnam Customs.

Thai autos dominated a big surge in June imports, accounting for 87% or 2,917 of 3,356 completely-built-up car units (CBU) that arrived at Vietnamese ports, it said.

The average price of Thai vehicles was around VND430 million, as against the overall average of VND562 million for all the cars imported in June, carrying a total value of US$82 million.

The surge followed the Ministry of Transport approving certification of environment and emission tests done in Thailand as meeting Vietnamese standards.

A new regulation, Decree 116, that took effect on January 1 this year, had caused auto exports from Thailand to Vietnam drop by 80% cars, the Bangkok Post had reported last month.

The decree required cars to be tested in Vietnam for conformity with national standards, and this March, the rule was amended to allow certification of tests done in the importing country.

After Decree 116 took effect, auto imports dropped 76% year-on-year between January to June for a total of 12,380 vehicles.

Vietnam is one of the car markets in the world with great growth potential, experts have said. Car ownership in Vietnam is low at 23 vehicles per 1,000 people, while in Thailand, it is 204 vehicles per 1,000 people and the minimum rate in developed nations is 400 vehicles per 1,000 people.

Banks make great strides in technology application

Vietnam’s banking sector has invested in developing technology amid the sweeping changes the 4th Industrial Revolution is bringing to the way people live and work.

According to economic experts, the prominent technological advances of the revolution such as Internet of Things (IoTs), Big Data, Artificial Intelligence (AI) and blockchain technology have offered great opportunities for Vietnam’s banking system.

They help Vietnamese banks access international markets, enhance their ability to apply modern technology and make banking products and services more modern and efficient.

Dr. Nguyen Viet Loi , Director of  Institute for Financial Strategy and Policy under the Ministry of Finance, said the impact of the 4th Industrial Revolution on Vietnam’s banking sector can be divided into two phases.

From 2008 to 2015, the advent of cloud computing, open-source software, 3G/4G mobile data, smart phones, data analysis and social networks encouraged entrepreneurs to join the financial market, paving the way for financial technology (FinTech).

From 2016-2020, the development of artificial intelligence, blockchain, data science, digital identification and biometrics will lay an infrastructure foundation to transform personnel usage, focusing on using artificial intelligence instead of traditional bankers. Digital identity has become the footing of basic identification and been secured through biometric factors such as voice recognition or fingerprints.

Experts predicted that by 2020, the four most-affected areas of FinTech will be consumer banking, transfers and payments, asset management, and insurance.

Findings from a survey on banking services, user behaviour and trends in Vietnam released by the International Data Group (IDG) Vietnam in 2017 showed that e-banking solutions are increasingly used for convenience and to save time. Some 81 percent of respondents said they have used e-banking solutions for transactions, compared to only 21 percent in 2015.

Deputy Governor of the State Bank of Vietnam (SBV) Nguyen Kim Anh said that commercial banks have developed new services in the direction of full digitisation.

Outstanding services include the auto banking model (Livebank) of Tien Phong Bank (TPBank), the digital bank Timo of Vietnam Prosperity Bank (VPBank), the digital banking strategy of Orient Commercial Joint Stock Bank (OCB); Digital Lap of Commercial Bank for Foreign Trade of Vietnam (Vietcombank) and  the Military Commercial Joint Stock Bank (MB) with the virtual assistant application Chatbox. 

Nguyen Hung, General Director of TPBank, said digitalisation is applied to all banking products and services from payment, money transfer, lending, saving to financial management. 

The development of digital banking models, such as Timo or LiveBank, is an example of this trend, enabling banks to meet young customers’ need for banking services anytime and anywhere, he noted. 

Ngo Thi Hang from the Department for inspection and supervision of domestic credit institutions under the SBV’s Banking Supervision Agency said the emergence of the 4th Industrial Revolution brings opportunities to Vietnamese banks to extend outside of the country, expand their activity and build their brand abroad. 

In addition, thanks to the revolution, they can also access and expand supply of appropriate banking products and services to those who do not currently have bank accounts in remote areas, she said.

However, she noted that besides the promising opportunities, the revolution also poses many challenges to Vietnam's banking and finance sector.

Hang stressed the need to build new laws for banking sector reform, adding that banks’ business models and financial resources for basic construction investment need to be fine-tuned to adapt to the trend of high technology application.

According to Director Loi, the SBV has been setting up a Steering Committee on Fintech, which is working to develop a legal framework for this area.

However, there is still a lack of policy mechanism to attract investment in Fintech, he noted.

Banks hike charter capital to improve financial strength

Many banks are set to hike charter capital to boost their financial strength through stock issuances to pay dividend for the shareholders.

OCB will raise its charter capital twice to bolster financial strength in the months to come

In previous years it proved difficult for banks to materialise charter capital hike plans due to unfavourable market conditions which brought down stock prices.

Besides, they could hardly seek the central bank (SBV)’s approval to raise charter capital through issuing more stock to pay dividends to shareholders or offer them a bonus in the form of shares, as they must comply with loss provisioning requirements.

Many banks seek shareholders' approval to raise charter capital in 2018 to enhance financial strength, and more importantly, to meet the requirements set in the Basel II Accord.

Banks’ performance has improved considerably in the past year and so did their ticker price, which were supposedly some of the reasons for the central bank to recently green-light banks’ charter capital hike plans.

On June 28, SBV approved Ho Chi Minh City’s Orient Commercial Bank (OCB) to raise charter capital from VND5 trillion ($222 million) to more than VND6.69 trillion ($297 million) through stock issuances.

Particularly, OCB will issue stocks to pay dividend for the shareholders at a ratio of 14.2 per cent and offer bonus shares to the shareholders at a ratio of 20.5 per cent.

In addition, the central bank approved OCB’s plan to raise its charter capital by an additional VND800 billion ($35.5 million) through private placements to selected domestic and foreign investors.

OCB is set to list its 750 million shares on the Ho Chi Minh City Stock Exchange (HoSE) in the late third quarter or the early fourth quarter this year.

In a recent talk with the media, the bank chairman Trinh Van Tuan said OCB’s market cap is expected to touch $1 billion after listing and they are set to complete selling to foreign strategic partners before listing.

SBV also gave the nod to Techcombank’s charter capital hike plan from over VND11.6 trillion ($518 million) to more than VND34.9 trillion ($1.55 billion) in 2018.

Earlier, in late May, privately-held VPBank was approved to raise its charter capital from VND15.7 trillion ($697 million) to VND25.3 trillion ($1.12 billion) in light of the bank’s capital hike plan which got the thumbs-up at the bank’s recent 2018 annual general shareholders’ meeting.

Accordingly, Techcombank contemplates raising its charter capital to VND27.8 trillion ($1.23 billion) maximally.

Military Commercial Joint Stock Bank (MB) has just received the approval to boost its charter capital from VND18.1 trillion ($806 million) to VND21.6 trillion ($960 million).

Imported animal feed grows during H1

Vietnam spent more than 1.96 billion USD on importing animal feed during the first six months of 2018, up 10.7 percent year-on-year.

In June alone, the figure was 350 million USD, with major supply markets like Argentina, Brazil, the US, China, and India.

In the year’s first half, Vietnam spent 651, 321, and 287 million USD on products from Argentina, the US, and Brazil, respectively.

The figures for Belgium and the Republic of Korea were 18 and 24 million USD, respectively.

On the domestic scale, according to Nguyen Xuan Duong, Deputy Director of the Ministry of Agriculture and Rural Development’s Department of Livestock Production, Vietnam’s animal feed industry has maintained a two-digit growth over the past two decades, with output jumping from 400,000 tonnes in 1993 to more than 23 million tonnes in 2016.

Vietnam is today the leading country in ASEAN and the 10th in the world in terms of animal feed production.

Fivimart and Citimart report accumulated losses with AEON on board

After co-operating with Japanese supermarket chain operator AEON Company Limited, while the operations of Hanoi-based Fivimart and Saigon-based Citimart improved, they also fell deeper into losses.

In early 2015, AEON Company Limited (AEON Co., Ltd.) decided to buy a 30 per cent of Fivimart and 49 per cent of Citimart. However, AEON did not disclose the value of the deals.

According to the agreement, AEON Co., Ltd. would provide products under its “Top Value” brand to Fivimart and Citimart to distribute, as well as coordinate with them to develop new products and expand supply networks.

Citimart said that the two sides targeted to develop around 500 supermarkets of different sizes by 2025.

AEON Co., Ltd., saw Vietnam as its second most important market in Southeast Asia after Malaysia. It targets to open 200 stores across Vietnam and reach a revenue of JPY100 billion ($836 million).

In 2015,AEON Co., Ltd. general director Motoya Okada stated that Vietnam is a large market and that it will be difficult for the company to succeed without collaborating with local companies.

Thus, through the deals, AEON Co., Ltd. will consume its products, build distribution systems, and develop a number of shopping centres in Vietnam.

At the time of the deals, Fivimart and Citimart expressed hope that the co-operation with AEON Co., Ltd. would help to improve their business. However, after two years their accumulated losses have increased.

According to Fivimart’s financial statement, in 2016, it reported VND1.24 trillion ($53.8 million) in revenue, up 20 per cent on-year, however, it also reported a loss of VND96 billion ($4.16 million), doubling the figure in 2015. As a result, throughout two years of cooperation with AEON, Fivimart suffered an accumulated loss of VND173 billion ($7.5 million), reducing its equity to approximately VND30 billion ($1.3 million).

The major reason for the increase in the losses of Fivimart is the soar in management expenditures, which are even higher than Fivimart’s gross profit. Notably, in 2016, the company’s management expenses were up to VND280 billion ($12.1 million), while its gross profit was VND183 billion ($7.9 million).

Citimart’s business results are similar to those of Fivimart. Notably, in 2016, it reported an increase of 15 per cent in revenue to VND1.6 trillion ($69.4 million), however, it was shouldering a loss of VND123 billion ($5.3 million) in 2015 and 2016, reaching an accumulated loss of VND157 billion ($6.8 million).

Along with their massive losses, both Fivimart and Citimart also keep debts of VND1.4 trillion ($60.7 million), including VND700 billion ($30.3 million) by Fivimart and VND710 billion ($30.8 million) for Citimart.

Besides, the two supermarket chains also failed to expand their store chains. Notably, Fivimart currently has 26 supermarkets in Hanoi, four less than its target for last year. The number of Citimart’s store remains the same as last year.

Provinces invite construction bids     

Provinces in the Cửu Long (Mekong) Delta have invited bids for many large infrastructure works.

Kien Giang has two traffic infrastructure packages, according to Nguyen Van Tu, director of the provincial Department of Transport’s investment and construction projects management board.

One, worth VND200 billion (US$8.7 million), is for the construction of a section of road DT971 from National highway No 80 to the Hon Trem crossroads and two bridges.

The bidding is open to all contractors who have experience in construction and management of infrastructure projects, implemented a similar package with a value of at least VND124 billion ($5.4 million) and earned an annual income of VND163 billion ($7.1 million) or more in the last three years from construction.

The second package is for building a road along the Chung Bau Canal in Tan Hiep District and is worth more than VND51 billion ($2.2 million).

Tư said the bidding for the two packages is very competitive and his agency has designed a very clear set of criteria to ensure fair competition and transparency.

Other provinces in the delta are also looking for contractors for many irrigation projects.

Ha Duc Hanh, deputy director of the Ministry of Agriculture and Rural Development’s Irrigation Work Investment and Construction Management Board No 10, said bids are being invited for five irrigation packages in Ben Tre, Tra Vinh, Bac Lieu, and Tien Giang provinces totally worth VND2.8 trillion ($122 million).

His agency would ensure fair assessment and award of bids, he promised.

It has also organised capacity-building programmes for its staff in preparing bid documents and awarding bids, he added.

Vietnam Airlines aims to become five-star airline in 2020

Vietnam Airlines has reached five-star standards for 30 percent of the 700 criteria from the international air transport rating organisation Skytrax, a step forward in its quest to become a five-star airline in 2020.

The carrier received a four-star certificate by Skytrax for the third consecutive year on July 17, which showed stability in services and the positive feelings of customers and specialists.

Duong Tri Thanh, Vietnam Airlines’ General Director, said that to achieve this, the national-flag carrier passed Skytrax’s evaluation of many practical examinations.

The certificate affirmed its position in the list of leading world airlines in terms of service quality, ranking alongside some of the world’s most reputable airlines, including Air France, Emirates, Japan Airlines, Korean Air and British Airways, he said.

Thanh said that in its development strategy, Vietnam Airlines prioritises safety and believes no award is as noble as the satisfaction and acknowledgment of customers.

This year continues marking the improvement of Vietnam Airlines in service quality, aiming to meeting increasing demands of passengers, with Vietnamese culture deeply embedded in its products and services. 

Through the introduction of traditional “Pho” (noodle) and seasonal specialities such as “Thieu” lychee and longan, Vietnamese cuisine has become a highlight on each flight.

Vietnam Airlines, a member of Skyteam Alliance, operates 90 routes to 20 domestic and 29 international destinations with an average of 400 flights per day.

It was listed as a top Asian airline in 2018 by tourism website Trip Advisor.

Vietnam Airlines has also received two prestigious awards of “World’s Leading Cultural Airline” and “World’s Leading Airline –Premium Economy Class” in the World Travel Awards.

In 2017, Vietnam Airlines recorded sales of 88.4 trillion VND and carried 26.5 million passengers. Its on-time performance index (OTP) exceeded 90 percent.

Vietnam imports 60 percent of potatoes for processing

Vietnam’s factories need some 180,000 tonnes of potatoes for processing a year, but domestic production currently meets only 40 percent of demand, according to the Ministry of Agriculture and Rural Development.

However, the ministry said that despite increasing demand, the total potato planting area is decreasing dramatically.

Last year, the country’s potato area was 19,700 hectares, equivalent to one-fifth of the area at the peak time, turning out an output of 313,000 tonnes.

The ministry aims to raise the figure to 30,000 hectares in the next five years.

India to hold fiber exhibition     

Source India 2018, India’s largest manmade fiber exhibition, is expected to provide opportunities for Vietnamese textile firms to network and strengthen business relationships, Shri P Harish, Ambassador of India to Viet Nam, said at a business meeting on Tuesday in HCM City.

The event, to be held in Surat, India from September 21-23, is expected to attract the participation of around 200 international suppliers of man-made fiber and 200 global buyers in the textile and garment industry, according to India’s Synthetic & Rayon Textiles Export Promotion Council.

Exports of cotton, fabric, yarn and other textile materials from India to Viet Nam in 2017 was around US$550 million, Harish said.

He said that Indian textile companies are capable of satisfying Viet Nam’s demand for textiles and urged India’s export promotion council to increase material exports to Viet Nam.

“This would also meet a strategic objective of Viet Nam to have a more diverse supplier base for the garment industry, so there is no over-reliance on only one or a group of suppliers,” he said.

Textile and garment exports from India to Viet Nam totalled US$429 million in 2017, 44 per cent higher than 2016, according to the Indian government.

Vietnamese textile and garment exports to India were $178 million in 2017, 42 per cent higher than 2016.

Nguyen Thi Tuyet Mai, deputy general secretary of the Viet Nam Textile and Apparel Association, said that Viet Nam imports a great deal of high quality fiber, materials and technology from India.

She said that arranging a bilateral free trade agreement and setting up a bonded warehouse at Viet Nam for Indian materials would improve trade between India and Viet Nam.

In 2017, Viet Nam exported around $31 billion of garments and imported over $19 billion of materials. 

Bac Giang firms advised on preparations in anticipation of CPTPP

The potential impacts of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on Bac Giang’s enterprises were discussed at a workshop held by the provincial People’s Committee  and Germany’s Friedrich Naumann Foundation for Freedom on July 19.

The workshop stressed the importance for businesses to pay attention to origin regulations if they want to make full use of the agreement’s tariff incentives.

Businesses will also face many difficulties as the CPTPP contains tough requirements on transparency, regulations on protection of intellectual property, and management of dispute settlements.

The reduction of import duties will also challenge small- and medium-sized enterprises, especially those in the agricultural sector.

Businesses were asked to thoroughly prepare themselves and anticipate new challenges.

Phan Duc Hieu, Deputy Director of the Central Institute for Economic Management, said that stepping up institutional reform, creating a favourable business environment, treating enterprises equally, and reducing administrative costs will help improve the competitiveness of domestic products.

Chairman of the provincial People’s Committee Nguyen Van Linh said that State management agencies and local businesses should learn about commitments between Vietnam and CPTPP members in order to make necessary preparations.

The agreement is a chance to boost economic growth in Bac Giang’s key export commodities, thus helping the province achieve its socio-economic development goals, he added.

The CPTPP was signed on March 9 with 11 signatories. The agreement is expected to help nearly 1 million Vietnamese people escape from poverty.

The pact will create one of the world’s largest free trade blocs with a combined market of 499 million people and GDP of around 10.1 trillion USD, accounting for 13.5 percent of the global GDP. 

Vietjet begins new service between Da Nang and RoK’s Daegu

Travelling between Vietnam and the Republic of Korea has just gotten easier as low-cost carrier VietJet launched direct flights connecting the central coastal city of Da Nang and Daegu city in the East Asian country on July 19.

The route is expected to boost trade and regional integration.

The daily round-trip flights between the two cities take four hours and 15 minutes. The departure time from Da Nang city is 0:15 and arrival time is 6:30 am (local time), while the return flight will take off at 7:30 am from Daegu and land in Hanoi at 10:00 am (local time).

Last year, the carrier launched an international route between Da Nang city and Seoul to meet increasing travel demand between the two cities.

Aiming to become a “Consumer Airline”, Vietjet is opening new routes, adding more aircraft, investing in modern technology and offering more added-on products and services.

Vietjet was the first airline in Vietnam to follow a low-cost, modernised carrier model to provide a wide range of services to its customers. Apart from air transportation, Vietjet also provides consumer goods and services via e-commerce technology. 

In addition to being named Best Asian Low Cost Carrier awarded by TTG Travel Award in 2015, the airline was also honoured as one of the “Top 500 Leading Brands in Asia 2016” and “Best Recruiting Brand in Asia” for many consecutive years.

Currently, Vietjet operates 60 A320 and A321 aircraft with more than 380 flights daily, carrying more than 60 million passengers up to date, with 93 routes covering destinations in Vietnam as well as international destinations such as Hong Kong, Singapore, the Republic of Korea, Taiwan, China, Thailand, Indonesia, Myanmar, Malaysia and Cambodia.   

Vietjet plans to expand its network across Asia-Pacific.

Vietnamese and Japanese firms forge connectivity

More than 30 businesses from Vietnam and Japan were brought together at an event in the northern port city of Hai Phong on July 19 to seek stronger investment links.

The event aimed to help enterprises increase production and management capacity while joining the global value chain.

Vice Chairman of the municipal People’s Committee Nguyen Van Thanh described Hai Phong as one of the most dynamic regions in Vietnam.

As a traffic hub of aviation, railways, expressways and inland waterways, Hai Phong has big advantages in connecting with other cities and provinces nationwide as well as international integration, he said.

The northern port city has consistently been listed among the top destinations for foreign direct investment in Vietnam, with 553 projects worth over 15.7 billion USD so far, focusing on industry, infrastructure and real estate, trade and services, he cited.

Among 38 countries and territories investing in Hai Phong, Japan has the most projects with 137, and ranks second in terms of investment capital (4.6 billion USD) after the Republic of Korea.

Japanese firms mainly invest in industrial production, with 101 projects worth 3.63 billion USD, making up 73.7 percent of Japan’s total projects and 79.08 percent of its total investment.

The Japanese government has helped the Vietnamese city develop physical infrastructure such as bridges, roads, Hai Phong port and rainwater drainage systems as well as improve sewage treatment and solid waste management by providing official development assistance.

More than 500 Japanese experts now live and work in Hai Phong.

Vietnam-Japan joint venure build logistics centre

Vina-Japan Shirogane Logistics Company Ltd on July 19 broke ground for a 5.4 million USD logistics centre at the Phu My 3 Specialised Industrial Park in the southern province of Ba Ria–Vung Tau.

Tatsuya Ito, general director of the company, said the 2.25ha would have a steel structure covering nearly 6,300sq.m and eight container entry points to meet a variety of cargo handling needs.

The warehouse would also have a shelving system and flat floor areas to store various goods.

Situated in an industrial park 2km from the Cai Mep–Thi Vai International Port and connected to national highways and airports, it is expected to become one of the key logistics centres in the southern province, meeting the needs of enterprises in the park but also elsewhere in the province and even neighbouring provinces.

It will focus on developing integrated logistics services, including transportation agency, warehousing and storage, customs procedures, packaging and labelling of goods for distribution and others.

It is expected to be completed and put into operation next April.

Nguyen Thi Thao Nhi, chairwoman and general director of the Phu My 3 Park, said the facility would help reduce costs for and provide value to investors.

“We strongly believe that this logistics centre will be expanded to have a second and third warehouse in three to five years.”

VJS is a joint venture between Thanh Binh Phu My Joint Stock Company and Japan’s Shirogane Transport Company Ltd.

The former is the main developer of infrastructure at the park, a key component of the province’s Economic Growth Programme of the Japan International Cooperation Agency (JICA) to develop a synchronous and modern industrial park to ensure sustainable development.

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