VietNamNet
BUSINESS IN BRIEF 11/9

Last update: 18:03 | 11/09/2017

Vietnam to resume importing distillers dried grain from the US

The Vietnam government has authorized the resumption of imports of distillers dried grains (DDGS) from the US, a co-product of ethanol production used as a key ingredient in animal feed.

Imports were suspended last December after quarantine pests were detected in a shipment of DDGS, the US Trade Representative and Agriculture Department said in a statement issued Wednesday, September 6.

Prior to the suspension, Vietnam was the third-largest market for US DDGS, with exports valued at more than US$230 million in 2016.

The resolution of this issue paves the way for increased corn and wheat shipments, which were restricted due to previous treatment requirements, according to the statement issued by the two US agencies.

Inflation rate rises in August but stays within target

The inflation rate in Vietnam for August quickened from that of July to 3.35%, according to a statement issued by the General Statistics Office.

The increase, said the GSO, was largely due to rising costs for healthcare, medicine and pharmaceuticals after the government raised the prices for medical services in several provinces.

In addition, transport costs in August jumped from July as global oil products prices rose while food costs climbed as pork and vegetables became more expensive, the GSO statement said.

The country's annualized average inflation rate for 2016 stood at 2.66%, well within line of the Vietnam government’s target of keeping the consumer price index below the 5% threshold.

Poultry at top of livestock feed industry pecking order

The poultry market in Vietnam is the leading growth segment of the livestock feed industry, said experts at a recent forum in Hanoi discussing the opportunities for domestic sector businesses.

With the advent of globalization and rise in the standard of living of consumers in the Southeast Asian country, companies are expanding in the market with improved products and wider range of options, said Hoang Thanh Van.

Mr Van, who heads up the Animal Breeding Department at the Ministry of Agriculture and Rural Development, noted that poultry is the most rapidly growing of all protein dietary sources by far outperforming pork, beef and fish.

This in turn, he added, creates vast opportunity in the poultry feed segment for domestic sector companies.

The rising family per capita income of households and widespread poultry diseases that create a more limited supply around the globe are the major driving factors of the poultry feed market in Vietnam.

In addition, the growth of domestic and international fast service restaurants throughout the country has elevated demand for quality protein products and in turn has contributed to the rising need for poultry feed in the country.

Rising family household incomes has also spawned an increase in a shift in eating habits so that families are now eating away from home much more often than in the past— and at higher end restaurants that demand premium quality meat, poultry and fish.

Food manufacturers are also now starting to more closely coordinate with the factory farmers to direct them towards higher yield of poultry thereby increasing their earnings ratios, more commonly referred to as return on investment or ROI for short, said Nguyen Thanh Son.

Mr Son, who is the head of the National Institute of Animal Husbandry, said that as a result, there are ample opportunities for domestic sector companies to get into this rapidly expanding scientifically based segment and compete on an equal footing with foreign multinationals.

The various type of poultry feed additives available in the Vietnamese market consists of antibiotics, vitamins, antioxidants, amino acids, feed enzymes and feed acidifiers, said Mr Son.

The global regional segmentation of the poultry feed segment includes North America, Europe, Asia Pacific, Latin America and Middle East & Africa. The Asia Pacific, which includes Vietnam, is the largest market followed by North America.

Based on type, the poultry feed market can be segmented as broilers, layers, turkey and others. In Vietnam, broilers are the most preferred category and antibiotics fall under the largest category under the feed additives segment.

Top quality poultry feed, said Mr Son, is required to increase the feed conversion ratio by improving gut micro flora thereby enhancing animal health. It also maintains animal health by preventing diseases among them.

Domestic sector manufacturers looking to get into the segment must concentrate more on marketing and selling in the developing markets in countries such as Vietnam, India, Indonesia, South Africa, Lebanon and Turkey.

These markets offer greater opportunities to increase revenue and sales with higher per capita expenditure on quality food. Moreover, it is a proven fact that countries going through periods of rising per capita income offer greater opportunity.

It is generally accepted as fact that at per capita income rises, people tend to consume more and higher quality meat, poultry and fish protein, said Nguyen Van Giap from the Southern Centre for Agriculture Policy and Strategy

This in turn drives demand for top quality feed additives.

Numerous authorities, said Mr Giap, have forecast that the poultry feed market in Vietnam is expected to grow at healthy compound annual growth rates as high as 20% through 2020, making this a golden opportunity for domestic businesses desiring to get into the market.

Developing logistics service in Vietnam

Vietnam’s logistics services - freight forwarding, transportation, and inventory services - began to develop in the 1990s. Logistics has now become an important economic sector in Vietnam. In the next decade Vietnam could reach an export-import turnover of US$200 billion per year.

Vietnam earns US$22 billion a year from logistics services. The sector’s annual growth rate has been 16 to 20% in recent years. According to World Bank rankings, Vietnam ranks 64th out of 160 countries in logistics development and fourth in ASEAN after Singapore, Malaysia, and Thailand. 

Logistics is one of Vietnam’s fastest growing and most stable services. Recent statistics from the Vietnam Logistics Association show that more than 1,300 logistics enterprises are now operating in Vietnam, including foreign-invested firms.

Most logistics service providers in Vietnam are small or medium-sized enterprises. Major firms like Transimex Saigon Corporation, Sai Gon Newport Corporation, Gemadept Corporation, and Transport and Chartering Corporation (VIETFRACHT) specialize in freight forwarding, loading, and uploading mainly in Ho Chi Minh City and Hanoi. There are 25 multinational enterprises operating in these areas. The rest are domestic small and medium-size enterprises and mainly work for international companies.

Logistics service providers in Vietnam have set up business relations with the US, the EU, ASEAN, Japan, China, and the Republic of Korea. In recent years, logistics has played an increasingly important role in economic development and international economic integration.

Phuong Lan, General Director of the Amerasian Shipping Logistics Corporation (ASL), said “Logistics is a support division of the import and exports sector. When an economy grows, with an increasing volume of imports and exports, the workload of the logistics industry will also rise. Most logistics companies in Vietnam are small or medium-sized enterprises. But since Vietnam joined the WTO, the majority of Vietnamese logistic enterprises, which are mostly young, dynamic, and quickly adaptable companies, have grown.”

According to the Vietnam Maritime Administration, shipping is the most important area of logistics. But Vietnamese enterprises handle just 18% of the total import/export volume. The rest is done by foreign businesses.

Tran Thanh Hai, deputy head of the Import-Export Department of the Ministry of Industry and Trade, said Vietnam is poised for a logistics breakthrough.

“First, we need to improve the legal framework in line with the state management mechanism and adopt policies that support the industry’s growth. Second, it’s important to develop transportation infrastructure - bridges, roads, railway stations, ports, warehouses, and logistics centers," Hai emphasized.

The government recently approved an action plan to enhance the competitiveness and growth of logistics services in Vietnam by 2025.

DEEP C leads port JV for Quang Ninh

Russia’s private leader in port development and operation, The Seaport of Azov, and the DEEP C consortium headed by leading Belgian port, industrial zone, and green energy group Rent-A-Port have agreed to develop a state-of-the-art ecological industrial zone and port complex in Quang Ninh.

deep c leads port jv for quang ninh hinh 0 he establishment of a Vietnamese-Russian industrial manufacturing hub in northern Vietnam is expected to speed along a new wave of Russian investments in Vietnam as a result of recent high-level governmental commitments to boost the two countries’ investment and trade in the near future.

September 8 marked a milestone for co-operation ties between Quang Ninh authorities, Tien Phong Industrial Zone JSC – in which DEEP C consortium is a major shareholder – and The Seaport of Azov. 

The parties agreed to seek the central government’s approval to transform an area of 100 hectares in Quang Ninh’s South Tien Phong region into a hub for industrial manufacturing and port operations along the Chanh River.

The signing of the memorandum of understanding (MoU) was made on the sidelines of the 20th Session of the Vietnam-Russia Intergovernmental Commission on Trading-Commerce and Science-Technology Cooperation in Ho Chi Minh City, which saw the participation of approximately 150 Vietnamese and Russian businesses.

According to the MoU, the development of the Vietnam-Russia Industrial Complex within the $128 million Tien Phong Industrial Zone is expected to kick off swiftly if Vietnamese authorities give their go-ahead to the project soon.

The Seaport of Azov started investment in Quang Ninh in 2016. The intention of the partners is to equip the Vietnam-Russia Industrial Complex with a liquid jetty and a general cargo port, as a continuation of their year-plus of co-operation.

The complex will be developed in a location between the international deepwater seaport of Lach Huyen in the northern port city of Haiphong and the shallow Chanh River in Quang Ninh. This would enable all manufacturers based in the complex to transport their products via an inland waterway in order for them to be able to reduce the number of trucks on the road.

“This is a great opportunity to present The Seaport of Azov’s commitment to invest in Vietnam. Our ultimate aim for this strategic co-operation framework is to attract Russian companies to invest and expand their business in Vietnam in general and in northern regions like Quang Ninh in particular,” said Andrian Sinebok, chairman of the Board of The Seaport of Azov, at the signing ceremony.

DEEP C and The Seaport of Azov’s pipelined industrial zone and port complex coincides with investment from Russia to Vietnam hitting a downturn. Statistics show that in the first eight months of this year, Russian businesses registered to invest roughly US$1.026 billion in 114 valid projects in Vietnam.

The deal is also a positive result of the partnership agreement between Vietnam and Russia signed at the end of June. Vietnamese President Tran Dai Quang and Russian President Vladimir Putin agreed on investing more than $10 billion in both countries in the coming years.

According to Marc Stordiau, Rent-A-Port’s CEO, the signing of the MoU represents the strong business relationship of Rent-A-Port and The Seaport of Azov and a 20-year friendship between the global businesses.

For Vietnam, this is the logical continuation of the previous co-operation between DEEP C consortium and The Seaport of Azov in Euro Jetty JSC. The first investment of Euro Jetty JSC was the existing liquid jetty - one of the biggest of its kind in northern Vietnam - in Haiphong’s Dinh Vu/DEEP C Industrial Zone, which has attracted more than 70 projects invested by multinational companies from Japan, Germany, the US, Vietnam, Singapore, and South Korea, with a total investment amount of more than $3 billion.

Stordiau told VIR that The Seaport of Azov is operating a port in Russia in a location similar to Tien Phong, and thus this latest business venture of the Russian partner with its port experience and the DEEP C consortium will likely be successful. “We will continue working together with the Vietnamese authorities so as to realise a strategic plan to develop the maritime access to Tien Phong Port of Quang Ninh,” Stordiau said.

The Seaport of Azov is located on an intermodal corridor intended for movement of cargo from north to south, and also handles freight from and to the Balkan-Danube and Mediterranean regions. It is the main gate connecting the Mediterranean Sea with the internal waterway system of Russia and the Caspian Sea. It allows the delivery of cargo to the centre of Russia, to the Ural Mountains, and Central Asia.

Rent-A-Port is the port-related investment and management arm of the Belgian holding company Ackermans & van Haaren, which was founded in 1885 and is one of the largest listed holding companies in Belgium, with assets worth €2.7 billion ($3.2 billion).

Rent-A-Port operates as an engineering and investment company that analyses, designs, constructs, develops, and manages port, logistic, and marine infrastructure, as well as industrial zones worldwide. Some examples are the port of Antwerp (Belgium), the second-busiest port in Europe; the port of Kampen (Netherlands); the port of Duqm (Oman); and the port of Messaieed (Qatar).

In Vietnam, Rent-A-Port’s investments are in Dinh Vu Industrial Zone JSC with three DEEP C Industrial Zones covering 3,000ha in Haiphong, in Tien Phong Industrial Zone JSC with two DEEP C Industrial Zones in Quang Ninh, in green energy and water treatment projects in Haiphong and Halong Bay, and in co-operation with the Vietnamese government in wind- and solar-driven micro-desalination for agricultural production in the Mekong Delta region.

“Rent-A-Port has already invested an amount in excess of $200 million and has now also committed to invest an additional $250 million in various industrial zone and port complexes in Vietnam in the next 10 years,” Stordiau told VIR.

Vietcombank to pay $128.9 million as dividend     

The Joint Stock Commercial Bank for Foreign Trade of Viet Nam (Vietcombank) will make an 8 per cent dividend payout based on the bank’s performance in 2016.

The bank had previously targeted a 10 per cent dividend payment for its performance in 2016.

Vietcombank will pay shareholders VND800 (3.5 US cents) for every share they own. With nearly 3.6 billion shares being listed on the HCM Stock Exchange, the value of the dividend payout will reach nearly VND2.9 trillion ($128.9 million).

The bank will finalise the list of beneficiary shareholders on September 29 and make the dividend payout on October 16.

According to annual reports released by Vietcombank, the largest lender by market capitalisation, while its post-tax profit kept increased every year from VND4.42 trillion in 2012 to VND6.85 trillion in 2016, its dividend payout rate declined during the period from 12 per cent to 8 per cent.

The State Bank of Viet Nam is currently the largest shareholder of Vietcombank, owning more than 2.77 billion shares, or 77.1 per cent of the bank’s charter capital.

The second-largest shareholder is Japanese Mizuho Bank Ltd, which owns nearly 540 million shares, or 15 per cent of the bank, while other shareholders own total 7.89 per cent of the bank’s capital.

Thus, the State will be able to receive VND2.2 trillion from Vietcombank once the bank completes its dividend payout while Mizuho Bank Ltd will collect VND432 billion.

By the end of 2016, total amount of outstanding loans and raised capital increased by 19 per cent year-on-year each to reach VND460.8 trillion and VND600.7 trillion, respectively. The bank’s bad debt ratio fell to 1.46 per cent from 1.79 per cent at the end of 2015.

Vietcombank is targeting pre-tax profit of VND9.2 trillion, an yearly increase of 8 per cent, 8 per cent dividend payout rate for 2017 and bad debt ratio below 2 per cent.

The bank also plans to raise its total amount of outstanding loans and raised capital by 15 per cent and 14 per cent year-on-year to VND547 trillion and VND684.8 trillion, respectively. 

Carlsberg eyes at least 51% stake in Vietnam's Habeco - media

Danish brewer Carlsberg is keen on increasing its stake in Habeco, one of Vietnam’s biggest brewers, to at least 51 percent, a local news website reported, citing a Habeco executive.

Vietnam has one of the world’s most attractive beer markets and the biggest in Southeast Asia, buoyed by a young population that consumed nearly 4 billion litres last year. The government wants to fully divest its majority stake in Habeco as also in rival Sabeco. 

Carlsberg, which already owns around 17 percent in Habeco, has been discussing its priority purchase rights with the Vietnamese government, which has delayed the Habeco sale.

Sabeco, in which the government owns a 90 percent stake, has also seen interest from foreign players such as Dutch brewer Heineken and Japan’s Kirin.

Vietnam’s Steering Committee for Enterprise Innovation and Development, which oversees the country’s privatisation drive, said last month it aimed to “completely resolve problems in strategic cooperation” with Carlsberg, and inform the prime minister about the results by Nov. 15.

Habeco is still in talks with the Danish company on the stake sale, An Ninh Thu Do newspaper quoted Habeco’s deputy chief Vuong Toan as saying.

The media report also quoted Toan as saying that foreign companies are not allowed to own more than 49 percent of Habeco due to foreign ownership limits.

Carlsberg said on September 8 it would not comment on “rumours”.

Last month, the company said it held “several constructive meetings with the Vietnamese government to discuss the privatisation process of Habeco”.

“We now see good progress in these meetings, and will continue these discussions with the Vietnamese government for the next steps,” Carlsberg Chief Executive Cees ’t Hart said at a conference call after its second-quarter earnings on August 16.

Can Tho seeks link with Australia     

Mekong Delta’s Can Tho City hopes to expand co-operation with overseas partners, including those from Australia, to improve production capacity, as it sets out to become a regional pioneer in hi-tech agriculture.

The statement was made by deputy chairman of the municipal People’s Committee Truong Quang Hoai Nam on Thursday at a meeting with Rob Gordon, CEO of food producer and exporter Sunrice from Australia, during which they discussed ways to boost the city’s rice production and exports.

Can Tho lies in the heart of the Mekong Delta, Viet Nam’s largest rice basket, and exports more than half a million tonnes of rice worth US$300 million on average annually, Nam said.

The region’s rice exports were estimated at more than 400,000 tonnes in the first eight months of 2017, an increase of 3.9 per cent from the same period last year, earning $190.8 million and up 10.1 per cent year-on-year, he said.

The city aims to lead the region in hi-tech agriculture to reduce costs and enhance productivity and quality of farm produce, he said, adding that it is looking forward to fostering ties with foreign companies, particularly from Australia, to access new agricultural technologies and more markets in Europe, North America and North Asia.

On his part, Gordon said Viet Nam is capable of gaining a larger market share in these markets thanks to its competitively priced rice compared with rivals in the region, with Vietnamese rice selling for $300-400 per tonne less than rice from Thailand.

He suggested that his firm will assist Can Thơ in developing supply chains in rice farming. He also said the firm is interested in some local hi-tech agricultural projects. Nam welcomed Sunrice’s co-operation with Can Tho on the rice trade market’s development and pledged that the city’s authorities at all levels will create favourable conditions for Sunrice invest in the city.

Nam hoped that Sunrice, being one of the largest global rice distributors, will be the bridge connecting trade between Vietnamese and foreign food enterprises in the future, thereby contributing to elevating the country’s position in the world market.

Ninh Thuan’s orchard model a success     

The central province of Ninh Thuan is developing eco-tourism activities by opening up farmers’ fruit orchards to visitors, according to the province’s Department of Culture, Sports and Tourism.

About 800 hectares of many kinds of fruit, including mangosteen, durian, and rambutan, are grown in Lam Son Commune in the province’s Ninh Son District. .

Visitors can pick the fruit for a low price of VND10,000 (US$0.45) per kilo for rambutan, VND35,000 (US$1.5) per kilo for mangosteen and VND40,000 (US$1.8) per kg for durian.

About eight years ago, the orchard owners began inviting friends during the harvest season to introduce them to fruits grown in the provinces of the Cuu Long (Mekong) Delta.

Since the fruits cultivated in Ninh Thuan Province have a much higher quality than others planted in the Mekong Delta, and a higher productivity rate, farmers now earn about three times more than they made from rice or corn.

Phan Huu Thanh, a farmer from Lam Son Commune in Ninh Son District, said he started a fruit orchard in 1990 and now has about 2.3ha with 370 plants of various kinds of fruit, including durian, mangosteen, green grapefruit and rambutan.

He earns about VND150 million ($7,000) per year.

Most orchard owners collect an average of VND40,000 ($1.8) per visitor, he said, adding that most visitors book a day or week before the harvest season. There is no need to buy a ticket, but visitors must pay for the fruit they pick.

To protect the orchard from damage, Thanh receives no more than 50 visitors a day.

Nguyen Thi Hoa, from Da Lat, said her family visits Thanh’s fruit orchard every harvest season to pick fruit and enjoy chicken dishes made with fruit.

Lam Son Commune has about 210 households cultivating fruit on a total of 236ha that once was used to grow rice or corn.

Truong Thanh Quyen, chairman of the commune’s People’s Committee, said the fruit orchards had improved the lives of local farmers, who have been encouraged to expand their orchards.

Besides fruit orchards, the province is developing the cultivation of vineyard grapes for winemaking.

About 400 households cultivate grapes on a total area of 180ha in Ninh Hai District, according to Luu Xuan Hai, the deputy chairman of Ninh Hai District’s Vinh Hai Commune.

Chau Thanh Hai, director of the province’s Department of Culture, Sport and Tourism, said the department was working with other districts and cities in the province to expand the fruit orchard model. 

Leather, shoe exports top $9.6b     

Leather and footwear exports in the first eight months topped US$9.64 billion, a year-on-year increase of 12.2 per cent, according to the Ministry of Industry and Trade.

They went to 100 countries, with the US, EU, Japan, China, and South Korea being the main buyers, it said.

Hanoi mulls 6 cross-river projects worth US$2.5bn

The administration of Hanoi is seeking government approval for its development of six projects crossing the Red River and Duong River, costing a combined VND57 trillion (US$2.51 billion).

The first one is the Tu Lien Bridge, which runs three kilometers across the Red River and connects Hanoi’s Tay Ho and Dong Anh Districts.

The bridge is part of a nine-kilometer extension of the Hanoi – Thai Nguyen Expressway.

The second project includes the construction of the Thuong Cat Bridge and its access roads, which stretch 5.2 kilometers from an intersection with Belt Road 3 in Bac Tu Liem District to the Bac Thang Long industrial zone in Dong Anh.

Tran Hung Dao River Tunnel is the third project, running 3.1 kilometers from the border of Hoan Kiem and Hai Ba Trung Districts to Long Bien District on the other side of the Red River.

In the fourth project, the second phase of the existing Vinh Tuy Bridge will be constructed, fully linking Vinh Tuy Ward in Hai Ba Trung District to Co Linh Street in Long Bien District.

The Duong Bridge, measuring 1.4 kilometers in length, will be built across the Duong River, connecting Long Bien’s Duc Giang Ward with Yen Vien Town in Gia Lam District.

The final project will see the construction of the 5.4-kilometer Giang Bien Bridge and its access roads, running through Long Bien and Gia Lam Districts.

According to Hanoi’s administration, the proposed bridges and river tunnels would establish an inter-connection among its belt roads, and speed up the urbanization of its districts situated to the north of the Red River.

Hanoi has also requested government permission to employ special mechanisms in calling for private investments in these projects.

Foreign companies accounted for more than 81 per cent of the figure.

The Viet Nam Leather, Footwear and Handbag Association (Lefaso) said local companies lack the resources to expand production or market, while foreign-invested firms have for many years invested to expand to capitalise on free trade agreements that Viet Nam had signed or was set to sign, it said.

So the latter’s exports keep increasing, it added.

Though intra-ASEAN exports enjoy zero tariffs, leather and footwear exports to member countries remain modest compared to the sector’s potential.

The exports were worth less than $400 million last year, going mainly to Singapore, Malaysia, Thailand, and the Philippines.

According to trade experts, footwear companies do not treat ASEAN as a key export market.

But according to Lefaso, ASEAN is a hard market to crack since many other members are also strong players, especially Thailand and Indonesia.

Besides, many put up technical barriers to protect their domestic production, the ministry said.

Experts said that this year the world economy is expected to be better than in 2016, and China would continue to reduce investment incentives for textile and footwear to focus on high-tech sectors, meaning orders for shoes and bags would continue to move from China to Viet Nam.

Nguyen Duc Thuan, Lefaso chairman, said production and export of leather and footwear have been good this year.

The association forecasts exports to be worth $17.8-18 billion this year, an increase of 10 per cent over last year, he said. 

Vietnamese tea exporters enjoy robust achievements

Vietnam’s tea exports in the first eight months of the year reached 90,000 tonnes, earning US$142 million, up 12% in volume and 11.8% in value compared to the same time last year, according to the Vietnam Tea Association.

Tea was sold at nearly US$1,570 per ton on average, down 1.5% from last year.

Pakistan imported the most tea from Vietnam.

Other top tea consumption markets included India, the United Arab Emirates and Taiwan (China).

Tea exporters said that there is an abundance of raw materials thanks to safe cultivation applied in all tea zones nationwide.

APEC forum agrees to foster SMEs     

The digital economy is driving growth nowadays, and it is getting hard for business owners to do cross-border trading or access the global market if they do not embrace digital transformation, the 2017 APEC Online-to-Offline (O2O) Initiative Forum heard in HCM City on Sunday.

Pei-Ti Hu, deputy director general, small and medium enterprise administration at the Chinese Taipei Ministry of Economic Affairs, said in her opening speech: “Chinese Taipei aims to enhance SMEs digital competitiveness and resilience with co-operation between the public and private sectors.”

SMEs are the engine of economic growth and prosperity, and over the past few years they have been dramatically transformed by technology, she said.

“The digital revolution and innovation have totally changed the way we all do business. SMEs now have the ability to access customers by using the internet.

“However, digitisation now brings SMEs not only opportunities but also challenges such as more exposure to cyber ethics. Many SMEs remain unprepared for [cyber ethics] and awareness of [digital resilience] remains low.”

Policy makers from APEC economies, owners of e-commerce platforms, incubators, accelerators and experts were encouraged to support SMEs/startups in fully utilising the opportunities created by digital technologies.

The APEC O2O initiative also aims to raise awareness of digital resilience among SMEs/startups since the development of digital technology also brings more exposure to cyber threats.

APEC realises that cyber threats have become a growing concern and crucial challenge to all firms regardless of size and therefore it is vital to prepare SMEs/startups to defend themselves from those threats.

“It is only when SMEs fully understand the opportunities and challenges of digital transformation they are able to unleash their potential for sustainable, innovative, inclusive and quality growth towards a shared future,” Hu said.

The one-day forum attracted around 100 stakeholders.

There was a conversation keynote titled “O2O Business: Opportunities and Challenges of Modernizing SMEs to Go Global”, an innovation dialogue titled “Unleash the potential of SMEs through digital transformation for a Shared Future”, an APEC innovation study and a board meeting where experts offered advice and guidance on business plans presented by start-ups. 

 Tra Vinh lures 290 million USD investment this year

The Mekong Delta province of Tra Vinh approved five investment projects with a total capital of 2,226 billion VND (98 million USD) in August, according to the provincial Department of Planning and Investment.

They included two CoopMart supermarkets, a fertilizer production project, and two projects on building infrastructure system in Cau Quan and Co Chien industrial parks.

Since the beginning of this year, Tra Vinh has drawn 33 projects, including four foreign projects worth 133 million USD and 29 domestic projects with a combined capital of 3,562 billion VND (157 million USD).

According to Cao Dang Linh, Vice Director of the department’s Centre for Investment Promotion and Business Support, the province is considering the approval of two other projects on petrol trading and shrimp varieties production, along with the adjustment of a project and verification of 11 others.

Tra Vinh is home to 193 valid projects, including 36 foreign-invested projects worth 3.09 billion USD, and 157 domestic ones worth 100.15 trillion VND (4.4 billion USD).-

Vietnam, Russia gear towards 10 billion USD trade in 2020

Vietnam and Russia have agreed to effectively implement the Vietnam-Eurasian Economic Union (EAEU) Free Trade Agreement (FTA) in order to create breakthroughs in economic, trade and investment ties between the two countries, gearing towards bilateral trade of 10 billion USD in 2020. 

The consensus was reach during the 20th meeting of the Vietnam-Russia Intergovernmental Committee for Economic-Commercial and Scientific-Technological Cooperation in Ho Chi Minh City on September 8. 

The event was co-chaired by Deputy Prime Minister Trinh Dinh Dung and his Russian counterpart Igor Ivanovich Shuvalov. 

In his opening remarks, Deputy PM Dung highlighted the long-standing friendship and the comprehensive strategic partnership between Vietnam and Russia, which, he said, has developed fruitfully across fields, contributing to national construction and development in each country. 

The annual meeting of the committee aims to materialise political commitments and determination of the two countries’ high-ranking leaders, by putting forth specific and inclusive solutions in order to advance the bilateral relationship in a more effective and pragmatic fashion, he said. 

The Deputy PM noted that bilateral trade has regained its growth rate, especially after the Vietnam-EAEU FTA took effect, to reached nearly 2 billion USD in the first seven months of 2017, up 27 percent year-on-year. 

As of June 2017, Russia had 115 foreign direct investment (FDI) projects worth 1.05 billion USD in Vietnam, while Vietnam invested in 18 projects valued at 2.4 billion USD in Russia, Dung said, adding that the number and quality of projects on investment, science and technology have been increased. 

At a press conference following the meeting, Deputy PM Dung announced that the two sides had agreed on concrete measures to step up cooperation in a wide range of areas, from economy, trade, agriculture, energy, mining, finance and banking to education-training, science-technology, transport, health care, construction, labour, culture, sports and tourism. 

As part of efforts to boost bilateral trade, the two sides will increase the export of Vietnam’s agro-forestry-fishery and consumer products to Russia, while continuing to work with each other to improve the quality of exports, ensuring product quality and food hygiene and safety. 

Dung said the two sides agreed to accelerate the implementation of joint projects on industry, energy, oil and gas, and infrastructure construction, and consider possibilities for partnering in urban railway and metro projects. 

In the field of energy, the two sides hailed the operation of Vietnam-Russia joint ventures in oil and gas exploration and exploitation in Vietnam’s continental shelf and Russia’s territory. 

They agreed to cooperate in building and upgrading thermo-electric and hydro-electric plants in Vietnam. 

Russia’s First Deputy PM Igor Ivanovich Shuvalov said he is satisfied with the outcomes of the 20th meeting of the intergovernmental committee, adding that bilateral trade remains modest. 

He said Russia will pay attention to the import of Vietnamese seafood and agricultural products and is willing to establish joint ventures specialising in farm produce with Vietnam. 

The Russian official also held that the two countries boast potential for cooperation in industry such as auto assembly, and education-training. Russian enterprises wanted to join in the construction of underground railways in Hanoi and Ho Chi Minh City.

He expressed his belief that Russia will continue to be Vietnam’s important partner and wished that Vietnamese enterprises will gain a firm foothold in the Russian market.

Samsung Securities deepens Vietnam inroads

Aiming to accelerate inroads into the Vietnamese stock market to keep pace with compatriot competition who are already present in Vietnam, Samsung Securities decided to acquire stakes in local asset management companies, one of which is Dragon Capital.

According to newswire Business Korea, Samsung Securities will co-operate with Caldera Pacific, a private equity fund from Hong Kong to buy a 40% stake in Dragon Capital to become the second-largest shareholder.

Samsung Securities will hold 10% and Caldera Pacific 30 per cent. It is also known that Samsung Securities will shell out considerable funds for the acquisition.

"The opening of an office or a corporation, a general overseas advancement form, takes a lot of time from the input of money to the results. But the acquisition of stakes in a local asset management company allows a company to efficiently secure a sales network and infrastructure," an official familiar with the acquisition said.

Samsung Securities selected a different way than its countrymen to enter Vietnam. Notably, instead of opening representative offices or establishing subsidiaries in Vietnam, Samsung Securities aims to acquire stakes in a local asset management company.

Market experts forecast that acquiring a stake in Dragon Capital is the beginning of Samsung Securities’ strategy to enter the Vietnamese stock market and the company may additionally acquire stakes in other companies.

Currently, five Korean securities firms are present in Vietnam with seven representative offices and subsidiaries, namely Mirae Asset Daewoo, NH Investment & Securities, Korea Investment and Securities, Golden Bridge, and Shinhan Financial Investment.

Dragon Capital is the largest asset management company in Vietnam. It has poured capital in Vinamilk, FPT Retail, PV Gas, Vietjet Air, Hoa Phat Group, and VPBank, among others. 

The Vietnamese company also played a role as a bridgehead for capital from Hong Kong to enter Vietnam.

Vietnam-Japan financial leasing joint venture makes debut

BIDV-SuMi TRUST Leasing Co., Ltd (BSL) officially opened in Hanoi on September 8, becoming the first financial leasing joint venture between a Vietnamese bank and a foreign financial institution in Vietnam. 

BSL is a joint venture between the Bank for Investment and Development of Vietnam (BIDV) and Sumitomo Mitsui Trust Bank (SuMi TRUST) of Japan, which was given a licence by the State Bank of Vietnam (SBV) on April 12, 2017. 

Converted from BIDV Financing Leasing Company, Ltd., a 20-year experience domestic leasing company established by BIDV, BSL has 895.6 billion VND in chartered capital, half of which belongs to BIDV and 49 percent to SuMi TRUST. 

Having business presence in Hanoi, Ho Chi Minh City, Da Nang and close connection with 190 branches of BIDV nationwide, BSL is ready to provide leasing products to both Vietnamese and FDI companies to support the sustainable growth of their production, administration and sales activities. 

Nguyen Dong Tien, SBV Deputy Governor, said he believes that BSL will create an impulse for financial leasing activities in Vietnam. 

BIDV and SuMi TRUST have cooperated with each other since 2013. At the end of April 2016, the two sides agreed to join hands in the financial leasing sector. 

As a result, BSLwas established in Tokyo, Japan, in June 2017, in the witness of Vietnamese Prime Minister Nguyen Xuan Phuc.

Vietnam Airlines four-star status reaffirmed

The national flag carrier Vietnam Airlines has maintained a Skytrax four-star rating for two consecutive years.

Skytrax is the world’s leading airlines and airport rating organization.

“Over the past few years, Vietnam Airlines has made great efforts in developing an international and domestic flight network, keeping a convenient and punctual flight schedule and efficiently operating some of the most modern aircraft in the world,” Duong Tri Thanh, President and CEO of Vietnam Airlines, said.

The excellent achievement of being recognized as a four-star airline for two straight years by Skytrax is a great honour and we are proud to provide millions of passengers with outstanding service quality as well as promote the image of Vietnam around the world, he said. 

In the first eight months of this year, the airline scored 90.2 percent on the on-time performance index (OTP), surpassing the international average.

Channel News Asia: Vietnam’s strong growth is likely to persist

Vietnam’s strong growth is likely to persist thanks to its young, ambitious, and business savvy population, said an article published by Singapore-based Channel News Asia. 

The commentary, titled “Ambitious and smart, youths in Ho Chi Minh City are building Asia’s Silicon Valley” by Stephanie Jones and Rafael Masters, said that Vietnam, for the last few years, has seen remarkably strong, continuous growth, averaging 6.15 percent each year since 2000.

Urbanisation and a growing middle class are fuelling economic growth and driving the creation of new commercial opportunities. 50 percent of the population have access to the internet and more than a third use smartphones, according to the article. 

At the same time, Vietnam has become increasingly attractive for new investors, and local talent is developing rapidly, even as the country has to compete against Singapore, Hong Kong (China) and other regional stars.

In particular, Vietnam’s software industry is poised to become the Silicon Valley of Asia, especially through the aptly named 1.5 billion USD project Silicon City, located just outside Ho Chi Minh City.

Stephanie Jones and Rafael Masters shared the view that indeed, HCM City presents itself as the jewel in the crown of Vietnam’s success story.

They said as Vietnam’s largest and most progressive city, HCM City is the engine of the country’s growth. At a growth rate of 8.5 percent a year, HCM City has been transformed in the last ten years – with plans for a new airport in the pipeline in addition to a mushrooming central business district and a massive growth in waterfront developments.

HCM City is also the epicentre of the start-up scene in Vietnam, where most of Vietnam’s 3,000 start-ups operate. In May 2016, early-stage venture fund 500 startups pledged a further 10 million USD to their Vietnam fund. Other venture capital companies like CyberAgent, Ventures and SeedCom are also active and investing in new firms, the writers added. 

HCM City has even produced one of Southeast Asia’s unicorns – game developer VNG which became the first Vietnamese technology company to hold an IPO in the US in June, and has more than 70 million users from Vietnam, Myanmar, Japan, the Republic of Korea and Malaysia on its chat app called Zalo alone.

Stephanie Jones and Rafael Masters said that HCM City’s start-up scene may involve new and emerging technology, but at its core is a story about people.

Over the past ten years, thousands of young, aspiring Vietnamese entrepreneurs have moved into the city to create their own start-ups – many of which are in developing tech solutions including e-commerce platforms, apps and games.

Coworking spaces and cafes also have sprung up all across the city to meet the demands of a class of entrepreneurs who network frequently and work in small groups without a dedicated office space, they explained. 

The start-up scene owes its success in part due to the strong push by the Vietnamese government. Officials have promised financial support of 90 million USD  to more than 2,000 local hi-tech start-ups, and made plans to set up innovation hubs that provide training programmes, legal consulting and networking activities to connect start-ups with universities and research centres.

They stressed that but the key differentiator that makes Vietnam's start-up scene particularly vibrant is the quality of the Vietnamese people working in that sector.

Vietnamese talent is internationally competitive, increasingly well-educated, mobile and tech-savvy.

Vietnam has a high literacy rate of 94.5 percent and OECD studies have placed Vietnam 17th out of 65 countries on PISA tests. The Government promises to improve the academic qualifications and business capabilities of its workforce seem to be bearing fruit. Education also continues to make up 20 percent of Government spending.

Vietnamese college and university students have been scoring very highly in internationally ranked tests in recent years, offering a pool of skilled labour for prospective entrepreneurs.

Many young Vietnamese are also sent overseas to study and return with grand ideas of starting their own companies. An estimated 21,000 Vietnamese students attended American universities last year, the sixth largest number of foreign students in the US.

Stephanie Jones and Rafael Masters said the students they have encountered in their work in HCM City are smart, bright and spunky.

Unlike developed countries like Singapore, Vietnam is experiencing the dividends of a population boom. 70 percent of the population of Vietnam is under 30, and Vietnamese youths are highly ambitious and internationally-minded, they commented. 

They take ideas like the transport sharing economy Grab and Uber introduced, and try to implement them in a way more suited to the Vietnamese market. 

Young and well-educated Vietnamese born overseas are returning in droves and adding to the pool of talent.

Even though Vietnam is attracting ambitious young executives from all over Asia, many say they find it hard to compete with bright and savvy local talent, according to the article. 

Young Vietnamese are able to focus on building strong start-ups because they also enjoy family support: Vietnamese family units typically consist of three generations living in a single house. Without a pension system, children take care of parents in old age and grandparents provide childcare and support while young parents are out working.

This strong family nucleus has been a source of support and safety net for young Vietnamese executives. They can devote more time and energy to their businesses, secure in the knowledge that they can turn to their parents to manage the household and not worry about childcare.

In this respect, Vietnamese talent with families have a huge advantage over those in other countries, and even over expatiates living on their own in Vietnam, they said. 

All things considered, Vietnam is in a sweet spot now. Its ease of doing business is on par with China and recruitment demand is up 32 percent.

Strong growth is likely to persist, the article said, citing the World Bank’s statistics as saying that Vietnam’s economy could expand at an average of 6.3 percent in the next three years.

With a young, ambitious and business savvy-Vietnamese population, it is not hard to see why, it concluded. 

Vietnamese tea exporters enjoy robust achievements

Vietnam’s tea exports in the first eight months of the year reached 90,000 tonnes, earning 142 million USD, up 12 percent in volume and 11.8 percent in value compared to the same time last year, according to the Vietnam Tea Association.

Tea was sold at nearly 1,570 USD per ton on average, down 1.5 percent from last year.

Pakistan imported the most tea from Vietnam.

Other top tea consumption markets included India, the United Arab Emirates and Taiwan (China).

Tea exporters said that there is an abundance of raw materials thanks to safe cultivation applied in all tea zones nationwide.

Leather, shoe exports top 9.6 billion USD

Leather and footwear exports in the first eight months topped 9.64 billion USD, a year-on-year increase of 12.2 percent, according to the Ministry of Industry and Trade.|

Vietnam’s leather and footwear products went to 100 countries, with the US, EU, Japan, China, and the Republic of Korea being the main buyers, it said.

Foreign companies accounted for more than 81 percent of the figure.

The Vietnam Leather, Footwear and Handbag Association (Lefaso) said local companies lack the resources to expand production or market, while foreign-invested firms have for many years invested to expand to capitalise on free trade agreements that Vietnam had signed or was set to sign, it said.

So the latter’s exports keep increasing, it added.

Though intra-ASEAN exports enjoy zero tariffs, leather and footwear exports to member countries remain modest compared to the sector’s potential.

The exports were worth less than 400 million USD last year, going mainly to Singapore, Malaysia, Thailand, and the Philippines.

According to trade experts, footwear companies do not treat ASEAN as a key export market.

But according to Lefaso, ASEAN is a hard market to crack since many other members are also strong players, especially Thailand and Indonesia.

Besides, many put up technical barriers to protect their domestic production, the ministry said.

Experts said that this year the world economy is expected to be better than in 2016, and China would continue to reduce investment incentives for textile and footwear to focus on high-tech sectors, meaning orders for shoes and bags would continue to move from China to Vietnam.

Nguyen Duc Thuan, Lefaso Chairman, said production and export of leather and footwear have been good this year.

The association forecasts exports to be worth 17.8-18 billion USD this year, an increase of 10 percent over last year, he said.

Nepal seeks tourism cooperation with HCM City

Twenty-one Nepalese businesses operating in the aviation and tourism sectors recently visited Ho Chi Minh City to study potential tourism cooperation and sign agreements in this field with the locality. 

Nepal is home to eight of the ten highest mountains in the world, including Mount Everest, dubbed the “roof of the world,” along with many historical and religious relic sites. 

Therefore, the focus of the tourism cooperation will be climbing and spiritual tourism. 

Anil Lama, President of the Nepal Society of Travel and Tour Operators, said at an exchange programme in HCM City on September 10 that apart from exploring Mount Everest, visitors can take part in other activities like pilgrimages, boat rides and parachuting.

US power company wants to invest in gas-fired power project

The US-based power company AES Corporation said it wants to join the PetroVietnam Gas JSC (PV Gas) in the Son My 2 gas-fired thermal power project.

The proposal was made by President of AES Vietnam David Stone during a recent working session with PetroVietnam group. 

PetroVietnam deputy director general Nguyen Hung Dung affirmed that the group is ready to work with US investors, including AES, in the oil and gas sector, especially gas-fired thermal power projects.

The Son My 2 is one of the nine gas-fuelled power projects that the Government has assigned PetroVietnam to invest in. The project consists of three power plants using liquefied natural gas, with designed capacity of 750 MW each. Built at the Son My industry-services-gas complex in the central coastal province of Binh Thuan, the facilities are set to become operational in 2023, 2024 and 2025.

The AES, which is listed in the US Fortune-200, joined shareholders from subsidiaries of Posco Energy Corporation from the Republic of Korea and China Investment Corporation to form the AES-VCM Mong Duong Power Company Limited in Vietnam. 

The company is known for its 1,242 MW Mong Duong 2 power plant. The coal-fired power project plant was built under a Build-Operate-Transfer (BOT) agreement and would be transferred to the government after 25 years.-

Dak Lak calls for investment from Australian firms

A delegation of the Central Highland province of Dak Lak, led by Vice Secretary of the provincial Party Committee Y Bier Nie, held a workshop in Sydney, Australia to call for Australian investment in the province.

The event, organized with the coordination of the Australia – Vietnam Business Council (AVBC), saw the participation of AVBC members and dozens of local businesses.

Dak Lak representatives took the occasion to introduce the province’s natural conditions, socio-economic situation, potential and disadvantages. 

Announcing a list of priority projects in need of investment, Dak Lak officials highlighted hi-tech agriculture, agricultural product processing, garment-textile, wind power, solar power, services and tourism.

The province also announced incentives for investors in terms of land, taxes, favourable administrative procedures, among others.

Australian firms inquired for information of the province’s key projects, focusing on the export of coffee beans and pepper, education, technology transfer, tourism and real estate.

A number of Australian firms registered to visit Dak Lak and work with its enterprises to explore investment projects and environment.

Previously, the delegation and VBAA also hosted a similar workshop in Melbourne. 

Australia is the second foreign market Dak Lak chose to promote investment, following the Republic of Korea.

HCM City seeks policy research cooperation with Chinese partner

Ho Chi Minh City wants to boost cooperation with the Development Research Centre of the State Council (DRC) of China in policy research and consultation.

During his reception for the Centre’s Party Secretary Wang Anshun in HCM City on September 9, Secretary of HCM City Party Committee Tat Thanh Cang asked the centre to share its experience in addressing urban issues, including traffic infrastructure development, climate change adaption, and urban population pressure.

He lauded the effective operation of the Linh Trung Export Processing Zone, a joint project of Vietnam and China, saying that it has lured numerous domestic and foreign investors, contributing to the city’s industrial production and economic development.

For his part, Wang Anshun expressed his hope to boost cooperation with the city in urban management and building of socio-economic development targets and plans.

He underlined the importance of policy research and consultation to serve national development, affirming that the cooperation between his centre and the Economic Commission of the Communist Party of Vietnam’s Central Committee will make a significant contribution to the sustainable economic development of each nation, thus consolidating the Vietnam – China friendship.

Tra fish exports to US on course

Despite a new US requirement that foreign exporters demonstrate their food safety control system is equivalent to American regulations, no backlog has been recorded in Vietnamese tra fish exports to that country. 

The US Food Safety and Inspection Service (FSIS) began applying the new regulations for Siluriformes fish on August 2, instead of September 1 as announced earlier, mandating the checking of all shipments for records, packaging and labels.

Siluriformes fish include tra, basa, tre and lang fish.

The US is the second largest importer of Vietnamese tra fish, receiving 22 percent of Vietnam’s total exports of the catfish. US imports of tra were worth 220.8 million USD in the first eight months of this year, up 3.3 percent over the same period last year.

Only three or four Vietnamese firms have been able to export several tra products, including cut catfish, frozen catfish fillet, frozen rolled catfish and powdered fillets, to the US, said the Ministry of Agriculture and Rural Development (MARD).

A report from the Vietnam Association of Seafood Exporters and Producers (VASEP) showed that the country earned 1 billion USD from the export of seafood in the first seven months of this year, a year-on-year increase of 8.2 percent.

Although tra fish exports to EU states dropped 23.5 percent, new markets such as Brazil, Mexico, Colombia and Saudi Arabia were seeing steady growth.

In the first eight months of this year, the production of tra fish in Mekong Delta provinces reached 815,500 tonnes, up 10 percent year-on-year. Dong Thap is the province with the largest harvest at 303,400 tonnes, up 25.4 percent over the same period in 2016.

According to the head of the Dong Thap Aquaculture Product Department, Le Hoang Vu, tra fish are raised on 1,504 ha in the province, more than 809 ha of which are certified under the standards of VietGAP, GlobalGAP, Best Aquaculture Practices (BAP) and Aquaculture Stewardship Council (ASC).

The province has 20 seafood processing factories with a total designed capacity of more than 467,000 tonnes per year. It has produced an estimated 180,000 tonnes of tra fish in the first eight months of this year, reaching nearly 500 million USD in export turnover.

The province plans to expand its breeding area to 2,000 ha by 2020, with an output of more than 541,000 tonnes of tra fish per year.

Vietnam capitalises on RoK development funding

Minister of Planning and Investment Nguyen Chi Dung has visited the Republic of Korea to attend a celebration of the Korea Economic Development Cooperation Fund (EDCF)’s 30th founding anniversary.

At the event, on behalf of the fund’s beneficiaries, Dung delivered a speech on how Vietnam has used international funding to fuel economic growth over the past 30 years.

He also put forth a number of measures to optimize the usage for improved outcomes. 

While in the RoK from September 5 to 8, the minister had a series of meetings with Minister of Foreign Affairs Kang Kyung-wha, leaders of the Ministry of Strategy and Finance, and representatives of the Korea International Cooperation Agency and Export–Import Bank of Korea.

At these meeting, discussions focused on measures to boost bilateral investment and trade, and effectiveness of the employment of official development assistance (ODA) and foreign direct investment (FDI) capital.

As part of his visit, Minister Dung chaired two dialogues with top RoK companies, which were interested in the Vietnamese market. The RoK businesses urged continued improvement of business climate in Vietnam and stressed their intention to further expand operations in the country.

Dung also held separated receptions for leaders of Samsung, LG, Huyndai Motor, and Lotte, among other RoK groups, who stated they considers Vietnam a strategic market and are committed to helping Vietnamese firms be part of their supply chains in the future.

In a sideline interview with the Vietnam News Agency, the official said the visit promises to open up a new chapter in the Vietnam – Rok strategic partnership.

E-commerce experts talk Vietnam’s future

Some top experts in payments, e-commerce and retail gave their insights into the future of online trading in Vietnam at a recent two-day seminar in HCM City.

The content and structure of Seamless Vietnam were designed to cover the entire omni-channel journey.

Participants heard experts speak about digital marketing, merchandising, pricing, and in-store technologies.

Others spoke about payments, staff training, multi-channel, call centres, home delivery, click & collect, supply chains, packaging, customer service, loyalty and retention, and product returns.

Attendees were from major Vietnamese banks and leading e-commerce and retail giants.

With a population of 95 million, the highest retail sales growth in Asia of 10.4 percent, an e-commerce market predicted to be worth 10 billion USD by 2020, and a regulatory environment increasingly opening up to foreign investment, there has never been a better time in Vietnam for senior executives from across the e-commerce eco-system to come together and discuss future strategies, partnerships and solutions.

The State Bank of Vietnam kicked off the conference with a keynote address on “Moving towards a cashless society in Vietnam by 2020.”

“Cashless payments have strongly increased in Vietnam recently with 65 banks providing internet banking, 35 others providing mobile banking and many other credit organisations launching electronic payments,” Tran Dinh Cuong, deputy director of the central bank’s HCM City office, said.

“The cash payment ratio has reduced to 12 percent in comparison with 14 percent in 2010 and the figure will be less than 10 percent by 2020.”

Le Anh Tuan, head of VietinBank’s electronic banking division, said: “Low fees and safe, secure, fast technologies are the two most important things to attract customers to electronic payments.”

Nguyen Phu Vinh, head of the HCM City Electricity Corporation’s business department, said his company has already tied up with 22 banks and eight fintech companies to collect electricity tariffs online.

“As of the end of July there were 1.7 million customers paying through banks and other credit organisations, accounting for 60 percent of our revenues.

“We plan to reach 100 percent by 2020.”

On the sidelines of the conference there was an exhibition of products and services offered by major players from across the payments, retail and e-commerce vendor communities.

It was the first time Seamless, Asia’s largest and longest running conference focused on cards and payments, was organised in Vietnam. Over 400 senior executives and experts attended the event. 

HCM City: Seminar seeks ways to attract more Malaysian visitors

A seminar discussing ways to lure more Malaysian tourists to HCM City took place on September 8 on the sidelines of the three-day International Travel Expo (ITE) HCM City 2017.

According to Euromonitor International, Malaysians spend big on shopping on overseas trips with over 25 percent of their total travel expenses that include air tickets, leisure activities, foods and accommodations. 

That news is a great opportunity for Vietnam’s tourism industry, said Dinh Ngoc Duc, Director of the market department at the Vietnam National Administration of Tourism.

Many tourist destinations in Vietnam, however, failed to satisfy the Malaysian tourists’ high demand for shopping.

Speaking at the event, director of Malaysia’s Travel Promotion Department in HCM City Abdul Hadi Che Man explained that a majority of Malaysians are Muslim who must strictly adhere to Halal guidelines in terms of foods, drinks and religious practice even when travelling abroad. But not many hotels and restaurants in Vietnam are able to meet such needs, he noted.

Delegates to the seminar suggested that Vietnamese tour operators need to better understand needs and habits of Malaysians to better serve them, for example, there should be more shopping centres and restaurants with Halal certificates and more tour guides who have good understanding of the needs of Muslim visitors.

The city’s tourism should offer more conveniences for Malaysian guests such as prayer rooms at international airports, Halal restaurants at hotels and shopping malls, and tour packages inclusive of Halal meals, Abdul Hadi Che Man said.

Malaysia was on the top 10 Asian tourist markets for Vietnam in the first eight months of 2017. Vietnam welcomed over 295,000 Malaysians during the reviewed period, up 17.1 percent from the same period last year and accounting for 3.48 percent of the country’s total international tourist arrivals.

First shipment of Vietnamese chicken dispatched to Japan

The first batch of Vietnamese chicken was exported to Japan at the Long An International Seaport in the southern province of Long An on September 9.

This is an important event to Vietnam’s agriculture sector and the partners in the supply chain. 

Japan is a very tough market, Minister of Agriculture and Rural Development Nguyen Xuan Cuong said, adding that after chicken, Vietnam is determined to seek to export pork and milk to this market.

Koyu & Unitek Co., Ltd, a joint venture between Australia and Japan in southern Dong Nai province, is in charge of shipping 30 tonnes of chicken wings, thighs and breasts to Japan, which are expected to arrive in Tokyo in 10 days.

The company has signed a long-term contract with the Japanese side in which Japan will import about 300 tonnes of chicken products per month, said Director General of the firm James Hieu.

According to Hieu, Japan imports over 900,000 tonnes of poultry products annually. In fact, Koyu & Unitek falls short of its Japanese partner’s real demand which exceeds 2,000 tonnes per month. 

The firm plans to increase capacity in the future by enhancing cooperation with farmers to raise chickens and expanding processing facilities.

Cashew exports in eight months fetch 2.2 billion USD

Cashew exports fetched 2.2 billion USD in the first eight months of 2017, a rise of 24.9 percent from the same period last year, according to the Ministry of Agriculture and Rural Development.

The sum was earned from 223,000 tonnes of cashew, a drop of 1.1 percent year on year.

Average cashew price in the first eight months of this year was estimated at 9,865.4 USD per tonne, up 27.2 percent over the same period last year and 20.3 percent compared to the average price of 2016.

The ministry reported that in August, about 35,000 tonnes of cashew was shipped abroad for 351 million USD.

The US, the Netherlands and China continued to be the leading markets of Vietnamese cashew, which consumed 36.7 percent, 15.6 percent and 11.7 percent of the country’s total export volume, respectively.

The highest growth was recorded in the Russian market at 67.1 percent, followed by the Netherlands with 44.9 percent, the US, 38.2 percent, Israel, 30 percent and the US, 22.1 percent, added the ministry.

Ninh Binh province looks to nearly double tourism revenue

Tourism will become a key economic sector of the northern province of Ninh Binh by 2025, local officials said at a tourism conference held in Ho Chi Minh City on September 8.

Pham Duy Phong, director of the Ninh Binh Tourism Promotion Information Centre, made remarks at the conference, jointly held by the Vietnam Tourism Association, Ninh Binh Tourism Promotion Information Centre and HCM City’s Tourism Association.

Speaking of the tourism targets, Phong said that last year the province welcomed 6.5 million visitors, earning revenue of over 1.7 trillion VND (75 million USD). The province aims to receive 6.7 million visitors this year and 7.6 million visitors by 2020, reaching revenue of 3 trillion VND (132 million USD).

Ninh Binh province is an increasing favourite destination for many tourists in Vietnam. It is land of renowned landscapes, historical relics, traditional trade villages, and varied cuisine. One particularly notable site is the Trang An Scenic Landscape Complex, a UNESCO-recognised World Heritage Site in Vietnam. But the tourism industry in the province wants more help from local officials.

The conference heard many opinions about the challenges facing Ninh Binh province’s tourism industry. Representatives of many travel agencies, for example, complained about high prices for goods and services.

They suggested Ninh Binh tourism industry leaders pay more attention to developing souvenirs, diversifying local specialties to meet visitors’ different tastes and seeking effective solutions to the issue of overcharging.

According to Nguyen Quy Phuong, head of the travel industry department under the Vietnam National Administration of Tourism, the provincial sector should be concerned about promoting itself to the international market. He also suggested the province invest in its infrastructure and human resources to develop tourism sustainably.

Bui Thanh Dong, the general director of Ninh Binh province’s Department of Tourism, said that the province is diversifying souvenirs by researching and introducing new ones, such as duplicates of Thai Binh Hung Bao coins, the first coin in Vietnam. He added that the sector will co-operate with related industries to enhance the tourism services of the province and offer favourable conditions to travel agencies.

Vietjet signs deal with HCM City Tourism Dept

Budget carrier Vietjet Air has secured a cooperation pact with the Ho Chi Minh City Tourism Department in the framework of the city’s 13th International Travel Expo (ITE HCMC).

Under the deal signed on September 8, the two sides will work together to promote HCM City’s tourist destinations, and develop joint tourism products. They will also cooperate to attract visitors from key markets and exploring new ones.

Also at the ITE HCMC, Vietjet has been honoured as “Best Low Cost Carrier” by the municipal Tourism Department.

Boasting a fleet of 45 aircraft, including A320s and A321s, the airline runs 350 flights each day and has to date carried nearly 40 million passengers. 

It has already opened 73 routes in Vietnam and across the region to international destinations such as Thailand, Singapore, the Republic of Korea, Taiwan (China), Hong Kong, mainland China, Malaysia, Myanmar and Cambodia.

Conferences to encourage farmers’ entrepreneurship

Two conferences are going to take place in Hanoi in mid-September with a view to encouraging farmers’ entrepreneurship and honouring exemplary farmers.

Chairman of the Vietnam Farmers’ Union Lai Xuan Mon said at a press conference on September 8 that the farmers’ startup conference will be held on September 18 in response to the national startup movement. It aims to assist agriculture startups and encourage farmers’ creativity in production and business activities.

As part of the conference, a seminar will focus on solutions to help farmers do business. Experts and farmers representing some startup models will discuss farming models with hi-tech application, agri-tourism, poly-culture production according to production chains, and product processing and consumption models.

Participants will analyse and suggest development opportunities, difficulties and solutions, he noted, adding that some outstanding farmers will also share their success stories.

Meanwhile, a conference reviewing farmers’ production and business emulation movement from 2012 to 2017 is about to be organised on September 19. It will gather 300 delegates who are excellent farmers representing millions of farmers nationwide.

Mon said in 2016, more than 3.55 million farming households were recognised as excellent. About 27,000 of them gained over 1 billion VND (44,000 USD) in income. These excellent farming households have provided jobs for more than 11 million people.

Dong Ky, village of startups

Dong Ky, also known as Coi village, is located in Tu Son town, Bac Ninh province, and is famous for traditional fine arts products.

Dong Ky’s wood furniture is popular in Vietnam and abroad. To expand production and boost exports, the Dong Ky Fine Arts Product Association has developed a project called “Village of startups” to connect local businesses.

Dong Ky people are wealthier thanks to hand crafting fine arts products. Its most prosperous period was from 1988 to 2012. Now, however, it is being hampered by its old way of doing business. 

The village’s companies and household producers do not coordinate with each other to create a collective strength. Consequently, economic efficiency is low and international integration has made this a serious problem.

Recently the Dong Ky Fine Arts Product Association undertook a project called “Village of startups” to connect local businesses and help them operate more efficiently. 

Dong Ky plans to develop a 50-ha craft cluster in Tu Son town and reduce its dependence on the Chinese market.

Vu Quoc Vuong, President of the Dong Ky Fine Arts Product Association, said, “Dong Ky’s startup project is expected to create a breakthrough for the village. The project will create a much bigger workshop space to allow villagers to expand production for exports."

"Because it is far from residential areas, it will reduce pollution and improve the environment as it supports social security and generates jobs. Once established, the craft cluster will have a separate area for artisans to demonstrate their talents and wood villages to exchange with each other,” he said.

Last year Dong Ky earned about 40 million dollars from furniture exports, one fourth of which came from the Chinese market.

Vu Thi Mai, Director General of the Huong Mai Furniture Company, one of Dong Ky’s leading exporters, said, “The wood sector has undergone many ups and downs. We have grown like this because we love the craft. We have invested in the production of high quality products with Vietnamese cultural features. We intend to export to Japan, the Republic of Korea, and China’s Taiwan.”

Dong Ky has more than 2,000 enterprises and household producers involved in the furniture trade.

Artisan Vu Ngoc Nam, Deputy President of the Dong Ky Fine Arts Product Association, said, “In recent years Dong Ky has sold many of its products to China. The village now specializes in tables, chairs, beds, and cupboards. We have many artisans and skilled workers. We hope the project will be realized soon.”

Vietnam’s 2017 rice production estimated at 44.1 million tonnes

Vietnam expects to produce 44.1 million tonnes of rice in 2017, according to the Department of Cultivation under the Ministry of Agriculture and Rural Development (MARD).

Unfavourable weather conditions shrank winter-spring rice yield by 300,000 tonnes. However, southern localities are estimated to enjoy a surge in rice production of 400,000 tonnes. They have already harvested 1.08 million hectares of rice, or 56.2%.

The Cultivation Department said that rice fields in the north are developing well while the rice output of the autumn-winter crop in the Mekong Delta region is forecast to increase by 250,000-300,000 tonnes from the same crop last year.

Diseases on rice coupled with impacts of downpours in the north and floods in the south cause great concern to the agricultural sector. Thus, the sector needs to draw up measures to ensure safety for rice production.

Aquaculture conference and fair set for Oct.6-8 in Hanoi

The Directorate of Fisheries announced at a press conference today (September 8) that an aquaculture conference and fair has been set for October 6-8 in the capital city of Hanoi.

This is a premier event that brings together a unique mix of experts including scientists, researchers and decision makers both from academia and industry to exchange their knowledge, experience and research innovations, said Tran Dinh Luan, deputy director general of the Directorate, at the presser.

Aquaculture is a major segment of the Vietnam economy and is universally understood as the farming of aquatic organisms including fish and shellfish such as molluscs, crustaceans as well as marine plants.

Farming implies some form of intervention in the rearing process to enhance production, he added.

This aquaculture conference will cover new research techniques and concentrate on the exhibition of new feeds, fish welfare, antibiotics, and instruments introduced by the aquaculture fisheries laboratories.

In addition, the conference will hold special workshops aimed at advertising and marketing farm raised pangasius, which is most commonly referred to by the western world as catfish, in the northern region of Vietnam.

At the presser, Dao Van Ho, director of the Vietnam Trade Promotion Centre for Agriculture, noted that pangasius catfish is a relatively new product in northern Vietnam with a low sales volume.

The workshops will concentrate on novel approaches to market the new fish in the northern region as part of an effort to boost both sales and earnings and gain the confidence of consumers that the pangasius catfish is safe to eat.

VEB and IIB to finance Long Phu 1 power plant

Vnesheconombank, International Investment Bank, and PetroVietnam have entered into a tripartite memorandum determining the cooperation framework of financing the construction of Long Phu 1 power plant in Vietnam, according to International Investment Bank’s press release dated September 8. 

Russia-based Bank for Development and Foreign Economic Affairs—Vnesheconombank (VEB), one of Russia’s largest financial institutions—together with International Investment Bank (IIB), whose member countries include Vietnam, and the Vietnamese oil and gas group signed the memorandum in Ho Chi Minh City during the 20th meeting of the Inter-Governmental Russian-Vietnamese Commission for Trade-Economic and Scientific-Technical Cooperation.

Daniil Algulyan, VEB’s senior vice president and head of International Business, Export and Financial Institutions, Nikolay Kosov, chairman of the IIB Board, and Nguyen Quynh Lam, PetroVietnam vice president, signed the document, agreeing that VEB and IIB will finance the equipment supply for the project.

In particular, the banks will provide loans for the purchase of Russian high-tech industrial products and for the provision of associated works and services. The relevant decision was taken by the management bodies of VEB and approved by IIB.

“In accordance with VEB’s new strategy, VEB is prepared to provide comprehensive financial, guarantee, and insurance support for the projects and commercial transactions aimed at expanding the supply of high-tech products to foreign markets. The memorandum marked an important step towards promoting Russian industrial products to Asian markets and created the necessary conditions for development of the partnership between Russian exporters and importers from Southeast Asia,” said Algulyan.

“The memorandum is a testament to our joint efforts in supporting Russian exports and the energy sector of Vietnam, one of IIB’s shareholders. The bank’s Credit Committee approved lending to Long Phu 1 project, which is aimed at strengthening Vietnam’s energy independence and has a strong integration component. Equipment for the power plant will be supplied from the following three member countries: Russia, Vietnam, and the Czech Republic,” said Kosov. 

Aircraft building, railroad rolling stock manufacturing, car manufacturing, power engineering, agribusiness and agricultural machine building, nuclear energy, and innovation are VEB’s sectorial priorities in supporting the export of high-value-added products.

The construction will be carried out by an international consortium headed by PJSC Power Machines. On June 2, 2017, during the Saint Petersburg International Economic Forum, VEB and Power Machines signed an agreement to facilitate power equipment exports. 

Samsung explores new horizons in Vietnam

Along with investing $17 billion in high-tech complexes in Thai Nguyen and Bac Ninh provinces, Samsung plans to encroach on other sectors in Vietnam.

Along with the launching of Galaxy Note 8, the newest Samsung smartphone model, on September 13 in Ho Chi Minh City, the Korean giant will also launch Samsung Pay, its mobile payment service, soon.

This is not the first time that Samsung mentions launching Samsung Pay. Last year, when the company launched the Galaxy S7 and S7 Edge in Vietnam, Kim Kyung-dong, director of Samsung Pay, said that Vietnam was considered a potential market for Samsung Pay and expected to convert the country’s majority of consumers to electronic payments.

At the time, Samsung Pay was expected to launch in Vietnam in 2016, however, to date, the company completed the entire procedures for launching Samsung Pay in Vietnam.

According to unofficial information, numerous domestic banks, including Vietcombank, VietinBank and BIDV, and even foreign banks like Shinhanbank and Citi Bank will support Samsung Pay to extend its network in Vietnam.

Several days ago, according to newswire Business Korea, Samsung Securities announced a cooperation deal with Caldera Pacific, a Hong Kong-based private equity fund, to buy a 40 per cent stake in Dragon Capital and become its second-largest shareholder.

According to the deal, Samsung Securities will hold 10 per cent and Caldera Pacific 30 per cent.

The deal aims to accelerate Samsung’s inroads into the Vietnamese stock market to keep up with competing compatriots who are already present in Vietnam’s numerous sectors. 

Market experts forecast that acquiring a stake in Dragon Capital is the beginning of Samsung Securities’ strategy to enter the Vietnamese stock market and the company may additionally acquire stakes in other companies.

In March 2016, Samsung was granted the investment certificate for a large-scale research and development centre in Hanoi’s Hoang Mai district.

This $300-million project, which would be Vietnam’s largest research and development (R&D) centre to date, also marks the first time a global tech giant has chosen Vietnam as an R&D hub.

Samsung planned to build a 21-storey building on a three-hectare land plot and employ 2,000 labourers in 2016 and eventually 4,000 in the upcoming years. The total capital volume of $300 million would be disbursed within four years, including $50 million in the 2016-2017 period, $150 million in 2018, and the remaining $100 million in 2019.

However, to date, there has been no move to implement the project.

Debate continues over definition of Uber & Grab

Uber and Grab are not types of taxis but are types of contract cars, Mr. Nguyen Duc Thanh, Director of the Vietnam Center for Economic and Policy Research (VEPR), told a workshop entitled “Urban Traffic Regulation Policy in the Digital Era” held by VEPR on September 8 in Hanoi.

The workshop focused on the emergence of many new socioeconomic phenomena in the context of new technologies evolving rapidly in the fourth industrial revolution (Industry 4.0), typically in the transport market.

In Vietnam’s major cities, there is a growing tendency in planning and policy to respond to these new phenomena. Specifically, there is a limitation on the number of electronic contract cars such as Uber and Grab to minimize traffic congestion and prevent disruption to the traditional taxi industry.

Therefore, according to Mr. Thanh, policy makers not clearly differentiating between traditional taxis and Uber and Grab will lead to confusion.

Mr. Do Hoai Nam, CEO and Co-Founder of UP-Co Working Space Vietnam, told the workshop that the government should have a policy of obliging traditional taxis to change technology instead of limiting the development of Uber and Grab. “According to studies, occupancy in Uber and Grab cars is over 75 per cent and 25 per cent in traditional taxis,” he added.

Economist Pham The Anh agreed that Uber and Grab are a test of the direction towards promoting science and technology in real life and in economic activities. “Policy makers need to make assessments from a variety of perspectives, such as consumers, service providers, and taxi companies, to come up with appropriate policies,” he said.

At the workshop, Dr. Dang Quang Vinh from the Central Institute for Economic Management (CIEM) proposed that the government eliminate some regulations and conditions and liberalize taxi transport, so that businesses can compete in an equal environment and ensure safety.

Uber and Grab have created competition in the market, with a number of traditional taxi companies renewing their technology and curbing fare rises. “Therefore, authorities should carefully assess the effectiveness of Uber and Grab and choose the best policy options in the context of extensive integration,” Dr. Vinh said.

VinaLand makes tender offer and divests from Vina Square

VinaLand Limited, the AIM-quoted investment vehicle established to target strategic segments within Vietnam’s emerging real estate market, has announced it will conduct a distribution of up to $60 million to shareholders through a tender offer to purchase ordinary shares in the company for $0.01 each.

The offer is for all shareholders on the register at 6pm UK time on September 15, at a fixed price of $0.83 per ordinary share. Shareholders can either elect to accept or decline participation in the tender offer. Consequently, the company intends to repurchase, in aggregate, such number of ordinary shares at the tender price as is equal to $60 million.

Accordingly, if shareholders in aggregate tender ordinary shares more than the tender value cap, elections will be scaled back to the tender value cap. To the extent that not all shareholders elect to participate in the tender offer, the company will be able to acquire from tendering shareholders additional ordinary shares up to the tender value cap.

All ordinary shares repurchased by the company pursuant to the tender offer will be cancelled.

Furthermore, the company has announced that it is divesting its stake in the Vina Square project, located in Ho Chi Minh City. The project consists of a total land area of approximately 3 ha and was acquired by VinaLand in 2007, at which time the land was designated as a future development site. VinaLand is divesting its entire stake in the project to Vietnam’s Tri Duc Real Estate Company for net cash proceeds of approximately $41.2 million, which includes the repayment of shareholder loans, resulting in an IRR of 3.3 per cent to the company. The total valuation is recorded at 0.3 per cent above the June 30, 2017 unaudited net asset value and 13.5 per cent above the unaudited net asset value at the time of VinaLand’s extra-ordinary meeting in November 2016. Both figures include adjustments for additional investments up to the date of exit. At the time of the announcement, $41 million, or 99.5 per cent, of the net proceeds have been received by the company. It is expected that all proceeds will be received by the company by the end of this month. 

“This tender offer follows the announcement of the Vina Square disposal, for which all proceeds will be received in September, enabling further distributions to shareholders during October 2017,” said Managing Director Mr. David Blackhall. “This divestment is in accordance with the current stated policy to divest projects in a controlled and orderly manner, and steady progress has been made with further pipeline disposals. The proceeds received from this disposal will, in conjunction with collections from earlier disposals including prepayment advances for future pipeline disposals, be used to cover VinaLand’s commitments, including operating costs, capital contributions, and further distributions to shareholders.”

OMA Emirates set to enter Vietnam

OMA Emirates, one of the UAE’s leading payments solutions providers, gained ground in its expansion plans with its attendance at Seamless Vietnam 2017, which was held in Ho Chi Minh City a few days ago.

The company showcased its homegrown solutions and service developments for the banking and retail domains, which include loyalty platforms and solutions, ATM optimization, and card personalization.

For the first time since the launch of its “Omega - A Closed Loop Platform”, visitors to the exhibition were be able to witness the new solution. Developed to support customers who are connected to the OMA Emirates network, the platform will enable them be a part of the loyalty program or pre-paid cards.

“We have been very successful with our global expansion plans over the last two years and our participation at Seamless Vietnam further strengthens our goals,” said Mr. Niranj Sangal, CEO of OMA Emirates Group. “Simultaneously, OMA Emirates has developed several new products in keeping with market trends and needs and we are now positioned to explore new markets with our entire range of solutions and services for the banking and retail sectors. We look forward to interacting with all our potential customers and have put into motion a chain of activities to connect and communicate with them.”

On the banking front, OMA Emirates demonstrated its NanoSwitch ATM, which is a secure online solution for ATM transactions. The robust solution enables the optimization of ATM management by providing transaction routing, authorization hosts, and settlement and management reports. The solution complies with strict EMV standards and is certified by major payment schemes including Visa and Mastercard.

The retail sector solutions showcased at Seamless Vietnam included the company’s B2B2C loyalty program under the brand name “Benefit Beyond”, a common branded card capable of hosting multiple loyalty programs.

Another solution accepted by the retail industry and also demonstrated is the OMA Retail Suite. The solution is a technology platform that lays the foundation for a network of retailers and consumers who can benefit from a robust low-cost loyalty program. An intranet management portal that is a fully automated ERP, it is a highly scalable system that is convenient for both large as well as smaller outlets.

The Middle East-based OMA Emirates Group is a provider to the payments industry, with cutting-edge technology solutions for card personalization, payment issuance, and payment acquiring systems through a global delivery platform.

The company aims to help businesses achieve the highest levels of efficiency by drawing on its extensive research and experience with a large profile of high-performance businesses. OMA Emirates Group, together with its strategic world class technology partners, designs and delivers a seamless customer experience. The company now has a presence in Eastern Europe, Africa, and APAC.

Caution needed as Vietnam mulls over property tax

Although Vietnam already has a set of taxes on land, it has yet to impose a property tax like many other countries. The Ministry of Finance is looking to raise the government’s income by levying a property tax rate that fits in with Vietnam’s current situation.

Statistics show that Vietnam’s per capita income has been rising rapidly, from US$1,400 in 2013 to US$2,200 in 2016, and is projected to reach US$3,400 by 2020. The rise in income is also coupled with an increase in property ownership. Meanwhile, land tax revenues only account for a minimal 0.03% of the GDP and just 0.15% of the total government income. That is why the Ministry of Finance (MOF) is considering taxing individuals who own a second house or more.

According to the MOF, the property tax will not only help to increase government revenues, redistribute personal wealth and improve social equality but will also help to build a system of taxes in line with international practices, whilst stabilising the property market, restricting speculation and increasing the efficiency in using properties.

However careful preparations are needed before the property tax law is officially enacted as this type of tax is not easy to collect and it is also often difficult to determine the ownership of the second houses for a number of reasons.

Firstly, a clear definition of the properties on which the tax is to be levied has yet to be provided. Moreover, the collection of the property tax can be easily nullified by legal loopholes if there are no transparent regulations on the age of owners and house registration in other people’s names.

Secondly, Vietnam is levying the land use tax and considers the land use rights as a type of personal and corporate property. If the definitions are not established clearly, it could lead to conflict or overlapping taxes. A house worth a few thousand dollars cannot be equated with a villa worth millions of dollars. The government also cannot levy tax on the second and more houses whose total value is even less than another one which is outside the taxation scope.

Thirdly, it is necessary to develop convincing arguments in order to reach a strong public consensus on how properties should be taxed and the sanctions on those who fail to report their large assets or own homes abroad.

In addition, it should be anticipated that collecting the property tax could easily present a chance for corruption as the taxpayers and tax collectors could collude with each other to avoid paying taxes.

If the scope of taxation excludes low-value houses and solely covers high-value houses, it could give new impetus for increasing investment in and ownership of affordable houses which are currently in short demand.

However, the property tax on the second houses is new and highly significant therefore it requires a roadmap which is large enough for adequate consideration and the law-making process should take into account thorough research, international experience and public feedback.

In addition, in order to allay any concerns that the property tax could become a burden on enterprises and homebuyers, reform is needed in the collection of land use fees and the property tax must not be levied on houses with low value, such as those below VND1 billion (US$44,000) and households with many houses whose total value is below the average threshold.

Furthermore, the tax rates should follow different brackets and be appropriate with local conditions. At the same time, other measures are needed to prevent house speculation and to stabilise the property market.

Under any circumstances, the establishment of a national information system on property transactions and property owners is necessary to ensure both efficient state management on properties and successful property tax collection.

PVN’s loss-making ethanol projects show signs of revival

Vietnam Oil and Gas Group’s (PVN) loss-making ethanol projects will be able to return to life, helped by the Government’s decision to withdraw A92 petrol from the market to boost still-poor sales of E5 bio-gasoline.

From next year on, only E5, which is a mixture of A92 gasoline and 5% ethanol, and A95 gasoline will be available on the market.

PVN general director Nguyen Vu Truong Son said the withdrawal of A92 from the market had paved the way for PVN to restart its debt-laden ethanol projects.

PVN has reviewed its loss-making projects, including the polyester fiber and ethanol facilities which have been put on hold for years. Son said some partners of PVN’s had shown interest in acquiring stakes at several projects so that they could resume production from early next year.

Three investors – Tin Thanh Industrial Electricity and Steam Co Ltd, Tung Lam Co Ltd and Sundries Investment and Trading JSC (Tocontap) – have expressed interest in the Dung Quat ethanol plant of PetroVietnam Central Bio-fuels JSC (BSR-BF).

BSR-BF has signed a contract with a consulting company to evaluate the project and prepare a divestment plan as well as select investors in September and finalize a production resumption plan before divestment.

For Binh Phuoc ethanol project, a team comprising representatives of PVN and PetroVietnam Oil Corporation (PVOil) has worked with project investor Orient Bio-Fuels Co Ltd (OBF) and its shareholders Thailand’s Toyo Engineering Corporation and Licogi 16 Company (LCG) to discuss plans to revive the project.

PVOil has worked with OBF and Tung Lam Co Ltd to find solutions to production cost cuts and productivity improvement in the project. Among the ethanol projects in the nation, just two projects of Tung Lam Co Ltd have been performing well, so PVN will ask the company for advice.

At a meeting on August 24, 2017, Toyo and Licogi 16 said they would complete necessary procedures to inject more capital into the project.

PVOil and shareholders will have to secure about VND91 billion (US$4 million) to put the project back into operation next year and work with suppliers to ensure sufficient input material.

Two investors – Thai Son Investment JSC and Mepcom Offshore and Marine Pte Ltd – are eyeing the Phu Tho ethanol project developed by PetroVietnam Bio-ethanol Company (PVB). Mepcom Offshore and Marine Pte Ltd has proposed acquiring shares of PVB’s shareholders and develop the project in the build-own-operate (BOO) format.

As for the Dinh Vu polyester fiber plant, Vietnam Textile and Garment Group (Vinatex) has promised to purchase all the plant’s output in 2018. PVN will work with domestic and foreign partners to finalize investment and restructuring options for the project by the end of this year.

According to the ministry, there will be no other choice but to dissolve the Dung Quat shipbuilding project.

Global leading brands gather at Thai agricultural fair

More than 300 brands from all over the world took part in the SIMA ASEAN Thailand 2017, which is ASEAN’s largest all-in-one platform for agribusiness focusing on the machinery innovations to reach the Agriculture 4.0 era.

The fair, which closed Saturday, was jointly organized by IMPACT Exhibition Management Co Ltd, COMEXPOSIUM and Union des Industriels de I’Agroeqyuipment from France, Thailand’s Ministry of Agriculture and Cooperatives, and Kasetsart University.

“We are aware of its significance in driving Thailand to the Agriculture 4.0 era,” said Dr. Suwit Chaikiattiyos, general director of the Department of Agriculture under the Ministry of Agriculture and Cooperatives.

“We hope that this event will be the platform to exchange ideas and the latest technology that lead to the rapid industry development, an increase of leverage negotiation for farmers, and a higher capability of the Thai agribusiness industry in the highly competitive international market,” he said.

In addition, the event helped promote and strengthen Thailand’s agriculture by giving Thai exhibitors the opportunity to showcase their potential, as well as learn more about practical agricultural innovations and technology from international exhibitors. It also aimed to educate Thai farmers how to increase their productivity and raise the bar for agricultural produce to meet international standards.

Loy Joon How, general manager of IMPACT Exhibition Management Co Ltd, said SIMA ASEAN Thailand 2017 was a brilliant opportunity for Thailand to become the main agribusiness hub in the region. More than 300 brands from all over the world are exhibiting their products and services at the event.

This year’s highlight was the demonstration area located by IMPACT lakeside, where agricultural machinery is on display. Experts were present to share their knowledge and there will also be a drone pavilion and workshops that are geared towards the Agriculture 4.0 era.

Jean-Hugues Barsot, key account manager of SIMA – SITEVI at COMEXPOSIUM, said SIMA was an international agricultural exhibition where innovations, latest technology and machinery for the agricultural sector are featured. It also served as a meeting point for traders, buyers, importers, operators, farmers, experts and professionals in agribusiness.

At the SIMA Paris event this year, there were 232,000 visitors from across the world, and over 1,700 exhibitors from 42 countries and territories, building a stronger brand for SIMA.

“We organize events in Europe, South Africa and Asia. With this third edition, SIMA ASEAN can now be considered as a deeply-rooted exhibition. This show confirms its status as the leading agricultural trade show in Southeast Asia,” Barsot said.

The third edition of SIMA ASEAN Thailand 2017 was expected to attract 15% more visitors than the previous year and generate more than one billion bath in revenues. The second edition last year attracted more than 13,000 trade visitors from 40 countries and territories such as Australia, Canada, China, France, Germany, India, Indonesia, Italy, Japan and Vietnam.

HCMC to build more exhibition and convention centers

HCMC will have more sites to organize big conferences and exhibitions, thus promoting the development of meeting, incentive, conference and exhibition (MICE) tourism.

Bui Ta Hoang Vu, director of the HCMC Department of Tourism, said work on a 14-hectare international exhibition and convention center would commence in Thu Thiem New Urban Area next year. It is expected to be up and running in 2020.

Some other major projects are being developed in Can Gio and Cu Chi districts. And more high-end hotels will be built in the city to meet the demand of MICE guests.

Vu told the Daily on the sidelines of the “HCMC – a new destination for MICE tourism in Southeast Asia” seminar on September 6 that enterprises should also do the marketing and devise attractive products for guests.

According to the Department of Tourism, the first half of 2017 saw  more than 2.7 million foreign tourists coming to the city, up 14% year-on-year. The city currently has over 2,100 hotels with a total of 50,300 rooms, including 1,900 hotels of  one to five stars with 48,700 rooms.

The department cited statistics of McKinsey, a U.S consulting company, as saying that 17% of tourists come to HCMC for work, above the region’s average of 14-15%.

With a lot of traffic infrastructure and service development projects, the city expects MICE tourism to grow strongly in the coming time. However, many enterprises have complained about the shortage of large exhibition and convention space while the Saigon Exhibition and Convention Center (SECC) is often full all year round.

Thuong My An, general director of Saigon Exhibition and Convention Joint Venture Co Ltd, said 53 events were organized at the center last year. The center will be expanded with an additional 10,000-square-meter area to accommodate exhibitions with 1,000 booths instead of the current 500.

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