BUSINESS IN BRIEF 17/6

Vietnam attends tyre exposition in India

Vietnamese-based Da Nang Rubber Company (DRC) is showcasing its made-in-Vietnam products at the Tyrexpo India 2016, which is being held in New Delhi between June 14 and 16.

The fair gathers together nearly 100 businesses from India, the United Arab Emirates, the UK, Thailand, Indonesia, China and Vietnam.

DRC is the only company in Vietnam to have acquired an ISI certification mark for industrial products that conform to the Indian Standard. Only ISI products are allowed to enter the Indian market.

Products by DRC are available across 63 provinces and cities in Vietnam and 35 countries worldwide.

Vietnam hopes to expand economic ties with RoK: Deputy PM

Deputy Prime Minister Vuong Dinh Hue has affirmed Vietnam’s wish to further elevate its comprehensive economic partnership with the Republic of Korea (RoK), during a roundtable on business cooperation between the two countries in Hanoi on June 15.

He called on RoK businesses to invest more in areas like the manufacturing industry, electronics, automobiles, finance &banking, high quality services, creative products development and infrastructure, as well as startup projects.

The Deputy PM expressed his hope that giant RoK corporations’ investment will encourage small and medium-sized enterprises, as well as high technology firms from the country to do more businesses in Vietnam .

Deputy PM Hue noted that the two countries are experiencing a peak development in their relationship in all fields, with the RoK being the second largest ODA provider of Vietnam .

Since 2014, the RoK has always been the largest foreign investor in Vietnam with a total investment of over 49 billion USD in 5,300 projects, he said.

In the first five months of this year, the RoK was also the largest investor at 3.4 billion USD in 420 projects.

This shows the confidence of the RoK’s business in Vietnam’s economic prospects, he commented.

At the same time, the RoK is the third largest trade partner of Vietnam, with two-way trade reaching 36.5 billion USD last year, he added.

Deputy PM Hue also pointed out that the Vietnam-RoK free trade agreement and the ASEAN-RoK free trade deal have laid the foundation for bilateral trade and investment ties in a win-win spirit.

Deputy PM Hue said he believes that two-way trade will reach 70 billion USD in 2020 in a balanced direction. Vietnam wants to export more seafood, fruit, consumer goods, electronic products and accessories to the RoK, he said.

Together with efforts to complete its legal system, the Vietnamese Government is working hard to stabilise the macroeconomy and restructure the economy with the focus on State-owned enterprises and banking reform, alongside settling bad debts and public debts; thus creating a new status for the country to integrate into the world community and join regional and global production chains, stated the Deputy PM.

The RoK’s Ambassador to Vietnam Lee Hyuk held that specific efforts should be made to seek ways to further boost bilateral ties, suggesting that a cooperation axis should be created across politics, diplomacy and security to match the sound bilateral economic ties.

He proposed that the two countries focus on partnerships in the manufacturing industry, infrastructure and information and telecommunication technology, health care, and science and technology.

Meanwhile, Kang Seong Cheon, a representative from the RoK’s Ministry of Trade, Industry and Energy, said that it is necessary to expand investment affiliation activities to fully tap the advantages from free trade agreements, while continuing to create favourable business investment opportunities for enterprises from both countries.

Seminar discusses development of private sector

Business players and experts discussed ways to develop the private sector towards realising the country’s goal of becoming a modern industrialized country by 2035 during a seminar held in the central city of Da Nang on June 15.

To achieve the goal, the Vietnamese government and the World Bank drafted the Vietnam Report 2035 last July, which recommended six key transformations that Vietnam should make to reach upper-middle income status, including enabling economic modernisation with a productive and globally competitive private sector.

Economist Pham Chi Lan, in her speech, urged for a favourable environment to enhance the private sector’s competitiveness and productivity, comprehensive reform of State-owned enterprises, market-oriented agricultural reform, tapping external trade opportunities, and joining global value chains.

General Secretary of the Vietnam Chamber of Commerce and Industry (VCCI) Pham Thi Thu Hang pointed out low productivity and the weakness of the private sector as hindrances to Vietnam’s economic growth. She said the weakness partly has its root in limited institutions, which once improved will create more development space for businesses, particularly those in the private sector.

Tran Thi Lan Huong from the World Bank suggested laying a legal framework for the people to exercise their basic rights and create mechanisms to ensure state agencies’ transparency and accountability to the public.

The seminar was co-hosted by the VCCI and the WB.

Int’l fairs to connect support industry firms

An agreement to hold international fairs and business connectivity programmes for Vietnam’s support industry was signed in Ho Chi Minh City on June 15.

Signatories were the Ho Chi Minh City Investment and Trade Promotion Centre, the Japan External Trade Organisation (JETRO) and the Reed Tradex company of Thailand.

Isara Burintramart, Reed Tradex Executive Director, said Vietnam is a destination attractive to foreign investors with more than 16,300 valid foreign-invested projects worth 238 billion USD.

JETRO Chief Representative in Ho Chi Minh City Hirokata Yasuzumi called for raising domestic supply, adding that JETRO will give priority to new exhibitors who are yet to join any support industry’s business alliance fairs, not only those from Ho Chi Minh City but also adjacent provinces.

Apart from firms in Vietnam, those from ASEAN and Japan are expected to join fairs as buyers, including the International Machine Tools & Metalworking Solution Show (Metalex Vietnam), the Business Alliance for Supporting Industry exhibition, Vietnam’s Only Exhibition on SMT, (Testing Technologies, Equipment, and Supporting Industries for Electronics Manufacturing) – Nepcon Vietnam, Industrial Components and Subcontracting Vietnam (ICSV) slated for October 6-8 at the Saigon Exhibition & Convention Centre.

The exhibitions and fairs are also expected to boost ties between the ten ASEAN member states and China, India, Japan, the Republic of Korea, New Zealand and Australia.

Romania looks to invest in transport infrastructure in HCM City

Romanian businesses want to invest in Ho Chi Minh City, particularly in transport infrastructure and urban development, said Vlad Vasiliu, Romanian State Secretary of the Ministry of Economy, Trade and Business Environment.

He made the statement when leading a senior delegation to meet with Tran Vinh Tuyen, Vice Chairman of the HCM City People’s Committee, in the southern city on June 15.

The State Secretary said he highly values the role that the southern hub plays in the relations between Vietnam and Romania.

He noted that the two countries’ traditional relationship is progressing, laying the foundations for bilateral trade partnerships.

Room for further engagement remains extensive in the future, he said.

For his part, Tuyen welcomed the visiting Romanian delegates, who are in Vietnam to attend a session of the Vietnam-Romania intergovernmental committee.

He said the delegation gathers representatives from ministries and leading companies in trade, agriculture, telecommunication and energy, which also are sectors within which HCM City is calling for investment.

He said cooperation between Romania and HCM City still falls short of its potential, adding that the city is willing to create favourable conditions for Romanian investors.

More Vietnamese catfish exporters qualify for US market

Another 12 Vietnamese catfish exporters are now eligible to ship their products to the US, pushing the total number of eligible firms to 57.

The National Agro-Forestry-Fisheries Quality Assurance Department said there are four more firms on the waiting list, and the agency would work with the US Department of Agriculture’s Food Safety and Inspection Service to speed up the verification process.

The US is the biggest import market for Vietnamese Tra fish with a stable demand and good prices.

As of May 15, Vietnam shipped 130 million USD worth of Tra fish to the US, up 7.6 percent compared to the same period last year.

The export volume is expected to see a year-on-year increase of between 10 and 15 percent in the next quarter.-

ADB to provide more trade finance support in Vietnam

The Asian Development Bank (ADB) and the Orient Commercial Joint Stock Bank (OCB) on June 15 signed an agreement under which the ODB will join the ADB’s Trade Finance Programme (TFP).

Accordingly, the TFP will provide guarantees of up to 20 million USD a year to support trade in Vietnam.

The participation of the OCB means the TFP now has 12 bank partner in Vietnam.

Under this agreement, ADB and OCB will support exporting and importing companies, including small- and medium-sized enterprises (SMEs), said Steven Beck, Head of Trade Finance at ADB.

In the past few years, Vietnam has consistently been one of the top five most active among the 20 developing markets where the TFP operates.

To date, the programme has conducted 4,479 transactions, supporting over 6.9 billion USD in trade in Vietnam. Of these, roughly 75 percent were for trade financing for SMEs.

Along with providing loans and guarantees in Vietnam, the TFP will conduct workshops and seminars to increase knowledge and expertise on trade finance which should result in more support to exporting and importing companies.

Since 2009, the TFP has supported more than 8,000 SMEs across the region, with about 11,500 transactions valued at over 23.2 billion USD, in sectors ranging from commodities and capital goods, to medical supplies and consumer goods.

Vietjet welcomes 40th aircraft

Vietjet’s brand-new A320 aircraft, coded VN-A675 arrived at Tan Son Nhat International Airport on June 15 after flying from Toulouse, France.

This is Vietjet’s 18th aircraft under an agreement signed between the low cost carrier and the European aircraft maker Airbus on acquiring and leasing 100 aircrafts.

Previously, Vietjet received a new A320 aircraft coded VN-A676 from Toulouse and an A321 aircraft coded VN-A673 from Hamburg, Germany.

With this addition to its fleet, Vietjet now operates a fleet of 40 A320s and A321s to meet the increasing travel demands of passengers and has expanded its network domestically and internationally.

To welcome this event, Vietjet announced a three-day promotion providing 1 million super-saving tickets from only US$0. The promotion is available to online passengers who book tickets via www.vietjetair.com from 12:00 to 2:00 pm from June 14 to 16.

It applies to all domestic flights departing between August 10, 2016 and December 31, 2016 except national holidays.

Currently, Vietjet boasts a fleet of 40 aircraft, comprising A320s and A321s, and operates 250 flights each day. It has already opened 50 routes in Vietnam and across the region to international destinations. The airline has carried about 25 million passengers to date.

Successful integration needs stable economy, good social welfares

Fruitful economic stabilisation and restructuring along with ensured social welfares are the prerequisites for successful international economic integration, Deputy Prime Minister Vuong Dinh Hue has said.

At a seminar in Hanoi on June 15, he noted that international integration, which focuses on international economic integration, is a consistent and long-term policy of the Vietnamese Party and State.

With the ASEAN Economic Community already formed and 13 FTAs signed, Vietnam has free trade relations with 55 countries, including all G7 nations and 15 of the G20 countries.

Those FTAs, especially the Trans-Pacific Partnership (TPP) agreement and the EU-Vietnam FTA (EVFTA), are considered the agreements of the 21st century. They have opened up huge opportunities for Vietnam, particularly in trade and investment, Hue noted.

The Vietnamese Government will submit the TPP to the National Assembly for ratification in the next few months. It has reviewed the legal system and will overhaul existing regulations or issue new ones to realise integrational commitments and create the right conditions for successful integration.

The Deputy PM quoted Resolutions No. 19 and 35 as examples of the Cabinet’s efforts. While Resolution No. 19 aims to improve the business climate and national competitiveness, the Government has asked ministries and localities to robustly implement Resolution No. 35 on supporting Vietnamese businesses.

Vietnam hopes to have at least 1 million enterprises by 2020, almost doubling the current figure, he noted.

At the seminar, World Bank Regional Vice President for East Asia and the Pacific Victoria Kwakwa said integration into the region and the world has played a crucial role in Vietnam’s economic transition. The country has become an FDI magnet and a growing export economy.

Vietnam will remain attractive to foreign investment and continue to attain good growth rate thanks to strong exports. It now has a great chance to capitalise on benefits generated by the FTAs like the TPP and the EVFTA.

She added that the World Bank Group pledges to help Vietnam optimise the new-generation FTAs to achieve a high growth rate, create and share prosperity, and sustainably provide high-quality jobs for its young population.

At the event, participants discussed such issues as grasping opportunities and minimising risks from the TPP and the EVFTA, the road map for reforming trade-related laws, and the FTAs’ significance to local agriculture.

Hung Yen’s enterprises get updates on FTAs

Top officials and enterprises in northern Hung Yen province were provided with relevant information on the free trade agreements (FTAs) Vietnam has joined, in a conference on June 14.

The conference was organised by the Ministry of Industry and Trade and local authority. It also gave attendees an overview of Vietnam’s global economic integration as well as opportunities and challenges for Vietnam as a member of the Vietnam-EU FTA and the Trans-Pacific Partnership (TPP).

The trade deals will allow Vietnam to boost its Gross Domestic Products (GDP) by 23 billion USD in 2020 and over 33 billion USD in 2025 while the country also expects to add approximately 70 billion USD into its export revenue.

Vietnam is likely to be the biggest winner of the TPP as the reduced custom duties will trigger more exports of Vietnamese products, particularly garment & textile, footwear, seafood, farming and forestry products.

The pact is also pressuring the country to make institutional reforms, restructure its economy and draw more investment into knowledge-based industries.

Speaking at the event, Deputy Minister of Industry and Trade Tran Quoc Khanh said an increasingly integrated global economy presents many challenges for Vietnam.

He urged localities across the country to be more aware of the impacts of TPP and be prepared with economic restructuring plans in order to be more adaptive to the changes in business climate.

Local authorities need to provide information about TPP to more businesses while enterprises should also actively learn about the trade deal, especially in terms of tariffs, code of conduct and technical barriers to trade, Khanh added.

Hung Yen lies in the northern key economic region which encompasses the economic triangle Hanoi – Hai Phong – Quang Ninh, an advantage for the province to attract more investors.

Better access to information about the FTAs will motivate enterprises in the province to shift towards hi-tech sectors so that they can utilise the benefits of the pacts and reduce the negative impacts of global integration, he noted.

Supporting industries need Gov’t

Government incentives and support measures as well as promotions are necessary for the development of the supporting industry, according to the chief representative of the Japan External Trade Organistion’s (JETRO) HCM City office.

Speaking at a signing ceremony to co-organise four exhibitions related to the supporting industries in HCM City yesterday, Hirotaka Yasusumi said, “The Vietnamese Government’s ‘policy for supporting industries’ does not seem so effective.”

A decision issued at the end of last year related to the development of supporting industries does not seem to be working well, he said.

Most Vietnamese companies in supporting industries are small- or medium-sized and many lack funds to invest in modern technologies or human resource training, he said.

Since they do not know much about the policy or how to use it, it is not effective, he said.

According to a 2015 JETRO survey, the local sourcing ratio for Japanese companies in Viet Nam is 32 per cent, much lower compared to China, or Thailand, he said.

JETRO has organised many business-matching events, exhibitions and others to boost co-operation between Vietnamese and Japanese firms in supporting industries for more than 10 years, he said.

Four expos planned

Yesterday JETRO, the Investment and Trade Promotion Centre of HCM City (ITPC) and Reed Tradex Co, Ltd signed a contract to jointly organise four international supporting industry exhibitions, Metalex Vietnam, Industrial Components and Subcontracting Vietnam, Nepcon Vietnam and the Business Alliance for Support Industry in HCM City in early October.

Isara Burintramart, managing director of Thailand’s Reed Tradex Co, Ltd, said: “With more than 16,300 active FDI projects accounting for a total of US$238 billion, Viet Nam is the destination of choice for foreign investors.”

Reed Tradex Co will organise machine tools and metalworking solutions exhibition Metalex Vietnam, Industrial Components and Subcontracting Vietnam, and measurement and testing technologies for electronics manufacturing exhibition Nepcon Vietnam.

JETRO and ITPC will organise “the Business Alliance for Supporting Industry in HCM City expo”, where Japanese manufactures will display parts, equipment and supporting services and Vietnamese suppliers will display their components and equipment.

The simultaneous organisation of the four expos would enable transfer of new technologies and expansion of business networks that are vital to sharpening the competiveness edges of supporting industry, Burintramart said.

Nguyen Tuan, deputy director of ITPC, said supporting industries are in the early stage of development in HCM City and Viet Nam.

Demand for supporting industries’ products is high and the potential for development these industries is huge, he said.

The city is drafting development policies for supporting industries, especially in high-tech industries, he added.

Successful integration needs stable economy

Hue told a workshop on “Viet Nam’s participation in TPP and EVFTA: Seizing the Opportunities of New-Generation Free Trade Agreements” that international integration, which focusses on international economic integration, has been a consistent and long-term policy of the Vietnamese Party and State.

With the ASEAN Economic Community already formed and 13 FTAs signed, Viet Nam has free trade relations with 55 countries, including all G7 nations and 15 of the G20 countries.

Those FTAs, especially the Trans-Pacific Partnership (TPP) agreement and the EU- Viet Nam FTA (EVFTA), are considered the agreements of the 21st century. They have opened up huge opportunities for Viet Nam, particularly in trade and investment, he noted.

The Vietnamese government will submit the TPP to the National Assembly for ratification in the next few months. It has reviewed the legal system and will overhaul existing regulations or issue new ones to realise integrational commitments and create the right conditions for successful integration.

The Deputy PM quoted Resolutions No 19 and 35 as examples of the Cabinet’s efforts. While Resolution No 19 aims to improve the business climate and national competitiveness, the Government has asked ministries and localities to robustly implement Resolution No 35 on supporting Vietnamese businesses.

Viet Nam hopes to have at least 1 million enterprises by 2020, almost doubling the current figure, he added.

He said the Vietnamese Government is determined to build a transparent and clean government, maintain macro-economic stability and accelerate economic restructuring in order to better serve enterprises and the people. In return, businesses also have to pro-actively move ahead on the basis of renovation and creation.

World Bank Regional Vice President for East Asia and the Pacific Victoria Kwakwa said that integration into the region and the world has played a crucial role in Viet Nam’s economic transition. The country has become an FDI magnet and a growing export economy.

Viet Nam would remain attractive to foreign investment and continue to achieve a good growth rate thanks to strong exports. It now has a great chance to capitalise on benefits generated by the FTAs like the TPP and the EVFTA.

Not only containing traditional market access issues in regards to goods, trade services and investment, the two trade pacts also cover new areas, either not covered by or go much deeper than those signed on the framework of the World Trade Organisation, such as e-commerce, labour, environment, small- and medium-sized enterprises, State-owned enterprises and regulatory coherence, Kwakwa said.

She said these new-generation agreements are expected to generate considerable benefits for Viet Nam in terms of trade, investment, growth and job creation, but they are also accompanied by a number of big challenges and, without careful implementation of commitments, many of the benefits might pass the country by.

She added that the World Bank Group has pledged to help Viet Nam optimise the new-generation FTAs to achieve a high growth rate, create and share prosperity, and sustainably provide high-quality jobs for its young population.

At the workshop,  Deputy Minister of Industry and Trade Tran Quoc Khanh gave a briefing on the situation of Viet Nam’s TPP and EVFTA ratification as well as its plan to enforce the two agreements.

The participants discussed issues such as grasping opportunities and minimising risks from the TPP and the EVFTA, the road map for reforming trade-related laws, and the FTAs’ significance in local agriculture.

Footwear exports reach nearly 5 billion USD

The leather and footwear sector’s exports reached nearly 5 billion USD in the first five months of this year, up 6 percent against the same period last year, according to the Ministry of Industry and Trade.

In May only, exports of leather and footwear products were valued at 1.15 billion USD, a year-on-year decrease of 0.6 percent.

The production of leather footwear products in May saw an 6.2 percent decline to 19.3 million pairs.

In the January-May period, the sector produced 93.8 million pairs, down 2.9 percent compared to the same period last year.

This year, the sector sets a goal of 17 billion USD in export value, of which 13-13.5 billion USD are from exports of footwear.

Last year, Vietnam gained a high growth rate in export value from the leather and footwear industry at 15 billion USD, an increase of 16 percent year-on-year, according to the Vietnam Leather and Footwear Association (Lefaso). Of the value, 12 billion USD were from footwear.

Vietnam welcomes Canadian businesses

The Vietnamese Government always tries to create the most possible favourable conditions for foreign businesses and investors to operate in Vietnam, including those from Canada, affirmed Deputy Prime Minister Vuong Dinh Hue on June 15.

Receiving a group of Canadian businesses who are on a visit to Vietnam to seek investment opportunities, Hue said the Vietnamese Government has taken measures to increase macro-economic stability and restructure key sectors such as finance and banking, State-owned businesses, industrial production, agriculture and public investment, along with drastic efforts to improve the business and investment environment to improve national competitiveness.

He encouraged Canadian businesses to invest in the fields of consultancy, finance and credit to support small- and medium-sized businesses, and called for foreign private risk investment funds to assist start-up activities in Vietnam.

President and CEO of Northstar Financial Group Scott Shepherd said Northstar was active in providing finance for small- and medium-sized businesses and wished to cooperate and share experience with Vietnam as the two countries are implementing new free trade agreements.

He expressed willingness to help Vietnam in importing spare parts and machine products from developed countries.

The group plans to set up an export credit agency to support Vietnamese businesses in their export activities, he said.-

ADB trade finance programme increases Việt Nam presence

 The trade finance programme (TFP) of the Asian Development Bank (ADB) will provide guarantees worth up to US$20 million a year to support trade in Viet Nam.

The ADB said in a news release on Wednesday that it had signed an agreement on support with the Orient Commercial Joint Stock Bank (OCB), which means the TFP now has 12 bank partnerships in Viet Nam.

“Under this agreement, ADB and OCB will support exporting and importing companies, including small- and medium-sized enterprises (SMEs),” Steven Beck, the head of trade finance at ADB, said. “This agreement will help create economic growth and jobs.”

ADB said Viet Nam has consistently been one of the top five most active among 20 developing markets where the TFP operates.

The programme has conducted nearly 4,500 transactions, supporting over $6.9 billion in trade in Viet Nam. Of these, roughly 75 per cent were for trade financing for SMEs.

Viet Nam’s economic growth has been increasing since 2012, with the gross domestic product (GDP) expanding 6.7 per cent in 2015 – its strongest in seven years. The growth has been propelled by a surge in foreign direct investment and export-oriented manufacturing.

However, at least 70 per cent of the country’s GDP is generated in cities and serious development challenges remain to make growth more inclusive, according to ADB.

For instant, SMEs’ access to trade finance remains limited with Việt Nam’s banking sector not yet as developed as in other regional markets such as Malaysia, the Philippines or Thailand. As such, international banks either have limited or no appetite to take risks on Vietnamese banks.

Backed by ADB’s AAA credit rating, the TFP provides guarantees and loans to over 200 partner banks to support trade, enabling more companies throughout Asia to engage in import and export activities.

Since 2009, the TFP has supported more than 8,000 SMEs across the region, with about 11,500 transactions valued at over $23.2 billion, in sectors ranging from commodities to capital goods, to medical supplies and consumer goods.

Cover warrant rules due to be published shortly

The State Securities Commission (SSC) will soon complete and issue guidelines for trading covered warrants and the new product will be available next year, Nguyen Son, director of the SSC’s Market Development Development Division, said at a meeting on Tuesday.

Covered warrants allow holders to buy or sell a specific amount of equities, currency or other financial instruments, usually from or to a bank or a similar financial institution, at a specific price and time.

The development of covered warrants is the first step to prepare investors and derivatives market for more complicated products, including options, he said, adding that securities companies have improved their finance and risk management during the past few years to provide customers with high-value and reliable products and services.

Vietnamese investors are afraid of making big investments, so covered warrants would be suitable for investors who are not adventurous and have modest incomes, thus attracting more investors, Son said.

There are now two types of covered warrants, he added. The US covered warrant allows holders to trade before and during the due date, while Europe’s covered warrant only allows holders to trade during the due date.

If Viet Nam satisfies the requirements of the trading systems, those two types of covered warrant may be traded, but the Europe-style product is still preferred to the US-style, he said.

The trading of covered warrants will boost trading liquidity on the stock market as holders can trade a specific amount of underlying assets, including equity, with securities firms at a specific price on or before a specific date, said Tran Thi Anh Dao, Vice Director General of HCM Stock Exchange (HOSE).

HOSE has developed a guideline for the market and investors, and the southern agency has also developed a training programme for securities firms, she said.

The SSC should remove the regulation requiring securities firms to report and publish warrant trading activities within 24 hours that could have big impact on shareholders’ rights, because those activities should be announced by public companies, Sai Gon Securities Inc’s representative said.

If public companies do not bring their trading activities to the public, securities firms will not publish the information about the trades as it could violate the code of information security, and securities firms will also not publish information already announced by public companies, he said.

Covered warrants should be traded within the trading day to increase the market’s trading liquidity and draw more investors, suggested Trinh Hoai Giang, vice director general of HCM City Securities Corp.

The price margin of the warrant could be much higher than that of other underlying assets, and the price step should be smaller than that in the trading of shares and ETF notes as the face value of warrants is smaller than that of shares, he said.

Fruit export surges in first five months

Fruit export brought home US$967 million in the first five months of this year, a 147% surge against the same period last year, according to the agricultural sector.

During the period, the country shipped 3,400 tonnes of fruits to major markets, including 2,500 tonnes of dragonfruit to the United States, Japan and the Republic of Korea (RoK), 230 tonnes of mango to Japan and the RoK, 160 tonnes of rambutan and 500 tonnes of longan to the US.

Exports of dragonfruit, rambutan, longan and lychee into the US increased three-fold against the 2015 figure to 2,000 tonnes. Mango and starfruit will enter the market in June.

According to Nguyen Trung Kien from the Institute of Policy and Strategy for Agriculture and Rural Development, of agriproducts for export, vegetables and fruits will grow at the fastest pace.

Besides the US and Japan, there is a lot of room for Vietnam to export vegetables and fruit to Australia, New Zealand, the RoK, the EU, India and Chile.

Quarantine is an important step to overcome technical barriers in many markets, besides restructuring production process to produce fruit of consistent quality, said Hoang Trung, Head of the Department of Plant Protection.

Fruit export is expected to hit more than US$2 billion this year, up 11% compared to 2015, according to the Ministry of Agriculture and Rural Development.

Vietnam is currently exporting fruits to more than 40 countries and territories worldwide.

Vinapharm IPO announced to June 22

Vietnam’s largest pharmaceutical, Vietnam Pharmaceutical Corporation (Vinapharm), will launch its initial pubic offering (IPO) on the Hanoi Stock Exchange on June 22, offering 42.5 million shares equalling 18% of the corporation’s chartered capital.

Vinapharm’s shares will be traded at the initial price of VND10,000 (US$0.45) apiece. After the sale, Vinapharm expects to acquire VND2.37 trillion (US$106 million).

The Ministry of Health (MoH) will retain the remaining 154 million shares, equalling 65% of Vinapharm’s chartered capital.

After the IPO, the corporation will invest VND3 trillion (US$133.7 million) to develop nine projects, including pharmaceutical production and processing plants, warehouses and logistics systems, a pharmaceutical cultivation area, and a research and development centre, in the next ten years.

Vinapharm was established in 1971 and was transformed into a single member joint stock company in 2010.

The corporation specialises in trading pharmaceutical products, functional foods, and medical equipment. In addition, the corporation invested in four subsidiaries and 11 joint-venture companies, with a total capital of VND1.547 trillion (US$68.9 million).

As of the end of 2015, the corporation had a total asset value of VND6.785 trillion (US$302.5 million). In 2015, its revenue reached VND7.281 trillion (US$324.6 million) with a net profit of VND350 billion (US$15.6 million). The revenue is expected to increase by an average of 70% per year during the 2016-2020 period.

Vinapharm is currently the owner of prime real estates in Hanoi and Ho Chi Minh City, with 3,280 square metres on Lang Ha street and 2,670sq.m on Nguyen Huy Tuong street. It also has a sizeable land on Dien Bien Phu street in Ho Chi Minh City.

Mounting debts spell doom for Bisuco

Hundreds of employees at Binh Dinh Sugar JSC could be losing their jobs as the company is proving increasingly unable to deal with its towering debts and falling short of cash to renovate its production equipment.

Binh Dinh Sugar JSC’s (Bisuco) trade union has been sending documents to competent authorities reporting that the company has been falling behind with payments to its employees and subsequently pushing these workers to the point where they could lose their jobs permanently as their have not received their wages due.

The document noted that Bisuco has no work for their staff in the time to come and its accounts are running too dry to repair the factory’s equipment. Bisuco is known to be indebted to their employees, including VND1.5 billion ($68,807) in wages, over VND2 billion ($91,324) in employees’ social insurance, and some VND1 billion ($45,662) in purchases of sugarcane from farmers.

According to Tran Chau, Deputy Chairman of the Binh Dinh District People’s Committee, after several meetings, Bisuco has agreed to pay for sugarcane worth some VND16 billion ($730,593) purchased from local farmers. On top of the unpaid wages and social insurance, the company, however, has yet to pay sugarcane farmers in the Central Highlands’ province of Gia Rai province, as well as fall behind schedule to pay for a number of its basic construction sites.

In 2006, over 90 per cent of Bisuco’s stakes were acquired by Indian-owned NIVL JSC. During the past three years, Bisuco has constantly been in debt to its sugarcane farmers who supplied the raw ingredient to the sugar factory.

Bisuco leaders once explained that its arrears in terms of wages, social insurance, and sugarcane purchases were a result of the company’s losses derived from the heavy investment in its large-scale plant in Cambodia. In addition, the dropping price of sugar products and refused loans from banks also contributed to the company’s mounting detbs.

In 2014, Binh Dinh sent a formal request to the Ministry of Foreign Affairs to work with the Embassy and the Consulate General of India in Ho Chi Minh City to resolve the liability of NIVL JSC and help the sugarcane farmers in Binh Dinh. The debt issue, however, has not been completely resolved up until now.

Due to economic difficulties, the sugar factory has in fact offered to pay farmers in the Central Highlands regions with refined sugar, in exchange for the sugarcane supplied.

NIVL JSC, meanwhile, is also indebted some VND56 billion ($2.56 million) to sugarcane farmers and merchants in Long An province, VND16 billion ($733,944) of which is due for the 2016 season, while the remainder was accumulated over the previous seasons. However, an anonymous source disclosed that the arrears could be as high as VND95 billion ($4.35 million), with a number of households being owed some VND3-4 billion ($137,600-183,480). According to this source, the unpaid amount adds up to VND9 billion ($412,844) for a number of households.

In 2014, NIVL was besieged by local farmers to perform on unsettled and overdue bills altogether worth VND150 billion ($6.88 million). NIVL subsequently managed to repay the furious farmers in instalments, yet its debts continued building up over the harvests until the current crop.

On April 27 and 28, various employees of the NIVL factory went on strike to demand the full payment of overdue wages. A NIVL representative then met up with the workers to discuss their demands, promising to look into their complaints on the company’s remuneration and medical insurance policy, as well as unfulfilled bonuses. To date, no specific steps have been taken by the sugar factory.

In the same month, NIVL was fined by the Long An Provincial People’s Committee for discharging untreated toxic wastewater into the Vam Co Dong River. The fine imposed was VND350 million ($17,500), the highest ever inflicted on an environmental violator in Vietnam, according to the Ministry of Natural Resources and Environment’s Vietnam Environment Administration Department.

VinaCapital and DEG enter into wood industry

VinaCapital’s Vietnam Opportunity Fund (VOF) and DEG, a subsidiary of Germany’s KfW Group, have announced a $30 million investment in the An Cuong Wood Working Joint Stock Company, one of Vietnam’s leading wood-working and decorative materials companies.

VOF will contribute 70 per cent of the investment capital and DEG 30 per cent with two phases involved. Disbursement of $18 million in the first phase will be implemented immediately, with disbursement in the second phase to be made according to the business plans of An Cuong.

An Cuong has committed to revenue growth and to meeting European and especially German environmental standards.

“We are delighted to welcome VinaCapital and DEG as strategic shareholders,” said Mr. Le Duc Nghia, CEO of An Cuong. “One of the reasons we have entered into this transaction is because these two organizations bring not only capital but also expertise and a track record of working with investees.”

Mr. Don Lam, CEO of VinaCapital, said that An Cuong has been on its radar for some time. “We are pleased to be partnering with DEG to help An Cuong further build on its leading position in the industry and enter a new phase of growth,” he said.

VinaCapital is a leading investment and asset management firm headquartered in Vietnam, with a diversified portfolio of $1.4 billion in assets under management.

DEG finances investments in private companies in developing and transitional countries. It promotes private business structures to contribute to sustainable economic growth and improved living conditions. DEG’s current portfolio in Asia amounts to $2.9 billion.

The An Cuong Wood Working Joint Stock Company has been a leading player in wood-working and decorative materials in Vietnam since 1994 with a range of well-known brands from the US, Germany, Italy, Spain and Australia in wood and plastic-based panels widely used in the interior decoration of houses, apartment buildings, schools, supermarkets, and offices.

According to a report from the Vietnam Timber and Forest Product Association (Viforest) in coordination with Forest Trends Organizations, Vietnam imported 4.79 million cubic meters of timber worth $1.66 billion in 2015, to cater to the wood processing industry.

The importation of raw wood plays an important role in Vietnam’s wood processing industry meeting growing demand in domestic and foreign markets.

In 2015, wood and wood product exports earned $6.9 billion in revenue, an increase of 10.71 per cent year-on-year, according to Vietnam Customs. Exports of wood and wood products are expected to earn $7.2 billion to $7.3 billion this year, for growth of 8 to 10 per cent.

Vietnam’s wood and wooden products are found in 37 countries around the world. The US was the largest export market in 2015, with turnover $2.6 billion, followed by Japan with $1 billion and China $982.6 million.

Citi launches voice biometrics authentication

For Citi’s consumer banking customers in Asia Pacific, remembering multiple PIN numbers and responding to a series of questions to verify their identity when they call into the bank will soon be a thing of the past.

Voice biometrics authentication has now been implemented in Singapore, with Australia, Hong Kong and Taiwan to follow in the coming weeks. It will be rolled out throughout the region in 2016 and 2017 to cover all 12 of Citi’s consumer banking markets in Asia Pacific, including Vietnam, which represent more than half of the bank’s 19 consumer markets globally.

Citi will be the first financial services firm to deploy voice biometrics authentication across Asia Pacific as the bank builds further on its successful innovation in retail banking in the region.

Citi has around 15 million consumer banking customers in the region and the bank expects to have at least 1 million customers actively using voice biometrics authentication in the next 12 months. Within three years it expects the number of users to grow to 3 million.

Once available, customers who call into the bank’s contact centers will have their identity automatically verified within 15 seconds or less as they explain their reason for calling. This is a reduction from an average time of around 45 seconds currently.

The voice biometrics authentication capability identifies customers through their voice print, which, similar to a fingerprint, is unique to each person. Citi clients can opt to enroll by recording their voices, which the bank will use to generate and store their voice prints for matching subsequent calls to Citibank. Each voice print will be uniquely tagged and cannot be reverse engineered once stored.

“The voice biometrics authentication capability underscores Citi’s focus on technology to better serve our customers,” said Ms. Anand Selva, Asia Pacific Head for Consumer Banking at Citi. “We know that remembering different PINs and answering multiple questions can make the process frustrating. With this new capability, we offer our customers a faster and more secure authentication for a better customer experience.”

“Biometrics will play a critical part in the future of banking and we are excited to be paving the way for Citi globally,” said Ms. Natasha Ansell, Citi Country Officer for Vietnam. “Today, our call centers receive increasing numbers of calls annually, of which a large portion are manually verified. With voice biometrics authentication we will make the verification process easier, faster, and more secure for clients.”

Asia is an important region for innovation at Citi. Six years ago the bank launched its new branch design – called Smart Banking – in Asia for the first time. The Smart Banking concept involves using technology, architecture and design and new retail channels to connect customers to their money and provide them with a better way of banking. Over 200 such branches have since been rolled out globally since the Asian launch.

UNDP partners with HATCH!VENTURES

The UN Development Programme (UNDP) announced a partnership with the startup incubator HATCH! VENTURES to facilitate youth innovative action for social good in Vietnam by signing an MoU in Hanoi on June 14.

The collaboration will focus on three game changing areas of common interest: innovation for development, mobilization of young people into innovative action towards achieving the Sustainable Development Goals (SDGs), and partnerships with the private sector.

“Young people are the most important stakeholder to drive the sustainable development agenda forward,” Dr. Pratibha Mehta, UNDP Resident Representative in Vietnam, said at the signing ceremony. “Through this partnership we shall bring innovative technology and the development agenda closer and encourage new ideas, prototypes and creative solutions that increase access, reduce costs, and enable citizen participation and feedback.”

The agreement builds on the initial partnership in 2015 around the Hackathon for Social Good, which mobilized more than 100 young people into action towards delivering sustainable development goals. The competition resulted in two innovative ideas promoting citizen voices, namely “For People” (the 4P) app on mobile phones to collect citizen feedback on public services, and “GT-101”, an educational tool to encourage citizens to report any misconduct by traffic police.

In 2016, UNDP will collaborate with HATCH! VENTURES in the Social Innovation Camp and the Social Innovation Summit to identify and scale up innovation for development solutions.

UNDP will challenge campers to come up with innovative solutions to tackle issues under five of the 17 SDGs, namely SDG12 – Responsible Consumption and Production, SDG13 – Climate Action, SDG14 – Life Below Water, SDG15 – Life on Land, and SDG16 – Peace and Justice.

“How the 2016 Social Innovation Camp differs from the previous competition is that it will stimulate sustainable innovative solutions for social issues that can be scaled up to make a difference around the country,” said Mr. Pham Quoc Dat, Director of HATCH! VENTURES. The Camp will take place in August in three cities – Hanoi, Da Nang, and Ho Chi Minh City – to facilitate participation nationwide.

Dr. Pratibha hopes it will yield more innovative ideas and galvanize thousands of young people into creativity to speed up information sharing and promote citizens’ participation and transparency for SDG implementation.

Five month import-export turnover reaches over US$133 billion

Vietnam’s total import-export turnover is estimated at US$133.246 billion in the first five months of the year, with two import groups of commodities and one export group reaching US$10 billion.

Of the total, Vietnam reported US$67.444 billion in export revenue, a year-on-year increase of 6.2%, and US$65.8.5 billion in import revenue, down 1.7% over the same period last year.

Thirteen groups of commodities posted an export value of over US$1 billion each, with telephones recording the highest export revenue of US$14.254 billion, up 19.1% over the same period in 2015).

Garments and textiles stood second with export revenue of US$8.613 billion, followed by computers, electronic products and components at US$6.376 billion and footwear with US$5.049 billion.

Foreign direct investment (FDI) enterprises accounted for US$47.133 billion, representing nearly 70% of the total national export revenue, a year-on-year increase of 9.4%.

The group of machines, equipment and parts posted the highest import revenue at US$10.59 billion, followed by computers, electronic products and components with US$10.441 billion.

The import revenue of the FDI sector was US$38.796 billion, accounting for nearly 59% of the country’s total figure.

As of May, Vietnam posted a trade surplus of US$1.639 billion.

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

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