BUSINESS IN BRIEF 27/4
Vietnam Airlines announces Q1 revenues
National flag carrier Vietnam Airlines earned an estimated consolidated revenue of more than 19 trillion VND (851.3 million USD) in the first quarter of this year.
This was a year-on-year increase of 13.3 percent increase, reaching 26.4 percent of the yearly target.
The pre-tax consolidated profit is more than 1.071 trillion VND, rising 32.5 percent compared with the same period last year.
Of this, the parent company is estimated to have reached more than 15 trillion VND in revenue and 873.9 billion VND in pre-tax profit.
In a press release issued on April 24, the carrier said it had operated in a good business environment where the macro-economy remained stable with fine GDP growth. In addition, the fuel price was kept low while the foreign exchange at its key markets had increased in comparison with the United States dollar.
During the period, the carrier flew more than 4.6 million passengers and nearly 61,000 tonnes of goods, 11.6 percent and 11.2 percent higher than its plan, respectively.
However, the firm is still faced with many challenges and fluctuations from the market such as highly-increased terrorism in the Europe, particularly after the bombings that occurred in Brussels in March, and doubts about the Zika virus’s penetration into Vietnam that affected the travelling demands on international routes.
Complicated weather and infrastructure at a number of airports have also hampered the firm from implementing its plans and services.
In the first three months of the year, there were 2.46 million international guests visiting Vietnam, 20 percent higher than that of the same period last year. Of the figure, nearly two million passengers came to the country by the airline.-
FLC Quang Binh complex halts construction over protest
The Quang Binh Public Security Department prosecuted residents interfering with the ground-breaking ceremony of FLC Quang Binh beach and golf resort complex on April 24, for disturbing public order.
Besides, the Standing Committee of the Quang Binh People’s Council requested to suspend Pham Van Lieu, Chairman of the Hai Ninh Commune People’s Committee, from office due to his delay in propagating the complex’s socio-economic benefits for the province among the residents, as well as his embarrassment in dealing with the public order.
On April 24, hundreds of residents in Hai Ninh commune gathered in front of the ground-breaking area to protest the FLC project’s implementation, for fear of sea and environmental pollution once the complex comes into operation. The recent mass dying of fish stock gave particular impetus for concerns over residents’ lives and income, making tempers run higher.
In order to implement the project on schedule, the Standing Committee of Quang Binh People’s Council requested the authorities to increase public communications as well as supply specific information about the project’s effects on the region, to reach a compromise with the residents.
The construction of FLC Quang Binh beach and golf resort complex was expected to kick off on April 24. Being the largest resort complex ever invested in Quang Binh, the 1,976-hectare complex has the total capital of VND13.8 trillion, of which VND3.5 trillion goes into the first phase’s construction.
The complex combines villas, 5-star hotels, an international conference centre, a shopping centre, and a sports area.
Thaco kickstarts VND30 trillion expansion plan for 2016-2018
Vietnamese car manufacturer Truong Hai Auto Corporation (Thaco) has recently revealed plans to invest VND30 trillion ($1.34 billion) to expand its operations during the 2016-2018 period, aiming to seize opportunities brought by Vietnam’s accession to the Asean Economic Community (AEC) in 2018.
Thaco expected to become a diversified industrial group with the key operation sector being manufacturing and trading automobiles. The corporation also planned to sell 150,000 automobiles by 2018, and make a total revenue of over VND95 trillion ($4.26 billion).
To realise its plans, Thaco will spend VND9.7 trillion ($435.3 million) of its VND30 trillion ($1.34 billion) package on expanding its distribution systems and showrooms for the next three years.
The remaining VND20.3 trillion ($911 million) will go into constructing factories as well as investing in modern technology and machinery in its Chu Lai-Truong Hai complex in the central province of Quang Nam’s Chu Lai open economic (EZ) zone to manufacture international-standard products.
Accordingly, Thaco will soon implement a series of key projects, including a Mazda manufacturing and assembling facility with a capacity of 100,000 vehicles per year, a truck manufacturing factory with a capacity of 100,000 units per year, as well as a bus factory and a mini bus factory with a total capacity of 15,000 units per year.
Furthermore, Thaco will construct a series of supporting factories to manufacture components for export and serve under its automobile manufacturing and assembly factories. It will also dredge Chu Lai-Truong Hai port to link Chu Lai open EZ with Korea, Japan, and China, netting preferential conditions for its export-import activities.
According to the chairman of Thaco’s Board of Directors, Tran Ba Duong, in 2015, Thaco earned an after-tax profit of VND7.03 trillion ($315.5 million), however, it paid its shareholders a dividend of approximately VND2 trillion ($89.7 million), while the remaining profit was reinvested.
Established in 1997, Thaco operates in the automobile trading and manufacturing sectors, logistics, as well as dealing with industrial park infrastructure development. In 2015, Thaco sold 80,421 automobiles with the total revenue of VND45.8 trillion ($2.05 billion), up 89 per cent on-year.
In 2016, Thaco’s automobile sales are expected to reach 112,336 units, up 40 per cent on-year, 62,083 units of which are passenger cars, signifying an increase of 47 per cent on-year. Accordingly, its assets will increase to VND46.2 trillion ($2.07 billion), with the consolidated revenue of VND71.7 trillion ($3.22 billion).
Seminars on EU-Vietnam Free Trade Agreement held in Hanoi, HCM City
Swedish officials in the field of Trade Policy are conducting two seminars on promoting exports from Vietnam to Sweden. One in Hanoi, the 26 of April and one in HCM 28th April 2016.
The seminar in Hanoi is entitled train the trainers. The objective is to support Vietnamese officials and branch organizations implementing the FTA to better assist local exporters in their steps to export to Sweden and the EU. Officials from the Ministry of Industry and Trade, customs authorities, branch organizationsare also invited to attend the seminar.
In her opening remarks, Swedish Ambassador Camilla Mellander said “Today’s seminar presents an opportunity for Vietnamese officials and authorities learn aboutthe EU-Vietnam FTA and to be aware ofwhat’s required when exporting to the EU and to Sweden. To fully understand the rules and regulations set by the EU will give Vietnamese businesses a competitive advantage compared to exporters from other countries”.
She also stressed that Vietnam is of increasing importance to Sweden as a trading partner in ASEAN. Since 2013, Vietnam has been the EU’s fourth most important trading partner among the ten ASEAN member states.She noted “In a global economy, I would like to emphasize again the opportunity for win-win partnerships with Vietnamese suppliers where Swedish innovation and technology can partner with Vietnameseinputs and expertise to deliver best possible solutions needed by both sides”.
Nesli Almufti, from the Swedish National Board of Trade said: ”the purpose of our visit, is to discuss with the relevant ministries and companies the EU-Vietnam FTA and various rules and regulations when exporting to Sweden and the EU. This agreement will stimulate trade, investment and economic growth in both Europe and Vietnam and we are happy to collaborate with MOIT both in Hanoi, HCM and Stockholm to promote and facilitate trade between Vietnam and Sweden. Today’s seminar, in Hanoi, will focus on practical advice for the authorities on how to support Vietnamese companies comply with the mandatory requirements when exporting to Sweden and the EU”.
The seminar in Hanoi will be followed by another eventin Ho Chi Minh City, which has a different focus. It will provide hands on information to Vietnamese companies on how to utilize the FTA to boost their exports to the EU and Sweden. The objective will be not only informing but engaging Vietnamese companies about rules and regulations and market information when exporting to Sweden.
Companies interested in exporting their products to Sweden or other European Union (EU) countries are alsoencouraged and invited to attend the seminar. They can make important contributions by bringing practical inputs to the discussion.
The two seminars are organized by the Ministry of Industry and Trade of Vietnamin collaboration with the Swedish National Board of Trade.
Currently, Vietnam’s key export items to the EU include telephone sets, electronic products, footwear, textiles and clothing, coffee, rice, seafood, and furniture. EU exports to Vietnam, meanwhile, are dominated by high-tech products including electrical machinery and equipment, aircraft, vehicles, and pharmaceutical products.
PUMA’s Vietnamese suppliers to get access to affordable financing
Vietnamese suppliers of the world’s leading sports brand PUMA will be able to access affordable financing from the International Finance Corporation (IFC) if they comply with PUMA’s environmental, health, safety and social standards.
According to the recently-inked agreement between the IFC – a member of the World Bank Group, and the European brand, the IFC will offer financial incentives for PUMA’s suppliers in emerging markets to improve those mentioned standards.
The programme will be launched in Bangladesh, Cambodia, China, Indonesia, Pakistan and Vietnam during the first phase.
The IFC will adopt a financing structure with tiered pricing of short-term working capital, offering lower costs for those suppliers that achieve a high score in PUMA’s supplier rating based on their adherence to the company’s social and environment standards.
The deal advances IFC’s effort to encourage small and medium enterprises (SMEs) to enhance environmental and social sustainability while achieving strong financial results, Sergio Pimenta, IFC Director of Manufacturing, Agribusiness and Services said.
The IFC provides financing to ready-made garment and footwear suppliers through its Global Trade Supplier Finance (GTSF) programme, which offers working capital to suppliers backed by receivables from international buyers.
Motor car exhibitions on horizon
Four luxury car brands are preparing to hold exhibitions in May and June.
Audi’s official distributor has announced plans to organize its first exhibition in Vietnam – the Audi Progressive exhibition – at Quan Ngua Sport Palace in Hanoi on June 9 to 12.
A representative from Lien A International said that two new models will be displayed – the next generation Audi A4 midsize sedan and the Audi R8 V10 supercar.
The exhibition will also showcase luxury accessories of the German motor cars, such as modern technology and sound and light systems.
BMW, MINI, and Mercedes-Benz will also hold exhibitions.
Euro Auto will hold the BMW World Expo 2016 on May 6 to 9 in Hanoi to present BMW, MINI and Motorrad.
The Mercedes Fascination 2016 exhibition, meanwhile, will be held at the My Dinh National Stadium from June 8 to 12.
According to representatives of the carmakers, the exhibitions will be held in Hanoi to help consumers in the northern market view existing and new models while consumers in the southern market can do likewise at the VIMS 2016 exhibition in Ho Chi Minh City in October.
Vietnam April inflation at 4-year high
Vietnam’s inflation rate in April was 0.33%, the highest month-on-month increase since 2012, with the prices of most goods and services rising, according to the government’s new data.
After flatlining in January and slowly picking up in the following months, the inflation rate this year has been 1.33% compared to 0.04% in the same period last year.
Of the 11 baskets making up the consumer price index, food and dining services and post and telecom remained unchanged in April and entertainment and tourism slightly declined, while all the rest saw an increase, the General Statistics Office of Vietnam reported.
Transport prices grew the most, 1.73%, as fuel prices increased by 3.83% month-on-month following two fuel hikes at the end of March and early this month.
Housing and construction materials ranked second after increasing by 0.71% due to a rise of 1.64% in construction material prices. The rise resulted mainly from additional taxation on imported steel products as a temporary safeguard measures.
The new tariffs, 23.3% on billets and 14.2% on rods, took effect on March 22.
Inflation was at a record low of 0.63% last year, but is expected to rise to 5% this year.
IP protection stressed at forum
Businesses must be fully aware of the importance of intellectual property (IP) and make it a critical part of their development strategies, especially now that the country is a member of the Trans-Pacific Partnership (TPP), officials said at a discussion in Ha Noi last week.
TPP, the world’s biggest free trade agreement with its 12 member countries making up 40 per cent of the global economy, has an IP chapter that covers patents, industrial designs, trademarks, geographical indications and copyrights.
Viet Nam’s efforts to protect IP rights have yet to meet the real demand as well as international commitments, Deputy Minister of Science and Technology Tran Viet Thanh said.
Thanh said the country has implemented IP rights from the central to grassroots levels with programmes aimed at tackling smuggling, trade fraud and counterfeit products, and another on preventing IP infringements.
However, the violation of IP rights is still rising and has become more complicated, he emphasised.
The market control force has dealt with more than 22,400 cases relating to fake and low-quality goods and IP rights violations, said Pham Van Toan, deputy chief inspector of the Science and Technology Ministry (MoST).
Of the figure, MoST inspectors have handled 752 cases and fined 344 violating organizations, while their counterparts in the Culture, Sports and Tourism Ministry have tackled 419 cases and fined 384 violators.
As a TPP member, Viet Nam must realise its commitment to IP rights, foreign investment, environment and labour standards, competition and State-owned enterprises, and the settlement of disputes, Deputy Minister Thanh said.
To boost law enforcement’s effectiveness, Toan stressed the need to align relevant legal documents – such as the Law on Intellectual Property, the Penal Code, the Law on Customs and the Law on Pharmaceuticals – with current conditions and international commitments.
While law enforcement staff should receive intensive training, inspections and the punishment of violations must be strengthened, he added.
Roland Chan, a senior director at BSA-The Software Alliance, said local companies might face risks, including cybersecurity concerns in a world that is now hyperlinked to the internet. In response to a question about how businesses should be made aware of the potential troubles they may face from using unlicenced software in TPP, Roland said the matter may be a legal question. Under the current Vietnamese law, using unlicenced software constitutes a breach of IP protection laws, including computer software.
“As an equally important concern, studies have shown that there is a close correlation between the use of unlicenced software and malware intrusions,” he said.
“Ensuring the legal use of properly licenced software is a key first step an organisation can take to improve information security. As a next step, by implementing an effective Software Asset Management (SAM) solution, businesses can take full control of their software inventory and reduce risk significantly.”
The Economic Counsellor of the US Embassy in Ha Noi, John Hill, told seminar attendees that implementing transparent laws, regulations and procedures to comply with IP rights will be an imposing task for Viet Nam. He added that enforcing the standards will be even more daunting for the country as a stage of development.
And at the national level, TPP makes it possible for signatory governments to be held accountable for actions inconsistent with the agreement’s IP provisions. Under an investor-state dispute settlement mechanism, an aggrieved foreign company could take a government into international arbitration. This could put Viet Nam on the hook, Hill said.
The representative said that in the long run, better IP safeguards will attract FDI and help Viet Nam build the skills and capabilities that will carry the country over the middle-income trap.
At the discussion, many insiders called on companies to survey the market regularly to timely detect any violations of their IP rights.
The function, held by the MoST and the Viet Nam Chamber of Commerce and Industry, was among activities in response to World Intellectual Property Day (April 26).
Seafood exporters seek easing of currency restrictions
The Vietnam Association of Seafood Exporters and Producers (VASEP) has submitted documents to the State Bank of Vietnam (SBV) regarding Circular No. 24, which states that from March 31 certain enterprises are not permitted to borrow foreign currencies from banks and then exchange them into Vietnam dong to buy materials.
According to VASEP, if the article was applied to enterprises that have demand for short-term capital to conduct export-related activities it would lower the competitive advantage of Vietnam’s exporters.
VASEP therefore proposed the SBV Governor reconsider and remove the regulation.
The association also said that exporters borrowing short-term currencies would not influence the stability of foreign exchange rates.
This is second time in four years VASEP has submitted a proposal to the SBV regarding the matter.
An expert from SBV said it would be difficult for the central bank to agree to the VASEP proposal.
Banks ask SBV to delay stricter rules
Commercial banks are recommending that the State Bank of Viet Nam (SBV) delay tightening of lending rules, as it could face difficulties once it takes effect on January 1, 2017.
The SBV in February, issued a request for comments on its amendments to Circular 36, which would set stricter rules on asset-liability management and on providing credit to the real estate sector in an effort to restrain the liquidity risk and the mass of credit flow into the real estate sector.
Under the draft, the SBV’s proposed asset-liability management rule reduces the share of short-term funding that banks can use for loans longer than 12 months to 40 per cent from 60 per cent.
In addition, the SBV also proposed an increased risk weighting of real estate loans to 250 per cent from 150 per cent, which limits the credit growth of banks in this sector.
However, banks said that they would face numerous difficulties if the new regulation takes effect as scheduled.
Phan Duc Tu, general director of the Bank for Investment and Development of Viet Nam, said that it is currently difficult for banks to mobilise long-term capital in the domestic market as local depositors often choose short-term tenors. The reduction of short-term funds for medium- and long-term loans therefore would be tough for banks, he said.
They, therefore, suggested to the central bank that they adjust the itinerary for the application of the regulation to make it according to the capital mobilisation in the local market.
Banks said that right after the release of the draft circular, they adjusted the interest rates for long-term deposits on numerous occasions to woo depositors. However, mobilisation is not as good as they expected.
In fact, the proposed regulations will not affect banks in the short term as the ratio of short-term funds for medium- and long-term loans at many banks is still below 40 per cent, meeting the central bank’s regulation.
The ratio at BIDV, for example, is currently at 37 per cent, according to Tu.
General Director of SHB Nguyen Van Le said that the ratio at his bank is 32.4 per cent and the bank’s plan this year is to gradually reduce medium- and long-term credit while increasing short-term tenors.
Leaders of Vietcombank said that the bank’s space for medium- and long-term credit remains large as the bank’s ratio of short-term funds for medium- and long-term loans is currently only 24 per cent.
Representatives from ACB also said that the bank would not be affected by the new regulation in the short term as its ratio of short-term funds for medium- and long-term loans is at 27 per cent.
However, the representatives admitted the proposed regulations would impact the bank in the long run and the bank is looking for measures to adjust the capital inflows to the new rules.
Fecon to increase foreign ownership levels
Fecon Foundation Engineering and Underground Construction JSC (FCN) announced plans to increase foreigner ownership to over 49 per cent at the firm’s general shareholder meeting in Ha Noi on Saturday.
Fecon’s Chairman Pham Viet Khoa said increasing the percentage of foreign ownership would create the essential conditions to attract more investment and increase liquidity, help the stock price of Fecon better reflect its value and provide long-term benefits to shareholders. Currently, the foreign ownership of Fecon is around 32 per cent.
In 2015, the Ha Noi-based firm reached VND1.66 trillion (US$73.8 million) in revenue and VND155 billion in profit, an increases of 23 per cent and 14 per cent, respectively over the previous year. Despite the increases, Fecon said the results were only 92 per cent of its plan for the whole year due to delays in some major oil refinery constructions under the impact of slumping world oil prices.
In Q1, Fecon reported sales of VND260 billion and a net profit of VND26 billion.
Last year, Fecon said it entered the southern market, attracting over VND300 billion in new contracts. In addition, it won the underground construction segment of a $2 million construction project in Myanmar.
Also at the meeting, Fecon planned to change its name to Fecon Corporation, as it planned to diversify from its core business of foundation engineering and underground construction. Fecon, now seeks to expand into the infrastructures of urban areas, the environment and energy so that it can become one of the leading infrastructure firms by 2020.
Khoa said Fecon would continue to focus on developing its core business and cooperate with other investors in some joint investments, where Fecon would carry out the underground construction work.
According to a Vietcombank Securities Company report on the firm released on April 20, the greater ownership for foreigners and the future prospects of Fecon would make FCN one of the most likely shares to grow in the local market.
Hanoi exports plunge in April
Hanoi’s exports are estimated at US$852 million in April, down 1% against the previous month and 4% over the same period last year, according to Hanoi’s Statistics Office.
Total exports from January to April reached US$3.395 billion, up 0.2% against the same period last year. Of the figure, local exporters got US$2.613 billion, up 0.1%.
Products with high export growth included garment (up 22.7%), means of transports and tools (up 20.8%) while products seeing export decline are agricultural products (down 19.5%) and computer components and peripheral equipment (down 19.7%).
The capital city’s imports in April are estimated at US$1.754 billion, bringing the total import value for four months to US$7.325 billion, down 5.1% over the same period last year.
Imports of most products tend to decline compared to last year, such as chemical (down 24.7%), plastics (down 15.9%) and fertilizers (down 5.6%).
Hanoi’s Statistics Office also reported that industrial production obtained quite a high growth. The industrial production index (IPI) increased by 8.7% in the first four months of this year.
Int’l paper exhibition kicks off in Hanoi
The International Exposition of the Pulp and Paper Industry (Paper Vietnam 2016) officially opened at the National Convention Centre in Hanoi on April 26.
The event is organised concurrently with two other expositions, namely the international exposition for the rubber industry and tyre manufacturing (Rubber & Tyre Vietnam Expo 2016) and the Coatings Expo Vietnam 2016.
The three expos have drawn about 150 enterprises from 16 countries worldwide, including India , Japan , Germany and France , according to Nguyen Ba Vinh, Director of Minh Vi Exhibition and Advertisement Services Co Ltd (VEAS), one of the event organisers.
The events offer a chance for businesses to introduce their products and latest technologies to their industries, as well as serve as a bridge for Vietnamese enterprises to seek partners and expand markets, said Vinh.
Within the events, an array of conferences with speakers from international organisations, associations and companies are planned.
The three expos run until April 28.
Jetstar Pacific inaugurates Hue-Nha Trang route
Jetstar Pacific Airlines began operation of its new route connecting Hue in the central province of Thua Thien-Hue with Nha Trang in central Khanh Hoa province on April 26, serving its first 150 passengers on the flight using an Airbus A320.
Jetstar General Director Le Hong Ha said the route is part of a code-sharing strategy between his firm and national flag carrierVietnam Airlines, which aims to diversify the two airlines’ products as well as promote tourism development in the two localities.
As scheduled, the low-cost carrier will operate two return flights a week on Tuesdays and Saturdays, to meet travel, economic and tourism demands.
Jetstar said it will add more flights on the route if demand increases.
Over a million foreign tourists visit the ancient city of Hue every year, and from there many want to arrive next at the beach resort city of Nha Trang . Tourists and travel agencies can now take advantage of the new route to design tours between the two localities.
In November last year, Jetstar Pacific added three new domestic routes, connecting HCM City with Da Lat in the Central Highlands province of Lam Dong; Vinh in the central province of Nghe An to Cam Ranh in the central province of Khanh Hoa; and Hanoi with Tuy Hoa in the central province of Phu Yen.
The airline is a member of the Jetstar Group, a leading low-cost airline brand in Asia-Pacific, with a fleet of 75 aircraft and a network of routes in 17 countries. It is currently operating a total of 31 domestic and international routes.
Central bank praised for 65-year development achievements
Prime Minister Nguyen Xuan Phuc hailed the State Bank of Vietnam (SBV) for its efforts over the last 65 years as contributing to curbing inflation, stabilising the macro-economy and maintaining stable growth for the country.
Speaking at a ceremony in Hanoi on April 26 to celebrate the bank’s 65th founding anniversary, PM Phuc highlighted achievements made by the SBV during recent times, especially in accelerating the restructuring of credit organisations, and improving the efficiency of its operation, to lay a solid foundation for its future sustainable development.
He stressed that the SBV should continue to improve efficiency in its guidance and management, keep a close watch on and accurately make forecasts for the internal and external economic situations.
The bank is required to pay attention to flexibly managing the tools of monetary policy in connection with fiscal policy and other policies; while realising its goal of inflation control, ensuring the value of the Vietnamese Dong and maintaining a reasonable interest rate, stabilising the foreign exchange market and increasing foreign exchange reserves.
The PM asked the bank to focus on further promoting the restructuring of credit organisations and effectively addressing bad debts, while taking suitable measures to disburse credit funds for socio-economic development.
He also urged the bank to better the reform of administrative procedures, to facilitate access to credit loans for people and enterprises.
The SBV should direct credit organisations to cut down expenses, ensure appropriate lending rates and concentrate credit on prioritised fields; also, enhancing links with relevant ministries, sectors and localities and regularly arranging dialogues with business associations and communities should be done in order to listen to and swiftly solve difficulties facing their businesses and production, PM Phuc noted.
On the occasion, the government leader presented the Ho Chi Minh Order to the SBV for the third time in recognition of its achievements and significant contributions to the country’s development.
Established on May 6, 1951, the SBV well performed its task of State management over monetary, credit and banking operations. After implementing the restructuring of credit organisations in 2011-2015, the bank is managing seven State commercial banks, 28 joint stock commercial banks, six foreign banks and 50 branches of foreign banks, two joint-venture banks, one cooperative bank, and over 1,000 people’s credit funds.
The central bank made breakthroughs in applying advanced technologies to its operation. It has also actively cooperated with international financial organisations such as the World Bank, the International Monetary Fund and the Asian Development Bank, in order to expand partnerships and mobilise financial and technical assistance for the country.
Precision engineering, machine, metalworking exhibition opens in Hanoi
The 4th International Precision Engineering, Machine Tools and Metalworking Exhibition kicked off in Hanoi on April 26, attracting the participation of 175 enterprises from 19 countries and territories.
The businesses have brought their outstanding products, including broaching and shaping machines, preprocessing machines, precision measurement software, and sawing and cutting machines, to the exhibition.
The event not only offers a chance to boost trade connectivity among foreign companies but also helps local businesses seek potential customers, thus contributing to developing industrial production in the north of Vietnam.
Speaking at the opening ceremony, Deputy Minister of Industry and Trade Do Thang Hai affirmed that the exhibition is also a chance for domestic enterprises to approach advanced technologies in the world so as to improve their production efficiency and increase product value.
He told participants that the Vietnam mechanical development strategy for 2001-2010 with a vision to 2020 prioritises developing machinery and tool manufacturing to meet the requirements of industries.
Vietnamese mechanical companies have so far succeeded in manufacturing machines and devices to serve domestic industries, he added.
Within the framework of the exhibition, a series of seminars will take place, including a seminar themed “What Vietnamese enterprises need to prepare when TPP takes into effect”, and another on measures to increase the value for the Vietnamese manufacturing sector.
This year’s event will last until April 28. From now on, the exhibition will be held annually in stead of biennially.
Exporters urged to change to adapt to EU market
Vietnamese and Swedish trade officials called on Vietnamese exporters to be proactive in making changes to boost their share in the European market.
The advice came at a conference entitled “Vietnam – European Union Free Trade Agreement: Boosting exports from Vietnam to Sweden and the European Union,” which was held by the Ministry of Trade and Industry, the Swedish National Board of Trade and Sweden’s Embassy in Hanoi on April 26.
Camilla Mellander, Sweden’s Ambassador to Vietnam, said studying regulations and standards of the EU market carefully would help Vietnamese enterprises have the upper hand over other exporters.
The ambassador said Sweden appreciates Vietnam’s role in ASEAN and the country has many opportunities as an equal win-win partner with Sweden. Moreover, Vietnamese companies can cooperate with Swedish partners in search for the best solutions to both countries’ markets.
Nesti Almufti, an expert on commercial policy under the Swedish National Board of Trade , said the EU is the second biggest importer in the world and Vietnam has every chance to boost its exports to the market.
Vietnamese export companies should conduct more market research to find out purchasing power, tastes and diversity of the EU market, Almufti said, adding that perception and adaptability, especially to technical barriers, are vital for success in the EU market.
Tran Ngoc Quan, Deputy Head of the European Market Department, said the EU is one of Vietnam’s key partners in the country’s export strategy by 2020 with a vision to 2030.
He advised the business community to carefully study information to figure out possible impacts on their export products in order to work out a proactive action plan on orientating markets, seeking partners, and reforming production methods and administration associated with social responsibility and the business culture.
Top Thai brands 2016 trade fair set to open in May
Thailand’s internationally recognised brands will be nudged closer to Vietnamese consumers as the Top Thai Brands 2016, formerly known as the “Thailand Week” trade fair, is scheduled to take place in Ho Chi Minh City from May 6-8.
The fair, jointly held by the Department of International Trade Promotion under the Thai Ministry of Commerce and Thai Consulate-General in Ho Chi Minh City, is among many collaborative activities between Vietnam and Thailand.
The move aims to enhance trade and investment cooperation relations between the two countries while creating a platform for both Vietnamese and Thai enterprises to enlarge their networks and further develop strategic partnerships.
The Top Thai Brands 2016 offers tremendous business opportunities for various industries, including food and beverages, home appliances, automobile and motor spare parts, cosmetics and health care. It also covers other service sectors such as education, tourism, business franchising and catering services.
Alongside the Thai product exhibition, cultural performances, a cuisine showcase and a lucky draw will be included at the fair.
According to the organising board, Thai investors and enterprises have seen great potential in the Vietnamese market. The former “Thailand Week” has been successfully organised over the past 14 years, and billed as a venue for Thai enterprises to popularise their products as well as study the market and seek business opportunities in Vietnam, helping promote bilateral trade.
Business law reform in focus
Prime Minister Nguyễn Xuân Phúc on Monday chaired the first meeting with ministerial and sector leaders in Hà Nội seeking to remove obstacles to the enforcement of Laws on Enterprises and Investment.
Minister of Planning and Investment Nguyễn Chí Dũng reported that the two laws came into effect on July 1, 2015.
Under the new laws, the time required for fresh business registrations was slashed to 2.9 days on average while the time required for adjustment of business licence took 2.7 days on average.
The reform of the two laws was welcomed by international organisations, especially the Word Bank.
“The outcomes showed that the business environment improved right after the Law on Enterprises and the Law on Investment took effect,” said Minister Dũng.
However, problems still lie ahead during the implementation of the two laws, according to the minister.
The MPI pointed out the top 3 problems including differences and inappropriate regulations between the Law on Investment, Decree 118/2015/NĐ-CP and related laws and documents on investment procedures, difficulties in collecting, reviewing and reforming investment conditions in accordance with the Law on Investment and obstacles in conducting investment and business registration.
Phúc underlined the necessity to enforce the two laws with the Government’s Resolution 19/NQ-CP, dated March 12, 2015 on key duties and solutions to improve the business environment and national competitiveness in 2015-2016.
Phúc also pledged to uphold the role of the Task Force on Implementation of the Enterprise Law and Investment Law.
Public servants need to serve citizens and enterprises, the Government leader said.
He also agreed to issue guiding documents on the implementation of the two laws before July 1, 2016 and assigned the MPI to work with the Office of the Government and relevant ministries and agencies to implement the new regulations.
HCM City showcases high-quality products
The annual Vietnamese High-Quality Products Fair opened yesterday in HCM City, featuring nearly 700 booths of over 200 exhibitors, including manufacturers of high-quality goods.
Taking place at the Phú Thọ Indoor Stadium in District 11 until May 1, the 20th edition of the fair showcases a wide range of safe farm produce and high-quality Vietnamese products, said Vũ Kim Hạnh, chairwoman of the Business Association of High-Quality Vietnamese Goods, the organiser.
Many enterprises at the fair will launch new products as well as promotion programmes, Hạnh said, adding that each day more than 1,000 gifts will be presented to visitors from a truck driving throughout the fair area.
The fair includes conferences on new measures to penetrate Chinese market, brand building for rice and safe farm produce, business start-up networking, game shows and art performances.
Vietnam faces 14 trade safeguard lawsuits
Vietnam faced 14 trade safeguard lawsuits, including 12 anti-dumping lawsuits last year, up 140% compared to the previous year, according to the Vietnam Competition Authority (VCA – Ministry of Industry and Trade).
VCA said, State management agencies, with limited trade safeguard knowledge, have devised policies which violated the World Trade Organisation (WTO) agreements, and caused anti-subsidy lawsuits against Vietnam’s exported products.
It analysed as local exporters and trade associations are not fully unaware of international laws and regulations, particularly safeguard measures, they have failed to proactively capture and use safeguard tools to protect their legitimate rights in international trade.
Meanwhile, Vietnamese trade safeguard officials are not capable enough to meet actual requirements, the VCA said.
These weaknesses made the number of lawsuits rise seven cases compared to previous years.
Regional semiconductor players seek to enhance cooperation
SEMICON Southeast Asia 2016, the region’s largest microelectronics trade exhibition, opened in Penang, Malaysia, on April 26.
The event aims to promote regional cooperation and provide opportunities for businesses to foster their engagement in the global electronics supply chain.
Organised by SEMI, the global electronics supply chain industry association, the exhibition has attracted more than 200 companies.
With the latest technology developments and market trends presented by leading industry insiders to provide an insight into the electronics manufacturing ecosystem, the three-day SEMICON Southeast Asia is expected to attract more than 7,500 visitors, an increase of 15 per cent from last year.
According to Rich Salsman, vice president of SEMI Global, Southeast Asia is a vibrant region with established players, such as Singapore and Malaysia while the Philippines and Thailand, are expanding their involvement in the electronics supply chain, and Việt Nam is an emerging player with plans for a new 200mm wafer fabrication manufacturing project, besides its assembly, test and packaging activities.
The association’s statistics revealed the region’s microelectronic manufacturing accounted for 27 per cent of the world’s assembly, packaging and test production with 46 production fabrication manufacturers.
SEMI estimated a total spending of US$12.2 billion on materials in the 2016-17 period, in addition to the $6 billion on front-end and back-end equipment in the Southeast Asia region.
Amidst a slight decline in the semiconductor material market and in revenues globally due to the impact of forex volatility and low semiconductor unit growth, the association said there was a growing need for fostering regional and cross-regional cooperation and promoting innovation.
It said SEMICON Southeast Asia would offer opportunities as a platform for the entire semiconductor supply chain.
The association forecast a flat to low single-digit growth for the overall semiconductor industry this year.
Statistics showed the global semiconductor materials market decreased 1 per cent in 2015 and declined 0.2 per cent in revenues. Growth is expected to return in 2017.
SEMI, which connects more than 2,000 member companies worldwide to advance electronics manufacturing, is expanding its activities in Southeast Asia to support regional growth and promote collaboration in the electronics manufacturing supply chain.
Plastic association focused on bio-degradable raw materials
The Viet Nam Saigon Plastic Association will focus on research to develop renewable raw materials replacing fossil-based materials for making plastics in the 2016-20 period, its president has said.
Speaking at the association’s congress held in HCM City on April 16 to review its performance in the 2011-15 period and make plans for the next five years, Tran Cong Hoang Quoc Trang, said using renewable materials to make bio-degradable plastics would protect the environment.
The association would work to enable more members to join the industry’s human resource training programmes arranged by the city in collaboration with French and South Korean partners, he said.
It would enhance co-operation with the Phuong Nam Scientific and Technological Institute to implement a programme called “Decoding technology”, which has been trialled since last year, to help plastic firms execute all contracts with Japanese and South Korean firms related to supporting industries, he said.
They have the technological capability to accept 80-90 per cent of outsourcing contracts from foreign firms, he said.
The association also signed agreements with the HCM City Computer Association and HCM City Association of Mechanical Engineering to respectively develop an online trading platform for plastic products and mechanical engineering services.
These are among the tasks to be carried out in the next five years to ensure the industry’s development, Trang said.
Prof Nguyen Ngoc Giao, president of the HCM City Union of Science and Technology Association, said Vietnamese firms, including those in the plastic industry, mainly use imported technologies.
For its long-term development, each country should develop its own technologies, he said.
The Government encourages local firms to invest in research, but progress remains slow since enterprises are afraid of the risks involved in developing their own machinery and the Government’s support policies are admittedly vague.
Trang said it is hard for local firms to take advantage of the Government’s support policies, including interest rate subsidies. He was referring to red tape at banks.
According to the Ministry of Industry and Trade, the plastic sector’s exports grew at an average of 12.9 per cent in 2011-15 to reach nearly US$2 billion last year.
Vietnamese plastic products are exported to 80 countries and territories, with the US and the EU being large importers, Trang said.
The association regularly organises meetings to apprise its members about free trade agreements the country signs to help them capitalise on opportunities they throw up and cope with challenges, he said.
Syrena Việt Nam, Welham® Việt Nam sign agreement
Syrena Viet Nam Development Investment Jsc., a member of the multi-sector BIM Group signed a co-operation agreement with Welham® Viet Nam limited company on April 22.
Under the agreement, Welham® Viet Nam will provide services including consultancy, management and operation of Van Lien – Lotus Residences.
Chairman of Syrena Viet Nam management board Doan Quoc Huy believed that with extensive experiences and knowledge, Welham® Viet Nam will operate the project in the most effective and professional way.
General Director of Welham® Viet Nam Nguyen Viet Hung assured that Welham® Viet Nam will try its best to ensure the optimisation of profits for the future owners of the project, as well as bring annual growth and development for Lotus Residences.
He hoped that the strong partnership will result in a breakthrough for Lotus Residences in the future.
Welham® is a reputable real estate brand of Hong Kong with many success with a series of prestigious projects in Viet Nam such as Sơn Kim EXS Capital, VSP Việt Nam, Sheraton Hotel, and Le Meridian Hotel, in addition to The Costa Nha Trang, and Sai Gon Tower.
Lotus Residences, a luxury resort townhouse project at the prime Ha Long Marina Area, is a key project of Syrena Viet Nam. The project was started in May 2015, and consisted of 159 environment-friendly townhouses and amenities such as an all-season swimming pool, a park and a children’s playground.