BUSINESS IN BRIEF 29/3

Tra fish export price forecast to surge

Tra fish export price forecast to surge, More public, private firms partner on transportation, HCM City’s economy sees huge boost in first quarter, Chinese businesses sharply increase investment in Viet Nam, Banks scramble for G-bonds

The tra fish (pangasius) export price is forecast to rise between 20 to 30 percent in April in key import markets due to a lack of domestic supply, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

In the first two months of the year, China was Vietnam’s third biggest tra fish importer, following the US and the EU, with an increase of 33.3 percent in export value from the same period last year, accounting for 11.5 percent of the total tra fish exports.

The export price in the US is also expected to rise at the same rate, partly due to a rise in expenditures following recently approved inspection regulations issued by the US Department of Agriculture (USDA).

In the reviewed period, Vietnam saw a year-on-year increase of 8.3 percent in its tra fish export value, while output dropped 17 percent from the same period last year to 114,000 tonnes, the association said.

Material output recorded a year-on-year decrease of 40 percent, VASEP Vice President Duong Ngoc Minh said, adding that the trend will continue.

The limited supply can only meet the demand of the three key import markets – the US , the EU and China , Minh added.

Minh pointed to the cause of the drop in tra fish supplies, saying that many farmers and households stopped raising tra fish in July last year and shifted to other crops with higher domestic value.

Minh also called on the Government to offer incentives to the sector to ensure production in 2017.

The association plans to develop a number of measures and projects to improve tra fish quality and ensure sustainable production, according to Minh.

The efforts include ranking the sector’s enterprises, mapping out tra fish raising areas, restructuring the sector in the Mekong Delta and setting up an online Mekong Fish Market, Minh said.

According to the association, in 2015 the total tra fish export value reached 1.6 billion USD, 10 percent lower than in 2014.

More public, private firms partner on transportation

Vietnam is expected to attract a number of investors of transport infrastructure projects under the public-private partnership (PPP) model this year.

The My Thuan-CanTho expressway project in the Cuu Long (Mekong) Delta is one of the top of prospective PPP transport infrastructure projects in the number of interested and registered investors.

Nguyen Danh Huy, chief of the Ministry of Transport’s PPP Committee, said the 23.6 kilometre-long, four-lane highway that connects Tay Do (former Western city), at a cost of 6.62 trillion VND (296.1 million USD), has secured interest from nine local and international investor groups.

The groups are now waiting for approval from the Government.

These include several large investors and investor consortiums like Sovico-Imico-Pacific-Cienco 5; Thai Son (under the Ministry of Defense)-Yen Khanh-Cienco 1; Fecon-Coteccons; Infrastructure Development and Energy Investment JSC-IL&FS (India); Long Thanh Golf JSC, Cuu Long Corporation, and Bach Dang Corporation.

In addition to having the rights for toll collection for the stipulated period of 20 years and 11 months along the expressway, the developer will also gain toll collection rights at the HCM City-Trung Luong highway section for four years and 11 months starting in 2030.

Vu Xuan Hoa, Director of the Thang Long Project Management Unit that represents the MoT on project oversight, said with such support, My Thuan-CanTho expressway was the first highway project to be implemented under the PPP model with indirect state capital participation.

The MoT is set to complete the investor selection process and the signing of the investment agreement in the third quarter of this year.

If many investors pass the pre-qualifying round, there will be a bidding process, which will be completed before the end of this year’s fourth quarter.

Another PPP highway project attracting investors’ attention is the building of Ring Road No. 3’s TanVan-Nhon Trach elevated highway section in the southern province of Dong Nai (first phase).

The 17.84km-long, four-lane route will consist of two phases under the Build-Operate-Transfer (BOT) model.

The project has received investment proposals from a number of investors, including the CIPM-Phu Tho Infrastructure Construction Limited consortium, Licogi Corporation, the KEC-KUMHO consortium (the Republic of Korea), and Samsung Everland.

Nguyen Danh Huy, chief of the Ministry of Transport’s PPP Committee, said the project’s consultant unit expected to get overall approval from the authorised ministry last month, paving the way to start the prequalifying stage and hold the bidding process to select investors between now and the end of 2016.

The highway projects are on the list of 23 large-scale transport infrastructure projects to source investment capital outside of the state budget under the PPP and build-transfer (BT) models.

Of the total price tag of around 39.9 trillion VND (1.78 billion USD), 39.4 trillion VND (1.76 billion USD) will be investors’equity.

All these 23 projects are expected to break ground or will complete investor selection within this year.

Although these 23 projects have received investor proposals, the projects are still open to any investor with feasible investment plans, Huy noted.

Nguyen HongTruong, Deputy Minister of Transport, said the ministry would only consider investors with high capacity and reject weak investors.

The PPP committee also needs to propose policies to speed up implementation of PPP projects, he added.-

HCM City’s economy sees huge boost in first quarter

Socio-economic development in Ho Chi Minh City in the first three months of this year continues to show strong growth across fields, according to the municipal People’s Committee.

In the first quarter, t he gross regional domestic product (GRDP) was estimated at nearly 222 trillion VND (9.99 billion USD), a year on year rise of 7.1 percent.

Of the sum, services accounted for 57.7 percent, while industry and construction made up 27.7 percent and agriculture, 0.8 percent.

Retail and service revenues totalled more than 175 trillion VND (7.87 billion USD), an annual rise of 11.6 percent. Meanwhile, export turnover reached 6.7 billion USD, up 0.1 percent over the same period last year.

The industrial production index recorded an annual expansion of 5.72 percent, with prominent growths of beverage production (23.19 percent), non-metallic mineral exploitation (18.33 percent), mechanics (12.9 percent), and paper sector (10.2 percent).

Local authorities have so far this year granted new investment licenses to 158 projects worth 192.4 million USD, up 58 percent in the number of projects and down 66.3 percent in terms of capital.

Additionally, 39 existing projects increased their investment capital to 85.7 million USD.

According to the municipal Department of Finance, the city collected nearly 72 trillion VND (3.24 billion USD) to the State budget, up 0.92 percent over the same period last year.

The municipal People’s Committee forecasted that the city is likely to reach higher growth in the next quarter thanks to facilitations of the State’s policies and the global market’s stable growth.

In the coming time, the local authorities will intensify measures to realise economic development targets, focusing on bettering the local investment climate, promoting production and business and market management, said Su Ngoc Anh, Director of the municipal Department of Planning and Investment.

To support local businesses in the process of international integration, direct dialogues between enterprises and the municipal authorities will be arranged, thus timely taking measures to help solve difficulties facing enterprises as well as updating information related to free trade agreements joined by Vietnam.

Creating the most favourable investment environment for investors and businesses will help the city achieve higher growth, said Nguyen Thanh Phong, Chairman of the municipal People’s Committee.

Chinese businesses sharply increase investment in Viet Nam

Investors from mainland China have been developing their businesses in Việt Nam to take advantage of free trade agreements (FTAs), as the country is a Trans-Pacific Partnership member.

According to the Ministry of Planning and Investment’s Foreign Investment Agency, Chinese businesses had sharply increased their investment capital from $312 million in 2012 to $2.3 billion in 2013 and $7.9 billion in 2014.

Currently, some 1,346 Chinese projects are in operation in Việt Nam, with total registered capital of US$10.4 billion, making China the 9th  largest investor of the 112 nations and territories investing in the country.

The Chinese projects are each worth $7.7 million on average, half the average value of foreign investment projects in Việt Nam.

Data released by the planning and investment ministry’s Foreign Investment Agency showed that Chinese businesses had been focusing on investments in processing and manufacturing industries in Việt Nam, with 916 projects worth $5.38 billion, accounting for 68 per cent of the total number of Chinese projects in Việt Nam. Other Chinese projects are being conducted in production lines, electric distribution systems, gas, water and air conditioners.

The businesses have invested in 54 of the total 63 cities and provinces nationwide, concentrating on areas with good infrastructure that are close to the Việt Nam–China border or where many Chinese live, such as in the northern provinces of Lào Cai, Quảng Ninh and Hải Phòng and in HCM City.

The southern province of Bình Thuận has attracted the highest investment capital from Chinese businesses, with more than $2 billion spread over five projects. It’s followed by southern Tây Ninh Province, with 36 projects worth $1.2 billion, and northern Hà Giang Province, with five projects worth more than $1 billion.

By the end of 2015, Việt Nam had invested in 15 projects in China, with total registered capital of more than $16 million, focusing on production and service. This included the $3 million project to construct a trade centre by Việt Trang Import-Export Joint Stock Company and the $6 million workshop for the production and trade of weighing scales.

Speaking at a Việt Nam–China business forum held in Hà Nội earlier this year, Deputy Head of the Việt Nam Chamber of Commerce and Industry’s International Relations Division Phạm Quang Thịnh said when the TPP agreements were fully approved, Việt Nam was recognised as a gateway to enter the markets of ASEAN members and the rest of the world due to its geographic advantages and dynamic economy.

$117.6 million Samsung extension to support Vietnam operations

Samsung SDI Vietnam Co., Ltd. (SDIV) has been licensed to add $117.6 million to its existing  mobile phone battery production factory in Que Vo industrial park in the northern province of Bac Ninh.

The added-capital project aims to meet the increasing demand for mobile phone batteries at Samsung’s factories in Bac Ninh and Thai Nguyen provinces.

SDIV was licensed in 2009 with the total capital of $123 million. The factory started operation in January 2010, specialising in manufacturing mobile phone batteries for Samsung and Nokia.

Samsung has seven other factories at the 110-hectare Samsung complex in Bac Ninh, with two assembling cell phone factories, one vacuum cleaner producing factory, and four facilities manufacturing LCD displays, cameras, and mobile phone cases.

Disbursement deadline for home loan program may be extended

The State Bank of Vietnam (SBV) has said it will ask the Prime Minister for approval to extend the disbursement deadline for the VND30-trillion home loan program after the May 31 deadline.

The central bank said in a statement on March 23 that it would suggest refinancing participating banks in the program so that they could continue disbursing low-interest loans for individual and household borrowers to acquire, build or upgrade homes after the deadline.

As reported by local media, many borrowers have expressed concern since they are not aware that they will have to pay a normal interest rate instead of 5% per year for the disbursements from June 1.

The central bank said it did consider the refinancing period of a maximum of 36 months, adding the implementation process indicated that all targets set for the program were met.   

However, given the outcry of homebuyers, the Ministry of Construction and the HCMC Real Estate Association (HoREA), the SBV governor petitioned the Prime Minister to give full support to homebuyers eligible for the program to harmonize the interests of the citizens and the State.     

As of March 10, banks had pledged around VND30.12 trillion (US$1.3 billion) in loans for 46,246 customers, with over VND21.32 trillion of it disbursed.

The SBV refinances participating banks based on their outstanding loans in this program.

Banks scramble for G-bonds

Banks and insurance companies have been rushing to buy Government bonds with tenors of less than five years, helping the State Treasury almost achieve the quota for sale of short-term debt.

The Hanoi Stock Exchange (HNX) has seen bustling G-bond trading since early this year, with nearly VND69 trillion (US$3 billion) worth of bonds sold by March 24. This year, the State Treasury plans to raise VND220 trillion from G-bond sales.

The northern exchange has reported the winning ratio of 96.6% this year, well above 50.8% in January. Investors are fond of bonds with tenors ranging from three to five years.

At the session on March 23, the HNX raised VND7.9 trillion out of VND9 trillion put up for sale, including VND2 trillion of three-year bonds, VND6 trillion of five-year bonds and VND1 trillion of 15-year bonds.

Up to 13 investors bid for over VND4.4 trillion worth of three-year bonds, offering coupons of 5.5-7% a year. Closing the day, VND2 trillion worth of bonds was sold at the winning coupon of 5.53% a year, 0.02 percentage point lower than in the session on March 9.

Meanwhile, some 15 investors bid for more than VND10.1 trillion worth of five-year bonds with coupons of 6.27-7.2%. The HNX mobilized VND4 trillion worth of five-year bonds with the winning coupon of 6.35% a year, up 0.02 percentage point versus the previous auction on March 16.

According to credit institutions, the State Treasury will finish the sale scheme for bonds of less than five years soon, which account for 30% of the VND220-trillion debt sale target. Banks are scrambling for G-bonds given their ample capital, small disbursements of loans in the first quarter and need to improve liquidity.

As a result, the winning coupon of five-year bonds has dropped to a nine-month low while that of three-year bonds has fallen to a four-month low. However, bond coupons are unlikely to drop further as banks are going to spur lending to meet credit growth goals.

Trading on the secondary market has also turned active as foreigners have stayed on the buying side. Circular 36 easing regulations on foreign banks’ G-bond holdings and the stable domestic currency have encouraged foreigners to buy bonds.

Japan firms bemoan food safety rules

While Japanese food and agricultural businesses are complaining that they are coping with a slew of problems with food safety rules and import procedures, Vietnamese authorities say the procedures have been streamlined and problems have been solved.

Japanese firms and local management agencies expressed clashing views at a meeting held by the Japan External Trade Organization (JETRO) in HCMC on March 23.

Japanese firms said the fee and inspection time for processed food and additives do not comply with the prevailing regulations, and that the higher fee they pay, the faster procedures are handled.

When registering to launch packaged processed food, the fee is VND150,000 and a license is granted within 15 days. However, Japanese enterprises said at the meeting that the time they have to wait to get a license depends on the amount of money paid, with 1-2 weeks for a fee of US$180-250 and longer for a normal fee which is lower.

Nguyen Hung Long, head of the Vietnam Food Administration, said the agency has an online system for enterprises to complete procedures. If all necessary documents are submitted, enterprises will be notified of licensing dates and contact persons.

Besides, the fee can be paid electronically and there is no direct contact between officers and enterprises, so an informal fee payment is impossible.

Long said complaints of Japanese enterprises are unclear as they did not provide information about persons who collected informal fees and the way such fees are paid. Perhaps, they hire agents to carry out such procedures, resulting in high service costs.

Import procedures of meat products, according to Japanese enterprises, are too complicated and time-consuming, leading to high costs. The slow procedures affect the quality of products as well.

Therefore, enterprises expect procedures for such imports to be more flexible and the results of tests in Japan to be recognized in Vietnam. In addition, Vietnam should consider taking random tests to save time and ensure the quality of products.

In response to Japanese businesses, a representative of the Animal Health Department said the quarantine duration of meat products is seven days and procedures have been improved considerably since 2007.

A representative from the General Department of Customs also said procedures have been simplified significantly.

Bayer Fruit Grower Club launched Bayer Fruit

Bayer Vietnam on March 24 launched its Bayer Fruit Grower Club, a model which is aimed at enhancing the competitiveness of Vietnam’s fruit production, following the success of the Bayer Coffee Grower Club.

Held at its production site in Dong Nai Province’s Bien Hoa City, the launching event was attended by more than 120 key fruit growers from the Mekong Delta and southeastern areas, who are also official members of the Bayer Fruit Grower Club. The club is a playground for members to share knowledge and best practices on innovative crop solutions to increase yields and quality of fruit sustainably in the country.

As the country is on the way to integrate further in the global economy by joining the ASEAN Economic Community (AEC) and the Trans-Pacific Partnership (TPP), Bayer Vietnam wants to help local farmers make use of the great business opportunities and improve the competitiveness of Vietnamese agricultural products in the regional and global markets, it said in a statement.

Vietnam is a country with great potential for fruit production sector development. There are more than 800,000 hectares under fruit cultivation in Vietnam, including 70,400 hectares of citrus, 85,200 hectares of mango and 45,000 hectares of dragon fruit, according to 2013 data. Citrus, mango and dragon fruit are of high economic value and hold big export potential.

The AEC, TPP and other free trade agreements (FTA) have opened up a slew of opportunities for the fruit production and export sector in Vietnam thanks to low or zero tariffs.

However, Vietnamese fruit growers have been facing challenges, such as stricter international agricultural product standards and regulations, demand for clean production and sustainable raw materials and supply of fresh and high-value farm produce at reasonable prices. This is therefore an urgent need for farmers in Vietnam to increase the output and quality of fruit in a sustainable manner to compete on global markets.

In this context, the launch of the Bayer Fruit Grower Club is to equip Vietnamese fruit growers with advanced farming technologies for sustainable fruit production. The Bayer Much More solutions, which have been applied to rice and coffee, will continue as a sustainable agricultural model dealing with fruit diseases, pests control and weed management.

Bayer is a global company with core competencies in the life science fields of health care and agriculture. Its products and services are designed to benefit people and improve the quality of people’s lives.

VFA: Enough rice for export despite drought, salinity

The Vietnam Food Association (VFA) believes that this year’s rice supply will be still high and sufficient for export though drought and salinity have taken a heavy toll on rice production in the Mekong Delta.

Huynh The Nang, chairman of VFA and general director of Vietnam Southern Food Corporation (Vinafood 2), said the nation is expected to have 8.64 million tons of rice for export this year, including 3.87 million tons of rice harvested in the 2015-2016 winter-spring crop, 2.89 million tons of rice in the 2016 summer-autumn crop, and 1.08 million tons of rice in the 2016 autumn-winter crop.

This is good news for the rice export sector this year when the Mekong Delta, the country’s key rice growing area, is struggling with drought and salinity. Nang said the volume will be used to fulfill the orders for 750,000 tons of rice carried forward from last year.

According to statistics of the Cultivation Department under the Ministry of Agriculture and Rural Development, around 140,000 hectares of the 2015-2016 winter-spring crop in the delta has been damaged. Meanwhile, the ministry said around 500,000 hectares, or 30% of the rice farming area, would not be sown with paddy grains as usual in the summer-autumn crop in the region due to drought and salinity.

Last year, Vietnam shipped abroad around 8.1 million tons of rice via both formal and informal channels. Thus, this year’s rice shipments would be half a million tons higher than last year.

VFA expects 3.1 million tons of rice will be exported in the first half of this year and the volume does not include rice sold via border trade. Of the volume, some 1.3 million tons of rice will be exported in the first quarter, 100,000 tons higher than the initial plan and up 56% against the same period last year, and some 1.8 million tons of rice in the second quarter, equivalent to the last year’s same period.

Le Thanh Tung from the Cultivation Department forecast that this year’s rice output would be equal to that of last year. The agency has plans to balance rice supply and demand in the 2016 summer-autumn and autumn-winter crops.

According to Tung, the total rice volume for export will be announced at a conference held on March 25 to review the 2015-2016 winter-spring crop and deploy plans for the 2016 summer-autumn crop.

Meanwhile, a leader of the agriculture sector in the Mekong Delta said the rice volume for export would not be as ample this year as in previous years due to the severe impact of drought and salinity. If demand outpaces supply on the domestic market, prices would surge.

Salinity sends shrimp farming area in Mekong Delta down

The shrimp farming area in the Mekong Delta region has contracted this year compared to last year as many farmers are reluctant to raise the crustacean for fear of saltwater intrusion wreaking havoc on their farms.

Nhu Van Can, head of the aquaculture division at the General Department of Fisheries, said as of last month the brackish water shrimp farming area in the Mekong Delta had dropped by around 20% year-on-year to 368,000 hectares, including 358,000 hectares of tiger prawn (down 13.4%)and 9,740 hectares of white-leg shrimp (down 27.5%).

Can told a recent conference on solutions for the aquaculture sector in the Mekong Delta to adapt to salinity that farmers have reduced the shrimp farming acreage due to drought and salinity that have taken a heavy toll on agriculture in the region.

The General Department of Fisheries reported at the conference that the calamity has not caused big losses to shrimp farms in the Mekong Delta. Leaders of the agriculture departments in some provinces said a number of shrimp farms have harvested high yields.

Quang Trong Thao, deputy director of the Kien Giang Department of Agriculture and Rural Development, said shrimp has been raised on a total of 102,000 hectares in 2016 and many farms have started to harvest shrimp for sale.

Thao said around 10,000 hectares of shrimp was damaged by drought and salinity at this time in previous years but the damage is insignificant this year.

Shrimp farms in other provinces such as Ben Tre and Bac Lieu are still safe from drought and salinity though the shrimp farming process in these localities is slower than in the previous years due to the impact of the calamity.

Regarding shrimp supply for export this year, Thao said it would be enough or even higher than in previous years thanks to high prices which attract more farmers to shrimp farming.

The price of unprocessed tiger prawn is put at VND300,000 (US$13.5) per kilo while a kilo of white-leg shrimp is sold at around VND100,000 (US$4.5), Thao said. He added that farms have not suffered from diseases this year.

In addition, enterprises have invested in technology to increase yields of shrimp farms. As a result, a one-hectare farm can produce 30 tons of shrimp per crop.

Le Van Quang, chairman and general director of Minh Phu Seafood Group, said data showed this year’s shrimp output will be equal to that of last year. Some international organizations forecast shrimp output in Vietnam to reach 300,000 tons this year, up 5-7% from last year.

Vietnam’s CPI up 1.25 pct in first quarter

Vietnam’s first quarter Consumer Price Index (CPI) increased by 1.25 percent from the same period last year.

The General Statistics Office (GSO) announced on March 24 that CPI in March was up 0.57 percent from the previous month and 1.69 percent from 12 months ago.

Vu Thi Thu Thuy, head of the GSO’s Price Statistics Department said the highest growth seen in prices of medicine and health care services at 24.34 percent, followed by education at 0.66 percent.

Meanwhile, price declines were recorded in nine groups of goods and services, including transportation at 3.64 percent, beverages and tobacco at 0.54 percent, restaurant and catering services at 0.48 percent.

The CPI in March, which usually falls due to low demand after the New Year (Tet) festival, grew slightly this year because of the surge in the prices of medicine and health care services, Thuy said.

Cement firms face hard competition

Domestic cement companies would face stiffer competition in consumption in markets at home and abroad in the future, experts said.

At present, the total capacity of all cement factories in Vietnam is 81.5 million tonnes per year, according to the Ministry of Construction. This year, the local market was expected to consume between 75 million tonnes and 76 million tonnes of cement, which is three million tonnes more as compared to last year.

Therefore, the domestic cement producers would face over supply and that situation has forced the producers to seek solutions on selling more cement in markets at home and abroad.

In 2013 and 2014, it was a difficult period for all domestic producers as well as the local cement industry due to the impact of the frozen domestic real estate market. The cement industry’s exports reached a record high at 21 million tonnes of cement in 2014, earning 900 million USD.

However, the cement exports in 2015 dropped by 20 percent year-on-year to 16.25 million tonnes. The reduction in exports was expected to continue this year, the ministry said.

According to Vietnam’s General Department of Customs, the largest export market of Vietnam’s cement was Bangladesh, but Vietnam’s clinker exports to Bangladesh in 2015 also dropped by 30 percent against 2014.

Le Van Toi, head of the Building Material Department under the Ministry of Construction, said Vietnam’s cement firms would face numerous difficulties in consumption this year due oversupply and high competitive pressure from foreign cement companies, especially in China and Thailand.

The pressure will occur when Vietnam joins the ASEAN Economic Community (AEC), according to experts of the cement industry.

Vietnam has the largest cement industry in ASEAN with 58 cement factories and a total capacity of 81 million tonnes of cement per year. Thailand has 11 cement factories with a total annual capacity at 46.7 million tonnes.

However, Thailand has exported an average 34 million tonnes of cement per year, while Vietnam had a record export volume of 21 million tonnes of cement in 2014, 13 million lower than Thailand’s volume, the experts said.

In addition, Thailand’s cement entered the world market long time before Vietnam, which started exporting cement and clinker from 2010 after many years of importing cement. Therefore, Vietnam’s cement producers have still had a poor experience in exporting cement and attracting foreign importers.

More advantages of Thailand’s cement products on the world market include quality and quicker transport. Foreign importers have also preferred traditional partners such as Thailand, they said.

Vietnam’s cement would also be competing with Chinese firms, the experts said, because total cement output in China reaches 670 million tonnes after a period of strong development in China’s cement industry. Chinese cement factories could promote exports in the future.

Tran Viet Thang, General Director of the Vietnam Cement Industrial Corporation, said sometimes, Vietnam’s export price of cement was 10 USD per tonne higher than the Chinese cement, so the export of 25 million tonnes this year would be more difficult, the Tin tuc newspaper reported.

Therefore, if not exporting cement, many local enterprises could produce in moderation or even temporarily stop production, he said.

The enterprises should pay more attention to the local market but the market was expected to not see a sudden increase in consumption in the future, he said.

Director of Vicem Hoang Thach’s Consumption and Service Enterprise Nguyen Anh Quan said that to deal with the pressure of competition in cement consumption, Vicem Hoang Thach, one of the leading cement enterprises in Vietnam, has continued to expand its markets and also developed industrial cement products to balance consumption and production.

Industrial producer price index contracts 0.73 percent in Q1

Vietnam’s producer price index (PPI) in the first quarter of the year tapered off 0.73 percent from the previous quarter and 1.01 percent down against the same period last year, according to the General Statistics Office (GSO).

The GSO attributed the slowdown of the industrial PPI to the curse of falling crude oil and iron ore prices.

Alongside this, low demand for electricity consumption during winter also caused a slump in power prices, which led indusial production prices to drop in the quarter.

During the three-month period ending in March, reduction in prices was seen in mining products (3.9 percent), processing-manufacturing products (0.13 percent) and power production and distribution (1.35 percent).

In contrast, the price index for the sector producing clean water and treating waste water expanded 0.41 percent against 2015’s Quarter 4.

Vietnamese rice seeks to set foot in French market

Representatives from 27 Vietnamese rice exporters and producers had a working session with France’s leading retailer Auchan to enquire about the group’s rice import demand for supply in the country and other EU nations.

Fredecric Yu, who is charge of Auchan’s goods import section, introduced Vietnamese businesses to types and quality standards of farm commodities currently imported by his firm.

France is one of the large rice consumers in Europe, with an annual consumption of about 240,000 tonnes, he said.

He advised the Vietnamese businesses to deeply understand the habit and taste of French people, as well as issues related to the market’s demand if they are interested in making inroads into the market.

At present, France mainly imports rice from India, Thailand and Cambodia. Apart from rice, the market has demand for rice flour as well.

Vietnam’s rice has not been popular in France, and Vietnamese rice producers have yet to build their trade name in the market.

Fredecric Yu stressed that fragrant rice of Vietnam will absolutely get a foothold in France if the quality is guaranteed.

Vietnam firms’ representatives showed their concern about higher tax levied on Vietnamese rice than Thailand’s and Cambodia’s in the French market.

According to General Secretary of the Vietnam Food Association Huynh Minh Hue, Vietnam ships about 7-8 million tonnes of rice to foreign markets every year, mainly to Asian countries.

Vietnam’s participation in bilateral and multilateral free trade agreements opens dozens of opportunities for Vietnam’s rice to enter in large-demand markets, he said, adding that this helps improve the value of the farm produce.

To expand export to high-demand markets in the coming, Vietnam needs to pay special attention to ensuring food safety and quality of its products, Hue said.

New delta co-operative project approved

The Prime Minister has approved a project for three new farm co-operative models for rice, aquatic products and fruit in the Cuu Long (Mekong) Delta by 2020.

The project aims to promote connections between co-operatives and farmers, as well as improve the conditions of local people. It will be carried out in three phases in the Delta’s 13 localities.

The first phase, which begins this year and will end in 2017, will evaluate the Delta’s existing co-operatives based on the 2012 Co-operative Law and reorganise them according to the region’s three key products. Establishing new co-operatives is another task of the project.

The second phase, to end in 2018, is for implementation of a model of provincial co-operative unions for each product, while the last phase is for establishing co-operative unions for the region.

Local authorities are in charge of encouraging individual farmers and farming households to join the co-operatives.

They are also responsible for working with the co-operative to find ways to generate more capital to promote their operations.

After two years of implementing the project, the Ministries of Agriculture and Rural Development, and Planning and Investment will work with the Southwestern Region Steering Committee and the region’s provincial authorities to review the work and create a plan to expand new co-operative models across the country.

Vietnam Airlines expects greater presence in Philippines

The representative office of the national flag carrier Vietnam Airlines has recently held an event to promote the company’s activities and seek greater market share in the Philippines, in Manila.

The event saw the participation of some of the carrier’s major partners such as Airesources Inc., along with travel agents.

Speaking at the event, Vietnamese Ambassador to the Philippines Truong Trieu Duong praised the carrier’s efforts in asserting its position in the foreign market to meet increasing travel demand between the two countries.

The ambassador said the establishment of a convenient and prompt flight route is essential to strengthen the newly formed strategic partnership and foster economic development between the two countries.

Head representative of Vietnam Airlines in the Philippines Hoang Huu Ky and Maria Teresa Escalona, representative of Airerources Inc. told the participating enterprises and travel agents about the potential opportunities of working with the carrier.

Livestock, aquaculture expo in HCM City

Technologies, equipment, products and services related to the livestock breeding, dairy, meat processing and aquaculture industries are on display at a biennial exhibition that opened in HCM City on March 23.

The 2016 International Livestock, Dairy, Meat Processing and Aquaculture Expo (ILDEX Vietnam) has attracted 205 exhibitors from 30 countries and territories, 30 percent more than in 2014, Nino Gruettke, Managing Director of VNU Exhibitions Asia Pacific, one of the organisers, said.

The expo would also feature several conferences providing in-depth coverage of the current and future livestock industry, highlighting specific areas of growth as well as the latest technology developments, he said.

Speaking at the opening ceremony, Hoang Thanh Van, Head of the Ministry of Agriculture and Rural Development’s Animal Breeding Department, said the exhibition would offer industry professionals the chance to learn about new technologies, network and explore business opportunities.

It is also a good chance to showcase the local livestock sector to attract more investment, he added.

The exhibition at the Saigon Exhibition and Convention Centre will run until March 25 and expects to attract 9,000 visitors.-

Vietnam promotes tourism in Russia

Vietnam is taking part in the 23rd Moscow International Travel and Tourism (MITT) Exhibition which opened in Russia on March 23.

The Vietnamese pavilion run by the Vietnam National Administration of Tourism (VNAT), the national flag carrier Vietnam Airlines and eight travel companies covers an area of 72 square metres.

A traditional art performance staged at the booth has drawn scores of foreign visitors to explore tourism in Vietnam.

A video featuring beautiful landscapes in Vietnam was screened at a press conference held on the first day of the MIT to promote local tourism among international friends.

Representatives from VNAT plan to meet with partners from other countries’ tourism management agencies, Russian tourism associations and international businesses.

Deputy Director of the VNAT Nguyen Quoc Hung said Vietnamese businesses are launching a number of promotion packages to lure more Russian tourists to Vietnam this year in the context of diminishing number of Russians travelling abroad.

He added that the VNAT along with the Vietnam Tourism Association and businesses have held some promotion programmes in Moscow, St. Petersburg and other Russian cities.

Vietnam aims to welcome 400,000 Russian tourist in 2016 and 1 million in 2020.

The annual MITT Exhibition is the biggest of its kind in Russia and fifth largest tourism event in the world.

Rice exports less competitive

Local rice exporters have offered a higher export price due to price rise in the domestic market, thereby losing the advantage in the competitive world market, said experts.

Việt Nam’s rice exporters have increased prices between US$380 and $390 per tonne of 5 per cent broken rice, and between $365 and $375 per tonne of 25 per cent broken rice, while rice exporters in other regional countries have retained their current prices.

Nguyễn Văn Đôn, director of Việt Nam Ltd Company in Tiền Giang Province, said rice prices on the domestic market had been raised at frequent intervals recently because of the impact of El Nino to the Cửu Long River Delta region and the increased demand for rice in border regions, Vietnamplus reported.

As rice prices increased in the domestic market, the enterprises hiked the offer price for export rice by between $5 and $10 per tonne to between $365 and $390, but the prices were $10 to $20 higher than the acceptable buying price, and between $10 and $15 more than the export price of Thai rice, he said.

Huỳnh Thế Năng, chairman of Việt Nam Food Association (VFA), said Việt Nam’s rice export prices were much higher than average export price on the world market so Vietnamese rice has lost its sheen.

Now, as the price is rising, rice exporters will find it more difficult to sign contracts with high volumes, according to some exporters.

So, most exporters have purchased rice from the market to fulfil contracts that they signed before domestic prices increased. Some rice exporters could face losses because they signed contracts when prices were increasing in the domestic market, the association said.

By March 15, Việt Nam exported 1.1 million tonnes of rice, earning $475 million doubling volume and value against the same period last year, the association said.

The VFA anticipates that exports would reach 1.3 million tonnes in the first quarter, 56 per cent up from the same period last year.

HCM City reports growth amid international integration efforts

HCM City’s economy underwent significant improvement during the first quarter of 2016 thanks to the administrative effort to adapt to the country’s period of global integration.

During a meeting held yesterday to review the city’s socio-economic situation, Nguyễn Hoàng Năng, director of HCM City’s Department of Planning and Investment, said the city’s GRDP of VNĐ221,816 billion (US$10 billion) showed growth at 7.1 percent against the same period last year of 6.9 percent.

According to the city’s Department of Planning and Investment, roughly 60 percent of the city GRDP was contributed from the service sector.

The city’s total export turnover was US$6.7 billion and import turnover 7.9 billion.

There was growth in the city’s main export markets, including China (26.5 percent), Hong Kong (10.3 percent), Indonesia (308.9 percent), Netherlands (26.6 percent), and Philippines (36.1 percent). Exports increased in categories including seafood, coffee, electronic products and spare parts.

The Consumer Price Index in March increased 0.09 percent against February and increased 0.64 percent against the same period last year. The CPI growth of last year’s first quarter was 0.74 percent.

In order to reach the achievement, the city government began several trade promotion programmes to expand domestic and foreign markets.

For domestic investment, the city government granted investment licenses to 6,987 new enterprises with total investment fund of VNĐ61,672 billion ($2.8 billion).

Combining the increased investment fund of 10,017 enterprises, the total investment fund of domestic enterprises in the city during the first quarter was VNĐ83,630 billion ($3.8 billion).

The city also granted investment licenses to 158 foreign direct investment projects with total investment fund of US$192.4 million, an increase of 58 percent compared with the same period last year.

At the meeting, Nguyễn Thành Phong, chairman of HCM City’s People’s Committee, said the city’s socio- economic situation had undergone positive development in all areas during the past months.

Thái Thị Bích Liên, chief officer of HCM City’s Party Committee, said after one month of operation, the hotline 0888247247 received 5,933 calls from the public.

Of the calls, 3,480 calls were opinions and complaints to the city’s leaders. Most were about document processing, social welfare, State management, and urban management, among others.

Liên said that the hotline indicated the city’s Party Committee and government listened to the public about the city’s socio-economic development.    

Da Nang, Yokohama eye further cooperation

Representatives from the cities of Da Nang and Japan’s Yokohama have agreed on an extension of the Memorandum of Understanding on technical co-operation in urban development to 2016-19.

The memorandum, which was inked by the two cities in 2013, has helped the central city in eco-friendly development, education, science, economics, the environment and investment.

As scheduled, the extension agreement will continue the co-operation between the two cities in investment promotion, urban management, an eco-city development, sustainable urban development and also calls for support from the Japanese International Co-operation Agency (JICA).

Director of the International Technical Co-operation Division, Policy Bureau in Yokohama City, Nakajima Tetsuya said the memorandum will help Da Nang deal with the challenges of urban development in the future.

‘We’ll help the city with its target of becoming a key economic zone in the central region, a competitive city in comparison to Ha Noi and HCM City. The memorandum also focuses on links between Da Nang and other cities in the region and the sub-Mekong region as well,” Nakajima Tetsuya said.

“We also agreed on developing an urban model of Da Nang that is based on strategic infrastructure including a North-South key mass transport system with Light Rail Transit (LRT) and Bus Rapid Transit (BRT),” he said.

He said Da Nang should grow as a key centre of hi-tech and environment-related industries in the central region.

A coner of Da Nang City. Director of the International Technical Co-operation Division, Policy Bureau in Yokohama City, Nakajima Tetsuya said the memorandum will help Da Nang deal with the challenges of urban development in the future.

Iwata Shizuo, an expert from JICA, suggested that Da Nang should promote Public Private Partnerships (PPP) in developing future urban areas.

Chairman of the Da Nang City’s People’s Committee, Huynh Duc Tho, said the city gave top priority to co-operation with Japanese partners, and that the memorandum would help to entice more investors from Japan to Da Nang in the coming years.

He said the city would create favourable investment conditions, such as a one-stop shop for procedures Japanese investors would need to fulfill.

Da Nang has attracted 305 foreign investment projects worth US$3.37 billion, of which 89 projects worth US$378 million were from Japan.

Exports from Japanese enterprises accounted for 37 per cent of the city’s total imports, while 30 per cent of the city’s industrial production value comes from Japanese foreign direct investment projects.

Last year, the city’s investment promotion centre also debuted its Da Nang Japanese Desk team, which will be available every Wednesday to support Japanese investors by explaining administrative procedures, investment licenses and priority policies, among other things.

The city planned to build an industrial park spread over 134ha for medium and small-size businesses from Japan.

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

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