BUSINESS IN BRIEF 6/1

SBV asked to support prioritised sectors

SBV asked to support prioritised sectors, Trade with UK continues to grow after Brexit, Vietnam's economy predicted fast growth, Toyota Motor Vietnam introduces new president and vice president

Prime Minister Nguyen Xuan Phuc has directed the State Bank of Vietnam (SBV) to prioritise capital for sectors with great contributions to economic growth, export, and employment such as hi-tech agriculture, and small and medium-sized enterprises.

Addressing a SBV conference in Hanoi on January 5 to launch 2017 tasks, the PM asked large banks to help businesses reduce cost, while requesting commercial banks to develop preferential credit packages for hi-tech agriculture or a type of business needed support like tourism and aviation.

He highlighted that the banking sector plays as a blood artery of the economy, hailing its significant contributions the nation’s socio-economic growth in 2016.

By the end of 2016, the sector fulfilled all monetary targets set earlier. Total means of payment increased 17.88%, while total mobilized capital rose 18.38% over 2015.

Inflation was basically reined in, and kept at 1.87%, contributing to maintaining the yearly CPI at 4.74%, fulfilling the set target of keeping the figure less than 5% as set by the National Assembly.

Liquidity of the banking system was ensured, while the inter-baking system operated smoothly. 

After a rise of 0.2-0.3% in the first three months of 2014, the deposit interest rate was stable from April. Especially, a number of credit institutions even downed the annual deposit interest rate by 0.3-0.5% and lending interest rate by 0.5-1% per annum for prioritised sectors from September.

The PM lauded the central bank’s flexible and active management over monetary policies, attributing the success in keeping the inflation rate under 5% to the sound enactment of policies on managing State-managed goods prices and monetary governance policies.

The central bank’s prompt and suitable response also helped maintain macro-economic stability and ensure the operation of the system, he said.

However, the PM also pointed out a number of problems in banking activities, including high interest rate, high poor performing loans as well as poor performance of the system in tackling those loans.

The PM also voiced his concern about black market credits, especially in rural area, asking the SBV and localities to urgently co-work in communication activities for locals to gain thorough understanding.

He stressed that macro-economic stability continues a major task in 2017 and requested the SBV to take the pioneer role in implementing the goal by keeping inflation at under 4% and contributing to accomplishing the GDP growth target of 6.7%.

Along with managing the monetary policy in a flexible, proactive, and careful manner and closely following market fluctuations, the SBV should work to maintain the stability of the foreign exchange and gold markets, while increasing foreign currency reserve and maintaining the value of Vietnamese dong, he said.

The PM also asked the bank to improve the transparency of interest rates, while completing institutions and legal frameworks to better support the restructuring of credit organisations and ensuring safety for the banking system.

The SBV was also asked to coordinate closely with media agencies to popularise the monetary and macro-economic policies of the Party and State.

Trade with UK continues to grow after Brexit

Vietnam exporters shipments to the UK jumped 4.7% year-on-year to US$4.43 billion for the 11 months leading up to December 2016, showing Brexit had minimal impact on trade, Vietnam Customs has reported.

Telephones and components topped among export items to the UK tallying in at US$1.69 billion (up 7.3%), followed by garments with US$645.74 million (up 2.2%) and footwear with US$563.64 million (down 10.7%).

Products with high export growth included metals (up 149% to US$16.72 million), fruit and vegetables (up 47%), machines, equipment and tools (up 41.3%) and rubber (up 44.1%).

The UK has historically been one of the largest export markets in the EU for companies operating in Vietnam, said Vietnam Customs.

Vietnam’s economy predicted fast growth

Foreign economists say that Vietnam will continue to be an economic growth highlight in Southeast Asia.

 Malaysia’s online newspaper, The Star, wrote that Vietnam will maintain its high growth rate in 2017. 

The licensing of big companies, such as Samsung Electronics Co, has turned Vietnam into an electronics exporter. The Asia Development Bank (ADB) forecasts Vietnam’s economic growth rate this year at 6.3%.

Frederic Neumann, Co-head of Asian Economics and Managing Director of HSBC Hongkong (China) said Vietnam would enjoy fast growth in the next few years and expand its global export market. 

Bloomberg reported that shares in Vietnamese companies are valued higher than other Southeast Asian companies.
It’s time for foreign companies to invest in Vietnam as the Vietnamese government has accelerated the equitization of state-owned enterprises.

Viettel waives roaming fee for Indochinese country

Roaming fees will no longer be applied in Cambodia and Laos to mobile subscribers of Viettel and its subsidiaries.

Subscribers of Viettel in Vietnam, Metfone in Cambodia, and Unitel in Laos, all of which are managed by Vietnamese military-run telecom giant Viettel Group, will now only pay domestic fees for phone calls, text messages, and data service for using any of the three networks, regardless of their location within the Indochinese region.

Indochina is a geographical term referring to Southeast Asian countries Vietnam, Cambodia, and Laos, each of which was a French colony.

Specifically, Viettel users in Vietnam will be charged VND2,000 (US$0.09) per minute and VND500 (US$0.02) per text message when calling or texting Unitel or Metfone numbers.

The same rates apply to Viettel subscribers who travel to Laos or Cambodia and roam into Unitel or Metfone networks, and vice versa.

The previous roaming charges on the network of VND4,840 (US$0.22) per minute for receiving international phone calls have also been waived by the mobile network provider.

Viettel’s roaming data now cost VND200,000 (US$8.93) per gigabyte instead of the previous VND32.2 million (US$1,438) per gigabyte.

Over two million Viettel subscribers frequent Laos and Cambodia, but only 0.5% (nearly 10,000) use its roaming service, according to the company’s statistics.

Toyota Motor Vietnam introduces new president and vice president

Toyota Motor Vietnam (TMV) on Monday introduced its new management board including Toru Kinoshita as president and Do Thu Hoang as vice president.

The two succeeded Yoshihisa Maruta, former president, and Doan Thi Yen, former vice president, who had wrapped up their four-year term in the company (2013- 2016).

Toru Kinoshita, who was born in Fukuoka, Japan in 1964, graduated from Kyushu University, and joined Toyota Motor Corporation (TMC) in 1988. Since then, he has taken up many important positions in TMC.

Meanwhile, Do Thu Hoang, a 48-year-old Hanoi native, graduated from the National Economics University and experienced some jobs before joining Vietnam Engine and Agricultural Machinery Corporation (VEAM) in 2009.

Toru Kinoshita said in an induction ceremony that, “as a developing country, Vietnam is changing day by day, more modern and urbanized. But there is something unchanged in my feeling, that’s the friendliness of Vietnamese and the charming natural beauty of the country.

“I’m very happy and encouraged to start my new assignment with such a firm foundation and big support and friendship from all of you. I also understand there will be many challenges ahead, but with your precious support and cooperation I commit that I devote all my effort to contribute to the development of TMV, automobile industry and society.”

Hanoi sets export growth target at 5%

The capital city plans a 4%-5% export growth compared with last year.

The ambitious target was set despite difficulties faced by key export products, such as electronics, agricultural products, textiles and garments, due to the negative impact of reduced global consumption and the shock waves of Brexit on the European economy, which is a large export market for Vietnam.

According to the Hanoi Statistics Department, although the city made efforts to increase exports last year, they only reached US$10.6 billion in 2016, a year-on-year increase of 1.5%, far from the target growth rate of 7%-8%. The export of computer components and peripheral devices earned US$1.29 billion, 2.7% less compared with 2015.

The department’s director, Le Hong Thang, attributed the drop in export turnover to the adjustment of the VND/US dollar exchange rate and the euro, yen and yuan were devalued by 18%, 17% and 8%, respectively, to stimulate export and minimise import. 

Thăng said this had raised the price of raw materials and reduced consumption in the city’s export markets. Although banks lowered loan interest rates to 8%, they were still 2-4 times higher than loan rates in competing export countries.

Under fierce competition pressure in the context of globalisation and with the participation in free trade agreements (FTA), only capable businesses will be able to maintain operations. This is also an opportunity to wipe out weak companies, Thang said.

According to experts, exports from Vietnam and its capital city will continue experiencing difficulties this year, but companies that take advantages of the FTAs with the Republic of Korea, the EU and the Eurasian Economic Union, will have an opportunity to increase trade growth.

Tran Thanh Hai, deputy head of the Ministry of Industry and Trade’s Export-Import Department, said that in order to maximise FTA advantages, businesses must seek out bigger market shares of their goods.

Under the export plan for the 2016-20 period, with a vision to 2025, the city’s industry and trade sector will strengthen promotion activities, provide businesses with more information on markets and export products, Hai said. The city will open training courses for businesses to inform them of policies and regulations in Vietnam and other countries in the world. The information is designed to meet international commitments and overcome trade barriers.

The decisive factor in increasing competition capacity is applying advanced technologies, which will help business improve goods and service quality and reduce costs, said Hai.

More efforts urged to reorganise shrimp industry

According to the Vietnam Association of Seafood Exporters and Producers (VASEP) in 2016 Vietnam’s shrimp exports revenue reached US$3.1 billion, a year-on-year increase of nearly 4%.

Despite that significant growth, the shrimp industry has revealed a number of weaknesses and shortcomings.

The most worrying was the situation of chemical inputs into shrimp, which caused negative impact on the quality and credibility of export shrimp products from Vietnam. 

In 2016, in three provinces of Bac Lieu, Ca Mau and Kien Giang, responsible agencies have detected nearly 100 pumping contaminants cases, a two-fold increase year-on-year. 

Many businesses even raise investment in machinery to pump a large quantity of chemicals.

In addition, the shortage of electricity for production made many farmers use generators, pushing production costs while reducing the competitiveness of shrimp products. 

In particular, shrimp farming areas have revealed many shortcomings in planning and infrastructure, causing low yields and outputs. 

Specifically, in many areas, the irrigation systems are being used for both aquacultural production and agricultural production, leading to water pollution caused by plant protection products. 

Meanwhile, supervision of breeding shrimp production, as well as disease and environmental management, has yet to keep pace with the development of production.

Many localities have not even allocated funds for environmental monitoring and disease prevention for aquaculture breeding areas. 

This is also one of the reasons for the fact that in 2016, the entire Mekong Delta region saw more than 190 thousand hectares of shrimp deaths from natural disasters and epidemics, causing heavy losses to farmers and reducing the source of raw shrimps for exports.

It is required that the shrimp industry must be reorganised from production and processing to exports. 

Deputy Prime Minister, Trinh Dinh Dung had a recent working session with provincial leaders of Bac Lieu, Ca Mau, Soc Trang, Kien Giang and Tra Vinh on plans and strategies to foster the development of the sector, towards building a trademark for Vietnamese shrimp. 

It is also necessary that coastal localities, especially those specialising in farming shrimp, enhance cooperation in producing brackish water shrimp in order to improve product quality.

At the same time, the Ministry of Agriculture and Rural Development has designed a plan to monitor the production chain of safe shrimp for export, aiming to develop shrimp farms to the standards of the World Organisation for Animal Health and countries importing the product. 

The People’s Committees of major shrimp producing localities have been asked to make plans and allocate capital for the application of measures to prevent shrimp diseases, to create low-risk areas and shrimp farms with production chain compliant safety requirements. 

It is set that until the end of 2017, at least 10% of breeding shrimp farms producing over 1 billion post-larval shrimps each year will be recognised as safe farms. 

The plan also sets a goal of at least one farm recognised to have a production chain meeting OIE safety standards. The regulations of OIE and importing countries will also be popularised among enterprises, along with guidelines to reach the standards.

Shrimp breeding is not only considered a key export product in recent years, but also has brought higher income for farmers and created many jobs. Therefore, focusing on productivity and quality to enhance value for this sector is one of the pressing needs in the process of restructuring the fisheries sector.

Vietnam health ministry to inspect Masan Food

The Vietnamese Ministry of Health is poised to put two major fish sauce makers, Masan Food and Khai Hoan JSC, through a complete inspection next month, not long after a ‘toxic fish sauce’ scandal unnerved local consumers.

The inspection is scheduled for after the Lunar New Year holiday, which begins on January 28 and lasts for one week, it said on January 4.
Masan Food, a subsidiary of private consumer giant Masan Group, is considered a dominant force in Vietnam’s fish sauce market with its Chin-su and Nam Ngu brands.

Khai Hoan JSC, headquartered on the southern island of Phu Quoc, is known for its Ong Ky Fish Sauce trademark.

Masan Food is also behind Tam Thai Tu, a soya sauce brand, and instant noodle brands Omachi and Tien Vua.

An official from the health ministry’s inspectorate told Tuoi Tre(Youth) newspaper that the inspection order also applies to subsidiaries of the two companies, bringing the real number of fish sauce makers expected to be inspected to more than ten.

The health inspectorate did not elaborate on why they chose to start the New Year by examining the fish sauce companies, though a recent high-profile scandal involving the safety of traditional Vietnamese fish sauce is still fresh in the minds of the public.

In October 2016, the Vietnam Standards and Consumers Association (Vinastas) announced that it had tested fish sauce samples from 88 local businesses and found that nearly 85% were above the national limits for “total arsenic content.”

While arsenic exists in organic and inorganic form, only the latter is toxic – a detail intentionally withheld from the Vinastas report which left consumers unaware of the difference between “total arsenic” and “inorganic arsenic,” panicking them and the whole industry.

The survey results were later identified as misleading and the cause of false fears among the public. Vinastas made a public apology and rectified false information.

The false claims in the report also tricked fifty news outlets into running stories about unsafe fish sauce, scaring local consumers who use traditionally made fish sauce rich in organic arsenic on a daily basis.

A controversial ad published by Thanh Nien (Young People) newspaper, an outlet which also ran misleading stories and surveys which fueled public fear, stated that the mass-produced Chin-su and Nam Ngu sauces were safe in terms of arsenic content.

It was later confirmed that T&A Ogilvy JVC Ltd. commissioned Vinatas to carry out the survey.

In the aftermath of the scandal, Thanh Nien was fined VND200 million (US$8,929), while the other 49 media outlets were fined between VND10 million (US$446) and VND50 million (US$2,232).

After the fish sauce companies, the health inspectors will continue to look into major dietary supplement producers.

Last year they inspected four leading beverage makers, Coca-Cola Vietnam, Suntory PepsiCo Vietnam Beverage, Wonderfarm and URC Vietnam Co. Ltd., and imposed fines totalling more than VND6 billion (US$267,857) for several production violations.

Another hydroelectric plant ready to connect with national grid

The Krong No 2 hydroelectric plant will be inaugurated on January 7, according to the Trung Nam Group – the project’s investor. 

Located in Da Tong commune, Dam Rong District, the Central Highlands province of Lam Dong, the plant has total investment of 2,017 billion VND (equivalent to 89 million USD). 

With a designed capacity of 30MV, the plant will provide 105.8 million kWh to the national gird a year.

The Trung Nam Group has invested in numerous energy projects including the 70-MW Dong Nai 2 hydroelectric plant and the Trung Nam wind power farm in Ninh Thuan province.

Vietnam moves to improve equitisation transparency

In a new move, the Government has announced the rate of State-ownership in firms that are set to be equitised, instead of fixing the rates by sectors as usual.
It has also issued a list of 103 State-owned enterprises (SOEs) in which the State will hold a 100 percent stake and another 137 that will be equitised in the 2016-20 period.

Among those that are to be equitised, the State will hold over 65 percent of the charter capital in four, and 50-65 percent in 27, and below 50 percent in 106 SOEs.

The State will retain full ownership in SOEs operating in sectors like national defence and security, nuclear power and money printing.

The new lists and other provisions are contained in Decision No 58 issued on the very last day of 2016 to replace the Decision No 37/2014/QĐ-TTg dated June 18, 2014, and will take effect on February 15 this year.

Dang Quyet Tien, deputy director of the Ministry of Finance’s Corporate Finance Department, welcomed the decision saying that it proves the Government’s determination to improve transparency and effectiveness of equitisation process.

Tien said publicising names of the equitised companies with specific rates of State ownership would help avoid enterprises’ petitions for maintaining a higher rate of State ownership as had previously happened.

Previously, the Government had only regulated the extent of State ownership rates by sector, not specific SOEs, leading to low divestment, Tien said.

He said that the average divestment rate at SOEs is now 8 per cent, meaning that the State still holds 92 per cent of the firms’ charter capital after equitisation.  

SOEs are not willing to equitise because of leaders’ fears that they will be unemployed if controlling stakes fall in private hands, according to Tien.

Besides, due to poor preparations for equitisation, private investors are not provided with enough information, and many stakes languish “on the shelves”.      

To ensure that the equitisation process benefits both the State and private investors, the Government would require better information disclosure by the SOEs and might lift the cap on the number of strategic shareholders so as to increase the number of bidders, Tien said.

Tien also said that the Government would not rush to sell its stake at one time. Instead, the divestment would be divided into many phases, depending on the market situation.

“I think the Vietnamese market is still small, so if we don’t have policies to attract foreign capital, it is difficult for us to reach the SOE equitisation targets,” he said.

The Steering Committee for Enterprise Renovation and Development reported on December 28 that the Government had sold stakes in 55 enterprises in 2016, bringing the number of SOEs equitised in the 2011-16 period to 554.

The 55 equitised enterprises were under the management of the ministries of National Defence, Industry and Trade, and Agriculture and Rural Development; the Vietnam Rubber Group; and the Vietnam Southern Food Corporation.

As of now, the State has sold shares worth more than 4.493 trillion VND (199.69 million USD) in book value for more than 7.098 trillion VND (315.46 million USD).

SBV asked to support prioritised sectors

Prime Minister Nguyen Xuan Phuc has directed the State Bank of Vietnam (SBV) to prioritise capital for sectors with great contributions to economic growth, export, and employment such as hi-tech agriculture, and small and medium-sized enterprises.

Addressing a SBV conference in Hanoi on January 5 to launch 2017 tasks, the PM asked large banks to help businesses reduce cost, while requesting commercial banks to develop preferential credit packages for hi-tech agriculture or a type of business needed support like tourism and aviation.

He highlighted that the banking sector plays as a blood artery of the economy, hailing its significant contributions the nation’s socio-economic growth in 2016.

By the end of 2016, the sector fulfilled all monetary targets set earlier. Total means of payment increased 17.88 percent, while total mobilized capital rose 18.38 percent over 2015.

Inflation was basically reined in, and kept at 1.87 percent, contributing to maintaining the yearly CPI at 4.74 percent, fulfilling the set target of keeping the figure less than 5 percent as set by the National Assembly.

Liquidity of the banking system was ensured, while the inter-baking system operated smoothly. 

After a rise of 0.2-0.3 percent in the first three months of 2014, the deposit interest rate was stable from April. Especially, a number of credit institutions even downed the annual deposit interest rate by 0.3-0.5 percent and lending interest rate by 0.5-1 percent per annum for prioritised sectors from September.

The PM lauded the central bank’s flexible and active management over monetary policies, attributing the success in keeping the inflation rate under 5 percent to the sound enactment of policies on managing State-managed goods prices and monetary governance policies.

The central bank’s prompt and suitable response also helped maintain macro-economic stability and ensure the operation of the system, he said.

However, the PM also pointed out a number of problems in banking activities, including high interest rate, high poor performing loans as well as poor performance of the system in tackling those loans.

The PM also voiced his concern about black market credits, especially in rural area, asking the SBV and localities to urgently co-work in communication activities for locals to gain thorough understanding.

He stressed that macro-economic stability continues a major task in 2017 and requested the SBV to take the pioneer role in implementing the goal by keeping inflation at under 4 percent and contributing to accomplishing the GDP growth target of 6.7 percent.

Along with managing the monetary policy in a flexible, proactive, and careful manner and closely following market fluctuations, the SBV should work to maintain the stability of the foreign exchange and gold markets, while increasing foreign currency reserve and maintaining the value of Vietnamese dong, he said.

The PM also asked the bank to improve the transparency of interest rates, while completing institutions and legal frameworks to better support the restructuring of credit organisations and ensuring safety for the banking system.

The SBV was also asked to coordinate closely with media agencies to popularise the monetary and macro-economic policies of the Party and State.

Thua Thien-Hue province targets12-percent rise in exports

The central province of Thua Thien-Hue aims to earn 800 million USD from exports in 2017, a year-on-year increase of 11.58 percent.

The locality will diversify export commodities and seek new markets to attain the target, according to Director of the provincial Department of Industry and Trade Nguyen Thanh.

The province, which is part of the central key economic region, will also press ahead with solutions to remove obstacles to business growth, boost the export of processed and hi-tech products while gradually reducing the proportion of unprocessed goods in the export structure.

It will also facilitate local exporters’ access to credit sources and encourage them to manufacture products that Thua Thien-Hue has strength in.

In the textile and apparel field, which is a big foreign currency earner, the province is going to call on businesses to gradually switch to free-on-board (FOB) manufacturing instead of cut-make-trim (CMT), thereby improving export value and workers’ income, Thanh noted.

Thua Thien-Hue raked in 717 million USD from exports in 2016, up 7.74 percent from the previous year. That consisted of 292 million USD of overseas shipments by domestic companies and 424 million USD made by foreign invested firms, respectively rising by 4.91 percent and 9.78 percent from a year earlier.

Up to 65 percent of total shipments was contributed by garment exports, which hit a record of over 465 million USD last year, up 8.98 percent from 2015. This result was attributable to product diversification, increased FOB manufacturing, higher productivity, and better product quality.

Meanwhile, fibre and textile exports brought home 117 million USD, climbing 18.89 percent and making up 16.32 percent of the province’s total shipments.

Aquatic exports approximated 47 million USD last year, a year-on-year increase of 26.62 percent, data shows.

Japanese consumer product fair opens in Hanoi

The Japan Branding Consumer Product Outlet Fair kicked off in Hanoi on January 5 and will last through January 8.

The event is organised by the Japan External Trade Organisation (JETRO) and the Vietnam National Trade Fair and Advertising Company (Vinexad).

Nearly 100 pavilions have been set up selling various kinds of products such as household utensils, garment, jewellery and healthcare and beauty care goods, decorations and souvenirs, and electric equipment.

Other activities include a fashion show of Japanese traditional costume Kimono, Ikebana flowers arrangement, and street cuisine.

Deputy head of the Ministry of Industry and Trade’s Domestic Market Department Le An Hai said the fair, the first of its kind in Hanoi, creates a good chance for Vietnamese and Japanese investors and businesses to forge connectivity.

Chief Representative of JETRO Atsusuke Kawada said after successful trade and investment activities in Vietnam, Japanese investors and entrepreneurs have recognised the huge potential of the Southeast Asian country, especially its retail market.

According to the Ministry of Industry and Trade, as of early December 2016, Japan was the second biggest investor among over 100 nations and territories investing in Vietnam with 3,243 projects worth 42 billion USD.

Two-way trade hit 27 billion USD in November 2016.

Ha Nam target 56.5 trillion VND in 2017 industrial production

The northern province of Ha Nam has set a target of 56.5 trillion VND (2.48 billion USD) in 2017 industrial production, a rise of 15.4 percent over 2016, heard a conference held by the provincial Department of Industry and Trade on January 5 to launch tasks for the new year.

Besides, the province aims at total retail sale and service revenue of 19.1 trillion VND, up 18 percent from the previous year, and export value of 1.5 billion USD or 20 percent rise.

According to Tran Van Son, Vice Director of the department, in order to fulfil the targets, the province will focus on boosting the growth of support industry, processing and manufacturing industries, laying firm foundation for the rapid and sustainable industrial development in the 2016-2025 period.

Meanwhile, Ha Nam will implement a trade promotion programme towards 2020, while adjusting the planning of industry and trade for the 2011-2010 period with a vision to 2030, said Son.

Son added that the local industry sector will coordinate with other departments, sectors and localities to improve State management capacity in industry and trade, while ensuring stable power supply for socio-economic activities, especially major projects and businesses.

At the same time, Ha Nam will hold regular dialogues with the business community to tackle their difficulties, said Son, adding that the province will speed up administrative reform, improving working effectiveness and attitude of public servants and applying one-door mechanism in granting business licences.

Addressing the conference, Vu Dai Thang, Vice Chairman of the provincial People’s Committee asked the industry sector to work harder to remove obstacles facing businesses to boost production, thus fulfilling and exceeding the set targets.

The sector should create favourable conditions for underway and planned projects to increase industrial production, while strictly implementing commitments to investors, he requested.

Thang also stressed the importance of careful selection projects to protect the environment, with priority given to high technology industry, support industry and industry serving agriculture.

In 2016, Ha Nam enjoyed over 48.3 trillion VND in industrial production, a rise of 16.4 percent year on year, while its industrial production index rose 13.2 percent over the previous year.

Total retail and service revenue of the province reached 16.5 trillion VND, up 16.7 percent year on year. Ha Nam also earned 1.25 billion USD in exports, a surge of 19.6 percent over 2015.

SHTP aims for $600 million in investments in 2017

Saigon Hi-Tech Park has set a target to attract US$600 million in investment capital this year.
Last year, SHTP granted investment licences to 17 projects with total registered investment capital of $666.43 million, 2.7 times higher than its target.
Six of these projects were foreign-invested and had a combined registered investment capital of nearly $335 million.
Last year, five operating projects registered, increasing investment by $95 million.
As of today, SHTP has 107 valid projects worth more than $6.095 billion, of which local investors invested $1.48 billion in 67 projects.
Export revenue from enterprises in the park was worth $7.19 billion, and more than $7.06 billion was spent to import materials, machinery and equipment.
Exports are expected to reach $9 billion this year.

Masan Consumer begins trading on UPCoM
     
Masan Consumer, part of the Masan Group Corporation, was officially listed 538.1 million shares at VND90,000 per share (US$4.06) on Thursday on the Unlisted Public Company Market (UPCoM) of the Ha Noi Stock Exchange.

The shares, traded under the code of MCH, rose 9 per cent to close the trade at VND98,072 a share, bringing its market capitalisation to more than $2.3 billion which has made its among few billion-dollar companies on the UPCoM.

Created in 2003, Masan Consumer specialises in food and beverage products. Many of its brands are household names, such as Omachi, Kokomi, Chinsu, Vinacafe and Wake-up 247.

Masan Consumer Holdings (MCH) is currently Masan Consumer’s chief stakeholder, with 93.76 per cent of the latter’s charter capital, equal to 504.6 million shares. Individual investors accounted for nearly 2 million shares, an equivalent of 0.37 per cent of the company’s charter capital.

Masan Consumer’s capital had been recorded at VND5.381 trillion ($242 million). The company recorded net income of VND9.1 trillion ($410 million) as of the fourth quarter of 2016, up 6 per cent compared to the previous year. Earning per share is estimated at VND3,177 ($0.14).

Masan Consumer’s total assets at the end of 2016 were over VND15.926 trillion ($718.7 million), with the owner’s equity at VND11.203 trillion ($505.57 million). Its stock symbol is MCH. 

Saigontourist promotes new Saigon-Bản Giốc luxury resort

Saigontourist Holding Co is promoting its resort near the Bản Giốc Waterfall in the northern border province of Cao Bằng.

A stay at the 31ha luxury Saigon-Bản Giốc Resort offers guests a chance to discover the stunning beauty of Bản Giốc Waterfall, mysterious Nguôm Ngao Cave, and the peaceful, picturesque sights along the border with China.

Bản Giốc has cold weather year round. When night falls, a popular activity among tourists is dancing and singing around a campfire by the waterfall and interacting with the local Tày and Nùng ethnic minorities.

The province is also home to other tourist attractions like Pác Bó Cave, Thang Hen Lake and Phật Tích Trúc Lâm Bản Giốc Pagoda, and the unique dances of the local people.

Smooth credit: SBV’s pressing task for 2017
     
Prime Minister Nguyen Xuan Phuc has asked the State Bank of Viet Nam (SBV) to smooth credit growth over the year and ensure loans will go to right people and businesses.

He made the request while listing to a number of key 2017 objectives for the SBV during a meeting with leaders of the central bank on Thursday.

He said, “The credit growth target is normally set in the very beginning of each year, but we are normally relaxed in first quarters and then rush to meet the target at the year-end. We face the situation every year.”

The PM highlighted the need to improve proactivity and flexibility in management so that the credit supply will better meet the market’s demand, inflation is under control (below 4 per cent) and macro-economic stabilisation is ensured.

“The Government is assigning you [SBV officials] a great responsibility this year,” he said.

The SBV on Wednesday announced the credit growth target at 18 per cent for the year.

In term of credit structure, Phuc said that credit flow must be directed to sectors such as high-technology, agriculture, small and medium-sized enterprises, tourism, and startups.

Meanwhile, credit supply to real estate and securities sectors and customers whose outstanding loans exceed VND5 trillion (US$222 million) must be tightly supervised.

The SBV must boost competition among banks through market mechanisms and reduce administrative orders to improve the efficiency of loans provision as well as commercial bank transparency.

He asked the central bank to continue tackling obstacles and completing regulations to support the process of restructuring credit institutions and dealing with bad debts to create favourable conditions for enterprises to get loans at low costs.

“As long as bad debts still exist, there is hardly any chance for commercial banks to reduce lending interest rates,” Phuc said.

“Developments of the world economy now is hard to predict while the market often responds quickly to monetary policies, thus the central bank needs to enhance the effectiveness of forecasting activities and prepare well for upcoming events,” Phuc said.

Discussing “black credit” service in rural and remote areas, Phuc attributed its spread to the unbalance of banking service access.

“Many families have gotten into miserable situations after seeking loans with high interest rates from unlicensed businesses, thus raising people’s awareness of credit and finance is a pressing issue,” he said.

He asked SBV branches in localities and local People’s Committees to pay attention to address the problems.

Phuc required the SBV to consolidate the trust of the public as all banking operations from depositing to lending are upheld by the trust.

To promote confidence, the central bank must more effectively fight and prevent corruption, tax evasion and money laundering.

It also needs to encourage commercial banks to reform administration procedures, apply technology to develop modern banking services safely and effectively, and strengthen the network security to avoid customers from suddenly losing money in their accounts, Phuc stressed.

Ceiling power prices unchanged
     
The Ministry of Industry and Trade has decided to keep thermal and hydroelectric power price ceilings unchanged in 2017.

According to a decision stipulating new electricity tariffs, the ceiling price for power generation of thermal electricity plants excluding value-added tax (VAT) will be VND1,568 per kWh (about 7 US cent).

The power price for the thermal electricity plants was calculated based on the coal price (including losses, management cost, insurance and excluding transport cost) of VND1.3 million per tonne.

The hydroelectricity plant price ceiling will be VND1,070 per kWh, excluding tax on water resources, environment fee and VAT.

The decision took effect January 1st, 2017. The ministry required the Electricity of Viet Nam (EVN) to report difficulties to the Electricity Regulatory Authority of Viet Nam during the decision implementation.

Based on electricity tariff ceilings, EVN and power generation units negotiate selling prices to follow the current legal regulations.

In 2015, the ceiling prices for power generation of thermal electricity and hydroelectricity were VND1,060 and VND1,383 per kWh.

During Tuesday’s conference to review EVN’s 2017 business operation plans, Dang Hoang An, the group’s general director, said its electricity production costs this year will increase by VND5 trillion (US$225 million), as coal prices sold to electricity rose by 7 per cent from the end of last year.

Improved quality boosts export of fruits, vegetables
     
Viet Nam’s fruit and vegetable export in 2016 hit US$2.4 billion, a 30 per cent increase over 2015, and exceeding the Ministry of Industry and Trade’s yearly target of $2.2 billion.

According to the Vietnam Fruit and Vegetables Association, the result was attributed to efforts to seek new markets and keep traditional markets.

In 2016, five types of fruits gained entry to four new markets — mangoes to Australia, dragon fruits to Taiwan (China), longans and lychees to Thailand and cashew to Peru — thus expanding the market for Viet Nam’s fruit and vegetable to more than 60 countries and territories.

China continues to be the largest market for Viet Nam’s fruits and vegetables, accounting for some 70 per cent, followed by the Republic of Korea, the United States and Japan.

Bui Sy Doanh, from the Department of Plant Protection under the Ministry of Agriculture and Rural Development, said the department would continue negotiations on technical barriers to help more Vietnamese fruits and vegetables enter selective markets like the United States, Japan and Australia.

In 2017, Viet Nam hopes to win import approval from Australia for its dragon fruits, approval from Japan for red-flesh dragon fruits and from the United States for star apples.

Nguyen Huu Dat from the Vietnam Fruit and Vegetables Association emphasised the need to further improve post-harvest preservation and processing technologies to meet demands for quality and diverse products in foreign markets.

Garment 10 aims 6% rise in revenue in 2017
     
Garment 10 Corporation JSC (GARCO 10) is targeting a 6 per cent rise in revenue in 2017 compared to last year, its general director Nguyen Thi Thanh Huyen said.

The company aims to earn a revenue of VND3.1 trillion (US$136 million) and make a profit of VND62.5 billion in 2017, Huyen said.

To achieve these objectives, GARCO 10 will take initiative and adopt austerity measures, besides prioritising product quality, improving labour productivity and enhancing corporate governance.

The company made a total estimated revenue of VND2.9 trillion in 2016, which is a 6.42 per cent year-on-year increase and 2 per cent higher than its annual target.

The company contributed around VND59 billion to the State budget last year, up 24 per cent against 2015.

With more than 9,000 professional workers, GARCO 10 is one of the largest companies in Viet Nam’s textile and garment sector.

Over the years, the company has established co-operation relationships with several prestigious firms in the global fashion industry and exports its products to many countries. It annually produces around 21 million high-quality products of different types, more than 80 per cent of which is exported to European countries, the United States, Japan and Hong Kong.

HCM City urged to attract overseas Vietnamese for economy
     
Overseas Vietnamese play an important role in developing HCM City’s economy, but the city lacks the legal framework required to fully utilise their capabilities.

“The role of overseas Vietnamese is not just sending foreign currency back to their families, but also having good relations with international politicians, multinational companies, investment funds and banks,” Dr Dinh Thanh Huong, an ethnic Vietnamese living in France and lecturer at University Paris 12 was quoted as saying on the Government’s website chinhphu.vn.

Therefore, the city should have a dedicated channel for overseas Vietnamese, and from that the city could source capital, technology and senior experts who would come back and contribute to its development, she said.

“For those who would like to return with their families, besides providing a favourable, transparent and supportive business environment, the city should also assist their family members with accommodation, schools and jobs.”

Dr Nguyen Tri Hieu, who has spent many years living in Viet Nam and working in the financial sector, was apprehensive about the gap between the Vietnamese and international legal frameworks.

“Viet Nam does not have a personal bankruptcy law while its closed foreign currency management system does not allow overseas Vietnamese to easily repatriate their profits or transfer money.”

Nguyen Hong Hue, Vietnamese-Australian chairman of BankPay, said if Viet Nam had stringent policies to protect the environment, it would attract many “green”, stable, long-term investors.

“If managers loosen environmental protection norms for more FDI, I am afraid that current earnings will not be able to compensate future losses.”

At the macro level, Viet Nam should have a national environmental impact report for every five to 10 years of development with the participation of both domestic and foreign experts, he said.

At the micro level, relevant authorities must make use of independent, third-party assessors to assess environmental impact reports.

According to the city Department of Planning and Investment, of 1,110 enterprises funded by overseas Vietnamese, 80 per cent are based in HCM City.

According to The Economist Intelligence Unit, if HCM City cannot achieve a breakthrough in its rate of economic growth, by 2025 it will rank a lowly 96th in Asia in terms of competitiveness.

Housing stimulus package interest rate remains at 5%
     
The State Bank of Viet Nam (SBV) will keep the interest rate of the VND30 trillion (US$1.32 billion) preferential credit package for low-income homebuyers at 5 per cent in 2017.

SBV Governor Le Minh Hung has signed a decision stipulating interest rate for commercial banks for loans under the package.

Accordingly, loans to home buyers under the package which was disbursed before December 31, 2016 will enjoy a 5 per cent interest rate. Those who have signed credit contracts for the package but have their disbursements made after December 31, 2016 will be applied commercial interest rates according to their agreement with banks.

The interest rate under the package is announced annually by the central bank.

Every December, SBV clarifies and announces the interest rate for the following year. The interest rate would be half of the average rate of banks in the market and not exceed 6 per cent per year.

The package’s disbursement was terminated at the end of last year. By the end of 2016, the disbursement was estimated at some VND30 trillion. On November 30, 2016, the package’s disbursement was more than VND29.2 trillion and total outstanding loans were more than VND24.2 trillion.

The central bank evaluated that the package significantly contributed to helping low-income earners buy their own house while resolving inventory for the market.

As many as 50,000 people and households have been able to improve their accommodation thanks to the programme.

Local designers look to ‘stitch up’ the hand bag market

International tourism continued to grow strongly in 2016, providing a rich opportunity for local handbag designers to get in on a ground floor opportunity, said market experts at a recent business forum in Ho Chi Minh City.

According to the experts, the market is forecast to experience sustained growth over the next decade with the US and China remaining the two key market share holders in terms of manufacturing.

In terms of sales, the US, Middle East, and Asia Pacific region will be the most promising markets exhibiting the highest growing consumer potential throughout the10-year forecast period.

An increase in the frequency of global flyers in addition to the number of road and rail travellers is the key driver of market growth in the segment, said Nguyen Duc Thuan, chair of the Vietnam Leather and Footwear Association.

Most notably, sales of travel bags and accessories have been the lead revenue generators in the luggage market over recent years and that trend is expected to continue, Thuan noted.

The key factors influencing consumers purchasing behaviour are the rise of the middle-income class in emerging markets such as Vietnam and their desire for better product design, quality, and functionality.

There is also a noticeably high demand for lightweight and ultra-lightweight travel luggage with hard side material, Thuan added, suggesting that this trait could be triggered by changing weight regulations of airlines.

As well, travel by road and rail somewhat dictates a lighter but durable design in luggage, he commented.

Not surprisingly, counterfeits have been a major challenge to the global travel luggage market. Although these fake products are generally of low quality, they seem to always find a limited customer base, Thuan emphasized.

Accordingly, it is important for local manufacturers to take appropriate steps to legally protect their products and limit exposure to copyright and patent infringement. 

For purposes of clarification, he was explaining that a company such as Apple obtains a copyright on the design of a specific mobile or computer model to protect against theft— and a trademark to protect the Apple logo from improperly being hijacked.

Meanwhile, competition in the luxury handbags industry, is tough, especially because there are a limited number of major players operating in the global market all of whom are loaded with cash.

Despite the stiff competition, a number of new entrants such as US-based designers Michael Kors, Kate Spade, and Tory Burch, have managed to make entry into the market and gain market share at the expense of the major players.

There is a definite trend in the luxury market and these newcomers to compete more on innovative and practical designs that are whimsical, attractive and colourful without labels or logos attached to them.

This is in response to consumer demand that has been shying away from buying any expensive luggage possessing highly visible logos, possibly over concerns with theft and making themselves a target for thieves.

Most of these newcomers, for example, produce such things as tote bags with very tiny stamps with their brand name on them, which demonstrates that brand names aren’t as important as many ‘so-called experts’ often claim.

In addition, these newcomers have had an advantage over their larger counterparts, because consumers are looking for novelty in handbags and luggage and prefer not to buy a product that everyone else owns.

This desire by consumers for novelty and innovative aesthetics just may be the greatest competitive advantage that Vietnamese local hand bag designers possess in their quest to stitch up the lucrative market.

US increases tuna imports from Vietnam

Vietnam exported around US$200 million worth of tuna products to the US in 2016, representing a year-on-year increase of 5%.

In the first 10 months of 2016, fresh, frozen and dried tuna exports increased 10% to reach nearly US$115 million, making up 60% of the total tuna export value (compared to 52% in the same period last year).

However, the exports of processed and canned tuna products registered a yearly reduction of 5% to stand at US$70 million in January – October.

The US is currently the biggest tuna importer of Vietnam, comprising of more than 40% of the country’s total tuna export value.

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

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