BUSINESS IN BRIEF 8/10
Interest groups hinder listing process of privatized Vietnamese SOEs
Certain interest groups trying to prevent Vietnam’s state-owned enterprises (SOE) from listing on the stock market following their privatization are responsible for causing losses to state coffers, a local finance association warned.
While law stipulates that state companies list and reduce their state holdings once going public, few privatized SOEs have done so over the last decade, the Vietnam Association of Financial Investors (VAFI) said in a document sent to the prime minister on October 5.
Under the government’s directive No. 51, SOEs are required to complete their public company registration and the listing process, and start trading on the stock market within 90 days of their privatization.
“However, hundreds of privatized state enterprises have deliberately defied the directive, while representatives of the state capital refused to reduce the government’s stake in the companies as required,” VAFI said in the document.
Representatives of the state holdings at those SOEs “do not want transparency,” so that they can continue engaging in corrupt practices or their appropriation of state and shareholder assets, the association said.
As long as the SOEs remain unlisted, the interest groups can manipulate the companies and their assets, according to VAFI.
“By preventing privatized companies from listing, these interest groups reduce investor and shareholder confidence, which in turn reduces share prices and devalues the assets of those firms,” VAFI deputy chairman Nguyen Hoang Hai was quoted by the Voice of Vietnam radio as saying.
“Members of these interest groups then purchase shares from those companies at cheap prices in order to take full control.”
Sabeco and Habeco, Vietnam’s two largest beer makers, are prime examples of the issue, according to VAFI.
“These companies have employed all available strategies to avoid listing themselves in the last nine years, and only started to begin the process after Prime Minister Nguyen Xuan Phuc directly requested them to do so,” VAFI deputy chairman Hai said.
The Vietnamese government is slated to sell its entire 89% stake, worth an estimated US$1.8 billion, in Sabeco by 2017 and begin listing the firm on the Ho Chi Minh Stock Exchange by late November or early December, CEO Le Hong Xanh toldReuters in an interview on October 5.
VAFI said the ministries that manage SOEs hold some blame for the companies’ unwillingness to list on the stock market.
Sabeco and Habeco are both managed by the Ministry of Industry and Trade, and it was the former minister Nguyen Huy Hoang that had prevented these companies from listing, the association said.
The reason, according to VAFI, is that Hoang and his then deputy, Ho Thi Kim Thoa, “wanted to appoint relatives with little capacity and ability to top positions within the companies,” something they would never be able to do if the beer makers were listed.
In fact, Hoang’s son, Vu Quang Hai, is a member of the board of directors and deputy CEO of Sabeco. Hai told local media in June that his appointment was “in line with procedure” and there was no such thing as a “father favoring his son.”
VAFI underlined that if the directive No. 51 had been strictly followed, the state budget could have pulled in US$15 billion.
The association suggested that the government strictly sanction any individuals, ministry leaders, or local administrators that hinder the listing process of privatized state companies.
“If the prime minister sets penalties, then directive No. 51 will be properly followed and the state budget can get US$15 billion from the privatization and state holding sales of certain SOEs,” the association concluded.
Jetro seeks investment opportunities in Haiphong
A Japan External Trade Organization (Jetro) delegation comprising of Japanese businesses operating in China and Hong Kong made a fact-finding tour of Haiphong City on November 5 to explore investment opportunities.
At a working session with the Japanese businesses, Le Tri Vu, director of Haiphong city’s investment, trade and tourism promotion centre, briefed the guests on the city’s potential, socio-economic strength and infrastructure development.
He also provided them with information about population, human resources, infrastructure, logistics services, foreign investment, import and export value and incentives at industrial zones.
Representatives from Haiphong departments and industrial zones answered the guests’ questions related to investment in the city.
The Jetro representatives proposed organizing monthly meeting between the city leaders and Japanese businesses operating in the city.
Haiphong welcomes and encourages Japanese businesses to invest in low pollution and green industries, high added-value processing establishments and hi-tech industrial zone’s infrastructure and the support industry, the city leaders said.
Haiphong city’s skilled human resources can meet requirements of investors. Besides, it is the sole locality in northern Vietnam having multimodal transport spanning from road, railway, seaway and domestic waterway to airway and a deep-water port and an international airport.
Vietnam ends tax breaks on car imports for overseas Vietnamese
Some importers have abused the policy to avoid huge taxes on luxury cars.
Vietnam’s government has abolished tax exemptions on cars imported by returning Viet Kieu (overseas Vietnamese) following suspected smuggling of luxury vehicles.
A government decision issued last month vetoed a decision made in August 2015 that granted import tariff and VAT exemptions for cars imported by overseas Vietnamese who return to live or work in Vietnam.
The old rule allowed them to import a car and a motorbike duty-free as used assets if they were moving back permanently or working in Vietnam at the request of government agencies for at least 12 months.
But many people have abused the policy to import luxury cars without paying taxes to resell them in Vietnam.
Some people have also registered for permanent residency in Vietnam to enjoy the benefit without actually living in the country, local media reported.
The finance ministry called for the policy to be abolished in August, saying that some car importers have abused it to evade huge taxes.
More than 1,000 cars have been imported under the policy, but fewer than 100 are registered under the name of an overseas Vietnamese, it said.
Customs agencies found most of the cars imported under the policy are new and luxury cars.
In modern Vietnam, a high-tech economy is a future far away
Decades-old technologies are widely used across most sectors, keeping the country from becoming more competitive in the global market.
Vietnam’s backwardness in technology is dragging down its economic growth.
As the country is trying to leave its mark in the global economy, it has no other option but to move up the value chain and away from the traditional low-wage, low-tech model.
There has been some success. Statistics show that high-tech products contributed 28.7% in the country’s gross domestic product in 2013, up from 19.1% in 2012 and 11.7% in 2011. The goal is to bring this ratio to 45% by 2020.
The government seems to be fully aware of the importance of technology in manufacturing. It has been pushing for the adoption of modern machinery and production methods in both labor-intensive industries that make garments, shoes or furniture, and capital- and technology-intensive sectors such as automobile and electronics.
Over the past five years, the Vietnamese government has invested about VND10 trillion (US$450 million) in technology and science. And since 2001, it has consistently set aside about 2% of the annual state budget, or 0.5% of the GDP, to introduce scientific and technological advances to various industries.
Despite all these efforts, Vietnam is still 50 to 100 years behind the most modern countries in the world in terms of technology, according to the Ministry of Science and Technology. Compared to the world’s average level, its technology is between two and three generations, or 20 years to 30 years, behind.
The country’s support industries, which urgently need technological advances to boost productivity, remain weak, said Pham Tuan Anh, deputy head of Heavy Industries Department under the Ministry of Industry and Trade.
Enterprises in these industries currently account for only 0.03% of the country’s total number of businesses. The lack of local suppliers has forced Vietnam to import nearly 90% of raw materials, spare parts and components.
Domestic companies in support industries can only meet about 10% of the demand, Anh added.
Data show the ratio of locally sourced components in automobile manufacturing is ranging from 20% to 30%. For textiles and garments as well as footwear, it is around 10%.
Local garment companies have to import more than 65% of raw materials, including fabrics and other accessories from overseas, especially from China, which owns the bulk of the world’s polyester production and is one of the top producers of cotton, said Le Quoc, a senior advisor to the Vietnam Textile and Garment Association.
Support industries are currently controlled by foreign-invested companies, mainly from Japan, the Republic of Korea and Taiwan.
Official figures show about 80% of parts suppliers in Vietnam, including electronic and other metal parts, are foreign companies.
The Vietnamese government has worked on a plan to change this.
The goal is that in the next four years local support industries will have 1,000 suppliers that can meet 45% of the manufacturing sector’s demand. By 2030, there will be 2,000 suppliers that meet 70% of the demand.
In its drive for modernization, the country is also forecast to import machinery and equipment worth US$250 billion between 2011 and 2025.
Vinamilk products go online
Vinamilk, the nation’s leading dairy processor, has launched a website at giacmosuaviet.com.vn where customers can order any of its products and have them delivered home.
Vinamilk said a wide selection of products are available on the website, such as powdered and sweetened condensed milk, soya milk, nutritious powder, beverages, yogurt, ice cream, and cheese. They can pay by cash upon delivery, and by debit or credit card including Visa, MasterCard and JCB.
For consumers in inner-city districts of HCMC, they can receive Vinamilk products on the same day if they place orders before 10 a.m., or within 24 hours of the next working day depending on confirmation time. Free delivery applies to orders worth at least VND300,000 each (US$13.5).
Delivery service is available from Mondays to Saturdays, except for holidays.
Online shoppers can enjoy the same promotion programs as those who buy products at Vinamilk stores.
Vinamilk is the first Vietnamese company in the fast moving consumer goods segment that has launched its own e-commerce site.
Currently, Vinamilk has 16 factories with 13 of them in Vietnam and the remainder in the U.S., New Zealand and Cambodia. The company is looking to generate revenue of around VND44.5 trillion (about US$2 billion) this year.
French firm keen to invest in HCM City’s infrastructure
French-based VINCI Construction Chairman Jerome Stubler has expressed his firm’s interest in infrastructure development in Ho Chi Minh City, especially in building metros and flooding prevention works as well as turning waste into energy.
At an October 5 meeting with with Chairman of the Ho Chi Minh City People’s Committee Nguyen Thanh Phong, he said the company is also keen to invest in housing development and the construction of high-rises.
Phong told his guest Ho Chi Minh City welcomes VINCI Construction’s investment in these sectors, adding that local authorities will offer the best possible conditions for the company as well as other French investors.
VINCI Construction has operated in Vietnam for more than 20 years. In 2014, it signed a two-year contract with the Ho Chi Minh City University of Technology on a training programme in advanced technologies in civil engineering.
Government pledges favorable conditions for businesses
As from October 5, aides of the Minister and Head of the Government Office will directly gather businesses’ opinions and proposals through a government website at doanhnghiep.chinhphu.vn.
At a recent regular media conference in Hanoi, Minister and Head of the Government Office Mai Tien Dung said the move is part of efforts to build a facilitating, transparent, and incorruptible government.
“This government website targets businesses, and there will soon be another website for the people. Information is publicized. Businesses’ petitions will be answered. We will establish a working group to check on the process and I myself will address business queries,” he said.
Nguyen Thi Hong, Deputy Governor of the State Bank of Vietnam (SBV) mentioned the possibilities of cutting loan interest rates.
“The SBV Governor has issued Directive No4 on balancing capital recourses, the proper use of capital, reducing costs and loan interest rates. Some commercial banks have already implemented this plan. From now to the end of the year, demands for credit tend to rise. Some major commercial banks have also lowered deposit interest rates, paving the way for further cuts in loan interest rates,” she said.
Samsung wants Vietnam to waive taxes for recalled Galaxy Note 7
The company doesn’t want to pay tax twice for sending out replacement phones.
Korean tech giant Samsung has asked Vietnam to waive import/export duties and VAT for the faulty Galaxy Note 7 smartphones that it has been recalling globally.
The brand new phablets are produced by the Vietnam-based Samsung Electronics Vietnam Thai Nguyen (SEVT) in the northern province of Thai Nguyen.
An employee uses a Samsung Electronics’ Galaxy Note 7 new smartphone at its store in Seoul, South Korea, September 2, 2016. Photo by Reuters/Kim Hong-Ji
In a recent letter sent to the General Department of Vietnam Customs, SEVT said under the global recall and exchange scheme announced in early September, the recalled smart phones from end-users will be shipped to SEVT.
The company will then send back new mobile phones with the same IMEIs (International Mobile Equipment Identities) and serial numbers to customers.
The Korean company wants the customs office to treat the recalled and exchanged smart phones as re-export commodities, which are currently exempt from taxes.
Given the size of the recall and exchange program, SEVT hopes Vietnam Customs will view it as “a special and urgent situation” and hopes to receive feedback from the department.
SEVT’s proposal is under consideration.
Samsung announced on September 2 a recall of at least 2.5 million Galaxy Note 7 smartphones in 10 markets, including the Republic of Korea, due to a faulty battery that causes the phones to catch fire, offering refunds or replacement devices with safe batteries.
PM suggests hi-tech and organic farming for national agriculture
Prime Minister Nguyen Xuan Phuc said high-technology and organic farming would be crucial for the development of Vietnamese agriculture when touring Vingroup’s high-technology agricultural project in Tam Da commune, northern Hai Phong city on October 5.
The VND189 billion Hai Phong project is among 12 farms developed by Vingroup’s subsidiary VinEco across the country growing safe vegetables.
The farm, covering 46ha, including an open-air area of over 28 ha, and a glasshouse area of 10.7 ha, became operational early this year, growing 14 species of vegetables using no pesticides with an average output of 250 tonnes per month.
The PM praised the model for increasing labour productivity and supplying the market with safe products.
The leader also lauded the efficient coordination between the company and local farmers, suggesting that it should be stepped up during rural area construction.
He reminded project insiders to observe their commitments, especially those pertaining to food safety, to ensure the quality of products.
VinEco should provide employment opportunities for those people who were relocated for the project to enable them to earn substantial, stable incomes, the PM noted.
VinEco said it will grow vegetables and plants suitable with conditions in Hai Phong for local consumption and export.
Retail sales slow down over nine months
The total revenue from retail trade and services topped US$118.4 billion during the first nine months of this year, surging 9.5 percent year-on-year, according to the General Statistics Office (GSO).
Excluding inflation, the increase would be 7 percent, lower than the 9.2 percent seen in the same period last year, GSO said.
GSO statisticians blamed the slow growth of retail trade in the period for the fact that local consumers have curbed their spending due to price fluctuations in the consumer market and other services such petroleum, health-care and school fees.
Retail sales of goods, which accounted for more than three fourths of the total sales, reached 90.2 billion USD from January to September, up 9.7 percent against last year’s corresponding period with several sectors recording a positive revenue increase including food and foodstuffs (up 13.2 percent); home appliances (up 10.1 percent) and textile and garments (up 9.5 percent) and transport services (up 7.6 percent).
Meanwhile, retail sales in accommodation, restaurant and catering services, which accounted for 10 percent of the total, posted a revenue of 13.64 billion USD, a yearly rise of 8.3 percent.
Some localities recording an encouraging retail revenue growth included Bac Giang, Lang Son and Hanoi while several others witnessed a sale reduction such as Hoa Binh, Ha Tinh, Phu Tho, Nghe An and Lai Chau.
The country’s retail turnover is expected to rise to 179 billion USD by 2020, the Association of Vietnam Retailers (AVR) has forecast.
According to AVR, the sector’s huge potential has attracted a lot of local and foreign investors, especially in HCM City, the country’s economic hub.
Uber faces Vietnam’s scrutiny for ‘Saigon has fallen’ ad campaign
The choice of words has been questioned by Vietnamese officials and the company may be punished with a fine.
Uber Vietnam is likely to face a fine for running an ad campaign built around the phrase “Saigon that thu” (Saigon has fallen) to promote its ride-hailing service during days of heavy rain and flooding.
According to local media, the Ministry of Culture, Sports and Tourism on October 3 sent a note to the culture departments in Ho Chi Minh City and Hanoi, ordering an inspection into the ad campaign.
According to the note, phrases such as “the fall of Saigon” or “the collapse of Saigon” have been used by Western media to refer to the historic day of April 30, 1975, when the US.-backed Saigon regime was defeated.
The poor choice of words may make people think about war, the note said.
The full slogan “Saigon that thu nhung Uber khong that thu” (Saigon has fallen but Uber has not) appeared on Uber Vietnam’s Facebook page soon after a historic downpour flooded several areas in Ho Chi Minh City on September 26. Its prices reportedly surged 4.9 times due to high demand on that day.
The company paid VND241 million (US$10,667) in taxes to Vietnam for the first time last month, after being accused of tax evasion over the past two years.
Uber proposed legal frameworks for providing ride-hailing services in Vietnam in October last year, but the proposal was rejected as the company did not designate a legal entity that would handle contracts with Vietnamese partners.
Vietnam’s Ministry of Transport then asked Uber to revise its proposal. No further action has been taken since.
For now, only Grab Taxi, a Malaysia-based company, and Vietnam’s Vinasun have received permission from local authorities to operate e-hailing services.
Foreign property portals open in Vietnam
As Vietnam’s property market attracts increased international attention, more foreign property portals are being set up to fill in a gap.
In September, rapidly-growing Asian property portal, Dot Property, opened an office in Ho Chi Minh City, after seeing increased traffic on its website.
Dot Property Vietnam, which began operating earlier this year, is the most recent addition to the growing Dot Property network.
Dot Property sees huge potential in Vietnam, given the always-online lifestyle of the target market – which finds the Internet to be the most accessible tool when looking for property.
According to Alva Horgan, managing director for international markets at Dot Property, the growing population of young professionals in the country will be a source of future demand for residential properties.
“They will be searching online in greater numbers and our platform is aiming to meet this rising demand,” he said. “Since arriving, Dot Property Vietnam has already signed some of the country’s leading property developers, real estate agents, and other companies, and that number continues to grow on a daily basis.”
Meanwhile, TimHome.vn is the recently launched local arm of international real estate technology company Homsters.com. The firm has raised over US$1 million from various Vietnamese and international investors who believe in the team, the business model, and in the potential of the Vietnamese market.
Andrew Olejnik, co-founder of Homsters.com and CEO of TimHome.vn said, “We are constantly in discussion with venture capital companies and investors from around the world, attracting additional equity to fuel our growth in Vietnam.
“We estimate that within the next couple of years we will invest an additional US$3-5 million in development. We understand that the real estate market is a very complex one and we are ready to continue investing to create a market leader,” he added.
According to Jones Lang LaSalle (JLL) Vietnam, project information transparency has notably improved in the residential market. In recent years, numerous policies and regulations in terms of transparency have been implemented.
More recently, a list of mortgaged projects at local commercial banks has also been published, in response to the local authorities’ request for more clarity on project status across the second city. These steps are collectively being seen as positive actions to promote transparency in the market.
Trang Le, manager of research and consulting at JLL Vietnam, said, “With the development of advanced technology and an influx of capital into the Vietnamese real estate market, transparency will need further enhancement in the future.”
She noted that sophisticated technology will provide a better tool for improving market transparency, and the strong influx of capital will push the demand for transparency to a higher level than previously seen.
Vietnamobile lowers price for international calls
Vietnamobile has cut its international call price down by two thirds.
On October 5, 2016, Vietnamobile announced that is now offers international call rate same as local call: at only VND1,500 (6.72 US cent) per minute for calls to 11 countries including China, India, the US, Vietnam, Thailand, the Republic of Korea, Canada, Malaysia, Australia, Hong Kong and Singapore.
The old price for call to these countries was at least VND4,400 (20 US cent), higher than the price offered by the three major networks namely Viettel, Vinaphone and MobiFone. The new rate is more competitive.
“Vietnamobile is committed to providing exclusive offers to let customers stay connected whenever, wherever and overseas. With this new service, our customers can have hassle-free calling to their family or friends within Vietnam and selected countries overseas,” said Elizabete Fong, CEO of Vietnamobile. “This is also a very best-value service for all foreign visitors to Vietnam, leisure or business so they call home at preferential rates.”
Vietnamese mobile network service providers are struggling with the falling popularity of overseas calling, as people mostly use Over-the-Top (OTT) services for this purpose.
At the conference to review government management in July and August, held last month by the Ministry of Information and Communication, deputy general director Bui Son Nam of MobiFone said MobiFone had seen a fast decrease in the number of calls from international destinations to Vietnam, with the August results 15% lower than in July.
Meanwhile, Tran Manh Hung, general director of VNPT, said that his company has seen a decrease in both to and fro international calls. The two companies asked the MIC to eliminate the currently effective price floor on international calls.
HCM City leader encourages EPZ to develop high added value industries
Tan Thuan Export Processing Zone (EPZ) should continue developing high-tech industries and support industry in the upcoming time, said deputy chairman of the city People’s Committee Le Thanh Liem at the celebration on the 25th anniversary of its establishment yesterday.
In addition, it should continue improving technical infrastructures and workers’ lives, transferring from labor intensive industries into hi-tech processing and manufacturing to increase products’ added value, he said.
Mr. Liem asked relevant agencies to positively support the zone’s management to implement one door mechanism to facilitate the implementation of investment projects, solve arising problems and attract more investors.
The agencies and especially District 7 should give the zone assistances to do export import procedures, connect with surrounding roads, develop human resources, protect the environment and better the caring of workers’ life.
At the anniversary, the city People’s Committee granted Tan Thuan Ltd Company a certificate of merit and traditional flag for remarkable contribution to the city’s development.
Director General of Tan Thuan EPZ Tsao Chung Hung said that the company has attracted 192 businesses from 20 nations with the total registered capital of US$1.8 billion. Of these, 181 companies have increased investment capital.
The zone’s export turnover has totaled US$3.8 billion and products have been exported to 43 nations.
HCM City farm produce fair meets locals’ safe food demand
A safe farm produce fair opened in Ho Chi Minh City on October 1, aiming to help locals access safe products amidst the current complicated food safety situation.
The fair, which will be held every Saturday in District 10, provides a diversity of food and foodstuff from rice, vegetable to pork, seafood and fruit, with reasonable prices, said
Nguyen Van Truc, deputy head of the municipal Department of Agriculture and Rural Development.
He revealed that all products introduced at the fair are produced to the VietGAP and GlobalGAP standards, or within the safe food production chain of the city, with strict inspection of authorities at the farm and the fair.
Earlier, the department implemented three pilot events, which were lauded by locals. More than 20 orders was made between businesses and farmers, including 15 big ones with a total supply worth 2.4 billion VND each month, he added.
The department plans to expand the model to other localities across the city, initially to District 2 and Tan Binh District, thus meeting high demand for safe food of locals.
Vietnam must be more competitive: report
Vietnam must continue to maintain stability, accelerate restructuring and improve the competitiveness of the economy in the face of ongoing global headwinds, members of a think-tank report.
Deputy Prime Minister Vuong Dinh Hue asked members of the National Financial and Monetary Policy Advisory Council to closely monitor the financial situation throughout the world, during their third-quarter meeting in Hanoi on September 30.
The members agreed that it was necessary for Vietnam to create a stable business and investment climate, renew its growth model and expand labour productivity.
Vietnam has targeted its gross domestic product (GDP) to grow at 6.7 percent, along with exports to grow at 6-7 percent, next year.
Further, the consumer price index (CPI) is expected to rise by some 4 percent, with total social investments accounting for some 31.5 percent of GDP in 2017.
Deputy Minister of Planning and Investment Dao Quang Thu announced these figures after the country’s goal of reaching 6.7 percent economic growth this year has proven largely unfulfilled.
There is, however, a strong possibility that the GDP will grow by 6.3 percent and the CPI will rise by less than 5 percent in 2016, he said, adding that total social investments have reached more than 1 quadrillion VND, or 44.44 billion USD, during the first nine months of the year.
Thu said the slow recovery of the global economy is likely to impact on Vietnam’s export growth next year, while uncertain global oil prices and risks of inflation caused by adjustments in domestic healthcare and education services are resulting in macro-economic imbalances.
Meanwhile, Nguyen Thi Hong, Deputy Governor of the State Bank of Vietnam, said that inflation has “basically been stable”, although the central bank pumped a “relatively large” amount of money into the economy to support economic growth this year.
Hong added that the central bank has steadied treasury bill and government bond issuances with foreign exchange buys to assure appropriate monetary operations. State bond issuances alone have amounted to 250 trillion VND this year, in line with national quotas.
She also said that a change in the central bank’s operations of exchange rates, with the reference rate now adjusted daily, has reduced foreign currency speculation and eased pressure that could cause interest rate hikes.
Overall, credit growth is likely to reach targeted levels of 18-20 percent this year, she said.
Members of the council recommended that the Ministry of Planning of Investment build a set of criteria to assess the efficiency of investments more precisely. This will assure authorities have a clearer look about how to assist enterprises and foster economic growth.
Economist Tran Dinh Thien said although start-ups are now encouraged in national development schemes, new firms should not be established too hastily, because inventories and bad debt remain major issues that the country has to deal with.
HDbank named Vietnam’s best managed company
HDBank has won the award for the n Best Manged Company iVietnam in 2016 from the UK-based financial magazine, Euromoney.
It is its second straight win, the only Vietnamese company to do so.
HDBank won the award because it met all seven criteria – having a comprehensive and coherent business strategy, a competent corporate governance system, an accessible senior management, transparent accounting, useful and informative website, and corporate social responsibility and providing best value for shareholders.
The winners were chosen following a vote by 500 analysts from leading banks around the world.
Marcus Langston, editor-in-chief of Euromeny Asia magazine, told the awards ceremony in HCM City this week that HBBank and its subsidiaries achieved a combined pre-tax profit of 788 billion VND (35.3 million USD), a year-on-year increase of 27 percent.
Ninh Thuận to grow more grapes
The central province of Ninh Thuận plans to expand its grape cultivation area by 7,900 hectares, of which more than 2,550ha will be safe grape fields, according to the provincial People’s Committee.
Speaking on Saturday on the sidelines of the International Grape and Wine Festival being held in the province, Lê Văn Bình, vice chairman of the provincial People’s Committee, said the industry aimed to transfer technology, import more grape varieties and create a geographical brand for locally produced wine and grapes.
Bình said the province plans to create the country’s largest grape cultivation area.
However, he noted that a number of challenges remained, including climate change and poor facilities and technologies, which affected grape quality and productivity.
In addition, local grapes and grape products cannot compete with imported products.
So far only eight businesses have been certified as “Ninh Thuận grape” by the province’s grape association.
Many of the businesses are family-owned with limited cultivation area. Many of them fail to apply cutting-edge technologies in cultivating safe grapes.
The festival and seminar gave farmers an opportunity to learn from local and foreign experts about the latest technologies, and find markets for grapes and grape products, such as raisins, jelly, jams and wine.
According to Bình, the province should continue building a geographic brand for grape and grape products in Ninh Thuận in order to create a brand name for the products in the province.
Linkages among grape growers, producers and experts should also be strengthened to help improve the grape industry, he added.
Nguyễn Văn Mọi, vice chairman of the Ninh Thuận Grape Association, said the province should build a research centre for grapes and wine.
Mọi said the quality of wine was still low and that wine production lacked advanced facilities and technologies.
Wine production needs local raw materials instead of imports from other countries, he added.
He called on businesses to invest in technology transfer in grape cultivation for the farmers.
There are nearly 1,200 households cultivating grapes that conform to VietGAP standards with a total cultivated area of 280ha.
A local grape farmer, who declined to be named, said farmers in Ninh Thuận Province were facing many challenges, including a lack of raw materials for wine making, advanced technologies and stable outlets for their products.
So far, there are 46 businesses producing grape wine with an output of 230,000 litres per year, according to the province’s People’s Committee.
Each year, nearly 800 tonnes of grape and grape products and 15,600 bottles of wine and jelly are consumed.
The province has attracted three grape-cultivation projects with a total investment of VNĐ304 billion (US$13.54 million).
Grapes, which are a highly valued staple crop in Ninh Thuận Province, were first introduced to the province in 1960 and test-planted by the South Central Centre for
Agricultural Technical Research based in Ninh Sơn District. Commercial production began in the 1980s.
The province currently has more than 1,100 hectares of grape fields with an average yield of 25 tonnes of fresh grapes per hectare per year.
Marriott acquires Sheraton Hotels
Marriott International announced on September 30 it was expanding into 30 of the most desirable and prestigious hotel brands with the addition of the Starwood Hotels & Resorts portfolio.
The resulting new company will operate or franchise more than 5,700 properties and 1.1 million rooms, representing 30 leading brands from the moderate-tier to luxury in over 110 countries. With the completion of this acquisition, Marriott’s distribution has more than doubled in Asia and the Middle East and Africa combined.
“Throughout our nearly 90-year history we have never stopped searching for innovative ways to serve our guests,” said Mr. J.W. Marriott Jr., Executive Chairman and Chairman of the Board of Marriott International. “With the addition of Starwood’s strong brands, great properties, and talented people, we have dramatically expanded our ability to provide the best experiences to our customers.”
“We also welcome the tremendous responsibility as the world’s largest hotel company to be a good global steward, providing new opportunities for our associates and building the economic strength of the communities we call home.”
Members of Marriott’s leading loyalty programs, Marriott Rewards – which includes The Ritz-Carlton Rewards – and Starwood Preferred Guest (SPG) are also invited to link their accounts at members.marriott.com to enjoy the benefits, recognition and experiences each program has to offer.
Members will have their status matched across programs and be able to transfer and redeem points across programs for travel to more destinations than ever before.
“We believe that Marriott now has the world’s best portfolio of hotel brands, the most comprehensive global footprint, and the most extensive loyalty programs, providing an unparalleled guest experience,” said Mr. Arne Sorenson, President and CEO of Marriott International. “Combining Starwood’s brands with ours better enables Marriott to reach its goal of having the right brand in the right place to serve our loyal guests and welcome new ones.”
“We can now provide a better range of choices for our guests, more opportunities for our associates, and greater financial benefits for our owners, franchisees, and shareholders.”
Members who link their accounts will be able to transfer points at a three-to-one ratio (three Marriott Rewards points equals one SPG Starpoint) between the programs for redemption stays or on the Marriott Rewards Experiences Marketplace or SPG’s Moments platform.
Marriott International is the world’s largest hotel company and based in Bethesda, Maryland, in the US, with more than 5,700 properties in over 110 countries. It operates and franchises hotels and licenses vacation ownership resorts.
Vietjet offering 1 million cheap tickets on Online Friday
Vietjet Air will offer 1 million super-cheap tickets during the “Vietnam’s Autumn Online Friday” event on September 30 for travel on all its domestic and international flights from October 30 to March 31, 2017.
The 1 million tickets are priced from just $0 and are on sale from 12pm to 2pm and from just $3 at other times on September 30.
Its new Ho Chi Minh City – Hong Kong route starts on December 9 and Ho Chi Minh City – Kaohsiung and Hai Phong – Seoul on December 12.
The promotional tickets can be booked at www.vietjetair.com, compatible with smartphones, or at Vietjet’s Facebook page (click the “Booking” tab). Payment can be easily made with debit and credit cards of Visa, MasterCard, JCB, and American Express and ATM cards issued by 29 Vietnamese banks that have been registered with internet banking.
According to Mr. Desmond Lin, Vietjet’s Business Development Director, it provides not only transport services but also uses the latest e-commerce technologies to offer various products and services for consumers. “The ‘Online Friday’ event provides a lot of benefits for online shoppers and is expected to be organized more often to meet increasing online shopping demand,” he said.
Vietnam’s spending deficit reaches VND154.2 trillion
Vietnam’s budget deficit in 2016 as of September 15 was estimated at VND154.2 trillion (nearly US$7 billion), according to the General Statistics Office.
Official figures show expenditure during the period reached VND819.4 trillion (US$36.9 billion), of which more than 70% went to regular spending (expenditure for the operation of the State apparatus).
Meanwhile revenues as of mid-September reached VND665.2 trillion (US$29.9 billion), with those contributed by State-owned enterprises equal to 53.1% of the estimate for the whole year as enterprises in the mining and hydroelectricity sectors continued to struggle.
In general, government income in the first nine months of the year failed to meet expectations as a result of falling oil prices and shifting trade patterns due to Vietnam’s participation in new free trade agreements.
HSBC warns Vietnam of rising price pressure
HSBC Bank has warned that increasing price pressure is posing upside risks to inflation and leaving little scope for fiscal and monetary easing, thus weighing on the country’s outlook over the near term.
In a macro-economic report released on September 28, the bank’s Global Research team said inflation is not a major concern as of now because it remains controlled under the 5% target. However, price pressure is mounting.
Inflation is on the rise, having ticked up 3.3% in September. Meanwhile, core inflation also edged up to 1.9% year-on-year after easing marginally in August.
Both food and fuel prices nudged up during the month. The report said adequate supply helped ease food prices in August, but then climate and soil conditions caught up and pushed food inflation a notch higher.
On August 20, Vietnam’s fuel traders adjusted up fuel prices in line with global oil prices. Retail gasoline costs were 5-7% higher with RON 92 up by 4.6% and bio-fuel E5 grew 6.8% while diesel rose by 2%. Coming late into the month, the impact was felt more on the September inflation reading.
The start of the new school year also led to a significant surge in education prices, as many provinces revised up tuition fees to implement a government decree issued last year.
Inflation is likely to feel the push from increased money supply as well given robust credit growth, HSBC explained.
Furthermore, the National Wage Council has decided upon a 7.3% average increase in monthly minimum wages across Vietnam for 2017. Although this is the lowest annual rise since 1997 and seems to be a compromise between the employers’ proposed increase of 5% and that of workers, who pushed for an 11% hike, it is far still above the current inflation rate and may thus prompt second round price gains.
Growing price pressure limits the scope for further monetary easing in Vietnam, the report said.
Meanwhile, although the financial system has adequate liquidity now, lending rates charged by banks remain “sticky”; lenders continue to be cautious given that loan impairments have increased again in recent months.
The State Bank of Vietnam is encouraging credit institutions to increase lending while suggesting that they should focus on priority sectors, including production and trading activities, rather than real estate.
According to the National Financial Supervisory Commission (NFSC), the budget deficit as of August 15 had neared VND111.5 trillion (US$4.9 billion), equivalent to about 44% of the estimate for the entire year. However, the pressure on the budget deficit will likely increase in the remaining months as infrastructure investment is expected to accelerate following a government resolution to the effect.
On the other hand, revenue collections from crude oil and State-owned enterprises (SOEs) are falling behind due to lower fuel prices and stagnant divestments of the Government’s stakes in SOEs. Until August, the average selling price of crude oil was US$41 per barrel, well below the projected price of US$60.
According to the Ministry of Finance, VND10 trillion, only a third of planned divestment revenues, was raised in the first eight months of the year.
Despite these challenges, HSBC said Vietnam’s growth prospects remain promising. For example, the country has signed numerous trade deals, including those with South Korea, Japan and the European Union.
Vietnam is also trying to quicken the sale of State-owned enterprises, as it needs the money to offset the budget deficit and reduce swelling public debt. As part of a massive divestment push, the country also lifted the cap on foreign ownership in certain sectors.
Ministries told to revise cement industry strategy
Deputy Prime Minister Trinh Dinh Dung has told the ministries of industry-trade and construction to work with relevant ministries and agencies to review and revise the zoning plan for mineral mining for cement production and the cement industry development strategy to meet actual demand.
There remain many outdated points in the zoning plan for exploration and exploitation of minerals used to make cement until 2020 as approved by the Prime Minister in Decision 1065/QD-TTg in 2010.
The Ministry of Construction was quoted by the Vietnam News Agency as saying that there have been additions to the zoning plan but recent geological surveys of mines showed many changes. Therefore, the revision of the zoning plan is necessary.
The cement industry development strategy has well met demand since 2011, according to the construction ministry. On top of that, the Government has approved removing 14 cement projects with a daily capacity of less than 2,500 tons of clinker each, equivalent to 910,000 tons of cement a year from the strategy.
The construction ministry is working on the cement industry development strategy for the 2017-2035 period with a vision towards 2025 and a revised zoning plan for mineral mining for cement production to replace the current ones.
The new zoning plan and development strategy for the cement sector must match the country’s socio-economic performance, and the market conditions as ordered by the Government. The ministry will propose policy incentives, demand stimulus and market stabilization policies and the addition of viable projects for the Government to consider and approve.
The construction ministry will collaborate with provinces and cities to look into the investment and exploitation of minerals for cement production, supply and demand for linker and cement as well as using heat at cement plants for electricity generation.
More than 70 operational cement production lines can produce a total of up to 82 million tons a year but consumption is about 10 million tons lower than supply.
Haraco, Vietnam Air join forces to lure tourists
Hanoi Railway Transport Joint Stock Company (Haraco), Vietnam Airlines and the HCMC Tourism Association have inked a cooperation deal to provide train and air services for people to travel between HCMC and northern Vietnam.
The deal is expected to help the railway sector lure more customers amid mounting competition from domestic low-cost carriers.
Nguyen Thi Khanh, vice chairwoman of the association, said the three sides have cooperated in organizing a trip from HCMC to Hanoi by train and a return trip by plane. The tour took in tourist attractions in the northwestern region.
Such a tour is scheduled to be made available on the market late this year.
Long travels and high fares are the major problems of railway services. “Compared to services offered by low-cost carriers, traveling by train is much less competitive, so the three sides have partnered to solve the problems,” Khanh said.
Last year, Saigon Railway Transport Company cooperated with the association to serve tourists from HCMC to destinations in the central region. The company initially cut fares by 20% but later raised the discount rate to 35% for travel firms to launch cheaper tours.