Seafood exports down in Q1
Vietnam’s seafood exports are predicted to experience a year-on-year decrease of 13 percent to US$1.15 billion in the first quarter of this year.
The Vietnam Association of Seafood Exporters and Producers (VASEP) said the country’s tra fish and shrimp exports haven’t seen any promising signs so far this year.
By mid-January, the country earned only US$63.38 million from tra fish exports, a year-on-year drop of 20.7 percent.
Due to a sharp reduction in exports to major markets such as the European Union (EU), the US, ASEAN, Mexico and Brazil, fluctuations in domestic prices and difficult access to capital by tra fish farmers, the nation is likely to earn only US$230-250 million from tra fish exports in the first quarter of the year.
In the meantime, around 30 percent of the total 300 shrimp exporting enterprises that contributed 36-38 percent of the country’s seafood export value had to halt their operation for lack of capital to buy raw materials at an exorbitant price. The remaining businesses have been operating at half capacity.
VASEP has forecast three scenarios for shrimp exports this year. The revenue will reach US$2.4 billion if the country properly solves the early mortality syndrome (EMS) in shrimps, the competition in buying raw materials, export market and the Ethoxyquin barrier. It will be US$2.2 billion if EMS and the Ethoxyquin barrier are solved, and US$1.9 billion if the two problems remain.
Because of a likely reduction of 20-30 percent in shrimp output in the first quarter of the year, the application of the barrier on the acceptable level of Ethoxyquin content, an antioxydant, in Japan and the Republic of Korea and the US’s launch of anti-subsidy lawsuit against Vietnam. The country’s shrimp exports are estimated at US$360 million in the first three months of the year, a year-on-year decrease of 18-20 percent.
Businesses forecast shrimp exports at just US$1.9 billion in revenue this year due to the outbreak of diseases since 2011.
Meanwhile, Chairman of VASEP Shrimp Committee Ho Quoc Luc said he was not optimistic about the US$2.4 billion forecast, adding that it was difficult to predict as the cultivation depends largely on the weather.
The export value will hover around US$1.9-2.1 billion if the unfavourable weather and diseases occur this year, he added.
At present, he said, shrimp farmers need the Government’s support as the processing businesses do not have mortgages to borrow loans.
On Feb. 15, the Hung Vuong and Go Dang Joint Stock Companies prepared their first batches of tra and clams worth US$2.5 million for export to Europe and the Middle East.
Earlier, the Hung Vuong Company shipped 30 containers of tra fillets worth US$2 million to Europe and the Go Dang JC Company, 200 tonnes of tra fish and clams worth US$500,000 to China.
General Director Nguyen Van Dao of the Go Dang JC company said tra fish consumption is growing not only in Europe and the Mid-East but also in Asia and America.
Wood processing plant built in Nghe An
The Thang Nam (May) Forestry Joint-Stock Company on February 19 began construction of a wood and fibre-board processing plant in central Nghe wooAn province.
The plant, the most modern of its kind so far in Southeast Asia, has a total investment of US$500 million. It will have a capacity of 8,800 cubic metres per year of wooden slats and 400,000 cubic metres per year of MDF planks.
Designed by Japan’s New CC Construction Consultants and managed by Royal Haskoning firm from the Netherlands, the plant will use advanced technology and production lines provided by Germany’s Diffenbacher Group, the world’s leading supplier of wood processing equipment.
It is expected to become a model of sustainable forestry development for environmental protection, that helps generate jobs and raise incomes for people in the western districts of the province.
The first phase of the plant is scheduled to start in the first quarter of 2014 and its second phase in 2017.
Haiti media hails Viettel’s contributions
Haiti has lauded Viettel, one of Vietnam’s leading telecommunications groups, for its contributions to the Latin American and Caribbean country’s breakthroughs in the sector.
The e-newspaper Haitilibre.com published an article on February 18 noting Viettel heavily invested in establishing the NATCOM joint-venture telecommunications company —Haiti’s largest foreign direct investment project since suffering the tragic earthquake in early 2010.
Since launching services in September 2011, NATCOM’s 3,500km broadband fiber optic cable network has revolutionised Haiti’s telecommunications, enabling high-speed videoconferencing and 3G mobile internet access nationwide.
Japan’s Aeon expands operation in Vietnam
Aeon, the leading Japanese retail and financial services corporation, has announced its US$1.5 billion investment plan to build 20 shopping malls across Vietnam by 2020.
Aeon’s first shopping centre is expected to be opened to the public in Celadon urban area in Ho Chi Minh City in January 2014. The second is scheduled for October of the same year in Canary urban area in southern Binh Duong province.
Hanoi will see the first Aeon shopping mall in 2015, said Aeon Vietnam General Director Yasuo Nishitohge.
In 2011, the Japanese group received the Ho Chi Minh City People’s Committee’s investment license to realise its plan of establishing a chain of shopping malls in Vietnam, though it set foot in the country several years ago.
Aeon has already partnered with a Vietnamese business to launch a Ministop convenience chain with 17 shops in Ho Chi Minh City thus far.
As the largest retail and financial services corporation in Asia-Pacific, Aeon earned about US$62 billion in revenue last year, from 12,000 shopping centres and outlets.
High expectations for FDI attraction
A new policy drafted by the Ministry of Planning and Investment and relevant agencies is expected to fuel foreign direct investment (FDI) flows into Vietnam.
The Prime Minister recently asked the designated agencies to draft a resolution aimed at improving the efficiency of FDI attraction, use and management till 2020.
The resolution focuses on amendments to current policies to create the best possible conditions for foreign businesses to operate in the long term and to ensure Vietnam’s investment climate is as attractive as those of other countries in the region.
Foreign businesses are expecting the issuance of this resolution to facilitate their operations in the country.
The Japan External Trade Organisation (JETRO) has forecast that there would be a third wave of Japanese investment into Vietnam this year.
Hirokazu Yamaoka, chief representative of JETRO Office in Hanoi, quoted the result of a recent survey, saying an increasing number of Japanese investors are confident of their improved performance in Vietnam in 2013.
He revealed that Japanese investors plan to expand operations in the areas of information technology, software development, retails, and medical services, alongside the current manufacturing and processing industries in the country.
Among 17 foreign investors in Vietnam in January 2013, Japan took the lead, pouring US$157.7 million into newly-licensed and existing projects, making up 56.1 percent of the country’s total.
It was followed by Thailand (US$54.2 million or 19.3 percent) and France (US$20 million or 7.1 percent).
Overall, foreign businesses invested US$280 million in eight industries in Vietnam last month. The manufacturing and processing industries attracted the most investment capital amounting to US$202.9 million.
The real estate and sci-tech development sectors came in second and third, attracting US$50 million and US$13.9 million from newly-licensed and existing projects, respectively.
Government supports rice stockpiling
The prime minister has approved a plan to buy one million tonnes of winter-spring rice between February 20 and March 31 for temporary stock in the Mekong Delta region.
The Government will cover 100 percent of interest rates for loans businesses take out from banks to buy rice for reserves in a three-month term, from February 20 to May 20.
The Government has asked the Vietnam Food Association (VFA) to instruct food enterprises to purchase rice in accordance with market prices.
The Ministry of Finance and State Bank of Vietnam will provide capital for the sales.
The Ministry of Agriculture and Rural Development (MARD) will cooperate with the VFA, the Ministry of Industry and Trade (MoIT), and provincial and municipal People’s Committees in the Mekong Delta to develop mechanisms for inspection and management of the rice sales for temporary stock.
Petro Vietnam signs joint venture with Singapore Company
On February 8, Petro Vietnam, an oil and gas company of Vietnam, signed an agreement with a Singapore Company to set up a joint venture company to construct oil rigs.
As per the contract, the Oil and Gas Drilling Joint Stock Company–PV Drilling, a member of Petro Vietnam and the Falcon Energy Group of Singapore will establish the Overseas PVD Joint Venture Company to build a new generation jack-up rig, expected to be in operation by end of 2013.
Previously, on February 4, P.V.P, a joint venture between two PVN affiliates, Petro Vietnam Technical Services Corporation and Petro Vietnam Construction Joint Stock Corporation, co-operated with Vietnam Waterway Construction Corporation to sub-contract a dredging project for UK’s Boskalis International BV.
The 20-month project will dredge downstream sections of the Nghi Son Refinery Port.
Four days later, PV Drilling, another PVN member, signed a contract with Singapore-based Falcon Energy Group Limited to build a new version of the jack-up oil rig that is expected to be complete by the end of this year.
Petro Vietnam intends to increase international co-operation in coming years and focus on foreign investment and export of technical services. In doing so, the group will reinforce a trend set over the last few years.
Up to now, Petro Vietnam has signed 49 investment co-operation agreements and implemented 22 contracts in 13 countries including exploration of the Nhenhexky oil field in Russia, the Giunin 2 oil field in Venezuela and a hydropower project in Luang Prabang in Laos.
Since 2007, Petro Vietnam has been extracting oil from the Nhenhexky oil field as well as from the SK 305 lot in Malaysia.
Petro Vietnam will soon get crude from four other fields–Nam Rong-Doi Moi and Pearl in Vietnam, and D30 and Dana in Malaysia.
“In coming times, with a target of speeding up development and restructuring, Petro Vietnam will increase co-operation with foreign partners to start potential projects,” said Do Van Hau, director general of Petro Vietnam in an interview with Saigon Giai Phong newspaper.
At present, Petro Vietnam has 40 co-operation projects– the Nam Con Son 2 gas pipeline; the Thai Binh 2, Hua Na and Nhon Trach 1 thermal power plants; the Phuoc An Port; and the Dung Quat Shipyard among them.
Saigon Bridge 2 to be complete this year
During a survey of major traffic construction projects on February 18, Tat Thanh Cang, director of the City Department of Transport and Le Vu Hoang, director-general of Infrastructure Investment Joint Stock Company, confirmed that Saigon Bridge No.2 would be complete by end of this year.
Constructions of all the main bridge foundation bases are already complete.
In addition, the building team of GS Engineering Construction Corporation has already finished 55 percent of the project.
At present, there is pressure to complete the 7.4 kilometre stretch cutting across Go Vap, Binh Thanh and Thu Duc Districts, so as to ease areas under heavy traffic.
The new Saigon Bridge 2 will be the same length as the existing Saigon Bridge–which is 987.32 meters long and 23.5 meters wide. The new bridge will be able to withstand a 7 magnitude earthquake, according to the MSK-64 Seismic Scale.
The project also includes a 350 meter long approach ramp from Binh Thanh District and another 117 metre long approach ramp from District 2.
Gov’t to stockpile rice in Mekong Delta
The Prime Minister has approved the purchase of one million tons of winter-spring rice from February 20 to May 20, for temporary stockpiling in the Mekong Delta.
Furthermore, the Government will cover 100 percent of interest rate on loans for businesses to buy rice for a three-month term, from February 20 to May 20.
With this move, farmers in the Mekong Delta hope that rice prices will stop fluctuating or go up.
Before and after Tet, farmers in the Mekong Delta harvested an early spring crop and are preparing to harvest the summer-autumn crop in March, and also hoping to sell the huge amount of paddy already stored in their houses.
At the moment, traders are buying paddy at VND4,200-4,400 per kg depending on variety, but the number of traders buying are small.
Meanwhile, rice farmers are eager to sell paddy to cover expenses needed after Tet.
“I hope the price of rice will increase after the state buys rice for temporary storage,” said farmer Dien Van Banh from Phuong Binh Commune in Phung Hiep District of Hau Giang Province.
Mekong Delta provinces harvested 150,000ha of the spring crop, which accounts for about 10 percent of the rice area in the region.
Paddy output from this crop is expected to be about 10 million tons, of which 6-7 million tons will be sold out.
The Government will buy one million tons of rice for temporary storage, equivalent to two million tons of paddy, or about 30 percent of the total amount of paddy needed for sale in the region.
The Government has asked the Vietnam Food Association to instruct food enterprises to purchase rice at market price.
The Ministry of Finance and State Bank of Vietnam will provide capital for the purchase.
The Ministry of Agriculture and Rural Development will cooperate with Vietnam Food Association, the Ministry of Industry and Trade, and provincial and municipal People’s Committees in the Mekong Delta to develop mechanisms for inspection and management of the rice sale for temporary stockpiling.
The Ministry of Agriculture and Rural Development is planning to build a national rice reserve of 100,000 tons to stabilize distribution and meet demand when market price fluctuates, for which a plan will be submitted to the Government.
Additional efforts to stabilize the rice market include government approval of the Finance Ministry’s proposal to a plan on imposing absolute tax on rice and urea fertilizer exports from June 2008.
The Ministry of Industry and Trade said that rice prices are unlikely to fluctuate from now until the end of the year because Vietnamese farmers are expecting bumper crops this year.
However, distribution can cause a price rise, which necessitates an urgent adjustment of distribution activities, said the Ministry.
The recent shortage of rice shows that enterprises are focused mainly on exports; in addition, the current tax policies have failed to encourage enterprises to participate in the domestic market.
In the first five months of the year, the country exported more than 2.1 million tons of rice out of 2.4 million tons under signed contracts.
Ancient Hoi An Town sees rush of tourists during Tet
More than 15,000 local and foreign holidaymakers visited ancient Hoi An Town in Quang Nam Province during the first three days of the Tet festive season.
Sunset on the ancient town
After town authorities opened free tours of the town for the first three days, more than 3,200 tourists bought tickets on the fourth day.
Within two days, the town sold nearly 7,000 tickets to holidaymakers of which 5,500 were to international visitors, earning revenue of VND750 million ($36,000).
Nguyen Thi Nhung, head of the tourist management board, said most of the international visitors were South Koreans and Chinese, while some were European.
Hoi An Town has 1,360 relics and ancient sites. These relics are of eleven categories that include 1,068 ancient houses, 19 pagodas, 43 temples, 23 communal houses, 38 family temples, 5 assembly halls, 11 old wells, one bridge and 44 ancient tombs.
In the old quarter, there are more than 1000 relic sites that include the Japanese Covered Bridge, Quan Thang ancient house, Tan Ky ancient house, Phuc Kien, Trieu Chau, Quang Dong Assembly hall, Ong Pagoda, Tran family temple, Historical Cultural Museum, Sa Huynh Cultural Museum and the Pottery Museum.
PetroVietnam looks to enhance co-operation with global partners
PetroVietnam (PVN) will increase international co-operation in coming years and pay more attention to attracting foreign investment and exporting technical services, senior officials say.
In doing so, the group is reinforcing a trend that it has set over the last few years, they add.
On February 4, P.V.P, a joint venture between two PVN affiliates, Petro Vietnam Technical Services Corporation (PTSC) and Petro Vietnam Construction Joint Stock Corporation (PVC), co-operated with the Vietnam Waterway Construction Corporation (Vinawaco) to sub-contract a dredging project to the UK’s Boskalis International BV.
The 20-month project will dredge downstream sections of the Nghi Son Refinery’s port.
Four days later, PV Drilling, another PVN member, signed a contract with Singapore-based Falcon Energy Group Limited to build a new version of the jack-up oil rig that is expected to be completed by the end of this year.
To date, PVN has signed 49 investment co-operation agreements and implemented 22 contracts in 13 countries including exploration of the Nhenhexky oil field in Russia and the Giunin 2 oil field in Venezuela, as also a hydropower project in Luang Prabang, Laos.
Since 2007, PVN has been extracting oil from the Nhenhexky oil field as well as the SK 305 lot in Malaysia.
PVN will soon get crude from four other fields: Nam Rong-Doi Moi and Pearl in Vietnam; and D30 and Dana in Malaysia.
“In the coming time, with the target of speeding up development and restructuring, PVN will increase co-operation with foreign partners to start potential projects,” Do Van Hau, general director of PVN was quoted as saying by the Sai Gon Giai Phong (Liberated Sai Gon).
At present, PVN has 40 co-operation projects in the Nam Con Son 2 gas pipeline; the Thai Binh 2, Hua Na and Nhon Trach 1 thermal power plants; the Phuoc An Port; and the Dung Quat Shipyard.
Firms expand operations despite economic difficulties
Several firms have decided to expand their business despite unpromising forecast for this year.
Instead of bold investment, several enterprises have been more cautious in their decisions by renting factories and making full use of their own capital.
After the Tet holiday, Thieu Le Binh, Director of Golden Woods Vietnam in Dong Nai Province’s Bien Hoa City was rapidly recruiting an additional 50 workers to operate their furniture production plant.
Despite being a new investor in the furniture industry, the company has still found new opportunities amid difficult circumstance.
“Where someone sees difficulties others may find opportunities. Outlets for products are the most important thing and luckily we’ve got our first orders,” Binh said.
Foreseeing possible challenges to their business, the company has decided to rent a factory instead of building a new one.
“Several furniture companies abandoned their factories in the recent period, so we’ve decided to rent their infrastructure to save on investment costs,” he noted.
The factory is expected to churn out its first products on February 18, for exports to the Europe. In order to meet the order schedule, they have decided to outsource part of their products before recruiting enough workers.
Huynh Hieu Dung, director of a private firm in HCM City’s Binh Thanh District said despite decreased revenues last year, he had decided to expand business since early this year.
Dung’s company has specialised in car leasing and second-hand car trading for four years.
“I hope that with the government’s involvement, the economy will gradually rebound. Despite forecasted difficulties, I think this is a good time to invest. I will open some new branches across the city after investing VND1.5 billion (USD71,873) into each branch,” Dung said.
While having a great demand for capital for the investment plans, Dung tried to make full use of his own capital instead of taking out high-interest loans.
Diep Nhat Thanh Giao, deputy director of the Dinh Nguyen Anh Limited Company said he was in desperate need of capital for new investment plans, but wouldn’t use bank loans.
“We are specialising in advertising, so we often get payments after delivery. Any delayed payment could add to our difficulties,” he said.
Tran Ai Thien Huong, general director of My Vinh International Investment Consultancy Company said this year would be a good chance for keen investors. Apart from current markets in the US and South Africa, her company plans to expand their operations into China and Myanmar during the year.
Lawyer Tran Le Tien, head of Khanh Tran Law Firm in HCM City said the number of new investment projects and projects upping their investments was the same as previous years. Most investments had been poured into the trade and service sectors this year instead of construction materials as last year.
Nguyen Thanh Long, from Hanwa Kakoki Joint Stock Company in HCM City said despite difficulties in China and Japan last year, his company had decided to invest in Vietnam this year.
“We’ve decided to open a representative office in Vietnam this year. We will import industrial machines from Japan to Vietnam for sale,” he added.
Concerning the garment and textile industry, several foreign investors have been building factories and opening offices in Vietnam.
A fibre joint venture between Vietnam and Australia has invested in a plant with a capacity of producing 80,000 products per year in HCM City’s Tan Phu Trung Industrial Park. The company plans to begin operations this year.
Fisheries cast nets in rough waters
While the nation’s tra fish industry is likely to face many of the difficulties that it was beset by in 2012, there are some hopeful signs for this year, industry insiders say.
Duong Ngoc Minh, deputy chairman of the Viet Nam Association of Seafood Exporters and Processors (VASEP), said the recent decline in production of seafood including salmon, African carp and tra fish and the rising prices of pork, beef, chicken and other foods are likely to force countries to import cheaper foodstuffs.
This month, European countries and the US began to increase imports of Viet Nam’s tra fish products that meet Global Gap and ASC standards, he noted.
The prices of tra fish have risen by five to 10 US cents per kilo, he added.
The increase in EU and US imports of tra fish could also have to do with the fact that prices of the fish and its products have fallen in Viet Nam, Minh said.
He reiterated that despite the hopeful signs, the tra fish industry, which had faced its toughest year yet in 2012, would continue to face many difficulties this year.
Export revenues from tra fish products amounted to US$1.74 billion in 2012, 3.4 per cent less than the previous year.
Although the total export of tra fish rose by 10 per cent in 2012, seafood export turnover had declined due to the global economic downturn and a 20 per cent increase in production of all seafood products including African carp, salmon and tra fish, leading to an oversupply situation.
Minh, who also heads the Viet Nam Freshwater Fish Committee under VASEP, said: “Last year was a very difficult year for Viet Nam’s seafood sector, especially for production and consumption of tra fish.”
All production costs increased in 2012, including a 10 per cent increase in fish feed prices, a spike of more than 30 per cent in transportation fees, higher labour costs as well as high interest rates on bank loans.
“2012 was a hard year when both tra fish processors and farmers faced great difficulties,” Minh told the Sai Gon Giai Phong (Liberated Sai Gon) newspaper.
“Not only in Viet Nam, farmers in other seafood producing countries like Egypt, Chile, China, Norway, Russia and the US faced the same situation.”
Tran Thanh Hai, head of the Can Tho Aquaculture Division, said tra fish (as raw materials) was now selling at VND21,000 per kilo while the production cost was between VND24,000 to VND25,000 per kilo.
“Tra fish farmers are incurring losses,” Hai told Viet Nam News in an interview earlier this week.
“Without a new policy, the local tra fish industry will encounter the same problems as it faced last year,” he said.
At a 2012 review meeting held several weeks ago, VASEP had said that Viet Nam’s tra fish production this year could actually drop to as much as 800,000 tonnes this year, compared to 1.28 million tonnes in 2012, leading to a shortage of raw materials for tra fish processing plants in the country.
This is also a warning for exporters who have sold their fish at lower prices because there will be no more raw material offered at low prices, the association said.
In 2013, prices of tra fish products could go down by five to 10 per cent because of lower interest rates for bank loans and lower prices of animal feed ingredients such as soy meal, cassava and rice bran (down by over 15 per cent compared with late 2012).
Minh said these are signs that feed prices would go down in March and drop further in June and July.
The situation should be seen as an opportunity for the Tra Fish Production and Consumption Association in the Mekong Delta to come up with a strategic development plan for the industry in the coming years, he said.
National tourism plan seeks to draw more visitors
The recently approved National Action Plan on Tourism aims to attract about seven million foreign tourists and about 37 million domestic tourists in 2015.
This will draw revenue of 10-11 billion dollars for the tourism industry.
The plan aims to develop core areas such as sea and island tourism, cultural tourism and eco-tourism. It also strives to build a strong brand for the tourism sector. According to the plan, localities and enterprises will receive support to develop their own brands and a number of communications campaigns will promote tourism in Viet Nam.
The plan also seeks to reduce the environmental impact of tourism activities and improve available human resources.
State promotes bond swaps
The State Treasury will enhance implementation of the Government bond swap programme this year with the goal of restructuring bond portfolios on the market to promote market liquidity, said the Treasury’s Deputy Director Tran Minh Hang.
“The pilot programme targets bonds that have two years to mature in order to reduce the amount of listed bond codes, thereby increasing the bond listing value, which will improve liquidity for the market,” Hang was quoted as saying in Hai Quan (Customs) newspaper.
According to the programme, the swaps will facilitate investors who want to restructure their bond portfolios to simultaneously buy and sell two different bond codes while issuing bonds at the same time.
Since Circular No 150 on guiding Government bond swaps, which took effect on December 2011, the State Treasury has organised only three swap phases, reducing seven bond codes and raising the listing value of four codes.
This is a modest result as there are about 500 registered bonds on the market while the value of bond codes is rather small, and varies from billions of dong to trillions of dong.
Hang said that in 2013, the State Treasury would actively co-ordinate with other relevant organisations to negotiate reasonable swap prices with bond holders in a bid to avoid raising the Government’s debt and liability.
In addition, the State Treasury will continue to issue bonds in large batches, ensuring a bond size of VND5-8 trillion (US$239-$383 million) a code and of VND2-3 trillion ($96-$144 million) for each treasury bill.
At the same time, it will allow trade of bonds that have yet to reach investor accounts and issue of zero coupon bonds (bonds that do not pay interest during the life of the bonds).
This year, the State Treasury will also focus on raising capital for the State Budget and development projects. It has announced a plan to issue G-bonds this year ahead of bids and auctions to increase transparency and efficiency of the issues.
Last year, mobilisation of G-bonds hit a record value of over VND140 trillion ($6.7 billion), while the bond market’s value reached nearly 20 per cent of the country’s GDP.
Approval of Cai Tac trade center plan revoked
The People’s Committee of the Mekong Delta province of Hau Giang has revoked its in-principle approval of the Cai Tac Shopping Centre project in Chau Thanh A District.
The project investor, Dat Vang Real Estate Joint Stock Co, had been granted a site of over 30,000 square metres, but the provincial Department of Planning and Investment has reported that the investor was undergoing financial difficulties and would be unable to carry out the project.
Japan shopping centre developer targets Viet Nam
Japanese retail and financial services corporation Aeon has announced a US$1.5 billion plan to build 20 shopping malls across Viet Nam by 2020.
The first mall is to open in the Celadon urban area in HCM City in January 2014. The second would be scheduled for October of the same year in the Canary urban area in the southern province of Binh Duong.
Ha Noi would see its first Aeon shopping mall in 2015, said Aeon Vietnam general director Yasuo Nishitohge.
The HCM City People’s Committee’s granted an investment license to Aeon in 2011 to realise its plan for a chain of shopping malls in Viet Nam. Aeon had previously partnered with a Vietnamese company to launch a convenience store chain with 17 shops in HCM City so far.
As the largest retail and financial services corporation in Asia-Pacific, Aeon earned about US$62 billion in revenue last year, from 12,000 shopping centres and outlets.
First private carrier enters global aviation market
VietJetAir has launched its latest route connecting HCM City to Bangkok, becoming the first private airline from Viet Nam to enter the international market.
The new route would give greater exposure to both Thailand and Viet Nam and help boost tourism flows, said Chutathip Chareonlarp, Director of Tourism Authority of Thailand’s HCM City Office, during the launch ceremony last week.
This is the carrier’s 10th route since arriving on the scene in late 2011. VietJetAir’s domestic network currently includes HCM City, Ha Noi, Da Nang, Phu Quoc, Hue, Nha Trang, Vinh and Hai Phong. The airline is now planning to open more international routes connecting HCM City and Ha Noi to destinations around Asia later this year.-
Firms to enjoy faster customs process
The General Department of Viet Nam Customs aims to recognise eight more enterprises as “authorised economic operators (AEO)” this year, bringing the total number nationwide to 20.
Viet Nam first launched a pilot programme during the middle of 2011, offering preferential customs procedures to eligible enterprises that become recognised as AEOs.
Candidates for AEO status must be on the list of lowest risk companies and satisfy various conditions, such as having an import-export turnover of at least $100 million per year for domestic aquaculture/agriculture or crude oil products and at least US$500 million per year for all other sectors. Turnover limits for high-tech companies were to be decided on a case-by-case basis.
The pilot project was seen as an important step in reforming customs in preparation for integration into regional and international arenas, because the AEO programme is a core part of the World Customs Organisation’s Framework of Standards to Secure and Facilitate global trade.
The organisation encourages nations to apply the programme, whereby customs officials will trust the operator and perform fewer or no inspections on goods imported or exported by or via the AEO. This benefits the mover of the goods, as they become available more quickly, thus lowering transport costs.
In Viet Nam, AEOs can receive special preferences including exemption from inspections of detailed customs documents and goods, as well as obtaining tax refunds before documents have been audited.
Customs offices assign staff to help the enterprises solve any arising problems as soon as possible.
The eligible enterprises are also able to perform e-customs 24 hours a day, seven days a week and pay customs tax and fees on a monthly basis through their banks.
In 2011, the first nine enterprises were given these preferences. The import/export values of the AEO enterprises in 2011 was US$20 billion, accounting for 9.9 per cent of the country’s total import/export value. Last year, three more enterprises were added to the list.
So far, the 12 AEOs consist of five foreign enterprises and seven domestic ones, a tiny number considering the 40,000 enterprises operating in Viet Nam’s import/export sector.
“Positive responses from AEO enterprises have helped speed up the expansion of the programme this year,” said Director of the General Department of Customs Nguyen Ngoc Tuc.
For example, the processing time for customs clearance of goods has been reduced from two hours to just ten minutes, helping to save money, as well as storage space.
One AEO, Canon Vietnam, reported that it saved about $213 per month or $2,556 per year thanks to the preferences. Another AEO, Japanese-invested Sumidenso Vietnam Co, reported monthly savings of $1,850.
According to Brother Industries (Vietnam) Co Ltd, gaining an AEO certificate not only helped it save roughly $8,200 per month but also gain partners’ trust, thus expanding their production.
Quoted in Hai quan ( Customs) newpaper, Vietsovpetro’s General Director Nguyen Huu Tuyen said the preferences were reasonable, providing positive changes to customs administration and inspiring enterprises to achieve AEO recognition.
Thanks to the preferences, Vietsovpetro could receive goods even on weekends, while it also made the more pro-active in production and trade, especially for projects with strict deadlines, he said.
“The AEO programme not only helps us reduce cost but also improve our prestige,” he said.
Director Tuc said that Viet Nam was planning to sign agreements with other countries on mutually recognising AEOs, thus helping them benefit both from domestic preferences and those from partner countries.
Rice buys to help keep prices stable
Food enterprises have begun purchasing one million tonnes of rice from the winter-spring crop to serve as a temporary reserve and stabilise prices as ordered by the Government, according to the Viet Nam Food Association (VFA).
Truong Thanh Phong, VFA chairman, said the association told its member companies to buy paddy at VND5,000 a kilo or more.
The price of rice is expected to increase next week when food companies implement the temporary reserve scheme.
Before and after Tet (Lunar New Year) holiday, farmers in the Cuu Long (Mekong) River Delta started to harvest rice from the winter-spring crop.
Currently, traders have bought paddy from fields at VND4,200-4,400 per kilo, depending on the type of rice.
According to the Cultivation Department, as of February 18, about 400,000 ha out of 1.55 million ha under the winter–spring rice crop in the Mekong Delta were harvested, with an average yield of 6.5-6.7 tonnes per ha.
Huynh The Nang, deputy chairman of An Giang Province’s People’s Committee, said food companies must quickly purchase rice to prevent a drop in prices when the peak harvest time draws near.
He said “the purchase of one million tonnes of rice for the temporary reserve will help raise the paddy price, but not by much”.
Farmers are selling their paddy at low prices to traders, who are then charging high prices to food companies when they re-sell the rice.
Ut Khuong, a farmer in An Giang Province’s Cho Moi District, said that in recent years, traders had come directly to fields to purchase undried paddy. After drying and milling, traders then sold the rice to food companies.
The Government has asked food companies to buy paddy at prices that ensure that farmers receive at least 30 per cent of the profits.
However, most food companies do not buy rice directly from farmers but through middlemen traders.
As a result, the paddy price bought from traders has been VND100-VND300 a kilo higher than the price charged by farmers for their rice.
Dr Duong Nghia Quoc, director of the Department of Agriculture and Rural Development of Dong Thap Province, said the winter-spring crop was the year’s main rice crop and most farmers placed high expectations on this crop.
He said agencies and enterprises should raise the buying price of paddy to help support rice farmers.
Quoc also called on food enterprises to purchase more rice near the peak harvest time.
Meanhwile, VFA chairman Phong said rice exports were expected to encounter difficulties this year due to unpredictable changes in the world market and stiff competition from cheap rice sources in India, Pakistan and Myanmar.
Regulatory confusion over enterprise registration
The Ministry of Planning and Investment issued Circular No 01/2013/TT-BKHDT on January 21, providing stricter guidelines on enterprise registration.
The circular was promulgated pursuant to Government Decree No 05/2013/ND-CP, issued on January 9.
Circular No 01 requires that an enterprise obtain a code from the Vietnam Systems of Economy Index when applying either for newly granted or amended enterprise certificate.
The circular also allows an enterprise to use its head office’s location as part of its corporate name for distinguishing purpose, provided that it will not violate any intellectual property rights or regulations.
Under the circular, the signatory of a single-member limited liability company must be the owner, CEO or chairman of the members council. The signatory of a multiple-member limited liability company must be the chairman of the members council, while the signatory of a joint stock company must be the chairman of the board of management.
Circular No 01 also provides that changes to the founding shareholders named on the enterprise registration certificate can only be made during the first three years after the certificate is issued.
While online enterprise registration was established under Decree No 43/2010/ND-CP, this has not yet taken place in practice.
Circular 01 allows enterprises to choose online registration or desk registration. In case of online registration, the applicant must have a proper electric signature complying with Article 3.4 of Decree No 26/2007/ND-CP of February 2007, or must obtain a Business Registration Account created by National Enterprise Database System for authentication purposes.
National Enterprise Information Portal at will provide further information about electronic business registration.
Circular No 01 takes effect on April 15 and supersedes Circular No 14/2010/TT-BKH of June 2010.
Consumer faith in local products grows
Made-in-Viet Nam products have gained consumers’ trust in the last three years since the “Vietnamese People Buy Made-in-Viet Nam Products campaign began, according to the Ministry of Industry and Trade.
Deputy Minister Ho Thi Kim Thoa said that in many localities, 58 per cent of consumers actually preferred Vietnamese grown fruits and vegetables and up to 80 per cent voiced a preference for domestically produced garments and textiles.
Before the campaign, only 23 per cent of consumers believed local products could be high quality; now, that number has increased to 71 per cent.
Products made in Viet Nam are also becoming ubiquitous in supermarkets. At Big C, they account for nearly 90 per cent of the goods on sale; at Vinatex Mart, everything is produced in Viet Nam.
According to Thoa, in order to boost the consumption of Vietnamese made products, the distribution system must be expanded with a focus on traditional markets, as turnover from these markets made up an estimated 40 per cent of total retail sales.
However, expanding distribution required significant amounts of capital, which would be difficult for smaller enterprises to accumulate.
Meanwhile, the competitiveness of many domestic enterprises remained low and their products still failed to satisfy consumers in comparison to imported products.
The ministry aimed to help enterprises promote their goods, she said, bringing made-in-Viet Nam products to rural areas and traditional markets while working to prevent smuggling and trade fraud.
A project to develop the domestic market will be proposed to the Prime Minister by the fourth quarter of this year.
Prices of many food items remain high in HCMC
Prices of many products had returned to normal pre-Tet levels as of Sunday, the eighth day of the Lunar New Year, but the popular food items or those for worship rituals are still expensive.
At some of HCMC-based markets like Ba Chieu in Binh Thanh District, Cay Thi in Go Vap District and Vuon Lai in District 12, prices of beef, shrimp, crab, squid, mackerel and a number of fruits such as custard-apple, dragon fruit, papaya, mango and watermelon remained exorbitant, even higher than the prices in the final days before Tet.
For instance, first-grade beef fillet was sold at VND300,000-320,000 per kilo, or VND100,000 higher than normal, while stir-fried beef was quoted at VND190,000-210,000 a kilo, VND20,000 higher. Prices of mackerel ranged from VND195,000 to VND210,000 per kilo and live chicken VND140,000-180,000.
A beef seller named Ha at Cay Thi Market said she did not buy certain kinds of beef because their prices were too high.
Similarly, fruits necessary for worship rituals were sold at steep prices.
Custard-apple stayed at VND80,000 per kilo and dragon fruit at VND40,000-50,000. Meanwhile, Hoa Loc mango, Lai Vung tangerine and Long An watermelon had respective prices of VND70,000-80,000, VND55,000-60,000 and VND20,000 per kilo.
Mai, owner of a fruit stall on Duong Quang Ham Street, noted fruit prices after Tet were even higher than the pre-Tet levels.
However, the aforementioned items had much more reasonable prices at supermarkets. For example, at Co.opMart Phan Van Tri in Go Vap District, custard-apple was priced at VND50,000 a kilo, Hoa Loc mango VND53,500 and dragon fruit VND26,000.
At Satrafoods No Trang Long in Binh Thanh District, mackerel was sold at VND187,000 per kilo and pomfret at VND94,000.
The number of shoppers at supermarkets and convenience stores was quite large. At some stores like Satrafoods No Trang Long, there was still an undersupply of certain products because many suppliers were still having their holiday break.
Prices of essential food items for daily meals had returned to normal levels. Snakehead fish sold for VND55,000-60,000 per kilo, pork thigh VND85,000, prawn VND140,000 and Dalat lettuce VND30,000.