Can Tho strives for hi-tech agricultural hub in Mekong Delta
Can Tho city has set to become a hi-tech agricultural hub in the Mekong Delta region by 2020, said Director of the municipal Department of Agricultural and Rural Department Pham Van Quynh.
To reach the target, the city is implementing a 3.6 trillion VND (170 million USD) project on hi-tech agriculture development in the 2014-2020 period, striving to bring the proportion of hi-tech agricultural production value to 10-15 percent by 2015 and 30-35 percent by 2020.
Under the project, Can Tho will gradually form a hi-tech agriculture that focuses on key products such as rice, vegetables, fruit, animal husbandry and aquatic products. It will provide scientific and technological services for the whole Mekong Delta region.
Between now and 2020, the city plans to build three hi-tech agricultural areas where projects in the field will be carried out.
In addition, it will also build a centre for developing animals for breeding, provide new breeding technologies for local residents and complete a high-quality rice processing line under EU and US standards.
Vinh Phuc on right track to develop craft villages
The northern province of Vinh Phuc is focusing all resources to develop traditional craft villages in an effort to provide more jobs and increase incomes for locals, especially those in rural areas.
Currently, the province has over 19,300 rural production facilities operating mainly in the fields of agro-forestry-fishery product processing, handicrafts, stone carving, ornamental plants and animals, and construction materials.
Some trade villages that have their products shipped abroad include Hai Luu stone carving village in Song Lo district, Trieu De rattan village in Lap Thach, Thanh Lang carpentry village in Binh Xuyen, and Vinh Son snake and Ly Nhan forge village in Vinh Tuong.
The villages have created jobs for up to 60,000 rural labourers, with an average monthly income of 1.7-1.9 million VND (80-90 USD) per person.
Their development has contributed to boosting the local economic structure transfer and forming closer links in production.
However, trade villages in Vinh Phuc still face numerous difficulties as most of them are running small-scale production with out-of-date technology and limited markets.
To deal with the situation, the province has applied a number of measures and policies to maintain and develop the villages, including the formation of industrial and crafts clusters.
It has invested 219 billion VND (10.4 million USD) in developing eight crafts clusters on an area of 81 hectares.
The locality sets a target of establishing 24 industrial clusters by 2015 to attract small and medium-sized enterprises and households.
In addition, Vinh Phuc has also focused on training skilled workers, teaching the crafts to young people, and assisting the villages in exporting their products.
According to Nguyen Van Kiem, Chairman of the Vinh Phuc Cooperative Alliance, together with mobilising resources for crafts development, the province has set up a fund to support the restoration and development of the traditional trade villages.
Vietnamese rice needs international brand name
Vietnam needs to create an international brand name for its rice in addition to developing high-quality cross-bred varieties, experts suggested at a workshop held in Hanoi on November 26.
This requires an effective marketing strategy to raise consumers’ awareness of the Vietnamese rice and to help the country surpass major rice exporters like Thailand and India, they said, adding that it’s high time for Vietnam to develop a variety research system.
Deputy Minister of Agriculture and Rural Development Le Quoc Doanh emphasised the need to increase the added value of rice for export, thus improving growers’ incomes.
To do this, the country hopes to receive support and collaboration from foreign partners, including the International Rice Research Institute (IRRI) and the United Nations Food and Agricultural Organisation (FAO), in order to build its own trademark for this product, he said.
With IRRA support, the ministry is expected to soon build a feasible cooperation framework for the local rice sector, he added.
Deputy Director of the ministry’s Department of Crops Production Tran Xuan Dinh suggested forging links between farmers and businesses, and called for IRRI technical assistance in biotechnology and sustainable production.
Vietnam has so far this year exported 5.5 million tonnes of rice worth 2.56 billion USD, according to the Vietnam Food Association (VFA).
The VFA predicted 2015 to be a tough year for Vietnam ‘s rice exporters in the face of fierce competition from their Thai rivals.
Vietnam, RoK share experience in business renovation
Consultancy firms from Vietnam and the Republic of Korea (RoK) gathered at a workshop in Ho Chi Minh City on November 26 to share experience in renovating business operation.
The main topics were how to increase productivity and reduce production costs, improve management strategies and modernise technology.
Ko Jun Seok, a representative from the Korean small and medium-sized enterprises (SMEs) management department, said cooperation between the two countries in business renovation is going well. He add that the RoK will increase funding for activities in this field in Vietnam next year.
Deputy Minister of Science and Technology Tran Viet Thanh said Vietnamese businesses can acquire a lot of experiences from the RoK which boasts professional consulting staff and system.
The ministry has piloted a programme this year giving 10 domestic enterprises access to RoK consultancy service, which has reaped initial success, Thanh added.
On the occasion, the National Agency for Southern Affairs under the Ministry of Science and Technology and the RoK SMEs management department signed a Memorandum of Understanding on cooperation in the field.
Intel Vietnam on the verge of opening CPU production line
Intel is gearing up for the completion of its CPU production line at its Ho Chi Minh City-based assembly and testing plant by the end of November, according to CEO of Intel Products Vietnam Sherry Boger.
With the new CPU production line, 80 per cent of the semiconductor chips used in computers around the world by this time next year will be made by Intel Vietnam at Saigon Hi-Tech Park (SHTP).
New system on chip (SoC) platforms designed for smartphones and tablets have been produced at the Vietnam plant since the beginning of this year. Until now, Intel Vietnam has manufactured 36 million SoC products, a figure expected to reach 40 million by the end of this year.
In July 2014, Intel successfully released its new fourth-generation core processors.
Boger said: “These products will serve customers from all over the world and have a positive impact on export turnover and the development of Vietnam high technology.”
The chipmaker posted $1.8 billion in exports last year. According to Boger, Intel Vietnam’s export value will increase in 2015.
From the beginning of this year to June, Intel Vietnam disbursed $450 million into its operations at SHTP, which accounts for roughly 50 per cent of the company’s registered capital.
Boger stated that Intel planned to speed up growth and business development in Vietnam to develop a local supply chain.
Additionally, Intel Vietnam is focusing on strategic alliances and network formation to promote the development of Vietnam’s semiconductor industry. Intel Venture Capital Funds are willing to invest in any Vietnamese companies that meet its business growth strategy in Vietnam.
Intel Vietnam also intends to co-operate with Ho Chi Minh City authorities and departments to train engineers and technicians for the semiconductor industry.
Intel Corp first announced a $300 million investment for an assembly and test plant in Vietnam in 2006. The firm’s total registered investment was raised to $1 billion nearly a year later. The plant went into operation in 2010.
FDI investment certificate to be licensed online
Foreign investors who apply online for permission to invest in Vietnam will be able to receive investment certificates online as of 2015, the Foreign Investment Department under the Ministry of Planning and Investment (MPI) announced on November 25.
The move is part of the National Information System on Foreign Investment to begin operation in 2015, with the aim of creating favourable conditions for FDI investors.
According to the MPI, the operation of the information system will be an important step, demonstrating the efforts of the MPI in building a system to standardise and digitise FDI activity management in establishing a national database on FDI enterprises and projects on a national scale.
The system will assist State management agencies and FDI enterprises in online handling of FDI records, applications for investment certificate, making reports, and managing projects among others in a bid to cut time and costs for enterprises and management agencies, contributing to accelerating administrative reform.
The Foreign Investment Department has so far held two training courses for officials in charge of foreign investment management from 29 provinces and cities on the new system. The remaining localities will be provided with training courses by year’s end to put the system into operation in early 2015.
Hanoi – Hai Phong expressway toll rights sold to Indian company
The right to collect a toll on the Hanoi – Hai Phong expressway, which is scheduled for completion in late 2015, has been sold to Indian infrastructure company ILFS, the Voice of Vietnam reported.
Danny Samuel, Head of Corporate Business Strategy at ILFS, said the agreement to transfer the toll right to the company was signed during Vietnamese Prime Minister Nguyen Tan Dung’s visit to India from October 27-28.
Under the contract, ILFS will buy a 49% stake in the project while the remaining 51% will be retained by the Vietnam Infrastructure Development and Finance Investment Company (ViDiFi). The money will be transferred to ViDiFi at the end of 2015.
ILFS will also have to pay 49% of the estimated interest during the period of 31 years in 2018.
The company said it would employ new toll collection technology to avoid losses and prevent overloaded vehicles from travelling on the expressway in order to ensure road quality and minimise maintenance costs.
Vietnam’s Ministry of Transport is planning to sell the toll collection rights on a number of expressways as a measure to ease constraints on the budget for transport infrastructure development.
Economy car manufacturers seek entry to Vietnamese market
Economy automobile producers from Asian countries such as India, Malaysia or Indonesia are seeking ways to enter the Vietnamese market.
Recently, Suzuki Vietnam began offering a model of a seven-seat vehicle called the Ertiga, imported from India. The selling price begins at VND599 million (USD26,610), making it the cheapest of its class in Vietnam.
According to some news sources, there will soon be three new economy models produced in Southeast Asian countries sold Vietnam.
Honda has already introduced the HR-V in Thailand and Indonesia, being sold for USD20,000 in the latter country. Vietnam may become the third market in Southeast Asia to which Honda introduces this model.
Meanwhile, there are rumours of the launch of the Mazda 2 in Vietnam in the near future. In Indonesia, this model is priced at between USD18,756 and USD22,507. There are also plans for Mazda to start domestic assembly.
Proton, of Malaysia, also plans to import cars to Vietnam.
Despite these various plans, Vietnam is still seen as a difficult market. This can be seen in the case of Suzuki, which launched its eight-seat multi-utility MPV for families with a simple interior design. However, it sold less than 100 units a year. This model is almost no longer seen in the local market.
Job demand on the rise
As Vietnam has been integrating deeper into the global economy, the demand for employees will increase but whether salary will rise or not depends on productivity and the quality of laborers, experts said at a seminar in Hanoi on November 25.
Nguyen Manh Cuong, director of the labor ministry’s Center to Support the Development of Labor Relations, said Vietnam is about to sign the Trans-Pacific Partnership (TPP) agreement, and the free trade agreements (FTA) with the European Union and the Customs Union of Russia, Belarus, and Kazakhstan.
Such trade agreements will boost the flow of products on the global markets, raise investments, and stimulate the economic development of participating countries, leading to the rising labor demand, he said at the conference on wage policies held by the labor ministry and the National Wage Council.
When Vietnam becomes part of the ASEAN Economic Community (AEC) next year, laborers in many sectors will be allowed to travel freely among regional countries for working, which will affect not only salary but working opportunities and labor productivity also, Cuong said.
Sectors having high recruitment demand are apparel, footwear, electronics, and wood processing, which have strong potential for export.
Report of the International Labor Organization showed that the establishment of AEC will raise recruitment demand by 10.5% and demand for semi-skilled workers by 28% in specific.
Le Tien Truong, chairman of Vietnam Textile and Apparel Association, said the apparel sector over the past 15 years has continuously posted growth rate by around 15% a year, much higher than other industries, and once FTAs are signed, more opportunities will be opened for the sector.
“However, whether the salary will be raised or not depends on the laborers’ quality and productivity. If firms raise salary for their staff but the labor quality is not improved correspondingly, their products cannot compete with others on the market,” he said.
Nicola Connolly, chairman of the European Chamber of Commerce and Industry, said enterprises in Vietnam have been hit by the wage hike, which averages 15% per year, while labor quality in the country improves slowly.
Meanwhile, the growth of wage should be slower than that of labor productivity, she said.
Malte Luebke, ILO’s senior wage specialist in the Asia-Pacific region, said although the minimum salary in Vietnam is higher than Laos, Myanmar and Cambodia, it is still in the lowest group in the ASEAN region.
Farm produce prices expected to rise
Local experts have projected that the prices of Vietnam’s farm produce such as rubber latex, coffee and pepper will increase in the coming time given an expected rise in demand of importers from China and other markets.
Last week, China’s central bank reduced the interest rate of one-year loans by 0.4 percentage point to 5.6% and this will enable more Chinese companies to take out loans to import rubber latex and other farm produce for stockpiling.
An executive of an agricultural product trading firm based in HCMC told the Daily that the Chinese central bank’s interest rate cut will place a positive impact on the world’s farm produce market in the short term as the reduction is an opportunity for more Chinese firms to borrow money for goods and material imports.
The executive said there are signs that Chinese companies have increased rubber latex imports for storage in Qingdao City in the east of China.
Flooding in Thailand could affect the global supply of rubber latex and push up the price of this product worldwide in the coming time.
“The price of rubber latex will likely pick up in the short term and the rise will depend on supply and demand,” the executive said. “As supply is higher than demand on the global market currently, the price is unlikely to rise sharply.”
This week, a kilogram of RSS3 rubber sheets is sold at VND27,800 in southeast and Central Highlands provinces and the respective prices of SVR10 and SVR3L stay at VND22,700 and VND27,600. These prices are the same to the levels over the weekend.
On Japan’s commodity exchange Tocom, last weekend’s rubber price was quoted at the lowest level in the past seven weeks. The rubber price was around 190.5 yen per kilogram (some VND34,400) for deliveries next month, up 0.2 yen, and 194 yen (around VND35,000) for deliveries in January.
Higher demand has also lifted pepper prices on the domestic market. Traders on November 25 bought a kilogram of pepper at around VND194,000-200,000, up VND1,000-2,000 against the previous day.
The average export price of pepper in the January-September period was US$7,558 per ton, rising by 14% year-on-year.
Statistics of the Ministry of Agriculture and Rural Development showed that Vietnam shipped 145,000 tons of pepper worth over US$1.1 billion in the first ten month of this year, up 18.5% in volume and over 35% in value year-on-year.
According to the Vietnam Pepper Association (VPA), local farmers harvested around 150,000 tons of pepper in the 2013-2014 crop.
More local consumers attend to private brands
A report of research company Nielsen has revealed that 84% of consumers in Vietnam say their perception of private label brands has improved over time, the highest level globally.
The ratios are 83% in Thailand (fourth highest globally), 77% in the Philippines, 70% in Malaysia, 66% in Indonesia and 64% in Singapore. The average global level is 71%.
In the 2014 Nielsen Global Private Label Report released on November 25, Nielsen said attitudes toward retailers’ private labels or store branded products are improving throughout Southeast Asia.
Sentiment is particularly high in the Philippines where three quarters of consumers (75%) view private label brands as a good alternative to named brands (up 24 percentage points from 2010) and 69% feel the quality of private label brands is on par with named brands (up 28 points). More than half (54%) believe some private label products are as good or better than brand name products.
In Thailand, the ratios are 65%, 55% and 61% and those in Malaysia are 62%, 52% and 61% respectively.
However, the report said improving sentiment is yet to impact on private label sales, with private label share remaining low across the region.
While around two-thirds of Singaporean shoppers (66%) and 28% of Thai shoppers are regular private label buyers, in both markets less than 10% of baskets contain a private label product.
The overall share of private labels in the region remains low, 6.3% in Singapore and just 2.9% in Thailand.
When it comes to private label pricing, perceptions around the value for money offered by private label are less positive in all Southeast Asia markets than the global average.
Just 46% of Indonesians believe private label brands offer good value for money, the lowest in the region and the sixth lowest globally, followed by 55% in Vietnam.
Pete Gale, head of Retailer Services for Nielsen in Asia Pacific, said an expanding proportion is building a repertoire of private label products that they like and will buy again, even at a more expensive price than a branded alternative.
Private brands refer to the products sold under the names of retailers. In Vietnam, retailers such as Saigon Co.op and Big C have launched products of their brands.
The Nielsen Global Private Label Survey was conducted with more than 30,000 consumers in 60 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa and North America.
Vinalines to divest all capital at Maritime Bank
Vietnam National Shipping Lines (Vinalines) has announced it would divest entire capital at Vietnam Maritime Commercial Bank (Maritime Bank) to implement the restructuring plan as instructed by the Government and raise fund for debt payment.
According to Vinalines, the enterprise will held an auction on the Hanoi Stock Exchange to sell over 20.13 million shares, equivalent to a 2.52% stake in Maritime Bank, on December 8. The total proceed is estimated at over VND315 trillion as the reserve price for each share is set at VND15,650.
Currently, there is a bank wanting to buy all shares put up for sale and has registered to be a bidder at the auction.
Vinalines will use money raised from the auction to restructure its debts valued at over VND16 trillion as of the end of 2013. The debt amount has declined gradually as Vinalines has made efforts to sell debts and divest capital at companies.
Vietnam touts tourism in New Delhi
The Vietnam Embassy in India on November 26 sponsored an international marketing seminar in New Delhi, India with a plethora of attendees, providing an opportunity to discuss ways it could assist them in promoting inbound tourism to Vietnam.
At the event, Ambassador to India Ton Sinh Thanh said the Vietnam government has been involved in a wide range of industry activities, focusing on working with suppliers, regulatory agencies and travel promotion bureaus to improve the quality of travel related services for foreign visitors.
He spoke highly of India’s Jet Airways recent launch of direct flights between New Delhi and Ho Chi Minh City and hoped that this would provide a much needed boost to expanded tourism and trade on a number of fronts.
Vietnam is slowly becoming a world top travel destination Thanh said, adding that last year the country welcomed more than 7.5 million inbound tourists and in the first 10 months of this year, it welcomed 6.6 million visitors, including 30,000 Indian tourists.
For her part, Girish Shanka, the Additional Secretary of India Tourism, said India has also become an important tourist destination for Vietnamese travellers. Last year, India received 12,300 Vietnamese visitors.
Echoing Thanh’s views, Shanka expressed optimism that bilateral tourism cooperation and trade in all fields would further be promoted as a result of the direct flights connecting New Delhi and Ho Chi Minh City.
At the event, representatives from Viettravel introduced tourism travel packages touting Vietnam as having some of the world’s most beautiful beaches, UNESCO heritage sites and a plethora of fascinating travel destinations.
Participants also had a chance to enjoy special art performance presented by Vietnamese artists and artisans.
Seminar to broaden Vietnam, South Africa cooperation
Since the establishment of diplomatic ties in 1993, South Africa has remained a potential trade and tourism partner of Vietnam, said Truong Thi Kim Anh, Vice Director of Vietnam Chamber of Commerce and Industry (VCCI) branch in Danang.
At a Vietnam-South Africa trade and tourism promotion seminar in Hue City on November 27, Anh said Vietnam is strong at producing agricultural products, handicrafts, garment, construction materials and seafood while South Africa is a potential supplier of steel, mental, wood, and cotton.
However, the two-way trade turnover between the two countries hits just a bit more than US$1 million annually and does not match with the two countries’ potential.
South African Ambassador to Vietnam Kgomotso Ruth Magau said South Africa is considered a gateway for Vietnam to penetrate Africa. It emerges as an attractive investment destination with friendly environment, preferential policies and easily accessible market.
The seminar provides a good chance for businesses from both sides, especially those in Thua Thien-Hue province, to cooperate to exploit potential and strength for mutual benefit.
Dinh Khac Dinh, Vice Chairman of the Thua Thien-Hue provincial People’s Committee, said businesses and tourism associations from two countries will get update information about their land, people and potential to boost cooperation, especially in trade, tourism, education, and culture.
Investment Law stipulates subjects, sectors enjoying investment incentives
The subjects will enjoy advantages in corporate income tax exemption and reduction, tax preferences (including exemption of import duties applicable to equipment, materials, transport means and land use privilege); exemption and reduction of land tax, land rentals; period of land use.
These five subjects include investment projects in priority sectors and areas, investment projects with capital scale of at least of VND6,000 billion, investment projects in rural areas hiring more than 500 workers and high technology businesses and science and technology enterprises and organizations.
The Law on Investment encourages investments in high tech, industrial products supporting high-tech, research and development; production of new materials, new energy, clean energy, renewable energy, products with value-added more than 30% and energy -saving products.
Other sectors such as the manufacturing of electronic products, key mechanical products, agricultural machines, automobiles, automobile spare parts; shipbuilding, industrial production support for the textile industry, leather shoes; production of information technology, software, digital content are also given incentives .
Regarding the agricultural sector, investment incentives are applied to agricultural-forestry-aquatic production and processing; forest planting and protection, salt making, fishing and fishing logistics services, plant seeds and animal breeds and biotechnology products.
In the social, education and infrastructure sector, investment incentives are offered to the fields of collecting, processing, recycling or reuse of waste; development investment and operation, management of infrastructure projects, development of public transport in urban areas; pre-school education, general education and vocational education.
In the healthcare sector, the incentives are given to medical examination and treatment, drug production, drug materials, essential drugs, social diseases prevention, vaccines, health products, herbal medicines, scientific research on pharmacy and biotechnology to produce new drugs, geriatric and mental health centers, treatment of patients with Agent Orange; nursing homes for elderly people, people with disabilities and orphans as well as investment in sports centers for the disabled or professional competitors and cultural heritage preservation.
ANZ: Fuel price cuts lift consumer confidence
ANZ Bank in a report released on November 26 said that the confidence of Vietnamese consumers has improved significantly after retail fuel price cuts in the past months and the release of data on low inflation in the year to date.
The ANZ-Roy Morgan Vietnam Consumer Confidence has risen by 6.2 points to 140.9 in November and is now well above the 2014 average of 133.
This month’s strong gain in consumer confidence is primarily driven by increasing certainty about economic conditions in the country in the next 12 months and the next five years, according to the bank.
In terms of personal finances, 29% (down four percentage points) of Vietnamese said their families are ‘better off’ financially than a year ago compared to 23% (unchanged) who said their family is ‘worse off’ financially.
Some 48% (down five percentage points) of respondents expect their families will be ‘better off’ financially this time next year compared to just 5% (down two percentage points) with financially ‘worse off’ view.
The report showed respondents have significantly increased their confidence in the economy with 63% (up a large 12 percentage points), saying Vietnam will have ‘good times’ financially during the next 12 months (the highest on record for this indicator) and just 5% (down 10 percentage points) expecting ‘bad times’ financially (the lowest on record for this indicator).
In addition, 38% (down four percentage points) of Vietnamese said now is a ‘good time to buy’ important household items compared to only 4% (down 10 percentage points) who said now is a ‘bad time to buy’ major household items (the lowest on record for this indicator).
Glenn Maguire, ANZ Chief Economist for South Asia, ASEAN and Pacific, said that Vietnamese consumers are tapping into dynamics that may not be as readily apparent as a headline perusal of the activity data alone would suggest.
“We believe the key dynamic that is driving consumer confidence in Vietnam is slowing inflation, with the fuel price cuts over the past month, clearly starting to free up disposable income and thus bolstering consumers’ own perceptions of their spending power,” the expert said.
The fact that consumer confidence has increased on the back of these fuel price falls clearly indicates the potency of the Government’s policy to be able to support the Vietnamese economy.
“Hence this explains our confidence that this recovery profile currently in place will continue, and if anything, risks may skew to a slightly steeper profile if falling oil prices boost global capital expenditure and consumption – a dynamic Vietnam will be well leveraged to,” he added.
Though the fuel price reductions have clearly bolstered perceptions of current economic conditions, expectations of a recovery are clearly gaining traction. The strong gains in consumer confidence were primarily supported by increasing confidence in Vietnam’s economic and financial outlook on a 12-month and five-year time frame.
“In this environment, the potential for consumption and domestic demand to perhaps start strengthening is rising. We continue to assess the risk structure around the Vietnamese economic outlook as coalescing more to the positive side.”
Agriculture-aquaculture-forestry exports up 12% in 11 months
The agriculture-aquaculture-forestry exports in November reached US$2.66 billion, bringing the total export turnover of the sector to US$28.2 billion over the past 11 months of the year, up 12.1% compared to the same period last year.
Accordingly, the export values of agricultural, aquatic and forestry products are estimated at US$13.19 billion, US$7.22 billion and US$5.88 billion, up 10.5%, 19.3% and 12.9%, respectively.
Among agricultural products, coffee took the lead with 72,000 tons, worth US$165 million, raising the total export volume to 1.56 million tons, valuing US$3.26 billion, up 33.4% in quantity and up 32.2% in value.
The nation earned US$1.162 billion, US$2.79 billion and US$206 million from exporting 151,000 tons of peppercorns, 6.03 million tons of rice and 121,000 tons of tea in the reviewed period.
State Treasury scales up G-bond issuance target
The State Treasury for the second time this year has just revised up its plan for Government bond sales, targeting to sell VND262 trillion worth of G-bonds this year, a rise of VND30 trillion against the previous plan.
On August 25, the State Treasury adjusted up the target for G-bond sales from VND210 trillion to VND232 trillion.
In its latest adjustment, the State Treasury focuses on long-term bonds.
It will mobilize VND26 trillion worth of under-one-year bonds instead of VND40 trillion as planned in the year’s beginning, and reduce the value from VND55 trillion to VND34 trillion for two-year bonds and from VND65 trillion to VND61 trillion for three-year bonds.
Meanwhile, it will issue VND80 trillion of five-year bonds, VND41 trillion of ten-year bonds and VND20 trillion of 15-years bonds, according to the latest plan.
In the plan released early this year, it had projected to issue only VND67 trillion of five-year bonds, VND10 trillion of ten-year bonds and VND5 trillion of 15-year bonds.
The revision is in line with the new strategy in mobilizing long-term capital.
However, the plan has aroused questions on the market because G-bonds have become less attractive, especially in September when the State Treasury halted the issuance of short-term bonds and therefore, the goal will be difficult to reach.
Last week, the State Treasury held an auction for five-year, ten-year and 15-year bonds worth a combined VND4 trillion.
Ending the session, only VND473 billion worth of bonds was collected at an annual coupon of 4.8%. The amounts of five-year bonds and 15-year bonds were sold only 14% and 26% of the targets respectively, and none of ten-year bonds was sold.
Many people are of the opinion that the G-bond sales will run slow from now until the year’s end as credit has grown faster while investment portfolios of businesses have little room left for more G-bond investments.
HCM City to discuss labor law with FDI firms
The HCMC government and the Ministry of Labor, Invalids and Social Affairs will talk with foreign direct investment (FDI) enterprises on problems that these firms encounter when complying to the revised Labor Law and Trade Union Law on December 4.
The event will be joined by HCMC Vice Chairman Le Manh Ha and Deputy Minister of Labor, Invalids and Social Affairs Pham Minh Huan, said Huynh Minh Quan, director of NhanViet Management Group, the co-organizer of the talk.
Mai Duc Chinh, vice chairman of Vietnam General Labor Confederation, and Nguyen Thi Dan, deputy chief officer and chief representative of the labor ministry in the South, will also participate in the talk, Quan told a press briefing on November 26.
Through the meeting, enterprises will have the chance to get answers for their questions when new articles of the Labor Law and Trade Union Law are applied.
The discussion will update latest information related to laborers in other laws that will come into force from next year such as the revised Health Insurance Law, Employment Law, and minimum wages.
The talk is organized with an aim to help investors who are about to enter Vietnam and those who have operated in the market learn more about the legal system in the country so that they will know how to treat their employees in line with the rules.
So far, 130 firms active in HCMC have registered to take part in the meeting.
Italian enterprise opens coffee roasting plant in Binh Duong
The subsidiary company of Massimo Zanetti Beverage Group (BZB Group) on Tuesday inaugurated its first coffee roasting plant in Vietnam with a total investment of US$1 million to support production and sales in Asia.
The plant located in My Phuoc Industrial Park in Binh Duong Province covers an area of over 5,000 square meters with an annual production capacity of 3,000 tons of roasted coffee. Initially, this output will be sold in Southeast Asian markets.
According to the investment certificate issued by Binh Duong management board of industrial parks, the 100% foreign-owned company focuses on roasting and producing different types of coffee. This company sells 3-in-1 coffee, black and white coffee, coffee compressed into pellets and packaged in bags, as well as other products made from coffee.
Doan Xuan Hoa, a senior official at the agriculture ministry, said the investment of BZB Group in Vietnam will help Vietnamese coffee enter the world’s value chain.
“As far as I know, many foreign corporations investing in the coffee industry will try to support coffee farmers with special techniques to yield high quality beans, meeting the taste of consumers all over the world,” said Hoa.
Hanwha Life expands to Hue City
Hanwha Life Vietnam has inaugurated its Hue office in a building on Pham Van Dong Street in the central city of Hue to better care for customers in central Vietnam in general and Thua Thien-Hue Province in particular.
The new office brought Hanwha Life Vietnam’s total number of customer serving points and offices in this growing market to 40.
Back Jong Kook, general director of Hanwha Life Vietnam, said the company opened the Hue office to better consult and serve customers in the city and neighboring localities. This is part of the company’s strategy to become one of the leading life insurers in Vietnam.
Established in June 2008, Hanwha Life Vietnam has a chartered capital of over VND1.8 trillion. It now has 200 employees and nearly 13,000 consultants serving nearly 51,000 clients in the country.
Dai-ichi Life offers special bonus to policyholders
Dai-ichi Life Insurance Company of Vietnam Ltd. (Dai-ichi Life Vietnam) has announced a special bonus distribution plan worth VND21.6 billion for all policyholders of An Tam Hung Thinh and An Thinh Chu Toan universal life products thanks to its outstanding investment results this year.
The company said the beneficiaries are those with policies still valid as of November 14 this year. The special bonus will be added to the eligible policy account value on top of other investment benefits as committed by the Japanese-invested life insurance company in the policy contracts with its customers.
This is the third time Dai-ichi Life Vietnam has announced the special bonus distribution. The company offered the bonus to its customers in 2011 and 2012.
Tran Dinh Quan, general director of Dai-ichi Life Vietnam, said in a statement that in addition to efforts to improve customer services and customer care programs, the company strives to offer customers added-value benefits.
“Despite economic difficulties, we are still maintaining the credit interest rate of 8% for all policyholders of the universal life products, and this additional special bonus of VND21.6 billion for these policyholders once again affirms Dai-ichi Life Vietnam’s commitment to providing the products and services meeting the diversified financial needs of local customers,” Quan said.
In the first nine months of this year, Dai-ichi Life Vietnam saw its new business premiums rise by 33% year-on-year to over VND640 billion and total premium income surge 36% to exceed VND1.69 trillion. The company posted preliminary profit of VND160 billion in the period, or higher than the target it set for the first three quarters of this year.
As part of its business expansion and customer-driven strategy, Dai-ichi Life Vietnam opened 14 general agencies in different localities in the first nine months of this year. This expansion brought the company’s total number of offices and general agencies to 130 and consolidated its third position of business operations network scale in this market.
Quan said priorities towards the year-end are to invest in human resource development, diversify distribution channels through cooperation with strategic bank partners and expand the sales network.
Dai-ichi Life Vietnam was established in January 2007 and Vietnam was the first foreign market that Japan’s Dai-ichi Life Group expanded its business through a 100%-owned subsidiary. After one year of operations, the company got approval from the Ministry of Finance to increase its chartered capital to US$72 million from US$25 million.
Employees with Japanese fluency sought
Many enterprises in export processing zones and industrial parks in HCMC are currently in dire need of employees who can communicate in the Japanese language, said Nguyen Thanh Tung of the HCMC Export Processing and Industrial Zone Authority (Hepza).
The director of the Employment Service Center under Hepza gave an example that Japanese firms looked for more than 850 employees fluent in Japanese at a recent job bazaar in the city, but the number of candidates able to speak Japanese was just around 500.
The fact showed that there is a severe short supply of employees with Japanese competence, not to mention their job skills though Japanese companies are willing to pay high to find qualified candidates.
Tran Xuan Hai, director of the HCMC Job Placement Center, said Japanese companies offer monthly salaries of US$350 to US$1,500 depending on their Japanese competence and job skills.
A number of employees fluent in Japanese told the Daily that they want to look for stable jobs in Vietnam but the salaries, rewarding policies and working environment of Japanese firms in this country are not attractive enough.
Ho Thi Tu Trinh, who used to study and work in Japan, said low wages and strict working requirements are the reasons why she has not been able to find a proper job in the past years.
The city also lacks teachers of Japanese. A public relations executive at a company licensed to train employees for Japanese enterprises said her company finds it difficult to recruit teachers of Japanese.
AEON looks for local suppliers
The supermarket chain operator AEON Company Limited is looking for Vietnamese suppliers for its global retail system and for its new private brand TOPVALU to replace imports from China and Thailand, according to Yasuo Nishitohge, general director of the company.
At an international conference held by the Vietnam Trade Promotion Agency (Vietrade) on November 26, the general director said Vietnamese suppliers are supplying goods worth a total value of US$60 million per year for AEON. Main products include shrimp, catfish, frozen eggplant, semi-processed frozen fish, breaded shrimp and octopus, processed coffee and so on.
Currently, more than 1,000 local suppliers are doing business with AEON Vietnam.
“AEON is a leading retailer in Japan with a global sales network. Commodities imported by AEON can be sold at all systems in the region,” Nishitohge said.
The Japanese firm is now looking for suppliers for garment, seafood and agricultural products. Nishitohge emphasized domestic businesses need to pay more attention to product quality management because Japanese customers demand safe products. For example, garment and household products must be checked for strange objects, while foodstuff has to be tested in terms of microbiological standards, plant protection drugs and chemical residues.
Enterprises in each sector will have to follow specific criteria to become AEON’s suppliers. Businesses having certificates of food safety, Global Gap, Viet Gap and the like will be at an advantage compared to the others.
Exporters to get permission to issue C/Os
Exporters will be allowed to issue the certificates of origin (C/O) on their own for goods bound for Indonesia, the Philippines and Laos from early next year, according to the Import-Export Management Bureau under the Ministry of Industry and Trade.
Vuong Duc Anh, representative of the bureau, said the ministry is drafting the circular to lay down criteria for enterprises to issue the certificates on their own.
If allowed, enterprises will have the right to certify the origin of products on the bills instead of having to ask for the C/O for each of their shipment from authorities. With the certificate, they can enjoy the preferential export tax when shipping goods to the three countries.
In order to earn the right, enterprises must be exporting products of their own and must not have violated regulations related to products’ origins, tax, and customs.
However, to enjoy this incentive, enterprises may be required to have a certain level of export revenue which is not yet decided, and have specialized staff understanding the rules of origins of goods in trade agreements.
C/O issuing enterprises must also be responsible for accuracy of the certificates and customs agencies will check C/Os in case of suspicion.
Deborah K. Elms, executive director of the Asian Trade Centre in Singapore, said the criteria should allow enterprises having proven capabilities to issue the certificate, whether they are small or big.
The application of C/O self-issuing scheme in Vietnam is in preparation for a mutual C/O self-issuing system for all ASEAN countries within next year.
Brunei, Singapore, and Malaysia have allowed their firms to issue the certificates since 2010 and Thailand has given such a right for exporters since 2011 in the first pilot project.
After receiving approval from the Government, Vietnam has announced to join the second pilot project of C/O self-issuance along with Laos, the Philippines and Indonesia and is working on procedures to carry it out.
Anh of the export-import bureau said the project will last for one year and after that, ASEAN countries will discuss the self-issuing system before deploying it on a large scale.
C/O self-issuing scheme is a trend in free trade agreements that Vietnam is about to sign. Therefore, the ministry is working towards switching from issuing C/O certificates to allowing firms to issue such papers on their own, he said.
Enterprises resorting to the self-issuing mechanism will be able to save time and reduce fees on C/O procedures but the scheme will prompt more responsibilities to customs departments because certain enterprises may abuse the right to commit fraud.
Payments of house purchases now specified
Property developers can only collect the house payments of no higher than 30% of the contract value from customers when the building of the projects’ foundations are finished, according to the revised housing law passed on Tuesday.
Article 54 of the revised law permits property developers to sell or lease houses if such houses are checked to be eligible for sale by the provincial authorities.
If the foundations of the housing projects are finished, property developers can get only 30% of the house value. The following installments have to be in line with the progress of construction but will not exceed 70% of the value if the houses are not transferred to buyers.
If property developers are foreign-invested companies and the houses are not yet handed over, the payments will not be higher than 50% of the value.
In addition, as long as buyers are not granted with the land use right certificates or the home ownership certificates, the payment shall not exceed 95% of the contract value. The remaining payments will be made when buyers receive the certificates.
Nguyen Ngoc Thanh, vice chairman of the Vietnam Real Estate Association, said the new regulation is now tighter, which helps prevent property developers from randomly collecting money from customers in case the projects are moving slowly or cannot be completed.
Meanwhile, according to Nguyen Nam Hien, general director of Hung Thinh Land, property firms are selling their products with the payments made similar to what the new regulations require. However, the new regulations will make purchases between developers and buyers clearer.
Hien added before houses are sold or leased, developers have to report to the provincial housing management bodies.
Within 15 days after receiving the notifications, the management bodies have to respond to property developers.
However, according to some property developers, under the Civil Code, property developers and customers can negotiate with each other on the proportions of payments as long as customers agree.
Lawyer Nguyen Son Tung from Legal United Law Company rejected the view as a misconception, as the Civil Code is comprehensive while the Housing Law is specific to the property sector. Therefore, property developers have to comply with the Housing Law, he added.
HCM City to add condo building management rules
* HCMC’s authorities are pressing ahead with a plan to apply more regulations on condo building use and management early next year to effectively resolve disputes between investors and residents at apartment projects in the city.
At a conference in HCMC on November 26, a representative of the HCMC Department of Construction said there are over 1,200 apartment buildings here in the city. Since early this year, disputes among residents, management boards and investors have been reported at 58 projects, including high-class buildings.
Condo size and public area of apartment buildings are the main reasons behind such disputes. In addition, there have been disagreements over fire fighting activities, use of building maintenance funds, project quality, parking fees and condo trading contracts.
Do Phi Hung, deputy director of the department, emphasized the necessity of more condo management regulations to clarify rights, obligations and responsibilities of the parties involved.
At the conference, HCMC vice chairman Nguyen Huu Tin told district-level authorities to collect suggestions from residents at condo buildings to help the department work out a draft of regulations, which could take effect in January next year.
Regarding condo building management fees, Tin said the new rules enable residents to choose management units. The rules will also control water prices for condo users.
Investors have to make clear all conditions to homebuyers before they sign contracts. On the other hands, residents can sue investors if they fail to follow the rules.
The new rules will not be applied to dormitories for students, workers, civil servants, low-cost homes, resettlement projects with 50% of condos having turned privately owned, and houses with multiple owners.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR