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BUSINESS IN BRIEF 12-3Economy moves towards growth, auditors predict

Economic activity in Vietnam is likely to pick up this year and in 2014, auditing firm Ernst & Young predicts in its forecast about rapid-growth markets.

This year, the country’s Gross Domestic Product (GDP) is expected to be 5.5 percent, and the consumption price index (CPI) 7.8 percent.

In 2015, the country’s GDP is estimated to climb to 7.1 percent and the CPI to fall to a growth of 4.8 percent.

“The near 7-percent growth trend can be regained by 2014, as export markets recover, if banks become more stable and if rule changes are enacted for planned foreign direct investment,” Ernst & Young said in its report.

“Import substitution will continue to contain the trade deficit, despite consumption picking up as inflation subsides. But competition from other low-cost locations is a downside growth risk,” it added.

In its forecast, Ernst & Young said that China will continue to move up the value chain, creating many development chances for other Asian countries, including Vietnam.

China plans to generate 8 percent of GDP by 2015 in seven strategic areas: energy conservation and environmental protection, new-generation information technology, biotechnology, high-end equipment manufacturing, new materials, new energy and clean-energy vehicles.

Thanks to such changes, other markets like Vietnam and regional countries as well as countries in Africa where the salary is low will strongly emerge in some industries such as the garments and textiles.

“We expect Indonesia, Thailand and Vietnam to increase their combined share of the world textile market from around 5 percent currently to more than 10 percent over the next 25 years,” it said.

In addition to garments, the telecom industry in these markets is also expected to develop strongly.

Vietnam is one of 25 rapid-growth markets cited in the report that have shown improvement thanks to an increase in trade and demand for commodities.

Ernst & Young said these markets have started to regain momentum.

Dak Lak discusses local coffee industry’s prospects

The Central Highland province of Dak Lak hosted a March 10 conference as part of its ongoing four-day coffee festival to discuss the local coffee industry’s prospects.

The event, co-organised by the Ministry of Agriculture and Rural Development (MARD) and the Dak Lak provincial People’s Committee, aims to encourage Vietnamese coffee products to join the ranks of value-added goods.

The conference’s domestic and international delegates exchanged views on local and global coffee markets, discussed ways to renovate coffee industry, and shed light on the policies required to ensure sustainable development of the coffee sector.

Vietnam has grown into the world’s second largest coffee exporter over the past two decades. From a coffee planting area of 21,200 ha in 1961, Vietnam has expanded the area to its current 614,500 ha, with an average output of 2.32 tonnes/ha.

Recent years have seen an average annual 1.7 million tonnes of coffee with export earnings of U$3.74 billion. This revenue has helped make the coffee industry an important contributor to the wider agricultural sector’s export turnover.

Many delegates voiced concerns regarding the quality of Vietnamese coffee products, suggesting the local coffee industry should proactively adapt to the repercussions of climate change and improve collaboration with other sectors to secure steady long-term growth.

Vietnamese timber products win overseas favour

Australia’s Midway Tasmania Wood Imports Director Wayne Smith believes Vietnamese timber products boast better quality for lower prices than comparable products.

Smith made the remarks upon visiting the Vietnamese pavilion at the International Furniture Fair Singapore 2013 on March 9.

He said his company has imported Vietnamese wood products for ten years. Brothers Furniture Co. Ltd supplies him with 7–8 containers annually.

Pham Van Sau, Director of the Binh Duong-based Brothers Furniture Co. Ltd, said Midway Tasmania is among his firm’s ten regular customers—mostly comprising timber importers in Australia, New Zealand, Canada, the UK, EU, and Africa.

Sau said he will depart the international fair in Singapore having received numerous orders worth millions of US dollars. “All my company’s exhibited items were already purchased by this year’s opening ceremony,” he said.

French Luke Import Company Executive Director Kwanruen Ah Tun also values Vietnamese handicraft products. Her firm has been an import customer for nearly two decades. Luke Import will buy about 10 containers of handicraft products in 2013. “Our import volume is likely to increase. The products exhibited by Vietnam’s Grass Co. at this year’s trade fair were especially exciting,” she said.

The ongoing fair in Singapore coincides with the 30th ASEAN Furniture Show (IFFS/AFS), attracting 466 exhibitors from 26 countries, including 27 from Vietnam.

Vietnam is currently Southeast Asia’s largest timber exporter, the second biggest in Asia, amongst the world’s top 10.

Last year the country earned US$4.5 billion from wood exports, a 19 percent increase on 2011.
Vietnam ships its timber products to around 120 countries. The major US, EU, Japanese, and Chinese markets constituted more than 70 percent of the country’s 2012 timber export value.

ASEAN, EU boost economic integration

ASEAN Economic Ministers and the EU Trade Commissioner have made important proposals for fostering trade and investment cooperation between the two regions.

The third ASEAN-EU Business Summit (AEBS) concluded successfully in Hanoi on March 9. The summit delivered with practical proposals for the agricultural economy, automobile industry, financial services, information technology, infrastructure/connectivity, and pharmaceuticals.

In his closing speech, Deputy Minister of Industry and Trade Vu Huy Hoang said the summit created opportunities for broader economic, trade, and investment cooperation between ASEAN and the EU.

Hoang asked ASEAN and EU countries to honour their commitments and follow through on the proposals adopted at the summit in the interests of mutual development for a prosperous ASEAN and EU.

The results of the 19th ASEAN Economic Ministers’ Retreat, the 12th AEM-EU Consultations and the third ASEAN-EU Business Summit were announced at a press conference in Hanoi on the same day.

ASEAN Secretary General Le Luong Minh noted that the average 7 percent growth in two-way trade reflected both sides’ unwavering commitment to facilitating trade and investment. The consultations between ASEAN Economic Ministers and the EU also recognised recent progresses in implementing bilateral and multilateral trade agreements.

Minh said the consultations also discussed the possible resumption of bilateral free trade agreement negotiations between ASEAN and the EU.

During the ASEAN-EU Business Summit, views were exchanged on promoting trade and encouraging investment in a manner encompassing the feedback received from enterprises.

EU Trade Commissioner Karel De Gucht underscored the success of the ASEAN Economic Ministers’ Retreat, saying it will lead to a more favourable business and investment environment for EU-ASEAN cooperation.

He affirmed ASEAN-EU FTA negotiations will be accelerated, emphasising the EU’s interest in ASEAN’s actively developing market.

The inter-regional trade deficit is currently narrowing thanks to a number of ASEAN member nations’ huge demand for EU products.

He said he believed that the EU will soon become ASEAN’s largest economic partner, and that the formation of the ASEAN Community by 2015 will resonate with significance for the EU.

Brazil inspects Vietnam’s seafood safety conditions

A delegation of Brazilian inspectors is in Vietnam from March 5-15 to assess the country’s seafood safety control system, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

The inspectors work for Brazil’s Ministry of Agriculture, Livestock and Food Supply (MAPA) and the Ministry of Fisheries and Aquaculture.

During the delegation’s stay in Vietnam, the inspectors will make fact-finding tours of the National Agro-Forestry-Fisheries Quality Assurance Department’s regional quality management centres, seafood processing factories, and shrimp and fish farms.

Hai Vuong Ltd Company, Khanh Hoa Canned Food, Hung Vuong JSC, Mekong Delta Food Factory, Southern Fishery Industries Ltd Company and Nam Viet JSC will be inspected.

The Brazilian delegation will also study the risks facing a number of Vietnamese aquatic products.

The inspectors will announce their preliminary findings in Ho Chi Minh City at the end of their trip.

A Brazilian delegation representative said MAPA will send an official report detailing the results of the trip in two months.

Vietnam’s seafood exports to Brazil, one of the country’s promising seafood importers, exceeded US$79 million last year.

Exhibition honours Vietnamese coffee trademarks

More than 700 booths representing 221 domestic and foreign businesses are on display at a Dak Lak province exhibition dedicated to coffee.

The event, running from March 9–13, is one of the 13 key activities comprising the 4th Buon Me Thuot Coffee Festival.

The booths showcase coffee and its associated by-products, coffee processing equipment, and new technologies.

As many as 650 stands from Vietnamese enterprises including Trung Nguyen Coffee Joint Stock Company, Vinacafe Corporation, and An Thai Coffee are promoting their famous product ranges such as Weasel, Legendee, Creative, and Passiona.

Dak Lak is consolidating its coffee trademarks’ presence on domestic and foreign markets.

The exhibition and the festival in general is a golden opportunity for domestic coffee enterprises to negotiate partnerships, market their trademarks, and introduce Buon Me Thuot’s coffee industry to the world.

Da Nang lures international investors

The central city of Da Nang is set to host the Conference on Investment Promotion for the Central Coastal Region from March 21-23.

The event will attract around 300 participants from provinces, ministries and international organisations, according to the city’s People’s Committee.

The two-day conference at the Crowne Plaza Da Nang will be a chance for businesses, international and domestic investors and the leaders of nine provinces and cities in the region to seek investment opportunities.

It will also provide an opportunity to review existing investment projects to ensure future effectiveness.

According to the organising committee, the conference will draw representatives from the World Bank, the Asia Development Bank (ADB) and various Chambers of Commerce in Vietnam (including American, European and Australian).

Business associations from Germany, Singapore, Chinese Taipei and S.Korea, and the United Nation Industrial Development Organisation (UNIDO) and UN-Habitat will also be on hand.

The region, containing Thua Thien– Hue, Da Nang, Quang Nam, Quang Ngai, Binh Dinh, Phu Yen, Khanh Hoa, Ninh Thuan and Binh Thuan, has attracted 943 projects, including 775 FDI ones, with a total capital of over US$1.3 billion.

PM opens ASEAN-EU Business Summit

Prime Minister Nguyen Tan Dung has delivered an important speech to the third ASEAN-EU Business Summit (ASEAN-EU 2013), opened in Hanoi on March 9.

The summit is part of the 19th ASEAN Economic Ministers’ Retreat and the 12th ASEAN Economic Ministers and EU Trade Commissioner (AEM-EU) Consultations.

The summit’s participants also included EU Trade Commissioner Karel de Gucht, Minister of Industry and Trade Vu Huy Hoang, ASEAN Secretary-General Le Luong Minh, and 600 representatives from leading ASEAN and EU businesses.

In his speech, PM Dung described the summit as a good opportunity for the ASEAN and EU business communities to foster cooperation and connectivity and pass on their recommendations to ASEAN and EU management agencies.

The event is especially signifcant as ASEAN nears fulfilling the goal of building its community by 2015 while economic relations between ASEAN and the EU continue to develop.

The establishment of the ASEAN community, the regional body’s foremost priority, depends on the crucial pillar of the economic community. It will engender favourable conditions for investment capital circulation and trade exchange, creating business operation expansion opportunities and greatly benefiting the more than 600 million ASEAN people.

In conjunction with building the economic community, ASEAN is sparing no effort to deepen its integration with regional and global partners. Enhancing cooperation with the EU in the name of sustainable development and prosperity is a major focus.

The trade and commercial cooperation between the two blocs has grown steadily in spite of global economic doldrums. The EU is ASEAN’s second biggest trade partner and the source of its biggest foreign investment inflow. ASEAN is the EU’s third biggest trade partner.

The EU has also provided most of the technical support ASEAN received for its common development target and its experience has proven very valuable during ASEAN’s community-building process.

Dung said that as the coordinator of ASEAN-EU economic cooperation, Vietnam always supports propelling ASEAN-EU trade and investment to new heights. The EU and a number of ASEAN member states including Vietnam are accelerating bilateral free trade area (FTA) agreement negotiations that will serve as firm foundations for future comprehensive ASEAN-EU cooperation.

Vietnam welcomes and wants to encourage the business community’s involvement in ASEAN’s and the EU’s combined efforts to strengthen the relationship between the two blocs.

The business community’s activities and investment will significantly contribute to successful ASEAN-EU cooperation, Dung said.

Sharing his views with PM Dung on the results of ASEAN-EU cooperation over the years, EU Trade Commissioner Karel de Gucht affirmed the two blocs’ importance to each other.

Karel de Gucht said the governments of both regions need to work together on reducing trade barriers and facilitating business investment.  It is essential to reach internal unanimity on negotiations between the EU and ASEAN.

The two blocs should coordinate with and support each other using Singapore’s model as inspiration.

Governments need to counsel businesses to ensure growth, fuel innovation, and apply technological advances, the EU Trade Commissioner noted.

The 3rd ASEAN-EU Business Summit is a high profile economic forum for foreign and domestic policymakers and international business leaders to discuss potential improvements in areas including the agricultural economy, automobile industry, financial services, information technology, infrastructure/connectivity, and pharmaceuticals.

Vietnamese footwear enjoys preferential European tax

The Vietnam Ministry of Industry and Trade (MoIT)’s European Market Department reports the European Commission (EC) has decided to extend Vietnam’s eligibility under its Generalised System of Preferences (GSP).

The EC’s Decision No.1213/2012 removed eight countries’ exports from the list of GSP beneficiaries. Accordingly, Vietnamese products, primarily footwear were not affected.

The newly-adjusted tariff scheme, which supplements the previous EC Decision No.978/2012, will come into force from January 1, 2014 to December 31, 2016.

ASEAN officials agree on common goal

ASEAN economic ministers signed two amended protocols and adopted a number of important initiatives at their 19th annual retreat in Hanoi on March 8, towards the establishment of the ASEAN Economic Community (AEC) by 2015.

The protocols are to amend ASEAN Economic Agreements Related to Trade in Goods and the ASEAN Comprehensive Investment Agreement.

During the two-hour event, participants specified orientations for economic cooperation in 2013 to realise the goal of building the AEC by 2015, and discussed initiatives on improving ASEAN competitiveness and connectivity with partners by building a business network and mechanisms to facilitate small-and medium-sized enterprises.

They also considered the roadmap for negotiating the Regional Comprehensive Economic Protocol (RCEP), which manifests ASEAN’s central and leading role in establishing a regional economic structure.

Deputy Minister of Industry and Trade Nguyen Cam Tu said the RCEP negotiations are expected to start this year and conclude before 2016, creating the world’s largest free trade area that encompasses 50 percent of global population and 30 percent of global gross domestic product.

Nguyen Thi Hoang Thuy, Deputy Head of the Multilateral Trade Policy Department under the Ministry of Industry and Trade, said ASEAN needs to streamline trade, services, investment and transport to realise the AEC Blueprint.

Regarding customs procedures, ASEAN member nations devised a joint customs strategy for the 2011-2015 period and are striving to implement a one-door mechanism, making it easier for regional countries to transmit information via an electronic network.

The association has implemented self-certification for the origin of products on a pilot basis, including electricity, electronics, pharmaceuticals, farm produce and automobiles, gradually building a coordinated mechanism among the bloc in this field.

ASEAN nations worked out a joint management mechanism on cosmetics, electricity and electronics, and are building a similar system for medical equipment, traditional medicine and nutrition supplements.

An action plan for the 2011–2015 period was also drawn.

Aung Naing Oo, who is leading the Myanmar delegation, said due to great differences in economic development between the group of Cambodia, Laos, Myanmar and Vietnam and the rest of ASEAN, the region must work together to bridge the development gap, which is a challenge in the establishment of the AEC by 2015.

A meeting on ASEAN-EU investment and trade opportunities was organised by the Vietnam Chamber of Commerce and Industry (VCCI) on the same day as part of the third ASEAN-EU Business Summit.

Addressing the event, VCCI Chairman Vu Tien Loc said ASEAN is a dynamic economic region with average annual growth of 5.5 percent. It has rising purchasing power and a higher role in the international arena, he added.

The two regions have agreed to boost economic links for sustainable growth. The businesses are ready to thrive in fields of their strength and high demand like footwear, agro-fishery, human resource development, clean energy and infrastructure, Loc said.

A Myanmar representative introduced to international investors promising fields like transport infrastructure, sea ports, roads and trans-national transport, especially in the Greater Mekong Sub-region.

Participants also pointed out shortcomings in ASEAN, like the economic development gap among member nations, differences in environment, and laws on investment and trade, especially taxation, customs, economic and technology potential, and human resource quality.

They suggested governments promptly negotiate a suitable cooperation mechanism and establish a free trade area between the two regions.

Cambodia to expand banking system along Vietnamese border

The Cambodian Government has approved plans to expand the banking system along its shared border with Vietnam to support trade activities between the two countries.

The decision was announced on March 7.

Cambodian Prime Minister Hun Sen agreed with the Cambodian Ministry of Commerce’s proposal to establish state-owned and private bank branches along the border with Vietnam, aiming to improve the conditions for trans-border business.

The banking system expansion will contribute to solving payment problems plaguing commercial transactions exchanged by Vietnamese and Cambodian traders and people.

The Vietnamese-Cambodian border is over 1,000 km long and features 10 international gates, 12 main gates, 25 sub-gates, and 9 gate economic zones.

Trans-border export and import turnover in the 10 Vietnamese and Cambodian border provinces increases by an annual average of 30 percent per year on average. The majority of business comes from export quotas.

Vietnam’s primary Cambodian exports include fertiliser, mechanical equipment, seafood, and agricultural produce, while it mainly imports timber products, corn, rice, cassava, cashew nuts, and rubber latex.

Last year’s trade turnover between Vietnam and Cambodia totaled US$3.3 billion–up 17 percent on 2011. The two countries are striving to push the figure to US$5 billion by 2015.

EU optimistic about business prospect in Vietnam

Results of the 10th quarterly EuroCham Business Climate Index survey released on March 7 showed that business confidence and outlook among European businesses in Vietnam is improving slightly.

This quarter the level has risen from the recent record low of 45 to 48 points. However, the Index remains below the half-line and EuroCham members that participated in the survey continued to express general concern about their current business situation and outlook as well as the impact of increased taxes, fines and official scrutiny.

The EuroCham Business Climate Index increased by 3 points to 48. Slightly less than half of the businesses that participated in the survey are active in the services industry, a quarter in manufacturing and the rest in trading or other activities.

Compared to the last survey, there was a relatively large in- crease in respondents assessing their current business situation as positive from 26 percent to 40 percent.

With respondents holding a neutral view remaining fairly stable at 36 percent, there are still a quarter of respondents holding a negative view of their current business situation.

The business outlook for respondents has also improved slightly: those reporting a neutral view remained stable at 42 percent, with slight improvement in those with a positive view to 30 percent, balanced by a slight decline in negative view to 28 percent.

Reported investment plans however seem to be stabilizing. There are less companies intending to significantly increase investment, which is down from 11 to 7 percent of the sample; but also less companies reporting the intention to cut investment, which has reduced from 27 to 24 percent.

With the majority of companies i.e 73 percent either expecting to keep their investment at similar levels to 2012, or to increase investment slightly.

Overall some 78 percent of respondents report they are maintaining or increasing their in- vestment, indicating a continued faith in Vietnam’s medium term future.

Whilst the share of companies expecting revenue to increase remained relatively constant at 45 percent, those expecting a drop in orders fell from 32 to 23 percent, which is a significant improvement.

Concerns about inflation are declining slightly, though still 45 percent of companies expect inflation to have a significant impact on their business in the medium-term. Members were also asked to indicate what they think the rate of inflation will be and the average came to 5.12 percent.

This continues to decline and is now very significantly below respondents perceptions a year ago, where the average inflation rate was predicted at 7.83 percent.

Respondents appreciation of the macroeconomic situation is also improving. Whereas last quarter a massive 72 percent expected a further deterioration in conditions, this has now fallen back to 57 percent, though this is still a majority of respondents expecting a further deterioration, and only 43 percent expecting stabilization and improvement.

EuroCham Chairman Preben Hjortlund commented on the survey: “This is welcome news and reflects a perceived stabilization in the macroeconomic situation. However we must remember that the index is still the wrong side of 50 and is well down on the 79 level achieved only 2 years ago. We need now to see continued efforts by the Government to improve the underlying structural problems of the economy“.

Malaysia, Vietnam coordinate in trade protection

Vietnam and Malaysia will build an information exchange and cooperation institution to investigate trade protection cases to support and protect the rights of the two countries’ businesses.

Vietnamese Minister of Trade and Industry Vu Huy Hoang and Malaysian Minister of International Trade and Industry Dato’Sri Mustapa Mohamed reached the agreement at the Vietnam-Malaysia Joint Trade Committee meeting, the second on the sidelines of the 19th ASEAN Economic Ministers’ Retreat in Hanoi on March 7.

The two sides emphasized the importance of trade policies and discussed cooperation in promoting investment, trade, industry and agriculture, as well as publicising business regulations, especially in the context that the two economies will contribute to building an ASEAN economic community by 2015.

Hoang stressed that the bilateral relations have continued to grow since the first meeting of the Vietnam-Malaysia Joint Trade Committee in September, 2011.

Bilateral political relations were marked by high-ranking visits, including President Truong Tan Sang’s trip to Malaysia in September 2011, and the meeting between Prime Minister Nguyen Tan Dung and his Malaysian counterpart at the 21st ASEAN Summit in Cambodia last November.

Celebrating the 40th anniversary of Vietnam-Malaysia diplomatic ties, the two countries have signed a total of 13 agreements in trade, investment, science and technology, and telecommunications.

Accordingly, bilateral trade turnover from 2009 to 2012 grew by 24 percent each year, up to US$7.9 billion in 2012.

In 2012, Malaysia ranked 8th among 92 countries and territories and 2nd among the Southeast Asian nations– 428 projects worth US$10.1 billion in Vietnam.

Last year, Vietnam exports to Malaysia were estimated at US$4.5 billion, a year-on-year increase of 56 percent, and its imports from the country at US$3.4 billion.

SEOM discusses economic cooperation initiatives

ASEAN senior economic officials have discussed a wide range of pressing issues and economic cooperation initiatives for 2013.

The ASEAN Economic Officials Meeting (SEOM), attracting delegations from 10 ASEAN member countries and the ASEAN Secretariat, was held in Hanoi on March 7 as a prelude to the 19th ASEAN Economic Ministers (AEM) Retreat.

The AEM Retreat runs in Hanoi until March 9 and is the major event of the year for discussion of economic aspects within ASEAN.

The focus of the SEOM was on the implementation of the ASEAN Economic Community (AEC) Blueprint for 2015 and the finalization of reports for submission to ASEAN Economic Ministers.

Documents expected to be signed by ASEAN economic ministers were also scrutinized at the meeting.

ASEAN, one of Vietnam’s most important trading and investment partners, is the nation’s third largest export market and the second largest supplier of goods for domestic businesses.

Vietnam’s trade turnover to ASEAN member countries reached more than US$38 billion in 2012.

The 19th ASEAN Economic Minsters’ Retreat gives participants the chance to discuss essential initiatives to boost regional economic cooperation and set goals for ASEAN economic integration towards the establishment of the ASEAN Economic Community (AEC) by 2015.

Within the framework of the 19th AEM Retreat, the 12th Consultative Meeting between ASEAN Economic Ministers and EU Trade Commissioners will also be held on March 9 to discuss the programs and initiatives to promote economic cooperation and trade and investment relations between the two regions.

Vietnam is currently the coordinating country for ASEAN-EU economic cooperation.

Dong Nai, Japan cooperate in support industries

Representatives from the Dong Nai provincial People’s Committee and Japan’s Kansai Bureau of Economy, Trade and Industry (KBETI) met on March 6 to discuss cooperation plans.

They agreed to create favourable conditions for support businesses from the Kansai region to invest in the southern province of Dong Nai.

They were committed to setting up  a consultation board to help promote environmental protection and human resource training, especially in the industrial sector to foster links between Japanese businesses and training centres in Dong Nai.

KBETI Head Toshihiro Kobayashi said more than half of Kansai investors set sight on  Asian countries.

Dinh Quoc Thai, Chairman of the Dong Nai provincial People’s Committee,  said the province has so far attracted investors from 35 countries and territories with a total registered capitalization of over US$23 billion.

Japan is Dong Nai’s third largest investor with over 130 businesses operating with their total investment valued at nearly US$3 billion.

US$112 million ADB loan for agricultural development

The State Bank of Vietnam (SVB) and the Asian Development Bank (ADB) signed two credit loan agreements worth nearly US$112 million in Hanoi on March 7.

The first, from the Asian Development Fund to the value of US$74 million, aims to sponsor a low-carbon farming project to encourage sustainable, effective and environmentally friendly agricultural production that limits carbon emissions by developing waste management facilities.

The project will also provide credit for a value-adding chain producing bio-gas as well as facilitate the implementation of cutting edge technologies.

SVB said agriculture is the largest generator of green-house gas in Vietnam, accounting for 50 percent of the country’s total volume of green-house gas emission .

However, breeding livestock, for instance, actively contributes to poverty reduction and bring economic prosperity in rural areas and more and more farmers and small to medium businesses have been involved in the industry.

Once completed, the project will help reduce pollution from agricultural waste and create a cleaner environment in at least 10 provinces, namely Lao Cai, Son La, Phu Tho, Bac Giang, Nam Dinh, Ha Tinh, Dinnh, Tien Giang, Ben Tre and Soc Trang.

The second loan worth US$37.88 million aims to strengthen the Vietnamese government’s capacity to prepare and implement ADB assisted projects effectively.

Draft regulation threatens expulsion and fines for foreign seafood traders

Individuals and organisations working with foreign traders to buy domestic aqua products could be strictly fined, according to a draft regulation.

The government has just announced a draft decree on administrative punishments in the seafood industry.

As a result, a fine of up to VND100 million (USD4,782) could be applied to firms while individuals could be fined VND50 million (USD2,391).

Seafood companies have welcomed the regulation, saying that it’s a proactive and efficient solution to foreigners being able to outbid local firms on domestic seafood.

Tran Van Linh, General Director of Thuan Phuoc Trading and Seafood Joint Stock Company in Danang City said the regulation would be an effective measure to prevent purchases by foreign traders as well as deal with domestic seafood material shortages.

Foreign traders have been buying Vietnamese seafood products in the central coastal region. They buy different type of seafood materials at prices much higher than the rates offered by Vietnamese seafood companies.

This has left local traders bemoaning the serious shortage of input materials. Many local seafood firms have to import between 60% and 70% of materials for their production.

Nguyen Ngoc Duc, Director of De Khang Phu Thanh Seafood Processing Company said many traders from Australia, South Korea and Taiwan are also buying Vietnamese seafood.

“At ports of Quy Nhon in Binh Dinh Province and Phan Thiet in Binh Thuan Province, foreign traders buy tonnes of tuna before local seafood firms. This is because local fishermen prefer selling their products to foreign traders to get higher returns. Domestic seafood companies can’t afford higher buying prices,” Duc commented.

He hoped that such high fines would be a good deterrent to illegal seafood purchases in the near future.

Tran Thien Hai, Chairman of the Vietnam Association of Shrimp Export and Processing (VASEP) said the regulation would ensure long-term benefits for fishermen as it could protect them from foreign traders being easily able to outbid local buyers.

Many seafood companies are worried that there is little evidence to find of collusion between Vietnamese firms and individuals with foreign traders in buying domestic seafood materials.

Tran Van Linh, General Director of Thuan Phuoc Trading and Seafood Joint Stock Company said many foreign traders come to port to select seafood for their purchases. Vietnamese mediators are responsible for direct purchases.

“It’s really difficult to prove there is a relationship between foreign traders and Vietnamese mediators. If we find any foreign traders buying local seafood materials who refuse to pay a fine we have no other choice but expel them from our country,” Linh commented.

Agreeing with Linh’s assessment, Le Dung, Vice Chairman of Ca Mau People’s Committee said cooperation between Vietnamese mediators and foreign traders was hard to prove.

To ensure efficient implementation of the regulation, it requires tight coordination among relevant agencies so as to detect and prevent possible wrongdoings.

Duong Tien The, Deputy Director of the Directorate of Fisheries’ Aquaculture Department said as this was still a draft decree, the agency is collecting opinions on the issue. It will issue more documents to guide the implementation after the regulation is approved.

“Despite it being difficult, it should be possible to find evidence through conducting inspections,” The added.

Price adjustments feared to fuel inflation: survey

Credit institutions described adjustments in prices of the items subject to State management as the greatest risk to inflation control in 2013, the Monetary Statistics and Forecast Department of the central bank said.

As per a report on the latest survey of credit institutions done by the department, price adjustments are believed to have the biggest impact on inflation this year. The other factors are changes in monetary and fiscal policies.

Efforts to curb inflation in 2013 heavily depend on price stabilization of the items on the State control list, said the surveyed credit institutions.

Inflation control is believed to be a tough challenge, especially when the Government’s Resolution 01 aims for CPI rise of 6-6.5%, lower than the 6.81% in 2012, and GDP growth of 5.5%, versus 5.03% last year.

Nearly 90% of the respondents believed inflation would be kept at a single-digit level this year. About 70% of them expected a rate of 5-10%.

Therefore, they hoped both deposit and lending rates would go down further. Nearly 70% expected deposit and lending rates for Vietnamese dong to fall at most two percentage points.

Credit institutions thought the inter-bank exchange rate would stay stable or just inch up. Most banks forecast the rate would go up 1-3%.

Only 17% of the respondents said the business environment would be favorable to their operations in the first half of 2013. However, they hoped the situation would improve in comparison with 2012.

Some 60% of credit institutions complained they were adversely affected by the business environment in the second half of 2012, while only 20% said so in the first half of the year.

The majority of the respondents hoped their pre-tax profits this year would be higher than in 2012, with most expecting a 20% growth in profit, says a report on the Government web portal chinhphu.vn.

Credit institutions are affected the most by business and financial conditions of their clients. Around 85% predicted risk from clients would not lessen in the first half of 2013.

Most banks hoped credit growth would be better than in 2012. The majority of them eyed growth of 10-20%.

Deposit growth was expected to be consistent with credit growth. The survey respondents forecast deposits in Vietnamese dong would be higher than those in foreign currencies.

In addition, credit institutions said they would prioritize funds for the key sectors such as agriculture, export, supporting industries and small and medium-sized enterprises. They would limit credits for real estate and stocks.

Credit institutions remained cautious about the economic situation and their performance in 2013, but they still hoped for improvement.

The survey respondents hoped the central bank would slash interest rates to reasonable levels, strictly handle the credit institutions breaching the interest rate caps and create a healthy environment for monetary operations.

Since the fourth quarter of 2011, the central bank has inspected credit institutions every six months to detect changes in the business cycle earlier than the official statistics, serving the making of the monetary policy and the management of the central bank.

Findings from the survey on factors triggering high inflation are largely similar to remarks by the National Financial Supervisory Commission in a report released in Hanoi on Monday.

As covered by the Daily on Tuesday, price management policies are the key factor for curbing inflation this year while impacts of other macro elements would not be significant.

The commission therefore called for relevant authorities to attend to measures to ensure stable prices of essential commodities, especially those on the State control list like power, fuels, and public services.

Businesses honoured for social responsibility

Fifty businesses have been honoured for boosting community development by shouldering outstanding shares of social responsibility.

Fifty businesses have been honoured for boosting community development by shouldering outstanding shares of social responsibility.

Speaking at the award ceremony in Hanoi on March 10, Deputy Minister of Planning and Investment Nguyen Van Chung praised businesses’ role in encouraging a sense of community and promoting national patriotic movements.

He urged other enterprises to follow their example, fulfilling social responsibilities and contributing to national development.

A representative from Dung Quat Oil Refinery Plant—one of the awardees—pledged to improve living conditions and workplaces for employees and protect the plant’s surrounding environment.

Workers are also encouraged to accept social responsibility to earn consumer trust and increase the company’s competitiveness, bolstering its sustainable development in the current global integration process, he said.

Businesses involving themselves in the Ministry of Planning and Investment’s social responsibility programme must meet the organiser’s strict criteria. These include long-term development strategies, social welfare schemes, and resources for development.

Of the programme’s thousands of participating businesses, 122 have been recognised for meeting responsibilities like tax obligations, customs clearance, environmental protection, worker’s insurance payments, and quality control to the level of international standards.

2013 Buon Ma Thuot Coffee Festival opens

As scheduled, tonight (Mar 9) Dak Lak province is holding the opening ceremony to mark 5 th Festival of Buon Ma Thuot Coffee with 500 domestic and international participants.

200 artists form the Central Theatre, the art unit Hanoi, Ho Chi Minh City, Lam Dong, Dak Nong, Gia Lai, along with Canadian traditional music and dance artists will be performing in the opening ceremony with the theme “Plateau colorful identity”.

The 2013 Buon Ma Thuot Coffee Festival, will be attended with the representatives of the ministries of Foreign Affairs, Industry and Trade, Agriculture and Rural Development, Culture, Sports and Tourism, Information and Communications.

Other prime participants include the Vietnam Coffee and Cocoa Association, Trung Nguyen Coffee Joint Stock Company, Vinacafe Corporation and the provincial people’s committees of Gia Lai, Kon Tum, Dak Lak, Dak Nong and Lam Dong

Becoming a biennial program since 2011, the Buon Ma Thuot Coffee Festival is a national-level event to regularly promote Vietnamese coffee to the world. Over the last two decades, Vietnam has grown from a minor player in the global coffee industry.

Because of its climate, Vietnam is better suited to growing harsher, stronger robusta coffee that is often processed into instant coffee drinks used worldwide. Vietnam is the world’s biggest robusta exporter.

Vietnam’s booming coffee industry is building its global brand by organizing coffee festivals and conducting a nationwide search for the nation’s first-ever coffee “ambassador”.

She’ll be at the forefront of a campaign to promote the image of Vietnamese coffee both within the country and to the global market.

The winner of this ladies-only contest will be announced on March 10 at the country’s 2013 Buon Ma Thuot Coffee Festival from March 9 to 12 in Central Highlands’ Dak Lak province, Vietnam’s coffee growing hub.

The goal is to select best 25 candidates, from whom one will be pointed as Vietnam’s coffee ambassador.

European firms show optimism in Vietnam’s economy

The quarterly survey of business indicator of European enterprises in Vietnam, conducted by the European Chamber of Commerce last month, showed that confidence and optimism among European companies for Vietnam has gradually improved.

The business climate index for Vietnam rose from 45 points to 48 points this quarter.

Half the companies participating in the survey were from the service sector, a quarter from the manufacturing sector, and the rest from trade and other sectors.

The number of firms giving an overall positive comment on the current business situation rose to 40 percent from 26 percent in the last quarter. Investment projects maintained growth with 78 percent companies giving feedback that they have been maintaining operations as before or even expanding investments.

Preben Hjortlund, chairman of the European Chamber of Commerce, said the figures indicated better economic stability. However, the index remained below midpoint index of 50, while it was 79 points two years back.

Vietnam imports fewer commodities in February

According to the Ministry of Industry and Trade, import of some commodities in February showed a decline.

Import of petroleum and oil declined by 22 percent in volume and 24 percent in value, over the same period last year, while import of liquid petroleum gas dropped by 32 in volume and 30 percent in value.

Among indispensable commodities, import of items for processing and exports by FDI companies continued to post robust growth. For instance, telephones and spare parts, except cell phones, soared 81.5 percent; wire and cable surged 30 percent; computers, electronic products, and components rose 36.6 percent.

Last month, import turnover of controlled goods was estimated at US$222 million, down 33.6 percent compared to the previous month, and 43.9 percent year-on-year.

Meanwhile, import of limited goods touched $400 million, a decrease of 35.7 percent over last month and 3.8 percent year-on-year. Import of automobiles with less than 9 seats and motorbikes fell by 37.8 percent and 33.2 percent, respectively.

Dak Lak discusses local coffee industry’s prospects

The Central Highland province of Dak Lak hosted a March 10 conference as part of its ongoing four-day coffee festival to discuss the local coffee industry’s prospects.

The event, co-organised by the Ministry of Agriculture and Rural Development (MARD) and the Dak Lak provincial People’s Committee, aims to encourage Vietnamese coffee products to join the ranks of value-added goods.

The conference’s domestic and international delegates exchanged views on local and global coffee markets, discussed ways to renovate coffee industry, and shed light on the policies required to ensure sustainable development of the coffee sector.

Vietnam has grown into the world’s second largest coffee exporter over the past two decades. From a coffee planting area of 21,200 ha in 1961, Vietnam has expanded the area to its current 614,500 ha, with an average output of 2.32 tonnes/ha.

Recent years have seen an average annual 1.7 million tonnes of coffee with export earnings of U$3.74 billion. This revenue has helped make the coffee industry an important contributor to the wider agricultural sector’s export turnover.

Many delegates voiced concerns regarding the quality of Vietnamese coffee products, suggesting the local coffee industry should proactively adapt to the repercussions of climate change and improve collaboration with other sectors to secure steady long-term growth.

No more licenses for construction steel projects

The Ministry of Industry and Trade might not issue investment licenses to new construction steel projects as local steel demand has been way below the country’s supply.

According to the Vietnam Steel Association (VSA), the local construction steel industry turns out about 11 million tons annually while the country only consumes 5.5 million tons a year.

Speaking at a meeting on Monday, Nguyen Manh Quan, director of the Heavy Industry Department under the industry ministry, said that the ministry this year only calls for investment into steel billet production. The ministry will consider not granting investment certificates to rolled steel projects given the local supply far exceeding the demand, he said.

Pham Chi Cuong, chairman of VSA, noticed despite the fact that many local steel plants only operated at 60% of capacity, one more construction steel plant with an annual capacity of one million tons will be active this year. Furthermore, Formosa steel plant in Ha Tinh Province will come on stream with a capacity of one million tons a year in 2015, he added.

The industry ministry on January 31 approved a development zoning plan for the steel production and distribution system.

Under the plan, the nation by 2020 will remove small-scale cast iron and steel billet plants and rolled steel production lines, exclusive of cast iron furnaces for the mechanical industry and stainless rolled steel and high-quality steel production lines.

The nation from 2013 will not license new projects having backward technology, causing environmental pollution and wasting energy.

“The zoning plan of the steel industry is in the right direction, but problems rest with the issuance of investment licenses and the project’s supervision, resulting in many steel plants failing to run in full swing,” Cuong stressed.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR

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