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BUSINESS IN BRIEF 20/3

access_time Mar 20,2017 chat_bubble_outline 22 views

Vietnam’s total export turnover amounted to US$176.63 billion last year.


BUSINESS IN BRIEF 20/3



Co-held by the HCMC Department of Industry and Trade, HAWA, and Lien Minh Wood Handicrafts Joint Stock Co, the four-day fair is taking place from March 8 to 11 at the Saigon Exhibition and Convention Center in HCMC’s District 7, featuring more than 1,500 booths of 313 domestic and international exhibitors, up 24% and 23% year-on-year respectively.

The event features 100 foreign brands, up 72% over last year. They come from countries and territories with large woodworking potential and supporting industries such as Singapore, the US, Australia, Canada, Denmark, Italy, Hong Kong, Ireland, the Republic of Korea, Luxembourg, Malaysia and New Zealand.          

Teen hackers fined for attack on Vietnam's airport websites

The Ministry of Public Security said the hackers launched their attacks because they were eager to explore new things and wanted to show off for the hacker community.

Vietnam's national security service has identified and fined the families of two 15-year olds who launched benign attacks on the nation's airport websites.

Between Wednesday and Friday, the teenage duo disrupted the website at Tan Son Nhat, the country's busiest airport, along with the sites of the Da Nang airport and three others, the Ministry of Public Security announced on Saturday.

Investigators identified the suspects as L.C.K.D. from Ho Chi Minh City and P.H.H. from the nearby Dong Nai Province. The attacks caused no permanent damage to the airports or the state.

The ministry told reporters the teens launched the attacks because they were eager to explore new things and wanted to show off to the hacker community.

Given their young age and genuine remorse, the police issued administrative fines and asked their families to help monitor them.

Tan Son Nhat Airport's website was hacked on Wednesday, but resumed normal operations the following day.

An aviation official said the website could not be accessed on that night, when the front page displayed a cyber security warning.

No data was stolen and the airport's information system was not damaged, the official added.

Representatives from the Civil Aviation Administration of Vietnam said the hacker behind the attack probably wanted to raise an alert about poor cyber security and did not intend any harm.

An official from the Southern Airport Authority said the incident didn't affect flights.

Last July, hackers delayed roughly 2,000 passengers by attacking Vietnam Airlines' domestic check-in computer system.

A Solar without environmental report?

China’s JA Solar Vietnam project had to stop construction after the investor was found not to have prepared the necessary environmental impact assessment.

Nguyen Anh Quyen, head of the Bac Giang Management Board of Industrial Zones where the US$280-million JA Solar is located, admitted at a local conference that JA Solar had started construction before its environmental impact report was approved.

On November 27, 2016, the JA Solar Vietnam plant officially started construction at Quang Chau Industrial Park in Viet Yen district.

The start violated procedures. It is reported that the investor submitted the document requesting approval for its environmental impact assessment report to the Ministry of Natural Resources and Environment on February 20, 2017. The results will be released in April 5, 2017.

The government is tightening supervision of environmental protection measures after the scandal caused by a unit of Taiwanese conglomerate Formosa Plastics.

“We should not trade the environment for overambitious goals,” Prime Minister Nguyen Xuan Phuc previously stressed.

JA Solar has not disclosed other details related to the plant’s capacity, but said it is expected to create 3,000 jobs during the construction period. Once they start the plant, a revenue of US$5 billion will be generated every year.

Creating momentum for Vietnam’s tourism development

Vietnam’s tourism has developed rapidly over the past few years but its potential has not been fully tapped to become a spearhead economic sector.

The Political Bureau of the Party Central Committee has issued a resolution on strengthening sustainable tourism development. 

Vietnam’s tourism sector over the past 15 years has contributed to economic restructuring, international integration, and promoting Vietnam’s land and people. The Party resolution aims to achieve tourism professionalism, uniform infrastructure, competitiveness improvement.

Vietnam aims to attract 17 to 20 million foreign tourists and serve 82 million domestic tourists by 2020. The sector is expected to contribute 10% to Vietnam’s GDP, earn US$35 billion in direct revenue and US$20 billion from exports via tourism, and generate 4 million jobs. Tourism is targeted to become a spearhead economic sector to enable Vietnam to be one of Southeast Asia’s greenest economies. 

Nguyen Van Tuan, General Director of the Vietnam Tourism Administration said “The resolution is of great importance. Its targets and comprehensive solutions show Vietnam’s determination to make tourism a spearhead economic sector.”

Vietnam’s tourism potential is ranked 24th out of 141 countries but its tourism competitiveness is ranked 75th. The Politburo’s resolution creates an important momentum for the sector. It suggests a number of solutions including changing the mindset on tourism development, restructuring the tourist sector toward sustainable growth and international integration, fine-tuning legislation on tourism development, upgrading infrastructure, continuing to advertise tourism, creating a favorable environment for enterprises and the public to develop tourism, and focusing on human resource training. 

Mr. Tuan added that “The resolution defines the tourism as an inter-sectoral and inter-regional sector. So, developing tourism is the task of the whole political system at all levels and the whole society, with enterprises and the community playing an important role. It’s important to get all agencies involved in carrying out policies.”

The Ministry of Culture, Sports and Tourism is expected to complete a draft Government Action Program on tourism development to submit to the Prime Minister in April. The Action Program will describe the tasks and policies to be undertaken by each locality and sector focusing on changing the public mindset on tourism development through communications activities.

More solar power projects to be developed in Binh Phuoc

The southern province of Binh Phuoc has two communes eligible for solar power projects with capacity between 130-300 MW, according to the Power Development Project Management Board No.6 under the Electricity of Vietnam (EVN).

The communes are Loc Thanh in Loc Ninh district and Tan Thanh in Bu Dop district, the board said.  

Binh Phuoc has high thermal radiation, with about 2,400-2,500 hours of sunshine a year.

Vice Chairman of the provincial People’s Committee Huynh Anh Minh said Binh Phuoc is calling for investment in solar power projects in tandem with high-tech agriculture development. 

Detailed surveys of land use in the locality should be done to build a roadmap for solar power projects, he said.

EVN plans to mobilise total investment up to US$1 billion for energy development, focusing on solar energy projects.

Vietnam has enormous solar potential, especially in its central and southern regions. It has average solar irradiation of 4-5 kWh/squ.m/day, comparable to Thailand and the Philippines, which are more developed solar markets in the region, as well as to mature international markets like Spain and Italy. 

The Vietnamese Government has recognised this potential and aims to significantly increase renewable energy production, including solar power.

Under the newly revised Power Development Plan for until 2030, which includes ambitious development targets for renewables, the capacity of solar photovoltaics is hoped to increase from about seven megawatts (MW) now to 850MW by 2020 and 12,000 MW by 2030.     

Insiders talk climate, integration-adapted coffee industry

Developing Vietnam’s coffee industry in response to climate change and international integration was discussed at a workshop in Buon Ma Thuot city, the Central Highlands province of Dak Lak, on March 12.

Le Van Duc, Deputy Director of the Department of Crop Production under the Ministry of Agriculture and Rural Development, said the coffee farming area needs to be kept at about 600,000ha to develop the industry sustainably. 

The Central Highlands provinces of Dak Lak, Lam Dong, Gia Lai, and Dak Nong should be designated as the key cultivation region with 530,000ha. The remaining area should be concentrated in Dong Nai, Binh Phuoc, Ba Ria-Vung Tau, Kon Tum, Quang Tri, Son La, and Dien Bien provinces.

He called for more investment in research to develop high-quality coffee varieties which are productive and are resilient to diseases and climate change.

Existing policies need to be implemented more effectively to develop agricultural and forestry plant varieties, minimise losses in production, expand large-scale fields, and encourage cooperation in agricultural production.

Duc also underscored the need for manpower training to ensure a high-quality workforce for the industry.

Meanwhile, Truong Hong, Acting Director of the Central Highlands Agriculture and Forestry Science Institute, said aside from planning and technical solutions, the State should launch commercial tree insurance programmes and complete coffee-related policies such as those on infrastructure development, providing soft loans for coffee farmers, and applying science-technology in coffee production.

Vietnam has about 643,160ha of land for coffee trees at present. Coffee productivity reached 2.43 tonnes per ha in the 2015-2016 crop, generating an output of almost 1.46 million tonnes of coffee beans, up 5,500 tonnes from the previous crop.     

AEON unveils plans to branch out in Hanoi

AEON, the largest retail giant in Asia, has unveiled plans to branch out and begin construction on its second mega mall in the capital city of Hanoi.

The announcement for the new 95,000 square metre mall to be constructed in the urban district of Ha Dong came at a meeting on March 10 of the Hanoi People’s Committee.

Subject to the putting in place of badly needed bus and railway infrastructure, planning consent being achieved and the signing of pre-lets with tenants, the redevelopment is scheduled for completion in 2019.

Viet Nam’s firms seek out opportunities in Singapore     

As many as 110 small and medium-sized enterprises (SMEs) from Viet Nam participated in a conference in Singapore last Friday to seek business and investment opportunities in this foreign market.

The meeting was inspired by the co-operation among the Viet Nam–Singapore Friendship Association, the Vietnamese Embassy in Singapore and the Vietnamese Entrepreneurs Club under the Vietnamese Association of SMEs.

At the conference, Vietnamese Ambassador to Singapore Nguyen Tien Minh highlighted the presence of Vietnamese SMEs participating in the event for the first time, which he said indicated their ability to take advantage of opportunities overseas. Through Singapore, Vietnamese firms can better serve the regional and global market, especially Europe, a significant trade partner for both Viet Nam and Singapore, Minh said.

The diplomat also said the relationship between the two countries had grown rapidly over the past few years in all fields of co-operation such as economics, defence, education and training and citizen exchange. Singapore is currently the third-largest foreign investor and the leading ASEAN investor in Viet Nam, with over US$38 billion invested in more than 1,600 Vietnamese projects related to the processing, technology, manufacturing and real estate, as well as construction, transportation and logistics industries. In addition, Singapore is Viet Nam’s 12th largest trading partner, with bilateral trade doubling over the last decade to reach nearly $16 billion last year.

Singapore Business Federation (SBF) representative Thian Tai Chew told reporters that the latest survey found the ASEAN was the top region where Singaporean businesses wanted to expand their investments, while Viet Nam ranked third amongst the Southeast Asian countries for targeted investment.

He also confirmed that more than 24,000 SBF members, mostly SMEs, were interested in Viet Nam’s market, typically in the food, retail, e-commerce and supply chain space, as well as infrastructure and urban development. Singaporean SMEs shine in these sectors, and they want to share their experiences with their Vietnamese partners.

Besides providing information on investment and the business environment in Singapore, the conference also gave Vietnamese firms answers to their questions and granted them the opportunity to network and form alliances for co-operative projects or to expand their exports in the near future.

Recent high-ranking visits between the two countries have developed bilateral relations, promising to open new opportunities for both sides’ enterprises to foster trade and investment links.

The upcoming visit to Viet Nam by Singaporean Prime Minister Lee Hsien Loong at the end of March is expected to promote co-ordination in a variety of areas, especially in the exchange of citizens. 

US$2 million expenditure on fruit imports per day

Vietnam imported more than US$164 million worth of fruit and vegetables during the first two months of this year with 70% of the figure coming from Thailand and China, according to the General Department of Vietnam Customs.

Accordingly, Vietnamese people spend nearly US$2.8 million each day on fruit and vegetable imports, including roughly US$2 million from Thailand and China.

Since early this year, Thailand has been the biggest supplier of fruit and vegetables for Vietnam with US$82.6 million, followed by China (US$31.6 million), Myanmar (US$15 million) and the US (US$13.2 million).

Despite being an agricultural nation, Vietnam imported a huge volume of fruit and vegetables during the two-moth period, thus driving import value up from US$200 million to close to US$1 billion.

Major import products are apples, oranges, pears, kiwis, cherries, mangoes, custard-apple, tamarind, cabbages, salad, and potatoes.

Meanwhile, Vietnam Customs reports that fruit and vegetable exports jumped 27% to US$421,000 against last year’s same period, primarily targeting the highly lucrative markets of China, Japan, Taiwan and Canada.

Clean rice processing cuts costs, emissions

The Sông Hậu Food Company, a rice exporter, has reduced its energy consumption by 983,764 kWh in the past four years, saving US$62,615.

An official of its parent company, Vinafood 2, said reduced energy costs helps reduce greenhouse gas emissions and enables cleaner rice production.

The result was achieved under a project applying efficient, cleaner production methods, said Phạm Văn Tỏ, deputy manager of Vinafood 2’s Technical and Construction Department.

He said that in rice processing, electricity costs usually account for 20 to 35 per cent of total production costs.

Energy is usually one of the highest costs a company faces. If it can reduce energy consumption by just a few per cent, it can make a significant savings along with contributing to greenhouse gas reduction, he said.

In 2013, the corporation had approached the Resource Efficient and Cleaner Production Programme (RECP), a UNIDO-UNEP joint programme financed by the Swiss State Secretariat for Economic Affairs (SECO) and implemented by Sofies (a consultancy in Switzerland) and the Việt Nam Cleaner Production Centre Co Ltd (VNCPC).

A pilot project was implemented in two member enterprises, Sông Hậu Food Company and An Giang Food and Foodstuff Company in 2013, and expanded to six other member companies in March last year.

Trần Văn Nhân, director of VNCPC, said the rice industry’s export achievements of the past years came at the cost of adverse impacts on the environment during production and processing.

From the entire rice value chain, the project chose to pilot the processing phase, since this has the largest impact on the environment, he said.

“We realise that there is a great potential to turn waste resulting from rice milling into biomass energy, which significantly contributes to reducing climate change.”

In addition, with energy costs accounting for 35-40 per cent of rice production costs, “if we can save a part of the largest expenditure, it will significantly help businesses reduce production costs and increase profits and competitiveness,” he said.

Through many activities - including cleaner production audits at participating companies, supporting companies in identifying cleaner production technologies and application strategies and training - the project has helped firms improve their energy efficiency.

It has also suggested measures to turn waste into biomass energy.

Dr. Martin Fritsch of Sofies said Việt Nam was a leading rice exporter, focusing on large volumes. It was facing quality challenges that weakened its competitiveness.

The sector needs to effect changes to meet an increase in demand for higher quality rice by creating incentives for rice farmers and millers to adopt sustainable production practices, he said.

This would also help to avoid continuous degradation of natural resources, such as soil and water, he said.

The project aims to promote efficient use of natural resources, including materials, water and energy and minimise waste and emissions, including those discharged into the water, air and land.

Delegates at a recent conference titled “Towards a Sustainable Agro-Industrial Ecosystem in the Mekong Delta in Việt Nam-Focus on the Rice Value Chain,” said the project will enter its "mainstreaming phase" this year.

A broader collaboration between all stakeholders was necessary to align interests along the value chain and to achieve a “sustainable mainstreaming effect for the Vietnamese rice sector,” they added.

Basel II inevitable for Vietnamese banks

As Vietnam becomes more integrated into the world economy, banks looking to improve competitiveness and governance, especially in risk management, should apply Basel II standards.

At the beginning of the year, the State Bank of Vietnam (SBV) issued Directive No. 01/CT-NHNN on implementing monetary policies and ensuring safe and effective banking operations. 

One of the focuses of the directive is that in 2017, the project to restructure financial institutions and deal with impaired loans in the period from 2016 to 2020 will be conducted, in the framework of which Basel II will be researched and applied to bring banks closer to meeting international standards.

According to the directive, the whole banking system, not just the ten banks named in February 2016, will have to apply Basel II standards soon.

General director of Orient Commercial Joint Stock Bank (OCB) Nguyen Dinh Tung stated that the application of Basel II standards is important to integrate with the global banking system, protect customers, and reduce risks and mistakes.

“However, Basel II proscribes strict criteria for legislation, database management, capital adequacy, and so on, so its application is challenging,” he shared. To deal with this, the OCB prepared a database and funds as the two pillars of risk management. 

By November 2016, OCB had completed the first stage in its Anti-Money Laundering (AML) project. The bank is completing the final stages to officially apply Basel II in the third quarter of this year.

Basel II is a set of international banking regulations put forth by the Basel Committee on Bank Supervision (BCBS), which sets minimum capital requirements for banks and requires banks to apply risk management methods.

In Vietnam, to apply Basel II, banks must deal with expenditures on investment and technology, human resources, and historical transaction data, among others.

In the project draft to restructure the economy from 2016 to 2020, prepared by the Ministry of Planning and Investment, some goals are set, such as cutting back non-performing loans, reducing the number of weak banks, and assuring 70% of banks apply Basel II in 2020.

Dr Nguyen Tri Hieu, a financial specialist, believed that the application of international standards is necessary for risk management and to reduce the probability of default, creating trust among depositors.

Dr Nguyen Van Thuan, head of the Finance and Banking Department of Ho Chi Minh City Open University, said that the difficulty lies in enhancing Vietnamese banks’ capital resources, especially for small banks.

Schools and stores told to embrace e-payments

Schools, three wholesale markets and Saigon Co.op’s retail stores in HCM City will accept customers’ electronic payments, instead of cash.

HCM City vice chairman Tran Vinh Tuyen has requested Hitachi Asia Co Ltd in Vietnam to install devices that make electronic payments possible at the canteens of some schools, 100 retail stores of Saigon Co.op and Hoc Mon, Thu Duc and Binh Dien wholesale markets.

In the coming time, commuters can use bank cards to pay for water taxi, water bus and metro services.

Tran Vinh Ky Son, head of IT at Hitachi Asia in Vietnam, proposed using bank cards or mobile phone apps to buy metro or bus tickets or goods at vending machines, and pay parking and toll fees.

Cash-based transactions remain popular in Vietnam, leaving huge negative impact on e-commerce enterprises. In recent years, online shopping websites have mushroomed but shoppers still prefer paying by cash on delivery.

The E-Commerce and Information Technology Agency under the Ministry of Industry and Trade said electronic payments still make up a small fraction. In 2014, 64% of online shoppers chose to pay by cash. 

A small number of buyers used international credit cards such as VISA, MasterCard, JCB and AMEX, debit cards or digital wallets to pay for goods and services.

More firms burdened with informal fees

A recent Vietnam Chamber of Commerce and Industry (VCCI) survey found 34% of businesses were grappling with informal fees last year, two percentage points higher than in 2014.

VCCI on March 7 announced results of the survey of 3,500 operational businesses in the country. Up to 39% of respondents said they would face discrimination if they declined to pay informal fees for officials.  

Dau Anh Tuan, head of the legal department at VCCI, said firms had to pay informal fees for taxmen. “They are concerned that they would be in trouble and face more tax inspections although they are doing nothing wrong.” 

An assessment report conducted in 2016 by VCCI and the World Bank (WB) on tax procedure reform and business satisfaction indicated 53% of firms grappled with tax inspections in the past year.  

The bigger businesses are, the more inspections they face, Tuan said, adding inspections were reported at 74% of companies with chartered capital of more than VND100 billion, 68% with chartered capital of VND50-100 billion and 67% with chartered capital of VND10-50 billion.

Tuan said 80% of inspections were carried out by tax agencies, 9% by other authorities and 11% by interdisciplinary teams.

Tax refund procedures remained burdensome, the report pointed out. Tuan said the survey found 30% of eligible firms did not complete such procedures as they were complicated, 20% considered them as being time-consuming, and 17% complained the requirements were too difficult to meet.

However, Tuan said firms’ level of satisfaction with access to information about tax and administrative procedures was pretty high and the quality of information improved. For instance, 93% of respondents were satisfied with information posted on the websites of tax agencies and 92% were pleased with dialogues with tax officials.

Another improvement was that the number of foreign-invested enterprises complaining about tax procedures declined to 53% last year from 57% in 2014. The respective percentages of private companies were 49% and 41%.

But 31% of firms said tax filing was still troublesome while 26% grappled with tax refunds. Changing tax information and completing procedures for tax cuts and exemptions still challenged 15% and 10% of respondents respectively.

Speaking at the announcement ceremony of the survey, Minister of Finance Dinh Tien Dung said the time required for completing tax filing and payment procedures had been cut to 186 hours a year as recognized by the WB after the Ministry of Finance’s push on streamlined administrative procedures in this area. The ministry is reviewing more procedures and will make them public in the coming time.

Dung said tax agencies had been told to reduce inspections and not to bother businesses. Direct contacts between taxmen and corporate taxpayers should be limited.

VCCI chairman Vu Tien Loc said reducing the time for tax procedures from 872 hours a year to the current level was a great effort of the tax sector as assessed by the WB.

Loc said over the past two years the ministry had asked independent organizations to assess firms’ satisfaction with tax and customs procedures and management, and announced the final results.

Loc noted the tax sector should work harder to improve the quality of tax rules, simplify relevant administrative procedures and provide more backing for small and medium enterprises.

Phu Yen strives for 5,000 tonnes of tuna

Since the beginning of the year, fishermen in the central coastal province of Phu Yen have brought onshore over 540 tonnes of tuna. The volume represented a decrease of 27 percent year-on-year.

Local fishermen said so far this year, they have enjoyed bumper catches, with each boat netting between 1.5 and 3 tonnes.  However, the total amount was less than last year’s figure, the fishermen said, citing the fact that the area around the Dong Tac fishing port was filled with silt has prevented more than 220 local fishing boats from going fishing.

In late February, the port was dredged, making way for all boats to begin their voyages. Local fishermen expect that the improvement of the port together with the use of steel-hulled boats will help increase the volume of tuna.

Phu Yen is now home to nearly 800 fishing boats, working at Hoang Sa and Truong Sa fishing grounds. Local fishermen expect to catch roughly 5,000 tonnes of tuna this year.    

Saigon Co.op eyes 13-percent growth target

The country’s leading retailer, Saigon Co.op, has set itself a target of 13 percent sales growth this year.

It also plans to open eight to 10 Co.opmart supermarkets, one Co.opXtra hypermarket, one Sense City mall, 65 Co.op Food shops, and 500 Co.opSmile convenience stores, develop a new business model targeting high-end customers and enhance the distribution of organic products.

Diep Dung, Saigon Co.op chairman, said the co-operative would seek to optimise its existing operations, expand its network and improve the quality of goods, services and management and develop human resources and logistics to retain its leading position.

Despite economic difficulties and intense competition last year, Saigon Co.op saw an 11 percent growth in revenues, while its exports via Co.opXtra hypermarkets, a joint venture with Singapore, went up by 60 per cent.

It opened 42 new Co.opmart supermarkets, Co.op Food stores, Sense City and Co.opSmile convenience stores last year.

Speaking at a Saigon Co.op review meeting, Tran Vinh Tuyen, deputy chairman of the HCM City People’s Committee, hailed the co-operative’s achievements, saying it had contributed greatly to the city’s economic development.

He urged the company to focus on both expanding at home and strengthening co-operation with foreign partners to sell Vietnamese goods abroad.

Reference exchange rate up 3 VND

The State Bank of Vietnam set the reference VND/USD exchange rate at 22,254 VND/USD on March 20, up 3 VND from the end of last week.

With the current /- 3 percent VND/USD trading band, the ceiling exchange rate is 22,913 VND per USD and the floor rate is 21,586 VND per USD. 

In the opening hours, commercial banks made slight changes to their rates. 

Vietcombank listed the buying rate at 22,745 VND/USD and the selling rate at 22,815 VND/USD, up 5 VND.

Meanwhile, BIDV set its buying and selling rates at 22,740 VND and 22,810 VND, per USD, down 5 VND.

Vietinbank revised its buying rate up by 20 VND to 22,750 VND and its selling rate up by 10 VND to 22,820 VND, per USD.

SBC seeks to boost partnerships among RoK, Asian SMEs

The Korea Small and Medium Business Corporation (SBC) said on March 19 that it has established cooperation channels with Asian countries, including Vietnam, Cambodia and India, as part of its efforts to bolster regional growth.

SBC has signed agreements with its partners in Vietnam, Cambodia and India to promote investments and set up close-knit industrial relations that contributes to growth. 

A delegation led by SBC chief Lim Chae-un visited three Asian countries last week and discussed ways to strengthen ties between small and medium-sized enterprises (SMEs).

Officials discussed measures to support enterprises in setting up partnerships and boosting investments.

SBC asked India to make it easier for firms from the Republic of Korea to do business in the country. 

The corporation is also planning to come up with follow-up measures to help local SMEs benefit from the signed agreements.

Coffee supply in Vietnam hits 3-year low

Coffee prices in Dak Lak, the country’s largest coffee bean-growing province, stood at US$2.08-US$2.11 (VND47,300-VND48,000) per kg at the end of last week as stockpiles remain low.

Inventories are expected to linger at a three year low until the next harvest season gets underway in October, said Pham Ngoc Bang, deputy general director of Dakman Vietnam based out of Dak Lak.

He noted that only about one quarter of last year’s harvest is left, which makes it hard to purchase beans. Heavy rain in Vietnam last December took a toll on both bean quality and supply during the drying process.

Beans are much darker and of lower quality than usual due to the rain, he added, which has resulted in sellers taking a negative hit on prices.

Activity in the coffee market is expected to pick up over the next few weeks as Indonesian farmers begin an early harvest starting late March before they enter the main harvest season beginning in July.   

Phung Thi Tho in the multi-billion VND farming business

Phung Thi Tho of Ba Vi district, Hanoi, has become well-off from farming on her poor piece of land.

With great determination, Ms. Tho developed 12 hectares of bare land following the garden-pond-livestock model. She has been honored as one of 100 outstanding Vietnamese women.

Phung Thi Tho comes from a farming family whose income is mainly based on agricultural production. In 2010, Tho’s locality had a policy to encourage local people to develop farming households. She started developing the garden-pond-livestock economic model on 12 hectares of land with only one buffalo. 

Despite numerous difficulties, Tho tirelessly learned from the experience of others. She said “At first, I planted peas. It took time to harvest peas on the two hills. After that, I shifted to growing jicama. With the revenue from that, I hired workers and invested in grapefruit and longan”.

During her startup period, Tho faced limited capital and fluctuating markets. With the help of the Women’s Union and the local Farmers’ Association, she survived and expanded her business. Tho took part in training courses on science and technology transfer and studied economic models. Tho’s business has become stable and profitable. The two bare hills are now covered with trees. The 12 hectares of land is used for aquaculture, orchards of grapefruit, longan, jackfruit, pineapple, and animal husbandry. This model generates income of more than US$44,000 per year. 

Ms. Tho said “I used to employ a lot of workers but now I use machines for digging, cutting roots, and fertilizing. I keep updated on market demand to know what to grow”.

Tho’s farm provides 30 workers stable incomes of US$130 to US$300 per month. Tho is helping poor families escape poverty and improve their lives. 

Ms. Nguyen Thi Ha of Ba Vi district, who has worked at Tho’s farm for 7 years, said “Ms. Tho has provided us with stable jobs and income. She enthusiastically shared with us her experience in farming and husbandry”.

Tho’s garden-pond-livestock model has been replicated in her locality.

Vietnam boosts tea exports to the US

The US is the world’s 4th biggest tea consumer. Vietnam exports about 2% of its tea production to the US, earning US$11 million.

More than 158 million Americans drink tea every day with total spending of over US$80 billion annually for tea products. Americans are demanding customers who require high quality and food safety. 

Peter Goggi, President of the US Tea Association, said Americans are used to certain types of tea, it’s a challenge to market new products. But Goggi said the unique flavor of Vietnamese tea and Vietnam’s long history of tea growing are advantages.

Le Hong Thai, Marketing Director of Phu Ho Fram Company, said, “Vietnam has a long history of growing and processing tea. Americans will be interested in the way Vietnamese farmers collect, process, and scent tea leaves with flowers.”

To build a trademark for Vietnamese tea and penetrate the US market, Vietnamese tea companies are improving product quality, packaging, and food safety and hygiene. They have also launched marketing programs that promote the interesting story of Vietnam’s tea culture.

At last year’s Toronto Tea Festival, two Vietnamese tea companies won gold and silver awards. Vietnam is the world’s 7th biggest tea producer and 5th biggest exporter.

SonKim Land wins IAIR award for leadership

SonKim Land Corporation, a leading Vietnamese real estate developer, received the IAIR Award for “Company of the Year for Leadership Property and Real Estate Vietnam” at the 7th IAIR Summit and Awards held at the Sheraton Hong Kong Hotel and Towers.

SonKim Land had the highest score in this category as a leading real estate developer in luxury projects, including residential, hospitality, retail, and office buildings. 

It also received points for using modern design methodologies to create economically and environmentally  integrated, self-sustaining master developments.

Nguyen Hoang Tuan, chairman of SonKim Land, said, “We are very proud of winning this prestigious award, as this is the result of IAIR’s annual surveys to provide a qualitative and quantitative review of the best global firms with a focus on sustainability. This award once again proves SonKim Land’s reputation as a successful property development company in the Vietnamese market, focusing in the premium and luxury segment through developing projects in prime locations.”

SonKim Land is developing the sky villa project (Serenity Sky Villas) in Ho Chi Minh City’s District 3 – a true luxury project in the heart of downtown Ho Chi Minh City. 

In addition, customers have high trust in the company’s premium residential project Gateway Thao Dien, and the luxury apartment project called The Nassim, a joint venture project with HongKong Land, a reputed global developer.

“SonKim Land’s ongoing development projects are on schedule, demonstrating stable growth while affirming our strong financial strength of SonKim Land,” Tuan said. “This award creates the premise for SonKim Land to become the leading real estate development and investment company in the country, as well as in the region.”

Recently, SonKim Land has announced the successful closing of its international round of fundraising. Through the Lemongrass Master Fund, Japanese investors have poured US$100 million into SonKim Land.

An IAIR Award is among the world’s leading prizes for excellence in the global economy, innovation, and sustainability. For this year’s award, the organising board surveyed its 150,000 readers and gathered information from its editorial staff located around the globe. 

It has also received important feedback from its main partners – Marcus Evans, Opal Group, IDC, and more – that conduct leading market research, organise industrial conferences, and host international business summits.

IAIR Awards is a global roadshow held in strategic financial centres such as Hong Kong, Dubai, London, Singapore, Milan, and New York. 

Some of its past winners and top-ranked companies include Morgan Stanley, Bank of China, Rockefeller, BNP Paribas, IBM, HDFC Ergo, Freshfields, UBS, Novartis, BlackRock, Deutsche Bank, Aviva, Vodafone, Russel Investments, BASF, and Daimler.

Poor crop hurts cashew farmers

Many farmers in the southern provinces of Bình Thuận, Bình Phước and Bà Rịa – Vũng Tàu have been encountering difficulties due to a poor cashew crop caused by bad weather and plant diseases.

Nguyễn Đình Chương, a farmer who has four hectares of cashew trees in Bình Phước’s Bù Đăng District, said: “We harvested two to three tonnes of cashew nuts a year in the previous years. This year, when cashew prices have gone up to VNĐ40,000–45,000 per kilogramme, we have a poor crop.”

Many trees gave no fruits at all, he said.

Bù Đăng has nearly 60,000ha under cashew, the largest in Bình Phước. But over 865ha have been damaged by insects while some other areas have suffered a long drought.

Ngô Văn Tâm, an experienced cashew grower in Bình Thuận Province, said he harvested very little cashew from his two hectares of land this year, blaming it on untimely rains and white frost.

Bình Thuận has some 18,000ha under cashew, mainly in the districts of Đức Linh, Tánh Linh and Hàm Tân.

With over 10,000ha, Đức Linh accounts for the largest cashew growing area in the province.

According to the Việt Nam Cashew Association (Vinacas), in many areas farmers completely lost their cashew crop, while in other areas they harvested only 40-70 per cent of the normal output.

This year total output has dropped by half.

Some 26,000 tonnes of cashew products were exported in the first two months, a 26.2 per cent fall year-on-year. Earnings were down 12 per cent to US$232 million.

Nguyễn Đức Thanh, chairman of Vinacas, said: “Cashew prices are on the rise in the world market, and higher than last year. Cashew nuts sell for $9.5 per kilogramme while unprocessed cashew sells for $1,800 per tonne. Cashew prices could increase further.”

According to Nguyễn Văn Lãng, an expert on cashew, the country’s output is not enough for the processing companies and they import raw nuts from Ivory Coast.

Given the rising cashew prices and poor harvest, large volumes of raw cashew are likely to be imported this year.

Thanh said if this year local output dropped by 200,000 tonnes, processors would import 700,000-800,000 tonnes.

Steel prices set for slight rise     

Steel prices will remain stable on the domestic market this month but are expected to increase slightly soon, according to the Ministry of Industry and Trade.

The ministry said in February that local steel prices, excluding value added tax (VAT), were similar to those of the previous month - VND9.9-VND10.6 million (US$434-$465) per tonne of common steel bars in the north, and VND10-VND10.7 million per tonne in the south. The price of rolled steel products stood at VND10-VND10.6 million per tonne in the north and VND10.2-VND10.9 million per tonne in the south.

Those prices would remain intact this month due to high supply and stable demand, as well as stability of the global steel prices.

However, those prices would likely increase 1-2 per cent because the local construction market would experience strong growth in major cities this year due to high housing demand, the ministry said. Increasing demand for public investment would also push up prices.

The World Steel Association forecast that steel markets in Thailand, Malaysia, Viet Nam, Indonesia and the Philippines would grow 6 per cent due to demand for public investment and expansion of infrastructure, reported cafef.vn.

Meanwhile, according to the Government’s development plan for the steel industry by 2020, Viet Nam will lack 15-20 per cent of steel beams every year.

The ministry said that in the first two months of 2017, the steel industry produced 838,700 tonnes of drawn steel, a year-on-year increase of 21.4 per cent; more than 1 million tonnes of rolled steel, a year-on-year surge of 35.4 per cent; and 722,200 tonnes of flat and angle bar, up by 7.1 per cent year-on-year.

The Ministry of Industry and Trade said domestic steel production was able to meet the entire demand for steel ingots, steel beams and cold rolled steel at 7-8 million tonnes per year.

But Viet Nam could not produce domestically hot rolled steel that is essential input material for many industries, such as cold rolled steel, galvanized steel, steel pipe, shipbuilding and manufacturing, with a high demand on 10 million tonnes per year.

The nation still must import this product, resulting in a growing trade deficit and opening the door to cheap, low-grade imports to Viet Nam.

The General Department of Customs reported that during the first two months of this year, the country imported 2.7 million tonnes of steel, spending $1.4 billion. The imports surged by 0.2 per cent in volume and 49.3 per cent in value.

Average import price in the first half of February reached $538.4 per tonne of steel, a year-on-year increase of 56 per cent, and $378.7 per tonne of steel ingots, a year-on-year surge of 40 per cent.

The Viet Nam Steel Association said cheap price of steel imports had presented local steel producers with difficult competition. To protect local steel producers, the association has proposed that the Government impose defence measures for some imported steel products. 

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

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