VIETNAM BUSINESS NEWS HEADLINES NOVEMBER 24
Lien Chieu Port to play key role for a sustainable Da Nang
Speeding up the construction of the new Lien Chieu Cargo Port would help promote Da Nang as a key international logistics centre, and allow the existing Tien Sa Port to be reserved for cruise ships only.
Former general director of Tien Sa Port, Nguyen Huu Sia, made the statement at a recent workshop held to discuss changes to the city's Master Plan proposed by Sakae Holdings and Subarna Jurong Consultants from Singapore.
Sia said the proposal to build Lien Chieu Port and a logistics centre was planned with support from the Japanese International Co-operation Agency (JICA) in 2005, and construction for the first stage was scheduled for 2025.
He said Tien Sa Port, which was built in 1965, could only handle 12 million tonnes of cargo per year, and any expansion to it would trigger more serious traffic congestion and accidents on the main road linking the port as well as hit tourism in Son Tra and Ngu Hanh Son districts.
He said Lien Chieu Port would be more convenient as it would connect National Highway 1A, Da Nang-Quang Ngai Expressway, Industrial Zones and Hi-tech Parks and Da Nang International Airport.
Lien Chieu would provide a cargo link with Chan May Port in Thua Thien-Hue, 40km away, and Chu Lai Port and airport 70km from the Da Nang-Quang Ngai Expressway and Dung Quat in Quang Ngai, he added.
The latest proposals from the Singaporean firms involve expanding Tien Sa Port for both cargo ships and cruise liners, with no new Lien Chieu Port included.
Vu Thi Tuan Anh from Sakae Holdings said the development of Lien Chieu Port would pollute Da Nang Bay – an ideal site for luxury tourism development.
“We've said Da Nang should not build Lien Chieu Port in our proposal. Luxury tourism services including healthcare tours, smart tourism and vacations will create major revenue for the city’s coffers,” Anh said.
She said the plan would help Da Nang become a global financial centre and hi-end tourism hub, while the city’s logistics services could be linked to the ports of Chan May, Dung Quat and Chu Lai.
Nguyen Tan Dat, a shipping company representative, disagreed with the plan, saying the expansion of Tien Sa Port to 28 million tonnes of cargo per year would take up docks reserved for the Navy, petrol storage facilities, the fisheries industry and Son Tra Nature Reserve.
Commenting on the proposals, Olivier Soquet from De-So urban design firm, said Da Nang should share links with the neighbouring airports of Phu Bai in Hue City and Chu Lai in Quang Nam by rail and expressways instead of expanding the port.
He said Tien Sa Port should not be enlarged because a bypass system linking the port and the logistics centre would damage the city’s architecture.
He also disagreed with a development plan in the mountainous area to the west of the city, while saying farming areas in the inner city must be reserved for urban farming development.
Mayso Prasha from creative firm Callison RTKM said the Master Plan would take up alleys which were home to millions of family businesses and traditional markets.
He said Da Nang has a unique landscape ranging from the sea, rivers, the delta and mountains, but a tourist attraction on the river had yet to be proposed.
Mayso agreed with the Singaporean consultants on urban development outside the current city centre, but warned that sky-rises should not be built in the new urban and more ‘green’ spaces were needed.
He suggested an eco-district reserved for pedestrians and non-engine vehicles could be built in Da Nang, maybe on the Son Tra Peninsula.
Matsumura Shigeru from Nikkei Sekkei said sustainable and ecological development must be the top priority in the urban expansion plan, and it should include a ‘green’ living area and a 50 per cent reduction of motorbikes and 35 per cent increase in public buses.
Vice-chairman of the central city’s People’s Committee Dang Viet Dung asked the consultancy companies from Singapore to adjust the 2030-45 Master Plan before submitting it to the Prime Minister for approval.
Dung said Da Nang had been designed for future sustainable development on the basis of key elements – tourism, hi-tech industries, logistics and marine economy – with an average growth of 10.1 per cent and per capita income of US$8,700 by 2045.
“We plan a smart city with a population of 2.5 million in 2045. Tourism and services and hi-tech agriculture will be included in the Master Plan, as well as underground transport solutions with seaports and logistics services,” he said.
Lien Chieu Port would handle cargo ships and a main logistics centre for the north-south railway and road network, connecting the East-West Economic Corridor No 2 with Thailand, Myanmar and Laos, he added.
RAL to select adjusting services for fire loss
Rang Dong Light Source and Vacuum Flask JSC (HoSE: RAL) asked its shareholders to select PVI Insurance Corporation and Vietnam International Adjuster (VIA) to evaluate the damage from the fire in August at the request of Ha Noi’s Police.
As per the request, shareholders have to register for the selection by December 3. The selection is expected to be completed on December 20.
On August 28, RAL’s warehouse in Thanh Xuan district caught fire. The company estimated losses of VND150 billion ($6.47 million) for lamps and light bulbs.
The Vietnam News Agency reports that PVI is the fire insurer of the firm. The estimated compensation amount in the contract is about VND150 billion.
Residents at the 54 Ha Dinh Apartment Building were reportedly “heavily affected by mercury leakage caused by the fire”. After the fire, 95 per cent of the households had to be evacuated. Affected households requested the company pay compensation for those who lived within 100m of the blaze.
RAL was asked to pay medical treatment costs of up to VND4 million per person, rent of up to VND60 million per household, and income loss caused by the fire of between VND6-8 million per person.
In addition, the company was required to pay for the emotional distress of VND60 million per person and VND1 billion for every litre of blood contaminated with 0.1 micrograms of mercury.
RAL’s deputy director Tran Trung Tuong said it would respond to the residents soon.
RAL reported revenue of VND2.7 trillion), a year-on-year increase of 20 per cent, and profit before tax of VND205 billion, an increase of 21 per cent.
It also planned to move the factory out of the inner city and was expected to spend VND800 billion to build a new factory in Hoa Lac Hi-Tech Park.
The firm will also spend VND42 billion ($1.8 million) to buy houses as offices and warehouses for two branches in southern Bien Hoa City and one branch in the central highlands of Viet Nam.
Việt Nam needs to promote access to supply chain financing : experts
When trade grows, promoting supply chain financing will help improve the competitiveness of micro, small and medium enterprises (MSEME) in Viet Nam, enabling them to join global supply chains, experts said at the fourth annual conference on supply chain financing in Asia-Pacific in HCM City on Monday.
Viet Nam’s foreign trade volume has increased in recent years, with free trade agreements opening up new market opportunities for local businesses.
However, lack of working capital and transaction banking services such as supply chain finance (SCF) partially hinders producers and suppliers from accepting large orders or developing new relationships with their value chain actors.
Without SCF solutions, suppliers and distributors are not able to optimise their working capital management by converting their sales receivables and inventories to cash and obtain lower-cost financing.
“Local producers and suppliers urgently need efficient financing to support their trade cycles with global partners,” said Julius Caesar Parrenas, Coordinator of the Asia-Pacific Financial Forum under ABAC.
Financial services are one of the critical elements for improving the competitiveness of supply chains in Viet Nam. Not only do SCF services enable suppliers and distributors to increase their working capital, but they will also allow them to conduct more open-account transactions, making them more attractive to global buyers, Parrenas said.
According to the National Secured Transactions Registration System, the share of receivables and inventory interests registered in the total number of security interest registrations in Viet Nam is just about 30 per cent, significantly lower than those in more developed markets.
Ha Thu Giang, deputy director of the Credit Policies for Economic Sectors Department, State Bank of Viet Nam, said financing producers and suppliers would be a development trend of banking activities in Viet Nam in the near future.
However, she also mentioned difficulties such as lack of transparency in corporate financial information, limited capacity of local suppliers, as well as the absence of a comprehensive customer database and e-commerce platforms providing supply chain financing.
“In an export-oriented economy like Viet Nam, availability of SCF products will help local producers and exporters enhance their linkages to global supply chains,” said Kyle Kelhofer, IFC Country Manager for Viet Nam, Cambodia and Lao PDR
“However, few financial institutions in Viet Nam offer modern SCF services on a significant scale, which is a missed opportunity both for the financial services providers and the businesses.”
IFC, in partnership with the Swiss State Secretariat for Economic Affairs (SECO), is implementing a multi-year advisory programme to facilitate supply chain financing for Vietnamese MSMEs by improving the regulatory framework, sector infrastructure, capacities of SCF providers, and awareness of MSME suppliers.
The event was jointly organised by the APEC Business Advisory Council (ABAC), the State Bank of Viet Nam and International Finance Corporation (IFC).
Work against trade fraud should be intensified
Minister of Industry and Trade Tran Tuan Anh has asked market surveillance to promote its role and functions to fight smuggling, trade fraud and fake commodities.
The trade minister had a meeting with the General Department of Market Management and other agencies to discuss measure on combating smuggling, trade fraud and fake goods on Monday.
Director of the General Department for Market Management Tran Huu Linh said that commercial fraud was becoming more sophisticated.
The problem of fake and poor quality goods was also continuing, especially in food products, agricultural materials, medicine, cosmetics and homeware.
Although the general department had achieved certain results in inspection and control of the market from the beginning of this year, these results were still small compared to the market demand, he said.
One of the difficulties was due to professional inquiries, he noted.
Linh said that the department would intensify inspection and control in the peak season of the upcoming Lunar New Year.
In addition, the department also directed its branches to co-ordinate with the functional forces to stop fraud related to fake goods on national highways and border routes.
The minister requested the department to conduct an in-depth study, analyse and draw out the orientations and solutions for later cases. He asked the market management authority to work with other agencies of the national steering committee against smuggling, trade fraud and fake goods; and share information with Ministry of Public Security, Ministry of National Defense, General Department of Customs and General Department of Taxation.
In addition, he asked the department to organise professional training, and enhance knowledge of its officials.
Pottery trade to recognise brand ownership
The central province will recognise the brand ownership for the pottery craft of Pho Khanh Commune in Duc Pho District in order to promote the preservation of the centuries-old trade.
Chairman of the communal People’s Committee Pham Kim Oanh confirmed the news to Viet Nam News, saying the trade was derived from the Sa Huynh Culture (from 2,500 to 3,000 years ago), and is preserved by local potters.
He said three major potteries with 50 potters in the commune are producing terracotta products.
“We have completed the recognition of the trade for prolonged preservation. The pottery commune was included in the provincial Ly Son-Sa Huynh Global Geo-Park that has been submitting for approval by UNESCO,” Oanh said.
“The trade will act as a demonstration for tourists when visiting relic sand archaeological sites of the Sa Huynh Culture.”
An Khe Lake, an archaeological site of the Sa Huynh Culture, is popular among cultural researchers and archaeologists from Viet Nam and around the world.
The commune also plans to build brand recognition for hen ren (a tiny mussel) in the commune.
According to the province, the National Office of Intellectual Property of Viet Nam, under the Ministry of Science and Technology, recognised brand ownership for chives (Allium schoenoprasum) – a scallion species – and products of Ly Son Islands in the province including garlic, onion, seafood, garlic wine, dried seafood and seaweed.
VCCI and UNDP promote business integrity in Viet Nam
Combatting corruption was a big challenge for small and medium-sized enterprises in many countries, especially in Viet Nam where 98-99 per cent of enterprises fell into that bracket, said Vu Tien Loc, president of Viet Nam Chamber of Commerce and Industry (VCCI), at a workshop in Ha Noi on Wednesday.
Small and medium-sized enterprises were vulnerable to corruption, and while the losses to society as a whole were small, they hit those businesses hard, he said.
“Five million household businesses makes Viet Nam a ‘fertile land’ for petty corruption. However, this could be prevented by strengthening governance and creating conditions for this sector to thrive,” Loc said.
According to the Organisation for Economic Co-operation and Development, spending on corruption accounted for up to 50 per cent of Gross Domestic Product worldwide, equivalent to about US$2.6 trillion. The World Bank estimated that $1 trillion was paid each year in bribes, Loc said.
“These are huge numbers. Corruption puts a burden on the business sector’s expenses and destabilises enterprises.
“Corruption leads to less effective public budget allocation. In developing economies like Viet Nam, corruption also affects allocation of land, natural resources and other resources.
“The consequences of corruption in developing countries are much more serious than in developed countries,” he said.
In recent years, ethical violations in the business sector had eroded trust among investors, customers and employees. Bribery cases that had been taken to court had signalled a warning about this issue, he said, adding that corruption and bribery “destroyed the business climate, led to ineffective mobilisation of resources and affected trust among stakeholders”.
“Losing trust is the biggest loss in all economies,” he told the workshop.
Caitlin Wiesen, United Nations Development Programme (UNDP) Resident Representative in Viet Nam, said according to the Viet Nam Provincial Competitiveness Index 2018, more than half of the companies surveyed reported paying “informal charges”.
“One of the key new aspects of the Vietnamese revised Law on Anti-corruption is the expansion of its scope to the private sector. This demonstrates the intention of the Vietnamese Government to combat corruption in all areas of society and implement the requirements of the UN Convention Against Corruption. We need joint efforts from the Vietnamese Government and the business community to effectively implement this new law.”
As Viet Nam is fast integrating into the global and regional economy, the role of the business sector in preventing corruption is urgently important. Promoting a level playing field for businesses requires an effort not only on the part of the Government but also on the part of companies and other stakeholders to “put their houses in order” and participate in collective action in the region, she said.
To help businesses implement the new Anti-Corruption Law, the UNDP and VCCI have developed a business integrity pledge for business associations. With this pledge, business associations commit themselves to promote business integrity and encourage their members to comply with the 2018 Anti-Corruption Law. The VCCI has reached out to potentially interested business associations in Ha Noi and HCM City to encourage them to take the pledge.
Loc from the VCCI said to combat corruption, the VCCI had set up a set of tools to enhance business governance capacity and assist them, especially micro, small and medium-sized enterprises, with digital transformation. About 100 business associations nationwide were key partners to form a network to support enterprises for this project.
At a workshop entitled “Enhancing Business Sector Engagement Through Integrity Pledge Co-operation” on Wednesday, eleven business associations in Ha Noi and HCM City signed the Business Integrity Pledge to uphold the core values of integrity, ethical behaviour and accountability. They will be given guidance to build action plans.
Insurance companies need more high-tech products to be competitive
Speaking at the Viet Nam Insurance Summit, Dr Nguyen Viet Hung, deputy head of the Department of Financial Informatics and Statistics under the Ministry of Finance, said that more IT products should be created by insurance companies to meet customer demand.
The Government has been working on legal regulations on electronic transactions and applied technologies in the Industry 4.0 era. Current legal regulations recognise electronic invoices, and a digital financial-service ecosystem is being set up, he said.
Deputy Minister of Finance Huynh Quang Hai said the ministry should use IT in managing and monitoring the market professionally and effectively. Developing a safe, effective and sustainable insurance market will help raise long-term capital for the economy and protect financial risks for investors, he said.
Tina Nguyen, CEO of Generali Viet Nam, said that insurance firms should increase investment in high-tech applications to reduce risks.
“Compared to the past, more and more young people under 30 years old buy insurance and they like technology,” Tina said.
Nguyen Xuan Viet, chairman of Viet Nam Insurance Association and general director of Bao Viet Insurance Corporation, said that many insurance firms, especially foreign ones, had been applying technology for a long time.
"Young customers like a fast process when they buy insurance,” Viet said, adding that insurance firms should change the method of operation and create more products to attract young customers.
Le Van Thanh, CEO of Bao Minh Insurance, said: “Technologies help us develop distribution channels, and manage and serve customers better.”
Viet said that agencies should connect data with the insurance association so that analyses can be made for more effective development.
Viet Nam’s insurance industry aims to have annual growth rate of 20 per cent by next year and 15 per cent annually in the next five years.
Ngo Viet Trung, the finance authority’s deputy head, said that by next year 11 per cent of the country’s population will have life insurance. The rate will increase to 15 per cent in the next five years.
According to data from the Viet Nam Insurance Association, 8 per cent of Viet Nam’s population has life insurance.
The country has 64 insurance companies, including 30 non-life insurers, 18 life insurers, two reinsurance companies and 14 insurance brokerage companies.
As of September, the total assets of the insurance market had reached VND441 trillion (US$19 million), an increase of 19 per cent compared to the same period last year.
Total insurance revenues have been VND112 trillion, increasing by 20 per cent against the same period last year. In that time, insurance firms paid out VND28 trillion, an increase of 12 per cent compared to the same period last year.
The summit was held by the Viet Nam Insurance Association and IEC Group.
HCM City ensures supply of essential goods for Tet
HCM City authorities are working with local businesses to ensure supply of essential goods under the citys market stabilisation programme for the Tet (Lunar New Year) holiday.
Under the market stabilisation programme for the year, essential foods include 10 commodity groups. These goods normally account for 25-30 per cent of market demand, but in the months prior to and during Tet, the figure rises to 30-40 per cent.
Tran Duy Dong, director of the Ministry of Industry and Trades Department of Domestic Market, said it would ensure supply of essential goods in the last months of the year and during January. The holiday falls on January 25.
Dong, however, pointed out that the supply of essential goods and stabilised prices are “ensured at supermarkets, but prices at traditional markets are not”.
The ministry will also closely monitor changes in supply and demand, and will oversee enforcement of regulations on price registration, price declaration and price management.
In addition, the ministry will focus on prevention of smuggling, trade fraud, counterfeit and fake goods, and poor quality goods in an aim to protect consumers and legitimate businesses.
Pham Thanh Hung, director of Ba Huan Joint Stock Company, said the company was preparing goods to secure sufficient supply for the market at the end of the year.
It has opened an 18-ha farm with a capacity of one million chickens and a 34-ha farm with a capacity of five million chickens.
Nguyen Dang Phu, deputy CEO of Vissan Joint Stock Company, said the company had signed contracts with suppliers to ensure sufficient supply of pork for the holiday, and that production of processed products for Tet was at its peak.
Due to the impact of African swine fever, pork supply has been greatly affected, but the company said it would maintain supply, he said.
Saigon Co.op, which provides essential goods in 10 product groups in the price stabilisation programme, has organised capital supply for satellite enterprises to prepare goods, and its suppliers have also prepared for the holiday.
In October, HCM City began preparing for the Tet holiday by increasing reserves of pork as well as other meat alternatives for pork with promotion and discount activities.
Nguyen Huynh Trang, deputy director of the citys Department of Industry and Trade, said the city has taken steps to ensure pork supply in January.
Since the beginning of the year, the city has been carrying out measures to maintain supply of essential goods for the market.
In the past 10 months, the market prices of essential goods have been fairly stable, and there have been no shortages of goods or sudden hikes in prices, Trang said.
For the pre-Tet and Tet period (from December 26 to January 24), the total value of goods prepared by enterprises will reach more than VND10.22 trillion, she said. Enterprises participating in the price stabilisation programme have promised not to raise prices in the month before Tet or the month after the holiday.
The price of pigs remains fairly high, fluctuating from VND52,000-60,000 per kg, as demand to export pigs to China has increased.
Pham Thanh Kien, director of the Department of Industry and Trade, said the city would not interfere in price policies but instead would allow normal supply and demand in the market to dictate prices.
Demand for pork in the city is about 10,000 pigs per day, and on the occasion of the Lunar New Year, it rises 1.5 times higher than normal.
Businesses of Viet Nam and Indonesia seek co-operation opportunities
Over 100 businesses from Viet Nam and Indonesia on Thursday met at a seminar in Jakarta, Indonesia to seek co-operation in the fields of trade, industry and investment.
The seminar was jointly organised by the Embassy of Viet Nam in Indonesia and the Vietnamese Ministry of Industry and Trade, and the Indonesian Food and Beverage Association (GAPMMI).
Ambassador to Indonesia Pham Vinh Quang underlined that Viet Nam and Indonesia have nurtured a long-standing relationship and reaped outstanding results in economic and trade co-operation in recent years.
“However, he pointed out that the results have yet to match potential of both sides,” Quang said.
The diplomat emphasised the role of the business communities of Viet Nam and Indonesia in lifting bilateral trade revenue to US$10 billion in 2020.
Ari Satria, director of the Export Product Development under Indonesia’s Directorate General of National Export Development, noted that firms should work to enhance trade and expand markets, thereby creating a solid foundation for the development of the countries’ business community and the Indonesia-Viet Nam economic and trade co-operation in general.
GAPMMI Chairman Adhi S. Lukman said the seminar offers a chance for businesses of Indonesia and Viet Nam to meet and discuss co-operation opportunities.
He voiced his hope that similar events will be arranged in a bid to facilitate firms to co-operate and expand markets.
Within the framework of the seminar, businesses were updated on demand and policies of the two countries. Vietnamese products were also introduced at the event to bolster exports to the Indonesian market.