According to him, Vietnamese retailers are vulnerable to integration because of their lack of business strategies and weak management. Some 90 percent of Vietnamese supermarket executives haven’t been trained in retail skills.

He called for government incentives in terms of finance, land and policy to help enhance domestic retail enterprises’ competitiveness.

Phu also said the production industry played a significant role in the development of the retail sector, adding that Vietnamese products would be no match for their foreign rivals with an inefficient, poor quality and slow production process.

Sharing Phu’s view on the need for Government assistance, Le Thi Thanh Tam, Deputy General Director of the Saigon Food Joint Stock Company, pointed to the fact that the majority of domestic retailers were small-and medium-sized enterprises, even super-small ones with weak financial capability and poor experience in production, marketing and distribution.

The government should provide more support for domestic enterprises to develop new products and invest more in product designs in order to compete with foreign enterprises, she said.

Meanwhile, Yukio Konishi, General Director of AEON Mall Vietnam, highlighted the potential of Vietnam’s restaurant and recreation market thanks to its young population.

He expressed his belief that his company could compete with other first-come foreign investors and domestic enterprises thanks to its rich experience, good management ability and high quality and reasonably priced products.

Vietnam and Japan will both join the Trans Pacific Partnership (TPP), which will present huge opportunities for the two nations to boost trade cooperation, Yukio Konishi said.

Now local and foreign customers can pay with their internationally-issued Visa prepaid, debit and credit cards at seven Capital branches, with eventual rollout to 93 Grab & Go convenience stores and four restaurants nationwide.

“We are always looking for ways to better serve our customers. Accepting card payment makes it more convenient for our customers and, at the same time, streamlines the checkout process, freeing up our staff members to serve other customers,” said Daw Thwe Thwe Moe, general manager, Capital Hypermart.

Part of the Capital Diamond Star Group, the first Capital Hypermart opened its door in 2008 at Thaketa Township in Yangon, which, along with Capital Hypermart in Nay Pyi Taw, is the first and largest hypermarket in the country.

Since entering Myanmar in 2012, Visa has tirelessly helped Myanmar financial institutions and merchants to grow their businesses. Currently, there are more than 2,300 point-of-sale (POS) acceptance points and 1,400 ATMs accepting Visa cards.

“We hope to continue this upward trajectory as we work with our partners, so electronic payments will be available for all people of Myanmar,” said Arturo Planell, Visa country manager, Myanmar.

According to the Industry Ministry’s director for the electronics and telematics industry, Zakiyudin, there is still high demand from Indonesian consumers for electronic products and the sector is likely to grow this year, with the consumer market still developing.

Japanese brands Toshiba and Panasonic have recently been in the spotlight amid labor union claims that they plan to lay off hundreds of employees working for plants that operate in Indonesia, but the Industry Ministry has dismissed the claims.

“Panasonic and Toshiba are not carrying out massive layoffs — they are restructuring,” the ministry’s director general for metal, machinery, transportation equipment and electronic industries, I Gusti Putu Suryawirawan, told reporters.

Putu said that while the country’s overall electronics industry growth was relatively stable, the industry was affected by the local currency exchange rate, as most its components were imported from overseas.

The head of the ministry’s research and development department, Haris Munandar, said his ministry had been developing an early warning system for industry development in light of an unusual surge in imports.

Indonesia’s electronics and telematics industry grew by 2.5 percent in the period between 2012 and 2015, with investment in the sector rising 25 percent during the same period, according to ministry data.

Total investment in the industry rose to US$6.6 billion last year from $5.9 billion in 2014, and the industry took on 499 new employees in 2015 as compared with 488 employees the previous year.

The Confederation of Indonesian Workers Unions (KSPI) previously announced that Panasonic had closed its two factories and laid off 1,600 workers, while Toshiba planned to lay off 900.

PT Panasonic Manufacturing Indonesia clarified the claims, with president director Ichiro Suganuma stating that his company had shut down its one lamp factory in Pasuruan and offered voluntary retirement programs to 425 workers.

The closure of Panasonic’s lamp plant was due to a significant drop in demand for compact fluorescent lamps; the company has now shifted focus to developing light-emitting diode (LED) lamps, for which there is growing demand.

“The important thing is that our commitment to the industry remains the same and our investment in LED technology development is still large,” Ichiro said.

Meanwhile, Toshiba has clarified that the actual figure was 360 workers laid off, lower than the labor union’s report.

According to Toshiba, the firm had to terminate the jobs of its permanent workers as the factory located in Cikarang produced well under its capacity last year because of a drastic drop in demand for televisions in the Middle East, a major export destination.

“The site only produced 30,000 TVs out of a capacity of 350,000,” said a Toshiba executive who refused to be named, adding that the company had also terminated 1,000 workers’ contracts last year following the drastic drop in production.

Toshiba Indonesia was recently acquired by Chinese television maker Skyworth Corp. in a ¥3 billion deal that will be fully materialized this year, with a possible change of brand in April. “We’ll keep producing Toshiba TVs, but we remain open to the possibility of producing other electronic devices and therefore may need more workers in the near future,” the source said.

Investment Coordinating Board (BKPM) head Franky Sibarani said that the board was currently seeking formal clarifications from both Panasonic and Toshiba on the matter.

“We can help them to improve competitiveness, including by issuing any necessary policies and coordinating with the relevant ministries,” Franky said recently.

This may explain why instead of choosing a glamorous project to round off his first six months in the hot seat at the SGX, he chose instead to host a dialogue session with the theme of how to navigate the path to future growth in the stock market.

This rather reflective approach is in stark contrast to that of his predecessor Magnus Bocker, whose first big move on taking up the post six years ago was to launch an ambitious S$250 million (US$177 million) plan to invest in what was then said to be the world’s fastest trading engine.

As Loh observes, the challenges that come with his job have arrived “fast and furious”, but while they are tough, he feels they are not insurmountable.

The measures that he unveiled at the dialogue reflected his philosophy – and were in response to feedback from the market.

Gone is the almost unrelenting pace of change which had riled brokers no end. Instead, Loh promises that the market will get a gap of at least six to 12 months between the introduction and implementation of major initiatives to allow time for adjustment.

Better still, the much-feared introduction of collateralised trading will be pushed back all the way to 2018. This will provide much-needed relief to remisiers – self-employed brokers – worried for their livelihood as their clients are used to getting three days’ credit on stock purchases.

Penny stocks have also been given a reprieve. The SGX just last week changed the methodology used to determine if a listed firm meets the criteria of having a minimum trading price of 20 cents. This is on top of extending the deadline to September from next month for them to comply with the rule.

No stone has been left unturned. Even the need for quarterly reporting and the quest for dual class shares are up for review. These initiatives will no doubt win kudos for the SGX from the investment community and smooth the ruffled feathers of remisiers who were so upset with Mr Bocker that some even started an online petition to have him removed.

But this may turn out to be the easiest part of the many tasks awaiting Loh.

Ahead lies the big challenge of how to put the buzz back into the stock market and arrest the decline in stock turnover which is causing despair among remisiers and investors.

Against this backdrop, he will also have to balance the interests of the many different market players with their varying and, at times, conflicting priorities, as he has observed.

So, it is just as well that the steady pair of hands Mr Loh brings to steering the good ship SGX will be put to good use navigating it through the turbulent times ahead – as exemplified by the recent wild swings in the benchmark Straits Times Index.

Not that he has to re-invent the wheel in order to draw retail investors back into the market. In recent years, a great many new CDP accounts have been opened – a big proportion of them by younger investors. (A Central Depository account is needed by someone who wants to invest in SGX-listed shares.)

This suggests it is not so much that investors have no interest in the local market, but rather that they are simply waiting for an opportunity to pounce on bargain purchases. Plummeting share prices in recent times have turned Singapore blue chips into attractive value plays, so investors may well be tempted to jump into the market.

Most people would readily deploy their hard-earned nest-egg to work harder to produce a better return – especially with the relative safety of investing in good-value blue chips.

As Loh embarks on what amounts to something of a repair job, certainly in terms of market perceptions, history may be on his side. Despite the challenges, the seeds of success are already embedded within the SGX.

Older readers will recall the uphill struggle faced by Loh’s predecessor once removed, Hsieh Fu Hua, in breathing life back into the market over a decade ago, after it had been hit by a series of financial calamities – the 1997-98 Asian financial crisis, followed by the bursting of the dotcom bubble in 2001 and the Sarscrisis of 2003.

A new vision emerged from the tough challenges as the SGX was forced to replace Malaysian-listed counters whose trading here was discontinued after Kuala Lumpur imposed capital controls in 1998 to combat the Asian financial crisis.

In response, the SGX turned itself into the Asian Gateway, attracting companies from far and wide – China, Indonesia, United States and even Israel – to list here.

A big market was set up in real estate investment trusts (Reits), whose mouth-watering yields make them a draw for yield-hungry investors, turning Singapore into Asia’s leading Reit centre.

Two other products which made their appearance around the same time – exchange traded funds (ETFs) and covered warrants – had also shown great promise, if not meeting with the same enthusiastic response from investors.

In the case of covered warrants, annual turnover had almost trebled from S$10.6 billion in 2005 to S$28.2 billion in 2007. But last year, total warrant turnover was languishing at just S$3.82 billion – as a combination of tighter regulations and the risk aversion after the global financial crisis dampened investors’ appetite for them.

Interest in ETFs has shown signs of revival, with turnover last year rising by 23.8 per cent to S$2.91 billion from 2014’s S$2.35 billion. But this is still a pale shadow of the frenzied activity in 2011 when turnover hit S$8.75 billion.

Considering that both of these products have won widespread appeal among investors elsewhere, it may come as a surprise that appetite for them has somewhat waned here.

Simply working on the right strategy to beef up interest in ETFs and covered warrants would be one sensible way to bring back the buzz to the stock market – and that is not to mention relooking other products such as extended settlement contracts, which may appeal to a younger generation of investors.

Geomancers have suggested that the Year of the Fire Monkey, which starts today, will be full of surprises. But the Chinese phrase for crisis “weiji” stresses that with danger comes opportunity to be grasped.

As the monkey is witty, nimble and flexible, it is also a good time to take stock and successfully surmount the challenges we face.

In this light, Loh’s emphasis on bringing a sharper focus to what the SGX is doing will stand him in good stead. We wish him and the market Gong Xi Fa Cai.

Samsung Electronics Vietnam

Samsung has so far invested US$14.8 billion in Vietnam, making it the largest foreign direct investor and employer. Besides, 30 per cent of Samsung Electronics Corporation’s workforce is in Vietnam.

Samsung was also the biggest contributor to Vietnam’s exports in 2015, accounting for 20.2 per cent with $32.7 billion. We will continue to bring “made-in-Vietnam” products of global quality to customers world-wide. We now have more than 110,000 employees in Vietnam.

The above numbers emphasise Vietnam’s importance to Samsung. We believe our partnership with Vietnam will continue to benefit each other in 2016.

In 2014 and 2015 Samsung co-operated with the Ministry of Planning and Investment and the Ministry of Industry and Trade to hold seminars on supporting industry development to find potential local suppliers. We also visited several Vietnamese vendors to check their capabilities, and invited about 20 Vietnamese suppliers to visit Samsung’s first and second suppliers. Samsung also brought three experts from Korea to help four Vietnamese suppliers enhance their capacity. This was a pilot project in 2015 and we expect to expand it in 2016.

Samsung is willing to collaborate with local suppliers and contribute to the development of Vietnam’s supporting industry. Samsung does not give any kind of favoured treatment to any particular companies. Any supplier that meets Samsung’s standards of quantity, quality, timely delivery has an equal chance to join our supply chain. It will benefit both Samsung and Vietnam if there are more parts suppliers near our factories in Bac Ninh and Thai Nguyen. Samsung will prioritise placing orders with local businesses if they are able to meet our standards.

One thing I can reveal is that Vietnam is the biggest production hub of Samsung Electronics, and we will continue to expand our business [here]. We are always trying to find business opportunities and devoting our human resources and technologies to contribute to a better future for Vietnam.

Viettel

Last year Viettel started operating in two new markets – as Halotel in Tanzania and Lumitel in Burundi. With these two new markets, our company has now invested in 10 foreign markets with a population of 270 million, three times bigger than Vi?t Nam.

We have broken even in six out of the 10 markets. This year we hope to start getting profits from the rest.

Last year revenues from foreign markets were worth nearly US$1.5 billion, a year-on-year increase of 25 per cent.

Investing abroad is one of Viettel’s three main strategies. That is why the company targets becoming one of the top 10 telecom companies in the world in terms of investing abroad by 2020. By then, we hope to be in 20-25 international markets with a population of 600-800 million.

On average, Viettel invests in two new markets a year. Turnover from foreign markets is apace with the company’s strategy. We plan to maintain growth of 15-20 per cent a year and break even in a new market in three to five years.

East Timor is a small market. It is difficult to set up infrastructure due to its mountainous terrain. However, it has brought us fruitful results. It was the first market where Viettel recouped its investment within six months.

To Vietnamese companies who want to invest abroad, I want to quote an African proverb that I think is completely correct: If you want to go fast, go alone; if you to go far, go together.

We have been a pioneer and we hope that other companies will go with Viettel like we did in the past. ‘Together for the Better.’

With determination, Viettel and other Vietnamese companies can be confident and compete in the global market.

HCM City Union of Business Associations

To discuss the economic prospects for 2016, we should first discuss about the economy in 2015.

Last year the economy grew significantly, especially in HCM City where local companies achieved a growth of 10 per cent. This was 1.5 times the average for the country.

The performance could be attributed to the support from the Government and the city. Many programmes to stimulate the market, improve human resources and offer credit at preferential interest rates were organised to help companies overcome difficulties and expand.

Many companies in HCM City have prepared well for 2016, a year of deep integration when the AseanEconomic Community will be in place and Vietnam becomes a member of many important free trade agreements.

The integration will bring more opportunities for companies, especially exporters. Moreover, there will be opportunities to expand business and co-operation in all sectors. Thanks to that, there will be a leap for the economy. And I expect companies in HCM City to continue to grow at more than 10 per cent.

The challenges, I think, will be mainly for small and medium-sized enterprises because they lack the capability to immediately transform and adapt to new regulations. However, these challenges and obstacles will soon be swept away. In my opinion, it will take them only two years to overcome difficulties.

Home Credit Vietnam

Based on the optimistic forecasts of economic institutions like IMF and World Bank, I believe Vietnam will achieve a high growth rate in 2016, as high as the 6.6 per cent targeted by the Government. Given the positive outlook for Vietnam’s economy, credit operations by financial institutions would also see strong growth, especially consumer finance.

Vietnam with its big population and a majority of that at working age offers much potential for consumer finance especially since just a small part of the population can now access financial services provided by banks. According to a study by the Strategy Institute of the State Bank of Vietnam in 2013, the consumer lending market grew by 20 per cent annually in 2009-12.

The consumer finance market will see severe competition in the near future as many banks plan to set up their own finance companies to focus on consumer lending. However, competition will bring benefit to customers in Vi?t Nam and the evidence is that consumer lending rates have been on a downward trend, even down to 0 per cent, which you could not have imagined just three years ago.

Joining international economic agreements will benefit Vietnam’s economy as goods will be diversified and have more competitive prices, prompting an increase in consumption. Vietnamese workers’ incomes will improve, increasing their purchasing power. In addition, when the economy is more open, more companies selling goods will enter Vietnam, and that will be a great opportunity for financial institutions to expand partnership networks to serve more customers.

Lazada Vietnam

E-commerce is seeing a positive trend, and we expect it to continue in 2016. We are in a positive spiral where customers and retailers are showing more and more interest in a shopping channel that has proven its value to customers over the last few months: price competitiveness, assortment breadth and convenience.

I think this is a great opportunity for the Vietnam e-commerce market to grow even faster. Joining AEC and TPP will cause Vietnam’s international trade to expand: consumers will have a larger, more diverse assortment of goods to choose from.

Of course, Lazada will investigate the new opportunities that TPP and AEC will offer, with respect to our ability to both sell and source abroad. However we are mainly interested in sourcing competitive products from abroad and offer them to Vietnamese consumers.

The project aims to promote exports by ensuring that Vietnamese products are directly sold into major distribution systems of countries in Europe, North America, Southeast Asia and Northeast Asia that signed free trade agreements with Viet Nam.

In a recent interview with the Viet Nam News Agency, Deputy Minister of Industry and Trade Ho Thi Kim Thoa said Viet Nam recently signed many free trade agreements, adding the integration process required enterprises to enhance their competitiveness.

Thoa said local businesses have made great efforts to expand their markets, adding that many Vietnamese products with high quality and reasonable prices were favoured by consumers.

“For example, Viet Nam is currently the world’s fourth-largest footwear producer. Vietnamese agricultural products and food also have a strong foothold in many foreign distribution systems,” she said.

According to the Phap Luat TPHCM (HCM City Law) newspaper, Vietnamese food and foodstuffs have been successful in penetrating some foreign markets via the export channels of the supermarket system, which has made remarkable efforts to take local goods to world markets.

Nguyen Thi Thuy, deputy general director of Sai Gon Co.op that owns the Co.opmart supermarket chain, said they exported more than 80 containers of food and foodstuffs to Singapore last year, such as dragon fruits, fresh coconuts, pangasius fillets and many other processed food products.

“In the future, Sai Gon Co.op will continue to support domestic enterprises to export more products to this market,” Thuy told Phap Luat TPHCM (HCM City Law) newspaper.

A representative from Lotte Mart Viet Nam said currently 24 Vietnamese enterprises exported their products to Korea via the distribution channels of the Lotte Mart supermarket chain, with more than 100 types of products.

Vietnamese products accounted for seven to 10 per cent of the products sold at the Lotte Mart supermarket chain in foreign countries, he said.

The most common products were dragon fruits, coconuts, durian and dried fish and squid as well as raw and processed coffee, he told Phap Luat TPHCM (HCM City Law) newspaper.

He said Vietnamese producers were increasingly manufacturing high-quality products with reasonable prices, but the consumption in South Korea remained relatively low.

Therefore, the company was trying to enhance customer awareness about Vietnamese goods and was focusing on advertising some key Vietnamese export products such as fruits, seafood, confectionery and snacks, besides tea, sauces, spices and handicraft products, he said.

Le Van Khoa, vice-chairman of the HCM City People’s Committee, told Phap Luat TPHCM (HCM City Law) newspaper that some large supermarkets in HCM City recently participated in trade promotion activities, especially trade fairs, in foreign markets such as Singapore, Korea and some European countries.

They held the fairs to connect enterprises with distribution channels and foreign partners, and to encourage customers to buy Vietnamese products, Khoa said.

Different taste

Ly Truong Chien, deputy head of consulting committee of the Viet Nam Marketing Association (VMA) and a member of the International Committee Management Consultant (ICMC), told Phap Luat TPHCM (HCM City Law) newspaper that in foreign markets, most of the Vietnamese products were mainly consumed by overseas Vietnamese.

However, overseas Vietnamese consuming these exported products was anyway a stepping stone for Vietnamese food manufacturers to gradually approach foreign customers, Chien said.

Explaining the low consumption of foreign buyers, Chien said Vietnamese food and foodstuff producers who exported their goods to foreign markets focused mainly on selling the goods favoured by the Vietnamese community.

They have not paid adequate attention to the tastes and preferences of the foreign customers, Chien said.

For example, Chien said, many mam tom (fermented shrimp paste) manufacturers and nuoc mam (fish sauce) suppliers were trying to enter foreign markets with increasingly exports. Many Vietnamese people enjoy these sauces, but their challenging taste and smell do not easily appeal to foreigners.

Okihiko Ishikawa, a Japanese businessman who has spent more than 10 years working in Viet Nam, said he could hardly get used to the unpleasant smell of mam tom, which he called a pungent sauce.

“I’m a durian-hater, too, as I cannot stand its smell, which is quite stinky and persistent. However, my wife is a huge fan of the fruit. I’m really annoyed when she stores durian in the fridge,” Ishikawa said.

But he said he enjoyed bun cha, a Vietnamese popular traditional dish made of grilled pork, rice noodles and a dipping fish sauce as well as other ingredients such as sugar, chilli, pepper and lime juice, besides garlic.

Ishikawa said he really enjoyed the savoury taste of the dipping sauce.

“Whenever I return to Japan, I often buy a lot of Vietnamese fruits such as limes, mangosteen and rambutan as gifts for my friends and relatives, and also other local specialties such as salted dry apricots and instant coffee,” he said.

Ishikawa said Vietnamese food and foodstuffs had their own attraction with special flavour, but local businesses needed to have a stronger branding strategy and research more about cultural preferences, hobbies and buying habits of each type of customer in different markets.

Deputy Minister Thoa told Viet Nam News Agency that in the context of the deeper integration, domestic businesses had to further improve their competitiveness, including enhancing the quality of manpower and management capacity and formulating brand-building strategies to conquer the regional and global markets, and fully meet the needs of consumers.

The government needed to further improve policy mechanisms consistent with international practices, creating a fair and competitive environment for businesses, Thoa said.

The city’s total retail sales and services are also projected to increase by 16-17 per cent, and export turnover is expected to climb 15-16 per cent.

To fulfill these objectives, the municipal Department of Industry and Trade will put forth projects, programmes, plans and tasks while implementing the city’s economic restructuring project, among others, according to Phan Van Kha, the department’s director.

At the same time, Da Nang will organise more conferences connecting local businesses and their partners nationwide on a larger scale.

The city will continue prioritising high-tech and support industries, especially major projects, the production of high-end consumer goods and products for export, and e-commerce.

It will also pour investment into building modern trade infrastructure and improving the competitive edge of local businesses.

Trade promotion activities will target markets with which Vietnam has signed free trade agreements and the Trans-Pacific Partnership (TPP) agreement.

Along with assisting local production and export businesses, Da Nang will increase inspections over the market and food hygiene.

Other tasks include ensuring electricity supplies across the city and promoting trade commitments Vietnam has signed.

Statistics released by the department showed that the central city’s industrial production value in 2015 is estimated at VND41.5 trillion (US$1.8 billion), up 11.3 per cent against the previous year.

Meanwhile, the locality’s industrial production index increased by about 12.6 per cent year-on-year. Export revenue stood at nearly $1.3 billion, up 15 per cent compared with 2014.

During the year, Da Nang attracted a total of 21 new industrial production projects worth $16.3 billion.

Ooredoo is to expand a nationwide “greenfield” mobile telecom network using advanced 3G technology, ADB said in a statement released today in Yangon.

“Myanmar has one of the lowest rates of telecom connectivity in Southeast Asia, with poor communities and women the least likely to have access to these increasingly vital services,” said Christopher Thieme, director of ADB’s Private Sector Operations Department. “This assistance, ADB’s largest private sector investment to date in Myanmar, will help the government meet its target of connecting over 90 per cent of the population, including millions of people for the first time.”

Myanmar’s mobile phone penetration rate was about 60 per cent in 2015. Research by Deloitte Southeast Asia showed that the penetration rate was below 4 per cent at the beginning of 2012. It increased to 7 per cent in 2013. Since its entrance into the market in 2014, Ooredoo Myanmar has reached millions of customers covering 80per cent of the population with its 3G network. Ooredoo is one of three mobile phone operators. The government, aiming to increase the penetration rate to 100 per cent by 2021, is in the process to extend a license to the fourth operator.

Ooredoo’s network rollout will be carried through to 2019. With the physical infrastructure, Ooredoo Myanmar plans to develop mobile applications for banking, agriculture, and maternal health, which will improve access to services particularly for low-income groups and women.

“This investment shows our continued support to help extend essential and affordable infrastructure services to Myanmar people,” said Vikram Kumar, IFC resident representative for Myanmar. “In addition to providing thousands of direct and indirect jobs to local workers, Ooredoo Myanmar’s nationwide telecom network will help connect people and ease economic activities by applying advanced telecommunication technologies.”

ADB will also carry out a technical assistance project – financed by an up to $1 million grant from the Canadian Climate Fund for the Private Sector in Asia – to examine the feasibility of using renewable energy to run telecom transmission towers. The project will trial the use of renewable energy at selected towers with the goal of deploying it across at least 1,500 rural sites, reducing around 10,000 tonnes of CO2 emissions every year.

Sheikh Saud Bin Nasser Al Thani, Ooredoo Group CEO, commented: “Over the last two years, Ooredoo has made significant progress on its strategy to provide the people of Myanmar with a world-class telecommunications network. Our investments in Myanmar continue to support the good revenue and customer growth trends we have recorded in the country. Our wide range of telecom services support the socio-economic development of the country through enhanced communication between businesses, organisations and individuals. We are proud that world renowned lenders like ADB and IFCparticipated in the funding deal with Ooredoo Myanmar to further expand our network and distribution in the country.”

February 4 is the date on which the agreement was officially signed.

Currently, the US and Japan are the two largest importers for Vietnam in term of shrimp and tuna, with a total value of nearly US$1 billion last year. It is predicted that export value to the two markets will reach 15 per cent in 2016.

Ngo Van Ich, president of the Vietnam Association of Seafood Exporters and Producers (VASEP) said that in 2015, the seafood exporters faced with many difficulties and challenges. Total exports reached only $6.7 billion, dropping nearly 15 per cent compared to 2014. This decline was a warning for the association to look back and work together to build a comprehensive strategy.

Ich added that this year, the free trade agreements with the European Union (EU) will officially take effect and the signing of the TPP agreement will facilitate Vietnam into boosting seafood exports to these markets.

Truong Dinh Hoe, VASEP general secretary, is optimistic that when Vietnam has not so far joined any the free trade agreements, seafood exporters have already met the rigorous standards of importers. For example, for shrimp exports to the US, exporters must follow Best Aquaculture Practices standards (BAP), Aquaculture Stewardship Council Standards (ASC) and the Marine Stewardship Council’s Chain of Custody (CoC) Standard.

Therefore, when TPP was officially signed, Vietnamese seafood exporters were ready to meet the standards set by importers. More so, when the export rate is slashed to 0 per cent, it will create incentives for seafood businesses to further invest in farming and processing, thus bringing them higher economic value.

According to Nguyen Phuoc Buu Huy, deputy general director of Cadovimex II Export Processing and Fisheries JSC, said his company had invested in an export and processing line equipped with BAP standards. His company also invited experts from the US Department of Agriculture (USDA), and the Food and Drug Administration (FDA) to evaluate ponds, breed, feed and processing plants. By doing so, Huy strongly believes that his company is ready to meet the strict requirements of clients from the US, Japan and other markets.

Duong Ngoc Minh, chairman of VASEP Freshwater Fish Committee and Le Van Quang, Chairman of VASEP Shrimp Committee said that the Ministry of Agriculture and Rural Development needed to closely improve development and the support policies to meet with requirements of the global market.

Accompany with businesses

Nguyen Phuoc Buu Huy said that exporters must find more markets instead of exporting their products to only one market to avoid risks in business such as technical barriers and strict hygiene regulations from importers. This solution will also help businesses become more flexible in processing and help farmers to consume their products.

Truong Dinh Hoe emphasised that once the TPP agreement comes into effect, Vietnamese exporters will strengthen their position on par with importers in the TPP block. As a result, they do not need to make concessions as before. In case of a dispute, Vietnamese exporters can also take advantage of the TPP agreement as it is now an official member. All members must comply with the rules under the agreement.

Duong Ngoc Minh, chairman of VASEP Freshwater Fish Committee, said that investment in export and processing technology to meet the local demand was one of the important parts of the TPP agreement. Once domestic products attain high quality, local consumers will choose their products and imported products from member countries will not find it easy to compete with local products on their home turf.

Minister of Agriculture and Rural Development Cao Duc Phat said that the ministry will continue to work closely with seafood exporters to handle difficulties and challenges facing them after joining the free trade and TPP agreements.

Vietnam produces 20 to 21 million tonnes of rice each year. Of this rice, 8 to 9 million tonnes are annually exported, based upon signed contracts. The remaining rice is purchased by domestic consumers, according to the Vietnam Food Association.

However, rice enterprises have not paid attention to domestic rice markets, where there is a high demand, choosing instead to focus on exports.

In 2008, two centres for distributing rice for local consumption were built in HCM City and Can Tho City to stabilise domestic rice prices. Also, several retail shops selling rice were opened for local consumers.

But these shops faced many difficulties in selling rice and even had losses, the association said, because enterprises trading rice on the domestic market must pay a 5 per cent value added tax (VAT), resulting in the prices for their rice being higher than rice sold by household businesses that do not pay VAT.

Therefore, to assure there being profits in selling rice on the local market, rice firms have had to sell high-grade rice at higher prices to those consumers with larger incomes.

In addition, firms must compete with household businesses in services involved in selling rice, the association said. The household businesses have had flexibility in distributing rice and provided a high level of services, even to rural and remote areas, while firms have distribution systems in both cities and towns.

Truong Thanh Phong, former chairman of the association, said the association has repeatedly proposed to the Government that they abolish the VAT paid by rice firms. But the Ministry of Finance has objected, causing rice firms to ignore local rice markets.

Meanwhile, in rural areas, people continue to hold back rice for their own consumption after harvesting, while selling the remaining rice to enterprises, he said.

He hopes that in the coming 5 to 10 years, living standards in rural areas will have improved and small rice mills will be closed. The people in rural areas might then sell all their rice after harvesting, and then purchase rice for daily use. If this occurs, local rice markets will have more opportunities to further develop, he said.

For the development of local rice markets, the VAT must be abolished and convenient and flexible distribution systems from rice enterprises must be put in place, he said. –