Vietnamese companies are struggling to sell their products to ASEAN member countries despite the abolition of tariffs within the bloc.
Analysts blame this on their lack of market information and poor understanding of consumer needs among other factors.
With the formation of the ASEAN Economic Community (AEC) three years ago, members had to reduce over 90 percent of their tariff lines to zero percent, though Vietnam, Laos, Cambodia, and Myanmar were allowed until 2018 to do so.
Yet Vietnam’s intra-ASEAN exports accounted for only 11 percent last year while this number for other members averaged 24 percent even in 2016, Nguyen Thi Tue Anh, deputy head of the Central Institute of Economic Management (CIEM), said at a recent conference.
Anh said besides Vietnamese enterprises’ lack of market information, they have also failed to adequately differentiate their products from those of competitors within the bloc.
A spokesperson for a business based in southern Soc Trang Province said his company, which produces dried fish and other fisheries products, wants to take its products to the ASEAN market but does not know how.
Saigon Times newspaper quoted him as saying that there are many factors such as package design, marketing and market research, and it does not know where to begin since all are equally important.
Ha Xuan Anh, chairman of HCMC-based textile maker Son Viet, said his company’s products – undergarments - are sold at many modern retail outlets. But for the last 10 years it has sought to sell to Singapore, Thailand and Malaysia, and has been unable to do so.
He explained that though the quality of his company’s products is competitive, Vietnamese brands remain unknown in these markets.
It only sells in markets with less competitive products such as Laos, Cambodia and Myanmar.
Pham Thiet Hoa, director of the HCMC Investment and Trade Promotion Centre (ITPC), also blamed the weaknesses of Vietnamese enterprises for their inability to export, listing lack of product diversification, failure to closely liaise with authorities responsible for foreign affairs, and poor marketing.
ITPC said small companies entering a new market alone would find it very difficult to identify foreign business partners and distribution chains.
Hoa said it is therefore necessary for trade envoys to work with their counterparts in foreign markets to bridge this gap.
Participating in fairs, exhibitions and trade promotion programmes in target markets enables companies to assess the competitiveness of local rivals, he said.
Despite the free trade environment, each country in the bloc has differences in culture, religion and consumer preferences, and businesses need to understand them before venturing into those countries, he said. "Enterprises should also carefully study the technical barriers and legal regulations to avoid losses.”
Low-tech, polluting FDI firms will try to set up shop in Vietnam as the U.S.-China trade war escalates, experts have warned.
Nguyen Bich Lam, head of the General Statistics Office, said that small-scale Chinese firms are likely to eye a shift to Vietnam to avoid high tariffs imposed by the U.S.
Such firms typically use pollution causing technology, he said, adding that there have been previous warnings about such FDI projects.
The latest escalation of the U.S.-China trade war only heightens this possibility, he noted.
Vietnam needs to carefully inspect projects which were registered in the last nine months with capital lower than $1 million to prevent those with outdate technologies from harming Vietnam’s natural environment, Lam added.
Echoing Lam, Le Dang Doanh, former director of the Central Institute for Economic Management under the Ministry of Planning and Investment, said that a number of these companies have already entered Vietnam in recent years.
It is the responsibility of the ministry to say no to FDI projects that can harm the environment, he told VnExpress International.
Lam emphasized: “At this time, Vietnam needs to filter out FDI projects, not accepting them at any cost as it did 30 years ago.”
Other experts expressed concerns that Vietnam could end up becoming a dumping ground for Chinese goods.
Economist Nguyen Tri Hieu said that China might seek to dump its goods on Vietnam to avoid Donald Trump’s tariffs.
Cheaper Chinese goods competing with Vietnamese goods will not benefit Vietnam’s economy, he told VnExpress International.
Meanwhile, industry insiders have expressed fears that China might borrow the “made in Vietnam” label to dodge U.S. tariffs.
Diep Thanh Kiet, vice chairman of the Vietnam Leather, Footwear and Handbag Association (LEFASO), said there was a “very high” possibility that Chinese bags would be exported to the U.S. through Vietnam.
Chinese businesses can do this by easily setting up a factory in Vietnam with a budget of only $200,000 to manufacture products with materials imported from China, he told local media.
If this cannot be controlled, there could be grave consequences for Vietnamese textile firms since “the U.S. might apply the same tariffs as they have done on China,” Kiet said.
The U.S. slapped tariffs of 10 percent on $200 billion worth of Chinese goods on September 24, and Beijing immediately retaliated with tariffs at 5 and 10 percent on $60 billion worth of U.S. products.
The two countries have already slapped tariffs on $50 billion worth of each other’s goods earlier this year.
Brand Finance, the world’s leading independent branded business valuation and strategy consultancy, has valued Vietnam’s national brand at 235 billion USD, a year-on-year increase of 16 percent.
This makes the country among the top 50 most valuable national brands in the world.
The Vietnam national brand value has moved up two places from the 2017 ranking, to rank 43rd this year.
In Southeast Asia, Vietnam’s brand value ranked sixth and 613 billion USD lower than the leading country in the region Indonesia.
Brand Finance gave the A rating to Vietnam’s national brand, which meant “strong”. Singapore and Switzerland maintained their positions as the strongest national brands with rating AAA .
According to London-based Brand Finance, due to the efforts of a national mark programme called “Vietnam Value”, Vietnam’s processed food industry now contributes upwards of 17 billion USD of the country’s exports. The apparel industry makes up over 22 billion USD of exports.
“These economic contributions are absolutely crucial for Vietnam’s overall growth and would not have been entirely possible without the concentrated efforts by Vietnam’s Government,” the report said.
Vietnam has implemented the national programme “Vietnam Value” since 2003.
Topping the world’s most valuable national brands of Brand Finance this year was the United States (US) with a value of 25.899 trillion USD, followed by China (12.779 trillion USD), Germany (5.147 trillion USD), the United Kingdom (3.750 trillion USD) and Japan (3.598 trillion USD).
The report also mentions factors that have positive impacts on the US national brand value include falling tax rates, a business-friendly environment and the perception that Donald Trump’s presidency is helping corporations.
Brand Finance measures the strength and value of the national brands of 100 leading countries.
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10 BOOKS LOGISTICS AND SUPPLY CHAIN EXPERTS NEED TO READ
There are tens of thousands of books about logistics and supply chains. Literally.
Amazon has 31,817 books about supply chain and 24,934 about logistics.
That’s 56,751 supply chain and logistics books.
All those books would weigh 49,000 kilograms – half the cargo mass of a Boeing 747-200F.
Stacked, those books would be as tall as 10.7 Empire State Buildings.
But we got it down to ten logistics and supply chain books you’ll actually want to read. Keep reading to see them.
Why this Supply Chain & Logistics Book List Rocks
There are hundreds of lists online that claim to be able to tell you what the best logistics and supply chain books are. What makes this different?
I actually used this list. When I started in logistics, I realized that I knew nothing. So I made a list of logistics books that seemed like they could educate without putting me to sleep.
I think you’ll like the list too. I threw in a healthy dose of interesting (globalization, shipping trends and the business of logistics), a dash of history (the evolution of longitude), a sprinkle of next generation manufacturing (lean manufacturing) and some great company success stories (FedEx, Walmart.
The Vietnamese Government and the European Commission (EC) have pledged to carry out the Europe-Vietnam Free Trade Agreement (EVFTA) and the Investment Protection Agreement (IPA) in a timely and effective manner.
The Vietnamese Government and the European Commission (EC) have pledged to carry out the EVFTA and the IPA in a timely and effective manner (Source: VNA)
The commitment is expressed in a joint statement issued by Vietnam’s Minister of Industry and Trade Tran Tuan Anh and European Commissioner for Trade Cecilia Cecilia Malmström following their meeting on October 19 in Brussels on the sidelines of the 12th Asia-Europe Meeting Summit (ASEM 12).
The statement said the Vietnamese Government is preparing plans to fulfill obligations under the free trade agreements while the EC stands ready to support the necessary reforms and adjustments through technical assistance.
Both sides acknowledged the relevance of the trade and sustainable development chapter of the FTA and agreed to jointly promote initiatives in this field, including the ratification of the outstanding fundamental ILO conventions.
At their meeting, both sides spoke highly of the efforts and advancement made after completing the legal review process for the two free trade pacts last summer. The Vietnamese minister lauded the European Commission for its approval and submission of the deals to the European Council for approval on October 17.
The weakness of Vietnamese logistics firms is high and uncompetitive costs, some services’ quality is not high while there is a severe competitiveness in the logistics market, according to Vietnam Logistics Association (VLA).
Another important reason for the slow development of Vietnamese logistics firms is that most of goods have been exported under FOB (free on board) term and imported under CIF (Cost, Insurance and Freight) term.
Logistics field posts the growth rate of 15-16 percent a year. The revenue of 100 leading logistics firms in Vietnam reaches US$8.74 billion with the growth rate of 15.6 percent a year.
At present, the country has 3,000 logistics firms operating in fields such as road transport, railway, seaway, inland waterway, goods verification and cargo loading and unloading.
They undertake part of international logistics service by acting as agencies for foreign firms who are cargo or vessel owners and international logistics providers.
By GIA BAO – Translated by Hai Mien
Việt Nam’s manufacturing output increased at a substantial pace in June. - Photo vov.vn
Viet Nam News
HÀ NỘI – The manufacturing sector in Việt Nam continued to expand in June, and at an accelerated rate, the latest survey from Nikkei revealed on Monday, with a manufacturing PMI score of 55.7 from 53.9 in May.
According to the survey, the reading signalled a marked monthly improvement in the health of the sector, and one that was second only to the series record seen in March 2011. Business conditions have now strengthened in each of the past 31 months while manufacturing output increased at a substantial pace as the rate of growth accelerated for the third month running.
“The Vietnamese manufacturing sector appears to be motoring midway through 2018, with growth of output and new orders among the fastest seen since the survey began in 2011,” Andrew Harker, Associate Director at IHS Markit, which compiles the survey, said.
Panellists reported that higher new orders and stronger client demand had been behind the rise in output. In line with the picture for production, the rate of growth in new orders was among the steepest seen across the survey’s history so far. New orders have risen continuously since December 2015.
The rate of expansion in total new business outpaced that of new export orders in June, with new business from abroad increasing at a slower pace than in May. That said, the rate of growth remained high.
According to the survey, higher workloads led firms in Việt Nam to take on extra staff in June. Moreover, the rate of job creation quickened to a new survey record. Record hiring helped firms reduce their backlogs of work fractionally, despite strong new order growth.
“The current growth phase has been extremely positive for Vietnamese workers, with firms taking on extra staff at a record pace during June,” Harker said.
Manufacturers also upped their purchasing of inputs sharply in June, with the rate of expansion the third-fastest in the series so far. This helped firms increase their stocks of purchases. On the other hand, stocks of finished goods decreased as inventories were used to satisfy new orders.
Input costs rose sharply, with the rate of inflation quickening for the third month running to the steepest since February. Higher oil prices and shortages of raw materials contributed to increased cost burdens. Supply shortages were also mentioned by those firms that saw delivery times lengthen. Lead times increased for the seventeenth successive month.
Manufacturers responded to higher input costs by raising their output prices, extending the current sequence of inflation to ten months. Selling prices also increased at the fastest pace since February.
Although easing to a four-month low in June, confidence among manufacturers remained strong. According to respondents, new order growth is set to support increases in output over the coming year. - VNS
Prime Minister Nguyễn Xuân Phúc (centre), Cambodian Prime Minister Samdech Hun Sen (left) and Lao Prime Minister Thongloun Sisoulith at the press conference following the 10th Cambodia-Laos-Việt Nam Development Triangle Summit in Hà Nội, on Saturday. - VNA/VNS Photo
Viet Nam News
HÀ NỘI — Leaders of Việt Nam, Laos and Cambodia on Saturday signed a joint declaration at the 10th Development Triangle Area Summit, committing to fully expand co-operation nationally rather than just in border provinces.
The three countries agreed to extend “step by step” the co-operation which would no longer be restricted to the 13 border areas of the triangle, Prime Minister Nguyễn Xuân Phúc told a press conference in Hà Nội following the summit.
For the purpose, the leaders approved the Master Plan on Cambodia-Laos-Việt Nam Economic Connectivity, which outlined the directions for infrastructure, institutional and economic co-operation and people-to-people exchanges.
“We will improve the institutional and legal connectivity for the sake of people and enterprises, the infrastructure connectivity to facilitate transport, energy, trade and tourism, together with the social infrastructure most favourable for development,” Phúc said.
Phúc and his Cambodian and Lao counterparts, Samdech Hun Sen and Thongloun Sisoulith, also agreed to further co-operate on security issues, including timber smuggling, human and drugs trafficking, transnational crime, and the removal of post-war unexploded ordnance.
The countries will start developing a triangle tourism plan, which is expected to cause a spurt in the tourism growth of the three countries.
“There is a Vietnamese proverb that we brothers heartily endorse: it takes not one but three trees to make a high mountain. I truly believe that with such comprehensive connectivity, the three countries will turn a new page in development in the coming time,” Phúc said. — VNS