Ba Ria-Vung Tau raises the maritime bar

Ba Ria-Vung Tau is muscling up investment into supporting industries, seaports and logistics development.

 

Promoting investment has benefitted the province’s international economic integration and attracted foreign direct investment, with support from provincial management and businesses setting up shop in the province.

The local investment climate, through infrastructure and human resources development, has been fine-tuned with specialised industrial parks (IPs) reserved for perse industries like supporting and seaport logistics.

“Ba Ria-Vung Tau will lay out the red carpet to welcome investors doing business in the province, striving to set up an increasingly open, dynamic and highly competitive investment climate to facilitate investors, from there materialising provincial development targets,” said provincial people’s committee chairman Tran Minh Sanh.

Ba Ria-Vung Tau is in a dynamic economic development area with over 14 IPs catering to shipbuilding, oil and gas, mechanical manufacturing, electronics and chemical industries and seaport services. However, these sectors’ associated supporting industries remain underdeveloped with most parts imported.

In this context, developing supporting industries centres in the province is proven a step in the right direction to prop the development of major industries, particularly of mechanical manufacturing.

Three priority provincial areas reserved for developing supporting industries are Phu My III, B1-Tien Hung and B1-Dai Duong IPs. Besides, Ba Ria-Vung Tau is in the process of building a specific IP on mechanical manufacturing positioned in Phu My III IP for Japanese small- and medium-sized enterprises.

Hard on the heels of some Japanese local government visits to the province, perse business group from many Japanese locations have arrived to source investment opportunities.

Significantly, the Japan International Cooperation Agency (JICA) has come to the province to survey the possibility of building a specific supporting industries cluster catered to Japanese firms and delivered positive appraisals about the province’s geographical location as well as its active preparations in terms of infrastructure.

Aware of investor needs, the province has ramped up training to catch up with businesses’ needs for quality manpower parallel to building perse transport infrastructure as well as public works. Besides, infrastructure investors at the provincial IPs are making huge efforts to make their IPs a top choice for investors.

As an ideal opportunity to make the provinces image popular to businesses and investor communities, Vietnam’s international seaport festival, the first of its kind in Vietnam, is slated to take place in Vung Tau city in November, 2012.

Through its perse activities, the festival will present policies, and mechanisms as well as Vietnam’s seaport and ocean tourism potential, foster trade and investment promotion and provide a platform for investors at home and abroad to source cooperative opportunities for Vietnam’s marine economic development.

In the meantime, the event will be where visitors find the world’s latest technologies in seaport development with associated products and services and provide excellent opportunities for marketing in logistics, marine, import-export and modernisation of customs procedures up to international standards.

The venue will also pave the way for exchange of experiences in port management, increasing connectivity between shipping firms and logistics suppliers, and provide inputs to compiling Vietnam seaport and seaport urban centre development strategies.

This first-ever festival is expected to spur marine sector and seaport development of the country and of Ba Ria-Vung Tau, striving to turn the location into a modern seaport centre as seen in the developed world.

Socially, the seaport festival will help better people’s awareness inform the international community about Vietnam’s sovereignty over certain areas of sea and islands, and manifest the leading role of Vietnam’s marine economy in this new development era, contributing to strengthening national development, defense and security.

To this end, this first international seaport festival is helping to materialise Vietnam’s marine economic development strategy targets, turning Vietnam into ‘a port venue for peace and development’.

Source VIR

East-West Economic Corridor hits roadblocks

Red tape and inconsistent trade and immigration policies are hindering the development of the East-West Economic Corridor, a 1,450km highway linking 19 provinces in Viet Nam, Laos, Thailand and Myanmar, says the former director of the Institute of World Economics and Politics, Luu Ngoc Trinh.

The central city of Da Nang was strategically located as the corridor’s gateway to the East Sea shipping, Trinh said, but the city had yet to fully exploit its advantages. Last year, for instance, the combined import and export value of the city to the other three countries along the corridor was US$50 million, or only about half-a-per-cent of the national trade value.

Trinh blamed the modest value on cumbersome administrative procedures that have scared off investors, constrained the flow of goods and passengers, and increased time and costs for businesses.

Procedures for immigration and import-export activities along the corridor were also inconsistent, he said. At the border gate between Thailand and Laos, he noted, drivers were required to report information in six categories to pass through the border gate, but at the border between Viet Nam and Laos, 46 categories of information were required.

Marine shipping costs were also inflated. Freight for a 20-feet container on the 1,000-nautical-mile voyage from Bangkok to Hong Kong was $200 while the same container departing from Da Nang to Hong Kong, a trip of just 511 nautical miles, carried freight charges of $350. Such high charges have left Viet Nam’s logistics services less competitive.

Since June 2009, pursuant to an agreement of the four countries, righthand-drive vehicles have been authorised to operate on the entire length of the corridor, yet Viet Nam continues to block vehicles with steering wheels on the right to enter from Laos or Thailand.

To avoid cumbersome procedures to apply to use righthand-drive trucks, many Vietnamese exporters have opted to tranship at the border with Laos, a measure that drives up costs.

Trinh said that countries along the corridor needed to boost co-operation to develop consistent policies, including custom clearance procedures and toll collections.

Policies should be made simple, consistent, quick, convenient and effective, said the former head of the domestic market department of the Ministry of Industry and Trade, Hoang Tho Xuan.

Co-operation should also be increased among border police, customs officials, and healthcare and quarantine officials to help facilitate the flow of goods and passengers along the entire corridor, Xuan added. A detailed development plan for seaports and the airport in Da Nang was also needed to help the logistics industry to develop in the city, he said.

Source DA NANG — VNS

Costly logistics act as drag on Vietnam exports

Exports remain a key factor in Vietnam’s economic growth, but high logistics costs mean they are unable to achieve their full potential.

Economists and other experts, speaking at a conference on policies for economic growth, said the country’s export achievements would be even greater if it tackles issues like corruption, low value-addition, and, most importantly, the high logistics costs.

Pham Minh Duc of the World Bank said the country saw strong exports in the last two decades, with average annual growth topping 17 percent, but exports are “reaching their limit.”

Companies have to pay very high rates for logistics compared to global rates, he said.

Exports last year topped US$114.6 billion

News website Saigon Times quoted Paul Vallely, another World Bank official, as saying logistics costs account for a quarter of Vietnam’s gross domestic products compared to 19 percent in China and 8-9 percent in Japan.

Deepak Mishra, the bank’s lead economist in Vietnam, blamed the weak performance by state-owned companies on the high cost of logistics.

Do Xuan Quang, chairman of the Vietnam Logistics Association, was critical of the country’s infrastructure, saying many ports are not well-placed in terms of access to industrial zones and warehouses.

Trailing behind

Last year the bank ranked Vietnam 53rd out of 155 countries in terms of logistics performance, trailing behind almost all of its neighbors.

The country has been “nearly left behind” in terms of logistics services, Duc said.

To put things in perspective, in Vietnam it usually takes firms 21-22 days to complete customs procedures, four times the time it takes in Singapore.

So firms are convinced that they should pay “unofficial fees” to customs to speed up the process, the bank said.

But it said that the country achieved “a strong trade performance in a difficult external environment,” with exports rising 34 percent in 2011, 18 percent in 2012, and nearly 20 percent in the first quarter this year.

But it has been less successful in diversifying its export basket and moving up the global supply chain, it added.

The bank suggested that the country should establish a national committee for trade facilitation to enhance its competitiveness.

According to the logistics association, the country has around 1,000 logistics companies. While domestic firms make up 80 percent of this they account for only 20 percent of the market share.

Source Thanh Nien

Japan explores investment in southern province

A business delegation from Japan’s Kobe city has explored investment opportunities in southern Ba Ria-Vung Tau province in seaport development, logistics and supporting industry.

During the delegation’s working session with the provincial authorities on March 18, Vice Chairman of the provincial People’s Committee Ho Van Nien informed the delegates of Ba Ria-Vung Tau’s potential and strengths in tourism, fishing, and the oil and gas industry.

The province is focusing on developing its port industry, logistics and supporting industry over the next 30-50 years, he said, adding that it is completing a one-door policy, teaching Japanese to workers and building infrastructure to meet Japanese investors’ requirements.

Ba Ria-Vung Tau has so far cooperated with Japan’s Kawasaki province in building the Kawasaki industrial zone, Nien noted.

The Japanese delegates showed their keen interest in infrastructure and human resources in Tan Thanh and Chau Duc districts that are calling for Japan’s investment.

Following a fact-finding tour to Cai Mep-Thi Vai sea port on the same day, they said they hoped to have more specific information to facilitate their investment in the province.

Source: VNA

Vietnam’s logistics industry finds potential growth opportunities

Rising export turnover in recent years and the trade surplus achieved last year shows that there is potential opportunity for the growth of the logistics industry, experts have said.

Deputy Minister of Industry and Trade Tran Tuan Anh told participants at Vietnam Logistics Forum 2013 in HCM City on November 15 that last year the country’s import-export value was 228 billion USD, up 12.4 percent over 2011.

Of the amount, exports exceeded $114 billion, outpassing imports 750 million USD.

“This year exports are expected to rise 14.3 percent to 141 billion USD and imports 15.6 percent to 131.4 billion USD, and the strong trade activity development has highlighted the important role of logistics,” said the deputy minister.

Vietnam has entered eight bilateral and multilateral economic agreements while another six are under negotiations, and these agreements aim at free trade, thus providing opportunity for the industry.

According to Dr Bui Thien Thu, deputy head of the Vietnam Maritime Administration, Vietnam ‘s logistics businesses have managed to provide insurance and transport services to 18 percent of the country’s total imports and exports.

Currently, up to 90 percent of Vietnam ‘s imports and exports are delivered by sea and the growth rate of container shipments was 17 percent a year between 2001 and 2010.

By 2015 Vietnam ‘s seaport throughput is expected to reach 400 million tonnes, 680 million tonnes by 2020, and more than 1.1 billion tonnes in 2030.

Logistics costs remain high, weakening the competitiveness of service users, said experts at the forum organised by the Thoi Bao Kinh Te Vietnam (Vietnam Economic Times).

Deputy Minister Tran Tuan Anh said logistics costs in Vietnam represent 25 percent of the country’s GDP, while the rate is 11-13 percent in developed countries and 15-20 percent in other developing countries.

“Reducing the costs will surely help our economy improve its competitiveness in an integrated environment where competition has become fierce,” he said.

On the issue, he said factors including infrastructure, legal framework and services providers, should be considered.

“We have spent a large amount from the State budget and ODA sources on infrastructure development to facilitate goods transportation and logistics service development. Our seaport systems have been built at a large scale and with modern handling equipment,” he said.

“However a problem remains: the poor connection with goods areas, which needs improvement,” he said.

He also wants logistics related regulations to be updated to match current realities.

Meanwhile, domestic service providers have a lack of skills, networks and capital to invest in advanced technology.

Do Xuan Quang, chairman of the Vietnam Logistics Association, suggested that logistics companies should have a deep understanding of trade like payment and insurance regulations as well as tariff incentives from Free Trade Agreements to support importers and exporters.

“On their part, importers and exporters should know about freight forwarding, transportation and other logistic services as well as trade agreements that Vietnam has concluded so they and logistics companies will be able to support each other, and thus improve their competitiveness,” said Quang.

He further proposed the establishment of a State management organisation and a national logistics committee to guide the operations of logistics firms, both local as well as foreign.

The organisation would be expected to act as a bridge between businesses and the State in mapping out strategies, policies and action programmes for the growth of the logistics industry.

This in turn would help the country’s trade and production development, he said.

Source VNA

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