TRÀ VINH – The Cửu Long (Mekong) Delta province of Trà Vinh has earmarked VNĐ150 – 200 billion (US$6.6 – 8.7 million) for research into and adoption of processing technologies, especially for its key agricultural products, in 2021 – 25.
It will focus on creating hybrid plant and animal strains that can adapt to climate change, expanding production models that use high technology, bio-technology and organic methods to improve yield and quality, according to Lê Thành Ôi, director of the province Department of Science and Technology.
The research and use of technology would be linked with guaranteed sales of produce, he said.
The department has implemented three projects that used modern agricultural technologies in the first five months of the year.
They include growing a high-yield peanut variety on sand dunes in Trà Cú, Cầu Ngang and Duyên Hải districts, producing bio-products EMTV1 and EMTV2 and using them for breeding shrimp in Duyên Hải District and Duyên Hải Town, and growing honeydew melon in polyhouses equipped with drip irrigation system in Châu Thành District.
It has also worked with localities like Cầu Ngang District and Trà Vinh City for intercropping grapefruit and guava using efficient irrigation systems and growing clean watermelon in Cầu Ngang District and a fresh eating grape variety in combination with offering tourism services on a pilot basis in Trà Vinh City.
It also plans a project to compare the efficiency of models to grow honeydew melon on the ground and on substrates in polyhouses.
Phạm Minh Truyền, director of the Department of Agriculture and Rural Development, said the province has more than 17,000ha of hi-tech farming areas, including 10,400ha of aquaculture and 7,000ha of rice, vegetables and fruits.
In hi-tech cultivation, farmers use advanced technologies such as automatic irrigation, nano fertilisers, net houses, hydroponic methods, net houses, tissue culture, and good agricultural practices (GAP) standards.
In aquaculture, farmers use modern facilities for breeding shrimp under intensive and super intensive farming models.
Truyền said the province planned to use 1,500ha of unproductive rice fields and 500ha of sugarcane fields to grow high-value crops or perennial trees or rotate between rice and aquatic species on the same fields this year.
In the first five months of the year more than 1,200ha of rice fields and more than 125ha of sugarcane farms have been converted, with farmers growing vegetables, coconut and fruits and breeding aquatic species.
Sugarcane farmers have struggled in recent years because of low prices, and the province encourages them to switch to other crops.
Trà Vinh is one of the delta’s coastal provinces and has been severely affected by saltwater intrusion in the dry season.
So local authorities have dissuaded farmers from growing rice in coastal areas and those without irrigation, and encouraged them to switch to other crops.
Farmers who grow vegetables, corn and watermelon have earned an average of VNĐ80 – 90 million ($3,500 – 3,900) per hectare per crop this year, according to the province Plant Protection and Cultivation Sub-department.
It has instructed farmers to adopt GAP standards to increase the competitiveness of their produce and incomes. – VNS
At FPT Digital Retail Joint Stock Company’s annual general meeting recently, shareholders gave the green light for plans to diversify from core businesses and enter some new product categories.
This is not the first time the company is eyeing new products.
In the first quarter of this year the company reported sales of VND4.67 trillion(over US$203 million), a year-on-year increase of 14 per cent.
An FPT spokesperson told Dau Tu Chung Khoan newspaper that the company’s two retail chains, FPTShop and F-Studio by FPT, which sell digital products such as mobile phones, tablets and laptops, were still the main revenue spinners but non-core businesses also brought significant revenues.
The Long Chau Pharmacy Store chain for instance is expected to report sales of VND582 billion (over $25.3 million) in the period, up 144 per cent. Its consolidated profit before tax was up 265 per cent to VND39 billion ($1.7 million).
Last December MobiFone and FPT Retail signed a deal to sell co-branded sim cards at FPT Shop nationwide. Customers who buy MobiFone-FPT Shop sims get special deals when shopping at FPT Shop.
The positive results from such non-core businesses have encouraged FPT Retail to consider entering more new product categories.
In April FPT Shop began selling Xiaomi’s IoT household appliances, and, together with Garmin, opened the first Garmin Brand Store in Ha Noi, the first in Viet Nam.
With the new product categories lending a hand, FRT expects to generate sales of VND 6.4 trillion ($713 million) in 2021 and pre-tax profits of VND120 billion representing year-on-year increases of 12 per cent and 320 per cent.
Similarly, non-core products have also made an important contribution to electronics retail giant Mobile World Joint Stock Company (MWG)’s turnover.
In the first three months of this year its consolidated net revenues were VND30.83 trillion, up 5 per cent from the same period last year, and after-tax profit was VND1.34 trillion, up 18 per cent.
But interestingly its food and grocery chain, Bachhoaxanh, was a leading contributor, with 19.3 per cent of MWG’s revenues after registering 32 per cent growth. Its core business, the Thegioididong chain, accounted for only 26.8 per cent of revenues after they fell by 1 per cent.
Bachhoaxanh’s gross profit margin in March stood at 25 per cent, and it is expected to go up thanks to adding several new food products and fast moving consumer goods to its line-up.
A company spokesperson said the effort was always to diversify the mobile phones and electrical and electronic devices sold to give customers more options. But the company would also focus on further developing the new product and fast moving consumer goods categories to tap a promising market of $60 billion, much higher than the phone and electronic devices market which is only worth $10 billion.
DigiWord Corporation (DGW) recently floated plans for entering the medical and cosmetics retail market at its AGM. A company executive, Lu Tran Anh Dung, admitted to Investment and Securities magazine however that DGW only wanted its shareholders to apply their minds to the proposal at this time so that it could move rapidly if any opportunities come in future.
DGW also expected to enter other new product categories in the coming years, he said.
It already had a strategic partnership with Nestle to sell the latter’s nutrition products through its distribution channels. This fetched DGW revenues of VND81 billion in the first quarter of this year, a year-on-year increase of 29 per cent.
DGW also owns a 21.86 per cent stake in pawn chain operator Vietmoney.
Analysts said technology retailers had managed to sustain growth though the market had gradually become saturated because they had shown the flexibility to enter other businesses.
Raw material prices rise across the board, hit bottom lines
Since May 2020, when they bottomed out, the prices of PVC resins have been increasing relentlessly due to a supply shortage and rising logistics costs.
According to Viet Dragon Securities Joint Stock Company, they topped their historic high of $1,216 per tonne reached in February 2018 to reach $1,400 in March this year.
The prices of petrochemical products including PVC resins have increased by 26 per cent this year, while oil prices are up 19 per cent.
Market observers attributed the drastic price hikes to a global supply disruption caused by the pandemic and power shortages in the US that caused refineries to stop production.
A spokesperson for Binh Minh Plastics Joint Stock Company (BMP) said the sharp rise in the prices of PVC resins had badly hit the company’s profits.
So, though the company hiked the prices of its plastic products twice by a total of around 14 per cent since February this year, its gross profit margin decreased to 17.9 per cent in the first quarter compared to 24.1 per cent a year earlier, the lowest rate since 2006.
A similar situation also plagues businesses in other sectors.
Seafood company Vinh Hoan Joint Stock Company saw its profit margin decline within a year from 14.4 per cent to 7.5 per cent.
For Minh Phu Seafood Joint Stock Company, it went down from 3.6 per cent to 0.8 per cent and for Sao Ta Food Joint Stock Company, from 6.4 per cent to 3 per cent.
The Dry Cell & Storage Battery Joint Stock Company (PINACO) saw the margin fall from 15 per cent to 14.2 per cent between October 2020 and March due to a sharp increase in the price of two main raw materials the company uses, zinc and lead, according to a spokesperson.
The Mercantile Exchange of Viet Nam reported that on May 12 the prices of several metals increased, zinc by 0.1 per cent to $2,995.50 per tonne and lead by 0.2 per cent to $2,217.50.
Ngo Tri Long, former rector of the Ministry of Finance’s Price and Market Research Institute, said the prices of materials used in industrial production and construction such as plastic, steel, bricks and sand are up 20 per cent this year.
Steel, which accounts for around 20 per cent of the cost of a building, increased by 40 per cent.
Le Nhu Thuy My, director of the Nhan Quoc Ceramic Tiles Company in Dong Nai Province, said there had been a slight increase in the prices of ceramic tiles due to a rise in packaging, fuel and transportation costs.
According to the General Statistics Office, in the first four months of this year the prices of raw materials used in industrial production have increased by 4.64 per cent year-on-year.
The price of raw materials and fuel used for agriculture, forestry and fisheries increased by 6.77 per cent, while those used in industrial production increased by 4.95 per cent.
How have businesses reacted to their rising costs?
Vinamilk has decided to increase prices.
KIDO Group Joint Stock Company, one of the country’s leading food processors spends 60 per cent of production costs on soybean oil and palm oil, whose prices have increased by 67 per cent and 76 per cent since last year.
The company could pass on the costs to its suppliers since it dominates the niche market for vegetable oils, an industry insider said.
But it would also probably increase prices by around 12 per cent, he added.
Analysts said however it was not easy for most companies to hike prices due to the COVID-19 pandemic, which had badly hit the incomes of both corporate and individual customers.
The Tien Phong Plastic Joint Stock Company (NTP) decided to increase its inventories of raw materials until the market calms down.
This way, it had managed to overcome the worst effects of the raw material price hikes, a company spokesperson said. VNS
Many young Vietnamese women have fallen into traps set by men on dating sites.
In a chic white dress, T.N.P.N, 27, who lives in HCM City, told VietNamNet that she was a victim of a man who made friends with her on Tinder.
N said she was warned about cheating on dating sites and tried to learn something about her friend before having relations with him.
N, who works in the information technology sector, had always looked up information about the men and had been able to avoid bad people. But she could not escape the sophisticated trap set by YiLi.
“YiLi was at another rank,” she said. “He had a youthful and manly appearance like a supermodel. He was knowledgeable with a strong personality. Though I was very cautious, I could not find anything shady about him.”
“My doubt was replaced by belief, and I followed YiLi’s advice to make a forex investment on Ausforex-x.com,” N said.
She later discovered that she had been cheated and lost over $10,000.
“YiLi designed a perfect scenario and acted so well that I absolutely believed in him. I even fell in love with him. After one month of talking, YiLi never mentioned the investment,” she recalled.
“We only talked about our hobbies. During the process, I realized that YiLi was calm and knowledgeable. I fell in love because I found that both of us had many common interests such as taking pictures and watching Japanese anime,” N explained.
One morning, when N still had not gotten out of bed, YiLi sent sweet text messages. He also sent images of him going shopping and buying luxury items.
When asked about the shopping, the man said he had made big money from forex investments. It was a ‘job’ that he was doing to earn extra money as he, a pilot, could not fly during the Covid-19 pandemic.
|Many young Vietnamese women have fallen into traps set by men on dating sites.|
Another woman, N.M.Y, 24, from Tien Giang province, was also hurt by someone on the dating app. She had been involved in a ‘billion dong swindle’.
Y was cheated out of VND1 billion, but the biggest pain for her was the emotional cheating.
The cheater was the first love of the young woman. Y felt so depressed that she had to be hospitalized after a long period of not eating.
Y is an assistant for a CEO of a large food corporation. As she was busy, she had no time to seek friends and find lovers. So she decided to seek friends on Tinder.
On the dating website, she met Li Rui. “After some conversations, Li Rui called me to chat on Line, an online chatting app, and we began our relation,” Y said.
After two or three days of talking, Li Rui began flirting with sweet messages.
“He talked about a future where there is ‘you, me and our children’, about a happy home full of laughter, where I won’t have to do anything but take care of him, our children and our home,” she said.
She said he had all the things she wanted, from a good appearance to character.
“He took great care of me and made me feel that I was really pampered. We called and chatted every day. When I fell sick, he called and messaged all the time and made careful recommendations on what to eat, what not to eat, and how to avoid stimulating drinks,” she recalled.
“If I said I could not sleep, he would call and coax me to sleep. In general, he understood women’s psychology,” she said.
The feeling of being loved quickly blew any doubts away.
Some months later, Li Rui told her that he “wanted the love to be built on wealth and money”.
He lured Y into pouring money into a BO investment (binary option contracts) on Jian Hong Era website.
Y invested Jian Hong Era $46,000.
“What makes me feel wretched is not the possible loss of money, but the emotional cheating. My love was toyed with,” she said.
“This was my first love. When I discovering the cheating, I asked Li Rui if he once loved me and I received an angry answer,” she said. “I was in great pain. That pain still haunts me,” she said.
|By Ta Hong Thai – Partner, head of Corporate Tax KPMG Vietnam|
The prime minister’s view is not just his desire as the leader of the government but is also an expectation of enterprises when almost all of us feel disappointment after a statement was made elsewhere that Vietnamese enterprises “are not competent enough to produce screws”.
The Ministry of Science and Technology (MoST) has proposed several initiatives aiming to improve the legal system in terms of mechanisms and policies for promoting science and technology activities and innovation, including investment regulations, public investment, state budget, and tax regulations.
Specifically, it requested to make the Science and Technology Development Fund an obstacle-free source of capital towards investment in innovation in technology. It is requested that the Ministry of Finance (MoF) promptly amend the joint Circular No.12/2016/TTLT-BKH&CNBTC guiding on the spending content and management of the fund.
Many enterprises have not been aware of the fund nor understand its benefits. In a way, the attempt to reach the businesses and bring these regulations into force have not been very effective.
The Law on Science and Technology was passed in Vietnam in 2000. It is a set of codes that specify the state’s policies to ensure that science and technology development constitutes a primary national policy.
The state encourages the establishment of such a fund on a national, local, and organisational scale. At the same time, the state commits to provide tax incentives in accordance with the regulations to enterprises that engage in the innovation and improvement of technologies. Therefore, businesses can benefit from tax incentives when participating in the activities of technology innovation and enhancement through the science and technology development fund.
The spirit of the laws is clear, but what about the tax regulations? According to the Law on Corporate Income Tax (CIT), enterprises can provide up to 10 per cent of their annual income before tax to establish the science and technology fund.
With this provision, the CIT law provided further details to implement the Law on Science and Technology and allowed enterprises to spare their taxable incomes for establishing the fund, meaning the enterprises do not have to pay tax supposed to be levied on the amount spared for this fund. At prima facie, this regulation seems to give great benefit to enterprises when they do not have to pay CIT and enjoy the tax saving amount, but this is not actually the case.
The CIT law also stipulates that enterprises are not allowed to claim expenditures spent from their science and technology funds as deductible operating expenses when determining taxable incomes during the period that the expenses incurred.
The reality is that when the enterprise incurs technology research and development (R&D) expenses, and if the expenses are spent from the fund, these expenses are not considered as deductible when calculating CIT liability. The government’s encouragement seems to be a temporary deferral of tax when contributing to the fund, the enterprise will pay back tax to the government later by not claiming deductible expenses when they actually incur science and technology development expenses.
It seems illogical if an enterprise is enjoying incentives like tax exemptions and reductions as result from investment in industrial parks, economic zones, or funding in difficult areas or encouraged industries.
In addition, the CIT law also stipulates that within five years from the starting date of the fund, if an enterprise does not utilise it, utilise less than 70 per cent, or utilise it for inappropriate purposes, it will be subjected to the collection of CIT, which is calculated based on the actual amount contributed to the fund plus interests on such collected amount. Obviously, the time period for enterprises to enjoy the benefit of tax deferral as a cash advance for this fund is not much.
The MoF has issued very strict regulations on the use of the fund under joint Circular 12 regarding the organising, managing, registering, reporting, and other necessary internal procedures for project approval, expenses approval, and fund transferring to other affiliated enterprises. This could reasonably be a mandatory requirement applicable to state-owned enterprises while for the remaining private enterprises, it should not be acceptable as there are many complications hindering flexibility in using internal resources with the benefit are not clear and not significant, as mentioned above.
It is prominent that the incentive policies through the mechanism of setting up and using the fund is not appropriate or practical. Therefore, for many years, these policies have not been widely applied by enterprises.
Not only Vietnam, other countries also have strong focus on science and technology development and providing incentives for the R&D activities of enterprises.
Many governments encourage enterprises to invest in the R&D activities with a range of support, especially tax policies like tax credit mechanism, double expense deduction, or super tax deduction.
For the tax credit mechanism, if an enterprise incurs R&D expenses, this enterprise has the right to use a percentage of the expenses to directly offset against their payable tax amount when declaring annual tax.
In Taiwan, for example, businesses can deduct from 10-15 per cent of their total R&D expenses against their annual income tax payable amount, although the government restricts the deduction to be no more than 30 per cent of the tax payable in the year. However, this is the actual amount of funds that businesses can be subsidised by the state. Japan, South Korea, New Zealand, Australia, and many other markets also apply the same policy.
Malaysia allows a deduction up to 200 per cent, which means that for one dollar expense incurred, two dollars of taxable income will be deducted. The state then subsidises the tax amount associated with the additional deductible expenses. Singapore even gives a deduction for up to 250 per cent, and China 175 per cent.
Tax incentives are an effective instrument when one government implements policies to encourage science and technology development. In fact, the current tax laws have provided tax incentives for high-tech businesses, businesses applying high-tech, software manufacturing businesses, and supporting product manufacturing businesses, etc.
However, R&D costs are incurred at many different stages of different businesses at different scales, and more importantly, these costs are significantly important when reviewing the objective of the laws on science and technology which is to improve the national scientific and technological capability.
In Vietnam, the limited state budget makes it challenging to provide effective support as in other countries. Nonetheless, given the reality of practice that enterprises are not interested in the policies despite availability for many years, it is essential to review these policies and consider amendments.