ICT sector strives for 8-10 percent contribution to GDP

Vietnam is determined to develop its information and communication technology (ICT) sector into one of the strongest in Asia, aiming for an annual revenue that will account for 8-10 percent of the country’s GDP.

Deputy Minister of Information and Communications, Nguyen Minh Hong, gave speech at the conference.

An international ICT conference was held in Hanoi on November 2 by the Ministry of Information and Communications, attracting more than 100 international delegates from 20 countries.

In his speech, Deputy Minister of Information and Communications, Nguyen Minh Hong, praised foreign scientists and speakers for participating in the conference which will give them a chance to share their experience in developing ICT.

By 2020, Vietnam hopes to include a world-class system in its ICT sector. To reach that goal, the country is upgrading its telecommunication infrastructure, and developing the ICT market along with high-quality human resources to meet the demands for international integration, Mr Hong said.

Professor John Vig, President of the Institute of Electrical and Electronics Engineers, Inc. (IEEE) spoke highly of Vietnam’s efforts to rapidly develop ICT, which has brought the country into the list of the top 20 countries in the world with the fastest ICT development.

However, the quality of the ICT sector in Vietnam is still failing to keep pace with global development due to the lack of high-quality human resources and a low competitive capacity, said Prof. Vig.

He said he hoped that, through the conference, delegates from countries with strongly developed ICT like the US, the UK, France and Germany would share their experience to help Vietnam to accelerate its ICT development.

Vietnam’s IT market needs a new breakthrough

Although the information technology market in Vietnam is developing rapidly, it has not made any major breakthroughs and few domestic consumers want to choose Vietnamese brand names.

Pham Thien Nghe, Deputy Chairman of the Vietnam Electronic Industries Association (VEIA) says that some Vietnamese IT businesses have not paid enough attention to creating their own individual trademarks. In addition, Vietnam’s IT products now have to compete with foreign ones in terms of price and quality.

In fact, IT products such as lap tops with Vietnamese trademarks such as FPT Elead, V-Open, CMS are built with almost all the components imported from abroad and assembled in Vietnam. In terms of quality, Vietnamese products are just as good as any product from Taiwan. However, in terms of price, on average Vietnamese computers are VND1 million cheaper.

Mr Nghe says that the difference in due to import taxes. Some components were removed from the import list this year. However, computer assembly plants have to pay for the difference in import tax between “components, electronics components, and a set of computer”.

For example, due to the globalization of computer manufacturing, almost all major computer producers have branches in China and can receive a certificate of origin (C/O form E) to enjoy a preferential import tax of zero percent under the ASEAN-China Free Trade Area (ACFTA). While Vietnam’s computer manufacturers have to pay an import tax of 3 percent for computer components. This means that the import tax for ready built computer is lower compared to the components.

In addition, Mr Nghe says that Vietnamese products have not produced popular designs and solutions for applications. He added that Vietnam’s IT businesses should not only pay attention to manufacturing but also to distribution networks and services.

It is necessary to invest in developing new designs, solutions for applications and building up trademarks. Taiwan’s IT industry has developed strongly and has been a major global IT market for several years thanks to these investments. For example, from a sector with simple production process, Taiwan’s IT sector has become a global industry which specializes in providing services and materials as well as conducting Research and Development (R & D) with the world’s leading IT brand names.

Ngo Van Vi, General Director of the Tan Binh Electronics Joint Stock Company says that almost all Vietnamese businesses have not paid enough attention to domestic policies or invested in supporting industries and R & D. Therefore, it is essential to develop R&D to establish Vietnamese trademarks. Mr Nghe suggested that the State pour investment into the Vietnam Institute of Software and Digital Content Industry (NISCI) for R & D to support businesses.

In addition, to help domestic businesses improve their competitive edge, the VEIA proposed 5 percent VAT imposed on domestic electronic products and 10 percent on imported computers. This would help domestic products in the home market.

Cement firms advised to downgrade coal

Cement plants should change their technology to use coals which are more available in Vietnam, advised an official from Vinacomin.

Vietnam’s coal output remains low to meet domestic demand

General Deputy Director of Vinacomin (Vietnam National Coal - Mineral industries Group) Nguyen Manh Hung said that currently, cement producers in Vietnam use high-quality coal dust which accounts for just 15% and 16% of the total coal output of Vinacomin.

He feels that cement plants should replace the current grade-3 coal dust with the lower-grade of 4b or 5.

“If Vinacomin’s coal output is less than 43 million this year, it may fail to provide 6.2 tonnes of coal for the Vietnam Cement Industry Corporation (Vicem),” affirmed Vinacomin another Deputy General Director Le Minh Chuan.

Earlier, Vicem said that it is facing a serious shortage of coal. Each day, it needs up to 5,000 tonnes of grade 3 and 4 coal dust, but Vinacomin only meets half of the demand.

The shortfall affects operations of its affiliates, including Hoang Thach, But Son, Tam Diep, Hoang Mai, Hai Phong and Ha Tien, Vicem complained.

Responding to Vicem’s complaint, Vinacomin Deputy General Director Nguyen Manh Hung said, in the first nine months of this year, Vinacomin supplied 4 million tonnes of coal for Vicem, or 64.8% of the set full-year target.

The modest figure is attributed to Vinacomin’s low output of grade 3 and 4 coal dust, Hung said, noting that his group had to halt the coal supply for many cement firms which did not make payments on time in September.

Due to the limited supply, cement companies should negotiate and sign contracts with the group before carrying out their new projects. Cement producers are also advised to ink long term contracts with Vinacomin when Vietnam may have to import coal in 2015.