BUSINESS IN BRIEF 2/3

Japanese company interested in water supply project in Dong Nai


BUSINESS IN BRIEF 2/3



Representatives from Japan’s Kobelco Corporation expressed their desire to invest in the Nhon Trach 2 water supply plant project in the southern province of Dong Nai at a working session with local authorities on March 1.

They said besides construction, steel and machinery, the corporation has a unit specialising in water treatment – Kobelco-Eco Solution, which boasts advanced, energy-saving and environmentally-friendly technologies.

According to Tran Van Vinh, Vice Chairman of the provincial People’s Committee, with a population of more than 3 million, the province is forecast to need around 1 million cu.m of water per day. However the capacity of its current system is about 400,000 cu.m per day.

In 2014, the Nhon Trach 1 water supply plant (the first phase) with a capacity of 100,000 cu.m per day was built with Japan’s official development assistance (ODA) capital.

Dong Nai is implementing the second phase of the plant (Nhon Trach 2) with a loan of 15 billion JPY (132 million USD) from the Japan International Cooperation Agency (JICA) to bring its total capacity to 200,000 cu.m per day.

Vietnam-India economic cooperation grows strongly

Vietnam and India witnessed remarkable strides in their relations in 2016, especially in economics, Vietnamese Ambassador to India Ton Sinh Thanh has said.

He made the remark at a session within the framework of the fourth business conclave between India and four ASEAN countries, namely Cambodia, Laos, Myanmar and Vietnam (CLMV), in Jaipur city, the Indian state of Rajasthan, on February 28.

The diplomat said despites global economic downturns, Vietnam and India are still listed among the most dynamic economies.

India is likely to enjoy higher economic growth in the coming years thanks to various renewal measures, including the “Make in India” and “Skill India” initiatives, goods and service taxation reforms, and new monetary policies, he said.

Meanwhile, Vietnam is pushing ahead with the economic restructuring plan to improve infrastructure, human resources, and the business environment, he added.

Vietnam always considers India a reliable friend and partner, he said, noting that during the historical visit to Vietnam by Indian Prime Minister Narendra Modi in 2016, the two countries elevated their relations to comprehensive strategic partnership and defined economics as a strategic cooperative field.

Solid political rapport allowed Vietnam and India to boost trade, investment and tourism, he said.

He noted that Vietnam highly valued the Indian Government’s 300-million-USD credit package to promote bilateral trade activities.

The Ambassador suggested both enact measures to realize two-way trade target of 15 billion USD in the future. He welcomed more Indian businesses to invest in Vietnam, especially in renewable energy, oil and gas, and garment-textile.

He hailed the Indian Government for establishing a CLMV development fund to support Indian firms having investment projects in Vietnam.

The launch of the direct air route between Hanoi and New Delhi in July will make it easier for the two countries’ people to travel around, he added.

Official statistics showed that India ran a trade surplus of 2.5 billion USD with CLMV in 2014. Vietnam was the biggest importer of India among the four countries, accounting for 83.5 percent of India’s goods exports to CLMV in 2015.

India mainly exported fish, shrimps, cottons, automobiles, coffee, tea and spice to Vietnam while importing electric equipment, coffee, tea, and rubber from the market.

Indian companies are investing in energy, mining, sugar and chemicals production, information technology, and farm produce processing in Vietnam.

Japanese-funded plant inaugurated in Ha Nam

Japanese-funded NMS International Vietnam inaugurated a plant at the Dong Van II industrial park in the northern province of Ha Nam on March 1.

Spanning 7,000 sq.m, the 5-million-USD plant manufactures telecommunication devices for the auto industry.

It employs 1,000 local labourers.

Speaking at the inauguration ceremony, Chairman of the provincial People’s Committee Nguyen Xuan Dong said the facility would contribute significantly to the development of Vietnam’s car industry.

He urged the company to follow its investment commitments and respect local regulations, while noting that local agencies should facilitate operations of foreign investors in Ha Nam.

Hi-tech medicinal herb processing complex to be built in Gia Lai

The Truong Sinh Group on March 1 started construction of a hi-tech medicinal herb and food processing complex at Tra Da Industrial Park in Pleiku city, the Central Highlands province of Gia Lai. 

The project has an investment of 500 billion VND (over 21.9 million USD), including 300 billion VND for the building of technical facilities while the remaining for growing medicinal herb areas.

The complex will feature five manufacturing units that produce supplementary foods, herbal drinks, supplementary fish feed, bio organic fertiliser and bottles.

The facilities for supplementary fish feed and bio organic fertiliser are scheduled to be completed in the next four months with the designed capacities of 5,000 tonnes and 4,000 tonnes annually. The three others are slated to be operational in early 2018.

Official: Vietnam’s initiatives help APEC keep right track

The Asia-Pacific Economic Cooperation (APEC) Forum should have a long-term vision and Vietnam has put forth various initiatives to help the forum keep its right track, an APEC official said on March 1.

Dr Alan Bollard, Executive Director of the APEC Secretariat, made the remarks at a press conference which was held on the threshold of the first APEC Senior Officials Meeting (SOM1) in Nha Trang city, central Khanh Hoa province.

During the conference, Dr Bollard and Dr Denis Hew, Director of the APEC Policy Support Unit (PSU), shared the views on the context for SOM1 and discussed the outlook for policy collaboration between Vietnam and other APEC economies.

Dr Bollard said the APEC committees and working groups have just finished almost 60 technical meetings on a wide range of fields, including trade, investment and policy, and SOM1 will make a final decision on Vietnam’s proposed priorities for APEC Year 2017.

He told the participants that Vietnam has proposed four priorities: promoting sustainable, innovative and inclusive growth; deepening regional economic integration; strengthening micro-, small- and medium-sized enterprises (MSMEs)’ competitiveness and innovation in the digital age; and enhancing food security and sustainable agriculture in response to climate change.

Regarding the host country’s preparations for the SOM1 and related meetings, Dr Bollard stressed that Vietnam has made great efforts to organise these events. With 21 members, including both developed and developing economies, Vietnam has spent a lot of time discussing issues of concern raised by APEC members, he said.

On Vietnam’s proposed priorities, including the assistance to MSMEs, PSU Director Dr Hew noted APEC has carried out many programmes to support MSMEs and this year, APEC is planning to continue helping these enterprises gain easier access to technology and markets.

APEC will also assist MSMEs by promoting trade and policy reform through operations of APEC working groups and committees such as the Committee on Trade and Investment (CTI) and the Economic Committee (EC), he added.

As scheduled, the SOM1 will convene in Nha Trang on March 2-3, where senior officials from the APEC member economies will decide on Vietnam’s proposals and consider the outcomes of committees’ and working groups’ meetings.

The APEC forum includes 21 members - Australia, Brunei, Canada, Chile, China, Hong Kong (China), Indonesia, Japan, the Republic of Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Chinese Taipei, Thailand, the US and Vietnam.

Ministry response to cutting toll collection time of many BOT projects

The Ministry of Transport yesterday officially expressed opinions about the recent state audit inspection concluding that many traffic projects developed under BOT (Build-Operate-Transfer) form must reduce toll collection time by years.

The ministry said that total investment did not show the practical spending on the construction site so in BOT contracts, the ministry and a joint working group from the Ministry of Planning and Investment, the Ministry of Finance and relevant authorities decided to use definitive evaluation suitable with inspection and audit conclusions approved by authorized agencies as the final value to determine payback for a project.

The use of provisional fund must be approved by the Ministry of Transport. These clauses aim to tightly manage investment costs and determine payback. 

According to the ministry, all BOT contracts stipulate that initial toll collection time is just expected and official time must be recalculated according to definitive evaluation and regularly updated in line with interest fluctuation and vehicle flow in practice. 

Therefore, the payback does not affect the toll level which citizens must pay but depends on the definite evaluation and vehicle volume. If projection is suitable, macroeconomic factors are stable and investment management is well implemented, the reduction of the toll collection time is unavoidable and anticipated in BOT contracts. 

In fact, the Ministry of Transport have based on estimate value to negotiate toll collection time cut for some projects not inspected by the state audit agency. For instance Highway 10’s stretch La Uyen-Tan De has reduced toll collection time from 22 years and 19 months to 10 years and three months; Rach Mieu bridge in Highway 60, Ben Tre province has dropped from 22 years and ten months to 13 years and five months.

Panasonic Vietnam doubles production capacity

Panasonic Eco Solutions Vietnam Co Ltd (PESVN) announced a decision on February 27 to construct a new wiring device and circuit breaker factory in Binh Duong with an aim to double the company’s production capacity in Vietnam.

A factory costing one billion Japanese yen will be built on a 6,000-square-meter area next to Panasonic’s existing plant in Vietnam-Singapore Industrial Park II (VSIP II) to manufacture switches, plugs and disconnectors, aiming to double its production in fiscal 2020. The factory to be completed in October this year will supply the domestic market and Southeast Asia.

Panasonic’s first wiring device and circuit breaker factory has been up and running since November 2014, providing 53 million units of wiring devices and 13 million circuit breakers per year.

The investment decision to build its own factories resulted from Panasonic’s fast-expanding market share in the local market.

It also plans to reserve 18,000 square meters in the surrounding area for future expansion.

In fiscal 2016, Panasonic obtained revenue of VND920 billion.

Ton Poh Fund invests US$11mn in Vietnam’s leading mobile retailer

A Thai fund has bought 1.5 million shares in Mobile World Investment Corp (MWG), one of Vietnam’s leading mobile retailers, at a price of more than US$11 million.

The Ton Poh Fund, run by Bangkok-based Ton Poh Capital, officially received the shares from their previous owners, two other foreign funds, on February 28, the Vietnam Securities Depository has announced.

MWG is the operator of retail chains The Gioi Di Dong and Dien May Xanh.

According to the Vietnam Securities Depository, CDH Electric Bee Limited has transferred 1 million MWG shares to The Ton Poh Fund, and Dempsey Hill Asia, 500,000 shares to the Thai investor.

The CDH Electric Bee Ltd. had previously announced it would sell 1 million of the 4.72 million shares it owned in MWG.

MWG closed at VND167,500 a share by the end of February 28’s trading session, a slight decline from February 27, meaning the Thai fund had spent more than VND250 billion, or US$11.16 million.

An MWG representative said the transfer of shares between foreign investors would not affect the company’s business plans nor policies as the investments did not represent controlling shares.

Another investor, Mekong Enterprise Fund II Ltd, also has plans to reduce its stake in the Vietnamese company from 5.2% to 4.55% by offering to sell 1 million of its 8 million MWG shares.

Prior to the MWG investment, The Ton Poh Fund had sold 300,000 shares of Superdong-Kien Giang, reducing its stake in the Vietnamese hydrofoil operator to 4.83%.

The Thai fund made its debut on Vietnam’s exchange in March 2015, buying 2.5 million shares to hold a 5.92% stake in realty trader CotecCons.

Seafood export value estimated at US$844 million early 2017

The value of seafood exports in the first two months of 2017 was estimated at US$844 million, representing a year-on-year decline of 3.1%, according to the Ministry of Agriculture and Rural Development (MARD).

In February, the export value was US$351 million.

In the two months, Vietnam imported seafood worth US$196 million, an increase of 19.1% from 2016. Seafood import value in February was US$99 million.

According to the MARD, seafood output in the first two months was 389,000 tonnes, up 1.5%, with tuna and anchovy producing the highest output.

Hi-tech medicinal herb processing complex to be built in Gia Lai

The Truong Sinh Group on March 1 started construction of a hi-tech medicinal herb and food processing complex at Tra Da Industrial Park in Pleiku city, the Central Highlands province of Gia Lai.

The project has an investment of VND500 billion (over US$21.9 million), including VND300 billion for the building of technical facilities while the remaining for growing medicinal herb areas.

The complex will feature five manufacturing units that produce supplementary foods, herbal drinks, supplementary fish feed, bio organic fertiliser and bottles.

The facilities for supplementary fish feed and bio organic fertiliser are scheduled to be completed in the next four months with the designed capacities of 5,000 tonnes and 4,000 tonnes annually. The three others are slated to be operational in early 2018.

Number of new firms increases in first two months     

Some 14,450 firms were newly established in the country in the first two months of this year, a year-on-year increase of 3.9 per cent, the General Statistics Office (GSO) reported.

These new firms registered total capital of VND152.6 trillion (US$6.7 billion) for production and business, an increase of 35 per cent against the same period last year.

During the same period, average investment surged by 29.9 per cent year-on-year to VND10.6 billion per firm.

Meanwhile, existing enterprises registered to increase their capital by VND181.3 trillion in total, bringing total registered capital of all enterprises nationwide up to VND333.9 trillion in the first two months of this year.

Additionally, in the first two months, 7,977 enterprises resumed production and business following a temporary halt in operations.

Many industries witnessed strong growth in newly-registered capital during the first two months against the same period last year.

They included the real estate industry, up 43.4 per cent in number of new firms and 63.8 per cent in newly-registered capital; healthcare, up 27.4 per cent and 134.4 per centl; services sector, up 16 per cent and 196.9 per cent; and construction sector, up 9.9 per cent and 61.2 per cent; as well as finance, banking and insurance sector, up 1.5 per cent and 49.4 per cent; and processing and manufacturing industry, up 4.2 per cent and 45.8 per cent, respectively.

The GSO said the number of new firms had reduced in the sectors of art, entertainment, accommodation and catering services, as well as retail and repair of automobiles.

It also said in the first two months, 16,396 enterprises were forced to temporarily halt operations, a decrease of 0.5 per cent compared with the same period last year.

Some 2,524 enterprises were required to be dissolved in the first two months, a year-on-year increase of 14.9 per cent, including small-sized units with capital under VND10 billion per firm in the sectors of agriculture, entertainment, accommodation and catering, as well as mining, transport and logistics.

Deputy PM wants more international integration     

Deputy Prime Minister Vuong Dinh Hue has asked the Inter-Sectoral Steering Committee for Economic Integration to improve studies and forecasts of integration developments, especially negotiations of free trade agreements (FTAs), in order to devise appropriate policies.

Issues which need to be addressed included impacts of trade protectionism in Asia-Pacific, the US’ withdrawal from the Trans-Pacific Partnership (TPP), the focus of the ASEAN Economic Community (AEC), non-tariff barriers and trade facilitation in ASEAN and policy recommendations for Viet Nam, Hue said at the steering committee’s meeting on Tuesday.

Hue added that trade with Middle East and African markets must be promoted in an effort to diversify export markets.

In addition, Hue asked the steering committee to study trade defence policies to contribute to drafting the Law on Foreign Trade Management.

Hue also stressed the importance of creating a favourable business and investment climate for both domestic and foreign firms and enhancing the national competitiveness amid rapid international integration. He said that specialised checks on import and export products were burdening firms, adding that those regulations must be amended.

“Viet Nam has integrated with the world with economic integration the focus. Co-ordination among relevant agencies, local authorities and firms must be promoted to accelerate international integration,” Hue said.

According to the Multilateral Trade Policy Department under the Ministry of Industry and Trade, Viet Nam made careful preparations in negotiating FTAs, thus, the country was benefiting significantly from the trade deals, such as the Viet Nam – Korea and Viet Nam – Chile FTAs.

The department answered the Deputy Prime Minister’s question in September last year about exports of Viet Nam to ASEAN falling despite the AEC already being formed.

The department said that the capacity of Vietnamese firms in grasping opportunities from a single market remained low, adding that only 30 per cent of firms could take advantage from the single market. This was because domestic firms did not target ASEAN markets to expand exports, according to the department.

In addition, trade barriers were increasing among ASEAN countries and firms needed support to overcome them, the department said.

According to a Government report to the National Assembly at the end of last year, to date, Viet Nam has signed 12 bilateral and multilateral trade deals, 10 of which have come into force.

The two yet to come into force are EU-Viet Nam FTA and TPP with the former expected to take effect in 2018 while the later is uncertain after the US withdrawal.

Four other FTAs are under negotiation, including the Regional Comprehensive Economic Partnership, ASEAN – Hong Kong FTA, FTA with Israel and with European Free Trade Association. 

Construction of steel plant begins in Yen Bai     

Vietnamese giant steelmaker Hoa Sen Group (HSG) on Wednesday broke ground for a new steel plant in the northern Yen Bai Province’s Tran Yen District.

The plant, which is HSG’s fifth steel plant in the northern region, will be located on 20 hectares of land in Minh Quan and Bao Hung communes. It requires an investment of VND1.05 trillion (US$26 million) and will have the capacity to produce 220,000 tonnes per year.

The project is divided into three phases. The first phase, to be completed in September 2018, will have an annual capacity of 64,000 tonnes. The second and the third phases, to be completed by March 2020 and September 2021, will have an annual capacity of 64,000 tonnes and 104,000 tonnes, respectively.

At the ground-breaking ceremony, chairman of the provincial People’s Committee Do Duc Duy said the project highlighted the industrial development in the province. It would contribute to socio-economic development, help raise people’s incomes as well as significantly increase the province’s State budget revenues.

The project will also contribute towards the overall economic development of the northwest region, Duy said. 

Seventh edition of Go Green in the city launched     

Schneider Electric, the global specialist in energy management and automation, has launched Go Green in the City for the seventh year running.

This annual global challenge for business and engineering students aims to promote innovative energy management ideas for smart cities, the company said in its statement.

The challenge is open to business and engineering bachelor, master or MBA students from all over the world from now to May 12.

In Viet Nam, the 10 best teams from the preliminary round will be narrowed down to the five best teams. These teams will then participate in the national round held at Schneider Electric’s office in HCM City on June 9.

The 12 best finalist teams world-wide will be announced and then flown to Paris (France) in October to compete in the grand finale. The winning team will travel the world with Schneider Electric, visiting facilities and networking with employees and high-level management. They will also be offered jobs with Schneider Electric in their home countries.

Over the last six years, energy management in smart cities has received increasing attention from students globally. Attracting more than 15,000 registered participants from 170 countries, 60 per cent of whom were women during last year’s edition, Go Green in the City aims to educate young generations and build awareness of the need for smart energy management to create sustainable cities. 

Maritime event to take place this month     

The sixth edition of INMEX Vietnam, a marine and offshore exhibition, will open its doors to the maritime community at the Saigon Exhibition and Convention Center, HCM City from March 29 to 31.

This year, the event features some 300 exhibitors from China, Germany, Holland, Korea, Norway, Singapore, the UK, the US, and others.

INMEX Vietnam has established itself as the premier maritime event for industry players and leading brands to showcase their latest products, services and technology.

Visitors can find out more information and pre-register on the INMEX Vietnam website to get free lunch coupons and wine.

Craft villages still face many challenges

Even though traditional craft villages in Hanoi created some 800,000 jobs last year, they still need to deal with various problems including weak infrastructure and pollution.  

Statistics from the Hanoi Department of Industry and Trade show that the traditional craft villages had created nearly 800,000 jobs last year. 

Nguyen Chi Dien, a representative for Phu Yen wooden craft village in Chuong My District said the development of craft villages was facing huge many challenges. He said as most of them were household businesses, they can't exactly expand the premise and this affected their competitiveness. 

"The rental fees in industrial zones are high while people are maintaining businesses with their own money so they can't expand," he said.

The equipment at craft villages in Hanoi is outdated. Adding to the limited infrastructure and small workshops, the environmental pollution in those villages is reaching crisis point.

The tourism department in Hanoi has opened several tours to craft villages such as the tour to Bat Trang ceramic village or Van Phuc silk village. But those trips don't have much effect on the city's tourism because of the lack of parking, toilets or visitor centres.

Nguyen Van Suu, Hanoi's vice chairman, said, "To boost the development of craft villages, this year, the city will focus on popularising policies about craft villages and helping provide training courses to the ensure the continuity of the craft."

He went on to say that the city would also help connect villagers with the banks and have promotional programmes to boost tourism. He hopes the village will upgrade their equipment to create high-quality products and protect the environment.

"We hope the village will set up a place to introduce and promote their products to visitors and understand that the development of craft villages is closely linked to the city's tourism development," he said.

Paradise Group to launch new line of Halong Bay cruise ships

The Paradise Group will introduce a new line of crafted cruise ships, known as Paradise Elegance which will set sail from March.

At 25 square metres, the cabins on the two new ships are said to be some of the largest in Halong Bay which the company hope to ensure that guests can enjoy Halong Bay as much from their private cabins as they can from the various communal areas. There are 31 cabins, each with their own balcony.

Each new vessel weighs 200 tonnes, is 61 metres in length and 13 metres in height.

According to the company, the Paradise Elegance cruise ships also boast a spa, dining room, sun deck and two bars, which are all spread over five decks. 

“Many visitors to Halong Bay wish they had spent more time cruising away from the crowds," said Chief Operations Officer of Paradise Group, Carmen Marienberg. "That is why we simultaneously designed the ships to be glorious places to be, and adapted the itinerary in order to escape into more quiet corners of the bay."

The new cruise ships are expected to allow visitors to explore Halong Bay more deeply. Where other vessels stay anchored during excursions, these two vessels will continue sailing around the bay and those visiting the attractions will go by tender boats.

Guests that don’t join the activities will be able to cruise through different parts of the bay instead.

In the evenings, an a la carte dinner can be served either in the dining room or on a private balcony between 7-10pm.

Enterprises moving to social networks for advertising

Social networks have become the most-favored online advertising tool of enterprises, according to the Vietnam E-commerce Index in 2017, released by the Vietnam E-commerce Association (VECOM).

Social networks surpassed search engines as the means for online advertising in the survey behind the index, with 47 per cent and 41 per cent of responses, respectively.

Email remains an advertising channel used by many enterprises (36 per cent), while advertising in newspapers and e-newspapers remains stable, with 34 per cent and 20 per cent.

Advertising on TV is declining, with 10-13 per cent.

Social networks are considered more effective than search engines by 46 per cent of respondents, while 44 per cent believe search engines are more effective.

Seventeen per cent of respondents have not used either means.

The result matches other research on individual customers. Sixty per cent of individuals choose websites or mobile phone apps to purchase online after reading comments and user ratings on social networks. Forty-seven per cent will purchase online after being introduced to a product or service by friends and 33 per cent make a purchase after seeing a TV .

Apart from the giant online advertising firms that dominate the global market, such as Google and Facebook, some foreign advertising firms have noted the enormous potential of Vietnam’s online advertising market. Leading companies in marketing and programmatic marketing have been studying or been actively involved in penetrating the market.

Mekong Capital named Frontier Market Firm of the Year in Asia for 2016

Mekong Capital has been named Frontier Market Firm of the Year in Asia for 2016 by Private Equity International. This is the fourth year in a row Mekong Capital has picked up an award from the publication.

Mr. Chris Freund, founder and Partner of Mekong Capital, said: “This is a great honor for our team and also reflects the strong track record that is emerging in Vietnam’s private equity industry in general. The results that our investee companies have been delivering are also an affirmation of the strong management teams they have been building, their investment in developing corporate cultures that deliver results, and their general openness to applying best practices.”

Mekong’s investee companies performed very well in 2016, led by MobileWorld, Traphaco, Phu Nhuan Jewelry, Vietnam Australia International School, ABA Cool-trans, Wrap & Roll, and F88. This performance is strongly correlated with these companies applying many best practices that are part of Mekong Capital’s Vision Driven Investing framework.

Exits in 2016 included full exits from Phu Nhuan Jewelry, FPT Corporation, Intresco, and Nam Long, and several partial exits from MobileWorld. The most recent exit from MobileWorld in the fourth quarter was at a price per share 89x the original price per share at which our fund originally invested in 2007. The Mekong Enterprise Fund III has completed new investments in ABA, Wrap & Roll, and F88 and expects to announce three or four more investments in the first half of 2017.

Mr. Chad Ovel, Partner of Mekong Capital, said: “We are very proud to receive this unique award. This recognition is a clear validation of the large investment we have made to transition into a truly operating-centric firm. Our ability to provide our investee companies access to global best practices has been an absolute game-changer for their businesses and our returns.”

The Private Equity International Awards 2016 were voted on by investment industry professionals and included more than 35,000 votes across all categories.

Mekong Capital is a Vietnam-focused private equity firm, specializing in consumer-driven businesses. Its funds have completed 31 private equity investments in Vietnam, of which 20 have been fully exited and one has been partially exited.

It manages four funds with a team of 25+ full-time people in its offices in Ho Chi Minh City and Hanoi. The funds invest in fast-growing companies with ambitious expansion plans and a commitment to building management teams that will successfully execute on those expansion plans. These companies are typically well-established companies in consumer-driven sectors that operate in fragmented and fast-growing markets that provide attractive growth opportunities.

Khanh Hoa tasked to lure over 3 million foreign arrivals by 2020

PM Nguyen Xuan Phuc tasked the south central coastal province of Khanh Hoa to attract more than three million foreign arrivals annually by 2020 during his working session with the local leaders on Monday.

If the target is realized, tourism revenues would account for 15-20% of the province’s growth.

Last year, Khanh Hoa welcomed 4.5 million turns of foreign tourists, earning around 13 trillion dong while the local population remains modest with 1.2 million residents, said Le Duc Vinh, Chairman of the provincial People’s Committee.

PM Phuc hailed the efforts made by the local authorities to ensure safety of tourists.

As marine economics and tourism make up 90% of the local economic power, the Government chief called for special attention to the protection and control of environment, especially marine environment.

Nha Trang, the capital of Khanh Hoa, is considered one of the ten major service-tourism hubs of Viet Nam. However, it is now facing traffic congestions as a rail way station is located in the city center.

The local leaders asked the Government to mull over adjustments to railway planning and removal of the railway station away from the city center.

PM Phuc also urged Khanh Hoa to continue encouraging business startup movement to raise the number of enterprises to 25,000-30,000 by 2020.

Accelerating business startup movement is one of the top priorities of the Government in a bid to have at least one million enterprises by 2020.     

Hai Phong takes lead in IIP in two months

The nation’s Index of Industrial Production (IIP) saw a year-on-year increase of 15.2% in February, according to the General Statistics Office.

The IIP over the recent two months picked up 2.4% against the same period last year.

Processing and manufacturing rose 6.6%, while electricity production and distribution rose 9.3%, and water supply and waste treatment increased 6.6%.

However, the mineral sector saw a growth decline of 13.5%.

The northern city of Hai Phong took the lead, posting a growth of 17.2%, followed by Thai Nguyen province 10.1%, Da Nang city 9.6%, Ho Chi Minh City 5.8% and Ha Noi 5.1%. 

Asia Pacific Rim Conference on Operational Technologies takes place in HCM City

The 21st Asia Pacific Rim Conference on Operational Technologies – APRICOT is taking place in Ho Chi Minh City, attracting the participation of more than 700 delegates from 60 nations around the world.

The event, organized from February 27-March 2, includes discussions on key information technology issues.

The conference is held in the context that the nations have to renew management methods, change economic development and treat with social relations to keep up with the strong development of information technology and the Internet for the fourth technological revolution, said Deputy Minister of Information and Communications Phan Tam.

The event creates an opportunity for top professionals in the world to thoroughly discuss policies on technology and measures to develop infrastructure to ensure the safety of the Internet in general and Internet users in particular, she added.

More than 50 million Internet users (accounting for 60% of the population) were recorded in Viet Nam.

European F&B enterprises sound out opportunities in Vietnam

About 30 food and beverage enterprises from the European Union (EU) on February 28 began a trip to Vietnam to explore business opportunities and look for domestic partners with an aim to tap into Vietnam’s market.

According to the EU-Vietnam Business Network (EVBN), these enterprises come from different EU countries including Poland, Italia, Estonia, Greek, Spain, Portugal, France, Iceland, Germany, Hungary, the Czech Republic, Croatia, Holland and Lithuania. Their products are diverse, ranging from milk, meat, beer, and canned food to confectionery, sausages, olive oil, mineral water and soft drinks.

Most of the EU enterprises joining this trade promotion program from February 28 to March 3 in HCMC and Hanoi are first-timers to Vietnam. They will attend several conferences to meet with potential partners to get to know more about Vietnam’s market.

At a conference on Vietnam’s food and beverage market on February 28, these enterprises are given essential information like market trends, Vietnamese consumers’ behaviors, challenges and opportunities in the coming five years as well as cultural and legal aspects in Vietnam.

They also make field trips to large retail stores and join more than 600 B2B meetings with local enterprises in HCMC and Hanoi.

To prepare for the EU-Vietnam Free Trade Agreement (EVFTA) expected to take effect from 2018, EU enterprises look to expand their operations in Vietnam, including in the food and beverage sector. EVFTA is expected to help EU enterprises easily approach Vietnam’s potential market.

In November 2016, a group of more than 40 EU food and beverage enterprises came to Vietnam, showing keen interest in the food and beverage sector.

As many local consumers are increasingly concerned about food safety issues, foreign traders see this fact as a good chance to boost their sales in Vietnam. However, EU products sold in Vietnam are fairly expensive due to high transport costs and import tariffs.

When the EVFTA concluded in 2015 becomes effective in 2018, Vietnam will eliminate most tariffs for goods imports from the EU. As a result, EU products will have more competitive prices.

Foreign enterprises are currently holding a 50% market share in Vietnam’s food and beverage sector and EU suppliers want to increase their market share via domestic retail system.

In 2015, two-way trade between Vietnam and EU reached EUR38.4 ,billion including EUR29.9 billion worth of goods exported to the EU and 8.4 billion worth imported into Vietnam.

Lithuania wants to import vegetables and fruits from Vietnam

Lithuanian enterprises expect to import fruits and vegetables from Vietnam to meet the demand in their country, said Mindaugas Kuklierius, agricultural attaché of Lithuania in China, South Korea, Vietnam and Mongolia.

Speaking at a conference on cooperation opportunities for Vietnam enterprises held in HCMC on Monday, the attaché said the cooperation would be beneficial for both countries. Lithuania has high demand for fresh fruits and vegetables and a developed processing industry with five big manufacturers while Vietnam is strong in growing fruits and vegetables, he added.

Lithuania also shows interest in catfish imports from Vietnam.

Besides, Kuklierius Mindaugas said Lithuania wants to export various farm produce to Vietnam including butter, cheese, beef, chicken, pork, fish, sugar and honey.

Lithuania is located in Eastern Europe, bordering the Baltic Sea and between Latvia and Russia.

Canada promotes beef in Vietnam

Canadian Minister of Agriculture and Agri-Food Lawrence MacAulay has led a delegation representing agricultural firms to Vietnam to promote their products with a focus on beef in this market with more than 90 million people.

Heinz Reimer, vice chairman of the organization Canadian Beef, told a Canadian beef promotion event in Hanoi on February 28 that the North American country’s annual beef shipments to Vietnam over the past years had reached 350 tons. The volume is still much lower than the potential of the Vietnamese market where there are 90 million consumers and the middle class is growing fast. 

Reimer said the Trans-Pacific Partnership trade pact had not progressed as expected, impacting Canada’s prospect of selling beef to this ASEAN market. Therefore, business associations in Canada including Canada Beef have lobbied the Canadian government to launch negotiations with Vietnam over a free trade agreement in order to boost exports of quality farm produce to this market.  

MacAulay said his business mission would find ways to strengthen trade with and highlighting Canada’s contribution to Vietnam’s effort to modernize the agricultural sector. 

In addition to beef, Canadian firms introduced technology used to produce high-quality pork, oil seeds and cereals used to make oil products for animal feed, beef and seafood, among others.

At a meeting with Minister of Agriculture and Rural Development Nguyen Xuan Cuong in Hanoi on Monday, MacAulay said Canada would fund a safe growth project worth C$15 million. It will follow a project to build and control the quality of farm produce and food implemented in 2008-2014.

Cuong said products of Canada and Vietnam were supplementary and that Vietnam encouraged the importation of high-quality breeder pigs. Vietnam has licensed lobster imports from Canada for processing products for domestic consumption and export since 2014. 

Vietnam is one of Canada’s key trading partners in ASEAN. In 2016, Vietnam exported products worth US$2.65 billion and spent US$389.9 million on imports from the North American market. Canada saw strong increases in exports of lobster, fish, seafood, soy beans and wheat to Vietnam last year.

G-bonds set record in 2016

VND281.75 trillion worth of G-bonds was sold in 2016, meeting 98.3% of the plan, with 91% of this volume having a term of five years or longer.

The above figures were published by the Ministry of Finance at a press meeting on “the bond market in 2016 and orientations for development in the coming years” held in Hanoi on February 28.

With such results, the target of 70% of the issued volume having a term of five years or longer set by the National Assembly was beat. Also, for the first time, G-bonds with a 30-year maturity were successfully launched to foreign investors in 2016.

After restructuring, the G-bond portfolio displayed a remarkable improvement in terms of size, maturity and cost, the Finance Ministry said.

Specifically, G-bonds stood at 27.3% of GDP last year, versus 16.2% in 2015.

The average term of the bonds sold was 8.71 years, 1.73 years longer than in 2015, which extended the average maturity of the Government debt portfolio by the end of 2016 to 5.98 years, up 1.54 years against late 2015. The average coupon was 6.49%, down 22 to 50 basis points across the board.

Investors’ appetite underwent a positive change with a rise in the holding of long-term bonds such as social insurance, deposit insurance and bonds issued by insurers (from 23% in 2015 to 44.6% in 2016), while the holding of bonds launched by banks dipped (from 77% to 55.4%).

On the secondary market, the trading volume sharply surged against 2015, reaching VND6.3 trillion per session on average, up 72% compared to the preceding year, contributing to the significant improvement of the market liquidity.

Bonds guaranteed by the Government and local G-bonds in 2016 basically met the requirements for capital mobilization of policy banks to carry out the credit programs initiated by the State and local authorities targeting the essential and urgent projects. However, the Finance Ministry did not reveal the specific figures.

As for corporate bonds, the volume sold last year was more than VND129.63 trillion, a spectacular increase of 203.1% from 2015, said the ministry.

Despite the above results, bond markets remain small, accounting for 36.9% of GDP. The corporate bond market is underdeveloped, representing only 5.27% of GDP by the end of last year, and enterprises are still mainly raising capital from banks, said the ministry.

VCCI points out best and worst regulations

The Vietnam Chamber of Commerce and Industry (VCCI) on February 28 announced a list of the 30 best and 30 worst business regulations based on a survey of enterprises.

Launched in December 2015, the survey found a total of 60 best and worst business regulations compared to 20 regulations planned previously. VCCI picked the 60 best and worst regulations from more than 9,200 suggestions for relevant legal documents and laws.

Dau Anh Tuan, head of the Legal Department at VCCI, said the organization was under pressure when compiling the final list from the suggestions. “We neither attack anyone nor criticize any agency. We want to reflect how businesses look at regulations.”

Economic expert Pham Chi Lan said that despite objections, the fact that VCCI was able to announce the list showed a change of mindset on the part of State agencies as they had accepted comments on what are classified as good and bad rules. 

Lan suggested VCCI only sort out the worst regulations to make the final list shorter. She added the National Assembly, the Government, ministries and agencies should issue viable regulations as “this is their task and responsibility.”

VCCI stressed the worst regulations were listed at random. They include Term 2 of Article 26 in the law on trade unions which regulates firms to make financial contributions equivalent to 2% of their salary funds to the unions as a basis for social insurance payments for employees.  

VCCI explained trade unions represent the rights of employees, not employers, so it is not rational when employers are told to contribute financially to the unions to sustain their operations. On top of that, 2% of total salary funds is high, especially for firms which have large numbers of workers, and increasing other fees have also weighed on businesses.

The purpose of the Ministry of Industry and Trade’s Circular 20/2011 imposing conditions on importers of nine-seat cars or smaller vehicles is seen as unclear, affecting the legitimate trading rights of importers and sparking unhealthy competition on the domestic market. The regulation is said to force local consumers to buy imported cars at higher prices than those they should enjoy, and give the privilege to certain importers.

It is hard to enforce a regulation in Circular 57/2015 of the Ministry of Public Security requiring fire extinguishers to be equipped on automobiles as owners said the equipment might explode when their cars are parked under direct sunlight. A report of VCCI said the total social cost of 3.5 million cars in operation in Vietnam would be much higher than the benefit they got if all have the fire extinguishers.  

Other worst regulations are the Ministry of Science and Technology’s Circular 15/2015 requiring the approval of producers, importers and suppliers of equipment for the repair of fuel measurement tools at gas stations, and a rule forcing firms to obtain business certificates for their indirect cash payments. It is not reasonable if wholly foreign-owned companies and firms with foreign ownership of more than 51% are not allowed to use their own vehicles to transport goods but must hire vehicles of other businesses. 

A Ministry of Information and Communications regulation also costs leaders of printing enterprises dearly as they must have either graduated from the printing faculty at college or higher educational institution or obtained a printing certificate issued by the ministry. They must pay VND5 million each and complete a course on printing if they want to get the certificate.  

VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR

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