Download - 250517Intellasia Finance Vietnam - HKBAV .pdf · With the current trading band of +/-3 percent, the ceiling rate applied to commercial banks during the day is 23,055 VND and the floor

25 May 2017

finance & business news

FINANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Reference exchange rate stays unchanged on May 25 1Fitch Revises 3 State-Owned Vietnam Banks' Outlooks to Positive 2Treasury mobilises more capital from government bonds 3Flawed regulations on handling collateral hinders bad debt

settlement 3Banks to up capital by $1.6b 4Banks keep racing to increase capital 4Credit growth faces dilemma 6Risk tolerance of Vietnamese banks very low: Dr Le Xuan Nghia 7ABBank, TPBank join ADB trade finance programme 8Sacombank postpones AGM to June 30 9Asset Magazine lauds Citi and Citi Vietnam as the banks to go 9Bonds sell well 11NA aims to better recover bad debts 11Vietnam values financial grants from OFID 12Capital aims for 4.5pct export growth in 2017 12Vietnam & Thailand set trade target 13VN, Denmark exchange lessons in food control 13Deputy PM chairs Vietnam-Spain business forum 14Annual exports to South America expand by 30-40pct 15Bangladesh in the market for 300,000 tonnes of Vietnamese rice 15Vietnam plans to open 'outstanding' special economic zones 16High time for high-tech farming in Vietnam 17Vietnam set to approve coal-fired power plants worth $7.5 billion 18Upbeat signs for Vietnamese rice exports 19Coffee output to near 2016 yield 19Vietnam's 2017/2018 coffee output to rise 10 pct on good

weather, prices 20Opportunities for Vietnam's fruits, vegetables export 21Right approach necessary for private sector to drive

Vietnamese economy 21Not all SMEs to enjoy lower tax 23Vietnam's shrimp export to Japan sees sharp increase 23Australian delegation visiting in search of energy cooperation 24HCM City's retail space strongly differentiates 25

Assembled-in-Vietnam cars are twice as expensive as Thailand's 25Hometel property segment promises big profits, big challenges 26Vietnam luxury hotel market becomes 'hotspot' in SE Asia 27Worries loom as international arrivals seen surging 27

BIZ NEWS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28Business Briefs May 25, 2017 28All main indexes close higher 29Shares rebound on financial stock recovery 29Petrolimex enjoys huge benefits through treasury stock sale 30More than 1,000 investors register for Viglacera auction 30Kido completes Vocarimex stake acquisition 31Vietnam's 10 years in WTO through expert's glance 31Prime minister welcomes Siemens CEO 32MoIT proritises letting Dung Quat Shipyard go bust 32Can Tho wants more firms, jobs 33Dong Nai attracts $483 million in FDI 34Thai Binh 1 thermal power plant joins national grid 34Enterprises want a level playing field 34Suppliers meeting distributors effective for commodity trading 36Competitiveness key for goods distribution flow 36City to monitor produce supply chain 37Northern provinces enjoy bumper Winter-Spring rice harvest 38Cattlemen look to imports to meet growing demand for beef 38Korean firm plans to acquire Gemadept 39Kantar Worldpanel releases fifth annual Brand Footprint report 40Clayton-based Enterprise Holdings inks Vietnam franchise deal 40LG Display Vietnam proposes to increase investment 40Vietnam's tax authorities to take closer look at foreign retailers41CJ's road to dominance in Vietnamese food sector 41Former Vinaconex boss faces prosecution for regulation violation 43Phu Quoc possesses great potential for second home market 44Vietnam sees six-fold rise in foreign workers since 2004 44OFID lends $21.8mn for Vinh Phuc bridge 45Clean Air Asia urges Can Tho to control air pollution 46Expensive car imports decrease 46Milk and dairy fair set for Hanoi 46

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FINANCEReference exchange rate stays unchanged on May 25

25/MAY/2017 INTELLASIA| VNA

The daily reference VND/USD exchange rate on May 25 stayed unchanged from the day before at 22,384 VND.With the current trading band of +/-3 percent, the ceiling rate applied to commercial banks during the day is 23,055 VND and the floor rate 21,713 VND per USD.The opening hour rates at commercial banks also stayed stable.Vietcombank listed the rates at 22,650 VND (buying) and 22,720 VND (selling) per USD, the same as on May 24.The rates at BIDV were kept at 22,650 VND (buying) and 22,720 VND (selling).At Vietinbank, the greenback was bought at 22,650 VND per USD, up 10 VND from May 24, and sold at 22,720 VND, the same as the May 24 rate.http://en.vietnamplus.vn/reference-exchange-rate-stays-unchanged-on-may-25/112244.vnp

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Vietnam finance & business 25 May 2017

Fitch Revises 3 State-Owned Vietnam Banks' Outlooks to Positive

25/MAY/2017 INTELLASIA| REUTERS

Fitch Ratings has revised the Outlooks on the Long-Term Issuer Default Ratings (IDRs) of three state-owned Vietnamese banks - Vietnam Joint Stock Commercial Bank for In-dustry and Trade (Vietinbank), Joint Stock Commercial Bank for Foreign Trade of Vi-etnam (Vietcombank) and Vietnam Bank for Agriculture and Rural Development (Agribank) - to Positive from Stable. At the same time, the agency has affirmed the Long-Term IDRs on the banks at 'B+'. A full list of rating actions is provided at the end of the rating action commentary. The Outlooks have been revised following a revision in the Vietnam sovereign's Outlook to Positive from Stable on 18 May 2017, which takes into account Vietnam's strong macroeconomic performance and improvement in the country's external stability indicators. The improvements are reflected in persistent current-account surpluses, manageable debt-service costs and sustained foreign direct investment inflows. For more details on the Outlook revision on the sovereign, see the rating action commentary <a href="https://www.fitchratings.com/site/pr/1023824 ">Fitch Revises Outlook for Vietnam to Positive; Affirms at BB-, dated 18 May 2017.KEY RATING DRIVERS VIABILITY RATINGS, IDRS, SUPPORT RATINGS AND SUPPORT RATING FLOORSThe Outlook revision on the three banks' IDRs reflects Fitch's view of improving sov-ereign ability to provide extraordinary support, if needed. The Long-Term IDRs of Agribank, Vietinbank and Vietcombank are driven by Fitch's expectation that govern-ment support will be forthcoming, if needed, in light of their high systemic importance and the government's controlling stakes. They are among the top four Vietnamese banks by assets and have strong domestic franchises. The banks' IDRs and Support Rating Floors are one notch lower than Vietnam's sovereign rating (BB-/Positive) as Fitch believes the large size of the banking industry relative to GDP and the govern-ment's limited resources may hamper the timeliness of support. The 'b-' Viability Rat-ings of Vietcombank and Vietinbank reflect their limited balance sheet buffers relative to the size of their problematic assets, their weak financial performance and high loan concentration risk in state-owned enterprises (SOEs). The Viability Ratings also con-sider their solid domestic franchises and their stable funding profiles. Fitch does not assign a Viability Rating to wholly government-owned Agribank. The bank's role in providing support to the domestic economy has a high influence on its standalone pro-file and makes it likely that Agribank will continue to benefit from regulatory forbear-ance.RATING SENSITIVITIES IDRS, SUPPORT RATINGS AND SUPPORT RATING FLOORS OF AGRIBANK, VIETINBANK, VIETCOMBANKThe Long-Term IDRs, Support Ratings and Support Rating Floors of Agribank, Viet-inbank and Vietcombank are sensitive to movements in the sovereign's ratings, which are currently on a Positive Outlook. An upgrade of the sovereign ratings would likely lift the banks' support-driven ratings. The banks' ratings may also be affected by any perceived change in the government's propensity to support the banks.VIABILITY RATINGS OF VIETINBANK, VIETCOMBANKFitch may take positive rating action on the banks' Viability Ratings if structural issues, such as corporate governance, bad-debt resolution and thin capitalisation, are more adequately addressed, leading to greater transparency and, together with sustained strong economic performance, to continued improvements in the banks' overall credit profiles. Viability Ratings may be pressured if excessive growth or an increased loan concentration leads to significant impairment risks and weakened balance sheets. Downward pressure for Vietinbank may be higher given its low capital ratio and high-er SOE loan concentration risk. The rating actions are as follows: Agribank Long-Term IDR affirmed at 'B+'; Outlook revised to Positive from Stable Short-Term IDR affirmed at 'B' Support Rating Floor affirmed at 'B+' Support Rating affirmed at '4' Vietinbank Long-Term IDR affirmed at 'B+'; Outlook revised to Positive from Stable Short-Term IDR affirmed at 'B' Viability Rating affirmed at 'b-' Support Rating Floor affirmed at 'B+' Support Rating affirmed at '4' Vietcombank Long-Term IDR affirmed at 'B+'; Out-look revised to Positive from Stable Short-Term IDR affirmed at 'B' Viability Rating af-firmed at 'b-' Support Rating Floor affirmed at 'B+' Support Rating affirmed at '4'.https://www.reuters.com/article/fitch-revises-3-state-owned-vietnam-bank-idUSL4N1IQ3P3

Intellasia 25 May 2017 2 / 47

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Treasury mobilises more capital from government bonds


Over 5.86 trillion VND (262.77 million USD) worth of government bonds issued by the State Treasury were sold at an auction at the Hanoi Stock Exchange (HNX) on May 24.The sale included 1.5 trillion VND (66.13 million USD) worth of five-year bonds with an interest rate of 5.03 percent per annum, 0.13 percent lower than bonds of the same term sold in the previous auction on May 17.Similarly, 1.95 trillion VND (85.97 million USD) worth of seven-year bonds sold at the auction bear an interest rate of 5.35 percent, 0.09 percent per lower than those sold in the May 17 session.Meanwhile, the sold 20-year bonds, worth a total 1.3 trillion VND (57.3 million USD) bear an interest rate of seven percent per annum, 0.09 percent lower than the successful bid at the previous session on May 10.The successful bids for 30-year bonds worth 1.115 billion VND (49.16 million USD) put the interest rate at 7.55 percent per annum, 0.09 percent lower than those sold at the May 10 session.Since early this year, the State Treasury has mobilised more than 97.5 billion VND (4.3 billion USD) from the auction of G-bonds on the HNXhttp://en.vietnamplus.vn/treasury-mobilises-more-capital-from-government-bonds/112249.vnp

Flawed regulations on handling collateral hinders bad debt settlement


Flawed legal regulations on collateral for debt collection have hampered bad debt set-tlement, participants said at a workshop in Hanoi on May 23.The State Bank of Vietnam (SBV) reported that the credit institution system handled VND616.7 trillion (US$27.18 billion) of non-performing loans (NPLs) as of January 2017. The sum of handled bad debts has increased each year, from VND74.68 trillion (US$3.29 billion) in 2012 to VND118.49 trillion (US$5.22 billion) in 2016. Bad debts set-tled in January 2017 alone were valued at VND5.14 trillion (US$226.52 million).NPLs settled by credit institutions themselves were VND349.7 trillion (US$15.41 bil-lion), accounting for 56.7 percent of total bad debts. The remaining 43.3 percent were sold to other organisations and individuals.About VND53.24 trillion (US$2.35 billion) of debts collected through the Vietnam As-set Management Company (VAMC) from 2013 to March 31, 2017 were solved.However, only VND17.1 trillion (US$753.6 million) or 2.8 percent of the handled NPLs was collected through selling collateral, the SBV said.Legal regulations did not protect the rights of credit institutions and VAMC and hin-dered the development of a bad debt market which includes sales and purchases of bad debts guaranteed by land use rights and land assets.Legal regulations on collateral settlement haven't ensured creditors' rights to collateral seizure. Meanwhile, it takes up to two years to solve bad debts and collateral via courts, making expenses account for 29 percent of collected debt value.At the workshop, participants said that if credit institutions can't seize collateral will it substantially influence their debt collection capacity.Nghiem Xuan Thanh, Chair of Vietcombank's board of directors, asked courts to streamline procedures for resolving disputes over collateral. He also called for police assistance in dealing with debtors who intentionally dodge debt repayment obliga-tions. Nguyen Duc Kien, vice Chair of the NA's Committee for Economic Affairs, said the NA Standing Committee and the economic committee agreed on the need to issue a resolution on bad debt settlement, which is expected to be approved at the NA's on-going third session.http://english.vov.vn/economy/flawed-regulations-on-handling-collateral-hinders-bad-debt-settlement-350200.vov

Banks to up capital by $1.6b

25/MAY/2017 INTELLASIA| VNS

The banking system is expected to further develop this year, as 16 banks have an-nounced plans to increase capital by a total of nearly VND37 trillion (US$1.62 billion).


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Vietcombank plans to increase charter capital from VND35.977 trillion to nearly VND39.6 trillion this year through the issue of an additional 360 million shares, equiv-alent to 10 per cent of its capital.The shares will be sold either to the public or offered to no more than 10 investors (in-cluding existing shareholders) in a private placement due late this year.BIDV also approved a plan to increase charter capital by VND4.445 trillion to VND38.63 trillion. The plan will be conducted via the issuance of 2016 dividend-pay-ing stocks worth nearly VND2.39 trillion, shares for investors worth over VND1 tril-lion and others for employees, known as Employee Stock Ownership Plan (ESOP) valued at over VND1 trillion.The same trend was also seen at Military Bank, VP Bank, Techcombank and Nam A Bank with capital hike plans ranged between VND1 trillion and VND5 trillion.According to the banks, the capital hike is aimed to enhance their competitive edge and meet requirements of Basel II, which is due to take effect in Vietnam in September 2017 in a pilot programme for ten banks.With the capital hike plans, some are concerned about a wave of increasing illegal bank capital as in the 2008-10 period.In 2006, in order to improve bank financial status and stability, the government issued Decree No. 141/2006/ ND-CP issuing the list of legal capital levels of credit institutions. Under the decree, minimum legal capital for commercial banks must be VND1 trillion in 2008 and VND3 trillion by December 31, 2010.However, the capital increase caused difficulties, due to the stagnant stock market and some banks failure to follow through.Therefore, to meet the regulations, they increased financial capital illegally through cross-ownership to avoid being acquired or merged.However, experts said that such an increase of financial capital at this time is unfeasi-ble.Banking expert Can Van Luc told online newspaper bizlive.vn that the increase of ille-gal capital is now almost impossible as the State Bank of Vietnam (SBV) monitors and controls the issue very strictly. In particular, the SBV is also very active in introducing measures to combat the increase of financial capital, helping transparency of informa-tion and prevent cross-ownership in the banking system.In addition, Luc said, through the occurrences in the 2008-10 period, banks themselves recognise the risk of raising financial capital illegally and do not dare to do so.However, he recommended the government and the central bank to help commercial banks increase capital to meet the Basel II requirements.The government can allow banks to keep roughly 50-60 per cent of dividends for cap-ital increase as some other countries do, Luc suggested.Besides, he said, it is also necessary to speed up the restructuring of ailing banks and recover bad debts to remove the bottleneck in the lending capital flow.If the recovery of bad debts is sped up, banks can reduce their provision for risky loans and have more funds to add to their charter capital, Luc said.http://vietnamnews.vn/economy/377056/banks-to-up-capital-by-16b.html#yrezSpxtlD41vXY1.97

Banks keep racing to increase capital

25/MAY/2017 INTELLASIA| NDH

2017 Banking Annual general Meeting (AGM) season has basically ended except for several banks. The most noteworthy point is that many banks plan to increase capital from small-scale banks to the "big four".Methods of capital increase are quite diversified, from issuing to existing shareholders, seeking strategic partners to using undistributed profits, equity surplus and other bo-nus funds.*A hundred ways to raise capitalTechcombank plans to raise capital the most in 2017 and is also one of a few banks planning to increase chartered capital from existing shareholders. The Bank plans to issue 500 million shares with a minimum issue price of 10,000 dong per share.


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If the offering is successful, Techcombank's chartered capital will increase from 8.878 trillion dong to 13.878 trillion dong, equivalent to 56.5%. This will be the largest capital increase of this bank from 2008. For four years from 2008 to 2012, Techcombank's char-tered capital has steadily increased from 4.705 trillion dong to 8.848 trillion dong and has not raised much capital over the last four years.According to the plan approved by shareholders at the AGM, Vietnam International Bank (VIB) will raise more than 7.9 trillion dong of chartered capital this year, equiva-lent to 44.6 percent compared to the current level by paying dividend in shares (3.5%), bonus shares (36.1%) and issuing ESOP (0.4%).*Capital increase to prepare for Basel IIThere are two main reasons for this trend. The first is the need to expand banking scale in the context of fierce the competition to enlarge market share. The second comes from the requirement of maintaining capital adequacy ratio - CAR when the State Bank of Vietnam (SBV) is actively introducing Basel II standards.Banks who increase capital with the aim of expanding scale are mainly banks with low chartered capital but high growth rate in the past two years, such as Vietnam Prosper-ity Commercial Joint Stock Bank (VPBank) or VIB.For example, VPBank had more than 10 trillion dong chartered capital, attained more than 15 trillion dong in net interest income and nearly four trillion dong in profit after tax in 2016 - equivalent to two thirds of BIDV's profit whose chartered capital is 3.5 times as much as VPBank's. Similarly, VIB, with a chartered capital of more than five trillion dong, also earned more than 700 billion dong in profit with the credit growth of 25 percent in 2016. Both of these names have had a very high growth rate in two re-cent years thanks to the expansion of the retail market.The general formula for the capital increase of these banks is to use the capital surplus or profit accumulated for many years to issue bonus shares to shareholders in lieu of paying dividend in cash only. Although the capital increase is expected to be between 30 percent and 40 percent compared to the end of 2016, this does not affect the size of Tier 1 capital. Instead, this only changes its composition while still helping to increase chartered capital significantly.In order to increase the capital adequacy ratio (CAR), these banks choose to expand the Tier 2 capital scale through the issuance of secondary bonds. VIB, besides the plan to raise chartered capital by 40 percent in 2017 through paying dividends in shares and bonus shares, also proposes to mobilise seven trillion dong of Tier 2 capital to increase the CAR and other adequacy ratios for business needs.In addition to the aforementioned reason, most of the remaining banks are rushing to improve the CAR when the adoption of Basel II is coming.Of the 10 banks piloting Basel II under SBV's decision in early 2016, with the exception of Maritime Bank and Sacombank who have no specific plan, seven out of eight re-maining banks proposed to raise capital this year.Compared with other countries in the region and in the world, the application of Basel standards in Vietnam is quite slow. While many countries have completed Basel II, moving towards Basel 2.5 and Basel 3, most Vietnamese banks have basically met Ba-sel I standards and are in the process of piloting the higher level.Under Basel II, the risk is also calculated by the three main factors that banks have to face instead of one such as Basel I, including credit risk, operational risk and market risk. Although the regulation on CAR does not change (minimum eight percent), the requirement for capital adequacy is significantly improved when the denominator is raised by adding weightings when assessing risk level. With this new calculation, many banks will fall into risky situation when they do not meet the minimum when recalculating.As per Military Bank Securities Company (MBS)'s analysis report issued at the time the SBV promulgated to pilot applying this standard at the beginning of 2016, the CAR of banks following the new formula would reduce by 1-3 percent compared to the cur-rent level. Therefore, there will appear banks whose CAR will be lower than the min-imum eight percent after recalculating. Pressure to "push up" CAR is an obvious thing


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to do if you do not want the adequacy indices to hit the danger level.In order to increase this ratio, there are actually only two ways which are to raise cap-ital or reduce the total risky assets. Of course, in the context that banks race for credit growth, it is not easy to reduce risky assets and the fastest way to raise capital. Only cases such as BIDV, which is very difficult to increase capital, choose to reduce risky assets.

Credit growth faces dilemma

25/MAY/2017 INTELLASIA| VNF

At the recent prime ministerial meeting with businesses in 2017, State Bank Governor Le Minh Hung said that credit growth in the first four months of 2017 reached 5.76%, highest level in the last eight years.Compared with the credit growth target in 2017 of approximately 18%, the credit growth in the first four months has completed 32 percent of the year plan. Credit growth has gone one-third of the way after one-third of the time of 2017.Basically, in order to complete the credit growth target for the whole year, the State Bank of Vietnam (SBV) needs to maintain the credit growth as in the first four months of the year. This is not difficult because normally, the credit growth in the first few months are often low due to low production capacity as well as low pressure on pay-ment and repayment.In the past four years, credit growth in the first four months of the year has never met more than 25 percent of the full year target. In 2013, credit growth in the first four months (2.22%) was equal to 18 percent of the whole year credit growth (12.52%). In 2014, credit growth was even lower with only 10%. In 2015 and 2016, this figure was 23 percent and 22 percent respectively. The projected figure of 32 percent for 2017 is "breaking" the annual rule.In fact, whether this breaks the rule or not depends on whether the SBV will increase credit growth target for 2017 or not.If SBV does not aim to increase, for the remaining months, credit growth will be shaky in the context of high credit pressure as production capacity, pressure of payment and repayment is increasingly higher in the coming months. Can the rule breaking affect the efficiency of economic resource allocation?Does credit shameless lead to the situation that businesses which need capital and meet the conditions for lending cannot access credit?Loosening credit growth target at this time can be seen as a solution in the context of much lower GDP growth than forecast, and low inflation. Breaking the rule of annual credit growth will therefore be unlikely. However, the efficiency in allocation of eco-nomic resources is once again mentioned."The quality-growthists (including me in this group) think that loosening monetary policy to grow at this moment is unreasonable. We think that the economy and busi-ness like forests and trees, credit is like fertiliser. Only moderate application should be made for the root itself to find other sources of nutrients. Thus, the root will develop deeply underground, then the tree will stand firm under the storm and the forest will not be destroyed," said Nguyen Duy Hung, Chair of Saigon Securities Incorporation (SSI).The risk of "bubble" is also a concern when loosening credit growth target. As per the National Assembly Economic Committee, in the context that credit growth in the first four months hit 5.76%, some have proposed to strengthen the risk control for real es-tate loans to reduce the risk. The "bubble", especially when more than 3,100 real estate businesses are set up in 2016, nearly doubles 2015.Bad debt is also a major barrier to credit expansion. According to a recent government statement, as of December 31, 2016, the non-performing loan (NPL) ratio in the balance sheet and bad debt sold to Vietnam Asset Management Company (VAMC) and poten-tially irrecoverable bad debt was 10.08 percent of the total outstanding loan.If the net debt ratio of 2.46 percent is subtracted, as of December 31, 2016, the NPL ratio sold to VAMC which has not been settled and the potentially irrecoverable bad debt will be 7.62%. With such a high unsolved bad debt ratio, if the full provision is made,


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the banks' profits will be greatly eroded, even many banks will be hard to avoid big losses. Accordingly, the equity will grow slowly for years or even shrink.Equity is like the most important capital adequacy "buffer". With thin capital safe-guards, banks will be forced to be cautious in boosting credit, as the higher the credit, the greater the risk of arising new bad debt in the context that unsolved bad debt re-mains large.

Risk tolerance of Vietnamese banks very low: Dr Le Xuan Nghia

25/MAY/2017 INTELLASIA| TRI THUC TRE

Dr Le Xuan Nghia, a financial shock from the outside or from the property market (real estate market, stock market) will have a very bad impact on the whole financial system and economy. It can take many years to recover.As per Dr Le Xuan Nghia, a finance and banking expert, dealing with bad debts and restructuring banks is the most urgent issue today. According to reports by commer-cial banks and the Vietnam Asset Management Company (VAMC), the total unsolved bad debt is now between 450 trillion dong and 500 trillion dong, equivalent to about $20 billion to $25 billion."The worry is that the bad debt concentrates in some ailing banks that are in the proc-ess of restructuring, with limited additional funds. Despite the government's plan to restructure the system of credit institutions since 2011, the results are still relatively modest, mainly due to the limited financial resources, lack of financial resources to quickly deal with bad debts. On the other hand, we have not built a strong legal corri-dor to handle bad debt quickly and efficiently," said Nghia.The treatment of bad debt has so far been based mainly on financial resources of the banking system, mainly debt recovery, sale of collateral or use of risk provisions de-riving from the business results of the commercial banks themselves.So far, commercial banks have handled about 250 trillion dong of bad debts on their own. These are great efforts of the banking system, but this also makes their financial fundamentals be drastically reduced. The commercial banks' profitability is only half that of 10 years ago and the lowest in South East Asia, with some commercial banks experiencing negative equity."This shows that the risk tolerance of Vietnamese commercial banks is very low and only a financial shock from outside or from the asset market (real estate market, stock market) could have a very bad impact on the entire financial system and economy that will take many years to recover. In the current international context, the instability of financial markets can take place at any time and with ever increasing scale," the expert said.*There should have separate legal corridors to handle bad debtDr Le Xuan Nghia said that the handling of large scale non-performing loans, in all cas-es, needs a separate legal corridor. For example, Korea and Thailand in 1997, despite the huge financial support from IMF with about $50 to $70 billion needed a special le-gal corridor, for example, the regulations on nationalisation of private banks to re-structure and the privatisation or the regulations on the power of debt trading, the right to recover collaterals for selling of commercial banks.In Vietnam, if there is no centralised financial resources but based on the self-restruc-turing of commercial banks, a stronger legal framework is required. Because the com-mercial banks themselves are not competent enough to take back debt, recover collaterals or buy and sell debts on the market principles without conflicting with oth-er relevant laws.Up to now, the handling of bad debts at commercial banks and at VAMC needs to overcome legal barriers, such as the recovery of security assets, the sale of assets, the legal enforcement, the search for new investors to replenish their own capital, off-bal-ance sheet accounting, debt write-offs by risk provision, etc. These legal hurdles are making the process of dealing with bad debts so sluggish, ineffective, even wasting re-sources and greatly affecting the financial foundation, credit expansion and risk toler-ance of commercial banks. At the same time, it also affected the reduction of interest rates, financial investment costs and access to credit by businesses, especially small


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and medium enterprises.Nghia pointed out in the next few years, many bad debts from VAMC will be returned to commercial banks while these banks are struggling to deal with bad debts that have not been sold to VAMC. At that time, the difficulty of dealing with bad debt and re-structuring of these banks will be multiplied. That can seriously affects the financial security of the whole banking system.Thus, more than ever, state-run agencies need to have strong political will to break through the old law-making mindset, quickly building a separate legal corridor as the basis for commercial banks to successfully carry out the NPL process as set out in the restructuring plan of the government's credit institutions. This is also the only solution to ensure the stable stability of the entire financial sector and make decisive contribu-tion to stabilising macroeconomic and sustainable growth of Vietnam in the coming years," the expert said.

ABBank, TPBank join ADB trade finance programme


An Binh Joint-Stock Bank (ABBANK) on May 24 officially signed an agreement with the Asian Development Bank's (ADB) on joining the Trade Finance Programme (TFP) one of prominent programmes enabling Vietnamese enterprises to increase competi-tiveness and get more opportunities to promote economy.Under the agreement, ABBANK will promote the implementation of regulations on safe management and operation, towards constantly improving the quality of services and helping enterprises easily access international market.Becoming a member of the TFP, ABBANK will serve as an effective bridge, bringing opportunities to Vietnamese firms to expand links with other 200 member banks of the TFP worldwide."Our Trade Finance Programme aims to help Vietnam and Vietnamese businesses ex-pand trade opportunities, increase competitiveness, and promote trade-led inclusive growth," said Steven Beck, ADB's Head of Trade Finance.According to Cu Anh Tuan, Chief Executive Officer of ABBANK, the signing with the TFP marks the start of a positive development and close relationship between ADB and ABBANK in developing banking services of the Vietnamese bank.Cooperating with the TFP will not only bring higher business efficiency, but also create an opportunity for our bank to affirm its brand in the banking and financial market, he stressed, hoping that ADB's continued trust and support will further promote trade development between Vietnam and other countries.The same day, Tien Phong Commercial Joint-Stock Bank (TPBank) signed a similar agreement with ADB.According to Nguyen Hung, Chief Executive Officer of TPBank, ADB's extensive net-work of banks and other financial institutions will provide great opportunities for TP-Bank to expand its global partnerships.He said that the guarantee limit from ADB shall be used to support Vietnamese small and medium-sized enterprises to optimise their businesses so they can contribute to Vietnam's economic growth.ABBANK is one of the leading commercial joint-stock banks and is among the top ten largest commercial banks in terms of charter capital in Vietnam. Its current charter capital exceeds 5,319 billion VND (about 234 million USD) and it has an extensive net-work of 164 transaction offices located in 34 provinces nationwide.Meanwhile, TPBank is one of the most dynamic commercial banks in Vietnam with to-tal assets of around 106,000 billion VND (4.6 billion USD), about 4,000 employees, and an extensive network of 55 branches and transaction offices across Vietnam. Currently, with more than 1.5 million individual customers and businesses, TPBank has been as-serting its position as a strong, sustainable and healthy bank in the country.To date, TFP has supported 8.2 billion USD in trade through 5,814 transactions cover-ing both guarantees and direct funding in Vietnam. Out of TFP's total transactions in Vietnam, 67 percent are related to small and medium-sized enterprises. TFP is current-ly working with 11 commercial banks in Vietnam and, with the signing of agreements


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with ABBANK and TPBank, this will increase to 13 commercial bankshttp://en.vietnamplus.vn/abbank-tpbank-join-adb-trade-finance-programme/112228.vnp

Sacombank postpones AGM to June 30

25/MAY/2017 INTELLASIA| VN ECONOMIC TIMES

Bank's restructuring plan secured central bank approval on May 22.In an announcement published on its website on May 24, Sacombank said it cannot hold its 2015 and 2016 annual general meeting (AGM) in May as expected, with a new date set for the end of June."Due to the incomplete preparations of AGM documents and personnel for the new Board of directors and Supervisory Board during the 2017-2021 tenure, Sacombank will postpone the AGM, which was set for May 26, and expects to hold it on June 30," the statement read.This is the second time Sacombank has postponed its AGM, which was initially set for April 28.The announcement also noted that the bank's restructuring plan post-merger was ap-proved by the State Bank of Vietnam on May 22, and its audited financial statements are currently being completed.Sacombank is yet to publish its 2015 and 2016 audited financial statements.It will send an invitation letter to shareholders and publish documents for the AGM within the prescribed time limit.In addition to the bank's current senior officials, including Chair Kieu Huu Dung, the list of candidates for the new Sacombank Board for the 2017-2021 tenure includes Nguyen Van Huong, the recently-resigned deputy Chair of LienVietPostBank. Huong is currently the deputy Chair of the year-old Vietnam Macadamia Association, a social and professional organisation co-founded by LienVietPostBank and real estate giant the Him Lam JSC, which holds more than 30 per cent of LienVietPostBank.Sacombank became the fifth-largest lender in the local banking sector in 2015 after its voluntary merger with Southern Bank. Previously among three private lenders with the highest annual net profits, the joint entity was supposed to bring greater benefits to Sacombank's shareholders and customers. But the bank was hit almost instantly post-merger, with a pre-tax loss of VND671 billion ($29.5 million) in 2015's fourth quarter, making its pre-tax profit for 2015 as a whole only VND1.29 trillion ($56.6 mil-lion), a fall of 55 per cent against 2014.In its October 2016 report, Moody's confirmed Sacombank's "B3" long-term ratings and "caa1" BCA, and changed the outlook to negative. The confirmation of the caa1 BCA reflects the high solvency and liquidity risks faced by Sacombank post-merger.The B3 long-term ratings of Sacombank were confirmed because Moody's continues to incorporate one notch of uplift, based on the rating agency's expectation of moderate support from the Vietnamese government. The negative outlook on Sacombank's rat-ings reflects the uncertainty around the strategic direction of the bank, its unclear own-ership structure, and the true scope of asset quality challenges.The bank posted an after-tax profit of VND210.5 billion ($9.28 million) in the first quar-ter of this year, a 30 per cent increase year-on-year, according to the bank's latest finan-cial report. Its bad debt ratio fell from 5.35 per cent at the end of 2016 to 4.88 per cent as at March 31, but remains the highest among its peers.http://vneconomictimes.com/article/banking-finance/sacombank-postpones-agm-to-june-30

Asset Magazine lauds Citi and Citi Vietnam as the banks to go

25/MAY/2017 INTELLASIA| VIR

Leading industry publication Asset Magazine announced the 2016 winners of its an-nual poll. Accordingly, Citi Vietnam was the Best Corporate and Institutional Bank in 2016, and Citi was the Best Bank in the Asia-Pacific, as well as the Best Corporate and Institutional Bank and the Best Digital Bank in Asia.The decisions were made by the editorial team of the magazine and were based on the 12-month performance of the banks.


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In the editorial write-up announcing the awards, the editors explained their pick of the best bank and the best corporate and institutional bank as follows: "Citi reported pos-itive revenue growth last year. It opened a new office in Hong Kong One Bay East, launched voice biometrics across Asia, and added new credit card offerings across the continent. In terms of corporate and institutional banking, Citi is consistent in arrang-ing marquee transactions across equity, equity-linked, debt capital markets, and M&A. Citi was also a trusted financial adviser and represented clients in deals such as Chinese outbound acquisitions and divestments from multinationals."Regarding the digital award, Asset Magazine said, "During the review period, Citi ex-celled in refining its mobile offering and struck a number of partnerships with new age companies. From India to Korea, Citi in the Asia-Pacific has undergone a digital trans-formation over the past 12 months. The bank has pushed forward with a number of digital services aimed at making customers' lives easier. Citi has also taken a mobile-first approach to retail banking, enhancing its mobile capabilities across its regional footprint. The bank has pushed forward in its engagement with customers over social media platforms, including Line and WeChat. Moreover, the bank has continued to support the growing fintech community in Asia through its Citi Mobile Challenge.""In a highly competitive market, this independent recognition is greatly appreciated by all of us at Citi. I would also like to thank our clients who place their trust in us to meet their financial needs. Asia and Vietnam is at the heart of Citi's growth strategy and we are well placed to capture more of the growth opportunities in this region, in-cluding further digitisation and from our clients using our Asian and global network," said Natasha Ansell, Citi Vietnam CCO.The last 12 months were pivotal in Citi's 115-year history in Asia, with a deliberate shift in strategy in response to the market environment to generate growth. In institutional banking, Citi helped raise over $150 billion for clients and advised on over $85 billion of M&A for clients in the region during 2016, according to Dealogic data.During 2016, Citi's consumer banking business in the Asia-Pacific, which spans over 12 of the 19 global consumer markets globally, was further transformed to a model that is simpler, dramatically faster, more scalable, and far more digital.On average, Citi announced a new digital innovation or partnership on a fortnightly basis in the last 12 months. Today, more than half of the bank's consumer banking cli-ents uses digital channels, with mobile being the fastest growing channel (35 per cent growth year-on-year). One of every four new credit card accounts acquired comes from digital sources and over 50 per cent of our clients are actively using digital bank-ing channels, up from the 30 per cent three years ago.During 2016, Citi announced strategic partnerships in leading digital ecosystems across the region. Some of these included Alipay and WeChat in China and Line in Thailand and Taiwan. The bank also formed digital credit card partnerships with the likes of Amazon, Airbnb, Grab, Uber, and Lazada in various countries across Asia.Over the last year, Citi launched the newly-refreshed Citi Mobile App, featuring easy-to-use functionality and interfaces, such as Snapshot and Touch ID, which has seen over two million downloads to-date. The bank was also the first to launch Voice Bio-metrics across the region, which has since received more than one million sign-ups from customers.Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments, and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment bank-ing, securities brokerage, transaction services, and wealth management.http://www.vir.com.vn/asset-magazine-lauds-citi-and-citi-vietnam-as-the-banks-to-go.html

Bonds sell well 25/MAY/2017 INTELLASIA| TRI THUC TRE

Last week, the State Treasury held a successful auction session. For the first time after seven months, 100 percent of bonds consisting of four trillion dong bonds called for


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bid and 1.2 trillion dong bonds called for additional bids were sold out, according to the weekly money market report of Saigon Securities Incorporation (SSI).Following the success of the auction in the previous week, the State Treasury only fo-cused on four short terms ranging from five years to 15 years as the 20-year and 30-year tenor bonds have exceeded the full-year issuance plan.Demand for bonds continued to move positively with the registration rate soaring 356%, the highest level since October 2016, helping the State Treasury to easily issue bonds at the interest rate reducing six percentage points for each term, reversing the continuously increasing trend of interest rates since February.In addition, in the context of improved liquidity, the Bank for Social Policies also suc-cessfully issued one trillion dong worth of bonds in 5-year, 10-year and 15-year terms, gaining 720 billion dong with interest rate decreasing six percentage points for 10-year term and 20 percentage points for 15-year term.In the common trend with the primary market, the secondary bond market was also very active. The increased demand for bonds helped the liquidity to rise significantly. The total transaction value reached 42.5 trillion dong, equivalent to an average of 8.5 trillion dong per session. Particularly, demand from foreign investors increased with the buying value to improve from 800 billion dong to 1.3 trillion dong, leading to the net buying back of 477 billion dong of foreign investors.Bond yields continued to decline, with a common decrease of 2-11 percentage points. In particular, the three-year term slumped 11.6 points compared to 11 points to 4.16 percent for one-year term and 6.4 points to 4.77 percent for two-year term.

NA aims to better recover bad debts


The National Assembly's Economic Committee on Monday agreed to streamline exist-ing legal regulations to better recover bad debts and restructure credit institutions.During the meeting, the Governor of the State Bank of Vietnam Le Minh Hung, on be-half of the prime minister, presented a report on the draft resolution on fixing bad debts by credit institution. He also presented amendments to the Law on Credit Insti-tutions for consideration and approval.The draft resolution comprises 18 articles regarding the rights of legal lenders, the de-velopment of debt markets, the settlement of guaranteed assets and other topics.Chair of the NA's Economic Committee Vu Hong Thanh said that the committee basi-cally agreed with the government's report on the need to settle bad debts and further restructure the system of credit institutions during the 2016-20 period.The committee stressed the need to streamline laws to build a system of financially healthy credit institutions that operate under international rules.It asked compiling agencies to continue reviewing draft law regulations to ensure that they are synchronous with the Constitution and relevant laws.Once the resolution is approved by the Legislature, the government affirmed that it would focus on improving legal documents, mechanisms and policies for restructur-ing credit institutions and settling bad debts.The government would also improve plans to fix weak banks in line with market rules in an expeditious, sweeping and cautious manner to safeguard the banking system and depositor interests.According to Governor Hung, after four years implementing a project on settling bad debts of credit institutions, the entire system of credit institutions recovered VND611.59 trillion (US$26.82 billion) of non-performing loans (NPLs). Of that total, over 56 per cent were settled by the institutions themselves, and the remaining were sold to the Vietnam Asset Management Company (VAMC) and other individuals and institutions."The results of settling bad debts have helped credit institutions expand loans to the economy, especially to priority and strategic sectors. It has contributed to removing difficulties in production and business, thereby promoting economic growth," Hung said.However, the restructuring of ailing CIs and settlement of bad debts still faced diffi-


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culties, Hung said, adding that total NPLs of the entire credit institutions system until March 31, 2017 were VND160 trillion, equal to 2.56 per cent of the institutions' total outstanding loans.According to Hung, because of inadequate legal regulations, there remain obstacles to speeding up the restructuring of ailing banks and settlement of bad debts.For example, the law on the handling of mortgaged assets to recover debts still has many inadequacies related to the confiscation of mortgaged assets, especially land, which limits the progress and effectiveness of debt settlement.http://vietnamnews.vn/economy/376955/na-aims-to-better-recover-bad-debts.html

Vietnam values financial grants from OFID


Vietnam welcomes technical support from the OPEC Fund for International Develop-ment (OFID) via official development assistance and preferential loans.Prime minister Nguyen Xuan Phuc made the remarks when talking about Vietnam's high demand for infrastructure development at a meeting with OFID director-General Suleiman Jasir Al-Herbish in Ha Ni yesterday.The PM lauded the signing of a $21.8 million loan agreement between the finance min-istry and OFID on Monday for the construction of Dam Vc Bridge in the northern prov-ince of Vnh Phuc. He noted that the two sides had implemented many effective joint projects in Vietnam's remote areas.He asked the OFID to continue financing projects in Vietnam, adding that the govern-ment is willing to work with the fund in designing programmes in line with OFID funding criteria and the country's growth strategy.Stressing that Vietnam wants to develop the private sector, the PM called on the OFID to create favourable conditions for the sector to access the fund's capital. He suggested holding discussions on the matter and assigned the finance ministry to work on the co-operation.For his part, Suleiman Jasir Al-Herbish said his current visit reflected the OFID's will-ingness to expand cooperation with Vietnam in any field at any time within its capac-ity.Noting that 2018 would mark 40 years of collaboration between the OFID and Viet-nam, he said the joint work had produced sound outcomes and revealed that the or-ganisation was studying a number of projects in the country.The OFID hoped the prime minister would direct relevant agencies to prepare all needed procedures for joint projects so that they could be signed right after being ap-proved by the OFID executive board, he said. The OFID director-General said his or-ganisation had a private sector department that could work with the Vietnamese finance ministry on cooperation between OFID and Vietnam's private sector.http://vietnamnews.vn/politics-laws/376992/viet-nam-values-financial-grants-from-ofid.html#E3pfMcqcOxucRwbX.97

Capital aims for 4.5pct export growth in 2017


The capital aims to generate $11.1 billion from exports this year, 4.5 per cent higher than 2016, the municipal Department of Industry and Trade has said.To achieve this goal, Ha Ni will continue work on accelerating administrative reforms with special focus on customs, tax and business licencing procedures, as well as draw up effective policies.Priority will also be given to improving the competitiveness of local enterprises and their export products, and attracting investment for infrastructure that is needed to promote export activities.The city will also strengthen promotional activities, and provide businesses with more information on international markets and export products. Training sessions will be held for businesses to make them aware about export policies and regulations in Viet-nam and other countries so that they can meet international commitments and over-come trade barriers.In 2016, the city's exports rose by a modest 1.5 per cent to around $10.6 billion. The


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growth was much lower than the 7-8 per cent target set for the year.This unsatisfactory export performance was the result of a fall in turnover of key ex-port goods such as textiles and garments at $1.4 billion, down 5.7 per cent year-on-year; computer components at $1.29 billion, down 3 per cent; and farm produces at $889 million, down 8.4 per cent.http://vietnamnews.vn/economy/376953/capital-aims-for-45-export-growth-in-2017.html

Vietnam & Thailand set trade target

25/MAY/2017 INTELLASIA| VNECONOMIC TIMES

Trade to reach $20 billion by 2020, conference hears.Vietnam and Thailand have targeted increasing trade turnover to $20 billion by 2020 based on the determination and proactive nature of the two governments and enter-prises from both countries, deputy minister of Industry and Trade Do Thang Hai told the "Vietnam-Thailand Trade and Investment Embrace the Potential of the Strategic Partnership" conference held by the Ministry of Industry and Trade and the Thai Min-istry of Commerce on May 23.The $20 billion goal, he said, is perfectly achievable. "In the years to come, the two countries' trade will increase as they move towards the implementation of the Asean Free Trade Agreement and other agreements," he explained.Thai deputy minister of Commerce, Winichai Chaemchaeng, told the gathering that Vietnam is the second-largest trade partner of Thailand in Asean and Thailand is the largest trade partner of Vietnam. "The cooperation between the two countries will con-tribute to solidarity and cooperation within Asean," he believes.Trade was estimated at $12.5 billion in 2016, an increase of nearly 9 per cent compared with 2015. As at the end of March, Thai investors had poured $8.13 billion into 458 projects in Vietnam, ranking it tenth among 115 countries and territories.As at January 1, 2015, Vietnam had cut 8,600 tariff lines to 0 per cent and will do like-wise to the remaining 669 tariff lines by 2018. More than 9,500 tariff lines have also been listed in the tariff reduction schedule in the Asean Trade in Goods Agreement."The two governments are actively cooperating to realise measures to support busi-nesses to take full advantage of preferences for enhancing exports," Hai said. "In the future, the Vietnamese government will issue policies to develop support industries and the production of materials, to connect foreign enterprises with domestic counter-parts."Vietnam's Trade Promotion Agency signed a cooperative agreement with Thailand's Kasikornbank at the conference, as part of a series of measures to boost trade between the two countries.http://vneconomictimes.com/article/vietnam-today/vietnam-thailand-set-trade-target

VN, Denmark exchange lessons in food control


The Vietnamese Ministry of Agricultural and Rural Development (MARD) met with the Ministry of Environment and Food of Denmark (MFVM) on Tuesday in HCM City at a conference on safe management of the pork product value chain.The conference's goal was to raise awareness for both farmers and consumers in Viet-nam. The guiding principle was "from farm to fork", and the discussions spanned are-as such as feed, veterinary medicine, chemicals and product origin.Phung Huu Hao, deputy head of the National Agro-Forestry-Fisheries Quality Assur-ance Department (NAFIQAD) under the MARD, said at the conference that Denmark has one of the world's top food quality control systems, and Vietnam looks forward to collaborating with Danish agencies.Commenting on agricultural and animal husbandry in Vietnam, Finn Clemmensen, Senior Counsellor of the Food and Veterinary Management Department under the MFVM, stated that despite the presence of numerous associations in these fields, actu-al inspection and monitoring of farms and businesses are usually done by government agencies.According to Clemmensen, after a field tour, he noted that several slaughterhouses did


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not strictly obey safety and sanitary procedures, and the whole pork production busi-ness is in need of further regulation. He emphasized the need for a complete and safe value chain to ensure the benefits of domestic consumers and the potential for Viet-namese pork exports.Representatives from the NAFIQAD agreed with Celemmensen, stating that while Danish pig farms are all numbered and registered before the authorities, in Vietnam there are around 4.5 million unregistered household farms with about 29,000 slaugh-terhouses. This has greatly inconvenienced State run agencies responsible for pork safety and quality control.Until 2020, relevant agencies will continue implementing annual origin inspections for animal products, along with projects ensuring food safety in transporting and slaugh-tering cattle and poultry. Agencies will also enhance international cooperation in the field, said Huynh Thi Thanh Binh, head of the Community Veterinary Division under the Department of Animal Health.The two countries have been working together since 2013, after the signing of a proto-col on food safety control between the MARD and the MFVM. In 2016, both sides agreed to carry out strategic pork value chain cooperation to take place between 2017 and 2018.To honour this cooperation agreement, Danish MFVM will grant about $45,000 to Vi-etnam, together with field experience and technical support from experts and admin-istrative departments from Denmark. The objective is to enhance capability among Vietnamese authoritative agencies to help them chart their own sustainable strategies in food safety control.http://vietnamnews.vn/economy/377046/vn-denmark-exchange-lessons-in-food-con-trol.html

Deputy PM chairs Vietnam-Spain business forum

25/MAY/2017 INTELLASIA| DTI NEWS

Deputy prime minister and Foreign minister Pham Binh Minh reaffirmed the Viet-namese government's commitment to welcoming foreign investors, including those from Spain, with all possible support at the opening of the Vietnam-Spain business fo-rum in Madrid on May 24.Highlighting Vietnam as a bright spot in terms of investment attraction and tourism, Minh said Vietnam has so far lured nearly 300 billion USD in foreign direct invest-ment, 154 billion USD of which has been disbursed. The number of tourist arrivals in the country has surpassed a record 10 million thanks to political-security, investment and economic policy stability.A representative from the Spanish government described Vietnam as one of the prior-ity markets, particularly in the fields of infrastructure, railway, seaport, agriculture and tourism, and pledged to facilitate collaboration between the two nations' business-es.Deputy minister of Planning and Investment Nguyen Van Hieu introduced Vietnam's preferential investment policies while deputy minister of Industry and Trade Cao Quoc Hung talked about business opportunities with Spanish enterprises.The two officials had direct meetings with Spanish firms operating in wind and solar power, construction of airports and seaports, water treatment, waste and plastics treat-ment, which expressed their wish to travel to Vietnam to learn about specific projects.On the occasion, Minh also witnessed the signing of agreements between Vietnamese and Spanish firms in infrastructure design consultancy.As part of celebrations for the 40th anniversary of bilateral diplomatic ties, the forum was co-organised by the Vietnamese ministries of Foreign Affairs, Planning and In-vestment, Industry and Trade; the Vietnam Chamber of Commerce and Industry; the Vietnamese embassy in Spain; the Spanish Ministry of Economy, Industry and Com-petitiveness; and the Spain Chamber of Commerce and Industry, attracting nearly 200 officials and businesses from the two nations.At a meeting earlier the same day, Minh and Spanish minister and Secretary of State for Trade Maria Luisa Poncela promised to lift two-way trade to 5 billion euro by 2020


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by increasing partnerships across transport infrastructure, renewable energy, environ-ment, ecological agriculture and tourism.Minh witnessed the signing of a cooperation agreement between the two governments on the establishment of Vietnam-Spain Trade and Investment Inter-Committee, and a deal on the fifth stage of the financial plan on providing financial support for the con-struction of metro line No.5 in Vietnam.http://dtinews.vn/en/news/018/51038/-deputy-pm-chairs-vietnam-spain-business-fo-rum.html

Annual exports to South America expand by 30-40pct


Vietnam's exports to South America enjoy an annual average growth of 30-40 percent with many popular and highly-competitive products, heard a workshop in Hanoi on May 24.Deputy head of the Trade Promotion Department under the Ministry of Industry and Trade Ta Hoang Linh said with a population of over 600 million people and total gross domestic product (GDP) of over 6 trillion USD, South America is a potential market for Vietnamese businesses.At the same time, he highlighted difficulties and challenges facing businesses when entering the market such as geographical distance, transportation cost, cultural and in-stitutional differences.The bilateral trade between Vietnam and Latin America is quite balanced. In 2014, Vi-etnam exported 4.71 billion USD worth of goods to the market, a year-on-year rise of 36.8 percent. vice versa, the country imported 4.8 billion USD from the market, up 44.9 percent.Vietnam mainly exported footwear, seafood, rice, garment-textile, coffee, plastic prod-ucts, electronic equipment and components, and computers, while importing textile-garment and footwear materials, paper, plastic material, cattle-feed, soybeans, and cot-ton.Former trade counsellor of Vietnam in Chile Tran Dinh Van said Chile is one of the leading open economies in the world, and Vietnam's goods face fierce competition by counterparts from the South American region and Asia.Currently, Vietnam has surpassed India and Thailand to become the biggest Asean ex-porter to Chile, ranking ninth among countries exporting to Chile.The free trade agreement between Vietnam and Chile took effect in January 2014, cov-ering 9,000 lines of products.This has created good opportunities for businesses to boost exports to the market.http://en.vietnamplus.vn/annual-exports-to-south-america-expand-by-3040-percent/112222.vnp

Bangladesh in the market for 300,000 tonnes of Vietnamese rice

25/MAY/2017 INTELLASIA| VNEXPRESS

A new deal signed by the two governments should ease the pressure on Vietnam's flagging rice shipments that have fallen to multi-year lows.Bangladesh is looking to buy 250,000-300,000 tonnes of rice from Vietnam, the world's third-largest exporter of the grain, in the near-term to offset a domestic shortfall after extending a government-to-government rice trade pact, the Vietnamese government said.The South Asian nation has extended a memorandum of understanding with Vietnam, under which it promises to import up to 1 million tonnes of rice a year until 2022, Vi-etnam's Industry and trade ministry said in a statement on Tuesday after signing the pact with Bangladeshi minister of Food Qamrul Islam during his Vietnam visit.The pact comes as a relief for Vietnam as rice shipments have been falling to multi-year lows. This is in part due to the Philippines, one of the world's biggest rice buyers and a frequent importer of Vietnamese rice, placing a purchasing cap on rice for three more years. Manila said on Monday it will only allow private traders to import 805,000 tonnes a year until 2020 at a tariff of 35 percent, Reuters reported.After the MoU siging, Bangladeshi officials said their country was ready to import


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250,000-300,000 tonnes of Vietnam's 5 percent broken rice immediately, and invited detailed offers as part of a plan to buy 500,000 tonnes of Vietnamese rice by the year end."Over the past two years, Bangladesh has faced multiple natural disasters that have damaged crops and led to a domestic rice shortage," Vietnam's trade ministry said in the statement.Climate change has been affecting low-lying areas of Bangladesh, where arable land has been lost to saltwater intrusion and agricultural production has been damaged by droughts, floods and storms.Bangladesh stood among the top 25 percent of the world's most hungry countries in 2016, according to the Global Hunger Index compiled by the International Food Policy Research Institute.The Bangladeshi government's request, its first since 2013 and a significant jump com-pared with the 44 tonnes of Vietnamese rice it has purchased so far in 2017, has prompted Vietnamese exporters to halt offers and hold on stocks to wait for prices to rise, traders said."The market has frozen recently due to speculation over demand," a trader in HCM City said.He said nobody was willing to sell the rice grade sought by Bangladesh given that in-dicative export quotations for 5 percent broken rice have been rising so far this month and hit $370 a tonne last week, free-on-board (FOB) basis, from $350-$352 at the end of April.Exporters may agree to sell at $380, the trader said, adding that prices may firm further if Vietnam secures a contract.At $370/tonne, the price is already at its highest since August 2016 but it is still around $30 a tonne cheaper than Thai rice of the same grade, which may give Vietnam a com-petitive edge, traders said.Vietnam's rice exports in the first four months of 2017 fell 10 percent from a year ago to 1.8 million tonnes, the lowest volume for the same period in nine years, based on Vietnam Customs data.http://e.vnexpress.net/news/business/bangladesh-in-the-market-for-300-000-tonnes-of-vietnamese-rice-3589692.html

Vietnam plans to open 'outstanding' special economic zones

25/MAY/2017 INTELLASIA| DAILY TIMES

Vietnam plans to open three special economic zones that offer investors greater incen-tives and fewer restrictions than available to date in the country, the investment min-ister said.Foreign direct investment, largely in manufacturing, has been key to Vietnam's growth. It hit a record of $15.8 billion last year and has risen 6 percent in the first five months of 2017 from a year earlier.The new economic zones will be in the north, centre and south of the 1,650-km (1,000 mile) long country, Planning and Investment minister Nguyen Chi Dung told Reuters in an interview on Tuesday.The ministry is drafting a law for the zones in northern Quang Ninh province, central Khanh Hoa province and southern Phu Quoc province. Approval from lawmakers in the communist state is expected by the end of 2017.Dung said the zones would be free from local regulations to make them competitive internationally."It will be a massive attraction to investment and investment will boom next year," Dung said. "It will be outstanding in everything: free and favourable in every aspect."Vietnam currently has 18 economic zones, offering incentives for investors from free tariffs in selected items to lower personal income tax or reduced rent and fees. There are another 325 state-supported industrial parks, which have fewer incentives.A survey by ANZ Research last year said investors were broadly positive about the in-dustrial parks because of tax incentives and the ease of customs clearance. Occupancy in operating industrial parks is more than 70 percent.


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Vietnam's government this week reiterated its annual economic growth target at 6.7 percent, despite a drop to a three-year low of 5.1 percent in the first quarter. The gov-ernment blamed the low rate on drought, salination issues and a temporary drop in production for Samsung Electronics due to its Note 7 battery woes.Dung said the government was confident of meeting its 2017 growth target given fac-tors including improved weather, solid loan growth, a rise in tourism and rising num-bers of new businesses.http://dailytimes.com.pk/business/25-May-17/vietnam-plans-to-open-outstanding-special-economic-zones

High time for high-tech farming in Vietnam


The government will focus on technology-based agriculture to resolve problems like the lack of value-added products for export, the low competitiveness of Vietnamese farm produce in world markets and inconsistency in quality.Deputy minister of Planning and Investment Dang Huy Dong speaks to Vietnam News Agency about all these issues.Applying science and technology to achieve large-scale production is common in many countries in the region and world. Vietnam also wants to do that. What do you think about it?Development of high-tech agriculture is the right policy and should be done soon. This dovetails with current global trends and will also help Vietnam's agriculture sector re-solve its problems like lack of value-added products for export, low global competi-tiveness of produce and inconsistency in quality.Recently I had the opportunity to visit many high-tech agricultural enterprises and co-operatives in Da Lat in Lam Dong Province. I saw flower and vegetable farms that are equipped with modern equipment and have automatic operation like in Europe. This modern production model has also developed strongly in many cities and provinces in the north and south.However, what direction high-tech agriculture should take needs to be discussed care-fully to ensure sustainable development of local agriculture. This is a big responsibility for government management offices and local authorities.The issues requiring attention include how to created partnerships between links in the high-tech agricultural production chain, who should be given licences to develop large-scale production and the stipulations for enterprises to enjoy the government's support policies.You mentioned building partnerships between links in the high-tech agriculture chain. To be specific, did you refer to partnerships between enterprises and farmers?That is right. In this relationship, farmers are satellite producers and their representa-tive is the cooperative. The cooperative is a legal person and a partner of enterprises. Building a healthy partnership between enterprises and farmers will accelerate high-tech agriculture.Many countries in the world have developed agriculture based on this principle. They have focused on building partnerships between enterprises and farmers, creating a consensus to pool land for large-scale production, have same cultivation models and apply scientific and technological advances for agricultural production. This coopera-tion will increase productivity and ensure quality, improving value addition.I fully support this development method and cooperation between enterprises and farmers is very important.The government plans to give more land to individuals and organisations to develop agriculture and pool lands for large-scale production. However, there are many hur-dles to implementing this plan. What is your opinion about this?The government's policies will benefit agricultural development, especially the wide-spread application of technology in agriculture. The government will create favoura-ble conditions with respect to land and preferential credit for eligible enterprises and encourage them to invest in technology.However, if land is accumulated by private enterprises or a group of people, many


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farmers could lose their lands, leading to instability in society and affect the sustaina-ble development of the agriculture.In many developed countries, they do not accumulate land by changing ownership; in-stead, they pool lands land for large-scale production to enable application of technol-ogy in agriculture.It should be noted that in many cases private enterprises will not use land for agricul-ture and will use it for other purposes. So, the government must carefully consider land policies to harmonise the interests of parties taking part in high-tech agricultural production.What does the Ministry of Planning and Investment do to promote high-tech agricul-ture?To carry out the government's policy on developing high-tech agriculture, the ministry will collaborate with the Ministries of Finance and Science and Technology to efficient-ly carry out programmes and projects under a plan for the development of high-tech agriculture by 2020 under the government's Decision 176/QD-TTg.Besides, the ministry will develop cooperatives under the new model to support large-scale agricultural production and also enterprise development, especially by applying technology in agriculture production.The ministry has linked up with localities to apply high technology in agriculture. The localities know about the need to using high technology in agriculture to increase val-ue addition.Many provinces and cities such as Binh Thuan, Can Tho and HCM City have cooper-ated with the ministry to study their unique farm produce and develop investment promotion programmes to seek funding for those items. The provinces and cities have preferential policies to attract agricultural enterprises with capability and technology.High-tech agriculture is expected to develop strongly in future.http://vietnamnews.vn/economy/talking-shop/377044/high-time-for-high-tech-farm-ing-in-viet-nam.html#iByV7GKo8xJGxQMq.97

Vietnam set to approve coal-fired power plants worth $7.5 billion

25/MAY/2017 INTELLASIA| REUTERS

Vietnam expects to grant investment licences for three coal-fired power plants worth a combined $7.5 billion in early June, the country's investment minister said.Although Vietnam wants to boost renewable energy output amid resources scarcity and environmental issues, it has been mostly reliant on coal-fired and hydro power plants to meet its annual electricity demand growth of around 11 percent.The projects by Japanese, South Korean and Saudi Arabian investors are expected to receive licences ahead of Vietnamese prime minister Nguyen Xuan Phuc's visit to Ja-pan next month, investment minister Nguyen Chi Dung told Reuters on Tuesday.Details provided by the ministry showed South Korea's Taekwang Power Holdings Co. and Saudi Arabia's ACWA Power would invest $2.07 billion for a 1,200-megawatt thermal power plant.Each investor would have a 50-percent stake in the plant and commercial operation is expected to start in 2021.Japan's Marubeni Corp and Korea Electric Power Corp would invest $2.79 billion in a 1,200-megawatt plant, with operation expected to start in 2021. The investors will also share half of the investment each.Japan's Sumitomo Corp would invest about $2.64 billion into a 1,320-megawatt plant, with an expected starting date of 2022, the ministry said.http://uk.businessinsider.com/r-vietnam-set-to-approve-coal-fired-power-plants-worth-75 billion-2017-5

Upbeat signs for Vietnamese rice exports


Encouraging signs for rice exports after a down-period have boosted the Vietnamese rice market.According to the Vietnam Food Association (VFA), the country earned free-on-board (FOB) export value of more than 701 million USD from shipping 1.6 million tonnes of


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rice to foreign countries in the first four months of the year, down 14.2 percent in vol-ume and 10.6 percent in value from the same time last year.However, Vietnamese rice exports recovered somewhat in April after a big slump in the first quarter. Exporters sold nearly 510 tonnes of rice abroad last month on FOB val-ue of 220 million USD, a year-on-year increase of 14.6 percent in volume and 9.75 per-cent in value.VFA Chair Huynh The Nang said that the Philippines plans to import 250,000 tonnes to augment its buffer stock for lean months from July to September.Some exporters have won tenders to supply 40,000 tonnes of the grain for Malaysia. Meanwhile, 40,000 tonnes of Jasmine rice was shipped to Iraq.Also, Bangladesh plans to buy 600,000 tonnes, including 50,000-100,000 tonnes of white rice with the remainder parboiled rice to offset crop damage caused by torrential rains.Lam Anh Tuan, director of Thinh Phat Food Co., Ltd, predicted a bright future for rice exports. He said that the fall in Thailand's rice inventories will help the Vietnamese and global rice trade recover.Furthermore, Vietnamese enterprises are more competitive than their competitors as each tonne of Vietnamese rice sells for 350-360 USD while Thai, Indian and Pakistani rice is purchased at more than 390 USD per tonne, he added.The VFA said that drop in rice price has triggered an increase in the number of rice ex-port contracts.However, enterprises are unsure if the positive signs are enough to significantly boost Vietnamese rice exports, with worries of being unable to meet demand from foreign countries rife.Improving rice quality and building rice brand names will make Vietnamese rice more competitive.http://en.vietnamplus.vn/upbeat-signs-for-vietnamese-rice-exports/112193.vnp

Coffee output to near 2016 yield


The 2017-18 coffee crop is expected to be around 1.4 million, which is equal to or slight-ly lower than last year's crop, according to the Vietnam Coffee and Cocoa Association.Nguyen Nam Hai, the deputy chair of the association, said the annual coffee crop would enter the harvest season in October or November.If the weather is favourable this year, Central Highlands' provinces, which account for more than 90 per cent of the country's coffee cultivation area, will have 1.3 million tonnes of coffee.Last year, the region encountered a severe drought but this year coffee gardens have had enough water for irrigation.But because coffee farms have many old trees, coffee output is expected to remain about the same last year, he said.Coffee prices in the domestic market reached a peak in January when a kilo of coffee sold for VND47,000.The price was VND43,000-VND43,500 a kilo on May 19 depending on locality, a reduc-tion of VND200 from the preceding day.Vietnam's coffee exports in the 2016-17 crop (which ran from October last year to Sep-tember this year) will reach 1.4-1.5 million tonnes, he said.As of April 30, the country exported more than 960,000 tonnes of coffee, he said.According to the Ministry of Agriculture and Rural Development, enterprises export-ed 1.79 million tonnes of coffee for a value of $3.36 billion last year, a year-on-year in-crease of nearly 34 per cent in volume and 24 per cent in value.The average export price was $1,872 a tonne, a reduction of 6 per cent over 2015.The average export price reached $2,267 a tonne in the first quarter of this year, up 33 per cent over the same period last year, according to the ministry's figure.The country earned $1.34 billion from exporting 592,000 tonnes of coffee in the first quarter, an increase of 19 per cent in value but a reduction of 11 per cent in volume.http://vietnamnews.vn/economy/376751/coffee-output-to-near-2016-yield.html


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Vietnam's 2017/2018 coffee output to rise 10 pct on good weather, prices


Good news for exporters with the 2016/2017 crop likely to fall short of expectations.Vietnam, the world's largest robusta producer, is forecast to harvest 28.6 million bags (1.72 million tonnes) of coffee from its next 2017/2018 crop, a rise of 10 percent from the current season, thanks to favourable weather conditions and higher domestic prices, a US Department of Agriculture attache said.Higher output from Vietnam, which stands only behind Brazil in terms of global coffee production, supports an industry view which envisages stable global supply in the next crop year."Adequate rains starting in January through March helped coffee trees trigger more branches and early flowering," the USDA attache said in a May 17 report.High domestic prices have also helped farmers purchase sufficient fertiliser, triggering higher yields even though the total planting area remains unchanged, the report said.Vietnam's coffee crop year lasts between October and September, starting with the har-vest in the Central Highlands region that accounts for around 90 percent of the coun-try's output.While it is still too early to forecast the size of the next harvest, Vietnam's coffee belt has seen favourable weather for production in recent months, said Bach Thanh Tuan, head of the Community Development Centre, a state-backed facility in Dak Lak Prov-ince. The centre is tasked with ensuring sustainable production in the province as well as the entire region."The supply outlook for 2017/18 seems increasingly positive," the London-based Inter-national Coffee Organisation said in its April report, adding that initial concerns about frost in Brazil and a shortage of rainfall in Vietnam have eased.Coffee prices on the domestic market rose to VND47,500 ($2.1) per kilogram on March 21, the highest since September 2011. The price hike coincided with the coffee watering period, during which Vietnamese growers feed fertiliser to their trees.Smaller 2016/2017 cropThe USDA report has revised down its output forecast for the ongoing 2016/2017 crop year by 2.6 percent to 26 million bags, saying extended rain in October-November 2016 had damaged cherries and reduced the quality of beans.Vietnam's coffee exports in the next 2017/2018 crop year are forecast to edge up 0.4 per-cent to 26.65 million bags, the report said. The export volume includes green beans, soluble and roasted coffee.Consumption of roasted, ground and soluble coffee in Vietnam in the next 2017/2018 season is projected to rise 2 percent to 2.93 million bags, the report said.It cited the continuing growth of coffee shops, saying domestic market competition re-mains fierce due to the arrival of foreign brands.Even though Vietnam's coffee exports fell to 2.25 million bags last month, a five-month low, based on Vietnam Customs data, the shipments still helped extend Vietnam's po-sition as the world's biggest coffee exporter, which the Southeast Asian nation seized from Brazil in March.Robusta beans account for most of Vietnam's exports and are used mainly for making soluble coffee.Top producer Brazil shipped a combined 2.13 million bags of arabica, conillon (a vari-ety of robusta), soluble coffee and roasted beans in April, down 13.5 percent from a year ago, the Brazilian Coffee Exporters Council said in a report released earlier this month.http://e.vnexpress.net/news/business/vietnam-s-2017-2018-coffee-output-to-rise-10- percent-on-good-weather-prices-3589513.html

Opportunities for Vietnam's fruits, vegetables export


The global demand for fruits and vegetables is forecast to soar in the near future, af-fording Vietnam a chance to expand to choosy markets such as Japan, the Republic of Korea and the US, as heard a seminar in Hanoi on May 24.On the global market, fruits and vegetables account for over 59 percent of the total and


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are predicted to grow 2.88 percent for the 2016-2021 period, reported the Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD).Nguyen Duc Loc from the IPSARD said the demand for certified produce is growing. Over the past years, Vietnam has strived to improve the quality and hygiene of GAP certified products and issued regional codes for quality ones.However, Vietnam still meets difficulties regarding fruits and vegetables preservation while connectivity between producers and businesses remains loose.A representative from the Pan Group said the government targets restructuring agri-culture towards a growth of 3.5- 4 percent from 2016-2020, with a focus on high-tech farming, but also admitted that the domestic farm produce quality management sys-tem and origin tracking capability remain weak.Nigel Smith, general director of the Fine Fruit Asia, said fruit is gaining the upper hand in regional exports and Vietnam is one of the important partners in Asean.He suggested diversifying fruits and vegetables to ease reliance on China, and devel-oping partnership between businesses, farmers and the government at the regional and sectoral level so that Vietnam's fruits and vegetables could compete well in inter-national market.http://en.vietnamplus.vn/opportunities-for-vietnams-fruits-vegetables-export/112231.vnp

Right approach necessary for private sector to drive Vietnamese economy


The best approach to grow the Vietnamese economy is to create a level playing field in all sectors. For the private sector to become a driver of the economy, several macro- and microeconomic preconditions need to be met.When talking about growing the private sector, microeconomic elements, such as management or marketing abilities, are usually a point of discussion. However, this ar-ticle is only focusing on the macro level and the role of the government, specifically what the government should do to allow the private sector to flourish.Bling picking the cuter pigThe debate on the role of the state-owned and private sectors has been going for the past 10 years. Looking at the arguments, it seems that we are divided between the state-owned and the private sectors. We need the private sector but we also need the state-owned sector. We need to grow the private sector, but we also need to grow the state-owned sector. This is the usual channel of the circular debate.However, in reality, much of the debate is semantics and issues of real substance re-ceive little attention. History shows that government failure, or heavy government in-terference in the market, always leaves worse and harder-to-fix consequences than market failure. Apparently, the government should limit its involvement.In a debate about the role of the state-owned and private sectors in the United States, when asked by the moderator to comment on the role of the state in a market economy, Professor Michael Munger (Duke University) brought up an amusing analogy of a contest to find the cuter of two contestant pigs. Upon seeing the first pig, the judges gasped "This pig is so ugly, let us give it the second prize." Michael Munger argued, the first pig, like the private sector, is ugly, but why pick the second pig (the state-owned sector) as the winner, when nobody has seen it.Now, looking at the Vietnamese state-owned sector, the question is how to restructure and help it achieve the highest efficiency with the right approach that takes into ac-count historical legacy. However, if the argument is that the private sector is too small, and hence state-owned enterprises are needed for the economy to continue to grow, we are repeating the mistake in Professor Munger's analogy.John Stuart Mill, the famous philosopher and economist who argued in favor of mar-ket economy in Principles of Political Economy (1848), contended that lighthouses in England need to be built by the state because the private sector would not collect enough revenue and therefore have no incentive to build them.John Stuart Mill's argument proved inaccurate. At the beginning of the 19th century, in John Stuart Mill's very hometown in England, up to three-quarter of the lighthouses


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were built by funding from families of sailors and non-profit organisations.This story about John Stuart Mill's argument illustrates Professor Michael Munger's analogy. The question is, why do we favour the state-owned sector when we do not know how the market will work?A right approach to grow Vietnam's private sector would be to create a level playing field for all, one that does not lean towards the state-owned sector because the private sector is too small. Certainly, national security and defence-related industries require state oversight, but if we continue to favour the state-owned sector, it will be difficult for the private sector to grow.Macroeconomic stabilisation by all meansWhen discussing the role of the state in a market economy, what is often overlooked is the importance of limiting the state's arbitrary interference, no matter the political system or current situation of the country. The underlying condition to limiting the state's arbitrary involvement is macroeconomic stability. Economist Milton Friedman is known as the fiercest and most extreme defender of the free market. His idea that the government needs to create macroeconomic stability through a central bank's man-agement of the money supply made him famous.When discussing market economy and the government's role, we need to avoid the "deregulation" mistake. It is true that "deregulation," or removing rules and red tapes, gives everyone a fair chance to pursue wealth, but there is a distinction between de-regulation and the inability to manage the economy.The 2008 financial crisis in the US in which monetary policies and banking regulations allowed banks to become "too big to fail" (necessitating government bailout) is an ex-ample of incompetence on the part of the government, not a result of deregulation. The question whether to rescue several commercial banks in Vietnam in recent months re-sembles the banking problem facing the US government.At a closer look, when the government cannot ensure macroeconomic stability, the pri-vate sector will not only thrive in this volatile environment, but it will also be hurt by its. Racing to meet growth targets at all costs will cause a rapid rise in public debts, tax burden, inflation, or interest rates, which will hurt the private sector.Meanwhile, the state-owned sector and the well-connected interest groups will not only avoid these problems, but will also seize opportunities to enrich themselves. Fol-lowing interest rate or gold or real estate bubbles, it is the super-rich that got richer, while small and mid-sized enterprises were further squeezed.To create a level playing field for all sectors, the government needs to find long-term solutions, such as reforming the system or removing and reducing red tapes that are a burden on the private sector, instead of half-hearted solutions targeting one or two in-dustries.Studies show that when the government intervened in specific industries or markets with supportive policies, economic growth was hurt. These policies not only distort the market, but also redistribute resources inappropriately. Rescue packages or stimuli for a few agricultural segments in recent years have left more questions than answers for the goal of sustainable economic growth for the private sector.Private sector and reducing povertyEconomic reforms will create a level playing field for many, but will not necessarily eliminate the informal economy in Vietnam, where small and very small businesses play a key role in reducing poverty.Putting enough resources into growing this informal economy is an important task for the government. The best policy is to give everyone access to resources to do business and earn a living, as well as ensure that property and land ownership is protected so people can have access to credit in the course of doing business.We need to avoid the misconception that the informal economy lacks skill and infor-mation, has low productivity, and therefore needs to be limited. The right approach should be to consider the private sector and the informal sector to be the main drivers of the economy.When the potential of the official economy is strong enough, resources and labour


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from the informal economy will flow in. The private sector will become the main driv-er of growth if we do not forget the informal economy. Otherwise, policies to grow the private sector will lose their effectiveness in the long term.http://www.vir.com.vn/right-approach-necessary-for-private-sector-to-drive-viet-namese-economy.html

Not all SMEs to enjoy lower tax

25/MAY/2017 INTELLASIA| THE SAIGON TIMES

Not all small and medium enterprises (SME) in Vietnam could enjoy a preferential cor-porateincome tax under the draft law on tax support for SMEs, said minister of Planning and Investment Nguyen Chi Dung at the ongoing sitting of the National Assembly on May 23.Dung said SMEs, accounting for 98 percent of enterprises in the country, are identified as an important driving force for the national development by the Party Central Com-mittee in a resolution adopted at its 5th plenum.According to the Standing Committee of the National Assembly, only profitable enter-prises will directly benefit from the law on supports for SMEs.Vice Chair of the National Assembly Phung Quoc Hien explained that the number of profitable entities accounts for 49.4 percent of operating enterprises, thus an estimated 301,300 units, including about 4,160 medium enterprises, 116,920 small enterprises and 173,271 micro enterprises, would benefit directly from these regulations.According to the Standing Committee of the National Assembly, the draft law does not specify the reduction level compared to the current rate of corporate income tax, but it is assumed that the reduction would be 1 percent for medium enterprises, 2 percent for small enterprises and 3 percent for micro enterprises compared to the current tax.The tax cuts are predicted to send State budget revenues falling by about VND1,920 billion (about $84.7 million), including VND103 billion for medium enterprises, VND1,314 billion for small enterprises and VND502 billion for micro enterprises.The draft law stipulates that in each certain period, the government would decide the policy to support credit institutions to increase lending to SMEs.The draft law has abolished the regulations that interfere directly in the operation of the banking system which is not in line with market principles. In particular, the draft law eliminates a provision urging banks to provide loans with interest rates and loan terms consistent with the solvency of the SMEs and the financial situation of the bank.According to Article 11 of the draft law, foreign-invested and state-owned SMEs are not eligible for support in terms of production space.The draft law defines SMEs as micro, small and medium enterprises with an average number of employees covered by social insurance in the preceding year of no more than 200 each.Such SMEs must also meet one of two conditions, namely total capital in the preceding year shall not exceed VND100 billion and turnover in the preceding year shall not ex-ceed VND300 billion.http://english.thesaigontimes.vn/54111/-Not-all-SMEs-to-enjoy-lower-tax.html

Vietnam's shrimp export to Japan sees sharp increase


Vietnam's shrimp exports to Japan in the first quarter of this year increased by 29.6 per-cent year-on-year to reach $135.4 million, making Japan the country's largest shrimp importer.According to the Vietnam Association of Seafood Producers and Exporters (VASEP), shrimp exports to Japan recovered since August 2016 and kept growing until March 2017.The association attributed the rise to changes in tastes of local consumers who now prefer cheaper aquatic products to salmon, tuna and cuttlefish.Demand for different kinds of shrimp among high-end consumers also increased, the association said, noting that all these factors have drawn shrimp businesses to Japan.Although Vietnamese shrimp is sold at a high price of $12 per kilogram on average,


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they are still popular thanks to their improved quality, the association said.Cooperation programmes in agriculture between the two countries have also facilitat-ed Vietnam's shrimp export to Japan, the association added, asking Vietnamese busi-nesses to maintain product quality and prestige.Vietnamese shrimp firms, however, said they still face various difficulties, especially a shortage of raw shrimp.The director of Thien Phu Export Seafood Processing Company Limited said the com-pany is making every effort to ensure material supply by connecting with shrimp farms which follow GlobalGap standards, covering a total area of 500 ha in the Me-kong Delta province of Bac Lieu.VASEP forecast that Vietnam's shrimp export turnover in 2017 will amount to about $3.4 billion, up 9 percent year-on-year, of which export value of white-leg shrimp is ex-pected to edge up 8 percent to hit about $2 billion.http://english.vov.vn/economy/vietnams-shrimp-export-to-japan-sees-sharp-in-crease-350210.vov

Australian delegation visiting in search of energy cooperation


A delegation of sixteen Australian energy firms is visiting Vietnam to meet with rep-resentatives of the domestic energy industry and to participate in Vietnam-Australia Energy Forum in Hanoi to find business opportunities."Vietnam is an important partner to Australia in the Asean region. The two countries share a number of common interests, including energy development and security," said Craig Chittick, Australian Ambassador to Vietnam, at the forum organised by the Australian government in collaboration with the Ministry of Industry and Trade (MoIT)."Energy security continues to be an economic priority for Australia and Vietnam. Aus-tralia is among the top coal exporters in the world and in the future years will be the world's largest liquefied natural gas (LNG) exporter," he added.Coal mining in Australia is an increasingly sophisticated and hi-tech activity. Contin-uous improvements in mining technology, occupational health and safety, and envi-ronmental performance have ensured that Australia is an efficient and reliable producer of high-quality thermal and metallurgical coal for the international market.Janelle Casey, Trade Commissioner at the Australian Embassy said, "Australian com-panies have contributed to the transformation of the electricity market. This has been achieved through effective market design, enabling technologies, commercial energy solutions, and an attractive investment mechanism."Vietnam has been developing mechanisms and policies to transit from fossil fuel to clean energy and renewable energy alternatives, to create a low-carbon and environ-mentally friendly economy. Simultaneously, Vietnam's power market has also been developing to gradually enhance the competitiveness and transparency of electricity activities and create a positive signal to attract investment in developing new power resources.Nguyen Anh Tuan, director general of MoIT's Electricity Regulatory Authority, said that, "Australia's strengths in the energy sector are in line with the needs of Vietnam in ensuring energy security as well as protecting the environment. So the potential for ex-panding the two country's cooperation in the energy sector is very positive."http://www.vir.com.vn/australian-delegation-visiting-in-search-of-energy-coopera-tion.html

HCM City's retail space strongly differentiates


In the first months of this year, the average rent of retail space in HCM City increased slightly by one percent compared to the previous quarter while the projects located in the Central Business District (CBD) continued to increase positively or have stable price, according to Savills Vietnam's report.Meanwhile, CBRE Vietnam's Q1 data also showed that shopping centers outside the CBD saw rents falling five percent quarter-on-quarter. These types of retail space are


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gradually receiving little interest from tenants.Colliers International's latest research shows that in the first three months of the year, the position of retail space continued to be a big determinant for the ability to attract tenants as well as position rents. A newly opened shopping centre that occupies six storeys of a luxury apartment project in District 3, the heart of HCM City, with 12,000 square meters of retail space has quickly gained the special attention of tenants.As much as 35 percent of tenants come from familiar catering industries such as Star-bucks, King BBQ, HotPot, Lotteria, etc. This shopping centre also welcomes the key tenant in the basement i.e. Bon Grocer. This is the first commercial centre of RomeA retailer in Vietnam. The offer rate in District 3 amounting to $80/m2/month raised the average asking rents of shopping malls in this area.As per Colliers International's statistics, the retail space rents at some of the ground floors in Caravelle, New World, Continental Saigon which are located in the heart of Saigon is less than $100/sqm/month.According to market data of Jones Lang LaSalle (JLL) Vietnam, retail space rents hav-ing the primmest location in the downtown of HCM City reached $120-130 per square metre per month. This price is three times higher than the average rent of retail space of the entire market ($46.3/m2/month).As per the forecast of consultancy units, the number of medium and high-end consum-ers will increase 1.7 times in 2020 and the rapid increase in many major cities will be the major factor in the consumption of comfort products. This customer group will lead the change towards a modern shopping model, which will make Vietnam become a very attractive market for foreign brands. As more international retailers promote their plans to enter the domestic market, the demand for retail real estate in HCM City will continue growing strongly.Colliers International's representative said that the huge supply of over 600,000 m2 of floor space from 19 projects is expected to enter HCM City market from now until the end of 2018. The retail area offered to serve the shopping needs of residents in the com-plex is growing rapidly. Large-scale commercial centers will move to suburban dis-tricts due to limited land area in the CBD, so abundant supply, rents and occupancy rates will tend to decrease in the next two years.

Assembled-in-Vietnam cars are twice as expensive as Thailand's

25/MAY/2017 INTELLASIA| VIETNAMNET

Car prices in Vietnam are nearly two times higher than in other countries in the region such as Thailand and Indonesia, and much higher than in countries with developed automobile industries such as the US and Japan.In the latest report about the auto industry development, the Ministry of Industry and Trade (MOIT) said the industry contributes billions of dollars to the state budget and helps reduce the trade deficit, while it creates 120,000 direct jobs.By 2016, Vietnam had 173 automobile manufacturers and assemblers, of which 56 en-terprises make cars from separate parts and 117 make products from base vehicles. Most of them have small scale operation.MOIT admitted that the automobile industry still cannot meet the requirements of a real automobile production industry as most of them do simple assembling.Their production lines mostly undertake four works - welding, painting, assembly and inspection.MOIT also pointed out that the car prices in Vietnam are still higher than in other re-gional countries. They are nearly two times higher than in Thailand and Indonesia, and much higher than the US and Japan.This is attributed to high taxes and fees, and to the low domestic cumulative yield (en-terprises' output is far lower than the designed capacity). The quality of domestically assembled cars is still lower than imports despite the considerable improvement re-cently.MOIT has admitted the failure in the attempts to increase the localisation ratio in less-than-9-seat cars. Vietnam hoped to see the localisation ratio of 40 percent by 2005 and 60 percent by 2010. However, at present, the figure is just 7-10 percent.


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Thaco, a Vietnamese owned enterprise announced the localisation ratio of 15-18 per-cent, while Toyota Vietnam, a joint venture with Japan, reported the localisation ratio of 37 percent for Innova model.It is estimated that enterprises have to import $2-3.5 billion worth of components to serve tdomestic assembling."The locally made content level in the products made in other regional countries is higher than Vietnam, at 65-70 percent, while it is 80 percent in Thailand. So, if domestic manufacturers don't have effective solutions to increase the localisation ratio, they won't be able to compete with foreign products in the context of Afta," the MOIT report said.However, though many experts have advised to give up the dream of developing the automobile industry, MOIT persists in developing the industry.The ministry has set up an inter-ministerial taskforce to give comprehensive assess-ment of the Vietnamese automobile market. The taskforce has had working sessions with enterprises on the production plans of every enterprise in the 2018-2020 period.MOIT is considering applying safeguard measures when necessary (imports increase too sharply) to protect local production.http://english.vietnamnet.vn/fms/business/178815/assembled-in-vietnam-cars-are-twice-as-expensive-as-thailand-s.html

Hometel property segment promises big profits, big challenges


Though hometel properties are new in Vietnam, the segment is well known as a prof-itable business model as investors can make high profits when reselling or leasing.This is expected to be an attractive investment channel in Vietnam in the time to come.The Vietnamese real estate market has recently witnessed the boom of many 'hybrid' products officetel, condotel and hometel.At first glance, hometel is just like condotel, because hometel is also a hybrid product between 'home' and 'hotel', while it is similar to condotel, a hybrid between 'condo' and 'hotel'. However, in fact, hometel is different from these.Hometel has all basic features of a high-end apartment that serves as long-term accom-modation for the owners. In addition, hometel has all 5-star services and amenities, so it can ensure comfortable lives for the owners, while it can be re-leased if the owners want.Hometel buyers have long-term ownership for hometels and they have land use right certificates, or a 'red book' as called by Vietnamese.Meanwhile, condotel owners only have ownership for up to 50 years. The other impor-tant difference between condotel and hometel is that the owners of hometels can de-termine the lease plans and they don't have to share profits with investors.In other words, hometel owners have permanent ownership over their properties, while they can make decisions themselves to make profits with the assets.However, hometel also has disadvantages. Investors will have to operate and manage the leasing themselves.Therefore, they need to have good knowledge and skills to manage the assets. While condotel and officetel owners can foresee profitability of their investments, hometel owners cannot.The other disadvantages include limited access to bank loans, interest rate unpredict-ability, the lower-than-expected income and cash flow interruption when making pay-ment for bank loans.Nguyen Van Duc, deputy general director of Dat Lanh Real Estate, said the capital flow to the real estate market, especially to the high-end segment, has been tightened with Circular 06 officially taking effect in 2017.This will have direct impact on the scale, conditions and interest rates of bank loans reserved for the high-end segment, including hometels.He said the interest rate has been stable, but no one can say for sure how the interest rate will perform in upcoming years. Therefore, an interest rate risk always follows in-vestors.


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The Vietnam Real Estate Association's secretary general Tran Ngoc Quang comment-ed that investors understand they have to accept risks when they are the pioneers.However, research and experience show that hometel is a promising business model.http://english.vietnamnet.vn/fms/business/178824/hometel-property-segment-prom-ises-big-profits--big-challenges.html

Vietnam luxury hotel market becomes 'hotspot' in SE Asia


As luxury hotels prosper, more and more investors are pouring capital into the sector.The high growth rate in the tourism sector and strong investment growth in Vietnam has created a new momentum for the hotel service sector, helping it gain a new record revenue of $15 billio.In 2016, Vietnam served 10 million travellers, an increase of 26 percent over 2015. The tourism sector made up 6.6 percent of GDP, while the figure is expected to increase to 10 percent in 2017.Foreign travellers coming to Vietnam in tours mostly book 4-5-star hotels. Experts pre-dicted that with big cultural and social events to take place, including the Fireworks Festival and Apec Summit, Vietnam may see a hotel room rate deficiency.According to CBRE, the indexes of both the hotel room rate and hotel room revenue in Vietnam both increased in 2016. The hotel room occupancy rate in Hanoi was 75 per-cent, rivaling the Number 1 position with Bangkok of Thailand, while it was 65 percent in HCM City.A Savills Vietnam report shows that in the fourth quarter of 2016, though the hotel room supply increased by 5 percent quarterly, the room occupancy rate rose by 4 per-centage points yearly. It is expected that in 2017, Da Nang would have nine 4-5-star ho-tels with 2,200 rooms to join the market.JLL has recorded a series of hotel M&A deals in 2016. One of them was the Mapletree purchase of Kumho Asiana Plaza from Kumho Industrial and Asiana Airlines in a deal worth $215 million.The other big affair made in the year was the transfer of Duxton Hotel Saigon from Low Heng Huat to New Life RE, worth $49.4 million.JLL predicted that many large M&A deals would be made in 2017.The prediction that about 200 sea tourism projects would be licensed in 2016-2030 has caused analysts to believe that the resort real estate, tourism service, restaurant and hotel markets would be bustling with the expected arrivals of many international hotel brands.Vietnam, for example, has seen many Japanese brands such as Rounte Inn Group, Su-per Hotel, Kuretakeso and Azumaya Hotel with a series of hotel chain projects in Ha-noi, Da Nang and Hue.Starwood has announced that it would open six new resorts and hotels in Vietnam.Route Inn Group from Japan last April put Grandvrio City Da Nang, a 4-star hotel, into operation. The VND400 billion hotel is expected to be the first that the Japanese hotel group will launch in the mid-end hotel segment.http://english.vietnamnet.vn/fms/business/178825/vietnam-luxury-hotel-market-be-comes--hotspot--in-se-asia.html

Worries loom as international arrivals seen surging


The local tourism sector will likely see a strong upsurge in international tourist arrivals this year, but some are of the opinion that the sector should attend more to quality im-provement instead.Addressing the National Assembly session in Hanoi on May 22, deputy prime minister Truong Hoa Binh said the government has set a goal of achieving a 30 percent rise in international arrivals in 2017. If the target is realised, the country would welcome some 13 million international visitors this year, up from 10 million last year.However, even some industry players are worried about overheated development given the poor preparedness in terms of both human resources and infrastructure. They stressed the quality of services and tourism staff needs improving for sustainable


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SVietnam finance & business 25 May 2017

development.Nguyen Quoc Ky, general manager of tour operator Vietravel, said higher tourist numbers would cause many problems such as shortages of tour guides and hotel rooms, and a possible fall in service quality. The lack of hotel rooms in Nha Trang in the upcoming summer holiday, for example, needs thorough consideration to better respond to the high growth of tourist arrivals, and supporting services need improve-ment.Ky cited the so-called "zero-dollar" tours in Vietnam as example, saying the unchecked development had caused huge injury for the tourism industry as many tour operators had failed to develop services and secured sufficient tour guides to serve a strong surge in tourists from China and South Korea. Consequently, foreign tour operators have jumped in, leading to lost revenue for Vietnamese firms.Ky also underscored the importance of human resource and service development, which have been left unattended to.At present, localities have expressed the desire to develop tourism and attract as many tourists as possible, but they have not developed tourism services and anticipated the pressure of a large number of visitors on local infrastructure.Phu Quoc is an example to this effect. Numerous hotel and resort projects have been licensed on the island off Kien Giang Province, but operators of these hotels and re-sorts are struggling with many difficulties such as human resource shortages and waste treatment problems.Nguyen Duc Quynh, deputy general manager of Furama Danang Resort, told the Dai-ly that the tourism sector should improve the quality of products and services instead of target visitor numbers.http://english.thesaigontimes.vn/54119/Worries-loom-as-international-arrivals-seen-surging.html

BIZ NEWS

Business Briefs May 25, 2017

25/MAY/2017 INTELLASIA |

* Thanh Nam Group Company (TNI) will float 21 million shares on the Hochiminh Stock Exchange on May 29 at the reference price of VNDI0,900 each.Founded in 2004, TNI is active in steel, stainless steel trading and metal processing services. In 2016, TNI saw its revenue slumping 45 percent from the year earlier atVND709 billion but its profit rose 15.4 percent to VND12.7 billion due to a sharp fall in costs. This year, the firm looks to attain revenue of VNDI trillion andafter-tax profit ofVND20 billion.* LienVietPostBank yesterday approved a VND 500billion investment to buy bonds is-sued by Saigon Thuong Tin RealEstate Company (SCR). The debt comes with a term of 42 months.* City Auto Company (CTF) will debut on the HCM City market on May 30, offering 18 million shares at the referenceprice of VND12,OOO each. As an authorised dealer of Ford Vietnam, CTF has char-tered capital of VND180 billion with 58.33 percent of it owned by New City Group, a the distributor of Land Rover, Jaguar, Maserati and Volkswagen car brands in Vietnam. In the first quarter of 2017, CTF got.VND806.6 billion in revenue and VND1.9 billion in after-tax profit,up 9.1 percent and down 54.4 percent year-on- year respectively.* Mobile World Investment Corporation (MWG) released its preliminary results in the first four months of 2017, with revenue growing 62 percent year- on-year at VND20.7 trillion, and after-tax profit soaring 30 percent at VND723 billion. These results were driven by solid same-store- sales growth, aggressive store openings, contribution of stores opened in 2016 and 92 percent growth in online sales. Between January and April, MWG opened 50 new 'I'h eg io'i did o ng mobile phoneshops and 102 new DienmayX- ANH home appliance stores, bringing the total to around 1,000 and 358 respectively, said Viet Capital Securities Company.

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* The Hanoi Stock Exchange has issued regulations to classify enterprises listed on the market for unlisted public firms, or UPCoM, to help investors keep track of business quality. There will be the UPCoM Large table with enterprises having equity from VNDI trillion, the UPCoM Medium with firms having equityfrom VND300 billion to less than VNDI trillion and the UPCoM Small with those from V DI0 billion to below VND300 billion. The tables will also have theirown indexes.

All main indexes close higher


All main indexes on Vietnam's stock market gained ground on May 24.On HSX, the VN Index increased 1.81 points (0.24 per cent) and the VN30-Index 9.66 points (1.36 per cent).On HNX, the HNX-Index rose 1.07 points (1.16 per cent) and the HNX30-Index 1.4 points (0.82 per cent), while the UPCoM-Index fell 0.71 points (1.22 per cent).Liquidity on HSX reached VND4.5 trillion ($198.4 million), more or less the same as yesterday, and on HNX was VND681 620 billion ($30 million), 10 per cent higher.The VN Index opened at 740.93 points and eased to 739.8 points in early trade before falling to its bottom of the day of 737.4 points. It then fluctuated and increased strongly to close the session at 743.2 points. It reached its peak of the day of 744.2 points in the beginning of the afternoon session before falling and closing at 742.74 points.In food and beverages, SBT and KDC increased 6.2 per cent and 0.7 per cent, respec-tively. BHN and VNM closed at their opening price while SAB and MSN lost 1.6 per cent and 1.4 per cent, respectively.All banking large caps closed higher, with MBB hitting its ceiling in increasing 6.8 per cent, while BID rose 3.8 per cent, CTG 2.9 per cent, VCB 1.5 per cent, EIB 1.3 per cent, and STB 1.2 per cent.In energy, PLX lost 2.6 per cent, CNG 1.5 per cent, GAS 0.2 per cent, and PGD 0.2 per cent.In real estate, QCG and FLC increased 3.7 per cent and 1.4 per cent, respectively, KDH closed at its opening price, and NVL fell 1.2 per cent, VIC 0.9 per cent, and KBC 0.3 per cent.Among other large caps, HPG increased 1 per cent and FPT 0.5 per cent. ROS lost 5.6 per cent, BVH 0.7 per cent, and VJC 0.6 per cent.ROS saw the highest liquidity on HSX, with VND771 billion ($34 million), followed by BID with VND181 billion ($8 million), HBC with VND175 billion ($7.7 million), and VNM with VND106 billion ($4.6 million).On HNX, ACB and SHB increased 2.9 per cent and VCG and PVS 0.6 per cent. PVI, VNR and VND closed at their opening price while PHP fell 2.5 per cent, NTP 1.3 per cent and VCS 0.9 per cent.Foreign investors net sold on HSX by VND191 billion ($8.4 million) and net bought on HNX by VND25 billion ($1.1 million).http://vneconomictimes.com/article/banking-finance/all-main-indexes-close-higher

Shares rebound on financial stock recovery


Shares rebounded on the two exchanges on Wednesday, with many large-cap stocks, especially financial stocks, recovering.The benchmark VN Index on the HCM Stock Exchange was up 0.31 per cent at 743.22 points.On the smaller Hanoi Stock Exchange, the HNX-Index edged up 0.82 per cent to 92.66 points.Financial stocks regained their strength, especially bank shares, following a brief fall on Tuesday.Eight of nine listed lenders advanced and only one remained unchanged.Military Bank (MBB) hit the maximum rise of seven per cent allowed for a single trad-ing session on HCM City's exchange. Others advanced by 2-3 per cent.Shares of securities firms also increased, including big names such as Saigon Securities


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Inc (SSI), HCM Securities Corp (HCM) and BIDV Securities Co (BSI).Twenty one of the top 30 largest shares by market value and liquidity on the main bourse in HCM City's market gained value and eight tumbled.A total of nearly 167 million shares worth a combined VND3.34 trillion (US$147 mil-lion) were traded on the two markets.Afternoon trade starts at 1pm.http://bizhub.vn/markets/shares-rebound-on-financial-stock-recovery_286350.html

Petrolimex enjoys huge benefits through treasury stock sale


The Vietnam National Petroleum Group (Petrolimex) has announced that it sold all 20 million registered treasury shares at transaction value five times higher than par value.According to the group, the shares were purchased at an average price of VND50,553 (US$2.22) each from May 4-23 through transactions at the Ho Chi Minh Stock Ex-change (HoSE)Currently, Petrolimex owns more than 135 million treasury stocks.The state-owned group has charter capital of approximately VND13 trillion (US$571 million).Its market value is estimated at VND73.3 trillion (US$3.2 billion), ranking fifth among the biggest enterprises on the Vietnamese stock market.Petrolimex aims for year-on-year profit growth of 10 percent this year.Last year, the group generated approximately VND123.2 trillion (US$5.4 trillion) in revenue and VND5.2 trillion (US$229 million) in after-tax profit, up 50 percent from 2015.http://english.vov.vn/economy/petrolimex-enjoys-huge-benefits-through-treasury-stock-sale-350199.vov

More than 1,000 investors register for Viglacera auction


Investors register to purchase 314.33 million shares, with only 120 million up for grabs at HNX auction on May 29.The Hanoi Stock Exchange (HNX) has announced the results of registrations to pur-chase Viglacera Corporation (VGC) shares at auction. There will be 1,026 investors participating in the auction, including 78 institutional investors and 948 individual in-vestors.The total volume of shares registered to purchase was 314.33 million; 2.6-times higher than the 120 million offered. Seventy-eight institutional investors registered to buy 247 million shares and 948 individual investors registered to buy 67.29 million shares.The auction will be held at 8.30am on May 29 on HNX. The starting price is VND12,300 ($0.54) per share, equivalent to a total value of about VND1.5 trillion ($66 million).Viglacera has 307 million outstanding shares (equivalent to charter capital of VND3.07 trillion ($135.3 million)) and has listed 65 million on HNX. At the close of trade on May 23, VGC was priced at VND17,400 ($0.77). The number of shares offered for sale at this time is equivalent to 39 per cent of total outstanding shares.Viglacera's Management Board said that the company would issue an employee share ownership plan (ESOP) in October, expected at 5 per cent. The shareholding of the Ministry of Construction will therefore only be about 54 per cent by the end of this year. By 2019, Viglacera will increase its capital by VND259 billion ($11.4 million), to VND4.74 trillion ($208.9 million), reducing State ownership to 51 per cent.According to its consolidated business results for the first quarter of this year, Viglac-era recorded after-tax profit of VND199 billion ($8.8 million); almost double the result in the first quarter of last year.http://vneconomictimes.com/article/business/more-than-1-000-investors-register-for-viglacera-auction

Kido completes Vocarimex stake acquisition


Kido Corporation (KDC) on May 23 announced the completion of its acquisition of nearly 32.9 million shares from Vietnam Vegetable Oils Industry Corporation, also


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known as Vocarimex with the stock code VOC.This deal has made Kido one of the major players in the cooking oil industry of Viet-nam. With the acquisition of nearly 32.9 million shares, equivalent to 27 percent of Vo-carimex's chartered capital, Kido is now the largest shareholder of this business, with a majority stake of 51%. This stake purchase had been pursued by Kido for about three years.With a controlling stake in Vocarimex, Kido also holds stakes in many large oil com-panies in the country. It is because Vocarimex is a leading player in the edible oil in-dustry, with a network of subsidiaries and affiliates with a large market share such as Tuong An Cooking Oil Joint Stock Company (TAC), Cai Lan Oils and Fats Industries Company, Golden Hope Nha Be Edible Oil Company, and Tan Binh Vegetable Oil Joint Stock Company (Nakydaco).Kido now directly and indirectly owns 92 percent of Tuong An, a leading enterprise in the cooking oil market with annual revenue of about VND4 trillion.Tuong An has two factories, with one in Ba Ria-Vung Tau Province and the other in Nghe An Province, plus a strong distribution network. CEO Tran Le Nguyen of Kido is now board chair of this company.As such, Kido has quickly secured a major share in the edible oil and refrigeration sec-tors via M&A only three years after its withdrawal from the confectionery industry.In the refrigeration industry, Kido Foods (KDF) takes charge of the frozen food divi-sion of Kido. KDF has a plant in HCM City and another in Bac Ninh Province with a designed capacity of 50 million litres per year, including 25 million litres of ice cream and 25 million litres of yogurt.After more than 13 years of development, KDF now holds the largest share of the local ice cream market with 35 percent (2016 data). Before its transformation into a joint-stock company in 2016, KDF operated as a limited liability company wholly owned by Kido.After the plan to launch KDF shares on the stock market in 2017 is actualised, Kido will keep a 65 percent stake in this company.http://english.thesaigontimes.vn/54115/Kido-completes-Vocarimex-stake-acquisi-tion.html

Vietnam's 10 years in WTO through expert's glance


Looking at Vietnam's achievements in several areas, including economic growth pace, the country's belief in the renewal process has been a success. Former general director of the World Trade Organisation Pascal Lamy made the remark during an interview with Vietnam News Agency.Ten years after it became a member of the WTO in 2007, Vietnam has made significant progresses, including economic growth, foreign investment attraction, import-export, and tourism, among others.According to Pascal Lamy, trade exchange and international relations have expanded as a result of the DoiMoi (renewal) policy. Through the country's open door policy, many enterprises have grabbed a bigger share.However, he added in the context of international integration, many challenges await Vietnamese enterprises.Lamy said that to grow more, Vietnam needs to invest more in infrastructure and lo-gistics.He also said Vietnam needs to intensify product quality standard to meets world mar-ket standards, which could pressure the country's enterprises. However, if the country was determined to follow international standards for its products, it will be an oppor-tunity to lift the country's economy.http://en.vietnamplus.vn/vietnams-10-years-in-wto-through-experts-glance/112246.vnp


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Prime minister welcomes Siemens CEO


Prime minister Nguyen Xuan Phuc lauded Siemens AG's cooperation with Vietnam in various fields during his reception in Hanoi on May 24 for Joe Kaeser, President and CEO of the German group.The PM hoped Siemens increases comprehensively collaboration with Vietnam in service, production, investment as well as in areas that Vietnam obtains high export turnover, so Siemens's initiatives in the fourth industrial revolution can be transferred strongly in Vietnam.He highlighted Vietnam's advantages such as a gateway to the Asean market and the country's engagement in 12 free trade agreements with major partners in the world, saying that Siemens AG can access a wide market through Vietnam.For his part, Kaeser said he had several meetings with Vietnamese partners, during which the two sides discussed the possibility of transport infrastructure development like construction of airports and expressways.Transport infrastructure development is the premise for industrialisation and mod-ernisation, he added.After a meeting with PM Phuc in Davos, Switzerland, early this year, Kaeser expressed his wish for continued cooperation in order to boost the fourth industrial revolution's development in Vietnam.He said Siemens is willing to assist personnel training and promote cooperation with Vietnam in such fields as energy and information technology.http://english.vov.vn/economy/prime-minister-welcomes-siemens-ceo-350223.vov

MoIT proritises letting Dung Quat Shipyard go bust


Ministry of Industry and Trade report to National Assembly states it is prioritising al-lowing the shipbuilder to go bankrupt.In a report sent to National Assembly delegates, the Ministry of Industry and Trade (MoIT) said it is prioritising the bankruptcy option for Dung Quat Shipyard (DQS), one of 12 loss-making projects belonging to the ministry, foreshadowing losses in the hundreds of millions of dollars for PetroVietnam.There were three options considered for the shipbuilder in the report: an ownership conversion through valuation, auction of assets and liabilities, and allowing it declare bankruptcy or restructuring the company."Based on careful consideration regarding lawful matters and the actual situation, MoIT proposes prioritising the bankruptcy option for DQS in accordance with the law," the report stated.Plans for ownership conversion through valuation or an auction of assets and liabili-ties may still be considered if investors meeting requirements are identified, the min-istry noted.Originally a wholly-owned subsidiary of Vinashin, which went belly up in 2012 and was renamed the Shipbuilding Industry Corporation (SBIC) in 2013, DQS came under PetroVietnam's umbrella in July 2010, shortly before being tasked with several ship-building projects and eventually descending into extreme debt.According to financial statements as at June 30, 2010, the shipbuilder had charter cap-ital of VND3.76 trillion ($165.8 million) and total losses of VND7.44 trillion ($328 mil-lion), including bank loans of VND4.8 trillion ($211.6 million), 70 per cent of which were in foreign currencies.After taking over the management of DQS, PetroVietnam pumped VND5.1 trillion ($224 million) into the company, including charter capital of nearly VND2 trillion ($88 million) and VND3.1 trillion ($136 million) for paying its debts. These contributions, though, will be irrecoverable if the shipyard goes bankrupt.Figures from MoIT show that by the end of June last year, DCS's total debts were VND6.89 trillion ($307.6 million), accumulated losses VND3.68 trillion ($164.3 mil-lion), and negative equity VND1.18 trillion ($52.7 million).As at the end of last year, most equipment at DQS was backward, inappropriate, and failed quality requirements for manufacturing and production processes, resulting in


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a large annual depreciation cost for the shipbuilder, according MoIT's assessment.The shipbuilder still has three large loans pending: one of VND490 billion ($21.6 mil-lion) from the Vinashin Finance Company (VFC), one of VND528 billion ($23.3 mil-lion) from the Vietnam Development Bank (VDB), and one of VND548 billion ($24.2 million) from YMC-Transtech, a DQS contractor.In an earlier proposal sent to the government, MoIT suggested a fourth option: return-ing the shipbuilder to SBIC's management.http://vneconomictimes.com/article/business/moit-proritises-letting-dung-quat-ship-yard-go-bust

Can Tho wants more firms, jobs


Solutions to develop nearly 7,000 new enterprises by 2020 were top of the agenda of a meeting organised by Can Tho City's People's Committee and relevant agencies on Tuesday.Can Tho City, currently, has more than 6,900 enterprises with total registered capital of VND55.5 trillion (US$2.47 billion), creating jobs for over 101,500 workers. On aver-age, each enterprise has registered capital of over VND8 billion.To carry out government's Resolution 35, Can Tho City targets to have 13,800 enter-prises by 2020. Of the total, 6,900 enterprises will be newly-established and some 20-25 per cent of them will apply high technologies in production.The enterprises are expected to help increase the contribution of enterprises to the city's Gross Regional Domestic Product (GRDP) to 50-60 per cent and create over 210,000 employees of whom 40 per cent will be female.Last year, there were 1,100 enterprises set up in Can Tho City and more than 400 en-terprises were established in the first four months of 2017. Thus, from now until the end of 2020, to achieve the set target, each year, Can Tho City needs some 1,700 newly-established enterprises.Nguyen Phng Lam, deputy director of the Vietnam Chamber of Commerce and Indus-try's Can Tho branch, said that for developed countries, for every 10-15 people, there is one enterprise, but in Vietnam the ratio is 1:248.In the Mekong Delta region, the ratio of enterprises to the population is only half that of the whole country, which is some 450 people per enterprise, but Can Tho City, with more favourable conditions, has some 250-300 people per business.Lam said the city's target of new businesses by 2020 is achievable, provided that the city continues to improve its investment climate, including its provincial competitive-ness index.According to Lam, among Mekong Delta localities, Can Tho City currently has the best conditions for business development, but the city still lacks leading enterprises to cre-ate a driving force for small and medium-sized businesses.In the long term, Can Tho needs to focus on developing startups, meaning businesses with new innovations and creativity, rather than establishing new ones in the normal sense, Lam stressed.Besides this, the city should also pay attention to seeking investment from businesses from other localities, such as from HCM City, Lam said, adding that the municipal au-thorities need to create good conditions for university graduates to start their own business.Tran Quoc Ha, director of the State Bank of Vietnam's Can Tho branch, said the city's information e-portal should set up a forum for startups, providing information about the city's startup policy so that all individuals know and participate.The city also needs a resolution served as the basis for implementing its startup plan, Ha said, stressing the importance of having a very specific policy for commercial banks to join hands in the programme.Can Tho also needs concrete policies and directions to develop enterprises in the fields of information technology and automation, Ha added.Nguyen Van Hong, director of the provincial Department of Planning and Investment, said the city could reach the target of newly-established enterprises, but the number of


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new businesses set up according to the nature of startups i.e. be creative and apply new technologies is not many.This is the most challenging issue that Can Tho City and many other places in the Me-kong Delta are facing, Hong said.http://vietnamnews.vn/economy/377073/can-tho-wants-more-firms-jobs.html

Dong Nai attracts $483 million in FDI


The southern province of Dong Nai has attracted around $483 million in foreign direct investment (FDI) in the first four months of this year, which is funding 26 new and 38 existing projects.The FDI projects' investors are spread across 45 countries and territories, mainly from Asian countries such as South Korea, Japan, Taiwan (China) and Singapore, the pro-vincial Department of Planning and Investment said. Some funds have come from the British Virgin Islands and Germany as well.Both Pou Phong Vietnam Ltd Co, which has invested in a $55 million project, and Powerknit Vietnam Ltd Co, which has launched a $60 million project, have got funds from the British Virgin Islands. Long Thai Tu fabric company from Korea contributed another $50 million to its ongoing project in the province.The department said all projects are in the high technology and support industry, which need limited labourers and cause no environmental damage.Dong Nai is now home to 1,692 projects worth $30. 8 billion, including 1,275 projects worth $25.9 billion.In 2017, so far, 15 domestic-funded projects with a total investment of VND6.92 trillion ($3.04 billion) have received licences. Another VND604 billion has been injected into five ongoing projects.Read more at http://vietnamnews.vn/economy/377029/dong-nai-attracts-483 million-in-fdi.html#i7iM9TFALBHgeVQ2.99http://vietnamnews.vn/economy/377029/dong-nai-attracts-483 million-in-fdi.html

Thai Binh 1 thermal power plant joins national grid


The first turbine of Thai Binh 1 thermal power plant in the northern province of Thai Binh began supplying power for the national grid on May 23, according to the Electric-ity of Vietnam (EVN).Work on the plant, located in My Loc commune, Thai Thuy district, began in February 2015. It costs a total of over VND26.5 trillion (US$1.17 billion), of which 85 percent comes from the official development assistance (ODA) of the Japan International Co-operation Agency and the rest is funded by EVN.Comprising two turbines with a combined capacity of 600 MW, the plant is expected provide nearly 3.3 billion kWh every year once operational.The plant plays a significant role in ensuring electricity for socio-economic develop-ment and industrialisation in Thai Binh province and its neighbouring localities.http://english.vov.vn/economy/thai-binh-1-thermal-power-plant-joins-national-grid-350195.vov

Enterprises want a level playing field


Phan Duc Hieu, deputy director of the Central Institute for Economic Management talks to the Kinh te & Do thi (Economic & Urban Affairs) newspaper about private en-terprises' recent meeting with prime minister Nguyen Xuan Phuc in Hanoi.Do you have any comments on the prime minister and other cabinet members' mes-sages to enterprises at the May 17th conference?A key message delivered by the prime minister and other cabinet members was their determination to put the government's commitments into practice.In my opinion, those commitments have consolidated enterprises' firm confidence in the government's commitment to help them feel at ease in their investment and busi-ness development.What do you think about the impact of the government's Instruction No 20 promising


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that from now on each enterprise will only be inspected once a year?One of the costs that enterprises have to bear is the time they have spent receiving management agencies. So, under the government's instruction, each enterprise receiv-ing just one inspection or audit from a government agency is a positive step. It will help enterprises have more time to focus on their business and think about plans to de-velop their production. I'm confident that the prime minister's instruction will have positive impacts on the business community. At the same time it will consolidate their confidence in the government's leadership.The atmosphere of the conference was not as heated as in previous years. Was a reason for this the improvement of the business climate?This is a strong indication of support for the government's efforts in the ongoing re-form process, particularly administrative reform.Yet, frankly speaking, our business environment still needs to be reformed. The qual-ity of our current business environment is just a medium level on the international scale. Equal footing among economic sectors, risk reduction and business safety all re-quire urgent and strong reform.Some people say that now private enterprises do not need special treatment from the government, but what they need is fair treatment and an open business environment. What do you think?I want to support this point of view.What we should emphasis is that reforms must create a business environment with a basic idea; freedom for creativity. All ideas should be provided with conditions to be applied and invested, intellectual assets especially must be protected.That's why administrative reform must pay special attention to lifting all barriers to creativity or legal risks preventing business development. Reforms should offer a shield to protect business rights and a healthy competitive environment.In addition, in my opinion it is time for government agencies to strictly carry out the government's administrative regulations. That's why structural reform should be geared toward creating favourable conditions for the freedom of business, including lifting geographical restrictions on business registration procedures.What should enterprises do to improve their business performance?There are two main factors which will have direct impacts on the enterprises: national institutions and the market.The State will try to reform its institutional factors by reducing negative impacts while increasing positive factors to help enterprises.Enterprises should be pro-active against all economic factors; make innovations; and improve their competiveness.Last but not least, enterprises must act in accordance with the law. This is one way to help them avoid legal risks, including paying fines for violating the law.- Tran Dinh Thien, director of the Vietnam Institute of EconomicsEnterprises do not want to grow if they are given many preferential policies. What's more important is that they need "healthy air to breathe and to develop". To help the private sector develop, it is important for the State to conduct reforms in State enter-prises or Foreign Direct Investment enterprises sectors.- Economist Bui Kien ThanhTo develop the private sector, the government should do five things: Complete the le-gal system and lift all barriers preventing its development; step up the fight against corruption; reduce the lending rate; learn experiences from the US Small Business Ad-ministration in giving supports to small enterprises; and finally, offer training for en-trepreneurs.- Economist Dao Ngoc LamLow investment return has become one of the reasons making public debt surpass its ceiling. In 2015, the public debts/GDP increased from 50 per cent in 2011 to 62.2 per cent; the government debt/GDP increased from 39.3 per cent to 50.3 per cent and the foreign debt increased from 37.9 per cent to 43.1 per cent.


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Suppliers meeting distributors effective for commodity trading


To facilitate enterprises, a programme connecting suppliers in the south with distrib-utors in the north has been launched, aiming to be an effective channel for businesses to expand.Organised by the Export Support Centre under the Ministry of Industry and Trade for the first time, the programme is highly valued by enterprises, being considered a good channel for trading and expanding markets.Nevertheless, enterprises in southern localities maintain that supplying their products to distributors in the north is difficult.More than 100 kinds of southern fruits are being introduced to northern distributors at the show.Experts say to make the programme effective, relevant sectors need to engage fully.http://en.vietnamplus.vn/suppliers-meeting-distributors-effective-for-commodity-trading/112248.vnp

Competitiveness key for goods distribution flow


Nguyen Van Nam, former director of the Trade Research Institute, under the Ministry of Industry and Trade, speaks to the Hai quan (Customs) newspaper on challenges in setting up retail chain stores in VietnamMany people have complained that most profits in supply chains go to middlemen. What's your opinion?I couldn't agree more. It is a matter of fact, supply chains in our country are much like the old subsidisation system with many middlemen. As a result, goods prices are above their true value.I myself was a member of an investigation team on rice exports. I was told that traders went directly to the rice fields to buy paddy during harvest. The paddy was then trans-ported to threshing mills. From the mills, rice was graded into high, middle or low quality rice. The best rice was for export while the middle or low quality rice was trans-ported to dealers to sell on the domestic market. In the end, rice consumers have to pay higher prices for the rice they eat.In short, most of the profits go to middlemen.In my opinion, it is time for us to create a goods value chain, just like the model from farm to fork so that we can cut down product costs while still keeping quality high.Do you mean that a lion's share of the profits goes to middlemen due to the tradition of small scale production?I didn't mean that. Our farmers are hard working and they know that most of the prof-its from their products go to middlemen. But they can't do anything.I'm sorry to say that we lack a good trading system from goods procurement to distri-bution.In the past, we had many State enterprises operating under the system of state subsi-disation. Their key objective was not to make profit, but to serve the people.But now, those State enterprises have been dissolved and the distribution channel is in the hand of private commercial enterprises. One thing I have to admit is that many pri-vate enterprises have put profits top of their priority list.Large agricultural production fields have been formed in many localities. But our dis-tribution system remains small and scattered. This has caused problems to farmers when the harvest season comes but traders are not interested in buying from them.Who is to blame?Agriculture production in our country has experienced many changes in recent years. But the consumption and distribution systems have not been up to scratch. Which ministry is responsible? The question remains.It is high time for Vietnam to set up distribution systems like in other countries. Such systems operate in a loop, from farm to fork. I'm sure that if we can organise good dis-tribution systems, it will be good news for farmers.However, we need the State to act as midwives for the systems to help them operate smoothly initially.


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Many retail markets in our country are dominated by foreign firms. What do you think of this?I have to admit that Vietnamese enterprises are in much weaker positions than their foreign peers in terms of capital, technology, management and more.In such a situation, in my opinion, the Ministry of Trade and Industry should play the role of the "midwife" to help reorganise the domestic commercial system and support Vietnamese enterprises to establish stores nationwide. If the current situation drags on for 5-10 years, I'm pretty sure that our domestic market will completely fall into the hands of foreign enterprises.In my opinion, at the start, the government should adopt lucrative policies to support private enterprises, including low interest loans, land to build factories or shops and others.http://vietnamnews.vn/opinion/377068/competitiveness-key-for-goods-distribution-flow.html#YMt5LwDSsK35IHpe.97

City to monitor produce supply chain


HCM City plans to strengthen links with provinces supplying farm produce to im-prove oversight at the points of origin, officials said.The city's own agricultural output meets only 20-30 per cent of demand and the rest is supplied by other cities and provinces, according to Nguyen Thi Nha Truc, head of the Food Safety Management Board's quality management office.Therefore, the city faces a huge challenge in supervising, managing and tracing the or-igins of agricultural, forestry and fishery produce.The city had various programmes to safeguard consumers' health and benefits, which have been reasonably successful, she told a conference on food safety management in HCM City yesterday.A programme to trace the origin of pork started last December allows consumers use their smart phones to check product information on farming facilities, abattoirs, pro-ducers, distributors, and retailers.The programme, carried out by the city Department of Industry and Trade, has signed up 1,130 farms that supply more than 10,000 pigs a day and 25 abattoirs in HCM City and other cities and provinces.Hoc Mon and Binh Dien wholesale markets, 23 traditional markets and all modern dis-tribution systems such as supermarkets and convenience stores are taking part.In January the Department of Agriculture and Rural Development began a pilot pro-gramme to trace the origin of vegetables using QR code scanning apps in phones.Two participants, Phuoc An Cooperative in Cu Chi District and Phu Loc Cooperative in Binh Chanh District, supply 8-8.5 tonnes of vegetables and fruits daily with electron-ic stamps with information on their packaging.Since 2013 a programme has been building up a safe supply chain from breeding, slaughter and transport to processing and distribution.A total of 45 food producers and trading establishments are certified as 'safe' for farm produce like vegetables, seafood and poultry eggs.The city is set to sign agreements with provinces to develop the safe supply chain fur-ther in terms of quantity and variety of products.Excessive chemicals"The excessive use of plant protection chemicals and antibiotics in agricultural produc-tion has yet to be brought under control, causing great health concern," Truc said.As most food producing and processing facilities in the city are small-scale, they had not fully complied with food safety requirements, she added.Nguyen Thi Dan An, head of the health office under the Binh Chanh District People's Committee, said local authorities regularly inspect and support these facilities to en-sure they improve food safety practices.But she admitted that the lack of severe penalties and lax enforcement are barriers to reducing violations related to food safety.Enterprises need to be aware of their responsibility to produce safe products, she said.


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Le Truong Giang, chair of the city Public Health Association, said the production and trading of chemicals and food additives are not well managed, especially at Kim Bien market, and many with dubious origins are used as a result.Authorities do not impose large enough fines on production and trading facilities which fail to prove the origin of their raw materials and products, he said.Nguyen Nguyen Phuong, head of the Department of Industry and Trade's commercial office, said efficient management of agricultural supplies from other provinces at three wholesale markets, Thu Duc, Hoc Mon and Binh Dien, and supermarkets means 95 per cent of agricultural products consumed in the city "is controlled".He suggested that products of unknown origins and without clear records should be prohibited at wholesale markets."Only severe punishment will help ensure the safety of products in the market."A shortage of human resources prevents frequent inspections and other actions to keep out unsafe food products, he admitted.http://bizhub.vn/news/city-to-monitor-produce-supply-chain_286346.html

Northern provinces enjoy bumper Winter-Spring rice harvest


The northern region from Thua Thien-Hue province northward reaped a bumper har-vest in the 2016-2017 Winter-Spring rice crop for the 10th consecutive year, heard a conference held in Thanh Hoa province on May 24.Northern localities grew rice on 1,145,000 ha in the crop, down 10,500 ha year-on-year, and harvested an estimated 7.12 million tonnes of rice, with an average productivity of 6.22 tonnes per ha.The Ministry of Agriculture and Rural Development attributed the bumper crop partly to favourable weather.In the upcoming summer crop, northern localities plan to plant rice on 1,308,000 ha in the hope of producing around 6.57 million tonnes.As the crop is vulnerable to storms and floods, the Ministry advised farmers to use short-duration rice varieties and localities to prepare extra rice seedlings in case of damage.Local agricultural sectors are also required to get anti-flood plans ready to minimise losses.http://en.vietnamplus.vn/northern-provinces-enjoy-bumper-winterspring-rice-har-vest/112223.vnp

Cattlemen look to imports to meet growing demand for beef

25/MAY/2017 INTELLASIA| VOV

Vietnamese cattlemen have requested the Vientiane Cattle Breeding and Entrepre-neurs Association to supply up to 400 head of cattle per day to meet the increasing con-sumer demand for beef.This request comes on the heels of the Association signing a contract under which it agreed to supply beef cattle to the Vietnamese cattlemen, Viengsavanh Southivong of the Association told reporters on May 22.The problem is that Association has entered into an agreement that it is currently not prepared to fulfil, said Viengsavanh, noting the 27 Lao members need more time to come up with a plan to meet their commitment.To start a cattle ranch the Association and its members are currently seeking equity capital to purchase the equipment, grass, seeds, and cattle it needs to get it up and run-ning, said Viengsavanh.The Association has plans to import 2,000 animals from Australia to use in Vientiane as breeding stock.Nor does the Association have the technical skill and staff or the land and natural re-sources needed, he said. We hope to establish collaborative agreements with Thailand ranchers to supply some grass seeds, technology, and vaccines among other things.With support from the government and the assistance of local residents, we are hoping to find 1,500 hectares of land along the That Luang marsh channel to establish a cattle ranch.


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This year, the Association also plans to purchase 300 hectares of land for cultivation and will further expand when the ranch gets up and running with visible progress.The farmland is in the district of Xaysettha in the villages of Phonthong, Na Pien, Doung, Kharm-ngoy, Na Xangphay and Haykham.As we learned from the mistakes of a foreign business entrepreneur in the province of Xieng Khuang, we must prepare meticulously before importing the cattle, said Vieng-savanh.The number of head of cattle currently being reared by the members of the Association are still insufficient to meet the current commitments it has already made to supply the domestic market.The Association needs more than 500 cattle to meet its obligation to supply local slaughterhouses daily and is currently bringing in cattle from other provinces like Sar-avan and Attapeu to do so.The supply issue has caused beef prices in Vientiane to spike, while pork has remained relatively inexpensive in comparison.Most startling is the fact that Viengsavanh acknowledged that the Association mem-bers are still lacking in the expertise to operate a cattle ranch and compete with their peers in the Lao marketplace.This situation highlights the importance of Vietnamese businesspeople being careful in entering contractual agreements with foreigners in Laos. In this situation clearly, the Association is not prepared to meet its end of the bargain.In English, one would say the Association clearly put the 'cart before the horse.' But in any event, it looks like the Vietnamese cattlemen will need to look to other suppliers to meet the rising demand for beef by Vietnamese consumers.http://english.vov.vn/economy/cattlemen-look-to-imports-to-meet-growing-demand-for-beef-350181.vov

Korean firm plans to acquire Gemadept


Korea's Taekwang Industrial Co Ltd has submitted a letter with intention to acquire Gemadept Corporation, Vietnam's largest logistics firm, as part of efforts to establish a logistics network in Southeast Asia.This was reported by The Korea Economic Daily.If the acquisition is successful, Taekwang expects to create synergy between its exist-ing manufacturing plants and Gemadept's logistics network.Taekwang, established in 1950, is a large Korean corporation in the field of synthetic fibre, textiles and petrochemicals. The company has been present in Vietnam for more than 20 years and is one of the largest footwear manufacturing enterprises in the coun-try.Founded in 1990, Gemadept has several subsidiaries in the areas of logistics, port op-erations and real estate development.In terms of overseas investment, Gemadept is planting rubber in Cambodia and build-ing a real estate complex in Laos.Gemadept's share price has increased sharply recently following information that the enterprise can withdraw capital from subsidiaries in logistics, selling its entire 15 per cent stake in Gemadept Tower. In 2014, Gemadept sold 85 per cent stake in Gemadept Tower to the Korea's CJ Group.Vienam News contacted Gemadept but the company declined to comment.http://bizhub.vn/markets/korean-firm-plans-to-acquire-gemadept_286356.html

Kantar Worldpanel releases fifth annual Brand Footprint report


Report identifies Vietnam's most chosen brand owners in 2017.Kantar Worldpanel's fifth annual Brand Footprint report was released on May 24, re-vealing the Top 10 FMCG brand owners and the Top 10 brands in Health & Beauty, Homecare, and Food and Beverages being purchased by the most consumers most of-ten in Urban 4 Cities (HCM City, Hanoi, Da Nang, and Can Tho) and Rural Vietnam.Unilever, Masan Consumer, and Vinamilk continued to be the Top 3 brand owners in


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both Urban 4 Cities and Rural Vietnam, for the fifth year running. Unilever retained its lead ranking as the most chosen brand owner in the Non-Food sector, where inter-national players dominate over 80 per cent of value share. Meanwhile, in the Food sec-tor, where over 50 per cent of total value comes from local players, Masan Consumer and Vinamilk preserved their positions as two local FMCG giants owning top Food brands.Staying fourth in the Urban rankings, Nestle achieved the highest growth, of 8 per cent, in Consumer Reach Points (CRPs) among the Top 10 Urban 4 Cities and gained one place to ninth in the Rural rankings. The global manufacturer has made a lot of ef-fort in innovation and marketing activities to expand its consumer base, especially in Rural Vietnam. As a result, Nestle was able to reach nearly 600,000 additional Rural households and increase its CRPs by 4 million times in the Rural market.Climbing two places, Calofic took eighth position in the Urban rankings and fifth in the Rural rankings, with healthy growth of 6 per cent. Its products (mainly cooking oil) were chosen more than 15 million times by 84 per cent of Urban households and over 100 million times by 83 per cent of Rural households last year.By recruiting approximately 1.3 million Rural households and growing 14.5 per cent in CRPs, Uniben saw impressive performance and continued rising, up two positions to sixth in the Top 10 Rural rankings. The local player has focused on Rural Vietnam (68 per cent of Vietnam's population and 60 per cent of its GDP) with good product quality at competitive prices, with innovation and aggressive distribution that helped its products win over more Rural consumers.http://vneconomictimes.com/article/business/kantar-worldpanel-releases-fifth-annu-al-brand-footprint-report

Clayton-based Enterprise Holdings inks Vietnam franchise deal

25/MAY/2017 INTELLASIA| STL TODAY

Clayton-based Enterprise Holdings Inc. has inked a franchise agreement with a Viet-namese firm, the car rental company's first franchise agreement in Asia as it continues to grow its international footprint.Enterprise announced the agreement Wednesday with MP Logistics, a Vietnamese firm specialising in cargo, warehousing and distribution. MP Logistics plans to initial-ly begin offering long-term car rentals next year to employees of multinational compa-nies under the Enterprise-Rent-A-Car brand in the major cities of HCM City, Hanoi and Danang.Eventually, MP expects to expand into short-term car rentals for businesses and leisure travellers."MP Logistics looked at many potential car rental partners, and the company is confi-dent that the combination of Vietnam's emerging economy and Enterprise's unique value proposition and unmatched customer service reputation will add up to yet an-other Vietnamese-American business success story," Minh Phuong Dang, Chief Exec-utive Officer and Founder of MP Logistics said in a statement.http://www.stltoday.com/business/local/clayton-based-enterprise-holdings-inks-viet-nam-franchise-deal/article_d2c82a75-9c2d-5bbd-af3c-bd5dc099d9e3.html

LG Display Vietnam proposes to increase investment


LG Display Vietnam Hai Phong Co has proposed to raise its investment capital from the current $1.5 billion to $1.59 billion, baodautu.vn reported.The additional capital will be spent on building 13 dormitory buildings and other so-cial welfare projects for 10,000-12,000 workers.Construction work is underway on 12.6ha of land. Two hostels and some social wel-fare projects will be completed in the year's third quarter and all the dormitory build-ings will be completed by 2020.Located in Hai Phong City's Trang Due Industrial Zone, the company's project will produce organic light emitting diode (OLED) display products once operational in the third quarter of this year.


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Vietnam's tax authorities to take closer look at foreign retailers


With tax avoidance among multi-nationals a growing global concern, Vietnam is keen to know what retailers are up to.The general Department of Taxation has asked local tax authorities to inspect foreign retailers operating in Vietnam to see if they are transfer pricing or shifting profits to avoid tax.Tax authorities will audit corporate, value added and personal income tax paid by these retailers between 2012 and 2016.The department will also monitor the use of brand names in the form of franchising or ownership transfer among foreign retailers.Transfer pricing is not illegal per se, but it is a gray area that tax agencies keep a close eye on. Abuse of the practice is often very difficult to prove, especially when it involves multinational corporations with a complex network of internal buyers and suppliers.Vietnam's retail market grew 10.2 percent last year with total sales reaching VND2,670 trillion ($117.6 billion), according to the General Statistical Office.The country, recently ranked by A.T. Kearney among the world's top 30 retail markets with the best opportunities, has seen many foreign arrivials.BigC supermarket chain, MM Mega Market (previously Metro Vietnam), electronics chain Nguyen Kim and Aeon Vietnam are several of the major foreign retailers oper-ating in the country.In 2015 retail giant Central, run by Thailand's third-richest family, the Chirathivats, made headlines with its $200 million purchase of a 49 percent stake in electronics re-tailer Nguyen Kim, via its subsidiary Power Buy. Then in 2016, Central and Nguyen Kim acquired Vietnam's biggest foreign-owned supermarket chain Big C.Vietnam's tax authorities last year gave Big C Vietnam a tax bill of VND2 trillion ($88 million) for its capital gains tax obligations after its former French owner Casino Group sold its stake to Central for 1 billion euros ($1.14 billion).In 2015, authorities also collected VND1.9 trillion ($85.6 million) in tax arrears from the $700 million acquisition of Metro Vietnam.German-retailer Metro Cash & Carry, before being sold to Thailand's TCC Internation-al Land, was accused of falsely reporting losses for 12 years in Vietnam and failing to pay tax bills worth $23 million, according to the general Department of Taxation.http://e.vnexpress.net/news/business/economy/vietnam-s-tax-authorities-to-take-closer-look-at-foreign-retailers-3589658.html

CJ's road to dominance in Vietnamese food sector


With its recent acquisition of Cau Tre Export Goods Processing Joint Stock Company, South Korean conglomerate CJ is one step closer to playing a crucial role in the Viet-namese processed food sector. However, the earlier failure in the race to control major player Vissan is going to pose a challenge.On a roll with M&AOn May 21, the shareholders of Cau Tre Export Goods Processing Joint Stock Compa-ny ratified the decision to change the company's name to CJ Cau Tre.Only a month earlier, then-second biggest shareholder of the company, Saigon Trad-ing Group (SATRA) announced the public auction of a 20 per cent stake in the compa-ny. Two subsidiaries of CJ, CJ Foods Vietnam Ltd and CJ CheilJedang Corporation, have bought the stake and raised CJ's total holding in Cau Tre to 71 per cent.CJ's journey to become the controlling majority shareholder at Cau Tre has been swift. At the end of 2016, it increased its holdings to 47.33 per cent by buying stakes from three big shareholders in the form of private placement, surpassing then-biggest share-holder Satra, which was holding 45 per cent. Then Cau Tre's extraordinary sharehold-ers' meeting ratified to put four CJ personnel into management roles. At the end of March, CJ's holding was already a bit over 51 per cent.CJ produces ready meals and frozen food, such as spring rolls, tea, raw meat and sau-sages. As its products, such as BBQ sauce, started appearing more aggressively on su-permarket shelves in Vietnam, CJ has also been on a roll with its M&As. In early 2016,


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it bought the Ong Kim kimchi brand.Recently, another Vietnamese company also changed name to bear the CJ mark. At the end of April, CJ finished transacting $13.4 million to acquire 64.9 per cent of food processing company Minh Dat and changing its name to Minh Dat CJ. Minh Dat has been holding the largest market share for meatballs and fishballs in Vietnam.Completing the supply chainWith CJ's involvement, Cau Tre is ramping up its food processing capacity and up-grading its technology. Besides changing its name, the company will add operations, such as processing and preserving vegetables, producing cakes and other processed foods, and whole-selling food. The new food processing plant in Hiep Phuoc Industri-al Park in Nha Be district of HCM City also saw its investment raise to VND1.2 trillion ($53 million) from the earlier planned VND600 billion ($26.5 million).Cau Tre has been maintaining losses for the past two years, and this year, it also ex-pects a VND25 billion ($1.1 million) before-tax loss this year. However, in the long-term, the management commits a higher profit margin in its main business area and higher dividend.However, what investor CJ is mainly after is the distribution network Cau Tre possess-es. Though it only has a market share of less than 3 per cent, Cau Tre has a large dis-tribution network in Vietnam and has been steadily exporting its products to global markets that have very high quality and safety demands. Having Cau Tre under its belt is thus going to help CJ strengthen its position in the frozen food market.CJ has also struck a deal with the second-biggest shareholder of Cau Tre, Satra. In Sep-tember 2016, a Memorandum of Understanding (MoU) was signed between the two parties in Seoul during a diplomatic visit by a HCM City government delegation.As reported by Vietnam Economic Times, under the agreement, CJ CheilJedang, CJ's food subsidiary, will work with Satra to develop new products based on a combination of their existing product lineup. On the same day, CJ Freshway, CJ's food and food service distributor, also inked an agreement to become Satra's exclusive distributor of South Korean fruit.Last November, the company launched the CJ Feed Ingredient Vietnam factory in the southern province of Ba Ria-Vung Tau, adding to its portfolio of plants in Long An, Dong Nai, Vinh Long, and Hung Yen.All in all, CJ's investment approach in Vietnam has been comprehensive, focusing not only on production, but also distribution.One crucial setbackCJ's expansionary ambition was only checked by a highly-publicised failure in the race to acquire VISSAN Joint Stock Company (Vissan) earlier last year.In March 2016, Vissan held the auction for a 14 per cent stake reserved for a strategic investor. International Agriculture Nutrition JSC (ANCO), a subsidiary of Masan, end-ed up the winner, after buying the whole offering at the price of VND126,000 ($5.6) a share. The price was a little bit higher than the CJ's offer of VND120,600 ($5.32) a share. After the sale, Masan and its subsidiaries hold 24 per cent, while CJ holds 4 per cent.Similar to CJ, Vissan (freshly acquired by ANCO) is also completing its supply chain. At its April 5 shareholders' meeting, Vissan's management said that as the company is building a complete feed-farm-food value chain, the strategic investor ANCO is going to provide feed, one of the three pieces of the puzzle that Vissan is lacking. The com-pany expects a revenue of VND4.54 trillion ($200 million) in 2017, up 23 per cent, and pre-tax profit of VND156 billion ($6.9 million), up 5 per cent on-year.Being unable to acquire Vissan was a disappointment to CJ, because Vissan reportedly holds 65 per cent of the market for sausages, 75 per cent for Chinese sausage, 40 per cent for frozen food products, 30 per cent for Vietnamese ham, and 20 per cent for canned food. The company's products are distributed at 130,000 sales venues all over the country.As reported by newswire dantri.vn, after two decades in Vietnam, CJ has reached a revenue of VND17 trillion ($750 million) in 2016, up 30 per cent on-year, and an oper-ating profit of VND834 billion ($36.8 million). The food operation has had the highest


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growth of 86 per cent between 2011 to 2015.Market research firm StoxPlus estimates that the Vietnamese processed food market is valued at about $4 billion, of which processed meat and seafood accounts for 45.1 per cent. As cited by cafef.vn, market research firm Euromonitor estimated the processed meat and seafood market to have been growing for the past five years. Last year, the growth rate was 6 per cent in value and 5 per cent in volume.It remains to see how the battle for dominance is going to play out in this highly po-tential market.http://www.vir.com.vn/cjs-road-to-dominance-in-vietnamese-food-sector.html

Former Vinaconex boss faces prosecution for regulation violation


The Ministry of Public Security's Police Investigation Agency has prosecuted Phi Thai Binh, former chair of the Vinaconex board of directors, for violating construction reg-ulations and causing serious consequences.The Ministry of Public Security's Police Investigation Agency has prosecuted Phi Thai Binh, former chair of the Vinaconex board of directors, for violating construction reg-ulations and causing serious consequences.Binh, who is also former vice chair of the city's People's Committee, was found to be responsible for the mismanagement during the time he held the position at the com-pany.State-owned Vinaconex was the investor of the Da River water pipeline, with total in-vestment of VND1.45 trillion (US$64.4 million). The pipeline was put into operation in 2009 and has been ruptured several times in the past several years, causing serious im-pact on some 177,000 city households due to the water shortage.Former CEO of Vinaconex Nguyen Van Tuan and five other executives also face charg-es for violating construction and investment regulations.They are all on bail due to old age and poor health.The decision has been handed over to the Supreme People's Court.Previously, the Police Investigation Agency had announced the results of the investi-gation on the Da River water pipeline. Construction of the pipeline, which carried wa-ter from Da River to Hanoi, was completed in 2004 and put into use five years later.However, the pipeline was ruptured 14 times between 2012 and 2015, leading to a shortage of water for 177,000 households for nearly 350 hours and an estimated loss of 1.5 million cu.m of water. The company has spent more than VND13 billion ($572,900) to fix the incidents.The investigation's results revealed that members of the Vinaconex's board of direc-tors, including Phi Thai Binh, Nguyen Van Tuan, To Ngoc Thanh, Hoang Hop Thuong and Vu Dinh Cham, decided to use substandard untested fiberglass composite, caus-ing massive ruptures, and chose a disqualified and inexperienced contractor to supply the poor quality pipeline for the project.In March 2016, the Supreme People's Court prosecuted nine officials for violating reg-ulations on investment and construction management. Several months later, Binh and his former partners were proposed to be exempt from criminal prosecution, leading to outrage among the public.http://english.vietnamnet.vn/fms/business/178999/former-vinaconex-boss-faces-pros-ecution-for-regulation-violations.html

Phu Quoc possesses great potential for second home market


Tran Dao Duc, deputy general director of the CEO Group, tells VET about the poten-tial of Phu Quoc Island.What do you think about the development of the second home market (or holiday home market) in Vietnam at this time?Vietnam's second home market has achieved impressive results in recent times, reach-ing regional and global standards. Many hotels and resorts have been introduced, with rapid construction progress and international quality. In 2016 and the first half of 2017, investment into the second home market has grown considerably, especially coastal


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projects that possess beautiful locations and improved infrastructure and attract tour-ists, such as those in Phu Quoc, Da Nang, and Khanh Hoa. Domestic and international tourists are visiting these destinations in rapidly increasing numbers.The CEO Group recently opened Novotel Villas in Phu Quoc. Do you think Phu Quoc is a wonderful destination for property developers to build second home projects?Phu Quoc has a great location and is an ideal investment opportunity for the CEO Group and other investors because of the following reasons.Firstly, it is a peaceful tropical paradise, floating in the warm turquoise waters of the Gulf of Thailand, 50 km from the Vietnamese mainland and a 50-minute flight from HCM City. The island is at the centre of Asean, just two hours away from its major cit-ies, giving it potential in travel. Because it is located in the Gulf of Thailand, it has ideal weather conditions, with a stable temperature of about 28C, and is not hit by storms, so it is not risky to develop the tourism business.Secondly, Phu Quoc has natural conditions that are not always available in other cities and provinces. It has 150 km of coastline, with many beautiful white sand beaches. The water is very warm, so tourists can swim at night. This can't be found in other cities and provinces. Two-thirds of its area is primeval forest, providing fresh air and a good climate for visitors.Thirdly, infrastructure and technical infrastructure have been invested in heavily on the island, which is ready to become a special economic zone. Phu Quoc's traffic net-work was mainly red dirt roads in the past, but now there is a main road running through the island, an international airport, and a tourist port, where ships with over 7,000 passengers can berth. The island also has clean water and underground cables, which have completely changed the face of Phu Quoc. There are also many new projects, such as golf courses, a safari park and zoo, entertainment areas, a cable car, and a casino.Fourthly, Phu Quoc offers preferential policies, such as a 10 per cent corporate income tax exemption for the first four years and a 50 per cent reduction for the next nine years, exemptions from land rentals for the first 15 years, and 30-day visa exemptions for international visitors.Fifthly, Phu Quoc will become one of Vietnam's three special economic administrative zones, creating a breakthrough for the island to take off and contributing to Vietnam's development.Sixthly, Phu Quoc's market is still new compared with other cities and provinces and there are many opportunities for all types of services.What are the challenges for second home developers at this time?The more developed the second home market becomes, the more intense the competi-tion and the more sophisticated customers are, so developers need to affirm their brand and reputation and make a difference. Products must come with attractive pol-icies, in addition to quality, timeliness, and commitment.http://vneconomictimes.com/article/property/phu-quoc-possesses-great-potential-for-second-home-market

Vietnam sees six-fold rise in foreign workers since 2004


Officials are now looking into possible ways to collect social insurance payments from all of them.Nearly 84,000 foreigners are working in Vietnam compared to 12,600 in 2004, and the country is working out policies and methods to collect social insurance, according to media reports.Most of them are skilled workers with work permits, Tran Hai Nam, deputy head of the Social Insurance Department under the labour ministry, was quoted as saying in a report published Wednesday by Voice of Vietnam.That figure is a rise of 1.8 percent from a year ago, when the country had 82,500 work-ing foreigners, as reported by the labour ministry.The ministry is now consulting experts and the public on the formulations of new rules that would require foreign workers to pay social insurance, which is already compul-


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sory for all Vietnamese salary earners.Under a draft decree, the basic insurance package for foreign employees would cover sickness, maternity, occupational diseases and accidents, retirement and death, which is similar to that for Vietnamese workers. If approved, it will come into force from Jan-uary 1, 2018.But many have questioned this plan, saying there are also many foreigners working under the radar without permits and bringing them all into the system would be a tough task.Others are concerned that without bilateral agreements, foreign workers could be re-quired to pay for insurance coverage both in Vietnam and in their home countries.Some also want to know about payout policies when a foreign worker leaves Vietnam.The annual HSBC's Expat Explorer survey last year found that good career opportuni-ties in a stable economy have made Vietnam one of the best host countries for foreign-ers.A good proportion of expats in Vietnam, 35 percent, agree that the country is a good place to progress their careers. The top three reasons they choose to move to Vietnam are for a new challenge (46 percent), being sent by an employer (26 percent) and to im-prove their quality of life (24 percent).According to the survey, expats in Vietnam could earn $103,000 annually on average, which is above the global level and a quarter less than Singapore's. That is around 50 times higher than the annual income average for Vietnamese, which was $2,100 last year according to the World Bank.http://e.vnexpress.net/news/business/economy/vietnam-sees-six-fold-rise-in-foreign-workers-since-2004-3589451.html

OFID lends $21.8mn for Vinh Phuc bridge


Loan to go towards building Dam Van Bridge in northern province.A signing ceremony was held in Hanoi on May 22 for a loan of $21.8 million from the OPEC Fund for International Development (OFID) to Vietnam for the construction of the Dam Vac Bridge in northern Vinh Phuc province.Total investment capital for the bridge project is $25.5 million, with reciprocal capital of some $3.6 million.The loan term is 20 years, including a five-year grace period, with an interest rate of 2 per cent per annum and a service charge of 1 per cent of the principal.The bridge will be built over the Dam Van River from 2017 to 2021 and upon comple-tion will connect the north and the south of the provincial capital of Vinh Yen city.Vinh Phuc province has borrowed from OFID based on the government's policy on strengthening public debt management to ensure sustainable national finances, ac-cording to minister of Finance Dinh Tien Dung. He also proposed the OFID assist other Vietnamese projects.Vietnam and OFID will lend to projects and programmes that belong to the medium-term public investment programme 2016-2020, which has been approved by the gov-ernment in line with its development strategy for 2016-2020.OFID is the development finance institution established by the member states of OPEC in 1976 as a channel of aid to developing countries.It works in cooperation with developing country partners and the international donor community to stimulate economic growth and alleviate poverty in all disadvantaged regions of the world. It does this by providing financing to build essential infrastruc-ture, strengthen social services delivery, and promote productivity, competitiveness, and trade.http://vneconomictimes.com/article/vietnam-today/ofid-lends-21-8mn-for-vinh-phuc-bridge

Clean Air Asia urges Can Tho to control air pollution


Certain air pollution indicators in the Mekong Delta city of Can Tho have exceeded permissible levels, and the pollution there would worsen if the municipal government


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does not take drastic preventive measures, said Ho Quoc Bang, an expert from Clean Air Asia.Speaking at a working session with the municipal government and the Vietnam Envi-ronment Administration on, he said a draft action plan for air quality management in Can Tho showed that Can Tho has seen a number of pollution indicators worsening.Air pollution will be far worse by 2025 if authorities do not tackle the issue properly, he stressed.Specifically, the concentrations of nitrogen oxides, carbon monoxide, sulfur dioxide, and dust by 2025 are forecast to rise by around 45%, 25%, 30 percent and 20 percent respectively against 2015.He mentioned three major sources of air pollutants in Can Tho, namely manufacturing in industrial parks and export processing zones; living activities like cooking and straw burning; and emissions from vehicles.He said three solutions are needed to control these three main causes of air pollution. For instance, with regard to transport, he urged the local government to inspect motor vehicles like buses more frequently, set up supporting mechanisms for bus companies, create enough space for pedestrians, and develop a bike-sharing system on a trial ba-sis.Hoang Duong Tung, deputy general director of the Vietnam Environment Adminis-tration, said the draft plan has pinpointed major sources of pollutants as a foundation to look for suitable solutions. Therefore, he hoped Can Tho and other cities would come up with better air quality management methods.Meanwhile, the city's vice chair Dao Anh Dung asked local departments and agencies to stick to the plan so that they could advise municipal authorities to handle relevant problems.http://english.thesaigontimes.vn/54121/Clean-Air-Asia-urges-Can-Tho-to-control-air-pollution.html

Expensive car imports decrease


The number of automobiles with nine seats or less imported into Vietnam has grown strongly this year, but the volume of expensive cars has decreased, according to the general Department of Vietnam Customs.Over 20,800 such vehicles had been imported into Vietnam with a total value of more than $329 million by May 15, a 46 percent surge against the same period last year.However, the average price was $15,776 a unit, around $1,000 lower than that last year. This falling average price points to the fact that fewer luxury cars were imported in the period.As import duty on cars from Asean countries has been cut from 40 percent to 30 per-cent early this year, and 0 percent by 2018, tax revenue is poised to fall sharply in the near future despite a rise in imports. Last year, imports of cars, especially luxury ones, helped raise tax revenue.http://english.thesaigontimes.vn/54116/Expensive-car-imports-decrease.html

Milk and dairy fair set for Hanoi


Vietnam International Milk and Dairy Products Exhibition from May 31 to June 3 the first of its kind in Vietnam.The Vietnam International Milk and Dairy Products Exhibition, the first event of its kind in Vietnam, will be held in Hanoi from May 31 to June 3 at the Friendship Cultur-al Palace, 91 Tran Hung Dao Street, Hoan Kiem district, with support and sponsorship from the Ministry of Industry and Trade, the Ministry of Health, the Ministry of Agri-culture and Rural Development, and the Vietnam Chamber of Commerce and Indus-try (VCCI).Dairy products and technology will be on display at the exhibition, including pow-dered milk, fresh milk, additives used in the dairy industry, milk processing lines and packaging technology, machinery for dairy farming, cattle feed, cattle breeding mod-els, and environmental treatment technology.


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Three conferences will also be organised, on sterilisation technology in milk process-ing, milk and dairy products for community health, and using high technology in dairy farming.Various activities will be available for children, to mark World Milk Day and Interna-tional Children's Day on June 1, such as a floating house, a ball house, a roller coaster, fishing, and tug-of-war.Those attending the event can taste free milk products from brands at the exhibition and receive advice on nutrition and dairy products. Financial consultancy for dairy en-terprises and breeding and households and dairy farms will also be available.The exhibition aims to boost the sustainable development of Vietnam's dairy industry and is an important trade promotion activity, linking domestic and international en-terprises while facilitating the seeking of business opportunities and expansion as well as enhancing the competitiveness of Vietnam's dairy industry.The event is expected to attract 150 domestic and foreign enterprises from 15 countries and territories, including the US, New Zealand, the Netherlands, Switzerland, Swe-den, Germany, France, Japan, and India.Famous brands from home and abroad will be present, such as Vinamilk, Moc Chau, Ba Vi, New Vietdairy, Hanoi Milk, Mead Johnson, Nestle, Abbott, Elovi, Tetra Pak, Nutricare, and IDP.The dairy industry has made a positive contribution to the national economy, record-ing average growth of 15-17 per cent each year. The industry plans to record export revenue of $120-130 million by 2020.Total milk consumption per capita in Vietnam was 23 litres in 2015 and 24 litres in 2016 and is expected to increase to 26 litres this year and 34 litres by 2025.http://vneconomictimes.com/article/business/milk-and-dairy-fair-set-for-hanoi End
