Download - finance & business news 21 July 2017 · 2017. 7. 21. · Intellasia 21 July 2017 3 / 45 FINANCE Vietnam finance & business 21 July 2017 it to the government before August 15, 2021

21 July 2017

finance & business news

FINANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1Reference exchange rate down 1 VND 1SBV issues bills to shore forex reserves 2Govt moves to enforce resolution on bad debt 2How to mobilise US dollars? 3UOB receives in-principle licence for Vietnamese subsidiary 5Foreign investor undergoing comprehensive review to acquire

OceanBank 5HSBC cuts Vietnam's GDP growth forecast to 6pct 5ADB upgrades Asian growth outlook while leaving Vietnam's

unchanged 6Agro-forestry-fishery exports target $35 billion next year 7Vietnam's exports to Algeria grow 37pct 7Vietnam, Pakistan, Burma to drive 2018 global rice exports 8India firms seek to boost textile machinery exports to Vietnam 8HCM City's industrial production index rises 7.51pct 9Hanoi's agri-production hits over 818 million USD in 6 months 9Small agri production must end 9Petrol prices increased by over 300 VND per litre 10Domestic materials for E5 fuel in short supply 10Power price hike must be closely checked, says deputy PM 11Vietnam expecting fewer power cuts for the rest of 2017 12Appropriate policies needed to unlock $35b tourism industry 12Workers over 35 squeezed out of jobs at foreign-invested firms 13HCM City aims to have 100MW of renewable energy by 2020 14PM asks Ben Tre to prioritise land funds for investors 14New HCM CityCan Tho rail line under consideration 15Vietnam borrows funds from Japan to cope with salinity intrusion 15Private companies' influence on economy growing 16How many private businesses are there in Vietnam? 16Why do Vietnamese businesses always fear of failure? 17List of the largest M&A deals in 2016-2017 19Lagging M&A scene looking for a big push 22Private-label products hold high potential 23Which way for e-wallets ecosystems or payment instruments? 23Enterprises in 20 public sectors allowed to turn into joint

stock ones 24Local firms still vague about Asean Economic Community 25VCA plans support polices to spur cooperatives' development 25Experts: Domestic companies should develop strong brand names 26Infrastructure JVs earn nod at meet 27Tourism market offers opportunities for start-up businesses 27Foreign businesses eyeing domestic cement 28Cybersecurity firms boom in Vietnam 29Japanese restaurants mushroom in Vietnam 30Vietnam cities garner heightened interest of hospitality investors 30Japanese capital flows in real estate in Vietnam 31Laos seeks to woo Vietnamese investors 32

BIZ NEWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32Business Briefs July 21, 2017 32VN30 stocks dampen market recovery 33Markets decline on rubber, retail stocks 34SSI Asset Management Company launches bond fund 34Promising M&A activities on the stock market 35Tradincorp to trade on UPCoM on July 24 37F&N's subsidiary undeterred in appetite for Vinamilk shares 37First Energy Efficiency Network launched in Vietnam 38Become entrepreneurs, prime minister exhorts youth in Ben Tre 38Hanoi faces school shortage in new urban areas 39Le Thanh-Oyadav border gates opened to traffic 40Nghi Son Economic Zone to get luxury resort 40Use finite resources optimally, PetroVietnam told 40AC Energy readies Vietnam investments 42Pou Chen awaits investment certificate for new footwear

factory in second city 42Japanese company buys 2.2pct of Pizza 4P's 43Work starts on $5.1m Soc Trang shrimp farm 43Tuong An Vegetable Oil's 1H pre-tax profit up 34pct 43Vietnamese firm found for holding illegal tour to Thailand 44Vietnam Airlines offers 20pct discount on domestic flights 45Many green power technologies exhibited 45

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FINANCEReference exchange rate down 1 VND

21/JUL/2017 INTELLASIA | VNA

The State Bank of Vietnam cut the daily reference exchange rate for VND/USD by 1 VND on July 21 to 22,432 VND per USD.With the current trading band of +/-3 percent, the ceiling rate applied to commercial banks during the day is 23,105 VND and the floor rate 21,759 VND.The opening hour rates at commercial banks saw slight changes.Vietcombank is buying the greenback at 22,700 VND and selling at 22,770 VND per USD, down 5 VND from a day ago.At BIDV, the buying rate is 22,700 VND and the selling rate 22,770 VND, up 5 VND.Techcombank kept the buying rate unchanged from July 20 at 22,685 VND per USD and adjusted the selling rate up by 5 VND to 22,780 VND per USD.http://en.vietnamplus.vn/reference-exchange-rate-down-1-vnd/115168.vnp

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Vietnam finance & business 21 July 2017

SBV issues bills to shore forex reserves


The State Bank of Vietnam (SBV) unexpectedly resumed the issue of central bank bills worth 8 trillion VND (350.9 million USD) this week, a move aimed at increasing the nation's foreign exchange reserves.Before this issue of bills, whose term is one week with interest rate of 1.3 percent per year, the most recent issue the central bank made was on March 3.According to industry insiders, SBV made the move as commercial banks did not sell the US dollar to the central bank although they bought a large quantity of the green-back from individuals and institutions.The issue will contribute to increasing the interest rate in the inter-bank market, which slipped to an eight-month low last week in the wake of the central bank's recent policy rate cut. The rates for overnight, one-week and one-month loans declined by 47, 49 and 67 basis points against the previous week to 1.28, 1.57 and 2.42 percent, respectively, according to a report from Saigon Securities Incorporation (SSI)'s research division.The rate hike in the inter-bank market will push up the cost of holding the dollar, es-pecially in the context that the dollar/dong exchange rate tends to decline, insiders ex-plained. Therefore, the fact that banks are forced to sell the dollar to the SBV is only a matter of time, they said.To expand the foreign reserves, in the first half of 2017, the central bank increased the buying rate for the greenback at its transaction centre thrice, posting a total increase of 150 VND. The latest hike of 50 VND was made on June 19, raising its buying rate for the US dollar from commercial banks to 22,725 VND per dollar.Analysts say the buying rate hike at SBV's centre is aimed at encouraging commercial banks to buy dollars from currency holders at higher rates. The banks will then sell dollars to SBV's centre, helping the central bank further build foreign reserves to pre-pare for any fluctuation that may occur if the US Federal Reserve (Fed) increases inter-est rates.Early this month, SBV Governor Le Minh Hung said that Vietnam's foreign exchange reserves was at an all-time high of 42 billion USD. The reserves have increased by roughly 1 billion USD against the end of last year.http://en.vietnamplus.vn/sbv-issues-bills-to-shore-forex-reserves/115147.vnp

Govt moves to enforce resolution on bad debt

21/JUL/2017 INTELLASIA | VNS

Prime minister Nguyen Xuan Phuc on Wednesday took action so that the National As-sembly's (NA) new resolution on bad debt settlement could be applied from August 15.The PM issued Directive 32/CT-TTg, stating that all regulations to guide the imple-mentation of the NA resolution on settling non-performing loans must be issued be-fore August 15, the date the resolution takes effect, a move that reflects the government's determination to settle bad debts.Under the directive issued on Wednesday, Phuc has assigned the Ministry of Justice to direct the enforcement agencies at all levels to rapidly settle lawsuits, which have tak-en legal effect, related to bad debts of credit institutions and the Vietnam Asset Man-agement Company (VAMC).The ministry will also be responsible for drafting a decree on collateral transaction, which will be submitted to the government for approval.The directive orders the Ministry of Public Security to direct its agencies to maintain security and social order when credit institutions and the VAMC exercise their legal right to confiscate and sell collateral assets of bad debts as per the regulations stated in the resolution.The Ministry of Natural Resources and Environment must direct its property owner-ship registration agencies to carry out procedures to transfer the property ownership and use rights to legal purchasers and assignees of bad debts, as stipulated in the res-olution.The PM has also entrusted the Ministry of Planning and Investment to cooperate with relevant agencies to map out plans to disburse State budget in order to pay arrears for the government's infrastructure construction projects.Under the directive, Phuc has required the State Bank of Vietnam (SBV) to closely su-pervise and inspect credit institutions and the VAMC in the implementation of the res-olution.The central bank must also work out with relevant ministries and agencies a stream-lined legal framework proposal for settling bad debts and collateral assets and submit

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it to the government before August 15, 2021, based on effects of the enforcement of the resolution.Besides enhancing supervision, the SBV must also take responsibility for streamlining current legal regulations on the governance of credit institutions, especially risky gov-ernance, and credit granting for credit so as to minimise bad debts the next time.Last month, NA deputies ratified the resolution on dealing with banks' bad debts. Ex-perts have applauded the resolution, saying it is necessary to reduce the bad debt ratio of credit institutions, including the debts sold to VAMC, to below 3 per cent.With the resolution, credit institutions and the VAMC can trade bad debts in an open, transparent manner at market prices, in accordance with the law, they said.Huynh Minh Tuan from VnDirect Securities said the resolution would perform the im-portant job of clearing away congestion in the economy, which agencies have been try-ing to do for the past five to six years but only with modest success. Now, the resolution will give more rights to credit institutions to liquidate mortgaged assets, thereby helping to avoid prolonged lawsuits related to debt collection and reducing capital costs.According to an SBV report, by the end of 2016, non-performing loans across all credit institutions accounted for 5.8 per cent of the institutions' total outstanding loans. If hid-den debts are also taken into consideration, the total is 10.08 per cent.http://bizhub.vn/news/govt-moves-to-enforce-resolution-on-bad-debt_287727.html

How to mobilise US dollars?

21/JUL/2017 INTELLASIA| NGUOI LAO DONG

Although the prime minister has mentioned three times the issue of mobilising foreign currencies from the people, in the working session with the government's Working Group on July 18, State Bank Governor Le Minh Hung still did not mention any spe-cific solution.The Governor said over the past many years, the State Bank of Vietnam (SBV) has been carrying out comprehensive measures to regulate monetary in order to ensure macro stability and control inflation. Thanks to these correct solutions, resources in the econ-omy have been transformed into dong.In 2016, the State Bank bought nearly $10 billion to increase foreign exchange reserves. Of which, payment surplus accounted for only a small part, while the main source of foreign currency held by the people was converted to dong via deposits into the bank-ing system.This is the best way to convert foreign currencies, which is the most suitable to the macro stability control, and not to let fluctuations moving beyond the control of the government and the State Bank.SBV is consulting with relevant ministries and agencies on the anti-dollarisation and goldenisation schemes, which emphasize macro-economic solutions i.e. converting gold and US dollar resources into investment.Talking to reporter of the local Newswire Nguoi Lao Dong, a financial and monetary expert said that the correct understanding of "mobilising foreign currency from the people" is the State Bank borrows foreign currency through the mobilisationloans of commercial banks. Thus, it is likely that the State Bank will have to lift the ceiling in-terest rate on foreign currency deposits instead of sustaining at zero percent from De-cember 2015 to now.From the beginning of 2017, the proposal to raise the ceiling interest rate of US dollar deposits has begun to "warm up". In many discussions, Dr Can Van Luc said that SBV needs to raise the US dollar deposit rate for individual accounts to 0.25-0.5 percent per annum as the economy still has large demand for foreign loans."Only in the first half of 2017, demand for foreign currency loans has increased about five percent while only improving 1.5-2 percent in the same period of 2016. Commer-cial banks are borrowing US dollars from abroad with the interest rate of 2.5 percent per year. The mobilisation from the people will be cheaper and not subject to a series of constraints. This move will contribute to lowering both input and output interest rates while still avoiding the dollarisation situation", the expert analysed.


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Dr Truong Van Phuoc, deputy chair of the National Financial Supervisory Commis-sion, sees the limitation of dollarisation in the economy as a goal that SBV has pursued for 10 years now and has to continue pursuing to create position for the domestic cur-rency.However, in the context that the US Federal Reserve (Fed) increases interest rates, the resources of the economy have come to a limit, the consideration of adjusting interest rates to mobilise US dollars to create new stimulus as well as generate large source of capital in the banking system must be calculated to harmonise benefits.If the interest rate is zero percent, leaving US dollar at home or depositing in banks is the same but if the three-month term has low deposit rates, such as 0.25%, then the people will consider depositing into the banking system. This will generate a relatively stable capital source for banks. If the term is more than one year, the medium and long term mobilisation structure of the banking system will be raised.Dr Nguyen Duc Thanh, director of Vietnam Institute for Economic and Policy Re-search (VEPR), said: "To keep strong and stable dong, we do not approve of mobilising gold or US dollar in any form. The mobilisation with interest rates will make these two resources have additional function of circulation, becoming means of payment, and being easy to create chaos for the market and the regulation of currency".As per Dr Nguyen Duc Thanh, SBV has taken steps to limit the attractiveness of US dollar through zero percent interest rate policy. Since then, the dollarisation has been reduced, the value of dong has always remained stable with the volatility of only 1-2 percent per annum, inflation has been controlled at low level; The difference in interest rates has been conducive to the holding of dong. This policy should continue to be im-plemented consistently.Dr Vu Dinh Anh emphasized that "Raising US dollar interest rates at this point goes against the anti-dollarisation trend of the economy and the efforts to keep exchange rate, foreign exchange market stable over the last period".Dr Anh said, commercial banks, once mobilising, will have to lend and thereby, re-turning to the state of dollarisation of the economy because dollarisation of the econo-my is simply understood as the ratio of foreign currency mobilisation/total mobilised capital, not just using US dollars in economic relationswhich will invisibly return to the appreciation of foreign currency.The most worrying thing is that the mobilisation and lending pose risks to all three parties: depositors, borrowers and commercial banks. As the exchange rate fluctuates, interest rates cannot offset exchange rate, therefore, it will return to the previous state that is the formation of the two official and unofficial foreign exchange markets.Regarding the view that the zero dong interest rate makes the US dollar from outside not to flow into Vietnam and foreign currency in the country to flow outside, Dr Anh said that in principle, the foreign currency flow into Vietnam is only to take advantage of the interest rate difference while domestic interest rates have improved, so the at-tractiveness is not enough. Money flowing out is also not easy because there are other measures of currency control, anti-money laundering, control of money origin."I think that raising interest rates does not attract US dollars from outside and also can-not suck US dollar from the population to the system because in the past few years, the exchange rate has been stable, so the people do not have large demand for foreign cur-rency holding. Hoarding organisations and individuals are dependent on the depreci-ation and volatility of dong. Therefore, it is necessary to analyse and consider what the purpose of raising US dollar interest rate is, how it affects the market to work out ap-propriate policy"- proposed Anh.

UOB receives in-principle licence for Vietnamese subsidiary

21/JUL/2017 INTELLASIA | VIR

Singapore's United Overseas Bank has received the in-principle licence from the State Bank in Vietnam to open a subsidiary in the country.The bank will become the first Singaporean financial institution to set up a 100-per-cent foreign owned entity in Vietnam. This licence would enable UOB to extend its branch network beyond HCM City and offer its financial services to businesses and


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consumers in other cities.The Singaporean bank considers setting up a branch in Hanoi, which is Vietnam's gateway to fast-developing cities in the northern region, such as Hai Phong, Quang Ninh and Hai Duong.Wee Ee Cheong, deputy chair and CEO of UOB, said that the in-principle licence marks the start of a new chapter for the bank in Vietnam."We have had a longstanding presence in Vietnam and given our regional network, have over the pasttwo decades helped our clients across Asia to identify and to invest in business oppor-tunities in thecountry" Wee said.He added that with the in-principle licence, UOB looks forward to helping clients do business in Vietnam, one of the fastest developing countries in Asia.The bank also promises to support Vietnamese companies by connecting them to cross-border opportunities throughout extensive network.Business advisory services and financial solutions such as trade finance, cash manage-ment and project financing will also be made available to Vietnamese corporate clients.http://www.vir.com.vn/uob-receives-in-principle-licence-for-vietnamese-subsidi-ary.html

Foreign investor undergoing comprehensive review to acquire OceanBank

21/JUL/2017 INTELLASIA| VIETNAMFINANCE

Foreign investor is in the second stage of a comprehensive review for Ocean Bank, said Bui Huy Tho, director of the Department of Credit Institution and Banking Operation Licensing, Banking Supervision Agency, the State Bank of Vietnam (SBV)."You all know that the acquisition of a bank is not simple, assets and debts of a bank is very diversified. There are many in-depth assets such as credit contracts, guaranty contracts, payments and banking networks across the country"."As far as I know, foreign investor is in the second stage of a comprehensive review for Ocean Bank. This foreign investor is very serious about investing in Vietnam as a wholly foreign-owned bank", Tho said at Vietnam M & A Forum 2017.Regarding the acquisition of three zero dong banks, apart from OceanBank as men-tioned above, according to Tho, the remaining two banks are being asked by many do-mestic and foreign investors to take part in the restructuring, acquisition."SBV has initially agreed for domestic and foreign investors to approach banks to get initial information, to evaluate and make decisions in the following steps", Tho said.At the same time, Tho also emphasized that SBV and the government strongly encour-age domestic and foreign investors to participate in the restructuring of compulsorily acquired and ailing banks.

HSBC cuts Vietnam's GDP growth forecast to 6pct

21/JUL/2017 INTELLASIA | THE SAIGON TIMES

Vietnam's gross domestic product (GDP) growth quickened in the second quarter of 2017, but HSBC still revised down its full-year forecast for the country's growth from 6.4 percent to 6 percent due to a sluggish start in the first three months.HSBC in its report on July 19 said Vietnam's growth in the second quarter, at 6.2 per-cent year-on-year, accelerated quicker than its initial forecast due to a sharp increase in exports and industrial output, particularly in smart phones.The service sector, which accounts for the largest component of the country's GDP, was also stable. Overall, this year's higher-than-expected growth in April-June is promising for the rest of the year and the bank expected the economy to gain momen-tum on the back of stronger agricultural output and a pick-up in foreign direct invest-ment (FDI).However, HSBC also pared back its full-year forecast from 6.4 percent to 6 percent growth in 2017, due to the country's sluggish start in the first quarter.Growth in January-March hit a three-year low of 5.2%, in large part due to a slump in electronics exports. Samsung Electronics, which accounts for about 20 percent of the country's total shipments, ended production of its Galaxy Note 7 smart phone in Oc-


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tober, significantly affecting Vietnam's growth, according to the report.HSBC also cut its consumer price index (CPI) forecast for this year and next to 2.6 per-cent and 2.8 percent year-on-year from 4.4 percent and 4 percent respectively, in light of inflation's slowing trajectory during the beginning of the year.Inflation continued to cool on year-on-year terms for the fifth straight time in June and slowed 0.2 percentage point from the previous month. Core inflation, on the other hand, remained at 1.3 percent year-on-year in June, the same as May's figure.Overall, average headline inflation in the first half of the year still reached 4.1 percent compared to just 3.6 percent in the second half of 2016. The government targets an in-flation rate of below 4 percent for 2017.However, there remain upside risks in the latter half, as healthcare costs continue to rise in light of ongoing subsidy reforms. Moreover, the country's finance ministry fore-casts lingering upward pressure on prices, owing to potential salary hikes beginning July and possible unfavourable weather conditions in the latter part of the year, the bank commented.In general, Vietnam's hefty bounce-back in the second quarter reaffirms its strong eco-nomic footing, despite a sluggish start to the year.HSBC expected growth to gain momentum in the second half as foreign investment and agricultural production pick up. The country continues to receive steady FDI, which enables it to build international reserve buffers and hopefully diversify toward higher value-added manufacturing.The second quarter data, however, further highlights the country's reliance on indus-trial production and exports, particularly from the foreign invested sector, to maintain high growth. Overall, HSBC believed Vietnam's growth prospects remain promising, despite recent hiccups, and could be sustained with a positive external environment and continuing economic reforms.http://english.thesaigontimes.vn/55110/HSBC-cuts-Vietnam%E2%80%99s-GDP-growth-forecast-to-6.html

ADB upgrades Asian growth outlook while leaving Vietnam's unchanged

21/JUL/2017 INTELLASIA | VN ECONOMIC TIMES

Latest report notes slowdown in industry and construction behind bank's forecast for GDP growth staying as is.Economic growth prospects in developing Asia for 2017 have improved on the back of stronger-than-expected export demand in the first quarter of this year, according to a new Asian Development Bank (ADB) report.In a supplement to its Asian Development Outlook 2017 report, ADB upgraded its growth outlook in the region from 5.7 per cent to 5.9 per cent in 2017 and from 5.7 per cent to 5.8 per cent for 2018. The smaller uptick in the 2018 outlook reflects a cautious view on the sustainability of this export push.In Southeast Asia, however, its growth outlook remains at 4.8 per cent for 2017 and 5 per cent for 2018 despite revisions for four of its economies. High growth in Malaysia, the Philippines, and Singapore is dampened somewhat by disappointing growth in Brunei Darussalam. Robust domestic demand, particularly private consumption and investment, will continue to support economies in the region.Higher public investment boosted first quarter growth in the Philippines and Thai-land, while private investment was strong in Malaysia and Vietnam. Exports rebound-ed in Indonesia, the Philippines, Malaysia, and Vietnam but the growth outlook for Vietnam remains at 6.5 per cent for 2017 and 6.7 per cent for 2018.An unexpected decline in mining and quarrying output dragged Vietnam's GDP growth lower to 5.1 per cent in the first quarter of 2017 from 5.5 per cent in the same quarter of 2016. Industry and construction expanded by only 4.2 per cent, well below 7.2 per cent growth in the same period of last year.Other sectors remained strong. Services recorded higher growth than a year earlier, coming in at 6.5 per cent against 6 per cent in the first quarter of 2016. As expected, ag-riculture recovered to 2 per cent growth from a 1.3 per cent contraction in the same pe-riod last year.


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Foreign direct investment into Vietnam continues to increase, with disbursements by the end of the first quarter estimated at $2.7 billion, up 4 per cent against the same time last year and accounting for 6.5 per cent of GDP. The new report retains the growth forecast at 6.5 per cent for 2017 and 6.7 per cent for 2018. These will be revisited, how-ever, if the industry and construction sector remains sluggish.http://vneconomictimes.com/article/vietnam-today/adb-upgrades-asian-growth-out-look-while-leaving-vietnam-s-unchanged

Agro-forestry-fishery exports target $35 billion next year


The agricultural sector will aim for a GDP growth rate of between 3 3.1 percent and total export value of agro-forestry-fisheries at $34 35 billion in 2018.Minister of Agriculture and Rural Development Nguyen Xuan Cuong recently or-dered his ministry's subordinate agencies and localities to step up making develop-ment plans for the sector and each field in 2018 towards achieving the overall goals.Other targets for 2018 include an increase of 3.3 3.5 percent in production value of the whole agricultural sector, a forest coverage of 41.6%, and 37 percent of all communes recognised as new-style rural areas.Regarding crop cultivation, the minister told the agencies and localities to seek ways to reach a production value growth rate of 2.5 3 percent and export revenue of at least $16 billion.Meanwhile, animal husbandry and fisheries should try to expand the production val-ues by 4 5 percent and 6%, respectively, next year. The overseas shipments of aquatic products are expected to earn some $7.5 billion.The sector plans to increase the forestry production value by 5.5 6 percent and bring home $7.5 7.7 billion from the export of forestry products.In the first half of 2017, Vietnam earned $17.1 billion from shipping agro-forestry-fish-ery products abroad, up 13.1 percent year-on-year. The figure was $32.1 billion in 2016, according to the ministry.http://english.vov.vn/economy/agroforestryfishery-exports-target-us35 billion-next-year-354980.vov

Vietnam's exports to Algeria grow 37pct


Vietnam's export revenue to Algeria rose 37 per cent year-on-year to $190 million in the first half of the year.The figures were revealed by the Vietnamese Commercial Affairs Office in Algeria un-der the Ministry of Industry and Trade.Key shipments included nearly 32,000 tonnes of coffee valued at more than $68 million (up 27 per cent), telephones and spare parts at more than $52 million (up 5 per cent) and nearly 26,700 tonnes of rice at $10 million, quadrupling the value in the same pe-riod last year.Algeria is Vietnam's second largest importer in Africa, following South Africa.Vietnam-Algeria economic cooperation prospects are plenty, with Algerian consum-ers familiar with Vietnamese goods, while Algerian animal feed, medicine and natural minerals are sold in Vietnam.In terms of investment, the Bir-Seba gas and oil joint venture between PetroVietnam, Sonatrach (Algeria) and PTT (Thailand) became operational in 2015, producing 18,000 barrels per day.http://bizhub.vn/news/viet-nams-exports-to-algeria-grow-37_287720.html

Vietnam, Pakistan, Burma to drive 2018 global rice exports

21/JUL/2017 INTELLASIA | VOV

Global rice trade has been projected to increase 1 percent to 42.3 million metric tonnes in 2018, the third highest on record and the second consecutive year of expanded trade, according to the US Department of Agriculture.The USDA Economic Research Service noted that a major factor behind the enlarged trade in 2018 is projected increased exports from three of the top six global exporters-Vietnam, Pakistan, and Burma.


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Exports of Vietnam for 2018 are expected to increase 400,000 metric tonnes, to 6 mil-lion, due to increased demand from Southeast Asia, especially the Philippines. China is again forecasted to be the country's largest export market.Pakistan is projected to export 4.1 million metric tonnes of rice in 2018, up 100,000 met-ric tonnes from a year earlier, a result of a slightly larger crop, the USDA said.Burma is expected to export 1.7 million metric tonnes of rice in 2018, up 100,000 metric tonnes from 2017, primarily due to stronger demand from regional buyers and the EU.In contrast, exports for India are projected to drop 500,000 metric tonnes in 2018 due to a smaller crop and stronger domestic use.According to the USDA, Thailand exports are expected to be flat in 2018, while US rice exports are projected to decline 50,000 metric tonnes because of higher prices and tighter supplies.http://english.vov.vn/economy/vietnam-pakistan-burma-to-drive-2018-global-rice-exports-354972.vov

India firms seek to boost textile machinery exports to Vietnam


Vietnam is a potential market to which Indian businesses are seeking opportunities to boost export of textile machines and equipment, said N.D. Mhatre, director general (Technical) of the Indian Textile Accessories and Machinery Manufacturers Associa-tion (ITAMMA).As one of the world's leading textiles and garment exporters, Vietnam has a growing demand for machinery and equipment, thereby creating big opportunities for Indian firms, Mhatre at a Vietnam-Indian business exchange programme co-held by ITAM-MA and the Consulate general of India in HCM City on July 20.The director noted that India's export turnover of textiles-garment machinery and equipment surpassed 400 million USD in 2016, but its earnings from Vietnam reached only 400,000 USD.Therefore, Indian enterprises wish to boost trade promotion and business networking in the garment and textiles sector in order to build up long-term cooperative ties, he added.In addition, ITAMMA plans to set up a textiles-garment technology centre in HCM City to introduce machines, equipment and provide after-sale services to Vietnamese customers. It will also serve as a venue for the two countries' businesses to exchange and update on the latest technologies in the field.Participants shared a view that Indian businesses have opportunities to supply ma-chines and equipment with affordable prices to the Vietnamese market as machines imported from Europe have high prices.Nguyen Thi Tuyet Mai, vice general Secretary of the Vietnam Textile and Apparel As-sociation (VITAS), also affirmed that India is an important trade partner of Vietnam in the field of garment-textiles and machinery, while Vietnam is a potential market for In-dian businesses.This is a convenient time for Vietnamese and Indian companies to enhance coopera-tion in the garment-textiles sector, she said, suggesting that Indian firms should work with Vietnamese fabric and textile factories to create material supply chains in Viet-nam, bringing long-term benefits to both sides.http://en.vietnamplus.vn/india-firms-seek-to-boost-textile-machinery-exports-to-viet-nam/115151.vnp

HCM City's industrial production index rises 7.51pct


HCM City's index of industrial production (IIP) in the first six months of this year in-creased 7.51 percent compared to the same period last year, reported the municipal Department of Industry and Trade at a conference on July 19.The IIP of four key sectors, including mechanical manufacturing industry; food processing; chemicals-plastic-rubber; and electronics-information technology, contrib-uting 4.56 percent points to the growth, rose 10.23 percent.In the period, industrial and export-processing zones in the city attracted total invest-


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ment worth 384.32 million USD, a year-on-year increase of 39.36 percent.According to the HCM City Export Processing and Industrial Zone Authority, policies on land for industrial production remain unattractive to investors.Municipal authorities were urged to accelerate land-clearance work and resettlement to facilitate industrial projects, and devise policies to support industrial enterprises by connecting them with banks.-http://en.vietnamplus.vn/hcm-citys-industrial-production-index-rises-751-percent/115125.vnp

Hanoi's agri-production hits over 818 million USD in 6 months


Hanoi's agro-forestry-aquaculture production value surpassed 18.6 trillion VND (about 818.4 million USD) in the two first quarters of this year, up 2.85 percent against the same period last year, heard a conference on July 19.The city also performed well in building new-style rural areas, which helps improve living standards for locals.Average per capita income in rural areas in Hanoi reached 36 million VND (1,583 USD) per year.Addressing the conference, vice Chair of the municipal People's Committee Nguyen Van Suu asked the municipal Department of Agriculture and Rural Development to take measures to maintain the growth rate in all areas of the agricultural sector.He also asked for enhanced efforts to prevent floods and protect dykes during the on-going rainy season.http://en.vietnamplus.vn/hanois-agroproduction-hits-over-818 million-usd-in-6-months/115122.vnp

Small agri production must end


Vietnam's agriculture sector needs to end the practice of small-scale production and reorganise it on a larger scale towards high-tech agriculture, the "Reorganising Agri-cultural Production" seminar, held prior to the second Vietnam Private Sector Forum (VPSF) at the end of this month, heard. Tran Manh Bao, Chair of VPSF's Agriculture Working Group and the Thai Binh Seed Company, told the seminar that Vietnam's agricultural production needs to be reor-ganised with a greater focus on businesses rather than farmers."Agricultural production in Vietnam is still very fragmented," he said. "For businesses like us, if we want to have 100 ha of land for agricultural production, we must sign deals with 1,000 households, which creates obstacles in the production process."What businesses need is support in administrative procedures on land, taxes, and technology. "Investment in agriculture is risky, so tax policies should be improved," he said.One of the most important issues relates to markets, according to Nguyen Khac Hai, CEO of the PAN Group. Domestic enterprises have little knowledge about foreign markets, so the government should introduce mechanisms for cooperation and ex-changes of experience. Nguyen Hoang Anh, general director of the Central Fisheries Investment Company, said that, to reorganise production, there must be clear plans for agricultural develop-ment. There should also be a clear set of criteria in each agricultural sector and appro-priate mechanisms and policies for each field."In my 20 years in the fisheries industry, I have found that business support policies are far different in reality," he said. "The policy mechanism for application is also in-correct." Reorganising agricultural production and developing a set of criteria for high-tech agriculture development is important, he emphasized.The second VPSF is to take place in Hanoi at the end of this month and will be chaired by prime minister Nguyen Xuan Phuc and attended by leaders from the government, departments, international organisations, and business associations.With theme "From Central Resolution 5 to the Action Programme of the Private Sector in Vietnam", the session will focus on discussions and dialogue between the govern-


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ment and the private sector in three key national spheres: agriculture, tourism, and the digital economy.The VPSF is an initiative from the Vietnam Young Entrepreneurs' Association and the Mekong Business Initiative (MBI), funded by the Asian Development Bank (ADB) and the Australian government.The forum is a bridge between the government, public authorities, and the private sec-tor for continuous and close consultation on public and private policy, based on the gathering and reflection of voices from enterprises.The forum this year is expected to see 1,000 delegates in attendance, including those from the government, ministries, departments, international organisations, and busi-ness associations, as well as economic experts and numerous CEOs from Vietnamese and foreign enterprises.http://english.vietnamnet.vn/fms/business/182394/small-agri-production-must-end.html

Petrol prices increased by over 300 VND per litre


The ministries of industry and trade and finance decided to raise retail petrol prices as of 3 p.m on July 20.The retail price of RON 92 increased by 357 VND to trade at a maximum of 16,426 VND (0.72 USD) per litre. The price of E5 bio-fuel rose by 333 VND to trade at the ceiling price of 16,251 VND (0.71 USD) per litre.Diesel 0.05S will be sold at the maximum price of 13,329 VND (0.58 USD) per litre and kerosene at 11,936 VND (0.52 USD) per litre.The average global price of RON 92 during 15 days to July 20 was 57,856 USD per bar-rel while that of diesel 0.05S was 59,918 USD per barrel.http://en.vietnamplus.vn/petrol-prices-increased-by-over-300-vnd-per-litre/115138.vnp

Domestic materials for E5 fuel in short supply

21/JUL/2017 INTELLASIA | VIETNAMNET

The Ministry of Industry and Trade (MOIT) estimates that from January 1, 2018, when Vietnam shifts from using RON 92 to RON 95 and E5, total E5 consumption volume would be around 5.357 million cubic meters, or 70 percent of total fuel demand.In 2016, Vietnam consumed 7.4 million cubic meters of petrol, including 590,000 cubic meters of E5 biofuel, which accounted for 8 percent of total consumption. The remain-ing was mineral petrol, accounting for 92 percent. Of this, 30 percent of the consumed fuel was RON 95 and 70 percent RON 92.Also according to MOIT, ethanol, the material for mixing E5, comes mostly from two plants of Tung Lam Company Ltd with total capacity of 200,000 cubic meters per an-num (200 million litres). This is enough to create 3.9 million cubic meters, or 3.0 million tonnes of E5 a year.In 2016, Tung Lam sold 2,000 cubic meters in the market.Besides the two plants of Tung Lam, there are also two plants with the capacity of 100,000 cubic meters (100 million litres) per annum in Dung Quat and Binh Phuoc. Meanwhile, the plant in Phu Tho has filed for bankruptcy.The two plants have suspended production because there is still no market for the products. MOIT believes that the two plants will resume operation by the end of 2017 at the latest.Of 26 key petroleum traders, five have the E5 mixing system in operation. These in-clude Petrolimex, PV Oil, Saigon Petro, Mipec and Nam Song Hau Petroleum Trade & Investment.Two other traders have set up mixing stations but still have not put stations into oper-ation. They are Petimex and Thanh Le Import/Export Corporation.The total capacity of the 5 operational and 2 non-operational mixing systems is 6.2-6.7 million cubic meters per annum.As such, the ethanol material supply would be not enough to make E5 to satisfy do-mestic demand.


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Petrolimex now has five mixing stations located in five provinces and in Hanoi, Hai Phong, Da Nang, HCM City and Can Tho, with total capacity of 1.055 million cubic meters per annum.The distributor is upgrading several existing mixing stations and setting up more sta-tions in some cities and provinces to raise the total capacity to 3-3.4 million cubic me-ters per annum.PV Oil has 12 stations in nine provinces and cities which have capacity of 89,000 cubic meters in total, or 1.068 million cubic meters a year. In the future, once the number of stations increases to 17 as planned, the total capacity would be 1.668 million cubic me-ters.Though the material supply is still not enough, MOIT said the E5 supply can satisfy the demand once Vietnam replaces RON 92 with E5.http://english.vietnamnet.vn/fms/business/182234/domestic-materials-for-e5-fuel-in-short-supply.html

Power price hike must be closely checked, says deputy PM


Any adjustments of power rates will be carefully weighed to ensure gross domestic product (GDP) growth will not be affected, deputy prime minister Vuong Dinh Hue said in a dispatch issued on July 19.According to Official Dispatch 496/TB-BCDDHG signed by deputy minister of Finance Dinh Tien Dung, who also serves as vice head of the Steering Committee for price con-trol, the deputy prime minister ordered that any price hikes of key input factors should be closely checked so as not to adverse affect economic growth.The Ministry of Industry and Trade was asked to complete plans for electricity price adjustments with impacts on inflation and economic development taken into account. If electricity prices need to be raised, the increase must be kept as low as possible.The Ministry of Finance was assigned to review and adjust prices of coal used for elec-tricity production. Meanwhile, oil and gas prices will be controlled by the Ministry of Industry and Trade and the Ministry of Finance in accordance with government De-cree No. 83/2014/ND-CP.The dispatch also provided specific pricing plan for healthcare services not covered by the health insurance fund, training and aviation services, logistic services at seaports, transport fees for road projects developed under the build-operate-transfer (BOT) for-mat, medicines for humans and dairy products for children under six years old.The official dispatch asked the State Bank to keep monetary policy flexible to control inflation. The bank shall take measures to ensure appropriate credit growth and core inflation rate at about 1.6%, and stable exchange rates and foreign currency market.Deputy prime minister Vuong Dinh Hue asked the taskforce for macroeconomic man-agement, which groups representatives of the Ministry of Finance, the State Bank, the Ministry of Planning and Investment and the General Statistical Office, to work with related ministries and agencies to prepare scenarios for price adjustments to achieve the price control target in the year's second half.http://english.thesaigontimes.vn/55116/-Power-price-hike-must-be-closely-checked-says-deputy-PM.html

Vietnam expecting fewer power cuts for the rest of 2017

21/JUL/2017 INTELLASIA | TUOITRE NEWS

There will be considerably fewer power cuts for the remaining months of 2017 as state-owned power company Vietnam Electricity (EVN) expects to achieve a higher level of redundancy in electricity supply.EVN's total power supply in the remaining half of this year is expected to be 102.1 bil-lion kilowatt-hours (kWh), sourced from both its power plants and electricity purchas-es from neighbouring countries.The power corporation expects to sell 92.1 billion kWh of electricity to the market over the same period, leaving it with an excess supply of ten billion kWh.EVN is the largest power company in Vietnam, supplying most of the electricity con-sumed by the local market, as well as selling energy to Laos and Cambodia.


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In the first half of 2017, the corporation invested in projects worth over VND53.67 tril-lion (US$2.36 billion), including one hydropower plant in north-central Thanh Hoa Province and one thermal power plant in southern Tra Vinh Province.Eighty-five EVN-invested projects to construct power grids with a voltage of 110-500 kilovolts (kV) were completed in the first six months of 2017, with 64 other projects commenced so far this year.According to EVN, there was a 47 percent reduction in its System Average Interrup-tion Duration Index (SAIDI) in the first half of 2017 compared to the same period last year.SAIDI is the average outage duration for each customer served, measured in units of time, often minutes or hours.Specifically, EVN's SAIDI over the first six months of 2017 was 428 minutes.The company generated and purchased a total of 94.9 billion kWh of electricity in the first half 2017, a 7.23-percent increase year-on-year.EVN sold 82.9 billion kWh of electricity over the same period, 8.47 percent more than the first half of 2016.http://english.vov.vn/economy/vietnam-expecting-fewer-power-cuts-for-the-rest-of-2017-354930.vov

Appropriate policies needed to unlock $35b tourism industry


Vietnam has great tourism potential but the country needs appropriate policies to cre-ate breakthroughs to develop tourism into a spearhead industry and affirm its position on the global tourism map, experts have said.At a recent conference, experts discussed measures to remove difficulties to unlock the $35 billion industry in preparation for the second Vietnam Private Sector Forum (VPSF), which will take place in Hanoi at the end of this month.Tran Trong Kien, head of the working group on tourism of VPSF, said promotion was critical to boost tourism but had not been paid adequate attention.Kien said Vietnam spent $2 million on promoting tourism, which was modest in com-parison with other countries in the region.In addition, Vietnam needed to develop a sustainable and friendly tourism industry to encourage tourists to return.Kien said openness on policies about visa and investments in the country's tourism in-frastructure remained limited.According to Hoang Nhan Chinh, general secretary of VPSF's tourism working group, visa policies should aim to create favourable conditions for foreign tourists.Chinh proposed to extend the visa exemption duration to 30 days from the beginning of the third quarter of this year.In addition, visa exemption should also be granted to tourists from Australia, Canada, Holland and New Zealand, as well as Belgium and Switzerland, who spent on average $1,200 per tourist, he said.Chinh added that these six countries were currently granted visa exemption by 170 countries.Vietnam should also promote granting e-visas to foreigners entering the country, he said.Vu The Binh, deputy president of the Vietnam Tourism Association, said Vietnam should open its visa policies further, adding that openness on visa policies would dem-onstrate Vietnam's integration with the world.Binh also said a fund to support tourism development should be created.According to Nguyen Quoc Ky, general director of Vietravel, the tourism industry will generate some $35 billion and create two million jobs for the economy by 2020, and, therefore, deserves investment by the government to boost development.The government should pay attention to developing a tourism strategy and issuing policies to create a sustainable tourism environment, in addition to promotion and visa policies.In the first half of this year, Vietnam welcomed 6.2 million foreign tourists, increasing


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by more than 30 per cent over the same period last year.2017 VPSF will discuss three spearhead industries of Vietnamagriculture, digital econ-omy and tourism.http://bizhub.vn/news/appropriate-policies-needed-to-unlock-35b-tourism-industry_287722.html

Workers over 35 squeezed out of jobs at foreign-invested firms


According to a general Confederation of Labour survey, there are about 300 industrial zones (IZs) and export processing zones (EPZs) throughout the country, attracting 2.8 million workers.Foreign Invested Enterprises (FIEs), when recruiting workers, tend to choose those aged 15-18 and will not accept workers who are over 35 years old.In order to avoid the charge of violating the labour law, FIEs plead low demand, ren-ovation of technology or changes in business location to terminate labour contracts with workers who are over 35.In many cases, employers lay off workers without stating any reason.Nguyen Huu Tri from the Institute of Sociology and Management Sciences comment-ed that this is the other side of the 'FDI (foreign direct investment) medal'.Tri said FIEs lay off workers aged over 35 because the workers have worse health than young workers. Since they have been working for enterprises for a longer time, em-ployers have to pay higher salaries and allowances."FIEs prefer young workers to economise on production costs and to have higher pro-ductivity," he explained."It is a growing tendency for FIEs that they will step by step replace the labour force," he said. "They will only retain the older experienced high-ranking managerial staff."A labour expert warned that the refusal by FIEs to use workers over 35 is a waste of the labour force, leading to increased unemployment risk.The workers over 35 don't have many opportunities to find new jobs if they are sacked by employers. They cannot return to their home villages to farm because the land has been used to build industrial zones.Tri commented that Vietnam, in an effort to attract as much FDI as possible, offers many investment incentives to investors. In many cases, though courts have decided that FIEs must rehire laid-off workers, workers cannot return because FIEs place road-blocks for them.Le Si Thiep from the National Academy of Public Administration commented that it is necessary to tighten management over FIEs to avoid problems in labour relations. He said Vietnam has a legal framework on the issue, but the laws have not been strictly obeyed.Experts commented that tax incentives offered by Vietnam to foreign investors help at-tract business and improve the competitiveness of the country. However, when things go beyond the framework, there will be a "competitive race to the bottom".http://english.vietnamnet.vn/fms/business/182136/workers-over-35-squeezed-out-of-jobs-at-foreign-invested-firms.html

HCM City aims to have 100MW of renewable energy by 2020


HCM City expects to generate 100MW of electricity from renewable resources by 2020 as many investors have expressed their keen interest in this field in the city, according to the HCM City Department of Industry and Trade.At a meeting with HCM City Party Secretary Nguyen Thien Nhan at Go Cat waste-to-energy plant on July 19, an official of the department said that the city holds high po-tential to produce energy from sunlight, waste and wind. The World Bank, after con-ducting a survey of one million households in the city, has concluded that about 50 percent of roofs of houses can be fitted with solar panels.Many enterprises also want to invest in solar power projects in the city after new pol-icies on the price of solar power were issued.A financial investor in HCM City told the Daily that it will inject $40 million into Hy-


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draulic-Machine Co Ltd to develop the 20- MW Go Cat waste-to-energy plant in Binh Tan District.The plant is expected to bring about great economic benefits as the investor can recoup investment within five years from both industrial waste treatment fees and electricity generation.The amount of garbage discharged in the city increases 5 percent a year and many landfills have been full and closed.In addition, the city can also develop a wind power plant in Can Gio District.According to data of the Department of Industry and Trade, capacity of renewable en-ergy in the city remains modest with 2.4MW from Go Cat plant, 1.5MW of solar power from buildings, households and enterprises and 2MW from a trial waste-to-energy plant in the Da Phuoc Waste Treatment Complex.http://english.thesaigontimes.vn/55123/HCM City-aims-to-have-100MW-of-renewa-ble-energy-by-2020.html

PM asks Ben Tre to prioritise land funds for investors


Prime minister Nguyen Xuan Phuc urged Ben Tre to prioritise land funds for investors while attending an investment promotion conference in the Mekong Delta province on July 20.To attract investors, the province should also ensure supply of electricity, develop transport system and providing high-quality human resources, the PM said.He stressed that local authorities should accompany businesses, share their concern and work together with them to remove difficulties.PM Phuc particularly pointed to the motto of turning threats into opportunities.For example, Ben Tre is one of the localities hardest hit by climate change, so the prov-ince must seek new policies, technologies and connectivity models to cope with the threat, the PM said.He added that during his recent official visit to Japan, the government had signed an agreement with Japan on a water management project in Ben Tre worth nearly 9 tril-lion VND (396 million USD).In the coming time, PM Phuc will chair a meeting with the participation of the Neth-erlands' government to study ways to adapt to climate change and rising sea level in southwest provinces, including Ben Tre.He suggested Ben Tre boost socio-economic development based on the sea and river system, one of the local advantages.Phuc also hailed the idea of connecting Mekong Delta localities, which was recently discussed by Ben Tre, Tien Giang, Tra Vinh and Vinh Long provinces, saying the gov-ernment strongly supports such cooperation model.Mentioning the specialty of Ben Tre coconut, PM Phuc said he hopes Ben Tre will be-come a coconut metropolis of Vietnam with regional-level processing industry and high economic values.Apart from these solutions, the PM also emphasized on improving the quality of sea-food processing and shrimp breeding via high technology.As one of the leading localities in the nation's start-up movement, Ben Tre hopes to cre-ate a start-up community in the time ahead.In 2017-2020, the province will invite investors for 63 projects, mainly in construction and infrastructure at industrial parks, industrial clusters, tourism, markets, supermar-kets and trade centres, urban and residential areas, agriculture, rural areas, renewable energy, education, water drainage system, and solid waste treatment.Since the beginning of this year, the locality has granted investment licences to 25 projects with a total registered capital of 17 trillion VND (748 million USD).http://en.vietnamplus.vn/pm-asks-ben-tre-to-prioritise-land-funds-for-investors/115141.vnp


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New HCM CityCan Tho rail line under consideration


New line would cut trip to 45 minutes compared to three hours by road.Authorities in HCM City are working with their counterparts in Mekong Delta prov-inces and especially those in the local hub of Can Tho city to review the construction of the HCM CityCan Tho railway line, which if approved would provide a significant boost to local development.At speeds of 200 km/h, travel time on the new line would be shortened to 45 minutes from the three hours it now takes by road.The line is expected to run parallel to National Highway No.1 and pass through a se-ries of emerging urban areas that cover some 11,720 sq km and are home to 14 million people.The project was originally aimed at alleviating the high transport demand on roads and waterways. It will also have a positive impact on the socioeconomic development of the two cities as well as neighbouring provinces such as Long An, Tien Giang, and Vinh Long provinces.Total investment is estimated about $5 billion and the line may be completed and opened by the end of 2024.According to the Japan International Cooperation Agency (Jica), by 2030, the volume of passenger and freight transport from HCM City to Can Tho will increase 4.8-fold and three-fold compared to 2008. HCM City is the centre of the southern key economic region while Can Tho is the centre of the key economic region in the Mekong Delta. The new railway line would connect the two major centers and bolster economic de-velopment and national defense and security.http://vneconomictimes.com/article/society/new-hcmc-can-tho-rail-line-under-con-sideration

Vietnam borrows funds from Japan to cope with salinity intrusion


Vietnam on Tuesday cut a deal with the Japan International Cooperation Agency (Jica) to borrow ODA loans of about 24.3 trillion yen, or some $215 million, for building sa-linity intrusion prevention works in the Mekong Delta province of Ben Tre.The Ben Tre Water Management Project, as it is officially referred to, is aimed to devel-op saline water intrusion control facilities in the southern province, where salinity in-trusion has been damaging crops.Annual interest rate of the loans is 0.3 percent for the construction components of the project and 0.01 percent for design consulting service components. The repayment and grace periods are 40 and 10 years respectively.Invitation for consulting bidders including detailed design work will be issued in Sep-tember, while tender announcement of initial procurement package for international competitive bidding on project construction will be issued in May next year.After being completed in October 2018, the project will improve agricultural produc-tivity in the region by allowing farmers access to less saline water, thus helping allevi-ate adverse effects of climate change and improving local residents' livelihood.The Mekong Delta region is Vietnam's largest food production area, producing more than half of the country's food. Ben Tre Province in particular is strong in rice, coconut, orange and lemon production.Agriculture accounts for 44 percent the province's gross domestic product (GDP) com-pared to the average 18 percent of the country.However, climate change and other factors have led to devastating salinity in the Me-kong River in recent years, resulting in a reduction in both crop yield and quality. In 2015 along, saline water intrusion caused losses of some VND1.5 trillion.http://english.thesaigontimes.vn/55121/Vietnam-borrows-funds-from-Japan-to-cope-with-salinity-intrusion.html

Private companies' influence on economy growing


As Thaco's car sales decreased, the Quang Nam province's budget revenue suddenly dropped by VND3 trillion. This news has been cited by economists to show the role of


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large private conglomerates in the economy.A representative of the province has recently revealed the possibility of the loss of VND3 trillion in local budget revenue because of the decrease in Thaco sales.The 100 percent Vietnamese-owned automobile manufacturers in the first months of the year sold 5,000 cars monthly, but sales have dropped to 3,000 since March.Meanwhile, analysts warned that sales would continue decreasing towards the end of the year, because buyers tend to delay their purchase plans, hoping that the car prices would be decreasing after January 1, 2018, when Vietnam cuts the import tariff from Asean under the framework of Afta.As car sales declined, the profit made by Thaco also decreased and the automobile manufacturer only paid VND6.7 trillion in tax in the first half of 2017, equal to 70 per-cent of the plan (VND9.6 trillion).The representative said though the local taxation agency has been trying ways to offset the decrease in the tax payment from Thaco and cut expenditures, the local budget will still lack VND1.6 trillion.In 2016, the local budget revenue was VND19.45 trillion, of which Thaco alone paid VND14.5 trillion, or 74.6 percent.Quang Nam is not the only province which has a local budget heavily dependent on several large conglomerates.In 2016, Ninh Binh provincial budget revenue reached VND6.6 trillion, the highest so far. Dinh Van Dien, chair of Ninh Binh, stressed that Hyundai Thanh Cong made a big contribution to the budget revenue.Since its establishment in 2007, Hyundai Thanh Cong has always been among the top taxpayers in the locality. The automobile manufacturer located in Gian Khau Industri-al Zone has created 8,000 jobs and paid VND7 trillion to the state budget.Analysts commented that Thaco and Hyundai Thanh Cong can show the power of pri-vate Vietnamese conglomerates.Pham Chi Lan, an economist, commented that the private sector has been operating ef-fectively, with an impact on the economy. Vingoup, Vinamilk, Masan and Thaco were the companies cited by Lan."This is the way private economic groups develop. Vietnam really needs such con-glomerates," she commented.According to GSO, in 2005-2015, the private sector made a big leap with turnover soar-ing form VND343.883 trillion in 2005 to VND1,202 trillion.Meanwhile, Vietnam Report 2016 showed that private businesses made up 30 percent of VND90 trillion of tax paid by the 1,000 biggest taxpayers.http://english.vietnamnet.vn/fms/business/182138/private-companies--influence-on-economy-growing.html

How many private businesses are there in Vietnam?


The statistics on the number of private businesses released by state management agen-cies vary.According to GDT (General Department of Taxation), as of June 30, 2017, Vietnam had 596,713 operating businesses, an increase of 28,945 businesses, or 5.1 percent compared with December 31, 2016However, the Ministry of Planning & Investment (MPI) gives other figures.A report of GSO, an arm of the ministry, released in late April said by December 31, 2015, there were 442,485 businesses, with the number of businesses in 2000-2015 in-creasing by 17.6 percent per annum. The growth rates were 21.8 percent in 2000-2010 and 9.6 percent in 2010-2015.Meanwhile, according to the Administration of Business Registration, also belonging to MPI, 110,000 new businesses were set up in 2016, an increase of 16.2 percent over 2015.According to the agency, in the first six months of the year, Vietnam had 61,276 newly registered businesses, while 15,379 businesses returned to operation, which means that the total number of newly set up businesses and the businesses resuming opera-


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tion were 76,700.A research study conducted by the Central Economics Committee released recently showed that Vietnam has 535,920 businesses operating in accordance with the Enter-prise Law, with a growth rate of 10.5 percent. At least 96 percent of them are privately run.According to MPI's Enterprise Development Agency, 98.6 percent of private business-es have small and medium scale, the majority of which are small and very small, while the number of medium sized enterprises account for 1.6 percent.If classifying the businesses in accordance with the labour force scale, 97.7 percent of businesses would be small and medium, but in accordance with the capital scale, the figure would be 94.8 percent.The average fixed asset of the enterprises is VND7-8 billion per business, a figure which has not changed in many years.The performance of private businesses in Vietnam has been declining for more than a decade. In 2000-2014, the average number of workers decreased from 28.3 in 2000 to 18.4 in 2014.Meanwhile, the figures have increased from nearly 360 to 505 for SOEs and from 268 to 312 for FIEs.While the average capital of every private business increased by eight times from VND3 billion in 200 to VND25 billion in 2014, SOE capital increased by 17 times, from VND126 billion to VND2.165 trillion and for FIEs by 2.3 times from VND157 billion to VND363 billion.The Central Economics Committee noted that the increase in the investment capital of the private sector is not in line with the increase in productivity. The ROI of private businesses has decreased from 1.9 percent in 2010 to 1.2 percent in 2014, which is just equal to one-fifth of FIEs and half of SOEs.http://english.vietnamnet.vn/fms/business/182137/how-many-private-businesses-are-there-in-vietnam-.html

Why do Vietnamese businesses always fear of failure?

21/JUL/2017 INTELLASIA| NHIP CAU DAU TU

The business environment is controlling business and start-up operations. This makes the "fear of failure" index when doing business in Vietnam become a big challenge, de-spite the government's reform efforts. The government's determinations to improve the business environment in 2014- 2015 gradually regained the confidence of business people, contributing to pulling the "fear of failure" index when doing business in Viet-nam to 45.6 percent in 2015.However, as per the assessment of the Global Entrepreneurship Monitor (GEM) project, Vietnam's "fear of failure" index has always been high, amounting to 56.7 per-cent in 2013, the second highest among 70 surveyed economies. Efforts to improve the business environment of the government in the two following years were only enough to lift the index to the eighth position out of 60 countries in 2015.Vietnam's business environment in 2017 increased nine notches, from 91 to 82, and is one of the countries with the best improvement in rankings, after Brunei (up 25 notch-es) and Indonesia (up 15 notches), according to World Bank's ratings. This achieve-ment is mentioned in most domestic and international economic conferences but is not enough to fill the "fear of failure" when doing business in Vietnam."Corruption, copyright and time to complete procedures are the three biggest issues that make people afraid of doing business in Vietnam", said Prof Nguyen Mai, Chair of the Association of FDI businesses. The total foreign direct investment (FDI) into Vi-etnam in the first six months rose 54.8 percent over the same period of 2016, showing that the attractiveness of investment environment and the competitiveness of the Viet-namese economy are important factors in the investment decision of FDI businesses. However, it is easy to see that capital inflows into Vietnam are still lacking US and EU investors while Japanese and Korean investors are taking turns to dominate.Being cautious with capital is always the essence of Western investors when investing, especially in a developing country like Vietnam. The survey about Vietnam's market


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of US businesses still takes place until now with the gradually decreased frequency.A delegation of 29 leading US corporations came to Vietnam in March 2017, but only to examine the government's reform process on improving the business, investment climate and to propose changes in economic policies related to businesses doing busi-ness in the country. So far, the United States has never ranked No. 1, only No.7 out of 101 countries and territories investing directly in Vietnam.Fear of failure when doing business in Vietnam is having a negative impact on Viet-nam's start-up index. This index, according to the World Bank, has fallen 10 notches.Dr Luong Minh Huan, Institute for Business Development, said that fear of failure is one of the important barriers that many people have not embarked on start-up busi-nesses despite having seen opportunities. Vietnam is a resource-based country but the proportion of people intending to start a business is low. Meanwhile, the percentage of Vietnamese people confident in their ability to do business is declining.In 2015, 56.8 percent of interviewed adults in Vietnam self-assessed that they had enough knowledge, skills and experience to start a business, which was lower than the 58.2 percent in 2014 and was still higher than the 48.7 percent in 2013. This shows that the fears about the competitiveness in business are increasingly fierce, especially when Vietnam integrates deeply into the world economy.Vietnam has two groups that motivate individuals to start their own business i.e. for the vital needs of life and to capitalise on business opportunities to improve them-selves.In 2015, the percentage of Vietnamese people starting their own businesses to take ad-vantage of the opportunity also accounted for the majority with 62.6 percent and only 37.4 percent of the people started their business because there was no better job choice.Although start-up motives for life's essential needs are still a minority in Vietnam, this compares well with surveyed countries, ranking the seventh out of 60 countries. "More than a third of Vietnamese have started their own businesses because there is no better job choice", Dr Huan estimated.The expert at the Business Development Institute also considers the purpose of taking advantage of the opportunity in more detail. According to him, the Vietnamese people mainly start their own businesses to increase income, accounting for 46.9%, compared to only 11 percent to be more independent.Meanwhile, the average rate is 26.6 percent and 19.6 percent respectively in the coun-tries of phase I, 26.5 percent and 22 percent in the countries of phase II, 28.4 percent and 26.1 percent in the countries of phase III. This indicates that the majority of Viet-namese people involve in businesses to earn a living or take advantage of the oppor-tunity to increase their income.According to Dr Huan, there is difference in the start-up business sector among com-mercial and service sectors by level of development. In resource-based countries, the rate of start-ups in service sectors is always the lowest, while the rate of start-ups in commercial sector (wholesale/retail) is the highest. This situation is also taking place in Vietnam, a resource-based country.Vietnam hit 110,000 businesses in 2016, but achieving the target of one million busi-nesses by 2020 will be much tougher in the context that the fear of failure when doing business in Vietnam is on the rise because as per economist Pham Chi Lan, the most obvious impacts to the difficulty of businesses is almost unresolved from 2011 to now.There are many difficulties in mechanisms and policies affecting the operation of busi-nesses at the same time. According to Lan, if businesses want to have tasks accom-plished, they have to make facilitating payments but this way only partially reduces some difficulties for individual businesses at certain times, not solve the common problem of all businesses.As per the Provincial Competitiveness Index (PCI) report in 2016, 66 percent of firms regularly paid informal payments, 12-15 percentage points higher than in the 2008-2013 period. In addition, expenditures for making facilitating payments reckoned for more than 10 percent of the total turnover of businesses, well above the 6-8 percent of the previous five years.


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The fear of failure when doing business in Vietnam will still exist when the long-last-ing difficulties of businesses still cannot be handled. Expert Pham Chi Lan still regret-ted that more than 60,600 businesses had to stop operation last year because difficulty was too much for them to be able to overcome, so they had to stop operation. "There is no guarantee that newly registered businesses still do not withdraw from the market after one or two years", Lan said.

List of the largest M&A deals in 2016-2017


In 2016 and the first half of 2017, Vietnam has seen a series of multimillion dollar merg-ers and acquisitions (M&A) deals.Here is the list of Vietnam's top merger and acquisition deals (The List 50) announced at this morning press conference organised by VIR and AVM Vietnam.Outstanding merger deals1. TTC and Bien Hoa SugarThanh Thanh Cong Tay Ninh Sugar JSC (TTCS) will make a share swap to fully ac-quire Bien Hoa Sugar Joint Stock Company (JSC) in order to become the biggest sugar producer in Vietnam.TTCS will issue nearly 304 million shares to convert all outstanding shares of Bien Hoa Sugar at a ratio of 1:1.02.The conversion ratio was calculated by a third-party company that valued the shares of TTCS and Bien Hoa Sugar at VND20,944 ($0.92) and VND21,356 ($0.94), respective-ly.The deal will be carried out within 90 days (plus extensions if needed), starting from the day TTCS receives the permit from the State Securities Commission for the share issuance.After the merger is completed, the chartered capital of TTCS will increase by VND3.04 trillion ($133.75 million), to VND5.57 trillion ($245.07 million). Besides, Bien Hoa Sugar will be renamed Thanh Thanh Cong Bien Hoa-Dong Nai Sugar Co., Ltd to mark TTCS's sole ownership.Outstanding acquisition deals1. Kido and Tuong AnOn November 24 last year, foodstuff producer Kido Joint Stock Company (KDC) com-pleted the purchase of a 65 per cent stake, equalling 12.34 million shares, in Tuong An Vegetable Oil JSC (TAC).The official value of the deal has not been disclosed. However, in early November, KDC raised its offer, professing to its determination to buy TAC's shares. Notably, KDC is willing to pay VND82,000 ($3.66) instead of the VND78,000 ($3.48) per share.Thereby, the purchase value may reach VND1.01 trillion ($45.17 million).2. Shinhan Vietnam and ANZIn April 2017, ANZ Vietnam released plans to sell its retail banking arm to Shinhan Vi-etnam, a subsidiary of South Korean Shinhan Bank, by the end of 2017, to focus on its institutional banking activities in the country.The agreement with Shinhan Bank Vietnam will include all eight branches and trans-action offices located in Hanoi and HCM City, and keep all retail staff in their position. The deal value has been undisclosed.3. CJ vs. Minh Dat and Cau TreIn April, Saigon Trading Group (SATRA), the biggest shareholder of Cau Tre Export Goods Processing JSC, announced the public auction of a 20 per cent stake in the com-pany.Two subsidiaries of South Korean conglomerate CJ, CJ Foods Vietnam Ltd and CJ CheilJedang Corporation, spent $12.4 million to buy 47.3 per cent of Cau Tre's stake and raised CJ's total holding to 71 per cent. On May 21, the shareholders of Cau Tre ratified the decision to change the company's name to CJ Cau Tre.Besides, CJ CheilJedang spent $13.44 million to acquire a 64.9 per cent stake in Minh Dat Food, considered the biggest Vietnamese private meatball company with a reve-nue of VND270 billion in 2016. The deal was reportedly made in secret in late 2016 and


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was only wrapped up officially in May. The company has changed its name to Minh Dat CJ Food and it is recruiting workers for its new development stage.4. Earth Chemical buys Ai My GiaIn late March, Japanese Earth Chemical Group released plans to spend more than $80 million to buy the entire stake in Ai My Gia JSC, a Vietnamese home cleaning and hy-giene producer with famous brands like Gift, Ami, and Redfoxx. According to Reuters, the deal was completed on May 12.5. SCG buys Vietnam Construction Materials JSC (VCM)In March, SCG Cement-Building Materials Co., Ltd, a member of Siam Cement Group (SCG), spent $156 million on buying up the shares of VCM.The Bangkok Post quoted a statement from SCG as saying that the enterprise value (EV) of this transaction was $440 million, including a net debt and additional invest-ment to improve the efficiency of the acquired assets.6. Aviva and VietinbankIn April, British insurance firm Aviva acquired a 50 per cent stake in domestic insur-ance firm Vietinbank Aviva from Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank).The deal made Vietinbank Aviva (or Aviva Vietnam) a wholly-owned subsidiary of Aviva PLC. The value of the deal has not been disclosed.The deal will help Aviva simplify its operations in the region and develop its business activities via key distribution channels.7. Daesang Corp. and Duc VietIn September 2016, South Korean food-producing conglomerate Daesang Corp. com-pleted the acquisition of a 99.99 per cent stake in Vietnamese meat processor and dis-tributor Duc Viet Food Joint Stock Company for $32 million, fetching the Korean company a bridgehead in the Southeast Asian meat processing market.The purpose of buying Duc Viet Food is to reinforce its food processing business in Vi-etnam, currently centred on frozen ham products.Previously, the two parties failed to complete the purchase, which was rumoured to be finished by August 5, because Daesang had yet to finish all necessary documents for the acquisition.8. VIB and Commonwealth VietnamEarly this month, Commonwealth Bank of Australia received the State Bank of Viet-nam's approval to sell its HCM City branch to local commercial lender Vietnam Inter-national Bank (VIB). Accordingly, VIB will acquire all the assets and liabilities of the foreign bank's branch.However, financial details were not disclosed.Han Ngoc Vu, CEO of VIB, told DealStreetAsia that the transition process "will take several months."The Aussie bank earlier invested in VIB in 2009 and 2010 as a strategic partner and maintains a 20 per cent ownership. Its local branch was set up in 2008.9. TTC Group and Hoang Anh Gia Lai SugarBien Hoa Sugar Joint Stock Company and Tay Ninh Sugar Joint Stock Company, two subsidiaries of TTC Group, will take over the sugar operations of Hoang Anh Gia Lai in a bid to make TTC Group the biggest sugar producer in Vietnam in terms of output.Accordingly, BHS is going to buy 60 per cent of HAGL Sugar from Hoang Anh Gia Lai Agricultural Joint Stock Company (HoSE: HNG). The long-term financial investment contract has a value of VND798 billion ($35.1 million) and will be carried out by the end of 2017.TTC Tay Ninh Sugar will buy 40 per cent of HAGL Sugar from HNG and an individual shareholder. Though the investment has only been announced, HNG already assigned management positions and the right to operate the sugar factory, the sugar cane farm, and related assets to SBT.Outstanding real estate project transfers1. CapitaLand and Thien Duc Trading-Construction CompanyIn February, CapitaLand released news that its subsidiary CLV Investment 5 bought


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20 per cent stake in Thien Duc Trading Construction Co., Ltd for $17.9 million, raising CLV Investment 5's ownership in Thien Duc to 50 per cent.Besides, as of September 23, 2016, CapitaLand spent $51.9 million to acquire 100 per cent of Twin Peaks Developments Limited and 75 per cent of River View Company Limited.2. An Gia, Creed, and Van Phat HungIn March, An Gia Investment and Creed Group from Japan announced they had com-pleted the acquisition of seven blocks of the Lacasa complex in HCM City's District 7 from Van Phat Hung Group.An Gia Investment bought two blocks in March 2015, and then, in collaboration with Creed Group, it continued acquiring the remaining five blocks in the second phase. The deal's value was $40 million.This is the sixth mergers and acquisitions (M&A) deal that An Gia has concluded in recent years.3. Keppel Land and Southern Waterborne Transport CorpKeppel Landa leading Singaporean real estate developerssaid on March 20 that it had spent $37 million on acquiring a 16 per cent stake in the group WATCO I to V, Keppel Land's joint venture (JV) entities set up to develop Saigon Centre in HCM City, from partner Southern Waterborne Transport Corporation.4. EXS Capital Ltd, ACA Investment, and SonKim LandIn May, SonKim Land Corporation, a leading Vietnamese real estate developer, and EXS Capital Ltd, an independent alternative investment group in Asia, announced the successful closure of their first round$46 million out of an expected $100 millionof fol-low-up fundraising for SonKim Land.This is the second investment led by EXS Capital in SonKim Land through the Lemon-grass Master Fund, after a successful initial investment of $37 million in 2013.For the follow-up investment, SonKim Land and EXS Capital are also partnering with ACA Investments, a leading Japanese fund management firm based in Singapore with a strong track record of investments across the Asia-Pacific.Outstanding private equity and investment1. Fraser & Neave Ltd and VinamilkIn December 2016, F&N Beverages Manufacturing Sdn., Bhd. and F&N Dairy Invest-ments Pte., Ltd, the two wholly-owned subsidiaries of Fraser & Neave Ltd (F&N), have completed the purchase of a total of 78.38 million shares, equalling a 5.4 per cent stake, in Vietnam Dairy Products Joint Stock Company (Vinamilk).Accordingly, the two companies spent VND11.3 trillion ($499.56 million) on buying the registered share volume at the initial offering share price of VND144,000 ($6.33).According to the latest news, F&N Dairy Investments Pte., Ltd has expressed interest in increasing its stakes in Vinamilk via registering to buy an additional 14.5 million shares.2. KKR and Masan GroupMasan Group Corporation (HOSE: MSN), announced on April 21 that leading global investment firm KKR has completed its $250 million investment in Masan Group and in its branded meat platform Masan Nutri-Science.KKR's investment is comprised of a $100 million purchase of secondary shares in Ma-san Group from PENM Partners, an independent Danish private equity company, and a $150 million primary investment in Masan Nutri-Science for a 7.5 per cent stake.This is KKR's second investment in Masan, after a $359 million invested in Masan Con-sumer. KKR will make the investment from its Asian Fund II.3. Samsung Fire & Marine Insurance (SFMI) and PJICOPetrolimex Insurance Joint Stock Company (PJICO), coded PGI on the HCM City Stock Exchange, will sell 20 per cent of its chartered capital to Samsung Fire & Marine Insur-ance.The company will offer 17.74 million shares to Samsung Fire & Marine Insurance Co., Ltd, a leading non-insurance company from South Korea.The company planned to issue the shares this year after the Ministry of Finance ap-


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proves in principle to change PJICO's chartered capital and the State Securities Com-mission also approves the transaction.4. ACA Investments and Bibo MartIn May, Bibo Mart JSC officially announced the investment from ACA Investments, Ja-pan's leading fund management company and an affiliate of Sumitomo Corporation.With this investment, ACA Investments acquired 20 per cent of Bibo Mart's stakes.5. Sumitomo Bank and BIDV Financial Leasing CompanyIn February, a final agreement to expand a joint leasing business in Vietnam between the two parties has been reached by way of Sumitomo Mitsui Trust Bank, a subsidiary of Sumitomo Mitsui Trust Holdings, investing 49 per cent of the total equity of BIDV Financial Leasing Company (BLC), a subsidiary of BIDV, Vietnam's biggest lender in terms of assets. The deal's value reached $19.2 million.6. UOB, ORIX Group, and Bitexco PowerIn September 2016, UOB Venture Management Pte., Ltd (UOBVM), a wholly-owned subsidiary of United Overseas Bank Limited, and financial company ORIX Corpora-tion (ORIX), announced that they will each invest $25 million in one of Vietnam's larg-est privately-owned hydropower companies, Bitexco Power.7. Standard Chartered PE and N KidStandard Chartered Private Equity (SCPE), the private equity arm of Standard Char-tered Bank, has poured $40 million into acquiring a 20 per cent stake in N Kid Corpo-ration (N Kid), a Vietnamese lifestyle platform for kids and teenagers.http://www.vir.com.vn/list-of-the-largest-ma-deals-in-2016-2017.html

Lagging M&A scene looking for a big push


Merger and acquisition (M&A) activities in Vietnam in 2017 will need a big push, as the market is forecasted to go through a slowdown due to a lack of large deals from foreign investors as well as the state's delay in divestment from state-owned enterpris-es.According to the report released at the press conference this morning, in 2016, the total value of M&A deals in Vietnam reached a nine-year record of $5.8 billion, signifying an 11.92 per cent increase against 2015 performance.However, since the end of 2016, M&A activities have been slow, with an acute lack of large deals. In the first quarter of 2017, the total value of M&A deals in Vietnam was only $1.1 billion.This opinion was voiced by experts at "Vietnam M&A Forum 2017" press-conference organised by VIR and AVM Vietnam this morning, in Hanoi.M&A activities in 2017 face challenges, including the completion between Vietnam and other Asean member states to attract foreign investment, obstacles in equitising state-owned enterprises, the low quality of Vietnamese firms, as well as the scale of the economy."In order to create a breakthrough for the M&A market, which is forecasted to go through a slowdown, the Organising Board of Vietnam M&A Forum 2017 chose theme "Seeking a big push." Through theme, experts, managers, and enterprise leaders will discuss opportune fields and sectors for a breakthrough. Some of them show potential for large-scale IPOs or are likely to be accelerated by removing the foreign ownership limit or by favourable changes in government policy and administrative procedures, setting the grounds for hefty M&A deals," Minh told the conference participants.Thereby, the M&A environment in 2017-2018 is waiting for a breakthrough in large-scale deals, including the state divestments from Hanoi Beer Alcohol and Beverage Joint Stock Corporation (Habeco), Saigon Beer Alcohol and Beverage Joint Stock Cor-poration (Sabeco), Vietnam Dairy Products Joint Stock Company (Vinamilk) and Petrolimex, among others.Vietnam M&A Forum 2017, co-organised by VIR and AVM Vietnam, will take place on Thursday, August 10, 2017 at GEM Centre, HCM City.As the ninth edition of the annual event, Vietnam M&A Forum 2017 will welcome 30 international and Vietnamese guest speakers and 500 senior leaders from investment


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funds, Vietnamese and international corporations as a platform to meet and share op-portunities as well as experiences from the most notable deals of 2016-2017.http://www.vir.com.vn/lagging-ma-scene-looking-for-a-big-push.html

Private-label products hold high potential


The development of private-label products, also known as "phantom brands" that are made by a manufacturer and sold under a retailer's brand name, is considered an irre-sistible trend despite a small proportion in Vietnamese retail market.A research by Kantar Worldpanel Vietnam shows that private-label products account for only 0.6 percent of total commodities at supermarkets in Vietnam compared to 50 percent in France, said Nguyen Huy Hoang, commercial director of the company.However, the domestic rate is not too low compared to that in other Asian countries with 1.2 percent on average. South Korea and Malaysia are among countries with high rates of 2.7 percent and 2.2 percent respectively while the Philippines, Indonesia and China have a very low rate of 0.2%.Hoang attributed the low rate of private-label products in Vietnam to the limited number of modern distribution channels, currently accounting for only 13%.The research by Kantar Worldpanel also reveals that 38 percent of Vietnamese con-sumers choose private-label products due to the strong confidence in retailers. Some common products are detergents and toilet paper while packaged food, milk and bev-erage products do not sell well.According to Kantar Worldpanel, Vietnamese enterprises should attend to private-la-bel goods and develop their own brands in the context of strong competition.Cao Tien Vi, general director of Saigon Paper Corporation, told the Daily that the com-pany accepts to manufacture products under supermarkets' brands to fully utilise the company's production lines, equipment and manpower, thereby earning more reve-nue.Manufacturers need to invest in attractive packaging with limited cost and create new products as Vinamit, Saigon Food, VinaCacao and Lix have implemented successfully.Retailers prefer medium and small manufacturers as a way to help these manufactur-ers get more experience in designing packaging, meeting customers' demand and boosting production.Many retailers not only provide products of domestic manufacturers but also cooper-ate with foreign enterprises to offer more private-label commodities.Meanwhile, many foreign retailers such as Lotte Mart and MM Mega Market have had private-label products manufactured by enterprises in Vietnam for export to other markets.http://english.thesaigontimes.vn/55112/Private-label-products-hold-high-poten-tial.html

Which way for e-wallets ecosystems or payment instruments?


E-wallets have been changing, struggling to exist among stiff competition. No e-wallet dominates the market, with many of them designed to serve specific ecosystems tar-geted by investors.WebMoney has made a comeback with a donation programme. Through the pro-gramme, it has introduced a new feature transferring money from the community. Another feature seeks capital from the community for startup projects.This is not the first time WebMoney has appeared in Vietnam. The software sourced from Russia was brought to Vietnam in 2010 by Yeah1, but it was not promoted well.According to Nguyen Anh Nhuong Tong, CEO of WebMoney Vietnam, this was be-cause the legal framework was still not complete at that moment.The market has become busy and recently was roused by the news that Standard Char-tered Private Equity and Goldman Sachs poured $28 million into MoMo in 2016 and VMG sold a 62 percent stake in VNPT Epay to UTC Investment from SK.According to the State Bank, 16 non-bank organisations have received licenses to pro-vide intermediary payment services, including e-wallets. Most e-wallets are still facing


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big difficulties, but they can see bright prospects in the future. Besides the 16 opera-tional e-wallets, tens of other businesses are still awaiting licenses.Some wallets develop payment instruments based on existing ecosystem, while others do the opposite, gathering many sellers and then advertising for products, or doing both.MoMo was designed to transfer small amounts of money among users and make pay-ment for services at entertainment points.Payoo focuses on providing services on making payments for household bills through physical transaction points. Most recently, Payoo has joined forces with NCB Bank to provide a service of making payments for bank loans through the wallet's transaction network.Though having different targets and products, both wallets have to persuade the POS to accept the new payment method and ask customers to use their payment instru-ment.WebMoney, however, has developed based on the existing ecosystem. The wallet uses the existing WebMoney model to take full advantage of the brand in the world market. According to WebMoney, it has 74,013 transaction points, 41,710 POS and 35 million users worldwide.According to Nguyen Hoa Binh, president of NextTech Group (Peacesoft in the past), only a few payment intermediaries now perform well."The majority of other service providers have had difficulties and are living with in-vestors' money," he said.http://www.vir.com.vn/which-way-for-e-wallets-ecosystems-or-payment-instru-ments.html

Enterprises in 20 public sectors allowed to turn into joint stock ones


The prime minister has issued a list of 20 public sectors where in State-owned enter-prises that can be transformed into joint stock concerns, along with criteria for trans-formation.Accordingly, public units shall be transformed into joint stock companies if they can independently ensure capital and operational expenses for the first year after the con-version. These enterprises that are allowed to turn into joint stock ones must have plans to continue providing services of high quality.After transformation, the State will hold less than 50 percent of chattered capital or no stakes at all in such enterprises. That means more business opportunities will be of-fered to other private investors.The list of public sectors to allow for corporate transformation include clean water sup-ply, water drainage and waste water treatment, environment, lighting, technical sup-porting service for science research and technology development, intellectual property, technology transfer and quality control.Public enterprises active in consulting services for urban planning, accountancy, audit, taxation, property valuation, market research, business administration and public sur-veys are also allowed to undergo transformation.In addition, in areas of maintenance and construction sectors, units allowed to turn into joint stock companies shall engage in management and maintenance of road and waterway systems, management and maintenance of coach and railway stations, tech-nical inspection for vehicles, construction testing service, infrastructure development for industrial zones, and supporting services at industrial zones.In reality, some public units under the Ministry of Transport have actively trans-formed themselves into joint stock companies, including roads and inland waterways management units.http://english.thesaigontimes.vn/55119/Enterprises-in-20-public-sectors-allowed-to-turn-into-joint-stock-ones.html


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Local firms still vague about Asean Economic Community


Although Vietnam has joined the Asean Economic Community (AEC) since its estab-lishment in 2015, a recent survey reveals only around 10 percent of local enterprises have a proper understanding of the common market.Le Luong Minh, secretary general of Asean, told a seminar named "50 years of Asean: AEC and opportunities for Vietnamese enterprises" on July 19 that the establishment of the AEC and the approval of the Asean Community Vision 2025 are major mile-stones in the regional economic integration agenda.The AEC Blueprint 2025 aims for a resilient, inclusive, people-oriented and people-centered community that enhances the role of micro, small and medium enterprises, the private sector, and the public-private partnerships; narrows the development gaps; and encourages relevant sides to foster the regional inclusive growth.Asean has great potential to become an influential factor in the global economy. As the anti-globalisation and anti-free trade movements have been emerging, Asean is re-garded as a symbol of open regionalism, Minh said.He added the Regional Comprehensive Economic Partnership initiated by Asean in 2011 will be one of the world's largest trading blocks, including nearly half of the glo-bal population and more than one-third of the worldwide trade. Besides, Asean will further strengthen its cooperation with more free trade partners.Asean is also negotiating a free trade agreement with Hong Kong, and is looking to es-tablish similar trade relations with Canada and the Eurasian Economic Union.The AEC is a single and open economic market. However, according to Assistant to the Foreign minister Vu Quang Minh, many Vietnamese enterprises have yet to make the most of the benefits and opportunities the AEC creates. In addition, they are facing a slew of challenges, especially competitive pressure from Asean markets in produc-tion, business and services.A recent survey shows around 10 percent of Vietnamese enterprises understand the opportunities and challenges the AEC poses for them, Minh said.Some experts said local firms are inclined to export their products to European nations, the United States and Japan, as Vietnam and these countries exchange goods which the other sides do not produce.Meanwhile, Asean members have similar economic growth rates, and produce similar types of goods, meaning they are on the direct course of competition, especially when these products are often shipped to the US and the European Union.http://english.thesaigontimes.vn/55115/-Local-firms-still-vague-about-Asean-Eco-nomic-Community.html

VCA plans support polices to spur cooperatives' development


The Vietnam Cooperative Alliance (VCA) will concentrate on devising support poli-cies in terms of capital, land, technology and market access, while building a value chain model connecting households, cooperatives and businesses, said VCA President Vo Kim Cu.Addressing the third meeting of the fifth VCA Central Committee on July 20 in the cen-tral province of Thua Thien-Hue, Cu said the alliance will also focus on human re-source training and encourage the development of people's credit funds.According to the official, the Cooperative Law 2012 has showed a number of short-comings that need amendments and supplements to create a more favourable legal corridor for cooperatives to operate equally with other economic components and businesses.Participants at the two-day event discussed the collective economic situation in the country and the performance of the VCA in the first half of 2017 and its tasks for the rest of the year.Currently, Vietnam has over 20,000 cooperatives and 15,000 cooperative groups oper-ating in various fields including agriculture, trade-service, construction, transporta-tion and credit.Of the total, more than 10,000 cooperatives have reformed and registered for operation


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while over 3,750 others were established under the Cooperative Law 2012.Total assets of the cooperatives exceed 12 trillion VND (around 528.6 million USD), with average revenue of more than 4.3 billion VND per year, 949 million VND higher than that in 2013. Average income of labourers in the cooperatives is 43 million VND per year, a rise of 17 million compared to that in 2013.However, many transformed cooperatives under the Cooperative Law 2012 remain small with limited financial and infrastructure capacity and loose connection with val-ue chains.http://en.vietnamplus.vn/vca-plans-support-polices-to-spur-cooperatives-develop-ment/115152.vnp

Experts: Domestic companies should develop strong brand names


European consumers cannot recognise brand names of almost goods imported from Vietnam since many businesses have not been fully aware of the importance of build-ing trademarks and have not complied with EU standards for exports, said Claudio Dordi, Technical Assistance Team Leader of the EU-MUTRAP Project.Most of Vietnam's agricultural products sold in the EU market are labelled with Chi-nese and Japanese brand names since Vietnam exported raw materials to these coun-tries, Dordi told a trade policy forum held by the Vietnam Trade Promotion Agency under the Ministry of Industry and Trade and the centre for investment and trade pro-motion of Can Tho city on July 20.According to the expert, up to 99 percent of coffee products imported into the EU come from Vietnam, but few consumers know that fact.Aside from coffee, Vietnam's cocoa, tea, toys, footwear and apparel are also facing the same situation, he noted, adding that European consumers equate Vietnamese goods with Chinese products, forcing importing countries to raise more quality control bar-riers towards Vietnamese products.The expert urged Vietnamese exporters to modernise their production lines and devel-op strong brand names for their firms. They also need to update changes in import pol-icies of partner markets.Dr Nguyen Phuong Mai, a specialist of the Corporate Social Responsibility (CSR) project of the UN Industrial Development Organisation (UNIDO), said enterprises should affirm their prestige through implementing the CSR Pyramid, which includes economic, legal, ethical and philanthropic domains. The top of this pyramid is the phil-anthropic domain, indicating that benefits produced by businesses go beyond the so-ciety's expectations.Alain Chevalier, senior technical advisor of the programme "Decentralised Trade Sup-port Services for Strengthening the International Competitiveness of Vietnamese Small and Medium-sized Enterprises", introduced the Standards Map of the Interna-tional Trade Centre. The software helps exporters learn about main features, require-ments and export-related policies.Accordingly, Vietnamese firms exporting goods to the EU should understand that lo-cal consumers are ready to pay more for goods made in line with standards, in an en-vironmentally friendly manner, and with social responsibility, he added.http://en.vietnamplus.vn/experts-domestic-companies-should-develop-strong-brand-names/115144.vnp

Infrastructure JVs earn nod at meet


Domestic and foreign businesses are rushing to invest in infrastructure projects in Ha-noi to cash in on the growing local demand.In late June, a number of companies got approval for their infrastructure projects at the "Hanoi 2017 Investment and Development Cooperation" conference, reflecting the current trend in the field.A joint venture (JV) between Aquaone and Duong River Surface Water JSC signed a memorandum of understanding (MoU) with Hanoi to develop a clean water supply system in the city with an estimated investment sum of VND5 trillion ($227.27 mil-


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lion). The JV will have Maynilad, one of the leading water and wastewater services conglomerates in the Philippines, as a partner in these projects."Three years ago, we made investments in HCM City Infrastructure Investment JSC (CII)," Ramoncito S. Fernandez, CEO of Maynilad, told VIR. "Our group may invest in roads in HCM City. And I'm looking forward to investing in water and wastewater services in Hanoi."We are now in discussions with a group of businesspeople in Hanoi. They are looking for potential partnerships in water treatment, water distribution, and eventually wastewater treatment to contribute to the environment in the city," he said.According to Fernandez, the demand for water in Hanoi is significantly increasing with its fast-growing population. "The treatment of wastewater has become another urgent need. And investors like Maynilad are cashing in on the potential," he said.At the same event, many domestic and foreign enterprises received approval for their investment plans in water supply and environment infrastructure, with a total estimat-ed capital sum of VND8.87 trillion ($403.18 million).In March, Duong River Surface Water JSC also kicked off Duong River Surface Water Plant in Gia Lam district, with the total investment of $225 million for phase one. Viet-nam-Oman Investment (VOI) is a partner in this project.In addition to this field, metro lines are gathering great interest among investors. Un-der the prime minister-approved transport development plan through 2030, with a vi-sion towards 2050, Hanoi will build nine metro lines with a total length of 372.5 kilometres and an estimated total investment capital sum of VND700 trillion ($31.8 bil-lion).At the event, Vietnamese property conglomerate Vingroup signed an MoU with Hanoi to pour around VND100 trillion ($4.55 billion) into local metro line projects, becoming the first private domestic firm to join the field.Vingroup proposed to invest in a number of metro routes. For Line 2 (South Thang Long-Tran Hung Dao), the company wants to join the Noi Bai-Nam Thang Long sec-tion, while for Line 3 (Nhon-Hanoi Station), it is eager to join the Hanoi Station-Hoang Mai and Nhon-Troi-Son Tay sections. The other routes that Vingroup is interested in are Van Cao-Beltway 4 and Beltway 4-Hoa Lac of Line 5; Noi Bai-Phu Dien-Hadong-Ngoc Hoi of Line 6; and Son Dong-Mai Dich and Mai Dich-Beltway 3-Duong Xa of Line 8.Tokyo Metro is another corporation to join the trend. The firm also signed an MoU with Hanoi on management and solutions to increase investment efficiency in metro lines.Many other firms got approval for their transport infrastructure projects, worth of over VND5.3 trillion ($240.9 million). These include projects from Van Phu Invest and Bi-texco, worth $90 million each.http://www.vir.com.vn/infrastructure-jvs-earn-nod-at-meet.html

Tourism market offers opportunities for start-up businesses


Vietnam's tourism market offers huge opportunities for start-up companies if they promptly seize technological trends to create special and unique tourism products, heard a workshop in HCM City on July 20.A report delivered at the workshop, jointly organised by the Saigon Innovate Hub (Si-Hub) and the Start-up Vietnam Foundation (SVF), showed that tourism has been iden-tified as a spearhead economic sector in the near future, with the target of luring 17-20 million international tourists and serving 82 domestic holidaymakers by 2020.Nguyen Quoc Ky, director general of the Vietravel Company, underlined the need for research and development of start-up companies in tourism to secure domestic market share.Participants stressed that amid the technological boom, start-up companies need to grasp the market's trends and continuously innovate to offer highly competitive prod-ucts, otherwise they will be merged or closed.Sharing the view, SVF Managing director Pham Duy Hieu said start-up companies


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should enable staff members to show their creativeness, thus offering products that can satisfy, even surprise customers.At the workshop, delegates discussed measures to develop Vietnam's tourism, includ-ing incentives to lure tourists and investment in infrastructure, building overseas tour-ism promotion offices and promoting regional connection.In 2016, Vietnam's tourism sector welcomed 10 million foreign arrivals and served 62 million domestic holidaymakers, representing 4.3-fold and 5.3-fold increases from the figures in 2001, respectively.http://en.vietnamplus.vn/tourism-market-offers-opportunities-for-startup-business-es/115148.vnp

Foreign businesses eyeing domestic cement


The first half of 2017 has passed, and while no investor has announced plans to buyout a domestic cement company, signs of an impending takeover have not decreased.Cement sector attracting foreign investmentRecently, M&A development in the construction materials sector has been one-sided as foreign companies take over domestic counterparts.In March 2017, SCG Cement and Building Materials Company Ltd, a member of SCG Group (Thailand), announced the completion of a 100-per cent buyout of Vietnam Construction Materials JSC (VCM).The enterprise value of this deal is $400 million, including net debt and efficiency im-provement costs for acquired assets.The announcement to buy 100 per cent of VCM's shares so early in 2017 shows that SCG had set its sight on VCM quite a while ago, proving once again that cement is still an attractive business for Thai businesses.VCM has a production capacity of 3.1 million tonnes per year. After this deal, the total cement manufacturing capacity of SCG Group in Asean countries (excluding the 23 million tonnes produced in Thailand) increased to 10.5 million tonnes.With this, it is clear to see that Thai businesses are proving their dominance in the Vi-etnamese construction materials market through M&A deals.Before announcing the VCM buyout, SCG representatives affirmed at a number of events that they would continue to keep an eye on the Vietnamese cement market and wait for the right time to increase cooperation with local cement companies.Previously, Siam City Cement Company (SCCC) successfully acquired 65 per cent of Holcim Vietnam's shares from LafergeHolcim Corporation.The total asset value of Holcim Vietnam was expected to be $890 million, and SCCC had to spend approximately $580 million for the 65 per cent.Earlier this year, after completing the M&A deal, SCCC renamed Holcim Vietnam as Siam City Cement Vietnam Company Ltd, with the brand name INSEE.On July 17, 2017, Nguyen Cong Minh Bao, director of Sustainable Development at IN-SEE, said that the company was increasing promotion activities for the INSEE brand, and starting from September 2017, the company will stop running the old and new brands in parallel and proceed with the INSEE brand only.SCCC also expressed interests in pouring even more capital into the Vietnamese ce-ment market. Particularly, on July 3, at a meeting with the HCM City People's Com-mittee, the SCCC Board of directors said that in the next 12-24 months it will invest more than $30-50 million to increase the production capacity of their cement plants in Kien Giang, Ba Ria-Vung Tau, HCM City, and Dong Nai.Bao said that aside from maintaining business operations, SCCC will continue to keep an eye on businesses looking to divest, but the decision to acquire will depend on the particular circumstances.Vulnerability to foreign businessesFive years ago, an M&A boom in the cement sector saw the rise of domestic cement companies, such as Vissai Group (acquired Dong Banh Cement, Oil and Gas 12-9 Ce-ment, and Do Luong Cement), Bim Son Cement (acquired Dai Viet crushing plant through acquiring 76 per cent of the shares of Central Cement JSC), Xuan Thanh Group


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(acquired Minh Tam Cement, Hoang Long Cement, and Sai Son Cement).However, in recent years, foreign businesses have already taken almost all high-capac-ity cement projects in Vietnam, leading to a slowdown in M&A activities.Hoang Minh Truong, chair of Vissai Cement Group, said that current domestic cement production outpaces demand by millions of tonnes, exporting is difficult (due to a 5-per cent export tax), and profits have been falling due to a marked drop in prices.All these factors combined will weaken domestic companies and create even more op-portunities for foreign companies to take over. The capital flows of foreign businesses are expected to be subtle in the near future, targeting weakened domestic companies with declining business results."When a business is struggling, it is very easy for an investor to swoop in and take over, since it is the "golden time" for a buyer as transfer price is at its best," Truong ex-plained.Le Van Toi, cement industry expert, said: "With current market developments, it is easy to see that the speed of ownership transfer in the cement industry will depend on the speed at which large companies overrun the market. In order to avoid bankruptcy, small businesses' only option is to "submit" to a foreign companysuch are the market rules."Toi predicted that with a well-thought out strategy and enormous financial capacity, before long, SCG and SCCC will continue to display their superiority in the construc-tion materials sector by means of further M&As.http://www.vir.com.vn/foreign-businesses-eyeing-domestic-cement.html

Cybersecurity firms boom in Vietnam


Internet security firms are cashing in on the increasing number of cyberattacks target-ing entities in Vietnam. But all that glitters is not gold, experts have warned.In 2015, 31,585 cybertattacks were recorded in Vietnam, causing total damages esti-mated at VND8.7 trillion (US$383.26 million).In the first three months of this year, 7,700 attacks targeted Vietnamese websites while the infamous ransomware WannaCry hit 1,900 computers in the country.According to experts, 52 percent of computers in Vietnam remain vulnerable to viruses and malware.However, of all the cybersecurity companies in Vietnam trying to cash in by offering consumers protection from these attacks, only seven are actually licensed businesses while the rest are unlicensed operations focused on "scaring customers into using their services," according to experts.Some of the well-known internet security firms in Vietnam are Hanoi-based Bkav, FPT, state-run VNPT, and Russia's Kaspersky Lab.On top of its popular antivirus software, Bkav now offers such cybersecurity services as firewalls or anti-APT solutions.APT, or advanced persistent threat, is a network attack in which an unauthorised per-son gains access to a network and stays undetected for a long period of time.The intention of an APT attack is to steal data rather than cause damage to the network or organisation."Kaspersky used to be known only as a supplier of security software to end-users, but since 2015, we have offered in-depth cybersecurity services as well as security training and consultation," Vo Duong Tu Diem, a representative of the Russian firm in Viet-nam, said.Besides these big names are startups that have gained fame from winning security competitions, such as CyRadar.However, according to Dr Vo Van Khang, deputy chair of the southern chapter of the Vietnam Information Security Association, there are certain low-quality companies out there that are ripping off customers with lies about their services.Customers, especially companies, are also concerned that some cybersecurity firms are willing to accept money from firms in exchange for launching attacks against their ri-vals.


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"Some cybersecurity firms also attack a company with malware or viruses and then of-fer to help with their services," Khang said."This is totally possible in the 'underground world' of internet security, where the line between good and bad is thin."One seasoned cybersecurity expert said that while the information security sector cov-ers a wide range of aspects, "some people think that if they are good at one aspect, they are also an expert in other fields.""So there are many incapable personnel in the cybersecurity market who cheat custom-ers for money despite their poor knowledge," he added.http://tuoitrenews.vn/business/42072/cybersecurity-firms-boom-in-vietnam

Japanese restaurants mushroom in Vietnam


There are more than 1,000 restaurants serving Japanese cuisine in Vietnam, the major-ity of which are in HCM City.The southern metropolis is home to 659 Japanese restaurants, twice as many as there were three years ago, according to statistics provided by the Consulate general of Ja-pan in HCM City.Collectively, there are as many as 770 Japanese restaurants across provinces and cities in southern Vietnam.Approximately half of the restaurants serving Japanese food in Vietnam are run by Japanese owners, according to a Japanese consular official.The remaining half are owned and run by Vietnamese franchisees and entrepreneurs, the official said.The fierce competition and high cost of operation have forced a number of restaurants to close or narrow their business, according to a representative from the Japan External Trade Organisation (JETRO) in HCM City.The blossoming of Japanese restaurants has also led to a growing number of Japanese food and ingredient supplies.An increasing number of Japanese food exporters have shown interest in entering the Vietnamese market over the past few years, making Vietnam the fifth largest importer of Japan's agricultural produce and food in 2016.Seafood accounts for 60 percent of all Japanese agriculture, forestry and seafood ex-ports to Vietnam, with 20 billion Japanese yen (US$178.4 million) worth of seafood im-ported into Vietnam from Japan every year.Apart from supplying domestic consumption, certain high-value seafood is also proc-essed by Vietnamese businesses to be shipped to other markets.Japan is currently Vietnam's second-largest foreign investor, having developed 3,443 projects in the Southeast Asian country as of June 31, with a total registered capital of over $46.19 billion.http://tuoitrenews.vn/business/42076/japanese-restaurants-mushroom-in-vietnam

Vietnam cities garner heightened interest of hospitality investors


Hospitality and hotel investment in the Asia Pacific region for the first half of 2017 hit $2.9 billion, with investors zoomed in on key gateway cities in Vietnam like Danang-Hoi An and Nha Trang-Cam Ranh, among others.That's according to the latest H1 Hotel Investment Highlights Asia Pacific report from JLL, which seems to indicate that the unfavourable image of Vietnam is slowly chang-ing for the better.Approximately 10 million international travellers arrived in Vietnam in 2016, a 26 per-cent increase from 2015. Chinese arrivals led the growth, up 51 percent along with a substantive rise in business travellers from the Republic of Korea.China remained the largest source market for Vietnam for 2016, with 51 percent year-on-year growth, followed by the ROK (39 percent year-on-year) and Japan (10 percent year-on-year), reported JLL.In 2016, Vietnam showed signs of shedding its image as a destination that tourists only visit once in alifetime with the food scene, golf and casinos offering just a fewgood rea-


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sons for repeat visits from neighbouring countries like China.The sizable investments made in infrastructure and transport in the country over re-cent years appear to be opening a portfolio of coastal destinations beyond just the long-standing traditional hotspots,said Adam Bury, senior vice president, investment sales, Asia Pacific, Hotels & Hospitality Group at JLL.With the recent rebranding of Hoi An's The Nam Hai, now under Four Seasons man-agement, and a second Four Seasons in the preliminary stages of development in Ha-noi, many large hotel operators are taking a serious look at getting a piece of the growing market in Vietnam.Frank Sorgiovanni, head of research, Asia Pacific at JLL Hotels and Hospitality Group, said that JLL had seen an increasing number of internationally branded hotels open in Vietnam over the past two years.He noted that JLL fully expected further diversification of hotel management compa-nies and brands in the market over the foreseeable near term.Investorscontinued to seek alternative investment in Vietnam where arrivals' growth is strongly supported by Chinese tourism.We have been and continue to be particularly bullish about the growing tourism and thriving economy of Vietnam, which has seen foreign investors from across the region attracted to its hotel and resort market over the past 18 months, he added.The country has become one of the most talked-about markets in Asia Pacific.Stephen Wyatt, country head at JLL Vietnam was on target pointing out that much of the increased inbound travel figures were driven by business travellers and not inter-national tourists as had been widelyreported in the Vietnamese press.Wyatt noted specifically that the hospitality industry in Vietnam benefited tremen-dously from increased business travel in the capital city of Hanoi and the southern me-tropolis of HCM City.We observed, said Wyatt, a considerable enhancement of corporate and business de-mand within hotels across Hanoi and HCM City as multinational manufacturers such as Samsung and LG Electronics entered Vietnam and relocated staff from other Asian markets on a temporary or semi-permanent basis.Hotel performance, particularly in Hanoi, improved off the back of the massive indus-trial investment that surrounded the city, he concluded. We've seeing a similar trend in HCM City, which has also benefited from its position as a financial hub of the coun-try.http://www.vir.com.vn/vietnam-cities-garner-heightened-interest-of-hospitality-in-vestors.html

Japanese capital flows in real estate in Vietnam


Many Japanese firms such as Mitsubishi, Maeda, Kajima, Sumitomo and Creed Group have made investments worth tens to hundreds of millions USD in the Vietnamese re-alty market within over the past year.For example, the Mitsubishi Group has invested 290 million USD in a joint venture with Vietnam's Bitexco to develop the Manor Central Park in Hanoi. In the first stage of cooperation, the two sides agreed to establish a joint venture to develop 240 low-rise buildings and two high-rise buildings with 1,036 apartments.In September 2016, the Kajima Overseas Asia company spent 500 million USD to es-tablish the Indochina Kajima Development joint venture with Indochina Capital. Both plan to invest in Vietnam's real estate market in the next 10 years.More recently, Sanyo Home invested in the field via cooperation with Tien Phat com-pany under the Hoa Binh property business and construction joint stock company to invest in the Ascent Lakeside project in District 7, HCM City.Meanwhile, Sumitomo will invest in the Nhat Tan-Noi Bai urban area in Hanoi along with Vietnam's BRG Group.According to Toshihiko Muneyoshi, president of the investment fund Creed Group, with a population exceeding 93 million people, increasing incomes and rapid urbani-sation, the demand for houses among young customers is huge.


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SVietnam finance & business 21 July 2017

Notably, each year, 50,000-60,000 new households are expected to be built in Hanoi and HCM City, he said, adding that the fund will focus on the middle-range segment and seek more partners in Vietnam.Japanese investors have secured their position in Vietnam in recent years with 3,411 projects worth nearly 44 billion USD.According to the Foreign Investment Agency under the Ministry of Planning and In-vestment, in the first six months 2017, Japan rose to first position in 94 countries and territories with investment projects in Vietnam, with total registered capital of 5.08 bil-lion USD, making up 26.45 percent of total investment.http://en.vietnamplus.vn/japanese-capital-flows-in-real-estate-in-vietnam/115129.vnp

Laos seeks to woo Vietnamese investors


Leaders of three Lao provinces Savannakhet, Khammoun and Bolykhamsay call on Vi-etnamese enterprises to invest in multiple sectors in their localities, heard a conference on trade, investment and tourism promotion between the three provinces and HCM City on July 19.Santiphap Phomvihane, governor of Savannakhet Province, said the province is offer-ing incentives for investors in many sectors, including high technology, clean and or-ganic agriculture, environmentally-friendly farm produce processing, traditional processing industry and sustainable tourism development.To invest in these priority sectors, investors are required to have an investment of at least $150,000 and employ over 30 Lao specialists and over 50 Lao workers with labour contracts of at least one-year term.According to Phomvihane, Vietnam is currently having 24 projects with a total invest-ment of over $170 million in Savannakhet.Meanwhile, Khammoun Province is calling for investment in agriculture, industry, handicraft and services.Bolykhamsay Province suggested Vietnamese enterprises invest in projects of indus-trial zones, commercial and service centers, economic zones, cement plants, pineapple and corn processing plants, and tourist areas.Speaking at the conference, HCM City vice Chair Le Thanh Liem said the city consid-ers Lao localities as strategic markets and attractive destinations for investment and trade. There are currently over 30 businesses from the city investing in Laos with in-vestment totalling over $250 million.http://english.thesaigontimes.vn/55120/Laos-seeks-to-woo-Vietnamese-investors-.html

BUSINESS NEWSBusiness Briefs July 21, 2017

21/JUL/2017 INTELLASIA |

* Viet Dragon Securities Company (VDS) started trading 70 million shares on the HCM City market yesterday at the reference price ofVNDll,700 each. Closingthe session, VDS jumped 7.7 percent at VND12,600 per share with nearly 419,000 shares traded, in which foreigners net bought 151,500 shares. The HCM City-based en-terprisehas developed branches in Hanoi, Can Tho and Nha Trang cities. It has provided bro-kerage service to over 68,000 investors and other services such as consulting,issue guarantee and proprietary trading. At the end of the second quarter, VDS ob-tained VND166.6 billion in revenue and VND71 billion in pre-tax profit, meeting54 percent and 71 percent of the entire year's targets respectively. The. company aims to raise its chartered capital to VND1.5 trillion in 2020.* VPBankhas applied to float over 1.33 billion shares on the HCM City market. The lender has obtained approval to spur its capital from VNDlO.7 trillion to over VND14trillion. In 2017, VPBank looks to realise VND217. 7 trillion in mobilisation and valua-ble paper issuance while its total outstanding volume of credits and bonds is expected at VND200.6 trillion. The bank predicts its pre-tax profit at VND6.8 trillion, up 38 per-cent against last year.* F&N Dairy Investments Pte Ltdhasregistered to buy over 14.5 million shares ofViet-


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nam Dairy Products Company (VNM)between July 24 and August22 to raiseits hold-ing from 16 percent to 17%, or over 247 million shares. Earlier, the investor had planned to purchase the shares within around one monthstarting from June 19 but it failed to conduct transaction due to unfavourable condi-tions on the market.* Due Long Gia Lai Investment and Development of Public Project Service Company (DLl) has passed a plan to issue over 84 million shares to raise its capital from VND 169 billion to over VND 1 trillion within this year to expand its property segment. DLl will sell the shares at VND10,000 each at a 1-for-5 ratio, using the VND845 billion pro-ceeds to acquire Van Gia Long Construction & Investment JSC and Dong Phu Hung Production, Trade and Service Co Ltd The enterprise reported VND 109 billion in rev-enue and VND6.3 billion in after-tax profit in the first half of2017, down from VND8.2 billion in the same period last year.

VN30 stocks dampen market recovery


The local stock market recovered on July 19 after a three-day pullback but stocks in the VN30 basket weighed on the uptrend.Having moved sideways in the morning, the VN Index rose to near 775 points in the afternoon as large caps VNM, GAS, SAB and PLX jumped on strong demand. Howev-er, the market suddenly lost steam as VN30 stocks encountered high selling pressure.Up to 18 stocks in the VN30 basket lost ground while 10 stocks increased and two oth-ers closed unchanged, sending the VN30 Index down 0.48 percent at 737.77. CII, a HCM City-based infrastructure investment firm, plunged to the floor price at VND34,800 per share on matching volume of nearly 4.6 million shares though it re-ported better-than-expected business results in the first six months of 2017.Other stocks in the basket such as insurance firm BVH, construction enterprise CTD, technology giant FPT and two steelmakers HSG and HPG fell by between 0.8 percent and 1.9%. Among bank stocks, BID and CTG increased while VCB, STB and MBB de-clined and EIB plunged to the floor price at VND11,200 a share.On the other hand, large caps such as dairy firm VNM, beverage company SAB and national gas group GAS rose sharply, lifting the main index up 0.5 percent at 771.3 with turnover sliding mildly to nearly VND4.4 trillion.Speculative stocks still attracted cash flow. FLC, a property enterprise, climbed 5.9 per-cent to VND7,700 a share and led the market for liquidity with over 30.9 million shares exchanged.FIT also shot up to the ceiling price as it fulfilled 98 percent of this year's after-tax profit goal in the first half before sliding. The diversified financial stock closed the day with a 4.6 percent rise and matching volume of 8.15 million shares.Notably, property firm HAR, agricultural chemical producer HAI and securities firm AGR again went up to the ceiling prices. HHS and NVT, two petty stocks in the realty and construction sector, still managed nice gains though they failed to close at the up-per limit.The HNX-Index gained 0.21 percent at 98.81 with turnover shrinking to over VND560 billion. The northern index fell through the strong supporting level at 99 points as pil-lar stocks such as lender ACB, plastic firm NTP and petroleum technical services group PVS closed at the reference prices.Tiny stocks on the Hanoi market advanced nicely. KLF, a trading and food services company, shot up to the ceiling price at VND3,300 a share and took the lead for liquid-ity with over 15.7 million shares traded.http://english.thesaigontimes.vn/55151/VN30-stocks-dampen-market-recovery.html

Markets decline on rubber, retail stocks


Shares went on a downward spiral again on Thursday morning after a brief recovery on Wednesday, as big companies in the retail, rubber and plastic sectors tumbled.The VN Index on the HCM Stock Exchange dropped 1 per cent to 763.83 points.On the Hanoi Stock Exchange, the HNX Index went down 0.74 per cent to 98.08 points.


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Rubber, retail and plastics shares were badly hit, with an average drop of 2.3 per cent, 1.3 per cent and 1.2 per cent, respectively, data on vietstock.vn showed.Large retailers such as Mobile World Group (MWG) and FPT Corp (FPT), two of the top 30 shares by market value and liquidity on the HCM exchange, fell 1.6 per cent and 1.1 per cent, respectively.Sao Vang Rubber (SCR), Da Nang Rubber (DRC), Southern Rubber Industry (CSM), Rang Dong Plastic (RDP), Binh Minh Plastic (BMP) and Dong A Plastic (DAP) slipped 1-6 per cent.Large-cap stocks continued to slide down, with 19 of the top 30 shares by market value and liquidity on the HCM City exchange losing value; only five advanced.Overall, the market breadth was negative with 310 stocks falling, 123 rising and 277 re-maining unchanged.A total of 143 million shares worth a combined VND2.3 trillion (US$100 million) were traded in the two markets.The afternoon session starts at 1pm.http://bizhub.vn/markets/markets-decline-on-rubber-retail-stocks_287719.html

SSI Asset Management Company launches bond fund


Saigon Securities Inc Asset Management Company (SSIAM) is launching an initial public offering (IPO) for its SSI Bond Fund (SSIBF) from July 4 to 31.The initial minimum capital mobilisation is VND50 billion (US$2.2 million). The SSIBF will begin operating by mid-August.The SSIBF is the third domestic exchange-traded fund (ETF) managed by SSIAM, after the open-end SSI Sustainable Competitive Advantage Fund (SSI-SCA) and the ETF SSIAM HNX30 Fund. It will adopt an active investment strategy based on comprehen-sive assessments of macroeconomic policy, economic outlook and financial status of is-suers.The investment portfolio of the SSIBF will be structured towards diversification, com-bining low-risk and high-risk assets to achieve long-term investment objectives, as well as to ensure financial security. Accordingly, the SSIBF will allocate a minimum in-vestment of 80 per cent on bonds, certificates of deposit and fixed-income instruments, and a maximum investment of 20 per cent in shares, including listed stocks and stocks that are following the preparation process for listing.SSIAM will flexibly take advantage of market opportunities to add value to the fund in the short term. Investors can also easily buy and sell the SSIBF Fund Certificate to the fund management company and earn profit during the investment period.Managed by SSIAM's experts, SSIBF will follow aggressive investment strategies.The SSIBF's supervising bank is the Bank for Investment and Development of Vietnam (BIDV)'s Ha Thanh branch, and its transfer agent is the Vietnam Securities Depository (VSD).SSIAM CEO Le Thi Le Hang said the bond fund is targeted at individuals and organ-isations who are looking to grow their long-term assets.SSIBF is also an optimal choice for small-scale capital investors who want to allocate earnings to bonds and fixed-income assets, for investors who want an interest rate higher than deposits, but with easy liquidity, Hang said."With a safe investment portfolio, we hope SSIBF will become the best option to help investors indirectly and effectively invest in assets such as government and corporate bonds," she said.http://bizhub.vn/markets/ssi-asset-management-company-launches-bond-fund_287724.html

Promising M&A activities on the stock market

21/JUL/2017 INTELLASIA| DTCK

With thousands of companies listed and registered for trading shares on the stock mar-ket, the opportunities for investors to carry out mergers and acquisitions (M&A) deals are becoming more convenient than ever.Numerous M&A deals have taken place


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Vice general director of a securities company in Top 10 brokerage firms on HOSE and HNX shared with Dau Tu Chung khoan newspaper that in the last few years, brokers have always received orders from foreign investors. Accordingly, investors have made clauses about price range, volume, and conditions on re-purchasing shares of listed companies. Depending on each deal, the ordered volume would be calculated as a per-centage of the company's charter capital or in a certain number, and repurchased at a pre-determined price or based on agreement on profitability according to average price. Since there are many M&A deals of listed companies, brokers have been very busy, he added.In that way, many M&A deals of companies which are listed or registered for stock trading on the Unlisted Public Company Market (UPCoM) were conducted, regardless of being publicised or carried out quietly via the change of the management board.Gathering stocks on the market, acquiring stocks from state divestments, and buying stocks via private placements, etc. have made M&A of companies on the stock market to become more diversified and colourful.The typical cases widely known by investors on the stock market can be named as the M&A of Truong Thanh Furniture Corporation (TTF) with two consecutive M&A deals, M&A of Refrigeration Electrical Engineering Corporation (REE)the major stock hold-ers of energy firms (electricity and coal, etc.), mainly conducted via the acquisition of floating stocks on the market.Most recently, some share acquisitions of companies with poor financial assets at low prices have strongly taken place, in the hope of restructuring these firms' assets. Typ-ical deals are of Viet Nhat Investment Joint Stock Company (VNH), Hoa Binh Mineral Joint Stock Company (KHB), and NTACO Joint Stock Company (ATA), etc.Meanwhile, there are M&A deals carried out thanks to the strategy to divest capital of state-owned holders, such as GNTFoods (acquiring shares of National Tea Corpora-tion and National Livestock Corporation), F&N Diary Investment (acquiring shares of Vinamilk), or the Dream House Joint Stock Company (DRH, acquiring shares of Binh Duong Mineral and Construction Joint Stock Company (KSB)), etc.Among these companies, GTNFoods itself was an acquirer and was also acquired by foreign investors. Looking back at the history of the stock market over the past years, it can be seen that the divestment of state capital is a great motivator for M&A, thereby creating a strong growth for enterprises after equitisation and divestment.Another common M&A trend is the deals carried out via consolidation, merger, share swap, and issuance of shares to strategic partners. A number of popular deals included the joint of Hanoi general Export Import Corporation (Geleximco) in the restructuring of Hanoi Investment general Corporation (SHN), and the issuance of shares; and the share swaps of Foreign Trade and Investment Development Joint Stock Company of Hochiminh city (FDC) with Dat Phuc Design and Construction Joint Stock Company, of Bach Kinh Joint Stock Company, and of Thanh Thanh Cong Tay Ninh Sugar Joint Stock Company (SBT, merging with Bien Hoa Sugar Joint Stock Company (BHS)), etc.For most of the M&A deals that took place, the new bosses often appeared loudly. However, for some companies, although the nature of ownership has changed signif-icantly, and the management board has been replaced, the M&A deals were kept fairly quiet.Through observation, it can be seen that although there have been changes in the lead-ership of Sacom Investment and Development Joint Stock Corporation (SAM) or PetroVietnam Real Estate Joint Stock Corporation (PVL) or Dam Sen Water Park Joint Stock Company (DSN), etc., information about the M&A deals were not disclosed in the ownership report.In fact, the prosperity of M&A activities on the stock market in the recent time is partly thanks to the positive factors of the market, including the excitement of the market in the context when the VN Index continuously created new peaks to stimulate strong growth of liquidity. Not to mention, with the urges of the management authorities, the information transparency and disclosure of companies has been much improved, en-couraging investors to carry out M&A deals.


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Opportunities for M&A from internal restructuringIn the last three years, the term restructuring has been widely mentioned in Vietnam, and M&A is a powerful tool to carry out the restructuring, including the removal of weak financial businesses and the formation of healthy ones with positive financial sit-uation (M&A of securities company), or M&A between units of the same group to cre-ate greater power (as in the case of the two sugar companies mentioned in the above).In some cases, the restructuring of the internal business section has also created pushes in M&A, typically the case of Hochiminh city Infrastructure Investment Joint Stock Company (CII).Overall, these M&A deals have made significant contribution to the cost savings of corporate management, creating resonant powers for companies as in some cases com-panies face financial shortage despite having good business operation foundation.In such situations, the appearance of new bosses has created new lease of life for the companies, namely the case of SHN which overcame losses thanks to the participation of Geleximco.In 2017, SHN shareholders for the first time after many years received dividend pay-ment, and Geleximco also benefits as having another tool to mobilise capital for the business projects of the group, although so far, it seems to have not yet used this tool.The indifference of the marketA notable point is that many companies on the stock market are being ignored by the market. This is an important factor that creates great M&A opportunities.In fact, many companies are having the discounted rate on net cash flow per share (the cash balance per share after deducting debt) reaching nearly 40%. This is unreasona-ble, but it exists on the stock market of Vietnam, when most investors still tend to trade based on rumours.Companies with higher degree of the popularisation in ownership, attractive valua-tion or especially good core business lines, are more likely to be targeted for M&A deals, if they are not speculative stocks.The market is now seeing an M&A trend in which the goals are buying assets at low prices to restructure financial assets such as acquiring companies having monopolisa-tion of the previous management board that led to low stock price, or acquiring com-panies of which the discounted rate on the market is too high compared to the asset value, like the case of Kim Long Securities Company in the past. The success of these deals, mostly come from the indifference of the market, and the incumbent corporate leadership.At a negative angle, this M&A trend has devastated many businesses, with the ulti-mate goal of the new investor being the assets rather than the development of the com-pany. However, on the positive side, this M&A trend has created a more balanced market between sellers and buyers, enabling the management board of the company to be the real bosses, not employees.If this trend develops strongly, the market will avoid the situation of ownerless com-panies, which we can easily see in the companies having less than 20 percent share-holder participation on each shareholder general meeting.Beware of the trap from the half-way transparencyInvestors are more confident when participating in listed companies, because their lev-el of information transparency is higher than other businesses. However, many inves-tors suffered bitterness due to their confidence in such transparency.Many problems have arisen when investors really set foot in the business, such as loss-es in inventory, unrealistic liabilities and receivables, and fixed assets that have been valuated several times higher than market prices, etc.In addition to the shortage in asset quality, the questions related to corporate takeo-vers, especially in governance, etc. are making M&A in listed companies to be uneasy, particularly when the companies involved in the M&A deals are not cooperative in holding the shareholders meeting.


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Tradincorp to trade on UPCoM on July 24


The HCM City Electric Power Trading Investment Corp (Tradincorp) will trade its 23.6 million shares on the Unlisted Public Company Market (UPCoM) on July 24.According to Hanoi Stock Exchange, which runs the UPCoM, Tradincorp's shares will start trading at VND11,000 per share under code THE.Tradincorp was founded in September 2007 with registered charter capital of VND450 billion (US$19.75 million).The company was established by seven big shareholders, which operate in the power industry, including the EVN Southern Power Corporation, Sai Gon Real Estate Corpo-ration and Sai Gon general Service Corporation.Among those shareholders, the EVN Southern Power Corporation is the biggest share-holder of Tradincorp, holding seven million shares or 29.65 per cent of the company capital on March 20, 2017.In 2016, Tradincorp earned a revenue of VND252 billion, a yearly increase of 12.44 per cent and its pre-tax profit was more than VND25 billion.Tradincorp targets a revenue of VND1 trillion by 2025, becoming a highly profitable firm in the power trading and production industry.http://bizhub.vn/markets/tradincorp-to-trade-on-upcom-on-july-24_287726.html

F&N's subsidiary undeterred in appetite for Vinamilk shares


In spite of numerous failures, Singapore-based F&N Dairy Investments Pte., Ltd, a 100 per cent-owned subsidiary of Fraser & Neave Ltd (F&N), has expressed its determina-tion to own more stakes in Vietnam Dairy Products Joint Stock Company (Vinamilk) via registering to buy an additional 14.5 million shares.According to newswire Dantri, the transaction is expected to take place between July 24 and August 22. If successful, F&N Dairy Investments Pte., Ltd will increase its hold-ings in Vinamilk from 16.04 to 17.04 per cent, equalling 247 million shares.Previously, F&N Dairy Investments Pte., Ltd expressed its ambition to acquire 21.77 million Vinamilk shares, however, the company subsequently had to withdraw the of-fer due to unfavourable market conditions.Notably, the company registered to purchase 21.77 million shares during February 6-March 7, but only picked up 4.11 million, lifting its Vinamilk shares to 218.8 million, an estimated 15.07 per cent of the total shares.On May 11, the company completed the purchase of five million shares in Vinamilk to increase its holding to 16.04 per cent, equivalent to 232.7 million shares.F&N Dairy Investment Pte., Ltd and F&N Beverages Manufacturing Sdn., Bhd., anoth-er 100 per cent-owned subsidiary of F&N, spent VND11.3 trillion ($499.56 million) on buying 78.38 million shares, equalling a 5.4 per cent stake, in Vinamilk.Lee Meng Tat, F&N's chief executive officer for non-alcoholic beverages, said that Vi-etnam's largest milk producer is an example of what F&N wants in an acquisition: a company with market presence, well-known brands, and a strong distribution net-work.He stated that the ideal solution to increasing F&N's ownership rate in Vinamilk would be an M&A deal. If successful, it would help the company to enhance its com-petitive capacity against the two largest US soft drink giants in Southeast Asia, Pepsi-Co Inc. and Coca-Cola Co.http://www.vir.com.vn/fns-subsidiary-undeterred-in-appetite-for-vinamilk-shares.html

First Energy Efficiency Network launched in Vietnam


Vietnam's first Energy Efficiency Network has been officially launched in HCM City, giving a platform for companies to connect and improve energy efficiency.Speaking at the launch, Markus Bissel, head of the Energy Efficiency component of the project, said, "The objective of the network is to provide a platform to connect compa-nies to improve energy efficiency by sharing and learning from each other."He added this would be done by structured processes moderated by German energy


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efficiency experts. Companies will also benefit from energy audits and advice from qualified local experts, as well as linkage to German technology and services.The first Energy Efficiency Network was established in 1987 in Zurich, Switzerland. The model has become popular all over the world and has been proven to be an effec-tive initiative to stimulate energy efficiency. In the period of 2014-2020, it is estimated that there will be 500 energy efficiency networks in Germany."The rationale behind Vietnam Energy Efficiency Network is that every company has some knowledge in energy efficiency, and it is easier to collectively develop expertise and improve our overall efficiency. Each network comprises only 10-15 enterprises in order to maximise discussion and sharing opportunities. The networks will help com-panies reduce energy costs, improve productivity and competitiveness. They will also help increase transparency about energy use and data, and foster innovation across sectors," said Bissel.The first eight local companies from the textile, paper, logistical, rubber, and plastic sectors would be the first members of the network. German and local consultants will visit selected company sites and provide support for the audit.Participants include Nam Thai Son Group, No. 7 Garment Co., Ltd, Caosumina Binh Duong, Saigon Premier Container, Dong Tien Binh Duong Paper Co., Ltd, Dong Tien Hung Textile Co., Ltd, An Lac Labels Joint Stock Company, and Liksin Paper Packag-ing Company.As one of the most dynamically growing economy in Asia, Vietnam faces an enormous increase in the energy demand that will continue to grow at double-digit rates in the coming years. With regards to energy consumption, industry, transportation, and res-idential areas are the three biggest electricity consuming sectors.Vietnam has been paying great attention to the subject of energy efficiency. Energy ef-ficiency is a core element of both Vietnam's Power Development Master Plan until 2030 and the Green Growth Strategy. In this context, initiatives such as the Vietnam Energy Efficiency Network are important as they could also connect and empower businesses to play a key role in reducing energy costs and improve business efficiency.http://www.vir.com.vn/first-energy-efficiency-network-launched-in-vietnam.html

Become entrepreneurs, prime minister exhorts youth in Ben Tre


Prime minister Nguyen Xuan Phuc yesterday called on the youth in Ben Tre Province to intensify their pursuit of entrepreneurship for self-growth, making greater contri-butions to the society and the country.Speaking at the opening night of the Ben Tre Dong Khoi Start-up Festival in the Me-kong Delta province, Phuc hailed its efforts and achievements in promoting start-ups.Ben Tre was a leader in implementing the government's guidance and plans for start-ups, he said."There are many young people here who have started doing business and succeeded at a very early age. I am very touched to see that many young men and women have come up with new products welcomed by the society within a year of starting the 'Dong Khoi Start-ups and Develop Enterprises' programme," he said.Phuc said Ben Tre has experienced many socio-economic changes over the past 10 years, creating a better improvement for people to start new businesses.However, the province still lags behind other localities, facing several development challenges, he said."The youth need to realise the province's difficulties and try harder to change the situ-ation," he added.The "Dong Khoi Start-ups and Develop Enterprises" programme was launched last year to promote entrepreneurship as an effective means to boost economic growth and alleviate poverty.The first start-up competition was held this February. It received 45 start-up ideas and 22 business models proposed by people of various ages, mainly the youth.At the opening of this year's festival, seven ideas and 11 business models were award-ed prize money of VND305 million (US$13,400) in total.


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The festival has also become a place for local companies, small and medium-sized businesses, household businesses and cooperative groups to introduce their products to customers, and look for partnership and potential investors.It also promotes key local products, especially in the agriculture sector, to encourage the "Vietnamese people use Vietnamese products" campaign.The festival opened a day before the Ben Tre's investment promotion conference that will be held today.On this occasion, the province is calling for investment in 63 projects in 11 sectors, in-cluding renewable energy, eco-tourism, building infrastructure for industrial parks, high-tech agricultural and aquatic products processing, building urban areas and trade centres and solid and water waste treatment.http://bizhub.vn/news/become-entrepreneurs-prime-minister-exhorts-youth-in-ben-tre_287716.html

Hanoi faces school shortage in new urban areas

21/JUL/2017 INTELLASIA | DTI NEWS

Concerns about severe school shortage have been raised as Hanoi is flooded with apartment building projects without new parks or schools.Pham Thi Thu Huyen, vice chair of Thanh Tri District, said the number of children in nursery schools increased by 6,600 and 500 pupils in primary schools, mostly in areas with new high-rise buildings.Ta Thanh Oai Primary School has 12 classrooms for first graders. However, there are 913 children living in the commune. If all of them are enrolled in Ta Thanh Oai Primary School, each class will have 80 pupils. The local authorities have to direct pupils in some wards to other schools.The authorities in Cau Giay and Long Bien districts have expanded classrooms and opened more schools in the past year, but they can't keep up with the rapid pace of ur-banisation. The average number of pupils per class is above 50.Meanwhile, Hoang Mai District authorities said their total of 65 nurseries, primary and secondary schools can't accommodate the annual growth rate of 6,000 to 8,000 pupils in the area.Le Hong Vu, head of Tay Ho District Department of Education and Training, said the pressure had lessened as the school system was being completed. However, he is still worried about ongoing apartment projects."Our school system is basically completed but there are several apartment buildings being completed. Once the residents move in, they may cause school shortage. We are planning to expand the nurseries and build a new primary school in Thuy Khue Ward this year," he said.This is the second year Hanoi allow both direct and online registration to ease overload at schools and make it more convenient for parents. For 2017-2018 school year, most schools basically met the goal to enrol 557,000 children to nursery school and 110,000 pupils to 6th grade.Tran Luu Hoa, head of Hai Ba Trung District Department of Education and Training, said the plan was approved on May 15 and had been circulated among all parents. Even though the number of children in the area has been on the rise, they have been able to allocate them to 30 public nurseries.http://dtinews.vn/en/news/020/51933/hanoi-faces-school-shortage-in-new-urban-are-as.html

Le Thanh-Oyadav border gates opened to traffic


Vietnamese deputy prime minister Trinh Dinh Dung and Cambodian counterpart Kim Ke Yan on July 19 attended the ceremony to open Gia Lai Province's Le Thanh border gate and Ratanakiri Province's Oyadav border gate to traffic.The Ministry of Transport said the road transport agreement signed in 1998 between Vietnam and Cambodia and the protocol on implementing the agreement signed in 2005 have been implemented since 2006. According to agreements, the number of ve-hicles carrying goods and passengers allowed to move between the two sides daily is


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500, via seven pairs of border gates.However, due to uncompleted infrastructure, only five of the seven pairs of border gates have been put into operation, including Moc Bai (Tay Ninh)-Ba Vet (Svay Rieng), Xa Mat (Tay Ninh)-Trapeng Phlong (Kongpong Cham), Tinh Bien (An Giang)-Phnom Den (Takeo), Ha Tien (Kien Giang)-Prek Chak (Campot) and Hoa Lu (Binh Phuoc)-Trapaeng Sre (Kratie).To complete the infrastructure of Le Thanh-Oyadav border gates, Vietnam has provid-ed the Cambodian side with preferential credit to upgrade Road 78 and a section be-tween the two border gates' checkpoints.Speaking at the ceremony, deputy PM Trinh Dinh Dung said together with other pairs of border gates which have been operational earlier, Le Thanh-Oyadav border gates will help reduce transport fees and travelling time, and create favourable conditions for transport of goods and passengers between the two countries.The operation of the border gates is expected to promote cooperation in multiple sec-tors, especially economic development, trade and investment, between Gia Lai and Ratanakiri as well as the Central Highlands of Vietnam and northeastern provinces of Cambodia.http://english.thesaigontimes.vn/55113/Le-Thanh-Oyadav-border-gates-opened-to-traffic.html

Nghi Son Economic Zone to get luxury resort


The People's Committee of the central province of Thanh Hoa has given its in-principle approval to the BID Pristine Resort to invest in the Nghi Son Economic Zone (EZ).Located in Hai Hoa beach amidst natural beauty, the 500 billion VND (22.2 million USD) project, with its unique design, covers an area of 8.7ha. The BID Pristine Resort is expected to become one of the first hi-end resorts in the Nghi Son Economic Zone.Tran Anh Duc, BID Group's construction director, said the resort would include 400 rooms having five-star standards, restaurants and other services. The facilities would meet the demand of tourists and foreign specialists working in the EZ.Duc affirmed that the BID Pristine Resort would become an ideal location for ecotour-ism, also combining forest and sea conservation.The construction is scheduled to start in the last quarter of the year and become oper-ational in 2020. The project is expected to contribute to the province's development.http://en.vietnamplus.vn/nghi-son-economic-zone-to-get-luxury-resort/115117.vnp

Use finite resources optimally, PetroVietnam told


The Vietnam National Oil and Gas Group, PetroVietnam, should come up with an op-timal plan that balances its exploitation of fossil fuels with the nation's long term needs, a senior official said on Wednesday."Our resources are not infinite, and based on the current situation of world oil prices, we need to increase output while ensuring a long-term source of raw materials and en-ergy for the country," said Mai Tien Dung, minister and Head of the government Of-fice.Therefore, PetroVietnam should come up with the most effective exploitation plan, strive to reduce costs, effectively managing cash flows and improve its finance man-agement mechanisms, he said.Dung made the observations and suggestions as the head of a working group assigned by the prime minister to make an inspection visit to the PVN headquarters in Hanoi.He said that while business results in the first half of the year show positive signs of recovery, PetroVietnam needs to take more drastic measures to increase its competi-tiveness and efficiency in operations.The team also conveyed PM Nguyen Xuan Phuc's requests for clarification and expla-nations on a variety of issues including PVN's personnel structure and the handling of loss-making projects.Dung said the PM highly appreciated PetroVietnam's production and business results in the first half of this year, and encouraged the group to work hard to overcome a dif-


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ficult and challenging period when it has been plagued with mismanagement scandals and huge losses incurred by several unprofitable projects.The group accomplished all its first-half targets. It reported revenues of VND247.1 tril-lion (US$10.8 billion) in the first half of the year, exceeding the target by15 per cent and equalling 56 per cent of its yearly goal.Crude output reached 7.9 million tonnes, two per cent higher than planned for the first half of the year and 52 per cent of the annual plan. Gas production of 5.25 billion cubic metres in the first half of this year equalled 97.6 per cent of the plan.Dung said PM Phuc has noted that while the group has managed to surpass all busi-ness production targets, there were many challenges ahead that required PetroViet-nam to carry out "synchronous and effective measures" to tackle remaining problems and train particular focus on some main issues of concern.Dung also said PetroVietnam should try its best to achieve its target of exploiting 13.28 million tonnes of crude oil and 10.61 billion cubic metres of natural gas in accordance with directions issued by the PM and Ministry of Industry and Trade.Another aspect that has greatly impacted PetroVietnam's growth is the inefficient han-dling of its loss-making projects, including three biofuel factories in Phu Tho, Quang Ngai and Binh Phuoc provinces, the PVTex Dinh Vu Yarn Factory and the Dung Quat ship-building plant, Dung said.He said the PM's view was that loss-making projects should be "resolutely handled in accordance with market mechanisms while respecting the principles of self-control and self-responsibility of enterprises".He also reiterated the government's standpoint that the State will not provide more capital for inefficient projects.PetroVietnam needs to speed up the investment procedures for tardy thermal power projects including Long Phu 1, Song Hau 1, Thai Binh 2, putting them into operation soon as they will have very strong impacts on the growth of the group as well as the country as a whole, Dung said.It has to reconsider restructuring and equitising as it plans to deal strictly with ineffi-cient member units, he added.Clarifying the performance of tasks assigned by the government and the PM from ear-ly 2016, PetroVietnam general director Nguyen Vu Truong Son said the group had ac-complished 141 of 189 tasks.Son said PVN will take drastic measures to handle inefficient projects.He noted that the MoIT has approved bankruptcy proceedings for the Phu Tho Etha-nol Biofuel Plant and the Dung Quang Ship-building Company. It has asked the group to work with foreign investors to resume operations of the Binh Phuoc ethanol biofuel plant, given its role in implementing the E5 biofuel initative slated for next year. The other two products should be restarted before divestment.However, in order to achieve all its objectives, PetroVietnam has petitioned concerned agencies to approve the reform of its financial mechanisms and corporate management as well as the group's restructuring plan for the 2016-2020 period, Son said.He also asked for the State's support in removing difficulties and problems related to the product consumption of the Nghi Son refinery and petrochemical complex in Thanh Hoa province, besides offsetting losses generated by the difference in the im-port and export tax rates.http://bizhub.vn/news/use-finite-resources-optimally-petrovietnam-told_287715.html

AC Energy readies Vietnam investments


AC Energy Holdings, a wholly-owned subsidiary of conglomerate Ayala Corp, is in talks with several Vietnamese companies to construct solar and wind projects in the Southeast Asian country, an executive said on July 19.We're doing a lot of early development work in Vietnam regarding solar and wind. We're also open to conventional energy projects, but nothing has been reduced to writ-ing yet, John Eric Francia, president of AC Energy, told reporters on the sidelines of the 5th Annual Philippines Power & Electricity Week Forum.


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Francia said the company was negotiating with potential affiliates in Vietnam, adding that solar projects should be up and running by June 2019 in line with the Vietnam government timeline.We are really exploring our options in a variety of ventures in depth. We will not in-vest on our own in Vietnam but will do so only if we are successful in locating the right local affiliates, he said.http://english.vov.vn/economy/ac-energy-readies-vietnam-investments-354938.vov

Pou Chen awaits investment certificate for new footwear factory in second city


IDEA Limited Company (a subsidiary of Pou Chen Group) singed a contract to rent land in Tan Tao Industrial Zone (IZ) and they are waiting for the investment certificate to invest and build a footwear factory in this IZ in HCM City.On April 28, 2017, IDEA Limited Company signed a contract to rent about 20 hectares of land in Tan Tao IZ with an estimated lease fee of about VND500 billion ($20 million). The land plot will house a footwear plant. The project may be divided into several phases, but in the first phase, IDEA will lease 6.5ha only.According to a source of VIR, the investor of this footwear factory project is actively finishing the necessary procedures, and if all goes well, the project is expected to re-ceive the investment certificate soon."With the aim of stable manufacturing and sustainable development, we hope to create new footwear chain as well as enhance product quality. Thus, to reach this aim, we de-cided to build a new plant in Tan Tan IZ," Yeo Cheng Wu, representative of Pou Chen Group, said.Pou Chen Group is a footwear manufacturing giant also responsible for the original equipment manufacturing (OEM) and original design manufacturing (ODM) for nu-merous famous footwear brands in the world, such as Nike, Adidas, Asics, and New Balance.Pou Chen Group entered Vietnam in 1994 with the first plant located in the southern province of Dong Nai. By the end of 2016, Pou Chen Group had seven sizable plants located in five cities and provinces in Vietnam, including HCM City, Dong Nai, Tien Giang, Tay Ninh, and Long An. Its total investment in Vietnam has reached more than $1 billion and it has created jobs for more than 200,000 Vietnamese people.However, in recent years, Pou Chen's Vietnamese workers have gone on strike several times. In particular, on February 27, 2016, about 17,000 workers in Pou Chen's foot-wear factory in Dong Nai went on strike to protest a new rule they deemed unfair and unreasonable.Strikers said the company was bleeding them dry with the new regulation, which pun-ishes workers who take off four days or more a year by withholding their end of the year bonuses, according to a report by Lao Dong newspaper.After three days of strike, leaders of Pou Chen's factory in Dong Nai rescinded the new regulation and agreed to pay the strikers' salary for the three days to call them back to work.Previously, in March 2015, about 90,000 of Pou Chen' workers in HCM City have gone on strike to oppose a new regulation under which they would not be allowed to take a lump-sum social insurance allowance after resigning from the company.Similarly, in 2011 and 2010, there were also strikes in different cities and provinces of Vietnam due to numerous conflicts between workers and Pou Chen, involving the benefits of both parties.http://www.vir.com.vn/pou-chen-awaits-investment-certificate-for-new-footwear-factory-in-second-city.html

Japanese company buys 2.2pct of Pizza 4P's


Chikaranomoto Holdings to use stake to expand its Ippudo ramen noodles chain in Vi-etnam.Chikaranomoto Holdings from Japan has announced it will cooperate with Pizza 4P's to develop the Ippudo restaurant chain in Vietnam.


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The Japanese company won agreement from Pizza 4P's director Yosuke Mashiko on pouring $445,000 into Pizza 4P's to secure a holding of 2.2 per cent.Chikaranomoto prices Pizza 4P's at up to VND460 billion ($20.9 million), or nine-times higher than its charter capital of some VND51.5 billion ($2.3 million).The first Ippudo outlet is expected to open in early 2018, specialising in ramen noodles, and it also plans to expand its ramen brand worldwide.Chikaranomoto Holdings now operates a ramen restaurant chain in Japan and else-where and produces and sells related products and services to restaurants. It has 16 subsidiaries and nine associates.It has many brands in Japan, including Ippudo, Gogyo, and Bread Junction, and is also involved in business consulting for restaurants and franchise businesses.As at the end of June, Chikaranomoto had opened 69 stores in 12 countries and now prioritises the Southeast Asian market. It has confirmed it will open more outlets in Vi-etnam.The Pizza 4P's chain was founded by Mashiko in 2011. Initial funding was only $100,000, from family savings. Mashiko now holds 80 per cent of Pizza 4P's, with the remaining 20 per cent held by Seedcom.http://vneconomictimes.com/article/business/japanese-company-buys-2-2-of-pizza-4p-s

Work starts on $5.1m Soc Trang shrimp farm


Construction of a VND120 billion (US$5.21 million) high-quality shrimp breeding farm began in the Cuu Long (Mekong) Delta province of Soc Trang on Tuesday.Finaced by Viet-Uc Corporation, the farm will cover over 23ha in the first phrase, which is slated to be completion in June 2018.The first stage will provide around five billion breeding shrimp per year and generate 400 local jobs. The second stage, which will start in late 2018, will extend to more than 60ha.The company has produced about 40 billion breeding shrimp, accounting for 24 per cent of the market share, its chair Luong Thanh Van said. He added that it is his com-pany's fourth farm in the Mekong Delta and its ninth nationwide.Tran Van Chuyen, Chair of the provincial People's Committee, said Soc Trang needs 16 billion 18 billion breeding shrimp each year, adding that the project will help re-duce transportation costs and offer jobs to hundreds of local people.He pledged all possible support for the project and asked the company to accelerate the farm's construction.http://bizhub.vn/news/work-starts-on-51m-soc-trang-shrimp-farm_287718.html

Tuong An Vegetable Oil's 1H pre-tax profit up 34pct


Leader in Vietnam's cooking oil industry records pre-tax profit of $2.77 million in first half.One of Vietnam's leading vegetable oil producers, the Tuong An Vegetable Oil JSC (TAC), has released its business result for the first half of this year, showing net sales of VND1.97 trillion ($86.6 million), an increase of 4.7 per cent year-on-year.Gross profit rose 25.5 per cent, largely attributable to a restructuring of its product mix. This led to an increase in its gross profit margin, from 9.1 per cent to 10.9 per cent. Pre-tax profit was VND63 billion ($2.77 million), up 34.2 per cent year-on-year.A key factor behind the increase in profitability was changing its product strategy to focus on higher margin products. TAC also improved its inventory management by creating greater efficiencies in the sales process.Apart from restructuring its product portfolio, TAC also reviewed its distribution net-work during the first half to assess growth potential in each product. This will result in better mapping of product demand and consumer tastes to achieve better sales effi-ciency.TAC is to launch new oil products in the second half that are nutritious and healthy to better cater to ongoing increases in demand and needs among consumers. It will also


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introduce additional packaged products in the third quarter as part of its larger strat-egy to better utilise its distribution network.Established in 1977, the TAC brand has been familiar with many generations of Viet-namese over the last 40 years and is one of the largest producers and distributors of edible oils in the country. November 2016 was a key milestone, when the company of-ficially joined the KIDO Group Corporation.Combined with best practice in management systems, effective marketing, and strong financial capacity it acquired from joining KIDO, it also significantly improved its business activities in the entire value chain, from purchasing and manufacturing to marketing, sales, and distribution.It strategy for the upcoming period is to concentrate on developing and diversifying its portfolio in value-added products, optimising supply chains and operational effi-ciencies, and adopting a business model and brand campaign to remain the leader in Vietnam's cooking oil industry.http://vneconomictimes.com/article/business/tuong-an-vegetable-oil-s-1h-pre-tax-profit-up-34

Vietnamese firm found for holding illegal tour to Thailand

21/JUL/2017 INTELLASIA | DTI NEWS

Police in Thailand have found a Vietnamese company organising an illegal tour to the country and detained the tour guide and the leader of the tour.EPAC Education Application JC Company in the Mekong city of Can Tho which spe-cialises in holding educational tours to Thailand took a group of 17 people to Thailand on June 15-19. The package fees for each person are VND6.5 million (USD295.4).However, when arriving in Thailand, the group had to find their accommodation and transport services by themselves, instead of being arranged by the company as agreed before. Meanwhile, the tour guide couldn't speak English, so some members of the group had to help him.On June 18, Thai police detained the tour guide Ngo Thanh Den and the leader of the tour Duong Hoai Han, claiming the tour was not officially recognised. As a result, the tourists were left in Thailand and they had to cover fees for all services during the time in the country until local police helped them to come back Vietnam.Speaking with reporters, Tran Xuan Vinh, Chair of the company, said that their Thai partners cancelled contracts with the company so they had failed to arrange the service for the tourists. After that, Den and Han decided to hire vehicles and other services for the tour but were stopped by Thai authorities.The Vietnam National Administration of Tourism urged Can Tho authorities to in-spect EPAC Education Application JS Company to protect the interests of the tourists.Le Minh Son, deputy director of Can Tho City's Department of Culture, Sports and Tourism, said EPAC does not have any licence for outbound tours, but still organised the tour to Thailand. Its tour guide does not have a card for international tours.The firm admitted to its violation which would be fined up to VND50 million (USD2,272). The company has been also requested to provide compensation for the tourists by August 10.http://dtinews.vn/en/news/018/51935/vietnamese-firm-found-for-holding-illegal-tour-to-thailand.html

Vietnam Airlines offers 20pct discount on domestic flights


National carrier Vietnam Airlines is offering 20 per cent discount on domestic fares for the first 7,000 online customers, on the occasion of Vietnamese War Invalids' and Mar-tyrs' Day.The bookings must be done on the airline's official website, www.vietnamair-lines.com, using the promo code PR20TBLS277.Discounted bookings will start on July 22 and continue till July 31. They will apply for domestic flights that depart between September 5 and December 28.The national carrier operates 30 domestic flight routes across 16 destinations, and has good flight frequency, modern crew and four-star quality service.


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Many green power technologies exhibited


Many power-efficiency lighting products and renewable power technologies are being introduced at the Saigon Exhibition and Convention centre (SECC) in District 7.This is the 10th International Exhibition on Electrical Technology & Equipment (Viet-nam ETE 2017) and the 7th International Exhibition on Products, Technologies of En-ergy Saving & Green Power (Enertec Expo 2017), featuring nearly 300 booths.The exhibition, organised by the HCM City Department of Industry and Trade togeth-er with HCM City Power Corporation and C.I.S Vietnam, attracts more than 170 enter-prises from Japan, South Korea, China, Italia, Turkey, Russia and Singapore among others to come and introduce their new technologies and products in the field.Especially, products that are power-saving and use green energy technologies are the main focus at the exhibition, including solar panels, wind power products, LED lights, smart electric meters and power transformers.Some 90 percent of electric equipment and products used in Vietnam are manufac-tured by domestic companies, said Nguyen Phuong Dong, deputy director of HCM City Department of Industry and Trade.A lot of domestic manufacturers have also become reliable partners for many top cor-porations of the world and they are boosting exports to many other markets in South-east Asia, South America and Africa.Products using renewable power sources now get the top priority in order to meet the market's demand and the proposed National Energy Efficiency Programme, Dong said. Therefore, not only latest achievements but also the potential solutions for energy efficiency and renewable energy are introduced at the exhibition.Many seminars will also be held on the sidelines of the exhibition, with the attendance of administrators, projects owners and specialists. Besides, there will be many business matchmaking activities at the event.http://english.thesaigontimes.vn/55122/Many-green-power-technologies-exhibit-ed.html End
