Japan – a tiger economy for labour exports

For calendar year 2014 the export of temporary labour to Japan in terms of number of workers jumped 60% on-year to 16,283, according to the Overseas Labour Management Department.

Meanwhile, a representative from LOD Human Resource Development Corporation in Hanoi said the character of the labour migration has changed with demand for female migrant workers on the upswing.

The occupations of guest workers have also diversified to include professionals, factory workers, and domestic workers, while the tradition of Vietnamese construction workers, sailors, and nurses remains strong.

Vinaconex Trading and Manpower Joint Stock Company said Japanese agriculture firms have been actively recruiting married couples to work in Ibaraki prefecture. Specifically Vietnamese workers aged between 25 and 30 with high school certificates and two-years of experience are in high demand.

Nguyen Van Hiep, Vinaconex Director General, said the construction industry in Japan is a hot market for Vietnamese workers in the lead up to the Olympics in 2020. For the next five years, Japan will need to import on average roughly 20,000 workers.

Japan has become a tiger market for Vietnamese workers seeking opportunity to earn higher wages for themselves and their families, providing many educational and training opportunities.

Thanh Hoa assists projects in Nghi Son EZ

Speeding up administrative reform, organising more investment promotion activities, and focusing resources on upgrading infrastructure are the main measures the central province of Thanh Hoa is going to take in a bid to support businesses operating in its Nghi Son Economic Zone (EZ) this year.

The Nghi Son EZ covers an area of more than 18,600ha, with most factories focusing on heavy industry, basic industry and the Nghi Son seaport.

In 2014, the zone attracted 41 domestic projects with a total registered capital of over 3.1 trillion VND (145.7 million USD), and three foreign investment projects worth 40.5 million USD.

In the year, enterprises in the zone generated 18 trillion VND (846 million USD) in revenue and created jobs for around 63,000 labourers.

The zone also houses the Nghi Son Oil Refinery and Petrochemical Complex (NSRP), the largest-ever in Southeast Asia and the largest FDI project in Vietnam with capital topping 9 billion USD.

As many as 27 percent of the project’s works has been completed, with 1.65 billion USD disbursed.

Vietnam’s economy continues recovery trend in 2015

The Vietnamese economy is expected to continue recovering in 2015, though slowly, according to releases from a workshop in Ho Chi Minh City on January 8.

Addressing event attendees, Economist Nguyen Chi Hai from the Ho Chi Minh City’s University of Economics and Law said there is a need to improve economic strategies by focusing on productivity, effectiveness and competitiveness.

He also emphasised the importance of science and technology playing a vital role in economic development.

At the workshop, participants also focused their discussions on increasing the tempo of equitisation of State-owned enterprises (SOEs). According to official statistics, only 143 SOEs were privatised during the first ten months of 2014, far below the 432 intended enterprises for the 2014-2015 period.

During 2013 and first ten months of 2014, SOEs only withdrew 4.4 trillion VND out of 21 trillion VND (1 billion USD) they had invested in non-core business.

In 2015, SOEs are expected to divest an estimated 16.367 trillion VND.

Doosan Vina exports first shipment in 2015

The Water Doosan Vina Factory, a subsidiary of the RoK–invested Doosan Heavy Industries Vietnam Co., Ltd, has exported five units of a seawater desalination evaporator to Chile as its first shipment of 2015.

The remaining units of the device will be shipped from now until end of April 2015.

When assembled and put into operation, the evaporator can produce 220 million liters of purified water a day for 550,000 people working at Escondida copper mine, which is located in the northern Atacama Desert of Chile, the world’s largest copper mine.

The Doosan Vina’s shipment was made as part of the Escondida Water Supply project signed with the Chilean side on February 19, 2014.

Singapore leads ASEAN investors in Vietnam

Singapore topped the list of eight ASEAN countries investing Vietnam, with 1,353 projects worth 32.7 billion USD, accounting for 60 percent of the total ASEAN foreign direct investment (FDI) registered in the country.

According to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment (MPI), Singapore, which also ranked third among 101 foreign investors in Vietnam , was followed by Malaysia with 10 billion USD, comprising 22 percent of total FDI, and Thailand with 6.7 billion USD, making up 12 percent.

Singapore’s investment projects have proved effective, greatly contributing to Vietnam’s job generation, export and economic growth. Notably, the Vietnam-Singapore (VSIP) Industrial Zone is a symbol of the friendship and cooperation between the two countries.

ASEAN investment has covered all the 18 economic sectors in Vietnam, with the manufacturing and processing sector topped the list with 974 projects worth 21.7 billion USD. It was followed by real state with 93 projects capitalised at 16.5 billion USD, and construction with 196 projects worth 3.1 billion USD.

ASEAN investors have been present in 55 of 63 national provinces, mainly in Ho Chi Minh City, Hanoi, southern Ba Ria-Vung Tau and Binh Duong, central Ninh Thuan and northern Hai Duong provinces.

Promoting investment from ASEAN countries will be continued to ensure increased FDI flow into Vietnam , especially in the context of the formation of the ASEAN Economic Community later this year, FIA Director Do Nhat Hoang said.

In 2014, ASEAN nations registered 53 billion USD in FDI in Vietnam, or 20 percent of the nation's total figure.

According to the FIA, the foreign investment sector recorded a trade surplus of 17.03 billion USD last year, having generated 101.59 billion USD in export turnover, an annual increase of 15.2 percent, or equivalent to 68 percent of the country's total export revenue, while importing 84.56 billion USD worth of goods, a 13.6 percent increase.

Dollar rises after forex rate change

The State Bank of Vietnam weakened the Vietnamese dong by 1 percent, raising the USD-VND daily reference rate from 21,246 VND to 21,458 VND.

After the State Bank's decision to increase the inter-bank average exchange rate by 1 percent on January 7, numerous banks increased the US dollar exchange rate.

However, given the strength of the US dollar against most emerging market (EM) currencies in early 2015 and with the US dollar-Vietnamese dong having been closing in on the topside of the bank for the past few weeks, the move does not come as a complete surprise.

HSBC experts said further Vietnamese dong weakness would only be moderate, as underlying fundamentals had not deteriorated. They expected another 1 percent depreciation later this year, pushing the rate to 21,750 per dollar VND.

The experts said USD-VND had been trading closer to the top side of the band through the course of December in line with the much stronger US dollar seen over the last few months. This shift in the reference rate should be seen as something of a catch up with other emerging market currencies. Indeed, a 1 percent fall in Vietnamese dong versus the US dollar actually represented a continued outperformance versus most other Asian currencies since the start of the first quarter, they said.

There was no significant fundamental deterioration in recent weeks which led the SBV to depreciate the Vietnamese dong. Although the trade balance flipped to 900 million USD deficit over the month, causing an annual 2 billion USD surplus, FDI flow was robust, registering around 2.3 billion USD in December and 15.6 billion USD over 2014 as a whole.

Furthermore, inflation continued to decrease in Vietnam, pushing real interest rates into positive territory. Interbank Vietnamese dong rates have been broadly rising since October, suggesting that Vietnamese dong liquidity is not excessively loose.

In response to the State Bank's decision, selling prices ranged from 21,420 VND -21,450 VND and purchasing prices were set at 21,510 VND - 21,520 VND per US dollar at commercial banks including Vietcombank, Vietinbank, Eximbank and Techcombank.

This is the first time this year the State Bank has adjusted the exchange rate, a move that aims to bring the market in line with the international and domestic financial market climate and stabilise the foreign exchange market. The central bank plans to implement measures and policy instruments to stabilise the exchange rate and foreign currency market on the new rate platform.

During a conference on banking sector responsibility in 2015, Governor of the State Bank Nguyen Van Binh stressed that one of the sector's targets this year was maintaining the stability of the foreign exchange market and keeping rate fluctuation below 2 percent, though he added this would not be easy.

Bac Lieu aims for 447 mln USD in farm export revenue

The Mekong Delta province of Bac Lieu hopes to earn 447 million USD from exporting agricultural products in 2015, a 47 million USD increase from 2014.

According to Luong Ngoc Lan, Director of the provincial Department of Agriculture and Rural Development, Bac Lieu will focus on promoting aquaculture and offshore fishing, while implementing effective models of shrimp, rice-shrimp, and shrimp-crab-fish farming.

Additionally, emphasis will be placed on intensifying intensive and semi-intensive shrimp farming, as well as developing large-scale rice field models which apply the Vietnamese Good Agriculture Practice (VietGap) in the year.

In an effort to realise this lofty target, local authorities have taken measures and implemented incentives related to capital, technology, and training, as well as enhanced trade promotion activities to further support local exporters. They have also encouraged processing enterprises to apply the latest technologies to their production lines to create higher quality products.

Veterinary medicine trading and breeding production within the province will be strictly inspected and managed.

Thanks to the State’s support policies, Bac Lieu harvested 282,000 tonnes of aquatic products in 2014, 109 percent of the yearly target, earned more than 430 million USD from seafood exports, 4 percent above the 2014 goal.

Vietnam, South Africa enjoy growing trade

Bilateral trade between Vietnam and South Africa is on an upward trend with an estimated turnover of 962 million USD in 2014, up 5 percent from a year ago.

Of the figure, Vietnam’s exports to South Africa reached 815 million USD and imports were 147 million USD, said Vietnam Trade Counselor Nguyen Hong Tien.

Two-way trade between the two countries experienced remarkable features, Tien said, adding that coffee and footwear were up 71 percent and 7 percent, accounting for 18 percent and 12.5 percent of the market shares, respectively.

Meanwhile, the import of scrap steel from South Africa saw a 38 percent decrease due to Vietnam’s sluggish property market.

Tien said the economic development forecast for both countries in 2015 is positive. The Vietnamese Government has set a goal for a GDP growth rate of 6.2 percent against the last year’s figure of 5.98 percent. South Africa has predicted a growth rate of 2.6 percent, nearly doubling 2013’s figure.

According to the Vietnamese official, the Vietnamese Government’s attention to enhancing ties with Africa, including South Africa, and the acceleration of diplomatic and trade promotion activities in 2015 will create favourable conditions for boosting bilateral trade between the two countries.

However, he pointed out a number of difficulties in payment and transportation between the two countries, hindering trade.

Furthermore, Vietnamese enterprises have not paid sufficient attention to promising markets in Africa, including South Africa, such as making fact-finding tours or joining fairs and exhibitions.

According to the Trade Office at the Vietnamese Embassy to South Africa cum Mozambique, Zimbabwe, Namibia, Botswana, Swaziland and Lesotho, last year two-way trade turnover between Vietnam and the African countries reached 92.9 million USD, 34.7 million USD, 26.4 million USD, 21.1 million USD, 14.7 million USD, and 12.3 million USD, respectively.

Cooperative prospects between Vietnam and the countries are huge as they are in high demand for importing Vietnam’s key export products, especially rice, Tien said.

South Africa will act as a gateway for improved relations with other African countries, he added.

HCM City’s property market expected to grow in 2015

Ho Chi Minh City’s property market is predicted to experience significant growth in 2015 as the number of apartments for sale continues surging, especially within districts 2, 9, Binh Thanh, and Thu Duc, according to CBRE Vietnam.

According to CBRE’s recent market research report from the last quarter of 2014, high-end property sales increased significantly in the reviewed period, especially among newly available projects.

Marc Townsend, CBRE Chief executive officer, said many domestic investors are taking a renewed interest in real estate projects as a result of positive and promising market recovery signals.

He revealed his firm intends to work with 12 leading experts in the field in Southwest Asia who have expressed interest in entering Vietnam’s property market.

The country’s ongoing macroeconomic stability, improving purchasing-power and favourable changes in the Housing Law have contributed significantly to the market’s recent recovery, Townsend noted.

The last quarter of 2014 recorded 6,760 new units, a 117.8 percent increase from the previous quarter between quarters and 105.2 percent from the previous year. Progress in the reviewed quarter brought the total of new properties in 2014 to 14,807 units, 3.2 times the units developed in 2013.

The new properties saw a soar in sales, causing the overall sales rate among high-end properties in 2014 to reach 60 percent, with the mid-range properties following at 35 percent.

About 15,000 new apartments were available in 2014, setting a record figure over the last four years, according to Duong Thuy Dung, Head of the CBRE Research and Consulting Department.

Currently, investors from Singapore and the Republic of Korea are working to commence large-scale projects in the city, while Japanese investors and joint ventures are seeking locations for their housing projects.

Northern electronics retailers in expansion race

Multiple electronics supermarket chains in northern Vietnam are in a race to expand operations beyond Hanoi in order to increase revenues and cash in on rising shopping demand in neighbouring provinces, especially before the Lunar New Year holiday (Tet), the Saigon Times Daily reported.

Electronics retailer Tran Anh has just opened three stores in Nghe An, Hai Duong and Hai Phong after investing in new facilities in Ninh Binh, Nam Dinh, Bac Ninh and Phu Tho provinces. Tran Anh now has 16 electronics stores in the northern region, including nine in the capital city.

Other big names like HC, Media Mart and Pico have also reached out to more northern provinces to capitalize on surging shopping demand before Tet, which falls on February 19. HC inaugurated a new store in Nghe An province last month while Pico is present in Phu Tho and Vinh Phuc provinces.

At present, Media Mart is leading the electronics market in the north with 18 stores, followed by Tran Anh with 16 stores, HC with 14 and Pico with seven.

Experts said northern electronics retailers are now focusing on operation expansion outside Hanoi as they are sure about chance of success in this region. Pico has had to close its store in Ho Chi Minh City in southern Vietnam to concentrate resources on the northern market.

Electronics retailers expected new outlets in Hanoi’s neighboring provinces will help them boost sales as competition in the capital city has turned intense.

Nghiem Xuan Thang, Deputy General Director of Tran Anh Digital World Co., was quoted as saying that the company plans to open four supermarkets in northern cities and provinces this year before expanding to HCM City and other southern provinces in the coming years.

Statistics from market research firm GfK showed Vietnamese consumers spent about 28 trillion VND on electronics and technology products in the third quarter of last year, up nearly 21 percent year-on-year.

Deputy Prime Minister Nguyen Xuan Phuc has just approved the basic contents of a joint project on increasing goods transport between Vietnam and Laos , which were proposed by the Ministry of Transport.

The project outlines solutions to facilitate the movement of land vehicles between the two countries, helping improve the efficiency of trans-national and transit transport of goods and make full use of the current road networks of the two countries.

It is hoped that the project will help to raise two-way trade to 2 billion USD in 2015 and 5 billion USD in 2020, as well as increasing import-export turnover of the Greater Mekong Sub-region (GMS) countries and attracting more goods from Laos transiting Vietnam for export and vice versa.

Vietnam and Laos have seen their transport cooperation expanding since they signed an agreement facilitating cross-border road transport in 2009 and a protocol to implement the deal in 2010.

The two countries are also members of a multilateral agreement on facilitating cross border transport of passengers and goods among the Mekong subregion nations.

HSBC, ANZ positive about adjusted VND/USD reference rate

HSBC and ANZ gave positive reviews on the State Bank of Vietnam (SBV)’s decision to raise the VND/USD daily reference rate by 1 percent starting from January 7.

Under the decision, the rate is up from 21,246 VND to 21,458 VND per USD, around which VND/USD is allowed to trade within a +/- 1 percent range.

The research department of the Hong Kong and Shanghai Banking Corporation Limited (HSBC) said the SBV’s early move is in line with a much stronger growth of USD against other emerging market (EM) currencies since the beginning of 2015 and with the US dollar-Vietnamese dong having been closing in on the topside of the band for the past few weeks.

HSBC experts viewed the reference rate adjustment as a catch-up with other EM currencies. A one percent fall in Vietnamese dong versus the US dollar actually represented a continued outperformance versus most other Asian currencies since the start of the first quarter last year, they said.

None notable deterioration that could lead the SBV to devaluate the Vietnam Dong, has been recorded recently. Despite the 900-million-USD deficit in December 2014, foreign direct investment flows maintained its momentum with total registered FDI worth 2.3 billion USD within the same month.

Besides, inflation continued to decrease in Vietnam, pushing real interest rates into positive territory. Higher interest rates can help ease some USD demand pressures following the shift of the VND/USD reference rate, but creating a monetary policy challenge.

Based on their market research, HSBC experts expected the VND to continue depreciating by one percent, resulting in the rate of around 21,750 VND per USD by the end of 2015.

Sharing the same opinion with HSBC, Australia and New Zealand Banking Group Limited (ANZ) noted this was the first adjustment of the VND seen in the last six months and forecast a new VND/USD daily reference rate (22,050 VND per USD) by the year’s end.

HCM City office market saturated

Though no new Grade-A office buildings are forecast to come online this year, many Grade-B buildings are expected to enter the HCM City market, according to a report released yesterday from the commercial real estate services company Cushman and Wakefield.

The office market will continue to face an oversupply over the new year due to a significant number of office projects currently in the fitting-out stage, especially in the western part of the city.

Therefore, rental declines are expected to continue and will be of considerable concern for landlords. Tenants can look forward to more flexible leasing terms in addition to falling rents.

There is expected to be around 715,000sq.m. of office space across all grades coming onto the market in the next two years, opening up more opportunities for tenants to choose better office space at reasonable rental rates.

The fourth quarter of 2014 witnessed the market entry of one Grade-B office complex project, which raised the total supply to 1,123,800sq.m, representing an increase of 0.9 per cent quarter-on-quarter.

The average asking rent for a Grade-A office building was a very slight decrease of 0.3 per cent over the quarter, reaching US$30.4 per sq.m per month, while Grade-B buildings saw a higher decrease of 1.3 per cent quarter-on-quarter from $18.6 to $18.4 per sq.m per month.

Transactions are expected to be busy in the residential market, helping to thaw out the frozen property market. For instance, Sacomreal has launched a Dau tu an toan-co hoi vang sinh loi (Safe investment-Golden opportunity to Earn Profit) programme for buyers.

Under the programme, Sacomreal commits to re-buy customers' products with an increase of at least 20 per cent value when they buy land in the Jamona City project in District 7 and land in the Arista Villa project in Thu Duc District.

More than 100 land lots in the 106,000sq.m Jamona City project and 90 land lots in the 9-ha Arista Villas project have been sold to customers. Affordable apartments sized from 40–70sq.m. in the price range of VND15–18 million ($714-857) per sq.m should continue to be the most sought-after and this market sector is expected to be the most active going forward.

Notably, there is no future supply located in the city centre due to a limited supply of development sites. Permission to build residential property is also difficult to obtain.

Therefore, future supply will be in non-CDB areas that offer easy access to the city centre, such as District 7, District 2, District 4 and Binh Thanh District.

Projects located along the first metro line will attract more buyers and investors.

Some suburban districts, such as Districts 8, 9, 12 and Binh Tan, with an abundant stock of affordable apartments, sufficient land fund for project developments and upgraded infrastructure are also attracting developers and low-income earners.

The New Housing Law that will take effect in July, which allows foreigners to own commercial property in Viet Nam, will help strengthen demand, especially for mid- to high-end projects.

By 2020, over a million square metres of new retail space will enter the market, a 200 per cent increase in retail supply compared to this year.

Demand for retail space in the CBD is expected to remain high in the short to medium term.

However, due to limited land, the majority of future stock will move towards the non-CBD area at a larger scale, mostly in the southern and eastern areas of the city where most of the city's infrastructure and residential developments have been established.

Finance Ministry instructs Tet price stabilization

Minister of Finance Dinh Tien Dung has issued a directive instructing authorized agencies to intensify management and supervision to stablize the prices of goods in the coming Tet holidays.

Finance department directors are instructed to keep a close eye on goods supply, demand and prices before, during and after the holidays, especially to essential items such as rice, meat, egg, vegetables, cakes and beverages.

They should work with relevant departments to counsel provincial people’s committees with measures to stabilize the market, and prevent goods scarcity and speculation from rigging the prices.

Inspections should be step up to ensure the serious implementation of price, tax and fee bylaws at businesses.

The minister ordered the departments to instruct transport firms to publicly announce their fare and freight rates.

Violators will be publicly named on the media. Authorized agencies should speed up actions against counterfeits and smuggling.

The Price Management Department under the ministry is instructed to send inspectorates to provinces to manage and stabilize the prices.

Sacomreal's programme helps to thaw out the frozen property market

Sai Gon Thuong Tin Real Estate JS Co. (Sacomreal) launched a Dau tu an toan-co hoi vang sinh loi (Safe investment-Golden opportunity to Earn Profit) programme for buyers as the first good sign in this year for helping to thaw out the frozen property market.

Transactions are expected to be busy in the residential market, the company said.

The programme is considered as a safe and attractive investment channel when stock market has many risks; banks have offered deposit interest rate of 5-6 per cent per year, and gold price have seen less fluctuations.

Under the programme, Sacomreal commits to re-buy customers' products with an increase of at least 20 per cent value when they buy land in the Jamona City project in District 7 and land in the Arista Villa project in Thu Duc District.

More than 100 land lots in the 106,000 sq.m Jamona City project and 90 land lots in the 9-ha Arista Villa project have been sold to customers.

A land lot of Jamona City is offered VND23.5 million per sq.m and for that of Arista Villas is VND11 million per sq.m.

Opportunities for businesses in 2015

A stable macro-economy and improved economic institutions, including the recent approval of amendments to two important laws (Investment Law and Enterprise Law), and the completion of negotiations of several free trade agreements, are opening up opportunities for businesses. It’s now up to businesses to seize the opportunity.

During the most difficult period for the global economy (2011-2014), efforts from the Government, people and businesses have helped Vietnam to escape difficulties and gradually stabilise the macroeconomy. We are restructuring the economy and the growth model to improve efficiency and competitiveness. The focus is now on the restructuring of public investment, banking and finance, and state owned enterprises. The government is taking on strategic tasks in finalising the market economic institutions, creating an equal and competitive business environment and administrative reforms; developing human resources, especially high quality human resource; and developing a harmonious and developed infrastructure system, including transport and urban infrastructure. The Government is working on administrative reforms, especially the effectiveness of the system, and reducing the time and resources for tax compliance, custom procedures, insurance, and access to electricity, starting a business and market entry, so that all these indicators will be equal to the average of ASEAN 6 countries.

In 2014, despite the difficulties, there were positive signs in the economy. The average economic growth rate in the 2011-2013 period was 5.6%, with exports growing 18% annually and inflation down from 18.13% in 2011 to less than 3% in 2014. A “stable macroeconomy” has been widely agreed upon by the population. There is a wider development sphere being developed with 8 signed free trade agreements. Several other free trade agreements have completed their negotiations, including a FTA between Vietnam and the EU, with the Customs Alliance of Russia, Belarus, Kazakhstan, and that with the Republic of Korea. We are also speeding up the negotiations of the TPP, and developing the ASEAN Economic Community during this year- a common market with about 600 million consumers, US$2,500 billion in GDP as well as the free flow of capital, commodities, services, investments and labor. With the prospect of having 14 FTAs in the near future, Vietnam’s business and legal environment is expected to witness major changes, and Vietnam will become a part of an economic chain that spans across 55 partner countries, including 15 members of the G20. This will open many opportunities for local businesses to export their products with lower tariffs and fewer technical barriers.

However, there seems to be less activity in the businesses community, participating in the integration process. If local businesses do not reform themselves and act more professionally, they will not only let opportunities pass, but may also face new threats from integration. Businesses need to invest in human resources, governance, science and technology, as well as ensure the quality of goods and services to stand firm in the market. The market will be greater and there will be more opportunities, but the pressure from the market will also increase.

A new phase of development is coming. Together with the support from the State and society, for businesses to thrive, with stable macro-economic conditions and a wide opening market, we should have confidence that businesses will be stronger and act as the driving force for the economy. They will have the ability to absorb new technology, and will be highly competitive to dominate the domestic market and expand overseas, so as to ensure our economic sovereignty and avoid dependence on a single market or trade partner.

At the recent Vietnam Development Partnership Forum 2014, Victoria Kwakwa, Country Director for the World Bank in Vietnam noted that Vietnam’s private sector has been struggling with various challenges recently, and many businesses have had to close down. Most of the remaining enterprises are in the informal sector, SMEs or micro enterprises. They had not been able to take advantage of the incoming foreign enterprises, and their participation in global value chain was limited. She stressed that no country can develop based solely on the foreign sector. The Government’s policy to pay more attention to the domestic private sector was correct and timely. Institutional reforms should focus on this direction, to help address challenges to the private sector. Future economic integration will be more in-depth, focusing on the ASEAN economic community, EFTA, TPP, FTA with Korea and other partners, and will bring more opportunities for the private sector. But the opportunities cannot be realised if there is no strong public sector and strong institutions to help solve issues in the private sector.

HCM City to enlarge agricultural high-tech park

The area of HCMC Agricultural High-Tech Park (AHTP) will be expanded by five times as envisioned in a development plan for the park in the 2015-2020 period.

Tu Minh Thien, deputy head of AHTP, told the Daily on the sidelines of a recent meeting in HCMC that the park will have an extra 400 hectares in the next five years to house sufficient facilities and sections for cultivation, breeding and aquaculture projects.

In addition to the 88 hectares used for cultivation in Cu Chi District, AHTP will develop a new section covering a total of 200 hectares nearby for growing plants and breeding freshwater ornamental fish from 2020 to 2025.

A 90-hectare section will go up in Long Hoa Commune in Can Gio District for the aquaculture sector, including producing breeders and bio-products. AHTP plans to open this section in 2017.

The third section will cover 100 hectares in Binh Chanh District and focus on crossbreeding cows, chicken and pigs.

Thien said AHTP is calling for local and foreign investments in the new sections.

Dinh Minh Hiep, head of AHTP, said the park has helped apply high technology to agriculture in the city, including orchid production in Cu Chi District, vegetable growing in line with VietGap standards on 145 hectares in Cu Chi, Binh Chanh and Hoc Mon districts.

AHTP has also developed new models of planting organic vegetables with yields 15-30% higher than normal vegetables.

AHTP was established in 2004 and officially came into operation in 2010. This is the first agricultural high-tech park in Vietnam mainly providing high quality seeds and technology for farmers, co-operatives and agricultural companies to produce organic vegetables. So far, the park has carried out 14 projects with total investment of VND190 billion.

All SOEs under construction ministry to go public this year

The Ministry of Construction has set a target of having all State-owned enterprises (SOE) under its umbrella equitized within this year.

Dang Van Long, head of the Corporate Management Department at the ministry, said the ministry currently manages nine corporations and ten enterprises with 100% State ownership.

The corporations are Building Materials Corporation No. 1 (FiCO), Construction Corporation No. 1 (CC1), LILAMA Corporation (Lilama), Construction Machinery Corporation (COMA), Song Da Corporation, Vietnam Cement Industry Corporation (VICEM), Housing and Urban Development (HUD), Vietnam Urban and Industrial Zone Development Investment Corporation (IDICO) and Vietnam National Construction Consultant Corporation (VNCC).

The ministry has completed necessary legal procedures for equitizing all these SOEs. The ministry has established committees responsible for equitization, and selection of consultants for assessing corporate assets and equitization plans.

Late last year, the ministry submitted to the Prime Minister the equitization plans for FiCO, CC1, COMA and Lilama. These corporations would launch their initial public offerings (IPOs) in the first quarter this year if the plans are approved.

The ministry is now conducting corporate value assessments of Song Da, VICEM, HUD and VNCC, and plans to submit the equitization schemes for Song Da and VICEM to the Prime Minister in the second quarter.

Long said the ministry wanted all SOEs under it to go public this year. “This year is the last year for implementation of the 2011-2015 socio-economic development plan and the restructuring of SOEs as approved by the Government.”

Vinalines pulls State capital out of seaports

Vietnam National Shipping Lines (Vinalines) will continue plans to offload shares at Nam Can Port in Ca Mau Province, Danang Port and other seaports nationwide to speed up divestments of State capital in the port sector this year.

Vinalines will sell 13.2 million shares at Danang Port at the reserve price of VND12,000 each on the Hanoi Stock Exchange on January 19. It expects to raise nearly VND160 billion if all the shares change hands.

Previously, investors bought only over 1.6 million shares at Danang Port’s initial public offering (IPO).

Vinalines will offer 395,200 shares at VND10,000 each at Nam Can Port’s IPO at Maritime Bank Securities in HCMC on January 28. The shares are equivalent to 49.4% of chartered capital of the port located in the southernmost province of Ca Mau.

The corporation earlier launched the IPOs of Haiphong, Quang Ninh, Nha Trang, Can Tho and Nghe Tinh ports. Nghe Tinh Port’s IPO was the most successful as all 3.89 million shares put up for sale found buyers.

Le Anh Son, general director of Vinalines, said revenues from the IPOs of its member ports last year were lower than expected as the sold shares of four major ports, namely Haiphong, Quang Ninh, Nha Trang and Danang, were less than 5% of the total shares on offer. The problem is that the State still holds a majority stake of 75% at these ports, thus discouraging investors from buying into these ports.

Northern electronics retailers in expansion race

Multiple electronics supermarket chains in northern Vietnam are in a race to expand operations beyond Hanoi in order to increase revenues and cash in on rising shopping demand in neighboring provinces, especially before the Lunar New Year holiday (Tet)

Electronics retailer Tran Anh has just opened three stores in Nghe An, Hai Duong and Haiphong after investing in new facilities in Ninh Binh, Nam Dinh, Bac Ninh and Phu Tho provinces. Tran Anh now has 16 electronics stores in the northern region, including nine in the capital city.

Other big names like HC, Media Mart and Pico have also reached out to more northern provinces to capitalize on surging shopping demand before Tet, which falls on February 19. HC inaugurated a new store in Nghe An Province last month while Pico is present in Phu Tho and Vinh Phuc provinces.

At present, Media Mart is leading the electronics market in the north with 18 stores, followed by Tran Anh with 16 stores, HC with 14 and Pico with seven.

Experts said northern electronics retailers are now focusing on operation expansion outside Hanoi as they are sure about chance of success in this region. Pico has had to close its store in HCMC in southern Vietnam to concentrate resources on the northern market.

Electronics retailers expected new outlets in Hanoi’s neighboring provinces will help them boost sales as competition in the capital city has turned intense.

Nghiem Xuan Thang, deputy general director of Tran Anh Digital World Co., said the company plans to open four supermarkets in northern cities and provinces this year before expanding to HCMC and other southern provinces in the coming years.

Statistics from market research firm GfK showed Vietnamese consumers spent about VND28 trillion on electronics and technology products in the third quarter of last year, up nearly 21% year-on-year.

Vietnam coffee export seen down 11%

In contrast to growth of more than 30% last year, the country’s coffee export this year is predicted to decline 11% due to weather anomaly and slow farming, according to the Vietnam Coffee and Cocoa Association (Vicofa).

Vicofa forecast coffee output this year might tumble 20-25%, leading export sales to edge down to 1.4 million tons worth US$3.2 billion. The total export last year reached 1.6 million tons worth US$3.6 billion, up 33.4 % in volume and 32% in value against the previous year.

Vietnam is suffering severe impact of climate change. El Nino has caused drought in the country, causing coffee farms to lack water.

The International Coffee Organization predicted that the supply of coffee beans this year could be 11 million 60-kilogram bags lower than global demand.

Meanwhile, most of the area of old coffee plants has not been replanted, which will certainly affect output this year, said Nguyen Viet Vinh, general secretary of Vicofa.

Although a coffee replanting plan in the Central Highlands in 2014-2020 has been approved, work on it has been slow given financial distress. One of the reasons is high interest rates for bank loans discourage farmers from borrowing.

The average export price of coffee beans last year was US$2,090 per ton, down 2.6% over the previous year, while the local price remained unchanged at VND40 million (some US$1,869) per ton, which brought profit for farmers and traders.

Another tough year forecast for rubber growers

The Vietnam Rubber Group (VRG) forecast this year could be another hard year for local rubber growers as natural latex prices are projected to stay low like the period at the end of last year.

VRG put the price of natural latex products at VND31,000 per kilo (some US$1.45) this year, or only VND1,000 per kilo higher than production cost. This is a meager profit for rubber growers.  

The VRG said that 2014 was one of the most difficult years for the rubber industry when latex prices tumbled to US$1,500 per ton, the lowest level in five years. The reason was that China, Vietnam’s largest latex importer, reduced or suspended imports.

Oversupply worsened the situation last year, according to VRA. The movements of latex prices this year will depend much on the supply of major rubber producing countries, including Thailand, Malaysia, Indonesia, India and Vietnam.

Domestic rubber enterprises have not shown signs of cutting their output as they are following developments of the rubber industry in regional countries.

VRA said if latex prices still stay low, rubber growers would suspend their latex production or even chop down rubber trees to plant high-profit crops.

According to the Ministry of Agriculture and Rural Development, Vietnam shipped 1.07 million tons of latex worth US$1.8 billion last year, which was the same volume to the previous year but down nearly 28% in value year-on-year. The fall was attributable to dropping prices last year as the export price of latex products neared US$1,700 per ton in January-November, down 27% against the same period of the previous year.

Becamex Tokyu opens new food, shopping facilities

Becamex Tokyu, a joint venture between Vietnam-based Becamex IDC and Japan’s Tokyu Corporation, on January 6 inaugurated food and shopping facilities belonging to the first phase of a new commercial center in Binh Duong New City.

The first phase comprises of a shopping area as well as Long Monaco Restaurant owned by Phi Khoa Co. Ltd. and The Sushi Bar Restaurant, among others.

Hikari is the first food and shopping center with large investments in Binh Duong New City. Located in the center of the new city and close to the Integrated Administrative Center of Binh Duong Province, Hikari was opened to meet demand of officials and citizens.

A representative of Becamex Tokyu said the company will continue investments in the next phases of the project to better serve customers.

The company now is developing a major project called the Tokyu Binh Duong Garden City worth a total of over US$1.2 billion and consisting of apartments, houses, trade centers, office buildings and entertainment facilities in Binh Duong New City.

The joint venture recently launched a Japan-style bus service linking Thu Dau Mot City and Binh Duong New City.

FDI expected to surge in 2015

Foreign direct investment (FDI) in Vietnam is forecast to increase significantly this year, as many large FDI projects are expected to be issued licences in the next few months.

The Thoi bao Kinh te Viet Nam (Vietnam Economic Times) newspaper quoted a source from the Economic Zone Management Authority (EZMA) of Binh Dinh as saying that the central province is scrutinising the Nhon Hoi oil refinery complex (also known as Victory Project). The project is expected to be issued an investment licence before the Lunar New Year (falling on February 19).

If the licence is issued as per EZMA's plan, the FDI capital in Binh Dinh this year will far exceed the capital that the province attracted last year, as the investment capital of the Nhon Hoi project alone is estimated at US$22 billion.

Also, Nhon Hoi is not the unique large FDI project that Binh Dinh can attract this year.

Head of Binh Dinh's EZMA Man Ngoc Ly said that the province is also working with two other large investors, Singapore's VSIP and Thailand's Amata, to select sites for the projects' infrastructure construction.

If their progress is advantageous, the two projects are likely to help Binh Dinh figure among the country's most attractive FDI destinations in 2015.

Besides Binh Dinh, the northern province of Bac Ninh is also expected to issue licences to large FDI projects this month.

Ngo Sy Bich, head of Bac Ninh's EZMA, said that the projects that can be issued licences early this year in the province are also large, with each having hundreds of millions of dollars of investment capital.

He revealed that Bac Ninh is working with a Singapore-based software investor and, if it works out, a project worth more than $100 million will be issued a licence this month.

Bac Ninh is also negotiating with a German investor. If the deal is signed, hundreds of millions of dollars will be poured into the province. It is expected that the project will also help the northern province to attract other FDI supporting projects.

Experts said that licensed projects worth billions of dollars have so far helped Viet Nam to attract many other supporting projects. This is in accordance with the Government's sustainable growth strategy involving investment boost to high-tech industries and creation of value-added exports and supporting industries.

Bac Ninh, for example, has so far successfully attracted several large high-tech companies such as Canon and Sumitomo of Japan, Samsung of South Korea, Foxconn and Mictac of Taiwan, and Tyco Electronics and Nokia of the United States, besides ABB of Switzerland.

The northern port city of Hai Phong has also created a hub to attract heavy industry projects worth hundreds millions of dollars of GE, Kyocera, Bridgestone and Fuji, as well as Xerox and Toyota.

Experts have also forecast that Vietnam will possibly attract increased FDI capital in 2015 as a result of the advantages offered by the free-trade agreements (FTAs) that were concluded in 2014.

Vo Tri Thanh, deputy director of the Central Institute for Economic Management, said that the signing of three FTAs with the European Union, the Republic of Korea and the Customs Union of Russia, Belarus and Kazakhstan will offer great advantages to Vietnam in attracting foreign investment in the short run.

After Vietnam concluded the three above-mentioned FTAs, and as a result of the Chinese Investment Strategy +1, businesses in the European Union and the Republic of Korea may shift their production facilities from China, and Vietnam will certainly be an attractive destination, Thanh said. He added that following their example, a number of supply businesses will invest in Vietnam.

After the ASEAN Economic Community (AEC) is established in 2015, investors from countries which have concluded FTAs with Vietnam will see ASEAN as a common market and a united production facility in the near future. As an ASEAN member with accelerated trade liberalisation, Vietnam will become an important gateway for foreign investors, including European Union companies, to enter the ASEAN market.

Statistics from the Ministry of Planning and Investment's Foreign Investment Agency showed that Vietnam attracted 20.23 billion USD in FDI capital last year, an increase of 19 percent against the target. The Republic of Korea led the 60 countries and territories investing in Vietnam in 2014, with 7.32 billion USD in investment capital, accounting for 36.2 percent of the country's total FDI capital.

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