Ha Nam licensed five electronics and high-tech projects

On August 6, the People’s Committee of the northern province of Ha Nam granted the investment certificates to five projects to be conducted by South Korean and Israeli investors.

According to the province’s portal hanam.gov.vn, the projects would focus on the production of electronics and high-tech agriculture with the total capital of more than VND5 trillion ($228.6 million).

The first is the $100 million project of KMW Vietnam Co., Ltd, a subsidiary of South Korea-based KMW Inc., to construct a factory manufacturing telecommunications equipment and LED lights. Covering an area of 30 hectares, the factory will have a capacity of 220,000 telecommunication units and 380,000 LED light produced annually by 3,000 workers.

The second project is Jinyoung G&T Co., Ltd’s factory which will manufacture speakers with the capacity of 4.08 million products per year. Once completed, the $11 million factory is expected to make $26.35 million in revenue per year and employ 540 workers.

The third will be the centre for research and technology transfer of 3A Education Technology Joint Stock Company. The VND420 billion ($19.2 million) project aims to research and transfer technologies in education, agriculture and general high-tech solutions from the world in general and Israel in particular to the province.

The fourth is a high-tech application agricultural zone project with the total capital of VND662 billion ($30.2 million) of VinEco, a subsidiary of Vingroup focusing on agriculture. The 300 ha facility will be fitted with cutting-edge equipment.

The last project is a VND1.6 trillion ($75.1 million) milk plant of Nutifood Vietnam. The plant is expected to become operational in 2016, and produce 200 million litres of milk and 31,000 tonnes of powdered milk every year and will be fully operational by the third quarter of 2018.

Apart from licensing the projects, the Ha Nam People’s Committee has signed a raft of memoranda of understanding with some Japanese enterprises, namely Japan Flower Corporation, Tokushima Kohwan Niyaky Co., Ltd, Tokushima Farmar Sommeliers and South Korea’s RX0 Group.

Quang Ngai opens IP service centre

Quang Ngai Province yesterday set up a so-called one-stop service centre at its Viet Nam-Singapore Industrial Park to attract investment.

VSIP Quang Ngai in Son Tinh District 8km north of Quang Ngai town has so far attracted 10 projects with total investment of US$132.5 million, three of which are operational, since it came into existence in 2013.

"The centre will help improve the investment environment and [the ranking in the] Provincial Competitiveness Index as well as attract more investors to the province," Le Viet Chu, chairman of the province People's Committee, said.

"VSIP is the first environment-friendly industrial park in the province and has good infrastructure and perfect conditions for investors," he said, adding the park has created 13,500 jobs.

The province would do everything to simplify procedures for existing and potential investors, he promised.

The VSIP Quang Ngai covers 600ha of Dung Quat Economic Zone and 520ha of urban area. It registered an investment capital of $337.8 million.

Le Van Dung, deputy head of the Dung Quat Economic Zone Authority and head of the one-stop service centre, said the centre would help investors get investment certificates in three to 10 days.

Also yesterday the Viet Nam Singapore Industrial Park Joint Venture Company, Ltd (VSIP JV) began the second phase of development of an urban area and housing at the park.

An overview of the Viet Nam-Singapore Industrial Park in Quang Ngai Province. The province set up a one-stop service centre in the IP to attract investment. VNS Photo

It will develop a 99ha commercial and residential zone, with a two-hectare nature park, housing 15,000 workers.

At the ceremony yesterday, two companies – Hong Kong shoe maker Properwell, and Singapore's UMW Equipment Systems (Viet Nam) – also received investment licences to set up shop at VSIP Quang Ngai.

Hebei Xindadong Textiles Company of China, the biggest investor in the park with $38 million, received a licence to expand its plant.

The Quang Ngai park is also UMW's second location in Viet Nam for putting up an industrial and heavy machinery plant after the VSIP in Binh Duong.

VSIP Quang Ngai also inked yesterday a memorandum of understanding with VNTT for providing telecom services for the industrial park as well as its tenants.

VSIP has seven parks in Binh Duong, Bac Ninh, Hai Phong, Hai Phong, and Nghe An spread over a total of 6,000ha. These parks have attracted investments of $7.8 billion.

Investors reaching out overseas

In the first six months of this year the Ministry of Planning and Investment granted investment licenses to 47 projects investing in 22 foreign countries with total registered capital of $155.4 million, according to the Foreign Investment Agency.

Laos received the highest amount of investment capital, at $53.9 million, followed by the US with $50.8 million and Germany with $26.5 million.

Myanmar saw the highest number of new projects, with eight, followed by the US with seven new and adjusted projects.

Vietnamese investment overseas focused primarily on the mining sector, with total capital of $42.5 million, representing 27.4 per cent of the total. Wholesale, retail, and the repair of automobiles, motorbikes and other vehicles followed, with 18 new and adjusted projects worth $39.3 million, representing 25.3 per cent of the total, then banking, finance and insurance, with three adjusted projects and capital of $29.5 million, accounting for 19 per cent.

Phu Quoc the center of attraction

As at July, Phu Quoc Island, off the coast of the Mekong Delta’s Kien Giang province, had attracted 196 projects on 5,110 ha, of which 136 projects are now in operation, with capital totaling more than VND144 trillion ($6.76 billion). Projects are primarily in the tourism sector, according to Deputy Chairman of the Phu Quoc People’s Committee, Mr. Huynh Quang Hung.

Many investors, such as Vingroup and Sun Group, have built resorts, restaurants, hotels and entertainment parks of five or even six-star standard.

Phu Quoc Vinpearl, invested by Vingroup in Bai Dai, Ganh Dau commune on an area of 300 ha and with total investment of over $1 billion, has completed its fist phase and the second phase is now underway. It is the largest tourism project on the island.

Vingroup has also started construction of a zoo on an area of 500 ha in Ganh Dau and Cua Can communes. Once completed it will be the second largest zoo in the world, with animals and plants from all continents around the world. The zoo will be a special attraction and create a competitive advantage for Phu Quoc Island over other regional tourist destinations such as Phuket in Thailand and Bali in Indonesia.

Sun Group, meanwhile, is building a resort in the southern area of the island that is expected to open on April 30, 2016, with 1,000 luxury guest rooms of five or six-star standard.

The Kien Giang Provincial People’s Committee has recently approved Sun Group’s plans to develop a resort and amusement complex on nearby Hon Thom Island and a cable car line connecting it with Phu Quoc Island, with total investment of VND10 trillion ($458.4 million).

Construction of the Phu Quoc International Passenger Port, with total investment of over VND1.6 trillion ($75.1 million), is expected to be completed in 2017 and will boost international tourist numbers to the island.

Phu Quoc is continuing to attract a large number of investors. Mr. Hung confirmed that investors will receive a range of incentives, in corporate income tax, personal income tax, land rentals, and other matters.

BIDV takes out loan from international banks

As it celebrates its 20th anniversary, the Bank for Investment and Development of Vietnam (BIDV) signed a agreement on August 7 for $105 million loan over five years, with Cathay United Bank from Taiwan being the main arranger.

The loan comes from eleven foreign banks and is among the largest and longest taken out by a Vietnamese commercial bank.

General Director of Cathay United Bank and Director of Cathay Financial Group, Mr. Chang-Ken Lee, spoke highly of its cooperation with BIDV.

The eleven banks are Cathay United Bank, Grand Capital International Limited, Mega International Commercial Bank, Chang Hwa Commercial Bank, E.Sun Commercial Bank, Hua Nan Commercial Bank, Taishin International Bank, Sunny Bank, Shanghai Commercial & Savings Bank, Land Bank of Taiwan, and Far Eastern International Bank.

Cathay United Bank is one of the largest private banks in Taiwan, with a network of 165 branches in the country and 15 subsidiaries and representative offices abroad. Total assets and equity in 2014 were $70.7 billion and $4.62 billion, respectively.

BIDV previously signed a Memorandum of Understanding (MOU) with ANZ Bank Vietnam, on lending activities, trading on the interbank market, foreign exchange, international payments, and consulting services for issuing bonds and raising capital.

M&As to boom into future

Merger and acquisition (M&A) activities have been robust this year and are expected to continue to be so next year according to many experts at the Vietnam M&A Forum 2015. Mr. Bui Ngoc Hong from law firm LNT & Partners said that M&A activities are dynamic at this point in time, with many high-value deals being struck. He also predicted that M&A would boom in the future.

Of a similar mind, Deputy General Director of KPMG Vietnam, Mr. John Ditty, said that the number of M&A deals in Vietnam in the first half of year was equal to 75 per cent of the number for last year as a whole. He predicted the number of M&A deals would increase throughout the remainder of the year, saying this is not the start of a boom in M&A but a peak period.

He added that M&A activities would be seen in more fields, with emerging deals being in shopping malls, retail, manufacturing, and real estate. The restructure and reform in opening up Vietnam’s market to foreign investors would accelerate M&A deals. When investors note the improved investment environment they will have the belief to invest, he said.

Investment regulations are acknowledged as being more open. Mr. Hong used the example of foreign investors previously having to seek permission even when they wished to purchase only 1 per cent of a stake in a Vietnamese enterprise. They now need not seek permission when they purchase less than 49 per cent of a domestic enterprise.

There are more fields where Japanese investors can join in M&A deals, Senior Managing Director of Recof Corporation, Mr. Masataka Sam Yoshida, said. He also stressed that Vietnam has a young population and a nascent market, so is a target of Japanese investors looking at areas such as food and beverages, finance, fast-moving consumer goods (FCMG), and logistics.

The Chairman of the State Securities Commission of Vietnam, Mr. Vu Bang, said that factors accelerating the M&A process are the restructuring of the economy and the banking sector as well as Decree No. 60, which lifts limits on foreign investors purchasing shares in listed companies. These factors present more opportunities to foreign investors in sectors such as steel and retail.

Besides improvements in the legal framework, such as the amended Law on Public Investment and Law on Enterprises, private domestic enterprises choosing M&As as a strategic plan to restructure and achieve stable growth was also said to be a key factor.

Sun Group to invest in Phu Quoc

The Kien Giang Provincial People’s Committee has approved the Sun Group’s plans to develop a resort and amusement complex on Hon Thom Island and a cable car line connecting it with Phu Quoc Island.

The project will be divided into two phases with total investment of VND10 trillion ($458.4 million). The first phase will have initial investment of VND4.9 trillion ($224.6 million) and is expected to come into being in 2017.

Hon Thom Island lies approximately 10 km south of Phu Quoc Island’s Khem Beach. The 138 ha beach is also being developed by the Sun Group, with ambitious plans to create a complex of world-class resorts in cooperation with Marriot, Intercontinental, Pullman and Sofitel.

The Marriott resort project, invested by the Sun Group, will open in the near future, according to a representative from the Group.

Sun Group is one of the largest real estate groups in Vietnam and the biggest investor in central Da Nang city, with dozens of projects in hotels, resorts, amusement parks, and urban areas, including the InterContinental Da Nang Sun Peninsula Resort, the Novotel Da Nang Premier Han River, the Premier Village Da Nang resort, and Ba Na Hills Da Nang.

The Group will soon launch several new projects of large-scale, such as Ha Long Ocean Park, with investment capital of VND6 trillion ($276 million), and a cable car to the top of Mt. Fansipan, at a height of 3,143 meters above sea level, near Sapa in northern Lao Cai province.

HCMC to monitor stalled CBD projects

The Ho Chi Minh City People’s Committee has recently established a special team to handle delayed construction projects in the central business district (CBD).

Led by Mr. Quach Hong Tuyen, Deputy Director of the Ho Chi Minh City Department of Construction, the team will conduct investigations of projects in Districts 1 and 3 that have been granted investment and construction licenses but have stalled.

Project developers will be asked to ensure their commitment to proceeding and periodically report to city authorities on construction progress.

The team is also assigned to evaluate the developers’ financial capacity to perform procedures relating to land allocation, land leasing, and licensing, and propose specific sanctions for delayed projects.

Interest builds in real estate stocks

Real estate stocks may become an investment channel of interest over the remainder of the year as property continues to emerge as a market of potential, as proven by recent merger and acquisition (M&A) deals, high foreign direct investment (FDI) attraction, and the positive effect of recently-introduced regulations.

The wave of M&A, new legal regulations, and other factors will help Vietnam’s real estate market become more transparent and develop in a sustainable manner while improving the efficiency of real estate developers, according to the Rong Viet Securities JSC. All of these factors will drive interest in real estate stocks over the rest of the year, the company believes.

A Japanese real estate investor has recently announced its acquisition of a 20 per cent stake in An Gia Investment and that it will provide An Gia’s projects with finance and assistance in a deal worth $200 million.

Real estate developer the Nam Long Group (Code: NLG) also announced recently the transfer of 7 million shares to Singapore’s Keppel Land’s subsidiary, Ibeworth Pte. Ltd, who became a major shareholder.

Vingroup JSC (Code: VIC), meanwhile, announced the transfer of its entire stake in the Anh Sao Real Estate Corporation at the end of July. It previously owned 94 per cent of its charter capital, which it purchased from shareholders on April 14.

In the first seven months of the year FDI into real estate stood at $1.69 billion, or 19.3 per cent of all FDI, according to the Foreign Investment Agency (FIA). Real estate ranked second in terms of sectors attracting FDI, behind industry and manufacturing.

In Ho Chi Minh City most FDI went to the real estate sector in the first seven months, with four projects and $1.31 billion, according to a recent report from the Ho Chi Minh City General Statistics Office.

Two long-awaited pieces of legislation came into effect on July 1: the Law on Housing and the Law on Real Estate Business. “Their impact is expected to be significant and will mark an important step towards opening up Vietnam’s real estate market to overseas investment,” said Mr. Richard Leech, Executive Director of CBRE Vietnam.

This will be important not only for the real estate business but also for other sectors, as the government has also agreed to ease restrictions on foreign stakeholders. “There will no longer be foreign ownership limits (FOL), except for the banking sector, which currently has an FOL of 30 per cent,” he said.

Construction underway at FLC Twin Towers

The FLC Group kicked off construction of FLC Twin Towers, previously known as Cemaco Tower, last week in Hanoi’s Cau Giay district.

The project comprises twin towers, including a 50-storey residential tower and a 38-storey office tower, with apartments for sale on a total area of 66,484 sq m, office space for lease with a total floor space of 35,960 sq m, and a shopping mall on 25,000 sq m.

With total investment from FLC of VND5.2 trillion ($238.3 million), the project includes other facilities to meet the needs of residents, including an international hospital, schools, indoor and outdoor swimming pools, and a green space, among others.

“The number of people obtaining information and expressing a desire to purchase an apartment has reached 1,000, double than the number of apartments on sale,” a representative from FLC said.

The project is expected to be completed and apartments handed over to customers in 2017.

Officially established in 2008, the FLC Group has attracted much attention in recent times after acquiring three real estate projects in Hanoi in 2014 and the early months of 2015, including two in Nam Tu Liem district and one in Ha Dong district.

VietinBank upgrades its branch in Laos to limited liability bank

The Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) on August 8 held a launch ceremony for Vietnam Bank for Industry and Trade Limited in Vientiane, Laos.

The bank limited was established based on the upgrade of VietinBank's branch in Laos with total chartered capital of US$50 million.

According to VietinBank General Director Le Duc Tho, the branch began operations in Laos in February 2012 and has posted positive business results since its first year of operations. By the second quarter of 2015, the branch recorded total assets of US$160 million and a credit balance of US$95 million. It posted a profit of US$2.4 million in 2014.

Tho said the upgrade of the branch to a limited bank will help the bank be more active in its business activities and in expanding its branches and transaction offices in Laos in order to provide more diverse products and services to customers. He affirmed that the upgrade of the branch is within VietinBank's strategy to promote international economic integration.

Governor of the Central Bank of Laos, Somphao Phaysith congratulated VietinBank for the upgrade of its branch, saying that this will help enhance the capacity to provide banking services, contributing to the socio-economic development of Laos and boosting Vietnam-Laos trade and investment.

SCIC reports strong rise in divestments

State Capital Investment Corporation (SCIC) said its divestments from enterprises where no State ownership is needed jumped in the first six months of this year compared to the same period of the previous year.

SCIC met 79% of the whole year’s target for capital withdrawals in January-June, 2.7 folds higher than the same period of the previous year. Notably, it successfully pulled capital out of businesses where it had had difficulty selling shares.

SCIC did not reveal the total amount of capital it withdrew from enterprises in the period, but said the proceeds and profit from these divestments were used to invest in those businesses and sectors crucial to the economy.

“SCIC continues to focus on projects in important industries and holding high potential,” SCIC said in a statement.

But SCIC and its subsidiaries did not unveil their investment projects that are said to include a planned television tower project in Hanoi City.

Speaking to the Daily, a representative of SCIC said the television tower project is under discussion, so it was too soon to talk about it.

Hoang Nguyen Hoc, deputy general director of SCIC, said as of the end of June, the company had met over 60% of the year’s revenue and profit targets.

SCIC obtained profit of over VND4.9 trillion (US$226.6 million) in January-June, up 62% against the same period last year and equivalent to 63% of the target. Its after-tax profit reached VND3.58 trillion, rising by 54% year-on-year and equal to 63% of the target.

Grant Thornton: Private investment forecast to surge

Many more private equity investors have expressed optimism about Vietnam’s economy and expected investment activity of the private sector will grow strongly in the next 12 months as shown in a recent survey of Grant Thornton.

The survey, which was conducted by the firm in the second quarter of this year, revealed 86% of respondents forecast investments would increase in the next 12 months, rising by 14% compared to the previous survey.

More respondents are upbeat about investment opportunities in Vietnam as the steady recovery of the local economy is boosting consumer confidence and potential for growth across industries.

Vietnam is offering many investment opportunities for both local and foreign investors as the country is expected to sign more bilateral and multilateral trade agreements, including the Trans-Pacific Partnership (TPP).

Improved legislation and further reforms show the Government’s strong commitment to backing businesses and investors. This supports firms to invest in strong local enterprises with good performance, market share and skilled manpower.

The survey found many investment opportunities at State-owned enterprises (SOEs) and financial institutions. Total value of mergers and acquisition (M&A) deals is projected to beat the 2012 record figure of US$5.2 billion in 2015, and reach US$20 billion between 2015 and 2018.

Respondents of the survey chose oil, gas and natural resources as the most attractive sector in the next 12 months, followed by food and beverage and clean technology.

More supply coupled with lower-than-projected rise in demand resulted in the world’s crude oil price plunge last year, which hit investors in the sector and thus received a poor rating by only 17% of respondents in a survey conducted in the fourth quarter of 2014. In the latest survey, however, oil, gas and natural resources sector was ticked as the most attractive by 37% of respondents.

The respondent upsurge in the oil sector is probably due to the opportunity to acquire assets in the sector at lower costs. For private equity in Vietnam, these opportunities can be realized as four refinery projects Nghi Son, Nhon Hoi, Nam Van Phong and Vung Ro are in the pipeline providing investment chances when project owners have limited capital.

Regarding downstream sub-sector, investors could have further opportunities in oil and gas trading since a draft decree by the Ministry of Industry and Trade reclassifies oil and gas trading as a conditional sub-sector and it is no longer considered as the State monopoly.

Food and beverage maintain its attractiveness with a rating slightly increased to 34% from 33% in the previous survey. Vietnam’s large population of 90 million with expanding income per capita provides solid support for potential growth in this sector.

Clean tech is regarded as very attractive and ranked third with 29% of respondents in the survey. Agriculture and healthcare/pharmaceuticals share the fourth position with 24% selected for each.

As for challenges, 20% of respondents rated corporate governance as their most concerning issue when investing in Vietnam. Transparency issues closely follow with 19%.

These two issues have been continuously on the top concerns of investors in previous surveys and are flagging an urgent need for improvements by companies in Vietnam, should they wish to make themselves more attractive to investors.

In the next 12 months, 14% of respondents hope to get an easier access to loans. On the other hand, it is predicted that borrowing costs will be slightly increased to reflect higher demand for financing new investments during the recovery period.

VCCI defends proposed wage hike of 10%

The Vietnam Chamber of Commerce and Industry (VCCI), the agency representing employers, has reiterated its view that next year’s regional minimum wage hike should be not higher than 10%.

In a statement released on August 6, VCCI said the wage rise of 10% is the highest level that enterprises could endure to ensure their survival and sustainable development.

The statement was released the day after members of the National Council met on raising minimum wages but did not reach any agreement.

Representing employees, the Vietnam General Confederation of Labor earlier proposed increasing the monthly minimum wage next year by VND350,000-550,000 depending on regions, up around 17% against the current levels.

However, VCCI on August 6 said the wage hike should stay at only 10%.

According to VCCI, enterprises are still in difficulty. Large-scale enterprises accounted for less than 2% and among the remainder nearly 70% are not making profits.

There were nearly 38,000 enterprises suspending operations and dissolving in the January-July period, with small and medium enterprises making up 97%, and the unemployment rate rose.

In addition, two important factors allowing for the pay rise mentioned in Article 90 of the labor code are labor productivity and working performance

Current labor productivity in Vietnam is lower than regional countries. Therefore, while the number of enterprises not generating profits is high, investments to upgrade equipment and technologies and thus raising productivity will be limited, according to VCCI.

Besides, it takes time for enterprises to make use of opportunities ushered in by the country’s international integration.

With a wage rise of 10%, in addition to having the wage fund picking up 10%, laborers will enjoy better benefits regarding annual leave, maternity leave, sick leave and overtime.

Meanwhile, costs employers have to pay for their employees will be 35-40% higher from next year. They will also pay more for female employees and labor safety policies.

As a result, if the regional minimum wage picks up 10% next year, enterprises will have to bear payments higher by 17-18% due to increased wages, insurance premiums and labor union fees for employees.

VCCI president Vu Tien Loc told the Daily that if a suitable wage hike was not introduced, the number of enterprises going bust would keep rising.

At the Wednesday meeting of the National Wage Council comprising the labor confederation, VCCI and the Ministry of Labor, Invalids and Social Affairs, VCCI proposed a wage increase of 6-7%, which was turned down.

HCM City targets US$3.5 billion FDI this year

The city is pinning high hopes that foreign direct investment (FDI) approvals for new and operational projects could total US$3.5 billion this year and US$3 billion in 2016.

The expected FDI approvals this year represent a 7% year-on-year increase, according to an updated report of the city government sent to the Ministry of Planning and Investment last week.

The report said FDI for fresh and operational projects in the city amounted to US$1.2 billion in the first six months of this year, up nearly 34% over the same period last year.

FDI firms had pledged more capital for projects in processing and manufacturing than real estate and other sectors in HCMC in the year to June. Of the total figure, capital for processing and manufacturing projects ranked first with 62%, followed by real estate with 15% and wholesale and retail with 10%.

The major projects approved in the period include a project worth US$300 million of Worldon Vietnam Co. Ltd. in the processing and manufacturing sector and Daeyoung Electronics Vina’s household electronic appliances and LED screens project worth US$63 million.

Technology boosts coffee sector growth

Applying advanced technology has helped Vietnam’s coffee sector develop sustainably, making the country the world’s second largest coffee producer, following Russia, and the top Robusta coffee exporter.

The total coffee crop area is estimated at 641,700 hectares, 90 percent of which are in the Central Highlands region.

Last year, the country shipped more than 1.6 million tonnes of coffee beans abroad for 3.4 billion USD. It is also among the countries with the highest coffee productivity of 2.3-2.5 tonnes of beans every hectare, currently three times higher than the global average.

To achieve these results, the Central Highlands Agriculture and Forestry Science Institute (CASI) have guided farmers to apply technological advances in farming and production.

CASI Director Le Ngoc Bau said over the past decade, the institute has focused its resources on researching key cultivation methods for seedling production, growing techniques and low-yield tree improvement.

The institute successfully created 13 Robusta varieties and three Arabica varieties by cross-breeding.

The new Robusta varieties generate about 4.5-7 tonnes of beans per hectare every crop, 30 percent more productive than traditional varieties and with bigger beans (17-23 grams every 100 beans). Most importantly, they are capable of resisting leaf rust (Hemileia vastatrix), a disease that can cause serious damage to coffee trees.

The varieties have been provided to local farmers to replace old trees, the director added.

CASI has also developed and instructed the use of effective watering and fertilising methods, farming techniques and harvesting and processing technologies to farmers.

In the years ahead, his institute will continue developing high-yield and high-quality varieties and more effective growing techniques while conducting in-depth studies on coffee diseases and pests to help Vietnam’s coffee sector develop sustainably, Bau noted.

He also stressed the importance of connecting single households, producers and businesses to increase the competitiveness of Vietnamese coffee products in international markets.

Canada hopes to expand trade in Mekong Delta

Businesses from Canada are seeking to expand trade in the Mekong Delta of Vietnam, especially in chemicals, agriculture pharmaceuticals, seafood material and education.

During a working session with Can Tho city authorities on August 10, Canadian Ambassador to Vietnam David Devine said Canadian firms want to enhance trade relations in the delta, specifically with Can Tho city, Tien Giang and Ben Tre provinces.

He said Canada welcomes and creates favourable conditions for Vietnamese rice and seafood and other agriculture businesses to expand trade in the market.

He noted that the Mekong Delta is rich in land and boasts high agro-fisheries output. The region’s export products also meet the Global Good Agricultural Practice (GlobalGAP) standards.

With the support of Canadian agriculture pharmaceuticals, the local products are expected to satisfy the strict requirements of choosy markets such as the EU and Japan, he added.

The Ambassador said economic ties between Canada and Can Tho in particular are optimistic, citing the latter raked in 4.7 million USD in export turnover with rice and seafood as staples. Meanwhile, the city imported agriculture pharmaceuticals and chemicals from Canada worth 1.2 million USD.

Chairman of the Can Tho municipal People’s Committee Le Hung Dung said he hopes the Ambassador will support the dissemination of Vietnamese farm produce in the Canadian market.

He proposed the Ambassador persuade Canadian businesses to reduce cost and ensure quality of fertilizer sold to the delta.

He assured his guest that local authorities would provide the best conditions for Canadian companies to study and expand operations in the city.

Central province to house major dairy farm network

Construction of a high-quality dairy farm network worth 1.6 trillion VND (73.3 million USD) commenced in central Thanh Hoa province on August 10, the biggest agricultural project in the locality so far.

The network of the Vietnam Dairy Products Joint Stock Company (Vinamilk) will group four farms covering a total area of 2,500 hectares in the districts of Ngoc Lac, Tho Xuan, Cam Thuy and Yen Dinh.

Up to 16,000 milk cows imported from Australia and the US will be raised at the facilities with the figure potentially increasing to 24,000 in phase II of the project.

The network is set to apply the world’s most modern dairy farming technology to ensure local environmental hygiene.

Once operational in 2017, the farms are set to produce 36 million litres of milk annually and create jobs for over 1,000 people.

Last year, Vinamilk produced and launched nearly 5 billion dairy products of all kinds into the domestic market.

According to the Nikkei Asian Review, Vinamilk is Vietnam’s biggest dairy company and makes up half the local market share. Its market capitalisation amounts to 5.5 billion USD, ranking second in the country.

It was also one of two Vietnamese firms listed among the top 100 ASEAN enterprises in 2014 by Standard & Poor’s.-

Ford Vietnam enjoys robust sales in July

Ford Vietnam saw strong sales in July with 1,405 units sold, up 7 percent against the same period last year, revealed the firm’s July report on August 10.

The situation contributed to creating the best July sales in the firm’s history.

According to Ford Vietnam’s General Director Pham Van Dung, the firm’s Jan-July sales increased 58 percent compared to the first seven months of last year, hitting 10,257 units.

Ford Vietnam’s statistics reveal that the company’s Ranger model took lead in the semi-truck segment in July with 388 units sold, bringing the total sales of this model in the first seven months of this year to 3,780 – soaring 83 percent.

The sales of Ford Transit and EcoSport in the same month reached 411 and 361 cars, respectively, representing year-on-year increases of 22 percent and 34 percent in turn.

Dung said his firm will launch a customer service centre in Hanoi in August, bringing the total number of centres to 29.

Ho Chi Minh City works to speed up ODA disbursement

The HCM City People’s Committee set out to accelerate the disbursement of projects using official development assistance (ODA) loans after a low disbursement rate in the first half this year.

The city said it would create a progress plan for each specific construction component and coordination mechanism between relevant units, especially in compensation and site clearance.

The city also instructed project owners and ODA project management units to study and issue internal regulations on measures to prevent corruption.

The city recommended the Ministry of Planning and Investment increase training classes on ODA management, especially new documents.

The municipal People’s Committee will also recommend the Government continue assisting the city in calling for ODA sponsorship of priority infrastructure projects such as urban massive transportation projects, the Ben Thanh central metro station, a wastewater treatment plant and a project on managing flood risks.

The People’s Committee said it is currently monitoring 15 projects using ODA loans with 110 trillion USD (5 billion USD) in combined capital, 93 trillion USD (4.3 billion USD) of which is sourced from ODA funds.

In the first six months, the overall disbursement of ODA capital reached 44 percent, but some individual projects had very low rates, such as phase II of the project on improving water environment at the Tau Hu – Ben Nghe – Doi – Te canal, which disbursed only 10 percent, or the Ben Thanh – Tham Luong metro project with just six percent disbursed.

Compensation, site clearance, changes in designs and bidding issues were cited as major reasons behind the slow disbursement.

Ca Mau boosts clean breeding shrimp production

The southernmost province of Ca Mau aims to develop 300 additional clean shrimp breeding facilities, bringing the total number to 800 across the province by 2020.

The expansion is part of the programme to develop clean breeding shrimp from 2015-2020 towards supplying 20 billion shrimp fry for farmers in the province, meeting 80 percent of the local demand.

The province will offer a number of incentives for firms capable to join the programme. Start-up businesses in the field will also receive financial and technical assistance.

The connection between shrimp breeding producers and shrimp growing farmers will also be strengthened under the programme to ensure effective production processes.

General Secretary of the Ca Mau Seafood Processing Association Ly Van Thuan praised the incentives, saying the programme will help ensure a supply of clean young shrimps for local farmers.

Phan Thong Minh, an experienced local farmer from Ngoc Hien district, said the high-quality young shrimp will contribute to successes in shrimp farming.

Since 2000, the province has expanded its land area for aquaculture development.

As many as 290,000 hectares are currently zoned off for shrimp growing, producing 200,000 tonnes of shrimp per year.

Ca Mau City sets out to become urban hub of southernmost region

Ca Mau City in the southernmost province of Ca Mau have embarked on making a master plan for urban development through 2025 with the goal of becoming a nuclear urban area in the southernmost region.

As part of the process, the city authorities have designed 54 blueprints for over 19,790 hectares of land, including 7 on new rural areas and 43 detailed construction plans.

An amount of 23.6 trillion VND (1.1 billion USD) has been splashed out on key projects in the locality. Numerous economic, cultural and social facilities have been put into operation, which helps raise local living standards.

The city’s economy is growing at an average speed of 12.33 percent, which is higher than the target and the provincial average growth. Income per capita in 2015 reached 76.8 million USD (3,572 USD), doubling that of 2010. Meanwhile, impoverished household rate tapered off to 1.04 percent from 2.56 percent five years ago.

Secretary of the provincial Party Committee Duong Thanh Binh reiterated the role of Ca Mau City as the province’s political, economic and socio-cultural centre at the recent congress of the city’s party organisation.

He urged the city to build a synchronous and modern infrastructure towards meeting the standards for Class-1 cities by 2020.

According to Secretary of the municipal Party Committee Ho Trung Viet, the city will continue to improve quality of urban designs and adjust the municipal planning by 2030 with visions to 2050.

He added that the province will prioritise planning in the fields of socio-economic development, transport network and public facilities adaptive to climate change and sea-level rise.

The city of Ca Mau, with a population of almost 300,000 people, is one of the largest cities in the Mekong Delta region. The city is also among the country’s most vulnerable to climate change and rises in sea level.

Since August 2010, the city has been a Class-2 city, of which the population must be at least 250,000 and non-agricultural labourers make up no less than 80 percent of the workforce.

Criteria for a Class 1 city require it to function as a socio-economic, political, cultural, technological and tourism hotspot while promoting socio-economic development throughout the region. Non-agricultural employment should incorporate 85 percent of the total provincial workforce. City infrastructure should be developed and population size should be at least 500,000. Average population density should be no more than 12,000 people per square kilometre.

Low input prices encourage local companies

The sharp decrease in prices of several kinds of raw materials has encouraged domestic companies to expand production activities, according to a source from Thoi Bao Kinh Te Sai Gon (Saigon Economics Times).

Since late last year, the price of iron, copper and plastics in the world market has declined significantly.

The price decline has helped domestic enterprises to reap high profits, particularly those involved in the plastics industry, such as Tien Phong Plastics Joint Stock Company (NTP), Tan Tien Plastic Package Company, Binh Minh Plastics Joint Stock Company (BMP), and Rang Dong Plastics Joint Stock Company.

BMP Vice Chairman and General Director Nguyen Hoang Ngan said the price of plastic raw materials had decreased since late last year, with a sharp fall in the early months of the year.

The prices of plastic raw materials were slashed by between 16 and 17 percent compared with last year's average rates.

"The sharp price decline was a good opportunity for plastics companies to increase profits since costs for raw materials account for 60-70 percent of product manufacturing costs," Ngan said.

He said last year the company's pre-tax profits had reached 481 billion VND (22.6 million USD), which was the company's target set for this year.

"However, so far this year the company has made profits that represent over 72 percent of the yearly plan," Ngan said.

The BMP General Director said that thanks to high profits the company had decided to invest more in upgrading production technology and equipment with total cost of 200 billion VND (9.17 million USD), and building new factories.

In April, the company put its fourth factory, with the value of 175 billion VND (8.27 million USD), into operation in the southern province of Long An.

In the second quarter of the year, the Tan Tien Plastic Package Company (TTP) reported that it would earn 16 billion VND, six times higher than the figure compared to the corresponding period.

The company plans to inject 2 million euros and 1.24 million USD to renew equipment and machinery to meet market demand.

As for the NTP, its after-tax profit was 170 billion VND, a year-on-year increase of 13 percent, for the six months of the year.

The Rang Dong Plastics Joint-Stock Company also said that it generated 13.5 billion VND in the first quarter of the year, up 192 percent compared with the figure recorded in the same period last year.

Company leaders attributed the high profits to a decrease in the prices of raw materials and effective control of manufacturing costs.

Plastics companies were not the only businesses benefiting from the lower prices of raw materials, as steel companies also enjoyed advantages.

According to the Vietnam Steel Association, the price of iron ore 62 percent Fe in the world market dropped from 100 USD per tonne in April and May to only 66 USD in June and July, the lowest level in the last 20 months.

Other materials such as steel ingot, hot rolled steel plates and flat steel also saw significant declines compared with the figures late last year.

Early this year, the price of imported hot-rolled steel coils was 500 USD per tonne. It is now 350 USD.

In spite of benefiting from the decline in raw material prices, steel companies involved in the plastic industry did not make as much profit as plastic manufacturers.

A representative of a steel company in Ba Ria-Vung Tau province said that steel companies' profits had been affected by other input costs, including higher electricity and transport fees.

Domestic steel companies' 10-20 percent reduction in the prices of finished steel products also limited their profits, he said.

Shrimp exports to US likely to increase in last months of 2015

Shrimp exports to the US are expected to increase in the last months of 2015 due to low tariffs and high supply, said the Vietnam Association of Seafood Exporters and Producers (VASEP).

However, the growth will be modest as the US dollar and price competitiveness in the market are relatively high.

Shrimp exports to the US are expected to yield 638 million USD in 2015, down 40 percent compared to the previous year.

As of July 15, shrimp exports to the North American country had earned 284.6 million USD, plummeting 50.8 percent from the same period last year, the strongest fall in the country’s three biggest shrimp importers.

The US is Vietnam’s biggest consumer, accounting for 20 percent of total shrimp exports.

Shrimp exports to Japan, the EU, China and the Republic of Korea likewise plunged 18.6 percent, 15.2 percent, 26.1 percent and 19.3 percent, respectively.

In the reviewed period, total shrimp export turnover hit 1.4 billion USD, down 28.1 percent annually, of which white-leg shrimp accounted for 824.2 million USD, dropping 29.2 percent, and tiger prawn reached 460.2 million USD, down 30.2 percent.

Project on import management by 2020 ratified

A transparent and stable business climate ensuring sustainable socio-economic targets will be fostered in a project on import management through 2020 which was approved by the Prime Minister in Decision No. 1233/QD-TTg.

The project aims to realise the strategy on exports and imports for 2011-2020, which targets an average annual export growth rate of 11 percent and keeping import growth below 10 percent from 2016-2020 while guaranteeing trade balances by 2020.

The project will apply tax and non-tax measures in compliance with commitments to the World Trade Organisation (WTO) and bilateral and multilateral free trade agreements (FTAs). Vietnam will intensify the application of regulations on Technical Barriers to Trade (TBT), Sanitary and Phytosanitary (SPS) measures and safeguard measures.

Foreign trade management laws will be set up to ensure policy stability and unity as well as feasible regulations that facilitate enterprise operations.

The country will also comprehensively apply import management measures, evaluate the measures’ efficiency and abrogate unnecessary administrative procedures.

The decision has been valid since its issuance on August 3.

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