Ha Nam works to remove labour difficulties for FDI businesses

The People’s Committee of the northern province of Ha Nam held a meeting with foreign direct investment (FDI) businesses in the locality to discuss labour issues on February 15. 

FDI enterprises have faced numerous difficulties such as lack of high-quality employees and limited housings and pickup buses for workers, said representatives of FDI businesses at the event.

They suggested the locality provide pickup buses while speeding up the construction of accommodations for workers. 

They also asked the province to take measures to lure workers from other localities as well as run information on employee recruitment on mass media and train more high-quality labourers.

Acquiring FDI businesses’ opinions, Vice Chairman of the provincial People’s Committee Vu Dai Thang said that the province will help bring recruitment information to colleges, universities and vocational schools as well as communes where IPs are based.

It will maintain buses to pick up workers in the locality while considering opening more bus routes linking to Hanoi and neighbouring provinces.

The province plans to build houses, kindergartens and public facilities to serve workers’ needs, he said, adding that it will continue implementing a project to train 1,000 skilled workers for FDI businesses and coordinate with educational institutes to ensure labour supply for the companies.  

Meanwhile, the businesses are asked to create a friendly and fair working environment while paying more attention to the material and spiritual lives of their workers.

According to Tran Xuan Duong, head of the Ha Nam IPs management board, 153 FDI businesses operating in local industrial parks are employing more than 37,500 labourers. The firms want to recruit over 5,700 workers this year.

Serious irregularities found at BOT projects

Competent agencies have discovered a slew of irregularities at some build-operate-transfer (BOT) road toll stations. Notably, investors always underreport their toll collection revenues, resulting in longer tolling durations.

The investor of the Hanoi-Haiphong Expressway project has reported wrong costs, leading to a cost discrepancy of around VND34 billion, according to the latest report of State Audit of Vietnam.

The project has been put into operation since December 2015. However, the investor still took into account interest in their investment costs during the next six months.

The audit report also showed the investor’s method of calculating the principal payable was incorrect. In fact, the principal sum as of end-2015 was VND27.5 trillion, but the investor registered VND32.1 trillion in their financial plan.

As State Audit of Vietnam took audited figures into account, the period for recouping the investment of the project was 28 years and eight months, reducing one year and three months compared to that of the project’s adjusted financial plan.

Dao Van Chien, general director of Vietnam Infrastructure Development and Finance Investment Co., told Lao Dong that the company agreed with audit results.

The Hanoi-Bac Giang Expressway project in the north was also discovered to falsely announce its fee collection.

In particular, the fee collection reached an average of VND1.099 billion per day during the monitoring period from December 16 to 26 last year. Meanwhile, the investor reported an average of VND1.015 billion per day.

This means a differential of 8.27% or VND84 million per day, according to supervision results of the Vietnam Road Administration released last week.

Earlier, the administration also detected a similar case at the toll station of the Phap Van-Cau Gie project. Specifically, the fee collection reached around VND1.97 billion a day, but the investor registered only VND582 million per day, equivalent to 29% of the actual figure.

The Co Chien Bridge project connecting the Mekong Delta provinces of Ben Tre and Tra Vinh was in the same boat. Audit results showed that the actual total investment was lower than the original number.

In particular, the capital recovery period of the project was 11 years and 10 months, a reduction of five years and 24 days compared to its original financing scheme.

This is one of BOT projects representing the enormous difference between the initial financial plan and the one after being audited.

Vietnam strengthens financial cooperation with Mexico

Vietnam and Mexico have agreed to speed up negotiations for the signing of an agreement on customs cooperation and another deal on double tax avoidance.

The consensus was reached at a meeting between Vietnamese Deputy Minister of Finance Do Hoang Anh Tuan and Mexican Minister of Finance and Public Credit Jose Antonio Meabe.

The officials held that the future customs deal will be signed based on negotiations on customs in a relevant chapter of the Trans-Pacific Partnership (TPP) agreement and the two ministries should enhance cooperation in the time to come.

Tuan, who paid a working visit to Mexico from February 12-14, proposed the Mexican Ministry of Finance and Public Credit send a delegation to Vietnam in April 2017 to finalise the double tax avoidance agreement.

Meabe noted Mexico and Vietnam are open economies with similarities, affirming that Mexico is willing to share experience with Vietnam in finance.

Earlier, Tuan met with Director of the Tax Management Agency Osvaldo Santin. The two sides discussed a wide range of issues related to online receipts, as well as measures to prevent risks, tax fraud and protect the rights of tax payers.

At a meeting with Deputy Minister for Revenue Miguel Messmacher of the Ministry of Finance and Public Credit, the two sides discussed ways to manage budget revenues, while sharing experience in managing private and corporate income taxes, special consumption tax and value added tax.

During his visit, Tuan and his entourage also paid tribute to President Ho Chi Minh at his statue in Mexico City.

Condo classification no benefits for buyers

Specialists said new apartment classification regulations in Circular 31/2016 by the Ministry of Construction which becomes effective from today, February 15, would not bring practical benefits to buyers. Meanwhile, realty developers may utilize this for publicity.

The circular states that the classification applies to apartment buildings constructed after 1994 and aims to appraise the value of apartments for management and trading activities.

Apartment buildings will be classified into A, B and C based on four groups of criteria including planning and architecture; technical system; service and social infrastructure; quality, management and operation.

Grade-A apartments have to meet at least 18 of 20 criteria in Appendix 1 of the circular while Grade-B ones meet at least 18 of 20 criteria in Appendix 2. Graded C apartments are those that qualify for classification but fail to meet as many criteria.

Apartment classification will be carried out when the authorities receive a written requirement from the investor, the condo management board, or at least 50% of homeowners in a condo project.

To qualify for the classification and recognition, condo projects must abide by the detailed construction plan and the construction permits that have been issued, and must meet national technical and other standards. In addition, the apartments must not be among those to be dismantled or affected by site clearance plans, and must have been put into use without a breach of law.

Speaking to the Daily, Le Hoang Chau, chairman of the HCMC Real Estate Association, said that the classification aims to help buyers evaluate the projects and avoid incorrect information from the investors on the class of their projects.

Nguyen Tien Dung, general director of Saigon Vista Corporation (Savista), said the classification does not help buyers to make informed decisions as it just applies to completely constructed projects, while most homebuyers make decisions even before the projects go up.

The classification will mainly benefit secondary homebuyers when condo projects have been completed.

In principle, Circular 31 is more justifiable than Circular 14 thanks to more practical and detailed criteria. However, the new classification regulations focus on “structural” criteria while neglecting non-structural ones, like criteria on managing and operating services.

“Some of the criteria must be compulsory, especially fire regulations, managing and operating quality. Apartment buildings cannot qualify if they fail to meet those important criteria,” Dung added.

Global coffee exports forecast to hit 5-year low

The country’s coffee industry had a record setting year for 2015/16 (Oct/Sep) as a bumper crop led to exports of 27 million 60-kg bags— the highest volume ever recorded, reports the Vietnam Coffee and Cocoa Association.

However, for the new year, the global output of coffee beans has been forecast by the US Department of Agriculture to drop by nearly 5.4 million bags to a 5-year low of 61.6 million for the 2016/17 (Oct/Sep) year, says the Association.

The Association adds that the lower production levels are expected in all the top-five coffee producers – Vietnam, Brazil, Indonesia, India and Uganda.

Output of Vietnam, it notes, is expected to drop by three million bags to 24.0 million after the effects of inclement weather in 2016 spill over and weaken yields in the current year crop.

For the month of January, Vietnam exporters shipped an estimated 127,000 metric tons (2.1 million bags) of coffee abroad valued at US$287 million in revenue, down 3.6% in value and 26.5% in volume year-on-year.

Meanwhile, prices of Vietnamese coffee dropped in February. Coffee prices in Dak Lak, largest coffee growing province in Vietnam, decreased to US$1.96-US$1.98 (VND44,500-VND45,000) per kilogram during the first week in February.

Vietnamese robusta grade two, 5% black and broken was quoted at discounts of US$65-US$70 per metric ton to the May contract, nearly unchanged from US$60-US$70 the last week in January.

The market is less robust as both sellers and buyers want to wait and see, said one coffee trader in Ho Chi Minh City.

New lending rules come into effect from March

A new circular on lending activities of credit institutions and foreign bank branches is expected to overhaul the regulatory framework applicable to the activities in Vietnam.

Circular 39/2016/TT-NHNN issued by the State Bank of Vietnam (SBV), which comes into effect from March 15, is also expected to ensure that lending continues to grow while non-performing loans are kept in check.

Under the new circular, new kinds of lending, including revolving and rollover, will be permitted in Vietnam.

The new regulation will allow borrowers with business cycles not exceeding one month to obtain revolving loan facilities from banks for up to three months. 

Rollover loans, which are quite common in other countries, will be also possible, provided that the borrower does not have non-performing loans and the total tenor of the rollover loan does not exceed 12 months following the initial disbursement and does not exceed one business cycle of the borrower.

Circular 39 also reinforces the protection of banks as creditors. For instance, they will now have the right to continue the recovery of unpaid loans even after exhausting all agreed loan recovery methods, such as the sale of secured assets. Banks will have the right to claim compensation for damage caused by the breach of loan contracts in addition to penalty interest payments (provided that the principle of compensation for damage caused by breach of contract has been agreed upon with the client in the loan contract). They will also have greater freedom in agreeing to reductions or waivers of interest and fees.

The new circular also regulates that business households and other unincorporated businesses will not be eligible for bank loans as this kind of lending is risky for credit institutions.

Doan Thai Son, director of the SBV’s Legal Department, explained that the lending prohibition regulation has been issued to guide the implementation of the 2015 Civil Law, which came into effect on January 1, 2017.

Circular 39 will replace Decision 1627/2001/QĐ-NHNN, dated 31 December 2001, on the lending regime of credit institutions amended on multiple occasions by SBV over the 15 years of its implementation.

Auchan announces opening of supermarket at Summer Square

France-based Auchan Retail has announced it will open its fourth supermarket in Ho Chi Minh City at the Summer Square shopping centre.

The supermarket will be located on the ground floor of the luxury living and commercial centre.

Auchan Retail is a subsidiary of Auchan Holding and operates 774 supercentres and 817 supermarkets in 16 countries, with an estimated 337,800 employees. It is the fourth largest retailer in France. 

Deputy PM out to aid local retailers

Deputy Prime Minister Trinh Dinh Dung has asked ministries and authorities to support local retailers while better managing the operations of foreign retail firms.

The wholesale and retail market is developing rapidly with large potential and attracting the attention of both local and foreign investors, according to a recent note from the Government Office.

Regarded as a sensitive sector, the retail market has been gradually opened to foreign investors following Vietnam’s international commitments. However, management of foreign retailers has proven to be inefficient while there has been a lack of support for local firms to expand their distribution networks, the note said.

In the note, Dung called for management of foreign retailers to be tightened to ensure compliance with the law. In addition, the expansion of distribution networks of foreign firms must be kept in check.

The Ministry of Finance was directed to increase inspections of foreign wholesale and retail firms to prevent transfer pricing and collect taxes.

The Ministry of Industry and Trade was asked to aid local retail firms with land lease fees to promote their development.

Dung also asked relevant ministries to draft a decree which would replace Decree 23/2007/NĐ-CP on the purchase and sale of goods by foreign-owned enterprises. 

The decree should be sent to the Prime Minister within the first quarter of this year.

Dung said that the new decree should encourage foreign retailers to commit to distributing locally-produced products.

With a population of 90 million, around 40 percent of which are urban citizens, and double-digit growth in total retails sales of goods and services since joining the World Trade Organisation in 2007, Vietnam’s retail market has been attractive to foreign investors.

In recent years, the market has been entered by large retailers, including firms from Japan, Thailand and the Republic of Korea, through the opening of supermarkets and acquisition deals.

According to the Vietnam Institute for Trade under the Ministry of Industry and Trade, the retail market is set to grow by 11.9 percent per year to reach a value of 179 billion USD by 2020 from 102 billion USD in 2015.

Under the industry’s planning, there will be 1,200-1,500 supermarkets, 180 trade centres and 157 shopping centres by 2020.

Nipro starts work on new US$300 million facility in Vietnam

Nipro Pharma Corporation – Japan’s biggest prescription drug contract manufacturer – is expanding its operations in Vietnam with a new project worth US$300 million in the Saigon Hi-Tech Park (SHTP).

The US$300-million plant is meant to increase the company’s capacity to meet the growing demand for medical equipment and build a more stable supply system.

According to Nipro’s announcement, the company targets a consolidated net sales of JPY500 billion  (US$436 million)  by 2020 and JPY1 trillion by 2030. 

The wholly-owned subsidiary called Nipro Vietnam Co., Ltd. found an ideal location in Ho Chi Minh City, due to its suitability for export-import activities and abundant young workforce.

Nipro Vietnam will be established with a chartered capital of US$70 million and is planned to start operation on October 30. As mentioned before, the total investment value will be US$300 million including the plant that will look to produce for domestic and international customers.

Information published on Nikkei Asian Review claims that the facility will produce catheters, blood tubing, and other products for dialysis. Previously, Nipro has relied on a Thai subsidiary in this business line, but has decided to sate the growing demand for dialysis treatment products via a new facility in Vietnam.

In late 2016, Nipro got a license for the US$300 million project in SHTP, after investing US$150 million in the first plant in northern Vietnam.

"The project will focus on research and development (R&D), and medical equipment production. If everything goes smoothly, the project is likely to be kicked off in 2017," said Le Bich Loan, deputy chairwoman of the park’s (SHTP) Management Board.

The Osaka-based company said Monday that within three years, it will build the factory and install production equipment for around US$190 million. Output is to begin in October 2018. Plans call for investing another US$110 million or so through 2025 in additional capacity at the plant.

The factory will make catheters, blood tubing and other products for dialysis for sale mainly in Japan and to a lesser extent Southeast Asia. Nipro has relied on a Thai subsidiary to produce for these markets. 

The new project at SHTP is not Nipro's first project in Vietnam. In 2012, the firm kicked off its first plant in the northern port city of Haiphong, and began operation in 2015. The Japanese firm is also planning to enlarge its production activities in the city in the near future to serve the growing domestic demand.

According to VIR source, the Haiphong site of Nipro Pharma Vietnam has an area of approximately 150,000 square metres, equivalent to 18 football fields. The firm has so far used just 30,000sq.m, and will develop the rest soon for domestic sales.

Nipro made the move following the expansion of the global healthcare group Sanofi and B.Braun, Germany's biggest pharma and medical equipment producer.

In late 2015, Sanofi inaugurated its third plant worth US$75 million in Vietnam. Its other two plants, also in Ho Chi Minh City, are now running at maximum capacity, but they have not been able to keep up with demand.

Currently, 80% of Sanofi’s products manufactured in Vietnam are sold in the domestic market, and the rest are exported to other Asian countries.

Seeing the potential of the local medical equipment market, B.Braun plans to invest an additional US$270 million in some new projects in Vietnam in the next years. 

B.Braun Vietnam began operating the first phase of its medical equipment production in Hanoi in 2011 with the total investment capital of US$54 million. After three-year operations, the firm's revenue reached US$72 million in 2013. 

In 2014, the German firm decided to invest an extra US$50 million in the second phase of the project to meet local growing demands.

JICA keen to support clean agriculture value chains

The Japan International Cooperation Agency (JICA) wishes to provide support to Vietnam’s agriculture sector to build clean agricultural value chains, according to Mr. Hiroyuki Sakuma, Project Advisor of the Technical Cooperation Project on Development Planning of the Agriculture Sector in Nghe An.

At a conference on Vietnam’s Agricultural Business Mission held by the Japan External Trade Organization (JETRO) in Hanoi on February 14, he also spoke of projects in food value chains through cooperation between northern Nghe An province and JICA, which will link producers and sellers of agricultural products and improve product value.

Mr. Sakuma believes that Vietnam, especially Nghe An, has major potential to develop agriculture in the future. “Rice, tea, nuts and chicken are specialties of both Vietnam and Nghe An,” he added.

He also identified difficulties facing Vietnam regarding agricultural development, specifically building value food chains.

Various agricultural enterprises attended the conference. Mr. Nguyen Danh Nhan, Director of the Central Agricultural Corporation, said the gathering represented a good opportunity to link Vietnamese and Japanese enterprises.

Cooperation between the two countries is of a balanced nature. Along with seed companies and plant protection products, there are banks that support agricultural enterprises and improve trust.

Mr. Atsusuke Kawada, Chief Representative of JETRO in Hanoi, emphasized that there is a wave of agri-businesses seeking investment opportunities in Vietnam.

“Japan is aging while demand for food remains high,” he said. “Vietnam, with its young population and favorable climate for agriculture, is therefore an ideal destination for agri-investors from Japan.”

Japanese businesses appreciate the political and social stability in Vietnam and consider it the greatest advantage in its investment environment.

There are various Japanese enterprises and Vietnamese enterprises in the agriculture sector, including Agricare Vietnam and HongHaFood. They discussed and explained agricultural projects and identify cooperative opportunities in the future.

JETRO also released the “Investment Situation of Japanese Enterprises in Vietnam 2016” report at the conference.

According to the report, 62.8 per cent of the more than 600 businesses participating in the survey said they are profitable, up 58.8 per cent compared to 2015.

The result is higher than in Thailand and Indonesia but lower than in the Philippines and China.

Agribank Gold to go public

The Agribank Gold Corporation (AJC) will finalize its list of shareholders at 4.30 pm on February 28 then carry out depository registration procedures for its securities and update shareholder information.

Its shares will be suspended from 4.30 pm on February 28 until they are traded on the Unlisted Public Companies Market (UPCoM).

Shareholders wanting to sell shares or make changes to their shareholder information need to bring ID or a business registration certificate and a certificate of share ownership to AJC before 4.30 pm on February 28.

AJC has charter capital of VND206 billion ($9.05 million). The company was founded in 1994 and equitized in September 2008, with an auction of shares at IPO.

The price of each share at auction was VND11,626 ($0.5) and two organizations and 70 individuals were involved.

The total value of shares sold was VND44.17 billion ($1.96 million). AJC has two main shareholders: Seabank and the Nam Cuong Corporation.

Agribank’s other gold business is the Agribank Gold, Silver, and Gemstone Company (VJC).

There is the only one company operating in the gold business at present: Phu Nhuan Jewelry (PNJ).

Tentacles spread

Since CGV Cinema opened at Vincom Nguyen Chi Thanh Street in Hanoi, Mr. Pham Thanh Tung, second-year student at the Hanoi Law University, and his girlfriend have often gone there instead than other cinemas. “I prefer CGV because of its good quality sound and images, despite tickets being more expensive than elsewhere,” he said. Owned by CJ E&M, a subsidiary of the South Korean giant the CJ Group, CGV Cinema now has the most cinemas in Vietnam. The Vietnamese film “Em la ba noi cua anh”, based on the South Korean film “Miss Granny” and produced by CJ E&M, recorded the highest box office receipts in Vietnam’s history, of VND102 billion ($4.48 million). 

Film and entertainment have brought CJ closer to Vietnamese consumers. There are now 41 CGV cineplexes, or 40 per cent of the country’s total, with ticket sales of around $105 million in 2015, a 26.5 per cent increase against 2014. 

CJ E&M specializes in film production, TV, and games, and in October 2016 announced it would establish the CJ Blue Corp. in Vietnam by acquiring the Blue Group, a leading content producer and advertising agency. It had set a goal of becoming a global Top 10 culture company by 2020 through diversifying its content business in Southeast Asia, choosing Vietnam and Thailand as a beachhead for entry into the market. 

While stepping up its investment in movies and TV shopping, CJ Vietnam also continues to exploit Vietnam’s advantages in agriculture to expand. In areas where CJ invests in the country, food and food processing grew 86 per cent in the 2011-2015 period. “CJ wants to establish a closed system, from creating material areas to purchasing, processing, distribution and exporting,” said Mr. Chang Bok Sang, Chairman and CEO of CJ Vietnam. 

CJ CheilJedang, one of the CJ Group’s other subsidiaries, signed deals at the end of 2016 with local retail giant the Saigon Trading Group (Satra) to develop a distribution network for meat and fruit products. The South Korean food manufacturer will establish special zones inside Satra outlets to sell its meat, sauces, and new products customized to meet local tastes. 

The company also acquired more than 47 per cent of Cau Tre Export Goods Processing, one of the largest food companies in Ho Chi Minh City. Cau Tre, a subsidiary of Satra, was equitized ten years ago and has charter capital of VND117 billion ($5 million). Its shares are not listed on the country stock market. Satra, one of the large State-owned enterprises in Ho Chi Minh City, now holds 45 per cent of Cau Tre. 

In July last year, CJ spent $2.1 million and cooperated with the Korea International Cooperation Agency (KOICA) and farmers to grow chili on 10 ha in the south-central province Ninh Thuan. Four hectares are being trialed, which will finish this year. Two-hundred tons of fresh chili are expected from the 10 ha. The chili and other CJ products in Vietnam will be sent around the world. “We are able to do that with our existing network,” Mr. Chang said. 

The CJ Group has been implementing development strategies globally since 2006 and are now present in China, Southeast Asia, the Americas, Japan, Europe and South America. It targets sales of $110 billion by 2020, of which 54 per cent is to come from overseas. 

In Vietnam since 1998, CJ now has 13 subsidiaries with 4,000 employees in 19 cities and provinces. Its sales soared in 2014, reaching VND14 trillion ($616 million), more than double the VND6 trillion ($264 million) recorded in 2013. Profits stood at VND400 billion ($17.6 million). The figure rose to VND15 trillion ($660 million) in revenue and VND500 billion ($22 million) in profit in 2015 and revenue in 2016 is estimated at VND17 trillion ($769 million). In addition to food, agriculture and entertainment, the CJ Group has also invested in biotechnology and pharmaceuticals, home shopping, and logistics in Vietnam. 

After 20 years in Vietnam, according to Mr. Chang, CJ has achieved sustainable development in its business activities. While it has a presence in many countries, including Indonesia and the US, Vietnam has proven to hold great promise, with its businesses growing 26.73 per cent each year on average from 2011 to 2015. 

Because of this potential, the CJ Group last year decided to invest $500 million in Vietnam to turn it into its second-largest overseas market, after China, within the next five years. The amount is larger than the total of $400 million the Seoul-based conglomerate has invested in Vietnam over the last 20 years and expresses its determination to see Vietnam become a major center for the group over the next few years. 

Its ambition has hit a few stumbling blocks along the way, however. In 2016, CJ CheilJedang failed to acquire 14 per cent in the major Vietnamese processed food producer Vissan, and holds just 4.18 per cent at the moment. Cau Tre was therefore considered an important piece of the puzzle in it completing a closed chain in Vietnam, where the group has large poultry and pig farms and food processing plants. Cau Tre’s export markets include Europe, North America, Japan, Hong Kong, South Korea, and Taiwan. 

Cau Tre’s business performance, however, has not been great. According to its 2015 annual report, net revenue was VND743 billion ($32.6 million) and pre-tax profit VND8 billion ($352,000), for a profit margin of only 1.1 per cent. As at the second quarter of 2016, revenue had slipped to VND334 billion ($14.6 million) and pre-tax profit to VND1.2 billion ($52,800), less than half of those recorded in the second quarter of 2014. 

Food and film have helped Vietnamese people become familiar with the name CJ but animal feed and livestock brings in more than 50 per cent of its revenue and 40 per cent of its profit in Vietnam. This is the largest segment of CJ in the country, through the CJ Vina Agri Co., Ltd, which specializes in animal husbandry and the production and trade of all types of feed. 

CJ Vina Agri built its first food factory in the Mekong Delta’s Long An province in 1999, followed by one in northern Hung Yen province and Vinh Long province in the Delta. In July 2015, it opened a fourth animal feed factory, with investment of $20 million, in southern Dong Nai province. Four factories producing animal feed will increase production to 2 million tons per year with investment capital of $80 million in the next four years, taking CJ closer to its goal of becoming the leading company in Vietnam’s animal feed market by 2020. 

Whether it reaches this goal is an open question. The battle for market share in the feed sector is becoming increasingly fierce, with many large domestic companies also involved in the game via M&A. In 2015, Masan Nutri-Science, a subsidiary of the Masan Group, acquired 52 per cent of Proconco and 70 per cent of Anco; both leading companies in the animal feed market. Masan then accounted for 14 per cent of the animal feed market, while Thai giant CP holds 21 per cent. 

In terms of film and entertainment, though dominating Vietnam’s cinema landscape, CGV has recently faced a couple of scandals. In May last year it was alleged to have imposed unfair profit sharing arrangements on the distribution of Vietnamese films throughout its extensive cinema chain. In a joint petition to the Vietnam Cinema Association, eight domestic film producers and distributors alleged that CGV put them at a disadvantage by using its market dominance to claim an unreasonable share of box office receipts from the Vietnamese films it screens and distributes through the largest multiplex cinema chain in the country. 

“With an overwhelming number of cinemas, CGV has been imposing an unreasonable revenue sharing ratio on movies distributed at its cinema chain,” according to the petition, signed by BHD, Galaxy, Skyline, Golden Media, Saigon Media, MVP, Early Risers and the VAA Company. “Vietnamese movies produced by CGV and screened at other theaters have a share ratio of 55/45, in which CGV enjoys 55 per cent of the profit. Domestically-produced movies released at CGV theaters have the opposite ratio, of 45/55, in the first week, and that falls in later weeks.”

In 2010, when the cinema company was still operating under the name Megastar, it was sued by domestic film distributors for imposing limited time slots and theater and over film rental-related issues. After an investigation conducted by the Vietnam Competition Authority, the plaintiffs, including Galaxy Studio, withdrew their complaint while CGV bore VND100 million ($4,482) in court costs. 

Thach Ban granite factory begins operation in Bac Giang province

The Thach Ban Group Joint Stock Company held a ceremony in the northern province of Bac Giang on February 15 to inaugurate its new granite ceramic tile factory and celebrate 58 years since its establishment.

The factory was built on an area of nearly 20 hectares in Yen Dung district’s Nham Son commune at a total cost of approximately VND1 trillion (US$44 million).

It is currently capable of manufacturing 8 million square metres of granite ceramic tiles per year, a five-fold increase against the capacity of its previous factory, located in Hanoi. According to the development roadmap, its capacity will amount to 16 million square metres by 2020.

The Thach Ban Bac Giang factory applies newly imported Italian technology in sync with digital printing technology to manufacture vivid product lines with subtle designs, long lifespan and diversified models.

Despite higher production costs than the coal gasification technology (a kind of fuel polluting the environment and flammable while in use), the new technology is invested in by Thach Ban with the goal of sustainable development and green production (manufacturing products friendly to the environment and labourers).

In addition to the ambition of dominating the booming domestic market about the demand for building materials, ceramic tile products manufactured at the Thach Ban Bac Giang factory also look to potential export markets, such as the Republic of Korea, Chinese Taipei, Malaysia, Australia, the Middle East and the United States.

During its 58 years of construction and development, Thach Ban Group JSC has developed from a manual brick production site previously into a prestigious group specialised in manufacturing and trading building materials in Vietnam. The company has taken the lead in acquiring, applying and creating advanced production technologies, contributing to renovating the brick production industry in Vietnam.

Da Nang strives for 6.3 million tourists in 2017

In 2017, the central city of Da Nang expects to welcome 6.3 million visitors, including 2 million foreigners.

The city planned to host a series of distinctive and attractive cultural events and festivals; and perfect local infrastructure to advertise its tourism brand.

The locality also hoped to earn around VND 18.5 trillion in tourism revenue, up nearly 16% against 2016.

Director of the Da Nang Tourism Department Ngo Quang Vinh was quoted as saying the tourism sector already set important tasks in 2017, including hiring foreign consultants to review and adjust the master scheme on Da Nang tourism development by 2025 with a vision towards 2030; implementation of Son Tra national tourism site planning in accordance with the PM’s approval; conducting tourism promotion activities at key markets and exploiting potential ones (France, Germany, the UK, the U.S.); and newly emerging ones (India).  

The city also planned to accelerate the launching of new international air routes to key markets.

Da Nang hoped to build itself as a city of peace, and being environmently-friendly; manage the service quality of travel agents and tourism sites; and ensure food hygiene.

Large-scale projects such as the Asia Park Da Nang, Ba Na Hills, and Cocobay will soon be put into operation and offer new tourism products.

In addition, the modal of three localities – Da Nang, Quang Nam, and Thu Thien-Hue will be promoted.

Especially, as the host of the 2017 APEC Economic Leaders’ Week 2017, the city has been upgrading infrastructure with a view to advertising its tourism brand to domestic and foreign visitors.

The Da Nang International Fireworks Festival 2017 (DIFF) will take place on every Saturday from April 29 to June 24, expecting to welcome around 2 million visitors to the central city.

The highlight of the festival will be the magnificent and stunning firework performances by teams from eight countries, including the United Kingdom, Australia and Switzerland, presenting a wonderful display of light in Da Nang's night sky along the Han River. Wu Xing (five basic elements of Fire, Earth, Metal, Water and Wood), according to Eastern philosophy, is also the theme of the fireworks performance.

These include a carnival which gathers a number of artists in colorful costumes, who perform on the major streets of Da Nang.

Da Nang will also treat visitors with a banquet of specialties at the International Food Festival.  

The food festival will be divided into five areas under Wu Xing. The Fire area will be the kitchen for grill and sauté, the Earth area for clay pot cooking, the Metal area for frozen food using Korean-styled metal bowls and chopsticks, the Water area for hotpots, noodle and soup and the Wood area for vegetarian food.

Vietnam, Laos boost banking cooperation

The State Banks of Vietnam and Laos convened a joint conference in Luang Prabang, Laos, on February 15.

The sides updated each other on macroeconomic situation, the enforcement of monetary policy and management of commercial banks in their respective countries. 

Pleased with effective bilateral cooperation in the past time, the two sides agreed to continue implementing joint projects in cross-border trade payment, banking inspection, anti-money laundering and personnel training.

The two State Banks also committed to boosting the partnership among the four countries – Vietnam, Laos, Myanmar and Cambodia.

Concluding the function, Governor of the State Bank of Vietnam Le Minh Hung and his Lao counterpart Somphao Phaysith signed a memorandum of understanding on bilateral collaboration.

They vowed to encourage and facilitate partnerships between Vietnamese and Lao commercial banks, contributing to stimulating investment and trade ties between the two countries.

PM: Vietnam values Japanese investment

Vietnam is working hard to improve its business climate to attract more foreign investors, including those from Japan, said Prime Minister Nguyen Xuan Phuc.

He made the statement while receiving Takashi Oyamada, Chief Executive Officer and President of The Bank of Tokyo-Mitsubishi UFJ (BTMU) in Hanoi on February 15.

Lauding sound cooperation between BTMU and the Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank), particularly their organisation of investment promotion conferences, PM Phuc said Vietnam attaches importance to the supply of capital for its economy during the development progress.

He stressed that Vietnamese enterprises want to form partnerships with the Japanese peers to learn from their experience in management, production and business. 

He also noted with pleasure that most Japanese firms have witnessed good business results in Vietnam, adding Japan is now the second largest investor in Vietnam with a total investment capital of over 42 billion USD.

The PM expressed his wish that Japanese businesses will pay more attention to the Vietnamese market so as to make Japan the biggest investor in the Southeast Asian nation.

For his part, Takashi Oyamada informed his host that the long-term strategic partnership between his bank and Vietinbank has brought mutual benefits, contributing to the growth of Vietnam-Japan ties.

Through the cooperation, BTMU has learned about valuable experience from Vietinbank and the Vietnamese credit market, he stressed, adding that both sides will work closely to supply capital for business activities in Vietnam.

He said many Japanese firms want to invest and expand operations in Vietnam as they see the country as a strong economy and potential market.-

Vietnam attends travel trade show in India

Several Vietnamese businesses are participating in South Asia’s leading travel trade show – SATTE 2017, which started in New Delhi, India on February 15.

This is the first time Vietnamese firms have joined the event, with leading tourism businesses such as low-cost carrier Vietjet Air and tour operators Saigontourist and Viettravel in attendance. 

India is a market with potential for Vietnam’s tourism industry due to its large population of over 1.2 billion people.

The three-day event includes 870 booths of businesses from 40 countries and territories, aiming to create opportunities for businesses and tour operators to seek partners.

According to statistics, as many as 20 million Indian tourists travel abroad each year and the figure may reach 50 million by 2020.

More than 60,000 Indians travelled to Vietnam in 2016, up nearly 3.5 times from 2010, while around 12,000 Vietnamese visiting India each year.

HCM City hopes for stronger ties with Japan’s Gunma Prefecture

Ho Chi Minh City hopes to forge stronger cooperation with Japan’s Gunma Prefecture, especially in areas of the prefecture’s strength such as small and medium-sized enterprises and human resources training, stated a city leader.

Meeting visiting Gunma Governor Masaaki Osawa in the city on February 15, Chairman of the municipal People’s Committee Nguyen Thanh Phong affirmed that the city always attaches much importance to investment resources from foreign investors, including those from Japan.

High political trust between Vietnam and Japan is a favourable condition for economic, trade and investment ties between the two countries in general and Ho Chi Minh City and Japan’s Gunma Prefecture in particular, he said.

Recognising the goodwill for collaboration on the side of Gunma businesses, Phong suggested that the two localities should promptly sign a cooperation agreement to better exploit their strengths, including tourism, manufacturing industry, and human resources training.

Showing his impression at the strong and dynamic growth of Ho Chi Minh City, Masaaki Osawa said that the Gunma delegation’s visit aims to foster connections between the two localities, initially in tourism and exchange of trainees in agriculture.

He highlighted that Gunma businesses hope to forge stronger affiliation with Ho Chi Minh City in information technology, support industry, and developing small and medium-sized enterprises.

Gunma, which is hosting a large number of Vietnamese trainees, hopes to establish new channels to enhance the number and quality of Vietnamese trainees and apprentices from Ho Chi Minh City working in the Japanese prefecture, he stated.

Vietjet Air flies over 14 million passengers in 2016

Low-cost carrier Vietjet Air continued to post positive growth in 2016 with a revenue of over 27.5 trillion VND (1.2 billion USD) and a profit of almost 2.4 trillion VND (105 million USD). 

With its commitment to tapping increasing demand for air-travel, the airline also achieved a load factor of 89 percent with more than 14 million passengers carried, greatly contributing to the development of Vietnam’s aviation industry as well as the country's economic growth.

Vietjet also registered high performance in terms of safety and reliability compared to other airlines in the Asia-Pacific region. It operated a total of 84,535 flights with 121,213 flight hours last year. The airline’s technical reliability stood at 99.56 percent, the highest rate obtained to date by any airline operating A320/A321 in the region. On-time performance for the year stood at 83.6 percent.

The airline’s training center, which opened in early 2015, has so far trained 8,287 staff and  provided 655 training courses for a total of 25,249 training hours with 3,351 certificates presented, all of which guarantees the development of Vietjet’s international standard and professional human resources that will oversee the airline's steady and sustainable growth.

In 2016, Vietjet continued to increase flight frequency for domestic flights while also constantly expanding its international network. The airline currently operates 63 routes (37 domestic and 26 international ones) with a fleet of 45 new and modern aircraft aged 3.3 years old on average.

Vietjet is the first airline in Vietnam to operate as a new-age airline with low-cost and diversified services to meet customers’ demands. It provides not only transport services but also uses the latest e-commerce technologies to offer various products and services for consumers. 

Vietjet is a member of the International Air Transport Association (IATA) with the IATA Operational Safety Audit (IOSA) certificate. The airline was also named as one of the Top 500 Brands in Asia 2016 by global marketing research company Nielsen and “Best Asian Low Cost Carrier” at the TTG Travel Awards 2015, which compiles votes from travelers, travel agencies and tour operators in throughout Asia. The airline was also rated as one of the top three fastest growing airline brands on Facebook in the world by Socialbakers.

Currently, the airline boasts a fleet of 45 aircraft, including A320s and A321s, and operates 350 flights each day. It has already opened 63 routes in Vietnam and across the region to international destinations such as Thailand, Singapore, the Republic of Korea, Taiwan, Malaysia, China and Myanmar. It has carried nearly 35 million passengers to date.

PM lauds Huawei Group’s contribution to IT growth in Vietnam

Prime Minister Nguyen Xuan Phuc hailed the contributions of Chinese Huawei Group to Vietnam’s information technology development during a meeting with Chairwoman of the group Sun Yafang in Hanoi on February 15.

Welcoming Huawei’s expansion of operation in Vietnam, the PM said that he hopes Huawei will strengthen partnership with Vietnamese firms in online information security.

He affirmed that the Vietnamese Government will always create the best possible conditions for the cooperation. 

The Government leader agreed with Sun’s proposal in giving more attention to the development of products serving the protection of online information.

Highlighting that the Vietnam-China relationship is growing across socio-economic fields, PM Phuc noted that two-way trade has exceeded 100 billion USD, which is a favourable condition for businesses of both sides to foster partnership.

For her part, Sun expressed her impression at the Vietnamese PM’s attention to the promotion of affiliation between Vietnamese businesses and foreign partners, including Huawei Group.

According to the executive, Huawei, as one of world leading ICT solution providers with revenue of 75.1 billion USD in 2016, is willing to share its experience with Vietnam in IT development. 

Sun lauded Vietnam’s strategy for IT growth and noted her hope to contribute more to IT and telecommunication area in the country. 

She added that the group is also keen on infrastructure development and products for information safety in Vietnam.

Huawei plans to hold training courses in ICT advances for Vietnamese students and ICT officials, which include courses in cyber security, with a total investment of 250,000 USD per year, according to Sun.

The group will also launch a 300,000 USD programmes to nurture telecommunications talents in Vietnam, while continue providing computers and ICT devices to schools in remote areas with an investment of 100,000 USD per year, she added.

Huawei invested 9.2 billion USD each year for research and development activities, she said, adding that Huawer has 180,000 employees in the world who are serving one third of the world population in the field of IT.

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