Vietnamnet global

17/01/2016 12:00 (GMT+07:00)

BUSINESS IN BRIEF 17/1

ADB operations reach $27b in 2015, Consumer credit boom expected in next five years in Viet Nam, Sime Darby sets up Vietnamese subsidiary, Work begins on a steel sheet plant in Nhon Hoi economic zone

ADB operations reach $27b in 2015

The Asian Development Bank's (ADB) operations, comprising the approval of loans and grants, technical assistance, and co-financing, reached an all-time high of $27 billion in 2015.

This was an increase of about 19 per cent over the $23 billion in 2014, according to provisional figures released on January 8.

ADB's approvals of loans and grants, sovereign (governments) and non-sovereign (primarily private sector), reached a record $16.58 billion — a 23 per cent increase from 2014. Technical assistance amounted to $144 million and co-financing increased 13 per cent to a record $10.43 billion in 2015.

Of the $16.58 billion, sovereign loan and grant approvals increased by 21 per cent to $13.95 billion in 2015.

Non-sovereign approvals made a big leap from $1.92 billion in 2014 to $2.63 billion in 2015. In addition to a volume increase, ADB increased its allocation to the poorest countries to 40 per cent of non-sovereign approvals. To expedite small non-sovereign transactions, ADB introduced a fast-track approval process.

ADB is now making active use of local currency lending to the private sector and increased bond issuances in local currencies to support the lending.

Unless loans and grants are disbursed, they will have no impact on development. In 2015, total disbursements of loans and grants reached a record $12.34 billion, an increase of 21 per cent over the previous year.

"Our record performance last year reflected strong and growing demand from the Asian and Pacific region," ADB President Takehiko Nakao said. "Infrastructure and other development needs are huge and poverty remains pervasive despite the region's robust growth performance."

To help meet the increased demand for its operations, ADB Board of Governors last year unanimously endorsed the merger of ADB's concessional Asian Development Fund and its market-based ordinary capital resource balance sheet. With this path-breaking reform, ADB's financing capacity (annual approvals of loans and grants) will dramatically increase up to $20 billion by 2020. ADB is well on track to achieve this scaling up.

Among ADB's operational highlights last year were the quick response to natural disasters, especially the Nepal earthquake in April and the Vanuatu cyclone in March; and support for necessary fiscal measures of countries suffering from lower commodity prices and volatility in financial markets, such as Kazakhstan and Mongolia.

In 2015, ADB was among the first multilateral development banks to commit a sizeable climate finance target. In late September, ADB announced it would double its annual climate financing to $6 billion by 2020, up from the current $3 billion.

To support its climate work, ADB issued its first green bond. ADB approved its first policy-based loan in the People's Republic of China to improve air quality in the Beijing-Tianjin-Hebei area.

In order to help effectively mobilise financial resources and management skills from the private sector for infrastructure development, ADB established an Office of Public-Private Partnership (PPP). This office offered active transaction advisory services for PPP projects in the region such as the North-South Railway project in the Philippines.

ADB made further progress in streamlining procedures for country programming, project processing, and procurement. One example was the introduction of tailor-made procurement procedures specifically for small Pacific Island countries. ADB has been providing greater resources and delegating more authority to its 31 field offices to improve its responsiveness on the ground.

Last year, ADB operationalised seven sector groups such as energy and transport, and eight thematic groups such as governance and gender, which work across operations departments. This will strengthen ADB's knowledge services and provide innovative solutions to client countries.

"As we approach our 50th anniversary this year, we are committed to scaling up our operations, and achieving poverty reduction and sustainable development in the region," Nakao said.

Consumer credit boom expected in next five years in Viet Nam

Consumer credit was expected to develop rapidly in Viet Nam in the next five years, driven by rising demand from a recovering economy with a young population.

Dao Van Hung, member of the National Financial and Monetary Policy Advisory Council, said that there was huge potential for development of consumer credit in Viet Nam.

Financial firms and commercial banks providing this kind of service still largely ignored the outskirts and rural areas, where there were a large number of people who don't qualify for banking loans, who were potential customers for consumer credit.

The central bank's statistics showed that outstanding consumer loans accounted for 8 per cent of the economy's total outstanding loans, which was modest in comparison with the regional average of around 20 per cent and 40 per cent in developed financial markets.

The percentage was expected to rise to more than 15 per cent of the total outstanding loans in the next five years, or an average annual rise of 20 per cent, promising a busy market with a diversification of consumer lending packages.

According to Truong Thanh Duc, chairman of the legal club of the Viet Nam Banking Association, more financial companies under commercial banks are expected to join the consumer lending race in the coming years.

Viet Nam now has only six financial companies specialising in consumer financial services, with several banks which provide this kind of service still failing to meet the demand.

Duc said that consumer lending procedures were more flexible and simpler than banking, and coupled with rising demand for consumer credit would fuel the boom.

According to Duc, interests from consumer lending remain higher than banking rates. This is understandable because it is difficult for financial companies to raise capital, while their lending costs are higher and loans are mainly trust-based.

As the market had not developed risks remained high, Duc said, and added that the development of consumer lending would promote competition, which was expected to lower interest rates with regard to consumer lending.

Still, experts said that interest rates from consumer lending were much lower than black credit. The development of consumer lending would bring a lot of benefits not only to the consumers but also to the economy, they said.

Hung said consumer lending would promote purchase, stimulate production and growth, and policy-making must be based on that approach.

HCM City asks banks to offer firms preferential rates

HCM City's People's Committee has assigned banks in the city to spend VND300 trillion (US$13.7 billion) this year to offer local enterprises preferential interest rates, Le Van Khoa, deputy chairman of HCM City's People's Committee, has said.

The assignment is part of a programme connecting banks and enterprises that has been operating for three years.

The target this year would be five times higher than the figure set in 2015, according to Khoa.

Responding to the assignment, 18 banks in the city on Friday signed agreements with local enterprises to loan them VND211.5 trillion ($9.7 billion) and US$15 million at an interest rate of no more than 7 per cent per year for short-term and 8-10 per cent per year for medium- and long-term loans.

Khoa said that this year the priority would be given to small- and medium-sized enterprises and companies operating in the supporting industry.

Other companies benefiting from the programme are exporter and firms in high-tech agriculture and rural development; and companies that will take part in the city's price stabilisation programmes in the 2016-20 period, he said.

HCM City has carried out many programmes to support local enterprises to overcome difficulties, and the programme connecting banks and enterprises has been implemented well.

The programme was organised with the main aim of assisting local enterprises to mobilise capital at preferential interest rates to expand their business.

For more than three years, the programme has mobilised nearly VND241 trillion ($11 billion), giving loans to over 9,200 customers.

In 2015 only, over VND173 trillion ($7.9 billion) was poured into the programme while the target was only VND60 trillion.

The programme had been useful for local companies, said Pham Xuan Hong, chairman of the HCM City Association of Garment – Textile – Embroidery – Knitting.

Through the programme, companies had been able to tap into bank loans, while relations between companies and banks had improved, he said.

"The companies now have more capital to expand business and exports."

Co-ops step up integration

With the country's increasing international integration, more and more co-operatives are focused on strengthening their competitiveness by improving technologies and management, according to the Viet Nam Cooperative Alliance (VCA).

Speaking yesterday at the opening ceremony of a programme to introduce products produced by southern co-operatives, VCA chairman Vo Kim Cu said they were also now building brands for their products and creating supply chains.

The country had nearly 20,000 co-operatives operating in various sectors, with many exporting their products like handicrafts and farm produce, he said.

Nguyen Quoc Hai, chairman of the 220-member Can Tho Cooperative Alliance, said, "We have worked to help our members improve their management and develop linkages from production to consumption to help them prepare well for integration.

"We will continue doing so in the coming time."

Tra fish production co-operatives in Can Tho, a major tra farming centre, tend to produce fish that meet export standards, he said, adding that they have developed close links with processing companies to ensure outlets for their fish.

Thoi An Co-operative and Thang Loi Co-operative were among the very successful ones in Can Tho, with the latter, for instance, earning revenues of more than VND100 billion a year, he said.

Cu said co-operatives, despite making progress, encounter difficulties such as lack of funds and qualified human resources.

The VCA would co-operate with relevant agencies to make it easier for co-operatives to borrow, he said, calling on co-operatives to attach greater importance to training human resources.

More than 50 co-operatives based in the south showed off their products to more than 200 domestic and foreign business groups, hotels, restaurants, and retailers at the Saigontourist Hospitality College in Tan Binh District.

It was organised by the Southern Centre for Support and Development of Cooperatives and Small and Medium Enterprises and other organisations.

TPBank launches new e-banking

Tien Phong Bank officially launched electronic banking with eBank 7.0 for individual customers with new and outstanding characteristics in Viet Nam yesterday.

The new version allows users to use a fingerprint and PIN code instead of entering a password. Another outstanding improvement in interface and individualisation based on HTML5 technology is a customised feature according to customers' demands. A new feature that allows users to sweep QR code to check the information and status of customers' saving accounts was also introduced for the first time.

TPBank also launched ebank Biz – electronic banking for businesses. The version allows five levels for an enterprise to approve a transaction. Firms can also implement payment of import-export and local taxes through ebank Biz in only a few minutes.

FPT Software revenue jumps 31%

The Financing and Promoting Technology Corporation (FPT) has reported that the revenue of its company FPT Software reached $181 million in 2015, an increase of 31 per cent from the previous year.

The FPT Software provides developed software services and maintenance as well as Enterprise Resource Planning (ERP) Implementation, converted applications, and embedded systems, in addition to mobile computing, and cloud computing. It also provided services to many specialised fields such as banking and finance, telecommunications, healthcare, manufacturing, automotive industry, and energy.

Despite the fact that the IT industry has fierce competition, the largest software exporter in Viet Nam still has seen significant growth as FPT Software's revenue in 2014 stood at $138 million. It was $100 million in 2013.

The target of FPT Software in 2016 is to reach 10,000 employees and revenue of $200 million, according to Hoang Nam Tien, chairman of FPT Software.

MoU on IT research and training

The Posts and Telecommunications Institute of Technology and the Viet Nam Internet Network Information Centre (VNNIC) and Institute of Information Technology, Vietnamese Academy of Science and Technology signed a memorandum of understanding (MOU) in Ha Noi yesterday.

The MOU will foster cooperation among the three sides on research, pilot and training in the IT sector along with scientific research, technology transfer consultation in the IT sector and information security.

The three agencies will also boost research and implement solutions to ensure security on the internet.

ASUS wins five innovation awards

ASUS won five prestigious CES Innovation Awards for products with outstanding design and engineering at the 2016 International Consumer Electronics Show (CES) in Las Vegas.

The five awarded products are the ASUS Chromebit CS10 candy-bar-sized Chrome OS computing device, the Republic of Gamers (ROG) G752 gaming laptop, the ROG GT51 gaming desktop, the PG348Q LCD monitor, and the RT-AC5300 tri-band wireless router. These award-winning products demonstrate the ASUS commitment to delivering incredible experiences to users through innovations that harmonise beautiful design with powerful functionality.

Sime Darby sets up Vietnamese subsidiary

Malaysian Sime Darby Bhd, seller of 30 different brands of vehicles across Asia established a unit on Dec. 31, 2015, in Viet Nam to retail cars and spares.

Among the brands sold by Sime Darby are Rolls Royce, Hyundai, Ford and Land Rover.

The company's unit Euro Auto has secured approval from Vietnamese authorities to incorporate its 90 per cent-owned Performance Motors Viet Nam Joint Stock Company, which mainly sells vehicles and spare parts, Sime Darby said in a stock exchange filing.

The Viet Nam Automobile Manufacturers' Association said vehicle sales rose 58 per cent year on year in the first 10 months of 2015 to 163,855 units, making the country one of the fastest growing automotive markets in Asia.

Sime Darby has been selling MINI – and BMW-branded luxury vehicles in Viet Nam through its Euro Auto unit since 2007 and owns showrooms in HCM City and three outlets in Ha Noi.

The incorporation of Performance Motors Viet Nam is not expected to have a material effect on the earnings or net assets of Sime Darby for the financial year ending June 30, the company added.

SSI increases stake in fertiliser company

Sai Gon Securities Inc (SSI) has purchased 30,000 shares of Van Dien Fused Magnesium Phosphate Fertilizer Joint Stock Company (VAFCO).

Due to the transaction on December 30, SSI increased its shares of VAFCO from 4.95 per cent to 5.05 per cent of the company.

VAFCO was established in 1963 to manufacture and sell phosphate and fertilisers, as well as import fertilisers and raw materials. Currently, VAFCO has charter capital of VND289 billion (US$12.8 million).

SSI earned VND960 billion ($42.6 million) in revenue and VND755 billion ($33.5 million) in pre-tax profits in the first nine months of 2015.

Vinasiam breakdown brings prospects for Thai banks

Upon request of Vinasiam Bank (VSB), the State Bank of Vietnam (SBV)’s Governor issued Decision No. 2653/QD-NHNN on December, 30, 2015, to revoke the bank’s licence.

Accordingly, VSB must liquidate all assets through the transfer of its assets and liabilities to the Ho Chi Minh City branch of Thai-backed Siam Commercial Bank Public Company Limited (SCB).

VSB is a joint venture between SCB, the third-largest bank in Thailand by assets, Vietnam Bank for Agriculture and Rural Development (Agribank), and Thai conglomerate Charoen Pokphand Group. Agribank currently owns 34 per cent of VSB, while the other two stakeholders hold 33 per cent each. VSB was granted its licence in 1995 and is now looking back on three consecutive years closed with a loss.

Earlier on, in December 2015, SCB received the green-light from the SBV to open a full branch in Ho Chi Minh City, as part of it expansion plan to tap into one of the fastest growing market in Southeast Asia. The wholly-owned branch has its capital registered at $25 million and licensed to operate for 99 years in Vietnam.

The approval came on the condition that SCB would buy a combined 67 per cent of stakes in VSB from Agribank and Charoen Pokphand Group, SCB chief executive officer Arthid Nanthawithaya said in a statement following the SBV’s announcement.

According to SCB, the bank will be spending around $45.77 million to perform the deal and the new branch is planned to open its gates in early 2016.

After the opening of its Ho Chi Minh City branch, SCB - 21.3 per cent of which is owned by the investment arm of the Thai royal family's Crown Property Bureau - will have 11 foreign branches and representative offices in eight countries.

In the midst of regional banks flocking to Vietnam, Thai banks, in particular, have seized the golden opportunities offered by the stable economic growth and the country’s great potential for expansion of banking operations.

Thailand’s Kasikorn was amongst the first Thai banks to set up its network in Vietnam via two domestic state-owned banks, Vietinbank and Agribank, in 2011, and lately launched its representative offices both in Hanoi and Ho Chi Minh City.

The Reverie Saigon listed in The Best New Luxury Hotels 2015

The Reverie Saigon has been ranked as one of the top Ten Best New Luxury Hotels in 2015 by the members-only high-end travel-rating company, Luxury Travel Intelligence.

This prestigious honour is a continued success for The Reverie Saigon after its opening on September 1, 2015.

The Reverie Saigon is a luxury hotel in the heart of Ho Chi Minh City at Times Square Building,

22-36 Nguyen Hue boulevard and 57-49F Dong Khoi street, District 1. Renowned for its beautiful interior designs,

The Reverie Saigon also raises the bar for services and accommodations in Vietnam. Crafted to perfection, indulge in one of the 12 types of magnificently furnished accommodation as offered throughout 62 suites and 224 rooms.

Five conference rooms and four sophisticated meeting rooms are strategically located on the hotel’s 8th floor, as well as an executive meeting room on the 39th floor, all boasting stunning panoramic views of the city. Each venue has been furnished with meticulous attention to detail and outfitted with modern audio-visual equipment.

The honoured list of Luxury Travel Intelligence’s Best New Luxury Hotels 2015 includes:

1. Mandarin Oriental, Marrakech

2. Sant Francesc, Palma Mallorca

3. Aman, Tokyo

4. Villa Rene Lalique, Alsace

5. The Reverie Saigon, Ho Chi Minh City

6. Temple House, Chengdu

7. Sujan Rajmahal Palace, Jaipur

8. La Fiermontina, Puglia

9. Six Senses, Douro Valley

10. Gansevoort, Dominican Republic

Hanoi firms gain insight into ASEAN Economic Community

A great number of Hanoi businesses learned about opportunities and challenges of the ASEAN Economic Community (AEC) during a discussion in the capital city on January 8.

Director of the municipal Department of Foreign Affairs, Pham Vinh Quang said the AEC, which officially took shape on December 31, 2015 as part of the ASEAN Community: with member countries’ full implementation of their commitments – we can move forward in helping promote regional peace, security and prosperity.

Particularly, the AEC will offer Vietnamese enterprises, numerous chances to integrate into the larger regional economy along with an array of challenges.

The AEC is similar to an economic integration framework, but at a more intensive level. It proceeds with the achievements of the ASEAN Free Trade Area, - which allows the freer flow of goods, services, capital, investment and skilled labour among the 10 member countries, Quang noted.

The AEC continues fostering the execution of the ASEAN integration initiative in 12 prioritised spheres. They consist of seven goods-related fields (agricultural products, aquatic products, wood products, electronics, rubber, automobile, and textile-garment) and five services areas (health care, tourism, air transport, information technology, and logistics services).

The community will also step up initiatives for narrowing development gaps between member countries, strengthening cooperation with non-ASEAN countries, and boosting integration into the world, the official added.

Meanwhile, challenges posed by the AEC such as the language barrier, the competition of foreign goods, and the deadline for realising commitments are also likely to affect Hanoi businesses - as the city is a growth engine of Vietnam, Quang said.-

Farm co-operatives need more support

The Ministry of Agriculture and Rural Development and the Vietnam Co-operative Alliance have announced policy plans to support farming co-operatives by making them more competitive.

Although the Law on Co-operatives from 2012 authorised support to co-operatives including training, technology application, capital and trade promotion, the support had yet to make an impact, agriculture minister Cao Duc Phat said at a recent meeting in Hanoi.

Many agriculture co-operatives did not identify their development orientation or key products to meet the market demand, Phat said.

They failed to expand production and benefit members of the co-operative, with only 10 percent of the total 10,450 agriculture co-operatives operating effectively, Phat added. About 80 percent had moderate performance, while the remaining 10 percent reportedly had poor operations.

Almost all of the co-operatives concentrated on agriculture production, but paid little attention to finding markets or establishing themselves in the product-supply chain, he said.

"Each co-operative should not be seen as an independent economic entity, but part of a value chain that follows market rules," Phat said.

Chairman of Vietnam Co-operative Alliance Vo Kim Cu said agriculture co-operatives comprised up to half of the total co-operatives in localities.

While participants of agriculture firms and co-operatives expect to receive some positive benefits from international trade agreements like Trans-Pacific Partnership, they also feel vulnerable due to increased competition.

"Farmers are not clear on the so-called Trans-Pacific Partnership or Asian Economic Community, but they are feeling tougher and tougher competition from outside," Cu said.

"They see the need for associating," he said. "Farming households associate into a group and groups associate into a co-operative. Co-operatives strengthen co-operation with banks and distributors."

Cu called for more support from the agriculture ministry in terms of financing and technology.

For example, Cu said the ministry should provide about 50 million VND (2,200 USD) for each co-operative's start-up and help them apply biotechnology in their production for higher productivity and lower costs.-

Work begins on a steel sheet plant in Nhon Hoi economic zone

Construction of the Hoa Sen Nhon Hoi steel sheet plant commenced on January 8 at Nhon Hoi Economic Zone, in the central province of Binh Dinh.

Covering 12.4 hectares of land, the plant is an investment by Vietnamese steel producer Hoa Sen Group at the total cost of 2 trillion VND (89 million USD).

Expected to commence operations in June, 2017, the plant will supply 180,000 tonnes of galvanised steel sheet and zinc-aluminium alloys, 90,000 tonnes of colour-coated steel sheet and 200,000 tonnes of cold rolled steel to the market.

In addition, the plant will help diversify industrial products in the province while creating jobs for about 400 local labourers.

At the ground-breaking ceremony, Chairman of the provincial People’s Committee Ho Quoc Dung highlighted that in the past few years, the province has enhanced its promotional activities and attracted a line-up of investment projects in tourism, trade and services.

Hoa Sen Nhon Hoi steel sheet plant, a large-scale industrial production project in the locality, will give momentum to other industrial investment projects landing in the province, he added.

HCM City: Banks continue to support businesses

Dozens of banks in Ho Chi Minh City have registered to provide loan packages worth 211.5 trillion VND (9.3 billion USD) and 15 million USD to support businesses in 2016.

They also pledged a short-term VND interest rate of 7 percent per annum, and a long-term rate ranging from 8-10 percent per annum, the municipal Department of Industry and Trade reported at a conference in the city on January 8.

Vice Chairman of the municipal People’s Committee Le Van Khoa said the city is striving to raise the banking loan support to 300 trillion VND (13.2 billion USD) in 2016, a five fold increase against the previous year.

The local departments and sectors will work to more effectively implement the programme connecting banks and businesses in 2016-2020, furthering assistance for small and medium-sized enterprises in production and support industries, he said.

Deputy Director of the State Bank of Vietnam’s branch in HCM City, Nguyen Hoang Minh, cited that banks had registered over 173.2 trillion VND (7.6 billion USD) under the programme to support businesses in 2015 - 2.89 times above the yearly target.

Deputy Governor of the SBV, Nguyen Phuoc Thanh, said the programme has helped forge links between banks and businesses, citing commercial banks have pledged thousands of billions of VND in loans – in partucular soft loans.

He suggested the SBV-HCM City branch, along with commercial banks, should actively get involved in the programme - to help businesses extricate difficulties and reduce the burden on local budgets.

He recommended lowering interest rates for old loans, while increasing credit limits and restructuring debts.

Dong Nai runs 860 mln USD surplus in wood trade

Wood export in the southern province of Dong Nai totaled 1.2 billion USD in 2015, up 17 percent from 2014, according to the provincial Statistics Office.

The figure also marked a trade surplus of 860 million USD, considering that the province imported 337 million USD worth of wood materials for processing.

The locality’s major importers are the US, Europe, Japan and the Republic of Korea.

According to the provincial Department of Industry and Trade, the province is home to over 618 firms making wooden furniture and handicrafts, accounting for 27 percent of the country’s wood shipments.

Phan Van Binh, Chairman of the provincial Wood and Handicraft Industry Association, said the association has helped with updating market information, developing a value supply chain and building a 75ha Thien Tan industrial park, where wood, handicraft and support industries set up plants on 50 hectares.

The department forecast that 2016 will be a banner year for wood exporters thanks to further tariff cuts brought about by a series of signed free trade agreements.

The province’s export turnover was estimated to reach over 14 billion USD in 2015.

Over the past five years, Dong Nai’s economy has grown by an annual average of 12 percent. The locality hosted more than 1,200 foreign-invested projects from 42 countries and territories and over 19,500 domestic firms.

Agribank aims 18 percent growth in loans

The Vietnam Bank for Agriculture and Rural Development (Agribank) targets a loan growth of 18 percent and a bad debt rate below 3 percent in 2016.

The bank which lends mainly to the agriculture sector – expects agri-business to continue to count for the majority, or approximately 70 percent, of its total outstanding loan balance.

It is also set to raise revenue from its deposits and service fees: by 11-13 percent, and 17 percent, respectively. Overall, pre-tax profit is expected to reach 4 trillion VND (178 million USD) this year.

Additionally, the State-owned bank plans to focus on improving its performance and competitiveness, expanding retail banking and offering higher-quality services, in a bid to sustain its current growth.

Deposits at Agribank were pegged at more than 804 trillion VND in 2015, an increase of 16.5 percent year on year, surpassing forcasts, Agribank General Director Tiet Van Thanh said.

It provided 670 trillion VND in loans last year, about 71 percent of which were for agriculture while the bad debt rate was reduced to 2.01 percent.

RoK-invested firm receives preferential customs certificate

The Republic of Korea (RoK)’s ChangShin Vietnam company, in southern Dong Nai province’s Thanh Phu industrial park, was granted a preferential customs certificate on January 8.

With reaching the certificate, the firm is exempted from customs inspection for two years.

The Vietnam General Department of Customs said Changshin is so far the third firm operating in Dong Nai that has received this kind of certificate. The others are TeaKwang Vina and Vedan Vietnam.

According to the Dong Nai Department of Customs, enterprises can claim a preferential customs certificate if they satisfy certain conditions, such as a turnover of at least 100 million USD a year for import-export companies, a minimum turnover of 40 million USD for exporters of made-in-Vietnam goods, or a turnover of at least 30 million USD for exporters of farm and aquatic products produced in Vietnam.

ChangShin Vietnam, which manufactures Nike shoes for export, employs more than 23,400 workers, producing 93,000 pairs of shoes a day. The company’s total export turnover reached over 420 million USD a year and has an annual sales growth of 35 percent.

The firm is one among of nine RoK companies in Vietnam who have received the preferential customs certificate.-