DGW announces IPO price for August debut

Digiworld Corp (Digiworld), the IT product distributor, has announced that its initial public offering (IPO) will be held on August 3 at the HCM Stock Exchange with the code DGW.

In a road show to introduce the company to investors in HCM City, Digiworld said the IPO would offer 23.5 million of shares at the price of VND52,000 (US$2.3) each.

For the first half of this year, the company announces that the CEO and his family own 49.75 per cent of the company's stakes. Employees and key staffs own 37.06 per cent. Foreigners held 12.56 per cent and treasury shares are 0.64 per cent.

Speaking about the growth strategy, CEO Doan Hong Viet said the company wanted to become a billion-dollar-revenue company by 2020.

To reach the goal, the company this year has continued to focus on mobile phones, laptops and tablets, and office appliances.

Next year, along with traditional business, the company will develop e-fulfillment and enterprise solutions. Expansion and distribution of other products will be continued from 2017.

Viet said that Digiworld established in 2003 would form joint-venture businesses with producers to ensure product supply and exclusivity of product distribution.

The company is in negotiations with network providers in the country to design packages that give customers more added value.

Co-operation with e-retailers will also be another focus in order to increase sales, Viet said.

In 2014, the company reached a net revenue growth of 59.3 per cent. The net profit rose 2.5 times compared with 2013 to VND128 billion ($6 million).

Sembcorp launches global logistics hub in Vietnam

Sembcorp Industries – a leading energy, water and marine group –  based out of Singapore, has opened a logistics hub located at the Vietnam-Singapore Industrial Park in the port city of Hai Phong.

The company has invested US$7.9 million in the facility designed to enhance product delivery to global markets including the US, Europe, China and India as well as customers across the Southeast Asian region.

"The establishment of the logistics hub in the City of Hai Phong is a reinforcement of our global master distribution strategy and a reflection of our continuing commitment to our customers,” said Semcorp’s general director Goh Puay Guan.

To date five buildings have been built, providing nearly 15,000 square metres of warehouse space for Sembcorp and the 32 other businesses currently operating in the industrial park.

Sembcorp has plans to construct an additional 11,000 square metres of warehouse space to meet the needs of future tenants, which will provide huge advantages for the economic development of north Vietnam, said Guan.

Test run underway at Nhan Co bauxite ore plant

The Nhan Co bauxite refinery plant in the Central Highlands province of Dak Nong is running test productions through the end of September, said Head of the project’s management board Nguyen Thanh Liem on July 30.

Constructed within a 65-hectare mine, the plant is designed to process more than 1.8 tonnes of ore each year.

Ore reserves at the mine are estimated at around 60 million tonnes, capable of supplying bauxite for the aluminium production plant for 30 years.

The bauxite plant was initiated by the Vietnam National Coal and Mineral Industries Holding Corporation Limited (Vinacomin) on September 15, 2013 at a total cost of 900 billion VND (41.2 million USD).

It consists of an ore refinery plant and a 5-kilometre conveyor belt covered by corrugated iron to protect the environment.

Once fully operational, the plant will offer about 150 employment opportunities for local residents, including those from ethnic minority groups.-

IIP rises 9.9% in seven months

Viet Nam's Index of Industrial Production (IIP) posted 9.9 per cent year-on-year increase in the first seven months of the year, according to the General Statistics Office (GSO) yesterday.

The GSO said the IIP rose for both, in production as well as consumption. Consumption in manufacturing and processing sector accounted for 80 per cent of the total index, increasing by 15.1 per cent over the same period last year.

The automobile production registered the maximum increase of 29.8 per cent, followed by electronic products and computers with 28 per cent, leather products 21.8 per cent, paper products 12.7 per cent and electricity production and distribution 11.5 per cent.

Several industrial products saw a sharp increase, including automobiles with 106,400 units (increase of 58 per cent), mobile phones with 121.8 million (increase of 56.9 per cent), TV with 2.5 million units (increase of 40.4 per cent), leather shoes 177.2 million (increase of 19 per cent) and electricity 91 billion kWh (increase of 12 per cent).

However, some other industrial products registered a rather modest increase due to a plunge in consumption. Cement production rose by 9 per cent to 37.2 million tonnes, liquefied gas 421,600 tonnes, beer 1.83 billion litres and seafood processing 1.15 million tonnes.

The office said the inventory index in the seven month period rose by 10 per cent – the lowest level so far this year, thanks to an increase in both production and consumption.

Footwear exports make big gains

Vietnamese footwear exports rose 21.2 per cent against the same period last year to more than US$5.85 billion for the first six months of the year, the General Department of Customs reported.

The figure is expected to reach $14 billion by the end of the year, according to the Viet Nam Leather, Footwear and Handbag Association (Lefaso).

Of the figure for the first half of the year, exports to the US increased by 30.2 per cent to $2 billion, equal to export earnings from the EU, which saw a growth of 17 per cent.

The EU continues to be the largest importer of Vietnamese footwear.

In 2009, footwear exports to the US totalled about $1 billion, half of the value earned from the EU market.

Truong Thi Thuy Lien, director of Lien Phat Footwear Company in the southern province of Binh Duong, said footwear exports rose in the second quarter of this year.

Most footwear enterprises had orders up to the end of February next year, she said.

Both foreign direct-invested and local businesses are focusing on the US market, she added.

According to statistics from the Office of Textiles and Apparel at the US Department of Commerce, the US imports about 78 per cent of footwear from China and 12 per cent from Viet Nam.

However, footwear imports from China have fallen steadily since 2010, the US office said.

Meanwhile, imports from other Asian countries, particularly from Viet Nam, have increased sharply in recent years as US businesses try to become less dependent on Chinese imports.

Nguyen Duc Thuan, president of the Viet Nam Leather and Footwear Association, said the industry was likely to fulfill its target of $14.5 billion in exports this year, with an annual growth of 20 per cent set by the Ministry of Industry and Trade.

Last year, Viet Nam exported $10.34 billion worth of footwear, a rise of 23 per cent over the previous year, making up 6.89 per cent of the country's total exports, according to the Ministry of Industry and Trade.

In December, footwear exports totalled $1.08 billion, an increase of 13.8 per cent over November.

Last year, Vietnamese footwear was exported to more than 40 markets, including the US, EU, Japan, China and South Korea.

Of the markets, footwear exports to the US registered a yearly growth rate of 26.7 per cent to $3.33 billion.

The US market alone made up 32.2 per cent of the country's total footwear exports last year.

According to Lefaso, the footwear industry's competitive capacity has increased because of improvement in technology and equipment.

Farm sector catalyst for change

The agriculture and rural development sector would promote restructuring of State-Owned Enterprises (SOEs) and withdrawal of capital from non-core business in the second half of this year, according to the Ministry of Agriculture and Rural Development.

At the ministry's conference in Ha Noi yesterday on reviewing the restructuring of SOEs in the agricultural sector in the first half of this year, a representative of the ministry said 12 groups and corporations in the sector will be equitised by the end of this year.

In the first half of this year, the ministry also continued promotion of equitisation for the Viet Nam Vegetable, Fruit and Farming Product Corporation and the Viet Nam Tea Corporation.

The ministry expects to approve equitisation plans for the Viet Nam Forest Corporation and the Agricultural Material Corporation in the last quarter of this year and the Southern Food Corporation in the first quarter of 2016.

It also reported that it completed equitisation of nine corporations and companies in 2014.

However, Do Van Nam, head of the ministry's Enterprise Management Department, said withdrawal of capital from non-core business and selling of state's shares at agricultural enterprises was slower against schedules.

By June 30, the enterprises in the agricultural sector withdrew VND1.718 trillion (US$78.8 million) in total, or 34 per cent of the target. They will continue withdrawing the entire capital of VND3.31 trillion ($151.8 million), the ministry said.

Nam said the enterprises have faced many challenges that could affect their plans to withdraw capital from non-core business, including low price of shares and lower offer price of shares against their face value. Some enterprises had even made initial public offers of shares but it did not attract investors.

Le The Chi, deputy general director of the Viet Nam Coffee Corporation, said the corporation must withdraw its capital from six companies but those companies have small capital of VND40 billion ($1.8 million) each. Therefore, investors were not interested in them and the corporation was facing difficulty in withdrawing its capital from them.

To deal with the difficulty in withdrawal of the capital from non-core business, the government permits the enterprises to sell share lots and shares for labour, Nam said.

Minister of agriculture and rural development Cao Duc Phat said enterprises must have specific plans to promote withdrawal of their capital from non-core business, especially state-run farms.

Bond issuance raises concerns

Securities firms have been issuing bonds to increase their capital in an attempt to prepare for new opportunities in the local stock market, online newspaper stockbiz.vn reported on Tuesday.

However, only those with strong financial conditions, good profiles and efficient operations can take such action.

Such companies have made bond issuances over the last year as part of long-term development plans – Sai Gon-Ha Noi Securities JSC issued VND250 billion (US$11.46 million) worth in July, and Vietcombank Securities JSC with VND200 billion ($9.17 million) worth in October of last year. Other companies in this sector said they also plan to do so. Military Bank Securities JSC plans to raise VND600 billion ($27.5 million) via bonds and Saigon Securities Incorporation (SSI) set a target of VND1-1.5 trillion ($45.87-68.8 million) for this year.

Improvements in the local securities market, due to the positive settling in of new Government policies, helped give rise to the trend.

The VN-Index gained 7 per cent between June 24 and July 24 after Decree 60 was issued last month. The decree also further opened the local market to overseas investors by increasing foreign ownership levels in Vietnamese companies.

In addition, Decree 36, issued by the State Bank of Viet Nam last November, also limits brokerage firms from taking loans from banks. This has encouraged securities companies to improve their financial health to better compete in the market.

Strengthening of securities firms has also been credited for the rise in bond issuance. With improved financial health, the firms have been able to provide new services and products to investors such as derivatives trading and reduced settlement times.

But many are warning companies to be careful with bond issuance, as it has more requirements than bank loans that can easily change the terms and value of their bonds.

Companies will have to actively seek customers and provide new products to avoid non-performing capital flow. If they don't, they would have pay interests to bond-holders and lose market shares at the same time.

Local experts say that practically all foreign securities firms have the capitalisation to equal net capitalisation of all Vietnamese firms. Experts warn that while there are many securities firms on Viet Nam's market now, many of them will disappear due to poor business operation.

Mekong Delta to boost tra fish production, consumption

Government agencies have been asked to help farmers identify the most desirable tra fish products in local and overseas markets, in an aim to increase production and consumption.

Ngo Quang Tu, head of the Department for Agriculture, Forestry, Aqua-culture and Salt Production, said: "Unlike the favourable conditions of ‘the only product in the market' of previous years, Viet Nam's tra fish products now face harsh competition from other kinds of fish from many countries."

Addressing a conference held by the Viet Nam Tra Fish Association and Viet Nam Chamber of Commerce and Industry (VCCI) in Can Tho on July 30, Tu said that Viet Nam had great potential for tra fish products, which have been exported to 151 countries and territories.

He said that 90 per cent of Vie t Nam's tra fish exports were tra fish filets.

Vo Hung Dung, secretary of the Viet Nam Tra Fish Association, said that as of June 30, the Mekong Delta had an additional 1,959 ha under tra fish breeding, up by 0.21 per cent compared with the same period last year.

The catch of tra fish was estimated at 516,140 tonnes, a year-on-year increase of 1.22 per cent.

Total tra fish exports in the first five months amounted to US$616.5 million, down by 7 per cent compared with the same period of 2014.

The price of tra fish used as materials for processing plants ranged from VND21,000 to VND24,500 per kg in the first five months of the year.

In June 2015, tra fish prices dropped to VND19,000 – VND20,000, causing losses for farmers.

Some 10,000 tonnes of tra fish products are sold in the domestic market annually.

Nguyen Van Hung, director of the Dong Thap-based tra fish processor Hung Ca Co. Ltd., said to ensure a stable supply of tra fish for the company's processing lines, his firm had collaborated with 306 tra fish breeders in the Mekong Delta for the last nine years.

Under this partnership, Hung Ca Co. has provided breeders with animal feed and tra fish breeding technical know-how.

Hung said the slump in tra fish prices has caused losses for 40 of these tra fish breeders. Some of them have gone bankrupt.

Hung Ca Co has provided loans to help the tra fish breeders recover from their losses.

Hung said the banking system would provide a helping hand by suspending or reducing debts suffered by the tra fish breeders.

He said that tra fish breeders would no longer dump their products if they could recover from bankruptcy and become part of a tra fish production line.

New coffee processing plants not to be built in 2020-2030: Ministry

The Ministry of Agriculture and Rural Development has laid down a policy to focus on technology innovation and not to build new coffee processing plants from 2020-2030.

The number of coffee processing firms has reached 239 in Vietnam so far, producing 1.24 million tons of coffee products per year, accounting for 96 percent of the country’s total output.

However, they have mainly processed coffee beans for exports bringing low added value. Coffee powder and instant products hold only 4-6 percent of the total output.

The ministry would study to increase coffee products, improve quality and intensify the connectivity between coffee growers and processing businesses for sustainable development.

Professionals optimistic about AEC

Most Vietnamese professionals see integration into the ASEAN Economic Community (AEC) as a good opportunity to develop their career, according to a survey conducted by online recruitment service VietnamWorks.

“Ninety-two of our survey respondents said Vietnam joining the AEC is a good thing for Vietnamese employees,” said Mr. Gaku Echizenya, CEO of VietnamWorks.  

There were two commonly-cited benefits claimed by survey respondents about the integration, with 52 per cent believing they will have more opportunities to work with and learn from foreign experts from other ASEAN countries, and 46 per cent saying the international workplace culture will transform Vietnam’s workplace culture for the better.

Seventy per cent of those who support AEC integration think Vietnamese professionals have enough skills to compete with foreign talent.

“With these optimistic perspectives coming from a relatively young working population, I believe Vietnam’s human resources will improve tremendously once the country completes its integration into the AEC,” Mr. Echizenya said.

Among those who didn’t believe that AEC integration was a good thing, 84 per cent said the biggest setback would be that there will be more English-speaking competitors in Vietnam’s labor market.

The second most commonly-cited setback was a concern that employers may have leverage to cut salaries and benefits because there would be more jobseekers.

These perspectives reflect the fact that a small group of Vietnamese professionals are less confident about their English skills as well as their negotiation skills in terms of salary and benefits.

This lack of confidence is even more visible as 69 per cent of this group believes that Vietnamese professionals do not have enough skills to compete with foreign workers once Vietnam joins the AEC.

In terms of supply and demand, Ms. Nguyen Thi Van Anh, Managing Director of executive search firm Navigos Search, said that among the eight industries that were allowed free labor movement within the AEC Vietnam’s domestic market can only accommodate human resources demand in General Accounting and Manufacturing Engineer positions. “For Senior Engineer positions, especially in the IT industry, we still fall short of demand,” she said.

VietnamWorks’ survey was conducted on 2,500 professionals at all job levels and from companies of all sizes in Vietnam.

TPP negotiations enter key phase

A ministerial negotiation round on the Trans-Pacific Partnership (TPP) taking place in Hawaii and to end tomorrow is expected to have a positive outcome. Minister of Industry and Trade Vu Huy Hoang is attending the negotiations.

The negotiation round is considered a final opportunity for the 12 participating countries to reach an agreement this year, before the US presidential election campaign gets fully underway.

The round will focus on existing difficult issues such as intellectual property rights, operations of enterprises, the labor market, and environmental protection. A key point is whether the US and Japan, the two largest partners, will close the negotiations with a resolution for their remaining differences on market access for farm produce and automobiles.

TPP negotiations were at a standstill until the US Congress passed a Trade Promotion Authority (TPA) law, allowing President Barack Obama to more easily negotiate with limited interference from lawmakers.

Negotiations on the TPP began in 2005 and now involve 12 countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US, and Vietnam.

Once signed the TPP will be a free trade area with 800 million people, accounting for 30 per cent of global trade and nearly 40 per cent of global economic output.

Mobile Marketing Forum on way

The Mobile Marketing Association (MMA) Forum and the Smarties Awards 2015 will be organized by MMA on October 30. Held for the last three years in Vietnam, the MMA Forum has connected some 1,000 marketing directors, enterprise owners and communication - PR agencies and mobile phone marketing companies in the country.

The Smarties Awards 2015 honor mobile phone marketing campaigns. A global award held for the last eleven years, this is its second holding in Vietnam, with 21 categories in Mobile Marketing.

MMA also organized the Go Mobile First event on July 30 in Ho Chi Minh City, which heard that Vietnam has 24 million Facebook users who look at their mobile phone about 150 times a day.

Vietnam’s population is 90 million but there are 128 million mobile phone subscriptions, 40 million internet users, and 28 million of social network accounts, mostly Facebook. Of these 28 million Facebook users, 24 million use their mobile phone to access the network.

The numbers of internet users and mobile phone users in Vietnam shows that consumer habits are changing, so enterprises are also changing their marketing methods, MMA said. Google and Facebook are the brightest stars, competing to develop content and interaction on mobile phones to develop new consumer habits.

At Go Mobile First, Google said that 71 per cent of internet users use it for private reasons and 77 per cent as a tool for researching information. It also said that 36 per cent of internet users use a device when watching TV, of which 90 per cent use a smartphone.

Bong Sen eyes 51% of Daeha Trade Center

The Bong Sen Corporation, a subsidiary of the Saigon Tourist Holding Company, will hand over VND3.6 trillion ($165.6 million) to purchase 51 per cent of the Daeha Trade Center in Hanoi.

Bong Sen will sell 163,172,944 of its own shares at VND10,000 ($0.46) each to fund the purchase. The total value of the Daeha Trade Center after the purchase will be VND7.1 trillion ($326.6 million).

The Daeha Trade Center has three buildings, including the Daewoo Hotel, an apartment block, and an office block, in Kim Ma Street, Ba Dinh district.

In 2012 the Hanel Company Limited acquired a 70 per cent share in Daeha, but the value of the deal was not disclosed.

Bong Sen Corporation had total assets of VND1.12 trillion ($51.52 million) at the end of 2014. Net revenue for the year reached nearly VND402 billion ($18.49 million) and profit before tax nearly VND91 billion ($4.18 million).

Forum discusses business opportunities in Kazakhstan

A full picture of the Kazakhstani market and its business opportunities was unveiled at a forum held in Hanoi on July 30.

Vietnam and Kazakhstan signed a number of framework agreements on economic, trade, diplomatic, education, investment, labour and energy cooperation in recent years, said Vice Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) Doan Duy Khuong.

According to the Vietnam General Department of Customs, trade between the two countries was almost 230 million USD in 2014, with 219 million USD from Vietnam’s exports, up 42 percent year-on-year. Exports consisted primarily of cell phones and electronic spare parts, machinery and farm produce. Imports, meanwhile, doubled, including ore and minerals.

Under the recently-signed free trade agreement between Vietnam and the Customs Union of Russia, Belarus and Kazakhstan, Vietnam will enjoy export tariff incentives for farm produce, seafood, garments, footwear and wooden furniture.

Vietnam will also open markets for farm produce, machinery, equipment and transport vehicles.

Other commitments cover services, investment, intellectual property, competition, trade protection and dispute settlement in line with World Trade Organisation regulations, Khuong said.

Rapil Zhoshybayev, First Deputy Foreign Minister of Kazakhstan and Head of the EXPO-2017 trade promotion delegation, informed that Kazakhstan is currently ranked 77th in the World Bank’s Doing Business 2015 annual report and 50 th in the world’s national competitiveness rankings.

The country is focusing on metallurgy, chemicals, oil and gas, mechanical and food technologies and construction materials, among others.

On the occasion, Zhoshybayev also introduced the Astana EXPO-2017 themed “Future Energy”, which is expected to host exhibitors operating in eco-friendly energy sources.

The forum was co-hosted by the VCCI, the Kazakhstani Embassy in Vietnam and the Astana Expo 2017 organising company.

Works begin on two Panko textile-garment plants

Construction of the Panko Tam Thang textile-garment plant and Ducksan Vina garment accessory plant commenced on July 30 at the Tam Thang industrial park in Tam Ky city, the central province of Quang Nam.

The Republic of Korea (RoK)-invested Panko Tam Thang plant will be built at a total cost of 70 million USD and cover 33.5 hectares of land. Once operational, the plant will create jobs for 15,000 labourers.

Meanwhile, the textile-garment-dyeing Ducksan Vina factory, invested with 10 million USD across nearly 7 hectares, will produce 4,800 tonnes of fibre and 4,800 tonnes of cloth while dyeing 4,800 tonnes of cloth every year. Some 500 labourers are expected to work in the plant.

At the ground-breaking ceremony, Chairman of the garment-textile Panko Group and Chairman of the RoK- Vietnam Friendship Association Choi Young Joo said that in addition to the production line, the group will build gymnastics and cinema facilities to serve worker and local resident demands.

He added that through support from local authorities, the group is pushing the plant construction forwards in a bid to deliver the first products to domestic and foreign customers by the end of 2015.

Vietnamese fine arts reforms amid integration

A host of solutions to shape up the Vietnamese fine arts market, which is less developed than its regional peers, were put forward at a workshop in Hanoi on July 30.

Dominant discussion topics included State incentives for fine arts-sponsoring corporations and businesses, operations of museums and galleries, the spread of art in daily life, policies for private art collections and museums, market analysis from perspectives of art fair buyers and international experiences.

Participants pointed out that the fine arts sector is losing valuable pieces to foreign buyers while art appraisal processes have yet to involve well-regarded experts, critics and museums.

Amid the current economic and cultural integration, the research and management of the fine arts market is an urgent issue, they said, adding that improving art quality and popularity is a major goal for the next 10 years.

To that end, several opinions called for establishing a fine arts foundation and a Vietnam gallery association, installing art in public spaces, opening appraisal and auction centres, offering tax incentives to sponsors, and facilitating the opening of private museums.

The event was hosted by the Ministry of Culture, Sports and Tourism’s Department of Fine Arts, Photography and Exhibition.

Industrial cooperatives share success stories

Representatives from agricultural cooperatives gathered at a forum in Hanoi on July 30 to share experiences and difficulties and discuss measures to enhance the efficiency and quality of their operations.

Speaking at the event, Deputy Head of the Department of Cooperatives and Rural Development Le Duc Thinh said through the forum, State agencies hope to hear cooperatives’ proposals on policies and mechanisms to boost the cooperative economy.

The cooperatives divided into small groups to review different topics, including cultivation, animal breeding, credit, farm produce sales and equipment supply.

According to Nguyen Phi Duc, Director of the Duong Lieu service-trade-agriculture cooperative in Hanoi’s Hoai Duc district who chaired the discussion group for farm produce sales, the key factor in the success of agricultural cooperatives is understanding market trends and the tradition of each region.

Proper application of production and sale contract regulations is also necessary, he said. Duc highlighted the need for close coordination of cooperative members and the connection between farmers and businesses.

He also held that cooperatives should focus on improving product quality towards national and international standards while forming sales chains and investing in new equipment.

Dang Van Son, Director of the Hai Yen agro-fishery cooperative in Quang Ninh province, said timely investment support policies as well as transparency will help cooperatives develop and be successful.

However, cooperative representatives pointed out that limited capital and a lack of synchronous technological application are significantly affecting the growth of cooperatives.

Son proposed that cooperatives set up linkages and share information and experience through forums. At the same time, State agencies should complete support policies and mechanisms for cooperatives in finance, training and technology.

Da Nang hosts EWEC Trade and Tourism Fair

The 2015 International East-West Economic Corridor (EWEC) Trade, Tourism and Investment Fair kicked off in the central city of Da Nang on July 30.

The six-day event brought together 200 businesses from Vietnam, South Africa, India, Cambodia, the Republic of Korea and China along with local and foreign trade promotion agencies.

According to Hua Tu Anh, Director of the city’s Trade Promotion Centre - the event organiser - the fair provides a good opportunity for enterprises in countries along the corridor to seek business partners and expand their markets.

Some 200 pavilions are displaying a variety of tourism products and services, trade and investment projects, consumer goods, electronics and information technology, food processing equipment, wooden products and interior decorations.

Conferences on trade and investment promotion and art performance programmes will be arranged in the framework of the event.

Initiated in 2006, the 1,450 km East-West Economic Corridor passes through four ASEAN nations - Myanmar, Thailand, Laos and Vietnam.

The agriculture and rural development sector would promote restructuring of State-Owned Enterprises (SOEs) and withdrawal of capital from non-core business in the second half of this year, according to the Ministry of Agriculture and Rural Development.

At the ministry's conference in Hanoi on July 30 on reviewing the restructuring of SOEs in the agricultural sector in the first half of this year, a representative of the ministry said 12 groups and corporations in the sector will be equitised by the end of this year.

In the first half of this year, the ministry also continued promotion of equitisation for the Vietnam Vegetable, Fruit and Farming Product Corporation and the Vietnam Tea Corporation.

The ministry expects to approve equitisation plans for the Vietnam Forest Corporation and the Agricultural Material Corporation in the last quarter of this year and the Southern Food Corporation in the first quarter of 2016.

It also reported that it completed equitisation of nine corporations and companies in 2014.

However, Do Van Nam, head of the ministry's Enterprise Management Department, said withdrawal of capital from non-core business and selling of state's shares at agricultural enterprises was slower against schedules.

By June 30, the enterprises in the agricultural sector withdrew VND1.718 trillion (US$78.8 million) in total, or 34 per cent of the target. They will continue withdrawing the entire capital of VND3.31 trillion ($151.8 million), the ministry said.

Nam said the enterprises have faced many challenges that could affect their plans to withdraw capital from non-core business, including low price of shares and lower offer price of shares against their face value. Some enterprises had even made initial public offers of shares but it did not attract investors.

Le The Chi, deputy general director of the Vietnam Coffee Corporation, said the corporation must withdraw its capital from six companies but those companies have small capital of VND40 billion ($1.8 million) each. Therefore, investors were not interested in them and the corporation was facing difficulty in withdrawing its capital from them.

To deal with the difficulty in withdrawal of the capital from non-core business, the government permits the enterprises to sell share lots and shares for labour, Nam said.

Minister of agriculture and rural development Cao Duc Phat said enterprises must have specific plans to promote withdrawal of their capital from non-core business, especially state-run farms.

Vietnam to reinvigorate trade and eliminate tariffs

The Ministry of Industry and Trade (MoIT) has unveiled that it is tearing down tariff barriers on imports from other ASEAN member countries as part of the formation of the world's seventh largest free-trade market.

In 2007, the 10 ASEAN member countries adopted the ASEAN Economic Community (AEC) blueprint, which set December 31, 2015, as the target date for the creation of a single market.

The AEC envisions a fully integrated economy with goods and services trade moving freely between the 10 ASEAN members and substantially all tariffs and quotas eliminated by the end of 2015.

“Vietnam actually began reducing tariffs in 2014,” said Luong Hoang Thai, an official of the Ministry of Industry and Trade (MoIT), and to date has lifted tariffs on roughly 1,706 tax lines.

Almost 97% of all tariffs will be gone by December 31 and the MoIT has until the end of 2018 to completely phase out tariffs on the remaining tax lines including steel, automobiles, and auto components, Thai underscored.

Thai said the AEC also calls for simplified regulatory trade frameworks to be put in place, complex customs procedures streamlined and other non-tariff barriers such as convoluted licensing and land acquisition requirements resolved by all member countries.

The AEC will be the seventh largest economic market in the world and many leading economists believe it could be the fourth largest market by 2050 if recent growth trends continue.

With over 600 million people, the AEC potential market is larger than the European Union (EU) and next to the People's Republic of China and India – it has the world's third largest labour force.

“Removing tariff barriers is good for the nation’s businesses, particularly very small and family owned businesses,” said Luong Hoang Thai, an official of the MoIT.

Thai stressed deep cuts in tariffs mean more ASEAN goods and services will flow into the economy and revitalize it by spurring domestic spending, pushing competition up and providing the nation’s consumers more choice.

“This is going to represent a great challenge for the nation’s domestic businesses,” said Ha Duy Tung, deputy head of the International Cooperation Department under the Ministry of Finance.

Other businesses owners have expressed concern that as more foreign businesses come to Vietnam they will be confronted with stiff competition in terms of quality, price and timely delivery of goods and services.

Ho Sy Truc, president of Hoang Mai Ltd Company, said domestic businesses will need to step up their game to compete in regional markets by improving labour productivity and ensure the quality of products to gain consumers’ trust.

Ho Chi Minh City ecotourism park project lies abandoned

An ambitious project to build the country's biggest park in HCM City has remained in limbo for years due to disputes over land compensation rates which led to slow ground clearance.

The $500 million Saigon Safari Park Project was intended to be Vietnam's largest eco-tourism attraction, focusing on wildlife conservation, display, and breeding of rare plants and animals. Plans included a zoo, night safari, botanical collection, natural history museum, a fauna and flora research centre, resort and other supporting facilities.

In 2004, 485 hectares of land were allocated for the project. However, slow site clearance and a complicated compensation process has seen the project be largely abandoned.

Doan Van Xuan, a local in An Nhon Tay Commune, said that the authorities and investors had not publicly announced the land compensation rates. "Many people filed complaints when they realised that the compensation payments were vastly different from household to household even though the land lots were pretty much the same," he said.

Project to build the country's biggest park in HCM City has remained in limbo

He went on to say that the current offered compensation rates were identical to those offered in 2004, at just VND75,000-150,000 per square metre. "That rate could have been enough in 2004 to buy a new house, but not now," he said.

Chairman of HCM City Le Hoang Quan asked city inspectors and other agencies to review the case and deal with the complaints. He also reprimanded state agencies and investors for letting such a huge project run into such difficulties.

The local Department of Home Affairs has been asked to research ways to restart the project as soon as possible.

M&A gathering on horizon

The Vietnam M&A Forum 2015 will be held on August 6 in Ho Chi Minh City, evaluating trends in M&A and analyzing opportunities in Vietnam.

The Forum features five main activities: an M&A conference, an expo, a ceremony acknowledging typical M&A cases and M&A consultants last year, an M&A training course, and the release of a report summarizing M&A in Vietnam.

In the morning session of the conference a private meeting for deal makers will also be held. In the afternoon session three topics will be up for discussion. The first is on policy, such as amendments to the Law on Investment and the Law on Enterprises, which came into effect on July 1, and the government’s policies on opening up sectors to foreign investors.

The second topic is the prospect of new capital flows and opportunities in M&A. It will look back on the movement of M&A capital flows into Vietnam and assess future prospects, analyze the possibility of an M&A boom in the country, and assess the opportunities from the State-owned enterprise (SOE) equitization process and their divestments from sectors such as seaports, airports, and others.

The final topic is M&A experiences and strategies in Vietnam, discussing successful deals in Vietnam, building and developing a business for sale, new trends, and business opportunities for Vietnamese enterprises.

Speakers at the conference will include the President of the State Securities Commission, Mr. Vu Bang, Chief Supervisor of the State Bank of Vietnam, Mr. Nguyen Huu Nghia, Chairman of KPMG Vietnam, Mr. John Ditty, and Director of Mondelez Kinh Do, Mr. Stephane Gripon.

Citi Mobile Challenge Launched

Citi has launched the Citi Mobile Challenge in Asia-Pacific, part of its drive to foster digital and mobile innovation in banking.

The Citi Mobile Challenge is a next-generation accelerator that combines a virtual hackathon with an incubator, a worldwide network of FinTech experts, and Citi’s unparalleled global sponsors and clients to discover solutions across more than 100 markets.

Developers from Asia-Pacific (including Vietnam) and around the world are invited to build innovative solutions that are capable of running on Citi’s digital platform globally.

Registration for the Challenge will begin on August 19 and selected participants will demonstrate their concepts at events in Bangalore, Hong Kong, Singapore, and Sydney.

“From credit cards to ATMs, Citi has a history of embracing new technologies to transform how it serves clients," said Mr. Francisco Aristeguieta, Citi’s Asia Pacific CEO. "In Asia, recent examples of Citi’s legacy of innovation include the launch of Citi Smart Banking and the Citibank Express – new innovations that have since been rolled out globally. Asia is home to a fast growing FinTech community, and this initiative will help accelerate and uncover new and exciting opportunities for Citi to develop transformational approaches to banking."

A panel of industry experts and financial technology leaders will evaluate the solutions at each event.

Finalists compete for an opportunity to take their technologies into production with Citi’s support, a share of $100,000 in cash awards, and a suite of services from Citi Mobile Challenge sponsors, including the opportunity to participate in accelerator programs and receive mentoring, office space, and investment.

An Cu picks up Hoa Binh International Tower

The An Cu Co., a real estate management firm, won the recent public auction to acquire Hoa Binh International Tower, for VND735 billion ($33.68 million), Mr. Nguyen Huu Duong, Chairman of the Hoa Binh Group - the tower’s investor - confirmed with VET.

There were five companies in the auction, including the Hai Phat Investment JSC, the An Quy Hung Co., the Van Phu-Invest JSC, the Van Minh Import Export Co., and An Cu. The starting price was VND705 billion ($32.3 million).

Located on Hoang Quoc Viet Street in Hanoi’s Cau Giay district, the office for lease tower comprises 22 storeys and two basements on an area totaling 1,512 sq m. Annual turnover from office space for lease and advertising in the tower, which was put into operation in 2006, is estimated at around $3 million.

An Cu Co. specializes in distributing and leasing high-end real estate products in projects in Hanoi, including Imperia Garden in Thanh Xuan district, Palais de Louis in Cau Giay district, and the Gold Silk Complex in Ha Dong district, among others.

Tech start-ups look for support

The Connecting Vietyouth 2015 seminar on start-ups, especially technology start-ups, aimed at finding common ground between the government, investors, start-ups, and talented young people.

The average age of someone starting a new enterprise in Vietnam is 29, which is younger than in most other countries, such as the US, where the average age is 31. Of start-ups in Vietnam, around half are founded by people who have studied overseas.

Twenty technology start-ups of different sizes spoke at the mega pitch program at the seminar. Each had two minutes to introduce their products and recruit talented young people from 600 Vietnamese students abroad. The start-ups had the chance to narrow down the talent pool so that they could hire the best people at minimal cost and effort.

Starting a technology firm in Vietnam still involves addressing a number of issues, for the start-ups as well as for the investors. There are only a few sound ventures and the investment required is low. It can also be difficult for investors to exit. “There are only a small number of merged companies,” said Mr. Do Hoai Nam, CEO of SeeSPACE & Emotive. “Domestic companies that are able to buy start-ups in the field of technology are thin on the ground, such as Viettel or FPT, and they prefer to create rather than buy.”

Even the stock market is not a good point of exit, he added. The only choice for many start-ups in Vietnam is to be bought by foreign companies. But procedures for this remain complicated, with many steps and licensing to be done in both countries. Mr. Nam also proposed that Deputy Minister of Planning and Investment Dang Huy Dong review the legal framework to make it easier for technology start-ups.

Hoa Phat raises annual targets

The Hoa Phat Group adjusted its after-tax profit target for 2015 from VND2.3 trillion ($105.4 million) to VND3.25 trillion ($148.9 million), according to a decision released today by its Board of Directors (BOD). The expected dividend payment has also been increased, from 20 to 30 per cent.

In the first half of the year Hoa Phat earned VND1.9 trillion ($87 million) in revenue, reaching 83 per cent of the plan for 2015 as a whole. The BOD therefore increased its business targets for the reminder of the year.

Steel consumption saw strong growth in the first half, with Hoa Phat selling about 675,000 tonnes, a 52 per cent increase year-on-year. Sales of steel tube stood at 196,000 tonnes, a 44 per cent increase year-on-year.

The Group’s stock, coded HPG, was VND35,700 ($1.63) on July 27, increasing VND1,100. More than 2 million shares changed hands.

In the first three months total sales of steel in Vietnam reached 2.5 million tonnes, an increase of 25 per cent compared with the same period last year, according to the Vietnam Steel Association (VSA). Construction steel accounted for more than half, at 1.29 million tonnes, up 10 per cent against the first quarter of 2014.

Vietnam moves to improve business climate

Vietnam needs to complete economic market institutions while promoting administrative reforms and creating favourable conditions for foreign businesses to invest in the country to improve the business climate.

PhD Nguyen Dinh Cung, Director of the Central Institute for Economic Management (CIEM), made the statement at a conference held in Hanoi on July 30.

He underscored that the Government Resolution 19/2015 on main missions and solutions to improve the business environment defines three strategic breakthroughs and the acceleration of economic restructuring in state-owned enterprises, public investment, financial institutions and agriculture.

Laura McKechnie, Deputy Office Director and Economic Governance Officer from the Economic Growth Office of the United States Agency for International Development (USAID), highlighted that business climate improvement will make economic growth much more comprehensive.

Experts at the conference proposed a number of solutions to advance the business environment such as boosting public service socialisation, reshuffling public organisations, intensifying capitalisation and increasing the application of information technology in government management.

CIEM is collaborating with USAID to implement the Government Resolution 19/2015 to remove business environment barriers for enterprises.

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