Finland's PYN Elite Fund (Non-Ucits) this week bought more than 3.66 million shares of Duc Long Gia Lai Group JSC (DLG), increasing its holding to over 17.2 shares, a 10.18 percent stake.

According to the HCM Stock Exchange (HOSE), after the transaction, PYN Elite has become the third-largest shareholder of DLG, which specialises in construction and real estate development in the central region of Vietnam. The largest shareholder of the company is its Chairman Bui Phap and the second-largest shareholder is AnsenHoldco Limited.

Established in 2007 in the Central Highland Gia Lai Province, DLG works in the construction and interior production sectors. The company earned 533.9 billion VND (23.67 million USD) in revenue and 13.1 billion VND (580,931 USD) in before-tax profit in Q3, 2015.

Also in this week, the fund increased its shares in Hoang Huy Investment Services Joint Stock Company (HHS) from 11.23 million to 26.71 million shares, equal to a 11.46 percent stake, becoming the second-largest shareholder in Hoang Huy after Chairman Do Huu Ha.

HHS is the largest listed auto company, with market capitalisation of more than 2.58 trillion VND (115.21 million USD).

The Hai Phong-based HHS also has three associate companies working in the construction and real estate sectors. In the first nine months of 2015, HHS achieved total sales worth 2.8 trillion VND (125 million USD), while its net profit touched almost 417 billion VND (18.6 million USD), a rise of 228 percent and 521 percent, respectively, over the same period last year.

According to Bloomberg.com, Elite is an open-end fund incorporated in Finland. The fund's objective is significant value increases through active portfolio management, with focus on select companies and markets.

Seeking a higher return than equity funds with diversified global portfolios, the fund invests currently in Southeast Asia, with the main focus being Chinese and Vietnamese equity securities.

Vietnam becoming tech firm hub

The Saigon Hi-tech Park (SHTP) recently issued an investment certificate to Malaysia's United More SDN Bhd for a 21-million- USD plant to manufacture high-precision plastic products for smart TVs.

United reportedly hopes to supply the 2-billion-USD Samsung SEHC hi-tech complex, also at SHTP, which is likely to begin operations next month, producing TVs, phones and other products.

The Malaysian company is the fifth foreign-invested firms in the electronics supporting industry recently licensed, particularly after Samsung came to SHTP.

The other four are also suppliers of Samsung.

These are continuing signs of an increase in the number of foreign-invested supporting industry companies and suppliers in HCM City and neighbouring provinces.

This is similar to what happened at some other places in Vietnam where major players like Samsung, Microsoft, and LG began large electronics projects.

Late last year the Hai Phong Economics Zone granted investment licences for three Korean electronics supporting industry projects.

They are Hallacast Co ltd's 30-million-USD Halla Vina, HKT Co Ltd's 16-million-USD HKT Electronics Vietnam, and Woosung Holding & Plastics Co Ltd.

They will all soon begin producing components for smart phones and TVs such as plastic covers and frames to supply companies like Samsung, Microsoft, and LG.

Another electronics supporting industry player from the Republic of Korea, Orchem, also got a licence for a 2-million-USD plant in the northern province of Vinh Phuc.

Nguyen Tien Hanh, Director of the Vinh Phuc Investment Promotion Agency, told Dau Tu (Vietnam Investment Review) that in recent years the province has attracted a lot of foreign investment in the production of electronic components for Samsung.

Analysts said though the size of most electronics supporting industry projects is rather modest, their combined value has climbed into billions of dollars.

This means Vietnam could be becoming one of the world's workshops for production of electronic components.

Samsung's two plants in Thai Nguyen and Bac Ninh provinces ship 33 percent of all Samsung mobile phones sold world-wide.

Last year Samsung's exports of mobile phones and electronic products and components were worth 32.8 billion USD.

According to the General Statistics Department, Vietnam exported 15.8 billion USD worth of electronic products, including computers and components, up 4.56 billion USD from 2014.

A majority of the exports was by foreign-owned companies.

Prof Nguyen Mai, Chairman of the FDI Enterprises Association, said Vietnam is indeed becoming a global hub for mobile components.

Many Vietnamese companies are also intensifying investment in the electronics supporting industry, according to General Director of Qualcomm Vietnam, Thieu Phuong Nam.

"Vietnam will be the world's hub not only for producing electronic products but also possibly for designing them."

In a report last year the Ministry of Information and Communications said the presence of many major foreign electronics companies in the country created opportunities for the domestic IT industry to achieve rapid and sustainable development.-

Oil price scenarios developed to balance state budget

The Ministry of Finance has developed different scenarios that consider future impacts of oil price slumps for a more flexible management of the state budget in 2016, said Minister Dinh Tien Dung on January 14.

A fuel price plunge would deliver a blow to the country’s state budget as the collection from crude oil, which contributes about 10 percent to the budget, would drop.

According to the minister, the move aims to actively balance the state budget amid fluctuations of oil prices, even if the price drops to below 30 USD per barrel.

However, the slide in fuel prices also has positive impacts on economic development, creating more inputs into the state budget.

The ministry plans to improve its management in tax payments from domestic production and manufacturing, and exports, so as to make up for the losses from crude oil, Dung stated.

Public expenditure and debts will be under tighter control to eliminate waste, while financial transparency will also be enhanced, he added.

State budget collection totalled 989 trillion VND, or 44.1 billion USD, last year, up 14.6 percent from 2014. It surpassed the yearly target by 8.6 percent.

HCM City’s improved investment climate attractive to investors

Measures to improve the provincial competitiveness index’s (PCI) momentum in the southern metropolis of Ho Chi Minh City was discussed at a conference on January 15.

In 2015, the city ranked fourth nationwide in PCI, up 6 places compared to 2015, said Director of the municipal Department of Industry and Trade Pham Thanh Kien.

Kien said the city is attractive to investors due to its fairly good infrastructure, time-saving administrative procedures, and improved management modes.

Particularly, the city has the most abundant workforce in the country with 60 percent of population in working-age. Other costs, including labour, electricity and water, are two or three times lower than other cities in the region, he added.

The city is home to 250,000 domestic enterprises and 5,000 foreign invested businesses, and as many as 2,000 companies from 62 countries and territories worldwide, have established representative offices in the city.

The city’s annual growth velocity to 2020 is forecast at 7.5 percent per year, ranking fourth in the Asian region.

Kien said, in a bid to maintain and grow the city’s attractive investment climate to 2020, HCMC will actively promote high-tech, environmentally friendly and supporting industries.

The locality’s Industry and Trade sector targets to maintain an industrial manufacturing growth of 7 percent in 2016, while the rate of four key industries will be at least 7.2 percent. Total export turnover excluding crude oil is expected to grow 8 percent against 2015.

Phu Tho aims to boost sustainable exports

The northern province of Phu Tho is devising measures to realise its export target of 1.3 billion USD by 2020, up 12 percent annually.

Director of the Provincial Department of Industry and Trade Nguyen Manh Hung said the locality will review relevant legal frameworks, and focus on reforming administrative procedures in accordance with international commitments and integration.

Effort will be put on improving local investment and business climate to encourage domestic and international enterprises to invest in its key sectors such as furniture, textiles, tea products, leather footwear and handicraft.

The province will help enterprises use advanced technologies to raise productivity and product quality, thus enhancing their competitiveness in domestic and foreign markets.

Incentives will be offered for high-tech agriculture development, in processing, preservation, consumption and export, as well as for human resource training.

According to the department, over the past five years the province’s export value has almost doubled, from 478 million USD in 2011 to 844 million USD in 2015.

Phu Tho has the fourth biggest tea tree area in the country, with approximately 15,720 hectares, accounting for 12 percent of the total acreage.

It produces 117,000 tonnes of fresh tea per year and has shipped tea products to India, China and Pakistan.

HCM City’s banking system prioritises supporting businesses

Commercial banks in Ho Chi Minh City will focus on taking measures to provide small- and medium-sized enterprises and businesses operating in the supporting industry with low-interest loans.

The banks will collaborate closely with the city’s authorities to promote business support activities. They will also encourage capital flow into production activities by boosting demand stimulus programmes, and promoting linkages between banks and businesses.

The State Bank of Vietnam’s HCM City branch will continue its efforts to restructure the banking system and improve state management of currency and credit in the locality, said branch director To Duy Lam.

The branch will also focus on dealing with bad debt and improving the non-cash payment system, he added.

This year, the central bank’s branch set a goal of achieving credit growth of 16-18 percent and capital mobilisation growth of 17-19 percent. The branch also aims to cut bad debt to below 3 percent.

In 2015, capital mobilisation in the city reached over 1.566 trillion VND (nearly 68 billion USD), up 16.6 percent year-on-year.

By November 2015, bad debts in the city accounted for 4 percent of the total outstanding loans, a decrease of 15.6 percent compared with the previous year, or equivalent to 8.8 trillion VND (38 million USD).

Rubber industry suffers from falling prices

Plunging rubber prices will reduce profits of the Vietnam Rubber Group (VRG) in 2016, as heard during a conference held in Ho Chi Minh City on January 15 to review the company’s performance and set out new tasks.

According to Tran Thoai, VRG deputy general director, the continuous drop in natural rubber prices in recent years has negatively affected the group’s operations - despite its positive yields in other units.

The average price was almost 50 million VND (2,250 USD) per tonne in 2013, falling to 37.3 million VND (1,678 USD) per tonne in 2014 and 30.5 million VND (1,372 USD) in 2015. The year 2016 is expected to experience a further decrease of 5 million VND (225 USD) on each tonne.

As a result, the VRG’s revenue only met 98 percent of its set target last year.

The group is aiming for a 17.8 trillion VND (801 million USD) turnover this year, with projected profit above 2.5 trillion VND (112.5 million USD). It plans to reduce the volume of exploited latex in 2016.

Deputy Minister of Agriculture and Rural Development Ha Cong Tuan suggested the VRG capitalize on other potential units, such as rubber tree wood processing and tyre manufacturing.

The group should focus on the Japanese and Chinese markets, he said.

Japan is capable of importing 200,000 tonnes of high-quality rubber latex, of which Vietnam can supply just 700 tonnes. Meanwhile, China is the destination for more than 50 percent of Vietnamese latex shipped overseas.

The deputy minister ordered the VRG to re-evaluate its rubber development project in the northwest region, which has about 27,400 hectares of rubber plantation, and to promptly ask for relevant State support.

The northwest is a poor region, thus the project would help boost local socio-economic growth.

Deputy PM: realty market successfully restructured

Deputy Prime Minister Vu Van Ninh said the real estate market has been successfully restructured and more subsidised housing made available to the poor.

During a conference to launch the Ministry of Construction’s 2016 tasks in Hanoi on January 15, the Deputy PM also hailed the sector for its effective management of construction projects using the State budget and a new mindset for planning and urban management.

As 2016 is the first year for the five-year plan, he asked the ministry to continue improving the quality of planning and adopt a long-term vision for up to 50 years or even a century.

Minister of Construction Trinh Dinh Dung praised localities for making positive changes in planning that ensure harmonious and sustainable urban development.

From 2011 to 2015, the ministry submitted a total of 44 construction and 18 infrastructure master plans to the Prime Minister for approval. Sixty of 63 localities devised construction plans at the provincial level.

Last year, the sector classified and recognised 19 urban areas.

The northern province of Quang Ninh urged the ministry and relevant agencies to promptly complete planning for a coastal corridor linking with the northern city of Hai Phong in order to tap local and regional economic strengths.

Meanwhile, the Central Highlands province of Lam Dong expected more support from the ministry to launch a green urban village model in Da Lat, starting from the design to appraisal.

According to the minister, the sector is mostly concerned about refining mechanisms and designing the Law on Planning while improving State management on construction and accelerating administrative reform this year.

US retailer eyes partnership with women-run firms

Walmart, the largest supermarket chain in the US, wishes to support women entrepreneurs across the world, including Vietnamese ones, said Jocelyn Tran, Regional Senior Director for Walmart Global Sourcing in South-East Asia.

Tran spoke at a workshop on January 15 in Ho Chi Minh City , recently organised by Walmart and the Vietnam Trade Facilitation Alliance (VTFA) including the US Agency for International Development (USAID), the Vietnam Chamber of Commerce and Trade (VCCI), and the American Chamber of Commerce (AmCham).

Walmart will use more resources supplied by women-run firms while providing training services to enhance their capability and skills, she added.

Director of AmCham Vietnam in Ho Chi Minh City Herb Cochran said domestic enterprises are very proactive in seeking opportunities to integrate into the international arena.

Experts said Vietnamese suppliers need to meet international standards in order to enter the global supply chain.

Walmart representatives met with approximately 50 domestic firms on the sidelines of the event to talk about the potential partnership. Most of them are operating in garments and textiles, leather footwear, furniture and food.

Ha Nam attracts 1.4 billion USD in FDI

Foreign investors from 11 countries and territories have poured 1.4 billion USD into 155 projects in the northern province of Ha Nam so far, heard a meeting in the locality on January 15.

Meeting with representatives from over 100 enterprises foreign direct investment (FDI) operating in the locality, Chairman of the provincial People’s Committee Nguyen Xuan Dong praised FDI firms for their contributions to Ha Nam’s socio-economic development.

The local authorities granted investment licenses to 35 foreign-invested projects in 2015, Dong said, adding that FDI firms have contributed over 320 billion VND (14.4 million USD) to the State budget, making up 17.18 percent of the province’s budget collection.

Representatives from FDI enterprises asked the local authorities to pay extra attention to developing and upgrading transport infrastructure, and improving the efficiency of environment management and pollution handling.

Provincial leaders pledged to give their best support to foreign investors, helping them solve difficulties in their business and production.

Foreign investors and enterprises were urged to accelerate the implementation of their projects, renovate production technologies, and improve incomes for their employees in the coming year.

Ha Nam boasts eight industrial parks with a total area of 2,000 hectares, of which four are now operational. The local authorities intend to develop 18 industrial clusters with a total area of 500 ha.

The province plans to attract 180 trillion VND (8 billion USD) in investments between 2016 and 2020.-

Hanoi to export agricultural products to Japan, Malaysia

Hanoi will export agricultural products to Japan and Malaysia, under recently signed Memoranda of Understanding.

The MoUs were signed on January 14 between Director of the Municipal Department of Agriculture and Rural Development (DARD) Chu Phu My, representatives from Malaysian Fresh Farm SDN BHD and representatives from the Japanese Meika Shoji.

According to the documents, the sides agreed to enhance cooperation to help Hanoi export fruit to Malaysia and Japan.

The Japanese group committed to transferring technologies for all stages, from production and harvest to post-harvest preservation.

It will also provide relevant information about the Japanese market and its regulations for Hanoi.

Top 10 e-commerce businesses in HCM City

The Department of Industry and Trade in Ho Chi Minh City presented the HCMC eCommerce Award 2015 to 10 outstanding businesses in the field on January 15.

The awardees include the Thegioididong Joint Stock Company, Saigon Tourist, Nguyen Kim electronics shopping center, Tiki Corporation, Recess Company, Ltd., Zanado Corporation, DKT Technology, HotDeal, Lazada, and CareerLink.

Tiki Corporation (Tiki.vn), which runs a website selling books, electronics, appliances, fashion and stationery, won the “excellent” and “most popular” awards in 2015 selected by consumers.

Ha Ngoc Son, a member from the organising board, said the programme drew 56 businesses who run 66 e-commerce websites varying in operational scales, sectors, products and commercial services.

The programme aims to evaluate the efficiency of e-commerce application for businesses, said Deputy Director of the municipal Department of Industry and Trade Tran Vinh Nhung.

Participants to the programme are enterprises active in fields as varied as telecommunication, books, flowers, tourism services, industrial equipment, household utensils, and fashion items.

VAMC issues 243 trillion VND of special bonds

The Vietnam Asset Management Company (VAMC) issued over 234 trillion VND (10.4 billion USD) worth of special bonds as of 2015, according to VAMC General Director Nguyen Huu Thuy.

Last year alone, the company splashed out 111 trillion VND (4.95 billion USD) on purchasing principals, and issued special bonds worth 110 trillion VND (4.9 billion USD).

During 2013-2015, the VAMC joined hands with other credit institutions to recover debts totaling nearly 22.8 trillion VND (1.02 billion USD), and settle special bonds valued at over 11.7 trillion VND (521.5 million USD).

In addition, VAMC’s performance was also recorded in debts rescheduling and adjusting and selling collateral, among others, which made great contributions to decreasing the banking system’s bad debt ratio to 2.72 percent by the end of last November.

In 2016, the VAMC will continue handling bad debts by issuing special bonds while piloting activities related to guarantee, investment and capital contribution in orderr to support customers. It also continues conducting research and giving proposals to relevant authorities, helping complete legal frameworks, mechanism and policies on debt settlement and development of the debt trading market.

Rising deposit interest rate not affect lending rate

Recent rises in deposit interest rates are small and thus do not affect lending interest rate, according to the State Bank of Vietnam.

During the first half of January, three banks adjusted up their deposit interest rates by between 0.1-0.3 percent per annum for terms of over six months. The month before, 11 banks raised their deposit rates by between 0.1-0.5 percent per annum while two cut the rates by 0.1-0.3 percent per annum.

The adjustments are seasonal to meet payment demand during the peak season from now towards the Lunar New Year, the SBV said.

The deposit interest rates at banks currently average 4.5-5.4 percent per annum for terms from one month to under six months, and 5.5-7.2 percent per annum for longer terms.

Meanwhile, lending interest rates currently range from 6-9 percent per annum for short-term loans and 9-11 percent per year for longer terms at most banks.

The proportion of loans with interest rates at more than 13 percent per annum continues to drops, while that of loans with interest rates of under 10 percent per annum is rising.

Overseas Vietnamese invests in Czech property

The Czech economic magazine E15 has published an article on thriving Vietnamese expatriates’ real estate involvement on its front page.

According to the article, a group of Vietnamese businessmen in the Czech Republic bought a large building dating back to the 17 th century on historical Mala Strana Street. The former owner is Martin Nuhlicka, who is also co-owner of Hamé, a popular local food company. This is the first time such an investment has been made by Vietnamese investors.

The article quoted Michael Hynst, an expert at Svoboda & Williams real estate office, as saying there are Vietnamese banks working in the Czech Republic alongside an increasing number of wealthy Vietnamese expatriates having permanent residency in the European country. This leads to expectations for a property investment boom by the group, he noted.

Another example included in the article was the case of Le Hoang – owner of LHDI Company – who is investing in expanding Yasmin hotel, which lies in Prague’s central district.

In the retail sector – the traditional market for Vietnamese expatriates in the country – Vegan Land, a Vietnamese-owned vegetarian restaurant and store, recently opened inside the Fenix shopping mall.

Currently, the number of Vietnamese living in the Czech Republic is estimated at 65,000.

SBV policies aim to control inflation, stabilise growth

The State Bank of Vietnam (SBV) is to actively implement flexible monetary policies to help the country control inflation, maintain macro-economic stability and accelerate economic growth this year.

The Government has tasked the SBV to ensure this following a resolution on socio-economic development plans in 2016, in tight conjunction with ministries and relevant agencies.

It emphasised that exchange rate policies must stabilise the foreign currency market, and interest rate operations are to foster lending growth and quality. That required strict control of loans allocated in high-risk areas, such as real estate and investment projects breaking even in a long period of time.

It asked the central bank to intensify foreign currency and gold trading and continue to improve the national foreign reserve, besides stimulating non-cash payment.

Also, the SBV must closely observe developments in international monetary and financial markets to take suitable action against negative impacts that global economic integration may have on the domestic market.

Comprehensive reorganisation of credit institutions is to be continued to enhance their financial capacity and operational efficiency, and consolidate their security. Drastic intervention of the government is needed for thorough handling of fragile institutions.

Spontaneous mergers and acquisitions, reduction in the cross ownership, and divestments from non-core lines of business are encouraged for credit institutions.

The capacity and resources of the national bad loan settling firm, Vietnam Asset Management Company, is to be improved to help maintain the overall ratio of bad debts below 3 percent of the total outstanding loans in the economy.

SBV Governor Nguyen Van Binh said on the sidelines of an online government conference recently late last month that the economic growth target of 6.7 percent this year might push inflation out of control.

Last year's inflation rate was mainly due to external factors, especially the falling global prices of oil and other staples. This year's inflation would be around 3 percent if those factors were excluded.

Binh asked ministries, sectors and localities to keep a firm grasp on prices, particularly essential goods, while affirming that the central bank would strive to maintain overall interest rates or cut down average medium to long-term lending rates by 0.3 percent to 0.5 percent.

Credit growth of less than 20 percent would match the targeted economic growth rate, he added.

On January 4, the central bank began setting the official reference exchange rate every day, instead of maintaining a fixed rate for a longer period of time. It believed that the new mechanism would enable it to ensure its management objectives, while letting the rate move flexibly as per global monetary fluctuations.

In its resolution, the government also said that monetary policies must be properly combined with fiscal and other macro-economic policies for quality and sustained development.

Strong growth expected in resort market this year

The resort market in Viet Nam will see feverish investment this year due to its great potential, according to experts.

Nguyen Tran Nam, chairman of Viet Nam Real Estate Association, said the local economy has gained stability and growth in 2015, while the income of locals has also increased. Therefore, there is a demand among the people to own a property, which includes a resort product.

Meanwhile, the local market has launched many resort projects with large scale, synchronous infrastructure and reasonable selling prices, so the projects have attracted numerous local buyers, he said.

Development of the resort market in 2014 and 2015 was to kick-start a new development period in the local resort market because Viet Nam has many favourable natural, social and cultural conditions to develop the market, including nice beaches, a long coast and higher income, Nguyen Nam Son, chairman of Tanzanite International said. Tanzanite is an international real estate development company developing the Hamptons Ho Tram, a luxury resort development in Ho Tram, Viet Nam.

Meanwhile, a resort has become a new property product on the local market, and as the income of the Vietnamese increases so does their demand for tourism, he said. Those factors are favourable for the domestic resort market and ensure strong development in the next five to ten years.

Ngo Quoc Dung, deputy general director of HB Management, working for the development of New Hoi An City project, said Viet Nam is one of the countries with a high number holidays with about 138 days off per year, accounting for 40 per cent of total days in a year. Therefore, the local people need at least 690 million nights for accommodation each year.

In addition, Viet Nam attracts about seven million foreign visitors with high demand on resort products and high expenditure in tours, he said.

"Those are reasons of strong development of the local resort market in the future, and we will have no worries about lack of demand for resorts," Dung said.

Do Thu Hang, head of research and consultancy at Savills Viet Nam's Ha Noi branch, agreed that the demand of locals for tourism has increased recently.

"At present, there is a demand from the Vietnamese any time of the year and not just in the summer or the Tet festival," she said.

"High demand and stability of the local economy, as well as an increase in the confidence of buyers, will support the local resort market in developing further in the future because it is in the first stages of development. Therefore, the local resort market will continue positive development this year."

PM approves equitisation plan

Prime Minister Nguyen Tan Dung has approved the equitisation plan to transform the State-owned Viet Nam National Construction Consultants Corporation (VNCC) into a joint stock company on January 15.

After the equitisation, VNCC, under the Ministry of Construction, will have chartered capital reserves of VND357.7 billion (US$15.89 million), or 35,774,448 shares at a par value of VND10,000 (43 cents) per share.

Under the plan, the MoC, representing the State capital, will hold 18,244,968 shares, or 51 per cent in the corporation, while as much as 1,779,500 shares, or 4.97 per cent of the charter capital, will be sold to employees.

Further, MoC will decide upon the number and prices of shares to be sold during the initial public offering to strategic investors.

In 2015, the corporation earned revenues of VND1.128 trillion ($56.8 million), an increase of 8 per cent, and profits of VND70.85 billion ($3.14 million), up 13 per cent over 2014.

Plans also call for the corporation to divest partly or wholly in its core and non-core business.

Similar to VNCC, according to the local media, MoC plans the equitisation of four large enterprises under its umbrella in 2016. The SOEs of Song Da Corporation, Housing and Urban Development (HUD), Viet Nam Urban and Industrial Zone Development Investment Corporation (IDICO) and the Viet Nam Cement Industry Corporation (VICEM) have largely completed their corporate evaluations. Those companies were working with the State Audit of Viet Nam to assess their values before the figures are approved and announced by the ministry.

Currently, the ministry has nearly finished its target of having all SOEs equitized. Most enterprises under the ministry are large, with some firms reporting assets of over VND10 trillion ($445 million) and State ownership ranging from VND1 trillion to VND15 trillion.

Also, many companies own land use rights, offices, workshops, urban areas, industrial zones and none-core businesses.

Rubber confronts tough ‘16

The rubber industry expects another difficult year due to falling prices and low demand in the global market, the Viet Nam Rubber Group has said.

Speaking at a review meeting in HCM City on Friday, Tran Thoai, the company's deputy general director, said Viet Nam exported 1.14 million tonnes of natural rubber worth US$1.53 billion last year, an increase of 7.1 per cent in volume but a decrease of 13.5 per cent in value as prices dropped.

VRG accounted for 322,896 tonnes, falling just short of the target, he said.

The average price was around VND30.5 million ($1,358) per tonne last year compared to VND51.8 million ($2,307) in 2014, and it is likely to fall to around VND26 million ($1,158) this year, he said.

With natural rubber prices forecast to continue falling this year, the group expects revenue and profit to go down, he said.

"Earnings from other products like rubber wood, industrial rubber production and building industrial parks would increase this year, but it will be hard to make up the decrease from natural rubber exports.

"In addition, the group will continue to divest non-core operations, leading to revenue reduction this year."

Therefore, the group has set itself a revenue target of VND17.8 trillion ($792.8 million), or just 84 per cent of last year's figure, and a profit target of VND2.57 trillion ($114.4 million) compared to VND2.7 trillion last year, he said.

To achieve the targets, it plans to step up trade promotion to expand its share in both domestic and foreign markets.

The group urged its subsidiaries to try and cut production costs to around VND25 million per hectare.

Besides, rubber wood processing plants need to improve their performance and market share, it said.

Deputy Minister of Agriculture and Rural Development Ha Cong Tuan told the meeting that amid its current difficulties the rubber industry should speed up restructure to focus on rubber products with high global demand and developing in a sustainable manner.

Besides making efforts to boost exports to existing markets, companies should look for new markets and improve product quality, he said.

Japan is a promising market for Vietnamese rubber products and it can import 200,000 tonnes of high-quality natural rubber, while Viet Nam exported just 700 tonnes to it, he said.

Despite faced with many difficulties last year, the group managed to enjoy pre-tax profits of VND2.7 trillion, meeting 97.6 of its plan, with the main contributors being industrial rubber, industrial parks, and hydroelectric projects.

Profits from natural rubber exports accounted for only 8.7 per cent, Thoai said.

Domestic fruits meet demanding markets’ conundrum

Last year, Vietnam fresh fruits made headways into demanding markets like the US, Japan, Australia and the Republic of Korea, offering bright prospects for fruit exports in the coming years.

The Ministry of Agriculture and Rural Development (MARD) reported that Vietnam businesses exported more than 3 tons of fresh litchi and more than 100 tons of fresh longans to the US.

Additionally, more than 1,200 tons of dragon fruits, 10.6 tons of mangoes were shipped to Japan and more than 28 tons of fresh litchi to Australia.

New Zealand experts double-checked rambutan growing areas in Vietnam and granted licences to qualified Vietnam exporters while the RoK agreed to expand mango growing areas outside the Mekong Delta region aiming to bolster fruit exports.

Cement firms told to boost demand

General Director of the Vietnam Cement Industry Corporation (VICEM) Tran Viet Thang has asked member cement companies to boost domestic consumption by at least 10% this year.

Thang also required them to focus on increasing cement consumption in key markets and localities which have advantages in transportation, while maintaining export targets to support the domestic market.

Last year, exports of Vietnamese cement and clinker saw a sharp decline due to direct competitive prices from countries with large production volumes including China, Thailand, and Indonesia, thus leading to more fierce competition in the local market.

Cement production is much higher than demand. Total cement supply in the local market reached about 81 million tonnes while cement consumption demand was only about 53.18 million tonnes with an increase of 9.1%  against 2014, leaving a surplus of 30 million tonnes. As a result, cement producers had to reschedule or stop production.

To regulate and stabilise the local cement market, VICEM obtained a highest consumption growth rate of 19.16 million tonnes or rose 10.6 times against 2014. The joint-venture cement makers gained 15.57% with an increase of 9% and other cement producers received 18.44 million tonnes, up 7.8%.

Previously, Tam Diep and Vicem Hai Phong cement plants, both suffered from losses. In 2015, they started generating profits and the existing problems in production and business were already handled to make a sustainable development in the future. Other companies including Vicem Ha Tien, Vicem Hoang Thach, Vicem Bim Son, and Vicem But Son, in addition to Vicem Hoang Mai, also saw good business result in 2015.

Specifically, Vicem marked a successful business plan in 2015 with its profit double that of 2014.

General Director Thang said that if the central bank adjusts the exchange rate or devalues the Vietnamese dong it makes things very difficult for the cement industry. As a result, exports become extremely difficult. If Chinese yuan reduced US$10 per tonnes for clinker, leaving a surplus of 400 million tonnes of cement in the domestic market, it would have a negative influence on production goals in 2016.

As a result, Vicem had to minimise input costs leading to higher variable costs. If export price is lower than the variable cost, cement makers have to stop production.

To deal with problem, Thang has asked cement companies to try reducing clinker inventories. And cement makers were asked not to adjust their profit by reducing the income of workers. Cement makers have to seek their own way to increase the incomes of their workers, according to Thang.

Under its plan, Vicem will continue to implement restructuring two loss-making cement producers. They are the Ha Long and Song Thao cement plants. Vicem will also make asset valuation of these two plants and soon submit it to the Ministry of Construction for approval.

This year, Vicem has set a target of producing 17 million tonnes of clinker and 22 million tonnes of cement. Consumption of cement and clinker is expected to reach 24 million tonnes, bringing a revenue of VND33 trillion (US$1.44 billion) with a profit before tax of VND1.8 trillion (US$78.6 million).

The Czech economic magazine E15 has published an article on thriving Vietnamese expatriates’ real estate involvement on its front page.

According to the article, a group of Vietnamese businessmen in the Czech Republic bought a large building dating back to the 17 th century on historical Mala Strana Street. The former owner is Martin Nuhlicka, who is also co-owner of Hamé, a popular local food company. This is the first time such an investment has been made by Vietnamese investors.

The article quoted Michael Hynst, an expert at Svoboda & Williams real estate office, as saying there are Vietnamese banks working in the Czech Republic alongside an increasing number of wealthy Vietnamese expatriates having permanent residency in the European country. This leads to expectations for a property investment boom by the group, he noted.

Another example included in the article was the case of Le Hoang – owner of LHDI Company – who is investing in expanding Yasmin hotel, which lies in Prague’s central district.

In the retail sector – the traditional market for Vietnamese expatriates in the country – Vegan Land, a Vietnamese-owned vegetarian restaurant and store, recently opened inside the Fenix shopping mall.

Currently, the number of Vietnamese living in the Czech Republic is estimated at 65,000.-

Gov't seeks housing to reach more buyers

Deputy Prime Minister Vu Van Ninh has urged the Ministry of Construction to implement policies that would make social housing projects more accessible to low-income buyers.

"Social housing projects are developed but it is important now that they reach buyers," Ninh said at the ministry's conference on January 15.

At the conference, Ninh said he was impressed with the result of the restructuring of the property market with the improved legal framework and a five-year high growth rate of the construction sector.

The ministry's report showed that between 2011 and 2015, around 780,000 social housing apartments were put into use, providing accommodation for more than three million low-income earners.

As of the end of December 2015, average housing space reached 22 sq.m per head, up 1.1 sq.m against 2014.

The disbursement of the 30 trillion VND (1.34 billion USD) support package was speeded up, with 90 percent of the sum committed to be loaned and 59 percent disbursed.

The production value of the construction sector reached 974 trillion VND (43.45 billion USD), up more than 11 percent against last year.

"The construction sector contributed largely to the country's macro stabilisation, inflation control and economic growth," Ninh said.

Still, Ninh said that the construction ministry must enhance planning quality, and stressed that planning must have a long-term vision. In addition, the management must ensure that construction strictly follows planning.

He urged the ministry to boost the restructuring and privatisation of its member enterprises, including Song Thao and Ha Long cement plants, divestment from non-core businesses, while improving public services and preventing waste.

Minister of Construction Trinh Dinh Dung said that the ministry would aim at enhancing the property product quality this year as the competitiveness of the construction sector remained low due to poor quality and stagnant progress.

This was one among the efforts to achieve the goals set for the construction sector in 2016, including boosting the construction production value by 10 percent against 2015, increasing average housing space per head to 22.6 percent and ensuring an urbanisation rate of 36.8 percent.

The administrative reform would also be sped up to create favourable investment conditions for enterprises and home buyers.

This was in addition to the continuing efforts to improve the legal framework, enhancing supervision, and removing difficulties for the property market in line with the national housing development strategy.

The minister said that the bottlenecks in developing social housing projects were difficult credit and land access, and low profit for developers.

At the conference, Minister Dung, once again, stressed that the property market at the moment did not have adequate factors which would form a bubble. "However, it cannot be ignored."

He said the ministry would not let the market become overheated, and go out of control.

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