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BUSINESS IN BRIEF 19/4

Japan to fortify supporting industries; Rental housing sector to fire up; Ha Noi to open 1,400 hotel rooms; Garment exports grow 32%; Small wood processors face shortage of capital
Japan to fortify supporting industries

Japan will provide concessional loans for Vietnamese supporting industry firms in a bid to strengthen its industrial investments in Vietnam.

The Japan International Cooperation Agency (JICA) and the State Bank last week introduced a credit programme for Vietnamese small- and medium sized enterprises (SMEs) operating in supporting industries.

Under the plan, an SME, which in Vietnam is defined to have total maximum assets of VND20 billion ($961,358) and employees of no more than 300, would be granted consessional loans worth $1.2 million for each supporting industry project, within ten years and with a grace period of maximum two years. Credit will be provided by 23 local banks.

The programme would be expanded to turn local SMEs into big ones and might become large and powerful international suppliers in the future, said Kyoshiro Ichikawa, a Vietnam-Japan Joint Initiative Working Team 4-1 leader.

“Finance remains the biggest challenge for local supporting industry firms, and Vietnam will not be able to become an industrialised nation by 2020 without strong supporting industries,” he said.

According to the JICA, Vietnam needs to strengthen its weak supporting industries to attract high technologies and more Japanese industrial developers who tend to expand investment outside - rather than inside - Japan, due to this nation’s aging population and growing production costs.

For example, South Korea’s Samsung Vietnam recently started construction of a $2 billion smart-phone making complex in northern Thai Nguyen province, in addition to its existing $1.5 billion factory in northern Bac Ninh province.

“But Samsung has to import components from its production bases outside Vietnam to assemble them into completed-built products. This will not create added value to Samsung’s products in Vietnam and cannot transfer any high technology to Vietnam. The problem can be solved if Vietnam has good supporting industries,” Ichikawa said.

According to the JICA, the industrial localisation rate of Vietnam remained low at 22.4 per cent. Meanwhile, the rate is far higher in several other nations, with 22.7 per cent in the Philippines, 36.1 per cent in Singapore, Indonesia (42.9 per cent), India (45.2 per cent), Malaysia (45.9 per cent), Taiwan (49.2 per cent), South Korea (55 per cent), Thailand (56.1 per cent) and China (58.3 per cent).

In Vietnam, the localisation rate was 40-75 per cent for motorbikes, 30-40 per cent for office machines and 5-10 per cent for automobiles.

“It has taken time and cost for Japanese assemblers to seek local suppliers. A Japanese assembler has had to approach hundreds of local companies to find a good supplier,” Ichikawa said.

According to Ichikawa, some big Japanese firms currently want to implement high-technology supporting industry projects in Vietnam. But Vietnam still does not have any specific standards for developing high-technology products and put its supporting industries strategy into practice, which cannot make investors’ investment possible soon in Vietnam.

Also, the Vietnamese government has enacted many legal documents and regulations on supporting industries, “but it needs give financial supports to enterprises operating in such industries. Without capital, enterprises cannot develop,” Ichikawa said. “The government also needs to build data bases for supporting industries, so that foreign industrial developers can make their investment plans in Vietnam.”

State Bank warns of devaluation

The Vietnamese dong could be devalued by as much as 2 per cent against the US dollar this year, said Governor of the State Bank of Viet Nam Nguyen Van Binh.

Binh made the comment earlier this week at a meeting with leaders of enterprises in the southern province of An Giang, where exporters asked the central bank to devalue the dong in a move to help boost export revenues.

General director of the Nam Viet Seafood Co Doan Toi said that since Viet Nam was an agricultural economy foreign exchange rate policies should benefit agricultural exports to boost the sector's growth.

A 3-5 per cent devaluation of the dong against the dollar would support the country's exports of agricultural, forestry and fisheries products, Toi said.

General director of the Thuan An Seafood Processing Co Nguyen Thi Hue Trinh said that while the costs of materials for the tra fish industry had increased by 20 per cent during the past year, the stable forex rate in an export-oriented market was bound to hurt exporters.

However, Governor Binh said that devaluing the dong would not be beneficial to the overall economy as Viet Nam may still have a trade deficit during the next five years.

A stable exchange rate provided positive signals to the economy and the dong should only depreciate by 1-2 per cent, Binh emphasised.

He said that although the country aimed at limiting foreign currency lending to fight dollarisation, local firms with foreign currency revenues from exports were still allowed to borrow in foreign currency to reduce costs.

Commercial banks would cut dollar lending rates to 4-5 per cent to support exporters in the coming time, Binh added.

Internet helps rewire Asian economies

Small and medium businesses (SMBs) are using the Internet to rewire Asian economies and small and medium enterprises in Asian countries are proving themselves the real engines of growth, experts said at a conference held by Google Asia-Pacific in Singapore on Wednesday.

Speaking at the conference titled Helping Small Business Think Big, Google Asia-Pacific President Karim Temsamani said, "Asia's small businesses are going through a transformation. These small businesses will lead the rest of their economies onto the Internet."

The number of SMB advertisers in India, the Philippines, Viet Nam, Hong Kong, Australia, New Zealand, Indonesia, Singapore, Japan, Taiwan, and Thailand is growing faster than in the US or Great Britain, Temsamani said.

He said it was significant change from the immediate past. For fifty years, Asian business had been defined by conglomerates, chaebols and keiretsu.

"The industrial revolution rewarded companies that were large because they were able to reach markets around the world. The bigger your company, the lower your average costs. Large companies could fund campaigns to access foreign markets. Large companies made it easy for rising Asian economies to direct industrial policy," said Temsamani.

The Internet has changed this equation. It is helping to kick off an "industrious revolution" where hard work and great ideas matter more than size and resourcefulness matters more than resources. And growth will help fund businesses as much as size, he said.

"Today, in 2013, almost any business in Asia could make use of the Internet to make it big. They're starting up a business and looking for anything that will work. They don't have big IT departments or legacy systems constraining their thinking. They use whatever works. And in the process, without planning to, they become Internet businesses," he said.

A small business can advertise not just to people in the immediate area, but to everyone with an Internet connection — 2.5 billion people.

It can buy text ads, video ads, mobile ads that reach millions of people for less money than a basic offline marketing campaign would 10 years ago.

Anu Madgavkar, a senior fellow from the McKinsey Institute, cited figures from Viet Nam Chamber of Commerce and Industry for 2012 that say Viet Nam has some 400,000 small and medium enterprises (SMEs) that contributed an estimated 40 per cent of the country's GDP, 20 per cent of its exports, and employed 77 per cent of the country's workforce.

In 2010, the Internet contributed one per cent to Viet Nam's GDP compared with 5 per cent to the GDPs of South Korea and Taiwan; 4 per cent for Japan and Malaysia, 3 per cent for China; and 2 per cent for India.

In 2011, 84 per cent of SMEs in Viet Nam attained high-speed Internet access, compared with 98 per cent in South Korea, 96 per cent in China, 87 per cent in Japan, 86 per cent in Malaysia; 82 per cent in Taiwan and 81 per cent in India.

Madgavkar said low bandwidth speed and equipment costs are the two top contraints that limit Internet usage amongst SMBs in Asia.

The other constraints include cost of Internet access, lack of education, high cost of mobile plans, lack of trust, lack of reliable postal system, insufficient local businesses online, high cost of smartphones and lack of Internet infrastructure, he said.

Ha Noi holds nation's first international travel market

Tourism companies from 18 different countries and territories home and abroad gathered for the first Viet Nam International Travel Mart (VITM) yesterday in Ha Noi.

The event has been identified as an invaluable opportunity for Viet Nam to promote its unique tourism brand to international friends and investors.

In his address to the opening ceremony, Deputy Prime Minister Nguyen Thien Nhan thanked organisers for their initiative.

"Holding such an event is very important as we try to develop tourism professionally and effectively and seek to understand the demand and taste of tourists," he said.

"While tourism is still suffering from the impact of the global economic crisis, the co-operation of travel agents and managers through the VITM will play an important role in promoting tourism. It gives enterprises a chance to overcome their troubles and develop their business."

Vice President of the Viet Nam Tourism Association Vu The Binh, who is also head of the VITM organisation board, said that local and foreign travel agents will be able to meet, share ideas and find partners at the fair.

"With the VITM, we want to create a prestigious, professional event to promote national tourism and make our country the first choice destination in the region," Binh said.

A section of the fair has been given the theme ‘Exploring the Hong (Red) River Delta – The Origin of Vietnamese Culture' and is a response to the National Tourism Year being celebrated in that region, which Binh said has abundant tourism potential which is still to be exploited.

The opening day of the fair included a seminar entitled ‘Promoting Cultural Heritage Value for Capital Tourism Development", which was attended by UNESCO Viet Nam representatives, international partners and local travel specialists.

"Viet Nam has an abundance of tourism resources in both urban and rural areas," commented Ando Kasuhiro, an expert from the Japan International Co-operation Agency. "I expect that they will be conserved and actively utilised for tourism. However tourism can bring both positive and negative impacts to a destination, so co-operation with local communities is essential to ensure that a place does not lose any of what makes it so special in the first place."

The first day of the fair also saw attendees visit workshops promoting tourism in South Korea, Malaysia and Cambodia and giving potential visitors a chance to understand these countries' cultures more deeply.

Malaysian delegates introduced traditional dance, singing and cuisine during the event while

South Korea highlighted the growing number of direct flights between Viet Nam and South Korea.

"This means it's the right time for the two countries to boost their tourism ties," said Binh.

In the next few days, the mart will run workshops on responsible tourism, green tourism, air tourism and human resources training.

The VITM will run until Sunday at the Culture - Friendship Palace, 91 Tran Hung Dao Street, Ha Noi.

Rental housing sector to fire up

The Ministry of Construction has asked for the Prime Minister to approve a pilot programme to convert commercial housing projects into social rental housing.

Since the Law on Housing took effect in 2006, developers have been encouraged to focus on housing for low-income earners, according to Deputy Minister Nguyen Tran Nam.

However, there were no specific incentives to invest in rental housing, despite the huge demand – particularly among low- income earners in urban areas, who could not afford to buy homes.

Real estate companies preferred to focus on houses for sale because rental properties had lower investment efficiency and it took a longer time for capital to return to the investor, Nam said.

As a result, most rental housing, such as dormitories for university students and workers at industrial zones, is funded by the State.

Rental housing makes up 6.3 per cent of total housing across the country, according to the ministry. In Ha Noi, 14 per cent of housing is for rent and in HCM City that figure has reached 19 per cent, while in other cities it hovers around five per cent.

A national housing strategy approved in 2011 aims to raise the proportion of rental housing to 20 per cent by 2015 and 30 per cent by 2020.

The conversion of commercial houses for sale into social houses for rent would help meet the demand for rental housing and warm up Viet Nam's gloomy real estate market, where there is a high inventory of commercial housing, deputy minister Nam said.

Under the ministry's proposal, low-income earners will get bank loans worth 80 per cent of the rental housing contract if they pay the whole rental in full or loans worth 50 per cent of the rental contract if they pay monthly.

They will also be offered preferential loans to buy the houses if investors decide to sell them. Investors of rental housing projects for workers in industrial zones will be exempted from land use fees. Investors of such projects in urban areas can pay land lease fees yearly instead of paying them in full at the beginning of the lease.

Moreover, they will see a reduction in corporate taxes from 25 per cent of revenue generated from renting activities to 10 per cent and get preferential bank loans worth up to 70 per cent of the project value.

The Construction Ministry has selected five commercial housing projects for the pilot programme.

The projects are Bee Home 1 and 2 in HCM City's Tan Binh and Go Vap districts (CT Group), housing for workers in northern Bac Ninh Province's Tien Son and Yen Phong Industrial Zones (Viglacera) and housing for workers and Binh Minh Trade Centre in southern Vinh Long Province (Hoang Quan Consulting). The ministry proposed that the maximum rent for workers in industrial zones should be VND35,000 per square metre per month. This means that if four workers shared a 40sq. m apartment, each would pay about VND350,000 (US$16).

The rent for low-income households in urban areas would be VND65,000 per sq. m per month because investors still have to pay land use and land lease fees.

Vice chairman of Viet Nam Real Estate Association Nguyen Ngoc Thanh said that converting commercial housing projects to social housing and houses for sale to houses for rent was a smart move that would offer low-income earners more choices in accommodations.

For a long time, the demand for low-income rental housing was satisfied by individual homeowners renting out space, particularly around universities and industrial zones. But Thanh noted that almost all such houses failed to meet national housing standards, often creating slum areas where living conditions were poor.

"Rental projects planned by capable investors would provide better living standards for low-income earners," Thanh said.

However, he wondered about the feasibility of imposing a ceiling rent. In State-funded projects, the Government could impose a maximum rent, but in commercial projects, Thanh said, "the market and quality of the products" should "decide their prices".

Tran Quang Hanh, 28, an office employee from northern Thai Binh Province, has been a renter in Ha Noi for eight years – since he was a student.

"I shared a 15sq. m room in a garret with two friends. Each of us paid around VND600,000 for housing each month," he said, noting that it was in the suburban district of Thanh Tri where things were not too expensive.

He said he and his roommates usually rented from individual homeowners instead of companies or housing brokers.

"I don't expect to access social housing projects because of the complicated procedures," he said.

The conversion of commercial housing projects into houses for low-income earners will be publicised, director of the Ha Noi Department of Construction Nguyen The Hung said.

Responding to concern that the conversion could overload urban infrastructure, Hung said that before granting conversion licences to the projects, officials of the department and the Planning and Architecture Department would review the project planning, ensuring safety and convenience for residents.

The city People's Committee has permitted three commercial projects to be converted into low-income projects to reduce the stockpile in the real estate market. These include the Trung Van housing area in Tu Liem District, the 35-floor building in Song Da, the urban area in Ha Dong District and the AZ Thang Long Ha Noi residential complexes.

After being converted, each apartment will have an area between 40 and 70 square metres and be sold for VND15 million (US$714) per square metre.

Work starts on Panasonic factory

Construction started yesterday on a factory that will produce wiring devices and circuit breakers at the Viet Nam – Singapore Industrial Park II in southern Binh Duong Province.

The factory, owned by Panasonic Eco Solutions Viet Nam (PESVN), will cost US$19million and manufacture devices for the local market.

Its planned production capacity of 27 million units of wiring devices and 12 million units of circuit breakers in the first year of production, is hoped to double by 2018.

The manufacturing facility is set to begin production in April 2014.

Ha Noi to open 1,400 hotel rooms

Eight hotels with 1,400 rooms are scheduled to start service in Ha Noi this year, according to a report on the Ha Noi property market by Savills Viet Nam.

Many of the new rooms will be at hotels managed by international operators such as Intercontinental, Marriott, Hilton Hotels and Candeo.

The report also showed that Tay Ho District is the most sought-after residential area in Ha Noi. The number of apartments for rent in the district during the first quarter of this year rose by 20 per cent over the preceding quarter.

Garment exports grow 32%

Viet Nam's textile and garment exports saw growth of 32 per cent during the 2005-11 period, the fastest growth rate for this sector anywhere around the world, according to a recent survey.

The information was released at a conference in HCM City on Saturday by Dhyana Van der Pols, a consultant for the Centre for the Promotion of Imports from Developing Countries (CBI) under the Dutch Ministry of Foreign Affairs.

China came next in the rankings with a growth of 15 per cent, followed by India with 10 per cent and Turkey, Malaysia and Thailand with 7 per cent each.

The sector's fast growth in Viet Nam is attributable to the country's political stability and low labour costs, said Dhyana Van der Pols.

She said that although Viet Nam is not in the top 10 textile and garment exporters to the European Union, a future free-trade agreement (FTA) between the two sides is expected to open new opportunities for Viet Nam to increase its exports to the world's largest apparel consumer.

The conference, themed "Competitiveness of Viet Nam's Textile Industry: Perspectives in the Eyes of International Experts", was co-organised by the CBI and the Vinatex.

Small wood processors face shortage of capital

Capital shortages are hindering the operation of wood processing enterprises, especially those of small and medium sizes, experts have said.

According to the Binh Duong Furniture Association, the loan interest rate remains high – making domestic enterprises less competitive.

Although the rate has been reduced to 15 per cent per year, only 0.6 per cent of enterprises say it is reasonable given the current economic conditions.

The association estimated that only 44.1 per cent of enterprises can bear an interest rate of 15 per cent in the long term.

Inventories of wood products soared 28.4 per cent this year.

Tran Quoc Manh, deputy president of the Handicraft and Wood Industry Association of HCM City, attributed this problem to the fact that companies found it difficult to access loans.

The decrease in import demand from some markets, except the US, and the increasing prices of raw materials also created difficulties for enterprises, he added.

Meanwhile, the support package from the Government had still not reached enterprises.

"Loan conditions should be loosened to support enterprises in this difficult time," said Manh.

Last year, in order to have enough capital, Truong Thanh Wood Processing Company was forced to sell the imported raw materials it had on stock at prices 20-30 per cent lower than import prices.

The company did not expect any growth in the first quarter this year. Instead, it focused on financial and organisational restructuring and hoped that production would recover next quarter, the company's director Vo Truong Thanh told Dau Tu (Investment) newspaper.

High corporate income taxes, social insurance fees and pressure from minimum salary increases also worsened the burdens to enterprises, said Le Hong Thang, director of Duc Thanh Wood Processing Joint Stock Company.

Thousands of firms hit the wall

More than 2,270 businesses closed in the first quarter, while ovear 13,000 suspended operations, according to the Ministry of Planning and Investment.

The finance, banking and insurance sector had the highest number of dissolved businesses, followed by education and training and real estate.

Over 15,700 new businesses were established, mainly in the north and the south. This represented a 6.8 per cent year-on-year decrease, according to the ministry's Department of Business Registration.

Total registration capital was VND79.3 trillion (US$3.77 million), down 10 per cent over the same period last year.

The department added that most localities nationwide had fewer new businesses than last year, showing that enterprises still faced difficulties.

Nguyen Van Tung, general director of Da River 6 Corporation, told Dau Tu Chung Khoan that the corporation's profits in the first quarter totaled VND10 billion – the lowest level of the year.

Tung said the corporation aimed for post-tax profits of VND41 billion, which would be an increase of 10 per cent against last year.

Nguyen Thai Binh, a representative from Tay Ninh Rubber Company, said the company would have difficulty reaching its revenue goal of VND901 billion this year because of unexpected changes in the economy and fluctuating rubber prices.

He said the company would continue to expand its rubber-growing areas in Laos and Cambodia while also developing domestic exploitation.

Power producers may pay more for coal

The Viet Nam Coal and Mineral Industries Group (Vinacomin) has asked the Government to increase the price of coal sold to power producers, saying that the group is facing difficulties because coal is selling for less than it costs to produce.

However, experts have expressed concern about such a proposal made last week.

If the coal price increased, the power industry would surely ask for a price hike as well – causing inflation, said economist Le Dang Doanh.

But Nguyen Van Bien, deputy general director of Vinacomin, argued that the coal industry was in particularly dire straits, as the volume of coal sold to the power industry this year had been rising significantly. Last year, coal sold for electricity generation accounted for 10-15 per cent of coal sales; and that figure rose to more than 50 per cent in this year's first quarter.

Moreover, the mining industry faced major difficulties due to the steep decrease in exports. In previous years, coal producers could use the export value to offset their domestic losses. But this year, both coal export value and volume declined sharply, causing the export price to fall by roughly 30 per cent. Economist Nguyen Minh Phong said that because the Government sought to bring prices of all commodities in accordance with the market price, a coal price hike was necessary, but transparent audits should be conducted so the public could see whether the coal industry was making a profit.

The industry's high production costs and low labour productivity resulted from its failure to broadly implement modern technology, said Tran Viet Ngai, chairman of the Viet Nam Power Association.

Exporters to focus more on Hong Kong

Vietnamese businesses need to make the best of Hong Kong as a gateway for bringing their goods to other markets, said experts.

They also highlighted Hong Kong as a potential export market for Vietnamese goods during a recent seminar to discuss ways to boost exports to the territory.

According to Director of the Export Assistance Centre under the Viet Nam Trade Promotion Agency Le Xuan Duong, despite its population of more than 7 million, the Hong Kong Administrative Region recorded a very high per capita income of US$36,000 in 2012.

He said that Hong Kong primarily imports food and foodstuffs from abroad due to its shortage of cultivated land, which creates favourable conditions for the Vietnamese agricultural sector to promote exports to this lucrative market.

Its main advantages are modern transport infrastructure, low tax rates, minimal government interference in business, and well developed services for retail and wholesale trade, he added.

Experts also said that Hong Kong has the busiest airport in the world for transporting international cargo and the third busiest container port.

As an important financial and trade centre for Asia and the world, Hong Kong is considered an ideal destination for major Asia Pacific companies as well as a trade and investment gateway linking China with other countries.

A double tax avoidance agreement between Viet Nam and Hong Kong that became effective on January 2010 has also helped increase Vietnamese exports to Hong Kong .

In 2012, Viet Nam ranked 17th out of 30 countries with the strongest trade ties with Hong Kong, raking in $4.7 billion in total export-import turnover, of which Viet Nam exported $3.7 billion, up 12 per cent, and import $1 billion worth of goods, up 10.7 percent over a year earlier.

Key Vietnamese exports include agricultural produce, office and telecommunication equipment, computers, electronic and semi-conductor components.

Australian Questacon show to stimulate sci-tech interests

A Spectacular Science show of Questacon will take place in the central city of Da Nang on April 16-18 as part of activities to mark the 40th anniversary of Vietnam - Australia diplomatic ties.

In addition, there will be a series of seminars featuring science-technology training as well as Vietnam - Australia education partnership to help Vietnamese teachers improve their interactive professional skills.

The event is organized by Australia’s National Science and Technology Centre.

The event will display 46 interactive exhibits in the field of science and technology relating to light and sound, human biology, force, and motion.

Questacon’s show will also be held in Hanoi from April 24-27. Earlier, it was successfully organised in Ho Chi Minh City from April 10-13.

Equipment exhibition draws international tech products

More than 100 companies from 10 countries are displaying products on laboratory technology, biotechnology and diagnostics at an International Analytical Exhibition that opened on April 17 in HCM City.

The analytical Vietnam 2013 has attracted many companies from Japan, India, and Germany, France, Spain, the US, Singapore, Malaysia, the Republic of Korea and Switzerland.

High-tech equipment in the areas of chemical, electronics, pharmaceuticals, healthcare and environment are showcased at the exhibition.

During the biennial event, a two-day seminar is scheduled to take place, during which the world’s leading scientists will speak about the latest developments in the field.

This year’s exhibition is seen as an in-depth conference with speeches made by local and international experts, Hung said, adding that the event will include lectures on food analysis, pharmaceuticals and environmental technology.

The three-day exhibition, the third of its kind in Vietnam, was organised by Messe Munchen International Corporation and its subsidiary International Fair and Exhibition Service, and Vietnam’s National Agency for Science and Technology Information.

HCM City calls for investment in support industry

Ho Chi Minh City has considered the development of hi-tech and support industries as the key to economic restructuring and growth model shift by 2015.

Le Manh Ha, Vice Chairman of the municipal People’s Committee was speaking at a seminar which was co-organised by the Investment and Trade Promotion Center (ITPC) and the municipal Hi-tech Park Management Board in HCM City on April 16.

The city is set to increase the export value of hi-tech products, which will account for 30 percent of its GDP and adopt preferential policies for businesses operating in hi-tech and support industries, Ha said.

As the country’s largest economic hub, HCM City aims to increase the rate of locally-made contents in manufactured product to 25 percent by 2015 and 40 percent by 2020, and achieve US$10 billion in export revenue by 2015.

Amway’s second plant to take shape

Amway, one of the world’s largest direct selling companies has projected to build the second plant in Vietnam later this year with a total investment of US$20 million.

This was announced by Amway President Doug DeVos on April 16.

The plan will be built with three production lines in the Vietnam-Singapore Industrial Park in the southern province of Binh Duong covering on an area of more than 65.6 sq.km.

In the first stage, it will focus on producing Nutrilite with an annual capacity of US$200 million worth of products.

Doug DeVos said his company believes in Vietnam’s potential for stronger growth in the future and has worked out a long-term investment strategy in this market.

US-based Amway’s first plant entered operation at the Amata Industrial Park in southern Dong Nai province in 2007.

Thanh Hoa attracts more investment from RoK businesses

The central province of Thanh Hoa is ready to create favourable conditions for them to invest in the locality.

Trinh Van Chien Chairman of the provincial People’s Committee was speaking at a conference in Thanh Hoa city on April 16 to promote investment and trade with RoK businesses.

The province will continue improving its investment environment and infrastructure system, training human resources and developing support industry, he said.

At the conference, the Thanh Hoa Institute of Planning and Architecture and the Hong Duc Education Equipment Joint Stock Company signed memorandums of understanding (MoU) on investment and business cooperation with the RoK’s Heerim Architects & Planners and Cloz Companies.

The same day, the Thanh Hoa provincial People’s Committee and the authorities of Seongnam city also signed a MoU which the two sides will boost cooperation in the fields of economics, ecology, culture, health, sports, education, tourism, technology and infrastructure.

In 2013, the RoK city will send a delegation of experts to help Thanh Hoa build Lam Son – Sao Vang Hi-tech Park in Tho Xuan district.

The two sides will speed up the signing of cooperation agreements between their small- and medium-sized enterprises, universities, and cultural and educational organisations.

Thanh Hoa ranks sixth in the country in attracting foreign direct investment (FDI) with a total of US$16 billion. At present, the RoK has eight FDI and three ODA projects in the province.

Int’l visitors want to return to Khanh Hoa

More than 60 percent of foreign tourists visiting Khanh Hoa province have said they would love to return thanks to its high-quality services, reasonable prices, and beautiful landscapes.

According to the Khanh Hoa Department of Culture, Sports, & Tourism, most of the province’s foreign visitors arrive from Russia, the Republic of Korea, Australia, and the US.

The length of stay for international arrivals is on the rise with 4.5 nights per visitor recorded in 2012.

Russian visitors are currently the province’s most numerous. They usually stay longer than one week—with some even remaining for more than a month— and particularly enjoy the province’s water sports.

More than 171,000 tourists have visited Khanh Hoa province this year so far, representing a year-on-year increase of 27 percent.

The province still leads the central region in its popularity with Russian tourists, welcoming more than 53,000 visitors.

Central Khanh Hoa province's Nha Trang City also hosted 14 cruise ships carrying nearly 10,000 foreigners.

Companies fined for producing substandard fertiliser

Three companies in the Mekong province of Tien Giang were fined VND125 million (US$5,900) for manufacturing substandard fertiliser following a decision signed by the provincial People's Committee.

Viet Quoc Thinh Manufacturing and Trading Company, Dai Truong Thanh Manufacturing and Trading Company were fined VND40 million each while the HCM City-based Phu Dien Manufacturing and Trading Company was penalised VND45 million.

In addition, the province asked the companies to withdraw 14 fertiliser bottles under the Reynox brand and 400 kilos of fertiliser of NPK 30-5-5.

Equipment exhibition draws international tech products

More than 100 companies from 10 countries will display products on laboratory technology, biotechnology and diagnostics at an international Analytica exhibition that opens today in HCM City.

The Analytica Viet Nam 2013 has attracted many companies from Japan, India and Germany. Other exhibitors are from France, Spain, the US, Singapore, Malaysia, South Korea and Switzerland.

High-tech equipment in the areas of chemical, electronics, pharmaceuticals, healthcare and environment will be showcased at the exhibition.

During the biennial event, a two-day seminar will take place, during which the world's leading scientists will speak about the latest developments in the field.

Speaking at a press briefing in HCM City yesterday, Ta Ba Hung of the National Agency for Science and Technology Information, said the seminar would offer scientists an opportunity to update their knowledge and help businesses seek out partners.

This year's exhibition is seen as an in-depth conference with speeches made by local and international experts, Hung said, adding that the event will include lectures on food analysis, pharmaceuticals and environmental technology.

The three-day exhibition, the third of its kind in Viet Nam, was organised by Messe Munchen International Corporation and its subsidiary International Fair and Exhibition Service, and Viet Nam's National Agency for Science and Technology Information.

State Bank aims to crack down on inefficient banks

The State Bank of Viet Nam has moved to eliminate inefficient credit institutions during the 2013-15 period.

In a recent directive, the central bank asked credit institutions to perform a comprehensive review of their internal operations and take corrective measures to ensure they are both earning a profit and operating in compliance with all current laws and regulations.

Institutions that incur losses will be closed or merged into other institutions.

The review will include all domestic and foreign subsidiaries, transaction offices, savings funds and representative offices of credit institutions.

Restructuring plans are due by April 30.

Long An strives for green growth

As the gateway to the Cuu Long (Mekong) Delta and a major paddy producer in the region, Long An Province targets to become an environmentally-friendly industrial province.

The target was revealed by Deputy Prime Minister Vu Van Ninh yesterday at a conference held to announce the province's master plan for economic and social development until 2020.

He urged leaders of the province to deploy "specific solutions" to mobilise local and international resources to realise the plan's goals.

The deputy prime minister said Long An should give priority to projects that strengthen its strategic role as a gateway to the Mekong Delta, connecting the region with the Southern Focal Economic Zone.

Recognizing that the province has much untapped potential, local authourities should create the best investment environment possible and provide favourable conditions to attract more investors to the province, he said.

"The province needs to have five-year plans as well as annual plans to better realise the master zoning plan for the locality approved by the government. Investments into hi-tech sector must be given priority," Ninh said.

According to the master plan, Long An will develop its 4,500sq.km area into three main parts, aiming at environmentally-friendly development.

The province, which has a population of 1.4 million, aims to develop the industrial sector sustainably and support other sectors including agriculture and services.

The first area will focus on tourism, agriculture and developing the border economy. The second area will be an ecological area, which protects the first area from development impacts while the third area will be used for industrial and urban development.

The province has set itself the stiff target of achieving an average Gross Domestic Product (GDP) growth by at least 13 percent between 2012 and 2020. Last year, the province's GDP growth was reported at 10.5 percent.

According to the master plan, the province's annual per-capita GDP is expected to reach US$2,400 in 2015 and $3,800 in 2020. The GDP per capita will be $8,000 in 2030, rising from the current $1,800.

According to the master plan, the province's industrial sector is expected to reach a growth rate of more than 14 percent by 2015 and maintain it for the following five years. The service sector is expected to achieve a growth rate of 17 percent by 2020.

Do Huu Lam, chairman of the province's People's Committee, reiterated that province has a lot of untapped potential and enjoys a strategic position, connecting Viet Nam's biggest economic centre with the Mekong Delta region.

He said besides road and river systems that can create better links between the Delta and HCM City, the province has more than 30 industrial parks and 5,000ha of clear land which is ready to receive investment.

However, in order to realise its growth targets, Long An has estimated an investment need of VND400 trillion ($19 billion) between 2011 and 2020.

While striving to meet its ambitious industrial development target, the province also plans to continue developing paddy cultivation, contributing to the nation's food security target, Lam said.

With its strategic position and untapped potential, Long An has a great opportunity to attract foreign direct investment and transform itself into a "typical" industrial province by 2020, officials said.

Long An leads the delta in attracting FDI, standing 11th in the country last year. At the end of 2012, it had 461 foreign investment projects worth $3 billion. Japan is the biggest investor in the province.

The conference heard that since early this year, 12 projects have been registered in the province, mostly in major economic centers like the districts of Duc Hoa, Ben Luc, Can Duoc and Can Giuoc and Tan An City.

Lam said that the province has achieved success in attracting investment capital and developing the industrial sector to make it a development engine contributing to economic restructuring.

Exports by FDI enterprises have increased rapidly year on year and made up an increasing percentage of the province's total export earnings, he said. Exports by the FDI sector rose from just $150 million in 2000 to $1.97 billion in 2011.

To become an industrialised province by 2020, Long An will attempt to improve its investment environment to better attract FDI projects focused on new technology, industries and sectors that will not pollute the environment, he said.

It will reform its administrative procedures related to investment, land, construction, taxation and customs and strengthen local authorities' managerial capacity, resolve problems faced by individuals and businesses and increase its competitiveness index, he added.

Several projects behind schedule in Saigon South

At a meeting with the Department of Natural Resources and Environment in Ho Chi Minh City on April 16, the People’s Committee of Binh Chanh District brought to notice several projects that have been running far behind schedule in Saigon South, the new urban development area.

After inspecting some of the delayed projects set to take off as far back as 2011, government inspectors suggested revoking licenses of five including 13A Residential Area in District 8; 6B and Hanh Phuc or Happy City Residential Area; and the amusement park in Binh Hung Ward of Binh Chanh District.

Regarding this, the City People’s Committee had tasked the Management Authority of Southern Area Development (MASD) to look into these issues. However, nothing had been done when the inspectors returned to check in 2012.

The government inspectors then instructed to put an end to the Happy City Project, which has been pending since 2004. The City People’s Committee asked for an extension for the project, which was approved by the Prime Minister.

However, so far the investor, Construction Corporation No.1, has completed only 30 percent of the compensation work.

At the meeting, representatives from the Department of Natural Resources and Environment, the investor and MASD again asked for an extension of the deadline for Happy City project and promised to complete site clearance by 2015.

Disregarding this request, Doan Nhat, deputy chairman of the People’s Committee of Binh Chanh District, proposed revoking the project because it has hung on for too long, causing inconvenience to local residents.

Besides the above five projects, Saigon South still has several projects which have prolonged for more than ten years with investors still struggling at the first stages of compensation to residents.

Investors of Phong Phu and Him Lam residential areas have already thrown up their hands as they have been unable to go ahead with their projects.

The People’s Committee in Binh Chanh District vetoed extension of the deadline for projects where compensation is still half done.  Projects that have completed at least 80 percent of compensation work will be permitted to continue.

The 3,000 hectare Saigon South new urban development area includes Tan Phong and Tan Phu Wards in District 7, Ward 7 in District 8 and An Phu Tay, Phong Phu, Binh Hung and Hung Long Wards in Binh Chanh District.

Marketer cashes in on Vietnamese children

Viet Nam, home to over 18 million children between the ages of 0 and 12, is a potential market for the children's entertainment business to expand.

This was stated by Thomas Ngo, chairman of N-Kid Corp, during a recent press conference in Ha Noi.

The company recently introduced TiNiWorld Edutainment Center, a playground that incorporates education and entertainment.

N-Kid Corp owns 18 TiNiWorld Edutainment Centres in HCM City, Ha Noi and other southern and central provinces and aims to raise that number to 50 in the next two years.

Tra fish exports to Japan rise substantially

Exports of Vietnamese tra fish to the Japanese market have risen considerably since March, according to the Viet Nam Association of Seafood Exporters and Producers.

From January 1 to March 15, tra fish exports to this market brought in over US$535,000, an increase of 3 per cent year on year, the association said.

Last year, Viet Nam exported approximately 25,000 tonnes of frozen fillets to Japan, placing the country seventh among such exporters.

However, experts suggested that the quality of Vietnamese seafood be improved so the nation can secure a firm foothold in the demanding Japanese market, which requires the development of sustainable aquaculture and clear labelling of product origin.

Bank to pour resources into Central Highlands exports

The Bank for Investment and Development of Viet Nam (BIDV) will pour more than VND7.3 trillion (US$348.8 million) into the Central Highlands.

Under agreements signed between the bank and local businesses recently, BIDV will also deploy a preferential credit package worth VND2 trillion ($95.3 million) to support the region's rubber, coffee and farm produce exports.

In the 2013-15 period, the bank will give a VND5 trillion ($238 million) soft loan to develop credit activities in accordance with policies and orientations for regional economic development.

Ha Tinh province earns $41m in exports in Q1

The central province of Ha Tinh generated US$41 million from exports over the first quarter of this year, surging 260 per cent against the same time last year.

According to the provincial Department of Industry and Trade, steel and corrugated iron, cassava flour and wood shavings are among the key export items.

During the period, the province also imported $51.3 million worth of goods, an increase of 320 per cent year-on-year.-

Masan's investor plans to swap shares

US investment fund KKR's arm may transfer its stake in Masan Consumer to shares of the parent company Masan Group (MSN) in a new issuance.

The fund earlier this year spent US$200 million to buy 45.68 million shares of Masan Consumer, gaining an 8.7 per cent stake in the company.

Masan Group holds a dominating 77.3 per cent stake in Masan Consumer.

A Massan representative said the type of securities issued for the swap will be MSN shares or depository receipts on the basis of common shares.

The number of new MSN shares will be calculated based on the comparision between the ownership of the US investor in Masan Consumer and the volume weighted average price of MSN shares at the time of the issuance. It must also assure KKR's expected internal rate of return.

Masan Group also plans private placement of shares to Jade Dragon (Mauritius) Limited – a subsidiary of Goldman Sachs – and Dragon Capital's Vietnam Resource Investments (Cayman) Limited.

In addition, Masan Group intends to issue 100-200 million convertible bonds in the international market. Bond yields will reach up to 8 per cent a year.

The conversion price has not been set, but it will be at least VND100,000 per share.

The bonds may be listed on the Singapore Stock Exchange or other foreign stock exchanges chosen by the board.

Committees in charge of housing projects set up

The People's Committee of HCM City has recently established two committees at district and municipal levels in charge of the approval of future social housing projects.

The People's Committee said all applications for purchase and lease of social accommodation would be under the management of both committees to ensure compliance with the law and transparency of application approval.

Up to mid-April, the city has received nearly 800 applications from those with a demand for social housing, including public officials, people working in military forces and workers from more than 50 companies across the city.

The city, in response, has recently approved 113 applications, allowing the applicants to purchase apartments at the price of VND11 million (nearly US$530) per square meter in an apartment building in District 10's To Hien Thanh Street.

According to the municipal Department of Construction, up until the beginning of April, the department has received 20 cases of commercial housing projects which were submitted for conversion into social housing and approved nearly 10 projects among these.

HCM City aims to facilitate the purchase of more than 20,000 apartments for people with demand for inexpensive housing from present until 2015.

By the end of year, the city plans to enable the purchase and lease of 4,000 apartments.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR

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