Vietnam - Korea Investment Forum held

The Vietnam - Korea Investment Forum, which was held on July 14, presented a range of opportunities for investment in electronics and high value-added support industries, according to the General Secretary of the ASEAN-Korea Centre (AKC), Mr. Kim Young Sun, and contributed to the comprehensive economic relations between Vietnam and South Korea.

The Forum was organized by the Ministry of Planning and Investment (MPI) and the AKC and was attended by Deputy Minister of Planning and Investment Nguyen The Phuong, South Korean Ambassador to Vietnam H.E. Jun Dae Joo, representatives from the Foreign Investment Agency and the Investment Promotion Department under MPI, and many South Korean and Vietnamese electronics businesses.

Mr. Kim Young Sun said that Vietnam has great potential for economic growth, given its “golden” population structure and fondness for learning.

Trade turnover between Vietnam and South Korea reached $30 billion in 2014, a 30-fold increase compared to 20 years ago when diplomatic relations were established. There are now 4,400 South Korean enterprises investing in Vietnam and accompanying the country in expanding to global markets.

The two countries have been cooperating mostly in garments and textiles, shoes, and light industries, and continue to enhance cooperation in high value-added support industries, electronics, and information technology, aiming for trade turnover of $70 billion by 2020.

South Korea is Vietnam’s largest foreign direct investment (FDI) partner, with total investment standing at $39.16 billion in registered capital, of which 240 projects in the electronics industry are worth $16 billion.

According to a representative from the Foreign Investment Agency, Vietnam’s electronics industry has attracted 600 FDI projects with $20 billion in registered capital, producing cell phones, electronic components, internet equipment, electronic spare parts, and others, with export value of $35 billion, for approximately 23 per cent of the total.

MPI also made a commitment at the Forum to maximize support to South Korean enterprises investing in Vietnam, especially those in the electronics industry.

The Hanoi Stock Exchange has announced that the initial public offering (IPO) of Thang Long GTC Ltd. will be held in mid-August.

Its charter capital is estimated at VND552.6 billion ($25.34 million), equal to 55 million shares. The company will sell 33,882,300 shares (61.3 per cent) in the form of a public auction on the morning of August 13 at a starting price of VND10,600 ($0.49) per share. Further information will be released shortly.

Thang Long GTC is a subsidiary of the Hanoitourist Corporation, which primarily operates in the trading of goods, imports and exports, tourism, travel transportation, hotels, real estate leasing, and package printing.

Its most valuable assets lie in joint venture investments such as InterContinental Westlake (25 per cent), Hilton Hanoi Opera Hotel (30 per cent) and Big C Thang Long (35 per cent). It also holds a 35 per cent share in Thang Long Property, 29 per cent in Pacific Thang Long, 30 per cent in the Pan Horizon Hotel, 9 per cent in Capital Tower, and 7 per cent in Taxi Hanoitourist.

At the end of March another subsidiary - Hanoi Toserco - conducted a successful IPO, with the number of shares registered for purchase being four times higher than those available.

PPP for Ninh Binh - Thanh Hoa expressway

The Ninh Binh - Thanh Hoa Expressway project is to receive investment under the public-private partnership (PPP) model, Deputy Minister of Transport Nguyen Hong Truong told a conference with related agencies on July 15. The date of construction, however, is still to be determined.

The expressway is a key project carrying huge volumes of traffic, according to Vice Director of Transport Engineering Design Inc., Mr. Nguyen Minh Thang, which is consulting on construction and design.

Vice Chairman of the Thanh Hoa Provincial People’s Committee, Mr. Le Anh Tuan, said the province expects the expressway project to be conducted in the future. The expansion to National Highway No.1 has failed to ease traffic congestion so the new expressway is very much needed.

To ensure investment efficiency, construction will be divided into two parts, from Mai Son commune in Ninh Binh province to National Highway No. 45 and from National Highway No. 45 to Nghi Son commune in Thanh Hoa province. Mr. Tuan also suggested that investment be under the build-operate-transfer mode and be supported by the government.

The project is part of government plans in the 2020-2030 period to develop expressways from the north to the south of the country. The Ministry of Transport has conducted a feasibility study but construction is yet to be approved due to a lack of capital, but it is now calling for investment.

The expressway is designed to have six lanes and a maximum speed of 120 km/h. In the first stage, however, the expressway will have four lanes and a maximum speed of 80 km/h with investment of VND17.74 trillion ($813.37 million).

Suitable approach

The Insurance Supervisory Authority (ISA) at the Ministry of Finance (MoF) and insurance companies have recently put a great deal of effort into identifying the way the sector can develop in a sustainable and efficient manner. Many conferences have been held, where both life and non-life insurers were able to discuss policies that would help the sector reach its undoubted potential.

At conferences for non-life insurance companies, representatives expressed their appreciation of the efforts made by related government agencies last year in issuing Circular No. 194/2014/TT-BTC, creating a legal framework to develop the insurance market by resolving difficulties, providing support, promoting effective business growth, enhancing corporate governance, and simplifying administrative procedures.

For the non-life insurance sector the introduction of Circular No. 194 will truly have a positive effect in helping it minimize bad debts from unpaid premiums, which have become common over recent years and affected liquidity and operational efficiency.

Moreover, the circular included specific support to agents and details on bonuses and rewards they may receive, which must not be more than 50 per cent of whatever commission they receive on an insurance policy.

In order to secure the rights of customers and the reputation of the insurance company, the circular also indicates clearly how foreign insurance companies can issue certificates of authority to local agencies, which requires the name and issuance number of local agencies.

The circular also states that leaders of insurance departments and companies having total equity equal to legal capital are allowed to do business in the country. This article will tighten management due to subordinates having to complete all requirements regarding capital, management, and facilities, etc.

From June 1, 2016, non-life insurance agencies must separate their charter capital from premiums paid by customers.

Circular No. 194 also has requirements on the use of insurance experts in determining provisions and the ability to cope with losses, which aim to create transparency and clarify the profit and losses of each business.

Mr. Phung Ngoc Khanh, Director of ISA said the insurance sector must continue to record growth in a sustainable manner.

In this regard, the ISA will firstly focus on research to complete the legal framework and policies that create favorable conditions for non-life insurance companies.

Secondly, the ISA will try to simplify administrative procedures, strengthening risk management at insurance companies to create stable conditions for their operations and minimizing any unfair competition. It will also continue to issue regulations to encourage enterprises to develop new products and standardize certain insurance products to support welfare and social security efforts.

Thirdly, the ISA will amend and supplement procedures to strengthen corporate governance, to ensure transparency and the financial security of non-life insurance companies.

Mr. Khanh also said that, based on these three main issues, there have been seven key measures taken to amend and supplement Decree No. 45/2007/ND-CP and Decree No. 46/2007/ND-CP and nine key measures taken to amend and supplement Circular No. 124/2012/TT-BTC and Circular No. 125/2012/TT-BTC.

MoF has also been working with insurers on amendments and supplements to Circular No. 124/2012/TT-BTC and Circular No. 125/2012/TT-BTC, with conferences held and public surveys posted on its website to collect suggestions.

Vietcombank provides credit to PCC1

Vietcombank has signed a contract with the Power Construction JSC No. 1 (PCC1) to provide services and a credit package worth VND1.89 trillion ($86.65 million).

A long-term VND890 billion ($40.8 million) credit will be used for the Bao Lam 3 Hydroelectricity Project and a short-term VND1 trillion ($45.85 million) credit for working capital.

Vietcombank will also provide financial services to PCC1 such as underwriting, cash management, financial advisory, bond issuance, and foreign currency provision for its importing and exporting contracts.

PCC1 targets recording revenue of $1 billion by 2025 and to become one of five largest companies in Southeast Asia in terms of developing electricity and conducting engineering, procurement and construction (EPC) contracts, according to Chairman Mr. Trinh Van Tuan.

Mr. Tran Bao Toan has been appointed as Chairman of the Foreign Trade Development & Investment Corporation of Ho Chi Minh City (Fideco), after its Board of Directors accepted the resignation of his predecessor, Mr. Pham Van Hung.

Mr. Toan took up the new position for the 2014-2019 term on July 13.

A member of Fideco’s Board of Directors, Mr. Toan earned his PhD at St. Gallen University in Switzerland and has many years experience as a senior financial expert at major banks and investment funds in Switzerland and Luxembourg, such as Credit Suisse, Banque General du Luxembourg, and AKB. He was also a founder of HappyLand DC.

Established in 1989 as the Ho Chi Minh City Fisheries Development Corporation, Fideco gained approval to change to its current name in 1993. It specializes in investment in real estate projects and services, finance and financial services, and the development of educational projects, among others.

In the real estate sector it has developed large projects such as Fideco Tower in Ham Nghi Street in Ho Chi Minh City’s District 1, the Fideco Riverview residential building in the city’s District 2, and the Chon Thanh Industrial Park in Chon Thanh district, southern Binh Phuoc province.

According to the report presented to its 2015 annual shareholders meeting, the corporation recorded total revenue of VND53.9 billion ($2.47 million) and VND15.9 billion ($732,385) in profit after tax in 2014. It targets reaching VND66.4 billion ($3 million) in total revenue this year and VND30.6 billion ($1.4 million) in profit after tax.

Social housing falling short of needs

According to a study conducted by State Audit of Vietnam, even if social housing targets for 2015 were reached there would be a shortfall of 26,732 apartments, or 36.7 per cent of total demand.

Construction of new social housing and adjustments made to existing projects to turn them into social housing have failed to narrow the gap between supply and demand.

Working with management and operating organizations of nine projects in Hanoi that have been put into use since April 30, 2014, State Audit of Vietnam found that four projects had violated the housing use purpose. Specifically, 319 apartments (6.5 per cent) were made available to buyers outside of the targeted segment, 441 apartments (9 per cent) remained vacant, and five apartments (account for 0.1 per cent) were used for other purposes besides housing.

The nine projects audited receive government preferences totaling VND641 million ($29.4 million), cutting sale prices by 10-36 per cent. But the study by State Audit of Vietnam showed that prices are still beyond the reach of most households.

VBSP Hanoi on track in first half

On July 14 the Vice Chairman of the Hanoi People’s Committee Nguyen Van Suu held a meeting with the Hanoi branch of the Vietnam Bank for Social Policies (VBSP) on its performance over the first half of the year and its tasks for the remaining six months.

In the first half the branch provided significant funds to meet the needs of people in poor and special conditions. As at June 30 mobilized capital from the branch reached VND4.9 trillion ($228.7 million), up by VND181 billion ($8.4 million), or 3.8 per cent, compared to the same period last year.

The total balance due of 12 credit programs was VND4.9 trillion ($228.1 million) with over 300,000 borrowers, an increase of VND366 billion ($17 million), excluding the student loan program, and meeting 99.7 per cent of its target. In the first six months, through the 12 credit programs, the branch provided loans to more than 60,000 people in poor and special conditions.

In the first six months it also directed its transaction offices to reduce their overdue loans and established three working groups to supervise and manage these efforts. Total overdue loans as at June 30 were VND8.7 trillion ($406.8 million), accounting for 0.18 per cent of total loans.

In the remaining six months, VBSP Hanoi aims to deploy Intellect software applications to provide better services and professionalism at branches and transaction offices in districts and towns.

Speaking at the meeting, Mr. Suu also suggested VBSP Hanoi strengthen its communications via the media to help borrowers understand its policies and easily access loans. To help people escape from poverty and for students have the opportunity to learn, he asked the branch to check on remote areas to understand their circumstances and help poor people and students to access loans.

Hoa Lam begins work on new hospital

Hoa Lam Investment Development Corporation on June 14 began construction on a new international hospital at the Hi-Tech Healthcare Park in HCMC’s outlying district of Binh Tan.

The VND1.5 trillion (some US$68.8 million) Hoa Lam hospital will have 10 levels with total floor space of more than 35,000 square meters and cover over 1.5 hectares.

The 351-bed hospital is scheduled for completion late next year and will focus on cardiovascular, trauma and orthopedics, neurology and endocrinology.

With the cooperation of People’s Hospital 115 and other hospitals, the forthcoming Hoa Lam hospital will be able to help ease patient overloads and waits at public hospitals.

To ensure international-standard services for the new hospital, Hoa Lam is in coordination with foreign design and consulting companies, including Kume Sekkei Co. Ltd. and Global Health Service Network of the United States.

Hoa Lam international hospital is the second at the Hi-Tech Healthcare Park of Hoa Lam-Shangri-La Healthcare Co. City International Hospital at the park was put into service last year.

The Hi-Tech Healthcare Park worth over US$1 billion is being developed by Hoa Lam-Shangri-La Healthcare Co., a joint venture between Vietnam’s Hoa Lam and Shangri-La Healthcare Investment Pte. Ltd. of Singapore, to provide high-quality healthcare services for people in HCMC and neighboring areas. The park is located at 532A Kinh Duong Vuong Street, Binh Tri Dong B Ward with an area of 375,631 square meters. It was licensed in 2008 and expected to be finished after 10 years.

As scheduled, the healthcare park will comprise six hospitals with a total of 1,750 beds. Besides, it will feature four healthcare, support, educational and community facilities such as laboratory, medical suites, residences, serviced apartments, medical exhibition center, shopping mall, international school, residents’ clubhouse and helipad.

After completion, the project will provide jobs for around 10,000 people.

Vinh Tan 2 power plant pollutes air again

The government of Binh Thuan Province has urged agencies to tell the operator of Vinh Tan 2 thermal power plant to handle the environmental pollution caused by its waste.

The pollution at this power station made headlines months ago as local residents around the facility protested against the dumping of coal ash from the plant that is heavily polluting nearby households.

In a document sent to relevant agencies on July 14, Binh Thuan Province’s chairman Le Tien Phuong said the provincial authorities had reported to the Government the environmental pollution caused again by Vinh Tan 2 in Tuy Phong District.

The province also required Power Generation Corporation 3 (GENCO 3) to work with Vinh Tan 2 on solutions to fully solve dust pollution caused by coal ash from the plant in recent days, including a temporary halt to Generator No.2.

Phuong told the provincial Department of Natural Resources and Environment to cooperate with other departments and Tuy Phong authorities to inspect, supervise and regularly assess pollution levels when Generator No.2 works to have effective solutions to the problem in accordance with prevailing regulations.

Vietnam Electricity Group (EVN) picked China’s Shanghai Electric Group as the engineering, procurement and construction (EPC) contractor for Vinh Tan 2. The plant has been online for nearly one year with two generators having a combined annual generation capacity of 1,244 megawatts.

Air pollution caused by coal ash from the plant has hit around 1,370 households in nearby areas. Consequently, a large number of people in Vinh Tan Commune gathered on the National Highway section at the project site in mid-April to protest against the dust pollution.

Many people living near the plant claimed they have developed respiratory diseases since the plant came into operation, according to the authority of Tuy Phong District.

Currently, coal-fired power plants nationwide consume roughly 20 million tons of coal per year and discharge a total of three million tons of ash, most of it buried within their premises or transported to other places instead of being recycled.

Software glitches wrongly make firms tax debtors

Many enterprises have been mistakenly categorized as tax debtors due to glitches of the integrated tax management system (TMS) applied by tax agencies nationwide.

Le Xuan Duong, deputy director of the HCMC Tax Department, said at a review meeting on July 14 that hundreds of mishaps have been found with the electronic tax management system though it had already been piloted in some provinces before being applied nationwide.

For instance, enterprises already pay taxes but the system does not recognize this, thus making them tax debtors.

According to Duong, due to such errors, a considerable proportion of the current tax arrears in HCMC is incorrect. The department has asked the General Department of Taxation and the Ministry of Finance not to send notices of late tax payments to enterprises.  

As of June 30, tax arrears recorded by the electronic tax management system had amounted to VND22.94 trillion, up by VND3.43 trillion (17.5%) against late last year, Duong said.

Of the total, bad debt accounted for VND4.97 trillion, up 36.5%, and collectable taxes made up VND16.97 trillion, up 10%.

The HCMC Tax Department has released the list of 21 enterprises with huge tax debt of nearly VND300 billion. The names of 40 more tax debtors will be announced in the coming time.

At the meeting, HCMC vice chairwoman Nguyen Thi Hong told the departments of tax, finance and natural resources-environment to review housing projects whose land use fees have not been paid.

FDI mainly poured in manufacturing, processing

The Foreign Direct Investment (FDI) are being poured mainly into processing, manufacturing, real estate and retail sales in Viet Nam.

Accordingly, total newly-registered and additional capital reached US$1.19 billion in June, bringing the total figure in the first half of the year to US$5.49 billion, as much as 80.2% of the same period last year.

Of the figure, the newly-registered FDI attained US$3.83 billion while the additional FDI achieved US$1.65 billion, equal to 79% and 83% of the same period last year.

The total FDI disbursement was estimated at US$6.3 billion, a year-on-year increase of 9.6%.

According to the statistics of the Foreign Investment Agency, under the Ministry of Planning and Investment, the processing and manufacturing industry attracted 338 newly-registered FDI projects and had 190 ones added capital, worth US$4.18 billion, accounting for 76.2%.

The real estate sector ranked second with 18 FDI projects, valued at US$465.5 million, making up 8.5%.

The retail sales occupied the third place with total newly-registered and additional capital of US$276.5 million in 145 projects, accounting for 5%.

Vinh Long aims for 330 million USD export revenues

Exporters in the Mekong Delta province of Vinh Long are striving for 330 million USD from export turnovers in 2015, said a local official.

Director of the provincial Department of Industry and Trade Nguyen Minh Tho said, to reach the target, the province is carrying out a project to diversify staples with increased added value and expand markets for potential products, including sport shoes and sportswear, pharmaceuticals and medical equipment.

Local authorities have helped farmers to zone off cultivation land and build trademarks for agricultural produce and fruits, such as Tam Binh orange, Nam Roi and Vung Liem red-flesh grapefruits.

Vinh Long will also continue to improve market forecast activities and cooperate with neighbouring Ho Chi Minh City and Can Tho City in facilitating trade links with such traditional markets as Indonesia and the Philippines and seeking new markets in Africa.

Promoting the export of handicrafts, seafood and fruits to Europe, the Republic of Korea, China, France and Japan is another measure to that end.

Data released by the provincial Department of Industry and Trade show that, local exporters brought home 130 million USD in the first half of this year, equivalent to 40 percent of the yearly target but down 11.5 percent against the same period last year, mainly due to waning shipments of rice and seafood.

PetroVietnam targets 18.2 billion USD in revenue in last 6 months

The Vietnam Oil and Gas Group (PetroVietnam) targets nearly 383 trillion VND (18.2 billion USD) in revenue during the last six months of 2015, paying 87 trillion VND (4.1 billion USD) to the State coffer.

According to the first half year report, PetroVietnam’s revenue totalled 296.1 trillion VND (14.1 billion USD), paying 63.6 trillion VND (three billion USD) in tax and accomplishing 41 percent of its yearly target.

The group exploited 14.71 million tonnes of gas and oil in the first half of the year, 8.5 percent higher than its target for the period and representing an annual increase of 6.1 percent.

Of the figure, crude oil output amounted to 9.28 million tonnes while that of gas hit 5.43 billion cubic metres, 10.1 percent and 5.8 percent above the half year target, respectively.

Other manufacturing and supply fields including electricity, fertilisers, fibre and petrol all saw high growth of between 36 and 41 percent compared to the same period last year.

During the period, the group put into operation the Vung Ang 1 thermoelectricity plant and commenced construction on several projects such as the Song Hau 1 thermoelectricity plant, an oil and gas service port and a national oil and gas storage facility in Phu Quoc Island.

The group intends to expand its explorations of new oil fields to boost crude oil reserves to 35-40 million tonnes, optimise ongoing projects and continue structural reforms approved by the Prime Minister.

PetroVietnam will also conduct portfolio classifications and give priority to urgent initiatives or important projects in 2015.

Techcombank honoured with “Best Bank in Vietnam” title

Vietnam Technological and Commercial Joint Stock Bank (Techcombank) received the Best Bank in Vietnam award 2015 from the Global Banking and Finance Review.

Techcombank, who is currently serving 3.7 million individual customers in Vietnam, has successfully implemented new hi-tech and convenient products, including auto loan and housing loan packages together with a wide range of cards with outstanding benefits and exclusive privileges.

In addition, the bank has launched a raft of customised and excellent services such as money transfers through social networks (Facebook, Google+ or SMS) and cash withdrawals at ATMs without physical cards. The bank has been appreciated for providing e-banking solutions for enterprises to help optimise their benefits.

Earlier, the bank received a number of domestic and international valuable awards, recognising the bank’s strong commitments to long-term investment and sustainable development, paving way to satisfy the increasing demands of customers.

The Global Banking and Finance Review Awards were created to honour exceptional financial institutions. The “Best Bank in Vietnam” title bestowed on Techcombank will create an impetus for the bank to increase their product and service quality.

The signed and pending free trade agreements (FTAs) will not only provide benefits for the Vietnamese footwear and bag sector, but also a number of challenges due to export goods now requiring clear information on product origin, a conference in Ho Chi Minh City heard on July 15.

In the past five years, the Vietnamese Government has actively negotiated FTAs with numerous countries, with most of them impacting significantly on the development of the footwear sector, including the Trans-Pacific Partnership agreement and FTAs with the European Union and the Eurasian Economic Union.

According to the Deputy Head of the Ministry of Industry and Trade’s Import-Export Department Tran Thanh Hai, the footwear sector will be a priority during the negotiation process since it is one of Vietnam’s three key exports to the EU and the US.

In 2014, these two markets accounted for 67 percent of Vietnam’s total exports. However, the export tax currently imposed on footwear by the US remains high at 60 percent, and 3-17 percent in the EU.

Once the agreements are signed, export tax could be eliminated entirely, opening up more opportunities for the sector to increase its exports and expand its market shares, Hai said.

Additionally, the Association of Southeast Asian Nations (ASEAN), which includes Vietnam, has also signed FTAs with China, Japan, the Republic of Korea, India, Australia and New Zealand, and is currently negotiating a Regional Comprehensive Economic Partnership (RCEP) with the six aforementioned countries. This will establish a free trade area comprising 16 states and a total population of over 3 billion. As such, Vietnam will also have the chance to boost its exports to these countries.

Deputy Minister of Industry and Trade Ho Thi Kim Thoa suggested businesses anticipate and grasp the opportunities provided by the signed and pending FTAs to expand their export markets. Furthermore, Vietnamese footwear businesses should observe the domestic market, since supply only meets 50 percent of demand at present.

According to the ministry, the sector’s export turnover is estimated at 7.35 billion USD in the first half of 2015, up by 18 percent compared to the same period last year. Vietnam’s footwear export value totalled 5.9 billion USD and bag exports accounted for the remaining 1.45 billion USD.

Vietnam is the world’s third largest exporter of leather and footwear products, following China and Italy. Vietnamese products are available in more than 50 countries and territories throughout the world.

The ministry approved a master plan on the development of the sector until 2020 with a vision to 2030, with a focus on developing the support industry. Accordingly, several footwear and material processing industrial zones and complexes will be built with the purpose of providing materials and increasing the sector’s competitiveness.

HCM City, Japanese locality discuss cooperation prospects

Chairman of the Ho Chi Minh City People’s Committee Le Hoang Quan met with the visiting governor of Japan’s Gifu prefecture, Hajime Furuta, on July 15 to discuss the future of the two localities’ cooperation.

Gifu has strong advantages in hi-tech agriculture production and supporting industries, presenting huge cooperation potential between the prefecture and Ho Chi Minh City, Chairman Le Hoang Quan said in his remarks.

Quan briefed his guest on Japan’s investment in Ho Chi Minh City and noted that the city has established a Japan office at the municipal Department of Planning and Investment to provide support to Japanese investors and promote trade between the two sides.

He invited Gifu prefecture to attend the city’s International Travel Expo 2015 from September 10-12 as an opportunity for both sides to boost cultural and tourism cooperation.

For his part, Governor Furuta said Gifu hopes to expand its partnership with Ho Chi Minh City particularly in supporting industries, hi-tech agriculture and personnel training.

Gifu is renowned for its high-quality Hida beef, expected to be available in Vietnam in 2016, he added.

In addition, both sides agreed to speed up the signing of cooperation agreements in various fields.

Nghi Son refinery complex to double its capacity

Nghi Son Refinery and Petrochemical Limited Liability Company (NSRP) is considering doubling the capacity of its refinery complex, scheduled to start operations in July 2017, to 400,000 barrels per day (bpd) to meet growing domestic demand, said NSRP General Director Kazutoshi Shimmura.

The project was initially designed to produce 200,000 bpd, while local demand is estimated to hit half a million bpd in 2017.

The NSRP is a joint venture between the Vietnam National Oil and Gas Group (PetroVietnam) which hold a 25.1 percent stake, Kuwait Petroleum International (35.1 percent) and other two Japan-based companies, Idemitsu Kosan and Mitsui Chemicals (35.1 percent and 4.7 percent, respectively).

The joint venture is also looking to enter Vietnam’s petrol and oil retail industry which currently serves approximately 39 million vehicles nationwide.

Vietnam has about 12,000 petrol stations in total across the country, more than half of which have no added services, such as vehicle washing and maintenance.

The PetroVietnam owns up to 20 percent of the country’s petrol stations, presenting huge potential for the venture.

Vietnamese lychee makes first launch in UAE

Vietnamese lychee has made its way to the United Arab Emirates (UAE) this summer, available for sale in Dubai-based supermarket chain Choithrams, according to Cong Thuong (Industry-Trade) newspaper.

The newspaper, quoting the Vietnam’s Trade Office in the UAE, said the Trade Office and Phu Hung Trading and Service Joint Stock Company worked to help the fresh lychee gain access to the UAE and other Middle Eastern markets.

The lychee, grown under VietGAP and GlobalGAP standards, was shipped by air to Dubai to ensure quality.

V.L. Pamnani of Choithrams and other directors have also met with the Vietnamese Embassy and Trade Office in the UAE to discuss plans for lychee imports next season.

Several other fresh Vietnamese fruits were introduced to UAE partners in the meeting, including dragon fruits, rambutans, watermelons, bananas and seedless limes.

203 mln tonnes of cargo pass through sea ports in 6 months

Over 203 million tonnes of goods passed through sea ports nationwide in the first half of this year, reaching 57.8 percent of the set plan for the year and representing a year-on-year increase of 10.43 percent.

Sea ports in the northern city of Hai Phong, the southern province of Ba Ria-Vung Tau and Ho Chi Minh City, which combined handled nearly 80 percent of the total goods volume in the period, witnessed the largest growths.

Substantial increases in cargo throughput at HCM City sea ports during the reviewed period are attributed to municipal authorities’ strengthened investments in building, upgrading and utilising transport infrastructure facilities.

M&A forum slated for next month in HCM City

The 2015 merger and acquisition (M&A) forum themed “Count down to the next market boom” will take place in the southern metropolis of Ho Chi Minh City on August 6, bringing together senior officials, veteran experts and prominent analysts.

The forum will encompass a conference that examines ongoing capital flows, M&A trends and opportunities in potential fields, an M&A deal award, an expo-private meeting and M&A courses for businesses.

On the occasion, the annual M&A Outlook publication will be released.

Speaking to a press conference in Hanoi on July 16, Editor-in-Chief of Investment Review and Head of the organising board Nguyen Anh Tuan said M&A activities in Vietnam in 2015 and the next five years will take place as Vietnam’s economy is recovering and the nation fine-tunes its legal regulations.

Legal frameworks for takeover and buyout deals are being improved, given a raft of amended laws has been brought to life, including the laws on investment, housing and real estate investment, among others, he added.

Dang Xuan Minh, Deputy Head of the organising board, said M&A in Vietnam bounced back in 2014 with an annual 15 percent growth.

Each deal averages 11 million USD, higher than the 5-8 million USD level recorded three years ago.

SeABank wins dual international awards

The Southeast Asia Joint Stock Commercial Bank (SeABank) has been deemed the “Best Corporate Services Bank” in Vietnam for 2015 by the UK-based International Finance Magazine (IFM), the Lao Dong Newspaper reported on July 16.

SeABank was selected based on assessments of its financial indicators, business scale, network and banking services alongside its contributions to the local financial market.

Le Thu Thuy, Standing Deputy Chairman of the SeABank Board of Directors, was also honoured with an IFM title for the “Best Young Female Banking Leader”.

The IFM awards shine a spotlight on individuals and organisations who make a significant difference and add value to raise the bar in the financial industry locally and globally.

Plastic exports to Europe slump amid six-month euro slowdown

Plastic exports to the European market have felt the effects of the continuous decline of the euro over the past six months.

"Our profit from the European market in the first half of this year fell by 10 percent," said director of a plastic company in Hanoi.

He said that his company's European partners asked them to reduce their price but he couldn't due to the high cost of raw materials. Their partners then reduced orders from 5,000 tonnes of plastics to 3,000 tonnes, he added.

A representative of Nam Thai Son Import - Export Joint Stock Company, said that the downtrend of the euro affected his company because the company signed contracts with partners when one euro exchanged for 1.3 USD. At present, the exchange is around 1.1 USD, causing big losses for importers who are now rescheduling orders or changing to other commodities, the representative added.

The online newspaper Vnexpress quotes Tran Viet Anh, Deputy Chairman of the HCM City Rubber – Plastic Manufacturers Association, saying that, beside the loss from declining orders, enterprises now have to face competitiveness from more local suppliers in Europe.

European plastic producers might be able to provide products at a competitive price since the euro is low.

To overcome the new challenges, the chairman recommended Vietnamese enterprises, apart from expanding to other markets or their market share, seek cheaper materials and make changes in product structuring to lower the price for the European market, which is vital to Vietnam's plastic industry.

Estimates for export turnover in the plastic industry are over 1 billion USD for the first half of the year. According to the association, the European market accounted for 60 - 70 percent.

The industry saw a year-on-year increase of 10.3 percent as turnover hit 4.2 billion USD for the first half of the year. The industry earned 9 billion USD last year.

In the larger picture, growth also depends on how Vietnam competes with China, Japan and ASEAN countries. Exports to the European market fell across the East and South East Asia region.

Vietnam’s growth could surpass target this year

The Department of Analysis and Forecast under the National Centre for Socio – Economic Information and Forecast projected the nation's economic growth this year would reach 6.48 percent.

This projection was higher than the Government's target set at 6.2 percent this year.

The department said that the domestic economy was showing signs of recovery, along with the recovery of the world economy, adding that growth rates were forecast to rise higher than the previous year.

Growth would be fuelled by low commodity prices, foreign direct investment and demands from abroad, the department said.

The construction and industry sector, especially processing and manufacturing industries, would lead the nation's overall growth, while the service sector was forecast to post moderate growth.

However, the department noted that agricultural, forestry and fishery sectors were anticipated to face many difficulties as growth rates slow.

Meanwhile, the consumer price index was projected to increase 1.7 percent this year, as crude oil prices were expected to recover in the world market.

The centre forecast that Vietnam would run a trade deficit of some 8.77 billion USD this year, with an export turnover expected at 165 billion USD and import turnover at 174 billion USD.

Further, credit growth in 2015 was forecast between 13 to 15 percent, 1 percentage point higher than last year. However, difficulties would continue for businesses.-

Looming FTAs drive cotton rush

Several domestic and foreign-invested cotton projects are rushing to begin operating in anticipation of competing across borders after Free Trade Agreements (FTAs) go into affect.

Statistics from the Ministry of Industry and Trade showed that total investment of FDI in the country was US$5.49 billion for the first half of the year. Of this, the investment in the garment and textile sector was US$1.12 billion.

Notably, two of the largest FDI projects in the period sought to build cotton and fibre factories, including Hyosung Dong Nai fibre production plant financed by Turkey with an investment of $600 million, along with the $160.8 million Lu Thai cotton factory.

Further, several large local businesses have sought to invest in cotton production plants in a bid to participate in the industry and increase their competitiveness.

The Ky Cotton Company, a joint venture with Uni Industrial&Investment Corporation, invested $90 million to build a cotton, fibre and dyeing factory in the southern Tay Ninh Province's Thanh Thanh Cong Industrial Park. It is expected that the factory will produce 15 million kilos of cotton and fibre, along with 12 million kilos of cloth yearly, as it comes into operation.

In addition, Duc Quan Investment and Development Company also invested $40 million into the Fortex 6 plant. The factory is scheduled to help the company increase turnover of 30-40 per cent as it becomes operational in the first quarter of 2016.

Meanwhile, Dang Phuong Dung, general secretary of the Vietnam Textile and Apparel Association (VITAS), told Hai Quan (Customs) Newspaper that Vietnam has called for investment into producing materials for the garment and textile sectors, and to embrace both opportunities and challenges from FTAs.

Figures released by VITAS showed that in the first five months of the year, the country's imports of cotton and fibre were higher against the same period last year, both in terms of quantity and value.

However, the country's exports of these items were also on the rise, with 381,000 tonnes worth US$1.01 million, posting 20 per cent and 5.4 per cent year-on-year in quantity and value, respectively.

China was the largest importer in the five-month period, following by the Republic of Korea, Thailand and India.

Nguyen Ngoc Bach, head of the Viet Thai Export Garment Company's marketing department, said 60 to 70 per cent of garment material supplied to the country's textile sector came from China, which has not been part of the TPP block. Using Chinese textile materials could result in Vietnamese garment and textile products being in violation of the requirement for where cotton originates under the TPP. It was for this reason that Vietnamese garment and textile firms have hurried to invest in cotton factories.

He said several garment and textile firms have not paid much attention to cotton projects and mostly outsourced work through foreign contracts.

Garment companies should change their direction and gradually reduce outsourcing to increase the value of their products.

Freight transport moves to e-commerce

A transport e-commerce market place that enables all major stakeholders in the freight transport business to easily link up is expected to be begin its initial operating period in 2016.

Nguyen Van Quyen, Directorate for Roads of Viet Nam (DRVN) Deputy General Director, was quoted by Transport newspaper as saying that the formation of the online transport market aimed to create a breakthrough to enhance the economy's competitiveness, as transparency was expected to be enhanced and transport fees lowered.

Quyen said the pilot implementation of the online transport market was approved by the transport ministry, adding that the legal framework, along with management software, were being developed.

Following the roadmap, the transport market would become operational at the beginning of next year, Quyen added.

The platform was planned to be built for operation in major transport centres, such as Ha Noi, HCM City, Hai Phong, Da Nang and Can Tho.

Quyen said that management of road transport remained outdated and decentralised, which failed to ensure the quality of service, traffic safety, as well as healthy competition among providers.

The formation of transport market places would help tackle these problems.

Do Cong Thuy, Deputy Director of DRVA's Transport Department, said the transport market place was an e-commerce platform that connected all stakeholders in the freight transport business, including logistics service providers and customers.

"Freight transport firms which join the market place must be checked in terms of capacity, prestige and commitments," Thuy said.

The platform would enable transport firms to connect with each other to prevent their returning from deliveries with empty trucks, which was expected to help lower fees.

Sharing Thailand's experiences at a recent conference held by DRVN, Rutth Banmyong from Thammasat University noted that the transport marketplace was founded in Thailand in 2006 to resolve a problem in which up to 66 per cent of freight trains ran empty on their returns from delivering cargo.

Freight transport demands and logistics information of service providers would be available in the market place for selection and negotiations to optimise freight transport efficiencies, which would benefit all parties, according to Banmyong.

Meanwhile, Nguyen Van Thanh, president of Viet Nam Automobile Transport Association, said the transport market place would help prevent unhealthy competition among logistics service providers.

Dollar forecast to rise against dong

The value of the US dollar against the dong will increase at least 3 per cent this year, the Vietcombank Securities Co (VCBS) has forecast.

VCBS anticipated the rise despite a pledge by the State Bank of Vietnam (SBV) to ensure that devaluation of dong against dollar remains less than 2 per cent this year. With the dong devalued by 1 per cent twice already, in January and May, SBV has no room left for more foreign exchange adjustments this year.

The next adjustment will mainly depend on when the US Federal Reserve decides to raise its benchmark interest rate this year as the US economy continues to gain strength, VCBS said. The steady rise in the value of the dollar against other major currencies would be a key factor putting pressure on Vietnam's exchange rate for the dong and on the country's forex market in the remaining months of the year, it forecast.

The dong's exchange rate will continue to be affected negatively by the rise in the value of the dollar as the Fed is expected to take the first step to raise the federal bond rate at some point later this year, according to VCBS. Moreover, many major countries in the world still have to take measures to loosen and stimulate their economies, due to instability, a slowdown or a recession, VCBS said.

Besides the low interest rate for dong deposits and the speculation over the dollar, Vietnam's exchange rate for the dong in the remaining months of the year will face pressure from the significant trade deficit, which reached US$3.7 billion in the first half of the year, VCBS said.

However, VCBS also cited some factors that would help reduce pressure on the forex market in the remaining months of the year.

Inflation is forecast to remain at a low rate this year while remittances from abroad could rise 10 per cent in 2015 to reach $13-14 billion, it said. The disbursement of FDI capital this year is also expected to be positive, with $6.3 billion reported in H1, it added.

In addition, medium- and long-term foreign capital flows into Vietnam are expected to rise significantly thanks to the signing of trade agreements with major trading partners and the new regulation giving more room to foreign investors to trade in the stock market, according to VCBS.

After the two devaluations, the reference rate of the dong against the dollar currently stands at VND21,673 per dollar. The dong is allowed to trade as much as 1 per cent either side of this rate.

Commercial banks currently trade the dong at VND21,830-21,840 per dollar, close to the ceiling rate of VND21,890.

VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR