Vietnam attracts US$10 bil in FDI in eight months

In the first eight months of the year, foreign direct investment (FDI) in Vietnam dipped 19% compared to last year’s corresponding period to US$10.23 billion, according to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment.

Out of 51 nations and territories from around the globe investing in Vietnam during the eight month period, the Republic of Korea (RoK) took the lead with FDI of US$3.22 billion, comprising 31.5% of the cumulative total for the period.

The RoK was trailed by Japan with US$1.27 billion in FDI, Hong Kong at US$1.19 billion and Singapore at US$972.8 million.

The processing and manufacturing industries, with 492 new projects and FDI of US$7 billion, was the leading sector attracting FDI, accounting for 68.4% of the cumulative total for the eight month period.

The real estate sector ranked second with 23 projects at US$1.14 billion, followed by the construction sector with 74 projects at US$552.8 million.

The MPI also reported that as of the end of August, the US was the seventh largest investor in Vietnam with 703 projects  worth US$10.73 billion.

The bulk of US investment was in the service, manufacturing and real estate sectors.

Japanese firm keen to invest in Dung Quat EZ

Sojitz Corporation based in Tokyo, Japan plans to invest in wood processing and paper pulp mills in the Dung Quat Economic Zone.

The information was unveiled at a recent meeting between leaders of the management board of the Dung Quat Economic Zone and representatives from Sojitz group.

So far, Sojitz group has invested in a number of infrastructure projects in industrial parks in Vietnam and in projects related to forests and wood production. It has also conducted a feasibility study to cooperate with India’s JK group for a Pulp Paper factory with a design capacity of 150,000 tonnes per year in this zone.

The management board asked Sojitz group to invest in its advantageous areas such as pulp paper production, MDP wood production, chemicals, infrastructure, garments and textiles.

Sojitz is Japan's leading group involved in multi business fields such as machinery and equipment production, metal, energy, chemicals ,infrastructure and agro- forestry – fishery industry and consumer goods.

The group has 898 subsidiary firms and affiliates in Japan and around the globe with 16,273 employees and total asset worth JYP 2,210 billion.

Office rentals in Vietnam higher than Malaysia, Philippines

Office rental fees in Hanoi and Ho Chi Minh City averaged US$42 and US$48 per square metre, respectively during the first half of the year and were higher than comparable space in Kuala Lumpur (Malaysia) and Manila (the Philippines).

A recent research report by Savills also showed Hong Kong (China) had the highest office rentals at US$189.4 per square metre, followed by Tokyo at US$145 and Singapore at US$125 per square metre.

The research report said office rental prices in Vietnam have good competitiveness with other regional countries. With improved macro-economy, the office leasing market in Vietnam is now attracting many foreign investors.

Savills plc is a global real estate services provider listed on the London Stock Exchange. It has an international network of more than 600 offices and associates throughout the world offering a wide range of specialist advisory, management and transactional services.

Experts talk up VN as investment destination

Viet Nam, with its 90 million population and growing affluence, and more focused efforts to equitise State-owned enterprises and restructure banks, offers great opportunities for portfolio investors despite some hurdles, a seminar that opened in HCM City yesterday heard.

Georges Joseph Ghorra, an executive from the IFC, a World Bank arm, told the two-day Gateway to Vietnam: Rediscovering New Investment Opportunities that his institution "is convinced of the long-term growth prospects in Viet Nam."

He spoke about the country's "golden demographic structure" with an abundant workforce of 76 per cent of its population and a young and growing middle class with increasing disposable incomes.

Macroeconomic stability has been restored with single-digit inflation while the reform process continues, he pointed out.

The Vietnamese market is currently trading at attractive earnings multiples compared to other markets in Southeast Asia, he said, pointing out further that Moody's and S&P have upgraded the country's ratings respectively to B1 and BB-, indicating stable.

The financial market with the recapitalisation and consolidation of banks under way; the infrastructure sector including hydropower/renewable energy, waste treatment, and logistics; manufacturing; agribusiness; and services all offer investment opportunities, he said.

Doan Hansen of global management consultancy McKinsey & Company said with the rapid urbanisation, 10 million people are expected to move to urban areas by 2030, doubling the number of consuming households.

"Viet Nam is primarily in the hot zone for fast moving consumer goods with strong growth expected to continue," she said, asking, "Are you well positioned to meet the rapidly changing needs of Viet Nam's consumers, and how can you proactively support and benefit from the growing infrastructure needs?"

Labour cost is still low but so is productivity, she said.

"The country needs transition to manufacturing and exporting more complex and higher value products."

Ghorra listed Viet Nam's underdeveloped capital markets and cap on foreign ownership in listed companies (30 per cent for banks and 49 per cent for others) as the main challenges facing investors.

The slow pace of bank restructuring and SOE privatisation, underdeveloped infrastructure, and low competitiveness when the country joins free trade agreements are the other challenges, he said.

More than 430 SOEs were earmarked for equitisation in 2014-15, but in the first half of this year only 31 made initial public offerings.

According to stock brokerage Saigon Securities Inc – which is organising the seminar attended by around 400 participants — foreign investors' participation in those IPOs was insignificant, with only two of them, Viglacera and Cienco 4, attracting their interest.

Vo Tri Thanh, deputy director of the Central Institute for Economic Management, said it is more important that the assets of equitised companies are used efficiently than the number of equitising SOEs.

Valuation of the SOEs to be equitised is a challenging task, he added.

Alan Phan, managing director of Alan Phan Associates, said the valuations should be decided by the market. He supposed that the IPO of Vietnam Airlines would be made in a foreign stock market with underwriting by an international institution since it would encourage investors both in and outside Viet Nam because of the transparency norms there.

Vu Bang, chairman of the State Securities Commission, said the systems employed by the country's two stock exchanges in HCM City and Ha Noi and securities companies are capable of handling the IPOs of SOEs.

"It is regulated that equitised companies must list within a year after their IPOs, and when a SOE makes its equitisation plans, it must have a listing plan as well."

But he wants the time frame reduced, proposing to the Government that equitised companies should list or trade on UpCom not later than 60 days after their IPO to facilitate liquidity to attract investors. The Government is considering his recommendation.

Bad debts or non-performing loans also offer opportunities for foreign investors, experts told the seminar.

Nguyen Khac Hai, deputy CEO of SSI Asset Management Company, said the Vietnam Asset Management Company has bought VND50 trillion (US$2.38 billion) worth of debts from banks since it began operation over a year ago, but has yet to resell any of it.

Obstacles to reselling include a lack of clarity on how to value the debts and how foreign investors can buy them.

More firms receive customs priority status

The General Department of Customs yesterday announced it has approved the applications of eight more companies for expedited customs procedures.

Granted Authorised Economic Operator (AEO) status were Samsung Vina and UMC Viet Nam, seafood producers Minh Phu Hau Giang and Soc Trang, and food producer Sao Ta, along with Hoa Sen Group, Hoya Glass Disk Viet Nam and Yazaki Hai Phong Viet Nam.

This has increased the number of Vietnamese enterprises with AEO status under the programme, first applied in 2011, to 24 among the country's more than 50,000 exporting and importing companies. Companies with AEO status account for 23 per cent of Viet Nam's total export revenue.

In ceremonies marking the granting of AEO status yesterday, Hoang Viet Cuong, the department's deputy general director, said the programme was tailor-fit for global development trend and recommendations from the World Customs Organisation.

The policy also reflects a change in the management style of the State, which considers enterprises as partners rather than entities placed under State management.

Cuong revealed that the department would be expanding the programmes scope to allow more enterprises to qualify. Instead of restricting its focus on direct producers, the programme will include companies involved in international supply chains such as ports trading and logistics.

The department will also propose to the Government a project for Viet Nam to pursue mutual recognition agreements with foreign countries, to enable AEO companies based in the country to benefit from customs priorities in those foreign countries, he added.

Vu Van Thanh, general director of Hoa Sen Group, said the programme helped companies to increase competitiveness through savings on costs and the reduction of risks and volatility.

Thanh added that to qualify for the programme, companies must follow strict regulations on production, management, compliance with laws and contributions to the country's economic development.

The recognition will raise the reputation and prestige of companies among customers, partners and State management agencies.

The department said it would try to increase the number of companies with AEO status to 30 by year-end.

Real estate signals recovery

The Vietnamese property market has shown signs of recovery after a long period of stagnation, heard a symposium held yesterday in HCM City.

Speaking at the "Viet Nam Real Estate Symposium, 20 years looking back and two years looking forward" symposium", Nguyen Tran Nam, deputy minister of Construction, said that property prices had not increased and were now selling at reasonable prices, especially in the mid-range housing segment.

As for the high-end market, the prices of property projects in the western area of Ha Noi fell dramatically, by 60 per cent from 2011-2013. For the first half of the year, prices remained stable, with some project prices increasing by 1 – 2 per cent only.

The number of transactions had gone up as well, he said. Around 5,100 transactions were completed in Ha Noi in the first seven months of the year, or double the figure over the same period last year.

In HCM City, there were 4,500 transactions in the first seven months, a rise of 30 per cent compared to the same period last year. As of August 20, the total value of real estate inventory was VND82.295 trillion (US$3.9 billion), a drop of 46.254 trillion ($2.2 billion) compared to the first quarter of last year. From December 31, 2013 to June 30, 2014, the total credit balance for property had increased by 7.7 per cent to reach VND282.2 trillion ($13.3 billion). At least 20 per cent of the government's VND30 trillion $1.4 billion) housing credit package had been disbursed.

The property market has attracted a large amount of foreign direct investment (FDI). There are a total of 427 FDI property projects in the country, with total registered capital of $51 billion, ranking second after the processing industry.

Foreign direct investment in the real estate market accounts for 21 per cent of total foreign direct investment in Viet Nam. According to Savills Viet Nam, the office-for-lease segment grew by 1.6 to 5 per cent in most big cities in Asia Pacific, including Ha Noi and HCM City, in the first half of the year.

Troy Griffiths, deputy managing director of Savills Viet Nam, said Viet Nam's property leasing prices were competitive compared to other countries in the region, especially in the hotel, retail and serviced apartment segments.

Marc Townsend, managing director of CBRE Viet Nam, said that HCM City and Ha Noi were still the top target markets for property retailers.

Experts who spoke at the meeting said that high-end projects of a large scale were still the primary focus of developers.

However, only 20 per cent of consumers can afford property in this segment, they said. Also, many property investors have to rely on short-term loans with high interest rates, while many small businesses that have weak financial capacity continue to take part in the market.

The country now has 15,316 property businesses. Of that number, 8,603 businesses have chartered capital of less than VND20 billion ($944,000).

At the meeting, many foreign investors expressed concerns about lack of transparency and complicated administrative procedures in the real estate market.

They said these a more open investment environment should be created.

To resolve these issues, the Vietnamese Government has issued many policies and incentives to ensure sustainable development of the market.

These include measures to control supply-demand balance; review and evaluation of projects; resolution of non-performing loans; and more loans to customers so they can buy houses.

The Ministry of Construction has also advised the Government to amend real estate business laws and housing laws with content that provides more favourable conditions to foreign businesses and foreigners to invest in real estate as well as rent and lease houses and land in Viet Nam.

The symposium, held by the Australia Chamber of Commerce in Viet Nam (Auscham) aimed to discuss the latest development in Viet Nam's property sector, market insights, advice on attracting local and foreign investors, an upgrade on Law and Tax changes, and networking opportunities with key parties and well-known figures in the real estate industry.

Rice exporters target stable supplies

The State should control the flow of rice exports through Viet Nam's border gates to ensure enough supply for export processing, experts said.

The Department of Plantation under the Ministry of Agriculture and Rural Development said provinces in the Cuu Long (Mekong) Delta region expected a harvest of 8.3 million tonnes of commercial rice for the entire year, including 7.2 million tonnes from winter-spring and summer-autumn crops and 1.1 million tonnes from autumn-winter and winter crops.

The ministry reported that Viet Nam exported 4.24 million tonnes of rice in the first eight months of this year. In the coming months, exporters must deliver 1.77 million tonnes of rice under export contracts, and supply for export processing should come from their stockpile as well as purchases from farmers, the ministry said.

However, the department noted that numerous enterprises were finding it difficult to purchase commercial rice from farmers for export processing because of scant supply from the farmers.

The department said the enterprises could buy more rice from farmers in the future if rice exports flowing through border gates were placed under State control. To date, there are no exact figures on the volume of rice exports passing through border gates.

A rice expert said the nation has so far harvested seven million tonnes of rice while the total volume of rice exports reached 4.24 million tonnes in the first eight months of the year. This means the domestic market received two million tonnes of rice from farmers, excluding the inventory of enterprises.

Neither the enterprises nor the state offices have detailed information on the exports, added the expert.

Huynh The Nang, general director of the Southern Food Corporation (Vinafood 2), said the company has proposed to the Government and the Ministry of Industry and Trade that domestic rice exporters were resorting to the sale of the staple through border gates during hard times, but control over exports passing through border gates was needed to ensure supply for export processing enterprises.

According to the Viet Nam Food Association, Vietnamese rice producers aim to export 650,000 tonnes of rice in September. In the last quarter of 2014, they hope to export 1.4 million tonnes of rice, bringing the country's annual rice export volume to 6.3 million tonnes.

The VFA said the average export price of Viet Nam's rice in the first eight months of this year had a year-on-year increase of US$2.95 per tonne to $431.38.

In August, Viet Nam exported 627,100 tonnes of rice worth $270.35 million. The nation's largest customer was the Philippines, followed by African countries, China, Malaysia and Indonesia.

Binh Dinh sets up 3 new industrial complexes

The People's Committee of the central province of Binh Dinh has decided to establish three new industrial complexes, according to head of the provincial Department of Trade and Industry Nguyen Kim Phuong.

The 30-hectare An Mo industrial complex in An Nhon town, worth VND47.8 billion (US$2,246 million), will process agricultural and forestry products and construction rock.

The 35.7-hectare Phu An industrial complex in Tay Son District will focus on mechanical goods, construction material, agricultural and forestry products and garments.

The 75-hectare Binh Duong industrial complex in Phu My District will produce agricultural products for export, mechanical wares, carton casks, and synthetic laminated steel.

The project aims is the province's latest effort to industrialise and modernize its economy.

Consumers take advantage of borrowing consultancy

More than 5,500 people in six provinces in the central and Mekong Delta regions have benefited from a programme by finance company Home Credit that offers consultancy on the legal aspects of consumer borrowing.

"Think it through, Sign it wisely" teaches people what to look for while signing a credit contract with a lender.

It has been organised through August and September for a second year after being introduced in Ha Noi and HCM City last year.

This year it will also be taken to Ca Mau, Can Tho, An Giang, Dac Lac, Hue, and Da Nang.

In another development, Home Credit has co-operated with the Viet Nam Standards and Consumers Association (Vinatas) to publish a new guidebook on personal finance.

Hoa Binh benefits from foreign-invested projects

Foreign investment projects in the northern province of Hoa Binh have made substantial contributions to the State budget while creating jobs for more than 10,000 local labourers, according to the Director of Hoa Binh Management Board of Industrial Parks Tran Van Phuc.

Hoa Binh province currently is home to 22 foreign-invested projects worth US$350.3 million.

Japan and the Republic of Korea together account for 19 projects, including a $75 million automobile part factory invested by Nissin and a $36 million aluminium plant of Almine group. Most recently, HNT Vina Co. Ltd., from the RoK, officially opened a $20-million factory that manufactures built-in cameras for mobile phones in the beginning of this month. The facility has a capacity of of 180 million units per year and employs 2,000 labours.

Military Bank wins APQO award

The Vietnam Military Joint Stock commercial Bank (MB) has received the 2014 World Class title from the Asia Pacific Quality Organisation (APQO) in recognition of its quality management.

This is the highest award given by APQO to a business under the framework of its annual Global Performance Excellence Award (GPEA).

After receiving the 2013 National Quality Award, MB was the sole bank in Vietnam nominated for the award.

T he Vietnamese bank met all seven evaluation criteria of the APQO, including leadership, strategic planning, customer and market focus, measurement, analysis and knowledge management, human resources development, process management, and business performance.

The awards ceremony will take place in Kuala Lumpur , Malaysia as part of the 20th APQO International Conference on Quality from November 23-26.

At present, MB is one of few Vietnamese banks which have applied several international quality standard systems such as ISO 9001 and Lean-Six Sigma in their business procedures.

It has also used the Key Performance Indicators (KPI) on each unit and individual in order to better manage human resources.

Vietnamese enterprises urged to expand business in Russia

Vietnamese enterprises should expand their operations and increase their presence on the Russian market despite the challenges involved, Deputy Minister of Industry and Trade Do Thang Hai said in a seminar in Moscow on September 15.

Russia is working to intensify production, gradually reduce its dependence on Europe and boost cooperation with Asian countries, including Vietnam, its comprehensive strategic cooperation partner.

Additionally, Vietnam and the Customs Union of Russia, Belarus and Kazakhstan are entering the seventh round of negotiations on a free trade agreement, which is expected to be signed early 2015, thus facilitating Vietnamese businesses’ ventures in Russia.

Some 80 Vietnamese businesses operating at home and in Russia attended the seminar, which aimed to facilitate the exchange of opinions on the opportunities, potential and advantages of investing in and exporting goods to Russia. The seminar also came up with a number of effective measures to strengthen investment and trade between the two respective countries.

At the event, representatives of the Bank for Investment and Development of Vietnam (BIDV) pledged to provide a credit package worth 3 trillion VND (141 million USD) for export to Russia and another package of 50 million USD for a light industrial zone project in the country.-

Tay Ninh draws investment in textiles and support industry

The southern province of Tay Ninh is undertaking maximum efforts to attract investments to its textiles and support industries in a bid to boost the province’s economy and promote these sectors.

Accordingly, the Tay Ninh People’s Committee ratified the establishment of a textile and support industry area of 278ha in Thanh Thanh Cong industrial zone. Furthermore, 100ha of the Moc Bai Border Gate Economic Zone have been converted into a TMTC textile and support industry zone.

Chairwoman of Tay Ninh’s People’s Committee Nguyen Thi Thu Thuy said the textile industry can have extremely negative impacts on the local environment, particularly the dyeing process. Therefore, enterprises investing in the locality will have to obey strict rules on waste water treatment.

Recently, six investors put close to 1.2 billion USD into the textile and support industry area in Phuoc Dong Boi Loi Industrial Zone (Go Dau District). A number of fabric manufacturing facilities and suppliers have begun their operations here, creating jobs for more than 10,000 people.

Vietnam to export lychee, longan to US from October

Vietnamese fresh lychees and longan will be sold in the US from October 6, on the condition that the products meet the country’s strict food safety and hygiene standards.

Under an amended regulation of the Animal and Plants Health Inspection Service (APHIS), an agency of the US Department of Agriculture (USDA), all Vietnamese agricultural products entering the US market must originate from a cultivation area that is registered with and monitored by Vietnam’s Plant Protection Department (PPD). Furthermore, each shipment of products must include a certificate issued by the PPD.

Most importantly, the fruits must be in strict compliance with US regulations on pesticides.

The PPD, which is under the Ministry of Agriculture and Rural Development (MARD), is working to provide lychee and longan farmers with the appropriate cultivation, harvesting and preservation techniques to meet the requirements of international markets, such as the US.

The Department has teamed up with APHIS in Vietnam to devise a list of regional codes for lychee and longan in the north and south of Vietnam before the products are officially exported to the US.

Vietnam aims to ship approximately 600 tonnes of lychee and 1,200 tonnes of longan to the US per year, according to MARD.

Lychees and longan are Vietnam’s key fruit exports, along with dragon fruit, bananas, mangos, star fruit, rambutan and grapefruit.

Vietnam expects to generate 1.2 billion USD in revenue from fruit and vegetable exports in 2014.

Vietnamese Business Association debuts in Australia

An Australian chapter of the Vietnamese Business Association was recently launched aiming to serve as an economic bridge between the business communities of the two countries.

Speaking at the launching ceremony in Sydney, Vietnam Ambassador to Australia Le Thanh Nghi unveiled the newly established association’s 12-member executive board, noting Mr Le Huu Canh was elected as head of the chapter and VBAA Vice President.

The VBAA is expected to continue to set up three additional chapters in Brisbane, Perth and Adelaide in the coming time, Ambassador Nghi said.

Nghi affirmed the move evidences that the Overseas Vietnamese (OVs) community in Australia is an influential and driving force in the Australian business community, helping to create opportunities for OVs entrepreneurs to successfully operate businesses in the host country for the mutual benefit of both nations.

VBAA President Tran Ba Phuc in turn acknowledged the significant contributions of the large OVs community living in Sydney, the leading trade city of Australia.

He emphasised the formation of the chapter should greatly assist in meeting the increasing demand of the Vietnamese community both at home and abroad for the expansion of business operations in Australia.

Marine logistics complex under construction in Cam Ranh Bay

Tan Cang – Petro Cam Ranh Company in the central province of Khanh Hoa is implementing a VND 12trillion (US$567 million) logistics complex project in Cam Ranh Bay.

It includes three phases. In the first phase,  a 54 hectare logistics service port is expected to complete in early 2016 to receive the largest vessels including aircraft carriers and nuclear submarines.

The port will provide essential items, electricity, water, gas, substitute accessories and equipment for all kinds of vessels and health care, sport and amusement services. It will ensure security, receive officials, crewmembers and visitors also.

The second phase will construct a shipbuilding site and the third phase is planned to start a repair shop for oil and gas works.

Food, beverage industry sees growth

The Ministry of Industry and Trade said the food and beverage sector has continued to increase in quantity and quality.

The food and beverage sector is considered as potential industry in major cities of the country which have improved living standards.

It is forecast that Vietnamese people will consume more food in the period 2011-2016. The food proportion will increase by 5.1 percent. It is estimated that the industry’s turnover will reach US$30 billion.

Consumption per capita surges by 4.3 percent a year. It is predicted that for 2011-2016, the industry’s sale will hike by 7.5 percent and the turnover will increase by 10.5 percent.

Soft drink industry is forecast to post an increase of 8.2 percent in turnover and of 6.3 percent in sales.

Along with the development of the food and beverage industry, the equipment and packaging have seen the drastic growth.

Site clearance done for Nhon Hoi oil refinery project

Site clearance has been done over 14,000 hectares for Nhon Hoi oil refinery project in the central province of Binh Dinh, said Mr. Le Huu Loc, deputy chairman of the province People’s Committee.

The committee and investors-the Petroleum Authority of Thailand (PTT) and the Saudi Arabian Oil Company have recently submitted a project’s detailed feasible report to the Ministry of Industry and Trade.

According to the feasible report, the refinery’s capacity will reach 400,000 barrels a day, equivalent to 20 million tons per year.

Total investment capital is estimated at US$22 billion in the first phase. PTT said that the refinery will be built with advanced technologies, which can refine both heavy sour and light sweet crude oil from the Middle East, South America, Southeast Asia and West Africa.

The project is expected to contribute US$4-5 billion in Vietnam’s Gross Domestic Product annually, and create 35,000 jobs on its construction site and 4,000 stable jobs after completion.

Refined products will be exported to the South Korea, China and the US.

Earlier via a proposal from the Binh Dinh Province People’s Committee, the Ministry of Finance has supplemented the project to the Vietnam’s oil and gas development plan.

The ministry said that they will propose the Prime Minister to provide the Nhon Hoi project with incentives as other refinery projects like Nghi Son, Dung Quat and Vung Ro.

Besides, the Nhon Hoi oil refinery project will also be enjoyed other preferential policies such as tax exemption and reduction for being located in the area with disadvantageous socioeconomic conditions, added the Ministry.

Japan, South Korea, Thailand speeds up investment in Vietnam

With recent merge and acquisition deals in Vietnam, Thailand has become a merging name, besides two long term investors Japan and South Korea, who are also speeding up investment in the country.

Japan was reported to be the largest foreign investors in Vietnam in 2012 and 2013.

According to the Vietnam’s Department of Foreign Investment Department under the Ministry of Planning and Investment, Japan ranked third as of June this year with the total investment capital of US$800 million. This is a reduction over the same period last year amid the Yen devaluation.

However Japan is still leading in the number of FDI projects in Vietnam with over 2,300 projects worth US$35 billion.

Japan has so far invested in 18 out of 21 economic sectors in Vietnam. Of these, manufacturing and processing see first with US$30 billion, which is followed by real estate with US$ 1.4 billion and construction with US$ 1.05 billion.

The Japanese Commerce and Industry Department has recently revealed that 30 percent Japanese businesses who are investing abroad consider Vietnam as their first choice.

A survey by the Japan External Trade Organization shows that 70 percent of Japanese companies in Vietnam want to broaden their trading.

Meanwhile, the South Korea has always been listed the top five FDI investors in Vietnam in recent years.

In the first half this year, the South Korea took the lead in 41 countries and territories investing in Vietnam. The country’s investment touched US$1.55 billion accounting for 23 percent of the total FDI capital in Vietnam.

At present, 3,300 South Korean companies are pouring their investment captial in Vietnam. Among them are Samsumg, LG and Lotte. They are employing over 500,000 workers and contribute in 30 percent Vietnam’s export value.

Before the purchase of Metro Cash and Carry Vietnam by Berli Jucker (BJC) Group, Thailand businesses had carried out similar deals in the S-shaped nation.

Thailand had 333 FDI projects with US$6.46 billion by the end of last year, ranking tenth out of 101 countries and territories and second in ASEAN nations that are investing in Vietnam.

Workshop highlights Vietnam’s tourism potential

Vietnam’s tourism potential and its cultural heritages were introduced at a workshop in Tokyo on September 12 as part of the 2014 Vietnam Tourism-Cultural Days in Japan.

Addressing the event, Minister of Culture, Sports and Tourism Hoang Tuan Anh said Japan is one of the biggest and most important markets for the Vietnamese tourism industry, as demonstrated by the continuously increasing number of Japanese tourists visiting Vietnam in recent years.

He highly valued the efforts of Japan’s authorities and businesses in helping promote Vietnam’s tourism, affirming that the country still has more potential to explore, with many new destinations developed recently.

In the future, the sector will focus on improving the quality of services and increasing its efforts to promote Vietnam’s image amongst Japanese holiday-makers, Anh said, adding that it welcomes feedback from tourism authorities and travel agencies in order to make Vietnam a favourite holiday destination of Japanese tourists.

Meanwhile, Ambassador Doan Xuan Dung pledged to do his best to facilitate the visa application processes for Japanese nationals.

Binh Duong targets $1.7b in FDI

The southern province of Binh Duong hopes to attract US$1.6-1.7 billion in foreign direct investment this year, People's Committee's Chairman Le Thanh Cung has said.

Speaking at a ceremony to mark the third phase of issue of investment certificates this year to investors yesterday, he said that in the year-to-date the province had attracted $1.4 billion, which is 140 per cent of the year's target and 26 per cent up year-on-year.

The investments have been in 113 new projects worth $673 million with the remaining going into 99 existing ones.

He told Viet Nam News that another $200-300 million is likely in the remaining months.

The province has attracted investors in every field including industry, services, urban development, and housing, he said.

But in the first nine months investment in property has not been very high.

Cung hoped this would change later this year when the property market recovers.

Yesterday the province issued investment certificates for 42 projects, 37 of them foreign and 19 of them new.

One of the companies to get the certificate was Esquel Garment Manufacturing Viet Nam Company Ltd, which was affected by the riots in May. The company is increasing its investment by $35 million.

A company spokesperson hailed the support provided by Binh Duong authorities following the riots as well as their transparency.

The province is rezoning manufacturing areas based on its socio-economic development master plan, manufacturing areas plan, and urban plan to gradually move companies from urban areas and the south to the north.

Some companies have already moved under this plan.

Quang Binh approves 28 FDI projects

This central province has approved the business licenses of 28 foreign direct investment (FDI) projects with a total capital of US$39.7 million.

Le Van Phuc, director of the provincial department of planning and investment, said that investors were interested in developing the deep-sea Le Thuy port, apartment and car cable system at the UNESCO-recognised Phong Nha-Ke Bang tourist site.

He said the province granted business licences of 24 domestic projects worth VND7 trillion ($334 million) in the first eight months of this year and approved 13 non-refundable aid projects of non-government organisations with a total capital of $1 million.

New law defines bankruptcy proceedings

After 10 years from the issuance of the 2004 bankruptcy law, a new Law on Bankruptcy (the Bankruptcy Law) was passed on June 19, 2014, by the 13th National Assembly with bankruptcy proceedings separated into the two concepts - insolvency and bankruptcy.

In addition, the new law clearly defines rights and obligations of involved parties in bankruptcy proceedings; changed the composition of the team of management and liquidation; prescribed shortened proceedings for bankruptcy, and procedures for bankruptcy of credit institutions; provided for suspension for settling cases related to the implementation of the financial obligations of enterprises unable to dissolve debts and resolve legal consequences; and re-arranged the stage of asset liquidation in bankruptcy proceedings, etc.

The new law creates a new title of trustee with the rights and obligations similar to the team for the management and liquidation of assets, which is responsible for managing the operation and liquidating assets of the enterprise in bankruptcy during the proceedings (including the management and liquidation of assets; representing the enterprise in the absence of a legal representative; reporting on the status of assets, financial liabilities and operations of the enterprise; participation in making a business recovery plan; provision of proposals for the court to implement the following works: collecting evidence, declaring a transaction invalid and recovering asset sales or transfers that were conducted illegally, applying interim urgent measures and applying administrative sanctions).

Under the new Bankruptcy Law, a minimum period in which creditors can lodge a petition for bankruptcy proceedings against debtors is three months from the due date of financial obligations. In addition, the law also grants to other individuals and organisations the right to inform the entities who have the right and obligation to file a request for bankruptcy proceedings when they discovered the enterprise was unable to dissolve its debts.

The court with jurisdiction to resolve bankruptcy proceedings is transferred to the people's court of the district where the head office of the enterprise is located, except in certain cases where the people's court of the province has jurisdiction under the provisions of Article 9.1 of the Bankruptcy Law. A petition for bankruptcy proceedings will not always result in initiation of bankruptcy proceedings as a petitioner has the right to actively negotiate the withdrawal of the petition through a separate agreement with the debtor.

With the new regulations, information of an enterprise initiating bankruptcy proceedings (Insolvent Debtor) can be easily accessed via notification to the petitioner, Insolvent Debtor, creditors, the Procuracy, the authority of civil judgment enforcement, tax agency, business registration agency where the head office of the enterprise is located and the national business registration portal, the portal of the court and two consecutive issues of local newspapers. This allows other creditors, or other entities with financial issues against the enterprise a better ability to know and take the next steps to protect their own rights and legitimate interests.

In avoidance of dispersing and hiding assets, some transactions, shortly before initiation of bankruptcy proceedings can be considered to be invalid in the following cases: (i) transactions relating to asset transfers but not at market prices; (ii) the transfer of unsecured debt into secured debt or partially secured debt; (iii) payment or balance to a creditor for debts not yet due or for a larger amount than due debts; (iv) transfer of property without payment; (v) transactions for purposes other than business activities of the enterprise; (vi) other transactions with the purpose of dispersing the assets of the enterprise. The court with jurisdiction will consider the transactions at the various periods depending on the engaged entities. The time period for entities in a relevant relationship to the Insolvent Debtor is 18 months, and for others it's six months.

An enterprise is declared bankrupt if (i) the enterprise is unable to pay official fees or advance bankruptcy costs; (ii) the creditors meeting was postponed but still unsatisfied for being reconvened; (iii) a resolution of the creditors meeting is not passed; or (iv) a business recovery plan is not made within the time-limit, a business recovery plan cannot be implemented, or debts cannot be dissolved even after the performance of the business recovery plan.

This new Bankruptcy Law enters effect on January 1, 2015.

VIS Expo 2014 attracts many big firms

As many as 140 local and foreign companies are taking part in VIS Expo 2014, an exhibition on supporting industries that will last until Saturday at HCMC’s Tan Binh Exhibition and Convention Center (TBECC).

The four-day event is organized by the city’s Department of Industry and Trade in collaboration with Vietnam Advertising and Exhibition Fair Joint Stock Company (C.I.S Vietnam).

The participating companies showcase their products and services at more than 200 booths in sectors of apparel, footwear, power and electronics, rubber, mechanics and automobile to other local and foreign business partners.

Exhibitors include well-known local firms like Saigon Industry Corporation, Saigon Transportation Mechanical Corporation, Vietnam Engine and Agricultural Machinery Corporation and Vietnam Electric Cable Corporation, as well as famous foreign firms like Intel, Bosch and Nidec among others.

In addition, there are separate pavilions at the exhibition manned by the Saigon Hi-Tech Park and a number of city’s associations in garment, textile embroidery-knitting; rubber; footwear and mechanics sectors.

This year’s event also features a seminar on how to speed up the development of supporting industries in Vietnam, which is held on September 18.

Some policymakers also join the exhibition to provide information on policies to facilitate sustainable development of supporting industries.

The exhibition is expected to help build a strong bridge between enterprises, establish a value chain for industrial products, find outlets for supporting industries, and increase ratios of local contents and added values for locally-made products.

Besides, it will create opportunities for local enterprises to improve product quality, spur exports, join the global supply chain, and reduce their reliance on accessory and component imports.

Vietnam’s supporting industries can meet only 10% of the demand of producers and assemblers compared to 40-60% in other regional countries, forcing enterprises in this market to count on imports.

Exhibition on power transmission, automation opens in city

* As many as 180 enterprises from 26 countries and territories are showcasing their latest products at Electric & Power Vietnam 2014 and Industrial Automation Vietnam 2014, an exhibition on power transmission and automation taking place between September 17 and 19.

Besides 42 local businesses, the event held at the Saigon Exhibition and Convention Center (SECC) in HCMC’s District 7 is attended by a large number of foreign firms from many countries, including Germany, Singapore, India, South Korea and Taiwan.

The two-in-one exhibition features high-tech devices as well as latest technologies in the two industries, such as control equipment, generators, electrical engineering technology, and transmission and distribution technology.

Electric and Power Vietnam has been held biennially since 2006, and this year’s event is expected to attract over 4,500 trade visitors.

More and more electricity companies from such developed countries as Japan, South Korea and the U.S. are now interested in the power industry in Vietnam given the fast- increasing demand for electricity at home. Many large-scale power projects, including Nghi Son 2, Vung Ang 2, Van Phong 1, Vinh Tan and Thai Binh, have been being implemented across the nation.

The master plan on development of national power grid by 2020 period aims to increase the electricity supply based on renewable energy resources from 3-5% in 2010 to 4.5%-6% in 2020-2030 period.

Gov’t speeds up capital withdrawal in SOEs

The PM has signed a decision on withdrawing capital, selling the State’s stakes, and conducting initial public offerings (IPOs) for State-owned enterprises (SOEs).

The decision comes up with some regulations on capital withdrawal in non-core businesses in the SOEs where the State holds 100% of capital.

The process of capital withdrawal must be conducted to preserve State capital at the highest level.

The capital withdrawal under face value must minimize investment losses and ensure the State’s capital.

Under the new decision, in the areas of insurance and banking, enterprises suggested the State Capital Investment Corporation (SCIC) purchase stocks.

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