Rubber group targets high profit by 2020

Vietnam Rubber Group (VRG) has set higher targets on both revenue and profit by 2020, although its farming area is to stay unchanged.

In its report on business plan for the 2016-2020 period approved by the Government on July 14, the State-owned group targets a profit of VND9 trillion (some US$400 million) for 2020, or 2.6 times higher than in 2017. The report also shows VRG expects to earn a total revenue of VND40 trillion in 2020, 2.2 times higher than this year’s projected revenue.

According to the report for 2014-2016 period that VRG submitted to the Ministry of Planning and Investment on July 4, the group targets a revenue of nearly VND18 trillion for 2017 and a pre-tax profit of VND3.5 trillion. In 2016, VRG fetched nearly VND17.4 trillion in revenue and some VND3.3 trillion in profit.

In the next five years, the group’s rubber cultivation area will be kept unchanged at 400,000 hectares including 285,000 hectares in Vietnam and 115,000 hectares overseas.

At the end of March, VRG general director Tran Ngoc Thuan said that the group would launch an initial public offering (IPO) on July 1 with 25% of its shares to be offered to the public and strategic partners. However, the date has passed but the expected IPO has yet to be launched.

In the coming time, the group will focus on rubber cultivation and processing, rubber wood processing, and investment in infrastructure and hi-tech agriculture.

According to the Ministry of Agriculture and Rural Development, Vietnam exported 462,000 tons of rubber worth US$867 million in the first half of 2017, up 5% in volume and 59% in value. In the first five months of the year, rubber was exported at nearly US$2,000, equivalent to VND44 million a ton, a year-on-year increase of 60%.

Vietnam to continue corn imports in years to come

Vietnam’s corn-growing area, currently at 1.15 million hectares, is expected to have no big changes in the next couple of years, and may even shrink to less than one million hectares after 2025, so the country will still depend on corn imports.

Vietnam, which has become the world largest corn importer since 2015, still has to import 7-8 million tons of corn every year, according to a report by the Department of Cultivation under the Ministry of Agriculture and Rural Development

In 2016, the corn-growing area was about 1.152 million hectares, expanding by 100,000 hectares over 2015. However, this area will be only about 950,000 to 1.1 million hectares after 2025, the department projected.

Despite the smaller area of cultivation, the department now set the target for better productivity. After 2025, the average productivity will be around 5.2-5.3 tons per hectare, with the highest yield estimated to be 5.8 million tons.

In 2016, the average productivity was only 4.55 tons per hectare and the total yield was more than 5.2 million tons.

Vietnam imported a record high of 8.3 million tons of corn in 2016 for the domestic animal feed production. The amount of imported corn this year is likely to hit another high record, with 3.53 million tons having been imported in the first half, a 6% rise compared to the same period last year.

Every year, Vietnam needs about 20 million tons of corn, including the domestically grown and the imported ones supplied by more than 50 different companies.

Farmers have grown genetically modified corn for animal feed production since 2014, with 16 types of genetically modified corn having been approved for use, the ministry reported.

With 1.152 million hectares of corn, Vietnam ranks 24 among 166 corn-growing countries in the world. However, Vietnam’s productivity is down to the 59th position on the list, around 4.55 tons per hectare.

Hong Kong firm acquires stake in Vietnamese cinema company

Beta Media JSC specializing in the construction of movie theaters in small and outlying provinces on July 18 signed a financing agreement with Hong Kong Blue Financial Group, gaining more capital to implement its projects.

At the signing ceremony in HCMC, Beta Media general director Bui Quang Minh did not reveal the specific investment pledged or the stake to be held by the Hong Kong partner.

However, the founder of Beta Media affirmed he still owns over 50% of the firm’s shares and continue operating the company. Its value was put at US$27.5 million, equivalent to about VND600 billion.

Earlier, Beta Media had also received investment from Vietnam Investment Group (VIG), investor of Galaxy cinemas and Galaxy Studios.

The company currently has two cinemas in Hanoi City and two more in Thai Nguyen and Dong Nai provinces. Each cinema has an average of four to five theaters. The ticket price is 60-65% cheaper than at high-end cinemas in major cities.

It expects to open six more cinema complexes this year in HCMC and Hanoi cities, and Thanh Hoa, Bac Giang, Khanh Hoa and An Giang provinces, and targets a total of 20 cinema complexes across the country next year.

Beta Media also offers catering services as well as produces and releases films.

Beta Media’s Minh said that by developing cinema theaters in smaller provinces, the company can avoid the fierce competition with large enterprises.

PM asks SBV to restrict funds for tycoons

Prime Minister Nguyen Xuan Phuc has asked the State Bank of Vietnam to map out solutions to restrict the credit flow into tycoons so as to have more funds for smaller enterprises, especially startups. The central bank is also told to have a suitable interest policy to mobilize dollars from the public, said Minister Mai Tien Dung, chairman of the Government Office.

The minister on July 18 led an inspection team in a working session with the central bank, where he detailed key instructions from the Prime Minister to the State Bank of Vietnam.

Minister Dung said the Prime Minister had stressed the importance of channeling capital into business areas where funds are badly needed so as to facilitate economic growth. The Government leader wanted the State Bank to ensure that credit flow into tycoons be controlled to spare more funds for startups and manufacturing enterprises.

In the first half of 2017, Vietnam had 60,000 newly-established enterprises but the number of businesses going bust also rose due to difficult access to credit and land, and inappropriate policies.

The Government assigned the State Bank to ask commercial banks to reduce interest rate by 0.5-1 percentage point to make life easier for enterprises.

“Outstanding credits nationwide stand at over VND5,000 trillion (over US$220 billion). If the interest rate is cut by one percentage point, enterprises may save over VND50 trillion, and assumed the rate of return is one-to-five, the economy can gain about VND10 trillion,” said Dung.

The State Bank should pay more attention to sectors in which enterprises are facing difficulties and at the same time disburse the VND100-trillion credit package for hi-tech agriculture by instructing commercial banks to offer lower interest rates.

However, to reduce interest rates, the State Bank will have to effectively deal with bad debts.

The Prime Minister also asked the State Bank to have policies to encourage the people to deposit their US dollars at banks, as the current interest rate of 0% discourages them to put money at credit institutions. Currently, Vietnam is borrowing dollars from international markets at 4%, so there should be suitable policies to tap dollars at home, Minister Dung said.

At the meeting, the central bank was also told to attend more to cross-ownership among banks, as the situation still remains worrying despite initial results.

Last but not least, the State Bank will have to improve security for banking services. “Safety is very important as we are encouraging the people to use banking services instead of cash,” said Dung.

According to Dung, in the first six months of 2017, the State Bank effectively implemented tasks assigned by the Party, the National Assembly and the Government.

The implementation of currency policies has been more efficient, contributing to stabilizing exchange rates, controlling inflation and boosting credit growth, he noted.

Uber CTO to consult startups

The Chief Technology Officer at Uber, Mr. Thuan Pham, a Vietnamese American, will consult with Vietnam’s startup community in the UberExchange program in Hanoi on July 25 during a visit to the country.

He will share the secrets of success by using technology, with a focus on how to utilize infrastructure and human development, which are most relevant in the startup and student communities.

Mr. Thuan has experience with prestigious enterprises such as VMWare, Wesbridge and Doubleclick as he was involved in building software and services to improve quality of life. He joined Uber when it appeared in only 60 cities and had just 40 technicians. In four years, he helped it increase the number of technicians to 2,000 and resolved a wide range of challenges.

“When we decided to do something, each member of the company would focus their full energy to create miracles,” he said.

Startups often concentrate on technology without considering the role of human resources in developing the technology, he said, but the two must go hand-in-hand. They are two key points and are closely linked to each other. Technology builds applications and people create miracles from these applications.

During his visit, Mr. Thuan Pham will also take part in a discussion panel on July 24 about young people with technological innovations in Hanoi and Ho Chi Minh City that support young Vietnamese in staying abreast of global technology trends. The panel will also have the participation of representatives from the Ministry of Planning and Investment, the Vietnam Youth Federation, the Vietnam Young Entrepreneurs Association, and the US Embassy in Vietnam.

UberExchange kicked off on March 14 in a cooperative effort with the Vietnam Youth Federation to provide support to young Vietnamese startups. All startups nationwide are encouraged to apply for entry into the program through an online application process. Selected startups will be provided with mentoring sessions from global and regional leaders at Uber from April to August.

The mentoring sessions focus on sharing experiences on specific matters, such as how to build products, how to expand business scale in the most efficient manner, how to take advantage of technologies, and how to implement the most effective marketing programs, among others.

Vietnam is the second country and the first in Southeast Asia where Uber has launched the UberExchange program. The first was India. 

VNDIRECT's 1H after-tax profit 83% of annual plan

After-tax profit of VND322 billion ($14.16 million) posted by securities company VNDIRECT in the first half of this year represented 83 per cent of its 2017 plan.

Realized profit in the second quarter was VND100 billion ($4.39 million), up 54 per cent year-on-year, while the first-half figure was VND190 billion ($8.35 million), an increase of 100 per cent year-on-year. Unrealized profit in the second quarter was VND1.3 billion ($57,187).

Its share price now stands at VND2,225 ($0.09).

Consolidated revenue was VND312 billion ($13.72 million) in the second quarter, up 49 per cent year-on-year.

Brokerage revenue increased 76 per cent to VND82 billion ($3.6 million) and revenue from margin lending was up 80 per cent from VND46 billion ($2.02 million) in the second quarter of 2016 to over VND83 billion ($3.65 million) in the second quarter of 2017.

Revenue from stock investments increased 23 per cent, to VND139 billion ($6.11 million). Total revenue in the first half is estimated at VND563 billion ($24.76 million), fulfilling 65 per cent of the annual target.

Total assets by the end of this year are estimated at VND7.7 trillion ($338.72 million), an increase of 50 per cent compared to the beginning of the year. Margin loans increased 33 per cent by the end of the second quarter compared to the beginning of the year, reaching VND2.5 trillion ($109.97 million).

VNDIRECT was established in 2006 and is now one of the most trusted securities companies in Vietnam. Main business lines include stockbroking, securities custody, corporate finance advisory, proprietary trading, and portfolio management. It has also completed a pilot derivatives trading system and launched a high-speed price list to support investors. 

OCB & Daegu Bank sign cooperation agreement

The Orient Commercial Bank (OCB) signed a comprehensive cooperation agreement on July 17 with South Korea’s Daegu Bank regarding international payments, services to small and medium-sized enterprises (SMEs), and training exchange programs.

Currently in a period of transformation and development, OCB aims to become a universal bank and the leader in retail and SME banking services in Vietnam under a broad strategy, including technology modernization, human resources development, and transforming its branches to strengthen strategic cooperation with partners to bring benefits to all.

The signing of the agreement marks a milestone in OCB’s development roadmap in foreign markets, enhancing its competitiveness in both domestic and international markets.

“OCB has expanded trading activities with foreign partners and customers since 2015,” CEO Mr. Nguyen Dinh Tung told the signing ceremony. “After establishing our own foreign direct investment (FDI) banking and South Korean counterpart division, together with the OCB International Money Transfer Company, we will continue to reach out to the international market by cooperating with foreign partners. We believe that Daegu Bank’s strong financial strength will accompany OCB in various aspects, such as international money transfer, product development, SME services, training exchange programs on risk management, information technology, and product development in South Korea.”

Daegu Bank also pledged to provide the best companion programs to facilitate OCB’s further development among the South Korean business community in Vietnam and to share experience so it will hold a 50 per cent market share in SME services in the country.

“The signing ceremony between OCB and Daegu Bank takes place during the 50th anniversary of Daegu Bank, the 25th anniversary of the two countries establishing diplomatic relations, and five years after the signing of the free trade agreement (FTA) between the two countries,” Mr. Lim Hwan Oh, Senior Executive Vice President at Daegu Bank, said, adding that the development of South Korean enterprises in Vietnam will continue to create more opportunities for both sides to maintain their strengths and bolster their cooperation.

Established in 1967, Daegu Bank has provided the best financial service to local residents and become a foundation in regional development. Its main business lines consist of deposits, loans, foreign exchange, the sale of financial products (funds, bancassurance), asset management services, and internet banking.

Not only an excellent regional bank in practicing sustainable management, Daegu Bank also excels in ethics. The bank also values management with stockholders and communications management with employees.

Established in 1996, OCB has more than 115 branches nationwide and is present in all major cities and economic zones in the country. Its 2016 profit ranked 15th among Vietnam’s commercial banks while its profit margin was among the Top 10.

With human resources of more than 5,000, high technology, and a trusted brand, OCB’s annual growth rate in the last five years has been double the industry average. It has sound risk management, high asset quality, and one of the lowest non-performing loan (NPL) ratios.

Viettel IDC to introduce private cloud designed on Fujitsu infrastructure

Viettel IDC agreed to terms with Fujitsu on July 19 in Ho Chi Minh City to introduce private cloud products that are created in Fujitsu’s server infrastructure.

Private cloud helps enterprises have independent sources and safe databases, while providing cost savings and optimizing system administration. Viettel IDC said that when leasing private cloud, enterprises can save at least 30 per cent of initial expenditures and from four to six weeks of time compared to investing in traditional models such as building hardware. Leasing private cloud also helps enterprises be more active in using and managing their IT systems.

“Fujitsu is one of the largest hosting providers in the world, so Viettel IDC believes that private cloud on Fujitsu’s infrastructure will be a good choice for enterprises,” said Mr. Nguyen Tien Dung, Director of Viettel IDC.

When leasing private cloud on Fujitsu’s infrastructure in the basic package, customers will also be provided with free public cloud or a Samsung Galaxy S8.

At the “Fourth Industrial Revolution: Fostering Digital Transformation with Could Computing” conference held on June 22 in Hanoi, Mr. Dung said that cloud computing is no longer just a trend, it is an obvious necessity. There are primarily two types of cloud computing customers: small and medium-sized enterprises (SMEs) and State agencies.

The greatest concern among SMEs is cost, while for State agencies the greatest concern is security and privacy, but if SMEs want cloud computing that is cheap but efficient and with fast transmission they should use public cloud services, while private cloud services are more suitable for State agencies, he said.

Mr. Nguyen Dinh Thang, Vice President of the Vietnam Software and IT Services Association (Vinasa) said that cloud computing brings many benefits, such as standardizing products and services, reducing investment costs, saving time on developing products, improving services, and having a flexible business model.

He urged the government to adopt suitable policies to direct enterprises and organizations to have strategies in researching and investing in cloud computing to improve efficiency in business and manufacturing, which would help Vietnam stay abreast of the fourth industrial revolution.

State Treasury & BIDV sign arrangement for budget collections

The Bank for Investment and Development of Vietnam (BIDV) and the State Treasury signed a cooperation agreement in Hanoi on July 19 on collecting State budget revenues.

The State Treasury in Hanoi will open a dedicated account at the BIDV Transaction Center 1 to collect revenues and deploy bilateral electronic payments in the capital.

Six district units under the State Treasury in Hanoi - Hai Ba Trung, Bac Tu Liem, Cau Giay, Hoang Mai, Tay Ho and Gia Lam - also signed cooperation agreements with BIDV branches to collect State budget funds.

The total number district units of the State Treasury authorizing BIDV to collect State budget revenue is now 17 in Hanoi.

This will improve administrative procedures in tax collections and create favorable conditions for enterprises and individuals to meet their obligations to the State budget.

Enterprises and individuals will be able to pay all taxes, fees, and charges and make other payments to the State budget quickly, conveniently, and safely through 34 BIDV branches and 163 transaction points.

BIDV has cooperated with the State Treasury, the General Department of Taxation, and the General Department of Vietnam Customs in the past to collect taxes, charges, fees and other levies.

Through such cooperation activities, the bank has contributed to improving administrative procedures in taxation, boosted non-cash payments under the government’s policy, and contributed to implementing the e-treasury strategy within the State Treasury Development Scheme as directed by the government to 2020.

BIDV’s after-tax profit rose 10 per cent year-on-year to VND1.82 trillion ($80 million) in the first quarter of this year while its bad debt ratio increased slightly, to 2.14 per cent, its consolidated financial statements for the period reveal.

As at March 31, total assets were up 2 per cent to VND1,026 trillion ($45.1 billion). Customer lending rose 4.7 per cent to VND747 trillion ($32.85 billion) and deposits 5 per cent to VND762.4 trillion ($33.53 billion).

ADB upgrades Asian growth outlook while leaving Vietnam's unchanged

Economic growth prospects in developing Asia for 2017 have improved on the back of stronger-than-expected export demand in the first quarter of this year, according to a new Asian Development Bank (ADB) report. 

In a supplement to its Asian Development Outlook 2017 report, ADB upgraded its growth outlook in the region from 5.7 per cent to 5.9 per cent in 2017 and from 5.7 per cent to 5.8 per cent for 2018. The smaller uptick in the 2018 outlook reflects a cautious view on the sustainability of this export push. 

In Southeast Asia, however, its growth outlook remains at 4.8 per cent for 2017 and 5 per cent for 2018 despite revisions for four of its economies. High growth in Malaysia, the Philippines, and Singapore is dampened somewhat by disappointing growth in Brunei Darussalam. Robust domestic demand, particularly private consumption and investment, will continue to support economies in the region. 

Higher public investment boosted first quarter growth in the Philippines and Thailand, while private investment was strong in Malaysia and Vietnam. Exports rebounded in Indonesia, the Philippines, Malaysia, and Vietnam but the growth outlook for Vietnam remains at 6.5 per cent for 2017 and 6.7 per cent for 2018.

An unexpected decline in mining and quarrying output dragged Vietnam’s GDP growth lower to 5.1 per cent in the first quarter of 2017 from 5.5 per cent in the same quarter of 2016. Industry and construction expanded by only 4.2 per cent, well below 7.2 per cent growth in the same period of last year. 

Other sectors remained strong. Services recorded higher growth than a year earlier, coming in at 6.5 per cent against 6 per cent in the first quarter of 2016. As expected, agriculture recovered to 2 per cent growth from a 1.3 per cent contraction in the same period last year. 

Foreign direct investment into Vietnam continues to increase, with disbursements by the end of the first quarter estimated at $2.7 billion, up 4 per cent against the same time last year and accounting for 6.5 per cent of GDP. The new report retains the growth forecast at 6.5 per cent for 2017 and 6.7 per cent for 2018. These will be revisited, however, if the industry and construction sector remains sluggish.

Lagging M&A scene looking for a big push

Merger and acquisition (M&A) activities in Vietnam in 2017 will need a big push, as the market is forecasted to go through a slowdown due to a lack of large deals from foreign investors as well as the state’s delay in divestment from state-owned enterprises.

According to the report released at the press conference this morning, in 2016, the total value of M&A deals in Vietnam reached a nine-year record of $5.8 billion, signifying an 11.92 per cent increase against 2015 performance.

However, since the end of 2016, M&A activities have been slow, with an acute lack of large deals. In the first quarter of 2017, the total value of M&A deals in Vietnam was only $1.1 billion.

This opinion was voiced by experts at “Vietnam M&A Forum 2017” press-conference organised by VIR and AVM Vietnam this morning, in Hanoi.

M&A activities in 2017 face challenges, including the completion between Vietnam and other ASEAN member states to attract foreign investment, obstacles in equitising state-owned enterprises, the low quality of Vietnamese firms, as well as the scale of the economy.

Thereby, the M&A environment in 2017-2018 is waiting for a breakthrough in large-scale deals, including the state divestments from Hanoi Beer Alcohol and Beverage Joint Stock Corporation (Habeco), Saigon Beer Alcohol and Beverage Joint Stock Corporation (Sabeco),  Vietnam Dairy Products Joint Stock Company (Vinamilk) and Petrolimex, among others.

Vietnam M&A Forum 2017, co-organised by VIR and AVM Vietnam, will take place on Thursday, August 10, 2017 at GEM Centre, Ho Chi Minh City.

As the ninth edition of the annual economic event under the theme “Seeking a Big Push,” Vietnam M&A Forum 2017 will welcome 30 international and Vietnamese guest speakers and 500 senior leaders from investment funds, Vietnamese and international corporations as a platform to meet and share opportunities as well as experiences from the most notable deals of 2016-2017.

Mitsubishi Motors plots expansion in Vietnam

Mitsubishi Motors Vietnam affirmed it will inject more capital into its auto assembly facility in the country to expand production and made plans to sale electric cars despite lower tariffs on imported completely built-up units from the ASEAN.

Osamu Masuko, chief executive officer at Mitsubishi Motors Corp., announced the corporation’s plans to increase capital in Vietnam as well as pushing green designs in the Vietnamese automobile market at the meeting with Prime Minister Nguyen Xuan Phuc and leades of the Ministry of Industry and Trade yesterday. 

The company is looking forward to further investments in modern assembling technology and selling electric vehicles in Vietnam, which would contribute to the country’s environmental protection efforts, according to its announcement.

Osamu Masuko revealed that a Nissan-Mitsubishi joint venture plans to build a plant in Vietnam, with intentions to scale up investments in Vietnam and the ASEAN bloc. However, the specific timeline has not released.

“More dealerships and service centres will go up in the country in the comingtime,” said Masuko.

In 2016 Mitsubishi Motors Vietnam (MMV) offically was renamed from Vina Star Motors (VSM), after an ownership structure changed in the joint venture. The joint venture said that Mitsubishi’s member companies have increased their ownership from 50 per cent to 82 per cent.

Established since 1994 by Japan’s Mitsubishi Motors Corporation and Mitsubishi Trading Company, Malaysia’s Perusahaan Otomobil Nasional Berhad and Vietnam’s Transport Investment Cooperation and Import and Export JSC as distributor of Mitsubishi Motors’ vehicles in Vietnam – Mitsubishi Motors Vietnam Co. Ltd., was one of first automobile joint-ventures in this market.

The joint venture headquartered in the southern province of Binh Duong’s Di An Town said on its website that it has investment capital of over VND365.4 billion ($16.38 million) and a factory with an annual capacity of 5,000 vehicles.

Farmers sceptical over pig market predictions

The Ministry of Agriculture and Rural Development has raised warnings about possible over supply of pork while farmers are positive that prices will rise.   

According to the Department of Livestock Production under the Ministry of Agriculture and Rural Development, Vietnam consumes about 4.75 million tonnes of meat of all kind each year. Meanwhile, it is predicted that the pork supply this year will reach 5.5 million tonnes.

Tong Xuan Chinh, deputy head of the Department of Livestock Production, said pork prices in some areas had increased to VND39,000 (USD1.72) per kg, and sometimes to VND41,000. However, the department said Vietnam wouldn't lack pork this year so farmers should calculate carefully how many pigs should be raised.

"Our survey shows that demand for pork in the domestic market has been saturated. Export contracts to China won't be completed this year while border trade is unreliable. It's not safe to increase the number of pigs at this time. Farmers won't gain much if everything goes smoothly and suffer huge losses if something goes wrong," he said.

The department will gather information from FDI firms, big farms and household-sized farms to have the best assessments and long-term predictions for local authorities. They are collaborating with other units to develop software that can forecast the livestock market. 

However, many farmers were sceptical about the warning and believe that the pork prices will continue to rise for several reasons. 

Firstly, supply has dropped after many farms were closed due to huge losses during the sharp price decline in April. Secondly, China is importing pork and the demand will last for quite a while because of floods. Thirdly, the Mid-Autumn Festival and Vu Lan Festival are approaching so firms will buy more pork to make products. 

Moreover, pork prices usually increase during the later months of the year and domestic demand will increase because of the rainy season.

Nguyen The Anh, a farm owner in Hanoi, said pork prices might increase to VND50,000 (USD2.20) per kg. Several households in Thai Binh, Ha Nam and Phu Tho provinces only sold a small amount of their stock to assess the situation. Traders often calculate the prices based on prices of major livestock companies such as the Dabaco Group.

Nguyen Kim Doan, deputy head of Dong Nai Province Association of Livestock Production, said the pork prices hadn't reached the peak. Farmers could wait for higher prices. It would be a wise decision and not mindless farm expansion case if prices are on a long-term rise and people flock to buy a huge number of pigs to raise in just a few months, he said.

Bien Hoa Sugar JSC to be delisted from HOSE     

Bien Hoa Sugar JSC has announced its 300 million shares traded on the HCM Stock Exchange will be delisted to complete the merger with Thanh Thanh Cong Tay Ninh Sugar JSC.

The company said in its statement on Monday that the shares were being delisted to conduct a share swap with Thanh Thanh Cong Tay Ninh Sugar JSC in accordance with the M&A agreement between the two companies.

Shares of Bien Hoa Sugar JSC will be delisted from the stock exchange on August 30 and the last trading day is August 29.

Shares of the two sugar producers have gained significantly since May on market speculation of a merger between the two largest companies in the sugar industry.

The two sides on June 7 signed a merger agreement to create the largest sugar company in Viet Nam with 30 per cent market share.

Under the agreement, Thanh Thanh Cong Tay Ninh Sugar JSC will swap its shares with more than 300 million shares of Bien Hoa Sugar JSC at the rate of 1:1.02, which means each share of Bien Hoa Sugar is equal to 1.02 shares of TTCS.

Shares of both companies are listed on the HCM Stock Exchange. SBT is the code for Thanh Thanh Cong Tay Ninh JSC and BHS is the code for Bien Hoa Sugar JSC.

SBT has surged 51.5 per cent in the last two months and BHS has gained 30 per cent in the same period. BHS stocks closed unchanged on Wednesday at VND21,100 (US$0.93) a share while SBT increased 0.7 per cent to settle at VND38,450 each.

At the current price level, total market capitalisation of SBT after the merger will reach $950 million.

The merger will increase the chartered capital of Thanh Thanh Cong Tay Ninh by more than VND3 trillion ($133.3 million) to VND5.57 trillion. The new company will have total assets of VND14.67 trillion and total payable assets of VND7.86 trillion.

Thanh Thanh Cong Tay Ninh expects its combined revenue will reach VND8.35 trillion following the merger and combined pre-tax profit will touch VND674 billion.

Also in May, Thanh Thanh Cong, the parent company of Thanh Thanh Cong Tay Ninh Sugar JSC, spent over VND1.33 trillion to acquire entire stake in the HAGL Sugar JSC from Hoang Anh Gia Lai Group. 

Support centre for property start-ups to open soon     

To encourage innovations and start-ups in the real estate sector, a VND100 billion (US$4.4 million) support centre is being set up, which will be funded by the Government and donors.

The information was released by the Ha Noi Real Estate Association (HNREA) at a meeting held last week in Ha Noi, the Xay Dung (Construction) newspaper reported.

For the project, called the Viet Nam Real Estate Startup Incubator, the HNREA will build a portal that will serve as a communication channel and support real estate start-ups in Viet Nam. After one year of operation, it is expected to have attracted and connected at least 100 innovative real estate projects and start-ups, and involved them in the centre.

The project will help trigger a start-up wave, boost the development of the start-up community and join the Government action programme on building start-up ecosystems, said HNREA chairman Nguyen Huu Cuong.

Every year, the centre will advise and support innovative real estate projects to be deployed effectively in the market. It will also introduce and provide high-quality human resources in the property sector to State management organisations, real estate businesses and donors.

At the meeting, the HNREA also introduced a plan of establishing an association that connects all real estate transaction centres in all districts of Ha Noi, known as the Real Estate Alliance of districts in Ha Noi.

The alliance will help the Viet Nam Real Estate Association (VNREA) and its affiliates nationwide update and disseminate the latest, accurate information at district levels and provide a wide range of reliable information about the real estate market. It will also assist local authorities and real estate management organisations by providing them necessary information from the VNREA.

According to the organising committee, funds for the programme will be sourced from the Startup Investment and Innovation Fund, Small and Medium Enterprise (SME) Development Fund, National Funds for Science and Technology Development, and National Technology Innovation Fund.

Pork prices rise thanks to new stimulus programme     

Pork prices have risen recently following programmes to stimulate demand and to control the number of pigs raised by farmers, according to the Ministry of Agriculture and Rural Development.

Nguyen Xuan Duong, deputy head of the ministry’s Department of Livestock Production, said that a rise in exports to other countries, especially China, had helped raise prices.

As of today, pork prices are from VND40,000 to VND49,000 (US$1.8-$2.1) per kilo, increasing from VND25,000 per kilo of the last three months.

According to a representative of C.P. Viet Nam Corporation, which raises pigs, the pork price rose to VND41,500 per kilo today.

Nguyen Kim Doan, deputy chairman of Dong Nai Province Livestock Production Association, said that more and more traders were visiting farmers to buy pigs, but many farmers did not want to sell as they were waiting for higher prices.

Hoang Thi Lien, a pig-breeding farmer in the southeastern province of Dong Nai, said that traders offered to pay VND44,000 per kilo but she had decided to sell at a later date.

Deputy Minister of Industry and Trade Do Thang Hai said that this was a positive sign for farmers.

Hai, however, was concerned that the farmers might raise more pigs because of the rising prices.

The increase in growing pigs was one of the factors that contributed to low prices, according to Hai.

Huynh Thanh Vinh, head of the Dong Nai Province’s Department of Agriculture and Rural Development, said that farmers’dependence on the Chinese market to sell pork presented price risks.

The province is now focusing on reducing the number of pigs raised at small-size farms.

Quach Van Tay, head of Livestock Production and Animal Husbandry Division in Soc Trang Province, said farmers should carefully study market information and warnings from agricultural agencies.

They also should meet with local authorities to receive counselling about breeding practices.

Duong of the Department of Livestock Production said that the farmers should focus on disease control, provide vaccines for pigs, and disinfect farms.

State management agencies and enterprises will continue to enhance domestic and foreign consumption, he added.

He recommended the restructuring of breeding and livestock production by using co-operative chains, and diversifying livestock products to meet demand.

The Dong Nai Province Department of Industry and Trade reported that the province’s total number of pigs was 1.6 million, a drop of 500,000 compared to the last three months.

Luc Van Thuy, head of the department’s commerce division, told Tuoi Tre (Youth) newspaper that the province’s pork market was now stable.

Phan Ngoc Chau, head of the Livestock Production and Animal Husbandry Division in Long An Province, said that reduced prices in the last three months had led to a decrease in the number of pigs in the province from 280,000 to 230,000.

Nguyen Van Dong, head of Hau Giang Province’s Department of Agriculture and Rural Development, said the province would focus on raising 12,000 breeding pigs to prepare for the market when it recovers. 

Lao provinces organise HCMC investment conference     

Three central Laos provinces, Savannakhet, Khammouane, and Bolikhamxay, sought investment in many sectors at a conference held in HCM City on Wednesday.

The three are strategically located along the East-West Economic Corridor. Savannakhet, which lies west of Quang Binh and Quang Tri provinces and east of Thailand, is offering incentives for investments in high-tech, clean and organic agriculture, agricultural and forestry processing, sustainable tourism, education, healthcare, infrastructure, banking and development of modern trading centres among others.

Santiphab Phomvihane, Secretary and Governor of Savannakhet, said the province is suitable for infrastructure development, especially in Build- Operate- Transfer (BOT) and Public-Private Partnership (PPP) modes, and export-oriented agriculture.

He said firms could also invest in irrigation works to support rice cultivation and establishment of seeds and livestock breeds supply centres.

Savannakhet also solicited investment in vocational schools, modern hospitals, hotel and tourism services related to history, culture and protection of the natural environment, he said.

Vietnamese companies, with 24 projects there worth over US$170 million, are the third largest foreign investors in the province.

There are an increasing number of Vietnamese firms investing in various sectors in the province, contributing significantly to its socio-economic development and to improving people’s lives, he said.

The province’s infrastructure is being developed to facilitate faster and more convenient transport of goods by road, boost industry and services, and enable it to become a modern industrial province and a logistics and cross-border transportation hub.

The province has consistently worked to improve its investment environment, he added.

Khammouane Province listed 13 projects seeking investment in 2017, including construction and development of the Langkhang Economic Zone and development of rice-based products, logistics, modern rice mills, micro-organic fertiliser plants, tourism services and others.

Bunmy Phimmasone, deputy secretary and deputy governor of the province, said the 13 projects were identified on the basis of the province’s advantages like energy and mines, agriculture-forestry, services and tourism.

Bolikhamxay invited businesses from Viet Nam and other countries to invest in an industrial park in Paksan District, a border economic zone in Khamkot District, the Viengkham-Thasaad Special Economic Zone, a cement plant in Pakkading, a resort, a tourism project in Thaphabath District and several other projects.

Le Thanh Liem, deputy chairman of the HCM City People’s Committee, said being a major economic and cultural centre of Viet Nam, the city considers Laos a strategic and promising market for investment and trade.

More than 30 city enterprises have invested over $250 million in Laos, he said.

The conference is expected to promote further investment by city firms in Laos, contributing to economic development there, he said.

He said relevant departments and industries in the city and the three provinces and businesses should properly discuss areas of mutual concern and co-ordination mechanisms to building effective long-term co-operation.

The three Lao provinces should create favourable conditions for foreign investors, including Vietnamese, he added.

The conference on promoting tourism, investment and trade in three Laos central provinces was organised by the Investment and Promotion Centre of HCM City.

Use finite resources optimally, PetroVietnam told     

The Viet Nam National Oil and Gas Group, PetroVietnam, should come up with an optimal plan that balances its exploitation of fossil fuels with the nation’s long term needs, a senior official said on Wednesday.

"Our resources are not infinite, and based on the current situation of world oil prices, we need to increase output while ensuring a long-term source of raw materials and energy for the country," said Mai Tien Dung, Minister and Head of the Government Office.

Therefore, PetroVietnam should come up with the most effective exploitation plan, strive to reduce costs, effectively managing cash flows and improve its finance management mechanisms, he said.

Dung made the observations and suggestions as the head of a working group assigned by the Prime Minister to make an inspection visit to the PVN headquarters in Ha Noi.

He said that while business results in the first half of the year show positive signs of recovery, PetroVietnam needs to take more drastic measures to increase its competitiveness and efficiency in operations.

The team also conveyed PM Nguyen Xuan Phuc’s requests for clarification and explanations on a variety of issues including PVN’s personnel structure and the handling of loss-making projects.

Dung said the PM highly appreciated PetroVietnam’s production and business results in the first half of this year, and encouraged the group to work hard to overcome a difficult and challenging period when it has been plagued with mismanagement scandals and huge losses incurred by several unprofitable projects.

The group accomplished all its first-half targets. It reported revenues of VND247.1 trillion (US$10.8 billion) in the first half of the year, exceeding the target by15 per cent and equalling 56 per cent of its yearly goal.

Crude output reached 7.9 million tonnes, two per cent higher than planned for the first half of the year and 52 per cent of the annual plan. Gas production of 5.25 billion cubic metres in the first half of this year equalled 97.6 per cent of the plan.

Dung said PM Phuc has noted that while the group has managed to surpass all business production targets, there were many challenges ahead that required PetroVietnam to carry out “synchronous and effective measures” to tackle remaining problems and train particular focus on some main issues of concern.

Dung also said PetroVietnam should try its best to achieve its target of exploiting 13.28 million tonnes of crude oil and 10.61 billion cubic metres of natural gas in accordance with directions issued by the PM and Ministry of Industry and Trade.

Another aspect that has greatly impacted PetroVietnam’s growth is the inefficient handling of its loss-making projects, including three biofuel factories in Phu Tho, Quang Ngai and Binh Phuoc provinces, the PVTex Dinh Vu Yarn Factory and the Dung Quat ship-building plant, Dung said.

He said the PM’s view was that loss-making projects should be “resolutely handled in accordance with market mechanisms while respecting the principles of self-control and self-responsibility of enterprises”.

He also reiterated the Government’s standpoint that the State will not provide more capital for inefficient projects.

PetroVietnam needs to speed up the investment procedures for tardy thermal power projects including Long Phu 1, Song Hau 1, Thai Binh 2, putting them into operation soon as they will have very strong impacts on the growth of the group as well as the country as a whole, Dung said.

It has to reconsider restructuring and equitising as it plans to deal strictly with inefficient member units, he added.

Clarifying the performance of tasks assigned by the Government and the PM from early 2016, PetroVietnam general director Nguyen Vu Truong Son said the group had accomplished 141 of 189 tasks.

Son said PVN will take drastic measures to handle inefficient projects.

He noted that the MoIT has approved bankruptcy proceedings for the Phu Tho Ethanol Biofuel Plant and the Dung Quang Ship-building Company. It has asked the group to work with foreign investors to resume operations of the Binh Phuoc ethanol biofuel plant, given its role in implementing the E5 biofuel initative slated for next year. The other two products should be restarted before divestment.

However, in order to achieve all its objectives, PetroVietnam has petitioned concerned agencies to approve the reform of its financial mechanisms and corporate management as well as the group’s restructuring plan for the 2016-2020 period, Son said.

He also asked for the State’s support in removing difficulties and problems related to the product consumption of the Nghi Son refinery and petrochemical complex in Thanh Hoa province, besides offsetting losses generated by the difference in the import and export tax rates.

Work starts on $5.1m Soc Trang shrimp farm     

Construction of a VND120 billion (US$5.21 million) high-quality shrimp breeding farm began in the Cuu Long (Mekong) Delta province of Soc Trang on Tuesday.

Finaced by Viet-Uc Corporation, the farm will cover over 23ha in the first phrase, which is slated to be completion in June 2018.

The first stage will provide around five billion breeding shrimp per year and generate 400 local jobs. The second stage, which will start in late 2018, will extend to more than 60ha.

The company has produced about 40 billion breeding shrimp, accounting for 24 per cent of the market share, its chairman Luong Thanh Van said. He added that it is his company’s fourth farm in the Mekong Delta and its ninth nationwide.

Tran Van Chuyen, Chairman of the provincial People’s Committee, said Soc Trang needs 16 billion – 18 billion breeding shrimp each year, adding that the project will help reduce transportation costs and offer jobs to hundreds of local people.

He pledged all possible support for the project and asked the company to accelerate the farm’s construction. 

Nghi Son Economic Zone to get luxury resort

The People’s Committee of the central province of Thanh Hoa has given its in-principle approval to the BID Pristine Resort to invest in the Nghi Son Economic Zone (EZ).

Located in Hai Hoa beach amidst natural beauty, the 500 billion VND (22.2 million USD) project, with its unique design, covers an area of 8.7ha. The BID Pristine Resort is expected to become one of the first hi-end resorts in the Nghi Son Economic Zone.

Tran Anh Duc, BID Group’s construction director, said the resort would include 400 rooms having five-star standards, restaurants and other services. The facilities would meet the demand of tourists and foreign specialists working in the EZ.

Duc affirmed that the BID Pristine Resort would become an ideal location for ecotourism, also combining forest and sea conservation.

The construction is scheduled to start in the last quarter of the year and become operational in 2020. The project is expected to contribute to the province’s development.

Hanoi’s agro-production hits over 818 million USD in 6 months

Hanoi’s agro-forestry-aquaculture production value surpassed 18.6 trillion VND (about 818.4 million USD) in the two first quarters of this year, up 2.85 percent against the same period last year, heard a conference on July 19. 

The city also performed well in building new-style rural areas, which helps improve living standards for locals. 

Average per capita income in rural areas in Hanoi reached 36 million VND (1,583 USD) per year. 

Addressing the conference, Vice Chairman of the municipal People’s Committee Nguyen Van Suu asked the municipal Department of Agriculture and Rural Development to take measures to maintain the growth rate in all areas of the agricultural sector. 

He also asked for enhanced efforts to prevent floods and protect dykes during the ongoing rainy season.

Vietnam’s exports to Algeria grow 37 percent

Vietnam’s export revenue to Algeria rose 37 percent year-on-year to 190 million USD in the first half of the year, according to Vietnamese Commercial Affairs Office in Algeria under the Ministry of Industry and Trade.

Key shipments included nearly 32,000 tonnes of coffee valued at more than 68 million USD (up 27 percent), telephones and spare parts at more than 52 million USD (up 5 percent) and nearly 26,700 tonnes of rice at 10 million USD, quadrupling the value in the same period last year.

Algeria is Vietnam’s second largest importer in Africa, after South Africa. 

Vietnam-Algeria economic cooperation prospects are plentiful, with Algerian consumers familiar with Vietnamese goods, while Algerian animal feed, medicine and natural minerals are sold in Vietnam.

In terms of investment, the Bir-Seba gas and oil joint venture between Petro Vietnam, Sonatrach (Algeria) and PTT (Thailand) became operational in 2015, producing 18,000 barrels each day.-

HCM City’s industrial production index rises 7.51 percent

Ho Chi Minh City’s index of industrial production (IIP) in the first six months of this year increased 7.51 percent compared to the same period last year, reported the municipal Department of Industry and Trade at a conference on July 19. 

The IIP of four key sectors, including mechanical manufacturing industry; food processing; chemicals-plastic-rubber; and electronics-information technology, contributing 4.56 percent points to the growth, rose 10.23 percent. 

In the period, industrial and export-processing zones in the city attracted total investment worth 384.32 million USD, a year-on-year increase of 39.36 percent.

According to the HCM City Export Processing and Industrial Zone Authority, policies on land for industrial production remain unattractive to investors.

Municipal authorities were urged to accelerate land-clearance work and resettlement to facilitate industrial projects, and devise policies to support industrial enterprises by connecting them with banks.

ASEAN takes the lead against trade protectionism

ASEAN is persistent in its policy of open-region for international economic integration, Secretary General Le Luong Minh has said.

He made the statement on July 19 in Hanoi on the sideline of a discussion themed “ASEAN’s 50 years: ASEAN Economic Community and opportunities for Vietnamese enterprises”.

He said the ASEAN has been a regional grouping with the largest number of free trade agreements. It is finalizing a new free trade deal with Hong Kong this year and also working towards another deal with Canada. 

“ASEAN has removed tariff lines within the community except for several transactions with new members including Vietnam, Cambodia, Laos and Myanmar until 2018. 100 areas of service have been liberalized. The ASEAN Vision 2025 pursues an open region policy for more opportunities in regional and global economic integration and business cooperation," Luong added.

Vietnam M&A Forum 2017 coming in August

On July 20, VIR and AVM Vietnam will co-organise a press-conference to officially announce The Vietnam M&A Forum 2017, scheduled to take place on August 10, 2017 at GEM Centre, Ho Chi Minh City.

As the ninth edition of the annual economic event under the theme “Seeking a Big Push,” the Vietnam M&A Forum 2017 will welcome 30 international and Vietnamese guest speakers and 500 senior leaders of investment funds, Vietnamese and international corporations, as a platform to meet and share opportunities as well as experiences from the most notable deals of 2016-2017.

Additionally, the participants will be able to meet international investors from the US, Japan, the Republic of Korea, Thailand, and other ASEAN member states, as well as seek for opportunities from state-owned enterprise equitisation.

In the framework of the forum, a series of activities will be organised, namely the Gala Dinner to honour the M&A deals and advisory firms of 2016-2017 and a Master Class. As an added boon, the Vietnam M&A Outlook 2017 Special Publication will also be in print, providing quality coverage of the year’s global and domestic trends, as well as the most notable deals.

The Vietnam M&A Forum is a well-known annual event among the business community as well as domestic and international investors.

Over the past eight years, Vietnam M&A Forum has attracted more than 300 speakers, leading international and local M&A experts, and more than 3,500 senior leaders from international investment funds, international and local consultancy firms, state-run corporations, and private sector companies operating in Vietnam.

In 2017, the Vietnamese M&A scene is predicted to continue being abuzz with numerous stellar making headlines. In order for new deals to be successful, the market needs a big push in terms of a mechanism and policies to eliminate persisting bottlenecks, creating an attractive stock of supply, and attracting ample capital from in and outside the country.

New economic corridor linking Vietnam to Cambodia opens

Deputy Prime Minister Trinh Dinh Dung today (July 19) presided over a ceremony inaugurating a new stretch of roadway connecting Vietnam to Cambodia.

The inauguration ceremony was also attended by Deputy Prime Minister Ke Kim Yan of Cambodia along with a host of dignitaries and high-level members of the national and local governments from both countries.

Speaking at the ceremony, Mr Dung said the roadway would bring huge benefits for the country and reflects the Vietnam government’s vision of a bright and prosperous well-connected region.

The roadway, linking the border gates of Le Thanh in Gia Lai, Vietnam and O Ya Dav in Ratanakiri, Cambodia, is vital, he said, and will serve to bolster commercial trade between the two countries.

The Deputy Prime Minister who has considerable observation and experience with development projects noted the quality of the roadway and was appreciative that is has been constructed consistent with the highest of international standards.

Govt moves to enforce resolution on bad debt

Prime Minister Nguyễn Xuân Phúc on Wednesday took action so that the National Assembly’s (NA) new resolution on bad debt settlement could be applied from August 15.

The PM issued Directive 32/CT-TTg, stating that all regulations to guide the implementation of the NA resolution on settling non-performing loans must be issued before August 15, the date the resolution takes effect, a move that reflects the Government’s determination to settle bad debts.

Under the directive issued on Wednesday, Phúc has assigned the Ministry of Justice to direct the enforcement agencies at all levels to rapidly settle lawsuits, which have taken legal effect, related to bad debts of credit institutions and the Việt Nam Asset Management Company (VAMC).

The ministry will also be responsible for drafting a decree on collateral transaction, which will be submitted to the Government for approval.

The directive orders the Ministry of Public Security to direct its agencies to maintain security and social order when credit institutions and the VAMC exercise their legal right to confiscate and sell collateral assets of bad debts as per the regulations stated in the resolution.

The Ministry of Natural Resources and Environment must direct its property ownership registration agencies to carry out procedures to transfer the property ownership and use rights to legal purchasers and assignees of bad debts, as stipulated in the resolution.

The PM has also entrusted the Ministry of Planning and Investment to co-operate with relevant agencies to map out plans to disburse State budget in order to pay arrears for the Government’s infrastructure construction projects.

Under the directive, Phúc has required the State Bank of Việt Nam (SBV) to closely supervise and inspect credit institutions and the VAMC in the implementation of the resolution.

The central bank must also work out with relevant ministries and agencies a streamlined legal framework proposal for settling bad debts and collateral assets and submit it to the Government before August 15, 2021, based on effects of the enforcement of the resolution.

Besides enhancing supervision, the SBV must also take responsibility for streamlining current legal regulations on the governance of credit institutions, especially risky governance, and credit granting for credit so as to minimise bad debts the next time.

Last month, NA deputies ratified the resolution on dealing with banks’ bad debts. Experts have applauded the resolution, saying it is necessary to reduce the bad debt ratio of credit institutions, including the debts sold to VAMC, to below 3 per cent.

With the resolution, credit institutions and the VAMC can trade bad debts in an open, transparent manner at market prices, in accordance with the law, they said.

Huỳnh Minh Tuấn from VnDirect Securities said the resolution would perform the important job of clearing away congestion in the economy, which agencies have been trying to do for the past five to six years but only with modest success. Now, the resolution will give more rights to credit institutions to liquidate mortgaged assets, thereby helping to avoid prolonged lawsuits related to debt collection and reducing capital costs.

According to an SBV report, by the end of 2016, non-performing loans across all credit institutions accounted for 5.8 per cent of the institutions’ total outstanding loans. If hidden debts are also taken into consideration, the total is 10.08 per cent.

VNA/VNS/VOV/SGT/SGGP/TT/TN/Dantri/VNEVET