CPI prolongs rise in major cities as food costs increase

The consumer price index (CPI) in the country's two largest cities continued to rise in August, according to the statistics departments of Ha Noi and HCM City.

The Ha Noi Statistics Department reported that the capital's CPI rose in August by 0.19 per cent over July, and increased 3.32 per cent over the same period last year.

The department added that the CPI increase in the capital city in August is equivalent to the previous month, despite the decrease in staple items, such as housing, building materials, electricity, tap water, fuel and transport costs.

The CPI increase in Ha Noi is attributed to the rising costs in restaurants and food services, which rose 0.38 per cent against the previous month.

Also, the surge of food and foodstuff prices increased by 0.66 per cent against the previous month due to the high demand of the public during the seventh lunar month of this year and the upcoming Mid-Autum Festival.

Additionally, the garment and textile, and footwear groups rose considerably, by 0.38 per cent against July.

In HCM City, the HCM City Statistics Department reported the August CPI was up 0.05 per cent against July.

Five of the 11 baskets of goods saw an increase in prices this month. Among these, restaurant and catering services rose by 0.32 per cent, beverage and cigarette groups saw an increase of 0.05 per cent, garment and education rose by 0.10 per cent and commodity and other services were up 0.17 per cent.

The department added that four of the 11 baskets of goods that saw a decrease were fuel (0.74 per cent), household appliances (0.15 per cent), transportation (0.02 per cent), and culture and entertainment (0.01 per cent), while drug and telecoms remained unchanged.

In August, prices in water and electricity in HCM City continued to fall due to low demand, as the price for materials for housing repairs and maintenance saw a slight decrease. Of note, gas prices were reduced by 1.68 per cent.

David Duong wins a US$2.7 bil contract in the US

California Waste Solutions (CWS), parent to Vietnam Waste Solutions, of Vietnamese tycoon David Duong was awarded a US$2.7 billion rubbish contract for the city of Oakland, California.

After three hearings, CWS clinched the deal against rival Waste Management – the US largest solid waste collector. The contract commences in July 2015 and has a duration of 20 years.

David Duong, CWS President and General Director said CWS won the bid – the largest contract in Oakland city thanks to its competitive price and the company’s reputation for quality service.

David Duong has also invested heavily in the Da Phuoc Solid Waste Treatment Complex in HCM City. He plans to build a solid waste treatment complex worth US$700 million in Thu Thua district, Long An province with a daily capacity of burying 40,000 tonnes of waste.

David Duong said the project in Long An will apply the world’s latest technologies in accordance with standards of the US Environmental Protection Agency and Vietnam’s Law on Environmental Protection.

David Duong emigrated from Vietnam to the US with his family in 1979.  While his younger siblings went to school during the day, he worked and went to school at night to learn English.

David saw an opportunity in the rubbish business and began a small recyclables company and rapidly built it into one of the most successful companies in the industry.

New wave of Japan’s investment in Vietnam

There is a new wave of investment of Japan’s small and medium-sized enterprise (SMEs) to Vietnam, said Dr. Vu Tien Loc, President of Vietnam Chamber of Commerce and Industry (VCCI).

Japan has invested in 18 out of 21 economic sectors in Vietnam, especially in the field of the manufacturing industry with 1.231 projects

Last year, Vietnam’s exports to Japan fetched US$13.65 billion and its imports were US$11.61 billion.

In the first seven months of the year, Vietnam exported goods worth US$8.5 billion to Japan including commodities surpassing the turnover of US$100 million such as seafood, coffee, wooden products and garment and textiles.

VCCI has quoted the Japan External Trade Organization (JETRO) survey as saying that 60% of Japanese enterprises in Vietnam were profitable last year.

Especially, up to 70% of Japanese businesses continued to expand business in the country thanks to high growth and revenue. Some surveyed businesses highlighted scale of market, growth capability, political stability and low-cost labour force.

Loc emphasized that Japanese businesses are estimated to have invested some US$10 billion in Vietnam in the future.

At present, 14 Japanese banks are seeking investment opportunities in the field of automobile, environment and waste water treatment.

Representatives from 14 Japanese banks said that despite challenges, the trend of investment in Vietnam will continue to increase in the coming time.

Over 250 businesses join int’l pharmaceutical expo

The 14th Ho Chi Minh City-International Hospital, Medical and Pharmaceutical Exhibition kicked off on August 21, drawing over 250 businesses both at home and abroad.

The expo aims to introduce new products and technologies, and connect trade activities between domestic and foreign businesses, thus further developing the domestic market with the focus on medicine, medical equipment, dental and ophthalmological products.

Companies from the Republic of Korea (RoK), India, Germany, Russia, Colombia, Italy and Japan maintain their booths at the event.

Participating businesses are offered a chance to join fact-finding tours of prestigious Vietnamese pharmaceutical manufacturing companies and hospitals.

Daniel Lee, chief representative from the RoK’s Sky SoftGel Co., Ltd, said that joining the event for several years has helped his company to meet more partners and understand more about pharmaceutical production demands and consumer tastes in Vietnam.

The event will end on August 23.

EU-funded project helps boost timber production

The Vietnam Administration of Forestry (VNAF) in coordination with the World Wide Fund for Nature (WWF) and People and Nature Reconciliation (PanNature) launched “Common Access to the Voluntary Partnership Agreement (VPA) Process in Laos and Vietnam” project in Hanoi on August 21.

The project, sponsored by the European Commission (EC) and The Swedish International Development Cooperation Agency (SIDA), will be implemented in four years (2014-2018) with the total investment of 2.6 million Euro of which, 80% come from the EC aid and the remainder from the WWF’s counterpart funding.

The EU funded project helps the government, small and medium-sized timber processing enterprises (SMEs), civil social organisations (CSOs) and the communities living near the forests in some provinces bordering with Laos better understand and comply with the EU’s timber regulations.

VNAF Deputy Director General Nguyen Ba Ngai said that within the framework of Forest Law Enforcement, Governance and Trade Programme (EU FAO FLEGT Programme), Vietnam has officially negotiated with the EU on VPA project from November, 2010.

The launch of the project will contribute to improve capacity of  concerned parties in the process of VPA negotiations between Vietnam and the EU which are expected for completion by the end of this year, Ngai added. The VPA/FLEGT is the trade agreement between the Vietnamese Government and the EU to iron out snags production and exports of timber products to the EU market.

Vietnam, Japan boost agricultural cooperation

Ibaraki Governor Masaru Hashimoto affirmed Japan’s desire to expand scientific cooperation in agricultural with Vietnam at a welcoming reception on August 20 for a visiting Vietnamese delegation.

Hashimoto told Deputy Minister of Science and Technology Tran Viet Thanh and Ambassador Doan Xuan Hung at the reception that he is leading a business delegation of around 70 leaders from the agriculture and scientific community to Vietnam on October 5.

During the visit, the Japanese delegation plans to conduct research and work with relevant agencies to lay out a specific and detailed cooperation programme between Ibaraki and Vietnam in the areas of cooperation and technology transfer in agriculture.

Hashimoto said he hopes the Vietnam Ministry of Science and Technology (MoST) will cooperate in scientific and technological research and development in all agricultural fields.

For his part, Deputy Minister Thanh welcomed Ibaraki’s offer of support for scientific and industrial cooperation in agriculture and offers to implement key agricultural and rural development projects in Vietnam.

Human resources awards launched in Hanoi

The Ministry of Labour, Invalids and Social Affairs (MoLISA) on August 20 launched a human resource awards competition at a ceremony in Hanoi.

Speaking at the event, Deputy Minister of Labour and Social Affairs Nguyen Trong Dam said that this year’s awards focus on assessing the business strategy for developing human resources.

The competition is open to all businesses that have been registered to do business in Vietnam for at least three years.

All entries must be received by September 19 and the 15 top businesses will be announced in early December.

Poor lack financial services access

Viet Nam is facing challenges in granting the poor with access to micro- and general finance, with only 21 per cent of Vietnamese adults having access to these informal services.

Micro-financing provides small loans that enable poor households with little or no access to formal financial institutions to take part in production or start up their small businesses. It includes several services such as credit, savings and insurance.

At a conference on micro-finance held here last Tuesday, Nguyen Phuoc Thanh, Deputy Governor of the State Bank of Viet Nam (SBV), identified Viet Nam as one of the nations in Southeast Asia with a low rate of access to financial services.

"The country has been on the road to informalisation and professionalisation," Thanh said at the conference entitled "Towards a sustainable and responsible micro-finance sector in Viet Nam."

"However, women and the poor have less access to financial services, especially in rural areas, and only 8 per cent of adults have savings in formal financial institutions," he added.

Thanh said Viet Nam has been challenged in the area of competitiveness, which required improving the capacity of organisations for capital, human resources and management, and the renewal of technologies and services.

A study of the TYM Fund, the country's first licensed micro-finance company, showed that micro-finance has helped to raise the living standards of millions of households by helping poor and low-income earners gain access to financial services.

According to the study, more than 90 per cent of poor households were able to earn larger incomes and generate enough capital for production and businesses after using micro-finance services. This shows that the sector has actively contributed to the country's socio-economic development.

Duong Thi Ngoc Linh, TYM Fund General Director, said his company's products, including loans for businesses, construction and repair, have proven to be tailor-fit to the needs of the poor.

TYM Fund has provided loans to people without requiring any collateral. Last year, it lent around VND1.08 trillion (US$51.7 million), with a total debt balance of VND582 billion. As of May, it has offered loans to 97,200 people, with a debt balance of VND640 billion ($30.48 million).

Margaret Miller, a World Bank senior economist, said the demand for financial services in developing countries was high, as 70 per cent of adults in these countries had little or no access to services such as savings, credit, payment and insurance. The percentage was even higher among women and the poor, and in rural areas.

The model of development will bring both opportunities and challenges to financial institutions that serve low-income earners, Miller said.

Dong Nai supports riot-hit businesses

Authorities in the southern province of Dong Nai have provided support to factories damaged in the riots on May 13-14 and are set to provide more, they said at a meeting with affected companies in Bien Hoa city on Wednesday.

"It is difficult to compensate the mental fear, the loss of time, even the business opportunities, suffered by enterprises," Phan Thi My Thanh, deputy chairwoman of the province People's Committee, told the meeting.

"But we hope that investors realise the goodwill and active support of the local government."

The riots caused a loss of over VND376 billion (US$17.8 million) to 205 companies in the province. Of them, 82 suffered small losses and resumed work on their own, while 123 others received support from the authorities.

Fifty of them got tax refunds of over VND322 billion ($15 million) and other tax breaks.

The province also waived or reduced land rentals to the extent of VND12.75 billion ($601,000) for 19 businesses each of which suffered property losses of over VND1 billion ($50,000).

The province customs department helped 34 affected companies with customs procedures and condoned their loss of digital signatures, tax declaration documents, and delay in completing customs procedures.

Infrastructure companies have deferred tariffs, in many cases for up to six months.

"Several enterprises were also allowed by banks to delay payment of interest on loans," Thanh said.

The province has asked workers to share their employers' difficulties by not asking for wages for the days the company was closed or agreeing to accept only half wages.

Hung Chih Hsing, deputy general director of Formosa Taffate Dong Nai Company, which suffered the biggest loss — of VND103 billion ($4.8 million)— urged the local authorities to persuade insurance companies to settle their claims.

"An insurance settlement advance of VND37.6 billion was paid to 34 damaged enterprises and we have recently asked the insurance companies to speed things up," Thanh said.

"We also continue to ask the Ministry of Finance to direct the insurance companies to quickly make the settlements for the enterprises to resume production."

Workers at only three companies were not paid wages – many of the firms insisted on paying even when their employees agreed to forego salaries — and the province will compensate those that paid to the extent of VND42 billion ($1.9 million).

Infrastructure projects target Ly Son Island

The central province has listed 16 priority projects for Ly Son Island district's socio-economic development with total investment capital of VND2.3 trillion (US$110 million).

The projects will take advantage of the island's first stable power supply, with a 35km power line scheduled to be completed at the end of this year, said vice chairwoman of the island district's people's committee Pham Thi Huong.

The line will provide electricity for the 21,000 residents of An Vinh and An Hai, the major communes on the island, and islet An Binh. Currently the island has to pay an average of VND10 billion ($476,000) annually to cover the costs of diesel generators.

The list of investment projects also includes a dyke, fishing port, Hoang Sa-Truong Sa museum and tourism services.

Located 30km off the coast of the central province, the island is a tranquil destination where inhabitants make a living from farming garlic and spring onions and fishing.

Steelmaking group worried about effect of Russian imports

The Viet Nam Steel Association is proposing reasonable import tax rates for iron and steel products amid concerns over the effects of a possible mass inflow of imported steel from Russia.

The concern was aired during free trade agreement (FTA) negotiations with the Customs Union of Belarus, Kazakhstan and Russia. It comes amid difficulties in Viet Nam's steel industry in recent years resulting from high inventories and oversupply, which have made competition, even among domestic steel producers, harsh.

The setting up of import rates for Viet Nam's products, including steel, at the negotiations is now underway, said the Hai Quan (Customs) online newspaper.

The newspaper quoted association officials as saying that the competition in the sector would grow harsher since Russia was one of the world's largest steel producers.

It cited figures showing that Russia ranked fifth in the world in steel production last year with 68.7 million tonnes, far beyond Viet Nam's modest 5.6-million-tonne production. Russia's iron and steel exports reached 23.6 million tonnes.

The country's steel industry will be facing possible shutdown if imported steel from Russia is granted a zero tax rate under the proposed FTA, association officials said.

The association proposed that import tax rates for steel under the FTA negotiations adhere to Viet Nam's commitments to the World Trade Organisation even as it helps protect local producers from unequal competition.

The sixth round of FTA negotiations with the Customs Union closed on Wednesday in Russia's Sochi City. The next round will also be held in Russia from September 15 to 19.

HCM City invites investment from overseas-based Vietnamese firms

The HCM City authorities would readily support overseas-based Vietnamese enterprises to do business in the city, representatives of the state offices said at a meeting here yesterday.

The meeting between the authorities and overseas-based Vietnamese enterprises was organised by the HCM City Investment and Trade Promotion Centre and the HCM City Committee of Overseas Vietnamese to solve the difficulties in investment and trading faced by these firms.

About 80 Vietnamese enterprises involved in import, export, production and services in 11 countries and territories such as Australia, France, US, Singapore, Belgium, Canada, Germany and Japan attended the meeting.

The city customs and taxation departments provided information about customs and taxation procedures for import and export activities in the city, the Vietnam News Agency reported.

Meanwhile, the overseas-based Vietnamese enterprises paid attention to the details presented about the various kinds of taxes and preferential interest rates for loans, including individual income tax, corporate income tax, value added tax for imports, tax for high-tech projects and loans with soft interest rates.

Pham Duc Hoa, an expert from the Taxation Department, said eligible enterprises could get loans at zero interest rate for some products such as office stationery and food for consumption in the enterprises.

HCM City would offer tax incentives to enterprises which invest in sectors that the city promotes for investment purposes, he said.

Nguyen Chi Dung, a representative from the Nguyen Chi Technology Company and Phan Van Tuc, a Vietnamese based in Japan, proposed that the state should review regulations for import of second-hand equipment and technology because it is difficult to assess the value of such items.

Viet Nam posts small trade surplus

The country posted a small trade surplus of US$17 million in the first half of August after reporting a trade deficit the previous month, the General Department of Customs said.

The country's export value in the period reached $6.193 billion, while the import value was $6.176 billion.

The positive results have lifted the trade surplus earned so far this year to $1.81 billion. The export value in the period between January and the first-half of August reached $90.079 billion, while the import value was $88.268 billion.

The small trade surplus was achieved thanks to the high export value of foreign firms which reported a trade surplus of $313 million in the first half of August, and of $5.93 billion in the period between January and the first-half of August.

The textile and garment sector beat mobile phones to become the top earning sector with $1.07 billion.

Textiles and garments also became the unique products to earn more than $1 billion in the period.

The export value of mobile phones was $811 million, followed by computers and electronic products and footwear with $460.8 million and $453.5 million respectively.

During the period, the country spent the maximum amount of $1.03 billion on importing machines and equipment.

The country also spent $699.6 million on importing computers and electronic products; $375.6 million on cloth, $355.7 million on steel products and $323.6 million on oil and petroleum products.

Sri Lanka to buy Vietnamese rice

Sri Lanka's Minister of Industry and Commerce, Rishad Badiutheen, has asked Vietnamese exporters to supply 15,000 tonnes of rice to his country.

The minister made the suggestion to Minister of Industry and Trade Vu Huy Hoang during talks in Ha Noi on Wednesday.

Both sides agreed to establish a subcommittee on trade and speed up the realisation of a memorandum of understanding on oil and gas.

These activities will make it easier for the Vietnam National Oil and Gas Group and the Vietnam National Petroleum Group to work closely with their Sri Lankan partners.

Sri Lanka is now the 65th biggest investor in Viet Nam with 10 projects worth over $14 million. Viet Nam has, however, yet to set up any projects in Sri Lanka.

South Korean investors eye thermal power plant

The Korea Electric Power Corporation (KEPCO) has shown interest in investing in the Song Hau 3 thermal power plant, a major project in the Mekong Delta province of Hau Giang.

At a working session with KEPCO representatives on Tuesday, chairman of the provincial People's Committee, Tran Cong Chanh, pledged to provide the best possible conditions for the investors.

The two-turbine, coal-fuelled plant, will have a capacity of 1,200 MW. It will cover 57ha in the Phu Huu ‘A' concentrated industrial complex in Chau Thanh District.

Several major thermal power plants are under construction in Hau Giang province, including the 1,200 MW Song Hau 1 and the 2,000 MW Song Hau 2.

The three projects are part of the Song Hau Power Centre spreading over 360ha in Chau Thanh district.

Southern province sets aside land for cacao, cashews

Trong Duc Cocoa Co Ltd in southern Dong Nai Province plans and local farmers will create a 1,000-ha specialised area for cacao farming and cashew trees.

Company director Dang Truong Khanh said his firm would sign agreements with agricultural cooperatives in the districts of Dinh Quan, Tan Phu, Thong Nhat and Xuan Loc to provide farmers with equipment and technology for processing cacao and cashew fruits.

The company will purchase the partly processed fruit at a higher price than the market price.

Buy-to-let offers easy cash returns

Apart from popular rental areas in central Hanoi and West Lake, My Dinh and Ha Dong are emerging as popular new destinations for buy-to-let apartments.

My Dinh, in western Hanoi, is apparently becoming one of the most attractive destinations for foreigners to lease apartments mainly due to its location on routes linking Hanoi with industrial zones north of the city, as well as Bac Ninh and Thai Nguyen provinces.

This area also has several high-rise office buildings servicing international companies. It is now steadily maturing as a viable lifestyle choice location with several international schools, restaurants and shopping centres.

Among more than 380 units of Indochina Plaza Hanoi which have been sold, around 160 are currently occupied by foreigners.

With rental prices of $1,700 to $2,500 per month, these apartments are expected provide up to VND450 million ($21,400) per year in earnings for owners.

Meanwhile, Dolphin Plaza is a popular address for Japanese, Koreans and Singaporeans.

According to Nguyen Bich Son, business development director of the PMC, buy-to-let apartments are becoming more popular as homebuyers seek profits from leasing.

Apartments with high construction quality, good facilities and a pleasant environment are keenly sought by foreigners. Other factors include good quality schools and ease of access to work places.

Son said there were similar opportunities in the southern suburb of Ha Dong. Apartments at the Hyundai Hillstates development, a Korean-backed residential project, are being leased at VND14 to 16 million ($666 to $760) per month.

Out of around 300 apartments already in use, more than 100 were leased to foreigners, mostly Koreans who were working in Ha Dong and neighbouring areas.

In order to attract more buyers, developers of newly built buildings in Hanoi are also offering more incentives, including being prepared to take on newly-bought apartments and putting them out to lease.

The investor of Dolphin Plaza has claimed it can guarantee rental returns of $1,000 to $1,700 per month.

The project’s investor claims the profit ratio of leased apartments in Dolphin Plaza could be from 7 to 8 per cent per year, providing better returns than US dollar deposits. Apartment owners do not have to worry about finding tenants and are exempt from management fees for the first three years.

For many years, demand for apartments and house leases have been focused in Hanoi’s central districts. The most popular areas continue to be the districts of Hoan Kiem, Tay Ho, Dong Da, Ba Dinh and Hai Ba Trung.

Dubious Canadian firm eyes $8bn oil refinery project

Malaric Vietnam Trade Investment JSC, representative of Canada’s Malaric Group, has asked the Ministry of Industry and Trade (MoIT)’s permission to join the Nam Van Phong refinery project, in which Vietnam National Petroleum Group (Petrolimex) is the main investor.

However, Nguyen Van Khanh, head of Petrolimex’s refinery department said “Petrolimex has not yet had any contact with Malaric, and has not signed any agreements regarding co-operation.”

Malaric is a largely unknown firm, with a Google search yielding no results.

In an earlier move, South Korea’s Daelim Industrial Co. Ltd. and Petrolimex signed a deal with Nexant Inc. to conduct a feasibility study for the project. The study was completed at the end of 2013.

“Petrolimex and Dealim have since discussed sourcing potential investors, particularly financial investors, to co-operate with them on the project,” Khanh said.

The $8 billion Nam Van Phong refinery project in the central province of Khanh Hoa has the planned capacity of refining five million tonnes of crude oil per year. It is included in the list of national projects calling on foreign investment capital through 2020. The government is looking for experienced foreign investors that are committed to providing input crude oil for the project over the long-term.

The MoIT has asked a number of countries, most recently the UAE, to encourage firms to invest in the refinery project, but to date no foreign investor other than Daelim has approached Petrolimex to discuss co-operation.

Petrolimex and its partners hope the Vietnamese government will issue preferential policies to investors in the refinery, similar to those provided to the Dung Quat, Nghi Son and Vung Ro refinery projects.

Construction firm to expand holding in state-owned transportation consultant

FECON Foundation Engineering and Underground Construction JSC (HOSE:FCN) is looking to increase its share position in consulting firm Transport Engineering Design Inc. (TEDI).

Accordingly, FCN plans to buy 2.6 million shares of TEDI at no higher than VND21,900 ($1.04)/share to raise its current 5 per cent holding to 25.76 per cent.

The move is aimed at facilitating co-operation between the two firms, particularly in research and development, an FCN representative explained.

FCN originally bought 5 per cent of TEDI to join as the firm’s sole domestic strategic partner. TEDI sold the entire 20.8 per cent stake it put up in its March IPO and the state currently maintains a 49 per cent stake.

Transport Engineering Design Inc. (TEDI), established in 1962, is a national leader in designing transport infrastructure and providing consultancy services.

In early August TEDI proposed the Ministry of Transport sell the state’s 49 per cent stake to the firm’s employees. The sale will help TEDI become eligible to bid on ODA projects and those offered by the transport ministry.

Leading electronics retailer adjusts focus to small provinces

Tran Anh Digital World Joint Stock Company (HNX:TAG) seems to be switching its focus to smaller provinces, after a recent announcement that it will close one of its ten Hanoi stores on August 31.

At the same time, the computer and electronics retailer has been preparing to open its first store in the northern province of Hai Duong in August and another in Nam Dinh in September.

“The closing of the Hanoi store is part of our new strategy,” said a representative from TAG. The Hanoi location to be closed is on Cat Linh street, which is only 15 months old. It is the smallest in TAG’s chain, at 170 square metres.

As a result of the closure, TAG will have 10 stores open in the north – nine in Hanoi and one in the northern province of Ninh Binh, which opened in June.

TAG joined the top 500 retailers in Asia Pacific this year, according to Retail Asia Publishing Pte and Euromonitor (Asia) Pte Ltd. It made a net profit of VND4.7 billion ($222,200) in the first half of 2014, down 60 per cent against the same period last year, while its revenue grew 43 per cent on-year to VND1.167 trillion ($55.3 million).

Vietnam’s top tyre producer withdraws from non-core real estate business

Southern Rubber Industry Joint Stock Company (HOSE:CSM) has sold its entire 40 per cent stake in subsidiary Tan Thuan Viet Real Estate Joint Stock Company for VND46 billion ($2.18 million).

The divestment is part of the firm’s plan to withdraw from all non-core lines of business to focus on its main line of producing tyres.

CSM in April started operating its VND1.5 trillion ($72 million) first phase of its radial tyre plant with the capacity of 350,000 tyres per year in phase one. The products are planned to hit the market in the third quarter of this year.

CSM hopes the plant will help tap Vietnam’s vast potential, as the country now imports 90 per cent of its radial tyres. It faces heavy competition from foreign peers such as Michelin, Bridgestone, and Kumho.

CSM, also known by its Vietnamese name Casumina, is the leading Vietnamese tyre producer with 25 per cent of the car tyre market and 35 per cent of the motorbike tyre market. The firm’s products are exported to 36 countries and territories around the world.

CSM reported profits of VND169.3 billion ($8 million) in the first half of 2014, up 0.4 per cent on-year, and revenues of VND1.47 trillion ($70 million), down 4.5 per cent on-year.

Three foreign funds register to sell Vinamilk shares, F&N on the hunt

Three foreign funds have registered to sell part of their stakes of Vinamilk Corp (HOSE:VNM).

Specifically, Vietnam Enterprise Investments Limited has registered to offload 5.4 million shares, Amersham Industries Limited 4.8 million shares, and Norges Bank 1.2 million shares, between August 14 and September 12, via put-through transactions.

If successful, the three funds would reduce their respective holdings to 1.05 per cent, 0.87 per cent and 0.4 per cent.

Meanwhile, Singapore-based dairy maker F&N Dairy Investments Pte Ltd has registered to buy 15 million shares of VNM, Vietnam’s biggest dairy producer.

VNM’s consolidated net profit fell by 12 per cent on-year to VND2.97 trillion ($140 million) in the first half of 2014, while its revenue rose 15 per cent on-year to VND16.9 trillion ($801 million). The company has said the loss is due to sales and promotions expenses to maintain its market share.

Chinese firm loses brand case

An industrial property right dispute between a Chinese firm and a local partner has ended after a court ruling backed the domestic business.

The Hanoi People’s Court (HPC) recent first instance session heard a dispute on industrial property right transfer between Vietnamese enterprise - Thanh Long Lighting Co., Ltd (TLL) - as defendant, and plaintiff, Chinese firm NVC Lighting Technology Corporation (NVC).

The two companies originally signed a contract in April 2006 in which TLL would act as the exclusive agent for the Chinese firm to distribute NVC lighting products in the Vietnamese market. As part of the agreement, NVC told TLL to go and register their industrial property rights at the National Office of Intellectual Property Right Protection (NOIP). The same month TLL registered the NVC brand in the Vietnamese market.

TLL received an industrial property right registration certificate for the NVC brand from the National Office of Intellectual Property of Vietnam (NOIP) in November 2008.

In March 2012, TLL and NVC signed a contract on industrial property right transfer of NVC brand. The contract which came into force from April that year regulates that from that date all the rights, the certificates and associated benefits will be transferred to the Chinese partner NVC.

However, the Chinese company claimed that the local partner TLL had not executed this part of the deal to return them the original certificate which meant NVC was unable to continue to register their industrial property right at the NOIP themselves.

The NVC proposed that the Hanoi People’s Court force TLL to complete its obligations and restore the NVC brand registration certificate to the Chinese.

TLL director Nguyen Chi Thanh, however, claimed that he did not know about the contract until he received a court notification.

“I only got to know about this so-called contract when working with the Hanoi People’s Court and was greatly concerned that Clause 1 in the contract stated a zero transfer price on the fixed brand,” said Thanh.

He said part of the contract was just a draft without seal.

Article 148 in the Law on Intellectual Property regulates that industrial property rights were only established upon registration at an agency able to issue such recognition. Any contract would be based on this agency’s recognition.

In this case, NVC had yet to register with a Vietnamese agency for the transfer of their own industrial property, so it could not be determined that the contract had taken effect.

In its reply to the Hanoi People’s Committee dispatch to the NOIP asking whether the contract on industrial property right transfer between TLL and NVC had been registered, the NOIP confirmed such a contract had not been recorded on the registration list at the office.

This means pursuant to Item 1, Clause 148 in the Law on Intellectual Property the contract on industrial property right transfer between TLL and NVC had yet to come into force.

The alleged transfer contract was then announced invalid in the Hanoi Court’s recent court of first-instance.

In dealing with repercussions of an invalid contract, Article 137 of the Civil Code states “when a civil transaction is invalid, the parties shall be restored to the original status and shall return to each other what they have received.”

In this case, since the transfer price was set zero, and the related parties still do not handle their obligations (as the contract still does not take effect under current regulations), there will be nothing exchanged between the involved parties.

Shop owners rush to clear stocks before Saigon Tax Trade Center’s October shutdown

Shop owners in southern Vietnam’s Saigon Tax Trade Center are trying to bargain away their goods so that they can sell out their stuff in time to move away from the shopping center, which will be torn down to make room for a skyscraper.

Many are offering up to 50 percent discounts or more from now to the end of next month to unload all their stocks as fast as they can in order to meet the removal deadline.

All shop owners have been told to move out of the 130-year-old trade center by the end of September to make way for the construction of a 40-story building.

At the request of the Ho Chi Minh City People's Committee, 500 square meters out of a total of 15,000 square meters of the center’s gross floor area will be set aside for the construction of a part of a metro line station.

The committee has required the area to be handed over to the Ho Chi Minh City Urban Railway Management Board for building the ventilation structures of the metro station, one of 14 stations of the Ben Thanh-Suoi Tien metro line, by October.

The planned subway, 19.7km long, is the first-ever to be constructed in Vietnam that will run from District 1 through Binh Thanh District, District 2, District 9 and Thu Duc District in Ho Chi Minh City before reaching Di An Town in neighboring Binh Duong Province. It is estimated to cost US$2.49 billion.

The remaining area of Saigon Tax Trade Center, managed by state-run Saigon Trading Group (Satra), will be pulled down for the development of the skyscraper, which will start next year.

The center’s management board and shop owners previously agreed that the owners would be informed of its demolition at least six months before any leveling work.

But the board could only notify shop owners of their required relocation on August 12 because of a late notification from higher authorities.

To make up for this lateness to some extent, the management board has decided to exempt shop owners from two months’ rental fees.

Moreover, they are entitled to an option to move to other Satra shopping centers at C6 Pham Hung Street in District 8 or Saigon Supermarket in District 10.

The board has also proposed that Satra give those adversely affected by the sudden displacement the rights to have a place in the new shopping center inside the planned skyscraper.

It will allow shop owners to sell their goods at 50 percent discounts at the center lobby on the ground floor for better visibility from September 1 to 30, whereas the owners normally can offer such discounts at their stores only.

Construction work will begin on the multi-million-dollar 40-story building in the first quarter of next year, according to a Satra plan.

The skyscraper will be named Tax Plaza, which includes a shopping center, offices for lease, exhibition and convention areas, conference rooms, and underground parking facilities that can house about 2,100 cars and motorcycles.

Saigon Tax Trade Center is a long-standing and renowned commercial center with a total floor area of 15,000 square meters, located in the heart of District 1.

Built in 1880, the building, originally named Les Grands Magazins Charner, bears the characteristics of French colonial architecture like those found on such constructions as Ben Thanh Market, Notre Dame Cathedral, Saigon Central Post Office, Saigon Opera House, Reunification Palace and the seat of the Ho Chi Minh City People’s Committee.

According to Satra’s website, Les Grands Magazins Charner sold luxury items imported mainly from Britain, France and other Western countries to the elite in Saigon, former name of Ho Chi Minh City, and rich landowners in provinces in the southern part of Vietnam.

In the 1950s, world-renowned brand Hermès even made its debut in Vietnam at Le Grands Magasins Charner.