HCM City backed to develop hi-tech human resources

The authority of Saigon Hi-Tech Park (SHTP) and Holland-based FabMax BV (FabMax) have struck a memorandum of understanding on human resource development for the chip sector with funding from the Dutch government.

The two sides will cooperate in training programs related to integrated circuits and special courses at the training and research centers of the park in HCMC’s District 9.

They will jointly provide services and assessments regarding machinery and equipment, fab-care services, research and development (R&D), production, and distribution as well as organize seminars at home and abroad.

Besides, FabMax will assist in consulting, introduce experts and equipment.

The collaboration aims to increase the quality and quantity of personnel to meet the needs of high-technology enterprises operating in and outside SHTP.

SHTP last year granted investment certificates to 10 projects with combined investment pledges of US$1.9 billion. There have been 68 approved local and foreign investment projects with total registered capital of nearly US$4.2 billion.

Enterprises at SHTP posted exports of some US$3.1 billion last year and more than US$10 billion so far, accounting for more than 90% of the city’s high-tech export value.

Local content in products made at SHTP increased to over 32% last year from 20-22% in 2010.

The R&D Center has announced to commercialize four products at SHTP, including nanotech lotions, pressure sensors, container locks and galvanometers.

The number of companies involved in R&D at SHTP was 22 last year.

EU firms sound out food market prospects

A delegation comprising of 14 European companies have arrived in Vietnam to look for opportunities in the food sector and prepare to tap into chances to be brought by the Free Trade Agreement (FTA) the two sides will sign, hopefully this year.

As scheduled, the EU businesses meet with more than 100 local distributors in Hanoi and HCMC until this Sunday.

Speaking at a seminar in the capital city Tuesday, Joao Rodriges, marketing director of Grupo Montalva, said the company hoped to find partners such as hotels, restaurants and supermarkets to sell its meat products.

Grupo Montalva will consider plans to build a processing facility in the country, Rodriges said.

The delegation also consists of beverage firms which want to branch out into Vietnam.

Denis Lance, sales manager of Alcor specializing in spirits, said the company wanted to look for local distributors and expected the FTA would help ease procedures and tariffs for liquor imports.

The Ambassador and Head of the European Union Delegation to Vietnam, Franz Jessen, said the FTA between Vietnam and the EU will pave the way for European food and beverage enterprises to enter Vietnam.

Vietnam’s exports to the EU have increased by an average 15% a year over the past decade while the imports have also gone up significantly.

The bilateral trade doubled from nearly US$6.5 billion in 2000 to US$36.8 billion in 2014. The EU was the largest importer of Vietnamese commodities in the 2010-2013 period and followed the U.S. last year.

Short-term inter-bank rates inch up

The average interest rates for under-one-month loans on the inter-bank market picked up last week but the rate for one-month loans declined, VietnamPlus cites a central bank report.

The average overnight, one-week and two-week rates grew 1.03 percentage point, 0.37 percentage point and 0.38 percentage point per year respectively against the previous week. Meanwhile, the one-month rate fell 0.36 percentage point per year.

Despite the changes, deposit rates were stable and even dropped at many commercial banks. For example, Eximbank, LienVietPostBank and TPBank slightly lowered the rates by 0.1-0.2 percentage point per year.

The rates of demand and below-one-month deposits in Vietnam dong currently range between 0.8% and 1% per year while the respective deposit rates of one-month and under-six-month terms, six-month and under 12-month-terms, and over-12-month terms are 5-5.5%, 5.7-6.7% and 6.7-7.3% per year.

The interest rates for loans in Vietnam dong also remain stable, with 7% per year for short-term loans and 9-10% for medium- and long-term loans in priority fields. On other fields, the common rates for short-term and medium- to long-term loans are 7-9% and 9.5-11% per year respectively.

According to the central bank, with dollar transactions, the average inter-bank overnight and one-month rates market inched up 0.02 and 0.03 percentage point. Meanwhile, the rates of one-week and two-week dollar loans dropped 0.17 and 0.04 percentage point.

Regarding dollar deposits, the rates are 0.75% per year for individual clients and 0.25% for corporate customers. In addition, the rates in short-term dollar loans are 3-6% per year and medium- and long-term dollar loans 5.5-7% per year.

Ministries meet on goods supply for Tet holidays

The Ministry of Agriculture and Rural Development and the Ministry of Industry and Trade yesterday met to debate measures to stabilize goods prices and supply sources for the Lunar New Year Festival in February.

Head of the Agro-Forestry, Seafood Processing and Salt Industry Department Vo Thanh Do said that rice supply for the coming Tet holidays is abundant with over 1.5 million tons in January and February.

Rice prices have been stable or slightly reduced by VND200-300 a kilogram in the southern region where is entering the winter spring crop.  The Ministry of Agriculture and Rural Development forecast rice consumption demand will somewhat increase in the Tet occasion.

Deputy Head of the Department of Livestock Tong Xuan Chinh said that supplies of pork and beef, poultry and seafood are expected to be plentiful. These goods’ prices have been stable or in down trend thanks to petrol price fall. The department reported an increase of 20 percent in the output of pork and beef, poultry, eggs and milk for Tet holidays in January and February over normal months.

The Department of Cultivation said that vegetable area has reached 881,000 hectares, up nearly 33,000 hectares over the same period last year thanks to fine weather.

At the meeting Deputy Minister of Industry and Trade Do Thang Hai said that provinces and cities are rushing to stockpile goods for Tet holidays, as Hanoi has spent VND16 trillion (US$748.36 million) for the purpose.

Goods scarcity will not occur in big cities such as Hanoi and Ho Chi Minh City but might happen in some remote areas, he added.

Urgent need for Long Thanh airport project to be evaluated

The Ministry of Transport has proposed hiring a Japanese consulting firm to evaluate the need for developing an international airport in Long Thanh District in the southern province of Dong Nai to ease overloads at Tan Son Nhat airport in HCMC.

At a meeting with the National Assembly’s Economic Committee in Hanoi on Tuesday, Minister of Transport Dinh La Thang requested the Ministry of Planning and Investment and Airports Corporation of Vietnam (ACV) to analyze the urgency and other issues raised by experts for the Long Thanh International Airport project.

The meeting was held for the transport ministry and ACV to clarify issues related to the big-ticket project with representatives of the committee less than one month after the committee gathered comments from aviation experts against the international project.

At the meeting, ACV compared the design of Long Thanh airport with that of Changi Airport in Singapore and airports elsewhere in the world and suggested plans to execute the airport project in Vietnam.

The investor of Long Thanh also presented revised plans for construction, site clearance, functional areas, investments and capital mobilization for the airport, which is 32 kilometers from Bien Hoa military airport and 43 kilometers from Tan Son Nhat.

To ensure the efficiency of the project, the committee’s chairman Nguyen Van Giau urged the parties concerned to make clear why Tan Son Nhat cannot be expanded and the density of air traffic at this biggest international airport in Vietnam, as well as investment cost and capital proportions, and socio-economic impacts of Long Thanh when it is put into use.

Minister Thang told ACV to make clear how Long Thanh would be operated and its impacts on socio-economic development of the project on the country in general and the southern region in particular.

Earlier, Japan airport consultancy company JAC assisted ACV in drawing up the Long Thanh airport project and making comparisons with expansion plans for Tan Son Nhat International Airport and Bien Hoa Airport in Bien Hoa City, Dong Nai Province.

The first phase of Long Thanh airport project is estimated at US$7.8 billion, including US$5.6 billion for First Phase 1A and US$730 million used to compensate for some 1,500 households forced to relocate. It costs an estimated US$9.1 billion to expand Tan Son Nhat airport and an additional US$16.1 billion for site clearance and relocation of 150,000 affected households.

The expansion of Bien Hoa military airport is seen unfeasible as it requires the same amount of investment for construction plus US$4.6 billion for site clearance.

Long Thanh airport was first planned in 2005 with an area of 5,000 hectares. It is designed with a maximum capacity of 100 million passengers and five million tons of cargo per year, and capable of receiving Airbus A380, the world’s current largest jumbo jet, and those of same seating capacity.

The project was previously scheduled for getting off the ground in 2015. Some 24,000 workers would be needed in the construction process.

Steel firms want regulations on steel quality revised

Member enterprises of the Vietnam Steel Association (VSA) have proposed the ministries of industry-trade and science-technology adjust regulations on quality management for imported products to aid local steelmakers.

Vu Van Thanh, deputy general director of Hoa Sen Group, said Circular 44 has worked well as a technical barrier to the import of low-quality steel from China, Vietnam News Agency reports.

But the circular has not produced as many positive results as expected due to unclear requirements which allow exporters and importers to make their deals, thus making it hard for competent agencies to inspect the quality of steel imports, Thanh told a 2014 review conference on the steel industry in Hanoi on Tuesday.

Therefore, VSA wants State agencies to revise regulations in the circular to tighten controls on imported products to protect domestic manufacturers of quality products.

Representatives of other steel firms noted that Circular 44 just protects construction steel only and should do the same for galvanized and color-coated steel sheets because the import of these products is large in volume.

VSA suggested State agencies consider adjusting import tariffs on galvanized and color-coated steel sheets in order to support local steelmakers. Clear requirements should be applied to imported galvanized and color-coated steel sheets to prevent trade fraud and counterfeits.

The association also proposed simplifying inspection procedures to prevent cargo congestion at ports and help importers save time and money.

According to VSA, the local steel sector fared well last year when 13.8 million tons of steel products was consumed, rising 13% compared to the previous year.

However, the association said local steelmakers still faced a host of difficulties.

FDI firms contribute more to export growth

Foreign direct investment (FDI) enterprises have contributed more to the country’s export performance in the past five years, hence economic growth, according to the Foreign Investment Agency.

The latest figures of the Ministry of Planning and Investment showed exports of the FDI sector made up 54.1% of the country’s total in 2010 and the percentage shot up to 56.9% in 2011, 64% in 2012 and 66.9% in 2013.

Last year, this sector posted total export revenue of nearly US$101.6 billion, up 15.2% versus the previous year and accounting for 68% of the nation’s total.

Data from the General Department of Customs indicated FDI firms had shipped mobile phones and phone parts worth US$21.8 billion as of November last year, making up 24.7% of the sector’s total export revenue. Meanwhile, outbound sales of computers and electronics, apparel and footwear reached US$10.2 billion, US$11.26 billion and US$7.1 billion respectively.

The agency said FDI companies still achieved high export revenue growth despite continued economic uncertainties at home and abroad, with good corporate governance, long-term strategies, strong financial resources and stable markets cited as main reasons.

The outstanding export performance of FDI firms has piled pressure on domestic companies and forced them to find ways to improve their competitiveness, according to the agency.

Ministry: Priority for worker housing projects

The Ministry of Construction has identified investments in social housing projects for workers as one of the priorities this year, expressing hope that these projects would help boost disbursements of the VND30-trillion (US$1.4-billion) home loan package.

Minister Trinh Dinh Dung said to enable more people to benefit from the Government’s home loan program, the property market needs more low-cost apartments and that developing more social housing, especially for workers, would help realize this.

The supply of housing for workers at industrial parks (IPs) is still limited, Dung told the Daily when he made a field trip to worker housing projects in Ba Ria-Vung Tau and Dong Nai provinces on Tuesday.

According to the master development plan for IPs in Vietnam, 7.2 million workers will work at these parks by 2020, and 4.2 million of them will have demand to own apartments. But IPs have fulfilled only 20% of the demand, and most workers have to lease apartments for living.

Dung said he is concerned that workers have to live in leased apartments with a small area of only 2-3 square meters for one person and poor hygiene standards. Therefore, it is important to encourage more real estate firms to invest in housing for workers.

The minister suggested local authorities create favorable conditions for property firms to develop those housing projects by preparing land and simplifying procedures.

The ministry will propose the Government issue more supporting policies to encourage the development of worker housing in the coming time.

BR-VT meets 20% of workers’ housing demand

* Tran Ngoc Thoi, vice chairman of Ba Ria-Vung Tau Province, said property companies have built apartments for 6,500 workers, meeting more than 20% of the demand.

Around 30,000 out of 50,000 workers in the province have demand to own apartments.

In the past years, the southern province has approved 24 social housing projects on a total area of 235 hectares, and nine completed projects have provided apartments for 6,500 workers.

Thoi said the province has passed a social housing development scheme for 2009-2015 with an aim to build 5,000 apartments. More than 1,100 apartments of them have been used, and 1,700 more condos are in the offing in Vung Tau and Ba Ria cities.

The provincial government has agreed on transforming two commercial housing projects with more than 1,080 apartments into social housing projects.

Consortium seeks to build wastewater treatment plant

A consortium grouping SFC Vietnam Investment and Environment Development Corp. and Phu Xuan Construction and Trading Co. Ltd. is seeking the HCMC government’s nod to construct a wastewater treatment plant in Thu Duc District.

As proposed by the consortium, the facility with a daily capacity of 65,000 cubic meters will be built at Nhum Stream in the outlying district to process wastewater from Nhum and Cai streams, Xuan Truong and Go Cat drainage systems.

The project will cost an estimated VND523 billion (US$24.6 million) and be executed under the build-transfer (BT) and the build-operate-transfer (BOT) formats.

The consortium plans groundbreaking in June this year and commission the facility in August next year. It suggested the city government pay the treatment fee.

The consortium calculated the operation, maintenance and wastewater treatment costs should be VND3,700 for each cubic meter and the figure will increase 10% after every three years.

According to a representative of the HCMC Steering Center for Flood Control, there are only two wastewater treatment plants able to treat 171,000 cubic meters while there are two million cubic meters of wastewater discharged a day.

Binh Hung Wastewater Treatment Plant can treat 141,000 cubic meters per day in its first stage, while Binh Hung Hoa handles 30,000 cubic meters a day.

The city plans to expand Binh Hung Wastewater Treatment Plant to enable it to treat 469,000 cubic meters a day and invest in Nhieu Loc-Thi Nghe plant with a capacity of 480,000 cubic meters a day.

Currently, the city government is finding investors for 12 more wastewater treatment facilities to process three million cubic meters a day.

Online trading must pay taxes from Jan 20

According to a new circular by the Ministry of Industry and Trade, all electronic commerce websites and social networks with business activities such as opening online stalls to display and introduce goods or services will have to register with the ministry under electronic exchange floor form and pay taxes from January 20.

Online traders must sufficiently supply information about their goods and services and conduct their tax obligations as per the Tax Law. Social network operators are responsible for banning traders, who do not make registration, from posting goods or services information on their websites.

The ministry will receive and handle announcements related to e-sales at website www.online.gov.vn.

The Department of Industry and Trade in HCMC yesterday reported that 48.2 percent of city residents knew how to shop online and the number of online shopping has hit 20.5 percent, double it in 2011. Of these websites account for 86.4 percent and social networks account for 33.7 percent.

A survey by HCMC Statistic Office in the first quarter last year showed that HCMC led the country in e-commerce with over 80,000 websites operating in this field. Fifty percent of them are updated with goods and service information every day.

They occupy one third of the country's online trade value. Cash payment holds 90.5 percent of online transactions in the city. The rate of consumer’s distrust to goods quality sold by online shops has drastically fallen to 17.8 percent from 55 percent in 2011.

The need to strengthen public investment management and settle outstanding debts from the State budget and Government bonds was highlighted in an extensive inspection report published by the Government Inspectorate of Vietnam (GIV).

In the report, the GIV suggested the Government instruct ministries, sectors, and localities review and develop measures to address delayed and extended projects while accelerating the implementation of investment laws.

Other suggestions include drastic settlement of outstanding construction debt in 2015, building a medium-term investment scheme for 2016 - 2020, designing a law on public investment, and strengthening the autonomy and responsibility of localities over their allocated public financial sources.

Ministries, sectors and centrally-run cities were requested to give financial priority to completed, key, and urgent projects and national target programmes on poverty reduction and new-style rural area building, while ensuring capital availability for official development assistance projects on constructing rural road and irrigation systems, and enhancing the education sector.

They were also urged to strengthen the verification and assessment of capital sources during the approval of public investment projects, cancel inefficient projects, and seek alternative resources for effective projects.

According to statistics released by ministries and localities, as many as 740 inspection teams have been set up to examine more than 13,000 projects worth over VND502 trillion (US$23.9 billion) in total.

During the inspections, nearly VND1.25 trillion (US$59.2 million) has been collected and returned to the State budget, with 240 units and nearly 200 individuals reprimanded for poor management.

The European Chamber of Commerce (EuroCham) in Vietnam on January 22 announced the Business Climate Index (BCI) for the fourth quarter of 2014, showing business confidence, prospects and expectations improved significantly.

In the fourth quarter the BCI increased from 74 to 78, and according to Csaba Bundik, Executive Director of the EuroCham, the results of the survey reflect European enterprises’ expectations on the effects of the Free Trade Agreement between the European Union and Vietnam in the future.

The confidence, however, would dramatically shrink if on-going rounds of negotiations could not come to an end within a reasonable amount of time, he said.

The number of respondents that assert their business situation as positive continued to rise, with 52% perceiving the situation as “good”, while 33% reported a “neutral” business situation and around 8-10% reported poor condition.

The greater majority of respondents perceive their business outlook as “positive”, and 62% of the respondents expect “good” business conditions.

The participants expect a rise in the inflation rate over the next six months, from 4.61% in the last survey up to 5.78% in Quarter 4. A rise in the inflation rate is a logical expected outcome for the participants as they believe the overall business situation in Vietnam to improve and thereby a likely acceleration of the economy.

This is also reflected in participants’ expectations on headcount, investment and orders/revenue. For headcount development, 48% of respondents said they are considering increasing slightly the number of employees. Likewise, answering questions in regards to investment plans in the medium term, the largest group at 41% said they consider increasing their investment in Vietnam slightly.

The survey, however, showed a slight rise in concerns overall positive macroeconomic outlook for Vietnam, with 59% of participants assessing the macroeconomic outlook for Vietnam as ‘stabilization and improvement”, a slight drop from last quarter’s 61%. Participants expecting the situation “not to change” also shifted slightly from 24% to 20% and there was a rise in the number of participants that expected “deterioration of the macroeconomic conditions”, from 15% to 21%.

Csaba Bundik said EuroCham will actively coordinate with the Vietnamese Government to address the problems European enterprises have been facing to ensure a better and more transparent business climate as well as help them get ready for investment and business opportunities from the FTA.

Vietnam produce finds surprising growth in foreign markets

Vietnam has removed many technical barriers for its agricultural products to penetrate foreign markets with a focus on the US, Japan, Australia and the Republic of Korea (RoK).

According to the Plant Protection Department (PPD) under the Ministry of Agriculture and Rural Development (MARD), negotiations to deal with technical barriers produced significant positive results in 2014.

A representative of MARD said the talks have now paved the way for litchi to get a toehold in the US, for dragon fruit to find a footpath into the New Zealand market as well as for mangos to find a path into the RoK.

After the US officially allowed the import of Vietnamese fresh longan and litchi, the first batch of fresh longan was shipped to the US market in December 2014. The US has revealed it intends to import Vietnamese mangos and star apples this year.

Meanwhile, Japan has been cooperating with Vietnam to ensure quality mangos for export to the Japanese market. The two countries have also been conducting negotiations to open up the market for Vietnamese red-flesh dragon fruit.

Vietnam has met all conditions for import of mangos into the RoK and the government has been considering granting authorization for the import of Vietnamese star apples.

Taiwanese importers have also expressed an interest on purchasing Vietnamese dragon fruit provided they comply with food hygiene and safety regulations.

The Australian market has set out a number of conditions for Vietnam’s export of fresh litchi. For mango and dragon fruits, MARD has sent all necessary information to the Australian relevant agencies in order for them to complete pest risk analysis (PRA) testing.

The PPD has asked for Australia accelerating PRA for Vietnamese fresh mango and dragon fruit while proposing changes to several regulations imposed on Vietnamese rice to Mexico.

In New Zealand, Vietnamese exporters signed several contract to sell dragon fruit while keeping an eye on shipping rambutan to the promising market.

Moreover, Vietnam has also been dickering to export four kinds of flower to New Zealand, including rose, daisy, carnation and lisianthus.

The PPD said most of Vietnamese agro-products met importers’ requirements on plant quarantine. Last year, 90 letters of notification of violations were issued for Vietnamese partners, a reduction of 20% from 2013.

However, a number of Vietnamese spices have been among those violating phytosanitary regulations. The European Union (EU) informed that five kinds of Vietnamese vegetable were not qualified for sale in the demanding market.

The Department asked local producers and exporters to pay due attention to meeting phytosanitary regulations and other requirements by EU importers.

PPD Director Nguyen Xuan Hong said Vietnam strictly implemented food hygiene and safety regulations in 2014 and prevented the use of harmful chemicals in agricultural production.

The PPD intensified inspections on the trading and the use of pesticides, and all kinds of imported pesticides were carefully examined by the MARD and other functional agencies, he adds.

Talking about the PPD’s tasks in 2015, Hong emphasized the need to popularise the application of the integrated pest management (IPM) – an effective and environmentally sensitive approach to pest management, and advanced technologies in production.

He noted the Department will also intensify inspection and management over pesticides as well as working to ensure safety of vegetables and fruits.

A six-day handicraft exhibition with 400 booths is taking place in the northern province of Ninh Binh.

Vice chairman of the provincial People's Committee Dinh Quoc Tri described the fair as a good opportunity for enterprises and craft villages to advertise their products, share market information and seek new trade partners.

The event will close on Monday.

Central city strives to draw $140 million in IP investment

The central province of Thua Thien Hue aims to attract VND2.5-3 trillion (US$119-$142 million) in investment to its industrial parks (IPs) in 2015, according to the provincial IPs Management Board.

In order to fulfill the target, the board plans to continue reforming investment promotion activities and administrative procedures as well as improving infrastructure in the industrial parks including transport infrastructure, water and power supply and telecommunications.

At the same time, the board will support investors via incentives such as preferential land rent and tax rates as well as assistance in land clearance and human resource training.

The central province is home to six industrial parks, which attracted combined investment capital of VND2.25 trillion ($107 million) last year through 10 new projects and nine existing ones.

All industrial parks in the province have 92 valid projects, including 70 from local investors, with combined capital of more than VND19.58 trillion ($932 million). Capital disbursement has reached over VND7.39 trillion ($352 million) or 38 per cent of total registered capital.

Gradual economic recovery seen

The Vietnamese economy will gradually recover in 2015 with GDP growing at an expected 6.2 per cent, economists told a conference in HCM City yesterday.

"The economy will truly recover, albeit slowly, thanks to good macroeconomic management, stable finance and monetary policies, low inflation, and active restructuring of State-owned enterprises," Dr Tran Du Lich, a member of the National Assembly's Economic Committee, told the Viet Nam Economy Scenario 2015 conference.

To accomplish this, he pointed out that the Government has adopted a consistent macroeconomic policy for the last four years focusing on stabilising the economy rather than growing it at any price.

But he said the recovery is contingent on three important conditions — economic stability, clear and transparent legal system, and a business-friendly administration.

"A stable macro economy would help companies predict the future, while a clear and transparent legal system would help them feel secure about investing and doing business.

And a business-friendly administration would help them improve their efficiency."

He said 2015 would be a year of intensive integration and the "opportunity is promising and challenges are real."

"Viet Nam is tweaking its legal system in line with the ASEAN bloc and this will create favourable conditions for companies to develop and integrate."

By 2015 Viet Nam must complete a zero-tariff list which will include 93 per cent of all goods while the remaining 7 per cent can carry tariffs of up to 5 per cent until 2018.

Eleven laws will be amended and take effect by the middle of the year.

Vo Tri Thanh, deputy director of the Central Institute of Economic Management, agreed with Lich that the economy would recover in 2015.

"Institutional renovation will need more effort but the risk will remain very high."

According to deputy head of the Central Economic Commission, Le Vinh Tan, the economic pitfalls include challenges to sustainability, growth falling short of potential, production inefficiency, high public debts and pressure to repay, high ratio of bank bad debts and their slow resolution, and significant fall in oil prices.

Le Xuan Nghia, member of the National Financial and Monetary Policy Advisory Council, said: "If Viet Nam does not have proper fiscal policies, interest rates will go up. Therefore fiscal policies must dovetail with monetary policies to keep interest rates steady or even bring them down and keep inflation under 5 per cent."

He also mentioned the biggest risk for economic growth in 2015 is process to deal with bad debt.

"The legal system is not robust enough to cope with bad debts because they are governed by 11 different laws.

"The Government should speedily improve the legal system [which] would impact State Owned Enterprises' restructure speed and economic development."

He also listed smuggling and commercial fraud as other risks facing the economy.

"Reform of the legal system is the most important task in ensuring sustainable economic growth in the long term."

Dominic Mellor, the Asian Development Bank's country economist for Viet Nam, warned however that it would not be easy for Viet Nam to integrate into the ASEAN Economic Community.

"Viet Nam faces the challenge of transitioning from central planning toward a more open economic model in which the private sector leads growth and development.

"The legacy of central planning and the continued lack of transparency and consistency in government policy and its implementation still affect entrepreneurs' attitudes toward more open approaches of doing business."

The conference, organised annually by the Viet Nam Economic Times newspaper, this year discussed "Intensive integration, fierce competition".

IFC invests in PAN food unit

The International Finance Corporation (IFC) has invested US$6.5 million in Pan Pacific Corp's (PAN) expansion in the agricultural and food sector, the IFC announced yesterday.

IFC will hold about 5 per cent of Pan Pacific. The financing aims to help the company realise its long-term strategy of acquiring and consolidating more agricultural and food businesses. Pan Pacific plans to adopt good environmental and social practices in these businesses to ensure sustainability.

"Pan Pacific welcomes IFC among our group of extraordinary international and domestic investors," said Michael Rosen, Pan Pacific's CEO, adding that the organisation's support would help his company become a leading regional agriculture and food company. The agricultural sector, including fishery and forestry, is growing fast in Viet Nam and accounts for more than 20 per cent of the country's GDP and 28 per cent of export revenue. In addition to financing, IFC will help Pan Pacific pursue sustainable development by adopting IFC Performance Standards and the World Bank Group Environment, Health and Safety Guidelines. IFC will also help the corporation raise corporate-governance and business-transparency standards.

"Viet Nam has a comparative advantage for primary agricultural production and IFC supports the sustainable development of this sector," said Vipul Prakash, IFC's Director of Client Services for East Asia and the Pacific. "Our financing and advice will help Pan Pacific set benchmarks for responsible production in line with international industry best practices in Viet Nam."

IFC has significantly scaled up its investments in agribusiness over the last few years. In 2014, IFC invested $4 billion across the agribusiness supply chain – from farm to retail – to help boost production, increase liquidity, improve logistics and distribution and expand access to credit for small farmers. At the end of the fiscal year, IFC's overall agribusiness portfolio stood at $6.1 billion.

Pan Pacific was established in 1993 and listed on the HCM Stock Exchange. The company increased its charter capital to more than VND200 billion in 2013 from VND250 million in 1998.

Second-home segment bouncing back

The second-home market is becoming livelier as the property market emerges from a long slump.

Dau Tu newspaper reported that Vinh Thien Duong Company is wrapping up preparations for its US$300 million Alma resort in Cam Ranh, comprising of 200 villas and 400 apartments meant as holiday homes.

Russian firm State Development is building the Cam Ranh Flowers Resort in the same town with villas, bungalows and apartments, and is scheduled to complete it in the first quarter of 2016.

In nearby Nha Trang, Hoan Cau Group, the developer of the $4 billion Diamond Bay City, on Monday unveiled its Diamond Bay Resort II. It is expected to be completed in the fourth quarter with more than 1000 apartments and almost 380 bungalows, all of four-star quality. An 18-hole golf course and a resort are already in operation.

The company's business and marketing director Tran Ngoc Nhat hoped that the first 200 apartments on offer would soon find buyers since Nha Trang is a favourite destination for both Vietnamese and foreign tourists.

Phu Quoc Island is a beehive of activity with developers like BIM Group, Sungroup, Vingroup and CEO Group investing billions of dollars in luxury resorts.

Meanwhile, central provinces like Thanh Hoa and Phu Yen are emerging as new investment destinations.

FLC expects to turn the coastal Thanh Hoa Province into a new destination for second-home buyers with an investment of VND5.5 trillion (US$250 million) in its FLC Samson Golf Links that will have a golf course, convention centre, luxury hotel, villas and townhouses.

Ian Fleming, general director of FLC Samson Golf Links, told Dau Tu newspaper that international coastal golf and resort properties have yet to be developed in the north of Viet Nam, and that was why FLC decided to do the project.

In Phu Yen, the Rose Rock Group, founded by members of the US's wealthy Rockefeller family, has tied up with Vung Ro Petroleum Company for a $2.5 billion project in Vung Ro Bay to tap the advantage of the location.

Matthew Powell, the Hanoi director of real estate services firm Savills Vietnam, said its long coastline, temperate climate and friendly people are among the factors that make Viet Nam promising for the second-home segment.

Other second-home projects are under development not only in popular places like Phan Thiet, Da Nang and Nha Trang but also in Qui Nhon and Lang Co (Hue) in the central region and Ninh Binh and Quang Ninh in the north.

The segment is no longer only for the wealthy. VinaLingving, for instance, recently launched its golf course villas, the latest offering at its 260ha Danang Beach Resort project, at a price of VND5.5 billion for a 250sq.m ($250,000) unit.

The price goes down to VND2.6 billion for a commercial front-street house in the Little Vietnam project in Quang Ninh Province.

Powell said his company has received positive feedback from buyers.

CPI down on falling fuel prices

In January consumer prices in HCM City fell by 0.48 per cent month-on-month, the sharpest decline in January in several years as the slump in petrol, kerosene, and cooking gas prices had an impact on prices.

But the January consumer price index (CPI) rose by 0.76 per cent from a year earlier, according to the HCM City Statistics Bureau.

Since early 2014, fuel prices have fallen on 15 occasions. In January they fell by a further 1.5 per cent as prices of transportation services also dropped by 4.8 per cent.

Housing, electricity, water, and construction materials prices declined by 1.5 per cent, post and telecom services saw a 0.16 per cent decrease, and household utensils became 0.03 per cent cheaper.

Prices of drugs, education and health services remained unchanged. Some prices rose. Food prices went up by 0.34 per cent, beverages and tobacco by 0.22 per cent, hospitality services by 0.2 per cent, garments, footwear and hats by 0.19 per cent, and cultural and entertainment services by 0.1 per cent. The gold price index was down by 0.02 per cent while US dollar gained 0.58 per cent.

Bank credit swells in two largest cities

Growing demand is expected to significantly boost commercial banks' credit for January, based on information from banks in the country's two largest cities Ha Noi and HCM City.

The HCM City Statistics Office reported that the city's lending in January has risen by 11 per cent, against the same period last year, and is up 1.9 per cent from last month to VND1,057 trillion (US$49.39 billion).

During this month, lending for the Vietnamese dong contributed to a growth of 9.9 per cent against the same period last year, while lending in US dollars increased by 16.9 per cent.

Medium and long-term outstanding loans accounted for more than a half of the city's total loans, up 2.3 per cent from the same period last year.

Deposits at commercial banks in HCM City in January also grew by 10.5 per cent against the same period last year and are up 0.3 per cent month-on-month to VND1,293.7 trillion ($60.45 billion).

Deposits in US dollars accounted for 15.6 per cent of the city's total deposits, up 7.6 per cent against the same period last year, while deposits for dong jumped 11 per cent.

The Ha Noi Statistics Office also reported that the city's deposits in January grew by 1.1 per cent month-on-month to VND1,204 trillion ($56.26 billion), while the city's lending rose by 0.7 per cent to VND1,017 trillion ($47.52 billion).

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