Vietnam tries to fully tap the Eurasia Economic Union

Over the past two years, and especially in the first half of this year, Vietnam and Russia have seen rapid growth in bilateral trade. Vietnam ranks second among ASEAN countries in trade with Russia.

The Vietnam-Eurasia Economic Union free trade agreement, which took effect last October, will cut 90% of tariffs and improve competitiveness for the goods of both sides. 

Last year two-way trade turnover between Vietnam and Russia reached US$2.7 billion, of which Vietnam earned US$1.7 billion from exports to Russia, up 12%.

In the first half of this year, the bilateral export turnover continued to grow, fetching nearly US$1.7 billion, up 26.5%. Vietnam’s exports to Russia were valued at US$1.2 billion, up 34%. Aquatic products, vegetables, coffee, cell phones, and accessories were among hard currency earners.

Duong Hoang Minh, Vietnamese Trade Councilor in Russia, says that in addition to the advantage of tax reductions, another factor is giving Vietnamese exports to Russia a boost.

He noted that “Both sides have exchanged many high-ranking delegations, most recently the delegation led by the Vietnamese State President to Russia at the end of June and early July. During these visits, many economic agreements and contracts have been signed, laying a foundation for future economic cooperation between Vietnam and Russia. In addition, trade promotion activities and trade fairs have been held at Hanoi Trade Center in Moscow.”

Since the beginning of this year, the Vietnamese Embassy in Russia has organized programs to link localities of Vietnam and Russia so their business communities can better understand each other’s market and increase cooperation.

Garment No 10 Corporation is one Vietnamese company that has established business relations in the Russian market.

Than Duc Viet, the company’s Deputy Director General said “We entered the Russian market via Henderson, a Russian fashion and apparel retailer who orders 100,000 T-shirts a year. That number is small compared to orders from the US and Europe. We cooperate not only with Russian enterprises, but also with Vietnamese companies in Russia through trade counselors or overseas Vietnamese who understand Russian tastes well enough to approach this market.”

Economic and trade relations between Vietnam and Russia and between Vietnam and members of the Eurasia Economic Union have improved, but the outcomes remain modest compared to the potential.

Dang Hoang Hai, Director of the Department for the European Market of the Ministry of Industry and Trade, says one of the biggest hurdles is quarantine and verification of product quality, particularly for agro-forestry-fishery items.

“Only 25 fishery exporters out of 200 have registered to export to Russia. That figure is very small compared to 500 who export to the EU. The small figure is an obstacle in sustainable exports to Russia. Quality Assurance Agencies of the two countries have not agreed on a working mechanism, but hope in the future we will sign an inter-governmental agreement with Russia on cooperation amongst quarantine and quality control agencies. If the technical barrier is removed, exports and imports will grow more rapidly,” said Hai.

In June and July, Vietnam and members of the Eurasia Economic Union met to review every aspect and address each difficulty.

The Eurasia Economic Union is a market with 183 million people and a yearly GDP of  US$2 trillion, promising many opportunities for Vietnamese businesses.

Capital for high-tech agriculture

High-tech agriculture is a key direction for economic development. A credit package of US$4.4 million for high-tech and clean agriculture is considered a nudge for agricultural enterprises to expand production. But there remain obstacles to accessing the credit package.

Vietnam has 3 high-tech agricultural zones in Hau Giang, Phu Yen, and Bac Lieu. The Ministry of Agriculture and Rural Development has licensed 26 high-tech agricultural enterprises. 

The government issued Decree 30 in March to allocate a credit package of US$4.4 million to loan high-tech enterprises. The State Bank of Vietnam launched a loan program for high-tech enterprises with interest rates of 0.5% to 1.5%.

Nguyen Thi Hong, Vice Governor of the State Bank, said the number of high-tech enterprises is small and the incentive loan program has not been widely implemented. 

“Enterprises are still studying the program and have not yet submitted loan applications. They need to study the criteria of high-tech and clean agriculture according to the government decree. Commercial banks say they are preparing documents to instruct local branches to launch the program.”, noted Ms Hong. 

Enterprises say one problem is that their property and assets are not acceptable collateral for bank loans. Minister of Natural Resources and the Environment Tran Hong Ha said “High-tech enterprises have to invest large sums in their facilities. The Ministry has drafted a circular to acknowledge their asset values and will consult other ministries to finalize it.”

Minister and Head of the Government Office Mai Tien Dung said some localities have proposed incentives for local businesses. 

“The government has received proposals from the provincial Party Committees of Ha Nam and Thai Binh to allow them to rent land from farmers and lend it to enterprises. It will be a key policy to help high-tech agricultural enterprises”, Mr Dung noted. 

Mekong Capital plans to divest from Traphaco

It is only a matter of time until Mekong Capital divests its capital in Traphaco JSC (HOSE: TRA), however, the details of its divestment plan remain unclear.

Vietnam Azalea Fund (VAF), managed by Mekong Capital Ltd., invested in Traphaco in 2007 and has continued to increase its ownership ratio ever since. 

At the moment, VAF is holding 25% of the shares at Traphaco, second only to State Capital Investment Corporation (SCIC).

In 2008, Traphaco was listed on the Ho Chi Minh City Stock Exchange (HOSE) and soon became one of the blue-chips on the market. 

While TRA shares were sometimes sold below par value in its early days in 2008, it is currently one of the highest-priced shares on the exchange, with the average price in mid-August 2017 being VND120,000 (US$5.3) per share.

Currently, Traphaco is one of only two companies with investment from VAF, with the other company being Loc Troi Group JSC.

However, Mekong Capital has signed agreements to transfer all shares in Loc Troi, essentially completing this investment cycle. 

Specifically, on July 26, VAF sold 75% of the shares in Loc Troi at VND68,000 (US$3) per share to earn a total of US$9.2 million. 

The fund also signed a deal to sell the remaining 25% of the shares at the same price, which is expected to be finalised before the end of September.

Chris Freund, partner at Mekong Capital, said that the investment fund highly appreciates Loc Troi’s cooperation in the listing and divestment process.

After VAF finishes its divestment from Loc Troi this September, Traphaco will be the only company holding VAF investment and the fund is eager to complete its divestment.

According to Vu Thi Thuan, chairman of the managing board of Traphaco, two foreign investors have recently approached Mekong Capital to discuss a share transfer, and it is likely that these investors will acquire VAF’s TRA shares. 

One of the investors was an Asian pharmaceutical company, while the other was a European financial investor.

Details of the divestment process have not been announced, however, a divestment through share transfer will not have much impact on the price of TRA shares. 

Furthermore, a foreign pharmaceutical company becoming a shareholder will be of great interest for Traphaco, as the Vietnamese pharmaceutical company still wants to develop further both its professional capacity and market size, with the potential of expanding to foreign markets.

Now seems to be an opportune moment for VAF to divest since Traphaco’s business is heading in a positive direction. 

In the second quarter of 2017, Traphaco reported an after-tax profit of VND67 billion (US$2.95 million), increasing 10% compared to the same period last year, and an accumulated profit of VND117.4 billion (US$5.2 million) in the first six months of 2017, increasing 4.6%.

Also, Traphaco has relatively low debts, with total liabilities at VND302 billion (US$13.3 million) as of June 30, 2017, less than a third of stockholders’ equity (VND1.07 trillion - US$47.1 million).

The majority of Traphaco’s liabilities are accounts payables to suppliers, valuing at VND139 billion (US$6.12 million) in total. The rest consists of other payables to workers, the national budget, as well as various short-term costs. 

The company’s bank loans only account for a small portion of total liabilities, with a short-term balance of VND64.6 billion (US$2.84 million) and long-term balance of VND8.65 billion (US$380,600).

The low dependency on loans showed that Traphaco possesses a high level of financial autonomy and almost no payment risks. However, some financial experts have argued that this also means the company has not been able to fully utilise financial leverage to increase business performance.

Local companies seek supply chain participation in Thailand

More than 40 Vietnamese companies attended an exchange with the Thai Group and other prominent retailers in Bangkok today (August 18) with the objective of securing supply chain participation, reported the Vietnam Investment Review.

The contingent included popular brand names like Dien Quang, Minh Long 1, Rang Dong, Nuti Food, Bita’s, Vinamit, and Highland Coffee that operate in the food, beverage, household utensils, fashion and souvenir industries, among others.

Dang Hoang Hai from the Ministry of Industry and Trade said the exchange resulted in many promising prospects and helped develop a sense of confidence and trust among the participants.

Pascal Billaud from Central Food Retail Group said he whole heartedly supported joining forces with Vietnamese companies and adding them to his companies supply chain in Thailand.

Vietnam – biggest supplier of pepper to Pakistan

Vietnam exported 8,800 tons of pepper to Pakistan to earn more than US$36 million last year, according to Vietnam Trade Office in Pakistan.

Pakistan is in high and stable demand for pepper and totally depends on imports as pepper cannot be grown in that land. Last year Pakistan imported 11,000 tons of pepper worth nearly US$44 million and 80% of the imported volume came from Vietnam.

Pakistan is the seventh biggest importer of Vietnam pepper and accounted for 6% of the country’s pepper exports. Rivals of Vietnam pepper on the market are Brazil with 5% of market shares and Indonesia (2.7%).

US$4-billion South Hoi An casino officially starts construction

Contractor Coteccons on August 17 began the construction of the first phase of the US$4-billion South Hoi An integrated casino resort, now named Hoiana, located in the central province of Quang Nam.

The project is invested by a joint venture of Vietnam-focused asset management firm VinaCapital, Macau-based SunCity Group, and Hong Kong-based Chow Tai Fook Enterprises Ltd.

According to the newest plan, the first phase, which covers an area of 163 hectares with a total investment capital sum of US$500 million, will include an 18-hole golf course meeting international standard, resorts, a shopping centre, and other infrastructure facilities. The construction is expected to be completed within 19 months.

Previously, in late April 2016, the investor held the ground-breaking ceremony. The plan for the first phase was to start operations in early 2019 and for the whole complex to be completed in 2035. 

Once the resort comes into operation, it will be the second largest casino in Vietnam, after The Grand Ho Tram Strip resort and casino complex located in the southern province of Ba Ria-Vung Tau.

In December 2016, VinaCapital announced that the property would be called Hoiana. 

Licensed in 2010, the project was initially developed by VinaCapital and Genting Malaysia Berhad, and comprised of five-star hotels, villas, and a casino targeting foreign tourists.

However, in September 2012, Genting suddenly announced its withdrawal in the midst of site clearance, forcing VinaCapital to find other partners to jointly develop the project.

After over two years of searching, VinaCapital has finally found prestigious partners in SunCity Group and Chow Tai Fook Enterprises Ltd. to replace Genting Group for their proposed US$4-billion integrated casino resort.

On March 23, 2015, the Quang Nam People’s Committee officially granted an amended investment certificate for the project, officially recognising SunCity Group and Chow Tai Fook Enterprises as stakeholders working in conjunction with VinaCapital.

Accordingly, Chow Tai Fook and VinaCapital are strategic investors and SunCity, which is 70% owned by Chow Tai Fook, will cooperate with its mother company to manage and run the resort.

Chow Tai Fook is engaged in property development, hotels, casinos, transportation, and jewellery. Meanwhile, SunCity is a casino operator at the world’s largest casino hub, Macau.

Regarding Coteccons, the company was the contractor of numerous large-scale projects, including Masteri Thao Dien, Vinhomes Thang Long, Vinhomes Metropolis, Vinhomes Golden River, Landmark 81, and The Grand Ho Tram Strip resort and casino complex, among others.

Asanzo Vietnam markets smartphones

Asanzo Vietnam JSC on August 15 launched its first smartphones onto the market, introducing two models Asanzo Z5 and Asanzo S5.

With retail prices of VND4.99 million (US$220) for Asanzo Z5 and VND2.99 million (US$132) for Asanzo S5, the company targets middle-income customers.

Pham Van Tam, CEO of Asanzo Vietnam, said Asanzo Z5 and Asanzo S5 are assembled at the company’s factory in HCMC and will be available on the shelves of Asanzo’s 6,000 stores and vendors nationwide from September 1.

With this debut, Asanzo has become one of three Vietnamese smartphone brands on the local market, along with Mobiistar and Bkav. 

Other domestic brands, including Q-Mobile and HKPhone, have withdrawn due to harsh competition with numerous foreign smartphone producers such as Apple, Samsung, Sony and Oppo.

Although Asanzo is a new face in the smartphone market, the brand has been known for cheap TVs and household appliances. In 2016, the company sold over 500,000 TVs, holding a market share of 15%.

Founded in 2013, Asanzo Vietnam reported revenue of VND1.2 trillion (US$52.8 million) in 2015 and VND2.5 trillion in 2016. The company expects VND4 trillion in revenue this year.

In addition to the existing US$20-million factory, Asanzo is constructing a new factory on 17,000 square meters in Cu Chi District.

Coal exports to Laos see sharp increase

In the first seven months of this year, coal exports to Laos skyrocketed 16-fold in volume to 50,400 tons and 15-fold in value to US$4.3 million against the same period last year, according to the General Department of Vietnam Customs.

Vietnam shipped 140,100 tons of coal in July to get US$17.7 million, down 16.2% in volume and 12.1% in value compared to June. This is the second month coal exports suffered a decline since early this year. However, exports in seven months still enjoyed a growth of 148% in volume to 1.1 million tons and 245.4% in value to US$165.9 million.

Asian countries are key importers of Vietnam coal. Japan makes up 48.2% of Vietnam’s total export value with 568,800 tons valued at US$71 million, trailed by Malaysia with US$151,200 tons worth US$36.2 million.

TATA builds instant coffee plant in Vietnam

TATA Coffee Ltd, a subsidiary company of Indian TATA Group, has become the first Indian business to build an instant coffee plant in Vietnam.

The ground-breaking ceremony marks the start of a TATA Coffee plant which will produce 5,000 tons of instant coffee annually at Vietnam-Singapore Industrial Park II in southern Binh Duong province.

The plant is expected to be operational in 2019 to provide new instant coffee for global customers.

 tata builds instant coffee plant in vietnam hinh 1 Sanjiv Sarin, managing director of TATA Coffee Ltd., said TATA Group has invested in Vietnam’s automobiles, steel, commerce, energy and watch industries. The beverage industry will also become a key area of TATA investment in Vietnam.

TATA products are exported to more than 40 countries in the world, however, instant coffee has, so far, been produced in India only, said Sarin.

TATA will do its utmost in the coffee production process and pay special attention to work safety. The plant will create more jobs for local people, said Sarin.

Vietnam is the world biggest Robusta coffee producer, which is a good source of raw material supply for the plant, Sarin added.

HSBC: Vietnam may miss 3.5% fiscal deficit for 2017

While a renewed focus on equitizing State-owned enterprises (SOEs) has been exhibited following the leadership transition in April last year, equitization alone is not a short-term solution to reducing the government’s fiscal deficit.

Rather, meeting the government’s 3.5% deficit target for 2017 would have to come on the back of reduced government expenditure, which HSBC in its latest report believes is unlikely, given the government’s growth targets.

It has been consistently framed in recent statements by policy makers that the sale of SOEs is viewed as a means to both increase fiscal revenues and reduce government expenditures. 

One of the highlights, Decision No.58, signed by Prime Minister Nguyen Xuan Phuc on December 28, 2016, pushed for further divestment of State capital in existing SOEs by eliminating or reducing the minimum level of ownership that the government holds in certain industries.

What makes Decision 58 a positive move and deserving of full recognition is the fact that it provides a clearer roadmap for equitization by announcing a total rate of State ownership in specific companies (not just broadly by sectors) that are set to be equitized.

As the new sense of urgency in SOE equitization is mainly driven by rising public debt, increased equitization leading to greater revenues and alleviating the government’s fiscal burden is no easy task given the remaining challenges in SOE reform and the recent trends in government expenditure.

SOE reform has primarily focused on targeting the sale of minority stakes, while the government retains majority control. 

This has left strategic investors with limited ability to reshape Vietnamese companies, improve corporate governance, and make the companies globally competitive, deterring private investors from fully participating in the process. 

HSBC believes additional reform measures remain crucial to fully realizing the government’s equitization agenda.

SOEs and localities themselves have been slow to participate in the equitization process, with Deputy Prime Minister Vuong Dinh Hue telling a government meeting last month that the lack of effort was due to fears that violations may be exposed. 

As a result, only six out of the 45 SOEs slated to be equitized this year are ready to complete the task, bringing down the number of SOEs expected to complete equitization this year to 40.

Slow equitization has also meant that Vietnam’s earnings from SOE divestments have been lower than expected, with equitization and divestments netting nearly US$3.4 billion for the State budget from 2011-2015; quite low for a five-year period. 

Things seem to be turning around slightly, however. By the end of the second quarter, Vietnam earned VND11.6 trillion (US$504 million) from divestments, an increase of 314% year-on-year.

Meeting the 3.5% fiscal deficit target will rely on drastically reducing government expenditure. The budget deficit has grown consistently over recent years, and, under HSBC’s estimates, would have to decline to around VND168 trillion (US$7 billion) to meet the target. 

This figure is even lower than the deficit in 2012 in nominal terms, and also relies on the assumption that the country meets its growth target of 6.7% for 2017, which HSBC believes will come in at just 6%.

In a positive sign, the government continues to gain momentum in other reforms, such as encouraging the private sector to play a greater role in the economy. 

For example, non-State investments over the past few years have caught up to State investments in terms of the percentage of total investment in the country. 

Moreover, the public sector has been particularly active at investing in key infrastructure around the country, which should lay the groundwork for even greater private investments in the future.

“For now, it may be too early to expect SOE divestments to provide the government with a significant boost to revenues, but continued reforms could provide it with the gains it seeks over the medium term,” HSBC’s economist Mr. Noelan Arbis noted.

Emirates offers special autumn promotion tickets

Emirates announced the launch of its promotional fares across its network of destinations around the world to encourage passengers to experience the beauty of autumn and the festive season on Tuesday.

These special fares are available for booking from August 15 to September 5, 2017 and are valid for travel until March 31, 2018. 

From HCM City, economy fares start from VNĐ12,610,000 (US$548)  to Dubai, VNĐ17,777,000 ($773) to Paris, VNĐ21,395,000 ($930) to New York or 24,080,000VNĐ ($1,046) to Washington.

From Hà Nội, economy fares start from VNĐ12,290,000 ($534) to Dubai, VNĐ17 million ($738) to Amsterdam, VNĐ20,940,000 ($910) to London, VNĐ21,510,000 ($935) to New York or VNĐ22,945,000 ($998) to Boston.

In Việt Nam, Emirates operates daily passenger services from both Hà Nội and HCM City. From HCM City, the airline has served daily direct flights to Dubai since 2012 while the Hà Nội-Dubai route has been a non-stop one from July 2 this year. Both of these services are operated with a two-class Boeing 777-300ER aircraft.

Steel consumption witnesses increase

Domestic steel consumption in the first seven months of 2017 rose 14.5 per cent from the same period last year to 5.14 million tonnes, the Việt Nam Steel Association (VSA) said.

VSA said that by the end of July, steel inventory was 530,306 tonnes, reducing 19 per cent from the previous month.

Construction steel output last month was 780,000 tonnes, increasing 24 per cent from the corresponding period last year and 7 per cent higher than the previous month.

Export of construction steel reached 541,377 tonnes, posting a year-on-year increase of 75 per cent.

According to the association, in recent years, many local steel producers have yielded high revenue and profit, although steel consumption has witnessed difficulties.

Việt Nam is considered one of the largest steel producers in ASEAN since 2015. Hưng Nghiệp Formosa Hà Tĩnh Steel Corporation has been able to produce hot rolled steel, reducing the annual import of steel from June 2017.

VSA also said Vietnamese steel producers had had to adjust prices due to the surge of steel billet. In particular, steel plants in the north increased their selling price by four times while those in the south increased it by three-four times.

In addition, the increase in demand and subsequent shortage of coal for steel production has contributed to the price rise.

It is expected that the steel billet prices will remain high at VNĐ10,500-10,700 per kilo in the future, resulting in higher steel prices this month.

In the January-July period, construction steel production reached 5.2 million tonnes, posting a year-on-year rise of 13.5 per cent.

Vietnam applies OECD standard to abolish sub-license

The Vietnamese government has asked the Ministry of Planning and Investment to review business conditions based on the market principles of the Organization for Economic Cooperation and Development (OECD) in order to abolish competitive restrictions by December.

The Vietnam Chamber of Commerce and Industry (VCCI) reported that there are more than 5,700 sub-licenses out of 243 conditional business lines. The Ministry of Industry and Trade has the largest number of sectors with 27 requiring 1,220 sub-licenses, and the Ministry of Construction has the smallest number with 17 requiring 106 sub-licenses. 

The Prime Minister has asked ministries to review and report before August 25, and called for detailed measures to support businesses.  

US heifer sales to Vietnam signal dairy rebuild underway

Exports of dairy replacement heifers to Vietnam led the rebound in the US market for the month of June, according to a monthly market analysis released the US Dairy Export Council.

In the report, Alan Levitt, vice president of communications and market analysis, said the US Department of Agriculture estimated 3,479 heifers were exported during the month, the second-highest monthly total for the year.

Vietnam was the leading market for the month of June, taking 1,634 head, having imported a total of 5,040 female dairy replacements year-to-date in 2017, a strong signal that dairy rebuilding is underway.

Mexico was the second highest destination for the month, taking another 1,488 head in June, bringing the total number received since the beginning of the year to 4,577 head of heifers.

Year-to-date 2017 US dairy replacement heifer exports stand at 16,457 head, surpassing the total of 12,216 for all of 2016 and 16,171 for all of 2015.

Red Wok launches beef hotpot chain in HCMC

Red Wok has officially launched its Lau Bo Sai Gon Vivu chain, with a first outlet at Vincom in Ho Chi Minh City’s District 9. It also opened its first Wrap & Roll restaurant in Shanghai on July 12.

The specialty at Lau Bo Sai Gon Vivu is beef hotpot, which has been popular in Ho Chi Minh City since the 1990s. Red Wok targets expanding the chain to cities and provinces around Vietnam.

It will also open two new Cuon Viet Sense restaurants on August 23 and September 1.

Red Wok now has 15 Wrap & Roll restaurants, two Cuon Viet Sense restaurants, one Lau Bo Sai Gon Vivu restaurant, and five franchises in Singapore and Shanghai.

It plans to open more restaurants in Vietnam and overseas, and may introduce new brands to serve different customer segments.

Having received investment of $6.9 million from Mekong Capital’s Mekong Enterprise Fund III, Red Wok has tried to build a manufacturing process as well as professional staff. It also focuses on marketing strategies to attract customers.

Revenue at most of its restaurants increases 20 per cent each year. Red Wok has also built a good managerial team to oversee the activities of its restaurants in Vietnam and overseas.

It has had a central kitchen since late 2016 in Thu Duc district, on an area of 3,500 sq m, which can cater to 100 restaurants. The company has set a target of increasing its number of restaurants by 15 or 20 each year.

Ms. Tran Thi Lan Anh, CEO of Red Wok, said that success has come from human factors, with a focus on service and brands.

It also expands by launching new brands for young customers.

Vietnam’s food and beverage sector is expected to continue to grow strongly over the next five years, as the country’s middle class is increasing by an average of 10 per cent each year and will reach about 33 million people in 2020.

Agricultural cooperatives in HCMC face difficulties

Only 41 out of 68 cooperatives registered in agricultural field have been operating in HCMC as of August 14, including 24 well performing ones accounting for 58.5 percent, reported the city Department of Agriculture and Rural Development yesterday.

At a meeting with the Economics-Budget Committee of the HCMC People’s Council, the department said that of the 41 cooperatives, 15 have not operated efficiently and two have been under performance.

Seven out of 41 cooperatives have attended safe food supply chains. The Government and HCMC have implemented many assistance policies for agricultural cooperatives to develop such as human resources development, trade promotion, market expansion, science and technology application and credit assistances.

However, agricultural cooperatives have still faced difficulties in material infrastructures, capital, human resource, consumption, land and credit access.

Deputy director of the department Tran Ngoc Ho said that production reorganization through cooperatives help farmers to stand firm in the market economy. However the ratio of farmers attending cooperatives is very low.

HCMC should review, adjust and supplement policies especially capital polices to for cooperatives to develop.

Head of the Economics-Budget Committee Nguyen Van Dung proposed agencies to completely solve proposals and problems for cooperatives, adding that suitable policy system is the motive power for cooperatives to develop but the most importance is their self-reliance.

Steel consumption, export highly hike

Vietnam Steel Association (VSA) reported that structural steel export in the first seven months this year reached 541,377 tons, increasing 75 percent compared to the same period last year.

In July, steel consumption output raised 39 percent over the same period last year. Steel inventory was 530,306 tons on July 31, down 19 percent compared to the end of June.

According to VSA, domestic steel consumption has been difficult in recent years. Besides loss making businesses, there have been well performing ones.

Vietnam has been estimated to be the largest steel manufacturer in ASEAN since 2015, when the country nearly did not produce hot rolled steel.

Since June 2017, Hung Nghiep Formosa Ha Tinh Company has produced hot rolled steel product and helped reduce the import volume of hot rolled steel coils annually.

Steel billet and scrap prices have increased continuously and strongly. So manufacturers have raised steel product prices to make up cost price. Of these, northern and southern plants have lifted the price up by three to four times.

Steel billet price is forecast to maintain high in the upcoming time, from VND10,500-10,700 a kilogram. So steel product prices will continue surging in August.

Bac Giang invests 1.5 trillion VND in hi-tech agriculture

The northern province of Bac Giang plans to invest 1.5 trillion VND (66 million USD) to develop high-technology agriculture areas to promote the locality’s strong products such as vegetables, flower, mushroom, tea, lychee, citrus, chicken and pigs.

Twenty percent of the investment will be sourced from the State budget, the rest will be mobilised from banks as well as enterprises, organisations and individuals.

As many as 35 hi-tech farms will be formed, aiming to raise hi-tech agricultural product value to 30-32 percent of total value of the agriculture sector by 2030.

The province also targets up to three enterprises to be recognised as high-tech agricultural firms.

Specifically, the province will establish 17 regions for vegetable farming with a total area of 1,710 hectares in Lang Giang, Luc Nam, Hiep Hoa, Yen Dung and Tan Yen districts, two regions for flower cultivation with 100 hectares in Bac Giang city and Hiep Hoa, and one tea production area covering 300 hectares in Yen The district.

Alongside, three lychee regions will be formed with 1,300 hectares in Luc Ngan, Tan Yen and Luc Nam districts, along with two regions for citrus, three for mushroom, two for pig breeding and five for chicken growing.

A 100-hectare area will also be developed for the research and application of new agriculture technology, with close relations with agricultural production facilities and businesses.

In order to implement the plan, Bac Giang will strengthen communications on high technology, effectiveness of the technology and models of high-tech application, while introducing high-tech farm produces at markets and retail systems.

At the same time, the province will strengthen inspection of farm produces’ quality, while creating a favourable legal framework for the development of high-tech agricultural region and supporting the promotion of the products.

Bac Giang will also organise training courses on high-tech applications for agriculture, while associating high-tech farms with eco-tourism and calling for the engagement of investors in the field.

In the first half of 2017, Bac Giang formed 22 hi-tech agricultural models with a total area of 62,000 square metres.

The Anam Lauded As One Of The World’s Most Outstanding Hotel Debuts

The Anam, a new 117-villa and 96-room resort overlooking Vietnam’s pristine Long Beach, has won a coveted spot in Condé Nast Traveller India’s Hot List 2017.

The Indian version of the prestigious magazine brand has announced its annual compendium of the world’s best new hotels in its August-September edition, singling out the 13-hectare Anam for its “300m beachfront, three swimming pools, 3D movie theatre and range of dining options”.

Outside of India, only 12 hotels from across Asia made the cut. Twelve hotels in India, 13 in Europe, six in the Americas and Caribbean, five in Africa, three in the Middle East, and one in Australia and New Zealand each were selected, bringing the total number of properties included in the Hot List to 53 worldwide.

Conde Nast Traveller India said its editors and reporters scoured the world to determine the list.

About The Anam, Condé Nast Traveller India notes: “This beach resort near Nha Trang, an hour’s flight from Ho Chi Minh City is designed for a peaceful, stress-free vacation. Between the 300m beachfront, three swimming pools, 3D movie theatre and range of dining options, there’s enough to keep you entertained. But chances are you may choose never to leave your ocean-facing villa.”

They also add: “The hotel’s scale and multiple event venues makes it a great spot for saying ‘I do’ – think a poolside pre-wedding party, a sangeet in the ballroom and a wedding by the beach.”

Owner Pham Van Hien said he and The Anam’s team were thrilled to have been recognised by such a prestigious publication.

“There isn’t a more desirable place to be on the water in Vietnam and when I first discovered the land five years ago, I was struck by its breathtaking beauty and serenity, beginning an ambitious dream that has come to fruition in The Anam,” said Hien. “To receive such recognition so soon after our grand opening in April is incredible.”

Will an additional 700tr dong be poured to the economy in 5 remaining months?

At the meeting between the government’s standing committee members and a number of ministries, sectors and corporations on Saturday morning to review the 2017 plan and set measures to achieve the set targets, focusing on GDP growth target.

The leader of the government said to complete the whole year growth plan of 6.7 percent, the target for the last six months must be 7.42 percent. This is a high growth rate, requiring great political determination, effort and resolute involvement of ministries, sectors, localities, corporations and the people. The prime minister clarified that this is an important political task of all levels and branches.

Particularly, for the monetary, credit, financial investment and trade sectors, the prime minister requested the Governor of the State Bank to work out plans and roadmaps to ensure the entire year credit growth of 21-22 percent.

Earlier this year, the banking sector planned to achieve the whole year credit growth rate of about 18 percent. But, at the regular government meeting in July, the prime minister asked the State Bank to raise credit growth rate equal to or above 20 percent. Thus, the requirements set for the banking sector in the last months of the year is heavier when the credit growth at the end of the first six months was just 9.06 percent, compared to 9.3 percent as of the end of July as per the data of the National Financial Supervisory Commission (NFSC).

With the suggestion of the government, 2017 can be the year marking the return of credit growth at high levels as in the 2009-2010 period.

And if the target of 22 percent is reached, the amount of money injected into the economy will be quite enormous in the remaining months because regarding the scale of total outstanding loans to the economy at around 5,500 trillion dong at the end of 2016, a 22 percent growth would generate an additional 1,210 trillion dong this year.

Excluding the 9.3 percent growth achieved in the first seven months of the year at nearly 700 trillion dong, in the five remaining months of this year, there may have an additional 700 trillion dong poured to the economy. Following the initial growth rate set by the State Bank, the capital source is expected to increase by about 220 trillion dong.

As per some bank executives, the 22 percent growth rate of the entire economy for the whole year will be unfavourable because as of the end of June, as per the public financial statements, the credit of 19 large banks only increased by more than nine percent. Although in the first half of the year, some banks have indirectly asked for additional credit room because of having used up 16 percent of the room allocated by SBV at the beginning of the year, many other banks have not achieved half of the plan.

LienVietPostBank ‘locks’ foreign room to 5pct

The Board of directors of Lien Viet Post Joint Stock Commercial Bank (LienVietPostBank) have decided to limit the maximum share ownership rate of foreign investors at five percent of the chartered capital.

The limitation of foreign ownership rate will be asked for shareholders’ opinions. The list of shareholders will be fixed on August 22, 2017.

Earlier, on July 17, LienVietPostBank closed the list of shareholders that deposited and is expected to list on Upcom in Q3/2017.

In mid-July 2017, LienVietPostBank was approved by the State Bank to raise capital to 7.5 trillion dong through the share issuance to pay dividend to shareholders from the undistributed after-tax profit in 2016 and issue shares following optional programme under the charter capital increase method approved at the annual shareholder meeting in the resolution dated March 25, 2017 and amended, supplemented at the Resolution of the Board of directors No. 403/2017/NQ-HDQT dated June 8, 2017.

Recently, VSD also issued LPB stock code to this bank. However, currently, there has not had information about the bank’s filing for registration transactions on HNX. Notably, at present, the bank still has not announced financial statement for Q2/2017 as regulated.

Walking zones send land prices skyrocketing in Saigon, Hanoi

Areas around these zones are now some of the most expensive in the country’s two biggest cities.

Plans to pedestrianise backpacker streets and nearby areas in Saigon and Hanoi have sent land prices through the roof to around $22,000 per square metre, on average.

For a month now, Saigon has banned vehicles from Bui Vien Street in its backpacker precinct in District 1 on weekend nights, and is finishing work to turn Bui Vien into an official pedestrian street.

And landlords are not missing out on the chance to cash in on the plan.

Compared to seven months ago, the cost of land on streets around Bui Vien has increased 34.7 percent on average, and up to 130 percent in some areas, according to the latest report by HCM City-based real estate evaluation firm Gachvang.

On De Tham Street, the price per square metre has jumped from VND194.8 million ($8,500) in January to VND450.5 million this month. Vietnam’s average annual income was around $2,200 last year.

The cost is now VND518.5 million on Cong Quynh Street, up 62 percent;VND508.65 million on Bui Vien Street, up 59 percent; and VND472.5 million on Pham Ngu Lao Street, up 48 percent.

It is just as high on streets crossing Bui Vien, running around or leading to the walking street, standing at VND600 million per square metre on Le Lai Street and VND440 million on Nguyen Thai Hoc Street.

Gachvang predicts that land prices in the area will continue to rise in the coming months when work on Bui Vien has been completed.

The backpacker precinct pulls in around 2,000 tourists on its best days and earns more than VND37 billion ($1.63 million) a year.

New granite paving, stages for music performances, surveillance cameras, security guards, free wifi and public toilets are being installed at an estimated cost of VND13 billion ($572,300).

The story is the same in Hanoi.

Several parts of Hanoi’s Old Quarter around the backpacker area have opened walking zones, and prices have shot up to nearly VND700 million per square metre on some streets.

Prices for one square metre on Dao Duy Tu Street which leads to the backpacker zone have climbed from VND360 million to VND547 million over the past seven months.

The current prices stand at VND660 million per square metre on Hang Can Street, VND650 million on Hang Dao Street and VND582 million on Dinh Liet Street.

Expect to pay VND340-495 million on other streets that lead to the backpacker area, including Ta Hien, Nguyen Sieu, Ma May, Hang Giay, Lan Ong, Hang Ngang, Hang Buom, Luong Ngoc Quyen and Luong Van Can.

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