Supermarkets promote holiday

Expecting sales to surge on National Day, September 2, retailers, electronic stores and supermarkets are offering a slew of promotions to increase footfall.

Supermarket chain Big C is offering discounts of 5-49 per cent on 1,200 products ranging from fresh and dried foods and beverage to clothes, household utensils, cosmetics, and electronic products at its 31 stores nationwide until September 7.

It is also offering attractive discounts for the upcoming Tet Trung Thu (Mid-Autumn Festival) until September 27 on more than 200 products like moon cakes and lanterns, teas and children's toys.

Lotte Mart is offering discounts of 30-49 per cent on all fashion items, canned and fresh foods and others until September 14.

It will also have a "Meat Festival" to meet the demand for fresh meat.

Co.opmart and Co.opXtra supermarket chains are offering discounts of up to 50 per cent on thousands of Vietnamese high-quality products and hundreds of clean agricultural products until September 20 under their Tu Hao Hang Viet (Proud of Vietnamese Goods) programme.

Vo Hoang Anh, Saigon Co.op's marketing director, said the supermarket chains' biggest promotion of the year would cost more than VND180 billion (US$8.2 million).

Many electronics shops in HCM City like Nguyen Kim, Thien Hoa, and Cho Lon are offering attractive discounts on TVs, cameras, mobile phones, and household appliances.

The 2015 Promotion Fair held at the Phu Tho Indoor Stadium in District 11 from August 28 to September 3 is offering products discounted by up to 49 per cent.

It has attracted more than 370 companies showcasing and selling foods, beverages, clothes, footwear, electronic products, school items, cosmetics, and healthcare products among others.

Foreign property ownership rules clarified

The 2014 Housing Law and relevant regulations allow eligible foreigners to buy homes in Vietnam regardless of the duration of visa validity, the State Commission on Overseas Vietnamese said.

The commission under the Ministry of Foreign Affairs made clear the point in response to an inquiry by the HCMC Real Estate Association (HoREA) over procedures and conditions for foreigners to own homes in the country.

The commission cited the 2014 law on entry, exit and residence of foreigners in Vietnam as saying that Vietnam issues 20 types of visa with durations of validity ranging from 30 days to five years depending on purposes of visit.

Besides, foreigners who are permitted to enter Vietnam but do enjoy privileges and diplomatic immunity can own houses in Vietnam as stipulated in the 2014 Housing Law, the commission said.

In its documents sent to the ministries of public security, foreign affairs and construction last month, HoREA proposed granting visas valid for one to three years with multiple entries for foreigners to support those wanting to buy houses.

At a conference on the housing law in HCMC last month, a representative of the Ministry of Construction’s Housing and Real Estate Market Management Agency said those foreigners who are allowed to enter Vietnam and who do not have diplomatic immunity are all eligible to buy houses.

Standard Chartered launches mobile wallet service

Standard Chartered Vietnam Bank and M_Service JSC on August 25 announced their partnership on mobile money solutions to develop Straight2Bank Wallet payments in Vietnam.

Standard Chartered is the first bank in Vietnam to partner with M_Service to develop corporate payments, enabling corporations, State agencies and organisations to transact with both banked and un-banked individuals cashlessly. Straight2Bank Wallet is now available in 10 countries, including Vietnam.

With the introduction of Straight2Bank Wallet, Standard Chartered’s corporate clients in Vietnam can now make payments directly into their beneficiaries’ MoMo mobile wallets via its Straight2Bank platform.

Nguyen Ba Diep, executive vice chairman of M_Service, told the Daily on the sidelines of the launching ceremony that MoMo, a mobile money service operated by M_Service with more than 3,000 outlets in 38 provinces and cities nationwide, is partnering with some banks to provide financial services to both banked and unbanked individuals in Vietnam, especially in rural areas. The company is planning to expand its network to 5,000 outlets at the end of this year.

M_Service JSC has partnered with about five local banks to provide MoMo mobile wallet service for individuals and with Standard Chartered for enterprises in Vietnam.

Straight2Bank Wallet is currently also available in Kenya, Nigeria, Tanzania, Zambia, Pakistan, Bangladesh, Thailand, Indonesia and the Philippines, and the bank plans to expand the platform to more markets this year.

Dau Giay-Phan Thiet expy divided into two components

The Government has approved a proposal for splitting the Dau Giay-Phan Thiet expressway project into two components with one financed by the State budget and the other executed under the public-private partnership (PPP) format, the Government Office said.

A 36-kilometer-long section of the expressway from Dau Giay to Xuan Loc District of Dong Nai Province will be funded by the State budget through loans from the International Development Association (IDA) under the World Bank (WB). Its operation right will be sold to investors to recover investment capital.

The Ministry of Transport will work with the WB to develop an appropriate PPP format for the second section stretching 62 kilometers from Xuan Loc to Phan Thiet City of Binh Thuan Province.

The ministry said the project had been split due to problems with procedures related to the selection of the second investor needed for the big-ticket project and revenue guarantees for it.

Previously, Bitexco was chosen by the Government as the first investor with its capital contribution accounting for 60% of the total cost, while the second investor will pay the remainder.

The Ministry and the WB would break ground for the project in September 2015 if the second investor was picked through a tender. However, the ministry has failed to find a financially capable investor though some 100 foreign investors had shown keen interest in the project after the ministry conducted a series of road shows in India, South Korea and Singapore last year.

Many incentives have been pledged for investors involved in the project. In particular, they could get grants from the WB and take out loans from the international lender with interest lower than that for commercial loans.

The Government will do site clearance for the project and is expected to pay an amount of some US$257 million to ensure the feasibility of the project whose total cost is estimated at US$750 million.

The Dau Giay-Phan Thiet expressway will have a total length of 98.7 kilometers with one end connected to the HCMC-Long Thanh-Dau Giay Expressway and the other in National Highway 1A in Binh Thuan Province.

Once completed, the expressway will help shorten the traveling time between HCMC and other southeastern provinces and ease traffic on National Highway 1A.

Autos imported from India have lowest average price

The average price of completely built-up (CBU) autos imported from India into Vietnam in January-July was the lowest, at around US$6,600 per unit, while that of autos from Russia was the highest with a unit costing over US$43,800.

According to the General Department of Customs, Vietnam bought 8,546 CBU autos from India in the first seven months with a combined value of US$56.5 million. The average price of an Indian car was the lowest among a dozen markets from which cars were imported into Vietnam. The price was exclusive of taxes and fees.

Auto imports from India do not enjoy the tax incentives offered to cars imported from ASEAN countries and are currently subject to tax rates up to 68%. However, they can still compete with vehicles from other ASEAN countries or assembled in Vietnam thanks to low prices.

Having a large population and a majority of people with low incomes, the Indian government encourages companies to manufacture cheap, compact autos. Many foreign automakers in India have focused on the low-priced auto segment and now can export part of their output after years of investing in India.

Hyundai Thanh Cong, the importer and distributor of South Korea’s Hyundai cars, also imports cars from the Hyundai factory in India in addition to South Korea. Compact Grand i10 vehicles are attractive to Vietnamese consumers due to their competitive price and imports of this brand from India have risen in the year to date.

Suzuki’s low-priced multi-purpose vehicle Ertiga imported from India is also appealing to Vietnamese customers.

Though autos imported from Thailand enjoy a preferential tariff of 50%, their average price is over US$16,300 per unit. Vietnam imported 12,123 units worth US$198.3 million from this ASEAN country in January-July.

Auto traders said most pick-up trucks are imported from Thailand.

According to the General Department of Customs, the three countries whose auto prices are higher in Vietnam were Russia, Japan and the UK. Autos from Russia came with the highest price, at over US$43,800 per unit, and Vietnam spent over US$10 million importing 228 autos from this country in the first seven months, mostly heavy-duty trucks and special-use vehicles.

Russia was followed by Japan with 3,464 autos worth over US$143.4 million and a Japanese auto exported to Vietnam was priced at around US$41,400 on average. Meanwhile, the respective figures of autos imported from the UK were 703 autos, US$28.3 million and over US$40,200.

Japan and the UK mainly exported luxury cars to Vietnam in the period.  

In the year to July, Vietnam imported 64,420 autos worth US$1.71 billion in total, up 104.7% in volume and 152.3% in value against last year’s same period.

More Chinese tourists flock to central Vietnam

Chinese visitor arrivals in central Vietnam have significantly recovered following a sharp slide more than one year ago when China illegally placed a giant oil rig in Vietnam’s waters in the East Sea.

Danang, Khanh Hoa and Binh Thuan have welcomed more Chinese tourists this year. Compared to the other two provinces, Danang has attracted more Chinese visitors as more than 30 weekly flights from Chinese cities, Hong Kong and Macao bring around 4,500 tourists to the central coast city a week.

China is a major source of visitors for Danang’s tourism sector, said Tran Chi Cuong, deputy director of the Danang Department of Culture, Sports and Tourism. “Chinese arrivals in Danang have recovered fast since the incident in the East Sea last year. We expect more flights linking Danang and China at the end of this year.”

Local travel firms said Danang has many resorts offering services that match the Chinese’s needs and travel companies in the central coastal city have gained much experience in wooing tourists from China and arranging chartered flights to carry them to Danang.

Chinese tourists visit not only Danang but also neighboring places of interest like Quang Nam Province and Thua Thien-Hue Province’s Hue City.

As a new destination in central Vietnam for Chinese travelers, Khanh Hoa has lured the second largest number of Chinese visitors to the region after Danang. Chinese partners consider Khanh Hoa a potential venue for their guests.

Statistics of the Khanh Hoa Department of Culture, Sports and Tourism showed hotels in the province served more than 8,200 Chinese in June this year, over ten times higher than in June last year. In the first half of this year, the province attracted 44,583 Chinese travelers, up a staggering 135% compared to the same period last year.

Tu Quy Thanh, director of Lien Bang Travelink Company, said Chinese tourists love beaches, and that Danang and Khanh Hoa are attractive to them in terms of scenery and geographical location.

Thanh said the company has introduced other coastal destinations in Vietnam including Phu Quoc Island off mainland Kien Giang Province to Chinese partners but they have shown little interest as it takes longer time to travel there.

In Binh Thuan, Chinese tourists have helped many resorts of three to five-star rankings cushion the impact of the drastic fall in Russian arrivals, which results from the rouble dip against the U.S. dollar.

Le Minh Chinh, director of the Binh Thuan Department of Culture, Sports and Tourism, said the number of Chinese tourists started to bounce back in April 2015 and most of them are guests of the chartered flights landing at Cam Ranh International Airport in Khanh Hoa Province.

The first seven months of this year saw 35,631 Chinese visiting Binh Thuan, accounting for 13.8% of total international arrivals in the province in which Mui Ne beaches are lined with a large number of resorts.

Many realty firms yet to secure bank guarantees

A slew of real estate enterprises have launched products at their half-done and future projects though they have yet to obtain guarantees from financial institutions and foreign bank branches in Vietnam as regulated.

Article 56 of the 2014 Law on Real Estate Business, which took effect on July 1, stipulates that before selling or leasing products at their half-done or future housing projects, investors must secure banks’ assurances for their financial obligations towards their customers in case their deliveries miss deadlines.

If property developers fail to hand over houses to buyers as committed in the contract, guaranteeing banks will have to return deposits to customers on behalf of those developers.

Right after the law took effect early last month, a number of real estate firms like Him Lam Corporation, Khang Dien Investment & Trading House Company and Hung Thinh Corporation secured guarantees from banks such as Sacombank, VietinBank, Eximbank and BIDV for their housing projects.

However, many other enterprises have yet to clinch guarantee deals with banks for their projects in HCMC. A number of firms acknowledged that they have not sought bank assurances before they put up for sale products at their half-done and future real estate projects as required.

The regulation on bank guarantees is to help protect the interests of homebuyers.

An expert told the Daily when banks guarantee property projects, they would share responsibilities for clients’ deposits and the implementation process of projects. Banks will not guarantee projects developed by investors in a poor financial position.

Therefore, customers will run the risk of losing their deposits if they purchase homes at the projects without bank guarantees.

City council passes 289 public investment projects

The HCMC People’s Council at a meeting on August 26 approved 289 public investment projects for implementation in the coming years with combined capital amounting to tens of trillions of Vietnam dong.

The projects of Group B require investment capital of VND45 billion to VND2.3 trillion each. In particular, four projects cost a combined VND2.72 trillion including VND1.9 trillion funded by the State budget and the remainder by the city.

Five projects have total capital of nearly VND3.21 trillion, with some VND2.68 trillion funded by the proceeds from Government bond sales and VND524 billion by the city’s budget.

The nine public investments are bridge, road and drainage projects.

The remaining 280 projects costing a total of VND62.55 trillion will be financed by the city’s budget, proceeds from municipal bond sales and bank loans.

In addition, the council allowed adding 95 projects of Group B which were approved in previous years but have yet to be on the city’s list of public investment projects.

Commenting on projects in need of land allocation and occupying farmland and protected forest land, the council’s deputy Lam Thieu Quan said many projects are in the real estate sector, including Mui Den Do park and housing project in Phu Thuan Ward in District 7. He cast doubt on the need to develop this project as the property market has yet to recover fully.

Dao Anh Kiet, director of the HCMC Department of Natural Resources and Environment, said houses would be built on part of the project’s area and a park would cover the remainder. The zoning plan for this project was approved in the past and site clearance is almost done.

Deputies at the meeting also discussed school tuition fee reductions in the school year 2015-2016.

HCMC chairman Le Hoang Quan said the number of students at schools of different levels in HCMC has risen by 85,000 this year.

The city government has spent big on new schools. However, Quan is concerned that the city may lack land for new schools until 2020 if the number of students in the city grows rapidly.

Two register for shares at transport hospital

Bao Son Group and T&T Group were the only two to register to bid for a strategic stake at the Central Transport Hospital when the deadline was due last week.

Earlier, the Ministry of Transport pledged to put the equitization of State-owned enterprises (SOEs) under its umbrella on fast track with the Central Transport Hospital planned for the third quarter of 2015. However, only two firms outside the health sector registered for shares of the hospital although the conditions to become a strategic shareholder had not changed.

Those eligible to bid must be active in the field of health care or health services with equity in their latest audited financial statements no less than VND200 billion and with no accumulated losses; or must operate in other sectors with a minimum equity of VND1 trillion.

The final result was a surprise as in March when the hospital called for strategic investment, four enterprises expressed interest. They included foreign firms in the health sector from Singapore and Malaysia as well as domestic firms such as FLC Group Joint Stock Company specializing in real estate and Bao Son Group active in hotel business.

Earlier, the ministry proposed the Prime Minister approve T&T as the project’s strategic shareholder since the group met all requirements. When more companies showed interest, the ministry invited all the investors to bid for a 30% stake to become the strategic investor of the hospital.

The State is expected to hold a 30% stake in the hospital after it goes public. State capital divestment and issuance of shares will be used to increase the hospital’s chartered capital.

The hospital is valued at VND158 billion with all held by the State. Its chartered capital is expected to reach VND430 billion after adding the investment value of the inaugurated seven-storey building worth US$15 million funded by official development assistance (ODA) loans. In addition, the hospital has the right to use the area of up to 21,000 square meters in Hanoi’s Dong Da District.

G-bond sales grow sluggish

Fund raising for the State budget through Government bond sales has become difficult in recent weeks despite higher coupons as demand remains lackluster.

The State Treasury last week offered for sale VND3 trillion (US$133.3 million) worth of five-year and 15-year bonds. However, the sales were lower than expected.

Credit institutions acquired VND500 billion worth of five-year bonds, accounting for 25% of the total volume and down sharply from 40-50% two months ago. The proceeds from 15-year bond sales stood at VND211 billion, making up only 21% of the volume offered.

In the year to date, the State Treasury has mobilized over VND94 trillion from G-bond sales, meeting less than 50% of the entire year’s target. Sales of other Government-guaranteed bonds are also dreary.

Meanwhile, bonds with tenors of three years, five years and 15 years offered by the Vietnam Bank for Social Policies have found no buyers.

Vietnam Development Bank (VDB) issued VND6 trillion worth of three-year, five-year and ten-year bonds but sold only three-year bonds valued at VND100 billion.

Treasury bill sales to raise funds for short-term budget spending are in the same situation. The central bank got VND3 trillion from sales of two-week, four-week and eight-week bills on Monday and another VND5 trillion on Tuesday.

Foreign investors remained net sellers for the fourth straight week last week on the bond market. Foreigners net sold nearly VND1.26 trillion last week, the biggest amount in the year to date, and a combined some VND2.53 trillion in the past four weeks.

G-bond coupons of all tenors edged up by 0.05-0.13 percentage points. The bond yields for one-year, two-year and three-year tenors jumped to 5.22%, 5.48% and 5.87% per annum respectively.

The respective bond yields for five-year, 10-year and 15-year tenors were up to 6.724%, 7.03% and 7.775%.

The yield of seven-year bonds registered the sharpest increase, at 1.127 percentage points, to 6.96% per annum. Coupons for all tenors have hit record highs this year.

Given the current situation, currency traders expect the State Treasury will raise G-bond coupons to attract buyers in the coming auctions to ease pressure on the State budget as budget collections are forecast to drop due to lower oil prices on global markets.

More land lot projects launched in eastern HCMC

The land lot market in the eastern part of HCMC has turn bustling as real estate firms have launched more projects, particularly in districts 9 and Thu Duc.

In Thu Duc District, Dai Phuc Company is offering land lots at Van Phuc Riverside City project on 198 hectares near Binh Trieu Intersection and the Saigon River. The company sells land for over VND17 million per square meter.

Sai Gon Thuong Tin Real Estate Joint Stock Company (Sacomreal) has launched the Jamona Home Resort project in Thu Duc with 238 land lots of 140-520 square meters each and prices from VND16.2 million per square meter. The customers who have registered to buy at the project comprises around 20 foreigners and overseas Vietnamese.

Small- and large-scale land lot projects abound around the Saigon Hi-tech Park in District 9. D.V Company said it had sold 30 land lots worth VND500 million each in a residential project on Nguyen Xien Street.

Lot sale advertisements have mushroomed along the streets in District 9 such as Do Xuan Hop, Nguyen Van Tang, Nguyen Xien, Vo Van Hat, Lo Lu and Tang Nhon Phu. These land lots cost from VND9 million to VND13 million per square meter depending on location.

Notably, lots near the Saigon Hi-tech Park have drawn a lot of buyers in recent months, particularly since Samsung started work on a multi-billion-dollar electronics factory at the park and is expected to hire up to 30,000 employees.

Individual land owners in the districts have joined the market when selling lots of 50-60 square meters each from VND400 million to VND600 million. Such lots can be found in the areas on Lo Lu, Vo Van Hat and Nguyen Xien streets in District 9.

Higher demand has pushed up land prices in districts 9 and Thu Duc. According to individual property dealers, prices of lots in the outlying district of Thu Duc have gone up by around 20% compared to early this year and a 50-square-meter area costs VND600 million.

City to organize annual online shopping programs

The HCMC Department of Industry and Trade will put on a number of online shopping programs on public holidays, including one during National Day (September 2).

The department’s deputy director Tran Vinh Nhung unveiled the online shopping programs at a press briefing in HCMC on Tuesday. The event was organized to introduce the online shopping program set to kick off this Saturday.

Nhung, who is also head of the upcoming online shopping program, said 21 reliable e-commerce companies have registered to join and that their websites would be connected to www.khuyenmaitructuyenhcm.gov.vn planned to be launched on August 26.

Nhung noted that on www.khuyenmaitructuyenhcm.gov.vn customers will not be able to buy goods directly but can find links to the websites of the participating firms where they can place orders.

Nhung said apart from the upcoming shopping program, the department will organize annual online shopping events for local enterprises to boost sales during the Lunar New Year holiday (Tet) and the Reunification Day on April 30.

The shopping week for the Lunar New Year holiday is scheduled to take place from January 18 to January 24 next year.

The department wants to turn www.khuyenmaitructuyenhcm.gov.vn into a platform for e-commerce companies in HCMC to step up online sales.

Manulife Vietnam gets new chairman

Manulife (Vietnam) Limited announced that the Ministry of Finance has approved Indren Naidoo as chairman of the life insurer.

Manulife Vietnam said in a statement on August 24 that Naidoo, who joined Manulife in 2009, is currently regional chief executive officer (CEO) of Manulife for Vietnam, Thailand and Cambodia. He has worked in the financial industry for over 30 years, including 17 years of international experience in the insurance sector.

Prior to his current role, Naidoo was president and CEO of Manulife Philippines and Manulife China Bank Life Assurance Corporation.

Before joining Manulife, he worked in the Philippines as chief financial officer for two major multinational life insurance companies. His responsibilities included strategic planning, business development, and product design for agency, bancassurance and alternative channels.

Manulife Vietnam became the first foreign-owned life insurance company licensed in the country in June 1999. Manulife Asset Management (Vietnam) Company Limited, a wholly-owned local subsidiary of Manulife Vietnam, was approved in June 2005 to operate fund management and portfolio management services.

Manulife Vietnam had had a network of 37 offices in 26 cities and provinces as of the end of this year’s second quarter. The firm offers a wide range of insurance products and solutions for life, health, education, investment and pension.

Hanoi to sell VND4-trillion bonds

The government of Hanoi City will issue municipal bonds worth a total of VND4 trillion (US$178.1 million) this year to raise funds for social and infrastructure projects, especially those underway.

Half of the bond volume will be sold at auction at the Hanoi Stock Exchange (HNX) this Friday, heard a meeting on the city government’s bond issuance plan in 2015 last week. The bonds will be registered at the Vietnam Securities Depository and tradable on the northern bourse.

The debt paper will come with tenors of three, five and ten years. Similar to the bond sales in 2013 and 2014, municipal bonds offered for sale this year will have a face value of VND100,000 each and different fixed coupons for different tenors. Interest will be paid annually and principal will be settled upon maturity.

The city government will decide the coupons based on the interest rates regulated by the Ministry of Finance, commercial banks and the market situation at the time of issuance. But they will not be lower than those of Government bonds.

According to the bond issuance plan approved by the Government, Hanoi will use the proceeds from the bond sale for social welfare projects and projects in the sectors of transport, environment and healthcare.

Hanoi has issued construction bonds every year since 2013 via auctions on the Hanoi bourse. The city raised VND4.4 trillion from bond sales in 2013 and VND3 trillion last year.

Economists blame lack of policy reforms to benefit from FTAs

Though the government seeks to globally integrate Vietnam -- 15 free trade agreements signed since 2007 -- its tardiness in reforming policies is preventing businesses from benefiting from the FTAs, delegates said at a recent economic forum in the central province of Thanh Hoa.

They were speaking in defense of businesses who are often accused of being "clueless" about FTAs and failing to use those trade deals to their advantage.

Nguyen Dinh Cung, chief of the Central Institute for Economic Management, said what matters is whether government policies can enable the whole economy to participate in the integration.

The government system has remained unchanged for the past 30 years, meaning that they manage and control businesses by setting up barriers instead of acting as their companion, he said.

As a result, Vietnamese businesses find it hard to survive right in their home environment, let alone in overseas markets, Cung said.

Economist Vo Dai Luoc also complained about the government's sluggishness in reforming business policy, saying Vietnam's competitiveness has yet to catch up with its eagerness for integration.

Nguyen Quang Thuan, deputy chief of the Vietnam Academy of Social Sciences, agreed, saying the country has yet to make "breakthroughs" in sectors like infrastructure and human resources.

Dau Anh Tuan, chief of legal affairs at the Vietnam Chamber of Commerce and Industry, told the forum delegates that a main reason for Vietnamese businesses' failure to take the opportunity brought by FTAs is the lack of information and instructions.

Former trade minister Truong Dinh Tuyen quoted recent surveys as saying that 76% of businesses polled do not know that the ASEAN Economic Community will be established this year.

Even though the community's establishment will enable free flow of goods among its members, 62% of respondents believed the event would not affect them, he said.

Tuyen pointed out that though Vietnam has been in ASEAN for 20 years, as of last year only 25% of its exports to other members had certificates of origin which allowed them to receive tax breaks.

"It is a sad fact showing Vietnamese businesses' poor awareness and understanding about economic integration," he said, adding that even officials are only "vaguely" aware of the subject.

Economist Le Dang Doanh said Vietnam's ignorance about FTAs also means that it fails to set up protection against the flow of foreign goods and services while its partners in the agreements often make good preparations by setting up different barriers to limit the flows.

Though Vietnam's economy is forecast to grow by more than 8% when the Trans-Pacific Partnership, a US-led FTA involving 12 nations, is signed, the expectation is possibly premature, he said.

The forecast is based on the assumption that all Vietnamese businesses would be able to bypass barriers set up by other signatories, while in fact only half possibly would, he added.

Japanese businesses promote investment in Danang

More than 80 Japanese businesses recently participated in a conference on trade and investment promotion in the central city of Danang.

Speaking at the event, Chief Representative of the Japan External Trade Organisation (JETRO) Atsusuke Kawada said 66% of the Japanese enterprises currently operating in Vietnam have plans to expand their operation in the country, a rate higher than in many nations. He added that 84% of the firms said the expansion is to raise their turnover.

Half of them expressed their confidence in Vietnam’s socio-political stability while nearly 47% highly valued the country’s market scale and growth, he said.

The JETRO Chief Representative stressed Japanese businesses’ hope for simplified procedures and free import and operation duties in Vietnam.

According to him, Japan was the largest investor in Vietnam in 2012 and 2013 in terms of capital. Although its investments dropped in 2014, the country still took the lead in the number of projects.

The trend remained during the first seven months of this year due to the Japanese yen’s decline and the completion of major investment projects. On the contrary, small-and-medium-scaled projects have increased to support the operating businesses.

Last year, Japan had 342 newly-licensed projects and the figure stood at 176 in the January-July period of 2015, Kawada noted.

Danang was the first Vietnamese locality to open its representative office in Tokyo in 2004.

With the biggest number of Japanese language learners in the central region, Danang has pioneered in piloting the teaching of the Japanese language in junior and senior high schools.

The central city also houses the largest number of Japanese companies, branches and representative offices in the region.

At present, the locality is calling for Japanese investments in a range of projects, including a hi-tech park, an industrial zone for Japanese small- and medium-sized enterprises, and a resort for Japanese older people.

On this occasion, a memorandum of understanding on cooperation in personnel exchange and Japanese language teaching was signed by Route Inn Group of Japan and Danang’s East Asia University.

Vietnam’s first solar power station breaks ground

A ground breaking ceremony was held August 29 for a US$37 million solar power generating station in the central province of Quang Ngai that officials say will play an important role in meeting the nation’s power needs in the future.

“The nation is looking to tap the power of the sun to accommodate the expected spike in demand for electricity over the coming decades,” said Deputy Prime Minister Hoang Trung Hai at the event.

The 19.2-megawatt project to be located in the Mo Duc district will capture solar energy with panels spread across almost 24 square hectares, according to a provincial representative.

Though far from the first solar panels to be installed in Vietnam, this will be the first time solar energy will be harnessed on a mass scale.

Work on the project is expected to be completed in mid-2016.

MINI showroom opens in HCMC

Euro Auto, the authorized MINI importer in Vietnam, has launched the first MINI showroom in Ho Chi Minh City.

“MINI is not only about brand; it is also about unparalleled efficiency, unrivalled sportiness, and unmistakable design,” said Mr. Horst Herdtle, CEO of Euro Auto. “We are confident that we can take the MINI brand to even greater heights in the days to come.”

The showroom is located at 74 Nguyen Van Troi St., Phu Nhuan District, in the heart of the city and is the only car showroom in the vicinity. Spanning 510 sq m, the new showroom can display up to nine MINIs and comes with an office and a dedicated MINI Lifestyle and Accessories corner.

The showroom’s unique design is meant to deliver a “City-at-Night” atmosphere at all times of the day through a high proportion of black combined with bright color contrasts, thereby making it a cool place for trend-conscious Vietnamese urbanites to hang out.

Last year an entirely new lifestyle and new experience came to Hanoi with the grand opening of our MINI showroom.

About 800 firms join Vietbuild Expo

Enterprises in the construction industry will showcase their latest products at the Vietbuild International Exhibition 2015 to be held in Ho Chi Minh City's Saigon Exhibition and Convention Centre from September 1 to 5.

The exhibition, the second of its kind held in the city this year, will feature about 800 domestic and foreign companies from Singapore, South Korea, Taiwan, Sweden, Japan, Italia, France, Germany, Australia and other countries.

The expo will have 2,300 booths displaying new and advanced products used in real estate, architecture, and interior and exterior decoration, including those for smart homes and electrical equipment.

Property transaction floors will offer projects at preferential prices targeting low-income earners, said Nguyen Dinh Hung, chairman of the Vietbuild Construction International Exhibition Organising Corporation.

Conferences and business meetings will be held on the sidelines of the expo, he told a press conference held in HCM City on August 26.

Nguyen Tran Nam, former deputy Minister of Construction and head of the exhibition's organization board, said exhibitors would share experiences and expand business networkings, contributing to the development of the domestic construction and real estate sector.-

Ministry asks to quicken social housing building

The Ministry of Construction has recently asked local authorities nationwide to quicken the building of social housing, in a bid to comply with the national housing development strategy.

Among the requests was to simplify administrative procedures in determining which borrowers were eligible for preferential loans from the Government's 30 trillion VND (1.33 billion USD) support package for the realty market.

In addition, coordination with the State Bank of Vietnam and credit institutions was needed to tighten inspections to prevent abuses during the implementation of the preferential loan package.

Further, the measures seek to guarantee that the assistance package helps those people it was intended for, as well as developers, and to speed its disbursement, according to the ministry.

Statistics from the Ministry's Housing and Real Estate Market Management Department indicate that, as of the end of July, only one-third of the support package had been disbursed, some two years after having been implemented.

Involved commercial banks committed to loaning more than 17 trillion VND (755.55 million USD) from the support package, as of July 30, to 24,150 households and 43 developers, with more than 10 trillion VND (444.44 million USD) having been disbursed.

In order to support developers of social housing projects, the construction ministry said administrative reforms must be improved to create advantageous conditions for developers in converting commercial housing projects into social housing projects.

Regarding converted projects that have already been approved, construction must be quickened to prevent wastes of land and financial resources, the ministry advised, adding that official approval for projects seen as lagging would be revoked.

The ministry also urged developers to complete legal documents for social housing projects to allow early granting of home ownership certificates to buyers.

To date, the construction of 102 social housing projects were completed, while 150 others are underway, throughout the country.

Minister of Construction Trinh Dinh Dung, on a television programme broadcast last month, said low-income housing projects still lagged far behind demand due to the lack of funds and incentives.

The country needs an estimated 200,000 apartments for low-income earners by 2020, adding to the 700,000 units built during the 2012-15 period.-

Future seems ‘grim’ for Vietnam’s steel industry

Vietnam and the Eurasian Economic Union (EEU) signed a free trade agreement (FTA) on May 29, 2015 –  the first such trade deal struck by the Moscow led body with a third country as it seeks to bolster its presence in Asian markets.

The EEU, which includes Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan, was launched in January 2010 to promote trade and economic integration. It has a combined population of 181 million and gross domestic product of around US$2 trillion.

The trade deal covers more than 90% of all commercial goods traded between the parties and it is anticipated to pose particularly tough challenges for Vietnam businesses in the steel manufacturing and fabrication industries.

Pursuant to the terms of the deal, once fully implemented, businesses within these two industries will be permitted to compete in the Vietnam-EEU free trade zone without the imposition of tariffs and other non-tariff barriers.

“The trade deal will undoubtedly bring major competition to the Vietnam steel fabricating industry as Russian steel has a reputation for high quality at a reasonable cost,” said Vietnam Steel Association Vice Chairman Nguyen Van Sua.

Each year, the Russian industry produces roughly 70 million metric tons of steel using some of the world’s most advanced technologies. Each ton of steel billet produced in Russia consumes 50 kilowatt hours of power.

Meanwhile, Vietnam manufacturers use excessively more of the industry’s number one cost input, almost 10 times more electrical power to produce the same tonnage, putting them at a severe competitive disadvantage.

Additionally, most Vietnamese steel businesses are relatively small-scale operations and lack the financial backing to invest in more advanced technologies to improve quality let alone the skill set to utilize them.

Sua also suggested that Vietnam businesses are severely handicapped by their deficient knowledge of international trade laws and practices, with the single greatest challenge for exporters being their lack of knowledge of foreign markets.

Pham Chi Cuong, former chairman of the steel association, in turn is adamant that only Vietnam’s largest steel producers have any possible chance of competing on an equal footing with their Russian counterparts.

Cuong is all too quick to point out there are not many businesses that fall into this category.

Phan Dao Vu, a representative of the Vietnam-Australia Steel Company, also agrees that local steel producers will face innumerable and likely insurmountable challenges following the implementation of the FTA.

Many business leaders, including the Vietnam Steel Association, have called for the government to step in and intervene with protective measures to protect the multi-billion dollar steel industry from competition.

While there is little question the FTA is good for consumers in Vietnam, considering they are getting a higher quality product at a much better price, it straightforwardly means the industry has its work cut out getting its products up to snuff.

Utilizing higher quality steel at a lower cost is also good for the nation’s infrastructure in this time of rapid expansion with new factories, bridges, airports and other infrastructure that incorporate steel into their final product benefiting tremendously.

Deputy Minister of Industry and Trade Tran Tuan Anh underscored just this point saying that with Vietnam opening its markets and moving towards global integration, steel businesses should accept that they need to get more competitive to survive in a market economy.

Vietnamese steel business leaders are looking increasingly out of touch with market realities in a world of global supply chains.

They need to find a niche in making something they are good at and dump the sense of entitlement.

National index of industrial production rises on recovery

Viet Nam's index of industrial production (IIP) in the first eight months of 2015 gained 9.9 per cent year-on-year due to the recovery in national industrial production.

Industrial and construction economy experts at the General Statistics Office (GSO) said national industrial production had made a strong recovery since February of this year as the IIP in the first two months of this year showed growth of 12 per cent against the same period last year.

The growth rate remained strong in the following months, with an average increase of at 9 per cent per month, the experts said, adding that the IIP had reflected a year-on-year increase of 9.9 per cent in the first seven months as well as in the first eight months of this year.

The GSO reported the electronic, computer and optical sector had high growth rates of 40.2 per cent in IIP and 38.9 per cent on the consumption index, while the IIP and consumption index for the motor vehicle manufacturing industry each rose 30 per cent.

Other sectors also achieved high growth in production, such as the industries involved in the production and assembly of telephones (up 58 per cent), automobiles (up 59 per cent), leather and footwear (up 24.7 per cent) and televisions (up 39.4 per cent), as well as those producing fresh milk (up 15.6 per cent), steel (up 19.7 per cent) and animal feed (up 16.4 per cent).

However, some other industrial sectors faced low growth or a reduction in production, including those making cloth from natural fibres (up 3.2 per cent), casual wear (up 4.1 per cent), processed seafood (up 4.9 per cent) and urea fertilisers (down 5.1 per cent).

The GSO said the reduction in demand and high supply had forced some industries to cut production.

The office also reported that many provinces and cities had shown high growth on the IIP for the first eight months of this year against the same period last year, including Thai Nguyen Province (193.6 per cent), Quang Nam Province (34.8 per cent), Hai Phong City (14.8 per cent), Da Nang (13.2 per cent) and Hai Duong Province (10 per cent).

Telepresence solutions provider Polycom opened three demonstration centres in Ho Chi Minh City and Hanoi last week.

The demonstration centres, the first in Vietnam, provide customers the opportunity to experience firsthand the company’s latest video, audio, and content collaboration solutions, which include Polycom® RealPresence® Room systems for various room sizes; industry-specific technology such as the Polycom RealPresence Utility Cart 500 for telemedicine, manufacturing, and other vertical applications; and SoundStation® IP 7000 VoIP audio conferencing. Visitors will also be provided with specialist advice on purchasing, financing, and deploying these solutions.

The new centres, jointly launched with partners Ademax JSC and Sun Ivy International Inc., are indicative of Polycom’s strategic growth plans for Vietnam, as the company looks to expand its technology portfolio and offerings to both existing and potential customers across Vietnam.

“With rapidly developing industries and continued strong economic growth in Vietnam, there is an increasing demand for skilled, productive workforces. Stronger collaboration in local businesses becomes more important than ever, to build the workplace and workforce of the future – and technology enables us to keep pace with globalisation and be competitive,” said Huy Ha Hao, Polycom’s Vietnam and Myanmar country manager.

Polycom, founded in 1990, provides telepresence, video and voice solutions that enable companies’ geographically dispersed workforces to communicate and collaborate. Polycom has served 415,000 companies and institutions worldwide. In 2014, the company generated GAAP operating income of $46 million, or 3 per cent of revenue, as compared to an operating loss of $17 million, or negative 1 per cent of revenue, in 2013.

VinMart opens new supermarkets in Bien Hoa and Ho Chi Minh City

The VinMart chain of supermarkets and stores opened two supermarkets in southern Vietnam – VinMart Bien Hoa and VinMart Quang Trung, Ho Chi Minh City on August 28 and September 2.

The chain, despite being in operation for only nine months, has opened 74 stores, including 19 VinMart supermarkets and 56 VinMart+ convenience stores nationwide. Both of the two new supermarkets are big supermarkets with over 2,000m2 of modern store area, designed to create the most convenient shopping experience for consumers.

The stores boasts over 40,000 items for daily use, most of them have clear domestic and international origins, under strict quality control.

Apart from opening promotions, the two new supermarkets are giving additional promotions on the occasion of National Day, as part of the VinMart and VinMart+ promotion campaigns from August 28 to September 20, with up to a 49% reduction in the prices of thousands of items, including food, fashion items, cosmetics and home appliances.

The two stores are in Vincom Quang Trung - 190 Quang Trung Street, Go Vap District, Ho Chi Minh City and Vincom Bien Hoa – 201 Pham Van Thuan Street, Bien Hoa city.

Thai group opens Komonoya parity shops in Vietnam

Thai Central Group is destined to open six more Komonoya parity shops at major trading centres from September 2015 to March 2016, bringing the total number of shops of its kind to 10 in Vietnam.

A Central Group representative on August 30 said one year after doing a market research, the group inaugurated four parity shops in Hanoi and HCM City.

The fourth Komonoya shop made its debut on August 30 in Vivo City, HCM City.

Komonoya is a parity shop selling more than 4,000 kinds of products at VND40,000 each.

VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR