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BUSINESS IN BRIEF 30/5

Real estate starts to recover; Thai businesses seek franchise partners in Vietnam; Vietnam, RoK develop agricultural value chain; Supporting industries to be developed; SOEs make good move towards capital withdrawal

Dragon fruit enters New Zealand market

Vietnam and New Zealand signed a programme in Hanoi on May 28, enabling the former’s dragon fruit to penetrate the latter’s market.

Signatories to the programme were Nguyen Xuan Hong, head of the Plant Protection Department under the Ministry of Agriculture and Rural Development (MARD) and the New Zealand Embassy in Hanoi.

New Zealand Ambassador Haike Manning said the guarantee programme includes procedures and pre-export activities to ensure that dragon fruit exported to New Zealand meets all the safety requirements for consumers’ health.

With the programme in effect, Vietnam is the first and only country to be licensed to ship the product to New Zealand, said the ambassador.

He expressed his hope that the first shipment of Vietnamese dragon fruit will soon dock at New Zealand ports.

New Zealand imported Vietnamese mangoes in 2011 and is current considering purchasing Vietnamese rambutan.

It has recently funded various projects to plant new varieties of fruits in Vietnam.

Real estate starts to recover

The domestic real estate market has become warmer as property prices have dropped sharply to suit the budget of the average buyer.

Vu Van Phan, deputy head of the Ministry of Construction's Housing and Real Estate Market Management Department, announced at an online meeting on Reality and the Prospects of Vietnam's Property Market, held in Hanoi on May 29, that estate prices had declined 20-30% or even 50% compared with the "hot" period in the market several years ago.

The price decrease in suburban and Ring Road 3 areas was higher than property projects in the city's central districts.

"The market has also seen an increasing number of estate transactions," Phan noted.

Statistics collected from the Municipal Department of Construction, property businesses and floors revealed that the city has had more than 6,350 successful transactions in the year 2013. In the first quarter of last year, the number of transactions was 800, and those in the second, third and fourth quarters were 1,050, 1,800 and 3,000, respectively.

Answering the question of whether the market has bounced back to its "hot" period in 2009, Phan stated that such a situation will not arise as the market has faced difficulties for a long time together with high inventory.

Tran Ngoc Quang, deputy general secretary of the Vietnam Real Estate Association, agreed, adding that the market has seen positive changes.

Of the total, the market segment for medium-sized apartments has the highest number of transactions. In addition, property firms have regained customer trust.

However, Quang pointed out that property distribution and service companies have been developed with a lack of consistency and professionalism, especially in management.

"The market is still suffering a lack of sustainability, which requires consistent efforts from all relevant parties though it has seen improvement," he noted.

Tran Nhu Trung, deputy general director of Tan Hoang Minh Group, added that the market has experienced a period of adjustment after a hasty and unprepared period.

"The domestic estate market has shown improvements this year as its liquidity rose by 2-3% in each quarter," Trung noted.

The change was remarkable though it was small as the market has been naturally adjusted and has not been affected by reactions to trends or events.

He added that the recovery has not been observed in all segments, as figures from property floors and consulting firms revealed that 50 – 80% of transactions are on projects that have good locations and are under construction or complete. Those projects that did not fall under any of these factors have no liquidity.

Japanese businesses further operation in Vietnam

Japanese enterprises will continue their investment in Ho Chi Minh City and call on more investors to Vietnam, Horito Hyakkoku, Chairman of the Japanese Business Association in the southern hub (JBAH), told the municipal People’s Committee on May 28.

He said that the association groups more than 700 enterprises, about 100 of them joining in 2013, which shows their interest in the city and Vietnam in general.

In recent years, the JBAH has promoted Vietnam as a country of political stability and social safety, therefore Vietnam should work to maintain such an image, Horito Hyakkoku added.

At the meeting, Vice Chairman of the HCM City People's Committee Le Thanh Liem said he hopes the association will continue acting its role as a bridge between Japanese enterprises and the municipal authorities.

He said the Vietnamese Government, its ministries and the city have promptly handled consequences of regrettable incidents that happened on May 13-14 and helped affected businesses soon resume their operation.

Local authorities pledged to strictly punish extremists and ensure safety for foreign enterprises, including those from Japan.

Thai businesses seek franchise partners in Vietnam

A number of Thai businesses attended a franchise forum in HCM City on May 28 to share experience and seek Vietnamese franchise partners.

These businesses are franchises that mainly operate in the fields of food and beverage, health care, education and training, services, and restaurants.

Vietnam’s Ministry of Industry and Trade statistics show that as of April, more than 120 foreign enterprises registered for franchising in Vietnam. These franchises achieved annual growth of more than 30% and their annual sales hit more than US$30 million.

Vietnam is opening its retail market in 2014, creating conditions for foreign businesses to eye franchising in the country.

Franchising is the optimal choice in bringing business opportunities for enterprises, especially in potential markets like Vietnam, according to a Vietnamese business executive.

Vo Tan Thanh, Director of the Vietnam Chamber of Commerce and Industry  (VCCI) in Ho Chi Minh City, said currently, in Vietnam, franchise models attract not only domestic investors but also foreign firms.

The involvement of international brands opens up opportunities for domestic consumers to access high-quality goods and services, he said, adding it also requires domestic enterprises to improve their innovation, creativity and standards to meet consumer demand.

Vietnam-Peru trade ties remain modest: workshop

Vietnam and Peru have yet fully tapped their trade potential, with two-way trade value reaching more than US$100 million a year.

The figure was released at a workshop in HCM City on May 28 to introduce the Peruvian market, jointly held by the Vietnam Chamber of Commerce and Industry (VCCI) and the Peruvian embassy in Vietnam.  

Nguyen The Hung, Deputy Director of the VCCI-HCM City, said Vietnam and Peru have signed a number of cooperation agreements in the areas of economics, trade, customs, agriculture, seafood processing, and science-technology, to support their business communities in penetrating each other’s markets.

Agriculture, seafood processing and science-technology will be priority cooperation areas between the two countries in the coming time, and their business communities will help fulfill the task, Hung said.

HCM City urged to ensure stable production for businesses

Ho Chi Minh City should focus on ensuring stable production and remove difficulties for businesses, including foreign ones, Deputy Prime Minister Vu Van Ninh has said.

At a working session with the municipal leaders on May 27, Ninh asked the city to anticipate emerging issues that can affect production activities in the future.

Mentioning some law breakers’ actions that adversely affected foreign businesses earlier this month following looting and arson attacks, the Deputy PM praised the city for its quick and positive response, which limited the extremist acts and the negative impact on enterprises, especially foreign ones.

In the time to come, the city should continue to ensure security and prevent similar acts from recurring, he said, adding that it needs to review relations between employers and employees, and increase education campaigns to raise workers’ awareness.

Deputy PM Ninh also spoke highly of the municipal authorities’ efforts in directing the implementation of socio-economic development tasks in the first months of the year.

He urged the city to continue stabilising the macro economy, settling bad debts and restructuring credit organisations while applying measures to ensure budget collection and speed up the restructuring of State-owned enterprises.

According to a report from the municipal People’s Committee, disturbances at the city’s industrial parks caused damage of about VND3.9 billion (US$185,700) for local businesses.

Right after the incident, the city focused all resources to deal with the problems and by May 17, businesses had resumed their operations.

Vietnam, RoK develop agricultural value chain

The Republic of Korea (RoK), Vietnam signed a Memorandum of Understanding (MoU) on carrying out a project to build new rural areas and develop agricultural value chain in central Ninh Thuan province.

The signatories were the Ministry of Agriculture and Rural Development (MARD), the Korea International Cooperation Agency (KOICA) and CJ group – the RoK’s leading group of food material distribution - and Ninh Thuan provincial People’s Committee.

Deputy Minister of Agriculture and Rural Development, Tran Thanh Nam affirmed that the project is a public-private partnership (PPP) model between Vietnam and the RoK with the aim of generating jobs and increasing income for labourers.

The three-year project will be implemented from May 2014 to May 2017 in Tam Ngan hamlet, Lam Son commune, Ninh Son district with a total funding of US$1.7 million from KOICA and CJ group.

The project will focus on enhancing capacity building in rural areas, organising training courses on the implementation of programmes to build new rural areas, improve the environment, upgrade primary schools and kindergartens and increase agricultural output,in particular chilli farming.

Under the MoU signed between the provincial People’s Committee and CJ group on September 4, 2013, both sides  worked on developing a chilli growing area of around 500-600 hectares in order to export chillies to CJ group’s processing food factories in the RoK and other nations.

In the future, CJ group is likely to purchase an increased volume of around 5,000 tonnes of dry chillies per year.

In the first phase, CJ Group will provide Vietnamese farmers with 16 new varieties of chillies, materials and the necessary funding required to grow chillies in Thuan Bac district, Lam Son commune, Ninh Son district.

After that, CJ group will be responsible for providing chilli varieties and transferring cultivation technologies to farmers and has pledged to purchase 100% of the chillies under the agreed prices.

Once successful, the cooperation model will be rolled out in other localities nationwide.

Lee Jae Wook, CJ group’s Vice President said that the group plans to launch a series of projects in Vietnam in the future.

Myanmar pharmacy expo introduced to Vietnam businesses

The 2nd International Medical, Hospital, and Pharmaceutical Exhibition-Myanmar Phar-Med Expo 2014 will be held at Myanmar Convention Center (MCC) in Yangon from July 10-12.

The information was released at press conference in Hanoi on May 26 with the participation numerous Vietnamese medical equipment and pharmaceutical manufacturers.

Spanning 2.000 square meters, the exhibition is expected to attract more than 100 firms manufacturing pharmaceutical products, machinery, and medical devices from countries around the world.

Representatives from the Myanmar Medical Association highlighted the opportunities for healthcare cooperation between companies in Myanmar and Vietnam.

According to the organising board, following the success of the first exhibition, the 2nd Myanmar Phar-Med Expo 2014 will continue to provide a great trade platform for enterprises who want to cash in on the emerging Myanmar market in the medical and pharmaceutical industry.

Vietnam receives 3.75 mln foreign arrivals in five months

The nation welcomed 3.75 million foreign arrivals in the first five months of this year, demonstrating a year-on-year increase of 26.07%.

Vietnam sets a target of attracting 8 million foreign arrivals by the end of 2014. It currently reaches 46.85% of the yearly plan.

In May alone, 674,200 foreign arrivals came to Vietnam, down 9.62% from April, however, in comparison with last year’s same period, the figure rose by 20.66%.

The Vietnam National Administration of Tourism (VNAT) said in the first five months of this year, most markets showed increasing number of guests to Vietnam higher than the same period last year namely Hong Kong, Germany, China, Laos, Cambodia, Russia and Spain.

At the same time, the number of domestic arrivals was estimated at 20.4 million, up by 6.7% against compared with last year.

Total tourism revenue hit VND109,160 billion, representing a year-on-year increase of 28%.     

Expo focuses on food ingredients market

Like other countries in Asia, Viet Nam is a potential market for food ingredient producers and suppliers, according to over 100 companies from 16 countries and territories who are taking part in the Food Ingredients Viet Nam 2014 (Fi Viet Nam 2014) expo.

Mervyn Gribben, the general manager of Kerry Viet Nam, said the country was a vibrant market with a mix of traditional and new food ingredients. He added that the three-day exhibition was useful for the company to reach out to existing and potential customers.

Sharing the same point of view, a representative from a Thai company said they anticipated having success in Viet Nam in the near future.

He said the country had a good consumption market and was developing well.

According to UBM Asia, the event's organiser, a large number of international exhibitors and visitors, coming from 16 countries and territories testified to the growing interest in the Vietnamese food and beverage sector as well as food ingredients.

The organiser said that a number of co-operation contracts had been signed and that many companies found opportunities to open or widen their businesses in Viet Nam after the event.

The business director of UBM Asia, Rungphech Chitanuwat, said the three days had provided the right ingredients for success: business, networking and learning.

"This focus ensures that we meet the needs of food and beverage industry professionals at all levels of the supply chain," she said.

Many companies agreed that they would continue to take part in the event next year.

"The expo is a good chance for us to meet other companies and to share experiences as well as solutions in the food industry. My company will surely join the next expo. Viet Nam has a lot of potential and this is a good chance for us to study the increasing demand in the country so that we will have good solutions to meet such demand," said Ta Quang Hoa, director of the Ba Dinh Food Company.

Kicked off a week ago, this was the first exhibition on food ingredients. The event was organised at the Sai Gon Exhibition and Convention Centre. The next expo will be in May 2015.

Geographical indications increase value

The registration of geographical indications (GIs) will not only protect trademarks and consumers but also help Vietnamese goods to penetrate into large markets.

Delphine Marie-Vivien from the Centre for International Co-operation in Agronomic Research (CIRAD) announced at the workshop on Geographical Indications held in Ha Noi yesterday that Free Trade Agreement (FTA), which Viet Nam has been negotiating, will bring both opportunities and challenges, such as trademark disputes, for businesses.

She reported that GI registration in Europe will benefit enterprises in terms of tourism, environment protection and cultural tradition as well as producers.

Specifically, names of countries will be attached to products, thus increasing value-added products.

In addition, GI labelling will also benefit consumers as the products will be ensured in terms of origin, quality and trust.

She stated that Viet Nam had learnt from disputes related to trademarks in foreign countries. She added that GI registration in Europe was necessary in helping enterprises be active in protecting their products in case of disputes.

GI registration report revealed that 14 agricultural trademarks beyond EU region have been granted GI registration including Viet Nam's Phu Quoc Fish Sauce.

Participants at the workshop were told that according to a survey on 16,000 consumers from 1996 to 1999, 43 per cent of European consumers or more than 210 million people were ready to pay an additional 10 per cent for GI products and 8 per cent of consumers were ready to pay 20 per cent, while 3 per cent of consumers were ready to pay 30 per cent.

Director General Tran Trung Thuc, head of the Vietnamese European Free Trade Agreement (EFTA) negotiating team, agreed, adding that the open market for other countries would not only reduce and remove tariffs but also property right negotiations, which would create favourable conditions for Vietnamese agricultural and seafood products to enhance exports to European countries in general and EFTA countries in particular.

"Goods standards in EU is high. If Vietnamese goods could ensure the demands, they could have opportunities to reach the world market," Thuc stated.

EFTA includes the four countries of Switzerland, Norway, Ireland and Licktenstein. FTA between Viet Nam and EFTA has undergone seven negotiations.

Experts at the workshop also agreed that signing with EFTA would be a useful tool for FTA between Viet Nam and EU. In addition, it would consolidate legal foundation for economic cooperation as well as access to market for both Vietnamese and European enterprises.

It was of significance that the current taxes on Vietnamese agricultural and food products exported to EFTA had been at a high level with an average rate of 19 per cent.

However, the signing could help Viet Nam sharply increase its exports of industrial, agricultural and food products to the market, as taxes in the block would be reduced to zero.

The reason was that Vietnamese enterprises had paid attention to exports but not to building trade mark.

In addition, the high cost of GI registration had been a barrier for businesses in deciding whether to register, they said.

Supporting industries to be developed

Vietnamese and foreign entrepreneurs discussed ways to develop the country's support industries at a forum in HCM City last week.

Nguyen Van Tuan, deputy director of the Investment and Trade Promotion Centre (ITPC) of HCM City, said support industries have much room to develop since they are in their infancy.

HCM City considers their development one of its key tasks in the upcoming time, he said.

Hirotaka Yasusumi, managing director of the Japan External Trade Organisation (JETRO)'s HCM City office, said "the investment by Japanese companies in Viet Nam is still full of vigour and vim", accounting for 26 per cent of total foreign investment last year, but the main problem for Japanese firms is the difficulty in procuring parts.

According to a JETRO survey, local procurement of industrial materials and sub-components by Japanese companies in Viet Nam is only 32 per cent, compared to 64 per cent in China and 53 per cent in Thailand, he said citing a few examples.

Bui Quang Hai, deputy chairman of the HCM City Association of Mechanical Engineering, said the country's exports of electronic products, computers, and telephones have surged in recent years, but import of components for them has increased sharply too.

Many firms admit that their production depends too much on import of inputs, he said.

With multinationals following an outsourcing strategy based on the China plus 1 (Thailand, Indonesia, Viet Nam) model, Viet Nam should focus on improving the competitiveness of its mechanical engineering industry to take part further in the global supply chain.

Japan has promised support for strengthening Viet Nam's supporting industries, he pointed out.

Yasusumi said: "We are now working on a new scheme in which private companies and government departments co-operate to work for the development of support industries.

"We are aiming to identify and satisfy companies' potential needs through business matching events, seminars, and personnel training to make a proposal to the government for policies for support industries.

"In order not to fall into the middle-income trap Viet Nam needs technical innovation, and so we promote technology transfer to Vietnamese companies by furthering human resource development and creating a close relationship between Japanese and Vietnamese companies."

Duangdej Yuaikwamdee, deputy managing director of Thai-owned Reed Tradex Co Ltd, said Viet Nam is a highly attractive investment destination for international manufacturers including those in support industries.

Finding the right partners to do business with would also help Viet Nam's industries become strong and profitable in the long run, he said.

Yasusumi said since most Vietnamese companies involved in the supporting industries are small and medium sized, they need Government support in terms of personnel training and funding.

The forum was organised by the ITPC, JETRO, and Reed Tradex.

SOEs make good move towards capital withdrawal

Total capital to be withdrawn from non-core businesses at state-owned enterprises (SOEs) by the end of July might be higher than projected. This statement was made by the Department of Entrepreneurial Finance under the Ministry of Finance quoted by Viet Nam Economic Times.

Next month, the finance ministry will issue a decision regulating the capital withdrawal to accelerate the process.

In the meantime, the department has observed positive moves from enterprises. The Electricity of Viet Nam (EVN) and the Vinacomin Finance Company have proposed detailed plans to withdraw capital from An Binh Bank and VP Bank, respectively.

The Ministry of Construction has hastened the capital withdrawal at Song Da Corporation and Housing and Urban Development Corporation.

Deputy Director of the Department of Entrepreneurial Finance Dang Quyet Tien stated that the ministry would instruct enterprises to carry out equitisation plans once the withdrawal process was completed.

Enterprises are supervised to ensure that they accelerate the process without causing loss.

According to Resolution No 15/NQ-CP of March 6 this year, enterprises were asked to speed up equitisation and divestment of state capital. The enterprises may sell stakes in non-core businesses at below the face value, which will be presented to the prime minister for approval.

Experts revealed that the sale of stakes below the face value, in fact, did not conflict with the market principle as the investments were inefficient. The important issue was ensuring transparency of planning, auctions and prices to the buyers.

Statistics from the Steering Committee on Corporate Renovation and Development revealed that SOEs have managed to withdraw around VND4.164 trillion (US$198.28 million) in the end of April, from their non-core business, comprising 19 per cent of the total non-core investments.

High inventories weigh on steel company profits

Only four out of the 15 steel companies listed on exchanges reported growth in profits in the first quarter this year, while the rest suffered losses or declining profits.

The statistics of Vietstock.vn showed that steel companies were in trouble.

According to Phan Dung Khanh, investment consultancy director of Maybank Kim Eng Securities, high inventories and difficulties in sales were the major problems that the steel companies encountered.

Four companies with growing profits were the Hoa Phat Group (HPG), the Steel Structure Manufacture Joint Stock Company (SSM), the Viet Nam Germany Steel Pipe Joint Stock Company (VGS) and the Dai Thien Loc Corporation (DTL).

Meanwhile, a giant in steel production, the Hoa Sen Group (HSG) reported a two-thirds fall in profits year over year in the first quarter of this year, totalling just VND68 billion or $3.2 million.

The Tien Len Corporation (TLH), Viet Nam–Italy Steel (VIS), the Nam Kim Group (NKG) and the Dana Y Steel Company (DNY) also witnessed declining profits in the first three months.

Worse, the Nam Vang Corporation, listed on the Ha Noi Exchange as NVC, incurred losses of more than VND13 billion or $619,000 in the first quarter and also in the nine consecutive months from the last quarter of 2011.

The aggregated losses of the Nam Vang Corporation as of the end of March reached VND364 billion or $17.3 million. The stock was compulsorily delisted from the exchange on Monday as it has been reporting losses for three consecutive years.

The HCM City-listed Huu Lien A Chau (HLC) also posted a VND152 billion or $7.2 million loss in the first quarter this year. The other loss-making firms included Bac Viet Steel Jsc. (BVG), Pomina Steel Company (POM) and Dong Nai Roofsheet and Construction Material Jsc. (DCT), Vietstock's statistics showed.

The causes for the declining profits were varied, ranging from high depreciation, increasing input costs, soaring transportation costs to interest burdens, companies said.

The steel production sector faced difficulties together with a sluggish property market. Although the construction market was seen recovering in recent months, the high steel inventories remained a burden, which Vietstock estimated to be worth VND20.2 trillion or $962 million as of the end of March.

Suzuki dismay at backdated $1.4m tax bill

Customs authorities still insist on Suzuki Vietnam paying a recalculated tax bill.

Japan-backed Suzuki Vietnam has continued to reject customs demands that the firm pay higher taxes on several shipments of motorbike components the company had imported for motorbike assembly in Vietnam.

Dong Nai provincial Customs Department presented the motorbike manufacturer with a recalculated tax bill that disputed 24 tax declarations submitted by Suzuki Vietnam Company (Visuco) in 2012 involving the import of components for the assembly of Suzuki GZ150, UA125 and EN125 motorbike models in Vietnam.

Under a customs decision released in November 2013, Visuco would be liable to pay VND30.8 billion ($1.4 million).

The customs department argued that the components Visuco had imported for assembly in Vietnam did not meet the breakdown level as regulated in Ministry of Finance’s Circular 49/2010/TT-BTC and Circular 194/2010/TT-BTC.

The Chinese component supplier of Visuco also noted that the components have been designated as CKD form.

After citing a series of existing regulations, the customs department reached the conclusion that Visuco’s import components fell under CKD form for assembling Suzuki GA150-A, EN125-A FI and UA125T FI motorbike models and could be classified as completed goods. The company currently only buys minor components such as buffers, bolts, screws and handles for their assembly plant in Vietnam.

“Therefore, the company needs to pay import duty as applied to CKD components and not those levied on import components that the company previously enjoyed,” a customs report concluded.

In fact, the import duty levied on motorbike import components meeting breakdown levels averages between just 10-15 per cent, whereas the import duty levied on component sets under CKD form is at least 45 per cent if the component sets satisfy C/O ASEAN form D requirements. If these criteria are not met the import taxes could increase to as high as 75 per cent.

Visuco has obviously objected to paying additional taxes of $1.4 million and said the difference of levying tax codes and setting respective import duties was due to lack of clear guidance on import duties related to imported motorbike components.

“The regulations on breakdown levels in circulars 49 and 194 have commonly applied to machinery of all kinds whereas motorbikes and auto components have specific features. For auto components, the Ministry of Science and Technology has enacted concrete regulations guiding and classifying the breakdown level of import components for assembling in Vietnam, meanwhile motorbike component imports still lack such concrete regulations,” said Visuco managing director Masami Haga.

At present, Visuco is one of five foreign-invested motorbike businesses in Vietnam. However, its sales volume was reportedly the lowest among them. Last year, the company only sold 50,500 motorbike units, a sixth of its annual production capacity. Sales volumes for other foreign-invested firms last year included Italy-backed Piaggio Vietnam selling 56,200 units, Taiwan’s SYM with 82,000 units, Yamaha Vietnam with 731,000 units and Honda Vietnam 1.87 million units.

IPI rises 5.9 % in May

The industrial production index (IPI) in May increased by 5.9% against the same period last year, according to the General Statistics Office (GSO).

In the January-May period, industrial output saw a year-on-year increase of 5.6%.

The processing and manufacturing sector reported a positive growth of 7.5% year on year; contributing 5.3% of the general growth; the production and distribution of the electricity sector jumped by 10.6%; the water supply, sewage and waste management sector rose by 6.1%.

However, the mining sector's growth fell by 2.1% year on year.  

The GSO also reported that Hai Phong took the lead with 11.7% growth rate in the first five months; followed by Quang Ngai (11.6%); Quang Nam (11.2%); and Da Nang (10.1%). In the two biggest cities HCMC and Ha Noi, IPI increased by 5.2% and 3.8%, respectively.

In April, the sale of the processing and manufacturing sector picked up 3.7% against the previous month and posted a year-on-year increase of 16.3%.

As of May 1, 2014, inventory level of the processing and manufacturing went up 12.6% against the same period last year. Meanwhile, the level of garments and textiles fell by 1.4%./.

Deutsche Bank Vietnam has new CCO

Deutsche Bank today announced the appointment of Jens Ruebbert as chief country officer (CCO) and head of Global Transaction Banking (GTB), Deutsche Bank Vietnam, effective immediately.

In his capacity as CCO, Vietnam, Ruebbert will report to Gunit Chadha and Alan Cloete, co-chief executive officers, Asia Pacific, and members of the Group Executive Committee, Deutsche Bank AG.

As head of GTB in Vietnam, he reports to Lisa Robins, head of Global Transaction Banking, Asia Pacific, Deutsche Bank AG.

Announcing the appointment, Gunit Chadha said, “Jens's appointment clearly underlines our commitment to developing a successful franchise in Vietnam which is a growth market for both our clients and the Bank. Jens brings significant global and client management experience to this important role.”

Lisa Robins added, "Our Transaction Banking business has been growing across the region at double-digit rates and Vietnam has been an important contributor to that development. Jens's focus will be to bring his extensive experience and that of our team in Vietnam to serve the needs of both global and local clients and to expand Deutsche Bank's presence in the market."

Ruebbert has held various senior positions in Deutsche Bank during his career.

Most recently he was managing director and chief operating officer, Deutsche Bank (China) Co., Ltd.

He has extensive senior management experience across functions and geographies having worked in Germany, Hong Kong, Singapore, Turkey and China.

Ruebbert is a graduate business economist and holds a graduate diploma in Business Administration from the Academy of Economy and Administration, Bochum & Leipzig, Germany.

UK, RoK support Ho Chi Minh City urban railway projects

The United Kingdom (UK) and the Republic of Korea (RoK) sought to push bilateral cooperation in developing the urban railway network for Ho Chi Minh City at a conference in the city on May 27.

The UK General Consulate and the Korean Railway Research Institute (KRRI) jointly organised the function, which introduced the latest technology and financial issues, as well as means of investment and construction of the network, to participants.

The event also highlighted the cooperation achievements between the two foreign countries in the field.

The municipal Urban Railway Management Board presented a brief introduction on the city’s urban railway system planning and detailed its fifth metro line which will link the Sai Gon Bridge and the new Can Giuoc bus station.

The governments of the UK and RoK have been called on to inject money into the project which, once completed, will be able to handle about 526,000 passengers every day.

Project offers lower rate loans to businesses in Hanoi

Businesses in the capital can access loans with interest rates of 7–8 percent per year under a programme to remove difficulties for businesses.

The programme, initiated by the Hanoi People's Committee, connects banks and businesses in the capital and is aimed to have commercial banks support credit for businesses at reasonable interest rates.

Under the programme, interest rates for short-term loans will be 7–8 percent compared with the market average rate of 9–10 percent. The rates for medium- and long-term loans will be 9–10.5 percent compared with the market average rate of 10.5–12 percent.

The programme gives priority to high-tech and supporting industries as well as small- and medium-sized firms.

According to the Hanoi Statistics Office, credit in the capital in the first 5 months this year increased by 0.3 percent against the same period last year while deposits rose 2.4 percent.

Outstanding loans in May alone were estimated at nearly 948 trillion VND (44 billion USD), up 0.8 percent from last month and up 0.3 percent from December 2013. Additionally, short-term loans increased by 0.6 percent from last month and 1.4 percent from December 2013, while medium- to long-term loans increased by 1.2 percent from last month and 3.9 percent from December 2013.

However, the capital's credit growth rate was much slower than that of the whole banking industry. Data from the State Bank of Vietnam revealed that credit growth in the system at the end of April had reached 1 percent.

Total deposits of Hanoi-based credit institutions in May reached 1,071 trillion VND (49.81 billion USD), up 1 percent from last month and 2.4 percent from December 2013.

Dong Nai firms recover after riot damage

Almost all the enterprises affected by the recent social disturbances in the southern province of Dong Nai have resumed their normal operation, according to Mai Van Nhon, deputy head of the provincial Industrial Zones Authority (DIZA).

According to the authority, 204 local enterprises were affected by acts committed by some individuals, who took advantage of the May 13-14 protests against China ’s illegal placement of its oil rig in Vietnam ’s waters to damage and loot foreign factories. Of the total, 198 firms are located in industrial parks.

As of May 26, 203 firms had restored their production, while factory and equipment of the last company are being repaired so that it can resume its operations soon, said Nhon.

He said that immediately after the incident, the authority coordinated with the firms’ owners to assess the damage caused to the enterprises and provide proper support.

Johnson Wood Vietnam, a Taiwanese company in Tam Phuoc industrial park, was one of the firms affected by the incident that has resumed its work.

According to Pham Xuan Nam, an administrative officer of the company, 2,500 workers have returned to work. The company is also intensifying operations to make up for the production loss incurred due to the disruption, he added.

Shen Hsin Yuan, Vice Director of Perfect Vision company, another Taiwanese firm in Long Thanh industrial park, said his firm has also recovered its production soon after the incident. He said his confidence in the Dong Nai investment environment remains unchanged, expressing his hope that the regrettable case will not happen again.

Meanwhile, Imamura Tomofumi, Chairman of the Japanese Business Association in Dong Nai, said 32 affected Japanese enterprises have recommenced their work. He said he hopes the local government will continue supporting enterprises.

So far, the local customs department has sent the necessary guidelines to enterprises, especially those that lost their documents in the disorder, so that they can receive support in the work, according to Le Van Danh, head of the provincial Customs Department.

Meanwhile, Cao Ngoc Son, deputy head of the Communications and Support Office of the provincial Taxation Department, said the department has sent teams to the sites to support enterprises.

The department is prioritising tax refunds for affected firms, he added.-

Anniversary of North-South power transmission line marked

A ceremony marking the 20th anniversary of Circuit 1 of the North-South 500kV power transmission line was held in Hanoi on May 27.

Addressing the event, Deputy Prime Minister Hoang Trung Hai said the two-year construction of the first extra-high voltage line was one of the finest achievements of Vietnam’s electricity sector, adding momentum to the ongoing development of the national system.

Hai stressed the line had basically tackled a serious shortage of electricity for the central and southern regions in the early 1990s, because power plants in the south met only 89.73 percent of the demand for energy then.

The line’s Circuit 1, put into operation in 1994, has contributed greatly to national socio-economic development. It has helped raise the country’s GDP growth to 9.5 percent in 1995 from 5.1 percent in 1990, while industrial production saw annual rises of 12-14 percent in the five-year period.

Mentioning the electricity sector’s possible future challenges, Hai requested the Electricity of Vietnam (EVN) to heighten the competitive edge of the domestic electricity market and attract more investment to expanding the national grid.

Under the plan, an annual capital of 17 trillion VND (799 million USD) will be poured into developing the system in the 2014-2020 period, he noted, suggesting the EVN continue to learn from foreign partners’ experience in constructing and developing a grid at a low cost.

Circuit 1, together with Circuit 2 that was put into operation in 2005, is a backbone of the national power transmission system and helps improve the quality and supply of electricity, EVN Chairman Hoang Quoc Vuong said.

Since their operation, both circuits have transmitted more than 12 billion kWh per year.

On May 5, the Pleiku-My Phuoc- Cau Bong 550kV transmission line, considered as Circuit 3 of the North-South 500kV extra-high voltage line, was connected to the national power grid in order to ensure the electricity supply in this year’s dry season and the southern region’s demand for the power in the years to come.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR

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