Viettel, Microsoft sign IT deal

Military Telecom Group (Viettel) and Microsoft recently signed a memorandum of understanding (MoU) to provide infrastructure and information technology services to Vietnam governmental agencies.

Viettel announced on October 2 that the two sides will cooperate in the platform of computing including Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS) which meet Vietnamese agencies’ demand.

Viettel's Deputy General Director Tong Viet Trung said the contract will be implemented over the next two years.

Viettel and Microsoft will also provide other infrastructure services on the platform of cloud computing for Vietnamese costumers, he added.

Microsoft vice president Brad Smith said that her group will invite leading experts from Singapore and the US to join the programme, aimed at helping Vietnam become a successful IT and communications model in the world.

Spanish businesses look towards Vietnamese market

Leaders of nine businesses in the Spanish Region of Basque Country are visiting Vietnam and Singapore from October 6-10 to seek business opportunities and boost their exports of machinery and marble, according to Bilbao City’s Chamber of Commerce.

With a population of 91 million, Vietnam is attractive to the Spanish region’s enterprises due to its dynamic economy, GDP growth rate and political and social stability, a press release issued by the chamber stated.

After recording a trade deficit for two years in a row, the Basque Country enjoyed a trade surplus with Vietnam in 2013, with export revenue reaching 20.2 million EUR and imports valued at 14 million EUR.

However, during the first seven months of this year, the region generated 8.3 million EUR in revenue from selling Spanish products to Vietnam, whilst spending 9 million EUR on Vietnamese commodities.

ODA disbursements climb 10% in nine months

The cumulative total ODA disbursements during the first nine months of the year jumped 10% over last year’s corresponding period to US$4.105 billion.

According to the Ministry of Planning and Investment (MPI), total ODA capital sources and preferential loans reached US$3.519 billion in the nine month period, of which US$3.459 billion were ODA loans and US$60 million was non-refundable aid.

MPI Minister Nguyen Van Hieu said the disbursement of ODA and preferential loans have shown positive changes, especially for projects funded by the Japan International Cooperation Agency (JICA) and World Bank.

The MPI said the positive results are attributable to drastic measures to facilitate giving effect to ODA funded projects. In addition, the MPI has also co-ordinated with the World Bank (WB) and Asian Development Bank (ADB) to organise meetings to monitor the slow disbursement of projects and worked with Japan to prevent interruptions in the implementation of transport projects.

However, ODA disbursement has not made breakthroughs due to uneven disbursement rate and focused on projects on transport, power energy and adaption to climate change.

In the nine month period, Japan funded a US$147.60 million programme to support economic management and improve competitive capacity, a US$358.11 million project to build Thai Binh No 1 power plant and a transmission line. In addition, the WB also provided  US$251.7 million to a road management project.

Relevant agencies are making efforts to remove difficulties in site clearance, counterpart capital, and project quality to speed up the progress of the disbursement and use of ODA effectively.

Can Tho elevates image in France

The Can Tho City People’s Committee met with the Business Association of High Quality Vietnamese Products on October 2 to promote all around cooperation with France and seek to enlarge overseas markets for local businesses.

At the meeting, Vu Kim Hanh, President of the Business Association of High Quality Vietnamese Products said small and medium sized businesses suffer from competitive disadvantages largely due to shortage of working capital.

The lack of working capital leads directly to shortage of funds to maintain adequate inventories, lack of funds to invest in more modernised equipment and lack of funds to properly market businesses products to both domestic and foreign markets.

She emphasised the need for local businesses to expand to foreign markets, especially the French market in which the association has worked tirelessly to boost trade exchange.

Through the association, two Vietnamese brands banh tet (cylindric glutinous rice cake) and banh xeo (Vietnamese crepe) have gained in popularity among French consumers, she said.

Dr Antoine Tran Anh Tuan, Head of the Sustainable & Innovative International Tourism (SINTOUR) programme in turn said Vietnamese tourism, especially in the Mekong River Delta region has great potential for cultivation in France.

The SINTOUR programme is designing training courses to improve sales skills for Vietnamese businesses and has selected several provinces in France to form strategic alliances with Can Tho.

The association is also striving to develop community tourism and promote Vietnamese culinary arts to French friends in order to stimulate French tourism to the region.

Truong Quang Hoai Nam, Vice Chairman of Can Tho’s People’s Committee expressed his confidence that trade promotion activities will bear out and elevate the image of Vietnamese brands in French markets.

Vietnam a key production base for RoK firms

Giant Korean companies like Samsung, LG, Hyundai, Doosan, Posco have turned Vietnam into their global production base by ceaselessly expanding investment.

It has contributed to promote Vietnam's industrialization processing and exporting growth.

Since beginning production in April 2009 Samsung Corporation has increased its investment from the original US$670 million to US$2.5 billion now. Samsung Electronics Vietnam (SEV) has also contributed greatly to the development of the country's electronics sector and exports.

Last year, for instance, it exported phones and parts worth US$23.9 billion, or 18 per cent of all of Viet Nam's exports. The figure is expected to increase to US$30 billion this year when its Thai Nguyen Province plant reaches full production.

Samsung wants to make Vietnam a global production base.

It now has five phone and electronic components production factories, and plans to build a US$1.4 billion plant in HCM City to produce electronic appliances, and others in Dong Nai, Ha Tinh, and Khanh Hoa for its infrastructure, energy and ship building businesses.

Samsung CE Complex Electronic Co., to come up at the Sai Gon Hi-tech Park in HCM City, received the licence on October 1 from Nguyen Phu Trong, General Secretary of the Communist Party, who is on an ongoing visit to the Republic of Korea.

The factory will produce 3D smart TVs, refrigerators, air- conditioners, and washing machines starting in the second quarter of 2016. It will also have an R&D centre.

After successfully producing in Vietnam, LG decided last year to expand with an electronic appliances factory in Hai Phong to add to its existing ones in the northern port city and in Hung Yen Province.

A few weeks ago it signed an MoU with the Kinh Bac Group to lease more land at the Trang Due Industrial Park in Hai Phong to expand production, making Vietnam a key base.

In November Posco Special Steel's US$600 million factory will go on stream and annually produce one million tonnes of ingots.

Kumho Asiana plans to expand its Kumho Tires plant in Binh Duong at a cost of US$300 million.

Doosan Vina also plans to expand its existing operations at the Dung Quat Economic Zone, Quang Ngai.

According to data from the Foreign Investment Agency, in the year-to-date Korea has invested US$3.35 billion to become the biggest investor in Vietnam.

Park Chang Eun, deputy director of Korea Trade and Investment Promotion Agency, said the investments would continue to increase because many large Korean corporations are considering expansion plans in Vietnam, which has become an important investment destination for them.

Shinsegae, one of Korea's leading retail groups, also wants to do business in Vietnam while one month ago, Lotte inaugurated its Lotte Center, the second highest building in Hanoi.

HCM City calls for investment in high-tech agriculture sector

New policies that would attract investment in the hi-tech agriculture sector would create a breakthrough in production and consumption of farm produce, the Ho Chi Minh City Department of Agriculture and Rural Development has recommended.

Although the city has paid attention to enhancing advanced technology in agricultural production in the past, the value of agricultural production has grown at a modest rate of about 5 percent per year.

The average revenue per hectare under agricultural production in the city is about 280 million VND (13,213 USD) per year.

If maintaining such a growth rate, the sector would reach the production value of 800 million VND (37,753 USD) per hectare by 2020 as set in the master plan for agricultural restructuring, the department said.

Le Minh Dung, Deputy Director of the department, said the city was calling for enterprises to invest in the hi-tech agricultural sector and develop models for incubating businesses to reach the target.

Besides better policies, the city needed to focus more on solving financial difficulties faced by enterprises, he said.

Many firms were not interested in investing in the hi-tech agricultural sector, saying that it requires a large amount of capital, but has low economic efficiency.

Credit institutions were not interested in providing loans to enterprises because of the low profits.

Le Thanh Nguyen, Director of Sai Gon Hi-tech Park Incubation Centre, said the centre had worked with many investment funds, but they were only interested in real estate and information and technology sectors.

The agricultural sector had low capital turnover and high risks, he added.

The Government had no investment fund designed to support a business incubation programme, while in other countries in the region such as Malaysia and Singapore, the Government set aside large investment funds for this kind of activity.

The hi-tech agricultural sector would expand more rapidly if the existing barriers were removed, he said.

Myanmar, Vietnam promote banking cooperation

The Small and Medium Industrial Development Bank (SMIDB) of Myanmar and the Bank for Investment and Development of Vietnam (BIDV) on October 2 committed to boost technical cooperation in banking operations.

Under a technical assistance programme of BIDV, the two banks exchanged delegations in June and September this year, focusing on the application of Corebanking system for the SMIDB’s banking products and services.

The exchange aimed to modernise the information technology (IT) systems and SMIDB banking activities.

BIDV offered an interest-free loan to finance the US$3-4 million cost of the Corebanking software system and to upgrade SMIDB banking operations.

Additionally, both banks have agreed to exchange IT staff in order to develop human resources and transfer technology.

US considers Vietnam a promising partner in Asia Pacific

The US views Vietnam as a promising partner in the Asia Pacific Region, according to policymakers for Southeast Asian Studies in a report on US-Vietnam relations released by the Centre for Strategic & International Studies (CSIS) on October 2.

According to the CSIS report, since the normalisation of diplomatic ties in 1995, US-Vietnam relations have taken giant steps forward in nearly every area from politics and the economy to military and cultural ties.

Former President Bill Clinton’s historic visit in 2000 and State President Truong Tan Sang’s visit to the US  in 2013 were important milestones signalling growth in the strategic ties between the two countries which ultimately manifested in the establishment of a comprehensive equal partnership.

The report themed “A new era in US-Vietnam relations: Deepening ties two decades after normalization” focuses on three key pillars of the relationship: political and security cooperation, trade and investment relations and people-to-people ties including education, health and environmental cooperation.

In a quickly changing and dynamic region, the two countries share increasingly common geopolitical, security and economic interests, the report asserts.

Scot Marciel, Principal Deputy Assistant Secretary for East Asian and Pacific Affairs recently affirmed the US has co-ordinated well with Vietnam at ASEAN, the East Asia Summit (EAS) and APEC. Vietnam is a good partner in promoting peace, security, stability and cooperation in the region, he said.

According to CSIS, both Washington and Hanoi have a vested interest in upholding the freedom of navigation and commerce in the East Sea, preventing the use of force in territorial disputes and ensuring the peaceful resolution of maritime conflicts.

US policy makers say that if the US wants to exert influence and power in the Asia-Pacific region, remaining strategically engaged with a partner like Vietnam is crucial to shaping the strategic interests of the US in Southeast Asian region.

Murray Hiebert, a co-author of the report said several high-level US officials have arrived and are expected to come to Vietnam in the time ahead including US Secretary of State John Kerry, US Secretary of Commerce Penny Pritzker and General Martin E. Dempsey Chairman of the Joint Chiefs of Staff.

General Dempsey’s upcoming visit to Vietnam is of great significance as he seldom pays a working visit abroad and the announcement of the visit in an ominous signal. Defence Secretary Chuck Hagel and First Lady Michelle Obama are also expected to visit Vietnam.

CSIS noted the strength of bilateral economic relations has been both the foundation and the engine of the US-Vietnam partnership.

Twenty years after the two countries signed the first bilateral trade agreement, two-way trade reached US$25 billion in 2013. The US is Vietnam’s largest export market and currently ranks as its seventh largest foreign investor. Trade and economic ties are optimistically expected to grow further with the conclusion of the Trans Pacific Partnership (TPP) in sight.

The CSIS report emphasised political, security and defence cooperation have emerged as another successful area of cooperation with the frequent exchange of high-level visits.

The US and Vietnam now hold two annual vice ministerial level dialogues to find ways to boost defence and security cooperation. Officials of both nations meet regularly to discuss human rights issues.

CSIS experts said education has emerged as the most crucial link between the two peoples. Vietnam is now the largest country in Southeast Asia for sending students to the US and the fifth largest in the Asia-Pacific region as a whole.

Both nations have been working together to address the legacy of the Vietnam War, especially the impact of Agent Orange (AO) and the removal of unexploded ordnance remaining on Vietnamese soil.

Ernest Bower, the CSIS Sumitro Chair for Southeast Asia Studies was sanguine about the prospects to narrow differences between the two nations. He said good partners often have different views, stressing the US also has a different viewpoint on human rights. The report also proposed some key recommendations to advance trade, economic and investment relations.

CSIS experts said the US should make a commitment for President Barack Obama to visit Vietnam in 2015 on the occasion of 20th anniversary of normalisation of ties.

The US Government is expected to relax and eventually remove the ban on lethal weapons sales to Vietnam, expand the scope of activities during the annual US-Vietnam naval engagement activity to include joint humanitarian assistance and disaster relief or search and rescue exercises.

Both sides are speeding up efforts to conclude TPP negotiations soon, strengthen government to government dialogues on trade and investment issues and ease trade restrictions and protectionist measures. In addition, the US should work to lift Vietnam’s designation as a nonmarket economy in the spirit of the comprehensive partnership announced by the two countries’ leaders in 2013.

Bangkok Bank sees opportunities in Vietnam

Vietnam’s rising numbers of middle-income people and the Trans-Pacific Partnership (TPP) agreement, a hoped-for magnet for foreign direct investment (FDI) and export driver, will provide opportunities for Bangkok Bank’s operations in the country, a local newspaper reported.

The bank expects its lending to see double-digit growth from rising FDI, stabilisation of the local currency and higher incomes, the English-language newspaper The Nation quoted Tharabodee Serng-Adichaiwit, senior Vice President and General Manager of Bangkok Bank's Vietnamese operations, as saying.

Tharabodee said Vietnam’s gross domestic product is expected to expand by 5-6% this year thanks to export growth of 20-30%, valued at around US$13 billion a month.

In addition, participating in the TPP negotiations would help strengthen the Vietnamese economy in the long run, especially exports of garments and textile products, as Vietnam benefits from trade with the other 11 member countries, he affirmed.

With the middle-income people number in Vietnam is expected to reach 20-30 million by 2020, many Thai conglomerates have acquired businesses in the country to tap the high purchasing power in the near future.

He noted that Thailand's Berli Jucker had acquired Metro Cash & Carry Vietnam and Phu Thai Group Joint Stock Company, the former operator of Family Marts in Vietnam, to establish B's Mart convenience stores.

In the first eight months of this year, new loans by Bangkok Bank in Vietnam expanded by 10%, he said, adding the bank’s credits offered to foreign investors account for 90% of its new loans in the country.

Additionally, it will increase the focus on local small and medium-sized enterprises, accounting for 20% of Bangkok Bank's loan portfolio in Vietnam, while Thai companies and multinationals account for 40% each.

Investment opportunities introduced to Panama

The Vietnam Embassy in Panama recently organized a dialogue with Panama businesses to introduce investment opportunities in Vietnam.

The event attracted the participation of around 30 Panama business representatives who expressed admiration for Vietnam’s huge developmental achievements and showed a keen interest in such fields as health care, agriculture, industry, and tourism.

Ambassador Nguyen An Duy highlighted Vietnam’s socio-economic achievements and introduced the country’s policy on investment attraction. He also praised the fruitful relationship on various areas between Vietnam and Panama in recent years.

Representatives from the Panama business community said they had high confidence in Vietnam’s business climate and investment incentives, particularly in the tourism sector.

They said they plan to visit Vietnam in the near future to study the market and seek investment opportunities in agriculture and rural development.

The attendees had a chance to taste Trung Nguyen coffee – a famous brand name, and watch short movies on Vietnam’s people and its landscapes.

Hanoi hosts Asian-Pacific Tax Forum

The 11 th Asian-Pacific Tax Forum is being held in Hanoi from October 1-3, providing a platform for regional policy makers and economists to share their experiences in the field of taxation.

Speaking at the forum, Deputy Minister of Finance Truong Chi Trung said Vietnam ’s taxation system has improved significantly in recent years thanks to major tax policy reforms implemented since the early 1990s.

He affirmed that the reform will continue to improve the investment climate and attract foreign businesses.

The Deputy Minister introduced Vietnam ’s national strategy on taxation reform for the 2011-2020 period, which aims to create a comprehensive, fair and effective tax policy system, that conforms to market economy regulations and international practices.

Management efforts will focus on transparent and systematic administrative tax procedures; competent staff; and the application of information technology in line with global trends.

The forum is being organised by the Ministry of Finance and the International Tax and Investment Centre (ITIC).

Swiss-funded project offers help to SMEs

The development of regional export and production plans can help Viet Nam's small and medium scale enterprises (SMEs) become more competitive, a workshop held in Ha Noi heard yesterday.

The workshop was organised by the Department of Trade Promotion under the Ministry of Industry and Trade to discuss implementation of a Swiss-funded trade promotion project.

The three-year (2013-2016) project, using non-refundable official development assistance (ODA) provided by the Swiss Government, is being carried out in the northern city of Hai Phong, the central city of Da Nang and the Cuu Long (Mekong) Delta city of Can Tho.

Miroslav Delaporte, Chief Representative of the Swiss State Secretariat for Economic Affairs (SECO) in Viet Nam, said the project helped improve the skills and capacities of trade promotion agencies and trade organisations in the three localities.

It would help develop production plans for selected products and sectors chosen for their export potential based on in-depth assessments, he said.

The workshop also discussed measures to enhance the export capacity of local enterprises.

Regional export plans and detailed action plans would be developed for localities in the North, Central and Southwest from 2015 onwards to promote the production of goods with high export potential, the workshop heard.

Deputy Minister of Industry and Trade Nguyen Cam Tu informed the workshop that Viet Nam's export turnover in 2013 reached US$264.26 billion, up 15.7 per cent over 2012.

Since 2011, the country's export turnover had increased by $20 billion each year, he said.

Viet Nam's exports had increased continuously, especially the shipments of manufactured and processed goods. In general, the export of raw materials had decreased and that of value added goods had increased, Tu said.

The Government had contributed to expanding the range of export goods by negotiating free trade agreements with the nation's trade partners, he added.

Decree regulates credit rating firm operations

The Decree 88/2014/ND-CP, issued last week to regulate the operations of credit rating firms, does not allow the use of State capital to establish credit rating firms.

The decree says that organisations and individuals are not allowed to use State capital for setting up credit rating companies.

According to the decree, credit rating firms must have a legal capital of VND15 billion (US$707,500), excluding the legal capital of other businesses that credit rating firms are allowed to operate.

The contribution of capital for the establishment of credit rating firms must be in line with the Law on Enterprises, the decree says, adding that organisations and individuals who own five per cent of a credit rating firm's charter capital are not allowed to contribute capital or hold shares of other credit rating firms.

In addition, credit rating firms are not allowed to give capital to other credit rating firms.

Regarding the operational fields of these firms, the decree says that credit rating firms are not allowed to operate in accounting, auditing, securities and banking sectors.

The decree aims to ensure the independence, objectiveness, honesty, transparency and compliance with established regulations of the credit rating firms.

The decree will come into effect on November 15.

Dong Hoi airport seeks more domestic, international flights

The central province of Quang Binh said there should be more domestic and international flights to and from Dong Hoi airport in order to meet increased demand from tourists.

The provincial People's Committee proposed more flights connecting Ha Noi, Ho Chi Minh City and Dong Hoi, in addition to a new route linking Dong Hoi and Taiwan.

According to the committee, Dong Hoi airport's infrastructure was now capable of servicing planes around the clock.

Quang Binh also called on low-cost airlines to make use of the airport.

With more than 116km of coastline and numerous natural attractions, including a complex of over 300 caves, Quang Binh has seen strong development in tourism, the locality's driving force for economic development.

During the first seven months of this year, the province welcomed over 2.4 million tourists, almost double the number of visitors during the same period last year.

HDBank sets up desk to support Japanese firms in Viet Nam

The Housing Development Commercial Joint Stock Bank (HDBank) and the Japan-based Hyakugo Bank Ltd established a Japan desk at the former yesterday (29th) to support Japanese companies in Viet Nam.

Set up at HDTower on Nguyen Thi Minh Khai Street, District 1, HCM City, it will offer products and services including consultancy to Japanese firms that are operating or will operate in the country.

HDBank, established in 1989, has total assets of more than VND90 trillion (US$4.28 billion) and chartered capital of VND 8.1 trillion ($385.71 million). It has established relationship with more than 300 banks and branches in over 150 countries and territories around the world.

Hanoi sees 11.6 percent rise in nine-month exports

Hanoi’s exports in the first nine months of 2014 were estimated at over 8.18 billion USD, up 11.6 percent over the same period last year, reported the municipal Department of Industry and Trade.

Rise was seen in almost all major hard currency earners, including electronics with 53.9 percent, footwear and leather products, 45.5 percent, fossil coal, 41.5 percent, crystals and crystal items, 22.1 percent, handicraft products, 18.8 percent, and farm produce, 11.5 percent.

In September alone, local enterprises earned 939 million USD from abroad shipment, an increase of 0.4 percent. Of the figure, FDI firms contributed 453 million USD, or 48.2 percent, said the department.

Meanwhile, localities across the city enjoyed an 8.8 percent growth year on year in nine-month exports, with September’s results rising 0.5 percent month on month, it added.

The capital has set to earn nearly 15 billion USD from exports this year.

Project launched to support footwear businesses    

A project to help footwear enterprises meet product safety requirements was launched in Hanoi on September 30.

The project is jointly run by the Leather and Shoe Research Institute, the University of Northampton in the UK and the Vietnam Leather, Footwear and Handbag Association (LEFASO), and is approved by the European Union.

It aims to increase the capacity of small- and medium-sized enterprises to satisfy the technical requirements imposed on export products, and to provide advice on technical barriers to trade and the free trade agreement between Vietnam and the EU, which is expected to be signed by the end of 2014.

According to LEFASO General Secretary Phan Thi Thanh Xuan, the four-phase project focuses on the establishment of a data system on the EU’s technical requirements for footwear products.

It also collects consumer feedback and updates businesses on export market developments, she added.-

Businesses faces capital problems

The Vietnamese economy is facing three major challenges, namely low credit growth, slow pace of non-performing loan settlement, and sluggish business and production, the Government news portal quoted former Deputy Minister of Planning and Investment Cao Viet Sinh as saying.

Although credit growth rose steadily from 3.15 percent in July to 4.08 percent in August and 6.62 percent in September this year, capital has not been effectively pumped into the economy. As a result, it is hard to expect strong growth.

Meanwhile, banks’ non-performing loans tend to increase mainly due to low credit growth and slow settlement of bad debts. For instance, the ratio rose from 3.61 percent at the end of 2013 to 4.07 percent last May and even 4.17 percent in June.

So far this year, the Vietnam Asset Management Company purchased around 19,600 billion VND of bad debts compared to the preset target of 70-100 trillion VND for 2014 alone.

For business community, the former Deputy Minister said he really feels worried as the number of dissolved and suspended enterprises went up 13.8 percent, equivalent to 48,330 enterprises, against the previous year.

The number of newly-established businesses and registered capital volume have not much improved, he added.

To overcome the above challenges, the Government has tasked inferior levels to realize a series of solutions to facilitate production and business while stepping up the implementation of the Master plan to restructure the economy.

The General Statistics Office has reported that the economy expanded 5.62 percent in the first nine months of 2014.The figure, Sinh commented, goes beyond expectations.

Specifically, the GDP climbed from 5.09 percent in the first quarter to 5.42 percent and 6.19 percent in the second and third quarters, respectively, according to the statistics agency.

The index of industrial production also rose on the quarterly basis, from 5.3 percent in the first quarter to 6.9 percent in the second quarter and 7.7 percent in the July-September period.

Other positive signals include increases in both foreign direct investment inflow (reaching 8.9 billion USD, up 3.2 percent) and official development assistance (4.1 billion USD, up 10 percent compared to the same period last year).

HCMC businesses strive for on-schedule equitization

Two out of 15 enterprises in the equitization listed this year have successfully launched their Initial Public Offerings (IPO) and the remaining 13 are striving to equitize on schedule, said the Ho Chi Minh City Board of Business Management Innovation.

The two equitized companies include Saigon Cultural Products Company and Tan Hoa Water Supply Company.

The rest 13 companies are striving to complete equitization in 2014 as per instruction by the city People’s Committee, said the board deputy head Huynh Trung Lam.

Besides, another two enterprises have filed documents asking for equitization this year as they have completed all related procedures. They are Phu Tho and Thu Duc Tourist Companies.

Many FDI firms mistreat workers, says survey

One recent survey suggests that foreign direct investment (FDI) businesses in Vietnam are becoming known for treating their employees badly.

The survey was conducted by a group of researchers from Hue University of Sciences and Rosa Luxemburg Stiftung Foundation (Germany), and was released during a seminar called "The Role of Trade Unions in Protecting Laborer's Rights. The seminar was held in Hue City, on Sep. 29.

Among the complaints of the majority of these workers were, very low wages, high quotas and huge workloads, being verbally mistreated and demeaned, unsafe work environments. Some even claim that they are not allowed breaks to go to the rest-room.

Between 2005 and 2012, there were 4,380 strikes, 80% of which were at FDI businesses. One striking worker said: "The company continuously increases the workload, making it impossible to finish. There are some projects that require three people, but they only assign two. Still salaries remain the same.

Another worker said, "We barely have enough time to drink water. The items on the conveyor belt pass by so quickly, and they run them at speeds much faster than they are supposed to. Every day at work is terrifying."

FDI businesses have brought with them great benefits to the economy for the past 25 years, but it seems that the rights of workers is falling to the wayside. Moreover, many workers remain uneducated of their rights. These companies are not enthusiastic about enlightening their employees on the subject.

The researchers behind the survey had a difficult time collecting data about FDI firms, many of which were uncooperative.

It was proposed during the seminar that the state codify workers rights, make a clear and feasible plan for enforcement, promote training of officials with negotiating skills and regularly inspect FDI firm.

Hanoi leads green FDI charm offensive

Hanoi is making great strides to attract environmentally-friendly foreign direct investment projects.

Hanoi’s planning and investment authorities are gearing up procedures to attract more foreign investment in environmentally-friendly industries Photo: Le Toan

In early August 2014, Hanoi issued a new post-investment interest support programme. Throughout this year, the city plans to offer a 0.2 per cent per month loan interest to medium and long-term loans of at least one year for businesses based in Hanoi who take loans for new investment projects, expand project scope or invest in equipment and technology innovations.

The move aims to help city-based businesses to remove difficulties in production and training amid the slow economic recovery, said director of the Hanoi Municipal Authority for Planning and Investment Ngo Van Quy.

“We are scaling up efforts to attract investment from domestic and external sources,” said Quy, adding that thanks to these efforts during 2008-2013 Hanoi had lured around VND1,141 trillion ($54.3 billion) in the total investment development capital to satisfy the city’s development needs.

In fact, by end of June Hanoi was home to 2,806 on-going foreign direct investment (FDI) projects worth $21.1 billion in the total committed investment capital.

Hanoi currently stands third in terms of wooing FDI. Scores of sizable FDI projects have contributed to  spurring production, business and economic development in the city.

Growing visibility of global players like Japan’s Panasonic and Canon in the city’s industrial parks (IPs) have made a significant contribution to the local industrial production and export development.

As of June, foreign invested enterprises (FIEs) posted revenues of about $4.86 billion, up 12.3 per cent on-year. FIEs also contributed more than $2.6 billion, representing 48.6 per cent of the city’s total export value.

However, city officials admit that FDI inflows could be higher.

“There are multiple reasons why we’re still lagging behind expectations. That is partly because the world and local economy is still mired in hardship. In addition Hanoi’s administrative boundaries were extended in 2008, so many planning schemes still await approval, making it hard to attract investment,” Quy shared.

He also said low quality investment promotion activities, a lack of long-term vision and uniformity in policies governing investment and business had attributed to Hanoi’s faring well below expectations when attracting FDI.

“We may expect big turnabout in the coming period in the wake of the city’s reformed investment promotion mechanism. Detailed steps are embedded in the city’s investment promotion programme for 2014-2015 with an orientation to 2020,” Quy noted.

The programme, approved by the city’s management authorities in June, seeks to promote investment on a selective basis, targeting strategic partners, key foreign markets as well as hi-tech fields with high added value.

In the past years, priority has been granted to attracting big investors and projects which have knock-on effects to help lure other investors and partners to the city.

“We also know that bettering the investment climate is crucial to attracting investors and  there is a need to focus on facilitating project execution,” Quy added, saying that the capital demand for the city’s socio-economic development in the coming period is tremendous, so that further investment attraction was vital.

“Good quality and environmentally-friendly investment sources are our priority,” Quy underscored.

The Hanoi Municipal Authority for Planning and Investment’s statistics show that from 2011 to 2020, Hanoi needs to attract VND3,900-4,100 trillion ($180-190 billion) for an ambitious list of socio-economic development tasks.

Some $50-55 billion has been earmarked for the period from 2012-2015 alone. The city wishes to woo up to 20 per cent of this sum from FDI.

Hanoi authorities have already spent some time attempting to attract investors, including a particular focus on Japanese firms, in recent years.

“Multinationals and sizable, hi-tech projects involving technology transfers will be the number-one priority,” said Quy, adding that selecting foreign partners was also part of the city’s overall socio-economic development strategy and strategy to attract FDI particularly.

Hanoi’s investment promotion programme until 2020 also includes a list of eight projects the city plans to fund through FDI during the period. Four of them were included on a list of key national projects sourcing FDI until 2020, which was approved by the prime minister.

“These projects have detailed requirements to attract investors, so we expect Hanoi will be more appealing to the investor community in the coming period. Capable investors would help bolster the quality and efficiency of FDI flows,” Quy affirmed.

About how to realise the programme, Quy said: “Detailed tasks are assigned to particular departments, state bodies and localities. The measures cover drafting and improving policies and mechanisms to attract investment, further reforms to administrative procedures, bettering the investment climate and the city’s competitiveness ranking, improving investment promotion personnel and fostering co-operation in promoting investment between Hanoi and other locations.”

In parallel to hosting investment promotion programmes at home and abroad, Hanoi will also pay due heed to spurring on-site investment through increasing support to projects which were granted investment certificates and hosting frequent dialogues with investors to settle their problems in a timely manner.

“A new investment wave will arise if every stakeholder is committed and we effectively handle this ambitious investment promotion programme,” Quy underscored.

Lotte group develop hotel chain in Vietnam

Lotte Group has expanded its interests in the hotel sector with the development of the Lotte Hanoi Hotel and acquisition of the Lotte Saigon.

With the opening of Lotte Hanoi Hotel, the group aims to become a leading Asian hotel owner.

According to Lee Jung Youl, general director of Lotte Hotels & Resorts Vietnam cum deputy chairman of Lotte Group, although the global economy is facing many difficulties, the newly-opened Lotte Hanoi Hotel still has much potential.

The $92 million Lotte Hanoi Hotel is located at the Lotte Centre Hanoi, right next to the Korean-owned Daewoo hotel.

“I believe that it is high time for high-end hotel development in Vietnam, especially the five-star hotel segment, since Hanoi and Vietnam are integrated into the global market and are also attracting a strong flow of FDI, foreign tourists and businessmen, while Vietnam lacks high-end hotels,” Youl claimed.

Lotte Group expects to see profits from the Hanoi Lotte Hotel within three years of operation.

Lotte have not stood still, as the group recently unveiled its second property development in Vietnam with the announcement of the Lotte Consortium – a joint venture between Korea’s Lotte and Japanese investors –to develop a new development in Ho Chi Minh City.

The $2 billion complex is planned for the Thu Thiem New Urban Area in Ho Chi Minh City’s District 2. Lotte has said it plans for the complex to be a landmark of the city and South East Asia.

According to Kim Min Geun, vice president, head of Overseas Mixed Used Development Division of Lotte Asset Development, Lotte Centre Hanoi and the group’s Thu Thiem development are key in the company’s Vietnam development plans and Lotte aims to lead international development in the future with its expertise in mixed-used development.

The Ho Chi Minh City development is will be a commercial and residential centre with multiple shopping complexes, hotels, serviced residences, offices and apartments.

Lotte is also keeping its eyes open for potential buy-outs.

The group paid $62.5 million to acquire the five-star Legend Hotel Saigon from fund management company VinaCapital over a year ago.

In order to upgrade the hotel, Youl said the hotel’s entire infrastructure was renovated and the staff were sent to Korea for re-education.

Disclosing its ambitious plans to expand its hotel business in Vietnam, Youl said in the coming time Lotte was still eager to pick up hotels which could meet its exacting standards.

VOF sells An Giang Plant Protection stake to Standard Chartered

VinaCapital-managed Vietnam Opportunity Fund (VOF) has reached a deal to sell its stake in An Giang Plant Protection Joint-Stock Co. (AGPP) to Standard Chartered Private Equity.

VinaCapital said in a statement that VOF would sell its 23.6 per cent stake in AGPP for $63.1 million in cash, or $4.10 per share, representing a 23.7 per cent internal rate of return over a period of five years.

As AGPP shares have not been listed on stock market, their book value should be a reference and thereby the value of this transaction represents a premium of 22 per cent over the net asset value (NAV) at the end of May, the last recorded value prior to receiving an offer for the shares.

Andy Ho, VinaCapital’s CEO said, “VOF’s share price to NAV discount is too wide. Proceeds from this divestment are currently being considered for a few major private equity investment opportunities and the ongoing share buyback programme.”

VOF yesterday traded on London’s AIM market at $2.71 per share, compared to its NAV of $3.51.

AGPP is a leading firm in the manufacture and distribution of pesticides in Vietnam. It has a network of 500 wholesalers and 4,500 retail outlets to distribute its 23 stock-keeping units (SKU). The firm employs over 3,000 people at offices in Ho Chi Minh City, the Mekong Delta and Cambodia as well as two pesticide factories, an R&D center, a packaging plant and six rice mills.

Its sixth rice mill was launched last year in the Mekong Delta province of Bac Lieu. It plans a total of 12 mills with capital expenditures estimated at approximately $137 million.

AGPP reported revenue of $354 million last year, an annual increase of over 17 per cent. In the first half of this year, the firm generated revenue of $200 million, roughly half of the firm’s whole year target of $399 million, and net income of $12 million.

New urban area to go up in District 2

Saigon Construction Corporation (SCC) has announced the new urban project PhoDong Village covering an area of 41 hectares in HCMC’s District 2.

The new urban area project is worth up to VND1 trillion. Over 90% of site clearance and compensation, as well as basic infrastructure including internal roads as well as auxiliary works for future residents have been completed.

PhoDong Village located at the intersection of Dong Van Cong Street and the eastern belt road in Cat Lai Ward will be developed in three stages within eight to ten years. Some 546 apartments and villas will be constructed to accommodate 7,000 residents.

Dang Thi Hoang Phuong, chairwoman of SCC, said construction density of 24.09% would allow the firm to develop both technical and social infrastructure facilities, as well as grow more trees.

Besides townhouses, terraced garden houses, detached and semi-attached villas, the new urban area will also feature entertainment zones, parks, commercial complex, schools, resident clubs, elderly care and pedestrian-only streets, among others.

Phuong said her company will focus on developing villas and townhouses, whose models have been introduced to customers in the first phase of the project. As scheduled, 240 villas and townhouses will be constructed soon for completion by the end of 2016.

The chairwoman said PhoDong Village offers a competitive price of VND4-4.4 billion for each terraced garden house with a total floor area of 330 square meters, a price quite competitive compared to 100-meter-square luxury apartments in the market. Besides terraced garden houses, SCC announced the first official sale of semi-detached villas worth from VND6.2 billion to VND6.7 billion a unit.

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