VOF starts to pay for Novaland stocks

The close-ended VinaCapital Vietnam Opportunity Fund (VOF) has paid US$15 million towards acquiring convertible preferred stocks of Novaland Group under a syndicated investment deal worth $47 million.

VOF's managing director Andy Ho said, "We have confidence in the leading position of Novaland in developing projects in HCM City and its land fund.

"This investment is included in our strategy to make indirect investments in the real estate sector via listed or private companies in the sector while making divestments from property projects."

He expects Novaland to stick to its IPO plan over the next two years, he added.

Projects under the Novaland brand name are valued at $753.4 million. It has spent over $190 million to buy land-use rights for several lands for future development.

VinaCapital manages VOF and two other funds that are listed at the AIM of the London Stock Exchange.

It also co-manages technology fund DFJ VinaCapital L.P. along with Draper Fisher Jurvetson.

Bphone recalled for software upgrades less than fortnight after delivery

Although Bkav is trying to market its Bphone as the world’s leading smartphone, the road now proves rough for the Hanoi-based company, as it is recalling the first batche of handsets shortly after delivery for software upgrades.

Those customers who had the Bphone delivered to their doors on June 18 will have to return it to the manufacturer for software upgrades, Do Thu Hang, director of public relations with Bkav, confirmed to Tuoi Tre (Youth) newspaper on Monday.

The Vietnamese company, known for its Bkav antivirus software, had previously said the upgrades would be done online.

Bkav took the wraps off its brainchild, the Bphone, on May 26 and officially put it on sale a week later.

Delivery has been delayed many times and the new date is July 3, according to the company’s spokesperson.

The Internet security firm-turned-smartphone maker recorded 11,822 orders in its first day of sales, but refused to say how many phones had been delivered in the first batch on June 18.

The recalled products will have their firmware upgraded by Bkav engineers, whereas their cameras will also be improved to “enable them to take better photos than the iPhone 6 Plus,” Hang asserted.

Bkav has consistently asserted its Bphone is capable of rivaling Apple’s iPhone and Samsung’s Galaxy S gadgets.

The products will be returned on July 3 with a gift voucher of VND200,000 ($10), applicable to purchases at vala.vn, which is Bkav’s shopping site and the only channel via which the Bphone is distributed.

Bkav CEO Nguyen Tu Quang hailed the Bphone as the world’s best smartphone at the launch ceremony, attended by more than 2,000 people, in Hanoi last month.

However, the device has been hamstrung by a series of scandals since the launch, which illustrates that it is nowhere near the world level.

On June 5, Bkav began displaying demo versions of the Bphone at two FPT Shop mobile phone stores, one each in Hanoi and Ho Chi Minh City, for users to have a first-hand experience.

However, only three days later, the company suddenly removed these devices from shelves, apparently because they had received negative comments from those who tested them out.

The demo versions reportedly have screens with poor display and slow performance quality that is even lower than some low-cost handsets, with Bkav protesting that these are only “demo, experimental versions rather than the official commercial devices.”

Bkav said it has developed its own operating system, called BOS, for the Bphone.

The platform is in fact developed from the core of Google’s Android, and local tech enthusiasts have also discovered that Bkav has yet to sign a Mobile Application Distribution Agreement with Google.

Saigon Port IPO grosses nearly US$19 million

Saigon Port Company Limited sold out 35.71 million shares bringing VND411.13 billion (US$18.83 million) in its initial public offering organized at the Ho Chi Minh City Stock Exchange on Tuesday.

The sold shares account for 16.51 percent of the company’s chartered capital.

Thirty nine investors attended the auction session, including three organizations and 36 individuals.

The shares were offered at the starting price of VND11,500 per share, which increased to the highest price of VND22,500 in the session. Average price was 14 dong higher than the starting price.

Saigon Port is a 100 percent state-own company under the Vietnam National Shipping Lines. The port’s chartered capital will reach VND2,162 billion (US$99 million) after equitization with 64 percent state-capital.

The auction session for normal investors had been successful. Saigon Port would continue selling another 35.71 million shares to strategic investors, said the company’s representative.

Three strategic investors registering to buy Saigon Port shares are property developer Vingroup (VIC), Vietnam Bank for Industry and Trade, and Vietnam Prosperity Bank.

Finance Ministry cracks down on troublesome tax, customs officials

The Ministry of Finance handled 136 civil servants and officials in tax, customs and treasury agencies for causing difficulties for residents and businesses in the first six months this year, reported deputy minister Vu Thi Mai at a news conference on Tuesday.

Besides, 2,800 officials with bad attitude at work were rotated from these agencies after 1,500 inspections.

The ministry had drastically instructed relevant agencies to remove civil servants with negative attitude at work, however they have yet to be able to handle all, she said.

Several measures had been applied such as procedure simplification and e-tax declaration and payment, aiming to limit direct contacts between tax payers and officials.

At the meeting, deputy head of the Department of Banking and Financial Institutions Phan Thi Thu Hien reported capital mobilization from Government bonds in the first half.

It reached VND115 trillion (US$5.27 billion), down 23 percent over the same period last year, she said.

The reduction was due to high year on year credit growth rate touching 6.28 percent. The rate was 2.03 percent in the first six months last year.

Cafe owners lose as customers take refuge from heat

Cafe owners in Hanoi say they are losing money to customers who linger at their tables to escape the summer heat.

While cafes in the Dich Vong, Nga Tu So or Nam Trung Yen areas are crowded, customers are ordering free filtered water or a cheap drink so they can enjoy the cool air, and then stay for hours.

Nam, a student at Phuong Dong University, said, "The heat is unbearable inside our small rent room so we went out to a cafe near our university. It's cool, convenient and cheap."

Real estate brokers and multi-level marketing employees are using cafes as offices during the summer.

Nguyen Thi Linh, a cafe owner on Trung Kinh Street, said as the number of customers increases, she is seeing more losses. She said customers stay in the cafe for at least three hours, many from morning until afternoon, but they spend very little money.

"Our menu has some light courses but they do not want it. They call for meals from other restaurants and we still have to clean everything up after," Linh said.

She used to serve iced tea as free drink, but after most of a group of 20 customers only wanted the free tea, she had to start charging for it.

Tuan, another owner on Yen Hoa Street said, "We have to pay rent and wages and need a profit of at least VND500,000 a day to break even. But these days, we can't meet the target."

SOE equitization far behind schedule

The Government’s target to have 289 State-owned enterprises (SOEs) equitized this year seems unobtainable as only 43 of them had gone public as of the end of May, according to a report of the Ministry of Finance.

To realize the target, 246 SOEs must be equitized between now and December, or one enterprise each day.

Last year, the nation saw 143 enterprises going public, doubling that in 2013.

SOEs’ capital divestments from sensitive non-core business sectors including securities, banking, finance, insurance, real estate and investment funds progressed as scheduled in the first six months of this year. But the pace of capital divestments and equitization has remained slow, the report said.

The ministry is completing mechanisms to better manage State capital and investments, improve the performance of State-run groups and corporations, and supervise the agencies in charge of SOEs. The ministry will urge SOEs to press on with their restructuring schemes approved by the Government.

In the second half of this year, the ministry will speed up SOE restructuring, equitization, State capital divestments and supervision. The agency will also take bold moves to secure transparent operations of SOEs.

According to the report, State budget collections in the first six months were put at VND446 trillion, up 6% year-on-year but 1% lower than the target. The revenue target for the whole year is VND911 trillion (US$41.7 billion).

Some 52 out of the nation’s 63 provinces and cities have realized at least 50% of their targets for tax and fee collection targets for this year.

Meanwhile, the nation’s  budget spending in the first half was estimated at VND545 trillion, an 8.2% year-on-year increase but meeting only 47.5% of the target. The full-year target is VND1,147 trillion.

The budget deficit in the first six months was some VND99 trillion, or 43.8% of the year’s estimate.

By June 29, the State Treasury had issued around VND115 trillion worth of government bonds to finance the budget overspending and development investments, meeting 46% of this year’s target.

HCM City sees 16,500 condos sold in H1

A staggering 16,500 apartments in HCMC were sold in the first half of this year, reports of CBRE Vietnam show.

The reports of the property service provider say customers bought over 10,000 apartment units at old and new housing projects in the city in the second quarter and another 6,500 in the previous quarter.

The number of apartments offered for sale in the second quarter increased sharply to more than 8,500 units, mainly at high-end projects like Estella Heights, The Sun Avenue, The Krista, Vista Verde, Gateway Thao Dien, Sarimi, and Landmark 1, 2, 4 and 5 at Vinhomes Central Park.

The average price of the apartments picked up 3.2% in quarter two against quarter one, according to CBRE Vietnam.

Duong Thuy Dung, head of research and consulting at CBRE Vietnam, told an event held on June 30 to release the quarter two report that high-end apartments sold well in the period with 97% of the offered units snapped up at Gateway Thao Dien, all at Masteri Thao Dien and over 70% at Estella Heights.

Though the investors of the housing projects said their apartments were selling like hot cakes, homes can still be found on the secondary market and their selling prices are 5-10% higher than the levels announced by developers.

Participants at the event wondered whether housing developers and exchanges are trying to stimulate demand and boost prices by making their products scarce. Dung said housing developers and distributors often secured contracts with customers long before they launched sales events, so at these events, homebuyers could hardly find a lot of products on offer.

However, an executive at a major property exchange told the Daily that normally relatives and friends of employees at trading floors registered to buy apartments before employees found actual buyers to sell products at higher prices.

Regarding business results in the first two quarters, Hung Thinh said it had sold almost all apartments at Sky Center in Tan Binh District and Melody Residences in Tan Phu District.

Meanwhile, 1,600 apartments of Dat Xanh Group’s Sunview Town project in Thu Duc District have been acquired. Sacomreal has also sold 1,100 out of 1,600 apartments available at Jamona Apartment, Carillon 2 and Carillon 3.

Danang-Quang Ngai expy cost cut by VND2.5 trillion

The Ministry of Transport has said the total investment cost of Danang-Quang Ngai expressway has been reduced by nearly VND2.5 trillion after reviews and design adjustments of the project.

Of the total investment reduction, VND2.37 trillion is from component installation cost and VND93 billion from construction cost.

Besides, Vietnam Expressway Corporation (VEC) has proposed adjusting expansion joints of bridges on the expressway to save around VND25 billion but these replacements still meet technical standards.

Deputy Minister of Transport Nguyen Ngoc Dong told a review meeting on the Danang-Quang Ngai expressway project on Monday that design reviews are important to not only the expressway but also other construction works as they could help lower investment costs. These adjustments still ensure technical requirements and operation efficiency when they are put into use.

Last year, the ministry reviewed 44 projects and saved a total of VND39.4 trillion. Danang-Quang Ngai expressway is designed to stretch nearly 140 kilometers, have four lanes and allow for a designed speed of 120 kilometers per hour. The US$1.47-billion road consists of nine interchanges, 126 bridges, a tunnel and many other components.

The expressway, part of the north-south expressway invested by VEC, kicked off construction on May 19, 2013 and is scheduled for completion in 2018.

Seafood exporters face tough times ahead

The General Department of Fisheries has warned that local seafood exporters will continue to face fierce competition from other seafood exporting countries, technical barriers in importing markets and unpredictable disease epidemics.

The department under the Ministry of Agriculture and Rural Development gave the warning at a review meeting on seafood output and processing in the first half of this year in Hanoi on Monday, Vietnam News Agency reports.

The fisheries sector yielded three million tons in the January-June period, up 3.6% compared to the same period last year. The volume included 1.8 million tons of farmed fish and 1.2 million tons of fish caught from the sea.

However, challenges still lingered in the period. Seafood exporters had to deal with mounting competition from regional countries which were plagued by diseases in shrimp in previous years and technical barriers for tra fish fillets in importing markets and the depreciation of currencies in importing markets against the U.S. dollar, among others.

Figures of the Vietnam Association of Seafood Exporters and Producers (VASEP) showed Vietnam exported nearly US$2.5 billion worth of seafood in January-May, down 17.2% versus the same period last year. Of which, exports to the United States fell by 31.4% year-on-year to almost US$477 million, to the European Union down by 15.4% to over US$44.5 million and to Japan by 12.8% to US$369 million.

The nation’s outbound shrimp sales in the first five months dropped 29.4% to more than US$1 billion while tra fish shipments reached US$616.5 million, a year-on-year decrease of 9.6%.

Fishermen still found it difficult to benefit from State support for building new offshore fishing vessels in line with the Government’s Decree 67/2014/ND-CP. According to the department, 25 out of 28 cities and provinces have approved lists of fishermen eligible to get State aid to build a total of 674 new fishing boats, or 30% of the target.

By June 15, commercial banks had pledged to lend VND721 billion to 70 new fishing vessels and five boat upgrades, with VND190 billion of it already disbursed.

However, Nguyen Van Trung of the department said there remained problems related to requirements for machines used for the new fishing boats, fishermen’s lack of reciprocal capital for new vessel projects and value-added tax refunds.

Trung said toward the year-end relevant agencies would join hands to removing hurdles to implementing the decree, developing infrastructure for the sector and helping farmers look for quality breeder shrimp and fish.

Nguyen Huy Dien, deputy head of the department, said weather conditions have turned favorable for fish farming when summer temperatures have dropped. In the coming time, farmers will get more assistance in production of Vietnam’s major seafood items for export, including tra fish, shrimp and tuna.  

The department expects fish output to reach 6.4 million tons this year.

Domestic sugar output down 13%

ust as the 2014-2015 sugarcane crop has ended, 42 sugar mills have turned out over 1.4 million tons of sugar, down 13% against the previous crop, according to the Department of Processing and Trade for Agro-Forestry-Fisheries Products and Salt Production.

The sugar output fall has sent down inventories at mills nationwide. By June 15, sugar mills had reported combined inventories of 389,440 tons, 159,500 tons lower than in the same period last year.

A kilogram of white sugar is now priced at VND14,200-14,800. The Vietnam Sugar and Sugarcane Association (VSSA) said the sugar selling price at mills is normally VND500 per kilogram lower than the market price due to transport cost.

Despite shrinking inventories this year, local sugar mills are still coping with pressure from illegal sugar imports as sugar smuggled from Thailand is sold at VND13,000 per kilogram.

Sugar produced by Hoang Anh Gia Lai (HAGL) in Laos is also offered for sale on the local market at VND13,300-13,500 a kilo. VSSA said HAGL sold its sugar at VND14,000 per kilogram earlier but then lowered the price to VND13,300-13,500 per kilogram to attract buyers.

According to the director of a sugar mill, the reason HAGL lowered its price is that it had seen a hindrance to exporting sugar to China.

In previous years, sugar companies had to export sugar to China via unofficial channels as a measure to cope with an oversupply on the domestic market and illegal sugar imports from Thailand. However, exports to the northern neighbor are risky as it regularly closes border gates to imports from Vietnam.

A survey of VSSA showed a Vietnamese consumer uses 16 kilograms of sugar a year, so the domestic sugar output of the 2014-2015 crop is sufficient to meet the local demand.

Nevertheless, the local price of sugar is always affected by imports as sugar imports from Laos of this year are 81,000 tons in line with Vietnam’s commitment to the global trade club WTO.

Of course, sugar smuggled from Thailand has also hit local mills. VSSA calculated 300,000-400,000 tons of sugar is illegally imported into Vietnam from Thailand a year.

Bac Lieu enjoys growth in seafood exports

The southern province of Bac Lieu posted a 4 percent growth in seafood export value in the first six months of this year to earn 212 million USD despite a 2 percent drop in export volume to 18,749 tonnes.

The results are attributable to local seafood processing enterprises’ efforts to improve product quality through strict control of input materials and processing.

Many enterprises have invested in upgrading machinery and technology, thus enhancing their products’ added value and subsequently selling prices.

The province has also successfully engaged processors in a production chain, facilitating the tracking of origin of products.

In addition, provincial agencies have kept local enterprises regularly updated on export markets to help them adjust production and business plans accordingly.

Bac Lieu’s success is worthy of note in the context that the country’s export of aquatic products fell in value by 16 percent to 2.97 billion USD in the first half of the year.

Vietnamese firms should prepare for Vietnam-EAEU FTA

Necessary preparations by domestic businesses for the free trade agreement (FTA) between Vietnam and the Eurasian Economic Union (EAEU) was the focus of discussions among experts at a workshop held in Ho Chi Minh City.

At the event, co-organised on July 2 by the municipal Department of Industry and Trade, the Centre of the World Trade Organisation (WTO) and the Ho Chi Minh City Enterprises Association, they highlighted the huge potential for domestic businesses from access to the 175 million-people market with a GDP of nearly 2.5 trillion USD.

Nguyen Khanh Ngoc from the Ministry of Industry and Trade attached significance to the accuracy of certificates of origin for products, saying that errors take away any incentives from the agreement for the sector.

Domestic firms should enhance their understanding of the FTA to overcome difficulties, raise product competitiveness and improve product quality to meet the strict requirements of these markets.

Participants pointed to the impact of the FTA on a number of domestic sectors, saying that FTA commitments will include cutting 82 percent of tax lines on the garment-textile sector and 72 percent for the rubber sector.

The free trade agreement between Vietnam and the Eurasia Economic Union (EAEU) (grouping Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan) was signed on May 29 after more than two years of negotiations, opening up a new chapter in the partnership between Vietnam and the union as well as each EAEU member nation in particular.

The agreement is expected to be effective from early next year, after all signatories complete their domestic procedures.

Lao, Vietnamese companies send goods to Vientiane

Around 200 enterprises from Vietnam and Laos took place in the Vietnam-Laos Trade Fair which opened at the International Convention and Exhibition Centre in Laos’ capital city of Vientiane on July 2.

Vietnamese goods on display at the fair include pharmaceutical and medical equipment, industrial machinery, construction and building materials, agro-forestry-fisheries products, processed foods, garments and textiles, handicrafts, interior furniture, plastics and consumer goods.

According to Deputy Minister of Industry and Trade Nguyen Cam Tu, the fair is a good opportunity to promote brands, boost exports and expand their shares in Laos and the northeast region of Thailand.

Meanwhile, Lao Deputy Minister of Industry and Trade Somchith Inthamith considered the fair an effective bridge for trade organisations, producers and investors from the two countries to exchange opinions, transfer technology or form joint ventures.

Vietnam-Laos trade reached 1.29 billion USD in 2014, up 30 percent from 2013.

Cashew exports maintains strong growth in first half of 2015

Cashew nut exports in the first half of this year posted strong growth, reaching 150,000 tonnes in volume and 1.08 billion USD in value, according to a conference on promoting the production and consumption of cashews in 2015.

The figures released at the conference, held by the Department for Processing and Trade for Agro-forestry-fisheries products and salt production in Ho Chi Minh City on July 2, showed a 14 percent increase in volume and a 28.2 percent surge in value compared with the same period last year.

The average cost of each tonne of cashews was 7,080 USD, up 11.64 percent year-on-year.

Vietnamese cashew products have been exported to more than 50 countries with the United States, China and the Netherlands as the largest importers accounting for 39.98 percent, 13.12 percent and 10.89 percent, respectively.

In addition to the positive results, the delegates at the conference also pointed out challenges the sector will need to face to maintain the growth trend in the second half of the year.

The biggest challenge facing cashew processors is their dependence on imported raw cashews, which account for 70 percent of the cashew input.

This dependence also led to instability in price and quality of nuts, which eventually affects the quality of finished products for exports.

According to statistics from the Vietnam Cashew Association (VINACAS), Vietnam imported 197.5 tonnes of raw cashew nuts in the first four months of this year, an annual surge of 175.7 percent.

In addition, most cashews processors lack the financial capability to invest in advanced technology to add more values to their products because of their relatively small size.

Super sorghum plantation project launched

SOL Holdings VN held a ceremony in HCM City on July 2 to get an investment licence to grow, process and sell super sorghum products in Vietnam.

A representative from Japan’s SOL Holdings group said Vietnam is the most important market in Southeast Asia that the group targets at to develop super sorghum and related processing systems.

SOL Holdings Vietnam General Director Nguyen Thai Son said after the Ministry of Agriculture and Rural Development (MARD) allowed the company to grow super sorghum widely in Vietnam, the company has worked with localities and farmers to prepare for technology transfer.

The growing of super sorghum has been piloted in Dong Nai province to prepare materials for an animal feed processing plant which is expected to be operational early next year, Son said.

GEM invests US$20 million in local real estate company

The US Global Emerging Market (GEM) will invest US$20 million in Vietnamese real estate company - Hoang Quan Company (HQC).

The signing ceremony between the two firms took place in New Work on July 1 under the witness of representatives from the Ministry of Finance, the Stock Securities Commission (SSC) and the HCM City Stock Exchange.

Accordingly, GEM will purchase HQC shares within 30 months since the date of signing.

GEM CEO Christopher F Brown said GEM is keen on HQC social housing development strategy in Vietnam and believes that social housing will thrive in the near future thanks to Vietnam’s better social welfare policy.

HQC President Truong Anh Tuan said the company will use the capital to develop social housing projects in the coming times.

GEM will be the third international partner of HQC, after LC and Huyndai.

The US group, with asset worth of US$3.4 billion, has successfully conducted 305 transactions in 65 countries.

Hanoi to host Vietnam Int’l Motor Show 2015

Vietnam International Motor Show 2015 is set to get underway at Vietnam Exhibition and Fair Centre in Hanoi on October 10-13.

Nine authorized importers of Audi, BMW, Jaguar, Land Rover, Luxgen, MINI, Porsche, Renault and BAIC have registered to take part in the event.

The event, organized by Vietnam Automobile Manufacturers’ Association (VAMA) is expected to showcase the latest vehicle models, engines and advanced technologies. It also provides a good chance for enterprises to meet and exchange.

Laurent Genet, representing the participating car importers, affirmed that they understand the Vietnamese market and can meet Vietnamese customers’ diversified demand.

Through the event, car importers hoped that customers can make the best buying decision, he noted.

ACE Ltd to acquire Chubb for $28.3b

ACE Limited and The Chubb Corporation announced on Wednesday that the Board of Directors of both companies had approved an agreement under which ACE will acquire Chubb.

Under the terms of the transaction, Chubb shareholders will receive US$62.93 per share in cash and 0.6019 shares of ACE stock.

Upon closing of the transaction, ACE shareholders will own 70 per cent of the combined company, and Chubb shareholders will own 30 per cent.

The consideration represents an approximately 30 per cent premium to Chubb's closing price of $95.14 on June 30, 2015.

Outside the US, ACE is a premier commercial insurer with a presence in 54 countries and a broad product, customer and distribution capability. Chubb's operations in 25 countries will complement and deepen ACE's presence.

The acquisition is expected to create a global leader in commercial and personal property and casualty insurance.

ACE intends to finance the cash portion of the transaction through a combination of $9 billion of ACE and Chubb excess cash plus $5.3 billion of senior notes with a range of maturities to be determined.

ACE intends to target a debt-to-total capital ratio of approximately 20 per cent following the acquisition, within the guidelines for the company's ratings.

The transaction is expected to close during the first quarter of 2016, subject to approval by ACE and Chubb shareholders, the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and regulatory approvals.

Based on the closing price of ACE stock on June 30, the total value is approximately $124.13 per Chubb share, or $28.3 billion in the aggregate.

This is the equivalent of $125.87 per Chubb share using ACE's 20-day volume weighted average share price for the period ending June 30.

As of December 31, 2014, the combined company had total shareholders' equity of nearly $46 billion and cash, investments and other assets of $150 billion.

ACE Limited is the parent company of ACE Group, one of the world's largest multiline property and casualty insurers.

MARD targets H2 recovery

The Ministry of Agriculture and Rural Development (MARD) will deal with difficulties in production and export of agricultural products to help growth recovery in the second half of this year.

Minister Cao Duc Phat spoke about the production and business of the agricultural sector in the first half of this year at a news conference of the ministry on Wednesday.

The ministry would resolve the challenges in production and improve the business environment to create favourable conditions for enterprises to invest in the agricultural sector, he said.

"The ministry will set up working teams to review all kinds of charges and fees in order to reduce them. That will simplify administrative procedures," Phat said. "The ministry will use information technology to help enterprises reduce time and expenses in using public services."

Meanwhile, "many free-trade agreements will continue to be signed in the coming time. Under the agreements, almost tax lines will fall, but the export markets will establish technical and administrative procedure barriers," he said.

"In the second half of this year, the ministry and its relevant departments will work with partners in specific export countries to erase the barriers for opening markets for local farming, husbandry and seafood products."

Pham Anh Tuan, deputy head of the General Department of Fisheries, said as the current weather was good for white-leg shrimp and prawn production by the end of this year, the shrimp output was expected to increase, promoting growth of the fisheries industry this year.

However, the fisheries sector should study carefully the reasons for the recent fall in seafood exports, including the exchange rate, supply and purchasing power, to have reasonable management for production and exports in the future, Tuan said.

Hoang Thanh Van, head of the livestock department, said this year, cattle and poultry diseases were under control, while the prices of animal feed and husbandry products were stable.

"Several enterprises have recently registered a huge investment in the livestock industry, including one investment of US$1 billion by 2020," Van said.

Large enterprises were rearing beef and dairy cattle, he said, which was the right way path for the local livestock industry.

Head of the Livestock Institute Nguyen Thanh Son said the State should reduce administrative procedures, and the agricultural industry should restructure production to attract more investment to the industry and create a positive environment for the export of farm products.

According to the General Statistics Office, the growth in the gross domestic product (GDP) of agriculture, forestry and fisheries in the first half of this year reached 2.36 per cent, lower than 2.9 per cent in the same period last year, but higher than 2.14 per cent in the first half of 2013.

The agricultural sector gained a year-on-year increase of 2.41 per cent in production value in the first half of the year to reach VND489 trillion ($22.43 billion).

The sector faced several challenges in consumption in the first half of this year, the ministry said.

The government, ministries and enterprises have sought solutions and an improved business environment to overcome difficulties in the consumption of farm products.

But in the first six months, five of 12 Vietnamese exporters of farm products saw their export volume and value fall, including in tea, rubber, rice and coffee, besides seafood.

The sector suffered a year-on-year fall of 2.8 per cent in export value to $14.42 billion for the first half of this year.

PM upholds unchanged VAT for rice

The Prime Minister has approved the Ministry of Finance's decision to not slash the value added tax (VAT) imposed on rice in the domestic market.

Accordingly, the tax rate will be retained at the current level of 5 per cent.

Previously, the Viet Nam Food Association had proposed that the VAT on rice consumed in the domestic market be cut to 0.5 per cent to develop a rice brand in the domestic market.

However, in response to the proposal, the Ministry of Finance said that the existing Law on VAT did not have a 0.5 per cent tax rate. If this tax rate was added, it will not be in line with the VAT reform strategy for the 2011-20 period, aimed at narrowing down the number of subjects for VAT imposition.

The Finance Ministry also said that the proposal was not in line with international practices, which allow zero tax rate only on export products.

Statistics from the Ministry of Agriculture and Rural Development showed that domestic rice consumption, which was imposed with a 5 per cent VAT, accounted for less than 15 per cent of the country's total rice output.

On average, during the 2010-15 period, Viet Nam produced about 22 million tonnes of rice, of which 18.5 million tonnes were not subjected to any tax as they were used for exports and self-consumption. Meanwhile, some 3.5 million tonnes of rice was taxed each year.

Regarding animal feed and fertilisers, the Ministry of Finance has proposed to continue animal feed in the list of goods receiving VAT exemption, while the impact of VAT exemption on fertilisers should continue to be evaluated to raise proposals for amendments to law.

Vietnam – third largest importer of Chinese steel

Vietnam purchased 3.5 million tonnes of steel from China from January-May, accounting for 8.9 percent of the market share and ranking third among the nation’s importers, according to the Latin American Steel Association (Alacero).

Alacero’s latest data shows that in the period, the Republic of Korea imported the biggest volume of Chinese steel with 5.2 million tonnes or 13.3 percent of the market share.

It was followed by Latin America with 3.8 million tonnes, up 12 percent from the same period last year.

According to Alacero, China exported 39.5 million tonnes of steel to the world in the first five months of this year, an annual rise of 30 percent.-

Import-export turnover through Noi Bai airport increases

The import-export turnover of goods through Noi Bai International Airport hit 2.7 billion USD in the first six months of 2015, according to the Airport Customs Department.

During the reviewed period, nearly 2.8 million passengers on 23,758 flights entered and went out Hanoi through Noi Bai International Airport .

Vu Quoc Hung, head of the department, said the airport’s Terminal 2 has a capacity of handling ten million passengers a year and is expected to cater 15 million passengers a year.

The airport has applied risk management through the e-customs system for both passengers and cargos in T2 has helped the sector cut down the time required to deal with procedures, he said, adding the staff’s capacity and sense of responsibility have also improved substantially.

Thai Binh looks for investment from Singapore

A delegation from the northern province of Thai Binh held a working session with Singaporean enterprises in the city state on July 2 to call for investment in the Vietnamese locality.

Speaking at the event, Vice Chairman of the Thai Binh People’s Committee Pham Van Ca said his locality is looking for foreign investment flows in hospital development, transport infrastructure, climate change prevention, natural gas-used industrial development, public-private partnership, food and farm product processing and development of agricultural production areas.

Representatives from Singaporean companies asked Thai Binh leaders to point out incentive policies and required conditions to invest in the locality and in Vietnam in general.

In his reply, Ca announced that Thai Binh has established two centres to provide consulting services for investors and help them access information related to administrative procedures and investment promotion in the locality.

VNREA announces Real Estate Expo in Hanoi

Aiming to promote a healthy sustainable real estate market and increase connectivity between buyer and seller, the Vietnam National Real Estate Association (VNREA) on July 31-August 3 will stage its first-ever real estate expo.

With over 100 booths, the fair at the National Exhibition Centre in My Dinh, Hanoi is expected to attract the participation of hundreds of entities displaying a wide variety of products encompassing residential and commercial real estate.

Most notably there will be a large number of vendors displaying building materials, interior and exterior decorating products along with home repairs, furniture and other housewares.

Representatives from a host of financial institutions will also be on hand to provide consumers with loads of information of a variety of low interest home and business financing packages.

In addition, seminars and dialogues will be held, giving out free advice and answers to investing and legal questions including those pertaining to recent changes regarding foreign ownership of real estate.

Vietnam’s first-half cell phone production tops 107 million units

With major foreign phone makers expanding production, Vietnam’s mobile phone industry posted strong growth in the first half of this year, the latest figures show.

The first six months saw 107.3 million mobile phones made and assembled in the Southeast Asian country, a massive 68.8% increase compared to the same period last year, according to the General Statistics Office.

The export value of cellphones and components in the six-month period topped US$14.7 billion, up 27% from the first half of 2014.

The General Statistics Office also reported that 2.16 million televisions, 1.38 million motorbikes, and 88,100 cars were made in Vietnam from the start of the year to the end of June.

The TV and car sectors also posted solid production growth rates of 40.3% and 57.6%, respectively.

The robust manufacturing of mobile phones in Vietnam was mostly driven by foreign players, including Samsung Electronics Vietnam, Microsoft Mobile Vietnam, and LG Electronics.

Samsung is operating seven projects worth a total of US$11.3 billion in the Southeast Asian country, the two biggest of which are mobile phone production complexes in Bac Ninh and Thai Nguyen, two provinces in the north.

The Republic of Korea's electronics behemoth has so far channeled US$2.5 billion and US$5 billion into these complexes, respectively.

Microsoft, meanwhile, inaugurated its first authorized resale store in Vietnam last week.

It was reportedly shutting down two handset plants it inherited from Nokia in China and relocating part of the manufacturing to Vietnam, according to media reports in February.

The General Statistics Office also said Vietnam’s gross domestic product expanded 6.28% year-on-year in the first six month of this year, whereas the country suffered a US$3.8 billion trade deficit.

In the first half of 2014, the country enjoyed a US$1.9 billion trade surplus.

Vietnam’s exports in the six-month period of 2015 topped US$77.7 billion, up 9.3% from the same period last year, but imports soared 17.7% to US$81.5 billion, according to the office.

Manufacturing is Vietnam’s rock star

With all the turbulence in the world, Vietnam stands out with the more upbeat news flow and economic data, according to HSBC.

Exports accelerated in June by 18% year-on-year, defying gravity, and taking the year-to-date growth close to 10%. The PMI is equally positive, expanding sharply in the second quarter. While the June number decelerated to 52.2 from 54.8, the leading indicator – new orders minus inventories - rose sharply, suggesting output will rise in the months ahead. Credit growth, too, picked up by 17% year-on-year thanks to improving demand.

Unequivocally, the Trans-Pacific Partnership (TPP) will be very beneficial for Vietnam, said HSBC.

The country is rich in cheap labour and the trend will continue for the next two decades. Labour productivity is amongst the lowest in the region, but growing the fastest, thanks to more efficient FDI sectors.

Since joining the WTO in January 2007, domestic firms have been ailing, thanks to inefficient allocation of resources and unfocused industrial policy. Despite numerous reforms, the state sector continues to dominate investment, contributing less to output.

HSBC believes that Vietnam is slowly liberalizing its economy. That said, it will unlikely do it overnight. Whether it’s state-owned-enterprise equitisation efforts or liberalization of public equity to foreign investment, it is important to pay attention to the details of the laws as well as the implementation.

HSBC evaluated that Vietnam’s biggest growth driver in the coming years will be trade, facilitated by key trade agreements such as the TPP and labour cost endowment. The biggest risks will come from within Vietnam, where inefficient allocation of resources will sap productivity and leave the country caught in the low-middle income trap.

Experiences from other countries show that escaping this is an anomaly and requires proactive efforts to boost efficiency of investment, whether on soft or hard infrastructure.  

Power output increases by 12.35%

The total amount of power produced during the first six months of this year was 78.74 billion kWh, a 12.35% increase compared to the same period last year, according to a report issued by the Electricity of Vietnam (EVN).

The EVN put an additional five turbines into operation, with a total capacity of 2,654 MW, providing electricity to the national grid.

In the face of the electricity overload caused by the prolonged heat wave, the EVN has undertaken efforts to ensure sufficient power supply.

For the last six months of this year, the imported and produced power capacity is estimated at 80.32 billion kWh, the EVN said. The group aims to provide enough power for production and business, while exploring further hydropower options and load conditions to set up a plan for next year’s power supply.

Minister of Industry and Trade Vu Huy Hoang asked the EVN to accelerate the electrification process in remote areas, such as Cham Island in central Quang Nam province and Lai Son in southern Kien Giang province, in order to achieve the national socio-economic development target.

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