$44 million investment in Tien Yen District

Eight memorandum of understandings were signed in the northern Quảng Ninh Province’s Tiên Yên District on Friday, for investment projects in waste treatment, poultry, breeding and sea port development.

They are worth a total capital of VNĐ1 trillion (US$44 million).

The signings took place at the district’s Investment Promotion Conference, and were witnessed by 400 enterprises and economic organisations.

Trương Công Ngàn, chairman of Tiên Yên District People’s Committee, said it was the first such event and a good chance for domestic and foreign investors to better understand the district’ advantages and investment policies and explore investment opportunities.

Local authorities will create as favourable conditions as possible for investors to implement projects in the district, he promised.

Speaking at the event, Lê Quang Tùng, vice-chairman of Quảng Ninh Province People’s Committee, said he hoped Tiên Yên District would become an attractive destination for foreign investors as it has tremendous untapped potential in agro-fisheries and forestry, and local authorities are making a huge effort to improve its investment climate.

Tiên Yên District covers around 65,200ha and has a 35km coastline, and has favourable conditions to develop its agriculture, industry and tourism sectors.

In the future, the district will open the South Tiên Yên high-speed road and the 350-hectare Tiên Yên Industrial Zone, as per its socio-economic development plan from now to 2030.

Taxman says will remove barriers for enterprises

The tax sector will this year propose the Ministry of Finance to revise policies to remove barriers and difficulties to facilitate enterprises’ development, Bui Van Nam, general director of the General Department of Taxation, said on August 3.

The laws to be proposed for revision by the sector include the VAT Law, Corporate Income Tax Law, Personal Income Tax Law and Natural Resource Tax Law, Nam said at a ceremony held in HCMC on August 3 to honor outstanding taxpayers. The aim is to remove hindrances to business development.

The General Department of Taxation will manage to finish the issuance of a new decree on invoice by the year-end, replacing Decree 51/2010/ND-CP with an important revision on e-invoices. The new decree will make changes in managing invoices locally, thereby building up the national database.

The HCMC Tax Department has trialed e-invoices authenticated by tax authorities on 200 enterprises and has got positive feedback.

In addition to the revision on management policies, the general director said the tax sector will reform its procedures for electronic tax payment in accordance with the development of e-government. Electronic tax refunds will also be applied nationwide in the time to come.

Besides, the sector will apply high tech methods to lower operating cost, modernize management and adapt to the fourth industrial revolution.

Meanwhile, the tax authority will closely examine technology-based businesses like Uber, Grab, Facebook and Zalo to ensure tax fairness among enterprises, and prevent tax losses and transfer pricing.

The general director also guaranteed to have many reasonable solutions for large enterprises as well as suitable policies for small and micro ones to comply.

Glutinous rice exports to China slowing down

Exports of glutinous rice to China, Vietnam’s biggest rice importer, are stagnating, despite overseas shipments of the commodity soaring 34 percent in the first half of 2017.

Statistics from the Vietnam Food Association show that 2.65 million tonnes of rice were shipped abroad with free-on-board value of 1.65 billion USD in the first six months of 2017, an increase 0.25 percent in volume and 1.85 percent in value from the same period last year.

More than 1.16 million tonnes or 43.8 percent of the volume was shipped to China between January and June. 

Meanwhile, more than 660,000 tonnes of the total exported rice was glutinous rice, surging 34 percent from a year earlier. 

Overseas shipments of glutinous rice have sold well for the last three years as China began to purchase more of this product. Glutinous rice has made up 25 percent of exported rice volume, compared to 16.65 percent and 6.65 percent in the respective first halves of 2016 and 2015.

Most of Vietnam’s glutinous rice was destined for China, with a little for Indonesia.

The demand for glutinous rice in China has been relatively high in recent years, boosting both domestic and export prices. Businesses even exported glutinous rice at 490-500 USD per tonne at the end of this year’s winter-spring crop.

However, glutinous rice exports to China have slowed down over the last week, causing a drop in export prices, from 460-470 USD per tonne a week ago to 420-430 USD per tonne at present. Domestic prices also fell from 10,800-11,200 VND per kg to 10,400 VND per kg, said Dang Thi Lien – Director of the Long An Foodstuff Co. Ltd.

Many companies blamed the slowdown on changes in China’s glutinous rice import policy, forcing Chinese importers to offer lower bids to Vietnamese sellers to make up for higher import expenses.

Vietnamese firms will struggle to make a profit if they sell glutinous rice at 420-430 USD per tonne to China while purchasing it at 9,000-10,000 VND per kg from local farmers, explaining why the exports have slowed down.

Some enterprises said although China is a good market where Vietnam’s glutinous rice has few rivals, once supply surpasses demand, Vietnam’s dependence on the market poses great risks.

Experts said the agriculture ministry’s Department of Crop Production and localities should control the structure of planted rice varieties and avoid expanding the glutinous rice area.

Rice exporters also need to expand markets, especially in the Middle East and Southeast Asia, to avoid excessive dependence on China.

Vietjet named Asia’s Best Employer Brand

Vietjet Air has been awarded Asia’s Best Employer Brand in 2017 thanks to its innovative solutions in recruitment as well as its efforts in creating an internationally standardised, professional working environment for all employees.

The event was hosted by the Employer Branding Institute, World HRD Congress with CHRO Asia as a Strategic Partner and Endorsed by the Asian Confederation of Businesses in Singapore earlier last week. This is the second year the airline has been honoured for this award.

The 12th Asia’s Best Employer Brand Awards 2017 recognises Vietjet’s excellence in building the company brand as an employer of choice with consistent improvement in HR Policy by measuring organisational health and inculcating values that help to achieve the vision, culture of Contribution and Innovation at Work, developing a future leader and being a Social Employee.

After more than five years of operation, Vietjet has become one of the most favorite working places for internationals from more than 40 countries and territories. They have been contributing positively to making air travel become a popular means of transport among passengers not only in Vietnam but also in regional markets.

The airline has been honored for 32 domestic and ten international accolades, including being named “One of the Top 500 Brands in Asia 2016”, “Vietnam’s Most Favorite Airline”, and “The Best Asian Low Cost Carrier 2015” at the TTG Travel Awards 2015.

Vietjet is a member of the International Air Transport Association (IATA) with the IATA Operational Safety Audit (IOSA) certificate. The airline’s operation safety and technical reliability rates have always been among the highest in Asia Pacific region with a modern and well-furbished fleet and amazing diverse and friendly services.

Established in 2007, Vietjet is now leading the domestic aviation market in Vietnam and actively expanding its international flight network. After five years of operations, the airline has flown nearly 40 million passengers.

Currently, the airline operates a fleet of 45 aircraft, including A320s and A321s, and operates over 350 flights per day. It currently operates 73 routes in Vietnam and across the region to international destinations such as Hong Kong, Thailand, Singapore, the Republic of Korea, Taiwan, Malaysia, Cambodia, China and Myanmar.

HCMC to set limit on light trucks     

The chairman of HCM City People’s Committee Nguyen Thanh Phong instructed the municipal Department of Transport and relevant authorities to conduct studies on banning all light trucks during the day time in an effort to ease traffic congestion.

“This is a necessary solution because traffic congestion is happening throughout the day, not only during peak hours, especially at the city’s enterences, major roads, Tan Son Nhat Airport and Cat Lai Port,” Phong said at a Friday meeting to review traffic and safety for the first six months of this year.a

“Relevant authorities must continue to properly guide traffic routes, install more traffic lights, and arrange traffic police to ease traffic congestion,” he added.

Phong also asked authorities to speed up projects to collect car parking fees, to set up walking streets in downtown and waterway taxis on the Sai Gon river, to build underground car parking areas at Le Van Tam Park and Trong Dong Stage, to rearrange bus stations and to review activities of Uber and Grab in the city.

The chairman also requested departments and industries to accelerate automatic fee collection for new roads.

“The Department of Planning and Industry must carefully consider parking places when granting new business licences and the Department of Construction must not grant licences for high-rise buildings and apartments in areas that haven yet been invested for infrastructure development,” he said.

Phong instructed all district People’s Committee to strictly control the traffic situation in their localities and arrange parking places for schools and hospitals in ways that can serve local residents effectively.

“Light trucks move a lot at noon to serve restaurants, hotels and workshops all around the city and the limitation of light trucks is a must,” said Bui Xuan Cuong, director of the transport department.

Another reason for the worsening traffic situation is huge number of new vehicles.

“Every month, the city has around 30,000 new vehicles and cars, accounting for 15 per cent,” said Lieutenant Colonel Huynh Trung Phong, head of the HCM City Police’s Roads and Railways Traffic Police.

“Because of limit time for travelling, trucks often causes congestion. It is hard to turn and they often cause congestion,” he added.

He also noted that cars working for Uber and Grab should have a limited operation time.

“They also partly contribute to congestion,” he added.

According to a report from the HCM City Traffic Safety Committee, for the first six months of this year, there were 334 traffic accidents, killing 62 and injuring 227 people.

There were 10 fewer accidents, eight fewer deaths and 14 fewer injuries compared to the same period last year.

By the middle of May, the city had eight million vehicles, including 700,000 trucks, buses and cars. 

Southern industry bolsters links to maintain strong growth

Southern provinces and cities will strive to achieve total retail sales and services revenue of more than 2.07 quadrillion VND (91.4 billion USD) in 2017, a year-on-year increase of 11.5 percent, and total export revenue of 104.9 billion USD, up 11.6 percent over last year, officials have said.

Speaking at a recent meeting of the industry and trade sector of southern cities and provinces in Ho Chi Minh City, Le Thanh Liem, Vice Chairman of the HCM City People’s Committee, said 20 provinces and cities in the south accounted for more than 60 percent of industrial production value and 57 percent of retail sales and services revenue of the whole country.

In the past years, the industry and trade sector in the south has relentlessly enhanced co-operation and links through many practical programmes.

In the context of increasing integration and competition, links and co-operation between localities to make the most of regional advantages is important, he said.

Therefore, provinces and cities in the south will continue to have solutions to effectively implement strategic co-operation and links to maintain the position of the region, he said.

Agreeing with Liem, leaders of the Departments of Industry and Trade of other cities and provinces in the south said that the links between localities should be strengthened to support regional planning, promote goods circulation, improve product quality as well as ensure outlets for their products, and inspect and manage the market and food sources better.

In addition, links would help with market demand forecasting so traders and farmers can come up with suitable production and business plans and increase their competitive capacity.

To realise the targets set for this year, departments of industry and trade in the region will co-ordinate with relevant agencies to continue carrying out measures to ensure a stable supply of goods and prevent prices from sudden increases, delegates said.   

In addition, localities in the south will also continue to develop their distribution systems in accordance with regional planning to promote the circulation of goods and balance supply and demand, contributing to the development of the trade sector, they added.

A report at the meeting showed that total retail sales and services revenue of southern provinces and cities during the first six months of the year reached 1.2 quadrillion VND, an increase of 8.9 percent over the same period last year.

Of this amount, Binh Duong, Dong Nai and HCM City achieved the highest growth rates in retail sales and services revenue, going up by 20 percent, 11.45 percent and 10.2 percent, respectively.

At the meeting, Deputy Minister of Industry and Trade Do Thang Hai highly appreciated the achievements made by the south’s industry and trade sector, saying that many countries, including Vietnam’s key export markets, will continue to apply technical barriers and protective measures, causing difficulties for local businesses.

Therefore, the industry and trade sector in southern provinces and cities needs to strengthen links to develop supporting industries, create links in production, distribution and oversight to ensure product quality meets domestic and export market demand, he said.

No more self-printed invoices     

The General Department of Taxation has ruled that from 2018, firms will have to obtain their invoices from the department instead of printing their own.

The move is part of the Ministry of Finance (MoF) unit’s proposal to replace Decree No 51/2010/ND-CP and Decree No 04/2014/ND-CP on invoices for sales of goods and services.

According to the MoF, the goal is to deal with obstacles while implementing Decree No 51, which allows most companies to print their own invoices instead of receiving them from tax authorities.

The change will help limit the amount of printed paper invoices and prevent firms from printing too many invoices to avoid paying tax, MoF said.

The new decree also stipulates that by 2020, electronic invoices must be used by 90 per cent of businesses. The regulation will apply to enterprises in industrial parks, economic zones, export processing zones, high-tech zones, non-business public units performing production or commercial activities and newly established enterprises.

Besides issuing paper invoices for enterprises, tax authorities will also support firms in shifting to electronic invoices with tax codes provided by authorities to expand the application of electronic invoices among firms.

From early 2019, many other types of enterprise, including household businesses with revenue of more than VND3 billion (US$133,000), will be forced to issue e-invoices with tax codes provided by tax authorities.

The use of e-invoices would help reduce the time and expense relating to invoices for enterprises, while contributing to limiting fraudulence, according to the MoF.

According to the ministry, the number of businesses using e-invoices has increased significantly in recent years, rising from 30 enterprises in 2011 to 331 in 2015 and 656 in 2016. The number of electronic invoices issued has also increased sharply, from 9,014 in 2011 to more than 277 million in 2016. 

OK for coal trans-shipment port     

Deputy Prime Minister Trinh Dinh Dung has approved the proposal to build a coal shipment port in the southern region.

The deputy PM assigned the Ministry of Industry and Trade in co-operation with the Ministry of Transport and relevant agencies to complete the port construction feasibility report. The port will carry coal to thermo-power plants in the Cuu Long (Mekong) Delta region.

As per the deputy PM’s instruction, the ministries will propose coal shipment plans to serve the urgent thermo-power plant demand in the region while building suitable investment plans to submit to the PM Nguyen Xuan Phuc for approval.

According to the national electricity development master plan, the Mekong Delta region will have seven major thermo-power centres, including Long Phu, Song Hau, Duyen Hai, Bac Lieu, An Giang, Kien Luong and Tien Giang.

The total demand of imported coal for the thermo-power centres would be around 11 million tonnes by 2020 and 22 million tonnes by 2025. The coal demand would increase to 43 million tonnes by 2030.

Local coal resources have been concentrated in the northeastern province of Quang Ninh which mainly serve for thermo-power centres in the northern and central provinces.

Experts argue that Viet Nam should have a coal trans-shipment port to reduce costs of transport to the centres in the region. However, the Government should consider coal import sources and vessel capacity.

Southern industry to bolster links to maintain strong growth     

Southern provinces and cities will strive to achieve total retail sales and services revenue of more than VND2.07 quadrillion (US$91.4 billion) this year, a year-on-year increase of 11.5 per cent, and total export revenue of $104.9 billion, up 11.6 per cent over last year, officials said at a meeting in HCM City last Friday.

Speaking at a meeting of the industry and trade sector of southern cities and provinces, Le Thanh Liem, deputy chairman of the HCM City People’s Committee, said 20 provinces and cities in the south accounted for more than 60 per cent of industrial production value and 57 per cent of retail sales and services revenue of the whole country.

In the past years, the industry and trade sector in the south has relentlessly enhanced co-operation and links through many practical programmes.

In the context of increasing integration and competition, links and co-operation between localities to make the most of regional advantages is important, he said.

Therefore, provinces and cities in the south will continue to have solutions to effectively implement strategic co-operation and links to maintain the position of the region, he said.

Agreeing with Liem, leaders of the departments of Industry and Trade of other cities and provinces in the south said that the links between localities should be strengthened to support regional planning, promote goods circulation, improve product quality as well as ensure outlets for their products, and inspect and manage the market and food sources better.

In addition, links would help with market demand forecasting so traders and farmers can come up with suitable production and business plans and increase their competitive capacity.

To realise the targets set for this year, departments of industry and trade in the region will co-ordinate with relevant agencies to continue carrying out measures to ensure a stable supply of goods and prevent prices from sudden increases, delegates said.

In addition, localities in the south will also continue to develop their distribution systems in accordance with regional planning to promote the circulation of goods and balance supply and demand, contributing to the development of the trade sector, they added.

A report at the meeting showed that total retail sales and services revenue of southern provinces and cities during the first six months of the year reached VND1.2 quadrillion, an increase of 8.9 per cent over the same period last year.

Of this amount, Binh Duong, Dong Nai and HCM City achieved the highest growth rates in retail sales and services revenue, going up by 20 per cent, 11.45 per cent and 10.2 per cent, respectively.

At the meeting, Deputy Minister of Industry and Trade Do Thang Hai highly appreciated the achievements made by the south’s industry and trade sector, saying that many countries, including Viet Nam’s key export markets, will continue to apply technical barriers and protective measures, causing difficulties for local businesses.

Therefore, the industry and trade sector in southern provinces and cities needs to strengthen links to develop supporting industries, create links in production, distribution and oversight to ensure product quality meets domestic and export market demand, he said.

Bancassurance to become new trend for insurers and commercial banks

The first half of 2017 has witnessed many bancassurance deals in Vietnam and the second may also see heightened cooperation among insurers and commercial banks, which promises to heat up the bancassurance sector. 

In the first six months of 2017, there have been at least five bancassurance deals among insurance companies and commercial banks so that insurers can sell their products through the banking channel.

Two more bancassurance deals are expected in August. It seems that insurance companies are in a hurry to find an appropriate banking partner so that they can catch up with the bancassurance trend.

“Bancassurance accounts for more than 10 per cent of AIA (Vietnam) Life Insurance Co., Ltd. (AIA Vietnam)’s total revenue, and it is forecasted that this number will rise in the future. To develop business in the bancassurance sector, our strategy is to carefully select domestic and foreign commercial banks for partnership. Our partners can share with us technology-based customer services,” Wayne Besant, general director of AIA Vietnam, said at the ceremony to announce partnership with HSBC Bank (Vietnam) Ltd. (HSBC Vietnam) in the middle of May 2017. This was one of five bancassurance deals in the first half of 2017.

AIA Vietnam is one of the rapidly developing insurers in the bancassurance sector. After teaming up with HSBC Vietnam, it entered into cooperation with the South Korean Shinhan Bank to provide clients with the newest technology at the event “Fuel customer experience with digital capabilities.”

Recently, in early August, AIA Vietnam has officially announced a cooperation deal with DongA Joint Stock Commercial Bank (DongA Bank). Accordingly, all insurance counselors of AIA Vietnam in DongA Bank will be equipped with iPoS on their iPads to facilitate their support to customers, such as quickly recording customer information and establishing an illustration table that shows customers’ benefits.

Nearly at the same time with AIA’s cooperation with DongA Bank, FWD Vietnam Life Insurance Company Limited also published its partnership with Nam A Commercial Joint Stock Bank (Nam A Bank). In particular, this will be an exclusive cooperation which will last for 15 years, with the aim of providing Nam A Bank’s customers with comprehensive and diverse life insurance products.

Anantharaman Sridharan, FWD Vietnam’s general director, said that the company’s outstanding growth in the last six months derived from the significant contribution of its bancassurance business. Right from entering the Vietnamese market, bancassurance was considered one of the most important strategies of FWD Vietnam.

Earlier, FWD Vietnam stroke an exclusive bancassurance contract with the maturity of 15 years with An Binh Commercial Joint Stock Bank (ABBank).

As a partner of a big commercial bank in Vietnam, Gaurav Sharma, general director of BIDV MetLife Life Insurance Limited Liability Company (BIDV MetLife), said that he really believes in the development potential of the bancassurance sector in Vietnam.

With the advantage of teaming up with Bank for Investment and Development of Vietnam (BIDV), one of the four biggest commercial banks in the country, the New York City-headquartered life insurer MetLife is always ready to supply capital to its joint venture in Vietnam so that BIDV MetLife can take the leading position in the Vietnamese bancassurance sector in the coming period.

The increasing bancassurance deals have demonstrated that the competition in the sector is heating up. The representative of an insurance company said, “Not only big insurers with large market share, but smaller ones are also hurrying up to find a banking partner.”

This month, two insurance companies with large market shares will announce their cooperation with banks.

With the advantage of various branches all over the world, modern facilities, and experienced staff, commercial banks are now hunted by insurers. Competition in bancassurance is getting fiercer, as most local insurers have joined or tried to join this sector.

Nevertheless, the number of commercial banks is limited, and some have signed exclusive contracts with other insurers. Thus, if they do not act in time, some insurers will not find appropriate banking partners and may lose in the bancassurance race. 

Chinese investor eyes transport infrastructure projects

At a meeting with Deputy Minister of Transport Nguyen Ngoc Dong on August 3, Mr. Chen Xiaohua, Vice President and Standing Party Member at the China Gezhouba Group Company (CGGC), a Chinese construction and engineering company, expressed its desire to cooperate in Vietnam’s transport sector.

CGGC is a State-owned enterprise involved in designing, constructing, investing in, and operating energy projects such as hydropower and thermal power and transport projects such as highways, railways, bridges, airports, and ports, and was established in 1970 and has branches in 136 countries.

“Vietnam is a stable developing country with great potential for foreign investors,” he said “CGGC would like to become involved in investing in or contracting projects on highways and urban railways in the country.”

Deputy Minister Dong said that Vietnam is focusing on developing its infrastructure, considering its development as one of three strategic breakthroughs, but capital remains tight. “The government therefore welcomes and calls upon domestic and foreign businesses and investors, including CGGC, to take advantage of their strengths to invest in transport projects under the public-private partnership (PPP) model or as project contractors,” he said.

He asked CGGC to work directly with relevant agencies at the Ministry of Transport (MoT) to obtain full information on projects and think about where it would like to cooperate. MoT would then consider any proposal before making a decision.

A number of Chinese enterprises have recently secured contracts in Vietnam’s transport construction works in Vietnam. The Ministry of Transport, however, previously announced that errors were found in the work of some Chinese enterprises and that construction pace was slow at times.

For example, last year the Railway Project Management Unit under MoT asked the Chinese contractor, the supervisory consulting firm, and subcontractors involved in the Cat Linh - Ha Dong urban railway line project in Hanoi to explain the lack of safety and faults found during the construction process.  

After being informed that the work did not meet safety requirements and that workers were not professionally trained, the management unit sent an urgent dispatch requiring the China Railway Bureau Group 6, the main contractor, to account for the shortcomings.

During his first official visit to China last year, Prime Minister Nguyen Xuan Phuc said the slow pace of construction has had a negative impact on traffic in Hanoi and sparked public dissatisfaction. Given the fact that a number of accidents have occurred in the project, he told the Chinese company to ensure safety on the site.

Eximbank reorganizes leadership roles

As part of the mid- and long-term strategic initiatives in its “New Eximbank” project, Eximbank is restructuring its head office to streamline the organization and improve efficiency in the decision-making process.

It has reorganized its existing nine divisions and centers/departments at the head office into seven divisions: corporate banking, retail banking, treasury, risk management, IT & operations, support, and strategic planning.

Meanwhile, its new Board of Management now comprises Chairman and CEO Mr. Le Van Quyet together with six Deputy CEOs: Mr. Tran Tan Loc, Mr. Dao Hong Chau, Ms. Dinh Thi Thu Thao, Ms. Van Thai Bao Nhi, Nguyen Ho Hoang Vu, and Mr. Vo Quang Hien.

Eximbank has also initiated an important new position to support the Board, that of Senior Director. Responsible for executing the bank’s business strategy, the Senior Directors are Mr. Bui Van Dao, Mr. Nguyen Van Hao, Mr. Le Anh Tu, and Mr. Masashi Mochizuki, as well as Head of the New Eximbank plan, Mr. Yutaka Moriwaki.

Eximbank has embarked on a new restructuring and strategic plan since the beginning of this year, called New Eximbank. Having restructured the Board, this is set to fulfill Eximbank’s mission of generating value for all stakeholders: clients, shareholders, employees, and communities, through the continuous growth of Eximbank’s business.

Through this restructuring, every Board member and each division will have clearer missions and functions and will take full responsibility in fulfilling tasks to support the branch network.

Like most other Vietnamese banks, Eximbank last year focused on recovering and resolving substantial non-performing loans (NPLs) under the guidance of the State Bank of Vietnam. According to its 2016 consolidated financial statement, NPLs rose from 1.86 per cent at end-2015 to as high as 5.3 per cent at end-June before falling to 2.95 per cent at end-December, thanks to the conversion of bad debts to bonds from the Vietnam Asset Management Company (VAMC).

On the profitability front, the bank saw better-than-expected business performance during the first half of this year, with the first quarter seeing VND170 billion ($7.48 million) in pre-tax profit and VND136 billion ($5.98 million) in after-tax profit, while net profit in the second quarter jumped 5.2-fold year-on-year to VND190 billion ($8.4 million).

In an interview with VET, Mr. Moriwaki said the absence of a sound business strategy and low staff morale caused by frequent leadership changes are unresolved issues facing Eximbank. This, though, will be dealt with by the “establishment of a fair and transparent human resources system, including setting key performance indicators (KPI) and performance evaluation processes (PEP) to motivate staff,” he said, adding that the restructuring plan will reorganize the decision-making process so that the responsibility of every manager and staff will be made clear.

Building the New Eximbank also relies on leveraging its wide distribution network, consisting of 209 locations and 265 ATMs, to expand its retail banking business, while also focusing on trade financing via the establishment of a wholesale banking division and short-term working capital loans to strengthen the bank’s traditional small and medium-sized enterprise (SME) business.

“At the same time, the bank’s credit risk management and NPL collection will be strengthened,” Mr. Moriwaki said, revealing that Japan’s Sumitomo Mitsui Banking Corporation (SMBC), a major shareholder, has already sent a trade finance expert to lead the wholesale banking division. 

Temporary safeguard measure on DAP, MAP fertilisers launched

The Ministry of Industry and Trade (MoIT) recently issued Decision No.3044/QD-BCT applying temporary safeguard measures against diammonium phosphate (DAP) and monoammonium phosphate (MAP) fertilisers.

The ministry will levy a temporary duty of nearly 1.9 million VND (83.5 USD) per tonne of several types of those fertilisers from August 19.

The measure will last for a maximum of 200 days. It will end after March 6, 2018 or when the MoIT applies official safeguard measures.

On April 13, 2017, the Vietnam Competition Authority under the MoIT received requests from DAP-Vinachem Limited Company and DAP No.2-Vinachem Joint Stock Company for protective measures on DAP fertilisers imported from foreign countries as imports were harming domestic production.

VND 241bln villas & resort complex to be built in Ha Tinh

The north central province of Ha Tinh People’s Committee has just approved the Loc Ha International Corp’s project in the investment of building Loc Ha villas & resort, tourism area at Thinh Loc Commune, Loc Ha district. 

The project covering an area of 8.7ha includes a three star hotel with 100 rooms, restaurant area, services and entertainment area, villas & resort and the park…

Before, on April 29, 2017, the Vingroup opened Ocean villas & resort complex, Vinpearl and Vinpearland Water Park in the north central province of Ha Tinh,

HCMC to welcome 11 million of int’l arrivals by 2020

Deputy Secretary of the Ho Chi Minh City Party Committee and President of the Ho Chi Minh City People’s Council Nguyen Thi Quyet Tam yesterday chaired a meeting about the city’s tourism development in Can Gio district.

The Ho Chi Minh City Tourism Department reported that the city has received nearly three million of international visitors so far, an increase over 14 percent in comparison with the same period of last year and reached nearly 50 percent as of this year’s plan. 

In the first seven months of the year, total turnover was estimated nearly VND 54,000 billion, increased over 12 percent in comparison with the same period of 2016.

Last year, Ho Chi Minh City was listed top 25 most tourism destinations in Asia, top 100 most destinations for international tourists, top 20 cities having the world’s highest tourist growth; and ranked the 2nd among ten the most attractive cities for single tourist. 

The city’s tourist industry has set a target to receive 11 million of international tourists by 2020.

In order to attract more and more tourists, the city  recently has launched new tourist products as performing arts street, traditional medicines street, and in the upcoming time, the city will launch international marathon festival, colorful lighting performance..

Chairwoman of the Ho Chi Minh City People’s Council Nguyen Thi Quyet Tam accesses tourism information portal

Speaking at the meeting, Deputy Secretary of the Ho Chi Minh City Party Committee Nguyen Thi Quyet Tam affirmed that the city tourism industry actively had contributed into the development of the city during previous times adding that  the HCMC Tourism Department and relevant agencies need to exploit and attract more potential customers and high-class tourism products highlighting culture and character of the southern people.

Ms. Quyet Tam required that departments, units and local people actively co-joined in creating safe, friendly and attractive tourism environment.

HSBC: ASEAN enterprises continues strong investment in Vietnam

Enterprises from other ASEAN countries have invested massively in Vietnam over the last three years and the trend is expected to continue in at least five more years, said Pham Hong Hai, chief executive officer of HSBC Vietnam.

Speaking to the media just ahead of the ASEAN anniversary celebration which will be held

in the Philippines next Tuesday, Hai said investors in ASEAN consider Vietnam not only a consumption market but also a production base.

For the last three years, HSBC Vietnam has held road shows in some ASEAN nations to call for investment in Vietnam. Particularly, Thai companies claimed that Vietnam is the top priority in their investment plans.

There will be massive investments from ASEAN firms in Vietnam for at least the next five years, Hai said, and many of them are now waiting for opportunities from the equitization of many Vietnamese state-own firms.

This investment trend is helped by Vietnam’s political and macroeconomic stability, low-cost labor and government incentives. Besides, Vietnam is right next to China, so ASEAN firms can get supplies from this country easily.

Considering Vietnam a consumption market, companies from Thailand have invested heavily in the domestic retail market and production of consumer goods, said Winfield K Wong, head of wholesale banking of HSBC Vietnam.

According to data of the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment, total investments from ASEAN firms in Vietnam in quarter one reached US$1.14 billion, accounting for 14.81% of the total in the period.

In January-March, there were 50 new investment projects from ASEAN countries approved with new investments of US$605 million, and 30 operational projects with extra investments of US$367.3 million. Besides, there were 116 deals by ASEAN enterprises to acquire stakes in Vietnamese firms with a total value of US$169.66 million.

As of March 20, there had been 3,219 foreign direct investment (FDI) projects from ASEAN countries in Vietnam, with total investments of US$61.65 billion.

Most investment projects from ASEAN are in the processing and manufacturing industry, accounting for 50% of the total. The top ASEAN investors in Vietnam are Singapore, Thailand and Brunei.

Public capital disbursement in HCMC reaches 50.5% of plan

Capital disbursed for public projects in HCMC in the first seven months of 2017 reached only 50.5% of the year’s plan, lower than targeted, announced the city’s Department of Planning and Investment at a meeting on August 3.

According to the department, the city is allocated nearly VND26.2 trillion (about US$1.152 billion) for 2017 from the State budget, official development assistance (ODA) and the city’s own budget, for public projects.

As of the end of July, over VND13.2 trillion had been disbursed, 50.5% of the plan. In particular, VND722 billion from the central State budget was disbursed, only 22% of the full-year plan, VND2.9 trillion from ODA, 71.9%, and VND9.59 trillion from the city’s budget, 50.8%.

The pace of capital disbursement was slower than expected due to many reasons.

For capital from the State budget, the city was allocated VND3.2 trillion to build Children’s Hospital and Oncology Hospital 2. The investor, the Works Construction and Management Authority under the city’s Department of Health, only began to disburse capital for the projects after the financial management agency finished paperwork.

ODA required for the city’s public projects in 2017 was estimated at VND7.7 trillion but the city was allocated only VND4 trillion. Therefore, the city could not complete the projects on schedule and had to pay interest and fines due to slow payments for contractors.

The HCMC People’s Committee earlier proposed the Government provide an additional VND3.65 trillion from ODA for the city’s Metro Line No.1 project and the second phase of the water environment improvement project.

However, at a conference on solutions to accelerate disbursement of ODA and concessional loans on August 1, the Ministry of Planning and Investment said the National Assembly has not approved the metro project’s cost adjustment from VND17.39 trillion to VND47.3 trillion. Therefore, the city’s proposal to have an additional VND3 trillion for the project is not yet approved at the moment.

At a working session on July 25, Minister and Chairman of the Government Office Mai Tien Dung criticized leaders of 13 provinces, ministries and agencies, including HCMC, over delayed disbursements for public projects.

According to the Ministry of Finance, the city had disbursed only 26% of finances from the central State budget required for public projects by June 17.

At the conference on August 3, HCMC Vice Chairman Tran Vinh Tuyen urged departments and districts to accelerate capital disbursement for public projects and asked the leaders to take responsibility before the city government if slow disbursements continue.

The HCMC People’s Council in early July passed the medium-term public investment plan for the 2016-2020 period with a total budget of about VND172 trillion (US$7.56 billion), including about VND22 trillion from the central State budget and the remaining VND150 trillion from the city’s budget.

Priority will be given to urgent infrastructure projects and the city will take measures to promote public private partnership (PPP) which is seen as a key capital-raising channel.

HCMC sets land prices far lower than market value

The HCMC People’s Committee has just approved a new list of land prices which are well below market levels along some streets of 15 districts.

The municipal government has issued Decision No. 30/2017 on adjustment of the land price list that had earlier been provided for in Decision No. 51/2014 dated December 31, 2014 on land prices in the city, effective from January 1, 2015 to December 31, 2019.

The city has adjusted land prices along many streets in districts 2, 6, 9, 10, 11, Thu Duc, Phu Nhuan, Binh Tan, Tan Phu, Go Vap, Hoc Mon, Can Gio, Binh Chanh, Cu Chi and Nha Be.

Notably, plots of land along some roads have their nominal prices far lower than market value, according to the updated land price list.

For example, land prices along District 2’s Nguyen Thi Dinh Street range from VND7.5 million to VND9.8 million per square meter while land along a parallel road from Tran Nao to Mai Chi Tho is priced at VND15 million per square meter.

Meanwhile, according to a survey of Gach Vang Land Valuation Company, these areas have market value of at least VND70 million per square meter.

Similarly, land along a section of Vo Chi Cong Street from Ba Cua to Phu Huu streets in District 9 is priced at VND4.2 million per square meter, well below the market level of VND15-20 million.

According to the Land Law, the Government issues a new land price list every five years. In case the actual land prices on the market are over 20% higher or lower than the minimum or maximum list prices, the Government will update the price list. Then, authorities in centrally-run provinces and cities will also adjust their own land price lists.

Centrally-governed provinces and cities are allowed to set higher prices of land which does not exceed 30% of the maximum prices. Otherwise, they are required to seek the Ministry of Natural Resources and Environment’s approval.

Neither the central nor local governments have amended their land price lists since July 2014, despite significant changes in prices, according to Le Hoang Chau, chairman of the HCMC Real Estate Association.

He said the city’s 2015 land price list which was issued in line with the Government’s land price list prescribed the prices of local land plots equal to only 30% of market value. As such, land prices should be changed to suit the real situation.

That land plots are priced lower than market value has become one of the main factors that has made site clearance and compensation slow, thus causing economic losses in the investment process, damaging the investment environment, and increasing the number of land price-related complaints.

Besides, that land prices on transfer contracts are far lower than market value also results in a large amount of lost tax revenue.

Therefore, the association has proposed the Government allow provincial and municipal governments to draw up their land price lists and make them match market value.

Specialized management burdens enterprises

Vietnamese enterprises now have to spend a total of 28.6 million working days and a cost of VND14.3 trillion a year to comply with procedures on specialized management, which now covers a total of 100,000 product types, according to a report from the Central Institute for Economic Management (CIEM).

There are 414 documents related to specialized management, including 30 laws, 97 decrees, and 287 circulars, according to CIEM’s report.

Specialized management covers a vast array, from plant and animal quarantine, quality assurance, and energy efficiency to food safety inspection and export-import licensing.

In terms of cost for specialized management, export-import licensing accounts for 41.2% of the total of VND14.3 trillion, quality assurance and energy efficiency procedures 25.3%, food safety inspections 19.1%, animal quarantine 14.3% and plant quarantine 0.1%.

According to CIEM, products with the possibility of causing danger must have quality assured, including 478 product lines and thousands of product types. Besides, many more products categorized as “Others” have posed a lot of difficulties for enterprises during the compliance process.

CIEM has proposed cutting down on the 100,000 product types that must undergo checks. Specifically, a 30% reduction will save 8.6 million working days and VND4.3 trillion, while a 50% cut will save 14.3 million working days and VND7.1 trillion.

Bangladeshi Embassy informs invitation of tenders for rice import

The Bangladeshi Embassy in Vietnam has sent a diplomatic note to the Ministry of Industry and Trade of Vietnam announcing the invitation to both domestic and foreign tenders for its country’s rice import.

Accordingly, the Directorate of Food under Bangladesh’s Ministry of Food has invited tenders for the import of 50,000 tonnes of non-basmati parboiled rice.

This creates an excellent opportunity for Vietnamese businesses to boost rice export to the market.

The announcement stated that the imported rice will be shipped to Chittagong and Mongla ports within 40 days since the days of signing deals.

Rice could be imported from any countries, except for Israel, and harvested from 2016 to present.

The deadline for selling tender documents is 5:00 pm on August 7, 2017 (Bangladesh’s time) and that for submitting tender dossiers is 1:00 pm on August 8, 2017 (Bangladesh’s time). The auction will be open at 2:30 pm the same day.

FLC wins auction to buy land worth $40m     

FLC Group has won the auction organised by Number 5 Auction JSC for the purchase of a 64,077sq.m. land lot in Dai Mo Ward, Ha Noi’s Nam Tu Liem District.

The starting price of the lot was US$14 million and FLC’s offer was $38 million – almost triple the price.

FLC is working on completing the necessary procedures to begin developing this project. The group plans to build 91 townhouses, 54 villas, a kindergarten, high-rise apartments and social housing on this land and start operations by the second quarter of 2019.

FLC Group also recently announced its plan to build 15,000 cheap apartments from 25 to 50sq.m, priced from $17,600 to 22,000 per unit, which is great news for the market and low-income earners. 

PJICO first-half yield shows a firm on rise

With a semi-annual profit growth of 21 per cent, Petrolimex Insurance Corporation confidently welcomes foreign shareholders.

According to the latest news from Petrolimex Insurance Corporation (PJICO – PGI), in the first six months of 2017, the insurer recorded positive financial results, confirming PJICO’s solid standing.

Total insurance premiums hit VND1.21 trillion ($55 million), up 8 per cent year-on-year. Pre-tax profits reached VND97.2 billion ($4.4 million), increasing by 21 per cent when compared to the same period last year. This profit growth reflects PJICO’s strategy of focusing on quality, safety, and efficiency.

As of June 30, PJICO’s earnings per share (EPS) reached VND 1,120 (5 cents), while its return on equity (ROE) ratio sat at 9 per cent, which is the highest among non-life insurance companies in the market.

PJICO’s net technical reserves increased to nearly VND1.9 trillion ($86.4 million), a figure that is 2.56 times its chartered capital.

Last weekend, the private deal between PJICO and Samsung Fire and Marine Insurance Co., Ltd. (SFMI) won the title of “Archetypical Investment and Distribution Deal” from the 2017 M&A Vietnam Forum. In this deal, SFMI used roughly VND530 billion ($24 million) to purchase 17.74 million shares, equivalent to 20 per cent of PJICO’s chartered capital, a move which was approved by the State Securities Commission.

Since the domestic financial-insurance market still struggles to attract capital from big foreign enterprises, SFMI’s willingness to pay VND30,000 ($1.36) per share for 20 per cent of PJICO’s charter capital demonstrates the attractiveness of the Vietnamese insurance industry and PJICO in particular.

SFMI is Korea’s leading insurance company with more than 60 years of non-life insurance experience. According to the latest rankings from A.M Best Credit Ratings, SFMI’s financial capacity was rated A++ and its credit rating was AA+.

According to experts, the co-operation between the two leading insurance companies not only helps to strengthen the financial capacity and liquidity ratio of both firms, but it also increases their ability to help customers.

A PJICO representative said that the positive business outcome achieved in the first six months of 2017 will greatly help the company reach its 2017 targets.

Leading brewers’ ad spending meets diminishing returns

In the context of fierce competition among brewers, two of Vietnam’s largest brewers Sabeco and Habeco have millions of dollars on advertisements, which they consider an important weapon in the race to gain the market share, according to newswire Vnexpress.

Notably, according to its half year report, Sabeco spent VND740.3 billion ($32.5 million) on advertisements and promotional communications campaigns, equaling 53 per cent of sales expenditure and signifying an increase of VND333 billion ($14.5 million) compared to the same period last year.

According to Sabeco chairman Vo Thanh Ha, the corporation is facing heated competition with leading brewers in terms of brand image and financial potential. Besides, customers are increasingly consuming high-end beer products, while Sabeco has yet to come out with products at this segment. Thus, one of the most important targets of Sabeco in 2017 is retaining its existing market share.

Habeco, in the first six months, spent VND223 billion ($9.8 million) on advertisements, promotion, and communications programmes, doubling the figure on-year.

According to the theory, when firms increase spending on advertisements, their business results will improve. However, in reality, efficiency has been decreasing.

In 2012, Sabeco’s revenue was 50 times higher than its expenditure for advertisement, promotion, and communications programmes, however, in the first six months of this year, the figure was 20 times only.

Regarding Habeco, in recent years, in spite of the consecutively increasing expenditure on advertisements and promotion, the firm has seen a consecutive decrease in profit since the 2014 record. In the first half of this year alone, although the firm spent double on advertisements and promotion, its revenue reached VND4.2 trillion ($184.6 million) only, up 5 per cent on-year, with a light decrease in after-tax profit.

Sabeco is the largest brewer in Vietnam in general and in the south in particular. The firm currently owns 24 manufacturing plants with a total designed capacity of 1.8 billion litres per year, 20 of which are in operation, while the remaining ones are expected to come into operation in the near future. In 2015, Sabeco sold 1.5 billion litres of beer, equaling 40 per cent of the market.

Sabeco has expanded its market share in the north. Notably, in the first six months of 2016, its market share increased to 15.5 per cent from the previous 10 per cent.

Regarding Habeco, the firm ranks third among the largest brewers in Vietnam, with an 18 per cent holding of the domestic beer market in general and 50 per cent of the north in particular. Its beer sales in 2015 reached 700 million litres. It owns 15 beer plants, almost all of which are located in the north.