Only way out for long-delayed IP proposed by Hai Duong

Stiffer measures were proposed to help break the current impasse of notorious long-delayed Viet Hoa-Kenmark Industrial Park in the northern province of Hai Duong.

The Hai Duong Provincial People’s Committee just held a working session with related parties at Viet Hoa-Kenmark Industrial Park (IP) project and ultimately came to the conclusion that the IP must be sold in the upcoming time. 

Hai Duong IP Management Authority was assigned by the provincial People’s Committee to devise an official way out and submit it to the provincial management for approval. 

“The project has remained unsolved for quite a long time now, while the IP holds strategic importance in attracting investment to Hai Duong. This bottleneck must be tackled without further delay to unlock the so-far inhibited opportunities for others,” said a source from the provincial management. 

Also according to the source, the IP was unsuccessfully put on sale several years ago, but there were no buyers and the $67.6 million debt of IP developer -Taiwanese furniture-maker Kenmark Group- towards Vietnamese banks still hangs in the balance. 

“Before it was put on sale, the IP was highly valued by the developer, so buyers were not charmed. Now price fixing will be assigned to the creditors, promising a more reasonable pricing to lure buyers,” the source revealed. 

Viet Hoa-Kenmark IP was licensed in 2005. At the time, the developer promised to inject $500 million into turning the empty land into a mammoth IP and an urban township. 

During the first phase, Kenmark was set to disburse about $98 million and, in fact, spent $44 million on building internal roads, workshops, as well as a wastewater treatment and an electricity generation system. 

The developer abruptly returned home in 2010, suspending the project without further notice. 

Unsolved contradictions between Kenmark and two Malaysian investors, who not only contributed capital to building the IP but also ran projects there, were supposedly one of the main reasons for the project’s failure. 

Kenmark’s suspended $67.6-million debt to Vietnamese banks was another headache with little solution on the horizon. 

To open a path to dealing with the debt, Kenmark chairman Hwang Ding Kuo flew to Vietnam numerous times to work with relevant lenders and local management authorities. 

They came to a consensus on selling the IP to recoup the investment capital and pay off bank debts. However, all negotiations with potential buyers failed due to transfer price-related issues. 

At the moment, as the IP project’s price is now fixed by the lenders instead of the developer, the project promises to be more appealing to investors, paving the way for a happy ending to a long journey full of adversity.

French heavy-weight steps in to save notorious $930m financial centre

France-based Vinci Construction has expressed interest in co-operating with Berjaya Land Berhad (Berjaya), a subsidiary of Malaysian Berjaya Corporation, to develop the long-delayed $930 million Vietnam Financial Centre in District 10, Ho Chi Minh City.

According to Thesaigontimes, at a meeting with Nguyen Thanh Phong, Chairman of the Ho Chi Minh People’s Committee on October 5, Vinci Group chairman Jerome Stubler noted that the group will be in charge of the design and construction stages and will help Berjaya call for investment capital.

In addition, the group expressed interest in developing projects of public traffic infrastructure, environment, and drainage, according to the city’s proposal.

According to the plan, the investors will develop a complex featuring a mega mall, an office building, and a five-star hotel with 488 rooms and 289 serviced apartments.

Licensed in February 2008, the project’s plans have been altered and adjusted 14 times, leading to heavy delay in construction, which was expected to kick off in the first quarter of 2010. The construction was reset to kick off in July 2011 and be completed in 2016. However, as of now, the grounds are currently occupied by a flock of businesses from car parking to tennis courts and motels, rather than the monolithic skyscraper and surrounding facilities the company proposed.

Vinci Construction is a leading French construction company with nearly 1,000 subsidiaries employing nearly 69,000 people in some 100 countries. The group has previously co-operated with Berjaya to develop numerous projects in Malaysia.

Present in Vietnam for over 20 years, Vinci Construction established numerous subsidiaries, including Structure Vietnam, Bachy Soletanche Vietnam, Freyssinet Vietnam, Vinci Construction Grands Projets, and Campenon.

PetroVietnam Construction Corporation inspected

The Government Inspectorate announced on October 6 the inspection of the PetroVietnam Construction Corporation (PVC).

The Inspectorate will scrutinise the company’s implementation of policy and law in business production activities, especially in investments in and execution of projects, between January 1, 2008 and December 31, 2013.

The inspection will last for 70 days, starting from October 6, excluding national holidays.

Nguyen Duy Binh, deputy head of the Government Inspectorate, will head the inspection team.

Ministry suggests changes in garment industry

The Ministry of Industry and Trade has submitted a proposal to Prime Minister Nguyen Xuan Phuc suggesting solutions to issues raised by the Vietnam Textile and Apparel Association (VITAS). This includes a proposition to abolish inspections of formaldehyde content in textiles and garments.

VITAS said the current regulation on this inspection has no legal grounds, and is costly and time-consuming. The ministry has recommended that the directive be abolished and instead, a national technical standard for garments and textile products be put in place. The standard is to be promulgated by the beginning of 2017.

Responding to VITAS’ demand for modifications in the garment and textile industry’s planning and strategy, the ministry has scheduled changes next year in keeping with market realities.

The ministry said the sector’s ability in dyeing has been limited due to shortage of capital for investment in modern technologies and waste water management.

To encourage growth, it has proposed that the Government conduct specific studies to grant licences for the establishment of 500- to 1,000-hectare garment and textile industrial parks (IPs), as well as give them preferential interest rates.

Deputy Minister Tran Quoc Khanh recently said that the ministry has tried to solve the sector’s business problems and that legal documents under the ministry’s authority that are causing problems would be abolished in the shortest possible time.

India, Vietnam enhance IT partnership

Vietnamese and Indian businesses discussed new cooperation plans, including the establishment of joint ventures in information technology, during a workshop in Ho Chi Minh City on October 6.

The event was held by the Electronics and Computer Software Export Promotion Council (ESC), the HCM City Computer Association, and the Indian Consulate General in the city.

The ESC will host the INDIASOFT – India IT Show 2017 in Hyderabad – the capital of southern India's Telangana state from February 13-14. The council invited Vietnamese companies to the event.

Indian firms account for 56 percent of the global outsourcing markets.

The Vietnamese software industry is speeding up with 4.6 billion USD in revenues in 2015, 3 billion USD of which came from outsourcing.

Hanoi strives for 8.5-9 percent GDP growth in 2016

Hanoi is doing all-out to achieve the set GDP growth goal of 8.5-9 percent in 2016, affirmed Secretary of the Hanoi Party Committee Hoang Trung Hai at the committee meeting on October 6.

The city recorded a GDP growth of 7.73 percent in the first three quarters and will need to post a growth rate of 10.5 percent in the fourth and last quarter to realise the goal, which is expected to be the highest in the recent six years.

In the past nine months, the city fulfilled 71.6 percent of budget collection with 121.3 trillion VND (5.48 billion VND). It earned 46.36 trillion VND from tourism (2.08 billion USD), a rise of 17 percent year on year. It has 11 more communes recognised as new-style rural areas.

In the last three months, the city will continue removing difficulties for businesses, tackling hindrances to State budget invested construction project, stimulating trade, promoting investment, trade and tourism inside and outside the country, and seeking more export contracts, stated Hai.

Vietnam, Belarus eye reinforced economic cooperation

Secretary of the Ho Chi Minh City’s Party Committee Dinh La Thang suggested stronger economic cooperation between Vietnam and Belarus in the context that the free trade agreement between Vietnam and the Eurasian Economic Union (EAEU) took effect on October 5. 

In a reception for Belarusian newly-appointed Ambassador to Vietnam Vladimir A. Goshin in the city on October 6, the host said the two countries need to push more efforts to step up bilateral economic link in the future. 

He affirmed the municipal authorities will facilitate Belarusian investors' operations in HCM City, contributing to bringing practical benefits to both sides. 

While speaking highly of affiliation between Belarus and the Saigon Transportation Mechanical Corporation (SAMCO) in bus manufacturing, he expressed his hope that Ambassador Goshin will work to assist Belarusian firms in expanding their investment and business in the southern city. 

In a meeting with Chairman of the municipal People’s Committee Nguyen Thanh Phong in the same day, the ambassador appreciated investment climate in HCM City. He said the hopes for greater cooperation between Belarus and HCM City, especially in the fields of his country's strength likely auto manufacturing, infrastructure construction.

Owning world-class resort property now within reach

Just a few years ago, the dream of owning a world-class resort property seemed close to impossible but is now within reach for many Vietnamese.

Few know that Doan Quoc Huy, a young businessman, is among those has helped make this dream a reality for Vietnamese people.

Deputy chairman of BIM Group, a family-run diversified group with operations in property development, trade and service, and agriculture business, Huy is busy with a series of high-profile projects, many of which are currently ongoing. 

Yet new ideas continue to bloom, like the Phu Quoc Marina on Phu Quoc Island off the coast of Kien Giang Province.

The project is inspired by Huy's dream of bringing quality projects to Vietnamese investors, which he has nurtured since he studied property finance in the United States, the world's largest economy.

Huy is aware that the moments spent in classy and luxury resorts are precious and owning such branded resorts is a wonderful opportunity.

"Phu Quoc Marina will not only be the first ever model of a resort and recreation complex on the island, but also a profitable investment solution in the long term," Huy said.

The idea of developing Phu Quoc Marina is welcomed by investors.

Doan Thanh Tam, an investor in Ha Noi, said that until now, information about the Phu Quoc Marina project has been kept secret. "Some of my friends who recently travelled to Phu Quoc Island saw that InterContinental Phu Quoc Long Beach Residences, a component of Phu Quoc Marina, was nearing completion, but I still see no sales activities from the developer."

"This makes Pho Quoc Marina unique," Tâm said.

Any regular investor of BIM Group is aware of the group's style of doing business, Tam said, adding that the BIM Group develops each of their projects with passion. "Phu Quoc Marina is one of the flagship projects of the BIM Group, which will partner with global names for the project's development. Phu Quoc Marina deserves our patience," Tam said.

A source from BIM Group disclosed that Phu Quoc Marina was a pioneer luxury resort and recreation complex on the island. The complex would include hotels, resorts, shophouses and beach-view luxury apartments, as well as condotels and beach-view resort villas.

A number of the world's leading resorts and hotels brands will be present at Phu Quoc Marina, including Regent, the six-star hotel and resort brand entering Viet Nam for the first time; InterContinental, which will provide unmatched management of villas and condotels in Phu Quoc; and Fusion Suites, the brand owned by Serenity Holding known for uniquely-designed resorts.

Notably, Phu Quoc Marina will have a trendy recreational complex, which is expected to enrich entertainment experiences in Phu Quoc. A US$35 million water park covering 30ha will be developed here with thrilling rides and the longest water slide in Southest Asia. The Sailing Club, which is famous in tourism spot Nha Trang City, will also have a presence in Phu Quoc Marina.

A 1km beach square, night markets, beach bars and waterfront shophouses will attract tourists.

Phu Quoc Marina, where large brands come together, is expected to become the second home for many Vietnamese, combining unforgettable experiences and promising returns.

Sacomreal's 217 million shares move to HOSE

HCM Stock Exchange approved the listing of more than 217 million shares of Sai Gon Thuong Tin Real Estate (Sacomreal) JSC (SCR) on the bourse.

SCR has charter capital of VND2.17 trillion (US$97 million).

Before all SCR shares were listed on the northern bourse of HNX, the transfer of shares from one listing exchange to another was passed by the annual shareholders' meeting of the company in 2016.

HCM City-based Sacomreal JSC was established in 2005 to serve the growing real estate industry in the south of Viet Nam. It, currently, has nine associates and subsidiaries in the city and in Long An Province.

The shift is believed to be preparation ahead of the merger between HNX and HOSE later this year. So far, Central Hydropower (HCP) An Phat Securities (APG), Son Ha Saigon (SHA) and AAA of Plastic and Green Environment Phat (AAA) have shifted from HNX to HOSE. 

TVSI ranks seventh among top ten Ha Noi brokerage companies

Tan Viet Securities (TVSI) ranks seventh among top ten market shares for brokerage companies on the Ha Noi's stock market in the third quarter of this year.

During the past quarter, TVSI acquired a market share of 4.31 per cent and entered the top ten, while Bao Viet Securities Co (BVSC) and Maritime Securities Inc (MSI) were removed from the board.

Sai Gon Securities Inc (SSI) and VNDirect Securities Co (VND) remained the two brokers with the highest market shares of 10.8 per cent and 8.46 per cent, respectively.

TVSI estimates a revenue of VND56.7 billion (US$2.52 million) and a pre-tax profit of VND20.6 billion for the third quarter, increased by 52.6 per cent and 127.7 per cent year on year.

Those figures helped TVSI raise its revenue and pre-tax profit for the past three quarters of 2016 to VND133.6 billion and VND31 billion, increases of 30 per cent and 70 per cent respectively from the same period last year.

EU turns away toxic Vietnamese seafood

11 shipments of Vietnamese seafood have been turned back by the EU in the first nine months due to high levels of heavy metals.

Eleven shipments of Vietnamese seafood have been turned back by the European Union in the first nine months of the year due to high levels of heavy metals, according to a statement posted on Vietnam's National Agro-Forestry-Fisheries Department's (Nafiqad) website.

The shipments were contaminated with mercury and cadmium, Nafiqad cited information from the European Commission’s Rapid Alert System for Food and Feed (RASFF) as saying.

The quantity rejected by the EU from January to September was 2.2 times higher than the whole of 2015, Nafiqad said.

On August 15, Vietnamese authorities warned local aquaculture companies that they will not renew their export licenses unless the latter comply with safety standards following a warning from the EU after seafood shipments were found to contain excess levels of antibiotics.

The EU instructed member countries to increase inspections of seafood shipments from Vietnam to the bloc in May this year following the toxic spill caused by Taiwan's Formosa Plastics Group along the central coast in April.

Nafiqad has also asked exporters to follow instructions released on May 11 to monitor seafood from the four affected central provinces and test for heavy metals.

The European Commission’s Rapid Alert System for Food and Feedwas established in 1979. It enables information to be shared efficiently between its members and provides a round-the-clock service to ensure that urgent notifications are sent, received and responded to collectively and efficiently.

Thanks to the RASFF, many food safety risks had been averted in Europe.

Remittances to HCMC climb to US$3.25 bln in first 9 months

Most of the money were sent by Vietnamese living in Europe and the US.

Foreign remittances to Ho Chi Minh City in the first nine months increased 4% on-year to US$3.25 billion, according to the central bank.

The HCM City branch of the State Bank of Vietnam said remittances to the city had continued to hit new highs by the end of September, with most of the money coming from Europe and the US.

Nguyen Hoang Minh, deputy director of the branch, said more of the remittances are being invested in business operations instead of savings.

Statistics from the Central Institute for Economic Management (CIEM) show that half of the money sent back to Vietnam in the past five years has been deposited in banks or exchanged for gold, while more than 16% went into the real estate market, 30% was invested in businesses and the rest was simply spent.

HCM City has reported a steady growth in remittances of 10-12% in recent years, and the figure for this year is expected to reach US$5.8 billion.

Vietnam recorded US$12.25 billion in overseas remittances last year, and was ranked 11th by the World Bank (WB) among the world’s biggest beneficiaries of remittances. It was also third in Asia-Pacific, after China and the Philippines.

More than 80% of the remittances came from overseas Vietnamese, who number more than four million, according to a CIEM study.

IMF lowers 2016 growth forecast

Regional Economic Outlook puts Vietnam's growth this year at 6.1%, down 0.2% from April forecast.

by Doanh Doanh

Vietnam’s 2016 GDP growth will come in at 6.1 per cent and 6.2 per cent in 2017 while growth in ASEAN-5 is expected to remain stable in 2016 before rising modestly in 2017, according to the International Monetary Fund (IMF)’s Regional Economic Outlook (REO) Update released in Washington D.C. on October 5.

The October update for Vietnam’s 2016 growth is down 0.2 per cent compared with its forecast released in April.

Inflation in 2016 is forecast at 2 per cent, which is 0.8 per cent higher than the April forecast. Headline inflation is projected to rise to 3.6 per cent in 2017. “Despite a partial recovery in commodity prices, inflation is expected to remain generally low across most of the region given generally well-anchored inflation expectations and low pass-through as well as excess capacity in manufacturing in several economies,” the report stated.

ASEAN inflation is projected to rise to 2.6 per cent in 2016 and 3.5 per cent in 2017.

Vietnam’s current account balance is expected to narrow to 0.4 per cent in 2016 and 0.1 per cent in 2017.

The IMF previously reported that Vietnam’s economy has experienced solid growth with low inflation, reflecting policy attention to maintaining macro-economic stability. Economic performance was robust through most of 2015, driven by rapid export growth, FDI, and strong domestic demand.

While the near-term outlook is broadly positive, IMF analysts noted that there are downside risks, including from high and rising public debt, slow NPL resolution, prolonged drought, tighter or more volatile global financial conditions, and weak growth in key advanced and emerging economies.

The World Bank also released its East Asia and Pacific Economic Update (October 2016 edition) on October 5. The medium-term outlook in Vietnam, it wrote, is broadly positive but downside risks remain. GDP is projected to moderate to 6 per cent in 2016 accompanied by lower inflation and a small current account surplus. The fiscal deficit is projected to remain high this year but then tighten over the medium term, reflecting the government’s fiscal consolidation plans.

The report said that economic activity in Vietnam slowed somewhat in the first three quarters of this year due to the impact of severe drought on agricultural production and slower industrial growth. But macro-economic stability has been maintained and inflationary pressures remain subdued.

Viettel leads way in 9M ICT growth

Five companies in the information and communications technology (ICT) industry recorded high growth in revenue and profit in the first nine months of 2016.

Viettel led in turnover and profit, followed by the Vietnam Posts and Telecommunications Group (VNPT), MobiFone, VTC, and the Vietnam Post Corporation (VietnamPost).

Mr. Hoang Son, Deputy General Director of Viettel, said it earned VND172 trillion ($8 billion) in revenue during the period, equal to 72 per cent of its annual plan, while profit was VND32.4 billion ($1.4 billion).

Subscriber numbers in nine countries around the world totaled 27 million in the first nine months.

According to Mr. Pham Duc Long, General Director of VNPT, it earned VND95.2 trillion ($4.36 billion) in revenue in the first nine months, equal to 73 per cent of its annual plan. Profit increased 20.1 per cent year-on-year and was equal to 76.5 per cent of the plan. Its State budget contributions rose 11 per cent year-on-year.

Vinaphone had 5.5 million mobile phone subscribers in the first nine months.

It has largely completed its divestment program, except for the Post and Telecommunication Finance Co., Ltd and Maritime Bank.

Mr. Cao Duy Hai, General Director of MobiFone, said that revenue in the first nine months was VND27.5 trillion ($1.2 billion), an increase of 17 per cent year-on-year and representing 76 per cent of the annual plan.

Profit was VND4.3 trillion ($193 million) and new mobile phone subscribers totaled 16 million, equal to 83.2 per cent of its annual plan. It now has 4,000 3G network stations.

The company also has more than 1 million TV subscribers, with turnover in the first nine months reaching VND1 trillion ($46 million).

According to Mr. Dam My Nghiep, General Director of VTC, revenue and profit in the first nine months were equal to 95 per cent of the annual plan and it targets increasing both by 25-30 per cent in the fourth quarter.

VietnamPost’s revenue in the first nine months was equal to 74.4 per cent of the annual plan and an increase of 36.6 per cent year-on-year, according to Deputy General Director Nguyen Hai Thanh.

Turnover and profit from postal delivery, postal finance, and communications reached targets.

Construction underway at Yen Bai Mountain Economic Complex

The MCC Trading Investment Joint Stock Company kicked off construction of the Yen Bai Mountain Economic Complex on October 3, which is expected to spur northern Yen Bai province’s socioeconomic growth.

The complex is located in Nam Khat commune, Mu Cang Chai district, on 150 ha and will include a tea and medlar processing plant, a bio-coal plant, a breeding area, and a wellness resort.

Construction is expected to be completed in July next year, with total investment capital of VND1.2 trillion ($54.5 million).

According to the detailed plan, the bio-coal plant is expected to employ 120 workers when put into official operation by March. The tea and medlar processing plant will be completed in July and will employ 80 workers, with a projected capacity of 700,000 tonnes per year.

MCC will also support local people in intercropping saffron with medlar trees and has made an undertaking to purchase saffron at VND5,000 per kilogram.

At the breaking ground ceremony, Mr. Nguyen Van Khanh, Deputy Chairman of the Yen Bai Provincial People’s Committee, stressed the important role the project will play in the socioeconomic development of the province in general and of Mu Cang Chai district in particular.

“The project will contribute to fulfilling the goals of the Resolution from the National Party Congress in Yen Bai and the scheme for agricultural restructuring in the province in the 2016-2020 period,” Mr. Khanh said. “The province will work closely with MCC on constructing and promoting the efficiency of the economic complex.”

Mu Cang Chai district has thousands of hectares of medlar trees, with annual output at 3,000-3,500 tons of fruit. When the plant is put into operation the medlar will be processed for export.

The Hoa Sen Group held a breaking ground ceremony on May 19 for the construction of the Hoa Sen Yen Bai Hotel and Trade Center project in Yen Bai city, Yen Bai province. The project is expected to be completed by 2020, with total investment of VND1.2 trillion ($54.5 million). It promises to bring significant change to Yen Bai, awakening potential and promoting tourism as a key economic sector of the province in the future, according to Hoa Sen Group.

SBV to tighten non-core investment by banks

The State Bank of Vietnam (SBV) is drafting a new circular to tighten regulations on non-banking investment activities by banks in an attempt to improve financial sector transparency and risk management.

Three levels of risk classification will be adopted for three forms of investment: subordinate company, joint venture, and commercial investment, according to the working group on the circular.

Under the Law on Financial Institutions 2010, banks must invest in non-core business activities through a separate entity to reduce risks.

Several securities firms and insurance companies has therefore been opened with major or full ownership by banks, such as Vietcombank Securities (VCBS), fully owned by Vietcombank, and BIDV Insurance Company (BIC), in which BIDV holds 51 per cent.

In the subordinate company form, banks can own more than 50 per cent of a non-banking financial institution, while the joint venture form allows banks to own from 11 to 50 per cent of non-banking financial institutions, with commercial investment being less than 11 per cent ownership.

“Of the three forms, commercial investment is the most risky,” according to the SBV. “Commercial investment is mostly in other business activities, not banking and finance, which bears greater risk, especially investments in non-listed companies.” The SBV will therefore discourage banks from investing in this form.  

Ten conditions have been set in the new circular for banks who wish to make commercial investments, including the bank having earning profit for three consecutive years, bad debts being under 3 per cent, and sufficient risk provision in place, as regulated by law. Moreover, the invested units must have functions that relate to and support the bank’s operating activities.

For the joint venture form, the SBV said that in some cases the investee bank is unable to have the right to make crucial decisions on operations and risk supervision. As the ownership structure is more complex in the joint venture form, the invested financial institution may be manipulated by other investors, so the level of risk in joint ventures must be considered higher than the subordinate company form.

Current regulations still make risk assessments easy for banks when investing in a joint venture. In particular, the capital the bank can invest in the joint venture is not directly deducted from its Tier 1 capital when calculating its capital adequacy ratio (CAR), under existing Circular No. 36.

In the new circular the SVB will set stricter conditions for joint ventures compared to the subordinate form in terms of management, operations, and the experience of the financial institution.

MoU signed on Food Branding Strategy

A memorandum of understanding (MoU) was signed on October 4 on building and implementing the Vietnam Food Branding Strategy Program and increasing the value of agricultural products either produced or processed in Vietnam.

The Vietnam Trade Promotion Agency (Viettrade) under the Ministry of Industry and Trade, the Center for the Promotion of Imports from Developing Countries (CBI) and the European Trade Policy and Investment Support Project (EU-MUTRAP) held the signing ceremony for the MoU and also a workshop on the program.

Participants included Deputy Minister of Industry and Trade Do Thang Hai, Deputy of Ministry of Agriculture and Rural Development Tran Thanh Nam, H.E. Bruno Angelet, EU Ambassador to Vietnam, H.E. Nienke Trooster, Ambassador of the Netherlands in Vietnam, and representatives from ministries, industries and enterprises.

The signing ceremony and workshop are “the beginning of promoting activities in the program and implementing strategies in the future,” Mr. Hai told the ceremony. He also told VET that “we hope the building of the program will strengthen trade promotion and support in potential sectors in Vietnam.”

Ambassador Angelet said that food in Vietnam is fantastic and “what people don’t really know is a lot of food is exported, and it is amazing to see how Vietnam manages to produce and export coffee, shrimp, cashew nuts, and pepper,” he told VET. “These are a few problems in the structure and the capacity to process and export. I think the MoU we signed today will help Vietnam to integrate and develop trade. It is also a great opportunity to develop product brands.”

Ensuring quality remains a difficult task. In order to build sustainable branding development, Vietnam needs to focus on quality assurance and ensuring food safety. Vietnamese food enterprises “need to maintain special features and have good communication campaigns,” said Mr. Bui Huy Son, Head of Viettrade.

Mr. Cao Ken, Vice Secretary General of the Vietnam Coconut Association, believes that Vietnamese enterprises meet various challenges in promoting food brands. “The biggest difficulty for enterprises is building brands, because they do not have full awareness about branding and about 90 per cent enterprises have to pay to build their brands,” he told VET.

Starting in 2014, the aim of the program is to build and promote Vietnamese food branding and to increase awareness and recognition of the value of Vietnamese food products. The program is divided into four stages. In 2016 the Ministry of Industry and Trade and enterprises and associations completed the first and second stage. The third stage being is implemented from March 2016 to March 2017, and the final stage will feature consultancy and communication campaigns.

High-class fashion now available online at Ferosh

Ferosh, the first online shopping store distributing only high-class fashion clothing and accessories, was launched recently. The website aims to give customers access to a wide range of the highest quality designer labels and fashion brands of today.

Designer labels are increasingly de rigueur for women seeking to express themselves through their choice of clothing and stylistic sensibilities. The cut of the fabric, the meticulousness of the tailoring, and the creative and artistic ideals of the designs combine to define the stylistic qualities of each piece.

Developed on a clean, simple, user-friendly online platform, Ferosh has been launched as a trend-setting shopping destination where customers can explore an extensive collection of high-end fashion products. Each item displayed on Ferosh is carefully selected to appeal to the high-end market. The criteria for selection focus on the qualities and styles of different designers in terms of materials employed and the treatment of the fabric.

Since the project first began in 2015, Ferosh has worked to combine an enjoyable shopping experience with access to the best the market has to offer. The company has developed strong relationships with leading brands such as La Pham, LEA’S, Wephobia, So Young, SHE, and Hobb Design as well as famous designers like Vu Tran Duc Hai (the VTDH brand), Nguyen Thao (the Happy Clothing brand), and a number of Project Runway candidates.

“Ferosh’s vision is to become the foremost fine fashion online destination for Vietnamese buyers,” said Ms. Nguyen Thanh Huong, the website’s founder. “Through a combination of the quality design of the fashion products we present and the smart design of the website, Ferosh is committed to providing customers with the best fashion shopping experience available online.”

Customers can access the website at www.ferosh.vn for the latest designer clothes and collections.

Australia considers importing frozen shrimp

The Vietnam Trade Office in Australia said the first batch of Vietnam's frozen shrimp will arrive in Australia in early 2017 if everything goes smoothly.

The news is the result of a Ministry of Agriculture and Rural Development visit to work with Australia's Department of Agriculture and Water Resources. The delegation was led by deputy minister Vu Van Tam.

The Australian counterpart said they were willing to consider importing frozen shrimp from Vietnam. This is a huge opportunity for the shrimp export industry and agriculture sector.

Shrimp is the most popular seafood in Australia with annual consumption of 50,000-60,000 tonnes. In order to meet the demand, Australia has to import an average of 30,000 tonnes of shrimp each year.

According to the Ministry of Industry and Trade, Vietnam exported 1,724 items to Australia in the first six months. In September 19, the first cargo ship of mango was successfully exported after meeting all requirements and was sold at NP Supermarket in Perth.

Vietnam Trade Office in Australia is still working with other businesses to maintain mango exports to Australia. Mangos are the second Vietnamese fruit successfully exported to Australia, after litchi.

Vietnam hopes Australia will allow the import of Vietnamese dragon fruit in 2017.

Paltry technology investment weakens competitiveness

Former head of the Central Institute for Economic Management (CIEM) Dr. Le Dang Doanh has said Vietnamese businesses are only investing a paltry 0.02% of their total profits in science and technology, stunting their competitiveness. 

He made the comments at a recent seminar in Hanoi on developing the private sector.

Doanh made the comparison with South Korean firms, which invest up to 40%.

Vietnam’s annual state budget spending for science and technology is also low. A report from the State Audit showed that spending in the sector only accounted for 1.36% of the state budget in 2014, lower than the set target by the National Assembly of 2%. 

In the first nine months of this year, the state budget spending for science and technology was only VND215 billion, 30 times lower than that for the transport and agricultural sectors.

The Science and Technology Law 2013 stipulated that each company must spend 3%-10% of their total profits on technological development.

However, only a small number of Vietnamese companies can do this as many of them are small-scaled with modest profits. Meanwhile, state-owned science and technology centres operate ineffectively, failing to provide companies with what they really need.

"It's time for Vietnamese firms to focus on products with added values from the technological development, instead of depending on cheap labour and land rental advantages or relationship with authorities," Doanh said.

Abject failure on state enterprise financial transparency

Many state-owned firms are being slow or avoiding their responsibility to publish their business results. 

According to the Ministry of Planning and Investment, member companies of state-owned corporations, where the state holds 100% of charter capital, must publish their financial reports to ensure transparency.

However, as of September 20, out of 432 firms, only the Vietnam Air Traffic Management Corporation fully complied with Decree 81, issued in September 2015, about the disclosure of information by state-owned enterprises.

All firms were required to file reports with the Ministry of Planning and Investment within six months after the decree took effect, but only a few had done so. 140 firms only filed information in one or two of the eight required categories of information.

12% of firms issued assessment reports on the results of annual production and business plans and results over the previous three years, 8% reported on the performance of their public duties and social responsibilities and only 14% submitted 2015 financial reports.

By the end of July, seven out of 22 ministries and departments and 24 out of 63 cities and provinces and 16 out of 31 major corporations submitted reports.

Vietnam Railways Corporation, Vietnam Northern Food Corporation (Vinafood 1), MobiFone, and the Housing and Urban Development Corporation failed to submit their 2015 financial reports.

The Ministry of Planning and Investment concluded that the number of firms that had followed the regulations were low and the quality of the contents sparse.

The management of the firms and agencies may face reprimands or warnings for their failures. Chairs or state representatives will have their salaries cut, be fired or face criminal charges if they fail to carry out their tasks or their actions lead to financial losses.

US$1.03 billion industrial zone to be built in Nghe An province

Work is set to start on a US$1.03 billion industrial-urban zone covering 3,200 hectares in Nghi Loc and Dien Chau districts in the central province of Nghe An in 2017.

The project is co-invested by Vietnam’s Civil Engineering Construction Corporation No. 4 - Joint Stock Company (Cienco4) and Thailand’s Hemaraj Land And Development Public Company Limited, as a result of an agreement signed recently between the two companies and the Nghe An provincial People’s Committee.

The project, located in Nghe An’s Dong Nam Economic Zone, will be implemented in seven phases over 21 years, with the first phase covering nearly 500 hectares in Nghi Loc district scheduled to be completed in 2021.

The objective of the project is to build a complete industrial zone infrastructure system, logistics facilities and an urban area, aiming to lure secondary investors’ to invest in building factories and production institutions.

The investors have pledged to develop the industrial zone in line with Nghe An province’s orientations, attract secondary investors to manufacture products of high quality and meet international standards, and protect the environment towards sustainable development.

Website between Government and businesses makes debut

Minister, Chairman of the Government Office Mai Tien Dung on October 4 announced the debut of a website to receive comments from businesses sent to the Government.

The website, http://doanhnghiep.chinhphu.vn/, has come into operation since October 1, 2016.

The website helps the Government interact with businesses, he said, in the future, a website between the Government and the people will be launched.

Comments, difficulties, and obstacles raised by the businesses, especially in terms of mechanisms, policies, transactions and expenditures will be answered by ministries, agencies and localities.

The Government Office and the Chairman will set up a working group to directly supervise and answer these questions.

Urea imports up sharply in Jan-Sept

Urea fertilizer imports in the first nine months of this year surged 59% compared to the same period last year, according to a report of the Ministry of Agriculture and Rural Development.

The report said in January-September, Vietnam spent US$806 million purchasing nearly three million tons of fertilizer from foreign markets, down 6% in volume and over 20% in value year-on-year.

While imports of other fertilizer products fell in the nine-month period, urea soared 59% year-on-year to 443,000 tons.

Shipments from China accounted for 41.5% of total fertilizer imports, and the remainder was from Indonesia, Laos and Malaysia. Fertilizer from Malaysia and Indonesia soared by three times and 87% in volume year-on-year respectively.

Higher urea fertilizer imports were attributable to lower-than-expected supply from domestic fertilizer plants, according to the Vietnam Fertilizer Association.

Ninh Binh urea fertilizer plant has a daily capacity of 1,760 tons, equivalent to 560,000 tons a year. The plant has long been expected to help Vietnam replace fertilizer imports, stabilize prices and ensure long-term supply for the agricultural sector. However, it has not been faring as well as expected, leading urea fertilizer imports in the first nine months to rise.

Fertilizer production still remains attractive to foreign investors. For instance, South Korean firm Korea-Vietnam Fertilizer Co Ltd has broke ground for a NPK fertilizer plant with a designed capacity of 360,000 tons per year in HCMC.

S.Korean firm keen on entertainment complex in Bac Ninh

South Korean firm Global Investment Fund Forum has worked with leaders of Bac Ninh Province over a project to develop an integrated entertainment complex including in a horse racing track in the northern province.

Choi Hank Soo, chairman of Global Investment Fund Forum, said the group wants to develop the complex in Tram Lo Commune, Thuan Thanh District with an initial investment of US$500 million, a source from the Bac Ninh Department of Planning and Investment told the Daily.

Choi said Global Investment Fund Forum would make investment preparations for the project in accordance with Vietnam’s prevailing regulations and hoped the province would create favorable conditions for the company to implement the project.

Nguyen Tu Quynh, chairman of Bac Ninh Province, threw his weight behind the project, according to information posted on the provincial portal bacninh.gov.vn

Thuan Thanh District is home to many traditional craft villages of great historical and cultural significance, Quynh said. He added that a 27-hole golf course is going up in the district.

He said the project of Global Investment Fund Forum is feasible but subject to conditions, so the province will have to seek the Government’s permission before licensing it. The group should work with local State agencies to finish procedures for submission to relevant ministries and the Government for consideration.

Bac Ninh Province pledged to complete legal procedures for the project within ten days after the Government gives the nod. It is expected to turn Thuan Thanh into a district of tourism services and events that can help attract more visitors to Bac Ninh.

In the January-September period, Bac Ninh approved 111 foreign direct investment (FDI) projects with total registered capital of US$600 million.

South Korea topped the list with seven projects capitalized at US$477 million, followed by Japan with six projects and US$38.6 million.

The northern province has attracted 908 FDI projects with total capital pledges of US$12.1 billion, including 400 projects of South Korean firms worth over US$8 billion.

EVN likely to get electricity pricing power

The Ministry of Industry and Trade has proposed allowing Vietnam Electricity Group (EVN) to have power to make decisions on electricity tariffs, according to a draft rule on retail power price adjustment.

The current rules do not permit EVN to actively decide on power pricing. The Prime Minister’s Decision 69 specifies that the minimum interval between two electricity price hikes is six months, and EVN’s price increases of 7-10% must be approved by the ministry. The highest spike which the ministry can decide is 20%.

In the draft which has been passed around for comment, the ministry suggests allowing EVN to revise up power tariffs every three months by a range of 3% to 5% on the event there are changes in the price constituents. The maximum rise per year is 20%.

In addition, the ministry itself seeks the right to adjust up electricity prices by 5-10%, with the time between two revisions shortened to three months. The maximum level that the ministry can handle is 40%.

With this, EVN would have the right to raise power prices by 20% per year while modifications by the trade ministry would range from 20% to 40%. “This is a relatively considerable extension of authority, so it needs careful consideration,” says the Vietnam Chamber of Commerce and Industry.

The reason is that annual inflation in Vietnam has never been higher than 20% since 1995. Thus, giving EVN and the Ministry of Industry and Trade such power over electricity price revisions is far from normal.

However, VCCI agrees the interval between the two price adjustments should be cut short (from six to three months) and reduce the minimum margin for each price update (3% instead of 7%).

VCCI suggests that if a price increase is 3-5%, the ministry should be free to make decisions. If the rate is higher, the Prime Minister should have a say.

On how to calculate the average selling price, the draft says it is determined based on the level of the electricity market and power purchase contracts. Still, only 50% of the power output is offered on a competitive electricity market, while the remainder is sold under contracts, according to the Electricity Regulation Authority of Vietnam.

VCCI proposes power price revisions be done in a transparent manner, and that the participation of the parties involved in pricing is needed. The draft says they may be “invited” instead of being obliged to, which could affect the interests of buyers.

While electricity sellers are represented by EVN with significant control over input prices, for buyers, there are only vague regulations on the participation of the Vietnam Fatherland Front in examining the annual cost of power production, rather than a variety of representatives from other agencies.

Finance ministry’s tax break proposal rejected

Deputy Prime Minister Vuong Dinh Hue has turned down the Ministry of Finance’s proposal to give tax breaks to corporate and individual taxpayers that have disbanded their businesses.

The proposal is rejected as it is the matter of tax management and has nothing to do with the challenges faced by local businesses, according to a conclusion by Hue which was announced by the Government Office.

The Ministry of Finance in a draft resolution suggested the Government write off nearly VND8 trillion (US$359 million) in overdue tax debts and fines owed by taxpayers whose businesses were dissolved or went bankrupt before January 1, 2014.

In addition, the ministry proposed freezing the tax debts and charges on late payments of firms and household businesses for which dissolution or bankruptcy happened between January 1, 2014 and December 31, 2015. The debts to be frozen totaled VND6.7 trillion.

The proposal quickly drew criticisms from experts and businesses when it was unveiled. In response to the opposition, the ministry explained on its website that the move was aimed at reducing debts in the economy.

Besides, to deal with those enterprises closing debt-laden businesses and opening new ones, the ministry suggested they only get a new business registration certificate two years after their closure.

Some of the ministry’s previous tax break proposals have already been rejected. Last year, the National Assembly voted down the ministry’s scheme to clear tax debts owed by ailing enterprises, prompting it to present another tax break proposal with more beneficiaries.

According to the announcement of the Government Office, Deputy Prime Minister Hue has approved in principle the clearance of overdue fines for taxpayers whose goods and services are paid by the State budget.

Hue requested the ministry to clarify impacts of the 50% personal income tax reduction on workers in the high-tech sector and agricultural and farm produce processing sectors using advanced technologies. If necessary, the policy would only benefit individuals working at small and medium-sized enterprises in the high-tech industry and priority sectors in 2017 and 2018.

In the long term, the ministry is told to review and suggest amendments and supplementations to the Law on Personal Income Tax.

Marriott acquires Sheraton Hotels

Marriott International announced on September 30 it was expanding into 30 of the most desirable and prestigious hotel brands with the addition of the Starwood Hotels & Resorts portfolio.

The resulting new company will operate or franchise more than 5,700 properties and 1.1 million rooms, representing 30 leading brands from the moderate-tier to luxury in over 110 countries. With the completion of this acquisition, Marriott’s distribution has more than doubled in Asia and the Middle East and Africa combined.

“Throughout our nearly 90-year history we have never stopped searching for innovative ways to serve our guests,” said Mr. J.W. Marriott Jr., Executive Chairman and Chairman of the Board of Marriott International. “With the addition of Starwood’s strong brands, great properties, and talented people, we have dramatically expanded our ability to provide the best experiences to our customers.”

“We also welcome the tremendous responsibility as the world’s largest hotel company to be a good global steward, providing new opportunities for our associates and building the economic strength of the communities we call home.”

Members of Marriott’s leading loyalty programs, Marriott Rewards - which includes The Ritz-Carlton Rewards - and Starwood Preferred Guest (SPG) are also invited to link their accounts at members.marriott.com to enjoy the benefits, recognition and experiences each program has to offer.

Members will have their status matched across programs and be able to transfer and redeem points across programs for travel to more destinations than ever before.

“We believe that Marriott now has the world’s best portfolio of hotel brands, the most comprehensive global footprint, and the most extensive loyalty programs, providing an unparalleled guest experience,” said Mr. Arne Sorenson, President and CEO of Marriott International. “Combining Starwood’s brands with ours better enables Marriott to reach its goal of having the right brand in the right place to serve our loyal guests and welcome new ones.”

“We can now provide a better range of choices for our guests, more opportunities for our associates, and greater financial benefits for our owners, franchisees, and shareholders.”

Members who link their accounts will be able to transfer points at a three-to-one ratio (three Marriott Rewards points equals one SPG Starpoint) between the programs for redemption stays or on the Marriott Rewards Experiences Marketplace or SPG’s Moments platform.

Marriott International is the world’s largest hotel company and based in Bethesda, Maryland, in the US, with more than 5,700 properties in over 110 countries. It operates and franchises hotels and licenses vacation ownership resorts.

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