BUSINESS IN BRIEF 14/8 Import costs hit textile firms Viet Nam's garment and textile industry remains reliant on imported raw materials, concerning enterprises seeking to take advantage of zero tariffs mandated in the Trans-Pacific Partnership (TPP), which has been under negotiation. Statistics showed that in the first seven months of this year, the total export turnover of garment and textile products reached US$9.636 billion, a rise of 16.3 per cent year-on-year. But, the import of raw materials for the industry hit $7.646 billion, up 18.2 per cent. Nguyen Thi Bich Lien, deputy director of Dong Nai Industrial Garment Co, said dependence on imported raw materials would be the biggest challenge to the country's garment industry when TPP came into force. The TPP's "yarn-forward" rule of origin required nations to use a TPP member-produced yarn in textiles in order to receive duty-free access. However, Viet Nam currently imported raw materials from many countries which were not members of TPP, such as China. Efforts to increase raw materials made in Viet Nam had not met demand yet, she said, adding that the locally produced raw materials were often sold at higher prices than imported and delivery took longer. Director of Dong Tien Garment Co in southern Dong Nai Province Vu Ngoc Thuan said many localities did not aim to attract investments in knitting and dying due to concerns over environmental impacts. Enterprises hoped that TPP negotiators would agree that Viet Nam, Malaysia and Mexico could import raw materials from countries which were not TPP members and receive duty-free access. Still, investment in manufacturing raw materials for the industry was critical for development, together with a greater participation in the global supply chain, experts said. The 19th TPP negotiations were scheduled for the end of this month in Brunei. The US, the biggest importer of garment and textile products from Viet Nam, accounting for about 50 per cent of the industry's export turnover, was among 11 members joining the negotiations. Viet Nam was the second biggest garment exporter to the US with a market share of 8 per cent, after China. Vietnamese garment and textile products were taxed an average 17 per cent by the US. Ha Noi to lend $15m in bid to stabilise prices Ha Noi will provide VND318 billion (roughly US$15 million) in zero-interest loans between July 2013 and April 2014 in a bid to stabilise the price of essential goods. The announcement was made by Ho Quoc Khanh, Manager of the Trading Management Division under the Ha Noi Department of Industry and Trade, at a conference held in the capital last Friday. The stabilisation programme will focus on seven essential commodities including vegetables, meat, eggs and aquatic products. Stockpiled commodities such as sugar, processed food and notebooks will be excluded from the programme. Local firms were also encouraged to use their own capital to balance supply and demand and stabilise prices. Enterprises who participate in the stabilization programme will need to align prices with the city's Department of Finance. Price increases can only be granted by the municipal finance department and industry and trade department, with adjustments within 10 per cent of the market price. The programme aims to give priority to industrial zones, low-income residential areas and canteens and hopes to provide consumers with clean, high-quality food. Plans are underway for 38 Vietnamese Fairs to be held in suburban districts and for 400 mobile food outlets to provide subsidised food to local customers. State Bank funds asset management firm The National Fund for Monetary Policy Implementation has disbursed VND500 billion (US$24 million) in charter capital approved by the State Bank of Viet Nam (SBV) last week. The money was transferred to the Viet Nam Asset Management Company (VAMC) to fund the removal of non-performing loans from Viet Nam's banking sector. It will attempt to remove between VND80 trillion to VND100 trillion ($3.8-4.76 billion) worth of non-performing loans, with recovery ratios between 20 and 40 per cent. The VAMC will have the option of issuing special bonds and shares, or investing capital directly in credit institutions hampered by non-performing loans. It is expected that VAMC bonds will carry a validity of five years at zero per cent interest and that banks can use the bonds as security to apply for refinancing loans from the central bank. It is also estimated that the company's annual revenues will hit VND60 billion-160 billion ($2.85 million-7.6 million) in the next five years, allowing it to break even. The VAMC's Members Council, Management Board and Board of Controllers will oversee the programme. Dang Thanh Binh, the SBV's former Deputy Governor, will take the reins as Chairman of the Members Council, accompanied by Nguyen Huu Thuy, from the SBV's Banking Inspection and Supervision Agency, as General Director. Speaking about the programme, the new General Director said the VAMC would be rushing to issue the special bonds to 10 banks in the next two months to purchase VND10 trillion ($476.1 million) worth of bad debt. He added that the IFC, a member organisation of the World Bank, TPG Growth LLC and Standard Chartered Plc had contacted the VAMC to discuss solutions to reduce bad debt in Viet Nam's banking sector. Shortlist due for Binh Dinh's $27b oil project The Binh Dinh People's Committee and the Petroleum Authority of Thailand (PTT) will on Thursday announce the list of international bidders and consultants for the mooted large-scale Nhon Hoi oil refinery project. Tran Thi Thu Ha, deputy chairwoman of the People's Committee, was one of a number of local politicians and experts to speak about the proposed development of the major Thai-invested petrochemical complex during a dialogue co-hosted by the Voice of Viet Nam (VOV) and the Binh Dinh Radio and TV Station on Sunday. During the discussions, experts proposed practical measures be put in place to ensure the effective implementation of the US$27-billion investment, which is slated to be built in Nhon Hoi Economic Zone. The Ministry of Industry and Trade said it has asked the Prime Minister to include the project in the national oil and gas zoning plan running to 2015. Deputy Prime Minister Hoang Trung Hai called for the People's Committee to supervise the investors in building the project and for the ministry to assess the efficiency and ability of the work. When operational, the refinery will have a capacity of 660,000 barrels per day, or 30 million tonnes of crude oil per year, a five-fold increase over the output of Dung Quat, Viet Nam's current largest oil refinery. The new facility is expected to use crude oil imported from the Middle East (45 per cent), Africa (25 per cent) and South and Central America (30 per cent). Its products will supply domestic demand as well as exports to other countries in the region. The PTT has finished a feasibility study on the project and late last year Binh Dinh's provincial authority submitted the plans to Prime Minister Nguyen Tan Dung to be considered and approved. The province has decided to set up a consultancy team with professionals experienced in refineries, finance, banking and the environment. The group will closely work with the PTT in handling any inquiries raised by ministries. Construction of the project is expected to begin in 2016 and the refinery to be commercially active by mid-2020. If the Government approves the plan, it will be the biggest foreign-invested project in Viet Nam. Meanwhile, the participants in the dialogue stressed the need to develop infrastructure in Nhon Hoi Economic Zone (EZ), provide incentive policies for foreign investors and develop human resources to meet demand for skilled workers in the EZ. Since the beginning of this year, Binh Dinh Province has attracted 52 foreign direct investment (FDI) projects with a total capital of $1.7 billion. Marubeni eyes on metro construction in Da Nang Japan's Marubeni company will conduct a pre-feasibility study of the metro system project in Da Nang, director of the city's investment promotion centre Lam Quang Minh has said. Minh stated the Japanese company also paid attention to the project during an investment promotion conference in Japan. The central city plans to build the metro system in 2030, which would help connect the south of the city to its downtown area. During the investment promotion in Japan, Da Nang also called for support from Kawasaki city in improving the second phase of its Tien Sa port.- Otawara set to build relationship with Da Nang Japan's Otawara city would seek to build friendship ties with Da Nang as part of increased connectivity in the Southeast Asian region, vice major of Otawara city Nagayama Hayashi said at a meeting with Da Nang officials yesterday. "We set up relationships with cities in the US and England. Da Nang would be our city of choice for establishing co-operation in the Southeast Asian region," Nagayama said. "We will send a business group to explore investment and co-operation opportunities with Da Nang in the fields of agriculture, hi-tech industries, education and culture." The International University of Health and Welfare will co-operate with the Da Nang Medicine and Pharmaceutics University in human resources training. Major trade opportunities beckon at Japanese exchange The Viet Nam Chamber of Commerce and Industry (VCCI) and the Japanese Kansai Bureau of Economy, Trade and Industry will host a business exchange for Vietnamese and Japanese companies in Ha Noi on September 4. Around 10 Japanese firms from the machinery, textile, recycling and telecommunications industries will be present to find local suppliers, manufacturers and selling agencies for their products. Other firms will be looking to source local textiles and bamboo craft products to sell in Japan.- Bank pre-tax profits rise in H1 Pre-tax profits of commercial banks in the first half of the year was estimated to total VND24.2 trillion (US$1.125 billion), up 1.2 per cent against the same period last year, vn.economy website quoted a source as saying. VietinBank, Agribank, Vietcombank, BIDV, and Sacombank gained the highest pre-tax profits by the end of June, the sources was reported to have said. Except for foreign banks with H1 pre-tax profit decreasing by 15.3 per cent year-on-year, State-owned and joint stock commercial banks both posted higher results in H1 with a rise of 8.8 per cent and 4.4 per cent. State-owned banks accounted for 48 per cent of the total pre-tax profits of the entire banking system while joint stock commercial banks made up 35 per cent of the total profits. The source said slow lending growth caused a lower net interest income of commercial banks in H1 by 2.8 per cent year-on-year. However, income from the sale of securities and other financial activities rose during the period, offsetting the decline in net interest income and losses from foreign exchange trading. Operating costs of the whole banking system falling 2.7 per cent against the same period last year also helped to raise profits of the whole system. However, higher non-performing loan (NPL) provisions for credit losses increased nearly 12 per cent. Return on equity (ROE) and return on asset (ROA) of the whole banking system were down to 8.6 per cent and 0.9 per cent. Phu Quoc Fish Sauce awarded Protected Designation of Origin by EU The famous Phu Quoc fish sauce from Kien Giang Province has been awarded the Protected Designation of Origin (PDO) by the European Commission. According to experts, trademark protection in 28 countries in Europe will provide a strong base for the Phu Quoc fish sauce in the EU market. Phu Quoc, the biggest island off the south-western province of Kien Giang, has been well known for long for its fish sauce. Fish sauce manufacturing in Phu Quoc has been a traditional activity for more than 200 years. The island has currently 80 fish sauce processing businesses that provide about 20 million liters per year. Vietnamese Products Fair 2013 attracts 250 businesses Around 250 businesses will showcase their products at the Vietnamese Products Fair 2013 which will start from September 11 to 15 at the Exhibition & Fair Center in Hanoi City. Products on display will range from food items, beverages, clothes, garments and textiles, footwear, electronic appliances and devices, household utensils, home interior accessories, and handicrafts. There will be a unit to help consumers distinguish between real and fake products at the Fair, which is being held in response to the campaign ‘Be Vietnamese,  Buy Vietnamese products’. The event will also aim to create a fair platform for Vietnamese producers, and encourage them to promote competition in the market. Businesses participaing in the fair will be supported by 50 percent of booth rental. Ministry tries to keep prices stable The Ministry of Finance has just asked relevant agencies to curb the soaring prices of essential goods and services. According to the ministry, the now stable inflation rate is threatening to rise again while storm season is still going on, and the threat of animal diseases is still strong, and must be watched carefully. The ministry also predicted that medical fees and prices of several commodities would rise when the new school year starts, on the National Day September 2, and during the last months of the year, when people start preparing for Tet Holida. After the storms passed and inflicted damages on many localities, vegetable prices have been on a steady rise due to their scarcity. Local authorities were asked to direct local departments of finance, health as well as police and customs agencies and enterprises, to try and keep prices stable. The authorities must tightly monitor the market and CPI in order to create suitable measures for price stabilisation. Individuals and organisations that take advantage of the situation to increase  prices unreasonably will be strictly dealt with. Meanwhile, the electricity price increased by 5% on August 1. The Ministry of Industry and Trade suggested letting the wholesalers hike fuel retail prices by the maximum of 5%. Agricultural sector pilots one-stop-shop customs mechanism The Ministry of Agriculture and Rural Development will pilot the national one-stop-shop (OSS) customs mechanism in seven to ten administrative procedures in its seven export areas. Seven units that will run the OSS customs mechanism on a trial basis include the Directorate of Fisheries, the General Department of Forestry, the Viet Nam Administration of Forestry, the Department of Animal Health, the Plant Protection Department, the Department of Cultivation, the Department of Husbandry and the National Agro-Forestry-Fisheries Quality Assurance Department. As scheduled, the pilot roadmap would be completed in July 2014. The Ministry asked the participating units to review, select and standardize administrative procedures and make adequate preparations for the trial run. The units are required to jointly study an information infrastructure for the pilot project. Earlier, the PM released Decision 48/2011/QD-TTg in August 2011 on piloting the implementation of the national OSS customs mechanism in Viet Nam with three different phases. In the second phase (January-December 2013), the OSS customs mechanism is piloted at the Ministry of Industry and Trade, the Ministry of Finance and the Ministry of Transport. The third phase (January-December 2014) will cover the Ministry of Healthcare, the Ministry of Agriculture and Rural Development, and the Ministry of Natural Resources and Environment.   Japan Marubeni interested in Da Nang’s metro project Japan’s Marubeni company will conduct a prefeasibility study of a metro system project in central Da Nang city, according to Director of the city’s Investment Promotion Centre Lam Quang Minh. Minh has stated Marubeni paid attention to the project during an investment promotion conference in Japan. The central city plans to build the metro system in 2030, which would help connect the south of the city to its downtown area. During the investment promotion in Japan, Da Nang also called for support from Kawasaki city in improving the second phase of its Tien Sa port.- Coffee output forecast to fall Vietnam’s coffee production in the 2013 – 2014 crop is forecast to drop 15 percent from the previous crop to stand at 1.2 million tonnes, turning out the second bad harvest that would hit the country in a row. The Vietnam Coffee and Cocoa Association pointed the finger to droughts and hailstorms that occurred in June as the culprits. The weather pattern destroyed 5,000 hectares of coffee plants and severely affected another 27,000 hectares in the Central Highlands – the country’s largest coffee-growing area. As of July, the country shipped 890,000 tonnes of coffee worth nearly 1.91 billion USD. Prices of export coffee averaged 2,160 USD per tonne, a year-on-year increase of 2.8 percent. The shipment last month experienced a yearly plunge of 21.3 percent to 90,000 tonnes and is projected to fall further in August and September. At present, Germany and the US are the largest markets of Vietnamese coffee, accounting for 13.1 percent and 11.4 percent of the market share, respectively. However, export earnings from these markets have plummeted 21.1 percent and 28.6 percent year on year, respectively. Record construction time requested for Co Chien Bridge Investors need to complete Co Chien Bridge construction project within 24 months since they do not face any impediments relevant to clear space handover or capital arrangement for the project. The order was made by Minister of Construction Dinh La Thang at the project’s re-commencement ceremony in southern Tra Vinh Province in early August 2013. If construction of the build-operate-transfer (BOT) project reached the deadline (August 2015), it would set a new record in the construction sector in construction progress since this is a complex pre-stressed concrete bridge building project mammoth in scope and the 24- month construction deadline is more than one year faster than that of bridge projects having similar scope and complexity. In light of the project’s approved design, the bridge’s main section consists of three 150 metre long spans which are among the longest pre-stressed concrete bridge spans in Vietnam currently. General director Can Hong Lai at Civil Engineering Construction Corporation 1 (Cienco 1), said Co Chien Bridge project’s peculiarity was not in its technical factor but in state participation in the project’s capital structure. Accordingly, of the project’s total investment capital of VND2.308 trillion ($110 million), contribution by a consortium encompassing Cienco 1, Tuan Loc Construction Investment JSC and Nam Bay Bay Investment JSC covers 54.7 per cent, tantamount to VND1.264 trillion ($60.2 million) while the remaining 45.3 per cent or VND1.044 trillion ($49.7 million) will be offset by state capital. For capital recouping, the investors were approved to build a toll station in Tra Vinh province for toll collection in around 20 years. “This is the first BOT transport infrastructure project with approved state capital contribution surpassing 30 per cent of total investment capital,” said Thang. Earlier, one of the factors leading to collapse of the investor consortium consisted of Cienco 1, Cienco 4, Cienco 8 and Nam Bay Bay JSC in March 2011 was that the investors could not afford the project’s huge capital investment without state capital support. “From Co Chien Bridge case, more and more important infrastructure projects would come on stream with deeper participation of private investors,” said Thang. According to the Ministry of Transport, once completed, Co Chien Bridge, together with Ham Luong and Rach Mieu bridges also in the Mekong Delta region, would help relieve traffic overload in National Highway 1 and shorten travel from Ho Chi Minh City to Tra Vinh by 70km as well as helping to bolster Dinh An Economic Zone efficiency when it becomes up and running. Vincom Mega Mall turns the screws on struggling rivals The launch of Vincom Mega Mall Royal City, the largest underground retail complex in Asia, is expected to dramatically change the retailing landscape in Hanoi, and pose stiff competition to the current retail centres in the city. During the first opening week, the junction of Nga Tu So and Nguyen Trai streets where the Vincom Mega Mall Royal City is located was surprisingly busy due to thousands of potential customers visiting the centre in their cars and on motorbikes. The mall space was filled with both shoppers and curious visitors despite a rainy weekend. In its white paper “From ice-scream to ice rink” CBRE described the large footfall over the first few days of its opening as “very impressive and greater than one might have ordinarily expected to see in Vietnam shopping centres.” “Vincom Mega Mall Royal City has indeed created a big bang in the Hanoi market,” the property consultant stated in the white paper. With an impressive total area of over 230,000 square metres, Vincom Mega Mall Royal City is five times the size of the previous largest shopping center in Vietnam and has become Asia’s largest underground retail complex, and one of the largest shopping malls in Asia. By size, the new complex is equal to Siam Paragon, the second largest shopping mall in Bangkok. The introduction of Vincom Mega Mall Royal City, together with its upcoming sibling Vincom Mega Mall Times City, is expected to shape the future of the Hanoi’s retail market as well as Vietnam’s retail market, CBRE has claimed. Upon completion, these two shopping centres will provide a total of approximately 460,000sqm retail space, more than equal the total space of all other shopping centres in Hanoi. The massive scale, fortunately, is presented in a brand new concept that entails a mix of recreational activities and shopping activities, which has the potential to appeal to the growing middle class of Hanoi. The centre unprecedentedly boasted a pre-commitment occupancy rate of 95 per cent, 85 per cent of whom were ready for business on the opening day. Considering the falling consumption rates caused by the persisting economic challenges in Vietnam, such a rate was a surprise to the whole industry. The centre’s attraction to both retailers and shoppers is attributed to its introduction of many “firsts” and unique concepts for the first time in Vietnam. Before the launch of Vincom Mega Mega Mall Royal City, the foreign concept of “One-stop-shops” was not presented in Vietnam. Until recently, leisure and entertainment services in Hanoi were spread out in stand-alone developments such as the West Lake Water Park, game centers and cinemas in various shopping centres, a few stand-alone roller skating rinks, and small to mid-sized food courts. Yet, a one-stop shop that provided from ice-cream to ice rink, catering to the needs of families and a large teenage customer base in Hanoi was missing until the launch of Vincom Mega Mall Royal City. However, as exciting as it is to the local retail market, the new shopping centre does put pressure on the rest of the market, according to CBRE. A number of shopping centres in Hanoi have been struggling to survive and have closed their doors for restructuring in an attempt to win back business. Trang Tien Plaza, one of the biggest names in Hanoi, was recently reopened after years of renovations. They centre aims to be the most luxurious trading centre in Hanoi by presenting 112 luxury brand names in fashion, watches and perfume including Christian Dio, Versace and Mango. Grand Plaza Department Store and Hang Da Galleria are currently closed for restructuring despite the fact that both were only in operation for a few months. Mipec Tower shopping mall in Tay Son street has been closed down following the Lotte Shopping Vietnam’s acquisition of its four floors. It is expected to open again early next year as the Lotte Mart hypermarket. Syrena Vietnam launches Coral Bay Townhouse Block 29,29A Despite the gloominess of the property market, Syrena Vietnam’s strong determination in developing Halong Marina urban project is proving the firm’s financial ability. The property developer, a subsidiary of multi-sector BIM Group, announced it is about to complete luxury apartment project Green Bay Towers two months earlier than the developer’s previous commitment. Syrena Vietnam is committed to support homebuyers to seek preferential loan from local commercial banks. The loan could cover 70 per cent of the value of an apartment and have the duration for up to 15 years. More important, homebuyers buying one of 80 apartments in Green Bay Towers project which have area ranging from 61-70 square metres could borrow loan from banks with the annual 6 per cent of interest rate in accordance with the support policy of the Vietnamese government. Established in 2010, Syrena Vietnam has rapidly been expanding its footprint in the real estate business. Among the firm’s property projects, Halong Marina is the most outstanding one that underlines long term strategy of Syrena Vietnam in the sector. Halong Marina is built on the idea of the miniature city of Sydney, covering an area of 287 hectares and stretching over 3.8 kilometres of beach. According to the detailed plan, Halong Marina is divided into the main components. The first one includes a mixture of coastal luxury villas, traditional villages and amusement park. The second component will feature hotels, an international standard convention centre, theaters, banks, trading houses and streets. And finally, the third component will comprise park and condominium complexes from 17 to 24 floors. In addition, the developer has also reserved a large portion of land for public facilities such as schools, hospitals, beaches for residents and tourists. In total, over 50 sub-projects will be developed in the project site. Currently, Syrena Vietnam has completed the first phase of Halong Marina project which is attracting a lot of hotel owners to invest in such as Royal Lotus Hotel, Muong Thanh Ha Long Place, Mirthin... In the second phase, the company announced it would also invest in other developments such as Halong Marine Plaza complex, Green Bay - the first luxury apartment building in Quang Ninh and Coral Bay townhouses. In August, the company also started sales of Coral Bay Towe House Block 29 and Block 29A with incentive programmes for customers such as 6.5 per cent discount on the total value and customers will receive SHi125’s lucky draw. Compal scales back Vinh Phuc deal Compal and Foxconn have   pledged to continue investing in manufacturing and industrial zone projects in the northern province of Vinh Phuc after the provincial leaders said they violated Vietnamese laws by delaying their investment plans for years. Nguyen Tien Hanh, deputy head at Vinh Phuc Provincial People’s Committee’s Office, told VIR that both Foxconn and Compal had already sent written documents to the committee as requested. “Once again, Foxconn and Compal reiterated their claim that they intended to continue their investment plans in projects here,” said Hanh, who is also director of Vinh Phuc Provincial Investment Promotion Agency. Vinh Phuc Provincial People’s Committee in two documents issued last month announced that it would revoke the investment certificates for both Compal and Foxconn’s projects if the investors failed to record progress by April 2014. Compal officially proposed to return 227 hectares of industrial land, which were originally earmarked for development into an industrial zone, and only asked to retain an already-built factory for manufacturing laptops, Hanh said. Meanwhile, Hanh said that Foxconn did not give a specific proposal, except a promise to continue investing in projects in Vinh Phuc. Compal received an investment certificate in 2007 for developing a $500 million laptop manufacturing factory and construction of Ba Thien industrial zone in Vinh Phuc. Foxconn obtained investment certificates for building a $200 million handset factory and a 485-ha industrial park in the province in 2008. Compal completed the construction of the laptop manufacturing factory, but it stopped operations almost two years ago after several months of trial production. Vietnam-Taiwan joint venture Minh Duc Company is currently renting the factory to produce carton boxes for Korean Samsung’s manufacturing complex in the northern province of Bac Ninh. Foxconn, meanwhile had done nothing with its investment projects, except clearing 60ha of land. Vinh Phuc Provincial People’s Committee in May announced both Foxconn and Compal had violated regulations on their investment timelines, even though the provincial committee had extended the construction timelines for the projects many times and also finished entirety of the site clearance works. “These are the biggest foreign investment projects in the province. We really want the investors to implement their projects, but we’ve so far been left disappointed,” said Hanh. Doan Hong Chiem, deputy director of Vinh Phuc Provincial Industrial Zones Management Authority said Vinh Phuc was looking for a new investor to replace Compal at the Ba Thien industrial zone site. “For the Foxconn projects, we’ve not yet reached a final decision,” said Chiem. Japan’s Kobe Steel wins a stake in Thach Khe iron mine Japan’s Kobe Steel has received the official approval from the Vietnamese government to take a stake in Vietnam’s largest iron ore mine at Thach Khe, which will help the company ensure the raw material for its $1 billion factory in the central province of Nghe An. The Government Office, in an announcement released on August 2, stated that Deputy Prime Minister Hoang Trung Hai had accepted Kobe Steel’s investment into the Thach Khe Iron Joint Stock Company (TIC), the miner of Thach Khe iron ore deposit in the central province of Ha Tinh. The approval follows a proposal by the Ministry of Industry and Trade (MoIT) sent to the government last month. The governmental approval was finally reached despite a source close to the case saying last year that a proposal by state-run Vietnam National Coal and Mineral Industries Group (Vinacomin) - TIC’s current biggest stakeholder, might have been turned down to get Kobe Steel involved in TIC. In July 2012, state-run Vinacomin proposed the prime minister that it would either sell part of its stake in TIC to Kobe Steel or set up a joint venture with the Japanese heavyweight to take part in TIC. The governmental approval now means that Kobe Steel has removed its biggest challenge to start construction of its $1 billion iron nugget facility in Nghe An, for which the firm received an investment certificate in March 2010. India’s steel maker Tata Steel had also previously expressed an interest in investing in the Thach Khe iron ore mine, but has not yet gained an approval. Kobe Steel wants to invest in the iron ore mine in order to ensure raw material supplies for its facility in Nghe An, which has been delayed due to awaiting approval for investment in TIC, said Phan Xuan Hoa, deputy director of the Management Authority of Nghe An South-East Economic Zone where Kobe Steel’s manufacturing facility is situated. The facility will produce and market 2.4 million tonnes of iron nuggets per year. Kobe Steel also said that the production at the facility would use the next-generation ITmk3 iron-making process. Although Kobe Steel has gained the nod from the Vietnamese government to invest in the mine, it will still have to hold further discussions with other stakeholders in TIC. “We have not concluded what percentage stake that Kobe Steel will hold in TIC,” said an anonymous official at the MoIT’s Heavy Industries Department. Established in 2007, TIC was formerly comprised of Vinacomin with a 30 per cent stake, state-run Vietnam Steel Corporation (VNSteel) (20 per cent), Ha Tinh Mining and Trading Corporation (Mitraco) (24 per cent), VNPT (4 per cent), Song Da (5 per cent), BIDV (5 per cent), Vinashin (5 per cent), Bitexco (4 per cent) and Thang Long Mineral (3 per cent). In 2011, BIDV, Song Da, Vinashin and VNPT sold 19 per cent of their stakes to Vinacomin after the prime minister ordered the four state-owned companies to divest from TIC. Thach Khe is estimated by geologists to hold iron ore reserves of some 500-600 million tonnes, at least 300 million tonnes of which was thought to be commercially exploitable. The estimated investment capital of the first mining phase with the capacity of five million tonnes per year is around $400 million. Preparations for mining works at Thach Khe deposit stopped in mid-2011 due to TIC’s restructuring plan. Site clearance delay leaves textile firms in tatters Two major Hong Kong-backed foreign textile and garment projects have been bogged down due to site clearance issues in the northern province of Hai Duong’s controversial Lai Vu Industrial Park. According to Hai Duong People’s Committee’s report, Pacific Vietnam Textile and Crystal Corporation’s projects with combined registered investment capital of $557 million have suffered from painfully slow site clearance. The report said that nearly 40 households affected by the site clearance have obstructed Lai Vu Industry Park (IP) infrastructure construction everyday since 2012, demanding reasonable compensation costs and employment. In June 2013, the due-to-be-displaced families also hindered Pacific Vietnam Textile and Crystal Corporation’s test hole drilling operations in IP areas marked for factory buildings. The two projects received licenses in April 2013 for an area covering 31.17 hectares in Lai Vu IP. Pacific Vietnam Textile’s $425 million project aims to produce cloth and raw materials for the textile and garment industries, with capability to produce 360 million metres of cloth per year for both domestic and overseas markets, while Crystal Group’s $120 million garment project would specialise in producing and trading textile and garment products for exports. The two projects are expect to provide employment for 20,000 local labourers as well as contribute to the reduction of Vietnam’s trade deficit by meeting local demand for cloth as well as exporting. Lai Vu IP is one of seven projects invested by state-owned shipbuilding group Vinashin where governmental inspectors detected wrongdoings in investment in 2011. Lai Vu IP is now under the management of Vietnam Oil and Gas Group and has attracted 11 projects including the two foreign textile and garment investments. Deputy chairman of Hai Duong People’s Committee Nguyen Duong Thai claimed the two big foreign textile and garment projects were “a good chance” for the development of Hai Duong province in general and particularly for Lai Vu IP, especially in the context of hard economic times which have seen many firms halt operations or enter bankruptcy. Thai said that the provincial authorities would roll up their sleeves to have the two projects up and running, otherwise Lai Vu IP’s infrastructure could be downgraded and land resources left idle. Life insurance giants eye lucrative market Vietnam’s life insurance market is expected to witness more big foreign players in the coming time. Industry insiders revealed that two big Asia insurers Shin Kong Life and Samsung Life, which have had representative offices in Vietnam for several years, had stepped up their plans to make an official presence in Vietnam. Meanwhile, MetLife, the largest life insurer in the United States, is preparing to establish a joint venture life insurance company in Vietnam in the fourth quarter of this year. Late last month, the insurer and the Bank of Investment & Development of Vietnam signed a memorandum of understanding in Washington D.C., which paves the way for the two companies to form a joint venture life insurance company in Vietnam. “Vietnam is a dynamic emerging market and one of the fastest growing life insurance markets in Asia with an expected annual growth rate of 15 per cent over the next five years. Clearly there is great potential in this market,” said Dustin Ball, vice president, and head of strategic development for Metlife in Asia. As a dynamic emerging market in Southeast Asia, Vietnam’s favorable demographics, growing middle class, and potential future economic growth make it a very attractive market for MetLife, said Ball. Meanwhile, last month, Research and Markets also announced the addition of the Life Insurance in Vietnam, Key Trends and Opportunities to 2016 report, which shows that the life insurance segment is expected to expand during the forecast period, due to the country’s growing economy, increasing annual disposable income levels and the expanding middle-class population. In addition, the majority of life insurance policies sold in Vietnam were endowment policies, which accounted for a 70.9 per cent share of the total written premium in 2011. “Therefore, the Vietnamese life insurance segment is widely considered to be an emerging market with greater potential for further growth than the life insurance segments of other Asian countries, such as China and India,” said the report. Green-Biz offers glimpse into the future The green business exhibition held in September will bring Europe’s most advanced green technology to Vietnam. Green-Biz 2013, organised by the European Chamber of Commerce (EuroCham), will present the latest technologies used in Europe and throughout the region suitable for Vietnam’s current stage of development on September 19-20 in Hanoi. The exhibition is expected to feature technologies from approximately 80 European firms including Siemens Ltd, Philips, Schneider Electric Vietnam, Holcim, Alstom, Asket Roman Dlugi, Dagas Ltd, EKOTOP Roman Sobczyk and Hydroergia Ltd Sp.k. With the aim to support Vietnam in its transition to a green economy and green growth, the two-day exhibition will feature country pavilions from Denmark, Poland, Germany and France. The Danish Pavilion will demonstrate waste treatment and energy management technologies, especially energy efficiency equipment and materials. The Polish pavilion will be organised jointly by the Polish Ministry of Environment’s GreenEvo Programme and the Embassy of Poland in Hanoi. At least twelve Polish companies will exhibit at the pavilion, focusing on energy efficiency, renewable energy, waste management, water and wastewater management, air protection and noise monitoring. The German pavilion will offer a wide range of solutions and technologies from chemicals and crop protection products, oil, gas and thermal power, drive and control technology, security systems to renewable energy. Last but not least, the French pavilion will promote clean river transportation, water treatment, biological products and renewable energy engineering, and flood management. Several major European enterprises will showcase advanced green technology including hybrid buses to improve traffic air quality; building energy management solutions, lighting management, security, energy audit services, and much more. “As a diversified health and well-being company with a focus on driving sustainability through meaningful innovation, Philips wants to introduce GreenBiz visitors to our green technologies such as LED, OLED lighting solutions as well as healthcare products and solutions that help improve access to quality healthcare, while reducing the impact on the environment”, said Ngo Van Huy, country manager of Philips Vietnam. EuroCham chairman Preben Hjortlund said: “In 2013 we have taken the chance to reshape the focus of our third Green-Biz even further towards practical challenges and outcomes. Tackling these challenges and climbing the rocky road towards sustainability must be a common effort: as it is not easy, we need to pool our resources and competencies to move ahead towards a green future.” The Green-Biz exhibition is Vietnam’s most comprehensive clean and green product and service exhibition and offers a unique chance for Vietnamese companies to present their technologies, promote their brands and network with other European companies. It will also be an ideal opportunity for Vietnamese decision makers from government and business, as well as experts and professionals to keep abreast of the latest green technologies. In addition to the main exhibition, the event will provide the chance to attend networking activities and discussions with government ministers. The exhibition will be open to local and foreign government officials, representatives from domestic and foreign corporations, academics, and the public to gather and discuss strategies and opportunities to improve the development of a green industry in Vietnam. Moving towards renewable energy, cleaner production and energy efficiency enhances sustainable and green business and helps reduce production costs in the long-run. The European companies attending the event have built up tremendous expertise and success, while combining low-environmental impacts with profitability. More information can be found at www.greenbiz2013.com .n The green business exhibition held in September will bring Europe’s most advanced green technology to Vietnam. Green-Biz 2013, organised by the European Chamber of Commerce (EuroCham), will present the latest technologies used in Europe and throughout the region suitable for Vietnam’s current stage of development on September 19-20 in Hanoi. The exhibition is expected to feature technologies from approximately 80 European firms including Siemens Ltd, Philips, Schneider Electric Vietnam, Holcim, Alstom, Asket Roman Dlugi, Dagas Ltd, EKOTOP Roman Sobczyk and Hydroergia Ltd Sp.k. With the aim to support Vietnam in its transition to a green economy and green growth, the two-day exhibition will feature country pavilions from Denmark, Poland, Germany and France. The Danish Pavilion will demonstrate waste treatment and energy management technologies, especially energy efficiency equipment and materials. The Polish pavilion will be organised jointly by the Polish Ministry of Environment’s GreenEvo Programme and the Embassy of Poland in Hanoi. At least twelve Polish companies will exhibit at the pavilion, focusing on energy efficiency, renewable energy, waste management, water and wastewater management, air protection and noise monitoring. The German pavilion will offer a wide range of solutions and technologies from chemicals and crop protection products, oil, gas and thermal power, drive and control technology, security systems to renewable energy. Last but not least, the French pavilion will promote clean river transportation, water treatment, biological products and renewable energy engineering, and flood management. Several major European enterprises will showcase advanced green technology including hybrid buses to improve traffic air quality; building energy management solutions, lighting management, security, energy audit services, and much more. “As a diversified health and well-being company with a focus on driving sustainability through meaningful innovation, Philips wants to introduce GreenBiz visitors to our green technologies such as LED, OLED lighting solutions as well as healthcare products and solutions that help improve access to quality healthcare, while reducing the impact on the environment”, said Ngo Van Huy, country manager of Philips Vietnam. EuroCham chairman Preben Hjortlund said: “In 2013 we have taken the chance to reshape the focus of our third Green-Biz even further towards practical challenges and outcomes. Tackling these challenges and climbing the rocky road towards sustainability must be a common effort: as it is not easy, we need to pool our resources and competencies to move ahead towards a green future.” The Green-Biz exhibition is Vietnam’s most comprehensive clean and green product and service exhibition and offers a unique chance for Vietnamese companies to present their technologies, promote their brands and network with other European companies. It will also be an ideal opportunity for Vietnamese decision makers from government and business, as well as experts and professionals to keep abreast of the latest green technologies. In addition to the main exhibition, the event will provide the chance to attend networking activities and discussions with government ministers. The exhibition will be open to local and foreign government officials, representatives from domestic and foreign corporations, academics, and the public to gather and discuss strategies and opportunities to improve the development of a green industry in Vietnam. Moving towards renewable energy, cleaner production and energy efficiency enhances sustainable and green business and helps reduce production costs in the long-run. The European companies attending the event have built up tremendous expertise and success, while combining low-environmental impacts with profitability. More information can be found at www.greenbiz2013.com . Vietnam sells rice to Comoros Vietnam will supply 60,000 tonnes of rice to the Comoros annually under a memorandum of understanding (MoU) on rice trading signed recently between the two countries. The first shipments will be sent in August 2013 and the last in December 2015. Signatories to the MoU were Vietnam’s Deputy Minister of Industry and Trade Le Duong Quang and the Comoros’s ambassador to Beijing, Mahmoud Aboud. The MoU is expected to lay a legal foundation for trading rice directly between Vietnam and the Comoros, contributing to strengthening bilateral trade ties. Ambassador Aboud said despite being a small African nation, the Comoros imports around 70,000 and 80,000 tonnes of rice every year, and everyone consumes on average 100kg per year.   He said apart from rice, Vietnam can export its garments, construction materials, automobile parts, motorbikes, and agricultural machinery to this market. The ambassador expressed his hope that Vietnam will share its experiences in developing the processing industry, expanding cooperation in science and technology, and boosting coordination among small and medium-sized enterprises in producing agricultural machinery, with the Comoros. Shipping rice to the Comoros is of great significance for Vietnam’s rice exports to Africa which currently accounts for around 20% of the country’s annual rice export turnover, he stressed. Vietnam is one of the world’s leading rice exporters, helping ensure food security in the region and the world. This is Vietnam’s third MoU on rice trading with African nations, after those with Sierra Leone and the Republic of Guinea. Hanoi to host Vietnam Finance 2013 How to reinforce national financial supervision through policies and technology initiatives will take centre stage of a conference and exhibition in Hanoi on August 27. The information was released by Dang Duc Mai, the Director of Department of Informatics and Financial Statistics (DFIS), at a press conference in Hanoi on August 12. Vietnam Finance 2013 will provide an overview of the current situation of financial supervision and the development of the national financial supervision system in order to ensure the stability of the financial sector and economic development, said Mai. It will introduce new policies, initiatives and advanced technologies to be applied in financial supervision. During a plenary session and two panel discussions, delegates will examine ways to improve macro-economic and financial supervision capabilities and promote the application of information technology in public finance, strengthen national financial supervision, and work out technological solutions. The event will offer economic groups the chance to introduce advanced technological applications to improve the efficiency of financial supervision. Government agencies will use Vietnam Finance 2013 to introduce IT systems such as e-taxation and e-customs services, to connect to businesses. Sacombank opens new headquarters in Laos The Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) inaugurated the new headquarters of its branch in Vientiane, Laos, on August 12. At the inauguration ceremony, Sacombank deputy director Nguyen Minh Tam said over the past five years the branch has provided local clients with convenient financial services, winning their trust. Apart from special promotions, the branch has offered a fast, reliable and low-cost money transfer service between Laos and Vietnam, facilitating business operations. It has also actively participated in community-oriented activities, contributing to poverty reduction in Laos. As of July 31, total assets of Sacombank’s branch in Laos were valued at US$102 million. It mobilized US$56 million from depositors and lent out US$73 million. In the next years, the Lao branch aims to become a wholly foreign-invested bank, focusing on diversifying products and services suitable to every region, and further expanding its network to major economic regions. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR