BUSINESS IN BRIEF 22/2 US farm bill must observe int’l commitments: spokesperson The catfish inspection programme stated in the US ’s 2014 Farm Bill should abide by the country’s international commitments and not create trade barriers. The Vietnamese Foreign Ministry’s spokesperson Le Hai Binh made the statement on February 20 while answering reporters’ queries on Vietnam ’s response to the US ’s adoption of the bill, which stipulates the inspection of catfish as well as packaging and exporting activities. “We fear that new regulations in the bill may exert negative impacts on Vietnam ’s aquaculture and fish processing industry, and affect US consumers,” he said. According to the spokesperson, Vietnam has always strictly controlled its aquaculture and fish processing, and widely applied the highest international standards, including the US’s Best Aquaculture Practices (BAP). Vietnam has also ensured food hygiene and safety along with protecting the environment, he said, noting that Vietnamese tra and basa fish have won the favour of consumers across the world. On February 4, the US Senate gave final congressional approval to a five-year farm bill, under which the inspection of catfish, including Vietnamese tra and basa fish, will be moved out of the remit of the Food and Drug Administration (FDA) and into the Department of Agriculture. Accordingly, Vietnamese catfish exporters trading with the US must fulfil all requirements set for local products from production to packaging and exporting.- Vinamilk eyes Poland market The Vietnam Dairy Products Joint Stock Company (Vinamilk) has announced the establishment of an affiliated subsidiary in Poland with registered capital of US$3 million. On February 18, Vinamilk Board of Presidents approved a resolution to establish its subsidiary company and named CEO Mai Kieu Lien as its legal representative in Poland. In 2013, Vinamilk expanded its overseas operation through the opening of its subsidiaries in Cambodia, New Zealand and the US. It also raised investment capital into Miraka Limited in New Zealand from NZD121 million to NZD147.945 million, occupying a 19.3% stake in the joint venture. In December 2013, Vinamilk invested US$7 million in the US-based Driftwood Dairy Holding Corporation to hold its 70% stake. Driftwood Dairy specialises in producing and supplying dairy products, fruit juices and fast food. Early this year, Vinamilk contributed 51% of a US$23 million project to build dairy products processing factory in Phnom Penh, Cambodia. RoK company builds mobile phone plant in Hoa Binh The northern mountain province of Hoa Binh on February 20 granted an investment license to HNT Electronics of the Republic of Korea (RoK) to manufacture built-in cameras for mobile phones. The wholly foreign invested project will be built at Luong Son industrial park (IP) at a total cost of US$20 million. The plant is scheduled to be operational in November 2014 to produce 120 million products a year. It expects to generate 600 jobs and contribute VND11 billion annually to the provincial budget. At the license hand-over ceremony, provincial authorities asked relevant agencies to create optimum conditions for the investor to carry out the project efficiently. They also asked the investor to speed up project construction, abide by Vietnamese law, and harmonise the interests between the investor, locality and workers.    Hoa Binh, a gateway to capital Hanoi, plans to receive four other investors in Luong Son IP. Casino service legislation discussed The National Assembly’s Committee for Finance and State Budget (CFSB) on February 20 worked with Ba Ria-Vung Tau provincial leaders and Ho Tram Company on building a legal framework for casino services. On July 26, 2013, Ho Tram Company opened a casino at the Ho Tram Strip Complex in Xuyen Moc district, Ba Ria-Vung Tau, principally aimed at serving foreign tourists. Since then the Government, the Ministry of Finance (MoF) and the State Bank of Vietnam (SBV) have issued several decrees and regulations directed at regulating rewards-based games for foreigners. However, Ho Tram Company said the complex regulations have caused numerous difficulties for the company to run the service.   Regulations related to destroying conventional money, required certifications provided to State agencies, along with minimum values and permitted bank transfers for foreigners are just a few of problems. Participants at the meeting also discussed allowing Vietnamese people to play at the casino as this will help collect taxes and avoid foreign currencies losses. CFSB Vice Chairman Dinh Trinh Hai said running casino services and allowing Vietnamese people to play the games is a sensitive issue that needs careful consideration. He said the committee will review and submit business proposals to relevant agencies to support the service. The Ho Tram Strip Tourism Complex was built on 165ha at a cost of US$4.23 billion by Canadian group ACDL. US$540 million has been invested in the project to build a luxury hotel, a convention hall, nine restaurants and an entertainment site for foreigners with 90 gambling tables and 1,000 electronic games. By the end of January, nearly 36,000 foreigners had played at the casino, generating more than US$5.5 million in turnover and contributing over US$2.8 million to the State budget. Australia supports Vietnam’s economic reforms Australia will provide AUD2.5 million to help Vietnam progress investment reform, rural sector restructuring and competition policy. Australian Foreign Minister Julie Bishop announced the aid package following her February 19 meeting with Minister of Industry and Trade Vu Huy Hoang and Minister of Planning and Investment Bui Quang Vinh in Hanoi. These reforms will help Vietnam meet its commitments under its regional and international trade agreements, and lift the country’s economic competitiveness to boost its regional and global trade, Bishop said. According to Bishop, the success of Vietnam’s current economic restructuring program is essential for the country’s long-term economic growth and macro-economic stability.  A more prosperous, competitive and open Vietnam benefits Australia and the region, creating greater trade and investment opportunities. The package is sourced from the Restructuring for a More Competitive Vietnam initiative that builds on the successes of the Beyond WTO Program.  This program has provided over AUD9 million in Australian support to help Vietnam gain maximum benefit from its accession to the World Trade Organisation in 2007.   Two-way trade between Australia and Vietnam was estimated at AUD7 billion and investment at AUD1.5 billion last year. Russia to consume Vietnamese Tra fish again Russia is likely to resume importing Tra (Pangasius) fish within the next one or two months, according to the Vietnam Association of Seafood Exporters and Producers (VASEP). Russia’s Federal Service for Veterinary and Phytosanitary Surveillance (VPSS) temporarily halted importing Tra fish and other aquatic products as of January 31, 2014, following their inspection tour of 8 Vietnamese Tra fish processing businesses late last year. VASEP Secretary General Truong Dinh Hoe said his association worked closely with the VPSS and relevant Vietnamese agencies to address the issue. In 2008 Vietnamese Tra fish businesses were also banned from exporting their products to Russia, failing to meet the importer’ food quality standards. Seafood inspection teams from foreign countries regularly conduct examinations of Vietnamese seafood as a quality control measure prior to shipment abroad. The present situation results from solely isolated and limited failure of a small number of local exporters to meet requirements of the overseas markets. At present, Vietnam has laws and regulations in place that detail the requirements for ensuring food hygiene and safety of fish exports and overall, the vast majority of Vietnamese producers and exporters have complied with them. VASEP statistics show last year Vietnam earned US$100 million from aquatic exports to Russia, making up 1.5% of the country’s total seafood export value. Positive economic growth forecast in 2014 Economists predict the Vietnam economy will experience positive growth in 2014 on the back of an increasing global demand and much improved world economic environment. The National Financial Supervisory Committee (NFSC) also forecasts an overall increase in private consumption for 2014. According to official statistics, retail consumption of goods and services rose by 5.8% in January, or 0.2% higher than the growth a year earlier. NFSC economists also predict  total social investment capital may reach 30% of GDP as a result of the expanded credit capacity and other benefits flowing from the restructuring of the banking system and banks getting non-performing loans off their books. Meanwhile, foreign investment is expected to show marked improvement thanks to positive prospects of the world economy and the signing of the Trans-Pacific Partnership (TPP) agreement due in 2015. However, targets for stabilising the macro-economy and monetary and fiscal policies must be managed diligently this year as business access to credit will continue to face limitations and all-in-all non-performing loans remain relatively high. The NFSC reports that although the number of newly-established businesses rose in 2013, the overall scale of business in terms of total assets, equity and turnover declined. In the first nine months of last year, total assets dropped by 5.2% against the same period a year earlier, average equity dipped 3.97% and average turnover rose modestly by 3.11%. Obtaining the set target of 5.8% economic growth for 2014 requires a conscientious and concerted effort from the whole society and business community, the report concludes. ILDEX Vietnam 2014 attracts businesses As many as 120 local and foreign businesses have registered to attend the fifth Livestock, Dairy, Meat Processing, Aquaculture, and Bio-Energy Exposition in HCM City from March 19-21. ILDEX Vietnam 2014 features advanced technology and innovative solutions from International suppliers for Vietnam’s livestock, dairy, meat-processing, and aquaculture industries. It is considered a rendezvous of international businesses to showcase products and the state-of-the-art farming technology, and share livestock and aquaculture development orientations for Vietnamese businesses. The expo will see the participation of leading global companies in the field such as Big Dutchman, Biomin, Buhler, Muyang, Novus, Behn Meyer, Lohmann, Tierzucht, P&N and Asia Pacific. Workshops will be held to share experience in cattle breeding, dairy farming and processing, disease control, animal health, and aquaculture.    ILDEX Vietnam, which takes place every two years, has attracted more than 170 companies and over 6,500 visitors each time. The professional event is expected to increase business opportunities for companies. Can Tho promotes business potential in Belgium A business delegation from the Mekong Delta city of Can Tho is on a visit to Belgium from February 20-24 to introduce its cooperation potential and seek investment opportunities. The delegation, led by Vice Chairman of the Can Tho Municipal People’s Committee Vo Thanh Thong, held working sessions with representatives of the Vietnamese Embassy and the Belgian business community. Ambassador Pham Sanh Chau introduced Can Tho's potential to Belgian guests Ambassador Pham Sanh Chau highlighted investment opportunities in Can Tho and Vietnam, and said many Belgian businesses are keen to invest in the Mekong Delta region. Meanwhile, Vice Chairman Thong accentuated Can Tho’s tourism potential, especially its ecology, gardens and rivers. “The city welcomes around 1.3 million tourists, nearly a half from foreign countries, annually”, he said. “Can Tho is considered an attractive investment destination thanks to its good infrastructure system and developed agricultural sector.”. “Can Tho has participated in many international trade fairs and exports a variety of farm products to overseas markets, including Belgium”, Thong concluded. During their visit, Vietnamese delegates also worked with leaders of East Flanders province to inquire into the 2014 Accenta International Trade Fair  in Belgium this September, which is considered the largest consumer goods fair in Europe. CEO of Belgium’s VK Group, Petor Van Kerckhove, chief investor of Amanoi resort in Vietnam’s Ninh Thuan province, said he highly valued the investment attraction of Vietnam – a country which has political stability, and hospitable and industrious people. HCM City ready for Japanese investment influx Ho Chi Minh City, the largest economic hub in Vietnam, has implemented various innovative and effective measures in a bid to attract more Japanese investment. It is currently calling on Japanese businesses to invest in such prioritised areas as chemicals, mechanical engineering, food and foodstuff, and especially support industries, using high and environmentally friendly technology. The HCM City Export Processing and Industrial Zone Authority (Hepza) reports in 2013 Japanese capital topped the list of foreign investment in the city, accounting for 45% of the total US$363. Japanese businesses registering for operation expansion include Saigon Precision Ltd Company at Ling Trung Industrial Zone, and Nidec Tosok Ltd Company and Juki Ltd Company at Tan Thuan IZ. Hepza chairman Vu Van Hoa says HCM City has 504 foreign directed investment (FDI) projects, including 112 from Japan. Japan ranks third among foreign investors in the city with a combined capitalization of more than US$3 billion, including US$1.3 billion in industry. HCM City has fostered trade promotion both at home and in Japan to introduce its potential and attract further Japanese investment. A large number of seminars, exhibitions, conferences and meetings have been held between HCM City and Japanese businesses. Earlier this year, two investment promotion seminars were organised and well attended by businesses from both sides. Yasuzumi Hirotaka, Chief Representative from the Japan External Trade Organisation (JETRO), said Japanese businesses are tending to shift their investment from regional countries to Vietnam to capitalize on lower human resource costs. This is a big opportunity for Vietnam and HCM City in particular to attract Japanese investment. However, Japanese businesses are lacking in information about Vietnam’s investment environment that needs to be addressed very soon. At regular dialogues, HCM City leaders always stressed they create the best possible conditions for Japanese businesses to invest and operate in the city. In September 2013, the city granted an investment licence to Vietnam-Japan Technique Ltd Company – a joint venture between Japan’s Vie-Pan Industrial Park and Vietnam’s Hiep Phuoc Industrial Park Company, to build a Vietnam-Japan technology park (Vie-Pan Techno Park) on 13ha in the first phase and then expanded 100ha in the second phase to house Japanese businesses. Le Manh Ha, Vice Chairman of the municipal People’s Committee, says this is a new model to attract Japanese capital. The project meets the city’s demand for building a special high-tech park for Japanese businesses only. Vie-Pan Techno Park will not only provide workshops but also other convenient services, such as recruitment, investment consultancy, accounting, training, and management consultancy. These services will help Japanese investors save preparatory time and integrate and operate more smoothly. The first phase of the park valued at US$7.6 million will be completed in September. Experts say the new model will meet demand for receiving high quality investment resources from Japan to Vietnam in the future and take full advantage of available competitiveness at nearby Hiep Phuoc IZ. With its available advantages and incentives in place, HCM City is now ready to welcome a new investment wave from Japanese businesses in the future. Vietnam posts trade shortfall with Saudi Arabia Vietnam experienced a trade deficit of US$767.9 million with Saudi Arabia in 2013 even though two-way trade achieved high growth, Vietnam Customs reports. Vietnam Customs statistics show bilateral trade hit US$1.71 billion last year, a year-on-year increase of 14.8%, of which Vietnamese exports were US$471.1 million, down 21.4%, and imports were US$1.239 billion, up 39.8%. Vietnam mainly exported machinery and equipment, consumer products and agro-forestry and seafood products. Machinery and equipment topped the list at US$188.3 million, followed by garments (US$59.7 million), seafood (US$52.4 million), and mobile phone handsets and components (US$26.7 million). A sharp fall in mobile phone handset and component export earnings (by US$184.3 million or 39% of the total export value) is the major contributing factor for the decline in exports to Saudi Arabia. Products with high imported value from Saudi Arabia included plastic materials (US$1,055 million) liquefied gas (US$75.2 million), chemical products (US$54.6 million). As a result, in 2013 Vietnam’s trade shortfall with Saudi Arabia stands at US$767.9 million, making up 45% of total bilateral trade value. Vietnamese exports to Saudi Arabia are expected to increase 16.7% to US$550 million in 2014. UK, Vietnam share experience in social business The UK welcomes the opportunity to assist Vietnam to successfully develop and implement initiatives conducive to the creation of a thriving social business environment. Chris Brown, Director of the British Council, made the statement at a February 20 seminar in Hanoi focused on creating a sustainable development environment for social business. He affirmed social business is one of the British Council’s top priorities in its social development programme in Vietnam. Nguyen Dinh Cung, acting director of the Central Institute for Economic Management (CIEM), noted social business is one of sustainable economic models as it plays an important role in supporting the State in providing public services and dealing with social issues. “Social businesses can be financially self-sustainable without the capitalistic pursuit of profits and alternatively re-invest the profits in themselves with the aim of addressing social problems,” he said. “Thus, the State has a vested interest in ensuring policies are devised to further this economic model.” More than 200 social businesses are currently operating in 40 provinces and cities across Vietnam. Yet they have met numerous difficulties, including their unclear legal status and limited access to finance and training. Marie Magimay, Director of Finance and Corporate Resources, Social Enterprise UK, said the UK has an extensive and successful history dealing with social business issues in economic sectors across the board including health and social care, renewable energy, food, housing, retail and transport. By 2013, the UK had 70,000 social businesses, accounting for 5% of the total number of businesses, contributing GBP24 billion to the national budget and generating 1 million jobs, she said. At the seminar, UK experts talked about opportunities for cooperation between the two nations and joint activities to create a sustainable environment for social business and their impact on the public, such as incentives and legal framework for social business. Hanoi CPI hits 10-year record low in February Hanoi’s consumer price index (CPI) rose just 0.49% in February against the previous month– a record low during the past 10 years, according to the municipal Statistics Office. The low CPI indicates people’s purchasing power has not picked up yet after the recent nine-day long lunar New Year holiday. Apart from food, other products showed an average price hike of less than 0.6%; and housing, electricity and water supplies, and building materials even saw price reductions compared to January. A fall in the price of gas prompted the prices of housing, electricity and water supplies, and building materials to nosedive 0.5% over the previous month. Healthcare, education and telecommunications services did not experience any price hike. On the contrary, food and food catering services increased 1.06%, with food up 0.83%, foodstuff up 1.03% and eating out up 1.23%. In February, gold prices soared 2.64% while USD prices dropped 0.01% compared to January. Japanese firms share job orientation with local students Representatives from Japanese enterprises provided an overview of their country’s development and talked about job orientation with students of the southern province of Ba Ria-Vung Tau at two seminars on Feb.18-20. Ba Ria-Vung Tau province and the northern port city of Haiphong were approved to build two support industry zones for Japanese enterprises. At the events, they also discussed issues related to culture, foreign languages and professional skills with students of the Ba Ria-Vung Tau University and the provincial vocational training college. The seminars enabled the two institutes to better understand Japanese enterprises’ demand for suitable education and training plans in the future. At present, 120 students of the Ba Ria-Vung Tau University are pursuing Japanese studies. Meanwhile, the provincial vocational training college is offering training courses following Japanese standards. Vietnam-France trade hits EUR3.5 billion in 2013 Two-way trade between Vietnam and France reached EUR3.5 billion in 2013, a year-on-year increase of 6%, according to France Customs statistics. Of the total, Vietnamese exports fetched EUR2.79 billion, rising 4%, and its imports were valued at EUR704 million, up 14.7%. Major Vietnamese export items included electronic appliances (EUR956 million), garments (EUR323 million), footwear (EUR484 million), coffee and pepper (EUR86.2 million) and seafood (EUR76.9 million). Notably, export earnings of pharmaceutical ingredient tripled last year to EUR142,000 from just EUR36,000 a year earlier. Handicrafts exports generated only EUR5.9 million in value, but made up more than 10% of France’s market share. Pharmaceuticals topped the list of Vietnamese import items from France, valued at EUR142.6 million, up 2% compared to 2012. They were followed by mechanical products (EUR49 million, down 18%), machinery and electronic appliances (EUR49.7 million, down 15%). Aviation equipment, mostly planes and satellite devices, are one of the main French exports to Vietnam. In 2013, their export value rose sharply to EUR106.6 million compared to just EUR6 million in 2012. Hanoi pledges incentives for EU businesses Hanoi is committed to creating an open and transparent investment environment for foreign businesses, especially from the European business community. Chairman of the Hanoi municipal People’s Committee Nguyen The Thao made the commitment at a meeting with the European business community in Vietnam on February 20. He said Hanoi has organised various meetings with relevant agencies and localities to accelerate administration reform and create the optimum conditions for foreign investment attraction. He assured his guests Hanoi will apply the “one-stop shop” mechanism and municipal leaders will address any investor concern as soon as they receive it. When investing in Hanoi, the city will be honest with investors about weaknesses and challenges, leaving the investor to decide, he said. Hanoi is well on its way to strong development and has already attracted a large number of key projects. It has paid due attention to international economic integration and implemented an open-door policy. It has established relations with more than 100 cities around the world and has conducted many cooperative projects with the European Union. Approximately 2,727 FDI projects are currently operating in the city with combined investment capital of US$21.9 billion, predominantly in real estate, information and communications technology, processing industry, manufacturing, and entertainment services. Nineteen EU member states have invested in 290 projects worth US$2.61 billion. Top of the list is France with 68 projects, followed by Germany (44) and Denmark (42) EU businesses’ turnover in 2012-2013 reached a phenomenal VND25.7 trillion and contributed nearly VND1.78 trillion to the State budget. Thao revealed Hanoi encourages foreign investment in high-tech, healthcare and education projects. He suggested priority areas for EU businesses, including high quality services, financial centre, banking, trade, electronics, information technology, high-tech park construction, support industry, resort development, education and training, professional health care, hospital and environment pollution treatment. Hong Kong to consume more Vietnamese products With a wealth of experience in trade liberalisation and foreign direct investment (FDI) attraction, Hong Kong (China) is rapidly becoming a potential market for Vietnamese products. Hong Kong’s Minister of Justice Rimsky Yuen made the statement at a February 20 seminar in HCM City. Rimsky said Hong Kong now has approximately 1,200 lawyers, 6,000 consultant lawyers and 1,400 foreign lawyers working for more than 800 law firms. It can meet most legal and arbitrator demands, not only in line with Hong Kong law but also international regulations should trade disputes occur. Participants at the seminar acknowledged Hong Kong is a gateway to China and other countries and therefore it is a key market for many Vietnamese export products. They encouraged the Vietnamese business community to take advantage of the opportunity to fully tap into this market and expand to other markets. Trade relations between Vietnam and Hong Kong have grown and flourished in recent times. In January 2014 Vietnam exported mainly seafood, rice, wood, timber products and garments to Hong Kong, earning US$357.9 million. The seminar “Hong Kong- an international centre for legal and arbitrator services” was organised by the Vietnam Chamber of Commerce and Industry branch in HCM City, the Department of Justice of the Hong Kong Special Administrative Region, the Hong Kong Trade Promotion Agency and the Hong Kong Economic and Trade Office. It aims to create the best possible conditions for the two business communities to boost cooperation and accelerate investment in Hong Kong. Viettel, FPT to provide cable TV services Having won approval from the Ministry of Information and Communications, the military-run telecom group Viettel is preparing to launch a cable television service in April while FPT Telecom will offer the service in August at the latest. A source from Viettel said that the enterprise has piloted the high-resolution cable TV service in Hanoi City, HCMC and Ha Nam Province since mid-2013. Viettel will pilot the service in 15 provinces and cities before officially launching it in April as earlier committed. Viettel is giving discounts to customers using its service during the trial period. After that, customers will have to pay for equipment and a monthly fee of VND85,000. Nguyen Van Khoa, director of FPT Telecom, told the Daily that the service would be launched one year after the date of licensing at the latest, or in August. Earlier, Viettel and FPT telecom pledged to pay fines if they fail to offer the service within one year from the date of approval. Viettel has committed to pay VND30 billion while FPT Telecom does not disclose a figure. Khoa declined to announce the estimated fees of its cable TV service. For Viettel, aside from the high-resolution package, it has also yet to disclose prices of the normal package. However, during an interview with the Daily before obtaining the license, Hoang Anh Xuan, general director of Viettel, said that it will offer a budget cable TV service for needy households in rural areas. The fees may be VND30,000-40,000 each month. Some experts predict that FPT Telecom will also have to offer reasonable fees to compete with other firms and attract customers when participating in the pay-TV market. In late 2013, many enterprises suggested the ministry set up floor prices for TV services to avoid undercutting. Currently, the satellite TV service of AVG is reported to have a fee of VND33,000. However, customers have to buy a set top box to use the service. Earlier, Viettel and FPT Telecom offered an Internet Protocol television service. However, Khoa of FPT Telecom said that the service requires huge investment from both service providers and users. Therefore, it is difficult to ensure suitable profits. Techcombank’s profit down 13.7% Techcombank has released partial business results in 2013 with its profit expected at VND878 billion, down 13.7% from the previous year. Techcombank said in a statement that provisions for bad debts had cut into its profit. In addition, the bank maintained cautious lending activities to ensure asset quality last year. In 2013, the lender focused on debt management and recovery and continued risk management. Its bad debt ratio stood at 3.65% at the end of last year. Techcombank obtained a modest credit growth rate of 2.95% in 2013 with total outstanding loan of over VND70.2 trillion. The loan-to-deposit ratio was 57.3%, a slump compared to previous years, while capital adequacy ratio (CAR) was 14.03% by late 2013. The bank reached out to nearly 3.3 million individual clients. Its total mobilization reached nearly VND120 trillion, up 7.6% against 2012. A source told the Daily that Techcombank has plans to keep selling bad debts to Vietnam Asset Management Company (VAMC) in the first half of 2014. Citi Vietnam appoints Dennis Hussey as CEO Citibank Vietnam has announced the appointment of Dennis Hussey as country officer, replacing Brett Krause who ended his term late last year. Hussey will be responsible for all the business of the two Citi branches in Hanoi and Ho Chi Minh City. The bank announced that as country officer, Hussey serves the critical role of protecting and leading the Citi franchise in Vietnam. He will represent Citi to key stakeholders in the country and across the global Citi network. He will also be accountable for franchise governance and management. Hussey holds a Master of Business Administration in International Finance from Helsinki School of Economics in Finland. Over the last 18 years, Hussey has assumed a wide variety of role in both corporate, investment and consumer banking in more than 10 countries in Europe, North America and Asia. He joined Citi in the UK as a management associate in 1995 and has developed his career in areas specialising in lending, corporate finance and advisory roles as well as client coverage and business management assignments. He also served as the country head of Sri Lanka. In 2009 he transferred to the consumer banking division of Citi, holding senior positions in both Japan and Spain, in the latter of which he served as president and CEO of Citibank Espana S.A. Hussey is no stranger to Vietnam. He has lived and worked in the country twice before, initially in 200 as head of corporate banking, a role he held for two years, and again briefly in 2004. During this time, Citi was actively involved in a number of innovative transactions and market developments. He also served on the board of directors of the American Chamber of Commerce in Hanoi during 2000-2001. “I am delighted to have the opportunity to work in Vietnam again. It is a country that has today transformed itself compared to what I saw in 2000. The country’s economy across most sectors has experienced significant growth and is increasingly proving itself as a destination of choice for foreign direct investment, particularly in the manufacturing sector. The government and State Bank of Vietnam have made tremendous progress in boosting the economy and managing challenges such as inflation, and the future looks very positive,” he said. “For my part, I feel both excited and humbled that my appointment comes at a time when Citibank Vietnam will mark 20 years since our first branch was established. Over these past 20 years Citi has been involved in many important transactional and market developments in Vietnam – indeed many former Citibank staff hold key roles in the financial sector here. I look forward to Citi Vietnam continuing to play a supporting role in serving Vietnam’s corporate and consumer clients, in contributing to the development of the national banking industry in particular and Vietnam’s economic growth,” he added. Workshop on maximizing Vietnam’s wind resources to be held in HCMC US and Vietnamese state officials and experts will meet at a Thursday workshop in HCMC to find ways to popularize and maximize wind resources in Vietnam. The workshop, jointly held by The US Consulate in Ho Chi Minh City and Vietnam’s Ministry of Industry and Trade, is an opportunity for Vietnamese government authorities and Vietnam’s wind power developers to engage the US government’s key developmental assistance agencies. The event, the first of its kind on wind power development co-organized by the two governments, will be joined by US speakers who will highlight ongoing projects in Vietnam as well as provide insight on how Vietnam can leverage their resources. They are the experts who are working for the US Agency for International Development (USAID), US Export Import Bank and the US Trade and Development Agency (USTDA) Mr. Pham Trong Thuc, the Ministry of Industry and Trade’s Director of Renewable Energy, will be a keynote speaker from the Vietnam’s side. The workshop will also feature industry experts in the field of wind development from both countries including senior speakers from GE and Black & Veatch, Mr. To Hoai Dan - chairman and CEO of Cong Ly Co – who will share his experience on wind farm development. Cong Ly Co has 10 wind turbines in operation in the southern province of Bac Lieu with 52 on order from GE. Meanwhile, Vietnam’s offshore wind construction will be discussed by Huy Hoang Transportation and Logistics, builders of the Bac Lieu Wind Farm. The event will also pull together over 20 developers interested in establishing wind farms in Vietnam. In addition to this, a number of private equity firms will attend, including a presentation on private equity financing for wind projects by Indochina Capital. The event will close with a panel discussion on Vietnam’s incentive policies to stimulate wind power projects which will feature a number of experts with extensive experiences in developing wind projects in Vietnam and around the world. HCM City pledges to develop supporting industries HCMC Chairman Le Hoang Quan, at a meeting with Japanese investors here last Friday, pledged to make stronger efforts to develop supporting industries so as to attract more Japanese manufacturing enterprises. Quan told the meeting that the city took heed to complaints from Japanese investors on the lack of local suppliers of components and accessories, and as such concrete steps are being taken to remedy the situation. More incentives are being offered for those enterprises engaged in supporting industries, said the city leader. The chairman noted that Japanese enterprises have also showed keen interest in supporting industries in the city, with many having put their names down in such sectors. The Vie-Pan Techno Park project is an example. Quan said this project is aimed to develop the first zone for supporting industries in HCMC. “This zone will be developed next week inside Hiep Phuoc Industrial Park, providing ready-built workshops meeting Japanese standards for investors in supporting industries. To date, some 25 Japanese investors have registered to lease workshops in this first-phase zone of 13 hectares,” said Chairman Quan. The entire zone when fully in place will cover 100 hectares, and “the city government will create all favorable conditions for Japanese investors,” he said. In addition, the city government will work with the Ministry of Transport on the opening of more air services from more Japanese cities to HCMC, according to Quan. He added that high-quality human resources for Japanese investors would also be attended to. Hirotaka Yasuzumi, managing director of the HCMC Office of Japan External Trade Organization (JETRO), said at the meeting that the inadequate development of supporting industries posed a huge challenge for Japanese investors. Local supplies for Japanese companies in Vietnam account for less than 28%, while this rate in Thailand or China is twice that level, he noted. Yasuzumi complained about the lack of information about suppliers of components and accessories in Vietnam, so Japanese investors face difficulties in finding reliable local suppliers. Japanese enterprises operating in Vietnam need the city’s help in finding local suppliers, he said. The JETRO official stressed that the city needed to have incentives encouraging local enterprises to invest in supporting industries, instead of relying on foreign investors. It is important that the city has its own enterprises in supporting industries so that Japanese investors can cut costs when partnering with local suppliers, he said. Singapore’s RHTLaw enters Vietnam Singaporean law firm RHTLaw Taylor Wessing has established a joint venture with PBC Partners in Vietnam as a further step in its ASEAN expansion. The firm announced February 18 that it had signed an exclusive agreement with Vietnamese law firm PBC Partners, which operates in both Hanoi and Ho Chi Minh City. The arrangement will give RHTLaw access to 22 legal professionals in Vietnam. PBC Partners will now be known as PBC Partners & RHTLaw. With the addition of PBC, RHTLaw can offer clients access to more than 950 legal professionals across 23 offices in Asia, the Middle East and Europe. The new joint venture came four months after RHTLaw announced a cooperation agreement with Indonesian law firm Hanafiah Ponggawa and Partners. Tough time for Vietnamese firms in foreign investments Several Vietnamese state-owned companies operating in oil and gas, electricity, minerals and telecom have suffered losses investing in foreign countries. Some have been forced to halt operation completely or file for bankruptcy, losing billions of USD in foreign investments. Phung Dinh Thuc, Chairman of the state-owned Vietnam National Oil and Gas Group (PetroVietnam) admitted at during a review meeting late last year that the group failed at its Venezuelan project. According to him, PetroVietnam has put a stop to an USD8-billion Junin 2 oil field project in the country three years after signing a joint venture contract. This decision was made as a result of an extremely high inflation rate exaggerating inflation rate of 57%. “With such a gloomy economic situation, no investors dared to start new investments or maintain their current projects,” Thuc commented. This was a difficult decision for PetroVietnam, as the Junin 2 project, located in Orinoco Belt, consists of large deposits of extra heavy crude, which has an estimated output of 1,400 billion barrels of oil. It was also Vietnam’s largest foreign investment project to date, and PetroVietnam held a 40% stake in it. They had expected to produce four million tonnes of oil per year and recover their initial investment after seven years. The two sides are currently negotiating the handover of the project and they may renew their cooperation upon the return of economic stability. PetroVietnam was also compelled to put an end to six oil and gas projects in other foreign countries which were devoid of profits. The state-owned Vietnam National Coal-Mineral Industries Group (Vinacomin) invested in five projects in Laos and Cambodia. The group had to stop one of its projects in Laos and lost all USD1.56 million in investment there. After their studies, they were disappointed to find that the mineral potential at three other projects were much lower than their initial estimates and were not suitable for large-scale development. Due to fierce competition, and unfamiliar with economic and political policies in foreign countries, some major Vietnamese investors have encountered insurmountable challenges when investing abroad. Even though Vietnam Military Telecommunications Group (Viettel) has succeeded in investing in seven foreign markets, the group failed in their Myanmar venture. The country has 60 million people, but only 10% use telecommunication services and market has been dominated by two telecom groups from Qatar and Norway. Hoang Quoc Dung, Vice Chairman of Binh Dinh provincial People’s Committee said last December that several local companies have gone bankrupted after using their assets as collateral to secure loans in order to invest in Cambodian rubber plantations. An anonymous investor in the field said a hectare of rubber trees can produce two million tonnes of latex per year and bring about an annual revenue of VND2.5 trillion (USD118.28 million), not including the sale of trees. The market is also very risky, however, depending on volatile prices. Many economists warn that domestic firms should be careful to take proper account of the risks before jumping into such large-scale investment projects. Opportunities attract exhibitors to 2nd Mining Vietnam Following the successful inaugural event in 2012, the 2nd International Mining and Minerals Recovery Exhibition and Conference (Mining Vietnam 2014) will be held from March 11-13 at the International Centre for Exhibition in Hanoi, a weekly magazine of the Vietnam Chamber of Commerce and Industry reported on February 18. According to the Vietnam Business Forum, as a recognised industry event, Mining Vietnam receives strong support from local authorities, investors, equipment manufacturers and distributors, service providers, technological trade promotion agencies, and companies in Vietnam and the world. Up to 80 percent of participating companies in 2012 will return to the 2014 event with bigger space to showcase their equipment and machinery. To date, there have been provisional country pavilion space allocations to Australia, China, Czech Republic, the Republic of Korea, Germany, Poland and the United Kingdom. International representation showed the development potential of Vietnam’s extractive industries. According to industry experts, this exhibition will be more active than the 2012 event because of bigger participation from neighbouring countries with a lot of joyful activities. BT Tee, Deputy Chief Representative of Allworld Exhibitions in Vietnam - the initiator of Vietnam Mining, said that although Vietnam's mining industry currently faces structural challenges, State and private industry enterprises still see development potentials and grasp opportunities by investing in equipment, renovating technology and improving professional knowledge for executive and production forces. He said first movers with far visions will take advantage of trade activities to learn about technology, equipment and service providers to meet their production needs and update industry development trend and knowledge. Mining Vietnam 2014 will return with better industry outreach and marketing campaigns to reinforce its position as the technology sourcing and industry networking platform for Vietnam and beyond. Specially, the event opens when a lot of projects are ongoing. This dynamism is the premise and motivation for foreign investors and suppliers to choose Vietnam Mining to advertise their products to potential buyers. At Mining Vietnam 2014, the Australian Trade Commission will update latest mining technologies and equipment in Australia and provide effective access to mining technologies and solutions to ongoing thorny issues of the industry in Vietnam and in the region. Besides, the fair is incorporated with connecting programmes and national conferences aimed to introduce investment opportunities and projects to interested entities. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR