BUSINESS IN BRIEF 22/3 VN high on instant noodles list Viet Nam is the world's fourth-largest consumer of instant noodles, purchasing roughly 5.4 billion packets yearly, according to the latest report of the World Instant Noodles Association (WINA). The country ranks behind China, Indonesia and India in the annual consumption of instant noodles. However, when ranked on the basis of per capita consumption, it comes third behind South Korea and Indonesia. A Vietnamese person consumes an average of 56.2 packets per year while the figure for a Chinese person stands at 36 packets. Viet Nam's instant noodle consumption has grown at a consistent double-digit rate and demand continues to rise in both urban and rural areas. In Viet Nam, the demand increased by nearly 24 per cent in 2008-12 while the rate stood at 3 per cent in China and Indonesia and 5 per cent in South Korea and Japan for the same period. According to statistics from the Ministry of Industry and Trade, Viet Nam is home to around 50 domestic and foreign-owned instant noodle producers and manufacturers, with a combined yearly output of nearly 50 billion packets. Major companies such as Vina Acecook and Asia Foods dominate Viet Nam's instant-noodle market. Vina Acecook currently claims 50 per cent of the market share, followed by Asia Foods with more than 20 per cent and Masan with approximately 10 per cent. Smaller businesses own the remaining 20 per cent. The food processing industry provides a wide range of instant products, including vermicelli, rice paper, and plain rice soup. Supermarket instant noodle prices range from VND2,500 to tens of thousands of dong per packet. The Vietnamese food processing industry exports its instant products to the United States, Australia, France and Germany. Canada and Eastern European markets of the Czech Republic, Slovakia and Hungary also provide a market for these products. PM approves plan for central EZ Prime Minister Nguyen Tan Dung has approved a new development plan for the Van Phong Economic Zone in the central province of Khanh Hoa. Under the plan, the multi-sector and multi-disciplinary zone will cover 70,000ha of land, and 80,000ha of water in Van Ninh District. It will include the International Container Trans-Shipment Terminal, a petrochemical industrial park, petroleum and oil product trans-shipment terminal, all of which will play a key role in the development of tourism, industry, aquaculture and other industries in the region. The zone will be developed in two areas: Van Phong's North and South. The Hon Gom peninsula and the Van Gia Town in Van Phong's North is where the International Container Trans-shipment Terminal, Port International Terminal, logistics services facilities, and urban tourism project will be constructed. The deepwater port, industrial park, urban areas and tourism services will be built in the south of Van Phong. In addition, Khanh Hoa Province has submitted a proposal for the construction of a Special Administrative Economic zone in the north of Van Phong. The project has two possible outcomes – the development of a special zone for international financial development or to become an industrial-services centre. Construction of the Van Phong Economic Zone began in 2006 and aims to be an integrated economic area in which the International Container Trans-Shipment Terminal plays a key role. Dense fog causes collisions in Hai Phong waterways During the last three weeks, thousands of goods reportedly sunk in water after ships entering the Hai Phong Port in the coastal Hai Phong City collided due to dense fog. Head of Hai Phong Port Authority Bui Van Minh cautioned about the dangers of dense fog to waterway traffic at the port area as at least three collisions had been recently reported there. Early yesterday morning, Pacific Express, a container ship registered in Viet Nam, which was en route from central Da Nang City to Hai Phong, with a capacity of over 11,000 tonnes collided with a fishing boat offshore about 7.5 nautical miles away from the city's Hon Dau Island due to dense fog conditions. The fishing boat, with seven crew members on board, sunk after the collision. The Hai Phong Port Authority gave timely instructions to the Pacific Express ship to search and rescue the crew members of the boat. Early this week, on Tuesday, the cargo ship ND2784, with four crew members on board and 1,118 tonnes of clinker, sank after it was hit by the Sai Gon Princess ship at the Bach Dang River estuary. The cargo ship was sailing from the northern Ninh Binh Port to Quang Ninh, while the Sai Gon Princess ship which was carrying 6,300 tonnes of maize was due to enter the Hai Phong Port. The four crew members aboard were saved by the local border guards. Dense fog that limited vision was reported to be the cause of the accident. Late last month, Phu Son 26, a ship owned by the local Phu Son Marine Transportation Ltd Company, with 700 tonnes of iron and 2,200 tonnes of tapioca, reportedly sank after being hit by another ship due to the same reason. The loss is estimated to be over VND50 billion (US$2.37 million). Minh noted that sometimes, the fog was so dense that it restricted vision to just few tens of metres. "The port authority and other relevant agencies have taken measures to instruct waterway vehicles venturing in the area," he remarked. Moreover, they also urged the ship owners to prevent any possible oil spills from the wrecked ships and salvage the ships. Low-income buyers can mortgage new homes Low-income buyers will be allowed to mortgage their new houses or apartments to access loans from the VND30 trillion (US$1.3 billion) housing stimulus package. This was announced in a joint-circular by the Ministry of Construction, the State Bank of Vietnam and the Ministry of Justice. The move is expected to help low income groups and stimulate the dormant real estate market, thus improving liquidity, said Minister of Construction Trinh Dinh Dung. Dung pointed out that the main reason for creating the package is to help low-income earners have their own houses or apartments. He said in the circular that this package will be a breakthrough in regulations as it will allow such home buyers to access loans. Previously, banks asked home buyers to provide proof of income and to prove their ability to repay the debt, or home buyers are asked to use other mortgages to borrow money from the package. Deputy Minister Nguyen Tran Nam added that home buyers will now be required to submit only one certificate from their workplace regarding their housing situation and income, instead of the two certificates that are previously required: one from the workplace and another from the home buyer's residential area. Nam said the regulation will help home buyers to prepare documents and follow the necessary procedures so that they can speed up the process of buying a house. He said the ministry will check the validity of the certificates at the buyer's workplace, adding that both the office and the home buyer will be held responsible for their declaration. Statistics from the ministry showed that by February 17, the central bank had approved lending contracts to 17 realty companies to the tune of VND1.46 trillion (US$69.5 million), of which, VND536 billion (US$25.5 million) was disbursed to 11 enterprises. More than 2,270 home buyers are scheduled to receive loans worth a total of VND821 billion (US$39 million), of which VND505 billion (US$24 million) is disbursed to 2,261 people. Norwegian ship equipment plant opens in Haiphong Vinomarine, the first Norwegian ship equipment production plant in the north of Vietnam, opened in the coastal city of Haiphong on March 20. The Norwegian Minister of Trade and Industry Monica Maeland who is accompanying Norwegian Crown Prince Haakon Magnus in an official visit to Hanoi cut the opening ribbon of the US$5.1 million plant. Located in the Nomura industrial zone, the plant covers an area of 3,000 sq.m with modern industrial facility. The number of employees is set to increase shortly from the current 35. "We have made an effort to recruit highly skilled personnel with varied maritime and technical background. Even though access to qualified labour is abundant here, we have been very selective in our recruitment. The result is a professional devoted workforce," says Managing Director Knut Ringstad. Behind Vinomarine and its new facility are three Norwegian industrial companies including IMS group, Jets Vacuum and Libra-Plast. The common goals of these three companies are to improve their access to the important Asian ship building markets, and to strengthen their own competitiveness. The Vinomarine facility will manufacture components and products in mild steel, and among other things it features a large, state-of-the-art sandblasting and paint system dimensioned for the sewage treatment plants made by Jets Vacuum. Chairman of Jets Vacuum, Kare Haddel, said they chose Haiphong to build the plant because the city is located at the very centre of Asia. "It has the largest seaport in northern Vietnam with excellent opportunities for import and export," said Haddel. Seminar seeks ways to build special economic zones Domestic and foreign economists exchanged experience in developing special economic zones at a seminar in the northern province of Quang Ninh on March 20. Speaking at the event, Vice Chairwoman of the National Assembly Nguyen Thi Kim Ngan said the Party and State of Vietnam are carrying out economic restructuring and renovating its growth model towards sustainable development. On the path, three to-be-built special economic zones – Van Don in the northern province of Quang Ninh, Van Phong in the central coastal province of Khanh Hoa and Phu Quoc in the Mekong Delta province of Kien Giang, are seen as the driving force behind the development of their regions and the country at large, she said. Head of the Party Central Committee’s Economic Commission Vuong Dinh Hue underlined the need to promptly approve the Law on Special Economic Zones set forth in the 13th National Assembly legislation programme. Andrew Grant from Mc Kinsey & Company of Singapore suggested Quang Ninh province raise a long-term fund for infrastructure and offer incentives in tax, finance and land in order to attract more investors. Apart from benefits and challenges in building special economic zones, participants at the event also tabled investment attraction, solutions for the synchronous development of infrastructure, and green economy. Lessons shared at the two-day event are expected to assist the development of special economic zones in Vietnam in general and Quang Ninh province in particular. Leaders of Quang Ninh, Khanh Hoa, Kien Giang and Lam Dong provinces also talked about the topic at a meeting which took place earlier in the day. Int’l seminar to discuss economic reform Hanoi is set to host an international seminar on economic reform for comprehensive and sustainable growth from March 24-25. High on the agenda will be discussions on sustainable socio-economic development and current global trends on comprehensive and sustainable growth. Participants, including famous experts and scholars, will share experience and policy proposals with Vietnam concerning comprehensive and sustainable growth and ways to raise national competitiveness. Economic restructuring and growth model shifting towards sustainable development draws positive attention from foreign countries and organisations. Vietnam has received significant assistance from development partners, including the United Nations Development Program (UNDP), to realise the task. The event will be co-hosted by the Ministry of Foreign Affairs, the Vietnam Academy of Social Sciences, and United Nations Development Program. Danang to host International Statistics Conference As many as 250 delegates from around the world will attend an International Statistics Conference in Danang City from October 7-10. The event, organised by the International Association for Official Statistics (IAOS), will bring together representatives from global statistical agencies, IAOS members, the Statistical Institute for Asia and the Pacific (SIAP), the statistical office of the European Union (Eurostat), economic groups, production agents, statistics researchers and university professors and scholars. They will discuss key issues, such as changes in information users’ demands, easy access and data reliability, and new technologies, particularly the use of the Internet to collect and release data. They will examine ways to address issues related to macro-data accessibility, information security, and the retrieval of administration data for State statistics. Established in 1985, IAOS aims to promote knowledge and advancements in official statistics services globally. The IAOS conference is held biannually in different cities around the world. Each conference tackles issues reflecting current benefits. IAOS 2014 will provide a good opportunity for Vietnam to raise the statistics sector’s prestige among the international community and promote the country’s land, people and culture to international counterparts. Local business receives Spain management award Quang Tri Trading One Member Ltd Company has been presented with an International Century Quality ERA Award by Spanish Business Initiative Directions (BID) for two of its products – Huong Hoa cassava starch and Cua pepper. Those which receive the annual awards must meet BID regulations and comprehensive quality management model’s standards based on three criteria: sustainable development, ability to meet customers’ desires and creative business. Since 1986, BID has selected and presented awards to businesses from 178 countries worldwide. This year, companies from 76 out of 114 participating countries won the awards. Quang Tri Trading Ltd Company is the only Vietnamese enterprise to win the honour. The company’s director Ho Xuan Hieu said it has devised strategies to develop its brand names and coordinated closely with farmers to develop these products sustainably. Binh Duong holds customs dialogue with Japanese firms A total of 100 Japanese firms operating in the southern province of Binh Duong discussed issues regarding tax policies and export-import procedures at a dialogue on March 19. Local customs officials clarified the procedure of the Japanese-funded Vietnam Automated Cargo and Port Consolidated System and the Vietnam Customs Information System (VNACCS/VCIS). Most of the Japanese businesspeople raised concerns about the use of on-site export invoices and the inspection of import quality. Regarding on-the-spot export-import inspections, Nguyen Hong Hanh, deputy head of the Binh Duong provincial customs department, said businesses have to submit invoice copies only to the customs office when necessary. They are permitted to bring special goods such as vaccines, medicines, health equipment, cattle feed and fertilizers to their headquarters for quality checking under the supervision of customs officials, he said. Binh Duong has attracted more than 17,400 projects, of which 2,250 are foreign direct investment (FDI) ones worth a total of nearly US$20 billion. With 204 projects valued at over US$4.3 billion, Japan has become the largest investor in the province. Vietnam expected to post two-digit export growth A HSBC report released on March 19 anticipates that Vietnam's merchandise exports will grow at around 12% annually between 2014-2016, although last year's figure was 15.4% in nominal US dollar terms. The HSBC Global Connections Report completed last December covered 23 markets with a sample of 5,550 exporters, importers and traders from small and mid-market enterprises on trade volume, buyer and supplier risks, and the need for trade finance, among others. It gauges sentiment and expectations on trade activity and business growth over the next six months. Of the Vietnamese businesses surveyed, 70% see Asia as the most promising region for trade "over the next six months" (2014's H1). Europe was cited by 14% of respondents, reflecting the return to growth in the Eurozone, and 10% selected North America. Almost 90% of businesses surveyed trade elsewhere within Asia. Around 45% trade with Europe and nearly 20% with the Americas. Vietnam's trading reach is becoming more international, with 10% of businesses reporting trade with the Middle East and/or Latin America compared with less than 5% when the survey was first conducted in 2009. The currency of choice for trade is predominantly the US dollar, identified by almost 80% of respondents. But currency volatility is a concern for almost 40% of traders, and half of respondents reported that trade was negatively affected by weak product demand. The report says the economic growth rate is set to pick up in the medium term, helped by a strong improvement in foreign direct investment. Lower inflation and credit constraints will support domestic activity. Rising incomes across emerging markets will help to drive strong trade flows from Vietnam to these markets. China will replace the US as Vietnam's largest export destination by 2030, while Malaysia will move from fifth place in 2012 to third place by 2030. The ASEAN Free Trade Area (ACFTA) will pay dividends, helping exports to Indonesia and Malaysia to grow around 15% a year until 2030. Clothing and apparel will still be Vietnam's biggest export sector in 2030, reflecting sustained wage competitiveness, but exports of ICT equipment are forecast to increase by 10% a year until 2030, by which time it will have become the second largest export sector. China and the Republic of Korea will still be Vietnam's largest import partners in 2030. Imports from India are forecast to rise rapidly, growing almost 20% a year, making India its third largest import partner by 2030. Industrial machinery is expected to account for more than 25% of the growth in goods imports, as Vietnam develops its infrastructure needs. In 2013 almost 20% of Vietnam's exports were high-tech goods, up from around 5% ten years before. Vietnam imports slightly more high-tech goods than it exports, some are final consumer products, but other high-tech imports are intermediate inputs into the ICT production process. Around a third of Vietnam's population now lives in cities. The rapid pace of urbanisation should provide an increasingly skilled workforce to help the country develop its foothold in global ICT. However, this will depend on increasing spending on R&D. VN, Lao firms ink new deal Blue Star Distribution Joint Stock Company is all set to sign an agreement with Dao-Heuang Group, one of Laos' top companies, to distribute the latter's coffee products in Viet Nam. The deal comes as part of a co-operation programme between HCM City and Champasak province in Laos. Dao-Heuang exports its Dao Coffee to many countries like Japan, Switzerland, Italy, China, and Singapore. It will now, in turn, distribute Blue Star's confectionery and other products in Laos. Leuang Litdang, chairwoman of Dao-Heuang Group, said her company plans to tie up with Vietnamese partners to expand its business and production in Viet Nam. If the plan succeeds, it will be the first Lao company to invest in Viet Nam. Since setting up the co-operation programme in 2001, HCM City and Champasak have achieved solid results, with HCM City investors starting nearly 40 projects in the Lao province, most of them in agro-forestry, industry, and tourism. This has made Viet Nam the biggest investor in Champasak. Trade and economic ties between Viet Nam and Laos have grown strongly this year. Metro to change brand positioning with new campaign Wholesaler Metro Cash & Carry Viet Nam is seeking to change its brand positioning with a campaign called "You & Metro," through which it hopes to become the partner of choice for independent small and mid-size businesses. It said in a release that it puts its customers and their individual passion in the spotlight. "Everything we do is geared towards making our customers more successful in their business," Philippe Bacac, managing director of Metro Cash & Carry Viet Nam, said. "This is the essence of our new brand positioning, our claim, and our new image campaign," Bacac said. The campaign begins at a time that the company is set to celebrate its 50th anniversary, which will be marked by several events and promotions for customers. Vietcombank to abide by US foreign account tax rule Vietcombank plans to be the first Vietnamese bank to conform to the US' Foreign Account Tax Compliance Act (FATCA). The registration procedures are expected to be completed before April 25. The bank announced this in a news report earlier this month, as it selected the consulting firm KPMG Viet Nam to advise it on the issue. FATCA is a set of new tax laws which will be effective from July 1, 2014. The US government enacted the law in 2010 to prevent and detect tax evasion by US taxpayers who are hiding income and assets overseas. The rules affect almost every financial institution in the world, including those in Viet Nam. Customs officials clarify export procedures One hundred Japanese firms operating in the southern province of Binh Duong were told about tax policies and export-import procedures at a meeting on Wednesday. At the event, Binh Duong customs officials clarified the procedures of the Japan-funded Viet Nam Automated Cargo and Port Consolidated System and the Viet Nam Customs Information System (VNACCS/VCIS). Most of the Japanese businesspeople raised concerns regarding the use of on-site export invoices and the inspection of the quality of imports. Regarding the on-the-spot export-import inspections, Nguyen Hong Hanh, deputy head of the Binh Duong provincial customs department, said businesses have to submit invoice copies only to the customs office when required. They are permitted to bring special goods such as vaccines, medicines, health equipment, cattle feed and fertilisers to their headquarters for the quality monitoring under the supervision of customs officials, he said. Binh Duong has attracted more than 17,400 projects, of which 2,250 are foreign direct investment ones, worth a total of nearly US$20 billion. With 204 projects valued at over $4.3 billion, Japan has become the largest investor in the locality. Nam Dinh plans new textile industry zone A 1,500-ha textile industry zone is expected to be built in Nghia Hung district, Nam Dinh province, by the end of 2014, according to Vietnamplus news website. The project, jointly invested by the Luenthai Company of Hong Kong (China), the Viet Nam National Textile and Garment Group (Vinatex) and China's Jialida Company, is worth US$400 million. During a working meeting with provincial officials, representatives of the investors proposed that the province should hand over the land soon and introduce preferential policies for them. They also asked for permission to build a power plant and a wharf to help the operations of the industrial zone. Hanoi sees 0.15 percent CPI drop in March Hanoi’s consumer price index (CPI) in March declined by 0.15 percent over last month’s figure, but up 5.99 percent against that of the same period last year. It was attributed to the plunge in prices of foodstuff and restaurant services (0.21 percent) and that of housing, electricity, water, fuel and construction materials (1.22 percent). According to economic experts, the purchasing power often went down after the nine-day Lunar New Year (Tet) holiday, which ended on February 6. Gas price dropped 31,000 VND per a 12kg cylinder since the beginning of the month. Meanwhile, prices of beverages and tobacco rose slightly, up by 0.37 percent; garments-textiles, headwear and footwear, 0.14 percent; household utensils, 0.17 percent, and medicines and healthcare services, 0.06 percent.- HCM City, Phnom Penh boost comprehensive ties Leaders of Ho Chi Minh City and Cambodia’s Phnom Penh capital have agreed on measures to foster the two cities’ comprehensive and extensive cooperation in economics, trade, education, culture and health care. At their talks in Ho Chi Minh City on March 20, Chairman of the municipal Party Committee Le Thanh Hai and Phnom Penh Mayor Paso Cheatevong also reviewed results of the two sides’ cooperative programmes in the past. Hai said he believes that under the leadership of King Norodom Sihamoni and the Cambodian People’s Party, Cambodian people will reap greater fruits and increase the country’s position in the region and the world. When suggesting youth cooperation inclusion in the two cities’ cooperative programmes, Hai also confirmed that Ho Chi Minh City will do its utmost to further consolidate its relationship with the Cambodian capital. Mayor Paso Cheatevong thanked Ho Chi Minh City for its assistance in economic development, education, health care, human resources training and waste treatment. He said bonding together with Ho Chi Minh City will enable both to strongly engage in realising the goal of raising bilateral two-way trade from the current 3 billion USD to 5 billion USD in the future. The mayor suggested the two sides strengthen tourism ties, through the opening of tours connecting the two cities and other localities.- Vietnam targets 11 billion USD from aquatic export Vietnam strives to earn 11 billion USD from aquatic exports by 2020, including 5.5 billion USD from the shipment of farmed products. The target was revealed by the Directorate of Fisheries under the Ministry of Agriculture and Rural Development at a press briefing in Hanoi on March 20 on the occasion of the sector’s Traditional Day (April 1, 1959-2014). According to the General Statistics Office, i n 2013, the aquatic sector pocketed 6.7 billion USD from exports, a year-on-year increase of 10.1 percent. The output of aquatic products rose from some 1 million tonnes in 1990 to nearly 6 million tonnes at present, including 2.7 million tonnes of caught products and 3 million tonnes of farmed products. At the event, the directorate’s officials also said Vietnam prioritises growing shrimp and tra fish which are of high economic values.- Central Highlands hastens work on Ho Chi Minh Highway Central Highlands provinces are accelerating the construction of a section of the Ho Chi Minh Highway running through the region in a bid to complete it by 2016. The 663 km section runs through Kon Tum, Gia Lai, Dak Lak and Dak Nong, ending in Chon Thanh, the southern province of Binh Phuoc . It links the region with central and southern key economic zones. According to the Steering Committee for the Central Highlands, the first construction phase of the 110 km route from Dak Gion to Tan Canh in Kon Tum province has been completed. The remaining 553 km of the section from Tan Canh to Chon Thanh is divided into 24 projects. Of them, 13 projects are funded through Government bonds. About 80 km of the projects’ total 133 km has been completed, and the remainder is expected to be operational by the end of 2014. Meanwhile, five others under the Build-Operate-Transfer model are scheduled to open to traffic by 2015. The 3,167 km highway traverses from the northern mountainous province of Cao Bang to the southernmost province of Ca Mau . It is to the west of National Road 1A and roughly follows the Ho Chi Minh Trail used during the American war.- Thai Nguyen: More projects for Yen Binh IP A memorandum of understanding (MoU) on the construction of a 100 million USD high-rise workshop project in Yen Binh Industrial Park (Yen Binh IP) in the northern province of Thai Nguyen was signed in Thai Nguyen city on March 20. The signatories were representatives from the Yen Binh Investment and Development Joint Stock Company (Yen Binh JSC) and the Gyeongmin Engineering and Architecture Company (GEAC) of the Republic of Korea. Under the MoU, Yen Binh JSC will rent 100,000 sq.m of land in the park to GEAC to execute the project. It will also support the RoK partner in applying for an investment certificate so the company can carry out the project as soon as possible. According to Vu Van Hop, Chairman of Yen Binh JSC, the project aims to meet growing demand from the RoK’s small and medium-sized enterprises (SMEs), which are operating in high-tech sectors. Once completed, it will be able to accommodate between 100 and 150 RoK businesses. In order to lure more investment into the park, Yen Binh JSC is hastening the construction progress of a 150,000 cu.m per day water plant in the park. The province is also building a road linking Hanoi and Yen Binh IP, with a total investment of 200 billion VND. In 2013, Thai Nguyen led localities nationwide in FDI attraction, raking in about 3.3 billion USD, making up 16.1 percent of the country’s total figure of 21.6 billion USD. International retailers continue to expand operations in VN Parkson has returned, while Ocean Group has jumped into the Ho Chi Minh City market. The moves taken by big international retailers are believed to heat up the market, the VietNamNet Bridge said. Any move by big international retailers would have influences to the retail premises market, the online newspaper noted. On March 15, Parkson, the big guy from Malaysia, took delivery of six trade floors at Léman Luxury Apartments in District 3 developed by C.T Group. This is the second project co-developed in cooperation between Parkson and C.T Group. The other one is Parkson Shopping Mall at C.T Plaza in Tan Binh which has been operational. Prior to that, in December 2013, the shopping mall exploiter, belonging to Malaysian Lion Group, inaugurated another shopping mall in District 2, its eighth shopping mall in Vietnam. As such, Parkson has developed nine shopping malls, including six in HCM City, two in Hanoi and one in Hai Phong City with the total floor area of 172,000 square meters, since the day it arrived in Vietnam in June 2005. The retail premises area occupied by Parkson Vietnam is the third largest among the six markets Parkson has invested in so far, including Malaysia, Indonesia, China, Sri Lanka, Myanmar and Vietnam. However, the number of Parkson shopping malls in Vietnam is really modest if compared with China, Malaysia, Indonesia and Sri Lanka. Tham Tuck Choy, General Director of Parkson Vietnam, said 2013 was a difficult year for Parkson and retailers, but declined to talk about the revenue. However, The Edge Financial Daily has reported that the revenue of Parkson Holdings Bhd, which holds the controlling stakes of Parkson Retail Asia, was lower by 4.2 percent in the first quarter 2014 than the 2013’s first quarter, while the shopping malls in Vietnam’s revenue decreased by 2 percent. Though the market is getting tougher, Parkson still keeps confidence on the long term potentials of the Vietnamese market. It plans to open one or two more shopping malls a year, after considering the market performance and the retail premises market. In 2014, a shopping mall would be opened in the central city of Da Nang, while Parkson are looking for retail premises to set up more shopping malls in Hanoi and Hai Phong. Also in March 2014, the Republic of Korea’s Lotte Group put its seventh Lotte Mart in Vietnam into operation. This is one of the three shopping malls the group plans to set up this year. The other two are located in the Go Vap district in HCM City and in Can Tho city. The Japanese Aeon would put its second shopping mall into operation in Binh Duong province after it opened the first one in Tan Phu district in HCM City. Not only foreign investors, Vietnamese corporations have also jumped into the market. Ocean Group is about to inaugurate a shopping mall on the Van Thanh “golden land plot” in HCM City. The ambitious business plans to develop 70-80 Ocean marts and Ocean malls nationwide by 2015 which would cover the area of 200,000 square meters in total. Ocean Group, together with Vincom, the Vietnamese financially powerful groups, are believed to be the rivals to foreign investors. Ocean Group has made its presence in the southern market by developing the five Vissai Hotel. Gov't outlines key tasks for improving competitiveness The Government has recently issued a resolution which stipulates key missions and measures to improve business environment and raise national competitiveness, the Government news portal reported. The Government tasked ministries, agencies and localities to focus on strategic breakthroughs, economic restructuring and transformation of growth model. It proposed more preferential policies to mobilise non-state resources in favour of infrastructure investment, IT applications in all branches and sectors, renovation of management, production and services as well as higher national competitiveness. It also targets to improve education quality especially at tertiary education and vocational training and develop human resources, especially high-quality human resources. In the 2014-2015 period, the Government will focus on improving business environment and speeding up the administrative reform. By late 2015, Vietnam will be able to reach the medium level of the ASEAN+6 group. Ministries, agencies and localities are responsible for reviewing administrative procedures for amendments, the resolution says.- Vietnam aims to boost online bidding Vietnam always regards online bidding as one of the particularly important public services in the e-commerce development plan and in national programme for information technology application at State-funded agencies, Deputy Minister of Planning and Investment (MPI) Dao Quang Thu said in a recent review on its pilot online bidding project for 2012-2013 period. Deputy Minister Dao Quang Thu was quoted saying by Vietnam Investment Review newspaper that if cleverly applied, this form of tender would improve the publicity and transparency in bidding events. This has partly reflected the resolution of the Party and the Government in the fight against bureaucracy and corruption. And, this has shown the clearest commitment of Vietnam to international donors, Deputy Minister Thu said. Nguyen Son, Deputy Director of Procurement Management Department under the MPI said in the coming time, the MPI is quickly compiling decrees and circulars on the enforcement of Bidding Law 2013, which specifies online bidding. In the 2012 - 2013 period, the ministry actively publicised information on this type of bidding and trained personnel for this area. Specifically, it organised more than 60 training courses on online bidding for investors, bid solicitors and bidders at ministries, branches and localities across the country. More than 4,000 staffs from 30 ministries, localities, economic groups and corporations were trained. Le Van Tang, Director of the Public Procurement Agency said units nationwide successfully carried out over 1,000 online bids by the end of 2013. All activities related to these events like bid plan announcements, bid invitation announcements, bidding document filing, bid opening and bid result announcement were made on the system. More than 9,200 bid plans and over 57,000 bid invitation announcements were published. More than 7,400 tenderers and over 2,600 bidders registered to use the system. He said, to further improve this new "institution," the Ministry of Planning and Investment introduced solutions to perfect this apparatus like ensuring smooth and stable system operation round the clock, providing supports to users via various channels like telephone, e-mail and especially intuitive remote instruments to instruct and reply investors, tenderers and bidders to publish bid information and host online bidding. Remarkably, the number of users (auctioneers, bidders and registrants) in the 2012 - 2013 period increased sharply over the 2009 - 2011 phase. Specifically, the number of registered users soared 500 percent, the number of bidders jumped 650 percent and the number of auctioneers surged 460 percent. Online bids increased nearly 20 folds. The number of bid invitation announcements and bid plan announcements increased almost 3 times and 11 times, respectively. Nguyen Son said online bidding is a growing development trend in the world, particularly in developed countries. The European Union (EU) has long adopted electronic bidding and all EU members are obliged to apply this method from 2015. In Vietnam, online bidding, if applied broadly, will help cut State budgets, reduce travel and printing costs as well as diminish bad deeds. It will also help approach international practices and standards - an extremely important condition for Vietnam to finalise TPP negotiations. In Singapore and the Republic of Korea, online bidding is reported to save 3-20 percent of bid value. In Vietnam, the total value of auction packages bid every year is over 20 billion USD. Therefore, expanding online auctions will contribute billions of US dollars to the State Budget annually. However, according to Le Van Tang, the biggest obstacles to online bidding is enterprises dislike explaining too much to authorities about their online bidding processes. Another barrier is our limited information technology level and technical infrastructure. Notably, legal validity and digital signatures in online bidding have not been fully recognised. An official from the Hanoi Department of Planning and Investment said the department planned to launch 10 tender packages online in 2013 but eventually finished just three packages with this method because of low IT level. In professional aspect, the Vietnam Posts and Telecommunications Group (VNPT) easily pointed out these inadequacies. Bidding online is a form of advanced information technology application. The current system supports only Internet Explorer (IE), the web browser developed by Microsoft, versions 6.0-10.0 while the latest version, IE 11, is not supported. A representative from the World Bank Group (WB) said that online bidding is really becoming a major trend of the world. In the Plan to 2025, it pledged to support Vietnam to invite leading specialists of this field as well as provide more support for Vietnam in this field. Director Le Van Tang said the wide-scale application of online bidding is very feasible, with an estimated budget of 300 billion VND (14.4 million USD), the second phase of the project will be launched in May 2014 and expected to be continued in 2015 if approved. And, difficulties and obstacles in online bidding will be collected and addressed. Driven by information measures, this form of bidding is expected to account for higher proportion.- Office rents to remain stable in HCMC Ho Chi Minh City’s office market will see steady rents this year thanks to limited new supply, Vietnam Investment Review says. According to national director for office services at CBRE Vietnam Greg Ohan, CBRE, Commercial Real Estate Services, has been tracking 175 new small and medium-sized mixed use commercial buildings in the southern economic hub. Half the buildings are being built by State-run companies and 50 percent are ready to be occupied. Ohan also said the tracking fund helps large tenants planning for an occupancy solution and that the market would remain tight until the end of 2014. “As a result, rent levels will remain stable until at least the first quarter next year when the next wave of supply comes online.” In the first quarter this year, only one new Grade B office building is slated to be finished in the city. The MB Sunny Tower on Tran Hung Dao street in District 1 is opposite the five-star hotel Pullman Saigon Centre, says CBRE. During 2013, unlike the Hanoi market where Grade A office supply continued to rise, particularly in outlying districts, the Ho Chi Minh City market was stable with limited new Grade A and Grade B office supply in both the CBD and further districts, Ohan said. According to CBRE, the southern market offers few options for multinationals seeking international standard and quality buildings with large availability until the year-end. The reason is that in the CBD (central business district), just seven Grade A buildings and three Grade B buildings are able to provide 1,000 square metre spaces at adjacent levels. In particular, the Union Square complex is converting serviced apartments into offices. As for last year’s leasing, the tracking fund showed the top five most active sectors were technology, manufacturing, finance, education, and retail. When it came to countries, Japan held the lead. Ohan further said the statistics also showed relocation and expansion continued to be the major driver and this was expected to last through the end of this year.- Nam Dinh plans to build new textile industrial zone A 1,500-hectare textile industrial zone is expected to be built in Nghia Hung district, Nam Dinh province, by the end of 2014. The project, jointly invested by Luenthai Company of Hong Kong (China), the Vietnam National Textile and Garment Group (Vinatex) and China’s Jialida Company, is worth 400 million USD. During a working session with provincial officials, representatives of the investors proposed the province hand over the land shortly and introduce preferential policies for the financers. They also asked for the permission from the province to build a power plant and a wharf to help the operation of the industrial zone. Doan Hong Phong, Vice Chairman of the provincial People’s Committee, said the province will hand over the cleared space to the investors by the last quarter of this year, adding that Nam Dinh would create a good working environment for the investors. Authorities suggested that the investors establish a joint venture, prepare all financial resources for the project and secure the ecological environment of Nam Dinh’s sea territory. Representatives of the investors said they would start construction of the industrial zone right after the land is made available, and estimated that they would draw secondary investment after six months. The key sectors of the industrial zone are textile and leather. The zone is expected to generate 3 to 4 billion USD of revenue each year, pay 300- 400 million USD of tax and attract 160,000 workers.- Vietnam urged to develop affordable housing According to Victoria Kwakwa, World Bank country director in Vietnam, the country is undergoing a process of rapid urbanisation with nearly a million people moving to cities per year putting an immense pressure on housing demands. “This growth is expected to generate enormous new housing demands, especially in the low and middle income segments due to large scale rural-urban migration,” Kwakwa was quoted as saying at a seminar held in Hanoi last week to share experiences with Vietnam about the development of affordable housing. Kwakwa said Vietnamese authorities should better define and understand the housing deficit for poor urban households – the bottom 40 percent or those below the median income. “In this context we believe it is important to also consider the housing conditions of migrants, not only those of officially registered residents. It will also be important to think of ways of formalising those living in informal settlements. Vietnam is fortunate to not have the large slums seen in other large cities such as Manila or Jakarta,” she continued. “Given the rate of rural to urban migration and the fact many new arrivals to the city work in the informal sector, there is a risk that informal settlements may grow rapidly. By addressing the issue of informality in the housing sector head-on, Vietnam would be able to avoid the expansion of slums,” she added. Responding as to why the housing sector in Vietnam is currently embroiled in challenges, Kwakwa said there is an oversupply of high-end units and undersupply of lower cost units in urban areas. “This mismatch suggests market failures in the housing sector. It is important to understand the causes of these market failures,” she added. In countries where there is ample relatively affordable housing across income strata, the role of governments she said must be to ensure a level playing field for market participants with specific assistance provided to the poorest households. “When governments focus on the enabling environment, resources from the private sector can be better leveraged to create a sound and sustainable housing sector,” she said. Abhas Jha, sector manager of Urban, Disaster Risk Management and Transport, East Asia Pacific under the WB said that to avoid slumps, the government can proactively enable affordable housing without direct provisions by improving the land market and increasing accessibility and mitigating risk. “Planning must be part of the integrated, long-term, risk sensitive land use and transportation planning,” Jha said. Moreover, affordability should be considered including a range of interrelated expenditures, not just the cost of a housing unit, he added. Construction Minister Trinh Dinh Dung said Vietnamese people have a high demand for accommodation but house prices are much higher than average income. “Therefore, making houses affordable requires support from the government and even international organisations,” Dung added, noting that housing is determined as a priority in socio-economic development policy until 2020 with a view to 2030. As such, a series of legal documents have been issued to support the development of the social housing market, notably the low interest 30 trillion VND (1.41 billion USD) loan package aimed at homebuyers and property developers. The thing Vietnam must do first and immediately is increase the supply of affordable housing to disburse the above package from the government and therefore provide more and more affordable housing. The second thing that must be done, Dung said, is continue reviewing the law related to this issue to transfer the package to the right receivers as soon as possible. Vietnam has the goal of building 10 million square metres of social housing, mainly apartment buildings, by 2015 to meet low-income earners’ demands. It will provide support for 400,000 poor families in rural areas in need of houses.- Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR