BUSINESS IN BRIEF 12/8 Cement producer awarded huge French contract Vissai Ninh Binh Group has won a contract to export 1.5 million tonnes of clinker to Ciment de Bourbon, France, for use in the construction of an expressway on Reunion Island. In accordance with the terms of the contract, the largest of its kind between France and a Vietnamese cement producer, the first batch of 115,000 tonnes of clinkers has already been shipped to the French market, said Vissai Ninh Binh Group Deputy General Director Nguyen Tien Dat. Dat said the contract lasts for five years with an average price of US$42/tonne. Rice exports to hit 6.3 million tonnes in 2014 The Vietnam Food Association (VFA) has forecast that the country’s rice exports are likely to reach 6.3 million tonnes this year. The association also predicted rice exports of 1.9 million tonnes and 1.4 million tonnes in the third and fourth quarters of 2014, respectively. Vietnam shipped over 3.6 million tonnes of rice in the first seven months of 2014, earning US$1.056 billion, representing decreases of 10.78% in volume and 10.27% in value. However, the average free-on-board (FOB) price of Vietnam’s export rice hit US$413.44 per tonne, up US$2.43 compared to the same period last year. Last year, Vietnam exported 6.7 million tonnes of rice, 11% lower than the initial target, as the sector faced many difficulties. Onus on beef industry to improve competitiveness If the beef industry does not undergo a remarkable transformation, it will not be sufficiently competitive with imported beef in the future to survive, according to Nguyen Dang Vang, President of the Vietnam Husbandry Association. Vang said Vietnam has become the second largest consumer of Australian beef with 84,000 head of cattle imported since the beginning of this year, and the figure is forecast to reach 150,000 by the year-end. Tong Xuan Chinh, deputy head of the Animal Husbandry Department, said the influx of Australian beef is attributed to local consumers’ increasing demand. Although imported beef is currently subject to a tax of 5%, it overwhelms local beef thanks to lower breeding costs and large-scale and modern breeding procedures overseas. The price of Australian beef imported into Vietnam hovers around VND65,000 per kilo (just US$2.75-US$3.2) while local beef is sold for VND65,000-80,000 per kilo. Many experts worry that subsequent to Vietnam signing the Trans-Pacific Partnership (TPP) agreement, the import tax on beef will be gradually slashed to zero percent by 2018, which would reduce the cost of imported beef even further, effectively killing the beef industry in Vietnam. Vang emphasised that the Ministry of Agriculture and Rural Development (MARD)’s project to restructure the husbandry sector aims to speed up the breeding of cows to increase the added value in agriculture. However, if the beef industry does not make remarkable changes in terms of breeding procedures, scale, and prices, local beef cannot compete with imported products. Nguyen Do Anh Tuan, director of MARD's Centre for Agriculture Policy Consultancy, said Vietnam’s beef industry still has plenty of time to make changes and sharpen its competitive edge. One advantage Vietnamese beef has is that local consumers still prefer to purchase beef at traditional markets. This is a natural “shield” that serves to protect the domestic beef industry, Tuan said.  Dang Kim Son, director general of the Institute of Policy and Strategy for Agricultural and Rural Development, in turn said the biggest hindrances to the cow breeding industry are small-scale breeding, outdated production procedures, low productivity, lack of planning and little co-ordination in consuming products. To get out of the woods, the industry should set up commercial cow breeding models between farmers and businesses. Getting involved in the supply chain, farmers should receive support from businesses to obtain bank loans for production. In fact, several models have proved successful in Dong Nai and Hanoi. Apart from cooperation between businesses and banks, there should be support from the State and slaughtering establishments to establish a comprehensive production and consumption procedures, contributing to boosting the cow breeding industry and overhauling the husbandry sector. Japan eyes M&A deals with Vietnam Vietnam has taken the lead in the Southeast Asian region as the most attractive destination for merger and acquisition (M&A) deals with Japan, said a recent M&A forum in Ho Chi Minh City. Since 2010, the forum reported, Japanese investors have signed 69 M&A deals with Vietnamese partners, overtaking all other countries in the region. A survey conducted by the Japan External Trade Organization (JETRO) last year showed Japanese companies are most likely to invest in Vietnam. In the survey, companies considered Vietnam as the most enticing in ASEAN with its appealing low labour cost, economic stability, and high quality labour force. Vietnam has wooed a large number of foreign investors thanks to its abundant labour force and impressive market growth. Many companies are keen on such fields as service, construction, food, information and communications, retail, and ceramics. Revised zoning plan for Dung Quat seaport 2 approved The Ministry of Transport has enacted a revised zoning plan increasing the number of ports at the Dung Quat deep water seaport No2 in Dung Quat Economic Zone (EZ) in central Quang Ngai province to 27 by 2030. Spanning a total area of 1,850.2 ha, seaport No 2 construction will be divided into four phases, with the first lasting until 2020, concentrating on southern ports, starting from Ba Lang An cape. The second phase will develop northern ports through to 2025, while the third phase will be carried out till 2030, with a focus on ports handling heavy container vessels from 30,000DWT to 80,000DWT. The final phase is scheduled for completion after 2030, with a view to constructing an additional 11 ports handling ships ranging from 10,000DWT to 200,000DWT. The EZ is among five coastal economic zones in Vietnam prioritised for receiving State investment in order to develop into an economic zone of multi-sectors targeting heavy industry and an open industrial city of the future. Most of the investment capital for the port will be sourced from investors in Dung Quat EZ. The State will also provide funding through incentive tax policy and preferential land rentals. Finance Ministry vows to boost tax reform The Ministry of Finance (MoF) will abolish unnecessary tax and customs procedures in an effort to facilitate business operations, said MoF Minister Dinh Tien Dung. In a weekly Q&A session run by the Government Portal on August 10, Dung said in a Cabinet meeting for July the MoF submitted a plan to ease business difficulties, with a focus on tax and customs reforms. Businesses and people complain about cumbersome and time-consuming tax procedures at tax agencies Time for businesses to carry out tax procedures has declined from 1,050 hours in 2008 to 941 hours in 2010 and 872 hours in 2012. However, the final figure is rather high compared to other regional countries. If this plan is put in place as of September 2014, it will help cut 290 out of 537 hours for tax declaration as calculated by the World Bank, he said. Accordingly, the MoF will revise criteria for VAT and corporate income tax declaration and encourage businesses to pay taxes online. The Ministry will also strive to reduce time for social insurance premium registration and payment by half from the current 335 hours per year by the end of 2014. Companies search for offices in Ha Noi The demand for rented office space in Hanoi increased sharply in the second quarter of this year, pointing to a gradual recovery of the domestic economy, said property experts. According to the Savills Vietnam's report on the Hanoi property market for the second quarter of this year, the total occupancy was approximately 77,000 square metres, increasing 14.2% quarter-on-quarter (QoQ). The demand in the secondary areas increased significantly by 175% QoQ due to the entry of two new projects: Gelex Tower and Coalimex Building, it said. There was also significant improvement in Thanh Xuan and Dong Da districts, which were up 25% to 35% QoQ this quarter. "Approximately half of the enquiries received at Savills were for office spaces in the central business districts, which were double the enquiries for the western and secondary areas," said Savills Vietnam. "For large office spaces of over 500 square metres, 42% of the enquiries were for the western area," they said. "Affordable rents and attractive incentives from land-lords motivated commercial tenants to move from villa-type offices to professionally managed office buildings," said the CBRE Vietnam. According to CBRE Vietnam, average rents continued to decrease across the market, achieving US$21.8 per square metre per month. Grade A average asking rents decreased by 3.2% q-o-q, while Grade B rents recorded a slight decrease of 0.4% q-o-q. On a year-on-year (y-o-y) basis, Grade B reported better performance with a slight 1.6% increase. Grade A, on the other hand, recorded a dr-op of 6.2% over the same period. Average asking rents stood at US$30.4 per square metres per month for Grade A buildings, and US$18.4 per square metres per month for Grade B buildings. Savills Vietnam said, in the second half of 2014, 85,000 square metres from five projects in the secondary area are expected to be online. The largest project will be Lotte Center Hanoi, with approximately 45,000 square metres of space. Up to 2016, 27 projects with more than 500,000 square metres at 36% of the total current stock will enter the market. All are under construction or being furnished. However, five projects supplying over 60,000 square metres have been delayed for several quarters. Meanwhile, CBRE Vietnam said that moving forward, projects in the west will be under further pressure to slash rents as there will be enough properties in the market. The average rents are expected to go down while the vacancy rate will rise. "Grade A buildings in the city centre will achieve higher occupancy rates as tenants have limited options in this segment. However, to compete with new entrants the older properties will need to renovate and upgrade," said CBRE Vietnam. First Tra fish farmers receive GLOBALGAP certificate Four members of a cooperative group in the Mekong Delta province of Tra Vinh have become the first Tra fish farmers in Vietnam to receive the GLOBALGAP certificate. Headed by Giang Van Bay from Tan Hoa commune, Tieu Can district, the four farmers are raising Tra fish in 1.2 hectare of water surface. The group is among beneficiaries of a sustainable Tra fish supply chain programme implemented in the Mekong Delta provinces of Tien Giang, Dong Thap, and Tra Vinh, with funding from European GLOBALGAP organization, the World Wide Fund for Nature (WWF), GIZ of Germany, IDH of Holland and Anova Seafood of Holland. This programme aims at equipping local fish farmers and feed makers with knowledge and practical skills to produce products meeting international requirements. In Tra Vinh, 16 households received assistance from the programme from March 2011 to January 2014, with total funding reaching VND1.9 billion. A total of 110 households and 7 companies engage in Tra fish farming in the province, producing from 25,000 to 30,000 tonnes of Tra fish per year. The certified cooperative group will be a good model for others to follow, enhancing competitiveness of the local products in the global market. Australian seafood businesses explore VN market A delegation of leading representatives from the Australian seafood industry has toured the Mekong Delta region from August 3-10 to learn more about aquaculture cooperation and investment opportunities in Vietnam. The tour is part of a major trade promotion programme aimed at bolstering cooperative relations in the seafood sector and boosting sales of Vietnamese seafood products in Australia through an improved marketing and advertising campaign. After visiting aquaculture farms, fish processing factories of seafood processors  in An Giang, Can Tho and Nha Trang delegation members said they were generally impressed by the high quality food safety and hygienic standards in place at the firms. At the Vietnam Fisheries International exhibition (Vietfish 2014) in HCM City, the delegation worked with Deputy Minister of Industry and Trade Tran Tuan Anh examining ways to remove trade barriers and bolster trade. They specifically discussed establishing an inspection department for seafood products to facilitate the sale of Vietnamese seafood in the Australian market. At a meeting with Vietnam Association of Seafood Exporters and Producers (VASEP), both sides agreed to devise a joint action plan to promote Vietnamese high quality seafood products in Australia. They agreed the 2015 action plan should be signed on the sidelines of the global outlook for aquaculture leadership (GOAL) conference to be held in HCM city this October. In 2013, Australian imports of Vietnamese seafood reached a record high of US$1.46 billion. Vietnam is the third largest seafood provider for Australia (after New Zealand and China), comprising an 11% market share. Russia opens door to Vietnamese seafood Russia’s Veterinary and Phytosanitary Surveillance Service (VPSS) has lifted a temporary ban on seafood imports from seven Vietnamese businesses into the Russian market, according to the National Agro-Forestry-Fisheries Quality Assurance Department (NAFIQAD). The seven enterprises are Hung Vuong-Vinh Long Co, Ltd, Hung Vuong Joint Stock Company, Hung Ca Co, Ltd, Minh Phu Seafood Joint Stock Company, Ba Lai Seafood Processing Factory, Hiep Thanh Seafood Processing Company, and Minh Quy Seafood Processing Co, Ltd. NAFIQAD noted the Russian side warned it had recently discovered antibiotics namely Oxytetracyline and malachite Green/Leuco Malachite Green in some Vietnamese seafood products, which are not permitted under Russian regulations. India garment makers eye Vietnam market India, the world’s second largest producer of input materials for the garment industry, is seeking expanded opportunities for cooperation with Vietnam, a trade exchange heard in HCM City on August 8. Indian garment businesses said bilateral cooperation in the garment industry has yet to live up to their expectations and they hoped to become a long-term, potential partner for Vietnamese businesses by increasing mutually cooperation and reducing input costs. Manikam Ramaswami, Chairman of the Cotton Textiles Promotion Council of India (TEXPROCL), said Vietnam’s cotton imports from India accounted for only a modest 1.6% share of the Indian market worldwide in 2013 and, accordingly, there is substantial opportunity for expansive growth. Both Vietnam and India have potential for stronger cooperation in garments and textiles, said Ramaswami, explaining that Vietnam has a high demand for material imports while India offers these materials at highly competitive prices globally. The fact is that the Vietnamese garment sector has achieved rapid growth in recent years with improved designs and quality, receiving great attention from foreign investors. In addition, the government is speeding up free trade agreement (FTA) negotiations, creating plenty of opportunity for the garment industry to grow and flourish. Currently Vietnam is accelerating administrative reforms to meet the country’s international integration requirements, creating a transparent, healthy environment for trade and investment activities of domestic and foreign businesses. Bui Thanh An, deputy director of the Vietnam trade promotion agency (Vietrade), in turn said that Vietnam has signed several trade and investment agreements with India, facilitating increased cooperation with India businesses. The exchange served as an important bridge connecting the Vietnamese and Indian business communities to strengthen cooperation, An said. US ready to work with Vietnam to complete TPP The US, as a comprehensive partner of Vietnam, is ready to work with Vietnam to complete the Trans-Pacific Partnership (TPP) agreement, Senator Sheldon Whitehouse told the media in Hanoi on August 8. Senator Whitehouse, who together with Senator John McCain is paying a visit to Vietnam, said as the agreement sets very high standards, the US is ready to help Vietnam meet standards in order to be recognised as a market economy. He also said during the visit, the two sides have expressed wish to strengthen ties in security, economic growth and environmental protection. Senator McCain said the visit took place at a time when the two countries prepare to mark the 20th anniversary of normalization of bilateral ties in 2015. He expressed joy at the progress in bilateral ties, adding that the two countries have much to do as comprehensive partners. The two senators also took the occasion to share their view on the proposal of lifting the ban on lethal weapon sales to Vietnam. GMS gives fresh impetus to economic development The Greater Mekong Sub-region (GMS) Fifth Economic Corridor Forum opened in Hanoi on August 8 to review the region’s achievements during the past six years and cross-border transport and trade facilitation initiatives. Addressing the forum, Vietnamese Deputy Minister of Planning and Investment, Nguyen Chi Dung emphasised that the development of economic corridors is a complicated and time-consuming process. “However, we believe this is an effective tool for achieving the GMS’s 3C – enhancing ’connectivity’, increasing ’competitiveness’ and achieving a greater sense of ’community’”, said Dung. With the support of the Asian Development Bank (ADB) and development partners, GMS programme and the development of economic corridors will help six GMS nations (Cambodia, China, Laos, Myanmar, Thailand and Vietnam) overcome difficulties to fully tap their potential for equitable and sustainable development in the region. Bindu Lohani, ADB Vice President in charge of finance and administration, suggested that the region develop infrastructure to strengthen connectivity, especially transport links in order to increase trade exchange, investment, industrial growth as well as generating jobs and incomes. Lao Deputy Minister of Planning and Investment Somchith Inthamith spoke of Laos’ great efforts to develop the regional economy and vowed to share experience with other GMS nations in improving local people’s living conditions and developing small and medium enterprises. Chinese ambassador to Vietnam Hong Xiaoyong recommended that ADB improve its leading role at the forum, affirming that the Chinese Government and businesses have benefited tremendously from the GMS region by participating in economic corridors. Sok Chenda Sophea, Secretary General of the Council for the Development of Cambodia (CDC), stressed that these economic corridors have helped Cambodia develop its economy robustly. However, he stressed it is imperative to enhance cooperation with neighbouring nations to develop sustainably and harmoniously. Delegates also discussed orientations to increase cooperation and integration through sharing experiences, promoting the engagement of the private sector in the region, and highlighting the role of special economic zones and industrial park complexes for the development of economic corridors in the coming time. Vietnamese tuna auctioned in Japan The first batch of tuna from Binh Dinh province processed utilizing modernised technology and the composite boats provided by Japanese Yanmar Company was put up for auction in Japan on August 8. Two days ago, Japanese tuna experts examined the quality of 37 first tuna caught near Vietnam’s Truong Sa (Spratly) archipelago using the latest technology and equipment. The examination showed that 9 tuna, weighing 448 kg in total, met the quality standard for export. The qualified tuna were then sent directly to Japan for the August 8 auction. All Vietnamese tuna at the Osaka auction centre were purchased at differing prices, ranging from VND50,000/kg (250 JPY/kg) to VND420,000/kg (2,100 JPY/kg). Japanese experts say Vietnamese fishermen need to apply the latest post-harvest technology to ensure their tuna sell well in Japan. Korea-Vietnam Incubator Park to open in June 2015 The Korea-Vietnam Incubator Park (KVIP) is currently 32% complete and is slated for operations in early June 2015, announced Director of Can Tho Department of Industry and Trade, Nguyen Minh Toai at a meeting on August 8. From now till the first quarter of 2015, Toai said a number of events are scheduled to take place including staff training classes, establishment of a 12 member-council to oversee operations of the park and the installation of state-of-the-art machinery and equipment. At the meeting, KVIP General Director Kim Hee Sup said the park will help build industrial clusters specializing in rice, seafood, and agricultural mechanics, aiming to improve the competitiveness of Mekong Delta rice globally and attract more businesses to rice processing, and develop markets for highly competitive seafood. In addition, the KVIP targets developing the agro-machinery sector by producing Made-in-Vietnam products with a localization rate of 95% within the next ten years, and building a support mechanism for businesses to produce machinery in the Mekong Delta. According to the Can Tho Department of Industry and Trade, the KVIP has total investment capital of over US$21 million with US$17.7 million sourced from the RoK and the remainder from the Vietnamese Government. Government bonds fetch VND6 trillion A total of VND6 trillion (US$282 million) in Government bonds was mobilised to the State Treasury through a tender organised by the Hanoi Stock Exchange (HNX) on August 7. The bonds on offer are worth VND6 trillion in total, including those of five- and ten-year terms. The money mobilised includes VND3 trillion (US$141 million) in five-year bonds and another VND3 trillion in ten-year bonds with annual interest rates of 6.4 percent and 8 percent, respectively. In March, the State Treasury also mobilised over VND6 trillion (US$282 million) in three-, five- and ten-year bonds via a tender. Demark helps develop private businesses The Danish embassy on August 8 introduced two programmes on Vietnam-Denmark business cooperation and financial support for private businesses in Vietnam.   Christian Brix Moller, First Secretary of the Danish Embassy, told delegates in Danang that although Vietnam has achieved high economic growth in recent years, it could benefit tremendously from Danish support to fully tap its potential and develop sustainably. The business cooperation programme will help Vietnam meet this target by transferring green technology, generating well-paid jobs, and improving the environment, Moller said. The programme is designed to assist the establishment of trade partners between Vietnamese and Danish businesses. Since 1997, Denmark has provided over US$74 million for 300 projects and over 150 long-term partners in Vietnam. Meanwhile, the financial support programme has offered non-interest or low rate loans to purchase equipment and services for development projects. To date it has earmarked more than US$100 million for 10 projects in Vietnam. The seminar was co-organised by the Vietnam Chamber of Commerce and Industry – Danang branch, the Danish Embassy and Danang Investment Promotion Centre (IPC). Instant Vietnamese Pho noodles debut in Japan Japanese instant noodle maker, Acecook, recently announced it is launching Vietnamese “Instant Pho”(rice noodle soup) in the Japanese domestic market. The instant noodles are produced in Vietnam and this marks the first time Acecook has used products from an overseas plant to sell in Japan. The instant Pho were modified to produce a taste preferred by Japanese consumers. Acecook aims to sell 7 million products per year in the Japanese market. Fuel firms make profit despite price cut Local fuel trading firms earn at least VND600 from every liter of gasoline they sell despite a price cut of VND330 per liter in the middle of last week. According to the Vietnam Petroleum Association, the base price of RON 92 gasoline has dropped significantly since July 14. The price stood at VND25,330 per liter on August 5, down nearly VND1,000 a liter compared to July 14. The average 30-day price in Singapore fell to US$117.92 per barrel on August 5 from US$123.03 on July 14. The current RON 92 gasoline price of VND25,310 per liter is lower than the base price by VND20 per liter. The base price is calculated by the world’s average 30-day price plus tax and cost. However, thanks to a deduction of VND600 per liter from the national fuel price stabilization fund, traders still pocket VND580 per liter, not to mention a fixed profit of VND300 a liter factored into the base price. If this sum is included, they can earn up to VND880 from each liter of gasoline sold. According to a notice of the ministries of Finance and Industry and Trade, before the fuel price reduction on July 28, traders obtained VND395 per liter of petrol. The world’s 30-day average price used to calculate the local base price continued to drop to US$121.4 from US$123.03 a barrel from July 14 to 24. Fuel retail prices are revised every 10 days following the world’s 30-day average price. Therefore, domestic prices do not follow global market movements immediately. Citi Vietnam named Best Corporate/Institutional Internet Bank for the third year Citi Vietnam has been recognised as “Best Corporate/Institutional Internet Bank in Vietnam by Global Finance magazine’s 2014 World’s Best Internet Banks competition, for the third consecutive year. The bank has won this award on the merit of first-class electronic banking solutions that are simpler and more accessible, and giving clients greater visibility and enhanced decision making abilities anytime and anywhere. “Internet banking has revolutionised how most businesses operate in Vietnam, and third consecutive Best Corporate/ Institutional Internet Bank award signifies our stronghold in this essential segment,” said Dennis Hussey, managing director and Citi country officer for Vietnam. He said the award was an excellent recognition of the Citi’s commitment to be the leading digital bank and its dedication to deliver world-class technology to corporate and institutional clients in the country. Winners for the Global Finance awards were chosen among entries evaluated by a world-class panel of judges at Infosys, a global leader in consulting, technology and outsourcing. In addition to Vietnam, Citi swept another 13 country awards in “Best Corporate/Institutional Internet Banks”, including Australia, Bangladesh, Hong Kong, India, Indonesia, New Zealand, Philippines, South Korea, Sri Lanka, Taiwan and Thailand, as well as the “Best Investment Management Services” and “Best in Mobile Banking” in the regional sub-categories. Coupled with that, Citi won country awards in the “Best Consumer Internet Banks” category in Australia, China, India and Thailand, and regional sub-category awards in “Best Web Site Design” and “Best SMS/Text Banking”. “Consumer preferences are changing, and a generational shift in behavior is driving consumers to new digital channels. These awards pay tribute to the role that technology and digitisation are playing in transforming the way in which we serve our clients,” said Jonathan Larsen, Citi’s head of consumer banking in Asia Pacific. Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. The bank has seen strong growth in digital banking usage in Asia across its institutional and retail banking platforms. In April this year, Citi passed the seven million mark for clients in Asia that are signed up for digital banking services for their retail banking needs including online, mobile phones and other digital channels. These banking services include Citi’s award winning mobile and internet banking applications across the 14 markets in which the bank has consumer operations in Asia. In institutional banking, more than 16,000 corporate clients use Citi’s e-solutions in Asia. Last year, Citi processed 107 million transactions with a value of $6.4 trillion, including over $36 billion in payments via its’ CitiDirect BE Mobile banking platform and over $175 million via the CitiDirect BE Tablet banking platform since its launch in November 2013. The Costa Nha Trang launches new sale The Costa Nha Trang – the first five star apartment for sale project on in Nha Trang has recently launched its sale of the last units. The Costa Executive Residences is now offering units located from 18th to 29th storey. Customers can be handed over the apartment right after they pay 50 per cent of the total value. The rest will be paid in five months without any interest. Apart from that, customers will also be one year exempted from management fees. For customers who had paid 100 per cent of total value, the project developer – TD Joint Stock Company supports four per cent of interest rate from the bank in the first year. Moreover, the apartment is ensured to be re-leased with the benefit of eight per cent in the first two years. Ideally located on the "golden street" Tran Phu, the Costa Nha Trang comprises luxury residences and an international 5 - star hotel managed by InterContinental Hotels Group with 308 rooms as well as a wide range of luxury facilities and services for a full life. The residences are divided into The Costa Nha Trang Residences and The Costa Nha Trang Executive Residences. The Costa Nha Trang Residences with 169 units are from the 4th to 17th floor, consisting of studio (58 – 70 m2), 1 to 4 bedroom apartments (92 – 362 m2) equipped with international quality of living. Meanwhile the Costa Nha Trang Executive Residences are ideally arranged from 18th to 29th floor of the building with amazing view to Nha Trang Bay. 75 villas range from 2 – 4 bedroom apartments (143 – 362 m2), sky villas (139 – 361 m2) and penthouse (515 – 582 m2). According to Truong An Duong, associate director of advisory and residential services of Savills Vietnam – the sale and marketing agent of The Costa Nha Trang, Nha Trang has developed a diversified and smooth traffic system, amongst the Cam Ranh International Airport with nearly 20 domestic flights and 12 straight flights to Russia and Korea everyday. “With advantages of location, landscape and climate, the coastal city has been at the top of Khanh Hoa province’s tourism revenue. This is a good point for developing as well as distributing holiday home properties in this potential market,” Duong said. Saigon Co.op among top 500 Asia-Pacific retailers in 2014 Sai Gon Union of Trading Co-operatives (Saigon Co-op Mart) has been selected as one of the top 500 Asia-Pacific retailers in 2014, by the Singapore-based Retail Asia magazine and Euromonitor International. Established in 1996, Saigon Co.op, is owner of the Co.opmart supermarket chain, Co.op food store chain, Co.opXtra, Sense City commercial center, TV shopping channel HTV Co.op. The cooperative will target to attract 250,000 members, diversify its 300 retail stores, reach total revenue of VND44 trillion, and give 1,200 new jobs in this year. On this occasion, Saigon Co.op will offer 120,000 gift vouchers worth VND30,000 each. For every bill worth VND500,000 and over, customers will receive a voucher on August 8,9,10. Real estate association against looser foreign property ownership rules The head of the HCMC Real Estate Association said authorities should not allow foreigners to buy homes in Vietnam even though the Ministry of Construction has been considering looser restrictions. Le Hoang Chau, chairman of the HCMC Real Estate Association, confirmed the association's stand. According to Chau, many countries only allow foreigners to buy apartments in specific locations during the first stages of opening their markets. "For the first five years, Singapore allowed foreigners to buy only apartments. The ban was gradually lifted over the next five years, but buyers still have to pay higher taxes. We shouldn't allow foreigners buy villas and houses yet while external security threats to Vietnam still exist. This would make the situation difficult to control in the future," he said. Overseas Vietnamese and other foreign passport holders will be permitted to own apartments for a maximum period of 50 years. The Ministry of Construction proposed allowing foreigners buy more types of housing in order to relieve the real estate market slump. Minister of Planning and Investment Bui Quang Vinh said that investment in the housing market by foreigners could provide a huge boost to the sector. "The maximum term of ownership for residential property will still range from 50 to 70 years. A lot of people will buy homes if we open this market. We have about 130,000 South Koreans renting apartments in Vietnam because they can't buy houses. Those renters may try to find ways to evade taxes such as claiming lesser rental fees," he said. Prime Minister Nguyen Tan Dung also gave his support to the proposal. Vietnam proposes Mekong economic corridors’ link expansion Deputy Prime Minister and Foreign Minister Pham Binh Minh has proposed that current economic corridors in the Mekong subregion should expand their links with other Asian regions via a multi-mode transportation model regarding the subregion’s important role in economic connectivity and integration. Minh delivered the idea when speaking at the seventh Mekong-Japan Foreign Ministers’ Meeting held on August 10 in Myanmar’s capital Nay Pyi Taw on the sidelines of the 47th ASEAN Foreign Ministers’ Meeting. He also suggested speeding up agriculture and tourism connectivity and collaboration between localities and enterprises of the Mekong states and Japan , including a partnership between Vietnam ’s Mekong Delta region and Japanese localities, which were hailed and put in the Statement of the Chair at the event. Minh expressed hope for more multinational cooperation projects carrying clear hallmark of the Mekong-Japan partnership to be developed in the time to come. Vietnam will continue work closely with other Mekong states and Japan to successfully implement the Tokyo Strategy 2012 on the Mekong-Japan cooperation, he pledged. Chaired by Japanese Foreign Minister Fumio Kishida, the meeting reviewed the implementation of a plan of actions to realise the Tokyo Strategy 2012 and measures to boost cooperation in all three pillars, including connectivity and narrowing development gap, sustainable development together, and environmental protection and social welfares. The ministers spoke highly of Japan’s effective support for the Mekong region in infrastructure development, creating favourable conditions for trade and investment as well as environmental preservation and human resource training. They also agreed on specific measure to step up the execution of the Tokyo Strategy 2012 and the plan of actions for “A Decade towards Green Mekong” initiative. The meeting issued a joint statement recognising efforts of the Vietnamese and Lao Governments in conducting the one-stop-shop model at Lao Bao-Densavan border gate on the East-West Economic Corridor. The Japanese foreign minister and his counterparts from Cambodia, Laos, Myanmar, Thailand, and Vietnam also agreed to organise their eighth meeting in Malaysia in 2015 on the fringes of the 48 th ASEAN Foreign Ministers’ Meeting. Vietnam, Western Australia tap cooperation potential Vietnam and Western Australia have great potential for strengthening bilateral cooperation in economics, trade and investment, Ambassador Luong Thanh Nghi was told in his recent meetings with top officials of the Australian state. During his visit to Western Australia on August 5-6, Ambassador to Australia Luong Thanh Nghi met with Acting Governor Wayne Martin, Deputy Premier Kim Hames, the Mayor of Perth city, and representatives of local businesses. Vietnam is the 16th largest trade partner of the state of Western Australia, with two-way trade last year hitting 906 million AUD (846.7 million USD), of which 634 million AUD (592.5 million USD) came from Vietnamese exporters. The Australian state is willing to create all favourable conditions for Vietnamese businesses to make inroads in the market, especially investment in mining and petrochemical industries. Ambassador Nghi said he hopes the state will support Vietnam’s participation at an agriculture fair in October 2015, the possible opening of an air route between Perth and Ho Chi Minh City by Vietnam Airlines and the establishment of its representative office in Vietnam . Nghi also asked the state of Western Australia to give more support for Vietnamese community to integrate further into the host country. Western Australia accounts for 30 percent of Australia’s total area and with a population of over 2.5 million. It is rich in natural resources, specifically iron ore, and oil and gas. About 15,000 Vietnamese expatriates are living in the state, including 1,700 students pursuing higher education there. Domestic demand for wooden floors rises Wooden floors, typically used in villas or high-end housing, are becoming more popular in residential and commercial housing in Vietnam. Market analysts attributed the increased demand to higher incomes and a rising standard of living among the Vietnamese, who want to beautify their homes and enhance their value. Apart from their attractive colours, flooring made of wood, in contrast to other materials, can evoke warmth in winter and coolness in summer. The wood-floor market is divided into two segments, solid-wood floors (made of planks milled from a single piece of timber) and engineered wood floors (made of planks composed of two or more layers of wood), according to Nguyen Manh Dung of the Department of Process and Trade for Agro-Forestry-Fisheries. Natural solid hardwood floors are preferred for personal homes because of their beauty, homogeneous structure, hardness, mild aroma and ease of installation. However, prices are between 350,000 VND and 600,000 VND per sq metre, he said. On the other hand, engineered wood floors are durable and structurally strong. Unlike solid wood floors that can shrink and expand when the room temperature changes, engineered wood floors are not prone to the same problems. This makes them suitable for offices where heating might be installed under floors. In addition, their prices are lower, about 200,000 VND to 300,000 VND per sq metre, Dung said. According to Nguyen Ton Quyen, General Secretary of Vietnam Timber and Forest Products Association, said that the engineered wood-floor market has a wide range of products, with about 50 trademarks. Of those, 20 are from Europe and Asia, such as Classen, Witex, Kronotex of Germany, Pergo of Switzerland and Malaysia, Alsapan of France and Gago of the Republic of Korea. However, up to 80 percent of the foreign engineered-wood flooring originates from China. "Because the domestic wood-floor market has become profitable, many foreign and domestic enterprises want to invest in this industry, so dozens of factories have been built in Hanoi, Hai Phong and Ho Chi Minh City's neighbouring provinces," Quyen added. Truong Dinh Loi, director of the Long Binh Timber Company in the Dong Nai province, said that hundreds of companies in the province were producing wood products but few of them made wood floors. The high level of investment needed to purchase technology and production chains has prevented small- and medium-sized companies from engaging in the business. "Wood floors have only been used by local people in recent years, and the market is already flooded with foreign products at various prices, so Vietnamese enterprises find it very difficult to get a foothold in the industry here," Cao Binh, director of the Cao Binh Wood Company in Dong Nai province, said. Binh also said that most machinery and materials needed for wood floors had to be imported, and transport fees had continued to rise as well. Many businesses would like to invest in making wood floors, but they are afraid of incurring losses. Pham Thanh Thuy, director of a wood company in HCM City's Binh Chanh district, said: "The market has huge potential but local businesses have been unable to grasp this opportunity to develop." Industry-trade sector strives to realise yearly plans Positive changes recorded in industrial production in the first seven months of 2014 helped fuel the growth of export, and relevant agencies are set to employ various measures for the activities soon to reach yearly goals. Nguyen Tien Vy, Director General of the Ministry of Industry and Trade’s Planning Department, said the index of industrial production (IIP) in July picked up 0.2 percent from June and 7.5 percent from a year before. Particularly, the value of the processing and manufacturing industries climbed by 10.3 percent annually, he added, noting that the production of fibre and apparel surged by 23.3 percent and 12 percent year on year, respectively. Meanwhile, July export turnover also witnessed a 0.2 percent increase from June to 12.4 billion USD and a 7.7 percent rise from the same period last year. About 2.1 billion USD of that sum came from the shipment of textile and garments, rising by 11.1 percent from June and 17.4 percent yearly. In the seven-month period, Vietnam fetched 83.5 billion USD from exports, up 14.1 percent annually. However, Deputy Minister of Industry and Trade Tran Tuan Anh said lower prices and output of many key farm produce such as rice, coffee beans, rubber and cassava resulted in a drop in their overseas shipment. Vietnam sold 3.9 million tonnes of rice in the seven months, from which it earned 1.7 billion USD, down 8 percent and 4.7 percent respectively. Meanwhile, the volume and value of export cassava also experienced respective 5.9 percent and 6.7 percent decreases to stand at 2 million tonnes and 650 million USD, he noted. Anh pointed to outdated cultivation techniques, mismanagement, and a lack of cohesive coordination in the goods supply chain from farmers, businesses to banks. Such shortcomings have made Vietnam fail to turn out high quality products to meet the global demand. The ministry targets an export turnover of 146 billion USD, jumping by 10.6 percent from last year, and a trade surplus of 500 million USD in 2014. To that end, it will carry out an array of measures right from August to facilitate industrial production and export, reduce unsold inventory, and closely monitor import, Minister Vu Huy Hoang said. He added negotiations of free trade agreements are being hastened so as to make use of tax and export incentives in both traditional and new markets as soon as possible. At the same time, the ministry will work with the Ministry of Agriculture and Rural Development to restructure the agro-forestry-fishery sector and connect farmers and businesses in order to ensure stable material supply and improve export values. Hoang said more policies favouring the selling of commodities traded in large volumes such as rice, aquatic products, coffee beans, peppers and cashew nuts are being built. Meanwhile, the ministry is also striving to better forecast market fluctuations and update manufacturers and exporters about trade barriers to smooth the way for their activities, the official noted. HCM City makes restructuring progress Ho Chi Minh City has achieved success in implementing a project to restructure its economy, including public investment, State-owned enterprises and the banking system in the 2011-14 period, heard a meeting held last week in the city. From 2011-14, public investment in the city remained stable. Total state investment accounted for 24.3 percent of the city's total investment in 2011. It fell to 21.8 percent in 2012 and 20.9 percent last year. On average, total state investment accounted for 22.3 percent of the city's total investment, according to figures from the city's Department of Planning and Investment. Meanwhile, total investment from non-state sectors rose from 59.9 percent to 62.7 percent of the city's total investment last year. Foreign direct investment went up slightly from 15.5 percent in 2011 to 16.1 percent last year. In addition, the city has created the most favourable conditions and incentives for the private sector to develop infrastructure and other potential industries, products and services. The city has also achieved positive results in restructuring the banking system, including all 14 joint-stock commercial banks in the city. The State Bank of Vietnam Governor has approved the restructuring plans of 11 commercial banks, and is considering the plans of the remaining three commercial banks. The city targets that by 2015 there will be no weak commercial banks, and commercial banks will be established at the regional level. As for the restructuring of State-owned enterprises, the city has a total of 108 State-owned enterprises, of which 15 businesses are under the process of merging, closing or bankruptcy, and will be sold to other organisations. The city has approved a plan to equitise 14 corporations. Cao Sy Kiem, member of the National Assembly Economic Committee, said HCM City achieved positive results in restructuring the economy, which can be seen as a model for other localities to follow. For example, the city attracted more investment from the private sector and reduced its reliance on funds from the State budget. It also established a modern administration management system for enterprises, he said. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR