BUSINESS IN BRIEF 31/10 HSBC appoints new COO Karine Colyn has joined HSBC Vietnam Bank as chief operating officer (COO) this month. Karine has more than 15 years of experience in banking with specific focus on operational management, business transformation and project management. She held senior positions at ABN AMRO Bank in the Netherlands, India and Hong Kong before joining HSBC in 2009. At HSBC, she was responsible for human resources service delivery and led a team of around 400 employees across eight countries in Asia Pacific. She designed and implemented a set of fit-for-purpose processes and systems delivering significant efficiencies and increased customer satisfaction. Karine used to be in charge of retail banking & wealth management (RBWM) and heading up the middle office for the contact center for Asia Pacific. In this role she was managing a team of 180 employees across 12 countries to support around 5,500 call center agents. The holder of Bachelor degree in Economics (the Pitzemburg College in Mechelen, Belgium) was also the interim group head of contact centers for most of 2013 when she delivered the medium term outlook for group contact center. Transimex-Saigon invests in bonded warehouse in SHTP Transforwarding Warehousing Joint-Stock Corp., or Transimex-Saigon, has been licensed to implement a bonded warehouse and logistics service project at Saigon Hi-Tech Park (SHTP) in HCMC. The VND300-billion project will be invested by Transimex Hi-Tech Logistics One Member Limited, a branch of Transimex-Saigon, and will operate as an inland clearance depot. The project consists of a bonded warehouse, container-freight station and cold storage among others. The investor plans to start work on the project later this year and complete it after one year of construction. The facility will be installed with six-to seven-storey racks, surveillance camera system, Japanese management software and equipment to facilitate storage of electronics and other hi-tech products for enterprises active in SHTP. With the project, Transimex-Saigon has become the first domestic firm to get approval for investment in logistics services at the hi-tech park in District 9. The project is the second logistics project in the hi-tech park after the bonded warehouse project worth US$7 million invested by Japan-based group Ryobi Holdings. The Japanese firm got a license for its project early this month. So far, foreign and domestic companies have invested in 67 projects at SHTP with combined registered capital of more than US$4 billion. Of which, foreign investors have pledged US$3.28 billion for 32 projects in the park. Ocean Hospitality states no affection from the arrestment of chairman Ha Van Tham Ocean Hospitality & Service JSC yesterday announced the arrestment of Ocean Bank former chairman Ha Van Tham - who was also chairman of the company - will not affect its business. Ocean Hospitality & Service, a wholly-owned subsidiary of Ocean Group, announced that its board of management had agreed to assign Huynh Trung Nam – a member of the Board of Management – to temporarily assume the duties of Ocean Hospitality’s chairman during his absence from October 25, 2014. “This personal misconduct does not affect to the transparent, open and lawful occurring activities of Ocean Hospitality. Nam will temporarily handle duties of the chairman of Ocean Hospitality together with the company’s Board of Management and Board of Directors,” said Sven Albert Saebel, chief executive officer of Ocean Hospitality. “Ocean Hospitality is putting great priority into the interests of our customers and to continue OCH’s further development. Our newest member to our StarCity hotel chain, StarCity Condotel Nha Trang & Spa will be expected to receive our first guests by late quarter this year and Ocean Hospitality has also commenced the development of Vietnam’s first Airport Hotel -  StarCity Airport Hotel in Sai Gon,” said  Nam. Ha Van Tham, 42 years old, was arrested on October 24 2014 because of his legal violations at Ocean Bank where he was chairman of management board. Tham is also chairman of Ocean Group and Ocean Hospitality & Service. Being a member of Ocean Group, Ocean Hospitality & Service invests in hotel operations, real estate business, property management, media and related services. The company has developed two famous hotel brands including four-star StarCity Hotel and five-star Sunrise Resort. In 2013, Ocean Hospitality & Service increased its charter capital from VND1 trillion (about $47 million) to VND2 trillion (about $94 million) for deploying project implementation. The total consolidated revenue of the company last year increased 25 per cent compared to 2012. Meanwhile the profit before tax increased 46.7 per cent compared to 2012. Lazada expands footprint in Vietnam Lazada Vietnam, a member of the region’s top online retail firm Lazada, is seeking to expand its e-commerce services by setting up a new office and warehouse in Hanoi. Lazada’s Hanoi office, which is staffed by more than 50 employees, will aim to serve millions of online customers as well as providing its platform services to Hanoi merchants by the end of this year. Lazada’s presence in Hanoi will bring greater benefits to customers including larger assortment, quicker, safer and cheaper delivery, and cheaper price, while making sure that Hanoi merchants have greater accessibility to Lazada platform with end-to-end support system. The new opening brings greater credibility and exposure of Lazada brand to Hanoians in particular and northern consumers in general. Lazada aims at addressing new market opportunities by fostering and growing partnerships base with Hanoian sellers, understand and adapt to regional market specificity, and ensure best and unified customer experience across the country. “The fast-growing e-commerce market in Vietnam over the past time has been the result of the complete internet infrastructure and the increasing members of tablet computers and smartphone users at home,” Alexandre Dardy, CEO of Lazada Vietnam told VIR. In addition to reducing shipping costs, the new office in Hanoi now allows customers to also choose “Self Pickup at Lazada’s Office” service, when they order products distributed directly by Lazada. Customers choosing this option will have no, or a reduced bulky fee applied as they pick up the order themselves. Besides, the “Express Delivery” service will also be available to customers in Hanoi by the end of this year, thanks to which, they will receive their goods within the day they order or by the next working day, depending on their order time and delivery address for a fee of just VND10,000. Dardy said that together with the firm’s expanded operations, Lazada Vietnam would continue to provide further innovative solutions to cement its status at the forefront of Vietnam’s e-commerce industry, following almost three years of operations in Vietnam. According to the Ministry of Industry and Trade (MoIT)’s E-commerce and Information Technology Agency, Vietnam’s e-commerce transactions grew 300 per cent on-year last year to reach $2.2 billion and it is predicted to reach $4 billion in 2015. Lazada, which was founded by Rocket Internet, a group specialising in investing in internet services in Germany, has been present in Indonesia, Malaysia, the Philippines, Thailand and Vietnam. This is an e-commerce service tailoring the shopping needs of customers with 300,000 products from more than 1,000 brands. It is the only international brand among the Top 5 retail websites in Vietnam, with more than 1.5 million visits per day. GE’s hi-tech supports Vietnam’s burgeoning aviation industry The world’s largest producer of jet engines, GE Aviation, is fostering a strong alliance with Vietnam Airlines and VietJet Air. Its involvement in the sector is expected to continue to grow due to the rapid expansion of Vietnam’s aviation market.  Linh Mai reports. Starting from humble beginnings, Vietnam Airlines and VietJet Air are expanding their aircraft fleets and gaining valuable technical experience in operating the world’s most modern jet aircraft.  Along the journey, they are also bolstering their relationships with the US’ GE Aviation, the world’s largest producer of jet engines. Over the next several years, the GE jet engine fleet operating out of Vietnam is expected to more than double.  The strong alliance between GE Aviation and these growing airlines will contribute significantly to the nation’s goal to become one of the Pacific region’s leading business and tourist destinations. VietJet Air already operates 15 single-aisle Airbus A320 aircraft, powered by CFM56 engines produced by CFM International, a joint company of GE and Safran of France.  VietJet also has another 21 CFM-powered A320/A321 and 42 A320neo aircraft on order. The best-selling CFM56 engine is the propulsion workhorse of the airline industry, powering most single-aisle airplanes.  The teams are well-prepared to manage the airlines’ expanding CFM56 engine fleet.   Several years ago, Vietnam Airlines began leasing Boeing 777 aircraft powered by the GE90 engine, the world’s largest and most powerful jet engine. As Vietnam has become a popular air-travel destination, the 777 fleet has enabled Vietnam Airlines to successfully establish popular flights to Paris from Hanoi and Ho Chi Minh City. In 2015, Vietnam Airlines plans to take a bold step forward when it receives the first of its 19 Boeing 787-9 Dreamliner aircraft, powered by GE’s new GEnx jet engine. The GEnx, among the world’s most fuel efficient engines, is also the world’s only jet engine to feature a carbon fiber front fan system and other unique technology features. From the front to back, the GEnx is among the world’s most sophisticated jet engines on the all-electric powered 787 aircraft. As with the GE90 engine fleet, the new GEnx creates a significant learning opportunity for the Vietnam Airlines technical teams. GE Aviation will provide both the engines’ and the aircraft system’s common core computing system for Vietnam Airlines’ 787s, and soon, the airline technical teams will be trained on both. In addition, GE will conduct various simulated “stress tests” with the airline to ensure that the carrier’s personnel are adequately prepared to manage any operational challenges. “When an airline selects GE engines, it is like entering into a marriage because it is a very long-term relationship,” said Andrew Carlisle, GE’s regional general manager covering Vietnam. “There is considerable training and preparation of the airline crews on our complex equipment.  GE becomes aligned with the airline’s goals and aspirations. The relationship between GE and the air carriers of Vietnam is expanding quickly, and we are excited about our future together.” The relationship between GE and Vietnam’s airlines extends beyond training on the flight line. Leadership from both VietJet Air and Vietnam Airlines have attended classes at GE’s Global Customer Summits held in GE’s storied training centre in Crotonville, New York, near New York City.  In late September, GE vice chairman John Rice hosted an alumni dinner in Hanoi for past Vietnamese graduates of this programme including attendees from Vietnam Airlines and VietJet Air. “Modern air-travel systems are critical to economic growth,” said Carlisle.  “Vietnam is advancing quickly and the arrival of new jetliners will enhance an important in-country technical capability.  GE is thrilled to be part of this historic development. This is an exciting time to be part of aviation in Vietnam.” VinGroup to convert international bonds into shares Property developer VinGroup will issue an additional 153.3 million shares worth VND153.3 billion (US$7.3 million) to convert international bonds into shares in the last phase. Early this month, rating agency Fitch Ratings affirmed VinGroup long-term foreign and local currency issuer default ratings (IDR) at ‘B+' with a stable outlook. - VNS Photo According to its filing to the State Securities Commission and the HCM City Stock Exchange yesterday, the group's charter capital will increase from VND14.38 trillion (US$681.5 million) to VND14.53 trillion ($688.6 million). Selling pressure led by bondholders in the past month drove VinGroup's share price down nearly 8 per cent from VND52,000 ($2.46) per share to VND48,000 ($2.27). As of October 21, foreign investors sold out VinGroup shares for 19 sessions in a row with a total volume of up to 23.8 million shares, valued at VND1.122 trillion ($53.2 million). VinGroup shares continued to slide yesterday to close at VND48,000 per share with more than 2 million shares traded. The group is the largest listed real estate company in the stock market, with market capitalisation of nearly VND69 trillion ($3.27 billion) as of yesterday. Early this month, rating agency Fitch Ratings affirmed VinGroup long-term foreign and local currency issuer default ratings (IDR) at ‘B+' with a stable outlook. Fitch expects Viet Nam's improving economic conditions to accelerate property sales growth. Its new projects, Vinhomes Nguyen Chi Thanh and Vinhomes Tan Cang, will provide the majority of the funding needed for capital expenditure from the latter half of this year. Viglacera signs MoU with Cuban construction giant Construction material producer Viglacera Corporation has signed a memorandum of understanding with Cuba’s El Grupo Empresarial Industrial de la Construccion (Geicon) to set up a joint venture that will invest in two factories making bathroom fixtures and tiles in San Jose and Santa Cruz. Accordingly, Viglacera and Geicon are going to jointly invest in the two factories and Viglacera is sending specialists to work there. The two sides plan to complete administrative procedures for setting up the joint venture next year and plan to start operations in 2016. The Cuban market has a high demand for construction materials as the country is encouraging investment in housing and tourism infrastructure. Since early 2014 Viglacera has sent two groups of technology specialists to work with construction material factories in Cuba. According to Nguyen Anh Tuan, Viglacera’s general director, the company’s products are now present in many countries around the world and its co-operation with The Business Industrial Construction Group (GEICON) will help it deepen its presence in the Cuban market and consequently raise its export revenue. GEICON, under the Cuban Ministry of Construction, is comprised of 24 companies throughout the country with a combined workforce of 16,000 people and annual sales of more than 220 million pesos ($8.3 million). Viglacera, which focuses on producing and selling construction material and developing industrial parks, infrastructure and real estate, reported $25 million in export earnings in 2013 and plans to increase this figure to $31.5 million this year. Viglacera has set a pre-tax profit target of VND270 billion ($12.67 million) for 2014. Textile businesses investing in advance of TPP Leading textile and garment businesses have expanded production, invested into technology and ensured access to raw materials in their drive to further increase revenues in the coming time. In early 2014 leaders of state-owned Vietnam National Textile Garment Group (Vinatex) announced to the press that if the Trans-Pacific Partnership (TPP) agreement was signed, the domestic textile and garment sector could reach $25 billion in export revenue before 2020 and the localisation rate could be raised from the current 45 per cent to 70-75 per cent. Pham Xuan Trinh, general director of Ho Chi Minh City-based Phong Phu Corporation (PPC) has unveiled an ambitious plan for the company aimed at posting $1 billion in revenue between 2015 and 2020 from the company’s VND1 trillion ($47.6 million) total investment. For the period 2015-2016 the company envisages pumping capital into a modern spinning line that employs 20,000 spindles and has an estimated production capacity of 3,200 tonnes per year. During 2018-2019 it plans to build another 20,000 spindle plant that specialises in top-grade fabric production. This ambitious plan would bring the company’s network of modern spinning plants up to 10, reported VnExpress. This year the company expects to achieve VND7.3 trillion ($347 million) in revenue, of which domestic sales are planned to account for one-third, and VND320 billion ($15.2 million) in pre-tax profits, bringing it closer to its goal of a billion dollars over the next five years. Viet Tien Garment JSC, one of the top players in the sector, has set its revenue target for this year at VND5 trillion ($238 million). According to the company’s first-half financial statement, Viet Tien posted VND2.5 trillion ($117.4 million) in revenue for the period, up 7 per cent on-year and reaching 51 per cent of the full-year plan. Its post-tax profits hit VND141 billion ($6.7 million). Last year, the company reached VND4.8 trillion ($228 million) in revenue, up 24 per cent against 2012. Executives at the company said they have scaled up efforts to consolidate traditional export markets while also tapping new markets to effectively utilise trade pacts Vietnam has signed with other countries. Similarly, some other big players such as Nha Be, Garco 10 and Garmex Saigon have reportedly invested in market research, branding, technology, design and new products to boost domestic market share. Pham Xuan Hong, deputy chairman of the Vietnam Textile and Apparel Association (VITAS) said the prospect of Vietnam joining the TPP has provided an impetus for local firms to invest in improving their export status, particularly in terms of the US market. “By that time, the target of a billion dollars over five years will be easy for some of the sector’s biggest players,” Hong told VnExpress. Hong also suggested that local textile and garment firms increase co-operation, develop a closed process from fibre making and spinning to garment production, and gradually shift from export processing to more active models such as ODM (in-house design and production before selling) to develop more sustainably. Russian, Vietnamese firms enhance connectivity Representatives from many Russian businesses in the fields of electricity, construction, underground, chemistry and petrochemistry met Vietnamese partners in Hanoi on October 22 to seek cooperative opportunities. According to the Vietnam Chamber of Commerce and Industry (VCCI), two-way trade turnover hit nearly US$4 billion in 2013 and around US$1.52 billion in the first seven months of this year, accounting for just 0.5% of Russia’s total import-export value. However, Vietnamese hi-tech exports account for a small proportion. The free trade agreement (FTA) between Vietnam and the Customs Union (Russia, Belarus and Kazakhstan) is expected to make a breakthrough in bilateral economic relations with the aim to raise bilateral trade value to US$7 billion in 2015 and US$10 billion in 2020. To obtain the target, VCCI Secretary General Pham Thi Thu Hang said, support from the two States and Governments and efforts of businesses are needed. The meeting will help Vietnam access new technologies from Russia to speed up infrastructure development and improve the economy’s competitiveness. Meanwhile, manager of the “Russia-Vietnam: New Economies” project Strozaeva Lubov Viktorovna said strengthening bilateral cooperation, especially in economics, science and technology, will further deepen the strategic partnership for mutual benefit. We proposed Vietnam coordination to hold an international conference in 2015 on prospective cooperation with Russian hi-tech firms, aiming to enhance bilateral technological ties, particularly among small and medium-sized enterprises, said Viktorovna. India rolls out red carpet for Vietnamese investors Economic ties between Viet Nam and India have yet to match the vast potential and huge aspirations of their leaders, officials on both sides and entrepreneurs agreed at a meeting the Indian consulate held last week in HCM City to mark the launch of its "Made in India" campaign. Smita Pant, the Indian consulate general in HCM City, said India encouraged foreign investment in its market of 1.3 billion. Vietnamese investors were also welcomed and the country had rolled out of a red carpet, she said. "The potential is huge and as far as India and Viet Nam trade and investment relations are concerned, the business community is sitting on a gold mine, which needs to be explored." Besides online licensing, the Indian Government has also announced new policies for 24 sectors in which it is seeking investment, including construction, health, bio-technology, ports, aviation, railways, defence, and space, according to the diplomat. She said this month there would be a high-level Vietnamese delegation including businesspeople visiting India. Direct flights between India and Viet Nam are set to begin in less than two weeks' time. A memorandum of understanding for twinning HCM City with Mumbai is under discussion, and efforts are going on to open an Indian bank branch in HCM City, according to Pant. There is opportunity for India to get more investment from Vietnamese companies as Viet Nam is becoming one of the top investors in Myanmar and its investments in Bangladesh are growing. Both these countries border India's north-eastern region. "We call upon you to look at India with its huge market, privatisation exercise, ease of investment, and the commitment made by Prime Minister Narendra Modi himself to welcome investments," Pant said. Some Indian companies have shown interest in investing in wind energy, bio-mass, hi-tech agriculture, and infrastructure. Indian investment today in Viet Nam is close to US$1 billion and is all set to grow with the Tata Group investing around $2 billion in Soc Trang Province. Le Phuoc Vu, co-chairman of the Viet Nam - India Business Forum and chairman of the Hoa Sen Group, said India was Viet Nam's biggest market in South Asia and Viet Nam's sixth largest trading partner. Mohan Ramesh Anand, the chairman of the Indian Business Chamber in Viet Nam, said Vietnamese companies had many opportunities to invest in India. Vietnamese companies had invested more than $8 billion in more than 500 projects abroad, he said. Besides the traditional markets of Laos and Cambodia, they had also made significant investments in Russia, Malaysia, Algeria, the US, Cuba, Myanmar, and Bangladesh, but had only three projects in India worth $23.6 million, he added. According to the Foreign Investment Agency, India has 77 projects, most of them small, in Viet Nam to rank 27th among investing countries and territories. Bilateral trade is worth around $5.5 billion, and is expected to cross $7 billion by 2015 and $15 billion by 2020. Tat Thanh Cang, deputy chairman of the HCM City People's Committee, said ties between HCM City and India were a highlight of the bilateral relationship, with trade in 2013 worth almost $700 million. But he admitted that the co-operation did not match the potential or expectations of the two sides. EVN struggles to cope with rising input costs The rising prices of coal and gas for power production look to push up the state-run Electricity of Vietnam (EVN)’s 2014 operating costs by around VND7 trillion ($328.6 million), which will seriously hurt the firm’s financial plan. The news was announced by Hoang Quoc Vuong, EVN chairman, at a recent meeting between the prime minister and the Ministry of Industry and Trade . According to Notice 2175/VPCP-KTTH, the prime minister approved the pricing scheme proposed by the Ministry of Finance (MoF). Accordingly the price of gas sold to EVN since April 1 this year is equal to 70 per cent of the market price plus the transportation and distribution cost. Resultantly, the price of gas sold to EVN rose from $5.19/million BTUs to $5.74/million BTUs on April 1, then $6.56/million BTUs on July 1, and finally $7.38/million BTUs on October 1. It is expected to reach the market price of $8.2/million BTUs starting January 1, 2015. Spending on gas by power plants, according to the 2014 plan on power output, is thus estimated to rise by VND3.2 trillion ($150.2 million). “EVN has yet to pay the additional amount,” said Nguyen Quoc Khanh, deputy general director of PetroVietnam at a press conference on October 8, “though PetroVietnam has already confirmed the new prices with EVN.” Meanwhile, the price of coal for power production has similarly been raised twice so far this year. According to the MoF’s Document 1085/BTC-QLG, dated December 31, 2013, the price was raised by between 1.2 and 14.7 per cent, depending on the type of coal. The increase has caused EVN’s spending on coal to rise by VND1.83 trillion ($86 million) from the earlier estimated amount. Later, on July 21, the MoF’s Document 9961/BTC-QLG allowed the price to rise by between 4 and 7.4 per cent, effective on July 22. This has caused EVN’s spending on coal in the final months of 2014 to rise by an additional VND569 billion ($26.7 million). Besides rising prices of coal and gas, power production also suffers from a rise in the water consumption tax, from 2 to 4 per cent of the selling price since February 1. The increase will cause the production cost of hydropower plants under EVN to jump VND1.5 trillion ($70.4 million). Increasing gas prices will cause the price of power to rise by VND22 (0.1 US cents)/kWh from the current price of VND1,508.85 (7.08 US cents)/kWh. At a press conference on October 9, the MoF said the power price adjustment has to follow Decision 69/2013/QD-TTg. According to current regulations, the price of electricity for the 2013-2015 period is set at between VND1,437 (6.74 US cents)/kWh and VND1,835 (8.6 US cents)/kWh. Northern first private thermal power plant gets underway On October 23, construction kicked off on the Thang Long thermal power plant in Quang Ninh province, the first to be built by privately run Geleximco Group, reported baodientu.chinhphu.vn. Covering more than 124 hectares, the 2x300MW plant has a total investment of nearly VND20 trillion ($952 million) and plans to employ state-of-the-art French technology to help minimise greenhouse gas emissions. The project comprises a main plant, a coal storage facility and supporting infrastructure. It is scheduled to finish construction after 45 months and be commissioned in late 2017. Once operational the plant is expected to contribute around 4,185GWh to the national power grid each year, spurring economic development in the country’s largest thermal power centre, also home to the Mao Khe, Cam Pha and Mong Duong power plants. In light of the prime minister’s Decision 627/QD-TTg, approving the project, capital will be sourced 20 per cent from the developer and 80 per cent from foreign commercial loans. Speaking at the event, Deputy Prime Minister Hoang Trung Hai assigned relevant authorities to coordinate with the local administration and contractors to address any challenges and accelerate the pace of construction to ensure the quality and safety of the plant. Vietnam 2nd fastest-growing smartphone market in SE Asia: GfK Vietnam came second among the three fastest growing smartphone markets in terms of volume turnover in Southeast Asia in the past 12 months, a German market research firm said Tuesday in a press release. During the Sep 2013 – Aug 2014 period, Vietnam reported 56 percent increase in smartphone demand compared to the previous period, Sep 2012 – Aug 2013, GfK said, citing findings from its latest survey. Vietnam stood behind Indonesia, which posted 70 percent spike, and was followed by Thailand, where demand for smartphone expanded 44 percent. “In value terms, it was Vietnam, Indonesia and Thailand which drew in 52, 32 and 31 percent increased sales dollars against last year,” the GfK said. The latest GfK findings for the smartphone ownerships in seven key Southeast Asian markets, including Singapore, Malaysia, Thailand, Indonesia, Philippines, Vietnam and Cambodia, show that sales of the hi-tech devices in these countries reached more than US$16.4 billion in the past 12 months. Total smartphone sales at these seven markets in the Sep 2013 – Aug 2014 period rose to nearly 120 million units, according to the market research firm. GfK said smartphone sales in these countries spiked by 44 percent in volume and 24 percent in value compared to the same period a year ago. “The big developing countries are the ones fuelling the strong surge in adoption as many outside the big cities are probably just making the switch from their basic feature phone and acquiring their first smartphone,” Gerard Tan, Account Director for Digital World at GfK Asia, said in a statement. “For instance, the markets of Indonesia, Vietnam and Thailand have performed extremely well this year, reporting high growth of over 30 percent in generated revenue and even more in sales volume.” Tan said the introduction of more low-end models by new Chinese manufacturers is a key driver that fueled the strong market performance especially in the developing countries as they “make smartphones more affordable.” “These budget smartphone models have gone down particularly well in the developing markets,” Tan said, adding they would take competition in the marketplace to “an even more intense level.” Indonesia is the only market where homegrown brands have continued to grow in popularity, garnering over 16 percent share in volume and 7 percent share in value of the local market. Meanwhile, Chinese smartphone brands are more prevalent in Indonesia, Malaysia, and Vietnam where their respective proportion of consumer spend have reached more than 10 percent of the total market. “Although international brands dominate the region’s smartphone market, Chinese brands are gaining significant presence,” Tan stated. “Major international brands are losing shares to the Chinese brands in price competition due to the low-cost of the latter which are selling their smartphones, including phablets, within the $50 to $200 range.” More than 345 Chinese branded smartphones now exist across the Southeast Asia, according to GfK. While an internationally branded smartphone averaged at around $253, a Chinese branded one cost only $159, or 58 percent lower. “Competition in the market will further intensify, as Chinese manufacturers are stepping up their activities in more countries, notably Singapore, Philippines and Thailand,” Tan commented. Tan added fierce competition in the region is anticipated as several international brands are poised to launch new models there. Consumers will be the “eventually winners who will gain from the price wars” between the brands, he concluded. Tougher punishments on monetary-banking infringements Since December 12, administrative infringements on monetary area and banking activity shall be fined up to billions Viet Nam Dong. This is part of Decree 96/2014/ND-CP of the Government on sanctions against administrative violations in the monetary area and banking domain. The new decree, which replaces Decree 202/2004/ND-CP, dated December 10, 2004 and Decree 95/2011/ND-CP, dated December 20, 2011, expands scope of violations, especially acts related to money laundering and deposit insurance. A fine of up to VND 500 million shall be imposed on acts of separating, merging, transforming legal status by credit organizations and branches of foreign banks without getting written approval from competent agencies. Foreign currency activities of credit organizations, branches of foreign banks, agents without licenses issued by competent agencies or their licenses expired/suspended shall be subjected to a fine of VND 500-600 million. The infringement of capital adequacy ratio shall be fined from VND 400-450 million. The fresh decree also stipulates fines of VND 150 million on deposit insurance and VND 250 million on money laundering. The above sanctions shall be applied to individuals and doubled for violations by organizations. First joint venture on property management set up Japan’s Asia Business Investment Company and KS Community Company on October 13 set up a joint venture with domestic PMC to operate property management and consultation services. This is known as the first ever joint venture in this field made by foreign company so far. The company - named PMC Community Joint Stock Company (PMC Community), will specialise in property management, consultancy and real estate brokerage. Target customers include individuals, families and companies. According to Yuji Koyama, general director of PMC Community, the seriousness and high appreciation to the customers under the Japanese style will be outstanding characteristic of the joint venture to woo customers. To ensure the highest quality of the newly set up joint venture, a majority of its staff is Vietnamese however Japanese experts are intensively managing throughout the system. According to Nguyen Quang Huy, general director of PMC, Japanese customers would be very hard to convince and the company must pay much more attention on their staff working style. “Therefore we set up the target to receive Japanese working style, culture and professional style in order to have the belief from our customers,” Huy said. Founded in 2000 and 1996 respectively, Asia Business Investment and KS Community are experienced interdisciplinary businesses in Japan. The two companies have offered management and consultancy services to numerous large-scale real estate projects. In Vietnam, while newly established in 2009, PMC has been fast-track in making itself known not only because of its professionalism and dedication to each service but also its accomplishments in creating humane and friendly living communities. The company is currently providing management services for various types of real estate in Hanoi, Danang and Ho Chi Minh City, notably Hyundai Hillstate, Mulberry Lane, Sky City, Dolphin Plaza, Cantavil Hoan Cau, Sunrise City, PARCSpring or Danang Administrative Centre. Industrial parks attract more foreign investors LG Electronics – the world’s second largest television manufacturer has unveiled a strategic plan to expand its operation in northern Vietnam. Dang Thanh Tam, Chairman of Kinh Bac City Development Holding Corporation (KBC) said on October 26 that with further investment from LG, total foreign investment in 11 industrial parks (IPs) managed by KBC will reach US$ 2 billion in 2015, twice the expected figure.   The move has shown that Vietnam, especially its hi-tech field has become more attractive to foreign investors such as Samsung, LG, Nokia and Intel, who are seeking new outlets in Asia rather than China. In the first nine months of the year, Vietnam has disbursed nearly US$8.9 billion in foreign direct investment capital (FDI), up 3.2% compared to last year’s corresponding period. The RoK, Hong Kong and Japan are the three largest investors in the country. Currently, Vietnam has operated nearly 300 IPs and economic zones. According to the Ministry of Planning and Investment, in the first half of this year, the IPs attracted over 50% of total FDI in Vietnam, contributing more than 40% to total export turnover and generating 2.5 million jobs. Vietnam aims to achieve an economic growth of 5.8% this year, the highest rate since 2011 from export and trade surplus. Farm exports generate US$25 bln in revenue Export revenue from farming, forestry and seafood products is estimated to hit US$2.28 billion in October, the Ministry of Agriculture and Rural Development noted. The figure has brought the total export value during the first ten months of 2014 up to US$25.39 billion, which represents an increase of 11.2% compared to the same period last year. In the ten-month period, agriculture reported a year on year growth of 11.5% in export value, reaching US$12.25 billion; while fishery exports increased by 19.9% to US$6.48 billion, followed by the forestry sector with US$5.24 billion, up by 12.9%. In October, several products recorded an increase in export, including coffee, cashew nuts, pepper, seafood, timber and wooden products, and rice, which had actually experienced a slump since the beginning of the year. Vietnam has exported 669,000 tonnes of rice so far this month, generating US$317 million. As a result, rice exports during the ten months rose to 5.68 million tonnes, bringing home US$2.59 billion, down by 2.7% in volume, but up by 1.2% in value. The ministry said coffee performed the best during the period, with year-on-year surges of 37.1% to 1.49 million tonnes in export volume and 33.5% to US$3.10 billion in value. Meanwhile, a decline in the export of tea, rubber, cassava and cassava-based products was recorded. The ministry’s data also revealed that only 12,000 tonnes of tea, worth US$21 million, were shipped abroad in October, contributing to a year-on-year fall of 5.6% in volume to 109,000 tonnes and 0.6% in value to US$186 million during the first ten months of this year. Rice exports hit US$2.6 billion in ten months Vietnamese rice exports reached 5.68 million tonnes, earning approximately US$2.6 billion in the first ten months of this year, down 2.7% in volume and up 1.2% in value over last year’s corresponding period. The Ministry of Agriculture and Rural Development (MARD) reports in October alone, the country exported 669,000 tonnes of rice valued at US$317 million. The average tonnage price of rice during the ten-month period increased 3.6% year-on-year to US$455.26. China remained the largest export market for Vietnamese rice, making up 32.48% of market share. It was followed by the Philippines at 22.06% market share, Malaysia (7.07%), Ghana (5.76%) and Singapore (3.19%). Ho Chi Minh City leads country in FDI attraction Ho Chi Minh City took the lead in foreign direct investment (FDI) attraction in the first ten month of this year including 332 projects with new and supplementary registered capital reaching US$2.9 billion. The figures were released by the Ho Chi Minh City People’s Committee on October 27. Accordingly, the City’s industrial production value grew by 6.8% from last year’s figure and export turnover reached US$28 billion, up nearly 10%. Meanwhile, State budget collection of the locality was up 13% year-on-year to more than VND213,000 billion, equivalent to 94% of its annual plan. Additional loans to boost agricultural export Businesses and farmers in the Mekong Delta has so far this year received short-term loans worth 59 trillion VND (2.8 billion USD) to invest in agricultural export products, according to the Southwest Steering Committee. Thanks to the loans, the total Tra fish farming area in the region has been expanded to 6,400ha. The region’s output has so far hit 902,325 tonnes, of which 540,000 tonnes were exported, generating 1.4 billion USD in revenue. Additionally, local enterprises processed and exported 4.3 million tonnes of rice, worth 1.95 billion USD. The Vietnam Tra Fish Association called upon the local banking sector to provide more flexible long-term loans and improve the information available in a bid to facilitate credit access for local farmers and businesses. Dong Nai’s wooden product exports exceed 760 million USD The southern province of Dong Nai generated more than 760 million USD in revenue from exporting wooden products in the first ten months of the year, representing an increase of 6 percent over the same period last year. According to the provincial Statistics Department, in October alone export revenue increased to over 89 million USD, up by 12 million USD from the previous month. According to the provincial Industry and Trade department, wooden products are one of the four commodities with the highest value, after footwear, garments and textiles. The most popular wooden products, furniture and plywood, are exported to big export markets such as the EU, the US and Japan. Chairman of the provincial Handicrafts and Wood Industry Association Phan Van Binh said the Association has organised a number of trade promotion programmes with a view to supporting local businesses in studying markets, taking part in exhibition fairs and providing export and import training. He added that the member businesses are promoting afforestation in a number of provinces in Vietnam as well as in Laos and Cambodia, aiming to generate material for production. In 2015, the Association will improve its operations, boost its business support services and build supply chains to create favourable conditions for production. The province currently is home to more than 600 timber enterprises, earning 2 billion USD in revenue last year, with almost 1.5 billion USD generated by exports. The province’s timber industry is accessing new markets in Latin America and Africa. Dusit Thani’s officially steps into Vietnam Famous Thailand resort management Dusit International on October 24 reached official signing of hotel management agreement to operate their first property in Vietnam – Cam Ranh Flowers Resort with the Russia State Development Corporation. To be completed in 2017, $90 million Cam Ranh Flowers Resort is spread over 15 hectares and is comprised of a luxury hotel with 256 rooms and 10 bungalows, as well as prestigious residences for sale. Alternaty was involved in the negotiation of the commercial terms on behalf of State Development, the Developer, and was involved in the preliminary Feasibility Study and planning stages. Rudolf Hever, executive director at Alternaty commented that Cam Ranh Flowers Resort will be a fantastic product in Cam Ranh Bay with an exceptional design and a large variety of facilities and types of accommodation on offer. Mauro Gasparotti, executive director at Alternaty pointed out that among all the second home destinations in Vietnam, Cam Ranh is still at the top of investors’ lists. “It clearly has strong potential for growth due to the solid infrastructure systems, promising weather conditions and remarkable choice of entertainment and F&B options. This truly makes it an international holiday destination for local as well as international clientele and a fertile ground for Real Estate Developers,” said Gasparotti. Cam Ranh Flowers is the first project invested by State Development in Vietnam but the Russian developer is already considering future opportunities in the Nha Trang area and other parts of Vietnam. Transport ministry refuses to lower port service charges Deputy Minister of Transport Nguyen Van Cong has said the Vietnam Maritime Administration (Vinamarine) should ask the Vietnam Seaports Association (VPA) and owners of local ports to turn down requests by foreign shipping lines for lower port service fees. Earlier, the ministry worked with representatives of shipping firms in three major cities – Hanoi, Haiphong and HCMC – to collect their recommendations and proposals. According to the ministry, Vinamarine should weigh a plan for revising up floor fees on services at the Cai Mep-Thi Vai port complex to the ministry. The administration must also explain delays in dredging navigational channels of Haiphong and Saigon-Vung Tau and review towage service charges at local ports, impose penalties on agencies violating rules, and change regulations to help businesses cut costs. The ministry also asked shipping firms and ports to enhance corporate governance, maximize resources to improve efficiency and competitiveness, and take measures to tighten controls on vehicle loads. Ca Mau province calls for investment in scenic island The southernmost province of Ca Mau is calling for investment to exploit the tourism potential of Hon Khoai Island - a cluster of five islets in Ngoc Hien district which were listed among the 10 most beautiful islands in the country by the Vietnam Book of Records. In addition, the province hopes to turn the island into a shelter for fishermen, capable of accommodating 2,000 vessels at a time. According to Vice Secretary of the provincial Party Committee and Chairman of the People’s Council Bui Cong Buu, dozens of foreign and domestic investors have made their offer, which the provincial authorities are considering. From 2016 to 2020, the province wants to build several key infrastructure projects such as a bridge connecting the island and the mainland at an estimated cost of 2 trillion VND (94 million USD), storm shelters for fishing boats with an investment of 1 trillion VND together with a system of roads. Hotels and facilities serving tourism will also be built, with the aim of turning the island into a major eco-tourism site in the province. About 16km from the mainland and 400m above sea level, all the islets are covered by untouched primeval forests, which are home to many rare species of fauna and flora. Ca Mau boasts many attractive eco-tourism sites but its tourism development is yet to match potential. Each year, it only serves 800,000 tourists for 300 billion VND (14.1 million USD). The province sets a target of receiving at least two million holidaymakers every year from 2015, and earning an annual revenue of one trillion VND (47 million USD) from the sector. An Giang issues incentives for investment in agriculture The Mekong Delta province of An Giang has issued a range of incentives to stimulate investment in agriculture and rural areas. The incentives focus on 18 main activities, including forest planting and protection, large-scale rice field, large-scale husbandry and aquaculture, breeding of plant and animal, biotechnology application, fodder production and processing and preservation of agro-forestry-fishery products, among others. Projects in designated “Rural areas” and “Agricultural activities subject to special preferential treatment” will be exempted from land use fee, land rent and water surface rent if they lease State-owned land in the first five years of operation. Those which lease land or water surface from households will receive subsidies for 20 percent of the rent for five years. Investors in these two categories also receive support in the form of 50 percent of advertisement cost, 50 percent of costs to attend domestic fairs and exhibitions and 70 percent of research cost for new technology. Projects in “agricultural activities subject to preferential treatment” will be entitled to a 70 percent reduction in land use fee and the lowest land and water surface rent during the first 15 years of operation. Meanwhile, in the category of “agricultural activities where investment is encouraged,” investors will be given a 50 percent reduction in land use fee together with the lowest land and water surface rent for the first 11 years of operation. The province also provide projects using 4 ha of land or more with financial support for land clearance and building waste water treatment system. All the support and incentives come with the condition that the investment project should use local workers for at least 30 percent of its staff and source 60 percent of materials such as rice, maize and seafood from An Giang province. HCM City hosts Int’l Baby and Kid Fair 2014 The 2014 Vietnam International Baby and Kid Fair, Vietbabyfair, running from October 30–November 1 has kicked off in Ho Chi Minh City with 95 enterprises from 16 countries around the globe displaying their wares in 142 pavilions. The opening of the fair, at the Saigon Exhibition and Convention Centre in HCM City, featured over 200 famous brands and a host of promotional programmes and gifts, along with areas for kids and parents to join entertainment activities and shop. The organizing board of the fair has also held many health consultation seminars for pregnant women and kids. Int’l Retail and Franchise Exhibition opens in HCM City The Vietnam International Retail and Franchise Exhibition (VIETRF) running from October 30–November 2 in HCM City kicked off with 170 companies from 12 countries featuring many household name products and services. They included famous brand names like Lion City, New Zealand Natural Premium Ice Cream, Subway, Gloria’s Jean, Lock&Lock, EVERON, Sushiworld, Lotteria, and Tous Les Jours. Within the framework of the annual event, seminars have also been planned, providing useful information about the retail and franchise markets in Vietnam. Opening day of the exhibition aimed to help domestic and foreign enterprises foster cooperation, promote trade and update advanced technologies and products. It also hoped to develop domestic brand names, contributing to comprehensive development of the Vietnam retail sector. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR