BUSINESS IN BRIEF 13/11 HCMC, Canada’s British Columbia want stronger ties HCMC and Canadian province British Columbia (B.C.) have struck a letter of intent to promote trade and economic cooperation. Pham Thanh Kien, deputy director of the HCMC Department of Industry and Trade, and Shannon Baskerville, deputy minister of international trade of B.C., signed the deal in the city on Monday. Teresa Wat, B.C. minister of international trade and minister responsible for Asia Pacific strategy and multiculturalism, witnessed the signing ceremony during her visit to the city. According to the deal, the two sides will encourage their companies to visit each other to exchange information and explore business opportunities. In addition, the two sides will share information about their trade and investment policies and provide services for firms and their partners to make investments. This letter of intent is valid for one year from the date of being signed. HCMC chairman Le Hoang Quan told the Canadian minister that Canada has 59 investment projects worth a combined US$115 million in the city at the moment. As of October 20, HCMC had fetched US$230 million from exports to Canada, up 20% year-on-year and spent US$124 million importing goods from the North American nation, an increase of 70%.   Quan said potential for cooperation between HCMC and B.C. is huge and that the city will make effort to step up investment and trade cooperation to benefit both sides. He proposed HCMC and B.C. sign a comprehensive partnership. The city has established comprehensive partnerships with 41 cities around the world and has had good ties with Toronto and Ontario, Canada for nearly 10 years.  Wat said after the signing of the letter of intent, the two sides could take action to boost cooperation. B.C. is Canada’s second biggest exporter to HCMC as most goods exchanges between HCMC and Canada go through B.C., according to her. Lazada launches big sales event Lazada Vietnam will launch its biggest sale of the year with discounts of up to 50 percent on www.lazada.vn, the country's largest online shopping website. The sale takes place from November 11 until December 12.  The programme has support from the Vietnam E-Commerce and Information Technology Agency, Vietnam E-Commerce Association, the Department of Industry and Trade in HCM City, 20 brand names and 40 delivery partners as well as banks. The CEO of Lazada Vietnam, Alexandre Dardy, said his company aimed to reach a record in sales during the month-long event. The volume of customers is expected to be 10 times larger than the same event last year. Under the programme, thousands of offers of discounts of up to 50 percent as well as vouchers will be available. About 220 flash sales will be applied during the sale. Lazada's "online shopping revolution programme" began in Singapore in 2012. It is a version of Black Friday, Cyber Monday and Singles Day. Events to promote Vietnam-Russia trade ties A series of events, including a fair showcasing Vietnamese high-quality goods, conferences and workshops will be organised in Moscow, Russia to further promote trade relations between the two countries. Speaking at a press conference in Moscow on November 10 to announce the information, Vietnamese Ambassador to Russia Nguyen Thanh Son highlighted the significance of the events, saying that they show the Vietnamese people’s solidarity with their Russian peers. As scheduled, a conference gathering representatives from over 200 Vietnamese businesses and 100 others operating in Russia and other parts of the world are being held on November 11 while a Vietnam-Russia business forum will take place in the day later, providing the two sides’ enterprises with chances to seek cooperation opportunities and set up partnerships. The highlight of the string will be a month-long fair beginning on November 12, featuring over 10,000 products by more than 160 Vietnamese businesses operating in the fields of textiles-footwear, farm produce-food, wooden furniture and souvenir. Additionally, a number of workshops will be arranged in the framework of the fair with the aim of promoting connections between Russian and Vietnamese firms as well as providing Vietnamese companies with experience in accessing and making inroads into the Russian market. As the largest-ever Vietnamese goods fair in Russia, the event is expected to create a push for Vietnam-Russia trade links, helping the two countries quickly realise their set goals in the field.- Vietnam - US trade office established in Binh Duong A Vietnam – US trade office was inaugurated in southern Binh Duong province on November 11 as a joint effort of the Vietnam-US Chamber of Commerce in the US, Binh Duong’s Department of External Affairs and Becamex IDC.  The move is to facilitate the operation of US companies here, the head of the Vietnam-US Chamber of Commerce in the US, Mai Hoang, said, adding that Binh Duong has a favourable geographical location, which is close to Ho Chi Minh City, several airports and sea ports.  Vice Chairman of the provincial People’s Committee Mai Hung Dung said Binh Duong has attracted many foreign investors. Many business organisations from Japan, the Republic of Korea and China’s Taiwan have opened their representative offices in the locality.  According to the provincial Department of Planning and Investment, Binh Duong is currently hosting 2,548 valid foreign-funded projects totalling more than 22 billion USD.  In the 2010-2015 period, the province drew 7.9 billion USD of investment, 2.5 billion USD higher than the set goal.  In the next five years, it plans to attract at least 7 billion USD. NFSC warns of challenges for growth Vietnam’s economy is facing a host of internal and external challenges, which could dent growth though the economy has been steadily recovering this year, the National Financial Supervisory Commission (NFSC) has warned. In its report sent to the Government’s regular meeting last week, NFSC forecast that economic growth in the coming quarters would likely be slow due partly to the world’s economic slowdown, the slow structuring of the local economy and a lack of new drivers for growth. It is hard to adopt new fiscal and monetary policies to fuel economic growth as room for this is limited. NFSC projected that there would not be big changes in the final months of the year, interest rates and the exchange between the U.S. dollar and Vietnam dong would be stable, and the local economy would expand 6.5% this year. However, NFSC said the services sector has moved almost flat in the year to date and that of the agro-forestry-aquaculture sector has slowed to 2.08% from 2.94% of the same period a year earlier. Exports in the January-October period jumped 8.5% year-on-year, higher than the projected increase of the world (5.1%) and China (6.8%). But export growth was still mainly driven by the foreign-invested sector while local firms saw a year-on-year export decline of 3.3% in the ten-month period. Budget collections were up thanks to higher revenues from domestic sources. Nevertheless, the taxes and fees collected from businesses and production activities which account for up to 75.5% of this year’s domestic collections recorded a slower rise than that of last year’s same period. According to NFSC, it is difficult to realize the target for Government bond sales if there are not bold tenor adjustments. In the first three quarters of this year, VND127.473 trillion was mobilized from G-bonds, meeting only 51% of the full-year target.  If the tenors and coupons of G-bonds are not adjusted, around VND160 trillion would be raised from this channel this year, far lower than the year’s target. This amount is not enough to pay principals and interest of mature bonds. Economic growth could be 6.5-6.7% next year but many challenges are forecast to hit Vietnam’s economy. The consumer price index (CPI) is likely to go up 2% next year, higher than this year, as prices of some essential commodities and public services will rise further. NFSC projected CPI to stay low as prices of commodities on global markets would remain low and a pickup in aggregate demand on the domestic market is not in sight. Sustainable growth of industrial exports discussed in Hanoi Sustainable growth of industrial exports was featured at a seminar held in Hanoi on November 5.  Speaking at the event, Deputy Minister of Industry and Trade Tran Tuan Anh attributed the sustainable industrial export growth over the past time to a solid manufacturing base, the stable socio-economic environment, and business incentives.  Deputy Director of the Ministry of Industry and Trade’s Export-Import Department Tran Thanh Hai said processed industrial goods accounted for 78.8 percent of the country’s total exports as of early October, mostly contributed by phones and spare parts, garment, footwear, computers and accessories, and transport vehicles.  He said FDI inflows, predominantly in industry, as well as efforts to become part of the global supply chain are propelling the exports of industrial goods.  He, however, also described globalisation and FTA deals as factors to fuel competition between local producers and foreign rivals.  Non-tariff barriers will not support Vietnamese products in the battle against high-quality and low-cost imports, he said.  The underdeveloped support industry cannot help domestic firms become self-sufficient in manufacturing and export materials. Challenges in quality, prices, design and resilience to market movements are testing local firms’ capacity, said Deputy General Director of Red River Garment Company Bui Viet Quang.  Vu Van Thanh, Deputy General Director of the Hoa Sen Steel Sheet Corporation, called for more support from the State and the ministry, like intensive training in trade defence and competition laws for businesspeople.  The Vietnamese embassies and commercial offices abroad should closely oversee and protect legitimate rights of domestic firms in doing business with foreign rivals, he added.  The event was co-hosted by the MoIT and Cong thuong (Industry & Trade) newspaper. Vietnam keen on cooperating with Iceland in clean energy Vietnam wishes to collaborate with Iceland in developing clean energies and receive technical support and experience sharing from the country in the field, said Deputy Prime Minister Hoang Trung Hai at a conference in Hanoi on November 5.  Stressing great potential for cooperation between businesses of both sides in this realm, Hai stated that Iceland’s help will enable Vietnam to meet requirements for both rapid growth and sustainable development as well as emission reduction.  He noted that Vietnam is currently on a process of national industrialisation and modernisation by increasing industrial production, which leads to power demand doubling the GDP growth.  This is a considerable challenge facing the country, requiring suitable solutions in specific conditions, he said.  Currently, Vietnam is using hydropower and coal-fueled thermal electricity as two main energy sources, while renewable energies remain humble. The country’s total power generation capacity is expected to reach about 75,000 MW by 2020.  According to the Government official, in the future, the country will focus on the harmonious development of energy resources by building a number of power plants using renewable sources such as wind, solar and geothermal and reducing the use of fossil sources.  For his part, Iceland’s President Olafur Rangnar Grimsson said his country is a successful model in clean energy development, with fruitful cooperation with other countries in the field.  Iceland is keen on developing geothermal sources for daily use and production, he said, adding that clean energy will help improve people’s living conditions as well as serve as a condition for effective and sustainable economic development. Fierce competition forecast for domestic industrial production Industrial products will not have it easy against those from countries with outstanding advantages, as well as cheap imported goods, when Viet Nam joins the Free Trade Agreements (FTAs). "The industrial sector has always been a key pillar in the country's economy with continuous growth increase and a leading position in exported staples," Tran Tuan Anh, deputy minister from the Ministry of Industry and Trade (MoIT) said. However, exports would become sustainable when there is a firm production foundation and a favourable mechanism to support businesses, Anh said. He told a conference on ‘Sustainable Export Growth of Industrial Products' held in Ha Noi yesterday that enterprises should also update information regularly on export markets, consumption habits and import policies of foreign countries. He urged a closer connection among ministries, sectors, the business community and associations to exchange information on FTAs or Trans-Pacific Partnership (TPP). Tran Thanh Hai, deputy director of the ministry's Import-Export Department said that in the first 10 months of the year, the processing and industrial products accounted for 79 per cent of the country's total export turnover. Several sectors including mobile phone and spare parts, garment and textile, shoes, and computers, apart from electronics spare parts, and transport vehicles, had relatively high growth thanks to international integration and on joining the FTAs, which have helped expand markets. "Moreover, Viet Nam has deeply participated in international supply chains, thus expanding the list of exported products," Hai said. In addition, FDI inflow in Viet Nam, which was mainly in the industrial sector, has also been considered a factor to promote exports of products. However, he also said the sector was faced with difficulties in terms of its sustainable export growth. The fierce competition with foreign rivals could be unavoidable. The non-tariff barriers with stricter requirement on products' quality would become more popular. On the other hand, the support industry has not been well developed, making Viet Nam a small cog in the global value chain. Big industries such as garment and textile, leather shoes, mobile phones and electronics products have high outsourcing rates, and have not brought high value adds to the economy. Vietnamese firms, which have not been active in their material supply for production, have also faced a challenge in proving the certificate of origin (C/O) to enjoy benefits from FTAs. Sharing ideas, Bui Viet Quang, deputy general director of Song Hong Garment Company, said domestic businesses have been squeamish about accessing the global supply chain. "The reason is that local firms have not been equipped with basic knowledge on markets, customers, foreign ability and behaviour in international trading," Quang said. However, he said, the biggest challenge was still the low competitive capacity of Vietnamese businesses in the fields of quality, prices and product diversity, as well as the ability to adapt quickly to rapid changes in markets and customers. Vu Van Thanh, deputy general director of Hoa Sen Group, suggested that State agencies and associations should further support businesses to help them develop in the face of fierce competition.  The MoIT should have special training on trade defence, laws on competition of other countries as well as support to enterprises in trade defence cases. Thanh also proposed that Vietnamese embassies in foreign countries should actively supervise and protect rights of local firms doing business with partners. VN companies suffer from sub par directors Directors have a very important role in working out and implementing companies' strategies, but in Viet Nam their competency remains questionable, experts have said. Tran Thi Anh Dao, deputy CEO of the HCM Stock Exchange, told a seminar on Wednesday on enhancing competencies of company directors that the ASEAN Capital Markets Forum (ACMF) and the Asian Development Bank (ADB) have been issuing annually the ASEAN Corporate Governance Balanced Scorecard for listed companies since 2011. The report, which ranks six ASEAN members — the others being Indonesia, Malaysia, the Philippines, Singapore, and Thailand — has Viet Nam last in the list. The scorecard is worked out based on the rights of share holders, fair treatment to shareholders, information release and transparency, and the role of the board of directors, with the final one accounting for 40 per cent of the total marks. Ha Thu Thanh, chairwoman of auditing firm Deloitte Vietnam — which together with HOSE organised the seminar – said the problems lie in the lack of competency and strategic thinking among directors, and underlined the need for training them. She also highlighted the shortage of competent human resources for the job in Viet Nam. Thanh, as well as Johan Nyvence, CEO of the HCM Securities Company, pointed to the fact that many family-owned and State-owned companies become joint stock but continue with incompetent directors. Truong Gia Binh, chairman of the Corporation for Financing and Promoting Technology (FPT), said a board of directors is required to work out a sound development strategy and implement it. Supervising implementation and other activities and tendering advice are its responsibilities, he said. Speaking at the seminar, Dr Dona Hamlin, chairwoman of US-based consulting firm Hamlin Harkin, said governance should position boards to fulfill duties effectively and efficiently, ensure competent, committed directors are accountable to shareholders and provide transparent information to shareholders. It should also, amongst other things provide a balance between itself and management in leadership, decision making, strategy, risk management and priorities for corporate performance, while maintaining constructive communication with shareholders and stakeholders. Dao spoke about the need for regular competence improvement training for directors as already stipulated by law. She admitted that such training currently focuses on updates made to legal documents. "Directors, on their part, often send their subordinates to these courses instead of attending them." PMI up but manufacturing still sluggish The October Purchasing Managers Index rose to 50.1, just above the waterline of 50 and up from the previous month's 49.5, but at that level the manufacturing momentum remains sluggish, according to a monthly report from HSBC. Vietnam at a Glance, released on Wednesday, said the deterioration of the employment subcomponent (of the PMI) and ongoing reduction in the new export orders subcomponent suggested that manufacturing was unlikely to pick up strongly towards the end of the year. The new export orders subcomponent was at four-month lows after export growth in the year-to-date slowed to 8.5 per cent year-on-year from 9.6 per cent in September, and would likely slow down further in the remaining months. The employment subindex was at a seven-month low, reflecting a cautious outlook among manufacturers. The good news was that with oil prices still weak, domestic demand remained well supported by low inflation (headline inflation was unchanged at 0 per cent y-o-y in October while core inflation slowed further to 1.4 per cent from 1.6 per cent the previous month). Domestic activity had also been fuelled by a steady revival in credit growth, which had risen to 10.8 per cent y-o-y as of September and would likely approach 17 per cent this year, up from 14.2 per cent in 2014, as banks accelerated lending in the month ahead. Against the backdrop of stronger growth, wages were likely to rise, setting the stage for a revived core inflation next year.  VN consumers remain optimistic Viet Nam remains among the 10 most optimistic nations globally, according to the latest Consumer Confidence Index released earlier this week by global information and measurement company Nielsen. Viet Nam's score increased by 1 percentage point quarter-on-quarter and 3pp year-on-year to 105 in Q3 even as consumer confidence in a number of Southeast Asia markets took a dip. The Nielsen Global Survey of Consumer Confidence and Spending Intentions, done since 2005, measures consumer confidence, major concerns, and spending intentions of more than 30,000 respondents with internet access in 60 countries. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism. The survey also found that Southeast Asia is home to the world's most confident consumers despite dips in Q3. The Philippines ranks third globally though the country posted a decline by 5 percentage points from last quarter to 117. Indonesia ranks fourth with a score of 116 points after a two-point decline, while Thailand is fifth with an unchanged 111 points. Singapore gained two points to register a score of 101. Malaysia, which posted the region's lowest Consumer Confidence Index of 78, also saw the region's steepest decline of 11 points. "The past few quarters have seen some tapering in some markets, which is reflective of softening in the region's economy," Regan Leggett, Nielsen client service director in Southeast Asia, North Asia and Pacific, said. Across the six Southeast Asia markets, consumers' focus on financial security remains prominent, with 71 per cent of respondents putting their spare cash into savings. Vietnamese consumers keep the highest globally (78 per cent, 3 percentage points up quarter-on-quarter), followed by Indonesia (74 per cent), the Philippines (67 per cent), Singapore (66 per cent), Thailand and Malaysia (64 per cent). Eighty six per cent of Vietnamese consumers have adjusted their spending habits over the past 12 months to save on household expenses because most people think the country is in a recession. Sixty per cent have tried to save on gas and electricity and on out-of-home entertainment in comparison with this time last year. Around half have cut down spending on new clothes and telephones. Nielsen did the survey between August 10 and September 4.  Power sector needs shaping future green growth Viet Nam's power industry should reform its structure and production based on sustainable development, transparency and future competitiveness, said Deputy Prime Minister Hoang Trung Hai . Hai was speaking at a conference entitled 'Shaping Viet Nam's Sustainable Power Sector Development'. He stressed that the industry should meet the goal of national energy security, but also protect the environment, promote sustainable development and be supportive in the development of other industries. "Thanks to the power sector's efforts, Viet Nam's national power grid has improved remarkably. It now can meet socio-economic development demands with higher quality and improved reliability," Hai said. He added that the power sector is facing challenges, while the country's power sources include hydro- power, renewable energy bio-mass is either limited or underdeveloped. The deputy Prime Minister also said the industry should improve its service, production and infrastructure to meet market demand and ensure green growth and low carbon emissions. He appreciated the contributions of World Bank, Asia Development Bank, Japan International Co-operation Agency (JICA) and other organisations in supporting the development of Viet Nam's power sector. Viet Nam's power sector also eye on how to build a market oriented price that aim to attract investment from multi-sectors and build up a transparency pricing system and competitive power generation providers in 2020, as well as boosting equitisation. "Viet Nam has done well in providing access to electricity, with almost 100 percent of its population connected. Access to power has also been accompanied by improvements in operational efficiency and service quality." said Axel van Trotsenburg, the World Bank Vice President for East Asia Pacific. "The key question today is how to meet future demand, while also complying with the government's commitments to reducing Green House Gas emission, in the context of climate change." Le Tuan Phong, deputy head of Energy Agency under the ministry of Industry and Trade, said Viet Nam has to import 78 million tones of coal for power production in 2030 when the country's coal exploitation can not excess 50 million due to environmental concerns. He said two nuclear power plants in Ninh Thuan province are set to provide 4,000 Megawatts (MW) after beginning operation in 2030. He said the power sector also needs an investment of US$30 billion for development in 2030. Phong also said the sector needs $1.6 billion to provide power for remaining 1.1 million households in rural areas. The industry will invest $70 million to provide renewable energy (solar, wind power and bio-mass) for 21,300 households in 2030.  Oxford Business Group signs MoU with FIA Global publishing firm Oxford Business Group (OBG) has signed a Memorandum of Understanding (MoU) with Viet Nam's Foreign Investment Agency (FIA) to publish an inaugural report on the country's economy. According to the MoU, FIA representatives will cooperate with OBG to compile and produce The Report: Vietnam 2016 - a detailed, sector-by-sector look into Vietnam's economic development and investment opportunities. The report will include statistics, insights, and interviews with key government and industry leaders and represents an expansion of OBG's operations as it publishes similar repots in 34 other global markets. Besides this, the report will highlight the country's integration and achievements on the global stage, present its current challenges, and consider future opportunities for local and foreign business in light of the recently signed Trans-Pacific Partnership Agreement and the ASEAN's growing economic strength. "Oxford Business Group's inaugural report on Viet Nam's economy will serve as an important tool in promoting investment opportunities abroad and bringing continued development for the country," General Director of FIA Do Nhat Hoang said at the signing ceremony. "The partnership with the Foreign Investment Agency marks an important early step in our operations in Viet Nam as we begin exploring this growing market," OBG's Country Director Caroline Nguyen said. "We are grateful to have the support of FIA's representatives in compiling The Report: Vietnam 2016 and relaying the country's investment opportunities and exciting developments to our readers around the world." OBG is a global publishing, research and consultancy firm that publishes economic intelligence on the markets of the Middle East, Africa, Asia and Latin America, as well as the Caribbean. Through its range of print and online products. OBG offers comprehensive and accurate analyses of macroeconomic and sectoral developments, including banking, capital markets, insurance and energy, as well as transport, industry and telecoms. AirAsia starts new direct route from HCM City–Penang AirAsia, the world's best low-cost airline for seven consecutive years, will launch a direct air route linking HCM City to the airline's international hub, Penang, Malaysia on January 25. The HCM City - Penang route will have four weekly flights on Monday, Wednesday, Friday and Sunday. The airline is offering a discount on tickets booked from now to November 8, with base fares from as low as US$15 one-way. The promotional fares are for the travel period from January 25 to October 29, 2016. Spencer Lee, head of Commercial for AirAsia Berhad, said: "We strive to continue bringing Malaysia closer to our neighbouring cities by connecting more dots within the Asean region. Penang is one of our important hubs, and we recognise its great tourism potential and this new direct flight from HCM City to Penang signifies our commitment in establishing enhanced connectivity for people from both cities." AirAsia also flies direct to HCM City from Kuala Lumpur with five daily flights and three weekly flights from Johor Bahru. First exBEERience Fest opens in HCMC The exBEERience Fest featuring a massive choice of 55 well-known beer brands around the world will take place at SC Vivo City rooftop for the first time in Ho Chi Minh City’s District 7 on November 11-15.  The five consecutive days of unbridled joy, excitement, and bewilderment at the festive and extravagant will also offer 55 fun games, 55 performances and 555 gifts to lucky participants. The beer fest will give visitors an opportunity to discover the mystery beer flavors, including wasabi, chili sauce or chocolate, honey, donut and more; as well as trying out well-known beer brands, such as Stout, Wheat, Larger, Pale, Cider and others. Vo Tan Si, chairman of the Saigon Bartender Sommeliers' Guild Association, will join the fest and share his knowledge about beer, such as beer making process, distinguish different beer types, choosing glasses for each kind of beer( including flute, snifter or chalice), pouring a beer for perfect foam, pairing beer and food, and  responsible drinking. exBEERience Fest aims to bring a well-rounded Beer Experience, called exBEERience, to beer lovers to satisfy their taste and live moments to the fullest with their buddies. Ticket will cost VND155,000 per person. People who buy deluxe and VIP tickets before October 15 will be offered a 20% discount plus other incentives. The event is only available to those 18 and older. Urban zoning needed for development of HCM City HCM City must have better zoning plans if it wants to develop into one of Southeast Asia's economic, financial, commercial, and technological hubs, Minister of Construction Trinh Dinh Dung has said. Speaking at a seminar on "Zoning and Architectural Management of HCM City" last Friday, he said the city should mobilise investments from all sources for developing infrastructure to cope with the urban problems it has been facing. It should revamp by building modern satellite towns and developing housing programmes, especially for poor residents, he added. Le Hoang Quan, Chairman of the city People's Committee, said while playing the role of an industrial, economic, cultural, and educational hub, the city has held on to its cultural characteristics. It has made great efforts to become a green and sustainable city in accordance with national zoning plans, he said. The administration has also taken measures to deal with traffic congestion and flooding and stepped up efforts to protect the environment and reorganise urban living. Nguyen Dang Son, deputy head of the Institute for Urban Research and Infrastructure Development, said HCM City should be developed as a multi-centre city to reduce traffic congestion. They could be Sai Gon, Cho Lon, Thu Thiem, and Phu My Hung and the four regional centres of Sai Gon Hi-tech Park in District 9 in the eastern section, the Hiep Phuoc Urban Area in District 9 in the south, the Northwestern Cu Chi Urban Area in Cu Chi District in the north-west; and the Tan Tao – Tan Kien Urban Area in Binh Chanh in the south-west, he said. Dr Ngo Viet Nam Son, president of NgoViet Architects & Planners, said the city should develop multi-functional centres vertically or horizontally within walking distance of public transport stations to create a sustainable living environment that serves people's entertainment, working and other daily needs. The seminar was held by the construction ministry and the Association of Zoning for Urban Development of Viet Nam. S.Korean firms want to boost sales in Vietnam Many South Korean enterprises have started to promote their products to Vietnamese consumers at exhibitions to prepare to enter the local market as a free trade agreement (FTA) between Vietnam and South Korea will take effect next year. At the Vietnam International Retail and Franchise Show 2015 (VIETRF 2015) and the Korea Sourcing Fair 2015 last week in HCMC’s District 7, there were up to 150 enterprises from South Korea, 30% higher than in the previous exhibition. South Korean firms brought a wide range of goods and services such as food, beverages, fruit, farm produce, home appliances, apparel, jewelry, decorative items, electronic products and cosmetics. According to South Korean enterprises at the exhibition, Vietnam’s economy is growing and its market is big with a young population. Besides, goods of South Korea have won the confidence of Vietnamese consumers. Therefore, they came to explore the market.  Maeil Foods, a firm specializing in producing foods made of seaweed, has decided to open a branch in Vietnam after joining the exhibition twice. Director Won-Ho Cho said Maeil Foods has operated in China, Japan and the U.S. for years but Vietnam is the first ASEAN market where the company has a branch which will open next month. Won-Ho Cho added he saw huge potential of the Vietnamese market. Meanwhile, according to Kim Jung Gwan, vice president of the Korea International Trade Association, the association’s member companies are keen on the Vietnamese market, especially after the two countries signed the FTA. This is the reason why this year’s exhibition attracted 93 members of the association, much higher than last year. He said Vietnam’s attractiveness is not only its large population and hard-working people but also its important role in connecting ASEAN countries, China and India. Last September nearly 50 South Korean businesses showcased cosmetics, food, beverages and consumer goods at the K-wave Festival at Lotte Mart. According to Han Jung Hwa, Administrator of South Korea’s Small and Medium Business Administration, the event was part of a series of activities intended to introduce and promote South Korean products in Vietnam. Talking about their participation in exhibitions in Vietnam, South Korean enterprises said besides promoting products, getting access to consumers and exploring the market, they want to seek distributors and importers in Vietnam and expand operations in the ASEAN region. In addition, the Vietnam-South Korea FTA is opening up many opportunities for enterprises as Vietnam will lift import tariffs on 89.9% of products imported from South Korea in 15 years after the agreement becomes effective. Data of South Korea’s government provided last September showed surging exports to Vietnam with a rise of 29.9% in the January-July period regardless of a decline in major markets like China and Japan. Meanwhile, according to the General Department of Customs of Vietnam, Vietnam imported nearly US$21 billion worth of goods from South Korea between January and September, rising by 32.6% year-on-year and making up 16.9% of the country’s total import turnover. Vietnam inks 2-mln-USD deals in Cuban trade fair Vietnam signed several contracts, worth approximately 2 million USD in total, to export its products, mostly home appliances, to Cuba during the 33rd Havana International Fair (FIHAV 2015) from November 2-7. Enterprises from Vietnam and Cuba also gathered in a workshop on the sidelines of the event to discuss their cooperation prospects. On the occasion, Deputy Head of the Ministry of Industry and Trade’s Trade Promotion Agency Bui Thi Thanh An and Director of the Cuban Foreign Trade and Investment Promotion Centre (ProCuba) Roberto Verrier inked a Memorandum of Understanding (MoU) to boost collaboration between the two organisations. Trade between the two countries will be facilitated by their strong political relations, the two governments’ support as well as mutual understanding between their people, An told the Vietnam News Agency (VNA)’s reporter. She said it is a good time for Vietnamese firms to do business in not only Cuba but also the Latin America. The FIHAV 2015 attracted more than 1,000 enterprises from 70 countries and territories worldwide, including 24 from Vietnam. Italy wants to share experience about shoes and clothes with Vietnam Italy, home to the world-famous fashion industry, has announced a plan to help bring advanced production technologies to Vietnam's textile and footwear sectors. A key pillar of the plan is a EUR15-million (US$16.1 million) a package for small and medium businesses which operate in the targeted sectors, says Italian Ambassador Cecilia Piccioni at a press conference to promote trade between the two countries. Businesses in Ho Chi Minh City and nearby Binh Duong and Dong Nai provinces will be given concessional loans with no interest for 24 years, she said.  In another effort, Italian government will help Vietnam establish and run two hi-tech centers for textile and footwear next year, news website Saigon Times Online quoted Bruna Santarelli, chief of the Italian Trade Commission in Vietnam, as saying at a meeting on November 8. The centers will be established at two universities, including Ho Chi Minh City's University of Technology, and equipped with Italian-imported machines and technologies.  Italy will also send experts to train Vietnamese students to make sure that new technologies can be applied on a large scale, according to the report. Trade volume between Vietnam and Italy was estimated at US$4 billion last year, up 33.3% year on year, and is expected to hit US$5 billion next year. Vietnam is now hosting 66 Italian-invested projects with a total capital of nearly US$392 million, according to figures from the Foreign Investment Agency. Textile and footwear are among sectors expected to enjoy the most benefits when Vietnam's key free trade agreements with EU and 11 Pacific Rim nations come into effect. However, local businesses and economists express concerns that, with their current dependence on imported materials from China, Vietnamese textile businesses will possibly fail the rule of origin, thus missing tariff benefits under the Trans-Pacific deal.  They are also worried that Vietnamese footwear businesses will not be able to make best use of tax cuts under the EU trade deal, slated to be signed later this year, as foreign-invested manufacturers account for more than 70% of the country's footwear exports. Rice exports for year remain lacklustre Vietnam exporters shipped 5 million metric tons of rice to foreign markets grossing US$2.079 billion for the ten months leading up to November 2015, according to the Vietnam Food Association (VFA). The VFA said the figures dropped 300,000 metric tons in volume and US$300 million in value compared to the corresponding period in 2014. In just the month of October, The VFA reported overseas consignments jumped by roughly 100,000 metric tons to 687,663 metric tons fetching total revenue of US$269.5 million. The price of 5% broken rice hovered around VND8,000-8,100 per kg during the January-October period, 15% broken rice ranged VND7,800-7,900 per kg and 25% broken rice varied VND7,600-7,700 per kg. TPP help for Ha Noi businesses The authorities in Ha Noi would support enterprises to take full advantage of the Trans-Pacific Partnership (TPP) agreement, but enterprises should improve their production and business abilities, experts said. Ha Noi had attracted the third largest foreign investment in Viet Nam, after HCM City and Ba Ria-Vung Tau Province, Nguyen Gia Phuong, director of the Ha Noi Investment, Trade and Tourism Promotion Centre, said at a seminar on advantages and challenges for Ha Noi when Viet Nam joins the TPP in Ha Noi late last week. According to the Centre, when the nation becomes a TPP member, the capital city will have numerous opportunities to woo many sources of investment, especially direct investment to the high quality service industry, textiles and garments, support industry, and industrial infrastructure, in addition to the agricultural sector. Meanwhile, the city has advantages in terms of the high quality labour force, available production material and developed infrastructure. The demand for office space and hotels is expected to increase so Ha Noi's property sector also has huge opportunities to attract more foreign investment. Via foreign investment projects, the city will also have the opportunity to seek superior technology, management skills and creation of high value-added services. Phuong said Ha Noi would also receive large indirect foreign investment via merger and acquisition activities because it is one of the two cities with the largest number of enterprises in Viet Nam. However, the city would face a challenge in trade and investment, experts said, including strong competition on the home and foreign markets with more complicated technical barriers and stricter standards in food safety. Therefore, Ha Noi should promote co-operation with partners who are TPP members and solve difficulties in tax and customs for enterprises, Phuong said. The city should focus on advertising its key export products to support its enterprises with regard to partners and expansion of the market, he said. In particular, it should reform investment incentive policies to focus on their quality and have specific development policies for some key sectors such as textiles and garments. Nguyen Hung Sinh, deputy director of Ha Noi Agricultural Product Export Company, said the city should receive support in expanding the export market for enterprises by building an international quality management system and implementing efficient trade promotion programmes. Specifically, Ha Noi should develop human resources for development and expansion of the market. Meanwhile, enterprises should conduct thorough market research to usher in reasonable marketing plans. The enterprises should also improve the competitive ability of their export products and the skills of their labour force to take full advantage of the TPP, he said.  Sai Gon Tourist to divest from SGB Tour developer Sai Gon Tourist announced the sale of its entire stake in Sai Gon Bank for Industry and Trade (SGB) in HCM City on Sunday. The company plans to sell more than 10.75 million shares, or a 3.49 per cent stake in the bank at the starting price of VND9,756 (US$0.43) each. The sale auction will be organised on December 2 at the Vietcombank Securities Company. Sai Gon Tourist will earn VND105 billion ($4.7million) if the sale is successful. The tourism company also sold shares of Jetstar Pacific and Tan Son JSC in 2015. Shares of Jetstar Pacific were offered at VND15,000 ($0.66) each and shares of Tan Son JSC were offered at VND196,000 ($8.7) each. HCM City-based SGB has total assets of VND16.5 billion ($733.3 million) and plans to increase that to VND19.3 billion ($857.7 million) in 2015. As the leading tourism company in Viet Nam, Sai Gon Tourist received 2.15 million tourists, reaching revenue of VND16.36 billion ($727 million) in 2014. Under the equitisation plan, state-owned Sai Gon Tourist has to divest its capital in 31 non-core enterprises by this year end.  TPP agreement to have substantial impact on Vietnamese economy The Trans-Pacific Partnership (TPP) agreement, which is awaiting ratification by 12 member countries, will have a substantial impact on the Vietnamese economy once it is implemented, according to economic experts.  They said the TPP deal would have a large amount of influence on the export sector, gross domestic product (GDP), the business environment and the labour market.  Vo Tri Thanh, deputy head of the Central Institute for Economic Management (CIEM), said joining the TPP deal would increase Vietnam’s exports and GDP by 68 billion USD and 36 billion USD, or 28.4 percent and 10.5 percent, respectively, by 2025.  There are three reasons for those increases. First, Vietnam have many big trade partners in the TTP such as the US, Japan and Australia, which have already imported a huge amount of Vietnam’s main commodities, such as garment, shoes, wood products and agro-products. These countries will still have more room for Vietnamese goods when taxes are reduced to zero.  The second reason is the increase in foreign direct investment inflows into Vietnam, which will benefit Vietnam in terms of technology and managerial skills.  Third, joining the TPP deal will force Vietnam to implement commitments that would create a more transparent, appealing, competitive business environment, laying the foundation for more effective distribution of resources.  According to Herb Cochran, general director of AmCham in HCM City, Vietnamese businesses would become partners and quality suppliers for multinational corporations from the US and other countries.  According to Associate Professor Nguyen Anh Tuan, chief editor of the International Research Review at the Diplomatic Academy under the Ministry of Foreign Affairs, although the requirements in the TPP deal are higher than those of the World Trade Organisation (WTO), the TPP will not replace the WTO. It will only complement and promote multilateral trade systems.  Joining the TPP would help Vietnamese consumers, who will have more opportunities to buy imported goods at cheaper prices due to the reduction or removal of tariffs, Tuan said.  From experience gained from joining the WTO after nine years, experts emphasised that TPP opportunities could become challenges if the Government does not have suitable policies and make necessary reforms. Industries currently enjoying protection and enterprises with low competition capacity will be affected the most. Vessel for Russian firm launched in Da Nang A dredger built by the Song Thu Corporation for a Russian firm was launched in central Da Nang city on November 9. The ship of project TSHD 2000, is the first the corporation has built for the Russian client, Rosmorport – a leading company in the field of sea port services, is 80.3m long and has a capacity of 2,800GT. Designed by the Damen Group from the Netherlands, the vessel is built to meet the demand of harsh conditions in northern Russia and other European countries. The corporation, which is a major shipbuilder in Vietnam, has exported 40 vessels, including fast-crew supply ships, rescue ships, salvage tugs and drive tugs, besides patrol boats to the Middle East, South America, Europe and the domestic market, with an annual export volume of 55 million USD. The Da Nang-based company also constructed an oil tanker for an Australian client under a contract last year. Da Nang eyes more investment from Germany A delegation from central Da Nang city led by Deputy Secretary of the municipal Party Committee Vo Cong Tri coordinated with the Vietnamese Business Association (VBA) in Germany to organise a workshop in Berlin on August 8 in the hope of attracting more investment to the city. In his opening remarks, Deputy Secretary Tri briefed participants on the city’s strengths as well as its development over the past few years. Da Nang has shifted its focus on developing trade, tourism, industry and technology, particularly hi-tech, in recent years as it sets to become a metropolis of the country and a hub of Vietnams’ central and Central Highlands regions, he said. Vice Chairman of the municipal People’s Committee Dang Viet Dung stated that tourism, the core industry of the resort city, sees an annual growth of 30 percent in revenue and the number of its tourist arrivals rises over 20 percent per year. Dung urged for greater tourism promotion to further increase the number of visitors, paving the way for the launch of direct flights between Da Nang and the European cities. The city is fostering the development of trade, services and software industry, he added, noting that it needs the help from Vietnamese firms in Germany to bring seafood products to the country and the Europe. During the workshop, Da Nang authorities received many inquiries from participating businesses regarding the city’s policies on tourism and infrastructure development. They also proposed ways to help Da Nang lure more international travellers and bring the city closer to the world. The delegation, accompanied by Trade Counsellor of the Vietnamese Embassy to Germany Nguyen Huu Trang and VBA President Pham Ngoc Ky, later visit the Dong Xuan Centre in Berlin. DAP Fertilizer Production Plant inaugurated in Lao Cai Vietnam National Chemical Group (Vinachem) recently held an inauguration ceremony of Diamon Phosphate (DAP) Fertilizer Production Plant in Lao Cai province. The project was built on an area of 72.4 ha in Tang Loong Industrial Zone, Bao Thang district, Lao Cai province with a total investment of VND5.17 trillion ($231.9 million). The plant uses advanced technology and equipment mainly from US and European countries. It has a production capacity of 330,000 tons of diamon phosphate per year with more than61 per cent of total nutrient content and other intermediate products such as 420,000 tons of concentrated sulfuric acid and 162,000 tons of phosphoric acid. Speaking at the ceremony, Deputy Prime Minister Hoang Trung Hai emphasized that the plant would adapt two thirds (2/3) demand of DAP of the whole country as well as reduce imports. The project is a significant step marking the development of the chemical industry. In the context of international economic integration, the project contributes to increasing the competitiveness of domestic products. The project was kicked off on December 26, 2011 and on June 30, 2015 the operating trial was completed with the full results indicators on capacity, quality, consumption and environmental standards. The project went into production on July 1 and has produced nearly 130,000 tons of DAP. At the ceremony, Mr. Nguyen Van Vinh, Secretary of Party Committee confirmed that will contribute to the agricultural development of Vietnam in Lao Cai province. It also contributes significantly to the sustainable development of the province and creates jobs for local laborers. The provincial authorities also committed to create the best conditions for stable production and efficient operation of the plant. Deputy Prime Minister Hai wanted the company to ensure the long-term effectiveness of the project, and requested the company to enhance effective management and operation as well as safety of the community. Lufthansa Technik, Jetstar Pacific strike engine maintenance deal Lufthansa Technik AG has clinched a comprehensive agreement to overhaul the V2500 engines of Jetstar Pacific Airlines’ Airbus A320 family fleet. A joint statement of Lufthansa Technik and Jetstar Pacific said the contract covers a term of three years and a total of 18 shop load events will be performed during this period. However, both parties did not unveil the contract value. Robin Johansson, Lufthansa Technik Director of Sales for South East Asia and Australia/Pacific, said in the statement that Jetstar Pacific’s selection of Lufthansa Technik underlines the good quality, performance and price of its engine maintenance, repair and overhaul (MRO) product. Jetstar Pacific hoped the cooperation with Lufthansa Technik would bring further support for its aircraft fleet expansion. Jetstar Pacific has grown from five aircraft in 2013 to a dozen aircraft by the end of 2015. The carrier now operates flights on 32 domestic and international routes. The two major shareholders, Vietnam Airlines and Qantas Group, have recently pledged to further invest in Jetstar Pacific as part of a long-term development strategy to develop it into a strong airline having a fleet of up to 30 aircraft by 2020. The member of Jetstar Group is expected to transport 18 million passengers by the end of this year during its operation as a joint venture of low fare airlines, according to the statement. Lufthansa Technik has more than 30 subsidiaries and associates and over 26,000 employees worldwide. The group’s portfolio comprises the entire spectrum of services for commercial aircraft including maintenance, repair, overhaul, modification and conversion, engines and components. Tanzanite to invest in luxury resort in Vietnam Officials at Tanzanite International on November 9 announced plans to inject US$500 million in a 5-star hospitality resort to be located in the southern province of Ba Ria – Vung Tau. “The project will be located on a 37 hectare tract of land along the beach at the Ho Tram Strip, said Tanzanite International Vice President Peter Mach. Mach said it would take 10 years to complete and construction on the US$80 million first phase is scheduled to commence in the second quarter of 2016.  New Far Eastern Apparel builds second factory in Vietnam Taiwan-headquartered Far Eastern Apparel Vietnam Ltd. launched the construction of a 10-hectare garment factory in Bac Dong Phu industrial park in Dong Phu district, the southern province of Binh Phuoc on November 10. The factory, the second facility of the firm in Vietnam , is expected to become operational in February 2016 with 36 production lines, employing more than 4,000 labourers in its first phase. In the second phase from the end of 2016, the number of production lines and employees are both expected to be doubled. Speaking at the ground-breaking ceremony, Nguyen Huy Phong, Deputy Standing Chairman of the Binh Phuoc People’s Committee pledged to create favourable conditions for the firm in implementing the project as schedule. He suggested the provincial vocational training centre coordinate with the company in recruiting workers for the project. The first Far Eastern Apparel factory is located in the neighbouring province of Binh Duong.- VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR