BUSINESS IN BRIEF 28/3 $179 billion needed for medium-term public investment Ministry of Planning and Investment tables estimate for 2016-2020 period. Minister of Planning and Investment Bui Quang Vinh has said that the total medium-term development investment demand for the 2016-2020 period has been estimated at VND4,000 trillion ($179 billion). The estimate is 20.5 times higher than for the previous period and more than double State budget capacity for the period. The ministry is currently reviewing the list of projects to be funded by the State budget in the 2016-2020 period before submitting it to the National Assembly for approval, the Vietnam Law & Legal Forum magazine reported. Minister Vinh affirmed that medium-term investment will be allocated to completed and commissioned projects that have not yet fully received investment capital and those expected to be completed on schedule in the planning period. Medium-term investment capital would also be used as domestic counterpart funds for projects funded with official development assistance (ODA) and soft loans from foreign donors and as the State’s investment in projects to be implemented in the form of public-private partnerships (PPP), he added. Japan prioritizes Vietnam in infrastructure funding   Partnership for Quality Infrastructure initiative for all of Asia with Vietnam to be of particular focus. Japan aims to raise JPY30 trillion ($300 billion) for high quality infrastructure development projects and human resources training in Asian countries, giving top priority to Vietnam. Chairman of the General Council of Japan’s ruling Liberal Democratic Party (LDP), Mr. Nikai Tohishiro, made the statement at the first session of the party’s special committee on the general cooperation strategy for infrastructure development, in Tokyo on March 25. He highlighted the significance of effectively implementing the Partnership for Quality Infrastructure initiative. Ambassador of Vietnam to Japan, H.E. Nguyen Quoc Cuong, said that Vietnam welcomes the initiative, announced by Japanese Prime Minister Shinzo Abe last year. He expressed his hope that the two countries will foster coordination to improve the efficiency of the use of Japan’s official development assistance (ODA) to develop sustainable, high-quality, and highly accessible infrastructure in Vietnam. The ambassador in particular pointed to developing transport and energy infrastructure such as highway, seaport and airport networks and the North-South railway, as well as new-generation thermal power plants and new energy systems meeting high environmental standards. Vietnam hopes Japan will prioritize technology transfer, management capacity, vocational training and high-quality human resources development for Vietnam and Mekong sub-regional countries, contributing to regional connectivity. He added that with a population of over 92 million and an average age of 28, Vietnam is in a “golden population” phase and entering a period of rapid infrastructure development over the next 10-15 years. According to the latest research from the World Bank, with a GDP target of $300 billion by 2020 the total capital demand for infrastructure development in Vietnam could amount to over $100 billion between 2016 and 2020, averaging $25 billion per annum, Ambassador Cuong said. Vietnam will mobilize such capital from various sources, including State-owned enterprises, ODA, and the private sector at home and abroad, to implement infrastructure projects under the form of public-private partnerships (PPP). Compal remains committed to Vinh Phuc project On March 23, representatives of Compal Electronic Group (Compal) and the Vinh Phuc People’s Committee held a working session to discuss implementing Compal’s electronic equipment manufacturing project located in the northern province’s Binh Xuyen district. Bruce Riggs, vice president of Compal, committed to implementing the project on schedule. Accordingly, by April the facility will be equipped with modern machinery imported from China to manufacture smart phones and tablets. The factory is expected to come into operation in September and create hundreds of jobs for skilled Vietnamese workers. The investor proposed the province to provide incentives in human resources, land rentals, as well as corporate income tax. According to a source of the Vinh Phuc People’s Committee, Compal had revised plans for implementing the project, however, the new investment capital as well as the factory’s capacity was not disclosed. In October 2007 Compal was licensed to invest $500 million to build a laptop production plant in Vinh Phuc, which was expected to turn out 24 million laptops per year by 2012, create 35,000 jobs, and attract 50 part suppliers that might bring an additional investment sum of $1 billion to province. However, after starting operational in May 2011, the production facility suspended operations in early 2013 due to the global economic recession. The facility is currently rented by a local company to manufacture carton boxes for Samsung Electronics. In March 2015, Compal planned to resume production. However, the group chose to produce smart phones and tablets upon its return to Vietnam. Bidding race for Big C unit a stress test for Vietnam's retailers Vietnam's retail sector is witnessing an unprecedented, intense race that will potentially shake up the whole market and reveal where local companies may stand amid a strong invasion of foreign investors. Together with Thailand’s Central Group, the Republic Korea's Lotte and Japanese retail conglomerate Aeon, Vietnamese companies Saigon Co-op and Masan Group are seeking to acquire Big C Vietnam. The supermarket chain, owned by French retailer Casino, has 32 locations across the country. The race is being watched very closely by industry insiders as its outcome will shape up the future of the market, where foreign retailers have quickly and consistently strengthened their foothold over the past few years. Saigon Co-op said it has passed the first round of the bidding which was due on March 10. Casino is now reviewing the bids and will choose around five companies to conduct due diligence. Final, fully financed offers are then due around mid-April before a decision is made. Diep Dung, chairman of Saigon Co.op, said his company is keen to buy Casino's wholly owned unit. Acquiring Big C Vietnam is considered a golden opportunity for retailers to expand in one of Southeast Asia's most profitable retail markets, he said. But whether local bidders really stand any chance in this race is a question that some might already have the answer to. “I think foreign retailers have a 70% chance of winning the bid for Big C Vietnam," said Vu Vinh Phu, chairman of the Hanoi Supermarket Association. "It is very difficult for Vietnamese enterprises because of their limited financial capacity,” he said. Phu said Saigon Co-op, Vietnam’s largest retailer, had a registered capital of only around VND1 trillion (US$45.5 million). Big C Vietnam has been valued by bankers at between US$800 million and US$1 billion. Saigon Co-op could be a strong contender if only a small stake was involved, he added. Casino’s Vietnam operations may be sold to Thai retailers, who are keen to expand further in Southeast Asia, and have deep pockets, Phu said. Casino sold Thai hypermarket operator Big C Supercenter for EUR3.1 billion to Thailand's TCC Group last month. It said in January that it looked to mobilize four billion euros via selling operations in Colombia, Thailand and Vietnam. Many local retailers are struggling to fight back strong foreign competitors, who have the upper hand thanks to their financial strength, management experience and cheap global supply chains. In fact, many retailers have been taken over by foreign partners, while some others, like Intimex and Hapro, have closed several of their stores. For foreign investors, the market is appealing thanks to a robust economy and increasing spending power. Japanese retail giant Aeon Mall is planning to open one more megastore in Vietnam at an estimated cost of around US$200 million in 2019. Since its arrival in Vietnam in January 2014, Aeon has opened three malls in Hanoi, Ho Chi Minh City and the southern province of Binh Duong. It described the country as its second most important market in Southeast Asia after Malaysia. Aeon reportedly acquired stakes of 30% in Fivimart, a local retailer with 20 stores in Hanoi, last year, and 49% in Citimart, which has 27 stores mostly in Ho Chi Minh City. Lotte Group said last year that it planned to open 60 supermarkets in Vietnam by 2020. The Korean retail giant also runs Lotteria fast-food chains, shopping malls, hotels and cinemas in the country. TCC in January completed the purchase of Metro AG’s Cash & Carry wholesale business in Vietnam for US$704.1 million. But some local players believe the market is still big enough for more competition. “Competition is in every market. We don’t worry about it,” CEO Tran Kinh Doanh of top mobile retailer The Gioi Di Dong (Mobile World) said. “The market is large, and still has a lot of room for growth.” Although there are many companies that have narrowed their business after failing to compete in the market, some others have gained success, Doanh said. Vietnam posted retail sales of more than VND2.46 trillion (US$108.8 billion) in 2015, up 10.6% over the previous year, according to the General Statistics Office. Experts say modern retail formats such as shopping malls, supermarkets and hypermarkets will play a crucial role in Vietnam’s future retail growth. The modern retail channel now accounts for around 25% of sales in Vietnam, representing a latent market opportunity for investors. Saigon Co-op, which runs the popular chain Co.opmart, and Vingroup, which owns convenience stores, supermarkets and shopping malls, are now the two biggest local names in the sector. From 2013 when it broke into the retail market to late last year, Vingroup opened 125 supermarkets and convenience stores, besides 12 shopping malls around the country. With a population of more than 93 million, Vietnam now houses 724 supermarkets, 132 shopping malls and hundreds of convenience stores, according to the Ministry of Industry and Trade. Dinh Thi My Loan, general secretary of the Association of Vietnam Retailers, said local retailers, with their deep understanding of local consumer habits, could compete well with foreign rivals in the domestic market. What they need is more support from the state in terms of reasonable interest rates and a skilled talent pool, she said. Many local firms lost prime locations to foreign foreign competitors because they lacked both the money and the skills to negotiate, Loan said. In Vietnam spending on retail space often accounts for 30%-40% of the total investment. Former chairman of Saigon Co-op Nguyen Ngoc Hoa said a way out is cooperation. “Local businesses will not be able to grow in such a competitive market unless they work together and have smart business strategies," Hoa said. Vietnamese food firms exhibit in China Two Vietnamese businesses have registered to exhibit their products at SIAL China, Asia’s largest food and beverage show to be held on May 5-7. The Long An Food Processing Export JSC and Rita Food & Drink Co Ltd will take part in the 17th edition of SIAL China 2016 at the Shanghai New International Expo Center. About eight other Vietnamese companies have shown interest in attending as well. The expo is expected to welcome 66,000 visitors and over 2,900 exhibitors from 65 countries, according to a representative of the organiser Comexposium. The exhibition will showcase 21 kinds of products ranging from canned and preserved food to fruit, vegetable and seafood leading brands. They include Helios, Spain’s jam market leader, Ceremony Gida, Turkey’s leader in chewing gum and Super Group, well-known in Singapore with Asian Coffee, among others. SIAL China 2016 will see the first ever milk- and milk-based product zone where Belgium and Germany will introduce their prestigious products. Last year, 10 Vietnamese companies took part in the event displaying their products of rice, beans, fruit and snacks. Thirty-four Vietnamese entrepreneurs visited the fair last year. PV Power, APZON sign partnership agreement PetroVietnam Power Corporation (PV Power) and IT service provider APZON has recently held a signing ceremony to celebrate the commencement of their project. PV Power has chosen the business management software SAP Business One provided by APZON to manage its critical business functions including sales, distribution and financials, all in a single integrated system. With the software, PV Power expects to mobilise resources and operate efficiently. Therefore, the company can reduce management costs and achieve higher productivity. "SAP Business One helps us get important information about financial management quickly and accurately, therefore, we can be confident whenever making business decisions," PV Power Chief Accountant Ha Thi Minh Nguyet, also manager of the co-operation project, said. APZON Chairman Hoang Thanh Tung said APZON was honoured to co-operate with PV Power in applying SAP Business One. "We believe that SAP Business One would effectively support the business management of firms and meet the mandatory requirements about finance management and accounting as prescribed by Vietnamese law," Tung said. APZON is an IT service provider with more than 10 years of experiences providing solutions to information technology, as well as consulting services for clients in many sectors such as telecommunications, retail, distribution, and production, in addition to construction, manufacturing and service units of the state. PV Power is a member of the PetroVietnam Oil and Gas Group (PVN), the leading national oil and gas group. PV Power General Director Nguyen Xuan Hoa said the company targets a total power output of 21 billion kWh, a total revenue of VND29.4 trillion (US$1.3 billion), a pre-tax profit of VND680 billion and an after-tax profit VND600 billion in 2016. Foreign firms say still plagued by red tape in Vietnam’s Dong Nai Representatives of many foreign-invested companies in the southern province of Dong Nai did not pull any punches in a meeting with local authorities on March 25, when they were asked to recall how red tape has marred their operations. Hundreds of businesses attending the meeting were encouraged to tell the truth as authorities are “willing to listen,” said Tran Van Vinh, deputy chairman of the provincial administration. “We want to know their problems to resolve them, as Dong Nai can only develop if the foreign businesses have healthy operations and profits,” he said. Nguyen Cong Doan, who represents the managers at the Japan’s DaiKan Co. at Amata Industrial Park, said the company had fallen victim to thieves many times but police did not seem to help. “We have reported to the police and the management board of the industrial park four times,” Doan said. “We had been waiting for a long time when they told us that the investigation was expired and the case was suspended, which put me in huge shock.” The representative of a plant protection drug producer said the company had to take a course on chemical safety as many as three times a year. “Last year we also had to receive as many as ten different groups of inspectors,” he said. Other foreign firms complained about red tape, corruption, poorly developed traffic infrastructure and late tax refund. In conclusion, Vinh ordered relevant agencies to take complaints by foreign businesses seriously and resolve their problems as soon as possible. He also pledged to continue administrative procedure simplification to save businesses from repeated inspection and red tape. Workshop seeks ways for stronger economy Limitations in growth model reform, inadequate policies towards businesses and loose connectivity between domestic and foreign enterprises are among the causes eroding the attractiveness of Vietnam’s investment climate. It is a must to assess Vietnam’s competitive edge in comparison with global competitiveness, and devise solutions to raise the national index, Head of the Party Central Committee’s Economic Commission Vuong Dinh Hue.said at an international workshop on March 26. Besides, the country should evaluate the competitive edge of local businesses as well as their products against the national backdrop, he added. The official suggested Vietnam create solutions and institutions to attract the world’s venture capital funds in order to support startups, especially small and medium-sized, and private enterprises, explaining that apart from opportunities, the startups are expected to face a string of risks. At the same time, the country should put in place specific solutions to help local firms better connect with foreign direct investment (FDI) partners and take part in the global value chain, he said. Other delegates at the workshop emphasised the need for Vietnam to bring into full play opportunities afforded by the Trans-Pacific Partnership (TPP) agreement to which it is a member. Administrative reform decides the presence of new waves of investments and startups, said Vu Tien Loc, Chairman of the Vietnam Chamber of Industry and Trade. He proposed the Government create an optimal and equal institutional environment in tandem with rolling out measures and policies in support of SMEs. Businesses themselves should stick to those creations, he added. World Bank Country Director to Vietnam Victoria Kwakwa said red tape in procedures, bureaucracy and corruption are the roots of a sluggish economy. A transparent banking system and well-regulated financial market are necessary for institutional streamlining and infrastructure development which can ensure economic growth, she added. The World Bank official also suggested Vietnam develop skillful labourers who can easily adapt to economic changes. Tax authorities expect increased revenue Tax authorities anticipate collecting at least VNĐ680 billion (US$30.4 billion) in the remaining ten months of 2016, a 19 per cent increase over the same period last year and seen as a sign that the Vietnamese economy was continuing to recover. Yet, collecting these taxes is expected to require great efforts by tax agencies, since global oil prices remain low and many regions face severe droughts and saltwater intrusions, Nguyễn Đại Trí, Deputy General Director of the General Department of Taxation, said at yesterday’s press conference. According to Vũ Hồng Long, Director of the Department for Tax Revenue Estimation, every drop of $1 in oil prices results in a loss of VNĐ1.5 trillion to the State budget. He further said, if oil prices dropped to $30 per barrel, budget revenues could decrease by VNĐ45 trillion, compared to the current estimate. Long noted that the department created plans to cope with the possibility of further drops in oil, even to $20 per barrel, to ensure the budget remains balanced. Although oil prices were unpredictable and tax revenues from crude oil accounted for a modest percentage in the central budget, Long said that revenues from oil could not be eliminated from budget revenue estimates. Regarding the option of temporary closings of oil fields in case oil prices continued to fall below production costs, Nguyễn Văn Phụng, Director of the Large Taxpayers Office, said this action would demand careful consideration. Sometimes, firms should accept short-term losses, since the resumption of operations of oil fields could be very costly. Phụng noted that the Government would not provide compensation for losses sustained by high-cost oil companies. Phụng also said that plunging oil prices were not all bad news, as firms could benefit from lower fuel prices by earning higher profits. This would also mean higher collections of value added taxes and corporate income taxes for local budgets. Additionally,  taxation general department statistics revealed that tax revenues for the State budget reached VNĐ145.75 trillion in the first two months of this year, equivalent to 17.4 per cent of the estimate for the full year and rising by 6.1 per cent over the same period last year. Meanwhile, collections from crude oil were VNĐ5.77 trillion, equal to only 43.1 per cent from the same period last year. Oil prices hovered around $30 per barrel in the two-month period, while the price for budget estimates was set at $60 per barrel. The taxation department said that in the remaining months of this year, it would hasten administrative reforms and the implementation of e-tax filing and payments, as part of a wider effort to improve the business climate and remove difficulties for firms. Hà Nội needs more BTS sharing Telecom companies should further jointly develop and use the completed telecommunications infrastructure such as base transceiver stations (BTS) and broadcast columns for equipment installation and coverage in Hà Nội area. Nguyễn Xuân Quang, deputy director of the Hà Nội Department of Information and Communications, said that currently the sharing of BTS remain low, accounting for just 19 per cent. Therefore, Hà Nội should look for solutions to overcome this existing problem. Quang made the comment during a meeting to review the Law on Telecommunications and Law on Radio Frequencies. He said that the city still faces barriers in encouraging telecom firms to share their network infrastructure. Although the city’s Department of Information and Communications had conducted numerous conferences to help telecom companies reach a consensus for common use of network infrastructure, it had failed to reach a consensus. Quang attributed the negligible sharing of network infrastructure to the lack of sufficient and strict regulations that could compel them to do so. In addition, a common urban infrastructure network had not yet become a requirement for the city’s development. Typically, the infrastructure network in high-rise buildings still lacked standard regulations thus causing difficulties for contractors in implementing their projects. Quang said there was also no standardisation in the use of infrastructure network. Some were using optical fibre transmission lines, while others were still using copper cable transmission lines. To encourage telecom firms to share the network infrastructure, the city administration needed to change the policy on the schedule to retrieve capital investment. It could be extended to between 30 years and 50 years, instead of 10 years to 15 years, currently. This move will help minimise the cost of hiring infrastructure and thus will create favourable conditions for telecom businesses to join in. Some industry insiders also proposed that the Ministry of Information and Communications needs to work with the Ministry of Construction to soon issue a joint circular that will specifically stipulate the issuance of construction certificates to telecom network projects. On the other hand, the ministry also needs to study and add more standards on the construction of telecom equipment to be in sync with reality. Quang said that in time to come, the department will continue to assist the city administration in offering incentives for telecom businesses to invest and build a telecom infrastructure network. In 2014, the city was home to more than 5,700 BTS of all telecoms providers. Of them, 1,200 BTS share infrastructure network such as broadcast columns and antenna towers. Transparency key in bidding Most domestic bidders continue to lack confidence in the transparent competition when bidding on projects. Of particular concern was the transparency of bidding packages related to construction and infrastructure projects, such as designated bidding packages and the possible biased selection of bidders. Also, the target of selecting bidders is quite vague. Nguyễn Văn Đệ, chairman of Thanh Hoa Entrepreneur Association, said many businesses do not voice their concerns about the unfair bidding mechanism, as they are afraid of losing their financing and receiving negative ratings on their business performance. Đệ said this situation was very common, not only in central Thanh Hóa Province, but throughout the country. Such problems are resulting in businesses losing confidence in efforts to revise the bidding mechanism by the Government and relevant agencies, in an attempt to improve the business climate. Despite making great efforts to enhance transparency and increase professional expertise in the bidding process, there are existing problems in Bidding Law 2013, such as its remaining inconsistent with reality, in its failing to follow market-oriented mechanisms and encourage healthy competition. Ninh Viết Định, from Electricity of Việt Nam (EVN), said bidders always attached importance to healthy competition in bidding. Though bidding often fell below their expectations, thus resulting in frequent conflicts in bidding. Định added that strict inspections should be made to control foreign bidders. The law should spell out clear regulations on joint ventures with local bidders, or requirements to use local sub-contractors. Further, the relationship between bidders and different contractors in a bidding process needs to be conducted in a transparent manner to avoid conflict, he said. According to Định, the State stipulated that transparent bidding packages must be made available through online websites and on paper to ensure transparency and encourage using electronic methods in bidding. Yet, it was noted that human interaction remains the most important factor. Lê Minh Hải, general director of Đà Nẵng – Miền Trung Investment JSC, said in many cases bidders have to deal with difficulties in payments, and even winning bidders fail to carry out projects on schedule due to inflexible regulations found in the existing Bidding Law. As a result, such problems cause additional difficulties for bidders. Hải noted that the Bidding Law in 2013 needs to ensure the principles of transparency, competition and efficiency concerning bidding invitation announcements, bidding documents and bidding procedures. HCM City aims to stabilise prices The HCM City People’s Committee has approved a price stabilisation campaign that will go on until March 2017. The prices of essential foods and foodstuff, school equipment, dairy products, and medicines will remain steady for a year starting on April 1, with 86 companies registering to take part, one more than last year, according to the Department of Industry and Trade. Forty of them make food and foodstuff, with six joining what has become an annual programme for the first time. Four companies that took part last time have withdrawn. The programme for school supplies has attracted 15 firms, while 14 and five have registered respectively for the medicine and dairy programmes. Ten banks have signed up, and they will lend VND12.9 trillion (US$575.47 million) to the participating companies. This represents an increase of VND1.05 trillion ($47.08 million) over last year, the department said. Of the sum, VND9.3 trillion ($404.3 million) will be short-term working capital loans for 12 months at an interest rate of 5-8 per cent. The remaining VND3.6 trillion will be medium- and long-term loans for participating firms to invest in production facilities, improve technologies and develop distribution systems, and the interest rate will be 8.5-9 per cent. The participating companies have been instructed to increase supply by 30-35 per cent this year and ensure their products meet 25-30 per cent of market demand, rising to 30-40 per cent during Tết (Lunar New Year) in early 2017. School equipment suppliers have been told to increase supply by 15-30 per cent and meet 35-40 per cent of market demand. The diary products to be supplied will be 377.5 tonnes a month, 8.37 per cent higher than last year. Pharmaceutical companies have been instructed to meet 50 per cent of demand. According to the People’s Committee, the programme has benefited both consumers and producers in the last 14 years, and more and more firms are signing up. They have contributed greatly to developing distribution channels for Vietnamese products and the “Vietnamese people give priority to using Vietnamese goods” campaign, and to controlling inflation and ensuring social security, it said. Iran firms keen to invest in Vietnamese market Many Iranian firms in the industry and mining sectors are expressing interest in the Vietnamese market and wish to expand trade between the two nations. During a recent State visit to Iran, a senior delegation led by President Truong Tan Sang held a meeting with local industrial and mining businesses. Head of the Iranian business delegation, Mohsen Esmaeilzadeh, who is the President of Orhan Aras Trading and Development, spole of the potential as well as the capability of the host firms in the industry and mining sector. Meanwhile, Head of the Tabriz province Chamber of Commerce, Industry, Mines and Agriculture Samad Hassanzadeh said the locality is willing to support trade relations as well as other economic links between the two nations. The locality is willing to join construction, irrigation and traffic projects with Vietnam, Samad said, adding that it will ship its rugs and leather products to Vietnam. The province also highlighted the potential for bilateral cooperation in education, health care and environmental services. Hossein Ghannadi from the Pasargad Oil Company said with its annual output of 3.5 million tonnes of bitumen, it will establish a representative office in Vietnam. Mohammad Reza Hajipour, Director of the Markazi provincial Department of Industries, Mines and Trade described the meeting as a historical milestone in the two nations’ trade relations, while introducing the province’s potential for petroleum, aluminium and chemical products. Mirabolfazl Hassani, CEO and Director of many international industry and trade groups expressed his wish to support Vietnamese construction companies in terms of construction and material provision. For his part, President Truong Tan Sang expressed his pleasure at the open and friendly exchange, where he reiterated that the two nations’ leaders shared the view of building fruitful economic and trade relations. The President called on the host trade delegates to set up representative offices and branches in Hanoi and other Vietnamese localities to foster their investment, trade and industry connections with Vietnam. He also suggested the host firms provide specific and accurate information for Vietnamese partners in terms of import taxation and fees, among other local regulations. The President also suggested the possibility of establishing a direct flight route between the two nations to facilitate bilateral trade exchange. The Head of the host business delegation pledged to connect the two nations’ Chambers of Commerce and Industry, adding that a representative office of the Iranian Chamber will be established in Vietnam. Vingroup opens first shopping mall in Central Highlands People in the Central Highlands region will have the opportunity to enjoy a new shopping experience after Vingroup – Vietnam’s most reputable real estate developer opened Vincom Plaza Buon Ma Thuot Trading Centre, the first of its kind in the region, on March 26. Covering an area of nearly 11,000 square metres in the centre of Buon Ma Thuot city, Dak Lak province, the trading centre was designed in a grand modern style. It has six floors and one basement for parking lot. Being the largest shopping and entertainment complex in the province, the mall offers its customers a wide selection of domestic and international brands through modern retail systems. In addition, six state-of-the-art cinemas screening 2D and 3D movies are the highlight of the entertainment complex. On the same day, Vingroup’s Vincom Plaza Le Van Viet also opened for business in Ho Chi Minh City. Founded in Ukraine in 1993 under the name of Technocom, Vingroup has become Vietnam’s leading private sector real estate company. It comprises such subsidiaries as Vincom for high-end shopping centres, Vinhomes for residential properties, Vinpearl for tourism and recreational facilities and Vimec for hospitals. The firm was twice named winner of the “Best Developer Vietnam” category at the annual South East Asia Property Awards in 2013 and 2014. Recently, together with Vinamilk, Vietcombank, FPT Corporation and Petrovietnam Gas Joint Stock Corporation, the group made it into the Nikkei Asian Review’s Asia 300 list, which names Asia’s most dynamic companies. Last year, Vingroup opened 10 shopping malls across the country and the ambitious company plans to make nearly 50 trading centres operational in 2016, aiming to nudge international-standard products and services, as well as modern consumption, ever closer to Vietnamese people.- Workshop seeks ways for stronger economy Limitations in growth model reform, inadequate policies towards businesses and loose connectivity between domestic and foreign enterprises are among the causes eroding the attractiveness of Vietnam’s investment climate, according to head of the Party Central Committee’s Economic Commission Vuong Dinh Hue. It is a must to assess Vietnam’s competitive edge in comparison with global competitiveness, and devise solutions to raise the national index, Hue said at an international workshop on March 26. Besides, the country should evaluate the competitive edge of local businesses as well as their products against the national backdrop, he added. The official suggested Vietnam create solutions and institutions to attract the world’s venture capital funds in order to support startups, especially small and medium-sized, and private enterprises, explaining that apart from opportunities, the startups are expected to face a string of risks. At the same time, the country should put in place specific solutions to help local firms better connect with foreign direct investment (FDI) partners and take part in the global value chain, he said. Other delegates at the workshop emphasised the need for Vietnam to bring into full play opportunities afforded by the Trans-Pacific Partnership (TPP) agreement to which it is a member. Administrative reform decides the presence of new waves of investments and startups, said Vu Tien Loc, Chairman of the Vietnam Chamber of Industry and Trade. He proposed the Government create an optimal and equal institutional environment in tandem with rolling out measures and policies in support of SMEs. Businesses themselves should stick to those creations, he added. World Bank Country Director to Vietnam Victoria Kwakwa said red tape in procedures, bureaucracy and corruption are the roots of a sluggish economy. A transparent banking system and well-regulated financial market are necessary for institutional streamlining and infrastructure development which can ensure economic growth, she added. The World Bank official also suggested Vietnam develop skillful labourers who can easily adapt to economic changes. Agro-fishery-forestry exports pick up 3.1 percent Agro-fishery-forestry exports were estimated at 6.73 billion USD in Quarter 1, a year-on year increase of 3.1 percent, according to the Ministry of Agriculture and Rural Development. During the period, the country shipped some 1.59 million tonnes of rice to foreign countries and brought home 692 million USD, up 41.6 percent in volume and 40.8 percent in revenue against the same time last year. Indonesia emerged as Vietnam’s largest rice importer with 31.42 percent of market share, followed by China with 17.15 percent. Strong growth markets include the Philippines and Malaysia while a sharp fall in rice consumption was recorded in Ivory Coast and Singapore. The value of aquatic exports in the quarter was calculated at nearly 1.36 billion USD, rising 1.7 percent from 2015. Accounting for 51.84 percent of the market share; the US, Japan and China remained Vietnam’s largest seafood consumption markets. Likewise, overseas shipments of 479,000 tonnes of coffee earned 808 million USD, annual gains of 30.2 percent and 5.7 percent in volume and value, respectively. In stark contrast, the volume of tea exports declined by 5 percent to 23,000 tonnes, compared to the same time in 2015. As such, its revenue was down 10.2 percent to 35 million USD. The country also splashed out 5.31 billion USD on agro-forestry-fishery imports in Quarter 1, down 3.9 percent against the same period last year. Imports of major products were 3.77 billion USD, a year-on-year drop of 9.7 percent. Vietnam records GDP growth slowdown in Q1 Gross domestic product (GDP) expanded by 5.46 percent in the first quarter, slower than the 6.12 percent during the same period last year, according to the General Statistics Office (GSO). GSO Director General Nguyen Bich Lam said there were signs of GDP stagnation although Q1 is the first quarter to implement the socio-economic development plan for 2016 – 2020. He delineated that the increase in the value of the agro-forestry-fisheries sectors is equivalent to only 98.77 percent of that a year earlier. It is also lower than recent years’ corresponding figures. Rice output in the Mekong Delta – the rice hub of Vietnam – dropped by 6.2 percent, or about 700,000 tonnes, year on year while the winter crop yield in the north was also low. The value of the industrial and construction industries rose by only 6.72 percent, compared to 8.74 percent recorded in Q1 last year, Lam noted. Partly impacted by global economic difficulties, exports also grew at a slow pace (4.1 percent), he said, adding that the shipments of crude oil – a major hard currency earner – nosedived 52.8 percent during the three-month period through to March. At the press conference in Hanoi, the official also pointed out some economic highlights such as the 6.13 percent hike in the services sector’s value, the highest since the first quarter of 2012. The consumer price index in March augmented 0.57 percent month on month and 1.69 percent year on year. It increased by 1.25 percent annually for the quarter. Drought, saltwater intrusion and unpredictable weather patterns will pose major challenges to Vietnam’s economy through the rest of 2016. Additionally, crude oil prices, which are expected to remain low, will have certain impacts on the domestic economy – like a decline in the State budget revenue from crude oil. On the other hand, low oil prices will also help cut down input expenses for almost all economic sectors and subsequently boost overall GDP, he added. Southern rice output drops over drought, saline intrusion Despite a larger scale of plantation, winter-spring rice crops grown in the south are estimated to yield just over 11.36 million tonnes of rice, a decrease of 190,000 tonnes compared with last year. Le Thanh Tung, an official from the Department of Plant Cultivation under the Ministry of Agricultural and Rural Development, reported the figures at a conference in the Mekong Delta province of Tien Giang ’s My Tho city on March 25. Tung said the dent in production stemmed from widespread and serious drought and saltwater intrusion across the region. In the Mekong Delta, severe weather has damaged nearly 160,000 hectares of rice since the end of last year. According to Tung, around 1 million out of 1.66 million hectares of regional winter-spring fields have been harvested so far, with another 500,000 hectares of rice ripening. The delta plans to plant rice crops on more than 1.6 million and 900,000 hectares of fields in the summer-autumn and autumn-winter seasons, respectively. Respective expected outputs are 9.28 million and 5 million tonnes of rice, both higher than last year. To realise these targets, Deputy Ministry of Agricultural and Rural Development Le Quoc Doanh, who chaired the conference, underscored improving irrigation systems, providing timely weather forecasts and overhauling local agricultural production. He said coastal areas and the Mekong Delta, which are prone to natural disasters, need to devise relevant farming strategies. Thai trade fair opens in HCM City More than 120 businesses from Thailand will be promoting their range of products at a trade fair to be held in Ho Chi Minh City on March 25-27. Vietnamese consumers should find a range of made-in-Thailand products at the event such as food, beverages, clothes, footwear and home appliances. Visitors will also be treated to traditional Thai art and cultural performances. Consul General in the city Panpimon Suwannapongs said the fair means to highlight the close-knit and comprehensive relations between Vietnam and Thailand in recent years. All profits collected from Thai pavilions will be sent to the city’s fund for poor patients, she added. Vice Chairman of the municipal People’s Committee Le Van Khoa said the rapport between Thailand and Vietnam, and particularly with HCM City, has been constantly developing across the fields of economics, trade, culture, gastronomy and tourism. He described the fair as a practical event to celebrate the 40th founding anniversary of the two countries’ diplomatic ties, which enables Vietnamese and Thai businesses to seek partners and investment opportunities. Vietnam and Thailand established diplomatic ties in 1976. Vietnam is the fourth biggest trade partner of Thailand in ASEAN after Malaysia, Singapore and Indonesia. Bilateral trade is expected to top 20 billion USD in 2020. Da Nang sets ambitious tourism goal Da Nang is striving to build itself into a resort paradise and a safe, friendly destination, heard a forum in the central city on March 25. Deputy Director of the municipal Department of Culture, Sports and Tourism Tran Chi Cuong said the city aims to turn tourism into a spearhead of the local economy from 2016 to 2020. The city will strive to create unique and highly competitive tourism products in line with cultural values and environmental protection. It sets a target to draw in 8 million tourists, including 2 million foreigners, and rake in 27.4 trillion VND (1.23 billion USD) in revenue by 2020, he added. Apart from developing local tourism brand names, authorities will invest in maritime tourism services and high-end resorts, which are highly competitive in the region and beyond. Additionally, the city will diversify services at the Ba Na – Suoi Mo tourism area, one of its famous interesting places that houses Ba Na Mountain, 1,487m high above sea level, and Suoi Mo Stream lying at its feet. Da Nang plans to put into operation the Ba Na golf course and Than Tai Mountain hot spring resort, as well as develop tourism products at Son Tra Peninsula and Hai Van Pass. It is moving to expand waterway tourism, raise local awareness about environmental protection and promote a code of conduct on tourism activities. Chairman of the Da Nang Travel Association Cao Tri Dung said he hopes the city will create a healthy competitive environment for businesses. He suggested quickly improving infrastructure at Da Nang Airport, enhancing its capacity, coordinating with central Quang Nam province to make the Dak Ok border gate an international one, and completing the highway system linking Da Nang with adjacent provinces. It is necessary to connect local tourism products with that of Quang Nam and Thua Thien – Hue, he said. Vietnam Tourism Company (VITOURS) Deputy Director Le Tan Thanh Tung proposed measures to draw visitors during off-season from September to February. He suggested exempting visa fees and organising cultural and sport events. Vietnamese property market to thrive in 2016 Savills Vietnam, the largest property company in the country, forecasts that the real estate market will be on the upswing in 2016, thanks to improved economic conditions, monetary policies and international trade agreements. Savills Hanoi Director Matthew Powell said the investors have paid attention to property products’ designs, landscapes, amenities and management services, which helps increase the number of high-quality projects and enhance customers’ faith. The Savills Property Price Index (SPPI) showed that the absorption rate for real estate commodities in Hanoi was 40 percent in the first quarter, 2 percentage points over the same period last year. Some 6,440 apartments were sold at the end of 2015, a year-on-year increase of 86 percent due to improvement in buyers’ confidence. Savills experts said rapid urbanisation and decrease in family size will boost demand for real estate products in Vietnam in 2016. While economic fluctuation can pose risks in the short term, in the long term housing demand of the middle-income group is expected to rise. A line of high-end property products will be released for sales in the coming time, thanks to real estate commodities’ abundant supply and high absorption rates. Prominent projects in Hanoi include Watermark Apartment Hanoi on Lac Long Quan Street west of West Lake and the Green Pearl complex on Minh Khai Street . Meanwhile, in the central region numerous resorts and residential real estate projects have cropped up. Ocean Apartments was built within Da Nang Beach Resort complex on Son Tra Dien Ngoc Street and Naman Residence was built on Truong Sa Road in Da Nang. Laguana Lang Co in Thua Thien-Hue is the largest luxury integrated beach resort in the region. Renault Vietnam opens new 3S dealer in Dak Lak Renault Vietnam opened a 3S dealer in Buon Ma Thuot city in the Central Highlands province of Dak Lak on March 25, raising the total number of its agents in the country to 7. Operating under global 3S standards, the new dealership can meet all requirements for equipment or facilities for sales and after sales services. The company opened a dealership in Gia Lai province in December 2015, the first in the Central Highlands, helping customers in the region access Renault car models and services. There are six Renault models available in Vietnam : Koleos, Latitude, Megane, Duster, Sandero and Logan . The company plans to open more dealerships nationwide and present new car models to meet local demand. Groupe Renault is a French multinational automobile manufacturer established in 1899. According to the Organization Internationale des Constructerurs d’Automobiles, in 2013 Renault was the 11th biggest automaker in the world by production volume. Nestlé Vietnam builds 70-mln-USD plant in Hung Yen Swiss food giant Nestlé Vietnam is building a 70-million-USD factory in the northern province of Hung Yen to expand its food and beverage product chains in the northern region and the country at large. The latest project brings Nestlé’s total investment in Vietnam so far to 520 million USD from the initial 24 million USD when it first arrived in the country in 1995. Director of Nestlé Vietnam Ganesan Ampalavanar said the plant, the company’s sixth factory in the country and second in the province, is expected to start operations in 2017. It is also part of the company’s development strategy plan to strengthen its leading position for selling nutritious beverage products. The company has used the latest technology to ensure product quality and diminish its impacts on the environment – particularly renewable water resources. The firm has taken part in several substantial socio-economic development programmes in the country such as the Private-Public- Partnership (PPP) project on agriculture under the sustainable coffee development scheme and projects on reducing nutritional deficiency among Vietnamese children. The five operating factories of Nestlé Vietnam provide jobs for about 2,000 workers. The facility currently under construction in Hung Yen will employ around 300 workers when it becomes operational in 2017. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR