BUSINESS IN BRIEF 4/7 Republic of Korea tops foreign investment in first half of 2016 The Republic of Korea was the largest foreign investor in Vietnam in the first six months of the year at US$3.99 billion, equivalent to 35.37% of total direct foreign investment. According to the Foreign Investment Agency, Japan and Singapore came second and third with US$1.229 billion and US$1.129 billion poured into Vietnam respectively. In the first six months of 2016, total new and additional pledges were US$11.284 billion, up 105.4% over the same period last year, while disbursement rose 15.1% to reach US$7.25 billion. Foreign investment was poured into 19 sectors, in which manufacturing remained the most attractive, drawing more than US$8 billion, equivalent to 71.4% of total pledges. Real estate came second with US$604.8 million, while sci-tech ranked third with US$562.3 million. Major projects granted licences in the first half of 2016 were LG’s display manufacturing facility in Hai Phong, Samsung’s research and development centre in Hanoi and a wind farm in Tra Vinh province. Bac Giang exports nearly 63,000 tonnes of lychees to China Bac Giang province had exported nearly 63,000 tonnes of lychees to the Chinese market through border gates in the northern mountainous provinces of Lang Son, Lao Cai and Ha Giang as of June 30. Accordingly, the amount of lychees exported through Lang Son’s border gates reached more than 39,000 tonnes priced from VND35,000 to VND50,000 per kilogramme. Over 20,000 tonnes were shipped through Lao Cai’s border gates with prices ranging from VND35,000 to VND45,000 per kilogramme; meanwhile nearly 3,600 tonnes went through the border gates in Ha Giang province. In addition, more than 20 tonnes of lychee were shipped to other markets including 10 tonnes to Malaysia, one tonne to the United States and 9.2 tonnes to Australia. According to the statistics of Bac Giang provincial Department of Industry and Trade, the total amount of consumed lychee around the province was estimated at more than 92,000 tonnnes, accounting for over 70% of total output. During the ‘Luc Ngan-Bac Giang Lychee Week’ in Hanoi from June 24-28, supermarkets in the capital sold more than 34 tonnes of lychee. All lychees were produced in accordance with VietGAP and GlobalGAP standards to be exported to demanding markets such as Europe and the US. Luc Ngan lychees will be sold at the Big C hypermarket chain around the country from July 1. Currently, thanks to customs clearance at border gates, it takes only ten minutes for enterprises to export a shipment of lychees. Mekong Delta economic forum to be held in Hau Giang The Mekong Delta Economic Cooperation Forum will take place in Vi Thanh city, in the Mekong Delta province of Hau Giang from July 11-15. Themed “Mekong Delta – active integration and sustainable development,” the forum will feature a series of seminars and discussions, Director of the provincial Department of Information and Communications Pham Van Tuu told a press conference in the locality on June 30. Nguyen Huu Tinh, head of the provincial Commission for Information and Education, said the event aims to promote connectivity in manufacturing, processing, consumption and export of farm produce, particularly the region’s key products. It is also expected to attract more investment at home and abroad, especially in agriculture and rural areas, he said. On the occasion, the forum is due to announce a social welfare fund and will honour scientists, researchers, businesses and farmers who have contributed to Vietnam’s farming and rural areas. Marquardt to build auto parts factory in Da Nang Marquardt Group of Germany expects to invest US$35-50 million to build an auto parts manufacturing factory in central Da Nang City. The information was released by Vice President Asia at Marquardt Group, Peter Schaumann, during a meeting with Da Nang authorities on June 28. Construction of the plant will be carried out over two to three years and employ some 600 workers, 200 of them being engineers and high-end technicians. Deputy Chairman of Da Nang municipal People's Committee Tran Van Mien said the city had sufficient infrastructure, such as industrial parks and high-tech zones, which have been systematically developed and is prepared to receive new investors. Mien noted that Da Nang has always opened its door to large business groups, especially investors from Germany. Earlier, the Marquardt Group worked with representatives of local departments to discuss future issues related to the proposed auto parts factory. Learn how to advertise on Facebook Using Facebook as a channel to advertise is a marketing tool that should not be ignored, says the Vietnam Internet Association (VIA). It doesn't have to be complicated and it doesn't require a lot of money, says the VIA, and to help businesses learn how it’s done, a day-long seminar is set to begin at 7:20 am on July 10 at the Super Hotel Candle in Hanoi. At the seminar speakers will show local businesses how to use Facebook to drive online sales, increase local sales, promote apps and raise brand awareness in addition to teaching how to choose the right target audience. Key speakers include Facebook Account Manager Mai Huynh, Facebook Marketing Partners Team leader Vivek Vikram Singh along with Solutions Engineering Team members Karta Sutanto and Ling Jun Wong. For more information on registering to attend please contact the VIA at http://via.org.vn/en/. Vietnam acts to minimize impacts of Brexit on the economy The UK leaving the EU has greatly impacted the world economy. The EU is currently Vietnam’s second biggest export market with an annual turnover of US$30 billion. It is also one of Vietnam’s biggest investors and partners. Economists say Brexit could have a significant impact on Vietnam’s economy but in the long term it could open opportunities for the domestic market.  They recommended that Vietnam make prompt policy adjustments to stabilize the economy. The Pound Sterling and the Euro lost value against the US dollar following Brexit. The Pound fell from US$1.5 to US$1.33. This will affect Vietnam’s exports because most of its contracts are paid in US dollars, which will make Vietnamese products in the EU more expensive. Nguyen Tu Anh of the Central Institute for Economic Management (CIEM) said there will be fluctuations on the monetary market, prompting a number of countries including Vietnam to adjust their exchange rates. “Vietnam should be careful in adjusting the exchange margin rate, which currently at 3%. If the exchange rate on the market reaches its ceiling, then the basic rate should be adjusted. Vietnam’s exports in the first 5 months of the year decreased slightly so I think appropriate solutions are needed to achieve our 10% growth target”, said Dr Tu Anh. Brexit will also affect the implementation of the FTA Vietnam and the EU signed in 2015. Economist Can Van Luc said there are two possibilities: one is that the UK will withdraw from the Vietnam-EU FTA and it will take time for some commitments to be adjusted. The second possibility is that the UK will continue in the FTA even though it is no longer an EU member. Luc said that given either possibility, implementation of the FTA will be later than 2018. “All procedures are supposed to be reviewed and completed for the signing of the agreement this year. But as the EU and the UK are busy with Brexit, this process will be delayed. I hope that negotiation conditions and agreement clauses will not change. Otherwise it will take more time for the parties involved to complete all necessary procedures”, Luc emphasised. Trade and investment cooperation between Vietnam and the UK has grown steadily since they established a strategic partnership in September, 2010. In the long run Brexit could be an opportunity for Vietnam to diversify its export market and boost relations with other Asian countries. In addition to maintaining its exports to the EU, Vietnam will have to promote its export products and improve their quality towards securing a firm foothold in the UK market.     Binh Duong well-positioned to be major logistics centre The southern province of Binh Duong is expected to be a major logistics centre in the region on the back of its location near seaports and infrastructure, as heard at a local seminar held on June 30. The province is currently home to 21 bonded warehouses, two inland container depots and 31 customs agents which provide logistics services for exporters and importers, many of them meet international standards. Ha Thanh Hai from Box Pak Vietnam company based in the Vietnam-Singapore Industrial Park said Binh Duong is well-positioned to be the country’s major logistics hub but its small and medium-sized ports are yet to meet demand. Four out of nine river ports, including Binh Duong, Thanh Phuoc, Ba Lua and An Son, have been put into operation. However, increased transport costs also weaken logistics system’s competitiveness, he said. Vice Chairman of the provincial People’s Committee Tran Thanh Liem said Binh Duong has zoned off 10 river ports sprawling over hundreds of hectares, and nearly 100ha of inland container depots to develop logistics centres in Di An and Thuan An townships, towards establishing a chain of logistics services in the southern economic region, under a master plan with a vision until 2020. Forestry sector eyes growth target of 6.5 percent in H2 Striving for a 6.5 percent growth is a key task of the forestry sector in the second half of this year, said Deputy Minister of Agriculture and Rural Development Ha Cong Tuan at a conference held in Hanoi on June 30. Tuan set out a number of measures to achieve the target, including comprehensive shake-up and maintaining export revenue, which are significant to stabilise cross-sector linkages in forest protection and development, he said. He highlighted that restructuring must be done in 132 forestry companies to ensure efficient operation. The move also helps tackle overlapping forest areas illegally occupied by settlers. In addition to handing over forest land to businesses to branch out forestry, providing production land for the needy is another measure. Regarding forest destruction in some key regions like the Central Highlands and northwestern provinces, Tuan said that the forest ranger force needs to join hands with relevant agencies to handle any violations. Besides, the Ministry of Agriculture and Rural Development must review forestry mechanisms and policies, especially those for the Central Highlands, to ensure they are practical and feasible. Attention should be paid to attracting investments from local enterprises to assure sufficient capital to address the free emigrant issue – a key factor of deforestation. According to Nguyen Ba Ngai, General Director of the Vietnam Administration of Forestry, total forestry export revenue stood at over 3.3 billion USD in the first six months of the year, 507.7 million USD of which came from wood and wood-based product shipments. Vietnam has about 3.5 million hectares of commercial forest with 127,747 hectares for timber. Total commercial forest exploitation was estimated at 8.3 million cubic metres in the six-month period. By June 20, the country planted 23,622 hectares of forest, 11,338 hectares of which were contributed by hydroelectricity projects. Business registry increases strongly in Binh Duong The southern province of Binh Duong has seen the business registry of 1,684 enterprises since the beginning of this year, according to Nguyen Thanh Truc, Director of the provincial Department of Planning and Investment. These enterprises represent a combined capital of 8,403 billion VND (370 million USD). Of which, 285 increased their capital with 4,353 billion VND (191 million USD). Until now, the province has had 23,141 valid enterprises with a combined capital of 172,582 billion VND (7.6 billion USD), in which small- and medium-sized enterprises make up 95 percent. Truc said most enterprises registered as multi-sector businesses and mainly operate in trade and services (75 percent), industry and construction (24 percent) and others in agriculture, forestry, fishery and mining. The province has simplified administrative procedures to cut time for business registry from 15 to 8 days. Vietnam attends TPP forum in Mexico Over 65 percent of tariff lines will be lowered to zero for the products Vietnam imports from Mexico, right after the Trans-Pacific Partnership (TPP) agreement becomes effective, stated Vietnamese Ambassador to Mexico Le Linh Lan. Speaking at a forum on competitive challenges facing Mexico and new TPP partners in Mexico capital city on June 29, Lan affirmed that in the 10th year since the agreement comes into effect, 98 percent of tax lines will be removed. Mexico can export its outstanding products like automobile spare parts, timber, cattle feed, and beef to Vietnam. Meanwhile, Mexico pledged to remove tariff on 77.2 percent of tariff lines immediately after the TPP takes effect, and 98 percent of tariff lines after 10 year that. During discussions, the Vietnamese diplomat also answered local businesses’ queries on Vietnam’s market economy. She said that the market economy status of Vietnam has been recognised by 45 nations worldwide. She called on Mexican enterprises to come to Vietnam to seek business and investment opportunities in the country and anticipate opportunities brought by the TPP. Vice Chairman of the Mexican Business Council for Foreign Trade, Investment and Technology (COMCE) – the organiser of the forum, hailed the significance of signing the TPP in opening up more opportunities for numerous production sectors of Mexico. He asked Mexican businesses to bring into full play opportunities brought by the agreement and prepare to deal with competitive challenges of member states. The TPP involves 12 countries in the Pacific Rim - Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam - is scheduled to take effect in 2018. IFC and Armstrong invest in local hydropower  IFC, a member of the World Bank Group, and the Singapore-based Armstrong S.E. Clean Energy Fund invested in the Gia Lai Electricity Joint Stock Company (GEC) on June 30. IFC and Armstrong, with a combined stake of 36 per cent, will take a 16 and 20 per cent equity stake in GEC, respectively. For both investors, it is the first investment in Viet Nam's power sector. The investment will help the company expand its hydropower portfolio and invest in other renewable energy segments, such as wind and solar power. Based in the central highland province of Plei-ku, GEC is one of the largest private sector hydropower players in Viet Nam, with 84.4 MW of installed capacity across 15 run-of-the-river small-scale hydro power plants. Lê An Khang, CEO of GEC, said the investment will help them become a leading renewable energy company and provide sustainable alternatives to fossil fuel-based power generation in Viet Nam. Khanh added that it will boost local confidence in hydropower sector's potential and help attract more international investors. Local electricity consumption has outpaced the country's economic growth rate by two-folds over the past few years. With an expanding renewable energy portfolio, GEC will contribute to the government's goal of increasing Viet Nam's installed power capacity by 14 per cent per annum between 2015 and 2030. Considering GEC well positioned to capture the strong growth potential in Viet Nam's renewable energy sector, Andrew Affleck, managing partner of Armstrong, said, through the fund, which is dedicated to the clean energy sector in South East Asia's emerging markets, Amstrong will share its knowledge and experience of developing and constructing multiple renewable projects in neighbouring South East Asian markets to help GEC to continue to build a leading position in Viet Nam. By developing sustainable hydropower and other renewable energy sources, GEC will help the country meet its estimated 10 per cent annual increase in power demand, diversify its energy mix and reduce its reliance on imported fossil fuels. Hyun-Chan Cho, IFC head for Infrastructure and Natural Resources for Asia Pacific said, "IFC's investment is an important step to encourage other investors to tap into the rich potential of Viet Nam's green energy sector, where participation by foreign investors is still modest." He added that IFC's global industry knowledge will help transform GEC into a role model for other emerging renewable energy players in Viet Nam by showcasing best industry practices, while at the same time expanding supply of reliable and clean energy. Hydroelectricity is the world's largest source of renewable energy and accounts for one-fifth of the world's electricity supply from all sources. Over the last decade, IFC has invested more than $1 billion in 75 hydropower projects in 25 countries across the world to promote hydropower's responsible and sustainable development in developing countries. VN, Korea to boost electrical ties A Korea-Viet Nam forum to strengthen co-operation between their electrical industries was held in HCM City yesterday with more than 40 firms taking part. The Korean firms attending the event specialise in manufacturing equipment like transformers, solid reclosers and energy storage systems besides advanced OMR/AMR (offsite meter reading/automatic meter reading) solutions, billing systems and others. Luan Quoc Hung, deputy director of EVN HCM City's technical department, said his company's System Average Interruption Frequency Index (SAIFI), a measure used as a reliability indicator by power utilities, has improved from 28.85 times in 2010 to 6.72 times last year. Its average outage duration per customer served has also reduced from 3,964 minutes to 720, he said. The company wants to bring that down to 1.5 times and 150 minutes by 2020 to match neighbouring countries like Thailand, he said. Korea Electric Power Corporation (Kepco)'s SAIDI is currently only 11 minutes, the conference heard. EVN also aims to reduce power losses from 4.66 per cent last year to 3.5 per cent by 2020, Hung said. For these efforts, it hopes to acquire equipment and technology, including from Korea, he said Tran Khiem Tuan, deputy general director of EVN HCM City, said his company would upgrade the network and deploy sophisticated technologies to serve customers better. The forum provided a platform for businesses from the two countries to exchange information and seek closer co-operation, he said. Park Kwon Sik, executive vice president of Kepco, said with its technological advancement, Korea could help develop Viet Nam's electricity industry. The market offers Korean firms a good opportunity, he said. He said the Vietnamese Government should roll out policies to attract investment in this sector and establish a park exclusively for the electrical sector. The forum was organised by the Viet Nam Chamber of Commerce and Industry in HCM City, Kepco and the Korea Electrical Manufacturers Association. VIB: 5.5% interest rate for online term deposits Vietnam International Bank (VIB) will provide an annual interest rate of 5.5 per cent to enterprises opening online term deposits from July 1 to July 30. The high interest rate will be applied for deposits in dong with terms from one to five months, VIB said in its latest press release. "Digital banking is a trend seen in the global banking system. In Viet Nam, digital and e-banking have been developing significantly with many new products and services being introduced to customers," said Vuong Thi Huyen, VIB's head of Wholesale Banking. "With the vision of becoming the most innovative and customer-centric bank in Viet Nam, VIB continues to invest in digital (banking), making ongoing efforts to introduce new and innovative products and services to our customers," she said. VIB's online term deposit accounts will allow corporate customers to use its services without having to visit an office or branch of the bank. Customers will only need to access "MyVIB," VIB's popular and user-friendly mobile and Internet banking applications, or they can simply visit VIB's brand new Internet Banking website to register and use the service. The MyVIB mobile banking app was honoured with "Viet Nam's Outstanding Innovative Banking Product/Service Award" in 2015 from the International Data Group, in recognition of VIB's innovative approach through the introduction of the mobile banking app, new website and new VIB Apple Watch app. Korean Group builds biomass power plant in Quang Binh Dohwa Group from the Republic of Korea is scheduled to build a biomass power plant in central Quang Binh province in 2018, said the provincial People’s Committee. The plant, with a total investment of US$400 million and a capacity of 100MW is expected to generate electricity in early 2020. It will use around 500,000 tons of forestry residues and wood waste annually to generate electricity. Chairman of Quang Binh provincial People’s Committee Nguyen Huu Hoai said the province will create the best possible conditions for Dohwa to implement the project. Earlier this year, the province granted an investment licence for Dohwa Group to realise a wood pellets production project in Hon La industrial park. The project, which is valued at VND240 billion and will use materials from forest plantations, is expected to be operational late next year. New companies, shutdowns both rise at fast pace in Vietnam: data A total of 36,626 companies in Vietnam were closed in the first six months, or around 203 shutdowns a day, according to new data released by the Ministry of Planning and Investment. Among them, 5,507 have completed procedures for dissolution, up 17% from the same period last year. The rest were temporarily shut down, a rise of 15%. Most of the companies were small with a registered capital less than VND10 billion (US$441,950). On the other hand, 54,501 new businesses were launched in the first half of the year, an increase of 20%. Their combined registered capital was more than VND427.76 trillion (US$18.9 billion). Real estate recorded the highest growth with 1,354 companies launched, up 110.9 percent year-on-year. It was followed by health care and education sectors with the respective rises of 80% and 40%. Office demand in fast-growing Vietnam a boon to developers Prospects of strong economic growth and foreign investment are driving Vietnam's office property segment, with local and international developers both trying to grab the remaining prime locations in big cities quickly, industry insiders said. A group of US and Vietnamese investors have recently sought Ho Chi Minh City's permission to develop a US$4 billion complex of office and entertainment buildings, which is expected to be the city's new financial center. According to the plan, the complex will cover around 11 hectares at the new urban area Thu Thiem on the east of the Saigon River. Construction will be completed in more than three years. The project was proposed by investment company Cantor Fitzgerald, architectural company Steelman Partners, and Taiwan-based developer Weidner Resorts of the US's Weidner Holdings. Vietnam's trading company Imex Pan-Pacific Trading Group, known for operating a chain of duty-free shops and fast food restaurants at airports around the country, is their partner. The investors are among many developers who are seeking opportunities in the office property segment in Vietnam. Singapore's CapitaLand Ltd, for instance, is reportedly looking to invest in Vietnam's office property segment as the company seeks to grow its portfolio beyond residential and serviced apartments in the fast-growing economy. Pham Sy Liem, deputy chairman of the Vietnam Construction Federation, said the recent market reccovery has prompted many foreign developers to expand in Vietnam. "We are seeing a lot of both local and foreign investors and developers try to get a foothold the rapidly rising emerging office market," said Liem. Vietnam’s economy grew 6.68% in 2015, the fastest pace in five years, helped by an expanding industrial sector and record foreign direct investment. The government has also stepped up efforts to clean up bad debts in the financial system, some of them tied to property. In Hanoi, of the total supply, Grade A and B offices account for 36% and 64%, respectively, according to a report of property firm CBRE. Rental for Grade A office increased 0.5% to US$28.2 per meter in the second quarter of this year from the first quarter. Meanwhile, rental for Grade B office declined 0.6% to US$17.7 per meter. Around 715,000 square meters of office space across all grades are expected to come onto the city's market in the next two years. Based on CBRE’s enquiries, banking and finance, logistics and technology still remained the most active sectors during the first half of 2016. Most of CBRE enquiries were from Asia Pacific. Nguyen Hoai An, head of the Research, Consulting and Property Consulting, Valuation for Hanoi at CBRE Vietnam, said the country’s participation into the Trans-Pacific Partnership and the launch of the ASEAN Economic Community will boost foreign investment and result in higher demand for office and apartments for rent. “To the office property segment, Vietnam is a potential market to long-term investors,” she said. According to CBRE, Hanoi and Ho Chi Minh City are short of high quality office buildings in prime locations, where many foreign companies want to rent for locating their offices. Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association, said it is time for foreign developers to invest in office projects in business districts of major cities. There are fewer large land lots for the such projects, he said. Only investors with strong financial capacity could implement the projects because it will take a long time to recoup the capital spent on prime locations, Chau added. Many investors have recently chosen to enter the market by taking over existing estates. Foreign and Vietnamese investors spent at least US$1 billion in deals to acquire real estate projects in the first three months this year, according to the Ministry of Planning and Investment. Early this month, Singapore-based Mapletree Investments said it has acquired Kumho Asiana Plaza Saigon Company in Ho Chi Minh City from Kumho Industrial and Asiana Airlines. Mapletree said in a statement that the deal is its largest acquisition involving a completed, income-producing property in Vietnam. Kumho Asiana Plaza in District 1 houses offices, serviced apartments and a hotel managed by InterContinental Hotels Group. Hiew Yoon Khong, CEO of Mapletree, said his group is also keen to invest in opportunities to develop office, retail, residential, serviced apartment and mixed-use developments, either on its own or with local partners. Mapletree entered Vietnam in 2005 and has since expanded into industrial parks and acquired several development assets in Hanoi and Ho Chi Minh City. It is developing Saigon South Place, a 4.4-hectare mixed-use project in District 7. Work on a 30,000-square-meter office tower, as part of the project, is expected to be finished by the end of this year, while construction of a serviced apartment building and a residential block is scheduled for completion in early 2018. Earlier, Singapore’s real estate company Frasers Centrepoint Limited (FCL) said it will develop a residential and office project in Ho Chi Minh City with a local partner. The project, located on a one-hectare prime residential site, is expected to comprise condominium units, serviced apartments, offices and retail shops. FCL now owns an office building, Me Linh Point, in Ho Chi Minh City, and is also managing two serviced apartment properties. "The macro trends in Vietnam, such as a growing middle class, rising urbanization and increasing income, coupled with the improving financial environment and relaxation of foreign investment rules, make this an exciting time for real estate in Vietnam," said CEO Lim Ee Seng. EU protects 39 Vietnam GIs The European Union (EU) has agreed to protect 39 geographical indications (GIs) of Vietnamese goods after the Vietnam-EU Free Trade Agreement (EVFTA) comes into effect, according to the Ministry of Agriculture and Rural Development (MARD). EU protected geographical indications (PGIs) covers vegetables and fruits (49%), industrial and processing goods (15%), seafood and seafood products (13%) and other goods (13%). In fact, Vietnam has only one product – Phu Quoc fish sauce, which is formally registered as PGI in the EU. Meanwhile the market granted PGI status to 7,000 products globally. Having PGI registered in the EU helps Vietnamese products easily penetrate the huge market and be protected there, said the MARD representative. PVN sees revenue target unobtainable Vietnam National Oil and Gas Group (PVN) could miss its revenue target for this year as less than 40% of its goal in the first half has been met due mainly to low oil prices on global markets. In the first six months of the year, the firm has earned only US$2.41 billion from selling 8.68 million tons of crude oil and condensate, only 37.15% of the full-year revenue target. It said the average oil price in January-June is a mere US$40.33 per barrel, US$20 lower than the US$60 per barrel target as approved by the National Assembly based on reports of the Government and PVN submitted to the legislature earlier. PVN has worked with its partners at home and abroad to optimize exploration projects and cut exploration costs as a measure to deal with the low global oil prices. PVN hopes to sell 3.59 million tons of crude oil and condensate in the second half. Of the total, 3.42 million tons will be pumped from oil wells in Vietnam’s waters and 0.08 million tons will be imported. The total figure includes 3.5 million tons to be supplied to Dung Quat Oil Refinery in the central province of Quang Ngai. PVN aims for revenue of US$7.05 billion this year. However, it is grappling with a host of difficulties, particularly in the aftermath of Britain’s vote to leave the European Union (EU) last week. Brexit has affected the steady recovery of the world oil price in recent months. Major international credit institutions forecast that the world’s demand for oil would slide by 130,000 barrels per day due to Brexit, down 0.1% compared to the current volume. This will certainly impact PVN’s revenue. Textile-dyeing sector lacks skilled workers Enterprises in the textile and dyeing sector are struggling to find skilled laborers to carry out their expansion projects to cash in on opportunities from Vietnam’s stronger international integration, heard Vietnam Textile Summit 2016 in HCMC on June 29. Speaking at the second summit co-held by the Vietnam Cotton and Spinning Association (VCOSA) and Shanghai-based conference organizer ECV International, Truong Van Cam, vice chairman of the Vietnam Textile and Apparel Association (VITAS), said the current labor force structure really backs development orientations for the apparel sector. He cited statistics as saying that young laborers aged between 15 and 29 account for 26% of the country’s total workforce and female workers make up almost half of the number of people of working age. Female workers register 75% of total headcount in the textile and garment sector. However, textile and dyeing enterprises are short of skilled labor. “A majority of Vietnamese enterprises in the sector did not have sufficient capital to buy modern technologies in previous years. Now they lack competent people who can use advanced technologies,” Cam said. VCOSA vice chairman Nguyen Son said it would take years to train employees as most of them are not tech-savvy as they come from rural areas where vocational training is poor. To build a core workforce, foreign companies often train them in Vietnam or abroad, and they can replace foreign experts after about three years of training. Son suggested textile and garment firms collaborate with vocational schools to launch short-term courses targeting fresh graduates to meet their employment demand. VCOSA chairman Nguyen Van Tuan said foreign direct investment (FDI) approvals for textile and garment projects have increased rapidly in recent years. Foreign firms have registered a total of US$8.2 billion for such projects in a 13-year period ending in 2013, including US$5.8 billion for apparel projects and US$2 billion for fiber production. FDI pledges for textile and garment projects in 2014 and 2015 amounted to US$5.8 billion, with US$3.3 billion going to cloth production and registered by investors from China, Taiwan and South Korea. By end-2015, fiber output had risen to 1.1 million tons a year and enterprises had churned out 8.9 million square meters of cloth. However, Vietnam has to import 6.44 million square meters of cloth a year. To meet the export revenue target of US$50 billion by 2025, the apparel sector expects to double its workforce to five million workers, up from 2.6 million in 2015. Vietnam exporters urged to tap into Cuban market Cuba relies largely on imported products and has recently opened its market to foreign investors and traders, and this is a big opportunity for Vietnamese exporters to boost exports to that market. Cuban Ambassador to Vietnam Herminio López Diaz showed the opportunity for Vietnamese firms at a recent business conference in HCMC. The event was organized for Vietnamese enterprises to meet leaders of Cuba-based Foreign Trade Business Group (Gecomex), which consists of 18 companies active in import and export operations. Last year, Cuba spent US$6.7 billion on imports, but shipments from Vietnam made up only US$214.6 million. Therefore, there is an opportunity in the Latin American market for Vietnamese firms to bank on, said Tran Ngoc Thuan, deputy general director of Thai Binh Investment Trading Corporation (Thai Binh Corp). Gecomex director Aurelio Mollineda said Cuba has high demand for imported food, pesticide, fertilizer, carton cardboard, plastics, tires and agricultural machinery and tools. Thuan, who has more than 20 years of experience in trade and investment in Cuba, said the country has high demand for apparel, building materials, chemicals and cosmetics. He gave positive figures on economic performance in Cuba, saying the country achieved gross domestic product (GDP) growth of 4% last year, the highest in seven years, thanks to improved diplomatic relations with the U.S. Cuba’s GDP is forecast to grow 4-5% in the following years, mainly driven by tourism. Thuan called for Vietnamese firms to consider forming joint ventures with Cuban companies to implement real estate, restaurant and tourism projects. Meanwhile, Mollineda advised Vietnamese exporters that seek to export products to Cuba to work with Thai Binh Corp, Gecomex companies and other Cuban companies to survey the market and cut business deals with Cuban counterparts. In March this year, Cuba allowed the use of the U.S. dollar to settle payments for international deals, but such payments have yet to go smoothly as Cuban banks need more time to process them and improve procedures, Mollineda said. Wooden goods exports forecast to drop this year Revenue from wooden products exports is projected at US$7.4 billion this year, US$200 million lower than targeted, the Vietnam Timber and Forest Products Association (Vifores) said. The association’s vice chairman and general secretary, Nguyen Ton Quyen, was quoted by the Vietnam News Agency as saying that outbound sales of wooden products in the first half of 2016 are estimated at US$3.17 billion, a year-on-year decrease of 0.1%. Quyen pointed out a sharp drop in wood chip exports in the period as one of the reasons. Vietnam ships abroad 3.4-4 million tons of wood chips worth about US$850 million a year. But since the Ministry of Finance’s Circular 182/2015/TT-BTC on preferential export and import tariffs on taxable items was effective on January 1, export duties for wood chips have been adjusted up from 0% to 2%, leading importers to cut purchases and prices by US$8-10 per ton. About one million tons of wood chips has been in stock in the northern provinces of Tuyen Quang, Phu Tho and Yen Bai and about to be discarded due to weak demand of importers, including China. Quyen said export of outdoor furniture, which mainly goes to the European Union (EU), has dropped in the January-June period, and the UK’s vote to leave the EU would impact shipments of wooden goods to the UK in the coming time. The sterling and euro have dipped significantly against the U.S. dollar as a result of the UK referendum, which is often called Brexit, while the Vietnam dong has weakened slightly against the greenback. This will erode the competitiveness of Vietnamese wooden products in the EU and exports to this market are projected to go down. Every year the UK imports only US$100 million worth of wooden products from Vietnam. Major export earners are outdoor furniture, wooden chairs, and bedroom and office furniture. Data of the Ministry of Agriculture and Rural Development showed that the U.S., Japan and China have remained Vietnam’s top three importers of wooden products, accounting for nearly 68% of the total. The EU comes fourth. Ha Giang eyes trade representative office in Japan Vice Chairman of the Ha Giang provincial People’s Committee Nguyen Minh Tien has called on Japan’s Vietnam Economic Research Institute (VERI) to assist the locality in opening a representative office in the country in order to promote trade between the two sides. At a working session with a VERI delegation on June 30, Tien suggested the Japanese institute help Ha Giang train skilled workers who can meet requirements set by the Japanese market. He also called for the institute’s support in product development and tourism promotion in the northern mountainous province. The official used the occasion to brief his guests on Ha Giang’s socio-economic achievements as well as its economic potential and advantages. Hailing Ha Giang’s efforts in investment attraction and investment climate improvement, VERI Chairman Inoue Toshio affirmed that his institute wishes to cooperate with the province to promote its image in Japan. VERI will work as a bridge for Japanese businesses to invest in the province and help the locality maximiseits potential and strengths to boost socio-economic development and poverty reduction, and narrow its development gap with other provinces in the region, he said. Earlier, the Japanese delegation made a field-trip to An Vy Medicine Development JSC and a community-based tourist site in Nam Dam village, Tam Son town, Quan Ba district, a centre of plant and cattle breeds and Vuongfamilyresidence relic site in Dong Van district, and a tea growing area in Hoang Su Phi district and an orange farm in BacQuang district. Since its inception in 1991, VERI has provided consultations for nearly 1,000 Japanese enterprises who want to invest in Vietnam. Thank s to the advice, many Japanese firms have operated successfully in the Southeast Asian nation Nghe An works to attract foreign investments The central coastal province of Nghe An has paid heed to renovating and enhancing promotional activities to draw investment from such key partners as Japan, the Republic of Korea (RoK), Singapore and Thailand. The move is significant as it will create jobs for local labourers while increasing the budget collection and giving a push to the provincial socio-economic development. Along with keeping close inspection on low-speed projects and addressing difficulties for investors, the province has also joined hands with relevant ministries and agencies like the Korean Trade-Investment Promotion Agency, the Japan External Trade Organisation and the Foreign Investment Agency to promote foreign investment in the locality. Furthermore, it is consolidating relations with its existing non-governmental organisations and seeking to cooperate with other potential non-government ones to mobilise sponsorship. From the outset of this year, the province granted licenses and revised investment certificates to 34 projects with total registered capital of 19 trillion VND (852.8 million USD). The province is working with Thai Hemaraj group and the RoK’s TA-Trading Co., Ltd to carry out projects on industrial and urban area development, forest plantation and high-tech waste treatment.- Khanh Hoa runs trade surplus of over 280 million USD The central coastal province of Khanh Hoa shipped abroad over 607 million USD worth of goods and imported 326 million USD in the first half of this year, resulting in a trade surplus of more than 280 million USD. According to the provincial People’s Committee, vehicles, spare parts, wood and timber products, and seafood were among the products recording the highest export turnovers. Meanwhile, the locality mainly imported materials for seafood processing and shipbuilding, machines and equipment. 2016 is expected to be the fifth consecutive year Khanh Hoa has breached the 1 billion USD export turnover mark, with the highest ever figure of 1.3 billion USD, the committee said. To that end, the province will step up administrative reform and business climate improvement, improve integration capacity for local enterprises and expand its export market. MSN acquisitions a step closer to ambitions Masan Nutri-Science, a subsidiary of Masan Group, announced yesterday that it had acquired the remaining 30 per cent of animal feed subsidiary Agro Nutrition Company JSC (Anco), and at the same time increased its ownership in the country’s leading meat processor VISSAN to 24.9 per cent from the previous 14.0 per cent. These moves are consistent with Masan Nutri-Science (MSN)’s strategy to expand and deepen its presence in the meat value chain. The Anco acquisition was made by a share swap, following which MSN's effective ownership in itself decreased from 100 to 86 per cent. For VISSAN, MSN announced spending an average VND106,000  ($4.82) to buy each share of the market-leading meat player,  32 per cent higher than the IPO price of VND80,053 ($3.64). According to Viet Capital Securities Company, MSN is estimated to have spent roughly VND2.2 trillion ($100 million) to acquire the entire 24.9 per cent stake. MSN is willing to pay such a high premium because a partnership with VISSAN is important to get closer to realising MSN’s feed-farm-food value chain ambitions. In March this year, MSN (via its subsidiary Anco) beat South Korean conglomerate CJ to become VISSAN’s strategic investor, and acquired 14 per cent in the prized state-controlled company. Anco bought 11.3 million VISSAN shares for more than $63.1 million, or VND126,000 ($5.75) apiece, one-upping CJ's bidding price of VND120,600 ($5.48) per share. Despite failing to become a strategic partner of VISSAN, CJ already acquired a 4.18 per cent stake in the company at its initial public offering. Vietjet signs agreement with Incheon Tourism Organization Vietjet Air and the Incheon Tourism Organization (ITO) in South Korea signed a cooperation agreement on June 30 in Ho Chi Minh City to provide travel products, services, and convenient tour opportunities to Vietnamese traveling to South Korea. The ITO will offer convenient services and organize events solely for Vietjet passengers at tourist attractions and destinations in Incheon city. Vietjet in return will launch promotional programs and entertainment activities to attract tourists to the city. In the first half of the year Vietnamese tourists to South Korea totaled 112,746, a 40.4 per cent increase year-on-year and up 60.4 per cent up against the same period of 2014, a workshop held on June 30 in Hanoi, organized by the Korea Tourism Organization, heard. Vietnamese traveling to South Korea for healthcare reasons have increase remarkably, by 30 per cent each year. “I believe that this agreement will create more tourism opportunities and provide friendly tourism services to best meet passenger demand,” said Mr. Nguyen Thanh Son, Head of Vietjet’s Commercial Department. He added that in doing so Vietjet is trying to bring top quality and friendly aviation services to passengers. Vietjet is the first airline in Vietnam to operate as a new-age carrier, with low-cost and diverse services to meet customer demand. It provides not only transport services but also uses the latest e-commerce technologies to offer various products and services to passengers. It recently secured IOSA certification from the International Air Transport Association (IATA) after just three years of operations. It was also among the Top 500 Brands in Asia 2016 and named “Best Asian Low Cost Carrier” at the TTG Travel Awards 2015, based on votes from travelers, travel agencies and tour operators in Asia. The airline was also rated as one of the Top 3 fastest-growing airline brands on Facebook by Socialbakers. Vietjet now boasts a fleet of 40 aircraft, including A320s and A321s, and operates 300 flights each day. It has opened 53 routes in Vietnam and across the region, to destinations such as Thailand, Singapore, South Korea, Taiwan, China and Myanmar. It has carried nearly 25 million passengers to date. Looking ahead, the airline plans to expand its network throughout the region. To prepare for this plan, Vietjet has signed agreements with the world’s leading aircraft manufacturers to purchase more modern aircraft. In 2014 it signed a contract to purchase 100 Airbus aircraft and last May also put pen to paper with Boeing to purchase 100 737 MAX 200 aircraft, costing $11.3 billion; the biggest agreement in the history of trade relations between Vietnam and the US. VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR