BUSINESS IN BRIEF 2/9 UOB and ORIX invest in Vietnam's leading private hydropower company   UOB Venture Management Pte Ltd (UOBVM), a wholly-owned subsidiary of United Overseas Bank Limited, and financial company ORIX Corporation (ORIX), on September 1 announced that they will each invest $25 million in one of Vietnam’s largest privately-owned hydropower companies, Bitexco Power. Bitexco Power owns and operates 18 hydropower plants in Vietnam with a gross power capacity of around one gigawatt (GW). The existing capacity can generate about 3,500 gigawatt-hours (GWh) of renewable energy annually, which is enough to provide electricity for about 2.7 million people in the country. Bitexco Power plans to use the new capital for business expansion and further consolidate its market-leading position in the renewable energy sector. “The acquisition of shares by globally-renowned institutions - UOB and ORIX - will enable Bitexco Power to continue its rapid growth in the increasingly dynamic Vietnamese renewable energy space. It is also a reflection of their confidence in our ability to meet international corporate governance standards and our business plan execution, necessary to deliver long-term value to stakeholders and to contribute to the growth of the country,” said Ian Fox, CEO of Bitexco Power. With the rapid growth of the Vietnamese economy over the past decade, power consumption has been rising dramatically. General Statistics Office of Vietnam estimated that electricity demand will continue to expand at an annual growth rate between 10 and 12 per cent, rising from 169.8 terrawatt-hours (TWh) in 2015 to 615.2 TWh by 2030. “We believe Vietnam’s growth will continue to drive the demand for renewable energy. By investing in Bitexco Power, we hope to participate in the growth of the power sector and play a role in the country’s economic transformation,” said SeahKian Wee, managing director of UOBVM. Established in 1992, UOBVM has provided financing to more than 100 privately-held companies through direct equity investment, mainly in Southeast Asia and Greater China. UOBVM manages about $733.2 million in assets. The new investment will be allocated through from its ASEAN China Investment Fund III. This fund invests in growth-oriented companies in Southeast and East Asia, with an emphasis on the 10 countries of the ASEAN and China. “Bitexco Power is our first investment in the Vietnamese power sector, which shows strong growth potential. We believe Bitexco Power is in the best position to benefit from the country’s on-going reform of the electricity market, underpinned by the rising demand for electricity. Following this investment, we are pleased to announce our further business expansion in the renewable energy sector across Asia,” said Yuichi Nishigori, corporate executive vice president of ORIX. ORIX Corporation (TSE: 8591; NYSE: IX) provides products and services in lending, investment, life insurance, banking, asset management, automobile-related operations, real estate, and environment and energy-related businesses. It has offices in a total of 37 countries and regions across the world. DAG secures lucrative deal in Brazil Dong A Plastic Group (DAG) has just expanded its global reach by signing a contract with Brazilian building materials trader Al Importacao e ExportacaoEireliEpp. According to the contract, in August DAG is going to export $1.5 million worth of aluminium composite panels (DAG Alu) and Hiflex PVC banner materials to Brazil. DAG currently produces Hiflex at a capacity of 10 million square metres per year. The material is a mixture of PVC and synthetic fibres, especially fire-resistant synthetic fibre that is waterproof and slow to burn, produced using German technology. The aluminium composite panel is produced using Taiwanese technology and is consistent in thickness and makeup, making it very flexible and resistant to sudden shocks and impacts. It is therefore a very popular choice in construction. According to Al Importacao e ExportacaoEireliEpp, Latin America’s demand for building material is very high and it is still growing as people want to build new and renovate old houses and the country is carrying out a large number of sizeable construction projects. DAG plans to start operating an additional 30 plastic profile production lines, raising its plastic profile production capacity to 50,000 tonnes per year. DAG is now the biggest Vietnamese producer of profiles, competing with imports from the EU and China. Besides selling on the domestic market, DAG is going to increase exports in order to create a momentum for growth. Shares sink, ending four-day rally Shares sank for the first time in the past five sessions yesterday as investors increased selling to realise short-term cash profits. The benchmark VN-Index, the measure of 310 stocks on the HCM Stock Exchange was down 0.8 per cent to close at 669.2 points. It rose nearly 2.5 per cent over the last four sessions. Large-cap stocks led the downturn with 18 of the 30 largest stocks tumbling and only five maintaining slight gains. The key shares of Vietcombank (VCB), dairy firm Vinamilk (VNM), private equity Masan Group (MSN), PV Gas (GAS), Vietinbank (CTG) and real estate giant VinGroup (VIC) took away nearly five points, or 0.8 per cent, of the market. Shares in Vietcombank extended losses to three consecutive days, lifting total losses to 8.7 per cent yesterday. Others declined between 1 per cent and 3 per cent. “An unexpected market correction occurred today due to selling pressure on some key stocks, and selling pressure from foreign investors,” TrầnThăng Long, head of analysis at BIDV Securities Co wrote in a note. Foreign investors remained net sellers in HCM City’s market yesterday, responsible for a net value of VND187.5 billion (US$8.4 million). It sold a total net value of VND335.5 billion in the last three days. Vietcombank and Vinamilk were sold the most heavily, for a net value of VND129 billion and VND61 billion, respectively. Besides blue chips, the money focused on smaller capitalisation stocks in the sectors of technology, pharmaceuticals and rubber, like the Southern Rubber Industry (CSM), furniture maker Duc Long Gia Lai Co (DLG), sugar producer Thanh Thanh Cong Tay Ninh Co (SBT) and software producer FPT Co (FPT). “Markets can test the resistance level of 660 points, again affected by portfolio reallocation of exchange-traded funds,” Long said. On the Hanoi Stock Exchange, the HNX-Index, a tracker of 379 stocks, inched down 0.4 per cent after two rising sessions, ending at 84 points. Liquidity slightly decrease with a total of 142 million shares worth nearly VND3.3 trillion traded in the two markets, down 9.6 per cent in volume and 5.7 per cent in value from Wednesday’s levels. The local market is closed today for National Independence Day. Construction of VN’s biggest zoo speeds up The construction of the long-delayed amusement park and zoo in Vietnamhas sped up since the government of HCM City has allowed Vinpearl Joint Stock Company (Vinpearl) to work with a foreign partner, which is drawing up detailed plans. In an official letter signed by Deputy Chairman of HCM City Le Van Khoa, the city government suggested that Vinpearl cover all expenses for the design of the US$500-million Sai Gon Safari Park. According to the letter, if the design is not approved by the city, the company should cover all expenses it has had to pay. The HCM City People’s Committee has assigned the Department of Planning and Architect to inspect the 1/2000 zoning plan and report to the city government. The city’s Department of Natural Resources and Environment was asked to coordinate with Cu Chi District’s government in announcing the plan to use land for the park. The Department of Transport was asked to work with Vinpearl for road connectivity to the park, including bus route and expansion of Nguyen Thi Ranh Street. According to the city’s Department of Planning and Investment, the Sai Gon Safari Park will be built on 456.85 hectares of land. The Zoo and Botanical Garden Company, which was a former investor of the project, has received 403.5 hectares of land. The project affects 705 households in the region. Compensation was paid to 688 households, and 17 others have not reached a compensation agreement with the local government. The city started site clearance work in 2004, relocating around 700 families. The delay has caused frustration among affected families, with many asking to return. After being delayed for 12 years, reportedly due to a lack of funding, the project was handed over to Vinpearl, also the developer of the country’s first safari park in the southern island of Phu Quoc. The park will consist of an open zoo, a night safari, a butterfly garden, a botanical collection, a natural museum, a flora and fauna research centre, and a picnic site, as well as other support facilities. The park will be home to more than 300 animal species with 10,000 animals and 3,000 kinds of plants. Ministry cracks down on taxi firms The Ministry of Transport has required the Hanoiand HCM City transport departments to promote management, inspections and penalisation of under nine-seat automobiles under transport contracts, Uber taxi and Grab taxi. This action is apart of the ministry’s pilot plan on applying science and technology for the management and connection of activities transporting passengers under contracts. Under the plan, enterprises that have been granted licenses for passenger transport services under contract would use an app for booking tickets via mobile phone for their customers. Initially, the plan was for five provinces and cities, including Hanoi, HCM City, Da Nang, Quang Ninh and Khanh Hoa. So far, the ministry has received the plan on applying science and technology for the management and connection of transport activities from Grab Taxi Ltd Company and ÁnhDươngVietnamJoint Stock Company. It has also had guidance for those companies to implement their plans. However, some other household transport services have not complied with existing regulations, including having no badge of contract , signing contracts with companies providing software that was not suitable with the existing regulations and not paying taxes. For Uber Taxi, the ministry has worked with company often and also guided it to build a pilot plan on applying science and technology for the management and connection of transport activities but at present, the ministry and relevant state offices have not received a plan from Uber Taxi. Based on the practice, the ministry has ordered the transport departments of Hanoi and HCM City to continue guiding transport companies in the two major cities in implementing their plans on applying technology for the management and connection of transport activities and also to provide a list of under nine-seat cars granted badges of contract for tax offices to promote inspection of tax payments, reported zing news. The Hanoi and HCM City transport departments have directed inspectors of the departments to coordinate with police and tax offices in the two cities in promoting the inspection and penalization for cases in violation, especially the case of using software not suitable with the current regulations. The ministry has required the two departments to report on the results of the management, inspection and penalization of under nine-seat cars, Uber Taxi and Grab Taxi before September 20, 2016. Turkey to tax VN plywood Turkey has decided to levy an anti-dumping tax of US$240 per cubic metre on Vietnamese plywood products. The Vietnam Competition Authority under the Ministry of Industry and Trade on Tuesday said that the Turkish Ministry of Economy (TMoE) has issued its final decision on the anti-dumping investigation into plywood imported from some countries including Vietnam . The TMoE reported that only two Vietnamese businesses won’t have the anti-dumping tax imposed upon them, as they had provided full information to investigative agencies on schedule and proved that the exported products were made by themselves. The decision will come into effect soon now the TMoE has officially announced it. However, Vietnamese plywood producers could send feedback on the investigation before this Friday. Turkey initiated an investigation on May 27, 2015 into a possible avoidance of anti-dumping tax on plywood with HS codes 4412.10; 4412.31; 4412.32 and 4412.39 imported from some countries including Vietnam since 2010. Earlier in 2006, Turkey imposed anti-dumping duties of $240 per cubic metre on similar products from China. The Vietnam Embassy’s trade office in Turkey said on Monday that the TMoE’s General Directorate of Imports (GDI) also issued its decision on the anti-dumping investigation into polyester textured yarn imported from some countries including Vietnam. Accordingly, it will impose anti-dumping margins of 34.81 per cent to 72.56 per cent on products from Vietnam and 8.48 per cent to 37.69 per cent on Thai products. It said relevant businesses could send petitions and feedback before September 5. It will hold hearings for each business on September 7 and open hearings on September 8. The decision will be submitted to the Minister of Economy in late September to issue a final decision in the first week of October. The GDI began investigations on May 15 2015, after Korteks Mensucat Sanayive Tic. A.S. lodged its anti-dumping lawsuit on imported polyester textured yarns with HS codes of 5402.33. Global drug company Abbott buys VN’s Glomed Global healthcare company Abbott announced on Tuesday that it has acquired Glomed Pharmaceutical Company Inc (Glomed), a leading Vietnamese drug manufacturer. It did not disclose the financial details of the deal. “This acquisition will further strengthen Abbott’s ability to serve patients in Vietnamwith innovative, high-quality healthcare solutions that allow them to live a healthier life and reach their full potential,” NgôVănHuy, general manager of Abbott’s pharmaceuticals business, said. “The company intends to build on Glomed’s success to date to ensure long-term growth in the country.” The expansion of Abbott’s drug business in Vietnam builds on its leading position in nutrition and a strong portfolio in medical devices and diagnostics. The acquisition also makes Abbott one of the top 10 pharmaceutical companies in Vietnam . In addition to two manufacturing facilities in Binh Duong Province, Abbott also gains a portfolio of drugs that is well aligned with its current therapeutic areas of focus in anti-infective medicines; gastroenterology; pain management; cardiovascular, respiratory and women’s health; and over-the-counter products. Coal investments to be reduced The total capital demand of the domestic coal sector by 2030 would be around VND269 trillion (US$11.9 billion), 2.5 times less compared with the previous master plan. This information was released at a ceremony to announce a new master development plan for the coal sector by 2020 with a vision towards 2030 held yesterday in Hanoi. Trinh Duc Duy, deputy director of the Coal Industry Department under the Ministry of Industry and Trade said that the average capital demand would be VND17.9 trillion a year. In the period of 2016-20, the capital demand would be VND109 trillion in total. The capital would be focused on investments and the expansion of coal projects. It could be arranged from a combination of different sources such as commercial loans, preferential loans and mobilising on the stock market. Under the new master plan, exploitation in the northeast coal basin would be completed by 2020 to ensure reserves and natural resources. The Red River delta coal basin, the exploitation at Nam Thinh and a part of Nam Phu 2 in the northern Thai Binh Province’s Tien Hai District would be completed before the year of 2020. Nguyen Khac Tho, deputy director of the ministry’s General Directorate of Energy said the ministry announced the new master plan because the demand for coal in sectors that used a lot of energy such as thermal electricity and cement had seen many changes. “The new plan has updates to suit the sector’s current reality though the old plan has so far met with the energy demands of the country,” Thọ added. Accordingly, coal output would be sharply reduced from 60-65 million tonnes by 2020 under the old plan to 47-50 million tonnes in the new one. The coal output would also be reduced by 2030 from 75 million tonnes to 55-57 million tonnes. The reduction in coal output would be one of the reasons for lower capital demand, he said. He said that the new plan has taken into account several plans to ensure the capital by mobilising build-operate-transfer (BOT) and public-private partnership (PPP) models. “The target of the coal sector is to meet the coal demand of local households and to ensure energy security,” he added. The sector also targeted to reduce coal losses to 20 per cent in underground coal mines and in open-pit coal mining to 5 per cent by 2020. The plan aimed to exploit, process and use coal effectively to save the natural resource. The Government would give priority to domestic coal demand and consider gradually reducing overall exports as well as exporting types of coal that are not in high demand in the country. The plan also pays attention to promoting the application of advanced technologies in coal exploration, exploitation and processing for the sector’s sustainable development. The deputy director also affirmed that firms would be encouraged to import coal if they meet with regulations. The imports would not affect the National Coal and Minerals Industries Holding Group (Vinacomin). Statistics from the ministry show that the total coal reserves of the country was 48.88 billion tones. Shares rise on Vinamilk and FPT Shares extended gains to four days in a row yesterday as investors continued to collect large-cap stocks, particularly shares to be sold by the Government. On the HCM Stock Exchange, the VN-Index added 0.3 per cent to close the session at 674.6 points. The Index has increased nearly 2.5 per cent in the last four sessions. The HNX-Index on the smaller exchange in Hanoi was up 0.8 per cent to end at 84.4 points. It rose 0.6 per cent on Tuesday. Large-cap shares were mixed. The shares which would be sold by the State Capital Investment Corporation (SCIC) to reduce the State holdings in big companies like dairy firm Vinamilk (VNM), software producer FPT Corp (FPT), Bao Minh Insurance (BMI), Binh Minh Plastic (BMP) and Tien Phong Plastic (NTP) rose strongly. The biggest listed stock Vinamilk gained 2.5 per cent while others climbed between 3 per cent and 4.5 per cent. In mid-August, the Government asked SCIC to draw up a roadmap for selling State holdings in 10 big State-owned enterprises, of which eight businesses are listing shares on the two national stock exchanges with a combined market capitalisation of around US$4.5 billion. On the other end of the spectrum, some blue chips declined and restrained the market. Big losers included real estate giant VinGroup (VIC), Masan Group (MSN), insurer Bao Viet Holdings (BVH) and lender BIDV (BID). Besides blue chips, many investors focused on realty and steel stocks with eight of the top 10 most active codes from property and steel manufacturing firms. Each of these shares saw between 2.7 million shares and 5.9 million shares change hands. Prices of these shares also increased 1-4 per cent. “Market development remained positive and facilitate trades in the short- and medium-term period,” stock analysts at Maritime Bank Securities Co wrote in a report. Growth of leading shares in real estate, consumer goods and insurers, as well as improvement in liquidity showed a sign of a longer rise, the report said. However, it warned a short downward correction when the VN-Index approaches the 680 point level, driven by rising profit-taking selling pressure. A total of nearly 157 million shares worth VND3.5 trillion (US$157 million) were traded in the two markets yesterday, up 12.1 per cent in volume and 20.7 per cent in value over Tuesday’s figures. Foreign investors remained net sellers in the HCM City’s market but their net sell value decreased to VND31 billion from VND117 billion seen on Tuesday. They remained net buyers in the Hanoi’s market for a net value of VND14 billion. VN records $2.45b trade surplus in 8 months Vietnam enjoyed a trade surplus of US$2.45 billion in the first eight months of this year, a report from General Statistics Office (GSO) has revealed. The eight-month trade surplus was totally contributed by the foreign-invested sector, which posted an export surplus of $15.18 billion, while the domestic sector witnessed a deficit of $12.73 billion, Le Thi Minh Thuy, head of GSO, said. The country’s trade revenue topped $221.93 billion in the period. Of the sum, exports contributed $112.19 billion, surging 5.5 per cent against same period last year. The above-mentioned growth was, however, equal to two thirds of the target set earlier by the State, Thuy said. Export revenue of the domestic sector reached $32.62 billion, up 4 per cent year-on-year, while that of the foreign-invested sector stood at $79.57 billion, up 6.1 per cent year-on-year. Among the key export items witnessing significant turnover increases were mobile phones and components ($22.3 billion, up 11 per cent), garments and textiles ($15.5 billion, up 4.2 per cent), electronics, computers and parts ($11.1 billion, up 11.2 per cent) and footwear ($8.6 billion, up 8.1 per cent). Meanwhile, several other products witnessed export revenue reductions, including crude oil (some $1.5 billion, down 46.2 percent), rice ($1.5 billion, down 14 per cent), rubber ($887 million, down 4 per cent) and cassava ($698 million, down 26 per cent). The US remained the largest importer of Vietnamese goods with revenue of $24.6 billion. It was followed by the EU with $21.9 billion, China with $12.6 billion, Japan with $9.3 billion and South Korea with $7 billion, GSO said. From January to August, the country’s imports saw a yearly modest decline of 0.3 per cent to $109.74 billion. Imports of the foreign-invested sector plunged by 1 per cent to $64.39 billion, while that of the domestic sector experienced a slight increase of 0.5 per cent to $45.35 billion. Import items that recorded revenue reductions included machines, tools and spare parts ($17.7, down 4.2 per cent), materials for garments, textiles and footwear ($3.4 billion, down 0.3 per cent), animal feed ($2.1 billion, down 6 per cent), wood and wooden goods ($1.1 billion, down 21 per cent) and fertilizers ($748 million, down 18.6 per cent). Despite a yearly decline of 3 per cent in turnover, China continued to be the leading import market for Vietnam . During the reviewed period, Vietnam spent $31.6 billion on importing goods from this neighboring country, equivalent to one third of Vietnam ’s total import turnover. Wind power plant construction commences in Ninh Thuan The construction of a 37MW wind power plant began in PhướcDinh Commune, Thuận Nam District in south central Ninh Thuan Province yesterday. The MũiDinh plant costs nearly VND1.3 trillion (US$57 million), invested by Germany’s EAB Company. With 16 turbines spanning across 12ha, the plant is scheduled to be completed in 2017. This is the second wind power project launched in the province. On the occasion, the EAB Company donated $10,000 to the Association for Sponsorship of Poor Patients of Ninh Thuan Province and the Fund for the Poor in Phuoc Dinh Commune. VNS, VIR, dtinews